Good morning. My name is DeeDee, and I will be your conference Operator today. I would like to welcome everyone to the Virtus Investment Partners Quarterly Conference Call. The slide presentation for this call is available in the Investor Relations section of the Virtus website, www.virtus.com. This call is being recorded and will be available for replay on the Virtus website. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer period, and instructions will follow at that time. I will now turn the conference to your host, Sean Rourke. Thank you, DeeDee, and good morning, everyone. On behalf of Virtus Investment Partners, I would like to welcome you to the discussion of our operating and financial results for the fourth quarter of 2023. Our speakers today are George Aylward, President and CEO, and Mike Angerthal, Chief Financial Officer. Following their prepared remarks, we'll have a Q&A period. Before we begin, please note the disclosures on page two of the slide presentation. Certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and as such, are subject to known and unknown risks and uncertainties, including, but not limited to, those factors set forth in today's news release and discussed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those discussed in the statements. In addition to results presented on a GAAP basis, we use certain non-GAAP measures to evaluate our financial results. Our non-GAAP financial measures are not substitutes for the GAAP financial results and should be read in conjunction with them. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's news release and financial supplement, which are available on our website. Now I'd like to turn the call over to George. George? Thank you, Sean. Good morning, everyone. I'll start with an overview of the results we reported this morning before turning it over to Mike to provide some more detail. Though still volatile, markets trended more favorably in the fourth quarter on views of inflation and interest rate expectations, leading to an increase in Assets Under Management. While we had net outflows driven by open-end funds, consistent with the industry, as well as specific institutional accounts, we also had strong retail sales, including the highest retail separate account sales in two years; positive net flows in retail separate accounts and ETFs, each of which had an organic growth for the full year; lower total operating expenses for the quarter, with other operating expenses essentially flat for the full year; increased return on capital, including $20 million of share buybacks; attractive investment performance across strategies, both long term and for the one-year period; and repayment of debt, ending the quarter with low net leverage and a well-positioned balance sheet. Turning now to a review of the Assets Under Management increased 6% to $172 billion, primarily due to favorable market impact in addition to positive net flows in retail separate accounts. Sales increased 7% to $6.2 billion due to a 12% increase in retail sales, with particularly strong growth in retail separate accounts, which grew 15%, led by private client. Open-end fund sales increased 9%, with sequentially higher sales of domestic equity, fixed income, and alternative strategies. Net outflows were $3.8 billion and compared with net outflows of $1.5 billion last quarter. So by product, institutional had net outflows of $2.2 billion, compared with net outflows of $0.4 billion last quarter, and included redemptions related to repositioning by several retirement plan mandates. The institutional business is inherently variable on a quarterly basis, but has generated organic growth in three of the last four years, with contributions across affiliates, strategies, and geographies. Retail separate accounts generated positive net flows of $0.4 billion and were positive for the full year. As we previously said, we continue to see retail separate accounts as a key growth area as we expand offerings with additional strategies to complement our strength in small, SMID, and mid-cap equities. Open-end net outflows of $2 billion, compared with $1.5 billion in the third quarter, due to a higher level of redemptions across strategies, though mid-cap and global equities continued to generate organic growth. ETFs again generated positive net flows and for the full year, delivered 14% organic growth as we've continued to broaden the product lineup with additional distinctive active strategies. In terms of what we saw in January for flows, retail and institutional net flows were each improved meaningfully. On the retail side, while it was just one month, January was the best month for net flows in open-end funds since September of 2021, with net outflows of approximately $150 million. That represents less than 25% of the average monthly net outflow in the fourth quarter, with improvement across asset classes, including break-even net flows in domestic equity and positive net flows in alternatives. I would also note that earlier this week, we reopened two capacity-constrained small cap strategies that have been closed since 2018 and have already seen a meaningful level of interest for them. For institutional, we had a large funding early in January that had been delayed from the fourth quarter. All else being equal, institutional is generally trending towards flat net flows for the first quarter based on known and expected upcoming funding and redemption activity. This business can fluctuate in the short term, and we have seen a more prolonged funding cycle. However, the pipeline continues to be strong in terms of size and with broad representation across affiliates, strategies, and geographies.... Our fourth quarter financial results reflected lower average AUM, largely due to the timing of market performance and net outflows, partially offset by lower total operating expenses. The operating margin was 33%, down sequentially from 33.9, due to lower investment management fees, and was up 120 basis points from the prior year period. Earnings per share as adjusted of $6.11, compared with $6.21 in the prior quarter, and were up 18% from $5.17 in the fourth quarter of 2022. Turning now to capital. During the quarter, we continued to take a balanced approach to capital management. We repurchased approximately 98,000 shares for $20 million, up from $15 million in the prior quarter. For the full year, we repurchased approximately 224,000 shares and reduced outstanding shares by 1%. In 2023, we increased our quarterly dividend by 15%, our sixth consecutive annual increase in our dividend. We also repaid the remaining $20 million outstanding on our revolving credit facility and ended the quarter in modest net debt position and gross debt below 1x EBITDA. We continue to generate significant cash flow, providing ongoing opportunities to invest in the growth of the business and return capital to shareholders. With that, I'll turn the call over to Mike. Mike? Thank you, George. Good to be with you all this morning. Starting with our results on Assets Under Management were $172.3 billion, up 6% from $162.5 billion at September 30th, due to $14.3 billion of favorable market performance, partially offset by net outflows of $3.8 Assets Under Management in the quarter decreased 3% to $162.7 billion, with ending assets 6% above the quarter's Assets Under Management represented a broad range of products and asset classes. Institutional, our largest product category, was 37% of AUM. Retail separate accounts has delivered consistent organic growth and is at 25% of assets, up from 16% five years ago. We also remained well-diversified among and within asset classes. Alternatives and multi-asset, in which we had limited presence several years ago, totaled over 20% of our AUM, reflecting the results of our strategic efforts to expand capabilities, particularly in less correlated strategies. In addition, on a geographic basis, non-U.S. clients were 18% of AUM and generated 10% organic growth in 2023. We also continued to have compelling long-term relative investment performance across products and strategies. As of December 31st, approximately 69% of institutional assets, 86% of retail separate account assets, and 62% of rated mutual fund assets were outperforming their benchmarks over five years. For mutual funds, 71% outperformed the median of their peer groups over the five-year period. In addition, 69% of rated fund assets had four or five stars, and 90% were in three, four, or five-star funds. We had 38 funds that were rated four or five stars, including 11 with AUM of $1 billion or more. I would also note that our managers performed well for the full year 2023, with 58% and 90% of institutional and separate accounts AUM, respectively, beating benchmarks for the period, while 55% of mutual fund AUM beat benchmarks and 70% outperformed the median performance of a peer group. Turning to slide eight, Asset Flows. Total sales of $6.2 billion increased 7% from $5.8 billion due to growth in both retail separate accounts and open-end funds. By product, institutional sales of $1.2 billion compared with $1.3 billion in the prior quarter, which included the issuance of a $300 million CLO. Retail separate account sales of $2.1 billion increased 15% from $1.8 billion, led by meaningful growth in private client sales. Open-end fund sales of $2.9 billion increased 9% from $2.7 billion, primarily due to higher sales in mid-cap, mid-cap, and bank loan strategies. Total net outflows were $3.8 billion, which compared with $1.5 billion of net outflows in the prior quarter. Reviewing by product, institutional net outflows of $2.2 billion included approximately $1 billion of redemptions from several long-standing retirement plan mandates. These accounts, each of which were in different investment strategies, repositioned their risk allocation due to the plan's level of funding. As always, institutional flows will fluctuate depending on the timing of client actions.... In retail separate accounts, positive net flows of $0.4 billion increased from $0.3 billion in the prior quarter, and both intermediary sold and private client continued to generate positive net flows. For the full year, retail separate accounts generated 2% organic growth. For open-end funds, net outflows were $2 billion, compared with $1.5 billion in the third quarter, due to higher redemptions across strategies. In retail funds, both SMID-Cap and Global Equity continued to generate positive net flows. ETFs were again positive, and on a full year basis, generated 15% organic growth. Global funds were essentially breakeven for the quarter, with 9% organic growth for the full year. Turning to slide nine, investment management fees as adjusted of $174.4 million decreased $2.9 million or 2%, reflecting the sequential decline Assets Under Management, partially offset by higher performance fees, which were $3.3 million, up from $0.6 million last quarter. For the full year, performance fees were $4.5 million, which compared with $1.8 million in the prior year and $2.6 million in 2021. Based on our institutional accounts with performance-based fee structures, which are highly dependent on those strategies' investment performance relative to benchmarks, we would expect performance fees to be in a range of $3 million-$5 million per year. The average fee rate of 42.6 basis points increased from 42 basis points in the prior quarter and included 0.8 basis points from the performance fees. Excluding performance fees from both periods, the average fee rate was flat at 41.8 basis points. Looking ahead, we continue to expect the average fee rate to be toward the low end of our 42-44 basis point range, which is modestly above the normalized fourth quarter level. As always, the fee rate will be impacted by markets and the mix of assets. Slide 10 shows the five quarter trend in employment expenses. Total employment expenses as adjusted of $96.7 million decreased 2% sequentially, primarily reflecting lower variable incentive compensation. As a percentage of revenues, employment expenses were 50%, relatively unchanged from 50.1% last quarter. Looking ahead, it would be reasonable to anticipate employment expenses to continue to be in a range of 49%-51% of revenues. As always, it will be variable based on market performance, in particular, as well as profits and sales. For modeling purposes, the first quarter will also include seasonal employment expenses, which are incremental to this outlook. Turning to slide 11, other operating expenses as adjusted were $31.2 million, up $1.1 million or 3% from the third quarter. The sequential increase largely reflected higher travel and related activity, as well as the impact of increases in market data costs. I would note that on a full year basis, other operating expenses of $122.8 million were essentially flat with the prior year, even with the addition of a new affiliate in April. Looking ahead, the quarterly range of $30 million-$32 million for other operating expenses as adjusted, remains reasonable. Slide 12 illustrates the trend in earnings. Operating income as adjusted of $63.9 million decreased by $3.1 million or 5% sequentially, due to the Assets Under Management, partially offset by lower total operating expenses. The operating margin as adjusted of 33%, compared with 33.9% in the third quarter. With respect to non-operating items, other income as adjusted increased by $0.5 million, reflecting higher earnings on equity method investments. Total net interest income decreased modestly from the prior quarter, which included a higher level of CLO interest income from a recent issuance and reflected lower gross debt. Net income as adjusted of $6.11 per diluted share, declined 2% from $6.21 in the third quarter. In terms of GAAP results, net income per share of $4.21, compared with $4.19 per share in the third quarter, and included $0.71 expense for fair value adjustments to affiliate non-controlling interests, $0.36 of CLO issuance expenses, $0.18 of acquisition and integration costs, and $0.13 of fair value adjustments to contingent consideration, partially offset by $0.35 of realized and unrealized gains on investments. Slide 13 shows the trend of our capital, liquidity, and select balance sheet items.... We ended 2023 with appropriate levels of working capital and modest leverage, providing meaningful financial flexibility to invest in the business, return capital and repay debt. During the quarter, we repaid the remaining $20 million balance on our revolving credit facility and ended the year with net debt of $19 million, representing net leverage of 0.1x EBITDA. We also repurchased 97,952 shares during the quarter for $20 million, up from $15 million in the prior quarter. For the full year 2023, we repurchased 223,807 shares for $45 million and reduced the share count by 1.3%. I would also note, as a reminder, that our intangible assets continue to provide a cash tax benefit. At current tax rates, we estimate the tax attributes could provide a cash tax benefit of approximately $19 million per year over the next 10 years. And with that, let me turn the call back over to George. George? Thanks, Mike. Okay, so we'll now take your questions. DeeDee, would you open up the lines, please? Certainly. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. One moment for our first question. Our first question comes from Crispin Love of Piper Sandler. Thanks, good morning, everyone. Appreciate you taking my questions. Just first on the institutional flow side, you mentioned that the outflows in the quarter were driven by some of the repositioning by some of the large retirement plan mandates. Can you just provide a little more detail there? I heard some of the more constructive color on January in the first quarter. But is repositioning of retirement mandates something that you'd expect to see more of in 2024 through the year? Or can just the institutional flows here just be lumpy based on the quarter and could trend closer to more recent levels? Okay. Yeah, a couple comments, and then Mike can add to that. So, you know, every retirement plan, pension plan has, you know, different attributes and is at different points in terms of funding cycles, right? So again, I think, you know, what was unusual for us is to have multiple plans, each with different clients, different strategies, you know, reaching a level of funding. And given the strength of the ending of the market year, it's not unusual to then, for a plan or any client actually, to kind of reposition their risk profile and kind of lock in where they are in terms of funding. So it was unusual to have that number of different clients from different regions and different areas do it at the same time. So again, you would normally see over the life cycle, depending on how markets are doing, when you're talking specifically about pension plans or retirement plans, as they achieve certain of their funding requirements or if they achieve full funding, you know, they're gonna immediately, they should immediately, you know, lock in whatever those returns are. The general business institutional is variable in nature because the other thing that we would normally see, and I wouldn't be surprised if it emerges more this year, is even if you're not in a retirement plan and you're not locking in funding, you're changing your outlooks for going forward, right? So plans that might be overweight fixed income may decide to take more risk spectrum on the equity side. That creates opportunities or vice versa. So it'll be very related to individual. Mike, any other color on the retirement plans themselves? No, I think you touched on it. I think from our perspective, you know, those redemption levels were sort of at the fee rate of our blended fee rate. So, you know, nothing unusual other than for multiple plans to all rebalance in this relatively short period of time. Which is not unusual, thinking of kind of what happened at the end of the year in the markets, right? So, you know, you were in that environment where there was a nice pop in equities, so. Okay, great. And then, just Michael, just on the institutional fee rate, increased by about 3 basis points in the quarter and is at a higher level than we've seen for several quarters. Is that mix of assets or, or anything to call out there, or does that have anything to do with the redemptions? No, you know, the performance fees in the quarter were $3.3 million, which ticked up a bit and really was driven by institutional accounts. So we try to normalize that in our disclosures. And looking ahead, I think 42-44 for our blended fee rate remains appropriate for modeling, as we go forward. So, you know, looking at the adjusted fee rate on a normalized basis is a good way to think about it going forward. Yeah, so we disclose the impact of the performance fees on the institutional, so it's always good to look at it with and without, to kind of look at the trend of the underlying accounts. Perfect, that makes sense. And then just one last question for me. Just on the non-controlling interest on the adjusted income statement, the dollar value here was at the lowest level for a few years. Can you discuss kind of why that was the case in the quarter and just some of the adjustments there, the GAAP, the gaps and non-GAAP? Yeah, the non-controlling interest really relates to the portion of Sustainable Growth Advisers that the company does not own. ... You may recall, last year, we did increase our ownership, from 70% to about 75%, in the third quarter. So really, the change primarily reflects the change in ownership. So as we look forward, I think a good way to model the non-controlling line is taking an average, really, of those two quarters, third quarter and fourth quarter, as a good benchmark of looking forward. Perfect. Thank you. Appreciate you taking my questions. Thank you. Thank you. One moment for our next question. Our next question comes from Bradley Hays of TD Cowen. Hi, good morning. It's Bradley Hays on for Bill Katz. How are recent takeout multiples impacting the way you're thinking about deal opportunities as well as what you're seeing in the market? So in terms of, I'm sorry, you said, with the impact of which multiple? Take out multiples? Yes. I didn't hear, that broke up a little bit. Yeah. Yeah, you know, we continue to evaluate the opportunities, you know, that are currently out there, and multiples, you know, will sort of ebb and flow, dictated based upon, you know, the asset class and the specific opportunity set as it kind of relates to that. So there has been some, you know, pull-in of some of those multiples. But when you're dealing with... There's different ranges of multiples that would be reasonable, depending on whether you're talking about a traditional opportunity versus that which is in the more private or non-correlated kind of a section. But so we stay cognizant of those and factor those in as we think about our opportunities. Okay. As your net debt to EBITDA sits quite low, how does this play into, or change your thoughts around the cadence of capital return or deployment? Yeah, in terms of capital, again, you know, we're currently, as you're pointing out, you know, our level of leverage or encumbrance is relatively modest. We generate a good level of cash flow. You know, we continually to evaluate, you know, how do we best deploy that, including in growing the business, which is, you know, fundamental to generating long-term shareholder value. You know, keeping the debt at reasonable and modest levels. And then again, the stock buybacks, which again, we've consistently done generally, maybe sometimes with some changes in terms of priorities within an individual quarter. So to us, they're all important, and again, they'll generally vary based upon relative attractiveness, i.e., how is our stock trading in a certain period? Or, you know, what's happening with interest rates as it relates to debt. So we feel good that we're very well positioned, and we have that flexibility to really avail ourselves of different opportunities. And those do include the M&A transactions, which, while not fundamental to our strategy for long-term growth, is something, as you know, we've consistently done over a period of time. Okay, great. Thank you. And then just one more question. Where do you see the best potential for flows, perhaps either specific asset classes or funds you're feeling particularly strong about? Yeah, we see... It's a great question. I mean, the areas of opportunities, we do think on the, you know, if we go through the pendulum, right? So I think on the retail side, we continue, and we said in our prepared comments, you know, retail separate accounts continues to be a great area of growth, as is ETFs. And a lot of our product development and introduction is really focused in on those areas, and we do continue to see opportunities on the retail separate accounts as well as on the ETFs, particularly actively managed ETFs. So that's been a lot of areas. So we continue to see that great. But for us, institutional, you know, in spite of the lumpiness that you're seeing in this quarter, where the outflows were elevated, and again, we had a late deposit in January that would've should have occurred in the fourth quarter. We see that as a good opportunity, particularly non-U.S., right? And we've highlighted that before, whereas many of our managers and capabilities are not as well known, and we've put a lot of our resources and efforts in terms of doing that, and that's why we think we've seen some growth in the non-U.S. client base. I think Mike cited 18%, and continuing to have strong growth there. So I definitely think those are two areas that we've highlighted and will continue to highlight as areas of growth. In terms of strategies, you know, we offer a broad array because you could have, you know, certain. We're seeing clients on the retail side going to that nice January we saw, and it was really nice to see a strong January as we did, where certain people that were hoarding cash in the fourth quarter were finally redeploying into equity. But simultaneously, we saw strength in alternatives for people looking for non-correlated. So the reason that we try to focus on having diversity of different asset classes and strategies is because of the diversity in the client needs. So you know, for us, and having, you know, you know, 38 funds that are in a high star category, they'll each have opportunities depending upon different clients. Okay, perfect. Thank you very much. Thank you. Thank you. One moment for our next question. Our next question comes from Michael Cyprys of Morgan Stanley. Great, thanks. Good morning. Good morning. Morning. ... Good morning. Hoping we could maybe start off on the retail separate accounts. Maybe you could just elaborate on some of the areas that's driving the improving strengths that you guys are seeing on the separate account side. Maybe you could elaborate on which some of the, underlying strategies that are helping lift that higher on a gross sales basis. And then on the private client business, maybe you could talk about the opportunity set that you see over time to further expand that part of the business. Sure. Sure. On the first piece, and then Mike will have some additional color. So retail separate accounts have been consistently strong for us. So we actually had pretty much a nonstop series of quarters of inflows until, you know, a little bit of breakage in the doldrums of the market. So we've consistently had growth, and I think as Mike has pointed, it's gone from about 16% of our assets five years ago to 25% of our assets today. So it's always been a growth area for us. Our greatest strength has been in the small caps, the SMIDs, and the MIDs. That's still a good opportunity. We're actually seeing that as well in July, in January, in terms of what people are looking to. We also know the reopening of some of our small cap strategies as well. What we're also then looking to expand, so we have other offerings on the fixed income space, and we're continuing to develop some additional ones. So what our hope is, is to continue to have the strength and the continued positive flows with our existing strategies, which will probably overweight equity, but really trying to expand that offering set from some of our fixed income strategies that don't have full availability at the intermediaries yet and continue to build that out. So we're kind of very optimistic about where we think the opportunity set there is. So Mike, you want to comment on that, and then private client? Yeah. And, you know, I would just add, that to reiterate, the small and the SMID-cap has been a consistent area of growth. And, on private client, we've really expanded that, had some good traction on that part of the business from Kayne Anderson Rudnick, as well as some fixed income flows that we saw from our team at Seix. So you're seeing it across affiliates, and it's been a consistent area of growth for us, and it's an area we've invested in and selectively added resources and has expanded its contribution to our AUM and is an important part of the growth that we see going forward. Great. And just in terms of capital allocation, how should we be thinking about updating our models of buybacks, debt paydown? How are you guys thinking about this, about that? And maybe you could just remind us of any potential earn-out payments that will be a use of cash flow, in the coming years. Yeah. So in terms, you know, in terms of the capital, again, we are currently at low levels of leverage. We generate significant cash flows, and as we look at it in the quarter, we sort of do evaluate all the categories. One thing to highlight, as Mike had noted earlier, first quarter is one of our biggest cash utilization quarters. So if you look historically in terms of how we've deployed cash in the first quarter, you will generally kind of see that, that, you know, because so much cash is used for the annual incentives, which is our largest expense, you know, that will then have an impact then on how much we might avail ourselves in other things. But we do view share buybacks as, you know, a great use of our capital and continue to have that as a priority. So I can't give you any specifics, but it will be in the context of where we are in terms of our cash needs. Yeah. And just specifically, Michael, as you recall, the first quarter also does include a revenue participation payment annually. It's been around the $25 million mark the last several first quarters, so I'd expect it to be somewhere in that level. So in addition to annual incentive and other cash needs in the first quarter, we will be expecting to make that payment. And then I, you know, I would note, in addition to the buybacks, we've obviously raised the dividend six consecutive years and have had a nice growth rate of the dividend of close to 30% in that period of time. And while we've done that, we've also reduced the share count, probably close to about 12% or 13% over that six-year period. So that balanced approach to capital management, you're seeing it growing the dividend consistently and reducing the share count consistently over time, and we think all of that is ways to create value to shareholders. Great. Just final question from me on M&A. I was hoping maybe you could elaborate a bit on the M&A pipeline and conversations that you're having with prospective candidates in the marketplace. How would you sort of characterize those conversations today versus maybe six or 12 months ago? What are some of the properties that are coming across your desk, and where do you see some of the biggest opportunities for M&A at this point for Virtus? Yeah, I think in terms of the conversations, again, the number of conversations and the frequency, you know, remains pretty consistent. I mean, there are a lot of conversations going on, and... but I do think they've really become much more in terms of conversations and strategic fit, and alignment of interest, and much less in terms of just, you know, auction processes. So we're continued to be interested in many of the conversations that we're having. And, but again, I think they are more in terms of trying to make sure there's good strategic fit. Specific areas where I think we've kind of alluded to where we and others have interest in, is in some of those areas that are less of the traditional and more of the alternative types of strategies. Our last two transactions were on the liquid alt side in terms of the AlphaSimplex, as well as the event-driven at Westchester. We continue to see that as an area to expand our offerings because we're, I believe we're very well represented on the equity and fixed income spectrum. So that that is an area, that we're interested in. But we consider different alternatives and, and different, opportunities, you know, as they arise. As I said before, for us, it's always important that our long-term growth strategy does not require M&A to be successful, so we do focus on the organic side, but we're very excited about the number of opportunities that we do think could ultimately be out there, but only if they make sense for us and if, only if they are the right use of, you know, our capital at a point in time. Great. Thanks so much. Great. Thank you. Thank you. This concludes our question- and- answer session. I would like to turn the conference back over to Mr. Aylward. Great, thank you. I want to just thank everyone for joining us today, and as always, we certainly encourage you to give us a call if you have any other further questions or need any information. Thank you all. Have a great day. That concludes today's call. Thank you for participating, and you may now disconnect.