Janus Capital Group Inc. and its subsidiaries (collectively, "JCG" or the "Company") provide investment management, administration, distribution and related services to individual and institutional investors through mutual funds, separate accounts and subadvised relationships (collectively referred to as "investment products") in both domestic and international markets. Over the last several years, JCG has expanded its business to become a more diversified manager with increased investment product offerings and distribution capabilities. JCG provides investment advisory services through its primary subsidiaries, Janus Capital Management LLC ("Janus"), INTECH Investment Management LLC ("INTECH") and Perkins Investment Management LLC ("Perkins"). Each of JCG's three primary subsidiaries specializes in specific investment styles and disciplines. JCG's investment products are distributed through three channels: retail intermediary, institutional and international. Each distribution channel focuses on specific investor groups and the unique requirements of each group. As of December 31, 2009, JCG managed $159.7 billion of assets under management.
Revenues are generally based upon a percentage of the market value of assets under management and are calculated as a percentage of the daily average asset balance in accordance with contractual agreements with the Company's investment products or clients. Certain investment products are also subject to performance fees which vary based on a product's relative performance as compared to a benchmark index and the level of assets subject to such fees. Assets under management primarily consist of domestic and international equity and debt securities. Accordingly, fluctuations in domestic and international financial markets, relative investment performance, sales and redemptions of investment products, and changes in the composition of assets under management are all factors that have a direct effect on JCG's operating results.
Subsidiaries
Janus
Janus considers itself a leader in equity investing, beginning with the launch of the Janus Fund approximately 40 years ago. Janus offers growth equity, core and international equity, as well as balanced, fixed income, alternative and retail money market investment products. Janus' investment teams are led by its co-Chief Investment Officers, who are charged with driving investment performance across all disciplines while maintaining a structured investment process. Janus' investment teams seek to identify strong businesses with sustainable competitive advantages or improving returns on capital that sell at a discount to what the teams believe they are worth. Janus believes its depth of research, experienced portfolio managers and analysts, willingness to make concentrated investments when Janus believes it has a research edge, and commitment to delivering strong long-term results for its investors are what differentiate Janus from its competitors. At December 31, 2009, Janus managed $95.1 billion of long-term assets and $1.7 billion of money market assets, or 60% of total Company assets under management.
Janus-managed equity mutual funds outperformed the majority of peers with 89%, 94% and 88% of equity mutual funds ranking in the top half of their Lipper categories on a one-, three-and five-year total return basis, respectively, as of December 31, 2009. Additionally, 25%, 100% and 100% of Janus-managed fixed income funds ranked in the top half of their Lipper categories on a one-, three- and five-year total return basis, respectively, as of December 31, 2009.
INTECH
INTECH has managed institutional portfolios since 1987, establishing one of the industry's longest continuous performance records of mathematical equity investment strategies. INTECH's unique investment process is based on a mathematical theorem that seeks to add value for clients by capitalizing on the volatility in stock price movements. INTECH's goal is to achieve long-term returns that outperform a specified benchmark index while controlling risks and trading costs. At December 31, 2009, INTECH managed $48.0 billion, or 30% of total Company assets under management.
INTECH's relative performance was weak in the short- and intermediate- term, with 0%, 50% and 67% of strategies surpassing their respective benchmarks, net of fees, over the one-, three- and five-year periods ended December 31, 2009. However, from their respective inception dates through December 31, 2009, 83% of INTECH's primary investment strategies have outperformed their respective benchmarks, on a net of fees and on a gross fees basis.
Perkins
Perkins has managed value-disciplined investment products since 1980. With its industry experience, fundamental research and careful consideration for risk, Perkins has established a reputation as a respected value manager. Perkins offers value-disciplined investment products, including small, mid and large cap value investment products. On December 31, 2008, JCG purchased an additional 50% ownership stake in Perkins for $90.0 million. At December 31, 2009, Perkins' assets under management totaled $14.9 billion, or 10% of total Company assets under management.
Perkins delivered strong long-term investment performance, with 75%, 100% and 100% of mutual funds ranking in the top half of their Lipper categories on a one-, three- and five-year total return basis, respectively, as of December 31, 2009.
Distribution Channels
Retail Intermediary Channel
The retail intermediary channel serves financial intermediaries and retirement plans, which includes asset managers, banks and trusts, broker-dealers, independent planners, third-party administrators and insurance companies. In addition, this channel serves existing individual investors who access JCG's investment products directly. Effective July 6, 2009, JCG merged two of its domestic mutual fund trusts, Janus Investment Fund ("JIF") and Janus Advisor Series ("JAD") into a single trust. The merger was designed to simplify JCG's product offerings and provide mutual fund investors with access to a broader range of Janus investment strategies. Subsequent to the merger, new investors are not able to access JCG's investment products directly.
Assets in the advisory subchannel, a component of the retail intermediary channel, have more than tripled since 2004 and totaled $24.5 billion at December 31, 2009. Significant investments have been made in strengthening the Company's presence in the advisor subchannel over the last several years, doubling the number of external and internal wholesalers and building out robust home office coverage, including a dedicated analyst relations team. Overall assets in the retail intermediary channel totaled $104.6 billion, or 65% of total Company assets under management, at December 31, 2009.
Institutional Channel
The institutional channel serves corporations, endowments, foundations, Taft-Hartley and public fund clients and focuses on distribution direct to the plan sponsor and through consulting relationships. Investors in the institutional channel often rely on advice from third-party consultants. Accordingly, JCG has assembled a Consultant Relations team dedicated to providing information and services to third-party institutional consultants. Although the current asset base in this channel is weighted heavily toward INTECH's mathematical products, the Company is seeking increased penetration of Janus and Perkins products. Assets in the institutional channel totaled $42.8 billion, or 27% of total Company assets under management, at December 31, 2009.
International Channel
The international channel serves professional investors outside of the United States, including central and local government pension plans, corporate pension plans, multi-managers, insurance companies and private banks. International products are offered through separate accounts, subadvisory relationships and Janus Capital Funds Plc, a Dublin-domiciled trust. Assets in the international channel totaled $12.3 billion, or 8% of total Company assets under management, at December 31, 2009.
EMPLOYEES
As of December 31, 2009, JCG had 1,126 full-time employees. None of these employees is represented by a labor union.