Q1 2023 Janus Henderson Group PLC Shs Chess Depository Interests repr 1 Shs Earnings Call

May 3, 2023

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Operator: Good morning. My name is Candice, and I will be your conference call facilitator today. Thank you for standing by, and welcome to the Janus Henderson Q1 2023 results briefing. All lines have been placed on mute during the presentation portion of the call to prevent any background noise. After the speaker's remarks, there will be a question and answer period. In the interest of time, questions will be limited to one initial and one follow-up question. In today's conference, certain matters discussed may constitute forward-looking statements. Actual results could differ materially from the projected in the forward-looking statements due to a number of factors, including, but not limited to, those described in the forward-looking statements.

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Good morning.

My name is Cathy and I will be your corporate school still it takes tonight. Thank you Goodbye and welcome to the Johnson I understand that's cool top 2000 Twenty's great results briefing all lines have been placed on mute during the presentation portion of the colt to prevent any background noise. After the Speakers' remarks, there will be a question and.

Patriot in the interest of time questions will be limited to one initial and one follow up question and you guys called fast enough to discuss may constitute forward looking.

Statements actual results could be stopped materially from the project.

In the forward looking statements keeps a number of factors, including but not limited to those described in the forward looking statements. The risk factors section of the company's most recent Form 10-K and other more recent filings in the SEC.

Operator: The Risk Factors section of the company's most recent Form 10-K and other more recent filings made with the SEC. Janus Henderson assumes no obligation to update any forward-looking statements made during this call. Thank you. It is now my pleasure to hand the call over to Ali Dibadj, Chief Executive Officer of Janus Henderson. Mr. Dibadj, please go ahead.

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I understand you have no obligation to update any forward looking statements made during this cool thank.

Thank you. It is now my pleasure to hand, the call over to Ali Goodbye.

Chief Executive Officer, Janice Henderson Mr. Tobias. Please go ahead.

Ali Dibadj: Welcome, everyone, and thank you for joining us today on Janus Henderson's Q1 2023 earnings call. I'm Ali Dibadj. I'm joined by our CFO, Roger Thompson. In today's call, I'll start with some thoughts on the quarter before handing it over to Roger to run through the details. After Roger's comments, I'll provide a progress update against our strategic initiatives, and then we'll take your questions following those prepared remarks. Turning to slide 2. Market conditions have remained volatile and difficult to navigate. Recession fears, higher interest rates, banking sector worries, particularly regional banks, and increasing cautious market sentiment have all contributed to an uncertain market environment. Even with this market backdrop, we are pleased to have delivered a good set of results this quarter.

Welcome everyone and thank you for joining us today on Janus Henderson first quarter 2023 earnings call.

I'm joined by CFO Roger Thompson.

In today's call I'll start with some thoughts on the quarter before handing it over to Roger to run through the details after Roger's comments I'll provide a progress update against our strategic initiatives.

I will take your questions following those prepared remarks.

Turning to slide two.

Market conditions have remained volatile and difficult to navigate.

The recession fears are interest rates banking sector worries, particularly regional banks and increasing cautious market sentiment have all contributed to an uncertain market environment.

Even with this market backdrop, we are pleased to have delivered a good set of results this quarter.

Ali Dibadj: Assets under management increased 8% to $310.5 billion due to positive markets, FX, and $5.5 billion in net inflows. The quarterly flows are from improvements in all channels. Significant inflows into the institutional channel are the result of the hard work and dedication of teams across the firm, as well as nascent confidence among some of the most sophisticated clients and consultants in the world that our firm is on the right track. Last earnings call, I said that we would expect to deliver intermittent quarters of neutral to positive net flows as an indication that our strategic plan is taking hold, which is what happened this quarter. And while we are encouraged by the net inflows, one quarter does not make a trend.

Assets under management increased 8% to $310 5 billion.

We had a positive markets FX and $5 5 billion in net inflows.

The quarterly flows are from improvements in all channels significant inflows into the institutional channel are the result of the hard work and dedication of teams across the firm as well as nascent confidence amongst some of the most sophisticated clients and consultants in the world that are firm is on the right track.

Last earnings call I said that we would expect to deliver intermittent quarters of neutral to positive net flows as an indication that our strategic plan is taking hold which is what happened this quarter and while we are encouraged by the net inflows one quarter does not make a trend we are not at a point, where we can consistently deliver positive flow results from.

Ali Dibadj: We are not at a point where we can consistently deliver positive flow results from quarter to quarter yet. For example, we need to rebuild our institutional pipeline, which takes time. Our retail flows continue to be negative, and as part of our fuel for growth, there will be pockets of unprofitable AUM that we will look to exit, which will impact flows negatively. Again, there's reason to be encouraged by the efforts of our talented and hardworking Janus Henderson team, as manifested by our flow result this quarter, and there's still much work to be done to deliver organic growth over the long term consistently. We continue to expect 1 to 2 quarters of positive flows over the next 1 to 2 years. Turning to investment performance, it is solid in aggregate, with 70% of assets ahead of benchmark on a 3-year basis.

To quarter yet.

For example, we need to rebuild our institutional pipeline, which takes time, our retail flows continue to be negative.

Part of our fuel for growth there will be pockets of unprofitable AUM that we will look to exit which will impact flows negatively.

Again, there is reason to be encouraged by the efforts of our talented and hardworking Janus Henderson team as manifested by a flow result, this quarter and there is still much work to be done to deliver organic growth over the long term consistently.

We continue to expect one to two quarters of positive flows over the next one to two years.

Turning to investment performance is solid in aggregate with 70% of assets ahead of benchmark on a three year basis.

Ali Dibadj: It's during difficult times like these when our clients and their clients need our differentiated insights, investment discipline, and world-class service the most. We are in a period where money is no longer free, and going forward, differentiating between the good companies and bad companies, the haves and have-nots, will be the key to generating alpha. This is what our world-class investment teams in equities, fixed income, multi-asset, alternatives, and more around the world do, and it positions us well to deliver the best possible investment outcomes for our clients and their clients. Net net, our financial results are good, our strategy is starting to take hold, we have much work to do to become consistent, and we have a strong and stable balance sheet. I'll now turn the call over to Roger to run you through the details of the financial results.

It is during difficult times like these when our clients and their clients need our differentiated insights investment discipline and world class service that most we.

We are in a period, where money is no longer free and going forward differentiating between the good companies and bad companies, the haves and have nots will be the key to generating alpha.

This is what our world class investment teams in equities fixed income multi asset alternatives and more around the world do.

And it positions us well to deliver the best possible investment outcomes for our clients and their clients.

Net or financial results are good our strategy starting to take hold we have much work to do to become consistent and we have a strong and stable balance sheet.

I'll now turn the call over to Roger to run you through the details of financial results.

Roger Thompson: Thank you, Ali, and thank you again to everyone for joining us on the call today. Turning to slide 3 in investment performance. Investment performance versus benchmark is solid and improved over Q4, with at least two-thirds of assets beating their prospective benchmarks over all time periods. While we're pleased with the result, which includes the balance strategy moving back above benchmark on a one-year basis to go along with its strong long-term performance, the one-year fixed income performance still has work to do. Fixed income performance has improved over the first three months of 2023, but the one-year number continues to be impacted by the historically tough year for bonds in 2022. Importantly, the longer-term periods remain very strong.

Thank you Amy and thank you again to everyone for joining us on the call today.

To slide three and investment performance.

Investment performance versus benchmark is solid and improved over Q4 with at least two sets of assets, beating their respective benchmarks over all time periods.

Well, we're pleased with the results, which includes the balanced strategy moving back above benchmark on a one year basis to go along with its strong long term performance. The one year fixed income performance still has work to do.

Fixed income performance has improved over the first three months of 2023, but the one year number continues to be impacted by the historically tough you have bumps in 2022 importantly, the longer term periods remained very strong.

Roger Thompson: Investment performance compared to peers continues to be competitively strong, with 70%, 61%, 81%, and 90% of AUM in the top two Morningstar quartiles over the 1-, 3-, 5-, and 10-year time periods. Slide four shows company flows. As Ali mentioned, net inflows were $5.5 billion compared to $11 billion of net outflows last quarter. This is our best quarterly result in quite some time. Although we're pleased with the result, our goal is to deliver consistent organic growth over time, and we're not there yet. Turning to slide five, for a look at flows by client type. Net outflows for the intermediary channel were $700 million, compared to $3.4 billion in the fourth quarter. The improvement is attributed to significantly better results in the US, while EMEA declined compared to the prior quarter.

Roger Thompson: Investment performance compared to peers continues to be competitively strong, with 70%, 61%, 81%, and 90% of AUM in the top two Morningstar quartiles over the 1-, 3-, 5-, and 10-year time periods. Slide four shows company flows. As Ali mentioned, net inflows were $5.5 billion compared to $11 billion of net outflows last quarter. This is our best quarterly result in quite some time. Although we're pleased with the result, our goal is to deliver consistent organic growth over time, and we're not there yet. Turning to slide five, for a look at flows by client type. Net outflows for the intermediary channel were $700 million, compared to $3.4 billion in the Q4. The improvement is attributed to significantly better results in the US, while EMEA declined compared to the prior quarter.

Investment performance compared to peers continues to be competitively strong with 70%, 61%, 81% and 19%.

And the top two Morningstar quartile over the 135 and 10 year time periods.

Slide four shows company flows.

As already mentioned net inflows were $5 5 billion.

Pets of $11 billion of net outflows last quarter.

This is our best quarterly result in quite some time.

Although we're pleased with the result, all goal is to deliver consistent organic growth over time, and we're not there yet.

Turning to slide five for a look at.

Flows by client type.

That's outflows with the intermediary channel with $700 million compared to $3 $4 billion in the fourth quarter.

The improvement is attributed to significantly better results in the U S. While it's to me it declines compared to the prior quarter.

Roger Thompson: We've told you that US intermediary is a key pillar in our strategy of protect and grow, and Ali will give you some more detail and information about that later. This quarter, several strategies were positive, including the AAA CLO ETF, Global Equity Income, our Mortgage-Backed Securities ETF, Overseas, and US Mid Cap Growth. For US Mid Cap Growth, we previously told you that performance was strong, and this returned to inflows with the first quarter of positive flows since Q4 2019. In the EMEA region, a risk-off sentiment and higher interest rates are impacting results, particularly in the UK. Institutional net inflows were $6.9 billion. Recall on last quarter's earnings call, I said that we are winning new business in institutional and that I had no new large redemptions to tell you about.

We've told you that U S. Intermediary is a key pillar in our strategy of protecting growth and Adam will give you some more detail and information about that later.

This quarter several strategies were positive.

Including the AAA CLO ETF global equity income on mortgage backed security ETF overseas in U S mid cap growth.

For U S. Mid cap growth. We previously told you that performance was strong and this will tend to inflows with the first quarter of positive flows.

The fourth quarter of 2019.

In the EMEA region, a risk off sentiment and higher interest rates are impacting results, particularly in the U K.

Institutional net inflows of $6 9 billion.

Recall, the last quarter's earnings call I said that we are winning new business and institutional and that I had no new large redemptions to tell you about.

Roger Thompson: The gross sales came from a number of sophisticated institutional investors into several different strategies, including $4.1 billion across a range of Enhanced Index mandates from a sovereign client, $1.7 billion into Australian Fixed Income from a large global reinsurer, and $1 billion into Global Multi-Sector Fixed Income from another sovereign investor. Reiterating what Ali said, the quarterly fundings represent a meaningful portion of the late-stage pipeline, and the team is working to replenish and build a sustainable pipeline, but it will take time. In addition to the strong gross sales, the quarter included unusually low gross redemptions. We'd anticipate a higher redemption rate going forward, all else equal. Finally, net outflows for the Self-Directed Channel, which includes direct and supermarket investors, was $700 million. Slide 6 is flows in the quarter by capability.

Roger Thompson: The gross sales came from a number of sophisticated institutional investors into several different strategies, including $4.1 billion across a range of Enhanced Index mandates from a sovereign client, $1.7 billion into Australian Fixed Income from a large global reinsurer, and $1 billion into Global Multi-Sector Fixed Income from another sovereign investor. Reiterating what Ali said, the quarterly fundings represent a meaningful portion of the late-stage pipeline, and the team is working to replenish and build a sustainable pipeline, but it will take time. In addition to the strong gross sales, the quarter included unusually low gross redemptions. We'd anticipate a higher redemption rate going forward, all else equal. Finally, net outflows for the self-directed channel, which includes direct and supermarket investors, was $700 million. Slide 6 is flows in the quarter by capability.

The gross sales came from a number of sophisticated institutional investors into several different strategies, including full put $1 billion across a range of enhanced index mandates.

Suffering clients.

One 7 billion into Australia, and fixed income from a large global reinsurer on $1 billion into global multi sector fixed income from another sovereign investor.

Reiterating what Charlie said, the quarterly fundings represent a meaningful portion of the late stage pipeline and the team is working to replenish and build a sustainable pipeline, but it will take time.

In addition to the strong gross sales the quarter included unusually low gross redemptions, we'd anticipate a higher redemption rates going forward all else equal.

Finally, net outflows for the self directed channel, which includes direct and supermarkets investors with $700 million.

Slide six is flows in the quarter like capability.

Roger Thompson: Equity net inflows in Q1 were $3.3 billion, compared to $7.5 billion of outflows in the prior quarter. As I mentioned on the previous slide, the result includes approximately $4 billion from an institutional funding into Enhanced Index strategies, which are part of our diversified alternatives capability. This was partially offset by continued but significantly lower equity outflows from our retail channels. Net inflows for fixed income were $3.6 billion, compared to $1.9 billion of outflows in the prior quarter. We are encouraged that despite the challenging short-term investment performance in fixed income, we have a breadth of product that is able to capture flows across multiple channels and regions.

Equity net inflows in the first quarter with $3 $3 billion compared to seven and a half billion dollars of outflows in the prior quarter.

As I mentioned on the previous slide the results includes approximately $4 billion from an institutional funding into enhanced index strategies.

What's your policy about diversified alternatives capability.

This was partially offset by continued but significantly lower equity outflows from our retail channels.

Net inflows in fixed income with $3 $6 billion compared to $1 9 billion of outflows in the prior quarter.

We are encouraged that despite the challenging short term investment performance in fixed income we have a breadth of products that is able to capture flows across multiple channels and regions. Several strategies contributed to positive fixed income flows it needs, she still channel, including Australia and fixed income global multi sector fixed income U S by maintained credit.

Roger Thompson: Several strategies contributed to positive fixed income flows in the institutional channel, including Australian Fixed Income, Global Multi-Sector Fixed Income, US Buy and Maintain Credit, and Multi-Asset Credit. In the intermediary channel, fixed income ETFs had positive flows of $780 million in the quarter, led by the AAA CLO ETF and our Mortgage-Backed Securities ETF. Total net outflows for multi-asset were $800 million, driven by the Balance Strategy within the retail channels. While the net outflow is in part due to 2022's short-term performance, the medium and long-term performance remained very strong, and as I said, the one-year metric is now back above benchmark, adding to its very strong long-term numbers. Finally, net outflows in the alternatives capability were $600 million, primarily from the absolute return strategy in the UK and continental European retail.

Roger Thompson: Several strategies contributed to positive fixed income flows in the institutional channel, including Australian Fixed Income, Global Multi-Sector Fixed Income, US Buy and Maintain Credit, and Multi-Asset Credit. In the intermediary channel, fixed income ETFs had positive flows of $780 million in the quarter, led by the AAA, CLO, ETF and our Mortgage-Backed Securities ETF. Total net outflows for multi-asset were $800 million, driven by the Balance Strategy within the retail channels. While the net outflow is in part due to 2022's short-term performance, the medium and long-term performance remained very strong, and as I said, the one-year metric is now back above benchmark, adding to its very strong long-term numbers. Finally, net outflows in the alternatives capability were $600 million, primarily from the absolute return strategy in the UK and continental European retail.

Our multi asset credits.

In the intermediary channel fixed income Etfs had positive flows of $780 million in the quarter led by the AAA CLO ETF and on mortgage backed securities ETF.

Total net outflows for multi assets were $800 million driven by the balanced strategy within the retail channels.

Whilst the net outflow is in part due to 2022 short term performance the medium and long term performance remains very strong and as I said, the one year metric is now back above benchmark, adding to its very strong long term numbers.

Finally, net outflows in the alternatives capability was $600 million, primarily from the absolute return strategy in the U K and called Central European retail.

Roger Thompson: Moving on to the financials, slide 7 is the US GAAP statement of income, and on slide 8, we explain the adjusted financial results. Adjusted revenue decreased 5% compared to the prior quarter, primarily due to lower seasonal performance fees, which were partially offset by higher adjusted management fees. Net management fee margin for Q1 was 49.8 basis points, which is lower compared to the prior quarter. The decline is due to mix shift resulting from the large institutional wins being at lower fees than our blended fee rate. In the near term, our success in institutional will impact our blended fee margin, but over time, we continue to anticipate a stable net fee margin as we execute our strategy.

Moving onto the financials slide seven is the U S. GAAP statement of income and on slide eight we explain the adjusted financial results.

Adjusted revenue decreased 5% compared to the prior quarter, primarily due to lower seasonal performance fees, which were partially offset by higher adjusted management fees.

Net management fee margin for the first quarter was 49.8 basis points, which is lower compared to the prior quarter.

The decline is due to mix shift, resulting from the large institutional wins being at lower fees than our blended fee rate.

In the near term our success and institutional will impact all blended fee margin, but over time, we continue to anticipate a stable net fee margin as we execute our strategy.

Roger Thompson: Compared to the same period a year ago, the net management fee margin increased 0.4 basis point, which is counter to the fee rate declines at other peers. Q1 performance fees of negative $15 million are due to US mutual fund fees. Outside of US mutual funds, we have minimal AUM subject to performance fees in the first quarter. For Q2, we estimate aggregate performance fees of negative $5 to negative $10 million. This includes approximately negative $15 million from the US mutual fund performance fees, which are partially offset by other performance fees, driven primarily by UK investment trusts. Looking at the full year, all else equal, we estimate aggregate performance fees could range towards the more negative of our current range of negative $35 to negative $45 million. This includes roughly negative $60 million from US mutual fund performance fees.

Compared to the same period, a year ago. The net management fee margin increased four tenths of a basis point, which is counter to the fee rate declines with other peers.

First quarter performance fees of negative $15 million to U S Mutual fund fees.

Out of U S. Mutual funds, we have minimal AUM subject to performance fees in the first quarter.

For the second quarter, we estimate the aggregate performance face a negative five to negative $10 million.

It includes approximately negative 15 billion from the U S. Mutual fund performance fees, which are partially offset by other performance fees, driven primarily by U U K investment trusts.

Looking at the full year, all else equal we estimate the aggregate performance fees could range towards the more negative of our current range of negative 35 to negative $45 million.

This includes roughly negative 60 million from U S Mutual fund performance fees.

Roger Thompson: Clearly, the result will be dependent on future performance. Continuing on to expenses. Adjusted operating expenses in Q1 were $278 million, down 1% from the prior quarter. Adjusted LTI was up 17% compared to the prior quarter, largely due to seasonal payroll taxes triggered by annual vestings in the quarter. In the appendix, we provided the usual table on the expected future amortization of existing grants for you to use in your models. The Q1 adjusted comp to revenue ratio was seasonally higher at 50.1%. This higher rate is primarily due to the payroll taxes on annual LTI vestings at the beginning of the year, reset of payroll taxes and retirement contributions, in addition to lower performance fees.

The result will be dependent on future performance.

It didn't even go into expenses adjusted operating expenses in the first quarter with $278 million down 1% from the prior quarter.

Adjusted LTI was up 17% compared to the prior quarter largely due to seasonal payroll taxes triggered by annual vesting in the quarter.

In the appendix, we've provided the usual table on the expected future amortization of existing ground speed to use in your models.

The first quarter adjusted comp to revenue ratio was seasonally higher at 51%. This higher rate is primarily due to the payroll taxes on annual LTI vesting at the beginning of the year reset of payroll taxes and retirement contributions in addition to lower performance fees.

Roger Thompson: Adjusted non-comp operating expenses decreased 8% compared to the prior quarter, primarily due to lower GNA expenses, partially offset by the anticipated increase in marketing spend. Lower than anticipated non-compensation cost in the quarter is due to timing of our expenses. Full-year 2023 operating expense expectations remain unchanged. They are adjusted compensation ratio in the range of mid-40s%. Adjusted non-compensation percentage growth of mid- to high single digits compared to the prior year, which suggests significant acceleration in our non-compensation costs for the remaining three quarters of the year as we execute our strategy. Lower first quarter non-compensation expenses are temporary, as savings realized to provide fuel for growth have occurred sooner than the reinvestment in the business.

Adjusted non comp operating expenses decreased 8% compared to the prior quarter, primarily due to lower G&A expenses, partially offset by the anticipated increase in marketing spend.

Lower than anticipated non compensation costs in the quarter is due to timing of our expenses.

Full year 2023 operating expense expectations remain unchanged.

They all adjusted compensation ratio in the range of mid forties.

Adjusted non compensation percentage growth of mid to high single digits compared to the prior year, which suggests significant acceleration in our non compensation costs for the remaining three quarters of the year as we execute our strategy.

Lower first quarter non compensation expenses of temporary savings realized to provide fuel for growth of the cuts sooner than the reinvestment in the business.

Roger Thompson: Going forward, we anticipate non-compensation expenses to increase, reflecting areas of opportunity we discussed last quarter, including marketing and advertising in our US intermediary business and investments supporting our other strategic initiatives. Additionally, we expect amortizing previously capitalized costs through the GNA line of our P&L related to the order management system transformation project, once the project goes live late in Q2. Moving to adjusted operating income for Q1, that was $106 million, down 14% over the prior quarter. Q1 adjusted operating margin was 27.5%. Finally, adjusted diluted EPS was $0.55. The quarterly EPS benefited from mark to market on seed capital and other investments, coupled with interest income. Skipping over slide 9 and moving to slide 10 and look at our liquidity. Our balance sheet remains very strong during this period of market volatility.

Going forward, we anticipate non compensation expenses to increase reflecting areas of opportunity, we discussed last quarter, including marketing and advertising in our U S intermediary business on investments supporting our other strategic initiatives.

Additionally, we expect to amortizing previously capitalized costs through the G&A line of our P&L related to the order management system transformation project. Once the project goes live later in the second quarter.

Yeah.

Moving to adjusted operating income for the first quarter that was $106 million down 14% over the prior quarter.

First quarter adjusted operating margin was 27, 5%.

Finally, adjusted diluted EPS was 55 cents.

The quarterly EPS benefited from Mark to market on seed capital and other investments coupled with interest income.

Skipping over to slide nine and moving to slide 10, and look at our liquidity our balance sheet remains very strong during this period of market volatility cash and cash equivalents were $830 million as at the 31st of March which is down from the end of 2022, primarily from the payment of annual variable compensation.

Roger Thompson: Cash and cash equivalents were $830 million as of 31 March, which is down from the end of 2022, primarily from the payment of annual variable compensation. The Q1 cash position is typically our lowest, given seasonal cash needs. Compared to the same period a year ago, our cash and cash equivalents are 6% higher, reflecting our conservative and purposeful approach to capital management in order to maintain balance sheet flexibility during this uncertain economic environment. We have a strong liquidity position and will continue to balance the capital needs and the investment opportunities of the business with returning capital to shareholders. Based on the ongoing market volatility and opportunities we see in investing in the business organically and inorganically, at this time, we do not anticipate buying back shares via an accretive program in 2023.

The first quarter cash position is typically our lowest given the seasonal cash needs.

Compared to the same period, a year ago, our cash and cash equivalents of 6% higher reflecting our conservative a purposeful approach to capital management in order to maintain balance sheet flexibility during this uncertain economic environment.

We have a strong liquidity position and we'll continue to balance the capital needs and the investment opportunities of the business with returning capital to shareholders.

Based on the ongoing market volatility and opportunities we see in investing in the business organically and Inorganically at this time, we do not anticipate buying back shares five accretive program in 2023.

Roger Thompson: We will continue to return cash to shareholders through a strong quarterly dividend, and the board has declared a $0.39 per share dividend to be paid on 31 May to shareholders of record as of 15 May. With that, I'd like to turn it back over to Ali to give you an update on our strategic progress.

Roger Thompson: We will continue to return cash to shareholders through a strong quarterly dividend, and the board has declared a $0.39 per share dividend to be paid on 31 May to shareholders of record as of May 15. With that, I'd like to turn it back over to Ali to give you an update on our strategic progress.

We will continue to return cash to shareholders through a strong quarterly dividend and the board has declared a <unk> 39 cents per share dividend to be paid on the 31st of may to shareholders of record as of the 15th of May.

With that I'd like to turn it back over to Ali to give you an update on our strategic progress.

Ali Dibadj: Thanks, Roger. On slide 11, we provide an update on some of the progress made during the quarter against our 3 strategic pillars of protect and grow our core businesses, amplify our strengths not fully leveraged, and diversify where clients give us the right to win. In protect and grow, we've talked previously about the importance of protecting and growing our US intermediary business. As Roger mentioned, we are encouraged by the early progress in the US intermediary business, including the Q1 flow results. In April, we launched a national and local brand campaign. I know some of you have already seen or heard the advertisements that will span print, digital, and other media. Promoting the Janus Henderson brand is something new for us and a change from what we've done in the past. The data analyzed tells a compelling story that brand matters.

Thanks Roger.

On slide 11, we provide an update on some of the progress made during the quarter against our three strategic pillars of protect and grow our core businesses amplify our strengths not fully leveraged and diversify where clients give us the right to win.

And protect and grow we've talked previously about the importance of protecting and growing our U S intermediary business.

As Roger mentioned, we are encouraged by the early progress in the U S intermediary business, including the first quarter flow result.

In April we launched our national and local brand campaign.

I know some of you have already seen or heard the advertisement that will span print digital and other media.

Promoting the Janus Henderson brand is something new for us and it changed from what we've done in the past.

The data analyzed tells a compelling story that brand matters. There are a lot of great funds out there, but if the brand isn't relevant it's difficult to capture flows the national brand campaign will be active through the end of the year and we're excited by its potential.

Ali Dibadj: There are a lot of great funds out there, but if the brand isn't relevant, it's difficult to capture flows. The national brand campaign will be active through the end of the year, and we're excited by its potential. Additional progress made in US intermediary includes selectively upgrading the talent and increasing wholesaler client engagement, including the acquisition and use of data. Under Amplify, we've talked about our institutional and diversified alternative businesses before. In the institutional business, we've been restructuring coverage to be more aligned to different client types, helping us to better serve their needs through greater specialization. We've already made some new appointments, and other professionals are joining in the coming months. In diversified alternatives, which includes multi-strategy hedge funds and enhanced index funds, we talked last quarter about a strong pipeline entering 2023....

Additional progress made in U S. Intermediary include selectively upgrading the talent and increasing wholesaler client engagement, including the acquisition and use of data.

Under amplify we've talked about our institutional and diversified alternative businesses before.

In the institutional business, we've been restructuring coverage to be more aligned to different client types, helping us to better serve their needs through greater specialization. We've already made some new appointments and other professionals are joining in the coming months.

In diversified alternatives, which includes multi strategy hedge funds and enhanced index funds, we talked last quarter about our strong pipeline entering 2023.

Ali Dibadj: This pipeline translated to double-digit percent growth in AUM compared to Q4 of 2022. Now turning to diversify. We continue to look actively to buy, build, or partner. We have a strong pipeline of activity, and the current environment is creating opportunities. As I said previously, we will be disciplined in identifying where to buy, build, or partner. We want people who are like-minded in terms of culture, investment mindset, and client service. Finally, underpinning our strategy are cost savings to provide the fuel for growth. We are committed and on track to deliver the $40 to 45 million of the previously communicated cost savings and have concrete plans to reinvest the savings back into the business on behalf of our clients and their clients.

This pipeline translate into double digit percent growth in AUM compared to the fourth quarter of 2022.

Now turning to diversify we continue to look actively to buy build or partner you have a strong pipeline of activity in the current environment is creating opportunities as I've said previously we will be disciplined and identifying where to buy build or partner.

We want people, who are like minded in terms of culture investment mindset and client service.

Finally, underpinning our strategy our cost savings to provide the fuel for growth we.

We are committed and on track to deliver the $40 million to $45 million of the previously communicated cost savings and our concrete plans to reinvest the savings back into the business on behalf of our clients and their clients.

Ali Dibadj: This includes the examples I discussed of the recently launched brand campaign in the US, selectively upgrading and adding talent across the firm, and better aligning our client coverage. As Roger mentioned, these expenses will accelerate in the coming quarters. In conclusion, I'm proud of the progress manifested this quarter. We delivered positive net flows, solid investment performance, good financial results, and continued to execute on our strategy, including providing the fuel for growth to reinvest back into the business. The quarterly flow results, while encouraging, is not an inflection point yet, and we still have much work to do. We are in the early days of executing our strategic plan, and the path to achieving consistent results will not be linear. Our focus continues to be on controlling what we can control to deliver desired outcomes for our clients, shareholders, employees, and all our other stakeholders.

This includes the examples I discussed of the recently launched brand campaign in the U S selectively upgrading and adding talent across the firm and better aligning our client coverage as Roger mentioned these expenses will accelerate in the coming quarters.

In conclusion, I am proud of the progress manifested this quarter.

Positive net flows solid investment performance good financial results and continued to execute on our strategy, including providing the fuel for growth to reinvest back into the business.

The quarterly flow results, while encouraging is not an inflection point, yet and we still have much work to do.

We are in the early days of executing our strategic plan and our path to achieving consistent results will not be linear our focus continues to be on controlling what we can control to deliver desired outcomes for our clients shareholders employees and all our other stakeholders.

Ali Dibadj: Let me turn the call back over to the operator to take your questions.

I'll turn the call back over to the operator to take your questions.

Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, it is star followed by two. As a reminder, in the interest of time, questions will be limited to one initial and one follow-up question. So our first question comes from the line of Mike Brown of KBW. Your line is now open. Please go ahead.

Okay.

Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad. If you would like to withdraw your question. It just stopped followed by tape as a reminder, in the interest of time questions will be limited to one initial and one follow up question.

Our last question comes from the line of Mike Brown.

Duffy Your line is now open. Please go ahead.

Mike Brown: Great. Thank you for taking my questions. So Ali, you noted that the pipeline of M&A activity is robust here. Can you just contextualize, you know, what you're seeing there, what you're thinking about, you know, from a strategic perspective in terms of opportunities? And how are seller expectations progressing here? It sounds like the opportunity set is quite good, but just, you know, curious how those conversations have been evolving this year. Thank you.

Alright, Thank you for taking my questions.

So Ali you noted that the pipeline of M&A activity is robust year can you just contextualize, what youre seeing there what you're thinking about from a strategic perspective in terms of opportunities.

How are seller expectations progressing here it sounds like the opportunity set is quite good but just curious how those conversations have been evolving this year. Thank you.

Ali Dibadj: Thanks, Mike. So yeah, the M&A activity is quite high these days. There was a little bit of a lull, I think I mentioned that a couple of quarters ago. And now very much to your point, there is a lot of opportunity that's out there. Expectations are becoming a little bit more realistic, not everywhere, not for everybody, but certainly we're seeing some opportunities out there. Now remember, we're going to be looking at many things, almost everything that comes through. There's probably not a deal that happens that we don't at least know about. But we're going to be very, very disciplined in deciding what we buy, what we perhaps build internally, or certainly what we partner with external folks as well.

Thanks, Mike.

So yes. The M&A activity is is quite quite high. These days there was a little bit of a lull I think I mentioned that a couple of quarters ago and now very much to your point, there's a lot of opportunity that's out there expectations are becoming a little bit more realistic not everywhere not for everybody, but certainly we're seeing some opportunities out there.

I remember.

We're going to be looking at many things almost everything that comes through there's probably not a deal that happens that we don't really know about but we're going to be very very disciplined in deciding what we buy.

Perhaps build internally or externally, what we partner with external folks as well and.

Ali Dibadj: The reason for that isn't just, you know, to make sure we deliver for our clients, make sure we deliver for our shareholders as well. It's very, very importantly, make sure we are client-led in our M&A plan. You've heard me say that before. We want to make sure that we diversify where we have the right to win, and that's really going to be client-led. So it is robust out there. It's tough to obviously determine what timing something will happen. But we are hopeful that, you know, something matches what our client needs are and what our abilities are, and so we'll bring that forward. Now, I don't want to suggest that M&A in and of itself is a strategy. It most certainly is not.

And the reason for that isn't just.

To make sure we deliver for our clients to make sure we deliver for our shareholders as well, it's very very importantly make sure. We are client led and our M&A plan, you've heard me say that before we want to make sure that we diversify where we have the right to win and that's really going to be client led.

So so it is robust out there it's tough to obviously determine what timing.

Something will happen, but we are hopeful that.

Something matches, what our client needs are and what our abilities are and so we'll bring that forward now I don't want to.

Suggest that M&A in and of itself as a strategy. It certainly is not it's.

Ali Dibadj: It's supporting our strategy around the protect and grow, amplify, and diversify. But what's really important and really exciting is we don't need M&A to grow. We don't need M&A over time, right? Again, set this quarter aside, but we don't need M&A to get to where we want to be in terms of our growth trajectory. That's because we have great businesses internally. Think of our US equities franchise that we have as an example that has shown extraordinarily good performance over short, medium, and long term. We can build that business and improve that. So M&A is a useful tool to support our strategy, but we have a great set of core businesses we want to expand and grow, and you're seeing signs of some of that right now.

Supporting our strategy around that protect and grow and client diversified and what's really important really exciting is we don't need M&A to grow we don't need M&A over time against that this quarter side, but we don't need M&A to get to where we want to be in terms of our growth trajectory. That's because we have great businesses internally I think of our U S equities franchise.

We have as an example.

It has shown an extraordinary good performance over short medium and long term.

Can build that business and improve that so M&A is a useful tool to support our strategy, but we have a great set of core businesses, we want to expand and grow and you're seeing signs of sort of that right now.

Mike Brown: Okay, great. And just switching gears to, you know, the outlook on the fixed income side for the industry. You know, clearly we're seeing flows picking up there. How are you thinking about that opportunity for Janus, and how are you positioning the firm to win your fair share of the industry flows?

Okay, great and just switching gears to.

The outlook finally on the fixed income side for the industry clearly we're seeing.

Hello is picking up there.

Are you thinking about that opportunity for Jan answered how are you positioning the firm to win your fair share of industry flows.

Ali Dibadj: Sure. I can start, and I'll pass over to Roger for more details. You're correct, fixed income is a big topic of conversation with our clients. If you think back historically, there were really have always been three reasons why one would invest in fixed income. One is diversification, two is for, you know, regulatory or capital charge perspectives, particularly if you're an insurance company, and three is yield. Now, for a number of years now, we all know that yield was not one of the drivers of investing. And so now it is, and it's exciting. It's an exciting time for us that has a very high performing, particularly over the medium and long term, performance measures, fixed income business.

Sure I can start and I'll pass over to Roger for more details.

You're correct fixed income is a big topic of conversation with our clients. If you think back historically.

They were really have always been three reasons why one would invest in fixed income one is diversification to us for regulatory or capital charge perspective, really if your insurance company and three is yield now for a number of years now we all know that our yield was not one of the drivers of of investing and so now it is and it's exciting it's exciting time.

For us that has a very high performing over the medium and long term performance measures our fixed income business. Our clients are asking us about it and we have a broad suite of products across the board in fixed income to deliver on our clients' needs whether it be.

Ali Dibadj: Our clients are asking us about it, and we have a broad suite of products across the board in fixed income to deliver on our clients' needs, whether it be in a short duration form like J AAA or vanilla ETFs, whether it be in core plus areas like Flex Bond, developed world bonds, even JMBS, which is another ETF, that is PMBS, RMBS type or just riskier assets, multi-asset credit, multi-sector income, those types of forms. So we have a panoply of products to deliver on our clients' needs in a world where fixed income is becoming much more relevant. And we are very much positioned to deliver that to our clients in our strategy.

In a short duration form.

Hey, AAA or vanilla Etfs, whether it be in core plus areas like flex bond developed world bonds, even JMP asset to the another ETF that is yes, our MBS type or riskier assets multi asset credit multi sector income those types of farms. So so we have a path.

<unk> products to deliver on our clients' need.

In a world where fixed income is becoming much more relevant and we are very much positioned to deliver that to our clients and our strategy.

Roger Thompson: Yeah, I don't think there's a lot more to add on that, Ali. But as you say, it doesn't seem to be a sort of common thread on where we're seeing demand from clients. But the great news is that we've got products that align with their demand in many areas.

Yeah that makes a lot more to add on that and I'll leave it as you say if it doesn't seem to be a sort of common thread from where it was.

Demand for clients, but the great news is that we've got products that are in line with with their demand in many areas.

Yeah.

Ali Dibadj: Okay, great. Thank you for taking my questions.

Okay, great. Thank you for taking my questions.

Operator: Thank you. Our next question comes on the line of Patrick David of Autonomous Research. Your line is open, please go ahead.

Okay.

Next question come from the mine.

Okay great.

Hello.

Patrick Davitt: Hey, good morning, everyone. I thought your comments on the redemption rate being abnormally low was interesting, which not exactly what we've seen from some of your comps. What do you think drove it looking so much lower? And then why are you so confident it's gonna get worse again?

Hey, good morning, everyone.

How about your comments on the redemption rate being abnormally low was interesting.

Not exactly what we've seen from some of your comps what what do you think drove it looking so much lower and then and then why are you. So confident it's going to get worse again.

Ali Dibadj: Look, it's a great question. So if you take a step back and disaggregate the quarter, and the drivers of what we see, it was clearly from a flow perspective, a solid quarter. And you can disaggregate that in a few ways. So some things will be repeatable, some things, you know, we don't think will be repeatable until we are consistently delivering on everything that we need to deliver for our clients. You know, one of them, as you mentioned, is very much lower outflow rates. We have to just look at our history to see what we've been outflowing, and you can do that as well as I can, and this quarter is a little bit better.

Look it's a great question.

So if you take a step back and disaggregate the quarter and the drivers of what what we see.

Clearly from a flow perspective.

Solid quarter, I mean, you can disaggregate that in a few ways. So some things will be repeatable some things we do.

Think will be repeatable until we were consistently delivering on everything that we need to deliver for our clients.

One of them as you mentioned is very much lower outflow rates.

We have to just look at our history to see what we've been applying and you can do that as long as I can in this quarter is a little bit better.

Ali Dibadj: Is it all because of all the great hard work that we're doing, from a business perspective, and we have been doing the hard work, we have been improving, our interactions with our clients? I think you could say that. For sure, there's some element to that. But one has to admit that there's some serendipity in that as well. Serendipity in terms of timing of inflows, but also serendipity in terms of clients, in some ways, waiting and seeing. Waiting and seeing what we're doing from a business perspective-

Is it is it all because of all the great hard work that we're doing from a business perspective, and we have been doing the hard work we have been improving.

Our interactions with our clients I think you could say that for sure. There is some element of that but what I have to admit that there's some serendipity in that as well.

<unk> in terms of timing of inflows, but also serendipity in terms of clients and some ways waiting and seeing a waiting and seeing what we're doing from a business perspective, and what the new strategy is going to break I would say that some of the benefits of the inflows came from clients who were.

Patrick Davitt: Mm.

Ali Dibadj: and what the new strategy is gonna bring. I would say that some of the benefits of the inflows came from clients who were waiting to pull the trigger, waiting to see if the strategy is on track. And I think, you know, at least in this quarter, they've decided that some folks who are waiting, that our strategy is on track, and they're willing to pull the trigger. So, look, we'll see what the go forward suggests. We're not suggesting that, as I mentioned a moment ago, that one quarter creates a trend, but we're pleased with the hard work across our firm. We're pleased with the interactions we have with our clients, the activity levels.

Waiting to pull the trigger waiting to see.

If the strategy is on track and I think you know at least in this quarter they've decided that some folks were waiting that our strategy is on track and they're willing to pull the trigger so.

Look we will see what the go forward suggests we're not suggesting that as I mentioned a moment ago that.

One quarter creates a trend, but we're pleased with the hard work across our firm or pleased with contractually we have our clients the activity levels, we're seeing some improvement and some of the underlying markets from market share perspective, but it's going to take some time.

Ali Dibadj: We're seeing some improvement in some of the underlying markets from a market share perspective, but it's gonna take some time.

Patrick Davitt: All right, cool. Helpful. And then, broader question. I'm sensing in my conversations over this quarter that Australia's coming up a little bit more, and money in motion in Australia is becoming a bigger and bigger opportunity, but with a lot more barbelling between passive and alts. So I think Janus is kind of uniquely positioned to take part in that. Are you seeing the same thing? What products do you think are best positioned to benefit from that? And then, on the other hand, any large back books of AUM there that you think could be at risk from that money in motion? Thank you.

Alright cool helpful and then a broader question.

In my conversations over this quarter that Australia is coming up a little bit more money in motion or Australia is becoming a bigger and bigger opportunity.

But with a lot more bar belling between passive and box. So I think Janice is kind of uniquely positioned to take part in that are you seeing the same thing what products do you think are best positioned to benefit from that and then on the other hand any large back books that AUM. There that you think could be at risk from that money in motion. Thank you.

Ali Dibadj: Patrick, yes, we are seeing Australia have money in motion. You know, we wanna make sure we capture our fair share of that. We do have both local, so to speak, products that are catered to that marketplace. Think about our Australian fixed income business, think about some of our sustainable products that are down there as well, and others. We think we can certainly deliver on some of the needs and take advantage of some of that money in motion, and we're getting some of that money in motion. To be fair, we're also getting some of those products being exported to very sophisticated clients outside of Australia as well, given the strength of the skill sets that we have from an investment perspective in Australia.

Yeah.

Patrick Yes, we are seeing Australia have money in motion.

We want to make sure we capture our fair share of that.

We do have both.

Local so to speak products that are catered to that marketplace thinking about Australia fixed income business.

Think about some of our sustainable products that are down there as well and others.

We think we can certainly deliver on some of the needs and take advantage of some of that money in motion and we're getting some of that money motion to be fair. We're also getting some of those products being exported.

It's a very sophisticated clients outside of Australia, as well given the strength of.

The skill sets that we have from investment perspective and in Australia.

Ali Dibadj: There's clearly going to be areas where we're gonna lose out on that as well. We're gonna lose out on folks looking for other things than what we have. But we think the net-net of it is that Australia business is extremely strong. We continue to deliver on where our clients' needs are, and we do see opportunity of money in motion, particularly at our market share in that region.

There is clearly going to be areas, where we're going to lose out on that as well and we're going to lose out on folks looking for other things than what we have but we think the net net of it is that Australia business is extremely strong we continue to deliver on what our clients needs are and we do see opportunity money in motion, particularly at our market share in that region.

Operator: Our next question comes from the line of Daniel Fannon of Jefferies. Your line is now open. Please go ahead.

Our question comes from the line of Daniel.

Your line is alright, thank you.

Dan Fannon: Thanks. Good morning. Wanted to follow up on your comments about exiting some unprofitable AUM, and maybe talk about what strategies or where regions that's coming from. And then also, given the kind of success in the institutional channel this quarter, and you mentioned lower fee, but if you could put some, you know, framework around how to think about some of these mandates in terms of that relative to the overall fee rate.

Thanks, Good morning wanted to follow up on your comments about exiting some unprofitable AUM and maybe talk about what strategies or regions that that's coming from and then also given the kind of success in the institutional channel this quarter and you mentioned lower fee, but if you could put some frame.

Work around how to think about some of these mandates in terms of that relative to the overall fee rate.

Ali Dibadj: Sure. Thanks, Dan. So first on the culling, so to speak. Look, we've always had an ongoing discipline at Janus Henderson of looking at different mandates, different pieces of the business, and getting a sense of whether they're profitable, whether they're as efficient as they should be, and looking at that very carefully over the years. I think as you've heard from us before, with Fuel for Growth, which is creating fuel to be able to invest back into the client, we wanna make sure that we're even more disciplined on that, even more focused on the ongoing review of profitability and efficiency across the firm for different mandates.

Sure. Thanks, Dan.

So first on the on the culling so to speak.

Look we've always had an ongoing discipline of Janus Henderson.

Looking at different mandates.

Different different different pieces of the business and getting a sense of whether they are profitable whether it is there is not.

As efficient as they should be and looking at that very carefully over the years I think as you've heard from us before with fuel for growth.

Is creating fuel to be able to invest back into the client and we wanted to make sure that we're even more disciplined on that even more focused on the ongoing review of profitability and efficiency across the firm for different mandates.

Ali Dibadj: We are going to be surgical, we're gonna be deliberate, but we wanted to call it out as it's not something that's insignificant. To your point, does it have a fee rate correlation to it? It might, but it also depends on how much it costs to service some of these functions and strategies. So we just wanna be mindful of that and call that out for you all.

We are going to be surgical we're going to be deliberate.

But we wanted to call it out as a it's not something that's insignificant.

To your point to have a fee rate correlation to it it might but it also depends on how much it cost to service some of these.

Some of these functions and strategies.

We just want to be mindful of that and call that out for you all.

Roger Thompson: Just to add to that, Ali.

Yeah.

Dan Fannon: You also-

Just to add to that.

Roger Thompson: As you said, the decline is due to, you know, these large fundings from some sophisticated institutional clients into some lower fee products, which is at where we are today. Over time, we expect to see that continued success in institutional. That will be in a blend of products. And as we see continued growth in our intermediary business over time, we'd expect to see our fee rate normalize or stabilize as it has done. And again, I'd just remind you that over the full year, our fee rate is actually up 0.4 basis points from this time last year.

As you say the decline.

Sorry, sorry, Pat as you said the decline is due to these large fundings from sophisticated institutional clients.

A lower fee products, which is which is where we are today and over time, we expect to see that continued success in institutional.

We'll be at the blended products and as we see continued growth in AR.

Our intermediary business over time, we'd expect to see off the REIT.

Normalized or stabilized as it has it has done and again I'll just remind you that over the full year.

Fee rate is actually up four tenths of a basis point from this time last year.

Dan Fannon: Understood. Thank you. Then, I guess, Roger, just a follow-up and clarification on the guidance for performance fees. Are you assuming the performance is flat from here as we think about the full year guide, or is there some assumptions of, of, you know, beta or improvement?

Understood. Thank you and then I guess, Roger just to follow up a clarification on the guidance for performance fees are you assuming performance is flat from here as we think about before your guide or is there some assumptions of Av.

Data or improvement.

Roger Thompson: Yeah, we assume relatively flat performance from here. So yeah, the performance will be what it'll be during the year, but that assumes basically flat performance.

Yeah, we've seen relatively flat performance from here so yes. It did.

So.

Performance will.

Will be what it'll be two in the year, but that's the other students basically flat performance.

Dan Fannon: Understood. Thank you.

Understood. Thank you.

Operator: Thank you. Our next question comes from the line of Craig Sigamala of Bank of America Merrill Lynch. Your line is now open. Please go ahead.

Operator: Thank you. Our next question comes from the line of Craig Sigamala of Bank of America. Your line is now open. Please go ahead.

Thank you.

Yeah.

Our next question comes from the line of Quake second Goa and Karnataka.

Please go ahead.

Craig Siegenthaler: Good morning, Ali, and congrats on the strong fourth quarter. Can you walk us through the plan you've developed to build the institutional pipeline? Like, what I'm looking for is, have you reallocated resources between different client verticals? How are you interacting with consultants differently? Have you tweaked product pricing? And also, which funds or retail funds have you relaunched into the institutional channel?

Craig Siegenthaler: Good morning, Ali, and congrats on the strong Q4. Can you walk us through the plan you've developed to build the institutional pipeline? Like, what I'm looking for is, have you reallocated resources between different client verticals? How are you interacting with consultants differently? Have you tweaked product pricing? And also, which funds or retail funds have you relaunched into the institutional channel?

Good morning, and congrats on the strong fourth quarter.

Can you walk us through the plan you've developed to build the institutional pipeline like what I'm looking for is have you reallocated resources between different client verticals, how you're interacting with consultants differently have you tweaked product pricing and also which funds our retail funds have you re launched into the institutional channel.

Ali Dibadj: Hey, Craig, thanks for the question. Yeah, so institutional is a big focus of us from a strategic perspective, and we most certainly have changed the way we tackle institutional. The great thing is, and I'll kind of answer the last part of your question first, we have a great set of products that we can bring to the institutional channel. They're institutional quality investors. They're institutional quality performance processes, long-term track records that we just didn't take to the institutional channel in a you know disciplined manner, particularly in North America. And so, seeing that opportunity to amplify those strengths based on our US equities franchise, our fixed income franchise in the US, elsewhere around the world, looks like an interesting opportunity.

Hey, Craig Thanks for the question.

Yes, so institutional is a big focus of us from a strategic perspective, and we most certainly have a changed the way we tackle institutional the great thing is and I'll kind of answer that last part of your question first.

We have a great set of products that.

And that we can bring to the institutional channel their institutional quality investors and institutional quality performance processes.

Long term track records that we just didn't take students tissue channel and a.

In a <unk>.

Disciplined manner, particularly in North America, and so seeing that opportunity seen that opportunity to amplify those strength based on our U S equity franchise, our fixed income franchise in the U S elsewhere around the world.

It looks like an interesting opportunity again, not one that turns overnight you all know the sales cycle in the development of a client relationship cycle takes a while but it's certainly something that we're very focused on it we're excited about and you've seen some of the fruits of that labor come through in this quarter for a more practical perspective, you're exactly right. So we.

Ali Dibadj: Again, not one that turns overnight. You all know the sales cycle and the development of a client relationship cycle takes a while, but certainly, something that we're very focused on and very excited about, and you've seen some of the fruits of that labor come through, in this quarter. From a more practical perspective, you're exactly right. So we have reorganized that business, reorganized the regions. We've brought in extraordinarily strong new talent to the team over the course of the past, call it roughly a year. People with relationships, people who have been doing this for a while, people who can get us in front of institutions, who, I'll give you a very clear example, say, "Geez, I didn't know that you had these products in institutional.

<unk>.

Reorganized that business reorganized the regions, we brought in extraordinarily strong new talent to the team over the course of the past call it roughly a year.

People with relationships people who've been doing this for a while people who can get us in front of institutions, who.

I'll give you a very clear example, say geez.

Didn't know that you had these products in institutional I didn't know that you can take these products I thought of you more of a retail business almost a direct quote from a client.

Ali Dibadj: I didn't know that you could take these products. I thought of you more of a retail business," almost a direct quote from a client, and we ended up winning that mandate with the institutional client. So you are seeing a lot more of an organizational structure that is conducive to bringing some of our products that we've had for a very long time to institutional. You're seeing that in our activity levels. Our activity levels are up quite significantly in institutional. We talked about that actually, I think, last quarter or so, and that continues. The word is getting out there. The word is getting out there among our large sophisticated institutional clients and consultant partners, that we have something that can deliver on our clients' needs, and we are starting to deliver that.

We ended up winning that mandate with the institutional clients. So so you are seeing a lot more of an organizational structure that is conducive to bringing some of our products that we've had for a very long time institutional.

Youre seeing that in our.

Activity levels, our activity levels are up quite significantly and institutional we talked about that actually I think last quarter or so and that continues.

The word is getting out there and we're getting out there among our large sophisticated clients and consultants partners.

That we have something that can deliver on our clients' needs.

Ali Dibadj: So again, we are very energized by what we're seeing so far, from the team.

And we are starting to deliver that so again, where we are I'm very energized by what we're seeing so far from the team.

Ali Dibadj: So again, we are very energized by what we're seeing so far, from the team.

Craig Siegenthaler: Thanks, Ali. And, just as my follow-up, how are you viewing the dividend now? I know you're covering the dividend, but dividend coverage is on the low side of the market decline last year. And this is somewhat impacting your ability to build excess capital, which I think you wanna do, and opportunistically buy back stock when it's low.

Thanks Ali and just as my follow up how are you viewing the dividend now.

I know you are covering the dividend, but different coverage is on the low side, if the market decline last year.

And this is somewhat impacting your ability to build excess capital, which I think you want at Dell and Opportunistically buy back stock when its well.

Yeah.

Roger Thompson: Do you want to start on that one, Ali?

We're still in that one early.

Ali Dibadj: Sure.

Roger Thompson: Yep. So as you say, I mean, our dividend is full and well covered. Dividend yield is strong. Our dividend methodology or our capital methodology is unchanged. We have a hierarchy of needs, which is to ensure that we have the regulatory and working capital that we need. We then invest in the business, both organically and inorganically. And should we not have a better use of capital, we'll return it to shareholders. And as you say, we've successfully had both a strong dividend and a buyback over the last few years.

Sure So as you say.

Okay, but that this is still a well covered dividend yield is strong.

Our dividend methodology aura capital methodology is unchanged, we have a hierarchy of needs.

Just to ensure that we have the regulatory in working capital that we need that we that we then invest in the business both organically and Inorganically.

Actually we didn't even have a better use of capital we'll return it to shareholders.

As you said, we've successfully had both a strong dividend buyback over the last few years.

Roger Thompson: You know, as we stand here today, the dividend, as I say, remains well covered, but we're seeing some opportunities in what Ali's been talking about, both in terms of organically and inorganically investing in the business, and also particularly given the volatility in the markets, you know, we're very happy with the dividend as it stands. And as I said, have not put forward for a buyback for this year. But should those things not come about in terms of that investment needs, then we would obviously be looking to return cash in that consistent manner.

As we stand here today.

Dividends as I say remains well covered but we are seeing some opportunities.

And what I've been talking about both.

Sensitive organically and doing it organically investing in the business.

And also particularly given the volatility in the markets.

We're very happy with the dividend as it stands.

And as I said I'm not put forward for a buyback for this year, but it should those things don't come about in terms of in terms of that investment needs. Then we would we would obviously be looking to retain a return.

And.

In that consistent manner.

Yeah.

Andrei Dudnik: Thanks, Roger.

Craig Siegenthaler: Thanks, Roger.

Thanks Roger.

Operator: Thank you. Our next question comes from the line of Nigel Pittaway of Citigroup. Your line is now open, please go ahead.

Our next question comes from the line with Citigroup your.

Your line is now live.

Nigel Pittaway: Oh, great. Thanks for taking my questions. Just, just first of all, on the LTIP expense, I hear what you're saying about... and it's usual, obviously, about the first quarter having that tax imposed. But it does sort of strike me at around about a third of what you're expecting the full year expense to be. It is relatively high. Is there any particular reason for that, or?

Nigel Pittaway: Oh, great. Thanks for taking my questions. Just, just first of all, on the LTIP expense, I hear what you're saying about and it's usual, obviously, about the first quarter having that tax imposed. But it does sort of strike me at around about a third of what you're expecting the full year expense to be. It is relatively high. Is there any particular reason for that, or?

Paul.

Alright, great. Thanks for taking my questions. Just first of all on the <unk> expense I hear what you're saying about and its usual I'll just say that in the first quarter, having that tax and cost.

But it does sort of strike me that Brian about a third of what you're expecting the full year expense to be it is relatively high is there any particular reason for that so.

Roger Thompson: Both Q4 and Q1, Nigel, includes some mark to market, as obviously as the markets have, has arisen. So the full year number, which we've given you in the appendix, assumes flat markets from here. But other than that, yeah, it is just the calendarization of that first quarter. So it was four more-- It was about $4 million of mark to market in the first quarter as well.

Roger Thompson: Both Q4 and Q1, Nigel, includes some mark to market, as obviously as the markets have, has arisen. So the full year number, which we've given you in the appendix, assumes flat markets from here. But other than that, yeah, it is just the calendarization of that first quarter. So it was four more. It was about $4 million of mark to market in the first quarter as well.

Q4, and Q1 largely include some mark to market is obviously, if the market has arisen.

So the full year number which we've given you in the appendix assumes flat markets from here.

But other than that yes. It is just the characterization.

<unk>.

Is that first quarter. So it was.

It was about 4 million of Mark to market in the first quarter as well.

Nigel Pittaway: All right. Okay, thanks. And then maybe just coming back to one of the previous questions, just on Performance Fees. I mean, previously you said that you do have a number of funds at or above their High Watermarks. So it seems as if you're not allowing for much in terms of Performance Fees over and above, you know, the negative drag from the Fulcrum Fees. I mean, do you think you've been sort of cons- Is that a sort of conservative assessment, the guidance you've provided today on full year Performance Fees? Or, you know, do you think-

Alright, Okay. Thanks, and then maybe just coming back to one of the previous questions. Just on performance fees. I mean previously you said that.

You do have a number of sunglass or above high watermarks.

So it seems as if youre not allowing for much in terms of performance fees over and above the negative drag from the fulcrum fees.

<unk> been sort of is that a sort of conservative assessment. That's the guidance you provided today on full year performance fees or.

Roger Thompson: Well-

Roger Thompson: Well.

Do you see.

Nigel Pittaway: How should we view that?

Hi, Shannon.

Roger Thompson: I'd say, yes. As I say, you know, things could go either way. There's, we saw some very strong things come through late in Q2, in the second half of last year, in terms of performance fees, where our excellent investment teams delivered some very strong performance. And obviously that can happen. But, you know, we have significant AUM in performance fees in Q2, particularly in the seca range and the absolute return strategy in the UK OEIC. But most performance there is sort of at or around benchmark and high water marks at the moment. So, you know, we're not currently anticipating that based on current performance. There's only a couple of months to go, so it would be a pleasant surprise.

I'd say, yes.

Things could go either way it is.

We saw some very strong things come through late in the second quarter in the second half of last year, our incentive performance fees were up were up excellent excellent investment teams.

Delivered some very strong performance.

We see that kind of happened, but we have significant AUM.

This phase in the second quarter, particularly in the C cap range and absolute return strategy in the U K.

But a nice performance there is sort of that through around benchmark and high watermarks at the moment.

So we're not we don't currently anticipating that based on current performance.

A couple of months to go so it would be a pleasant surprise, but I think it's the correct answer to see relatively.

Roger Thompson: But I think, you know, it's the correct answer to assume relatively, you know, relatively low performance fees from those in Q2. Obviously, there's the Q3; Q3 is then a relatively quiet period, and then we have some performance fees that come due in Q4. Obviously, that's a little bit further away, and we'll update in future quarters.

The relatively low performance fees from those this.

In Q2, obviously this Q2 Q3 is that a relatively quite quiet period, and then we have some performance fees that come to you in the fourth quarter, obviously, that's a little bit further away it will up.

In future quarters.

Nigel Pittaway: Okay, thank you.

Okay. Thank you.

Yeah.

Operator: Thank you. Our next question comes from the line of Andrei Dudnik of Morgan Stanley. Your line is now open. Please go ahead.

Operator: Thank you. Our next question comes from the line of Andrei Stadniknik of Morgan Stanley. Your line is now open. Please go ahead.

Okay.

Question comes from the lineup.

Hi.

Thanks, Nick.

Morgan Stanley Your line is now.

Yep.

Andrei Dudnik: Thank you for taking my questions. Can I ask firstly around the timing of the institutional flows? You know, do they come, you know, early or late in the quarter? Just in terms of helping us to think about the basically management impact.

Andrei Stadnik: Thank you for taking my questions. Can I ask firstly around the timing of the institutional flows? You know, do they come, you know, early or late in the quarter? Just in terms of helping us to think about the basically management impact.

Thank you for taking my questions.

Can I ask firstly around.

The timing of the institutional flows or did they come early or late in the quarter just in terms of helping us think about the.

Base management impact.

Roger Thompson: They were-

Yeah.

Roger Thompson: They were

Andrei Dudnik: Well, thank you.

Andrei Stadnik: Well, thank you.

Roger Thompson: Lended through the quarter, really.

They were booked explained it through the quarter.

Andrei Dudnik: Yeah.

Andrei Stadnik: Yeah.

Roger Thompson: So... Sorry, Ali.

Roger Thompson: So sorry, Ali.

Sorry.

Ali Dibadj: No, I was going to say the same thing. There, there were several of them, they came throughout the quarter. I don't know if that helps you.

Sorry Ali.

No I'm going to say the same thing they are several of them they came throughout the quarter.

I don't know if that helps you.

Roger Thompson: Probably, thinking about it, probably a little bit earlier. There's probably more in; there was more in January. So, that does make that fee impact through the quarter.

Probably thinking about it probably a little bit of a little bit earlier theres, probably more it was more in January so you'd say that that does spike that.

That performance.

Fee impact through the quarter.

Andrei Dudnik: Thank you. Thank you, and my other question was around how long, you know, were you in discussion for with the various mandates you ended up winning? You know, were they, you know, fairly recent, or, you know, were you talking some of them, you know, half a year or even longer? Like, how long were they, you know, in the pipeline for?

Andrei Stadnik: Thank you. Thank you, and my other question was around how long, you know, were you in discussion for with the various mandates you ended up winning? You know, were they, you know, fairly recent, or, you know, were you talking some of them, you know, half a year or even longer? Like, how long were they, you know, in the pipeline for?

That's right.

Thank you and my other question.

Was around.

How long will you in discussion for.

With the various mandates you ended up winning where they.

Recently, we took and some of them part of the year or even longer like how long will they in the pipeline.

Ali Dibadj: It varies. When you look at what's come in, I think if you wanted to disaggregate it more broadly, there was certainly a certain amount of serendipity of things falling into the same quarter, there's no question. But there were folks who were new and funded relatively early, and we could, from an operational perspective, given some of the improvements that we've done, certainly fulfill that for them. There was a subset, exactly as you described, Andrei, that were, as I mentioned a little while ago, wait and see. They saw and they didn't wait, and so they pulled the trigger, so to speak, to trust us with their capital. So I'm not sure there's a perfect answer to this.

It varies.

When you look at what what's come in I think I think if you wanted to disaggregate it more broadly.

There was certainly a certain amount of serendipity of things falling into the same quarter Theres No question, but there were folks who were new and funded relatively early and we could from operational perspective goodness in the improvements that we've done.

Ali Dibadj: Generally speaking, these things are, I don't know, call it nine months in the making, typically in terms of when you actually hear to when you actually go through in the funding. But some of these relationships are, you know, three, four, 10 years old. So there's not a great answer to that question. These were a mix of all.

Andrei Dudnik: Cheers. Thank you.

Andrei Stadnik: Cheers. Thank you.

Operator: Thank you. Our next question comes from the line of Alex Blostein of Goldman Sachs. Your line is now open. Please go ahead.

Okay.

Alex Blostein: Great. Thanks. Good morning, everybody. Ali, a little bit of a strategic question for you. So when you guys talk about buy, build, or partner, it sounds like the activity rates on the buy side are picking up. But if you were to think about in the next kind of 12 to 24 months, which one of these areas are you likely to be most active in? And I think we can all kind of picture what buy looks like, but when you're talking about build or partner, what are some of the key areas that you're looking to do that in?

Great. Thanks, good morning, everybody.

Little bit of a strategic question for you when you guys talk about by build a partner.

It sounds like the activity rates on the buy side of picking up but if you were to think about in the next 12 to 24 months, which one of these areas are you are likely to be most active in and I think we can all kind of picture would buy it looks like but when you're talking about build a partner what are some of the carrier is that you are looking to do that.

Ali Dibadj: Sure. Thanks for the question, Alex. So look, first and foremost, our priority is to grow the business that we have. That's what the protect, grow, and amplify legs of our strategy are all about. We talked about institutional, we talked about some of the improvements in U.S. intermediary, et cetera. And then, of course, yes, you're right, there's a diversified piece, which is the buy, build, or partner. Look, I would argue that the build, and particularly the partner areas, are looking relatively fruitful. And an example of kind of a combination of a buy or build is what we did with our emerging market debt team. I remember we brought them on board in September.

Ali Dibadj: Sure. Thanks for the question, Alex. So look, first and foremost, our priority is to grow the business that we have. That's what the protect, grow, and amplify legs of our strategy are all about. We talked about institutional, we talked about some of the improvements in US intermediary, et cetera. And then, of course, yes, you're right, there's a diversified piece, which is the buy, build, or partner. Look, I would argue that the build, and particularly the partner areas, are looking relatively fruitful. And an example of kind of a combination of a buy or build is what we did with our emerging market debt team. I remember we brought them on board in September.

Sure. Thanks for the question.

So first and foremost our priority is to grow the business that we have that's what the protecting grow and amplify legs of our strategy are all about we've talked about institutional we talked about some improvements in you guys intermediary et cetera.

And then of course, yes, you are right there the diversify piece, which is the buy build or partner.

I would argue that the build and particularly the partner areas are looking relatively fruitful. An example of kind of a combination of a buyer build what we do with our emerging market debt team I remember we brought them on board in September .

Ali Dibadj: They had zero assets, so it was kind of an acqui-hire, so to speak. And then we're close to over $1.5 billion, almost $2 billion of committed capital to that. So that's an example of the type of thing we could do that sort of melds the buy and the build. And there's some really interesting opportunities to partner as well. I think our strengths are very, very clearly that we have a phenomenal client base and world-class investment acumen, and we can marry that to deliver on our client needs in a partnership form as well, which could be quite interesting.

They had zero assets. So it was kind of a accu higher so to speak.

And then we're <unk>.

Close to over one and a half billion dollars almost $2 billion.

Committed capital to that so that's an example of the type of thing, we could do that sort of males.

By and the build and has some really interesting opportunities to partner as well I think our strengths are very very clearly that we have a phenomenal client base and world class investment Acura.

Acumen, and we can marry that to deliver on our client needs <unk>.

In a partnership form as well, which could be quite interesting.

Alex Blostein: Got it. Okay. And then a clarification question, on the institutional pipeline. When you guys are talking about rebuilding it, given strong fundings this quarter, can you help quantify where the institutional pipeline, of one, but unfunded mandates stands today and the composition of that pipeline?

Got it Okay, and then a clarification question on the institutional pipeline. When you guys are talking about rebuilding it given strong fundings this quarter.

Can you help quantify where the institutional buckling of one but unfunded mandate cents today and the competition pipeline.

Ali Dibadj: So we don't actually talk about the pipeline historically at Janus Henderson. What I will say is that, I guess three things. One is there are many things in the pipeline, and as I mentioned in an answer to an earlier question, we're all very enthusiastic about the team that's there and the activity levels that are there, bringing our best-in-class investment strategies to the clients. That being said, Alex, it's gonna take time, especially as a certain amount of clients who are waiting did pull the trigger this quarter, as you saw in Q1, as you saw. And it's gonna take a little bit of time to rebuild that.

So we don't we don't actually talk about the pipeline historically Janice Henderson, what I will say is that I guess three things. One is there are many things in the pipeline and as I mentioned in an answer to another question. We're all very enthusiastic about the team that's there in the activity.

[noise] levels that are they are bringing our best in class investment strategies to the clients.

That being said us it's gonna take time.

Especially as a certain amount of clients were waiting did pull the trigger this quarter as you saw in Q1 as you saw and it's gonna take a little bit of time to to rebuild that but there's a lot of interest whether it be in kind of global or national businesses that we have an emerging market debt as I mentioned, a second ago and look what alternatives and fixed income we have a <unk>.

Ali Dibadj: But there's a lot of interest, whether it be in kind of global or international businesses that we have, in emerging market debt, as I mentioned a second ago, in liquid alternatives, in fixed income. We have a real great palette to offer our client base there. So, we're excited about the opportunity in institutional to continue over time.

<unk>, great palette to offer our client base. There. So we're excited about the opportunity that institutional to continue over time.

Alex Blostein: All right, great. Thanks very much.

Alright, great. Thanks very much.

Operator: Thank you. Our next question comes from the line of Ken Worthington of JP Morgan. Your line is now open. Please go ahead.

Okay.

Can come from your line of <unk> Okay.

Oh.

Ken Worthington: Hi, good morning. Thanks for taking the questions. Maybe first, you're having improved success, excuse me, in your ETF business, particularly fixed income ETFs. Are you seeing success on particular platforms? And if so, why? And then what are you doing from a marketing perspective here to sort of continue and broaden the success that you're having?

Hi, good morning, Thanks for taking the questions.

Maybe first you're having improved success.

Excuse me and your ETF business, particularly fixed income Etf's are you seeing success on particular platforms and if so why and then what are you doing from a marketing perspective here to sort of continue and fraud and the success that you're having.

Ali Dibadj: Thanks for the question, Ken. There's no particular platforms that I'd say that are disproportionately driving some of those flows. What it really comes down to is we have marriage of a really unique set of investment capabilities around the securitized world, in particular, whether it be JAAA, whether it be JMBS, others, vanilla, and then matching that to our client needs. Client needs, particularly in an environment on the short term duration side for most of the needs here, in this fixed income environment. And so it's a great marriage that we can deliver through partnerships, through our US intermediary platform, platform partners in particular. On the marketing side,

Thanks for the question.

There's no particular platforms that I'd say that that are disproportionately.

Disproportionately driving some of those flows.

What what really comes down to is we have marriage of a really unique set of investment capabilities around the securitize world in particular, whether it be take triple a whether it be J D S others vanilla.

And then matching that to our client needs climbed needs, particularly or environment on the short term duration side for most of the needs here in this fixed income environment and so it's a great marriage that we can.

Deliver it through a partnership through our U S intermediary platform.

Partners in particular.

On the marketing side, Okay look there there there there are a few things right. So number one and I'll mentioned this more in a second.

Ken Worthington: Okay.

Ali Dibadj: Look, there are a few things, right? So number one, and I'll mention this more in a second, we are doing the broader brand marketing, which we'll get to. But from an ETF perspective, a lot of it is about education, so to speak, right? Education in an environment where yields are where they are, and the uncertainty is where it is, we have the opportunity to bring, again, these clients through our US intermediary partners the opportunity to invest in these types of products, which are quite unique to us. And so it's a lot of education. Now, that being said, going to the first point, we have spent time on marketing.

We are doing the broader brand marketing, which will get two but from ETF perspective, a lot of it is about education. So to speak right education in an environment, where yields are where they are and answer any is where it is and we have the opportunity to bring again these clients through the through our U S intermediary.

Partners the opportunity to invest in these types of products, which are quite unique to us.

And so it's a lot of education now that being said going to the first point Uhm. We have spent time on marketing what is it again, something that's a little bit different than we used to do in the past as you hurt and kind of our earlier more prepared remarks.

Ali Dibadj: It's again something that's a little bit different than we used to do in the past, as you heard in kind of our earlier, more prepared remarks. And what we found from the data perspective is that, you know, Janus Henderson has a great amount of brand recognition, but we have to get into a little bit more of the consideration set for decisions made by advisors and partners that we have, other consultants or institutional or US intermediary partners. And part of what we're trying to do with this marketing view is good. Gosh, we have something to say now.

And what we found from the data perspective is that you know Janice Henderson has a great amount of Ah brand recognition.

But we have to get into a little bit more of the consideration set for for decisions made by advisers and and partners that we have had a consultant or institutional Oreo intermediary partners and part of what we're trying to do with his marketing of you is good gosh, we have something to say now we have something to say we are a great firm.

Ali Dibadj: We have something to say: We're a great firm, we have differentiated insights, we have disciplined investments, we have world-class service, and we want to, as our purpose statement says, invest in a brighter future together. And the data suggests that if we get that in front of folks, the consideration set becomes broader for our client base. Brand actually does matter, is what the data would suggest. And the last thing is, we're doing this, to be fair, as a little bit of an experiment. We have analytics behind what we're doing from a marketing perspective to try to get a best sense of what the ROI is, how we're going to use it, where we're going to use it, what products, to your point,... Ken, are gonna be benefited by some of these brand marketing.

Ali Dibadj: We have something to say: We're a great firm, we have differentiated insights, we have disciplined investments, we have world-class service, and we want to, as our purpose statement says, invest in a brighter future together. And the data suggests that if we get that in front of folks, the consideration set becomes broader for our client base. Brand actually does matter, is what the data would suggest. And the last thing is, we're doing this, to be fair, as a little bit of an experiment. We have analytics behind what we're doing from a marketing perspective to try to get a best sense of what the ROI is, how we're going to use it, where we're going to use it, what products, to your point, Ken, are gonna be benefited by some of these brand marketing.

We have differentiated insights with discipline investments with world class.

Service and we wanted to.

Purpose statement says invest in a brighter future together.

And the data suggest that if we get that in front of folks the consideration set becomes broader for our client base brand actually doesn't matters, what say that the.

The data would suggest and the last thing is we're doing this to be fair is a little bit of an experiment uhm, we have uhm analytics behind what we're doing for marketing perspective to try to get the best sense of what the <unk>, how we're gonna use it where are we gonna use it what products to your point Ken are gonna be benefited by some of these brand marketing and so we're.

Ali Dibadj: And so we're gonna iterate and test and learn on that in a rather sophisticated manner, actually, going forward.

Iterate intestine learn on that and a rather sophisticated manner actually going forward.

Ken Worthington: Great, thank you. And then, institutional, you know, win rate increased this quarter. How does the fee rate on the one business this quarter kind of compare to your overall institutional fee rate? Is this business coming in at sort of like, you know, similar? Is it higher, is it lower? Is price a factor in, in sort of winning business? Just wanted to throw that out.

Great. Thank you.

And then institutional when rate increase this quarter, how does the fee right on the one business this quarter kind of compare to your overall institutional fee right.

This business coming in that sort of like.

Similar or is it higher or is it lower it's price a factor in sort of winning business just wanted to throw that out.

Ali Dibadj: Yeah, it's a great question. So-

Ali Dibadj: Yeah, it's a great question. So,

Yeah, that's a great question, so as we said.

Roger Thompson: As you said-

Roger Thompson: As you said,

Ali Dibadj: Go ahead, Roger.

Okay.

Hi, Roger.

Roger Thompson: No, I was gonna say, as we said, you know, there, there were some very, very strong mandate wins this quarter from sophisticated institutional clients, which were in areas of lower fee products, particularly around Enhanced Index. So that, yeah, that is, you know, what has come through the pipeline this quarter, that is what has brought the fee rate down a little bit this quarter. But as I said, that broad pipeline Ali's been talking about, what we've been building, the persistency in that, is what we've got to build out. That's a blend of product. So our alternatives, our liquid alts business is a mix of a multi-strategy business and an Enhanced Index business.

I was gonna say as we said that there was some very very strong winds. This this quarter from sophisticated institutional clients.

Clients.

Which were in eight areas of luxury products, particularly a rabbit <unk>.

So that yeah that that is what's has come through the potluck. This cool. So if that is what the fee break down a little bit this school so bizarre.

That broad Python, Alex be talking about what we'd be building the persistency Matthews, what we'd go to what we could build out that's a that's a blend of product.

So our alternatives.

[noise] liquid alts business is is is a mix of multi strategy business <unk> business. This call to be social break sizeable flows coming in and feeding pellets index, but multi strategy scenario, where we see that we talked about this previously where we've seen seeing a lot of clients and consultants interest around the world that obviously.

Roger Thompson: This quarter, we saw some very sizable flows coming in, in Enhanced Index, but Multi-Strategy is an area where we've seen, and we talked about this previously, where we've seen, and are seeing, a lot of client and consultant interest around the world, and that obviously is a higher fee business. So we've got a range of things, in that pipeline, but this quarter, yeah, there was a range of Enhanced Index and fixed income product from, as I say, from larger clients, in the institutional space at lower fee. So it's at a lower-

Hi Fi business and we've got to look at a range of things in the pipeline, but this quarter. Yeah. There was there was a bright <unk> fixed income products from from us a safe from larger clients and institutional space that loyalty.

Ali Dibadj: Roger said it well.

So it to the lowest Rogers said, it well all institutional right.

Roger Thompson: than our institutional rate.

Ali Dibadj: Roger said it well, Ken.

Roger Federer well can.

Ken Worthington: Yeah, I-

Ken Worthington: Yeah, I,

Ali Dibadj: Go on.

Yeah.

Ken Worthington: I hear that. What I was, what I was really after is, like, I, I hear the mix, and, and you get high fee products and low fee. But, did you have to or, or, you know, are you using price to win business? Is that, is that, you know, part of the strategy? Were the products priced the right way before, or maybe they weren't priced the right way before, and you're using price as an adjustment? I wanted you to just maybe take the conversation beyond just the mix.

Hear that what is really after is like I I I hear the mix and you get high fee products are low fee.

But did you have to or you know.

Are you using price to wind business is that is that you know part of this strategy was the where the products price the right way before or maybe they weren't price right way before and you're using price as an adjustment. Once you could just maybe takes that conversation beyond just the mix.

Ali Dibadj: Absolutely not, Ken. So I appreciate it. Now I understand where you're trying to get at. No, there's no new or different apples to apples fee pressures at all. It's all based on mix. There's a natural mix effect, as you mentioned, of ebb and flow between channels in particular, and that showed up in the quarter. Over time, we should continue to expect that our fee rate will be flat to going up. And if you were to look at the fee rate over a longer period of time, Q4 had a little bit more, I guess, ebb than flow in some of these lower fee rate mandates, and this quarter had a little bit more flow than ebb, so to speak, on some of the channels that drove the fee differential.

Absolutely not okay. So I appreciate now I understand where you're trying to get.

No there is no new or different apples to apples to the pressures at all it's all based on mix does a natural mix uhm effect as you mention of ebb and flow between channel in particular that showed up in a corner over time, we should continue to expect that our fee rate will be flat to going up and up.

You were to look at the fee right over a longer period of time, two four had a little bit more I guess <unk> can flow and some of these lower fee right mandates in this quarter out a little bit more flow than episode to speak on some of the the the channels that that drove that'd be differential so to answer your question very directly pricing is not part of our strategy.

Ali Dibadj: So, to answer your question very directly, pricing is not part of our strategy to get more business.

<unk> to get more business.

Ken Worthington: Awesome. Thank you.

Awesome. Thank you.

Operator: Thank you. Our next question comes from the line of Brian Bedell of Deutsche Bank. Your line is open. Please go ahead.

Oh cool.

<unk> I'm a customer comes from the line of fire <unk> per line for iPhone <unk>.

Brian Bedell: Great. Thanks. Good morning, folks. Thanks for taking my questions. Maybe just you back on the institutional side. Different set of questions, but as you're marketing to the institutions, do you see them shifting money from other either asset classes or, or rather, is it switching from other managers in terms of your success and the role of consultants also in the channel versus your direct effort? And then, I guess, sort of more broadly, given the enhanced or the improved attraction in the institutional channel versus the AUM that you do intend to exit, that obviously is less profitable and lower fee.

Great. Thanks, Good morning folks thanks for taking my questions, maybe just you back on institutional side.

Different set of questions but.

As your marketing to the institutions do you see them shifting money from other either asset classes or or rather it's is it switching from other managers in terms of your success and the rule of consultants also in the channel versus your direct effort and then I.

Guess sort of more broadly given the enhanced or improved attraction in the institutional channel versus the U N that you do intend to exit then obviously, it's less profitable and lower fees, but but we should be thinking of this as sort of a neck rose.

Brian Bedell: But we should be thinking of this as sort of a net growth avenue on the institutional side, even considering the, you know, the culling of some of those unprofitable mandates.

Avenue on the institution side, even even considering the calling of some of those unprofitable and it's.

Ali Dibadj: Thanks for the question, Brian. So let me disaggregate that into three areas. One is, first, what's happening from our client base and what are they looking at? I think one of the most important themes that our clients are thinking through right now is this view that the past 10 years were extremely easy to just ride the wave, particularly based in kind of pure passive mandates, and deliver pretty good performance. On the go-forward basis, all of our more sophisticated clients, and I'm sure others of our competitors as well, are saying, "Gosh, we need to figure out how to create alpha out of the haves and have-nots in whatever we invest in, whether it be equities, whether it be fixed income, whether it be some alternative areas.

Ali Dibadj: Thanks for the question, Brian. So let me disaggregate that into three areas. One is, first, what's happening from our client base and what are they looking at? I think one of the most important themes that our clients are thinking through right now is this view that the past 10 years were extremely easy to just ride the wave, particularly based in kind of pure passive mandates, and deliver pretty good performance. On the go-forward basis, all of our more sophisticated clients, and I'm sure others of our competitors as well, are saying, Gosh, we need to figure out how to create alpha out of the haves and have-nots in whatever we invest in, whether it be equities, whether it be fixed income, whether it be some alternative areas.

Thanks for clarifying so let me disaggregate down to three areas. One is first what's happening from our client based on what are they looking at I think one of the most important themes that our clients are thinking through right. Now is this view that the past 10 years.

We're extremely easy to just ride the wave prickly based in kind of pure passive mandates.

And deliver pretty good performance on the go forward basis, all of our more sophisticated clients and I'm sure others of our competitors as well are saying gosh, we need to figure out how to create alpha out of the hasn't have not and whatever we invest it whether it be equities, whether it be fixed income by there'd be some alternative there how do we accentuate the alpha creation between a habit.

Ali Dibadj: How do we accentuate the alpha creation between the haves and have-nots?" The good news for us is that that's what we do all day at Janus Henderson. That's why we have 340 people on our investment teams, to pick the haves and have-nots. Perhaps less relevant over the past few years, where money was free, but increasingly relevant among our clients and the broader asset management industry going forward. So we're very clearly seeing, to answer your question very specifically, a shift from many clients who were relegating a lot of their assets to passive, to actually coming back to folks like us, and I'm sure some others, but folks like us, to get into the differentiation of haves and have-nots.

Ali Dibadj: How do we accentuate the alpha creation between the haves and have-nots? The good news for us is that that's what we do all day at Janus Henderson. That's why we have 340 people on our investment teams, to pick the haves and have-nots. Perhaps less relevant over the past few years, where money was free, but increasingly relevant among our clients and the broader asset management industry going forward. So we're very clearly seeing, to answer your question very specifically, a shift from many clients who were relegating a lot of their assets to passive, to actually coming back to folks like us, and I'm sure some others, but folks like us, to get into the differentiation of haves and have-nots.

Have nots the good news for US is that that's what we do all day agenda Henderson. That's why we have 340 people aren't investment teams to to to pick they have and have nots, perhaps less relevant over the past few years, where money was free but increasingly irrelevant among our clients and the broader asset management industry going for.

<unk>. So we're very very clearly seeing to answer your question very specifically a shift from many clients who were relegating a lot of their assets to pass it to actually coming back to you folks like us and I'm sure some others, but folks like us to get into.

The differentiation of hasn't have nots. Some of that are is manifested through things like Ah product, we have called enhanced index I, it's kind of a blah blah blah.

Ali Dibadj: Some of that is manifested through things like a product we have called Enhanced Index.... i.e., it's kind of a passive underlying or index underlying, and then it's a alternative overlay onto that effectively, which has been very successful for a number of years. That's kind of dipping the toe in the water. And then we have folks who are going even further, whether it being fixed income, whether it being equities, whether it being other places of our business, and realizing that the go-forward is not going to be the same, most likely from a market performance perspective versus the go-behind. So that's one of the major first topics I just want to raise that very important question, Brian. The second thing is, you mentioned consultants.

Ali Dibadj: Some of that is manifested through things like a product we have called Enhanced Index i.e., it's kind of a passive underlying or index underlying, and then it's a alternative overlay onto that effectively, which has been very successful for a number of years. That's kind of dipping the toe in the water. And then we have folks who are going even further, whether it being fixed income, whether it being equities, whether it being other places of our business, and realizing that the go-forward is not going to be the same, most likely from a market performance perspective versus the go-behind. So that's one of the major first topics I just want to raise that very important question, Brian. The second thing is, you mentioned consultants.

Passive underlying or index underlying and then it's a alternative.

Overlay onto that effectively which has been very successful for a number of years, that's kind of dipping the toe in the water and then we have folks who are going even further whether it's been fixed income whether it be in equities rather be in other places of our business and realizing that to go forward is not going to be the same most likely from a market performance perspective versus versus the go behind so that's one of the <unk>.

Major first topics I just won a race that very important question Bryan. The second thing is you mentioned consultants.

Ali Dibadj: You know, it's a little bit of an answer to the question that Craig asked earlier as well. We didn't really have a concerted consultant servicing and partnership effort at the firm until relatively recently. We didn't have a global head of consultants. We do. We didn't have a long-tenured North America head of consultants. We have a great one. And so partnership with consultants is an extremely important thing for us, and it's important because it delivers better results for our clients. And so that's exactly a place that we are focused on, and those relationships don't turn overnight, obviously, but over time they do, and we're seeing some of the fruits of that labor already start to play out.

It's a little bit of in answer to the question to Craig asked earlier as well we.

We didn't really have a concerted consultant servicing in partnership effort at the firm.

Until relatively recently, we didn't have a global head of consultants. We do we didn't have a long tenure North America ahead of consultants, we have a great one and so uhm partnership with consultants is extremely important thing for us it's important because it delivers better results for our clients.

And so that's exactly a place that we are focused on in those relationships don't turn overnight, obviously, but over time, they do and we're seeing some of the fruits of that labor already start to play out.

Ali Dibadj: Your last question, if I kind of parse through it, you know, it's tough to tell what our flows are gonna be. Obviously, for the quarter, we're pleased by the results on the institutional side of things. There will continue to be ebbs and flows, as Roger said earlier, and it was brought up in a question as well. I would say that the outflows were lower than one would see from a run rate perspective from us, and I'd rethink what the go-forward should be to be more like a historical outflow level as well. And we're watching and trying to service our clients as best as we can. And the proof will be in the pudding over time.

Your last question, if I kind of parse through it.

It's tough to tell what our flows are gonna be obviously for the quarter were pleased by the results on these additional side of things there will continue to be ebbs and flows as Roger said earlier.

Earlier and it was brought up in a question as well I would say that the outflows where lower than one would see from our run rate perspective from us rethink what the go forward it should be to be more like a historical outflow level as well.

And we're watching and trying to service our clients as best as we can and and the proof will be in the putting over time again not overnight, but over time for the delivery for our clients.

Ali Dibadj: Again, not overnight, but over time, in terms of delivering for our clients' needs.

Brian Bedell: Okay, great. And then just quickly on the advisor side, this has been asked, but a little bit of a different question. Are you gaining more traction, do you think, within the individual advisors at the firm, or is the future growth more about onboarding, either to new platforms or adding products onto those platforms? And then on the branding campaign, I imagine it's targeted broadly, but is there a retail component to that as well, so such that retail investors would say, you know, they would gain brand recognition of Janus, and they may be asking for Janus product as a result of the branding?

Mmm, Okay, Great and then just as quickly on the adviser said this has been asked boat and a little bit of a different question are are you gaining more traction do you think within the individual advisors at at the firms or is the future growth more about onboarding either to new platform.

Or or adding product onto those platforms and then on the branding campaign is I imagine it's targeted broadly but is there a retail component to that as well. So it's such that retail investors would say they would deem Brian recognition of Janice may may be asking for Janice product as a result of the.

Brandon.

Ali Dibadj: So, I guess, yes, let me tackle those. So first, it's both. We have very broad reach to many US intermediary clients, for example, or global intermediary clients, but they typically don't have many of our products on their platform. We're known for a few things. Most importantly, however, we're known to be a trusted partner. We're known to have great investment acumen, and that very much opens the door for us to step into product number two and number three, and hopefully beyond. And that's something that the team is very focused on and has had good success in doing that. But it also is that we don't have as broader reach as we could across the advisor base. So it really is a driver of both of those.

So so <unk> <unk>, yes, let me tackle those so first it's both we have very <unk>.

Broad reach too many guys intermediary clients. For example are cool went from your client, but they typically don't have many of our products on their platform. We're known for a few things. Most importantly, however were known to be a trusted partner.

Known to have great investment acumen and that very much opens the door for us to step into product number two and number three and hopefully beyond and that's something that the team is very focused on and has had good success in doing that but it also is that we don't have a broader reach as we could across the advisor base. So it really is.

Ali Dibadj: I'd like to think that over time, we can gain share through both of those vectors of growth. And I will say here, that the US intermediary team, as an example, where we've made some changes, some personnel changes, is really showing some signs of improvement along both of those dimensions, which we should be very proud of and shareholders should be grateful for. The second thing, to your point from a marketing perspective, yes, absolutely. Look, we are, as I mentioned, experimenting. This is a little bit of a Petri dish, and we're measuring everything. For those of you who know me, know that I do that.

Ali Dibadj: I'd like to think that over time, we can gain share through both of those vectors of growth. And I will say here, that the US intermediary team, as an example, where we've made some changes, some personnel changes, is really showing some signs of improvement along both of those dimensions, which we should be very proud of and shareholders should be grateful for. The second thing, to your point from a marketing perspective, yes, absolutely. Look, we are, as I mentioned, experimenting. This is a little bit of a etri dish, and we're measuring everything. For those of you who know me, know that I do that.

The driver of both of those and and I'd like to think that over time, we can gain share through both of those vectors of growth and I will say here that the U S. Intermediary team as an example, where we've made some changes some some personnel changes is really showing some signs of improvement on both of those dimensions, which we should be very.

Very proud of and shareholders should be grateful for the second thing to your point for marketing perspective, Yes, absolutely look we are as I mentioned.

Experimenting this is a little bit of a petri dish.

And we're measuring everything.

For those of you know me know that I do that we're measuring everything and we're seeing how we can test and learn and get a better understanding of where absolutely an advisor sees us and says hey, uhm I recognize that name.

Ali Dibadj: We're measuring everything, and we're seeing how we can test and learn and get a better understanding of where, absolutely, an advisor sees us and says, "Hey, I recognize that name. Sounds like they have something to say. Let me actually pick up the phone or respond to an email that I've received, or take that one-on-one meeting with investor or a salesperson." And in fact, Brian, we're seeing that play out. We're seeing that happen. There are clear anecdotal at this point examples of that, and we think we can continue to do that. Again, we're gonna test the ROI. We're not a, you know, pure B2C company, but we certainly think that there's opportunity to create a reminder of our brand in people's minds, both intermediary and institutional.

Ali Dibadj: We're measuring everything, and we're seeing how we can test and learn and get a better understanding of where, absolutely, an advisor sees us and says, hey, I recognize that name. Sounds like they have something to say. Let me actually pick up the phone or respond to an email that I've received, or take that one-on-one meeting with investor or a salesperson." And in fact, Brian, we're seeing that play out. We're seeing that happen. There are clear anecdotal at this point examples of that, and we think we can continue to do that. Again, we're gonna test the ROI. We're not a, you know, pure B2C company, but we certainly think that there's opportunity to create a reminder of our brand in people's minds, both intermediary and institutional.

Sounds like they have something to say, let me actually pick up the phone or respond to an email that I that I received or take that one on one meeting with investor or or a sales person and in fact, Brian we're seeing that play out we're seeing that happen. There are clear anecdotal at this point examples of that and we think we can <unk>.

<unk> to do that again, we're gonna test the R Y we're not.

Pure beat a C company, but we certainly think that there's opportunity to create.

A reminder of our brand in People's minds, both intermediary and institutions.

Brian Bedell: That's great. That sounds very encouraging. Great. Thank you.

That's great that's great that does that sounds very encouraging uhm great. Thank you.

Operator: Thank you. Our next question comes from the line of Ed Herring of CLSA. Your line is now open. Please go ahead.

Thank you.

Our next question comes from the lineup pairing.

Pairing C L. One.

A line for my <unk>.

Ed Henning: Thank you for taking my questions. Just the first one, just to clarify, did you expect, did you say you only expect one to two quarters of positive flows over the next two years? And in that, can you just highlight where you think the biggest headwinds on the flows will be for your business over the next two years?

Thank you for taking my questions. Just the first one just to clarify did you expect did you say you only expect one to two quarters and palsy flows over the next two years.

Any of that can you just <unk>, where do you think the biggest headwinds on the flows will be few business over the next to us.

Ali Dibadj: Sure. So our guidance, Ed, hasn't changed. We've given indication that we would expect the hard work that we're doing from a strategic perspective, whether that be the marketing that we talked about before, whether that be the personnel changes and continue to build a world-class team, whether that be the reorg that we've done to make decisions faster, whether it be the strategies that we played in, protect and grow, amplify, diversify, et cetera. We believe to show traction or proof that that is showing traction, the strategy is showing traction, would be one to two quarters of positive flows over the next, yes, one to two years. Now, we just had one, and we still think we can get one to two quarters, including this one, over the next one to two years.

Sure So our guidance it hasn't changed.

We've given an indication that we would expect the hard work that we're doing from a strategic perspective.

Whether that be the market and we talked about before whether it be the personnel changes and continue to build a world class team whether that be the reward that we've done to make decisions faster whether it be the strategies that we played in protecting grow at slagged diversify et cetera, we believe to show traction proof that that is showing traction that's patties showing <unk>.

<unk> would be one to two quarters of positive flows over the next one to two years now we just had one.

And we still think we can get one to two quarters, including this one over the next one to two years. It takes time as you all know as students of this industry to really get to consistently positively flowing businesses in this industry now that ties to your second question.

Ali Dibadj: It takes time, as you all know, as students of this industry, to really get to consistently positively flowing businesses in this industry. Now, that ties to your second question, which is if you look at the growth rate for this industry, it's not a rapidly growing business. And so the major headwind, to be fair, is the underlying growth rate from a net flows perspective in this industry. We are overcoming our self-created headwinds. Again, that will take time, but we continue to face the headwinds of the industry from a net flow perspective, at least on the active asset management side. Hopefully, that helps, Ed.

Which is if you look at the growth rate for this industry, it's not a rapidly growing business and so the major headwind to be fair is the underlying growth rate from a net flows perspective in this industry. We are overcoming our self created headwinds again that will take time, but we continue to paint the headwinds.

The industry from and that's low perspective at least on the act of an asset management side, hopefully that helps that.

Ed Henning: Yeah. And do you expect to still see outflows in equities and potentially inflows in fixed income? Like, how... or are you seeing this broad outflows from actively managed money still into ETFs or into private equity or other asset classes as a headwind for you and the industry, that is?

Ed Henning: Yeah. And do you expect to still see outflows in equities and potentially inflows in fixed income? Like, how or are you seeing this broad outflows from actively managed money still into ETFs or into private equity or other asset classes as a headwind for you and the industry, that is?

Yeah, and and do you expect to still see outflows.

Inequities and potentially inflows and fixed fixed income <unk> <unk>. What do you think this broad outflows from actively managed money still into a T S or into private equity or <unk> asset classes, and then hate waiting for you in the industry that is.

Ali Dibadj: Well, from an industry perspective, as I mentioned a second ago, I do believe, we do believe that the go-forward methodology of delivering capital to our clients and our clients' clients, delivering performance to our clients and our clients' clients, will not be the same as it has been over the past 10 years, because money won't be free going forward. The haves and have-nots differentiation will be much more important. Does that suggest that there's a wholesale shift from passive to active? Gosh, I would certainly hope so. I do think that our more sophisticated clients, which is usually the kind of leading indicator, are looking at that question very acutely and, beneficial to us, they're entrusting us with that point of view of haves and have-nots.

But from an industry perspective, as I mentioned, a second ago Uhm I do believe we do believe that to go forward methodology of of delivering capital to our clients our clients clients delivering performance to our clients our clients clients will not to be the same as it has been over the past 10 years, because money won't be free.

Going forward I have and have nots differentiation will be much more important.

Does that suggest that there is a wholesale shift from passive to active gosh I would certainly hope. So I do think that are more sophisticated clients, which is usually the lab.

Leading indicator are looking at that question very acutely and uhm beneficial to us there and trusting us with that point of view hasn't have not they're trusting us with the the brighter futures of their their client base.

Ali Dibadj: They're entrusting us with the brighter futures of their client base.

Roger Thompson: I think to add to that, Ed, yeah, we've talked a lot about institutional. I think, you know, another thing to make sure that, you know, you're aware of is the improvement in the US intermediary business. Ali's talked about some of the things that are coming further to that in terms of the brand campaign, et cetera. But some of the biggest improvements in US intermediary were actually in equity. And we've talked over the last year, probably about the significant improvement in the performance of Mid Cap Growth, which had some fantastic long-term numbers, but had a tough 2020, beginning of 2021. Had a fantastic 2022.

I think to add to that.

Yeah, we've talked a lot about about institutional.

I think another thing to to make sure that you.

You are aware of is the improvement in the in the U S. It to me to revisit that he's talked about some of the things that are coming further to that in terms of the brand campaign et cetera, but some of the some of the biggest improvements in in U S. U S. It to me to regret chili that quickly.

We've talked over the last maybe the last year, probably about the the significant improvement in the in the performance of mid cap growth, which had some fantastic long term numbers.

But I had to put out a tough 2020, beginning of 21 I had a fantastic 22.

Roger Thompson: And flows take a little bit of time to recover. But in Q1, we saw that, we saw that happen in our US advisory business. We saw a dramatic turnaround in Enterprise, which is that mid-cap growth strategy, as well as improvements in Overseas and Global Equity Income. So we are seeing some strong flows into equity.

Roger Thompson: And flows take a little bit of time to recover. But in Q1, we saw that, we saw that happen in our US advisory business. We saw a dramatic turnaround in enterprise, which is that mid-cap growth strategy, as well as improvements in Overseas and Global Equity Income. So we are seeing some strong flows into equity.

Take a little bit to talk to recover but in Q1, we saw that we still that happened to the level you are supposed to be business, we sort of dramatic turn around in an enterprise, which is kept growth strategy as well as improvements he'd overseas and global equity income. So we are seeing some some stroke flows into into equity.

Ed Henning: Okay, no, that's helpful. But then just to go back on it, where do you see the outflows? Is it just across the business and across just industry trends, before, you know, it's just the not getting the gross inflows, so you've just got natural outflows that they're going to drive it for the next couple of years?

Okay. Now that's that's helpful. But then then just to go back on <unk>, where do you see the app claws, just across the business and across just industry industry trends before you know it was just not.

Not getting the garage inflows digits of natural outflows, if they're gonna drive up to the next couple of years.

Ali Dibadj: Look, I think we are looking to stem the tide of the industry trends, which overall have not been an extremely fast-growing business.

Uhm.

Ali Dibadj: Look, I think we are looking to stem the tide of the industry trends, which overall have not been an extremely fast-growing business.

Okay. I think we are looking to stem the tide of the industry trends, which overall have not been.

Next we're only fast growing business.

Operator: Our next question comes from the line of Bill Capps of Credit Suisse. Your line is now open. Please go ahead.

Alright, <unk> come from a line of credit.

Credit correct. Your line for my account. Please go ahead.

Bill Katz: Thank you so much. Good morning, good afternoon, everyone. Just coming back to expenses for a moment. As you think through your initiatives to reposition the platform across your three initiatives, where are you in terms of that spending cycle? Is that something that you would expect to complete this year, or would you expect that spending pace to continue into next year? And then, if so, how might you fund that?

Thank you so much good morning, everyone just coming back to expenses for a moment as you think through your initiatives to reposition the platform of course, you're three initiatives.

Where are you in terms of that spending cycle is that something that you would expect to complete this year would you expect that spending pays to continuing to next year and if so how about you find that.

Roger Thompson: Yeah. So, it's a good question. Thanks, Bill. I think first of all, as I've said, and hopefully I've been clear, that our expenses, particularly in non-comp, are low in Q1, and the guidance we've given of an increase of mid-to-high single digits year-on-year still stands, which means we'll accelerate in quarters Q2 to Q4. And that's because we've realized our what we call our fuel for growth savings, where we've looked to be more efficient in our business, the $40 to 45 million of cost saves that we talked about in the summer of last year. We've realized much of that, and that's a little bit ahead of where we've been investing in these strategic initiatives.

Yes, good questions and thanks, Bill I think festival is upset and hopefully I've been clear that that our expense expenses, particularly in known called a low in Q1.

The guidance, we've given a of an increase of of.

Single digits year on year still stands which means we'll accelerates and coaches Q Q2, Q4, well that's because we've we've we've realized will be caught off fuel for growth savings, where we've looked at to be more efficient to that business to $40 million to $45 million cost states that we talked about in the summer of last year.

We've realized much of that Ah, that's a little bit ahead of where we would be the best thing in the strategic initiatives and Sally said Brian .

Roger Thompson: As Ali said, this important brand campaign actually kicked off in April. So you'll see that acceleration coming through in Q2 to Q4. I think your broader question is, are we then done? Yeah, we will look to continue to fund through efficiency. So, you know, if we continue to see, and as Ali said, we're testing and learning through this. So if we are looking to spend more money, it's because we're seeing success. So I think, you know, we're making the investments this year. If we succeed, if we see success in that, then we can continue to invest. Otherwise, we're probably, you know, we're at a good level as where we are.

Brian campaign catch the kicked off in April .

So you'll see that acceleration coming through in in Q2 to queue for I.

I think you'll you'll you'll border question is are we then dove.

Yeah, we will look to continue to to to.

To to fund.

Through efficiency.

So if if we seek continues to see another side, he said with with testing and letting through this.

So if we are looking to spend more money, it's because we're seeing success.

So I think you know, we we're making the investments this year. If we if we see success in that then we then we can continue to invest otherwise, we'd probably that we had a good level is where we are.

Roger Thompson: But there are other things out there as well. You know, it's an inflationary environment, as we all know. You know, the dollar has come off its extremely strong highs. So we're seeing some cost acceleration elsewhere, but that's all built into that guidance.

But there are other things out there as well, it's inflationary environment as we all know.

Yeah.

Always come off it's extremely strong cause so we're seeing we're seeing some cost acceleration elsewhere, but that's built into that guidance.

Bill Katz: ... Okay, thank you. And then, Ali, maybe one for yourself. Just you mentioned a couple of times throughout the call in the Q&A that the M&A pipeline sort of seasoning nicely. If you were to sort of think about the maybe two or three key areas of focus for you to complement your existing book of business, what might that be? And then how should we be thinking about sizing or maybe seasoning of that specific line of portfolio, pipeline, excuse me. Thank you.

Bill Katz: Okay, thank you. And then, Ali, maybe one for yourself. Just you mentioned a couple of times throughout the call in the Q&A that the M&A pipeline sort of seasoning nicely. If you were to sort of think about the maybe two or three key areas of focus for you to complement your existing book of business, what might that be? And then how should we be thinking about sizing or maybe seasoning of that specific line of portfolio, pipeline, excuse me. Thank you.

[noise]. Okay. Thank you and then I only made me want yourself does she mentioned a couple of times throughout the call. The Q&A that the everyday pipelines sort of ceasing nicely. If he were to sort of think about maybe two or three key areas of focus for you to compliment your existing book a business what might that be and then how are ya.

How should we be thinking about sizing or maybe seizing of that specific line a portfolio pipeline excuse me. Thank you.

Ali Dibadj: Sure. Thanks, Bill. So our view on M&A hasn't really changed. I'll answer the back half of your question before the front half. Our view on M&A is that acquiring things that our clients want from us is a good game plan. What generally that means is that clients don't look for us necessarily to just have scale of size, right? Just being bigger in something, buying things that overlap with things that we already have, doesn't generally serve the purpose of what a client wants. We already have it. It's already very good. We can deliver that to the client with our world-class client service and investment acumen. However, if it's something that we don't have, something that clients want from us, we can acquire to build our scale of skill.

Sure. Thanks, though.

So our our view on M&A hasn't really changed you'll answer the back half your question before the front half.

Harvey on M&A is that that acquiring things that our clients want from US is a good game plan.

What generally that means is that clients don't look for us necessarily to just have scaled size like just being bigger than something buying things that overlap with things that we already have doesn't generally serve the purpose of what a client wants we already have sorry, very good uhm, we can deliver that to decline with our world class client service and invest.

Acumen. However, if it's something that we don't have something that clients want from us we can acquire to build our scale of skill.

Ali Dibadj: The emerging market debt example is a great example and a test case for us on that front. So, we're not looking to get bigger for the sake of getting bigger. We're looking to get bigger because we can bring more skill sets to our clients to build off of the very strong foundation that we already have, which we are very, very positive on and can continue to improve. Now, if you think about where clients are giving us the right to diversify, it's very clearly around a few areas. Mostly under the... Well, most importantly, under the privates rubric. So take private credit, for example. From a private credit perspective, there are many different flavors.

Emerging market debt example is in a great example, in a test case for us on that front.

So we're not looking to get bigger for the sake of getting bigger we're looking to get bigger because we can bring more skill sets to our clients to build off of the very strong foundation that we already have which we are very very positive on and can continue to improve.

Now if you think about where clients are giving us the right to diversify it's very.

Clearly around a few areas, mostly under the most importantly under the private <unk>.

Rubric, so take private credit for example.

From a private credit perspective are there many different flavors, obviously private credit were being very judicious given us market environment about what we what we should and could do for our clients, but they're seeing us from a fixed income perspective, having a very very good franchise underlying what we do and fixed income from a performance and process and people perspective, what can we augment that in the private <unk>.

Ali Dibadj: Obviously, private credit, we're being very judicious, given this market environment about what we should and could do for our clients. But they're seeing us from a fixed income perspective, having a very, very good franchise underlying what we do in fixed income from a performance and process and people perspective. Well, can we augment that in the private world, where a lot of our clients are looking at? So we are very clearly looking at that. And the benefit would be to, you know, buy or partner with a group of folks who want to grow their business, not just to tick the box, but grow their business, and really fit into our extraordinarily robust and increasingly strong distribution pipe, so to speak, to deliver on our clients.

Hold for a lot of our clients are looking at so we are very clear looking at that and the benefit would be too bye.

By her partner with a group of folks who want to grow their business not just to tick the box, but grow their business and really fit into our extraordinary robust and an extra <unk> strong distribution pipes, so to speak to deliver on our clients. So it's one of the big areas of an example that we've talked about before but there are other possibilities.

Ali Dibadj: That's one of the big areas of an example that we've talked about before, but there are other possibilities, right? We are unlikely, for example, to go into the pure kind of private equity world on the flip side of privates. But could there be ways that we participate in that growth cycle over time? We could. We have to think about other and creative ways to buy and partner as well as build internally. But the main focus right now, Bill, is around the broader privates landscape for us.

Right Uhm.

We are unlikely for example to go into the pure kind of private equity world on the flip side of private but could there be way that we participate in that in that in that growth cycle over time, we could we have to think about other than creative ways to.

<unk> bye and partner as well as built internally, but the the main focus right now bill is around the broader privates landscape for us.

Bill Katz: Thank you for taking the questions.

Thank you for taking the questions.

Operator: Thank you. Our final question of the day comes from the line of John Dunn of Evercore. Your line is now open. Please go ahead.

Okay.

Final question today comes on the line.

<unk> ethical your line into my <unk>.

John Dunn: Thank you. Maybe just a quick one, on ETFs. Is there an outlook for maybe more launches given how well AAA and MBS have gone? And then maybe outside of ETFs, any other launches on the horizon, we should- you would highlight?

Thank you <unk> just a quick one an E. T X is there and how it looks or maybe more launches, giving how L. Triple a and N. B S is gone and then maybe outside of ETS any other launches on the horizon you would highlight.

Ali Dibadj: Sure. Let me start there. On ETFs, as you know, at over $6 billion of AUM within ETFs in a relatively short period of time, we are very pleased with the success there and expect continued success in that area. Our philosophy is again, I'll be a broken record on this, but it's really important to be client-led. So if we have a set of investment skill sets that can be utilized to the benefit of our clients, and if the client wants it in form X versus form Y, sometimes I call it if they want it in pink or if they want it in yellow, we should be able to deliver it in pink or in yellow.

Sure. Let me let me start there on on ETS as you know at over $6 billion of AUN within ETS in a relatively short period of time.

We are we are very pleased with the success there and expect continued success in that in that area.

Our philosophy is again I'll be broken record on this what's really important to be client. Let so if we have a set of investment skill sets them that can be utilized to the benefit of our clients.

Client wants it and form experts form why sometimes I call. It if they want it and pink or if they wanted and yellow, we should be able to deliberate and pink or in yellow and ETF is one of those wrappers vehicles that we can provide to our clients and put our clients right now uhm. Unfortunately in the in the retail world, Okay get get access to things.

Ali Dibadj: An ETF is one of those wrappers, vehicles, that we can provide to our clients, in particular our clients right now, disproportionately in the retail world, who can get access to things that they can't get otherwise. These are institutional-level products that we're bringing to the retail environment, similar to what we're doing from a retail set of products that we are institutional level, that we're bringing to institutional. In ETFs, the broader scope of it is around some of the securitized skill sets that we have internally in our fixed income landscape and bringing that to our client base. Have we filled out the suite? No, we haven't filled out the suite that we could fill out, but we're seeing a lot of success and a lot of focus on the ETFs that we have right now.

They can't get otherwise either institutional level of products.

That we're bringing to the retail environment similar to what we're doing from Ah Ah Ah Ah retail set of products that we are institutional level, there were bring to institutional and etf's.

The broader scope of it is around some of securitize skill set that we have internally in her fixed income landscape and bringing that to our client base, how we filled out the sweet no. We haven't filled out this week that we could fill out but we're seeing a lot of success in a lot of focus on etf's that we have right now so I would anticipate moral lunches they're building.

Ali Dibadj: So I would anticipate more launches there, building on the success that the team here has built. Will there be new launches otherwise outside ETFs? To the second part of your question, the short answer is yes, right? We, we have to be innovative in what we deliver. We did launch, I believe, 2 new products in Q1, around the world. We will continue to drive new products. But again, we're not throwing spaghetti at the sticks at the wall and seeing what happens, but we're going to be very disciplined, very diligent with the capital and the effort that's required to do that, because we have a great foundation of businesses already, investment processes and acumen already, that we can already expand and bring to our client base.

Building on the success that that that the team here has has built.

Will there be new launches otherwise outside etf's to the second part of your question and the short answer is yes, alright, we we have to be innovative and what we deliver we did launch I believe two new products in Q1 around the world. We will continue to to to drive new pox, but again, we're not throwing spaghetti.

<unk> sees and seeing what happens and we're gonna be very disciplined very diligent with a capital and the effort that's required to do that because we have a great foundation of businesses already investment processes and acumen already that we can already expand and and bring to our client base. So yet there'll be more but will be judicious delivering to our clients needs.

Ali Dibadj: So yes, there will be more, but we'll be judicious in delivering to our clients' needs based on the foundation that we already have.

Based on the foundation that we already have.

John Dunn: Got it. And then just maybe regionally, you mentioned a pickup in US intermediary, maybe a little more muted in European retail. Can you just frame Asia channel-wise, maybe outside of Australia?

Got it and then just maybe originally mentioned to pick up the new at you I think the media or maybe a little more muted and European retail can you just Scream Asia channel wise, maybe outside of Australia.

Ali Dibadj: ... I'd say relatively steady in that marketplace. There's a little bit of a wait and see from a geopolitical perspective that we hear from our clients out there. I don't think there's massive money in motion at this point, but we are, again, in the desire of growing our business. We are very much looking to deliver for clients in those regions. We see an enormous amount of opportunity, which will come over time again. But market share for us is going to be part of the name of the game in that marketplace.

Ali Dibadj: I'd say relatively steady in that marketplace. There's a little bit of a wait and see from a geopolitical perspective that we hear from our clients out there. I don't think there's massive money in motion at this point, but we are, again, in the desire of growing our business. We are very much looking to deliver for clients in those regions. We see an enormous amount of opportunity, which will come over time again. But market share for us is going to be part of the name of the game in that marketplace.

I'd say relatively steady in that marketplace, there's a little bit of a wait and see from a geopolitical perspective that we hear from our clients out there.

I don't think there's there's.

Massive money in motion at this point.

But we are again in the in the desire of growing our business. We are very much looking to deliver it for clients in those regions, we see enormous amount of opportunity, which will come over time again, but.

But market share for us is going to be part of the name of the game that marketplace.

Brian Bedell: Thanks very much.

Thanks very much.

Operator: Thank you. As there are no additional questions waiting at this time, I'd like to hand the conference back over to Mr. Dibadj for closing remarks.

Thank you.

I'm not a customer question linked to at this time I'd like to have the confidence okay that sounds pretty fast okay remarks.

Ali Dibadj: Well, thanks, Candice. Thanks, everybody, for joining. Hopefully, this quarter's results suggest that the team here at Janus Henderson, who I'd like to thank, is working extremely hard, aligned with our strategy, making changes to deliver for our clients, our shareholders, our other stakeholders, and over time, we'll continue to deliver progress like this. Thanks very much, everybody.

Well. Thanks candid thanks, everybody for joining hopefully this quarter's results suggest that the team here tennis Henderson, who I'd like to think is working strongly heart.

Align with our strategy uhm, making changes to deliver for our clients are shareholders other stakeholders and uhm over time will continue to deliver progress like this thanks very much everyday.

Operator: Ladies and gentlemen, this concludes the Janus Henderson Q1 2023 results briefing. Have a great day ahead. You may now disconnect your lines.

Okay.

Alright, Jacqueline can can you <unk> have a great day ahead marked disconnect your lines.

[music].

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