Hello and thank you for standing by. Welcome to the Third Quarter 2022 Westwood Holdings Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, -- [Operator Instructions] It is now my pleasure to introduce General Counsel, Julie Gerron.

Thank you and welcome to our third quarter 2022 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 in our Form 10-Q for the quarter ended September 30th, 2022 which was 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 SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings and 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 Chief Executive Officer and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon and thanks for listening to our quarterly earnings call. Last quarter I shared with you the impressive results posted by our investment teams as well as the exciting news of our agreement to acquire Salient Partners, highly complementary asset management business. As many of you know, we've just celebrated an important milestone, our 20th anniversary as a publicly-traded company. As we reflect on our journey, we've delivered many notable accomplishments over these past 20 years, through good times as well as in tougher years like this one. As we finalize the transaction and integrate the Salient team and its attractive lineup of products, we are enthusiastic about our position as a firm and can't wait to build our expanded business together in the years ahead. There were several notable items to highlight this quarter. Our acquisition of Salient Partners asset management business is on track to close this year, and is expected to be highly accretive to Westwood's earnings. Several US value strategies outperform their benchmarks, and our Multi-Asset strategies continue to post strong relative returns. During the third quarter global equity markets extended their losses as many of the same risks of the previous quarter remained or even accelerated. Continued above trend inflation and central bank responses to deal with this threat, have elevated the probability of recession, adding to the risk off sentiment that dampened demand for both equities and debt securities. Geopolitical uncertainties and the upcoming U.S. midterms aren't helping much either. Against this difficult backdrop, I'm pleased to report that nearly all our U.S. value strategies outperform this quarter. In LargeCap, our team beat the Russell 1000 Value Index by 175 basis points for the quarter and has now outperformed its benchmark year today, and overall trailing time periods of 135 and 10 years…

Thanks Brian and good afternoon everyone. Today we reported total revenues of $15.4 million for the third quarter of 2022 compared to $15.6 million in the second quarter, and $17.9 million in the prior year's third quarter. Revenues were lower than the second quarter and last year's third quarter, reflecting lower average assets under management, mainly attributable to the downdraft affecting markets worldwide. The third quarter net loss of $1.2 million or $0.15 per share compared unfavorably with a net loss of $0.4 million or $0.05 per share in the second quarter due to lower revenues and higher expenses, primarily employee compensation and benefits. Non-GAAP economic earnings were $0.8 million or $0.10 per share in the current quarter versus $1.6 million or $0.20 per share in the second quarter. The third quarter net loss of $1.2 million or $0.15 per share compared unfavorably with last year's third quarter net income of $1.9 million or $0.24 per share, primarily on lower revenues and higher expenses related to our acquisition of Salient Partners Asset Management business. Economic earnings for the quarter were $0.8 million or $0.10 per share compared with $3.7 million or $0.47 per share in the third quarter of 2021. Firm-wide assets under management totaled $11.5 billion at quarter end consisted of institutional assets of $5.5 billion or 48% of the total, wealth management assets of $3.5 billion or 31% of the total, and mutual fund assets of $2.4 billion or 21% of the total. Over the quarter, we experienced market depreciation of $0.4 billion and net outflows of $225 million. Our financial position continues to be very solid, with cash and short-term investments at quarter end totaling $74 million, and a debt-free balance sheet. I'm happy to announce that our Board of Directors approved a regular cash dividend of $0.15 per common share payable on January 3rd, 2023 to stockholders of record on December 2nd, 2022. That brings our prepared comments to a close. We encourage you to review our investor presentation posted on our website, reflecting quarterly highlights as well as a discussion of our business, product development, and longer term trends and revenues and earnings. We thank you for your interest in our company. And we'll open the line to questions.

Thank you. [Operator Instructions] First question comes from the line of Charles [Indiscernible] with BellSouth.

Good morning or good afternoon. I was looking at the results and while there's a loss for the quarter, there is an impact of income tax. I was wondering why you would have to pay income tax if you -- if we retained loss?

Well, the income taxes is going to be based on the effective rate, so it's what's expected over a year.

Okay. Thank you.

And there's also some permanent differences that you don't get to deduct for income tax purposes.

Okay, thank you very much.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Macrae Sykes with GAMCO.

Good afternoon, gentlemen. I actually have two questions.

Hi Mac.

Two separate ones. I'll just ask them and you can address them first. Brian, I just wanted to get your thoughts on the rise in fixed income rates and expected returns there. What they mean for the industry in terms of those that offer Multi-Asset solutions, will it be more competitive for those kind of fixed income products? And then secondly, I wanted to just get an update on how Salient is tracking from an AUM perspective, from the -- I guess, the -- during the announcement in May? Thanks.

Okay, great. Well, thanks, Mac, for your question. First of all, this has been an unprecedented period this year in terms of having both stocks and bonds go down at the same time. So, we have an industry that has lots of unhappy clients, because they've always counted on bonds to really be their anchor, and they've been anything but that this year. We think that rates are reaching pretty constructive levels, high single-digits for investment-grade, and just under double-digits for high yield. And I think that bodes really well for those that construct Multi-Asset portfolios like we do. In fact, it's a part of our portfolio that we've actually been increasing a bit here of late. And it's an area that I think as, as baby boomers retire and start to look at how they allocate their money, it's going to be something that's definitely a much more attractive part of the mix, given the yields that are available to them now and the fact that so many are on fixed income. And then second as far as Salient tracking on AUM, it's down from where we announced as all markets are down, but it's not down probably as much as a lot of others, it's roughly $4 billion now, and we're on track, we think to close the transaction here in mid-November. And that's contingent upon getting the proxy -- successful proxy votes for all the funds, and the client consents for all the institutional clients. But we see positive momentum on both of those fronts and look forward to closing this and working together. I'd also add that this place doesn't run that well at $11 billion, it runs a lot better at $15.5 billion and I'm pleased to report that as of this morning, that our…

Thank you. I'll now hand the call back over to CEO, Brian Casey for any closing remarks.

Well, thank you. Those are my closing remarks as I didn't see any further questions. So, again, if you have -- if you do have questions, please feel free to call Terry or I directly. Thanks for taking the time to listen. Have a good day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.