(Bloomberg) -- Janus Capital, the fund company merging with Henderson Group, said fourth-quarter profit fell 34% as investors pulled cash amid lackluster performance.

Net income fell to $29.8 million, or 17 cents a share, from $45 million, or 25 cents, a year earlier, the Denver-based money manager said. Adjusted earnings of 20 cents a share missed the forecast of 24 cents by nine analysts surveyed by Bloomberg.

Firms such as Janus that run actively managed investment strategies have been losing market share to competitors offering lower-cost index-based mutual funds and ETFs. Janus said in October that it plans to merge with London-based Henderson to form a $320 billion asset manager, signaling a potential wave of industry consolidation amid rising regulation and pressure to compete on fees.

Assets under management totaled $194.5 billion as of Dec. 31, compared with $195.1 billion on Sep. 30. The decrease was a result of performance and $300 million in long-term net outflows.

The drop in assets contributed to the firm's decline in revenue as fees from investment management fell 1.4% to $223.3 million at the end of the quarter. Revenue declined 6% to $251.4 million during the quarter due while operating expenses rose 1.4% to $189.6 million.

BlackRock, the world's largest asset manager with $5.15 trillion, pulled in less revenue than analysts forecast during the quarter as investors moved money to lower-fee ETFs, the New York-based firm said earlier this month.

Janus and Henderson have said they expect to complete their $6 billion merger in the second quarter. In December, the firms outlined plans to consolidate funds with similar strategies and announced leadership teams for combining the equity and fixed-income divisions.

Janus's earnings were released before markets opened. The company's shares declined 1.3% to $13.37.

The stock rose 6.1% over the trailing 12 months, compared with a gain of 5.3% for the 31-member Bloomberg index of global investment managers.

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