The highest outflows in nearly a decade caught up with Janus Capital Group Inc on Thursday and drove down shares in the asset manager by 7 percent.
The Denver-based company has struggled to reverse steady withdrawals by customers moving away from its well known equity funds and wary of their mixed performance records.
Holders of Janus stock had seemed willing to wait for better days. But the mood changed when Janus reported net redemptions of $6.2 billion by investors for the three months ended December 31, the highest it has reported since the second quarter of 2004.
Total assets under management were $173.9 billion at December 31, up from $166.7 billion at September 30 only because market gains offset the outflows.
Janus' shares promptly fell and were trading down 7 percent at $12.03 by early-afternoon while analysts fretted about their future. "I think it's going to be a very gradual process in terms of turning the flow story around," said Sandler O'Neill analyst Michael Kim in a telephone interview.
Speaking on a conference call with analysts Thursday morning Janus Chief Executives Richard Weil struck the cautious notes that have become familiar since he took over the business at the start of 2010.
Weil called the job of improving flows and results "clearly the elephant in the room" and said problems stemmed from both performance concerns and the effects of portfolio manager changes. High-profile shifts on Weil's watch have included new leaders for the $6.1 billion Janus Triton Fund and the $2.4 billion Janus Venture Fund last year.
Fourth-quarter net income rose 23 percent to $38.3 million, or 21 cents per share, from $31.2 million, or 17 cents per share, a year earlier. Analysts on average had expected the company to earn 18 cents per share, according to Thomson Reuters I/B/E/S.
The profit increase partly reflected higher investment management fees stemming from the market gains. Investment management fees were $208 million during the quarter, up from $193.8 million in the same period a year earlier.
(Reporting by Ross Kerber; Editing by Rosalind Russell and Andrew Hay)