Trian Fund Picks Up 9.9% Stake Each In Invesco And Henderson Group: WSJ

Trian Fund Management L.P has invested approximately $900 million in Invesco Ltd IVZ and Janus Henderson Group PLC JHG combined, with an intent to take on global giants in the asset management industry, according to the Wall Street Journal. After the stake purchase, Trian will hold a 9.9% position in each of the two companies.

What Happened: Trian’s $900 million investment will be partly sponsored via a long-term unreported fund, originally created with a view of consolidating the asset management space, as per the Journal. The remaining amount will be retained in the fund until new opportunities emerge in this sector.

In February, investment management company Franklin Resources Inc BEN announced the acquisition of peer Legg Mason Inc, which was closed on July 31. Bloomberg said that Trian Fund Management raked in a $70 million profit from the investment it made in Legg Mason nine months ago.

Why Does It Matter: Trian’s investment is part of a broader strategy to introduce a befitting rival against large-cap rivals like BlackRock Inc BLK, the Journal noted.

Asset management firms are facing setbacks like dropping fees and reduced profitability margins. A larger entity with a wider asset base would be in a better position to brave these headwinds.

Recent trends also indicate that investors are attracted to index funds in comparison to an actively managed portfolios, according to CNBC. The cost of management is the primary deciding factor.

Trian earlier last month revealed it had invested $900 million in Comcast Corporation CMCSA.

Price Action: Invesco closed 1.49% lower at $11.25 on Thursday. Janus Henderson shares closed at $21.60, 0.60% lower.