Good day and thank you for standing by. Welcome to the Second Quarter 2024 Westwood Holdings Group Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, John Ehinger, Chief Compliance Officer. Please go ahead.

Thank you and welcome to our second 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 June 30, 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, everyone and thanks for joining us for Westwood’s second quarter 2024 earnings call. I am looking forward to discussing our results and key developments from the past quarter as well as giving you a quick look into our outlook for the remainder of the year. Before diving into the details, I’d like to highlight a few key points that we will be discussing today. Within our distribution channels, we funded exciting new mandates in our institutional business and saw positive flows into our energy strategies. Significant developments included our investment in the Texas Stock Exchange, which is seeking regulatory approval to launch next year and the successful launches of our ETFs and our managed investment solutions capability. We have lots of exciting news to share. So let’s get started with our long-term performance, which continues to be a source of pride for us here at Westwood. The second quarter presented a challenging and complex market environment for investors. The S&P 500 rose, but returns were highly concentrated among a handful of mega cap growth stocks, particularly if linked to artificial intelligence. This narrow market leadership led to significant performance disparity, with the Russell 1000 Growth Index gaining 8.3%, while the Russell 2000 Value Index declined 3.6%. Outside the LargeCap growth, most market segments struggled with 6 out of 7 S&P 500 sectors declining. Economic data was mixed, with growth slowing and then persistent inflation and this pushed expectations for interest rate cuts further out into the future. In the bond market, returns were muted as interest rates held relatively steady. High-yield bonds led the way as investors take comfort from the concept that a growing economy, together with stable interest rates, will avert potential defaults. Longer dated treasury bond prices declined as the long end of the yield…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $22.7 million for the second quarter of 2024 compared to $22.7 million in the first quarter and $21.9 million in the prior year second quarter. Revenues were flat to the first quarter and up from last year’s second quarter. Our second quarter comprehensive loss of $2.2 million or $0.27 per share compared with income of $2.3 million or $0.27 per share in the first quarter due to changes in the fair value of contingent consideration and income taxes, which resulted in a loss for the quarter. Non-GAAP economic losses were $0.5 million or $0.06 per share in the current quarter versus earnings of $3 million or $0.36 per share in the first quarter. Our second quarter comprehensive loss of $2.2 million or $0.27 per share compared with last year’s second quarter income of $2.9 million or $0.36 per share, primarily due to changes in the fair value of contingent consideration and income taxes, which resulted in a loss for the quarter. Economic losses for the quarter were $0.5 million or $0.06 per share compared with earnings of $4 million or $0.49 per share in the second quarter of 2023. Firm-wide assets under management and advisement totaled $16.8 billion at quarter end, consisting of assets under management of $15.8 billion and assets under advisement of $1 billion. Assets under management consisted of institutional assets of $7.6 billion or 48% of the total, wealth management assets of $4.2 billion or 27% of the total and mutual fund assets of $3.9 billion or 25% of the total. Over the quarter, our assets under management experienced market depreciation of $51 million and net outflows of $0.3 billion. And our assets under advisement experienced market depreciation of $5 million and net outflows of $51 million. Our financial position continues to be very solid, with cash and short-term investments at quarter end totaling $44.1 million and a debt-free balance sheet. I am happy to announce that our Board of Directors approved a regular cash dividend of $0.15 per common share, payable on October 1, 2024, to stockholders of record on September 2, 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 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 will open the line to questions.

[Operator Instructions] And our first question comes from Mac Sykes of GAMCO. Your line is open.

Good afternoon everyone. Since the successful launch of your ETFs and the new hires, I was wondering if you could just give us a little more color on the strategy going forward. I mean do you see more of a complete suite of ETFs that represent your broader products, or do you see yourself focusing more on kind of niche offerings, differentiated, etcetera?

Mac, we intend to make a much bigger expansion into the ETF. And we are taking a look at what products we have internally that we could potentially convert to ETFs. We are also watching closely to see what others are doing with respect to creating dual share classes within a current mutual fund. I think that could be very interesting as well. And we have got some great product ideas ahead. So, we are excited about it. We have had some pretty good volumes so far with the two ETFs that we have. And we really feel like the energy sector is entering a secular bull market, as I mentioned in my prepared comments. We are just seeing a lot of interest across the board. We designed these ETFs so that they pay a monthly income, and those are double-digit annualized yields, which are terrific and are very attractive in today’s world. Any other questions beyond that, Mac?

Just – no, that’s fine, and just one follow-up. On the Texas exchange investment, in the past, you have made a few investments. Should we think about this as more of a unique investment for capital appreciation on your capital, or are there some synergies there in terms of marketing with the exchange and being in Texas, etcetera?

Yes. So, we think it will be a great investment. I want to be clear that this has to be approved by the regulators, and that will take some time to do. But it’s exciting because Dallas is really becoming viewed as the center coast, if you will. Companies continue to move here in droves. People are moving here constantly. The economy is booming in Texas and we are excited to be a part of it. One of the goals of the Texas Stock Exchange is to list not only the companies that are here today, but the companies that are coming here today. And I think last count, we have got 53 or so of the Fortune 500 companies that are now in Texas. They also want to make a push to lift the ETFs and ETNs. So, that’s a big part of what they want to do. So, it’s exciting to be part of it. They will be right down the street. I am sure there will be lots of opportunities to market with them. And we do think that it will be a very good long-term investment if it is approved.

Thank you.

Great. Well, are there any other questions?

I will now turn it back to Brian for closing remarks.

Okay. Great. Well, thanks everybody. The contingent consideration for our Salient transaction made for messy earnings this quarter, but we only have one more quarter of this calculation that will impact earnings. So, we will be done with that. But we are making good progress. We have had some funded wins in July. And so just to give you an update, as of 7/31 today, AUM is back to where it was at the first quarter, which is close to $17.2 billion. In addition, we are funding a $207 million mandate this Friday, and our new business pipeline is well over $1 billion, with several won, but not yet funded wins coming over the next month or two months. The collective investment trust we created have been particularly popular with some of the larger consulting firms as they are able to white label them and their clients defined contribution with 401(k) plans. So, we are going to expand that with our small cap and large cap strategies and hopes of attracting additional business into what is a very fast-growing segment for the consulting community. And then I would also say that Managed Investment Solutions is making great progress on systems, and we should be ready for due diligence from prospective clients in a week or so. And every single meeting request has been accepted and we are anxious to land our first client. And as we look ahead, as I mentioned, we intend to really expand our ETF business, and we will have some exciting news to share with you in the months ahead. So, thanks for taking time to listen today, and please call me or Terry, if you have further questions or visit westwoodgroup.com and go to the Investor Relations section. Have a great day.

This concludes the question – this concludes today’s conference call. Thank you for participating and you may now disconnect.