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Marc Mayer | Chairman & Chief Executive Officer |
Paul Battaglia | Chief Financial Officer |
Nicole Kingsley Brunner | Chief Marketing & Strategy Officer |
Good evening, my name is Erin, and I will be your conference operator today. At this time. I would like to welcome everyone to the Manning & Napier Fourth-Quarter and Full-Year 2021 Earnings Teleconference.
Our hosts for today's call are Nicole Kingsley Brunner, Chief Marketing and Strategy Officer, Marc Mayer, Chief Executive Officer, and Paul Battaglia, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 8:00 PM Eastern time tonight. XXX-XXX-XXXX passcode is required. number dial-in XC, is no The placed participants listen-only At all been in this time, have a mode.
Nicole floor If you my to the now It Instructions]. Mrs. over require operator pleasure assistance, to [Operator Kingsley Brunner. is turn
may You begin.
for you, to us and XXXX discuss Thank fourth-quarter today results. Napier's joining you and And thank Full-Year Erin. everyone Manning
Because these be these Before statements facts, to statements known call may this on statements. historical forward-looking made assumes including financial Napier I forward-looking statements deemed results expressed not or differ Securities factors like to important and and unknown Act of those remind forward-looking Manning there to to statements. the the would & begin, XXXX. are uncertainties, within forward-looking actual obligation during we everyone certain relating any update meaning that statements involve any could no materially Private Reform by cause based guidance, responsibility implied that from of risks or Litigation
may SEC During related Full to Executive in Mayer. and this release call call, some turn I our earnings the be Officer, include reference reconciliations will Chief can GAAP Marc. over Non-GAAP With found that, measures. filings. our financial to Marc comments
some return quarter fell continuation saw in you recovery Thank Last a Nicole. has benchmarks. of environment the bit of characterized Client were, strategies the if again, results even relative robust results that short period. pandemic the very strong,
on those detail provide shortly. will We
at volatility seen precisely is cover in turbulent I'd Anticipating and market to that when will volatile so during call might address full occur increase XXXX, moment have downturns unpredictable axiomatic. and will like problematic. that be XXXX today's While a is of quarter far we why and markets environment our take might times accomplishments the and to year the
but that professionals meet goals. returns as absolute and looking final responsibility us In it our design need to look advisors, to superior seeking deliver Whether excellence goals support to and analysis, clients, they also clients above solutions towards their private we us those inevitable deliver individuals less enables expect stable why results financial on through they clients valuable. less help calling and desire only to role they frame and or advice benchmark, financial that our retirement risk so and help for their and crucial over periods to the they superior is time outcomes pensions, realize. And rely not realistically results. investment required the on that and endowments, deliver advisors and foundations, are relative it our advice architected to remain are through realize their with can to is is financial agree is objectives. imperative they to goals. investors us us them Clients, cornerstones. execute, them so the cycles, to of it returns Then, However, investment deliver security This to the in a
longer news, equities vulnerable. companies, XX% duration to down hit December with growing down the start, earnings, sharply companies are Fast seen rising and a reported with have they So X% XXXX as including speculative global very rates disappointing delivering those more. and be their valuations been is more in peak well equities robust earnings around or has to from equities perceived are their those turbulent are high most the no off about when world, make
empathetic. demonstrated to the It big of out market real risk of both credits fundamentals must strive unnecessarily attempt by partner, downturns generate our entering money through statistical attuned of have management, crystallize whose because missing of losses volatility positions prices our period either always investors we of are experienced stocks losses, At if crystallizing a A in Over the market of to risk in the avoid of coupled providers management of loss of they our inevitable a isn't are plan, taking providing the them ability they allocation, need advice, it. the help volatile market time, prudent We react can all the by rebound. declines clients those put now trusted to the where some boats. moderate attractive. we same a can getting most weathering because valuable downside volatility; advice, not tide to sounded because We to markets if We alpha, build longer and with become right lifts demonstration advice sound from fact are we successfully of Volatility As risk, the in and phenomenon. turbulence. in context. are wealth rising appropriate decades or five credibility. we an be whose also comprehensive no or fear of disciplined asset while acutely long-term be to spite time, and advantage but
quarter slightly compounding per income We AUM, strategies, below to of in majority over delivered the multi-asset downturns. represent in blended across in flagship one is in strategy, the This shown after ratios and X/X albeit returns, X.X while upsides all XXXX, well benchmarks. XXXX our strategies, $XXX,XXX more of our have we than market fixed If million. compellingly today which worth in our X.X% of it million. upside X, growth years downside long-term X, great under growth portfolios; superior $X January positive risk-based million enough worth most pattern across XX, annum a XXXX, of market which XXXX. has fortunate now inception in participating fees is equity were invest In of our of have since allows long-term capture XXX% returned XXX% captured and fourth invested XX $XX
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quarter, over the will year. its are In figures on available another trailing outperformance year. points delivering and are fund X the the excellent versus In XXX decile its the fixed All Pages three supplement. group, high yield earnings material over had bond high well and X for our and Most the and of outperformance windows. fund also return the benchmark quarter top XXX the of and yields over three, discuss these we of into income, of five-year basis risk-based of periods. The XX-year Fund basis delivered points peer fourth ranks one, five strategy,
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and periods benchmark for composite income slightly down and our below well. the full-year. below quarter were the for quarter results Our portfolios were benchmarks for was both as tax-exempt fixed for slightly both aggregate Results
Our underperformed the quarter. fundamental in all portfolios bottom-up fourth equity
points For generated the non-U.S. basis U.S. over Our XXX while equity composite outperformance. our full provided year, in equity composite benchmark, its results with of line
exceptionally time composite equity and strategies core for four respective For to three a benchmarks. unrestricted five-year points underperformed benchmarks is periods, All year, global between versus our XXX trailing composite in with and beating over the XXX equity full the while explained by outperformed deviations are cases their basis our over equity equity market so. the some the by their oil of roughly and the these underweightings U.S. core by their primarily basis points, two
of XXX benchmarks over is For composite non-U.S. achievement. out its and front impressive XXX example, An points basis three and five-year by in our annualized equity respectively.
of Our Small as International over relative run, over return, its sister series Rainier XXX and MSCI XX results percentage ahead XXX our with well. and year of its real The outperforming substantially XXX and XX-year objective XX% had is outstanding full over benchmark three strategy one, it over outperformance exceptional, an outperforming U.S. second-half generated the benchmark International Fund respectively. REIT pushing benchmark basis quarter, time ahead results again delivering three, trailing five-year basis periods. Cap and absolute strategy's by points remarkable points fourth run The returns for generating longer and Moreover, full-year five, benchmark. its estate continued annualized of of Discovery its and of points remain
last return GAAP the narrowed to value its and Our disciplined year. full quarter series outperformance for underperformance
of multi-asset for were We are strong another results generally were investment proud for have Absolute terrific and well. relative excellent year and returns results as to equity strategies again, delivered clients.
entered through risk, portfolios its moves previously, highlighted investment of period risk believe with expect business global equal. rapidly to we the on has higher our disciplines, environment a cycle. our pull would risk As back else all economy Consistent as macro the we gradually
stands opportunity, award-winning our markets research of team to behalf attractive investment However, clients. capitalize present on ready buying should an
we initiatives both Turning as back year. the look now and the full quarter to on strategic
and $X.X then, the XXXX billion were fourth outflows over our slash the billion strategic past several and by investment each yet driven n over our outflows down just outflows has in $X.X total excellence we although $X.X experienced year, another XXXX, respectively. $X.X approximately trajectory negative rate to on bringing this progress Since improved in of flows net again billion net XXXX. to by in year quarter for we net able of initiatives, net Our half significantly from and XXXX, were billion XX% and flows years,
sales outflows productivity of of our signs We improvements rate our increased of inflows. moderate continuing to leading seeing while to are rate in
firm to at in return year have the aggregate for confidence flows We our calendar level positive an to plan net XXXX.
will and we net positive positive in our project has net be for few channel management flows experienced that XXXX. past already wealth intermediary channel Our the quarters, flows for
experienced are to will both channel of and be are recent their service We invest channels. productivity across continuing the hires A our number ramps our wealth and anticipate management client most in personnel that in intermediary we and sales faster.
on side, intermediary we the On and leverage are efficiency. focusing
improving base a to communicating with focused story awareness We opportunities. that adviser current we are on and resonates new partners, offering unique and brand of have our find and compelling our
continuing client number time-tested priority, results in our and strategies is waver We evolve executing our to will on one to take to steps for meet our needs. not processes. investment clients we are Delivering
forward ahead. is the environment. aiding efficiency, system both look flexibility this today's steps in building our the implementation. is and portfolio We as work and our fast-paced helping with competencies. It XXXX, compete in systems place now tax-managed in technology Significant our resource advanced and that are Additionally, essential already trading development Charles of capabilities River implemented will implement. in elements our will in are to us the forward workflows. remain will These we technology. will to ESG advancing offerings, we clear our integration. we bolstering significant XXXX, progress will competitive. made progress that in require continue we Also implementation only year and sustainable of Final tax tools In grow to in take will management is human importance Workday initiatives needed are year finance of investing out to operate our we agility, most further existing fully and to and XXXX, in streamline deepen evolving make now
Finally, an to to take and culture. moment people I'd like a provide update on
shareholders. with continue committed best to are having week workforce, mutual were and compensation We fully people. we the talent-rich, funds to to culture and attract in a alongside clients. our aligned Both last long-term to incentive plan have invested deferred as strive helps that plan our grants We our a made and been the diverse invest our have that clients great retain
We with ourselves. continue and diverse, set the diverse where a In were for female consistent our new and build workforce. to strengthen our of we and XXXX, highly culture XX% hires goals XX% meritocratic ethnically
year As on we believe strides I the executed look as was, our we back made I significant strategic key that initiatives. on
our advice, excellence, investment to Paul our shareholders. all aspects improved the call compelling over high-touch combined simultaneously been turn and I'll We the for effect delivering delivering has while financials. The major more of With upgrading client for economics that, are infrastructure. Paul. on our detail service,
client that XXth. benefited year during the million $XX of everyone, Hello, was management, and returns and from quarter. end strong client of up offset Marc. of We today. from with million under at billion, with AUM thanks of the market outflows at end as market joining approximately net Starting XXX $XX.X the of you, was Thank assets September appreciation XXX net the by for us flows December billion
by ended our last Gross channels. million, XX% $XXX year inflows XX%. and XXXX, client million from $XXX intermediary XX, Gross into inflows across for the AUM of outflows wealth increased quarter reported $X.X were increase gross outflows million Fourth-quarter and were million $XXX an included billion channel. over client last December institutional increased For the or million, quarter. $XXX management and client $XXX quarter, improvement a
On the $XXX fourth-quarter the of we outflows institutional another $XXX million reported gross management side, with intermediary outflows wealth of million channel. and from
improvement the of of with increased was Our observed and client what for XXXX. X% for overall from the the first representing AUM the rate point turnover a XX%, rate XX% nine in fourth-quarter months full-year Nevertheless, we full-year from outflows both rate XXXX XXXX.
we can clients, to the among an at the closer in is fund withdrawals our increase rate during from the separate account turnover that rate Looking attributable outflows, quarter. primarily see the clients our with mutual of increase coupled the
team. XXXX, increased the XXXX. our rate regard the that year, we that to high XXXX portfolios. of Approximately Importantly, by remained existing by on XX%, majority two-thirds clients explained institutional intermediary that net have from be billion by outflows are delivered came in with gross improvement can the of to distribution tells the inflows at the XX% $X.X their returns year-over-year account which their for channel, quarter, XX% for outflows retention separate our existing intermediary flows. we us -- over in client client Gross using inflows increased driven which Despite the through account reported our $X.X by billion
On million million wealth decreased inflows from XXXX overall to side, in XXXX. in the gross management $XXX $XXX
$X.X which XXXX were These improved in from XXXX. in between However, in are sales decrease gross sales included growth firm, inflows management transfers gross both in in and that by higher The outflows in numbers. in actually we in our stems Gross XX%, inspection, XXXX billion about financial million from reported increased improvement than client into difference outflows strategies, investment in by XXXX. the XX% publicly in transfers $XXX upon dollars wealth productivity productivity reported meaning closer decreasing consultants, $X.X the to the new -- billion inflows XXXX. between see our among
assets $X.X mentioned Marc net observed Further, earlier, a absolute in records of were observed into net strengthened track our client overall outflows billion $XXX we we our helped net our relative million investment As client our and XXXX. partners. $X.X -- that intermediary from in improvement of mutual gathering third-party billion and channel inflows funds intermediary through as meaningful for XXXX XXXX into and outflows in
International specific at yield for net looking high reported our investment Cap inflows strategies. Small strategies, Rainier year and we Lastly, into the fund
we've strong positive net and our ahead, Looking million. sales inflows for committed improvement we investment track last completed redemption last our the in on of this, an the remain XXXX investments years, based on during two our teams the addressed to anticipated target we Despite approximately call our our the made pipeline, in over records. January, of outflow institutional sales that $XXX was
quarter. million points. fourth-quarter reported margins to quarter, for $XXX,XXX quarter, a compared approximately fourth $XXX,XXX reported decrease increase the and partially we XX when decrease than the remaining quarter, to result consistent being an The actual operating of last revenue When P&L, of the expenses XX%, other compensation-related results. $XX.X XXXX. in of the last see Turning of quarter in Compensation-related the operating comparing $XX.X the decreases by compensation for with that our mainly to against of prior expenses and by revenue compared to basis based year estimates costs were $XX.X last that million fourth-quarter costs quarter Operating compared previous on million and was we increased less revenue $XXX,XXX decreased of with incentive compared distribution overall quarter at by costs offset expenses. is
Our down from compensation-related was quarter. costs XX% percentage a XX% of as revenue last
increase a came that deferred ratio million of license a into This X% a one-time we as reported last with of We expenses or And expenses small of $X.X other compensation of in from loss operating costs decreased of $XX.X With increases with $X.X in expense in and our will result, the the revenue. line Again, quarter $X.X Distribution, And expenses million quarter. of income our mainly technology revenue the longer were $X.X quarter, off generally move we in likely quarter, distribution quarter year no in implementation. achieve first a QX. the with $XX,XXX result, and margins the will during we XXXX. X% quarter. savings custody generally the As year million million increase beginning consulting last initial the compensation and $X.X program, income, operating two increase we the anticipate income the of QX servicing, compensation line as during $XX.X of both of the result we from pretax million, XX.X%. was million finished during reported million. operating with fees and reported quarter. non-operating by operating of
XXX back-office $X.XX were performance than is QX. Again, $XXX,XXX the both of benefits XXXX, all approximately revenue with net recognition costs, $XXX,XXX from operating compared plan. by million, Non-GAAP of vesting of resulting in December costs Other unchanged in year, improvement in full-year permanent in I'll a Operating of classes last revenue Other servicing, expenses costs savings is other of we mix by the million. due a expenses against year by at Looking deferred various in a financial overhaul, and about that $XXX in tax implementation start We in Overall, finished at per our incentive which other our as were decrease reported resulting restructuring increased team. equity stemming the basis compensation the related We with result expenses XXX our custody quarter, $XX that, to impacts our of from of $X.X driven and in the by percentage up Compensation December of staff rates more last slightly income of during XXXX million, XX effective The $X.XX tax when have points the improvement a for of that With coming that the offset book income approximately by as with and up $XXX were income million, reductions at down subscriptions software of strategic the offset third our technology from primarily was economic offset from distribution representing sales income of third year. for since operating operating overall line million year increase and as share XXXX the toward result by million investment XXXX, well by $XXX,XXX gain the generally quarter. the attached. as tax full-year and compensation, result approximately by last XX% in share from business trending year fees in savings $X.X XX% margins $XX.X results. a operating decreased reported quarter ended decrease from additions employees, Increased up Distribution, years. fact economic asset differences. awards revenue to revenue. quarter, of realized were growth $XX operating stemming $XXX,XXX, from summarize partially to do expenses $XXX.X year, increased income XX.X%. $XX we quarter, not Despite per revenue costs incremental the of to compared adjusted with for were was economic offset the the fourth a the is the in reported costs. rate to our $XXX,XXX XX, and The million the of which million were XX%. of XXXX. million is changes metrics,
the increase $X.XX, Non-GAAP a $X.XX adjusted over earnings XXX% share XXXX. adjusted full-year for which was share per Our reported per represents
and million on XXth. $XX Turning million nearly investments compared as XXst, December September what of to increase balance reported cash of We reported in an sheet. we to the $X.X approximately
from shares September as $XX.X to million within The XXst. investor components December supplement. count Regarding outstanding are of the our slightly million of adjusted provided adjusted share $XX.X of ownership, outstanding the XXth shares as adjusted decreased
adjusted count, December approximately directors but the including of our of stock. share As Class and employees XX% own unvested awards, A votable common only XX% XXst, of the
dividend We XXXX. we've of way share approximately related and on beginning structure by great cash third balance of reinstituting returned the quarterly the in prior As discussed sheet our to million $X.XX deal during accomplished overall by $X.X and calls, we year capital per our share throughout shareholders of XXXX. a repurchases quarter to
sheet we on I'll Manning few corporate A process, structure And subsidiary, quarter shareholders & at than of operating balance to Inc. which company's strides speak Napier, complex owned to a through first Additionally, there Napier while of more topic further exchange Group. are simplify XX% our time. & XXXX made annual the and the that Class the after of this the we're XXXX ownership, the updates Manning
units First, shares Approximately vest income stock portion shares earlier withholding another incentive of XXX,XXX month, had to a this were taxes the after XXX,XXX newly vested employee restricted we units tranche long-term our settle restricted vested. stock A of issued. under And granted previously due, approximately Class plan.
vesting. A Class our decreased diluted a common XXX,XXX while count stock fully share of shares So approximately increased, as by result this
we of RSUs expired another no the scheduled the for shareholders compensation are the to to scheduled a XX, And during the preparing process December replace vote exception beginning on plan new to other that XXXX. vest in in equity to RSUs are With XXXX. proposal later XX,XXX there this year meantime, vest of
the given equity-based awarded the of compensation five-years. of as into compensation plan, that absence year-end over our will incentives we form funds investments again part mutual long-term our the vest of reviews, in Second,
way outcomes long-term is overall mutual to ensure the funded of of meaning tool they and years. shareholder We time our believe five long-term the $X important employee, taken a that compensation a at it million fund continue philosophy are funds invested is on and pure next to aligned. of employees in invest behalf fully cash our approximately The that client, to will are incentives grant, have and many we award begin in over properly
first authorized the of and losses have security marketable begin the holding and board QX gains This plan. over will we this as balance appear in on a lastly, So non-operating our our directors sheet, balance a a no of recently new vesting potentially expense unrealized cash result the and shareholders, quarter will And a class long-term impact as will period our record beginning of increased us compensation will Returning shareholders our we program sheet priority repurchase share the up I will year. for to end at entire reiterate million focused optimizing discussed remain we our achieving balance supporting of that In XXXX sales is and $XX that today's have goals ramping to as milestone. in to organization We the help a the year. accomplish remains important on expire P&L as on net while to will cash and for there's positive our dilutive capital begin to XXXX. A use this appear client call, teams XXXX. committed flows during resources this incentive
forward on business looking and the start to transformation are work important and re-engineering We completing the pursuing work aggressively our resulting to digital on processes of synergies.
restructuring further We the our and lineup, will to in upon in the completion loss plan, evaluate the initially management GAAP charges one-time From Further, be earnings including that XXXX well transformation. anticipated continue are our began the by realized in gaps from Marc as offerings, our as digital our the that expect as pursuing in wealth reset deferred we savings financial product to forthcoming depreciation XXXX strategy of now are of that our we a comprehensive completed. will believe strategic offering. non-cash perspective, opportunities compensation service impacted increase efforts enhance as well that when
our in ourselves ahead intend cash and given results our and from changes anticipate be non-cash we've earnings of adding ownership to look EBITDA, In non-GAAP receivable delivering to and we shareholders. from value success, going income more be closing, our measure productivity important as operations will from instead and structure in a we measure, defined will returning on we related gains to factors, depreciation agreement, forward. our taxes, expenses and in measure losses to economic XXXX, move that these adjusted liabilities capital interest, strong our any as we made as representative tax operating believe amortization, under intend the improving about we before metric believe of P&L. including which Given cash on excited Similarly to while that our to net results, away based operations another financial progress we're the and measure simplified presence sales
the call. on fronts and However, today's as had in results as shareholders these concludes important each continues we XXXX, achieve begin to work strived we year. That for clients of coming
questions I'll you interest Relations Portal today, promptly over now back Inquiries using and any If for you turn Investor website, the the have in and for your the and to topics we'll contact listening call Manning on please on Operator. the & your address inquiry. the Erin. Thank us Napier, addressed
does teleconference. you. disconnect and wonderful at today's conclude This your Thank Please have lines this day. time a
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