Despite suffering massive outflows in recent years, Janus Capital Group's chief investment officer, Gary Black, is confident that the company will make a turnaround by year-end. In an interview with Reuters, Black said the company has undertaken several efforts to improve performance.
Janus has increased the number of stocks it covers from 500 to 1,000. It has added 10 analysts to its team and strengthened its process on when to sell a stock.
Black, who came on board almost a year ago to oversee investments, said the Denver-based company is emphasizing valuations to analyze stocks and putting its money on "growth" stocks, which the fund company thinks are poised to make a comeback this year.
Strong performances at growth companies would bode well for Janus, whose assets under management are in need of a major boost. The company has experienced an outflow of roughly $500 million to $1 billion a month. In a recent announcement, Dutch insurer ING Group NV said it would pull out $2.6 billion in April.
"Investors want to be shown that Janus can put up great numbers consistently," Black said. "If we keep putting up the great numbers we've put up over the last three years, the assets return."
The dip in assets under management, which affects revenues negatively, has forced operating margins down to about 22% from a previous company norm of about 30%. Still, Black pointed out that in spite of low, single-digit returns at some of its biggest funds, Janus has ranked in the top third of its peers.
To get its funds' recovery underway, Janus has bolstered research. It has increased the number of stocks in its international coverage from 100 to 350, signifying its attempt to take advantage of the global nature of investing.
The company also prides itself on "nuts and bolts" research, where analysts talk, for instance, to drugstores to identify the hottest-selling drugs. "Our analysts are encouraged to dig really, really deep," Black said. "They do a lot of on-the-ground research that a lot of other firms say they do, but they really don't."