Financial Data and Key Metrics Changes - The company reported a 12% increase in assets under management (AUM) to $180 billion as of December 31, 2025, compared to year-end 2024 [12] - Revenues reached an all-time high of $336 million in the December quarter, up 11% from the previous quarter and up 13% year-over-year [12] - Adjusted operating income increased by 23% compared to both the prior quarter and the same quarter last year, with an adjusted operating margin of 40.2%, improving by 400 basis points from the prior quarter [15] Business Line Data and Key Metrics Changes - The credit platform's AUM grew by 29% year-over-year to $17.9 billion, with net inflows totaling $2.8 billion [8] - The alternatives platform's AUM increased by 20% to $4 billion, driven by strong organic growth [8] - The equity platform experienced outflows of $15.6 billion, primarily from Global Opportunities, U.S. Mid-Cap Growth, and Non-U.S. Small-Mid Growth strategies due to challenging short-term performance [8] Market Data and Key Metrics Changes - The company reported that 79% of AUM outperformed benchmarks over a 3-year period, 74% over 5 years, and 92% over 10 years, gross of fees [5] - The Emerging Markets Local Opportunities Strategy generated a calendar year return of over 24%, outperforming its benchmark by 527 basis points net of fees [6] Company Strategy and Development Direction - The company aims to expand its multi-asset class platform while maintaining a focus on high value-added investing and thoughtful growth [4] - The acquisition of Grandview Property Partners is part of the strategic expansion into alternative investments, establishing a foundation in private real estate [10] - The company plans to leverage its institutional and intermediated wealth relationships to further develop Grandview's business [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining and growing equity businesses despite recent outflows, emphasizing the need for differentiated investment performance [9] - The company anticipates continued growth in credit and alternatives, with a focus on expanding capabilities across its platform [10] - Management noted that the acquisition of Grandview is expected to have an immaterial impact on 2026 earnings but will be mildly accretive to earnings per share after the closing of Grandview's next flagship fund [19] Other Important Information - The board declared a quarterly dividend of $1.01 per share and a year-end special dividend of 57 cents, resulting in a total dividend of $3.87 per share for 2025, representing a 98% payout ratio relative to adjusted earnings [18] - The company ended the year with approximately $214 million in cash and a conservatively leveraged capital structure at approximately 0.4x leverage [17] Q&A Session Summary Question: Regarding Grandview's AUM and accretion guidance - Management explained that the AUM was lower due to realizations on properties in the Grandview Fund I, which is in the harvesting phase [24] - Fund III had about $150 million in committed assets, and management expects Fund IV to be significantly larger, with a first close anticipated in early to mid-summer [25][26] Question: On the International Value Strategy and recent outflows - Management indicated that outflows were primarily due to institutional reductions and not indicative of underlying issues, as the strategy continues to deliver strong absolute returns [37][38] Question: Interest in non-U.S. strategies - Management highlighted a reemergence of emerging markets allocations and strong performance in global strategies, with expectations for continued engagement in international markets [41][42][43] Question: Institutional demand by region - Management noted challenges in Europe due to regulatory changes and short-term performance but sees favorable opportunities in the U.S. marketplace, particularly in emerging markets and credit franchises [49][50]

Financial Data and Key Metrics Changes - Revenue growth of 7% compared to the previous quarter and 8% year-over-year, driven by strong market conditions and lower fixed expenses, leading to a margin expansion of 450 basis points [11] - Adjusted operating income increased by 22% compared to the prior quarter and 12% year-over-year [12] - Adjusted net income per adjusted share rose by 23% quarter-over-quarter and 11% year-over-year [12] Business Line Data and Key Metrics Changes - Assets under management (AUM) reached an all-time high of $181.3 billion, with net inflows in 14 of 26 investment strategies year-to-date [7][8] - The credit business saw $1.8 billion in year-to-date net inflows, marking the 13th consecutive quarter of positive credit flows [8] - Emerging markets strategies, including Sustainable Emerging Markets and Developing World, experienced positive inflows, indicating growing demand [8][19] Market Data and Key Metrics Changes - Strong performance in equities, with several strategies generating year-to-date returns exceeding 20%, outperforming benchmarks by 425 to 934 basis points net of fees [5][6] - The company noted a resurgence in interest in emerging markets, contrasting with previous trends where allocations were cut [19][20] Company Strategy and Development Direction - The company aims to expand its multi-asset class investment platform by enhancing distribution and aligning compensation to a sales orientation [9][28] - Focus on internal and external talent acquisition to build differentiated investment franchises, particularly in real estate, private credit, and secondaries [9][10][24] - The company is modernizing its vehicle lineup to adapt to evolving client preferences, including models, SMAs, ETFs, and private funds [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the investment performance, with over 70% of AUM outperforming benchmarks over three years [4] - The outlook for performance fees in the fourth quarter is projected to be similar to the previous year, subject to market conditions [14] - Management acknowledged the impact of client rebalancing activities, particularly in the intermediate wealth space, but noted strong long-term performance [39] Other Important Information - The company declared a quarterly dividend of $0.88 per share, a 21% increase over the prior quarter [14] - The balance sheet remains strong with $300 million in cash and $140 million in firm seed investments [13] Q&A Session Summary Question: Demand for non-U.S. strategies - Management noted growing demand in global mandates and direct international equity exposure, particularly in emerging markets [17][19] Question: M&A opportunities and allocation - Management highlighted active engagement in real estate and emphasized that M&A opportunities will not be transformative but will align with the company's core values [21][24] Question: Improving gross flows and distribution efforts - Management discussed efforts to enhance distribution by aligning compensation with sales and expanding the team targeting the UK and Middle East markets [27][29] Question: Client rebalancing activity - Management provided insights into rebalancing trends, particularly in the intermediate wealth space, and noted that these were not terminations but adjustments in exposure [38][39] Question: Outlook on expenses - Management confirmed that fixed expense growth is tracking in the mid-single digits, with no unusual changes expected moving forward [41][42]

Financial Data and Key Metrics Changes - Revenue growth of 7% compared to the previous quarter and 8% year-over-year, driven by strong market conditions and lower fixed expenses, resulting in a margin expansion of 450 basis points [11] - Adjusted operating income increased by 22% compared to the prior quarter and 12% year-over-year [12] - Adjusted net income per adjusted share rose by 23% quarter-over-quarter and 11% year-over-year [12] Business Line Data and Key Metrics Changes - Assets under management (AUM) reached an all-time high of $181.3 billion, with net inflows in 14 of 26 investment strategies year-to-date [7][8] - The credit business saw $1.8 billion in year-to-date net inflows, marking the 13th consecutive quarter of positive credit flows [8] - Emerging markets strategies, including Sustainable Emerging Markets and Developing World, experienced positive inflows, indicating growing demand [8][19] Market Data and Key Metrics Changes - Strong performance in equities, with several strategies generating year-to-date returns exceeding 20%, outperforming benchmarks by 425 to 934 basis points net of fees [5][6] - The firm noted a significant uptick in inquiries for international equity exposure, particularly in the Global Equity Franchise [19] Company Strategy and Development Direction - The company aims to expand its multi-asset class investment platform by enhancing distribution capabilities and aligning compensation to a sales orientation [9][28] - Focus on internal and external talent acquisition to build differentiated investment franchises, particularly in real estate, private credit, and secondaries [9][24] - The company is modernizing its vehicle lineup to adapt to evolving client preferences, including models, SMAs, ETFs, and private funds [31] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of selling more and losing less, emphasizing the need for improved gross flows and reduced redemptions [9][28] - The outlook for expenses remains disciplined, with expectations for mid-single-digit growth in fixed expenses for 2025 [42] - Anticipation of approximately $900 million in mutual fund distributions in the fourth quarter, with performance fees projected to be similar to the previous year [14] Other Important Information - The company declared a quarterly dividend of $0.88 per share, a 21% increase over the prior quarter [14] - The balance sheet remains strong with $300 million in cash and $140 million in firm seed investments [13] Q&A Session Summary Question: Demand for Non-U.S. Strategies - Management noted growing demand in global mandates and direct international equity exposure, particularly in emerging markets, with significant interest from institutional clients [18][19] Question: M&A Opportunities - Management discussed active engagement in real estate and the potential for M&A, emphasizing that any acquisitions would not be transformative but rather align with the company's existing capabilities [21][24][25] Question: Improving Gross Flows - Management outlined efforts to enhance distribution, including doubling the field team and expanding into untapped markets like the U.K. and the Middle East [28][29] Question: Client Rebalancing Activity - Management reported significant rebalancing activity in the intermediate wealth space, impacting certain strategies but noted that these were not terminations [39][40] Question: Expense Outlook - Management confirmed expectations for fixed expense growth to remain in the mid-single digits for 2025, with no unusual changes anticipated [42]

Financial Data and Key Metrics Changes - Revenue growth of 7% compared to the previous quarter and 8% year-over-year, driven by strong market conditions and lower fixed expenses, leading to a margin expansion of 450 basis points [11] - Adjusted operating income increased by 22% compared to the prior quarter and 12% year-over-year [12] - Adjusted net income per adjusted share rose by 23% quarter-over-quarter and 11% year-over-year [12] Business Line Data and Key Metrics Changes - Assets under management (AUM) reached an all-time high of $181.3 billion, with net inflows in 14 of 26 investment strategies year-to-date [6][8] - The credit business saw $1.8 billion in year-to-date net inflows, marking the 13th consecutive quarter of positive credit flows [8] - Emerging markets strategies, including Sustainable Emerging Markets and Developing World, experienced positive inflows, indicating growing demand [8][20] Market Data and Key Metrics Changes - Strong performance in equities, with several strategies generating year-to-date returns exceeding 20%, outperforming benchmarks by 425 to 934 basis points [5] - The firm noted a significant uptick in inquiries for international equity exposure, particularly in the Global Equity Franchise [20] Company Strategy and Development Direction - The company aims to expand its multi-asset class investment platform by enhancing distribution capabilities and exploring new talent acquisition [9][10] - Focus on growing capabilities in private credit, real estate, and secondaries, with a methodical approach to M&A that aligns with the company's core values [25][26][35] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of improving gross flows and reducing redemptions, with ongoing efforts to align compensation with sales orientation [30] - The company anticipates approximately $900 million in mutual fund distributions in the fourth quarter, with performance fees projected to be similar to the previous year [15][39] Other Important Information - The Board of Directors declared a quarterly dividend of $0.88 per share, a 21% increase over the prior quarter [14] - The balance sheet remains strong with $300 million in cash and $140 million in firm seed investments [13] Q&A Session Summary Question: Demand for non-U.S. strategies - Management noted growing interest in global mandates and direct international equity exposure, particularly in emerging markets, with significant performance improvements driving renewed interest [20] Question: M&A allocation and philosophy - The company is actively exploring M&A opportunities, particularly in real estate, while emphasizing that any acquisitions will not be transformative but will align with existing capabilities [26][27] Question: Efforts to improve gross flows - Management discussed initiatives to enhance distribution, including doubling the field team and modernizing the vehicle lineup to better meet client preferences [30][33] Question: Client rebalancing activity - Management observed significant rebalancing activity among sophisticated clients, particularly in the intermediate wealth space, impacting certain equity strategies [40]