Collecting: Bill Gross about to rattle another market: Stamp collecting

This article first appeared in The Edge Financial Daily, on March 12, 2018.

Gross has had an outsize effect on the field of philately. Now he would like to pass the torch.

This rare envelope was created for a charitable fundraiser during the Civil War. Estimated between US$30,000 and US$40,000.

-A +A

Bill Gross gained fame as the bond king. Now he rules the market for collectible stamps. His US$42 million (RM164.22 million) collection of US postage is so comprehensive that when the first part of it comes up for auction in September, the entire field of philately will feel the effect.

“There’s never been a collection in private hands of US material like the one Bill Gross put together,” says Cheryl Ganz, curator emerita of the Smithsonian National Postal Museum in Washington, which got more than US$10 million from Gross’s family to build the William H  Gross Stamp Gallery, the world’s largest gallery dedicated to postage. “He went for the best of the best in every case.”

Collecting stamps is a hobby that has cooled in popularity in recent decades — and part of the problem is that so many of the most sought-after specimens are in museums or major private collections. This is particularly true of US stamps, once among the most desirable segments. Gross has amassed so many of the best examples that he has effectively cornered the market.

“This is a significant moment in the stamp market,” says Charles Shreve, the billionaire’s long-time adviser. “Once a generation a great collection comes up for sale, and it gives new collectors a chance to buy something special. It opens up the material.”

The group will be offered by Robert A Siegel Auction Galleries Inc in New York at a series of special sales over the next two to three years, according to the auction house. The first will feature 150 lots; the tally is expected to surpass US$10 million. All proceeds from the auctions will go to charities, Gross said in an email.

Gross has the most complete collection of stamps issued by the US Postal Service, with individual stamps, blocks of them, and stamped envelopes. One album has hundreds of examples from the first US federal postage issue in 1847.

“I have had the privilege and enjoyment of acquiring many of America’s most iconic stamp rarities over the past 25 years or so,” the billionaire bond manager said in a statement. “During that time, I have always thought I was a temporary curator of these treasures and that one day, others should have the opportunity, honour and responsibility of becoming the new collectors.”

Gross, 73, bond portfolio manager at Janus Henderson Group plc, has built and sold several top stamp compilations since he began collecting in 1992, according to Shreve. He has raised US$27 million for charity from stamp sales, including Swiss and British treasures. Now he is unloading the US items, his biggest prize.

His collection was valued at US$42.2 million, according to court papers filed in October as part of a divorce settlement between him and his wife, Sue Gross. After the couple divided their assets, including multiple homes and artwork, he retained a personal net worth estimated by Bloomberg at US$1.6 billion.

Gross built his fortune as co-founder and chief investment officer of Pacific Investment Management Co, where he pioneered active bond strategies. When he faced an ouster in 2014 amid a dispute with other executives, he jumped to Janus, where he manages the US$2.2 billion Janus Henderson Global Unconstrained Bond Fund.

He amassed the core of his US collection in 1993, when an important trove of US stamps owned by Japanese bank chairman Ryohei Ishikawa came up for auction. Gross bought more than US$2 million of stamps at the event. Over the years, he has pounced on every important collection that came to the market. “Just like the 1993 auction brought out Bill,” Shreve says, “Bill’s collection will draw out other collectors.” — Bloomberg