Janus Henderson’s Ali Dibadj: ‘You’ve just got to roll with the punches’

In 1979, the fall of the Shah of Iran stranded Ali Dibadj, then four years old, and his immediate family in Canada. His father, who had been working there, lost his job, and they had to move out of their home and seek emergency visas to stay in the country. Dibadj’s mother went to work at a clothing boutique where she had once shopped, supporting her husband and two children in a one-bedroom apartment.

Watching his parents pick up and start again without asking for special treatment was a formative experience for Dibadj, now 49 and chief executive of asset manager Janus Henderson. Their determination and emphasis on doing things the right way still shapes his management approach as he seeks to rebuild a storied brand that has fallen on hard times.

“It taught me that you’ve just got to roll with the punches and work hard and solve the problems,” Dibadj said. “I always think about integrity and that it will eventually pay off.”

Dibadj faced problems galore when he took over Janus Henderson two years ago this month. The group, which has about $350bn in assets under management, was created by the 2017 merger of Denver-based Janus with London-based Henderson. The bulk of its workforce remains split between time zones.

Often described as a case study of how not to do a merger, the deal aimed to cut costs and help two active managers combat competition from cheap index tracking funds. But its co-chief executive arrangement flopped, leaving the combined company racked by internal dissent. By the time Dibadj arrived in June 2022, Janus Henderson had endured 18 straight quarters of net outflows, assets were falling towards their low of $275bn and the firm was under pressure from activist investor Nelson Peltz.

“The core problem was a lack of accountability and buy in, and not a lot of collaboration. In fact there was a lot of finger-pointing,” Dibadj said. Staff from the Janus and Henderson businesses “didn’t collaborate, and many of them didn’t know each other. It was very siloed.”

Seeking to unite his new company behind a shared sense of purpose, Dibadj put together a geographically diverse team of 40 people, half investors and half from distribution and corporate departments, to come up with a new strategy. The “senior leadership team” met together and in smaller groups every other week for five months, seeking to determine what customers wanted and where Janus Henderson could legitimately compete.

“This was not ‘bring in McKinsey from on high’; this was not the board says ‘this is the strategy’; it was ‘we are all going to develop a strategy together,’” he explained. At first, no one talked, expecting him to take the lead. By the end, “we would get into real debates and arguments . . . it was blood, sweat and tears.”

From 196 ideas, they settled on fewer than 10 concrete goals, which the board approved in November 2022. These include pushing into industry growth areas such as active exchange traded funds and alternative assets, while also revamping the way the business develops and sells products to make sure efforts are being directed where they are most likely to bear fruit.

The company reaffirmed its commitment to active stock and bond picking, despite industry trends towards low fee, passive funds. It is betting that higher interest rates, and therefore capital costs, will demonstrate the value of making informed choices. “​We will be back to a normal environment where a good company or bad company will perform differently,” he said.

So far, Janus Henderson as a whole is still suffering outflows, $3bn in the first quarter, with more expected. But sales have been stronger in areas where reforms were rolled out first. Flows from US intermediaries, such as wealth managers and financial advisers, have been positive for three consecutive quarters, and its pioneering ETF featuring collateralised loan obligations just passed $10bn in assets.

Janus Henderson’s share price is up 10 per cent in the year to date, and total shareholder return from Dibadj’s start date to May 31 is 60 per cent, compared with 26 per cent for a weighted average of its peers.

“He’s the catalyst that we needed to get this organisation to really achieve,” said Roger Thompson, who has been chief financial officer since 2013. “It’s about making people feel at all levels that they are personally accountable.”

Strategy development and team building came naturally to Dibadj, who started his career at McKinsey after earning engineering and law degrees from Harvard. As a consultant, he focused on the consumer sector, and gained experience with corporate integration by working on Procter & Gamble’s acquisition of Gillette and the merger of supermarket chains Ahold and Delhaize. Success, he learnt, came from prioritising the customer.

“You always think about that end user, if you can delight that end user,” he said. “It comes a bit from my mom being on the shop floor selling clothes. If you do right by your client, by the person, that’s the morally right thing to do, and the business right thing.”

In 2006, he jumped to AllianceBernstein, where he established himself as a premier consumer sector analyst. He led the Institutional Investor rankings for 11 years running, but also faced criticism for putting “sell” ratings on popular companies. One client was so angry he demanded Dibadj be fired, a message his boss passed on, while reassuring him of his support. 

“We just stuck to our guns, stuck to our integrity. There was one client who was upset . . . but we were doing a favour to plenty of other clients by warning them that there was a problem,” Dibadj said. He later ran a small-cap fund as a portfolio manager and then headed strategy and finance.

As a consultant and an analyst, Dibadj made a habit of questioning industry assumptions. With beverage companies, he took aim at the volume metrics that had been used to measure performance. “You can’t take volume to the bank. You actually have to take revenue to the bank, which is volume times price,” he said. “Selling a two-litre soda bottle, at 99 cents in a supermarket, is vastly different from selling a $1.25, eight ounce bottle in a corner store.”

That experience translated directly into his plans for righting the ship at Janus Henderson. Dibadj has been counselling analysts and the company to fixate less on total assets under management and more on those that carry higher returns and higher fees. “Not all AUM is created equally,” he said on Janus’s first-quarter earnings call. “We’re very mindful about delivering value to our clients and delivering value to our shareholders, and not in search of so-called low-calorie AUM.”

Encouraged by Dibadj’s focus on the end user, Janus Henderson employees have begun talking about themselves as responsible for 60mn investors, some directly and others through financial advisers or retirement plans. That resonates with recent arrivals such as Michael Schweitzer, whom Dibadj recruited from Capital Group. “He leads by example . . . The client focus is beyond anything I have ever seen,” said Schweitzer, who heads the North American client group. “No one outworks Ali.”

Janus Henderson is actively looking for acquisitions but Dibadj is wary of overpaying. This year, the asset manager has announced two deals so far: the National Bank of Kuwait’s emerging markets private capital business, and Tabula Investment Management, a European ETF provider. 

Both are areas the new strategy prioritised, Dibadj explained, using a quote from ice hockey great Wayne Gretzy that betrays his Canadian upbringing: “We want to skate to where the puck is going, not where it has been.”