Janus/Henderson co-CEOs tout London as best location for merged firm's global headquarters

For Janus Henderson Global Investors to realize its global ambitions, its co-CEOs were clear that London was where they needed to be.

Speaking exclusively to Pensions & Investments from Henderson's London-based headquarters — where the new merged business will be based — Andrew Formica and Richard Weil are convinced of the city's standing as a global financial center.

“London, despite discussions around Brexit, still remains the most appropriate base for a global business when you are looking firstly across the Americas, but also when you look to ... Asia,” said Mr. Formica, currently CEO of Henderson. “In that basis, London has the infrastructure and support for global businesses, and therefore it makes sense that we would do that.”

Henderson Group and Janus Capital Group announced their planned merger of equals on Oct. 3, aiming to create a money manager with more than $320 billion in assets under management.

Denver, where Janus and Mr. Weil are currently based, will continue to be a critical part of the business. “A lot of the executive positions that we announced ... remain in Denver, our largest pool of workforce will be in Denver,” said Mr. Formica. “The U.S. is going to be by far the largest part of the business,” with more than half of the assets under management and half of the profits originating there.

And for the future, “no matter how much growth we think can come out of different regions, the growth from the U.S. will still be the largest part,” Mr. Formica said.

The co-CEOs both will be based in London, making sure the benefits of a co-CEO structure can be realized, and in a way that ensures communication will not be hindered, added Mr. Formica.

But that means Mr. Weil relocating to the U.K.'s capital city. “London is the most interesting and diverse city in the world to my mind — I also love living in Denver, so that isn't a big factor one way or the other in my mind,” said Mr. Weil.

The co-CEOs recognized that the creation of a truly global money manager means change, including of location for certain staff, and that they need to lead from the front. Bruce Koepfgen, president of Janus, will become head of North America and will continue to be based in Denver.

“In order to create this new company that Andrew and I are envisaging and striving for, you need to have proper mixing of the talent and the people across the two pre-existing groups,” Mr. Weil said. “We need to sponsor and lead by example a genuine mixing of the teams.”

Some London-based staff will be required to move to Denver and other locations, for example. “So I think, as leaders, we want to model that behavior and lead by example,” said Mr. Weil. A spokeswoman for Henderson said the majority of staff will be unaffected by the merger.

While London will be the destination of choice when it comes to location, it will be missing out in terms of listing. Henderson is currently dual-listed on the London Stock Exchange and the Australia Securities Exchange, and Janus is 100% listed on the New York Stock Exchange.

The intention is that Henderson will delist from the LSE, with the new company listed on the NYSE. The company will also retain its ASX listing.

“In terms of listing, as a truly global business, the U.S. market — the NYSE — remains the deepest pool of capital,” said Mr. Formica. The NYSE is where “the most comparable asset management firms that you would look to as peer groups for the new firm” are listed, and it therefore makes sense for Janus Henderson to also be listed there.

Australia is actually the dominant domain of Henderson's shareholders, said Mr. Formica, with around a 60% share vs. the U.K. So combined, “the U.K. listing is actually the smallest of the three. It does not make sense to have three listings,” he said.

Further, the Australia listing is structured as CHESS Depositary Interests, which Mr. Formica said can “mirror the prime listing whether it's London or New York, with no tax consequences or no change to those employees. So the Australian one can coexist to either, but it wouldn't make sense to have three listings. And therefore, given both the existing shareholder base of Janus, but more importantly where this business should be for a peer group comparison, for liquidity, for pools of capital, New York wins hands down.”