Silvercrest Asset Management Group(US:SAMG)2021-03-05 18:50Financial Data and Key Metrics Changes - Discretionary assets under management (AUM) increased by 15% in Q4 2020 to $20.6 billion, with total AUM growing to $27.8 billion, representing increases of 10.8% and 9.6% year-over-year respectively [4][10] - Revenue for 2020 was approximately $108 million, a 5.7% increase from $102 million in 2019, while adjusted EBITDA rose by 6% to $30 million [5][17] - Adjusted diluted earnings per share increased by 9.4% to $1.28 from $1.17 per share [5] Business Line Data and Key Metrics Changes - The Outsourced Chief Investment Officer (OCIO) initiative's AUM more than doubled to over $700 million in 2020, with expectations to cross the $1 billion threshold in 2021 [6] - Revenue for Q4 2020 was $28.4 million, a 2% increase from $27.8 million in the same period last year, driven by net client inflows and market appreciation [11] Market Data and Key Metrics Changes - The institutional pipeline is currently at approximately $1.34 billion, with the OCIO pipeline nearing $340 million [32] - New accounts opened in 2020 totaled $614 million, marking a significant increase compared to previous years [62] Company Strategy and Development Direction - The company is focusing on organic growth through talent acquisition rather than pursuing acquisitions to expand its product suite [38][39] - The firm aims to maintain a disciplined approach to growth, avoiding over-diversification and emphasizing the importance of its culture [54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the institutional business, anticipating that institutional growth will outpace high net worth growth in the coming year [91] - The company is prepared to invest in talent to drive future growth, even if it temporarily affects margins [44] Other Important Information - Total assets as of the end of 2020 were approximately $213.8 million, with cash and cash equivalents at $62.5 million [23] - The company has a policy of supporting dividends and periodically raising them, although it chose not to raise the dividend recently due to a focus on other capital uses [78] Q&A Session Summary Question: Update on the institutional business and current pipeline - The institutional pipeline is currently at about $1.34 billion, with a growing OCIO pipeline close to $340 million [31][32] Question: Inorganic growth focus and asset management strategy - The company is pivoting towards hiring talent for organic growth rather than acquisitions, emphasizing the importance of cultural fit [38][39] Question: Recurring cash compensation ratio and EBITDA margin - The compensation ratio ended the year at 56.7%, with management indicating that EBITDA margins may fluctuate based on hiring and investment in growth [41][44] Question: G&A expenses and future expectations - G&A expenses are expected to normalize post-pandemic, but fixed costs may limit variability [66][87] Question: Dividend policy and M&A landscape - The market is viewed as expensive for acquisitions, and the company is focusing on organic growth while maintaining a strong dividend policy [76][78]