BrightSphere Investment Group Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group Earnings conference call and webcast for the fourth quarter 2020. 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 star followed by zero. Please note that this call is being recorded today, Thursday, February 4th, 2021, at 11 a.m. Eastern Time. I would now like to turn the meeting over to Ellie Sugarman, Managing Director and Strategic Development. Please go ahead, Ellie.

Good morning and welcome to Brightspace conference call to discuss our results for the fourth quarter and the December 31st, 2020. 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 2019 Form 10-K, and our Form 10-Qs for the first, second, and third quarters of 2020. 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 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 herein shall be deemed to be an offer or solicitation to buy any investment products. Surin Rana, our President and Chief Executive Officer, will leave the call. And now I'm pleased to turn it over to Surin. Surin?

Thanks, Avi. Good morning, everyone, and thank you for joining us today. I'll focus my initial remarks on the key highlights in the quarter laid out on slide five of the deck, and then we can switch to Q&A. We reported E&I for a share of 47 cents for the quarter, compared to 50 cents as we reported for the fourth quarter of 2019. The EPS decline compared to the year-ago quarter primarily reflects the impact of closing the sale of Barrow-Henry in the middle of the quarter, and hence missing the earnings from that affiliate for the back half of the quarter. And this was only partially offset by us achieving our target for expense reduction in our corporate center and our shared buyback activity in the year. The E&I of 47 cents in the quarter is flat compared to the third quarter of this year, which was also 47 cents. And this, again, reflects the bearer-handler disposition in the quarter, which led to lower E&I in our liquid alpha segment. But the decline in liquid alpha segments relative to third quarter was offset by higher ENI in our quantum solutions segment, driven by the continuing market recovery, and higher ENI in our alternative segment, driven by net inflows. Our net client cash flows in the quarter on a pro forma basis, that is excluding Barrow-Hanley, improved slightly to minus 0.3 billion compared to minus 0.5 billion that we had in the third quarter. The fourth quarter net outflows of $0.3 billion comprised net inflows of $0.6 billion in alternatives, reflecting continued fundraising and other flows, and net inflows of $0.4 billion in pro forma liquid alpha. So a combined $1 billion of net inflows from these two segments, which was offset by net outflows of $1.3 billion in quantum solutions. resulting in the $0.3 billion of net outflows. Our investment performance remains generally stable and is similar to the third quarter. As I mentioned earlier, in the fourth quarter, we reached our target, a bit ahead of schedule, of reducing our annualized corporate center costs by $20 million. Turning to capital management, we completed the sale of Barrow-Hanley in the middle of the quarter and we used a part of the proceeds to fully pay off the remaining $80 million of borrowings on our corporate revolving facility. We expect to use the rest of the proceeds reflected in our outsized cash position on the balance sheet to return more capital to the shareholders and potentially deal out this further. As you will note, our cash balance at the end of the fourth quarter was $403 million, compared to 130 million at the end of the third quarter. Now let me turn the call back to the operator, and I'm happy to answer questions at this point. Thank you.