Asset manager Janus misses estimates as clients exit, managers quit

Thu Jul 25, 2013 12:00pm EDT

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(Reuters) - Asset manager Janus Capital Group Inc reported a weaker-than-expected quarterly profit as clients withdrew money from its underperforming funds and some key managers defected, sending its shares down nearly 4 percent.

Net outflows of $5.4 billion for the second quarter were only partially offset by a $2.2 billion increase in the market value of assets under management.

The performance of some of the company's larger funds were affected by changes in its portfolio management team, Chief Executive Richard Weil said on Thursday.

"Particularly when performance isn't as good as one might hope, one has to take a look at whether we have all the right people and all the right seats," Weil said on a conference call.

Janus lost three fund managers in May, two of whom were running the company's top-performing funds.

Weil, who has been under pressure from investors to expand Janus's product base and improve returns, launched a multiple asset class fund in March aimed at attracting investors.

The company sold 20 percent stake in itself to Dai-ichi Life last year, allowing it to sell its products in Japan.

Janus named Jennifer McPeek as chief financial officer to replace Bruce Koepfgen, who will become president.

McPeek, who takes up her new job on August 1, is currently treasurer and senior vice president.

Net income attributable to Janus fell to $15.8 million, or 8 cents per share, in the quarter ended June 30 from $23.4 million, or 13 cents per share, a year earlier.

Analysts on average expected earnings of 16 cents a share, according to Thomson Reuters I/B/E/S.

Average assets under management rose 6 percent to $164.2 billion.

Rival T. Rowe Price Group reported net outflows of $8 billion in the quarter, while industry leader BlackRock Inc reported inflows of $11.9 billion.

Janus's shares had gained 12 percent in the three months to Wednesday's close, trailing the Dow Jones U.S. Asset Managers Index, which had risen about 14 percent.

The company's shares were down 3.7 percent at $9.35 at midday on the New York Stock Exchange.

(Reporting By Neha Dimri in Bangalore; Editing by Sreejiraj Eluvangal and Ted Kerr)

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