The Gaze of a Parent Shifts
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Wednesday, May 29, 2002

The Gaze of a Parent Shifts

Berger has long been ignored in favor of its sibling by its corporate parent Stilwell Financial as that firm and the world at large focused on the more glamorous goings on at Janus Capital. That is changing, though, now that Janus has stumbled after reaching maturity, reports Dow Jones.

The report notes the recent help Stilwell lent Berger in allowing it to make a number of strategic purchases, including Enhanced Investment Technologies Inc. (Intech) and Bay Isle Financial. It also notices the consolidation of Berger's growth fund offerings and its successful creation of a portfolio of value funds. Janus' own launch of value funds has not gone as smoothly as that firm is more closely identified with concentrated growth investing.

Yet despite a quadrupling of its asset base to $16 billion from $3.5 billion since 1999, Berger still is not large enough to make a meaningful contribution to Stilwell's success. Janus currently manages ten times as much ($189 billion).

The article also notes that Stilwell may not be able to make new acquisitions to help Berger grow without jeopardizing its credit ratings. Standard & Poor's recently downgraded its outlook on the firm's debt to negative from stable, the article concludes.

Other industry insiders also point out that the problems at Janus may have been overblown by the media. One consultant that the spoke with at the recent ICI General Membership meeting noted that the atmosphere in Janus' offices are far calmer than one would expect based on media reports. He also pointed out that even before the tech wreck the majority of new sales of Janus' funds had shifted from the direct channel to the intermediary channel.

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