ALTI - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Sherry, and I will be your conference operator today. At this time, I would like to welcome everyone to AlTi's First Quarter 2024 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.

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

Lily Arteaga

everyone to call today. Good on morning the

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

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

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

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

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

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

Michael Tiedemann

Thank morning. and us you, joining this thank you all Lily, for

catalyst quarter years will XXXX first as AlTi serve and The the in quarters to a of come. for

revenue groundbreaking During from importantly, recurring further focus growth noncore to the streamlined assets quarter, our businesses. established progressed strategic stable on away we partnerships, strategy, and and strategies

as you XX last through traction both our days and see across M&A our can immense have pipeline, X operations ago. We than announced deals, core the less call since we our

progress we long-term towards more details on I'm QX goals share and initiatives. our our Today, making going the results are and growth to

billion. by past to and assets XX under we LXi, our $XX have over the Excluding advisement XX% months management grown consolidated

of In the first AlTi revenues $XX million. generated quarter,

the fees. XX%. net $X and We Importantly, quarter XX% of from adjusted million, was the the income million, EBITDA reported EBITDA margin adjusted $XX revenues recurring were in of was

year, announced largely the we be enhanced our our performance market further boosted XXXX. AUM which East and investment our In throughout growth reported boasts adds in we by the of April, Headquartered acquisitions Advisors, team Management to in will billion last Management, Wealth as XX% key we growth End an AUM Wealth in segments. East York, our In experienced across record densify closed platform. integrate a regions the strong acquisition acquisitions. XXXX nearly New that and to Turning of End $X U.S. in operations robust announced strong recently This will

high demands ultra net far, East retention and holistic of families and with been complexities around AlTi's growing foundations. End the understanding changing seek firms long now of wealth We've can a exceptional investment worth resources our relationships East Chief trusted Officer on capitalize enhances that AlTi share their with End and client to as industry-leading and clients. East Both to benefiting transaction Global Outsourced market. from admired pleased Investment has so long-standing and begin access and the we End, clients Additionally, reception management OCIO have and solutions. the the approach their or deep capabilities this they at team

worth within Envoi, Envoi our expands the United segment. Minneapolis. in region and of operations cultural after earliest we into record close, manager immediate Midwest wealth a our ultra acquisition conversations, the announced a the the we worth high AUM based From of has alignment Yesterday, net with felt high Envoi track team. billion multi-decade the the ultra $X States net

comprehensive service look in fit global to look size its domestic growth firm average deepen and base but the all Envoi's forward is We client has to a key only rate AlTi's retention its our XX%. offering. doubled as not has grown through Envoi client footprint while ideal XXXX, supporting since maintaining client of we reach, Additionally, markets. perspectives an

and of Following AlTi's execution the strategy. listing, in our our these the reflecting XX% organic nearly will growth successful asset of since net acquisitions, management consolidation inorganic wealth be growth

Importantly, while of they past noncore from firm towards the significantly reorganized and our all replacing year. recurring line divested contributions the bottom-line line assets top we've and asset in core composition strategies the revenues,

the to operations week, closed in firm to remaining in U.K. international worth our the ultra the team the partners, platform XX% acquisition bring On onto We're of Pointwise front, stake in of wealth this earlier the delighted entirety deepen management Pointwise net our independent AlTi the an and based we high London.

the that sale recurring These sale subsequent assets previously of close revenue receive businesses. announced previously sale proceeds efforts to businesses and private transaction in regulatory quarter European-based streamline, service I'm Additionally, of approval report and focus were international is pleased end. from The the businesses our to were on service our offerings our approximately wealth to reinvest and operations office and and robust core the a result our operations trust divest to investment for and $XX our million. held

by the an comprehensive updating year region. than future calls. out professionals, our net in seasoned Dallas we growth Based These businesses. months. the efforts as of our organic this the pleased AUM fortified This central on business business also robust the Internationally, we'll and look on services at domestic and over to well forward and initiatives, progress welcome Joyner, years high as past results on from clients. client inflows portfolio Richard U.S. award-winning delivering experience, We an performance we ultra office, XX% U.S. you about the XX new with XX more for growth also with business, are wins excited were development the team and basis had from we increased of strides worth as family beginning organic very strong of driven initiatives. on to collaborate key the our of office we're our with both international closely The great Envoi and made are our we've Richard talented prospects has attracting this adviser

businesses investment sale opportunities. flat up our bring top quarter-over-quarter despite line business. innovative real the quarter clients the segment's made LXi We our broader private of revenues estate and of initiatives of Strategic the Recurring Alternatives and certain to to advanced XX% the Turning and essentially successfully in repositioning our were repositioned new contribution segment. have

efforts million our by in streamlining first quarter to significant decreased the same costs. compared $XX the operating in in reduction in Normalized segment-level resulted expenses Importantly, period XXXX.

quarter. we Our up uncorrelated To tech positive robust, companies. the opportunities strategy, private differentiated alternative performance innovative our investment platform in within of the comprehensive tomorrow committed collaborate We to end, performance of that The was the and are to announce our on a equity Hiro exhibited remain strategies, our in services growth strategy and to foundation our with to credit quarter. stage providing solutions. particularly leading investing Asia market access X.X% excited of first investors range partnership technology in

exemplifies environment We ecosystem. produce the nature model believe and We're to platform, platform. capital this long-standing to We valuation our current set compelling venture partnering set capitalize stage our AlTi. is allocate dynamic have to of but the returns actively able complementary of with of successfully also leading passively a partnership partner in growth tech on managers clients opportunity benefit uncorrelated latest to the fund for his the not only and across and names

impacting including continue a capital of identified returns our the on which As with to we based we attractive will the goal megatrends, strategy, allocate environment positively blended society. technology, framework provide disruptive execute and for a

These global AlTi. our for transformative investments targeted up in my our like $XXX or Allianz the expertise are worth multifamily on the up with Constellation I which were high leading the Capital net I our announce independent and Wealth for to would As on office advancements to enterprise million with the ultra significant We wrap comments alternatives. support segment strategic we've X highlight CWC, which become to progress, to strategy. made pleased totaled a strategy relationships

later The CWC's investment this installment $XX we agreement first anticipate million the million half the our XXXX. March, closing to totaling with $XXX second month. Allianz closed in We expect remaining of X in of and fund

and As to CWC management ultra high growth is sector. be wealth with relationships partnerships disciplined [ global in enable as key partnership our to to capital. these to helping our proving designed enhance are and already fortify AlTi accretive revenue-generating and expand of to to and valuable deployment in worth fuel AlTi net through The footprint the recruit markets we've to ], attract acquisitions immensely they discussed, both talent are

and With transaction scale global respect to client relationships, the solutions strengthen our Allianz, this expand team, grow that and platform year. we're client of to network opportunity excited when closes later experienced by from and benefit broad

our leveraging expertise the been from recently capital our as and side, announced demonstrated the transactions. by partners, On M&A we've

acquisitions to extremely leverage. integrate platform, these our our margin be This expansion into augment base accelerate an As considerably asset they time will exciting existing AlTi. through leading enhancing operating and is we

quarters and business we profitability our accelerated across We drive the have clear come. and in momentum that can believe growth to

over financials. call you to the to through our a turn I'll Steve deeper take that, dive With in

Stephen Yarad

with has on Mike. and quarters Progress our Thank recurring our to partners the the on for growth strategy streamline to portfolio as core businesses. reposition our execute continue we you, long-term to come revenue for positioned strategic and AlTi

$XX AlTi the first quarter. million generated in revenues of

While compared during were recurring essentially management period. revenues the this decrease this flat fee quarter to reflects a XX% first XXXX, of

of stability with of pleased completed the quarter. during management LXi the was are the We given fees the sale current

after which on management year revenues the our public fee prior nature was quarter a quarter-over-quarter the basis, predictable management the of to were addition, of XXXX. fund, related Further, $X million estate also from fees approximately stable, included a In the results X.X%, of period second real reflecting deconsolidated business. up recurring

XXXX, AUM quarter period. growth our to compared XX% first in in Wealth the during increased Management $XX with of first Revenues consistent this to the segment quarter million

Our is as during recurring. Singapore-based our in XXXX and multifamily in performance of Management revenues our XX% Lugano-based by Wealth Wealth of driven office the as stake QX were market increased robust by well asset XXXX. acquisition AL growth strong

by of compared distributions In million XXXX, totaled of first to segment, compared $XX XXXX. our quarter Alternatives in investments a and largely to assets in million the lower driven decrease Strategic revenue from reduced QX, quarter the same $XX

management in in As Compared of down, discussed sale of estate, a to quarter, which fee third comparable the was [ despite ] included marginally XX% from management the only immediately fees were real LXi, to deconsolidated prior largely starting quarter related which billion XXXX. revenue from in results the in public the AUM. earlier, assets, quarter XXXX decrease $X.X removed our sequential

quarter real XXXX, compared fair XX% liabilities driven resulted we as net in estate to the GAAP period strategic the in the items repositioning exited Notably, deals. business including and In mark-to-market by due agreement. in higher primarily at positive certain earn-out $XX of loss first value, to comparable million receivable the in accounted a the first and the other net private million income segment in the the for tax $XX certain revenues have in assets decreased or income recurring was for of restructured quarter. quarter addition, were

one-off Normalized first certain related costs, first XXXX. to down income Normalized depreciation for the items, compensation, and amortization severance was and the $XX expenses compared the adjusted approximately transaction quarter, which quarter million. exclude first quarter $X.X operating million, $X million for expenses our net were of expenses for deal-related and noncash to

compensation compensation, initiatives. million cash prior from year the Excluding our $X achieved executing costs progress demonstrating we incentive cost-saving decreased XX% period, in or the

cost remains top Streamlining our structure a priority us. for

would normalized continue, trend As further expenses we expect these downward. to operating efforts

fee the First decline decline of sequential quarter lower million, of The investments, decrease a to of compared noncompensation a the from quarter expenses. largely normalized distributions XX% incentive year-over-year compared to $X by impact first driven quarter in was is the XXXX, was by previous EBITDA lower due adjusted and to offset million $X $X decrease while income million the quarter.

have from note, of our efforts from XX% dispositions to to ongoing fourth improved the intensive platform. higher in streamline our continue operationally XXXX, this simplify and recurring reflecting quarter first operating as the momentum complete and positive complex simpler we onboard quarter will margin businesses a lower that adjusted revenue that businesses XX% in of margins. believe expenses more operating EBITDA We On structures and XXXX, the throughout

strategy. Further, like transaction as East to our on we I execute of the reflects complete to would End acquisition. expect inorganic the provide type East we End detail some growth more

$X payable New of is high worth ultra AUM. firm X-year initial on Beach $XX billion purchase million consideration York they exclusively acquired an in the contingent period. offices for with additional mentioned, U.S.-based revenue recurring serving and focuses attractive have a with We Mike and foundations. As and approximately with in Palm East over an business Accordingly, price clients End net

updates any year I that later to targets everyone to Allianz like after reserving Finally, X would financial until the are remind has transaction we closed. our this

Trust European include completion dispositions. the or no However, longer of year, as of it contributions you Private our the results will noted go-forward think about business should rest following and the LXi from those Service be that Office

East the will in quarter, Both End, third However, results Envoi we and End starting to expect East in going forward. of the at purchased we current quarter, consolidate criteria, we mid-teens low results our to anticipate Envoi. value consolidate starting second strong and of the contributors the enterprise in and to be acquisition AlTi's results will M&A line there are EBITDA multiples to with

As we in recently going businesses. similar that to key are of and accretive expect densify with the being expect we that strengthen divested Mike along initiatives top while components operations, mentioned, [ all Pointwise, acquisitions, to growth markets, Further, our presence our contributions EBITDA produce forward. our will important these bottom-line they core to ]

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

Michael Tiedemann

joining this thanks, everyone, for and us morning. Thanks, Steve,

and strategic of establishing to delivering base. attract As accretive partnerships, ground portfolio an managing see, exceptional products committed our we've expanding in and disciplined while acquisitions executing shareholders profile XXXX, the and expense to to our long-term offer you retain client expansion. growth margin services We're can hit running

focus net worth public ultra the wealth unwavering platforms. other Our segment on us alternative high differentiates and from

to to you updating positioned on leader progress global come. the look and population, are quarters the we with to We forward this in be

call With questions. for open up that, the I'll

Operator

Instructions] James. first with is question Wilma William Raymond Our from -- [Operator Burdis

Wilma Jackson Burdis

timeline Could on to and capital? you please Specifically, about could CWC? talk approval the give by for you for investment the in -- and the us timing for an potential bring process you update the the Allianz

Stephen Yarad

Yes. I'll answer that quickly.

to CWC approval. did -- have apply that they're So really regulatory for separate. not

regulatory million was of was part that of drawn to million quarter $XX be acquisition, East the complete has in of and million forth put So End used the additional in total coming approvals. the Allianz will $XXX that. this an $XXX all

in works So very that that moved is in -- quickly has jurisdictions. been the all works the in and X months. the the several They now in for

that -- year, that in the timeframe with hope we're second it. later, obviously working we're expect occurs it we is the than earlier but of the We -- quarter that in half that third our

Wilma Jackson Burdis

And in could ex $XX was for And professional million run inorganic of the to upcoming around trajectory good fees the can you notables you a discuss about given [ that talk growth? a hard fees, bit little investments It's expenses? and professional say. rate? outlook ] Sorry,

Stephen Yarad

It's Steve.

about first yet good So fee which line as period results trends, you've expenses, we're the $X of during yes, starting least operating is roughly see the in compared the I to was seen at non-compensation quarter we're -- to results, from in the think period million results, -- on professional decline. XX% some some down compared the the the XXXX, to same year, of a last and

continue spend. M&A professional we on with focus, we downward. we trends series go to that continued on with are very Obviously, embark further of a focused as we forward, will M&A. to the fee to continue expect that move And activity, be expenses reducing there deal As trend do

expenses, basis, we but So those gross GAAP those back. you the of as a those on add you'll of won't sort see see part -- normalized

expenses. won't so the normalized And those be

where fees see for bit -- a sort might higher few of normalized we situation basis, should on basis, at next a a quarters, M&A but you see least you they on the activity, on down. continue little a trend as to So execute might gross professional

Michael Tiedemann

the also Board, the directly And Steve is what is It Steve to and just tied a in of said, focus the his team. business simplification supplement obviously, streamlining management, of senior aggregate. and Wilma, this to

are to linked timeline. -- important accomplishing X those So accomplish the in and

significant continue absolutely to progress So our there. goals this to calendar for is of top year that one make

Wilma Jackson Burdis

that the million -- So now. professional that I is good and ], that's notables for pretty -- $XX fees pretty think ex the [ was

more this but think and a saves professional cost million run bit -- little later talked about I guys part, then the talked that come fee should I think you about you $XX have guys of year. rate in

maybe piece So that talk as about just well.

Stephen Yarad

as exercise yes, Wilma, were that what an cost previously to you're I ] we of did XXXX. $XX savings think [ referring of million identified So during roughly we discussed, part

that end achieved second the fully by over horizon about in be would talked savings the embedded fact results of cost multi-period the would of we've XXXX. those quarter time be our So a and

that, I the we'd case. think still So say that's

look you say, professional that should fully and embedded expenses, the -- at when our operating you'll results cost-saving the end think initiative go-forward quarter. I of expenses of see the second I go-forward by benefit sorry, in the

So I think for we're still that. on track

Wilma Jackson Burdis

talked you those talk like offsetting can and like deals, about of very and you've the businesses And just you entered seems that you've business? bit other LXi exited perspective, brought but about a a on an sounds like each it And you put why the rationale from exiting for the earnings and you little couple trade. REIT businesses the advisory nice maybe it

Michael Tiedemann

The of decision. the They LXi manager stronger, scalable driver the business. a Board REIT. LondonMetric We was combination of were LXi that the the was felt of and of the more

So we the of value and exit obviously, the have. portion Board, the with diligence process was of we fair along acquisition the played was for the ultimately we approved felt then help by negotiated -- that and the we contract remaining

Stephen Yarad

we've And Wilma, and the revenue what to of there'll when comments be coming just the Mike's coming of we the in that's and of now End. second consolidation third that But recently announced. off East our get in will LXi to add numbers what starting be EBITDA quarter, And of replace terms on to also the quarter. is Envoi, I'd consolidation out which

be going think it And of what's about on, will combination so when coming the what's largely replaced. off those you versus --

very are complexity really versus of operating of with It's that headcount, much perspective. at better in lower risk, from streams new revenue-based feel recurring of of these activity old, This However, acquisitions things. that sort a it's when an the we businesses you lower business the and operational line fit. complexity type type the the we think about revenue like types the of --

really we businesses. So like these

Wilma Jackson Burdis

just little pretty just but And of capital like about realized maybe been a bit I you've seems active, Okay. to talk pipeline. it's a lot invest. It the got

So what maybe just there. out seeing talk you're about

Michael Tiedemann

is will business of are because ways. that in globally it's of the be always And can think leads -- to the and support growth. offices is priority important that and We we our -- collaboration operations organic our And for it effort importance our top integrate why by development organic X the be growth. driven the

we always will accelerate. more focus, critical get organic behind the a is begins that us, more be. to growth And the So the integration

primary the that's focus. So

talent focus is acquisition. secondary The

As think jurisdictions and across we various to in talent. we want our we various regions, bring about where able offices have to these revenue-producing be

have the We infrastructure support to them.

we'll We unique, a and are we efforts true as And and recruiting in or we in that people efforts have have infrastructure ] team is our a quarters. related bringing that [ paying Europe, already -- global one which now that in towards later talk of are is Dallas about turning in talent same highlighted benefits.

terms at are needs culturally we wealth strategy, In inorganic have We're firms that perfect looking fit. a our that joined -- in but are of to us and The pipeline, fits only not they our the holistically. really be squarely there organization. strategic within

the spend well time are the obviously, will to geographies, as vital we We're us. alternative in be look That's more -- seamless. looking across So to beginning engaged vital other importance -- strategic of side. integration now and

Operator

for back remarks. [Operator the over to further to Tiedemann Instructions] this I turn would closing Mike conference questions at like time, No

Michael Tiedemann

of meeting please Lily. for you management operator, if to many all to with months interested other out me in this team, to forward look in members you, reach don't you the with thank or Thank come. hesitate We joining And to us the you're of meeting and morning.

and summer healthy are in earlier, all growth to accelerated and for we long-term you As happy our August. in we Wishing positioned of again. a I our shareholders. Thank update beginning XXXX before mentioned value create next generate feel do really you

Operator

conclude will today's This you. Thank conference.

You participation. your for lines time, disconnect at your this thank may and you

AlTi Global (ALTI) 10 May 242024 Q1 Earnings call transcript