(Bloomberg) -- Janus Capital Group Inc., owner of the Janus, Intech and Perkins funds, said fourth-quarter profit declined 13% as clients pulled out money for the 14th consecutive quarter.
Net income fell to $31.2 million, or 17 cents a share, from $35.7 million, or 19 cents, a year earlier, the Denver-based company said Thursday in a statement. Profit beat the 14-cent average estimate of eight analysts surveyed by Bloomberg.
“The key hurdle for Janus is to improve investment performance,” Olga Roman and Charles D. Rauch, analysts at Standard & Poor’s in New York, wrote in a research note published Jan. 22. S&P revised its outlook for Janus to negative from stable on Jan. 9 while affirming its BBB- long-term credit rating.
Chief Executive Officer Richard M. Weil has worked to reduce Janus’s dependence on equities, strengthening his fixed- income team and planning the introduction of multiasset products known as absolute-return funds, as investors have shunned stocks for bonds. Poor long-term fund performance led to continued withdrawals and lower fees, even as Janus’s fixed-income investments topped $25 billion, or about 16 percent of total assets, for the first time in 2012.
Assets rose 5.8% from a year earlier to $156.8 billion as global stocks rose 13% in 2012, based on the MSCI AC World Index. Clients withdrew a net $3.6 billion in the quarter.
Performance Fees
Janus charges management fees for some funds that rise or fall based on performance versus benchmarks over trailing periods of 12 to 36 months. Negative performance fees cost Janus $61.8 million in the first nine months of 2012, according to S&P.
Weil struck a deal in August with Tokyo-based insurer Dai- ichi Life Insurance Co. that has helped support the firm’s shares. Japan’s second-largest life insurer agreed to purchase 15% to 20% of Janus shares within a year, invest $2 billion in the funds and help distribute them in Japan.
Dai-ichi held 19.9% as of Dec. 4, according to a regulatory filing. The company, which had options priced at $10.25 a share, bought the entire holding at lower prices on the open market.
Since the deal was announced on Aug. 10, the shares rose 16 percent through yesterday, compared with the 23% gain by the Standard & Poor’s 20-company index of asset managers and custody banks. Janus announced results before the start of regular U.S. trading.
Bloomberg
