Janus Capital Group Inc. is intensifying its focus on financial institution distribution, including through banks, as it looks to reverse years of outflows from Janus-branded mutual funds.
The Denver company plans to push sales of its traditional growth and fixed-income portfolios, along with subadvisory services from its Intech subsidiary, through private banks and bank trust departments, according to Thomas Munsell, the new managing director of Janus' global client management for financial institutions.
Mr. Munsell's newly created post reflects Janus' recent effort to boost retail sales through financial institutions, he said. It has historically devoted more resources to sales through the insurance channel, he said, but has recently branched out to bank trusts and private banks.
Until October, when it could report net third-quarter inflows to its stock and bond funds of $1.7 billion, flows at Janus' mutual funds had been negative since the second quarter of 2003, according to company data. Janus' fund flows had suffered from the bear market and then the fund-trading scandals of 2003.
Net flows for Janus-branded products remained negative by $2.1 billion in the third quarter. The positive overall number reflected net inflows of $5.1 billion at Intech. Janus' assets under management fell from more than $300 billion in early 2000, at the end of the bull market, to $130 billion at June 30 of this year.
An intensified focus on retail sales to high-net-worth investors may bolster fund inflows at Janus, said Robert Lee, an analyst at Keefe, Bruyette & Woods Inc. in New York.
"Seeking out different distribution channels is probably something that they need to do," he said.
And Janus' subadvisory services may prove particularly popular in the bank channel, where many companies have divested their proprietary fund businesses in the past two years, Mr. Lee said. "For some firms, it may well be cheaper for them to hire someone else who's better at it," he said.
"We have an increased focus on financial intermediaries in multiple channels," Mr. Munsell said. "We've been working with large bank broker-dealers nationally, but we heretofore haven't had the resources to approach the private banking and trust groups of those organizations."
The Janus-branded growth and fixed-income portfolios - some of which have posted one-, three-, and five-year returns in the top 20% of their fund classes, according to Lipper Inc. - should prove attractive to high-net-worth investors who are looking to diversify their holdings, Mr. Munsell said.
"People are looking for a rigorous, fundamental, research-driven growth product," he said.
The Intech funds, which are managed based on mathematical models rather specific stock picks, are also expected to prove popular among wealthy investors looking to mitigate portfolio risk, Mr. Munsell said. (Intech is the unit's marketing name; the company is registered as Enhanced Investment Technologies LLC.)
Janus' financial institutions sales team includes five senior relationship managers and about 30 wholesalers around the country, Mr. Munsell said. The company intends to expand the team as its client base grows, he said, but he declined to specify a head-count target for salespeople.
It also aims to drive sales growth by marketing its subadvisory services to mutual fund companies and large bank broker-dealers, Mr. Munsell said. Intech's mathematical investment strategy "is a good complement to what most mutual funds of funds are offering now," he said. "They usually only offer quantitative research."
The company also hopes its Janus Labs division, which offers training and research to financial intermediaries, will give it a competitive advantage in the financial institutions channel. The Lab's services include proprietary research on investment trends and client personality profiling.
"Even with top-tier performance, money management is commoditized," said Dana Klein, the director of Janus Labs. "Even if you were in the top decile, you would still have 34 or 35 competitors who could make the same claim. The way to differentiate yourself is to help meet advisers' needs."
Janus promoted president and chief investment officer Gary Black to chief executive in October. Steve Scheid, his predecessor as CEO, had said the company would look to expand its intermediary and financial institution wholesaling teams, along with entering the mutual fund wrap and managed account businesses.
