Virtus Investment Partners Q4 2024: Contradictions in M&A Strategy, Capital Management, and Tax Reporting

These are the key contradictions discussed in Virtus Investment Partners' latest 2024 Q4 earnings call, specifically including: M&A Strategy and Pipeline, Capital Management, and Tax Reporting Practices:



Earnings and Margin Growth:
- Earnings per share as adjusted increased by 8% from the third quarter to the highest level since Q1 2022, with full-year earnings per share growing by 20%.
- Operating margin reached its highest level in 2.5 years at 35.1%, up from 34.4% in Q3.
- This growth was driven by higher average AUM levels and ongoing expense management.

ETF and Global Fund Growth:
- ETF assets doubled over the past year to $3.1 billion, with an organic growth rate of 84%, generating over $0.5 billion in sales during the fourth quarter.
- Global funds also saw positive net flows, with sales of $275 million, up 40% from the prior year period.
- The growth in ETFs and global funds is attributed to new product introductions and increased availability through intermediaries.

Retail Separate Account Performance:
- Retail separate accounts generated positive net flows of $0.1 billion, delivering 4% organic growth over the past year.
- Positive flows were consistent in the intermediary sold channel and the wealth management business.
- The growth in retail separate accounts is due to consistent positive net flows and a focus on expanding availability through intermediaries.

Institutional Redemptions and Flows:
- Institutional accounts experienced net outflows of $3.8 billion due to a $3.3 billion lower fee partial redemption.
- Excluding this redemption, institutional net outflows were $0.5 billion, indicating more stable conditions.
- The institutional outflows were primarily due to the reallocation of assets within a multi-manager mandate.