AlTi Global (ALTI) 22 May 232023 Q1 Earnings call transcript

Good afternoon. My name is Shamaley, and I will be your conference operator today. At this time, I would like to welcome everyone to AlTi’s First quarter 2023 Earnings Conference Call.

During the call, your lines will remain in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session.

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

to I Lily for will the now call AlTi. Arteaga, of Investor turn Head Relations over

to call today. everyone the on afternoon Good

updated me are www.Alti-global.com section Relations our our the more materials, of website at Michael Joining view provides CEO; COO; our our including Investor Moran, this this visit presentation, Zhao, Christine the afternoon to details earnings discussed and topics our call. Tiedemann, which Kevin investor CFO. Please our on on

or I forward-looking would and XXXX. risks from based made on remind within could actual the of Because statements and any results relating Litigation unknown that not to factors responsibility during including forward-looking facts, certain guidance statements. to any obligation statements the Act and meaning update or uncertainties. expressed also by involve statements forward-looking like materially that Securities of statements are important to AlTi historical assumes to Private cause implied statements. these are differ no deemed these forward-looking known the Reform be call There financial everyone may those

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

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

call. thank joining today us first for XXXX everyone, you Thank you, Good earnings and afternoon, Lily. for our quarter

credit with on the we million X transformational parallel, XXXX of quarter and first facility. $XXX We sheet the combination a our markets was of AlTi. January balance strengthened completion The entered public our business for through in

management basis EBITDA quarter performance revenues million QX ended of AlTi under billion generated and adjusted first $XX a For of advisement. summary brief our $XX assets the on and in $XX million, with a of consolidated

net announcing items, Our Normalized million a to was AlTi was changes these $XX share. backdrop. the steady unusual Since income the business a transactions $X.X after large total our for related grown benchmarks growth shortly challenging million. totaling by the their and $XX or generated for wealth our outperformed fair the items we've assets deal, historically a loss our non-cash in attributable quarter management adjusted to in [Technical Difficulty] reflecting year-end one-off million, and alternative $X.XX value strategies competitive net XXXX, XX%

cost provide and will have Later value still we say I call, have in development line in creation enhance business phase as margins, next years addressing teams executing financial accelerate to excited and centralizing We're the and pipeline and but I'll top We're path growth, clear do this look on details a about opportunities, of strategic this forward strategic our the clearly, to for come. we to operations our growth. will beyond. more that business we and for structure on our to of performance, management work a to acquisitions our team, established XXXX expand

multifamily has office global to management on both a which real path, capabilities. private firm a platform deeper the asset capabilities, our do reintroduce alternative and to and business investment public, want diving Before platform, lines, leading with management shareholder AlTi constituents. wealth I that public estate two to robust impact includes

with mentality most some net across solutions have of AlTi’s global asset We and serve of needs world-class structured service a of sophisticated client provide institution access gravitas combine respective the to our worth businesses We the their the dedicated the companies investors. investing worldwide. a XX-years, over base to high institutional available office of For clients classes. family

reinforced by of a focused of is recurring business established on two investment both foundation solutions revenues. pillars: are which and Our wealth services, growing and

Europe, teams, are the we to will and are Asia distributed revenues and institutions. attract to provide large States, America, we and we recurring our comprehensive business, management solutions clients families, to platform, Western continue differentiated the foundations services breadth our talent, wealth of the Latin clients generated These ultimately serve. believe For from across due and United to

As of a global few it only offices into listed. leading wealth the publicly driver a it We've and key years platform, growth established in business will our seamlessly stands of the to one management multifamily is impact our which one as today, investment be future integrated offering. continue is

by managers infrastructure business capital, support and management alternative providing real asset Our generates estate to and recurring marketing growth solutions platforms. revenues

long-term managers. and create are experts underlying AlTi We managers risk. through partnerships managers with portfolio as domain minority deploy capital investments also and recognized proven the of

partner operators into differentiates equity capital to and discuss active these to other us be with focus managers talented long an We to partnership history when invest we in managers. future our conversations sources AlTi. approach from our Our specialist growth believe these identify, is successful of of

with of Historically, record in have operates senior AlTi cities teams our and also opportunities for these private co-investment market XX driving integration. estate, public depth XX proven a strategies team successfully and and growth generated platforms. Currently, track post countries and a real has integrating leadership across

and macroeconomic coming XXXX, participate logic generations worth younger is an $XXX core from shape behind High industrial trends on trillion that and than economy These address decades. was AlTi of The wealth approximately net independent advisory that hands the path projected to more individuals over namely are $XX those today, represent aligns and focused investing, based and market their trillion a global Millennials. will and in generations, services trillion changing the principles. that to firm asset impacts in value ultimately with to of more on $XXX transitioning innovation forming receiving and wealth Genx of management in

thesis for from management focus to market The for XXXX. offices, come industrial have grow worth net volatility, across alternatives institutional increasing ultra-high investor over more logic Additionally, a into recent combination. is we individuals, estimated large by ever founding amidst to family we a trillion classes, few conviction past market CAGR in of full and since XX% the to solution. demand total market years. representing alternatives investors rapidly our with to addressable serving of have see than $XX the Even demand alternative XXXX, AlTi in our set unique expanding

and hikes that and of banking closing interest core cost volatility lean close and markets presented pressure XX emerge a our into combination business wealth as We private than into under capital months a public us intense The a to has company in rarely debt our different opportunity to is With for and doubled. strengths spent come undergoing and seen. rate market of business, are period asset go said, repricing market. very deeper The the more system ongoing management.

burden a the public company of operating three the strategic as meant XX-month We associated with as AlTi, benefits period. period were FCC For this cost ability the much and being review the we without one. through audit private execute of went transactions to businesses the lack

Additionally, to restrictions, an regulatory costs. public be company unable important will due we to are execute to which offset growth synergies, on cost and

management wealth our has markets. our accommodation and our headwinds, proving executive alternative producing these in durability consistently entire the Despite January, in expanded business Since steadily our business challenging strategies organization. are turns closing team grown into visibility gained their uncorrelated has

completed. to Operating our review I'll detail recently we've now XX-day ask the Officer Chief Kevin,

Thank you, Mike.

the January, lot quarter guided We spent This senior global AlTi of our platform. In analysis we as have assess principles. and offices began have first following worldwide. best review concluded now has time by a ways to a been the operating visiting our our optimize leaders

organic to advantages First, leverage our collaborate competitive accelerate and growth.

and our efficiencies organizational achieve cost Second, size right structure.

Third, to streamline to line generate momentum. execute of on provide And I'll accretive structure. top color our acquisitions each lastly, more capital these.

and and our our to to We generating wealth be AlTi Both organic these streams. revenues, consistently in generate recurring foundational growth. to believe continue will our which will a we success management invest businesses growing key asset revenue are

across Europe as well laid wealth and benefit out as Our management industry call. in consolidation the States, United the from tailwinds Asia, will our earlier core the business within markets we

client depth AlTi able As the demand positioned alternatives generate office family operations centralized committed we cross innovative solutions. feel a to combined which from recurring organization. office, preserving an management, capital will serve global services, global to multifamily the real we focused asset to estate, are will uniquely of Within for with investment and local long-term the revenues independent is in provide on border continue a basis. of with increasing build solutions resources

into making managers growth on investments differentiator. specialty focus Our is a equity

of in talent position operation come. destination presence in us well decades for years to be a to global Our

into strategy. we our recycle we may As our capital generate strengths, exit into invest to non-core assets to

organizational the to efficiencies initiatives of We're and now, cost company. implementing Turning across a number efficiencies structure. improve organizational to

across second, tightening near-term Our implementing levels broad-base for and as equity includes: roles we functions streamline and operational cost simplifying management expenses; systems; and SG&A controls employees. of centralize the first, to various third, a plan organization compensation all

initiatives reach at of as public in and least company result in approximately of to $X annualized the initiatives a cost margin stated of outlined sets savings. net The on significant offset the path alone will target portion underway recurring costs. plan expect XXXX, in are cost This million $XX we in We executed I've to savings long-term our us EBITDA mid-XXs. them expect the the million

transactions. we have and executed our listing strategic to investments running Since cost also our structure, our three addition are organic In we strengthen have accelerating platform. January, growth pursuing that ground and optimizing hit in the

in Zebedee, On in our and long Credit equities Hong a choice winner and manager increased a we Arkkan, external Situations European award manager of based the London-based stakes fund side, Kong and two managers. management Special our Asian XXXX. asset short strategic investors

value and respectively, reflecting further outperform and grow. to have differentiated We've positions our our most to our performance as clients to take strong our in by continue them long-term challenging peers proven relationship. our are and Existing of the help increased Zebedee X% their ability conviction we expertise particularly market their we approach X% the and to across and cycles. deepen market records Arkkan And prospective positions track ability they conditions. Both thrilled and

in were On of ultra-high offices from approximately firm the and expansion grown global Leonardo needs Hu today. as the XX last X worth grows Since and This XXX net Asia, emerged our the The in we to the Singapore of AL week, focus to XXXX, capital families world. $X through individuals management. number and presence of Partners, announce through multifamily Management Singapore, approximately than with Wealth excited by transaction wealth founded a financial side, office Singapore to acquisition Antonia has assets. family specifically in was in which in has into billion around times Wealth over AlTi’s on XXXX a more the Drago

Partner described serve been wealth Wealth into continue the will the ground, will existing a and as great our fully office AlTi the Singapore on business The lead management will Mike dynamic, team to believe rebranded platform. earlier. has of global be local integrated example our we AL as and

to value for long-term additions create they these about shareholders. platform excited are AlTi’s our will are confident We and

of its focus our of goals. capital area final The Our vehicle review two three strategic been has during accomplished structure. SPAC the

create key we to while talent. First, governance attracting structure, board were able and a world-class

we traditional the merge be raising million. Second, close. conditions able redemptions would and listing businesses sheet resulted in time possible the swoop, were to balance pipe at Despite due to That IPO. little three not on under in capital our high of one fell our of a said, which market public $XXX complete

order secure facility million growth, fuel to credit necessary a BMO. liquidity In led strategic executed $XXX senior the by to we

the acutely in To As float. for alleviate liquidity investors, that the which to increasing announced of share exchange, recently seasoned aware we that warrants warrant relates to warrant public a short-term portfolio the the overhang our prospective presents capital as shares. while managers our specifically will structure ourselves, end, we it are limited of complexities

the shares on We from our of outstanding. also newly simplified of will to and Combination have registration conclude pipe XX realized full the the to our statement awareness we raise review, this, combined branding for of float businesses. client our exchange shares To X million XX% filed aid brand the issued potential million long-term XX-day the in eventually the plus approximately shares.

they us long-term, Tiedemann to positioning AlTi. XX-year the As opportunity simply which become of we an business. AlTi. we brands do to transition implicitly, history Near-term, eventual embrace for as immense and to preserve Tiedemann deemed record. we in they it synonymous AlTi the In see industries XX, April rebranded Icon as to and the with brand's operate prudent track Global,

that leading that and wealth achieve alternative is goal at Our AlTi same iconic management will firm status worldwide. the

financial our Now I'll discuss turn the to call back to Mike performance.

you, companies. and to that Kevin. results want predecessor are I a between as our note Thank successor comparison presented

accounting the case, our company is Tiedemann a is Wealth Holdings the predecessor guidelines. required AlTi As successor. and Management and by In

such directly results not year-over-year As the are comparable.

and and market wins, experienced new AUA AUM business driven performance billion, clients Wealth In existing quarter, the $XX a AlTi’s to $XX first business. X% the performance. Management from inflows strong a quarter-over-quarter sequentially in by increased Wealth increased X% to reflecting billion Management

equity Our contributed $XXX fixed from benefited flows in client incremental $X the clients. of both business income billion development efforts positive asset generated million more the approximately performance in in to existing The we assets than first also new from markets and quarter growth. and

the AUM management, certain X% the estate $XX the and business assets weakness and alternatives sequentially the their reduced U.K. asset above billion, real partially platform, flows strategies In in This by to reflecting their the a and high power. earnings sector in in declined estate. divestiture watermark the AUA offset reflecting positive remain NAV performance real public is preserving and public all of stable

million quarter. In in fees, of first our division, the in recurring total, for Revenues management $XX AlTi Wealth and which advisory $XX consists quarter. generated revenues of million the were Management entirely

XX% quarter AlTi's management and include basis $XX Management, revenue first management and which our from of component was fee business. fees, was which as fees, in consolidated well Asset from as advisory stakes two-thirds In recurring. a revenue total the GP the were recurring million alternative of On

global intently all consistent Our base economic our free cycles. growing is recurring on team revenue flow, focused operate successfully across AlTi and to enabling cash

to be preserve and a to acquisitions business to sheet, leading liquidity our select in consistently critical will a our reinvest remain firm able business, lines. Being healthy balance maintain into make

in of mostly QX fees. in associated and These one-time were related the $XX incentive expenses, transaction, of significant as million share-based transaction compensation non-cash million as legacy reflecting Operating expenses our million expenses to one-time $XXX plans expenses investments with $XX million, professional comprised well $XX expenses infrastructure. company long-term in public of related

The closing. public by not results synergies to Further, in our the infrastructure, offset not we began company investments yet the of combination. revenue XXXX, incur or in which cost are business yet since our reflect know merger. full playing game implementing our began our the set realize up our us will decisive actions and We're we long of we initiatives listing the potential growth to since that

liability increase include share expenses million in our and related the other earn appreciation price our $XX to driven line, and fair out the associated warrant Below investments, value non-cash in with quarter. by

XX% Adjusted $XX of resulting million EBITDA as for earlier mentioned the margin period. was a in

company flowing achieve margin was increased in of transaction hold as margins real synergies Our well implemented be earned as from and beginning merchant impacted investment to estate cost fees public lower infrastructure. our costs well activity are by and The banking, growth and will to initiatives by we've revenue We're our level generate as in and resumed inorganic value. confident through recently AlTi our strategies be cost only expand positioned shareholder and the that growth saving strategy. take start to the initiatives results,

Turning to positioned of five-year we now AlTi loan. quarter to well term leverage its last sheet, $XXX times. million scale. had is drawn million $XXX our and X.X balance EBITDA credit BMO $XXX At believe month operating credit million million is global facility $XXX and our of XX to We our grow comprised platform multiples end, facility achieve

and continued position success. to AlTi opportunities growth revenues, will recurring accretive further organically platform review lean the allow strength, strategic its grow, Our continue prioritize to into for

high-single-digit we're growth assets, time, top the low-teens, EBITDA long-term adjusted line in achieving our of into growth, rate this committed margin goals annual to expansion and mid-XXs. annual At

Wealth for and AlTi In trust to including Management leading Management, put where I'd path focused closing, company who've growth employee the becoming be our businesses. table our primary on fortify acknowledge Alternative who've estate. next will like Asset our impact to two their decade their XXXX on private the real a service we clients them. and platform and our public base to of year a set and in a public remained with

in growth will on organic team the capitalize quarters. exceptional continue acquisitions coming to and Our drive strategic

creates shareholders a with significant our broader reminder, a which base. in employees strong investor alignment As AlTi, are

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

this session. be with our first with you. a proceed will question we Raymond comes Burdis And Instructions] Wilma conducting time Thank At the [Operator of your question-and-answer from line question. Please James.

shares warrant like then Quick the evening. on and also What's exchange the ongoing? exchange still for detail looks benefits It the the so warrant And war for Good float, a us registered, on the of the program? it's Hello. sounds guys program. it question kind pipe you on you -- float XX%. like from there? track little bit that goal were Could the is somewhat more give

thank ongoing you. is warrants and prepare to is The is This for Mike your Wilma. for as Hi, the program ongoing. continuing of AlTi. interest Yes, as you we're the filing Thank exchange in SX. well the

So we’re complete. are be in is And that float once free the to the quarter. total both anticipating second yes, XX%

misunderstood? time maybe Are the this pipe I at or shares trading

No. time. They're this not at trading

Not yet. Not yet.

EBITDA it. Got then XX%. bit it's Okay. I the And think talk little you could a about margin,

just on it compared the give And talk color a costs? should hopefully, guess through how public expectations. AlTi some expect Just about the I working of your that we company to when little

Yes.

the public as are and synergies. operating think we've when the really -- company to offsets in make As investment the we global about business a costs that continued through

And a running so synergies functions various system, when cost of you streamlining firm of across locations. think combination the across system and synergies about the plus of through timeframe the it's

we intently -- make it's capital precise it's a and manner. you're executing as to measured that hugely that company that. are sure focused thoughtful you do human So that on also And a important in

play. XX-day that's came a And so really into with review

and the our structures assume this synthesize as public improvement remarks, the one. in to the But three beginning that We've we of process been XX of prior investments three months able benefit that. are beginning into and over of we the businesses company infrastructure cost and really public is one being sort being without of into the of the we -- of mentioned making in

$X the It's did that of did just the inflows Wealth the hold? billion you management. no. Oh, how then And No. in… wealth that and X.X include client that talk guess, Partners? about And you. AL does how could Thank I if acquisition

beginning completed the doesn't net AL additional no QX, additions. It of new this just wins, as client be well as was yes, actual -- in client No.

and new we've undergoing while will is a trying So kind appeared generate say any, of, been business, had headwind you've ever you to combination face. that that I if corporate

So to listing to mention team all accomplish in of we're not able proud was what process. given our that of extremely the

So the have also and them. the prospective firm development we that then as and and this clients global have all a see a a is business statement we team. by clients them been with has resources that work real capabilities the to achievement serve And

Christine is Zhao. this Wilma, And

data we see Just to more strong to acquisitions support new continue which continue, very momentum. described. little client bit The give a Mike to

actually, quarter $X billion acquisition Wealth over also existing inflows, net very from Management had about million This our and Global have we alone we $XXX client new low platform. across client And attrition. inflows

of global So resiliency platform. our really the wealth demonstrates

Great. the the me, would in core then in on the for one you last get would side. asset And investment can if That that management color great. be some funds

the two So transactions? investments in the

Oh, sorry.

the Just the performance investment? about in could funds talk if of and that you just some investment

Performance.

Sorry. for marketplace looking basis were lowest back points had Three a the of Yes, of XX the against positive. the XXs this platform Asia was principal very a obviously mid-teens four on that performing years so down XX just backdrop. challenging we The alternative was depending down to at index. funds, and XX, exceptional credit

example these risk solid to X.X%. the So anywhere of and four then basis teams. points then positive in strategies management quarter, as well are from capability also first substantially all And about XX of another the

much. very you Thank Okay.

Michael for will Tiedemann the And therefore, remarks. And we turn over to question-and-answer closing CEO, of now session. end the call the have I back reached

Great. and Shamaley. also we firm. not there to I'd follow-up schedule dedication imagine AlTi are very remiss there that you Thank of And the clients continued entire further who and once us the calls. have contact the their team or thank questions work the be And be, invite and questions to any with we and If you, clients I the hard serve members to our have employees, firm. importantly, the across might again

QX growth come. And order you that The deliver update achieve to right long-term execute summer. initiatives giving this to with margin later and management we you in expansion place -- obviously confident the for strategy, forward our team is have providing we to shareholder years value look in

you. with And say that, Thank we'll goodbye.

today's concludes your and may disconnect your line this at you for this And Thank you conference, participation. time.