Janus Henderson commits to London after Weil wins power battle – Financial Times

Andrew Formica, left, and Dick Weil © FT Graphic

August 5, 2018
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Janus Henderson has shot down speculation that it will switch its headquarters from London to Denver after the dual-listed US-Australian asset manager last week picked American Dick Weil as its sole chief executive.

The group delisted from the London market last year after Henderson, which at the time was listed on the FTSE 250 and Australian Stock Exchange, completed its all-stock takeover of Janus Capital, based in Denver.

At a board meeting in Denver on Wednesday, the group abandoned its controversial co-chief executive structure, with Andrew Formica, the former Henderson chief, losing a brutal power battle against Mr Weil, who joined Janus from Pimco in 2010. The executives worked in adjoining offices while jockeying for the top job.

“The company’s HQ will remain London, with continuing strong presences in both London and Denver,” Janus Henderson said in a statement to FTfm.

An industry veteran who knows both men said that when the takeover was struck in 2016 Janus had hoped to return to its former glory.

“Back then, Janus was seen as playing second fiddle. The deal has helped in this respect. But it has yet to prove transformational for shareholders, as originally envisaged. That’s why the board wanted to simplify the decision structure.”

He said: “The centre of gravity will now shift to Denver with Dick Weil as sole CEO.”

Mr Weil moved to London with his family a year ago. He is not thought to have bought a home in the UK capital but he retains a home in Denver. During meetings with staff this week, Mr Weil reiterated his commitment to London.

His ascent comes at a difficult time for the group, which has suffered investor outflows in nine of the past 10 quarters.

Analysts at JPMorgan said there was “a risk that managers loyal to Formica will leave over the next 6-12 months, a possible exodus of talent issue for JHG”.

Janus Henderson this week announced that Phil Wagstaff, global head of distribution and a legacy Henderson executive, would leave the company.

Goldman Sachs said “the combination of these departures will add further uncertainty to JHG’s already-challenged organic growth picture”.

Dai-ichi Life, the Japanese insurer, was Janus’s biggest shareholder and owns more than 15 per cent of the enlarged group. It also has a board seat. The rest of the shareholder base is split between investors in the US and the rest of the world, although there are few UK investors with large holdings.

Speculation had grown this year that the co-CEO structure would end given the speed of the integration of the two companies and concern over having two heads — something that both admitted was a “situational event” that would not be long-lasting. 

Mr Weil said he was “excited about our future” despite “constant grinding pressure” on the business and outflows.

The departure of Mr Formica, initially seen as the frontrunner to run the combined group alone, will intensify speculation over the similar co-CEO structure at Standard Life Aberdeen, where Martin Gilbert and Keith Skeoch have shared the reins since the merger last year. 

Mr Formica resigned his co-CEO role and board seat this week but will continue as an adviser until the end of 2018. He will receive severance of $12m.

“Henderson will retain its identity while it remains a big profit centre,” the industry veteran added. “The next two years will be critical when the board expects some tangible results.”

Jennifer Ockwell, head of UK institutional at Franklin Templeton Investments, who spent close to 16 years working at Janus Henderson and its Australian forerunner, said Mr Formica and Mr Wagstaff had been phenomenal leaders.

In a LinkedIn post, she said: “It is not just a loss for JHI but a loss to our industry.”