Acadian Asset Management Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group earnings conference call and webcast for the fourth quarter and full year 2019. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question and answer session. To be added to the queue, please press the star followed by one at any time during the call. If you need to reach an operator, please press the star followed by zero. Please note that this call is being recorded today, Thursday, February 6, 2020, at 11 a.m. Eastern Time. I would now like to turn the meeting over to Brett Perryman, Head of Corporate Communications. Please go ahead, Brett.

Good morning, and welcome to BrightSphere's conference call to discuss our results for the fourth quarter and full year ended December 31, 2019. Before we get started, please note that we may make forward-looking statements about our future business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding these factors appears in our SEC filings, including the Form 8-K filed today containing our earnings release and in our 2018 Form 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. We will also reference certain non-GAAP financial measures. Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website along with the slides that we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products. Guang Yang, our President and Chief Executive Officer, and Sir and Rana, our Chief Financial Officer, will lead the call. And now I'm pleased to turn the call over to Guang.

Thanks, Brett. Good morning, everyone. Thanks for joining us today. Let me begin on slide five of the presentation by walking through some of the highlights for the fourth quarter and for a year. We reported ENI per share of $0.50 for the fourth quarter compared to $0.42 for the third quarter. ENI per share grew 19% quarter over quarter, driven by stronger than expected performance fees across several of our high-performing quantitative strategies, as well as ongoing share repurchases. Net flows for the quarter were negative $25.1 billion with negative $22.8 billion related to the previously announced reallocation of several Vanguard sub-advisory strategies managed by Burrow Henley. Excluding those reallocations, net flows for the fourth quarter were negative $2.3 billion and meaningful improvements compared to the prior quarter. As we have mentioned previously, the overall revenue impact of the Vanguard reallocation was limited, reflecting lower subadvisory fee rates and the reallocation of those accounts has a limited impact on our earnings going forward. As you will recall, Last quarter, we restructured our reporting to provide greater visibility into our business mix, which shows broad participation in high-growth segments of the industry. As you can see in the chart on the right, two-thirds of our revenue is generated from quant and solutions and alternatives, areas that have significant potential for continued growth and expansion. Turning to slide six, we continue to make progress across our long-term growth strategy. In the quant and the solution segment, Acadian has experienced recent headwinds in the U.S. and emerging markets, similar to other quant managers, but its performance in the non-U.S. developed markets is well above benchmarks over the 3, 5, and 10-year periods. The firm's long-term performance is excellent, with nearly 100% of its strategies beating the benchmarks over the 10-year period. Acadian's multi-asset cost strategy is off to an excellent start. in terms of both performance and client demands, as investor appetite for highly tailored and outcome-oriented solutions remains high. In the alternatives segment, we see strong interest in our differentiated strategies as investors around the world continue to increase allocations to illiquid and uncorrelated products. As previously mentioned, we're currently engaged with a wide range of clients in this segment and expect fundraising momentum to build throughout the year and into 2021. With our widely recognized investment expertise in this segment, we see significant opportunities for rapid capital deployment of new cash flows. In the liquid alpha segment, our affiliates continue to build long-term track records of our performance with strong investment returns over all relevant time periods. In particular, Borough Henley has strong performance across its diversified suite of offerings, including non-U.S. value, global value, emerging markets, and multiple fixed income strategies. Borrower's large-cap value composite continues to outperform over the critical three- and five-year periods, as well as the near term, and has ample capacity for additional investments. Borrower has a healthy new business pipeline, and management continues to enhance investment offerings. The next element of our strategy focuses on expanding capabilities in high-demand, higher-faith business. As we mentioned last quarter, our most recent innovation is an exclusive partnership with Mercer to offer a total solutions investment capability to institutional investors worldwide. Early response among potential clients has been very positive and we're currently engaged with investors across key global markets. Seeding has been a long-term element of our strategy, and we have well-established and successful track records of seeding new products, such as borrow-handless emerging markets equities and leveraged loan capabilities. as well as Acadian's single-factor and multi-asset cost strategies. Finally, we continue to evaluate opportunities to further diversify our business by acquiring new investment capabilities while maintaining pricing discipline as part of our capital management strategy focused on maximizing shareholder returns. Third, We remain focused increasing business from key global markets. We expanded our global distribution team in 2019 to increase our coverage in target markets such as Asia, Latin America, and the Middle East. Our seasoned sales professionals understand the needs of sophisticated institutional investors around the world. and the range of investment capabilities and solutions BrightSphere can provide to help meet their objectives. As a result, we have seen a significant increase in our search activity participation over the course of the year. Also, as previously discussed, we remain focused on expanding our presence in China although macro factors have impacted our pace. The recent U.S.-China phase one trade agreement helped get us back on track, but we were then slowed by the recent coronavirus outbreak. We are monitoring the situation carefully and are hopeful that things will stabilize over the near to medium term. When they do, we will be well positioned to move forward on a number of initiatives. Finally, we remain focused on driving shareholder value. We're pleased to have returned meaningful value to our shareholders through ongoing share repurchases throughout the year. We repurchased 2.9 million shares in the fourth quarter alone, for a total of 19.5 million shares in 2019, driving an additional 15% creation to ENI per share. Looking ahead, with a strong and recurring free cash flow from our diversified revenue streams, we remain focused on allocating capital to the highest return growth opportunities. Thank you once again. And now I will turn the call over to Soren to discuss our results in greater detail. Soren.