Financial Data and Key Metrics Changes - Assets under management (AUM) decreased to $159 billion from $169 billion due to net outflows and market performance [6][14] - Total sales were $5.3 billion, down from $6.3 billion in the previous quarter [6][15] - Net outflows totaled $8.1 billion, significantly higher than $3.9 billion in the prior quarter [7][16] - Earnings per share, as adjusted, declined to $6.50 from $6.69 in the third quarter [9][21] - Operating margin decreased to 32.4% from 33% in the previous quarter [9][20] Business Line Data and Key Metrics Changes - Equity net outflows were primarily driven by quality-oriented strategies, with institutional net outflows of $3 billion [7][16] - Fixed income strategies experienced modestly negative net flows of $0.1 billion, while alternative strategies were essentially break-even [7][16] - ETFs generated $0.6 billion of positive net flows, sustaining strong organic growth [16] Market Data and Key Metrics Changes - The market environment favored momentum-driven stocks, leading to underperformance in quality-oriented equity strategies [3][10] - January sales showed improvement, reaching the highest level since June, indicating a potential shift in investor sentiment [8] Company Strategy and Development Direction - The company is focusing on broadening its product offerings, including the launch of new actively managed ETFs and expansion into private markets [4][5] - The acquisition of Keystone National Group aims to enhance private market offerings and provide differentiated strategies [12][13] - The company is also exploring opportunities for diversification, particularly in non-U.S. markets and growth equity strategies [30][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for quality-oriented equity strategies but expressed confidence in their long-term performance [3][10] - There are encouraging signs of broadening investor sentiment, with hopes for improved flows in the upcoming quarters [8][42] - The company remains committed to balancing capital priorities, including investments in growth and returning capital to shareholders [54] Other Important Information - The company repurchased approximately 60,000 shares for $10 million during the quarter, with a total of $60 million used for share repurchases over the year [11][22] - The effective tax rate was 25.3%, with expectations to decrease to 23%-24% in the second quarter due to the addition of Keystone [21] Q&A Session Summary Question: Can you elaborate on the fee rate compression in the quarter? - The fee rate was impacted by discrete expenses, particularly on the ETF side, but remained relatively stable quarter-over-quarter [25][26] Question: What are the future transaction opportunities for diversification? - The company is considering both private markets and growth equity strategies for future transactions, focusing on broadening distribution channels [29][30] Question: What is the software exposure across AUM? - The company is generally underweight in technology, which has affected the performance of quality-oriented equities [39][40] Question: What drove the acceleration in negative flows in Q4? - The negative flows were primarily due to the underperformance of quality-oriented strategies and seasonal tax loss harvesting [41][42] Question: Can you discuss the growth opportunities from the Keystone transaction? - There is significant potential to leverage Keystone's existing capabilities in wealth management and institutional channels for growth [48][49]

Financial Data and Key Metrics Changes - Assets under management (AUM) decreased to $159 billion from $169 billion due to net outflows and market performance [5][6] - Total sales were $5.3 billion, down from $6.3 billion in the previous quarter [5][15] - Net outflows totaled $8.1 billion, significantly higher than $3.9 billion in the prior quarter [6][16] - Earnings per share (EPS) declined to $6.50 from $6.69 in the previous quarter [9][20] - Operating margin decreased to 32.4% from 33% in the prior quarter [9][18] Business Line Data and Key Metrics Changes - Quality-oriented equity strategies, which represent half of AUM, faced increased net outflows due to market preference for momentum-driven stocks [3][6] - Fixed income strategies experienced modestly negative net flows of $0.1 billion, while certain fixed income strategies saw positive net flows [6][9] - ETFs generated $0.6 billion of positive net flows, continuing strong momentum with a 72% year-over-year increase in AUM [14][15] Market Data and Key Metrics Changes - The U.S. retail funds faced headwinds, but January sales were the highest since June, indicating a potential recovery in investor sentiment [8] - Institutional net outflows were primarily driven by redemptions in quality domestic and global large cap growth strategies [16] Company Strategy and Development Direction - The company is focusing on broadening its product offerings, including the introduction of new actively managed ETFs and expansion into private markets [4][5] - The acquisition of Keystone National Group aims to enhance private market offerings and provide differentiated strategies [12][13] - The company is also exploring opportunities for growth in non-U.S. markets and other distribution channels [29][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment for quality-oriented equity strategies but expressed confidence in their long-term performance [3][10] - There are encouraging signs of broadening investor sentiment, with hopes for a recovery in quality-oriented strategies [8][41] - The company remains committed to maintaining financial flexibility while balancing capital priorities [10][11] Other Important Information - The company repurchased approximately 60,000 shares for $10 million in the quarter, totaling $60 million for the year [11][22] - The effective tax rate was 25.3%, expected to decrease to 23%-24% with the addition of Keystone [20][21] Q&A Session Summary Question: What was the driver of the fee rate compression in the quarter? - The fee rate was impacted by discrete expenses, particularly on the ETF side, but remained relatively stable [25][26] Question: Do you see future transactions as an avenue for additional diversification? - The company is focused on diversifying offerings and distribution channels, including potential M&A opportunities [28][29] Question: What is the software exposure across AUM? - The company is generally underweight in technology, which has affected the performance of some quality-oriented equities [36][37] Question: What drove the acceleration in negative flows quarter to quarter? - The underperformance of quality-oriented strategies and seasonal tax loss harvesting contributed to increased outflows [40][41] Question: Can you discuss the go-to-market opportunity with Keystone? - There is significant potential to leverage Keystone's existing capabilities in the wealth management channel and expand into institutional markets [47][49] Question: How might capital deployment priorities shift with recent transactions? - The company will maintain a balanced approach to capital allocation, emphasizing repurchases and dividends while considering strategic M&A opportunities [52][53]

Group 1 - The promotional offer is valid from December 15, 2025, to January 2, 2026, requiring customers to fund their Active Invest account with a minimum of $50 within 45 days to qualify for a minimum reward of $15 [1] - The probability of a member receiving $3,000 is 0.026%, and if no selection is made within 45 days, the member will no longer qualify for the promotion [1] - For a different promotional offer, the probability of receiving $1,000 is also 0.026%, with a similar requirement of funding the account with at least $50 [3] Group 2 - Investing in alternative investments and strategies may not be suitable for all investors and involves unique risks, including the risk of loss [4] - Fractional shares have limitations, including potential delays in order execution and the inability to transfer fractional shares to another firm [5] - Options trading involves substantial risks, including the possibility of losing the entire investment, and investors should review the risks associated with options and IPOs before participating [6]

Core Insights - The government shutdown may significantly impact new fund launches and pending mutual fund/ETF dual share applications, potentially affecting financial advisors' revenue due to postponed investment decisions [1][4] Group 1: Impact on Fund Launches - The SEC Division of Investment Management will operate with reduced staff during the shutdown, leading to delays in approvals for new filings and a backlog for ETFs, particularly those with alternative strategies [2][3] - While fund launches will not be completely halted, a prolonged shutdown will slow down the pipeline, especially for proposals with novel strategies and those from less established asset managers [4] Group 2: Exemptive Relief Delays - The shutdown is likely to delay the granting of exemptive relief for asset managers seeking mutual fund/ETF dual shares, which require more complex resolutions than regular fund launches [5] - Asset managers involved in these applications will face stand-stills, unable to respond to comments or secure final effectiveness until full SEC staff review resumes [5] Group 3: Pre-existing Challenges - Prior to the shutdown, the SEC was already experiencing staff reductions due to earlier budget cuts, which had begun to affect the review timelines for new interval funds [6]

Core Insights - Envestnet has launched professionally managed model portfolios featuring interval funds on its WealthTech platform to meet the increasing demand for alternative investments among high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients [1][2] - The new offerings aim to provide seamless access to institutional-grade solutions for advisors, integrating semi-liquid and liquid strategies for easier allocation to alternatives [2][3] Product Offerings - The Franklin Templeton Multi-Manager HNW Portfolios include five risk-based options with a strategic 10% allocation to alternatives, designed to enhance income potential and simplify access to private markets [3] - BlackRock's Multi-Asset Income with Private Markets Models are structured as Fund Strategist Portfolios with a minimum investment of $25,000, blending public and private credit along with dividend-focused equities across three risk-based allocations [4] Operational Considerations - Envestnet has established operational protocols for advisors regarding Limited Trade Window (LTW) funds, emphasizing the importance of observing redemption windows and managing liquidation responsibilities [5][6] - The company highlights the necessity for wealth management firms to sign agreements with Envestnet to enable LTW fund capabilities, reflecting the growing trend of advisors allocating to alternative investments [5] Market Context - The shift towards alternative investments is driven by the shrinking public markets and the need for diversified portfolios, as noted by Envestnet's Co-CIO Dana D'Auria [2] - With over half of alternatives held by HNW and affluent investors, the demand for expanded capabilities and access on Envestnet's platform is critical for advisors [5]

Core Themes - The convergence of public and private markets is highlighted by an increase in mergers and partnerships among traditional and alternative asset managers, with new products entering the market [1] - Evergreen funds are emerging as the preferred vehicle for delivering private market investments to wealth management channels, with over 400 registered funds available, half of which were launched in the last 24 months [2] - The global AUM of semiliquid funds is projected to grow 12-fold to $4.1 trillion over the next five years, indicating a significant shift in the asset management landscape [2] Industry Trends - Attendance at the CAIS Summit has increased significantly, from a few hundred to over 1,200 attendees, including 325 wealth management firms and 800 advisors [4] - Major alternative asset managers such as Apollo, Blackrock, and KKR are increasingly targeting the wealth management space, reflecting a broader trend of institutional firms entering private wealth [3] - CAIS has launched a models marketplace to assist financial advisors in portfolio construction, marking a strategic shift towards outcome-based investment models [5][6] Private Credit Insights - Private credit managers emphasize the stability of the asset class, with low loss rates and a focus on due diligence and underwriting quality [7][9] - The average loss rate for private credit at Churchill Asset Management is reported to be five basis points per year, showcasing the sector's resilience [9] - There is a consensus among industry leaders that individual investors are seeking excellent risk-adjusted returns rather than chasing higher yields [10] Regulatory and Economic Outlook - Panelists at the conference welcomed a lighter regulatory touch from government agencies, which is expected to expand access to private markets for more investors [13] - Despite market volatility, speakers maintained a bullish outlook on the economy, focusing on business needs and consumer demands as key indicators [12] - CAIS announced expanded integrations with TAMPs and a partnership with LODAS Markets to enhance secondary trading options for private investment vehicles [13][14]

Core Insights - The non-listed closed-end fund (CEF) market is experiencing accelerated growth, with a significant increase in fund launches and a shift towards greater investor accessibility [1][2][3] Market Growth and Trends - The non-listed CEF market reached a new peak with 288 interval and tender offer funds, totaling $196 billion in net assets and $227 billion in total managed assets as of June 30, 2025 [4] - In Q2 2025, 23 new funds were launched, marking an increase of 13 funds compared to Q2 2024, with market-wide net assets increasing by $15 billion from the previous quarter [5] - The market share of the top 20 funds decreased to 59% in Q2 2025 from 60% in Q1 2025, indicating a diversification in the market [7] Fund Structure and Accessibility - The report highlights the removal of accredited investor suitability restrictions, with 53% of interval and tender offer funds having no suitability restrictions for investors [3][16] - The emergence of Specialty Structures funds, which are evergreen and semi-liquid private funds designed for accredited investors, is noted, with 13 such funds currently in the market [8][9] Net Flows and Performance - In Q1 2025, funds had positive net flows totaling over $13 billion, with 67% of funds reporting positive net flows, primarily into daily NAV funds without suitability restrictions [11][12] - The top 20 largest interval/tender offer funds accounted for 50% of total net flows, including market leaders like the Cliffwater Corporate Lending Fund and Partners Group Private Equity [13] Regulatory Environment - There has been a 70% increase in SEC registrations for new funds in 2025 compared to the same period in 2024, with 46 new SEC filings so far this year [14] - Newly launched non-listed CEFs typically spend around six months in the SEC registration process, with Tax-Free Bond funds being the quickest to launch [15] Future Outlook - The market is expected to continue growing, with more funds likely to reduce their suitability requirements, enhancing accessibility for investors [17]

Financial Data and Key Metrics Changes - Fundraising in Q1 2025 reached a record $3.2 billion, contributing to a target of $6 billion for the year [6][24] - Fee-related earnings (FRE) were $42.6 million or $0.27 per share, reflecting a 2116% year-over-year growth [6][8] - Assets under management (AUM) grew to $46 billion, a 43% increase year-over-year and over 9% sequentially [10][26] - Distributable earnings were $37 million or $0.23 per share, up 12% year-over-year [8][32] Business Line Data and Key Metrics Changes - Fee-earning AUM increased to $35 billion, a 46% year-over-year growth and 6% sequentially [10][28] - Organic net inflows into fee-earning AUM were over $700 million, representing an annualized organic growth rate of over 8.6% [7][26] - Management fee revenue for Q1 was $77.3 million, up 28% year-over-year, but down 17% sequentially due to seasonal factors [28][29] Market Data and Key Metrics Changes - Approximately 20% of fee-earning AUM were in permanent capital vehicles, which is a key long-term objective [13][22] - Strong demand from Asian sovereign wealth fund investors led to $1 billion in commitments during the quarter [14][15] - Local investors accounted for approximately 17% of fundraising in Q1 2025, indicating a growing interest in alternative investments [22] Company Strategy and Development Direction - The company aims to diversify its investment strategies and product offerings, enhancing resilience against global uncertainties [23][24] - The focus is on organic growth through customized investment accounts and special managed accounts, moving away from a product-centric model [6][12] - The company is positioned to benefit from geopolitical shifts, with a low exposure to U.S. tariffs and a focus on local consumption markets in Latin America [17][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $6 billion fundraising target despite global uncertainties [24][31] - The company believes Latin America is becoming a more attractive destination for capital, benefiting from low geopolitical risks and strong local consumption [18][39] - Management anticipates that the ongoing trade conflicts may lead to increased foreign direct investment (FDI) in the region [42] Other Important Information - The company has a net debt of approximately $143 million, with a net debt to FRE ratio well below one time [32] - The effective tax rate for the quarter was 9.2%, with expectations to trend towards 10% by 2027 [32] - A quarterly dividend of $0.15 per share was approved for 2025, with intentions to repurchase shares throughout the year [33] Q&A Session Summary Question: How are portfolios positioned regarding higher tariffs in the U.S.? - Management indicated that most investments are Latin America-oriented, with minimal exposure to Mexico, and sectors are resilient and locally driven [37][39] Question: Could Chinese institutions divert allocations from U.S. to LatAm? - Management confirmed that there is increased interest from Asian investors, with significant commitments already made [43][45] Question: Is there potential upside to the $6 billion fundraising target? - Management maintained the $6 billion target but acknowledged the strong start with $3.2 billion raised in Q1 [52][54] Question: Update on integration of M&A completed last year? - Management reported that 2025 is focused on integration, with no major issues encountered and synergies expected to improve margins [70][74] Question: Overview of the $3.5 billion pending fee AUM? - Management stated that most pending AUM will be allocated to infrastructure and GPMS verticals, with an average management fee of 96 basis points expected [78][80]

Financial Data and Key Metrics Changes - Fundraising in Q1 2025 totaled a record $3.2 billion, contributing to a target of $6 billion for the year [6][13] - Fee related earnings (FRE) were $42.6 million or $0.27 per share, representing a 2116% year-over-year growth [6][9] - Assets under management (AUM) grew to $46 billion, a 43% increase year-over-year and over 9% sequentially [11][26] - Distributable earnings were $37 million or $0.23 per share, up 12% year-over-year [9][33] Business Line Data and Key Metrics Changes - Fee earning AUM reached $35 billion, up 46% year-over-year and 6% sequentially [11][26] - Organic net inflows into fee earning AUM were over $700 million, reflecting an annualized growth rate of 8.6% [7][28] - Management fee revenue for Q1 was $77.3 million, up 28% year-over-year, driven by acquisitions [28] Market Data and Key Metrics Changes - Approximately 20% of fee earning AUM were in permanent capital vehicles, a key long-term objective [14][22] - Strong demand from Asian sovereign wealth funds resulted in $1 billion of commitments in customized investment accounts [14][20] - Local investors accounted for about 17% of fundraising in Q1 2025, indicating growing interest in alternative strategies [22] Company Strategy and Development Direction - The company aims to diversify and grow both organically and inorganically, enhancing resilience amid global uncertainty [23][24] - Focus on local consumption markets and resilient sectors such as healthcare and agribusiness [19][40] - The strategy includes increasing the proportion of assets that earn fees based on net asset value, which supports long-term compounding [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to weather economic uncertainty and potential global recession, highlighting Latin America's attractiveness for investment [17][18] - The company anticipates that geopolitical tensions may lead to increased foreign direct investment in Latin America [18][20] - Management remains cautious about extrapolating Q1 fundraising success across the entire year due to the unpredictable nature of large customized accounts [16][53] Other Important Information - The company expects FRE margins to fall within the range of 58% to 60% for the full year [32][72] - The effective tax rate for Q1 was 9.2%, with expectations to trend towards 10% by 2027 [33] - A quarterly dividend of $0.15 per share was approved for 2025 [34] Q&A Session Summary Question: How are portfolios positioned from higher tariffs in the U.S.? - Management indicated that most investments are Latin America-oriented, with minimal exposure to Mexico, and sectors are resilient and locally driven [40][42] Question: Could Chinese institutions divert allocations from U.S. to LatAm? - Management confirmed that conversations with Chinese investors have intensified, reflecting a shift away from U.S. exposure [45][48] Question: Is there potential upside to the $6 billion fundraising target? - Management maintained the $6 billion target but acknowledged the strong start with $3.2 billion raised in Q1 [52][53] Question: Update on integration of M&A completed last year? - Management reported that 2025 is focused on integration, with no major issues encountered and synergies expected to improve margins [67][72] Question: Overview of the $3.5 billion pending fee AUM? - Management indicated that most of the pending fee AUM will be allocated to infrastructure and GPMS, with deployment expected over the next four to six quarters [78][80]