BSIG - Earnings call transcript Q2 2024 | Acadian Asset Management Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to BrightSphere Investment Group Earnings Conference Call and Webcast for the Second Quarter 2024. [Operator Instructions]

Please note that this call is being recorded today, Thursday, August 1, 2024, at 11:00 a.m. Eastern Time. I would now like to turn the call over to Melody Huang, Senior Vice President, Director of Finance and Investor Relations. Melody. ahead, go Please

Melody Huang

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

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

XXXX the the and regarding appears in quarter our including these earnings filings, containing today risks first uncertainties XX-K, Form Form information our filed Additional SEC X-K the and XX-Q Form release, our for XXXX. of

that Information make them We reference certain undertake statements no forward-looking information a call Any we as may also update to new slides we measures events. as on are assumptions based use be future on we obligation can and result the this non-GAAP referenced, today, GAAP measures of the of any found on as those of or financial discussion. non-GAAP with including that to along measures. of reconciliation today's measures part will our website, about

nothing to offer buy solicitation to be investment shall deemed products. Finally, or any an be herein

turn Rana, call and our Officer, to Executive lead over call. Suren And pleased I'm to Chief the Suren. now will President the

Suren Rana

then Good everyone, can Slide Melody. and the main my answer thanks X in us for highlights any of joining I I'll you, Thank morning, remarks, initial on cover and questions. today. some of the deck

per reported XXXX. second for of in of So first quarter $X.XX of and ENI compared share XXXX the to quarter we XXXX, in of the $X.XX $X.XX the second quarter

our by And we year-ago repurchases market increase over AUM last the quarters. saw compared due from that by the driven months. the the share also secondly, in in primarily last over to The ENI revenue XX% was driven increase share was higher to few it per management appreciation XX fee quarter

the in compared increased with the AUM average XX% increased increase. XX%, XXXX, AUM approximately line fee management of revenue second to quarter Our and

This our keep benefit embedded revenue year-over-year, reflects operating XX% to ENI the to ENI increased able expect We operating operating continue of from were grows. we increase the because business. our our leverage this discipline in revenue. our to as leverage flat versus expenses since and However, disproportionate generally in in our would expense revenue increase continued increase XX%

the of repurchases that compared December or $XXX versus Additionally, I per the increase ENI share XXXX driven outstanding our ago And XX% shares year repurchased was over of our XX% in we year. through. last that went in the increase million. million Between XXXX, our of was and X.X difference share ENI shares just by and XX% for to June total

Acadian's remained great. performance investment

and across XX%, benchmarks As June XX% X-, outperformed by revenue periods. XX% XX, of their X- Acadian's strategies XXXX, XX-year and respective of

second had flows. flat select and the we quarter. quarter, large the to cash but other. second lumpy incidentally and were these for select and Net flows each flows also basically lumpy had large lumpy offset outflows, inflows, Turning client In we

seeded Our that XXXX, our more the Global continue to Acadian's recently, track seeded continue build was progress. growth systematic strategy, initiative, to April in November both credit strategy High-Yield U.S. initiatives XXXX, and records. of in On good High-Yield

continues now. seeded we in in performance. initiative, record strong strategy that building track of Grade to And strategy, of strategy Additionally, third seeded a Alternatives XXXX. track a multi-strategy fund, is U.S. our our build our just July Credit record also our Investment QX On 'XX, Equity

to capital Turning management.

of repurchased $XXX million. since earlier, As XXXX our of I mentioned December we outstanding shares for XX%

year-end. had of shares of we X.X repurchased end 'XX, $XX fully balance a million outstanding second which, our is similar operations to of facility shares to prior Specifically, be an the total million, million balance repaid by in of Acadian of or expected their years, million. cash $XX credit outstanding had we for QX on $XX X% and revolving At quarter, from from cash

remain on value, initial we growth close do, usually like our and shares. that as my back remarks shareholder I'd support flow our reiterating, to and maximizing by buy free we'll organic cash I focused to to continue using

the the I'll this you. questions and I'm turn at call operator now back happy answer to Thank to point.

Operator

[Operator comes first Morgan from question Instructions] Cyprys Stanley. the Michael for line Our today of with

Michael Cyprys

seeing of just both both I of upon could strains seeing side. you could the there? in. come out pipeline similarly, the you're sales customer that of last channels, just quarter? redemption what et it some strategies, with today, the about how Maybe that you're of say, cetera, on those. as you shaping gross the where you is to touch the Maybe also side, if starting up hoping And And unpack redemption lumpy on alluded flows was talk the looks and some the types versus,

Suren Rana

Michael. Thanks, Yes.

we've on, is As ours touched institutional business. an

episodic. And are they the so some can of large numbers and be

So had these in you just on sides. necessarily they weren't that coincidence, will, we pattern numbers large It unpack. sort if to both was of

it's clients just inflows, just X billion. that really the $X of another close than was came almost billion, for client one and $X a to billion, large a was There one couple On in. more really that another

came same to terms were these there X these It was the large And And of that quarter. wouldn't in strategies clients any came they were I numbers. to really it these in strategies. they be say were happened the that numbers. any large be to in unpack just happened particular in, large inflows patterns So assorted that in strategy. that

with different billion, in On large happened same to to had quarter. just similar the be another client story, couple another but similar a close we the that client than of billion, strategies, outflow really side, number, client a more $X

quarter. out, that yes, a happened sort was canceled it But all of of each it a just So one in of bit so coincidence all interesting. it sort quite that's other

cadence, of flat but if across to quarters, that have in get we sort we as of we stages. do a past the question, remained And the of, has sort guided part going we've more healthy of -- forward, another your breakeven few see pipeline

equity pipeline see by on a different across different still clients We among managed in we markets, stages, the a that the as off across rising these some are to There income -- table. they some liability-driven going moving take good investing. see clients from manage are following and some pressures rebalancing strategies others. way to their have chips volatility strategy, and fixed We when

puts So about all takes, a we of a for kind think cadence those and few here. of quarters breakeven

Michael Cyprys

Great. allocation. question a And capital follow-up just on

approach how into you're know, think you've about is think we that mentioned, you past, all, mentioned. I just 'XX. think run to and I you sort than here I business Just that. How we minimum the $XX half balance, in the curious cash level should the about as you that and think about second million, potentially of in in lower move thinking planning drawing down, that if at to meaningfully given, need Cash

we So here forward? what can of terms we as move buybacks expect in

Suren Rana

around Yes, minimum cash levels million think we Thanks, thereabouts. Yes. about Mike. $XX or

that uses you could opportunities organic we've the accelerate close as So remain X buybacks growth. said, uses. the $XX and to million say seeding maybe main is really other for And to our

see was on that just So this both we remain our the we mindful the we in in as and strategy third quarter, see of that which those fronts. credit Investment-Grade release, mentioned U.S. opportunistic strategy. We

pool seed have sizable a now. we So

we more recycling And look pool. to for buybacks happens might and organic if see also growth, do go. within as be at we'll opportunities might get that So some to still, we the But there that. see the we opportunities

I We isn't on, much quarter. that our back of there it's with every formula So have. we both. shares work. We'll number, particular not touched opportunistic put remain any have as Particularly, like we necessarily on $XX feel don't kind that to million to to buy a

So here. we'll remain opportunistic

Operator

next Lee RBC Capital question the of line Our with from is Markets. Kenneth

Kenneth Lee

that in quarter. due a I to if Wondering whether rate rate. there? There any Just to contributed fee particularly the shift? so, pickup higher the were X mix the just it slight on rate fee fee there And was, think, was products

Suren Rana

I higher in of yes, answer the bit, some fees. does rate think a Ken, mix are the are of little guess. first strategies because your our lower part the some the and fee fee Largely, impact was

But factors the and quarter market the fee. they than higher and that in some been well. second was fee better of while. emerging relatively others, other QX, did They one clearly, a indices have in the So had lagging indices, for of did they

puts probably was and of that most it other takes. and some So

Kenneth Lee

share And you. just if capital allocation see the Got the Board Would share one repurchases, follow-up, there. a you just expect to of to the in near repurchase I your term? terms may, -- authorization sometime renew of renewal

Suren Rana

remain said, uses the I capital and the opportunities seeding for Yes, buybacks. organic Thanks, growth our Yes. Ken. as

our right excess hole that As capital is a is now I that pocket. much burning that, said, in not the

would we But new there in get isn't super buybacks. on course, So that. authorization yes, necessarily expect to for urgency due

Operator

of John line the question ISI. next with is Our from Dunn Evercore

John Dunn

your expenses outlook control Question from check. in expense on here keep the for and to further ability

Suren Rana

had lot of our the capabilities. in John, investor really as yes, about talked expense a added to infrastructure. we were years, trading We we our We last couple investing increases reporting the invested we of as of last our in in infrastructure. over couple years,

in sense of making So we were the franchise scalable. more out building really a lot our

also cost was of we at of time, So on years. inflation a same from couple the we the have done And data, over faced that fair of the bit pressures everywhere. last inflation, and

So that's abated.

expenses to in that of faced up of levels. couple appears the position lot having increases general So at and of built now keep living you type sort are see of increases we at the the it good X% over barring, levels, more would or a kind these of less now last to a years having that of inflation, X% the course, cost

that, operating what we that on I that's the do So touched have leverage.

revenue keep expenses be from levels. should or to the organic growth As grows, these we relatively our operating either at growth, market able

increases. have as should So disproportionate we revenue benefit

John Dunn

strategies? us And potentially it. on you're tick with conversations Got about in a you demand could for maybe emerging little the clients market give having color up a

Suren Rana

variety and the Yes. There type of of a sort of depends also client. on are opinions,

always imagine, be time a in for that can soon, of may will, if time. rotation in view markets, sort overall of particular. and markets view there's lagging of you been have you and in because clients markets Many performance China, many highest terms opportunity coming as an emerging valuations the clients just such levels long that as As in -- whose emerging

that. seeing So we're

then some risks, are from On political hand, bit the worry and about there state be little some who are factors clients may the the clients. particularly, situation about geopolitical and there worried other a

I So terms so a everything a of in it's a mixed lot pattern said a or inflows of of seen much haven't but lot far, of done, and think either bag, we outflows.

We really excellent, inflows that very, performance. that have very It's strategy. a in strong seeing top we strategy are

one We're strategy. also inflows that So changes, seeing if so and would in outflows. to we seeing the of best really some does allocate, want have somebody we're

Operator

call conference Rana. Ladies session for over question-and-answer I conclude and to our gentlemen, the Suren would that like turn back will today. to

Suren Rana

Thank you, for operator, and good thank Have us joining a today. everyone, one. you,

Acadian Asset Management (AAMI) 1 Aug 242024 Q2 Earnings call transcript