Janus Henderson Group plc Q3 FY2025 earnings call

Strategic Vision - 3 pillars: protect and grow core businesses, amplify strengths not fully leveraged, diversify where clients give right to win. - In Protect & Grow: Upskilling and using data/process best practices to drive market share and organic growth. For example, 21 strategies had over $100M net inflows in Q3 vs 11 a year ago. - In Amplify: Partnership with CNO Financial Group for long-term capital to accelerate Victory Park Capital's growth; launched active ETFs like JABS, JHAI, JTXX. - Diversified: Successful first close of non-U.S. direct lending vehicle by emerging markets private investment team. ### Other Highlights - Transition to Aladdin investment management system: Expected to increase adjusted operating costs by ~1% in 2026-2027 but deliver long-term efficiencies. - Return of capital: Returned nearly $130 million this quarter via dividends and share buybacks, cumulative share count reduction 23% since 2018.

Assets under management (AUM) of $483.8 billion increased 6% over the prior quarter and 27% year-over-year, with September AUM reaching a record near $0.5 trillion. Net inflows for the quarter were $7.8 billion, marking the sixth consecutive quarter of positive net flows and a 7% organic growth rate. Adjusted diluted EPS was $1.09, 20% higher than the same period a year ago. By segment: Equity flows were negative $3.3 billion, impacted by a merger, but CITs, active equity ETFs, etc., had positive flows; Fixed income had net inflows of $9.7 billion, driven by active fixed income ETFs, Australian fixed income, etc.; Multi-asset was breakeven, offset by balanced strategy outflows; Alternatives had net inflows of $1.4 billion, driven by absolute return, etc. Revenue contribution: AUM growth and net inflows contributed to overall financial performance.

Non-comp expenses - Expect high single-digit percentage growth in full-year 2025 non-comp expenses compared to 2024, reflecting investments in strategic initiatives, operational efficiencies, inflation, consolidation impacts, and FX. ### Aladdin transition - Anticipate higher adjusted operating costs in 2026 and 2027 from the Aladdin transition, with expected operational improvements and efficiencies starting in 2028 and beyond. Full-year 2026 guidance to be provided on the next quarterly call.

• Uncertainty surrounding Trian's nonbinding proposal to acquire Janus Henderson, with no assurance of a definitive agreement or transaction consummation. - Market volatility affecting investment performance and flows. - Integration risks associated with the transition to the Aladdin investment management system, including potential challenges in achieving expected efficiencies and cost savings.

Q: Ken Wellington from JPMorgan asked about the story behind improved gross sales and which initiatives are translating to results.

A: Ali Dibadj responded that on the intermediary side, it's about having the right people, products, and using data to target clients; on the institutional side, it's about building relationships beyond transactional ones and leveraging brand campaigns.

Q: Bill Katz from TD Cowen asked about driving expenses, growth as a public company and Aladdin leverage.

A: Ali Dibadj said they invest where ROI is seen, with non-comp expenses expected to grow high single-digit; Roger Thompson added Aladdin transition will have short-term cost increases but long-term benefits.

Q: Craig Siegenthaler from Bank of America asked about Victory Park's AUM growth and future growth.

A: Ali Dibadj discussed Victory Park's role in Privacore, MENA private credit business, and partnership with CNO Financial Group, noting opportunities for growth in private markets.

Q: Patrick Davitt from Autonomous asked about bank loan market impact on flows.

A: Ali Dibadj stated active asset management is key, with CLO products having better cash flow protections, and distributors not expressing concerns at the time.

Q: Brennan Hawken from BMO asked about special committee process and equity ETF strategy.

A: Ali Dibadj said special committee process is ongoing over months; Roger Thompson mentioned ETF progress with diversified flows and plans to continue launching equity products based on client needs.

Q: Michael Cyprys from Morgan Stanley asked about investment prioritization and organizational capacity.

A: Ali Dibadj and Roger Thompson responded that they prioritize investments based on ROI, with organizational capacity and cost being critical factors, and they are disciplined in spending in right ways.