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MONEY MANAGEMENT

Henderson assets up over year; Janus merger on track

Andrew Formica
Andrew Formica

Henderson Group’s assets under management were flat over the final quarter of 2016 and increased 9.7% over the year ended Dec. 31 to £101 billion ($124.2 billion).

CEO Andrew Formica said on a conference call Thursday announcing the firm's financial update that 2016 was a "transformational" year for Henderson, with the announcement of a merger with Janus Capital Group. He also highlighted the opportunities for growth in institutional business afforded by the deal.

Henderson recorded net outflows of £1.4 billion for the three months ended Dec. 31, and net outflows of £4 billion for the year. Net inflows totaled a record £8.5 billion in 2015.

However, institutional assets under management grew over the quarter and the year. For the three months ended Dec. 31, institutional assets grew 3% and over the year grew 18.6%, to £41.6 billion. Net inflows for the quarter totaled £854 million, compared with £437 million in net inflows the previous quarter. Total institutional net inflows for the year were £607 million.

Market movements and foreign exchange added £366 million to institutional assets in the fourth quarter and £5.9 billion for the year.

Mr. Formica said he was "pleased we delivered a resilient financial performance" in a year that saw "tremendous turbulence" in markets and politics. He also highlighted the "tough year" for active management in general, but said clients do not tend to dwell too much on one-year performance. For the three years ended Dec. 31, 77% of strategies outperformed their relevant benchmarks, he added.

Commenting further on the merger with Janus, which will create a money management firm with more than $325 billion in AUM, Mr. Formica said the deal is on track to be completed by the end of May. "Both Henderson and Janus have a higher proportion of retail than institutional ... and we see that as an important market for us and we do want to maintain our presence in those markets. But the merger does give us the opportunity to expand our institutional presence and really accelerate plans that Henderson already has … we have a handful of people in the U.S. covering the institutional market — Janus has 30 people representing the institutional market over there. So we will significantly enhance our presence in that market. Japan, through the relationship and tie-up with Dai-Ichi, has been a significant growth market for them particularly on the institutional side," where Mr. Formica said Henderson "really have seen very little success." Both firms have been building out capabilities in Australia.

For Henderson's core markets of the U.K. and Europe, in particular Benelux, "we will be adding to that in areas such as France and Germany with dedicated teams. So we will be expanding our institutional presence across Europe as well." Mr. Formica said "quite a significant focus on the institutional market" will come with the merger, although the firm will not lose sight of its retail business.