Good morning. My name is Megan, and I will be your conference facilitator today. Thank you for standing by, and welcome to the Janus Henderson Third Quarter 2024 Results Briefing. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will 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 Risk Factors section in 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 Q3, 2024 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, including our recent acquisition of global private credit manager, Victory Park Capital. Then, I'll hand it over to Roger to run through the quarterly results in more detail. After our prepared remarks, we'll take your questions. Turning to Slide 2. Janus Henderson delivered another good set of quarterly results, building upon tangible momentum in the business. Results reflect market gains, solid investment performance produced by our world-class investment professionals, the second consecutive quarter of positive net flows delivered by our dedicated client groups, and the efforts and productivity from all our operating and support areas. Our teams have worked together to Protect & Grow, Amplify and Diversify our business and create growth across channels and regions, which is starting to show in our quarterly results. Investment performance is consistently solid, with at least two thirds of assets beating respective benchmarks on a one-, three-, five-,10-year basis. Assets under management increased 6% to $382.3 billion which is 24% higher compared to a year ago. Net flows were positive for the quarter at $400 million. The net inflows mark our third quarter out of the last seven with positive flows, demonstrating real progress towards our aspiration of delivering consistent organic growth over the long term. Our financial results remain solid, that our top line revenue provided by positive markets, net inflows, and outperformance delivered by our investment teams, coupled with operating leverage and non-operating benefits, resulted in adjusted diluted EPS of $0.91, a 42% increase compared to the same period a year ago. Our financial performance and strong balance sheet continue to provide us…

Thanks, Ali, and thank you all for joining us on the call today. Turning to Slide 5 and investment performance. As Ali mentioned, investment performance versus benchmark remains solid with at least two-thirds of aggregates AUM beating their respective benchmarks over all time periods. Looking in further detail, at least half of each capabilities AUM is ahead of benchmarks over all time periods, reflecting consistent investment performance across all time periods and capabilities. Overall investment performance compared to peers is very competitive with nearly three quarters of AUM in the top two Morningstar quarters over one-, three-, five-, and 10-year time periods and as you can see in the appendix, much of that is in the top quarter. Slide 6 shows total company flows by quarter. Net inflows for the quarter were $400 million compared to net inflows of $1.7 billion last quarter and a significant improvement over net outflows of $2.6 billion a year ago. The year-over-year improvement was primarily driven by a 36% increase in gross sales. The increase in gross sales compared to the prior year is across a broad range of regions and strategies including ETFs, thematics such as life sciences and technology, U.S. equities, balanced hedge funds, multisector credit and European equities. On Slide 7, are flows by client type. Third quarter net flows for the intermediary channel were positive $1.8 billion bringing year-to-date intermediary net inflows to $5.2 billion equating to a 4% annual organic growth rate. In the third quarter, the U.S., EMEA, LatAm and Asia-Pacific regions all delivered positive net inflows in the intermediary channel. In the U.S., net flows were positive for the fifth consecutive quarter with net inflows in several strategies including most of the active ETFs, U.S., mid cap growth and multi sector credit. U.S. intermediary is a key…

Thanks, Roger. Wrapping up on Slide 14. We continue to make progress across the business, building on the results of past quarters. And while there is more work to do, we believe we are on the path to delivering consistent results over time. Investment performance is solid across all time periods versus benchmark and peers. Net flows were positive for the second consecutive quarter and reflect a 36% increase in gross sales compared to the Q3 a year ago. This marks our Q3 of net inflows in the last seven quarters and provides a tangible indication that our strategic plan is starting to take hold. Adjusted diluted EPS increased 42% compared to the prior year, reflecting market gains, investment performance, positive net flows, operating leverage, high ROI investments, and non-operating benefits. Our strong balance sheet and financial results allow us to continue returning cash to shareholders through dividends and share buybacks, while reinvesting in the business for future growth. We are executing against our strategic objectives. I'd like to thank my teammates at Janus Henderson for putting in all the extra effort. We are undoubtedly headed in the right direction on behalf of our clients, colleagues, shareholders and all our stakeholders. Let me turn the call over to the operator to take your questions.

Thank you. [Operator Instructions] Our first question goes to the line of Dan Fannon. I do apologize. Our first question is from the line of Ken Worthington with JPMorgan. Your line is now open, Ken.

Can you talk about the build out of the institutional pipeline and the focus on the $100 million to $400 million mandate wins? How is this build out progressing? I think last quarter you talked about the diversity of institutional wins. As that pipeline rebuilds, from which geographies are you seeing the greatest demand and which products and asset classes seem to be of the greatest interest?

Hey, Ken. Thanks for the question. So just to set the stage a little bit, recall that 2023 was a positive year for institutional for us. And we said then and we continue to say that we're rebuilding that pipeline since then. Last quarter was a positive pipeline and to your point was quite broad. And you see this quarter wasn't quite positive, but we're clearly building the pipeline. We're not fully there, those numbers will ebb and flow from a flow perspective, but they're certainly in the right direction. We don't talk so much about the actual numbers in institutional pipeline. We're continuing to work on rebuilding it. We think the work that the team is doing is clearly starting to show and a lot of the leading indicators are in the right direction. The areas to your question that we're finding a lot of interest in are things like our hedge funds, equities, particularly the small and mid-cap areas, enhanced index, our solutions business, pockets of our global fixed income business. And I mentioned those specifically not just to precisely answer your question, but also because we have this very strong view, which we said before, and certainly said in the prepared remarks that not all AUM is created equally. And look, you guys should tell us if you think we're thinking about this the wrong way, but we work very hard to balance fee rate, profitability and AUM. We don't just try to go for headline AUM on things and institutional in particular, and we say no to a lot of things. We don't participate in RFPs a lot of times when it may be a great AUM headline, but it's not great for the shareholders, not great for our bottom line. So again, tell me if you think we shouldn't be doing any of that. But I will say that some of the leading indicators that we look at across regions, all regions are quite positive. For example, RFP activity in the U.S. is up close to 35% as far as September, year-on-year, EMEA and LatAm, same thing, closer to 30% there. So, we feel like we're certainly on the right track. We're not firing in all cylinders, but we feel positive about the momentum that the team is making and the changes we're making on the team as well.

Thank you, Ken. Our next question goes to the line of Dan Fannon with Jefferies. Your line is now open, Dan.

So, question just on ETF loads, you've obviously had a lot of success. Was hoping to get your context around sustainability for some of the products in a lower rate environment? And then also there appears to be, as always in this market, more competition. So how do you think about kind of sustainability or defending your kind of the early lead that you have in some of these products?

Hi, Dan, thanks. So, obviously, we've been extremely pleased with the success that we've seen in the ETF suite, the active ETF suite that we have in the U.S. We are, I guess, at least the fourth largest global provider of active fixed income ETFs and that business continues to grow. For us to disaggregate your question a little bit, when interest rates came down, as you'd imagine, I think knowing me and the team that we have here, and Roger especially, we were looking at this on a daily basis. Frankly, we didn't know if anything would change. We sort of had created a category and what we found was there was no change. In fact, as rates come down, as Fed rates come down, base rates come down, this becomes more attractive to people across our active fixed income ETF suites. And I say sweet to answer a little bit of the spirit of your question as well, we have four active fixed income ETFs with at least $1 billion in AUM. And that mark, is actually quite important because to the competitive perspective, one of the challenges of ETFs obviously is to have liquidity and have scale. Well, we've got plenty of that. We've got plenty of that. And that allows us to deliver more to a broader set of clients who are clearly voting with their feet and delivering to us their capital to manage in these ETF forms. So, we haven't seen a hiccup and we continue to see growth there. Now, we want to grow on that growth, not just in the suite that we have in the us but as you know, adding new pieces to that suite. So, we just launched our Emerging Market Debt Hard Currency, ETF, I guess it was in August or so, in September we launched Active Equity ETF, Mid Cap Growth Alpha ETF. And of course, we're trying to take the show on the road and go into Europe, as you know, with the acquisition of Tabula, which is not just for Europe but for Latin America, the Middle East, APAC as well. And we launched our first fund there or here, because that's where I'm now, the Japan High Conviction Equity Usage ETF. And you should expect more launches in the coming months. So, we feel like we have the right to win in that area. We're not seeing massive pressure. We're actually continuing to see growth and we want to build on that growth to deliver further for our clients and ultimately, obviously for you, our shareholders.

Great, that's helpful. And then just as a follow-up, Roger, I understand the guidance for this year, but just as we think about '25, I know it's a bit early, but you're having success with the elevated investment as we think about flows and some of the momentum you talked about. How do you -- how should we characterize the pace of investment as we think about 2025, given, as I said earlier, some of the success you're having today?

Yes. Hi, Dan. Thanks for the question. You're right. I mean, there is a -- we are seeing some early success and we definitely define it as early success and there are things we are doing. As Ali just talked about, the launch of the ETF franchise in Europe, hopefully, we'll see and reflect some of the growth we've seen in the U.S, but we'll need we will need to support it. We need to do marketing around the ETF business in Europe as an example, but we're also doing things around the world to capture that opportunity. There are also other things that are out there, whether they be the results of our success, growing AUM results in some higher investment admin costs and some of that's coming through in this quarter that you can see. And there's also obviously inflation out there. So, costs will be higher next year. There is some -- we've given some guidance around the Q4. Our non-comp costs will go up in the Q4, again, totally in line with our guidance. Nothing is changing there. A little bit of that is one off as we really have some opportunity in the Q4, and we'll really be pushing some things hard in the Q4 where we really think we can succeed. But, yes, so costs will probably increase in Q4 -- sorry, will increase in Q4. We will probably increase a little bit as we get into next year as well, but we will give full guidance on that on the next call.

Our next question goes to the line of Patrick Davitt with Autonomous Research. Your line is now open, Patrick.

Hey, good morning, everyone. Follow-up on Dan's ETF question. So, obviously, a good problem to have, but without the strong inflows to the AAA ETF, you would still be in fairly consistent outflow. So, I'm curious if you have any of the thoughts on the potential to get the large flagship active equity products back to inflow in a world that seemingly still has little demand for products like that regardless of performance?

Thanks, Patrick. So, you're right, we're obviously very pleased about the progress across the board from a flow perspective, but absolutely the star that has helped us is on the ETF side. Now to be clear, it's not just one product that's driving it, right? We have now four products across the board that as I mentioned a second ago over $1 billion. We have a whole suite of products that we want to bring to bear. And so first if you focus in on ETFs then I'll answer the second part of your question. From an ETF perspective, our view very strongly is that you have to have the combination of great investment strategies put in the right vehicle. And we clearly have many great investment strategies, some that are according to our strategy Protect & Grow, Amplify, Diversify, some that are in the Amplify bucket that we haven't brought to clients in a form that they want to consume. They're small strategies, let's call it that. And we think we can put those in ETF form, given the reputation we've built, given the abilities process wise and client service wise we've built to deliver great investment performance in a form factor that they seem to want to consume. Now that's just not in the U.S., that's overseas as well, again starting in Europe, but also then in APAC and LatAm. So, the ETF franchise per se will continue to grow, and yes, we're building on the success that we've had in certainly starting with one and then now four crossing over the $1 billion mark. So, ETFs is not kind of a one trick pony so to speak, it's something we want to build on and grow. Then on the core of our business again, that goes a little bit more to the Protect & Grow part of our strategy. Absolutely, very focused on that. What we're finding is more and more on a global basis, we're seeing our market share gains stick in those categories. You're right. Broadly speaking, mutual funds are not growing categories. But if we can continue to gain market share like we are right now, we do think that the aggregate of our diversified business can deliver organic sales growth over time. I'll just note to you that this quarter we did deliver revenue growth. So net new revenue growth with the broad base of our firms, opportunity set for our clients. And that includes ETFs, of course, although those are lower fees. It also includes improvement across regions and product categories. So, ETFs we're building on and everything else as part of Protect & Grow, we need to and want to deliver to our clients. And we will continue to gain market share and hopefully turn that into growth as well.

And just putting some sort of facts around what Ali's just said or some data around that we have, I think it's 13 strategies with more than $100 million of net flow this quarter. That includes mid cap growth in the U.S. it includes global tech leaders, it includes enhanced index, includes a European strategy, European equity strategy in fixed income. It's not just the securitized area. Our multisector credit has got significant net inflows. And one of our hedge funds has pretty significant inflows as well. So no, it's you know -- you always want it to be broader, but like I say, I think 13 of our strategies are more than $100 million this quarter.

Thank you, Patrick. Our next question goes to the line of Bill Katz with TD Cowen. Your line is now open, Bill.

Okay. Thank you very much for taking my question. I did join a little late, so I apologize for that. I think you guided for performance fees to be up year-on-year, which is a nice surprise to what we were thinking about. I was wondering if you could unpack that a little bit. If you've already covered this, I apologize. But if you could unpack it between maybe what you're seeing in the non-mutual fund platform and then based on our math, I think that sort of moves to breakeven in the fourth quarter. Is that the right way of thinking about the delta here as we look quarter-to-quarter or year-on-year?

Yes. Hi, Bill. We hadn't talked about it on the call, so you didn't miss anything. And I hope the [ice-cool] call was good. As we sit here today, we estimate, as you say, fourth quarter performance fees. What we said on the call was higher. They'll be significant. They will be higher than fourth quarter '23. That is in two reasons. One is the improvement in the U.S. mutual fund performance fees. That's really pleasing to see. Now, you saw it drop this quarter. It was minus 18, I think, a year ago, minus 9 this year. And whilst, we don't know what we're adding on, we do know what's dropping off. We drop a pretty poor Q1, '20 -- sorry, Q4 '21. So, we'd like to see that improve further in Q4. On top of that, yes, we expect some positive performance fees from some of the very strong investment performance in hedge funds. But we'll see where we are at the end of the year. Obviously, the result will be dependent on performance over the remainder of the year. So, it's those two pieces, it's the mutual fund performance fees that I know you've talked about, Bill, and that is moving the right way. And as I say, we've got some strong performance at the moment in hedge funds that we obviously hope continues until the end of the year.

Okay. That's helpful. And then just as a follow-up, I noticed that the Board increased the buyback authorization by $50 million up to I think $200 million. And just given what looks like a very strong balance sheet at the end of the quarter, I'm not sure there's any timing in there of sort of ins and outs. But I guess conceptually, you've done a couple of deals now, your balance sheet is in great shape, buying back a bit more stock. How do we think about just sort of incremental deployment from here? And maybe you could sort of parse that between what you might be looking at on the inorganic side versus capital return to shareholders?

Yes. Again, and I hope we've been very consistent in our messaging around capital. We have a strict hierarchy of needs. And at the bottom of that, we will return capital if we don't see an immediate need for it. So, the Board have authorized an additional $50 million. Our expectation is to do that by the AGM next year. And we look at -- so, we will look at that in terms of the things that we want to do. Should there be something else we want to do in terms of seed capital or any other M&A? Obviously, that would that may change, but our expectation is that we would do that buyback between now and the AUM. And the mix of the buyback and the dividend is something we look at. So, we'll obviously look at the dividend as we always do each quarter and particularly at year end and evaluate that with our Board.

And just to add to Roger or Bill, we obviously have the flexibility given our balance sheet to invest both back in the business organically, but also as you've seen and you'll hopefully continue to see inorganically in a way that bolsters our business for clients and ultimately for shareholders as well.

Thank you, Bill. Our next question goes to the line of Craig Siegenthaler with Bank of America. Your line is now open, Craig.

Hope everyone is doing well. My question is on the insurance channel. So, we've watched you guys be very active on the M&A front, expanding into privates and ETFs, but we think one area where Janus can do more is in insurance. So, we wanted to get an update on your appetite to form strategic partnerships, I'm agreements or raise SMAs with third-party life companies. And do you have enough product now, especially in private credit with the Victory acquisition, which could help you compete in this channel?

Hi, Craig. Yes, thanks for the question. As you know, it's certainly on our minds as we think strategically about protecting, growing and diversifying. We have a strong base. I'd take three points. Number one, we have a strong base of clients that are insurance clients right now. Some of the most sophisticated insurance firms in the world, literally globally, rely on us to manage their both GA and also their separate accounts businesses. And, the feedback from all of them is quite positive. Obviously, we'd like to have more of those relationships and we start from a good base is point number one. Point number two is, there is obviously a lot of activity in the space right now. You see deals happening all over the place. As you'd imagine, we are knowledgeable about some of the deals that are out there given the background of my background and the background of the team here. So, we see a lot of those come by. We will be very selective in doing the right thing that isn't giving away the farm, so to speak, just to have an insurance relationship, but we see a lot of opportunity in having insurance relationships. The most important thing for us though for one of those insurance relationships is to make sure that culturally, just like any M&A, culturally we're aligned. And to be fair, that's something that a lot of people overlook. It's something that we're very, very focused on because if we want to make a partnership with an insurance company, we want to make sure that we're culturally aligned to grow the business for them, for us, based on the IMA structure that one could craft. So yes, we're very active there. You're exactly right though my third and last point…

Thanks, Ali. We have a follow-up on Privacore and I know it's early innings, but have there been any additions to the platform in 3Q in October, and also, I think potentially could we see you add to your minority equity stake? And I know there was a big 200 billion AUM remote manager that was added earlier in the year, but I think that was before 3Q, so we're looking for anything incremental?

Yes, thanks a lot for the question on Privacore. We are very, very pleased with the progress we're seeing on Privacore. And just to remind everybody, Privacore essentially sits at the nexus of institutional quality alternative investment managers who want to access the private wealth business and the private wealth clients, our clients who want to get access but need different form factors, need client support, need a triage of sorts as well. And that's essentially what Privacore provides with really great success. So, you're right, we had the $200 billion alternative asset manager, a well-known asset manager that came into the platform with knock on wood, it was good success for them. We have now a I guess, $70 billion technology focused, probably premier technology focused investment firm that's on the platform. We have about a $50 billion real estate manager that's going to come on the platform if not already. We have a $40 billion private equity firm that is newer that's coming on the platform too and other kind of very well-known and we're getting significant flow from folks. It's tens and tens. I know the exact number but let's just say tens and tens of GPs who are extraordinarily high performing again institutional quality who need help. Janus Henderson Privacore's help to get onto, to create the right product form and to support, the private wealth channel. So, we're very pleased with what we're seeing there. We certainly can choose to bring them on board fully. Candidly, Craig, it's a little bit of a decision about do you want to let them flourish a little bit before bringing them fully on board or not. We'll make that decision in due time. But if you take a little bit of a step back, I'll just take this opportunity to reiterate this concept of we're going to where the puck is going across, our many of our M&A in private. So, if you think about what we've done at Privacore, we're democratizing open architecture alternatives, right? A lot of people are trying to democratize, but they have a closed architecture version. We have one of the only open architecture versions to bring that across to the private wealth channel. That's a multi trillion opportunity. That's again where the puck is going. Clearly, with NBK that we brought on board, which was the 1st private credit GP that we brought on board, that's investing in emerging market privates, a place we heard our clients’ needs are quite great. And then, of course, to the earlier question the Victory Park Capital and asset backed credit, again, just getting where the Victory Park is going. So, we feel like we're kind of hooking ourselves to growth trajectories in all of those areas, and Privacore obviously will be essential to NBK, but certainly also to Victory Park Capital as we grow that business.

Thank you, Craig. Our next question goes to the line of Mike Brown with Wells Fargo. Your line is now open, Mike.

I just have one on the institutional pipeline. A large bond manager is seeing significant flow pressure and understanding that's a somewhat sensitive topic to talk about competitors. But I guess I'm curious, if your fixed income business is seeing a pickup in activity? Has the pace of RFPs picked up in the last two months? And could this be an opportunity for Janus Henderson?

Yes.

And maybe just with mandates in a situation like this, yes, yes. But I guess with mandates in a situation like this, is it is the timeframe somewhat faster or kind of similar to what a typical kind of institutional mandate would be?

On the institutional side, it's a little bit faster. So typically, you would talk about 12 to 24 months honestly from an RFP perspective. Here, you're talking about things in several quarters on institutional side. When unfortunate things like that happen, which candidly no one wishes on anybody, but when they happen, they move a little bit more quickly on the institutional side of things. Just to be clear as well, things move much more quickly on the intermediary side. So often, intermediary can have much more flexibility in RIAs, et cetera. That is something that we hope to continue to get our fair share of, particularly with some of the ETF platforms that we have, Mike.

Thank you, Mike. Our next question goes to the line of John Dunn for ISI. Your line is now open, John.

Thank you. So, the multi-asset segment remains in slight outfit. Maybe could you talk about what do you think it's going to take to see better inflows in the balance fund?

Sure. Happy to take that. So multi-asset, to your point, is predominantly the balance fund. So let me start there and then we can move to the other part of it, which is the solutions area. Look, I think what you're seeing among clients right now is this willingness to step back into the markets. You're seeing that from a flow perspective into the equity markets, but want a little bit of ballast from fixed income to deal with some of the potential volatility there. Balance clearly, by definition is the perfect almost personification of that need, particularly as there is a return profile that you now get from fixed income when you weren't getting it before. And equity seems to be doing okay more broadly as well. So, for us, we're seeing more interest in that space. We're seeing more interest within balance. If you look at our flow trajectory over the past several years, we're doing better and better, clearly gaining share. And a lot of that is on the back of, knock on wood. Fantastic performance by the team in both sleeves and the portfolio construction between the fixed income and the equity sleeve of things. So, we are very bullish about the balance fund. We think everybody on this phone everywhere else should take a look at it, either ours or somebody else's. But we think it's the right model for this market where there is hopefully equity return and fixed income balance and return in the game and our performance is quite strong. So, that's -- you're right, the bulk of the multi-asset side of things. Now, there is the rest of multi-asset, which is effectively a solutions business. And there are two elements there to think about. One is the solutions business that we're…

Got it. And then my other one was, how are you thinking about integrating your acquisitions? Are they going to be more like affiliates or something more integrated? And to the extent you do more in private credit, would it be like bolting on to Victory Park or yes, just maybe your philosophy around that?

Yes, we're not big believers in boutique models as you've seen other people play. In other words, you know, independent and just loosely tied into a holding company. We have historically not seen that work. In most instances, we very much believe in what we call integrating smartly. We like to integrate where we think we can add value, i.e., distribution, regulatory, compliance, legal, IT, ops, those types of things, but not integrate in areas where the firm can't add value. So, we have these conversations all the time with folks that we could partner with or acquire, and the conversation inevitably goes to listen, if we're going to acquire you, rest assured, we don't know how to invest like you do. So, we're not going to come in and tell you how to invest. That's what we're bringing your expertise in for. So, we're not going to integrate quote unquote that. Yes, there'll be oversight. Yes, there'll be risk profiles they have to go through, but we're integrating smartly across the board. So, we are not in any way looking to build a boutique model. That's not the plan. That's not how we're thinking about things at all and that's not what folks we've acquired have signed up for. To the private credit side of things, when appropriate, yes, our hope is that Victory Park Capital is a chassis for other teams at least to come into, where Victory Park has the ability to plug them in. If you think about it, prior to Victory Park Capital, we didn't have a private chassis or expertise to buy teams and bring them on board. Well, guess what? Out of the many, many benefits we get from Victory Park Capital to the insurance conversation before to working with our public securitized business, as we talked about before, to other opportunities that we bring on board from a cultural perspective, we now have a chassis to bring teams on board, where appropriate for Victory Park Capital. So, John, your question is quite appropriate in the way we're thinking about things strategically as well.

Thank you, John. Our next question goes to the line of Michael Cyprys with Morgan Stanley. Your line is now open, Michael.

Great, thanks. Good morning. I just wanted to ask on the distribution side of the organization, if you could update us on some of the changes you've made across the distribution side of the organization over the past couple of years? What changes do you think have been most meaningful for the growth that you're seeing today in inflection? And how do you anticipate distribution team evolving as you kind of look out from here? And maybe you could tie into that how might you evolve the client experience over the next several years as well?

We've made a lot of changes to the distribution side of the business, both on intermediary, which is where we started in the U.S., and then are expanding it to EMEA, LatAm and APAC. And then also in institutional business, which is a little bit later changes that we're making. In fact, we're still making some changes as we speak. The way we think about the changes are relatively well versed. So, we think very much around what the people are on the teams. So, are they the right people? Do they have the right relationships? We think we're there mostly across the board. We then think a lot about the product. Do we have the right products that are there? Can we build them organically or inorganically? We think then about the process people go through. So, what are the process people take? What kind of data can we give them? Who are they looking to in the marketplace? And that's something that changes quite a bit when we bring in new people, certainly new leadership to bring on board. And then we absolutely have to think about the incentives that we build for folks. Do we have the right incentives in place to have them aligned with growth of the business? And that has to be put in place as well. So, as we go down the line, each of those elements change the people, the product, the pay, incentives, and obviously the process and the data that we use for that. And that's something that we started in the U.S. We changed that quite a bit. And I think you're seeing at least early signs, maybe it's a little bit later now, but early signs of the fruit and labor where we now have five consecutive quarters in the U.S. intermediary business of positive flows. We picked up a lot of those experiences and brought some of those are being put in place. And now you have a second consecutive quarter of positive flows in that area. And again, we're applying those to the rest of the business. So those are the main changes that we're going through. It's soup to nuts and it feels like we're certainly on the right track and the great, great leadership team that we have on the distribution side right now is delivering on that. All of this to your second part of your question is very focused the way we do all of those three, four things to deliver better client outcomes. We have to deliver on the investment performance. That's first and foremost what we do. But we have to deliver them in a manner that clients can easily be supported. And that's what the client group does. And so, you'll see more interaction with clients. You'll see deeper relationships with clients. You'll see also hopefully over time more clients who rely on us for more and more of their asset management needs.

Thank you, Michael. Our last question will go to the line of Alex Blostein with Goldman Sachs. Your line is now open, Alex.

Hi all. Luke here on for Alex. Thanks for taking the question. Just one for me and apologize if I missed this earlier, but I wanted to get your thoughts on the near to medium term growth drivers for VPC and what the differentiated strategic angle is for VPC from partnering with Janus specifically?

Hi Luke, thanks very much for joining and putting in the question. So again, what we've been hearing from clients over and over and over again is that they want more private credit, but they want something that's different than typical direct lending. They want something that's uncorrelated or complementary to the direct lending suite that is pretty well baked out there. And candidly for the most part has turned into a broadly syndicated loan market, if I may say it. And so, asset backed is the clear area that they were looking at. And so, we found VPC. VPC has phenomenal origination as a differentiator. The teams there are very, very strong, they're very creative, they've got great networks, they've got great data and technology actually. And on top of that all, as I mentioned before, a great culture and a great set of partners who are there and they have great origination but they needed more capital. They were effectively leaving money on the table. When they had all of this flow coming in from a deal potential, they didn't have the capital behind it. So, our opportunity to work with them is to grow the capital that they can put to use. That will take time. We're well aware of that. We've done this before on the team. We know it takes time. But we're working together with their distribution team and our distribution team to lay out the plans to exactly to your point, grow. Now, they have four kind of buckets of their of their business. One is the asset-backed opportunistic credit funds. So that is something that we think has a lot of growth. The growth, the emphasis there is on capital preservation through market cycles. If you think about the insurance question earlier…

That will conclude the question-and-answer session. So, I will now pass the conference back over to you, Mr. Dibadj for closing remarks.

Thanks, Megan. I just wanted to end the call by thanking everyone at Janus Henderson, whether they be in the support functions, the IT operations functions, the investment teams, the client groups, everywhere across the firm for all the hard work to deliver these very clearly strong results and signs that we're on the right track, and most importantly, delivering to our 60 million clients, 60 million brighter futures we're trying to deliver around the world as well as to our shareholders and all of our other stakeholders. So, thank you for your interest. Thank you for your hard work at Janus Henderson, and bye for now.

That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.