Two Big Investment Managers To Join Forces?

Two Big Investment Managers To Join Forces?

over 3 years ago2 mins

Mentioned in story

Investment managers need some love like they’ve never needed love before – so late last week an activist investor revealed his plans to make two of them become one 🎶

What does this mean?

Activist investors’ schtick is buying a sizable stake in a company and using it to influence the company’s strategy 👉 Except activist Trian Fund Management has gone one step further: it’s bought 9.9% stakes in two firms – Invesco and Janus Henderson – and is trying to get both of them to do its bidding.

Invesco and Janus Henderson are already products of mergers and acquisitions, but Trian now wants them to join forces. The reason’s pretty straightforward: the more money an investment manager looks after, the more profitable it should be 💰 That’s because more money brings in more fees, even as the investment manager’s costs – like analysts and technology – stay put. That extra profit, Trian hopes, should boost the combined company’s value and make it a fiercer rival to the world’s biggest investment manager, BlackRock.

Why should I care?

Investors have increasingly been pulling their cash out of pricey and underperforming “active” funds in favor of low-cost “passive” funds that don’t require much tinkering. That’s come as a blow to investment managers’ earnings, and driven plenty of them to cut fees in a bid to win investors back ✂️ Adding insult to injury, this year’s record low interest rates have forced some funds to abandon fees altogether so their bond investors can earn any sort of a return.

Source: The Wall Street Journal
Source: The Wall Street Journal

A world with fewer investment managers would be good for their profits, since it’d relieve some of the pressure to win your business with lower fees 🌎 But that’s not the fragmented and competitive world we live in, so you can reap the rewards instead. Keep your eyes peeled for low-fee introductory deals: those savings, with compounding, will eventually add up to something much, much bigger.

Daily Brief Image


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG