00:00Another bidding war on our hands apparently. Victory Capital offering to buy Janice Henderson for $57 a share, topping Tryon's
00:07bid by 16 percent, who was in conjuncture with General Catalyst. Joining us now is Bloomberg Intelligence Analyst Kevin Ryan
00:13in London.
00:14Kevin, this is a really fascinating saga because Victory had before tried to bid for Janice Henderson and before had
00:22a higher bid than what the current buyers are offering.
00:25So how will this one make a difference? Is $57 enough to wrestle Janice Henderson away?
00:32I just don't know. And have they come too late? Because Janice Henderson seemed happy with Tryon and General Catalyst.
00:42But what I can say is that the Tryon bid is offering one and a half percent of assets under
00:50management and Victory are upping that to 1.8 percent, which I think is quite toppy historically.
00:59So one and a half, 1.6 times is the sort of average.
01:04Janice Henderson and Tryon, though, have historically worked closely together.
01:10I mean, that relationship must mean something.
01:14Yeah, I guess it does. My sense is that if they go with Tryon, there'll be another deal to put
01:21them together with another asset manager.
01:24Because I think what we're seeing here is that Janice Henderson has got just under half a trillion of assets
01:31under management.
01:32And in the game of running assets now, that's just not quite big enough.
01:38And it seems that the starting point is a trillion now, which is just extraordinary.
01:44But nonetheless, it seems to be the benchmark of being competitive in a market that is being brutal on margins.
01:54Kevin, why is that? What is change that makes this so necessary and that margins have gotten so compressed?
02:01I think it's the rise and rise of trackers and ETFs.
02:05But Kevin, isn't that an old story? I mean, we've had trackers and ETFs for a while now.
02:10Why is a consolidation just taking place?
02:14Because I think certainly active managers like Janice Henderson have been reluctant to say,
02:21do you know what, the market's moved on. They don't want active management anymore.
02:25They don't want all these people sitting in fancy city offices.
02:31So it's taken this amount of time for the penny to drop.
02:37But top lines aren't growing.
02:39Your costs generally go up, even if you try and keep them flat, at around CPI, 2%, 3%.
02:47So this has been relentless over the last decade.
02:50And as I say, I think the penny's just beginning to drop with management's that they just need to be
02:55bigger.
Comments