Virtus Investment Partners, Inc.

Good morning. My name is Deedee, and I will 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, www.Virtus.com. This call is being recorded and will be available for replay on the Virtus 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 to your host, Sean Rourke.

Thank you, Dede, and good morning, everyone. On behalf of Virtus Investment Partners, I'd like to welcome you to the discussion of our operating and financial results for the first quarter of 2024. Our speakers today are George Elward, President and CEO, and Mike Angerthal, Chief Financial Officer. Following their 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 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 results. It should be read in conjunction with them. 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, and good morning, everyone. I will start with an overview of the results we reported this morning, and then I'll turn it over to Mike to provide a little more detail. Market strength continued into the first quarter despite ongoing investor uncertainty over the path of inflation and interest rates, leading to growth in our assets under management to $179 billion. We saw meaningful increases in retail and institutional sales and improved net flows across asset classes and strategies, given the diversity of our product offerings, compelling investment performance, and effective distribution. We were also pleased with the recognition and barons of our investment performance earlier this year, which identified us as a top five fund family for all periods under review, including for the year of 2023, as well as the longer-term five- and ten-year periods. For the quarter, our highlights included a 22% increase in sales with strong growth in all product categories, positive net flows in retail separate accounts, ETFs, and global funds, growth in operating earnings and the margin, excluding seasonal expenses, attractive investment performance across strategies, and continued return of capital through share repurchases, net settlements, and our dividend, and we ended the quarter with reasonable levels of leverage. Turning now over to the results, total assets under management increased 4% to $179 billion, primarily due to favorable market performance in addition to positive net flows in retail separate accounts, partially offset by net outflows in institutional and open-end funds. Sales increased 22% to $7.6 billion with double-digit growth in all product categories, including a 47% increase in sales of institutional, 18% in open-end funds, and 12% in retail separate accounts as investors slowly began to put some cash back to work as equity markets reached new highs. Open-end fund sales reached their highest level in two years with growth across most strategies, and our retail separate account sales were the highest in three years. Net outflows were 1.2 billion, an improvement from the net outflows of 3.8 billion in the prior quarter. By product, institutional net outflows of 1.3 billion, a sequential improvement from 2.2 billion. The redemptions include the rebalancing by several accounts given the strong equity market appreciation over the past two quarters. Institutional is inherently variable on a quarterly basis though we continue to see broad-based interest in our strategies. Retail separate accounts generated positive net flows of $0.7 billion, the highest level in two years. Demand for SMID and MidCap has been strong, and we continue to introduce additional strategies to complement those offerings to drive growth over time. Open-end fund net outflows of $0.6 billion were at their best level since the second quarter of 2021 and improved from $2.0 billion in the fourth quarter with better flows in most strategies and positive net flows in SMIT cap, global equity, and fixed income. In terms of what we're seeing so far in April, many of the first quarter trends have continued, including solid momentum in retail separate accounts and ETFs, as well as generally similar retail fund flow trends with pockets of strength in certain strategies. In institutional, we have high levels of activity across both geographies and strategies, though based on known fundings and redemptions, the second quarter is tracking similarly to the first. Our first quarter financial results reflected the impact of seasonally higher employment expenses, absent which we achieved sequential improvements in both operating income and margin as we generated higher revenues and closely managed expenses. Excluding the seasonal employment expenses, the operating margin was 33.6, up 60 basis points from the fourth quarter, due to higher revenues and lower other operating expenses. Earnings per share has adjusted at $5.41, declined from the fourth quarter due to $1.11 of seasonal expenses. Excluding those expenses, EPS has adjusted and increased 7% differentially. On the more comparable year-over-year basis, earnings per share has adjusted and increased 29%. Turning it out of capital, During the quarter, we repurchased or net settled approximately 64,000 shares for $15 million. We continue to take a balanced approach to capital management by investing in our growth, returning capital to shareholders, and maintaining appropriate levels of leverage. Over the past year, we have repurchased or net settled 296,000 of our shares for $61 million and reduced outstanding shares by 2%, raised our quarterly dividend by 15%, closed on a strategic acquisition that increased our product capabilities, and maintained net leverage below 0.5x. We ended the quarter in a modest net debt position as the first quarter represents our highest quarter of cash utilization, given the timing of annual incentives and a revenue participation payment. We continue to generate significant cash flow, providing ongoing opportunities to invest in the growth of the business and return capital to shareholders. With that, I'm going to turn the call over to Mike. Mike?