Earnings call transcript: Acadian Asset Management Q3 2025 sees strong revenue growth

Acadian Asset Management Inc. reported robust financial results for the third quarter of 2025, highlighting a significant increase in revenue and earnings per share. The company saw a 12% rise in revenue compared to the same period last year, driven by a notable increase in management fees and assets under management. Despite a challenging market environment, Acadian maintained strong performance across its investment strategies.

Key Takeaways

• Revenue for Q3 2025 increased by 12% year-over-year to $136 million.
• Earnings per share (EPS) rose by 29%, reaching $0.76.
• Management fees surged 21%, reflecting a 34% increase in average assets under management (AUM).
• The operating margin expanded to 33.2%.

Company Performance

Acadian Asset Management demonstrated strong financial performance in Q3 2025, with revenue and earnings growth outpacing the previous year. The company’s focus on systematic investing and strategic expansion into new markets contributed to its success. Despite a crowded market environment, Acadian’s investment strategies continued to outperform benchmarks, reinforcing its competitive position as a leading systematic manager.

Financial Highlights

• Revenue: $136 million, up 12% from Q3 2024.
• Earnings per share: $0.76, a 29% increase year-over-year.
• Adjusted EBITDA: Increased by 12%.
• Operating margin: Expanded to 33.2%, up from 31.7% in the previous year.

Outlook & Guidance

Looking ahead, Acadian expects its operating expense ratio for fiscal year 2025 to be between 44% and 46%, with a variable compensation ratio of 43% to 45%. The company plans to continue focusing on organic growth and capital management while expanding its systematic credit capabilities.

Executive Commentary

CEO Kelly Young emphasized Acadian’s unique position as the only pure-play publicly traded systematic manager, stating, "We have delivered sustained outperformance across various investment strategies." CFO Scott Hynes added, "We continue to generate strong free cash flow and are deploying excess capital effectively."

Risks and Challenges

• Crowded market environment: Increased competition in high-beta stocks could impact future performance.
• Fee pressure: Potential downward pressure on fee rates may affect revenue growth.
• Global market volatility: Fluctuations in international markets could pose challenges to the company’s strategies.

Q&A

During the earnings call, analysts expressed strong interest in Acadian’s enhanced and extension equity strategies and its increasing focus on international and non-U.S. equity exposure. The company’s systematic credit strategies were also highlighted as showing promise, despite potential slight downward pressure on fee rates.

Full transcript - Acadian Asset Management Inc (BSIG) Q3 2025:

Conference Call Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Acadian Asset Management Inc. Earnings Conference Call and webcast for the third quarter 2025. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question and answer session. To be added to the queue, please press the star followed by one at any time during the call. If you need to reach an operator, please press the star followed by zero. Please note that this call is being recorded today, Thursday, October 30, 2025 at 11:00 A.M. Eastern Time. I would now like to turn the meeting over to Melody Huang, Senior Vice President and Director of Finance and Investor Relations. Please go ahead.

Melody Huang, Senior Vice President and Director of Finance and Investor Relations, Acadian Asset Management Inc.: Good morning and welcome to Acadian Asset Management Inc.’s conference call to discuss our results for the third quarter ended September 30, 2025. Before we begin the presentation, please note that we may make forward-looking statements about our business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding these risks and uncertainties appears in our SEC filings, including the Form 8-K filed today containing the earnings release, a 2024 Form 10-K, and a Form 10-Q for the first and second quarter of 2025. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update them as a result of new information or future events. We may also reference certain non-GAAP financial measures.

Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website along with the slides that we will use as part of today’s discussion. Finally, nothing here shall be deemed to be an offer or solicitation to buy any investment products. Kelly Young, our President and Chief Executive Officer, will lead the call. I am pleased to turn the call over to Kelly.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Thanks, Melody. Good morning everyone, and thank you for joining us today. I’m thrilled to share our Q3 2025 results with you. As Acadian continues to grow and reach new heights, every milestone we hit reflects our team’s discipline and dedication in executing the organic growth plan we articulated.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: I assumed the CEO role at the beginning of the year.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: We remain focused on expanding targeted product and distribution initiatives to deliver long-term growth and shareholder value. Beginning on Slide 3, Acadian Asset Management Inc. is the only pure-play publicly traded systematic manager. Founded in 1986, Acadian has pioneered systematic investing and we continue to lead the space through constant innovation. We have delivered sustained outperformance across various investment strategies and through numerous market cycles. We manage $166.4 billion of AUM and are a pure systematic manager applying data and cutting-edge techniques to the evaluation of global stocks and corporate bonds. 95% of our strategies by revenue have outperformed benchmarks over a five-year period with a 4.5% annualized excess return. Our competitive edge comes from a combination of world-class talent, data-driven insights, and innovative tools which enable us to generate unique research and risk-adjusted returns that help our clients achieve their long-term investment goals.

Our investment team is comprised of over 100 individuals with a depth and breadth of experience across many disciplines of finance, statistics, and economics and a shared culture of collaboration and innovation. We’re implementing focused product and distribution initiatives to drive sustainable growth which I will discuss in more detail. Slide 4 showcases Acadian’s Q3 2025 strong performance. Our U.S. GAAP net income attributable to controlling interests was down 11% and EPS was down 7% compared to prior year due to increased operating expenses driven by increased non-cash expenses representing changes in the value of Acadian LLC equity and profits interest. Our ENI diluted EPS of $0.76 was up 29% and our adjusted EBITDA was up 12% driven by significant growth in recurring base management fees as well as share repurchases.

We realized $6.4 billion of positive net client cash flows in Q3 2025, 4% of beginning period AUM, the second highest in the firm’s history, driven by enhanced, extension, and core strategies such as non-U.S. equities. AUM surged to $166.4 billion as of September 30, 2025, marking another record high for Acadian. Turning to Slide 5, Acadian’s investment performance track record remains strong despite a more challenging recent period. We have five major implementations which comprise the majority of our assets as of September 30, 2025. Global equity, emerging markets equity, non-US equity, small-cap equity, and enhanced equity have 100% of assets outperforming benchmarks across 3, 5, and 10 year periods with one minor variation. Global equity markets delivered strong returns in Q3 of 25. However, crowding in lesser quality high beta stocks created a more challenging environment for Acadian’s fundamentally driven quality-oriented approach.

We have seen these periods before but remain confident in our approach and believe we are well positioned for when markets refocus on company fundamentals. Slide 6 details how our disciplined systematic investment process has weathered various market cycles and generated meaningful long-term alpha for our clients. Our revenue-weighted 5 year annualized return in excess of benchmark was 4.5% as of the end of Q3 2025. On a consolidated firm-wide basis, our asset-weighted 5 year annualized return in excess of benchmark was 3.5% as of the end of the quarter. By revenue weight, 94% of Acadian strategies outperformed their respective benchmarks across 3, 5, and 10 year periods as of September 30, 2025, and by asset weight, 90% of Acadian strategies outperform their respective benchmarks across 3, 5, and 10 year periods.

Next, on Slide 7, I’d like to focus on Acadian’s extensive global distribution platform which has helped us achieve robust gross sales and will continue to be a.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Major driver of growth in the years ahead.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Acadian has had a strong global presence for many years with four offices headquartered in Boston, London, Sydney, and Singapore. We have continued to expand our client and distribution team with over 100 experienced professionals serving more than 1,000 client accounts in more than 40 countries. The team has established strong, deep relationships with many institutional clients as our average client relationship length with top 50 clients is over 10 years. We work with over 40 investment consultants across market segments and geographies, leading to a diverse client base invested across multiple strategies. We had $39 billion of gross sales in the first nine months of 2025, which has surpassed our previous record of annual sales of $21 billion in 2024.

In tandem with expanding our distribution capabilities, Acadian’s business and product development team have been focused on expanding our strategy and vehicle offerings in high demand and growing areas where Acadian systematic approach is particularly well suited. Our current pipeline remains robust after the funding of several large mandate wins in Q3 of 2025. Moving to Slide 8, Acadian standing as a highly regarded institutional asset manager is a testament to our proven investment process as well as Acadian’s world-class investment and distribution teams. We have five clients among the top 20 global asset owners and 24 clients among the top 50 U.S. retirement plans. More than 40% of our assets are from clients invested in multiple Acadian strategies. Our client base is diverse, with 43% of assets managed for clients outside the U.S.

We offer over 80 institutional quality funds for investors, and we achieved $39 billion of gross sales in the first nine months of 2025 and reached $166 billion of AUM as of 09-30-2025. Slide 9 highlights the sustained momentum in Acadian’s net flows. We realized positive net flows of $6.4 billion in Q3 of 2025, the second highest in the firm’s history, representing 4% of beginning period AUM. This quarter’s net flows were diverse across products and client types. Both enhanced and extension equities generated strong NCCF, and core strategies such as non-U.S. also saw meaningful net inflows. Year to date, we generated net flows of $24 billion with positive flows of $1.8 billion in 2024. We have now generated seven consecutive quarters of positive net flows. As indicated earlier, our current pipeline remains robust after the funding of a number of significant client wins year to date.

I’m now going to turn it over to our CFO, Scott Hynes, to provide you with more detail on our financial performance this quarter and an update on capital allocation.

Scott Hynes, Chief Financial Officer, Acadian Asset Management Inc.: Thanks, Kelly. Turning to slide 11, our key GAAP and ENI performance metrics are summarized here. As previously noted, we manage the business using ENI metrics, which better reflect our underlying operating performance. You can find complete GAAP to ENI reconciliations in the Appendix. Let me now turn to our core business results starting on slide 12. Q3 2025 ENI revenue of $136 million increased from Q3 2024 by 12%, primarily due to management fee growth, partially offset by a decline in performance fees. Management fees increased 21% from Q3 2024, reflecting a 34% increase in average AUM driven by strong positive NCCFs and market appreciation. Moving to slide 13, in Q3 2025, our ENI operating margin expanded 157 basis points to 33.2% from 31.7% in Q3 2024, driven by increased ENI management fees.

Our Q3 2025 operating expense ratio fell 480 basis points year over year to 43.3%, reflecting the impact of improved operating leverage. Our Q3 2025 variable compensation ratio decreased to 41.5% in Q3 2025 from 43.3% in Q3 2024. We now expect that our fiscal year 2025 operating expense ratio will be approximately 44% to 46%, while our fiscal year 2025 variable compensation ratio is now expected to be approximately 43% to 45%. Turning to slide 14 on capital resources, I’ll focus on our strengthened balance sheet and the refinancing of our $275 million senior notes. This morning we noticed the redemption of these notes that were to mature in July 2026. We’ll be funding the redemption with a committed three-year bank term loan and balance sheet cash.

The term loan will have a floating rate based on SOFR and does not require annual amortization or principal payment prior to maturity and it is prepayable at any time with no fees or costs. We expect the senior notes redemption to be completed and for the term loan to fund around December 1, 2025. As of September 30, 2025, prior to the senior notes refinancing, our gross debt to adjusted EBITDA ratio was 1.4 times and net debt to adjusted EBITDA ratio was 0.8 times. As adjusted for our senior notes refinancing, our gross debt outstanding declines from $275 million to $200 million with our gross debt to adjusted EBITDA ratio moving lower to approximately 1 times and our net debt to adjusted EBITDA ratio to approximately 0.9 times. Stepping back, this refinancing transaction is consistent with our disciplined approach to maximizing shareholder value.

It increases our balance sheet flexibility, enables further deleveraging, and enhances cash flows to capital management priorities including investments in organic growth, share repurchases, and dividends. Moving to slide 15, we have a track record of creating significant value through share buybacks. In recent years, outstanding diluted shares have decreased 58% from 86 million in Q4 2019 to 35.8 million in Q3 2025. Over the same period, $1.4 billion in excess capital was returned to stockholders through share buybacks and dividends. During the third quarter of 2025, we repurchased 0.1 million shares, or $5 million of stock, at a volume weighted average price of $48.58. Acadian Asset Management Inc.’s board declared an interim dividend of $0.01 per share to be paid on December 24, 2025, to shareholders of record as of the close of business on December 12, 2025.

Going forward, we expect to continue generating strong free cash flow and deploying excess capital that maximizes shareholder value. I’ll now turn the call back over.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: To Kelly before moving to Q and A, let me recap some key points. Acadian is competitively positioned as the only pure-play publicly traded systematic manager with a nearly 40-year track record and competitive edge in systematic investing. Our investment performance track record remained strong this quarter with more than 94% of strategies by revenue outperforming over 3, 5, and 10-year periods. Business momentum continued in Q3 2025 with net inflows of $6.4 billion, the second highest in the firm’s history, and with record AUM of $166.4 billion. Q3 2025 financial results included record management fees of $136.1 million, up 21% from Q3 2024, ENI EPS of $0.76, up 29% from Q3 2024, and operating margin expansion to 33.2%, up from 31.7% in Q3 2024.

Finally, capital management remained a focus in the quarter as we repurchased 0.1 million shares, or $5 million of stock, and strengthened our balance sheet with the announced Senior Notes redemption and Term Loan refinancing. Acadian is well positioned to continue to drive growth and generate value for shareholders through targeted distribution initiatives and new product offerings. Our talented and dedicated team is acutely focused on achieving these goals and I look forward to building on the momentum we’ve seen year to date. This concludes my prepared remarks.

Conference Call Operator: At this time, those with questions should leave their phone receiver and press Star followed by the number one on their telephone keypad. To cancel a question, please press Star one again. Please hold for a brief moment while we compile the Q&A roster. Your first question comes from the line of Kenneth S. Lee from RBC Capital Markets. Your line is open.

Kenneth S. Lee, Analyst, RBC Capital Markets: Hey, good morning. Thanks for taking my question on the institutional pipeline. You mentioned that it still remains robust. Wondering if you could just talk a little bit more around the composition. Any particular strategies or strategy buckets that you’re seeing demand in from clients. Thanks.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Hi Ken, it’s nice to talk to you again.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Yes, as I noted, the pipeline continues.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: To look very robust, and the themes that I think we talked about on these calls earlier in the year continue. So enhanced equity continues to resonate with a number of our clients, particularly I’d say our international clients outside of the U.S., although increasingly within the U.S., and we’ve seen a real pickup of interest in the second part of this year in our extension strategies. I would say that’s primarily driven by U.S. clients, but again we’re starting to see some interest there outside with non-U.S. investors. Those are clearly two themes that I think have continued through 2025 and continue to see really robust interest in our core strategies, where obviously we have very long-term attractive track records there, and particularly I’d say international equity clients looking to allocate perhaps to strategies that aren’t sort of U.S. dominated. Continuing to see a real interest there.

The pipeline looks very diverse by strategy, continues to look very diverse by client domicile, and we continue to edge closer to that 50/50 split of AUM between U.S. and non-U.S. clients.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: We have been targeting for some time.

Kenneth S. Lee, Analyst, RBC Capital Markets: Gotcha. Very helpful there. Just one follow up if I may. Any update around outlook for Capital Management? You mentioned plans to redeem the senior notes as well as refinance with the term loan. Relatedly, any plans about how you think about paying down that term loan over time? Thanks.

Scott Hynes, Chief Financial Officer, Acadian Asset Management Inc.: Yep. Hey Ken, it’s Scott. Thanks for joining us more. It’s good to talk again in regards to capital management. I think, look, I would anticipate that we’ll continue to be pretty athletic in this regard. We feel really good about the senior notes redemption and landing with the committed financing we have in place with a new term loan. A lot of flexibility there and I think you’ll see us look every quarter to stare at, you know, what’s the best answer for our shareholders, recognizing we do have that prioritization as we’ve spoken about before about organic growth and prioritizing organic growth and then going from there in terms of return of capital to shareholders. I think there is a balance. I think we’re really well positioned. I think, you know, we’ll be looking again every quarter. You saw this quarter, I think that’s reflective.

We have a lot, as you can see, going on this quarter, another great quarter performance, strong free cash flows. We did have this refinancing and yet we were still in the market doing share repurchases. I think that’s reflective. Again, my words, I think we’re going to be pretty athletic in this regard every quarter, looking to step into the market when appropriate in terms of share repurchases while still being mindful of that debt position. This was, as you can see, clearly a deleverage move. We think that’s the right position to be in. I would note in this regard that we also upsized our existing revolver. I think we’re marching to a place of continuing to have a little less leverage. That $200 million term loan is a lot of flexibility there for us to repay early. No fees or costs associated with that.

We’ll be revisiting that, you know, every quarter. Does that make sense?

Kenneth S. Lee, Analyst, RBC Capital Markets: Yeah, that makes sense. Thanks for that color there. If I could squeeze one more question in, I really appreciate the detail around global distribution. Just curious what’s been driving the pickup, the meaningful pickup in gross inflows that you’ve been seeing over the last year or two. Were there any specific initiatives or efforts within the distribution platform, or is it more related to what you’re seeing in terms of its client trends? Thanks.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Sure.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Yeah, I think it’s a bit of both, Ken. I mean, we’ve very thoughtfully added resources to our distribution and client service teams across the globe to continue to service our clients to the best of our abilities and obviously continue to focus on sort of newer channels or channels that have been underpenetrated. I do think that it’s a testament to the quality of the team that we’ve built here.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: We’ve also very intentionally tried to build.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Out a suite of pooled funds. We have a UCITS range that works very well for our non-U.S. clients. We continue to build out our Delaware and CIT ranges within the U.S., so again, I think making ease of access.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: For clients, a lot better.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: I do just think, as well as we talked about, things like enhanced and extension strategies are capturing the imagination and satisfying a client need at the moment. I think it’s a combination of all of those things. Again, being very intentional about adding to an already incredibly talented team here and being very intentional about that.

Kenneth S. Lee, Analyst, RBC Capital Markets: Great, very helpful there. Thanks again.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Thanks.

Conference Call Operator: Your next question comes from the line of John Joseph Dunn of Evercore ISI Institutional Equities. Your line is open.

John Joseph Dunn, Analyst, Evercore ISI Institutional Equities: Thanks, guys. Yeah, I wonder, you just talked about like the domicile mix of your AUM. Could you remind us of the geographic mix of your investment strategies, and then just any change you’re seeing in the demand for non-U.S. exposure relative, you know, to the last year or so.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Sure, yeah. Nice to talk to you again, John.

Melody Huang, Senior Vice President and Director of Finance and Investor Relations, Acadian Asset Management Inc.: Yes.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: We have seen a real pickup in interest, I would say, over the last 12 months in international strategies. It’s one of our core strategies here, I would say, alongside global and emerging markets, and is, you know, our longest track record at the firm. Acadian is very much known for international investing, and we have, I think, a strong brand advantage there. What’s been quite interesting, I think for us, is not just seeing a pickup in interest of these strategies from our U.S. domiciled clients, but starting to see some of our non-U.S. clients thinking in this more sort of international or ex-U.S. space. I think there are different drivers, but that’s sort of a newer trend that we’ve seen, and I certainly think, you know, we’re going to benefit from tailwind there, given our long-standing track record and the established brand in that space.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Gotcha.

John Joseph Dunn, Analyst, Evercore ISI Institutional Equities: One of your competitors recently said that they’ve seen other managers kind of pulling back from emerging markets over the past year. Would you agree with that, and maybe just a little more on emerging markets specifically?

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Sure, yeah.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: I think if we’d been.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Talking in 2024, I would have probably.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Completely agreed with that statement.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: I think through this year we are.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Seeing pockets of interest in emerging. I think Acadian has been established as an emerging markets manager since the early 1990s. I think that very strong, robust track record that dates back decades means that perhaps we’re kind of front and center when folks are thinking about systematic exposure to emerging markets. I certainly don’t think that we’re seeing the level of demand there that we are in things like developed international. I think that’s a fair statement. I think we are seeing some pockets of interest, be it on the back of two or three years of relatively flat demand.

Kenneth S. Lee, Analyst, RBC Capital Markets: Got it.

John Joseph Dunn, Analyst, Evercore ISI Institutional Equities: Could you just kind of outline the puts and takes of the fee rate from here?

Scott Hynes, Chief Financial Officer, Acadian Asset Management Inc.: Yeah. Hey, John, it’s Scott. As you know, we’ve, and Kelly’s already touched on it, we’ve seen a bit of a transition and it’s purposeful given the amount of traction that Enhanced specifically has gotten in recent quarters. Particularly in the second quarter, the prior quarter when we saw another really strong quarter of inflows, particularly in Enhanced, you saw a bit of downward pressure on the fee rate. For all intents and purposes, we’re more of a run rate reflecting those inflows and Enhanced in a large way in the second quarter and again in this quarter. As we said prior, in all candor, this is an output and there’s a lot of things at work here that are not in our control. More specifically, broader market levels and where we’re seeing client demand.

As Kelly said, Enhanced has gotten a lot of traction in recent quarters, and we’re staring at the pipeline, as she already articulated, it’s still there. However, there are other products and I would say, to be clear, that when we think about Enhanced from the start of the year and the management fee rate and call it upper 30 basis points, it would often be somewhat lower than that. Other products that we are seeing also traction in could be higher than that upper 30s basis points rate. I say that in that we have seen some chunky installations and it can move around quarter to quarter. That’s a long way of saying we have seen this direction of travel closer to the mid-30s range.

I think, all else equal, looking at the pipeline today, you could see another basis point to come lower perhaps next quarter, particularly if Enhanced materializes the way that we’re staring at now at the pipeline. A few chunky wins and another product which are very much on the table could have a different effect. That’s a long way of saying there has been this dynamic. I think you could continue to see a little bit of downward pressure in the fee rate given the ongoing traction Enhanced in the fourth quarter. I’ll tell you, it’s not something that I think we can continue to pencil in necessarily. There’s just too many factors at work, particularly when we look at 2026 and beyond. Hopefully that’s of help.

John Joseph Dunn, Analyst, Evercore ISI Institutional Equities: Yeah, it is.

Kenneth S. Lee, Analyst, RBC Capital Markets: Gotcha.

John Joseph Dunn, Analyst, Evercore ISI Institutional Equities: Thanks very much.

Conference Call Operator: Your next question comes from the line of Michael J. Cyprys of Morgan Stanley. Your line is now open.

Michael J. Cyprys, Analyst, Morgan Stanley: Hi, good morning, Kelly, Scott. Question for you on the platform today. Clearly a lot of momentum with your enhanced and extension strategies. When you look at the platform, are there any capabilities, geographies, any areas that are lacking today that could, no pun intended, enhance your value proposition with clients? Just curious how you’re thinking about inorganic versus, you know, organic initiatives.

Scott Hynes, Chief Financial Officer, Acadian Asset Management Inc.: You look out from here.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Hi, nice to speak to you again, Michael. Yes.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: You know, as you’ve noticed, enhanced equity and extension strategies have been a great story for us, as have our core capabilities. I think being able to support clients as they’re looking at different points on the risk curve has been very helpful for us from a business and organic growth standpoint. We haven’t touched on systematic credit, but I think, as you know, we very actively have built out an offering there. I think still, perhaps over the medium term, we expect to see much larger flows there. We’re coming up on our two-year anniversary of our longest running strategy in that space next month.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: As we.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Think about pivoting away from perhaps some of that equity exposure, although I do feel much more comfortable now than a couple of years ago with how diversified that is across the risk spectrum across geographies. Systematic credit is also something that the team is very focused on, having some really interesting conversations with existing and prospective clients there as systematic becomes, you know, gains traction and is gaining attention in the credit space. I think for us in over the sort of short to medium term that’s going to continue to be a strong area of focus and again are hopeful that we see assets follow those strong track records that we’re building, be it that we’re still sub two years on those track records as we sit here today.

Michael J. Cyprys, Analyst, Morgan Stanley: On the systematic fixed income, maybe you could elaborate on how that’s contributing today, how you think about that evolving over the next couple years. What are some of the steps you’re taking around to build that out, and do you feel you have the capabilities on the fixed income front, systematic capabilities to capture the opportunity set?

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Yes, absolutely. I mean we hired a gentleman, Scott Richardson, to run this initiative three and a half years ago who comes with an extraordinary pedigree in both equity and fixed income investing. Scott has built out and handpicked, I think, an outstanding team here today of a dozen or so people. We feel very well placed. We have been very intentional about how we have gone to market with these strategies. As I say, our longest U.S. high yield strategy will hit its two-year anniversary next month, closely followed by our global high yield and our U.S. investment grade strategies, all between a year and two years. I think we have certainly built, very intentionally built, the capability. Those track records are still in, I’d say, incubation stage, but not early incubation, I think much more midterm.

We know in fixed income, expectations around returns are that much smaller than they are in equities. Those three-year track records, I do think, are going to be very important milestones for clients to gain comfort. Certainly, when I look at the team that Scott has built, when I look at how integrated that is with the existing research team, the infrastructure of the firm here, I think we’re going to be very well placed over the medium to long term in terms of generating meaningful returns for our investors and meaningful cash flows as well. I feel very confident about it as we.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Sit here today with all the.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Caveats that again, I think in this type of asset class, you know, three years is clearly the benchmark that clients will be looking for in terms of gaining comfort. I do think that what Scott.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: The team have done in terms.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Building very consistent positive performance month over month, quarter over quarter, is starting to really resonate. I feel very confident where we are today and the expectations of that platform being able to manage $10 billion, $20 billion plus, certainly is the capability there over time. I just think, as I say, that those three-year track records are going to be perhaps more important here than they might be in some other more adjacent areas of our equity business.

Scott Hynes, Chief Financial Officer, Acadian Asset Management Inc.: Great.

Michael J. Cyprys, Analyst, Morgan Stanley: Thanks so much.

Conference Call Operator: As a reminder, please press star 1 on your telephone keypad to ask a question. This concludes our question and answer session. I’d like to turn the conference call back over to Kelly Young.

Kelly Young, President and Chief Executive Officer, Acadian Asset Management Inc.: Thank you everyone for joining us today and I wish you all a great day. Thank you.

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