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Janus assets surpass $200 billion in 2007

By James Paton, Rocky Mountain News (Contact)

Published January 25, 2008 at 12:05 a.m.

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Janus Capital Group's assets in 2007 climbed back to the $200 billion mark as the company's main business staged a comeback and attracted more money than it lost for the first time in seven years.

Investors, who had shunned Janus for a long stretch, began to return to the firm's portfolios, encouraged by strong returns. The Janus Twenty, Orion, Contrarian and Overseas funds sit in the top 1 percent of their peer groups over three- and five-year spans.

Although Janus' Intech unit cooled off, its core stock and bond funds racked up $7.5 billion in net sales last year after watching investors yank more than $50 billion over the prior three years.

Growth investing, Janus' specialty, also has come back into fashion, helping to lift the company's assets under management to $207 billion from $167 billion a year earlier, the firm said in a fourth-quarter earnings report that heartened Wall Street.

Shares of Janus rose nearly 9 percent Thursday to $27.76 on the New York Stock Exchange.

"I think the positive long-term flows in Janus is probably the big story, given where we were a year ago," CEO Gary Black told analysts Thursday.

Revenue for the year crossed the $1 billion level on a surge in fees for managing money.

For the quarter, Denver-based Janus reported net income of $29.7 million, or 17 cents a share, compared with net income of $37.7 million, or 19 cents a share, in the comparable period of 2006.

The company wrote off the value of a printing business it put up for sale. Excluding that, net income from continuing operations for the quarter was $61.6 million, or 36 cents a share.

In December, Janus bailed out three money market and cash funds, buying from them $109 million in debt issued by structured investment vehicles, or SIVs, to protect investors from losses after the securities were downgraded by a ratings agency.

More than a dozen Janus portfolio managers have left in recent years, and Janus' CEO said one goal will be to offset the impact of the turnover.

"We have a very strong bench, a strong research team," he said, according to a transcript. "We have to make sure that we continue to deliver strong performance."

The true test may come if the stock market hits a prolonged period of declines. Even if Janus products perform well relative to their competitors', a rough market would have an adverse effect.

"Having good performance, I think, gives us some lift," Black said. "That said, if the markets deteriorate further, you will see folks on the retail side take money out from equities and put it into cash. That's what you've seen historically."

patonj@RockyMountainNews.com or 303-954-2544