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Why Jeffrey Gundlach named his $121 billion firm DoubleLine

Adriana Belmonte
Associate Editor

DoubleLine Capital CEO Jeff Gundlach may be known for being a brilliant bond investor, but little is known about the origins of his company’s name.

In an exclusive interview with Yahoo Finance , Gundlach shared the story behind the inception of the name.

It happened in 2005 when Gundlach randomly woke up in the middle of the night.

“For some reason or other, I was obsessed with this idea, which I never even thought about before,” he said. “If I started a money management firm, what would I call it?”

Gundlach initially viewed it as “a fun thought experiment, [as] so many names are meaningless.” He knew that he wanted a name that “meant something.”

“What would be a good name?” Gundlach thought.

“I had just bought my first Mondrian, and it’s his last great classical painting, where two devices are used,” he said. “One was an early device, called a progression, which is basically rectangles that process. The other was a device he came up with in 1931, which is called the double line.”

Gallery assistants hang the work Composition with Red, Blue and Grey by Piet Mondrian during a photo-call for Impressionist and Modern Art Evening Sale at Sotheby's auction house in London June 18, 2014. REUTERS/Neil Hall

The double line, Gundlach explained, “is a further ambiguity between line and plane, because if there are two lines that are close enough together that they looked like two lines, but they could also be interpreted as defining the negative space of a rectangle by bordering them.”

Gundlach knew that the double line would be a “really good” logo.

“Then, I realized that it had a meaning,” he said. “That the meaning was in everyone’s life, that they experience [it] more frequently …”

‘There’s a double line in the middle of a highway’

After he was “ unceremoniously fired ” from fund company TSW, Gundlach helped launch DoubleLine in 2009. Today, the company manages over $120 billion in assets, and the name “DoubleLine” is etched into the minds of many bondholders. Gundlach finds the name fitting and relatable.

“There’s a double line in the middle of a highway, and by law, you’re not supposed to cross it, but it’s really there for your protection,” Gundlach said. “You like to think it’s there for a reason. The reason, of course, is it’s not safe.”

He continued: “I’ve realized, that’s pretty neat because I’m really risk averse. I think more about what you shouldn’t do than what you should do. What you shouldn’t do is take fatal risks. That’s what kills, particularly, fixed income investors. If you buy a lot of junky bonds and they default, your money’s gone forever. If you buy a bunch of mortgages and they refinance it the wrong time, you’ve kind of lost money forever. So, it’s what you don’t do. I thought, ‘that’s perfect,’ because it defines things that we won’t take certain fatal risks.”

Inside Jeffrey Gundlach's DoubleLine Capital

‘A Yin and Yang thing’

Although Gundlach is an avid art collector, he described art as “very subjective” and doesn’t think it has too much of an influence on his investment career, aside from the inspiration for his company’s name.

“I think it’s a balance, more than a tie-in to what I do,” he said. “Running other people’s money is amazingly, at the end of the day, non-objective as to whether you’ve done a good job or not. It’s actually painfully objective, because it’s a number to two decimal points or more. So your number, versus that market number, versus some other investor’s number.

“There’s no getting away from that,” he said. “It’s incredibly easy to judge. Whereas art is incredibly subjective, and you can’t put any kind of definitive number on it. I think it’s a Yin and Yang thing.”

[ Full transcript of Jeffrey Gundlach’s extended conversation with Yahoo Finance ]

Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells .

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