Total assets under management (AUM): up 6% to $183.7 billion.
Net outflows: $1.7 billion, improved from $2.6 billion in the previous quarter.
Operating margin: 34.4%, up from 32.5% in the previous quarter.
Adjusted earnings per share: $6.92, up 6% from Q2.
Stock buyback: increased to $15 million.
Quarterly dividend: Increased dividend for 7 consecutive years.
Net debt position: 0.1x EBITDA.
Institutional net outflows: $1.1 billion, improved from $1.7 billion in the previous quarter.
Retail Special Account Net Flow: $400 million positive.
Investment management fees (adjusted): $185.5 million, an increase of 1%.
Employment costs (adjusted): $102.5 million, down 1% sequentially.
Other operating expenses (adjusted): $29.8 million, down 5% sequentially.
Adjusted net income: $6.92 per diluted share, up from $6.53 in the second quarter.
Cash and equivalents: $195.5 million, up from $183 million as of June 30.
Release date: October 25, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
Virtus Investment Partners Inc (NYSE:VRTS) reported strong operating and financial results in the third quarter, with sequential sales growth across all products.
The company achieved positive net flows in its retail special accounts, ETFs, and global funds, reflecting favorable market conditions.
Investment performance was strong, with 62% of assets outperforming peers and 82% of equity assets outperforming peers in the third quarter.
Operating margin reached a two-year high of 34.4%, benefiting from increased revenue and disciplined expense management.
Virtus Investment Partners Inc (NYSE:VRTS) has increased its quarterly dividend for seven consecutive years, maintained moderate net debt, and achieved significant financial flexibility.
Despite the improvement, the company experienced an overall net outflow of $1.7 billion in the quarter.
Net institutional outflows were $1.1 billion due to the redemption of fee reduction obligations.
Net outflows from open-end funds were $1 billion, an improvement from the previous quarter.
The firm faces challenges in the open-end fund industry, particularly on the active side.
Currently, known redemptions exceed known acquisitions in the fourth quarter, potentially impacting revenue neutrality.
Q: Can you give us more details about the flow in the fourth quarter, especially after the strong sales in September? A: George Aylward, President and CEO: The last two months of the year are a big hit with tax and election cycles. may change due to the influence of We continue to see positive flows in retail special accounts, ETFs, and global funds in October. The ETF business is gaining momentum as products hit three-year performance marks. Fixed income strategies are performing well and we expect this trend to continue, but there may be some volatility at the end of the year.
story continues
Q: Adjusted other operating expenses were lower than previously expected. Will the $30 million level be sustainable next quarter? A: Michael Angerthal, CFO: Current levels are appropriate for modeling purposes. By streamlining our investment support systems and data feeds, we were able to keep costs stable despite inflationary pressures. We will update the outlook if there are any changes in the future.
Q: How do you address inorganic growth and M&A opportunities? A: George Aylward, President and CEO: We are focused on organic growth in retail individual accounts, ETFs, and global funds. Masu. In the case of M&A, we are looking at adding capabilities that are not currently in our portfolio, especially in less correlated markets like private markets. We aim to expand our offering to include private market opportunities.
Q: What is your strategy for capital allocation, particularly in terms of dividends and new product introductions? A: George Aylward, President and CEO: We continue to look at product opportunities. Our capital allocation strategy includes consistent dividend increases balanced with share buybacks and other investments. As part of our strategy, we aim to maintain stable dividend growth.
Q: Can you tell us more about the institutional pipeline and the challenges in achieving positive flows? A: George Aylward, President and CEO: Institutional capital outflows. is often through redistribution rather than mandated layoffs. We are focused on meeting the needs of institutional clients as they adjust their asset allocations. Our pipeline remains strong across managers, strategies and geographies, but it is a highly competitive space.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
