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Why Janus Henderson Group Blasted 16% Higher on Friday

By Eric Volkman – Oct 2, 2020 at 6:40PM

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An activist investor has activated interest in the company by buying a large stake.

What happened

Financial services company Janus Henderson Group (JHG 1.48%) experienced a sudden jolt of interest from investors on Friday.

On news that investment boutique Trian Fund Management -- headed by a high-profile shareholder activist, Nelson Peltz -- had taken a nearly 10% stake in the company, its shares rocketed to close nearly 16% higher on the day.

A stock market trading graph.

Image source: Getty Images.

So what

Trian has ambitions to consolidate certain companies in the financial services realm; it also took out a just-under 10% stake in a Janus Henderson peer, Invesco (IVZ 1.80%). In an article published on Friday in The Wall Street Journal, "people familiar with the matter," said the goal is to merge the two businesses and consolidate them.

Both companies, which specialize in asset management, have struggled with growth lately. Instruments such as index funds, which are basically passive vehicles that track the movement of, yes, indexes, have become more popular with investors -- to the detriment of actively managed funds and their operators.

In its most recently reported quarter, Janus Henderson's non-GAAP (adjusted) revenue was basically flat on a year-over-year basis, while attributable net profit inched up by 4%.

Now what

It's an exciting possibility for Janus Henderson investors (and those of Invesco too, while we're at it) that the determined and frequently successful Trian now has an anchor stake in it. But the trend isn't a friend for either company; it'll take more than a bit of sector consolidation to bring investors back to traditional managed funds.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Janus Henderson Group PLC Stock Quote
Janus Henderson Group PLC
JHG
$25.66 (1.48%) $0.38
Invesco Stock Quote
Invesco
IVZ
$19.45 (1.80%) $0.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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