AAMI

Image source: The Motley Fool. Thursday, July 30, 2026 at 11:00 a.m. ET Senior Vice President, Director of Finance and Investor Relations - Melody Huang President and Chief Executive Officer - Kelly Young Chief Financial Officer - Scott Hynes Need a quote from a Motley Fool analyst? Email [email protected] Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Acadian Asset Management Inc. earnings conference call and webcast for the second quarter 2026. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question and answer session. To be added to the queue, please press the star followed by one at any time during the call. If you need to reach an operator, please press the star followed by zero. Please note that this call is being recorded today, Thursday, July 30th, 2026, at 11:00 A.M. Eastern Time. I would now like to turn the meeting over to Melody Huang, Senior Vice President, Director of Finance and Investor Relations. Please go ahead, Melody. Melody Huang: Good morning and welcome to Acadian Asset Management Inc.'s conference call to discuss our results for the second quarter ended June 30th, 2026. Before we begin the presentation, please note that we may make forward-looking statements about our business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding this risk and uncertainties appears in our SEC filings, including the Form 8-K filed today containing the earnings release, our 2025 Form 10-K, and our Form 10-Q for the first quarter of 2026. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. We may also reference certain non-GAAP financial measures. Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website, along with the slides that we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products. Kelly Young, our President and Chief Executive Officer, will lead the call. Now I'm pleased to turn the call over to Kelly. Kelly Young: Thanks, Melody. Good morning, everyone, and thanks for joining us today. I'm delighted to share our exceptional Q2 2026 results with you. As Acadian celebrates its 40th anniversary, our assets under management and profitability continue to reach new heights, with recent strong growth underscoring sustained momentum in our business and disciplined execution of our strategic plan. Before turning to the quarter in more detail, I want to highlight an investment team update that reflects both continuity and ongoing investment in our capabilities. We're pleased to announce that Alex Voitenok, our Deputy Chief Investment Officer, will become Co-CIO alongside Brendan Bradley, effective January 1st, 2027. Alex has been with Acadian since 2012 and has played an increasingly important leadership role across our investment organization, specifically in the areas of portfolio construction, implementation, data infrastructure, and investment engineering. This move further strengthens dedicated oversight across data, process, risk, and trading as we continue to scale and allows Brendan to focus on investment policy, research innovation, and strategic investment priorities. We are also pleased to have welcomed Jonathan Briggs, formerly of TC43 and CPP Investments, as well as certain other members of the former TC43 team to Acadian's investment organization. Their research, data engineering, and modeling capabilities are highly complementary to our systematic investment platform and will help accelerate work already undertaken across our research and innovation agenda. Taken together, these developments reflect the same strategic planning and organizational continuity that have defined Acadian for decades. Disciplined, systematic investing, continued investment in talent and technology, and a steady focus on delivering long-term outcomes for our clients. We are also pleased to see Acadian move up meaningfully in the latest annual Pensions & Investments Largest Money Managers ranking, rising to number 62 from number 76 last year. While rankings are only one measure, we view this as further external recognition of the scale we have built and the momentum we are seeing across the business. We continue to deliver outstanding results across all key metrics in the second quarter. Our U.S. GAAP net income attributable to controlling interests was up 170%, and EPS was up 171% compared to the prior year, driven by increased management fees, partially offset by non-cash expenses representing changes in the value of Acadian LLC equity and profit interests. ENI was up 107% to $47.5 million, and our ENI diluted EPS of $1.33 was up 108%, driven by revenue growth. Our adjusted EBITDA was up 79%. We realized $4.3 billion of positive net client cash flows in Q2 2026, representing a 9% annualized organic growth rate, driven by Enhanced and Extension strategies. Finally, AUM grew 54% from Q2 2025 to $232.7 billion as of June 30, 2026, marking another record high for Acadian. Turning to slide three, Acadian's investment performance track record remains strong. Five major implementations comprise the majority of our assets. As of June 30, 2026, Global Equity, Emerging Markets Equity, non-U.S. equity, Small-Cap Equity, and Enhanced Equity have 100% of assets outperforming benchmarks across three, five, and 10-year periods, with only one exception. Global equity markets delivered strong double-digit performance in Q2 2026, while navigating significant volatility with a challenging geopolitical and macroeconomic backdrop. Emerging markets were standout performers, posting their strongest quarterly gain since 2009, which presented a tailwind for Acadian's portfolio returns. Acadian generated strong investment performance with broad-based outperformance across most major strategies. Our short-term performance continued to improve in the quarter, 77% of assets outperformed over the trailing one-year period. We believe these results reinforce the consistency and resilience of our disciplined, systematic investment process, which has been built and refined over Acadian's 40-year history. Slide four details how our investment process has generated meaningful long-term alpha for our clients. Our revenue-weighted five-year annualized return in excess of benchmark was 4.3% as of the end of Q2 2026 on a consolidated firm-wide basis. Our asset-weighted five-year annualized return in excess of benchmark was 3.6% as of the end of the quarter. By revenue weight, 96% of Acadian strategies outperformed their respective benchmarks across three, five, and 10-year periods as of June 30, 2026. By asset weight, 94% of Acadian strategies outperformed their respective benchmarks across three, five, and 10-year periods. The next slide highlights our sustained momentum in net flows. We realized positive net flows of $4.3 billion in Q2 2026, representing a 9% annualized organic growth rate. Gross inflows were diverse across products and client types, and driven by Enhanced and Extension strategies. We've now generated 10 consecutive quarters of positive net flows, and we continue to focus on renewing our pipeline, which remains very healthy and active after the funding of a number of significant client wins in Q2 2026. I'm now going to turn the call over to our CFO, Scott Hynes, to provide you with more detail on our financial performance this quarter and an update on capital allocation. Scott Hynes: Thanks, Kelly. Turning to slide seven, our key GAAP and ENI performance metrics are summarized here on a quarterly basis. As previously noted, we manage the business using ENI metrics, which better reflect our underlying operating performance. You can find complete GAAP to ENI reconciliations in the appendix. Let me now turn to our core business results. Starting on slide eight, total ENI revenue of $183 million increased 47% from Q2 2025, primarily due to recurring management fee growth and an increase in performance fees. Q2 2026 management fees of $177 million increased 44% from Q2 2025, reflecting a 66% increase in average AUM, driven by market appreciation and continued positive net client cash flows. With average AUM of $220 billion in the second quarter of 2026, we continue to expand our recurring management fee base and strengthen Acadian's earnings power. Moving to slide nine. In Q2 2026, ENI operating expenses increased 19%, primarily driven by higher G&A expenses, including continued investment in technology and infrastructure, as well as AUM-driven servicing costs, increased sales-based compensation, and higher fixed compensation and benefits. Our ENI operating margin expanded nearly 10 percentage points to 40.3%, from 30.7% in Q2 2025, mainly driven by increased ENI management fees. While our Q2 2026 operating expense ratio fell eight percentage points year-over-year to 36.8%, reflecting improved operating leverage. Q2 2026 variable compensation increased 39% year-on-year, primarily driven by higher profit before variable compensation. Our Q2 2026 variable compensation ratio decreased to 37.5% in Q2 2026 from 45.4% in Q2 2025. Assuming revenue mix and levels similar to Q2 2026, contractual allocations would imply a full year 2026 variable compensation ratio of approximately 38%-42%. Turning to slide 10 on capital resources and our strong balance sheet. As of June 30th, 2026, we had $65 million of cash and $110 million of seed investments on the balance sheet, with a $200 million balance on our term loan credit facility and no outstanding balance on our revolving credit facility. Note that the company's strong cash flow generation supported repayment of seasonal revolver borrowings during the second quarter. As of Q2 2026 period end, our gross debt to adjusted EBITDA ratio was 0.8 times, while our net debt to adjusted EBITDA ratio was 0.5 times. Note that our gross leverage ratio of 0.8 times is improved from year-end 2025, supported by greater last 12 months adjusted EBITDA, and is well below the 1.5 times through the cycle gross leverage ratio target identified at our May investor forum. Moving to slide 11. We have a track record of creating significant value through share buybacks in recent years. Outstanding diluted shares have decreased 58% from 86 million in Q4 2019 to 35.7 million shares in Q2 2026. Over the same period, $1.5 billion in excess capital has been returned to stockholders through share buybacks and dividends. During Q2 2026, we repurchased 0.2 million shares or $10.6 million of stock at a volume weighted average price of $69.92. AAMI's board has declared an interim dividend of $0.10 per share to be paid on September 25th, 2026 to shareholders of record as of the close of business on September 11th, 2026. Going forward, we expect to continue generating strong free cash flow, prioritizing organic growth and balance sheet flexibility, then returning excess capital through dividends and share repurchases. I'll now turn the call back over to Kelly. Kelly Young: Before moving to Q&A, let me recap some key points on slide 12. Acadian is competitively positioned as the only pure-play, publicly traded, systematic manager with a 40-year track record and competitive edge in systematic investing. Our investment performance track record remained strong this quarter, with more than 96% of strategies by revenue outperforming over three, five, and 10-year periods. Business momentum continued apace in Q2 2026, with net inflows of $4.3 billion for Q2 and 9% annualized organic growth rate, reflecting 10 consecutive quarters of positive net flows and achieving AUM of $232.7 billion, up 54% from Q2 2025, the highest in the firm's history. Q2 2026 financial results included record management fees of $177 million, up 44% from Q2 2025. ENI EPS of $1.33, up 108% from Q2 2025. An operating margin expansion to 40.3%, up 10 percentage points from 30.7% in Q2 2025. Finally, capital management remained a focus in the quarter as we strengthened our balance sheet with conservative leverage ratios and earlier than typical repayment of seasonal revolver borrowings, and continue to invest in organic growth and return excess capital to shareholders. Pleased with our second quarter results, we remain focused on disciplined execution going forward. This concludes my prepared remarks. Operator: At this time, those with questions should lift their phone receiver and press star followed by the number 1 on their telephone keypad. To cancel a question, please press star 1 again. Please hold for a brief moment while we compile the Q&A roster. Your first question comes from Kenneth Lee with RBC Capital Markets. Please go ahead. Kenneth Lee: Hey, good morning, and thanks for taking my question. Wondering if you could just talk about your institutional pipeline, maybe some additional color, any of the details of composition as well, if you think you could share that. Thanks. Kelly Young: Yeah, of course. Hi, Ken. Nice to speak to you again. The pipeline continues to look very healthy across different strategies and client domiciles, despite the record-breaking first half of 2026 that we've seen. We continue to fund replenish as we've had these sizable wins. I'd say the themes are kind of fairly consistent with those that we've talked about over the last couple of quarters. Demand for our Enhanced Equity strategies remains very strong. That was characterized, I'd say, mostly by non-U.S. clients a year or so ago, but we're seeing that really pick up as a global trend now. The other area of real interest that we're seeing is within our Extension strategies. I think as you'll remember, when we laid out our strategic plan about 18 months ago, we talked about Enhanced as a nearer term opportunity, and we thought Extensions more medium term. We are seeing that momentum continue to pick up. Of course, Acadian's long-term track record in our long-only strategies continues to be of evergreen interest in those. I'd say particularly our broader and more diversified strategies, so Global non-U.S. EM allocations, those are areas where we continue to see interest. As I noted, there's broad interest from clients globally, so this isn't really a case of pockets of interest from different geographies. It's very much global in nature when we look at the pipeline. Kenneth Lee: Got you. Very helpful there. One follow-up, if I may, just in terms of the variable comp expense. Probably came in a little bit lower than what we expected. Any particular drivers there that would explain the movement there in the quarter? Thanks. Scott Hynes: Yeah. Ken, hey, it's Scott. Thanks again for joining. On variable comp, the quarter-over-quarter move. The big driver there is a good news story for us, and that's the growth in the management fees and the management fee profit. When you think about that variable comp in both how it's moving quarter-over-quarter and that full year, if you will, statement we make about where we expect to land on the full year, for all intents and purposes, I'd encourage you to think of three things moving around in relation to one another. The first is the size and how we think or know, obviously, management fees have come in and the management fee profits have come in year to date. Where, of course, we expect them to go for the rest of the year, then performance fees. Then there's a piece that for all intents and purposes, doesn't move around. That's the deferred compensation piece that has been there from years prior. Long story short, if management fees are growing proportionally more quickly, larger than the performance fees, that would typically put that variable compensation ratio down. That's what's gone on here this quarter and why you saw the change quarter-over-quarter and why you saw that full-year outlook tick down a little bit. It's because of the flows we saw and the relative growth in the management fees year to date. Continue to feel really good about performance fees and how the year is shaping up, but it is proportional. That recurring management fee profit pool has grown to an extent, and the second quarter was so positive relatively that moved around the variable compensation ratio in the way that I described. Kenneth Lee: Got you. Very helpful there. Thanks again. Scott Hynes: Thank you. Operator: Your next question comes from Joseph Tumillo with Morgan Stanley. Please go ahead. Joe Tumillo: Hey, good morning, Joseph Tumillo from Michael Cyprys. Thanks for taking my questions. My first question is on private wealth. Can you update us on your strategy and how you're thinking about the product wrapper and the approach to distribution, particularly around the Tax-Aware Dynamic Extension strategy? Kelly Young: Of course. Hi, Joe. Nice to speak to you. About 20%-25% of our assets today are intermediated in with the wealth channel. We do have a sizable business. It is an area that Acadian has always had clients. As you know, we were very excited in the second quarter to launch our Tax-Aware capabilities, and we actually launched two funds during the quarter, Global Tax-Aware and a U.S. Tax-Aware. We now manage total assets in those two strategies of $100 million, and the vast majority of that is external capital. We think there is real opportunities for this as clients are thinking about after-tax outcomes. We think our process is particularly well-designed to help clients with this. Again, obviously, long-term, consistent alpha in our Extension strategies, again, form the basis of this. We are very excited. On the distribution side, we have a very large distribution team, very experienced, well tenured. Again, we have had wealth clients for a number of years, the team have built very deep and meaningful relationships there. Again, we feel very excited about the prospects. I think many people will have noted we recently were in the press with another large wealth win with one of our existing partners in the U.K., a large U.K. wealth manager, one of the premier managers in the U.K. Again, continue to see real demand there, and we think that the Tax-Aware capabilities just opens up an avenue to us in the U.S. Again, very excited to see the progress we have made there in the couple of months since we launched those two strategies. Joe Tumillo: Great. Thank you. I guess that is my follow-up. As I recall at your recent Investor Day, I think you guys noted 27 of your top 50 clients are invested across multiple Acadian strategies. I guess I am just curious, how much of your current sales pipeline is cross-selling versus new customers? I guess if you could speak to some of your actions you are taking to expand penetration within the existing client set, what hurdles exist or challenges, and really how do you plan to overcome those to really accelerate the traction on cross-selling? Thank you. Kelly Young: Of course. It is a great question. We have incredibly deep relationships with our clients. Again, as we noted at the Investor Day, many clients have multiple mandates with us, and I think that speaks to the level of trust and commitment that our clients have in Acadian. Our average client tenure is longer than industry average. I think we have built a world-leading team on the client service side. I am delighted with the work that they have been doing, and I think we are in very good shape when I look at our overall client retention and opportunities. As I say, a huge number of our clients do have multiple mandates with us. The cross-sell is always a meaningful part of our pipeline. I think that will continue to be the case going forward as we continue to develop strategies that we think are solving problems for our clients across the globe. I think a good example of that, a more recent trend we've seen with some of our clients is moving towards extensions from long-only mandates, and we've obviously been working very hard to support them around that. A trend like that, Joe, I think is we're attracting both new clients and seeing existing clients convert. I think because of the nature of our client base, it is very broad, sophisticated, very large institutions. The issues that they're facing, the things that they're sort of wrestling with, that they're thinking about, I think often are just reflecting broader market demands. I guess in answer to your question, again, we feel very well-positioned with our clients. We're delighted with the relationship, the trust that we've built over the years. Again, cross-sell will be a very meaningful part of our sales going forward. I don't think there's anything we need to do to change what we're doing. We've been very successful there, and again, I think that's credit to what the relationship management team have been able to do at Acadian over the four decades that we've been around. Joe Tumillo: Great. Thank you. Kelly Young: Thanks, yeah. Operator: Your next question comes from John Dunn with Evercore ISI. Please go ahead. John Dunn: Thank you. I think systematic fixed income, I think the U.S. High Yield product hits a benchmark later towards the end of the year. Maybe has there been any movement or traction leading up to that? Then just more broadly, an update on where you think that segment can go in the next few years. Kelly Young: Yeah, that's a great question, John. Nice to speak to you again. As you say, U.S. High Yield will be hitting its three-year track record towards the end of this year. I'm very pleased with the performance and the resilience of not just that track record, I should say, sorry, as well as the U.S. Investment Grade and our Global High Yield. I think the credit team here have done a great job building a very resilient, consistent positive track record. That's starting to see traction with clients and new potential investors. I'd say when I look at the pipeline, we're continuing to see that deepen, and we're seeing it start to mature from early stage opportunities. I think as I've said on previous calls, we always expected asset raising to ramp up more in 2027 when those three-year track records are in place, and we don't set hard AUM targets around that. Certainly the conversations we've been having over the last quarter or two have led me to feel very good about some nearer term opportunities. I think we're completely on track with where we'd like to be with credit. I'd say the nature of those conversations are changing and moving to more later stage versus early stage discovery type meetings. Just in terms of the number of meetings and number of investors we're meeting, that's ramped up quite significantly in this year, and I think will continue to do so through the second half. Again, feeling very good about where we are with credit, and again, feeling positive about a couple of nearer term opportunities as well. John Dunn: Got it. maybe could you talk about the exit rate of the fee rate? It seems like the big St. James's Place win is in the numbers. going forward, maybe it should moderate down, but at a more modest pace. Is that the right way to think about it? Scott Hynes: Yeah. John, it's Scott. Thanks again for joining in. Yes, I think the intuition is spot on. for all intents and purposes, to be clear, there's no real change here certainly from our investor forum in May or really in last quarter. more specifically, we did have, as you know, a large installation again on the Enhanced side late the prior quarter, meaning late in 1Q 2026. full run rate impact of that wasn't really realized until this quarter. That was the predominant driver of that rate move. for all intents and purposes, there's no real change here from the investor forum dialogue or the prior quarter. In that year-over-year, we did see a meaningful change in the fee rate, call it again, upper 30s down to lower 30s today. we think it's more stable than not going forward. That while there are still opportunities that Kelly's already noted on the Enhanced side, which do typically come in at a lower fee rate, it's just not the same step change year-over-year now that Enhanced is call it, 30 some percent of our AUM mix. again, I think the direction of travel is more stable than not where we're at this quarter. As you know, there's a lot of external factors at play with that blended fee rate, client demand, things that are going on in the market. it can move around a bit. again, I think the direction of travel as we look at our forecast in the pipeline and how it's most likely than not to play out would be relative stability here in and around this quarter. John Dunn: Thanks very much. Operator: This concludes our question and answer session. I'd like to turn the call back over to Kelly Young. Kelly Young: I'd like to thank everyone for joining us today, and hope you all have a great day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Acadian Asset Management (AAMI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record AUM of $232.7 billion, a 54% year-over-year increase driven by strong market appreciation and 10 consecutive quarters of positive net client flows. Realized significant operating margin expansion to 40.3%, up nearly 10 percentage points, by leveraging a 44% increase in recurring management fees against disciplined expense growth. Attributed strong quarterly investment performance to broad-based outperformance across major strategies, with emerging markets serving as a standout tailwind. Strengthened investment leadership by appointing Alex Voitenok as Co-CIO effective 2027 to enhance oversight of data infrastructure and investment engineering as the firm scales. Integrated the former TC43 team to accelerate research and innovation, specifically enhancing systematic modeling and data engineering capabilities. Maintained exceptional long-term fidelity with 96% of strategies by revenue outperforming benchmarks over three, five, and 10-year periods. Improved short-term performance resilience with 77% of assets outperforming over the trailing one-year period despite macroeconomic volatility. Anticipates a full-year 2026 variable compensation ratio between 38% and 42%, assuming revenue mix remains consistent with current levels. Expects relative stability in the blended fee rate going forward as Enhanced strategies now represent over 30% of the total AUM mix. Projects accelerated asset raising for systematic fixed income in 2027 as U.S. High Yield and Investment Grade products reach critical three-year track records. Prioritizes organic growth and balance sheet flexibility for future capital allocation, followed by returning excess capital via dividends and share repurchases. Forecasts continued momentum in the institutional pipeline, specifically driven by global demand for Enhanced Equity and Extension strategies. Repaid seasonal revolver borrowings during the second quarter, supported by strong cash flow generation and a conservative net debt to adjusted EBITDA ratio of 0.5 times. Reported a 170% increase in U.S. GAAP net income, which includes non-cash expenses related to changes in the value of Acadian LLC equity and profit interests. Successfully launched Global and U.S. Tax-Aware capabilities, attracting $100 million in assets primarily from external capital within the first few months. Recognized a significant step-change in the year-over-year fee rate due to the full run-rate impact of a large Enhanced strategy installation from Q1 2026. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management characterized the pipeline as very healthy and global in nature, noting that demand for Enhanced Equity has shifted from primarily non-U.S. to a broad global trend. Confirmed that Extension strategies are gaining momentum ahead of original medium-term expectations, while diversified long-only strategies remain of 'evergreen' interest. The ratio decrease was driven by management fees growing proportionally faster than performance fees, which carries a lower relative compensation cost. Management noted that while performance fees remain healthy, the growth in the recurring management fee profit pool is the primary driver of the improved ratio. Approximately 20% to 25% of total assets are currently intermediated through the wealth channel, supported by a long-tenured distribution team. Management views the new Tax-Aware capabilities as a key entry point for expanding their footprint within the U.S. wealth market. The U.S. High Yield product will reach its three-year milestone late in 2026, with management reporting that client conversations are maturing from discovery to later-stage opportunities. Confirmed that while no hard AUM targets are set, the volume of investor meetings for credit strategies has ramped up significantly in 2026.

Image source: The Motley Fool. Thursday, July 30, 2026 at 11:00 a.m. ET Senior Vice President, Director of Finance and Investor Relations - Melody Huang President and Chief Executive Officer - Kelly Young Chief Financial Officer - Scott Hynes Need a quote from a Motley Fool analyst? Email [email protected] Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Acadian Asset Management Inc. earnings conference call and webcast for the second quarter 2026. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question and answer session. To be added to the queue, please press the star followed by one at any time during the call. If you need to reach an operator, please press the star followed by zero. Please note that this call is being recorded today, Thursday, July 30th, 2026, at 11:00 A.M. Eastern Time. I would now like to turn the meeting over to Melody Huang, Senior Vice President, Director of Finance and Investor Relations. Please go ahead, Melody. Melody Huang: Good morning and welcome to Acadian Asset Management Inc.'s conference call to discuss our results for the second quarter ended June 30th, 2026. Before we begin the presentation, please note that we may make forward-looking statements about our business and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. Additional information regarding this risk and uncertainties appears in our SEC filings, including the Form 8-K filed today containing the earnings release, our 2025 Form 10-K, and our Form 10-Q for the first quarter of 2026. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. We may also reference certain non-GAAP financial measures. Information about any non-GAAP measures referenced, including a reconciliation of those measures to GAAP measures, can be found on our website, along with the slides that we will use as part of today's discussion. Finally, nothing herein shall be deemed to be an offer or solicitation to buy any investment products. Kelly Young, our President and Chief Executive Officer, will lead the call. Now I'm pleased to turn the call over to Kelly. Kelly Young: Thanks, Melody. Good morning, everyone, and thanks for joining us today. I'm delighted to share our exceptional Q2 2026 results with you. As Acadian celebrates its 40th anniversary, our assets under management and profitability continue to reach new heights, with recent strong growth underscoring sustained momentum in our business and disciplined execution of our strategic plan. Before turning to the quarter in more detail, I want to highlight an investment team update that reflects both continuity and ongoing investment in our capabilities. We're pleased to announce that Alex Voitenok, our Deputy Chief Investment Officer, will become Co-CIO alongside Brendan Bradley, effective January 1st, 2027. Alex has been with Acadian since 2012 and has played an increasingly important leadership role across our investment organization, specifically in the areas of portfolio construction, implementation, data infrastructure, and investment engineering. This move further strengthens dedicated oversight across data, process, risk, and trading as we continue to scale and allows Brendan to focus on investment policy, research innovation, and strategic investment priorities. We are also pleased to have welcomed Jonathan Briggs, formerly of TC43 and CPP Investments, as well as certain other members of the former TC43 team to Acadian's investment organization. Their research, data engineering, and modeling capabilities are highly complementary to our systematic investment platform and will help accelerate work already undertaken across our research and innovation agenda. Taken together, these developments reflect the same strategic planning and organizational continuity that have defined Acadian for decades. Disciplined, systematic investing, continued investment in talent and technology, and a steady focus on delivering long-term outcomes for our clients. We are also pleased to see Acadian move up meaningfully in the latest annual Pensions & Investments Largest Money Managers ranking, rising to number 62 from number 76 last year. While rankings are only one measure, we view this as further external recognition of the scale we have built and the momentum we are seeing across the business. We continue to deliver outstanding results across all key metrics in the second quarter. Our U.S. GAAP net income attributable to controlling interests was up 170%, and EPS was up 171% compared to the prior year, driven by increased management fees, partially offset by non-cash expenses representing changes in the value of Acadian LLC equity and profit interests. ENI was up 107% to $47.5 million, and our ENI diluted EPS of $1.33 was up 108%, driven by revenue growth. Our adjusted EBITDA was up 79%. We realized $4.3 billion of positive net client cash flows in Q2 2026, representing a 9% annualized organic growth rate, driven by Enhanced and Extension strategies. Finally, AUM grew 54% from Q2 2025 to $232.7 billion as of June 30, 2026, marking another record high for Acadian. Turning to slide three, Acadian's investment performance track record remains strong. Five major implementations comprise the majority of our assets. As of June 30, 2026, Global Equity, Emerging Markets Equity, non-U.S. equity, Small-Cap Equity, and Enhanced Equity have 100% of assets outperforming benchmarks across three, five, and 10-year periods, with only one exception. Global equity markets delivered strong double-digit performance in Q2 2026, while navigating significant volatility with a challenging geopolitical and macroeconomic backdrop. Emerging markets were standout performers, posting their strongest quarterly gain since 2009, which presented a tailwind for Acadian's portfolio returns. Acadian generated strong investment performance with broad-based outperformance across most major strategies. Our short-term performance continued to improve in the quarter, 77% of assets outperformed over the trailing one-year period. We believe these results reinforce the consistency and resilience of our disciplined, systematic investment process, which has been built and refined over Acadian's 40-year history. Slide four details how our investment process has generated meaningful long-term alpha for our clients. Our revenue-weighted five-year annualized return in excess of benchmark was 4.3% as of the end of Q2 2026 on a consolidated firm-wide basis. Our asset-weighted five-year annualized return in excess of benchmark was 3.6% as of the end of the quarter. By revenue weight, 96% of Acadian strategies outperformed their respective benchmarks across three, five, and 10-year periods as of June 30, 2026. By asset weight, 94% of Acadian strategies outperformed their respective benchmarks across three, five, and 10-year periods. The next slide highlights our sustained momentum in net flows. We realized positive net flows of $4.3 billion in Q2 2026, representing a 9% annualized organic growth rate. Gross inflows were diverse across products and client types, and driven by Enhanced and Extension strategies. We've now generated 10 consecutive quarters of positive net flows, and we continue to focus on renewing our pipeline, which remains very healthy and active after the funding of a number of significant client wins in Q2 2026. I'm now going to turn the call over to our CFO, Scott Hynes, to provide you with more detail on our financial performance this quarter and an update on capital allocation. Scott Hynes: Thanks, Kelly. Turning to slide seven, our key GAAP and ENI performance metrics are summarized here on a quarterly basis. As previously noted, we manage the business using ENI metrics, which better reflect our underlying operating performance. You can find complete GAAP to ENI reconciliations in the appendix. Let me now turn to our core business results. Starting on slide eight, total ENI revenue of $183 million increased 47% from Q2 2025, primarily due to recurring management fee growth and an increase in performance fees. Q2 2026 management fees of $177 million increased 44% from Q2 2025, reflecting a 66% increase in average AUM, driven by market appreciation and continued positive net client cash flows. With average AUM of $220 billion in the second quarter of 2026, we continue to expand our recurring management fee base and strengthen Acadian's earnings power. Moving to slide nine. In Q2 2026, ENI operating expenses increased 19%, primarily driven by higher G&A expenses, including continued investment in technology and infrastructure, as well as AUM-driven servicing costs, increased sales-based compensation, and higher fixed compensation and benefits. Our ENI operating margin expanded nearly 10 percentage points to 40.3%, from 30.7% in Q2 2025, mainly driven by increased ENI management fees. While our Q2 2026 operating expense ratio fell eight percentage points year-over-year to 36.8%, reflecting improved operating leverage. Q2 2026 variable compensation increased 39% year-on-year, primarily driven by higher profit before variable compensation. Our Q2 2026 variable compensation ratio decreased to 37.5% in Q2 2026 from 45.4% in Q2 2025. Assuming revenue mix and levels similar to Q2 2026, contractual allocations would imply a full year 2026 variable compensation ratio of approximately 38%-42%. Turning to slide 10 on capital resources and our strong balance sheet. As of June 30th, 2026, we had $65 million of cash and $110 million of seed investments on the balance sheet, with a $200 million balance on our term loan credit facility and no outstanding balance on our revolving credit facility. Note that the company's strong cash flow generation supported repayment of seasonal revolver borrowings during the second quarter. As of Q2 2026 period end, our gross debt to adjusted EBITDA ratio was 0.8 times, while our net debt to adjusted EBITDA ratio was 0.5 times. Note that our gross leverage ratio of 0.8 times is improved from year-end 2025, supported by greater last 12 months adjusted EBITDA, and is well below the 1.5 times through the cycle gross leverage ratio target identified at our May investor forum. Moving to slide 11. We have a track record of creating significant value through share buybacks in recent years. Outstanding diluted shares have decreased 58% from 86 million in Q4 2019 to 35.7 million shares in Q2 2026. Over the same period, $1.5 billion in excess capital has been returned to stockholders through share buybacks and dividends. During Q2 2026, we repurchased 0.2 million shares or $10.6 million of stock at a volume weighted average price of $69.92. AAMI's board has declared an interim dividend of $0.10 per share to be paid on September 25th, 2026 to shareholders of record as of the close of business on September 11th, 2026. Going forward, we expect to continue generating strong free cash flow, prioritizing organic growth and balance sheet flexibility, then returning excess capital through dividends and share repurchases. I'll now turn the call back over to Kelly. Kelly Young: Before moving to Q&A, let me recap some key points on slide 12. Acadian is competitively positioned as the only pure-play, publicly traded, systematic manager with a 40-year track record and competitive edge in systematic investing. Our investment performance track record remained strong this quarter, with more than 96% of strategies by revenue outperforming over three, five, and 10-year periods. Business momentum continued apace in Q2 2026, with net inflows of $4.3 billion for Q2 and 9% annualized organic growth rate, reflecting 10 consecutive quarters of positive net flows and achieving AUM of $232.7 billion, up 54% from Q2 2025, the highest in the firm's history. Q2 2026 financial results included record management fees of $177 million, up 44% from Q2 2025. ENI EPS of $1.33, up 108% from Q2 2025. An operating margin expansion to 40.3%, up 10 percentage points from 30.7% in Q2 2025. Finally, capital management remained a focus in the quarter as we strengthened our balance sheet with conservative leverage ratios and earlier than typical repayment of seasonal revolver borrowings, and continue to invest in organic growth and return excess capital to shareholders. Pleased with our second quarter results, we remain focused on disciplined execution going forward. This concludes my prepared remarks. Operator: At this time, those with questions should lift their phone receiver and press star followed by the number 1 on their telephone keypad. To cancel a question, please press star 1 again. Please hold for a brief moment while we compile the Q&A roster. Your first question comes from Kenneth Lee with RBC Capital Markets. Please go ahead. Kenneth Lee: Hey, good morning, and thanks for taking my question. Wondering if you could just talk about your institutional pipeline, maybe some additional color, any of the details of composition as well, if you think you could share that. Thanks. Kelly Young: Yeah, of course. Hi, Ken. Nice to speak to you again. The pipeline continues to look very healthy across different strategies and client domiciles, despite the record-breaking first half of 2026 that we've seen. We continue to fund replenish as we've had these sizable wins. I'd say the themes are kind of fairly consistent with those that we've talked about over the last couple of quarters. Demand for our Enhanced Equity strategies remains very strong. That was characterized, I'd say, mostly by non-U.S. clients a year or so ago, but we're seeing that really pick up as a global trend now. The other area of real interest that we're seeing is within our Extension strategies. I think as you'll remember, when we laid out our strategic plan about 18 months ago, we talked about Enhanced as a nearer term opportunity, and we thought Extensions more medium term. We are seeing that momentum continue to pick up. Of course, Acadian's long-term track record in our long-only strategies continues to be of evergreen interest in those. I'd say particularly our broader and more diversified strategies, so Global non-U.S. EM allocations, those are areas where we continue to see interest. As I noted, there's broad interest from clients globally, so this isn't really a case of pockets of interest from different geographies. It's very much global in nature when we look at the pipeline. Kenneth Lee: Got you. Very helpful there. One follow-up, if I may, just in terms of the variable comp expense. Probably came in a little bit lower than what we expected. Any particular drivers there that would explain the movement there in the quarter? Thanks. Scott Hynes: Yeah. Ken, hey, it's Scott. Thanks again for joining. On variable comp, the quarter-over-quarter move. The big driver there is a good news story for us, and that's the growth in the management fees and the management fee profit. When you think about that variable comp in both how it's moving quarter-over-quarter and that full year, if you will, statement we make about where we expect to land on the full year, for all intents and purposes, I'd encourage you to think of three things moving around in relation to one another. The first is the size and how we think or know, obviously, management fees have come in and the management fee profits have come in year to date. Where, of course, we expect them to go for the rest of the year, then performance fees. Then there's a piece that for all intents and purposes, doesn't move around. That's the deferred compensation piece that has been there from years prior. Long story short, if management fees are growing proportionally more quickly, larger than the performance fees, that would typically put that variable compensation ratio down. That's what's gone on here this quarter and why you saw the change quarter-over-quarter and why you saw that full-year outlook tick down a little bit. It's because of the flows we saw and the relative growth in the management fees year to date. Continue to feel really good about performance fees and how the year is shaping up, but it is proportional. That recurring management fee profit pool has grown to an extent, and the second quarter was so positive relatively that moved around the variable compensation ratio in the way that I described. Kenneth Lee: Got you. Very helpful there. Thanks again. Scott Hynes: Thank you. Operator: Your next question comes from Joseph Tumillo with Morgan Stanley. Please go ahead. Joe Tumillo: Hey, good morning, Joseph Tumillo from Michael Cyprys. Thanks for taking my questions. My first question is on private wealth. Can you update us on your strategy and how you're thinking about the product wrapper and the approach to distribution, particularly around the Tax-Aware Dynamic Extension strategy? Kelly Young: Of course. Hi, Joe. Nice to speak to you. About 20%-25% of our assets today are intermediated in with the wealth channel. We do have a sizable business. It is an area that Acadian has always had clients. As you know, we were very excited in the second quarter to launch our Tax-Aware capabilities, and we actually launched two funds during the quarter, Global Tax-Aware and a U.S. Tax-Aware. We now manage total assets in those two strategies of $100 million, and the vast majority of that is external capital. We think there is real opportunities for this as clients are thinking about after-tax outcomes. We think our process is particularly well-designed to help clients with this. Again, obviously, long-term, consistent alpha in our Extension strategies, again, form the basis of this. We are very excited. On the distribution side, we have a very large distribution team, very experienced, well tenured. Again, we have had wealth clients for a number of years, the team have built very deep and meaningful relationships there. Again, we feel very excited about the prospects. I think many people will have noted we recently were in the press with another large wealth win with one of our existing partners in the U.K., a large U.K. wealth manager, one of the premier managers in the U.K. Again, continue to see real demand there, and we think that the Tax-Aware capabilities just opens up an avenue to us in the U.S. Again, very excited to see the progress we have made there in the couple of months since we launched those two strategies. Joe Tumillo: Great. Thank you. I guess that is my follow-up. As I recall at your recent Investor Day, I think you guys noted 27 of your top 50 clients are invested across multiple Acadian strategies. I guess I am just curious, how much of your current sales pipeline is cross-selling versus new customers? I guess if you could speak to some of your actions you are taking to expand penetration within the existing client set, what hurdles exist or challenges, and really how do you plan to overcome those to really accelerate the traction on cross-selling? Thank you. Kelly Young: Of course. It is a great question. We have incredibly deep relationships with our clients. Again, as we noted at the Investor Day, many clients have multiple mandates with us, and I think that speaks to the level of trust and commitment that our clients have in Acadian. Our average client tenure is longer than industry average. I think we have built a world-leading team on the client service side. I am delighted with the work that they have been doing, and I think we are in very good shape when I look at our overall client retention and opportunities. As I say, a huge number of our clients do have multiple mandates with us. The cross-sell is always a meaningful part of our pipeline. I think that will continue to be the case going forward as we continue to develop strategies that we think are solving problems for our clients across the globe. I think a good example of that, a more recent trend we've seen with some of our clients is moving towards extensions from long-only mandates, and we've obviously been working very hard to support them around that. A trend like that, Joe, I think is we're attracting both new clients and seeing existing clients convert. I think because of the nature of our client base, it is very broad, sophisticated, very large institutions. The issues that they're facing, the things that they're sort of wrestling with, that they're thinking about, I think often are just reflecting broader market demands. I guess in answer to your question, again, we feel very well-positioned with our clients. We're delighted with the relationship, the trust that we've built over the years. Again, cross-sell will be a very meaningful part of our sales going forward. I don't think there's anything we need to do to change what we're doing. We've been very successful there, and again, I think that's credit to what the relationship management team have been able to do at Acadian over the four decades that we've been around. Joe Tumillo: Great. Thank you. Kelly Young: Thanks, yeah. Operator: Your next question comes from John Dunn with Evercore ISI. Please go ahead. John Dunn: Thank you. I think systematic fixed income, I think the U.S. High Yield product hits a benchmark later towards the end of the year. Maybe has there been any movement or traction leading up to that? Then just more broadly, an update on where you think that segment can go in the next few years. Kelly Young: Yeah, that's a great question, John. Nice to speak to you again. As you say, U.S. High Yield will be hitting its three-year track record towards the end of this year. I'm very pleased with the performance and the resilience of not just that track record, I should say, sorry, as well as the U.S. Investment Grade and our Global High Yield. I think the credit team here have done a great job building a very resilient, consistent positive track record. That's starting to see traction with clients and new potential investors. I'd say when I look at the pipeline, we're continuing to see that deepen, and we're seeing it start to mature from early stage opportunities. I think as I've said on previous calls, we always expected asset raising to ramp up more in 2027 when those three-year track records are in place, and we don't set hard AUM targets around that. Certainly the conversations we've been having over the last quarter or two have led me to feel very good about some nearer term opportunities. I think we're completely on track with where we'd like to be with credit. I'd say the nature of those conversations are changing and moving to more later stage versus early stage discovery type meetings. Just in terms of the number of meetings and number of investors we're meeting, that's ramped up quite significantly in this year, and I think will continue to do so through the second half. Again, feeling very good about where we are with credit, and again, feeling positive about a couple of nearer term opportunities as well. John Dunn: Got it. maybe could you talk about the exit rate of the fee rate? It seems like the big St. James's Place win is in the numbers. going forward, maybe it should moderate down, but at a more modest pace. Is that the right way to think about it? Scott Hynes: Yeah. John, it's Scott. Thanks again for joining in. Yes, I think the intuition is spot on. for all intents and purposes, to be clear, there's no real change here certainly from our investor forum in May or really in last quarter. more specifically, we did have, as you know, a large installation again on the Enhanced side late the prior quarter, meaning late in 1Q 2026. full run rate impact of that wasn't really realized until this quarter. That was the predominant driver of that rate move. for all intents and purposes, there's no real change here from the investor forum dialogue or the prior quarter. In that year-over-year, we did see a meaningful change in the fee rate, call it again, upper 30s down to lower 30s today. we think it's more stable than not going forward. That while there are still opportunities that Kelly's already noted on the Enhanced side, which do typically come in at a lower fee rate, it's just not the same step change year-over-year now that Enhanced is call it, 30 some percent of our AUM mix. again, I think the direction of travel is more stable than not where we're at this quarter. As you know, there's a lot of external factors at play with that blended fee rate, client demand, things that are going on in the market. it can move around a bit. again, I think the direction of travel as we look at our forecast in the pipeline and how it's most likely than not to play out would be relative stability here in and around this quarter. John Dunn: Thanks very much. Operator: This concludes our question and answer session. I'd like to turn the call back over to Kelly Young. Kelly Young: I'd like to thank everyone for joining us today, and hope you all have a great day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Acadian Asset Management (AAMI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Acadian Asset Management (AAMI) came out with quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.03 per share. This compares to earnings of $0.64 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +29.13%. A quarter ago, it was expected that this asset manager would post earnings of $0.94 per share when it actually produced earnings of $1.05, delivering a surprise of +11.7%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Acadian Asset Management, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $183.2 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.00%. This compares to year-ago revenues of $124.9 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Acadian Asset Management shares have added about 72% since the beginning of the year versus the S&P 500's gain of 6.9%. While Acadian Asset Management has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Acadian Asset Management was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.16 on $192.66 million in revenues for the coming quarter and $5.11 on $740.06 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. CleanSpark (CLSK), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.26 per share in its upcoming report, which represents a year-over-year change of -133.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. CleanSpark's revenues are expected to be $158.26 million, down 20.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Acadian Asset Management Inc. (AAMI) : Free Stock Analysis Report Cleanspark, Inc. (CLSK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record AUM of $232.7 billion, up 54% year-over-year, driven by strong market appreciation and net inflows. Net client cash flows of $4.3 billion in Q2 2026, marking the 10th consecutive quarter of positive flows and a 9% annualized organic growth rate. Strong investment performance with 96% of strategies by revenue outperforming benchmarks over 3-, 5-, and 10-year periods. Record management fees of $177 million, up 44% year-over-year, supported by higher average AUM. ENI diluted EPS of $1.33, up 108% year-over-year, reflecting significant revenue growth and improved operating leverage. Operating margin expanded to 40.3%, up 10 percentage points from 30.7% in Q2 2025, driven by management fee growth. Healthy pipeline across enhanced equity, extension strategies, and global long-only mandates, with broad client interest globally. Successful launch of tax-aware strategies in the wealth channel, with $100 million in assets under management shortly after launch. Strengthened balance sheet with gross debt-to-adjusted EBITDA ratio of 0.8x, well below the 1.5x target. Continued capital return to shareholders through share buybacks and dividends, with diluted shares reduced by 58% since Q4 2019. Non-cash expenses from changes in the value of Acadian LLC equity and profit interests partially offset GAAP net income growth. Variable compensation ratio decreased to 37.5% from 45.4% year-over-year, potentially impacting employee retention if not managed carefully. Blended fee rate declined from upper 30s to lower 30s due to growth in lower-fee enhanced strategies, pressuring revenue per AUM. Performance fees, while increased, remain a smaller and less predictable component of revenue compared to management fees. Dependence on market appreciation for AUM growth, as market volatility or downturns could reverse gains. Increased G&A expenses from continued investment in technology and infrastructure, which may pressure margins if revenue growth slows. Seasonal revolver borrowings were repaid early, indicating potential cash flow timing mismatches despite strong overall liquidity. Credit strategies (e.g., US high yield) are still building track records, with asset raising expected to ramp up only in 2027, limiting near-term diversification. Competitive pressure in systematic investing space may require ongoing investment to maintain edge, increasing costs. Wealth channel represents only 20-25% of assets, leaving room for growth but also indicating limited penetration in this segment. Here are the key highlights from the Acadian Asset Management Inc (NYSE:AAMI) Q2 2026 earnings call, presented as Q&A summaries. Warning! GuruFocus has detected 7 Warning Signs with AAMI. Is AAMI fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the institutional pipeline, including its composition? A: Kelly Young, President and CEO: The pipeline remains very healthy across different strategies and client domiciles, despite a record-breaking first half of 2026. Demand for enhanced equity strategies is very strong and has become a global trend. We are also seeing significant momentum in extension strategies, which we previously viewed as a medium-term opportunity. There is broad, global interest from clients, not just from specific pockets. Q: The variable compensation expense came in lower than expected. What were the drivers? A: Scott Hines, CFO: The primary driver is the strong growth in management fees and management fee profit. The variable compensation ratio is influenced by the relative size of management fees versus performance fees. Because management fees are growing proportionally faster than performance fees, the variable compensation ratio decreased. The full-year outlook was adjusted down slightly due to the strong flows and relative growth in management fees year-to-date. Q: Can you discuss your approach to the private wealth channel, particularly regarding the new tax-aware dynamic extension strategy? A: Kelly Young, President and CEO: About 20-25% of our assets are intermediated through the wealth channel. We are very excited about our new Tax-Aware capabilities, having launched global and US tax-aware funds in Q2, which now manage $100 million in total assets, mostly external capital. Our systematic process is well-suited for after-tax outcomes. We have a large, experienced distribution team and see this as a significant opportunity, especially in the US. Q: How much of your current sales pipeline is cross-selling versus new customers, and what are you doing to expand penetration within existing clients? A: Kelly Young, President and CEO: Cross-selling is always a meaningful part of our pipeline. We have deep relationships with clients, many of whom have multiple mandates with us, reflecting a high level of trust. A recent trend is clients moving from long-only to extension mandates. We are attracting both new clients and converting existing ones. We feel very well-positioned and don't believe we need to change our approach, as our relationship management team has been very successful. Q: Can you provide an update on your systematic fixed income business, specifically the US high yield product, and its potential over the next few years? A: Kelly Young, President and CEO: The US high yield product will hit its 3-year track record towards the end of this year. We are very pleased with the performance and resilience of our credit track records. We are seeing traction with clients, and the pipeline is deepening and maturing from early-stage opportunities. We always expected asset raising to ramp up more in 2027 when the 3-year track records are in place, but conversations over the last quarter have led us to feel very good about some nearer-term opportunities. Q: Can you talk about the exit rate of the management fee rate? With the large St. James Place win in the numbers, should we expect it to moderate down at a more modest pace? A: Scott Hines, CFO: Yes, that intuition is spot on. The large installation on the enhanced side late in Q1 2026 was the predominant driver of the fee rate move this quarter. While there are still opportunities on the enhanced side (which come in at a lower fee rate), the step change year-over-year is not as significant now that enhanced is about 30% of our AUM mix. We expect the fee rate to be more stable than not going forward, though it can move around due to external factors. Q: What are the key drivers behind the strong net client cash flows and the 9% annualized organic growth rate in Q2 2026? A: Kelly Young, President and CEO: The positive net flows of $4.3 billion were driven by enhanced and extension strategies. Gross inflows were diverse across products and client types. We have now generated 10 consecutive quarters of positive net flows, and our pipeline remains very healthy and active after funding several significant client wins in Q2. Q: Can you elaborate on the investment team update, specifically the new co-CIO structure and the hiring of Jonathan Briggs? A: Kelly Young, President and CEO: Alex V Wojknock will become co-CIO alongside Brendan Bradley, effective January 1, 2027. This move strengthens oversight across data, process, risk, and trading as we scale, allowing Brendan to focus on innovation and strategic priorities. We also welcomed Jonathan Briggs and other members of the former TC43 team. Their capabilities in research, data engineering, and modeling are highly complementary to our systematic platform and will accelerate our innovation agenda. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Acadian Asset Management Inc.? Here are five stocks we like better. Record growth: Acadian’s assets under management reached $232.7 billion, up 54% year over year, supported by $4.3 billion in quarterly net inflows and 10 consecutive quarters of positive flows. Strong earnings and operating leverage: ENI revenue rose 47% to $183 million, while ENI increased 107% to $47.5 million. The operating margin expanded to 40.3% from 30.7% a year earlier despite higher expenses. Product momentum and financial flexibility: Enhanced and Extension strategies drove demand, while credit fundraising is expected to accelerate in 2027 as track records mature. Acadian maintained low leverage, repurchased $10.6 million of shares and declared a $0.10-per-share dividend. Acadian Asset Management (NYSE:AAMI) reported record assets under management, higher management fees and sharply improved earnings for the second quarter of 2026, supported by positive client flows, market appreciation and operating leverage. President and Chief Executive Officer Kelly Young said the firm’s assets under management reached a record $232.7 billion as of June 30, up 54% from a year earlier. The company generated $4.3 billion in positive net client cash flows during the quarter, representing a 9% annualized organic growth rate, driven by its Enhanced and Extension strategies. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now “We’ve now generated 10 consecutive quarters of positive net flows,” Young said, adding that the company’s institutional pipeline remained “very healthy and active” after several significant client wins were funded in the second quarter. Total ENI revenue, a non-GAAP measure Acadian uses to assess underlying operating performance, rose 47% year over year to $183 million. Management fees increased 44% to a record $177 million, reflecting a 66% increase in average assets under management to $220 billion. → 3 Value ETFs to Consider as Growth Stocks Lag Behind ENI, or economic net income, climbed 107% to $47.5 million, while ENI diluted earnings per share increased 108% to $1.33. Adjusted EBITDA rose 79% from the prior-year period, according to Young. U.S. GAAP net income attributable to controlling interests increased 170%, and GAAP earnings per share rose 171% year over year. Chief Financial Officer Scott Hynes said operating expenses increased 19%, primarily due to higher general and administrative costs, technology and infrastructure investments, asset-based servicing costs, sales compensation, and higher fixed compensation and benefits. Still, revenue growth enabled substantial operating leverage. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Acadian’s ENI operating margin expanded to 40.3% from 30.7% in the second quarter of 2025, while its operating expense ratio declined to 36.8% from 44.8%. Variable compensation increased 39% year over year, but the variable compensation ratio declined to 37.5% from 45.4%. Hynes said the lower ratio reflected the faster relative growth of recurring management fee profit compared with performance fees. Assuming revenue mix and levels comparable to the second quarter, contractual allocations imply a full-year 2026 variable compensation ratio of approximately 38% to 42%. Young said Acadian delivered broad-based investment outperformance amid strong global equity-market gains and substantial volatility tied to geopolitical and macroeconomic conditions. Emerging markets posted their strongest quarterly gain since 2009, providing a tailwind for portfolio returns, he said. Across the firm’s five major implementations—Global Equity, Emerging Markets Equity, non-U.S. Equity, Small-Cap Equity and Enhanced Equity—100% of assets outperformed their benchmarks over three-, five- and 10-year periods, except for one measure. On a shorter-term basis, 77% of assets outperformed over the trailing one-year period. Acadian reported a revenue-weighted five-year annualized excess return over benchmark of 4.3% and an asset-weighted excess return of 3.6%. By revenue weight, 96% of strategies outperformed their benchmarks over the three-, five- and 10-year periods; by asset weight, 94% outperformed. Young said demand for Enhanced Equity strategies remained strong and had broadened from primarily non-U.S. client interest into a global trend. He also cited growing interest in the company’s Extension strategies, which management had previously viewed as a more medium-term growth opportunity. In the wealth channel, where Acadian said it has approximately 20% to 25% of assets, the company launched Global Tax-Aware and U.S. Tax-Aware funds during the quarter. The two strategies had $100 million in total assets under management, with the vast majority coming from external capital, Young said. He added that cross-selling remains a meaningful part of the company’s pipeline, including clients shifting from long-only mandates to Extension strategies. Acadian said 27 of its top 50 clients were invested across multiple company strategies at the time of its recent investor event. Young said Acadian’s systematic credit business was seeing increased investor engagement. Its U.S. High Yield strategy is expected to reach a three-year track record later in 2026, while the company also cited progress in U.S. Investment Grade and Global High Yield. Management expects credit asset raising to accelerate more meaningfully in 2027 as three-year track records become available. However, Young said recent discussions with prospective investors had progressed toward later-stage opportunities and that meetings with investors had increased significantly during 2026. Hynes said the company’s blended fee rate moved meaningfully lower year over year, from the upper 30s to the lower 30s, largely due to the impact of a large Enhanced strategy installation late in the first quarter. He said the company expects the fee rate to be relatively stable near second-quarter levels going forward, although it can fluctuate with client demand and market conditions. As of June 30, Acadian held $65 million in cash and $110 million in seed investments. It had a $200 million balance on its term loan credit facility and no outstanding borrowings on its revolving credit facility after repaying seasonal revolver borrowings during the quarter. Gross debt to adjusted EBITDA was 0.8 times and net debt to adjusted EBITDA was 0.5 times. Hynes said the gross leverage level was below the company’s through-the-cycle target of 1.5 times. During the quarter, Acadian repurchased 0.2 million shares for $10.6 million at a volume-weighted average price of $69.92. The company’s board also declared an interim dividend of $0.10 per share, payable Sept. 25 to shareholders of record as of Sept. 11. Young said Acadian plans to prioritize organic growth and balance-sheet flexibility before returning excess capital through dividends and share repurchases. Acadian Asset Management is a global investment management firm specializing in quantitative research and systematic strategies. Since its founding in 1986, the firm has developed data-driven models designed to identify and capture investment opportunities across equity and fixed income markets. By integrating advanced analytics, proprietary risk management tools and a disciplined investment process, Acadian seeks to deliver consistent performance for institutional clients. The firm's core offerings include institutional equity portfolios, fixed income strategies and multi-asset solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Acadian Asset Management Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Acadian Asset Management (AAMI) recently attracted attention after posting annual revenue of US$610.8 million alongside net income of US$84.2 million, prompting investors to reassess how the stock’s current valuation lines up with these figures. See our latest analysis for Acadian Asset Management. At a share price of US$80.88, Acadian Asset Management has seen a 12.0% share price return over the past month and an 18.6% share price return over the past quarter. Its 1 year total shareholder return of 103.4% and 3 year total shareholder return of about 2.8x suggest strong longer term momentum that investors are now weighing against the latest revenue and earnings figures. If you are reassessing Acadian Asset Management and want to see how it compares, this could be a good moment to widen your search with 18 top founder-led companies After a 103.4% 1 year total return and the stock now sitting close to analyst price targets, investors are asking whether Acadian Asset Management still offers meaningful upside or if the big move is largely behind it. With Acadian Asset Management last closing at $80.88, the stock is trading on a P/E of 34.2x, which sits below the broader US Capital Markets industry average but above the peer group average cited in the data. The P/E multiple compares the current share price to earnings per share and is a common way investors gauge how much they are paying for each dollar of earnings. For a company like Acadian Asset Management in the capital markets space, this often reflects what investors are prepared to pay for its asset management fee streams and earnings profile. In AAMI's case, the 34.2x P/E is described as good value relative to the US Capital Markets industry average of 39.3x. However, it is considered expensive compared with a peer average of 20.5x. That mix of signals suggests the market is assigning a richer price against nearer peers while still sitting below the wider industry level, leaving investors to judge whether revenue growth expectations and the company's return profile justify that premium. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-earnings of 34.2x (ABOUT RIGHT) However, investors still face risks if Acadian Asset Management’s revenue growth or US$78.00 analyst price target sentiment cools, or if its 34.2x P/E compresses toward peers. Find out about the key risks to this Acadian Asset Management narrative. Looking at Acadian Asset Management through our DCF model gives a very different picture. At $80.88, the stock is described as trading above an estimated future cash flow value of $16.17, which points to a rich price tag compared with that cash flow based yardstick. That raises a simple question: is the market seeing something the cash flow model is not? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Acadian Asset Management for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Given the mixed signals around Acadian Asset Management’s valuation and sentiment, it makes sense to review the underlying data yourself and decide how the risk and reward trade off looks in your portfolio, then round out that view with 2 key rewards and 4 important warning signs If Acadian Asset Management has sharpened your focus on valuation and risk, it is worth broadening your watchlist with a few targeted stock ideas. Upgrade your income shortlist by reviewing companies that appear as 9 dividend fortresses and could complement Acadian Asset Management in a diversified portfolio. Spot potential mispricings early by scanning the screener containing 19 high quality undiscovered gems before other investors pay attention. Dial down portfolio risk by comparing Acadian Asset Management with companies highlighted in the 79 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AAMI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]