Janus Henderson Group PLC Q3 FY2023 Earnings Call

Good morning. My name is Lauren and I'll be your conference facilitator today. Thank you for standing by and welcome to the Janus Henderson Group Third Quarter 2023 Results Briefing. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll 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 call, certain matters discussed may constitute forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements due to a number of factors, including but not limited to those described in the forward-looking statements and risks factors' sections 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 the call. Thank you. Now it is my pleasure to introduce Ali Dibadj, Chief Executive Officer of Janus Henderson. Mr. Dibadj, you may begin your conference.

Welcome, everyone, and thank you for joining us today on Janus Henderson's third quarter 2023 earnings call. I'm Ali Dibadj and 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 more details. After those prepared remarks, we'll take your questions. Turning to Slide 2, global markets were volatile during the third quarter as headwinds including rising global bond yields due to a higher-for-longer interest rate environment and certain economic outlooks, geopolitical unrest, and stubborn inflationary pressures contributed to challenging market conditions. Even with the market downturn in the quarter, Janus Henderson delivered good quarterly results. Investment performance remained solid with the majority of assets ahead of benchmark on a one, three, five, and 10-year basis. Assets under management decreased 4% to $308.3 billion. However, it remained up 7% since the beginning of the year. Third quarter flows were negative $2.6 billion, a better result compared to the range we communicated on last quarter's earnings call. As I said on the previous earnings call, our institutional pipeline needed time to mature and our retail flows continue to be negative. We saw both of those factors play out in net flows in the third quarter, but a little better than we expected as we gained share. The other item I spoke about was a few pockets of internal transition that will make us a stronger firm for the long term but could negatively impact our flows in the short term. Transitions such as these can create uncertainty with flows and how clients react. I am pleased that given the trust clients have placed in us, along with the efforts and dedication of our investment and distribution teams, we did not experience significant outflows related to these internal transitions during the third quarter. Looking at the broader flow picture, our 2023 year-to-date flows are still positive at $2.4 billion, a marked improvement from the almost $20 billion of outflows during the same period of 2022. We continue to be on pace to show great improvement from last year's total annual net flows of negative $31 billion. Our financial results remained solid, better top-line, lower expenses, and non-operating benefits delivered adjusted diluted EPS of $0.64, better than both last quarter and the third quarter of 2022. Our financial performance and strong balance sheet continue to provide us the flexibility to invest in the business both organically and inorganically and return cash to shareholders, which I'll talk more about in a moment. Turning to Slide 3. I wanted to touch briefly on the progress being made in the business. We continue to be in the execution phase of our strategic vision, which consists of three pillars: protect and grow our core businesses, amplify our strengths not fully leveraged, and diversify where clients give us the right to win. In Protect & Grow, we've talked previously about the importance of protecting and growing our U.S. intermediary business and have been investing in and supporting this channel. As you know, we've recruited a new Head of the North American Client Group, launched a national brand campaign, selectively upgraded talent, aligned compensation with our growth strategy, and increased the pace and quality of client engagements. These changes are allowing us to be on the front foot with our intermediary clients and their clients. The progress in U.S. intermediary is showing up in results. In aggregate, third quarter flows in North America intermediary were positive for the first time in over three years. Net flows into the Advisor Group have been positive in each quarter of 2023, which up until now had been offset by negative flows in the retirement channel, reflecting changing demographics in a softening economy. Very importantly, we are capturing market share in this important market. Under Amplify, we've previously discussed our institutional and diversified alternatives businesses and our product development and expansion efforts. Our product expansion efforts include the launch of the successful Global Life Sciences strategy during the third quarter. In product development, a successful example is our suite of active ETFs that has grown by over 50% annually since 2018 and had nearly $9 billion in AUM at the end of the third quarter. With this growth, Janus Henderson is now the fifth-largest provider of active fixed-income ETFs in the U.S. with more to come from us. In the institutional business, which is over $8 billion of positive flows year-to-date, we've restructured coverage to be more aligned to different client types, helping us to serve their needs better through greater specialization. We completed the majority of appointments and we're seeing a number of consultant-advised wins, which is vital to the future growth of the institutional business over time. Under our Diversify pillar, we continue to look actively to buy, build, or partner to diversify where clients give us the right to win. As an example, last quarter, we announced a joint venture, Privacore, to take advantage of the democratization of private alternatives into the retail channel. We remain on track with building out the Privacore business with the target of being fully operational by year-end and in the market in early 2024. We're enhancing our culture with our new mission, values, and purpose. Those are critically important as we augment our culture of performance, collaboration, and accountability, built upon our stable and client-focused processes at Janus Henderson. Fuel for Growth, which allows for reinvestment in Janus Henderson's strategic initiatives on behalf of our clients, has been realized at a faster pace than expected and at a higher dollar amount. We expect run-rate cost efficiencies of $50 million by the end of 2023 compared to the original $40 million to $45 million by the end of 2024. All of this cost savings has been or will be reinvested in the business. As part of Fuel for Growth, we announced earlier today our intent to delist from the ASX. With 95% of shares and a significant portion of the trading volume on the New York Stock Exchange, this move will allow Janus Henderson to focus on a sole exchange, reduce costs, and simplify the structure as we continue to invest in Australia and the APAC region as a key growth market for us. Our improving financial results and cash flow generation, along with a strong and stable balance sheet have enabled the Board to authorize a share buyback program of up to $150 million to be completed by April 2024. I want to stress that this new buyback does not change our desire and pursuit to diversify our business through M&A and where clients want us to do so. At this stage, our liquidity profile allows us to do both. Wrapping up, I want to thank each and every one of my colleagues at Janus Henderson for their hard work and dedication as we continue to show real progress on our strategic path to deliver consistent organic growth. We're still seeing the opportunity for improvement. Our financial results are solid, we're generating good cash flow. We have a strong and stable balance sheet. I'll now turn the call over to Roger to run you through the financial results.

Thank you, Ali, and thank you again to everyone for joining us on today's call. Turning to Slide 4 on investment performance. Investment performance versus benchmark remained solid, with the majority of assets beating their respective benchmarks over all time periods. In equities, the one and five-year performance versus benchmark improved compared to a year ago. Most notably on the one-year basis, where 83% of AUM is now beating benchmark compared to only 42% a year ago. Short-term fixed-income performance versus benchmark continues to improve and is now at 56% of AUM ahead of benchmark on a one-year basis. The longer-term periods remained very strong. Our improving fixed-income performance and differentiated breadth of products across different vehicles and regions, an example being our active fixed-income ETF strength that I just mentioned, positions us really well for the anticipated movements into fixed income as interest rates stabilize and bonds provide diversification benefits to clients. In the multi-asset capability, the balanced strategy, which is the vast majority of assets in this bucket, switched to underperforming the benchmark on a one-year basis, but only by 1 basis point. Balance remains ahead of its benchmark over three-year and longer time periods and is in the top Morningstar quartile over the five and 10-year time periods. Investment performance compared to peers continues to be competitively strong, with 75%, 60%, 79%, and 87% of AUM in the top two Morningstar quartiles over the one, three, five, and 10-year time periods. Looking further into performance, equities have 64% of AUM in the top quartile on a one-year basis, a great result and a testament to the ability of our world-class investment team to deliver differentiated insights and investment discipline in these extremely challenging market conditions. Slide 5 shows company flows. As I mentioned, net outflows were $2.6 billion in the quarter, which is consistent with our messaging last quarter and reflects the continuation of net outflows in retail and less institutional gross sales as we continue to mature the pipeline following the funding of several large mandates in the first half of the year. Year-to-date net inflows of $2.4 billion demonstrate a significantly improving trend compared to 2022. Turning to Slide 6 for a look at flows by client type. Net outflows for the intermediary channel improved to $1.3 billion compared to $1.6 billion in the second quarter. The quarterly outflows from the EMEA and LATAM regions, as higher interest rates, inflation, and recessionary fears are weighing on flows. Janus Henderson is not unique and the EMEA industry in general has experienced a challenging flow environment with meaningful year-to-date net outflows across most regions. U.S. intermediary flows were slightly positive, supported by strong positive flows from several strategies, including the AAA CLO ETF, our mortgage-backed security ETF, and U.S. mid-cap growth. As Ali discussed and we've spoken about previously, U.S. intermediary is a key initiative under our Protect & Grow strategic pillar, and we're pleased that we had positive flows this quarter. Our year-to-date flow results have improved by over $5 billion compared to the same period a year ago, and that we are capturing market share. Institutional net outflows were $400 million in the third quarter, in line with our comments from last quarter's call. Following onto the large inflows that we had in the first half of the year, we were not anticipating large fundings in the third quarter. Our distribution team is working to build a sustainable pipeline and it will take time. Finally, net outflows for the self-directed channel, which includes direct and supermarket investors, were $900 million. Slide 7 is flows in the quarter by capability. Equity flows were negative $2.3 billion in the third quarter compared to breakeven in the prior quarter. The environment for active equities remained challenging across all regions. Despite the outflows, we're encouraged that U.S. equities captured market share during the quarter. Net inflows for fixed income were $900 million, taking net positive flows to $5.5 billion year-to-date. We are encouraged by the steady improvement in the short-term investment performance to go along with our solid longer-term investment performance in fixed income. Several strategies contributed to positive fixed-income flows, including our fixed-income ETFs, which had positive flows of $1.4 billion in the quarter. Other strategies contributing to the positive flows for the quarter were the U.S. buy and maintain credit, multi-sector credit, and Australian fixed-income strategies. Total net outflows for the multi-asset and alternatives capabilities were $700 million and $500 million respectively. Moving on to the financials, Slide 8 is our U.S. GAAP statement of income, and on Slide 9, we explain the adjusted financial results. Adjusted revenue increased 1% compared to the prior quarter, as increased management fees on higher average AUM were partially offset by lower performance fees. Net management fee margin for the third quarter was 48.7 basis points compared to the prior quarter of 48.5 basis points. The increase is primarily due to mix shift. Last quarter we told you that we expected the fee rate to be relatively flat in the third quarter, after a decrease in the second quarter due to the large low-fee institutional fundings in the first half of the year. Third quarter performance fees were negative $16 million driven by U.S. mutual fund performance fees of negative $17.5 million. As we sit here today, based on current investment performance, our estimates of aggregate performance fees for the full year remain unchanged toward the negative end of negative $35 million to $45 million. This includes roughly negative $65 million from U.S. mutual fund performance fees. Clearly, the results will be dependent on future performance. Continuing on to expenses, adjusted operating expenses in the third quarter were $280 million, flat compared to the prior quarter. Adjusted LTI was down 5% compared to the prior quarter, largely due to mark-to-market on mutual fund awards. In the appendix, we've provided the usual table on the expected future amortization of existing grants for you to use in your models. The third quarter adjusted comp-to-revenue ratio was 45.3%, in line with expectations. Adjusted non-comp operating expenses declined 1% compared to the prior quarter, primarily due to lower G&A expenses. Adjusted operating income increased 3% over the prior quarter to $125.4 million in the third quarter. Third quarter adjusted operating margin improved to 31%. And finally, adjusted diluted EPS was $0.64, up from both the prior quarter and the same quarter a year ago. Updating on our expectations for full-year '23 operating expenses, as Ali mentioned, we now expect to deliver $50 million in Fuel for Growth cost savings to strategically reinvest back into the business. We're pleased with this result, but we will continue to maintain our cost discipline and seek ways to operate our business more efficiently going forward. As we're approaching the end of '23, we are refining our previous guidance. The expected adjusted compensation ratio remains unchanged in the mid-40s. We've lowered the range of our adjusted non-compensation expense percentage growth compared to the prior year and now expect it to be mid-single digits. We've also updated our expected statutory tax rate to approximately 24% from the previous range of 24% to 26%. Skipping over Slide 10 and moving to Slide 11 and a look at our liquidity profile, our balance sheet remains very strong. Cash and cash equivalents increased to $1.1 billion as at the 30th of September, an increase of approximately $150 million, resulting primarily from good operating cash flow generation. We've maintained a strong liquidity position and we continue to balance the capital needs and the investment opportunities of the business with returning capital to shareholders. Along these lines, as Ali mentioned earlier, the Board has approved a new share repurchase authorization of up to $150 million to be completed by April 2024. Our capital allocation philosophy has not changed. The buyback authorization reflects our improved financial outlook compared to where we started the year, better cash flow generation, and a strong and stable balance sheet. I want to reiterate Ali's comments that this buyback authorization does not impair our ability to execute M&A should the opportunity arise. We continue to look actively to buy, build, or partner to diversify where clients give us the right to win. We'll also continue to return cash to shareholders through our quarterly dividend, and the Board has declared a $0.39 per share dividend to be paid on 30th of November to shareholders of record as at 13th of November. With that, I'd like to turn it back over to the operator to open it up for questions.

Thank you. Our first question comes from Craig Siegenthaler from Bank of America. Craig, please go ahead.

Thanks. Good morning, Ali. My first question is on capital management. So a lot of fresh commentary on M&A and buybacks in the prepared remarks, both would drive EPS higher. First, we want to get an update on the potential for an M&A announcement over the near term, and I think, Ali, you made it clear in the commentary that you can buy back stock and do M&A at the same time. And also, just in terms of the focus, is private credit still the number one strategic focus?

Thank you for the questions, Craig. From a capital allocation perspective, our framework remains the same, with three main priorities. First, we need to maintain sufficient cash on hand for regulatory and liquidity needs, as well as for contractual obligations and recurring payments. The second priority involves reinvesting in the business, both through organic growth initiatives and inorganic opportunities like seed funding and technology investments. If there is any cash left after these priorities, we plan to return excess cash to shareholders, which we’re announcing today following Board approval. We are able to do this because we've achieved better results than we expected. This gives us the chance to both return cash to shareholders and invest in the business appropriately. As for our approach to M&A, it remains client-driven, focusing on capabilities our clients want. Recently, we've made two acquisitions: Privacore in the private sector and a business in emerging market debt, both of which are performing well. We want to ensure our acquisitions align with client needs. Private credit is indeed a focus area that our clients have indicated interest in, but we are also exploring a variety of other opportunities to broaden our offerings for them.

Thanks, Ali. Just as my follow-up, your active equity performance is a lot stronger, 80% of AUMs beating the benchmark and peers roughly over one year. Now, like we all know, there are some secular and cyclical headwinds here, but I wanted to see if you're seeing an improvement in client conversations either on the sales side or the redemption side of the equation?

Our teams are performing exceptionally well by adhering to the process and maintaining discipline while delivering our core strength in active investment performance. This is evident across the board, leading to increased interest from clients in engaging with us. The improvement in performance has certainly played a role in that. However, it's important to note that performance alone isn't everything clients seek; they also value clear client service and robust sales support. As reflected in our performance metrics, we continue to excel in these areas, earning the trust of our clients. This trust in our ability to provide both strong performance and excellent client service has resulted in a notable rise in client interactions across various channels, including intermediaries and institutions, as well as in consultant discussions.

Thank you. Our next question comes from Dan Fannon from Jefferies. Dan, please go ahead.

Thanks. I was hoping to follow up a bit on the first question, just with regards to what are the minimum levels of cash that you want to hold on to, that you need to for the reasons you mentioned, as well as how you think about leverage in this environment, what you're willing to put on the balance sheet?

Hi, Dan. It's Roger. Let me follow up on that. As Ali mentioned, our cash and cash equivalents have increased by over $100 million compared to Q3 '22. Additionally, some structural improvements and efficiencies in our business have lowered our regulatory capital requirement, particularly in the U.K. While there isn't a specific number to pinpoint, our cash and capital balance is now significantly higher than it was a year ago, before we paused our buyback program. This positions us well to support a strong dividend, restart buybacks, and explore M&A opportunities.

Great. Given the success you've had in finding more efficiencies and operating the business more effectively, can you discuss the longer-term expense framework as we consider next year and beyond? Specifically, how do you balance the ongoing investment growth with the potential reduction in fixed costs and the overall growth rate for expenses?

Yeah. Let me address that, and Ali, feel free to add as well. We are making significant investments in our business and have clearly identified the areas where we believe we can achieve growth. One of those areas is our U.S. intermediary business, where we have committed resources towards both talent and branding. It's encouraging to see these efforts translated into increased market share and positive inflows, especially in a challenging environment. However, we are continually assessing how to balance these investments with achieving efficiencies. We are making decisions about where we can streamline operations while still investing in growth, and this is an ongoing process. We had set a target of $40 million to $45 million in this investment and have already exceeded that target, which is promising. We will maintain this focus into 2024. I won’t provide any specific expense guidance for 2024 today; we'll address that in our full-year call. Nevertheless, you can expect us to continue balancing business investments with efforts to find efficiencies to offset those costs. Ali, do you have anything to add?

We will maintain a focus on being client-driven and ensuring our investments yield a strong return. In a short timeframe, we have realigned our spending to better address client needs and emphasize return on investment, in line with our overall strategy. We believe we are currently in a strong position, as evidenced by our market share growth compared to competitors. Despite the challenging environment, we are building a more robust firm and will continue to seek ways to realign expenses to be more client-focused and ROI-oriented.

Thank you. Our next question comes from Nigel Pittaway from Citigroup. Nigel, please go ahead.

Good morning, Ali and Roger. Just a question on the cost guidance, if I can. You brought that down to mid-single digits on the non-comp costs, but it looks like even a 10% increase in the fourth quarter and what you've done in the third quarter will only bring you to that 3% increase. So are you flagging sort of a significant increase in the fourth quarter and if so, where is that going to come from?

We are anticipating an increase in Q4, primarily due to seasonal factors such as our brand initiatives and some professional projects we're undertaking. When comparing year-on-year, it's important to consider our spending for 2023 versus 2024 rather than just looking at annualizing Q4. We do expect to see a pickup in Q4. We will keep working on balancing our expenditures and seeking efficiencies. Our guidance has been adjusted from low double digits at the beginning of the year to mid-single digits now. While we're aiming to maintain that balance, we do expect to increase our spending in Q4, which is mainly a matter of timing.

Thanks. The 3% was year-on-year, but I appreciate that. Regarding the comp ratio, it seems that a fairly low comp ratio will be necessary in the fourth quarter to achieve full-year guidance. Is that the correct way to consider this situation as well?

There is some timing involved, as the early part of the year tends to be higher, but yes, we’ve mentioned mid-40s. Currently, we are at around 43 to 45 percent this quarter. We don't anticipate being too far off from that, possibly a bit higher in Q4 compared to Q3.

Okay. Thank you for that. And then finally, maybe just on investment performance. I mean, I know it has sort of improved on a number of durations, etc., but obviously, the three-year performance, which is often viewed as key, has sort of deteriorated quite a bit. Do you see that as a hurdle at all or are people just sort of willing to look at one year and five-year and not sort of focused too much on that three-year performance?

So we obviously strive to deliver on all performance cycles. We all know what happened roughly three years ago from a COVID perspective, which drove quite a significant dislocation in the marketplace. Our investment teams remain disciplined in their processes. Our clients know that, they look at the process, and so, generally speaking, I'd argue people look at all time frames and make a judgment that way.

Thank you. Our next question comes from Ken Worthington from JP Morgan. Ken, please go ahead.

Hi. Good morning. Thanks for taking the question. When you talk about the institutional pipeline needing to mature, can you update us on what a fully mature pipeline looks like to you versus what the pipeline looks like today? And what is the timeline you think you need to reach that pipeline maturity?

It's a great question. Our institutional business has delivered $8.5 billion in positive flows this year. Imagine a pipeline from six to twelve months ago that needs to be replenished. We're aiming to expand that pipeline. These sales are longer cycle, sometimes taking up to two years depending on client needs, so it requires time. The good news is that activity levels are ramping up significantly. Our consultant wins and discussions with institutional investors have increased considerably. One of our strategic initiatives is to enhance our institutional distribution pipeline by strengthening our team, which we have done, and they are actively engaging with institutional clients. It will take time, and I don't have an exact timeline for you, but we are on the right track and gaining strength in a challenging environment.

Okay. Thank you. And then on the ASX delisting, how and when will the delisting from the ASX be executed? How much of Janus's market cap is listed today on the ASX and are there any steps that you're taking to kind of protect shareholders during this transition?

So the ASX is about 5% of our shareholders right now. You might remember it was close to north of 40%. I think 44% at its peak of shareholders at a certain point, and so clearly that's come down quite significantly. Remember, our decision to do the delist is to be able to focus on 95% of our shares, to focus on that sole exchange, New York Stock Exchange, to reduce significant costs as we fuel growth and to simplify our structure for regulatory reasons, M&A reasons, and other reasons. And so, that's clearly a focal point for us. If you think about that, that's, call it 10 or 11 days of trading volume for us. There'll be roughly, and Roger can jump in with more details, there'll be roughly 120 calendar days to work through that 5% and people can convert directly from an ASX listing to a New York Stock Exchange listing, which will probably reduce that 5% as well. It's important to note, Ken, as well, that this has no bearing on our clients or investments in Australia itself. It's a very important market for us, I was there 10 days ago. I want to go back very soon because we are growing in that market, we've been growing for three years and want to continue to do that in a very vibrant market. Roger, you may have some better detail on dates.

We shared the timeline for the process, and we will be delisted on December 6th. There will be two facilities, a voluntary facility and a compulsory facility, which are expected to continue until about the middle to the end of the first quarter. This creates a 120-day trading window. In terms of investor protection, as mentioned, this involves a relatively small amount spread over a long period, although selling pressure is not ideal. It's important to note that this can involve a transfer of shares, meaning there won't be an automatic cancellation. Hopefully, some investors will transition to the NYSE, reducing that 5%. While the buyback isn't directly related to the delisting, we will be buying shares during this period as part of our buyback strategy. This is mainly a procedural update, and I'm available to clarify any details.

Great. Thanks very much.

Thank you. Our next question comes from John Dunn from Evercore. John, please go ahead.

Hi. Thank you. It was great to see the improvement in the U.S. intermediary channel, maybe could you just talk a little more about the, kind of puts and takes there and anything that we should be kind of looking out that might move from being a drag to being more of a tailwind?

Sure. We are very pleased with the progress in the U.S. intermediary channel. We put a lot of focus on it from a strategic perspective and we've done a few things there. For example, we've brought in a new leader of that organization and new people, as well as given blue sky from people internally to supplement the folks we're bringing in from the external world. So clearly, a change in people was part of it. We put in new KPIs, new compensation metrics, which was very clear on what we wanted to get out strategically from that business and that has clearly delivered. And of course, very much to your point, John, we have a set of products and great performance, to the earlier question, to deliver for our clients. If you think about our products that have done well in that channel, but frankly more broadly, it's a similar set of products. We've done quite well in the fixed-income business. Part of that is from the innovation that we've brought to bear in that channel with our securitized suite of ETFs, and we have more to come on that over time that can deliver for the needs of our clients in the U.S. intermediary channel. We've also been quite successful actually on the equity side as well. So things like mid-cap growth have been quite attractive as well in that channel. So it's actually pretty broad-based. Actually, if you take a step back and you think about the top 10 inflowing strategies from a firmwide perspective, about five of them are in fixed income and about five of them are from equities, which is a really broad balanced focus. But the changes we've made in that channel, and the excellent efforts of that team there in the U.S. have been fantastic and quite a motivation for the rest of the firm as well.

Got you. You mentioned that you are investing in institutional distribution. With the upcoming demand for fixed income, can you describe how you are engaging with clients and preparing for that in both the intermediary and institutional channels?

We offer a wide range of fixed-income products and strategies to our clients, particularly through our institutional channel. We have the necessary expertise in securitized products that can be tailored for different clients. While I've highlighted ETFs for the intermediary channel, we can also provide various options for institutional clients, including separate accounts. We boast established franchises in fixed income, such as our Australian fixed-income franchise and our multi-sector credit franchise, all of which deliver strong performance for our clients. This product-focused approach allows us to cater to specific needs, but we also provide tailored solutions that combine various fixed-income products with more customized options. By leveraging both our product offerings and our solutions-oriented approach, along with the knowledge of our investors and researchers, we are seeing significant interest and activity as the market demonstrates a growing appetite for fixed-income investments.

Thank you. Our final question comes from Marcus Barnard from Bell Potter. Marcus, please go ahead.

Good morning, everyone. I have a couple of questions about the buyback. I understand that the strength of the balance sheet has led to resuming the buyback, but it seems a bit coincidental that this coincides with the CDI delisting. So my first question is whether these two events are connected or if it's just a coincidence. Secondly, if a discount arises between the price of the CDIs and the NYSE stock, will you use the buyback to address that discount? Thank you.

Thanks for the question. So the buyback is not exclusively linked to the delist at all. We obviously think about these things holistically, of course, and the holistic view is that our current liquidity profile, as we mentioned earlier, allows us to both implement the buyback and continue to invest in the business organically and through M&A, whether we buy or partner with others. So that's the view that we have across the board. Roger, I don't know if you have anything to add.

No, as I said, I think that the buyback and the delisting are not connected, just looking at our capital. But as you say, it will absorb some liquidity. The shares are fungible so there isn't a discount, they equalize between the two. So that's just looking to happen that way given the type of CDIs, how the CDIs work.

I was thinking more or less of intraday level when New York's shut but the Australian market's open.

Yeah, the buyback will be done on the New York Stock Exchange.

It will be done on the New York Stock. Okay. Thank you.

Thank you. That is now the end of the Q&A session, so I'll now hand back over to Ali Dibadj for closing remarks.

Great, Lauren. Thank you very much everybody for listening. This is another quarter that hopefully demonstrates our commitment to deliver for our clients, their clients, our employees who work so hard, and our shareholders. Janus Henderson continues to get stronger and stronger in a very challenging environment. So thank you all for your interest in our firm and have a good day.

This concludes today's call. Thank you for joining. You may now disconnect your lines.