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Friday, September 27, 2002|
American Skandia Dumps Janus
American Skandia is pulling some $2.5 billion of sub-advisory mandates from Janus Capital and handing the bulk to Goldman Sachs. Those assets generate an estimated $10 million in annual fees. The Shelton, Connecticut-based insurer's decision was reported this morning in the Wall Street Journal. The paper cited poor investment returns as the reason for the decision.
Goldman Sachs will take over roughly $2 billion of the domestic assets and William Blair & Co. will pick up $250 million of international assets. The mandates cover both mutual funds and variable annuities.
The paper quotes Michael Murray, chairman of American Skandia's investment committee, as saying the decision was purely about performance. He added, according to the paper, that "Janus believes it has improved its strategy. We believe otherwise."
Janus' last day in control is reportedly November 11. The report did not identify which asset managers were selected to take over the mandates. American Skandia informed Janus of the decision two weeks ago, the paper reports.
This is the second time that American Skandia has pulled mandates from the Denver-based fund firm. The last time was in July 2001, when it pulled a mandate for small-cap equities. At the peak of the market, Janus had sub-advised on some $12 billion of assets for the insurer.
In a statement, Janus said, "It's hard to believe that this decision isn't being made -- in part -- by [American Skandia's] recent financial difficulties."
The paper counters that American Skandia's Murray had difficulties managing the Janus relationship. The fund firm had declined to reopen the American Skandia Janus Overseas Fund, for example. He was also critical of the style drift in the Janus Capital Growth portfolio.
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