Manning & Napier, Inc. Class A

Good evening. My name is Aaron, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Manning and Napier Fourth Quarter and Full Year 2021 Earnings Teleconference. Our hosts for today's call are Nicole Kingsley-Brunner, Chief Marketing and Strategy Officer, Mark Mayer, Chief Executive Officer, and Paul Battaglia, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 8 p.m. Eastern Time tonight. The dial-in number is 800-934-3033. No passcode is required. At this time, all participants have been placed in a listen-only mode. If you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Mrs. Nicole Kingsley Brunner. You may begin.

Thank you, Aaron, and thank you, everyone, for joining us today to discuss Manning and Pierce fourth quarter and full year 2021 results. Before we begin, I would like to remind everyone that certain statements made during this call not based on historical facts, including any statements relating to financial guidance, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Manning and Appear assumes no obligation or responsibility to update any forward-looking statements. During this call, some comments may include reference to non-GAAP financial measures. Full GAAP reconciliations can be found in our earnings release and related SEC filings. With that, I will turn the call over to our Chief Executive Officer, Mark Mayer. Mark?

Thank you, Nicole. Last quarter saw the continuation of the robust return environment that has characterized the pandemic recovery period. Client results were again very strong, even if relative results in some strategies fell a bit short of benchmarks. We will provide detail on those shortly. While today's call will cover our accomplishments during the quarter and full year of 2021, I'd like to take a moment to address the volatile market environment that we have seen so far in 2022. That markets will be unpredictable and at times turbulent is axiomatic. Anticipating precisely when and why volatility might increase and downturns might occur is problematic. However, It is our responsibility as investors and advisors to help our clients through less stable periods so that through inevitable cycles, we deliver the absolute and relative returns they need to meet their goals. In the final analysis, clients are looking for results. Whether they are individuals seeking security in retirement or financial professionals calling on us to deliver results above a required benchmark, it is imperative that investment excellence and superior device remain our cornerstones. Clients, not only private clients, but also financial advisors, pensions, endowments, and foundations look to us to help them frame their goals and the outcomes they desire and can realistically realize. This is the crucial role of advice and why it is so valuable. Then, They rely on us to design and deliver investment solutions architected to support those goals. And they expect us to execute, to deliver superior returns over time with less risk to a degree that enables them to realize their financial objectives. So 2022 is off to a turbulent start. Global equities are down about 5% from their peak in December. and has been well reported the most speculative companies around the world, those with very high valuations and no earnings, are down sharply, 50% or more. Fast-growing companies, including those with robust earnings, have seen their equities hit when they are perceived to be delivering disappointing news, as rising rates make longer-duration equities more vulnerable. As providers of advice, we are acutely attuned to market turbulence, We strive to put big declines or the fear of them in the appropriate long-term context. At the same time, we must always be empathetic. Volatility isn't some statistical phenomenon. It can be a real loss of wealth if investors crystallize those losses, either because they need the money right now or because they react to downturns by getting out of the market and missing the inevitable rebound. We can help our clients avoid crystallizing losses unnecessarily by providing sound advice coupled with five decades of successfully weathering market volatility, a demonstration of our credibility. We attempt to both moderate the downside risk of volatile markets through asset allocation while also taking advantage of volatility to build positions in stocks and credits whose fundamentals are sound and whose prices become attractive. A comprehensive plan, disciplined risk management, trusted advice from an experienced partner are most valuable if we are, in fact, entering a period where a rising tide no longer lifts all boats. Over time, we have demonstrated the ability to generate alpha not in spite of our prudent management of risk, but because of it. We have superior upside-downside capture ratios across our multi-asset fixed income and equity portfolios. Over 3, 5, 10, and 20 years, across the great majority of our strategies, we have captured more than 100% of market upsides while participating in well under 100% of market downturns. This pattern allows compounding, most compellingly shown in our flagship long-term growth strategy, which has returned 9.7% per annum after fees since inception in 1973. $100,000 invested in long-term growth in January 1973 is now worth $9.3 million. If one were fortunate enough to invest $1 million in 1973, today it is worth $93 million. In the fourth quarter of 2021, all of our risk-based strategies, which represent two-thirds of AUM, delivered positive returns, albeit slightly below blended benchmarks. For the full year 2021, our strategies again generated excellent absolute returns and all outperformed their blended benchmarks. All of these risk-based strategies are also delivering material outperformance over the trailing three- and five-year return windows. Most of the figures we will discuss are available on pages six and seven of the earnings supplement. In fixed income, our high-yield bond fund had another excellent quarter and year. In the fourth quarter, the fund delivered over 170 basis points of outperformance versus its benchmark and 470 basis points for the year. The high-yield fund ranks well into the top decile of its peer group over one, three, five, and 10-year periods. Our unconstrained bond series had another positive quarter amid a difficult yield environment, and its flexible approach helped allow it to provide over 400 basis points of outperformance above the Bloomberg Barclays aggregate for the full year. Our aggregate fixed income composite was down for the quarter, and results were slightly below benchmark for both the quarter and full year. results for our tax-exempt portfolios were slightly below benchmarks for both periods as well. Our fundamental bottom-up equity portfolios all underperformed in the fourth quarter. For the full year, our U.S. equity composite provided results in line with its benchmark, while our non-U.S. equity composite generated over 400 basis points of outperformance. For the full year, our global equity composite outperformed by over 100 basis points, while our core equity unrestricted composite underperformed by roughly 100 basis points, with the deviations between the two primarily explained by their respective over and underweightings to the U.S. equity market versus their benchmarks. All four of these core all-equity strategies are beating their benchmarks for the three- and five-year trailing time periods, and in some cases, exceptionally so. For example, our non-U.S. equity composite is out in front of its three- and five-year benchmarks by over 800 and 300 annualized basis points, respectively, an impressive achievement. Our Rainier International small-cap objective had an outstanding fourth quarter, substantially outperforming its benchmark by over 400 basis points and pushing full-year relative results ahead of benchmark as well. The strategy's longer-run results remain exceptional, with the sister International Discovery Fund generating three- and five-year annualized outperformance of over 950 and 700 basis points, respectively. Moreover, our real estate series continued its remarkable second-half run, delivering over 17 percentage points of absolute return and again outperforming its MSCI U.S. REIT benchmark. The strategy generated full-year returns of over 43%, and it is ahead of its benchmark for one, three, five, and 10-year trailing time periods. Our discipline value series returned to outperformance last quarter and narrowed its underperformance gap for the full year. We are proud to have delivered another terrific year of investment results for clients. Absolute returns were excellent for equity and multi-asset strategies, and relative results were generally strong again as well. As highlighted previously, we believe the investment environment has entered a period of higher risk as the global macro economy rapidly moves through its business cycle. Consistent with our risk disciplines, we would expect our portfolios to gradually pull back on risk, all else equal. However, should markets present an attractive buying opportunity, our award-winning investment research team stands ready to capitalize on behalf of clients. Turning now to strategic initiatives as we look back on both the quarter and the full year. Our flows trajectory has significantly improved over the past several years, although net flows were again negative for the fourth quarter. In 2018 and 2019, we experienced approximately 3.7 billion and 4.5 billion of net outflows each year, respectively. Since then, driven by investment excellence, and progress on our strategic initiatives, we were able to slash net outflows in half in 2020 and by yet another 75% this year, bringing our total rate of net outflows from 4.5 billion down to just over 0.6 billion in 2021. We are continuing to moderate our rate of outflows while seeing signs of increased sales productivity leading to improvements in our rate of inflows. We have confidence in our plan to return to net positive flows at an aggregate firm level for the calendar year 2022. Our intermediary channel has already experienced positive net flows for the past few quarters, and we project that our wealth management channel will be in positive net flows for 2022. We are continuing to invest in sales and client service personnel across our channels, a number of our most Recent hires in both wealth management and the intermediary channel are experienced, and we anticipate that their productivity ramps will be faster. On the intermediary side, we are focusing on leverage and efficiency. We have a unique and compelling offering that resonates with our current base of advisor partners, and we are focused on improving brand awareness and communicating our story to find new opportunities. We are continuing to take steps to evolve our investment strategies to meet client needs. Delivering results for clients is our number one priority, and we will not waver in executing on our time-tested processes. Additionally, in 2022, we will deepen our ESG integration. It is clear that sustainable investing will only grow in importance, and we will remain competitive. Also in 2022, we will continue to make progress in evolving our tax managed offerings, bolstering our existing competencies. Final implementation of advanced tax management tools will require systems development that will take most of the year to implement. In 2021, we made significant progress in advancing our technology. Workday is now fully implemented and this system is already helping us streamline both human resource and finance workflows. Significant elements of Charles River are in place and are now aiding our trading and portfolio implementation. These initiatives are essential steps forward as we work to operate with the efficiency, agility, and flexibility needed to compete in today's fast-paced environment. We look forward to further building out our technology capabilities in the year ahead. Finally, I'd like to take a moment to provide an update on people and culture. We are committed to having a talent-rich, diverse workforce, fully aligned with our clients and shareholders. Both our deferred compensation plan and the long-term incentive plan grants that were made last week have been invested in our mutual funds as we continue to invest alongside our clients. We strive to have a great culture that helps to attract and retain the best people. We continue to strengthen our culture and build a highly meritocratic and diverse workforce. In 2021, 44% of our new hires were female and 25% were ethnically diverse, consistent with the goals we set for ourselves. As I look back on the year that was, I believe we made significant strides as we executed on our key strategic initiatives. We are simultaneously delivering investment excellence, high touch client service, and compelling advice, all the while upgrading our major aspects of our infrastructure. The combined effect has been delivering improved economics for shareholders. With that, I'll turn the call over to Paul for more detail on our financials. Paul?