$$$ pours out of TCW

The financial soap opera continues at the giant L.A.-based money manager. Just to recap, TCW ousted veteran investment chief Jeffrey Gundlach a week ago, and investors have been flocking out of the firm's Total Return Bond Fund. Redemptions total about 30 percent, according to Tad Rivelle, who took over for Gundlach. From Money & Co.:

Rivelle and co-manager Bryan Whalen stressed that the fund had no trouble selling securities to raise cash for investors who wanted out. Under Gundlach, the TCW Total Return Bond fund had invested almost exclusively in mortgage-backed bonds, and there had been some concern on Wall Street early in the week about the liquidity of those securities if large numbers had to be sold. Whalen said the fund was able to sell even non-government-guaranteed mortgage bonds "right at the market," meaning the value at which they were carried on the fund's books. "Dealers were fighting amongst each other to get those bonds," Whalen said.

Earlier, WSJ got some nuggets on what it was like for Rivelle, a founder of Metropolitan West Asset Management, to take over the TCW portfolios under such acrimonious cricumstances (Gundlach, who had delivered huge returns in recent years, says he plans on being back in business within the next few weeks). TCW purchased MetWest on the same day that Gundlach was let go.

Friday night, MetWest mortgage specialists Mitch Flack and Bryan Whalen started diving into the portfolios managed by Mr. Gundlach. Though MetWest runs $18 billion worth of mortgage portfolios, it is known more as a generalist bond manager, whereas Mr. Gundlach was intensely focused on the niche. The MetWest team worked through the weekend to familiarize themselves with all the holdings. "Bryan and Mitch are the two most bleary-eyed individuals," Mr. Rivelle says.

At 5.a.m. Monday, Mr. Rivelle arrived at the TCW offices. Redemptions started rolling in. Investors yanked more than $1 billion that day from the roughly $12 billion TCW Total Return Bond Fund. On Tuesday, managers had to sell about $450 million worth of nonagency mortgage-backed securities to meet redemptions. Depending on market conditions from day to day, such securities can be extremely tough to trade. Mr. Rivelle says the bonds traded well, selling at or near where they had been valued on TCW's books. Managers also reduced cash and agency mortgages held in the fund to keep the asset allocation similar to the way Mr. Gundlach had left it.

As for why the bonds traded well, Gundlach says "I bought them and people think I know what I'm doing," adding, "It's Gundlach's seal of approval." If he does say so himself.