Janus Henderson Loses Top Investor as Client Exodus Persists

(Bloomberg) -- Janus Henderson Group Plc is losing its biggest shareholder as the fund manager fails to stem a client exodus that's lasted for more than three years.

Dai-ichi Life Holdings Inc. will exit after selling its nearly 17% stake for about $897 million to focus investment on its global insurance business, statements from Janus Henderson show. The asset manager plans to buy $235 million of the stock in the offering, which was priced at $29.25 a share, a 1.1% discount to Thursday's close.

Janus Henderson announced the sale alongside full-year results, which showed that investors were continuing to desert the firm's funds. While the $1.1 billion outflows in the fourth quarter were the least since shortly after the asset manager's creation in a mid-2017 merger, overall withdrawals last year amounted to more than $24 billion.

Dai-ichi's exit comes just months after activist shareholder Trian Fund Management LP disclosed 9.9% stakes in Janus Henderson and U.S. firm Invesco Ltd. Trian Chief Executive Officer Nelson Peltz said in October that asset managers need more scale to compete with the likes of BlackRock Inc., and that he expected more deals in the industry. Invesco added Peltz to its board of directors in November.

The stake sale is “a fairly big negative as some investors were hoping Dai-ichi could be a potential consolidator of Janus Henderson,” Wells Fargo & Co. analysts said in a note to clients Thursday. “It seems to indicate that Janus Henderson is nowhere close to an M&A transaction -- Dai-ichi wouldn't sell its stake in front of such a development.”

The merger that formed Janus Henderson was intended to provide scale amid an investor shift out of the actively managed funds it specializes in and into cheaper, index-tracking products. Yet growth has been slow, with assets under management increasing to about $402 billion at the end of last year from about $331 billion at the time of the merger. The company's shares have gained about 6% since the tie-up.

Dai-ichi was the largest shareholder in Janus Capital Group Inc. and supported its merger with Henderson Group Plc. It became an affiliate company of the combined Janus Henderson in 2018. The two companies will continue to collaborate on product development and distribution.

“Although we are disappointed to lose Dai-ichi as a shareholder, today's news does not change the path that Janus Henderson is on,” Chief Executive Officer Dick Weil said in the statement. “Despite the exceptionally challenging year, we have continued to make significant progress.”

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