BREAKINGVIEWS-Janus Henderson interloper ramps up fund austerity

By Jonathan Guilford

NEW YORK, Feb 26 (Reuters Breakingviews) - In Roman mythology, Janus is the god of new beginnings. In a takeover battle that kicked off on Thursday, the asset manager that shares his name faces a severe reset. Victory Capital VCTR.O unveiled a cash-and-stock offer for Janus Henderson JHG.N, gatecrashing an agreed sale to investor Trian Fund Management. The bid, worth roughly $9 billion, is clearly superior, so long as shareholders are willing to take steep proposed cost cuts at face value.

After a long entanglement with Trian boss Nelson Peltz, Janus late last year agreed to sell itself to the pushy investor and partner General Catalyst. It accepted the pair's $49-a-share all-cash offer despite a higher price dangled by a company it simply referred to as "Party A" in regulatory filings. At the time, Janus management dismissed the counterbid for two reasons. First, Peltz controls nearly 21% of the vote, close to the one-third level required to block a sale. Second, the mysterious suitor emphasized “significant cost synergies” that could “precipitate key person attrition” and “client concerns.”

It is now clear that this unnamed predator was Victory, an up-and-coming asset manager which has grown through dealmaking. Its proposed annual savings of $500 million are indeed hefty, equating to roughly a quarter of Janus’s total operating expenses last year. Still, its now-upped offer of $57.04 per share, using Victory's closing stock price on Wednesday, would leave selling shareholders with 38% of the combined company. Taxed at the standard U.S. corporate rate and capitalized, those synergies are worth a colossal $9.74 per share.

If investors trust in Victory, this is not a particularly close call. Janus shares jumped to $53 on Thursday morning, well above Trian’s proposal and just 3% behind the implied value on offer from Victory, whose own stock dropped by around 8%.

But the plan really does involve a lot of cost-cutting. If Janus had last year achieved the same 48% operating margin that its would-be suitor delivered in 2024, its operating income would have been about $500 million higher. Trouble is, Victory’s own margin narrowed to 37% in 2025, suggesting such gains may not last.

Itself the product of a 2017 merger, Janus understands the challenges of combining fund managers. Victory is also the smaller company in terms of client funds, with $320 billion under management versus Janus’s $493 billion. Nonetheless, it has swallowed big game before, agreeing to take over Amundi’s U.S. arm and its $104 billion in assets in 2024. Over the last five years, its stock has significantly outperformed that of its quarry. To continue that run, Victory will need another round of fund austerity.

Follow Jonathan Guilford on X and LinkedIn.

CONTEXT NEWS

Asset manager Victory Capital on February 26 said that it had submitted a letter to a special committee of the board of Janus Henderson, proposing to acquire its rival at a price of $57.04 in cash and stock.

Janus in December agreed to sell to investor Trian Fund Management and General Catalyst in a deal worth $49 per share, valuing the company at $7.4 billion, excluding debt. Trian holds a nearly 21% stake in Janus.

PJT Partners is serving as financial advisor to Victory Capital. Goldman Sachs is advising Janus Henderson’s special committee, while Jefferies and Citigroup are providing advice to Trian and General Catalyst.

Janus shares rose 5.5% to $52.88 by 1630 GMT on February 26. Victory shares were down 8% at $71.08.