Earnings call transcript Q2 2020

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Operator

Good morning. My name is Kevin and I'll be your conference operator today. I would like to welcome everyone to the Virtus Investment Partners Quarterly Conference Call. The slide presentation for this call is available in the Investor Relations section on the Virtus website at www.virtus.com.

This call is also being recorded and will be available for replay on the Virtus website. that participants remarks, a question-and-answer there instructions follow all after mode period time, will speakers' the will at this are listen-only in and and At time. be a

conference I will to host, Sean over now Rourke. your the turn

Sean Rourke

everyone. and good Partners, like the XXXX. quarter financial you results Kevin welcome of discussion the would behalf of morning for you, Virtus On Thank of to to and Investment I our operating second

Angerthal, Chief speakers of Mike Our are Virtus; President George Officer. CEO and Financial today Aylward, and

Following a their will period. Q&A have prepared remarks, we

Litigation to Before may actual important known this in we set as factors unknown and the these our of SEC presentation risks and to, to discussed those uncertainties filings. forward-looking the begin, and I Reform in on direct Securities the statements. risks accompanies differ may forth call your the limited not Act disclosures in attention including, the within discussed of webcast. that discussed cause of are These such statements results two XXXX uncertainties subject to on but materially matters contain Certain those from page today's release meaning slide news and and Private

on measures basis, results. a results use certain we non-GAAP to addition In to presented financial our evaluate GAAP

Our and substitutes conjunction non-GAAP financial in for measures are results be should results. not read GAAP financial with GAAP the

on which available GAAP included in are are the website. today's measures these and of applicable measures release financial financial Reconciliations supplement, to non-GAAP news our

George. Now, I'd turn over like to call George? the to

George Aylward

second which strong our of performance, joining capital. conference management, excellent We're second sales, earnings disciplined flows, Good continued of Sean. call. results, highest further us you in morning included the on with continued return you, reduction everyone. debt our net and level investment for and Thank Thank expense positive pleased quarter quarter

the investment the with which exceeded pleased growth, product strategies. with being strong the categories of broad growth on composition an contributions basis across annualized organic and especially base XX% We're

sales and of in differentiated investment distribution. distinctive that and quality and flows our reflect we've as nature The retail experienced of intuitional the favorable trend strategies as the well

our we've in I be Investors, what partnership growth that month under that highlight add $XX expect we will offerings, billion with management our transaction entered fund would an also for would and announcement and a highly into this strategic Allianz approximately Global assets which distribution capabilities, agreement earlier will opportunities. been accretive enhance to

$XXX.X result to by increasing coverage So, review through levels positive of assets of results, management peak billion are turning a the nearly market long-term sequentially under at appreciation flows. both a June billion near as XX% to and $XX now or XX net

with the to assets open-end level since billion. include accounts, funds, separate increase Total $X.X Sales becoming $XXX.X significant XX% ended momentum increases which liquidity billion, our continued sequential institutional. retail at with and strategies in highest period public of

$X.X we the the of of during classes. quarter, positive we of continued a than flows earlier This year momentum other billion have the with asset the trend dislocation. this For year net strong seen the market worst had across in disruption products favorable

positive net generated strong in flows channel, separate XX intermediary net which net had Open-end accounts flows of led sold positive the now positive billion, to consecutive billion, $X.X primarily equity. $X.X were quarters domestic positive by due flows. has flows Retail of

institutional continued positive investments were of attractiveness flows net reflecting investment in contributions new our Institutional our mandates distribution. the traction $X.X accounts, from with from and existing billion and strategies

open-end in and trends separate net funds, the flows second what July, month-to-date, in sales accounts, In of has terms we're of the Solid retail continued, quarter seeing institutional. positive the

beginning seasonal lower as significant a for invested lower fees in travel the due of to period unfavorable offsetting financial equity had management a decrease for as the the which revenue Our quarter quarter's was Largely decline to assets, decline led well the and entertainment. sequential reflected expenses market decline impact on an results of employment in average as last assets quarter. effect lower expenses

of the lower first to adjusted quarter. quarter $X.XX, X% to the XX.X% per of the largely the first in and to adjusted Earnings share as $XX.X and operating lower revenues, over other significantly the income offset quarter. impact $XX.X mostly to due declined related Operating of million minus employment margin expenses XX.X% seasonal as in expenses from first by respectively increased million the

continued Turning our approach capital, management. capital balanced we and to now prudent to

of of EBITDA XX,XXX debt outstanding of net approximately bank down continued X% and to During consistent term quarter shares or the our loan quarter, pay with the shares we X.Xx. the repurchased about ending

our year, the XX%. debt by Over we've reduced past

Mike turn that, me on With detail more results. let to the to call the provide Mike? over

Michael Angerthal

the George. slide you, $XX.X $X.X at reflected and billion, on assets of with all AUM during management, appreciation everyone. assets billion increase were sequential Starting June billion The results XX% market $XX.X our XX%. seven, $XXX.X up quarter March asset long-term increased which domestic under XXth, morning Good XXst. by Thank from flows. to led billion of equity growth positive classes contributed net Nearly at

with XX% respectively. continued institutional, be long-term representing separate approximately of accounts diversified by and product AUM XX%, retail funds, Assets open-end to type XX%, and

in international. asset that represented as a total markets the terms Fixed of XX% to due income to of equity with classes, XX% period. primarily assets of rise of in sharp during domestic In and equity XX% percentage assets the equity AUM long-term XX%, in declined

We generate strong performance across investment strategies. continue to relative our

rated currently a or and or XXth, five of in of rated X-star, strategies assets X or were X with X-star billion X, set XX% We or approximately AUM XX% funds. managers. that of different from As $X June diverse nine funds of X-star representing had have fund are X more

strong exceeding this as their their five-year beating of of the XX% on fund five-year XXth basis. to groups assets assets very benchmarks were of a peer basis XX% addition the performance, of institutional performance In and median June same on were

growth flows, the rate. to organic a asset of annualized Turning represented in net XX% positive slide eight, quarter billion flows $X.X second strong

trailing For billion. positive four were $X.X flows net the quarters,

flows product In this and with asset the positive positive $X.X for the diverse in accounts, flows for open-end the funds, net second aggregate. a were contributions Net net and flows multiple marked consecutive quarter, separate marked were positive being prior as equity as retail well in quarter, outflows funds positive net institutional the quarter. classes. quarter by flow net billion across for open-end from improvement And sixth

midcap, Looking strategies to net increased at equity open-end flows $X.X fund net by class, by particular flows last up positive domestic all over strength positive breakeven are XXX% across Flows asset $X.X flows from equity are domestic billion, billion. in sequentially where with quarter.

quarter. billion, net of $X.X Fixed for a improvement income outflows were net fund billion significant $X.X the outflows first in

primarily more flows. while strategies, income fixed in credit-sensitive The had net investment-grade positive second were quarter net outflows

International outflows net equity developed included than billion market emerging flows net strategies as billion by net outflows funds $X.X $X.X a had model more which markets, offset in of reallocation. modest were positive and

year year-over-year And Total and marking highest on over consecutive sales prior were for $X.X the increased have XX% up the the basis, second XX% to sales that sales year quarter billion, becoming their have sequentially very a reached our year-to-date XX% quarter strong, public. since level period.

the funds, in $X.X sales Sales quarter of driven Fund both XX% $X.X separate with and or increased accounts, fixed equity institutional. increases retail in growth income. billion and by sequentially, billion open-end was

investment-grade driven by income XX% equities, XX%, up increased partially a international. Fixed in a in decline strategies. increases by offset were sales X% fund XX% sales in Equity increase domestic with

and with sales strong account strategies, up XXX% XX% cap growth were classes large including sales sequentially, domestic increase $X.X of separate investment asset strategies. Retail across billion a in

flows included Institutional $X.X across meaningful increased into from multiple sales first sub-advisory by flows This mandates the billion due new of affiliates. both existing mandate. $X.X into and billion to quarter existing an

decreased million lower sequentially the nine, of average strong beginning to sequentially. AUM of million Turning which management X% investment X%. in the reflected growth slide investment on management as assets, $XXX.X decline for $X.X quarter despite fees The fees impact declined by or adjusted AUM

fee for year I would higher points, The end prior up the quarter that assets points rate period. X.X than sequentially quarter. the basis average for the was was AUM on basis XX.X of long-term sharply unchanged at from the note average quarter

increase With the fee open-end in increased quarter, sales to rate basis positive reflecting XX.X from and and market-driven assets equity in the differential the ongoing between rate to funds, the first redemptions. XX.X fee respect significant points

while rate XX sales was basis This on quarter, redemptions points, on rate blended fee points. the fund the basis XX was

higher quarter shows of expenses. employment due seasonal commissionable compensation, XX% as as expenses in employment decrease Slide first The partially $XX well largely lower incentive sequentially. the trend in and adjusted million reflects Total the to million an as offset increase sales. of compensation employment expenses sales variable quarter, decreased five XX $X.X based by profit the

revenues, retail as sales a as impact the employment lower AUM. were expenses higher of the reflected of percentage which average XX.X%, well As

discussed end XX% assuming track or expenses continuation anticipate the as a of to percentage range we've market XX% sales quarter, previously the we trends. For and of toward levels employment the strong above high a third current revenues will that

the operating other quarter and $XX.X expenses Board XX, million, of adjusted million down slide million. the the as from in $X.X were prior to to annual grant of Turning equity Directors included $XX.X

expenses Board travel grant, the lower or operating in The due and the other as primarily of and decline activities adjusted expenses other operating million sequential XX.X% were Excluding revenues. current to $XX.X was entertainment environment.

short-term $XX million we normalized environment. limited remain the other to previously operating into below to expenses of given forward visibility stated in at quarterly a the or to a million continue low operating may expect return end Looking that the range $XX more

X% adjusted sequentially of Operating $XX.X revenues. Slide to the due and XX operating lower illustrates or million the increased other offset earnings. expenses, trend million as employment $X.X by lower in mostly income

from of cash CLO the XX.X% in distributions dividend quarter. income and declined million is quarter. margin decline yields seed appropriate Interest $X.X on compared of lower believe our We The on for as adjusted reflected investments. an $X.X million. The operating in level to prior third XX.X% and this the reduced

adjusted is as equal. in prior XX%, all The for believe quarter. tax reasonable, from quarter XX% the We XX% effective the was else rate down being

the lower as in sequentially, diluted $X.XX decrease to mostly income, other by income revenues share, and dividend employment or $X.XX of due lower operating per and primarily cents decline Net in expenses. offset interest adjusted X%

share first expenses, quarter losses the share unrealized items; net value realized $X.XX investments. $X.XX results, of $X.XX following fair of reflect the loss of and to net increased liability quarter, on included the and $X.XX per with of CLO per GAAP second Regarding the compared interest, a refinancing $X.XX and of income minority in of

$XXX million our capital to debt the shareholders XX sequentially essentially Working offset shows liquidity Slide repayments was return flat operating XXth capital as metrics. June on of by and position capital was trend at earnings. and of related

the June outstanding during repaid we at XXth debt million $XX.X was $XXX as million quarter. Gross

Over by or debt the XX%. past reduced year, we've gross $XX million

end, net of June EBITDA a down and from debt, times ago higher X.X and quarter XXst X.X XXth prior at was due year. to debt a March in debt growth, balance. times to times cash X.X three down lower X.X at X.X the EBITDA year from The times EBITDA bank ratio times to was at Gross

for Regarding and total common to settled shares we shareholders, $X.X X% of XX,XXX return million. outstanding capital million, of net of XX,XXX the shares shares repurchased $X representing of stock quarter beginning for

With that, the back let me to turn George? George. over call

George Aylward

Thanks Mike.

your excited about Before Allianz partnership. I on questions, the partnership this take mutually unique relationship like Global very we and to beneficial with We're is would Investors. comment which

partnership attractive our For investment would be earnings our offerings, approximately enhance any us, requiring highly and increase complimentary by XX%, at and without the close. assets accretive capabilities, payments to distribution

on would are Allianz priorities. markets distribution and administrative more institutional aligned will the in other efforts that support access closely focus partnership their U.S. distribution them more focused with our growth to closely allow to capabilities retail strong gain and and to their

administrator approvals would Upon add end by completion, year, closed and/or $XX $X to distributor assuming subject we as and investment based of to their billion AUM the billion near funds, certain separate billion occur assets approximately funds, of of that billion advisor of June which Allianz's responsibilities open-ended retail counts. we of the end is the of and on $XX $X expect XXth

approximately to the a join managers. manage Allianz assets or billion our team, as us to would select boutique as subadvisor approximately billion new equity the $XX $X affiliate other their continue majority value which similar would manages a of

are and equity, through adding aiding partnership the would the significant strategies greater strategies to that changing diversify addition for and differentiated potential multi offerings, investment provide asset, market from In further current our cycles. alternative opportunity thematic scale, for our clients

over fund Morningstar. X-star rated open-end we total a rated Investment in would performance of our Of XX the which by have and basis, seven XX% XX% of X-star largest on assets these are is XX, representing the has been pro On fund X X, of outstanding. forma a funds, AUM. funds AUM,

and us enhance brokers, our products investors. growth distribution to leveraging making separate and distribution will We Allianz offerings a evaluate accounts expanding of independent and U.S. by opportunities also our through and investment warehouses broad new meaningful retail our partner more national for retail funds capabilities

we time any at adjusted an impact, close. will of alignment share accretive XX%. agreement is the earnings June to expect and require excess management, well Based interest XXth over the with structured not and on of immediately economic be will per assets would the Regarding financial payment under relationship as in

be get we We of financial providing closer will additional and to the partnership. closing as the details updates

the open So, with that, questions. we'll your Kevin, line now up would take you please?

Operator

Instructions] [Operator

Our Barclays. first Campbell, Jeremy question from comes

Jeremy Campbell

thanks. Hey,

George Aylward

Good morning.

Jeremy Campbell

distribution? if the other situation So, came potential innovative. Wondering one-off partnership or how the can really of little high this to give view of looking about. is if Allianz kind asset you managers more a us level interesting and partner demand retail And on if some unique George, maybe you deal from bit further background a on there's

George Aylward

specific sort partnership, of interests. growth going this forward way I This a mean transaction. This details into is a I alignment Sure. not is is transaction. going of about characterize a without is and the would

not this forward. party deal and two that and working a This a looking together create to going a is growth is So, profitability and a is companies on where partner transaction get to check. do about

us it that fits that a I of is the relative nature very are achieve. in think I what aligned way, very, structure, So, of to one trying a think each

it good it. very we is way approaching So, -- of a think very

but of in a of in I think sort of little reflective of each is looking unusual, growth sort what is It future. for terms we're

managers say and but expresses generate confidence it ability we speak they also are help themselves their can performance their good -- I can't assets. and in to think and for I confident grow that their those expresses I would Allianz,

continue that. the participate is structure So, clearly much to to for of more the to the them deal aligned in opportunity have

that something is that think us I So, more actually gives right? that confidence,

really alignment So, good of it's think it's interest. a structure, a I it's good

and as good it's all just Allianz, importantly, involved, our fund are here. shareholders, think Virtus, shareholders, shareholders I that the everyone both for their involved

as there isn’t you require deal every I you'll every to opportunities will back-end you -- different upfront of opposed or has interested one are contact of really different. seller, one-off information of an structured there's that be going structure. others a a This transactions or different achieve. type circumstance that hear give a and capital capital-light if particularly, like terms to information you that to this? this each little of other fit available does in XX/X. And looking if expect do that a third-party this not some instances, other to this in people Is is a them. usual, or structure I deal, see capital there like my to so what any would in encourage need be But forward doing because think they're you have I'm

Jeremy Campbell

the color one's imagine incremental here. expected the isn't the bit for partnership Great. a of funnels distribution the maybe excluding expectations team, this that And peek then you, forecast? behind there to accretion the Mike, way bit on little expenses just ballpark deal equation. of much for us that give value of on Can thanks in little the you curtain that I'd the kind piece I the you mean really that on side of the into incremental margin

Michael Angerthal

the $XX assets I rate obviously to well billion the excess level inputs and the of refer being in on into are think Yes, under that the fee management. major XX% we of

as and sort XX incremental So, to basis an of we've of of that the average have on leverage And then we in we the to standpoint. incremental of depending George XX% you management both and the from in in points. XX distribution can to, administrative and alluded historically XX% rate, talked infrastructure under the of need nature existing that fee in place the varies structure, largely here margins, margins, range the assets

to on of sort as we that update remarks, So, get to we the and we -- range specifics. the of those be on closer prepared in certainly, close as margin of in we'll you some incremental alluded

Jeremy Campbell

lot, a it. Appreciate Thanks Great. guys.

George Aylward

you. Thank

Operator

Carrier question America. comes of Mike Bank from next with Our

Mike Carrier

your Good so maybe if on position, the level. actually comfortable position guys taking with down partnership, a questions. partnering on paying capital debt have just you're more you just one your morning. that in the for debt Maybe Thanks net on been

I position know impact that your net the debt maybe payment, next -- With level your how you no partnership, will if five over or that this payments? terms mentioned upfront know, don't to but debt three I years in it's of

you And have to about condition then pretty good still given in you think that capital that when priority, arise? are as at look other flexibility you they opportunities a

George Aylward

Sure.

So, the understand on I the of think part it correctly. question, I first

effectively as what be pay net be the it revenues structured whatever a -- in will So, will we again, we this of a participation will way subset earned, always receive.

sort no, to will is that a outstanding cash to always be available or as a there those. So, trying of contribution and long as debt like be right, that there if of long as continue going reduces there's understand of kind you're our assets as mismatch any sell to we net theoretically because capital,

cash-in. of impact the capital So, I obligation view really incredibly in structure, right, think, as or the between mismatch again, an on it favorable, locked-in any obligation because it of create we has does receipt terms our again, it not

So, ways, is great to in for a us I think have. many structure that

been our we as as that period, because were part, repurchases, We down maintain we've our the second very pay in only capital that went were been to debt. well and through around thoughtful things your first stock able and navigate not as not that like consistent well dividend being our our too over through levered on as pleased we the our yes, with And and cautious capital. dislocations as thoughtful very have quarter,

reduce little We more opportunistically were debt. also a even bit able to

the working indicated, a have capital a the that we gone we unchanged, working capital quarter thoughtful like view quarter-over-quarter sort sort as testament to have to through that our flat the sheet. of Mike of balance take approach and to And as

that through a going for the So, this to look continue to environment, business, I was to which was do, forward do grow we it do sheet have to intended balance opportunities us think see ways got we good what right.

Our do positive. long-term back and will in a as and having our how creation value flexibility and that capital primary growth the be over focus going the sustainable even ultimately, the create, view years of we we Allianz to

Mike Carrier

Great.

Okay. That stream. just flow makes sense. then the And on

products it in good still have rebalancing you've reallocations understand But significant like some guys kind like you looks So, though. you that benefited trends industry from. have guys demand and had and of pretty performance, a seems coming, it pickup,

Just funds work the but that from next trying lumpy bit marketing, has more understand the And the then little [Indiscernible] active been is areas from as if for a just there and anything of XX it more closed one a little seems obviously like curious, months, to standpoint see the put bit an has opportunities over industry that you side. in it end well. area home on

George Aylward

Sure. the happy and growth very pleased And our basis. rate. a with relative organic on to flows very, Good We're the generate ability flows, We're on to XX% quarter second with we're obviously, continue happy. that.

been But underlying we good that I in sign. period that actually that very to other we've important dislocation consistently think -- think very really a April, is interesting than of the the mid-March is very is which beginning flows, more positive and actually more in of statistic

done any them a the have really job and as we really is, well. performance, mean, Kayne board really and predictable great I to unless have all of Duff. to capabilities. you a the of you do differentiated really differentiated that can't across managers SGA some have performance, good great of A lot include from it Because others strategy, I

you So, there -- which the that's element foundational to need really that build. upon

they on world that important, distribution on force effective gotten can it's or longer the right, because your we very where Zoom from but challenging, really really doors, side. important wholesaling on those So, can work have environment Retail I that's the if right? are hold, do calls and home established has you're in been other contact. currently a a effective, the why more knock little past relationships the relationship-based the get you no of think has distribution is relationships

think technology years use salesforce, with So, navigate over we of our built which the leveraging has been to generally the above able we've the of through average trusting we years experience. effectively of and strong relationship

to quarters relative a -- able So, we the sales as a those two on effectively, on side. think net good together row, record think, we've as flow basis put good very been hitting to in well I have

And what will future things the holds, continue evolve. to

getting information is the the this where being hybrid used going the a I again, the ways, wholesaler money in But will to think in environment clients, mutual think separate benefit both how institutional this more there'll to this. retail effective up I or which on account. will I think lot fund be I how in in well to that a experience, are forward, their some a navigating learned thoughtfulness end into be entrust side, hopefully think either to model and I a intermediary able funds ultimately be everyone really even channel, think and side, of of learning good our the as accounts particularly side, about ones everyone as who on and the share has way

Mike Carrier

Thanks a right. All lot.

Operator

comes Morgan from Our Michael Stanley. of question next Cyprys

Michael Cyprys

Hey, Hey, morning. Michael. Good George.

George Aylward

morning. Good

Michael Cyprys

It AGI transaction. or maybe based price it like revenue, the on flexes just AUM, the Congratulations like, on looks or revenue. sounds

maybe would we hoping and the of sort think to that, was should of you could sort amount about and a about floor of how how flex be break what there be -- like flexibility payment is? there portion points paid I a that is that the thinking So, unpack contingent degree minimum

that a of XX% prior on be subsequent about a should in made works? that are payments XX% of flex How any on revenues we So, payment thinking I rata? what's contingent that suppose So, basis, how are are terms pro made? acquired that's lower there payment here. being down kind Does catch-ups

George Aylward

that think would specifics close. Sure. the And go for would the percentage participation about this participatory coming to -- consideration we're dollars as prior type. some the those you year of I we be an going accounting really more on give right? perspective and structure, But to as of details amount through updates be in, from So, will to consider a dollars more

So, always alignment. total a we'll be

So, minimum. dollar dollar out. goes comes if no no in, There no is

no a of earnings. true type interests, This the is there of floor. is So, in revenue participation alignment effectively net

won't that's be capital, comes what related mismatch So, whatever was that before and portion trying in. it again, I [Indiscernible] be prior as it's on to because answer there always to the to a of question, going

be So, if it things the terms what there think that's in to about won't of you're watermarks payments, or catch-up asking.

Now, through it assets the managing assets, we is those through profits jointly the participation of generate growth and in those distributing their assets. the us

So, the good anniversary I year of the of a we'll in But it interest after just will more really alignment give of closing. do the think details be terms payments. and infrequently, it's of timing a once

details So, we closer to to you we'll give thoughtfulness have the in more get as closing.

Michael Cyprys

Great. on And then the just accretion.

I in-- think said, you well had

George Aylward

broke for Michael? I'm open the Kevin, there. is you line sorry, up

Michael Cyprys

me? hear guys you can Hello,

George Aylward

lost we you there. Mike,

Michael Cyprys

that. Sorry about

George Aylward

repeat the So, to you question. have entire might

Michael Cyprys

Glad can now. you guys hear me

would well had excess that guys So, of XX% the payment not made. that reflect just you on that the accretion, contingent imagine said, I does be in but

area? deduct So, of of were that and want about of for the sort much sort like low in come to that. the you Would one more just payment, how down that if an be would to, try of contingent to I understanding teens to accretion then magnitude if think single-digits get or high that were

years, side that I five on timeframe get over. would the was what but that over to some of made be and contingency I magnitude trying was a thinking others. for on maybe hearing framing the about Just payment eight

be we that? should about thinking how just So,

George Aylward

Yes, think terms own income Mike resources, really our and a we're our of lot and growth. earnings assets of net then again, a XXth we in accretion so, June so in don't generate the need per again we in XX% -- sort it indicated, as of our infrastructure, it but into how fit technically share -- of terms leveraging about and so, using is report. lot excess will because about as this well that we And of

think So, maximizing the opportunities. invest will in to excess in some our opportunities much growth of of what number us to of are be that flex in for be, how related we will the XX%

So, percentage of let and get participate I'll we're is but again generated over there will of a period of into They Mike payment, very right? contingent excited a earnings that the some time. economics that no are in details, about

be always a it'll Mike? again, number. positive So,

Michael Angerthal

contingent activity, XX%. what payments, that financing of activity as guess, EPS than of referring it's a excess really a the would show we've up Yes, I well accretion the through of rather to been just liquidity it thinking terms in in

So, financing activity liquidity and that up will as show measure. a a

So, accretion the been that about. terms of through we P&L address that wouldn't we've in the talking

go at to as And again see there these again when sheet of the this payments present inputs get on into any we'll time the accounting gets provide as recorded liability which of from a closer of balance we that'll close. value that an close. purposes, recorded you'll be a And again, are many

George Aylward

as periods in the going level? time cash it's -- question answer help get it figure go And -- more you'll we is forward, And It flow to in cash that will XX% plus to if that of including information, flow accretive. The of free was, you're is Again, if accretion. no. free you your like out. be terms to be

Michael Cyprys

Right. That's the even what magnitude low I flow What's Just more? or more any high free was the Is more getting at. or frame like to way cash accretion? teens? single-digits that

George Aylward

give Yes, but excess able XX%. when be on triangulate an But be that. to well in of in attractive number, we'll more not we information be it will you'll

Michael Cyprys

you. Thank Okay.

Operator

Piper Mody Sumeet comes question Sandler. from next Our with

Sumeet Mody

Thanks. guys. Good morning

fee the the remained rate first. noticed separate Just pretty accounts in quarter the elevated increase in on after nice that

the rate get of think about an should year. that idea wanted Mike, driving just that if for what's So, we of maybe elevated rest to the and remaining for

Michael Angerthal

domestic separate seen we had some markets and we've being accounts; the the impacted fee strength Again, equity about talked equity there. in inputs the flows on the predominantly Yes. and rate of that

view I a a equal, at. where this So, rate equity being modeling as fee as the levels else with good market all they're quarter any from perspective,

Sumeet Mody

book. the for relation to of the feel but just you on just And kind of know think about right. last about all what one, of talked income, CLO improvement a $X to of that I I other the million in year, dividend get CLO kind March. kind $X.X interest the of quarter Okay, the and of, wanted million kind of end remainder one since how to range, to the is

of, troubled deferred mean with the rebound the I that is that's kind year? interest fair kind that, could subdued of sub in assume, the sectors dividend keep for income fees that that there portion like improve exposed CLOs it more maybe a is book to or of the CLO with and portion, combined would

Michael Angerthal

Yes, think we that the was the and prepared level remarks, appropriate in suggested current for quarter. third the I

continue close we'll So, think continue appropriate. appropriate. update to a you perspective to monitor would from use and I and and this But I the in modeling as very term, CLO immediate the is market that to that current we're quarter

Sumeet Mody

okay. Got it, Thanks.

Operator

is question question next Cyprys Stanley. a follow-up from with Michael Our Morgan

Michael Cyprys

Hey, thanks the follow-up. for taking

dig firm that sort around of versus cross color clients you're can versus coming hoping us on you evolving of entirely. a selling been institutional sort the clients those any any of the we of other products. help in maybe already are in frame from the little how to much share new that could and coming the to clients approaches quarter. has maybe and wanted bit I the cross-sell of existing in just that existing in sales Just are are door was that strategies new products sort maybe And saw now the of color more were sort on strength to you that that how sort

George Aylward

on give Sure. hit Well, thoughts then it will I'll you additional Mike it. first some

multiple into was multiple and as inputs broad, included right? was what meaningful new about and it included So, strategies both existing affiliates, it So, mandates. mandates, well it, as nice nice

nice of which in and a business, sort more gotten that's sporadic us, the of affiliates evolution number affiliates has to So, our multiple consistent. and -- limited of for then nature of a gone terms more institutional from has

whether more a XX, over about quarter of managers, last, been XX don't So, between more nice I the building I sort I quarters, it's second illustration had of the a as think eight, well think of the types as it cumulative of strategies. consistency, and the broadness, nice sort as know,

like, will know I'll I at we'd pipeline, what it sort where a next question. specific of good like business be look place. some the and way mature ins getting feels big we're be the there'll do, it's but know a to see it and quarter still look outs, much but give we the there perspective what and on and more will don't It's I big quarters thoughts Mike lumpy to let our

Michael Angerthal

sub-advisory partners has meaningful certainly the distribution one remarks, into indicate of that Yes. we see And we important contributed broad that existing -- relationship nicely an And -- that in has good relationships our quarter. there SGA and did prepared an mandate. in were contributed was with certainly to the flows and through

we And at mandate in the new we with at which strategy alluded as mandates a new separate payments strategy. where a George had experience very different about. was into then, And new have came good had Kayne, both, to, client of up also that one funded -- a a mandate

So, and traction. as mandates, new It's account. we're seeing as broad-based existing well

we're with in can well. to lumpy, prepared what So, we've but last us far optimism we gives as the as that over traction thus know, the quarters. several as seen pleased remarks, alluded July, you the it be And in business

Michael Cyprys

that additional It July retail intermediary, Great. continuing seeing? sounds you're And share to here. into that's like any we're color on SMA able solid strength

that helpful. many channel Just would across Any be would you could say that platforms maybe how strategies? and coming that's sort of share that diversified how you color from around

Michael Angerthal

And we fixed the success have separate positive side. our had and quarters through income on Seix had SGA retail several again of consecutive of and on broad-based. We've affiliates, Kayne, Sure, Mike. it's flows accounts it's XX the

have over to domestic time, distribution been of again of where across and SMID our those offerings, the as has predominantly equity it been platforms, growth very major the broad-based offerings in indicative investment the of number performance And on it's been a strength So, strong. the is that's offerings.

time. and multiple has consistent partners it So, is distribution a again over been

Michael Cyprys

you. Thank Great.

Operator

session. like conference I Mr. turn to question-and-answer Aylward. to the back would the concludes This over

George Aylward

Great.

healthy please want you the safe to In you everyone any have Thank and everyone meantime, look if staying forward much. very I talking reach you to questions, to thank today. out. Now, and is in the Hope future.

Operator

call. participating. That Thank concludes for you today's

and wonderful now day. all may a disconnect You have

Virtus Investment Partners (VRTS) 24 Jul 202020 Q2 Earnings call transcript