The big news this week was the capitulation of Stilwell executives to the crew at Janus. Little noted, though, was the likely disappearance of Berger from the scene. Though some reports mentioned the likelihood of Janus funds absorbing some Berger funds, nearly all overlooked the merging of the rest of the operations.

That move will likely cost most Berger employees, including the sales and marketing teams, their jobs. It will also end the legacy of Bill Berger who founded the firm in 1974 and died in 1999.

In touting the reorganization, Janus CEO-designate Mark Whiston explained that by taking out the Stilwell office the firm would be able to cut staff and reduce overhead. How much staff?

Whiston says somewhere in the neighborhood of 130 to 140 workers will be let go. None of those cuts are expected to come from the ranks of Janus, he added. Stilwell today employs roughly 25 people in its Kansas City office. All of those workers are expected to lose their jobs.

Yet, those statements leave 100 to 110 job cuts unaccounted for. A headcount at Berger shows that company has roughly 120 employees. The similarity in the two figures is probably not a coincidence.

Most likely, the cuts at Berger will not include portfolio managers. Instead, the axe will fall on the operations, sales and marketing staffs at the firm. Executives at the Denver firm realized this possibility in a statement this week.

"As the transaction is presently contemplated, Berger Financial Group, the investment adviser to the Berger Funds will no longer exist," said the firm in its statement.

If that happens, it may mark another market timing blunder by the folks at Janus.

The Berger name likely carries more value, both as a brand and in its people, than Janus cares to admin. The firm has its own sales force. Not ever having had the wind at its backs to the same degree Janus did that team is decidedly scrappier than its Janus brethren. The Berger crew also lacks the institutional arrogance found in the Janus shop.

For Janus, the Berger attitude could have been a breathe of fresh air. Sales for Janus will never again be as simple as answering the phones (at the peak of the market the phones were ringing so quickly that all Janus employees took turns answering them).

In the future, Janus wholesalers and institutional sales teams will also be burdened by the high-profile collapse of its investment strategy in 2000 and 2001.

For many investors the Janus brand is now closely tied to the collapse of the tech market and companies such as Enron and WorldCom. The sales teams will be forced to overcome this legacy and grind each new win out the hard way.

Indeed, the Berger name does not carry the baggage of the Janus name and its funds may be easier to distribute for that reason. Yet, the early consensus is that only the four Berger value funds will survive with their current management team and identity intact.

Just don't expect Janus insiders to see things this way.  

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