At the margin, their purchase signals their continued belief in that business, said D.J. Neiman, associate analyst at William Blair & Co., Chicago, who follows Janus.Janus bought the 3% stake for $61 million, according to an April 2 filing with the Securities and Exchange Commission, giving INTECH a value of $2 billion.
Generally, money managers profit margins have been squeezed as assets under management remain down or flat due to market impact, said Mr. Neiman. For INTECH, investment performance is still very good, but were in an interesting environment overall and the industry is under pressure, he said.
Given the market conditions, Mr. Neiman was surprised the value of the company was $2 billion up from $1.8 billion in 2006, when money managers were under less stress. In each of the last two years, Janus has bumped up its stake in INTECH, which had $64.1 billion under management throughout its 11 portfolios as of Feb. 29, according the firms website.
Last year, the mutual fund company bought a 4% chunk for $81 million, valuing the company at $2 billion, the same as earlier this month, and in 2006 it picked up a 5% piece. The 2006 deal valued INTECH at $1.8 billion.
James Aber, a spokesman at Janus, declined to comment, saying the firm was in a quiet period preceding an April 24 earnings conference call.
In a conference call with analysts a year ago, Janus officials indicated they planned to take a larger share of INTECH, but said they would stop short of owning 100%. Janus executives believe in employee ownership and will never own 100% of the subsidiary, according to Shelley Peterson, a Janus spokeswoman.