Financial Data and Key Metrics Changes - In 2023, AlTi generated revenues of $251 million, with Q4 revenues reaching $92 million, reflecting an 86% increase from Q3 [17][18] - The company reported a full-year net loss of $319 million, with an adjusted net loss of $8 million when normalized for one-off items [8][9] - Adjusted EBITDA for Q4 was $10 million, improving by $13 million from Q3, while full-year adjusted EBITDA was $29 million [22] Business Line Data and Key Metrics Changes - Wealth Management segment revenues increased by 9% sequentially to $38 million in Q4, with full-year revenues of $138 million [19][20] - Strategic Alternatives segment revenues totaled $54 million in Q4, a significant increase of $40 million compared to the prior quarter, with full-year revenues of $113 million [20] - Recurring revenues accounted for 77% of total revenues for the year, with Wealth Management segment recurring revenues at 95% for Q4 and 99% for the full year [18][19] Market Data and Key Metrics Changes - Total assets under management and advisement grew by 10% in 2023, primarily driven by portfolio performance and organic client growth in Wealth Management [8] - The event-driven strategy in the Strategic Alternatives segment achieved a performance increase of 5.4% in Q4 and 10.5% for the year, marking 30 consecutive years of positive performance [10] Company Strategy and Development Direction - The company aims to enhance its global footprint and execute strategic acquisitions through a robust M&A pipeline, supported by a recent strategic investment of up to $450 million from Allianz X and Constellation Wealth Capital [7][13] - Focus areas for 2024 include raising AlTi's profile in capital markets, increasing client base, and enhancing service offerings across multiple jurisdictions [12][14] - The company is committed to streamlining operations and improving core operations while establishing best practices throughout the organization [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve long-term profitable growth, emphasizing the importance of strategic partnerships and operational milestones achieved in 2023 [24][25] - The company does not anticipate further significant impairments in 2024, as much of the restructuring work is complete [9][23] - Management highlighted a positive outlook for the event-driven strategy, despite some regulatory and political challenges affecting deal flow [41] Other Important Information - The company identified $16 million in annualized cost savings initiatives, expected to be fully realized in Q3 2024 [5][33] - Impairment charges in Q4 included $51 million related to the Strategic Alternatives segment, with expectations that such impairments will not recur in future quarters [20][38] Q&A Session Summary Question: Discuss the relative attractiveness of Wealth Management deals versus Asset Management deals - Management indicated that both business lines offer strategic and accretive deals, with varying relevance based on geographic expansion and product offerings [27][28] Question: Why change the name of the asset management segment? - The name "Strategic Alternatives" better reflects the underlying businesses and aligns with long-term investment trends [30][31] Question: Outlook for operating expenses in 2024? - Management noted ongoing progress in reducing operating expenses, with $16 million in cost savings expected to be realized by Q3 2024 [32][33] Question: Net client flows in the Wealth Management segment? - The U.S. business experienced pleasing flows driven by market performance, while international flows were relatively flat [34][35] Question: Details on impairments in real estate? - Impairments were driven by restructuring efforts and adjustments to carried interest receivables, with expectations that such impairments will not continue [37][38] Question: Outlook for the merger arbitrage fund and event-driven strategy? - The event-driven strategy has a strong historical performance, and while the environment is currently stable, there are some regulatory challenges [39][41]
AlTi (ALTI) - 2023 Q4 - Earnings Call Transcript