Despite overall net outflows, separately managed accounts are a bright spot for Hartford, Connecticut-based Virtus Investment Partners [profile].

George Robert Aylward President and CEO Virtus Investment Partners

The team at Virtus Investment Partners has released their Q3 2019 earnings, and AUM as of September 30, 2019 was $104.1 billion, down 1 percent compared to $105 billion as of June 30, 2019 and down 1.4 percent compared to $105.6 billion as of September 30, 2018.

The firm's non-GAAP earnings per share of $4.03 beat analysts' estimates by $0.27 while its GAAP earnings per share was $2.95. Q3 revenues of $146 million missed estimates by $510,000.

Virtus's total net outflows for Q3 amounted to $1.1 billion compared to total net inflows of $0.1 billion in Q2. Q3 had net inflows of $0.4 billion in retail separate accounts (compared to net inflows of $0.3 billion in Q2), net outflows of $0.2 billion from open-end funds (compared to net outflows of $0.7 billion in Q2), and net outflows of $1.4 billion from institutions (compared to net inflows of $0.5 billion in Q2). George Aylward, president and CEO of Virtus Investment Partners, stated in an earnings call (as transcribed by Seeking Alpha) that net outflows were primarily institutional "due to a $0.9 billion redemption by a single client."

Retail separate accounts have had 15 consecutive quarters of positive flows. Aylward attributes the growth in retail separate accounts to SMID and small cap strategies, among a variety of others. Furthermore, Aylward states that retail separate accounts are "a big area of growth" with the use of "many compelling investment strategies in terms of continuing to grow in that channel."

Total sales as of September 30, 2019 amounted to $4.8 billion, a decrease of 7 percent compared to Q2 largely due to an institutional sub advisory mandate. Furthermore, institutional sales of $0.9 billion in Q3 2019 decreased 51 percent compared to Q2. Retail separate accounts sales and funds sales, however, increased 12 percent to $0.8 billion and 19 percent to $3 billion respectively.

The president and CEO of Virtus Investment Partners is continuing to "evaluate all sorts of opportunities ... in the M&A market." However, in response to a question from Barclays director Jeremy Campbell,, Aylward states that Virtus' "long-term growth strategy is not contingent upon M&A." 

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