2 Asset Managers Jefferies Is Watching

In a report published Wednesday, Jefferies analysts gave their 1Q15 preview for Asset Managers, stating that seasonality had modestly helped performance. Analyst Daniel T. Fannon maintained a Buy rating on both

and

. The price target for TRWO was at $96, while that for JNS was at $21. "EPS revisions varied significantly by company with no one discernible trend dominating…Unlike the results of 2014, active management performance has at least gotten off to a good start in 2015," Fannon said. In the report Jefferies noted, "Although we see little evidence of slowing demand for ETFs and the likes of non-traditional fixed income products ahead of an eventual rising interest rate environment, active managers have battled back with almost 60% outperforming their respective benchmarks through the 1st three months." For Janus Capital, the EPS estimates for 1Q15 and F2015 have been maintained at $0.20 and $0.94, respectively. The analysts expect total fund inflows to cross $1.5B, down from $1.9B in 4Q14 and -$1.7B in 1Q14. "We anticipate JNS to be one of the few, and perhaps only, firm to generate positive U.S. active equity inflows in the period," the analyst said. "Fixed income remains the primary driver of net inflows; however, equity trends continue to improve. More specifically, the Global Life Sciences, Contrarian, Enterprise, Venture, and Triton funds have all begun capturing flows and are well positioned to continue competing for market share given the performance track records," Fannon added. For T. Rowe, the EPS estimate for 1Q15 was at $1.13. The analyst expects AUM to have ended the quarter with 3.5 percent growth to $772B, "while average AUM will be up a more modest 2.5% to $759B." "For 1Q we are anticipating +$3.0B of retail inflows. 1Q is seasonally the strongest but this does not appear to be the case this year as net flows have been relatively weak the first two months of 2015 according to Morningstar, totaling just +$700M," Fannon wrote. The analyst expects "relatively flat" net flows within the institutional segment, which "remains somewhat challenging." Earlier in the current quarter, T. Rowe had unexpectedly announced a special dividend of $2.00. The company's share buybacks have been "relatively subdued" for a couple of years. Since the company has announced a special dividend, its share repurchases could be modest.