Westwood Holdings Group Q2 Earnings Call Highlights
Sun, August 9, 2026 at 7:03 PM GMT+3 6 min read
Key Points
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Second-quarter results improved: Revenue rose to $25.3 million from $23.1 million a year earlier, while net income increased to $1.5 million, or $0.17 per share. Non-GAAP economic earnings reached $3 million, or $0.33 per share.
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Outflows remained a challenge: Westwood reported $1.6 billion in net asset-management outflows, concentrated in legacy large-cap value and certain small-cap institutional mandates. Firmwide assets under management and advisement totaled $17.9 billion at June 30.
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Growth initiatives expanded: The ETF platform surpassed $400 million in assets in July, private capital commitments exceeded $500 million, and the company plans to launch the PWRX power-and-infrastructure ETF in September. Westwood aims to exceed $1 billion in assets across ETFs, private capital and Managed Investment Solutions within the next year.
Westwood Holdings Group (NYSE:WHG) reported second-quarter 2026 revenue of $25.3 million, up from $23.1 million a year earlier and roughly level with $25 million in the first quarter, as growth in its exchange-traded fund and private energy secondaries businesses supported results.
Net income totaled $1.5 million, or $0.17 per share, compared with $0.8 million, or $0.09 per share, in the first quarter and $1 million, or $0.12 per share, in the year-ago quarter. Chief Financial Officer Terry Forbes said the sequential improvement reflected lower compensation expenses, partly offset by higher income taxes and the first-quarter recognition of gains from Westwood's investment in a private bank.
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Non-GAAP economic earnings were $3 million, or $0.33 per share, compared with $2.8 million, or $0.31 per share, in the preceding quarter. The company said year-over-year earnings benefited from higher revenue but faced partially offsetting increases in compensation, professional services expenses and income taxes.
Assets and Flows
Firmwide assets under management and advisement stood at $17.9 billion at June 30, including $17 billion in assets under management and $1 billion in assets under advisement. Institutional assets accounted for $8.3 billion of assets under management, while wealth management represented $4.5 billion and mutual fund and ETF assets totaled $4.2 billion.
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Westwood recorded $1.6 billion in net outflows from assets under management during the quarter, while market appreciation added $1.2 billion. Assets under advisement had $53 million of market appreciation and $4 million of net outflows.
Chief Executive Officer Brian Casey said outflows were concentrated in the company's legacy large-cap value institutional business, where performance challenges and an industry shift toward lower-fee passive investment options weighed on flows. Small-cap value also saw redemptions tied primarily to one client consolidating small- and mid-cap allocations into a combined SMID-cap mandate, he said. That client subsequently funded a larger allocation to Westwood's SMID-cap strategy in July.
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The institutional channel, including private capital, generated $382 million in gross sales and $1.3 billion in net outflows during the quarter. Mutual fund and ETF products generated $168 million in gross sales and $165 million in net outflows.
ETF and Private Capital Expansion
Casey said Westwood is investing in ETFs, alternatives and Managed Investment Solutions as it seeks to diversify from traditional asset-based fee businesses. Managed Investment Solutions clients funded new accounts during the quarter, bringing year-to-date flows to $350 million, according to the company.
Westwood's ETF platform surpassed $400 million in assets during July. Its Enhanced Midstream ETF, trading under the ticker MDST, and Enhanced Energy Income ETF, trading under the ticker WEEI, held more than $370 million in combined assets. The company's Enhanced Income Opportunity ETF, YLDW, was approaching $35 million in assets, Casey said.
The company also announced a strategic partnership with ETF Capital Markets Advisors, led by Nicholas Phillips, to provide capital-markets consulting related to ETF trading, execution and market structure. Westwood plans to launch the Westwood Salient Enhanced Power & Infrastructure ETF, PWRX, on the Texas Stock Exchange in mid-September. Casey said the ETF is intended to invest in companies positioned to benefit from power demand associated with artificial intelligence data-center growth.
Private capital closed nearly $147 million in new commitments during the quarter across its energy secondaries co-investment platform. Casey said Westwood had surpassed $500 million in commitments to its private capital funds and had added four members to its energy secondaries investment team and three private-capital operations employees.
During the question-and-answer session, Casey said private capital funds carry annual management fees ranging from at least 1% to as much as 1.5%. He said the business could generate carried interest in the future, structured as 10% above an 8% preferred return or 15% above an 8% preferred return, depending on the fund. Forbes said no carried interest is currently reflected in the company's financial statements.
Investment Performance and Wealth Strategy
Casey said longer-term investment performance was mixed across Westwood's strategies, though the company cited several areas of relative strength. The mid-cap strategy ranked in the top third among institutional peers over three- and five-year periods, while more than half of its multi-asset strategies ranked in the top third or better over periods of three years and longer.
Westwood's Multi-Asset Income strategy ranked in the top 12% of peers over trailing three- and five-year periods and in the top 1% over seven- and 10-year periods, according to Casey. The company also cited long-term strength in MLP-focused strategies and in select wealth management strategies.
The wealth management team continued to develop a multifamily office platform, with client discussions increasingly focused on tax positioning, liquidity management and trust coordination, Casey said. The company is also working on process standardization, cross-functional alignment and technology evaluation to support scalability.
Dividend and Outlook
Westwood ended the quarter with $56.5 million in cash and investments. Its board approved a regular quarterly cash dividend of $0.15 per common share, payable Oct. 1 to shareholders of record as of Sept. 1.
Looking ahead, Casey said Managed Investment Solutions, ETFs and private capital—businesses that did not exist three years ago—have each grown to about $500 million or more in assets. Westwood's stated objective for the coming year is to exceed $1 billion in assets in each of those business lines.
About Westwood Holdings Group (NYSE:WHG)
Westwood Holdings Group, Inc is an independent, publicly traded asset management firm founded in 1983 and headquartered in Kansas City, Missouri. Through its wholly owned subsidiaries, the company offers a range of investment advisory services tailored to institutional, retail, and high-net-worth clients. Westwood's disciplined, value-oriented approach guides its research process across equity and fixed-income markets, with an emphasis on fundamental analysis and long-term risk management.
The firm's product lineup includes U.S.
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