Janus Henderson(JHG) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Assets under management (AUM) increased by 6% to $382.3 billion, a 24$400 million, marking the third quarter of positive flows in the last seven quarters [7] - Adjusted diluted EPS increased by 42% to $0.91 compared to the same period a year ago, driven by market gains, net inflows, and operating leverage [8] - The company generated positive organic net new revenue in the third quarter, reflecting success across various strategies and regions [15] Business Line Data and Key Metrics - Investment performance remains solid, with at least two-thirds of AUM beating respective benchmarks over one-, three-, five-, and 10-year periods [6][31] - Equity flows were negative$1.5 billion, but gross sales improved by 39% year-over-year [40] - Fixed income net inflows were $2.2 billion, with fixed income ETFs contributing$2.4 billion in positive flows [41] - Alternatives capability saw net inflows of $100 million [43] Market Data and Key Metrics - The U.S. intermediary channel delivered positive net flows for the fifth consecutive quarter, with inflows in active ETFs, U.S. mid-cap growth, and multi-sector credit [36] - EMEA and Latin America intermediary segments saw positive net flows for the second consecutive quarter, while APAC intermediary net flows were the best in almost three years [38] - Institutional net outflows were$500 million, but the pipeline is showing signs of improvement [38] Company Strategy and Industry Competition - The company's strategic vision focuses on three pillars: Protect & Grow, Amplify, and Diversify [9] - Under Protect & Grow, the company is upskilling employees and utilizing data to drive market share improvement [10] - Under Amplify, the company launched its first active ETF in Europe and announced a partnership with Anemoy and Centrifuge for blockchain-based tokenized funds [11][12] - Under Diversify, the company expanded private market capabilities with acquisitions like NBK Capital Partners and Victory Park Capital [13][14] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's strong balance sheet and financial results, enabling investments in the business and returning cash to shareholders [9][22] - The company expects the Victory Park Capital acquisition to be neutral to accretive to EPS in 2025 [30] - Management remains optimistic about the company's ability to deliver consistent growth over the long term, supported by solid investment performance and strategic initiatives [62][63] Other Important Information - The company announced a partnership with the American Cancer Society, donating 50% of management fee revenue from its government money market fund to support cancer research [16][17] - The Board authorized an additional $50 million for share buybacks, bringing the total authorization to$200 million [22][60] - The company successfully issued $400 million in senior unsecured notes at a 5.45$1 billion in AUM [74] - Management believes the ETF franchise will continue to grow, with plans to expand into Europe and other regions [77] Question: Performance Fees and Buyback Strategy - Performance fees are expected to improve in Q4, driven by U.S. mutual fund performance fees and hedge fund performance [93][95] - The company plans to continue returning capital to shareholders through dividends and buybacks, while also considering inorganic growth opportunities [98][100] Question: Insurance Channel and Private Credit - The company sees significant opportunities in the insurance channel, particularly with the addition of Victory Park Capital's asset-backed lending capabilities [103][108] - Victory Park Capital's expertise in legal finance and insurance services is expected to open new opportunities for the company [153] Question: Multi-Asset Flows and Integration of Acquisitions - The company is optimistic about the multi-asset segment, particularly the balance fund, due to strong performance and market conditions [127][129] - Acquisitions like Victory Park Capital will be integrated strategically, focusing on areas where the company can add value, such as distribution and compliance [134][137] Question: Distribution and Client Experience - The company has made significant changes to its distribution strategy, focusing on people, product, process, and incentives to drive growth [141][143] - Management aims to enhance client experience through deeper relationships and better support for investment needs [145][146] Question: Growth Drivers for Victory Park Capital - Victory Park Capital's growth will be driven by its asset-backed opportunistic credit funds, legal finance, insurance services, and structured financing solutions [152][154]