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Janus Loses Its Head

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By Rick Aristotle Munarriz (TMF Edible)
June 12, 2002

When Tom Bailey set out to start a mutual fund company in 1969, Janus seemed like a fitting name. As the mythological two-faced Roman god, with one side always looking forward while the other had little choice but to look back, it was the ideal moniker. Investing is all about heading into the future without losing track of lessons learned in the past. But Bailey didn't have to look back much. Despite the market doldrums in the early 1970s and the market crash of 1987, the no-load fund company's aggressive growth ways served it well as assets soared in the 1990s.

While the company has given a leg up to mutual fund managing icons like James Craig, Helen Young Hayes, and Tom Marsico, it's under these trying times of market disinterest in which Bailey has chosen to step down as President and CEO. His tenure will come to a close at month's end.

The industry's uncertainty has also had a toll on Janus parent Stilwell Financial (NYSE: SV). The company was spun-off by railway specialist Kansas City Southern (NYSE: KSU) two years ago. The railroad company figured it would get more mileage out of its prized financial services holdings if it traded independently.

The timing couldn't have been much worse with growth stock mutual funds peaking. Beyond Janus Capital, Stilwell also owns a good chunk of Berger Funds, Nelson Money Managers and leading mutual fund information processor DST Systems (NYSE: DST). With fund redemptions and sluggish markets Stilwell has been derailed -- its stock losing more than half its value since the spin-off.    

Bailey has seen market lulls before. Like its Janus namesake, the company can look back as it's sure that Bailey will in his final days at the helm. Then, of course, it will be time to look forward. Again.

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