Brightsphere Investment Group PLC. (NYSE:BSIG) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 11:30 am ET

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Brightsphere Investment Group PLC. (NYSE:BSIG) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to BrightSphere Investment Group Earnings Conference Call and Webcast for the Third Quarter 2019.

[Operator Instructions]

Please note, this call is being recorded today, November 5, at 11:30 AM Eastern Time.

I would now like to turn the meeting over to Brett Perryman, Head of Investor Relations. Please go ahead, Brett.

Executive
Brett Perryman

Thank you. Good morning. Good morning and welcome to BrightSphere's conference call to discuss our results for the third quarter ended September 30, 2019.

Picking up on slide 3 of our new investor deck. Before we get started, please note that we may make forward-looking statements about our future business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Additional information regarding these factors appears in our SEC filings, including the Form 8-K filed today containing our earnings release and in our 2018 Form 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update them as a result of new information or future events.

We will also reference certain non-GAAP financial measures. Information about any non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website along with the slides that we will use -- we are using as part of today's discussion.

Guang Yang, our President and Chief Executive Officer, and Suren Rana, our Chief Financial Officer, will lead the call. And now, I'm pleased to turn the call over to Guang.

Executive
Guang Yang

Thanks, Brett. Good morning everyone and thanks for joining us today. Let me begin on slide 5 of the presentation by walking through some of the highlights for the third quarter. We reported ENI per share of $0.42 for the third quarter compared to $0.45 for the second quarter. The $0.03 difference quarter-over-quarter is attributable to higher placement agent fee and equity market depreciation across some non-US regions.

Our outflow of $6.2 billion for the quarter were largely concentrated in lower-fee subadvisory accounts with about $2 billion related to Victory's acquisition of USAA and the related reallocations, and another $2 billion related to continued reallocation from a specific clients in the US large-cap equity subadvisory space.

Looking forward, with a potent business mix, concentrated in high-growth segments of the industry, we remain confident in our organic AUM and revenue growth prospects particularly as the investor interest remains high across many of our quantitative strategies and our alternative strategies approach the next-vintage fundraising cycle over the next few quarters.

Turning to slide 6, we have made considerable and the measurable progress in refocusing our business since the beginning of 2019, and returned substantial value to shareholders along the way. Streamlining our center resources has generated $8 million to $10 million in annual expense savings. As a result, BrightSphere is now a much more nimble and efficient company with entrepreneurial and performance-driven culture. Our