London-based Henderson Group will acquire Denver-based Janus Capital in a deal worth $2.6 billion.  These big name active management firms have been looking to cut costs so as to better compete with their low cost, passive fund competitors, like BlackRock and Vanguard Group.

 “For active managers, it’s a double whammy right now: rising costs and regulatory burdens are squeezing profit margins at a time when passive investments are taking assets away,” said Edward Jones analyst Kyle Sanders, who expects more large deals in the asset management industry as active managers try to become more global and cut costs.

The new combined money manager - Janus Henderson Global Investors PLC - will be headquartered in London, and will have more than $320 billion in assets under management.  Famed bond manager Bill Gross, who abruptly left Pimco and joined Janus in 2014, supports the deal and will continue to manage an unconstrained bond fund for the firm. 

After the merger, Dai-ichi will own a 9% stake in the combined entity that it plans to increase to at least 15%, the companies said.