Janus Capital Group's assets under management were $198.9 billion as of Sept. 30, up 2.2% from three months earlier and up 7.5% from Sept. 30, 2015.
The gain was driven by $6.7 billion in market appreciation. However, Janus reported $2.4 billion in net outflows, the largest since the third quarter of 2015 when the Denver-based money manager saw $3.3 billion in net outflows. The company reported net inflows of $300 million in the second quarter.
INTECH, Janus' quantitative equity investment unit, saw the biggest net outflows of $1.8 billion in the current quarter, followed by fundamental equities with $900 million and fixed income with $100 million. The one bright spot was Janus' Perkins value equity division, which saw net inflows of $400 million, its first net inflows since the first quarter of 2011.
The earnings report is the first since Denver-based Janus announced it was merging with London-based Henderson Group on Oct. 3 to form a money management firm with more than $320 billion in assets. Analysts said the ultimate success of the merger, which is expected to be completed in the second quarter of 2017, will partially depend on Janus being able to reverse long-term negative outflow patterns.
Not only has Janus suffered net redemptions in four of its last five quarters, but the last full year it reported net inflows was back in 2009.
Janus CEO Richard Weil said during an earnings call Tuesday said he did not see net outflows as a “long term-truth,” but that he was personally frustrated by this quarter's outflows. “This was a frustrating quarter for short-term results,” he said.
Janus reported operating revenue of $258.9 million in the third quarter, up 2.8% from the previous quarter but down 5.4% from the third quarter of 2015. Net income in the quarter was $41.1 million, up 5.4% from the previous quarter and $106.5% from the third quarter in 2015.