Scott Schoelzel has managed money at Janus for 14 years, seeing its rocketlike rise, dramatic drop and quiet comeback.

Along the way, he's racked up a stellar track record for the Janus Twenty: It's in the top 10 percent of its peers in the one-year period, the top 1 percent in the three- and five-year periods, and the top 2 percent in the 10-year period that ended in July.

Now, after 10 years managing the $10 billion fund, Schoelzel and Janus will part ways.

"Very few times do you have an opportunity to go out on top," the 49-year-old Schoelzel said Wednesday in an interview with the Rocky Mountain News at the Janus offices in Cherry Creek.

Schoelzel, who also runs the Janus Adviser Forty Fund, the Janus Aspen Forty Portfolio and other products, said he wanted to stick around until the team did what "it takes to rebuild Janus' reputation and to re-establish Janus' stature in the investment community. It's virtually indisputable that has happened."

"I feel my bargain with the firm is now complete," he added.

The news is a loss for Janus, which is dealing with significant turnover in its investment management ranks. Schoelzel will become the 12th portfolio manager to take off since early 2006.

But few had the tenure and track record of Schoelzel, whose performance enabled Janus to attract significant institutional money at a time when many retail investors kept heading for the exits.

In an interview Wednesday, Janus Chief Investment Officer Jonathan Coleman said: "The legacy Scott leaves - words don't do it justice. As a stock picker, and as an observer of so many macro trends distilled into individual stock selections. And in the dark days there was no bigger cheerleader for Janus. There still isn't."

In a statement, Janus CEO Gary Black said Schoelzel "has had a stellar investment career" and said his track record "distinguishes him as one of the premier investors in our industry."

To replace Schoelzel, Janus has selected Ron Sachs, another portfolio manager with gaudy numbers.

The 40-year-old Sachs, who joined Janus in 1996, has managed the Janus Orion Fund since it launched in 2000. Orion, a multicap growth fund, ranks in the top 2 percent of its peers for the one-year period ended July 31, the top 1 percent in the three-year period and the top 1 percent in the five-year period.

Sachs will be replaced at Orion by John Eisinger, a research analyst who contributes to the Janus Research Fund.

Schoelzel said he'll take time off before he figures out his next step but has "not given one iota of thought" to opening his own money-management firm.

"It would have been easy to leave Janus when we were having issues. We were not everyone's favorite mutual fund company at the time," he said.

Janus was the star of the mutual fund business during the stock market boom of the 1990s, drawing in billions of dollars of new money. But the growth-focused shop concentrated its investments in too many highflying names. When things turned south in the 2000-2002 bear market, many Janus funds fell from the top of the industry to among the bottom performers.

Then, in 2003, New York Attorney General Eliot Spitzer identified Janus as one of several fund families that allowed big institutional investors to "market-time" the funds, obtaining preferential returns at the expense of ordinary investors.

Janus ultimately settled the case for $226 million, but the scandal claimed CEO Mark Whiston, the successor to founder Tom Bailey. And the billions in outflows that began in the bear market continued even as Janus turned its performance around. After peaking at $330 billion in assets under management in March 2000, Janus sees its assets at $190 billion today.

Only in 2007's second quarter, after several years of peer-beating performance, is the Janus family able to report more money coming in than going out. Net inflows were $1.5 billion in the second quarter, excluding the company's successful Intech mathematical-investing subsidiary. It was the first time since 2001's second quarter in which the Janus family saw inflows.

Schoelzel said that over the course of his 10 years managing the Janus Twenty, the company has "moved from a firm with an iconic founder to a firm that's now being corporately managed. There are positives and negatives to both, but that's the biggest change."

Bailey, who left the company several years ago and recently stepped down as a trustee of the Janus funds, hired Schoelzel.

"I'm a big Scott Schoelzel supporter," he said. "He was a great asset to Janus, and I think it's a loss for the shareholders, although I do think his successor is a competent fund manager and I expect him to do a great job."

Bailey said he doesn't think Schoelzel is leaving money management for good.

"I expect him to be back in some kind of venue," he said. "I'm not sure what that will be."

Scott Schoelzel by the numbers

• Total return rankings for Janus Twenty, compared with its peers':

One-year 10th percentile 68th out of 720

Three-year 1st percentile 2nd out of 614

Five-year 1st percentile 2nd out of 501

10-year 2nd percentile 4th out of 205Periods Through July 31. Source: Lipper Data Provided By Janus

Janus

JNS: NYSE

$27.40

+ $1.32

The departed

Key Janus executives, in addition to Scott Schoelzel, who have left in 2007:

• Dave Martin, chief financial officer

• John Bluher, general counsel

• John Zimmerman, managing director of institutional asset management

Portfolio managers who have left since 2005:

• Ed Keely, Institutional separate accounts

• Mike Lu, Janus Global Technology

• Tom Malley, Janus Global Life Sciences

• Jeanine Morroni, Janus Government Money Market

• Sharon Pichler, Janus Federal Tax-Exempt, Money Market

• Karen Reidy, Janus Balanced, Core Equity

• Blaine Rollins, Janus Fund

• Ron Speaker, Janus Flexible Income

• Claire Young, Janus Olympus

• Brad Slingerlend, Janus Global Technology

• Doug Kirkpatrick, International equity

patonj@RockyMountainNews.com or 303-954-2544 or milstead@Rocky MountainNews.com or 303-954-2648

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