Virtus Investment Partners, Inc.

Good morning. My name is Vidi, 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.

Thanks, DeeDee, 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 second quarter of 2025. Our speakers today are George Aylward, President and CEO, and Mike Angerthal, Chief Financial Officer. Following their prepared remarks, we'll 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 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, and good morning, everyone. Today I'll start with an overview of the results reported this morning, and then I'll turn it over to Mike for more detail. The second quarter began with challenging market conditions and volatility, but then had steady improvement, culminating in momentum by June, which is reflected in our financial and operating results. Asset standard management grew 2% in the quarter, benefiting from the market rebound off the April lows. Net outflows across products were primarily in our quality-oriented equity strategies, which faced headwinds in a market environment that largely favored momentum-driven strategies. Key highlights of the quarter included higher earnings per share and operating margin, continued positive net flows in ETFs, strong long-term relative investment performance, our highest level of share repurchases in three years, and low net leverage and meaningful liquidity providing ongoing flexibility to invest in the business and return capital to shareholders. We continue to focus on the execution of various initiatives related to expanding our offerings and channel availability, both organically as well as through inorganic opportunities. As we commented on last quarter, we have been focused on expanding our offerings of retail separate accounts, ETFs, and global funds. For ETFs and global funds, We anticipate launching multiple products over the coming quarters, including from Sylvan, Sykes, Stone Harbor, and Alpha Simplex. For retail separate accounts, we are expanding our offerings of fixed income and high conviction growth equity strategies, as well as products that leverage multiple managers and strategies. In addition, we are leveraging our fixed income capabilities with our first interval fund. We also have efforts underway to increase the availability of our growing ETF offerings and to expand the asset-raising capabilities of our well-regarded wealth management business within Kane Anderson, which has grown to nearly $9 billion in assets. As we focus on growth opportunities, we would note that the environment continues to be highly attractive for product expansion, distribution enhancing, or scale-oriented inorganic transactions. We remain optimistic about such opportunities, particularly in the areas of current and growing investor interest, such as private markets, and differentiated and compelling traditional strategies, which we are actively pursuing. The number of opportunities at various stages in the pipeline is at its highest level, despite its broad range of structures, capabilities, and sizes. Our strong liquidity and flexible balance sheet position is well-tapped on any strategically and financially compelling opportunities. Turning to investment performance, we are pleased with the performance we've generated over market cycles. Over the 10-year period, 74% of our equity assets and 69% of our fixed income assets beat their benchmark. For just mutual funds, 73% of equity funds and 85% of fixed funds outperformed the pure medium. I would also note that 27% of our retail funds are rated four or five stars, and 86% of our rated fund retail fund assets were in three, four, or five stars. We have included a new slide that provides additional investment performance information. Turning now to a review of the results, total assets under management were $171 billion at June 30th, up $4 billion sequentially due to market performance. Total sales of $5.6 billion compared with $6.2 billion in the first quarter, with modest decline across products, which was in part a reflection of market disruption, particularly early in the quarter. Trends improved over the course of the quarter, with June being our best month of net flows, including essentially break-even net flows and open-end funds. Total net outflows for the quarter of $3.9 billion were largely in equity strategies, as fixed income alternatives and multi-assets each had modest net outflows. We did continue to have positive net flows in ETFs, which reached $3.7 billion in AUM, with an organic growth rate of 74% over the trailing 12 months, and which hit $3.9 billion as of yesterday. Looking at pros across assets, the equity net outflows were driven by strategies with a quality orientation in a market that favored momentum, as well as we've reduced sales from the soft closing of the SMIT cap core equity model offering late last year. Fixed income net flows were modestly negative for the quarter with net outflows in April and May and a return to positive flows in June. Relative investment performance of our fixed income strategies has been strong for the recent one-year period, as well as the longer term, creating demand for funds across the spectrum of credit quality and duration, several of which were among our top-selling funds and ETFs in the quarter. Net flows of alternative strategies were also modestly negative, with favorable trends throughout the quarter, including positive net flows in June. In terms of what we're seeing in July, market sentiment has continued to trend more favorably, and we are seeing a stronger flow profile for our fixed income funds, though not yet for the equity funds. ETFs, as I noted, continue the positive trend with an increase in sales. In institutional, trends are similar to the second quarter, with known redemptions exceeding known wins, with redemptions primarily in quality large cap, while known wins span a range of strategies, including emerging market debt and global and domestic REITs. We also anticipate launching a new CLO later in the third quarter, targeting approximately $400 million in AUM. Turning now to our financial results, the sequential improvement in our financial results reflected the impact of the prior quarter seasonal expenses, partially offset by lower average AUM levels. The operating margin was 31.3%, up sequentially from 27.6%, which included the impact of the seasonal expenses. Earnings per share as adjusted of $6.25 increased from $5.73 in the first quarter. Relative to the more comparable prior year period, earnings per share as adjusted decreased 4% on lower average assets. In terms of our balance sheet and capital, during the quarter, we increased our share buyback to $30 billion to repurchase over 175,000 shares, which represented 3% of beginning outstanding shares. We ended the quarter with significant liquidity and modest net debt position, providing ongoing opportunities to invest in the growth of the business and return capital to shareholders. So with that, I'll turn the call over to Mike. Mike?