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THE NEW LOOK OF JANUS
The freshly minted CEO of Janus Capital takes charge of a fund company with a battered brand, massive outflows and agitated shareholders. Can he return it to its former glory?
The freshly minted CEO of Janus Capital takes charge of a fund company with a battered brand, massive outflows and agitated shareholders. Can he return it to its former glory?
By Rich Blake
February 2003
Institutional Investor Magazine
I'm either coming home today with the biggest job of my life or I'm going to be out of work," Mark Whiston told his wife as he kissed her goodbye and left his suburban Denver home on a warm day last August.
Less than an hour later, the 41-year-old head of sales at Janus Capital Management was standing in a small conference room at the company's headquarters, calmly and deliberately outlining his plan to salvage one of the most powerful brands in finance -- and the company built around it. In essence, his 30-minute presentation to the six directors of Janus's parent, Stilwell Financial, was an audition to succeed the legendary founder of the mutual fund company, Thomas Bailey, as CEO.
One director, Stilwell CEO Landon Rowland, had long admired the ace Janus marketer and feuded with the eccentric Bailey. He watched intently. Janus must achieve much stronger portfolio performance in a vastly changed market and stress value as well as growth funds, Whiston asserted. Moreover, it must better exploit underutilized distribution channels, like brokers and financial planners.
Then he got into a sensitive business issue: The board needed to eliminate the Stilwell holding company altogether and move Stilwell's other divisions, such as Berger Financial Group, into the Janus fold to give the Denver fund company greater operating autonomy and a broader product lineup, so that it could truly recover. Such moves would have cost Rowland, 65, his job.
Yet two weeks later the directors -- including Rowland -- unanimously endorsed Whiston's strategy and named him CEO-elect. The CEO title became official on January 1 this year.
Whiston may wish at times that he could give it back.
Make no mistake about it: Janus is a company under siege. Few other major money management firms, or financial services outfits for that matter, find themselves in such difficult straits. In just 35 months Janus's assets have plunged almost 60 percent; revenues are down nearly 56 percent. The firm's basic identity -- as an aggressive-growth mutual fund company specializing in technology and telecommunications stocks -- has become a liability.
Of course, many firms are struggling with the fallout from the stock market bubble. Merrill Lynch & Co. laid off more than a quarter of its workforce. Citigroup's investment banking unit is feeling the wrath of regulators and defending itself against class-action lawsuits. J.P. Morgan Chase & Co. is straining under stacks of bad loans. And the disappearance of online trading has devastated Charles Schwab Corp.
Still, it's hard to think of another firm that has had to cope with such a sheer loss of face. Janus symbolized all the giddiness of the bull market: It was the 1990s' bubble. The firm's assets soared from $46 billion in 1996 to $330 billion in March 2000, at the market peak.
But because of its concentrated and outsize bet on tech and telecom companies -- Janus was among the biggest holders in Amazon.com, AOL Time Warner and Cisco Systems -- its performance collapsed along with the bubble. The flagship Janus Fund lost an average of 23 percent annually in the three years ended December 31, 2002, for a cumulative loss of 54.5 percent. Investors fled Janus en masse: Since January 2001 the firm has suffered a drastic $26.1 billion in net redemptions, according to Financial Research Corp.
Janus's assets have now tumbled all the way to $138 billion. Revenues have dropped from $2.2 billion in 2000 to $1.1 billion last year. Earnings for 2002 -- $244 million -- are roughly one third of 2000's $664 million. Janus's stock, which hit 54 in September 2000, traded in early February at 13.
"The name that was once associated with huge bull market gains is now closely associated with steep bear market losses," says Morningstar senior analyst Brian Portnoy. "It's going to take time to repair the damage."
Affable as any good fund salesman but with a steely resolve, Whiston knows he must reinvent Janus. For a start, the new CEO must get portfolio managers to pick good stocks in a very different, and very difficult, environment. "Improving performance is our No. 1 priority," he declares. "We have to deliver on this."
Already Whiston has drastically restructured Janus's basic investment process. Analysts are more accountable to portfolio managers, and portfolio managers -- long used to running their own show -- operate under tighter risk controls. Each portfolio is now reviewed by chief of investments Helen Young Hayes and research chief James Goff at least once a quarter; previously, portfolios were not formally reviewed at all. "One way to repair the brand is to increase the accountability of portfolio managers, individually and collectively," contends Whiston.
He also wants to market a greater variety of products to a wider range of investors. Known from its opening day in 1969 for emphasizing aggressive-growth stocks, the new Janus is also selling value funds and quantitative portfolios. The firm made its name selling straight to small investors, and when the bubble burst, fully one third of Janus's sales were still tied to individuals, leaving it vulnerable to mass panic. Whiston intends to sell increasingly through intermediaries. And to entice brokers, in particular, Janus has introduced funds that carry traditional 1 percent or 2 percent retail loads.
"Mark Whiston is saying all the right things," allows William Jacobs, an analyst at Harris Associates, which owns a 4.8 percent stake in Janus. "The question is, Can he deliver?"
Wisely, Whiston has moved to plug a power vacuum caused by years of bitter corporate wrangling between Janus and Stilwell. Until last month Janus was simply a subsidiary of Stilwell, the financial services holding company spun out of conglomerate Kansas City Southern Industries in July 2000. Now Stilwell is gone, its former subsidiaries absorbed into Janus.
Rowland, a former corporate litigator who became CEO of KCSI in 1987 and then also of Stilwell 13 years later, clashed with the mercurial Bailey. In the late 1990s Rowland urged the Janus CEO to hedge the fund company's bets by lessening its near-total dependence on growth stocks. Bailey refused to budge.
"Tom Bailey, for whatever reason, was not as flexible as Whiston in thinking about where the modern mutual fund company of Janus's quality is going to have to be," says Rowland, who remains chairman of the Janus board.
Bailey, however, retired in July 2002, at 65, after selling off his remaining 12.4 percent stake in Janus to Stilwell in two installments, for a total of $1.2 billion. Though not unexpected, the departure of the firm's founder -- in the depths of a bear market, with fund redemptions running rampant -- left many at Janus wondering who could lead it out of the wilderness.
"Bailey's decision to step down was monumental," Whiston says. "For Janus it was a watershed event. We needed to determine what the future of the firm would be."
Two months after Bailey announced his retirement, Whiston was named CEO-elect. One of his first moves was an instant morale booster. He persuaded James Craig, Janus's former chief investment officer and the backbone of the firm for two decades, to come out of retirement to serve as a member of the board.
At the same time, Whiston unveiled his scheme to scuttle the Stilwell-Janus corporate structure. First, he would eliminate the holding company and move into the Janus fold two Stilwell divisions -- the Berger mutual funds, with $14.3 billion in assets, and Nelson Money Managers, a London-based high-net-worth manager with $1.5 billion in assets. Janus would sell off its one-third stake in mutual fund recordkeeper DST Systems, valued at $1.28 billion.
But Whiston, an ice hockey goalie in college, soon found he had to play defense as well as offense. No sooner had he snared the top job than he faced an aggressive challenge from a powerful shareholder, Highfields Capital Management, the hedge fund bankrolled by his alma mater, Harvard University. Highfields began to amass its 9.8 percent stake last September, when Janus was still part of Stilwell.
Highfields set out to derail Whiston's reorganization plan, insisting that the best way to maximize shareholder value at Janus was simply to sell the firm. In early December the hedge fund disclosed that it had hired LBO specialist Blackstone Group to "explore alternatives to enhance the value of the shares."
Undaunted, Whiston moved ahead with his revamping, shedding 140 jobs from a payroll of 1,250 and chipping away at administrative costs. Janus expects to shave $40 million a year off its annual budget of $800 million.
But the new CEO faces pressure from Highfields to make much deeper cuts. Specifically, the hedge fund is prodding Whiston to reduce the compensation of Janus investment professionals and fire its worst performers. Janus portfolio managers have historically been among the best paid in the industry, with some said to have earned as much as $10 million when the bull market was raging. Last month Whiston revealed that in the fourth quarter he had cut the compensation budget companywide by 23 percent, or about $13 million (and this is not counting the layoffs), but he offered no specifics about portfolio manager pay packages.
It may be small consolation to Whiston, but demands from Highfields would have been inconceivable during that golden first quarter of 2000. In those three months Janus stock funds attracted an astonishing $28 billion, or nearly two thirds of the equity assets garnered by the entire mutual fund industry.
But Janus's success was setting it up for a fall. As the bull market roared, the firm's stock pickers made aggressive, highly concentrated bets, loading up their separate portfolios with many of the same sizzling tech stocks. By early 2000 Janus was one of the top three shareholders in Cisco and Yahoo! That year no fewer than ten Janus funds counted Nokia Corp. among their top ten holdings.
Like its portfolios, Janus the business was also overconcentrated. Although other big fund families offered a broad range of investment products, including value equity, international equity and fixed income, roughly 80 percent of Janus's assets were in stock funds, and virtually all of those funds relentlessly pursued growth or aggressive-growth strategies. Today some 67 percent of Janus's equity assets remain in growth.
To be sure, Janus is hardly alone in its misery among growth-oriented fund families. MFS Investment Management, Nicholas-Applegate Capital Management, Putnam Investments and J. & W. Seligman & Co. are all trying to find their bearings in the face of dramatic stock fund outflows. According to the Investment Company Institute, 2002 outflows for equity funds came to $27 billion, on a percentage basis the worst showing since 1988. Meanwhile, well-diversified firms like American Funds and T. Rowe Price Associates that badly lagged Janus in the late '90s now boast solid three- and five-year track records and are attracting a growing share of the little cash going into stock funds.
Still, Janus has suffered far more than most growth managers as its top funds have repeatedly underperformed their peers. Only one of the five biggest Janus funds, the $5.3 billion Janus Growth & Income Fund, is in the top quartile of its peer group for the three years ended December 31, according to Morningstar. Three of the big funds -- Janus Mercury Fund, Janus Twenty Fund and Janus Worldwide Fund -- rank in the bottom quartile. The Janus Fund has trailed the Standard & Poor's 500 index over the past three years by 8.5 percentage points a year on average, earning it a ranking in the bottom 38th percentile of growth funds. "It's not a pretty picture," observes Morningstar's Portnoy.
And it's not just mom and pop who have become disenchanted. Janus's traditional institutional business (18 percent of its total assets, versus 82 percent for retail) is ailing. The firm has lost major subadvisory mandates. Between January 2001 and November 2002, insurer American Skandia Life Assurance Corp. pulled $5.4 billion out of Janus. In November it yanked its last mandate, a $1.6 billion account, a subadvised large-cap growth portfolio.
"Janus had consistent performance issues we felt had gone unaddressed," says Michael Murray, chairman of the investment committee at American Skandia. "Believe me, we would have rather not had to make a change, but the sub-par performance just went on too long."
To prevent more defections, Whiston crafted a performance-focused turnaround strategy that relies -- bravely -- on his two top deputies, chief of investments Hayes and research chief Goff. These two veteran Janus executives, after all, helped to get the firm into its current jam.
Nevertheless, they have begun to transform the investment process. Janus has more than doubled its analyst ranks, to 45; the expanded staff covers 1,000 companies instead of 650. Whiston, Hayes and Goff are now overhauling the firm's signature research operation. In the past analysts worked as generalists, supporting different portfolio managers at different times. Now they are grouped into eight industry teams, with each analyst covering a particular industry and reporting to specific fund managers.
"This has been extremely helpful because it has allowed us to dig deeper into a number of companies and also helped with the communication between analysts and portfolio managers," Whiston says.
Portfolio managers, after years of calling their own shots, are more accountable to Janus senior management, Whiston says. Specifically, they must conform to stringent risk controls, buying only stocks that pass through proprietary systems for scrutinizing financial statements. "We're much more focused on risk management," Whiston says.
How is the new regime working out? The early results are somewhat encouraging. For 2002, 64 percent of Janus funds made it into the top half of their respective universes, although only 41 percent -- 18 out of 44 -- made it into the top quartile. Janus's nongrowth products, meanwhile, posted a net inflow of $6 billion, including $500 million in bond funds sold overseas.
Whiston, a firm believer in fund-family diversification, is pushing to roll out more value and fixed-income funds. The fact that growth funds are anathema in this market provides an extra incentive. He has rebranded Berger's value funds with the Janus logo, and just before Christmas he announced that Janus would acquire a 30 percent stake in Chicago-based Perkins, Wolf, McDonnell and Co. The small- and midcap value firm, which runs $5 billion, serves as the subadviser to three Berger value funds and has a solid performance record. Perkins Wolf's flagship midcap value fund posted a three-year average annualized return of 11.1 percent from 2000 through 2002, 6 percentage points better than the Russell midcap value index.
Last October Janus began selling traditional load funds, with up-front and back-end commissions. Although the firm has been using broker-sold and institutional platforms for its Advisor Series of funds since 1998, they carry only a 50 basis point 12b-1 fee to cover distribution expenses, not the 1 or 2 percent loads attached to most broker-sold funds.
But even with the lure of heftier fees, says veteran industry consultant Geoff Bobroff, "it'll be very difficult for Janus to convince brokers to sell their funds. They lost a lot of people a lot of money.
WHISTON'S TURNAROUND STRATEGY DEPENDS on whether Janus can deliver great performance again and whether investors will ever see the company as anything other than an aggressive-growth manager. Some would say it's a long shot, but then Whiston has overcome long odds before.
A native New Englander, he played a very determined second-string goalie on the Harvard hockey team. As a young marketer at Fidelity Investments in the 1980s, he helped the Boston mutual fund giant crack the market for colleges' and universities' defined contribution plans, giving TIAA-CREF its first real run for school money. Joining Janus in 1991 as the firm's first institutional salesman, Whiston helped shift distribution away from direct sales to brokers, financial advisers and other intermediaries.
The Janus CEO's laid-back demeanor belies a fiercely competitive spirit. "Quietly aggressive" is how Whiston is described by his old Crimson teammate Philip Falcone, who runs a high-yield bond fund in New York. "The wheels are always turning in there," says Falcone. "And despite all his success, he was never one to blow his own horn -- he has always let his actions speak for him."
Whiston grew up in Ipswich, Massachusetts, where his father was president of the local First National Bank. The future Janus CEO went to the prestigious Kent School in Connecticut, where he earned good grades and excelled at hockey. He made the Harvard team as a 5-foot-7, 150-pound freshman but blew out his knee in his junior year.
After graduating from Harvard in 1984 with a degree in economics, Whiston landed a job at Southeast Bank (now part of Wachovia Corp.) in Miami selling mutual funds. Moving back to New England and to Fidelity in 1988, he set to work peddling Peter Lynch's Magellan Fund to university retirement plans. "Mark was persistent," recalls Richard Malconian, the ex-CEO of Fidelity Investments Institutional Services. "He was constantly being told, 'We already use CREF,' but he never got discouraged."
Whiston applied to open a Los Angeles office for Fidelity to supervise all sales and marketing west of the Rockies. He stayed in LA for five years, helping to make Fidelity a dominant player in 401(k)s.
"Mark always seemed to be at the forefront of new opportunities. He could see them way ahead of everybody else," says Cory Griffin, a Harvard classmate who was recently named president of Boston Co. Asset Management.
Taught by talented Fidelity marketer Paul Hondros (now CEO of Gartmore Global Investments), Whiston learned to attack every available sales channel as relentlessly as opposing players used to attack him in the goal. He went after public and corporate pension funds, foundations, endowments and, most of all, the fast-growing market for 401(k)s.
On a business trip to Denver in 1989, Whiston was introduced by a mutual friend to Tom Marsico, the portfolio manager of Janus Twenty, which would become the firm's most famous aggressive-growth fund. Marsico in turn introduced Whiston to Bailey. Impressed, the Janus founder urged Marsico to do what he had to do to bring Whiston aboard.
It took a year and a half -- Whiston was perfectly happy at Fidelity -- but in July 1991 he signed on as a Janus marketer. The firm was already on a roll. Assets that year hit $8.5 billion, up from less than $1 billion at the start of 1989.
Soon after Whiston arrived Janus faced a critical marketing decision. Should the firm build a recordkeeping capability to enter the 401(k) market and compete with Fidelity, Vanguard Group and other big-name providers? Or should it find a way to partner with recordkeepers and focus exclusively on money management? Whiston understood from his days at Fidelity how cumbersome and costly recordkeeping could be, so he persuaded his new colleagues to stick to investment management. That proved a smart move.
Whiston immediately set out to build Janus's institutional business. His big break came in 1993 when Atlanta-based recordkeeper Hazlehurst & Associates created one of the first "platforms" of funds: These enabled fund companies like Janus to provide institutional investment management services without having to bother with keeping the records and doing the administration themselves. "This was our opportunity to enter the 401(k) field without the burden of recordkeeping," explains Whiston, who cultivated relationships with Hazlehurst and other firms that provided platforms.
Janus appeared on all the platforms, and its 401(k) assets jumped from virtually nothing in 1993 to upwards of $10 billion in 1997. At the end of 1999, the money manager registered $50 billion in 401(k) accounts.
Even as Whiston was making a name for himself at Janus as an astute marketer in the 1990s, he kept his distance from the bickering between Rowland and Bailey, two very strong -- and quite contrasting -- personalities. A straitlaced lawyer, Rowland was the antithesis of the free-spirited Bailey, who owned part of a bar in Vail and stayed away from the office for months at a time. The pair squabbled over many things, but one central strategic issue bitterly divided them: Rowland wanted Janus to diversify beyond growth funds, and Bailey adamantly opposed any tampering with Janus's franchise.
Their relationship dated back to April 1984, when Rowland, a Harvard Law School graduate who was then president of KCSI, negotiated its acquisition of Janus. The diversified railroad company paid $14 million for an 82 percent stake in the money manager. But as part of the deal, Rowland granted Bailey free rein to run Janus.
When Rowland moved up to CEO of KCSI in 1987, he preserved the hands-off policy, but he did begin a buildup of KCSI's money management operation, which was far more profitable than its aging railroads. KCSI added the Berger fund family in 1994; Rowland agreed to leave that money manager alone as well. As the 1990s progressed and Janus's assets swelled ever larger, the firm became increasingly important to KCSI's bottom line. By 1997 Janus accounted for more than 50 percent of its parent's profits.
That summer Rowland and Bailey had to confront a crisis. Star Janus portfolio manager Marsico purportedly attempted a coup of sorts. He approached the Janus board, and later Rowland, with a plan whose ultimate outcome was that Tom Marsico be named CEO. The Janus board and then the KCSI CEO turned him down flat. The portfolio manager promptly quit, setting up his own investment shop, Marsico Capital Management, which he sold in two pieces, in 1999 and 2000, to Bank of America Corp. for $1.1 billion.
In February 1998 Rowland decided to spin off KCSI's financial services group. The conglomerate had just taken on debt to acquire a 49 percent stake in Mexico's Transportación Ferroviaria Mexicana railroad, and Rowland wanted to split off the financial services operation so that it wouldn't get saddled with the debt.
But there was a hitch: If the action were deemed to be taxable, the sizable Internal Revenue Service hit would weaken the hived-off financial services firm. Rowland and his advisers determined that the IRS would declare the deal tax-free only if all of KCSI's financial holdings were spun off together. Letting Janus loose on its own -- which Bailey and most Janus employees would have vastly preferred -- would have nixed the tax exemption. Rowland's idea: Spin out Janus, Berger and DST in a publicly traded entity called Stilwell Financial (after Arthur Stilwell, founder of the Kansas City Southern railroad).
That's when the tension between Rowland and Bailey, and between KCSI and Janus, started to boil over. Bailey and other Janus executives were eager to liberate themselves from KCSI and run a public company, but they opposed linking up with the lesser-known Berger Funds in a holding company. Janus executives, who liked the idea of publicly traded stock to attract top talent, felt certain that Janus shares would be most valuable as a pure play: Their company should fly off on its own.
In March 1999 Bailey and Janus board member Thomas McDonnell, the CEO of DST, appeared before the KCSI board to plead the case for independence. Over ensuing months Janus portfolio managers waged a campaign that grew increasingly nasty -- and public. Several Janus executives were quoted threatening mass defections of portfolio managers if the Stilwell spin-off were allowed to proceed. Whiston prudently kept his own counsel.
On April 24, 2000, Rowland fired back at Bailey and his rebels. He filed an amendment to the KCSI annual financial documents asserting the company's legal right to fire Bailey. Janus staffers continued to hold out slim hope that the spin-off might be stopped, but it proceeded in July 2000. With Rowland as CEO, Kansas Citybased Stilwell began trading on the Big Board on July 12 under the symbol SV. The timing couldn't have been worse: The market, and SV shares, soon collapsed.
Janus suffered another blow right after the IPO. In August 2000 CIO Craig announced that he was retiring to set up a family foundation. He had cashed out his sizable ownership stake a few months before. (The following year he was diagnosed with lung cancer, which is now in remission.) Insiders say Craig's departure was a major loss. "He was a strong leader," says Whiston.
By the autumn of 2000, the Nasdaq Stock Market meltdown was hammering Janus's returns. The next year it suffered outflows of more than $6 billion. Year-end 2001 assets tumbled to $192 billion from $249 billion at the end of 2000.
No one was paying closer attention to Janus's financial results, for personal as well as professional reasons, than founder and CEO Bailey. In January 2001 -- when Fortune magazine published a widely read article that depicted Bailey's sybaritic lifestyle -- the Janus CEO faced a year-end deadline to cash in his shares on favorable terms: A look-back clause in his contract allowed him to sell his stock at 15 times Janus's earnings for the previous year. He decided to, in effect, hand Stilwell a bill for $1.2 billion, the value of his remaining shares -- based on the fortuitous look-back formula. Just to pay him off, the holding company had to take on $900 million in debt. Bailey insisted, as he cashed his check, that he intended to remain CEO.
But the copious payout only intensified tensions between Rowland and Bailey. In a March 2002 10K filing, Stilwell took the unusual step of describing "strained relations between Janus and Stilwell that . . . could result in the loss of key Janus employees and key Janus management." (In fact, Janus has suffered no major staff defections.) The filing also warned that "a formal succession plan in the event of a departure from Janus by Mr. Bailey has not yet been fully developed."
Three months later Bailey announced his resignation, effective July 1.
In the weeks after Bailey stepped down, as Janus senior executives hashed out succession scenarios, Whiston emerged as a front-runner to take over as CEO. A 15-year Janus veteran widely respected by the analysts and portfolio managers, chief of investments Hayes would have been a strong contender, but she made it clear that she preferred managing money to running a firm. Indeed, she proved to be a forceful advocate for Whiston, rallying the investment staff to him and lobbying Rowland.
In late June Rowland and Stilwell executive vice president Daniel Carpenter met with Janus's six-member management committee. Rowland asked each executive who would make the strongest internal candidate for CEO. "Mark's name kept coming up," reports Robin Beery, head of marketing and a committee member.
On July 3 Rowland flew back to Denver to meet with Whiston, whom he knew to be the first choice of the Janus team. Whiston emphasized that he -- unlike Bailey -- was eager to make Janus a more diversified money manager.
Then in early August last year, the entire six-member Stilwell board flew to Denver to meet with Whiston and Hayes, basically to determine Janus's future. Whiston pal Falcone, who'd had dinner with him the night before the meeting, was struck by his self-confidence. "Mark knew he was the right person for the job, and he knew he was up to it," Falcone says. "His big concern was whether he'd truly have 100 percent free rein from Stilwell to do what needed to be done."
Having proposed to eliminate the Stilwell holding company structure, and thus Rowland's job, and bring all Stilwell's money management divisions under Janus's roof, Whiston told the board that he had persuaded Craig to return as a Janus board member. Rowland, sold earlier on Whiston's plan, urged his fellow directors to sign on.
Later in the month, at a board meeting at Stilwell's headquarters in Kansas City, the directors crowned Whiston as Bailey's successor, effective January 1, 2003. Just after Labor Day Stilwell announced the news.
After so many years of bucking Bailey's efforts to get Janus spun off on its own, why did Rowland agree to that same arrangement when it was proposed by Whiston? Some Janus insiders suggest that once Bailey retired, Rowland could consider the issue of Janus's independence dispassionately.
Says Rowland, "Once Bailey had gone, Whiston comes along and says he wants to create a new Janus, embracing the kind of diversification we always saw as necessary."
As CEO-elect, Whiston moved quickly to consolidate his control. To make room for some fresh faces on the board, he recommended to Rowland that longtime KCSI director Morton Sosland step down. He also increased the trustees from six to nine, with Hayes, Craig, former Founders Asset Management portfolio manager Andrew Cox and former Charles Schwab marketing executive Steven Scheid joining the expanded board.
Even with a determined -- and duly chastened -- investment staff, Whiston faces a struggle in restoring Janus's bygone luster. But his strategy for reinventing the firm and rescuing the brand -- bolster performance, expand the product line, extend distribution and tighten risk controls -- makes good sense. Perhaps that formula, and a stock rally of 1,000 points or so, will make Janus a formidable competitor again. "If the funds are performing well, Janus will eventually get its reputation back," says Kathryn Barland, a senior analyst at Lipper.
Mark Whiston, who certainly ought to know how to skate on thin ice, vows to prove that Janus is more than a relic of the 1990s bull market. "We're doing everything possible, on every front," he says, "to position Janus for a bright future."
By Rich Blake
February 2003
Institutional Investor Magazine
I'm either coming home today with the biggest job of my life or I'm going to be out of work," Mark Whiston told his wife as he kissed her goodbye and left his suburban Denver home on a warm day last August.
Less than an hour later, the 41-year-old head of sales at Janus Capital Management was standing in a small conference room at the company's headquarters, calmly and deliberately outlining his plan to salvage one of the most powerful brands in finance -- and the company built around it. In essence, his 30-minute presentation to the six directors of Janus's parent, Stilwell Financial, was an audition to succeed the legendary founder of the mutual fund company, Thomas Bailey, as CEO.
One director, Stilwell CEO Landon Rowland, had long admired the ace Janus marketer and feuded with the eccentric Bailey. He watched intently. Janus must achieve much stronger portfolio performance in a vastly changed market and stress value as well as growth funds, Whiston asserted. Moreover, it must better exploit underutilized distribution channels, like brokers and financial planners.
Then he got into a sensitive business issue: The board needed to eliminate the Stilwell holding company altogether and move Stilwell's other divisions, such as Berger Financial Group, into the Janus fold to give the Denver fund company greater operating autonomy and a broader product lineup, so that it could truly recover. Such moves would have cost Rowland, 65, his job.
Yet two weeks later the directors -- including Rowland -- unanimously endorsed Whiston's strategy and named him CEO-elect. The CEO title became official on January 1 this year.
Whiston may wish at times that he could give it back.
Make no mistake about it: Janus is a company under siege. Few other major money management firms, or financial services outfits for that matter, find themselves in such difficult straits. In just 35 months Janus's assets have plunged almost 60 percent; revenues are down nearly 56 percent. The firm's basic identity -- as an aggressive-growth mutual fund company specializing in technology and telecommunications stocks -- has become a liability.
Of course, many firms are struggling with the fallout from the stock market bubble. Merrill Lynch & Co. laid off more than a quarter of its workforce. Citigroup's investment banking unit is feeling the wrath of regulators and defending itself against class-action lawsuits. J.P. Morgan Chase & Co. is straining under stacks of bad loans. And the disappearance of online trading has devastated Charles Schwab Corp.
Still, it's hard to think of another firm that has had to cope with such a sheer loss of face. Janus symbolized all the giddiness of the bull market: It was the 1990s' bubble. The firm's assets soared from $46 billion in 1996 to $330 billion in March 2000, at the market peak.
But because of its concentrated and outsize bet on tech and telecom companies -- Janus was among the biggest holders in Amazon.com, AOL Time Warner and Cisco Systems -- its performance collapsed along with the bubble. The flagship Janus Fund lost an average of 23 percent annually in the three years ended December 31, 2002, for a cumulative loss of 54.5 percent. Investors fled Janus en masse: Since January 2001 the firm has suffered a drastic $26.1 billion in net redemptions, according to Financial Research Corp.
Janus's assets have now tumbled all the way to $138 billion. Revenues have dropped from $2.2 billion in 2000 to $1.1 billion last year. Earnings for 2002 -- $244 million -- are roughly one third of 2000's $664 million. Janus's stock, which hit 54 in September 2000, traded in early February at 13.
"The name that was once associated with huge bull market gains is now closely associated with steep bear market losses," says Morningstar senior analyst Brian Portnoy. "It's going to take time to repair the damage."
Affable as any good fund salesman but with a steely resolve, Whiston knows he must reinvent Janus. For a start, the new CEO must get portfolio managers to pick good stocks in a very different, and very difficult, environment. "Improving performance is our No. 1 priority," he declares. "We have to deliver on this."
Already Whiston has drastically restructured Janus's basic investment process. Analysts are more accountable to portfolio managers, and portfolio managers -- long used to running their own show -- operate under tighter risk controls. Each portfolio is now reviewed by chief of investments Helen Young Hayes and research chief James Goff at least once a quarter; previously, portfolios were not formally reviewed at all. "One way to repair the brand is to increase the accountability of portfolio managers, individually and collectively," contends Whiston.
He also wants to market a greater variety of products to a wider range of investors. Known from its opening day in 1969 for emphasizing aggressive-growth stocks, the new Janus is also selling value funds and quantitative portfolios. The firm made its name selling straight to small investors, and when the bubble burst, fully one third of Janus's sales were still tied to individuals, leaving it vulnerable to mass panic. Whiston intends to sell increasingly through intermediaries. And to entice brokers, in particular, Janus has introduced funds that carry traditional 1 percent or 2 percent retail loads.
"Mark Whiston is saying all the right things," allows William Jacobs, an analyst at Harris Associates, which owns a 4.8 percent stake in Janus. "The question is, Can he deliver?"
Wisely, Whiston has moved to plug a power vacuum caused by years of bitter corporate wrangling between Janus and Stilwell. Until last month Janus was simply a subsidiary of Stilwell, the financial services holding company spun out of conglomerate Kansas City Southern Industries in July 2000. Now Stilwell is gone, its former subsidiaries absorbed into Janus.
Rowland, a former corporate litigator who became CEO of KCSI in 1987 and then also of Stilwell 13 years later, clashed with the mercurial Bailey. In the late 1990s Rowland urged the Janus CEO to hedge the fund company's bets by lessening its near-total dependence on growth stocks. Bailey refused to budge.
"Tom Bailey, for whatever reason, was not as flexible as Whiston in thinking about where the modern mutual fund company of Janus's quality is going to have to be," says Rowland, who remains chairman of the Janus board.
Bailey, however, retired in July 2002, at 65, after selling off his remaining 12.4 percent stake in Janus to Stilwell in two installments, for a total of $1.2 billion. Though not unexpected, the departure of the firm's founder -- in the depths of a bear market, with fund redemptions running rampant -- left many at Janus wondering who could lead it out of the wilderness.
"Bailey's decision to step down was monumental," Whiston says. "For Janus it was a watershed event. We needed to determine what the future of the firm would be."
Two months after Bailey announced his retirement, Whiston was named CEO-elect. One of his first moves was an instant morale booster. He persuaded James Craig, Janus's former chief investment officer and the backbone of the firm for two decades, to come out of retirement to serve as a member of the board.
At the same time, Whiston unveiled his scheme to scuttle the Stilwell-Janus corporate structure. First, he would eliminate the holding company and move into the Janus fold two Stilwell divisions -- the Berger mutual funds, with $14.3 billion in assets, and Nelson Money Managers, a London-based high-net-worth manager with $1.5 billion in assets. Janus would sell off its one-third stake in mutual fund recordkeeper DST Systems, valued at $1.28 billion.
But Whiston, an ice hockey goalie in college, soon found he had to play defense as well as offense. No sooner had he snared the top job than he faced an aggressive challenge from a powerful shareholder, Highfields Capital Management, the hedge fund bankrolled by his alma mater, Harvard University. Highfields began to amass its 9.8 percent stake last September, when Janus was still part of Stilwell.
Highfields set out to derail Whiston's reorganization plan, insisting that the best way to maximize shareholder value at Janus was simply to sell the firm. In early December the hedge fund disclosed that it had hired LBO specialist Blackstone Group to "explore alternatives to enhance the value of the shares."
Undaunted, Whiston moved ahead with his revamping, shedding 140 jobs from a payroll of 1,250 and chipping away at administrative costs. Janus expects to shave $40 million a year off its annual budget of $800 million.
But the new CEO faces pressure from Highfields to make much deeper cuts. Specifically, the hedge fund is prodding Whiston to reduce the compensation of Janus investment professionals and fire its worst performers. Janus portfolio managers have historically been among the best paid in the industry, with some said to have earned as much as $10 million when the bull market was raging. Last month Whiston revealed that in the fourth quarter he had cut the compensation budget companywide by 23 percent, or about $13 million (and this is not counting the layoffs), but he offered no specifics about portfolio manager pay packages.
It may be small consolation to Whiston, but demands from Highfields would have been inconceivable during that golden first quarter of 2000. In those three months Janus stock funds attracted an astonishing $28 billion, or nearly two thirds of the equity assets garnered by the entire mutual fund industry.
But Janus's success was setting it up for a fall. As the bull market roared, the firm's stock pickers made aggressive, highly concentrated bets, loading up their separate portfolios with many of the same sizzling tech stocks. By early 2000 Janus was one of the top three shareholders in Cisco and Yahoo! That year no fewer than ten Janus funds counted Nokia Corp. among their top ten holdings.
Like its portfolios, Janus the business was also overconcentrated. Although other big fund families offered a broad range of investment products, including value equity, international equity and fixed income, roughly 80 percent of Janus's assets were in stock funds, and virtually all of those funds relentlessly pursued growth or aggressive-growth strategies. Today some 67 percent of Janus's equity assets remain in growth.
To be sure, Janus is hardly alone in its misery among growth-oriented fund families. MFS Investment Management, Nicholas-Applegate Capital Management, Putnam Investments and J. & W. Seligman & Co. are all trying to find their bearings in the face of dramatic stock fund outflows. According to the Investment Company Institute, 2002 outflows for equity funds came to $27 billion, on a percentage basis the worst showing since 1988. Meanwhile, well-diversified firms like American Funds and T. Rowe Price Associates that badly lagged Janus in the late '90s now boast solid three- and five-year track records and are attracting a growing share of the little cash going into stock funds.
Still, Janus has suffered far more than most growth managers as its top funds have repeatedly underperformed their peers. Only one of the five biggest Janus funds, the $5.3 billion Janus Growth & Income Fund, is in the top quartile of its peer group for the three years ended December 31, according to Morningstar. Three of the big funds -- Janus Mercury Fund, Janus Twenty Fund and Janus Worldwide Fund -- rank in the bottom quartile. The Janus Fund has trailed the Standard & Poor's 500 index over the past three years by 8.5 percentage points a year on average, earning it a ranking in the bottom 38th percentile of growth funds. "It's not a pretty picture," observes Morningstar's Portnoy.
And it's not just mom and pop who have become disenchanted. Janus's traditional institutional business (18 percent of its total assets, versus 82 percent for retail) is ailing. The firm has lost major subadvisory mandates. Between January 2001 and November 2002, insurer American Skandia Life Assurance Corp. pulled $5.4 billion out of Janus. In November it yanked its last mandate, a $1.6 billion account, a subadvised large-cap growth portfolio.
"Janus had consistent performance issues we felt had gone unaddressed," says Michael Murray, chairman of the investment committee at American Skandia. "Believe me, we would have rather not had to make a change, but the sub-par performance just went on too long."
To prevent more defections, Whiston crafted a performance-focused turnaround strategy that relies -- bravely -- on his two top deputies, chief of investments Hayes and research chief Goff. These two veteran Janus executives, after all, helped to get the firm into its current jam.
Nevertheless, they have begun to transform the investment process. Janus has more than doubled its analyst ranks, to 45; the expanded staff covers 1,000 companies instead of 650. Whiston, Hayes and Goff are now overhauling the firm's signature research operation. In the past analysts worked as generalists, supporting different portfolio managers at different times. Now they are grouped into eight industry teams, with each analyst covering a particular industry and reporting to specific fund managers.
"This has been extremely helpful because it has allowed us to dig deeper into a number of companies and also helped with the communication between analysts and portfolio managers," Whiston says.
Portfolio managers, after years of calling their own shots, are more accountable to Janus senior management, Whiston says. Specifically, they must conform to stringent risk controls, buying only stocks that pass through proprietary systems for scrutinizing financial statements. "We're much more focused on risk management," Whiston says.
How is the new regime working out? The early results are somewhat encouraging. For 2002, 64 percent of Janus funds made it into the top half of their respective universes, although only 41 percent -- 18 out of 44 -- made it into the top quartile. Janus's nongrowth products, meanwhile, posted a net inflow of $6 billion, including $500 million in bond funds sold overseas.
Whiston, a firm believer in fund-family diversification, is pushing to roll out more value and fixed-income funds. The fact that growth funds are anathema in this market provides an extra incentive. He has rebranded Berger's value funds with the Janus logo, and just before Christmas he announced that Janus would acquire a 30 percent stake in Chicago-based Perkins, Wolf, McDonnell and Co. The small- and midcap value firm, which runs $5 billion, serves as the subadviser to three Berger value funds and has a solid performance record. Perkins Wolf's flagship midcap value fund posted a three-year average annualized return of 11.1 percent from 2000 through 2002, 6 percentage points better than the Russell midcap value index.
Last October Janus began selling traditional load funds, with up-front and back-end commissions. Although the firm has been using broker-sold and institutional platforms for its Advisor Series of funds since 1998, they carry only a 50 basis point 12b-1 fee to cover distribution expenses, not the 1 or 2 percent loads attached to most broker-sold funds.
But even with the lure of heftier fees, says veteran industry consultant Geoff Bobroff, "it'll be very difficult for Janus to convince brokers to sell their funds. They lost a lot of people a lot of money.
WHISTON'S TURNAROUND STRATEGY DEPENDS on whether Janus can deliver great performance again and whether investors will ever see the company as anything other than an aggressive-growth manager. Some would say it's a long shot, but then Whiston has overcome long odds before.
A native New Englander, he played a very determined second-string goalie on the Harvard hockey team. As a young marketer at Fidelity Investments in the 1980s, he helped the Boston mutual fund giant crack the market for colleges' and universities' defined contribution plans, giving TIAA-CREF its first real run for school money. Joining Janus in 1991 as the firm's first institutional salesman, Whiston helped shift distribution away from direct sales to brokers, financial advisers and other intermediaries.
The Janus CEO's laid-back demeanor belies a fiercely competitive spirit. "Quietly aggressive" is how Whiston is described by his old Crimson teammate Philip Falcone, who runs a high-yield bond fund in New York. "The wheels are always turning in there," says Falcone. "And despite all his success, he was never one to blow his own horn -- he has always let his actions speak for him."
Whiston grew up in Ipswich, Massachusetts, where his father was president of the local First National Bank. The future Janus CEO went to the prestigious Kent School in Connecticut, where he earned good grades and excelled at hockey. He made the Harvard team as a 5-foot-7, 150-pound freshman but blew out his knee in his junior year.
After graduating from Harvard in 1984 with a degree in economics, Whiston landed a job at Southeast Bank (now part of Wachovia Corp.) in Miami selling mutual funds. Moving back to New England and to Fidelity in 1988, he set to work peddling Peter Lynch's Magellan Fund to university retirement plans. "Mark was persistent," recalls Richard Malconian, the ex-CEO of Fidelity Investments Institutional Services. "He was constantly being told, 'We already use CREF,' but he never got discouraged."
Whiston applied to open a Los Angeles office for Fidelity to supervise all sales and marketing west of the Rockies. He stayed in LA for five years, helping to make Fidelity a dominant player in 401(k)s.
"Mark always seemed to be at the forefront of new opportunities. He could see them way ahead of everybody else," says Cory Griffin, a Harvard classmate who was recently named president of Boston Co. Asset Management.
Taught by talented Fidelity marketer Paul Hondros (now CEO of Gartmore Global Investments), Whiston learned to attack every available sales channel as relentlessly as opposing players used to attack him in the goal. He went after public and corporate pension funds, foundations, endowments and, most of all, the fast-growing market for 401(k)s.
On a business trip to Denver in 1989, Whiston was introduced by a mutual friend to Tom Marsico, the portfolio manager of Janus Twenty, which would become the firm's most famous aggressive-growth fund. Marsico in turn introduced Whiston to Bailey. Impressed, the Janus founder urged Marsico to do what he had to do to bring Whiston aboard.
It took a year and a half -- Whiston was perfectly happy at Fidelity -- but in July 1991 he signed on as a Janus marketer. The firm was already on a roll. Assets that year hit $8.5 billion, up from less than $1 billion at the start of 1989.
Soon after Whiston arrived Janus faced a critical marketing decision. Should the firm build a recordkeeping capability to enter the 401(k) market and compete with Fidelity, Vanguard Group and other big-name providers? Or should it find a way to partner with recordkeepers and focus exclusively on money management? Whiston understood from his days at Fidelity how cumbersome and costly recordkeeping could be, so he persuaded his new colleagues to stick to investment management. That proved a smart move.
Whiston immediately set out to build Janus's institutional business. His big break came in 1993 when Atlanta-based recordkeeper Hazlehurst & Associates created one of the first "platforms" of funds: These enabled fund companies like Janus to provide institutional investment management services without having to bother with keeping the records and doing the administration themselves. "This was our opportunity to enter the 401(k) field without the burden of recordkeeping," explains Whiston, who cultivated relationships with Hazlehurst and other firms that provided platforms.
Janus appeared on all the platforms, and its 401(k) assets jumped from virtually nothing in 1993 to upwards of $10 billion in 1997. At the end of 1999, the money manager registered $50 billion in 401(k) accounts.
Even as Whiston was making a name for himself at Janus as an astute marketer in the 1990s, he kept his distance from the bickering between Rowland and Bailey, two very strong -- and quite contrasting -- personalities. A straitlaced lawyer, Rowland was the antithesis of the free-spirited Bailey, who owned part of a bar in Vail and stayed away from the office for months at a time. The pair squabbled over many things, but one central strategic issue bitterly divided them: Rowland wanted Janus to diversify beyond growth funds, and Bailey adamantly opposed any tampering with Janus's franchise.
Their relationship dated back to April 1984, when Rowland, a Harvard Law School graduate who was then president of KCSI, negotiated its acquisition of Janus. The diversified railroad company paid $14 million for an 82 percent stake in the money manager. But as part of the deal, Rowland granted Bailey free rein to run Janus.
When Rowland moved up to CEO of KCSI in 1987, he preserved the hands-off policy, but he did begin a buildup of KCSI's money management operation, which was far more profitable than its aging railroads. KCSI added the Berger fund family in 1994; Rowland agreed to leave that money manager alone as well. As the 1990s progressed and Janus's assets swelled ever larger, the firm became increasingly important to KCSI's bottom line. By 1997 Janus accounted for more than 50 percent of its parent's profits.
That summer Rowland and Bailey had to confront a crisis. Star Janus portfolio manager Marsico purportedly attempted a coup of sorts. He approached the Janus board, and later Rowland, with a plan whose ultimate outcome was that Tom Marsico be named CEO. The Janus board and then the KCSI CEO turned him down flat. The portfolio manager promptly quit, setting up his own investment shop, Marsico Capital Management, which he sold in two pieces, in 1999 and 2000, to Bank of America Corp. for $1.1 billion.
In February 1998 Rowland decided to spin off KCSI's financial services group. The conglomerate had just taken on debt to acquire a 49 percent stake in Mexico's Transportación Ferroviaria Mexicana railroad, and Rowland wanted to split off the financial services operation so that it wouldn't get saddled with the debt.
But there was a hitch: If the action were deemed to be taxable, the sizable Internal Revenue Service hit would weaken the hived-off financial services firm. Rowland and his advisers determined that the IRS would declare the deal tax-free only if all of KCSI's financial holdings were spun off together. Letting Janus loose on its own -- which Bailey and most Janus employees would have vastly preferred -- would have nixed the tax exemption. Rowland's idea: Spin out Janus, Berger and DST in a publicly traded entity called Stilwell Financial (after Arthur Stilwell, founder of the Kansas City Southern railroad).
That's when the tension between Rowland and Bailey, and between KCSI and Janus, started to boil over. Bailey and other Janus executives were eager to liberate themselves from KCSI and run a public company, but they opposed linking up with the lesser-known Berger Funds in a holding company. Janus executives, who liked the idea of publicly traded stock to attract top talent, felt certain that Janus shares would be most valuable as a pure play: Their company should fly off on its own.
In March 1999 Bailey and Janus board member Thomas McDonnell, the CEO of DST, appeared before the KCSI board to plead the case for independence. Over ensuing months Janus portfolio managers waged a campaign that grew increasingly nasty -- and public. Several Janus executives were quoted threatening mass defections of portfolio managers if the Stilwell spin-off were allowed to proceed. Whiston prudently kept his own counsel.
On April 24, 2000, Rowland fired back at Bailey and his rebels. He filed an amendment to the KCSI annual financial documents asserting the company's legal right to fire Bailey. Janus staffers continued to hold out slim hope that the spin-off might be stopped, but it proceeded in July 2000. With Rowland as CEO, Kansas Citybased Stilwell began trading on the Big Board on July 12 under the symbol SV. The timing couldn't have been worse: The market, and SV shares, soon collapsed.
Janus suffered another blow right after the IPO. In August 2000 CIO Craig announced that he was retiring to set up a family foundation. He had cashed out his sizable ownership stake a few months before. (The following year he was diagnosed with lung cancer, which is now in remission.) Insiders say Craig's departure was a major loss. "He was a strong leader," says Whiston.
By the autumn of 2000, the Nasdaq Stock Market meltdown was hammering Janus's returns. The next year it suffered outflows of more than $6 billion. Year-end 2001 assets tumbled to $192 billion from $249 billion at the end of 2000.
No one was paying closer attention to Janus's financial results, for personal as well as professional reasons, than founder and CEO Bailey. In January 2001 -- when Fortune magazine published a widely read article that depicted Bailey's sybaritic lifestyle -- the Janus CEO faced a year-end deadline to cash in his shares on favorable terms: A look-back clause in his contract allowed him to sell his stock at 15 times Janus's earnings for the previous year. He decided to, in effect, hand Stilwell a bill for $1.2 billion, the value of his remaining shares -- based on the fortuitous look-back formula. Just to pay him off, the holding company had to take on $900 million in debt. Bailey insisted, as he cashed his check, that he intended to remain CEO.
But the copious payout only intensified tensions between Rowland and Bailey. In a March 2002 10K filing, Stilwell took the unusual step of describing "strained relations between Janus and Stilwell that . . . could result in the loss of key Janus employees and key Janus management." (In fact, Janus has suffered no major staff defections.) The filing also warned that "a formal succession plan in the event of a departure from Janus by Mr. Bailey has not yet been fully developed."
Three months later Bailey announced his resignation, effective July 1.
In the weeks after Bailey stepped down, as Janus senior executives hashed out succession scenarios, Whiston emerged as a front-runner to take over as CEO. A 15-year Janus veteran widely respected by the analysts and portfolio managers, chief of investments Hayes would have been a strong contender, but she made it clear that she preferred managing money to running a firm. Indeed, she proved to be a forceful advocate for Whiston, rallying the investment staff to him and lobbying Rowland.
In late June Rowland and Stilwell executive vice president Daniel Carpenter met with Janus's six-member management committee. Rowland asked each executive who would make the strongest internal candidate for CEO. "Mark's name kept coming up," reports Robin Beery, head of marketing and a committee member.
On July 3 Rowland flew back to Denver to meet with Whiston, whom he knew to be the first choice of the Janus team. Whiston emphasized that he -- unlike Bailey -- was eager to make Janus a more diversified money manager.
Then in early August last year, the entire six-member Stilwell board flew to Denver to meet with Whiston and Hayes, basically to determine Janus's future. Whiston pal Falcone, who'd had dinner with him the night before the meeting, was struck by his self-confidence. "Mark knew he was the right person for the job, and he knew he was up to it," Falcone says. "His big concern was whether he'd truly have 100 percent free rein from Stilwell to do what needed to be done."
Having proposed to eliminate the Stilwell holding company structure, and thus Rowland's job, and bring all Stilwell's money management divisions under Janus's roof, Whiston told the board that he had persuaded Craig to return as a Janus board member. Rowland, sold earlier on Whiston's plan, urged his fellow directors to sign on.
Later in the month, at a board meeting at Stilwell's headquarters in Kansas City, the directors crowned Whiston as Bailey's successor, effective January 1, 2003. Just after Labor Day Stilwell announced the news.
After so many years of bucking Bailey's efforts to get Janus spun off on its own, why did Rowland agree to that same arrangement when it was proposed by Whiston? Some Janus insiders suggest that once Bailey retired, Rowland could consider the issue of Janus's independence dispassionately.
Says Rowland, "Once Bailey had gone, Whiston comes along and says he wants to create a new Janus, embracing the kind of diversification we always saw as necessary."
As CEO-elect, Whiston moved quickly to consolidate his control. To make room for some fresh faces on the board, he recommended to Rowland that longtime KCSI director Morton Sosland step down. He also increased the trustees from six to nine, with Hayes, Craig, former Founders Asset Management portfolio manager Andrew Cox and former Charles Schwab marketing executive Steven Scheid joining the expanded board.
Even with a determined -- and duly chastened -- investment staff, Whiston faces a struggle in restoring Janus's bygone luster. But his strategy for reinventing the firm and rescuing the brand -- bolster performance, expand the product line, extend distribution and tighten risk controls -- makes good sense. Perhaps that formula, and a stock rally of 1,000 points or so, will make Janus a formidable competitor again. "If the funds are performing well, Janus will eventually get its reputation back," says Kathryn Barland, a senior analyst at Lipper.
Mark Whiston, who certainly ought to know how to skate on thin ice, vows to prove that Janus is more than a relic of the 1990s bull market. "We're doing everything possible, on every front," he says, "to position Janus for a bright future."