Westwood (WHG) Q3 Earnings call transcript Oct 30, 2024

In Westwood Holdings Group, Inc.'s recent earnings call for the third quarter of 2024, the company showcased its robust performance and strategic initiatives, providing valuable insights into its growth prospects and market positioning. Here are the key takeaways from the call.

Financial Highlights and Performance

Westwood Holdings reported a 5% increase in total assets under management, reaching $17.7 billion, marking the highest level in six years. The company's sales teams achieved strong institutional gross flows over $1 billion year-to-date, with a pipeline of nearly $2 billion. Additionally, the successful launch and growth of two energy ETFs, MDST and WEEI, are notable achievements, with MDST crossing $50 million in AUM and passing a critical trading volume threshold.

Strategic Initiatives and Market Positioning

The call highlighted Westwood's strategic focus on high-quality businesses with strong free cash flows, high returns on invested capital, and the ability to deliver strong returns to shareholders. The company's alignment with the current market dynamics, particularly the shift towards value strategies, positions it well for the future. Westwood's multi-asset strategies, such as alternative income, credit opportunities, and real estate income, are performing solidly and rank in the top decile of their respective categories.

Innovation and Partnerships

Westwood's strategic initiatives include the launch of Managed Investment Solutions (MIS), the formation of a joint venture partnership with industry pioneer Ben Fulton, and the expansion of its ETF platform with innovative defined volatility ETFs. These moves underscore the company's commitment to innovation and its ability to capitalize on market trends and opportunities.

Market Outlook and Challenges

Westwood acknowledged the challenges of continued uncertainty driven by political concerns domestically and abroad. However, the company remains vigilant in managing risks at the macro, sector, and company levels. Westwood's focus on high-quality businesses and strong free cash flows positions it well for the future, as it continues to navigate the market landscape.

Looking Ahead

Westwood's robust pipeline, particularly in the U.S. value SMID and small-cap segments, is a testament to its strong market positioning and demand for its investment solutions. The company's commitment to growth segments, such as custom index solutions and the ETF universe, underscores its strategic focus and innovative approach.

In conclusion, Westwood Holdings Group, Inc.'s earnings call for the third quarter of 2024 showcased the company's robust performance, strategic initiatives, and market positioning. With a focus on high-quality businesses, innovation, and strategic partnerships, Westwood is well-positioned for future growth and success.