Q1 2024 Victory Capital Holdings Inc Earnings Call Transcript
Key Points
- Victory Capital Holdings Inc reported strong financial performance with a 52.1% adjusted EBITDA margin, indicating efficient operations and focused execution.
- Net long-term flows were positive in March, and total client assets increased by more than 5% in the first quarter, demonstrating robust business growth.
- The company has maintained a consistent fee rate on AUM at 53 basis points, showing stability in revenue generation from asset management.
- Victory Capital Holdings Inc announced a strategic memorandum of understanding with Amundi, expected to enhance global distribution and access to new investment products.
- 69% of AUM in mutual funds or ETFs earned four or five star ratings from Morningstar, reflecting strong investment performance and competitive product offerings.
- The company was restricted from conducting share repurchases during the first quarter due to ongoing negotiations with Amundi, limiting its capital return flexibility.
- Despite overall positive net flows, there were net outflows in equity funds, indicating potential challenges in that segment.
- The company faces the complexity of integrating Amundi's US business, which could impact operational efficiency and culture.
- Victory Capital Holdings Inc is heavily reliant on the U.S. market, with 97% of AUM managed for U.S. clients, which could pose risks if there are significant market changes domestically.
- The company's future growth is highly dependent on the successful execution of the Amundi transaction and the realization of projected synergies and benefits.
Good morning and welcome to the Victory Capital first quarter 2024 earnings conference. I hope all callers are in a listen-only mode. Following the company's prepared remarks, there will be a question-and-answer session.
I will now turn the call over to Mr. Matthew Dennis, Chief of Staff and Director of Investor Relations. Please go ahead, Mr. Dennis.
Thank you. Before I turn the call over to David Brown, I would like to remind you that during today's conference call we may make a number of forward-looking statements. Please note that Victory Capital's actual results may differ materially from these statements. Please refer to our SEC filings for a list of some of the risk factors that may cause actual results to differ materially from those expressed on today's call.
Victory Capital assumes no duty and does not undertake any obligation to update any forward-looking statements. Our press release that was issued after the market closed yesterday
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