Jeffrey Gundlach, manager of the top-performing DoubleLine Total Return Bond Fund, is expanding to variable annuities by subadvising a fund modeled after his flagship for Prudential PLC's Jackson National Life Insurance Co.
DoubleLine received a $450 million mandate from Jackson for the Curian/DoubleLine Total Return Fund, which plans to invest more than half its assets in mortgage-backed securities, according to a statement from DoubleLine.
The fund, to be run by Mr. Gundlach, DoubleLine's chief executive, and Philip Barach, its president, can also bet on junk bonds, bank loans and credit default swaps.
“This mandate marks the continuing institutional interest in DoubleLine's investment services and our channel diversification into the variable-annuity space,” Ron Redell, president of DoubleLine Funds Trust, said in the statement.
CLIENT BASE
The push into variable annuities helps diversify DoubleLine's client base as a three-decade-long bond bull market comes to an end. Mr. Gundlach has also expanded offerings by opening a floating-rate mutual fund, an equity small-cap-growth fund and an income-oriented closed-end fund.
DoubleLine subadvises funds for firms including Alma Capital Investment Management and RiverNorth Capital Management LLC.
Mr. Gundlach's $35.4 billion DoubleLine Total Return Bond Fund lost 0.2% this year through Sept. 20 to beat 89% of similarly managed funds and advanced 6.9% in the past three years to outperform 97% of peers, according to data compiled by Bloomberg.
The fund had its third straight month of net withdrawals in August, as clients fleeing bonds pulled $1.1 billion, according to Morningstar Inc. estimates.
The Prudential unit was the largest seller of individual U.S. variable annuities in the first half this year, according to data from LIMRA.
Rival Prudential Financial Inc., the top seller in the first half, fell to number three this year as the company reduced some guarantees on the products to help profit margins.
MetLife Inc., the largest U.S. life insurer, has also been retreating from the savings contracts.
