Janus Henderson(US:JHG)2024-02-01 18:49Financial Data and Key Metrics Changes - In 2023, net outflows improved significantly to $700 million from $31 billion in 2022, driven by lower redemptions and strategic wins in global institutional and North American intermediary businesses [8] - Total Assets Under Management (AUM) increased by 17% in 2023, ending at $334.9 billion, which is 7% higher than the average AUM for the year [10] - Adjusted earnings per share (EPS) rose by 28% to $0.82 in Q4 compared to the prior quarter, benefiting from stable management fees and strong performance fees [13][36] Business Line Data and Key Metrics Changes - Net outflows for the equity segment were negative $3.2 billion in Q4, while fixed income saw net inflows of $1.7 billion, contributing to a total of $7.2 billion in positive net flows for 2023 [23][24] - The U.S. intermediary channel achieved break-even flows for the first time in seven years, with a 1% organic growth rate [45] - Institutional net outflows were $2 billion in Q4, compared to $400 million in Q3, indicating challenges in this segment [21] Market Data and Key Metrics Changes - The U.S. intermediary market showed strong performance, with significant inflows in specific strategies such as AAA CLO ETF and mortgage-backed security ETF [20] - EMEA and LATAM markets faced outflows, but the U.S. intermediary region experienced positive flows, indicating a regional disparity in performance [19] Company Strategy and Development Direction - The company is focused on three strategic pillars: protecting and growing core businesses, amplifying strengths, and diversifying where clients provide opportunities [7][42] - A significant emphasis is placed on the U.S. intermediary business, with investments in branding and talent to enhance client engagement [44] - The company is actively pursuing M&A opportunities to diversify its offerings, with a disciplined approach to cultural fit and strategic alignment [52] Management's Comments on Operating Environment and Future Outlook - Management noted that while 2023 saw a rebound in global markets, headwinds remain due to the consequences of historic rate hikes [6] - The company is optimistic about the potential for inflows in fixed income as clients seek diversification and yield, indicating a favorable outlook for this segment [72][75] - Management emphasized the importance of a strong culture and strategic execution to drive organic growth and deliver results for stakeholders [55][62] Other Important Information - The company returned $321 million to shareholders in 2023 through dividends and share buybacks, reflecting a strong cash flow generation and stable balance sheet [9][31] - The adjusted non-compensation operating expenses increased by 8% compared to the prior quarter, primarily due to higher general and administrative expenses [28] Q&A Session Summary Question: Can you expand upon the fixed income or active ETF strategy? - The active ETF franchise has crossed $12 billion in AUM, focusing on democratizing institutional investment strategies for retail channels [66] Question: What has been the biggest hold up in M&A transactions? - The company remains active in evaluating M&A opportunities, ensuring cultural fit and alignment with client needs as key considerations [68][69] Question: What is the outlook for inflows in the fixed income business? - The company is well-positioned to capture inflows in fixed income due to attractive performance and product breadth, with clients increasingly recognizing the value of fixed income [72][75] Question: How broad-based is the progress in the U.S. intermediary? - The success in the U.S. intermediary is broad-based, with improvements across various products and strategies, not limited to just a few ETFs [81] Question: How are you thinking about the EMEA business positioning? - The company aims to leverage successful strategies from the U.S. to improve performance in the EMEA market, which has faced significant headwinds [92][95] Question: What are the opportunities for active equity ETFs? - The company is focused on democratizing institutional investment strategies across various vehicles, including active equity ETFs, while remaining vehicle-agnostic [100]