The hiring of champion bond manager, Bill Gross, seems to have benefited the global investment firm Janus Capital Group, Inc. (NYSE:JNS). Following the reining in of the eminent bond manager, the company witnessed an inflow of over $1 billion of estimated net deposits into two bond mutual funds in October, per a report by Bloomberg.
According to Bloomberg data, under the management of Gross, The Janus Global Unconstrained Bond Fund (JUCIX) attracted an estimated $364 million in client deposits, raising assets to $442.9 million as of Oct 31. The company’s core bond strategy, Janus Flexible Bond Fund (JAFIX) drew deposits of $821 million in the month, driving assets to $8.4 billion.
On third-quarter 2014 earnings call conference of Janus Capital, management stated that the hiring of Gross did not bear impact on the quarterly results as there were just three days left for the quarter to wrap up following the announcement of his hiring. Gross took over as the portfolio manager on Oct 6 in the fourth quarter. Management then stated that Janus Global Unconstrained Bond is set to benefit under Gross’ management.
Management also sees promising growth prospects owing to the recent acquisition deal. In order to tap opportunities in the growing ETF market, Janus Capital is set to acquire VS Holdings Inc., the parent company of Velocity Shares, LLC. VelocityShares is a leading provider of institutionally-focused exchange-traded products (“ETPs”), including exchange-traded funds (“ETFs”), that are focused on offering volatility management solutions.
The deal includes an initial upfront cash consideration of $30 million and is expected to close in fourth-quarter 2014.
In the earnings call, Janus Capital’s Chief Executive Officer Richard MacCoy Weil mentioned that the joining of Bill Gross is a “game changer” for the company while the Velocity Shares acquisition is a “huge positive.”
We remain encouraged by the company’s strategic initiatives to boost business. The company has the best-in-class investment boutique with potential for growth in assets under management (AUM) and revenue along with competitive leverage.
As of September 30, 2014, Janus Capital reported total AUM of $174.4 billion, up from $166.7 billion as of Sep 30, 2013.
Currently, Janus Capital carries a Zacks Rank #3 (Hold). Some better-ranked banks include Enterprise Financial Services Corp. (NASDAQ:EFSC), Old Second Bancorp Inc. (NASDAQ:OSBC) and Fidelity Southern Corp. (NASDAQ:LION). All these stocks sport a Zacks Rank #1 (Strong Buy).