• Net Inflows: $2.4 billion for the full year 2024, with $3.3 billion in the fourth quarter.
• Ending AUM: $378.7 billion, a 5% increase over the 2024 average AUM.
• Net Management Fee Rate: 48.6 basis points, decreased by 1 basis point over the last two years.
• Adjusted Diluted EPS: $1.07, a 30% increase compared to the same period a year ago.
• Cash Returned to Shareholders: $458 million in 2024 through dividends and share repurchases.
• Performance Fees: $68 million in the fourth quarter.
• Adjusted Operating Margin: 36% for the fourth quarter, a 180 basis point increase from a year ago.
• Cash and Cash Equivalents: $1.2 billion as of December 31, 2024.
• Dividend: $0.39 per share declared for February 27, 2025.

• Warning! GuruFocus has detected 6 Warning Sign with JHG.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Janus Henderson Group PLC (NYSE:JHG) achieved $2.4 billion in net inflows for 2024, a significant turnaround from $31 billion in net outflows two years ago.
• The company maintained a relatively stable net management fee rate of 48.6 basis points, demonstrating resilience against industry fee pressures.
• JHG expanded its capabilities with strategic acquisitions, including NBK Capital Partners and Victory Park Capital, enhancing its presence in emerging markets and asset-backed lending.
• The firm launched its first European ETFs following the acquisition of Tabula Investment Management, indicating growth in the ETF market.
• Strong financial performance allowed JHG to return $458 million to shareholders through dividends and share repurchases in 2024.

Negative Points

• Despite positive net inflows, ending AUM was down 1% from the third quarter due to adverse markets and currency adjustments.
• Equity flows remained negative at $2.5 billion, reflecting challenges in the active equities environment.
• The company faces relentless fee pressures in the asset management industry, impacting profitability.
• Net outflows in the self-directed channel were $1.1 billion, indicating challenges in retaining direct and supermarket investors.
• The institutional segment, while showing improvement, still requires a sustainable pipeline to ensure consistent growth.

Q & A Highlights

Q: Ali and Roger, curious about the ETF strategy. Momentum has been really quite solid. Could you maybe give us an idea about how you're thinking about bringing equity products? What are the plans for 2025? A: Ali Dibadj, CEO: We're proud of our ETF franchise, now the eighth largest provider of active ETFs globally. We see enormous opportunity in the ETF landscape, particularly in fixed income. We've launched a couple of equity ETFs and plan more, focusing on unique and differentiated products. Outside the US, the Tabula acquisition helps us drive ETF growth in Europe, where we see patterns similar to the US market from years ago.

Q: Roger, could you please let us know what kind of operating leverage you'd expect in both comp ratio and on the sensitivity for non-comp to upside from market beta? A: Roger Thompson, CFO: Our comp ratio has decreased over the last year and should continue to do so with flat markets. Positive markets would mean more leverage, with the comp ratio coming down and the operating margin going up. However, it's not a straightforward calculation as it depends on various factors.

Q: Ali, my question is on fixed income. Investment performance is currently very strong. What factors and themes do you attribute the strong performance to besides just security selection? A: Ali Dibadj, CEO: We're pleased with our fixed income performance, driven by security selection and allocation across asset classes and regions. Strategies like multi-asset credit and fixed income ETFs have performed well. We see opportunities in securitized markets and are investing to grow this business.

Q: How do you think about the opportunity on the inorganic side? And could you talk about the possibility of beefing up your ownership of Privacore? A: Ali Dibadj, CEO: The M&A pipeline is robust, and we're disciplined in our approach, focusing on client-led opportunities. We're integrating recent acquisitions and remain open to future opportunities. Roger Thompson, CFO: Regarding Privacore, we're optimistic about its potential and are in active dialogue about strategic options, including possibly extending our ownership.

Q: Could you talk about how you're thinking about and investing in technology to enhance your investment engine and support alpha generation? A: Ali Dibadj, CEO: We're investing in technology to improve investment processes, client service, and employee productivity. AI is a key focus, with tools like an AI-powered distribution intelligence platform and an RFP tool to enhance efficiency. We're partnering externally and building internally to leverage these technologies.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.