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The insiders' edge for 40 Act industry executives!
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Thursday, August 10, 2000 Craig's Surprise Departure Makes the Scribes Scribble The resignation of Janus number two man Jim Craig has caused quite a stir. For the first time in recent memory every major news outlet has assigned someone on its own staff to pen a story -- no wire service copy here. The typical story points out the troubles with the Stilwell spin-off and adds that Craig claims his departure was unrelated. Some coverage, like that of the New York Post, implies otherwise. The paper says that: "But investors worry that the 'retirement' of Craig, who is only 44, signals trouble at the fund company, which is part of Stilwell Financial, a company spun off from Kansas City Southern last month. 'Janus angst is growing,' said Russel Kinnel, an analyst at Morningstar, the fund rating firm."
It turns out that Craig has been planning for his departure for a while now, hints the paper. "My role in that has been more of an adviser," it quotes Craig as saying. It notes that he has groomed successors such as Blaine Rollins, Will Bales and Jonathon Colemen. Finally, the paper hints that executive recruiters will target Janus executives, although David Barrett, head of the global investment-management practice at executive search firm Heidrick & Struggles, says "it's premature to say it's open season over there." Oh yes, Craig's share of Janus may be worth as much as $75 million, says the paper. Patrick McGeehan leads his story in the New York Times with the typical spin, writing that "When executives of the phenomenally successful Janus family of mutual funds started feuding publicly with the management of their parent company last year, some investors feared the dispute would drive out top talent. Yesterday, Jim Craig, the No. 2 executive at Janus Capital, said he would leave but insisted that his resignation was unrelated to the feud." He then quotes Craig as saying "I feel very confident there will be nary a ripple in the operations at Janus." But he undermines the quote by then noting that Stilwell shares saw their "biggest one-day drop since Stilwell was formed a month ago" and then recounting the details of the messy spin-off. The article also quotes Craig calling the spin-off a "sideshow." Known for its even-handedness the Grey Lady quotes Salomon analyst Guy Moszkowski saying that he recommends the stock and that Craig's resignation is not a sign of continuing management turmoil at Stilwell. "It's not a huge event," Moszkowski tells the paper. "If Jim Craig were departing to start his own money management shop and potentially taking a lot of the talent and a lot of the assets with him, you'd have a real cause for worry." The it quotes Jon Zeschin, a "former fund company executive" turned consultant as saying "I have to believe that there certainly are some issues there," Zeschin said. "It seems rather abrupt." The closing quote is a gem from Craig: "I'm a stock jockey and never really aspired to be the M.B.A./ C.E.O. type," he said. "Essentially, I'm trading working at Janus for going to work for my wife." John Waggoner pens USA Today's coverage of the news. His lead: "For Janus investors, it's more bad news." Waggoner then details the "rocky performances" of Janus funds this year. His is also the only coverage that points out that Craig didn't take the director of research title until December of 1999 (although it incorrectly states that he took the chief investment officer at that time as Craig has actually worn the CIO hat since 1995.). That he took the title so recently somewhat undermines Craig's claims that he has been putting together a succession strategy. Once again, a reassuring quote from Craig is provided: ''The company is in the best shape it has ever been in, and in the strongest shape it has been in, and I feel very comfortable that there will be nary a ripple from my departure,'' he says. Craig's departure is treated much more matter-of-factly by Josh Friedman in the Los Angeles Times. Like other reporters he points out that "the fastest-growing mutual fund company" has seen its "high-octane funds" cool considerably and that Craig's decision was strictly personal. He also notes that "many Janus executives were unhappy with the terms of the spin-off." The paper also quotes Strategic Insights Avi Nachmany as saying that "The Janus success has come because of the collective wisdom that resides in the firm. This kind of thing almost never comes from one person." It then notes the firm survived the departure of Thomas Marsico in 1997. (So did Marsico, just as Bank of America). Morningstar's chief fund analyst Russel Kinnel says, "This decision is a blow, but it's no reason to sell any of the funds." He recommends investors wait to see if Helen Young Hayes and Scott Schoelzel to leave before they bail. Craig Tolliver covered the story for CBS.MarketWatch.com. He leads with a quote from Morningstar's Christene Benz: "I think it's a big loss for the firm. I think it would be a mistake to characterize it any other way." It then points out that Craig's departure is the first since "the hotly debated spin-off: and that it shares "plunged 8 percent." As in other coverage Tolliver adds that Craig said the timing of his departure had nothing to do with the spin-off. "People have been wondering whether it's at all related with the skirmish with the railroad. I do think that it's awful coincidental that it comes just a couple of months after the spin didn't go Janus' way," says Benz. "Craig is saying that it didn't have anything to do with it, so I think it would be a mistake to suggest that it did -- because we don't really have any evidence." Dalbar President Louis Harvey adds: "It's ridiculous to say that the Stilwell association wasn't a contributing factor in Craig's decision. Stilwell represents a direction that he preferred not to go in. He has been a super success story at Janus." The coverage is also the only one to name Craig's wife: Rebeccah Craig. It also notes that she is "set to complete her doctorate in social work this fall." Smart Money weighs in with coverage from Dawn Smith. She calls the departure "another blow for Janus." Evoking a Ruthian image she calls Janus "the house that Craig built." She also writes that the structure of the spin-off "provoked bitter and vocal displeasure among the fund company's managers, who made it clear that it would have preferred go it alone." She adds that "Craig denied that the spinoff contributed to his move. "This is a personal decision at my age in life, driven by factors that have nothing to do with Stilwell," he said. Interestingly, Craig's wife is named as "Rebecca" in this article. She also states that Craig told reporters: "My role has been more of an enabler." Once again, Morningstar's Christine Benz is the independent expert of record. She points out that "Craig's news is not a positive sign for Janus fund shareholders" and that it "faces some steep challenges right now - chief among them managing its asset growth and competing in a market that is less friendly to its style. Printed from: MFWire.com/story.asp?s=25833 Copyright 2000, InvestmentWires, Inc. All Rights Reserved |
