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Nothing ‘defensive’ about Janus Henderson merger

Nothing ‘defensive’ about Janus Henderson merger

Tim Stewart
— 1 minute read

Recently merged Janus Henderson Investors has rejected suggestions it is less than the sum of its parts, pointing to its recent results announcement, which beat market expectations.

Speaking to InvestorDaily, Janus Henderson head of Asia-Pacific Rob Adams took issue with a recent Morningstar report that warned about regulatory “headwinds” facing the firm in Europe and North America.

Morningstar also said the merger is “unlikely to be much greater than the sum of the two parts”, with any cost synergies likely to be ploughed back into the business.

Mr Adams said the regulatory challenges facing his firm overseas are not unique to Janus Henderson.

“Any asset manager that operates in those markets has to deal with those challenges,” Mr Adams said.

“We've already dealt with the US Department of Labor’s fiduciary rules issues, and we're ahead of the curve on things like MiFID II in Europe as well.”

Pointing to the group’s second quarter results, released last week, Mr Adams said net outflows had fallen to US$1 billion ($1.28 billion) – a US$6 billion improvement on the first quarter.

Assets under management for the group increased to US$345 billion, up 4 per cent on a pro forma basis from the first quarter of 2017.

But the main figure Mr Adams highlighted was the outperformance of Janus Henderson’s managed funds.

Eighty-nine per cent of the company’s funds have outperformed their relevant benchmarks over the past five years, he said.

“A lot has been written about active versus passive recently, but you don't get a stronger vote of confidence than almost 90 per cent of funds across a manager of our size (with more than 200 investment capabilities) outperforming over five years,” Mr Adams said.

Mr Adams added that the large inflows into passive strategies had “nothing” to do with the decision to merge Janus and Henderson.

“The motivation behind this merger is to provide for superior growth. It's a merger that's not for defensive reasons at all – it's for offensive reasons,” he said.

“We think we're in a far better position to provide better things to more clients around the world through being a larger firm with greater capabilities.

“It's interesting that Morningstar mentioned the increased regulatory burden – and they're right, there is an increased regulatory burden.

“But we're in a far better position to be able to deal with that as a larger firm.

“What I wouldn't want to be now in this environment, given the increasing pervasiveness of regulations around the world, is be a small player.”

 

Nothing ‘defensive’ about Janus Henderson merger
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