Activist hedge fund Trian Fund Management has taken 9.9% stakes in money managers Janus Henderson and Invesco and may encourage the firms' management and boards to explore mergers and acquisitions.
The stakes were disclosed in separate SEC filings Friday and reported by Nelson Peltz, CEO and founding partner; Peter W. May, president and founding partner; and Edward P. Garden, CIO and founding partner.
Trian said it purchased the stakes because executives "believe that these securities are undervalued and represent an attractive investment opportunity."
Both filings said "the asset management industry is undergoing significant change due to a variety of competitive pressures, and that industry participants that possess significant scale and product breadth, streamlined and efficient non-investment functions, and the ability to invest in technology, growth and innovation, will be best positioned to succeed in the industry and serve clients going forward."
As such, Trian said it may encourage Janus Henderson and Invesco's respective boards and/or management teams to explore mergers, acquisitions and consolidations "with one or more companies in the asset management industry." The Trian executives may initiate or participate in discussions with boards and/or management of potential counterparties.
Trian also intends to engage in discussions with the firms' boards and/or management teams "regarding various strategic and operational initiatives" that Trian believes can generate value, the filing said. These initiatives may include recommendations relating to organizational structure, technology, dividend policies and corporate governance, the filings said.
The Janus Henderson filing added that Messrs. Peltz, May and Garden have spoken with Richard Gillingwater, non-executive chairman. The Invesco filing said they have also "met and engaged in a constructive discussion" with Martin Flanagan, a director, president and CEO; and Allison Dukes, senior managing director and chief financial officer. During this meeting, Trian executives requested that Messrs. Peltz and Garden be put on Invesco's board. A revamp of the board was also discussed, the filing said.
A Janus Henderson spokesman said the firm regularly engages with and considers input from shareholders.
While the company has a policy not to comment on specifics relating to discussions with individual shareholders, "the company notes that it only heard from Trian on Thursday regarding its investment. At Janus Henderson, we are executing upon our strategy of 'Simple Excellence' producing dependable investment outcomes, delivering industry-leading client experiences, increasing operational efficiency, fostering a proactive risk and control environment, and developing new growth initiatives."
An Invesco statement said the firm welcomes high-quality investors and continuously evaluates opportunities to further strengthen its ability to meet client needs and enhance long-term shareholder value. "We value shareholder input and regularly engage with our major shareholders in a constructive dialogue aimed at further strengthening our business and driving long-term, sustainable growth," the statement said.
Janus Henderson had $336.7 billion in assets under management as of June 30. Invesco had $1.15 trillion in AUM, also as of June 30.
A spokeswoman for Trian could not immediately be reached for comment.