Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Financial

Andrew Formica: Henderson’s serial dealmaker


Posted on October 3, 2016

Andrew Formica, CEO of Henderson. Photographed at their London HQ.
Photograph: Rosie Hallam

Andrew Formica, the feisty Australian who will become co-chief executive of newly merged investment company Janus Henderson, is no stranger to difficult deals.

The 45-year-old fund manager, who became chief executive a few weeks after the collapse of Lehman Brothers in 2008, helped Henderson to more than double its asset base to £100bn through an aggressive and at times audacious acquisition strategy.

    The London-headquartered fund company’s two biggest takeovers since the financial crisis — New Star and Gartmore — were widely considered to be on the brink of collapse before Mr Formica engineered takeovers in 2009 and 2011 respectively.

    The two deals helped Mr Formica, a trained accountant who started his career as a fund manager with AMP Capital in Australia, develop a reputation for being an intelligent dealmaker with a talent for integrating troubled businesses.

    With Janus, there appears no need for any similar rescue, but Mr Formica might face his biggest challenge yet in having to rub alongside his fellow chief executive, Janus’s American boss Dick Weil.

    Amin Rajan, chief executive of Create Research, the asset management consultancy, says of Mr Formica: “He is astute with a strong innovation streak. He is widely admired for being one the few business leaders to achieve a successful transition from portfolio manager to CEO. After cutting ties with AMP, he has helped to restore Henderson as a respected, pure play asset manager.”

    Lex

    Henderson / Janus: active aggressive

    The headquarters building of Janus Capital Group Inc. stands in Denver, Colorado, U.S., on Monday, Sept. 29, 2014. Bill Gross announced last week that he left Pacific Investment Management Co. (Pimco), the bond giant he helped found 43 years ago to join Janus Capital Group Inc. Photographer: Matthew Staver/Bloomberg

    Growth of passive investing prompts active managers to seek cost savings

    Under Mr Formica’s leadership, Henderson bought another six asset management boutiques since 2011 across Australia, the US and Europe, including the property investment arm of French asset manager Horizon, US small-cap specialist Geneva Capital, and natural resources-focused 90 West Asset Management.

    The deals appear to have paid off. Henderson’s share price has more than doubled since the Gartmore acquisition, and investment performance has remained strong: 81 per cent of the company’s mutual funds have outperformed their benchmarks over the past three years, according to its latest annual report.

    Mr Formica now faces the biggest deal of his career after agreeing to merge Henderson with US-listed Janus Capital. The merger will see Mr Formica become co-CEO of a combined group that will oversee $320bn of assets.

    Mr Formica is adamant the co-CEO structure will not get in the way of his most important priorities: fending off the threat posed by the rise of passive investing; responding to regulatory changes and the push for greater transparency around fees; cutting costs and growing assets.

    He says of Mr Weil: “When we have an argument — and we haven’t to date — we will have them behind closed doors. Of course, like every partnership there will be challenges and we will work through them. Dick and I absolutely share the same philosophy.”

    Mr Formica adds, however, that further dealmaking is off the cards for the foreseeable future. He tells the FT: “M&A is not easy to do — particularly when it is cross-border and transatlantic. Future M&A is certainly off the agenda for the next two to three years while we [integrate the new business] — beyond that we will worry about it later.”