Good morning, and welcome to the Victory Capital third quarter 2022 earnings conference call. All callers are in listen-only mode. Following the company's prepared remarks, there will be a question-and-answer session. I will 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 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 disclosed 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 press release and in the slide presentation accompanying this call, both of which are available on the investor relations portion of our website at ir.vcm.com. It's now my pleasure to turn the call over to David Brown, Chairman and CEO. David? Thanks. Good morning and welcome to Victory Capital's third quarter 2022 earnings conference call. I'm joined today by Michael Policarpo, 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 quarter and year-to-date period. I will cover our investment performance, which continues to be very strong. After that, I will highlight our increasing capital return to shareholders and then turn the call over to Mike to review the financial results in greater detail. Following our prepared remarks, Mike, Matt, and I will be available to take your questions. The quarterly business overview begins on slide five. The equity and debt markets both continued their decline in the third quarter. Through the first nine months of this year, investors utilizing a traditional 60/40 portfolio allocation are enduring the largest drawdown since 1937 to put in perspective how challenging the markets have been. Despite the current market environment, our business performed exceptionally well, and that was very evident in the financial results we reported yesterday. While our AUM and revenues were expectedly lower given the markets, Adjusted EBITDA margin expanded to 50% in the third quarter, which was the ninth consecutive quarter above our 49% long-term guidance. This resulted in year-to-date Adjusted EBITDA margin widening to 49.6%. The margins in our business are industry-leading and a testament to our business model. The most important in this equation is the excellent people we have operating our business. Quite simply, I believe we have the best group of employees in the industry here at Victory, and that to me is very evident in the performance of our company during these markets. Sales activity remained brisk with $6.6 billion of gross long-term sales in the quarter, which is 16% higher than during the same quarter last year and up 29% from the same quarter of 2020. This is primarily a result of past investments we've made to build out and enhance our distribution capabilities, combined with a well-diversified product set, which we have consistently expanded over the years. To that end, in October, we further expanded our product set with the launch of the VictoryShares WestEnd US Sector ETF, ticker MODL. It delivers an investment approach that mirrors WestEnd Advisors' existing US sector strategy in a single ETF vehicle, increasing the availability of this strategy to a broader group of investors. Year-to-date gross sales reached a record $26.8 billion for the first nine months of 2022, which also highlights the experience and hard work of the individuals on our distribution and marketing teams. Net long-term flows improved from the second quarter of the year, resulting in positive year-to-date net long-term flows of $1.9 billion. WestEnd Advisors has had positive long-term flows every month since we closed the transaction at the end of 2021. Additionally, our VictoryShares ETF business recorded its eighth straight quarter of positive long-term flows. Moreover, our institutional distribution channels has had positive net flows year-to-date as well. This is just a sample of some of the green shoots around flows we are seeing within our business during these volatile times. The swift upward movement in interest rates and the resulting significant outflows in most fixed income asset classes that have occurred year-to-date present a great opportunity once interest rates stabilize to increase market share by capturing a lot of the assets that have left on the way back. Our USAA fixed income franchise is well-positioned to increase market share given their relative outperformance. Through the end of September, 83% and 96% of the USAA fixed income AUM has outperformed the respective benchmarks over the three and five-year periods. Over an entire 10-year business cycle, 100% of this AUM has outperformed benchmarks. This is a well-resourced team that has an excellent long-term track record and already manages a sizable amount of assets. We also generated higher quarter-over-quarter adjusted net income with tax benefit per diluted share. In addition to supporting our industry-leading margins, our flexible cost structure affords us the ability to sustain investments in our strategic growth initiatives. We are very pleased to have the financial wherewithal to continue to reinvest in our business during all markets. Our business model is very durable in any market environment and has proven to be very resilient under the current market conditions. The build-out of our digital marketplace continues to make nice progress. We are looking forward to introducing more investor options and features to broaden and enhance the products and services available in our direct investor business. We expect to roll these enhancements out during the course of next year. Turning to slide seven, you can see the strong investment performance we deliver on behalf of our clients has continued in the quarter. At the end of September, we had 52 mutual funds and ETFs with four- or five -star overall ratings from Morningstar. This is up from 50 funds at the end of June, 44 funds at the end of March, and 43 funds at the beginning of the year and reflects our ability to generate excellent risk-adjusted returns for clients in a volatile market environment. These 52 funds account for more than 2/3 Of our AUM in mutual funds and ETFs. Looking at total AUM, 81% and 79% of our total AUM outperformed benchmark for the critical three- and five-year measurement periods as of September 30. We believe this excellent performance will help augment future net flow activity. Cash flow generation remained strong in the quarter. We increased share repurchases in the quarter and acquired 1.8 million shares. This is a record amount for a quarter and aligns with our capital allocation strategy of being flexible and opportunistic. On our last call, we discussed striking a balance between debt reduction and share repurchases and the flexibility we have to pivot quickly should we see an opportunity. To be clear, we are still committed to reducing debt aggressively to support our acquisition strategy. This should be apparent in the amount of debt we've reduced so far this year and most recently this quarter. That said, we flexed towards more share repurchases in the third quarter for a few reasons. First, we believe that our current share price does not reflect the full value of our company, and that it is a good use of our capital to purchase our shares at what we perceive as a discount to its full value. Second, we believe our debt is relatively cheap given our hedge and the existing structure of the non-hedged debt. We will continue to be opportunistic and adjust our strategy to current market conditions as we move forward. From an acquisition perspective, we are not dissuaded by the current market environment and continue to be very active in evaluating opportunities. There are a lot of conversations happening, and I'm encouraged by what we have seen. With the current market volatility, there is a lot of merit in being patient and measured, but also having the resources and the wherewithal to execute when the opportunity is right. I feel we have balanced these two important principles and look forward to continuing our success in acquiring high-quality companies like we did in 2021 with the closing of three acquisitions. With that, I will turn it over to Mike for more details on the quarter's financials. Mike. Thanks, David, and good morning, everyone. The financial results review begins on slide 10. Total AUM decreased by $7.7 billion or 5% in the quarter to $147.3 billion at the end of September. This was primarily driven by more than $7 billion of negative market action in the quarter. AUM at quarter end was down just under 8% compared with the end of the same quarter last year. Revenue of $207 million in the third quarter was off 4% from the second quarter due to the lower AUM. GAAP operating income was favorably impacted by a non-cash benefit associated with the reduction in the fair value of the contingent earn-out liabilities on our balance sheet. This benefit to our GAAP results totaled $10.5 million in the third quarter, which was down from a $26.6 million favorable impact in the second quarter. Combined with the lower revenue in the quarter, this accounted for a majority of the decline in GAAP operating income. Adjusted EBITDA was $103.6 million in the third quarter, a 2% decline from the second quarter, resulting in Adjusted EBITDA margin expanding 80 basis points to 50%. This increased year-to-date Adjusted EBITDA margin to 49.6%, which is slightly ahead of our long-term guidance. GAAP net income was $72.8 million, or $1.01 per diluted share. ANI with tax benefit increased to $85.6 million, or $1.19 per diluted share, up from $80.7 million, or $1.11 per diluted share in the second quarter. Net income benefited from a lower tax rate in the quarter associated with a one-time tax benefit associated with stock options exercised by employees in the period. The estimated impact of this on diluted earnings per share in the quarter was approximately $0.10. Reduced debt by $30 million and returned a total of $67 million of capital to shareholders in the quarter. This includes the shares withheld for tax purposes associated with stock options exercised by employees that the company purchased. Those withheld shares that were purchased by the company totaled 992,000 in the third quarter. Historically, the impact of shares withheld for taxes and purchased by the company was less meaningful. Therefore, to enhance transparency, we're going to begin showing these repurchases on a separate line of our cash flow statement. The effect on return of capital and impact to diluted shares is consistent. The only difference being the source of shares. Combined with the open market share purchases of 819,000 during Q3, total shares repurchased were 1.8 million in the quarter. Year to date, the combined number of shares is 3.2 million. The cash dividend was maintained at 25 cents per share for the current quarter and represented an additional $17.4 million of capital returned to shareholders. On slide 11, you can see total AUM was $147.3 billion at the end of the quarter and remains well-diversified from a distribution channel and client perspective. This diversification has served us well in the current volatile market environment. Turning to slide 12, gross long-term flows totaled $6.6 billion in the quarter, and we had $553 million of net long-term outflows. This resulted in gross flows of $26.8 billion for the nine-month period and positive year-to-date net long-term inflows of $1.9 billion. Five of our investment franchises and our solutions products generated positive net long-term flows in the quarter. Our VictoryShares ETF platform continues to grow organically as well and represents an area in which we are continuing to invest and expand our offerings. Slide 13 illustrates our revenue, which declined 4% from the second quarter, consistent with the quarter-over-quarter 4% decline in average AUM. Our fee rate was 51.8 basis points in the quarter, down 0.5 basis points from the prior quarter, reflecting a shift in asset and vehicle mix, which was slightly offset by an increase in fulcrum fees on certain products. On Slide 14, we detail our expenses, which increased $10.9 million due solely to the non-cash $16.1 million decline in quarter-over-quarter benefit associated with mark-to-market of the earn-out liabilities recorded on our balance sheet. On a cash basis, compensation declined in the third quarter by 4.5% to $51.2 million, or 24.7% of revenue, down from $53.6 million or 24.8% of revenue in the second quarter. Additionally, other non-personnel operating expenses declined $3.5 million or 5.3% quarter-over-quarter, driven primarily by lower AUM-based expenses. These declines are associated with the purposeful design of our calibrating business model. Moving on to our non-GAAP results on slide 15. Adjusted net income rose 7% to $76.2 million, up from $71.4 million in the second quarter, and the tax benefit was unchanged at $9.3 million. This resulted in ANI with tax benefit increasing by 6% to $85.6 million, or $1.19 per diluted share, up from $80.7 million or $1.11 per diluted share in the previous quarter. Our Adjusted EBITDA margin widened by 80 basis points to 50% in the quarter, and we are maintaining our long-term guidance of 49%. We're making no changes to our hiring pace or to investments we are making in various areas to support our growth initiatives. We have been consistently investing in technology, distribution, data, marketing, digital marketplace, and our people during the year. Lastly, turning to slide 16. On the capital management front, we repaid or purchased in the open market an additional $30 million of debt during the quarter. With our debt trading at a slight discount to par, it is more advantageous for us to acquire our debt in the open market and retire it to capture those economics. At quarter end, $11 million of our repurchased debt obligations had not settled and therefore are not reflected on our September thirtieth balance sheet. O ur net leverage ratio at quarter end was unchanged at 2.3x. During the quarter, we transitioned both the original term loan and our incremental term loan from LIBOR to SOFR, plus a credit spread, as well as the interest rate swap on a portion of our total outstanding debt. This resulted in effectively reducing our spread by a couple basis points on the floating portion of our debt and lowered the effective rate on our floating to fixed interest rate swap by 6.5 basis points. As a result, the $450 million hedged portion of our debt has been reduced to 3.15%. As a reminder, the swap is in place through the 2026 maturity of our original term loan. In addition, our $100 million revolver remains undrawn. GAAP operating cash flow grew 14% from the second quarter, reaching $103 million in the third quarter. Year to date, we have realized a $28 million reduction in our corporate cash taxes, representing a small portion of the approximately $500 million in cash tax savings we anticipate over the next 15 years. These savings are related to the deductibility for corporate tax purposes of the stepped-up cost basis of acquired indefinite lives intangibles and goodwill associated with prior acquisitions. We have included a chart in the appendix of the slide deck accompanying this call to illustrate the anticipated cash tax savings out through 2036. That concludes our prepared remarks. I will now turn it back over to the operator for questions. Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again. Our first question comes from Alexander Blostein from Goldman Sachs. Please go ahead. Your line is open. Hi, good morning, everybody. Thank you for taking the question. I was hoping we could start with just discussion of how WestEnd is performing in this environment. You know, you guys mentioned earlier, obviously, the typical 60/40 portfolio is struggling significantly this year. How has the performance been? How have the flows been? And just more structurally, do you think the current sort of decline in the typical portfolios accelerates their market position on the platforms that they're in? Good morning, Alex. It's Dave. Good to speak with you. First on WestEnd, I said in the script that they have been every single month through September. They have been net flow positive, really in an asset class that has seen outflows. They have outperformed relatively pretty strongly from a flow perspective. We're really encouraged by that. If you go back and look at their history, they have grown pretty significantly, pre our acquisition, and they've continued that in this environment. From an investment performance perspective, they've performed exactly as they should have and as the clients expect. They are very close in most of their strategies to benchmark and benchmark-like returns, which is really, quite remarkable when you think about how they're approaching the market. Looking forward, when the market normalizes, I would expect coming out of this cycle that the part of the market that they're in will actually become more in demand. We anticipate that, you know, the growth will accelerate. What we're doing today with them is we are working with their existing sales force, which has been excellent before we acquired them to really integrate what they're doing into what we're doing and trying to expand out the offering. We also mentioned that we launched an ETF, the first ETF for WestEnd Advisors, and that will expand their offering to additional advisors and clients. We're really encouraged by the acquisition. It's turned out to be, you know, almost exactly as we anticipated. Got it. Thanks for that. Just a follow-up around the capital deployment. It's great to see you guys being active both on the debt repurchase side and stock buyback. I guess as you look forward, maybe help us understand the mix of debt repurchases and buybacks, given the environment obviously continues to be pretty volatile, you know, through year-end and maybe into early part of next year. To start, you know, our overall strategy around our capital deployment has not changed. We've always talked about, you know, making sure we have a balance sheet that is flexible, where we can do acquisitions. If we start there, you know, that is our primary goal. You know, from that, we've looked at what's happening in the market. It's always based on the current facts and circumstances, and we've always talked about being flexible and opportunistic. This past quarter, you know, we leaned into share repurchases. We still paid down a sizable amount of debt, but we leaned into share repurchases based on our opinion of where our stock is and what the value of our company is. We'll continue to really look at the current environment. I wouldn't go out and say that we are going to change and buy less shares this quarter. I wouldn't go out and say that we're going to buy more shares this quarter than we've bought. It's really going to be the current environment. We are always starting with, you know, we want to have a balance sheet where we can do acquisitions. We've been very successful growing the company through acquisitions and adding products and expanding our distribution. Really when you think about, you know, what we did this last quarter, it was really a product of where the market was and where we thought our stock price was. Got it. Thanks, Dave. Our next question comes from Craig Siegenthaler from Bank of America. Please go ahead. Your line is open. Good morning, David, Michael. Hope you're both doing well. Morning. How are you? I'm good. Fixed income continues to be a headwind for Victory and the industry. You know, I think we all know the backdrop is tough. I was looking for your perspective on 2023. Do you expect to see large industry reallocations back into fixed income next year when bond prices stop falling? Yields are higher. There's also attractive demographic factors. Within that, how do you view your broad fixed income suite in terms of being positioned for this theme? We do think in 2023 and when, you know, bond prices stop falling, we do think there's going to be a big shift back into fixed income from an industry perspective. We really like, as we said in the script, the way we're positioned. Our USAA Investments Fixed Income Group has excellent investment performance over the short and long term. It's a team that has scale. It's a team that manages a sizable amount of assets. When you go and look at the way some of our competitors have performed during this cycle, I think we've really stood out from an investment performance standpoint. We're really excited about when those assets come back into fixed income, that we're going to have a great opportunity to capture some of those. I tell our team all the time that without assets in motion, it's hard to gather new assets. There's going to be a lot of assets in motion. I think we're going to have a great opportunity to, you know, to call some of those assets and clients ours. Thanks, David. My second one is on M&A. Targets are cheaper today, both on a valuation and total price basis, but the cost to finance these deals has risen, and that may offset some or all of the valuation benefits. Combining both lower valuations but higher financing costs and sitting in your seat, do you see the M&A backdrop as better or worse for Victory right now versus last year? Does that mean on the margin, you're kind of more or less likely to do a transaction today? Well, last year was one of our busiest years. In 2021, we did three acquisitions, three really strategic acquisitions. It's tough to compare, you know, one environment to another environment. When I think about the current environment, as you said, financing costs are up. Certain, you know, properties are probably a little less expensive than maybe they would have been. We really start off with, does the acquisition make our company better? You know, we go from there around product set. We go from there around access to new clients. We're not dissuaded by the environment. We are having lots of conversations. You know, we have averaged about 1 per year, if you go back and look, to 2013. I think that average is probably gonna, when you look at it in a longer period, that average is gonna stay around one a year. I think that if we find something that fits what we're looking to do, we have the resources to do it. You know, I think coming out of this cycle from a big picture perspective, there's going to be a lot of opportunity, where I think a lot of the folks that are on the fence on selling will actually get on the fence of selling once the market normalizes. Thank you, Dave. Our next question comes from Kenneth Lee from RBC Capital. Please go ahead. Your line is open. Hi. Good morning, and thanks for taking my question. Just to piggyback that previous question, in terms of the M&A discussions you've been having, is it your sense that companies are more willing to talk in this current environment and get something done potentially, or potentially is there more patience just given the underlying market volatility there? Thank you. I think it depends on the situation. We've seen you know groups that wanna accelerate conversations, and we've had discussions that have slowed down. It really does depend on the situation. People are transacting. It has slowed down a little bit from when you look at the announcements. There are plenty of discussions happening, and I'd probably submit that there's more discussions now than there's really ever been. Whether those turn into eventual transactions, I guess we'll see. Again, I'll go back to what I said before, which is we've been pretty consistent. We've averaged about one transaction a year. I think, you know, when we look forward, you know, we have the resources today. We have a balance sheet today, and we have, I think, the experience to do a transaction if we find the right one. Gotcha. Very helpful there. One follow-up, if I may. You mentioned briefly about a potential expansion in the VictoryShares ETF business. Wondering if you could just further expand upon those comments. You know, what sorts of strategies do you expect to introduce over the near term? Thanks. Yeah. You know, we're really. If you look at our ETF franchise, VictoryShares, it's been a consistent grower. I think it's been 8 quarters in a row that it has grown. You know, the products are integrated into our distribution system. So we're really encouraged by, you know, the ETF structure. We launched the WestEnd Advisors. We are looking at other products to put through there and other investment strategies. I'd probably, you know, wait to launch those before we disclose those, but that's an area that we're looking to grow. I think when coming out of coming out of the cycle that we're in and going into the next cycle, I think ETFs will even be more in demand than they are today. Gotcha. Very helpful there. Thanks again. Our next question comes from Ken Worthington from JP Morgan. Please go ahead. Your line is open. Hi. Good morning, and thanks for taking my questions. I guess sort of simple ones. Mid-cap franchise generated positive net flows this quarter, sort of bucking the trend we're seeing in the broader industry. Which brands are sort of having the success there? We saw a big slowdown in alternatives. I assume that this is as simple as sort of energy falling from favor during the quarter, but I don't know, flesh out anything else there. Hey, Ken, it's Mike. On the midcap success that we've seen, it really has been off of the Sycamore Capital franchise and primarily in our institutional channel. That team has a long-standing excellent investment track record and a good, solid following from an investment perspective and institutional client perspective. We did see some wins and fundings in the midcap strategy that they have. On the alternative side, really that has been the market neutral income product that we've had, which really has had tremendous success throughout 2022 based on what that product delivers from a market perspective. We did see a bit of a slowdown Based on the environment of what that product delivers and how it performs in Q3. That has been, if you will, the slowdown from an alternatives perspective. Okay. Okay, great. Thank you very much. Mm-hmm. As a reminder, to ask a question, please press star followed by the number one. Our next question comes from Brennan Hawken from UBS. Please go ahead, your line is open. Morning. Thanks for taking my questions. The fee rate compressed a bit more than we were looking for, and it actually diverged from some of your asset management peers who saw more benign trends given the summer rally in risk assets. I know you ascribed it to mix in your prepared marks, but maybe you could give a little more color given that there was a divergence versus some of the other public asset managers? Sure. Hey, Brennan, it's Mike. Yeah, I think, you know, what we said in the script was it really is asset and vehicle mix. So when you look at where we've won business, you know, it's been institutional business which tends to have slightly lower fees than retail mutual fund business. We've also won business in our ETF lineup as well, which again just tends to have slightly lower fees from an overall perspective. So I think as we looked at the quarter-over-quarter decline in fees, you know, that really wasn't something that, you know, was outside of the range of our expectations. You know, further, you know, we did highlight that we did see an increase in fulcrum fees in some of our products. It actually was the first quarter where we had positive impact of the fulcrum fees on some of the USAA mutual funds since we've acquired them. Which is really a testament to the strong investment performance that we've seen in those products since we've taken over the management of those. You know, with all that said, I think it's case by case on the margins that we have, which is really our focus. The fee rate, very important. Again, we look at it from a margin perspective. Having a 50% margin quarter for us with a slight decay in the revenue realization is kind of a testament to the overall business. Yeah. It's David. I would add one point maybe with an exclamation point. Most of those asset management peers' margins eroded pretty heavily. Whereas our margins expanded this quarter. I think it just shows you where we're focused, which is, you know, we do look at the fee rate, but first and foremost, we're thinking about every product we have has to meet our margin requirements. Oh, sure. Yeah, your expense flexibility certainly was clear in the results, and I wasn't trying to suggest that anything about that in my question. Thanks for that color. That's helpful. The buybacks were really great. You guys spent some time covering that and your dedication to capital return. When we think about it from a signaling perspective, should we read into that, you know, if the M&A opportunity is maybe not as robust given some of the volatility, some of the movements in financing costs and whatnot? While you guys have an ability to be creative in structuring and everything, you know, there might not be. The pitches might not be quite so fat, you know, so to speak. When that's the environment, you guys are gonna return capital more from a buyback perspective than seeking the inorganic. Am I reading too much into it or is that fair? No, I would actually say it this way that, you know, our buyback, our lean into our buybacks probably came at the expense of paying down some additional debt. When we looked at the, you know, debt pay down versus buying back our stock, we thought given the current trading levels and given what we think the value of the company is, that it made a lot of sense to buy back our stocks. I would not read into that buying back stock came at the expense or it indicates that we don't think that the M&A environment is fertile because we do. As I said in my prepared remarks, we're just patient. You know, I think while we are waiting, we are looking at how do we deploy our capital, paying down debt, buying back stock, and we're making those decisions really on a very real-time basis, based on the, you know, current facts and circumstances. That's all fair. Thanks for that color. We have no further questions. This will conclude today's conference call. Thank you for your participation. You may now disconnect.