BrightSphere Investment (BSIG) - 2024 Q4 - Annual Results

Financial Performance - Acadian reported record ENI earnings per share of $1.30 for Q4 2024, a 69% increase compared to $0.77 in Q4 2023[6]. - Economic net income (ENI) for Q4 2024 was $49.0 million, up 50% from $32.6 million in Q4 2023[6]. - U.S. GAAP earnings per share for Q4 2024 were $1.13, representing a 109% increase from $0.54 in Q4 2023[6]. - Acadian's adjusted EBITDA for Q4 2024 was $72.8 million, a 41% increase compared to $51.5 million in Q4 2023[22]. - Total revenue for Q4 2024 was $167.8 million, a 27.9% increase from Q4 2023, driven by a 51.8% rise in performance fees[92]. - Q4 2024 ENI EPS increased by 69% year-over-year, reaching $1.13, while FY 2024 ENI EPS rose by 55% to $2.25[91]. - Operating income surged by 82.6% to $65 million in Q4 2024, with an operating margin of 39%[92]. - The company reported a positive net consolidated funds' investment gain of $3.9 million for FY 2024, compared to a loss in the previous year[92]. - Earnings after variable compensation rose to $68 million in Q4'24 compared to $46.6 million in Q4'23, reflecting a significant increase in performance fee revenue[108]. Assets Under Management - Acadian's assets under management (AUM) reached $117.3 billion as of December 31, 2024, reflecting a 13% increase from the previous year[26]. - Assets Under Management (AUM) increased to $117.3 billion in Q4'24 from $103.7 billion in Q4'23, with net flows of $0.9 billion compared to a net outflow of $2.0 billion in Q4'23[113]. - Acadian's gross sales for the full year 2024 totaled $21 billion across various strategies, demonstrating strong sales performance[4]. - Management fees increased by 18% year-over-year, totaling $111.3 million in Q4 2024, supported by a 20% rise in average market appreciation[99]. Growth Initiatives - The company plans to allocate excess capital to support organic growth and return capital to shareholders, with a cash balance of approximately $95 million[5]. - The company initiated management of external assets in its Credit strategy during Q4 2024, indicating ongoing growth initiatives[4]. - The company is targeting the $3 trillion active corporate credit space with new systematic credit strategies launched in Q4 2023[71]. - Acadian's new Enhanced Equity and Equity Extensions strategies aim to provide higher returns with lower drawdown risks, appealing to institutional clients[66]. Expenses and Compensation - Total operating expenses increased by 7.5% to $102.8 million in Q4 2024, primarily due to higher compensation and benefits[92]. - ENI operating expenses increased to $57.0 million in Q4'24 from $52.7 million in Q4'23, with the Operating Expense Ratio falling to 51.2% from 55.8%[103]. - Variable compensation increased to $39 million in Q4'24 from $30.5 million in Q4'23, with the Variable Compensation Ratio decreasing to 35.7% from 39.0%[105]. - The full-year Operating Expense Ratio for 2025 is expected to be approximately 47%-49% if AUM remains stable[103]. - The full-year Variable Compensation Ratio for 2025 is projected to be between 44%-48%[106]. - The Acadian LLC Key Employee Distribution Ratio increased to 3.0% in Q4'24 from 2.5% in Q4'23, reflecting changes in profit sharing[109]. Historical Context - The company incurred $8.6 million in restructuring costs during Q4'23[122]. - U.S. GAAP pre-tax income for Q4'23 was $34.9 million, with a pre-tax ENI of $44.4 million after adjustments[122]. - Consolidated revenue for Q4'23 was $131.2 million, with segment ENI revenue from Quant & Solutions at $131.0 million[125]. - Segment ENI for Quant & Solutions was $50.6 million, with total expenses amounting to $80.4 million[125]. - Consolidated net income attributable to controlling interests was $22.8 million for Q4'23[125]. - Interest income for Q4'23 was $1.8 million, while interest expense was $4.5 million[125]. - The leverage ratio as of December 31, 2023, was 2.0x, with a net leverage ratio of 0.9x[110]. - Total assets as of December 31, 2023, were $611.4 million, with total liabilities at $561.9 million, resulting in shareholders' equity of $49.5 million[110].