The acquisition of Putnam is a key driver of the company's growth strategy, significantly impacting AUM and revenue mix. It contributed to increased average AUM, particularly in equity and multi-asset classes, and influenced operating expenses.

The company repurchased 0.3 million shares of common stock at a cost of $5.8 million during the three months ended December 31, 2024. This indicates a continued strategy of returning capital to shareholders, although the amount is significantly lower than the prior year.

The company will pay up to $375.0 million related to the Putnam acquisition between the third and seventh anniversaries of the closing date related to revenue growth targets from the strategic partnership with Great-West and its affiliates which will be recognized in operating income.

The global workforce increased to approximately 10,100 employees from approximately 9,100 at December 31, 2023, primarily due to the acquisition of Putnam. This reflects management's execution of the acquisition strategy and integration of the acquired workforce.

The effective investment management fee rate decreased to 40.2 basis points, from 42.4 basis points for the same period in the prior fiscal year. The rate decrease was primarily due to increased AUM in lower fee products, including those from the acquisition of Putnam.

The Putnam acquisition had a significant impact on operating expenses in the three months ended December 31, 2024, however, due to the ongoing integration of the combined businesses, it is not practicable to separately quantify the impact of the legacy Putnam business.

The 10-Q states that there were no material changes from the Risk Factors previously disclosed in the last Annual Report on Form 10-K for fiscal year 2024. This suggests that the company's risk profile remains consistent with previous disclosures.

Long-term outflows increased 100% to $147.8 billion, substantially due to higher outflows across multiple fixed income vehicles at WAM. WAM outflows have increased significantly following the investment performance issues and the announcement of ongoing regulatory investigations.

The initiation or unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or inquiries, including the Western Asset Management (“WAM”) investigations, may result in additional costs, monetary judgments, settlements or other remedies.

AUM decreased $102.9 billion, or 6%, during the three months ended December 31, 2024 due to the negative impact of net market change, distributions and other and long-term net outflows. The Putnam acquisition is helping to offset some of the decline.

Long-term inflows increased 42% to $97.8 billion, as compared to the prior year period, driven by higher inflows in equity and multi-asset open end funds, equity sub-advised mutual funds, and equity retail separately managed accounts. This indicates a competitive strength in attracting flows to these specific product types.

Uncertainties regarding the global economy remain for the foreseeable future. As we continue to confront the challenges of the current economic and regulatory environments, we remain focused on the investment performance of our products and on providing high quality service to our clients.

Operating expenses increased by 14%, outpacing revenue growth and contributing to a decrease in the operating margin. This suggests potential inefficiencies or increased costs associated with the Putnam acquisition and other factors.

Special termination benefits decreased $6.3 million for the three months ended December 31, 2024 primarily due to the costs associated with workforce optimization initiatives in the prior year. This suggests management is actively managing costs through workforce adjustments.

Occupancy expenses increased $8.4 million for the three months ended December 31, 2024, primarily due to expenses incurred by Putnam subsequent to the acquisition and leased office space located at One Madison Avenue, associated with an initiative to consolidate our office space in New York City.

Information systems and technology expenses increased $25.0 million for the three months ended December 31, 2024, primarily due to expenses incurred by Putnam subsequent to the acquisition, and higher technology consulting, software, and market data costs.

While we remain focused on expense management, we will also seek to attract, retain and develop personnel and invest strategically in systems and technology that will provide a secure and stable environment.

The company repurchased 0.3 million shares of common stock at a cost of $5.8 million during the three months ended December 31, 2024, significantly less than the 2.4 million shares repurchased in the prior year period. This suggests a shift in capital allocation priorities.

We declared regular dividends of $0.32 per share during the three months ended December 31, 2024 and $0.31 per share during the three months ended December 31, 2023. We currently expect to continue paying comparable regular dividends on a quarterly basis.

While we expect to continue to repurchase shares to offset dilution from stock-based compensation, and expect to continue to repurchase shares opportunistically from time to time, we will likely spend more of our post-dividend free cash flow investing in our business, including seed capital and acquiring resources to help grow our investment teams and operations.

The provided 10-Q filing does not contain any specific information or discussion regarding Environmental, Social, and Governance (ESG) initiatives. Therefore, it is not possible to provide any headlines or analysis on this theme based on the available information.

During our first fiscal quarter, global equity markets provided mixed results. U.S. equity markets provided positive returns, while most international markets declined amid fears of economic contraction, increasing inflation and political instability.

AUM decreased $102.9 billion, or 6%, during the three months ended December 31, 2024 due to the negative impact of $52.9 billion of net market change, distributions and other and $50.0 billion of long-term net outflows. Net market change, distributions and other primarily consists of $30.1 billion of distributions, primarily from the equity asset class, a $14.3 billion decrease from foreign exchange revaluation and $8.5 billion of market depreciation.

Uncertainties regarding the global economy remain for the foreseeable future. As we continue to confront the challenges of the current economic and regulatory environments, we remain focused on the investment performance of our products and on providing high quality service to our clients.