Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group earnings conference call and webcast for the fourth quarter 2021. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. To be added to the queue, please press star followed by the number one at any time during the call. If you need to reach an operator, please press star followed by zero. Please note that this call is being recorded today, Thursday, February 3, 2022 at 11:00 A.M. Eastern Time. I would now like to turn the meeting over to Elie Sugarman, Head of Corporate Development and Investor Relations. Please go ahead, Elie. Good morning, and welcome to Acadian Asset Management's conference call to discuss our results for the fourth quarter ending December 31, 2021. Before we get started, please note that we may make forward-looking statements about our business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding these risks and uncertainties appears in our SEC filings, including the Form 8-K filed today containing the earnings release, our 2020 Form 10-K and our Form 10-Q for each of the first, second and third quarters of 2021. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. We may also reference certain non-GAAP financial measures. Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website, along with the slides that we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products. Suren Rana, our President and Chief Executive Officer, will lead the call. Now I'm pleased to turn the call over to Suren. Suren? Thanks, Elie. Good morning, everyone, and thank you for joining us today. Well, I'll start off with slide five of the presentation deck as usual. Over the last few quarters, we completed the divestitures of six of our seven affiliates. The fourth quarter of 2021 was the first quarter of the company operating as a pure-play quant business rather than a multi-boutique business. We're pleased that we had a solid start in this new phase with strong financial results for the quarter. We reported ENI per share of $0.53 for 4Q 2021, compared to $0.28 for 4Q 2020, and also $0.28 incidentally for 3Q 2021. The increase was primarily driven by strong performance fees. In the fourth quarter of 2021, we also deployed a large chunk of our excess capital. We repurchased $1.1 billion of our shares, reducing our share count by 45%, and also paid down $125 million of retail notes, which will collectively generate significant earning accretion and reduce leverage. Pro forma for the redemption of the retail notes, which happened in January after the quarter end, our cash balance is $125 million, and we will continue deploying capital towards share repurchases and to support organic growth. Now turning to the operating highlights for Acadian on slide seven. Acadian generated $87.6 million of adjusted EBITDA in 4Q 2021, compared to $40.4 million in 4Q 2020 and $49.1 million in 3Q 2021. The increase in EBITDA was mainly driven by strong performance fees. Acadian recorded net outflows of $0.8 billion in 4Q 2021, compared to net outflows of $1.3 billion in 4Q 2020. On a revenue basis, the flows were breakeven in 4Q 2021, compared to an annualized revenue impact of -$6.1 million for 4Q 2020. Acadian's investment performance continued to be excellent and got even stronger in 4Q 2021, with 82%, 86%, and 90% of strategies by revenue now beating their respective benchmarks over the prior three-, five-, and 10-year periods. Last quarter, we spent some time diving into Acadian's platform a bit more, as laid out on slides eight through 12 in this deck. This time, let me take the opportunity to touch on the long-term outlook for Acadian's business and the drivers of growth. On slide 13, we look at the key secular trends impacting our business. Firstly, there continues to be an explosive growth in alternative data available to investors. It includes company-related information, sector trends, macro data, ESG data, you name it. Processing it all efficiently and extracting useful takeaways from it is getting harder and harder for human analysts. At the same time, the techniques and technology for making meaning of the data keep getting better and better, including machine learning and artificial intelligence approaches. The scale of investment in technology, data, and talent is becoming more and more important to truly make the most use of the signals available in the data. Acadian is a pioneer in quant investing and has been investing heavily in its capabilities for 35 years, building a unique combination of data, technology, and talent. We're seeing a growing demand for uncorrelated strategies and for customized solutions to client objectives such as ESG or diversification. These type of strategies are particularly suited for big data-driven approaches. We believe that these long-term trends position us really well to produce superior alpha for our clients and meet this growing demand for data-driven strategies. We are on the cutting edge of quant, and we can apply our edge in adjacent asset classes such as alternative and new markets such as China. On slide 14, we review some specific initiatives that we have underway on these themes. First, investors around the globe are looking for yield, but with downside protection and robust diversification across market environments. Of course, this trend continues to power the growth of private alternatives. We have developed two very good solutions to satisfy this demand, which we are very excited about. One, Systematic Macro, which is applying our multi-factor model across asset classes, including equity, fixed income, currency, and commodities to generate absolute returns with very high diversification. We've been getting very good traction from clients for this strategy. Two, Equity Alternative Strategies, which is using alternative signals, alternative data, and differentiated portfolio construction techniques to produce uncorrelated returns. We are very happy with the investment results we're getting here. We are seeing continually increasing demand for ESG-focused strategies which have already exceeded $1 trillion in AUM. With Acadian's focus on quant and technology, our advantage in ESG space is that we can quantify the ESG signals and more precisely customize client portfolios for their ESG values. We can implement dynamic programs related to client ESG goals, such as quantifying their carbon exposures and decarbonizing their portfolios and measuring the impact on risk and return of their portfolios. These sophisticated techniques are way superior than crude methods, such as excluding or divesting some names or just incorporating ESG considerations qualitatively without explicit measurement of ESG exposures. Doing the latter doesn't really achieve the ESG goals, and clients may be unwittingly sacrificing return or taking on additional risk. We're seeing increasing demand and engagement from clients on ESG theme and expect this to continue for a long time. As an example of applying our quant edge in new markets, we seeded a strategy for China market, which is performing pretty well. China market is large and liquid, but rich in opportunity and inefficiencies since it's retail-driven. To summarize our growth strategy, we will continue investing in our quant capability to remain on the cutting edge, and we will leverage our quant edge to tap into several secular growth areas such as ESG, absolute return, alternatives, and new markets such as China. Now let me turn the call back to the operator, and we're happy to answer questions at this point. Thank you. Thank you. At this time, those with questions should lift their phone receiver and press star followed by the number one on their telephone keypad. To cancel a question, please press the number sign. Please hold for a brief moment while we compile the Q&A roster. Our first question is from Kenneth Lee with RBC Capital Markets. Your line is open. Hi. Thanks for taking my question. Wondering if you could just talk a little bit more about how you think about capital allocation as it pertains to what's needed for organic growth, and seed capital. Thanks. Hi, Ken. Thanks. Yeah, you know, as we've said, that we, our business throws out a lot of cash, and that's of course a good problem to have. At the same time, we think our stock is undervalued and our long-term prospects are really great. We will probably be using a lot of our cash generation toward repurchases. In terms of organic growth, as I said, you know, our business, we've been investing in our capabilities for decades. A lot of that investment is already baked into the P&L in terms of the talent that we have, the data that we pay for and have, the technology that we've built and continue to invest in. All of that is a lot of that is expensed into the P&L. The incremental need is really mostly seeding new strategies, for which we have an active program. As good opportunities come, we will continue to seed new strategies, such as the types I described, which we seeded from time to time. A bulk of the cash generation really is available for repurchases. Currently our cash balance is about $125 million after having paid the retail notes. We have about that much capacity now, you know, for repurchases. Then we'll see how, as the year progresses, in terms of additional cash flow generation. Great. That's very helpful. Just one follow-up question, if I may. I wonder if you could comment on whether you've had any, you know, discussions around potential value-enhancing transactions in the quarter, and perhaps one of you just also frame the likelihood of seeing any kind of potential transaction over the near term. Thanks. Yeah, sure. You know, as we've always said, our objective and our duty remains to maximize shareholder value. Now, having completed our divestitures, you know, we are very well positioned with our unique business and we really believe in our long-term growth prospects. You know, we are very optimistic about our future growth, and we generate a lot of cash flow, and we can add value through buybacks. We're very happy continuing on. At the same time, if we have a serious proposal that is attractive for our shareholders and recognizes the value, we're very open to it. You know, it's hard to really peg the timing of anything. You know, if something happens that's great for shareholders, we of course have a fiduciary duty, you know, to make that happen. Great. Thank you very much. Our next question is from Robert Lee with KBW. Your line is open. Great. Thanks. Good morning, sir. Hope all is well. Just, real quickly, could you maybe update us on where you are with kind of corporate overhead holding company expenses? I know you had talked about kind of some room to drive those down some more. Maybe as part of that, is there an avenue here where kind of the public company kind of gets collapsed into Acadian? I'm not sure. I mean, who knows if Acadian management wants to run a public company, but you know, you've seen some of those in the distant past in the industry. But is that something we should be thinking that ultimately, if there is no transaction, the public you know, the public holding company essentially gets absorbed into the operating business? Hi, Rob. You know, that is anyway our plan. You know, that we're not necessarily counting on a transaction, but you know, we're always open to it. You know, given our capabilities are so unique and our business is so well positioned, that could very well happen. We're a scarce business. At the same time, of course, you know, we are continuing on the path of continuing to simplify our business, make things easier. We are in the process to more closely integrate our public company functions with the operating business. In effect, it is what you're describing, sort of collapsing is already underway. You know, of course we're doing it thoughtfully in terms of making sure that all the work streams are streamlined. It'll take a few quarters. Of course, as that continues on, there are efficiencies that we mentioned that will be realized from the simplification. Okay. I assume that's embedded in whatever savings will be there, embedded in your guidance on expenses. You know, with the performance fees, I guess just the magnitude of them certainly took me by surprise. I would expect, you know, based on, you know, estimates out there, you know, people weren't expecting anything of that magnitude. Can you give us a little color? Was there like one or two products that drove that? Or, you know, was that just really this is just a one-off that was this big? 'Cause I know there was some performance fees from Acadian, but I just didn't think there was the potential for that kind of magnitude. Right. Yeah. We got a, you know, strong performance fee this year, and we're very happy with that. It came on the back of impressive investment performance, right? As we've been reporting, our investment performance has been great. In 4Q it improved even more, with at least more than 80% of strategies beating across all time horizons. Some have 90% of strategies on some time horizon. Performance fee will largely depend on how the investment performance stacks up, you know, at the end of 2022. As we've said, you know, performance fee is generally a 4Q event for us. Mm-hmm. We have smaller amounts in earlier quarters, but it really gets fully determined in 4Q. For 2022, it would probably be lower than 2021. You know, but we're hoping for, you know, another good performance year. You know, the environment is good. We'll see where it comes out. It's hard to peg. Sure. It came from a wide variety of clients and strategies, again, but it just really depends on performance. Is there any way of kind of sizing, of the $117 billion, there's, I don't know, $20 billion of assets that are performance fee eligible or $10 billion or $50 billion? Just, you know, trying to get some sense of the potential, you know, asset base supporting it. I see. Yeah, that's, you know, that's about right. You know, we try to keep it, you know, less than a quarter, so about 20%-25%, one could say. Mm-hmm. Okay, great. One last really just kind of a modeling question. You know, post the tender and everything, what is the year-end kind of actual share count at that point? Just wanna make sure I'm level setting it correctly for, you know, going forward. Yeah, I guess, you know, it will be in the 10-K, but, you know, but it's around, you know, you'll get the exact number in the 10-K. But around 46 million basic share count at the end of the year, just as a starting point. Mm-hmm. Of course, as we do repurchases, if we put the under $20 million to work, you know, maybe we can reduce that by $4 million or $5 million. Right. Okay, great. Great. Thanks for taking my questions. Thank you. Our next question is from Michael Cyprys with Morgan Stanley. Your line is open. Oh, hey, thanks for taking the question. Just hoping you could maybe share a little color on how the quant strategies are holding out from a performance standpoint so far in 2022, just given the volatility in the marketplace. What are you seeing there? Related to that, what are you seeing from clients just in terms of demand for these sort of strategies and what is likely here, a choppier take? Yeah. Hi, Mike. Yeah, I guess, you know, it's only a month into it, so of course it's too soon to tell. You know, but thematically, we like this environment. Of course, it is a better environment for performance, 'cause it gives me some more normal environment, in the sense that the market's more discerning about rewarding different investment factors rather than what we had for a few years, right? Buying growth factor at any price. So in that sense, we would hope that it's a constructive market to reward, you know, a good investment process. In terms of, yeah, client demand, you know, we will see how the market develops and what kind of strategies come in vogue. We do have a variety of strategies. You know, as we've said, our low vol strategies, for example, this is kind of the environment where they are performing again, and we are always outperforming its beta, and they were always ahead of the low vol indices. In this environment, we are also outperforming the core indices like S&P and MSCI. That's good to see. Again, it's just a little too soon to tell where we'll see how the market plays out. Great. Maybe just circling back to the performance fees, you know, hearing your earlier commentary suggesting 2022 likely to be lower on performance fees than 2021. Would you have any historical periods you might be able to share with us and just what the performance fees were in 2020, 2019, either for the fourth quarter or full year, understandably. With all the other affiliates, you had some moving pieces and some clawbacks, I think, with Barrow. Just any help there. And what change would you say in 2021, relative to the performance fee that you guys had put up in prior years, just in terms of the business? Was there just outsized performance over a 12-month period, or was it looking back over a multi-year timeframe with these new strategies? Is anything that's different? 'Cause the magnitude of performance fees here that we see, that's not something we've seen at all in, you know, BrightSphere or OMAM's history that we can tell. Yeah, it certainly bounces around, you know, depending on the performance. You know, sure enough, you know, some of that is linked to one-year performance and some of that is linked to other periods, you know, two or three or five-year periods. You know, on the longer data periods, I guess when, if you get that kind of a period, you know, then it's high. It certainly has bounced around in the history. There have been times when the number, the dollar number, was similar, you know, on a smaller AUM base, when sort of, you know, just a combination of things come together and a lot of strategies are outperforming. There are times when only a few strategies are outperforming. It's really, I guess, you know, the simple thing is that, you know, we had really across the board great investment performance. When that happens, then you get a strong performance fee. I guess just given that strong performance backdrop that you're articulating, do you think this is enough at this point to reverse the outflow trajectory that we're seeing and to drive inflows? Or what do you think needs to happen to really drive and inflect towards a more sustainable flow trajectory? No, we don't have like, you know. When we talked about 2021, you know, we were talking 1Q and 2Q that clients were moving out of low vol because just the high beta just seemed to, you know, pay off really well for clients, right? Now the situation has changed. We had outflows from low vol then. We don't have any pressures, you know, like secular pressures like that on the flows per se. In 4Q we had a client who decided to in-source their business. Without that, you know, the flow would have been positive for fourth quarter. There are idiosyncratic, you know, lumpy things like that that can happen in institutional business. Away from that, you know, there isn't any pressure as such. You know, we are getting good sales. To your question of in terms of getting consistently positive flows and growing flows, that would probably, you know, happen more from our the new strategies that we're seeded and that we're excited about. Because on our mature strategies, we get good sales. We can also get some, you know, clients to rebalance and, you know, maybe it's like break even or modestly positive on average. The real growth will probably come from, as I outlined earlier, in terms of our the new strategies that are tapping into secular trends. Our multi-asset class strategy that's really getting good traction. We're really well positioned to provide any, you know, ESG solutions to clients that we're very excited about. Our equity alternatives products where we have built up really good performance, new markets like China. Those are things that can generate, you know, flows on a consistent basis, because those are secular growth themes. You know, most of our business is very strong, but probably modestly positive as opposed to consistent growth quarter after quarter. For that, yeah, we've got to tap into these new themes. Great. Thanks so much. Our next question is from John Dunn with Evercore. Your line is open. Hi, there. You know, just looking at the newer strategies, is there any difference to the way those get distributed? Maybe can you talk about demand for them, the institutional channel versus maybe the wealth management channel? Hi, John. Currently all our distribution is institutional. We certainly do see distribution as an avenue for growth. Whenever we find good resources, we wanna have them, you know, in terms of opening new channels or opening new markets, but it's all institutional, currently. You know, we haven't started out, you know, a retail distribution, whether wealth or, you know, the wirehouses. The new products are essentially the same distribution, you know. Essentially it's more clients. It's clients where we deeply understand what they need and often in consultation with them, we can provide a customized approach and then it becomes, you know, a larger strategy and then we can sort of distribute it more broadly. In terms of retail, we don't currently have plans to, you know, invest into retail. If it happens, it would probably be in the context of a partnership with a retail organization that could bring a lot of synergies. We don't plan to build retail, but no, we plan to continue growing more and more into institutional. Got it. Maybe just you mentioned the client redemption this quarter. Could you maybe size that for us? Also, do you guys see anything kind of chunky coming down the pike in the next couple of quarters? No, we don't see anything, you know, chunky because, you know, by definition, these things are, you know, idiosyncratic. Yeah, that was, you know, I guess, roughly $1.5 million. You know, as I said, without that, the flows would have been positive, but that could happen any quarter. Got it. Thanks, Sur. Thank you. The next question is from Michael Cyprys with Morgan Stanley. Your line is open. Oh, thanks for taking the follow-up. Just as we think about share buyback potential, can you just remind us how much cash do you like to run with, just to run the business? How much you think about investing back into the business to drive growth organically? Maybe just kinda update us on some of those seeding initiatives. You certainly had mentioned some of the new products that you've invested in in prior years, but as you kinda look out over the next couple of years, how are you thinking about that on a go forward? Yeah, I guess, you know, we typically have more than $20 million on hand, you know, even times when we are using up a lot of cash. In terms of seeding, as I said, you know, a lot of our investment in the data and technology and talent that's already in the P&L, so just seeding. We have many seeds already, you know, in the works. It's probably, you know, $10 million-$20 million a year that we could put incrementally on seeding. The rest, we'll probably think about buybacks. You know, as I said, maybe $125 million is what we would want to, you know, set aside for buybacks in the near term, and then we see how our cash balance progresses. Great. Just lastly, if I could just come back to the expense commentary. If you recall, there were some plans to drive the corporate overhead costs from, like, a $20 million run rate to a $10 million. Can you just remind us the timing of that, you know, some of the actions you guys are taking? Is $10 million still the right end state? Is there potential for that to go even lower? Yeah, I guess, you know, that's sort of, you know, a good high level number. As I mentioned earlier, that process is underway, in terms of just integrating our processes closely. It's really just essentially one integrated business, as opposed to a holdco and an opco. We're being thoughtful about it in terms of making sure nothing slips through the cracks. That'll progress over the next few quarters. Great. Thanks for taking my questions. This concludes our question and answer session. I'd like to turn the conference call back over to Suren Rana for any closing remarks. Great. Thank you. Thank you everyone for joining us today. Appreciate that, and we look forward to engaging with you in the coming quarters.