Thank you for standing by, and welcome to the First Quarter 2021 Westwood Holdings Group, Inc. Earnings Conference Call. [Operator Instructions]. I'd now like to introduce your host for today's program, Julie Gerron, Senior Vice President, General Counsel and Chief Compliance Officer. Please go ahead.

Thank you, and welcome to our first quarter 2021 earnings conference call. The following discussion will include forward-looking statements, which are subject to known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those contemplated by the forward-looking statements. Additional information concerning the factors that could cause such a difference is included in our press release issued earlier today, as well as in our Form 10-Q for the quarter ended March 31, 2021, that is filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on forward-looking statements. In addition, in accordance with SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings and economic earnings per share to the most comparable GAAP measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our President and Chief Executive Officer; and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon. Thanks for taking the time to listen to our quarterly earnings call. I've spoken for some time about our efforts to meet the challenges presented by today's asset management industry. Last quarter, I listed several ways in which we are doing that. And this quarter, I have some more items to highlight the success of our efforts so far. Among them, net flows moved to positive, capping our best sales quarter in 6 years. Our new business pipeline remains very strong at $2.7 billion, driven mostly by institutional wins, our high-performing SmallCap strategy is approaching AUM capacity. First, I have a few comments on our investment performance. Financial markets continued the roller coaster that started last year. About a year ago, COVID sent most of us home. Now we, along with market observers around the globe, are convinced that widespread business reopenings will provide a powerful impetus to our economies and this expectation is showing up in financial asset prices. Given this backdrop, investors surmise that the most cyclical riskiest assets would benefit most, and we've seen meme stocks, SPACs, and cheap high beta small securities rise along with junk bonds as investors favored risk-taking as the year got underway. Our U.S. value strategies were challenged in this environment and underperformed. On the bright side, LargeCap value enjoyed $140 million in positive net flows with selected client rebalancings contributing to the strategy this quarter. We continue to see potential for separately managed account wins and our mutual fund, WHGLX remains a 4-star rated fund by Morningstar. Our SMidCap strategy also had positive net inflows, over $60 million through client rebalances and the addition of a new institutional client. Markets favoring high beta and volatility have historically been short-lived, and we expect fundamentals to lead the markets with earnings…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $18.3 million for the first quarter of 2021 compared to $17.1 million in the fourth quarter of 2020 and $16.7 million in the prior year's first quarter. Revenues were higher than the fourth quarter and last year's first quarter, principally as a result of higher average assets under management and higher performance-based fees. First quarter net income of $4.1 million or $0.52 per share exceeded net income of $2.8 million or $0.36 per share in the fourth quarter, primarily due to net realized gains on private investments of $5.6 million as well as higher revenues, partially offset by higher operating expenses and income taxes. Non-GAAP economic earnings were $6.3 million or $0.79 per share in the current quarter versus $4.6 million or $0.58 per share in the fourth quarter. First quarter net income of $4.1 million or $0.52 per share exceeded net income of $1.1 million or $0.13 per share in the prior year's first quarter, primarily due to net realized gains on private investments of $5.6 million as well as higher revenues, partially offset by higher operating expenses and income taxes. Economic earnings for the quarter was $6.3 million or $0.79 per share compared with $4.2 million or $0.50 per share in the first quarter of 2020. Firm-wide assets under management totaled $14.5 billion at quarter end and consisted of institutional assets of $7.6 billion or 52% of the total, wealth management assets of $4.4 billion or 30% of the total and mutual fund assets of $2.6 billion or 18% of the total. Over the quarter, we experienced market appreciation of $853 million and net inflows of $595 million. Our financial position continues to be very solid with cash and short-term investments at quarter end totaling $86.9 million and a debt-free balance sheet. Happy to announce that our Board of Directors approved a quarterly cash dividend of $0.10 per share, payable on July 1, 2021, to stockholders of record on June 4, 2021. This represents an annualized dividend yield of 2.3% as of the closing price on April 27. That brings our prepared comments to a close. We encourage you to review our investor presentation posted on our website reflecting first quarter highlights as well as a discussion of our business, product development, and longer-term trends in revenues and earnings. We thank you for your interest in our company, and we'll open the line to questions.

[Operator Instructions]. Our first question comes from the line of Mac Sykes from Gabelli.

Brian, nice quarter. So I just had 2 quick questions. First, on the soft close for the SmallCap strategies, could you just clarify the constraints on retail versus institutional separate accounts?

Sure. So we have some RFPs in queue for institutional, which we will honor. And then we will manage those flows very carefully. As far as intermediary or retail goes, we will be open for business for folks to be able to transact in the intermediary space. So the mutual fund will remain open.

And then the comp line rose a little bit this quarter. Was that a reflection of the better sales activity? And assuming that the pipeline funds next quarter and you get continued progress, would that push a little more pressure on the comp line, which I assume is a good thing.

Yes. So the revenue did rise, and we do expect significant unfunded wins to fund this quarter, hopefully. Sometimes they bleed into the third quarter, but we've won some significant pieces of business, and we're excited about it. As far as the comp line goes, yes, it will rise in tandem as a result of those folks that are on commission who are paid based on sales.

[Operator Instructions]. And this does conclude the question and answer session of today's program. I'd like to hand the program back to Brian Casey for any further remarks.

Well, thanks, everybody, for taking the time to listen. I know it's a busy day for earnings. Please visit westwoodgroup.com for more information on any of our filings and our Investor Relations presentation. Feel free to call myself or Terry, if you have any further questions. Thanks for your interest in Westwood.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.