Ladies and gentlemen, thank you for standing by. Welcome to the OMAM Earnings Conference Call and Webcast for the Fourth quarter and full year ended 2017. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Please note that this call is being recorded today, February 1st at 10:00 A.M. Eastern Time. I would now like to turn the meeting over to Brett Perryman, Head of Investor Relations. Please go ahead, Brett.

Thank you. Good morning, and welcome to OMAM's conference call to discuss our results for the fourth quarter and full year 2017. Before we get started, I would like to note that certain comments made on this call may constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as expect, anticipate, may, intend, believes, estimate, project and other similar expressions. Such statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from these forward-looking statements. These factors include, but are not limited to, the factors described in OMAM's filings made with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K filed with the SEC on February 22nd, 2017, under the heading Risk Factors, our quarterly report on 10-Q filed with the SEC on August 10, 2017, and our current report on Form 8-K filed with the SEC on November 31, 2017. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. We urge you not to place undue reliance on any forward-looking statements. During this call, we will discuss non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, which is available in the Investor Relations section of our Web site, where you will also find the slides that we will use as part of our discussion this morning. Today's call will be led by Jim Ritchie, our Chairman and Interim Chief Executive Officer; Aidan Riordan, Head of Affiliate Management; and Steve Belgrad, our Chief Financial Officer. I will now turn the call over to Jim.

Thank you, Brett, and good morning everyone. Thanks for joining us today. Let me begin by saying how pleased I am to announce Steve's appointment as our President and CEO. I have known Steve since he joined OMAM. As Chairman of the OMAM audit committee back in 2011, I was involved in bringing Steve into the organization. At that time the board and I recognized that Steve brought a broad and somewhat unique blend of skills and experiences. He has an exceptional analytical ability, sharp financial acumen, M&A savvy and exceptional knowledge of the industry. As we work together to bring OMAM public and in the years since, Steve's strategic input has been invaluable. Throughout this interim period of our CEO search, we have continued to make progress in executing our business strategy and positioning OMAM for the next leg of growth. We have guided our company through the final separation from Old Mutual plc and worked to reduce our expense base at the center, reallocating the savings to additional affiliate growth initiatives. Steve played an integral role in all of these activities and the board recognizes and appreciates both his contributions and his leadership. As I have said, our CEO search process was broad, deep and wide. We have met with and gave strong consideration to an impressive slay of candidates. While we considered a number of external candidates who brought substantive industry knowledge and skills, Steve is distinguished for his strategic vision for driving the business forward, in-depth familiarity with our business and has demonstrated commitment to working in partnership with our affiliates. Well deserved trust and confidence of our affiliates, our employees and our board, strong and proven affinity for the boutique asset management model, ability the sustain the momentum of the organization's development over the past…

Thanks, Jim, and good morning everyone. On Slide 5 you can see our AUM progression for the quarter and full year along with a break down by affiliate and asset class. Here you can see that our participation in many of the faster growing, higher fee segments of the marketplace has been the primary driver behind the steady growth in our asset base. More than 50% of our AUM is in global, international and emerging markets equity strategies with another 9% in alternative investments. Slide 6 breaks out our net cash flows on an AUM and revenue basis. While client cash flows in the institutional space can be large and lumpy, our business has consistently positive flows on a revenue basis with positive revenue flowing 9 of the last 12 quarters and each of the last five quarters. The fee rate differential between outflows and inflows has also continued to expand as the fee rate on outflows has exceeded that on inflows in only one of the last 12 quarters. With inflows this quarter averaging 25 basis points higher than outflows, we were pleased to report an annualized revenue impact of $6.8 million for the quarter. On Slide 7, we show further detail on our flows by asset class. We have seen fairly consistent inflows on both an AUM and revenue basis in alternative and global non-U.S. equity products, both of which carry higher fee rates. While the fourth quarter was somewhat anomalous in being dominated by flows and alternative products, overall we continue to see high demand for our suite of global international and emerging markets equity strategies. On Slide 8 we break out our investment performance across several metrics, the most relevant of which we think is revenue weighted performance. The equity markets remain favorable for active asset…

Thanks, Aidan and good morning. First, I would like to say how honored I am to be appointed President and CEO of OMAM. This is a great organization with outstanding affiliates and employees and we have a tremendous opportunity to grow the business and increase shareholder value. Dan Mahoney, our Controller who is with us today, will become Head of Finance and our Principal Financial Officer. And I know you will find him quite insightful about the business as you get to know him over the coming months. During the Q&A I am happy to talk more about my priorities as CEO, but first I should turn back to my current job, Slide 10. The fourth quarter continued the positive trends in the first nine months of 2017 and resulted in another period of record ENI financial results. This quarter benefited from the same factors that drove growth earlier in the year as average AUM consolidated affiliates increased, fee rates expanded, NCCF revenue was positive and accretion from Landmark continued as expected. Performance fees were also higher on a cyclical basis in Q4 driven by strong performance at Acadian. We also saw the positive impact of our combined 11 million share buyback in December 2016 and May 2017, which decreased our share count by approximately 9%. The fourth quarter saw continued market and flow driven growth in our higher fee global, non-U.S. equity classes and alternatives. The [EAFE][PH] and emerging markets indices increased 25% and 37.3% respectively for the full year, while lower fee U.S. large cap value indices went up 13.7%. In addition, a number of our larger strategies generated output during this period, further enhancing AUM growth beyond market levels. Finally, landmark continues to generate cash flow, fee rate and earnings accretion. On January 5, 2018, we closed…

[Operator Instructions] Your first question comes from Bill Katz from Citigroup. Please go ahead, your line is open.

First off, Steve, congratulations. I have known you almost by whole career and very happy for you. I think you would be a great steward of capital and a little shocked by how the stock is reacting. First question, I guess, and you also have highlighted in your own comments, I would be curious if, we sort of see as maybe your top two or three strategic priorities as you look ahead in your new role.

Yes. Thanks, Bill. Really, I mean it's in part a continuation in acceleration of some of the key priorities that we have talked about. As I think about where we have been since the IPO, I am really proud of what we had accomplished in terms of growing the business, making the investment in Landmark. But in a way if you think about it, we have also had one eye backwards with a majority shareholder during a lot of that time that was trying to exit their position. We had obviously management change. And so I really look at the next year as an opportunity when we can really be 100% focused on growing the business at the affiliates as well as through acquisitions. And clearly, executing on another strong acquisition like Landmark is a key priority and I think now that we have the CEO succession process behind us, we have a great story, we have a great value proposition and I think we have a really opportunity to do an accretive, positive transaction for the company and for shareholders. The other areas where I think we are going to be spending some time is on the IR side. I think many people would look at the stock price and the PE and continue to believe that we are undervalued. And I think there are probably a couple of reasons for that. But as we now have sort of management continuity, the CEO in place, we went to get out and tell the story. And I think it's a really strong story to tell and so we are going to be spending time with that as a priority as well. We are also going to be rebranding over the next few months and we will sort of come out with that and get more information shortly. And then I would say another strategic priority is really leveraging the relationship with HNA. I think we have a unique opportunity there given their presence in China and we are going to put some resources to work sorting through where there are strategic opportunities to work together to grow the business. So I would say those are sort of the key things that I am thinking about right now.

Okay. That’s helpful. And then maybe one for Aidan. Just so looking at some of your gross sales trends, sort of year on year or on a quarterly basis. And it seems like a lot of the fourth quarter was on the alternatives, I am presuming through Landmark. And you had sort of highlighted in your prepared comments around some of the seed things, other initiatives you are working on. Can you talk a little bit about how you sort of see the hand off as you look into the second half of this year on the gross sales leadership. Where you might expect to see some of the better net flows looking ahead.

Sure. My guess as a general matter, I would just comment that the trends in the background market that have driven the business haven't really changed. Now I would say that we see secular pressure on the domestic side and while we did see some anomalous kind of activity in the non-U.S. flows, we don’t necessarily see that kind of being a trend. So I would say we certainly expect the alternatives positions to continue to grow and additionally we have got trends in the non-U.S. base that we think we will continue to drive opportunities. And then we have some seeded products and things like emerging markets and multi-asset class that we can't control the timing but those are things that we hope to see some traction on shortly.

Your next question comes from Craig Siegenthaler with Credit Suisse. Please go ahead, your line is open.

Congratulations on the promotion too. So now that we have visibility on the leadership of OMAM, how should we think about the reacceleration of your acquisition pipeline now that the CEO overhand is resolved.

Yes. I think, as I said, this is going to be a key area of attention and focus for me. M&A and strategy will be reporting directly to the CEO and that is an important area I think to indicate the importance we have put on that business. I would say that while we have continued to have meetings with potential investment candidates as well as respond to basically to opportunities that came up, during the last six months it sometimes is difficult to go out and tell a comprehensive story when you don’t have the CEO in place. We think we have a really strong story to tell in terms of the value proposition, the profit share model, the collaborative benefits we bring to affiliates to Aidan's group, in terms of global distribution, capital, investment in their business. But we want to make sure as we approach potential candidates that we can put our best food forward. And I think now that the management clarity is in place, we can really get out there and begin really increasing the number of meetings we are taking and really build up that pipeline. I think we also are very focused on what's going on in the market in terms of opportunities that are there and we think there continue to be a pretty strong pipeline out there, particularly in the alternative side where we continue to have an interest as well. And so I hope that the opportunities of having a number of candidates out there and our own efforts to generate flow on a proprietary basis will yield something this year.

And then just one follow up on M&A. So the new number, $400 million of deal capacity, that’s actually pretty large for a company of your size and I think the old number before tax reform was $250 million. So it seems like much bigger number now and pretty large for you guys. How should we think about the capital return mix between acquisitions buybacks. We saw the news on the dividend. And also how focused are you on the stock's liquidity which is one limiting factor. And then also on the HNA ownership constraint at 25%, which could be another factor as you can consider the buyback potential.

Yes. I mean look, as we have said, we have bought back about 11% of the stock over the last -- a little bit over 12 months now. That was important. We are always going to be looking at where we believe shareholders capital should be allocated. Whether it should be returned in dividends or returned in stock buybacks or through acquisitions. And $400 million is a larger amount but look, I think it doesn’t need to necessarily be spend all on one transaction either. We will, we have quite a bit of flexibility as you know in terms of the actual size of investments we make because we are not buying 100% of the company and we have the flexibility, the structured transactions to buy a portion today, maybe buy more later, have an earn out, that sort of thing. So I wouldn’t think of the $400 million going necessarily to all one transaction although it could. But I think we are looking at a range of sizes and a range of investments and we will understand what kind of return we can get.

Your next question comes from Kenneth Lee from RBC Capital Markets. Please go ahead, your line is open.

Congratulations again, Steve. Just want to get a -- you briefly mentioned about potential technology investments, granted still early, assessments are still being made. But perhaps you could just talk a little bit more about what potential areas and when or when or where we could see potential expenses arising from these investments.

It's [Ken], I will chime in. It's obviously safe to assume that we have some pretty impressive capabilities today. Particularly in those areas of our business that utilize [quant] [ph] models and the like. And thinking about our industry in general, if you give highly talented people tools for new analytics, it's also I think a reasonable assumption to do -- for them to do better. Where we see it going is, if you broadly think about a lot of technology has been in a sense backward looking. So why did particularly things happen or what happened, we see the new tools as being able to help our firms be more forward looking, so what's going to happen next. What should, like responses look like and the like. As we take a hard look at ourselves, we think it's actually reasonable to expect that a boutique manager such as us, meaning our current size, our current number affiliates, should be able to move quickly and produce some good results.

I think this is exactly one of the areas that I am excited about because one of the benefits that we have always said that we try to bring is to bring the resources of the $250 billion asset manager to boutique asset managers which have a lot of unique skill sets and characteristics that clients really like as well. And I think technology will provide an opportunity where I think we will be able to invest money and invest more than perhaps standalone affiliates of our affiliate size might be able to have done on their own. And we are sort of early days still but I think that’s going to be a big opportunity to really continue to help our affiliates grow and provide strong results for the clients.

Okay. Great. And just one -- just wondering what the implications could be in terms of competitive positioning for M&A transactions. Maybe some of the thoughts around that. Thanks.

Yes. I think if you recall when we first went public, the relative advantage of our U.K. domicile was probably in the order of $30 million or so. That’s now $2.5 million. But at the same time, if you look at in absolute dollar terms where our tax rate is today, when we went public it was probably around 26%, 27%, now our effective tax rate after tax reform is going to be in that 23% to 24% range. So in general we are keeping more cash and tax reform is a positive thing. And so we will continue to sort of look at what the right structure is between whether keeping the current U.K. domicile and U.K. tax structure is advantageous, because obviously you have not only the pure analysis of what taxes are you paying but also the complexity of the story from an IR point of view. The complexity of the business in terms of running the business with this U.K. domicile, and also obviously looking at regulatory structure and the overall structure of the business. And so those are all factors we are going to look at. Purely from an M&A point of view, I think we are -- I am not sure that the tax law itself will have an impact on our competitiveness or not. But I think overall it clear is a positive to us and the shareholders.

Your next question comes from Michael Carrier from Bank of America Merrill Lynch. Please go ahead, your line is open.

This is actually Sameer Murukutla on for Michael Carrier. Steve, first just want to convey our congratulations also. So I guess just wanted to go back to the flow question, and I know you have provided color on some of the outflows in 4Q and the building pipelines and maybe some of the growth areas, and maybe some lumpiness in global. So should we expect the quick turnaround in global and can you provide us maybe another color on know lumpiness going forward.

Yes. I mean maybe just in terms of the, looking at the fourth quarter in terms of what caused the higher $3.7 billion of net flows. I think part of that is really about $1 billion of it, relates to withdrawals from Old Mutual accounts. These are not general accounts money, these are basically sub-advisory accounts managed for their U.K. business, as well as their South African business. And I think they had made a decision to in-source some of that management. There is about $2.7 billion or so of assets that are remaining from Old Mutual and we will see what happens with that over time but it's about 25 basis point asset. So that impact is, probably of that billion about half was U.S. equity, half was non-U.S. equity, or about actually a little bit more than half, 60% was non-U.S. equity. We also, within the sub-advisory space, saw about a billion more of outflows in the U.S. sub-advisory in the fourth quarter of '17 compared to the fourth quarter of '16. But then on the non-U.S. sub-advisory, there was really almost a one-off sub-advisory withdrawal that contributed almost all of the increase in sub-advisory net outflows or outflows during that fourth quarter of '16, '17. So taking a step back, I don’t think we look at the decline in flows in non-U.S. equity as systemic in any way or emblematic of what we would expect going into the future. I think it really was the result of really two one off events that happened in the same quarter, one the U.S. equity, or sorry the non-U.S. equity withdrawal from Old Mutual. And then the other was this non-U.S. sub-advised relationship that took money out as well.

Your next question comes from Glenn Schorr from Evercore. Please go ahead, your line is open.

This is actually [John Dyen] [ph] for Glenn. We want to also extend congratulations, Steve. Just to follow on previous question, you know you guys have good performance but 2017 was the worse value versus growth in spread in like 20 years. And just curious how that environment is pressuring your different strategies and channels.

I think really where we overall see the most outflows, as we have talked about, is really U.S. equity, in particular probably sub-advised U.S. equity. And look, it is I think the value versus growth differences are really purely cyclical. And some periods value outperform, others it's going to be growth. We really could only control what we can control. I mean we are -- if we look at our sort of largest U.S. equity composite, large cap value, we outperformed versus benchmark in 2017 and did quite well there. And what we do is we just continue to -- if we can continue to generate a strong performance relative to benchmark, which is what our clients are hiring us to do. We just have to put those numbers up and when value comes back into favor or U.S. equity comes back into favor, we have competitive product. At the same time, as Aidan talked about, a key part of what we are doing and what our affiliates are doing is continually looking at our product set and looking at opportunities to basically continue to expand the capabilities that their affiliates, which leverage their core competencies so that we have a constant cycle of competitive new products that we hope will appeal to investors. So we are investing in that part of the business. We are also investing in diversifying in the new asset classes through acquisitions and so it's really that combination of making sure that you have strong performance in legacy that are absolutely critically important but also continue to be looking towards the future and making sure that you have made appropriate investments in the products that you think investors are going to want to buy three and five years out.

Your next question comes from Andrew Disdier from Sandler O'Neill. Please go ahead, your line is open.

Steve, congrats. Excited to see how you move the company on a forward basis. So first on performance fees during the quarter. So understand that dynamic between Barrow Hanley and Windsor II, understand the dynamic of the fund mandated bench versus the manager preferred bench. But kind of away from them, could you remind us the basis for benchmark calculations on other product performance fees. And then this quarter, I know you said you did in global non-U.S. products with the performance fees, was it tied to the redemptions from the parent or the former parent, rather.

No. Not at all. I mean where we tend to see, you know the products that we tend to see performance fees coming from are generally emerging markets products, some [indiscernible] products. Those have been where we have seen, tended to see the most performance fees. And those are more your typical type products where there is a benchmark management fee rate and then if you outperform benchmark, you get little bit extra. And so I think one of the really positive things about those performance fees is that they were sort of across a few different mandates, across a few different strategies and really reflect just fundamental strong performance in those strategies rather than some sort of hedge funds hitting at all for something like that. But that’s really what made up most of the fourth quarter increases. It's really some of the non-U.S. strategies relative to their normal benchmarks.

Got it. And then Jim, had a few questions around your rhetoric. So last time I had though the minority interest strategy was new on the last call. I mean this time it sounds like there is rhetoric around traditional products as a potential target. So I think that’s the first time I remember hearing that. So I guess what's the process, thought process there and I was kind of always under the impression that [odds] [ph] were the favorite.

Are you talking about in terms of acquisitions or in terms of just the investment?

Acquisitions.

Yes. I mean I think maybe there was -- no, I think in terms of priorities, we probably would be more on the offside within traditional equity asset classes. I think where we would certainly have an interest and continue to want to invest, is areas where there are capacity constrained products or where we think there is strong growth potential. So even within some of the non-U.S. equity side, on traditional side, we have had tremendous runs at a number of our affiliates but you want to be able to continue to diversify where those assets come from, so you don’t run into capacity constraints. So I think in areas like small cap or global non-U.S., emerging markets, where you always are looking at capacity constraints, those will be areas within the traditional space that you would look at as well.

This is Aidan. There wasn’t meant to be any suggestion of a change in prioritization. We have always opportunistically looked to debt.

The other thing I would say is, over time actually getting non-U.S. manufacturing in one only space would be something that we would look at. And that’s not something that we actually have today.

Your next question comes from Michael Cyprys from Morgan Stanley. Please go ahead, your line is open.

Congratulations, Steve. Apologies, I hopped on late so you maybe already covered this. But just on the institutional pipeline, just curious any color that you could share in terms of how that stands how, say versus a year ago. How the level of conversation is with clients today and what's sort of the trends are on the RFP activity picking up and any sort of client color commentary.

Yes, I mean. Michael, as you know, I mean we can comment a little bit on sort of what we are seeing on the global distribution side but in terms of some of the more granular information, just as sort of holding company, that frankly is, lot of that RFP information and stuff is not what we really collect and analyze because that’s really proprietary to the affiliates. But I don’t whether, Aidan, do you have anything to add on the global distribution, what kind of products are...

I am happy to talk about that. And I would say, just to reiterate what I said earlier, the trend that have carried us to this point remain the trends that we think are going to carry us forward. All in the backdrop of having been through kind of very very strong equity markets in 2017. I think with regard to distribution, as was disclosed earlier, $2.3 billion of assets across a variety of strategies for a variety of our affiliates. And as that effort continues to grow and we continue to invest in it and develop new products, I think the trends that you are going to see particularly on the non-U.S. side are around global type products, emerging markets products and a variety of the other products. So for us it's continuing to build on that momentum. And then on the U.S. side, it's really providing access in scale into the sub-advisory space and being really a provider of services in a market that’s consolidating. Those are the areas that we continue to build in.

Great. Thanks. Just any thoughts, commentary around the organic revenue growth. It just looked a little bit lighter than what we had seen last quarter and a year ago.

I mean look, it's a function of -- look, when we have $3.7 billion of asset outflows, I should think of it as a pretty positive thing that we generate, $6.8 million of revenue flows. But clearly I think it's a function of the fact that you had more of those net outflows and that proportionately because of these one off items that we talked about of some global non-U.S. sub-advisory and Old Mutual, it came from some of the areas that would tend to be slightly higher fee. But overall, when you look at the trend of gross sales and what the basis points were earned on those gross sales relative to the gross redemptions, I think in general we actually had a higher spread between the two this quarter than we have in the past., i.e., we had 57 basis points on inflows this quarter compared to 44 in the year ago quarter. And then on outflows, we had about 32 basis points on outflow relative to 35 in the year ago quarter. So even though those trends were actually much better, we were still weighted down a bit by the fact that just the wrong number of outflows relative to inflows.

Your next question comes from Bill Katz from Citigroup. Please go ahead, your line is open.

Most of my question were answered, but Steve while I have you, just want to run through again where we stand in terms of the seed capital. Not the seed capital, sorry, the cash flows related to DTA. It seems like, from what you said in the press release that they might -- and what you said in your comments, that there may be further opportunity to potentially rework what the residual payment might be, number one. And then number two, where do you think you stand out that we have the tax reform on potentially re-domicile because there seems like there is a simplification argument that we have when looking into '19, particularly of GAAP and ENI [got] [ph] to converge.

Yes. I think I gave a range between 52 and 65. It really reflects the fact that we are -- the way the DTA is valued is based on an assumed growth rate and an assumed discount rate for those DTA benefits. And those will still need to be -- we need to come to final resolution with Old Mutual in terms of exactly how to calculate the reduction of the DTA payment. And that sort of represents the range and obviously from a conservative accounting point of view, we took the low end of that range. But that’s the reason for the range. In terms of the re-domicile, I have covered this a little bit, but it's really going to be a function of analyzing the financial impact relative to what we think the benefits are going to be from simplification, and that simplification comes from sort of organizational complexity that exists today. Having board meetings, costs of that over in London. Likewise, the regulatory environment between the two domiciles. And so all of those things we will get back to when we make the decision. The other things which is sort of unknown, is even though the difference between U.S. and non-U.S. today is $2.5 million, what you don’t know is what's going to happen to tax rates in the future. U.S. tax rates are probably not going to go down in the future. Whether they go up or when they go up, anyone can have their views on and I don’t want to spoil the party after we have just had the tax cut to think about when they might go up again. But once you have given up your U.K. domicile and come back to the U.S., that’s it. That’s a permanent decision. And to the extent that the differential between the two tax regimes increases again, you won't be able to take advantage of that. So it's all of those factors that are going into an analysis as well as just understanding a bit better exactly some of the nuances of the current tax law which you are working through. And as we get through the year and we think about all those items, we will continue to evaluate and figure out what's going to be in the best interest of shareholders in our judgment.

This concludes our question-and-answer session. I would like to turn the conference call back over to Jim Ritchie.

First I would like to thank everybody that’s participated in today's call and have actively engaged with us. I am really grateful for the many kind words that you have said on the line about Steve's appointment. We are really very excited about that. And for those who haven't had the opportunity to get on to the call but have sent emails or text messages expressing the same during the call, thank you very much.