Monday Business Roundup

Denver-Based Janus Capital Hit by Departures

By Richard Martin, 9-10-07

Shares in Denver-based Janus Capital Group are down more than 2 percent this morning after last week’s departure of star fund manager Scott Schoelzel, considered one of Wall Street’s most astute traders. Schoelzel’s departure caps a string of defections for the largest investment house in the Rocky Mountain West, which has about $191 billion under management, down from a late-1990s peak of $330 billion: “Three of the top brass - the chief financial officer, the chief lawyer and the head of sales to institutional investors - have left this year,” reports the Rocky Mountain News.

Janus endured a series of setbacks starting with the tech crash in 2000, losing big clients like the state Public Employees’ Retirement Association and seeing the value of its assets drop by more than a third. Now, though, writes the Rocky’s James Paton, “After paying a steep price, Janus finally has turned the corner.” Money inflows have surpassed withdrawals for the first time since 2001,the company’s spinoff Intech (which uses “algorithmic trading” based on mathematic formulae rather than the parent company’s traditional approach) has grown to $70 billion, and Janus’ share price had climbed 50 percent this year before the recent market downturn. Despite the recent departures, Janus has one of the lowest turnover rates among fund managers and analysts on Wall Street in the last five years.

Also last week, Janus said it will acquire a 14% stake in Bermudan sugar and ethanol producer Cosan Ltd., a subsidiary of Brazilian giant Cosan SA.

In other business news:

-- Broomfield telecom network operator Level 3, which has overcome the after-effect of the telecom crash to enjoy a couple of years of solid growth, has also seen its share price tumble after a stock-market research firm cut its rating on the stock to “underperform.” The Buckingham Research Group sees slowing demand for Level 3’s wholesale long-distance services.

-- One of the biggest new development projects in northern Colorado is set to move forward on 348 acres near Union Reservoir northeast of Longmont that are owned by LifeBridge Christian Church. The Church’s ambitious plans, which include up to 700 new homes plus a 680,000 square feet of commercial development, have sparked opposition partly due to the tax-exempt status of the church and its affiliated business unit, the Corporation for Community Christian Connections. A citizen petition to stop the project is circulating after the Longmont City Council approved it last week with only one dissenting vote.

-- Ignoring a raft of bad news surrounding municipal wireless network projects around the country, Colorado Wireless Communities, the 10-city Northern Colorado group planning to build a 137 square-mile WiFi system, last week signed a letter of intent with Boulder-based C-Com Affinity Telecom to take on the network build-out. In cities like Anaheim, San Francisco and Phoenix such WiFi projects have been plagued by cost overruns, technological glitches and low subscriber numbers. Colorado Wireless Communities represents the governments of Arvada, Wheat Ridge, Golden, Lakewood, Boulder, Broomfield, Louisville, Northglenn, Thornton and Superior.

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