Virtus Investment Partners Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Crispin Love - Piper Sandler - Analyst : Thank you and good morning, everyone. Hope you're well. First, can you just give a little bit more detail on what you're seeing in the fourth quarter as it pertains to flows? I know, it's early, but you did mention that you had the highest level of sales in September for the third quarter, which I do assume was partly driven by some of the market moves we saw. Kind of first, one, how does that compare to October? And then just how are the trends running relative to the third quarter for sales and net flows? And are there any significant flows that you expect in the last two months of the year that are worth calling out?

Question: Crispin Love - Piper Sandler - Analyst : Thanks, George. I definitely appreciate that, there could be a lot of volatility in the kind of the coming weeks and coming months for the election. But second question for me, just on adjusted other OpEx came in below your prior $32 million guide. Just curious, if you can dig a little bit deeper there. Mike, based on your comments, it seems like the run rates for the fourth quarter should be about that $30 million level. Do you think that $30 million level makes sense for the next several quarters as we move into 2025? And also, is there any more room for cost streamlining in that line? Thank you.

Question: Crispin Love - Piper Sandler - Analyst : Great. Thank you both. I appreciate you taking my questions.

Question: Annalei Davis - Morgan Stanley - Analyst : Hi this is Annalei Davis on for Mike Cyprys. My question is on how you guys are thinking about inorganic growth. Just wondering any color you guys can share on M&A conversations you've been having? And then what are you guys evaluating when you're considering an opportunity? Thanks.

Question: Annalei Davis - Morgan Stanley - Analyst : Great. Thanks. And then maybe just another one on the capital allocation. How much do you guys anticipate allocating? And how do you see the seed book today? And then just wondering if there's any more opportunity to introduce additional new products? Thanks,

Question: Annalei Davis - Morgan Stanley - Analyst : Awesome. Thank you.

Question: Bill Katz - TD Cowen - Analyst : Thank you very much. Good morning, everybody. Appreciate you taking the questions. I was wondering, if you could expand a little bit on the affiliate step-up in the quarter. When did it happen? How should we think about the residual impact maybe to NCI? And I don't know, if you want to talk about which affiliate it is, but how do you think about the pipeline for other opportunities to sort of deepen your ownership of your existing footprint? And maybe what multiple we should be thinking about you're paying on that incremental equity? Thank you.

Question: Bill Katz - TD Cowen - Analyst : Okay. That's super helpful. I did recall that as you sort of chatting. Sorry, I waste the question. The -- maybe stepping back, just following up on some of the M&A discussion. There has been a ton of transactions, both large and small over the last many quarters as the shelf space, the arms race, whatever you want to call it, to sort of either get retail democratization or get access to some of the faster growth areas like you mentioned in terms of private markets. Does this change the urgency or the sort of the financial discipline or maybe framework, maybe a better way to think about it of how you're thinking about incremental growth because it's nice to see the flows getting a little bit better, but you're still sort of grinding along and sort of modestly negative with puts and takes from your updates. So how do you really break into some of the really fast growth areas here economically?

Question: Bill Katz - TD Cowen - Analyst : Can I squeeze one more in?

Question: Bill Katz - TD Cowen - Analyst : Okay. Thank you. Sorry to (inaudible). Separate topic, I promise. On the institutional pipeline, you mentioned that the known outflows is a little bit better than the known inflows a little bit. Can you talk a little bit about what's been the gating issue here for a better flow outlook in institutional? Is it -- it doesn't sound like it's performance. Is it product breadth? Is it reallocations? What seems to be some of the underlying sort of any kind of commonality or headwinds to sort of getting that business back into positive territory? Thank you.

Question: Bill Katz - TD Cowen - Analyst : Okay, thank you for taking all my questions this morning.

Question: Ben Budish - Barclays - Analyst : Hi, good morning. And thanks for taking the question. Maybe first, I just wanted to ask on the ETF side, maybe a two parter. I guess, what are your thoughts on the product pipeline for 2025? And then, I think not too long ago, you kind of commented that your ETFs were not available to all of your intermediaries. So just curious if the distribution is now kind of fully baked in. It just seems like there's a lot of momentum there. Curious how much could be either continued from an expansion of distribution and then thoughts on the new product side?

Question: Ben Budish - Barclays - Analyst : Got it, very helpful. Maybe one separate question, kind of coming back to capital allocation. You announced another pretty healthy dividend increase not too long ago. So just curious, how you're thinking about what that looks like over the next several years. It looks like the sort of the payout rate versus five, six years ago has really picked up from like a teens level to a low 30s level. So as time goes on, are you thinking about more -- at what point do you become a little bit more constrained by your overall EPS growth? Are you thinking about -- so how are you thinking about this in terms of either payout ratio or providing investors with steady dividend increases? How do you kind of think about balancing those as the payout ratio has increased over the last several years?

Question: Ben Budish - Barclays - Analyst : Okay. Great. Well, thank you for taking my questions.