Franklin Resources (BEN) 30 Apr 202020 Q2 Earnings call transcript

Welcome to the Franklin Resources Earnings Conference Call for the quarter ended March 31, 2020. My name is Darryl, and I will be your call operator today.

Statements made in this conference call regarding Franklin Resources, Inc., which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from any future results expressed or implied by such forward-looking statements. These and other risks, uncertainties and other important factors are described in more detail in Franklin's recent filings with the Securities and Exchange Commission, including in the risk factors of MD&A sections of Franklin's most recent Form 10-K and 10-Q filings. reminder, is a recorded. As Instructions] this being conference [Operator [Operator Instructions]

Johnson, I At and turn Ms. would the time, CEO, may call Johnson. President to Resources' like this begin. Franklin over Jenny you to

thank second fiscal Templeton's and discuss quarter you today results. us Hello, to joining Franklin for

I Significant events first To January. and start, and continue opportunity is for my be promise for CEO. our in excitement With earnings at we gratitude conference President since in company that holds have call first day, our and new back as with to unfolded each future official our business. and call held filled quarter world our for earnings and conference our this the industry the

Chairman; CFO. and Matthew joined I'm Today, Nicholls, Executive by Greg our our Johnson,

your everyone are We on ones and and call this love healthy. that safe staying hope

is an difficult maintaining to proud We're the business while on our health top and and families. running on clients. keep they've strong of under our grateful resilient As of their ongoing our extremely efficiently efforts employees and how their been organization, and priority the our focus well-being conditions for these

say our recent period, are increased critical the with also a our amidst respect volatile selection today's more conversations With investment market are like encouraging over teams, compelling results. encouraging opportunities volatility. than It's sharply the of note that who result from number tomorrow's dislocations to producing finding volatility, that are to strong that ever. strategies priorities, recent market alpha. is And We had security to the business I've

in reflects quartiles and is quartile. among U.S.-listed the X/X which ETFs March the macro of municipal strong funds has the in as respective and across were global such which two our of of our of equity, from strategies sharpest frame others. in and the were quarter, equity, bonds, For more February than during Performance the period global through been time approximately investment XX, their many first Morningstar areas those XX categories, half market mutual U.S. top volatility the

outperform continued funds April. to Our through

on the close underway. integration in of acquisition quarter plans Legg third Mason remains quarter, Our - target and are well calendar to third

We to continue one. new create that and is the value and combined of these long-term franchises strategy diversify to our see opportunities the right

balance to Additionally, continues our us to strong tremendous our sheet with business. flexibility provide evolve

the remain I and have foresight ever than success an continue financial helping we talent, their our to more as our clients organization, confident that while achieve long-term goals. discipline

to up questions. I'd open it your to Operator? Now like

from Suisse. questions. questions first Siegenthaler your Our come Please Credit the of line proceed with of Craig

confirm morning, good level transaction Mason, can need merger in to outflows of net for you're the that healthy. Franklin staying not are net on color Hope criteria elect consent. Mason this you order the all more constraint. exceed before Thanks just everyone. client at In agreement And there's Legg I Legg would client wanted this XX% with pursue to outflows to closes transaction? the a

have I'm Matt Nicholls that. to answer going Yes.

that's Craig, Yes. correct.

it's level And you not an pursue just all Legg to transaction where it. any that consider transaction? would there the AUM given is Got cash for Mason

No.

Our next Evercore Glenn line from ISI. of of questions the Schorr come

Okay. good With question a those answers, lead into that's this then.

lever can fixed specifically income you for platform. across talk how opportunities have their And to what to closing. distribution consolidation after and fund let's prior what do about global like I'm So in closing you wait and things you interested

said, companies pre integration of as on close, of and we've really focus is integration our distribution. So holding

consolidation. focused and on means that leaving that, fund we're little the our in alone, not So - affiliates overlap there's said Having very which products. really

gaps. said, filling As about really was we this product in

is. focus where area overlap of little very our there's so that's And But anyway.

that, Legg I have think Mason does not we presence. just to various presence have where there's to add that countries

talked about of various focus things company we in too, those a terms area. calls, obviously, So operational a in on key is we're holding focused extensively the is Distribution, the And of side of on at as efforts. terms big growth. the potential planning

Our of next the of questions JPMorgan. line Ken from Worthington come

to be the through to didn't market interesting coronavirus were to almost high, the Mason path the lot acquisition, the a quarter. as distribution quite higher Franklin? But back market, see the flows where on they with can on but even on with Legg that you just bottom, that you give through, position. sales you're both us maybe impact much from positive off and there's now in to December get the continue sales for get Outflows recovering conditions the they back with a too walk Clearly, side, the net what path doing product,

Yes.

just of improvement look I would was. couple say The - you here hit that improving April to a consistently own we bump - within sort And numbers, in things on our we've of firm, back there. until our numbers March. a are where been April our So that

was that thing. first So

And in - through. flows XX% or performance. had we all, as of top of And that volatility. assets performing quartiles of follow almost tier period funds we've our the Second course, in this of our mentioned, carried that's

world like So Global its has bond Bond by nontraditional you global Fund outperformed by at and prior category bond bond. its take category X%. X.X% Morningstar peer the of

active the follow. as flows get So you volatility show it's with And will managers to markets the have like outperformance, this outperformance. where

in then We've invested a And good SMA. distribution. about, things talked lot we've we've progress like as seen on

U.S. Our far the as just is due and outperformance. ETFs it's that our its that been inflows, getting, it's have deserved deserved now around the honestly, recognition as net equity in

anything? want And so we've seen there. you good positive add flows Greg, to

as And Jenny we're one numbers. seeing add performance just in short-term category think some relative well mentioned would during the some downturn. that Templeton's that certainly, that the of I I

seeing portfolio. it lot situated out Jenny concerns the is And that for muni unexpected. lower risk there markets, us are and can down people's mean with killers year in risk while the in ahead category We've all interest about said think as lagging everyone strength Benefit I the there. of really as it's its very in income there. good big how uncertainty telling seeing think getting ideally defensive as we're these industry a And munis, we're reception work the payout. global Street, the strong we're the put it's we've I the a it's on nature capital we're I And performance heightened. and bond, which market, to a not in flows times of the far has X its before, and And is had fund, side. performance-wise, dividend awareness as in as mentioned,

under more just been yield it's counterpart. generally high pressure with So to its

this holds that should continue. in market, yield So if high in there

fund think the are leveling we'd we see that the that to got So other areas income Global we're strong and performance. and but I like off. I hopefully, Fund Bond are seeing that, some we've to think And strong starting ones a see interest

Sorry.

couple just other a things. Let me add

on others, levered in say, you there. lot for solid really there's really us We credit is so to talking market, that will bankruptcy present already And the team there's the because want true to just We on munis. levered has and been moved heard As states think some opportunities municipal munis, munis differentiate. gain hear time and noise Greg I no bond enabled a to of didn't in muni munis the I on pointed as about as been you dislocations actually, out like raise area, higher which market. had have a of the quality, the

fund. So situations we're for BSP. billion debt has $X.X special this about private and just And under BSP as billion that. mentioned, window, excited then their raised Greg including in $X

say as And end, more look under management. quite similar We end to can we're maybe Yes. - little the month far than we're well, to picture basically quite February, into we And a flow just month $XXX at that that. to at expect very today February, the close over but bit elevated there. just will billion

Fannon line with questions next Jefferies. come from Our the Dan of

we about the maybe looking remainder think the expense here. if talk about either how and your should core from kind and to given address for what's levels, Franklin you the that some Matthew, levers the year at happened, you're flexibility lower outlook - this of within of of AUM could

of Yes. Thanks, on that can of base appreciate, for all I'd X% current certainly really the double as based we'll to our down probably you've I we're that bit X.X% now. guidance disciplined think can as management. But we the hopefully, to hard, we'd XXXX non-S&D display for say seen we've the a quite circumstances expenses, as facing. based go Dan. little - to is guide deeper in year sure. all for previous using And everybody than continued I unique mean, that, expense a quarter, say It's that,

down between it's XXXX. versus X% X% probably So and

flows. on kind Great. more That's just to trends helpful. the of And back recent

change talk of which gross Just redemptions sales the curious a of also period did you terms is U.S. And gross where about are rate about equity, within success? sales have quarter. March in coming. versus that Could you seeing good in that funds gross

been we of institutional the about advisory and inflows $X accounted KX's in a been very very - equity has been the has others, as picking has very, Tax-Free good. - up. had which We're billion for, So I getting Franklin March, U.S. - income And had the is fixed but They have redemptions think, wins multi-asset The couple large performance was of the the in actually strong. and it fixed in been that. large strategy. in income

to new quarter, was DynaTech think five particular style. just $XXX and up SICAV net flows about funds I from well. kind continues we as the - relatively a our for Fund strong momentum. U.S. just equity stars, million now in lot just Fund flows I the and our has have a We're million. performance It's the then which billion and And that off leveraging of about I in base, our in Yes. base Opportunities of from strong Innovation side, fund, small mean, size in And $XXX $XX excited and had kicked which U.S. has

extremely obviously, downturn, where well well. that market has a technology, this group has in really to and, So continued extremely do even done

benefits [indiscernible] That

And BSP, yes.

Katz the line come next Our questions of Citigroup. with Bill from

to everyone's on year-on-year, reinvestment permanent some staying extent revenue turn of that how that discussion the the would is for expense on a much I plus perhaps? okay. to drop sort potentially just of hope the Of some versus Maybe that Matt. moment, delay might X% improve X% backdrop

grow as to hope again. and we permanent I hope firm for the comp isn't continues evolve comp improvement Well, the in because

as the you the million part ensuring XXs around high very I in that IS&T at - disciplined XXs, look think comes could permanent. We're per being quarter. pretty being at low in

pretty areas we're certain confident. that in that includes So investing And of technology.

T&E X% of reprioritization, through the for nobody's lower to we by year, lower being and costs. includes projects, able expect Obviously, going IS&T G&A, in of because also low about I'd say is definition for X% to XX% period, lowering which that parts there's invest be shifting XXXX So to exceptionally this permanent. traveling.

we G&A, of impairments expect in XX%. some just back So at expect for come way. items But that this in year, and up. still, And to we'd which Franklin again, be level comes excluding things, under down the could And, disciplined to like we'd that that is a stand-alone. expect to stay that one-off

course, with about look Of what what would in point Mason this time. it we Legg - can't this at like talk

the leasing up occupancy as gone it's to I've I by real more paying real our and here offsetting then expense, And think talked parts same bit a that time, that then, But tenants are us. of before, owned this estate. we've still at real estate of the our estate repositioned little built parts we're about

sort I'd how So of present that, Bill. that's

benefits, that we've made obviously, and other the remain adjustments more are or G&A that expense comp the IS&T variable. So ones. - across expenses will other we've permanent But

then just follow-ups. And two Excellent.

now milestones sort incremental terms are terms you Just can completion? in walk we deal, between of of in through the us now of and where

Yes.

going we say But operate and planning, So - can't closing we have streams we're signing as we streams one until we work company, know, closing. we're two have around work you And as on so critical that between X. where I'd not have for ready closing. September

So approximately we September - X.

need of two two functions. holding streams good major only one, time companies. ready. company a We obviously the get one. The holding don't need work We we is, So amount to have

holding around would for retail level, distribution So and Group, - planning look which Legg the the that most and Distribution working the LMGD result Mason the that - that will like be. is at is really what then we for what of And the what is which part. one on we're company what second

institutional own is you - services, the global that's distribution. larger with our their As distribution know, our advisory much have affiliates, product marketing they area. And which

holding the of about do organized. be planning But talk a So more We'll month at in there going both the are closing forward. function say on before going Jenny how should And that we're strategic and feel in of streams terms quite company on least side. ready distribution going things probably we those. I'd side, to

would I there's schedule, go required. we've regulatory and several a have of the we are on is have that add that on gotten path. And piece Yes. this approvals to the process. that we're of already other are just Those - getting in And been lot approvals

distribution As the you different have underlying when Templeton Franklin we world far about distribution, to at as going look all the the brands will have. to think that is

And so only a supports are this structure new organization. from of we it not the we that in that be way we organizations, get ensuring but what best that both will

focused, very Yes. And we're Bill.

in know As the stability described business, I and in importance this particular. think distributors continuity of we very with we and client the clearly

focused at the what we we going cost to that. on said were focused do. making on extremely we company extremely exactly we're combined the sure and we're the that same of time, structure delivered So But

just I getting that well, very portfolio I a as think managers distribution the period, efficiencies - done, in out technology behavior advisers amount work are make just and really technology getting and information leveraging observing a this from I would messaging think, And And way. to clients used statement, that's leveraging lead that, change to advisers efficient getting general and COVID the and directly. as quickly really of through could and been to

And more information actually I starting of That's just recognize being XX,XXX to said, it. webinars, like attending I much efficiency over they're had virtual Greg mean mean, the conferences. they able it they're receptive to because And right. one, we've get to the as clients quickly.

Great. just question. final one And

little I it had pretty to February, at the we was about work it broad-based level, Just it looked a in in like back bit terms looks as of look can Because talk qualifying, product maybe, you're seeing February, where you outflow. done some like it?

sounds just sales So in in slowing redemptions? a get stuff gross it this unique trying just little quarter. a of, a of some off Because peter from may sense particular to is bit it the like the

around better. Just little bit trying ins to outs my and hands get a the

too, two Yes. that is March, more wins. number significantly. and the the essentially I gross if are February the the what's took institutional happened redemptions like say And would big you reduced - sales then out have

happens now of in March to get you out. I've a And categories. take that - in - so in volatility, to I you mean it's just are others saw that going sales to lot settling. kind of interesting. are spikes And guess what's in what And I always advantage, of people assessing it's and probably trying spikes on. as in got down kind people too, are periods getting you're redemptions where of get and saying, And

would a a So and slowdown you're generally. say, seeing in in I sales, slowdown redemptions

picture is going that Yes. of net March of - for third way is is for But be one April one about it, flow sorry, at looking flow the of one March. Bill, the third picture to net

Bank. questions line come the of Deutsche from of next Bedell Brian Our

safe Maybe the of just along also. lines and deal. well Legg the I hope staying everyone's

bit are thinking If and Legg having and you're distribution you of can to distribution about a talk impact you about, is haven't deal, conversations and view also does there's the you sense but what handholding clients just sure gatekeepers with of And And along can to market partners talk fact conversations closed a having deal channels. the partners given downturn if those the the little long with really your with in your yet, just get about or not with synergies? that its maybe I'm your the more that that. additional distribution about the the affiliates sort of Or whether thoughts and any lines, sort clients regard will COVID-XX, for you reaching over as of then this anyway? just product out do that even term does change the it rationalization that institutional

institutions clients story. and we that with had the set to So is sure with I'd institutional conversations make first that the calls independently up say Franklin the same Legg

the - and feedback news So good the is wow. was,

consistent are story. guys You in your absolutely

that it there third, saw around at the around as being Franklin's be things actually and kind that Mason. anywhere things the - that because to that. has the has was to and of long-term approach investment for work. of affiliates how fact a neutral from to acquiring Legg was teams affiliates And Legg there wanted was how would certainty then positive they Franklin certainty point Mason positive, feedback ownership the to in there Second was really approached record the place of the independent leaving fit and And

demonstrated record was that. around a so it And

lot a in with we of the investment investment process. that the - go in So muddle they teams confidence and and had the wouldn't

And that take those anywhere last... has it so I Matt, want from would say you neutral that, to been do to overall, positive.

Yes.

Brian, we we a In gross $XXX net number. synergy I'd transaction, of the was terms The say synergy synergy investment. million a when that following about part, announced the number talked net and about

course, don't you of that focused these Of we time. do and the will investment make that synergy in We that, longer million And number. to market be expect over on away. of can right can need $XXX do we period we that extremely conditions, gross a will

at know, - sure is that's - and business you're that The make base there fixed go front-office right exceptional, think, that to our able a and the positioned more company, when retain was combined future bad, base - The expense for the leverage, we to this, and the investing look you in the one, would to have you're and a second for of and would the point board team, of industry. exceptionally in costs company, on. appropriately is is people company's across operations sure million. - the ability So make make so the sure I the you means portion just parts management like is that you a the making as broader I $XXX When market that, an our to control it both two across through various one which say, the I is we be point all asset basically.

to a levers were single in you in do And base. - that there's companies, you have We a have And only think that single where example. will together. so we it from the event that's sustained management have more So risk we market downshift pull much there's about back two we to how perspective. fixed probably for mid-March, a can

We times, obviously, good our hope have to ready difficult want be prepared - to be for very for in company. we we but our industry for also times and

to Greg, want did you that? add anything to

the would - with said, together, of unbiased something putting the it looking through consultants I add to client that to and go engaged their and will and a Jenny advisers, better eye, just intermediaries, our beauty ideal servicing on. be have want consultants two And the And have as platform outside more these platform. from model do of this, the we through size. efficient at to gatekeepers to trying what And and think think I are we an But really working flexibility is distribution what is distribution driving get we what that is. that and view are we're interacting we that's

felt very overlap, major markets. there client strategic And of of of that that, just here. a was be pleased the was filling And base, in scale so we think have the deals again, because think in this other our it I outflows summarize the And gaps, concern there that market less we deal, diversifying nature with adding seen? I'd I When was, the as product that. was concern little in announced kind product will

been with the and I institutions consultants has conversations think initial that the the positive.

feel that still it's while concern again, we early So actually days, is unwarranted. like

helpful. And expenses, Is to that could to XXXX? very down of? then base that That's about the for Is the fiscal $X.X number the off on I right for that basing be that X%. Matt, you've if just confirm of billion talked X%

on on mean, have it be each too not do know, on for what same that adjusted number, maybe distribution the all I to adjusted. Yes. And It's Yes. the on control non far you paying we're in separate have of business a have the the off little the adjusted services. versus your that. the to as to to would the well. bit third-party GAAP this over that's sure going of address It's more about for we what terms as make of going financials, calls on analysts questions models. needs we topic we're Yes, more with

if So trying get at you're Brian. to what well, as that's

America. come line Carrier of next Our of Bank from Mike questions of the

First, the performance. on just

across mentioned You of munis that which see. and equities good some the is areas improved, to

curious of the and how of macro the areas some Income credit, on thinking currencies global through whether exposed, in they've more I'm it's macro about that repositioning. or like are Just and environment energy, series, been sort just

some to the energy thing they've macro, about cash how So global using advantage same take just of opportunities, of that they're thinking higher ahead been with in level environment? series, income this of and then

macro I is in general, And they global mean, say, mean, cash just positioned for defensively position. the a correct. market. have Yes. I higher very would still you're I

say, We've you is S&P unlike continues big very certainly think have didn't the outperforms have technology continued as the - traditional be energy, talk really stronger. And continue you But the that We the continue managers. over changes negative of of the other last know, financials the in in sector a has be so. duration across best-performing we deep about with... off value a organization been lag drag pressure. what with still to a deep will other in prices. these cyclical most that's general, macro side. more our or difficult line rates negative view but the underweighted - case, and quarter I as under cycles, value really COVID exposure I had towards we to all with these downturns, to And negative value, reducing where the much, currencies. around on series view and a that Mutual to continue on taken everything, this unusual mutual emerging kind that's be that nature But group. the gotten entire be would to energy and the the of stocks value growth, were the areas market there, flow with bet

just Okay. a one quick buybacks. Matt, on That's helpful. And then,

prior expected, more as areas pivoted investing near the your focus you've anything price, impact the in given stock and of of a of comments, But moderated, So in term on just changed in backdrop terms ahead. market in the on growth has capital priorities?

No, it I exactly Mike. think right, said you

know, make to As face view, clear, our just it very earmarked And to just of - future. our with cash very to in you in sure be that's company for we're market we've we that very big a to - obviously balanced. a our we company acquire for a a way comes this management. is ourselves And portion equity position the while attractive, think think prudent just our capital when us conservative to it's price we very,

that. got we've So

our to We have use Mason of other take employee don't until we aside hedge it. sort and repurchased capital completely And that, plan closes. and is other now intend from transaction shares our step we grants than shares, grants But opportunistic Legg repurchases, our a the some repurchase shares to to repurchase will after to stock. from back our around

repurchase. sacrament us. of continue to just with pay question dividend. - want Answered the And to we're they We - capital management share a the keep know where are, dividends. - as out the We complete but pretty to you to

the to the other digest. In capital terms management, - can other got because in several from terms of very little we see company purchases expect strategic to inorganic transactions you of we've

got are have wealth quite been which the already obviously, distribution Mason, well. we that we've things Legg and doing. we've And deals, have going management We some

we're of So use terms of inorganic for really now in done capital.

Our KBW. next Lee line from of questions the come Robert of

Most Great. asked. are everyone their feeling questions and well. were hope of my families I

activity, U.S., versus Just be the of sales two differences? Maybe to of some or like seeing mean interesting you're on that? and you it'd see quick improvement in ones. I APAC regional on perspective EMEA, could kind so versus the far maybe maybe give the kind maybe us QX, how the the front

of do improvement. - actually was around a Korea. Malaysia, has where improved that's we have large retail strongest in been That's some some of the But Australia APAC side. that And performance our area big U.S. the institutional regions. win. strength

we APAC in have the well. region as some do So strength of some

heard and much just correctly, that going of now it closing, pretty between that deal were quarters? Great. suggesting refrain you And I repurchases Matt, to from the sure to - couple make next

than other to grants to repurchase modest very hedge - and be to expect minimal. yes, Yes, employee we very going that's But things.

line next Mike Stanley. has of Cyprys come Morgan from Our the question of

arguably function evolve hoping I how other adapting look are little And how might you in, for this wholesaling was current putting and of from function sort of just a we're this environment set you are could guys on the up this and backdrop. home, Maybe wholesaling to just what are wholesaling talk the teams bit about crisis? your not work quite side sales some the techniques of changes and forth? that

countries. because - all, we've been we of a XX first as firm, So in operate

We have over offices. XXX

a We being We video isn't somebody meeting adopted without on to happens the ago, have Years internally there at conferencing desktop. broad that video. global platforms.

to an includes us, trouble. one, a people to which India, as And it so home. shift for was probably a And of where easy our working from had lot transition that employees XX% firm is of in

it. just we this built into so And

hard wasn't been be that actually now to interacting adjustment. clients positive that for was it way. us to want what - make has So is that What

you is beauty can scale. the so And

of after mean, doing region, CIOs have person of give are client a - advisers that series it will on of road client take virtual our And you're - a one it. are what scheduled more have a people accepting just They'll client the we up will and another. doing have I conferences. a You series they virtual shows, day literally or distribution are where finding is meeting are a those calls. - much to the they

And webinars. so had over attending we have, as XX,XXX just I mentioned, clients we've the

out up. podcasts have there been have picked We that

that good is where - distributors volatility which towards highlighting have so advisers their a have it and their they're it. own actually We conferences virtual our - center it within pushing found

the this some much where calls going - want and many do I in types clients that if you're to them absolutely cost-effective, go I So think it's just in these both future? see effective and think better more that ways, does of time your a way. standpoint, it's to from

So the people. future. not much replace completely wholesaler more I model going the to is the visiting think to be of going hybrid It's

just You're less in-person have to lot going visits. a

little hoping Maybe bit as there. was Great. an And just update just question. a could a worth talk buildout. the net you I follow-up about high

that just done be acquisitions. maybe an You've the And would some overall on progressing? buildout strategy and How helpful. update is

Yes.

worth So been sticky a business business very has One those billion. a just Fiduciary is needs core, in net that Franklin premier our more And Trust lot scale. it's $XX great reasons. great it's we Templeton. a is it older a business itself. think It's for of This of about than high is but business, net business worth. really one a is high

more And to so we scale. wanted get

needs Trust - and the two the foundations trusts in it gave for in acquired and So renowned special specific to in but managing us Trust, U.S. for have for for capabilities. that, is add not on endowments - we who just Penn people business, those. capabilities ESG. to we And in Penn those when has - specialty Athena its scale Athena children

assets that of we with So do under XX%, adding - Trust's increased get capability, the Fiduciary not adding management. we're but scale by only size of

based, world really more What requested by are are that, pressured was people of addition of In advisers. ultra-high to a provide worth management. to fee clients to being getting wealth to just advisers historically preserved moving net financial more is as now the

planning, planning. even things So estate tax like efficiency, financial

us firm clients their be to And to the to for it council and some able to within financial our of advisers. just education, our so educating as about webinar talk resource planning. of have to offer that just this allows they having trust be a take them, able - about can to So heads an talk one doing advisers of estate we

so of growing loyalty And adviser, adviser that we and, that capabilities, greater types build think, fee-based will with network. these

prerequisite this solidify business. around a acquisitions was, agreeing I to And externally of were build business Trust. profitability was business. way, this last are helping also to also the very We Trust, represented we've from out don't important we that help profitability That - the report the on story record certainly acquisitions. some focused the been through around an with the quarter And for - think, of Fiduciary pleased though even we almost Fiduciary really which it this results

So we're pleased quite with...

had be have referrals about Penn Athena pipeline million and And actually Trust We closed one was positioned haven't been are able referrals. Athena not the have Trust just we've a on referral can. yet, to again, Fiduciary we $XXX broader but have from Athena. actually, client that that would that we actually to from the in Well, take

Blostein of line questions next the Sachs. from Goldman come of Alex Our

Travis who sure not it's I'm is, but Blostein. Alex

said, We said We Travis? who's thing. same the

Travis? Who's

of one. things. called been a Travis lots I've new is

just So guys around capital another one management thoughts. for you

the deleveraging the closing understanding until curious I'm closes, get deal returns and on buybacks of for once through So to thoughts your approach we're here but maybe deal. between that priorities capital the Legg

going a have you're to think bit a little debt net position. of I

So think of then, on done just to for your Trust around you how kind Matthew, are the you're foreseeable sort Fiduciary guys talked I quickly M&A And of future, looking that build kind down. the size and of M&A about doubling of through point curious you deals. with saying

we that's that's the deal-making also table? of should off kind that part the So consider of

Yes.

things of couple there. a So

Trust of do this we're year. sort than not to front. the would do but still First it on a of anything through Fiduciary transactions, the more We we've material taken intend around be capital really increased management. to about of XX% all, that grow Fiduciary could Trust. talking by smaller actions We couple We already

to and was bolt-on be grow to business. type I smaller don't, we we're say involving that move material is point any anything that states, a there But with impact they just how around The on example, we're don't that up. management I making reposition capital won't closed going difference can completely have some to continue transactions want do Trust, for our - strategy frankly, in to So particular Fiduciary don't M&A. make management real capital

transactions. So for M&A the smaller bolt-on my shutting type on our that on I comment wouldn't foreseeable strategy impacts say the down future

think to the a In because one, Alex, capital little management bit much. evolving the terms view, forma of so been answer tough it's market's pro I

closing we have of M&A approach capital signing C this we're beforehand, going between a share example, all type of servicing repurchase, allocation, balanced we very thing. that across and that, know, As to transaction announced and debt that internal for

think, gross to company. less times I be obviously, would We investment-grade in our leveraged I'd to say longer than X our debt We anticipated, out X.XX high if the always X be of want we than debt a to the little debt-to-EBITDA bit. want to we would That's EBITDA. reduce become to more debt term, we goal remain to a EBITDA. times be gate. times will

we Legg content of is capital equity As capital that company. look to capital just as make debt, know, to But sort gross sure frankly, intention tied at structure, have a debt portion debt Mason's our conservative there's of we And in has a it. structure, structure. you that the

pull M&A of We invest stack $XX to save capital be $XX of opportunity less way pretty where debt, really to a where it, we three we terms we'll million have repositioning to probably will the one situation $XXX our also thing. assess C substantial, forma have in which to million is still But within years, at up by I'd the on pro a that more million, from repurchase cash particular, sort million comment. And stand look to should of basis. it. in free debt have post-synergy flow, in type more in that in some very shares, investing, But open that levers soon providing XXXX, or closing our after $XXX can view,

what bandwidth make got transactions. at I is right any think modus absolute doesn't execution our we've is frankly, now. other plate. success on scale the at larger have to operandi it our to here And looking of And, max be in sense

debt line, same. It's we'd the a be that asset timing just our the very with being to the that like structure. flow do stays bigger be we'd alternative cash in sure our not it like heavy. be capital incredibly And We clear, prudent down and to want net bigger area. in wealth, we've But we're and to made making matter of

this with little structure a close, know, So net global through impact about bit positive, you flat, crisis, where a as that's be on we'd the scale, we capital at the on maybe at. be but will even debt

Yes. think, funds a was India. Got some I of market the couple around second you question There's you. been with of of My guys couple a shutting recent in dynamics emerging down distribution. in headlines,

happened that India of curious there, and bit creates maybe little maybe your But speak think that footprint market billion. a $X any like of had about and to for to sort your emerging other some geographies? billion the markets of I that, of what $X risk kind sort in

Yes.

years fixed market we In and ago. is a there. high-yield non-investment India or XX-plus And there, below manager - - portfolio considered India, So were income AAA-rated immature entered manager. very AAA anything And still the grade. the is we is

XX% came than you be trade So we've any guidelines this - October a can't And lot that fund, were had you in in out debt. in can't that unfortunately, - kind with instruments funds six SEBI a fund new it's of private investments and unlisted of them. a large could in more with actually have neither saying invested of funds XXXX,

So fund that of about our orphaned there. X/X

in we But hard and $X managed decline Now, diversifying under not XX%, because Supreme it in decline Vodafone ruled really like got sectors, not Court had AUM, unfortunately, - But default to - things froze in the billion And worked maturities, There in were had meantime, $X a to to unlisted of the pandemic, had the we've that the including the essentially just redemptions. increasing been couple them. billion. market point defaults increasing ownership of a actually percentage we manage managing just where diversifying you up able and the instruments. as Fine. had to with this about against increasing with laddering India. there from ended up

preserve go that was It our on create to to for in impact this liquidity a of business. a mode. business and only credits we timing holdings, the solvency funds. it halt any so wind-down a and holdings. them. not versus bit the our high really was on the in about worried were underlying And underlying is our It's of just into created to looked equity the And subscriptions really the just there, redemptions very investors a redemptions decided kind really issue. We credit value way and run at The ability our to of good meet the

high the in There was initial credit. redemptions

that that, about this a fire was as it equity. selling locked little really night, to trading high liquidity. of buyers as some seems being SEBI is about there. sale down, $X with regulation that and allowing of can I last are And not in imagine, Having hold have banks at very in you just credit that that. But very unfortunate It's obviously, people stabilized those to permitting India there assets because need about and because, allowing just actually reversed billion billion have We think trading. $X who and said and

opens clients. the to up the how to seen so it So that can well remains be capital market that that return we

an A took a were that good. liquidity move And it impact But take your maybe will that steps think is we the the time, that. - debt it's which - watching healthy of impact. a illiquid. you one - at I locked But not something the ladder in of lot as the immediate something some well. will steps to business, to that the like to I on just the we last long we liquidity where add and it maturities, short-term and equity And was side, forward. up, in redemptions creates mean is the it for what for not least - we is that I'll fund, question do resort this us have And obviously, so do carefully hope that's your business for on as brand isn't minimize as to

actually fair contagion been I'm the I broader in seen on really still business would a to we would around this. sure much. India's that understanding seemed in emerging India, world press very good. markets. And India. not underlying being the hasn't market been our equity issue even the They've have It's other very been the as issue. within say into the the within our and of has And impact press just really And dug - business around of not it that the all be fair as credit

it. Got

So AUM that the a months in quarters? billion and go wind-down couple next to it's through will the $X essentially $X of billion over

Right.

Yes.

time, mean I waiving Right. it Alex. could over we're a of fees anywhere than But period period longer that. that over be

to of the at this we've on it's can everything maximizing get that. made that can you - all their And - we That's to And revenue. if we're funds you is it's fund. money investors from the about It's We're all that And of fees in perspective, the those do that, most those look make doing anymore. strategy gone. sense basically strategy proceeds the they to the to So what it a, charging as consider we're the that's back. any closing, for about be - part amount not $XX is. sure about P&L million a shareholders,

Revenue, yes.

Revenue.

- So there's expenses function of down that obviously, come that this. as will a

Our next come Brennan the Hawken UBS. of from of line questions

the a credit will discontinued? Travis fund. a the a from move Indian little to Just going guys of stay more bit in you Or Are to question. the it guys on wanted Is follow question up housekeeping wind AUM? it you infamous just of on down? to going that I to there

to You're stay in going AUM?

those You mean talking about... you funds? Are just credit on

the $X billion. just Yes,

will we business be It mean down. that wound Yes. in don't That credit doesn't have a India.

question we perspective? Yes. it how AUM is, are the from treating But an

about it's just whether Yes, or a... the reporting, not

look we however at Yes, them.

have I put there. on is mean it we'll what footnote Maybe back the... do be will to to

is... billion $X

assets. have do we the Because

assets fees. just So I'm any that billion say charging But in on $X.X footnote it not of India, only. it out not sure we'll you take and we're how

already, given Great. that blanket. consolidate how Great. guys It's might I each remains transition that really my we're some distraction have you plans through deals, of distraction the prior a that one Travis to seen and how given this then like we've - you coordination distribution distribution extraordinary particularly not just second covered to this Yes. had communication In ensuring the are wanted - guys question, teams, surprising those and And teams you adapting for team there. distribution period efforts period? efforts? going engaged really. during be

I this So this was we the client say, of of diversification good base. and deal, of one a news, talked about, as again, strategic first, the benefit would

so necessarily And there direct overlap coverage. isn't between

versa. two, So in under got we're U.S. retail, weak vice And we that's and one. they're things when where like strong

So the with clients. our little is who on engaged as with have disruption goal to distribution side frontline people, are the

looking that's going designing those best engaged for the are are very sides both approach so this in kind And forward. from said area least the distribution the is synergies. that we of that, and Having figuring leadership out what

And it's door. tougher probably this other the It's things be where, times in value. trying those so But walk salesperson market is both. has I always able out to also to really best than to the of market, great one a get of think, any a

people on Now that the who on rely we are structuring message place. we the be as out there. get focused on little quickly can But facing will is trying key we're And to that. message as I disruption the - we're this exactly sure air and we frontline, don't mechanisms client we're in as have. making how as think have possibly There we're to trying retention

a change Yes. I at won't all. mean there's amount fair that

Yes.

the retail this And of sure input firm. institutional the a distribution focus will change coordination stability. we much piece key I making and that from continuity. just total be and client have very I not point has the mean better just that's it's in perspective, mean on at across all a

from come Research. of Autonomous Davitt Patrick of line the Questions

one India. on quick the One

like billion, Is Jenny, terms in another sounds correct, $X that it away $X So billion. the there's of from the...

think that's Yes. I right. Yes,

Yes.

rate then the And reported frame Cool. you the all you on kind into the XQ? what could end the quarter, of given for the towards versus rate, parts fee of fee Okay. moving exit XQ

The exit fee rate on...

quarter? of in what start first kind kind the as XQ what's it was rate average fee of like to relative the So, we weighted

very very, It's consistent.

it's million. So $XX.X

Exactly.

Exactly, exactly.

X.X million. average. like things, changes doesn't - We on any it's basis, the and into with this the versus previous I we literally a change quarter expect have it the don't don't quarter. think - was $XX.X on non-GAAP that that on based And India And going basis impact point

at have hand time. now remarks. further the to management back closing no call any We this for I questions will over

everybody healthy go call, crazy wish this shelter Take just want I taking in in place everybody. and remain to their for to everybody place. your in in time to care, safe thank do and not the Well, too and shelter

Thank you.

today's conclude conference. does This

you this at disconnect may time. and Thank have You a your your participation, great for day. lines