BrightSphere Investment (US:BSIG)2025-02-27 21:48Assets Under Management (AUM) - Acadian LLC manages approximately $117 billion in assets under management (AUM) as of December 31, 2024[20]. - The institutional channel accounts for over 80% of Acadian LLC's AUM, with public/government pension market representing 43% and corporate plan market 13%[26]. - As of December 31, 2024, Acadian LLC manages $52 billion in assets, with 45% concentrated in three investment strategies: Acadian Global Equity ($19 billion, 16%), Acadian Emerging Markets Equity ($18 billion, 16%), and Acadian All-Country World ex-US Equity ($15 billion, 13%)[61]. - Approximately 80% of assets under management are in non-U.S. denominated currencies, exposing the company to foreign currency exchange risks[62]. - Total assets under management (AUM) increased to $117.3 billion as of December 31, 2024, representing a growth of $13.6 billion or 13.1% compared to $103.7 billion in 2023[186]. - Developed Markets AUM reached $91.0 billion, up from $80.7 billion in 2023, while Developing Markets AUM increased to $26.3 billion from $23.0 billion[186]. - Institutional client AUM rose to $97.9 billion in 2024, with gross inflows of $17.9 billion and net flows of $4.3 billion[184]. - Average AUM for 2024 was $112.3 billion, compared to $98.4 billion in 2023[182]. Financial Performance - Revenue for the year ended December 31, 2024, was $505.6 million, an increase of 18.5% from $426.6 million in 2023[178]. - Economic Net Income (ENI) revenue for 2024 was $502.5 million, up 18.6% from $423.6 million in 2023[178]. - Pre-tax economic net income for 2024 was $146.2 million, representing a 41.3% increase from $103.4 million in 2023[178]. - ENI diluted earnings per share (EPS) for 2024 was $2.76, an increase of 55.1% from $1.78 in 2023[178]. - Net client cash flows for 2024 were $1.8 billion, a turnaround from a net outflow of $2.3 billion in 2023[178]. - The U.S. GAAP operating margin for 2024 was 27%, an increase of 195 basis points from 25% in 2023[178]. - Adjusted EBITDA for 2024 was $177.1 million, up 32.4% from $133.8 million in 2023[178]. - Economic net income for 2024 was $105.8 million, a 39.7% increase from $75.7 million in 2023[178]. Client Relationships - Acadian LLC's client base is diverse, with the top five client relationships representing approximately 13% of total run rate gross management fee revenue[29]. - The top five client relationships account for approximately 13% of total run rate gross management fee revenue, while the top 25 clients represent about 35%[73]. Investment Strategies and Performance - The firm has over 120 investment and research professionals, focusing on systematic investment strategies across more than 65,000 securities[21]. - The company has a strong track record of investment performance, with competitive near- and long-term results[34]. - Investment performance relative to benchmarks is crucial for attracting and retaining client assets, with poor performance potentially leading to significant outflows[58]. - A significant portion of revenue is derived from a limited number of investment strategies, making the company vulnerable to performance fluctuations in these areas[61]. Operational and Regulatory Risks - The company operates in a highly regulated environment, with compliance requirements that can change and impact business operations[113]. - The integrity of the company's brand and reputation is critical, with potential harm from operational failures or regulatory issues leading to loss of clients and revenue[68]. - The company faces risks related to conflicts of interest, which could arise from overlapping investment objectives among client accounts[69]. - The company is subject to evolving data protection laws, with potential fines of up to 4% of total annual worldwide turnover for non-compliance[101]. - The company must comply with various anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, with non-compliance potentially leading to significant penalties[104]. - The company is subject to the California Consumer Privacy Act (CCPA), which imposes civil penalties for violations and increases operational costs due to compliance requirements[102]. Technology and Innovation - The firm utilizes advanced technological capabilities to support its systematic investment process, enhancing operational efficiency[50]. - The company is increasingly reliant on technology, including machine learning and artificial intelligence, to maintain competitiveness in the investment management sector[110]. Employee and Compensation - As of December 31, 2024, Acadian LLC had 383 full-time equivalent employees, with no employees represented by collective bargaining agreements[49]. - Compensation and benefits expense increased by $47.6 million, or 21.8%, from $217.9 million in 2023 to $265.5 million in 2024[200]. - Fixed compensation and benefits rose by $4.7 million, or 5.0%, from $93.1 million in 2023 to $97.8 million in 2024, mainly due to new hires and cost of living increases[204]. - Variable compensation increased by $10.5 million, or 9.4%, from $112.2 million in 2023 to $122.7 million in 2024, driven by higher pre-bonus profits[204]. Market and Economic Conditions - The competitive nature of the asset management industry has led to a trend toward lower fees, impacting revenue and net income[79]. - A shift in the mix of assets under management from higher-fee to lower-fee products may decrease revenues even if total assets under management increase[80]. - The market price of the company's common stock has been volatile, influenced by economic conditions, competitive position, and financial results[130]. Shareholder Dynamics - Paulson & Co. Inc. owns 23.9% of the company's common stock, which may influence business decisions and affect stockholder dynamics[118]. - Future sales of common stock by major shareholders could lead to a decline in share price and complicate capital-raising efforts[120].