Financial Data and Key Metrics Changes - Earnings per share for Q3 2025 increased to $0.81, up 11.6% from $0.73 in Q2 2025 [4] - Revenue for Q3 2025 rose 4.2% to $141 million compared to the prior quarter, driven by higher average AUM and an additional day in the period [4][5] - Operating margin improved to 36.1% from 33.6% in Q2 2025 [5] - Ending AUM reached $90.9 billion, positively impacted by market appreciation and net inflows [5] - Liquidity at the end of Q3 was $364 million, up from $323 million in the prior quarter [6] Business Line Data and Key Metrics Changes - Open-end funds experienced positive net flows for five consecutive quarters, although institutional net outflows partially offset this [5] - Net inflows into open-end funds were $768 million, while institutional advisory and subadvisory had net outflows of $455 million and $82 million, respectively [19][20] - The unfunded pipeline grew to $1.75 billion, the largest since Q4 2021, with 66% in US REIT strategies [21][22] Market Data and Key Metrics Changes - The third quarter was positive for risk assets, with technology sector performance exceeding the S&P 500 by over 500 basis points [11] - Natural resource equities increased nearly 21% year-to-date, while diversified real assets strategy rose over 13% [13] - 87% of open-end fund AUM rated four or five stars by Morningstar, slightly down from 90% in the prior quarter [9] Company Strategy and Development Direction - The company is focused on expense management while pursuing growth opportunities, expecting G&A to increase by around 9% in 2025 [8] - The strategic allocation to real assets, including infrastructure and natural resources, is emphasized due to their inflation sensitivity [16][17] - The company plans to launch two more ETFs in Q4 2025, expanding its active ETF strategy [24] Management's Comments on Operating Environment and Future Outlook - Management anticipates resilient economic growth and corporate profits, with expectations for earnings growth in sectors like real estate and energy to accelerate in 2026 [12] - The current environment of slightly elevated inflation and lower rates is seen as favorable for real assets [14] - The company remains optimistic about the potential of AI to enhance productivity and drive GDP growth [14] Other Important Information - The company raised $353 million in an equity rights offering for its closed-end fund, providing over $500 million for global infrastructure opportunities [23] - The non-traded REIT continues to perform well, focusing on open-air shopping centers [25] - The company is advocating for the inclusion of real assets in 401(k) plans, highlighting the benefits of listed strategies [27] Q&A Session Summary Question: Demand for US REITs in wealth management channel - Management noted that historically, REIT returns are stimulated by interest rate cuts, but the current cycle has created a different dynamic due to prior real estate pricing advancements [33] - They believe the current point in the cycle is favorable for REIT performance as rates are expected to continue decreasing [34] Question: Profile of clients providing funds - The pipeline is predominantly North American, including retirement plans and annuity providers, with some recent European allocations [37] Question: Expected allocation of cash sitting on the sidelines - Management expects cash to flow into inflation-sensitive real asset strategies, particularly real estate and infrastructure [40] Question: Compensation ratio outlook for 2026 - The company is focused on revenue growth and managing compensation ratios, with expectations for new initiatives to generate revenue and improve ratios [43][45]