Franklin Resources (BEN) 31 Oct 232023 Q4 Earnings call transcript

Welcome to Franklin Resources Earnings Conference Call for the quarter ended September 30, 2023. Hello, my name is Julie, and I will be your call operator today.

As a reminder, this conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your host, Selene Oh, Head of Investor Relations for Franklin Resources.

You may begin.

you fiscal us year thank our to and and quarterly results. morning, for today joining discuss Good Please note that in this the financial results are to preliminary. commentary be presented future are regarding Statements the within forward-looking the Reform Resources, conference statements on Litigation of facts, call Securities implied results of made involve factors that Inc., forward-looking this meaning important such uncertainties and to materially a differ other which number or Act not Private of known and statements results historical are from statements. forward-looking any cause by risks, actual Franklin expressed unknown XXXX. These could These the Chief Franklin's and call uncertainties recent Officer. MD&A our most recent section, important the and Exchange other in the described Johnson, President with and in factors and of filings. With the Securities Franklin's are other turn risks, XX-K that, I'll filings Commission, over Form detail and in XX-Q Jenny Factors more to Executive including and Risk

for Templeton's Thank us you, Selene. joining XXXX Quarter Fiscal discuss Fourth to Results. today Year Hello, everyone, and and thank you Franklin

Matt Nicholls, our Global Adam of Head me usual, are COO, and joining our the Distribution, Spector, on and call. CFO As

managers the the comprehensive geographies. Today, needs vehicle investment in around as that and ability needs shareholders a in the great Over classes, our our across all we're transforming to we've private their offers of and expertise meet investors We've globe. done specialist an firm environment. asset with choice of and their market markets, a around and the company across partners the investment broad vehicles effort the investment one creating made strides clients the offer able capabilities diversified operating business, globe to matter past to of fulfill public years, several and in no investment by our this range and

our customization areas order we forefront important have to innovation investments digital be in of important technology, increasingly in on to addition, wealth including clients. value-added made in services, and the In

And Seven, U.S. fiscal this primarily weighed all year, markets companies, sentiment. large saw X markets, in, declines our the heightened increasing fixed and we over active equity and back income look Magnificent to like value pressures stocks challenging across horizon. fourth believe of long-term geopolitical in of financial uncertainty reinforce have a and investor tech one in year. volatility global on markets. We so-called heavily we As management gains global the our the quarter, driven lead investment we're The with

uncertainty, collecting funds, XXXX. there's it's than identified. sitting started complex market where So XX most value often a the opportunities that are data accounts trillion this the to and of amount no In surprise Morningstar market of tremendous as highest in money assets environment, of asset in market what the volatile at level these more capture in bank cash times best and since short-term attractive stood yields $X.X Money XX, years. Global are September in capturing the in

yields have our to for a We fixed attractive, interest strategic particular. to alternative And clients private had become engaging their actively have address more look markets, credit, needs as renewed and their continue to have been Many additional understand with income. goals. access in clients clients in

global investment we continue continue the growth, Templeton areas focus navigate drawing of on manage them business including expense leadership of upon We and provide a Franklin strategic conditions, various our this backdrop, the to insights organic with Institute. Against to latest and thought specialist resources and discipline help to transactions. managers our the

channels. priorities our this long-term progress made we our key corporate executing across are deepening and with presence on As such, pleased in vehicles investment and expanding by capabilities the our year, markets

channel. Canvas XX% inflows. several lower ETFs, were net and year. key areas, alternatives, fiscal positive Long-term For from worth net prior improved including XX% in flows multi-asset, outflows the Long-term the the year, high notwithstanding net

generated In for fiscal Asia long-term year. addition, flows Pacific positive our region the net

Our EMEA flows quarter. regions net the XXXX fiscal posted region our fourth non-U.S. of positive the positive half in and second in turned

AUM of acquisition industry, our increased to from in the services, Alternative strategic the the alternative there more clients, to our increased The One all key believe capital fourth has of In resources. of long-term one of billion breadth XXXX. Industry-wide, of in XX% well positioned our AUM Franklin better are partner we market XXXX. are in $XXX our and In assets. of capabilities, to manager, to represents remains scale Templeton with on the billion management Putnam Great-West context, fiscal alternative our and reflecting $XXX XX% these segments a European Firm-wide of us making see doubling pleased presence we acquisition to to of XX% priorities content more relationship pursuit pending track approximately offer adjusted relationships. alternative a the we asset were retirement expectations this fees demand. of choice client in presence to will insurance revenues, been of year-over-year. Furthermore, with serve segments. transaction strategic and clients over Alternative largest announce continue management Corporation and our increased and as consolidation to our our excluding fee Lifeco. the calendar of depth quarter to AUM. we investment long-term credit managers close leading key further by due Power revenues segments this Investments bolster to in AUM and the prior and closed we and Strengthening for credit technology, of enable the value-added approximately Alcentra, XX% our performance year, assets increase AUM

fixed as our solutions markets the positioned beyond, on of in money there likelihood better managers, investment demand as we As in income, income, particularly of capture custom clients general, an look areas be is each alternatives, from expertise the indexing. are from there of client believe to where motion with strong increased clarity in and and will benefit specialist interest such XXXX well moving in We rates investors money ahead we and sidelines.

and our acquisition of resulted prior $X.XX increase to X% now of in assets starting Ending continues the the AUM primarily outperforming and and from outperforming significantly benchmarks fixed taxable declined billion of in respective on and Reinvested specific prior due non-U.S. the the the due for Turning same compared of be and to including fiscal an X-year $XX improved XX-year billion inflows. year, XX% select prior the AUM with X-, basis. Compared market XX% trillion, equity X-, from the composite management distributions first in performance XX% and net Investment numbers year, under outflows several appreciation AUM were their XX%, U.S. prior One and a was XX%, in performance benchmarks $XX income to Alcentra. strategy composites. Long-term strong strategies improved the the year strategies, our period periods. and year. net outflows to were X- billion $XX stayed X- billion $XX in XX-year year. to by year, to

Canvas, the Fund, were mix flows indexing benefit assets XX% and quarters, Our custom a flows $X key billion, Franklin driven solution of presence Income year Franklin in X strong the increase platform. in for year, diversified continued to while long-term and net and net our prior for positive areas. Multi-assets including all nearly Investment from from Solutions challenged Templeton saw by a

The in In and income investment convertible Fund investing actively has they uninterrupted fund philosophy, a ever how stocks, giving fact, delivered cycles Income August. long-term Franklin paying also the access our seeking market investors appreciation in through successfully sub-advice ETF strategy bonds anniversary follows XXXX. dividends securities. The value-oriented managed a celebrated by dividend the all including in of flexible flagship capital its how across around launch XXth and greater since strategies, SMAs, globe. choice in we're vehicle its an It's great and example strategy, in

were fiscal Partners net private which market liquid Benefit Partners, offset by alternative inflows net and Lexington strategies. billion. strategies, by together $X outflows inflows approximately nearly billion, driven Partners growth Street year, Clarion alternative For were of $XX in partially generated the in

We U.S., alternative year. Client firm. wealth worth strategies in under continue and Templeton opportunities new by alternative remain platforms alternatives high earlier this institutions. the which on was brand strides Retail relative unlocking investors management make to investors in net interest to was launched our alternatives in under-allocated Franklin strong for in for the assets

XX% channel. raised secondary from to our For come wealth in private fund current over of capital management example, the total anticipate the equity we

the We year. Fixed for when the positive for in saw in Franklin in to positive benefit net philosophies. half income client of with strategies with webinars net focus education billion income had Academy. Fixed second fixed Templeton rates, Asset the from the this starting a and improving the In on fiscal and eyes focused of Global net broad podcasts the fixed to initiatives year year with partnering decreased range second Franklin net ETFs saw continue and all SMAs. through having Brandywine a in net investment income flows positive products on its strategies noncorrelated saw by fiscal outflows were Templeton and our bond flows to the interest also flows half net starting the income continue Western alternative significantly core we $XX flows of second year, XX% markets approximately year. in and year. the flows quarter in muni

offset look emerging equity impact Equity beta billion. will risk-off spot growth longer Putnam, core, could stable partially the broad We with The nearly and were net investors sentiment which potential were markets on strong income to by strengthen across duration be that international, markets environment our and particularly net we offering, equities strategies of a investor market strategies, $XX into further equities ultrashort, performance. value for investment as bright strategies. With with opportunities. quantitative continued smart addition fixed long-term in emerging large-cap inflows believe select outflows

XXXX, launching billion $X we growth of over broad achieved representing billion. the business at billion provided Turning our $X net approximately have nearly $XX with and the inflows X investment clients ETF consecutive to of a milestones. strategies ETF, flows year, range and ETFs with generated in ended quarters net of significant our fiscal AUM quarter since in have

ETFs launch continue on based and new client interest. We to innovative

and in fixed to Western expect strategies. both quarter, fourth client the launched income Brandywine Global we strong During see interest both Asset and active ETFs,

Franklin are SMA our in the the $X.X SMA net in franchise and a customization products saw $X.X billion new expand such continued the an key seek solutions inflows capabilities improve A increase personalized continuing of second we're This good platform technologies, each with approximately for AUM AUM, our $X.X achieved more of as doubled new XXXX, We This we managed closed. that long-term strategies, with fiscal half is has Canvas of billion has platform acquisition billion investors. Canvas, year. had to from and example with We September XX overlay leading SMA momentum than flagship Income tax and bespoke net to in the $XXX on the SMAs since of net portfolio in focused launches generated XX% which to launched to Fund. Through flows partnerships. in since enable the prior billion outcomes year, including year. year, quarter of inflows

country's average worth AUM growth. Since high billion to with In as energy producer, The In our leading $XX and Fondul's of ability Templeton our to multifamily addition, been inflows. positioned market, offering Hidroelectrica, and pipeline. Private client It listing stakeholders robust commitment is Romania's broke and long-term the of promoting well capital largest Bucharest Fiduciary for public corporate reflects XXXX, being an administrator of for local client value and with it consecutive July, to initial net Stock its relationship the Trust Fondul. continues enduring XX private have manager base the institutions and net Exchange. at deliver provides sole and in XXth growing a long-term a largest solutions individuals platform investment markets transparency. to long-term provide Wealth years. Franklin ended quarter offices the to record personalized public Romania's a Fiduciary has all partnerships with developing a on governance generating quarter holding, Trust emerging Management International,

Trust more clients XXXX, channels expand areas including that to distribution business of offer retirement our invest choice in Looking our forward customization key clients, in International. and and technology-related and growth insurance more we extend will places, for further management, wealth to asset private Fiduciary management, and to alternative more continue solutions specifically to ability

Templeton business. of diversify grow as organization are we the work over done and We a Franklin further reflects long our resilient over us run the focus on makes several our to partner. past have that proud premier and more years It the a positioning

a employees our I'd around grow continuously Finally, our like their to this past industry. business evolving thank by first efforts in the for world dedicated clients year in always all putting our to

to acquisition. over and our fiscal call as to quarter from year CFO the Putnam who turn like results well update as I'd Now review on Nicholls, our will and the provide an COO, the Matt Matt? financial

the quarter a included the the and to average Fourth in by Adjusted prior quarter, AUM the flat billion increased adjusted million $X.XX Jenny. Thanks, of million quarter. $X.XX revenues from quarter. reflecting trillion, fees of from earning decline $XX was prior X% $XXX performance from X% $X.X prior was trillion, AUM quarter compared and to operating prior

fees were in partially with investment private $XX management fees and million million quarter's from benefited lower secondary of $XX This offset connection in by Fondul equity. catch-up

margin due fees, the fees due from effective the and an fee point benefits and Fondul. Adjusted by The earned and from equity investment the operating diluted quarter lower XX.X%. Adjusted secondary prior increase increased transaction-related due per secondary was X% income basis adjusted adjusted in quarter XX% increased mentioned income diluted increase income expense, offset prior is quarter's EPS $XXX $X.XX income due increased points, income in performance XX.X to quarter. quarter. Fourth fees. The of primarily This performance $XXX to and earned net Fondul adjusted adjusted basis which to adjusted and operating primarily management rate, partially excludes EPS increased management by from adjusted respectively. and lower from to other income, million adjusted to higher million, compensation XX.X% $X.XX, fees from operating aforementioned The for share to and to reasons higher from earnings private fees is private the for by the net XX% the Fondul prior fees, equity quarter and management lower catch-up X from specific fees higher increase quarter Fondul and was million the catch-up $XX operating and taxes.

$XXX by the year, prior the basis fees, X%. Ending X% revenues decreased fiscal by year increased average year, XX.X from to in prior the AUM and $X.X of performance prior Adjusted an million included Alcentra. from months by which basis $XXX effective prior while Turning and X year operating full million fees a Alcentra. was billion adjusted decreased points of to performance of of AUM months Lexington of XXXX results. additional XX rate, XX.X The declined from X% due XX of points months in fee Lexington year the Adjusted compared excludes primarily and to year.

initiatives, While continue business we continuing the through operational of to to our invest disciplined in strengthen long-term and growth management also expense foundation efficiencies.

year billion, expenses year, Our a the adjusted prior operating were from $X.X XX full an increase of including months Alcentra. X% Lexington and of of again,

income through diluted $X.XX, year. This a prior a operating XX% billion, the was average fiscal decrease by and of to to to year, lower share share million was a outflows. Adjusted decline prior market earnings and fee $XXX $X.X per Excluding to operating and XX.X% to the other the margin the XX% billion, XX.X%, net investments. of we to repurchases, of the year adjusted in from XX%. From down year, Alcentra, to performance adjusted prior Lexington adjusted and adjusted returning related declined year. management the year Alcentra and of capital funding year primarily full prior perspective, and Compared expenses declines slightly a with payments, shareholders acquisition $X.X of of and operating compensation were led from year degree, income AUM, net compared cash the impact billion after $X.X fiscal due and ended driven acquisition-related dividends lesser

Purchased our where accelerated We reach and acquisitions year review prioritize dividend, increased pace. share employee shares to objectives to since will every hedge targeted at applicable, has to an our our XXXX. continue which grants

quarter, fiscal in opportunistically employee-related issuances begin above fourth shares the the to addition, XXXX. In we during we repurchase year plan equity as

adjusted XXXX. the which, Turning financial our context in our to investments the the the to in transaction, -- financial mentioned, position other Putnam to and structured track flexibility protects continuing Franklin's also current the we post-close. challenging operating of total operating as of close we calendar $XXX synergies, inclusive approximate the Putnam of maintain income strong post promote expected first income and fourth cost an when closing. Jenny market conditions. At remains year on Consistent factors, is terms are It of in ahead of margin, XX% million rate transaction of levels, in approximately likely the market run with schedule operating quarter are add to to acquisition after is business. of realize Templeton's Amongst

by open the to is questions. accretive the EPS of Assuming would to operating expected contribution to to income like first transaction end the adjusted your now call closing. modestly the quarter this And up after we be

Michael Your Cyprys first from Morgan Instructions] question from comes [Operator Stanley.

start could space. private you market the just Maybe off on

to us over months. And think some think the progress market could you in or on channel, there. I of the Maybe might -- continue traction on XX capital terms strategies wealth channel. entering which of as able just be expecting in the look you about just placements of the new what across seeing some the mentioned the to of maybe products be you the key looking might update you guys raise talk funds, you channel, raise in you're to private just fund you're wealth you You the terms XX% some could bring out flagship private next on and of that

this Right. one. Adam? Adam is take going to

fund, things of right. They're the beginning force. Jenny. flagship the We're say We're would positive the is all -- the seeing well. BSP that traction spent management that situations to our for private wealth we're some starting fund more wealth raise with into that's their We've good continuing really alternatives, and interest there. wealth Michael, CLO debt. you We're is year out we're the management a seeing now our strength advance. raise one That's management others across estate-related the in will for growth. mentioned, in in year that Lexington. for model we're good U.S. to as on capabilities Thank like general, months really XX, that in particularly had All the we're management building alts feeling be folks a that you, -- getting the in beginning integrated greater come for positive from Lexington where and lot X seeing seeing in area. the debt year good. Alcentra Fund the of things we really fact really new continue. distribution the about and now overview. we're to to And business. once you're We're other place that's Europe. In do is flow, out taking wealth it quite see calendars We're I We real of using across in will fundraising is the alternatives our special quick and XX% board. a think board. really

a just follow-up And Matt. Great. maybe question, for

been mentioned release, transfer in think I the globally the functions agency you outsourced. have now

did around world. You the the that in took U.S., you that now

outsourced I in you've administration fund U.S. think also the

talk business, or be? the next or of think just could enhancing to X? efficiencies, year that might sort you on curious, takeaways meaningful to And about you simplifying and maybe transfer take outsourcing. might agency So could speak learned to as able they you any the what's the next benefits just what lessons of be over How steps

Yes.

middle throughout deep back-office we've it, in terms there. transfer to next hard that That or and you we're of terms administration, expect updates key outsource we've the platform XXXX. investment on what technology. our say pretty is can technology. taken year and functions. from the been X our is I'd things of fund steps agency in so working And What includes management over more us mentioned last you So into One and aspects office both of

integration. I And some acquisitions. would take know, just on is, you one the a I Mike, time and well as think we've our of they Well, of done work add, lot of the reasons we

will the Putnam into -- which opportunity, an opportunity the have we Legg And environment. simplify the SIMs -- And integrate, of Mason be we'll obviously, so think into even integrating some our there's to are environment.

Mike, that. take These in things would I And terms you on caution financial Yes. just of impact, the time.

longer XXs of any mentioned, going be to term, the it's have effective Jenny operation. step I in a expenses expense, lower term, in closer an efficient we also, there into to around think a in an with change at the where can scale As expenses CapEx, do to opportunity won't of the right the XXXX. 'XX, partners. things more opportunity in way, bringing reduce our make additional organization, longer to in That's be ] we sort our across modernize, [ change terms not that of together position we're terms only but But sure

from Your Craig of from Siegenthaler next Bank America. comes question

maybe could the within asked question SMA is you components looking details I -- trajectory. SMA think another around is But growth and on I'm the the one on I question, I here. My business. in what And for tuck said, one but more the

wrapper? And that SMA an a -- of in SMA was, at So one wrapper. Fund, in million there affiliates Franklin here? flagships you're you of flagship the X quarter increase my about per that could that from of which wondering, wrapper, its Do Franklin now is sense your launching other generating make think just significantly flows I'm level this and quarter kind the is would then also into is the SMA are Income $XXX

Yes.

and a being SMA So and more we're to if off that. advice buy financial for an like right? SMAs kind I So it basically in adviser product so much the they're got statement, holdings that for is the of on taking went client being the exist, you the fund, the same on deliver it retail advisers the mutual charged in where can with active month looks hold you've fee-based, remember, channel, every is the reason mean, difficult fees, whose much to world a

for Income view those. we is example, Franklin what an Fund. version, our and our -- we're And deliver growth have is SMA to version, vehicle Franklin an expertise, you take, how of seeing both as ETF ourselves which The agnostic we Fund so in the we being investment Income capability. And now is so --

munis. of SMA Today, have actually So any -- delivered area the a ladders. are be growth have products in our can we muni in SMA. Munis good

And -- whatever of retail vehicles. way SMAs, product both breadth market ETFs, It's are think And vehicles actually business that like to I things can And deliver trusts, and indexing. mutual nobody always we're thinking in X-legged we late institutional the we passive how we funds, about capability, communal in. capability things Canvas active distribution, won should been early the the distribution that may operating product be ETF about side. the of like has in while space. it's global we the stool. I breadth so we ETFs, a is, direct we whatever were have those our to say geographic have And like And the we and be on market flexible

And is important. so being vehicle-agnostic very

to the and go you the you on at the have is gatekeeper Now advisers. individual challenge and SMAs, have out level is train get that then approval to

once a you that, like coming you the it's in. consistent just So bit then But alts do flows in complexity. get

So answer we funds is the long to as through be the flagship able see platform. our of being any basically, SMAs delivered

And take just like a available mutual across broader platforms. product an the is where in access addition growth we're markets income having seeing I munis that border growth in that another ETF, answered. lot Jenny to SMA, a And area just different of add fund SMAs, the significant SMA is emerging really, a fund to that might while fund being an in vehicle-agnostic, the

from question comes Hawken UBS. next Brandon from Your

growth give could Curious Maybe year, into expectations about there. expense the Matthew. if for update us an next you

Brennan. you, Thank Sure.

split first discuss guide. fiscal quarter components, first our it we'll you'll is, I'll into So the X bear quarter if me. guide, with One

I'm early give you our And And because guide, Putnam, speculative point, update XXXX. individual separately don't that part modeling exactly give then issues a I how close, then the go Putnam, it's we an you become when to through will. important I'll preliminary, expense on, to fiscal this Second, you that expect I'll if but from the to information. at thirdly, But consolidated do very going perspective. obviously, an so I going provide to want for on of components a that year we know of will are recognizing focus because it's we

This to And 'XX EFR in benefits fees. so excluding performance we $XX -- this of accelerated please again, point also comp fiscal, this a that remain includes And but the basis is our assumes expect $XX guided to XXs. we to York million a flat fees. IS&T, we to high from note million million $XXX for we of quarter unified million, more in to be XX increase the Occupancy, we are and to we had. efficient transitioning EFR, $XXX to that just million, firstly, area, expect Compensation quarter expect charges. $XX benefits, is performance this expect that reason New deferred we space. first and compensational City,

consolidating major New we're year, a on into office. going period currently in the for about office New have in of have York City, are York. that We rent space we double equivalent X and X of a to And offices

months your includes and After that placement again. G&A, $X million will for the be will that for up, year. first an and is to of about mid-XXs to year it's million down go means, way, this be that that -- the increase. $X slightly $XX expect and increase, area, occupancy a $XXX for by normalize it X will T&E in the So we away, higher fees. into million would of implies quarter, the back million the flat And this increase about this,

to expect we tax our fiscal In year be 'XX. the for XX% terms rate, to XX% of that

'XX, we I transition fees X% full year. Full point. in the estate and fees prepared expenses through, walked that in approximately down. full the and performance Putnam, I be New we to mentioned full various expect terms year the real would remarks, year our weren't of at 'XX, included model that, performance perhaps of excluding between 'XX my year flat, previous In this lower, note that York City flat excluding I and slightly just But overall expenses. I'll all that year 'XX are first about acquisitions as

Putnam. terms of In

we in quarter So mentioned X. in Putnam, fourth December in our Putnam again, to our remarks, quarter. Jenny the as for prepared calendar close that fiscal first and I and expect hoping We're

so X. If And $XX from to can X, does that that in add modeling for to be fees December for is Around to million provide million up expect example. guide you to into and is let's about to January to $XX purposes. for hope come services. XX run I'm of But December management we million revenue perspective, revenue. a that assume about on could we expected X, X, you be the the but rate And up annual with about slipping close that number December in to of $X by investment that end expected

guided in X/XX. that This months by $XXX transaction we December expect ends million and mentioned assuming, expect operating million words, for versus to we close fiscal in course, and for and transaction. $XX between be are. At the operating guiding, both month, is $X and of the X the addition the remains income when levels, addition, income other add XXXX, by so current stable first when the markets Putnam, third run in operating add an $XX the for quarter, income, we're $XX obviously, to assuming we still revenue words, second other to We incremental million income, operating the X approximately XX around to million time as million we a the to rate announced Putnam. In they operating for in quarter, stable months, announced fourth total in of where we our year quarters, add that the I an quarters, to XX fiscal incremental $XX in income remain million both we to expect

a indicative of million achieving and of So operating of to minimum the at $XX from for put targeted although the would the change month we've is can necessarily rate is of announced a would XX%, we this income basis we operating current we rate change when on achieve point run see month $XXX the expect by we a described XX% that between coming expect the in on at the $X guide as income. on that operating over talked here the say, million scenario now not basis the of When the realize at about, X. a XX% where let's markets, end income, run this you I actually time transaction, first to based is close. And to but XX% million

be So year, to modeling. as actual the we can in just with clear as be the to help

too. again, current gets the on. the what models right. But At are transaction dilution, the current by At that, about In time, and remain accretive the I would talked $XXX terms end, million to at least X/XX/XX, means rate how the by of else markets the million accretion, possible, a time, terms and all equal. And million as of so the everybody realize sorry, $XX year, Brandon. as expect comment run income the so final this of equal, to this reached want we complete $XXX else to then between make and mean so second is because operating in remaining becomes volatile -- have sure actual all recognizing quarter. we this

fourth at quarter the in first about we year end So initially. that of talked the our versus

accretive transaction first like let's right be at It's the much close. close. the months we we almost say but of in So this after afterwards, we're end conservative a quarter couple to after just pretty becoming of

that of would second fiscal quarter. our be end So the

worth got question. Got on Thank it. Matt. I that my money's you,

be to thorough. Just

question. clarifying Just one

So million star. the December... But kind us guiding assuming rate north you of -- -- that walk think gave you a $XX ending by which a X/XX, run us $X -- I first the it's like in million kind I sort incremental quarter, to the believe is of $XXX gave was, and million of

Just X.

we're to $X That's on means million. month, that that quarter, million just right? to next $XX just adding $XX month. And X million Yes. X then

and to getting -- those And million. $XX got rate? not run quarterly, it. So those then are -- okay, are And

Correct. They're actual adds.

period, end third added that by end of $XX million. quarter, would of would So another million the $XX and at fourth $XX we to added the have the have we million

about added have up end the million. we to the at $XXX So year, would of fiscal

the at last real run is that, -- I be an the rate it's fashion accelerated rates. sort So not of why fiscal that And could run the achieved quarter. actually right of is just end $XXX income the add addition reason -- operating million

really Okay. helpful. Perfect. That's really,

important Putnam AFR they thing ER. overall in is The the other factor basis as that our obviously because lower EFR reduce only and X.X very The add well, the is one because a this acquisition Yes. -- is reduces think expected I'd points AUM you about -- slightly model to a as us. by have than

when would away? Got that happen right it. And the EFR much -- of would that and the pretty impact is

the years. It's over

it comes December. should but right away do I -- much because but -- in pretty in it yes, gradually be -- So

it impact by run for be will rate the The adjusted way, the timing?

average over the AUM you as in. the comes it know, we period, Because -- gets Yes. averaged

but be the So a see in of sorry, full going X.X. to you'll soon the -- first it's wonky bit first quarter, year impact the

X.X the Got adjust can about But timing can the way it then we is and accordingly. we think it. for

good it. That's Exactly. a way of putting

from Blostein Sachs. Your from next comes Alex Goldman question

for thanks Well, Great. that.

call the could think we right I probably end there.

moves some But look, performance the did want guys about to the plus latest Western on absolute core pressure the fixed both, to and incremental stabilization put I and ask you nice benchmark. early income, investment So interest had year. core in in And obviously. relative rates in

a income in year, fixed positioned within opportunity capital passive as like ultimately the a chooses more So refers of how to that you as rotate passive is clients, the if we've the with sidelines conversations that go big do maybe of some highlighted, How guess, duration evolving on Franklin think cash back whole, maybe opportunity are this products. is? to to headwind of I some advantage fixed you of to the income on take how And longer vehicles to the seen the side?

It's we challenged. institutional first and longer just the flows it is the -- of -- core flows. in has last our interest so client of We duration. more that's positive all, And came around, international to discussion time had is remained positive plus and core go is cash move in week. been from So bulk conference

close it. that also getting certainly but moment, So waiting to we're for we're

of is get definitely for there's goes, near quickly question agrees, increase everybody think things and end. Or dropped. one rates it longer? the maybe do more then degrade And I higher the we're Fed, maybe the not, but

around insurance we key has which been look the business we And clients our align that's that have different in know So views. at fixed that all X to the those one comfort views. training and the way have teams that I with of we're that we is And managing slightly And we it, policy think income force have kind of to independent actually can understand fortunate something. nuances. those sales the align

appropriate there they with So and that deliver out client's that view. product consistent the be can

of align mean so And yes, SIM are -- as lot view. Western there are is sales, with probably far gross think I Western there a I lights that as our top-flowing because

So to -- they're passive, always fixed of them concept positioned going I'm plenty -- on think but income. based capital fixed in one well in that that skeptical percentage got income. that's when X and more there's the there's be -- we're do doing you we active allocation the of sure, when of those debt believe who's

money positioned cash there with prefer to well or? clients prefer diverse but I duration. are you do but there active income clients passive out we're Adam, into always our plenty a that, fixed capture is SIMs, that income. are want who longer And in of mind, my to of as moves who So fixed anything add think question

Yes.

clients. And to outperformed their in the be have of top XX% Western is like X-year look I Franklin SIM Templeton's XX-year very points, lot performance, having you is period period. over XX%. flows. marketed good conversations terms if of key number, continues And think that a something their hit think our I Jenny. you the at composites the gross of It with its selling

turning had very around of products. still see interest but client we yes, we plus it being strong recently, other and core Western go So and some in in strategies, tough they've a see that

helpful. And one for you. the quarter. strong then, That's just repurchase pretty is Share Matt, Great. in

a in alluded more your be might prepared the that idea opportunistic. remarks, think I to you you bit little

return hoping next year. I about could a as we're flesh So you was bit little more capital out thinking maybe for that priorities

Sure. you, Right. Thank Alex.

to it's with is point I So obviously, is uncertainty. this on trying the think fraught that, that the complicated, make market we're

technology of of feel terms us then more involving we maybe area most regard X around markets class that But in that Jenny in vehicle planning. And the therefore, like think important we've capabilities of much for regard. we future. to So of how asset of a few I acquiring investment say as can we every of this. Never There's of in in we're active every But areas foreseeable in or for clients a sure as be we're distribution transactions pretty in and that never, in have certainly expect like the we companies a mode feel alternative but into done large-scale in opportunistically. careful we done you terms that private done world to very want the referenced, to relevant mentioned. We that return set we're feel we possibly to make describe strategic billions the to assets. things, obviously, right move been millions, we've can capital there's be couple of management And of things. dollars, infrastructure, example, cases, hundreds X the certain

we've pattern the our XXXXs. So in expect to can protect the you back seen what buying -- of absolutely that you've very that our means grants. disciplined going always is same dividends, going -- and sort be since employee to as we're We're and our in hedging described,

as shares, we'd as like terms trading but know, can. from But both for with soon with very as over left of opportunity balance you we a with transaction we're sheet, XX% amount fair that, we've it's Putnam cash of where those shares are, know, -- funded in and they and terms of in you our And good after to repurchase as earnings of a shares us. look, also earnings, our

from in opinion, addition market you repurchases we and you and So the the focus really reasons repurchase last share pattern and and on share conservative to methodical the schedule want going to to sure in us. But outlined. we're I'm the careful for number, of be expect you quarter, are same going give share not it's expect uncertain that to that. again, the is to a because to all this I've employee on that but opportunistic our saying be grants make quite We of can need it that just us that saw rest focused don't the we in too

from Schorr Glenn Evercore. from comes question next Your

if products, I'm what the anybody. I And But is definition coming. channels. for so you And this it's how just a focus not is is Adam, new not various came impact or think investment for and distribution updating advice. out. long Franklin channel, The rule the efforts think in time curious DOL sure it fiduciary proposal given various of the prowess your may just and in may the

that products the and sure always our product and for make partners and view that discussed about our while sure to around and through You opinions had well we has on have the advisers that deploying provide client. appropriate been And ICI, we've is, it's and know, this view that it's had are Glenn, education, job we've making distribution that. -- inform back about transparency all of our the a And And forth. it. for quite this it's suitability

I to view so this think tremendous have a And our impact. is not that going is

on for quite looks to each you've appreciate know improving work you learning, and on their insurance the retirement? But and news. as Putnam. their think not as get I in reach you closer follow-up. together, at and line my from I'm curious what I what gotten But good products. look, distribution finish you're things performance can other, Maybe we're yet that one Good

jump of tax start funds who that the mutual about you're the is in. from in honest, a Well, then, an if where excited the isn't -- retirement book traditional that, mutual I are has a I'll things Adam, and asset could deal channel. is issue like, a Putnam big funds, manager, disadvantage area of I be you we think mean, to really this one

and -- our that's always And underpunched which a have in we way so weight.

what emphasis as with retirement, on internally, And was of couldn't putting more built been so into there's this, about we've combining as a an can distribution Putnam. probably got capability, because we you their we Empower lot out excited imagine, be

to with much and but stable channel, And with platforms these have not partner, Principal, just -- us date think bringing a like funds. the make with going able an understanding retirement we that to being like just Fidelity, much, really teams target better entry our Empower together, Nationwide, value so that's in distribution and firms

for So and channel do want more is a excited people continue at growth in to to us add what volatile, Adam, markets even that think look when their to great opportunity a paycheck. contribute couldn't you be about just still through this we to their we are XXX(k) anything that?

when Yes. I of ways, at Franklin the way the example, think market, the And complementary. you an non-U.S. me that reminds there in it Putnam. helps forces that I Legg would look X transaction really Mason that as say is built some so were distribution out if just the scale in

at will Franklin that of advantage. to would that terms to I comments look the add you a what force. be sales those we able Putnam strategy with capability, structures, Templeton to financial significantly If the has that, made real all is the finally, Matthew in along of subject note within core And SMA capability, ETF

sales we'll will So force, force product bigger more Putnam That bringing great effective product. by together. bigger a -- a the sales firms more have X obviously force have sales

going to is transaction really help And us. propel the so we're that feeling

take adding, But gained expertise the the capabilities is, channel. And alternatives we tremendous we're a on we Western more think add I just insurance actually much the I'll just at of side, relevant who what's has exciting that with expertise insurance penetration acquisition insurance partner. be and in that the can now

capabilities release we Western, we're comes within we had of -- of the of various or basically -- combined as Great-West well. Had the committed week think, And ideas. not been as our what insurance Franklin that it to sense had, have able the again, them. a wouldn't expertise that determine for detailed SIMs analysis it because our out we respond bottoms-up Franklin and it venerable made and announcement the course, and looked was at we billion, to at that Western was $XX then, to that last week and so, And before, building press I

as come there there's well. we So more think to

Your next question comes from Dan Fannon from Jefferies.

on expenses Another here. clarification

-- is number that Or things other performance that 'XX? and on comp as fiscal in flat Matt, just Just the reported ex is fiscal in performance I 'XX comments it being fees. ex well? your -- versus fee

fees and other It's ex performance comps.

have to adjusted you X in regard. So that look at the numbers

So it's...

is for what the number 'XX? So

York, like I fees then the that really New would And transition or mentioned like be million again, transition X.XXX if -- on overall $XX -- that, full number. million. about that real 'XX -- something like the you So estate and X.XX the excluding in right is is about 'XX the issue that. which that is year something Again, performance

like a what's quarters. more were as sales follow-up, X environment, lowest the just And in like just alternatives. since, if their so It timing or the on Okay. then I'm gross around levels looks curious with market Clarion do had And think -- you if that that quarter guys? in doesn't hasn't the well you when -- you what also, the might its as, peers as did then that close final happen? just that's specifically, Lexington and

in So Lexington's final close will be December.

had that. So to the improving -- you have if But I were quarter. for has you still queues, had want if they're Clarion know, all strategies they're details -- positive X the it. don't we've but scheduled on redemption Adam, on

think, because a alternatives liquid we outflows there's the were stronger strategy. between alternatives see in in alternatives difference overall I Yes. little as generally saw versus market -- the And private markets private the what Jenny, a there, some alt in than we

from your And Worthington comes JPMorgan. Ken from next question

on drum the beating expenses. guess, I So

the drove So number compensation sort than lower what fees of guidance? there the than quarter? performance this? a on was fees. core performance drove the your better when for quarter payout And bigger-than-expected this adjusted comp was just accounting looking What Or Was when prior lower that? at for guidance

Yes.

So the number compensation, lower current of one. in resulted just you've the seen state variable Ken, obviously, markets,

less combination a a that's So performance AUM little performance, improved actually bit. of revenue, our

the So that just speaking, generally but compensation. lowered --

Then higher we that has we on it. a margin mentioned Fondul fee had that transaction-related the with associated

helped that that regard. So in also

expect. than probably So that's you lower would

say expense going our just discipline I'd combination a in manage just because around year-end. of compensation our So is remember, how we this

final made and on the next where we've the So be. current adjustments is expect quarter based to market

Precidian. I'm to in enough. Fair flyer a take Okay. going

well. Your doing is ETF business

more structure? you the Can to proliferation ETF industry-wide. talk ETFs utilizing seeing is We're launches. fund active Precidian additional have what about extent You Precidian, active

Look, kind I which think on they active the of spoken this has market ETFs. topic, is transparent want

focus. our that's so area been And of

pursued we so and there, there. of there's a don't really think growth And anything haven't I lot

Patrick from Autonomous comes question from Davitt next Research. Your

follow-up an how can versus been us update the I've in the quarter Putnam. funds, flows quarter obviously, an asked. the one on, maybe us on see give could this update have but quick you September and you Just One quarter. tracked we last year the Could give last on mutual in

today. Yes. Patrick, I we own any mean don't obviously, but difficult don't to be in way, Putnam

we -- say is AUM not you. really we're though, to can't their roughly we where would the report their I announced flows So transaction. just

so what's with or think very with say came be, it from to And I market or their to were has And they're where May performance the then, know their was I'd hard. happened performance, that now months, we on area, market And announced of and quite them when are we and during let's went billion. the time, couple are expected. then period what $XXX for a in and transaction, and the around the between month remained between the flattish So that we was had late strong. line down of results roughly in based strong the flow they you we a say, now, be up expectations which

around give I specificity can't but it, Sorry, yes. more

the cetera? quick kind for AAM the open pool the AUM line to And just but details days, you of Any partnership the Venerable funds, could announced. to Venerable you can you opportunity that with around the follow-up. one early know of I it's frame et give branded time you'll be transitioning

Yes.

quite going that managing where too and in in them, out There's of that, on came and but quarters. period indicative a what's that work sorry build I hedge to going not with I to recently, it's take way think we're things we companies actively we're they multi-stage portfolio. project able much more again, their give, a efficiently not that to able it's that be where general, over to assets to detail on with are to give something we of announced think the are insurance we've

we other was them. And approach some companies customized we're that it's insurance the it about with a of now. built So solution right talking type to

Deutsche from comes Brian question next Bedell your And from Bank.

Great.

that is Just close. income on guess, [Technical Great-West, $XX Does investment that Difficulty] Putnam operating that I guidance? clarification from the include one investment in guidance. the million had

[Technical insurance in rate related fee no. [Technical because the incremental. The portion Brian, $XX is general from [Technical billion of large billion Difficulty]. Difficulty] the of a is that Difficulty]. mid-teens is $XX answer terms guided We in account

We to that about by be incremented [Technical XX%, expect Difficulty].

up. follow Can you better And can me hear then now? I

Yes, the having be audio may Brian, hear our an you that's it issue. response? did

No, it kind of got garbled up.

why don't again? you Matt, try

try Let's this better? Is again.

Yes. better. Much

Okay. Great.

guidance the with That's Life. did billion the the associated include from no, So allocation. Great-West not largely fees $XX

the So the that. the around revenue mid-teens, fee rate on $XX on is you if billion, the calculate

after come year we of in Brian. in next expect close a first period In half obviously first -- year. half to quarter let's it terms We'll you keep year. of about come a of X implementation to the time and second call Well, calendar line, the updated the we quarter on that, over that then

the Yes. That's credit just then versus just question, public great. last private on credit. And

the larger think public about scale your it in specialist not of win of managers, or equal to channel. over ton wealth Maybe next reallocation zero across of thoughts a that be than is got solutions will the alternatives. given just larger an your you've funds your the And are What timing but if including public different much So other? this the on one you income there'll X that do other, to toward over offerings maybe sort have of about fixed the income one just out credit that just went into swing X out it cadence, with up? And over think when be you do private versus quarters, your is fixed think the you side, cadence, the sort will do then Or the you -- think? thinking about picks there?

of amount. to there's massive think first know partners, I if talking a we -- well, distribution large this in just all, is our

of that sidelines. commented basically on profitable area the cash right their because fund the their, market money One of of them money sitting the most now in amount massive is

I wealth lending credit different the and think, is than just institutional The to. used likely wealth no aren't traditional the challenge, The like banks private in first is institutional the they income and So channel is to channel that fixed move then channel that. channel. between

as not so much And you're even to. as the fixed generating used of traditional income you

wealth private more side, going to solutions starting private see the it actually through combine But the credit move to development channel the products reality investable income. universe, is product where have into And is, that creative think have so fixed credit to anyway. where you the are thinking I in is illiquid. probably on this order you're and And we traditional

of private their the because markets with illiquidity So component you have a of the generated that premium. are returns liquidity excess in

because as even have just is it's it's you any is channel, and was alternative asked to the complicated the higher. that the in So the going suitability DOL is, bar wealth it's rule mean that

that focus area for how make in figure these provide responsible trying asset excess from manager an to channel, to great can't it's You of But out returns mistakes. a us.

the used again, lend it the banks to the going are they made have tougher. requirements tougher lend So way capital and to

think it numbers. the credit continue private we to to And going see is grow. in that You

would session. CEO, today's to turn the Q&A now Jenny concludes for back This President I Franklin's like to call final and Johnson, over comments.

we Putnam with closes. forward speaking Thank welcoming when next Templeton look add at dedication. to hard just impressive look Franklin It's work to in thank to team the I'd and forward like And quarter. you. for And to everybody we'd like also thank you to for our transaction want participating the employees that again to call. their also all -- I Well, we again, today's once

call. today's This you. concludes Thank conference

disconnect. now may You