10q10k10q10k.net

What changed in JANUS HENDERSON GROUP PLC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of JANUS HENDERSON GROUP PLC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+332 added−323 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in JANUS HENDERSON GROUP PLC's 2023 10-K

332 paragraphs added · 323 removed · 254 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+12 added−10 removed62 unchanged
Biggest changeDiversity, equity and inclusion (“DEI”) are about valuing our differences and continually identifying ways to improve our cultural intelligence, which ultimately leads to better decision-making and a more tailored client experience. ​ Our recent accomplishments include: ​ ● Created a diverse workforce where: o 38% of employees globally are women. o 24% of employees globally are ethnically diverse. ● Increased the number of employees that identify as having a disability from 5% to 7%. ● Increased ethnically diverse employees from 22% to 24% and increased ethnically diverse employees in senior management from 11% to 17%. ● Enhanced our U.S. maternity leave policy and short-term disability maternity coverage, and added a global medical reimbursement to support the diverse needs of our employees such as surrogacy and gender affirmation care. ● Created a DEI strategy for all departments that links to their overall people strategy. ● Launched Global Diversity Awareness Month to connect, educate and engage our employees on ways to create a more inclusive workplace. ● Achieved a DEI Employee Engagement score of 85%, which is 2% higher than the 75th percentile New Measures industry benchmark. ● Recognized by Bloomberg Gender Equality and Human Rights Campaign Index for our transparent and inclusive practices. ● Moved to a Disability Confident Level II employer. ● Improved our gender pay gap over the past several years.
Biggest changeDEI efforts are about valuing our differences and continually identifying ways to improve our cultural intelligence, which ultimately leads to better decision-making and a more tailored client experience. ​ Our recent accomplishments include the following: ​ ● Continued to foster a diverse workforce where: o 38% of employees globally are women and o 22% of employees globally are ethnically diverse; ● Increased the number of employees that identify as having a disability from 7% to 8%; ● Enhanced our global parental leave policy and leave pay; ● Streamlined our job descriptions to remove unintended barriers and created them for the skill sets needed for tomorrow; ● Facilitated over 35 sessions focused on topics such as neurodiversity, allyship, sign language, single parenting, belonging and mental health support for employees in the workplace; ● Achieved a DEI Employee Engagement score of 85%, which is aligned with the 75th percentile New Measures industry benchmark; ● Recognized by Bloomberg Gender Equality, LGBT Great and Human Rights Campaign Foundation Index for our transparent and inclusive practices and received 100% on the Human Rights Campaign Foundation Index; ● Implemented interview training for hiring managers and reinforced our commitment to having diverse interview panels and candidates for open roles; and ● Globally, our base pay gender pay gap has continued to improve year-over-year but our mean bonus gap slightly increased due to outperformance in a specific portion of our investor base with low female representation.
Client Type and Distribution Channel We have a diverse group of intermediary, institutional and self-directed clients around the globe. While we seek to leverage our global model where possible, we also recognize the importance of tailoring our services to the needs of clients in different regions.
Client Type and Distribution Channel We have a diverse group of intermediary, self-directed and institutional clients around the globe. While we seek to leverage our global model where possible, we also recognize the importance of tailoring our services to the needs of clients in different regions.
Further, failure to comply with such laws and regulations may provide the basis for civil litigation that may also result in significant costs and reputational harm to us. U.S. Regulation Certain of our U.S. subsidiaries are subject to laws and regulations from a number of government agencies and self-regulatory bodies, including the U.S. Securities and Exchange Commission (“SEC”), the U.S.
Further, failure to comply with such laws and regulations may provide the basis for civil litigation that may also result in significant costs and reputational harm to us. U.S. Regulation Certain of our U.S. subsidiaries are subject to laws and regulations from a number of government agencies and self-regulatory bodies, including the U.S. Securities and Exchange Commission (“SEC”), U.S.
Possible consequences for failure to comply include voiding of investment advisory and subadvisory agreements, the suspension of individual employees (particularly investment management and sales personnel), limitations on engaging in certain lines of business for specified periods of time, revocation of registrations, disgorgement of profits, and imposition of censures and fines.
Possible consequences for failure to comply include voiding of investment advisory and subadvisory agreements, suspension of individual employees (particularly investment management and sales personnel), limitations on engaging in certain lines of business for specified periods of time, revocation of registrations, disgorgement of profits, and imposition of censures and fines.
Jersey Janus Henderson Investors (“Jersey”) Limited is registered under Article 9 of the Financial Services (Jersey) Law 1998, as amended (“Law”) in respect of Fund Services Business. The company was established to operate a fund management business in Jersey, providing portfolio management services to funds and segregated mandates.
Jersey Janus Henderson Investors (Jersey) Limited is registered under Article 9 of the Financial Services (Jersey) Law 1998, as amended (“Law”) in respect of Fund Services Business. The company was established to operate a fund management business in Jersey, providing portfolio management services to funds and segregated mandates.
We support our employees’ financial goals and retirement saving by making contributions toward their retirement and pension schemes and offering an employee stock purchase plan. ​ Turnover We monitor and analyze turnover, including voluntary, involuntary and reduction in force (“RIF”)/layoffs. Our voluntary turnover rates are relatively low and consistent with a certain benchmark for our industry.
We support our employees’ financial goals and retirement saving by making contributions toward their retirement and pension schemes and offering an employee stock purchase plan. ​ Turnover We monitor and analyze turnover, including voluntary, involuntary and reduction in force (“RIF”)/layoffs. Our voluntary turnover rates are consistent with a certain benchmark for our industry.
Several of our subsidiaries also act as product issuers for ETFs that are Quoted Managed Funds on the Cboe exchange (“Cboe”) and the AQUA market of the Australian Securities Exchange (“ASX”). Therefore, our subsidiaries must comply with the Cboe operating rules and procedures as well as the ASX Operating Rules and the ASX Operating Rules Procedures.
Multiple subsidiaries also act as product issuers for ETFs that are Quoted Managed Funds on the Cboe exchange (“Cboe”) and the AQUA market of the Australian Securities Exchange (“ASX”). Therefore, our subsidiaries must comply with the Cboe operating rules and procedures as well as the ASX Operating Rules and the ASX Operating Rules Procedures.
For this reason, we maintain a local presence in most of the markets in which we operate and provide investment material that takes into account local customs, preferences and language needs. We have a global distribution team of nearly 550 staff members.
For this reason, we maintain a local presence in most of the markets in which we operate and provide investment material that takes into account local customs, preferences and language needs. We have a global distribution team of nearly 900 staff members.
Our recruitment team strives to source a diverse candidate pool for every open position with the goal of creating a workforce that reflects the communities in which we operate. ​ Professional Development ​ We are committed to helping people realize their highest potential and fostering a culture that prioritizes and supports personal and professional development for individuals, leaders and teams across the organization.
Our Talent Acquisition team strives to source a diverse candidate pool for every open position with the goal of creating a workforce that reflects the communities in which we operate. ​ Professional Development ​ We are committed to helping people realize their highest potential and fostering a culture that prioritizes and supports personal and professional development for individuals, leaders and teams across the organization.
Employees own their individual development, and we are invested in a wide variety of programs to support their ambitions. Ongoing 7 Table of Contents development opportunities include business acumen (our industry and products), understanding our clients, leadership development, mentoring schemes, global collaboration and culture, career development, interpersonal communication, presentation skills and technology training.
Employees own their individual development, and we are invested in a wide variety of programs to support their ambitions. Ongoing development opportunities include business acumen (our industry and products), understanding our clients, leadership development, mentoring schemes, global collaboration and culture, career development, interpersonal communication, presentation skills and technology training.
Charters for the Audit Committee, Compensation Committee, Risk Committee, and Nominating and Corporate Governance Committee of our Board of Directors, as well as our Corporate Governance Guidelines, Code of Business Conduct, and Code of Ethics for Senior Financial Officers (our “Senior Officer Code”) are posted on the Investor Relations website (ir.janushenderson.com) and are available in print at no charge upon request by any shareholder.
Charters for the Audit Committee, Human Capital and Compensation Committee, Governance and Nominations Committee, and Risk Committee of our Board of Directors, as well as our Corporate Governance Guidelines, Code of Business Conduct and Code of Ethics for Senior Financial Officers (our “Senior Officer Code”) are posted on the Investor Relations website (ir.janushenderson.com) and are available in print at no charge upon request by any shareholder.
Our principal business address is 201 Bishopsgate, London, EC2M 3AE, United Kingdom, and our telephone number is +44 (0) 20 7818 1818. 14 Table of Contents ​
Our principal business address is 201 Bishopsgate, London, EC2M 3AE, United Kingdom, and our telephone number is +44 (0) 20 7818 1818. 11 Table of Contents
Certain investment products are also subject to performance fees, which vary based on when performance hurdles or other specified criteria are achieved. The 3 Table of Contents level of assets subject to such fees can positively or negatively affect our revenue.
Certain investment products are also subject to performance fees, which vary based on when performance hurdles or other specified criteria are achieved. The level of assets subject to such fees can positively or negatively affect our revenue.
Discussions between the EU and UK regarding equivalence of the EU and UK regulatory frameworks are ongoing. The way in which UK firms provide services in EEA member states may change depending on 12 Table of Contents the outcome of these discussions.
Discussions between the EU and UK regarding equivalence of the EU and UK regulatory frameworks are ongoing. The way in which UK firms provide services in EEA member states may change depending on the outcome of these discussions.
In addition, the adviser or subadviser to a registered investment company generally has obligations with 10 Table of Contents respect to the qualification of the registered investment company under the Internal Revenue Code of 1986, as amended (“Code”).
In addition, the adviser or subadviser to a registered investment company generally has obligations with respect to the qualification of the registered investment company under the Internal Revenue Code of 1986, as amended (“Code”).
In 2022, approximately 85% of our employees responded to our annual employee opinion survey. Results are shared with our Board of Directors and are cascaded from senior leaders to all employees. Managers and employees develop action plans to address topics of concern and continually improve our workplace.
In 2023, approximately 88% of our employees responded to our annual employee opinion survey. Results are shared with our Board of Directors and are cascaded from senior leaders to all employees. Managers and employees develop action plans to address topics of concern and continually improve our workplace.
ITEM 1. BUSINESS Overview Janus Henderson Group plc (“JHG,” the “Company,” “we,” “us,” “our” and similar terms), a company incorporated and registered in Jersey, Channel Islands, is an independent global asset manager, specializing in active investment across all major asset classes. The predecessor companies to JHG trace back to 1934 when Henderson Group plc (“Henderson”) was founded.
ITEM 1. BUSINESS Overview Janus Henderson Group plc (“JHG,” the “Company,” “we,” “us,” “our” and similar terms), a company incorporated and registered in Jersey, Channel Islands, is an independent global asset manager, specializing in investment management across all major asset classes. Through its predecessor companies, JHG traces its linage back to 1934 when Henderson Group plc (“Henderson”) was founded.
These regulatory agencies have broad supervisory and disciplinary powers, including, among others, the power to temporarily or permanently revoke the authorization to conduct regulated business, suspend registered employees, and censure and fine both regulated businesses and their registered employees. ​ Other Our operations in Ireland are regulated by the Central Bank of Ireland.
This regulatory agency has broad supervisory and disciplinary powers, including, among others, the power to temporarily or permanently revoke the authorization to conduct regulated business, suspend registered employees, and censure and fine both regulated businesses and their registered employees. ​ Other Our operations in Ireland are regulated by the Central Bank of Ireland.
Commodity Futures Trading Commission Certain of our subsidiaries are registered with the U.S. Commodity Futures Trading Commission (“CFTC “) as commodity pool operators (“CPOs”) and/or commodity trading advisers (“CTAs”), and certain of our subsidiaries have become members of the NFA in connection with the operation of certain of our products.
Commodity Futures Trading Commission Certain of our subsidiaries are registered with the CFTC as commodity pool operators (“CPOs”) and/or commodity trading advisers (“CTAs”), and certain of our subsidiaries have become members of the NFA in connection with the operation of certain of our products.
We are committed to: ​ ● Attracting great people into roles with a sense of purpose; ● Helping them realize their highest potential and make a real impact; and ● Supporting their ambitions throughout their career. Headcount As of December 31, 2022 and 2021, we had 2,181 and 2,235 full-time equivalent employees, respectively.
We are committed to: ​ ● Attracting great people into roles with a sense of purpose; ● Helping them realize their highest potential and make a real impact; and ● Supporting their ambitions throughout their career. Headcount As of December 31, 2023 and 2022, we had 2,196 and 2,181 employees, respectively.
Performance fees are specified in certain fund and client contracts and are based on investment performance either on an absolute basis or compared to an established index over a specified period of time. These fees are often subject to a hurdle rate.
Performance fees are specified in certain fund and client contracts and are based on investment performance either on an absolute basis or compared to an established index over a specified period of time. These fees are often subject to a high-water mark (“HWM”).
If we were designated a SIFI, we would be subject to enhanced prudential measures, which could include capital and liquidity requirements, leverage limits, enhanced public disclosures and risk management requirements, annual stress testing by the Federal Reserve, credit exposure and concentration limits, and supervisory and other requirements.
If we were designated a SIFI, we would be subject to enhanced prudential measures, which could include capital and liquidity requirements, leverage limits, enhanced public disclosures and risk management requirements, annual stress testing by the Federal Reserve, credit exposure and concentration limits, and supervisory and other requirements. These heightened regulatory requirements could adversely affect our business and operations.
At December 31, 2022, AUM in our self-directed channel totaled $64.3 billion, or 22% of total AUM. Institutional Channel The institutional channel serves corporations, endowments, pension funds, foundations, Taft-Hartley funds, public fund clients and sovereign entities, with distribution direct to the plan sponsor and through consultants.
Institutional Channel The institutional channel serves corporations, endowments, pension funds, foundations, Taft-Hartley funds, public fund clients and sovereign entities, with distribution direct to the plan sponsor and through consultants. At December 31, 2023, AUM in our institutional channel totaled $75.4 billion, or 22% of total AUM.
Each of our three strategic pillars is further detailed below. ● Protect and grow our core business : We have identified existing opportunities in our core business where we believe we can increase market share, including regional intermediary distribution and good-performing smaller strategies. ● Amplify strengths not fully leveraged : Our research, portfolio management and client service strengths can be amplified with adjacent products, channels, geographies and vehicles (e.g., Institutional and Diversified Alternatives). ● Diversify where clients give us the right to win : We have investment capabilities in areas where our clients are seeking more solutions from us and new investment capabilities that can open new client types (e.g., private credit and insurance).
Each of our three strategic pillars is further detailed below. ● Protect and grow our core business : We have identified existing opportunities in our core business where we believe we can increase market share, including regional intermediary distribution and good-performing smaller strategies. ● Amplify strengths not fully leveraged : Our research, portfolio management and client service strengths can be amplified with adjacent products, channels, geographies and vehicles (e.g., Institutional and Diversified Alternatives). ● Diversify where clients give us the right to win : We are seeking to expand our investment capabilities in areas where our clients are seeking more solutions from us and new investment capabilities that can open new client types (e.g., private credit and insurance). 3 Table of Contents Financial Highlights We present our financial results in accordance with accounting principles generally accepted in the United States of America (“U.S.
Department of Labor (“DOL”), the Financial Industry Regulatory Authority (“FINRA”), the U.S. Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”).
Department of Justice, U.S. Department of Labor (“DOL”), Financial Industry Regulatory Authority (“FINRA”), Internal Revenue Service, U.S. Commodity Futures Trading Commission (“CFTC”) and National Futures Association (“NFA”).
We continue to see enhanced legislative and regulatory interest in the regulation of financial services in the U.S. through existing and proposed rules and regulations, regulatory priorities and general discussions around expanded reporting requirements, and transfer agent regulations.
We continue to see enhanced legislative and regulatory interest in the regulation of financial services and investment products in the U.S. through existing and proposed rules and regulations, regulatory priorities and pronouncements, enforcement actions and general discussions around expanded and updated requirements.
Compliance with the AIFMD’s requirements may restrict AIF marketing and imposes compliance obligations in the form of remuneration policies; capital requirements; reporting requirements; leverage oversight; valuation; reporting stakes in EU companies; the domicile, duties and liability of custodians; and liquidity management. The UK has adopted the AIFMD rules principally via secondary legislation FCA rules.
Compliance with the AIFMD’s requirements may restrict AIF marketing and imposes compliance obligations in the form of remuneration policies; capital requirements; reporting requirements; leverage oversight; valuation; reporting stakes in EU companies; the domicile, duties and liability of custodians; and liquidity management.
As of December 31, 2022, Asia Pacific AUM was $33.0 billion, and the region employed 46 and 67 investment and distribution professionals, respectively. Human Capital With nearly 2,200 employees worldwide, we are proud of our global presence and diversity.
As of December 31, 2023, Asia Pacific AUM was $33.4 billion, and the region employed 43 and 68 investment and distribution professionals, respectively. 5 Table of Contents Human Capital With nearly 2,200 employees worldwide, we are proud of our global presence and diversity.
For example, the SEC proposed or adopted a number of new rules in the preceding two years, covering a wide range of topics, including derivatives usage; liquidity management; marketing; swing pricing; outsourcing of covered functions; cybersecurity; shareholder and regulatory reporting; fund names; and environmental, social and governance (“ESG”) disclosures.
For example, the SEC has recently proposed and/or adopted a number of new rules covering a wide range of topics, including derivatives usage; liquidity management; marketing; swing pricing; safeguarding of client assets; outsourcing of covered functions; cybersecurity; predictive analytics; private fund disclosures and restrictions; shareholder and regulatory reporting; fund names; and environmental, social and governance (“ESG”) disclosures.
Employee Compensation and Benefits Our compensation framework is designed to reward performance and reinforce the alignment of interests between our employees, our clients and our shareholders. We regularly review industry benchmark data and maintain competitive 8 Table of Contents compensation levels to ensure we are able to attract and retain top talent.
Employee Compensation and Benefits Our compensation framework is designed to reward performance and reinforce the alignment of interests among our employees, clients and shareholders. We regularly review industry benchmark data and maintain competitive compensation levels to ensure we are able to attract and retain top talent. Variable incentive compensation for most of our employees is funded based on JHG profits.
UCITS are investment funds regulated at the EU level under the UCITS Directive V (“UCITS V”). UCITS are capable of being freely marketed throughout the EU on the basis of a single authorization in a member state — so-called passporting.
The UK has adopted the AIFMD rules principally via secondary legislation FCA rules. 9 Table of Contents UCITS are investment funds regulated at the EU level under the UCITS Directive V (“UCITS V”). UCITS are capable of being freely marketed throughout the EU on the basis of a single authorization in a member state — so-called passporting.
Contractors and other temporary employees are excluded in the tables below. ​ 2022 Headcount Permanent Fixed-Term Worker Trainee Apprentice Total EMEA 965 32 6 15 1,018 North America 979 - - 2 981 Asia Pacific 168 13 1 - 182 Total 2,112 45 7 17 2,181 ​ 2021 Headcount Permanent Fixed-Term Worker Trainee Apprentice Total EMEA 917 45 10 11 983 North America 1,060 - - 1 1,061 Asia Pacific 185 4 2 - 191 Total 2,162 49 12 12 2,235 ​ Recruiting We build our workforce from within our existing talent pool whenever possible.
Contractors and other temporary employees are excluded in the tables below. 2023 Headcount Permanent Fixed-Term Worker Trainee Apprentice Total EMEA 980 31 11 11 1,033 North America 977 — — 1 978 Asia Pacific 174 9 2 — 185 Total 2,131 40 13 12 2,196 ​ 2022 Headcount Permanent Fixed-Term Worker Trainee Apprentice Total EMEA 965 32 6 15 1,018 North America 979 — — 2 981 Asia Pacific 168 13 1 — 182 Total 2,112 45 7 17 2,181 ​ Talent Acquisition We build our workforce from within our existing talent pool whenever possible.
As of December 31, 2022, AUM in our fixed income capability totaled $59.8 billion, or 21% of total AUM. Multi-Asset Our Multi-Asset capability includes teams in the U.S. and UK that focus on balanced, multi-asset income and strategic asset allocation, as well as multiple adaptive asset allocation strategies.
Multi-Asset Our Multi-Asset capability includes teams in the U.S. and UK that focus on balanced, multi-asset income and strategic asset allocation, as well as multiple adaptive asset allocation strategies. As of December 31, 2023, AUM in our Multi-Asset capability totaled $48.9 billion, or 15% of total AUM. Alternatives Our Alternatives capability includes teams with various areas of focus and approach.
(“JCG”), now known as Janus Henderson US (Holdings) Inc., and its consolidated subsidiaries became subsidiaries of JHG. We are a client-focused global business with approximately 2,200 employees worldwide and assets under management (“AUM”) of $287.3 billion as of December 31, 2022. We have operations in North America, the United Kingdom (“UK”), continental Europe, Latin America, Japan, Asia and Australia.
We are a client-focused global business with approximately 2,200 employees worldwide and assets under management (“AUM”) of $334.9 billion as of December 31, 2023. We have operations in North America, the United Kingdom (“UK”), continental Europe, Latin America, Japan, Asia and Australia.
Impacted employees received a severance package based on tenure, including outplacement services. ​ Intellectual Property We have used, registered and/or applied to register certain trademarks, service marks and trade names to distinguish our sponsored investment products and services from those of our competitors in the jurisdictions in which we operate, including the U.S., the UK, the European Union (“EU”), Australia, China, Japan and Singapore.
These provide us with the ability to effectively manage turnover and to retain and develop our most highly skilled employees. ​ Intellectual Property We have used, registered and/or applied to register certain trademarks, service marks and trade names to distinguish our sponsored investment products and services from those of our competitors in the jurisdictions in which we operate, including the U.S., the UK, the European Union (“EU”), Australia, China, Japan and Singapore.
We have made significant investments to grow our presence in the financial advisor subchannel, including enhancing our technology platform and recruiting highly seasoned leaders and client relationship managers. At December 31, 2022, AUM in our intermediary channel totaled $162.0 billion, or 57% of total AUM.
We have made significant investments to grow our presence in the financial advisor subchannel, including enhancing our technology platform and recruiting highly seasoned leaders and client relationship managers.
Our employees are committed to achieving our purpose, and their values and actions align to JHG’s values: Clients come first, always; Execution supersedes intention; Together we win; Diversity improves results; Truth builds trust. We recognize that the success of JHG is dependent on the unique talents and contributions of our diverse workforce, and we are invested in our employees’ success.
Our employees are committed to achieving our purpose, and their values and actions align to JHG’s values: Clients come first, always; Execution supersedes intention; Together we win; Diversity improves results; and Truth builds trust.
See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for additional information on non-GAAP adjusted measures, including a reconciliation to the comparable GAAP measure. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2022 2021 2020 GAAP basis (in millions): ​ ​ ​ ​ Revenue ​ $ 2,203.6 ​ $ 2,767.0 ​ $ 2,298.6 Operating expenses ​ $ 1,713.8 ​ $ 1,946.1 ​ $ 2,170.3 Operating income ​ $ 489.8 ​ $ 820.9 ​ $ 128.3 Operating margin ​ ​ 22.2% ​ ​ 29.7% ​ ​ 5.6% Net income attributable to JHG ​ $ 372.4 ​ $ 620.0 ​ $ 130.3 Diluted earnings per share ​ $ 2.23 ​ $ 3.57 ​ $ 0.70 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted basis (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ $ 1,705.3 ​ $ 2,212.9 ​ $ 1,837.5 Operating expenses ​ $ 1,128.6 ​ $ 1,251.9 ​ $ 1,137.5 Operating income ​ $ 576.7 ​ $ 961.0 ​ $ 700.0 Operating margin ​ ​ 33.8% ​ ​ 43.4% ​ ​ 38.1% Net income attributable to JHG ​ $ 433.8 ​ $ 739.5 ​ $ 542.4 Diluted earnings per share ​ $ 2.60 ​ $ 4.26 ​ $ 3.01 ​ 4 Table of Contents Assets Under Management Our AUM by client type, capability and client location as of December 31, 2022, is presented below (in billions).
Year ended December 31, 2023 2022 2021 GAAP basis (in millions): Revenue $ 2,101.8 $ 2,203.6 $ 2,767.0 Operating expenses $ 1,618.1 $ 1,713.8 $ 1,946.1 Operating income $ 483.7 $ 489.8 $ 820.9 Operating margin 23.0 % 22.2 % 29.7 % Net income attributable to JHG $ 392.0 $ 372.4 $ 620.0 Diluted earnings per share $ 2.37 $ 2.23 $ 3.57 Adjusted basis (in millions): Revenue $ 1,645.9 $ 1,705.3 $ 2,212.9 Operating expenses $ 1,137.2 $ 1,128.6 $ 1,251.9 Operating income $ 508.7 $ 576.7 $ 961.0 Operating margin 30.9 % 33.8 % 43.4 % Net income attributable to JHG $ 435.2 $ 433.8 $ 739.5 Diluted earnings per share $ 2.63 $ 2.60 $ 4.26 Assets Under Management Our AUM by client type, capability and client location as of December 31, 2023, is presented below (in billions).
It also includes pre- and post-trade transparency requirements for equity markets and extensive transaction reporting requirements. ​ The EU’s Alternative Investment Fund Managers Directive (“AIFMD”) was transposed into EU member state law by July 2013 with a transitional period until July 2014.
MiFID II establishes detailed requirements for the governance, organization and conduct of business of investment firms and regulated markets. It also includes pre- and post-trade transparency requirements for equity markets and extensive transaction reporting requirements. ​ The EU’s Alternative Investment Fund Managers Directive (“AIFMD”) was transposed into EU member state law.
EMEA and Latin America Our EMEA (“Europe, the Middle East and Africa”) and Latin America region serves clients throughout the UK and Continental Europe, and provides an evolving business in Latin America and the Middle East. The region includes a strong retail and institutional client base in the UK and strong relationships with global distributors in Continental Europe.
EMEA and Latin America Our EMEA (“Europe, the Middle East and Africa”) and Latin America region serves clients throughout the UK and Continental Europe and supports our evolving business in Latin America and the Middle East.
In addition, the marketplace for investment products is rapidly changing, investors are becoming more sophisticated, the demand for and access to investment advice and information are becoming more widespread, passive investment 9 Table of Contents strategies are becoming more prevalent, and more investors are demanding investment vehicles that are customized to their individual requirements.
In addition, the marketplace for investment products is rapidly changing, investors are becoming more sophisticated, the demand for and access to investment advice and information are becoming more widespread, passive investment strategies are becoming more prevalent, and more investors are demanding investment vehicles that are customized to their individual requirements. 7 Table of Contents We believe our ability to successfully compete in the investment management industry depends upon our ability to achieve consistently strong investment performance, provide exceptional client service, and develop and innovate products that will best serve our clients.
The ongoing health and well-being of our employees is important to us, and the inclusive benefits we provide enable employees and their families to achieve healthy, balanced and happy lifestyles.
While individual awards are fully discretionary, performance assessments take into account financial and strategic (non-financial) factors, including company, department, team and individual performance. The ongoing health and well-being of our employees is important to us, and the inclusive benefits we provide enable employees and their families to achieve healthy, balanced and happy lifestyles.
The equity teams include those with a global perspective, those with a regional focus (including the U.S., Europe and Asia) and those invested in specialist sectors. A range of growth, value and absolute return styles are employed. These teams generally apply processes based on fundamental research and bottom-up stock picking.
Investment Capabilities Equities We offer a wide range of equity strategies encompassing different geographic focuses and investment styles. The Equities teams include those with a global perspective, those with a regional focus (including the U.S., Europe and Asia) and those invested in specialist sectors. A range of growth, value and absolute return styles are employed.
We search for candidates through a number of different channels to ensure we access a diverse slate of candidates, including working with recruitment consultants and search firms whose values and methods of recruitment align with our goals of finding the best diverse talent in the market.
For a few roles, we will engage the support of external recruitment consultants or search firms, whose values and methods of recruitment align with our goals of finding the best talent in the market.
As of December 31, 2022, AUM in our multi-asset capability totaled $45.5 billion, or 16% of total AUM. Alternatives Our Alternatives capability includes teams with various areas of focus and approach. Alternatives brings together a cross-asset class combination of alpha generation, risk management and efficient beta replication strategies.
Alternatives brings together a cross-asset class combination of alpha generation, risk management and efficient beta replication strategies. These include Global Multi-Strategy, Managed Futures, Risk Premia and Global Commodities, and Long/Short Equity. As of December 31, 2023, AUM in our Alternatives capability totaled $9.4 billion, or 3% of total AUM.
Employee Retirement Income Security Act Certain of our subsidiaries are also subject to the Employee Retirement Income Security Act (“ERISA”) and related regulations to the extent they are considered “fiduciaries” under ERISA with respect to some of their investment advisory clients.
This does not preclude the states from imposing registration requirements on broker-dealers that operate within their jurisdiction or from sanctioning broker-dealers and their employees for engaging in misconduct. 8 Table of Contents Employee Retirement Income Security Act Certain of our subsidiaries are also subject to the Employee Retirement Income Security Act (“ERISA”) and related regulations to the extent they are considered fiduciaries under ERISA with respect to some of their investment advisory clients.
The federal securities laws prohibit states from imposing substantive requirements on broker-dealers that exceed those under federal law. This does not preclude the states from imposing registration requirements on broker-dealers that operate within their jurisdiction or from sanctioning broker-dealers and their employees for engaging in misconduct.
The federal securities laws prohibit states from imposing substantive requirements on broker-dealers that exceed those under federal law.
We develop talent profiles and succession plans to ensure we are cultivating the next generation of leaders to contribute to our long-term business success. These provide us with the ability to effectively manage turnover and to retain and develop our most highly skilled employees. ​ Difficult market conditions impacted us and the entire industry during 2022.
We develop talent profiles and succession plans to ensure we are cultivating the next generation of leaders to contribute to our long-term business success.
The North America distribution network serves a diverse set of clients across financial intermediaries, institutions and self-directed channels. As of December 31, 2022, total North America AUM was $168.6 billion, and we employed 149 and 239 investment and distribution professionals, respectively, across this region.
As of December 31, 2023, total North America AUM was $198.6 billion, and we employed 143 and 244 investment and distribution professionals, respectively, across this region.
We also continue to see continued enforcement of, and changes in enforcement practices around, existing laws, rules and regulations, including new applications of the compliance program rule. We continually review and analyze the potential impact of these developments on our clients, prospective clients and distribution channels.
We also continue to see continued enforcement of, and changes in enforcement practices around, existing laws, rules and regulations, including new applications of the compliance program rule to address current regulatory gaps (e.g., maintenance of electronic records and “off-channel” communications).
In addition to the 2022 employee opinion survey, we: ​ ● Continued to engage employees in the implementation and continuous improvement of our hybrid working model based on how we can best support their mental health and overall well-being; and ● Continued to dedicate time and resources to employee career progression by hosting a career day where employees participated in live learning events and discussions; and launching several visible and impactful leadership and development programs across the firm globally, including the Leadership Excellence and Development program (“LEAD”), which invests in and rewards high-potential employees. ​ Diversity, Equity and Inclusion ​ We are committed to creating an inclusive environment that promotes equality, cultural awareness and respect by implementing policies, benefits, training, recruiting, and recognition practices to support our employees.
In addition to the 2023 employee opinion survey, we: ​ ● Placed significant focus on the adoption and embedding of our rearticulated mission, values and purpose to encourage a sense of belonging and common objective across our employee base; ● Continued to dedicate time and resources to employee career progression by hosting a career week where employees participated in live learning events and discussions; invested in our high potential talent through the Leadership Excellence and Development program (“LEAD”); and relaunched our early careers initiatives across the globe; and ● Maintained focus on our diversity, equity and inclusion (“DEI”) initiatives, as well as supporting our many Employee Resource Groups to achieve their aims. ​ 6 Table of Contents Diversity, Equity and Inclusion ​ We are committed to creating an inclusive environment that promotes equality, cultural awareness and respect by implementing policies, benefits, training, recruiting and recognition practices to support our employees.
Hong Kong In Hong Kong, our subsidiary, Janus Henderson Investors Hong Kong Limited, is subject to the Securities and Futures Ordinance (“SFO”) and related legislation, which govern the securities and futures markets and regulate the offerings of investments to the public.
Another key regulator is the Australian Transaction Reports and Analysis Centre (“AUSTRAC”), which applies a number of reporting and other obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2006 (“AML/CFT Act”). 10 Table of Contents Hong Kong In Hong Kong, our subsidiary, Janus Henderson Investors Hong Kong Limited, is subject to the Securities and Futures Ordinance (“SFO”) and related legislation, which govern the securities and futures markets and regulate the offerings of investments to the public.
These heightened regulatory requirements could adversely affect our business and operations. 11 Table of Contents International Regulation UK The Financial Conduct Authority (“FCA”) regulates certain of our subsidiaries, as well as products and services we offer and manage in the UK.
The failure to comply with applicable state laws and regulations may result in fines, heightened regulatory scrutiny, litigation and/or reputational harm. International Regulation UK The Financial Conduct Authority (“FCA”) regulates certain of our subsidiaries, as well as products and services we offer and manage in the UK.
As of December 31, 2022, AUM in our equities capability totaled $171.3 billion, or 59% of total AUM. Fixed Income Our Fixed Income teams provide coverage across the asset class, applying a wide range of innovative and differentiated techniques in support of a variety of investment objectives and risk criteria.
Fixed Income Our Fixed Income teams provide coverage across the asset class, applying a wide range of innovative and differentiated techniques in support of a variety of investment objectives and risk criteria. Our fixed income offering includes teams that apply global unconstrained approaches as well as teams with more focused mandates — based in the U.S., Europe, Asia and Australia.
If we are unable to identify the right candidate for an open position from within, we look externally for the best talent.
If we are unable to identify the right candidate for an open position from within, we look externally for the best talent. We search for candidates through a variety of different channels to ensure we access a diverse slate of candidates. Where possible, our internal talent acquisition team will source for this talent directly.
Our fixed income offering includes teams that apply global unconstrained approaches as well as teams with more focused mandates — based in the U.S., Europe, Asia and Australia. The capabilities of these teams are available through individual strategies and, where appropriate, combined to create multi-strategy offerings.
The capabilities of these teams are available through individual strategies and, where appropriate, combined to create multi-strategy offerings. As of December 31, 2023, AUM in our Fixed Income capability totaled $71.5 billion, or 21% of total AUM.
Financial Highlights We present our financial results in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”); however, JHG management evaluates the profitability of the Company and its ongoing operations using additional non-GAAP financial measures that are consistent with internal management reporting.
GAAP”); however, JHG management evaluates the profitability of the Company and its ongoing operations using non-GAAP financial measures that are consistent with internal management reporting. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for additional information on non-GAAP adjusted measures, including a reconciliation to the comparable GAAP measure.
The organic build-out of our Latin America business is gaining momentum. As of December 31, 2022, total EMEA and Latin America AUM was $85.7 billion, and the region employed 150 and 241 investment and distribution professionals, respectively. Asia Pacific Our Asia Pacific region serves clients throughout Australia, Japan and other regions of Asia.
The region includes a strong retail and institutional client base in the UK; strong relationships with global distributors in Continental Europe; and an organic build-out of our Latin America business, which is gaining momentum. As of December 31, 2023, total EMEA and Latin America AUM was $102.9 billion, and the region employed 155 and 230 investment and distribution professionals, respectively.
Our strategic co-operation agreement with Dai-ichi Life supports the growth of our Japanese business. Australian distribution offers a suite of 6 Table of Contents global and domestic capabilities. The wider Asian business continues to evolve with growing brand presence.
Asia Pacific Our Asia Pacific region serves clients throughout Australia, Japan and other regions of Asia. Australian distribution offers a suite of global and domestic capabilities. Our broader business in the Asia Pacific region continues to evolve with growing brand presence.
Self-Directed Channel The self-directed channel serves individual investors who invest in our products through a mutual fund supermarket or directly with us. Certain shares of our U.S. mutual funds are also available through the self-directed channel, which enables new investors to participate in the benefits of investing directly with us.
At December 31, 2023, AUM in our intermediary channel totaled $183.4 billion, or 55% of total AUM. 4 Table of Contents Self-Directed Channel The self-directed channel serves individual investors who invest in our products through a mutual fund supermarket or directly with us. At December 31, 2023, AUM in our self-directed channel totaled $76.1 billion, or 23% of total AUM.
Removed
Our subsequent growth since the founding of Henderson was achieved organically and from the acquisition of other asset management companies. In May 2017, JHG (previously Henderson) completed a merger of equals with Janus Capital Group Inc. (“Merger”). As a result of the Merger, Janus Capital Group Inc.
Added
Our mission is to help clients define and achieve superior financial outcomes through differentiated insights, disciplined investments and world-class service.
Removed
We focus on active fund management by investment managers with unique individual perspectives, who are free to implement their own investment views, within a strong risk management framework. We manage a broad range of actively managed investment products for institutional and retail investors across four capabilities: Equities, Fixed Income, Multi-Asset, and Alternatives.
Added
We are mindful that our thinking and investments help shape the futures of millions of people as we fulfill our purpose of “Investing in a brighter future together.” We manage a broad range of investment products for institutional and retail investors across four capabilities: Equities, Fixed Income, Multi-Asset and Alternatives.
Removed
At December 31, 2022, AUM in our institutional channel totaled $61.0 billion, or 21% of total AUM. 5 Table of Contents Investment Capabilities Equities We offer a wide range of equity strategies encompassing different geographic focuses and investment styles.
Added
These teams generally apply processes based on fundamental research and bottom-up stock picking. As of December 31, 2023, AUM in our Equities capability totaled $205.1 billion, or 61% of total AUM.
Removed
These include Global Multi-Strategy, Managed Futures, Risk Premia and Global Commodities; Agriculture; and Long/Short Equity. As of December 31, 2022, AUM in our alternatives capability totaled $10.7 billion, or 4% of total AUM. Client Locations North America Our North America region serves clients throughout North America and represents our largest geographical concentration of AUM.
Added
Client Locations North America Our North America region serves clients throughout North America and represents our largest geographical concentration of AUM. The North America distribution network serves a diverse set of clients across financial intermediaries, institutions and self-directed channels.
Removed
Variable incentive compensation for most of our employees is funded based on JHG profits. While individual awards are fully discretionary, performance assessments take into account financial and strategic (non-financial) factors, including company, department, team and individual performance.
Added
We recognize that the success of JHG is dependent on the unique talents and contributions of our diverse workforce, and we are invested in our employees’ success.
Removed
Executive leadership reviewed the business and identified $40 million to $45 million in necessary cost-efficiencies and made the difficult decision to implement a RIF as part of this exercise. We made every effort to avoid this RIF by eliminating open positions not actively being recruited and postponing the recruitment process for open positions where feasible.
Added
State Laws and Regulations As reflected above, certain of our activities, products, entities and employees are also subject to state laws and regulations. Those laws and regulations reinforce, supplement and, in certain cases, extend beyond the federal laws and regulations in various respects.
Removed
Consideration was given to the knowledge, skills and abilities of each impacted employee as compared to the requirements of open positions.
Added
For instance, the processing of personal information of California residents is subject to the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”).
Removed
We believe our ability to successfully compete in the investment management industry depends upon our ability to achieve consistently strong investment performance, provide exceptional client service, and develop and innovate products that will best serve our clients.
Added
Similar to the EU Global Data Protection Regulation, the CCPA and CPRA create rights in favor of natural persons and impose obligations on businesses for the handling, disclosure and deletion of personal information. Other U.S. states have adopted similarly comprehensive data privacy laws over the past several years.
Removed
MiFID II establishes detailed requirements for the governance, organization and conduct of business of investment firms and regulated markets.
Added
ESG and Climate Disclosure Regulations ESG topics and climate-related disclosures continue to be the focus of increased regulatory scrutiny across jurisdictions. In the U.S., the SEC has proposed climate disclosure rules to require public issuers to include enhanced disclosure regarding corporate climate-related information in their periodic reports and registration statements.
Removed
Another key regulator is the Australian Transaction Reports and Analysis Centre (“AUSTRAC”), which applies a number of reporting and other obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“AML/CFT Act”). 13 Table of Contents As our CHESS Depository Interests (“CDIs”) are quoted and traded on the ASX, we are also required to comply with the ASX Listing Rules.
Added
In addition, we expect state laws and regulations regarding these topics to continue to evolve and impose new and additional requirements.

… 2 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+33 added−23 removed101 unchanged
Biggest changeMore generally, the Dodd-Frank Act has increased our regulatory burdens and related compliance costs. 24 Table of Contents Rulemaking is still ongoing for the Dodd-Frank Act, and any further actions could include new rules and requirements that may be applicable to us, the effect of which could have additional adverse consequences to our business, results of operations or financial condition.
Biggest changeFurther actions by regulatory authorities could include new rules and requirements that may be applicable to us, the effect of which could have additional adverse consequences to our business, results of operations or financial condition. The EU has promulgated or is considering various new or revised legislation pertaining to financial services firms, including investment managers.
Should we, or any of our critical service providers, experience a significant local or regional disaster or other event that disrupts business continuity, such as an earthquake, hurricane, tsunami, terrorist attack, epidemic or other natural or man-made disaster, our continued success will depend in part on the safety and availability of our personnel, our office facilities and the proper functioning of our technology, computer, telecommunications and other systems and operations that are critical to our business.
Should we, or any of our critical service providers, experience a significant local or regional disaster or other event that disrupts business continuity, such as an earthquake, hurricane, tsunami, terrorist attack, epidemic or pandemic, or other natural or man-made disaster, our continued success will depend in part on the safety and availability of our personnel, our office facilities and the proper functioning of our technology, computer, telecommunications and other systems and operations that are critical to our business.
Finally, cybersecurity and data privacy have become high priorities for regulators, and many jurisdictions are enacting laws and regulations in these areas. Our failure to comply with these and other applicable requirements could result in regulatory investigations and penalties as well as negative publicity, which could materially adversely affect our business, results of operations and financial condition.
Finally, cybersecurity, data privacy and AI have become high priorities for regulators, and many jurisdictions are enacting laws and regulations in these areas. Our failure to comply with these and other applicable requirements could result in regulatory investigations and penalties as well as negative publicity, which could materially adversely affect our business, results of operations and financial condition.
Risks associated with legal liability often are difficult to assess or quantify and their existence and magnitude can remain unknown for significant periods of time. Among other things, such matters may result in fines, censure, legal damages, suspension of personnel, revocation of licenses and reputational damage, which may reduce our sales and increase redemptions.
Risks associated with legal liability often are difficult to assess or quantify and their existence and magnitude can remain unknown for significant periods of time. Among other things, such matters may result in substantial fines, censure, legal damages, suspension of personnel, revocation of licenses and reputational damage, which may reduce our sales and increase redemptions.
Our global portfolios and revenue derived from managing these portfolios are subject to significant risks of loss as a result of political, economic and diplomatic developments; currency fluctuations; social instability; changes in governmental policies, regulation and enforcement; expropriation; nationalization; asset confiscation; and changes in legislation related to ownership of non-U.S. securities.
Our global portfolios and revenue derived from managing these portfolios are subject to significant risks of loss as a result of political, economic and diplomatic developments; currency fluctuations; social instability; global hostilities; changes in governmental policies, regulation and enforcement; expropriation; nationalization; asset confiscation; and changes in legislation related to ownership of non-U.S. securities.
Our results of operations are dependent on our level of expenses, which can vary significantly for many reasons, including: ● Changes in the level and scope of our operating expenses in response to market conditions or regulations; ● Variations in the level of total compensation expense due to changes in bonuses and stock-based awards, changes in employee benefit costs due to regulatory or plan design changes, changes in our employee count and mix, competitive factors, market performance and other factors; ● Expenses incurred to support distribution of our investment strategies and services, develop new strategies and services, and enhance our technology, compliance and other infrastructure; ● Impairments of intangible assets or goodwill; and ● Impact of inflation.
Our results of operations are dependent on our level of expenses, which can vary significantly for many reasons, including: ● Changes in the level and scope of our operating expenses in response to market conditions or regulations; ● Variations in the level of total compensation expense due to changes in bonuses and stock-based awards, changes in employee benefit costs due to regulatory or plan design changes, changes in our employee count and mix, competitive factors, market performance and other factors; ● Expenses incurred to support distribution of our investment strategies and services, develop new strategies and services, and enhance our technology, compliance and other infrastructure; ● Impairments of intangible assets or goodwill; and ● Impact of inflation and interest rate changes.
Insurance costs are impacted by market conditions and the risk profile of the insured, and may increase significantly over relatively short periods. In addition, certain insurance coverage may not be available or may only be available at prohibitive cost.
Insurance costs are impacted by market conditions and the risk profile of the insured, and may increase significantly over relatively short periods. In addition, certain types of insurance coverage may not be available or may only be available at prohibitive cost.
As a result of regulatory oversight, we could face requirements that negatively impact the way in which we conduct business, increase compliance costs, impose additional capital requirements and/or involve enforcement actions that could lead to sanctions, including the potential revocation of licenses to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or key personnel, or the imposition of fines and censures on us or our employees.
As a result of regulatory oversight, we could face requirements that negatively impact the way in which we conduct business, increase compliance costs, impose additional capital requirements and/or involve enforcement actions that could lead to sanctions, including the potential revocation of licenses to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or key personnel, or the imposition of increasingly substantial fines and censures on us or our employees.
Poor investment performance as compared to third-party benchmarks or competitive products has in the past, and could in the future, led to a decrease in sales of investment products we manage and stimulate redemptions from existing products, generally lowering the overall level of our AUM and reducing our management fees, and may have an adverse effect on our revenue and net income.
Poor investment performance as compared to third-party benchmarks or competitive products has in the past, and could in the future, lead to a decrease in sales of investment products we manage and stimulate redemptions from existing products, generally lowering the overall level of our AUM and reducing our management fees, and may have an adverse effect on our revenue and net income.
Due to our interconnectivity with third-party vendors, advisors, central agents, exchanges, clearing organizations and other financial institutions, we may be adversely affected if any of them are subject to a successful cyberattack or other information security event, including those arising from the use of mobile technology or a third-party cloud environment.
Due to our interconnectivity with third-party vendors, advisors, central agents, exchanges, clearing organizations and other financial institutions, we may be adversely affected if any of them are subject to a successful cyberattack or other information security event, including those arising from the use of mobile technology, a third-party cloud environment or AI applications.
Laws and regulations applied at the international, national, state or provincial and local levels generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities, including the power to limit or restrict our business activities; conduct examinations, risk assessments, investigations and capital adequacy reviews; and impose remedial programs to address perceived deficiencies.
Laws and regulations applied at the international, national, state or provincial and local levels generally grant governmental agencies and industry self-regulatory authorities' broad administrative discretion over our activities, including the power to limit or restrict our business activities; conduct examinations, risk assessments, investigations and capital adequacy reviews; and impose remedial programs to address perceived deficiencies.
Moreover, fiduciary regulations have led to significant shifts in distributors’ business models and more limited product offerings, and additional regulations could lead to further changes, potentially resulting in reduced distribution of certain of our products. Our inability to access clients through third-party distribution channels could adversely affect our business prospects, AUM, results of operations and financial condition.
Moreover, fiduciary regulations have led to significant shifts in distributors’ business models and more limited product offerings, and additional fiduciary or other regulations could lead to further changes, potentially resulting in reduced distribution of certain of our products. Our inability to access clients through third-party distribution channels could adversely affect our business prospects, AUM, results of operations and financial condition.
Our reputation is critical to the success of our business. Harm to our reputation could reduce our AUM and affect sales, which could adversely affect our revenue and net income.
Our reputation is critical to the success of our business. Harm to our reputation could reduce our AUM and impact sales, which could adversely affect our revenue and net income.
Risks Related to Taxes Changes to tax laws could adversely affect us. The determination of our provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, UK and other jurisdictions.
Changes to tax laws could adversely affect us. The determination of our provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, UK and other jurisdictions.
Our ability to market and distribute our investment products is significantly dependent on access to the client base of insurance companies, defined contribution plan administrators, securities firms, broker-dealers, financial advisors, multi-managers, banks and other distribution channels. These companies generally offer their clients’ various investment products in addition to, and competitive with, products offered by us.
Our ability to market and distribute our investment products is significantly dependent on access to the client base of financial intermediaries, such as insurance companies, defined contribution plan administrators, securities firms, broker-dealers, financial advisors, multi-managers, banks and other distribution channels. These companies generally offer their clients’ various investment products in addition to, and competitive with, products offered by us.
However, there can be no assurance that the laws of Jersey, Channel Islands, will not change in the future or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the U.S., which could adversely affect the rights of investors. 27 Table of Contents U.S. shareholders may not be able to enforce civil liabilities against us.
However, there can be no assurance that the laws of Jersey, Channel Islands, will not change in the future or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the U.S., which could adversely affect the rights of investors. U.S. shareholders may not be able to enforce civil liabilities against us.
Should such reviews 20 Table of Contents indicate impairment, a reduction of the carrying value of the intangible asset could occur, resulting in a charge that may, in turn, adversely affect our results of operations and financial condition. Our business depends on investment management agreements that are subject to termination, non-renewal or reductions in fees.
Should such reviews indicate impairment, a reduction of the carrying value of the intangible asset could occur, resulting in a charge that may, in turn, adversely affect our results of operations and financial condition. Our business depends on investment management agreements that are subject to termination, non-renewal or reductions in fees.
In addition, the loss of key personnel or significant investment management professionals could reduce the attractiveness of our products to current and potential clients and adversely affect our revenues and profitability. ​ Volatility and disruption of the capital and credit markets, and adverse changes in the global economy, may significantly affect our results of operations and may put pressure on our financial results.
In addition, the loss of key personnel or significant investment management professionals could reduce the attractiveness of our products to current and potential clients and adversely affect our revenues and profitability. ​ 12 Table of Contents Volatility and disruption of the capital and credit markets, and adverse changes in the global economy, may significantly affect our results of operations and may put pressure on our financial results.
The investment management business is highly competitive. In recent years, established firms and new entrants to the asset management industry have expanded their application of technology, including the use of robo advisers, to provide services to clients. Our traditional fee structures may be subject to downward pressure due to these factors.
The investment management business is highly competitive. In recent years, established firms and new entrants to the asset management industry have expanded their application of technology, including the use of robo advisers and artificial intelligence (“AI”), to provide services to clients. Our traditional fee structures may be subject to downward pressure due to these factors.
Persistent or repeated incidents involving conflicts of interest, circumvention of policies and controls, fraud or insider trading could have a materially adverse impact on our reputation and could lead to costly regulatory inquiries. Our business is also highly dependent on the integrity, security and reliability of our information technology systems and infrastructure.
Persistent or repeated incidents involving conflicts of interest, circumvention of policies and controls, fraud or insider trading could have a materially adverse impact on our reputation and could lead to costly regulatory inquiries. 17 Table of Contents Our business is also highly dependent on the integrity, security and reliability of our information technology systems and infrastructure.
Additionally, we compete with investment management companies on the basis of investment performance, fees, diversity of products, distribution capability, scope and quality of services, 18 Table of Contents reputation and the ability to develop new investment products to meet the changing needs of investors. Failure to adequately compete could adversely affect our AUM, results of operations and financial condition.
Additionally, we compete with investment management companies on the basis of investment performance, fees, diversity of products, distribution capability, scope and quality of services, reputation and the ability to develop new investment products to meet the changing needs of investors. Failure to adequately compete could adversely affect our AUM, results of operations and financial condition.
Any breach or other failure of our technology systems, including those of third parties with which we do business, or any failure to timely and effectively identify and respond to a breach or failure, could result in the loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by the incident, additional security costs to mitigate against future incidents and litigation costs resulting from the incident.
Any breach or other failure of our technology or operational controls, including those of third parties with which we do business, or any failure to timely and effectively identify and respond to a breach or failure, could result in the loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by the incident, additional costs to mitigate against future incidents and litigation costs resulting from the incident.
Changes in our credit ratings or credit outlook, which are determined by rating agencies such as Standard & Poor’s (“S&P’s”) and Moody’s Investors Service, as well as global market volatility and 23 Table of Contents interest rate increases, could cause us to incur higher borrowing costs or to have greater difficulty in accessing the capital markets.
Changes in our credit ratings or credit outlook, which are determined by rating agencies such as Standard & Poor’s (“S&P’s”) and Moody’s Investors Service, as well as global market volatility and interest rate increases, could cause us to incur higher borrowing costs or to have greater difficulty in accessing the capital markets.
While the TCA regulates a number of important areas, significant parts of the UK economy are not addressed in detail by the TCA, including in particular the services sector, which represents the largest component of the UK’s economy. A number of issues have been the subject of further bilateral negotiations.
While the TCA regulates a number of important areas, significant parts of the UK economy are not addressed in detail, including the services sector, which represents the largest component of the UK economy. A number of issues have been the subject of further bilateral negotiations.
In addition, volatility in global financial and capital markets may also affect our ability to access the capital markets in a timely manner. Legal and Regulatory Risks Regulatory and governmental examinations and/or investigations, litigation and the legal risks associated with our business could adversely impact our AUM, increase costs and negatively impact our profitability and/or our future financial results.
In addition, volatility in global financial and capital markets may also affect our ability to access the capital markets in a timely manner. 18 Table of Contents Legal and Regulatory Risks Regulatory and governmental examinations and/or investigations, litigation and the legal risks associated with our business could adversely impact our AUM, increase costs and negatively impact our profitability and/or our future financial results.
It is not currently possible to determine precisely to what extent the withdrawal and replacement of LIBOR will affect us. However, the implementation of alternative benchmark rates to LIBOR may have an adverse effect on our business, results of operations or financial condition. 26 Table of Contents We may be subject to claims of lack of suitability.
It is not currently possible to determine precisely to what extent the withdrawal and replacement of LIBOR will affect us. However, the replacement of LIBOR with alternative benchmark rates may have an adverse effect on our business, results of operations or financial condition. We may be subject to claims of lack of suitability.
Third parties may also attempt to place individuals within our firm, or induce employees, clients or other users of our systems, to disclose sensitive information or provide access to our data, and these types of risks may be difficult to detect or prevent.
Third parties may also attempt to place individuals within our firm, or induce employees, clients or other users of our systems, to disclose sensitive information or provide access to our data, and these types of risks may be difficult to detect or prevent. Also, increasing use of AI may heighten these risks.
Declines in the fixed income markets, or in the market segments in which our investment products are concentrated, may cause our AUM to decrease. ​ ● Investment performance . Our investment performance, along with achieving and maintaining superior distribution and client services, is critical to the success of our business.
Declines in the fixed income markets, or in the market segments in which our investment products are concentrated, have in the past, and could in the future, cause our AUM to decrease. ​ ● Investment performance . Our investment performance, along with achieving and maintaining superior distribution and client services, is critical to the success of our business.
As a result, the new relationship between the UK and the EU could in the short-term, and possibly for longer, cause disruptions to 25 Table of Contents and create uncertainty in the UK and European economies, prejudice to financial services businesses such as ours that are conducting business in the EU and which are based in the UK, legal uncertainty regarding achievement of compliance with applicable financial and commercial laws and regulations, and the unavailability of timely information as to expected legal, tax and other regimes.
The new relationship between the UK and the EU remains uncertain and could in the short term, and possibly for longer, cause disruptions to, and create uncertainty in, the UK and European economies; prejudice to financial services businesses such as ours that are conducting business in the EU and that are based in the UK; legal uncertainty regarding achievement of compliance with applicable financial and commercial laws and regulations; and the unavailability of timely information as to expected legal, tax and other regimes.
Investors may reduce their investments in the funds and accounts we manage, or reduce their investments generally, for many reasons, including: ● In response to adverse market conditions; ● To pursue other investment opportunities; ● To reallocate investments to lower-fee strategies; ● To take profits from their investments; ● As a result of poor investment performance of the funds and accounts we manage; ● As a result of the failure or negative performance of investment products offered by competitors that could lead investors to lose confidence in similar investment products we manage, irrespective of the investment performance of such products; ● As a consequence of damage to our reputation; or ● Due to portfolio risk characteristics, which could cause investors to move assets to other investment managers.
Investors may reduce their investments in the funds and accounts we manage, or reduce their investments generally, for many reasons, including: ● In response to adverse market conditions; ● To pursue other investment opportunities; ● To reallocate investments to lower-fee strategies; ● To take profits from their investments; ● As a result of poor investment performance of the funds and accounts we manage; ● As a result of the failure or negative performance of investment products offered by competitors that could lead investors to lose confidence in similar investment products we manage, irrespective of the investment performance of such products; ● As a consequence of damage to our reputation; ● Due to portfolio risk characteristics, which could cause investors to move assets to other investment managers; or ● As a result of changes to the investor’s business model that could cause them to reduce their investments with us, such as moving away from a sub-advised business model or exiting the mutual fund business.
The carrying value of goodwill and other intangible assets on our balance sheet could become impaired, which would adversely affect our results of operations. At December 31, 2022, our goodwill and intangible assets totaled $3,667.8 million.
The carrying value of goodwill and other intangible assets on our balance sheet could become impaired, which would adversely affect our results of operations. At December 31, 2023, our goodwill and intangible assets totaled $3,721.6 million.
Certain enacted provisions and proposals for new regulation are potentially far-reaching and, depending upon their implementation, could increase the cost of offering mutual funds and other investment products and services and have material adverse effects on our business, results of operations or financial condition.
Certain enacted provisions and proposals for new regulation are potentially far-reaching and, depending upon their implementation, could increase the cost of offering investment products and services in the markets where we conduct business and have material adverse effects on our business, results of operations or financial condition.
We could be impacted by counterparty or client defaults. In periods of significant market volatility, the deteriorating financial condition of one financial institution may materially and adversely impact the performance of others. We, and the funds and accounts we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties across the financial industry.
In periods of significant market volatility, the deteriorating financial condition of one financial institution may materially and adversely impact the performance of others. We, and the funds and accounts we manage, have exposure to many different counterparties, and routinely execute transactions with counterparties across the financial industry.
The regulatory environment in which we operate changes frequently and has seen a significant increase in regulation in recent years.
The regulatory environment in which we operate changes frequently and has seen a significant increase in proposed and adopted regulations in recent years.
Moreover, any loss of confidential customer identification information could harm our reputation, result in the termination of certain contracts by our existing customers and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenue.
Moreover, any loss of confidential customer identification information could harm our reputation, result in the termination of certain contracts by our existing customers and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenue. Security breaches, including cyberattacks and phishing attacks, have become increasingly sophisticated.
Declines in the equity markets, or in the market segments in which our investment products are concentrated, may cause our AUM to decrease. ​ ● Declines in fixed income markets .
Declines in the equity markets, or in the market segments in which our investment products are concentrated, have in the past, and could in the future, cause our AUM to decrease. ​ ● Declines in fixed income markets .
A failure to follow these guidelines or requirements could result in damage to our reputation or in clients seeking to recover losses, withdrawing their assets or terminating their contracts, any one of which could cause revenues and profitability to decline. In addition, a breach of these investment guidelines or requirements could result in regulatory investigation, censure and/or fines.
A failure to follow these guidelines or requirements, or implement them appropriately, could result in damage to our reputation or in clients seeking to recover losses, withdrawing their assets or terminating their contracts, any one of which could cause revenues and profitability to decline.
We may also provide substantial supplemental capital to an existing investment product to accelerate the growth of a strategy and attract outside investment in the product. A decline in the valuation of these seeded investments could negatively impact our earnings and financial condition.
We may also provide substantial supplemental capital to an existing investment product to accelerate the growth of a strategy and attract outside investment in the product. A decline in the valuation of these seeded investments could negatively impact our earnings and financial condition. We could be adversely impacted by changes in assumptions used to calculate pension assets and liabilities.
These risks include: ● Legal implementation risks, as extensive changes to documentation for new and existing clients and transactions may be required; ● Financial risks, arising from any changes in the valuation of financial instruments linked to benchmark indices; ● Pricing risks, as changes to benchmark indices could impact pricing mechanisms on some instruments; ● Operational risks, due to the potential requirement to adapt information technology systems, trade reporting infrastructure and operational processes; and ● Conduct risks, relating to communications with a potential impact on customers and engagement with customers during the transition away from benchmark indices such as LIBOR.
These risks include: ● Legal implementation risks, as extensive changes to documentation for new and existing clients and transactions may be required; ● Financial risks, arising from any changes in the valuation of financial instruments linked to benchmark indices; ● Pricing risks, as changes to benchmark indices could impact pricing mechanisms on some instruments; ● Operational risks, due to the potential requirement to adapt information technology systems, trade reporting infrastructure and operational processes; and ● Conduct risks, relating to communications with a potential impact on customers and engagement with customers during the transition away from benchmark indices such as LIBOR. 20 Table of Contents The publication of non-USD LIBOR and one-week and two-month USD LIBOR ceased after December 31, 2021, and the remaining USD LIBOR tenors ceased after June 30, 2023.
In addition, if we fail to maintain our information technology systems and an infrastructure commensurate with the size, scope and technological requirements of our business, our productivity, growth and reputation could be negatively affected, which could have an adverse impact on our AUM, results of operations and financial condition. 22 Table of Contents Insurance may not be available on a cost-effective basis to protect us from potential liabilities.
In addition, if we fail to maintain our information technology systems and an infrastructure commensurate with the size, scope and technological requirements of our business, our productivity, growth and reputation could be negatively affected, which could have an adverse impact on our AUM, results of operations and financial condition.
If market events lead to instances where an ETF trades at prices that deviate significantly from the ETF’s NAV or indicative value, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and sell their holdings, which may cause the ETF’s AUM, revenue and earnings to decline. 16 Table of Contents Illiquidity in certain securities in which we invest may negatively impact the financial condition of our investment products and may impede our ability to effect redemptions.
If market events lead to instances where an ETF trades at prices that deviate significantly from the ETF’s NAV or indicative value, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and sell their holdings, which may cause the ETF’s AUM, revenue and earnings to decline.
Our use of mobile and cloud technologies could heighten these and other operational risks, and any failure by mobile technology and cloud service 21 Table of Contents providers to adequately safeguard their systems to prevent cyberattacks could disrupt our operations and result in misappropriation, corruption or loss of confidential or proprietary information.
Our use of mobile and cloud technologies and AI applications could heighten these and other operational risks, and any failure by the providers of these services to prevent cyberattacks could disrupt our operations and result in misappropriation, corruption or loss of confidential or proprietary information.
Individual financial, equity, debt and commodity markets may be adversely affected by financial, economic, political, electoral, diplomatic or other instabilities that are particular to the country or region in which a market is located. Global economic conditions also affect the mix, market values and levels of our AUM and are difficult to predict.
Individual financial, equity, debt and commodity markets may be adversely affected by financial, economic, political, electoral, diplomatic or other instabilities that are particular to the country or region in which a market is located, and such events may also adversely impact other markets.
We face the inherent risk of liability and costs related to or arising from claims from clients, employees and other third parties; actions taken by regulatory agencies; losses arising from fraud or other criminal activity; and costs and losses associated with cyber incidents.
Insurance may not be available on a cost-effective basis to protect us from potential liabilities. We face the inherent risk of liability and costs related to or arising from claims from clients, employees and other third parties; actions taken by regulatory agencies; losses arising from fraud or other criminal activity; and costs and losses associated with cyber incidents.
As of December 31, 2022, the UK Pension Scheme had a net pension asset of $94.9 million.
As of December 31, 2023, the UK Pension Scheme had a net pension asset of $85.3 million.
The capital and credit markets may, from time to time, experience volatility and disruption worldwide. Declines in global financial market conditions have, currently and in the past, resulted, and may continue to result, in significant decreases in our AUM, revenues and income, and further declines may negatively impact our financial results.
The capital and credit markets may, from time to time, experience volatility and disruption worldwide. Declines in global financial market conditions have, in the past, and could in the future, result in significant decreases in our AUM, revenues and income. Such declines have had, and may in the future have, an adverse impact on our results of operations.
Such declines have had, and may in the future have, an adverse impact on our results of operations. We may need to modify our business, strategies or operations, and we may be subject to additional constraints or costs in order to compete in a changing global economy and business environment.
We may need to modify our business, strategies or operations, and we may be subject to additional constraints or costs in order to compete in a changing global economy and business environment.
We operate in an industry that is highly regulated in most countries, and any enforcement action or changes in the laws or regulations governing our business could adversely affect our AUM, results of operations or financial condition.
We operate in an industry that is subject to extensive, complex, overlapping and sometimes conflicting regulation and supervision around the world, and any enforcement action or changes in the laws or regulations governing our business could adversely affect our AUM, results of operations or financial condition.
Moreover, certain legal or regulatory changes could require us to modify our strategies, businesses or operations, and these changes may result in the incurrence of other new constraints or costs, including the investment of significant management time and resources in order to satisfy new regulatory requirements or to compete in a changed business environment.
Moreover, certain legal or regulatory changes could require us to modify our strategies, businesses or operations, and these changes may result in the incurrence of other new constraints or costs, including the investment of significant management time and resources in order to satisfy new regulatory requirements or to compete in a changed business environment. 19 Table of Contents Regulators may impose increased capital requirements on our subsidiaries, which could negatively impact our ability to return capital or pay dividends to our shareholders and adversely affect our results of operations and financial condition.
GAAP, goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment annually or more often if an event or circumstance indicates that an impairment loss may have been incurred.
GAAP, goodwill and intangible assets with indefinite lives are not amortized but are tested for impairment annually or more often if an event or circumstance indicates that an impairment loss may have been incurred. Other intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and reviewed whenever there is an indication of impairment.
No assurance can be given that past or present investment performance in the investment products we manage is indicative of future performance. 15 Table of Contents Our revenue and profitability would be adversely affected by any reduction in our AUM as a result of redemptions and other withdrawals from the funds and accounts we manage.
Our revenue and profitability would be adversely affected by any reduction in our AUM as a result of redemptions and other withdrawals from the funds and accounts we manage.
Like all investment management firms, our activities are highly regulated in almost all countries in which we conduct business, including the U.S., the UK, Europe, Australia, Singapore and other international markets. A substantial portion of the products and services we provide are regulated and are accordingly supervised by financial services regulators in the U.S., the UK, Australia, Singapore and Luxembourg.
Like all investment management firms, our activities, products and services are highly regulated in almost all markets in which we conduct business, including the U.S., the UK, Continental Europe, Australia, Singapore and other international markets. Compliance with these regulations is costly and complex.
The EU has promulgated or is considering various new or revised legislation pertaining to financial services firms, including investment managers. Such regulatory changes may have a direct impact on the revenue of our business should they result in structural or operational changes and may increase operational or compliance costs.
Such regulatory changes may have a direct impact on the revenue of our business should they result in structural or operational changes and may increase operational or compliance costs.
In addition, the annual review of investment management agreements with U.S. mutual funds, as required by law, could result in a reduction in our advisory fee revenues. The termination of or failure to renew one or more of these agreements could have a material adverse effect on our AUM, results of operations and financial condition.
In addition, the annual review of investment management agreements with U.S. mutual funds, as required by law, could result in a reduction in our advisory fee revenues.
It is possible that the regulatory capital requirements that currently apply to our subsidiaries could be increased.
Regulators typically have broad discretion to impose increased regulatory capital requirements on the regulated entities within their jurisdiction. It is possible that the regulatory capital requirements that currently apply to our subsidiaries could be increased.
An illiquid trading market may increase market volatility and may make it difficult to sell investments promptly without suffering a loss. This may have an adverse impact on the investment performance of such funds and mandates, and on our AUM, revenues and results of operations.
This may have an adverse impact on the investment performance of such funds and mandates, and on our AUM, revenues and results of operations.
In addition, changes to tax laws or income tax rates could materially impact our tax provision, cash tax liability, deferred income tax balances and effective tax rate. The recently enacted U.S. Inflation Reduction Act of 2022 did not have a material impact on us.
In addition, changes to tax laws or income tax rates could materially impact our tax provision, cash tax liability, deferred income tax balances and effective tax rate.
The outbreak and spread of COVID-19, a highly transmissible and pathogenic disease, resulted in a widespread national and global public health crisis, which had, and may continue to have, an adverse effect on our business, financial condition and results of operations.
Our business and operations are subject to adverse effects from the outbreak and spread of contagious diseases, such as COVID-19, and such adverse effects may continue. The outbreak and spread of COVID-19, a highly transmissible and pathogenic disease, resulted in a widespread national and global public health crisis and created significant volatility, uncertainty and economic disruption.
The UK and the EU agreed to a Trade and Cooperation Agreement on December 24, 2020 (“TCA”), which was operative from the end of the Transition Period and which governs the UK’s relationship with the EU. The TCA entered into force upon ratification by the EU Parliament on May 1, 2021.
The UK’s withdrawal from the EU occurred on January 31, 2020, and following a transition period, the UK and the EU agreed to a Trade and Cooperation Agreement on December 24, 2020 (“TCA”), which governs the UK’s relationship with the EU.
Security breaches, including cyberattacks and phishing attacks, have become increasingly prevalent and sophisticated, change frequently and are often not recognized until launched. Cyberattacks can originate from a variety of sources, including third parties affiliated with foreign governments, organized crime or terrorist organizations.
Cyberattacks can originate from a variety of sources, including third parties affiliated with foreign governments, organized crime or terrorist organizations.
Fluctuations in the exchange rates to the USD have adversely affected, and may continue to adversely affect, our financial results from one period to the next. In addition, there is risk associated with the foreign exchange revaluation of balances held by certain of our subsidiaries for which the local currency is different from our functional currency.
Fluctuations in the exchange rates to the USD have adversely affected, and may continue to adversely affect, our financial results from one period to the next.
Some of our funds or mandates invest in certain securities or other assets in which the secondary trading market is illiquid or does not exist. Illiquidity may occur with respect to the securities of a specific issuer, based on industry, sector or geographic region, or with respect to an asset class or an investment type.
Illiquidity may occur with respect to the securities of a specific issuer, based on industry, sector or geographic region, or with respect to an asset class or an investment type. An illiquid trading market may increase market volatility and may make it difficult to sell investments promptly without suffering a loss.
For example, Russia’s invasion of Ukraine and the threat that Russia’s military aggression may expand beyond Ukraine have significantly impacted the global economy and financial markets, which have had, and may continue to have, an adverse impact on our investment performance and flows in certain products. 19 Table of Contents In addition, international trading markets, particularly in some emerging market countries, are often smaller, less liquid, less regulated and significantly more volatile than those in the U.S.
For example, Russia’s invasion of Ukraine and the conflict between Israel and Hamas have significantly impacted the global economy and financial markets and may continue to have an adverse impact on our investment performance and flows in certain products.
In the U.S., the government and other institutions have taken action, and may continue to take further action, in response to volatility in the global financial markets.
The SEC and other agencies and institutions have taken action, and may continue to take further action, in response to global financial market developments, internal political dynamics and perennial industry challenges, such as conflicts of interest.
Increases in the level of our expenses, or our inability to reduce the level of expenses when necessary, could materially affect our operating results. Operational and Technology Risks ​ We could be subject to losses and reputational harm if we, or our agents, fail to properly safeguard sensitive and confidential information against cyberattacks or other security breaches.
Increases in the level of our expenses, or our inability to reduce the level of expenses when necessary, could materially affect our operating results. We may engage in strategic transactions that could pose risks to our business, financial condition and global operations.
One of the subjects of these negotiations has been a Memorandum of Understanding (“MoU”) between the EU and UK covering financial services.
One of the subjects of these negotiations has been a Memorandum of Understanding (“MoU”) between the EU and UK covering financial services, which was signed on June 27, 2023. The MoU established a cooperative framework, focusing on shared objectives and creating a forum for official market dialogue, rather than a roadmap to restore pre-Brexit mutual freedoms.
The exit of the UK from the EU could adversely impact our business, results of operations and financial condition. The UK’s withdrawal from the EU occurred on January 31, 2020, and the UK remained in the EU’s customs union and single market until December 31, 2020 (the Transition Period).
In addition, a breach of these investment guidelines or requirements could result in regulatory investigation, censure and/or fines. The exit of the UK from the EU could adversely impact our business, results of operations and financial condition.
In addition, performance fees subject our revenue to increased volatility.
In addition, performance fees subject our revenue to increased volatility. No assurance can be given that past or present investment performance in the investment products we manage is indicative of future performance.
Removed
Our business and operations are subject to adverse effects from the outbreak and spread of contagious diseases, such as COVID-19, and such adverse effects may continue.
Added
Illiquidity in certain securities in which we invest may negatively impact the financial condition of our investment products and may impede our ability to effect redemptions. Some of our funds or mandates invest in certain securities or other assets in which the secondary trading market is illiquid or does not exist.
Removed
Infectious illness outbreaks or other adverse public health developments in countries where we operate, as well as local, state and/or national government measures implemented in response to such outbreaks, could adversely affect the economies of many nations or the entire global economy, the financial condition of individual issuers or companies, and the capital markets in ways that cannot be foreseen, and such impacts could be significant and long term.
Added
In addition, there is risk associated with the foreign exchange revaluation of balances held by certain of our subsidiaries for which the local currency is different from our functional currency. 13 Table of Contents We could be impacted by counterparty or client defaults.
Removed
In addition, such events and their aftermaths could cause investor fear and panic, which could adversely affect in unforeseeable ways the operations and performance of the companies, sectors, nations, regions in which we invest and financial markets in general.
Added
Global economic conditions also affect the mix, market values and levels of our AUM and are difficult to predict.
Removed
To remain competitive, we must continue to perform our asset management and related business responsibilities for our clients and investors properly and effectively. Our ability to do this depends upon the health and safety of our personnel, among other things.
Added
There is a risk that these conflicts, as well as any future conflicts, may spread more broadly, increasing the potential adverse impact on our AUM, results of operations and financial condition.
Removed
While we have implemented our business continuity plans globally to manage our business during and following this pandemic, there is no assurance that our efforts and planning will be sufficient to protect the health and safety of our personnel and/or maintain the success of our business.
Added
We will continue to monitor any direct and indirect impacts of these circumstances on our business, financial results and operations, although it is not possible to predict the broader consequences of these ongoing conflicts at this time. 14 Table of Contents In addition, international trading markets, particularly in some emerging market countries, are often smaller, less liquid, less regulated and significantly more volatile than those in the U.S.
Removed
Further, we depend on a number of third-party providers to support our operations, and any failure of our third-party providers to fulfill their obligations could adversely impact our business.
Added
The termination of, or failure to renew, one or more of these agreements could have a material adverse effect on our AUM, results of operations and financial condition. 15 Table of Contents Our expenses are subject to fluctuations that could materially affect our operating results.

… 44 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−1 removed0 unchanged
Biggest changeThe primary office building in Denver accounts for 90% of the total square feet of office space in Denver, and its lease expires in 2025. The remaining 22 offices total approximately 75,000 square feet and are all leased. In the opinion of management, the space and equipment we lease is adequate for existing operating needs.
Biggest changeThe remaining 21 offices total approximately 69,000 square feet and are all leased. In the opinion of management, the space and equipment we lease is adequate for existing operating needs. See Note 9 — Leases, in Part II, Item 8, Financial Statements and Supplementary Data, for further information on our property leases. ​
ITEM 2. PROPERTIES We have 25 offices across the UK, Europe, North America, Asia and Australia. Our corporate headquarters is located in London, where it occupies approximately 125,000 square feet on a long-term lease that expires in 2028. We also have significant operations in Denver, Colorado, occupying approximately 178,000 square feet of office space in two separate locations.
ITEM 2. PROPERTIES We have 23 offices across the UK, Europe, North America, Asia and Australia. Our corporate headquarters is located in London, where it occupies approximately 116,000 square feet on a long-term lease that expires in 2028. We also have significant operations in Denver, Colorado, occupying approximately 161,000 square feet of office space, and its lease expires in 2025.
Removed
See Note 9 — Leases, in Part II, Item 8, Financial Statements and Supplemental Data, for further information on our property leases. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth in response to Item 103 of Regulation S-K under “Legal Proceedings” is incorporated by reference from Part II, Item 8, Financial Statements and Supplementary Data, Note 20 — Commitments and Contingencies: Litigation and Other Regulatory Matters. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ ​ 28 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth in response to Item 103 of Regulation S-K under “Legal Proceedings” is incorporated by reference from Part II, Item 8, Financial Statements and Supplementary Data, Note 19 — Commitments and Contingencies: Litigation and Other Regulatory Matters. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+3 added−3 removed0 unchanged
Biggest changeDuring the year ended December 31, 2022, our Share Plans Repurchases totaled 3,522,981 shares at an average price of $30.85. ​ During the first quarter of 2023, we intend to repurchase shares on-market for the annual share grants associated with the 2022 variable compensation payable to our employees. ​ The following table summarizes our on-market repurchases of common stock and CDIs during the three months ended December 31, 2022, and includes repurchases under the 2022 Corporate Buyback Program and Share Plans Repurchases. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Total number of shares Approximate U.S. dollar value ​ ​ number of ​ Average ​ purchased as part of ​ of shares that may yet ​ ​ shares ​ price paid per ​ publicly announced ​ be purchased under the Period ​ purchased ​ share ​ programs ​ programs (end of month, in millions) October 1, 2022, through October 31, 2022 3,763 ​ $ 23.23 — $ 144 November 1, 2022, through November 30, 2022 3,319 ​ ​ 24.60 — $ 144 December 1, 2022, through December 31, 2022 3,685 ​ ​ 23.60 — $ 144 Total 10,767 ​ $ 23.78 — ​ ​ ​ ​ ITEM 6 – [RESERVED] ​
Biggest changeDuring the fourth quarter 2023, we did not purchase any shares related to remuneration arrangements or employee entitlements. ​ The following table summarizes our common stock repurchases by month during the three months ended December 31, 2023. ​ ​ Total number of Approximate U.S. dollar ​ Total shares purchased value of shares that may number of Average as part of yet be purchased ​ shares price paid publicly announced under the programs Period purchased per share programs (end of month, in millions) October 1, 2023, through October 31, 2023 — $ — — $ 150 November 1, 2023, through November 30, 2023 1,303,582 25.37 1,303,582 $ 117 December 1, 2023, through December 31, 2023 1,016,288 28.36 1,016,288 $ 88 Total 2,319,870 $ 26.68 2,319,870 ​ ​ ​ ITEM 6. [RESERVED] ​
BMI Asset Management & Custody Banks Index. (2) The S&P 500 Index consists of 500 stocks chosen for market size, liquidity and industry group representation and is one of the most widely used benchmarks of U.S. equity performance. The S&P U.S. BMI Asset Management & Custody Banks Index is a market-value weighted index of 40 asset management companies.
(2) The S&P 500 Index consists of 500 stocks chosen for market size, liquidity and industry group representation and is one of the most widely used benchmarks of U.S. equity performance. The S&P U.S. BMI Asset Management & Custody Banks Index is a market-value weighted index of 40 asset management companies.
This data is not intended to forecast future performance of our common stock. ​ ​ (1)STANDARD & POOR’S ® , S&P ® and S&P 500 ® are registered trademarks of Standard & Poor’s Financial Services LLC. ​ (2) As of December 31, 2022, the S&P U.S.
This data is not intended to forecast future performance of our common stock. ​ ​ (1) STANDARD & POOR’S ® , S&P ® and S&P 500 ® are registered trademarks of Standard & Poor’s Financial Services LLC. ​ (2) As of December 31, 2023, the S&P U.S.
The comparison assumes a $100 investment on December 31, 2017, in our common stock and in each of the foregoing indices, and assumes reinvestment of dividends, if any.
The comparison assumes a $100 investment on December 31, 2018, in our common stock and in each of the foregoing indices, and assumes reinvestment of dividends, if any.
BMI Asset Management & Custody Banks Index comprised the following companies: Affiliated Managers Group, Inc.; Ameriprise Financial, Inc.; Ares Management Corporation; Artisan Partners Asset Management Inc.; AssetMark Financial Holdings, Inc.; Associated Capital Group, Inc.; BlackRock, Inc.; Blackstone Inc.; Blucora, Inc.; Blue Owl Capital Inc.; Bridge Investment Group Holdings Inc.; BrightSphere Investment Group Inc.; Cohen & Steers, Inc.; Diamond Hill Investment Group, Inc.; Federated Hermes, Inc.; Focus Financial Partners Inc.; Franklin Resources, Inc.; Galaxy Digital Holdings Ltd.; GQG Partners Inc.; Grosvenor Capital 29 Table of Contents Management, L.P.; Hamilton Lane Incorporated; Invesco Ltd.; Janus Henderson Group plc; KKR & Co.
BMI Asset Management & Custody Banks Index comprised the following companies: Affiliated Managers Group, Inc.; AlTi Global, Inc.; Ameriprise Financial, Inc.; Ares Management Corporation; Artisan Partners Asset Management Inc.; AssetMark Financial Holdings, Inc.; Associated Capital Group, Inc.; BlackRock, Inc.; Blackstone Inc.; Blue Owl Capital Inc.; Bridge Investment Group Holdings Inc.; BrightSphere Investment Group Inc.; Cohen & Steers, Inc.; Diamond Hill Investment Group, Inc.; Federated Hermes, Inc.; Franklin Resources, Inc.; Galaxy Digital Holdings Ltd.; GQG Partners Inc.; Grosvenor Capital Management, L.P.; Hamilton Lane Incorporated; Heritage Global Inc.; Invesco Ltd.; Janus Henderson Group plc; KKR & Co.
Inc.; Northern Trust Corporation; P10, Inc.; Sculptor Capital Management, Inc.; SEI Investments Company; Silvercrest Asset Management Group Inc.; State Street Corporation; StepStone Group Inc.; T.
Inc.; Northern Trust Corporation; P10, Inc.; SEI Investments Company; Silvercrest Asset Management Group Inc.; State Street Corporation; StepStone Group LP; T.
The quarterly dividend will be paid on February 28, 2023, to shareholders of record at the close of business February 13, 2023. ​ Performance Graph The following graph illustrates the cumulative total shareholder return of our common stock over the five-year period ending December 30, 2022, the last trading day of 2022, and compares it to the cumulative total return on the S&P 500 Index (1) and to the S&P U.S.
Performance Graph The following graph illustrates the cumulative total shareholder return of our common stock over the five-year period ending December 29, 2023, the last trading day of 2023, and compares it to the cumulative total return on the S&P 500 Index (1) and to the S&P U.S. BMI Asset Management & Custody Banks Index.
We did not repurchase any shares of common stock or CDIs under the 2022 Corporate Buyback Program during the three months ended December 31, 2022. ​ Some of our executives and employees obtain rights to receive shares of our common stock as part of their remuneration arrangements and employee entitlements.
We commenced repurchases under the 2023 Corporate Buyback Program in November 2023, and we repurchased 2,319,870 shares of common stock for $61.9 million during the three months ended December 31, 2023. Some of our executives and employees obtain rights to receive our common stock as part of their remuneration arrangements and employee entitlements.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES JHG Common Stock Our common stock is traded on the NYSE and our CDIs are traded on the ASX (symbol: JHG).
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES JHG Common Stock Our common stock is traded on the NYSE (symbol: JHG). On February 23, 2024, there were approximately 4,650 holders of record of our common stock.
Common Stock Purchases On May 3, 2022, the Board approved a new on-market share buyback program (“2022 Corporate Buyback Program”), pursuant to which we are authorized to repurchase up to $200.0 million of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 2023 Annual General Meeting of Shareholders.
Rowe Price Group, Inc.; The Bank of New York Mellon Corporation; The Carlyle Group Inc.; TPG Inc.; Victory Capital Holdings, Inc.; Virtus Investment Partners, Inc.; WisdomTree, Inc. ​ (3) Data source: S&P Global Market Intelligence. 23 Table of Contents Common Stock Purchases On October 31, 2023, our Board of Directors approved the 2023 Corporate Buyback Program pursuant to which we are authorized to repurchase up to $150.0 million of our common stock on the NYSE at any time prior to the date of our 2024 Annual General Meeting of Shareholders.
We satisfy these entitlements by transferring shares of existing common stock that we repurchased on-market for this purpose (“Share Plans Repurchases”). As a policy, we do not issue new shares to employees as part of our annual compensation practices.
We satisfy these entitlements by transferring shares of existing common stock that we repurchase on-market for this purpose (“Share Plan Repurchases”). The Board of Directors separately approved the repurchase of up to 4 million additional shares of common stock for the purpose of making grants to executives and employees.
Removed
On February 24, 2023, there were approximately 32,309 holders of record of our common stock. ​ Dividends On February 1, 2023, our Board declared a cash dividend of $0.39 per share.
Added
On November 1, 2023, JHG announced that it had requested and received approval from ASX to be delisted, and on December 6, 2023, we delisted from ASX.
Removed
Rowe Price Group, Inc.; The Bank of New York Mellon Corporation; The Carlyle Group Inc.; TPG Inc.; Victory Capital Holdings, Inc.; Virtus Investment Partners, Inc.; Westwood Holdings Group, Inc.; and WisdomTree, Inc. ​ (3) Data source: S&P Global Market Intelligence.
Added
The ASX delisting is not expected to have a material impact on our financial position or operating results other than in relation to savings in compliance and certain ancillary costs associated with maintaining the ASX listing. ​ Dividends On January 31, 2024, our Board of Directors declared a cash dividend of $0.39 per share.
Removed
We commenced repurchases under the 2022 Corporate Buyback Program in May 2022.
Added
The quarterly dividend will be paid on February 28, 2024, to shareholders of record at the close of business February 12, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+28 added−30 removed39 unchanged
Biggest changeMutual ​ SICAVs Unit Trusts and Other Funds Mandates Trusts Funds Performance Fees ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 $ 2.0 $ 0.1 $ 33.5 $ 10.0 ​ $ 6.7 ​ $ (63.0) ​ Year ended December 31, 2021 $ 63.7 $ 19.2 $ 14.5 $ 6.9 ​ $ 14.3 ​ $ (15.9) ​ Year ended December 31, 2020 $ 17.6 $ 10.5 $ 11.0 $ 72.1 ​ $ — ​ $ (13.1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of funds that earned performance fees ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 (1) ​ 8 ​ 2 ​ 8 ​ 11 ​ 1 ​ 15 ​ Year ended December 31, 2021 (1) ​ 14 ​ 2 ​ 9 ​ 17 ​ 3 ​ 17 ​ Year ended December 31, 2020 (1) ​ 12 ​ 3 ​ 9 ​ 36 ​ — ​ 17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AUM generating performance fees (in billions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AUM at December 31, 2022, generating FY22 performance fees ​ $ 5.1 $ 1.5 ​ $ 2.3 ​ $ 9.3 ​ $ 0.8 ​ $ 45.1 ​ AUM at December 31, 2021, generating FY21 performance fees ​ $ 14.7 $ 2.0 ​ $ 1.5 ​ $ 12.4 ​ $ 2.7 ​ $ 66.1 ​ AUM at December 31, 2020, generating FY20 performance fees ​ $ 7.7 $ 2.3 ​ $ 0.9 ​ $ 37.8 ​ $ — ​ $ 57.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of funds eligible to earn performance fees ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ 19 ​ 2 ​ 10 ​ 15 ​ 4 ​ 15 ​ As of December 31, 2021 ​ 19 ​ 2 ​ 10 ​ 38 ​ 4 ​ 15 ​ As of December 31, 2020 ​ 20 ​ 2 ​ 12 ​ 47 ​ 4 ​ 17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AUM subject to performance fees (in billions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AUM at December 31, 2022, subject to FY22 performance fees ​ $ 10.7 ​ $ 1.5 ​ $ 2.6 ​ $ 12.7 ​ $ 2.1 ​ $ 45.1 ​ AUM at December 31, 2021, subject to FY21 performance fees ​ $ 12.9 ​ $ 2.0 ​ $ 2.4 ​ $ 45.5 ​ $ 3.0 ​ $ 66.1 ​ AUM at December 31, 2020, subject to FY20 performance fees ​ $ 12.9 ​ $ 1.9 ​ $ 0.9 ​ $ 44.4 ​ $ 3.0 ​ $ 57.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Uncrystallized performance fees (in billions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AUM at December 31, 2022, with an uncrystallized performance fee at December 31, 2022, vesting in 2023 (2) $ 0.1 $ — $ — ​ ​ n/a ​ $ 0.8 ​ ​ n/a ​ AUM at December 31, 2021, with an uncrystallized performance fee at December 31, 2021, vesting in 2022 (2) $ 4.5 $ 2.0 $ 0.2 ​ ​ n/a ​ $ 1.4 ​ ​ n/a ​ AUM at December 31, 2020, with an uncrystallized performance fee at December 31, 2020, vesting in 2021 (2) $ 1.5 $ 1.7 $ 0.1 ​ ​ n/a ​ $ 1.6 ​ ​ n/a ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance fee participation rate percentage (3) ​ ​ 10%-20% ​ 15%-20% ​ ​ 10%-20% ​ 5%-28% ​ 15% ​ +/−0.15% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance fee frequency ​ Annually and quarterly ​ Annually ​ Annually and quarterly ​ ​ Annually and quarterly ​ Annually ​ Monthly ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance fee methodology (4) ​ Relative plus HWM Relative/Absolute plus HWM ​ Absolute plus HWM ​ ​ Bespoke ​ ​ Relative plus HWM ​ ​ Relative ​ ​ (1) For absolute return funds, this excludes funds earning a performance fee on redemption and only includes those with a period-end crystallization date.
Biggest changeMutual SICAVs Unit Trusts Other Funds Mandates Trusts Funds Performance fees Year ended December 31, 2023 $ 2.1 $ — $ 56.9 $ 3.1 $ 9.1 $ (66.1 ) Year ended December 31, 2022 $ 2.0 $ 0.1 $ 33.5 $ 10.0 $ 6.7 $ (63.0 ) Year ended December 31, 2021 $ 63.7 $ 19.2 $ 14.5 $ 6.9 $ 14.3 $ (15.9 ) Number of funds that earned performance fees Year ended December 31, 2023 (1) 8 — 5 8 1 15 Year ended December 31, 2022 (1) 8 2 8 11 1 15 Year ended December 31, 2021 (1) 14 2 9 17 3 17 AUM generating performance fees (in billions) AUM at December 31, 2023, generating FY23 performance fees $ 4.9 $ — $ 1.2 $ 5.8 $ 1.0 $ 56.7 AUM at December 31, 2022, generating FY22 performance fees $ 5.1 $ 1.5 $ 2.3 $ 9.3 $ 0.8 $ 45.1 AUM at December 31, 2021, generating FY21 performance fees $ 14.7 $ 2.0 $ 1.5 $ 12.4 $ 2.7 $ 66.1 Number of funds eligible to earn performance fees As of December 31, 2023 18 2 4 19 3 15 As of December 31, 2022 19 2 10 15 4 15 As of December 31, 2021 19 2 10 38 4 15 AUM subject to performance fees (in billions) AUM at December 31, 2023, subject to FY23 performance fees $ 11.0 $ 1.2 $ 1.6 $ 22.1 $ 1.9 $ 56.7 AUM at December 31, 2022, subject to FY22 performance fees $ 10.7 $ 1.5 $ 2.6 $ 12.7 $ 2.1 $ 45.1 AUM at December 31, 2021, subject to FY21 performance fees $ 12.9 $ 2.0 $ 2.4 $ 45.5 $ 3.0 $ 66.1 Uncrystallized performance fees (in billions) AUM at December 31, 2023, with an uncrystallized performance fee at December 31, 2023, vesting in 2024 (2) $ 2.8 $ 1.1 $ — n/a $ — n/a AUM at December 31, 2022, with an uncrystallized performance fee at December 31, 2022, vesting in 2023 (2) $ 0.1 $ — $ — n/a $ 0.8 n/a AUM at December 31, 2021, with an uncrystallized performance fee at December 31, 2021, vesting in 2022 (2) $ 4.5 $ 2.0 $ 0.2 n/a $ 1.4 n/a Performance fee participation rate percentage (3) 10% - 20% 15% - 20% 10% - 20% 5% - 28% 15% +/− 0.15% Performance fee frequency Annually and quarterly Annually Annually and quarterly Annually and quarterly Annually Monthly Performance fee methodology (4) Relative plus HWM Relative/absolute plus HWM Absolute plus HWM Bespoke Relative plus HWM Relative (1) For absolute return funds, this excludes funds earning a performance fee on redemption and only includes those with a period-end crystallization date.
However, for non-U.S. equity securities held by the U.S. mutual funds, excluding ETFs, the quoted market prices may be adjusted to capture market movement between the time the local market closes and the NYSE closes.
However, for non-U.S. equity securities held by U.S. mutual funds, excluding ETFs, the quoted market prices may be adjusted to capture market movement between the time the local market closes and the NYSE closes.
Accordingly, the provision for income taxes represents the total estimate of the liability that we have incurred for doing business each year in all of the locations. Annually we file tax returns that represent filing positions within each jurisdiction and settle return liabilities.
Accordingly, the provision for income taxes represents the total estimate of the liability that we have incurred for doing business each year in all of the locations. We file tax returns annually that represent filing positions within each jurisdiction and settle return liabilities.
Investment management agreements without a contractual termination date are classified as indefinite-lived intangible assets based upon the following: (i) there is no legal or statutory limitation on the contract period to manage these investment 50 Table of Contents products; (ii) we expect to, and have the ability to, operate these investment products indefinitely; (iii) the investment products have multiple investors and are not reliant on an individual investor or small group of investors for their continued operation; (iv) the current competitive environment does not indicate a finite life; and (v) there is a high likelihood of continued renewal based on historical experience.
Investment management agreements without a contractual termination date are classified as indefinite-lived intangible assets based upon the following: (i) there is no legal or statutory limitation on the contract period to manage these investment products; (ii) we expect to, and have the ability to, operate these investment products indefinitely; (iii) the investment products have multiple investors and are not reliant on an individual investor or small group of investors for their continued operation; (iv) the current competitive environment does not indicate a finite life; and (v) there is a high likelihood of continued renewal based on historical experience.
A significant proportion of these securities are listed or quoted on a recognized securities exchange or market and are regularly traded thereon; these investments are valued based on unadjusted quoted market prices.
A significant proportion of these securities is listed or quoted on a recognized securities exchange or market and is regularly traded thereon; these investments are valued based on unadjusted quoted market prices.
Judgment is used to ascertain if a formerly active market has become inactive and to determine fair values when markets have become inactive. Our Fair Value Pricing Committee is responsible for determining or approving these unquoted prices, which are reported to those charged with governance of the funds and trusts.
Judgment is used to ascertain if a formerly active market has become inactive and to determine fair values when markets have become inactive. Our Fair Value Pricing Committees are responsible for determining or approving these unquoted prices, which are reported to those charged with governance of the funds and trusts.
The cash associated with seeding and redeeming seeded investment products is reflected in the above table as sales (purchases) of investment securities, net. ​ We consolidate certain seeded investment products into our group financial statements. The purchases and sales of investment securities within consolidated seeded investment products are disclosed separately from our capital contributions to seed a product.
The cash associated with seeding and redeeming seeded investment products is reflected in the above table as sales (purchases) of investments, net. ​ We consolidate certain seeded investment products into our group financial statements. The purchases and sales of investments within consolidated seeded investment products are disclosed separately from our capital contributions to seed a product.
The strategy contributing to the decline in the performance of SICAVs and UK OEICs was primarily the absolute return strategy. Also contributing to the year-over-year decrease in performance fees was an increase in negative performance fees associated with U.S. mutual funds, primarily due to underperformance of certain U.S. mutual funds against their respective benchmark index .
The strategy contributing to the decline in the performance of SICAVs and UK OEICs and unit trusts was primarily the absolute return strategy. Also contributing to the year-over-year decrease in performance fees was an increase in negative performance fees associated with U.S. mutual funds, primarily due to underperformance of certain U.S. mutual funds against their respective benchmark index.
If the fair value of the sole reporting unit or intangible asset is less than the carrying amount, an impairment is recognized. Any impairment is recognized immediately through net income and cannot subsequently be reversed. ​ We performed our annual assessment as of October 1, 2022.
If the fair value of the sole reporting unit or intangible asset is less than the carrying amount, an impairment is recognized. Any impairment is recognized immediately through net income and cannot subsequently be reversed. ​ We performed our annual assessment as of October 1, 2023.
Refer to Note 3 — Dispositions, in Part II, Item 8, Financial Statements and Supplementary Data, for information regarding the divesture of Intech and Geneva. ​ Average Assets Under Management The following table presents our average AUM by capability for the years ended December 31, 2022, 2021 and 2020 (in billions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average AUM ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 vs. ​ 2021 vs.
Refer to Note 3 — Dispositions, in Part II, Item 8, Financial Statements and Supplementary Data, for information regarding the divesture of Intech. ​ Average Assets Under Management The following table presents our average AUM by capability for the years ended December 31, 2023, 2022 and 2021 (in billions): Average AUM Year ended December 31, 2023 vs. 2022 vs.
Cash and cash equivalents exclude cash held by consolidated variable interest entities (“VIEs”) and consolidated voting rights entities (“VREs”), and investment securities exclude noncontrolling interests as these assets are not available to us under any circumstance. ​ Investment securities held by us represent seeded investment products (exclusive of noncontrolling interests), investments related to deferred compensation plans and other less significant investments.
Cash and cash equivalents exclude cash held by consolidated variable interest entities (“VIEs”) and consolidated voting rights entities (“VREs”), and investments exclude noncontrolling interests as these assets are not available to us under any circumstance. ​ Investments held by us represent seeded investment products (exclusive of noncontrolling interests), equity method investments, investments related to deferred compensation plans and other less significant investments.
The increase was primarily due to $17.8 million of favorable foreign currency translation and a $6.7 million increase in interest income primarily driven by higher interest rates on cash balances.
The increase was primarily due to $17.8 million of favorable foreign currency revaluation and a $6.7 million increase in interest income primarily driven by higher interest rates on cash balances.
The critical accounting policies and estimates management considers critical to understanding the consolidated financial statements relate to the areas of consolidated investment products, investment securities, goodwill and intangible assets, retirement benefit plans and income taxes.
The critical accounting policies and estimates management considers critical to understanding the consolidated financial statements relate to the areas of consolidated investment products, investments, goodwill and intangible assets, retirement benefit plans and income taxes.
The majority of distribution and servicing fees we collect are passed through to third-party intermediaries. JHG management believes that the deduction of distribution and service fees from revenue in the computation of adjusted revenue reflects the pass-through nature of these revenues. In certain arrangements, we perform the distribution and servicing activities and 44 Table of Contents retain the applicable fees.
The majority of distribution and servicing fees we collect are passed through to third-party intermediaries. JHG management believes that the deduction of distribution and service fees from revenue in the computation of adjusted revenue reflects the pass-through nature of these revenues. In certain arrangements, we perform the distribution and servicing activities and retain the applicable fees.
Valuation of Investment Securities Fair value of our investment securities is generally determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, we use internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate.
Valuation of Investments Fair value of our investments is generally determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, we use internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate.
The results of the goodwill assessment revealed it is more likely than not that the estimated fair value of the reporting unit was greater than the carrying value as of October 1, 2022.
The results of the goodwill assessment revealed it is more likely than not that the estimated fair value of the reporting unit was greater than the carrying value as of October 1, 2023.
In assessing whether a valuation allowance 52 Table of Contents should be established against a deferred income tax asset, we consider the nature, frequency and severity of recent losses, forecasts of future profitability and the duration of statutory carryback and carryforward periods, among other factors. ​
In assessing whether a valuation allowance should be established against a deferred income tax asset, we consider the nature, frequency and severity of recent losses, forecasts of future profitability and the duration of statutory carryback and carryforward periods, among other factors.
The most significant input into the enterprise value assessment is our stock price and an assumed control premium. ​ We also assessed the indefinite-lived intangible assets for impairment as of October 1. We used a qualitative approach to determine the likelihood of impairment, with AUM being the focus of the assessment.
The most significant inputs into the enterprise value assessment are our stock price and an assumed control premium. ​ We also assessed the indefinite-lived intangible assets for impairment as of October 1. We used a qualitative approach to determine the likelihood of impairment, with AUM being the focus of the assessment.
(4) Relative performance is measured versus applicable benchmarks and is subject to an HWM for relevant funds. ​ 38 Table of Contents Shareowner servicing fees Shareowner servicing fees are primarily composed of mutual fund servicing fees, which are driven by AUM.
(4) Relative performance is measured versus applicable benchmarks and is subject to an HWM for relevant funds. ​ 30 Table of Contents Shareowner servicing fees Shareowner servicing fees are primarily composed of U.S. mutual fund servicing fees, which are driven by AUM.
As part of our qualitative test, along with considering macroeconomic conditions and the unadjusted book value per share, we performed a quantitative test to determine the enterprise value of the reporting unit, comparing it to our equity balance (carrying amount).
As part of our qualitative test, along with considering macroeconomic conditions and the unadjusted book value per share, we performed a quantitative calculation to estimate the enterprise value of the reporting unit, comparing it to our equity balance (carrying value).
The quarterly dividend will be paid on February 28, 2023, to shareholders of record at the close of business on February 13, 2023. Long-Term Liquidity Requirements Expected long-term commitments as of December 31, 2022, include principal and interest payments related to our 4.875% Senior Notes due 2025 (“2025 Senior Notes”) and operating and finance lease payments.
The quarterly dividend will be paid on February 28, 2024, to shareholders of record at the close of business on February 12, 2024. 37 Table of Contents Long-Term Liquidity Requirements Expected long-term commitments as of December 31, 2023, include principal and interest payments related to our 4.875% Senior Notes due 2025 (“2025 Senior Notes”) and operating and finance lease payments.
(2) FX reflects movements in AUM resulting from changes in foreign currency rates as non-USD-denominated AUM is translated into USD. (3) Reclassifications relate to reclassifications of existing funds from Intermediary to Institutional. Disposal activity in 2022 relates to the sale of Intech, and disposal activity in 2020 relates to the sale of Geneva.
(2) FX reflects movements in AUM resulting from changes in foreign currency rates as non-USD-denominated AUM is translated into USD. (3) Reclassifications relate to reclassifications of existing funds from Institutional to Self-directed and Intermediary in 2023 and from Intermediary to Institutional in 2021. Disposal activity in 2022 relates to the sale of Intech.
Refer to the Non-GAAP Financial Measures section for information on adjusted non-GAAP figures. ​ ● During the year ended December 31, 2022, the Board of Directors declared and paid $1.55 per share dividends. ​ ● During the year ended December 31, 2022, we acquired 3.3 million shares of our common stock for $98.9 million as part of the share buyback program. ​ ● Strong balance sheet and cash generation, with $1.2 billion in cash and cash equivalents and $473.3 million of cash provided by operating activities in the year ended December 31, 2022. ​ Financial Summary Results are reported on a U.S.
Refer to the Non-GAAP Financial Measures section for information on adjusted non-GAAP figures. ​ ● Strong balance sheet and cash generation, with $1.2 billion in cash and cash equivalents and $441.6 million of cash provided by operating activities in the year ended December 31, 2023. ● During the year ended December 31, 2023, the Board of Directors declared and paid dividends of $1.56 per share. ​ ● During the year ended December 31, 2023, we acquired 2,319,870 shares of our common stock for $61.9 million as part of the share buyback program. ​ Financial Summary Results are reported on a U.S.
This means that cumulative actuarial gains or losses up to an amount equal to 10% of the higher of the liabilities and the assets of the scheme (“corridor”) have no immediate impact on net income and are instead recognized through other comprehensive income.
We have adopted the “10% corridor” method for recognizing actuarial gains and losses. This means that cumulative actuarial gains or losses up to an amount equal to 10% of the higher of the liabilities and the assets of the scheme (“corridor”) have no immediate impact on net income and are instead recognized through other comprehensive income.
In the event the traders have received price indications from market makers for a particular issue, this information is transmitted to the pricing vendors. ​ We leverage the expertise of our fund management teams across the business to cross-invest assets and create value for our clients.
In the event the traders have received price indications from market makers for a particular issue, this information is transmitted to the pricing vendors. ​ We leverage the expertise of our fund management teams across the business to cross-invest assets and create value for our clients. Where cross investment occurs, assets and flows are identified, and the duplication is removed.
These fees are often subject to a hurdle rate. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually) if the stated performance criteria are achieved.
These fees are often subject to an HWM. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually) if the stated performance criteria are achieved.
This decrease was partially offset by an increase of $17.8 million driven by an improvement in management fee margins primarily due to a product mix shift toward higher yielding products. ​ Management fees increased $395.3 million during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to the impact of higher average AUM and an increase in management fee margins, which contributed $377.3 million and $23.6 million to the increase in management fees, respectively. ​ Average net management fee margins, by capability, consisted of the following for the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ 2022 vs. ​ ​ 2022 2021 2021 Average net management fee margin (bps) (1) : Equities ​ 55.2 ​ 56.1 (2) % Fixed Income ​ 29.6 ​ 29.1 2 % Multi-Asset ​ 53.1 ​ 52.9 ​ 0 % Alternatives ​ 60.4 ​ 68.4 (12) % Quantitative Equities (2) ​ 15.8 ​ 16.5 (4) % Total average ​ 48.9 ​ 47.0 4 % ​ (1) Net management fee margins are based on management fees net of distribution expenses.
This decrease was partially offset by an increase of $17.8 million driven by an improvement in management fee margins primarily due to a product mix shift toward higher yielding products. ​ Average net management fee margins, by capability, consisted of the following for the years ended December 31, 2023, 2022 and 2021: ​ ​ Year ended December 31, 2023 vs. 2022 vs. ​ 2023 2022 2021 2022 2021 Average net management fee margin (bps) (1) : Equities 54.4 55.2 56.1 (1 )% (2 )% Fixed Income 27.8 29.6 29.1 (6 )% 2 % Multi-Asset 52.9 53.1 52.9 (0 )% 0 % Alternatives 61.9 60.4 68.4 2 % (12 )% Quantitative Equities (2) — 15.8 16.5 (100 )% (4 )% Total average 48.9 48.9 47.0 — % 4 % ​ (1) Net management fee margins are based on management fees net of distribution expenses.
Cash Flows A summary of cash flow data for the years ended December 31, 2022, 2021 and 2020, was as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 2020 Cash flows provided by (used for): ​ ​ ​ Operating activities ​ $ 473.3 ​ $ 895.4 ​ $ 645.7 Investing activities ​ 58.5 ​ (283.3) ​ 129.4 Financing activities ​ (419.1) ​ (588.1) ​ (491.0) Effect of exchange rate changes on cash and cash equivalents ​ (54.9) ​ (13.5) ​ 27.5 Net change in cash and cash equivalents ​ 57.8 ​ 10.5 ​ 311.6 Cash balance at beginning of period ​ 1,118.6 ​ 1,108.1 ​ 796.5 Cash balance at end of period ​ $ 1,176.4 ​ $ 1,118.6 ​ $ 1,108.1 ​ Operating Activities Fluctuations in operating cash flows are attributable to changes in net income and working capital items, which can vary from period to period based on the amount and timing of cash receipts and payments.
Cash Flows A summary of cash flow data for the years ended December 31, 2023, 2022 and 2021, was as follows (in millions): ​ ​ Year ended December 31, ​ 2023 2022 2021 Cash flows provided by (used for): Operating activities $ 441.6 $ 473.3 $ 895.4 Investing activities (328.9 ) 58.5 (283.3 ) Financing activities (151.9 ) (419.1 ) (588.1 ) Effect of exchange rate changes on cash and cash equivalents 30.9 (54.9 ) (13.5 ) Net change in cash and cash equivalents (8.3 ) 57.8 10.5 Cash balance at beginning of period 1,176.4 1,118.6 1,108.1 Cash balance at end of period $ 1,168.1 $ 1,176.4 $ 1,118.6 ​ 35 Table of Contents Operating Activities Fluctuations in operating cash flows are attributable to changes in net income and working capital items, which can vary from period to period based on the amount and timing of cash receipts and payments.
Refer to Note 3 — Dispositions, in Part II, Item 8, Financial Statements and Supplementary Data, for information regarding the divesture of Intech and Geneva. ​ ​ 33 Table of Contents Our AUM and flows by client type for the years ended December 31, 2022, 2021 and 2020, were as follows (in billions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ ​ 2021 ​ Sales ​ Redemptions (1) ​ (redemptions) ​ Markets ​ FX (2) ​ and disposals (3) ​ 2022 By client type: ​ ​ ​ ​ ​ ​ ​ ​ ​ Intermediary ​ $ 215.0 ​ $ 39.9 ​ $ (53.3) ​ $ (13.4) ​ $ (32.8) ​ $ (5.9) ​ $ (0.9) ​ $ 162.0 Self-directed ​ 90.1 ​ 1.5 ​ (5.1) ​ (3.6) ​ (21.6) ​ (0.6) ​ — ​ 64.3 Institutional ​ 127.2 ​ 19.1 ​ (38.6) ​ (19.5) ​ ​ (13.9) ​ (5.4) ​ (27.4) ​ 61.0 Total ​ $ 432.3 ​ $ 60.5 ​ $ (97.0) ​ $ (36.5) ​ $ (68.3) ​ $ (11.9) ​ $ (28.3) ​ $ 287.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ ​ 2020 ​ Sales ​ Redemptions (1) ​ (redemptions) ​ Markets ​ FX (2) ​ and disposals (3) ​ 2021 By client type: ​ ​ ​ ​ ​ ​ ​ ​ ​ Intermediary ​ $ 192.9 ​ $ 56.9 ​ $ (54.8) ​ $ 2.1 ​ $ 23.8 ​ $ (2.0) ​ $ (1.8) ​ $ 215.0 Institutional ​ 127.6 ​ 14.3 ​ (29.6) ​ (15.3) ​ ​ 15.4 ​ (2.3) ​ 1.8 ​ 127.2 Self-directed ​ 81.1 ​ 3.2 ​ (6.2) ​ (3.0) ​ 12.1 ​ (0.1) ​ — ​ 90.1 Total ​ $ 401.6 ​ $ 74.4 ​ $ (90.6) ​ $ (16.2) ​ $ 51.3 ​ $ (4.4) ​ $ — ​ $ 432.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ ​ 2019 ​ Sales ​ Redemptions (1) ​ (redemptions) ​ Markets ​ FX (2) ​ and disposals (3) ​ 2020 By client type: ​ ​ ​ ​ ​ ​ ​ ​ ​ Intermediary ​ $ 172.7 ​ $ 52.1 ​ $ (53.4) ​ $ (1.3) ​ $ 21.5 ​ $ 2.5 ​ $ (2.5) ​ $ 192.9 Institutional ​ 132.1 ​ 23.0 ​ (42.4) ​ (19.4) ​ ​ 13.1 ​ 3.5 ​ (1.7) ​ 127.6 Self-directed ​ 70.0 ​ 3.2 ​ (6.9) ​ (3.7) ​ 14.6 ​ 0.2 ​ — ​ 81.1 Total ​ $ 374.8 ​ $ 78.3 ​ $ (102.7) ​ $ (24.4) ​ $ 49.2 ​ $ 6.2 ​ $ (4.2) ​ $ 401.6 (1) Redemptions include the impact of client transfers.
Refer to Note 3 — Dispositions, in Part II, Item 8, Financial Statements and Supplementary Data, for information regarding the divesture of Intech. ​ 26 Table of Contents Our AUM and flows by client type for the years ended December 31, 2023, 2022 and 2021, were as follows (in billions): Closing AUM Closing AUM December 31, Net sales Reclassifications December 31, 2022 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2023 By client type: Intermediary $ 162.0 $ 39.5 $ (43.1 ) $ (3.6 ) $ 22.8 $ 2.1 $ 0.1 $ 183.4 Self-directed 64.3 1.3 (4.8 ) (3.5 ) 14.9 0.2 0.2 76.1 Institutional 61.0 20.1 (13.7 ) 6.4 7.4 0.9 (0.3 ) 75.4 Total $ 287.3 $ 60.9 $ (61.6 ) $ (0.7 ) $ 45.1 $ 3.2 $ — $ 334.9 Closing AUM Closing AUM December 31, Net sales Reclassifications December 31, 2021 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2022 By client type: Intermediary $ 215.0 $ 39.9 $ (53.3 ) $ (13.4 ) $ (32.8 ) $ (5.9 ) $ (0.9 ) $ 162.0 Self-directed 90.1 1.5 (5.1 ) (3.6 ) (21.6 ) (0.6 ) — 64.3 Institutional 127.2 19.1 (38.6 ) (19.5 ) (13.9 ) (5.4 ) (27.4 ) 61.0 Total $ 432.3 $ 60.5 $ (97.0 ) $ (36.5 ) $ (68.3 ) $ (11.9 ) $ (28.3 ) $ 287.3 Closing AUM Closing AUM December 31, Net sales Reclassifications December 31, 2020 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2021 By client type: Intermediary $ 192.9 $ 56.9 $ (54.8 ) $ 2.1 $ 23.8 $ (2.0 ) $ (1.8 ) $ 215.0 Institutional 127.6 14.3 (29.6 ) (15.3 ) 15.4 (2.3 ) 1.8 127.2 Self-directed 81.1 3.2 (6.2 ) (3.0 ) 12.1 (0.1 ) — 90.1 Total $ 401.6 $ 74.4 $ (90.6 ) $ (16.2 ) $ 51.3 $ (4.4 ) $ — $ 432.3 (1) Redemptions include the impact of client transfers.
The cash received and paid as part of this program is reflected in the table above. ​ The transactions discussed above represent a majority of the activity within investing activities on our Consolidated Statements of Cash Flows. ​ Financing Activities ​ Cash used for financing activities for the years ended December 31, 2022, 2021 and 2020, was as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 2020 Dividends paid to shareholders ​ $ (259.4) ​ $ (256.0) ​ $ (262.9) Third-party sales (purchases) in consolidated seeded investment products, net ​ 51.1 ​ 100.3 ​ (34.0) Purchase of common stock for stock-based compensation plans ​ (113.8) ​ (71.8) ​ (49.1) Purchase of common stock from Dai-ichi Life and share buyback program ​ (98.9) ​ (372.1) ​ (130.8) Payment of contingent consideration ​ ​ — ​ ​ — ​ ​ (13.8) Proceeds from stock-based compensation plans ​ ​ 4.3 ​ ​ 12.5 ​ ​ 1.0 Other ​ (2.4) ​ (1.0) ​ (1.4) Cash used for financing activities ​ $ (419.1) ​ $ (588.1) ​ $ (491.0) ​ Most of the cash flows within financing activities are driven by the payment of dividends to shareholders, and the purchases of common stock as part of the Corporate Buyback Program and for stock-based compensation plans.
The cash received and paid as part of this program is reflected in the table above. ​ The transactions discussed above represent a majority of the activity within investing activities on our Consolidated Statements of Cash Flows. ​ Financing Activities ​ Cash used for financing activities for the years ended December 31, 2023, 2022 and 2021, was as follows (in millions): ​ ​ Year ended December 31, ​ 2023 2022 2021 Dividends paid to shareholders $ (258.7 ) $ (259.4 ) $ (256.0 ) Third-party capital invested into consolidated seeded investment products, net 227.2 51.1 100.3 Purchase of common stock for stock-based compensation plans (57.4 ) (113.8 ) (71.8 ) Purchase of common stock for the share buyback program and from Dai-ichi Life (61.9 ) (98.9 ) (372.1 ) Proceeds from stock-based compensation plans 3.0 4.3 12.5 Other (4.1 ) (2.4 ) (1.0 ) Cash used for financing activities $ (151.9 ) $ (419.1 ) $ (588.1 ) ​ The majority of cash flows within financing activities are driven by the payment of dividends to shareholders, and the purchases of common stock as part of the Corporate Buyback Program and for stock-based compensation plans.
Actual future tax consequences on settlement of our uncertain tax positions may be materially different than management’s current estimates. As of December 31, 2022, unrecognized tax benefits were $26.7 million.
Actual future tax consequences on settlement of our uncertain tax positions may be materially different than management’s current estimates. As of December 31, 2023, unrecognized tax benefits were $28.4 million.
As of December 31, 2022, approximately 32% of our AUM was non-USD-denominated. ​ 32 Table of Contents Our AUM and flows by capability for the years ended December 31, 2022, 2021 and 2020, were as follows (in billions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ ​ 2021 ​ Sales ​ Redemptions (1) ​ (redemptions) ​ Markets ​ FX (2) ​ and disposals (3) ​ 2022 By capability: ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities ​ $ 244.3 ​ $ 24.4 ​ $ (45.6) ​ $ (21.2) ​ $ (47.2) ​ $ (5.9) ​ $ 1.3 ​ $ 171.3 Fixed Income ​ 79.6 ​ 23.0 ​ (29.4) ​ (6.4) ​ (8.9) ​ (4.5) ​ — ​ 59.8 Multi-Asset ​ 59.7 ​ 6.5 ​ (10.8) ​ (4.3) ​ ​ (9.3) ​ (0.6) ​ — ​ 45.5 Alternatives ​ 10.7 ​ 6.4 ​ (5.3) ​ 1.1 ​ (0.3) ​ (0.8) ​ — ​ 10.7 Quantitative Equities ​ 38.0 ​ 0.2 ​ (5.9) ​ (5.7) ​ (2.6) ​ ​ (0.1) ​ (29.6) ​ — Total ​ $ 432.3 ​ $ 60.5 ​ $ (97.0) ​ $ (36.5) ​ $ (68.3) ​ $ (11.9) ​ $ (28.3) ​ $ 287.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ 2020 Sales Redemptions (1) ​ (redemptions) Markets FX (2) and disposals (3) 2021 By capability: ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities ​ $ 219.4 ​ $ 34.7 ​ $ (43.9) ​ $ (9.2) ​ $ 36.0 ​ $ (1.9) ​ $ — ​ $ 244.3 Fixed Income ​ 81.5 ​ 22.1 ​ (21.0) ​ 1.1 ​ (1.1) ​ (1.9) ​ — ​ 79.6 Multi-Asset ​ 48.0 ​ 12.3 ​ (8.1) ​ 4.2 ​ 7.7 ​ (0.2) ​ — ​ 59.7 Quantitative Equities ​ 42.0 ​ 0.6 ​ (12.6) ​ (12.0) ​ 8.0 ​ ​ — ​ — ​ 38.0 Alternatives ​ 10.7 ​ 4.7 ​ (5.0) ​ (0.3) ​ 0.7 ​ (0.4) ​ — ​ 10.7 Total ​ $ 401.6 ​ $ 74.4 ​ $ (90.6) ​ $ (16.2) ​ $ 51.3 ​ $ (4.4) ​ $ — ​ $ 432.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closing AUM ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ Net sales ​ ​ ​ ​ ​ ​ ​ Reclassifications ​ December 31, ​ 2019 Sales Redemptions (1) ​ (redemptions) Markets FX (2) and disposals (3) 2020 By capability: ​ ​ ​ ​ ​ ​ ​ ​ ​ Equities ​ $ 204.0 ​ $ 32.8 ​ $ (49.1) ​ $ (16.3) ​ $ 33.6 ​ $ 2.2 ​ $ (4.1) ​ $ 219.4 Fixed Income ​ 74.8 ​ 28.9 ​ (30.0) ​ (1.1) ​ 4.6 ​ 3.2 ​ — ​ 81.5 Multi-Asset ​ 39.8 ​ 11.4 ​ (7.9) ​ 3.5 ​ 4.8 ​ 0.1 ​ (0.2) ​ 48.0 Quantitative Equities ​ ​ 45.2 ​ ​ 2.4 ​ ​ (11.8) ​ ​ (9.4) ​ ​ 6.0 ​ ​ 0.2 ​ ​ — ​ ​ 42.0 Alternatives ​ 11.0 ​ 2.8 ​ (3.9) ​ (1.1) ​ 0.2 ​ 0.5 ​ 0.1 ​ 10.7 Total ​ $ 374.8 ​ $ 78.3 ​ $ (102.7) ​ $ (24.4) ​ $ 49.2 ​ $ 6.2 ​ $ (4.2) ​ $ 401.6 (1) Redemptions include the impact of client transfers.
Our AUM and flows by capability for the years ended December 31, 2023, 2022 and 2021, were as follows (in billions): ​ ​ Closing AUM ​ ​ Closing AUM December 31, Net sales Reclassifications December 31, ​ 2022 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2023 By capability: ​ ​ ​ Equities $ 171.3 $ 31.0 $ (33.2 ) $ (2.2 ) $ 34.8 $ 2.1 $ (0.9 ) $ 205.1 Fixed Income 59.8 24.1 (16.9 ) 7.2 3.8 0.7 — 71.5 Multi-Asset 45.5 4.1 (7.7 ) (3.6 ) 6.2 0.2 0.6 48.9 Alternatives 10.7 1.7 (3.8 ) (2.1 ) 0.3 0.2 0.3 9.4 Total $ 287.3 $ 60.9 $ (61.6 ) $ (0.7 ) $ 45.1 $ 3.2 $ — $ 334.9 ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ Closing AUM ​ December 31, ​ ​ Net sales ​ ​ Reclassifications December 31, ​ 2021 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2022 By capability: Equities $ 244.3 $ 24.4 $ (45.6 ) $ (21.2 ) $ (47.2 ) $ (5.9 ) $ 1.3 $ 171.3 Fixed Income 79.6 23.0 (29.4 ) (6.4 ) (8.9 ) (4.5 ) — 59.8 Multi-Asset 59.7 6.5 (10.8 ) (4.3 ) (9.3 ) (0.6 ) — 45.5 Alternatives 10.7 6.4 (5.3 ) 1.1 (0.3 ) (0.8 ) — 10.7 Quantitative Equities 38.0 0.2 (5.9 ) (5.7 ) (2.6 ) (0.1 ) (29.6 ) — Total $ 432.3 $ 60.5 $ (97.0 ) $ (36.5 ) $ (68.3 ) $ (11.9 ) $ (28.3 ) $ 287.3 ​ ​ Closing AUM ​ ​ ​ ​ ​ ​ Closing AUM ​ December 31, ​ ​ Net sales ​ ​ Reclassifications December 31, ​ 2020 Sales Redemptions (1) (redemptions) Markets FX (2) and disposals (3) 2021 By capability: Equities $ 219.4 $ 34.7 $ (43.9 ) $ (9.2 ) $ 36.0 $ (1.9 ) $ — $ 244.3 Fixed Income 81.5 22.1 (21.0 ) 1.1 (1.1 ) (1.9 ) — 79.6 Multi-Asset 48.0 12.3 (8.1 ) 4.2 7.7 (0.2 ) — 59.7 Quantitative Equities 42.0 0.6 (12.6 ) (12.0 ) 8.0 — — 38.0 Alternatives 10.7 4.7 (5.0 ) (0.3 ) 0.7 (0.4 ) — 10.7 Total $ 401.6 $ 74.4 $ (90.6 ) $ (16.2 ) $ 51.3 $ (4.4 ) $ — $ 432.3 (1) Redemptions include the impact of client transfers.
Non-GAAP Financial Measures We report our financial results in accordance with GAAP. However, we evaluate our profitability and our ongoing operations using additional non-GAAP financial measures. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies.
However, we evaluate our profitability and our ongoing operations using additional non-GAAP financial measures that exclude costs or benefits that are not part of our ongoing operations. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies.
Revenues for distribution and servicing activities performed by us are not deducted from GAAP revenue . ​ (2) Adjustments for the year ended December 31, 2022, consist primarily of the acceleration of long-term incentive plan expense related to the departure of certain employees, redundancy payments associated with the RIF and rent expense for subleased office space.
Revenues for distribution and servicing activities performed by us are not deducted from GAAP revenue. (2) Adjustments for the years ended December 31, 2023 and 2022, include rent expense, rent income, other rent-related adjustments associated with subleased office space and the acceleration of long-term incentive plan expense and redundancy expenses related to the departure of certain employees.
As of December 31, 2022, our contractual obligations related to debt and interest payments totaled $337.8 million, with $14.6 million of interest payable within 12 months.
As of December 31, 2023, our contractual obligations related to debt and interest payments totaled $323.2 million, with $14.6 million of interest payable within 12 months.
Meaningful foreign currency translation impacts to our operating expenses are discussed in the Operating Expenses section below. ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 vs. ​ 2021 vs. ​ ​ 2022 2021 2020 2021 2020 Revenue (in millions): ​ ​ ​ ​ ​ Management fees ​ $ 1,799.4 ​ $ 2,189.4 ​ $ 1,794.1 (18) % 22 % Performance fees ​ (10.7) ​ 102.7 ​ 98.1 n/m * 5 % Shareowner servicing fees ​ 224.0 ​ 260.7 ​ 209.2 (14) % 25 % Other revenue ​ 190.9 ​ 214.2 ​ 197.2 (11) % 9 % Total revenue ​ $ 2,203.6 ​ $ 2,767.0 ​ $ 2,298.6 (20) % 20 % * n/m - Not meaningful. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Management fees Management fees decreased $390.0 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the impact of lower average AUM, which caused management fees to decline by $421.4 million.
Meaningful foreign currency translation impacts to our operating expenses are discussed in the Operating Expenses section below. ​ Revenue Year ended December 31, 2023 vs. 2022 vs. 2023 2022 2021 2022 2021 Revenue (in millions): Management fees $ 1,700.1 $ 1,799.4 $ 2,189.4 (6 )% (18 )% Performance fees 5.1 (10.7 ) 102.7 n/m * n/m * Shareowner servicing fees 213.3 224.0 260.7 (5 )% (14 )% Other revenue 183.3 190.9 214.2 (4 )% (11 )% Total revenue $ 2,101.8 $ 2,203.6 $ 2,767.0 (5 )% (20 )% * n/m - Not meaningful. ​ 28 Table of Contents Management fees Management fees decreased $99.3 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to a decline in average AUM. ​ Management fees decreased $390.0 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the impact of lower average AUM, which caused management fees to decline by $421.4 million.
During the year ended December 31, 2021, we also purchased shares from Dai-ichi Life as part of the Dai-ichi Life secondary public offering. ​ 47 Table of Contents Third-party sales and purchases in consolidated seeded investment products, net is another significant driver of cash flows within financing activities.
During the year ended December 31, 2021, we also purchased shares of JHG stock from Dai-ichi Life as part of the Dai-ichi Life secondary public offering. ​ 36 Table of Contents Third-party capital invested into consolidated seeded investment products, net is another significant driver of cash flows within financing activities.
The following table summarizes key balance sheet data relating to our liquidity and capital resources as of December 31, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Cash and cash equivalents held by the Company ​ $ 1,156.5 ​ $ 1,106.0 Investment securities held by the Company ​ $ 359.1 ​ $ 551.0 Fees and other receivables ​ $ 252.9 ​ $ 351.6 Debt ​ $ 307.5 ​ $ 310.4 ​ 45 Table of Contents Cash and cash equivalents primarily consist of cash held at banks, on-demand deposits, investments in money market instruments and highly liquid short-term government securities with a maturity date of three months or less .
The following table summarizes key balance sheet data relating to our liquidity and capital resources as of December 31, 2023 and 2022 (in millions): ​ ​ December 31, December 31, ​ 2023 2022 Cash and cash equivalents held by the Company $ 1,145.9 $ 1,156.5 Investments held by the Company $ 399.2 $ 359.1 Fees and other receivables $ 294.0 $ 252.9 Long-term debt $ 304.6 $ 307.5 Cash and cash equivalents primarily consist of cash held at banks, on-demand deposits, investments in money market instruments, highly liquid short-term debt securities and commercial paper with a maturity date of three months or less.
We continually evaluate the accounting policies and estimates used to prepare the consolidated financial statements. In general, management’s estimates are based on historical experience, information from third-party professionals, as appropriate, and various other assumptions that are believed to be reasonable under current facts and circumstances. Actual results could differ from those estimates made by management.
In general, management’s estimates are based on historical experience, information from third-party professionals, as appropriate, and various other assumptions that are believed to be reasonable under current facts and circumstances. Actual results could differ from those estimates made by management.
We have provided a reconciliation below of our non-GAAP financial measures to the most directly comparable GAAP measures. ​ 43 Table of Contents Alternative performance measures ​ The following is a reconciliation of revenue, operating expenses, operating income, net income attributable to JHG and diluted earnings per share to adjusted revenue, adjusted operating expenses, adjusted operating income, adjusted net income attributable to JHG and adjusted diluted earnings per share, respectively, for the years ended December 31, 2022 and 2021 (in millions, except per share and operating margin data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ Year ended ​ ​ December 31, ​ December 31, ​ ​ 2022 ​ 2021 Reconciliation of revenue to adjusted revenue ​ ​ ​ ​ Revenue ​ $ 2,203.6 ​ $ 2,767.0 Management fees ​ ​ (193.2) ​ ​ (208.4) Shareowner servicing fees ​ ​ (185.2) ​ ​ (214.7) Other revenue ​ (119.9) ​ (131.0) Adjusted revenue (1) ​ $ 1,705.3 ​ $ 2,212.9 Reconciliation of operating expenses to adjusted operating expenses ​ ​ Operating expenses ​ $ 1,713.8 ​ $ 1,946.1 Employee compensation and benefits (2) ​ (16.8) ​ — Long-term incentive plans (2) ​ (21.1) ​ 0.4 Distribution expenses (1) ​ ​ (498.3) ​ ​ (554.1) General, administrative and occupancy (2) ​ (9.5) ​ (10.8) Impairment of goodwill and intangible assets (3) ​ ​ (35.8) ​ ​ (121.9) Depreciation and amortization (3) ​ (3.7) ​ (7.8) Adjusted operating expenses ​ $ 1,128.6 ​ $ 1,251.9 Adjusted operating income ​ ​ 576.7 ​ ​ 961.0 Operating margin (4) ​ 22.2% ​ 29.7% Adjusted operating margin (5) ​ 33.8% ​ 43.4% Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG ​ ​ Net income attributable to JHG ​ $ 372.4 ​ $ 620.0 Employee compensation and benefits (2) ​ 16.8 ​ — Long-term incentive plans (2) ​ 21.1 ​ (0.4) General, administrative and occupancy (2) ​ 9.5 ​ 10.8 Impairment of goodwill and intangible assets (3) ​ ​ 35.8 ​ ​ 121.9 Depreciation and amortization (3) ​ 3.7 ​ 7.8 Investment gains (losses), net (6) ​ ​ 0.4 ​ ​ 0.2 Other non-operating income (expenses), net (6) ​ 0.3 ​ (14.2) Income tax provision (7) ​ (26.2) ​ (6.6) Adjusted net income attributable to JHG ​ 433.8 ​ 739.5 Less: allocation of earnings to participating stock-based awards ​ (13.1) ​ (21.1) Adjusted net income attributable to JHG common shareholders ​ $ 420.7 ​ $ 718.4 Weighted-average common shares outstanding — diluted (two class) ​ 162.0 ​ 168.5 Diluted earnings per share (two class) (8) ​ $ 2.23 ​ $ 3.57 Adjusted diluted earnings per share (two class) (9) ​ $ 2.60 ​ $ 4.26 (1) We contract with third-party intermediaries to distribute and service certain of our investment products.
We have provided a reconciliation below of our non-GAAP financial measures to the most directly comparable GAAP measures. ​ 33 Table of Contents Alternative performance measures ​ The following is a reconciliation of revenue, operating expenses, operating income, net income attributable to JHG and diluted earnings per share to adjusted revenue, adjusted operating expenses, adjusted operating income, adjusted net income attributable to JHG and adjusted diluted earnings per share, respectively, for the years ended December 31, 2023 and 2022 (in millions, except per share and operating margin data): ​ ​ Year ended Year ended ​ December 31, December 31, ​ 2023 2022 Reconciliation of revenue to adjusted revenue Revenue $ 2,101.8 $ 2,203.6 Management fees (164.8 ) (193.2 ) Shareowner servicing fees (172.4 ) (185.2 ) Other revenue (118.7 ) (119.9 ) Adjusted revenue (1) $ 1,645.9 $ 1,705.3 Reconciliation of operating expenses to adjusted operating expenses Operating expenses $ 1,618.1 $ 1,713.8 Employee compensation and benefits (2) (5.8 ) (16.8 ) Long-term incentive plans (2) (1.2 ) (21.1 ) Distribution expenses (1) (455.9 ) (498.3 ) General, administrative and occupancy (2) (16.3 ) (9.5 ) Impairment of intangible assets (3) — (35.8 ) Depreciation and amortization (3) (1.7 ) (3.7 ) Adjusted operating expenses $ 1,137.2 $ 1,128.6 Adjusted operating income $ 508.7 $ 576.7 Operating margin (4) 23.0 % 22.2 % Adjusted operating margin (5) 30.9 % 33.8 % Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG Net income attributable to JHG $ 392.0 $ 372.4 Employee compensation and benefits (2) 5.8 16.8 Long-term incentive plans (2) 1.2 21.1 General, administrative and occupancy (2) 16.3 9.5 Impairment of intangible assets (3) — 35.8 Depreciation and amortization (3) 1.7 3.7 Investment gains (losses), net (6) 12.5 0.4 Other non-operating income, net (6) 28.6 0.3 Income tax provision (7) (22.9 ) (26.2 ) Adjusted net income attributable to JHG 435.2 433.8 Less: allocation of earnings to participating stock-based awards (12.4 ) (13.1 ) Adjusted net income attributable to JHG common shareholders $ 422.8 $ 420.7 Weighted-average common shares outstanding — diluted $ 160.5 $ 162.0 Diluted earnings per share (8) $ 2.37 $ 2.23 Adjusted diluted earnings per share (9) $ 2.63 $ 2.60 (1) We contract with third-party intermediaries to distribute and service certain of our investment products.
(2) FX reflects movements in AUM resulting from changes in foreign currency rates as non-USD-denominated AUM is translated into USD. (3) Reclassifications relate to reclassifications of existing funds from Quantitative Equities to Equities and from Equities to Alternatives.
(2) FX reflects movements in AUM resulting from changes in foreign currency rates as non-USD-denominated AUM is translated into USD. (3) Reclassifications relate to reclassifications of existing funds from Equities to Multi-Asset and Alternatives in 2023 and from Quantitative Equities to Equities in 2022. Disposal activity in 2022 relates to the sale of Intech.
The table below shows the movement in funded status that would result from certain sensitivity changes (in millions): ​ ​ ​ ​ ​ ​ ​ ​ Decrease in ​ ​ ​ funded status at ​ ​ December 31, 2022 Discount rate: -0.1% ​ $ 6.0 Inflation: +0.1% ​ $ 1.4 Life expectancy: +1 year at age 65 ​ $ 17.6 Market value of return seeking portfolio falls 25% ​ $ 14.9 ​ Income Taxes We operate in several countries, states and other taxing jurisdictions through various subsidiaries and branches, and must allocate income, expenses and earnings under the various laws and regulations of each of these taxing jurisdictions.
Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. 39 Table of Contents The table below shows the movement in funded status that would result from certain sensitivity changes (in millions): ​ ​ Hypothetical decrease ​ in funded status at ​ December 31, 2023 Discount rate: -0.1% $ 6.2 Inflation: +0.1% $ 1.5 Life expectancy: +1 year at age 65 $ 17.2 Market value of return seeking portfolio falls 25% $ 1.5 ​ Income Taxes We operate in several countries, states and other taxing jurisdictions through various subsidiaries and branches, and must allocate income, expenses and earnings under the various laws and regulations of each of these taxing jurisdictions.
GAAP basis. Adjusted non-GAAP figures are presented in the Non-GAAP Financial Measures section. Revenue for the year ended December 31, 2022, was $2,203.6 million, a decrease of $563.4 million, or (20%), compared to the year ended December 31, 2021.
GAAP basis. Adjusted non-GAAP figures are presented in the Non-GAAP Financial Measures section. Revenue for the year ended December 31, 2023, was $2,101.8 million, a decrease of $101.8 million, or (5%), compared to the year ended December 31, 2022.
As of December 31, 2022, we had operating and finance lease payment obligations of $98.3 million, with $24.7 million payable within 12 months. ​ Short-Term Liquidity Requirements Common Stock Purchases On May 3, 2022, the Board approved a new on-market share buyback program, pursuant to which we are authorized to repurchase up to $200.0 million of our common stock on the NYSE and CDIs on the ASX at any time prior to the date of our 2023 Annual General Meeting of Shareholders.
As of December 31, 2023, we had operating and finance lease payment obligations of $82.4 million, with $24.2 million payable within 12 months. ​ Short-Term Liquidity Requirements Common Stock Purchases On October 31, 2023, our Board of Directors approved the 2023 Corporate Buyback Program pursuant to which we are authorized to repurchase up to $150.0 million of our common stock on the NYSE at any time prior to the date of our 2024 Annual General Meeting of Shareholders.
Cash inflows from operating activities decreased during the year ended December 31, 2022, compared to the year ended December 31, 2021, due to lower revenue and net income, driven by significant declines in global markets during the year ended December 31, 2022. ​ Investing Activities ​ Cash (used for) provided by investing activities for the years ended December 31, 2022, 2021 and 2020, was as follows (in millions): 46 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2022 2021 2020 Sales (purchases) of investment securities, net ​ $ 44.6 ​ $ (177.1) ​ $ 134.8 Sales (purchases) of investment securities by consolidated seeded investment products, net ​ ​ (43.9) ​ ​ (97.4) ​ ​ (20.2) Purchases of property, equipment and software ​ (17.6) ​ (10.4) ​ (17.8) Cash received (paid) on settled seed capital hedges, net ​ ​ 75.9 ​ ​ (27.0) ​ ​ (11.6) Receipt of contingent consideration payments from sale of subsidiaries ​ ​ — ​ ​ 27.4 ​ ​ 5.4 Long-term note with Intech ​ ​ (15.9) ​ ​ — ​ ​ — Proceeds from sale of subsidiaries ​ ​ 14.9 ​ ​ — ​ ​ 38.4 Other ​ 0.5 ​ 1.2 ​ 0.4 Cash provided by (used for) investing activities ​ $ 58.5 ​ $ (283.3) ​ $ 129.4 ​ We periodically add new investment strategies to our investment product offerings by providing the initial cash investment, or seeding, in a product.
Investing Activities ​ Cash provided by (used for) investing activities for the years ended December 31, 2023, 2022 and 2021, was as follows (in millions): ​ Year ended December 31, ​ 2023 2022 2021 Sales (purchases) of investments, net $ (59.7 ) $ 44.6 $ (177.1 ) Purchases of investments by consolidated seeded investment products, net (224.9 ) (43.9 ) (97.4 ) Purchases of property, equipment and software (10.8 ) (17.6 ) (10.4 ) Cash received (paid) on settled seed capital hedges, net (37.5 ) 75.9 (27.0 ) Receipt of contingent consideration payments from sale of subsidiaries 0.2 — 27.4 Long-term note with Intech 3.1 (15.9 ) — Proceeds from sale of Intech — 14.9 — Dividends received from equity method investments 0.7 0.5 1.2 Cash provided by (used for) investing activities $ (328.9 ) $ 58.5 $ (283.3 ) ​ We periodically add new investment strategies to our investment product offerings by providing the initial cash investment, or seeding, in a product.
GAAP requires management to make estimates and 49 Table of Contents assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. We continually evaluate the accounting policies and estimates used to prepare the consolidated financial statements.
Dividends declared and paid during the year ended December 31, 2022, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend ​ Date ​ Dividends paid ​ Date per share declared ​ (in US$ millions) paid $ 0.38 ​ February 2, 2022 $ 64.3 ​ February 28, 2022 $ 0.39 ​ May 3, 2022 ​ $ 65.5 ​ May 31, 2022 $ 0.39 ​ July 27, 2022 ​ $ 64.7 ​ August 24, 2022 $ 0.39 ​ October 26, 2022 ​ $ 64.9 ​ November 23, 2022 ​ On February 1, 2023, our Board declared a cash dividend of $0.39 per share.
Dividends declared and paid during the year ended December 31, 2023, were as follows: ​ Dividend ​ Date Dividends paid ​ Date per share declared (in US$ millions) paid $ 0.39 ​ February 1, 2023 $ 64.7 ​ February 28, 2023 $ 0.39 ​ May 2, 2023 $ 64.6 ​ May 31, 2023 $ 0.39 ​ August 1, 2023 $ 64.7 ​ August 30, 2023 $ 0.39 ​ October 31, 2023 $ 64.7 ​ November 30, 2023 ​ On January 31, 2024, our Board of Directors declared a cash dividend of $0.39 per share.
Key drivers of the decrease include the following: ​ ● A decrease of $86.1 million in intangible asset and goodwill impairment charges. ​ ● A decrease of $81.8 million in employee compensation and benefits due to lower variable compensation charges. ​ ● A decrease of $55.8 million in distribution expenses primarily due to lower average AUM. ​ Operating income for the year ended December 31, 2022, was $489.8 million, a decrease of $331.1 million, or (40%), compared to the year ended December 31, 2021.
Key drivers of the decrease include the following: ● A decrease of $42.4 million in distribution expenses primarily due to lower average AUM; ​ ● A decrease of $35.8 million in intangible asset impairment charges; and ​ ● A decrease of $18.2 million in employee compensation and benefits due to lower variable compensation charges. ​ Operating income for the year ended December 31, 2023, was $483.7 million, a decrease of $6.1 million, or (1%), compared to the year ended December 31, 2022.
Such contracts are recognized at the net present value of the expected future cash flows arising from the contracts at the date of acquisition. For segregated mandate contracts, the intangible asset is amortized on a straight-line basis over the expected life of the contracts. Adjustments also include impairment charges of certain mutual fund investment management contracts, client relationships and trademarks.
Such contracts are recognized at the net present value of the expected future cash flows arising from the contracts at the date of acquisition. For segregated mandate contracts, the intangible asset is amortized on a straight-line basis over the expected life of the contracts.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S.
Off-Balance Sheet Arrangements As of December 31, 2023, we had no off-balance sheet arrangements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S.
The actuarial valuation involves making a number of assumptions, including those related to the discount rate, the expected rate of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.
The actuarial valuation involves making a number of assumptions, including those related to the discount rate, the expected rate of return on assets, future salary increases, mortality rates and future pension increases.
The 2021 adjustment includes non-cash deferred tax expense resulting from the revaluation of certain UK deferred tax assets and liabilities due to the enactment of the Finance Act 2021, which increased the UK corporation tax rate from 19% to 25% beginning in April 2023. ​ (8) Diluted earnings per share is net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding. ​ (9) Adjusted diluted earnings per share is adjusted net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding. ​ Liquidity and Capital Resources Our capital structure, together with available cash balances, cash flows generated from operations, and further capital and credit market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating and other obligations as they fall due and anticipated future capital requirements.
As a result, the U.S. deferred tax assets and liabilities were revalued from 23.9% to 23.5%, creating a non-cash deferred tax benefit of $8.8 million. ​ (8) Diluted earnings per share is net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding. ​ (9) Adjusted diluted earnings per share is adjusted net income attributable to JHG common shareholders divided by weighted-average diluted common shares outstanding. ​ Liquidity and Capital Resources Our capital structure, together with available cash balances, cash flows generated from operations, and further capital and credit market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating and other obligations as they fall due and anticipated future capital requirements.
The decrease is primarily due to a $121.9 million impairment of certain indefinite-lived intangible assets and trademarks recognized during the year ended December 31, 2021, partially offset by a $35.8 million impairment of certain mutual fund investment management agreements, client relationships and trademarks recognized during the year ended December 31, 2022. ​ Goodwill and intangible asset impairment charges decreased by $424.6 million during the year ended December 31, 2021, compared to the year ended December 31, 2020.
The decrease is due to no impairment charges being recognized during 2023, compared to a $35.8 million impairment of certain mutual fund investment management agreements, client relationships and trademarks recognized during the year ended December 31, 2022. ​ Intangible asset impairment charges decreased by $86.1 million during the year ended December 31, 2022, compared to the year ended December 31, 2021.
The plan assets are recognized at fair value. The funded status of the defined benefit pension plan (“plan”), being the resulting surplus or deficit of defined benefit assets less liabilities, is recognized in the Consolidated Balance Sheets, net of any taxes that would be deducted at source.
The funded status of the defined benefit pension plan (“plan”), being the resulting surplus or deficit of defined benefit assets less liabilities, is recognized in the Consolidated Balance Sheets, net of any taxes that would be deducted at source. Actuarial gains and losses arise as a result of differences between actual experience and actuarial assumptions.
There were no significant items driving the fluctuations in investment administration expenses year over year. ​ Marketing Marketing expenses decreased $4.6 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a $6.2 million decrease in advertising campaigns, partially offset by a $1.9 million increase in sponsored events. ​ Marketing expenses increased $12.1 million during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to an increase in marketing events, sponsorships and advertising campaigns during the year ended December 31, 2021. ​ General, administrative and occupancy General, administrative and occupancy expenses increased $7.5 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to increases of $9.6 million in information technology costs, primarily driven by an increased investment in non-capitalizable hardware and software, and $8.1 million in travel and entertainment expenditures.
These increases were partially offset by a $4.6 million reduction in rent-related expenses and a $3.2 million decrease in recruitment fees. ​ General, administrative and occupancy expenses increased $7.5 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to increases of $9.6 million in information technology costs, primarily driven by an increased investment in non-capitalizable hardware and software, and $8.1 million in travel and entertainment expenditures.
The combined capital requirement is £204.2 million ($245.6 million), resulting in £229.5 million ($276.1 million) of capital above the requirement as of December 31, 2022, based upon internal calculations and taking into account the effect of foreseeable dividends. Capital requirements in other jurisdictions are not significant in aggregate.
The combined capital requirement is £136.0 million ($173.4 million), resulting in £322.4 million ($411.0 million) of capital above the requirement as of December 31, 2023, based upon internal calculations and taking into account the effect of foreseeable dividends. Capital requirements in other jurisdictions are not significant in aggregate.
Performance fees by product type consisted of the following for the years ended December 31, 2022, 2021 and 2020 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 vs. ​ 2021 vs. ​ ​ 2022 2021 2020 2021 2020 Performance fees (in millions): ​ ​ ​ ​ ​ SICAVs ​ $ 2.0 ​ $ 63.7 ​ $ 17.6 (97) % n/m * UK OEICs and unit trusts ​ 0.1 ​ 19.2 ​ 10.5 (99) % 83 % Absolute return funds and other funds ​ 33.5 ​ 14.5 ​ 11.0 n/m * 32 % Segregated mandates ​ 10.0 ​ 6.9 ​ 72.1 45 % (90) % Investment trusts ​ ​ 6.7 ​ ​ 14.3 ​ ​ — ​ (53) % n/m * U.S. mutual funds ​ (63.0) ​ (15.9) ​ (13.1) n/m * 21 % Total performance fees ​ $ (10.7) ​ $ 102.7 ​ $ 98.1 n/m * 5 % * n/m - Not meaningful. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2022, performance fees decreased $113.4 million compared to the year ended December 31, 2021, primarily due to a decline in performance fees from SICAVs and UK OEICs and unit trusts due to the relative performance of certain funds being below the established high-water mark (“HWM”).
Performance fees by product type consisted of the following for the years ended December 31, 2023, 2022 and 2021: ​ Year ended December 31, 2023 vs. 2022 vs. ​ 2023 2022 2021 2022 2021 Performance fees (in millions): ​ SICAVs $ 2.1 $ 2.0 $ 63.7 5 % (97 )% UK OEICs and unit trusts — 0.1 19.2 (100 )% (99 )% Absolute return funds and other funds 56.9 33.5 14.5 70 % n/m * Segregated mandates 3.1 10.0 6.9 (69 )% 45 % Investment trusts 9.1 6.7 14.3 36 % (53 )% U.S. mutual funds (66.1 ) (63.0 ) (15.9 ) (5 )% n/m * Total performance fees $ 5.1 $ (10.7 ) $ 102.7 n/m * n/m * * n/m - Not meaningful. ​ For the year ended December 31, 2023, performance fees increased $15.8 million compared to the year ended December 31, 2022, due to an improvement in the performance of absolute return funds and other funds primarily driven by performance fees generated from a certain fund.
However, information is reported to the chief operating decision-maker, our Chief Executive Officer (“CEO”), on an aggregated basis. Strategic and financial management decisions are determined centrally by our CEO and, on this basis, we operate as a single-segment investment management business. Revenue Revenue primarily consists of management fees and performance fees.
Strategic and financial management decisions are determined centrally by our CEO and, on this basis, we operate as a single-segment investment management business. Revenue Revenue primarily consists of management fees and performance fees.
These increases were partially offset by a decrease of $10.8 million in project charges driven by more internal labor costs capitalized during the year ended December 31, 2021. ​ 39 Table of Contents Long-term incentive plans Long-term incentive plan expenses decreased by $0.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a $38.9 million decrease driven by market depreciation related to mutual fund share awards and certain long-term incentive awards, and favorable foreign currency translation of $7.4 million.
This decline was partially offset by an increase of $27.6 million driven by market appreciation of mutual fund share awards and certain long-term incentive awards. ​ Long-term incentive plan expenses decreased $0.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a $38.9 million decrease driven by market depreciation related to mutual fund share awards and certain long-term incentive awards, and favorable foreign currency translation of $7.4 million.
These increases were partially offset by a decrease of $3.0 million due to the roll-off of vested awards exceeding new awards during the year ended December 31, 2021. ​ Distribution expenses Distribution expenses are paid to financial intermediaries for the distribution of our retail investment products and are typically calculated based on the amount of the intermediary-sourced AUM.
These decreases were partially offset by a $47.7 million increase for the roll-on of new awards exceeding the roll-off of vested awards and the acceleration of expense related to departed employees. ​ Distribution expenses Distribution expenses are paid to financial intermediaries for the distribution of our retail investment products and are typically calculated based on the amount of the intermediary-sourced AUM.
These increases were partially offset by a $65.2 million decrease in performance fees from segregated mandates during the year ended December 31, 2021, compared to the year ended December 31, 2020. ​ 37 Table of Contents The following table outlines performance fees by product type and includes information on fees earned, number of funds generating performance fees, AUM generating performance fees, number of funds eligible to earn performance fees, AUM with an uncrystallized performance fee, performance fee participation rate, performance fee frequency and performance fee methodology (dollars in millions, except where noted): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Absolute ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UK OEICs and ​ Return Funds ​ Segregated ​ Investment ​ U.S.
These decreases were partially offset by an improvement in absolute return funds and other funds primarily due to performance fees generated from the Janus Henderson Biotech Innovation Fund. ​ 29 Table of Contents The following table outlines performance fees by product type and includes information on fees earned, number of funds generating performance fees, AUM generating performance fees, number of funds eligible to earn performance fees, AUM with an uncrystallized performance fee, performance fee participation rate, performance fee frequency and performance fee methodology (dollars in millions, except where noted): Absolute UK OEICs Return Funds and and Segregated Investment U.S.
The adjustment for the year ended December 31, 2021, includes rent expense for subleased office space. JHG management believes these costs do not represent our ongoing operations. ​ (3) Investment management contracts have been identified as a separately identifiable intangible asset arising on the acquisition of subsidiaries and businesses.
Adjustments for the year ended December 31, 2023, also include a $9.3 million charge related to a separately managed account trade error. JHG management believes these costs do not represent our ongoing operations. ​ (3) Investment management contracts have been identified as a separately identifiable intangible asset arising on the acquisition of subsidiaries and businesses.
For more information, refer to Part I, Item 1A, Risk Factors. ​ The Credit Facility may be used for general corporate purposes and bears interest on borrowings outstanding at the relevant interbank offer rate plus a spread. ​ The Credit Facility contains a financial covenant with respect to leverage. The financing leverage ratio cannot exceed 3.00x EBITDA.
The Credit Facility may be used for general corporate purposes and bears interest on borrowings outstanding at the relevant interbank offer rate plus a spread. The Credit Facility contains a financial covenant related to our long-term credit rating and financing leverage. If our long-term credit rating fall below a predefined threshold, our financing leverage ratio cannot exceed 3.00x EBITDA.
Other revenue decreased $23.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a decline in average AUM. ​ Other revenue increased $17.0 million during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to increases of $19.7 million in 12b-1 distribution fees and other servicing fees, and $7.5 million in general administration charges driven by an improvement in average AUM.
Shareowner servicing fees decreased by $10.7 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, and by $36.7 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a decline in average mutual fund AUM. ​ Other revenue Other revenue is primarily composed of 12b-1 distribution fees, general administration charges and other fee revenue.
Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that we are valuing and the selected benchmark. Any variation in the assumptions used to approximate fair value could have a material adverse effect on our Consolidated Balance Sheets and results of operations.
Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that we are valuing and the selected benchmark.
At the latest practicable date before the date of this report, we were in compliance with all covenants, and there were no borrowings under the Credit Facility. ​ Regulatory Capital We are subject to regulatory oversight by the SEC, FINRA, the CFTC, the FCA and other international regulatory bodies.
At the latest practicable date before the date of this report, we were in compliance with all covenants, and there were no outstanding borrowings under the Credit Facility.
Our operating margin was 22.2% in 2022 compared to 29.7% in 2021. Net income attributable to JHG for the year ended December 31, 2022, was $372.4 million, a decrease of $247.6 million, or (40%), compared to the year ended December 31, 2021.
Our operating margin was 23.0% in 2023 compared to 22.2% in 2022. Net income attributable to JHG for the year ended December 31, 2023, was $392.0 million, an increase of $19.6 million, or 5%, compared to the year ended December 31, 2022.
JHG management believes these non-cash and acquisition-related costs do not represent our ongoing operations. ​ (4) Operating margin is operating income divided by revenue. ​ (5) Adjusted operating margin is adjusted operating income divided by adjusted revenue. ​ (6) Adjustments for the year ended December 31, 2022, primarily relate to accumulated foreign currency translation expense related to liquidated JHG entities, rental income from subleased office and a one-time charge related to the sale of Intech.
Adjustments for the year ended December 31, 2022, primarily relate to accumulated foreign currency translation expense related to liquidated JHG entities, rental income from subleased office space and a one-time charge related to the sale of Intech.
These increases were partially offset by a loss of $9.1 million related to the sale of Intech; a $7.7 million contingent consideration adjustment in relation to the sale of Geneva, which was recognized during the year ended December 31, 2021; a $3.1 million fair value adjustment to the Intech option agreement; and a $2.4 million decrease in rental income from subleased office. ​ Other non-operating income, net declined $21.8 million during the year ended December 31, 2021, compared to the year ended December 31, 2020.
These increases were partially offset by a loss of $9.1 million related to the sale of Intech; a $7.7 million contingent consideration adjustment in relation to the sale of Geneva, which was recognized during the year ended December 31, 2021; a $3.1 million fair value adjustment to the Intech option agreement; and a $2.4 million decrease in rental income from subleased office. ​ Income Tax Provision ​ Our effective tax rates for the years ended December 31, 2023, 2022 and 2021, were as follows: Year ended December 31, 2023 2022 2021 Effective tax rate 19.0 % 26.9 % 25.1 % The effective tax rate for the year ended December 31, 2023, compared to the same period in 2022, was impacted by the disallowed noncontrolling interest income from a certain seeded investment product and a reduction in the state income tax rate.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview We are an independent global asset manager, specializing in active investment across all major asset classes.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview We are an independent global asset manager, specializing in active investment across all major asset classes. We actively manage a broad range of investment products for institutional and retail investors across four capabilities: Equities, Fixed Income, Multi-Asset and Alternatives.
Accounting for Goodwill and Intangible Assets The recognition and measurement of goodwill and intangible assets require significant management estimates and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment.
Any variation in the assumptions used to approximate fair value could have a material adverse effect on our Consolidated Balance Sheets and results of operations. 38 Table of Contents Accounting for Goodwill and Intangible Assets The recognition and measurement of goodwill and intangible assets require significant management estimates and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment.
Movements in investment gains (losses), net and net loss (income) attributable to noncontrolling interests are primarily due to market movements in relation to our seeded investment products and derivative instruments and the consolidation or deconsolidation of third-party ownership interests in seeded investment products. ​ Investment Performance of Assets Under Management ​ The following table is a summary of our investment performance as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of AUM outperforming benchmark 1 year 3 years 5 years 10 years Equities 58 % 54 % 57 % 64 % Fixed Income 18 % 78 % 89 % 90 % Multi-Asset 5 % 96 % 96 % 99 % Alternatives 34 % 100 % 100 % 100 % Total 41 % 67 % 70 % 75 % ​ Assets Under Management Our AUM as of December 31, 2022, was $287.3 billion, a decrease of $145.0 billion, or (34%), from December 31, 2021, driven primarily by unfavorable market movements of $68.3 billion and $28.3 billion due to the disposition of Intech Investment Management LLC (“Intech”).
Movements in investment gains (losses), net and net loss (income) attributable to noncontrolling interests are primarily due to market movements in relation to our seeded investment products and derivative instruments and the consolidation or deconsolidation of third-party ownership interests in seeded investment products. ​ Investment Performance of Assets Under Management ​ The following table is a summary of our investment performance as of December 31, 2023: ​ Percentage of AUM outperforming benchmark 1 year 3 years 5 years 10 years Equities 42 % 48 % 57 % 60 % Fixed Income 79 % 66 % 88 % 91 % Multi-Asset 8 % 96 % 97 % 97 % Alternatives 57 % 97 % 100 % 100 % Total 44 % 60 % 69 % 71 % ​ 25 Table of Contents Assets Under Management Our AUM as of December 31, 2023, was $334.9 billion, an increase of $47.6 billion, or 17%, from December 31, 2022, driven primarily by positive market movements of $45.1 billion. ​ Our non-USD AUM is primarily denominated in GBP, EUR and AUD.
Where cross investment occurs, assets and flows are identified and the duplication is removed. ​ Results of Operations Foreign Currency Translation ​ Foreign currency translation impacts our Results of Operations. Revenue is impacted by foreign currency translation, but the impact is generally determined by the primary currency of the individual funds.
Results of Operations Foreign Currency Translation ​ Foreign currency translation impacts our Results of Operations. Revenue is impacted by foreign currency translation, but the impact is generally determined by the primary currency of the individual funds. Expenses are also impacted by foreign currency translation, primarily driven by the translation of GBP to USD.
In addition to the aforementioned factors affecting revenue and operating expenses, key drivers of the decrease include the following: ​ ● A decrease of $104.4 million in our provision for income taxes, primarily due to a decrease in pre-tax income. ​ ● An unfavorable movement of $114.1 million in investment gains (losses), net, partially offset by an improvement of $90.3 million in net loss (income) attributable to noncontrolling interests in 2022 compared to 2021.
In addition to the aforementioned factors affecting revenue and operating expenses, key drivers of the increase include the following: ● A favorable movement of $156.7 million in investment gains (losses), net, partially offset by a decline of $132.6 million in net loss (income) attributable to noncontrolling interests in 2023 compared to 2022.
These increases were partially offset by a $9.5 million decrease in exchange-traded notes (“ETNs”) licensing fees due to the delisting and the ongoing liquidation of VelocityShares ETNs. ​ Operating Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 vs. ​ 2021 vs. ​ 2022 2021 2020 2021 2020 Operating expenses (in millions): ​ ​ ​ ​ Employee compensation and benefits ​ $ 611.5 ​ $ 693.3 ​ $ 618.6 (12) % 12 % Long-term incentive plans ​ 180.7 ​ 181.0 ​ 170.1 (0) % 6 % Distribution expenses ​ 498.3 ​ 554.1 ​ 461.1 (10) % 20 % Investment administration ​ 49.4 ​ 51.6 ​ 50.0 (4) % 3 % Marketing ​ 27.1 ​ 31.7 ​ 19.6 (15) % 62 % General, administrative and occupancy ​ 279.3 ​ 271.8 ​ 255.2 3 % 7 % Impairment of goodwill and intangible assets ​ ​ 35.8 ​ ​ 121.9 ​ ​ 546.5 ​ (71) % (78) % Depreciation and amortization ​ 31.7 ​ 40.7 ​ 49.2 (22) % (17) % Total operating expenses ​ $ 1,713.8 ​ $ 1,946.1 ​ $ 2,170.3 (12) % (10) % ​ Employee compensation and benefits Employee compensation and benefits decreased by $81.8 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily driven by a decrease of $80.9 million in variable compensation, mainly due to a lower annual bonus pool and other variable compensation, favorable foreign currency translation of $24.8 million and a $9.2 million decrease in temporary staffing charges mainly due to the conversion of temporary staff to full-time employees.
Other revenue decreased by $7.6 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, and by $23.3 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a decline in average AUM. ​ Operating Expenses ​ Year ended December 31, 2023 vs. 2022 vs. 2023 2022 2021 2022 2021 Operating expenses (in millions): Employee compensation and benefits $ 593.3 $ 611.5 $ 693.3 (3 )% (12 )% Long-term incentive plans 167.4 180.7 181.0 (7 )% (0 )% Distribution expenses 455.9 498.3 554.1 (9 )% (10 )% Investment administration 47.4 49.4 51.6 (4 )% (4 )% Marketing 36.6 27.1 31.7 35 % (15 )% General, administrative and occupancy 294.6 279.3 271.8 5 % 3 % Impairment of intangible assets — 35.8 121.9 (100 )% (71 )% Depreciation and amortization 22.9 31.7 40.7 (28 )% (22 )% Total operating expenses $ 1,618.1 $ 1,713.8 $ 1,946.1 (6 )% (12 )% Employee compensation and benefits Employee compensation and benefits decreased $18.2 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily driven by a decrease of $18.1 million in variable compensation, primarily due to lower profitability, and a $13.7 million decline in fixed compensation costs due to lower average headcount.
Certain fund and client contracts allow for negative performance fees where there is underperformance against the relevant index. 2022 SUMMARY 2022 Highlights ● Solid long-term investment performance, with 41%, 67%, 70% and 75% of our AUM outperforming benchmarks on a one-, three-, five- and 10-year basis, respectively, as of December 31, 2022. ​ ● AUM decreased to $287.3 billion, down (34%) from the year ended December 31, 2021, due to challenged global markets, net outflows, the disposition of Intech and U.S. dollar appreciation.
Certain fund contracts allow for negative performance fees where there is underperformance against the relevant index. 24 Table of Contents 2023 SUMMARY 2023 Highlights ● Solid long-term investment performance, with 60%, 69% and 71% of our AUM outperforming benchmarks on a three-, five- and 10-year basis, respectively, as of December 31, 2023. ​ ● AUM increased to $334.9 billion, up 17% from the year ended December 31, 2022, primarily due to positive market performance. ​ ● Net outflows for the year ended December 31, 2023, were $0.7 billion compared to $30.8 billion of net outflows, excluding Intech, for the year ended December 31, 2022.
Movements in investment gains (losses), net are primarily due to fair value adjustments in relation to our seeded investment products, deferred equity plan and consolidation of third-party ownership interests in seeded investment products. ​ Gains and losses attributable to third-party ownership interests in seeded investment products are noncontrolling interests and are not included in net income attributable to JHG. ​ Other non-operating income, net Other non-operating income, net improved $2.7 million during the year ended December 31, 2022, compared to the year ended December 31, 2021.
In addition, a $12.5 million charge due to a correction of an error of previously recognized earnings associated with an equity method investment impacted investment gains (losses), net for the year ended December 31, 2023. ​Gains and losses attributable to third-party ownership interests in seeded investment products are noncontrolling interests and are not included in net income attributable to JHG. ​ Other non-operating income, net Other non-operating income, net improved $1.1 million during the year ended December 31, 2023, compared to the year ended December 31, 2022.
Movements in investment gains (losses), net are primarily due to consolidation of third-party ownership interests in seeded investment products and fair value adjustments in relation to our seeded investment products. ​ Investment gains (losses), net moved unfavorably by $56.7 million during the year ended December 31, 2021, compared to the year ended December 31, 2020.
Movements in investment gains (losses), net are primarily due to consolidation and deconsolidation of third-party ownership interests in seeded investment products and market adjustments in relation to our seeded investment products.
For more information, refer to Note 8 — Goodwill and Intangible Assets, in Part II, Item 8, Financial Statements and Supplementary Data. ​ Depreciation and amortization ​ Depreciation and amortization expenses decreased $9.0 million during the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to a $3.7 million reduction in the amortization of intangible assets resulting from the sale of Intech and a $3.0 million decrease in the amortization of prepaid commissions. ​ Depreciation and amortization expenses decreased $8.5 million during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to a decrease in the amortization of intangible assets resulting from the sale of Geneva and the impairment of certain client relationships recognized during the year ended December 31, 2020, as well as a $3.5 million decrease in the depreciation of internally developed software during the year ended December 31, 2021. ​ Non-Operating Income and Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 vs. ​ 2021 vs. ​ 2022 2021 2020 2021 2020 Non-operating income and expenses (in millions): ​ ​ ​ ​ Interest expense ​ $ (12.6) ​ $ (12.8) ​ $ (12.9) 2 % 1 % Investment gains (losses), net ​ (113.3) ​ 0.8 ​ 57.5 n/m * 99 % Other non-operating income, net ​ 11.5 ​ 8.8 ​ 30.6 31 % (71) % Income tax provision ​ (100.9) ​ (205.3) ​ (52.2) (51) % n/m * * n/m - Not meaningful. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment gains (losses), net The components of investment gains (losses), net for the years ended December 31, 2022, 2021 and 2020, were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 2020 Investment gains (losses), net (in millions): ​ ​ ​ Seeded investment products and hedges, net ​ $ (15.2) ​ $ 2.0 ​ $ 26.6 Third-party ownership interests in seeded investment products ​ ​ (97.9) ​ ​ (8.0) ​ ​ 20.1 Long Tail Alpha investment ​ 2.9 ​ ​ 3.0 ​ ​ 6.0 Deferred equity plan ​ ​ (0.9) ​ ​ 2.8 ​ ​ 2.1 Other ​ (2.2) ​ 1.0 ​ 2.7 Investment gains (losses), net ​ $ (113.3) ​ $ 0.8 ​ $ 57.5 ​ 41 Table of Contents Investment gains (losses), net moved unfavorably by $114.1 million during the year ended December 31, 2022, compared to the year ended December 31, 2021.
The anticipated growth in our non-compensation expense is due to planned investments supporting our strategic initiatives, as well as anticipated inflation and amortization of certain capitalized costs. ​ Non-Operating Income and Expenses Year ended December 31, 2023 vs. 2022 vs. 2023 2022 2021 2022 2021 Non-operating income and expenses (in millions): Interest expense $ (12.7 ) $ (12.6 ) $ (12.8 ) (1 )% 2 % Investment gains (losses), net 43.4 (113.3 ) 0.8 n/m * n/m * Other non-operating income, net 12.6 11.5 8.8 10 % 31 % Income tax provision (100.3 ) (100.9 ) (205.3 ) 1 % 51 % * n/m - Not meaningful. ​ Investment gains (losses), net The components of investment gains (losses), net for the years ended December 31, 2023, 2022 and 2021, were as follows: Year ended December 31, 2023 2022 2021 Investment gains (losses), net (in millions): Seeded investment products and hedges, net $ 20.3 $ (15.2 ) $ 2.0 Third-party ownership interests in seeded investment products 34.7 (97.9 ) (8.0 ) Equity method investments (13.5 ) 2.9 3.0 Other 1.9 (3.1 ) 3.8 Investment gains (losses), net $ 43.4 $ (113.3 ) $ 0.8 32 Table of Contents Investment gains (losses), net moved favorably by $156.7 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, and unfavorably by $114.1 million during the year ended December 31, 2022, compared to the year ended December 31, 2021.
Some of the inputs used in the annual DCF model required significant management judgment, including the discount rate, terminal growth rate, forecasted financial results and market returns. ​ Retirement Benefit Plans We provide certain employees with retirement benefits through defined benefit plans. 51 Table of Contents The defined benefit obligation is determined annually by independent qualified actuaries using the projected unit credit method and is measured at the present value of the estimated future cash outflows using a discount rate based on AA-rated corporate bond yields of appropriate duration.
The defined benefit obligation is determined annually by independent qualified actuaries using the projected unit credit method and is measured at the present value of the estimated future cash outflows using a discount rate based on AA-rated corporate bond yields of appropriate duration. The plan assets are recognized at fair value.

… 78 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−2 removed3 unchanged
Biggest changeThe following is a summary of the effect that a hypothetical 10% increase or decrease in market prices would have on our investment securities subject to market price fluctuations as of December 31, 2022 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ Fair value ​ ​ ​ ​ ​ assuming a 10% ​ assuming a 10% ​ Fair value increase decrease Investment securities: ​ ​ Seeded investment products (including VIEs) ​ $ 574.9 ​ $ 632.4 ​ $ 517.4 Investments related to deferred compensation plans ​ ​ 10.7 ​ ​ 11.8 ​ ​ 9.6 Other ​ ​ 10.3 ​ ​ 11.3 ​ ​ 9.3 Total investment securities ​ $ 595.9 ​ $ 655.5 ​ $ 536.3 ​ Certain investment securities include debt securities that contribute to the achievement of defined investment objectives.
Biggest changeThe following is a summary of the effect that a hypothetical 10% increase or decrease in market prices would have on our current investments subject to market price fluctuations as of December 31, 2023 (in millions): ​ ​ Fair value Fair value ​ ​ assuming a 10% assuming a 10% ​ Fair value increase decrease Current investments: Seeded investment products (including VIEs) $ 696.5 $ 766.2 $ 626.9 Investments related to deferred compensation plans 12.0 13.2 10.8 Other investments 8.1 8.9 7.3 Total current investments $ 716.6 $ 788.3 $ 644.9 ​ Certain investments include debt securities that contribute to the achievement of defined investment objectives.
Although fluctuations in the financial markets have a direct effect on our operating results, AUM may outperform or underperform the financial markets. As such, quantifying the impact of correlation between AUM and our operating results may be misleading. Performance Fees Performance fee revenue is derived from a number of funds and clients.
Although fluctuations in the financial markets have a direct effect on our operating results, AUM may outperform or underperform the financial markets. As such, quantifying the impact of correlation between AUM and our operating results would be misleading. Performance Fees Performance fee revenue is derived from a number of funds and clients.
Changes in fair value of the derivatives are recognized in other non-operating income, net on our Consolidated Statements of Comprehensive Income. ​ Foreign Currency Exchange Sensitivity Foreign currency risk is the risk that we will sustain losses through adverse movements in foreign currency exchange rates, where we transact in currencies that are different from our functional currency.
Changes in fair value of the derivatives are recognized in other non-operating income, net in our Consolidated Statements of Comprehensive Income. ​ Foreign Currency Exchange Risk Foreign currency risk is the risk that we will sustain losses through adverse movements in foreign currency exchange rates, where we transact in currencies that are different from our functional currency.
Derivative Instruments Used in Foreign Currency Hedging Program ​ We maintain a balance sheet foreign currency hedging program to take reasonable measures to minimize the income statement effects of foreign currency remeasurement of monetary balance sheet accounts.
Derivative Instruments — Foreign Currency Hedging Program ​ We maintain a foreign currency hedging program to take reasonable measures to minimize the income statement effects of foreign currency remeasurement of monetary balance sheet accounts.
Our performance fees depend on internal performance and market trends, and are, therefore, subject to volatility year-over-year. We recognized performance fees of $(10.7) million, $102.7 million and $98.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Our performance fees depend on internal performance and market trends, and are, therefore, subject to volatility year-over-year. We recognized performance fees of $5.1 million, $(10.7) million, and $102.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Certain U.S. mutual funds contracts allow for negative performance fees where there is underperformance against the relevant index. In many cases, performance fees are subject to a hurdle rate. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually).
Certain U.S. mutual funds contracts allow for negative performance fees where there is underperformance against the relevant index. In many cases, performance fees are subject to an HWM. Performance fees are recognized at the end of the contractual period (typically monthly, quarterly or annually).
We were party to the following derivative instruments as of December 31, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional value ​ December 31, 2022 ​ December 31, 2021 Futures ​ $ 196.8 ​ $ 368.7 Credit default swaps ​ $ 115.1 ​ $ 207.2 Total return swaps ​ $ 37.2 ​ $ 55.0 Foreign currency forward contracts and swaps ​ $ 131.7 ​ $ 415.6 ​ Changes in fair value of derivative instruments are recognized during the period in which they occur in investment gains (losses), net in the Consolidated Statements of Comprehensive Income.
We were party to the following derivative instruments as of December 31, 2023 and 2022 (in millions): ​ ​ Notional value ​ December 31, 2023 December 31, 2022 Futures $ 1,018.0 $ 196.8 Credit default swaps $ 199.7 $ 115.1 Total return swaps $ 51.8 $ 37.2 Foreign currency forward contracts and swaps $ 176.2 $ 131.7 ​ Changes in fair value of derivative instruments are recognized during the period in which they occur in investment gains (losses), net in the Consolidated Statements of Comprehensive Income.
The program utilizes foreign currency forward contracts and swaps to achieve its objectives, and it is considered an economic hedge for accounting purposes. ​ The notional value of the foreign currency forward contracts and swaps was $74.7 million and $171.4 million at December 31, 2022 and 2021, respectively.
The program uses foreign currency forward contracts and swaps to achieve its objectives, and it is considered an economic hedge for accounting purposes. ​ The notional value of the foreign currency forward contracts and swaps was $65.3 million and $74.7 million at December 31, 2023 and 2022, respectively.
As our functional currency is USD, we are exposed to foreign currency risk through our exposure to non-USD income, expenses, assets and liabilities of our overseas subsidiaries, as well as net assets and liabilities denominated in a currency other than USD. We manage our currency exposure by monitoring foreign currency positions.
Our foreign currency exposure is primarily associated with GBP, AUD and EUR. As our functional currency is USD, we are exposed to foreign currency risk through our exposure to non-USD income, expenses, assets and liabilities of our overseas subsidiaries, as well as net assets and liabilities denominated in a currency other than USD.
At December 31, 2022 and 2021, our AUM subject to performance fees totaled $64.1 billion and $99.4 billion, respectively. ​ Investment Securities ​ At December 31, 2022, we were exposed to market price risk as a result of investment securities on our Consolidated Balance Sheets.
At December 31, 2023 and 2022, our AUM subject to performance fees totaled $94.5 billion and $74.7 billion, respectively. ​ 40 Table of Contents Investments ​ At December 31, 2023, we were exposed to market price risk as a result of investments in our Consolidated Balance Sheets.
We seek to naturally offset exposures where possible and actively hedge certain exposures on a case-by-case basis. Our foreign currency exposure is primarily associated with GBP, AUD and EUR.
We manage our currency exposure by monitoring foreign currency positions. We seek to naturally offset exposures where possible and actively hedge certain exposures on a case-by-case basis. 41 Table of Contents
Debt securities are exposed to interest rate risk and credit risk. Movement in interest rates would be reflected in the value of the securities; refer to the quantitative analysis above. Derivative Instruments Derivative Instruments Used to Hedge Seeded Investment Products We maintain an economic hedge program that uses derivative instruments to mitigate market volatility of certain seeded investments.
Debt securities are exposed to interest rate risk and credit risk. Movement in interest rates would be reflected in the value of the securities; refer to the quantitative analysis above.
Removed
Market fluctuations are mitigated using derivative instruments, including futures, credit default swaps, 53 Table of Contents index swaps and total return swaps. We also operate a rolling program of foreign currency forward contracts to mitigate the non-functional currency exposures arising from certain seed capital investments.
Added
Derivative Instruments Derivative Instruments Used to Hedge Seeded Investment Products We maintain an economic hedge program that uses derivative instruments to mitigate against market exposure of certain seeded investments by using index and commodity futures (“futures”), credit default swaps and total return swaps.
Removed
A 10% change in foreign currency exchange rates on all hedged and unhedged financial assets and liabilities denominated in GBP, AUD and EUR would impact our accumulated other comprehensive loss and net income by approximately $172.7 million and $3.0 million, respectively, as of December 31, 2022. ​ ​ ​ 54 Table of Contents
Added
Certain foreign currency exposures associated with our seeded investment products are also hedged by using foreign currency forward contracts and swaps.

Other JHG 10-K year-over-year comparisons