Janus Capital cut a bulk of its Bay Isle Financial institutional money management team, including co-founder and Chief Executive Officer Bill Schaff, Money Management Executive has learned.

Schaff, the lead portfolio manager for its value funds, and Steve Block, a senior analyst who oversaw a small number of value-based separate accounts, are among "a handful" of Bay Isle employees that "are no longer with the firm," the company confirmed Monday.

Schaff and Block, along with the Bay Isle funds themselves, were removed from the Janus Web site on Friday. A source familiar with the matter said, "Janus came in and cut everyone."

Janus spokeswoman Shelley Peterson noted, however, that Jakob Holm, previously co-manager of the $2.7 million Janus Adviser Small Company Fund and the $21 million Janus Aspen Series Small Company Value Portfolio, will remain at Bay Isle as sole portfolio manager of the two funds.

"Bay Isle doesn't run any of our retail mutual funds. These are intermediary-sold products," Peterson said. "We notified the handful of clients that are in the two portfolios on March 1 and did a prospectus filing at the same time."

In keeping with company policy, she declined to comment further on personnel moves but said that Bay Isle will continue to operate as a registered investment advisor.

Schaff and his team provided value and REIT investment management services to individual and institutional clients and also served as sub-advisor for a number of Janus mutual funds.

Janus inherited Bay Isle along with INTECH and a 30% stake in Perkins, Wolf, McDonnell and Co. in 2002 as part of the Berger Funds merger, the result of its lengthy bout with former parent Stilwell Financial.

Through its acquisition of Bay Isle, Janus was able to boost its value exposure, a seemingly necessary strategic move given that Janus was getting hammered in the bear market for investing too heavily in growth

In July 2004, Janus sold the private-client division of Bay Isle to First Republic Bank for $8 million. Bay Isle is headquartered in Oakland, Calif.

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