Silvercrest Asset Management Group(US:SAMG)2024-08-03 10:25Financial Data and Key Metrics Changes - Discretionary AUM decreased by $1.1 billion during the quarter to $21.6 billion, primarily due to the loss of institutional mandates [4][9] - Total AUM at the end of Q2 2024 was $33.4 billion, a year-over-year increase of 4.7% from Q2 2023 [4][9] - Quarterly revenue increased by $1.3 million or 4.2% year-over-year, totaling $31 million [9][11] - Reported net income for the quarter was approximately $4.4 million, or $0.28 per Class A share [10][11] - Adjusted EBITDA was approximately $7.2 million, representing 23.3% of revenue for the quarter [11] Business Line Data and Key Metrics Changes - The pipeline of new institutional business opportunities decreased to $1 billion during the second quarter, although it remains higher than the fourth quarter of the previous year [7] - OCIO assets are currently about $1.5 billion, with a pipeline of nearly $600 million [19] Market Data and Key Metrics Changes - Large-cap growth primarily drove higher markets, while large-cap value and small-cap segments declined during the second quarter [3][4] - The market has recently broadened, which is expected to improve future assets under management [4] Company Strategy and Development Direction - The company is focused on investing in future growth, including hiring a global equity investment team to enhance international strategies [5][6] - The firm aims to increase visibility globally with institutions and ultra-high net worth families [5][7] - The company plans to adjust variable compensation levels to align with investments in the business [6][20] Management's Comments on Operating Environment and Future Outlook - Management noted that while relative performance has been strong, there have been minor outflows due to shifts in institutional allocations [14][15] - The company sees substantial new opportunities globally despite international tensions, particularly in small-cap and growth strategies [7][16] - Management expressed optimism about the potential for significant inflows from the new global equity team [17][18] Other Important Information - The Board of Directors approved a 5% increase in the quarterly dividend, raising it from $0.19 to $0.20 per share [7] - Total assets as of June 30, 2024, were approximately $177.6 million, down from $199.6 million at the end of the previous year [13] Q&A Session Summary Question: What are you hearing from consultants and institutional clients regarding performance and outflows? - Management indicated that outflows were primarily due to a large institution consolidating their managers, not due to performance issues [14][15] Question: Can you quantify the new global strategy opportunity? - Management stated it is a multibillion-dollar opportunity in the next few years, with strong demand for the new global equity capabilities [17] Question: Where are you in terms of OCIO assets now? - OCIO assets are about $1.5 billion, with a diversified pipeline of nearly $600 million [19] Question: Are higher compensation expenses expected for modeling purposes? - Management confirmed that higher compensation expenses are expected this year due to ongoing investments in talent and technology [20] Question: How has the recent equity market change resonated with the company? - Management noted that the recent broadening of the market is welcome and beneficial for the firm's small-cap capabilities and overall business [29][30]