BSIG - Earnings call transcript Q3 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 Third Quarter 2021.

During the call, all participants will be in a listen-only mode. After the presentation, we'll conduct a question-and-answer session. [Operator Instructions] Please note, that this call is being recorded today, Thursday, October 28, 2021, at 11 A.M. Time. Eastern like Corporate meeting Development now Sugarman, to turn of Head and to would over the Elie I Investor Relations. Elie. ahead, go Please

Elie Sugarman

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

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

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

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

Suren Rana

a kick key off previously we now forward, is We announced and be of the the quant X Global. impressive track everyone outperformance. officially and affiliates. sole Campbell love. third year, of manager thanks And quarter of Thank ICM joining presentation record crossed Acadian Well you, an today. you'd our operating going which will of market-leading with for divestitures morning, Slide the Elie. I'll in us milestones. with this closed three deck as Good business TSW, the on

a single which full exposure a our So now differentiated a investors from have integrated completed business transition highly Acadian's business multi-boutique to business. to we will now pure-play provide focused

We the reducing leverage. of fully while our accretion these excess which generated capital six more notes at completion affiliates involve than from and capital paying quarter million likely our balance excess our earnings will this to $XXX in fourth also down deploy will divestitures and significantly seven retail our which transactions of $X our generate collectively significant expect of now of business repurchasing shares of deployment The attractive sheet. valuations our of and simplifies billion

So going Acadian BrightSphere the listed. essentially publicly is business just forward,

the our financial quarter. for We $X.XX share from is quarter in year. after buybacks to change year EPS moving mentioned. have There Now, compared will third this third for to of ENI other $X.XX of last these per affiliates I quarter sold. the of the noise Also, base some the coming in the comparisons now reported been results share ENI which

business operating look would financials for topical at it sole our forward. going So the to be Acadian,

generated of because third the The fee in Turning million primarily due XXXX. in zero of to of of in million third is performance The and performance measurements adjusted fewer quarter to generally Acadian. 'XX, Slide XXXX X $XX.X quarter lower to 'XX in second the compared we 'XX compared business on XQ quarter. in the seasonality to adjusted EBITDA have $XX.X XQ fee in to EBITDA third quarter the million $XX.X

in QX of 'XX. quarter, lot We the be measurements expect would we in have hence so EBITDA to a our performance and fourth fee higher

of XQ better XQ lower 'XX We reported $X.X $X.X reduce. as outflows flows XQ net of client billion net volume Turning strategies in to in and in are billion net net outflows our $X.X outflows of to cash getting continue 'XX. billion from outflows compared 'XX to flows;

leverage chart with left-hand benchmarks by revenue beating at billion XX% AUM combination differentiated see of: on scaled period. We're asset XX the strong on opportunity Acadian record XX% take help the heart degrees with track across over also on long-term track record of and the daily unique comprising flows be allows At can X, X-, is lower one, of strong, and provide XX%, net On optimistic long in and with geographies. very respective a years. it's will a Acadian advanced finance you technology; business the that performing two, side we business exceptional XX,XXX revenue delve and observations for Slide assets for comprising investment and around performance talent the globe; would other the data, our and their our research and like specific of that performance, million X- PhDs strategies XX-year academic Looking of weighted more. classes prior to over continues traded Acadian's time. to platform. to high-level and a people into bit our generate across organic data growth a little this and advanced technology an that is $XXX us and this robust the platform I $XXX overview Acadian clients to investment three,

other invested I more capability long-short, On across AUM revisiting deep Slide spread is outside ESG bit detail. volatility, multi-asset U.S. note different a X, of our our XX also managed XX% performance will approximately again and investment than in with that AUM strategies. long-only, across the areas We class, have And more

our periods strategies across revenue would also benchmarks. long minute their I Acadian that summarizing platform outperforming by like a to with spend on growth Slide to XX% XX, You of XX% can outperformed short and see strategy. has

There's scalable. have Our growth is solutions are strategy going and and our and our for of strategies offerings a demand organic. primarily forward capacity a growing majority

our our We needs will provide leverage their by platform quant continue to as sought to solutions clients evolve.

that. of an offering example class Our is multi-asset

given asset is another market factor-based solutions ESG a demand expressed of sought our a that capabilities, the impact others need through The as we or particularly precision is lot for example as methodically clients more classes multiple factors with growing the security just opportunity any Our well for solution equity. ESG really covering a returns the beyond since could. than can quantify on various

products invest will see continue in innovation. we to and new So,

to for now for our point. turn realize back will our the continue technology in On our we always look various that invest We the add to we happy to note, the to evolve. additional continue on our And to questions as remain at ways to let will And continue will edge. distribution all value this the cutting we're shareholders. operator answer and me to needs call to

Operator

[Operator from Capital Lee We'll question take first with our Instructions] RBC Kenneth Markets.

Kenneth Lee

Hi, my question. good morning. Thanks for taking

fourth of one Just or an accelerated quarter. share in share -- terms of you're It on mechanics is amount Wondering repurchases significant a thinking about tender if in repurchase? of the shares. the either offer the a

Suren Rana

size, take Ken, just most the of relative market it's as long a given time. you our alluded, only yes, cap, option tender other probably -- as particularly probably to amount options is the offer

Kenneth Lee

environment? strategies best there sounds I prospects growth Got particularly very breakdown within excited which you're overview ones then, the -- very particular current broad about? of there you, in strategies And potentially appreciate business. the franchise. And set the a helpful. of and which just you that -- are really have any like It on had the the further the one Acadian

Suren Rana

some good of right? any maybe Yes, strategy there that essentially that having strategies Thanks, That the -- of I some Ken. are so are there's guess, number solid high and is there always much a are in environment in that advantage not as in always diversification, demand. are strategies demand

get during traction of ESG to And a it a bit unique we because as emerging for always some -- And provides you which excited the good have exposure of very classes also In very more that continues strategies, we're earlier international current my equity. seeing Multi-asset to I mentioned. So introductory is for recently, way theme, class, the is of a little example, we something scaled in that seeing for diversification continue some develop lot to demand a touched we that provides across quantitative example, on remarks. other developed have for for we are that new products asset we about, not example, environment, benefit products sell. which of demand factor-driven capability. our markets, that are that

have and the alternatives equity of We derivatives strategy. that terms of multi in

of a of strategies them whom or from have strategies, there guess lot we smaller in any but that we future earlier-stage some scaled always are quarter are then we now any excited some said given very I it's tag that -- are growth. of And demand. right the period, given So about are a perspective

Kenneth Lee

Thanks, again. helpful. very Great,

Suren Rana

you, Ken. Thank

Operator

Wells Next, we'll Fargo. go David to with Eller

David Eller

new the taking question. Hey, story. morning. good you I'm to of the Thank kind for

last the reposition over a You've business. of work done lot to the year

sold. getting a the done attractive valuations job for you've You've fairly pretty good businesses

managers. better another it shopped Would wondered the most think if shareholders? would little hands make maybe or question; well? the you And asset related could owner? makes sense then, value a bit kind talk create sense about new you platforms other was Do repurchase why be and of for look seeding of versus a as Acadian emerging of management taking at large a kind I in way that So share to the

Suren Rana

there's unpack a to lot yes, David, there.

and X.X with me our taken -- years of unlock steps So definitely one maybe start a lot let yes, simplify last we've the value. first business that the over to

we used a The to of was first -- U.K. be just really which company.

And corporate before, enough good us be but served organizations. We a from that and of reduce some were was on getting clients who markets you in highly for credit markets. we those teams valued may those And -- businesses private in used we have we the overhead redomiciled. And were there for to businesses to were heavy bigger these public with weren't folks then, covered there well remember, that. those homes the lot

ahead that So we moved on now.

we've including a of other double-digit our passed the than with In we And with affiliates a most of seven which some sheet. attractive cases, ended for of six got than valuations have situations. Xx on -- then yes, seeing most EBITDA. up businesses, EBIT EBITDA. to We at that, cash our forward cases, eight more to got lot win-win And time, those we more lot balance are In were outflows. businesses homes of some

for it a multi-boutique using we targets. was the had various to was M&A So the cash course, EBIT to we in that was in balance and really of to the having platforms, valuation we've of for at growth, ones this the time, been on And in at have EBIT decent XXx EBITDA. look or EBITDA. high. Most been the past double-digit the sheet, Even continued game, Xx look half as it

positioned, well trading you fixed on growth are very capital, EBIT opportunities handle. business own at terms business unique, as the with So being our ahead earlier, touched EBITDA and a we our at I of a as of all look in use an business it. where differentiated And the to to is having

EBITDA than part of proceeds just business we manage just and own risk, lower paying XXx for still take stock. as and smarter and a execution a rather So on an buy-in or for us investment It's would our optimal delever risk just Xx rather the that much leverage.

that's how questions our went of something. what of but is, if That's if about bit repeat trading your a just miss it's decision. So, I of all our it sure a to answered opportunities. I'm where terms own the we not M&A business compared please in I no-brainer

David Eller

you scale now. it. smaller much No, of covered Obviously, most you're Yes.

you benefit But of and kind overhead do required You could when own synergies business Acadian, the efficient your overhead do but of the to to mentioned for for a from those good down. of and you owner? more at also shareholders today a -- pretty the kind realize owner that you valuation it trying get costs manage would of think look be costs kind the larger different

Suren Rana

the Yes. very who for people as time always some been now. value-focused the phone No, shareholder know us are we those have on

will we differentiated shareholders. receptive value to we be very our and So that capabilities. always are have to provides unique greater fortunate And anything we that

we also, it's operating still to some the receptive because about to now a we maybe $XX we to reduced overheads. million $XX down that it. now whittle have our So and a that now have just be business, some then $XX then simplified if we so business, And bring what overheads; -- can have scale happen, used scaled, million simplified quickly. business might We We having lot level we is can pretty of -- we we'll the business maybe with time down. one million. at call probably the And that the think $XX remaining million pretty business, can over center

leads needed who is capabilities the company reporting. most Now entire of scaled another public not in support then, of taking these the because context on of player in of it million business, course, $XX the is

-- we is a So opportunity. bit little as there is which yes, an of overhead view there

view I which $XX $XX per really we -- $XX-ish quarter, operating that as as million the view to core EBITDA. really million So we EBITDA touched on a million

David Eller

Thanks helpful. super That's it. all for color. Got the

Suren Rana

Thank you.

Operator

Cyprys Next, Michael we'll to with Morgan go Stanley.

Michael Cyprys

Hey, around being Thanks questions. the to more taking just a comment circle tender. morning. your for that I back likely to good the buyback and wanted

hoping And I'm so how might you how different work. process around process What a I unfold? like, the frame steps sort maybe would that was could are tender unpack and time of

Suren Rana

event. be as this And expect mentioned, we've Mike, a QX to Yes. that we

So the -- and we're working through details.

And -- known. that's typical details the But go. of normal the of tenders it's So given think, out standard, it size of it's pretty, we've is the rest more essentially -- we be a mentioned, I sort how pretty for should soon. coming with

So the out with a in near package coming be full we will term.

Michael Cyprys

expectation your company. if owning could participate? end any that that the that have sense don't intention? Just the is any up large participate out? And Or that their they large thoughts work existing would then half that you be shareholder Because would on And shareholder there. how would like there

Suren Rana

to close know, don't the not I do to understand is that or they have. that intention they Yes. participate. increase XX% We we current believe, not would if -- their near beyond stake stake their would But

increasing. the that will So stake it expectation not is their be

Michael Cyprys

just could it. here. Got I one And in more if sneak

the dividend? toward you out a just came with, kind think consider special to led factors buybacks you that? you would that led of you -- special about to curious you what a buybacks led dividend? other as what What here And you over way Just have

Suren Rana

at Yes. at David's possible I accretive always of look part, I more that in dollar every capital, than in what else. something always -- question response all earlier, look for guess as right, be uses to and we we could the mentioned

are versus up So own the Then acquisitions of return capital, buying then, And holding that a not course, used of regards reduce our to we the being is were prudent. part stock. back stock. versus buying well clearly dividend with which think proceeds of leverage also to the the

be we we was reasonable where undervalued. what a experience, trading key that our own we a course, we got businesses But crown course, of jewel, compared that we Of for valuation. the our divested, believe in is factor sort that given to are that have where we trade a of believe business are to we

a good it's for we a investment shareholders, good efficient of had our So that Also from of feedback a lot number investors. perspective. received for tax that dividends wasn't

Michael Cyprys

I'll Great. get queue. Thanks, in back Suren.

Operator

Suren like to the And to question-and-answer or session. our this Rana turn back any for I'd concludes over closing remarks. conference additional

Suren Rana

mentioned in Cyprys getting back Mike thought I you. he Thank the was queue?

Operator

Mike And take we'll Cyprys.

Michael Cyprys

in Oh, here. great. squeezing Thanks for back me Thank you.

efficiencies back at the coming expense around comments your the Just to center.

was able are to hoping biggest I what a million. I quickly. the think of it's little mentioned are It bit just down like that. going center that impacting might sounds of you elaborate $XX $XX out had to on coming pretty million more you items costs sort the be

help year? think operating any about the next different How of similar XXXX range the coming you've on Or year? on we does just guidance saves be expense this side there we year? guidance thinking next the help progress through? So no, expense into any of because expense given of Just into into about Should the already next for into sort the efficiency as year. sort that items that

Suren Rana

then and we as really it's were than really when continuing overlapping guess, functions at an to business more there it's be and more some But this point business that just I you integrated. affiliate, were one now integrated would had needed. Yes. expect, one

areas is and that some probably did operating the more and in business in So less there overlap on overlap, the related side other some executive is course, are which those like have. is But not functions. reporting it things where company finance particularly overlap of because the then holdco public legal much of

$XX So million. business, that is the would very business. represent a remaining Acadian, scaled the But

office fully reporting. investor with back and mentioned, built I As

that So can over absorb time well. as the company responsibility public reporting probably

the it'll probably first in But one we relatively is that. that remaining where million million longer the out not -- maybe that's than So be would year, a take $XX $XX easier. think bit coming

Michael Cyprys

in expense-related those as as any might put then, ratios help fourth into any on forward next the help we rate we on progress. how so at the into year? go looking the And Just quarter from the just of here kind run far we up and next roll quarter year third that

Suren Rana

little the was in we'll year don't on hand. now there what Yes. any it there of been a course; is have in of in for that that XXXX terms impacting guidance be I won't full guess more. provide affiliates that sold have that -- I But noise due bit some and we have off

Michael Cyprys

much so Thanks questions. great. Okay, taking for my

Operator

today's that Rana additional the remarks. Q&A And session. does call back to over any closing I'll for conclude or turn Suren

Suren Rana

everyone, Thank for Well, thank joining us today. you, you.

simple now, sheet organic excited we a are as execute. with on forward. We you and We about business going up our focusing look forward being Thank really to balance really growth cleaning you. engaging

Acadian Asset Management (AAMI) 30 Oct 212021 Q3 Earnings call transcript