Executive Summary / Key Takeaways

• Janus Henderson Group plc (JHG) is demonstrating significant momentum, achieving its sixth consecutive quarter of positive net flows in Q3 2025, driven by a diversified strategy focused on protecting core businesses, amplifying strengths, and strategic diversification into high-growth areas.
• The firm's Assets Under Management (AUM) reached a record $483.8 billion in Q3 2025, a 27% year-over-year increase, fueled by market performance and strategic partnerships like the $46.5 billion Guardian Life Insurance mandate.
• JHG's commitment to technological innovation, including the adoption of Aladdin for investment management and the development of AI/machine learning tools, is central to enhancing operational efficiency, client service, and long-term alpha generation, with anticipated efficiencies from 2028.
• Financial performance remains robust, with Q3 2025 adjusted diluted EPS up 20% year-over-year to $1.09, supported by a resilient net management fee margin and disciplined cost management, alongside a consistent capital return policy.
• While facing industry headwinds and an ongoing acquisition proposal, JHG's strategic acquisitions in private credit and European ETFs, coupled with strong long-term investment performance across capabilities, position it for sustained organic growth and competitive differentiation.

A Global Asset Manager's Strategic Evolution

Janus Henderson Group plc (NYSE:JHG) stands as an independent global asset manager with a rich history dating back to 1934, specializing in active investment across a broad spectrum of asset classes including Equities, Fixed Income, Multi-Asset, and Alternatives. The firm serves a diverse global clientele, encompassing institutional, retail, and high-net-worth investors. JHG's strategic vision, articulated through its three pillars—Protect & Grow core businesses, Amplify strengths not fully leveraged, and Diversify where clients offer the right to win—has been the bedrock of its recent transformation and growth. This approach is particularly critical in an industry grappling with persistent fee pressures and well-documented active flow headwinds.

The asset management landscape is intensely competitive, with JHG vying against global giants like BlackRock (BLK), State Street (STT), Invesco (IVZ), and T. Rowe Price (TROW), as well as a growing array of indirect competitors, including robo-advisors and fintech platforms. While larger players like BlackRock often boast superior scale and technological infrastructure, JHG differentiates itself through its client-centric approach, deep investment expertise, and a focus on specialized, high-conviction strategies. The firm's global distribution channels and diversified investment offerings, particularly in areas like real estate and private equity, provide a competitive edge. However, JHG acknowledges the need to continuously enhance its technological capabilities to match the operational efficiencies of some larger rivals and to counter the disruptive potential of new technologies.

A cornerstone of JHG's strategic evolution is its commitment to technological differentiation and innovation. The firm is making a significant investment in its operational backbone by transitioning its entire investment management platform to Aladdin, a leading industry solution. This multi-year transition, initiated in Q3 2025, is a strategic move aimed at delivering a more scalable operating model through consistent and integrated technology infrastructure. While this transition is expected to result in a temporary increase in adjusted operating costs by approximately 1% in both 2026 and 2027, the long-term benefits are substantial. From 2028 onwards, Aladdin is anticipated to deliver ongoing operational improvements, efficiencies, and enhanced services to JHG's funds and clients, ultimately contributing to an attractive return on investment. This move is critical for JHG to maintain its competitive edge by improving data analytics, risk management, and overall investment process efficiency.

Beyond core infrastructure, JHG is actively leveraging artificial intelligence (AI) and machine learning (ML) to enhance various aspects of its business. In its North American client group, AI/ML tools are being deployed to deepen existing client relationships and establish new ones by providing data-driven insights into client needs and preferences. The firm also developed its first internal generative AI tool, a collaborative platform for its RFP team, which has significantly improved the speed and accuracy of responding to client requests. These initiatives underscore JHG's proactive stance in embracing disruptive financial technologies to boost productivity, drive growth, and deliver superior client service. Furthermore, JHG's partnership with Anemoy and Centrifuge to manage a fully on-chain tokenized treasury fund, and a tokenized version of JAAA, demonstrates its commitment to blockchain readiness and tokenization. This allows JHG to learn and lead in the distributed ledger technology space, positioning the firm for future opportunities as the lines between traditional and digital assets blur.

Strategic Execution and Robust Performance

JHG's strategic pillars are actively translating into tangible results. The "Protect & Grow" pillar is evident in the strong performance of its U.S. intermediary business, which recorded its ninth consecutive quarter of positive net flows in Q3 2025. This channel achieved a 9% organic growth rate in Q3 2025, reflecting market share gains driven by a combination of strategic hires, enhanced sales productivity through data analytics, and effective brand campaigns. The firm's diversified product offerings, including active ETFs, multi-sector income, and U.S. Mid-Cap Growth strategies, have resonated with intermediary clients.

Under the "Amplify" pillar, JHG has significantly expanded its active ETF suite. The firm is now the eighth largest provider of active ETFs globally and the second largest provider of active fixed income ETFs. Products like the Janus Henderson AAA CLO ETF (JAAA), which has become a market leader and price discovery mechanism for AAA and BBB CLOs, demonstrate the firm's expertise in securitized credit. In Q3 2025, active fixed income ETFs contributed over $5 billion in net inflows, with several products exceeding $100 million in inflows. The strategic partnership with Guardian Life Insurance Company, finalized in Q2 2025, further amplified JHG's institutional reach. This partnership added $46.5 billion of predominantly investment-grade public fixed income assets, expanding JHG's fixed income AUM to $142 billion, representing over 30% of the company's total AUM. Guardian also committed up to $400 million in seed capital, including $100 million for the newly launched Asset-Backed Securities ETF (JABS), designed to complement JAAA with short-duration, fixed-rate securitized assets. The institutional channel itself recorded its fourth consecutive quarter of positive flows in Q3 2025, with gross sales reaching their best level in over two years.

The "Diversify" pillar has seen JHG make strategic inroads into private markets. The acquisition of Victory Park Capital (VPC) in October 2024 expanded JHG's capabilities in asset-backed lending, a differentiated and growing segment of private credit. This was further bolstered by a partnership with CNO Financial Group (CNO), which acquired a minority interest in VPC and committed a minimum of $600 million in long-term capital to VPC strategies. The emerging markets private investment team, formerly NBK Capital Partners (acquired September 2024), successfully completed the first close of its $300 million Shariah-compliant Janus Henderson MENA Private Credit Fund IV with $125.5 million committed. Additionally, the joint venture Privacore, focused on democratizing private alternatives for the private wealth channel, has advised on $1.4 billion raised year-to-date and is expanding its platform reach.

Financially, JHG's performance reflects the positive impact of these strategic initiatives. For the third quarter ended September 30, 2025, total revenue increased by 12% year-over-year to $700.40 million, primarily driven by a $60.3 million increase in management fees due to higher average AUM. Operating income for Q3 2025 rose 4.40% to $172 million. Net income attributable to JHG saw a significant increase of 421% year-over-year to $142.10 million, benefiting from a $112.5 million reclassification of foreign currency translation adjustments. Adjusted diluted EPS for Q3 2025 was $1.09, a 20% increase from the prior year. The net management fee margin in Q3 2025 was 42.7 basis points, reflecting the integration of lower-fee Guardian AUM but still demonstrating resilience given industry pressures. The firm's long-term investment performance remains solid, with over 70% of AUM in the top two Morningstar quartiles across 3-, 5-, and 10-year periods.

JHG maintains a strong and stable balance sheet, providing ample liquidity for both operational needs and strategic investments. As of September 30, 2025, the company held $996.90 million in cash and cash equivalents, with long-term debt of $395.40 million. The company's FCA-supervised regulatory group had $301.6 million of capital above its $155.1 million requirement. JHG also has a $200 million unsecured revolving credit facility, undrawn as of Q3 2025. The firm's capital allocation framework prioritizes reinvestment in the business, followed by returning excess cash to shareholders. In Q3 2025, JHG returned $128.90 million to shareholders through dividends and share buybacks, contributing to a cumulative share count reduction of 23% since Q3 2018.

Outlook, Guidance, and Risks

Looking ahead, JHG's management anticipates an adjusted compensation to revenue ratio in the range of 43% to 44% for the full year 2025, assuming a zero market return for the remainder of the year. Adjusted non-compensation expense growth is projected in the high-single digits for 2025, reflecting planned investments in strategic initiatives, operational efficiencies, and the full-year impact of recent acquisitions. The effective tax rate on adjusted net income attributable to JHG is expected to be between 23% and 25%. While the Q3 2025 net flow of $7.8 billion was exceptional, management cautions that this level is not expected to repeat in Q4 2025 due to the depletion of near-term pipeline opportunities. Q4 2025 performance fees are expected to be at or above Q4 2024 levels, driven by strong hedge fund performance. The Guardian partnership is expected to lower the aggregate net management fee rate by approximately 4.5 to 6 basis points but will be accretive to earnings upon full integration by mid-2026.

Despite this positive momentum, JHG faces several risks. The ongoing class action lawsuit, Schissler v. Janus Henderson US Holdings Inc., et al., alleging breaches of fiduciary duties, presents a legal challenge with a trial scheduled for July 20, 2026. Management "intends to vigorously defend against these claims." Additionally, a non-binding acquisition proposal from Trian Fund Management and General Catalyst, received on October 26, 2025, introduces uncertainty. While a special committee is considering the $46 per share cash offer, there is "no assurance that any definitive agreement will result," and the proposal could adversely affect the business by diverting management time and impacting employee and client relationships. The asset management industry also remains susceptible to market volatility, which can impact AUM, revenue, and investment performance. However, JHG's emphasis on active management is designed to mitigate these risks by identifying opportunities in dislocated markets.

Conclusion

Janus Henderson Group plc is in a period of dynamic transformation, strategically repositioning itself for sustained organic growth in a challenging asset management landscape. The firm's deliberate focus on protecting and growing its core, amplifying its strengths, and diversifying into high-potential areas like private credit and active ETFs is yielding tangible results, as evidenced by six consecutive quarters of positive net flows and record AUM. JHG's commitment to technological innovation, particularly through the Aladdin transition and the integration of AI/ML, forms a critical moat, promising enhanced operational efficiency and superior client solutions from 2028.

While the firm navigates competitive pressures and an unsolicited acquisition proposal, its robust financial performance, disciplined capital allocation, and strong long-term investment track record underscore a compelling investment thesis. JHG's ability to attract significant institutional partnerships, expand its global footprint, and innovate in product offerings, including tokenized funds, demonstrates its adaptability and forward-thinking approach. Investors should recognize JHG's strategic execution and technological leadership as key drivers for future value creation, positioning the firm to capitalize on evolving market dynamics and client needs.