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Rating:Amid Leadership Changes, a $432B-AUM Firm Frees a Subsidiary Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, February 03, 2022

Amid Leadership Changes, a $432B-AUM Firm Frees a Subsidiary

Reported by Neil Anderson, Managing Editor

A $38-billion-AUM (as of December 31) institutional asset manager will soon spin off from a multinational, publicly traded, $432-billion-AUM (also as of December 31) fund firm, even as both firms are making big leadership changes.

Richard MacCoy "Dick" Weil
Janus Henderson Group plc
Outgoing CEO
Today, Adrian Banner, CEO and chief investment officer of Intech Investment Management LLC, and Dick Weil, CEO of Janus Henderson Group plc [profile], confirm that Intech's management team and new board members have agreed to buy West Palm Beach, Florida-based Intech from London-based Janus. Intech is a quant (i.e. quantitative investing) shop that specializes in equities, and Janus currently owns 97 percent of the boutique. Meanwhile, a high-profile activist investor gained two Janus board seats this week, and both Intech and Janus are changing CEOs.

The management buyout of Intech is expected to close by the end of Q2, and Janus and Intech have set up "an ongoing transition services agreement." When it does, the firm will be 100-percent owned by employees and by its new board, which will include: Churchill Franklin, co-founder and ex-CEO of Acadian Asset Management; Larry Leibowitz, former chief operating officer of the NYSE; and Myron Scholes, a Nobel laureate in economics. Banner will stay on as Intech's CEO, but he will pass the CEO reins to Entrypoint Capital CEO Jose Marques. And Jian Tang will rise to portfolio manager.

Meanwhile, Weil is expected to retire at the end of next month (as revealed last November), and there is no official word yet on who will succeed him atop Janus. Once he steps down, Weil is slated to stay on until the end of June as an advisor to the company. (Weil took over as CEO of Janus Capital Group back in 2010, and he stayed on after Janus merged with Henderson Global Investors in 2017, later becoming the combined firm's sole CEO.)

Ahead of that CEO change, Nelson Peltz, CEO and founding partner of Trian Partners, and Ed Garden, CIO and founding partner of Trian, joined Janus Henderson's board of directors on Tuesday, while leaving the board of another asset manager, Invesco. Trian now lays claim to being Janus Henderson's largest shareholder, owning about 16.7 percent of the company, up from 9.9 percent 16 months ago (when there were rumors that Peltz might try to push for an Invesco-Janus Henderson merger). Janus Henderson's 12-person board now includes 11 independent members.

Richard Gillingwater, chairman of Janus Henderson's board, frames his welcoming of Garden and Peltz in the context of the upcoming CEO change.

"We look forward to benefitting from their deep industry experience, fresh perspectives, and valuable insights as we search for a new CEO and evaluate growth opportunities and expansion into new markets and products," Gillingwater states.

Peltz and Garden, meanwhile, praise Janus Henderson and hint at "numerous operating and strategic opportunities ahead" for the asset manager.

As for Intech (fka Enhanced Investment Technologies LLC), the shop was founded by then-CIO Robert Fernholz within Prudential Insurance in 1987. In 2002, Pru sold Intech to Berger Funds, and Berger in turn was acquired by a predecessor company to Janus Henderson, though Fernholz and Robert Garvy (then Intech's CEO) retained a big minority stake in Intech. Over the years, Janus slowly upped its majority stake in Intech. Fernholz began sharing the CIO reins with Banner in 2008, and in 2012 Banner took over as Intech's sole CEO and CIO, with Fernholz staying on as a consultant to the firm.

Banner describes spinning off from Janus Henderson now as putting Intech "in the best possible position to focus on portfolio management and research, improve investment outcomes for clients, and deliver long-term value to ... stakeholders."

Weil, for his part, frames the deal as "providing Janus Henderson with increased operating efficiency and focus on fundamental, active investment, while fulfilling Intech's desire to operate independently in the delivery of quantitative investment solutions." According to the Janus team, Intech's 2021 average net management fee margin after distribution expenses clocked in at 17 basis points. That's far lower than the net fee margins for Janus' other investment areas, such as alts (68 bps), traditional equities (56 bps), multi-asset (53 bps), and fixed income (29 bps).

"We are supportive of Intech's new ownership structure, as it allows both organizations to focus on their key value propositions: Janus Henderson on providing active, fundamental investing; and Intech on delivering superior quantitative investment solutions to institutional investors," Weil states, praising Intech's 35-year track record. 

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