Henderson Global Investors' foray into the US market began at an inopportune time: It launched its first three funds on August 31, 2001, days before the September 11 attacks. However, the firm found success on US soil in the interceding 12 years and is now looking to grow its U.S. presence from 11% of its global revenue to 33%.
Chuck Thompson, head of U.S. Mutual Funds at Henderson Global Investors, said that the firm has added $6 billion to its coffers in the years since. "I was hire as the number two at Henderson. I have been there for 12 years now. We have grown from 0 to $6 billion in AUM. We did that on Henderson's original expertise, which is international and global equity," he said.
The firm has grown by launching new products, building out investment teams and with strategic acquisitions. The US push has accelerated with the changing of the guard at Henderson's UK parent. In November 2008, Andrew Formica took the reins as chief executive officer from Roger Yates.
"Our new CEO Andrew Formica is a young guy from Australia, who was head of equities. He came in and has really turned the firm from an old blue blood London firm to a firm on the cutting edge strategically," Thompson said.
During the first years of Formica's tenure the company made two major acquisitions. "He [Formica] did two acquisitions. One was at the absolute bottom of the market in 2009. He bought $15 billion asset manager, New Star Asset Management, at 50 cents on the dollar when they ran into corporate financial problems. The next acquisition was Gartmore in 2011," Thompson said.
And Formica has big plans for the U.S. arm of Henderson. According to Thompson, Formica wants to diversify Henderson from being 60% weighted in the UK and Europe. His goal is to grow the U.S. business from 11% of global revenue to 33% of global revenue.
"We'd like to grow by doing acquisitions in the United States. We've been hunting for the right partner from a cultural standpoint," he said.
"This would be a strategic fit that helps our product line diversify from just global and international equity to include U.S. equity and fixed-income. Our emphasis is more on US equity now, because in the cycle fixed has had its day, if you will."
The right partner or acquisition target for Henderson will be a cultural fit and have a differentiator that stands out. Thompson said the firm wants to find a partner or an acquisition target that has a "collegial culture" that also has a differentiator.
"The brand that we've built in the U.S. is called the Henderson difference. We show our holdings against the average competitor's holdings in the same category, usually there is a 60 to 70% difference. That's what we think active managers have to do. We have to be different than the index or the ETF range to justify where we are adding value for clients."
He added that the firm is really looking for more of a fundamental, bottom up partner so quant shops and sector rotators that make big bets on one sector winning need not apply. "We want a partner with an active view on what the next one to three years will look like. That's what creates the differentiator," he said.
However, Thompson says that Henderson has been browsing "For Sale" signs for over a year but hasn't yet found the right fit.
"We've had a couple of deals that got very close, but for whatever reason our side or their side just didn't get to the final table of negotiations. We think it will be the right one when it's right. About three years ago we went through a year of trying to acquire Ridgeworth funds. The most recent one we walked away from wasn't out there in the public market so I can't discuss it."
As Henderson irons out its U.S. strategy, Thompson said there will be more incremental hiring. "I'd like to add more salespeople, but I don't want to go on a hiring spree and add 10 people and if sales and revenues were to fall to let them all go," he said.
"I like to build things one block at a time, I've seen too many times in the last 20 years where companies scale up and then cut half their people if they weren't successful. We want to do it very methodically. I'd like to add two people to the sales team by the end of next year."
There are new products in the pipeline for Henderson as well. In February, Henderson lifted out a U.S. credit team from Delaware Investments led by Kevin Loome, head of credit. It is the first U.S. credit team for Henderson, which is expanding its global fixed-income platform.
"We've just launched their high yield fund. The manager on that fund, Kevin Loome, he's the perfect example of the Henderson fit," said Thompson.
"He's a thoughtful, humble guy, not egotistical. He has some ideas for a new product that we might roll out this fall. When I say collegial, that's what I mean. He has conviction about adding a new product with his team."
Henderson's current offerings to U.S. retail investors include: All Asset Fund, Dividend & Income Builder Fund, Emerging Markets Opportunities Fund, European Focus Fund, Global Equity Income Fund, Global Technology Fund, High Yield Opportunities Fund, International Opportunities Fund, Strategic Income Fund and World Select Fund.
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