Dec. 12, 2002 -- Janus Capital Management is taking over its cousin Berger Funds.
Janus said trustees of the Berger funds have agreed to merge its growth funds into similar Janus offerings, and to fold its value-oriented funds into the Janus family.
Janus has also agreed to buy a 30% stake in Perkins, Wolf, McDonnell & Co., a Chicago investment firm that runs two of the value funds being acquired by Janus.
Janus, which has seen its assets under management decline over the last two years, will get control of about $4.7 billion in assets in the reorganization, bringing its total assets to about $135 billion. Janus and Berger are units of Stilwell Financial (SV), which is being organized into a single business that will operate under the Janus name.
Janus benefits from the deal by gaining a "substantial amount" of assets for which it will collect management fees, said Burton Greenwald, a mutual fund consultant in Philadelphia. Moreover, Janus will acquire the assets cheaply, he said.
"They're basically paying the expenses of the transaction," said Greenwald. He noted that companies typically have to pay a fee equivalent to 2%-4% or more of the assets they are buying to purchase an investment management firm.
Janus, whose funds are primarily growth-oriented, will also be broadening its product line with the addition of the value-oriented funds, Greeenwald added.
Although other mutual fund companies had expressed interest in its funds, Berger said it decided that going with Janus was the best alternative. Janus' plan is the best for shareholders, "based on cost, shareholder servicing capabilities, compatibility of investment style, and other factors," Berger said in a release.
The Berger growth funds will be run by the managers of the Janus funds that are absorbing them, starting Monday. Berger's growth fund portfolio managers will not join Janus, a Janus spokeswoman said.
In the reorganization, Berger Balanced Fund (BEBAX) would merge into Janus Balanced Fund (JABAX); Berger Growth Fund (BEONX) would merge into Janus Olympus Fund (JAOLX); Berger Large Cap Growth Fund (BEOOX) will merge into Janus Growth and Income Fund (JAGIX); Berger Mid Cap Growth Fund (BEMGX) would merge into Janus Enterprise Fund (JAENX); and Berger Small Company Growth Fund/Investor (BESCX) would merge into Janus Venture Fund (JAVTX).
In addition, Berger Information Technology/Investor (BINVX) would be absorbed by Janus Global Technology Fund (JAGTX), and Berger International Fund (BBINX) would move into Janus Overseas Fund (JAOSX). The reorganization is subject to shareholder approval.
Berger's three value funds will continue to be overseen by their current managers. Perkins runs Berger Mid Cap Value Fund (BEMVX) and Berger Small Cap Value Fund/Investor (BSCVX). Bay Isle Financial manages Berger Small Cap Value Fund II.
Janus also said it plans to add value-oriented funds that invest in small and mid-sized companies to its Janus Adviser and Aspen series fund groups at the end of the year. The small-cap offering will be run by Bay Isle, and the Mid-cap fund will be run by Perkins Wolf.