Soros Fund Management LLC, a firm run by George Soros, has pulled nearly $500 million investment from an account managed by Bill Gross at Janus Capital Group, Inc., people familiar with the matter told The Wall Street Journal.
Soros has pulled his entire investment from the account due to poor returns.
The Wall Street Journal adds that the money Soros Fund Management invested was held in a separate, institutional account that followed a similar strategy of Gross' mutual fund.
The strategy allows Gross to buy bonds of all kinds and bet against certain kinds of debt.
Todd Rosenbluth, the director of exchange-traded-fund and mutual-fund research at S&P Capital IQ, told The Wall Street Journal that investors took "a leap of faith" that Gross' new strategy was going to work.
He said, though, that the strategy "hasn't" worked.
The pullout was first reported Pensions & Investment when it said that data from eVestment LLC shows an unidentified institutional investor redeemed $490.1 million.
The investor redeemed the investment during the quarter that ended on September 30, 2015, and sliced about 23 percent of assets from Gross' strategy.
Pension & Investment adds that the withdrawal is a major setback for Gross, who joined Janus in late September last year following his sudden exit at Pacific Investment Management, Co (Pimco).
After Gross took over Janus' Global Unconstrained Bond Fund and associated portfolios, the initial inflows that the fund experienced has turned into recent net redemptions.
The Wall Street Journal adds that the bond fund had suffered from volatile performance.
The fund is also unable to gain any traction with investors.
The Wall Street Journal adds that data from Morningstar Inc. shows that Janus' Global Unconstrained Bond fund has lost about 1.5 percent so far this year through October 30, 2015.
Compare it with the 0.22 percent gain for its benchmark, which is the ICE Libor 3 Month USD, the fund has been lagging behind 74 percent of similar funds.
The Wall Street Journal adds that the withdrawal comes as Gross is engaged in a legal battle with Pimco.
Gross alleges, in a civil lawsuit he filed last month, that he was pushed out after resisting efforts to push Pimco in a riskier direction.
Pension & Investment adds that Pimco is the firm Gross co-founded four decades ago.
