Acadian Asset Management Inc.

Ladies and gentlemen, thank you for standing by and welcome to the BrightSphere Investment Group Earnings Conference call and webcast for the second quarter 2023. 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 the 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, August 3rd, 2023, at 11 a.m. Eastern Time. I would now like to turn the meeting over to Melody Huang, SVP, Director of Finance and Investor Relations. Please go ahead.

Good morning, and welcome to BrightSphere's conference call to discuss our results for the second quarter ended June 30th, 2023. Before we get started, please note that we may make forward-looking statements about our 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 risks and uncertainties appears in our SEC filings including the Form 8-K filed today containing the earnings release, our 2022 Form 10-K, and our Form 10-Q for the first quarter of 2023. 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 of future events. We may 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 here shall be deemed to be an offer a solicitation to buy any investment products. Surin Rana, our President and Chief Executive Officer, will lead the call. And now, I'm pleased to turn the call over to Surin.

Thanks, Melody. Good morning, everyone, and thank you for joining us today. As usual, I'll start off with the main highlights on slide five of the deck, and then we can jump into Q&A. So for Q2 23, we reported ENI per share of 28 cents compared to 41 cents in the second quarter of 2022 and compared to 28 cents in the first quarter of 23. The drop in earnings compared to a year ago was primarily driven by higher OPEX due to the impact of foreign currency changes, inflation, and our ongoing investment in growth initiatives and operational infrastructure. Acadian's investment performance continues to be strong. As of June 30, 23, 81%, 81%, and 90% of strategies by revenue beat their benchmarks over the prior three, five, and 10-year periods, respectively. We reported modestly positive net flows with 0.1 billion of net inflows. and it was our fourth straight quarter of positive net flows. At the same time, our sales pipeline remained strong. We continue to be on track to execute on our growth initiatives. Acadian's equity alternatives platform is off to a promising start. The investment track record is building well after we seeded the platform a couple of quarters ago. On systematic credit, the team continues to build out the models and infrastructure. We expect to start investing seed capital in the strategy in Q4 of this year. Turning to capital management, we had a cash balance of $141 million as of June 30, 2023. Acadian has continued to pay down its revolving facility and ended the quarter with an outstanding balance of $38 million. compared to $87 million at the end of the last quarter. Like in prior years, we expect the facility to be paid down fully by year-end. As our business continues to generate strong free cash flow, we expect to continue deploying capital to support our organic growth and to buy back stock whenever opportunities come up. Our long-term strategy remains the same. We will continue to invest in our core capabilities and leverage our unique quant platform to grow and expand into new areas. We will continue using our free cash flow to support organic growth and to buy back stock. And we remain focused on maximizing shareholder value. Now, let me turn the call back to the operator. I'm happy to answer questions at this point.