Janus Henderson(US:JHG)2025-05-01 13:00Financial Data and Key Metrics Changes - Assets under management decreased by 1% to $373.2 billion, partially offset by $2 billion of positive net flows and favorable currency adjustments [6][9] - Adjusted diluted EPS increased by 11% to $0.79 compared to Q1 2024 [9][27] - Adjusted revenue decreased by 14% compared to the prior quarter but increased by 14% year-over-year due to higher management fees [22][27] Business Line Data and Key Metrics Changes - Net inflows for the quarter were $2 billion, a significant improvement from net outflows of $3 billion a year ago, driven by a 44% increase in gross sales [13][19] - Fixed income net inflows were $5.6 billion, compared to $5.2 billion in the prior quarter, with active fixed income ETFs leading the positive flows [19][20] - Equity flows were negative $4.2 billion, reflecting a challenging environment for active equities [19] Market Data and Key Metrics Changes - The U.S. intermediary channel experienced positive net flows for the seventh consecutive quarter, with contributions from various strategies including active ETFs and U.S. mid-cap growth [15][16] - Asia Pacific intermediary net flows were positive for the third consecutive quarter, marking the best result in over three years [17] - Institutional net inflows were $800 million, including $600 million of ETF net inflows [17] Company Strategy and Development Direction - The company announced a multifaceted strategic partnership with Guardian Life Insurance Company, managing a $45 billion investment-grade public fixed income portfolio [4][41] - The strategic vision focuses on protecting and growing core businesses, amplifying strengths, and diversifying where clients provide opportunities [31][32] - The company aims to leverage M&A as a means to amplify and diversify its business, with a focus on high-growth areas [33][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged tumultuous market conditions but expressed confidence in navigating uncertainty due to a global footprint and diverse client base [5][6] - The long-term investment performance remains solid, with over 65% of assets beating benchmarks over three, five, and ten-year periods [8][12] - Management emphasized the importance of active management in capitalizing on market dislocations and opportunities [8][46] Other Important Information - The company announced a 3% increase in the quarterly dividend and a new share buyback authorization of up to $200 million through April 2026 [9][29] - Adjusted operating expenses decreased by 9% to $330 million compared to the prior quarter, reflecting cost discipline [23][25] - The company expects to maintain a tax rate on adjusted net income in the range of 23% to 25% [27] Q&A Session Summary Question: Thoughts on CLO ETF capacity and liquidity - Management noted that they hold about 80% market share in the CLO ETF category and have seen stable flows despite market volatility [52][54] Question: Next steps for institutional channel performance - Management highlighted a significant increase in RFP activity and consultant support, indicating a positive outlook for institutional flows [58][60] Question: Opportunities with the Guardian partnership - Management expressed optimism about enhancing Guardian's investment capabilities and leveraging their distribution platform for growth [66][70] Question: M&A interest and market conditions - Management indicated a very active M&A environment and a disciplined approach to potential acquisitions, with a narrowing bid-ask spread [72][74] Question: Organic growth expectations for the Guardian AUM - Management expects continued growth in the $45 billion AUM from Guardian, aligning with their growth trajectory [78][80] Question: Active management opportunities in 2025 - Management sees significant opportunities for active management amidst market dislocation, emphasizing their global reach and investment expertise [86][90] Question: Regional demand differences in intermediary and institutional channels - Management noted stability in the institutional channel and ongoing strength in Asia and Latin America, despite some concerns in EMEA and the U.S. [95][96]