Fund investors pulled some money from Janus Capital Group last month, but there was no mass exodus from the Denver firms' funds. The lack of response by shareholders to allegations made by authorities that the firm enabled Canary Capital to time its funds suggests that it will take more revelations in the hedge fund scandal to shake shareholders out of funds.

Separately, the fund firm also confirmed that it is rebuilding its sales force to increase its distribution in the broker-dealer channel. That effort began in August, before the Canary probes became public but after New York Attorney General Eliot Spitzer sent his initial wave of subpoenas to fund firms involved with Canary.

In their regular monthly report of assets and flows, Janus officials said that shareholders pulled a net $3.4 billion from long-term funds in September and another $1.0 billion from money funds. That $4.4 billion of total flows was four times the $1.1 billion of market depreciation reported by Janus. Those changes left the firm with $146.5 billion in assets under management. That figure is 3.6 percent below the $152.0 billion it managed at the end of August.

However, that figure grew to $152.1 billion by the end of the first week of October. Most of that $6.6 billion gain was due to market appreciation.

Even as it is facing the tough challenge of overcoming a now-tarnished reputation, Janus executives are continuing to work on creating new distribution channels for their funds. The primary focus at this time is on the broker-dealer and financial advisor channel.

"The overall goal is to build a substantial presence in those two markets, sharpen our focus and deepen relationships. This is obviously an important part of our business," spokesperson Blair Johnson told the MutualFundWire.com.

Johnson confirmed that the fund firm let go seven of its nine wholesalers covering the intermediary channel in August. Since that time it has hired six new wholesalers and it plans on hiring another dozen or so in the near future. Eventually, it expects to dedicate 40 internal and external wholesalers to the channel. Erich Gerth, national sales director, is overseeing the creation of the team.

"These people are proven performers," said Johnson noting that the new hires have an average of 10 years experience in the fund industry and 18 years experience in sales. He added that each of the new hires was also a top decile performer at their prior firm. Johnson declined to identify the hires at this time.

"We are looking for more people just as experienced," he added.  

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