Janus Henderson and Guardian Life have forged a strategic partnership that will see the asset manager take on the life insurer’s $45 billion investment grade fixed income portfolio. And the deal comes with a kicker: Guardian has committed $400 million in seed funding to accelerate Janus Henderson’s fixed income exchange-traded funds and credit strategies and the insurer gets stock warrants in the manager.
“It’s an open canvas; the number could rise if we think there are even more opportunities,” said Nick Liolis, chief investment officer of Guardian. “The goal was to try to find a way to help Janus Henderson create new products that are going to generate a lot more AUM and as a result help us participate in those economics as well.”
The firm “has paint for that canvas,” added Ali Dibadj, CEO of Janus Henderson, in an interview with II, referring to the seed funding.
“We have so many different ideas in the pipeline that we think our clients in the institutional and insurance worlds want and need, but also in retail. We’re very energized about having the opportunity to grow together, test things, and have brainstorming sessions to figure out what the right products to develop are.”
He added that Janus Henderson has a track record of new ideas in fixed income, a space that has “historically not had a lot of innovation.”
Initial plans are to further develop Janus Henderson’s fixed income ETF suite. The firm manages several successful examples already but believes that there is room for growth in the area. The existing lineup includes: an ETF that invests in AAA-rated collateralized loan obligations; a floating-rate BBB CLO ETF; a U.S. securitized credit ETF; a mortgage-backed securities ETF and an active global short duration income ETF.
“That rapid pace of growth and development has clearly suggested that we’re meeting a need,” Dibadj said. “For Europe, Asia, and the Middle East, we’re seeing tremendous, continued growth in those categories with our own seed capital and a few partners externally, so imagine what we could do with $400 million and a great, motivated partner, to deliver growth for both of our businesses.”
In addition to the seed funding, the deal will see thirteen insurance investment experts of the Guardian team move across to work at Janus Henderson.
“This is a very clear, very well-articulated and well-defined long-term partnership,” said Dibadj. “It’s perfectly aligned, the fixed income ETF strategies that we both have are to drive innovative and profitable client-led growth. In this case, the partnership is meant to deliver for Guardian clients and policyholders and to deliver for Guardian as a shareholder through the warrants, and for Janus Henderson’s shareholders.”
Guardian Life and Janus Henderson will also co-develop proprietary, multi-asset solution model portfolios for the life insurer’s investment advisor, Park Avenue Securities.
“A strategic initiative for Guardian is to grow the wealth business, so to be able to partner with a brand name like Janus Henderson and have access to the full investment capabilities that they bring to the table is enormous for us,” he said. “I heard Ali [Dibadj] say it was a match made in heaven on CNBC yesterday and that is very exciting: We agree.”
The move will bring Janus Henderson’s fixed income AUM up to $147 billion.
