China Stimulus Impact on IGW
Q: How will China's stimulus affect IGW's performance?
A: The management noted that while it's early days in China, they've observed positive effects from the stimulus on investor sentiment. There's a mix shift occurring from fixed income to equities and balanced portfolios. Since IGW's business is about 30% equities, 30% fixed income, 20% balanced, and 20% money market, they expect demand to improve but caution against speculating too much at this stage.

MassMutual Preferred Shares
Q: Any plans to repurchase MassMutual's preferred shares?
A: Management is in ongoing conversations with MassMutual about the preferred shares, which are a non-call instrument owned entirely by MassMutual. Repurchasing them isn't straightforward due to their duration and associated liabilities. In the meantime, they've focused on deleveraging the balance sheet and returning capital to common shareholders.

Fixed Income Flows and Opportunities
Q: What's driving fixed income flows, and where are the opportunities?
A: The company saw strong institutional inflows in fixed income, accounting for 70% of the volume this quarter. There's increased money in motion as investors seek clarity on interest rates and reposition portfolios. Demand is growing globally, with particular strength in U.S. municipals and separately managed accounts.

Operating Leverage and Fee Rates
Q: Can you achieve positive operating leverage without changes in growth drivers?
A: Management believes they can drive positive operating leverage by focusing on growth in key investment capabilities and maintaining expense discipline. Despite shifts towards lower-fee products like ETFs, they're committed to improving operating margins and aim to reach a mid-30s operating margin.

M&A Strategy and Partnerships
Q: How do you view partnerships to expand offerings?
A: Partnerships are integral to their growth strategy. They've historically engaged in partnerships geographically and in distribution and investment capabilities, such as their joint venture in India. They continue to explore opportunities to leverage their brand and distribution through partnerships.

Private Real Estate Flows and Distribution
Q: What's driving private real estate flows, and how are distribution capabilities?
A: Growth is broad-based, not just from new platform additions. They've seen strong demand for their real estate debt strategy and separately managed accounts. Redemption pressures are moderating. They have specialist teams alongside generalists to distribute private market products and have made necessary investments in distribution.

Expense Outlook and Alpha Integration
Q: When will Alpha integration expenses peak and profits improve?
A: Implementation costs increased this quarter, and they expect expenses to peak next year as they transition assets onto the Alpha platform. Cost benefits are anticipated to start in 2026 as they transition off old systems.

India Joint Venture
Q: Can you elaborate on the India JV and lessons learned?
A: They're working through regulatory approvals, expecting completion in the first quarter. They believe in the Indian market and have chosen a good partner with captive distribution. Lessons learned include the importance of strong partnerships for expansion.

Competitiveness in Fixed Income
Q: Are there opportunities for market share gains in fixed income?
A: Management notes that increased money in motion due to interest rate clarity is leading to more fixed income flows globally. While the market is competitive, they are seeing strong demand across regions and believe assets are coming from both new allocations and competitors.

Money Market Fund Outflows
Q: What's causing outflows in global liquidity products?
A: Outflows are primarily due to institutional clients reallocating assets as interest rate dynamics change. Their liquidity business is largely institutional, comprising about 85% of assets. They continue to expect their liquidity business to be profitable and scalable.

MassMutual Distribution Partnership
Q: How are you growing within MassMutual's channel?
A: They're exploring opportunities like model portfolios in MassMutual's broker-dealer network and sub-advised insurance products across equities and fixed income. They see potential in leveraging the partnership given MassMutual's role as a significant distribution partner and common shareholder.

Service and Distribution Fees
Q: Why did service and distribution fees decline despite higher AUM?
A: The decline is due to a product mix shift towards ETFs, which generate less service and distribution fee revenue than mutual funds. This shift affects the ratio of service and distribution fees to management fees, trending it higher due to increased third-party expenses like licensing fees.

Retirement Eligibility Accounting Change
Q: How will the accounting change for retirement eligibility benefit results?
A: The change provides clarity for employees and reduces volatility in compensation expenses. By accelerating expense recognition for retirement-eligible employees, it allows better planning and aligns with common practices.

BulletShares ETF Flows
Q: What's driving strong BulletShares flows, and will it continue?
A: BulletShares are seeing strong demand due to investor interest in fixed income strategies. They expect this trend to continue, especially as maturities in December get repopulated in the first quarter.

Liquidity Impact on Bond Allocations
Q: Where are strong bond flows coming from if not from money funds?
A: Investors are moving further out in duration, with flows coming from the sidelines and competitors rather than their own money funds. The money fund dynamics are different, and the bond flows are not directly linked to outflows from their money funds.