Good day and thank you for standing by. Welcome to Westwood Holdings third quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your phone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jonathan Nahoit, Director, Senior Legal Counsel. Please go ahead.

Thank you, and welcome to our third quarter of 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 30th, 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 measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our Chief Executive Officer, and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon and 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, 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 three years or longer, our investment teams continue to deliver competitive results across a broad range of strategies and asset classes. Every one of our U.S. value strategies has outperformed its benchmark since inception, and our multi-asset strategies continue to deliver compelling results. Four of our five multi-asset strategies outperformed their benchmarks of the trailing three-year period on a gross-to-fees basis. All five strategies have outperformed since inception, and two of the five strategies rank in the top 40% of their peers over three years. Our five-star multi-asset income fund, WHGHX, is a top quartile in its Morningstar category over trailing three- and five-year periods. Our four-star income opportunity fund, WHGIX, ranks in the top 40% of its Morningstar category over three-, seven-, and ten-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, four out of six strategies with track records of three years or longer have outperformed their benchmarks over at least one long-term period. And half have outperformed over trailing three years. Our MLP SMA strategy ranks first in its peer universe since inception and is a top 40% performer over trailing three, five, and seven-year periods. Our real estate income strategy has outperformed its benchmark across long-term periods, both gross and net of feed. And our MLP high conviction strategy has outperformed the Illyrian MLP index over the trailing three 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 has outperformed over the trailing three and five-year periods and since inception, ranks in the top quartile over three years, and scores a top decile slot since inception. Enhanced balance has outperformed over trailing five and seven-year periods and since inception, ranking in the top 40% of its peers over seven and 10 years and is top quartile since inception. Looking ahead, we remain cautiously optimistic. After nearly two 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 broad mark 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 small cap value led by two public plan relationships. Our pipeline remains robust across value, managed investment solutions, and Energy Strategies and we added six 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, Techspurs 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 SMBCAP 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 WEST2 last year. WEST3 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 BroadMark 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 30th, MDST has grown to nearly 285 million, WEEI hit over 105 million, YLDW crossed the $40 million mark, and our newest fund, PowerX, 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 Power and Infrastructure ETF, 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, investing across the power ecosystem from traditional energy and utilities to grid infrastructures, 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 over 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 WEBS QQQ Defined Volatility ETF, DVQQ, and the WEBS SPY Defined Volatility ETF, DVSP, onto the Ultimis Managers platform, with Westwood serving as investment advisor to both funds. These two ETFs, DVQQ and DVSP, 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 7, and closed an approximately 30 million in new commitments across multiple new and existing energy secondary funds. Our team executed multiple LP secondaries and GP-led transactions across our energy secondary funds, and we also completed onboarding of Intap 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. TexB 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 Series E completed at a higher share price. In summary, Westwood is executing on its 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 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.

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 secondary funds and private capital distributions. Our third quarter income of 3.1 million or 34 cents per share exceeded the 1.5 million or 17 cents 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. Our 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 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 year end, consisting of assets under management of $16.1 billion and assets under advisement of $1 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 4th, 2027 to stockholders of record on December 1st, 2026. That brings our prepared comments to a close. We encourage you to review our investor presentation. 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. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Macrae Skyes of Gabelli Funds. Your line is open.

Oh, good afternoon, everyone. Congrats on a good quarter. Thanks, Matt. 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 and helping to also lead discussions with other products? Just want a little more color in terms of your efforts on the ETFs.

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 three 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 one of the ETFs, MDST has been approved at one of the largest wire houses 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 warehouse 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 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 four of our ETFs now is have something unique and different that delivers an income level that's attractive to the client base.

Great, and then congrats on the asset gathering and the 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?

I've got to be careful what I say here because I'm looking at our compliance folks, but you know suffice to say that it's an attractive space one that we have been very fortunate to not only step into but create a number of different funds we we have completed two funds we're fundraising for a third fund and then along the way we've done a number of co-invests for opportunities and in general and this would not be for every fund but in general the management fee is is around 1% and the carry is 15% over an 8% return. So 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 65 to 70 cents 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. Okay, great. Thank you. Thank you, Matt. I appreciate your questions.

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

Great. Well, thank you. You know, we're really excited about PowerX 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 multifamily 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.

Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.