Andrew Daniels: This week, U.K.-based Henderson and U.S.-based Janus agreed to a merger of equals. The deal's expected to close in the second quarter of 2017, with Henderson owning 57% of the combined company and Janus owning 43%. The deal makes clear business sense.
Both firms have been trying to increase their distribution presence and diversify their product offerings. There's also an economies-of-scale benefit which should allow them to spread out their fixed costs over a larger pool of assets, and allow them to improve their financial results.
The benefits to fundholders, however, is less clear. If the added scale brings them operational efficiencies, that should allow them to reduce expense ratios. However, there are no plans to do that in the near future. There's also some cultural problems as well. Any time you're bringing together two different firms, the potential for culture clash exists, and manager and analyst turnover may increase as a result. All told, this deal makes clear business sense, but the benefits to fundholders is less clear.