ALTI - Earnings call transcript Q4 2023

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Operator

Good afternoon. My name is Bow and I will be your conference operator for today. At this time, I would like to welcome everyone to AlTi's Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions].

I'd like to advise all parties that this conference call is being recorded, and a replay of the webcast is available on AlTi's Investor Relations website.

I'll Relations over for time, Head Lily this Investor of AlTi. at turn to things Arteaga, Now Please go ahead, ma'am.

Lily Arteaga

Good afternoon today. call to everyone on the

Joining earnings invite Michael Yarad, me our website Investor are CEO; to of our this Stephen view updated www.alti-global.com and presentation. our Relations Tiedemann, section our including to you our We at visit materials, the CFO. afternoon investor

of remind the statements like to everyone Private meaning call within be would statements during that Reform I made Litigation forward-looking may deemed the XXXX. Act the Securities certain of

words important statements as future, identified Forward-looking will these and be by to actual can are forward-looking update plan or involve may, believe, could and statements. assumes statements. the expressed those or expect, use estimate, to uncertainties, statements of differ from words. Because known forward-looking such by obligation factors continue, results these implied forward-looking any no similar and anticipate, AlTi both intend, unknown there cause that responsibility materially or risks

this non-GAAP can financial include our filings. measures. references related call, to earnings SEC reconciliations found in be may Full some During and presentation our comments

I earlier today. investor mentioned, updated presentation we As filed an

over With to like turn the Mike. that, call I'd to

Michael Tiedemann

Thank you, Lily.

joining for quarter call. today Good and thank year XXXX afternoon, everyone, you for fourth full our us and earnings

the shares and, through as successful registration increased share float our credit well we the warrant AlTi company. public a of secured a companies we a together X the brought a pipe the liquidity In was $XXX in we for January in listing business exchange. with the as completion the quarter, pivotal facility which combination, completed closing, second team. million and XXXX year of of a and as last year, Concurrent our culminated

of also $XX and We that cost a we in process, comprehensive structure. identified Through savings million annualized actioned initiatives. review rate the newly run operating strategic combined conducted

savings XXXX QX these results. will realized fully that expect cost We be in our

Management Italy, increasing Wealth alternative have across This expanding both and managers markets, Northern uncorrelated key in our continuously included segments, stake of key As footprint our their and business we transactions our completed which outperform and in benchmarks. Strategic a strategies, firm, of Alternatives. Singapore like

A CWC. Wealth this priorities. provide announced to to strategic closing, we $XXX investment transaction and or AlTi Capital ago, few execute from a on Constellation Upon with X will Allianz weeks up strategic million our

We have momentum. will lead pipeline relationships believe robust a actionable M&A to these significant and

transaction our have partners which of a depth to talent, We operational growth path and resources, expand given through clear bring. financial client the these new and results. review organic after network we on this I'll wins more expanded

million, and our growth reflected the driven In year, robust the In segment full grew and in revenues total Alternatives year Wealth $XXX quarter fees and AlTi were the of the we fourth XX% our for quarter, event-driven advisement XXXX, and we grew revenues by segment. advisory for by in assets in Strategic organic performance performance of portfolio in fees. the client the The recorded of from in assets strategy that mostly million. of recurring primarily Total revenues management fourth incentive Notably, $XX under generated XX% Management. management year. business near by XX%,

the $X in net the to further loss to impairments our invest year. focus of in core businesses loss further of our Despite XXXX. significant do work unprofitable a us, revenue by XXXX operations million We demonstrate reported Strategic our full decisions the not exit taken as results, non-core strong we of behind primarily in results recurring Consequently, restructure for these impacted were million anticipate year segment. items, or GAAP that strong topline operations for adjusted is is Alternatives transaction-oriented was one-off $XXX fundamentals. to for our much and Normalized streamline

for power and our million our demonstrates $XX We Quarter-over-quarter, the for adjusted in quarter adjusted diversified Strategic was full performance year, the fourth fourth believe quarter, million EBITDA of Management EBITDA the million. $XX to platform the $XX improved Wealth Alternatives. and across

record by a we risk in asset market resulting U.S. In as the of had we year asset that given organic had driven would an where U.S., economic a performance growth on view as our achieve well soft Wealth landing Management, the the bias and integration growth Lugano-based from existing multifamily increased from a Internationally, office. of business stake the as efforts in wealth increases the the as our development of legacy segment the Singapore combination our acquisition clients. benefited and businesses the from well

the quarter year positive segment of fundraising achievement. robust benefits year. positive a up performance This healthy quarter only performance fees strong generated in the of a for from but X% strategy, As incentive consecutive also the for event-driven the results is the fourth This and anticipated, Alternatives the resulting Strategic remarkable creates XX.X% for XXXX in our in strategy, performance XXth marked XXXX. momentum not which

investor of credit strategy event-driven as Asia in well interest our as We strategy. are by the indications encouraged

credit traction index, strong its relative markets. high-yield growing recovery that and compared expectations a to region Asia Our the depth gaining strategy performance in the the of is of credit with initial Asia

investor arranged important activity several estate, GlaxoSmithKline an rising corporate project. given will the in repurposing after purchase rate and abated London in Additionally, restoration the report which pleased our be real very environment, real group, by private of estate headquarters of that to an I'm quarters team the

will in in the management fees role fee quarter forward. deal, we importantly, For going the we are on our receive origination and recurring structuring the

initiatives through With our focus revenues, as establishing on reinforcing year, core on practices growth operations last improving on milestones confident be solid to of and in achieved legacy action. the taking integration segments. will centered organization. across accelerate focus those entities, This operational external summarize, will strategic best year XXXX, We're globally that us To the inward profitable hold, inorganic was initiatives. our several streamlining and businesses, the our throughout recurring included enable organic foundation our we our of both momentum

CWC, announce to diving investor ultimately to raising will we in and a This include interests be year recently a relationship this segment increase transformative the priority evaluating which to markets. ultra support with net float, become $XXX targeted a global AlTi's strategic capital attracting for To to long-term worth X the up million, Allianz key end, high policy. These independent will in that the our profile total were investments, community institutional leading multifamily our investors. transaction strategy Another opportunities pleased with and will office expertise alternatives.

the growth of establish capital. fortify execute through acquisitions services markets partnerships on enable relationships expand experienced financial and AlTi's and players in global the We to well-respected believe key sector. in we Importantly, strategic and can long-term footprint AlTi's global this disciplined deployment with

expand deepen and markets. AlTi's to within our reach current plan We

enhance service seek Asia, in multiple to offering across where also new existing clients can client as States, to our We grow United enter the markets Europe base, we jurisdictions. well as and our

to a uniquely global with presence XX single-family As operation local positioned serve AlTi centers, offices. across is financial

administrative resources, overall significant investment the who deal families be partnerships and significantly enabling will provides and flow, Allianz to Constellation. while large with platform Our by costs. the enhanced leverage These benefits benefits reducing infrastructure, to only teams them serve global scale, our by

bespoke diverse There appropriate, across through with partnering on revenue across a larger opportunity growth solutions. more opportunities can impact client opportunities structure solutions Additionally, globally Allianz base. lead the to to tailored and, and initiatives. organic clear its our a AlTi expand generation co-investment we alternatives, when expand and will investment capitalize is strategies

accretive strategy. driver anticipate be expansion and build a transaction will of fundamental existing platform. growth off our Finally, We as go-forward topline to future margin M&A we will be the significant

consider always our of continue capital enhance track record the AlTi's and differentiate marketplace. I in it as we've the profitable This current fit These positions from competition a to us take partnerships attractive evolve. to mentioned, pipeline. client acquisition and to target's to wealth. both approach infusion operational AlTi's As demand We strengths and M&A to criteria our positioning growth firm identified the deals disciplined across a and robust of profile, footprint continue as the pipeline alternatives relates further

As $XXX projected the we've $XXX made be of close million the million, weeks. to to of CWC, is indicated, is coming total in which by investment

term. executing in As we on pipeline our expect to the such, begin short

in that manner. a you on update will We timely progress

was an for and what year accomplish important can This excited in organization, we're about XXXX. our AlTi

deploy for strategic positioning will forward partners, growth, are our strategic priorities profitability growth and capital we our platform how footprint, onboard and success. demonstrating accelerated to to look global value. we lead We the long-term shareholder As notably, expand sustainable create

over the provide Steve to of further results. to that, call financial turn I'll details our With

Stephen Yarad

you, Thank Mike.

come. stage importantly, Last the XXXX year, to we already in achieved many milestones for that have in continued growth years the increased profitability set topline and

successor. guidelines. the Wealth results, the predecessor the to successor review regulatory the filings Management we and I companies is by AlTi case, predecessor note comparison is presented In as between company as in results our a are want required Before the and Tiedemann Holdings accounting our

quarter-over-quarter not are primarily results year-over-year will and comments the the comparable, such, on focused my As directly be comparisons.

fees of higher in Strategic and reflected our realization incentive Management origination and driven primarily $XX of incentive fees up Wealth fees also in AUM strong million management XX% topline and fourth quarter, in the in by AlTi quarter The in the the driven growth quarter the the quarter, AUA by revenues segment. the in our Alternatives increased Alternatives segment in in our generated Strategic performance fees generated third segment.

diversification advisory Given recurring revenues which management incentive of strength and XX% the XX% we results in approximately our in were which in were XXXX quarter. highlight million, the total strengthen recurring Full These $XXX reflects fees. XXXX. continue revenues from anticipate significant the of recorded year fee to revenues and quarter, fourth platform, the of will revenues

assets in net $XX incentive fourth and quarter in in growth the X% increased period. market recorded Wealth resulting Management wins reflecting as the in segment X% robust well from Revenues as million performance our fees client to sequentially

was Wealth full the Management XXXX, year revenue million. $XXX segment For

year, in respectively. XX% quarter recurring XX% the for the were and Importantly, and segment revenues the

In of segment London with our compared related associated fee $XX largely event-driven fees also an to million QX, revenue crystallized strategy. increase the The $XX Strategic driven real results totaled to deal quarter, in estate the prior origination segment, quarter. million to contributed the by the Alternatives incentive in

XX% distributions was topline from was and full the year of XXXX, performance from alternatives our including million. advisory recurring segment management For platform. Alternatives this revenue Strategic $XXX fees,

topline progress loss LXi, $XX net to Normalized net incentive REIT, million. pleasing adjusted traded well related fourth with segment, $XX impairment Strategic the we results, of $XX items, of our charges fourth completed recorded in of our nonrecurring. quarter which LXi's earlier the Alternatives management contracts which accruals, to $X U.K.-based as as of our month. other million LondonMetric, was the million charges higher the termination reflecting expect compensation the in in the with loss this connection one-off and expenses, impairment publicly a certain million we in quarter, was in be Despite merger for for other

million that depending payment terminate merger, and the to management reflects asset no longer the reflected potential AUM to for prior like end the contract that at charge $X.X would following the for contract and in received LondonMetric's agreed our up quarter. consideration the billion March, carrying the to year-end, which, between X performance. on recorded we future million I value with connection of will intangible difference the transaction. of LXi management was early sale essentially to In to contributed the $XX initial assets the of recorded future the GBP the payments impairment The note be of in initial at first

adjustments to and million carried recorded estate $XX resulted equity being charges other certain investments, to interest and with in which impairment amounts business, several other were non-collectible. arrangements reflecting partners, receivables our Further restructured private related recorded method real of to

compensation, the for costs, an compensation prior expenses expenses incentive certain noncash million. event-driven attributed strategy. recorded to higher and represents deal-related compared the performance strong primarily $XX expenses transaction largely the Normalized by fourth of accrual quarter, increase the million quarter were and quarter, and depreciation This related to in which exclude the fourth driven amortization, to the $XX operating severance of

normalized expenses by expenses, lower operating compensation were million. $X Excluding

$XX million, the compensation $XX of million driven compared fees, to accrual. was EBITDA third quarter, by related incentive adjusted quarter the by Fourth increase higher partly incentive offset an

adjusted $XX EBITDA XX%. Our year our million, in XX% was our adjusted EBITDA margin basis, adjusted and full was EBITDA QX. On a margin improved to

our in from expect and see hold and the take GAAP CWC, leverage growth those EBITDA. drive results strategic including cost investments greater and we and As to improvements X initiatives adjusted impact of by Allianz resulting in XXXX, savings consistency operating the to

may obtain, are Allianz is our months targets is financial approvals, several any Given after to which reserving that this regulatory year that subject later the until X to transaction we updates investment closed. to take

it turn concluding will back remarks. that, With Mike for I to

Michael Tiedemann

Steve. you, Thank

are have We the of components our entered done, the we XXXX deliver valuable several AlTi where in get key to plan. established, long-term I'm executing and since combined particularly I'm us to our we've growth work to profitable listing our appreciate the come. with they progress, heels of incredible today. with confident to the momentum hard proud strategic all years that on position of team this of partnerships

our client with in thank ahead. day you We're to want and to working who base grateful we global out. support day team your Finally, for in forward trust put in year the their and our look

With that, to we'd questions. for open the up like now call Operator?

Operator

go Burdis Raymond James. [Operator of first afternoon Instructions]. to We'll Wilma this

Wilma Jackson Burdis

Good the wealth the attractiveness deals, relative of management potential as this plenty of afternoon, versus everyone. Could you're discuss going management you year? asset into deals especially deployments

Michael Tiedemann

Thank you, Wilma.

are cases, the So in important lines. expansion in geographically, of product offering in both it's first there And all, strategic deals and some highlight both a of the in strategic some accretive alts. of deepening business case offer, to that they cases

lines. their relevance terms in vary for business the do really they of So specific

that market already are from years in that in standpoint wealth, believe we're businesses of valuation look jurisdiction a X we a investments or that growth when new from in. -- we them a -- be to be you deepening we that be ranges or that we that believe able the expect making grow, will starting collectively, these can to X a whether the driven All to forward these we're of be

imagine. so -- And they vary you really based that everything them then But valuations all would bring of on component. the

So is well. growth that our of of margins business, prior business ability as to scale then perhaps the anything going and margins that And business, strategically our drive the on forward. additive view rates, drive

Wilma Jackson Burdis

touch guys to you decided just on Asset of name maybe why it. Got the the segment? change you could Management And

Michael Tiedemann

of more wealth trends time have segment we are been great of long-term pools that is them capital feel areas. an have foundation, tailwinds, these the but ultimately the related Alternatives want investing endowment in any investing these We with -- believe be from much businesses are lot in to be marketplace would Strategic also underlying of that be are segments the and we standpoint a managing. a will the that multigenerational pool of family, investing capital long-term to and be large whether in a of there's

oriented -- targeted more this but and more is it alternatives. so around And specifically

more that much in So labeling our that we of with felt was business. tune underlying

Wilma Jackson Burdis

guidance the changes about given going bit But bit that operating this in year little a the know mentioned talk maybe going little guys talk bit a on little you tough with the I a be investment. to for outlook Could XXXX? it's you on give expenses have about for to Allianz that all trajectory. you the

Stephen Yarad

It's How Wilma. are Hi, Steve Yarad. Sure. you?

Wilma Jackson Burdis

you? Good. How are

Stephen Yarad

Good. Thank you.

of terms make So in look, we're expenses, continuing progress. to operating

implementing year. in next we've As we million of -- and be half think savings $XX we through that's about in working fully annualized deliver talked realized on -- third and an the basis, will of cost before, to of year the are the second next quarter plans that

formulaic down was primarily a the on revenue-driven -- In formulaic terms revenue with. of in but operating the pleased which we're really this Comp expenses quarter, were is normalized business. event-driven based little the up, excluding compensations, bit, compensation

that, of bit which down little sort quarter-over-quarter, we for were pleasing was us. So away a from

to So as types and of those move that things, opportunity on think reduce we to professional continue operating to expenses we further do we continue as work move forward ahead. there's fees,

Wilma Jackson Burdis

Could segment? you in flows bit Management net about talk little the the client a Wealth

Stephen Yarad

Sure.

probably up it flows some business, areas. flattish, we around certain market-driven, the quarter, X% quarter. fourth in I So was U.S. to good the had pleasing of some Internationally, for in flows the really think in but X% sort

pretty quarter-over-quarter. So much by driven overall, pleasing, market pretty still performance

Wilma Jackson Burdis

you. Got

big performance market not of quarter? the volume is in a So wins mostly, necessarily

Stephen Yarad

more right. it's Yes, market-driven. That's

Michael Tiedemann

to billing into prospect take and asset the on and have then does you moving Wilma, time. clients assets conversion process Important,

take good verbal in prospecting have standpoint can the and and you fully a materialize wins of tend clients the very moved with So quarter does that to from time. built. and contractual, to that then assets some It

XXXX. very the we're to with that go have and as happy globally we continue the into that So pipeline opportunities we we see

Wilma Jackson Burdis

some just highlighted estate. think bit that? a into little impairments you the on were? And Could What drivers I detail guys on you more go real maybe

Stephen Yarad

Sure, Wilma.

partners, down been those restructure also as simplify business further as led some get the has try of write some as work need half. some -- with all fourth investment. equity carried restructured, forward to arrangements So the but we of to wouldn't wouldn't and they method second particularly receivables, the XXXX, in going it quarter, the business be and we And degree recoverable We've we some to into restructuring. the repositioning to which some arrangements did an the got throughout interest and be necessarily through

really a X that's the results is over we on $XX those that that think us So that forward. be lot of million think a so, And on impairments quarter. of going about we there going and during don't of months was the now. done or the We've items that of most past feature X work to behind

So the we and beyond. first in impairments of wouldn't expect those the results quarter types in

Wilma Jackson Burdis

the you. Got the color maybe environment that bit just a merger on M&A, arbitrage little for just the outlook then and fund And and give of the business?

Michael Tiedemann

Well, amazing. XXth worked team the which performance, time. its for And referenced I is amazing a really the strategy event-driven year together completed profitable very of and long that is has an really history, it just

midyear be environment projections and there's deals that last having have I a are environment announced, least the good year, terms of interest businesses. for would The at a modeling being fact allowed is, done in rates level say, to of financial

to then strategic deals able to CFOs teams are begin decisions make -- and move are So people forward. and management

would expected. off are, they historically. than is team been have I average where event start The to Spreads from environment slower the a say, slightly

you and in interference the And beyond up. say, to continue track times, sort which flow of will But continue hopeful regulatory we to would year are I space. at strategy. a it pick some standard volatility So that, the for political that deal the creates will to see

Operator

afternoon, to closing And for turn Instructions] gentlemen, back questions any Tiedemann. [Operator like we appears it you other no comments. have to Mr. this things I'd

Michael Tiedemann

you, might in invite have to updating look our you a first or Thank for late to again. with Okay. you, you operator, Have and we're to everyone, that any further great And us follow-up XXXX forward quarter contact dialing you call. and we Thank you schedule And excited on for weekend. a thank Friday. any calls. questions on

Operator

And so you us. much and like gentlemen, a today's Again, great We'd to Goodbye. all ladies will conference evening. that joining wish conclude all for you call. thank again,

AlTi Global (ALTI) 15 Mar 242023 Q4 Earnings call transcript