Q2 2023 Victory Capital Holdings Inc Earnings Call
[music].
Good morning, and welcome to the victory capital second quarter 2023 earnings Conference call. All callers are in a listen only mode. Following the company's prepared remarks, there will be a question and answer session.
I'll now turn the call over to Mr. Matthew Dennis Chief of staff and director of Investor Relations. Please go ahead Mr. Dennis.
Thank you before I turn the call over to David Brown, I would like to remind you that during today's conference call. We may make a number of forward looking statements. Please note that victory capital's actual results may differ materially from these statements. Please refer to our SEC filings for a list of some of the risk factors that may cause actual results.
To differ materially from those expressed on today's call.
Victory capital assumes no duty and does not undertake any obligation to update any forward looking statements.
Our press release that was issued after the market closed yesterday disclose both GAAP and non-GAAP financial results. We believe the non-GAAP measures enhance the understanding of our business and our performance reconciliations between these non-GAAP measures and the most comparable GAAP measures are included in tables that can be found in our earnings press.
This release and in the slide presentation accompanying this call both of which are available on the Investor relations portion of our website at IR Dot <unk> Dot com.
It is now my pleasure to turn the call over to David Brown, Chairman and CEO David.
Thanks, Matt Good morning, and welcome to victory Capital's second quarter 2023 earnings Conference call.
I'm joined today by Michael Pellekar Po, our President Chief financial and administrative officer, as well as Matt Dennis our chief of staff and director of Investor Relations.
I'll start today by providing an overview of the second quarter.
After that I will turn the call over to Mike to review the financial results in detail.
Following our prepared remarks, Mike, Matt and I will be available to take your questions.
The quarterly business overview begins on slide five.
We generated another quarter of strong revenue earnings and margins to close out the first half of the year.
Long term net flows improved for the second consecutive quarter without flows of $1 billion.
Compared with the $1 $2 billion of outflows recorded in the first quarter.
This excludes the three basis points passive mandate redemption in April which was previously disclosed in our April AUM release.
Average AUM was essentially flat quarter over quarter, and our average fee realization rose to 52, one basis points, which contributed to higher revenue compare with the first quarter of the year.
Our margins remained exceptional coming in at 59% this quarter, which highlights the differentiated nature of our operating platform and its highly variable expense structure.
This is a trough quarter in a row that we achieved margins above our long term guidance of 49% and this is the eighth quarter over that period, where our margin surpassed 50%.
Our long term margin guidance remains unchanged at 49% and keep in mind. This does factor in ongoing strategic investments that will help us grow our business in the future.
Adjusted net income with tax benefit rose to $1.11 per diluted share in the quarter.
From $1 eight in the previous quarter.
Substantial capital returns to shareholders continued through the first half of 2023.
We repurchased a record $1 5 million of our shares this quarter versus $1 4 million in the first quarter.
We allocated $47 million to share repurchases and paid out $21 million in cash dividends for a total capital return of $68 million for the quarter.
On a year to date basis.
We've repurchased two 9 million shares for $92 million and paid cash dividends of $43 million for a total return of capital in the first half of $135 billion.
We continue to invest in our business a number of different areas, we launched our new brokerage platform in April and rebranded the direct channel at the same time. Additionally.
Additionally, we continue to allocate resources, the data and technology and are embarking on a few new marketing and distribution initiatives as well.
Turning to slide seven investment performance remains excellent and consistent.
At quarter end 42 of our mutual funds and Etfs had four or five star overall ratings from Morningstar.
These four and five star products account for nearly two thirds of our AUM in mutual funds and Etfs. Additionally.
Additionally, approximately three quarters of our total AUM outperformed benchmarks for the three five and 10 year measurement periods ended June 30th.
A number of our products rose into the top quartile. According to Morningstar is trailing three year rankings.
These included the victory income investors tax exempt intermediate term bond fund.
Victory RF global fun.
Victory RF Partners fund.
The victory RFS investors fund as well as the victory Monday, or mid cap fund and our emerging markets value momentum ETF.
In total approximately 43% of our mutual funds and ETF AUM is ranked in the top quartile as of June 30th.
Focusing specifically on the 16 fixed income products managed by our victory income investors franchise that are rated by Morningstar.
14 of those 16 products, representing 95% of that AUM ended the quarter with four or five star overall ratings give.
Given this investment performance the trillions of dollars presently invested in money market funds and the distribution. We have built out for this franchise over the last few years. We believe we are nicely positioned to capture inflows into these products as the fed tightening cycle subsides investors begin to migrate their holdings into longer duration fixed income.
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Turning to slide eight.
We continued to generate robust excess free cash flow in the second quarter.
Once again, we remain opportunistic with our share repurchase activity this quarter, given where our shares are trading during the period.
While we intend to remain flexible with our capital allocation is important to state that we are not deviating from our proven approach of making our company better through acquisitions.
Over the long run we believe that the best use of our excess free cash flow is to invest in both organic growth initiatives and strategic acquisitions to create shareholder value.
On the organic side. In addition to what I mentioned a few slides back. We're also investing in new product development. One. Recent example is our victory shares free cash flow Etfs kicker V. F. L O that we launched in June .
On the inorganic side, we are spending quite a bit of time conducting diligence on multiple inorganic opportunities.
So timing and getting to a transaction closed cannot be guaranteed we are generally optimistic with what we're seeing and how things are going.
That being said, we remain patient disciplined and selective as we evaluate opportunities aimed at enhancing shareholder value over the long term.
Before I turn the call over to Mike I want to take a moment to highlight a significant company milestone on Monday, we celebrate our 10th anniversary of being an independent company.
In 2013, when we executed on a management buyout.
Please contribute about a third of the required equity and the balance of the equity was funded by Crestview partners are.
Our other private equity Investor reference capital partners began their investment in the fourth quarter of 2014.
Crestwood and reference have been long term investors and neither firm sold any shares leaving up to or during our initial public offering in February of 2018.
For calendar year 2018, we ended the year with $53 billion of AUN generated revenue of $413 million and adjusted EBITDA of $160 million with an adjusted EBITDA margin of 38, 7% and adjusted net income with tax benefit per diluted share of one.
Dollars 64.
Since then we have more than tripled our AUR and increased our run rate revenue and earnings by more than two fold.
But of most importance as we made our company better and more durable by significantly diversifying our business across investment products asset classes, broadening distribution and adding size and scale with substantially increased efficiency and has allowed us to expand our margins by well over 1000 basis points during.
At the time of being a public company.
It wasn't until November of 2021 that are private equity holders executed on their first sale of V. Ctr shares in a secondary offering.
Since then they've either sold or distributed more than 23 million shares taken their combined ownership stake down from approximately 67% at the time of the IPO to approximately 32% today.
The relationship with our private equity holders, there's been a textbook case of a genuine win win over the past decade.
We are very proud of our track record on executing on our differentiated strategy and the ability to produce an attractive return for the shareholders, who understood our strategy and believed in our vision from the very beginning.
While they remain shareholders today.
Given the nature of their business model, we anticipate monetization of their investments will continue moving forward.
Although we anticipated the decision to monetize and the exact timing of that monetization alright at the sole discretion of their respective organizations.
With that I will turn the call over to Mike to go through the quarters financial results in greater detail.
Mike.
Thanks, Dave and good morning, everyone. The financial results review begins on slide 11.
Assets under management increased nearly 2% from $158 6 billion at the end of March to $161 $6 billion by the end of June .
While the point to point variance was higher our average AUM was slightly lower than in the first quarter due to intra quarter market volatility.
The higher ending point of AUM in June gives us a nice jump off point to start the third quarter from a revenue perspective.
Revenue of $204 $2 million was up in the second quarter compared with the $201 $3 million of revenue in the first quarter.
The higher revenue on the lower average AUM was a result of a higher quarter over quarter fee rate realization and one additional day in the period.
GAAP operating.
<unk> income was $87 $5 million in the quarter and our adjusted EBITDA was $104 million both up from the previous quarter.
Second quarter net income was $56 $7 million or <unk> 83 per diluted share on a GAAP basis.
Resulting in GAAP EPS, increasing by 17% from the prior quarter.
And adjusted net income with tax benefit rose quarter over quarter to $75 9 million or <unk>.
$1 11 per diluted share.
The quarterly cash dividend of <unk> 32 per share will be payable on September 25th.
To shareholders of record on September 11th.
On Slide 12, you can see a steady increase in total AUM over the trailing 12 month period, reaching $161 6 billion at the end of the second quarter.
Our AUM remains well diversified from a distribution channel and client perspective.
We are also well diversified from a vehicle perspective, but etfs and separately managed accounts, including model delivery, representing more than a third of our total AUM.
Turning to slide 13 long term gross flows were $5 6 billion in the quarter.
Industry wide softness in gross sales has persisted with investors remaining hesitant to enter the market given heightened volatility and uncertainty.
And holding cash has become an attractive risk adjusted option for many investors.
Five franchises, including integrity.
Energy capital.
<unk> global Sycamore and west and each had positive net flows for the second quarter.
Fact.
<unk> has been net flow positive since the acquisition closed at the end of 2021.
For the full calendar year 2022 and to date in 2023.
This is a result of not only their excellent investment performance, but also enhanced distribution reach and winning new platform placements since the acquisition.
Moreover, strong industry tailwind such as an increasing adoption of model portfolios by financial advisors and the shift to fee based revenue models in the industry have reinforced our original thesis regarding the attractive growth profile of west end.
We also achieved positive net flows in our active ETF products during the quarter.
Which we believe is a very attractive vehicle wrapper with excellent growth prospects going forward.
Slide 14 illustrates our revenue by quarter.
Our fee rate increased four tenths of a basis point in the second quarter, which is the highest fee rate realization. We have recorded in the past four quarters.
In general fees have remained steady and asset class client and vehicle mix are the primary drivers of quarterly fee rate variations.
On slide 15, we break out our expenses for the quarter.
Total expenses declined by $9 9 million or 7% to $129 $6 million from the first quarter driven by lower operating expenses.
GAAP operating expenses were down $10 1 million or 8% in the quarter.
This reflected lower compensation expense and lower noncash expenses, including depreciation and amortization.
As well as expenses associated with the change in value of consideration payable for acquisitions.
Cash compensation expense was in line with expectations and as you can see from the graphic on this slide as a percentage of revenue cash compensation remains in a very narrow range.
Moving on to our non-GAAP results on slide 16.
Adjusted net income rose to $66 4 million in the second quarter.
The tax benefit in the quarter held steady at $9 $5 million, resulting in eni with tax benefit increasing to $75 $9 million or $1 11 per diluted share.
Our adjusted EBIT margin expanded to 59% in the quarter.
We are maintaining our long term margin guidance of 49%, which is inclusive of continued investments in numerous areas to support our future growth.
Finally, turning to slide 17, while we did not pay down any debt in the first half of this year, our net leverage ratio improved to two three times at the end of June due to our growth in earnings during the quarter and slightly higher cash position.
The average interest rate paid on our debt increased just 19 basis points to 543% in the quarter.
This was the smallest quarter over quarter interest rate increase in the past five quarters and takes into account the $450 million hedged portion of our debt, which is fixed at 315%.
Our 100 million dollar revolver remains undrawn and GAAP operating cash flow from operations was 77 $4 million in the second quarter.
That concludes our prepared remarks, I will now turn it back over to the operator for questions.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
And your first question comes from the line of Ken <unk> from BMO capital markets. Your line is open.
Thank you and good morning to circle back on the launch of brokerage capabilities in your direct channel.
How do you think about the opportunity to cross sell your strategy.
And what improvements are you expecting as it relates to the number of products per customer.
Good morning.
The launch of our brokerage platform I'd start off by saying we're in the early stages, we launched it at the end of April of this year.
<unk>.
We're making really really good progress on it.
There will be a great opportunity to be able to cross sell to take your term the cross sell our <unk>.
Vestment strategies.
To our current clients to new clients, but I think the real opportunity is to get closer to.
Our clients there so to offer them more product choice to be able to work with them with their financial futures future and to really be able to see.
What we can do to be a bigger part of their financial life through more product choice. So part of that is going to be more of our own products, but another part of that is going to be other firms' products sitting on our brokerage platform and thats. The real goal is to really help our clients and to get closer to.
Our clients and then ultimately to get new clients.
Okay understood switching.
Switching gears, a little bit on new energy capital.
Could you please remind us of the potential for scale.
And that business as well.
How investor interest is holding up.
This macro backdrop and lastly, the timeline for future fundraising.
So new energy was our first entrance into really private markets.
And the business.
Is smaller relative to our overall business think of it as a $1 billion or sub $1 billion platform.
The opportunity there is to go.
Go out and to launch new funds.
Were net flow positive for this quarter with them.
And it's really just the beginning of new energy and Thats also the beginning for us in the private market part of the industry.
Thank you very much.
And your next question comes from the line of Craig Siegenthaler from Bank of America. Your line is open.
Okay.
Hey, good morning, Dave Michael I Hope, you're both doing well.
Good morning.
So fixed income continues to be a net flow headwind for victory despite pretty good investment performance, but I wanted your perspective over into the second half ended 2024.
Are you expecting a large pickup in industry fixed income flows and are really after the fed pauses and how do you think your bond business is positioned for this migration.
So we are as we said in the script, we think the second half of this year.
And then going into next year, we do think that.
Investors are going to pivot really from money market are very very short term fixes.
Fixed income investments to more longer duration and.
From our perspective, and we articulated this in the script, we have a number of products that have really good performance long track records.
Our high ratings from Morningstar perspective, and we've expanded it out the distribution over the year. So we think we're really well positioned some of the softness if you go back to the first half of the year for US has really been in some of the non core fixed income products that we have.
Some floating rate high yield and other non core fixed income products that really we've seen those investors go into a money market type of investment so when when those investors feel comfortable.
As we talked about with the industry feel comfortable getting out of a money market type of investment. We think we're really well positioned and we're really excited about that.
And we think that thats going to be.
A big driver going forward of our organic growth opportunities.
Great.
For my follow up I wanted to circle back on M&A, just given the rebounding markets here I wanted to see what that's changed has there been any change in valuation multiples over the last six months.
Financing side looked a little more challenged last year is that starting to ease a little bit tale.
I think sellers have.
Come down and their expectations, so I would say that.
There's probably a lot more conversations happening that potentially can get to a conclusion, we have seen some activity.
From victories perspective.
We're really encouraged.
We're working hard and part of our growth over the last decade has been through acquisitions.
And I would anticipate that going forward and I would also anticipate and I've said this before that coming out of some of these challenging periods you see a lot of M&A activity in this industry and I don't think its going to be any different this time and if you assume are coming out of a challenging period through this year.
And into next year I think the M&A activity is going to going to happen and I think theres going to be a lot of it and we're going to participate in it.
Thank you.
And your next question comes from the line of Mike Brown from K B W. Your line is open.
Great Hey, good morning, guys.
Good morning, Mike.
Hey, So I guess really nice margin result, this quarter as you called out this is the bulk of consecutive quarter above your <unk>.
49% guidance it.
It looks like the lower comp was certainly helpful. This quarter.
Thoughts on perhaps changing that guidance or any quick comments on how to think about maybe the coming quarters here.
Yes, so I'll start and Michael a follow up.
We've always talked about.
Margin guidance from a long term perspective.
Quarter to quarter with the ebb and flow of investments that we're making in the business. The way the market is and then how we realized revenue.
Really it's tough to think about a quarter by quarter and we've had a great track record of exceeding the guidance.
And but our guidance we're comfortable at 49%.
Over the long run.
We have a really differentiated operating platform.
I think this is the second highest.
Margin operating margin, we have achieved as a public company.
And I think the first was.
Q4 of 2020.
So to think that we would have our second highest margin.
This environment just says a lot about our platform.
Yes, I would add I think the ability for us to continue to make the investments and we highlighted a few areas where we are reinvesting.
Long term data product distribution.
Continuing to invest in and those areas really pointed for the future and as Dave mentioned, those investments will ebb and flow. So while this quarter, we had a 59% margin.
We think that the beauty of the model is it's highly consistent and if you go back and look we've been operating at 49% margins for the last 12 quarters.
And that includes those investments.
Okay.
Okay, Great and then could you just comment on the broader investor sentiment and just looking at your flow trends and a lot of your peers. It looks like the gross sales have been.
Remain quite soft and that's really an important part of the net flow trends that we've been seeing.
Causes investors to really engage in a more meaningful way in your in your view any green shoots that you've been seeing on this front.
Yes.
Good.
Agree with you that gross flows from an industry perspective had been soft.
A lot of investors are sitting in money market.
<unk> I think the last number I heard was <unk> seven trillion.
Which is around a quarter of the industry.
As invested in money markets.
I think that there is a.
A lack of certainty of what the future holds from a fed perspective from a rate perspective, so I think to earn.
5% in our money market essentially risk free is a good risk adjusted return for many investors.
I think as we get clarity on the fed in the economy I think a lot of that.
<unk> will move and I think that's what we're excited about we do see some some movement now we're seeing that pick up on our won but not yet funded on the institutional channel.
We also and we called this out the west end.
<unk> platform that we have we've seen a nice pick up and I do think when we get some clarity youre going to see a lot of money move it will go into various types of investments I think until then I think people. Many many people. Many advisers many investors are going to be very calm.
<unk>, just sitting in a money market and earning a 5% yield when you go back two years ago, you think about what money markets were yielding it has a good risk adjusted return.
When you look at it historically.
Okay, great. Thanks, David Congrats on the anniversary of its big milestone.
Thank you.
Your next question comes from the line of Ken Worthington from Jpmorgan. Your line is open.
Hi, Good morning, guys. Mike This is actually Michael Kellen for Ken Worthington I, just wanted to follow up on the margin.
Scott.
Organic growth our organic investment discussion I mean, you listed a few.
Several different organic initiatives and so I guess, let's thinking about kind of the 49% long term margin target I mean, what's kind of the level of annual organic investment debt.
Kind of assumed.
They're long term.
So we we.
We set a 49% margin guidance over the long term factoring in that we would make investments in our business to grow the business.
We're making a lot of investments today.
Mike went through a few of them data technology.
The brokerage platform we've rebranded.
Really the direct business.
We also have launched products.
And there is a lot of other things happening behind the scenes, where we're investing in our business and we will continue to invest we think the balance of investing for organic growth.
And then maintaining the 49% as our long term guidance is the right balance.
I do think that our model is different and I think when you compare us to other firms in the industry.
We just have a different operating model where.
A good portion of our expenses are variable.
And then we have.
The ability to really scale up and to scale down during tough markets and maintain our margins and so the balance of the investments and the 49%, we really think thats the.
That's a really.
Thats threading, the needle and getting both of those things right.
Okay, great. Thank you so much.
And again, if you would like to ask a question Press Star then the number one on your telephone keypad.
Our next question comes from the line of Alex <unk> from Goldman Sachs. Your line is open.
Hey, guys look here on for Alex. Thanks for taking the question can you just provide a quick update on capital allocation strategy. Obviously buyback continues to be very healthy and are encouraging but how are you balancing that with debt paydown and inorganic activity and on the inorganic side are there any specific areas.
He has a focus you guys are thinking about it I think through your due diligence.
Sure Ed Good morning, I think our capital management strategy has really remained consistent and is unchanged.
To maintain balance sheet flexibility really to execute our differentiated strategy, which really includes as you highlight kind of the inorganic opportunities that we see.
The strong financial performance that we've delivered the business diversification, that's really been driven by those organic investments that we've made in inorganic investments have kind of provided us that ability to remain flexible and really as we think about that.
The level of buybacks that we've done in the first half of the year.
Balancing that versus the other capital management elements and pillars Elizabeth.
We've been opportunistic and really those decisions are based on facts and circumstances.
Yes, we've learned in the past several quarters on shareholder return.
That's been the rights.
Pivots from a from an allocation perspective.
Got it very advantageous.
<unk>.
We've talked about we've got a hedge on about $450 million of the debt that really allows us to kind of have a lower interest cost.
And then really is something that we think about kind of going forward and we've also leaned in on the share buyback because we think there is.
Statements with respect to the value of the stock as well there.
But I think as we think about going forward the priority and the best use of our of our excess cash will continue to be inorganic growth and we want to make sure that we've got the right capacity filler and tools to be able to deliver on that and then I'll.
I'll take the what kind of inorganic growth opportunities. We're looking at yes, I mean first anything we do we start off that has to make the company better.
A lot of what we have done in the past has made.
Very very.
Great strides financially.
But everything that constant has been that we have made the company better. So we start off the estimate the company better the different types of transactions that we're interested in I'd put them into a <unk>.
Transformational transaction, where it's going to be large in size and scale could have multiple levers of value that you can create.
<unk> products opening up distribution channels.
And we have done some of those in the past.
Then another area. We're interested in is is really.
Acquiring products that are part of the future portfolio of our investors. So a west end type acquisition or new energy team.
These are acquisitions that have fantastic products that are part of the future.
Portfolios and where.
We're hearing from our clients the type of products that they want and desire. So we're looking at those kinds of opportunities.
And from a sizing perspective.
The range really is something very small to something very large and as Mike has said, we have a lot of different levers to do acquisitions part of that has been that in the past.
We have we generate cash we are structuring and we've done a number of different things and we feel today that we have the balance sheet and then we have the other.
Other tools that we can use to really execute on M&A.
M&A.
Praful I appreciate the color there and maybe a nice segue into a follow up the west end has obviously been a very successful acquisition for you guys can you help frame for us how significant of a driver has been and you expect it to be maybe four four the quantum of flows and is there anything anything specific.
Can speak to that stroke and the recent pickup in activity here. Thank you.
So I'll take the back half of that question I think the recent pickup is really just a general market environment.
<unk> has had excellent investment performance, but even deeper is they really do provide a solution to advisors and their clients.
And so none of that has changed it's really just been a <unk>.
General market sentiment and I think the group that.
<unk>.
Thats out servicing and selling the product does an excellent job.
Western since we've done since we closed the acquisition really the beginning of 2022, we've had organic growth and if you think about the beginning of 'twenty two to today to have a product that has grown organically really in every time period that we measure so all of 'twenty two year to date in 'twenty three.
Both growth both periods they've grown and then then cumulatively they've grown.
It's been excellent.
We have big expectations for them going forward, we think theyre going to be a big part of our organic growth opportunity.
And as the general Investor sentiment.
Gets better we think that that the organic growth will increase.
If you remember when we did the acquisition this was a double digit organic annual organic grower.
Percentage wise, so they have experienced great growth in the past and I don't see.
In a normal market environment, why why we can't reproduce that.
And your next question comes from the line of Matthew Howlett from B Riley Securities. Your line is open.
Okay.
Oh, Hey, good morning, and thanks for taking my question. Most of my questions have been answered, but David wanted to ask you on the 12 platforms.
How often do you feel a need to get involved from a management strategies you remind us again.
Sort of how often in the past you step in.
On the day to day and so forth.
So our model really is all about an independent autonomous investment franchises is how we describe it. So you have investment professionals really everyday researching and managing our portfolio as they see fit.
They do it on a platform, which we think is best of class.
And but really the investment professionals that are driving.
Building the portfolios and deciding how the portfolios are positioned.
That's how we have built our business and we think that that's the best way to get Great investment performance you can see from our investment performance how XOMA, it's been how consistent it's been and it's really because we've got the as you said 12 investment franchises, where you have.
Groups developing their own portfolios and then.
And the ability to articulate those portfolios without any interruption from.
Non investment professionals, and I think thats been consistent over the last decade.
As being an independent company.
So there is no need to step in and sort of guide someone that may not be up to what the others are doing and you're just sort of let them run its worked for you in the past and Thats the way its dancing with the breadth of the company.
Yes.
It's all about providing them all of the necessary tools that they need to build portfolios.
And to manage and to manage client assets and so our focus is on providing them all the tools.
To do that.
Take those tools they build the portfolios.
And our job as well is to go out and make sure that we secure them clients that we service those clients and we let them focus as much as their time as possible on the portfolio and making the decisions around the portfolio.
Makes a lot of sense and that leads into my next question.
Run the gamut in terms of what you what youre looking at in terms of M&A.
How do you how do you narrow it down does it come down to sort of the.
The best value out there the needs of the company or a geography, we'd like to be in.
Presumably you see a lot of potential deals out there I mean, what can you tell us in terms of how you prioritize follow all what's out there.
Yes, I think we have a.
A really good track record.
With our M&A over the last decade.
How we prioritize isn't really around asset class or size or scale or even financial accretion, it's really around the best fit for the for the company.
This industry is going to go through in my opinion going to go through continued consolidation for the foreseeable future. There is going to be a lot of opportunity and I do think sorting out the best fit for your organization is one of the challenges for leadership teams and so.
Part of that is science.
And you can go through all of the investment performance analytics and other things and then the other part is our and I think we draw upon our experience.
Doing acquisitions.
Yes.
Absolutely. Thank you so much.
And there are no further questions at this time, Mr. Dave Brown I turn the call back over to you for some final closing remarks.
Thank you and we appreciate everybody's interest in victory capital.
We look forward to keeping you posted on our progress as we execute on our strategy through the second half of the year. Thanks for attending and have a great day.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Yes.
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