Good day, and thank you for standing by. Welcome to the First Quarter 2024 Westwood Holdings Group Earnings Conference Call. [Operator Instructions] Please be advised that this conference is being recorded. I would now like to hand the call over to your speaker today, Jill Meyer, SVP, Director of Fiduciary Services. Please go ahead.

Thank you, and welcome to our first quarter 2024 earnings conference call. The following discussion will include forward-looking statements that 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, 2024, that will be 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 Chief Executive Officer; and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon, and thanks for listening to our first quarter earnings call. First, I'll start with some highlights for the quarter. AUM and AUA reached just over $17.1 billion, the highest we've seen in 6 years. We achieved positive new flows in our institutional channel. We launched our Managed Investment Solutions, and feedback on the team and their capabilities has been very positive. Lastly, our first active ETF was launched on April 9. It's called the Westwood Salient Enhanced Midstream Income Fund, and it trades on the New York Stock Exchange under the ticker symbol MDST. It seeks to deliver current income and capital appreciation by investing in midstream energy companies by combining a high-conviction, actively managed, midstream energy-focused equity portfolio with an options overlay to produce enhanced income distributions for investors. Based on current dividend yields and option premium income, the fund targets a double-digit yield for investors, and we've priced it competitively with an all-in expense ratio of 80 basis points. Trading in the ETFs is off to a good start with volumes exceeding expectations and tight trading spreads. It's available via Fidelity, Schwab, Vanguard and on other platforms. Our intermediary sales team held lots of meetings over the past month to introduce our ETF to the RIA community, and the team has seen an encouraging level of interest. Several large RIAs are in the process of conducting due diligence to enable the ETF to be added to their approved list of investments. Due to our efforts, coupled with the attractive features of the fund, we expect trading volume and assets to grow in the weeks and months ahead. As part of this process, we've built a very solid infrastructure to support future ETF offerings, and the next one, enhanced energy income will begin trading any day. Looking…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $22.7 million for the first quarter of 2024 compared to $23.2 million in the fourth quarter and $22.7 million in the prior year's first quarter. Revenues were comparable to both the fourth quarter and last year's first quarter. Our first quarter comprehensive income of $2.3 million or $0.27 per share compared with $2.6 million or $0.32 per share. In the fourth quarter due to higher employee compensation and benefits expenses partially due to seasonality of incentive compensation, offset by changes in the fair value of contingent consideration. Non-GAAP economic earnings were $3 million or $0.36 per share in the current quarter versus $3.6 million or $0.43 per share in the fourth quarter. Our first quarter comprehensive income of $2.3 million or $0.27 per share compared favorably with last year's first quarter income of $0.7 million or $0.09 per share, primarily due to changes in the fair value of contingent consideration, offset by higher income taxes. Economic earnings for the quarter were $3 million or $0.36 per share compared with $1.7 million or $0.22 per share in the first quarter of 2023. Firm-wide assets under management and advisement totaled $17.2 billion at quarter end, consisting of assets under management of $16.2 billion and assets under advisement of $1 billion. Assets under management consisted of institutional assets of $7.7 billion or 48% of the total, wealth management assets of $4.2 billion or 26% of the total and mutual fund assets of $4.2 billion or 26% of the total. Over the quarter, our assets under management experienced market appreciation of $0.9 billion and net outflows of $168 million, and our assets under advisement experienced market appreciation of $45 million and net outflows of $80 million. Our financial position continues to be very solid with cash and short-term investments at quarter end, totaling $46.6 million and a debt-free balance sheet. I'm happy to announce that our Board of Directors approved a regular cash dividend of $0.15 per common share payable on July 1, 2024, to stockholders of record on June 3, 2024. That brings our prepared comments to a close. We encourage you to review our investor presentation we have posted on our website, reflecting quarterly highlights as well as the 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 Macrae Sykes with GAMCO.

Two things. First, could you just give me a little more detail on the funded wins in 1Q and coming up in 2Q? Are they all for the same CIT, I believe, in strategy?

Most of it is for the CIT. We did have one SmallCap in there as well, separate account.

Okay. And then could you dig a little bit more in the ETF launch, maybe what you learned after sort of going through the process. I mean, obviously, it seemed pretty successful, a lot of the gate, good volumes, et cetera. I was curious as to get you a little more granular feedback on the process, what you were pleased with? And what was some of the feedback you got from the investors, both on the vehicle approach as well as the strategy?

Sure. So we started this project about 8 months ago, and we've had a team internally that has been studying the space and trying to figure out how can we best play in the ETF space. And what we really wanted was to make sure we didn't come out with something that was similar to what anybody else had. So we're looking for white space, and we want to be in the income-oriented part of the market. And there's a lot of those types of ETFs, but what we found is there were none that did what we ended up doing, which is building a midstream energy portfolio and writing covered calls against those positions to take what is normally a 6% or 7% yield and increasing that to north of an 11% yield. The other thing that we learned in the process is that advisers and their customers really appreciate getting a monthly distribution. So we are providing that and producing a monthly -- just under 1% a month for people. So it's a very competitive income-oriented strategy. We hired some consultants to help us. We hired another firm to help us market the strategy. So we have, I think, a really good team in place. And we're very -- very happy with the launch of the first ETF, which came out a few weeks ago on the New York Stock Exchange. Today, we launched our second ETF, WEEI on NASDAQ. And the reason we did NASDAQ is we want to see how each of these ETFs perform on these 2 exchanges so that as we launch others in the future, we'll have a good feel for what we can expect. So we're very pleased. The important thing with ETFs is that you have good consistent volume, which we…

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.