When Richard Garland joined Janus Funds last summer as vice president and director of international marketing for the company, Tom Bailey, chief executive officer and Janus' founder issued this simple instruction: "Take Janus Global."
In the newly-created position, Garland's mandate was to focus on the distribution of funds and investment services to offshore investors. For Janus, the $133 billion no-load U.S. fund group based in Denver, Colo., that meant undertaking brand new initiatives since the 29-year-old company had virtually not ventured overseas.
For Garland, that meant doing what he does best- reaching out to institutional and retail markets abroad and watching for sub-advisory opportunities.
"The mutual fund market outside of the U.S. is where the mutual fund market was 15 years ago," said Garland. "If you don't get there now, you won't be able to get in later on."
Garland has considerable experience in international markets. In the mid-1980s, he worked in the investment management division of Hambros Bank in the U.K. Then, in 1986, he became marketing manager of Henderson International, the U.K.-based pension fund manager. At that time, Henderson wanted to expand internationally and was seeking a venture partner outside of the U.K., ideally in North America, said Garland. Though the firm had formed some small alliances in the U.S. and Canada, it wanted a larger North American presence.
At the same time, J.&W. Seligman, based in New York was eager to establish a presence in the European marketplace.
"Seligman had no international products," said Garland. "And we (Henderson) needed distribution."
In 1990, they formed an alliance and the following year they founded the Seligman Henderson Co. to create and sell international funds. Between 1991 and 1996, Seligman Henderson introduced five cooperative international funds in the U.S., all of which were advised by Seligman and sub-advised by the new jointly-held unit. Four years later, the funds held $2 billion in assets.
The joint venture also afforded the opportunity to create four offshore mutual funds under the Seligman Global Horizon Funds name and domiciled in Luxembourg. Assets in those funds now exceed $700 million (see chart.)
In 1994, Garland moved to the U.S. to focus on the joint venture and joined Seligman to assist with its other offshore business. He spent the next 12 years as the director of international marketing for Seligman.
Meanwhile, in the Spring of 1998, Janus first began expanding internationally on its own. It allied with London Fund Management of Canada to form two new funds of the Maxim Group of Funds family. Janus was designated the sub-adviser for these two funds. The Maxim Global Equity Fund was loosely patterned after Janus' popular Worldwide Fund. The Maxim American Equity Fund mirrored Janus' Mercury Fund.
Then, in late November, with Garland in charge, Janus introduced seven diversified offshore funds domiciled in Dublin, Ireland. All were clones of Janus' U.S. funds. Four months after they launched, Janus' offshore funds now have $278 million under management, with $146 million alone in The Twenty Fund, the offshore version of the Janus Twenty Fund.
"The target is to have $1 billion by the end of the year," said Garland. To Garland's amazement, the "Janus" name is recognized in many overseas markets.
"The name is stronger than we thought," he said.
For future overseas expansion, Janus has set its sights on building a presence in Latin America, Asia, Taiwan and the Middle East. But it does not want to spread itself too thin and sell through all distribution channels. It is concentrating on selling through the big broker/dealers with non-U.S. offices such as Merrill Lynch and Prudential.
For now, Janus has a little-known London office that houses a trader. But, it plans to build a team both in London and later on, in Asia, said Garland. Garland dismissed the suggestion of Janus seeking a partner for its overseas ventures.
"I don't believe in the joint venture story," he said. "Initially, goals are the same, but later on goals change."