(Bloomberg) -- Janus Henderson Group Plc approached credit firm Kennedy Lewis Investment Management about a possible deal as the money manager looks to move beyond its roots in stocks and bonds.

The asset manager explored buying Kennedy Lewis in recent months, but the overture in late 2023 didn’t lead to a transaction, according to people familiar with the matter. Janus Henderson’s interest underscores its push to make a splash in private credit and its challenges finding the right fit. 

Traditional asset managers have lost dollars and clout to index fund giants that mirror markets for low fees. Meanwhile, smaller shops face stiff competition and fee pressure from powerhouses — such as BlackRock Inc. — that reach across all corners of finance, from infrastructure to lending. This environment is ratcheting up a race among asset managers for a piece of the action in the fast-growing and lucrative private markets. 

Janus Henderson Chief Financial Officer Roger Thompson said at a conference Wednesday that the firm didn’t find the right deal in 2023 and expects to do something in private credit this year.

“We will do the right deal at the right price,” Thompson said at the UBS Financial Services Conference, without mentioning Kennedy Lewis. “We are not going to do the wrong deal or at the wrong price.”

Janus Henderson Chief Executive Officer Ali Dibadj has been exploring buying a private credit firm or poaching an entire team to do financing deals as he aims to revive the $335 billion firm. Shares of Janus Henderson have dropped roughly 35% from their 2021 peak. The stock has fared better in the past year, gaining about 12%.

Spokespeople for Janus Henderson and Kennedy Lewis declined to comment.

Turnaround Chief

London-based Janus Henderson was formed in 2017 from the transatlantic merger of Janus Capital and Henderson Group, and as of late last year, clients had yanked about $130 billion from the firm.

Dibadj took over in June 2022 as Janus Henderson’s turnaround chief after Nelson Peltz’s Trian Fund Management built a stake in the firm and pushed for change. The new CEO told Bloomberg last year that active management in all forms still has a place in investor portfolios. 

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As he looks to expand in the business of hedge funds and private credit, Dibadj has weighed about 100 possible opportunities — half of which are alternative asset managers. 

Kennedy Lewis was launched in 2017 by David Chene, formerly of distressed debt shop CarVal Investors, and Darren Richman, an ex-senior executive at Blackstone Inc.’s credit business. The $14 billion firm has pushed into private credit and collateralized loan obligations. 

The alternative credit manager has been exploring a sale in recent months, Bloomberg reported. Most recently, the firm’s executives have been locked in a dispute with a former Kennedy Lewis chairman who left four years ago and is seeking a 15% stake in the company.  

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