BSIG - Earnings call transcript Q1 2021 | Acadian Asset Management Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BrightSphere Investment Group Earnings Conference Call and Webcast for the First Quarter 2021. [Operator Instructions] Please note that this call is being recorded today, Thursday, April 29, 2021, at 11:00 a.m. Eastern Time. I would now like to turn the meeting over to Elie Sugarman, Head of Corporate Development and Investor Relations. Please go ahead, Elie.

Elie Sugarman

to first call XXXX. quarter welcome results discuss and the for ended morning, BrightSphere's to conference our Good March XX,

we results and note statements please risks and statement get may could to materially Before forward-looking cause from that make projected. actual is that subject about differ performance. financial we business uncertainties Each to forward-looking our started, those

non-GAAP our the the and financial are Information non-GAAP regarding appears result part a of of in with on and referenced, of today's on including any of these reconciliation will measures. earnings no filings, undertake including containing today risks information make that uncertainties and measures along to Form website today, as forward-looking a Form found information based measures Any filed the can update events. be Additional new SEC slides X-K we measures, as XX-K. statements certain we them XXXX to release We our obligation our we GAAP those on future about that as assumptions reference or call may discussion. also this use

and investment to Suren nothing buy it turn shall Suren? to offer Rana, Suren. lead any call. Officer, Executive Finally, or I'm herein our solicitation an be pleased to will deemed be President the Chief now products. And over to

Suren Rana

for this morning. us and joining Elie. Good morning, thanks everyone, Thanks,

that the Q&A. deck. I'll on summarized focus And in to can key quarter on we we switch usual, Slide As my remarks of then initial here highlights X the the

and with received The pretax proceeds attractive stake of total million EBITDA for from and multiple at after XX.Xx quarter. the $XXX to current Landmark and the of end the we in quite sale close sale Affiliate near context million the EV our me $XXX and us transaction refreshing the expecting remind announced tax. to So, year, let March adjusted we're to this we that was start of valuation with our the everyone

So this for our transaction crystallizes significant value shareholders. unlocks and

announced has Given XQ operations. 'XX, into discontinued the Landmark effective sale, been moved

to X comprises our have Liquid essentially are which & we Acadian full in which businesses, growing to comprises approach and be we primary affiliate now business our and Solutions discipline business, Acadian, corporate follow autonomy while Both largest of our managing at well will segment. Quant center. TSW Affiliates: positioned, and continue lean Alpha So and maintaining expense our very segment; differentiated and our TSW, our continuing

in be resources, longer. along our discontinued the So segment. moved don't included operations, the to any Other has Global, segment with now Alternatives the which Campbell used Alternatives in included to forest been on focused Landmark now Landmark, segment, have we affiliate with

first our reported the Now for both for of the ENI 'XX. ENI compared year. $X.XX first Again, the share contributed for excluding is have with of quarter XQ periods year $X.XX financial results would moving was for Landmark. XQ for for quarter clear, to EPS and per last $X.XX to $X.XX quarter. this If of it 'XX Landmark be to We included, our

but 'XX us of XXXX. the to offset EPS had sale just for market year the last in already quarter Hanley obviously center; 'XX increase savings to if ago compared But is continued restructuring 'XX, share our $X.XX of EPS So XQ Barrow fourth the The add of if you about XQ XQ helped reflects driven share because and the The to by earnings that this to was compared benefit in $X.XX from than had Landmark. in that per quarter a by EPS reporting, the primarily we fourth since to reported relatively more closing which from XQ And Hanley, absence XQ our be the Barrow quarter since offset of the XXXX. compare finally, you're Hanley. Barrow was corporate would which that our flat in 'XX closed in market to the transaction $X.XX for of prior Hanley in we activity of for the in achieved results appreciation, factors year. These was of then; quarter middle no from reflected 'XX, about earnings disposition quarter. $X.XX Barrow from the we earnings of trying X not until $X.XX half cost the in recovery our we the the the repurchase

client reallocations but Quant had we outflows primarily strategies by in cash billion, negative of exclude & $X.X $X.X select were Landmark. flows clear, X X Liquid to $X.X Our quarter by 'XX negative In billion some $X.X cash 'XX. from in net net billion had And the the to positive Solutions. Alpha XQ Solutions in & outflows we net XQ clients. segment, flows in compared Again, be client in of numbers driven billion both or Quant were the

there of So lumpiness see flows, we as the a which don't in recurring. lot was

flows For and The seeing and far, Affiliates, now so X- XXXX. in their in continues to prior XX% long-term XX%, further the in strategies TSW, example, periods with be and performance positive the XX%, investment our X-, second performance QX Acadian segment. in key of strengthened to XX% revenue, benchmarks the we're the quarter XX% strong. XX-year quarter Acadian's both of compared XX% beating and by over of

fully the it our assigned revolving to parent capital XQ a level company terminated In facility 'XX, reduced and maximum $XXX corporate of size Acadian we with at to Turning management. million.

general to to So Acadian not their this and needs now is basic parent. only facility available for

quarter few previously, the in annual given Acadian discussed of the bonuses. first we've seasonal has the times timing means As a

for fully within seasonal drew on facility XQ and expect the this down $XX million Acadian in 'XX So it to the year. need, they pay

the at the at second end debt sale would sheet after to the quarter total seasonal of $XXX this, stood on the later the another our the $XXX on the in provide quarter, end million Our Closing at quarter Acadian us million. draw of cash Landmark $XXX the was tax. including revolver, consolidated balance Compared the million.

return substantially us So to provides capacity shareholders. that capital our as ample to well as deleverage

turn the call Now operator, at the this to happy and I'm answer questions let to point. me back

Operator

Your Instructions] line Craig of Suisse. question [Operator from Credit first with Siegenthaler the comes

Craig Siegenthaler

So this repurchases, return your year between Suren, should even capital about how and priorities special share we maybe dividends think a dividend?

Suren Rana

Yes. Craig, still it. through we're thinking

I another As the $XXX of expecting we're near earlier, said the end million quarter.

to those to be fully second executed. at and once bit deleveraging So it the point closing which essentially, uses then execution it. it, have doing the is shoot bag. But it do easier fully fully and it that priorities, the little we still the by in sale, terms And a which mechanisms capital on, essentially good it's drop shareholders. view in capital holistic is to bag, have The we're than -- the part having in returning near second rather certainty tranching Landmark that the or on and main always a the will we through working without now have are of but

Operator

comes from of line Evercore the next Glenn ISI. with Schorr Your question

Glenn Schorr

that conversations asset side. equities equity it have the appreciate to flows curious do out I'm little the to threw a recurring the quarter. kind I did the a of for I'm about just Quant color. on And of What more during a well? color bit hear quarter it's just that markets bit. you reallocation? But happened is know reallocations the not on me curious because still that environment more little and mentioned rising You a little and market the

Suren Rana

Yes. Thank you, Glenn. Yes.

taking, done Sometimes, doing profit maybe clients other you if haven't is well are move would some and well. do doing so some what when well, it to that markets happens are strategies and our will, areas

saw alluded lumpiness. There that given to some that's with the at we were factor the that I a little business, happened play institutional So what and bit. idiosyncratic also things

example, to client not too reallocating outflow a was concern related larger For of manager. regulatory a one because exposure a having much to around

do things So these kind happen. of idiosyncratic

inflows Now people some related to outflows strategies we of regular course, and at what way do looking invest. just are

for on right everyone's isn't managed touched strategy volatility necessarily of environment, So a we example, rising type that low on in now. mind have

a inflows. diversified happen like and So of strategies, there there that select But regional other strategies business, so are it's strategies different objectives very in things see strategies, are that. that

and it's some of So, but combination those, idiosyncrasy a all definitely of lumpiness.

Glenn Schorr

I innovation side, a little thought because was continuing commented other Maybe about the both my on you Liquid expand question appreciate be for that side. could that I Alpha product great. wonder the just on that follow-up just and on I bit if on -- that. -- could you Quant would

Suren Rana

Yes.

strategies. can new by support our encourage provide. that seed. terms terms in So the seeding Affiliates capital, do But we help continue themselves develop what teams are the where particularly and provide to feedback to really driven we efforts And continue of continue the Affiliates from on based to and them of we the that's looking -- we clients to for But we our to Affiliate are with in can products and clients invest.

essentially a R&D it's will. if So recurring you effort,

Operator

next the of of comes Bank America. Your with question Mike from Carrier line

Mike Carrier

given on for front, restrictions those been with way Suren, during to have the any the headwinds just active how or which the of sales for further franchise conversations in and Barrow Hanley had successful demand? buyers, that M&A led conversations? conversations you've Landmark, overall And

Suren Rana

M&A to play. scale. duty factors we've that shareholder environment we good businesses variety looking primary And are constructive. last our There And that maximize is, capabilities a shareholders for very plan, really generate we our and a The industry been flow. are or at market as has and definitely, good Yes. looking the value. over Affiliates the participants and is fiduciary -- have said focus years, for X.X are strong of our to And cash

get value, of to do time to we have and review that our result we and stance necessarily anything, don't along do the maximize as further. a with teams. we we we of time, from duty them open-minded we have fiduciary And So there's anything public anything, interest, a do if to but are discuss inquiries --

So been approaching we've how generally things. that's

Mike Carrier

Great.

return. an just Landmark, on strategy. like post Okay. And have update It you'll sounds kind capital on the of then then

assume buybacks? terms quarter, before should that, in of the So so much in we not second

Suren Rana

Like said, not really to hard It's peg. Yes. prefer to I we transit.

plan would have holistic a we amount. So essentially, really entire like the for to

to if anything, So But there's it we close of yes, reach getting be the do closing. once would closing. the pretty to wouldn't in much advance so we

Operator

line comes the with next Kenneth of Capital from Lee Markets. Your question RBC

Kenneth Lee

else anything you wondering there's revolving with the facility Behind that. share of corporate motivations just to the want that Acadian, to if signing

Suren Rana

Ken, I your the of we question. think part missed first

Sorry don't if answer I it.

Acadian. in of large what's ask motivation to sign originally, can got again, but I a that we I terms to has with we cash had million building which You facility, up. to deleveraging the was $XXX think it reduced because we which really had revolver And that the do

So for we that didn't much credit. really need have a

a not it off mentioned, need is seasonal quarter there for as And reduced first long-term we every and than pay need a then first. because then leverage year a to quarters have more revenues in I that. need So bonuses. Acadian, earnings at pay is And do the we subsequent which

line need. it's classic And So it's at a more credit Acadian. needed

So it's we have. in of the draw any capital we credit sense leverage level, there parent we that it's EBITDA to EBITDA. basically it at because is the from low given need leverage don't for million very Acadian's their really excess a have the fraction perspective, moved And also a relative $XX

So meets pretty facility robust it's a needs. their that

Kenneth Lee

helpful. That's question. And that Great. my answered

if good or the strategies you've highlight seeing quarter. I could products you follow-up, one may. if some been any Just Wonder within just demand that

Suren Rana

It's that Ken, of kind diversified pretty overall. varies Yes. quarter-to-quarter.

managed in good lot at equity strategy didn't guess, And Acadian, this Acadian saw on -- this most board. on strategy. are of numbers wins, demand they in continue we're seeding, of volatility I we volatility, TSW, to So traction. touched saw some maybe demand. a across demand the that as Alpha we not see see some international these generally, you touched I otherwise, get side. we've new big strategies pretty this while kind At on we was in one of one But good low Liquid seeing environment strategies yet, earlier, And flows

see to the strategy, and beyond leverages same seeing approach traction equities we we're which goes high For example, and but multi-asset the data good -- multifactor philosophy, there. continue class

Operator

comes from Stanley. Cyprys Morgan question next of the with Our line Michael

Michael Cyprys

management. another capital Maybe on just

an to pursue So it that think that. until thinking the able you wait last conference much guess, could it any be sounds like months, or you be would quarter Landmark is hear and hear how that in which this we suggesting elaborate -- call. sorry, the scenario be quarter sale little you're next maybe or you sort that? conference I I couple an of were hear expect closes third would or we what's see hear when quarter the call to quarter right? would you update sooner -- before, second something would Is than X Or And July If correctly, or how means I deciding on waiting bit before, update. could the if quarter's to long? are just so on a the of why some in where suggesting

Suren Rana

Yes.

changes Mike, first It after that -- part, so would probably have of on earnings of then. on we're know And or within obviously the of a the were call. of magnitude we closing second capital would yes, But fully that's reworking, have, yes, you our to our looking we the part, the And a one. sizable course, that So in around to sale months a That's be terms part Landmark call, if then accurate they deploy. have probably an of looking next around or approach. earnings which had the right -- the expecting Landmark, so few definitely If then. last deploy. that we will, essentially from on of update the are capital we development we hence,

Michael Cyprys

Is were prohibited theoretically the were those also earlier such of because would limit buy correct buying you your discussions? that over back from stock theoretically if to year you next to stock around in if given sell you if that's selling months, you something in today were of And fair theoretically, else, it were and in couple discussions? Landmark, if also ability discussions the that discussions in back

Suren Rana

from constraints material of before or We a on anything do we particular of business. of if are earnings conversations a or the Yes. type -- in time are to terms in we those in time buybacks have blackout Yes. part real on material conversations window if

restrict that time. So would from us time to

Michael Cyprys

Sorry.

last one Just one.

and a scenario sort left to you What small there's could Campbell a small out? but sell business of Acadian were company, lot a of position in but a how maybe of do the and business? off TS&W, think smaller play cash cash large then about such you entity If guess thing significantly with here, public public sort I

Suren Rana

generally We of specific kind would scenario. not Yes. consider that

with And we -- As regarded the see the came saw pleased But But if duty, it's right? the even them. the As I our some you said, very perspective the Liquid is are businesses, which the strong world. from ago, flows. that's many we not so Acadian, fiduciary highly leakage. tax and consider is with of bought we a we do inquiries with in our with Alpha, larger around Landmark, of course, business much years very have business more some a tax you there And leakage. value, reputed

-- something. would in be also would factor we considering So a that

in be is have sell So likelihood. that ahead. business tax largest the scenario compelling business a that, would spite of played our and out and build we pay go big a smaller probably that no we that's only so It something

Operator

KBW. Robert comes from line Your Lee with of question next the

Robert Lee

quickly, questions. real X Just

if Liquid is just a TS&W to TSW the question. kind that's of -- think or beyond there anything run anything -- you're only get there a I guess? segment, of million quarter trying the we largely I if EBITDA the to or there $X right that around I'm in a guess is rate. maybe want comp run First, something trying Barrow, is actual In that now, first That's without be modeling seasonal good Alpha anything handle -- rate, just to clean as good first adjusted that's question. of

Suren Rana

TSW. basically it's yes, mostly Rob, Yes.

ICM of that's Now be and to we announced sale our in XX-K, the closed.

flows are there So as and ICM well. in results

basically -- there essentially clean, slight but is so will noise. it's that So

into it would say not flow doesn't it's But would P&L. quarter full a you TSW. the next I is mostly income, another essentially, so but be quarter, it -- clean can ICM Now, consider

Robert Lee

revolver I Acadian. that mean just transferred another And Okay. quick the on question to you

whole to nonrecourse in every [ph], every in that's complete but Just I, moved dot cross it's there -- and the T down no there's stairs company.

correct? Sounds

Suren Rana

Yes, deleveraging essentially was driver. course, touched -- that as And was of a is it I on, right.

it it's Acadian So BSIG. Acadian, and nonrecourse leverage very low to to at by having moving ratios

because it consolidated in not debt, BSIG. right. it's that our nonrecourse So to is while That's apples-to-apples it's

Robert Lee

this Okay. tax about of or post deal you the there addressed And any tax is is remain at noticeable used prior much just asset meaningful guess your up? or curious, in that the will I it kind holdco, Landmark But comments deferred leakage. pretty

Suren Rana

Yes. We Barrow with that we pretty tax much we the last well the as others. had and earnings used assets up our as sales year deferred from had that

actually, much have Landmark, didn't use. with left So to we

Operator

Your next Justin Ziegler Vance. question with line from Eaton comes the of

Justin Ziegler

the to on revolver follow-up transfer A Acadian. of the

beholden up as that least the are center the basis nonrecourse. apply still what to corporate debt on how that, Are the You how EBITDA And you do this flow that the and affect in available might -- still there doing And to of those just center holding mentioned at kind of kind company guys to be it's in does cash in But well? leverage to does that at covenants? bondholders of terms how have shifts holding them? the unsecured company? --

Suren Rana

Thank asking Yes. the I Yes. that. Justin, It question. material, so seems wasn't in appreciate for like you, the it clear

our have benefit So did essentially, the now have because such not revolver. we we debt-to-EBITDA have parent covenants the a that level, our covenants. is any But don't did bonds debt-to-EBITDA at covenant that on

at So you But by the have it's don't corporate at the close their multiple much Acadian drew. quarter, they how a out on recent Xx facility. to by level look of having is covenant -- There level. covenant it if EBITDA, of that moving parent the we most the at structure, debt-to-EBITDA

a servicing such where had problem that scenario in business next we come and of a small scenarios extreme -- level So terms restrictions of at us, an EBITDA. there are a of scenario. debt in except was to wouldn't went scenario given of There where, is portion distributions if course, only is course, cushion their the this ample is think away, -- inconceivable which, really all that's our to you Acadian

No no essentially, leverage a levels. level. it's our covenants very low on distributions at and a the prudent Acadian So approach, that's restrictions parent at

Justin Ziegler

as Okay. about got coming of you for the given the But leverage company Thanks holding kind I what's EBITDA, intention you of how call your for the that area like XXXX, in by think you end And you less delever. mean stated forward you've have up target clarification. Affiliates maybe the the year coming think at to about that? June. with overall X going forward? do And

Suren Rana

mean we Xx our I we of generally, total example, leverage. have on terms And Yes. cash have and compared, of $XXX Landmark. the -- our we want shy would from seasonal in sale $XXX need, And stay then below coming million for basically already -- the excluding to have of million, million $XXX another course, we is we of do bonds. would

leverage not in So essentially even we multiple, net have lower. want EBIT-to-EBITDA terms if on we stay pretty low of below to generally basis, Xx, but a would

Operator

this are questions at time. no There

Suren Rana

Thank everyone, to for to talking next everyone Great. morning. And this us we forward quarter. you, look joining

Acadian Asset Management (AAMI) 1 May 212021 Q1 Earnings call transcript