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- **Challenges persist**: Q4 net outflows of $8.1 billion due to underperformance of quality equity strategies, despite 76% of fixed income AUM outperforming.\n- **Strategic diversification**: Expanded into private markets with Keystone (private credit) and Crescent Cove (venture growth), and launched 3 new ETFs.\n- **Financial resilience**: Operating margin of 32.4%, $386 million liquidity, and $10 million share buybacks.\n- **Key risks**: Style headwinds for equities, AUM decline to $159.5 billion, and elevated institutional redemptions.\n- **Growth drivers**: ETF AUM up 72% YoY, private market expansion, and 62% of equity AUM outperforming benchmarks over 10 years.\n

**【CEO Summary Section】**
- **Challenges with quality-oriented equity strategies**: Q4 2025 net outflows of $8.1 billion driven by underperformance of quality equity strategies, despite strong long-term track record.\n- **Areas of strength**: Positive net flows in ETFs (+$0.6 billion), expansion into private markets (Keystone National and Crescent Cove), and 76% of fixed income AUM outperforming benchmarks.\n- **Strategic initiatives**: Launch of 3 new ETFs, 25 ETFs across strategies, and $10 million in share buybacks.\n- **Performance highlights**: 62% of equity AUM outperformed benchmarks over 10 years; 84% of retail fund assets in 3-5 star ratings.\n- **Private market expansion**: 56% stake in Keystone (private credit) and 35% in Crescent Cove (venture growth).\n\n**【CFO Financial Commentary】**\n- **AUM decline**: $159.5 billion at Q4 end vs. $169 billion prior, due to market performance and outflows.\n- **Fee rate dynamics**: 40.6 bps in Q4, guided to 41-42 bps for Q1 2026, with Keystone adding 1 month of impact.\n- **Operating margin**: 32.4% (down from 35.3% Q3), driven by lower AUM and cost control.\n- **Capital deployment**: $10 million share buybacks, $40 million for Crescent Cove, and $200 million pending for Keystone.\n- **Liquidity**: $386 million cash, $250 million undrawn revolver.\n\n**【Q&A Highlights】**\n- **Fee rate compression**: Normalized to 40.9 bps, stable due to diversified AUM and cost control.\n- **Strategic M&A focus**: Private markets (Keystone, Crescent Cove) and growth equity ETFs.\n- **Software exposure**: Underweight in existing AUM, but Crescent Cove focuses on early-stage tech.\n- **Flow outlook**: Q4 outflows driven by tax loss harvesting; Q1 2026 sales at highest since June, with ETFs leading.\n- **Comp ratio**: 50-52% post-Q1, reflecting Keystone addition.\n\n**【Risk and Opportunity】**\n- **Headwinds**: Style headwinds for quality equities, AUM decline, and elevated institutional redemptions.\n- **Opportunities**: ETF growth (72% YoY AUM), private market expansion, and long-term performance resilience.\n

Virtus Investment Partners, Inc. (VRTS) Q4 2025 Earnings Call Transcript

- **ETF dominance**: 79% YoY growth in ETF AUM, with 77% of strategies outperforming peers.
- **Financial resilience**: Q3 EPS up 7% to $6.69, operating margin 33.4%, despite $3.9 billion net outflows.
- **Strategic flexibility**: $400 million debt refinancing enhances liquidity; 8th consecutive dividend increase.
- **Challenges ahead**: Quality equity underperformance in momentum-driven market, but long-term track record of 70% outperformance.

**【CEO Summary Section】**
- **Strong financial performance**: Q3 EPS of $6.69, up 7% from Q2, driven by higher average assets under management and stable operating expenses. Operating margin improved to 33.4%.
- **ETF success**: ETF assets reached $4.7 billion (79% YoY growth), with $0.9 billion in sales and net flows. 77% of ETF AUM outperformed benchmarks over 3 years.
- **Challenges in equity**: Net outflows of $3.9 billion due to underperformance of quality-oriented equity strategies in a momentum-driven market.
- **Strategic initiatives**: Completed $400 million term loan refinancing, increasing liquidity; raised dividend for the 8th consecutive year.
- **Pipeline expansion**: 21 ETFs with several new filings, including growth equity, real estate, and multi-managed fixed income strategies.

**【CFO Financial Commentary】**
- **AUM breakdown**: $169.3 billion total, with 33% in institutional, 28% in retail separate accounts, and 27% in U.S. retail mutual funds.
- **Sales and flows**: Q3 sales of $6.3 billion (12% QoQ growth), with $0.9 billion in ETF sales. Net outflows of $3.9 billion unchanged from Q2, driven by equity strategy outflows.
- **Expense management**: Operating expenses as a percentage of revenue declined to 15.8%, benefiting from $1 million in discrete business initiative expenses.
- **Liquidity**: $371 million in cash and $300 million in other investments, supporting capital returns and growth initiatives.

**【Q&A Key Highlights】**
- **ETF distribution focus**: Expanding access in wirehouses, RIAs, and model providers; 77% of ETFs outperform peers over 3 years.
- **Inorganic growth strategy**: Disciplined approach to acquisitions, prioritizing scale, differentiated capabilities, and private market expansion.
- **Flow outlook**: Positive trends in fixed income and alternatives offset by equity headwinds; ETF sales remain strong.
- **Capital allocation**: Buybacks ($50 million YTD) balanced with debt refinancing and growth investments.
- **Performance context**: Quality equity underperformance in 2-year period (S&P MidCap Quality trailing momentum by 32%), but long-term track record of 70% equity funds outperforming peers.

Virtus Investment Partners, Inc. (VRTS) Q3 2025 Earnings Call Transcript

- **AUM Growth and Strategy**: AUM up 2% to $171 billion, with ETFs driving 74% YOY growth. $30 million share buyback highlights capital return focus.
- **Financial Performance**: Adjusted EPS of $6.25, 9% Q/Q rise, supported by 31.3% operating margin. Expense management maintained at 50.9% of revenue.
- **Market Momentum**: June net flows breakeven, July shows strength in fixed income and ETFs. Institutional outflows concentrated in quality equities.
- **Strategic Expansion**: New CLO launch and M&A pipeline targeting private markets and differentiated strategies.

**【CEO Summary Section】**
- **Revenue and AUM Growth**: Total assets under management (AUM) reached $171 billion, up 2% sequentially due to market recovery. Net outflows of $3.9 billion were driven by quality-oriented equity strategies, while ETFs saw positive net flows of $0.2 billion.
- **Strategic Initiatives**: Launched multiple new products, including ETFs and retail separate accounts, with a focus on fixed income and high-conviction growth equity. Anticipated new CLO targeting $400 million in AUM.
- **Performance Highlights**: 74% of equity assets and 69% of fixed income assets outperformed benchmarks over 10 years. 27 retail funds rated 4 or 5 stars.
- **Capital Allocation**: Repurchased $30 million in shares, highest in 3 years, with plans to balance buybacks with inorganic growth opportunities.

**【CFO Financial Commentary】**
- **Financial Results**: Adjusted EPS of $6.25, up 9% from Q1, driven by seasonal expense normalization. Operating margin improved to 31.3% from 27.6%.
- **Expense Management**: Employment expenses as a percentage of revenue stabilized at 50.9%, within the 49%-51% target range. Other operating expenses remained steady at $30-$32 million.
- **Balance Sheet**: $172.2 million in cash, $62.5 million net debt, and $175 million undrawn revolver, providing flexibility for growth and capital returns.

**【Q&A Highlights】**
- **Capital Strategy**: $50 million in share buybacks year-to-date, with focus on balancing buybacks, dividends, and M&A. Pipeline includes private markets and differentiated traditional strategies.
- **Flow Trends**: July showed continued strength in fixed income and ETFs, with June net flows breakeven. Institutional outflows concentrated in quality large-cap equities, while emerging market debt and REITs saw inflows.
- **ETF Growth**: ETF AUM grew 74% year-over-year, with focus on expanding product availability and SMA offerings.
- **M&A Outlook**: Active pipeline with focus on scale-oriented, accretive opportunities in private markets and traditional strategies with differentiated capabilities.

Virtus Investment Partners, Inc. (VRTS) Q2 2025 Earnings Call Transcript

- **Strong relative performance**: 70% of equity strategies beat benchmarks in Q1, 74% of equity AUM outperformed peers over 10 years.
- **ETF growth engine**: ETFs achieved 73% organic growth YoY, driven by new product launches.
- **Capital flexibility**: $100M net debt (0.3x EBITDA) supports growth investments and $20M Q1 share buybacks.
- **Fee rate stability**: 41-42bps target maintained, with 50-55% incremental margin on new sales.
- **Tax asset value**: $16/sh NPV from intangibles, providing $2.50/sh annual cash benefit.

**【CEO Opening Remarks】**
- Total AUM of $166.5B at Q1 2025, down sequentially due to market volatility and net outflows.
- Key highlights: 70% of equity strategies outperformed benchmarks, 74% of equity AUM beat peers over 10 years, and ETFs grew organically by 73% YoY.
- New product developments include first interval fund and expanded fixed income retail separate accounts.
- Share repurchases of $26M reduced shares outstanding by 3% YoY, with a balanced approach to capital allocation.

**【CFO Financial Breakdown】**
- Adjusted EPS of $5.73 (down 6% QoQ due to seasonal expenses), with 6% YoY growth.
- Fee rate of 41.7bps (stable QoQ), targeting 41-42bps for modeling.
- Operating margin of 32.7% excluding seasonal costs, with 50-55% incremental margin on new sales.
- Other operating expenses managed to $31.3M, with $1M quarterly savings from office space reductions.
- Net debt of $100M (0.3x EBITDA), maintaining financial flexibility for growth and shareholder returns.

**【Q&A Key Takeaways】**
- Fee rate stability: 41-42bps range maintained, with no immediate pressure from market mix shifts.
- Capital allocation: Increased share buybacks ($20M Q1) driven by stock valuation and cash flow generation.
- SMA strategy capacity: No broad capacity constraints, with mid-cap strategies seeing growth post-SMID-Cap soft close.
- Tax asset transparency: $112M NPV ($16/sh) from intangibles, providing $2.50/sh annual cash benefit.

Virtus Investment Partners (VRTS)-25 Apr 25-2025 Q1 Earnings call transcript

- **Record Margin & Growth**: 35.1% operating margin, highest in 2.5 years, with EPS up 20% YoY.
- **ETF Explosion**: AUM doubles to $3.1B in a year, Q4 sales $0.5B, January flows ahead of Q4 average.
- **Strategic Focus**: Fixed income, global funds, and alternative strategies to offset equity headwinds.
- **Capital Flexibility**: Net cash position, $57M buybacks, and 18% dividend hike in 2024.
- **M&A Watch**: Actively pursuing private market opportunities with leverage flexibility up to 2x.

**【CEO Opening Remarks】**
- Q4 2024 AUM of $175 billion, down 5% sequentially due to net outflows and market performance. Key highlights include positive flows in ETFs (+$0.4B), global funds, and retail SMAs. Operating margin reached 35.1%, highest in 2.5 years. Introduced 20 ETFs with AUM doubling to $3.1B in a year. Partial institutional redemption of $3.3B impacted net outflows.

**【CFO Financial Breakdown】**
- Q4 revenue $192.2M (+4% YoY), driven by higher AUM and stable fee rate (42bps). Operating expenses controlled, with employment costs at 49.2% of revenue. Other operating expenses $31M, stable despite rising costs. EBITDA $88M (+5% QoQ). Full-year EPS grew 20% to $7.50.

**【Q&A Key Themes】**
- **ETF Growth**: Q4 ETF sales $0.5B, up 13% QoQ. AUM doubled YoY, with 67% organic growth. January flows ahead of Q4 average.
- **M&A Strategy**: Actively evaluating private market opportunities, especially alternative strategies. Leverage target under 2x for transactions.
- **Capital Allocation**: $57M share buybacks in 2024, 18% dividend hike. Seed capital for new products remains a priority.
- **AI & Tech**: Exploring AI in quantitative strategies, with managers independently applying tools to enhance alpha generation.
- **2025 Outlook**: Focus on fixed income, global funds, and institutional mandates. ETFs and SMAs expected to drive growth despite uncertain equity markets.


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