Virtus Investment Partners’ Earnings Call Highlights Growth and Challenges

Virtus Investment Partners ((VRTS)) has held its Q2 earnings call. Read on for the main highlights of the call.

The latest earnings call from Virtus Investment Partners presented a generally positive outlook, despite some challenges. The company reported growth in assets under management, strong ETF performance, improved operating margins, and strategic share repurchases. However, it faced issues with net outflows in equity strategies and a decline in sales compared to the previous quarter. Overall, the sentiment was optimistic due to the company’s strategic positioning and long-term investment performance.

Growth in Assets Under Management

Virtus Investment Partners reported a 2% growth in assets under management (AUM) during the quarter, reaching $171 billion as of June 30. This increase, amounting to $4 billion sequentially, was largely attributed to a market rebound, showcasing the company’s resilience and ability to capitalize on favorable market conditions.

Strong ETF Performance

The company’s exchange-traded funds (ETFs) demonstrated impressive performance with positive net flows, reaching $3.7 billion in AUM. This represents an organic growth rate of 74% over the trailing 12 months, highlighting the growing investor interest and confidence in Virtus’s ETF offerings.

Improved Operating Margin and Earnings

Virtus saw its operating margin improve significantly to 31.3% from 27.6% in the previous quarter. Additionally, earnings per share, as adjusted, increased to $6.25 from $5.73, reflecting the company’s effective cost management and operational efficiency.

Share Repurchases

The company executed its highest level of share repurchases in three years, totaling $30 million. This move, representing 3% of the beginning outstanding shares, underscores Virtus’s commitment to returning value to shareholders and confidence in its long-term growth prospects.

Strong Long-term Investment Performance

Virtus’s long-term investment performance remains robust, with 74% of equity assets and 69% of fixed income assets outperforming their benchmarks over a 10-year period. This track record reinforces the company’s reputation for delivering consistent, superior returns to its investors.

Pipeline for Inorganic Growth

The pipeline for inorganic growth opportunities is at its highest level, supported by strong liquidity. This positions Virtus well to capitalize on strategic opportunities that could further enhance its market position and growth trajectory.

Net Outflows in Equity Strategies

Despite the positive developments, Virtus faced total net outflows of $3.9 billion for the quarter, primarily in equity strategies. This was largely due to market conditions that favored momentum over quality-oriented strategies, presenting a challenge for the company.

Decline in Sales

Sales declined to $5.6 billion from $6.2 billion in the first quarter, reflecting market disruption and reduced sales from the soft closing of a smid-cap core equity model. This decline highlights the challenges Virtus faces in maintaining its sales momentum amid changing market dynamics.

Forward-looking Guidance

Looking ahead, Virtus Investment Partners remains optimistic about its growth prospects. The company highlighted key financial metrics for the second quarter of 2025, including a 2% increase in AUM to $171 billion and an operating margin of 31.3%. Despite net outflows, the strong organic growth rate of ETFs and significant liquidity position Virtus well for future strategic initiatives and market opportunities.

In summary, Virtus Investment Partners’ earnings call conveyed a positive sentiment, driven by growth in assets under management, strong ETF performance, and improved operating margins. While challenges such as net outflows and declining sales persist, the company’s strategic initiatives and long-term investment performance provide a solid foundation for future growth.