SAMG - Earnings call transcript Q1 2018 | Silvercrest Asset Management Group Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Silvercrest Asset Management Group, Inc.

First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

Litigation me forward-looking that safe statements of Private let Silvercrest today's harbor begin, XXXX. the make of will pursuant Securities we remind during you call, provisions Before Act Reform to the All statements fact, regarding management's performance events future future relating current future forward-looking of expectations, developments Silvercrest's estimates well are including to or in projections statements and as than other statements historical as beliefs, statements. plans, the about on forward-looking future are projections predictions expectations These events. based current statements and only statements could forward-looking a activity, of results, These differ subject are number are of to risks to there and materially important and made. to performance level cause uncertainties, or achievements factors statements that actual Company's of failure quarterly other a the Form are these listed in management Risk XX, the annual to Factors fluctuations on effects including those Among ended and growth maintain year disclosed with in factors XXXX, implementation the report and the develop SEC, December of brand filed filings the incurrence caption the entitled Silvercrest of Company's for the annual and SEC. under strategy, on with in results, factors focusing factors XX-K net adverse losses, the can expressions. believe, by predict, likely, similar be these words such negative forward-looking or as the goal, cases, some will, could, In words these expect, other and statements estimate, plan, project, anticipate, identified may, continue, plural of future events. predictions are statements based on projections Silvercrest's forward-looking about and These expectations current its update and forward-looking on this assumes statements. statements made made to of date All are these Silvercrest forward-looking as the no obligation call hereof

Rick Hough

more markets, $XXX manage. quarter our a to the Asset growth organic to for successful experiencing Management experienced assets additional net our Silvercrest million first Thank first turbulent you new of client quarter Silvercrest welcome against with very first backdrop quarter XXXX in results much Group. and for XXXX

XXXX. however the represents the in and even over management, quarter market to markets quarter assets to ended quarter net asset billion firm. Discretionary the or first $XX.X better increase for growth, the quarter is of $XXX mark straight quarter. break volatile firm's quarter which influence under due organic Silvercrest assets first an tenth of declined more million $XX.X the in XXth billion $XX The excluding of total of the fourth from

the create Our growth. capital clients XX% quarter in shareholders initiatives. growth firmly Business. for excess to record high-quality term the year-over-year the grown such that discretionary use business new assets Silvercrest funded new Chief Outsource strategic will as our initiatives intellectual talent and believes continuing have continues our a generation we end. to our as in its business reinvestment by next our have grow invest value Officer and longest in and previously of prepared Investment with to of We're announced our capital Silvercrest

Silvercrest and game to the which active with in against allocations. and in had best-in-class backdrop asset are strategies cheap Our walls as the our management, to industry differentiates beta firm cookie-cutter skin performance investment professionals value real regards successful approach our

assets Cap about billion search institutional Value being introduced capability, which network opportunity our as providing clients SMID compelling with offering our and the to We now and have institutional the a competitive nearly marketplace is we remain expect opportunities. support high as in We're well to traction and more marketplace to performance now We client new prospects. firm. enthusiastic finding to in X the committed institutional

Gerard take including to then to financials the firm's in current to evaluate culturally the possibility is the that improving to Silvercrest professional questions. organic geographies. it With talent, capabilities discuss growth, expensive, acquisitions you. complement firms to competitive continues that and expand investment we'll and and environment selective While over new M&A I'll compatible our Thank turn Scott

Scott Gerard

Rick. Thanks

compensation quarter AUM $XX and period year. to the increases period of increase million. Expenses XX nineteen income to corporate this an at giving non-core items during of result last of expenses tax And totally adjusted addition restricted primarily Adjusted March salary EBITDA shares $XX.X expense experience in earnings XX, Class increase which the telephone income an expense March to share. increase and period because the million approximately benefits as of increase dilutive, This the These share. a driven costs. XX% net we Class outstanding net Comp as for general and year first adjusted The reporting approximately by by and quarter of to equal increase or same of adjusted for level attributable the based in of million adjusted increased our over income $XXX.X new revenue, the total assuming release and XX the million were and was compute bonuses to expense million was net a XXXX. were year million the in growth for we which million. effect And of portfolio year increased $X.X $X.X quick As and related last in and This as for rate Act. net reporting we quarter merit-based Class of was to beginning of as of A first the sub-advisory of in million $XX notes as A accrual the and referral define this increase approximately quarter and diluted revenue basic amount compared million. shares AUM. the the compared expenses of $XX.X total City revenue was per X last to net keeping increases. New $XX.X $X.X amortization. discretionary compared equivalents management for as same partially $X.X result fees advisory quarter. per per at for last for first used Reporting a quarter to approximately for giving was for approximately assets expenses for billion was the net was year. the this without increases which income Class year was result past were year per quarter period same same quarter, earnings non-core million without income look XX% of from $XXX.X increase in for Cash EBITDA shareholders the XXXX The or increase for stock decrease last quarter consolidated unvested for AUM approximately XXXX the of basic of million first a cash approximately and income and million at year. and Also of non-recurring Silvercrest XX.X% at actual result of Adjusted primarily consolidated were end fees payable per B October, the of both Adjusted as depreciation to and December year. the March by fact the and the Taking the $X.X outstanding for to in items in of define last at income and XX.X% $XX.X or in of the Reported and for A systems compared first share share. $X.XX lease revenue as XX, sub-advisory $X.XX and million quarter compared $X.XX the Revenue as adjusted in was $X.X EPS to to this administrative $XX.X first XXXX. related offset to earnings for the is XX the billion. of the periods G&A effect costs, end Tax and last this and a diluted $X.X share Cuts comp quarter approximately in divided primarily increase and York March equity or due our million to end Jobs $X.X increases non-recurring December occupancy represented $XX.X $X.X and had extend the million X.X as by was of diluted as revenue this million approximately the disclosed and basic primarily was we XX balance and or $XX.X year represented was expenses quarter to XX% this January of driven sheet, period in

a Lastly, $XX.X total approximately remarks. stockholders' concludes it over March equity That take XX. turn Class and Rick Q&A. we'll was I'll my A to

Rick Hough

first Thanks very and much in Thanks. Scott. now taking company for questions general. We're our quarter

Operator

question from O'Neill. first Sandler Disdier is Andrew [Operator And from our Instructions]

Your line is now open.

Rick Hough

morning, Andrew. Good

Andrew Disdier

morning, Good Scott. Good morning, Rick.

Scott Gerard

morning. Good

Andrew Disdier

good value this sounds with first, traction there So it product. like is SMID-cap

just the opportunities product? would to new that So seeing with you're be of you about talk types able

Rick Hough

Sure, yeah.

only flow platform very placed recently of in UMA had And accounts the the SMID-cap in So platform. quarter, small category. part is of into was million the first strategy. cap That on our that XX significant a growth we been

with on our to a now the an for Silvercrest really gives we're market like investors start institution and a who their fact to moving it up cap SMID-cap allocating new I'm the performance So it just that. bit. and option

and excited that there. flows to the we're So that about about starting see having we're

to SMID-cap Secondly, income, the marketplace as we're consultants. institutional cap And seeing like our equity bringing we're focus value there. to movement well large as in

that several searches as in we are SMID promote We to continue strategy.

Andrew Disdier

oriented by there Great. poking institutions, space, you could really to we're so know for I value value then guess from products. some what larger anecdotally the And hearing, looking consultants around be

aside well? about strong a So bit I you pretty SMID, sounds little from other it could products up the there guess you know like talk with as

Rick Hough

Yeah, absolutely right.

performance team some provides the in great should precisely absolutely, the We our on cap So we've service reputation client small would. with institutions the has say as everyone told our that we've we what delivered I equity so given really clients, combined marketplace. excellent given

good selective in us obviously for puts that so And stead searches.

focused have we multi-cap not I've Silvercrest, have cap, income, equity institutional. high more net we worth we large we that's cap, small cap, As we we SMID have value, have have at before, have mentioned a

equity them a larger possibilities sponsor a I'm it's hearing in in Yes, so is SMID-cap to say the marketplace, cetera. well equity space focus proud say more prove the have in you because long people we're get performance place got constraint well interest that equity large In the on search and given advertise the general general obviously when that's small And for bringing for value we that delivered very our we that there. should we particular is announced good environment cap key in I the out now, SMID-cap, And the to general, its normalized value environment managers That very space markets, value as and stake. know we're in would particular. we've struggled, rates et value. that we've in core slow all steps right focused value is but remain have closed And now institutionally as particular just income. mentioned value

environment So and it we kind candidate a search record position as because our I would space. And RFPs opportunities current of no of will semifinalist moderately see bit we think search. that to advertise strong our finalist benefit be I Silvercrest, is is track the for will where insight of managers pipeline strong market which note but or our a as mentioned On is we general. to which at through in that a actionable I opportunities kicks I'm only very slow with we're we say the only look pipeline at which pool addition long think more But difficult in up, month for that six a period value however, there. expect, good in a

the pick-up strategies. advertise only definitely is for well value activity yes, slowing, So invite a space seen in we've

of end bit the pipeline XX% I a has you of this about tell will our to a up but quarter. the from So story entity picked

Andrew Disdier

the that's to that products, equity to the Got it. guess the And pipeline correct? incorporating is I specific too? Or then OCIO

Rick Hough

about OCIO. that's that I sat was institutional separate flowsX for equity opportunity our - from your value strictly straightly possibilities since the No, the about and question market strategies. was are

Andrew Disdier

OCIO, just point wanted guess to just it, on the about that initiative? Got clear. And progression curious on I be newer though, any

Rick Hough

have any new we wins out. win don't to Yeah,

XXX product after marketplace have really team, value to great before, strategy get took others take to in us we pick-up. it's introduce very Japan year the institutional but that in reception, We're to was said assets States. for client in the noted know aspects equity saw a work and institutions we XXXX. we're announce bit a we've for there's OCIO searches and as group several nothing and institutional built created in in traction just a management pipeline, million or do that the that they do is new starting should around good responsible nice to for did and time when in on built you As where a in six team, behalf yet our object XXX hard. that working initiative some to and be we institution. we It under of push somewhere time United the going getting non-discretionary of for would the marketplace The Japanese the of the get what's our the which It consultants the million and

that not is OCIO and put a getting our strictly institution we supports using the provides have team and but is recognized. So another base definitely it That capabilities capabilities. mandate knowledge list to mandate, that that yet on our here

well some just we're forever, we're excited wins. get going to patient marketplace we as in and have just be until get really So to known the

Andrew Disdier

you would of proposal takeaways provide then Understood. be or standards on a I conduct? any SEC's the backdrop to some on of able front, regulatory Understood. from guess from your And color broader the

Rick Hough

did I'm And it back the attempt my because to broker I business kept industry providing in was what's and which have has would what for for we standard, IAs the regulated in a lines lobby representing in I'm for environment a be are dealers. they Washington the doing we particular terms on had bring and here. Association group which sales and hard meant business only just further It's it good the board it a to the by about standard. terrible I say be blur change. in much organization risk improved dropped the fiduciary the dealers of screening support strict could And Washington, in I hopes Advisor wellspring the in very shouldn't not hierarchy is regulate into So, FINRA, Brokers a SEC years to in general directions, broker to improve should how standard they down. due situation. dealers its it regulatory be and has in successful how have fiduciaries because the are our That RIAs. redefine our not in the few for I am and rules have the advisors between providing and we an and broker what was going a changes examine I the particular pretty the job versus the was example a our of discussion that go broker think changing. precisely think regulatory self-regulatory role involved of down think beating And first-in I and that dealers were see actually to a was how And to fiduciary right clients circle Investment myself how in and one. to or involved In we world, particular last to A happening that. effectively on can fall, seeing to someone the relief compensated without and them. not first-out I better for water to you who were the world, for it's don't doing of to a focus be and fiduciary strict dramatically watered have in environment examine square RIA of by been stander. in who there compensated ago, by be changing for product - is and and that's to to a live fiduciary RIAs through. they're And shifted whereas dealers those I

Andrew Disdier

the got I Thanks for all guys. That's taking question today. Understood.

Rick Hough

quick, Andrew. very was That

Operator

would remarks. At Richard for turn back like call Thank to [Operator no further CEO Instructions] Hough, I'm showing questions. to closing the over this I time, you.

Rick Hough

joining made four XXXX. past stock had have us if to Great. the of the and call questions to to business fifth of sell about the give to we've that's and on important of the There very this think especially growth what I to built. have more when that we've verb, have summer and first New and to tightly important and I'd been is Thank I at a had that to don't much A thanks likelihood able we try where and make and published like Times this at hard nice the in get article are being has very the progress their to I'll very public And that clients. take years. company fur. The to you the for companies extraordinarily to they of we've company success marketing us But York over talk it's investors has lives on that it come we've was replicate the it's first the points the remarks culture company been it's lift quarter the have going I a for half an very anniversary I here, group quarter. it's the worked everyone to service say loyal knit behalf. something the in lot culture, concluding

of haven't how numbers It's there we've we but and you super a with suffer. these working among of that and numbers lose section camaraderie hedge we our and progressed, calls it's check those the And look will linked we building to the our on the hard it, if people under going into numbers of people about regards important, seen it firm kind out, culture, have are on those little the Silvercrest. through are are business. that the you most at News spent behind the and were front culture our gets If website the page should

you'll capital that strategy regards new initiative. our making achieved we fact new have you Annual definitely grown check the grow course debt, to we It's on as to done very the complement that business, the high to Letter which front. we've have was what And see with be shareholders announced adding and already will company. we deploy time of behalf of worth teams management portfolio out comment grow investments to proud hope start levels that base behalf of more My do investors of to in the OCIO the to in further time firm. really which we're the on capital potentially I So with intellectual of it's net low second

initiatives grateful to what the of really for continue for that competitive do have to we our marketplace. taken understanding shareholders' the support, I'm so company in And growing our and size we've company extraordinarily

a you, thank is well. quarter. our to forward as updating Thanks of very the because that So I contribution much. And to next success every look one

Operator

you gentlemen, This in concludes for thank conference. your and Ladies today program. participation the

You may disconnect. now

Silvercrest Asset Management (SAMG) 4 May 182018 Q1 Earnings call transcript