Janus First-Quarter Profit Rises 24% on Equities RallyChristopher Condon
Janus Capital Group Inc., owner of the Janus, Intech and Perkins funds, said first-quarter profit rose 24 percent as stock-market gains helped boost assets and the company reduced expenses.
Net income climbed to $28 million, or 15 cents a share, from $22.6 million, or 12 cents, a year earlier, the Denver-based company said today in a statement. Results matched the estimate of 14 analysts surveyed by Bloomberg.
Chief Executive Officer Richard M. Weil, who took over in 2010, has expanded Janus’s fixed-income team and created a group focused on multi-asset investing in an effort to reduce the firm’s dependence on equities and reverse 15 straight quarters of redemptions. Investors pulled $3.9 billion in the three months ended March 31, excluding money-market funds, the most since they withdrew the same amount in the second quarter of 2012.
“Negative performance fees returned to more elevated levels,” Daniel T. Fannon, a San Francisco-based analyst at Jefferies & Co., said in a note today to clients. “Lagging investment performance to start 2013 remains the primary headwind to flow improvement.”
Janus rose 0.7 percent to close at $8.76 in New York trading. The shares advanced 2.8 percent this year, compared with the 17 percent gain by the Standard & Poor’s 20-company index of asset managers and custody banks.
Revenue fell 1.9 percent to $214.2 million as negative performance fees cost the firm $19.5 million and prompted a decrease in the money the firm makes for managing investor assets. Investment-management fees fell 1.9 percent to $198.2 million. Janus charges management fees that adjust upward or downward based on performance over trailing periods of 12 to 36 months.
Janus’s fundamental equity funds continued to lag behind peers, with 24 percent of assets ranking in the top half of their categories over three years and 38 percent over five years, the company said, citing data from research firm Morningstar Inc. Bond funds did better, with 74 percent outperforming over three years and 100 percent over five years.
The company offset the drop in revenue by reducing expenses 1.5 percent to $159.5 million, driven by a decrease in incentive compensation.
Investors pulled $1.8 billion from fundamental equity products and $2.4 billion from quantitative equity funds, or those that use mathematical models to pick stocks. Clients deposited $300 million into fixed-income products.
Assets under management rose to $163.8 billion from $156.8 billion at the end of December as the Standard & Poor’s 500 Index of U.S. stocks gained 10 percent in the quarter.