Assets Under Management and Administration - As of December 31, 2024, AlTi manages or advises approximately 67.3 billion in Assets Under Administration (AUA) for the Wealth & Capital Solutions segment, up from 1.7 billion in AUM and stakes in three externally managed funds totaling approximately 8.4 billion as of December 31, 2024[50]. - As of December 31, 2024, the company has approximately 6 million in AUM in 1993 to 1.0 billion in AUM as of December 31, 2024, accounting for approximately 1.3% of total AUM and less than 2.7% of revenue for the year ended December 31, 2024[204]. Revenue Streams and Financial Performance - AlTi's revenue streams include recurring management fees, performance fees, distributions from investments, and other income, with management fees being more predictable across market conditions[58]. - For the year ended December 31, 2024, 96% of the company's revenue is generated from stable management or advisory fees, with a client retention rate of 96% since 2020[89]. - Wealth & Capital Solutions segment generates revenue primarily from management fees, calculated as 0.75% to 1.5% of net asset value of underlying investments[60]. - The company's revenue is primarily derived from fees correlated to the amount of Assets Under Management (AUM) and Assets Under Advisement (AUA), with poor investment performance potentially leading to a material adverse impact on financial results[147]. - A significant portion of the company's revenue comes from investment advisory services, which may be adversely affected if contracts are terminated or not renewed, potentially leading to a decline in AUM, revenue, and earnings[173]. Strategic Partnerships and Growth Initiatives - In 2024, AlTi welcomed Allianz and Constellation as strategic partners to enhance its investment management capabilities[36]. - The company aims to enhance organic growth through acquisitions and integrations in both existing and new markets[31]. - The company has established strategic partnerships with Allianz and Constellation, involving a combined investment of up to 6 billion AUM in 2024 and a Minneapolis-based wealth manager with around 102 trillion addressable market, expected to grow at a 7% CAGR by 2028[88]. - The global demand for alternative investments is expected to reach $30 trillion by 2030, growing at a CAGR of 10% since 2017[88]. - Inflation remains elevated and could negatively impact the company's investment products and services, particularly in terms of labor, energy, and raw material costs[131]. - Higher interest rates could materially affect the company's business and the financial condition of its portfolio companies, making it difficult to obtain financing at attractive rates[133]. - Economic downturns could lead to decreased revenues and financial losses for the company's portfolio companies, adversely affecting net asset values[130]. Regulatory and Compliance Risks - The company operates in a highly regulated environment, and failure to comply with regulations could negatively impact its business[128]. - The company is subject to extensive and evolving laws, rules, and regulations, which may impose additional expenses or capital requirements, adversely affecting business operations and financial condition[213]. - The SEC has heightened its focus on the private equity industry's fees and allocation of expenses, which could subject the company's valuation policies to increased scrutiny[216]. - The company may incur significant expenses to comply with regulatory reforms, which could adversely impact clients' investment strategies and the overall business model[214]. - The complexity of regulatory compliance may increase costs and operational challenges for the company in both the UK and EU markets[224]. Operational Challenges and Risks - The company has identified material weaknesses in its internal control over financial reporting, which could harm its operating results[128]. - The company may face challenges in attracting and retaining key personnel, which is critical for future growth[128]. - The anticipated benefits of future acquisitions may not be fully realized or may take longer than expected, impacting financial performance[178]. - Integration challenges from acquisitions may lead to increased costs and operational difficulties, affecting financial position and results[179]. - The company faces increased regulatory scrutiny regarding cost allocations, which could negatively impact net income and stock value[183]. Investment Risks - The success of the business is dependent on the identification and availability of suitable investment opportunities, which are subject to market conditions beyond the company's control[148]. - Historical returns of investment products should not be considered indicative of future results, as future returns may vary significantly from past performance[149]. - The valuation of certain assets in investment products can be subjective, with potential fluctuations in net asset value due to market conditions[152]. - The company faces risks related to leverage, as reliance on credit facilities can lead to volatility and affect the ability to achieve attractive rates of return[157]. - Defaults by third-party investors could adversely affect fund operations and performance, potentially leading to losses and reduced carried interest[161].
AlTi (ALTI) - 2024 Q4 - Annual Report