Virtus Investment Partners, Inc.

Good morning. My name is Kevin, and I'll be your conference operator today. I would like to welcome everyone to the Virtus Investment Partners quarterly conference call. The slide presentation for this call is available in the investor relations section of the Virtus website at www.virtus.com. This call is also being recorded and will be available for replay on the Virtus website. At this time, all participants are on a listen-only mode. After the speaker's remarks, there will be a question and answer period, and instructions will follow at that time. I will now turn the conference over to your host, Sean Rourke.

Thank you, Kevin, and good morning, everyone. On behalf of Virtus Investment Partners, I would like to welcome you to the discussion of our operating and financial results for the second quarter of 2020. Our speakers today are George Aylward, President and CEO of Virtus, and Mike Angerthal, Chief Financial Officer. Following their prepared remarks, we will have a Q&A period. Before we begin, I direct your attention to the important disclosures on page two of the slide presentation that accompanies the webcast. Certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's news release and discussed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those discussed in the statements. In addition to results presented on a GAAP basis, we use certain non-GAAP measures to evaluate our financial results. Our non-GAAP financial measures are not substitutes for GAAP financial measures and should be read in conjunction with the GAAP results. Reconciliations of these non-GAAP financial measures, the applicable GAAP measures, are included in today's news release and financial supplement, which are available on the website. Now I'd like to turn the call over to George.

George? Thank you, Sean. Good morning, everyone. Thank you for joining us on our second quarter earnings conference call. We are pleased with the second quarter results, which included strong positive net flows Our highest level of sales, continued excellent investment performance, disciplined expense management, and further reduction in debt and continued return to capital. We're especially pleased with the strong organic growth, which exceeded 11% on an annualized basis, and the composition of the growth being broad-based with contributions across product categories and investment strategies. The favorable trends that we've experienced in sales and flows reflect the distinctive and differentiated nature of our investment strategies as well as the quality of our retail and institutional distribution. I would also highlight our announcement earlier this month that we've entered into an agreement for a strategic partnership with Allianz Global Investors, which weighted approximately $24 billion in assets under management, in what we would expect to be a highly accretive transaction that would enhance our fund offerings, distribution capabilities, and growth opportunities. So turning now to a review of the results, Long-term assets under management at June 30th recovered to near peak levels, increasing sequentially by nearly $18 billion, or 20%, to $107.1 billion, as a result of both market appreciation and positive net flows. Total assets, which include liquidity strategies, ended the period at $108.5 billion. Sales momentum continued, with a sequential increase of 30% to $9.1 billion, our highest level since becoming public. with significant increases in open-end funds, retail separate accounts, and institutional. For the quarter, we had $2.5 billion of positive net flows with strong momentum across products and asset classes. This continued the favorable trend we've seen this year, other than the disruption earlier in the year during the worst of the market dislocation. Open-end net flows were positive $0.4 billion, primarily due to strong positive net flows in domestic equity, retail separate accounts, have positive net flows of $0.8 billion, led by the intermediary sole channel, which has now generated 18 consecutive quarters of positive flows. Institutional net flows were positive $1.5 billion, with contributions from existing mandates and new accounts, reflecting the attractiveness of our investment strategies and continued traction from our investments in institutional distribution. In terms of what we're seeing in July, for the month to date, the trends of the second quarter have continued. Our financial results for the quarter reflected the impact of last quarter's equity market declines as lower beginning of period assets led to a sequential decline in average assets, which had an unfavorable effect on investment management fees for the quarter. Largely offsetting the revenue decline was a significant decrease in expenses due to lower seasonal employment expenses as well as lower travel and entertainment. Operating income has adjusted of $40.5 million and the related margin of 34.3%, increased from $40.1 million to 31.5%, respectively, in the first quarter. Organics per share has adjusted, declining to minus 2% over the first quarter to $3.24, largely due to lower revenues, mostly offset by significantly lower other operating expenses and the impact of the seasonal employment expenses in the first quarter. Turning now to capital, We continued our balance-approved approach to capital management. During the quarter, we repurchased approximately 75,000 shares, or about 1% of shares outstanding, and continued the consistent paydown of our term loan, ending the quarter with net debt to Bank EBITDA of 0.3x. Over the past year, we've reduced our debt by 25%. With that, let me turn the call over to Mike to provide more detail on the results. Mike?