Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the steps being taken to drive success in the ETF business and your outlook for the next 12 to 24 months? A: Robert Sharps, CEO, highlighted the momentum in their ETF offerings, now totaling 19. They are investing in specialist sales capabilities and focusing on platform placement. The strategy includes leveraging strong investment performance and scaling products to meet platform requirements. Sharps also mentioned the potential for ETF share classes and the opportunity in third-party asset allocation models, particularly outside the US, as a future growth area.
Q: How much of your AUM is related to direct lending, and what are you seeing in terms of investor appetite for private credit? A: Robert Sharps, CEO, stated that their private market alternatives, primarily private credit, amount to roughly $20 billion. While capital commitments have been strong, deployment has been limited due to a slow M&A environment. He noted that OHA Credit had $54 million in flows for the quarter and is building momentum with increased platform placements and field sales coverage.
Q: What are your thoughts on alternative investments gaining access to the US retirement channel, and do you foresee forming partnerships with private market firms? A: Robert Sharps, CEO, believes that eventually, defined contribution markets will gain access to private market alternatives. T. Rowe Price is open to partnerships and is in discussions with several firms. They are focused on creating offerings with compelling risk-reward profiles and are considering incorporating private market alternatives into DC offerings if it results in better outcomes for clients.
Q: Can you provide insights into the flow dynamics, particularly gross sales versus redemptions, and your outlook for the year? A: Robert Sharps, CEO, noted that the flow outlook for the year remains largely unchanged, with Q1 slightly behind last year. April saw a spike in retail outflows, which normalized later in the month. He highlighted strong momentum in fixed income and retirement solutions, and while positive flows are unlikely in 2025, they expect improvement over 2024.
Q: How are you approaching capital allocation given the increase in cash reserves, and what are your priorities for inorganic growth? A: Jennifer Dardis, CFO, mentioned that about half of their $3.3 billion in cash and discretionary investments is available for strategic opportunities, including share buybacks and M&A. Robert Sharps, CEO, emphasized that M&A priorities remain unchanged, focusing on acquiring new capabilities or accessing new clients. Private market alternatives are a potential area for inorganic growth, but partnerships are also being considered.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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