US/SWITZERLAND -Swiss large-cap value specialist Vontobel Asset Management is to enter into a tie-up with Denver-based Janus Capital Group as the latter looks to diversify after a drop in Q1 net profits.
Chief executive officer of Janus, Mark Whiston, said that pending approval from fund board and shareholders, Vontobel will name Janus as adviser for its US value and international equity funds.
Janus plans to rebrand and market both funds through its distribution network. No further details were offered.
“With a wider range of investment choices, we’re seeing a dramatic increase in demand for our products,” added Whitton, noting that institutional requests for proposals were up 72% in the first quarter from the same time last year.
Janus, which recently suffered a blow with the retirement of its veteran managing director Helen Young Hayes, posted a net income of US$38.6m during the first three months, against US$45m during the preceding quarter.
Average assets under management totalled US$136.4bn, a 4.7% drop from Q4 2002 and a 26.9% decline from Q1, 2002. The firm blamed market depreciation.
Whiston added: “We initially broadened our product lineup by introducing several small- and mid-cap value and risk-managed equity funds.
“These funds, which are managed by our subsidiaries but carry the Janus brand, are designed to complement our growth offerings.”
Vontobel also conceded “disappointing” results in 2002, citing “persistent underperformance” on the worlds major stock markets and write-downs in private equity positions.
The group scraped a CHF2m net profit in 2002 compared to CHF33.2m in 2001.
Assets under management were also down 14.6% to CHF52.2bn. Vontobel said that it lost two major institutional mandates in the first half of the year because of corporate restructuring, but that all business areas reported net growth between July and December.
Peter Wagner, chairman of the board of directors, said: “The pattern of business in the first few months of 2003 provides no grounds for optimism regarding the current year.
“However, I am convinced that - with our new structures and new management - we have laid the foundation for sustained profit growth in the medium term, even if the markets remain difficult.”
The deal is subject to shareholder value in September.
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