That’s the verdict Morningstar analyst Greggory Warren gave the listed group after it posted its first-quarter results last week.
“Many of the growth opportunities and cost synergies associated with the combination have not come to fruition, and any that do materialise will need to be reinvested back into the business to produce better investment results and enhance product distributrion,” Mr Warren said.
“Janus Henderson will also need to figure out how to successfully navigate the headwinds created by the (now defunct) Department of Labor’s fiduciary role win the United States, as well as additional layers of regulation in the European markets that Brexit has further confounded.”
The company finished the March quarter with US$357.3 billion in AUM, up 8.8 per cent on the prior quarter but down 3.9 per cent on the same quarter last year.
Janus Henderson recorded US$7.4 billion in net outflows during the period.
“While we are disappointed by the elevated level of net outflows during the quarter, we remain optimistic about future prospects given our global distribution footprint, good investment performance and breadth of product offerings,” Janus Henderson Group chairman Richard Gillingwater said.
Speaking at the group’s AGM in Denver, Colorado, last week, Mr Gillingwater commented on 2018, a year he described as one of “transition and tremendous activity” for the company.
“2018 turned out to be a much more eventful year than many had expected, marked by political events having a major impact on financial markets,” he said.
“Our own Brexit preparations have been well underway for quite some time, looking at all possible Brexit impacts in our own distribution activities. Needless to say, we hope that the outcome of the current debate in the UK Parliament will lead to an outcome which preserves, as far as possible, the UK’s strong financial services industry.
“Against this backdrop, the board recognises that the asset management industry continues to face pressure from an ever-present increase in regulatory change.”
Janus Henderson finished the 2018 with US$329 billion of assets under management, a decline of 11 per cent from a year ago, driven by US$24 billion of market decline and changes in currency rates, as well as US$18 billion of net outflows.