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    WHG
    Earnings call· Jun 2026(Q2 FY26)

    WESTWOOD HOLDINGS GROUP Q2 FY26 earnings call WHG

    Aug 6, 2026 Source

    Executive summary

    Westwood Holdings Group Q2 FY26 — Strategic Growth in ETFs and Private Capital

    Westwood Holdings Group delivered Q2 FY26 results reflecting strategic progress in its growth areas of ETFs, private capital, and managed investment solutions, which are gaining significant traction and pipeline growth. While the firm experienced net outflows from legacy institutional value strategies, management remains confident in its diversified approach and ability to deliver long-term value, with new platforms nearing $500 million in assets each. The company is actively refining internal processes and enhancing technology to support sustainable growth and client experience.

    Highlights

    5

    • ETF platform surpassed $400 million in assets in July, demonstrating strong momentum.

    • Closed $147 million in new private capital commitments, attracting substantial interest.

    • Multi-asset and wealth team strategies posted strong long-term rankings, with Multi-asset income in the top 1% for 7- and 10-year periods.

    • Firmwide revenues increased to $25.3 million in Q2 FY26, up from $23.1 million in Q2 FY25.

    • Non-GAAP economic earnings per share rose to $0.33 in Q2 FY26, compared to $0.32 in Q2 FY25.

    Concerns

    4

    • Experienced net outflows of $1.6 billion in assets under management during the quarter.

    • Net outflows of $1.3 billion from institutional channel, concentrated in legacy large cap value business.

    • Mutual fund and ETF net outflows totaled $165 million for the quarter.

    • U.S. value strategies showed mixed results over longer periods and softer performance recently, contributing to outflows.

    Guidance & targets

    1
    CategoryTargetConfidence
    Assets in new business lines (Managed Investment Solutions, ETFs, Private Capital)
    Surpass $1 billion in assets within each business line
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Institutional Assets
    Experienced significant net outflows, primarily from legacy large cap value business, but pipeline remains robust across value and energy strategies.
    Assets Under Management: $8.3 billionPercentage of Total AUM: 49%Gross Sales: $382 millionNet Outflows: $1.3 billion
    		————
    Wealth Management Assets
    Client engagement remained elevated, with focus on holistic planning and multifamily office platform development.
    Assets Under Management: $4.5 billionPercentage of Total AUM: 26%
    		————
    Mutual Fund and ETF Assets
    ETF suite is gaining momentum, with platform availability expected to increase as assets grow. Energy and real asset strategies led in gross and net sales.
    Assets Under Management: $4.2 billionPercentage of Total AUM: 25%Gross Sales: $168 millionNet Outflows: $165 million
    		————
    Assets Under Management (Firmwide)
    Firmwide AUM experienced net outflows partially offset by market appreciation.
    Total AUM: $17.0 billionNet Outflows: $1.6 billionMarket Appreciation: $1.2 billion
    		————
    Assets Under Advisement (Firmwide)
    AUA saw market appreciation and minor net outflows.
    Total AUA: $1.0 billionMarket Appreciation: $53 millionNet Outflows: $4 million
    		————

    Operational metrics

    12
    Non-GAAP Economic Earnings
    $3.0 millionvs $2.8 million in Q1 FY26; vs $2.8 million in Q2 FY25
    Q2 FY26

    Reported non-GAAP economic earnings for the quarter.

    Non-GAAP Economic Earnings Per Share
    $0.33vs $0.31 in Q1 FY26; vs $0.32 in Q2 FY25
    Q2 FY26

    Reported non-GAAP economic earnings per share for the quarter.

    Cash and Investments
    $56.5 million
    Q2 FY26

    Total cash and investments at quarter end.

    Regular Cash Dividend
    $0.15
    Q2 FY26

    Board of Directors approved a regular cash dividend.

    ETF Assets Under Management
    $400 million
    July 2026

    ETF platform surpassed this milestone in July.

    Private Capital Commitments
    $147 million
    Q2 FY26

    New commitments closed for private capital.

    Managed Investment Solutions Year-to-Date Flows
    $350 million
    YTD Q2 FY26

    Year-to-date flows for Managed Investment Solutions clients.

    Combined Assets of Enhanced Midstream and Enhanced Energy Income ETFs
    $370 million
    Q2 FY26

    Combined assets of MDST and WEEI ETFs.

    Enhanced Income Opportunity ETF (YLDW) Assets
    $35 million
    Q2 FY26

    Assets for the YLDW ETF, launched end of 2025.

    Private Capital Commitments (Total)
    Over $500 million
    Q2 FY26

    Total commitments to private capital funds.

    Private Capital Annual Management Fee
    1% to 1.5%
    Annual

    Annual management fee range for private capital funds.

    Private Capital Carry
    10% or 15%over an 8% PREF
    Long-term

    Expected carry structure for private capital funds, not yet reflected in financials.

    Industry KPIs

    2
    MetricValueDetails
    Fundraising inflows$147 millionUSD
    Performance revenue10% or 15%%

    Product announcements

    1
    ProductTypeDetails
    Westwood Salient Enhanced Power and Infrastructure ETF (PWRX)launch

    Deals & partnerships

    1
    ETF Capital Markets Advisors (Nicholas Phillips)Strategic partnership to provide dedicated capital markets consulting for the ETF platform.

    Nicholas Phillips, with over 25 years of ETF market making and capital markets experience, will advise on trading, execution, and market structure for Westwood's ETFs, including the Enhanced Income Series and WEBS-defined volatility ETFs.

    Risks & headwinds

    5
    Net outflows from institutional value strategiesQ2 FY26

    $1.3 billion in Q2 FY26

    Mitigation: Strategic positioning in ETFs, alternatives, and managed investment solutions; robust institutional pipeline in energy and selected value strategies; client consolidation from small cap value to larger SMIDCAP mandate.

    Industry dynamics and shift to passive optionsOngoing

    Investors increasingly shift to passive ETFs

    Mitigation: Investing in and growing the firm's own ETF platform to capitalize on this shift; developing private capital and managed investment solutions.

    U.S. value strategies underperformanceRecent periods

    Mixed over longer periods and softer over recent periods

    Mitigation: Belief in the durability of the investment approach focused on high-quality businesses; broadening market leadership beyond mega-cap tech into defensive, quality-oriented sectors.

    Market volatility and uncertaintyOngoing

    Increased market volatility

    Mitigation: Broad mark strategies gaining momentum as investors refocus on risk mitigation; wealth management team maintaining disciplined, long-term approach to asset allocation; focus on holistic planning.

    Inflation and rising bond yieldsQ2 FY26

    Inflation, driven largely by rising energy prices tied to the police conflict, reemerged as a key concern and pushed bond yields higher.

    Mitigation: Disciplined focus on high-quality businesses with strong free cash flow and low leverage, positioned to deliver strong long-term results regardless of macro backdrop.

    What to watch in Q3 FY26

    4

    Assets in new business lines (ETFs, Private Capital, Managed Investment Solutions)

    Next year
    CurrentApproximately $500 million each
    TargetProgress towards $1 billion each

    Why it matters

    This is a key strategic goal for the firm's diversification and future growth, indicating successful execution of its long-term strategy.

    Our goal in the year ahead is ambitious but achievable, and that's to surpass a billion in assets within each of these business lines and continue delivering value for our clients and shareholders.

    Q&A highlights

    1

    The analyst inquired about the trend in the firm's average fee rate, noting the addition of higher-fee ETF and private capital businesses, and asked for clarification on embedded carry or performance fees in the secondaries business and their recognition timeline.

    Management explained that while ETFs carry a higher fee, initial fee waivers are common to keep expense ratios down, expecting the average fee to grow with ETF asset scale. For private capital, annual management fees range from 1% to 1.5%, with potential for carry of 10% or 15% over an 8% PREF. They noted that no carry is currently reflected in financials but is anticipated in the future, given strong investment performance in energy secondaries.

    “As far as the private capital, we could not be more excited about where we are today. We are over half a billion in commitments now to our private capital funds. And those carry an annual management fee of at least 1% and as high is 1.5%. But more importantly, down the road, we hope to achieve carry, and the carry is 10% over an 8% PREF or 15% over an 8% PREF.”

    asked by Max Sykes · answered by Brian Casey

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Growth Areas Performance

    Westwood is strategically positioning the firm by investing in three growth areas: ETFs, alternatives (private capital), and managed investment solutions. The ETF platform surpassed $400 million in assets in July, with Enhanced Midstream (MDST) and Enhanced Energy Income (WEEI) ETFs exceeding $370 million combined. Private Capital closed $147 million in new commitments, attracting substantial interest from RIAs, family offices, and independent advisors. Managed Investment Solutions clients funded new accounts, bringing year-to-date flows to $350 million.

    02

    Market and Investment Performance

    Equity markets rebounded sharply in Q2 FY26, with the S&P 500 gaining over 15% and the Russell 2000 rising over 21%. While U.S. value strategies showed mixed long-term results and recent softness, multi-asset strategies delivered strong long-term performance, with over half ranking in the top third or better over three-year and longer periods. MLP-focused strategies also performed well, with MLP SMA achieving a top decile ranking since inception. The firm maintains a disciplined focus on high-quality businesses with strong free cash flow and attractive valuations.

    03

    Outflows and Pipeline

    The firm experienced net outflows of $1.6 billion in AUM, primarily from U.S. value institutional clients ($1.3 billion) and mutual funds/ETFs ($165 million). These outflows were anticipated due to evolving core equity allocations towards lower-fee passive options. However, the institutional pipeline remains robust across value and energy strategies, with a significant increase in Managed Investment Solutions opportunities. A single client's small cap value redemption was offset by a larger SMIDCAP mandate in July.

    04

    Wealth Management Momentum

    The wealth management team continues to build momentum, strengthening its multifamily office platform. Client engagement remains elevated, driven by market uncertainty🌐 and demand for proactive planning, tax positioning, liquidity management, and trust coordination. Operationally, the team is progressing on process standardization and cross-functional alignment to improve scalability and client experience, while also evaluating technology for future growth.

    05

    New ETF Launch and Partnership

    Westwood announced a strategic partnership with ETF Capital Markets Advisors to enhance liquidity and execution quality for its growing ETF platform. The firm is launching its next ETF, the Westwood Salient Enhanced Power and Infrastructure ETF (PWRX), in mid-September on the Texas Stock Exchange (TXSE). PWRX will be the first new ETF to list on TXSE and is designed to provide access to companies powering AI growth, leveraging Texas's energy infrastructure and the firm's deep roots in the state.

    06

    Financial Performance Highlights

    Total revenues for Q2 FY26 were $25.3 million, up from $23.1 million in the prior year's second quarter, driven by growth in ETF and private energy secondaries funds. GAAP net income was $1.5 million, or $0.17 per share, compared to $1 million, or $0.12 per share, in Q2 FY25. Non-GAAP economic earnings were $3 million, or $0.33 per share, up from $2.8 million, or $0.32 per share, in the prior year quarter.

    AI-generated summary of the company’s earnings call. Not investment advice.