Financial Data and Key Metrics Changes - Assets under management grew by 2% in the quarter, reaching $171 billion, an increase of $4 billion sequentially due to market performance [6][9] - Earnings per share as adjusted increased to $6.25 from $5.73 in the first quarter, although it decreased by 4% compared to the prior year period [13][24] - Operating margin improved to 31.3% from 27.6% in the previous quarter [12][23] Business Line Data and Key Metrics Changes - Total sales for the quarter were $5.6 billion, down from $6.2 billion in the first quarter, with net outflows of $3.9 billion primarily in equity strategies [10][17] - Positive net flows in ETFs reached $3.7 billion, with an organic growth rate of 74% over the trailing twelve months [10][19] - Institutional sales decreased to $1.3 billion from $1.5 billion, while retail separate account sales declined to $1.5 billion from $1.7 billion [17][18] Market Data and Key Metrics Changes - Net outflows in institutional products increased to $2.2 billion, driven by quality-oriented large cap strategies [18] - Fixed income strategies returned to positive flows in June after modestly negative flows in April and May [11][12] - The market sentiment in July continued to trend favorably, with stronger flow profiles for fixed income funds [11][48] Company Strategy and Development Direction - The company is focused on expanding its offerings in retail separate accounts, ETFs, and global funds, with multiple product launches anticipated [7][8] - There is an emphasis on pursuing growth opportunities in private markets and differentiated traditional strategies [8][35] - The company aims to leverage its strong liquidity and flexible balance sheet to act on strategically compelling opportunities [8][27] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter began with challenging market conditions but saw steady improvement by June [5] - The company remains optimistic about growth opportunities, particularly in private markets and differentiated strategies [8][35] - Management highlighted that the pipeline of opportunities is at its highest level, indicating a favorable environment for product expansion [8][35] Other Important Information - The company repurchased $30 million worth of shares during the quarter, the highest level in three years, contributing to a 3% reduction in share count [13][26] - The company ended the quarter with significant liquidity and a modest net debt position, providing flexibility for future investments [13][27] Q&A Session Summary Question: Share repurchases and capital allocation - Management indicated a balanced approach to capital management, with a focus on share repurchases due to compelling stock valuation and upcoming capital uses [29][31] Question: M&A outlook and asset types - Management discussed the high level of activity in evaluating opportunities, particularly in private markets and traditional strategies, emphasizing the need for differentiated capabilities [32][35] Question: Compensation structure and expense management - Management clarified that compensation is highly variable and linked to performance, with no anticipated catch-up spending expected [39][41] Question: Flow trends in July - Management noted that July continued the positive trend seen in June, particularly in fixed income and ETFs, while quality-oriented equities faced outflows [45][48] Question: ETF platform success and growth initiatives - Management expressed satisfaction with the growth of the ETF platform, highlighting ongoing product expansion and the importance of access to financial advisors [62][65] Question: Inorganic activity prioritization - Management stated that all types of opportunities are evaluated individually, with a focus on creating long-term shareholder value through strategic partnerships [68][70]

Group 1 - Virtus Investment Partners, Inc. (VRTS) reported preliminary assets under management (AUM) of $163.7 billion for April 2025, reflecting a 2.2% decrease from March 31, 2025, primarily due to net outflows in various fund categories [1] - The company's open-end fund balance decreased by 1.6% to $52.7 billion, while closed-end fund balance slightly declined to $10.2 billion [2] - Institutional accounts balance fell 2.1% to $55.5 billion, and retail separate accounts decreased by 3.4% to $45.3 billion [2] Group 2 - The integrated multi-boutique business model of the company is expected to support its performance in a growing industry, but the decline in AUM raises concerns about future profitability [3] - Elevated operating expenses are anticipated to negatively impact the company's bottom line in the near term [3] - Over the past six months, shares of Virtus Investment have decreased by 26.8%, compared to a 9.4% decline in the industry [4] Group 3 - The company currently holds a Zacks Rank of 4 (Sell) [5] - In comparison, Franklin Resources, Inc. reported a preliminary AUM of $1.53 trillion, showing a marginal decrease due to long-term net outflows [6] - T. Rowe Price Group, Inc. announced a preliminary AUM of $1.56 trillion, reflecting a slight decrease, with equity products totaling $767 billion and fixed income growing by 1% to $198 billion [8]