BrightSphere Investment Group Inc.

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 risk and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding this risk and uncertainties appears in our SEC filings, including the form AK filed today containing the earnings released Our 2023 Form 10-K and our Form 10-Q for the first quarter of 2024. Any forward-looking statements that we make on this call are based on the 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 the reconciliation of those measures to gap measures, can be found on our website, along with the slide set we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer, a solicitation to buy any investment products. Sir and Rana, our President and Chief Executive Officer will lead the call, and now I'm pleased to turn the call over to sir.

Thank you, Melody. Good morning, everyone, and thanks for joining us today. I'll cover some of the main highlights on slide five of the deck in my initial remarks, and then I can answer any questions. So, for the second quarter of 2024, we reported ENI per share of 45 cents compared to 28 cents in the second quarter of 2023, and 44 cents in the first quarter of 2024. The 61% increase in ENI per share compared to the year-ago quarter was primarily driven by increase in management fee revenue due to higher AUM from the market appreciation that we saw over the last 12 months. And secondly, it was also driven by our share repurchases over the last few quarters. Our average AUM increased approximately 13% compared to the second quarter of 2023, and management fee revenue increased 14% in line with the AUM increase. However, since we were able to keep our operating expenses generally flat year over year, our ENI increased 43% because of the 14% increase in revenue. This disproportionate increase in ENI versus revenue increase reflects our continued expense discipline and the embedded operating leverage in our business. We would expect to continue to benefit from this operating leverage as our revenue grows. Additionally, the increase in ENI per share versus a year ago was 61% compared to the 43% increase in ENI that I just went through. And that difference was driven by our share repurchases over the last year. Between December 2023 and June of 2024, we repurchased 4.7 million of our shares, or 11% of our total outstanding shares, for $100 million. As of June 30, 2024, 86%, 92%, and 93% of Acadian Strategies by Revenue outperformed their respective benchmarks across three, five, and 10-year periods. Turning to flows. Net client cash flows were incidentally flat for the second quarter. In the second quarter, we had select large and lumpy inflows. But we also had select large and lumpy outflows. And these lumpy flows basically offset each other. Our growth initiatives continue to progress. On our systematic credit initiative, Acadian's U.S. high-yield strategy that was seeded in November 2023 and the global high-yield strategy seeded more recently in April 2024, both continue to build good track records. Additionally, we just seeded a third credit strategy, U.S. investment rate strategy, in July 2024. And that strategy is also building a track record now. On our equity alternatives initiative, our multi-strategy fund, seated in Q4 of 22, continues to build a strong track record of our performance. Turning to capital management, as I mentioned earlier, we repurchased 11% of our outstanding shares since December of 2023 for $100 million. Specifically in Q2 of 24, we repurchased 0.9 million shares, or 2% of our total outstanding shares, or $21 million. At the end of second quarter, we had a cash balance of $72 million, and Acadian had an outstanding balance of $36 million on their revolving credit facility, which, similar to prior years, is expected to be repaid fully from cash from operations by year end. I'd like to close my initial remark by reiterating, as I usually do, that we remain focused on maximizing shareholder value and will continue using our free cash flow to support organic growth and to buy back our shares. I'll now turn the call back to the operator, and I'm happy to answer questions at this point. Thank you.

Thank you. And at this time, those with questions should lift their phone receiver and press star followed by the number one on their telephone keypad to enter into the Q&A queue. To cancel a question, again, remember, please press star followed by the number one again. Please hold for a brief moment while we compile the Q&A roster. Our first question for today comes from the line of Michael Cypress with Morgan Stanley. Your line is live.