Janus Henderson(US:JHG)2021-05-01 10:51Financial Data and Key Metrics Changes - The company's AUM rose 1% to $405 billion, despite negative net flows of $3.3 billion [7][9] - Adjusted EPS decreased compared to the prior quarter but was up 52% year-on-year, at $0.91 for the quarter [9][26] - Adjusted operating income was $202 million, down 13% from the prior quarter but up 22% year-on-year [26][32] - Adjusted revenues decreased 2% compared to the prior quarter, influenced by strong performance fees in the previous quarter [25][27] Business Line Data and Key Metrics Changes - Fixed Income saw positive flows of $400 million, while Equities experienced net outflows of $1.5 billion, primarily from U.S. mid and SMID cap growth strategies [20][22] - Multi-Asset inflows were $800 million, driven by strong performance in the balanced strategy [22] - Alternative outflows were $900 million, with $840 million attributed to the UK Property Fund reopening [23] Market Data and Key Metrics Changes - Intermediary channel net inflows were $1.1 billion, with gross sales of $16.5 billion, marking the best quarter ever [17] - Institutional net outflows were $3.5 billion, with lower gross sales compared to the fourth quarter [18] - Self-directed channel saw net outflows of $900 million for the quarter [19] Company Strategy and Development Direction - The company aims for consistent organic growth, excluding the quant equity business, and is focused on improving flows [8] - Strategic decisions were made to right-size the product portfolio, particularly in the Perkins team, to align with client needs [21] - The company is cautiously expanding its ESG strategies, focusing on quality and infrastructure development [64][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the intermediary business, particularly in Europe, and noted positive trends in various strategies [53] - The company anticipates stronger performance fees in the second quarter, driven by good investment performance [44][30] - Management acknowledged the challenges in the U.S. mid and SMID cap growth space but highlighted the overall strength of the intermediary channel [76] Other Important Information - The company completed $230 million in share buybacks and announced a 6% increase in the quarterly dividend to $0.38 per share [10][37] - Cash and cash equivalents were $824 million as of March 31, a decrease primarily due to annual variable compensation payments [35] Q&A Session Summary Question: How to leverage increasing performance fees for shareholder value? - Management highlighted the diversity of performance fees and the expectation of regular performance fees at a decent level [42][43] Question: Steps to improve self-directed channel results? - Management mentioned early advertising efforts and emphasized that growth will primarily come from Intermediary and Institutional channels [45][46] Question: Impact of Dai-ichi divestment on flows? - Management confirmed that the divestiture was successful and the Japanese business saw slight growth [48][49] Question: Initiatives to achieve net positive flows excluding quant? - Management indicated that strong investment performance, risk management, and client experience are key to achieving net positive flows [50][51] Question: Tax rate guidance for the rest of the year? - Management maintained guidance of a tax rate between 23% to 25% for the year [56][57] Question: Plans for sustainable investing strategies? - Management acknowledged a cautious approach to ESG but is building teams and infrastructure to support growth in this area [62][64] Question: Fixed Income flows lower than previous quarters? - Management noted that while there were positive flows, the overall market growth was slow, impacting momentum [69] Question: Institutional pipeline and sources of outflows? - Management confirmed a healthy pipeline with diverse products, while INTECH was a significant source of outflows [89][92]