00:00Speaking of deals, I believe this is your first broadcast interview since a bidding war broke
00:05out for Janice Henderson. You had Nelson Peltz's try-on and General Catalyst on one side. You had
00:12Victory Capital over on the other side. Victory ultimately threw in the towel, but there was a
00:18lot of back and forth and a lot of it was public. And to start on a personal level, I
00:23wonder how the
00:23past few months have been for you. It feels good being wanted. It's not always the case in asset
00:28management, but we've done a really great job at turning around the firm and we're growing faster
00:33than the other asset management company that is out there. We continue to deliver for our clients
00:37in terms of investment performance across equities and fixed income and around the world. So I guess
00:41it felt pretty good being wanted. You didn't really know what path the board was going to decide for
00:46us to take, but we're very, very happy with where we are today. And I mean, you think about the
00:50setup
00:51coming into this. Chion was already your biggest shareholder over at Janice Henderson going into
00:56this bidding war. They've been involved with the company for years at this point. But that being
01:01said, what does the future look like for Janice as a private company now totally under the control
01:06of Tryon and General Catalyst? Yeah. So we're really excited about what's going on. And the first thing
01:12is that we've done okay as a public company. To your point earlier, people want to talk to us and
01:16we
01:16deliver for our clients. But we're really excited about the opportunities going forward. And really,
01:22all it's about is being able to invest in our business on behalf and for our clients. And that's,
01:27I think, really important and interesting, whether it be in AI or in terms of hiring talent or other
01:31things. That's also why the group of people that we have as partners, you mentioned, Tryon and General
01:36Catalyst for sure. That's more on the AI play. We should talk about that if it's of interest.
01:40It'll come up. It'll come up. But other partners as well. So for example, the Qatar Investment Authority
01:44is involved with us. So it gives a really great sovereign wealth platform to work with.
01:48Mass Mutual, SHK in Asia, and a bunch of others who don't want to be named publicly. Typically,
01:54these people don't want to be named publicly, but allow us across the world to have pension plans
01:57and distribution partners to really allow us to invest in technology, in our people,
02:02in really delivering better investment quality for our clients in the end.
02:05Well, let's talk about the AI stuff. Because I mean, General Catalyst is basically an AI
02:09transformation type of firm here. So the partnership you have there, and I assume this is going to be,
02:14you know, holding hands or locking arms, if you will, for the future. What does that end up looking
02:20like in terms of how that feeds into how the business changes from a tech perspective?
02:23It's a great question. And it's actually a little bit of a question, if you were flying the wall,
02:27and a lot of the discussions are going on inside these rooms that people are asking. It's like,
02:32okay, so how do you apply AI? And our view is very much that AI in the discussion set has
02:38been
02:38disproportionately about productivity and efficiency and cost cutting. And that's for sure part of the
02:44puzzle. That's only the, for us, the third out of three things that we really focus on. And I think
02:50we are the largest, I would argue, real true AI transformation going on right now. General
02:54Catalyst and China are our partners and really delivering on this. But a lot of the lessons of
02:58our AI transformation can be brought to other AI transformations. So to your question, the first
03:03thing that we did is really tried to think about what we actually deliver for our clients. What is our
03:08core value add? And for us, that's investment performance. So to your point, where do we apply
03:14AI to deliver better investment performance? Now, again, we do okay so far. Our assets under
03:19management that outperform benchmarks are in the 65 or 75% of time outperforming the benchmarks over
03:25long periods of time and short periods of time. That's what we do. But how do we get it to
03:2880?
03:29How do we get to 85 by using AI? So we're using AI now within our investment pools to figure
03:33out how do we
03:34digest information faster? How do we take advantage of discontinuities in the marketplace
03:38faster? How do we take the 350 investors that we have around the world who are meeting with clients,
03:44thousands of clients and thousands of companies on an annual basis and mine that data much more?
03:48So the first part was just understanding the product and how to deliver that better.
03:53But how do you differentiate yourself? I mean, you know this from your past. I mean, so you know
03:57technology and you understand how fast technology changes. This is probably faster than anything
04:01you probably saw earlier in your career. So my question is that what you're trying to do,
04:05my guess is half the people walking around the market, the asset managers here are also trying
04:10to do it. What becomes a differentiation, if at all? Well, so I think I've already touched on one
04:15piece of differentiation, which is people are talking about just improving costs. Look, for us,
04:20we're taking a client lens. If your client sees you have better margins versus worse margins a little
04:25bit, they don't really care. But if you can give them better investment performance, that's really
04:29something that we're focused on. That's what we're doing. And we have the change management
04:31systems to do that because there's buy-in across the board. Now, the second element I was going to
04:36say is not just product, but then how do you deliver that to your clients? So we're actually
04:41reimagining how we deliver our product to our clients, getting the right product in the right
04:45client's hands with the right communication at the right time. And again, we can take a bunch of
04:49data that we're already putting into place and being able to target that. And that's what led
04:53partially to a little bit of a faster growth. And again, the third of the three is how are you
04:57more
04:58efficient, how are you more productive, et cetera. But for us, the key is that partnership
05:01with trying a general catalyst. We've done a lot of this stuff, like everybody else,
05:05to your point remain, internally. But what we find is what really is missing is that talent
05:10group that can be brought in and partner with us. We're the subject matter experts. They're
05:14the four deployed engineers, particularly with a team within general catalyst called Percepta
05:19to bring that forward and drive that forward. That's really differentiating.
05:21Is your talent right now, are they happy with this deal?
05:24So our talent internally, yeah, people are very energized about this because it unlocks
05:29us a lot of ways. Again, we did well as a public company. We generally deliver for our
05:33clients. But this allows us to unlock a lot more investment in the business, including
05:37AI, and trying things to deliver better results for our clients.
05:41And I am curious. I want to talk a little bit about your ETF business. As you know, I cover
05:46ETFs quite closely. And I mean, you have a CLO ETF that is just heads and shoulders above
05:52the competition when it comes to just the size of this fund. The ticker is JAAA there. And
05:58I wonder, you know, how you sort of extend that halo to the rest of your ETF business.
06:03And I mean, how did it become the monster that it is? Is that distribution? Is that model portfolio
06:08additions? I mean, how do you explain how this has become a 20, 30 billion dollar product?
06:13Yeah. Well, you've been prescient on ETFs. You've been covering for a very long time. So thank you
06:17for your participation there. Look, JAAA for sure has been a leader in this. But again, it's a little
06:22bit about having the right investment skill sets and marrying that with the client needs again at the
06:27right time. That business, to your point, has allowed us to develop halos in two different
06:31directions. One is other ETFs, particularly in the fixed income side that we've developed. And now we
06:36have five that are above billion dollars in assets under management. Again, the leaders in their
06:41space, because people know us as being able to deliver not just investment performance,
06:44but the liquidity that they require within ETF form. And that's true for certainly wealth
06:49platforms, but really importantly for institutional platforms. Insurance companies, for example,
06:52are big clients of ours. So that's something that, again, haloing not just in JAAA, but in
06:57JBBB, which is a BBB CLO, or JA, which, as you'd imagine, an ACLO. We're not great at inventing new
07:03brands. JMBS, which is mortgage-backed securities, and other things that we're doing. So one was
07:09taking that playbook and applying to others where the client's needs are. And again,
07:13importantly, asking our clients what they need was we were able to develop those products.
07:16The second area, though, is geographic expansion. So taking the products that we have in the U.S.
07:21and either developing kind of slightly tweaked products or taking the same products and bringing
07:25them outside the U.S. And we've done that with an acquisition that we brought on board about a year
07:29ago or so, a little bit more. And we're bringing our ETF franchise globally. And you'd be surprised,
07:35even though the U.S. has tax advantages, outside the U.S., there's still a liquidity need that people
07:39have. So in Europe, in Asia, where I was last week, in the Middle East, in Latin America,
07:45people are really starving for an ETF, easy-to-trade platform. And again, we want to be
07:50the providers of that. People don't know that we're the third largest provider of active fixed
07:53income ETFs in the world. We want to continue to build that. Well, there you go.
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