AlTi Global (ALTI) 9 Aug 242024 Q2 Earnings call transcript

Good morning. My name is Ryan, and I will be your conference operator for today. At this time, I would like to welcome everyone to AlTi Second Quarter 2021 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 Investor Relations website.

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

everyone to call today. Good on morning the

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

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

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

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

in made and out leading the for morning. all thank second ultra-high-net-worth alternatives. Lily, wealth in independent our global a progress joining this expertise quarter, with us you, Thank mission targeted you to the we further carrying In become firm management

in the X months, execute our another X X on transactions strategic last to continue closed in with We and the plan X internationally. then U.S. significant

the on recurring Allianz's earlier our cost we investment in companies, turning organization AlTi We've the as rightsizing begun optimize $XXX complement CWC we our year. parallel, $XXX or from Constellation week the continue point marked the in the which closed best-in-class expand and revenue focus received businesses. to million our a with And acquired newly million Last Wealth core to for on integrating structure platform.

This a services The the fuel acquisitions capital. global capital partnerships and expand accretive endorsement in blue-chip well grow fortify backing through with experienced in enables This footprint of provide global platform our to ringing leader. as to We're deployment high-quality is benefit and partners, a global forward an growth opportunity strengthen relationships and financial of client disciplined from institutional us key of markets as client a moving deep further expand and scale solutions. geographies. network our to key

as our to presence increasing continue Today, our we platform, around QX update progress provide our structure. the domestic to I'm and discuss results, in refocusing an our on growth our revenues in share initiatives well expand as appropriate international markets business key going and cost as an recurring

On have by grown It's asset business our basis, and we assets businesses a our advisement X% noting, for billion to $XX in to shift management XX-month period, over that asset trailing dispositions. have worth XX% assets $XX composition period, our Wealth consistent under acquisitions core recurring in billion of same produce and revenues. consolidated the that Management reflecting reflecting grown mixture a the to

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

quarter compared prior the on a to largely gain We net $X in were net $XX of from loss earn-out to income decline in reported Importantly, revenues as other million 'XX, unrealized period attributable liabilities. recurring $XX XX% of of the QX in income the million included fees. million a a year

for million. it $X.X quarter results, While this the EBITDA, was to item impacts is our which second neutral adjusted GAAP reported

was adjusted the Our quarter EBITDA second for margin XX%.

detail which discuss year, over I each highlights segments. While our review the more repositioning our will we've in this our last core been as quarter and conducting by from by wealth of the results impacted now the growth pleased in very are expanding I'm we business quarterly consolidated margins platform,

Wealth with Management. Starting

is attributed inorganic growth asset XX% reported and As progress. we organic I mentioned, to year. over both This growth last the

addition our benefited growing Furthermore, and well a exposures. global portfolios team In acquisitions, strong various performance a diversified offering. are and our from business strategic the our unique capabilities, classes of powered client have asset enhanced risk of we've through across development to a range

On Chief for This of quarter adding was the us Advisors, the on nearly track has billion an will an our independent the and active York-based New in enhance enable team. the M&A with we or an to advisory X, Management April market. platform. This AUM to OCIO The $X firm record front. of End outsourced East established acquisition compete Investment Wealth investment Officer announced ability acquisition AlTi experienced

portfolio and been already client have collaborating investment teams on Our development. analysis

platform deepen as are a with meeting and Envoi, $X segment. the Additionally, adds developing ultra-high-net-worth manager-based Midwest, the made wealth business our pipeline client collective the depth investment through Minneapolis. our strong AUM efforts the In our and development strides teams and July in combined clients. to expands our team the closed our presence business and On X, leveraging of region. billion acquisition months, services prospective in our business acquisition our This the in development for expertise to a collaborating complements closely existing integrating in past expand we've we

European-based businesses of also targeted of our a the quarter, second in have international into reflective global London-based of million. provide in private May. approximately and ability completed to for point-wise This partners we we backing the ownership our been our services platform. office Wealth firm $XX the with after increasing boutique-level Management trust the integrating to our sale the partnership On U.K. front, operations In XXX% services is

With are recurring globally. all focusing our these amplifying transactions efforts and our businesses core now we belt, offerings on in of our revenue investment

We're pleased basis to organic past the growth. which an Turning over on business, XX% year. with has domestic increased the of the performance organic

the of encouraged international our by We are momentum platform. also

secured listing. has across significant pipeline wins jurisdictions in international our team has we've and months Our strongest recent seen since multiple the

trusted large nearly joined XX a global London of from at by driven the and families Shiva combination and adviser addition team, scaled from is to of key recently, our experience bringing senior leading time collaboration strong many years trends Most gained across [ This our a talent. a several Victoria of global -- favorable platform banks. ], European

East-based we're of are provide experienced We're their the banks managed European adviser that seeing of families with an trends OCIO can services. discuss objective currently that Middle reviews variety and observing. let's some engaging of across holdings global sophisticated a holistic of Now requesting the

We are also seeing and jurisdictions capital creating ultra-high-net-worth European other tax various families and in structures purposes moving for considerations.

presence plan help on to the This independence increasing Additionally, years. our advisers are domiciles a with paired wealth. in large and current them trusted and only multigenerational global coming environment, and given transition businesses engaging of complex we capitalize uniquely families trend see is positioned flexibility. the to is AlTi the in our

report also spread can banks creative composition with teams offerings cross-border our solutions, and holistic Prospective across strategy. teams Our existing clients portfolio manage and complex on and localized as differentiators. cost-effective cite coherent accounts ideas multiple jurisdictions important and a

local the and global language clients of presence, regional organization a strong our our a with teams expertise. differentiated have speak As

Turning predictable Throughout to as segment compelling to the this that diversified revenues, returns to opportunities our been solutions our investment for and Alternatives Strategic business. Management segment. as well deliver Wealth we've LPs prioritize complement last year, reorganizing our

real restructuring of lower and sale level segment the the resulted has quarter. in The of in estate our private business assets LXI

composition quarter nature. mix revenue the XXXX. has being in segment's compared comparable represents in XX% a in recurring This our in the the improved of business top increase to However, X% period with line the

of this the positive foundation strategies, Our year. platform alternatives have performance exhibited uncorrelated

of the Asia decrease long/short up in the credit streamlining reflected European respectively, second continued a Our our costs X.X% operating in were XXXX. second the quarter. to same compared in our and to XX% to the end expenses X.X%, strategies the in reduction yield and quarter Moreover, of efforts period significant normalized

deploy I'd We will as continue segment of partners, for recognize year. our businesses that as infrastructure the repositioning that go-forward methods negatively business to evaluate enhance forward the last On to impacted making into has ways point, results within we expect we're visibility to we our that growth the the the from enterprise. the service. needed streamlining this note progress our reporting move and the a on like we our to capital focus to We and offer as

Street provide execute our visibility to seek as necessary will objectives. long-term with We The on we

wrap these sectors, leading established advanced the and transformational asset the CWC's strategic On the investment management wealth attractive insurance, the Wealth I closing accelerate wealth Allianz' Investments all believe in of up management subject long-term comments our global reviewing platform for market. benefits become a pioneering want X of delivering vertical, X Management We participation and results the the trillion and to in and we've partnerships following parties. the my week. Allianz for path global $XXX estimated nature to the to ultra-high-net-worth relationships last partners, by in AlTi's transaction

made it and the of expansion the our attractiveness the investments top characterized new growth and one is and sector in investment. a model, across revenues U.S., is capital-light Europe advance which made reach what stable wealth accelerating core The recurring and is scale Asia. line strategy, the markets management existing will of and reasons partners The AlTi's by so

acquisitions capital and East Investment the to CWC deployed of fund Advisors. Envoi we've Already, End from

as actionable ahead, the Looking opportunities pipeline we evaluate we an deployment for Allianz have investment. capital X

and the ability initiatives relationships the Allianz through markets. well we potential growth lead families and will as as generation service partners' opportunities to to enter our organic clients expanded importantly, be new and Our enhanced as footprints leverage

to and the a insights a our mentioned offering As platform. expertise I of expertise earlier, localized global we bring clients resources, while

our from for and access exposures and scale, private us idea lower benefit fees markets. to leading to Our generation the clients their maximize also

us with key relationship investment to offer fees products. will favorable clients enable our on Importantly, Allianz our

will result one This way operational our our is benefits clients. to just partnerships in

deep this privileged as the are count phase global to AlTi. we to our we Finally, our with embark financial expertise bring on Board services new partner

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

like-for-like Mike. businesses. excluding in we've partners roadmap, to for X% End XXXX. has long-term the positioned the as exited, public is operations our in reflecting Thank of million compared recurring quarters and come and continue year-on-year. decrease our to AlTi basis, our up the core revenues execute been AlTi the for revenues you, adjusting growth would have second the generated the Trust focus Progress streamline and european East a on $XX a estate acquisition revenue of quarter second on with quarter, business that we to of businesses real X% On strategic Advisors

period. the to in revenues I'm pleased management by that to X% report fee recurring XX% increased

$XX Importantly, increased to growth of Wealth with revenues XX% AUA/AUM XXXX, second second the our compared Management quarter this in the during to period. XX% in quarter along million segment

year Our revenue prior the market is East results, to End addition Advisors growth. performance our compared in growth the organic primarily robust and driven other by to period of in inclusion

increased XX% impact acquisitions XX% the compared to and assets of Excluding increased and divestitures, XXXX. revenues

the second Alternatives XXXX Management division, in QX recurring. the real and reflecting million $XX and our Further, In lower reduced estate $X estate of in businesses. to real our were fees in largely quarter XXX% in totaled repositioning of revenues compared transactional fees Wealth revenue Strategic of public management XXXX, million QX by private driven segment, the

in quarter the form estate was prior private The included was deconsolidated management fees fund, division. sold year quarter third comparable as year fee which real also management XXXX starting The XXXX. real well a revenue from in quarter this the included as LXi, transactional which from in of our results estate earlier public fees

the for million as the in sale restructured $XX repositioning of second Estate revenues reflecting the for XXXX. $X recurring net certain in to deals. in business billion quarter LXi, or comparable Adjusted decreased to exited we X% quarter by which net the by compared XX% Private assets GAAP income increased XX% of XXXX, for of of the million contributed segment period the year-on-year, Notably, loss $X the second was in the quarter. Real

offset This partially to to an year lower the in charges current losses period current in recorded impairment by in current driven period liabilities gains was investments period compared prior and in the income as period. tax period. on year year as loss included decrease other an gain Other unrealized the benefits the on as decline by prior period. compared year well decreased unrealized The income the lower was the prior earn-out in

million. $X net Our the second for was adjusted quarter loss

Consolidated which quarter were amortization certain and include the costs, first expenses severance expenses $XX the second quarter, depreciation related to for noncash normalized operating and deal-related million, compensation, transaction compared XXXX. of slightly up and expenses to

End, declined compared East would quarter. normalized operating to first expenses Excluding have the X%

a compared $X.X was EBITDA million, to adjusted of quarter the decrease quarter. Second million previous $X.X

XX% in of EBITDA XX% compared quarter the in was first adjusted margin to the quarter Our second XXXX.

the in the decreased the well. EBITDA to prior businesses our consolidated Management in margin to Wealth Although quarter. Management Wealth quarter for our perform margin adjusted core second The division XX% quarter, our XX% continue from improved in

acquisitions completed firm-wide implemented drive margin expect reorganizing core we've our key revenues, leverage which asset combination we will restructuring that be towards recently recurring composition As and being mentioned, forward. in improvement result and initiatives with businesses in our and in operating cost going savings will

with changes may the or consider, This is to July, note completed that operating and businesses, the we future assessment real addition, Allianz of determined of any other closing structure, additional transactions we changes management quarter believe third composition from may able things, including necessary. that the the be review, investment our segments results. will expected accretive XXXX, that to end strengthen whether make the to I'd like further our commenced to an be capital review Allianz any will among be In of that consistent business of which to of to the in be businesses. will the from estate prior of deploy strategic the of entity co-investment end the concurrent of legal with a management Further, at needed, these fund raise

July million conclude I capital capital our my the deployed million debt. and I'd in And July world-class plan. AlTi $XXX to $XXX touch remarks, $XX is we sheet, organic early and unique We in positioned on of an additional acquisition in structure. As a like cash balance quarter growth Today, well with million connection million fortified we and $XX inorganic its on a had in end, Allianz. footprint of global At received XX, Envoi. execute to partners, from has

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

next as for we're about and excited our This generational market largest can participate attractive accomplish wealth Steve. at quarter over organization, over $XX was the what the AlTi wealth an in XX you, estimated we important transfer the global years. Thank trillion

partners, strategic our footprint, for onboard capital global and long-term we AlTi expand we're As success. deploy our positioning

to and look how imperatives lead value. create will to sustainable our importantly, forward growth, demonstrating profitability strategic We shareholder accelerated

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

first James. Raymond [Operator question the of line Instructions] Our from is with Burdis Wilma

coming more about margin talk improvement Wealth you just the in what you bit And Management? quarters? a do the Could What are little the in EBITDA drivers? expect

Steve It's here.

in forward. expect, So accretive to on look, those EBITDA and -- they as -- contribute those coming growth we the businesses will and with we that integrate EBITDA fully going stand Envoi are board, margin

are generate second recorded we I now XX% Allianz we at think looking -- above our businesses looking that on at investment the forward, board we also, as that and that have moving margins we the quarter. that pipeline in

improvement those So M&A to transactions occur, activity. by we expect be driven that margin as would

you is the Great. And then due alternative largely business? AUM down, estate might I the on real sounds that to in think in the estate reviews more it it, real just you have touched portfolio. And guys but repositioning like

go you more little a there? could So detail in

year-on-year impact. repositioning a -- still yes, consolidating that note we the public On had and on also on particularly XXXX, a the by quarter year-over-year we basis, has that a had in business I'll of were so [indiscernible] Sure. has done basis wealth, rated the [indiscernible] the of second AHRA been an also been the the it's driven real LXi. sale estate in

question, second Wilma, the that for repeat you your Sorry, of could just part me?

in that comments, like, I I AUM? estate touched on and your Yes. what if possibly reviewing real that there's of the for you looks portfolio. just possibility just more wonder runoff in thought more

So businesses. the and after have co-investment fund closed, a real private started investments estate we the of the review Allianz

a I'd expect do to be table review, are the there of run do we go the those may ahead get want don't third of we as could may it's say that review. off end of to to the businesses. possible not in which options that in result that. So be that businesses on direction those that But of say that we terms strategic or fair by of the I through as quarter, And all completed it's what

Allianz Okay. possible what just in you're investment, point? capital about lots to pipeline, from much could with do how M&A. talk seeing And moving the of have you of you just And then left discuss but terms pieces here deploy this

is of of go importance for will growth, -- the all, terms forward. terms in firm we as we of this franchise we of -- organic are of in our the drive really The Wilma, that capital ultimately, lot inorganic a Yes. and deployment first believe, believers value Mike. growth, in the

teams as that's together, the results working regions across the the certainly and beginning So are call. we in but yield globally, described

inorganic have the Allianz of we pipeline, terms In of used not the any thus far. capital

that So we to entire have capital deploy. amount

bring hired we that We and teams inorganic talent, can about is producers firm, into or cut-off ways: the cetera. X et to profile be think the adviser all consistent acquired. of them, the talent fit service And clients of X the of growth when there invest be in is obviously away then firms of way and be think to to operate, firm, X all clients, they what them, underlying capital, individual needs the within

important the the These of direction critically with firm. the existing are all things to align firm and

across have X Beyond all that, we of a those. pipeline

here we X now we offering us, ways, around This and with public a many largely businesses are of is labor As in behind growth. the orienting us. of behind of sit integration we moment, is, integration really lot -- have today, our everything the really

already strategically coming in years. an for exciting drive we it's where as operate, new which important well, accelerate opportunities jurisdictions we margins, There evaluating and for are to helps ultimately think firm and we're densify time the will So be over us. which jurisdictions the

opportunities? give came If bit we decent maybe but color think some should a in a expenditure at And operating little Or little lot just additional M&A be better they looking a moving how coming this Okay. you there's about is us there of model. pieces understand our there, than then on there. Will a expenses, quarters? I could rate? run

Sure.

reported reduction of in amount We've the seen over there you'll fair expenses, that the that past say some been noncompensation today, significant operating our expenses it's still able be see to So in moving financials expenses. In are posted you'll down. a to reported particular, have see later coming year. our operating Wilma, in pieces

mix we're what embark As forward a additional see additions some expenses, from transaction we entities some in costs I and and also you'll see reductions sort move of activity, legacy M&A on you'll additional we of operating call acquiring. but

a operating still noise of expense. reported in bit So the

operating normalized. relates the of noise to expenses, normalized you'll in it see As less

diligently adviser to work and we So the short of probably the spend. professional term, current and amounts run is fees for rate closely reducing fair very longer-term continue but on

is next line Company. Kotowski Chris & with from of Oppenheimer the Our question

you My I of the got sure first question I'm correct? Management, I looking guidance is just, that make the you correctly? kind guess to quarter-to-quarter XX.X% acquisitions. Wealth to I presentation. if of And revenues, from right, wanted Did on the most increase heard I of XX at came most the the said in of hear that Page XX.X% revenue from I that the that

Yes.

Mike. There were is Just we are -- a services This things exiting family few was so this a where office quarter there. intra-quarter.

of So roughly quarter course. we had X/X in the revenues the

that you and -- Important XX a as July date. End. in then revenue to And the taxes, reduced is note of a X. So this for have large amount. QX is the specifically addition April the you states East begins Envoi seasonal outflow have observation, a

clients are number common not from exaggerated So exiting, to see it tax is outflow paying bills. entirely their that business but simply the an from

to really new offset So goes that. and offsets business wins just any

you within forward thing just QX about for modeling think your So wealth. a go you all as you seasonal is when that in

the reallocating QX do see rebalancing pronounced segment wealth and outflow every to additionally and strategic that on the points the in you tends taxes. of outside related people specifically are states that a in And where there the But is each capital. year, year to be

a of acquisition quarter disposition That you've are makes lot then guess, sense. with X and I X. and July And noted moving halfway the late in one there parts through Okay. the then another

be can at no revenues that the say, were quarter is acquisitions outflows, third looking given way you have there rate would the what equal, a or in closed? if already If run the inflows be, just we'd like everything major

which marginal obviously, a as closed you performance that's acquisition from on to the move forward related that's management would July on lines fees, see Other would Chris, related fee And the I to more expect increase X. of investment. dependent So the those we the underlying on line. of here, incentive Envoi,

of just the then had -- funds. a And the Cool. Page moving estate you of real presentation. you're to XX said When on Okay. you conducting review

I in And Page the... of assume see billion Or XX, upper all it roughly primarily there review? is it the we bridge right, so estate on then AUM real fund. there's is $X there. the under And is lending

would It right. upper be the

real funds. estate and private So public the

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

look and us Thank Have operator, third forward joining morning. this you, for a updating financials you on in to our We great thank all you quarter November. weekend.

Tiedemann has AlTi Global concluded. of your conference for The you. participation. now Thank Thank you

your You lines. disconnect may now