Looking purely at the financial aspects of the deal, there would appear plenty to be positive about – estimated first year cost savings of $110m, the establishment of a more global presence and the ability to offer a broad suite of complementary products are real benefits to all concerned.
Yet the broader implications of the announcement for both the UK financial services sector and the global asset management industry are also significant and raise more questions than answers.
From a UK perspective, the decision of the new company to have a primary listing in New York and a secondary one in Sydney, rather than on the London Stock Exchange (LSE), could be taken as something of a blow, particularly if considered within the wider context of Brexit. This does of course need to be caveated by the fact that the newly named Janus Henderson Global Investors will be headquartered in UK, with the company stressing it sees London as a crucial financial centre and a “pivot between the US and Asia”. Nevertheless, the delisting from the LSE is hardly helpful to the UK’s prestige at a sensitive time.
It is however at the asset management level that the implications of the Henderson/Janus deal come into particular focus, with several commentators citing the need for traditional, active managers to respond to the continuing flow of capital towards low-cost, passive competitors.
The pressure on active managers is well known and does not need to be debated further here. How this deal can be viewed, however, is that the active space is starting to move to respond, with this agreement one of the first examples of businesses “clubbing together” to defend against the rise of passive and protect their market share.
Whether this agreement fires the starting gun on further asset management industry deals remains to be seen. If it does, it will hardly come as a surprise – expectations that we will see consolidation within the space have been high for some time, with the widely accepted view being that the future asset management landscape will comprise large (potentially consolidated) organisations and boutique niche players. One thing for sure is that we are likely to see considerable evolution within the asset management world over the foreseeable future.