Thank you for standing by, welcome to the Westwood Holdings Group, Inc. Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Jill Meyer Corporate Security, Secretary and Director of Fiduciary Services. Please go ahead.

Thank you, and welcome to our Fourth Quarter 2025 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-K for the year ended December 31, 2025, 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 those 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 joining Westwood's Fourth Quarter 2025 Earnings Call. I'm looking forward to sharing our full year's results, key developments from the past quarter and a look into what this year holds in store. First, here are some of last year's more significant milestones and achievements. Our ETF franchise now exceeds $200 million, including our latest ETF, enhanced income opportunity. In addition, MDST surpassed the $170 million mark in AUM. We closed our second oversubscribed private equity fund, Westwood Energy Secondaries Fund II with more than $300 million in commitments for the fund and two related co-investment funds. Our managed investment solutions team secured its first institutional client, and we had strong full year sales growth. $2.5 billion versus $2.1 billion, up 20%. Many key equity indices posted new records last year. However, investors were pulled in different directions during the final quarter. The S&P 500 rose less than 3%, but still ended the year up 18%. Despite economic headwinds, the U.S. economy did manage to record modest growth against the backdrop of consumer confidence remaining near all-time lows. The Federal Reserve cut short-term rates by 75 basis points from September through December, amid weakening labor market conditions. Signs of fatigue and the long-running bull market and tech stocks started to appear as investors shifted their focus from the promise of AI towards more tangible near-term financial results. Bond markets generated positive total returns for the year, supported by declining yields. Several of our investment strategies demonstrated resilience and competitive positioning across multiple time horizons and asset classes. Within U.S. value, our SMidCap strategy is performing well with top third rankings over 3-year rolling periods. Solid results like these are founded upon our disciplined approach through identifying high-quality businesses trading at attractive valuations. Our multi-asset strategies are…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $27.1 million for the fourth quarter of 2025 compared to $24.3 million in the third quarter and $25.6 million in the prior year's fourth quarter. . Revenues increased from the third quarter due to significant investor interest in our exchange traded funds and private energy secondaries funds, along with higher performance fees. Revenues increased from 2024's fourth quarter primarily due to higher average assets under management and higher revenues from our ETFs and private energy secondaries funds, partially offset by lower performance fees. For fiscal 2025, total revenues of $97.8 million compared to $94.7 million in 2024 driven by higher average assets under management and higher revenues from our ETFs and private energy secondaries funds. Our fourth quarter income of $1.9 million or $0.21 per share compared to the third quarter's $3.7 million or $0.41 per share due to higher performance-related incentive compensation in the fourth quarter and unrealized depreciation on strategic private investment in the third quarter, offset by higher revenues. Non-GAAP economic earnings were $3.3 million or $0.36 per share in the current quarter versus $5.7 million or $0.64 per share in the third quarter. Our fourth quarter income of $1.9 million or $0.21 per share compared to the prior year's fourth quarter income of $2.1 million or $0.24 per share as a result of higher revenues and the impact in 2024 of changes in the fair value of contingent consideration, offset by higher performance-related incentive compensation expenses and additional professional services costs. Economic earnings were $3.3 million or $0.36 per share compared to $3.4 million or $0.39 per share in the fourth quarter of 2024. Our 2025 income was $7.1 million compared to 2024 of $2.2 million on higher revenues, unrealized depreciation on strategic private investments and the impact in 2024 of changes in the fair value of contingent consideration, offset by higher professional service and information technology costs. Economic earnings for the year were $14.3 million or $1.61 per share compared with $7 million or $0.82 per share in 2024. Firm-wide assets under management and advisement totaled $17.4 billion at quarter end, consisting of assets under management of $16.5 billion and assets under advisement of $0.9 billion. Assets under management consisted of institutional assets of $8.3 billion or 50% of the total, wealth management assets of $4.3 billion or 26% of the total and mutual fund assets of $3.9 billion or 24% of the total. Over the year, our assets under management experienced net outflows of $1 billion and market appreciation of $1 billion and our assets under advisement experienced net outflows of $18 million. Our financial position continues to be very solid, with cash and liquid investments at quarter end totaling $44.1 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 April 1, 2026, to stockholders of record on March 3, 2026. 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'll open the line to questions.

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

Well, thank you, John. In closing, we felt like we had a really good year in 2025, but we want to acknowledge the outflows in the fourth quarter, which were disappointing. I do want to make a few comments on those. More than 80% of the outflows were from our large-cap value product. And -- that product has really struggled in recent years against a very narrow low-quality market environment. And if you know Westwood, you know that we are always seeking high-quality companies that are improving, that are mispriced and that is not what the market has wanted in the last couple of years. So most of those large cap outflows, in fact, more than 80% of those flows were from one sub-advisory client that carries a fee of less than 20 basis points. So while it's a big number going out the door, it's less impact on revenue. We did have a new client come in yesterday with $200 million, and they will add another $100 million to $200 million over the next couple of months. We also have a new defined contribution plan that will fund on the last day of the first quarter in our SMid product for $450 million -- and that will take our SMid AUM very close to the $2 billion threshold AUM level. Our pipeline looks great. We have -- we reached another new threshold last night where MDST our midstream enhanced energy income fund crossed the $200 million threshold. We are in the process of due diligence to onboard MDST under one of the largest wirehouses which will significantly expand our opportunity set. So we're very bullish on the ETFs that we started a couple of years ago. So appreciate your time today. I hope everybody enjoys a long weekend. Please visit our website at westwoodgroup.com if you have any questions. Thank you.

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