Good morning, and welcome to the Victory Capital third 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. 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 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 earnings 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, Matt. Good morning, and welcome to Victory Capital's third quarter 2023 earnings conference call. I'm joined today by Michael Policarpo, our President, Chief Financial Officer, and Chief 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 third 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 reported strong financial results for the third quarter. Revenue, including adjusted EBITDA, earnings and margin, net income, and earnings per diluted share, all rose sequentially from the second quarter, and we achieved the highest levels for each of those metrics thus far in calendar year 2023. Our margins remain robust, with Adjusted EBITDA margin coming in at 51.1% this quarter, which underscores the strength of our operating platform in all market environments. This was the thirteenth quarter in a row that we achieved margins above our long-term guidance of 49%, and it was the ninth quarter over that period that we reported margins of 50% or higher. Adjusted Net Income with tax benefit rose to $1.18 per diluted share in the quarter, a 6% increase over the $1.11 per diluted share that we reported last quarter. Long-term net flows improved from the second quarter, with outflows declining to $1.7 billion in the third quarter. I would also note that our gross redemptions are the lowest that they have been in the past eight quarters. Although we are in an environment where many investors have chosen to either invest in cash and cash equivalents or to pause allocations, we are seeing some significant green shoots with several of our investment franchises. One franchise I would like to call out is WestEnd Advisors, which continues to see positive net flows and significant distribution expansion from a platform and advisor perspective. We made the decision to build up cash during the quarter to enhance our financial flexibility and ensure we have the means to execute on our capital allocation strategy, specifically the inorganic aspect of it. As announced in our latest AUM press release in September, we consolidated the former fixed income franchise, INCORE, under the Victory Income Investors brand, which is also a fixed income franchise. In conjunction with this consolidation, we sold a number of unique accounts totaling approximately $1.3 billion that were not scalable on our platform. We did retain a majority of the investment strategies and all the investment professionals associated with the management of the strategies that transferred under the Victory Income Investors franchise. Lastly, as we stated in our earnings release, there will not be any material financial impact from these actions. Consistent with our ongoing growth initiatives, we continue to strategically invest in our platform in several areas. These include product development, enhancing capabilities for our direct investor channel, technology, automation, artificial intelligence, digital marketing, as well as our use of data to make our platform even more competitive and efficient. Turning to slide seven, you can see that our investment performance remains very strong. At quarter end, 40 of our mutual funds and ETFs had 4-star or 5-star overall ratings from Morningstar. These products account for more than 2/3 of our AUM in mutual funds and ETFs. Additionally, more than 80% of our total AUM outperformed benchmarks for the five-year measurement period, ending September 30th. One standout in the quarter was our WestEnd Advisors investment franchise. Through quarter end, 98% of WestEnd's AUM was outperforming respective benchmarks over the five-year period. This bodes well for accelerating the already positive net flow momentum at WestEnd that I mentioned earlier. With the trillions of dollars that is currently invested in cash and cash equivalents...... We are exceptionally well positioned in anticipation of investors eventually re-risking portfolios when there is more visibility around the direction of interest rates, as well as economic and geopolitical conditions, given the investment performance in our fixed income products and our distribution positioning. Moreover, our suite of equity offerings continues to perform very well, and our distribution positioning within our different channels is as strong as ever. Turning to Slide eight. We continued to generate robust excess free cash flow in the third quarter. Subsequent to quarter end, we also monetized our floating-to-fixed Swap that generated $43 million in cash, and produced a gain that is now locked in. Converting the swap into cash only adds to our financial flexibility, and we see real benefit to flexibility at this point in the cycle. We are continuing to have numerous discussions around inorganic opportunities. As I have said many times, exact timing is difficult to predict, but I do believe that the opportunities that are presenting themselves in this environment are quite attractive, becoming more plentiful and executable. With that in mind, we remain patient, disciplined, and selective as we evaluate opportunities with the end goal of enhancing long-term shareholder value. With that, I will turn the call over to Mike to go through the quarter's financial results in greater detail. Thanks, Dave, and good morning, everyone. The financial results review begins on slide 10. Assets under management at quarter end were $153.5 billion. Average assets under management rose 2.4% in the third quarter compared with the second quarter. Our fee rate was steady at 51.6 basis points. Revenue of $209.7 million in the third quarter was up 2.7% compared to the second quarter. The higher revenue benefited from the higher average AUM, as well as one extra day in the quarter. GAAP operating income was $80 million, and our adjusted EBITDA rose to $107.2 million, as adjusted EBITDA margin expanded 20 basis points to 51.1% in the third quarter. Quarterly net income was $52 million, or $0.77 per diluted share on a GAAP basis. Adjusted net income with tax benefit rose quarter-over-quarter to $79.8 million, or $1.18 per diluted share, up 6% from the second quarter. Dave already covered accumulating cash to enhance our flexibility and strengthen the balance sheet during the quarter. This accumulation resulted in cash increasing to $108 million at quarter end. Further to this point, in October, we monetized our floating-to-fixed interest rate swap, locking in the gain on that arrangement, which generated $43 million in cash. From an accounting standpoint, the gain will be realized on a straight-line basis as a decrease in interest expense through the end of the swap's term in July 2026. Our net debt to Adjusted EBITDA ratio improved to 2.1x at the end of September, reflecting the growth in Adjusted EBITDA and our lower net debt. We returned $21 million to shareholders in the quarter in the form of cash dividends, and another $7 million with share repurchases. Our board of directors declared another quarterly cash dividend of $0.32 per share. This next dividend will be payable on December 2nd to shareholders of record on December eleventh. On slide 11, you can see the steady increase in the total AUM in the first half reversed in the third quarter. This was driven primarily by negative market action, which reduced AUM by $4.9 billion in the period. Our AUM remains well-diversified from a distribution channel and from a client perspective within each channel. We're also becoming more diversified from a vehicle perspective, with ETFs and separately managed accounts, including model delivery, now representing more than a third of our total AUM. Turning to slide 12. Long-term gross flows were $5.3 billion in the quarter, and net long-term flows were -$1.7 billion. Gross redemptions improved to their lowest level in two years. We are not immune to the current industry landscape, with muted gross sales reflecting investors being content to hold cash in this environment as they delay allocations to longer-term and higher-risk asset classes. Several franchises had positive net flows in the third quarter, including New Energy Capital, RS Global, Trivalent, and WestEnd. WestEnd's investment and business performance has been very strong, and we are beginning to realize the vision of growth for the platform we had when we made the acquisition. Another franchise worth noting is RS Global, which has been net flow positive for 10 consecutive quarters. Their overall five-star rated RS Global Fund, ticker RSGGX, ranked in the top decile according to Morningstar for the trailing one, five, and 10-year periods as of September thirtieth, and has outperformed benchmarks as well over those same periods. Slide 13 illustrates revenue by quarter…. You can see the close correlation between revenues and average assets under management, which resulted in the highest level of quarterly revenue achieved in the past year. Our fee rates decreased slightly in the third quarter. As you may recall, the fee rate realization recorded in the second quarter was the highest in the year. In general, our investment management fees have remained steady, and asset class, client, and vehicle mix are the primary drivers of quarterly fee rate variations. On Slide 14, we break out our expenses for the quarter. GAAP operating expenses rose in the quarter, primarily due to a significant increase in quarter-over-quarter non-cash charge related to the net present value of contingent consideration for prior acquisitions. This rose to $10.3 million, up from $1.5 million in the second quarter. Additionally, some of the increase is related to our variable cost structure and was due to the higher average AUM and revenue reflected in higher asset-based expenses, such as broker-dealer and platform fees, fund administration, and middle office expenses. Cash compensation as a percentage of revenue held constant at 23.7% for the third quarter. Finally, G&A expenses rose slightly due to the timing of our ongoing investments to support growth. Moving on to our non-GAAP results on Slide 15. Adjusted net income rose to $70.3 million in the quarter, which was the highest level in the past four quarters. The cash tax benefit in the quarter was unchanged at $9.5 million, resulting in ANI with tax benefit growing to $79.8 million, or $1.18 per diluted share. Our adjusted EBITDA margin expanded 20 basis points to 51.1% in the third quarter. We achieved steady growth in adjusted earnings per share over the past year, which, including our cash tax benefit, rose 12% from the level achieved in the final quarter of 2022. Looking forward, we are maintaining our long-term margin guidance of 49%, which is inclusive of the continued investments in numerous areas to support our future growth. Finally, turning to Slide 16, we did not pay down any debt in the first three quarters of this year. However, our net leverage ratio improved to 2.1x a t the end of September, reflecting the higher cash balance on our balance sheet and higher earnings. The average interest rate paid on our debt increased 18 basis points to 5.6% in the quarter. This was the smallest quarter-over-quarter interest rate increase in the past year and a half. Our $100 million revolver remains undrawn, and GAAP operating cash flow was $91.6 million in the third quarter. That concludes our prepared remarks. I will now turn it back over to the operator for questions. Thank you. If you have a question, please press star one on your telephone keypad. If you wish to remove yourself from the queue, simply press star one again. One moment please, for your first question. Your first question comes from the line of Craig Siegenthaler of Bank of America. Your line is open. Good morning, Dave, Mike. Hope everyone's doing well. My first one is on M&A. So with $140 million of cash on hand today after the floating-to-fixed swap monetization, can you update us on the M&A pipeline? And are you holding more meetings with prospects today than six months ago? And any commentary on valuation multiples would be helpful too. Thank you. Good morning, Craig. First, let me start off on the pipeline. The pipeline for the last year or so has been pretty full, and we've been having, you know, lots of meetings. I wouldn't say that the meetings have increased. What I would say is, and I said this in our prepared remarks, that I feel like the ability to execute has gotten a lot better. And really, us monetizing our hedge and us building cash is a reflection of where we think we are in the cycle and how close we are to potentially doing a transaction. That being said, nothing is imminent, and we also look at our capital strategy very opportunistically. And so we had historically, at least this year, bought a lot of shares back, and continue to pay a dividend. I wouldn't say that we wouldn't be buying shares back going forward, but we want to make sure that we have a balance sheet that's flexible to execute in a really timely manner. Thanks, Dave. Just as my follow-up on the SMA and other flows of $440 million in the quarter. Within the $440 million, I was wondering if you have the mix or could provide some color between trusts, wraps, UMA, UCITS, any other vehicles that I may be missing, because that's been a nice growth engine for you guys. And then within those sort of sub-buckets, which one do you expect to be the biggest flow contributor in 2024? Yeah, it's all primarily WestEnd Advisors franchise. Really, that is when we bought—we purchased that business, our thesis really was, is that we thought that the model business within the large platforms in the industry that was going to increase and that they were well-positioned, and that's happened. So primarily where we think, you know, going forward is we think it's all going to be on the model side. Dave, thank you. Your next question comes from the line of Etienne Ricard of BMO Capital Markets. Your line is open. Thank you and good morning. Lots of discussion on the potential to return to positive net flows and fixed income across the industry. In this environment, how do you think about promoting your fixed income strategies, both across the direct and retail channels? So over the last few years, we have really spent the time to build out our distribution channels for the Victory Income Investors franchise. And, you know, where we've spent the time, you know, from a marketing, from gaining access to different platforms and really shoring up the platform. And, you know, as we said in our prepared remarks, we did consolidate the Incore franchise into, at least from a brand perspective, into the Victory Income Investors franchise. And we think having one brand, the scalability of that brand, and really consolidating all of our efforts under that brand will really help us when some of these investors come off the sidelines and get out of cash or decide to allocate to back to traditional fixed income. I'd also add, you know, one of the best ways to prepare for it is to have really, really good investment performance. And if you were to look at the Victory Income Investors franchise and look at our performance, it's excellent across the board, and I think that's really the best preparation for it. Okay. And just to circle back on M&A, can you give us a sense of the potential size of transactions you're looking at? And would you be willing to maybe close multiple transactions in a relatively short period of time, or would you prefer to stick to your historical one transaction per year track record? We really have— If you go back and look historically, we have done large transactions, I'd say medium-size and small. And we've always said that, you know, because we've built such a great platform, we have the benefit of looking at multiple sized transactions, and that's how we look at it. Where the transactions have really impacted us have been on the larger side and also on the smaller side. You know, historically, if you go back years ago, you know, the beginning of our ETF business was a very small acquisition, which has grown nicely, you know, over the last eight years. You know, from a how many we have had where we've done three. I think at the end of 2021 into 2022, we closed 3.25, or at least, you know, in the back half of the year. And then we've had situations where we have done one, and then it's been a few years in between. I'm not in a position to say how quickly, what the size would be, and how many in a year. We're really looking at it on an opportunistic basis. Great. Thank you very much. Your next question comes from the line of Adam Beatty of UBS. Your line is open. Thank you, and good morning. Just to follow up on M&A, not to harp on it too much, but Dave used the word executable a couple of times, and, you know, potential interpretation of that is maybe, you know, tighter sort of bid-ask spread, sellers kind of getting more realistic on valuation. But those are my words. So I'm just curious, you know, probably no one out there executes M&A in the asset manager space as well as Victory. So, you know, just curious what you meant by more executable at this stage in the cycle. Thanks. I think you summed it up nicely. I do think that the bid and the ask spread has tightened, and I think buyers and sellers are much more realistic of what valuation is and potentially being open to structuring. And so my, you know, my word of executable is really in reference to that. Excellent. Thank you. I appreciate it. Just turning to small and mid-cap equities. You guys have significant scale there, good view on the market. Just wondering, you know, how you see the climate right now for small and mid-cap investing, and the outlook given, you know, some of the recent Fed moves or non-moves. Thanks. So generally speaking, there is a lot of investor dollars sitting in cash and cash equivalents. I think there's over $7 trillion in money markets. And so a lot of investors have decided, at least at this point in the cycle, to go to cash to get the higher return. I do believe, going forward, that a lot of those dollars will leave the money market asset class and be either put into fixed income or into higher risk-type assets, including U.S. small cap, including U.S. mid cap. I also think that, you know, the if you go and look at the small and mid-cap industries, they have not performed up to where the overall market has. So I think that they look like very good potential investments with good returns. We happen to have multiple franchises in U.S. small cap and mid cap, and really feel like we're well positioned there. And I think when the reallocation occurs, some of those assets will fall into those asset classes, and we'll be able to gather some of those assets. So we're pretty excited about that opportunity. Excellent. Thank you very much. ... Your next question comes from the line of Kenneth Lee of RBC Capital Markets. Your line is open. Thank you. My question, just to round out the discussion on M&A, what's your view? Do you view the cost of financing as a potential challenge in the environment for potential M&A there? Thanks. You know, I'd start off by saying that when we think of financing, we really think of all the tools that we have, where you have our cash generation, we have the ability to structure. Of course, we can go to the debt markets. And we have, I think, over the past, really done a nice job on being creative on how we structure the transactions. The financing costs are up, obviously, over the last year and a half, but for us, and the way we execute the transactions and the way we look at the transaction, it isn't a hurdle for us, to you know the cost of financing. As we said, we did accumulate cash this quarter, which is the benefit of having a platform that generates a lot of free excess cash flow. And then we also monetized our hedge. And then, you know, as we look forward, we'll balance out, if we do a transaction, how to go about that. But I don't feel, at least for us, the financing costs are going to be a hurdle to executing a transaction. Great, very helpful there. And just one follow-up, if I may. Sounds like New Energy Capital had some positive long-term net flows in the quarter. Wondering if you could just give us an update or your latest outlook in terms of organic potential organic growth in that franchise going forward. Thanks. Hey, Ken. Yeah, we did mention they had positive flows in the third quarter. They also had positive flows in the second quarter. I think our thesis around the acquisition of New Energy Capital continues to hold. You know, we're bullish about the product set that they have in kind of the private markets with respect to kind of the renewable energy space. Fundraising in the private side in 2023, I think from an industry perspective, has been challenging. However, we're pleased with the progress that we've made to date, and we're excited about the opportunity as we look out. We think what they do is unique, and they have a great opportunity to continue to see growth as we move forward. That really was the thesis for us as we did the acquisition. We're excited about the opportunities that sit in front of us, and as the industry kind of continues to loosen with respect to private asset raising, we'll participate well there. Great. Very helpful there. Thanks again. Your next question comes from the line of Mike Brown of KBW. Your line is open. Great. Thank you for taking my questions. So, I wanted to ask about WestEnd here. The growth continues to be really strong there. Can you just give us an update how many platforms that franchise is on today, and just maybe expand on some of the recent growth trends there and the potential going forward? Do you still see some more room to ramp on the current platforms? And is there potential to get added on more platforms for WestEnd? Yeah, the platforms that they were currently on when we purchased them, we have been able to go deeper onto those platforms. So we're today we're doing business with a significantly higher number of advisors than they were doing when they were independent. We've expanded the number of platforms that they're on. So not only deepening the relationships with the platforms, but actually expanding the number of platforms. And then, you know, we've also expanded out the product set. We launched an ETF, the ticker symbol MODL, which now allows the sales people to offer not just the models, but also an ETF, managed by WestEnd. And so there is a tremendous amount of growth from an opportunity standpoint for that franchise. If you think about the current environment that we're in and we've owned that business, you know, at the end of this year, it'll be coming up on two years. To have that platform or that franchise be net flow positive in every time period and since inception, you know, since we've purchased them, is really remarkable and just tells you what the opportunity is for that platform. And again, that was the thesis of the transaction was taking a tremendous franchise that has a great culture and great investment performance and really good distribution, and just making it better and scaling it. And you, I think that, you know, we're well positioned, again, when some of these assets move out of cash, to really go out and grow. We also have a desire to expand out the product set there as well, which will only add to the upside opportunity. Great, thanks. And then, Michael, maybe just a quick modeling one for me. Following the monetization of the hedge, what, what is the right jumping off point for that interest expense now with the, with the impact of the, the gain that'll come through? Yeah, I think the simple way to look at it is we're really locked in at the kind of Q3 rate. So I think we mentioned about 5.6% is the kind of combined interest rate, going forward, based on current rates. Okay, great. That's it for me. Thank you. ... Again, if you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Ken Worthington of JP Morgan. Your line is open. Hello, good morning. This is, Michael Chuan for Ken. Thanks for, thanks for taking my question, Dave and Mike. My, my first one, I'm just gonna go ahead and ask a cash question as well. But just in, you, you know, you talked about, M&A and, and investments. I guess, just, just in the event things don't come into fruition near term, I guess, how, how long are you comfortable holding an elevated level of cash? I would say that we are gonna look at our cash levels very opportunistically. It'll be based on the facts and circumstances. We have pivoted quickly to different strategies. We at one period in our history paid down debt very aggressively and then pivoted to buyback by buying back our shares. And I would imagine going forward, depending on what's happening at the time, we'll be very opportunistic. We have the flexibility to do that. We still have over $50 million from our authorization from the board on our buyback program that we can utilize. And then, you know, but we're gonna take it really as we always have with the current facts and circumstances. Okay, perfect. Thank you. And then just, just switching gears, just on, on GNA, I think it called out, just kind of slightly elevated in the quarter for particular organic investment opportunity. I'm just curious, what was that organic opportunity that drove the quarter? And then I think you listed a number of organic investment areas as you do, you know, every quarter. But I'm not sure I heard AI before, so just curious what you're also doing in AI as well. Thank you. Yeah. Thanks, Mike. Yeah, there really is no one significant investment that we made in the quarter. I think we've always said the timing of the investments that we're making really will ebb and flow. So the increase in G&A that you saw was really just a timing aspect. Where we are investing in the business is really around kind of our data and analytics, product development, digital marketing. We're continuing to invest in our direct investor channel. Those are the areas that we continue to invest in, and any elevation or changes you see quarter-over-quarter is really just timing with respect to that. With respect to AI, you know, I think we've talked a little bit about, you know, some of the investments that we've made in data and analytics for our retail and intermediary distribution team. You know, we've invested in some proprietary databases that are really making them more effective in the field and utilizing the data that we're capturing from the market, from certain dealers. So that's the reference that, you know, we're using from an AI perspective. It's really to support our distribution efforts, as well as supporting the investment franchises, you know, just with providing them more information and more data. Yeah. And I... It's Dave. I'd like to add one thing is, you know, our platform is so unique, which I think you can see from the margins and how we've performed in a really tough industry environment, and having guidance at 49%. But one of the things that that we think is pretty unique is our investments and the dollars that we invest, you know, I think are as efficient as anybody in the industry, given our the way we're structured in our platform and how we're scaled at the size we're at. And these investments we're making are very applicable to multiple distribution channels, to multiple parts of our business. Our platform isn't complex, and, you know, our margins this quarter are 51.1%. And I went through the statistics of, you know, 13 straight quarters above, you know, 49, nine of them, you know, 50% or more. I just think that we have a really unique platform with, with, with a great group of employees executing it with a great culture. So when we think about investing, we love to invest. There's lots of places to invest. We're just getting a lot of bang for our buck, if you will. Perfect. Thanks, guys. There are no further questions at this time. I will now turn the call over to David Brown for closing remarks. Thank you, and thanks for your interest in Victory Capital. Next month, we'll be attending the Goldman Sachs Financial Services Conference in New York City, which is on December sixth, and I look forward to seeing some of you there. Have a great day, and thank you. This concludes today's conference call. You may now disconnect.