Janus Capital Group reported $204.7 billion in assets under management as of March 31, up 4% from three months earlier and up 7% from a year earlier, according to its earnings statement Thursday.
Janus saw $12.2 billion of market appreciation in the first quarter, which was partially offset by net outflows of $4.3 billion. The largest redemptions came from Janus' quantitative investment division, INTECH, which saw $3.8 billion in net outflows. This was followed by fundamental equities, with $600 million in net outflows; and fixed income, which saw $300 million in net outflows. Exchange-traded notes had $400 million in net inflows.
In the fourth quarter of 2016, Janus had $2.1 billion in net outflows, which were largely driven by redemptions at INTECH, which saw $1.6 billion in net outflows.
Janus' first-quarter net income of $30.9 million was flat from the previous quarter and down 12% from the year-earlier quarter.
Janus, which is in the process of merging with London-based Henderson Group, said net income adjusted for merger costs was $43.8 million in the first quarter and $37.2 million in the previous quarter.
Operating revenue of $257.6 million in the first quarter was up 2.5% from the previous quarter and up 3.7% from the year-earlier quarter.
Both Janus and Henderson shareholders are expected to vote on the merger April 25-26.
“As we prepared for Janus and Henderson shareholder meetings next week, we're more convinced than ever that the combination of these two firms make both of us stronger than either would be apart,” Janus CEO Richard Weil said during an earnings call with analysts Thursday. We're making good progress building a single leading global active asset manager.”
Mr. Weil also addressed the INTECH net outflows. He said that weak investment performance in the second half of 2016 has driven recent outflows, including two redemptions of a combined $3.3 billion in the latest quarter. He said he remained “optimistic” about INTECH's long-term growth prospects and said in the first quarter of this year, four of INTECH's five largest investment strategies had outperformed their benchmarks.
However, none of INTECH's strategies outperformed their respective benchmarks over the one- and three-year periods ended March 31, and only 17% of strategies topped their benchmarks over a five-year period ended March 31, the earnings release said.