Janus Capital Group, the money manager struggling to reverse almost two years of customer withdrawals, had two of its largest equity funds pulled from a Bank of America Merrill Lynch model portfolio, according to two people familiar with the decision.
The $9.24 billion Janus Twenty Fund and $6.29 billion Janus Forty Fund were dropped last month from a standard collection of funds by Merrill Lynch, the second-largest U.S. brokerage by head count, the sources said, asking not to be identified because they weren’t authorized to release the information.
“Outflows are clearly getting worse,” said Michael Kim, an analyst with Sandler O’Neill & Partners in New York. “These brokerage platforms hold a lot of sway, in terms of overall flows, particularly for a retail-oriented franchise like Janus.”
Chief executive Richard Weil, hired from Pacific Investment Management in February 2010, has expanded the product line of Denver-based Janus, adding fixed-income funds and announcing this month the acquisition of a hedge fund and a plan to introduce more alternative-investment products. That hasn’t stopped defections by investors, who withdrew a net $18.5 billion over the past seven quarters.
Janus mutual funds lost $770 million in redemptions in April, more than triple the $230 million in March, according to research firm Morningstar Inc. Janus Twenty and Janus Forty together lost an estimated $586 million in April, and the 10 largest Janus-branded equity funds lost a combined $1.06 billion, according to data compiled by Bloomberg.
