Janus, Invesco, Federated Investors Q1 profits drop

By Svea Herbst-Bayliss and Joseph Giannone

BOSTON/NEW YORK (Reuters) - U.S. money managers Janus Capital Group Inc (JNS.N) and Invesco Ltd (IVZ.N) reported surprisingly weak quarterly profits on Thursday as stock market declines and investment losses carved into revenue.

Federated Investors Inc (FII.N), relying on its stable of funds that appeal during turbulent markets, earned more during the quarter, but not enough to overshadow a $20.1 million charge that resulted in lower profit.

The three companies also showed that the tide of money flowing out of the industry may be turning after a punishing year of record withdrawals from stock and bond mutual funds during the financial crisis and turbulence in global markets.

Atlanta-based Invesco took in $9.3 billion in new client money in its first-quarter to March 31, a reversal from $2.0 billion in outflows in the fourth quarter.

Denver-based Janus, known for growth stock funds, said only $900 million was pulled from its equity and bond portfolios after $3 billion of withdrawals in the final quarter of 2008.

Pittsburgh-based Federated Investors reported $1.1 billion of new flows into its fixed income funds, a dramatic improvement from $159 million in outflows during the fourth quarter. Investors withdrew $266 million from Federated's stock funds during the quarter, less than the $721 million they removed in the fourth quarter.

Federated Investors does not report flows into or out of its money market funds, which make up the bulk of assets.

"The industry has stabilized," Janus Chief Executive Gary Black said in a telephone call with analysts and reporters, adding that he expected inflows to improve at other firms with better returns.