Janus Henderson(US:JHG)2023-08-02 16:51Financial Data and Key Metrics Changes - Assets under management increased by 4% to $322.1 billion, up 12% since the beginning of the year [32] - Adjusted operating income increased by 15% over the prior quarter to $121.5 million in Q2 [29] - Adjusted diluted EPS was $0.62 [29] Business Line Data and Key Metrics Changes - Institutional net inflows were $1.9 billion, down from $6.9 billion in the first quarter [24] - Fixed income net inflows were $1 billion compared to $3.6 billion in the prior quarter [39] - Alternatives capability experienced net outflows of $800 million, primarily from multi-strategy and absolute return strategies [27] Market Data and Key Metrics Changes - US intermediary flows were virtually flat, with significant improvements in net outflows compared to the same period last year [37] - Retail flows continued to be negative, especially in EMEA [33] - EMEA intermediary experienced challenges due to higher interest rates and recessionary fears [67] Company Strategy and Development Direction - The company is focused on three strategic pillars: Protect & Grow, Amplify, and Diversify [46] - A joint venture with Privacore was announced to tap into the democratization of private alternatives [49] - The company aims to deliver consistent organic growth over time, with expectations of one or two quarters of positive net flows over the next one to two years [20][89] Management's Comments on Operating Environment and Future Outlook - The management noted persistent macro headwinds, including an opaque economic outlook and higher interest rates [18] - There is optimism about rebuilding the pipeline and improving flows, despite acknowledging that progress will not be linear [19][89] - Management emphasized the importance of client service and the positive changes being made for clients [8] Other Important Information - The company expects net outflows in Q3 to be in the range of negative $3.5 billion to negative $5 billion [23] - Adjusted non-comp operating expenses increased by 13% compared to the prior quarter, primarily due to higher G&A and marketing expenses [29] - The company declared a quarterly dividend of $0.39 per share to be paid on August 30 [76] Q&A Session Summary Question: What factors contributed to the better-than-expected net flow quarter? - Management attributed the improvement to a culmination of efforts over the past year, including capturing market share in the US intermediary business [99] Question: How does the company view the potential for partnerships with insurance companies? - Management sees a real opportunity to provide skill sets to a broader insurance clientele and is increasing the number of insurance clients [122] Question: What is the outlook for flows in Q3? - Management expects challenges in the intermediary channel, particularly in EMEA, and anticipates negative flows in Q3 [121] Question: How is the company addressing internal transitions impacting flows? - Management acknowledged that transitions may increase short-term volatility but are necessary for long-term improvement [104]