Good morning. My name is Emily, and I will be your conference facilitator today. Thank you for standing by, and welcome to the Janus Henderson Group Fourth Quarter and Full Year 2022 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. [Operator Instructions] In today 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 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 fourth quarter and full year 2022 earnings call. I'm Ali Dibadj, I'm joined by our CFO, Roger Thompson. In today's call, I'll start with some comments on the year. Roger will then go through the results. And after that, I'll provide a strategic update. Then we'll take your questions following those prepared remarks. Turning to Slide 2. 2022 provided one of the most challenging market backdrops in history. As you undoubtedly know, since 1928, 2022 is 1 of only 4 years where stocks and bonds had combined negative returns. U.S. treasuries suffered their worst losses since 1988 and had back-to-back annual losses for the first time in over 60 years. This market backdrop translated into a difficult flow environment. For example, in the U.S. 2022 was the first time mutual funds and exchange traded funds experienced combined net outflows. Janus Henderson certainly wasn't immune to the tough market conditions, which our results suggest. As I reflect upon the year though, despite the industry headwinds, there are several tangible signs of progress at Janus Henderson. There was a tremendous amount of work done, and we have the foundation to achieve our ambitions over time on behalf of our clients, their clients, shareholders, employees and all our stakeholders. Over the summer, we brought together people in the firm representing different backgrounds, parts of the business and regions to create the Strategic Leadership Team, or SLT, as we call it internally. This group is responsible for establishing the strategic direction of Janus Henderson and members of the SLT will be leaders and partners in the implementation and execution of our strategy. We've also been successful elevating and adding to our talent across the organization in areas such as investments, distribution, operations…

Thank you, Ali, and thank you again to everyone for joining us on the call today. Starting on Slide 3, and I look at our fourth quarter results. Volatility in global markets continue to impact our flows. However, investment performance, ending AUM and revenue, all improved over the third quarter. Our long-term investment performance remains solid, with 67% of our assets beating their respective benchmarks over 3 years. December ending assets under management were $287 billion, up 5% from September due to better markets and U.S. dollar depreciation against other currencies, which is partially offset by net outflows. Net outflows were $11 billion, which includes $7 billion of previously communicated institutional redemptions. Adjusted financial results are flat to the prior quarter. And finally, the Board declared a $0.39 per share quarterly dividend. Turning to Slide 4 and investment performance. Longer-term investment performance results versus benchmark improved compared to the prior quarter with 67%, 70% and 75% of assets beating their respective benchmarks over the 3-, 5- and 10-year time periods. The 1-year number is being impacted primarily by the fixed income and multi-asset capabilities. In multi-asset, the balanced strategy, which is the vast majority of these assets, switched to underperforming the benchmark on a 1-year basis. This is due to short-term underperformance during the first half of 2022, especially Q1. The balance composite outperformed its benchmark during the second half of 2022 and as we sit here today, it's back above its benchmark on a 1-year basis. Absolute and relative fixed income performance was impacted by the historically tough year for bonds. The longer-term time periods remain very strong. For a few of our larger strategies such as Core+ and absolute return income, the level of underperformance to benchmark was minimal. Shorter-term periods of underperformance will happen. Our investment to…

Thanks, Roger. Moving to Slide 13. I want to remind you of our discussions on strategy from prior earnings calls. First, we introduced our 3 strategic pillars of protecting Janus Henderson's core businesses, amplify our strengths that are not fully leveraged yet and diversify the firm where clients give us the right to win. Second, our strategic leadership team, along with input from clients, identified a broad range of opportunities which aligned with the 3 strategic pillars. The opportunities were filtered through a process designed to capture those opportunities that provide the best possible outcomes for our clients and will lead to organic growth and attractive operating margins over time. And third, the reduced list of opportunities was then evaluated along 2 dimensions. Janus Henderson right to win and how the opportunity measures against future client and industry importance to arrive at the final list of initiatives that we will look to execute on. I want to spend a few minutes walking through how we think about implementing and executing the strategy on Slide 14. On that slide, you can see the different steps of our strategic road map. The steps aren't entirely linear as each will have short-and long-term elements with bearing time horizon. But having done this before, one does need to create an environment for change before one puts a change plan in place. One of the first actions I took after starting was to assemble the strategic leadership team, which I talked about earlier. It was an important step in getting the best thinking and buy-in on our strategic direction. We've increased our communication, particularly to clients and employees, to provide transparency on the path forward for Janus Henderson. More accountability has been introduced at the senior levels of the firm to drive the right behaviors…

[Operator Instructions] Our first question today comes from [Yu-Yaun Chao] from Bank of America.

It's actually Craig Siegenthaler from Bank of America. So my first question is on capital management. Just looking at what the stock did in the second half of 2022 and also how much excess cash Janus has today and how it's grown, we're just wondering why not buy back more stock?

Craig, let me -- this is Roger. Let me take that first. I mean, I guess, first, most important thing is there's no change in our capital management philosophy. The Board takes a very active approach to the management of cash and capital and balancing those capital needs against the investment that's needed in the business and returning cash to shareholders. So the focus is to use that excess cash generation to reinvest in the business organically first, potentially then inorganically, we talked on that a little bit, I may talk about that a bit more in Q&A. But then where we don't have a need to return cash to shareholders. As we did in '22 in the first half -- first half 2022 through buybacks. But given the current market volatility, the opportunities we see, we were conservative and prudent in the second half. But again, over the year, we repaid $358 million in dividends and buybacks.

And just for my follow-up then, if you're not using excess capital for buybacks and you're building it up, I'm just wondering, can you update us on your thoughts behind M&A, both kind of larger scale deals that may possess some redundancies and also smaller strategic transactions that can potentially fill in product gaps?

Sure, Craig. Let me take that. So look, our philosophy on M&A has not changed either and nor is the change for me for a number of years. Remember, our view is that M&A where there is a significant amount of overlap and cost savings is the vector of driving value is typically unsuccessful. The markets have said that -- you have said that, others have as well, and we agree with that. That's unlikely to be the major thrust of M&A that we do. On the flip side, M&A that brings in a new set of skills, large or small, is at a higher chance of being successful. And that's what we're going to look at, and there are plenty of opportunities out there, and we'll continue to look, but we're going to be disciplined. And the reason we're focused on the complementary-type M&A, the puzzle piece type M&A, is that that's client led. We are going to be client way we bring on teams, the way we buy, build and partner with others will be driven by bringing something new and better to our clients. And that's part of our diversified strategy prong. It's very importantly not a strategy unto itself, but we want to buy and build partner to deliver what our clients' needs are and that will be more complementary.

The next question comes from Patrick Davitt from Autonomous Research. Please go ahead, Patrick, your line is now open.

First question, reading between the lines, and I think this has been confirmed by some headlines we've seen, there does appear to be quite a bit of portfolio management and distribution changes going on. You highlighted some of that in the deck. And I'm sure this is all an upgrade from a longer-term perspective. But historically, so much disruption in fund management and distribution has led to accelerating outflow for asset managers. So I guess, firstly, is this a fair observation from the outside? And secondly, why or why not should we be concerned about accelerating outflows as a result of all these kind of rapid changes you're making?

Yes, it's a great question, Patrick. Thank you. So you're right that we've made a lot of change in 2022, which we'd characterize as a transition time. I would argue that from the outside, and it's tough to see our hypothesis, I hope is right. I think is right is that it's also a year of tremendous progress. Tremendous progress in repositioning Janus Henderson to meet our clients' needs and meet their clients' needs and set up for the future, whether that be bringing new talent, whether it be developing the Fuel for Growth, doing the reorg, simplifying our business, adding new teams, you're correct, where it doesn't serve the client and our current teams, changing those teams. That was part of our Fuel for Growth, building the Strategic Leadership Team, creating a strategic road map, which we're now executing. We're doing a lot. And when we speak to clients, to your point, they want stability but they understand that we are -- stability does not mean stagnation. They want improvement, and we are improving for them. We are improving along all those dimensions. And honestly, I couldn't be happier with my colleagues at Janus Henderson. I'm very grateful to the efforts that they've made and the steps forward that we've made. So the changes are well thought out. They're well thought out to deliver better for our clients. We don't see any of these changes driving the outflows that we've seen so far. And I feel pretty comfortable saying that we're on track.

Pat, if I could just add to that, just a couple of facts as well because -- we're excited to talk about the changes. We're excited about the people joining and rejoining. But again, I don't want to make sure that we're very clear. We've got some very strong established teams and particularly portfolio management teams. Our global portfolio management team has got an average of 23 years in the financial industry, 13 years of which Janus Henderson and our analyst team is 14 years in the industry, and 7 of those with the firm. So we've got some really strong roots in the team. But yes, we're pretty excited about some of the joiners across the organization as well.

And then a quick follow-up on the expense savings. I think last quarter, you expected one-third of that to be realized in 4Q, but maybe you hinted it was more than that. So as we try to pack maybe how much that acceleration helped the fourth quarter result? Where did you come out on that number? And how should we think about the cadence through the rest of 2023?

Yes, we're on track for that delivery. I think as I said on the call, the delivery of the -- we've been very clear that we're excited about the opportunities we've got, and we're investing -- reinvesting that fuel for growth. And as I said on the call that ran slightly ahead the savings ran slightly ahead of the investments we're making in Q4.

Patrick, just to add a little bit to Roger. It's more of a timing question than being ahead or behind the track.

The next question comes from Ed Henning from CLSA. Please go ahead, Ed, your line is open.

Just the first one, can I just have a follow-up on the first question on the call, just a clarification. Are you saying despite the strong capital position while you doing stuff organically and potentially looking at doing stuff inorganically, but it's going to be disciplined. We shouldn't think about you restarting the buyback anytime soon and even future buybacks, you're really focused on both organic and organic opportunities. So buybacks are really off the agenda at the moment?

I think it's just a priority -- sorry, Ed, I think it's a priority of is what we're talking about. And again, that hierarchy has never changed. We're always looking at how do we -- can we get a bigger return in terms of investing in the business, either organically or inorganically. So -- and the buyback is from excess from once we've satisfied all of those things. So no buybacks are not off the agenda, but we're pretty excited about some of the things we can do organically and inorganically at the moment.

And maybe just to clarify that a little bit further. I understand what you're saying. But is this just -- obviously, we're talking about the '23 strategy was that the time frame we should think about and you potentially relook at this in '24?

Yes. I think again, we will give -- we will continue to give more clarity on the strategy as we go through further calls. Again, this is a Q4 call. We'll update on capital with Q1 and buyback as part of that.

Can you just touch on -- you talked about obviously changes in the industry. You've seen markets very strong at the moment. Are you seeing any change in flows coming into different segments of the market? And then from there, can you just talk a little bit more about your pipeline, what you're excited about or any spots that you're concerned about the potential flows going forward, please?

Sure. Let me start that, and Roger can chime in. Look, it's clearly a very dynamic marketplace right now. Dynamic from a pure stock and fixed income markets perspective, but also from an industry perspective, things are changing. And look, that offers opportunity for us. That offers opportunity for us to deliver better for our clients where they have needs that aren't met. And we'd like to capitalize on that. And we're putting investments to the earlier question, significant investments to try to capitalize on some of the movements that are there. I wouldn't say we're seeing massive changes in the channels right now just from what's happened in the markets recently. Maybe if you squint a little bit, the intermediary markets are a little bit better. But again, that could be quite volatile quite quickly, depending on what happens in the markets. I'd say in the institutional channel, there's clearly more activity. Part of the reason we highlighted it today is that a lot of our clients and potential clients are putting more money to work in that area, and we're investing to be able, again, to support them in those endeavors. So a little bit more activity in institutional, particularly, I'd say, around the fixed income area, not unanticipated by all of us that when rates change, fixed income becomes a lot more interesting. And there is money in motion there. And we do see similarly some opportunities within equities, obviously. And we are seeing some signs of a shift away from passive in some institutional businesses to something more from an enhanced index view. And so those are some of the areas that we're looking at, clearly, institutional, always intermediary. You've seen it be a very big focus for us globally and certainly in the U.S. And again, we want to invest and make sure we can capitalize that by delivering for our clients.

Our next question comes from Ken Worthington from JPMorgan. Please go ahead, Ken, your line is open.

I wanted to dive a little bit into Asia distribution. You highlighted in one of the earlier slides in the deck, you appointed a new Head of Asia Distribution. And we're seeing success by some of your peers in the industry. So maybe as a region, how is Asia performing in terms of net sales to Janus? Was it an inflow or outflow in '22? And can you give us a sense of magnitude? As we look forward, what are the opportunities for you to grow your presence in Asia? And what products may be most interesting? And then maybe lastly, life after Dai-ichi, since they sold their stock in '21, what impact has that had on your business in Japan and Asia more broadly?

Thanks for the question, Ken. So let me start and Roger can chime in and redirect. So I'm glad you pointed out Asia. Asia is something that we have had presence in more broadly from a very, very long time ago. And we think it's a great opportunity to upgrade and invest in that region. If you think about it, our strategy is really based on delivering on clients' needs. And there are 2 prongs effectively for that strategy when it comes to Asia. The first one is that many of our clients are going into Asia more and more, think of our intermediary clients, think of our broader private bank partners, et cetera, et cetera. And so serving them in that region is one of the things that we think is a great opportunity for us, and that's one of the areas that we're investing. The other opportunity, obviously, is to provide investment capabilities from the broader APAC region to the rest of the world. And that is the other prong that we're investing in as well. So effectively, an export of local investment skill sets that we have that, in some instances, are actually quite unique. We put that in the amplify category of our strategy to the rest of our client base and future client base. So those are the 2 prongs that we're really focused in on. And you focus in on, Ken, the distribution changes that we've made there that obviously helps with both of those, both the inbound and the outbound. And we see enormous opportunity for us to continue to grow. It's not, as you know, an overnight success region. The good news is we haven't been there just overnight. We've been there for quite some time, but we need to continue to invest in that region to make sure that we deliver on the expanding client needs around that region, both locally and externally. From a Dai-ichi Life perspective, gosh, they are a great partner of ours. I've gone to know them a little bit. And I will say that the interactions there are very, very strong, and we have great relationships and thinking through the needs of that client base and of their Japanese clients. And more broadly, their global presence. It really is a global firm. Great relationships there, thinking about how we can serve them better and thinking how we can collectively take advantage of the industry's changing dynamic, as I mentioned at the outset, and try to deliver best for them as a client and their clients as well. Roger, I don't know if there's more you want to add?

Just again, just adding some meat to the bones there. It was not a great year for flows for Janus Henderson. We were $30 billion Asia-Pacific as a whole was slightly positive. So it's just there. Within that, Australia has seen some very strong growth, both in the intermediary and the institutional channel. So we've got a great business that's growing well in Australia. Ali and I visited Japan, I think we mentioned it on the call the last one we had. We got some real, real opportunities in Japan and are excited there. Ali -- I think, Ali is going to Japan -- going to Asia in a couple of weeks because again, we've got a business there that, yes, as Ali said, we've been there for a while, but our business there is relatively small. And we'd like to see that grow significantly and some of the investments that we're talking about in the SLT investments that we've mentioned on the call and before. One of those is growing the Asian business. So I hope I look forward to telling you more about that in the future.

And just a quick one. You wrote down intangibles this quarter, I think, $36 million. Can you give us a little more information on the nature of those write-downs?

Ken, they're noncash accounting adjustments for intangibles on prior acquisitions. So we can take you through that off-line if you want in more details, but I say, noncash accounting.

Our next question comes from Alex Blostein from Goldman Sachs. Please go ahead. Your line is now open.

Ali, I was hoping we could maybe dig into a little bit more in your comments regarding intermediary distribution. It's a fairly competitive channel as, of course, we all know understanding that it's growing, so you guys would like to add incremental resources there. But maybe talk a little bit about which products you expect to really lead in this channel that you think you could really sort of lean into to drive incremental net flows? And does that also expand beyond the existing intermediary channels into new ones or kind of doing more with the platforms that you already have?

Yes. Thanks for the question, Alex. So we understand that it's competitive in that marketplace, and that's good because we're pretty strong competitively, and we are a big believer, I'm a big believer in the U.S. intermediary market, our brand, our team, our products, your question I'll get to, and our partners, current ones and ones that we're developing over time, we feel very comfortable that we can over time again till build that business even more strongly than it is today. I mentioned a new hire to lead that group, North America Client Group, gentleman by name Michael Schweitzer, you may have heard his name. He came from a very strong competitor in the space, and he just arrived in November and already changes are happening, changes organizationally, changes to particular people One of the ones that we're most excited about is that we've brought marketing right into the operating unit of the North America Client Group to be integrated in the way we go to market with our clients -- for our clients to improve accountability, collaboration, urgency, all those things that we talked about almost back to day 1 for me. And we've also spent some time to realign the incentive structure. If you think about that structure, it's a sales force heavy structure for us. We have people all over the country, delivering our products and supporting our client base and our adviser clients and their clients in a very active manner. And we've changed the incentive compensation there compensation, looking at market share, looking at what assets are stickier and delivering on those, activity levels. Again, it's all going to be about having the metrics, measuring them and paying on that. That's tied to our strategy. So all those changes on a very, very strong…

A quick one, Roger, for you, on the expense guide and particularly the comp rate guide. Sorry if I missed it, but are you assuming sort of year-to-date market performance, or what kind of beta assumptions do you guys have baked into the comp rate?

That's all -- that is also at year-end markets. So obviously, markets pleasingly have started the year well, but what I've given you in terms of guidance is based off 3112 market levels.

The next question comes from Elizabeth Miliatis from Jarden. Please go ahead, Elizabeth, your line is open.

The first one is just on the noncompensation growth rate. You said mid- to high single digits. Obviously, you also mentioned that a big chunk of that is in relation to some amortization step-up. If it is a challenging market and you do pull back on spend again in '23 and all concerned that you're sort of underinvesting in the near term? Or do you feel that the cost efficiencies that you'll generate will sort of really help you invest in the business near term, despite whatever is going on in the market?

Yes. I think there's a number of things in there list, so let me try and pick it up. And if I miss them, please follow up and Ali chip it as well. But yes, I think there's a number of pieces in there. First is, we've always looked to run the business efficiency -- efficiently, and we had another good hard look in Q4. And as we said, we had line of sight of $40 million to $45 million of savings. And we're on track for those. And as I've just said, those savings probably ran a little bit ahead of the investments we're making. And then where are you investing? Or where are you spending that money? And I put that into 3 categories. The first one -- those 3 categories are sort of intentional, nonintentional, if you like, and accounting. So the intentional stuff is the exciting things. That is where we believe we have real opportunity to grow to see those -- to see flows for the future, to grow in some of those areas that Ali just talked about. That's primarily -- there are people pieces in there. We're investing in new people. There is certainly marketing in there that is getting out and seeing clients. So our T&E will be higher, It will be lower than it was in '19, but higher than it has been over the last 2 or 3 years. So we're excited that we'll be doing more conferences, more higher-quality conferences, things like that, where we're seeing real interest in talking to our portfolio managers and our broader teams. So that's the exciting piece. And then like you say, there were 2 other pieces. One is the sort of unintentional. That's inflation, which is real, particularly in some areas like technology, where you've got contractual contracts with inflationary uplifts in them. And FX as well, and some of that is sterling -- sorry, the U.S. dollar has weakened a little bit relatively from its real strength, then that's benefited our AUM and our revenue, but that will increase some of our sterling and euro costs in dollars. So that's sort of an unintentional piece. And then like you said, that accounting piece, which is about 40% of the increase, that's real, that's unavoidable. It's good. That's again, is a very important piece of work that we've done over the last couple of years that will go live shortly. And so we're excited by that, but we have to pay for it now through the P&L, so it's being capitalized. That unintentional piece in the accounting piece. Yes, they're fixed, if you like. So then you've got to be even more careful. We really want to make those investments. We're excited by those investments. So we'll continue to look at how we can make sure we're doing those right and how we can be more efficient in everything else that we're doing.

I just want to assure you that we're not going to underinvest.

And then just a second question is just on performance fees. I mean, obviously, we're hardly a month in. But are you able to sort of characterize how you think the business is placed on a performance fee perspective, whether it be around high watermarks or that sort of stuff just because the last couple of years, we've gone from some pretty sizable performance fees to -- in FY '22 negative? So getting a sense of where we might be tracking potentially in the next year would be helpful in terms of what your place.

Yes, I can help a little bit, but not a lot there because, as you say, it's very early in the year, and a lot of those are either midyear or year-end. Crystallizations, again, to give you the facts, there's 2 pieces of performance fees to look at. There's the U.S. mutual funds, which is about $50 billion of assets, which are subject to performance fees. There, you can see that their 3-year rolling, you can see what's dropping off. We've got a couple of areas, and they're these so they're negative at the moment. We'd have to add some good performance to improve those with flat performance. So you know what's dropping off, you don't know what it's adding. But with flat performance, you can calculate that we would or we would expect to see about $60 million, $63 million of negative performance fees in in 2023 without any alpha. Outside of that, there's about $29 billion of AUM with performance fees on it. As I say, that's difficult to predict what's going to happen. But we are in a -- it's in a range of products and a good number of those are at or above their high watermarks. So sorry for not being able to help fully hopefully, as we had some good alpha and those numbers can come in, but that will depend on what we do in the year.

Our next question comes from Bill Katz from Credit Suisse. Please go ahead, Bill, your line is now open.

First of all, thanks for moving the time of the release for us. That's helpful. So first question, just maybe picking up on noncomp. If I think about your gross savings and then your net increase in your year-on-year noncomp of mid- to high single digits, it would sort of impute to a high single, low double gross spend rate. Is that the right way to characterize it? And B, if that's correct, I know it's early, obviously, for '23. But where are you in the spending cycle maybe on the sort of intentional spend as we start to think about '24 and beyond in terms of that noncomp growth rate?

Yes, as you said, so in Q4, we were running ahead on saves over spend. Those things will start to materialize more in Q1. So that will normalize that. So as Ali said, that's really just timing. And then -- so I wouldn't -- I think Q4 is a little bit artificial probably is what I'm saying, which is why you should look at the full year, and that's a mid-to high-digit growth rate. As we just said on the on the call with Liz, who probably doesn't agree with you with the call moving by an hour to -- an hour later. So sorry for our Australian friends. Then 40% of that is accounting. So as I said, you're going to split that into 3 pieces, there's the accounting, there's the inflation and FX and there's the investment. And that investment piece, yes, we we've got plans for those. We're trying to get out of the blocks in the right places as soon as we can.

And Bill, just to the pure math of how you're describing it, I think that makes sense. If we didn't have the cost savings, our investments would be significantly higher. You mentioned low double digits, that's probably in the right range.

And just a follow-up for you. So now you've had another 3 months in the seat and make nice progress. As you think about some of the shape shifting that's going on in the industry, sort of the acceleration of the retail democratization, fixed income over equity, et cetera, maybe non-U.S. opportunity set. How is your thinking between sort of the footprint that sits today and the improvements you can make versus the bolt-on opportunities? And what I mean by that is, is the sort of the mindset here that M&A may be more important, all else being equal? Or is it so you need to see what's under the hood first or a combination of the two? I'm just trying to get a sense on how you're thinking about using that free cash flow.

Yes. Thanks for the question, Bill. Look, the industry is dynamic, but it's never dynamic in the same direction or else it would be easy to predict. I don't think coming under the hood, I've seen anything different than what I saw last time we spoke. In fact, if anything, I feel much more confident about our ability to deliver for the current client and the future client needs, whether it be having delivered the Fuel for Growth savings so far, whether having it be bringing in really strong talent, whether it be some of the early wins we've had in emerging market debt or JAAA or what have you. I feel much better actually now that I have more comfort with what we have that we are very, very well positioned. That solid foundation I talked about way back when is absolutely here and we're able to grow from it. That doesn't mean that we have everything that our clients want from us exactly as you described it. We are looking to buy, build and partner across the board to find areas where we can deliver better service for our clients and our clients' clients. And that may be investment strategies that we have gaps in. We've talked about some things in the private world, for example, that may be other tools that we can bring to bear to our clients within client service or distribution more broadly. I wouldn't say that the importance of M&A has gone up or down. I'd say that my confidence in the foundation that we have to buy, build or partner on top of has certainly gone up.

The next question comes from Nigel Pittaway from Citi. Please go ahead, Nigel, your line is now open.

Just wanted to return, if I could, to the comments you've made on SMID and Mid. I mean, obviously, you're saying that there was very strong performance in '22, yet it's still a big contributor to equity outflows. Is that just a matter of time? Or is there something else going on that's sort of not really connecting the performance with the flows?

I would -- look, having a product that is a very high-quality product does not always mean that you will be successful financially or from a P&L or growth perspective in those products. There are different drivers obviously. The two most important of which is that it has to meet up to client demand, and you have to be able to deliver to those clients. So think about step number one. Over the past 10 years, deciding between haves and have-nots, particularly in Small and Mid-Cap, maybe wasn't quite as important because money was free and they have and have not companies that one would invest in had a pretty good shot at doing okay. And so the differentiation skill set that we have as Janus Henderson, our portfolio management teams, our analysts, our associates spent all their time understanding which companies a have and have not kind of less important in the past 10 years. Now where money is not free, and it doesn't sound like it's going to be free for a while, differentiating between the good companies and the not so good companies is a skill set that we are extraordinarily good at and will be in high, high demand. It just hasn't been for the past little while. And so in this location that you've seen in the marketplace, I'm not surprised that our flows would be impacted negatively because it's effectively a baby with a bath water, so to speak, from a savings perspective that you've seen. But going forward, feel very, very confident, very comfortable that our investment teams know how to differentiate that has and have not and that the market going forward will see even more differentiation between those 2 groups and create real alpha. So my view is that the client demand will be there. Then it goes to the second point, which is can we deliver from a distribution perspective, these products to those clients. Well, some of our products, certainly the ones in the U.S., were actually closed for a while. They're at their limit from a capacity perspective. Well, they are not at those limits anymore. We have opportunity to deliver them, and we have a distribution force as to some of the earlier questions in U.S. intermediary and EMEA intermediary, APAC intermediary that are very, I guess, thoughtfully targeting which clients to bring this to and can deliver those to our clients that want them. So it's both of those prongs, and it's a very good question and hopefully give you a little bit of color how we think about things.

And then just maybe as a follow-up, just, I mean, obviously, the fulcrum fees to get raised before, but obviously, there are 2 funds there that are causing the main negative. Is there any sort of hope that alpha will start to be delivered in those funds and reduce the negative? Or is that just a matter of wait and see?

Well, your guess is a little bit as good as ours, right? We certainly will try to consider to improve our performance. That's what we're focused on. You can't win every day, every time every portfolio. But certainly, over time, we'd like to improve the performance there. And that should back from a future perspective. But to be clear, that's nothing that we model or put into our expectations.

That concludes our Q&A session for today. So I'll hand you over to Ali Dibadj for closing remarks.

Well, thanks, Emily. Thanks, everybody, for joining the call today and for your interest in Janus Henderson. I hope you get the feeling that we believe we have a great foundation to work from. We're making thoughtful changes to reposition the firm to deliver better for our clients and their clients, for our employees, our shareholders, other stakeholders and this will take time, but we are on track. Thank you for joining.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.