Mark Whiston is still shaking his head over the excesses of the late bull market -- and he doesn’t exempt his own firm. “The frenzy took us in a direction we wish now we hadn’t gone in,” says the newly crowned head of Janus Capital, who will succeed founder Tom Bailey.
“The people at this firm had always been proud of our relative long-term numbers -- the ten-year picture -- and then we got into this high-octane environment,” says Whiston, 41. “Literally, we were closing funds, as many as we could, but we couldn’t turn the spigot off fast enough.”
The Denver-based fund giant -- a highflier during the late ‘90s growth stock craze -- has suffered mightily in the downturn: Assets have dwindled from $370 billion in 2000 to a recent $135 billion. For CEO Whiston, it’s vital to reestablish his firm’s credibility, further bruised by high-profile losses in companies like Enron.
“The theme now is, how can we create a much greater level of accountability? We fully intend to follow through on that,” he says. Janus has hired more analysts, expanded coverage and implemented more rigorous risk assessment for investments.
Whiston, who had overseen sales and marketing and is best known for leading Janus’s charge into the 401(k) market, also wants to broaden the firm’s distribution channels. Janus is expected to announce this month that it will introduce its first load fund. A more diverse product line, including fixed-income, quantitative and value funds, is also forthcoming. “We’re not abandoning the direct, no-load channel,” says Whiston. “The mission is to give the investor more choice.”
Janus insiders are said to be pleased with Whiston’s appointment; some had worried that a outsider would come in and take the firm in a dramatically different direction. And the selection may have influenced a former insider to return to the fold: Ex-CIO Jim Craig, who left Janus in 2001 amid poor markets and a damaging management struggle, will serve as an advisory board member.
