In a move that will give both

Janus

fans and critics dry powder, executives and money managers at the Denver fund shop will sell more than half their shares in the firm back to Janus and its parent,

Stilwell Financial

(SV)

, according to a Stilwell news release Wednesday evening.

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The news also raised concerns that some top-shelf managers may be cashing in their chips on their way out.

Stilwell announced a two-pronged stock-repurchase plan. Janus will offer to buy up to 50% of Janus employees' closely held shares in the firm. If all eligible shares are bought, Janus will acquire 143,000 shares for roughly $145 million. Also, Stilwell announced plans to purchase about 197,000 Janus shares for roughly $200 million.

After the transaction, assuming all eligible shares change hands, Janus employees' stake in the firm will drop from about 6% to 2%. Janus founder Thomas Bailey, who sold about half his Janus stock last month for some $610 million, still owns 6.2% of the firm. Stilwell's stake in Janus will rise to 91.4%, according to the company's announcement.

Janus was last year's top-selling fund shop on the heels of sparkling 1999 returns when its tech-heavy stock funds rang up a more than 80% return on average. The gush of new cash forced the firm

to shutter half its stock funds. But the

Nasdaq Composite's

meltdown has hit Janus' stock funds hard. On average, they lost more than 17% last year, compared with a 9.1% loss for the

S&P 500

, according to Chicago fund-tracker

Morningstar

. Thanks to slipping returns and its fund closures, many of the firm's funds are

losing more money to redemptions than they're getting from current or new investors.

The firm follows a concentrated style of investing, with many funds owning similar stocks in the tech and telecom sectors. Given the firm's $164 billion in retail stock and bond fund assets at year-end, critics have wondered if the firm's stakes in sagging tech stocks are too big for them to adjust quickly.

In the release, Stilwell President and Chief Executive Landon Rowland said the scarce, pure Janus shares will be used to retain and attract portfolio management talent. That said,

Lehman Brothers

downgraded Stilwell's shares on Thursday morning, saying the insider selling could presage portfolio management defections -- a key concern at all fund shops and Janus in particular given its reliance on its high-profile roster. In a research note, Lehman cautioned that additional defections of key employees "would likely accelerate the current downward spiral at Janus."

Janus officials took a different tack. "There is no indication that any portfolio managers are leaving Janus," says spokeswoman Shelley Peterson. "The folks around here view this as a big postive. This gives us the ability to attract and retain the most talented people and it's a situation where we can give more people access to these shares." Janus is not disclosing which fund managers are selling their Janus shares.

The news comes on the heels of layoffs that included Janus trimming its customer service staff, and the departures of former chief investment officer

Jim Craig and Janus Capital chief financial officer

Steve Goodbarn. Janus was bundled with

Berger Funds

and recordkeeper

DST Systems

under the Stilwell umbrella last year, when railroad concern

Kansas City Southern

spun off its financial subsidiaries. Before the spinoff, Janus officials

lobbied publicly to be brought to the market on their own and relations between Janus and its parent have been chilly.

At the end of last year the Janus was the fifth-largest fund shop, according to Boston fund consultancy

Financial Research

.