Janus Henderson Group Plc Q1 FY2024 earnings call

Protect and Grow

• Focus on U.S. intermediary business with positive flows and progress in capturing market share. Working to improve EMEA and Latin American intermediary channels with early encouraging trends.

Amplify

• Emphasize institutional and diversified alternatives businesses, and product development like active ETFs in the U.S.

Acquisitions and Partnerships

• Pending acquisition of Tabula Investment Management to enter European ETF market and enhance partnership with U.K. and European clients. Strategic partnership with NBK Wealth and acquisition of NBK Capital to enter emerging markets private capital space. Progress with Privacore Capital in democratizing private alternatives for private wealth clients.

Investment performance was solid with at least 60% of AUM beating benchmarks over various periods; 1-year improved to 70% driven by equity and multi-asset. Total company flows were net outflows of $3 billion for the quarter. Higher fee intermediary channel had positive $1 billion in Q1, EMEA and Latin American intermediary flows improved. Institutional net outflows were $3.1 billion. Equity flows were negative $1.1 billion, fixed income had $100 million inflows, multi-asset had $800 million outflows, alternatives had $1.2 billion outflows. Adjusted diluted EPS was $0.71, a 29% increase compared to Q1 2023. Cash and cash equivalents were $900 million as of March 31, and a new share buyback program of up to $150 million was authorized.

Share Buyback

• Authorized a new share buyback program of up to $150 million to be completed by April 2025.

Business Investment

• Continue to invest in the business organically and inorganically, with M&A pipeline active to diversify the business where clients give the right to win.

• Market uncertainty with increasing investor expectations for higher-for-longer rate environment, stickier inflation, and geopolitical conflicts.
• Institutional redemptions impacting flows, such as large redemptions in global high-yield and global commodities enhanced index strategies.

Q: How you finance the NBK and Tabula deals, including potential future payments like earnouts, how much they cost in total and valuation when deploying capital strategically?

A: Financial terms not disclosed, relatively small upfront cash transactions, fully factored into calculations for buyback and other activities.

Q: Reasonable time period to replenish institutional backlog, and proactive measures to enhance the channel?

A: 12-18 month time frame, leading indicators positive, mindful of AUM quality, investing in people and changing organizational structure regionally.

Q: Vision for ETF franchise, road map for longer term?

A: Tabula acquisition allows entry into European ETF market, skating to where the puck is going, amplifying investment skill sets in vehicle-agnostic way, client-led, including equities and other asset classes.

Q: Steps to accelerate growth at NBK with private markets deal, vision for over time?

A: Origination skill set already strong, plugging into global distribution, partnership with NBK Wealth for cross-selling, great foundational building block for emerging market franchise.

Q: Investment capabilities at Tabula, similarity/difference to U.S. strategies, ESG?

A: Tabula has 9 UCIT ETFs, largely fixed income, opportunity to launch Janus Henderson product through platform, including fixed income and equity, with ESG elements.