Janus’s Fundamental Fixed Income Head Gibson Smith to LeaveCharles Stein
Janus Capital Group said the head of its fundamental fixed income unit, who oversaw an eight-fold increase in the firm’s bond assets over the past decade, is leaving.
Shares of the money manager fell the most in nine months after the company said Gibson Smith, 47 and head of the business since 2006, will leave at the end of March to spend more time with his family. Enrique Chang, who joined two years ago, will become head of investments on April 1, overseeing both the fundamental fixed income and the equity investment teams, Janus said in a statement.
Smith helped expand the bond business at Janus, known primarily as a stock manager, to $41.6 billion from $5.2 billion when he took on his role. Last year, Janus Chief Executive Officer Dick Weil hired Bill Gross, the former chief investment officer of bond giant Pacific Investment Management Co., and tasked him with building out a separate bond unit.
“This is a big blow,” Sumit Desai, an analyst with Chicago-based Morningstar Inc., said in a telephone interview. “Smith drove strong returns over 10 years and commanded a lot of loyalty from the members of his team.”
Craig Siegenthaler, an analyst with Credit Suisse, cut his 2017 earnings estimate for Janus by 4 percent in a note Wednesday, predicting that inflows to the firm’s bond business will not be as strong.
Janus fell 4.4 percent to $15.14, the biggest one-day decline in the shares since Feb. 9. The stock is down 6.1 percent this year, compared with a 5.6 percent drop in the 19-member Standard & Poor’s index of asset managers and custody banks.
Smith’s role will be split between Darrell Watters, who will become head of domestic fundamental fixed income, and Chris Diaz, who will oversee it globally. Chang, a former CIO at American Century Investments, currently oversees equities and asset allocation.
About $33 billion of Janus’s fixed-income assets are in the fundamental unit that Smith leads. The $9.1 billion Janus Flexible Bond Fund, which Smith co-manages, has boosted its assets roughly 10-fold since the end of 2008, according to data compiled by Bloomberg. The fund beat 79 percent of peers over the past five years.
Gross’s unit, called global macro, includes the $1.4 billion Janus Global Unconstrained Bond Fund and the assets Janus acquired when it bought a majority stake in Sydney-based Kapstream Capital Pty Ltd., in July.