By Maureen Farrell And Matt Wirz

Bill Gross's new home is a firm with a topsy-turvy past and great hopes for the future.

Janus Capital Group Inc., the fund-management company that landed Mr. Gross after his acrimonious departure from Pacific Investment Management Co. on Friday, has experienced both the highs and the lows of the market in its 45-year history.

Traditionally focused on stock investing, Janus saw its business soar during the Internet bubble, only to stumble in its aftermath. A few years later, Janus became embroiled in a probe into trading in mutual funds. Since then, the firm has broadened its horizons to include assets other than stocks--a strategy Mr. Gross, arguably the most successful bond investor of his generation, will be expected to further.

At Janus, Mr. Gross will work for Richard Weil, a 15-year veteran of Pimco, who joined Janus in 2010 as chief executive. But Mr. Gross and Mr. Weil won't work in close proximity. The former won't move to Janus's headquarters in Denver and instead will work out of a new office in Newport Beach, Calif., where Pimco is based.

On Friday, Janus was already feeling a positive effect from Mr. Gross's hire: Its shares soared 43%, its biggest one-day jump ever. Before Friday's bump, Janus's shares were down 29% during Mr. Weil's tenure, with the firm suffering net outflows every quarter.

Founded by Wall Street financier Thomas Bailey in Denver in 1969, Janus came under the control of Kansas City Southern, a railroad company, in 1984, when the rail firm bought an 82% stake in Janus for $24 million. With just $400 million under management at the time, the fund grew to hold $330 billion at its peak in 2000, fueled by the Internet stock craze. Several months after the Nasdaq Composite Index peaked that year, Kansas City Southern spun off Janus, along with several other of its financial-services firms, into a firm that would later become Janus Capital Group.

As the Internet bubble burst, shares of the company tumbled, and its assets under management dropped by more than half in the next several years.

By late 2003, the firm had become caught up in a major mutual-fund scandal. Then-New York Attorney General Eliot Spitzer investigated it for allegedly allowing some of its investors to make rapid trades ahead of others. The fund settled with state and local regulators in early 2004, neither admitting nor denying wrongdoing, and repaid some investors for trading-related losses.

Since Mr. Weil joined, he has made a big push to diversify the fund outside of its historical concentration on equities, tripling the fund's fixed-income assets to $31 billion, from $10.3 billion.

Beyond Mr. Gross, Janus added another high-profile name in July, when it named Myron Scholes, who won the Nobel Prize in economics for co-developing the Black-Scholes model for pricing options, as its chief investment strategist.

Morningstar analyst Vincent Lui said it is possible that "hundreds of billions" in assets under management at Pimco, a unit of Allianz SE, could follow co-founder Mr. Gross to his new post at Janus.

One open question is how Mr. Gross, known for his autocratic management style, will mesh with the more collaborative approach of Janus's core fixed-income team, led by fund manager Gibson Smith, says Morningstar fixed-income analyst Sumit Desai. "It's a team-based approach at Janus, and different analysts there have pretty high influence," Mr. Desai said. "It will be interesting to see how that culture jibes with the culture of Bill Gross."

Mr. Gross's investment will be "separate and complementary" to Mr. Smith's operations, a Janus spokesman said.

One former employee said Janus struggled to make the cultural transition to managing more than just stocks. Fixed-income managers there struggled to expand their funds, according to Sandy Rufenacht, a former bond-fund manager at Janus.

Yet Mr. Rufenacht, who now runs his own Denver-based investment firm, Three Peaks Capital Management, says, "Someone like Bill Gross changes the identity of the firm overnight."

Mr. Miller said he views Mr. Weil as a hands-off manager who gives his employees a wide berth to broaden their own businesses, which should help him manage Mr. Gross.

Mr. Miller heard Mr Weil articulate where he wants Janus to be by 2020 when he joined the firm. Among his goals at the time: Get the bonds under management to hit $50 billion.

"I think that goal will probably change now," said Mr. Miller with a chuckle.

Sarah Krouse and Steven Russolillo contributed to this article.

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