BrightSphere Investment Group Inc. (NYSE:BSIG) Q4 2023 Earnings Call Transcript
BrightSphere Investment Group Inc. (NYSE:BSIG) Q4 2023 Earnings Call Transcript February 1, 2024
BrightSphere Investment Group Inc. beats earnings expectations. Reported EPS is $0.77, expectations were $0.58. BSIG isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the BrightSphere Investment Group Earnings Conference Call and Webcast for the Fourth Quarter 2023. [Operator Instructions] Please note that this call is being recorded today, Thursday, February 1, 2024, at 11 a.m. Eastern Time. I would now like to turn the meeting over to Melody Huang, SVP, Director of Finance and Investor Relations. Please go ahead, Melody.
Melody Huang : Good morning, and welcome to BrightSphere's conference call to discuss our results for the fourth quarter ended December 31, 2023. Before we get started, please note that we make forward-looking statements about our 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 risks and uncertainties appears in our SEC filings, including the Form 8-K filed today containing the earnings release, our 2022 Form 10-K and our Form 10-Q for each of the first, second and third quarters of 2023. 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 may also reference certain non-GAAP financial measures. Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website, along with slides that we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products. Suren Rana, our President and Chief Executive Officer, will lead the call. And now I'm pleased to turn the call over to Suren.
Suren Rana : Thank you, Melody. Good morning, everyone, and thanks for joining us today. Well, I'll start off with some of the main highlights on Slide 5 of the deck, and then I can answer questions. So for the fourth quarter of '23, we reported record ENI per share of $0.77 compared to $0.67 in the fourth quarter of 2022 and $0.45 in the third quarter of 2023. The 15% increase in ENI per share compared to the year ago quarter was primarily driven by management fee revenue being 10% higher than the year ago quarter due to higher AUM from market appreciation that we saw in 2023. Acadian's investment performance remained great and strengthened further in the fourth quarter. As of December 31, 2023, more than 90% of strategies by revenue outperformed their respective benchmarks across 3-, 5- and 10-year periods.
And net client cash flows for the quarter were negative $2 billion, as we saw some additional outflows in the quarter related to our managed volatility strategies and select large reallocation. Our growth initiatives continue to be on track. Acadian's Equity Alternatives platform, seeded about a year ago in Q4 of '22, continues to show good investment outperformance. And Acadian's Systematic Credit initiatives was just seeded in November '23, with $15 million of seed capital in the High Yield strategy, and that has now started to build its track record. Turning to capital management. In 4Q '23, the company's Board provided a new authorization for share buybacks of up to $100 million. Starting in December of '23, and to date so far in '24, we repurchased approximately $43 million of shares, or 2.1 million shares, which was about 5.2% of our outstanding shares.
Regarding our balance sheet, we had a cash balance of $147 million as of December 31, '23. Acadian fully paid down its revolver at the end of Q4 compared to the $13 million that was outstanding at the end of Q3. I'd like to end with reiterating that from a longer-term perspective, we remain focused on maximizing shareholder value, and we'll continue using our free cash flow to support organic growth and to buy back our shares. I'll now turn the call back to the operator, and I'm happy to answer any questions at this point.
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