AlTi Tiedemann Global welcomes strategic investment of up to $450m from Allianz X and Constellation Wealth Capital
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Insights
The strategic investment of up to $450 million into AlTi Global, Inc. by Allianz X and Constellation Wealth Capital represents a significant infusion of capital into the wealth management sector, particularly for the ultra-high-net-worth (UHNW) segment. The investment is poised to fuel AlTi's growth through both mergers and acquisitions (M&A) and organic strategies, indicating an aggressive expansion plan. This move suggests confidence in AlTi's business model and its potential to capture a larger market share in the UHNW domain.
From a financial perspective, the decision to issue both Class A Common Stock and Series A and C Convertible Preferred Stock as part of the investment structure provides AlTi with immediate capital while potentially offering Allianz X and CWC the opportunity for conversion to equity at a later stage, which could be beneficial if AlTi's valuation appreciates. The warrants for Class A Common Stock attached to these investments could further align the interests of the investors with the long-term performance of the company. However, the beneficial ownership limitations and lock-up restrictions on the stock purchased by Allianz X and CWC could impact the liquidity and immediate tradability of these securities.
For stakeholders, the short-term implications include potential dilution of existing shares due to the issuance of new stock. Long-term, the investments could lead to increased scale and profitability if AlTi successfully executes its growth strategy. The presence of Allianz X and CWC representatives on AlTi's Board could also bring strategic governance benefits, given their industry expertise.
AlTi's focus on the UHNW segment is notable, as this market is characterized by high demand for personalized and sophisticated investment solutions. The strategic partnership with Allianz X and CWC is likely to enhance AlTi's offerings in alternatives, a class that has been gaining traction among UHNW individuals due to its potential for high returns and diversification benefits. The investment announcement could signal to the market that AlTi is poised to become a more formidable competitor in the wealth management industry, potentially reshaping market dynamics.
It is also essential to consider the broader industry trend where large financial institutions and insurers are increasingly investing in wealth management firms to diversify their revenue streams and capitalize on the lucrative UHNW segment. The strategic partnership with Allianz offers AlTi an opportunity to leverage Allianz's extensive customer base and global presence, which could facilitate AlTi's international expansion initiatives and enhance its global footprint.
The transaction details indicate a structured approach to investment, with phased investments and additional funding tied to specific expansion initiatives, suggesting a measured and milestone-based growth strategy. This could reassure investors of a disciplined approach to capital allocation.
The transaction's legal structure, involving the issuance of different classes of convertible preferred stock and common stock warrants, reflects a complex investment arrangement that balances immediate funding needs with future strategic alignment. The beneficial ownership limitations and lock-up restrictions are typical governance mechanisms to prevent market manipulation and ensure investor commitment. However, these restrictions can also affect investor rights and the overall governance of the company.
The right of Allianz X to nominate two directors to AlTi's board, contingent on maintaining a minimum ownership threshold, is a strategic move that ensures Allianz X has a say in the company's direction, aligning with its significant investment stake. This governance detail is crucial as it can influence company policy and strategic decisions.
Lastly, the transaction's dependency on regulatory approvals and AlTi's stockholder consent is a standard procedure in such deals, ensuring compliance with legal and financial regulations. The filing of a current report on Form 8-K with the Securities and Exchange Commission is indicative of the transparency and regulatory compliance expected in such transactions.
Investment accelerates AlTi’s strategy to become the leading global independent wealth management platform for the ultra-high-net-worth segment.
Investment to be used principally to execute AlTi’s global mergers and acquisitions pipeline and organic growth strategy.
AlTi will use the capital principally to fund its mergers and acquisitions (“M&A”) pipeline and organic growth activities. This will expand the scale and reach of AlTi’s global ultra-high-net-worth (“UHNW”) wealth management and strategic alternatives business in existing and new markets, leveraging the industry expertise and relationships of both Allianz and CWC. The partnership with Allianz offers opportunities to provide additional solutions to service both companies’ clients more holistically.
Nazim Cetin, Chief Executive Officer of Allianz X, and another Allianz representative will be appointed to AlTi’s Board of Directors, and CWC will have an observer seat on the Board, upon completion of their respective investments.
AlTi management will hold a conference call to present the details of the transactions on February 22, 2024 at 5:00 pm, Eastern Time.
Michael Tiedemann, Chief Executive Officer of AlTi Tiedemann Global, said:
“This investment accelerates AlTi’s trajectory to become the leading global independent UHNW wealth management platform, with strategic and targeted expertise in alternatives. The investment further validates the power of our unique business model which combines a global multi-family office and alternatives platform.”
Dr. Nazim Cetin, Chief Executive Officer of Allianz X, said:
“Allianz X brings capital and skills to our portfolio companies to foster innovation, fuel growth and realize their ambitions. Our investment in AlTi demonstrates our approach as well as our conviction in wealth management and alternatives, and we believe it will unlock opportunities for scale, new revenue streams and societal impact for the Allianz Group.”
Karl Heckenberg, CWC's Founder and Managing Partner, said:
“This partnership represents a significant milestone in our ongoing mission to support innovation and excellence in the wealth management industry. We believe AlTi is ideally positioned to capitalize on future opportunities, in line with their impressive strategic vision.”
Transaction Details
Allianz X Investment:
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$250 million -
$110 million -
$140 million
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-
Option to invest up to an additional
$50 million - Warrants to purchase 5 million shares of Class A Common Stock.
- The Series A Convertible Preferred Stock and Warrants will be subject to certain beneficial ownership limitations, and Allianz will be subject to certain lock-up restrictions with respect to the Class A Common Stock it acquires at closing.
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Right to nominate two directors to AlTi’s board will continue so long as Allianz X holds at least
50% of the Class A Common Stock acquired at closing.
CWC Investment:
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$150 million -
An initial investment of
$115 million $35 million - Warrants to purchase 2 million shares of Class A Common Stock.
- The Series C Convertible Preferred Stock and Warrants will be subject to certain voting limitations, and CWC will be subject to certain lock-up restrictions with respect to its Series C Convertible Preferred Stock.
The transactions are subject to customary closing conditions, including in the case of Allianz X, receipt of certain approvals by regulatory authorities and by AlTi’s stockholders.
Further details are included in the Company’s current report on Form 8-K to be filed with the Securities and Exchange Commission.
Advisors
Oppenheimer & Co. Inc. is acting as exclusive financial advisor to AlTi Global, Inc. and Cadwalader, Wickersham & Taft LLP is acting as its legal advisor. Ardea Partners LP is serving as exclusive financial advisor to Allianz X and Sullivan & Cromwell LLP is serving as its legal advisor. Gibson, Dunn & Crutcher LLP is acting as legal advisor to Constellation Wealth Capital.
Conference Call
AlTi management will host a conference call and webcast on Thursday, February 22, 2024, at 5:00 pm, Eastern Time to discuss the transaction. The conference call and supplemental materials will be available on the Events & Presentations section of the AlTi Investor Relations website. Participants are invited to access the conference call by dialing one of the following numbers:
- Domestic: (877) 704-4453
- International: (201) 389-0920
The webcast replay will be available after the conclusion of the call and remain on the AlTi Investor Relations website for one year following the conference call.
About AlTi
AlTi is a leading independent global wealth and alternatives manager providing entrepreneurs, multi-generational families, institutions, and emerging next-generation leaders with fiduciary capabilities as well as alternative investment strategies and advisory services. AlTi’s comprehensive offering is underscored by a commitment to impact or values-aligned investing and generating a net positive impact through its business activities. The firm currently manages or advises on approximately
About Allianz X
Allianz X invests in digital frontrunners in ecosystems relevant to insurance and asset management. It has a portfolio of over 25 companies and AUM of more than
About Allianz
The Allianz Group is one of the world's leading insurers and asset managers with more than 122 million* private and corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around
* Including non-consolidated entities with Allianz customers.
** As of September 30, 2023.
*** As reported – not adjusted to reflect the application of IFRS 9 and IFRS 17.
About Constellation Wealth Capital
Constellation Wealth Capital is an alternative asset management platform dedicated to the wealth management sector. CWC provides flexible, long-term capital solutions, and strategic advisory support to scaled wealth management platforms.
CWC leverages its deep industry experience and relationships for the benefit of its partner firms. Learn more at www.constellationwealthcapital.com.
Forward-Looking Statements
Certain statements made in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target,” “guidance,” “outlook“ or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements may include, but are not limited to, statements regarding the consummation of the investments, the entry into the transaction documents, our M&A pipeline and expected benefits of the investments. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including the Company’s ability to successfully consummate the investments; and obtain stockholder approval; the Company’s projected financial information, growth rate, and market opportunity; the effect of economic downturns and political and market conditions beyond the Company’s control, including a reduction in consumer discretionary spending that could adversely affect the Company’s business, financial condition, results of operations and prospects; company’s ability to grow and manage growth profitably; Company’s ability to raise financing in the future, if and when needed; the impact of applicable laws and regulations, whether in
Additional Information and Where to Find It
The Company intends to file with the Securities and Exchange Commission (the “SEC”) a proxy statement and other relevant materials in connection with the transactions and the Company’s solicitation of proxies for use at either the 2024 annual meeting of stockholders or a special meeting of common stockholders, or at any adjournment or postponement thereof, to vote in favor of approval of amendments to the Company’s amended and restated certificate of incorporation and the issuance of an amount of Class A Common Stock to Allianz equal to
The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies in connection with the transactions. Information about those executive officers and directors of the Company and their ownership of the Company’s common stock is set forth in the Company’s Annual Report on Form 10-K, which was filed with the SEC on April 17, 2023. Investors and security holders may obtain additional information regarding direct and indirect interests of the Company and its executive officers and directors in the transactions by reading the proxy statement and prospectus when it becomes available.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221248373/en/
AlTi Global Investor Relations:
Lily Arteaga, Head of Investor Relations, investor@alti-global.com
AlTi Global Media Relations:
Alex Jorgensen, pro-alti@prosek.com
Allianz X Media Relations:
Gregor Wills, Head of PR & Communications, gregor.wills@allianz.com
Constellation Wealth Capital Media Relations:
Mike Geller, mgeller@prosek.com
Source: AlTi Global, Inc.
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