By Sam Mamudi
Asset manager Janus Capital Group Inc. (JNS) named its next
chief executive on Thursday, filling the position almost six months
after the departure of its previous CEO.
Denver-based Janus said Richard Weil will take over on Feb. 1.
Weil will join Janus from bond-fund specialist Pimco, a unit of
Allianz Se (AZSEY). Weil had spent 13 years at Pimco and had been
chief operating officer between 2000 and 2009.
Weil, 46, will succeed Tim Armour, a Janus director who has been
interim CEO since the departure of former CEO Gary Black in
July.
"Dick was Pimco's chief operating officer for nine incredibly
successful years," said Steve Scheid, chairman of Janus, in a
statement. "The breadth of his leadership experience, deep
understanding of the investment industry and global perspective
were all key factors behind the board's decision. These
characteristics not only complement Janus' key strengths, they also
align with the firm's long-term strategic priorities."
Recovery Effort
Janus was a darling of the mutual-fund industry in the late
1990s, with its growth- focused mutual funds logging large gains.
But the funds were also heavy on technology stocks, and Janus
suffered more than most when the tech bubble burst. The firm was
then involved in the mutual fund scandals in 2003, and has been
trying to recover ever since.
Many investors are still avoiding the firm. As of Nov. 30, total
mutual fund assets were $90 billion, down from $173 billion on Dec.
31, 1999, according to Morningstar Inc. Flagship Janus Fund (JANSX)
has average annual losses of about 3% a year over the past decade.
The fund's assets under management have declined to $8.7 billion
from $42 billion at the start of 2000, according to
Morningstar.
Despite performance that for the most part was better than its
peers in 2009, Janus in its most recent reported quarter saw
long-term net outflows of about $600 million.
Investors in both Janus funds and the company's stock will be
hoping Weil can complete a turnaround started by Black.
Under Black, who was chief investment officer from April 2004
and CEO from January 2006, Janus boosted its research-analyst team,
broadened its fund lineup, and aimed new products at institutional
investors, brokers and financial advisers - moving away from the
direct selling of funds to retail investors.
Black also reined in Janus' star manager culture, aligning pay
with long-term performance and promising that all managers would be
compensated equally.
The compensation changes upset some portfolio chiefs who
subsequently left the firm, among them David Corkins, who had been
manager of Janus Fund.
Building Blocks
"There may have been too many tensions [under Black]," said
Andrew Gogerty, senior fund analyst at Morningstar. But, he added,
he doesn't expect any "significant changes" in strategy under
Weil.
"I think his two first jobs will be to meld with the top
executives, most of whom are new, and continue to push Janus'
investment strategy to focus more on an institutional line-up,"
said Gogerty.
"We think the board was focused on candidates with strong
leadership skills that could execute existing strategic priorities
(i.e., preserving strong investment performance, broadening
distribution, and maintaining operational efficiency)," said
analysts at Sandler O'Neill & Partners in a research note
following the news of Weil's hire.
Analysts also frequently point to the fact that less than 10% of
Janus' assets are from non-U.S. clients at a time when most fund
firms are increasingly looking overseas to grow their
businesses.
"Building out international distribution remains a key priority
for Janus, with Weil's experience expanding Pimco's overseas
operations perhaps accelerating that process," said the Sandler
O'Neill analysts.
The analysts kept Janus' stock rating at hold, though they noted
"trends seem to be moving in Janus' favor (strong investment
performance, ongoing retail market share gains, reallocation to
equities more broadly)."
Analysts at Standard & Poor's kept their "buy" rating on
Janus.
"We think Weil has valuable experience with a global
organization from an operations and investment perspective. We
think he brings credibility to a role vacated by the sudden
departure of former CEO Gary Black in July 2009," S&P said.
-Sam Mamudi; 415-439-6400; AskNewswires@dowjones.com