BSIG - Earnings call transcript Q2 2021 | Acadian Asset Management Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group Earnings Conference Call and Webcast for the Second Quarter 2021.

During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions]. call XX.XX recorded AM this XX, Thursday, that at XXXX Eastern note is today, being July Please Time. Relations. Corporate I the would and of meeting turn Investor Development over to now Elie Sugarman, like to Head Please go ahead, Ellie.

Elie Sugarman

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

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

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

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

Suren Rana

the Partners model. important and press me Slide start May of collectively shift summary last deck us morning begin today. you, in release the presentation transaction that We the with and the on another other we for ICM. sale week, Landmark still record that our of TSW will also quarter and mark Acadian, let business stock we earlier quant thanks developments, in a sole with a divestiture recent on transaction we as outperformance. usual closed great the in be And affiliates, Global the few of announced divestiture closed of manager our Good third a in two an of transactions this joining Campbell Elie. is of sale this Thank market-leading as month, year. announced closing X with everyone business for of and a completed, of will the After affiliate, I expect

to to will we transition manager our model, a point, investment through a have a single Acadian's referred play what's pure multi-boutique from that at business providing investors multi-manager So, as differentiated full focused model completed or business. highly exposure

year. our these last We have July discontinued these their moving numbers been to financial for for of the in share after include the for reported into of quarter of the of and may $X.XX quarter. TSW since periods ENI analysts the second $X.XX guidelines But results quarter this work. accounting seems the Campbell, included earnings Landmark have several operations. excludes year quarter. just ICM for sale TSW given second to moved the and in compared the since Now per how both estimates It TSW second ENI end still closed do they

the to make the would have would point if included to which XXXX, another make for it So, I EPS added quarter $X.XX. it compare, to was EPS in results, want second easier to our out TSW XQ that $X.XX

Acadian. closed ICM sole expected go-forward close and mentioned, these sale Campbell focused As in is the but results, to is our now now Campbell in and really third quarter, sale I included still business ICM are we're since on

Acadian. to zero turn Slide So, to X let's in now on

focused increase and was the differentiated rising significant the driven of million reallocations to negative quarter quarter in have the quarter The you such with the XQ relative quarter of market as an billion, the in had. our of billion, has of XXXX. business strategies a AUM compared second $XX strategies EBITDA sequential The first select to XXXX were scale, Acadian flows to column relating $XX business. driven $XXX in net volatility very markets both generated increase in XXXX revenue second we by turn the for low given can higher the AUM the the Acadian's in million see generally XXXX from biggest As driver EBITDA of appreciation. year-ago $XX particularly the quarter million quarter by $X.X from first in prior in primarily for and in

beating over three, help record track will respective this over the revenue, their net and optimistic five, on periods. and at Looking in Acadian's left flows see XX%, further XX%, We're by hand investment prior growth organic this of with benchmarks performance long-term quarter the strong lower on time. chart, XX-year that that XX% strengthened robust investment the performance, you and strategies can side generate

Turning on June our to Slide of million. our XXXX, $X,XXX cash as and balance sheet management XX, balance was capital XX,

more over they due balance just proceeds hadn't yet. include We the TSW, of Landmark, been Campbell ICM, the from grow few taxes weren't months billion after-tax to to than paid the and sales, on expect sale which $X.X on we next gain since this pay when

our balance cash pay expect capital return down and to We deploy shareholders. to to debt this

of As XX, June million. notes we had XXXX, outstanding $XXX of

would So, $XXX our net million. cash of balance, this be debt

as So, and generating EBITDA our distinct $XX company than can of net currently more million of the operating of basically quarterly million. debt parts, of cash business balance our you two think $XXX

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

Operator

Instructions]. [Operator

sir. the ahead, Lee comes with go Robert line first from of Please KBW. Your question

Your line open. is

Robert Lee

on questions. years -- with, with specifics more and have good Could start be little would I I that. taking but Suren Suren, mean maybe the in capital Thanks debt, talk maybe you And thought you morning. Great. understanding, what the down have all a earnings, pay could guess return off would may set maybe concurrent Acadian, how maybe my for -- been bit it believe retail to callable, follow-up the think Acadian? haven't much already I quarter EBITDA core we the a of with notes performance we that for far? that had can to adjusted particularly a thus in of related fees Thank it then of is to is And why what EBITDA you. as the and as the kind question, specific for

Suren Rana

Yes, Rob. on Thanks, the first question.

our amount we right, finalized large have You're not a still rather the capital. capital. around plan It's action of decisively

So, we tinker. continue to

plan high the part million it's least shareholders. the is for so just level regarding to as XQ. retail yes, execute straightforward. is fee yes, However, to for notes -- And But, capital at least Acadian, we and -- capital more have down terms quarter that EBITDA we before second said, to returning want in there similar -- is to debt pay yes, returning it of to pay sequencing, $XXX plan at first this of shareholders. we've performance part agree, Yes, entire it's holistically. And had the I we

performance -- As you where of is quarter largest fee our the we amount the is generally know, performance have XQ largely fee.

Hope don't is you call this we average answers have quarter average, probably, this of fee we if in when larger normalize be least there it full So, middle is when of that performance it now, you probably to your performance in out years certainly quarters. question. it's earlier of would at year. fairway may and because XQ quarter say were fee median But sort the a all that

Robert Lee

Yes. Well, may follow-up. be the

had So was asset levels, which Acadian's more $XX that's of I in driven how mainly was EBITDA, one-time was can kind that get sequentially a carry adjusted obviously guess, million the be related a performance talking fees, going million that guess And I quarter? trying maybe the driven by Campbell versus of maybe forward to increase we Acadian, to and increase market that of $XX performance to Acadian, about much Global. sense maybe also of just of being fees of the I'm EBITDA kind nice

Suren Rana

I so which that mean. million the about Acadian more broken from performance right, $X that Yes, Global, that million doesn’t fee $XX the -- million in that in breakup there Campbell out. information, really and I get segment of $XX you're see provide guess we see, you only our fee was was performance but you what

run mentioned average XQ earlier, and And sale there only as Global quarters, $X is more in don't which we Solutions typically is the as So, announced & of included sort higher. segment that's be it the rate I Campbell have of -- an fee, because Quant can performance course have fee. think the breakup you in times million and what's so of earlier performance would of maybe

Robert Lee

is That helpful. great. Thank Okay, you.

Operator

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

Your line open. is

Kenneth Lee

thanks for taking my Hi, question.

in some expectations near terms quarter, are and environment? seeing Acadian, one client term, in strategies potential some are about positioning, you this what think seeing you what garnered on which reallocation wondering and Just growth the you for your products activities in of the Thanks. talked

Suren Rana

we of a basis, with than is are pleased Yes, now the because like that overall it's hi, on Ken. very Yes, I three-year and performance right more XX the XX%, look XX%, one-year we performance at five is XX%. firm know

are majority benchmarks. their vast So, strategies of beating our

positions of while volatility really delivering it's the in guess would clients for expect, this category are market So, necessarily choosing benchmarks. they guess, have of rationale this some over volatility example. they I their that, core volatility in low we targets, of that don't you I expect expect low But environment, would because some rising should or beat the environment macro low kind do clients market and that strategies that take

seeing But most record is strategies, essentially the negative good. where the we're that's track flows. their So, of

market, but meeting about some in all periods, than we things And optimistic across change strategies given time are than of by benchmarks, so forward. that cases going their XX% more outlook these the the more essentially are XX%

Kenneth Lee

one follow-up I very helpful. if That's you. Got may. And

strategic Campbell could a changes any just as down this be fashion? thoughts as share such expect and if Acadian, Thanks. you're you within just operating quarters divestitures you'll any essentially around wondering come plans, you pending the longer-term could in With with that Global few us

Suren Rana

Ken. thanks Yes,

have really we to essentially a essentially transition have model. manager right completed So, would single our

were was was we've anymore been won't in focus we and got that interesting prices always valuing to had and when that we've discounts. the took our is what than to also more another the market said dichotomy we that multi-boutique where them, shareholders a market as value we a value for shareholders. always maximization But create assets our multi-boutique the and for with the affiliates sales So, be had

that a very It's we So differentiated it's business. much can investors manager, scaled pure are and now that it's play easier, exposure expect. a single

strategically know So, just they very having as are reason that the found different businesses divestitures, roof. for limited what past, of have we've we and investors synergies in one the multiple discussed getting under was these which

initiatives customized dis-synergies in each weren't necessarily the were not maybe with some In fact, business. there tune from of that work, coordination central needs

to investors it our business and has marketplace we simplified we understand, a much this simpler for benefits also So, providing has and us. think benefits think also the it story operational for

Kenneth Lee

Great, Thanks very again. helpful.

Suren Rana

you. Thank

Operator

ahead. Morgan comes next the Michael go Cyprys line Your question Stanley. with from of Please

Your open. line is

Michael Cyprys

Hey, Thanks morning. for taking the question. good

front, management capital when from restricted I conversations around on you're buying or restricted know past, stock. in you Just are that you've the might back be in selling you certain businesses, mentioned

to debt side, from how if Just that restriction how sort curious there to are extent side? there if any extends that redeeming differs and -- equity debt the of restrictions the what and also on

Suren Rana

we and just the on retail I discussed think restricted. the do we We are mentioned there straightforward. to like on redeeming execution from notes would the don't easy capital There relatively I more debt would that guess, But sight time. to probably are that it's, isn't guess, as time with much the said if are I apply Yes, to line redeem. in time advance. plan would we've We yes, things time that, Having it. can from non-public that to notes risk of entire to retails on, be because going repurchases, restriction

Michael Cyprys

any And the the for color on timeframe notes. retail just

can is the year? straightforward, we expect or here more in pretty is third quarter the or maybe that mentioned year is You something that later next in that

Suren Rana

really a aren't timeframe give retail it's I sure, holistic when first. I start mean just we we when will guess, straightforward. we necessarily just but the Yes, a it with hesitate to I be have because happens, relatively very quicker. will notes it plan, it's

Michael Cyprys

but And Acadian so million a in the results, & be Quant question Okay. just just performance on in quarter, your you or wanted ICM rate, quarter, then about a and think the go-forward Solutions this segment entirely the you flow, of good segment, maybe which terms I of and the think segment, reported affiliate could should kind to the follow-up in there the a to been a kind basis, just clarify, about now one run just segment to I all right and the had to of the impact thinking rate you run of as that of the $XX right and just Campbell hear is elaborate which in how on had the EBITDA thinking but right other bit about in rate if run on also ebb more fees, other there? think about that's how pieces that's the of movement historically moving of the what be, for it center costs

Suren Rana

so the really right Quant and Acadian we're the the segment, rate is is that's Yes, in the on Solutions & focused yes, run $XX which million ballpark.

run seasonal for or quarter-to-quarter rate $X Quant course, happen are there the some right But $X million million Solutions. Of about things & that items. that's

moved Liquid to included alternatives Campbell and but since the there QX the already to is It's to and ICM again we other the Alpha say results in Liquid The center. in and segment the I to segment which other. used that's in other be temporary because from now. now but in Alpha is used in other closed, close, for in expected that's have segment would is Global the

public would Campbell, closing of like closing be closed, it's really segment used one call team anymore, So we responsibilities, is the center will just ICM now. Campbell on Holdco think basically ICM center be. as in this because to business it that we then not now it, our again, that with of people And given the the used center quarter is that's it as focused just to handling but and of more department, become already really company other

would time, of expect we there public EBITDA over in that costs, $XX and going So, more to handling Acadian so the efficiency from the company million goes full shareholders.

course we to the of can year have efficient. last continue a over half more and and more We proven get that

the to overheads. if were costs. not the we'll buyer there minimize So, always public an a look would Also, in need scenario, to acquisition ever be that company

management reasons those are business. operating in these for EBITDA and our produced view core we much focused by costs more perspective don't a other from really So, as the the on that's really

Michael Cyprys

thanks. Great,

expect what for on a of we I that to of there, take what eliminated that? view that So, other can and to I guess, get taken segment. basically have realistic near-term maybe quick guess, that get, and for XQ sort to what you to closer XQ actions public sort of kind as sort timeframe just follow-up corporate your the that is how be into it of then in where really company $XX million, just a overhead and achieve would really

Suren Rana

Yes.

So, in the that would to probably it's time. just whittle probably really would is but or costs, that be million we quarter to over have of would XQ ICM when which in two, but side. and there smaller. ballpark was quarter have continues get more and and would -- on scale, the other when we $XX the time, of a XQ a Campbell, not would you see to But expect month continue longer that headquarter over Acadian can we we'll as one we continues yes, smaller it's that, down It's than it do

Michael Cyprys

thank you. Great,

Operator

Your next line Glenn the with go question from Schorr Evercore. comes of ahead. Please

is open. line Your

Glenn Schorr

investor follow-up on shook any in just to or that. And more was came staging single this Thank down boutiques sold your you. partner there order benefit how prices. fair a since the interest with good I the think to that out? get on function hindsight, the off some and of of shareholders manager to then specific of Question, or -- gotten the selling you've now or Was Hi, deals you've value sir. model where

Suren Rana

we've the unlocking for as Yes, Yes, open-minded -- value on been about and we've we've Glenn. been said, shareholders hi that's been to marketplace.

out So, in, legitimate have team, conversations we worked forward. as for we and inquiries and those our the for us, have had come buyers, where for things moved

it most and that's for would So, largest the say staging have as differentiated I it's save and best also that they the except because business, now, business last, largest. particular would say that our Acadian being we make sense no

as to tax would an If sell hefty. asset, be the bill you business this were

So, the I probably would only say that's by design. one

Glenn Schorr

then is tax had time. the of right calls list it or still yet the conversation. Acadian a on, words, follow-up price haven't of partner, was the other In on potential and it liability meaning found this I that Okay just a take -- just the right matter is you'd you that just is things laying just is

Suren Rana

a serve a business very very well. track record differentiated We're it's happy in areas it's business, and scale to clients the a with team, their great very great

happy the public the So, to we really maintained to party very the that consider At keep shareholders we've our markets we're was to is able business there to we was that our always think for duty a that and it. it fiduciary a it's shareholders, time, award our good same extent going. would

Glenn Schorr

Okay, cool, thanks. Thanks, Rana.

Operator

Cyprys question is follow-up Your the question a of next line with Stanley. Please ahead. from go Morgan Michael

line is Your open.

Michael Cyprys

taking the for follow-up. Thanks

you're strategies, three those well more flow able across you. would Acadian say able that trends or hoping contribute Acadian, that seeing on us also some Acadian? help the of AUM? be they are to of three the to at also are versus ones maybe strategies if I strategies trends seeing five challenges business, which flow that seeing could more might the the flows the each just remind And was top you in positive in you in maybe or top quantify ones at and -- you're us you as help if how much Thank Just of five

Suren Rana

provide a on something Mike. we thanks in we all. what that of and on we slice are terms to you That's how consistent actually quarterly working dice -- it will Yes, basis and --

next onwards. quarter So, will that we probably do

enough different have the to as strategies there's XX% bit than XX%. right There recovered low-ball is less But U.S. global Then be the have Europe, as we've we XX% a of markets. of of variety some managed emerging there non-U.S., group etc. AUM. developed that's or slightly a objectives which -- That of for said, level in of maybe regional of about geographical that's have about level, the markets is we that's strategies and terms people are well granularity. about than In will our

there's are traction. it's a then class newer and great -- variety multi-asset that strategies and like So, doing well some getting

you other have that's demand. market less you it's when getting in that are strategies So, quite have are that and diversified some strategies in environment, rising why demand

So, will out the -- and figure quarter that. slice probably of we and dicing with sort right next dicing and report slicing back

Michael Cyprys

EM Got it, more I If what in Quant quantitative do more just informed guess, Quant, okay. the what just strategies just the strategies global that's spectrum and part help any in there, investment but fundamental, process, around well, be more just would helpful. about say portion the versus equity That'll AUM about Quant some there I the strategies, be the or and how -- is of could more that strategies you imagine think of the that of is you result of just quantitative appreciated? would fundamental, maybe more managed of are one

Suren Rana

Yes.

Our entire Quant. business is multi-factor

team that technology, and of academics are by core the we the continue to that is have, in we and data, continued and So have have core improve same core of informed philosophy, investment decades that the and which process. all we that invest researchers the to strategies technology data the by informed

multi-asset newer our So, beyond in class, equity. we're same the applying and across and like approach strategies strategies philosophy all that's applied technology including

Michael Cyprys

thank Great, you.

Operator

over Rana. This like the to concludes would session. turn Suren question-and-answer now conference I to back our

Suren Rana

single-focused we progress to operator. -- us. for this to reporting are And Thank business differentiated as and said, joining I you. forward then by this we look about you next you, transition Thank a our quarter. on excited Thank everyone

Acadian Asset Management (AAMI) 30 Jul 212021 Q2 Earnings call transcript