Virtus Investment Partners, Inc.

and will be available for replay on the VRTIS website. At this time, all participants are in 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 Vaught. Sir, you may begin.

Thank you, and good morning, everyone. On behalf of VRTIS Investment Partners, I'd like to welcome you to the discussion of our operating and financial results for the second quarter of 2023. Our speakers today are George Elward, President and CEO, and Mike Angerthal, Chief Financial Officer. Following the prepared remarks, we will have a Q&A period. Before we begin, please note the disclosures on page two of the slide presentation. Certain matters discussed in 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 violence. 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 results and should be read in conjunction with the GAAP results. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's news release and financial supplement, which are available on our website. Now I'd like to turn the call over to George. George?

Thank you, Sean. Good morning, everyone. I'll start with an overview of the results we reported earlier today before turning it over to Mike to provide more detail. Key highlights of the second quarter included a meaningful improvement in net flows to break even, strong institutional sales and flows across affiliates, strategies, and geographies, positive net flows in global funds, private client, and ETFs, attractive investment performance both long-term and year-to-date across strategies, continued investment in the diversification of the business with the addition of a new affiliate, and we maintained a well-positioned balance sheet and modest net leverage. Turning now to review the results, total assets under management increased 9% to $168 billion due to the addition of Alpha Simplex and market appreciation. Sales increased 22% sequentially to $7.6 billion due to continued momentum in our institutional business. On the retail side, sales declined primarily in domestic equity, though global equity sales increased significantly. Retail separate account sales were essentially unchanged from the prior quarter. Our net flows were breakeven, a significant improvement from the prior quarter due to institutional. By product, institutional net flows of $2.2 billion improved from modest net outflows in the first quarter, with strong sales and net flows across affiliates, strategies, and geographies. Over the past four quarters, institutional has generated 5% organic growth in a challenging environment. Fund net outflows of $2.1 billion compared with $1.8 billion in the first quarter as an improvement in fixed income strategies was more than offset by lower equity flows consistent with the industry. Within equities, both global equity and domestic SMIT cap generated positive net flows. Retail separate accounts continue to be at relatively break-even levels. In terms of what we're seeing in July, our institutional pipeline remains strong with one but not funded mandate succeeding known redemptions, and we see opportunities in the CLO market. For open-end funds, trends have improved meaningfully, including continued positive flows in our global funds as well as our ETFs. Our second quarter financial results reflected the impact of market appreciation on AUM levels, particularly near the end of the quarter, as well as the addition of a new affiliate at the beginning of the quarter. The operating margin was 32.3%, up sequentially from 26.8, primarily due to the impact of seasonal employment expenses in the prior quarter. Earnings per share is adjusted to $5.43, increased from $4.20 in the first quarter. Excluding prior quarter seasonal items, earnings per share as adjusted increased 2% sequentially. Turning now to capital. Our balanced and prudent approach to capital management supported by significant financial flexibility has positioned us to invest in growth initiatives, such as strategically adding affiliated managers, while returning capital to shareholders and maintaining appropriate levels of working capital and leverage. During the quarter, we closed on AlphaSimplex with existing financial resources, including utilization of our revolving credit facility. We also repurchased approximately 52,000 shares for $10 million, And in June, we repaid $10 million of the credit facility. We ended the quarter with modest net debt, positioning us to continue to be flexible in prioritizing capital allocation as circumstances warrant, including paying down the credit facility this year and repurchasing shares, which are key priorities. With that, I'll turn the call over to Mike.