Introduction to Henderson Group

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1 Andrew Formica Shirley Garrood Chief Executive Chief Financial Officer March 212 Introduction to Henderson Group One of Europe s largest independent pureplay investment managers Over 75 years of investment advice and accumulated business experience Core competencies in equity, fixed income, absolute return funds, property Listed on ASX and LSE, 1.4bn¹ market capitalisation 64.3bn² assets under management 1,43³ employees in Europe, US and AsiaPacific 267 investment professionals with an average 14 years investment experience Staff own c.12% 4 of the Company Financially sound and stable, FY11: 48.1m revenue 159.2m underlying profit before tax 787.4m total equity 1 As at 29 Feb As at 31 Dec Average for FY11. 4 As at 31 Dec 211, assuming all share plans vest. 1 1

2 Our history Founded to administer the estates of Alexander Henderson, the first Lord Faringdon Launched offshore (SICAV) retail fund range, opening office in Luxembourg Opened office in the Netherlands Opened office in Singapore, Henderson s Asian headquarters Purchased Phoenix Realty to create Henderson NA Property Set up single strategy hedge fund business Opened office in France Opened offices in Switzerland and Austria Launched pooled real estate funds in Europe Sold Life Services Renamed as Henderson Group plc Opened distribution office in Tokyo and Spain Acquired Gartmore Group, an established traditional long only and alternative UK fund manager Became a public company Opened investment office in Tokyo Acquired Touche Remnant, established Henderson as the UK s leading investment trust manager Acquired by AMP (Australia) Set up private equity business Opened offices in Hong Kong and Italy Started US retail business Launched our first sophisticated UCITS III fund; our platform capable of processing complex derivatives in volume Demerged from AMP Outsourced our investment management back office operations to BNP Paribas Acquired New Star Asset Management Group, strengthening market position in UK retail Opened office in Beijing 2 Our evolution since and ongoing Create independent pure play Investment Manager Reestablish Henderson Global Investors Expand in high margin product and channels Demerge from AMP Expand distribution Grow retail business List on LSE/ASX Sale of Life Services (Phoenix) Rebuild investment performance Refocus product range Rebuild consultant ratings Extend mutual fund distribution Build employee ownership Expand global and absolute return products Embed a clientcentric attitude across the firm Operate efficiently Foster strategic relationships 3 2

3 Executive Committee Andrew Formica* Chief Executive Shirley Garrood* Chief Financial Officer James Darkins* MD, Property David Jacob* MD, Investment Management and CIO Phil Wagstaff Global Head of Distribution Andy Boorman MD, Corporate Services Andrew Steward Chief Risk Officer * Also Directors of Henderson Group plc 4 Investment capabilities: diversified by client/business Focused, independent business Entrepreneurial culture Alignment with client interests 64.3bn¹ AUM by asset class Property 19% Fixed Income 24% Private Equity 2% Equities 55% Diversified suite of products Centralised support functions Comprehensive risk management 64.3bn¹ AUM by channel type Phoenix % Retail 44% Institutional excl. Phoenix 46% ¹ As at 31 Dec

Investment capabilities: broad product range Equity Fixed Income Absolute Return/Hedge Property Private Equity PanEurope North America Japan AsiaPacific UK China India EAFE Technology Property

4 Investment capabilities: broad product range Equity Fixed Income Absolute Return/Hedge Property Private Equity PanEurope North America Japan AsiaPacific UK China India EAFE Technology Property Equities Multi Strategy Emerging Markets Latin America Diversified Credit Gilts Interest Rates Secured Loans Structured Products Asset Backed Securities Emerging Markets Equity Long/Short Fixed Income/Credit UCITS III Agriculture UK Shopping Centre Central London Office UK German Shopping Centre European Retail UK Fund of Funds European Fund of Funds US MultiFamily US Manager of Partners Asia Fund of Funds Property Equities Tailored Solutions Infrastructure Asian Private Equity Fund of funds Diversification and scale to provide total client solution 6 Global presence Chicago Hartford Edinburgh Amsterdam Dublin Luxembourg London Frankfurt Paris Vienna Madrid Zurich Milan Beijing Tokyo New Delhi Hong Kong Singapore Sydney Henderson employees: 1,

Strategy and business model Our long term strategy is to be a leading global asset management company focused on delivering excellent performance returns and superior service to our clients We are

5 Strategy and business model Our long term strategy is to be a leading global asset management company focused on delivering excellent performance returns and superior service to our clients We are focused on five key objectives to deliver longterm shareholder value: 1. Be clientled Embed a clientcentric attitude in the firm, establishing an identifiable brand and culture based on success 2. Grow retail business Improve retail market share in the UK, Continental Europe and the US, while developing our franchise in key growth areas of Asia Pacific and Latin America 3. Expand global and absolute return products Develop and expand existing global and absolute return product ranges with a particular emphasis on the institutional market 4. Foster strategic relationships Foster longterm strategic relationships to help develop future business growth 5. Operate efficiently Focus on core businesses, including managing risks and operating them efficiently, while divesting noncore businesses 8 Rationale for Gartmore acquisition Attractive business fit Scale and presence Value creation Consistent with Henderson s growth strategy Expanded and strengthened product range, investment capabilities and distribution reach Enhanced absolute return offering for institutional and retail clients Complementary investment processes and approach Diversified business with product strength in long only and absolute return Combined Group ranks 6 th amongst UK retail asset managers by AUM¹ Significant underlying earnings per share enhancement Underlying returns exceed Henderson s cost of capital from 211² Certainty for Gartmore and its clients Draw on experience of successful integration of New Star ¹ By retail AUM; based on IMA data as at Jan 212. ² Calculated on the basis of underlying earnings. Compelling strategic and financial benefits 9 5

6 Asset retention above expectations Gartmore AUM movement (1.2) 14 (1.3) (1.) 86% asset retention 1 bn (1.4) At 2 announcement Net flows At completion Mkt/FX Net flows Hermes 31Dec11 1 Based on AUM at announcement, net of previously notified redemptions and before markets and FX and excluding Hermes disposal and 1.2bn of fund mergers. 2 Based on 31 Dec and after previously net notified redemptions of 666m. 3 Excludes flows which were previously notified at announcement. 4 Net of notified redemptions of 368m. Good asset retention drives income Fee income runrate at 89%¹ Gartmore runrate management and transaction fees Transaction fees (15) 117 Management fees 13 (11) At announcement Net flows Runrate pre market movements Mkt/FX 3 31Dec11 1 Excluding performance fees and market and FX movements. 2 Based on applying average management fee rates on Gartmore funds as at 31 Dec, excluding Hermes and previously notified redemptions. 3 Based on applying average management fee rates on Gartmore funds as at 31 Dec 11, excluding impact of fund mergers. 11 6

7 Financial benefits from Gartmore achieved +49% +23% 17.4% 11.7% 11.5% 14.2% Group cost of equity1 Return on equity 2 Group weighted average cost of 1 capital 3 Return on invested capital ¹ Calculated based on data as at 31 Dec 11. ² Based on the cost of acquisition at announcement, including shares issued to employee benefit trusts, and FY11 management and transaction fee revenue earned, annualised and FY11 actual performance fees and estimated operating margin. ³ Based on the cost of invested capital at announcement, including shares issued to employee benefit trusts, and FY11 management and transaction fee revenue earned, annualised and FY11 actual performance fees and estimated operating margin. 12 Improvement in operating margin Group operating margin¹ movement % 2.% % % 3.% FY Estimated improvement from 2 GRT Improvement from HGG and combined business FY11 ¹ Calculated as total fee income divided by operating expenses. ² Based on estimates at announcement. 13 7

8 Significant EPS accretion EPS improvement¹ p 1.5p p p p 3. FY Estimated improvement from 2 GRT Improvement from HGG and combined business FY11 1 Based on underlying fully diluted EPS. 2 Based on estimates at announcement. 14 Key performance indicators Investment performance Operating margin and compensation ratio 8% 6% 6% 4% 2% 4% 2% % FY7 FY8 FY9 FY FY11 % FY7 FY8 FY9 FY FY11 1 year 3 years Compensation ratio Operating margin pence Earnings per share on underlying profit bps Fee margin 15 5 FY7 FY8 FY9 FY FY11 * 1H11 annualised. Basic Diluted FY7 FY8 FY9 FY FY11 Total fee margin Management fee margin Net margin Net flows excluding Phoenix bn Retail Institutional 1.4 Net flow s FY7 FY8 FY9 FY* FY11* * Excludes International Property and Cash Fund transfers and NSIM sale. 15 8

9 FY11 overview Underlying profit Diluted EPS¹ Management fee margin Operating margin Compensation ratio Dividend 3 year investment performance² FY m 12.4p 53.3bps 36.3% 41.6% 7.p 66% vs FY +58% +31% +11% +21% 6% +8% Net fund flows³ 5.8bn 8.2% Debt ratios Gartmore acquisition criteria Maintained prudent gearing ratios Exceeded ¹ On underlying profit after tax. ² Asset weighted, percentage of funds achieving or beating benchmark over three years. ³ Excluding Phoenix, including Gartmore AUM at acquisition, % of opening AUM. 16 Profit and loss Management fees (net of commissions) Transaction fees Performance fees Total fee income Finance income Total income Total operating expenses Finance expenses Total expenses Underlying profit Gartmore related employee share awards Intangible amortisation Void property finance charge Recurring profit before tax Nonrecurring items Profit before tax Tax on underlying profit Tax on nonoperating recurring items Tax on nonrecurring items Nonrecurring tax credit Total tax Profit after tax FY (33.7) (17.2) (32.9) (33.2) (41.7) (2.1) 82.2 (69.2) 13. (33.6) FY (253.5) (8.7) (262.2).7 (11.6) (2.1) 87. (.5) 76.5 (2.6) % change n.m. (259) (6) 559 (83) (63) n.m. n.m. n.m. n.m. (56) 17 9

10 Underlying profit before tax Movement in underlying profit before tax (5.2) Transaction fees Performance fees Management fees (6.) FY Total fee income Operating expenses Net finance expenses FY11 18 Fee margins CAGR 15% CAGR 12% FY9 FY FY11 5 % CAGR 3% Total fee margin Management fee margin 1 Net margin 1 Based on underlying profit before tax. Continued improvement in margins 19

11 Total income and operating expenses Flexible cost base 3 Total income Total operating expenses Fixed staff costs Variable staff costs FY11: FY7: FY: FY8: FY9: FY7: FY8: 193. FY9: 25. FY: FY11: 33.7 FY7: FY8: 74.9 FY9: 77.4 FY: 83.7 FY11: 96.6 FY7: 77.5 FY: 77.4 FY11: 3.3 FY8: 51.6 FY9: H7 2H7 1H8 2H8 1H9 2H9 1H 2H 1H11 2H11 2 Compensation ratio and operating margin Improvement in underlying profitability 6 Compensation ratio Operating margin 5 FY7: 49.8% 4 FY8: 44.3% FY9: 43.9% FY: 44.4% FY11: 41.6% % 3 FY: 3.% FY11: 36.3% 2 FY7: 24.5% FY8: 28.6% FY9: 27.6% 1H7 2H7 1H8 2H8 1H9 2H9 1H 2H 1H11 2H

12 Continued cost discipline FY11 FY % change 2H11 1H11 Other operating expenses increase 12% largely due to Gartmore Investment administration Investment admin costs up to service more funds Office expenses Information technology IT spend accelerated in 2H11 as projects resumed post Gartmore Other expenses Depreciation (6) Other expenses increased mainly due to business development spend and a number of smaller other items Other operating expenses Manage costs whilst selectively investing in the business 22 AUM and fund flows in FY11 AUM by channel Opening AUM Gartmore takeon AUM 1 HGG net flows GRT net flows 2 Group net flows Transfers 3 Mkt/FX Closing AUM Closing AUM ave net mngmt fee 1 Jan Dec 11 bps 4 Retail 23,39 9,866 (776) (62) (1,378) 27 (3,532) 28,22 75 Institutional ex Phoenix 31,817 5,849 (3,67) (89) (4,416) (4,29) 56 29, Total Group ex Phoenix 54,856 15,715 (4,383) (1,411) (5,794) (4,2) (2,972) 57,83 Phoenix 6,753 (582) (582) 3 6,481 Total Group 61,69 15,715 (4,965) (1,411) (6,376) (4,2) (2,662) 64, AUM by asset type Equities 3,515 13,843 (4,127) (1,222) (5,349) (1,137) (2,556) 35, Fixed Income 18, (1,21) (152) (1,173) (1,463) (738) 15, Property 11, ,48 45 Private Equity 924 1,334 (87) (37) (124) (1,42) 315 1,47 Total Group 61,69 15,715 (4,965) (1,411) (6,376) (4,2) (2,662) 64, Before notified redemptions of 368m at completion. 2 Since completion of the Gartmore acquisition, including notified redemptions. 3 The transfer of Henderson Liquid Assets Fund to DB Advisors, NSIM sale and Hermes disposal. 4 Private Equity AUM and net management fees are excluded from this analysis due to the confidential nature of these fee arrangements and, therefore, excluded from the average management fee basis points. 5 Calculated including all Phoenix AUM and revenue

13 AUM with performance fee potential 31 Dec Dec ¹ No. of funds % of AUM with performance fee potential No. of funds % of AUM with performance fee potential Institutional clients Absolute return funds Property SICAVs ² Investment Trusts Private Equity 6 6 UK OEICs Total ¹ Data restated to reflect new AUM disclosure and reclassifications. ² Includes fund switch from UK Retail which does not have a performance fee opportunity. 24 Investment performance Funds at or above benchmark¹ % year 3 years Equity Fixed Income 1 Includes Gartmore. Excludes NSIM as the Group s interest was disposed of on 1 Jul 211. Asset weighted of funds measured as at 31 Dec 211. Retail fund ranges are measured relative to peers

14 Investment performance Asset weighted of funds measured¹ Funds at/above benchmark (%) 2 Investment Management UK OEICs/Unit Trusts SICAVs US mutuals Investment Trusts Offshore absolute return funds Segregated institutional mandates Liquidity funds Total Asset class Equities Fixed Income Property³ Total 1 Includes Gartmore. Excludes NSIM as the Group s interest was disposed of on 1 Jul Asset weighted of funds measured as at 31 Dec 11. Retail fund ranges are measured relative to peers. 3 Based on estimated performance as at 31 Dec 11; IPD benchmarks for FY11 will be available in Mar year % years % Financial position debt, equity and ratios 212 Notes 216 Notes Gross debt at par Unrestricted cash and cash equivalents¹ Net debt Total equity Available facilities² 31 Dec Dec Gearing ratios and interest cover Gross debt/total equity Net debt/total equity Gross debt/ebitda Net debt/ebitda Interest cover 31 Dec 11.4x 1.7x.2x x 31 Dec.5x.1x 1.5x.2x 13x 1 Unrestricted cash and cash equivalents excludes 4.7m (31 Dec : 5.m) held in escrow and 4.6m (31 Dec : 17.4m) held in the Group s manager dealing accounts. ² Represents a 75m revolving credit facility, as at 31 Dec 11, expiring in Apr 14 and excludes facilities cancelled after 31 Dec

15 Summary and outlook Volatile markets and economic uncertainty impacting client behaviour Focus on distribution of retail and absolute return funds Market volatility expected to continue Remain close to clients through challenging markets Extract full benefits of Gartmore acquisition Manage costs, continue to invest selectively 28 Forwardlooking statements This presentation contains forwardlooking statements with respect to the financial condition, results and business of Henderson Group. By their nature, forwardlooking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. Henderson Group s actual future results may differ materially from the results expressed or implied in these forwardlooking statements

23 February All information in unless otherwise stated

23 February All information in unless otherwise stated Andrew Formica Shirley Garrood Chief Executive Chief Financial Officer 23 February 2011 All information in unless otherwise stated Andrew Formica Chief Executive 1 FY10 overview Improved equity markets