By Sam Mamudi

Asset manager Janus Capital Group Inc. (JNS) named its next chief executive on Thursday, filling the position almost six months after the departure of its previous CEO.

Denver-based Janus said Richard Weil will take over on Feb. 1. Weil will join Janus from bond-fund specialist Pimco, a unit of Allianz Se (AZSEY). Weil had spent 13 years at Pimco and had been chief operating officer between 2000 and 2009.

Weil, 46, will succeed Tim Armour, a Janus director who has been interim CEO since the departure of former CEO Gary Black in July.

"Dick was Pimco's chief operating officer for nine incredibly successful years," said Steve Scheid, chairman of Janus, in a statement. "The breadth of his leadership experience, deep understanding of the investment industry and global perspective were all key factors behind the board's decision. These characteristics not only complement Janus' key strengths, they also align with the firm's long-term strategic priorities."

Recovery Effort

Janus was a darling of the mutual-fund industry in the late 1990s, with its growth- focused mutual funds logging large gains. But the funds were also heavy on technology stocks, and Janus suffered more than most when the tech bubble burst. The firm was then involved in the mutual fund scandals in 2003, and has been trying to recover ever since.

Many investors are still avoiding the firm. As of Nov. 30, total mutual fund assets were $90 billion, down from $173 billion on Dec. 31, 1999, according to Morningstar Inc. Flagship Janus Fund (JANSX) has average annual losses of about 3% a year over the past decade. The fund's assets under management have declined to $8.7 billion from $42 billion at the start of 2000, according to Morningstar.

Despite performance that for the most part was better than its peers in 2009, Janus in its most recent reported quarter saw long-term net outflows of about $600 million.

Investors in both Janus funds and the company's stock will be hoping Weil can complete a turnaround started by Black.

Under Black, who was chief investment officer from April 2004 and CEO from January 2006, Janus boosted its research-analyst team, broadened its fund lineup, and aimed new products at institutional investors, brokers and financial advisers - moving away from the direct selling of funds to retail investors.

Black also reined in Janus' star manager culture, aligning pay with long-term performance and promising that all managers would be compensated equally.

The compensation changes upset some portfolio chiefs who subsequently left the firm, among them David Corkins, who had been manager of Janus Fund.

Building Blocks

"There may have been too many tensions [under Black]," said Andrew Gogerty, senior fund analyst at Morningstar. But, he added, he doesn't expect any "significant changes" in strategy under Weil.

"I think his two first jobs will be to meld with the top executives, most of whom are new, and continue to push Janus' investment strategy to focus more on an institutional line-up," said Gogerty.

"We think the board was focused on candidates with strong leadership skills that could execute existing strategic priorities (i.e., preserving strong investment performance, broadening distribution, and maintaining operational efficiency)," said analysts at Sandler O'Neill & Partners in a research note following the news of Weil's hire.

Analysts also frequently point to the fact that less than 10% of Janus' assets are from non-U.S. clients at a time when most fund firms are increasingly looking overseas to grow their businesses.

"Building out international distribution remains a key priority for Janus, with Weil's experience expanding Pimco's overseas operations perhaps accelerating that process," said the Sandler O'Neill analysts.

The analysts kept Janus' stock rating at hold, though they noted "trends seem to be moving in Janus' favor (strong investment performance, ongoing retail market share gains, reallocation to equities more broadly)."

Analysts at Standard & Poor's kept their "buy" rating on Janus.

"We think Weil has valuable experience with a global organization from an operations and investment perspective. We think he brings credibility to a role vacated by the sudden departure of former CEO Gary Black in July 2009," S&P said.

-Sam Mamudi; 415-439-6400; AskNewswires@dowjones.com