Good morning, everybody, and hopefully you can hear us. Looks like we have a reasonable attendance, so we might as well crack on starting on time. Thank you for finding time to join us today, given everything going on in the world and other results. Obviously our thoughts in the end are with those who are directly and indirectly impacted by what's going on in Ukraine. It's easy to forget, we all think about the financial markets impact, but there's real world impacts as well. For anyone new to Man, I'm Luke Ellis, the CEO. I'm joined by Antoine Forterre, our CFO. Antoine took over as CFO from Mark on October the first. Antoine was previously the co-CEO of AHL. Before that, the group head of corporate development and the group treasurer. So you can see he brings significant appropriate experience to the role.
As usual, I'll start with some highlights and overview of last year, and then Antoine, will take you through the numbers. After that, I'll talk about strategy, some of the recent growth and obviously the outlook, and then we'll open to questions. Just a reminder, if you wanna ask a question today, you'll need to access the presentation via the Webex link rather than the dial-in option, and we'll do that mute/unmute thing, which I'll explain at the end. So let's kick off. 2021 was a strong period of growth for the firm, with great results for our clients and our shareholders. Strong absolute net after fee performance of $12.5 billion, including $6.6 billion of alpha and record net inflows of $13.7 billion led to a 20% increase in our assets under management.
Our core management fee earnings per share grew by 52% as we benefited from ongoing management fee growth and the efficiency of our operating platform. We saw a near 140% increase in our total core earnings per share as that positive performance resulted in significant performance fees. Importantly, the growth seen in core EPS this year reflects real growth in the business, not an easy comparator in 2020. To highlight the point, earnings per share is up 84% since 2019. We also begin 2022 with good momentum with our run rate net management fees of $ 939 million and performance fee potential from a number of strategies at and above high water mark. As you know, we moved to a progressive dividend policy from 2021, and the board has declared a final dividend of $8.4 per share.
This takes the full-year dividend to $0.14 per share, a 32% increase on last year. Last December, we announced our intention to buy back a further $250 million worth of shares, which together with a $100 million share buyback we announced at our half year and which we got executed in four months, results in a total of $350 million of share buybacks announced in 2021. As you'll imagine, we've used the recent share price weakness to accelerate the buyback as much as U.K. rules allow. We're pleased with the continued growth and profitability of our business and supports consistent and growing returns to shareholders. As I've said before, and I just wanna remind you, the key strength of our firm is the combination of talent and technology to deliver alpha at scale.
We're a global leader in technology-empowered investment management and in liquid alternatives and solutions. Among listed companies, it's a unique position. For us, technology isn't just about making better investment decisions. It permeates our culture and powers everything we do. We've invested heavily in continuously developing our proprietary technology infrastructure to ensure we remain cutting edge. It provides a scalable platform for growth and creates operating efficiencies throughout the firm. Technology, though, doesn't work in isolation. We are at our core a people business. We hire and develop first-class talent from quants and technologists to portfolio managers and analysts. We have fantastic strength, experience and depth in our teams, and we continue to put a huge amount of energy into our culture to promote innovation and collaboration and to get the best out of our talent working together.
Continuing to invest in our people and our technology is critical to our ongoing success. It's the combination of talent and technology that gives us a real competitive advantage and a global leadership position in liquid alternatives, quant and solutions. This allows us to deliver for our clients, which drives the sustainable growth in our business and value to you, our shareholders. As I mentioned earlier, we had record growth in our assets under management this year, increasing from $123.6 billion at the start of the year to $148.6 billion at the end of December. This increase includes $13.7 billion of net inflows, our highest since I've been at Man. We think it's probably the highest ever, but we couldn't find enough records going back of all the things.
I mentioned in our half one and the Q3 releases that clients' engagement on a number of larger mandates had been positive last year, and we saw the benefit of those mandates landing in the second half of the year. More details come later. Absolute investment performance was positive at $12.5 billion, driven by both our alternatives and our long-only strategies. Of that performance, as I mentioned, approximately $6.6 billion was alpha and $2.1 billion was relative outperformance, which was a very good outcome for our clients and is a reflection of the value of our superior active investment management. 2021 saw excellent engagement with existing and new clients across the globe despite the pandemic, reflected by those record net inflows for the year, including our strongest ever quarters in Q3 and Q4.
Net inflows were driven by both our alternative and long-only strategies. It was really across the board. We continued, though, particularly to see high client demand for AHL TargetRisk and for our Institutional Solutions. One of the most notable wins for the year was a large mandate into our Numeric Global Sustainable Climate Strategy. This marks a very exciting milestone for us and is a strong endorsement of our ability to innovate and deliver a bespoke product designed to meet the particular needs of a client. Of course, in this case, it incorporates proprietary climate research to meet our clients' ESG goals. Our $ 13.7 billion of inflows was notably strong relative to the industry, with our net flows being 9.8% ahead of the flows in the sectors where we operate.
It's one of the best signs of the demand for our products and the strength of our business. Absolute investment performance across our product strategies was 10.4%. Our alternative strategies were up 8.1%, driven by positive performance across the product suite, with noticeable gains from AHL Evolution, AHL TargetRisk, and Alternative Risk Premia. On average, our long-only strategies were up 13.4%, having benefited from rallying equity markets and also the rotation into value. Performance in Numeric Global Core, Numeric Europe Core, and GLG Japan CoreAlpha was particularly strong as a result. Asset-weighted relative outperformance of 50 basis points in alternatives was driven by our quant strategies, with AHL TargetRisk continuing its relative outperformance since launch. Relative outperformance of 3.8% across our long-only strategies was exceptionally strong, driven by their valuation focus.
Our systematic long-only strategies outperformed consistently over the year, delivering 5.6% of alpha relative to their respective benchmarks on average. Japan CoreAlpha, as I mentioned, finished the year with over 15% of relative outperformance, and we've actually done the same again in the first two months. That's a great result for strategies that have delivered results for clients over the long term, but suffered a tough couple of years in 2019 and 2020. With that, I'll hand over to Antoine.
Thank you, Luke, and good morning, everyone. I'm pleased and fortunate to start in my role by presenting a strong set of results. I'll first go through some highlights before covering our AUM, P&L, and balance sheets. Net revenue increased by 57% just shy of $1.5 billion, driven by both management and performance fees. Net management fees were up 20% due to strong investment performance and net inflows. At $569 million, performance fees were up materially, reaching the highest level in over 10 years, thanks to good performance across our strategies. Fixed costs of $323 million were up 11% compared to 2020, driven by the continuing investments in talent and technology that we have guided on previously, as well as less favorable FX rates.
Although variable compensation increased, given the excellent revenue growth in the period, our compensation ratio of 40% was at the bottom of our guided range. This is a very good illustration of the operating leverage that our platform and technology provide, which led to a 132% increase in PBT to $658 million. Finally, we continue to have a strong and liquid balance sheet with net financial assets of $907 million as at the end of last year. Over the period, and despite most of our sales teams still unable to travel and meet with clients in person, we saw ongoing engagement on new mandates and continued strong demand for diversified product offerings.
We had net inflows of $13.7 billion, almost 10% better than the industry, as Luke mentioned, with all five product categories recording positive net flows for the year. Net inflows into alternatives of $9.4 billion were driven by Target Risk and Institutional Solutions, partly offset by outflows from Alternative Risk Premia. The net inflows into long-only of $4.3 billion were driven by the climate-focused win on Numeric, as well as GLG High Yield and GLG Asia (ex Japan). Both those GLG teams have seen good traction from our clients and continued to grow since their launch in 2019 and 2020 respectively. Long-only outflows predominantly came from Continental Europe and small cap mandates. Finally, as Luke mentioned, we generated $12.5 billion of investment performance, again, with all five product categories contributing positively.
On the management fee side, we saw growth across both alternatives and long-only categories. Absolute return contributed the most, reflecting strong performance and inflows over the last year. At $939 million, our run rate management fees are up 15% since December 2020, giving us continued positive momentum into 2022. Our run rate net management fee margin at the end of last year was 63 basis points, three points below last year's average. This is almost entirely due to the large systematic long-only mandate that funded last December, which attracts a lower margin due to both its investment style and low active share. Given the overall trend in management fee margin in the industry, we often get asked about our views, so I thought I would pre-empt the question.
Our focus is on generating profitable revenue growth in the various product categories that we run, taking into account their positioning, performance, and capacity. What this means in practice is that net management fee margin is very much an output of the underlying mix of assets we manage for clients, not something we target specifically. The impact of a large systematic long-only mandate which funded last year was therefore a one-off, and you can expect the previous trend on management fee margin to resume going forward. Moving on to performance fees, where I'm delighted to report we had our strongest year in over a decade. We often talk about the value of the performance fees we generate, and last year was a perfect illustration of that point. Overall performance fees, including gains on investments, were $596 million.
These were driven by $154 million from AHL Evolution and $224 million from other alternative strategies, most notably from Institutional Solution mandates. Institutional Solutions, are customized mandates which combine our investment capabilities to meet clients' specific needs. They are all different, but collectively have grown in size and numbers over time, and last year this generated $150 million of our performance fees. Although most of our performance fees were earned indeed from alternative strategies, our long-only strategies also contributed. Finally, we made gains on investments of $27 million, which predominantly relates to the performance of our seed book. Some longer-term perspective, better to appreciate the value and potential of this earnings stream over time.
Since December 2016, as you can see on the slide, our performance fee eligible AUM have grown by 66%, and the stock of AUM just at high water mark today at $34 billion is broadly similar to the overall stock of performance fee eligible AUM we had back then. Finally, at the end of the year, we had accrued in our funds a further $135 million in performance fees due to crystallize over the course of 2022. This number will vary based on the performance of the underlying funds, but as of today, our strategies have navigated the beginning of this year fairly well. We now turn to costs. We came in below our fixed cash cost target in 2021, partly through the prolonged impact of COVID and partly through cost discipline.
Fixed compensation costs increased by 7% to $208 million, reflecting a strengthening of sterling versus dollar and a continuing investment in our teams. Other cash costs increased by 19% to $115 million, driven by several factors, an increase in recruitment-related costs, higher occupancy costs following the exit of the main subtenant of our London office, increased charitable donations, and again, adverse FX moves. We expect our fixed cash costs for 2022 to increase to $355 million with three main drivers. First, continuing investments in selected growth areas such as trade execution and ESG, and Luke, will talk about this, a bit more later, which accounts for approximately 40% of the increase. Second, ensuring we remain competitive for talent, which also accounts for 40% of the increase.
Third, the normalization of pandemic-affected costs, mostly travel, accounting for the remaining 20%. We have indicated previously, we are keen to capitalize on the growth we've seen and invest further in the business, so we will keep applying the same discipline that has guided us over the last few years. Variable compensation costs increased due to higher management and performance fee revenues. That strong revenue growth meant our compensation ratio declined to 40% compared to 48% a year ago. 40% is the bottom of our guided range, reflecting excellent full year performance fees. The result of all this is a PBT margin increasing to 44% compared to 30% a year ago, highlighting the positive operating leverage in our business in periods of strong revenue growth.
In summary, strong investment performance and record net inflows increased our AUM to a new high of $148.6 billion, leading to a 57% increase in net revenue. Together with our cost discipline, which marries prudence with investments in selected growth areas, this resulted in core EPS growing by 139% to reach a new high of $38.7 a share in 2021, thanks in particular to strong performance fee earnings. A few comments on our balance sheets, which remains robust and liquid. We had $907 million of net financial assets at the end of December, before payment of the final dividend and completion of our share buyback program.
Our seed investments at $648 million have increased from $485 million at the end of 2020 due to targeted deployment of capital to invest in new strategies. Since 2019, we have made selective use of external financing arrangements such as repos. As we increase our seed investments and support new initiatives, we will consider the most efficient financing available, including drawing on our credit facility for operational purposes. Our balance sheet strength allows us to invest in the business to support our long-term growth prospects, evaluate the many opportunities, and ultimately maximize shareholder value. As we have done in the past, however, we intend to return to shareholders capital that we consider to be in excess of near-term requirements. Finally, while our cash flows may vary year by year, over time, Over time, to support strong, consistent, and growing returns to shareholders.
Since 2016, we have returned $2 billion to dividends and buybacks, and our share count has reduced by 17%, which means that for every dollar of earnings we generate, individual shareholders get $0.20 more now than five years ago. Our total proposed dividend of $0.14 per share represents an increase of 32% from 2020, reflecting the growth in the business and implementation of our new progressive dividend policy. Going forward, we expect our dividend to grow progressively across cycles, with interim dividend being around a 30%-40% of the total for the year in line with the broader market. Given the adjustments to the interim versus final splits required from our old policy, the board is minded to maintain the interim dividend constant until such time as a new split is achieved.
After completing the $100 million of share buyback announced back in September 2020, we announced a further $350 million in share buybacks over the course of 2021, of which $188 million have been completed as of last Friday. Together with an estimated $194 million of dividend payments in relation to 2021, this brings the total announced returns to shareholders for 2021 alone to over $500 million or roughly $0.40 per share. To conclude, the strong results reward the efforts of our people over the last few years, demonstrate the growth potential for our firm, and give us confidence in our strategy. On that point, I hand over to Luke.
Thank you, Antoine. Well, when we look at our talent and technology, we have a huge competitive advantage. We hire and develop world-class talent across the firm, from quants and portfolio managers to technologists and analysts. We foster this culture of innovation and collaboration. Our technology isn't just about making better investment decisions. It powers everything we do at Man. We're a global leader in quantitative investing, and we also use that technology to support discretionary investment teams to improve our client service and to constantly automate parts of our platform. In this, we feel we're orders of magnitude ahead of most asset managers, and the investments we've made and the culture we've built gives us a huge and persistent competitive advantage. Our technology delivers real benefits to clients and the firm.
We can deliver bespoke strategies to our clients only because our tech platform allows us to operate efficiently and effectively in hundreds of markets across the globe. That platform supports the alpha we've generated for clients this year, that then accrues in revenues and profits for the firm. With our quant strategies alone generating over $1 billion of revenues for the firm this year. I'm convinced that our business model gives us the ability to deliver consistent growth for the business over time. Large institutional investors have an insatiable appetite for alpha to enable them to reach their target returns. Our business is designed to deliver them that alpha at scale. The breadth and quality of what we do and the range of different and distinct approaches to investing at Man Group is compelling for our clients.
We're an alpha-focused asset manager, and we aim to have as many different sources of alpha available to clients as we can create. We grow by adding new sources of alpha through organic innovation, recruitment, and acquisition. We grow by enhancing our existing alphas and by increasing capacities in those alphas by improved trade execution. There is always excess client demand from large institutions for those alphas as long as the quality of alpha is maintained. Liquid alternatives continue to be a significant part of the solution to navigate the current macroeconomic environment of rising rates. There is a very large demand at the moment for bond-like returns. Well, okay. What people imagine bond-like returns look like at, say, 4%-5% returns annually with free vol.
In reality, that's not what bonds have done in the last 12 months, nor is it how bonds will likely perform in the next few years. Alternative managers with excellent risk management skills who could deliver fixed income replacement strategies with these desired bond-like returns will continue to grow, and that's an area where we're very well placed and we continue to invest. As opportunities in new markets emerge, we're well-positioned considering our long track record of investing successfully in new asset classes, non-traditional markets, and frontier markets. We know how to move quickly to collect data, analyze the opportunity, and also develop the access and legal structures to enable us to be early movers with commensurate extra returns for clients and shareholders alike. Our research teams are continually exploring new markets, and every year we push the boundaries of opportunity.
There are few firms with a range of solutions we offer and a proven track record of delivering investment performance with that alpha at scale. It allows us to appeal to a wide range of clients from around the world and to always remain relevant to the Client CIO through market cycles. That takes me nicely on to the next slide. Inflation has hit record highs in economies around the world, with central banks expected to begin or have already begun tightening monetary policy. Maybe they're all behind this curve anyway. While there's a question of how far rates will have to rise and by how much, and whether central banks have the stomach to push them far enough to squeeze inflation down to their 2% targets, we don't really know how long this period will last.
It's clear investors face the challenge of how to position their portfolios during an inflationary period for at least the next year or two. In early 2021, we published an award-winning paper entitled The Best Strategies for Inflationary Times, a great example of the academic rigor we bring at Man, because it was an academic award, not a publicity one, and how we look collaboratively to understand complex topics to add value to our clients. The paper sought to answer a simple question, what investments have tended to do well or less well in environments of high and rising inflation? Our analysis spanned nearly a century. The long sample is particularly important because inflation surges in developed countries have been rare in the past 30 years. Luckily, but not surprisingly, some of our findings were particularly relevant to our own business.
First, the trend following strategies have done particularly well in inflation episodes. This is primarily due to their dynamic characteristics that don't depend on a positive beta in a single asset class. They're as happy to be short bonds as long bonds. Second, that a number of active equity factor strategies provide some degree of risk mitigation during inflation surges. While our analysis reaffirmed some of what we already knew, it importantly highlights why Man Group, with our 35 years of experience investing in these markets, is well-positioned to help clients achieve their aims in the current environment. As I've said before, we're a client-focused firm. By that, I don't mean a distribution-focused firm. Since I became CEO, we've made it a big priority for the firm to adopt an outward-looking mindset, to listen and respond to clients.
We understand their unique needs and can create solutions tailored to meet their individual requirements. Giving clients solutions that meet their needs rather than a standard product that's easy to produce for the manager is really differentiating in asset management, and it creates greater flows and stickier assets than a product sale. Man has the creativity, structuring, and very flexible platform to be able to deliver bespoke solutions to clients' needs effectively and efficiently. In Q3, the very strong flows came primarily from eight different multi-hundred million-dollar separate account solutions for clients from the West Coast of the U.S. all the way through to Australia, investing across GLG, AHL, and FRM. Each one adapting our solution to meet the needs of the client. In Q4, a tangible example of our solution delivery was the large win into our Numeric Global Sustainable Climate Strategy, partnering with SJP, I mentioned earlier.
It was a strong endorsement of our ability to deliver a bespoke product that met the client's needs for a clear process with significant scalability, their chosen level of tracking risk and hence fees, and crucially, incorporating our proprietary climate research to target low carbon usage and at worst, a one and a half degree warming world. More broadly, our leadership in quantitative investing in technology allows us to deliver intelligent, responsible investing by interrogating complex ESG data effectively. We've made significant progress in recent years, now integrating ESG within $55 billion of our assets under management. I would just remind you, it's not sensible to talk about integrating ESG within all of our assets, as things such as U.S. Treasuries or Dollar [in FX] don't realistically fit into an ESG integration framework.
The figures on this slide demonstrate the strength of the client franchise we've built with the world's largest and most sophisticated investors, and the real progress we delivered against some of our key strategic priorities over a five-year period. We think you can see the value of our approach and how clients interact with us. When clients invest in one product with us, they often make a second, third, or fourth investment too. Our top 50 clients invest on average in four of our strategies, and we've now seen cumulative inflows of over $38 billion since 2017. That's in just five years. More than 25 clients now invest over $1 billion with us. Over $65 billion of our AUM is from clients invested in five or more products, and over $40 billion of our AUM is from clients domiciled in the Americas.
What we've seen in recent years is the result coming through of a lot of the hard work we've put in. We continue to be focused on increasing the diversification of our business for the future. We're a market leader in trade execution, and we continue to build our firm-wide center of execution excellence. In 2020, we traded 40% more volume, but we reduced our overall dollars of slippage by nearly 10%. This is real value creation for clients and shareholders alike. Execution efficiency enables us to capture more output for clients, create more capacity in our flagship strategies, and this is a fast-evolving area ripe for further innovation. The development of systematic ways to trade single name credit in fixed income markets are increasingly electronic, is an example of an exciting opportunity for us.
I'm sure all [asset management] CEOs are saying we're investing into our ESG capabilities further. Of course, we are growing our team and launching a range of strategies across the business, both in liquid and private markets. For us, this is combining our ability to manage messy data with real scientific insight and human engagement to produce intelligent, responsible investing. As we've talked about, we have a technology lead, and we invested over $ 100 million into our technology capabilities in 2021, which will further support our ability to serve our clients going forward. When you have an edge, this is the time to press your advantage and grow your edge. It's about deepening our moat. We're pleased with the diversified range of products we can offer clients today. However, I'm also convinced that the minute you stop innovating, you start to decline.
We've been steadily growing our range of products in recent years. We've seeded new strategies, and we've seen inflows into a number of these in discretionary and fixed income, for example. We remain focused on expanding our range of alternatives and solutions offerings and consider our current pipeline of new ideas and products very strong. This creates multiple dimensions for future growth. 2021 was an excellent period of growth and demonstrates the potential for the firm we've built over the past few years. We delivered 20% growth in management fees and 52% growth in core management fee EPS versus 2020. We had a strong performance fee outcome due to the much larger performance fee eligible AUM we run these days, and we continue to grow our performance fee potential with eligible AUM up 23% in the year alone.
I would love to say it was a blowout performance year, but honestly, it was good, not great. With our higher AUM, we could achieve truly great things if everything comes together. What we've achieved in 2021 reflects our performance, the demand for our products, and the value of our technology-empowered active investment management. These results are a reflection of real growth, not a simple comparator, as we delivered a very resilient set of results during what was a very challenging year for most in 2020. However, it's not just a one-year phenomenon. We've consistently delivered growth in our core business over the past five years. Our net management fees have grown 36%, but importantly, our core management fee profit before tax has more than doubled, and our management fee EPS grew by 134%, reflecting the impact of our ongoing share buybacks.
They generate real value. This highlights our clients' confidence in our ability to manage and grow their assets and our focus on running the business efficiently and translating performance and inflows into profitable growth for our shareholders. Performance fees, you know we think this, are a very valuable earnings stream for shareholders. We've increased, as Antoine mentioned, our performance fee eligible AUM by 66% since 2016. Future performance fee potential grows proportionally with the performance fee eligible AUM. This year, we've really seen the benefits of the diversified range of performance fee earning strategies we offer. I just think it's worth pausing to reiterate some of those numbers. In 2021, we've delivered greater than 50% growth in management fee profits and an even higher growth including performance fees. We've announced a return of over 15% of our market cap through dividends and buybacks.
Those aren't numbers you might associate with an asset management firm, but it comes because we're a global leader in applying technology to financial markets. We've grown strongly over the past five years, and we're confident that we can continue to do so in the future. It's been an excellent year for Man Group and a very strong outcome for clients and shareholders alike. Really, it's been an excellent two years for Man Group as the outstanding work the team did to look after our clients and our colleagues and their assets during 2020, despite the pandemic, created the platform for us to take advantage of the opportunities that 2021 gave us. We've always been confident the firm will deliver in periods such as this. It did. Our focus is on delivering more in the future.
We're in excellent shape with a solid competitive advantage and good momentum going into 2022. I wouldn't normally talk about the short term, but you're gonna ask, and there's obviously been a lot going on in markets the last 10 days and frankly, all year. I'm pleased to say that our processes are doing exactly what they're supposed to do. While with volatile markets, things can change very quickly, our CTA strategies are making money year-to-date, and our clients are behaving rationally. With that, we'll open up for questions. As a reminder, to ask a question, you'll need to join via the Webex link. If you haven't, you need to switch over quickly, but we have 100 people on there, so hopefully you have.
On your screen, and it might vary a little bit by device, you have to press the Raise Hand button to notify us that you want to ask a question. Then I will unmute you or give you the option to unmute. You then unmute yourself and ask your question. It's what we did last time. Hopefully, it'll work. Rather brilliantly, Arnaud got on there about half an hour ago. Arnaud, you're gonna go first. You should get a thing saying, "Request to unmute. You've unmuted," and you can talk away.
Yeah, good morning. Hopefully you can hear me.
Yeah.
Yeah. Great. Thank you. I've got three quick questions, please. First, could you talk about the M&A environment. Obviously we've seen a significant derating amongst the asset managers in the private market space. Purchase multiples have come down for stakes being purchased. I'm just wondering how you are seeing pricing evolve, and especially the way to maybe think of it, thinking back in time is generally when public markets come off, then the bid-ask spread, if you will, between buyers and sellers tends to widen, and that kind of makes it difficult to execute on transactions. I'm just wondering how we should think about the M&A opportunity going forward here considering markets. My second question is regarding tax. I think in the appendix you give some guidance on taxes.
Could you come back and revisit the tax guidance and what are the key inputs there? That'd be helpful. Thirdly, on the St. James's Place mandate win, does that account for the vast majority of the run rate management fee drop from 66 to 63? I'm just still trying to think about how we should think about that margin going forward. Thanks.
Cool. Thank you for that. The short version on the last question is yes, but Antoine may have longer answers in a minute. Let me talk about the M&A situation. You know, obviously the change in tone in markets is fairly recent, and it'll be interesting to see whether it does bring down people's expectations more in line with where we are. We continue to look at things. We continue to be extremely disciplined. We don't think it's a good idea to chase prices. We hope prices will have come down commensurate with what's going on. I think one of the interesting things, in December, I talked with a couple of investment banks, and they were telling me how many IPOs they had planned for private markets businesses in January.
As you'll have seen, very little got done in January, and the performance of some that have been done is not particularly exciting. That presumably takes the IPO market off the table and might create opportunity. You know, we continue to look at alternative managers. We continue to look at long-only managers. We continue to look at private markets managers. You know, we will keep looking at things until we find something.
We give at the end of the presentation, the main driver we see of our tax rate is the location of profits across the group. We operate several jurisdictions, as you'd imagine. U.K. is one of the key jurisdictions in which we operate, and the U.K. corporate tax rate is due to increase to 23% from 19%, if I'm not mistaken, over the last year and a half. That accounts for the increase in guidance to 2023. The second driver is the stock of accumulated tax losses that we have in the U.S., which has been enabling us to in effect pay very little, if any, federal, state taxes, federal taxes in the U.S.
As we grow in the U.S. and generating more profits, those tax losses will be consumed and we will start paying taxes in the U.S. and that's what you see guided on sort of 2024 and forward. On St. James's Place mandates, Luke, sort of covered. Yes, the vast majority of it is St. James's Place, which accounts for the drop. The guidance that we give is you can expect the trend that you've seen over the last year and a half before to resume going forward.
Cool. Hubert, you are next. There you go. Well done. You've unmuted yourself, and off you go.
Great. Thank you very much for taking my questions. I've got three questions. Firstly, can you talk about the full flow pipeline into this year? Obviously you had a great second half of last year and you like talked about how well-placed your products are for this environment. So maybe talk about how the current momentum is like and also about what products you see strong interest in? First question. Second question is on dividend. Now that you've rebased your dividend, I assume the $ 0.14 is the floor now, but how do we think about the dividend growth going forward? How should we, you know, it should be based on management fee growth or, you know, dividends.
This is new territory for us, so I'm just wondering how we should think about dividend growth. Lastly, can you also I think I may have missed it, but can you say how much assets that you with performance fees is currently at the high- water mark? And also, the number you're gonna give me, is it as of today or at the end of last year? In case it's changed. Thank you.
Cool. Look, you know we don't like to talk about current year flows. I think the way to think about it was the third and fourth quarters were truly exceptional, but we've shown consistent inflows. We came into the year with a forward-looking pipeline that looked consistent with our achievements in the past. Exactly what happens, it will depend on, what our friend in Russia does and quite how bad that situation gets. As I say, so far, clients are acting extremely rationally and sort of the business is progressing as normal. As you can imagine in this sort of environment, you know, people are interested in the alternatives. You know, or maybe the better way of putting it is they're very, very nervous about equities. I think yeah. We're right in the teeth of the storm at the moment, so let's see how it develops over time.
Shall I do the next two?
Sure.
Dividend policy is now progressive, as you highlight, which means that the intention is to grow our dividend progressively over the cycle. Last year was a particularly strong year of growth for core earnings. Not surprisingly, we grew dividend slightly less than core earnings. Although it's worth flagging that if you add the share buyback that we announced in relation to 2021, overall returns to shareholders are marginally higher than core earnings for last year. Going forward, you can expect kind of similar level of returns that we've done in the past, but with a sort of smoother profile over the cycle. You know, we have significant growth prospects for our business, on the one hand to kind of guide you on how to grow that.
Last point on share buyback, you're asking, but the attractiveness of share buyback at times when we believe our share price is not representing fair value remains something that we keep in mind. AUM [also] marked $34 billion as of the end of last year and the numbers as of end of December. As Luke mentioned, our strategies have performed fairly well. Overall some of the key drivers of performance fee are at levels, and you'll see it on Bloomberg or the screens, similar to where they were at the end of last year.
No meaningful change.
Great. Thank you.
Thank you. We have no other questions. A reminder to people. Thank you, Bruce. A reminder, generally, if you want to ask a question, you have to put your hand up. Bruce, I've sent you the unmute. There you go. You are with us.
Can you hear me?
Yeah, you've got it. There we go.
Perfect. Okay, cool. Just to, sorry, going back to some of the recent answers. On the fee margin point, so should we looking at your pipeline, would you assume that it's more kind of 65-ish bits, and therefore we get a slight sort of improvement over time after the step down because of Q4? Or are you saying 63 bits is kind of a good-ish number to use? Linked to that, in terms of the growth fund pipeline, is it very heavily skewed to TargetRisk or is it pretty well diversified? I guess you've probably got, I assume, reasonable visibility on the growth pipeline. The redemptions is the bit you have less visibility on. Is that the way to think about it? How diversified is that pipeline?
Uh, so I.
You take a second that one.
On the pipeline, yes, that's sort of always right that we have a projection out 12 months on our inflow pipeline with some sort of weightings on it and it generally proves to be extremely accurate for what we expect. The outflows is always market dependent in some form or another, or what's going on with the client. You know, the potential inflows are really quite well spread across most of the things we do. It's not heavily dependent on any one piece of the puzzle at all. If anything, the thing that is most dominant is solutions, which is really where we are building something bespoke for the client. You know, we have to then back it out into the categories. You know, clients are looking for us to give them answers to their problems.
I think you've partly answered, I guess, the first question. Given the flows that we see and the distribution of the flows across the product categories, our guidance is that we expect the trend we've seen in margin before the one-off impact of the large mandates to resume.
It's all there or thereabouts.
Exactly where I'd recommend that one or two basis points.
Yeah, exactly. To try to work out the asset weighted thing to a nearest basis point on future flows minus future redemptions is an impossible calculation.
I'll take that.
You know, look, the flow from St. James's Place is a fantastic piece of business for the firm. I'm sure it'll be a fantastic thing for their clients. You know, it operates at a different level of risk than Numeric normally runs at, but it and so commensurately runs with a different level of fees. You know, it's obviously at a different level of scale. You know, as a return for shareholders, it's a very good piece of business as well as being good for the client.
Got it. Helpful. Thank you.
Thank you, Bruce. We are short of questions unless anybody else has got one. I guess this is what happens when you have a good set of results. If you've got a question, put your hand up. We'll give it a few seconds. Oh, there we go. Arnaud's back.
Arnaud's back.
Hi, Arnaud. You should be unmuted and off you go.
Yeah, great. Thought I'd take advantage to ask a few more then. On AHL, could you perhaps give us a bit of an update as to where capacity might stand? I note that you talked about the electronification of fixed income markets. Perhaps there are other markets that are evolving quite favorably, like electricity markets. Where can capacity go for your more constrained strategies?
I think the answer is there will always be some parts that are constrained. You know, EVO last year, we did a lot of great things to create extra capacity, and then it made us double-digit return, which uses up a lot of extra capacity. The team in AHL is constantly focused on generating future dollars of P&L that we can then allocate either into solutions or into individual products. I think we feel like there is plenty of capacity going forward, even if some of the individual products themselves will be capped. You know, I think we feel like there is room to do plenty more within AHL where we are today.
AHL TargetRisk has plenty capacity as well.
Yeah, exactly. That's extremely scalable.
Cool. Thank you, Arnaud . Then [R56052], you get to ask the question. I'm unmuting you, but I don't know who you are, so you'll have to help. I think that's good.
Hi. Good morning. My code name is Gurjit from JP Morgan.
Hi, Gurjit. Good to hear you.
I hope you guys are well. Just a couple of questions. Just regionally, where have you sort of been seeing the strongest demand? Obviously, you know, SJP mandate aside, outside that, where's the strongest demand being from clients? Just briefly, you know, on the seeding of that book's increased now to about $ 650 million, you know, where do you see the most exciting opportunities for seeding new strategies?
In terms of client demand, I think it really is remarkably global. In any one quarter, there's some market that is more or less exciting. You know, in the second half of last year, we saw, you know, good flows from Australia, from Japan, from the sort of, from China region, from Europe, from the U.S. You know, I think what's striking is corporate pension plans, defined benefit pension plans are the most cash flow constrained. Away from that, what you're seeing is, you know, significant positive cash flows in the sovereign wealth market, and particularly in a world with oil at $80 and $100. You can imagine there's significant flows there. You know, in the public pension plan market, there's a lot going on. There's really a lot of demand.
We don't have a problem with finding demand. Our thing is to build capacity in things that maintain the alpha quality we've got, and then really we find client demand for it. A lot of the new things we do, we never even get to build a new product because the capacity gets bought straight off the bat by sort of the solutions clients who've got solutions where you can add in extra pieces.
On the seeding side, the slide 23 is a good proxy for where you end up seeing our seeding as it mimics the areas of growth in our business. I'll call a few of them, ESG capabilities across the business, with discretionary is one. Private market is another area where we're putting some more balance sheets at play. Credits in various guises and forms is another one that we've increased seeding and looking to increase in the future.
Yeah, that was nicely avoided saying a specific fund 'cause, Gurjit, you know, I always hate picking an individual fund for the future. What we have an amazingly consistent 50/50 hit rate with new products that we launch. We've spent time trying to work out if that's too high or too low, but it's very, very consistent. You know, if we've got 10 things in the seeding book, and with confidence, I would say five of them are gonna succeed and be real revenue contributors to the firm and five won't. So far, we've been able to not have any disasters. The ones that don't succeed don't cost money. The ones that do succeed become significant contributors.
We've demonstrated we have no ability to say which are the five great ones and which are the five that don't work. A lot of it is just luck in terms of the timing when you launch something and what happens in markets next.
Okay.
Thank you for that question. Last chance for anybody to put their hand up, whether you've got a name or a signal on your name. There we go. We got one more. Ben, welcome.
Hello. I was just really interested to find out, you know, what percentage of that amazing net new business came from existing clients, please?
That's a good question to which I'd have to go and look up the answer. You can assume 50% of it came from existing clients and 50% from new clients, but that's partly heavily favored by a couple of situations.
Understood.
We definitely, you know, there are two dynamics that have been going on, one of which may loosen up. We'll see how COVID goes, the other which won't. The first one being, you know, in a COVID world with less travel, clients really feel comfortable with relationships they trust. You know, topping up existing mandates or giving new money to us when we already do two, three, four things with somebody has been a big opportunity for us because that, you know, in a low travel world, that's significantly easier. It's an interesting question, how much clients will be traveling. At the moment, I would say clients are in the office much less than the banking world or the asset management world. We'll see over time where they go.
The second thing, which is, you know, a strong trend for clients to want to do more things with their core relationships and have less line items in their portfolio, that trend is, I think, very strong. You've seen, particularly in the liquid alternatives world, that the larger hedge fund players are getting larger. The larger hedge fund players are generating the most alpha. They're attracting the most talent that gets more inflows and is a virtuous circle for those of us inside that mode.
Thank you very much.
One other thing is the total AUM from the largest clients is in the several trillion dollars, so our penetration remains fairly low. As we expand the range of program strategy solution that we provide, the ability to gain sort of market share with our clients keeps on increasing. That has been very helpful to us. There's plenty of room there.
Super. Well, with that, I think we'll say thank you everybody for your time and attention today. I hope it was useful. You know, I mean, well, we think Man had a great 2021 and delivered really well for our shareholders, and we think we can do that going forward. Hopefully we'll have as good a one of these next year. Thank you, everybody. Have a good day out there.