Virtus Investment Partners’ Earnings Call Highlights

Virtus Investment Partners ((VRTS)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Virtus Investment Partners presented a mixed sentiment, highlighting both strong investment performance and challenges due to market volatility and net outflows. Despite a decline in assets under management, positive developments in ETFs and an increase in earnings per share offered a balanced perspective.

Strong Investment Performance

Virtus Investment Partners demonstrated robust investment performance, with over 70% of equity strategies outperforming their benchmarks in the first quarter. Impressively, 74% of equity assets have met benchmarks over a ten-year period, earning Virtus the rank of the number two top fund family for the decade by Barron’s.

Positive Net Flows in ETFs

ETFs continued to be a bright spot for Virtus, generating strong positive net flows of $0.3 billion. Over the past year, ETFs have achieved an impressive organic growth rate of 73%, underscoring their role as a key growth driver for the company.

Increased Earnings Per Share

The company reported a 6% year-over-year increase in earnings per share, reflecting its ability to enhance shareholder value despite challenging market conditions.

Share Repurchases

Virtus invested $26 million in repurchasing approximately 146,000 shares, effectively reducing shares outstanding by 3% on a net basis over the past year. This move underscores the company’s commitment to returning capital to shareholders.

Decline in Assets Under Management

Total assets under management fell to $167.5 billion as of March 31st, primarily due to market performance and net outflows. This decline highlights the challenges faced by the company amid market volatility.

Net Outflows in Institutional Products

The company experienced total net outflows of $3 billion, an improvement from the previous quarter’s $4.8 billion. Institutional net outflows of $1.2 billion were mainly attributed to domestic and global large-cap equity strategies.

Seasonal Employment Expenses Impact

First-quarter financial results were impacted by seasonally higher employment expenses, leading to a decline in the operating margin to 27.6% from 35.1% in the fourth quarter.

Forward-Looking Guidance

Looking ahead, Virtus Investment Partners is navigating market volatility with a focus on financial resilience. The company ended the quarter with $135.4 million in cash and equivalents and a net debt position of $100 million. Virtus plans to launch new products, including ETFs and global funds, in the upcoming quarters, aiming to drive future growth.

In conclusion, the earnings call for Virtus Investment Partners reflected a balanced sentiment amidst market challenges. While the company faced a decline in assets under management and net outflows, strong investment performance, positive ETF flows, and increased earnings per share provided optimism for the future. Virtus remains committed to strategic capital management and product innovation to enhance shareholder value.