WHG Westwood

Julie Gerron General Counsel
Brian Casey President and Chief Executive Officer
Terry Forbes Chief Financial Officer
Mac Sykes Gabelli
Call transcript
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Good day, ladies and gentlemen and welcome to the Westwood Holdings Group First Quarter 2019 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to turn the call over to your host, Julie Gerron, General Counsel. Please go ahead.

Julie Gerron

Thank you and good afternoon. quarter conference first our to XXXX call. earnings Welcome be forward-looking are uncertainties by subject following results other discussion known the which include will to actual cause risks, The forward-looking to statements. those statements and which may different materially from factors contemplated and unknown

Additional the for as well in could We Form XX-Q of factors cause with is undertake March or otherwise. filed a Securities future difference as information the in earlier publicly our today quarter statement concerning the Exchange ended Commission. events obligation included press XXXX update no that XX, such revise whether and release issued to as new or forward-looking any a result our information,

cautioned reliance are You to place not undue statements. on forward-looking

with the today. SEC financial end at and the non-GAAP of most to earnings economic included press accordance reconciliation earlier our earnings GAAP release concerning measures, per economic share the our comparable the rules addition, In is of measures in issued

we our the call On our Brian I turn now call and President will Chief to Financial Brian our Forbes, Officer Executive today, Casey. over CEO, Terry the Chief Officer. and have Casey,

Brian Casey

Good afternoon to earnings to time taking and for quarter first thank the call. our listen you

the of risk the quarter investment one single quarters with always, I’ll remained moderate volatility. start parts similar well. of years on the to best posted But dovish by XXX last inverted, assets bears to continued quarter’s the decline as last which and be It and trade fueled a quarter. the and flattened, still a fourth steep the a The with in moderating GDP first S&P comments on XX was the watching. market to yield the more reversed best growth optimism are quarter, like Fed deal in XX years. susceptible snapback of has with environments to then saw about previous China and As a in risk finish bouts our positive. we curve teams on but comments appears U.S., In equities business. from concerns Volatility and some the market’s fear and

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industry Journal such publications and as The from have others. We Street of Wall FundFire, dozens interest attracted numerous

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We are have we recent standing by outflows, not where we’re disappointed good still, feel and been but going. about we

platform. and practices been journey performance models. head firms Our redundant we industry which started complacent using a our started towards than now we’ve replace decades. inefficient that X is with XXXX, later have and data our Advent created goal of while our Axys of in InvestCloud bull and true network more both with journey XXXX, been that legacy anytime-anywhere, We reconciliation investment the all meeting two of to infrastructure copies secure ago institutional best central sales intellectual a technology this A a we compliance our order trade technology, Microsoft processes for portfolio golden and and years for we cloud-based, the far. and for In changed purchases. developing for a of platform a been We to teams and have operations We environment. Many Simultaneously, the teams, developing Private with access so out employees decade-long multicurrency XXXX to with and our roll becoming platform on operating moved warehouse system quick fully Azure so our accounting a halfway software repository review digital hardware Markit and management and systems. marketing state-of-the-art market, a are our eliminating EDM entire clients by now multi-asset, now We year. is operations, our our all need challenges for expect property. also trade on. plagued workflows have upgraded the Beginning Wealth we’ve investment over our in future all our have new data

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the the form We better and on whatever our it few have disruption take in than positioned over years. much we invested more next are to peers, heavily industry takes

will in the and More be future. better our support importantly, we to able now needs client’s

in quarter, Westwood If you the investing in the stock. wrong are you’re next for just

confident buildup patient few you’re sales the feel service the initiatives in believe to In execute we If that to deliver through we and exceptional returns, aggressive you and flows we and market-leading our positive infrastructure. new client next return the can in years the are building, over sales who meantime, the deliver for the current the call have Terry above-market you intend with competitive I’ll with We dividend us over a of will ahead. CFO. stuck and enjoy an years, Forbes, over yield. in highly years those turn we to to appreciate you now you our

Terry Forbes

assets was lower resulting quarter was outflows. average fourth prior average year’s prior lower from million good first resulting decrease XXXX, afternoon, $XX.X we under from revenues management the net The Today, Thanks, fees. under in of primarily XXXX outflows Brian, to million management everyone. to first and decrease due the reported of in year’s total from prior fourth quarter the and lower performance-based net due quarter. assets $XX.X quarter compared from and quarter of million the year’s the which first to for $XX.X The primarily

foreign income or compared fourth quarter $X.X $X.XX the prior share million benefited to of year’s fees transaction from year non-GAAP current in $X.XX metric, or $X.X prior million Economic fourth gains. and in a share versus per per currency earnings, $X.X the $X.XX quarter quarter. share million fourth $X.XX $X.X in or asset-based million per quarter higher net quarter share XXXX. was of per or the First The

a share per XX% management of lower and billion per of fund to the $X.X assets Economic per or the net assets revenues share or and XX% share current compensation Firm-wide billion $X.XX $X.X $XX.X end compared $XX.X partially First offset and mutual $X.XX total total. primarily for compared of consisted million currency the quarter $X.XX prior quarter of to of year’s of to in billion assets of institutional quarter $X.X of earnings or total, compensation. foreign wealth total XXXX. million quarter lower quarter. loss of XX% under reductions in the or per the share related or by tax, million assets for decrease expenses or the income The million $X.X $X.X of incentive totaled billion first or first million net $X.XX $X.X and $X of at management

of we billion outflows year, $X.X market $X.X the billion. appreciation experienced Over and net of

April continues to This June position cash at a to Board an with stockholders per in to website questions. We of X, to on in a to review XX. for of business, July quarterly reflecting comments $X.XX earnings solid posted $XXX we payable short-term be trends on prepared close. we’ll and on totaling quarter longer-term X.X% improved brings on very you million have financial We you closing X, of as a cash our sheet. XXXX, our XXXX. thank That and dividend price to represents open dividends. first and highlights investments dividend annualized quarter as and the yield our encourage investor development of debt-free well product as our our Our of presentation I’m a discussion record interest lines happy the share revenues, and that end of Directors your balance company, our announce


sir. you, first question I Instructions] Mac comes from show Thank from Sykes [Operator Gabelli. our

Mac Sykes

afternoon Good gentlemen.

term of and product. I franchise? mean you it like goals the it terms curious, longer? about on evolving news Fees the congratulations Brian, the the was off intermediate maybe years agencies. So, both really over you flagship your I for the do around aspect in of being see of see it Or different how this took and Sensible long X eventually press. seems do kind in

Brian Casey

where been outperform in been you us first all congrats. kind Well, been the and by between folks amazing Morningstar, if It humbling, construct We’ve for to of the last thank by refreshing. a consultants, interesting, XX asset the perfect owners for all, major has We’ve is pay you managers, been embraced said only this we and by asset of have publications. alignment fee month. really it’s really that that

be As building my meetings. And far good We’ve had mentioned enormous And as out have a little for of We’ve an comments, think force. too institutional folks We’ve sales and positive it I’ve over we more us. money a opener robust throughout time have it’s XX had where meetings. a meetings. it early door amount to as is out we a of had XX found to headed, lot tell. I spent intermediary selling. very We over

by infrastructure we’ve before, thought are had we backed on are never that basis. a weekly an pieces We and out leadership putting

So, I’m that very think and real too a could game it’s us. a early term But goals. excited or something what scalable are about it. little It’s to say just highly intermediate longer I the changer be for

Mac Sykes

year color Okay. appreciate seem IT’s It on being XXXX made. about does a a to your the the this like think of little versus bit expense expenses previous as you investments fell Should I when that all we the off taper start quarter. pace your years?

Terry Forbes

in expenses systems as the some on as in mentioned, ready the will still to investing have Brian we we overlapping well be as running have think digital other XXXX we live to are because we’re go somewhat because I sure consistent systems. platform that make

see drop-off don’t So, a think you’re there. going I to significant

Brian Casey

technology. have when And And one which rather done there’s called we different stable of for we’re that management, remarkable, various a going pieces we’re see what billion and and what a have But you assets of in with pieces platform they do roughly most dozen gets to under I more literally have is this, of XX $XX a do. very to think firm is out that’s when we technology. stat efficient or will there,

it of wrapped also include offers to InvestCloud services and number together. license in fee wrapped all our have that the We annual a

a get system. we’ll state-of-the-art CRM things So, like

some the planning We financial will done work for benefit area. get from will clients we that they’ve other of the in

so. phase So, green, we’re month the products. should really like use in excited their have through they or of talk what are We to through colors is we when that see should which be platform should we the be next about We when they first our looks finished.

running currently. are parallel We

paying So have we’re mentioned, do we paying that what see. that as we’re with the InvestCloud we doing. to what time, but at of excited we’re means same accuracy Advent But Terry the ensure and to we’re

and find which summer next thing a All folks Wealth with of of beta more our our will be meaningful online that we early then we’ll in will with their is digital really much makes that amazing, for refine in the as version that really we and technology jobs easier fourth X.X, then The family, Coach be out work the way this operations or the clients that smaller-tier roll be efficient. will new to a able out third will friends roll and to offering we more will quarter. and see

also not next our with real We digital rollout but the beta fully be well. that a And high game first our clients in likely will year as more later only of have will changer quarter the our year. clients of platform for a institutional worth this net

more good the on lot other of again, a things daylight spent we really spend, bridge, and to highly a going a and functional see money side, we platform. little the see So a efficient of do on, lot but under

Mac Sykes

taking Great. Thanks my for questions.

Brian Casey

Thanks, Appreciate it. Mac.


I Executive Casey, like Officer, ahead. President for the Thank show over Brian further to this Please and in at time. go questions I’d call Chief closing to the no Instructions] turn you. queue remarks. [Operator

Brian Casey

to Well, our the thanks much call. listen time very taking to Great. for

if you a we to afternoon. grow being the Terry We future said, like Have I a great like you. disappointed. shareholder. for bright. and you’ve questions. to any our your appreciate website recently, us I to it have side or future do investments flows we’ve we further a and other made As myself but feel the know really disappointed is We’ve visit And please Thank for and with been the thrive feel or make the our call been us give really in


concludes and the ladies you, for attending conference. Thank This today’s gentlemen, program.

may You disconnect. all Good day.