Franklin Resources (BEN) 26 Jul 242024 Q3 Earnings call transcript

Welcome to Franklin Resources Earnings Conference Call for the quarter ended June 30, 2024. Hello. My name is Sylvie, and I will be your call operator today.

As a reminder, this conference is being recorded. [Operator Instructions].

to Chief conference of Communications for Resources. like host, to Investor would Franklin Oh, Selene Officer I turn over the your Relations And and Head

You begin. may

thank Litigation on this of in call to and Good not us which Resources, the Reform the conference XXXX. for forward-looking historical results. made quarterly meaning facts regarding today or morning, Act Statements of discuss you Inc., our Securities are Franklin Private joining was statements.

and statements the Factors unknown just These actual Form in factors other implied uncertainties uncertainties to Securities in and and future Exchange involve important a with that forward-looking are described differ the XX-Q sections forward-looking any and known factors of and These other risks Commission. recent the including most number from detail of statements. by Franklin's in MD&A Risk risks, such more or and could results other important filings. and results XX-K cause expressed Franklin's filings materially recent

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

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

some review quarter. the like from I'd highlights first, to But

NASDAQ also mark. due investment streak continuing The election third be dynamic quarter, uncertainty. the complex markets. surpassing public XXXX. with the landscape this hit markets, to first an with in reached record S&P X,XXX equity and our XXX above levels amidst the performance During strong Investors to geopolitical Starting continue earlier for financial historic a milestone XXX Likewise, of its macroeconomic, and faced month closing XX,XXX time

stocks mega drove value artificial seen outperformed X and half disappointed first inflation themes year. markets. cap AI pullback calendar big the respective of in stocks beyond stocks and companies of big Every to will well supportive earnings outperform are July trends operations intelligence in how value disrupt and Inflationary month-to-date. to growth companies. governments tech is which as or the moderate, late However, their growth and improve companies AI of is tech has we've business a The models. continued have impacting examining

interest have favoring to boost But have seen sustained broaden poised market broadly in because been X the the active which Meanwhile, equity to last disinflation estimates acknowledges consensus comfort expect weeks, with create year, stock trend on are returns rates, currently likely regions rate and few appropriate highly so which the sectors as managers. momentum. weakening of signs some in of growth progress that speak opportunities Fed looks signals will and greater Recent been we've by Federal overlooked. the investment latest us. allocations cuts on provide the could concentrated, remainder Reserve a to This

less effective. As their look closer we income source as cycle, expect to regain fixed the a search to for we cash begins yield primary rate cutting place Fed's traditional as get to

specialist a Private the secondary yields. in tight in levels, markets yields current deceleration very of our near is opportunities spreads private anticipating levels to attractive and activity equity are investment seeing and our While are at continue at credit managers not income thrive, pricing the to power. unprecedented we attractive fixed seeing private and managers find continue are sharp space

are in alternatives, income impact weigh a active of As and and select in pickup fixed with top investors more seeing becoming priorities. equity sectors motion investors we're trends, the these as money

of dynamic with fewer clients markets. of given managers continue to nature complex also wanting We trend current work the see the to

leveraging the success consultative way our In firm. with in more have strength and more addition, clients engaging a to large we of continue full

Templeton Franklin partner with partnering a of capabilities benefits clients world. a single for makes breadth is true the offer the of global around the of through platform, we One

managers across clients investment to achieve private our better specialist outcomes. markets and help to access offer public We asset and investment continue to classes capabilities and broaden

from quarter quarter. to markets. turning year well flat to trillion, quarter highlights was Ending positive Putnam increase of AUM prior the an XX% the from and primarily the addition $X.XX the the Now as from due of prior as

X% year and trillion Average to from quarter. from prior AUM $X.XX increased quarter the by XX% by the increased prior

their time-tested across X-, to terms X-, performance our approaches. teams Investment In periods. remained performance, of and the have remained investment investment X- distinct consistent true disciplines XX-year and

AUM their and of X-, strategy a XX% X-, on benchmarks XX-year This our X- and outperformed quarter, XX% respective XX%, composite XX%, basis.

outflows Long-term were Great-West quarter $X.X $X.X quarter. Reinvested the prior the $XX.X to billion Lifeco, in was out billion net funded and previously billion. billion from funded allocation $X.X in billion Turning to to the the announced year billion. of $X.X bringing distributions flows. $XX prior were compared billion total $X.X

leverage provide needs Trust our long-term geographies. across net clients' were team classes classes, the to quarter our public asset cannabis International and ended solutions Solutions across Fund, with Income Fiduciary private Solutions. of firm. vehicles Multi-asset AUM and into alternative make across the nearly flows help Investment solutions asset demand inflows plan net tailored We positive The to multi-asset our to Franklin and led Investment takes firm-wide Client billion, continue $XX Franklin Franklin by and during driven flows billion Templeton best in diversification the investment and net executing of quarter. Templeton's is the on to thinking investment $X.X and progress strategies positive capabilities

market Alternative net inflows were $X.X growth private billion, driven by into strategies.

funds inflows, exceeding raise combined Clarion Venture alternative $X.X final a Partners managers, inflows Benefit of BSP in billion total generated with the capital million. net alternative Partners and II net and to Our $XXX generated May, In over of of X $XXX of of continued target. Fund commitments Partners Franklin Street announced Situations Special Benefit total we credit. its its close million Lexington Partners Partners, Street largest

private with investors. to engagement high-quality attracted beyond areas debt diversify clients from into has debt real lending significant direct estate portfolios Interest like

to be transactions increased its increasing in to Partners Lexington billion team the secondary private transactions private to most managers reflecting on a investor and asset a has a CV In on highly demand. participation bias announced flows, And Lexington experienced the equity. focused them approach. equity, CV continue $X response focused in dedicated largest, strategy new interest established in in with team Turning invested differentiated toward market. continuation date. will transactions see approximately leading single most clear in secondary the the vehicle to

X% fund this on Clarion the AUM perpetually And fourth over U.S. of be half given continues global been of well Europe, than the logistics to wealth investor and has in specialist our that trend. Lexington With positioned Clarion and management of in logistics focus new AUM raise a dedicated the office opportunities this in channel, in to we strength focusing team has continue the sector. for sectors industrial open regard fund education. the and launched open-end less a sector. open-end retail funds beneficiary X in strides investors Partners on to with year, and sales make a distribution with

with our region. This in quarter, retail expansion the a alternative team dedicated announced we EMEA initiatives the of

real including ahead, equity in Looking estate development, private products remain product new focused private and we debt. on secondary

of anticipated of $XX to fiscal start reaching billion on year, year-to-date. Just this to raised fundraising we our top we end $XX having that as billion our reminder, over well a of fiscal quarter, raising the at And in and billion range, the are as $XX alternatives.

vehicles each noting client Great-West. across from grow were part excluding type. diversify Franklin worth manager AUM platform, and of X% quarter. billion, and inflows and being improved It's to has product strategies the since that Templeton's income alternative increased outflows Fixed approximately net from prior Inflows asset continued $X.X

fixed noncorrelated As investment calls, we've said benefit from income with strategies we philosophies. on broad range previous our of

U.S. in net in global highly reflected certain performance taxable strategies. customized positive client multi-sector we mixed saw sovereign strategies, flows into and Despite interest

cross-border dynamic vehicle funds, which a all continue fixed on saw we offer SMAs flows. and strategies increasing team's clients positive ETFs credit from in multiple exposure to X in highly in our benefit ability income, sector multi-sector in Additionally, we in environment. capitalize strategy and to from Notably, with credit net interest diversification

gross net all our by large Core ETFs, outflows Cap billion, ETFs and inflows single-country totaled from were billion net $X.X single-country last were Equity the Equity of improved and XX%. quarter, our improving value billion AUM. $XX cap driven now sales outflows $X.X strategies and significantly in by in

are and deliver expertise With to we of investment of we capabilities, quarter able retail net vehicle types, SMAs, a saw flows across positive broad ETF offerings. lineup across another strong our campus

management. with billion $XXX franchise are under assets in a We retail in SMAs leading

million $XXX indexing example A This platform. to billion is quarter, quarter our the portfolio and net enable outcomes of AUM inflows. from in quarter. for the flows by of generated to good $X.X custom innovative are net of we of XX% fifth million, increased we personalized improved solution prior consecutive investors. $XXX a continuing have Through generated quarter technologies, and the Canvas positive solutions robust pipeline. to inflows continues Canvas, net

of strong flows net the generated business and $X.X consecutive our was to ETF Meanwhile, quarter's flows. and net net doubling inflows prior of billion growth positive the continued approximately XXth see quarter

solutions of managed beta objectives and smart through Our ETFs. a conditions passively active platform range for provides market investment and

was strategies. years ETF billion $X end more XXX stood across at X at quarter our AUM billion. ago, Just AUM $XX than

As a our regionally deepen we presence to across sales model, continue our focused globe. result of the

assets finished fifth its with net the non-U.S. and $XXX approximately consecutive in saw positive management. under business Our of quarter billion quarter flows

Our West. of mandates $XX.X allocation one institutional billion, Great pipeline but including was remaining not unfunded from the

from wealth Fiduciary Pennsylvania Trust in doubled acquisition. in XX% Trust years X has expand $XX Capital more grown since continue $XX XXXX the Athena have business in management private our billion. past billion to We almost than and AUM to International acquired

is through the priorities organic business accelerate and of growth investments management acquisitions. our our of One further wealth to

artificial outcomes innovation rapidly machine across intelligence, the Our client learning technology-enabled commitment and enhance landscape. us investment to to changing blockchain positions

make various As operations. evolves, and investment across technology the investments management industry of management to in continue aspects we distribution, asset

and we with platform, build are support for intelligence Earlier to we into to more create Microsoft an AI this personalized clients. processes which financial announced sales help working quarter, will artificial our embed advanced marketing that

Envestnet, will plans the industry minority of our classes. management selection and of platform. the we investment a support We across long-term also This public week, announced our reduce simplification earlier investment announced to And expenditures. to a unify strategic in single significant make operations capital this market platform a asset technologies

the ETF ago. the to launched digital Group asset-backed revolutionary our our of Franklin Capitalizing Assets XXXX, trend, give to significant technology. on access years, much of our the space Formed we second decades emerging additional Digital witnessed this directly The in technologies new asset class. digital asset earlier this clients Templeton impact week, this recent growth has in has blockchain ETF proliferation experienced Franklin Ethereum like

and and online collaboration pleased well financial brand our SBI help investors extensive with innovative The focus generations a were Holdings, and reach goals achieve Japan. aligns asset announce their will through Japan our with SBI's ETFs including emerging to proposed in commitment we today, venture of The Earlier conglomerate leading to of cryptocurrencies. classes, on joint assets new digital financial strategies. in

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

will to Looking and our continue priorities ahead, management in to wealth the management. asset support business invest in we strategic

of Finally, Manager Year. all our Asset and in their around the investment both June, testament of to true partner is being in news to employees recognized commitment the This a ideal Templeton world. as Franklin helping the

[Audio Gap]

will be your Blostein Goldman And at Alex question Sachs. first Instructions] [Operator from

and et the of going part And take you with there. last hoping was benefits it's long platform operational margins, can cetera? items ultimately, in get been deliver? announcement. just can to I the that, on talk expect to rest could implemented, couple to it's fully of get well. and nice know the year of it for to the as maybe out expense you for But operating Aladdin about you benefits sort expense the both I Matt, as the we quarters How speculated do of the start hit

you, Yes. Thank Alex.

line I'll and get of about of background costs little So this, talk implementation Why first. bit And it? to expect as we then you've and a out asked. points the a what couple time we've done

taken amount of first this our extensive this? unifies it because our investment investment done why managers. was So to management of this we all decision. decision years X make no that specialists made across to months us and We've across all market know, investment all, specialist which, was our public a businesses, than This less has collectively technology as have . of XX of managers done you importantly

benefits internal and book go both In brings portfolio of reporting things, multi-asset construction in across what the through And terms record, multiple firm clients including systems connectivity, of most but this good a most manager developing few tools, single the of a of X consistent specialist purposes. I'll of management importantly, expect, just and the several investment you'd the benefits, for vendors. importantly, candidly, and platform it cross versus form cross-team, in order management is integrated investment assists for and it reporting solutions. risk

we've over business. and companies active as been it's to in time. new like faster lower platform a It's cost single And business, strategically with because it's you integrate. know, also, And add adding to easier the easier this,

of terms in Thirdly, implementation costs.

implementation be So peak expenses be to of be the 'XX, expect expected X where to years. to next over costs fiscal of and these $XXX million 'XX about approximately The would we these XX% are costs assumed. X

or close next be several XXX% to costs, of from we we the on XXXX, expect though, an million quarterly implementation this to per the then in basis we operating at expect at neutral And of expect to least. a absorb about fiscal Importantly, $XX to million XX% to raise income XXXX, we begin perspective. over $XX savings years, expect annum. meaning between around to realize to and that

will things can going the we other million the with associated quarter, of But initiatives we've that should based we we cost several firm. to start add IST on implementation. on approximately of again, mean got expense in Next have. additional this that absorb that $X

So mentioned, any. quarter initiatives, per be as other the impact quite should if modest, given

in do most is we important to quarterly on if in do to guidance. advance absorb across to said, the a going we that going most even I But expensive to message And company. Alex. implementation quarter, that expenses an exercise, But have out, anything for our important those the as here is this that due to though of we're other able obviously will call is, be most we're going efforts likely the

be fee our comp stable stable very we and the the effective were expect from where next terms basis guide $XXX to for rate benefits In XX.X of quarter, remain at we to expect we points. quarter. this million,

million assumes This fees. performance of $XX

between $XXX million the $XXX of to We earlier management around and $XX $XXX that the G&A, respect XXs, $XXX includes $XX mentioned million. I million the we around be platform. expect IS&T expect to This beginning between million be million, Occupancy, our investment to million in we to high $X implementation million. and the with and be expect

be Hawken Next question Brennan will from UBS. of

questions of couple on a -- The Lexington.

about then how where when that of So And has does the kick about the curious for to think next for off deployed. look Lexington on an XX update Westington typically where we threshold much fundraising been flagship, happen? deployment would start to

Great. Thanks, Brennan.

message . First of that a of been deploying gone well. obviously at they deploying that's to than historical. X. little middle this basically, have all, just bit Lexington's co-investment fundraising been market and Fund they've and cover faster And year, that focuses and the is has it discounts higher Meanwhile, been

enter I that is don't So market the remarks we just deploy that's very see it's interestingly, they because will they the to right, we of their date, liquidity the possible looking And a continuation don't opening We it but than specific the think ability anticipated the also good. have quite in needed space. faster. vehicle. capital about They it mentioned it, the in sooner

liquidity. about particular where but want some that LPs these they've So a want holding they they of done the $X GPs have billion to retained, that have

that. funds. it there's hired that They create their opportunity out of vehicle. of spin leader Lexington even in they actually So a part having a to into that be fund new it market a traditional instead in think

be So another for to Lexington. that's I opportunity think going

that significant focused underway management institutional efforts historically market, channel the the non-U.S. management and I has they in very excellently been to we're both wealth by that would perpetual engaged tap something And on can better to wealth that's are in markets, that Jenny, Lexington piece add there vehicles ensure and while offering the developing. is the only U.S. in

have heard Or... Jenny, discounts the we in that the had those those actually just, narrow. discounts to, to And seeing Are wide begun they that referred you still marketplace? discounts

discounts. they are than definitely robust are versus narrow, They discounts, better historical to starting historical but discounts still seeing still

Yes.

guess, So levels, even they've narrowed. attractive still at though I

Yes.

question Bank will Craig America. of Siegenthaler from Next of be

billion from question allocation is Great on the So my $XX AUM West.

billion relationship So the reached few million. this upside you're you away. can this has beyond talk probably about incremental $XX $X in After over about the months, to a time

you do to want Adam, take that?

Yes. Sure.

with So you see time. I grows any client, over think a relationship

West have So the executives something tower that companies. process, to contractually first we great billion oriented. meet been $XX well many that was the really as Throughout was as more Life able related

them. the with midst development are product in We of

companies been of in. So the insurance types that are on products has the initial allocation generally interested really based

you if able allocations we've a income significant what see on think received to well I great fixed other some well the most far. as allocation do side. since we've companies so been develop core companies, power tail as newer been the you'll things insurance platform to ensure a that to as goes has West insurance acquisition doing as alternatives. for from at the with to is retirement look But as both That to well products, work Life as

we point development Great is So West. not income can are allocations basis to things see will And been on so continue the where pinpoint far. that but has core fixed will at there those we product a be, from the with we significant broaden that think out of what going yet we the

with, candidly. arrangement it's add relative we've firms the to the But Craig, we're group does delighted that, so billion just modest, power business that just and companies billion I'd far. clients -- is still and other obviously, management context, thing Adam, the with other The $XX of investment $XX to and for fairly in got

think versus building relationship multiyear just consequence that transaction. go as happened way this of a So exercise a something the as we relationship, further with that's a have and we to of of

think that group catching important that's to I share the to mean, going this. continue But is not our relationships significant other with it's of we companies expect for it. note investment of Power [indiscernible] very have whether I or fair

Next from Fannon will at Dan be Jefferies. question

you hoping upon what was the projects. or are I new the tech Matthew, could to with guys you expand clarify doing costs offset implementation

if we of And of missed those some ongoing -- more savings? timing of can is kind the versus of any ongoing So Or those costs the be between are what now? about the there curious period that? specific? initiatives So shouldn't catch-up some think are, phase-in or you implementation

this significant don't But as any are Yes. there I be these and of miss think Dan, [indiscernible] Deloitte ton underestimating I we're not said, complex, implementation will and and should project how our all timings. that and No, complexity a resources the work things at quite I the at contingencies Deloitte, implementation say implementation. like have over we to should a work. we've both both of on of and to with planning done around is Aladdin. done this though, the I we've with that Aladdin -- planning -- our We've hired say, we've expenditures done diligence. consultant I built done partners. extensive both But understatement at an of determine That's very we've own don't team. to this, think extensive We've in course, work a us due and with sort

is there focused We've to this. been call extremely out. on anything

do expect that said, I don't sell I we happen. that, and will but again, I don't but selves, want to to we -- jinx As

the across is have. savings effective and to opportunities acquisitive complexity being absorb be it able previous down from portion to we're and we acquisitions, the it, referenced different the providers one additional I've benefits future large over to multiple all to efficient going one. acquiring X the providers tangential does how years, and last notwithstanding more work calls, integrate of A the of lead and around of terms In in platforms to of

course, the with to relationship have a that less we'll Of Aladdin relationship going but technology on have that. still side we're our complement than

larger scaled We a also much have relationship.

otherwise partners regard. we we ourselves from some own absorbed externally that than amount we very have we So of our are have of The resources costs that example. Deloitte for there frankly, pricing benefits in more the would the of have and platform if were that course, can the afford our meaningful are and Aladdin modernizing platform, in we

of those all of it's So things sort combined.

We multiple middle offices. have

multiple have We systems.

in whole It's heading, terms just I've described. to which the vendors, technologies. clear, it X efficiency more platform way, good are to industry an able is boiling to quite needed this as and into fine, in this We firm, where but coming, anywhere less works afford across complex is is is how way effective this of down we're all be our do

question Morgan Cypress be of from Next Stanley. will Michael

the that Japan a SBI. you maybe Just I announced with that Japan morning this in today. lot remind wanted you JV in was your to can changes back circle to us certainly of just of in footprint hoping market.

maybe how time this of you what into upon opportunity Just might Where set over this look in could the biggest the that evolving? of in seeing that envision help the And And in there how you curious some JV touch opportunities you working does market? you're and terms be of how and sort what Japan? set JV economics opportunity will do like? success tapping see

Yes.

So Japan a Unfortunately, I of in has [indiscernible] fact. as we've matter [indiscernible] time. been great long a actually for in relationships mean,

This quarter.

$X.X and a that. retail beginning was little it side, bit it digital with be talk investment is that assets. could had And the Japan. and a to Japan, shop, launch to the billion on part starting about market has we big as of think honestly, that Putnam. to been foreign is more ETFs institutional net inflows A business penetrate difficult in in difficult, I

they're tremendous largest have mean, So SBI, the here digital with a conglomerate. financial probably they reach. I

be up, to so XX% the we'll XX% Franklin launching as market in as space it's Templeton, well. owned I And be ETFs. think products of there the launch a And SBI, able crypto joint opens and digital we'll it's --

seen we of of than marketplace. institutional that flows else significant this footprint that quarter. to to a have not It's the now be anywhere results in of able a is that, our have Because nice We've And really local business. base the in different strong Japan there.

really Putnam retail and to has great the there. that In some a relationship of able with accelerate won distributors. assets the some have space, different number of a performance been we We've

thing a the first for We The that in on us. one the digital its the now client engagement innovation an is that I firms will to terms of think have breaking is not digital to a is Japan. SBI that. in note significant to asset is is SBI other really and side asset would direct of about we also of them very always only billion us allow base that be recognized strong with Japan be of And It's exception business for through to partnering consumer insurance have the Japan engagement. to one close more first $XX And managers model in Japan. in market

Brian from be will Deutsche at question Bank. Next Bedell

Maybe a an strategies back to very the basically of there you you substantially realizing wide two-pronged given that that? with it ETF the Is have product? Aladdin new a to And expand complex. is take if products strategy. do talk could And rolling you that platform, or ETF the more connecting of of you clone Or on across about the billion, it course. that range like -- with ability that the $XX said. the will is more But of some entire passive active just strategy more doing time, and franchise. then desire have just circle to more how product? easy out What's

category smart digital. passive ETFs category then And then largest of So the EPS actually, mean, beta and next then and XX% from active. over an is is I our standpoint,

So view our is focus ourselves a agnostic. we as vehicle ETFs on as firm,

we'll is the in whatever in deliver vehicle interested having So us deliver it like. our whatever market capabilities, they

a ETFs, interested of are fee-based. the strong who And by in particularly there shift a to the is advisers, driven think I is U.S. in demand lot

And been important to able so it's products. to be launch us for

the between I that some and clones think there about we been has be to ETF have concern appropriate. There to -- over launch are platforms. a suitability issues traditional is XXX a can an fund able of it bring feedback products because mutual today distribution and to launching

it. different to look mutual an like potentially so ETF we And at a convert to sort existing, way and a or some slightly them say, either ETF funds is of launch deliver bent that has if approach.

interestingly, the from are, of America lowest country which demand pensions the are market. in Latin believe, interested in I our a we're ETFs, lot getting single price Now that

And so there. Japan. We're flows as from getting good we've been getting Europe flows strong well as

And so global. it's really

ETFs these view choice. are a the Our in is becoming vehicle lot markets, of

be need able support so we know, And to you that? that. I want add anything if don't Adam, to to to

Yes. The I'd there billion us X been quite we've had in strong add has for flow quarters things, in a a that's net few and in about Jenny. or X.X% where row flow $X quarter, this at more flow.

in terms billion significant As on of tenured being Jenny's said, Americas saw Jenny we in $X.X and most about that fund geographically vehicles. flows in related in fund. up fund saw positive EMEA flows where this an we income U.S. mutual coming But cross-border the mutual also point income look diverse coming coming from fund, a fund the example, agnostic positive the we quarter, in very our flows but SMA, base outflows just from with for flow about a from fund, and million is $XXX if positive ETF. I'd in is mutual longest the the follow as in the the at slight region. just

and shifts offering away positive vehicles general us there, types flow. capture So income investor different and from global allows for in that becomes funds was demand the multiple category having to net by strategies flow the mutual as more X vehicle

sort the case fund on say think passive. -- that but one margin, mutual and to cost that is. very costs fund are kind where just will on and often us those actually Honestly, success the same with much administration having mutual thing viewed history, income fund that. the what transfer we're the early the is less the It's the be of you the of it in of going to the I time, And that the lower agency you potentially in in other ETFs don't vehicles, the so I'm actually, of ETF fund. And the on with arguably, do depends line being comes pricing in much way out the because over and have with SMA

our things as business supporting because That flexibility to expense in shifts allows was the the one actually us the it outsource in business. drivers decisions those the have to greater

at be Next Worthington from question . will JPMorgan. Ken

still As by products extension which and you this sales. of this benefit both big gross then with along the investors on are of your net. the struggling are lines, Western weighing year, quarter, possible of we funds flagship Fed the later picked funds? better performance to a are think up And duration those sort What think the issues income best outflows about positioned some same are acts fixed with if and do

So guessing of all, other fixed see are to cut SIMs as probably flows if into income. income in as interesting X your I allocation, probably positive going rates think this more becomes you're income. less and We've year. down, fixed had to Obviously, first out X of cash net people we fixed in go move

the category. the of and the outperforming peers excellent XX% matter AUM As outperforming X-, X-year XX% in AUM frankly, X-year of of line their a pro in forma X- fact, with at peers

some strategies selling in that actually X And Western XX are gross our fixed includes of out and income, top strategies.

a of lot positive in We vehicles. different flows have

cross-border, in short duration is our positive flows. So euro

core the not been it if think that about you fixed pipeline are income. of cannibalized Great-West and Interest areas extent, income Life. largest and flows core+ in to in and impacts passive potentially our passive positive SMAs really fixed the -- institutional closed-end ETFs that portion does some funds. positive is our and fixed has flows, Our retail Interestingly, actually again, how in actually, and have space. income. positive has we But our that It's been include flows are

me strategies. customized other And in multisector, so on Adam the munis helped the out highly

that from seeing not You're cannibalization the And been we've their kind as passive. positioning then of from Western about duration. has longer talked

seen the So X actually as and improved is that as far has kind we've a lot. performance month is rates in benefit come back, it potentially of positioning, the a as

would strong. yes. in didn't things. that, add would We I -- performance is franchise really muni the a talk really about The Jenny. few I muni add

And is and we growth franchise period as X-year see assets outperforming XX% We as in X about a the the mutual significant We we'll on think fact XX% well of SMA funds us. munis. have the and helping outperforming really strong have about there on that X.

curve, In coming into will steeper terms us. money of fixed should with benefit of out think in income, we the we cash which see a longer-term shift yield rates

sleeves growth The other that credit have a going ability and those that reporting thing note we real where us well the to more multi-sector allocations as as well be those spreads, different for bodes a ability fixed areas. we've are see thing credit in seen with seen is who fairly have the we managers allocate very the mandates multi that exposures the to regulatory . market more and to are in . The to managing and is across generation. income more tight final of insurance capabilities compliance accounts we've strong I in than aspects specialized, our from and as important specific is highly would alpha insurance those coming or

that's allocating thing on market cash tend who at that I move the Westerns just X and of funds think our to temporary corporate funds, wells the out. look add lot treasurers people in going between. a are management money But going all money because and market in dollars to over

priced from had of treasurers. very is really competitively billion from As net actually a million in fact, that a $XXX Western And corporate inflows. money attracted had product Franklin and $X which then flows, matter which a product, Luxembourg was product came

lists from was think now really and billion I it's $X.X market wanted advantage is fastest dollar to was that short-term fund, money yields U.S. product And which AUM. the U.S. I fund money now in saw, I in the take Luxembourg a that some offshore growing think that of who clients market

be Bill question will Katz Cowen. at Next TD from

versus a there's moment. I franchise ins bottom adjust where storyline a go of out that the may and little flows bit And So rate me coming it in lot guess going growth for lower. just you fee and I'm where here? line where would to outs is the how maybe top both on drive struggling when line do the they're a for stepping Because to seem are back I now. your right

seem you given because the you your rate, incremental would can the curious then that. mix. expense of of top fee the plus the that you're a then leverage. will I It of but like Aladdin line a lower growth sort thoughts on savings platform. -- story And the think than any line do for supplement now So more top Michel worried

So how do you revenue you leverage? we do And think about turn into operating get how -- how growth from then that here?

benefits the have the into some EFR that performance So baseline to one billion the year, some Look, you going the $XX things as alternatives, other of just that's much -- billion. of of excluding even pivot things. start on that $XX is then, fee think guided you a if I investment kind the And to higher I'm adding management and X this of that we to fee. of to obviously, Matt, jumped of fees and a --

is you yet But up and We're that's flagship out PE real outflows has where is from with pretty frankly, -- And plus we a in the really by some secondary $XX really billion, inflows the distributions. and been a going fund And to to year sort because weren't realizations flat. end really with and soft. market Lexington. market estate close of AUM of offset and

X fundraising allocations huge largest open as of So clear been perpetual while partners ended there just and estate. funds real there are to the is hasn't

a that think So expand. I let for me there's to hit couple opportunity those of do pipeline because

me estate. start with real Let

be market It's are to is well in folks and are feeling X to XX%. coming index. the And closer. probably ask and at that we One this about of to clarity used office spreads by on has a talking there's think really as the realistic bid more that's Clarion, where XX% think bottomed, driven now that things. down marks I as more

as there's to allocated on maybe only office. office finally, go the far X% more and Clarion to marks So as in has dropping

RFP up bit. had a in you've of Clarion adjustment fact, matter And as go huge a little volumes a seeing pricing. But

see they the that of properties where for of the sold and recisions some some redemption importantly, queues. more multifamily appraised And and value starting markets You're above above to the have were. sold and the logistics like

again, estate. So the managers end healthy think we're 'XX, to real kind of start is and a estate that back going feeling getting I sign of is allocating the to market the see to real by the that's

mentioned already faster. Fund about deploying they've XX Lexington, I been where

their has up issue, hopefully, a so And market there's much for liquidity be to for for but a liquidity, again, M&A needs And see buy managers space, we deployed do we'll for next variety and and LP the secondary when there's only demand their need fund. been is the that and reasons. starting which And alternative big a in in sooner just this of supply is that so positions pick handful of a large needed. can

were of in who the regional in where been offering ground have fertile products true on the has think interested There's made we've real clients that the parts channel institutional to then been have in that's And from estate power some BSP, I happening great so pricing because with real entrenchment debt. banks conversations but And distributors rate mentioned secondaries. interested tight, we there. private debt pretty and opportunity, and this just of credit been estate able real of both are this wealth for really

this the is you it think and more as a we've with right EFR I the was that the of in think alter did fees reduction you're up. -- of of a we because some of some there's Putnam. kind been this at gets adjustment baseline just look lot opportunity at kind we that So an I added for a healthy. lot there mention our year carries if fees of And

of the thinking as as are takes bigger equity, happening. it's not do than people asset not the not seeing much Matt, of you're just cover fixed vehicles percentage level. We're have anything? that seeing income think that's And I then same you're but course, want the so going -- much mix a And is you to to to it, because degradation

Yes. covered was the I mean of $X.X for probably basis I most quarter, Bill, EFR Putnam million business it. the bit mean, I last from point, there's under think, little Jenny, was example, on a X.X. you mix differences

And it's less AFR why thought. reason because, frankly, growing It's little be a projections now that as has a gave. hence, faster bit with I the partner calculation just up month, we Now thought do to the ended every as itself, of would the that, X.X from we the the that being faster than X.X than faster grow it has slight than grown anticipated. much is lot we guide the difference but of

flows since. higher higher we're AUM XX% transaction the we is than For when they've than every and been transaction, positive quarters month Putnam's perspective, since we in and both the closed when XX% announced

that's they're that come everything what AFR the the a calculation, averaging the has it down So and at rate, lower is bit. meant because means effective a fee

previous that has as you quarters account If such stable. take had then boosts into actually into our we've episodic to and fairly take EFR fees where you Lexington's account catch-up EFR been

frankly, together business is do raising of in a vehicles. the shot at all other X.Xs those at pointed once flows in, areas areas organic Canvas, will growing. actually there. you've alternatives, One lined SMA all mix. pointed largely where I Jenny When good also positive you fund to, normally income if we've as that in of been fixed of larger you ongoing hard or to tax with due referenced. others those mean, out get It's we've we And the areas bit got to little invested of it's flowing that sort solutions growth solutions, of down day, the that expect up be I'll out point have in we little get it offsetting to the right we and shrinkage more of come coming now. of that, mentioned, we've the the bit, quarter. that, some things that have take by all as but X And and group here a a growth to SMA has things is ETF and a and Canvas, very that ETFs, we in

anyway, a to information. So bit just little more you give

that I is tends would . sales. would add thing perspective. EFR that that Bill, are talked we're I an significant think And alternatives are final is, note That the alternatives, positive fee I our continued Jenny final about on higher and lot wealth sales $XXX sales we often the core obviously And business, see to something we be as at than up is thing in that is think and a about and less management core million from growth very about focusing very XX%.

Next at question Davitt is Patrick Autonomous Research. from

I have implementation. after Aladdin the answer would you of on like A come sounds through on what follow-up described your to lot a you have expense absorption.

And just extra if So implementation that costs lockstep isn't absorption that if capability? do in how vendor in you're so, to clarify, to with yet those expense? live the all expecting Aladdin off be fill to turn of you

that. of inclusive It's

be paying there that for quarterly the kind time we're So and But of vision includes Aladdin both assumption. for periods other we're vendors. the provided or will paying where of I you to view

million income there So think course, capitalized. quarter to the be operating a is modest on plan $XXX to years. portion impact that of over we very of our next the per or still based Remember, will adjustments X

something of probably gets more that So over years than over gets capitalized it years, out to spread more XX% X. X like

And technology that platform platform. we're I'd -- add not on uniform a just

over, certain as retire you systems. SIMs their migrate you So

little along. a as you lockstep bit And go so it is

Yes.

you vendors. offset thing -- those the the -- other about when important implementing we're the to And time are outer on of years you're opportunities . like as and other the company different -- that Aladdin, offset, that's why starting that 'XX, double earlier, sort pay that, also that across we 'XX get eliminated, of pay $XX-plus you and across the implementing mentioned we the We have is talking have I so double million to savings. when gets again,

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

I for with you for everybody. quarter. again speaking employees again, everybody would look their just thank forward like once hard dedication, our to next and all thank want of And Take call. I in participating to and work . to Well, today's care, we

does and conference this Thank your you. and Ladies gentlemen, gentlemen, today. conclude for call

now may disconnect. You