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Here’s Why Janus Henderson Could Struggle in 2019

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The famed all-stock merger of Janus Capital Group and Henderson Group was finalized in May 2017, creating an asset management behemoth that cared for over US$ 360 billion in assets. However, the combined entity Janus Henderson Group plc has struggled to keep up with its peers and has witnessed an accelerating pace of investor withdrawals across many strategies. At the end of December 2018, Janus Henderson’s assets under management stood at US$ 328.5 billion versus US$ 370.8 billion from December 2017. In the fourth quarter of 2018, Janus Henderson experienced outflows of US$ 8.4 billion, with a US$ 4.1 billion majority coming from equity funds. In February, the asset manager chose to shutter its Australian equity investment operations. Market headwinds, performance issues, fundraising challenges, and exodus of star managers are a few key reasons why some active equity shops lose AUM. To stand out and avoid the fee-to-the-bottom game, asset management firms that have a focus in equity products need star managers to attract institutional funds.

Janus Henderson is lucky to have Dai-Ichi Life Holdings as its top institutional investor shareholder. In May 2018, Dai-Ichi boosted its stake in Janus Henderson to 15.3% share ownership

Retirement of Bill Gross: Bond King Puts Crown Down

Bill Gross, “the bond king” who co-founded PIMCO almost a half century ago, announced his retirement in 2019. As of March 1, 2019, Gross will leave behind his high-profile career as a fixed income expert who has been influential throughout the world for decades. In the last five years, he has endured several hardships. He first suffered fallout from his soured relationship with Mohamed El-Erian. Gross did not want El Erian to leave the firm, and reportedly lashed out at him in various ways, such as removing his trading seat, once El-Erian’s departure was assured. After leaving PIMCO, his reputation took even more of a drubbing. The details of his divorce became fodder for newspapers, magazines, and financial news websites. Then he was publicly excoriated for his work at Janus Henderson, since he had consistently underperformed during his tenure there. Gross was not able to replicate his success at PIMCO, steering the troubled Janus Henderson Global Unconstrained Bond Fund since 2014.

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China’s Central Bank Creates Macro-Prudential Management Bureau

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The People’s Bank of China (PBOC) created a new department to oversee and attempt to eliminate financial risks to the system. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Like its U.S. Peers, Legg Mason Seeks to Trim Costs

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Legg Mason Inc., a Baltimore-based asset manager, has announced a reduction in workforce as is prepares to streamline operations and save money. Legg Mason’s leadership commented that assets under management fell 5 % year-on-year. Legg Mason currently manages US$ 727.2 billion (as of December 31, 2018), which is down from the previous US$ 767.2 billion. CEO Joseph A. Sullivan noted that a global operating platform will centralize fund administration, IT, and other departments that work with affiliates. Sullivan did not discuss the number of layoffs expected, or specify which areas would be impacted. Legg Mason disclosed they planned to close a quarter of its exchange-traded funds in March 2019. These three ETFs include a U.S. strategy, emerging markets, and a developed markets strategy outside the U.S. However, these funds run around US$ 28 million in assets under management.

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Monetary Authority of Singapore Establishes Corporate Governance Advisory Committee

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On February 12, 2019, the Monetary Authority of Singapore (MAS) revealed the creation of a Corporate Governance Advisory Committee (CGAC). CGAC was formed to advocate for good corporate governance practices among listed companies in Singapore. Bobby Chin, Director of Singapore Telecommunications Limited, will be the Chair of CGAC. According to a MAS press release, “CGAC will identify current and potential risks to the quality of corporate governance in Singapore.”

MAS formed the Corporate Governance Council (Council) in February 2017. The Council was dissolved after it pushed out a publication of its final recommendations on August 6, 2018.

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