Silvercrest Asset Management Group(US:SAMG)2023-03-03 15:56Financial Data and Key Metrics Changes - Revenue for Q4 2022 was approximately $28.5 million, representing a 16% decrease from $33.8 million in Q4 2021. For the full year 2022, revenue was approximately $123.2 million, a 6% decrease from $131.6 million in 2021 [3][5][7] - Adjusted EBITDA for Q4 2022 declined to $4.4 million (15.6% margin) from $13 million (38.5% margin) in Q4 2021. For the full year 2022, adjusted EBITDA was approximately $32 million (26% margin), down from $43.4 million (33% margin) in 2021 [3][66][53] - Reported consolidated net income for Q4 2022 was $3.3 million, compared to $8.6 million in Q4 2021. For the full year, reported net income was $30.8 million, up from $24.9 million in 2021 [6][68] Business Line Data and Key Metrics Changes - Discretionary AUM as of December 31, 2022, was $20.9 billion, down 16.7% from the previous year. Total AUM declined by 10.5% during 2022 [47][49] - The firm's OCIO initiative managed AUM of $1.45 billion, with a significant increase in new relationships during Q4 2022, totaling $220 million [48][63] Market Data and Key Metrics Changes - The overall institutional strategy pipeline increased to $1.65 billion, up from $1.43 billion at the end of Q3 2022 [56] - The market environment in 2022 was characterized by volatility, which created long-term opportunities for the firm, particularly in high-quality asset management capabilities [63] Company Strategy and Development Direction - The company is focused on organic growth and enhancing its institutional business without seeking major acquisitions at this time. The emphasis is on building existing strategies and leveraging the performance of teams, particularly in Milwaukee [28][95] - The firm is observing a shift in client interest towards different credit strategies due to the changing interest rate environment, indicating potential growth areas [58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sustainability of current performance levels, noting that the adjusted EBITDA margins are in line with historical averages despite recent market challenges [31][76] - The management highlighted that the firm is well-positioned to capitalize on market recoveries and maintain strong performance relative to competitors [15][31] Other Important Information - General and administrative expenses decreased significantly by approximately 54% to $13 million for 2022, primarily due to a decrease in contingent consideration related to the Cortina acquisition [8] - The company repurchased approximately 190,000 shares of Class A common stock for about $3.5 million during Q4 2022 [48] Q&A Session Summary Question: What is the update on the OCIO pipeline? - The OCIO pipeline has increased to approximately $690 million, reflecting solid business opportunities [27] Question: Can you discuss the acquisition environment and valuations? - The management noted that valuations have come down due to higher interest rates, leading to more careful scrutiny of deals and a decrease in the number of transactions [19][37] Question: What were the main drivers for client outflows this quarter? - Client outflows were attributed to normal high-net-worth living expenses and tax-related outflows earlier in the year [20][82] Question: How does the company view its balance sheet and cash management? - The company maintains a clean balance sheet with cash and receivables nearly equal to total liabilities, and it strategically manages cash to balance between operational needs and potential acquisitions [85][86] Question: What factors influence the decision to buy back stock? - The decision to buy back stock is influenced by market conditions and the need to maintain cash for strategic initiatives, including potential acquisitions [89][90]