UPDATE 1-Janus Capital Q4 net down 13 pct on costs, outflows

Jan 24 (Reuters) - U.S. asset manager Janus Capital Group Inc said fourth-quarter earnings fell 13 percent as costs rose and customers continued to pull cash from its funds.

Janus of Denver on Thursday reported net income of $31.2 million, or 17 cents per share, for the period, down from $35.7 million, or 19 cents per share, a year earlier.

Analysts surveyed by Thomson Reuters I/B/E/S on average had expected Janus to earn 14 cents a share in the latest quarter.

Janus' revenue rose by $1 million to $216.6 million. The gain was outpaced by operating expenses, which increased to $158.6 million from $145 million a year earlier, driven by higher compensation costs.

Janus is among a group of asset managers struggling to reverse steady outflows from mutual funds. These continued during the quarter, which Janus finished with $156.8 billion under management, down from $158.2 billion at Sept. 30.

Although market gains drove up assets by $2.1 billion in the quarter, Janus reported net outflows of $3.6 billion from long-term funds. Janus' traditional equity funds remained out of favor with investors, who pulled $2.7 billion from them in the quarter and withdrew another $1.6 billion from Janus' quantitative funds.

Janus did report in the quarter a net inflow of about $700 million to its fixed-income funds, an area it has been building up.