HGG.L Regulatory News (HGG)

Interim Management Statement

21 October 2010

Henderson Group plc ('Henderson Group' or 'the Group') is today publishing its second Interim Management Statement for 2010, in accordance with the EU Transparency Directive and revised UK Listing Authority rules. Unless otherwise stated, the comments below refer to the third quarter of the current financial year, representing the period from 1 July 2010 to 30 September 2010 ('the period').

Key points

·; Assets under management ('AUM') increased 5%, by £2.8 billion to £59.2 billion.

·; £0.3 billion net inflows into UK and Horizon retail fund ranges.

·; £0.2 billion net inflows into Property; £1.3 billion net pipeline of client commitments.

·; £0.2 billion net inflows into fixed income Institutional business; £0.4 billion net pipeline of mandates won but not yet funded.

·; Positive market and currency movements of £3.1 billion.

·; Good investment performance over one and three years.

Commenting on the Interim Management Statement, Andrew Formica, Henderson Group's Chief Executive said: "The risk appetite of both retail and institutional investors remains low, driven by poor economic news and volatile, albeit improving, equity markets. Henderson continues to see healthy demand especially in our fixed income credit products, recognising the strength of the team we have built in this area. We invested some of the client capital earmarked for property investments and expect this to continue in the fourth quarter and into 2011. Overall, Henderson's diversity, combined with good investment performance and client focus, provides clients with a broad product range to choose from to suit their risk appetite and investment profile."

Fund flows and AUM for Henderson Global Investors ('Henderson')

¹ New Star Institutional Managers

Total AUM increased by £2.8 billion in the period. Favourable market and currency movements of £3.1 billion were partially offset by net outflows of £0.1 billion and the transfer of the £0.2 billion Henderson International Property Fund to Aviva Investors, bringing total AUM to £59.2 billion at 30 September 2010.

Within higher margin products, net inflows into Horizon were £0.2 billion, consistent with the previous quarter. Most of the flows were into the Global Technology, Pan European Equity and Global Currency funds. The net inflows of £0.1 billion into our retail range in the UK were spread across a broad range of funds including our multi manager range of funds, Credit Alpha, Strategic Bond and European Special Situations funds. We invested £0.2 billion of the Property pipeline in the period, mainly into the German KAG fund and North American CASA IV fund. Property client commitments were £1.3 billion at 30 September 2010 (£1.4 billion at 30 June 2010). Flows in hedge funds were flat in the period as flows into Global Macro, Agricultural and Japanese absolute return funds were offset by outflows from other Asian and European funds. The £0.2 billion outflow from Investment Trusts is a result of Witan Investment Trust plc's decision to change its asset allocation replacing Enhanced Index portfolios with active managers. The £0.2 billion outflow from Structured Products is a result of certain managed CDOs maturing. However, the Structured Products team continues to secure additional advisory mandates which are not included in our AUM as the revenue forms part of our transaction fee income.

Within lower margin products, net inflows of £0.2 billion into our Institutional business, mostly into fixed income products, were offset by redemptions of £0.2 billion from NSIM whilst our Cash funds were flat. The Henderson Institutional business had a net pipeline of client commitments at the end of the period of approximately £0.4 billion (30 June 2010: £0.3 billion), mainly fixed income and international equity funds. This pipeline will be partially offset by notified withdrawals from NSIM of approximately £0.2 billion.

We had net outflows of £0.2 billion from Pearl Group in the period associated with the run-off of its closed life books. Pearl has a further £1.4 billion of assets (unchanged from 30 June 2010) on which it has given notice, but is yet to withdraw. We continue to manage these funds on a care and maintenance basis. Given the investment management and other related agreements entered into with Pearl in June 2006, the Pearl fund outflows mentioned above will not have any material impact on Henderson's expected future revenues.

Investment performance

Henderson's overall investment performance remains good and we are well placed to capture client demand. Over one year, 67% and 65% of Equity and Fixed Income funds outperformed rising to 72% and 79% over three years.

Investment performance across most of our Investment Trusts has improved with 73% and 55% of assets outperforming over one and three years.

The strong performance of the Horizon funds continued during the period with 89% and 87% of assets outperforming over one and three years.

In UK Wholesale, although falling from 30 June 2010, investment performance was good with 65% of assets outperforming over one year. Over three years, our numbers remain adversely impacted by legacy New Star funds with 43% of UK Wholesale assets outperforming. Excluding these funds, approximately 65% of UK Wholesale assets would have outperformed.

The US Wholesale fund range has maintained its outstanding long term track record with 98% of assets outperforming over three years. The one year performance remains disappointing with 15% of assets outperforming, as a result of the Henderson International Opportunities fund, the largest fund in the range, underperforming.

Hedge fund performance over one year is disappointing at 35% whilst three year performance is strong at 80%.

In Private Equity the two funds invested in infrastructure have both increased in value over the last three quarterly valuations. Henderson PFI Secondary Fund L.P. ("Fund I") was valued at 1.08x at 30 June 2010 (31 December 2009: 1.03x) and Henderson PFI Secondary Fund II L.P. ("Fund II") was valued at 0.46x at 30 June 2010 (31 December 2009: 0.41x). Other parts of the Private Equity business continue to perform well.

In the Institutional business, 92% of enhanced index funds outperformed over both one and three years and 68% and 69% of fixed income funds outperformed over one and three years.

New Star Institutional Managers' performance over one year is strong with 99% of assets outperforming however three year performance is poor with 3% of assets outperforming.

Other business developments

DB Advisors were appointed as investment manager of the £3.3 billion Henderson Liquid Assets Fund ("HLAF") on a sub-advisory basis with effect from 12 October 2010. This followed a review by Henderson of its cash investment business in light of potential changes to the way that the money market fund industry is regulated and finding the best outcome for investors in HLAF. HLAF is exclusively offered to institutional or professional investors.

Balance sheet

The Group's balance sheet at 30 September 2010 shows total net assets of £296.7 million (30 June 2010: £295.4 million) including cash and cash equivalents of £121.1 million (30 June 2010: £100.5 million).

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Appendix

Number of shares for earnings per share (EPS) calculations¹

¹ This is a full-year weighted average number of shares based on current issued share capital and employee share plans adjusted for expected movements until the end of 2010. It is the Group's intention to satisfy certain share scheme awards through the issuance of new shares. Based on current estimates of future share scheme obligations, the Group plans to issue approximately 1.8 million shares per month from October 2010 whilst remaining within the appropriate stock exchange rules and ABI guidelines.

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results and business of Henderson Group. By their nature, forward-looking 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 forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

Notes to editors

About Henderson Group plc

Henderson Group plc ('Henderson Group' or 'Group') is the holding company of the investment management group Henderson Global Investors ('Henderson'). Henderson Group's principal place of business is in London and since December 2003 it has been dual-listed on the London Stock Exchange and Australian Securities Exchange ('ASX'). Henderson Group is a constituent of the FTSE 250 and S&P/ASX 200 indices. Since 31 October 2008, the Group has been incorporated in Jersey and tax-resident in the Republic of Ireland.

Established in 1934, Henderson is a leading independent global asset management firm. The company provides its institutional, retail and high net-worth clients with access to skilled investment professionals representing a broad range of asset classes, including equities, fixed income, property and private equity. Henderson is one of Europe's largest investment managers, with £59.2 billion assets under management and employed around 960 people worldwide (as at 30 September 2010).

About CHESS Depositary Interests

In this announcement, the term "shareholders" refers to all holders of Henderson

Group plc shares, including those whose holdings are in the form of CHESS Depositary Interests on the Australian Securities Exchange.

CHESS Depositary Interests, or CDIs, are a way of allowing securities of foreign companies to be traded on the Australian Securities Exchange. CDIs afford shareholders all the same direct economic benefits as ordinary shares, like the right to dividends and the right to participate in rights offers.