Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

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Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

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Categorized | Financial

Janus Henderson: a two-headed challenge


Posted on October 3, 2016

JANUS CAPITAL FUNDS DENVER...An unidentified couple walks past the sign outside the offices of Janus Capital Group in east Denver on Tuesday, April 27, 2004. Janus Capital Group struck a $225-million settlement with regulators on Tuesday, the latest deal to emerge from the improper trading scandal sweeping the $7-trillion mutual funds industry. (AP Photo/David Zalubowski)©AP

Henderson Group is merging with Janus Capital, which takes its name from the dual-countenanced Roman god of gateways. Appropriately, the enlarged asset manager will have two public faces, co-chief executives Andrew Formica and Dick Weil from Henderson and Janus respectively. The danger, as with Janus himself, is that the direction of travel will be ambiguous.

The rationale for this nil-premium merger is clearer. Janus, the smaller partner, brings a US dimension to a Henderson operation focused on the UK and Asia, not least through the presence of ex-Pimco “bond king” Bill Gross. Assets under management will rise from $195bn to $320bn. The combined business should be better placed to compete in a world where active managers are under pressure from regulators and index investors.

    Annual cost savings are estimated at a punchy $110m. Taxed and capitalised, that will be worth more than $1bn, compared with a combined market capitalisation of some $6bn before the deal announcement. This explains why shares in Henderson jumped 16 per cent at the opening bell.

    The betting is that an integration involving Mr Formica is likely to succeed. The energetic Australian successfully incorporated troubled rivals Gartmore and New Star into Henderson. He says he will be able to repeat the trick with Janus because Mr Weil shares his vision.

    But the dual CEO set-up is unusual and looks like a sop to two powerful managers. Every other job at the combo, chaired by Henderson’s Richard Gillingwater, has been carefully allocated to one or other partner. The business will cancel its UK quote to save money, while keeping listings in the US and Australia and a cheap Guernsey tax registration. Joint CEO remuneration that last year would have cost $14m is evidently an affordable luxury.

    UK shareholders may also question plans for Janus’s largest shareholder, Daiichi, to receive options to subscribe to 5 per cent of the enlarged group. Any preferential giveaway to the Japanese insurer should raise eyebrows.

    Investors may thus find details of the deal to quibble with, even if its broad logic is unimpeachable. The proposed name, Janus Henderson, could meanwhile dismay anyone called “Janice Henderson”, which is how Mr Formica pronounces it. Poor lady. She should brace herself for misdirected phone calls.

    jonathan.guthrie@ft.com