Gundlach's DoubleLine Progress

Eric Jacobson: Hi, I'm Eric Jacobson, director of fixed income research for
Morningstar. We're here with Jeffrey Gundlach. Jeffrey is the chief
investment office and CIO of Double Line, a new firm that he
started up after leaving TCW recently. Jeffrey, thank you very
much for joining us today.

Jeffrey Gundlach: Thanks for coming, Eric.

Eric Jacobson: So Jeffrey, I think a lot of people are very interested to hear the
progress of what's going on with your work. We were just talking,
and you said that the firm's been up and running for more than a
few days now. I gather that you're working toward a lot of the
regulatory requirements to get the business bigger and broader. But
you mentioned that you're already starting to take in some assets
and so forth, so maybe you can tell us a little bit about that.

Jeffrey Gundlach: Right, Eric. The way it works is that until we get our registration
we have to operate as an unregistered investment advisor.
Fortunately, and it's very gratifying, we have many clients, former
clients too, that really support the team and are very interested in
working with us, given their experience of the past. And so right
away we had clients move their portfolios over to DoubleLine as
an unregistered advisor. We can have 14 non-ERISA clients. And
we're up near to 10 now, so we have a couple billion of AUM and
revenue and clients. And there are others that we're working on,
the IMAs, the management contracts with they’ll probably be at
DoubleLine by year end.

Our licenses will come probably in January. We have financial
backing from Oak Tree which is a very highly respected and very
vast management firm here in downtown Los Angeles. We'll be
moving into floors adjacent to actually their technology floor,
which is fortunate that was available. And the technology platform
will be rebuilt and actually improved upon from what we left
December 4 at TCW by the time we have our licenses.

We've hired programmers from our team at TCW. We have about
45 ex-TCW fixed income employees here, which 65 was the team
that was reported. So we have well over two-thirds heading
towards 75%. And all the key portfolio managers, analysts, traders,
even down to the sort of third quartile support people from TCW
will be joining DoubleLine.

We also have hired Ron Redell, the former president and CEO of
TCW funds, which he was clearly instrumental in building the
fund complex that included the Total Return Bond Fund and the
Emerging Market Fund and the Core Plus Fund. The teams of all
of those are fully intact at DoubleLine.

Eric Jacobson: When you say the teams of all those, all of the portfolio managers
and analysts that worked on those funds?

Jeffrey Gundlach: Portfolio managers and senior analysts. In the case of the mortgage
team, literally everyone who ever went near a bond or the analysis
of bond is at DoubleLine. The entire government and corporate
bond teams are at DoubleLine, with the exception of some
administrative people. And the emerging markets team is at
DoubleLine, the lead portfolio manager and the co-portfolio
manager, and the senior-most analyst.

Eric Jacobson: That was three of the emerging markets team.

Jeffrey Gundlach: And they may or may not choose to bring in their support people.
What's happening here is we obviously have excess capacity of
people presently it won't last for very long, but relative to our
AUM. And so what we're doing is people are going back to their
roots. We all started as learning and knowing trade settlements and
knowing bond analysis. And people who were managing money at
the top level will be digging down and doing work they've done in
the past and know how to do well.

It's not the most glamorous thing, but it's exciting. We're incredibly
energized and excited about running the firm. For a long time, I've
wanted a firm focused on transparency and honesty and putting the
client first. And it's exhilarating, really, to have the opportunity to
do that in a vision that's shared by all of the seven principals of
DoubleLine.