ASX300 Janus Henderson (ASX:JHG) Share Price Up ~6% Today, What was the Kicker?

Summary

  • Investment management company Trian Fund Management has acquired a 9.9% stake in two asset managers – UK-headquartered Janus Henderson and US-based Invesco.
  • On 9 October 2020, Janus Henderson share price moved up by 5.941% to reach A$37.270. On the New York Stock Exchange, the shares of the Company ended 7.55% higher on 8 October, at US$26.93.
  • Janus Henderson will announce its results for third quarter 2020 on 29 October 2020.

The share price of ASX 300 global active asset manager Janus Henderson Group Plc (ASX:JHG, NYSE:JHG) stood at A$37.270, moving up by 5.941% on 9 October 2020. The 52-weeks high price and low price of JHG were A$41.320 and A$20.68, respectively.

Janus Henderson’s stock jumped by 7.55% to close the market at US$26.93 on 8 October 2020 on the New York Stock Exchange.

The positive movement in the share price was seen after Trian Fund Management disclosed that it held almost 10% stakes in both Invesco and Janus Henderson.

Let us look at the London-based Janus Henderson Group and the stake sale to Trian-

About Janus Henderson Group Plc

Leading active asset manager Janus Henderson Group Plc is dedicated to helping investors attain their long-term financial targets via a comprehensive range of investment solutions. The investment solutions include fixed income, multi-asset, equities, quantitative equities, along with alternative asset class strategies. The Company is headquartered in London and listed on both the Australian Stock Exchange and New York Stock Exchange.

As of 30 June 2020, JHG had ~US$337 billion in assets under management (AUM), over 2k people, and has its offices in twenty-seven cities across the world.

Trian Fund Management takes almost 10% stakes in Janus Henderson, Invesco

New York-headquartered, American investment management firm Trian Fund Management has bought 9.9% stake in two asset managers - Janus Henderson and Invesco. The announcement might inspire the management and boards of the two companies to explore strategic mergers and acquisitions deals.

The asset management sector has evolved following several consolidations as market participants look to park their capital into relatively inexpensive index funds instead of higher-priced actively managed portfolios.

Trian Fund Management stated that it obtained the stakes as the executives believe that these securities are undervalued and represent an appealing investment opportunity.

The stakes were disclosed in separate SEC filings on 2 October 2020 and reported by Peter W. May, president and founding partner; Nelson Peltz, CEO and founding partner; and Edward P. Garden, CIO and founding partner.

One Spokesman of Janus Henderson stated that the Company often engages as well as considers the input from its stockholders.

In the SEC filings, it was disclosed that Trian aims to engage in discussions with the boards and/or management of Companies concerning the several strategic initiatives as well as operational initiatives that can generate value as per the Trian Fund Management. These strategic and operational initiatives might comprise suggestions relating to organizational structure, technology, dividend policies, along with corporate governance.

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Janus Henderson to Report 3Q20 Results

On 2 October 2020, the Company disclosed that it would announce the results of 3rd quarter 2020 on 29 October 2020.

Highlights from Janus Henderson’s Second Quarter 2020 Results

On 29 July 2020, the Company published its 2nd quarter results for the 3-months ended 30 June 2020. The highlights include:

  • Revenue for the second quarter of 2020 was reported at almost US$518.0 million, a decrease of US$17.9 million, or 3%, compared to the prior corresponding period. The decline in revenue was due to a drop of US$38.7 million in management fees.
  • During the period, Janus Henderson acquired 1,061,633 shares of its common stock for US$22.0 million.
  • JHG’s assets under management (AUM) were down to US$336.7 billion, a decline of 10%, from the year ended on 31 December 2019. The drop was because of the adverse market conditions, net outflows as well as unfavourable foreign currency translation.
  • On 28 July 2020, the Company Board declared A$0.36 per-share dividend for the 2nd quarter of 2020.
  • Janus Henderson stated that during the quarter, long-term investment performance remained strong, with 62% and 68% of the Company’s AUM outperforming relevant benchmarks based on of three & five years, respectively, as on 30 June 2020.
  • During the second quarter, the operating income was reported at US$106.7 million, declining by 10% as compared to the pcp.
  • The Company reported total operating expenses of almost US$411.3 million during the second quarter of 2020, down by 1% as compared to the operating expenses on pcp.
    • The decrease in operating expenses was primarily driven by a decline of US$9.7 million and US$4.4 million in general, administrative &occupancy expenses and the marketing expenses, respectively.

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