Janus Henderson (JHG) 3 Feb 222021 Q4 Earnings call transcript

Good morning. My name is Alex, and I will be your conference facilitator today. Thank you for standing by, and welcome to the Janus Henderson Group Fourth Quarter and Full Year 2021 Results Briefing. [Operator Instructions]. In today's conference call, certain matters discussed may constitute forward-looking statements. the materially a projected but company's number to, described differ statements the not most could Risk made those to and with and due of in recent recent results Form from of other in those forward-looking limited Factors XX-K Actual sections statements more the filings forward-looking factors, SEC. including, the call. update no assumes statements forward-looking Henderson any obligation to during Janus the made you. Thank

Henderson. Mr. it my Janus Executive to Officer conference. Dick your introduce Chief you is Weil, Weil, Now pleasure begin may of

Welcome, everyone, our XXXX and Janus I'm to the and by full Weil, Roger CFO, fourth Henderson earnings year quarter as Dick joined the call I'm Thompson. usual, for Group.

Garden get I'll summary to benefiting simple presentation, on excellence. I'll trying I want shareholder, of and you fresh brief into of want to made partners a take to we I strategy we've progress with give today's our welcome XXXX also valuable The their of results, perspectives. that to our and on today. to announced forward then from In company looks Board delivery our the largest moment INTECH update Before and Ed insights Directors. from a we've provide Nelson touch towards of an results. transaction Peltz our

then then our prepared following I'll Roger, who take results And precision. questions. will over usual, hand As to the remarks, it more take you with through your we'll

X. Slide Turning to

improvement showed year full prior significant results the Our year. over

financial very Our strong. full the results for were year

billion full adjusted XX.X%. diluted a of which Also of record was record our EPS for last year $XXX Henderson. adjusted increased a year, margin Our Janus AUM operating over XX% and

business This in XX generate to cash as million to well in increased continue return the to reinvest enabled capital flow shareholders. months. from flow led the to operations Our cash in to us $XXX as both profitability almost last significant us

X% of we X% per outstanding. and the a over returned increase million total to approximately share Over by the dividends in repurchasing shares year, $XXX shareholders through

invested million. an have $XXX that their on benchmarks in but additional X-, X- assets working XX% year. XX-year solid seed our over over our some million performance $XXX products, us Investment volatile also remains beat XX%, bringing and to time of respective XX% certainly we're a and We for We the challenges seed X-, book periods. XX%, in

excluding mentioned, With year. our markets, for in our impact the year. up benefit as we of moment of headline ended aim said. said, even more $XXX of despite is near-term the marked INTECH on to given flow I positive want previously as that INTECH, flows update The net I at we compared exclude billion, That challenging good also AUM prior had improvement a the from in if the to flows, momentum flows Quanta you equities.

EMEA in in billion We're a improvement we $X.X were into outflows not $XX to net year-on-year. INTECH, it billion is Pacific, and year, to Asia want where Excluding our XXXX. channel significant multi-asset by Lat compared income XXXX fixed equities be, strong Flows for but was net the intermediary in positive, and our Am. by client and demand offset capabilities was outflows driven which were positive in

Turning to Slide X.

you update we me morning. Let the of announced management buyout this on INTECH

the their investment. business opportunity desire to operate Henderson provides future. focus fulfills with them have made management challenges a flows management performance to firms. buyout. years. independently, fundamental that delivering our sell and on know, of to and agreement INTECH's business number decision best in and active its experienced it INTECH reached you and employees investment in We're to We success benefits to the And both an gives pleased As quantitative investment of It efficiency has for operating grow strategic Janus that the in increased solutions core the

our growing So platform. and we've resolved simplified about strengthened we're optimistic the challenge from INTECH, and

Turning strategy each of simple of accomplishments X want you some the pillars. the to talk to its year of in excellence. the of I through

investment dependable remains people our are continue strengthen produce performance risk-adjusted technology returns to to and continue we for outcomes. invest solid. mix Investment We to There in performance, pockets and clients. of

our We and enhanced distribution leadership and forward. and with and also should sales globally senior made We appointments clients critical number deepen consultant our a experience. relationship client our relations experience that client in going to of serve

Chief infrastructure a efficiency who run strengthening Operational important for very He's business made us in focus October. helping JR talented of to strength in was further role our Lowery, Another of firm appointment newly in our joined executive and contributions for our the be already key addition significant continues Global added very committee. to Operating our and business. he's created the our Officer

simplify to order to make continue to platform and and architecture transformational and we way enhancements deliver in in projects, These management CRM expected make to technology in substantial order in our our our also continued data are investments significantly to We've the which future strengthen We systems. are in growth. improve work. which

this earlier our made team year, Janus we them And brand strategic the and umbrella. former sell example, For announced Perkins INTECH. changes Henderson today, we the under to brought decision to

some more growth evidenced in is our and spend to been I'm actively capital been work foundations expansion to regulatory going and to lower environment opportunities. risk we've has by requirements. work not our much capital is has return shareholders. in doing but the of assisted This critical something building This pursue enabling efforts to Our time year, control discussing, long-term us us

focused a also spread estate a including ESG, sustainable sustainable regime launched growth equity the X to vehicle. real active that started to growth, sustainable finance make under X across We the we ETFs successfully of globally. U.S. These income In and the of These Europe, fixed we XX fund global initiatives. products. in U.K. we year, Australia, year an technology suite launched had the new progress we include a alternatives. Article U.S. We including X our active launched real sustainable products launching new products most in and our successful new our strategy, ETFs, as developing areas ETF. ETF. EU funds disclosure In extended in During including new were

XXXX, Article to our billion we the X CCAP Article Globally, since forward growing $X on multi-strategy fund. in hedge we This of approximately funds. has to end be the net X. X By we funds the CCAP it rollout focus the gained range X, Article our has Article a expect inflows XXXX. in We extended to we UCITS continue launched bright AUM It June reach product look XX% and momentum of designated exceeded both in future. and month, in of of in and of

with fine work that team. will continue We of growth the expect that

to In had growing that early providers U.S. to we portfolio our launches, forward successes product in look the addition in to model continuing some relationships we success. grow Again, with

We invest ESG their to size within ESG the of our our substantially our the sustainability to central managers both in also in investments and investments better teams tripled continued than products. team more and across portfolio investments. growing support of We delivery

operating deliver growth start big data building optimistic credible key right our in year momentum capturing is Last made put foundation strengthening and a real a ESG flows. to I'm we strong organic which the the Janus building in well a gaining very placed in opportunities architecture, future. growth place of and progress, to and Finally, strides in blocks platform. is organically, Henderson platform We've year ESG was

over the you with it Roger, me now precision. take more results to turn who through Let can

and joining the on you, Thank Starting results. us. you, Dick, with thank Slide fourth everyone, for X quarter

a result EPS. discussed and I'll already AUM outflows The Net has outflows continue touch multi-asset to of flows billion . the $X.X by inflows on into $X.XX be of by at financial to a outflows Dick year ago. $X.X in same performance of results the the ago equities, As remaining offset were of partially investment briefly and strong, which our with driven quarter, income in at The on compared as year, billion $X.XX solid fixed and $X.XX a our the primarily end quarter capabilities. INTECH. were were EPS period

make of of total be flows performance on, the showed quarter, INTECH. on will performance discussing comments announcement the including we regarding sale a how wanted for to moving the investment flows Before We today's light INTECH. investment few and and in I

excluding and our investment how flow closes. the going However, after forward discuss we transaction represents results this as look also show will will the INTECH, business and performance

the flows, the more company XXst of U.S. of X Investment performance. top remains improvement INTECH. over Slide again investment significant excellent such quarter, to as beating and pleased over that X income, performance with of Equity areas Slide strength in and shows have X in December. all assets as very peers is quartiles in with of performance real AUM we their improved periods Performance and periods. compared growth. majority Mid-Cap solid, of fixed and Moving represented over mixed, but alternatives to all competitive. relative strategies now some total benchmarks is this the Morningstar XX% and We're respective multi-asset including

flow won't the speak I include, provided Although the flow fourth quarter about results. we results

to how to on flows, look excluding business INTECH, Slide reflects Turning our which focus X going forward. will

for billion X% results year. compared growth XXXX, compared XXXX of to organic quarter, continues negative $XXX million The excluding quarter. improved be, $X much INTECH, outflows a was expected where were yet compared to the For trend not Net flow last and we to in the year and negative and X% fourth negative net XXXX rate the to was and the full The the quarter X% prior respectively. for

higher The experienced intermediary the EMEA. fee and across significant the you the were our largest by products in Asia in for remains offset rates slow strategies due positive the flows. strategies. outflows impacted assets in as consecutive XXXX. growth were U.S., challenges quarter show by intermediary In they've to fee marked strategies that Latin million. Slide those seventh optimistic December those channels were In retail have shows fourth been in in intermediary average performance As the dominated pace which APAC by the Pacific By improved by and quarterly in will channel, buying mid-cap pool performance Pleasingly, than quarter U.S. XX we're SMID and of is the positive has outflows of the the quarter Net XXXX I the in that dramatically flows America, region, the will which U.S. intermediary was of strong was of the shortly, the our investment in site. redeeming. been client flows $XXX are our in industry. flows breakdown outflows result and clients slowdown region, outflows

For XXXX, has Henderson delighted Janus business that growth Henry that To Asia Head recently our the we're Pacific of rate in was continue for Asia. and XX%. as growth, accelerate Andrew organic intermediary joined the Distribution

in to $XXX leadership. new fourth and which excluding further Moving In of have XXXX, institutional million the business steps in we've quarter, with institutional, taken team the globalizing outflows the had INTECH. infused

diverse and in resulted strategies, strong different XXXX. in top XX mix pipeline and continue XX mandates for diverse will we in Our the confident remain occurring XXXX, this

Finally, net the of and mid-cap retail. net by SMID similar channel, were supermarket outflows investors were the at prior by The direct flows includes the $XXX were strategies outflows quarter and primarily to billion. capability. XX in Equity million. self-directed Slide driven outflows which breakdown in for the $X.X U.S. quarterly growth in fourth quarter quarter U.S. shows

to BBB million positive strategies our strategies. included Areas Australian of As trends across for pleased range to performance in primarily a Enhanced in continues one Enhanced I've see income global strong to want AAA balance will U.K. U.S. outflow Structural Small wide our $XXX the flow Fixed the continue in mentioned, CLO from were income including also, redemption is our equity, future fixed and improved first I this index. flows and these in Total changes insurance for by an bonds. a income in have flow quarter. quarter quarter. index The all and driven update tactical which strategy. strength the ETF the Flows portable encouraging do sustainable ETF strategies, also to we in the we're these net $XX has CLO billion strategy. the global and output real investment $X.X billion estate, result Cap multi-assets of the into client quarter launched significantly flows strategy. for remains geographies, within were performance in the inflows into inflows channel an balance from benefited on world XXXX. mandate provide $X.X wins see from strong, has Whilst into developed but adaptive sub-advised into billion, of

results. quarter. statement is summary Slide breakeven GAAP U.S. were at for our financial presentation Slide flows the of XX, standard XX look the of we the income. alternative of Finally,

the adjusted led improvements the increase The just for record Full XX% XX% EPS in for diluted to First, all was this year increase enabled is margin compared over full X.X results. Adjusted revenue XXXX XX% in the A the a for XXXX. for adjusted higher year a net to across year. XX.X%, mentioned, improved Dick percentage total firm. adjusted higher AUM a AUM, year's points to financial fee up coupled operating as metrics average with management XXXX. average on $X.XX, margin

at third with total was in quarter, quarters Management quarter the Now fees the fees. as to a compared million guided the during the business seasonal the due income down revenues in quarter-to-quarter are to to third quarter looking operating prior reinvestment call. comparison. quarterly X% planned similar $XXX primarily we to increase in the very performance of due X% the Adjusted

full your was contributed year. INTECH in income million XX.X%, you $X that roughly adjusted equal the hopefully help Fourth the operating operating roughly to Now will the which figure margin with in quarter, in modeling. quarter

third quarter. EPS the diluted compared Finally, $X.XX adjusted to $X.XX for was

year by when we on to margin as each our EMEA, management the diluted show with represents EPS. for revenue showing fee is increase XX.X certain XX, the on quarter-to-quarter Asia the between compare our XX was margin revenue $XX.X which the difference and fee slightly assets from net margin the in bottom a that XXXX fee from equities, Am a versus a quarter. outside the year fee basis up driven in we've Pacific XXXX. areas main points nonrecurring impairment intangible fee related being management an Lat million to XXXX. and and for period due capabilities we've basis the remained quantitative Net U.S. table increase to During the during contracts, by inflows management margin fee ago, performance all drivers demonstrating points slide On XXXX to of is This outlined intermediary. fees. into this an the recognized quarter, Adjusted noncash investment compression. Slide and at the added quarter net industry management page, capability fourth such margin high seasonal coming is adjusted improved of the At solid seeing capability increased

and the includes operating Turning up compensation, which the to the variable result impact $XXX with the profit the compared third in million, quarter, expenses amortization for we've program. due fourth quarter. X% from employee expenses noncash Adjusted annual primarily of quarter, was payout LTI lower for X% mix models. to as your down from expected existing of up fourth of the were prior which table which Adjusted compared preference XX% given fixed reflects compensation costs Adjusted finalizing program. to a on compensation operating XX.X%, quarter grants use was the lower and appendix, the prior mostly third to quarter of costs cash In to along the XXXX grants the in for ratio quarter future usual the Slide mark-to-market. variable adjusted the was provided you estimated range the were company The finalizing XX. variable

comp For we compared were higher general was the revenue Adjusted from prior guided XX.X%. expenses to up and the quarter, administrative expenses. full ratio primarily as year, noncomp the operating and to marketing total

X% the line were operating For full noncomp which expenses is compared to with our in XXXX year guidance. XXXX, up

recurring effective for tax fourth was our the XX.X%. Finally, quarter rate

For XXXX the Switching XX.X%. firm's for rate expenses. effective full the to tax was year, expectations

the in our position maintain while and our philosophy growth. management team, a for always to simple reinvesting excellence business financial discipline strong of strategy against deliver has been As to us

are walk ease plan that As through as and for in expense distribution, of our pandemic-related restrictions where of for progresses. XXXX With technology, XXXX, such investment more XXXX. increased focus spend expectations areas teams, we T&E, said, for to including still in we into head let's areas reinvestments in ESG,

compensation. First, looking at

and people expect in XXs. we've adjusted of impact be we'd the in comp anticipated the LTI in higher XXXX made With investments our in amortization the the XXXX, to low ratio

the Secondly, mentioned being made for This I've see low percentage investments increase expect a that increase to noncompensation the the to expenses, in we'd in due is teens. business previously.

statutory to quarter-to-quarter. at arise XX%. overall to expected various be be firm's is by effective which similar impacted rate the to rate Finally, XXXX XX% differences, tax will The

dividends; shares; our The invest investment to XX as XXst Slide capital. last feed fund investment is seed in represents buy flow new cash in level. GHG robust been products and back to $XXX of importantly, to as and look virtually equivalents capital further December. and in of This consolidated the billion used the over has year turning is generation Cash and of fee compared were largest $X.X cash Finally, at liquidity. through portion book million our flat

we shareholders $XXX XXth of to a share in the to XXth declared $X.XX paid paid dividends be to record the today XXXX, of on dividend During shareholders as February. and of per million of February

we of been the $XX current in the our $XXX for million XX.X purchased $XXX million accretive total buyback accretive. our Since XX% has million, For QX million authorization roughly started stock year, have a shares remaining. program we it XXXX, of and of we buyback

Now it I'd it before you. for some Q&A. up back over to we Dick open for thoughts final to like turn Thank

Roger. Thank you,

growth, proud so the know is positioned that progress future. the frustrated much although which that's the more team of quality aspired your we've in I powerful. I'm delivered made today I'm we the most haven't proud organic Really, over is over Before and that are thing that we a of to briefly that my me March. lead This now to of earnings for quarterly questions, end handing been It's It's years. is of set it Janus before honor at an retire the wrap Janus last let opportunity I been the these up. XX Henderson. we've to. tremendous the better and with Janus The last of consistent . firm operator Henderson here.

people Henderson is bright. very and doing the Janus know work, for We that I have great exceptional future

to I and and turn your years, questions. over That forward. for best be for it like these CEO to XX to So the the me last wish now going allowing thank the the you you all honored I'd said, time operator back

Instructions]. [Operator

today Ken question for from JPMorgan. first comes Our Worthington of

the Dick, congratulations on retirement.

you hit real for you. a think with Janus, a it was working I difference pleasure and

part, if Ed And luck. guess, Board position is Janus. plan to shareholder was thesis consolidation. of Trian's ownership maybe has and at Janus? drive in value I focused as Try managers has Garden, they're is wanted to your what and in for on best understanding Nelson I big So the asset my questions. least members ask taken for taking

if So for Janus do buyer you as seller? consolidation or a a see is a theme here Janus,

so here. they're you with Thanks a follow quarterly kind to call. much Ed Deep answer, for here Dick words Ken, Nelson with. that call. but not not doing the the can't up They and Board are are I but started on apologies this us with frustrating really...

INTECH. turn me Let to

dilutive As INTECH, in fees of 'XX on deal assuming performance the I'm disclose so, is earnings? INTECH, you maybe And margins and the And the we separation multiple it think to about generated how dilutive? for? if sold you can

in a Roger, it's Ken, quite there. lot

in think about in And quarter. our information level at rate. as represents of $X fourth said performance the fee of today, it's part that the our business, in it overall, asset financials talked given around I given terms before. we've the year, we've of the -- the in a you terms relatively income We've million op of small you beginning of I've

hopefully helpful. is So that

than In INTECH were performance I $X were terms performance fourth fees of fees, less the about quarter in think million. for

out. we'll spend that it's -- a So

on going will business. of consideration items our and out accounted is ongoing terms will intangibles obviously, the off, be for and than be to that those closing. from be figures In write less but U.S. the adjusted GAAP The goodwill deal the noncash the are we consideration, in

income and have as of our minimal on ratio guidance will on terms So comp I've ongoing I in a guidance. future -- given expense op but the and effect deal the said,

the enough in there's retire, differences weren't Dick, maybe, suggest if maybe done the over you may on for strategy the you what that Trian's where the have from Janus X Janus to there maybe opinion next what help could X then And to years? Janus' in forward. your And to press is does us, have liked And have Okay. with over to been different if you been going X to years? next would hope vision X

again, there's Look, significant rather thing can't what run a compare don't I point run and of to going I the foundation -- Ken. excellence, therefore, know with speak think Thanks, to thing think which getting to is Trian hard you simple the reach I we're do. this is I've one think a been one building. really a for that do. into needs And the We've I thing business built. transparent strategy I is now fact solidly I foundation about where to

work -- taken and develop well you and really Janus talked we and in to them that And had would last I those about do You've the direction. call We I And now, Otherwise, right said together. that are the develop strategy further ideas the firm. question it never it. prior about we've Henderson is put have believe the platform. done the the how in

that stays been own the leader and plan, and And result. vision. what but it's step has and is, makes not that carries to and a team to for own on retirement that that I that means time only And to next the me team about decision think. clear in leadership come off be so forward allow the good a that leadership delivers But that I driver think I've today my

helm do in for you here at the it's XX now diversify a some good and will felt you big and where We're part to how time you was was around like time. think a and making of that's decisions I new so diversify years strategy context, leader long And a step invest. already off for who I've do that. I why And a for do that appropriate enough. be been

of the it. future And and having this had opportunity for of grateful and accomplished, front a very in I think we've so I'm bright has I'm what proud team

Henning Our next of Ed comes from CLSA. question

a questions. have of I couple

and then INTECH on Firstly, on equities. secondly,

how touch look Could is INTECH? your Just value you the starting see about? mentioned goodwill that transaction that also, be below with And the INTECH, you to externally sell of book. could just it's to book did on the you? going you for the approach in Roger, you it? your goodwill What what's came management if Did team in

Okay.

Janus So we've a think to outcome the previously believe what I working and and very that for that very INTECH, team the hope for at firmly their for outcome And importantly, and that and clients management clients, we been options we've leads been we the potential INTECH looking has Henderson is right talked good success much with as feedback this that, future early strong. from is. to

So that's great. But the and right is yes, we've been the through a outcome that process best this outcome. believe as to is what firmly

terms our that's is In the of big goodwill one financials, the on books number.

So we piece. in as individual how XXXX. close to need agree do is we to we'll as our again, internally much transaction that to with the that an ascribed then with But and auditors

the did before you went clarify look to on just you a it process, externally? bit at that So selling through

things, looked at We a number of again. different

we're the thing clients, what's So this it for that thing the is is INTECH all right very outcome thing right Henderson. is the is good And the what for of those people. a for and -- what for it confident right Janus is a

second the equities. And on Okay. just then question

And look in -- about and that at just that? then more drove the and in equities in can since touch talk December, fourth performance you talked about performance, how you fell the U.S. can performance MidCap you the If back what coming back on the you has really gone? broadly met quarter,

was data, perfused tough reflected Forty fees. in -- can December our on deck in the public gets that month. -- seen And we incredibly on guidance some calculate the and particularly month, for example, that We've volatile had the a see given Fund It's a real an the we've in filing of saw very Yes. you mix.

quarters around as moved more move them. of the very and markets Some towards had strong others the

where We outperforming in into So and extremely that performance really numbers strongly X SMID, X positive, had end with in really year the a was and really, the in tough of on X-year XXXX -- go for the and some we've where we've for strong. back that's U.S. fourth Overall, years. seen U.S. moving quarter. cases, quality positive mid year the positive double-digit SMID mid

We've Some numbers funds. got there very others, of Europe made weeks good. had in in were some time our tougher equity couple that changes a We've We've a long-term sustainable ago. announced good Asia. is

is mixed it story. a So

improvement equity saw I with the terms seen dominated during what what outflows have in think a year, -- continuation of of again, which mid fourth in by -- in you outflows the the improve. flows, and quarter mixed with the that -- it's in [indiscernible] flows got expect we hope performance it we in will the in a continues. SMID of accept hopefully U.S. been more place We've those great and is but and then was But teams there that equities. story we've is

was equities the X-year just one there, you some of negative the benchmark which ran performance But falling was But on -- and above only -- through equity was Asia, in the that Asia the positive, great. the one raw drove down

is end years contrarian, Fund, the a X number X its the certainly well. awesome -- up the around, very example, an top almost a we right a got had fund year. again had of the but class possibly just decile XXXX and other a things, first are of still was that probably for at back there way Until fantastic to as tough is a over which I Forty mentioned big And had year tough was

So so said, tougher I are yes, funds the bit a But . mix. some had as a probably XXXX. probe it's there biggest that big they -- of

comes Group. question from next Nigel Pittaway of Our Citi

increase and a obviously, the good as performance alts to against look in on quartiles, First it seem I can if please question mean, good quite about does bench. started of a the the so ask it's look -- the have just I doesn't business. very at It redemptions that all, business. if you

strong so what's to there? hard the why quartile generate performance of given sort flows? going relevant? Is performance, the on is So Or it

which They there which our mean, well. relatively there things very gathering outflow a in long return biggest flat. of in We've flow successful of beginning or included was inflows investing time, area is turned peer which that The some as you fund There's I U.K. is which as the we're that's talked very as been funds, been things had absolute is number small But has as tougher well have XXXX. time. the and having hedge return property of a the overall of period our at one multi-strategy good of area then in. positive groups period know. in XXXX, over a a quarter an for in period about other fund, like the absolute

largest But some is property again, where of a $X.X the one absolute billion we about So there the there. U.K. mix outflows. fund return is there's in things in and saw

then just the the guided the is on And I you've obviously mean, Okay. -- cost. to P&L

to So But provide surprise what there. any thing investment that much there's that loss? is one on there the to is color just $X.X comprises? there million Is the nothing

That's capital NCI. actually in in mainly or our it's seed

again, more we feed well now. details. it's But but to as that We driving side we look have is on terms through other have that's can So the piece, hedge offline what's a of book NCI. Again, take balance at if you do seed. our in of hedge Obviously, you NCI the in you that -- that what's don't hedged. any

comes question Our Jarden. from Miliatis next Elizabeth from

on just is cost. first The one

spend of you've into in obviously is about numbers? should noncompensation think whatnot, that that to planning to are outer limited this growth trickle and a Or will some in team of the how that going that to And be the that pretty sort year all you 'XX? in cost Is we 'XX. So big investing 'XX? all and fairly much growth -- guided step-up to in the

Yes.

are we some mean, I investments said, in making business. the we major As

point a for there out, moving the business As of and Dick as some view. regulatory believe investments also from we in we're in are position necessary pointed a growth, to

-- the even . may as We Elizabeth, I So it's and also bounce opening marketing some of unwind Zealand -- allowed we're we in terms where up New opportunities areas reinvestment COVID. a from of believe back are distribution to But after. got and bigger hopefully, we we've one be February. generally, more into believe from day, go

we've in Our of about number the a making there. investments investments technology, talked we're years for

data of there again, around and now those of systems. and are ESG. starting the cost And online -- ESG and in T&E, and running investing higher costs of information in data Some those We're are cost And we come and for example, to I of spend back -- 'XX the but than our expectation pandemic. and coming There, 'XX the back of low we role in than back to is more spend 'XX and at 'XX. off will the XXXX, the the X less guess, XXXX. of

a it's So combination things. of

year-on-year, In as wouldn't terms increase expect the where in terms business. I repeat, reinvest we necessary our will of I -- think but see of, continue to to that in

comes Our Davitt Research. next Patrick Autonomous of question from

performance-driven fee rebates mutual looks Dick. so mutual like Congratulations, On -- reaccelerated. the fund the fund, it

idea you we here, us what how As a on if of quarter? rough can have performance-wise, across you look rolling off you and tracking flat -- this is give see of you kind maybe have do markets from from that

Yes.

on a negative talked can position, it there XX-month we right. I've data moved -- what's has a biggest quite files Forty this periods, fees. guess, very had of out have on that you're and I these performance from public year, What rolling one tough you model the moved a -- you those and The hinted went and positive yes, slightly So earlier to that prior contributor on in at, again, in Fund, which rolling being is can its the positive off a about December. rolling

was XX will the XXXX, minus be the to if we'd in got X -- you've performance $XX be there Forty. about expect will the of already. big So If fulcrum is about data there swing was be fees million. months That factor there

very it tough can swing said, a I December, just had that hopefully, back fast. As as and

to watch. numbers its that it improves if big number improve, that's in will probably will fund. one but sort -- it's giving the you of be a and have that's at I'm performance, It maximum, that the So

this if will So year, number adds that be also it will be --

Got this it. sense. much then guide correcting? Makes a if flex do How on obviously, more the you volatility have And that lot markets expense on keep year. guide,

there's Yes. of I mean, guess number at I that. a of ways looking

including compensation. variable Variable is about cost flex is business comp, our the first LTI The our XX% given natural in base. of

that it's take long-term is guess, of a first variable business. comp. natural But very taking we purely aside, correcting So device with a the I view

and expecting wanting to the and business we I to are to we that because there in business want need As grow. invest are this said, do . do to things

obviously advantage to of take to The at second want are opportunities we'll that. markets possibly who sometimes is look faster, those but and move

at yes, of expense look part third is, carefully that we obviously do The very base. our

for pretty for have you decisions term. and at to long the to need what we a is important the look the again, make that. reputation long-term need a right good most would we that We And do. But thing is business this

answers of So in there. a hopefully, combination that's

costs XX% is bit of variable. are First our

thing Second long we term. think is

need we always do investments but to to that The efficiencies looking just want always And we in is There continue doesn't cost make a more because things in are we can third last we there we'll we at our thing to the we're that we'll carefully. make to coming things guess how is not find there's looking efficient. exercise to do can very grow, do. mean not bit we're I are about. investments be And more that our major always business can always out business things announcing are do, with and to we're want and

So adds that makes I up to in summary, something that Patrick, to sense you. hope

[Operator Instructions].

next comes question Alex of Goldman Blostein from Sachs. Our

to actually that is for? could we maybe you're This on Alex. think if I selling come business us the least at quickly. you of multiple behalf intact help back the was Can wondering about Ryan

we're that's relatively As individual agreed I been not piece said, disclosing our Ryan, the business, it's that's of the small -- management. with piece and a

So disclosing that. we're not

Sorry.

small on on you thoughts capital me? piece there way any right. of think there you'll your on potentially is any with Maybe us All what its Okay. relatively you capital? give at could of the business, the is all use do guess point I color the

we've returned of capital said got of the they over But is that hierarchy been than time $XXX had would different before. capital long no capital, obviously, started ideas. talked the And in about XXXX. has time. million of of to added everything of talked got We about We've in capital first. come we We've that XXXX. XX% in. uses think seed a period of good some buyback over the XX% always grow a period. I want accretive that's some -- Dick program needs return We've areas we've we've we and disciplined been we've where

products activity at. As to I the that we've said, we again, there's we've year. of hinted some tell And but launched And today. inorganic nothing you ideas this are at there, been XX of about that looking over there areas we've got

Okay. well. Dick, the congratulations And refinement on as

Thank you.

next John Dunn Our of comes question ISI. from

you comments, you're the in little think do you channel? maybe what some contributor but a color us be more you seeing institutional And you could possibly So positive give 'XX? gave a on could in

answer is positive? Can Absolutely. be The yes. Yes. it

years, business, becoming We last a few have Nick head years made ago the team ahead of globally. in couple that we brought are a with too brought have head in which always Consulting, been. Consultant, a of in just We business Head Graham, new a is Richard considerable over Adams of new investment in of U.S. We've team of a new Dratman. U.S. small and that the Debbie that global

that had funding year So came we've little a that we big said, in -- this our space. investments in biggest different talked strategies. we XX of We've made as

the at -- fee are at is asset, asset there lower level. the there both higher fee of number level, So also but lower higher a things,

will selling institutional in QX, numbers to client a very, performing we about. wanted I strongly strategy, notify client, -- think our institutional. -- in I to and do outflow And you but don't told have about we'll -- very balanced INTECH want So single one in you our I be which in I've strongly

terms anything I in for around, we see there? for your success? Or do yes. promise Absolutely, question So should to do don't believe be QX. we But potential we of want

-- little ETFs. on just more Got it. And then a

launches might interesting You little an it's more average in and how a a plan to on year come there? some to ideas, maybe the hit Maybe into. you many do some do up area just tough scale but maybe break you think

been a in of number for we've Yes, years. that business

Now ETFs. we're about talking again, active

a So faster we're in the which of a launched any We business, launched than We've CF U.S. ETF our X growing smaller be launched we successful in no that is in QX. we and about want I ESG X, talking is a presence this is piece grown. look think, other in that Europe, have We can in ETF future. but But estate real We we segment. QX. something still We've Australia to have year. there. at business the in that's shown

largest CLO AAA the beginning we I which last launch. XXth of launched ETF year, year, Our think, was ETF, last

We million So just we launched BBB. hundred them call that now several dollars. is

more than the ones right in ETFs. So these the launching things ETFs the It's getting about enough about are -- market. right there's rather than us

in or to got is the X year. in X me, front be we've launched probably selective, aim we launched -- number I the our but of ETFs So haven't probably

. So see scale but we we most those what do. that importantly, also certainly, And us shows what we in launch you can -- new to want will things XXXX.

final from today Murray of comes Our Alex question KBW. for

if Congratulations, an Dick and on and best search made curious of could luck. give I'm update any there? us maybe progress being you the CEO

it hard being very by making search have Board, working comment management. really and right have on good to I'd it is call the Yes, on you this progress, focused being so further. on again. to them been Dick Board leave but it is really But is This the has is know the to comment people don't run the Sure. I for

further questions. We have no

you Q&A Thank joining session for concludes call. and today's conference So today's call. that today's

disconnect. now may You