Franklin Resources (BEN) 29 Apr 242024 Q2 Earnings call transcript

Welcome to Franklin Resources Earnings Conference Call for the quarter ended March 31, 2024. Hello, my name is Sylvie, 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, Chief Communications Officer and Head of Investor Relations for Franklin Resources.

begin. may You

thank our and joining today us Good results. you discuss quarterly to morning, for

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

Now Chief to I'd like to our Officer. Executive President over Johnson, Jenny turn the call and

Thank joining CFO Franklin quarter. Spector, I'd us thank some minutes. the like joined today you the COO; XXXX. by of our Adam Head first, you, answer Distribution. We'll and in Global questions just for Matt second a I'm and from discuss results for Nicholls, Templeton's and our to Hello, your But highlights Selene. quarter fiscal of everyone, few review to

of X share former Magnificent of markets, the of some the equity a XXXX markets, public terms tale and to returns. In lion's XXX the was, Seven the contributing with S&P extent,

to robust can among and to significant in the equity when for fundamental alpha clients. dispersion performance research in results deliver seen a augmented XXXX, we've environment public a in far by for portfolio management the better So Magnificent compelling risk Seven, leading capture emerge markets,

to allocation the equity believe companies. largest we being due overlooked sectors that tilt backdrop, towards in should, heavy current the concentration the and regions general, are Given in

significant a to over negative positive intelligence stock theme and and will of be addition, likely for artificial the the driver, In have-nots continue haves both time.

indicate currently from notable half XXXX number to this to by improving economic expected Meanwhile, to of on Federal signals growth Reserve second now cuts year X. in in on increasingly the later a rate cuts decrease the X delaying estimates of the back rates, interest for Fed speak slower openness consensus and the disinflation. of

return this background, near cutting the attractive cash term, the look likely may income high-yield as and will cash to opportunities total continue very Against option while equivalents fixed provide a in over commences. cycle better

create macro trends in of secular alternative at opportunities private and credit, equity to continue markets, Looking real private secondary tailwinds areas and estate. select

investor potential In for given market against private returns inflation. and increasing a benefits, exposure diversification addition, its as is hedge risk-adjusted higher demand for

for managers. Broadly speaking, these to signals market creates a environment that complex active opportunities point

outside I and clients team extensively key can travel executive firsthand my the quarter, U.S. This opportunity hear of to top to many and Templeton had how the meet mind with Franklin them. serve better is to our of what

that and under broad with Franklin in motion in money world, capabilities across of of of the countries our Templeton XX As and the active $X.X range believe trillion public private investment global positioned a manager with advantage around management choice. we assets assisting assets a take clients is to in by operating in vehicles

the in net clients regions, channels under in saw and distribution and We flows in important the strengthen have aggregate assets past diversify pleased years presence recognize steps $XXX our the U.S. our that learn further now we were have non-U.S. approximately over positive which to to We, billion few also outside taken management. again, markets

thought including and in expect broad but investment with customization technology, asset to range managers progress continue other not only and working fewer services, also of clients our of number a regard, leadership. capabilities, portfolio a this construction, Furthermore, toward

Templeton, we range asset multiple of the of leverage styles investment a across deliver and Franklin classes. wide investment managers to At specialist expertise skills

Templeton's investments on excited platforms. benefit technology, leaders centralized teams collaborating most investment in Franklin Our in about scale, from AI recently, with with intelligence artificial technology content, data where we're and

diversity given model our benefits well. Moreover, of themselves our managers more of and represents our manager that the at diversified investment single as our than specialist no shareholders, investment corporate are XX% operating revenue adjusted firm within of specialist most

and Turning from increased by prior markets and respectively. quarter prior year by the AUM the from XX% of XX% Average quarter XX% prior addition from trillion the net the prior to increased quarter. Ending to AUM year to due by as as the inflows. highlights to $X.XX from increased and quarter, and positive XX% Putnam trillion well quarter $X.XX the

to XX% continues X- of be benchmarks XX%, addition benefiting XX%, our on their AUM and X-, performance from resulted composite strategy in XX% X-, and and Putnam. basis, the strong outperforming respective Investment XX-year of a

XX% and XX-year outperforming In fund performance X-, quarter-over-quarter. X-, X- funds, of AUM XX-year periods performance the terms a in time on peers versus of XX%, and basis, resulted and mutual and their X- strengthened XX%, X-, across mutual XX% peers investment

Our perspective and at our long-term were multi-asset and reinvested assets billion classes, in quarter, billion from led net Long-term X the consecutive billion growth class were investment $XX.X income, across of including least was asset account, Great-West. vehicles funded geographies. to managed we Canvas and an net flows of net spread separately allocation see quarters high continue AUM. of inflows $X.X Fixed alternative and inflows have $XX way Each offerings. and are the $X.X at distributions out billion all in record achieved ETF the from and asset

increased prior prior the quarter. XX% quarter $XX year from Long-term inflows from the XX% by and of billion

long-term XX% elevated the quarter. from increased and prior in prior quarter inflows quarter distributions, are inflows reinvested XX% Excluding the Great-West, from by year from prior which seasonally the and

municipal corporate In high-yield asset net we reflected highly of multi-sector and flows $X.X flows bond fixed income client bond, terms net interest in were by core saw billion, inflows class, strategies. positive into customized

large-cap $X.X smart beta. flows Equity positive billion. and value outflows were net We into net saw

are were by driven quarter, which by Fund in custom Multi-asset Franklin from the Canvas, Solutions, prior Templeton outflows improved solution Investment distributions, XX% Income billion, reinvested net seasonally the $X.X and net elevated the our indexing quarter. Franklin prior equity Excluding platform. inflows

were liquid Alternative outflows billion, net partially offset strategies. driven by the alternative in were market growth by which private in $X strategies, inflows

Street billion. Clarion Partners each Benefit inflows a in the Partners, and Lexington total with Partners $X.X quarter had current of net combined

and billion capital global fund the capital exceeded date ranks wealth significantly As latest we Lexington's Partners secondary the and came mentioned largest XX of secondary among Lexington funds XXXX, in we delighted commitments. Fund its that approximately raised last quarter, from the $XX.X closed channel. in in private closed January, with total billion flagship with fund of $XX the management were which raised fund, XX% to

private fundraising general credit has believe growing product with platform structuring BSP due which attractive, in placements, current Benefit Templeton number management and reflecting Partners increasing share competitive and loan market total and our exceeded Franklin target. provides $X.X for wealth offerings alternatives deep credit the its on the lending underwriting is us opportunity significant diligence, Xth and closed focus Also BSP U.S. capital of Street demand expertise channel, and for strong by and the has experience, expanded a base. direct of increased advantage. In We client class, market with fund backdrop commitments, its flagship billion the in January, asset alternative the

our advisers asset to XXX distribution than of benefits individual XX% financial with potential educate force the clients market their group of alternative specialists of investing. partners Our and private more on

We months expect a XX next busy markets. private across

quarter the of $X the inflows. Canvas over to AUM $X.X tenth partnerships. of net billion and an approximately of XX% and of generated at strategic quarter generated at the quarter leverages million positive from consecutive From by our billion AUM representing inflows fourth across ETF Investment the billion, $XXX net quarter a Solutions inflows representing billion positive of flows robust to over net consecutive $XXX $XX increasing AUM billion. pipeline capabilities perspective, private net nearly net and exceeding $X asset vehicle SMA investment generated public ended pursue classes inflows of ended flows. with another quarter and prior and the net quarter billion $X

flows generated over billion, under positive Investment management assets This quarter, the including with Putnam. Solutions net addition of $XX of

a of quarter unfunded Lifeco. prior class $XX Great-West allocation of pipeline include and This strongest managers. asset specialist it's remaining across the one one our diversified quarter, from the billion, The from increase is not institutional pipeline does the our but by been investment remains significant and was mandates and

from With the XX% our AUM We've the clients net close investment of in reaction billion in we on with flows January to $XXX X, our Putnam acquisition year. its trillion are and of contributed since May positive by been and announcement increased the X% or positive our Putnam quarter, pleased last $X.XX a manager.

Putnam's and billion. XX% periods XX% X of continued AUM in fund rated in investment capabilities, exceeds insurance Morningstar. outperforming funds expanded and be or star the our now by fund our XX-year strong, With or channels mutual $XXX retirement X-, are in of AUM the X to that AUM higher X-, X- mutual peers and with performance

#X to the for We for X-year were Putnam X- #X also and Barron's period. the fund family that ranked and thrilled see performance XX-year

of approximately also we're demonstrating closing, strength average Franklin Putnam's the monthly Templeton's gross the has increased sales distribution. Since to XX%, by pleased see that

was decrease from briefly X.X% Turning from the an of prior Adjusted a to $XXX.X results. X.X% quarter income million, quarter. and year operating financial of the increase prior

of invest disciplined also and on in focus to for while innovation benefits shareholders. to continue our clients we and always, As expense management, the growth continuing

Before their you over our like clients' to future. and I for the for on your staying to our I many would thank contributions employees turn laser-focused call questions, always financial

to your Now it Operator? let's up open questions.

[Operator Instructions]

Siegenthaler will One be which from your at question America. Craig moment for Bank first of

the especially $XX net a have -- of outs billion, with ins we and Great-West. First, from and in question. billion the flow big picture Lots $X

core billion the the billion how should long-term net think the out of rate we run back of $XX $X So we flow net about if flows?

for thanks question. Craig, the So

and of question Let I kind get to color. promise you, me additional points me will will some -- add and positioning answer that in cover first, those I let Adam I can -- we're -- ourselves, how

firm, it we're will and flows now we I X in way think future. secular acquisition as has drive in trends of think the key the the that and our -- driven strategy what So positioned

So past, stay. is movement they've the banks We that to same to it's way lend the are think to that first to away, is the here here is going stay, in obviously alternatives. our equity private done going private credit not

from you breadth capabilities manager. alternatives so any look of asset capability Alcentra the have And think at we Clarion, BSP, we traditional if broadest of Lexington, our

selling take billion. as $XXX And in is a wire what houses a mentioned if XX% excited allocation comments, we channel. what's in opening the the is And in our increase educating what's me, And X tackling, was same go -- starts be biggest that. learning think obviously and that the team, known to from be really believe channel, And the in wealth in advisers our and to standpoint, space, that education, the about allocation was desire a from well strategy prior is who of with alternatives. comments are the and X% to a successful we any there's important able in a the just learning institutional wealth flow there, we're that Lexington's significant own that in can that And take educating we you about allocation. blocking stops to of fundraise about X% years

-- of them. second X I'm going The name to

The second is customization. just

specific clients portfolios technology be vehicles customized. You're from seeing advances or to either want that the

at things Mason made our SMA look SMA, you if a top X so positive, which Legg quarter's trends, us is provider. like And this

we flows going category is we at were ETF space. ETFs, the more largest into early SMAs, active in and billion more late actually in ETF while the arguably actually passive active space, our to ETFs, today, And $XX seeing were the ETFs. You're

like success Paris where markets demand changed, has environment regulatory we're And we're in for in our green Europe, seeing Alliance. bond greater now having there's like the And a that ETFs. and

Europe. doing in a lot ETFs the are of So ESG very well

get positive embedded XX XX then in to the that -- But the And to in partners continue have of you new Canvas. -- vehicle we vehicle kind flow. partners that -- from [indiscernible] consistently we customization in not pipes, the direct the only once being finally, we're see added indexing. And flows is And with seeing you Canvas. with

as think So Canvas it's that trend you're great fact a greater towards most just SMAs, us technology is what built a this opportunity. But as seeing excited was gets about I platform. Canvas the

about technology focused indexing a truly direct were on optimization. people the more This tax who is platform. of Some

tilting. So traditional active to able tax well portfolios optimize And being that. as technology of right have we taking see for can to have you as the

The is global big I third trend, think, really distribution.

in people of billion X the have that You class, entering are middle those XX% Asia. are

the were distribution. We that And XXXX. foreign first in so Taiwan massive were global we've in manager got We India. in

local have developed asset Brazil as as markets India, emerging of capabilities a China, local management markets. the in We well East, lot in capabilities in like Middle

positioned And you think we're flows fact, And positive of this so to we U.S. a really quarter, the trend. of that matter take as uniquely outside non-U.S. advantage were saw

fourth the is say, would the and -- I move, obviously, the where then you shovels the And the to of out important. and, make be important advantage the players that's artificial technology for so far, it's it technological firms make if to really really that I to And advances. been play picks you've competitive and think playing going in how this that's intelligence, work them a AI figure

a we we're it week work doing this hear about strategic big one on those You'll that are with where of announcing partnership AI an some announcement later players.

have out on to a blockchain. came money We market we And blockchain. then out with with one public a the fund XXXX. Act secondary And tokenized first the system tokenized in XX is shareholder the came

portfolio to with be the the It's know area different are leverage significant. a a nodes. first stable well, really -- announced it's firm we the they're technology, in going actually we think to an So that, and validator we'll do node systems with launch to going and to a We XX we shareholder our coin, space a servicing be partnership to blockchain UAE-based leverage managing there.

we new prior a team, region you're to a -- bring right? the relationships the choose XX when distribution -- believe it's best you I you tell athlete clients. I was question, together, about challenge you've acquisitions So we headwinds genuinely maybe put wholesaler you wholesalers we best to those think as are and do it's be for and answer trying probably to -- that team, there together could take and going a now with different it you your your you, found it's broken but in get to where And execution,

that so quarter. And like feel we're to time this seeing it But we those really build takes relationships back. off pay

-- You in $XX see than to sales, Interesting go just have solid $XX to million. not core Great-West wins billion our the pipeline define any that's statistic I core and in less pipeline, growth. billion $XXX is mean, it our not sales, That's we from Life. good, and sales

to So these ones are platform they -- you. an and the you just get adviser's just on that to allocate continue

success out so again, and Putnam, where those that up those there. are And excluding So are meeting XX%. wholesalers there a good

Great-West And look Life, inflows, at if you reinvested up they're distributions then excluding XX%.

in where strength. we're the those we're So positive vehicles, all outside positive U.S. pipeline we've got good

where And partners. to a firm and And this this, we've Putnam, about I companies distributors take see then number is are distribution you of they the consolidate big big talked or you think saying want where with like Putnam. it the

distributor, XXX-plus we're XX% you performance It's that's there out funds. now in Putnam's a and the of they so since story take wholesalers And that we've and with the phenomenal being And partnership. cases, sales grown acquisition. of Putnam, by client-facing of of the the our actually weren't telling just a Putnam where get really, they benefit where preferred some part preferred partner the be can a

quarter increase And the together bringing so that really it distribution in XX% to is of really because Putnam see exciting. a first of

distribution long-winded Craig, all coming answer, we've we feel in I So we're but think is that put -- together now. together like

AI We're announcement week. your this looking seeing forward later to

outflows. a have on follow-up We

it I $XX billion a million added add add too. know up, they we Benefit quarters, $XX X we $XX last all realizations up Combined, the Street If inflows. billion. of million. Lexington And Over $X Franklin a and excludes had this

excess to So fundraises. negative been flagship have X look maybe billion all flows $XX

the trajectory given question, just dynamic? the about how but [indiscernible] alts we business, flow should [indiscernible] So that net think on a similar

numbers. think of there's a it's noise alts in bit little I -- So the

If XXXX, X% markets. markets. you in our XXXX in you XX% raised billion, private markets portfolio, reality now. saw AUM, change realizations, But calendar net just look how net, our the of billion the and about raised billion everything. talked $XX in portfolio business, net alternatives was private we to $XX year represents billion it negative alts alts we we and the market, last the about the added time But $XX of in which of distributions, But AUM in liquid $XX private

from -- higher private markets that inflows the fee you're in little that's good it's liquid had that -- So had shifting the news where window, was by a the but much is solid masked that have lower fee it bit alts.

forward to fast Now fiscal year. go -- I'll this this

between that. for all, be billion of in the in and markets billion. just private first We're quarters, liquid X would $XX billion first track alts. about raising on we billion that That's $X.X the the We've and goal the So said $X another our for raised $XX year. under we

you and with to Clarion be nets and distributions, -- realizations, net market only others estate were honest, We'd if FX the all it out But negative real was positive. flat. market and the market, say to

gross of kind we probably realizations more in actually in and but you significant. -- the year. away FX, details if this could was a fiscal netted distributions, pretty on give far you again, Matt there. So take FX so number But the flat this,

Yes. for realizations had I'd on help try just negative was the going just on, get do But -- question for FX and and we we billion, this improve to quarter think we're disclosure we're for and this. Craig, and of reporting perspective, that say, and we billion. these $X last another to questions, distributions $X.X example, the try I our around

the of distributions the to we've quarters, we look, they're start explanation for -- and assets that of our we've report billion realizations negative the just significant where always but and But bulk smaller, said, together. were providing down alternative going the not information, again, $X.X FX. of realizations enough previous said, distributions they're we're not in level detail. $X billion and got reporting and always AUM, just just to last of when almost we've quarter, point one Remembering the Now we're break much now to getting

able the partners the do on the Craig, is other the our is more And would as spots than last speaks distribution I only wealth add was our ever closely fundraising few quarters thought able future work secure over to we that to well possible. the to that thing to really well. management and thing we've And I future been side with further into think calendar we're

from be Glenn at Evercore. will question Next Schorr

talk about to wanted I bit. So income little fixed a

pension-funded higher. $X.X feel billion rates of we're much don't much, in -- flows from from the you client flows, it I the into else? So in on [indiscernible] are quarter, little much I could I do Great-West this how talk us bigger the beginning income fixed status or better -- something flows whether picture, consultants is larger this some see fixed trend, of then at bit the that that. is about can or you maybe like broader a know you if income? and came is of long-awaited insight the be but And of the give a combos maybe RFPs, So

Thanks, Yes. Glenn.

let's interestingly, it. face So

think potentially potential believe -- noise and people is come increases. now have longer down, rate as the the talking where somebody long rates for people the will you're As duration, to right? hear peaked a and only to time longer they're first be thing even about longer may going for higher actually was starting rates go So

we're let what slow could you So me But things. that seeing. give

pipeline pipeline, So but doesn't the include Life. Great-West any just and had at obviously the we looking positive flows,

the Western, If percent that Brandywine. growth XX-plus in fixed crosses is you of -- income, and and add well, Franklin the about pipeline,

how it your portfolio. the the of be because BSP really are The because add income. always thinking from you're about should think credit pipeline, the you income private of around I fixed in XX% fixed If comes actually in growth that decisions often income fixed thought

X our this highly bond, gross XX bond, last quarter So in fixed munis, customized the corporate of income, multi-sector, top were past selling funds -- [indiscernible]. in core

last strong going very pipeline quarter. at if income. see you But definitely for pipeline, look the you So in fixed actually forward, the demand institutional the demand

pretty And that say would I it's also broad-based.

segment. income pipeline, it's have firms a we're right take positive look that very of we now. which high all products core take you at And a munis significant in really look X in offering, you our have, was funding we're across the If at and best-selling all if yield fixed the pipelines

So appeal, fixed really broad-based product. just one income not

they're their also on is Yes. they're last terms positioned And say are differently of -- that also going. I'd where in rates thing view on

by franchise. we've but the parts where strength had means being offset always being fully not weaknesses. some that other offset So performance It's in partially of

And to is doing asked on that ETF muni different SMAs, also in well income us. fixed lots vehicles about positive of and business the strong, institutional ladders, you we're for

the allocations lot? X a of do up look. ago took out? think have you will follow very [indiscernible] that. X lot on In allocations it's is Or forward changed years major a But allocations income Just topic and we higher maybe bullish forward, words, flows. to But shift? I hear That's are other year equity snapshot where you fixed ago I year a commentary now know years on X same a that and a the if see a you income lot fixed broader a we'll be like for than

it spread cuts. are aggressively Matt for out on rate all positioned as -- probably rates higher frankly, depends And fixed teams on little The Western longer where bit more is think income think their kind guys think go. I Adam view I or our a of far mentioned, view on for as you your probably rates. as Again,

your well. private on really it think as expectations, think it markets higher equity returns longer, I do I So on as stay impacts as if markets depends for on views. rates has far

should our I they you depend people So think where to do they want going position portfolio. think again, add know, anything? Adam, where Glenn, don't I -- I it's -- to on think

Yes.

do income funded mentioned pension we're wave towards flows. channel on immunization of on, alternative. That it a going the move the You depends think really same around is plans, At buckets. of we of What more other is drive money traditional time, I If get out world. coming fixed right? that to the right? see more going all every a the client, fully we see in

both each those income and kind pushing are direction. of fixed opposite other I of So in allocations the think competing with

Next be Fannon Jefferies. Dan question at will from

I could with start guess, Matt, maybe questions. some we expense

was some quarter, the what about year of much and seasonal curious you full this impacts into comp to of guidance go outlook the of update versus roll So on in XQ? off we delta us how think expenses. as for then do then we your expect And maybe the kind about as

Yes. Yes. Thank you, Dan.

So comp a of higher things I'll like a about get in around couple just resets a I'll I'd minute say the notwithstanding compensation higher on compensation expenses around and the second. to meaningfully second that to that in talk resets benefits quarter, and the markets. around calendar

you If have would the expenses the was quarter, had been in we flat. addition Putnam, main exclude which our

we higher fees expected. resets expected, than we higher performance markets expected notwithstanding and than So than we higher calendar

Our expenses you for the quarter would have exclude been flat when Putnam.

So demonstrates hopefully, discipline some that there.

fee to just thought around thought they'd quarter. The difference it's there's than your the fee, second of for where increase is their is and around I relative question higher less composition, I these we a would performance half of were then -- it Canada is, And comp bit but said performance half terms they're be. benefits In almost be. high would we the little we expecting than specific resets it say,

plus performance the adds in units to fund delta, mutual XXX(k), all it were fee $XX -- things the like up, million. plans, things add deferred compensation -- all when about vacation They accruals. those compensation up you So

million I call, I million guided gets on you you ended [ $XXX that So we to, $XXX much think $XX -- where the we million pretty ] [ the is to where the add where when ended up. up ]

of explains part your question. that that So

to billion performance that fees, about $X slightly but we've annual billion would that's excluding $X.XX to $X.X New the the exercise. consolidation a range. I very we of and guide, City to narrow terms just last our that And probably guided billion, In including talked increase quarter, $X.X rent double billion, around York --

we've it markets X% that's guide. this expect back down me very wouldn't part higher just equal, come experiencing slightly flat. driven as of that the we've markets right So remains remaining annual and our recently by the be less [indiscernible] surprise than we higher again. really But for in If been now, if annual guide the experienced. to it quarter, first higher,

just had Great. a mid on then effective rate fee That's year talked progressed. helpful. as to maybe the And into the the about XXs follow-up I it with you that regards think coming

guess, go all dynamics into given how is do that mix I where trending? you AUM So levels, the that, that see

Yes. you Thank question. the for

Lexington inflated I catch-up let's So we flows. the basis I based by also usual, And pretty of point for to dropped think X able to the quarter or guided And we And XX.X. terms point how than basis out had feel the that because we that's that on call the quarter. quarter do higher exactly good fees. was rate it, EFR in, pointed were the effective for for we're mix fee coming a X we're for in believe the I last that

fees, and in on our episodic driven those it the last an probably think, the we've basis, remain XXs in experienced EFR would will say annual I should that as XX highlighted I months asset that, over alternative higher be forward, slightly mid-XXs, than results. Going by our the clearly, in

And thing it alternative can percentage percentage -- and that higher assets a larger higher equities. of other and help of the is will be a it

much they pressure came as bit, that public in EFR the With a markets the obviously, so alternative assets percentage overall, slightly. as a going brought down down first our as did the up quarter,

about It's remarks, few just it's And mentioned fee rate the had Jenny Canvas, we more accounts. separately successes fee managed lower say, about ETFs, erosion less her And in per all as a quite se. then are in businesses. these business I'd mix. things

that quarter success next kind XX the but in Putnam with be expect so specifically, didn't mid-XXs. the fee the let's for the Putnam this because probably much success even is is the of of to say, high overall we So XX, They're as XX, in effective because EFR anticipate to high lower rate. we business a

are -- those all all But the Great-West we've lower continued end for But in Life lower fee are at $XX Great-West communicated, we of that that account. managed hopefully, initial from that example, we in of all expect Faster will ultimately, we enough that, general mid-teens. when in top in fee to accounts, got separately AUM our get Life, growth the that the the it on inflows like rates. investment-grade then amount categories, ETF, that which expect we will be as Canvas from the billion of come clearly credit, and things for lower in,

in guide XXs view, we mentioned, let's capabilities year Now asset have for our it. a Jenny because expectations the the reason again, why is months, for next the we the fundraising alternative call of XX the and keep as

high an go XX equities, on mix fairly but for that annual the at assets, in reductions income just that area. based X that we on for mentioned, basis, stable growth quarter. I of to alternative fee remain expect business -- various that to could and the areas into the expect of X offset that's then the quarter mix XXs, just fixed these So other times around the quarters year, But we the in

JPMorgan. Ken from at be will question Next Worthington

a fixed that's into performance? from cash? going of to fixed and to fixed getting income? seen going institutional on having? view any Are they you securities investors mandate, managers they just this So cash coming equities it a they remanage income, bunch are going are sense from? in going Or assets income? then On to rates get when of transition driving you're Or because switching it's win fixed that income an you what income Are portfolio the the you from you've are is of success pipeline credit? from fixed of If institutional pipeline, getting and you the you a do where are

You is might answer like answer, the but not the yes.

a a then, those seeing things, see I coming see We plus on in mix sectors so typically side, sale course, to don't of And that's from. of funded it's being retail added know duration all of Those where cash. of are a think the fund, of people we're really you ways. beginning managers different should We So right? of will some funded switch usually out. are often, performance. the those because to by people extend

We to We In a to transition how that's terms folks new using manager would ask securities of sometimes see time. certain I being a get fund the cash. to in we'll fund point funded people X and us We with see ways. and then it mix. a by folks things see see us different say

do thing we aid in of of Canvas how for other The much tax-efficient outside funding cases interesting tool way. as accounts able to see more a a for on funded in the we fixed of side, significant use accounts terms income accounts see to in where is that are taxable Canvas the we're actually

the thinking the you Great. leveraging about the And thinking just Or you've you on ETF thinking you having ETFs, leveraging that success You're are Okay. ETFs are your How States. in about about franchise and within franchise have brand how U.S.? you already are outside the nice brand? built? the

Yes.

very growth But a were to ETFs, investment question, our the us. so have but U.S. sold there outside One, they're of competitively. of point grown those success single EMEA, ways. we've that if U.S. the country, terms was real ETFs of Canada U.S. country your think in outside we're that particular. in on seen in the the X We also price important ETFs in Our ETFs mandate, been of That's even the of in and in focus for selling this don't I able regardless huge

the flow. that of Some country is single

X Jenny the go As be examples remarks, of seen that. well. some bonds, would in of that products S&P Paris-aligned, mentioned his more sustainably Green we've quite are oriented XXX

Outside is of of market, active, Passive passive but rate. growth see significant mix the most of smart portion by a highest U.S., active has still the beta. far the we continue and the to

that flow look our about things quarter, this you or ETF believe for I it of terms our at context, And put just of if to in from the half was of U.S. business. into so outside

very to So we that can good and really to results. trying best the expand seeing

Next Blostein question be Alex will Goldman from Sachs. at

quite answer. the busy little hoping I'm expand into markets. that wealth guess, remarks with I private months bit? over next XX when a was on you, dig I is Jenny, the be Could of you the about to to being assuming And part prepared comments to going respect your talked from

of make doing are market other channel opportunity already the to lots a guys busier. little the in, part So set you you offerings and in there? miss that seems with is folks wealth the sure and when like What you it the of coming about and getting opportunity don't window think bit

Yes.

in things. market on sometimes out, So few early advance. mean in surprised I we've laid different years to up to are getting a on X with the I mean mentioned, we we're And this. as Adam probably is This calendars. learn stuff

that So all Clarion's In middle of has are Lexington real case top talking X funds the -- beyond co-invest estate, they've Fund where their XX, got biggest and market areas the obviously, traditional capabilities we're perpetual. offerings.

real they're terrific terrific we always demand see performance. got kind muted So although definitely got for performance. estate. of They've They've fundraising,

when think I very should very so exposure have office. shift back, well because they things there to Clarion do And little

our can how several we've and our in the that. -- never talk and interesting, then going private credit, right fund been know Franklin there, And money it's talking structured Venture clients estate raising Obviously, debt Group much is in In raise Venture, wealth very case real of channel but credit the well. we're about first special actually, I CLOs, I in really and now to the situations. about, successful. is

between X had BSP Lexington and their just closed funds. you flagship So

digesting deployed markets So as market and they've the think back their then LEX Lexington's in doing They're the probably And as another come flagship. XX% I those deployed, -- of meantime, in soon market for XX, those. of But their they'll more those co-invest. into and are strategies, got with in middle in they're niche you're -- type investing cycles. their but they're that they'll

where heft the XX% XX% you underestimated. got I -- think emphasize distribution often cannot is product the the channel, right I in it's And the side. that on the and wealth And enough

external specialists internal, wholesalers, client-facing XXX-plus adviser's Our entire book. included to sell can an

capability to XX% don't that's breadth expensive say because that book. we only just you adviser's incredibly an you're If let's alternatives that have, to X% of have selling you're the manager, of

of where the our to really again, investment now we global, Academy, which about really portfolios I wholesaler the of advisers think able that just that supplement on to alternatives gets expensive breadth Academy to training it important. out there build tons capability field, so should is that how done website has And is being have. FT, been of bring in And been by we've the alternatives in we've years think, their that the has in a

So very much focused really on about channel, the it. excited wealth

we of there. capability in expertise and to to to have be I the distribution meet able successful a be think the that market and suite great products needs

you. got I

fee is it pipeline. come And coming or that remaining kind the at excluding you makes of high the help north fair in given through will come guys in sounds a sense. as Is pipeline, us rate? you low the back a there's of Great-West at So a that fee Great-West rate going it assume be you just described the piece size earlier. basis guess fee All clarification just then in of to teen-ish much I it? to bunch for It that's came the pipeline, pretty that discussed points, rate? And -- what's of on things end like Okay. institutional the institutional of as you guys then could

your any lower institutional, slightly want rate last probably number But a And weighted don't know, the look, fixed so the stuff from it's it's heavily income new traditional the is well, And up Adam, pipeline pipeline, quarter. EFRs. that's than in is overall weighted you XX-plus fixed I -- fee two, fee time fixed is -- income, in percent heavily the but income. probably then

if know but given guidance -- we numbers [indiscernible] never I the in on actual it's there? guidance give Matt, the have pipeline, So we

fee say would I rate. consistent it's our institutional with

Got it.

Okay.

and of to to from quarter the effective it's fee time. and overall but depending Life the rate. -- XX expected the expect on come the rest the on flow. type question, depending yes, from mid- months. And over be mid- can higher high on of be a the the that's particular the in XXs to it anything to your in we -- our then in nature Alex, next then -- It's the -- XXs, on flows And of gone answer the to the the average high second pipeline Great-West additional will

flow. that put detail of we'll, course, said, into monthly our we've As

fee So you can and calls rate when we'll provide have information. that, and on we the these see then detail provide updated effective

will Bill question be Cowen. TD from at Katz Next

on I weather. apologize Okay. London

start B, I from which alt And highlighted, initial $XX back part gets back billion you industry business. I reinvested, get minus about math of billion. the if of of SMA, to is ETF would stabilize out Canvas, the $XX think and for If Great-West, get flows doesn't minus the with X in it to X.X and net So about business? the I sort then out then what's the terms of a billion I X.X go-to about I if that your I that $XX here correct? the I billion. long-holding out capital that include, I reported A, of the to consider that's If back dividends managers is, $X.X the what And back be if the I down out from X.X. plan

Matt could. not He quickly. probably math the can't I'm do Nicholls, So I that

that the Canvas. areas you ETFs, follow you pull out quite that. where alternatives, of tell I couldn't will things So all I growth of wanted the to But some

growth than are I think business. faster our and they're little the rest we growing of the focuses that said consistently a those that

and If at you decay rate improving. stable look rate, business take a the at really outflow you our been look more our traditional it's to

up smaller very which average. over terms think in we've about we a notion the years, core Jenny think I protecting of at sales, about sales, pretty on to said at I earlier, is able to we that talk So few downside. a last on And good are do ourselves which XX% pointed job the consistently our been as

So pretty good sales about outflows, increasing the quarter the traditional feeling business. stable we're of part

channel. honest very we've been open just in And add, that been and look, retirement we've I'll the underrepresented

the of side we the the XXth call, on some date of of similar of in target And Putnam and others. as market products were retirement traditional with channel, date still and we to -- flows their it's on mentioned are retirement share, a qual we the I of and and as we it's and they've last relationship and well ranked quarter's As performance target this is stable platform, the as poised team to just absorption their take retirement increase well go their phenomenal acquisition as products, again, Empower's the plans, think funds, traditional mutual equities if channel income. got massive value, a asset-oriented investment very our fixed X/X --

with gain and our think just more all to we And that retirement taking not distribution from market share but benefit there. different just platforms to the Empower, capability,

in trying little area And just it's as get you equity bit where think then more I we in I'd important get to we think not that you're thing this add, when But is areas improve, performance it it's quite like certainly XX on areas, has particular, And really -- let's Bill, those actually that more concentrated it's the very we last but to performance the of to. numbers, usual, even those XX, begun side, got is significantly. call a it. in than which have to to,

those in outflows. So quite we've slowdown seen a

couple had On seen too. areas, the fixed some the know, there, in income we've we've but there, weaknesses you some improvement side as

you and slowdown referring see as a of a correlation situation in that to outflows. So you're fairly concentrated one improves, it's performance

I sometimes vehicle would to investment itself. from the difficult that Bill, And product separate add it's

all number We businesses ETFs SMA, have are positive, fund be team might positive, but is the their negative. investment mutual an they're a positive their where of and their because usage,

traditional not, business, vehicle flow, because they're the positive. So the At they're class, is core gaining they're gaining fund but choice, it because is necessarily right? asset that of the mutual the not

some seems sheer than more sizing I platform sense. all follow-up yourself, rate, just today. it's little on And given for it your base around the makes fee just That just a Matt, that, a would envision the maybe of just bouncing like of

vehicles And the XX% in that a door? level that if flow very money in Is just understand So Or that me into to And if for that case, can from so, are in is And the coming on the is might of then going of alts fourth? where that bounce high next input quarter. to you're of be? help just sort new plus be capital range managers. sort you that's if from raise? the the that turning you to back

so the had Well, we EFR remember, catch-up the gave guide explained reason where the that or and elevated for annual included an I so on. around fees the first I quarter

trying point. been about to that. we think points were to one basis pretty clear quite be close We've I at XX

when you out, So that get you the XX. normalize into

that on start add the of you it down at growth. it's ETFs, the only when not basis overall adding lower analysis Life And which through Great-West -- quarter-to-quarter Franklin. the just EFR transaction went AUM areas Canvas, Bill, when up SMAs When driving than you traditional point is and your areas than a remembering flows then and thing a And versus $XXX of of from -- the the business then growth growth. those periodically that's Putnam, multiple ago, the from side Putnam of the of it's the just multiple you coming flows areas we from Putnam, announced up second when higher from is other that's billion, of you XX% the

alternative back beginning fiscal fact little what we've EFR more what a that question of or asset on little business products up and also breakdown a up again have and of we fiscal a it into around through step on based XXXX, mix bit depending more could usual. fees. more you out more there's episodic could not, everything on a little gone down plus XX offsetting read possibility those Jenny into that just bit higher just form the some It's than is I'll that the I've experienced least detail a the But that in answer basically third on successful the the what But go a down XXXX, had an of factors. we'd what's at already I the of of that EFR. at little a quarter. It's why it alternatives. Bill, So going into bit has been think expect that's the that's we -- because activity episodic exclamation our bit. driven

That relative estate lower of lower for $XX performance reason that comp benefits the of valuation our why of to terms the Jenny the that's impacted be That's of that very real driven the from is around we're performance assumes the expect we mentioned, quarter, absolute fees. million. out to million. for down, note extent million. $XXX guiding than that by business and performance previous In but strong, it's third Clarion fees important estate to million That's fees come $XX quarters, performance the that real down $XX has of of

million, remain occupancy, $XXX at million. IS&T, we expect $XX it to

go all we because rent a going as we beyond to around away. $XX based in could $XXX double it It As expect And million. advertising, you bit that to more quarter, at probably that's G&A, expect million. next XXXX on to But be going but the on come million -- remain spending for fiscal planning be it later shouldn't on in know, as then go high we're that. won't $XXX down

So let's to say, $XXX million in $XXX G&A. million

the guidance based provided on already I And on annual earlier Dan Fannon's question.

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

quarter, our thank again for participating today's work to to everybody employees this in speaking Great. next and you And again, stay forward of hard and And quarter. look delivering call. healthy. you thank Well, dedication everybody, once to like all for would we their we

Thank and you. call. Ladies conclude this does indeed gentlemen, conference today's

lines. now may disconnect You your