Henderson Plans U.S. Funds Push
Strength in existing funds and an eye to add scale has Henderson Group’s $6 billion U.S. funds business poised for expansion, an executive indicated.
“We’d like to double U.S. assets in three to five years before acquisitions, and with the right one scale to get to $25 billion,” said Chuck Thompson, director of U.S. retail for Henderson.
The Chicago-based unit manages $6 billion of the global parent company’s $106.7 billion under management and accounts, and the goal is to triple revenue as a percentage of the global revenue, to 33%. The business is split about 75% wire house and 25% in family offices and Registered Investment Advisors.
Henderson has added four funds since 2010: All-Asset, Dividend & Income Builder, Emerging Market Opportunities, and High Yield Opportunities funds. The firm plans to add another half-dozen funds in the near term, according to Thompson.
The “Henderson Difference” brand is marketed on the back of the firm’s performance, management, and history. Thompson noted that one specific differentiator is the firm’s focus on bottom-up fundamental research ideas, which can unearth good companies off Wall Street’s radar.
Thompson cited Inditex as a strong holding; the Spanish clothing company operates Zara, a woman’s clothing retailer, less than a block away from Henderson’s office on Chicago’s Magnificent Mile. More broadly, Thompson said Henderson’s European Focus Fund gained 25% and raised additional capital last year, when sentiment toward investing on the continent was negative.
New products include the Henderson High Yield Opportunities fund, which launched in the U.S. in April and performed better than 94% of peer funds in its first month, according to Thompson. The fund is managed by Kevin Loome, who Henderson poached from Delaware Investments as part of a six-person team.
Thompson noted Henderson expects to bring its first closed-end fund to market later this year, and the fund can raise significant assets if a major wire-house firm takes the lead underwriting role.
Henderson Group Chief Executive Andrew Formica, originally from Australia and now based in London, has a record for acquisitions that include Gartmore Funds in 2011 and New Star Asset Management in 2009. “He’s here often” scoping for talent and strategic alliances to further globalize the franchise, Thompson said.
Thompson himself is in pursuit for U.S. equity capability as a priority with an eye for income statements that he feels add value at the stock level, “not where ETFs are eating into the cost structure,” he said.
Thompson joined Henderson in 2001 from Van Kampen. He moved into Henderson’s current office on Michigan Avenue and helped build out Henderson Global mutual funds domestically from a starting point of no assets, three funds, and four people. The U.S. launch was Aug. 31, 2001, and after the post-September 11 market swoon that entailed a swift 10% drop in fund values, they swallowed hard about the timing after seeding multiple funds.
Henderson Global’s property business remains resilient, Formica said earlier this year, and progress is being made in Asian private equity. Henderson won its first hedge-fund award for a long-short UK equity product in April, and is anxious to launch more alternative products, Thompson noted.
“Everyone is looking at how to package capabilities to alternative formats,” he said, noting benefits including lower risk and lower market correlation. ‘Baby boomers’ now at or near retirement are demanding low-risk products with equity-like returns, Thompson stated.
As the next 10 years of asset management will be about finding appropriate risk trades for the largest number of retirees coming through the system in generations seeking income and growth, Thompson cautions buyers to distinguish those who have alternative capabilities they are trying to package correctly versus those who are marketing strongly while trying to cobble a strategy together.