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Janus' Jim Craig resigns
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August 9, 2000: 11:00 a.m. ET
A leading architect and star stock picker will step down in September
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NEW YORK (CNNfn) - Jim Craig, a top executive at Janus Funds who became a star for picking winning growth stocks, will resign in September to manage money for a private charitable foundation, he said Wednesday.
Craig's resignation is the first major departure since Janus was spun off from parent Kansas City Southern Industries along with its other financial services businesses into a new entity called Stilwell Financial. Janus had fought the move and wanted to be on its own. Craig said, however, that his decision to leave was personal and unrelated to the spinoff.
Shares in Stilwell (SV: Research, Estimates) were taking a hit, trading down 3-3/4 at 44-1/4 by midday.
Craig, 44, chief investment officer and director of research, joined the Denver-based fund family in 1983. During his 17-year tenure, he managed four high-profile Janus funds, including Janus Fund, Janus Worldwide, Janus Venture Fund and Janus Balanced Fund. Along with former Janus manager Tom Marsico, he is credited with guiding Janus to becoming one of the fastest-growing fund companies.
A team of top managers and executives will take over Craig's responsibilities, including managers Jim Goff, Helen Young Hayes, Warren Lammert, Scott Schoelzel and Blaine Rollins, and Janus chief executive officer Tom Bailey.
Craig sees no downside for firm or funds
Craig insists his leaving won't have any negative effect on Janus investors, nor will the company suffer from his departure.
 "My contribution will be easily borne by the remainder of the people," he said in a press conference, noting that he does not expect the firm's style or performance to change.
Since assuming the position of CIO, he explained, "My role has been more of an adviser or confidant." That function can be handled ably by the star-studded investment committee, he believes, and he does not anticipate his leaving will "materially affect (Tom Bailey's) daily routine."
When asked who would replace him as a leader, he said, "There's no need to have a replacement."
Janus currently does not have any plans to hire a CIO. Noting that Bailey "really does believe in a very flat organization," the executive investment committee will maintain Craig's duties indefinitely, Janus spokeswoman Shelley Grice said.
Craig rejected any notion that Janus funds might suffer in his wake. Janus portfolio managers, he explained, are given a great deal of independence and responsibility for their funds and that Janus is "not a top-down-directive type of firm."
 Due to portfolio managers' leverage to make all key investment decisions, "(my departure) is not at all disruptive to the investment management of their funds," he added.
Russ Kinnel, an analyst at fund-tracker Morningstar who praises Craig for guiding Janus through the past decade, doesn't anticipate there will be a change in investment style either.
But he doesn't see the departure as a non-event. "It matters," he said.
"He really did things differently," Kinnel said. "And it worked well for investors and the company."
While Craig leaves a lot of good people behind, "their plates are pretty full," Kinnel said. "It's a question of time management. Craig had the experience and responsibility to take the long-term, level-headed view."
Nevertheless, Kinnel expressed confidence that the firm would manage the departure very competently.
One less mentor
Craig did acknowledge that his announcement came as a surprise to some of the younger analysts and managers at Janus and said his decision was initially viewed as "not a positive" from their perspective, although they are happy for him.
Nevertheless, he said, "It's not that big a deal," explaining that the firm's strength is in the sum of its high-quality players. "One person doesn't have all that much influence ... There are a lot of people who form the strength of this firm."
He also downplayed the notion that his investment style was a beacon for many of the best managers at the firm.
"My views may have had some influence ... But their views have influenced me as well," Craig said.
'Growth is best bet long-term'
Craig's departure comes at a time when aggressive growth stocks have been struggling and some funds at Janus have been performing at the bottom-half of their peer groups, Kinnel said. Janus Venture, for example, is down 20.5 percent year to date as of Aug. 8.
 Craig foresees more volatility for growth stocks in the months ahead, characterizing this period as one of indigestion in which the excesses of the past year are being flushed out and the market is punishing those companies whose growth is lagging.
"The market is more severely discounting no growth and is willing to pay more for solid growth," Craig noted. But long-term, he said, "growth will be the place to make outsized gains."
Doing good with all he's got
Married to a social worker, Rebecca Craig, for 25 years, Craig said of his decision to start the Craig Family Foundation, "We want to do something different now."
The foundation's mission is to aid disadvantaged people in the Denver area.
"I've spent half my life making money for other people to retire and send their kids to college," Craig said in an earlier statement. "I'm looking forward to using my skill in making money for this new pursuit." 
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