Sept. 3, 2002 — Stilwell Financial (SV) plans to merge its Janus Capital Corp. mutual-fund subsidiary into the company and adopt Janus Capital Management Inc. (JCM) as its new brand name.
Insider and 11-year Janus veteran Mark Whiston, who currently serves as Janus’ president of retail and institutional services, will become chief executive officer and vice chairman of the merged company on December 31, the expected closing date of the merger.
The changes come as Janus’ equity funds have almost uniformly posted heavy losses in 2002, with some funds plunging as much as 35% to 40% after outperforming in the 1990s.
As previously reported, Tom Bailey stepped down as chief executive of Janus Capital Management on July 1 with no named successor.
Landon H. Rowland, current president, chief executive officer and chairman of Stilwell Financial, will become non-executive chairman of the board until Jan. 1, 2004, and will continue as a director for one year thereafter. It is expected that Whiston will be appointed chairman on Jan. 1, 2004.
In addition, Helen Young Hayes, Janus’ managing director of investments, and Jim Craig, Janus’ former chief investment officer, will join the board by Jan. 1, 2003. Craig left Janus in September 2000 to run a charitable foundation with his wife. It is also expected that three new independent members will be appointed to the Janus board by Dec. 31, 2002, replacing three current directors who intend to retire.
Stillwell noted that the proposed reorganization will result in annual savings of approximately $40 million, including the elimination of about 130 to 140 jobs. Further details about jobs being cut were not available. The merged entity will market and distribute its investment products globally under the `Janus’ brand name.
JCM will control the strategic direction of the Janus funds as well as Stilwell’s other existing investment management subsidiaries, comprising Berger Financial Group LLC, which also owns Enhanced Investment Technologies LLC and Bay Isle Financial LLC; and U.K.-based Nelson Money Managers plc. Collectively, these firms manage approximately $150 billion in assets. The current Janus fund complex accounts for about $135 billion of those assets, principally in large-cap growth equity products.