Magazine article American Banker

Janus Capital Position's Better, but Issues Remain

Magazine article American Banker

Janus Capital Position's Better, but Issues Remain

Article excerpt

Byline: Matt Ackermann

Armed with additional capital and operating under an interim chief executive, Janus Capital Group Inc. has a long climb ahead for a recovery.

At midyear the Denver fund company's assets under management stood at $132.6 billion, down from $330 billion in 2000. In the past five years it has improved fund performance and changed its distribution model from a retail-oriented model to a third-party approach, but analysts said it must short up its balance sheet and perhaps consider more drastic changes if it wants to regain assets.

Geoffrey Bobroff of Bobroff Consulting in East Greenwich, R.I., said Janus has a "tall order." "I am troubled if they think that they can regain prominence just through organic growth," he said. "The market isn't going to grow at the rate that it did in the 1990s. Growth must come through an acquisition or a combination."

Gregory Frost, Janus' senior vice president and chief financial officer, said the company doesnot plan any dramatic changes. He said it will to continue to invest in developing its third-party distribution to "create a better and bigger footprint" and continue to introduce products even after Tuesday's ousterof the executive - CEO Gary Black - who initiated that strategy. Black was replaced Tuesday by Tim Armour, a director of the company, on an interim basis.

"A lot of the things that Gary put in place, that strategy won't change overnight," Frost said in an interview Wednesday. "The firm is in good shape. Our fundamentals are strong and the board doesn't feel a dramatic change in strategy is going to occur at this point."

Frost said Janus' goal for the next five years is to widen distribution through third parties and "grow the firm" organically. "In markets like this, it is tough to grow, but we are confident that we are wellpositioned," he said. …

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