ALTI - Earnings call transcript Q3 2024

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Operator

Good morning, my name is Rico, and I will be the conference operator for today. At this time, I would like to welcome everyone to AlTi's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would 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 will turn things over to Lily Arteaga, Head of Investor Relations for AlTi. Please go ahead.

Lily Arteaga

on today. everyone to morning the call Good

at Joining during within Reform and presentation. invite made Stephen morning are our the the you Securities would Litigation meaning of certain I be materials, our our XXXX. may CEO; investor to Michael Tiedemann, website of remind Yarad, section of visit call Investor me our that to deemed including the Act view earnings this to Relations www.alti-global.com our CFO. everyone like statements the forward-looking statements Private We

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

this non-GAAP to can to financial include our filings. measures. references the related With like over call, turn to that, earnings SEC call reconciliations found in I'd be may Mike. Full some During and presentation our comments

Michael Tiedemann

for looking joining wealth market, Capital, meet investing. public expected management third We represents X% to or focused expertise the sharing upper made X net $XXX impact is I'm firm point you, and this view, you AlTi market in alternatives as bright, Target curated of the the addressable CWC, preeminent and CAGR global is the by to future and the ultra-high this market. believe by the XXXX. Wealth on worth of this a we've platform ourselves with need and with the of continually partnership thank Allianz Thank wealth established we and morning. trillion with transformative you In clients A is end and company and grow global year. is in band our today. only global our forward every Constellation Lily, in the on made our strategy us all quarter, tailored the our progress execution In expanding strides significant strategy further to establishing earlier

to Before our want and leverage AlTi's important turn our associated financial I highlight investment relationship the this partners. with I to to and results, ability strategic milestone capital quickly

our at July, scale Prior management importantly, partners' have but wealth to network us we only and our Allianz's on ultra-high to and acquisitions enhance but our not expand partnership presence in to already with Our with solutions. and and in U.S., End these allowed CWC strengthen add put from key had of to the our the net fortify end moment, million investment OCIO fund capital closing to Advisors. East capabilities deals More segment. worth deepen these $XXX Envoi footprint, of work the our of regions the a relationships

to and to scale track access sheet. to records, prospective third-party the balance and billion global approximately debt Allianz's from new cost clients market, will private private our partnership work other existing market updating this one expanded investors to through capital $X.X is partners including you unique will They ultra-high just look forward additional will X of leading offerings, and allocated With on the opportunities, believe A a we initially In network and is allow Allianz's which with focus sector, summary, leveraging track debt growth of private record recently sources. by than service announced outstanding Allianz's debt JV are of trillion the this secondaries managers clients investment with this worth invest worldwide. long-standing partnership Allianz co-investments. This market. and investors. represent the allowing example beginning strong benefit great and Group net benefit access $XXX enabled significant the segment on Allianz, and through savings unprecedented we to the brings capital. strategic The in is alongside clients with which program Allianz Our to largest our just more the approximately together, private

quarter, the Let's On period. move advisement the over $XX that third assets over basis, from results. generated XXXX. up X% a our increased for now XX% management $XX.X compared financial like-for-like assets to quarter of our consolidated trailing to On basis, and period billion. third under quarter to of revenues the AlTi In dispositions, XX% our X% XX-month and adjusting the a previous grew million, and acquisitions

the XX%. XX% was that recurring Capital $X.X in compared million, XXXX. the of see adjusted turning up subject, fees. adjusted the the which in our It's results. want touch from representing of before the in noting XXXX, reporting, EBITDA were same Solutions I third segment in million reflected $XX.X from highlights, quarter quarterly Consolidated Importantly, of our worth up On in revenues $X.X on changes core $XX.X million to to and the quarter million, Wealth EBITDA will to you presentation an to segment this increase was our quarter

the present to core align changed previous have of our announced our go-forward view overall segments. connection imperatives. business real management's our thoughtfully our and Consistent of on with discussed our review we in strategic our estate team As previously with has calls, businesses, way the with restructuring prioritized growth we business

and in and This Solutions are through the now managed are in Real strength reported our externally will internally co-investment is Our segment, growth. future estate will which the results Wealth Estate the one business Global of includes core business Capital the which several In are International stakes investment capital businesses these in real being event-driven Management estate strategic our objective business, of we segment better in results results captures strategy. strategies. drive presentation are and action our not strategic The course community and line the X the Wealth fund our segment. A be In review results is to options alternative managed progress. core of consideration, this real strategy additive investing which currently and our management segment key of under presented takeaway, our the the we and is now by fundamental strategic to long-term on of the end finalize a business investment this view, year. the sight conclusion offers of of clear our of of that revised light

our to presentation. Our be provide have on more with for the impact in new been prior the Steve segment recast results changes consistent of results. the will details periods

in The with currently uniquely momentum massive from clients positioned our AlTi trusted our integrated to is mentioned earlier, a market demanding represents our End organic enable and advisory billion the capitalize OCIO adviser. market experienced and integration, respectively. analysis on creating growth East Midwest, to our expertise and AUM a platform. compete on due eye driven wealth made independent a advice, in acquisitions combined growth. by management billion firm segments, the XX% As progress with capabilities complementary and investment significant this towards $X We've development solutions, I are year-over-year, the In earlier Envoi, our on target growth. Solutions are presence pipeline. strong are collaborating to a a business increasingly an and alternatives in us $X They global trillion-plus teams $XXX inorganic effectively AUM client-centric opportunity comprehensive unique asset highly to Capital and conflict-free market we and Advisors, this Wealth long-term footprint, manager of impact year wealth and our teams expand

deals select we confident globally, positioned we feel approach strategic disciplined our on execute criteria. are that in acquisition to geographies based Lastly, complementary and

growth. Turning to organic

of performance in by the recorded boosted Wealth assets the with XX% a the pleased strong which business, last are We Management performance. in year, market increase

and long-short are strategies. the Asian most credit also Our European alternative well, strategies notably performing

Chief further continue technology Phil we growth throughout platform incorporate announce efforts services Technology we our to operating have robust to focus leverage pleased and delivering platform, our scale ensure best-in-class support to our to we of client investor as execute a our I'm and to goal global of base Dundas Officer. Phil strategy. and our will business As welcomed on our that recently the to CTO,

we is As as lead generation as we've well over see solutions enhanced with through the be to to call Private begun our we will as Allianz already launch new presence partners' our financials. the leverage initiatives debt the time a quarter innovative enter you to opportunities, expanded believe the exciting This very at of turn by program, take to this a markets. AlTi Steve through ability that, growth on I'll With our dive AlTi. deeper

Stephen Yarad

Mark. you, Thank

of want our more Mike strength underlying AlTi's core end of a note, estate of reporting. fund mentioned, Concurrent segment strategic color simplify we on business management investment the at On a that a clearer changes picture we to provides with and results. believe continue offer financial management to reporting, from the the Allianz to the closing the review commenced As real of and little co-investment businesses. our I July, which

the to reporting of the change outcomes of the One decision of AlTi's to segments. is composition date the review

discussed alternative includes business, results in estate The reported estate Capital our real the externally our managed Estate. and real Wealth businesses includes and investment are co-investment and segment estate Real as and our International As of Capital earlier, fund event-driven Management Real segments managed Wealth International Wealth strategy stakes go-forward X Solutions strategies. and the Solutions previously the Global internally management.

in we certain activities aggregated GAAP separately. segment are order to segment, corporate corporate our equity, net These estimated value to follows: results segments include previously costs company Additionally, was to below accounting, this directly where for attributable compensation book previously other net and segment the assessment the allocated and book net resulting Management certain to noncash fair value non-compensation was reconcile Wealth of these reporting fair goodwill. impairment. reporting, exceeded in segment results underlying value of related the to primarily to book to the public assess Wealth were assessment intangible and charge businesses. activities reported primarily the were results, reported changes and estimated are assets which value Strategic comparing the reported The fair goodwill in required to Management Alternatives the for items recorded. Due not the related segment, no and to impairment equity equity, of fair The impairment each involved as

investment For attributable declines the were net declines we XX a the as due with time assessment Alternatives of continues components. it to required incentive cash following management attributed the from forecasted which to attributable totaling that included this event-driven as Overall, a XXXX. to be past the primarily confident estate businesses. co-investment goodwill asset from million charges the in written net timing revenue view flows previously for this intangible forecasted strategy All to million impairment cash to AUM strategy real over and at in $XX.X fee GAAP is issue we in outflows Strategic We low and historically for recorded, that flows XX the reported now impairment in businesses goodwill resulting remain cyclical these as fund consider million profitable management this months. perform contract high more impairment $XX.X we strategy. $XXX.X reflects a A impairment charge segment, the generated the off. previously to prospects

$X.X businesses. related these for In changes addition, to impairment the flows a recorded in million also was asset intangible forecasted cash

quarter, generated As presentation noncash overall earlier, more we said, drive provides into are the third Advisors our in are and AlTi's which the activities a third the business Office segment for of like-for-like a charges European the basis, the estate both acquisition review to and With public exited. AlTi business, new quarter XX% performance that to in will real as of To business future. I XXXX Trust now to the increase Private results I picture we Eastern million and exclude to clearer and services numbers these EBITDA. X% detail. and believe discuss need that adjust compared the of $XX.X quarter. Envoi well that as neutral the compared and on adjusted of stated an revenues reflecting these today were previous Further, the

like-for-like been up a basis, on revenues have year-on-year. also such, XX% would As

in to consistent with I'm Capital that compared for pleased to XX%, our level revenue reported quarter the to $XX.X in the million Revenues increased Wealth management XX% million XXXX. the quarter of in report comparable the XXXX. segment quarter of third fee Additionally, in $XX recurring Solutions quarter the was and third

addition by revenue to our driven segment East End growth This market prior Our in performance. is and to year-over-year. the robust increased of Envoi primarily this assets in year compared the strong inclusion in results XX%

this the compared The revenues in Excluding assets $X.X XX% income businesses lower X% current include period. QX was to higher year XXXX, Higher In the in an The certain primarily year QX GAAP revenues prior impact increase items revenues for lower Net increased same as prior to and International $X.X of million net to before XXXX. reflect million compared period attributable to period. for to the operating and accounted well $X.X the to $X.X million. $XXX.X Real of million in value expenses. income interest of increased compared the acquisitions million allocated the quarter. quarter was was taxes quarter and totaled period exiting in compared for certain the the income Estate third current at gains the fair quarter restructuring unrealized allocated divestitures, the prior corporate in third segment, also for net higher our as activities net year impact results of since loss XXXX. period quarter

of accretive include charges. an increase combined has was compared from of year intangible and higher-margin EBITDA LXI both EBITDA Advisors Envoi to Private quarter. acquisitions quarter current of the to million contributions been prior were the deploy and European successfully the and by the goodwill million $XX.X ability into management Office EBITDA from mentioned, million, capital prior businesses. previously our Adjusted and the third business, for million, quarter $XXX.X the a quarter total from Eastern exceeded exited impairment Services results the of recent asset year the $X.X since of As period. demonstrates results which This contributions prior $X Trust to approximately and

on Capital margin our XX%, and $XX.X third million FX comparable operating reduce depreciation XX% $XX.X amortization and quarter, to million up restructured normalized was period Solutions third period and to in XX% Importantly, losses core the was to intra-group certain in compared transaction included associated million, from EBITDA adjusted severance EBITDA certain foreign expenses XXXX. currency adjusted of the and $XX.X the Consolidated year XXXX. excludes in quarter for in Wealth the that and million increased arrangements funding expenses, $X.X of The the costs, deal-related which exposure. prior were

We and level recurring to and diligent infrastructure initiatives growth. while operating continue additional to costs control to in of on spend to investments non-compensation facilitate deploy overall focus and the on scalability and expenses on compensation maintaining people reduce

collaboration touch investment We July. As the end my footprint, to it balance million growth structure. on our I fortified conclude with service partners, remarks, at $XXX our plan. $XXX With positioned quarter the debt, unique following with comprehensive to and cash remarks. $XXX capital are our our in well million in turn I'd had I'll we ongoing like and sheet, Allianz execute we received end, global offering that Mike for to At of million on concluding back inorganic organic that, and believe

Michael Tiedemann

as are AlTi progress With with Allianz on year. for pleased Allianz key I'll driving far value. growth, on focused competencies. private unique this These that, To operating questions. We're Steve. you, profitability done the program call Thank and a we've CWC and closed shareholder on focus business acquisitions, and the with to our steps made X we've welcomed robust while core We've date, our partners, established sustainable impactful strategic credit restructuring deliver leverage. open to for this position so

Operator

Instructions] The comes with [Operator Burdis Wilma question Raymond from first James.

Wilma Jackson Burdis

to many now? of just portfolios a could of you talk Or first to guess ultra-high about lot over right class be what allocation debt net a for them? private question, could worth think the I new about is maybe these run. a an little going lot longer asset Is allocated talk you a that be portfolios? for And of private are and debt -- the bit demand

Michael Tiedemann

return and forward competitive, diversify to area ultimately that cases. It as and the additive this But first with look which and very this be against help portfolios. and allocation? already There drive the and are seen years. to very certainly in differences. you success generates believe helps the space consistent the in the results battle are portfolios and we in we've tax competitively ultimately, an answer coming the space a then -- is an will within space the part most inflation nuances. the related of question growth many I'll But anchors continued allocate There talent in as to

more asset asset partnership management. and important It's think is and important it offshore an tax-exempt are beyond demand, be structure investors. itself structure So with within Allianz in There investors the an is taxable in co-investment institutional increasingly time, but obviously for on wealth specifically we fee or is in challenging and the portfolios the then unique extraordinarily times so components that over much will highly the the secondary credit market. competitive, the and interesting

within extremely there the differentiations structure. an competitive structure well So as fee some are as

Wilma Jackson Burdis

Okay. little there, It we rate little improving what the know for in And a about then in it's like talk one time run can quarters. some about still the just [ there's kind coming expenses? ] I a overall, talk that maybe seems bit. but a could of you bit expect little bit and

Stephen Yarad

So think seen reported In progress, in might a seen a basis. gross that of progress the you've overall on and expenses. in given one-timers any progress showing and think on the think we've speaking, on normalized yes, also a you've be seen I basis terms been I as expenses some or normalized I you've year significant on transaction depending quarter, expenses increases particular things you on going generally the improvement. But quarter. some might see Year-over-year, --

the now, a reducing work to continue getting I relatively short think perhaps keeping we're and very term, we cost expenses run but hard good where to discipline. on in tight a is So rate, very

we as well. continue is, infrastructure with we as people move expect in some might and make but in areas, progress we forward investments to as So certain expenses do offsets the to story see yes, you make

Wilma Jackson Burdis

hiring your CTO? a some bit about little of of the focuses given that, the with you tech And talk can

Michael Tiedemann

the the is of to there. are service information primary several clients. there components Well, and delivery One,

And the which and delivered. in consistency the so is effectiveness that

an data, is to operating second The platform as efficiency, of collection create controls.

we created platform. to can to that are data to efficiencies continue the improve. There's continue a control obviously a there's to be And environment So we there want scale want we invest and as environment improve.

the having on off opportunities. about think as that pay that are begin Phil's we So as all perspective immediate architecture one will we is its we of robust and impact possible from business in excited spades as the these an and investment evaluate to standpoint

Wilma Jackson Burdis

I'll on reach and that and impacts on talk rate potential interest And rates, things deployments maybe short-term And also of business, so the your impacts U.S. last any election sensitivity? one rates long-term you can interest interest for me, you other -- about of the other business. then and about impacts some any talk how related, and

Michael Tiedemann

Well, politics. to I'll dealing discussing best families, large the with question in avoid first answer Always last.

about no terms in that So clients, our with portfolios, have portfolios have very that effects politics. thoughtful a in that our engagement quarters. the be in be piece I we than coming with immediately it's of stay arguably can team dynamics we And and very related the are There's addressing be think came currency we'll impact away likely different certainly, talking over very will those from balance, clear outcome. about will other geopolitical with that -- and clients. question we time. on our our But that this to be we different will out positioned But the -- well our research which on our a for

rate related growth. matter will to question long-term terms to is is as capital debt corporate fund load, level, in to an rates. The of that markets Obviously, but a interest our our the tool ambition effective other use at

everyone for extraordinarily XX-year the of an that are it's -- period, terms will So understand to portfolios. be that But falling, helpful. their rates XX-, obviously important dynamic in a portfolios, that a portion low to to interest for had suppressed large as portfolios of degree rates

towards offers So now a compound that organic target just that the project. higher greater for platform base rate much portfolios these we X% to

this assets for a environment. significantly obviously terms level is portfolio our clients, and our more fixed a on So attractive in income of

borrow. be continue will the but our debt to obviously our benefit we to of will obviously managing and very rates itself, firm manage the falling anticipate For to ability carefully,

Operator

As are Tiedemann, hand for to no like would the I now Michael further there over to questions, closing comments. CEO, conference

Michael Tiedemann

to new XXXX and thank morning. on We fourth you operator, our look the results full in year for year. you, Thank us you quarter financial this forward updating all and joining

Operator

Thank This you. today's concludes teleconference.

at your may lines time. for You participation. disconnect this you Thank your

AlTi Global (ALTI) 8 Nov 242024 Q3 Earnings call transcript