BrightSphere Investment (BSIG) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2023, the company reported earnings per share (ENI) of $0.28, down from $0.41 in Q2 2022 and unchanged from Q1 2023, primarily due to higher operating expenses driven by foreign currency changes, inflation, and investments in growth initiatives [5][18][32] Business Line Data and Key Metrics Changes - Acadian's investment performance remains strong, with 81% and 90% of strategies by revenue beating their benchmarks over the prior three, five, and ten-year periods, respectively [18] - The company reported modestly positive net flows of $0.1 billion, marking the fourth consecutive quarter of positive net flows [18] Market Data and Key Metrics Changes - The fee rate is currently around 38 basis points, slightly up from 37 basis points a year ago, influenced by the mix of inflows and outflows, with emerging markets having a higher fee rate [32] Company Strategy and Development Direction - The long-term strategy focuses on investing in core capabilities and leveraging a unique Quant platform to expand into new areas, while using free cash flow to support organic growth and stock buybacks [28] - The company is cautiously optimistic about client sentiment, with a strong sales pipeline and continued interest across various strategies [34] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are generally looking to invest, and the pipeline remains healthy, although there were some outflows from managed volatility strategies [34] - The company expects to maintain its current expense levels in the near term, despite some fluctuations due to foreign exchange impacts [33] Other Important Information - The company ended the quarter with a cash balance of $141 million and reduced its revolving facility balance to $38 million from $87 million in the previous quarter [6][19] Q&A Session Summary Question: Update on buybacks and cash usage - Management indicated no buybacks occurred in the last quarter, with cash primarily allocated to support organic growth and potential buybacks when opportunities arise [9][29] Question: Institutional pipeline update - The institutional pipeline remains strong, with interest across various strategies, and no significant exodus from any particular strategies [26][30] Question: Client sentiment and implications for organic growth - Management observed that clients are willing to invest, and the pipeline is good, although there were some outflows from managed volatility strategies [34]