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Jim Craig

, the architect of top-selling

Janus Capital's

high-octane and highly successful growth investment style, will leave the Denver firm at the end of September to work for a family charitable foundation.

"Essentially I'm trading working at Janus for working for my wife. We'll see how that goes," says Craig, 44. The high-profile executive and former portfolio manager plans to manage money for a new charitable foundation focusing on Denver causes that his wife, a social worker, will direct.

Craig's departure comes at an awkward time for Janus. Its tech-heavy, concentrated investment style has cooled since last year, when the firm's fund performance and sales led the industry.

His departure also raises questions about the high-profile growth shop's future. Craig denies his resignation was triggered by the firm's public

dust-up with former parent

Kansas City Southern

(KSU) - Get Kansas City Southern Report

. Janus executives bitterly opposed being bundled with

Berger Funds

and

DST Systems

, a mutual-fund record keeper, in a new company,

Stilwell Financial

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( SV), that was spun off from the railroad company in July. (Stilwell shares were down 8% midday.)

It remains to be seen whether Janus' young and talented portfolio managers, many of whom regard Craig as a mentor, will bolt as well. Craig says he will sell his Janus shares back to the firm so they can be used to compensate and hold on to the managers he has mentored. Those shares, distinct from Stilwell shares, were issued only to a few top executives and fund managers.

Craig, who was Janus' chief investment officer and director of research, will be replaced by a committee of the firm's top managers, The list includes Jim Goff (

(JAENX) - Get Janus Henderson Enterprise T Report

Enterprise), Warren Lammert (

(JAMRX) - Get Janus Henderson Research T Report

Mercury), Blaine Rollins (

(JANSX)

Janus), Scott Schoelzel (

(JAVLX)

Janus Twenty), Helen Young Hayes (

(JAOSX) - Get Janus Henderson Overseas T Report

Overseas and

(JAWWX) - Get Janus Henderson Glob Research T Report

Worldwide) and chief executive officer Tom Bailey.

The firm's aggressive investment style is unlikely to change, says Craig. "There will be nary a ripple in Janus' operations over" the resignation, he said during a Wednesday conference call with reporters.

Still, his departure is a big loss for Janus.

Craig, 44, joined Janus in 1983 as an analyst. He has managed several Janus funds in the past, including the flagship Janus fund,

(JAVTX) - Get Janus Henderson Venture T Report

Venture, Worldwide, and

(JABAX) - Get Janus Henderson Balanced T Report

Balanced, but he handed over the reins to younger colleagues in recent years. Named chief investment officer in 1995, he only fully relinquished his portfolio management responsibilities in December. Over the years, he has hand picked what has become one of the industry's most enviable fund-manager lineups.

"You can't underestimate his influence in getting Janus' funds to be more aggressive in these past years. He got everyone to make big bets on their top holdings and ignore the price tags," says

Morningstar

senior analyst Christine Benz, who covers Janus' funds. "I think the key question for Janus shareholders is can

the new committee run the business as well as they've run their funds?"

Indeed, until this year Janus' funds have been on a tear. In 1999 the average Janus stock fund posted a stunning 81% return and the firm's assets under management more than doubled. Today, Janus manages $300 billion, and is the fifth-largest fund company, according to

Financial Research

of Boston. In fact, the firm's funds are so popular that nearly half are

closed to new investors because the portfolio managers couldn't handle the flood of cash.

All 10 of the firm's stock funds that have three-year records are beating the average return for their categories, according to Morningstar. Most fund shops are thrilled when more than half their funds beat their peers. But this year the firm's strategy of making big bets on a relatively thin band of fast-growing stocks hasn't paid off.

At the end of April, the most recent portfolio information available, Janus had a

huge bet on telecommunications stocks in general and cellular phone titan

Nokia

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in particular. At that point, seven of the firm's 15 stock funds had

Nokia as their top holding. The stock is down more than 18% so far this year.

In January, Janus bought $930 million worth of online healthcare concern

Healtheon/WebMD

(HLTH)

at 62 a share. The stock traded at 12 1/4 Wednesday morning.

Those kinds of results for some major picks have slowed Janus' white-hot funds. So far this year, just three of the firm's 14 stock funds are beating their category averages, according to Morningstar. Many are getting their first look at life from the middle or back of the pack, rather than from the front.

"Last year we saw unbelievable performance, and we've seen a correction in some of those names this year," Craig says, adding that the firm will stick to its high-powered growth style.