Q1 2021 Virtus Investment Partners Inc Earnings Call
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Okay.
Good morning, My name is time, Inc, and I will be your conference operator today I would like to welcome everyone to their sales investment partners quarterly conference call. The slide presentation for this call is available in the Investor Relations section of the Virtus website www dot per test.
Dot Com. This call is also being recorded and will be available for replay on the Virtus website. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer period and instructions will follow at that time I will now turn the conference over to your host Sean Rourke.
Thank you Carmen and good morning, everyone on behalf of Virtus investment partners I would like to welcome you to the discussion of operating and financial results for the first quarter of 2021.
Our speakers today are George Aylward, President and CEO of Virtus and Mike Anderson, our Chief Financial Officer.
Following their prepared remarks, we will have a Q&A period.
Before we begin I direct your attention to the important disclosures on page two of the slide presentation that accompanies this webcast.
Certain matters discussed on this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's news release and discussed in our SEC filings.
These risks and uncertainties may cause actual results to differ materially from those discussed on the statements.
In addition to results presented on a GAAP basis, we use certain non-GAAP measures to evaluate our financial results.
Our non-GAAP financial results are not substitutes for GAAP financial results should be read in conjunction salts.
Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's news release and financial supplement which are available on our website.
Now I'd like to turn the call over to George George Thank.
Thank you Sean good morning, everyone I will start today with an overview of the results. We reported this morning as well as a brief update on Westchester capital management, we're turning it over to Mike to provide more detail on the quarter.
So turning to the results. We are pleased with a very strong start to the year continuing the momentum that accelerated throughout last year and reflecting the benefits of our new partnership with Allianz G I Joe.
This quarter, we delivered a significant increase in assets under management to nearly 170 billion.
The fourth consecutive quarter of positive net flows representing an organic growth rate of 10% over the past 12 months, our highest level of quarterly sales, which exceeded 10 billion for the first time.
Strong gross and operating profitability with operating margin up more than 10 percentage points over the prior year.
32% sequential increase in earnings per share as adjusted to their highest level and consistent return of capital to shareholders and debt reduction.
We were especially pleased with a continued trend of broad based sales strength and positive net flows. The foundation of that growth is our ability to provide a holistic set of building blocks made available by effective and differentiated distribution with a demonstrated track record of driving growth.
Our collection of differentiated managers, each with distinctive strategies approaches to investing in compelling investment performance offers a diversity of products and strategies that can appeal to investors from financial advisors across Mike as market cycles, and changing investor preferences. Our results over the past year have demonstrated the value of our model and approach.
Sure.
Our partnership with Allianz G. I L. T. These capabilities, bringing additional scale and complementary strategies and expanded our attractive suite of investment options Exelon.
Excellent financial and operating performance is a reflection of these capabilities, which we believe position us well to be able to continue to deliver strong results and create long term shareholder value.
So turning to a review of the results total assets under management increased $268 9 billion at March 31 up 28% sequentially. Due to the addition of E. G I assets market appreciation and positive net flows sales.
Sales of $10 6 billion increased 19% sequentially due to continued momentum in open end funds in retail separate accounts each of which recorded their highest level of quarterly sales and compared with the prior year sales were up 47 per cent.
For the quarter, we achieved $2 4 billion of positive net flows with contributions across product categories and from all asset classes.
In net inflows were $1 6 billion with sequential increases in fixed income and multi asset strategies.
Retail separate accounts continue to deliver positive net flows reaching another high at $1 8 billion with positive net flows in nearly all strategies.
Institutional flows were modestly positive and have been positive in three of the past four quarters organic growth rate of $6. One per cent over that period. We are pleased with institutional traction on multiple affiliates with both new mandates in existing accounts.
Terms, what we're seeing so far in April for flows we have not seen a meaningful change in the trends of the first quarter on.
And separate account flows remain positive and it's on he just mentioned institutional we currently have a favorable level of mandates won but not funded.
Our financial results for the quarter reflected the significant growth in assets under management and the leverage ability of the business operating.
Operating income as adjusted of $78 million increased by 26% sequentially and 95% over the prior year and the related margin of 41 six per cent increase from 43 in the prior quarter, despite the seasonally higher employment expenses.
Earnings per share adjusted reached their highest level for the third consecutive quarter, increasing 32% sequentially to $6 77, primarily due to higher revenues.
Turning now to capital during the quarter, we repurchased or net settled approximately 78000 common shares for $20 1 million and continue paying down debt on our term loan once again, ending the quarter and a net cash position.
Our balance sheet remains strong and we maintained significant operating flexibility.
Our approach to capital management as being consistent to invest in the gross to the business return on capital shareholders and maintain appropriate levels of debt.
We will continue to be balance on our approach, which has been quarter on philosophy and has positioned us to take advantage of attractive market opportunities to invest in the gross of the business.
Before turning the call over to Mike, Let me give a brief update on our pending transaction with Westchester capital management Premier manager of event driven strategies.
At March 31, with just a capital had $4 6 billion of assets under management up 8% from $4. Three at December 31, due to positive net flows and market growth.
We're excited to add Westchester door family of affiliated managers, which will further diversify our investment strategies and nearly double our AUM in alternatives strategies.
We remain on track to close transaction in the second half of this year pending customary fund shareholder approvals and continue to expect to be in a position to fund the transaction payments with no financing.
We expect the transaction to be immediately accretive to EPS as adjusted by approximately 6% based on normalized run rate first quarter EPS as adjusted so with that let me turn the call from Mike to provide more detail on the results Mike.
Thank you George good morning, everyone.
Starting with our results on slide seven assets under management.
At March 31st assets under management of $168 9 million.
Up 28% from one on June $32 2 billion at December 31.
Sequential increase reflected the addition of $29 5 billion of assets from a Gi on February one.
$4 7 billion of market appreciation and $2 4 billion of positive net flows.
AUM is diversified by product type with open end funds institutional and retail separate accounts.
Representing approximately 43% 25 per cent and 22% of AUM, respectively.
In terms of asset classes equity assets represented 63% of the U N.
Next income represented 21% and.
In multi asset and alternatives represented 13% and 3% respectively.
Within equity domestic assets for 73% on total.
International and global or 21%.
Our specialty equity represented 6%.
Domestic equity is relatively evenly split among large mid and small cap assets.
In addition, we had $3 4 billion of other fee, earning assets at March 31 that resulted from the Agi partnership.
Turning to investment performance, we continue to generate strong relative performance across our strategies.
As of March 31, approximately 72% of rated fund assets had four or five stars.
And 96% were in three or four or five star funds.
We currently have 12 funds with AUM on 1 billion or more that are rated four or five stars representing a diverse set of strategies from six different managers.
In addition to very strong fund performance, 93% of institutional assets and 100% of retail separate account assets were beating their benchmarks on a three year basis as of March 31.
At <unk> 93 per cent of institutional assets on 93 per cent of retail separate account assets.
We're outperforming their benchmarks over five years.
Also 87% of institutional assets were exceeding the median performance.
Their peer groups on.
On the same five year basis.
Okay.
Turning to slide eight asset flows.
To start I would note that beginning with this quarter's results we have enhanced our financial supplement disclosures to show sales and flows on.
On an asset class basis in aggregate for all products.
Net inflows of $2 4 billion in the quarter represented a seven 5% annualized organic growth rate, notably net flows have been consistently positive in each of the past four quarters for a cumulative $9 2 billion of positive flows representing 10, 1% organic growth.
Net flow contributions in the first quarter continued to be broad based across products and asset classes.
By product net flows were positive in retail separate accounts open end funds Etfs and institutional.
And by asset class net flows were positive in equity fixed income multi asset and alternatives.
This marked the ninth consecutive quarter for net inflows in equity.
And the third for fixed income and multi asset.
Total sales for the quarter reached a new high of $10 6 billion.
Up $1 7 billion or 19% sequentially.
By product.
Fund sales of $5 9 billion increased $1 6 billion or 37% sequentially.
Due to growth in all asset classes, including equity fixed income multi asset and alternatives.
Fixed income fund sales grew 55% with particular strength.
And credit sensitive strategies.
Sales of equity funds increased 19% sequentially, primarily due to growth in emerging markets specialty.
Smid cap.
Retail separate accounts sales of $2 7 billion were up 24% sequentially.
Led by continued strong growth in smid cap.
Yeah.
Institutional sales of $1 9 billion compared with $2 3 billion sequentially due to the funding of several large new mandates on the prior quarter.
Sales to existing accounts in the quarter increased by over 30%.
Turning to slide nine investment management fees as adjusted of $163 9 million increased $27 1 million.
Or 20% sequentially.
The increase reflected the 27% growth in average assets.
Largely due to the addition of the Agi assets.
Performance fees in the quarter were $6 million down.
Down from $3 7 million in the fourth quarter.
The average fee rate on AUM for the quarter was $43 one basis points down one eight basis points sequentially.
Excluding performance fees. The average fee rate was 43 basis points on compared with $43 seven basis points in the fourth quarter.
The sequentially lower fee rate reflected the inclusion of the agi assets for two months of the quarter.
Going forward from modeling purposes, given current equity market levels, we expect to be at the high end of our 40 to 42 basis point range.
Of note the first quarter average fee rate was slightly above that range due to the agi assets only being present.
From a partial quarter.
Slide 10 shows the five quarter trend in employment expenses.
Total employment expenses as adjusted of $90 4 million increased 23% sequentially, largely reflecting $9 4 million of seasonal items, which included $4 9 million of incremental payroll taxes.
$2 6 million of increased benefit costs, primarily due to the 401k match at $1 9 million of accelerated compensation expense as a result of annual equity grants made to retirement eligible employees.
Excluding the seasonal items employment expenses of $81 million increased by $7 5 million sequentially due to higher variable incentive compensation.
As a percentage of revenues employment expenses were 48, 3%.
Or 43, 3%, excluding the seasonal items.
The sequentially lower ratio on a seasonally adjusted basis, primarily reflects the significant increase in externally sub advised assets, resulting from the partnership with Agi.
As well as market driven revenue growth.
We continue to believe that a reasonable quarterly range from employment expenses as adjusted would be 44% to 46% of revenues as adjusted.
Which is subject to variability based on markets and sales.
Yeah.
Turning to slide 11, other operating expenses as adjusted were $17 8 million up modestly on a sequential basis.
On $17 1 million largely due to two months of operating expenses associated with our new affiliate and if Jay on the Agi partnership.
The first quarter level of other operating expenses continued to reflect the operating environment is travel and related expenses remain muted.
Given the continued low level of business travel activity, we anticipate second quarter other operating expenses as adjusted.
We'll be at the low end of the $19 million to $21 million range. We previously provided.
For modeling purposes keep in mind that second quarter. Other operating expenses will include an incremental expense.
For the annual equity grants to our board of directors.
Slide 12 illustrates the trend in earnings.
Operating income as adjusted.
$78 million increased $16 1 million or <unk> 26 per sequentially.
Due to the increase in revenues, partially offset by the higher employment expenses.
The operating margin as adjusted of 41, 6% increase I 130 basis points from 43% in the prior quarter.
By 10, one percentage points from 31, 5% in the prior year.
Excluding seasonal employment expenses in the quarter the operating margin was 46, 6%.
The effective tax rate as adjusted for the quarter was 27% unchanged from the prior quarter and we believe that is a reasonable rate going forward all else being equal.
Net income as adjusted of $6 78 per diluted share increased by $1 63.
For 32% sequentially, primarily due to the higher average assets and revenues.
Regarding GAAP results first quarter net income per share of $4 54, compared with $5 40 per share in the fourth quarter.
And included the following items.
$1 68.
<unk> reduction, reflecting the increase in the fair value of the minority interest liability.
29 of realized and unrealized losses on investments.
And 24 sets of acquisition and integration costs.
Slide 13 shows the trend of our capital liquidity and select balance sheet items.
Working capital was $211 million at March 31.
Up 23% sequentially due to cash generated by the business and other capital activities.
Gross debt outstanding at March 31 was $200 million as we repaid $6 million during the quarter.
Over the past year, we have reduced gross debt by $58 million or 22%.
At March 30, <unk> gross debt to EBITDA was <unk> eight times.
Moving from one two times in the prior year as we have both reduced debt and meaningfully expanded operating income.
We ended the quarter on a net cash position with cash exceeding gross debt by $29 million.
And as a reminder, the first quarter typically reflects the low point of cash during the year.
During the first quarter, we net settled 57855 shares for $15 1 million to satisfy employee tax obligations and repurchased an additional 19912 shares of common stock for $5 million.
Our balance sheet continues to provide flexibility to invest in the business and return capital to shareholders, while being well positioned to fund upcoming cash obligations from available resources.
Which over.
Over the next 12 months include a $135 million closing payment and up to an additional $20 million revenue retention contingent payment.
Related to the acquisition of Westchester capital management in the second half of this year.
And our first revenue participation payments to Allianz Gi in the first quarter of 2022.
Regarding Allianz Gi in connection with the Finalization of the strategic partnership we have recorded a $137 $7 million liability.
Representing our estimate.
Of their participation in future revenues generated by the partnership.
Which will be treated as consideration.
And a corresponding establishment of intangible assets.
Payments to Allianz Gi will be made annually with the majority of the payments being made over the next five years.
With that let me turn the call back over to George George Thanks, Mike.
We'll now take some of your questions Carmen can you open up the lines. Please.
Thank you and ladies and gentlemen, Joe asked.
I'll ask a question from please press star one on your telephone to withdraw.
The question press, the pound or high school. Please standby, while we compile the Q&A roster.
First question comes from Jeremy Campbell with Barclays. Your line is now open.
Hey, Thanks, guys.
Before I ask my question I, just wanted to point of clarification here George I think you mentioned when talking about Westchester accretion than it was 6% on top of normalized <unk>. So is the math, we take your $6 78.
Add back the 85 cents of seasonal and then another month of Agi, So maybe something north of $8 as normalize for the first quarter on.
I'm not going to give you a number yet, but we did update based upon our most recent earnings which are the first quarter and doing it on a run rate normalized basis. So, yes, and I think the adjustments that you just outlined are appropriate rate to get to that level perfect. Great and then George I know, it's still really early but the data suggests that youre.
Sales force might be getting some traction already in distributing the Ali on funds just kind of wondering how you'd characterize the early experience so far.
Well I've been very pleased with the overall experience and I know I can speak for pretty much everyone here and our sales force and marketing team.
So I've been incredibly impressed with the the.
Caliber of on boarding from from Allianz Gi I mean, they are a great firm and participate in some of the on boarding in the educational sessions for our sales force, which had been very extensive and I would describe it kind of as best in class. So I think they've done a great job in terms of communicating their value proposition and our.
Folks who are very used to bringing on new managers and new strategies I think are absorbed that so I view that as.
We're off to a good start I think currently for the funds that are currently sub advised by E. G. I believe they were positive flows into the first two months, which I think is you're sort of pointing out is off to a good start to take on a new management on a new set of strategies. So I feel very good about that and going back to the whole strategic partnership I think.
This is sort of underscores the intent from our mutual intent, which was for the future growth of the business, which is why the deal is structured the way. It is is because both a day and we are really optimistic about the future opportunity to grow the business as opposed to just have it as a transaction.
And maybe just in that in that vein George I mean with this is a pretty is a pretty unique deal and now you have a structural blueprint in place since last summer.
Now you have an early case study showing solid sales for the Virtus pipes do you.
You think theres potentially appetite from other large players maybe have a bit more of an institutional skew to pursue a similar type of partnership structure with you guys or also on the industry on the retail side.
Well I would hope right again, it's really.
This is a well structured.
Your expectation is on on the partnering side on the other side to grow the business and participate and continue to be successful in the business through a partnership so the structure doesn't work for someone who is looking to exit a business is the way I would sort of describe it. So I do think the structure has mutual benefits and creates actually really good.
Alignment.
But I can't speak for other parties and what they'll sort of you is what's in their best interest I am certainly willing to entertain this structure with any party that would like to have the conversation.
Got it great. Thanks, so much guys.
Great. Thanks, Sean.
Our next question comes from Mike Carrier with Bank of America. Your question. Please.
Good morning, and thanks for taking the questions.
Firstly with the Agi partners for closed can you provide some context on the plan and probably timing just around offering those strategies throughout the Virtus distribution network.
Yes, no it's already off it's up and running so in advance of the closing so there was a prolonged period to get the fund and the client consent approvals. So during that period as I sort of alluded to earlier, we had done a lot of work as it related to.
Educating all of our people to be prepared upon close to effectively be.
Able to distribute through their financial advisors and again, they're already well known at the National account level and we did actually take this as an opportunity to enhance some of our resources. Some of the resources that previously supported on the on GI as employees as their employees. So it's already often running.
And as I alluded to.
<unk> that are managed by E. G. I for the first two months alone have already been net positive, which we think is a good start.
Okay, Great and then ever Mike just in terms of the $138 million in revenue participation liability.
I just wanted to clarify.
Will that have any impact on the adjusted income statement or is it just a cash flow item going forward.
Yes.
We recorded.
The consideration is contingent this period the accounting for that.
Was.
Based on the unique nature of the transaction.
Amount does represent the full liability on the sum total of the payments that we expect to make based on the assessed value at the end of the first quarter.
We will assess.
Those payments on each quarter.
And update accordingly, and.
We will update on it going forward.
But it will likely not have a P&L impact going forward, but we'll continue to evaluate that if there is any change but.
The view is it's <unk>.
<unk> consideration and will flow through.
Balance sheet items, and any P&L impact wood.
Would be adjusted.
On a non-GAAP basis going forward.
Mike pointed out the cash payments will be annually once a year, so youll sort of see that in terms of liability, which will just based upon.
Estimates of future revenue, but it will also then be adjusted for any future payments, so that liability will change over.
Over time for those reasons.
Alright, it makes sense, thanks a lot.
Okay. Thank you.
Our next question comes from semi Mori with Piper Sandler Your question. Please.
From me on the comp ratio, excluding the $9 4 million of seasonal items on getting that core 43, 3%.
For the quarter, how should we square that with the guidance of 44 to 46 Thats been maintained can you talk about the decision to maintain that on any considerations why the first quarter came in below that range for future quarters, Mike B, one to 300 basis points higher given the majority of those agi funds are kind of splitting that net management fees outside of those add up Joe funds.
Sure. So I'll give a couple of thoughts and Mike filling in.
Would that ratio. So again, there is a lot of things that impact that ratio and I think the one that people generally on the estimate is is the market performance revenue lift component of that right. So you sort of see like a perfect combination of factors in this first quarter, where equity markets are continuing to come up we pulled in a large amount of assets.
That are sub advisor and therefore do not have employment expense and then we did it for two or three months right. So that creates a little bit of complexity in terms of really sort of having to nail that for that quarter. So youre asking more in terms of the guidance in the range, which again as Mike noted is subject to variability and again it could be.
Impacted by a lot of those factors, including both the revenue and.
And then where we are in terms of profit and sales et cetera, Mike, Yes, I think thats right as we look forward, we take into consideration the highest level of profitability that we've had we look at the sales levels. We look at expected investments supporting the growth of the business.
And.
I would expect all else being equal perhaps be at the low end of that range looking ahead, but.
Certainly it's subject to the market's sales profitability.
The key elements.
Got it thanks, guys and then one on capital allocation you guys have been paying down and that kind of $12 million to $18 million range over the last few years and first quarter came in a little bit below the range and then considering repurchases net settlements the new $138 million revenue participation liability.
Increasing dividend potential future acquisitions, how should we think about the change in capital allocation from here on <unk>.
Maybe specifically on the appetite for acquisitions is that changed at all given now you have to balance sheet items with what's what's the kind of high cash flow that you guys are bringing in and current acquisition costs.
Zero net debt, so putting all that together.
As the capital allocation strategy changes that would be how does that impact your appetite for acquisitions kind of going forward.
Yeah, well I don't think I.
I don't think the overall strategy changes I think the fundamental premise of the strategy was to basically make sure that we had flexibility to do all of these things in terms of investing in the growth of the business from returning shareholder.
And then always maintaining reasonable levels of debt. So we actually feel pretty good debt because of where we currently are in terms of our levels of debt that even with some of those upcoming cash obligations that Mike highlighted that the cash flow that we're generating.
Is sufficient to really sort of address those and then still leave opportunity if we ever determined that M&A transaction makes sense.
So we actually feel like we have a lot of flexibility to continue to evaluate all of those opportunities at any given time.
And as it relates to M&A as we've said before our gross strategy is not predicated upon continuous M&A. However, we will do M&A in those opportunities that we think will be incredibly additive or strategic in terms of either product capability or distribution access or sometimes in terms.
A scale, so we kind of feel very comfortable that on a relative basis.
Have that flexibility.
Mike anything you'd add to that.
Just reiterate the upcoming payments debt.
Our obligations that we're considering in the next 12 months with the closing of Westchester in the first quarter.
First.
Revenue participation payments, so we're factoring all of those.
Our capital priorities.
Alright, I'll hop back in the queue. Thanks, guys.
Thanks.
Thank you and again to ask a question. Thank you press Star one on your telephone. Our next question is from Michael Cyprus with Morgan Stanley. Please go ahead.
Hey, good morning, Thanks for taking the question, maybe just coming back on the Agi side I was hoping you could talk maybe a little bit.
How about some of the distribution initiatives, how you plan to sort of expand distribution of the CGI products.
You went through some of the actions you've taken just around educating the sales force, but as you kind of look forward. What are some of the actions that are coming down the pike and what's the opportunity would you say on the institutional side I know you spoke about some on the retail.
Investor AD, but what's the opportunity for expanding distribution of the CGI products on the institutional side, how are you approaching that.
Yes, just on that last piece.
Clarify so for Agi, we are not representing in supporting them on the institutional side. So we really are their U S. Retail partner. So our focus with them is bringing their very compelling strategies to the retail U S. Intermediary space in particular, so it really is focusing on the retail.
So as we sort of look at what is that opportunity set for agi. So again.
The collection of products were very strong and very differentiated they had very good access in many of the places that were available.
So our approach has been to take the Great Foundation that is already present with the products and the relationships that existed there and then using some of the resources that have that knowledge and experience and then expanding it with ours to try to sort of leverage.
Our additional relationships and more expanded sales access to sort of maximize that so I think where I think they did a great job with what they had I think where we might be able to have some opportunities working collectively with them is to really find more and better ways to sort of position their products.
<unk>.
In some of the areas of access that we have greater ASUR access that maybe they historically had the other thing I would point out that for Agi. We look at this as a very important strategic relationship and included in that will be further thoughts around introducing other of their capabilities in the retail market. So this isn't a clue.
Those block of capabilities, we maintain a continuous dialogue with them about other opportunities because they have a lot of compelling capabilities that we might find opportunity for in future retail products.
Great and just maybe a broader question on on the institutional side I think you had referenced.
Pipeline of mandates that have been won but not yet funded maybe you could just elaborate on some of the areas where youre seeing strength on the institutional side are you able to sort of elaborate on the pipeline help quantify maybe how that stands today versus last quarter or a year ago and just more broadly on the institutional marketplace. Maybe you could talk about some of the.
Emerging trends that you're seeing amongst your clients sat and the products that youre seeing in demand on how you approach within the institutional channel is evolving to keep pace.
So for us.
So my comments around the institutional and the pipeline area. So as we've sort of spoken about it over the last few years. This was an area that we had continued to see as a great opportunity for growth and put increased focus and resources on it and over the last three years or four years, you would have heard an evolution of.
Very sporadic opportunities in either a big winner or a big loss. We then start seeing more of a sustained continuing of new mandates.
And that has continued to sort of mature and evolve. So my comment really focus on.
Look at the current pipeline in terms of where we are in the number of affiliates and the types of strategies is generally broader than it has been in the past, but as you know institutional is really lumpy and it can change at any point in time, but my comments were meant to sort of indicate that there were multiple capabilities that the current.
We had very attractive thing so we see that as continued evolution of that business and we still think there's opportunities for us to continue to expand that particularly with non U S clients.
That has been an area of focus for US we do think that many of our managers who are not as broadly known outside the U S. Therefore have a great opportunity once they get no one outside the U S. So we've been very focused in on that.
And we play that the institutional space the way that our strategies allow us to right. So most of our affiliated managers generally will play in very differentiated neither high conviction on quality oriented or income oriented strategies. So it's really for us about trying to find where is that right match between the.
<unk> ability that we have and the part of the market that is interested in that so we still continue to see that there is an opportunity for that but.
<unk> is always going to be lumpy with ins and outs, but it's nice to see a broader set of capabilities across managers and asset classes. I mean, I still think the thing that I'm happiest about in the market and then for US in the first quarter is really sort of seeing more of a fixed income orientation. So that.
Had some weaknesses in the prior year, and then to see that sort of re emerging I think in some of our strategies I think thats really healthy because again our product set is meant to be sort of flexible so that if certain things go out of favor on certain things come in favor that we'll have something that meets that so some of the strength that we're starting to see on that.
The fixed income side was nice to see.
Got it and then just the latter point just around your approach on the institutional channel just anything to speak to there in terms of maybe how your approach to the channel.
Perhaps on the sales side as a volume, but maybe you can remind us how youre sort of approaching the marketplace from a sales standpoint in terms of sale.
Our sales people at the center versus at the individual affiliate franchises. How are you thinking about on approaching that.
Yeah, well, it's generally what I would describe as affiliate centric way because each of the affiliates is very different in terms of where they are on what their opportunity set as we have shared resources that support the.
The affiliates so in some instances we will do.
Certain a large amount of things and in certain instances, we'll be providing support or systems. It really is tailored for each one in terms of what their best is but everyone.
It's a different opportunity set and so we have a combination of resources that will support them.
Great. Thank you.
Thank you.
Thank you.
Okay. On this concludes our question and answer session I would like to turn the conference back to Mr. <unk> for his final remarks.
Alright, well. Thank you very much on want to thank everyone for joining us today, and certainly ask you to call us or reach out if you have any other further questions have a great day.
And thank you. This concludes today's conference call. Thank you for your participation and you may now disconnect.
Your line.
Okay.
Yes.
Okay.
Net.
Yes.
Joe.
Good day.
Yes.
Yeah.
Joe.
Okay.
Yes.
Thank you.
Sure.
Okay.
And moving forward.
[music] income.
Yes.
Okay.
Yes.
Yes.
Okay.
Moving forward.
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Okay.
Okay.
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Okay.
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George.
Sure.
Okay.
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