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Rekenthaler Report

When One Fund Company Buys Another

Such deals rarely benefit fund shareholders.

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The Wrong Shareholders
I was reminded by Barron’s, which invited me to discuss the subject, that the fund industry continues to consolidate. This year, Franklin Resources (BEN) purchased Legg Mason and Morgan Stanley (MS) announced that it would buy Eaton Vance. Then hedge fund manager Nelson Peltz acquired 9.9% positions in both Invesco (IVZ) and Janus Henderson (JHG), while suggesting that the two businesses should combine.

If so, that transaction would be fitting, because those companies long ago shed their original breeding. Founded in Atlanta, Invesco was later purchased by a British firm, which then acquired the mutual fund companies of AIM, Van Kampen, Guggenheim Investments, and OppenheimerFunds. For its part, Janus Henderson was formed in 2017, when Denver’s Janus Capital merged with Britain’s Henderson Group. If these firms were dogs, they would be oodles.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.