Westwood Holdings (WHG) Earnings Call zu Q3 2026: Umsatz steigt, ETFs erreichen $460 Millionen

Westwood Holdings (NYSE: WHG) verzeichnete für das dritte Quartal 2026 höhere Erlöse und ein sequenzielles Gewinnwachstum, gestützt durch Ausschüttungen aus dem Private-Capital-Bereich, ETFs und Private-Energy-Secondaries-Fonds. Allerdings ging das verwaltete Vermögen infolge von Nettoabflüssen und Marktwertverlusten zurück.

Wichtigste Erkenntnisse

• Der Umsatz im dritten Quartal 2026 erreichte 26,6 Millionen US-Dollar, nach 25,3 Millionen US-Dollar im zweiten Quartal 2026 und 24,3 Millionen US-Dollar im dritten Quartal 2025.
• Der Nettogewinn belief sich auf 3,1 Millionen US-Dollar bzw. 0,34 US-Dollar je Aktie, verglichen mit 1,5 Millionen US-Dollar bzw. 0,17 US-Dollar je Aktie im zweiten Quartal. Das Ergebnis enthielt 1,7 Millionen US-Dollar an abfindungsbezogenen Vergütungsaufwendungen.
• Der ökonomische Gewinn (Non-GAAP) stieg im Quartalsvergleich auf 4,4 Millionen US-Dollar bzw. 0,48 US-Dollar je Aktie, ging jedoch gegenüber 5,7 Millionen US-Dollar bzw. 0,64 US-Dollar je Aktie im Vorjahreszeitraum zurück.
• Das unternehmensweit verwaltete und beratene Vermögen belief sich auf insgesamt 17,1 Milliarden US-Dollar. Beim verwalteten Vermögen (AUM) kam es im Quartalsverlauf zu Nettoabflüssen von 0,3 Milliarden US-Dollar und Marktwertverlusten von 0,6 Milliarden US-Dollar.
• Die ETF-Plattform von Westwood hielt zum 30. September mehr als 430 Millionen US-Dollar und war bis zum Tag vor der Telefonkonferenz auf rund 460 Millionen US-Dollar angewachsen.
• Das Private-Capital-Fundraising erzielte im dritten Quartal rund 30 Millionen US-Dollar und im bisherigen Jahresverlauf fast 200 Millionen US-Dollar.

Wichtige Finanzkennzahlen

Geschäftliche und operative Entwicklung

Der institutionelle Vertriebskanal von Westwood verzeichnete Bruttoabsätze von 556,3 Millionen US-Dollar und Nettoabflüsse von 3 Millionen US-Dollar. Ein großer beitragsorientierter Versorgungsplan eines Fortune-50-Unternehmens investierte in die SMidCap-Strategie des Unternehmens, während sich die Abflüsse auf SmallCap Value konzentrierten und zwei Mandate der öffentlichen Hand umfassten.

Publikumsfonds und ETFs verzeichneten Bruttoabsätze von 142 Millionen US-Dollar und Nettoabflüsse von 87 Millionen US-Dollar. Energie- und Sachwertstrategien führten die Brutto- und Nettoabsätze an, während ETFs positive Nettozuflüsse erzielten.

Zum 30. September umfasste das ETF-Vermögen fast 285 Millionen US-Dollar im MDST, mehr als 105 Millionen US-Dollar im WEEI und über 40 Millionen US-Dollar im YLDW. Der neu aufgelegte Westwood Salient Enhanced Power & Infrastructure ETF, PWRX, überstieg bis zum Tag vor der Telefonkonferenz 17 Millionen US-Dollar. PWRX war der erste ETF, der an der Texas Stock Exchange notiert wurde.

Das Unternehmen vereinbarte zudem eine Neuordnung seiner Beziehung zu Webb’s Investments. Vorbehaltlich der Zustimmung der Anteilseigner sollen DVQQ und DBSP auf die Plattform von Ultimus Managers übergehen, wobei Westwood als Anlageberater fungieren wird.

Im Bereich Private Capital legte Westwood den Energy Secondaries Co-Investment Fund VII auf und schloss neue Kapitalzusagen von rund 30 Millionen US-Dollar über neue und bestehende Energy-Secondaries-Fonds ab. Zudem verbuchte das Unternehmen einen Gewinn von 2,55 Millionen US-Dollar nach einer Finanzierungsrunde der Texas Stock Exchange zu einer höheren Bewertung sowie einen nicht realisierten Gewinn von 333.707 US-Dollar im Zusammenhang mit der Series-E-Finanzierung von Ridgeline.

Ausblick des Managements

Das Management bezeichnete den Ausblick als vorsichtig optimistisch. Es erwartet, dass die Nachfrage im Zusammenhang mit Energieinfrastruktur, KI, Rechenzentren und industriellem Reshoring die Chancen für seine Energiestrategien stützen wird, während eine erhöhte Marktvolatilität das Interesse an US-Value- und Multi-Asset-Strategien mit Schwerpunkt auf Risikominderung steigern könnte.

Das Unternehmen rechnet mit weiteren SMidCap-Mandaten für beitragsorientierte Versorgungspläne und geht davon aus, die Verfügbarkeit der ETF-Plattform mit wachsendem Volumen auszubauen. Vorbehaltlich der Zustimmung der Fondsanteilseigner wird der Abschluss der Reorganisation von DVQQ und DBSP für Anfang 2027 angestrebt.

Zudem rechnet Westwood damit, die Umstellung seiner Vermögensverwaltungsstrategie auf ein Multi-Family-Office-Modell im kommenden Jahr abzuschließen.

Risiken und Beobachtungsfelder

Das verwaltete Vermögen geriet im Quartalsverlauf sowohl durch Nettoabflüsse als auch durch Marktwertverluste unter Druck. Die institutionellen Abflüsse konzentrierten sich auf SmallCap Value, während Publikumsfonds und ETFs trotz positiver ETF-Mittelzuflüsse Nettoabflüsse von 87 Millionen US-Dollar meldeten.

Das Ergebnis des dritten Quartals enthielt 1,7 Millionen US-Dollar an abfindungsbezogenen Vergütungsaufwendungen. Im Vergleich zum dritten Quartal 2025 wurde der Nettogewinn zudem durch höhere Ausgaben für externe Beratungsleistungen und Ertragsteuern belastet.

Das Management erklärte, dass sich die Private-Capital-Fonds gut entwickeln, nannte jedoch weder den Zeitpunkt noch die Höhe möglicher Carried-Interest-Erträge. Auch die vorgeschlagene ETF-Reorganisation steht weiterhin unter dem Vorbehalt der Zustimmung der Anteilseigner.

Wichtigste Punkte aus der Analysten-Fragerunde

Zum Thema ETF-Vertrieb erklärte CEO Brian Casey, dass das gesamte ETF-Vermögen auf rund 460 Millionen US-Dollar gestiegen sei, etwa 30 Millionen US-Dollar über dem Stand zum Quartalsende. MDST wurde bei einem der größten US-Brokerhäuser zugelassen, und Westwood strebt eine vergleichbare Zulassung für WEEI an.

Casey erklärte, die vier ETFs von Westwood seien darauf ausgelegt, differenzierte Ertragsstrategien zu bieten. So kombiniere der WEEI beispielsweise ein breites Engagement im Energiesektor mit einer Covered-Call-Strategie, die zusätzliche Erträge generieren soll.

Zur Ertragsstruktur im Private-Capital-Bereich erklärte das Management, dass die Gebühren im Allgemeinen bei rund 1 % lägen, während der Carried Interest typischerweise 15 % oberhalb einer Rendite von 8 % betrage, wenngleich die Bedingungen nicht einheitlich für jeden Fonds gelten. Westwood gab an, Vermögenswerte für rund 0,65 bis 0,70 US-Dollar je Dollar erworben zu haben, lehnte es jedoch ab zu schätzen, wann Carried Interest verbucht werden könnte oder wie hoch dieser ausfallen könnte.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

[Operator Instructions] Be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jonathan Nahhat, Director, Senior Legal Counsel. Please go ahead.

Unknown Speaker

Thank you and welcome to our third quarter 2026 earnings conference call. The following discussion will include forward-looking statements that 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 30, 2026, that will be 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 measure 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.

Brian Casey

Good afternoon and thank you for joining us for Westwood's third quarter 2026 earnings call. I'm pleased to share the quarter's results and key developments as well as our outlook for the remainder of the year. Before we dive into the details, I'd like to highlight several key points from the quarter. Our Enhanced Power and Infrastructure ETF, PWRX, PowerX, just launched in September as the very first ETF on the Texas Stock Exchange. Westwood's ETF platform now exceeds $430 million in assets. We closed approximately $30 million in new private capital commitments. And finally, a large defined contribution plan of a Fortune 50 company funded our SMidCap strategy.

The third quarter delivered a mixed bag across markets. Many major indices posted positive performance. However, underlying results varied with large-cap stocks advancing while small- and mid-cap stocks declined. Energy was the clear standout as the energy sector posted strong double-digit gains. MLPs also advanced, even as the broader midstream index moved lower. In the fixed income area, core bond indices and preferred securities declined, which weighed on balanced and income-oriented portfolios, while short-term treasury bills delivered steady, positive returns. Looking at our long-term performance, which we define as periods of 3 years or longer, our investment teams continue to deliver competitive results across a broad range of strategies and asset classes. Every 1 of our U.S. Value strategies has outperformed its benchmark since inception, and our multi-asset strategies continue to deliver compelling results.

4 of our 5 multi-asset strategies outperformed their benchmarks over the trailing 3-year period on a gross of fees basis. All 5 strategies have outperformed since inception, and 2 of the 5 strategies rank in the top 40% of their peers over 3 years. Our 5-star Multi-Asset Income Fund, WHGHX, is top quartile in its Morningstar category over trailing 3- and 5-year periods. Our 4-star Income Opportunity Fund, WHGIX, ranks in the top 40% of its Morningstar category over 3-, 7-, and 10-year periods and is in the top decile since inception. And our Alternative Income Fund, WMNIX, has outperformed its benchmark across every long-term period. Within our energy and real asset strategies, 4 out of 6 strategies with track records of 3 years or longer have outperformed their benchmarks over at least 1 long-term period, and half have outperformed over trailing 3 years. Our MLP SMA strategy ranks #1 in its peer universe since inception, and is a top 40% performer over trailing 3-, 5-, and 7-year periods. Our Real Estate Income strategy has outperformed its benchmark across long-term periods, both gross and net of fees.

And our MLP High Conviction strategy has outperformed the Alerian MLP Index over the trailing 3 years and since inception. Within our wealth team strategies, half of them have outperformed their benchmarks over multiple long-term periods while ranking in the top 40% of their peers. Thematic Innovation and Growth strategy has outperformed over the trailing 3- and 5-year periods and since inception, roundly outperforming, and top quartile over 3 years, and scores a top decile slot since inception. Enhanced Balance has outperformed over trailing 5- and 7-year periods and since inception, ranking in the top 40% of its peers over 7 and 10 years and is top quartile since inception. Looking ahead, we remain cautiously optimistic. After nearly 2 decades of flat electricity demand, the United States is entering a new era of accelerating power needs driven by AI, data centers, and industrial reshoring. We firmly believe that our veteran Houston-based energy team is well positioned to help investors navigate this opportunity.

Increased market volatility means that risk mitigation is back in focus, which should favor our benchmark U.S. Value and multi-asset strategies. Taken together with the breadth of our multi-asset energy and private capital capabilities, we are convinced that Westwood is well-positioned to deliver for clients as these themes unfold. Turning to distribution, our institutional channel, which includes our private capital business, generated $556.3 million in gross sales and net outflows of $3 million in the third quarter. One of the third quarter's highlights was the funding in July of a large defined contribution plan mandate in our SMidCap strategy. Outflows were concentrated in SmallCap Value led by 2 public plan relationships. Our pipeline remains robust across value, Managed Investment Solutions, and energy strategies, and we added 6 new potential clients during the quarter. We continue to build momentum with the consultant community.

Our MIS Real Asset strategy is being reviewed for an approved, managed list with potential inclusion by year-end. And our energy secondaries conversations are progressing well with several key consultant relationships. Our team also participated in key industry events with Markets Group, TEXPERS, and MAPERS. Looking ahead, we believe our private capital platform is poised to attract institutional investors, following significant enhancements to our personnel and organizational structure. We anticipate receiving more SMidCap mandates for defined contribution plans, driven by the largest national consultants, and constructive conversations are being held for MIS with consultants and potential investors. Our mutual fund and ETF flows for the quarter included $142 million in gross sales and net outflows of $87 million. Our private fundraising efforts continue to be successful, raising approximately $30 million for the quarter and almost $200 million year-to-date.

Energy and real assets led in gross and net sales, and our ETFs generated positive net flows in the channel. In September, we launched PWRX, PowerX, the very first new ETF listed on the Texas Stock Exchange, celebrating this exciting milestone with opening and closing bell ceremonies at our Dallas headquarters. We are seeing positive adoption and growth of our ETFs in the National Broker-Dealer Channel, demonstrated by a rapidly increasing number of active producers each month, the vast majority of whom are new to Westwood. Looking ahead, building on the development of the Westwood brand in private markets and our successful asset raise for West II last year, West III is attracting substantial early interest across RIAs, family offices, and independent advisors. Our ETF suite continues to gain momentum, and we expect to increase platform availability as assets grow. Our broad market strategies are also gaining momentum as the need for risk mitigation comes back into focus amid increased market volatility. Within wealth management, solid progress continues to be made on our transformation initiatives to enhance the client experience and improve the scalability of our business.

We've advanced our fee alignment plans. We've strengthened investment governance by creating a dedicated wealth investment committee, along with the onboarding of an outsourced investment consulting partner. And finally, we have selected Black Diamond as our next-generation wealth platform. We have also added talented new team members in key growth markets, and improved coordination among our client service, operations, technology, and investment teams. Together, these efforts are creating a stronger foundation for growth, driving greater consistency in how we serve clients, and positioning our wealth business for long-term success for years to come. Beyond our core business results, this quarter we accomplished several milestones that clearly demonstrate our commitment to innovation and strategic growth. Our ETF platform continues to scale.

As of September 30, MDST has grown to nearly $285 million. WEEI hit over $105 million. YLDW crossed the $40 million mark. Our newest fund, PowerX, [1.2.2] is off to a great start with assets exceeding $17 million as of yesterday. Combined, these ETFs represent over $430 million in assets put in place since our first ETF launched in April 2024. We believe this business has significant room to grow over the next few years, supported by meaningful tailwinds in energy. In September, we launched the Westwood Salient Enhanced Power & Infrastructure ETF, [1.2.2] PowerX, the newest addition to our Enhanced Income Series ETFs and the first ETF to launch on the Texas Stock Exchange. PowerX pairs an income strategy with exposure to the high-growth elements of the energy market across the power ecosystem from traditional energy and utilities to grid infrastructure, data center infrastructure, and next-generation energy technologies.

Managed by our Houston-based energy team, the strategy combines a high-conviction equity portfolio with a systematic covered call overlay and seeks to generate attractive monthly income. Westwood has called Texas home for nearly 35 years, and launching PowerX on a Texas-based exchange reflects our commitment to innovation and leadership right here where we live and work. Westwood and Webb's Investments have reached an agreement to reorganize the relationship. Accordingly, we are working together to move the Webb's Triple Q Defined Volatility ETF, DVQQ, and the Webb's SPY Defined Volatility ETF, DBSP, onto the Ultimus Managers platform, with Westwood serving as investment advisor to both funds. These 2 ETFs, DVQQ and DBSP, are natural additions to our growing ETF platform, offering innovative strategies built around core assets. The reorganization is subject to fund shareholder approval, and we're targeting completion early next year. Our private capital platform continues to expand.

We launched a new co-investment fund, Westwood Energy Secondaries Co-Investment Fund VII, and closed approximately $30 million in new commitments across multiple new and existing energy secondaries funds. Our team executed multiple LP secondaries and GP-led transactions across our energy secondary funds, and we also completed onboarding of Intapp DealCloud, a new deal CRM system that strengthens our deal management capabilities. As an early investor in the Texas Stock Exchange, we've participated in its growth through successive capital raises. We actually completed another capital raise this quarter at a higher valuation, and we marked up our investment accordingly, $2.55 million gain in Q3, continuing a pattern in which each successive funding round has increased the value of our position. Similarly, as a Series D investor in Ridgeline, an investment management software company, we recognized an unrealized gain of $333,707 after Ridgeline's Series E completed at a higher share price. In summary, Westwood is executing on strategic shifts we anticipated some time ago, expanding in ETFs, alternatives, and managed investment solutions. Our ETF platform continues to scale.

Our private capital business is growing. Our pipeline remains robust, and we're seeing strong long-term performance results across our U.S. Value, multi-asset, and energy strategies. With growing demand for power and income, a renewed focus on risk mitigation, and a more diversified platform than ever, we believe Westwood is well positioned to deliver value to our clients and shareholders. Thank you for your continued support and confidence in Westwood. I'll now turn the call over to our CFO, Terry Forbes.

Unknown Speaker

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $26.6 million for the third quarter of 2026, compared to $25.3 million in the second quarter and $24.3 million in the prior year's third quarter. Third quarter revenues exceeded the second quarter on higher private capital distributions and continued growth from our ETFs and private energy secondaries funds. Third quarter revenues were higher than last year's third quarter due to continued growth in our ETFs and private energy secondaries funds, as well as private capital distributions. Our third quarter income of $3.1 million, or $0.34 per share, exceeded the $1.5 million, or $0.17 per share, in the second quarter on higher revenues and unrealized gains on multiple private investments offset by $1.7 million in severance-related compensation expenses and higher income taxes. Non-GAAP economic earnings were $4.4 million, or $0.48 per share in the current quarter, versus $3.0 million, or $0.33 per share, in the second quarter. Third quarter income of $3.1 million, or $0.34 per share, compared unfavorably to last year's third quarter income of $3.7 million, or $0.41 per share, due to $1.7 million of severance-related compensation expenses, higher professional services expenses, and higher income taxes, all offset by higher revenues and unrealized gains on multiple private investments. Economic earnings for the quarter were $4.4 million, or $0.48 per share, compared with $5.7 million, or $0.64 per share, in the third quarter of 2025.

Firmwide assets under management and advisement totaled $17.1 billion at quarter-end, consisting of assets under management of $16.1 billion and assets under advisement of $1.0 billion. Assets under management consisted of institutional assets of $7.8 billion, or 49% of the total, wealth management assets of $4.4 billion, or 27% of the total, and mutual fund and ETF assets of $3.9 billion, or 24% of the total. Over the quarter, our assets under management experienced net outflows of $0.3 billion and market depreciation of $0.6 billion. And our assets under advisement experienced market depreciation of $9 million and net outflows of $14 million. At quarter-end, we had cash and investments totaling $65 million. I'm happy to announce that our Board of Directors approved a regular cash dividend of $0.15 per common share, payable on January 4, 2027, to stockholders of record on December 1, 2026. This brings our prepared comments to a close. We encourage you to review our investor presentation that we have posted on our website, reflecting quarterly highlights as well as discussion of our business, product development, and longer-term trends in revenues and earnings. We thank you for your interest in our company, and we'll open the line to questions. Thank you.

Operator

[Operator Instructions] Our first question comes from Macrae Sykes of Gabelli Funds.

Fragen und Antworten

Macrae Sykes

Could you talk about sort of the ETF channel? You've had some great success and then launched this new one this month. Do you see that asset gathering accelerating or helping to also lead discussions with other products? I just want a little more color in terms of your efforts on the ETFs.

Brian Casey

Sure. Well, we're thrilled to be in the ETF business. It has been a learning experience. We've been in it for less than 3 years, but we continue to see nice acceleration in the growth of all of our ETFs. In fact, just since quarter-end, I think I looked as of yesterday, we're at about $460 million. So we're net $30 million positive since the end of the quarter. So we're at about $460 million total. And that really is a testament to a lot of folks working really hard to get us on platforms and to really get out and tell the story.

We have been approved now at 1 of the ETFs, MDST, has been approved at 1 of the largest wirehouses in the country, and that allows all of our sales team to go in and talk to advisors in those offices about MDST. We're trying really hard to get WEEI approved at the same wirehouse, and if we're successful, that allows them to have those same types of conversations. And you may recall that WEEI is the Westwood Enhanced Energy Income ETF. And it's very similar to the index fund known as XLE, which is really the energy sector ETF that people go to for broad energy exposure. So our portfolio is very similar, but we write covered calls against the position so that we are able to deliver a superior income. And that's really what we're trying to do across the board with all 4 of our ETFs now is have something unique and different that delivers an income level that's attractive to the client base.

Macrae Sykes

Great. And then congrats on the asset gathering in private capital. Could you, if possible, give us a little foresight on expectations for earning carry there and the timing of that? And how it comes off of the vehicle? Is there some kind of year-end lock, or is it done on an individual basis?

Brian Casey

I've got to be careful what I say here because I'm looking at our compliance folks. But suffice to say that it's an attractive space, 1 that we have been very fortunate to not only step into but create a number of different funds. We have completed 2 funds. We're fundraising for a 3rd fund. And then along the way, we've done a number of co-investments for opportunities. And in general, and this would not be for every fund, but in general, the management fee is around 1%. And the carry is 15% over an 8% return. As of now, the funds are performing really well.

You can imagine when you're entering into these funds, we're buying assets that are $0.65 to $0.70 on the dollar. So you're putting fresh capital into an investment that is already at a significant discount. So we would expect that we will be able to deliver some carry. As to when that comes and how much that will be, I don't think I'm able to answer that question.

Macrae Sykes

Okay, great. Thank you.

Brian Casey

Thank you, Mac. I appreciate your questions.

Operator

Thank you. I am showing no further questions at this time. I would now like to turn the call back to CEO Brian Casey for closing remarks.

Brian Casey

Great. Well, thank you. We're really excited about PowerX [1.2.2] and the future of our entire ETF business, which as I mentioned is now over $460 million as of yesterday in total assets. Our energy secondaries business is now fully staffed. We've built a great team. And then finally, we've made a ton of progress in the transformation of our wealth business to a multi-family office, and we would expect to fully transition our wealth strategy next year. We appreciate your interest, and please reach out to me or Terry if you have any questions. Have a great afternoon. Thank you.

Operator

Thank you for your participation in today's conference. This concludes today's conference. Thank you for participating. You may now disconnect.

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