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Janus' Gross says Valeant based on leverage, financial engineering

Published 2016-03-22, 01:26 p/m
© Reuters. Janus' Gross says Valeant based on leverage, financial engineering
BHC
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By Jennifer Ablan
NEW YORK, March 22 (Reuters) - The business model of Valeant
Pharmaceuticals International Inc VRX.TO , target of a
securities investigation and under scrutiny for its pricing and
accounting practices, "was based on leverage and financial
engineering," fund manager Bill Gross of Janus Capital Group Inc
JNS.N said Tuesday.
In a tweet on the Janus Capital stream, Gross said: "Valeant
biz model was based on leverage and fincl. engineering. At the
extreme it mirrors global monetary policy and their economies."
Valeant was not immediately available for comment.
Gross said last week on Bloomberg TV that he sold the
Valeant bonds that were inherited in a Janus client account he
was overseeing.
"We sold the bonds the first day that the problems arrived -
and that was three months ago," Gross said.
Gross, manager of the $1.3 billion Janus Global
Unconstrained Bond Fund, said in a Janus video on Tuesday that
Federal Reserve officials appear to be focused on keeping the
stock market up and hoping that generates a "wealth effect."
"I think central banks have gone too far...certainly the ECB
(European Central Bank) and the BoJ (Bank of Japan) have gone
into negative territory and I think there are long-term
consequences for that," Gross said.
"The closeness to the zero-bound (interest rates) basically
robs savers of their ability to earn money and threatens
business models, such as insurance companies and banks in terms
of their margin - and certainly, pension funds in terms of their
ability to earn money."

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