Westwood(US:WHG)2021-10-27 23:05Financial Data and Key Metrics Changes - Total revenues for Q3 2021 were $17.9 million, an increase from $17.5 million in Q2 2021 and $15.5 million in Q3 2020 [37] - Net income for Q3 2021 was $1.9 million or $0.24 per share, compared to $1 million or $0.12 per share in Q2 2021 and a net loss of $10.3 million or $1.31 per share in Q3 2020 [38][39] - Economic earnings were $3.7 million or $0.47 per share in Q3 2021, up from $2.8 million or $0.35 per share in Q2 2021 and a loss of $1.7 million or $0.22 per share in Q3 2020 [39][40] Business Line Data and Key Metrics Changes - Firm-wide assets under management (AUM) totaled $13.8 billion, with institutional assets at $6.7 billion (49%), wealth management assets at $4.2 billion (31%), and mutual fund assets at $2.9 billion (20%) [40] - The large cap strategy outperformed the Russell 1000 Value Index, while the SMidCap strategy outperformed its index by over 180 basis points [11][12] - The SmallCap strategy lagged behind the Russell 2000 Value Index, experiencing negative net flows as clients reduced allocations [13] Market Data and Key Metrics Changes - The market experienced mixed performance, with declines in U.S. value indices and a positive return for the S&P 500 despite a decline in September [9][10] - The firm experienced market depreciation of $184 million and net outflows of $423 million during the quarter [41] Company Strategy and Development Direction - The company is focused on enhancing shareholder returns through increased dividends and stock buybacks, with a regular cash dividend of $0.15 per share announced [8][42] - The firm is planning a targeted reintroduction of Multi-Asset solutions on the institutional side and expects to gain traction in the intermediary space [22] - The company aims to leverage its strong client relationships and focus on new business sales in strategies with approved consultant and platform relationships [25] Management's Comments on Operating Environment and Future Outlook - Management noted that while asset flows have slowed from previous quarters, there is still a healthy pipeline of opportunities, particularly in SMidCap strategies [35][52] - The firm is optimistic about the fourth quarter and the year ahead, with expectations for improved performance and continued growth in wealth management [30][36] Other Important Information - The company has successfully outsourced equity trading to Northern Trust, resulting in approximately $1 million in annual savings [31][32] - A mutual fund reorganization is expected to yield cost reductions of approximately $1 million per year for both the company and mutual fund shareholders [34] Q&A Session Summary Question: Did the company buy back some stock in the quarter? - Yes, approximately 25,000 shares were bought back [48] Question: Can you provide an update on the systematic growth strategy and its AUM? - The company has developed a proprietary database to minimize human bias, with $10 million in the wealth channel and exceptional performance ahead of the Russell growth index [49] Question: What is the current status of the pipeline? - The pipeline includes over $1 billion in opportunities, with more than half considered late-stage, particularly in SMidCap strategies [52]