Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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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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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.”