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Janus Henderson clients pull cash as post-merger woes persist

Janus Henderson Group posted a seventh straight quarter of outflows, highlighting the asset manager’s continuing struggle to win over investors more than two years after it was created in a high-profile merger.

Clients pulled $9.8 billion out of Janus Henderson’s funds in the second quarter, taking withdrawals to $17.2 billion in the first six months of the year, according to a company statement on Wednesday. That keeps the pressure on CEO Dick Weil as he tries to turn the firm around during a tough period for asset managers, with investors increasingly shifting their money into low-fee index-tracking funds.

Richard Weil, co-chief executive officer of Janus Henderson Group PLC, center left, and Andrew Formica, co-chief executive officer of Janus Henderson Group PLC, center, ring the opening bell on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, June 2, 2017. U.S. stocks were little changed following monthly payrolls data that fell short of expectations. Photographer: Michael Nagle/Bloomberg
Richard Weil, co-chief executive officer of Janus Henderson Group PLC, left of center, and Andrew Formica, co-chief executive officer of Janus Henderson Group PLC, center, ring the opening bell on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, June 2, 2017. Photographer: Michael Nagle/Bloomberg

Janus Henderson’s adjusted revenue including fees improved versus the first quarter to $434.4 million, according to the statement. Assets under management rose to $359.8 billion from $357.3 billion at the end of March, driven by market performance.

Downward pressure on fees has helped drive consolidation in the industry, including the 2017 tie-up between Janus Capital and Henderson. The travails of Janus Henderson since that time show how complicated such combinations can be.

The correlation between fees and performance is not “apples-to-apples when taking the funds’ underlying exposures into account,” an expert says.
July 17

The merger that created Standard Life Aberdeen is another tie up that was intended to produce a firm capable of competing with the industry’s giants. Instead, investors pulled out $50 billion last year, adding to $40.2 billion of withdrawals in 2017.

Asset managers are struggling to lure back investors who are yanking cash and shifting into cheaper, index-linked passive funds. The amount of assets in passive funds are poised to exceed actively managed ones by 2021, according to estimates from Moody’s Investors Service.

All of Janus Henderson’s assets are in actively managed funds. — Additional reporting by Nishant Kumar

Bloomberg News