Westwood Holdings Group's Q2 2025: Unpacking Key Contradictions in Asset Management and Growth Strategies

Asset flows and management, ETF franchise and seed capital, MDST ETFs growth and national platforms, asset management growth and market conditions, and cost structure reengineering and headcount adjustments are the key contradictions discussed in Westwood Holdings Group's latest 2025Q2 earnings call.



Assets Under Management (AUM) Growth:
- Westwood Holdings Group's AUM reached $18.3 billion, up 9% from $16.8 billion in Q2 of the previous year.
- The growth was driven by positive net flows across several key strategies, including ETFs, private funds, and energy, despite market volatility.

ETF Expansion and Performance:
- Westwood's Enhanced Midstream Energy ETF (MDST) surpassed $100 million in assets, with an annualized distribution rate of 10.2%.
- The achievement validates the company's differentiated ETF strategy, opening doors to additional platform approvals and expanding distribution reach.

Investment Strategy Performance:
- Approximately 2/3 of Westwood's U.S. Value strategies outperformed their benchmarks over a trailing 3-year period, and 3/4 of these strategies outperformed over the trailing 5-year period.
- The strong performance can be attributed to the company's focus on high-quality businesses with strong fundamentals and attractive valuations.

Operational and Strategic Expansion:
- Westwood achieved several significant milestones, including being added to the Russell 2000 Index and expanding its ETF platform, particularly in the sector ETF area.
- These achievements are part of the company's strategic initiative to strengthen its competitive position and expand market opportunities.

Wealth Management Transformation:
- Westwood is evolving into a multifamily office model to serve the complex needs of ultra-high net worth families across Texas.
- This transition is aimed at delivering more comprehensive solutions, increasing client value, and positioning Westwood for long-term margin expansion.