Janus Henderson Group PLC Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ken Worthington - JPMorgan Chase & Co. - Analyst : Thank you for taking my question. Can you talk about the build-out of the institutional pipeline and the focus on the $100 million to $400 million mandate wins? How is this build-out progressing? I think last quarter you talked about the diversity of institutional wins. As that pipeline rebuilds, from which geographies are you seeing the greatest demand, and which products and asset classes seem to be of the greatest interest?

Question: Ken Worthington - JPMorgan Chase & Co. - Analyst : Great. Thanks for taking my question. Thanks, Ken.

Question: Dan Fannon - Jefferies Financial Group Inc. - Analyst : Thanks. Good morning. So, question just on ETF flows. You've obviously had a lot of success. I was hoping to put your context around sustainability for some of the products in a lower-rate environment. And then, also, there appears to be, as always in this market, more competition. So, how do you think about kind of sustainability or defending your kind of the early lead that you have in some of these products?

Question: Dan Fannon - Jefferies Financial Group Inc. - Analyst : Great. That's helpful. And then just as a follow-up Roger, I understand the guidance for this year, but just as we think about 25, I know it's a bit early, but you're having success with the elevated investment as we think about flows and some of the momentum you talked about. How should we characterize the pace of investment as we think about 2025, given, as I said earlier, some of the success you're having today?

Question: Patrick Davitt - Autonomous Research LLP - Analyst : Hey, good morning, everyone. Follow-up on Dan's ETF questions. Obviously, a good problem to have. But without the strong inflows to the AAA ETF, you would still be in fairly consistent outflow. So I'm curious if you have any of the thoughts on the potential to get the large flagship active equity products back to inflow in a world that seemingly still has little demand for products like that, regardless of performance. Thank you.

Question: Bill Katz - TD Cowen - Analyst : Okay, thank you very much for taking the question. I did join a little late, so I apologize for that. I think you guided for performance fees to be up year on year, which is a nice surprise to what we were thinking about. I was wondering if you could unpack that a little bit. If you've already covered this, I apologize, but if you could unpack it between maybe what you're seeing in the non-mutual fund platform, and then based on our math, I think that sort of moves to break even in the fourth quarter. Is that the right way of thinking about the delta here as we look at quarter-to-quarter or year on year? Thank you.

Question: Bill Katz - TD Cowen - Analyst : Okay, that's helpful. And then just as a follow-up, I noticed that the board increased the buyback authorization by $50 million up to, I think, $200 million. And just given what looks like a very strong balance sheet at the end of the quarter, I'm not sure there's any timing in there of sort of ins and outs. Just conceptually, you've done a couple of deals now. Your balance sheet's in great shape. Buying back a bit more stock. How do we think about just sort of incremental deployment from here? And maybe you could sort of parse that between what you might be looking at on the inorganic side versus capital return to shareholders. Thank you.

Question: Craig Siegenthaler - BofA Securities Inc. - Analyst : Good morning, Ali. Hope everyone's doing well. My question is on the insurance channel. So we've watched you guys be very active on the M&A front, expanding into privates and ETFs, but we think one area where Janus can do more is in insurance. So we wanted to get an update on your appetite to form strategic partnerships, IAM agreements, or raise SMAs with third-party life companies. And do you have enough product now, especially in private credit, with the victory acquisition, which could help you compete in this channel.

Question: Craig Siegenthaler - BofA Securities Inc. - Analyst : Thanks, Ali. We have a follow-up on Privacore, and I know it's early innings, but have there been any additions to the platform in 3Q in October? And also, I think potentially, could we see you add to your minority equity stake and I know there was a big $200 billion AUM alt manager that was added early in the year, but I think that was before 3Q, so we're looking for anything incremental.

Question: Mike Brown - Wells Fargo Securities LLC - Analyst : Great. Thank you for taking my question. I just have one on the institutional pipeline. A large bond manager is seeing significant flow pressure, and understanding that's a somewhat sensitive topic to talk about competitors. I guess I'm curious if your fixed income business is seeing it pick up in activity, has the pace of RFPs picked up in the last two months, and could this be an opportunity for Janus Henderson?

Question: Mike Brown - Wells Fargo Securities LLC - Analyst : With mandates in a situation like this, is the timeframe somewhat faster or kind of similar to what a typical kind of institutional mandate would be?

Question: John Dunn - Evercore ISI - Analyst : Thank you. So the multi-asset segment remains in slight outflow. Maybe could you talk about what do you think it's going to take to see better inflows in the balance fund?

Question: John Dunn - Evercore ISI - Analyst : Got it. And then my other one was, how are you thinking about integrating your acquisitions? Are they going to be more like affiliates or something more integrated? And to the extent you do more in private credit, would it be like bolting on to Victory Park or just maybe your philosophy around that?

Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst : Great, thanks. Good morning. I just wanted to ask on the distribution side of the organization, data on some of the changes you've made across the distribution side of the organization over the past couple of years, which changes do you think have been most meaningful for the growth that you're seeing today in inflection? How do you anticipate the distribution team evolving as you kind of look out from here? And maybe you could tie into that, how might you evolve the client experience in the next several years as well? Thank you.

Question: Luke Bianculli - The Goldman Sachs Group Inc. - Analyst : Hi, all. Luke here on for Alex. Thanks for taking the question. Just one for me, and I apologize if I missed this earlier, but I wanted to get your thoughts on the near- to medium-term growth drivers for VPC and what the differentiated strategic angle is for VPC from partnering with JANUS specifically. Thank you.

Question: Luke Bianculli - The Goldman Sachs Group Inc. - Analyst : Appreciate all the color. Thanks again.