Ladies and gentlemen, thank you for standing by. And welcome to the Third Quarter 2019 Westwood Holdings Group Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s program may be recorded. And now, I’d like to introduce to your host for today’s program, Julie Gerron, General Counsel and Chief Compliance Officer. Please go ahead.

Thank you and good afternoon. Welcome to our third quarter 2019 earnings conference call. The following discussion will include forward-looking statements, which are subject to known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those contemplated by the forward-looking statements. Additional information concerning the factors that could cause such a difference is included in our press release issued earlier today, as well as on our Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on forward-looking statements. In addition, in accordance with the SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings and our economic earnings per share to the most comparable GAAP measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our President and Chief Executive Officer; and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon. And thank you for taking the time to listen to our quarterly earnings call. As always, I will start with comments on the market environment and investment teams and finish with comments on our business. Volatility continued in the third quarter as markets worldwide fell in August only to rally once more in September. In the U.S. the fed pivot officially became 180 as expectations were realized and the fed cut rates twice, citing muted inflation, slowing business investments and international uncertainties, as rationale for their decision to cut rates. At the aggregate global level concerns persisted over the direction of the economic cycle. Thanks to declines in leading economic indicators in key markets and uncertainty from the U.S.-China trade dispute. The U.S. added to invest reprehension at the end of the quarter with the launch of the Presidential impeachment inquiry. Increased volatility and an inverted yield curve in the U.S. created a favorable environment for high quality investments as investors turn to companies positioned to weather an economic slowdown. Companies with strong cash generation and solid balance sheets performed better during the quarter. History has shown that post a yield curve inversion such high quality factors can deliver alpha for several more quarters. As a result of the third quarter’s volatility, the U.S. markets were positive, while global equity markets ended with a slight decline for the quarter. With the election rhetoric set to heat up approaching the 2020 Presidential election we anticipate further uncertainty as markets assess each candidate’s potential impact to the financial markets. The fed continues its shift towards easing monetary policy constraints to further support the economy and our expectations are for global interest rate policy to remain supportive of equity markets. We will remain vigilant in assessing absolute risk in client portfolios…

Thanks, Brian, and good afternoon, everyone. Today we reported total revenues of $19.9 million for the third quarter of 2019, compared to $21.7 million in the second quarter and $29.9 million in the prior year’s third quarter. The decrease from the second quarter was primarily due to lower average assets under management resulting from net outflows. The decrease from the prior year’s third quarter was primarily due to lower average assets under management resulting from net outflows, partially offset by higher performance based fees. Third quarter net income of $1.1 million or $0.13 per share, compared to $1.9 million or $0.22 per share in the second quarter. The decrease primarily related to lower total revenues, partially offset by a $0.3 million foreign currency gain net of tax in the current quarter. Economic earnings a non-GAAP metric was $3.9 million or $0.46 per share in the current quarter versus $4.8 million or $0.56 per share in the second quarter. Third quarter net income of $1.1 million or $0.13 per share, compared to $5.4 million or $0.62 per share in the prior year’s third quarter. The decrease primarily related to lower total revenues, partially offset by lower incentive compensation expense and a $0.3 million foreign currency gain net of tax in the current quarter. Economic earnings for the quarter were $3.9 million or $0.46 per share, compared to $9.5 million or $1.11 per share in the third quarter of 2018. Firm-wide assets under management totaled $15 billion at quarter end and consisted of institutional assets of $8.3 billion or 56% of the total, wealth management assets of $4.3 billion or 29% of the total and mutual fund assets of $2.3 billion or 15% of the total. Over the year, we have experienced net outflows of $3.8 billion and market appreciation of $2.2 billion. Our financial position continues to be very solid, with cash and short-term investments at quarter end totaling $101.2 million and a debt free balance sheet. Our Board of Directors approved a quarterly cash dividend of $0.72 per share payable on January 2, 2020 to stockholders of record on December 6, 2019. This represents an annualized dividend yield of 10% as of the closing price on October 29th. That brings our prepared comments to a close. We encourage you to review our investor presentation we have posted on our website, reflecting third quarter highlights, as well as a discussion of our business, product development and longer term trends in revenues, earnings and dividends. We thank you for your interest in our company and we will open the lines to questions.

Certainly. [Operator Instructions] And our first question comes from the line of Macrae Sykes from Gabelli. Your question please.

Good afternoon, everyone.

Good afternoon, Mac.

Hey, Mac.

Could you comment about the outlook for fundraising for EM strategies, now that the performances improved this year, what are you seeing in terms of end market demand for those products?

Well, the EM asset class is certainly one that has windows back. I think when investors look around the world and they look at the various asset classes that are known for being likely to produce alpha, EM is certainly one of them. We have had some good activity recently with the improved performance. We hope to have something to announce next quarter with one of the larger firms that we are in chats with on the EM strategy. So we are excited to talk to you about that at a future date.

Okay. And my follow-up is in terms of capital management, how should we think about your strong balance sheet, high payout ratio and now increased feedback of about potentially growing organically?

Well, I think, as far as our balance sheet goes. We have always valued having a strong balance sheet. We have never had any debt. And we find that it’s, something that’s important for us as a long-term shareholder. As far as the second part of your question with respect to organic growth, I would say that, we have worked really hard to build a sales team like we have never had before and that sales team, if we add in the platform meetings that they had in addition to the meetings that our wholesalers had with advisors around the country, we had over a 1,000 meetings during the quarter. That’s unprecedented. And most of these meetings with the advisors were the first time that they had ever met anybody from Westwood. So we have a lot of greenfield opportunity. We have a lot of territories that we have never sold in and we feel really good about our profile going in to 2020. In addition, we have had a number of conversations with platforms, and as you know, platforms are shrinking their products shelf and it’s very difficult to get onto a platform these days. But we have made a lot of progress and really have three live opportunities and hope to have something announced when I talk to you next quarter.

Okay. And just to clarify in terms of like the last question is more about organic growth and your desire to potentially at fixed income, perhaps, wealth management. I just wanted to understand a little bit more about your capacity for using cash investments to fund those against desirability to keep the payout high and also keep your balance sheet?

I see. Okay. Sorry, I misunderstood…

Yeah. I am sorry.

… your question. I thought it was around organic growth. Well, certainly, having a strong balance sheet with over $100 million in cash allows us the flexibility to talk to very high quality firms that would have an interest in joining Westwood. As far as the dividend goes, that’s something we talk about every quarter and we will talk about it again next quarter.

Okay. Thank you very much.

Thanks, Mac.

Thank you. [Operator Instructions] And I am not showing any further questions in the queue at this time. I’d like to hand the program back to management for any further remarks.

Great. Well, thank you. Appreciate everybody’s time in listening to today’s call. If you have -- if you like further information, please visit our website at westwoodgroup.com. If you have any specific questions, feel free to call myself or Terry Forbes, our CFO. Have a great afternoon. Thank you.

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.