Janus Capital Group (JNS) may be priming itself as an attractive acquisition target through its deal with a large insurance company and newly employed efficiency strategies, while seeing a slight turnaround in investment performance, says Macrae Sykes, Research Analyst at Gabelli & Company, Inc.
“Janus (JNS) announced a deal with Dai-Ichi Insurance (TYO:8750) in August 2012, so it has already executed on signing up a strategic agreement, which does a couple things for them. First, it broadened their international distribution. It enables the company to bring more capital into their products through the partnership and also strengthens, in my opinion, its platform with institutions, given the strength of the large insurance company,” Sykes said.
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Investment performance has slowly been turning for JNS, and Sykes expects to see an improvement in performance fees at the end of the year, as new management has been able to improve efficiency at Janus and has taken cost out while improving its operations.
“Janus has been aggressive in terms of deleveraging their balance sheet, so it has three distinct investment boutiques, which include Perkins Value, INTECH and Janus, and now an emerging fixed income unit, which has been growing very nicely for the last two years. So the company is diversifying AUM and improving its operations where it can, while waiting for the investment performance to turn around,” Sykes said.
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