While Denver-based Janus Capital Group said its net profit for the first quarter fell 93%, its outflows have stabilized and executives remain optimistic that the company is in a good position for a future economic recovery.
First quarter profit was just $2.7 million, or two cents a share, down from $37.4 million, or 23 cents a share, this time last year.
The firm has been battling this income drop by slashing expenses. Operating expenses fell 29% from this time last year to $135.9 million, largely aided by the elimination of 112 jobs in the fourth quarter.
"We performed reasonably well in a tough environment," said Janus CEO Gary Black in a conference call. "Investment performance rebounded sharply and our outflows have stabilized from the fourth quarter."
Janus saw $900 million in net outflows for the first quarter, down from $3 billion in net outflows during the fourth quarter of 2008. Black said $300 million of the first quarter outflows were due to client reallocation and are expected to return.
First quarter outflows accounted for 3% of total assets, which is below the industry average of 5.1%, Black said. April outflows showed "continued stabilization," he said.
Total assets under management fell 10% to $110.9 billion, with four percentage points of the decline attributed to the liquidation of Janus's money market funds. Assets are down 41% from this time last year.
Despite continued challenges in the market, we believe our distribution build-out and strong long-term investment performance will translate into market share gains once equity markets recover, Black said.