Ali Dibadj: Thanks a lot, Adam. It’s certainly an area of focus for us, and that’s in the U.S., in particular, part of our North America Client Group, which is newly formed and very much focused on, again, lifting and shifting, but within regions, some of the experiences that we’ve developed on the U.S. Intermediary channel to that channel. We have strong relationships with some of the leading providers in the space. We see lots of interest from them to develop products that are new but also to support the products that we do have to bring to bear there. One of the big drivers of what we’ve been successful in that channel, and we are seeing some clear green shoots there. Although to be fair, it is a small business for us at this point.
We see potential again with this lift and shift is the CIT market, where we haven’t been present, and at least until relatively recently in the right areas. And so we do want to continue pushing on the CIT world where we do see some potential. I don’t have, Adam, kind of short-term beginning of year type numbers to give you, and I probably wouldn’t anyway. But clearly I think you’ve hit on an interesting opportunity for us to continue to grow.
Adam Beatty: Fair enough. I appreciate that. And just to follow-up, you mentioned products a couple of times and the broad palette that you have and obviously some recent success with product launches. So wondering how you’re thinking about that for this year 2024 in terms of maybe more same or less in terms of product launches, whether it’s number of products or seed capital deployed or what have you, and what areas might be the focus there. Thank you.
Ali Dibadj: Sure. We have had – thanks for noticing some good successes in product launches over the past year. We’ve launched several products, for example, taking again core investment strategies that we have and applying them in other areas. For example, we did Global Life Sciences and Global Property as an OEIC. We did sustainable credit and securitized income as ETFs, as you know, obviously emerging market debt that we have, we turn into SICAV. We have plenty of SMAs. I just mentioned CITs. So we are on pace to continue to grow that in 2024 as well. We don’t actually think about it, and maybe we should, but we don’t actually think about it in terms of number of launches. We don’t have targets in terms of number of launches in the pipeline.
We think about it very much as a portfolio of new products and a portfolio of new products that deliver on client needs. So client led, I guess, is how we think about it. That’s our filter for, frankly, everything at this firm, but in particular for new product launches, because we already have a great suite we want to scale, but we do see that there’s more products to launch. We do believe that there’s opportunities for us more broadly. And this could be organic or inorganic in some areas, in areas like ETFs, in areas like emerging markets as well. And again, that fits with client needs that we have.
Roger Thompson: I guess the last point I’d add to that, Adam is around seed capital that you mentioned. We have a good amount of seed capital. Our current expectation is we’ll probably add – there’s some things that we will harvest as that have been successful and we can bring that seed back and that’s something we manage very carefully. But there are a number of other things to Ali’s point, that either we’ll be seeding something new or where we’ve got something which is very successful is a proven product, but is not yet at scale. And we’ve got clients that are interested in investing in it and we’ll – what we call ramp it to bring capital into it. So you probably expect I’ll see capital to go up a little bit this year net of those things. Again, given that pipeline of satisfying client interests and putting what we’ve got good and making that available in the marketplace.
Operator: Our next question comes from Brian Bedell of Deutsche Bank. Brian, please go ahead.
Brian Bedell: Great. Thanks. Good morning, folks. Maybe just on the back of the continued success in the intermediary channel, Ali, if you could comment on going back to Slide 19, that path to getting to more sustainable organic growth, where you think you are on that journey. I think the – on a prior call you mentioned, obviously it’s still non-linear, but you thought maybe one to two quarters a year could have positive flows. Do you think we’re in a place now in 2024 where that might improve just say every other quarter? I know it’s really hard to predict, but just trying to get a sense of how you feel you’re on that path to more sustainable organic growth.
Ali Dibadj: Hey, Brian. So Janus Henderson is at a point in its transformation where I think we can say we’re squarely on the right path. We’re making tons of progress. And you mentioned flows. I’ll get back to that in a second. We’re making tons of progress in many areas. And overall, we’re probably a little bit ahead of our own expectations at this point, but it’s still – we’re still not at our destination down that path to continue the analogy. We have lots of potential left. We have lots of room to go and look, that’s potential for our clients, potential for our shareholders, our employees, our other stakeholders. So we have a – we do have a long way to go. We are quite proud of having gone from negative $31 billion in outflows in 2022 to $0.7 billion in outflows in 2023.
You’re right that the U.S. intermediary business was a great example of that. It was a great example of our ability to create and execute a strategic plan, put that into place and get some good results out of that. We do want to lift and shift that to more areas around the firm. Whether it be an EMEA, LatAm, that we talked about before, whether it be an institutional that was raising a question before as well. Look, we don’t give guidance in terms of on an annual basis or on a quarterly basis for sure, but I would argue that it’s not going to be linear. We still have to fix the pipeline and we’re getting good leading indicators to the Patrick’s question earlier, but we still have to fill the pipeline. On the institutional side, we still have to make sure that we can improve on EMEA and LatAm, maintain the progress we’re making in the U.S. So we’re not there yet is what I would say on firing on all cylinders or being at our destination.
Brian Bedell: Yes. That’s great color. And then maybe one for Roger, just on the performance fees, obviously very strong quarter in the fourth quarter, just as you think about moving into 2024, I think on the Janus fund side, I believe that’s still trending more consistently. Maybe just your view on that, but sort of a steady but slow and steady improvement. But any other view on any potential lumpiness in 2024. And then also just if you can just remind us, the comp ratio on performance piece, I’m sure it differs by product, but it looked like it wasn’t particularly high in the fourth quarter on the healthcare suite.
Roger Thompson: Yes, sure. Thanks, Brian. I guess, first of all, we’re obviously really pleased that our teams have delivered on behalf of clients and delivered so well, and that has resulted in some strong performance fees in the fourth quarter, particularly with performance in the second half of the year and the fourth quarter, particularly. As you say, performance fees are incredibly difficult to predict. It depends on future performance, and I certainly can’t do that. The only thing that we can, yes, at least give an indication of is the U.S. mutual fund fulcrum fees, which are three-year rolling and we obviously know what’s rolling off. So an indication of that, if you add flat performance for this year or historical performance, I think for this year, then the 66, I think we were for negative fulcrum fees in 2023 is sort of mid-50s in 2024.
Really pleasing to see improvements in things like the research fund that’s got some really good numbers. It’s added since some changes in that were made around a year ago. So moving the right direction there. But you got to expect that still to be negative for the year. For other things, honestly, like I say, it’s a – your guess is as good as mine. We’ve got some great teams. I hope they deliver performance for clients. If they do, we’ll deliver performance fees. From a – when does that happen? As a reminder, the vast majority of our performance fees are annual. We have about $37 billion of assets subject to performance fees about $3 billion of that are quarterly performance fees. The rest is annual. The vast majority of that is Q4, and Q2 has a lump as well, which is really the European SICAVs. So don’t expect much in Q1 or Q3.
