AlTi (US:ALTI)2024-05-10 16:15Financial Data and Key Metrics Changes - In Q1 2024, AlTi generated revenues of $51 million, a 12% decrease compared to Q1 2023, with recurring management fee revenues essentially flat during this period [17][20] - Net income for Q1 was $22 million, a significant improvement from a net loss of $90 million in the same period last year [20] - Adjusted EBITDA was $7 million, down $4 million year-over-year, but the adjusted EBITDA margin improved to 13% from 10% in the previous quarter [22][23] Business Line Data and Key Metrics Changes - Wealth Management segment revenues increased 17% to $37 million, driven by strong AUM growth and acquisitions [18] - Strategic Alternatives segment revenue totaled $14 million, a decrease of $13 million compared to Q1 2023, largely due to reduced distributions from investments [19] Market Data and Key Metrics Changes - The AUM of the U.S. business increased 15% on an organic basis over the past 12 months, reflecting strong portfolio performance and new client inflows [10] - The company reported a 96% revenue contribution from recurring fees in Q1 2024 [6] Company Strategy and Development Direction - AlTi is focusing on establishing strategic partnerships and streamlining operations away from non-core assets to enhance stable recurring revenue businesses [5][10] - The company aims to become a leading global independent multi-family office for the ultra-high-net-worth segment, with a targeted expertise in alternatives [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth prospects for both domestic and international businesses, highlighting the successful execution of organic and inorganic growth strategies [10][14] - The company anticipates that the acquisitions of East End and Envoi will significantly contribute to future revenues and EBITDA [26] Other Important Information - AlTi announced the acquisition of East End Advisors, adding nearly $6 billion of AUM, and Envoi, a $3 billion AUM wealth manager [6][8] - The company completed the sale of its European-based trust and private office service businesses for approximately $19 million [10] Q&A Session Summary Question: Update on the investment by Allianz and CWC - Management confirmed that CWC's $115 million investment has been drawn, with an additional $35 million expected this quarter, while Allianz's regulatory approvals are in progress [30] Question: Trajectory of expenses and professional fees - Management indicated a focus on reducing professional fees, with an expected decline in normalized expenses despite potential increases due to M&A activities [34][35] Question: Rationale for exiting the LXi REIT advisory business - The decision was driven by the Board of LXi, aiming for a stronger, more scalable business through the combination with LondonMetric [39] Question: Discussion on the pipeline and M&A activity - Management emphasized the importance of organic growth and talent acquisition, while also looking for strategic fits in the inorganic pipeline [42][43]