Virtus Investment Partners (VRTS) reported a challenging first quarter, with assets under management (AUM) declining to $149 billion from $159 billion, primarily due to significant net outflows of $8.4 billion. The firm experienced these outflows largely from quality-oriented equity strategies, which remain out of favor, while fixed income flows were essentially breakeven. Despite these headwinds, Virtus saw an 8% increase in total sales, driven by a notable 26% rise in equity strategy sales, particularly in style-agnostic and growth strategies.
The company’s expansion into private markets through the Keystone acquisition added $2.3 billion to AUM, enhancing its alternatives offering, which now constitutes over 12% of total assets. While operating income declined due to seasonal expenses, management highlighted improving trends in net flows during March and April, particularly in ETFs, which recorded their highest sales since September.
For market professionals, the key takeaway is the potential for a rebound in flows as the firm addresses its quality equity strategy challenges and capitalizes on growth in retail separate accounts and ETF offerings, which may stabilize AUM in the coming quarters.
Source: fool.com