Silvercrest Asset Management Group Inc. Reports Q4 and Year-End 2023 Results
- Silvercrest's discretionary AUM increased by $1.0 billion in 2023, reaching $21.9 billion, with total AUM growing by $4.4 billion to $33.3 billion.
- Revenue decreased by $5.8 million to $117.4 million for 2023, due to market depreciation offset by market appreciation and client inflows.
- Adjusted EBITDA was $26.9 million for 2023, down from $32.0 million in 2022, with Adjusted Diluted Earnings per Share at $1.12, a decrease from $1.35 in 2022.
- Despite AUM growth, revenue lagged, leading to a decrease in financial performance for Silvercrest in 2023.
- The company's pipeline of new business opportunities has improved, with OCIO AUM rising to $1.7 billion and a strengthened consultant relationship.
- Total equity was $85.0 million at the end of 2023, with cash and cash equivalents at $70.3 million.
- Silvercrest will host a conference call on March 8, 2024, to discuss the results.
- Revenue decreased by 4.7% in 2023, indicating a struggle to capitalize on market gains.
- Adjusted EBITDA and earnings per share declined in 2023, showcasing a challenging financial year for Silvercrest.
- Total expenses increased by 16.5% in 2023 compared to the previous year, impacting the company's profitability.
- Compensation and benefits expenses rose, affecting the company's financial performance negatively.
- Market appreciation and net client inflows were insufficient to offset the revenue decline for the year.
Insights
The reported results from Silvercrest Asset Management Group Inc. show a mixed financial performance, with discretionary assets under management (AUM) growing by 4.8% over the year, yet revenue declining by 4.7%. This dichotomy suggests that while the company has succeeded in attracting assets, possibly due to market appreciation and net client inflows, it has not been able to translate this growth effectively into top-line revenue.
One critical aspect to consider is the company's billing practice, which is primarily on a quarterly basis in advance. This could mean that revenue recognition might lag behind AUM growth, especially if the latter occurs towards the end of a quarter. Furthermore, the increase in compensation costs, which rose to 59% of revenue from the usual 55%, indicates a potential strain on profitability. The adjustments made to total compensation for 2023 might reflect attempts to retain talent in a competitive market, but they have also contributed to a decrease in Adjusted EBITDA margin year-over-year.
Investors should note the company's flat year-over-year revenue for Q4 2023, despite an increase in AUM. This suggests that while the company's asset base is growing, the ability to monetize these assets efficiently may be challenged, possibly due to pricing pressures or a lag in billing cycles. The company's outlook for 2024 appears optimistic, with an improved pipeline of new business opportunities and increased OCIO AUM, which may signal potential revenue growth if these opportunities are successfully converted into earnings.
The financial services sector, particularly asset management, is highly sensitive to market conditions. Silvercrest's experience of concentrated equity market gains in large cap technology stocks and a subsequent broadening of market participation aligns with broader industry trends. The company's specific mention of a volatile market environment in 2022 and hopes for recovery in 2023 provides context to the challenges faced by asset managers in attracting and retaining clients amid uncertainty.
Another point of interest is the institutional search environment, which remains slow according to Silvercrest. This could be indicative of a larger trend where institutional investors are taking more time to allocate funds, possibly due to increased due diligence in an uncertain economic climate. However, Silvercrest's increased actionable institutional business pipeline and the growth of its outsourced chief investment officer (OCIO) services may reflect a strategic pivot that could cater to evolving client needs, such as the demand for more bespoke investment solutions.
For stakeholders, the company's focus on new initiatives and value-added hires suggests an investment in future growth. However, the impact of such investments on short-term profitability will need to be monitored, as increased expenses could potentially dilute earnings if not accompanied by proportional revenue growth.
The performance of Silvercrest Asset Management Group Inc. can be seen as a microcosm of the broader economic environment. The company's lag in revenue growth despite an increase in AUM could be reflective of the macroeconomic uncertainties that have characterized the past year, including potential recession fears, inflationary pressures and geopolitical tensions.
The company's focus on new initiatives and the expansion of its OCIO services may be seen as a response to the changing economic landscape, where diversification and specialized investment strategies are increasingly sought after. Furthermore, the significant lag in revenue growth compared to AUM growth raises questions about the company's revenue model and the scalability of its operations amid fluctuating market conditions.
From an economic standpoint, the increase in compensation costs could be a response to inflationary pressures, as firms may need to offer higher salaries and bonuses to attract and retain talent. The impact of such cost increases on the company's margins is evident in the decline of the Adjusted EBITDA margin, highlighting the delicate balance between employee compensation and profitability in the asset management industry.
NEW YORK, March 07, 2024 (GLOBE NEWSWIRE) -- Silvercrest Asset Management Group Inc. (NASDAQ: SAMG) (the “Company” or “Silvercrest”) today reported the results of its operations for the quarter and year ended December 31, 2023.
Business Update
After the volatile and difficult market environment of 2022, we hoped had 2023 would lead to improved markets, helping to recover both Silvercrest’s discretionary assets under management (“AUM”) as well as top line revenue. The year 2023 was unusual. Equity market gains were highly concentrated in a handful of large cap technology companies. As a result of such narrow leadership and economic uncertainty, during the third quarter 2023 earnings call, I stated we could face challenging market conditions at Silvercrest for another year. During the fourth quarter of 2023, company participation in equity market gains broadened significantly. Progress has continued into 2024, setting the stage for a better environment for our business.
During the fourth quarter of 2023, Silvercrest’s discretionary AUM rose by
Silvercrest's revenue for the year, however, significantly lagged increases in assets under management due to broad market gains concentrated in the fourth quarter of 2023. Silvercrest primarily bills quarterly in advance. Revenue decreased by
Our financial results in the fourth quarter also were negatively affected by adjustments to total compensation for 2023, with total recurring cash compensation as a percentage of revenue rising to
Silvercrest's pipeline of new business opportunities have significantly improved since the fourth quarter of 2023. While the institutional search environment remains slow, Silvercrest’s actionable institutional business pipeline has increased to
Silvercrest has never been busier with new initiatives. We are focused on those new opportunities, as well as investments to drive future growth in the business, including value-added hires.
Fourth Quarter 2023 Highlights
- Total AUM of
$33.3 billion , inclusive of discretionary AUM of$21.9 billion and non-discretionary AUM of$11.4 billion at December 31, 2023. - Revenue of
$28.5 million . - U.S. Generally Accepted Accounting Principles (“GAAP”) consolidated net loss and net loss attributable to Silvercrest of
$0.6 million and$0.4 million , respectively. - Basic and diluted net loss per share of
$0.05 and$0.04 , respectively. - Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)1 of
$2.6 million . - Adjusted net income1 of
$1.0 million . - Adjusted basic and diluted earnings per share1, 2 of
$0.08 and$0.07 , respectively.
The table below presents a comparison of certain GAAP and non-GAAP (“Adjusted”) financial measures and AUM.
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||||||
| (in thousands except as indicated) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 28,542 | $ | 28,492 | $ | 117,410 | $ | 123,217 | ||||||||
| (Loss) income before other income (expense), net | $ | (969 | ) | $ | 4,121 | $ | 18,819 | $ | 38,562 | |||||||
| Net (loss) income | $ | (642 | ) | $ | 3,281 | $ | 15,183 | $ | 30,793 | |||||||
| Net (loss) income margin | (2.2 | )% | 11.5 | % | 12.9 | % | 25.0 | % | ||||||||
| Net (loss) income attributable to Silvercrest | $ | (411 | ) | $ | 2,057 | $ | 9,094 | $ | 18,828 | |||||||
| Net (loss) income per basic share | $ | (0.05 | ) | $ | 0.22 | $ | 0.96 | $ | 1.92 | |||||||
| Net (loss) income per diluted share | $ | (0.04 | ) | $ | 0.22 | $ | 0.96 | $ | 1.92 | |||||||
| Adjusted EBITDA1 | $ | 2,581 | $ | 4,436 | $ | 26,878 | $ | 32,021 | ||||||||
| Adjusted EBITDA Margin1 | 9.0 | % | 15.6 | % | 22.9 | % | 26.0 | % | ||||||||
| Adjusted net income1 | $ | 1,049 | $ | 2,193 | $ | 16,104 | $ | 19,682 | ||||||||
| Adjusted basic earnings per share1, 2 | $ | 0.08 | $ | 0.16 | $ | 1.16 | $ | 1.40 | ||||||||
| Adjusted diluted earnings per share1, 2 | $ | 0.07 | $ | 0.15 | $ | 1.12 | $ | 1.35 | ||||||||
| Assets under management at period end (billions) | $ | 33.3 | $ | 28.9 | $ | 33.3 | $ | 28.9 | ||||||||
| Average assets under management (billions)3 | $ | 32.3 | $ | 28.2 | $ | 31.1 | $ | 30.6 | ||||||||
| Discretionary assets under management (billions) | $ | 21.9 | $ | 20.9 | $ | 21.9 | $ | 20.9 | ||||||||
________________________
| 1 | Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in Exhibits 2 and 3. |
| 2 | Adjusted basic and diluted earnings per share measures for the three and twelve months ended December 31, 2023 are based on the number of shares of Class A common stock and Class B common stock outstanding as of December 31, 2023. Adjusted diluted earnings per share are further based on the addition of unvested restricted stock units, and non-qualified stock options to the extent dilutive at the end of the reporting period. |
| 3 | We have computed average AUM by averaging AUM at the beginning of the applicable period and AUM at the end of the applicable period. |
AUM at
Silvercrest’s discretionary assets under management increased by
Silvercrest’s discretionary assets under management increased by
Fourth Quarter 2023 vs. Fourth Quarter 2022
Revenue increased by
Total expenses increased by
Consolidated net loss was
Adjusted EBITDA1 was
Year Ended December 31, 2023 vs. Year Ended December 31, 2022
Revenue decreased by
Total expenses increased by
Consolidated net income was
Adjusted EBITDA1 was
Liquidity and Capital Resources
Cash and cash equivalents were
Silvercrest Asset Management Group Inc.’s total equity was
Non-GAAP Financial Measures
To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, we supplement our consolidated financial statements presented on a basis consistent with GAAP with Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share, which are non-GAAP financial measures of earnings. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
- EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.
- We define Adjusted EBITDA as EBITDA without giving effect to the Delaware franchise tax, professional fees associated with acquisitions or financing transactions, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense. We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted EBITDA, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings of the Company, taking into account earnings attributable to both Class A and Class B shareholders.
- Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenue. We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted EBITDA Margin, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring profitability of the Company, taking into account profitability attributable to both Class A and Class B shareholders.
- Adjusted Net Income represents recurring net income without giving effect to professional fees associated with acquisitions or financing transactions, losses on forgiveness of notes receivable from our principals, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense. Furthermore, Adjusted Net Income includes income tax expense assuming a blended corporate rate of
26% . We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted Net Income, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring income of the Company, taking into account income attributable to both Class A and Class B shareholders. - Adjusted Earnings Per Share represents Adjusted Net Income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic Adjusted Earnings Per Share, and to the extent dilutive, we add unvested RSUs and non-qualified stock options to the total shares outstanding to compute diluted Adjusted Earnings Per Share. As a result of our structure, which includes a non-controlling interest, we feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted Earnings Per Share, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings per share of the Company as a whole as opposed to being limited to our Class A common stock.
Conference Call
The Company will host a conference call on March 8, 2024, at 8:30 am (Eastern Time) to discuss these results. Hosting the call will be Richard R. Hough III, Chief Executive Officer and President and Scott A. Gerard, Chief Financial Officer. Listeners may access the call by dialing 1-844-836-8743 or for international listeners the call may be accessed by dialing 1-412-317-5723. A live, listen-only webcast will also be available via the investor relations section of www.silvercrestgroup.com. An archived replay of the call will be available after the completion of the live call on the Investor Relations page of the Silvercrest website at http://ir.silvercrestgroup.com/.
Forward-Looking Statements and Other Disclosures
This release contains, and from time to time our management may make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and assumptions. These statements are only predictions based on our current expectations and projections about future events. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements include, but are not limited to: incurrence of net losses; fluctuations in quarterly and annual results; adverse economic or market conditions; our expectations with respect to future levels of assets under management, inflows and outflows; our ability to retain clients; our ability to maintain our fee structure; our particular choices with regard to investment strategies employed; our ability to hire and retain qualified investment professionals; the cost of complying with current and future regulation coupled with the cost of defending ourselves from related investigations or litigation; failure of our operational safeguards against breaches in data security, privacy, conflicts of interest or employee misconduct; our expected tax rate; and our expectations with respect to deferred tax assets, adverse economic or market conditions, including the continued adverse effects of the coronavirus pandemic; incurrence of net losses; adverse effects of management focusing on implementation of a growth strategy; failure to develop and maintain the Silvercrest brand; and other factors disclosed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2022, which is accessible on the U.S. Securities and Exchange Commission’s website at www.sec.gov. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
About Silvercrest
Silvercrest was founded in April 2002 as an independent, employee-owned registered investment adviser. With offices in New York, Boston, Virginia, New Jersey, California and Wisconsin, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families and select institutional investors.
Silvercrest Asset Management Group Inc.
Contact: Richard Hough
212-649-0601
rhough@silvercrestgroup.com
Exhibit 1
| Silvercrest Asset Management Group Inc. Condensed Consolidated Statements of Operations (Unaudited and in thousands, except share and per share amounts or as noted) | ||||||||
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| Revenue | ||||||||
| Management and advisory fees | $ | 112,794 | $ | 118,725 | ||||
| Performance fees | — | 2 | ||||||
| Family office services | 4,616 | 4,490 | ||||||
| Total revenue | 117,410 | 123,217 | ||||||
| Expenses | ||||||||
| Compensation and benefits | 72,619 | 71,610 | ||||||
| General and administrative | 25,972 | 13,045 | ||||||
| Total expenses | 98,591 | 84,655 | ||||||
| Income before other (expense) income, net | 18,819 | 38,562 | ||||||
| Other (expense) income, net | ||||||||
| Other (expense) income, net | 76 | 260 | ||||||
| Interest income | 946 | 24 | ||||||
| Interest expense | (421 | ) | (416 | ) | ||||
| Equity income from investments | 73 | (31 | ) | |||||
| Total other (expense) income, net | 674 | (163 | ) | |||||
| Income before provision for income taxes | 19,493 | 38,399 | ||||||
| Provision for income taxes | (4,310 | ) | (7,606 | ) | ||||
| Net income | 15,183 | 30,793 | ||||||
| Less: net income attributable to non-controlling interests | (6,089 | ) | (11,965 | ) | ||||
| Net income attributable to Silvercrest | $ | 9,094 | $ | 18,828 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.96 | $ | 1.92 | ||||
| Diluted | $ | 0.96 | $ | 1.92 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 9,431,404 | 9,792,928 | ||||||
| Diluted | 9,464,339 | 9,821,441 | ||||||
Exhibit 2
| Silvercrest Asset Management Group Inc. Condensed Consolidated Statements of Operations (Unaudited and in thousands, except share and per share amounts or as noted) | ||||||||
| For the Three Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| Revenue | ||||||||
| Management and advisory fees | $ | 27,349 | $ | 27,225 | ||||
| Family office services | 1,193 | 1,267 | ||||||
| Total revenue | 28,542 | 28,492 | ||||||
| Expenses | ||||||||
| Compensation and benefits | 22,674 | 18,709 | ||||||
| General and administrative | 6,837 | 5,662 | ||||||
| Total expenses | 29,511 | 24,371 | ||||||
| (Loss) income before other (expense) income, net | (969 | ) | 4,121 | |||||
| Other (expense) income, net | ||||||||
| Other (expense) income, net | 45 | 141 | ||||||
| Interest income | 525 | 12 | ||||||
| Interest expense | (107 | ) | (146 | ) | ||||
| Unrealized gain/loss | — | 3 | ||||||
| Equity income from investments | 73 | (31 | ) | |||||
| Total other (expense) income, net | 536 | (21 | ) | |||||
| (Loss) income before provision for income taxes | (433 | ) | 4,100 | |||||
| Provision for income taxes | (209 | ) | (819 | ) | ||||
| Net (loss) income | (642 | ) | 3,281 | |||||
| Less: net loss (income) attributable to non-controlling interests | 231 | (1,224 | ) | |||||
| Net (loss) income attributable to Silvercrest | $ | (411 | ) | $ | 2,057 | |||
| Net (loss) income per share: | ||||||||
| Basic | $ | (0.05 | ) | $ | 0.22 | |||
| Diluted | $ | (0.04 | ) | $ | 0.22 | |||
| Weighted average shares outstanding: | ||||||||
| Basic | 9,368,579 | 9,603,073 | ||||||
| Diluted | 9,368,579 | 9,635,047 | ||||||
Exhibit 3
| Silvercrest Asset Management Group Inc. Reconciliation of GAAP to non-GAAP (“Adjusted”) Adjusted EBITDA Measure (Unaudited and in thousands, except share and per share amounts or as noted) | ||||||||||||||||
| Adjusted EBITDA | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Reconciliation of non-GAAP financial measure: | ||||||||||||||||
| Net (loss) income | $ | (642 | ) | $ | 3,281 | $ | 15,183 | $ | 30,793 | |||||||
| Provision for income taxes | 209 | 819 | 4,310 | 7,606 | ||||||||||||
| Delaware Franchise Tax | 50 | 50 | 200 | 200 | ||||||||||||
| Interest expense | 107 | 146 | 421 | 416 | ||||||||||||
| Interest income | (525 | ) | (12 | ) | (946 | ) | (24 | ) | ||||||||
| Depreciation and amortization | 1,002 | 979 | 4,014 | 3,883 | ||||||||||||
| Equity-based compensation | 580 | 360 | 1,627 | 1,149 | ||||||||||||
| Other adjustments (A) | 1,800 | (1,187 | ) | 2,069 | (12,002 | ) | ||||||||||
| Adjusted EBITDA | $ | 2,581 | $ | 4,436 | $ | 26,878 | $ | 32,021 | ||||||||
| Adjusted EBITDA Margin | 9.0 | % | 15.6 | % | 22.9 | % | 26.0 | % | ||||||||
(a) Other adjustments consist of the following:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Acquisition costs (a) | $ | — | $ | 5 | $ | 5 | $ | 37 | ||||||||
| Severance | 52 | — | 71 | 13 | ||||||||||||
| Other (b) | 1,748 | (1,192 | ) | 1,993 | (12,052 | ) | ||||||||||
| Total other adjustments | $ | 1,800 | $ | (1,187 | ) | $ | 2,069 | $ | (12,002 | ) | ||||||
- For the twelve months ended December 31, 2023, represents professional fees of
$5 related to the acquisition of Cortina. For the three months ended December 31, 2022, represents professional fees of$5 related to the acquisition of Cortina. For the twelve months ended December 31, 2022, represents insurance costs of$22 and professional fees of$15 related to the acquisition of Cortina. - For the three months ended December 31, 2023, represents a variable compensation payment of
$1,667 related to the difference between the number of non-qualified stock options granted to an existing Class B unit holder as determined using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input, an adjustment to the fair value of the tax receivable agreement of ($38) , an ASC 842 rent adjustment of$48 related to the amortization of property lease incentives, software implementation costs of$7 , a fair value adjustment to the Neosho contingent purchase price consideration of$24 , professional fees related to a transfer pricing project of$37 and legal fees related to the startup of a fund of$2. For the twelve months ended December 31, 2023, represents a variable compensation payment of$1,667 related to the difference between the number of non-qualified stock options granted to an existing Class B unit holder as determined using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input, an adjustment to the fair value of the tax receivable agreement of$2 , an ASC 842 rent adjustment of$192 related to the amortization of property lease incentives, moving costs of$35 , software implementation costs of$35 , professional fees related to a transfer pricing project of$37 , legal fees related to the startup of a fund of$2 , a fair value adjustment to the Neosho contingent purchase price consideration of$24 and a fair value adjustment to the Cortina contingent purchase price consideration of ($2) . For the three months ended December 31, 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($838) , fair value adjustment to the Neosho contingent purchase price consideration of ($299) , a fair value adjustment to the tax receivable agreement of ($109) , an ASC 842 rent adjustment of$48 related to the amortization of property lease incentives and system implementation costs of$6. For the twelve months ended December 31, 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($11,781) , a fair value adjustment to the Neosho contingent purchase price consideration of ($299) , an adjustment to the fair value of the tax receivable agreement of ($202) , an ASC 842 rent adjustment of$192 related to the amortization of property lease incentives, expenses related to obtaining a business license of$26 , system implementation costs of$6 and expenses related to the Coronavirus pandemic of$6.
Exhibit 4
| Silvercrest Asset Management Group Inc. Reconciliation of GAAP to non-GAAP (“Adjusted”) Adjusted Net Income and Adjusted Earnings Per Share Measures (Unaudited and in thousands, except per share amounts or as noted) | ||||||||||||||||
| Adjusted Net Income and Adjusted Earnings Per Share | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Reconciliation of non-GAAP financial measure: | ||||||||||||||||
| Net (loss) income | $ | (642 | ) | $ | 3,281 | $ | 15,183 | $ | 30,793 | |||||||
| Consolidated GAAP Provision for income taxes | 209 | 819 | 4,310 | 7,606 | ||||||||||||
| Delaware Franchise Tax | 50 | 50 | 200 | 200 | ||||||||||||
| Other adjustments (A) | 1,800 | (1,187 | ) | 2,069 | (12,002 | ) | ||||||||||
| Adjusted earnings before provision for income taxes | 1,417 | 2,963 | 21,762 | 26,597 | ||||||||||||
| Adjusted provision for income taxes: | ||||||||||||||||
| Adjusted provision for income taxes ( | (368 | ) | (770 | ) | (5,658 | ) | (6,915 | ) | ||||||||
| Adjusted net income | $ | 1,049 | $ | 2,193 | $ | 16,104 | $ | 19,682 | ||||||||
| GAAP net (loss) income per share (B): | ||||||||||||||||
| Basic | $ | (0.05 | ) | $ | 0.22 | $ | 0.96 | $ | 1.92 | |||||||
| Diluted | $ | (0.04 | ) | $ | 0.22 | $ | 0.96 | $ | 1.92 | |||||||
| Adjusted earnings per share/unit (B): | ||||||||||||||||
| Basic | $ | 0.08 | $ | 0.16 | $ | 1.16 | $ | 1.40 | ||||||||
| Diluted | $ | 0.07 | $ | 0.15 | $ | 1.12 | $ | 1.35 | ||||||||
| Shares/units outstanding: | ||||||||||||||||
| Basic Class A shares outstanding | 9,479 | 9,560 | 9,479 | 9,560 | ||||||||||||
| Basic Class B shares/units outstanding | 4,431 | 4,545 | 4,431 | 4,545 | ||||||||||||
| Total basic shares/units outstanding | 13,910 | 14,105 | 13,910 | 14,105 | ||||||||||||
| Diluted Class A shares outstanding (C) | 9,515 | 9,592 | 9,515 | 9,592 | ||||||||||||
| Diluted Class B shares/units outstanding (D) | 4,820 | 5,011 | 4,820 | 5,011 | ||||||||||||
| Total diluted shares/units outstanding | 14,335 | 14,603 | 14,335 | 14,603 | ||||||||||||
- See A in Exhibit 2.
- GAAP earnings per share is strictly attributable to Class A shareholders. Adjusted earnings per share takes into account earnings attributable to both Class A and Class B shareholders.
- Includes 35,554 and 31,974 unvested restricted stock units at December 31, 2023 and 2022, respectively.
- Includes 240,998 and 212,927 unvested restricted stock units at December 31, 2023 and 2022, respectively, and 147,506 and 252,904 unvested non-qualified options at December 31, 2023 and 2022, respectively.
Exhibit 5
| Silvercrest Asset Management Group Inc. Condensed Consolidated Statements of Financial Condition (Unaudited and in thousands) | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 70,301 | $ | 77,432 | ||||
| Investments | 219 | 146 | ||||||
| Receivables, net | 9,526 | 9,118 | ||||||
| Due from Silvercrest Funds | 558 | 577 | ||||||
| Furniture, equipment and leasehold improvements, net | 7,422 | 5,021 | ||||||
| Goodwill | 63,675 | 63,675 | ||||||
| Operating lease assets | 19,612 | 23,653 | ||||||
| Finance lease assets | 330 | 342 | ||||||
| Intangible assets, net | 18,933 | 21,349 | ||||||
| Deferred tax asset—tax receivable agreement | 5,034 | 6,915 | ||||||
| Prepaid expenses and other assets | 3,964 | 4,447 | ||||||
| Total assets | $ | 199,574 | $ | 212,675 | ||||
| Liabilities and Equity | ||||||||
| Accounts payable and accrued expenses | $ | 1,990 | $ | 1,704 | ||||
| Accrued compensation | 37,371 | 39,734 | ||||||
| Borrowings under credit facility | 2,719 | 6,337 | ||||||
| Operating lease liabilities | 26,277 | 29,552 | ||||||
| Finance lease liabilities | 336 | 344 | ||||||
| Deferred tax and other liabilities | 9,071 | 9,172 | ||||||
| Total liabilities | 77,764 | 86,843 | ||||||
| Commitments and Contingencies (Note 10) | ||||||||
| Equity | ||||||||
| Preferred Stock, par value and outstanding | — | — | ||||||
| Class A Common Stock, par value and 9,478,997 issued and outstanding, respectively, as of December 31, 2023; 10,068,369 and 9,559,587 issued and outstanding, respectively, as of December 31, 2022 | 103 | 101 | ||||||
| Class B Common Stock, par value and 4,545,380 issued and outstanding as of December 31, 2023 and 2022, respectively | 43 | 44 | ||||||
| Additional Paid-In Capital | 55,809 | 53,982 | ||||||
| Treasury stock, at cost, 808,455 and 508,782 shares as of December 31, 2023 and 2022, respectively | (15,057 | ) | (9,295 | ) | ||||
| Accumulated other comprehensive income (loss) | (12 | ) | — | |||||
| Retained earnings | 41,851 | 39,761 | ||||||
| Total Silvercrest Asset Management Group Inc.’s equity | 82,737 | 84,593 | ||||||
| Non-controlling interests | 39,073 | 41,239 | ||||||
| Total equity | 121,810 | 125,832 | ||||||
| Total liabilities and equity | $ | 199,574 | $ | 212,675 | ||||
Exhibit 6
Silvercrest Asset Management Group Inc.
Total Assets Under Management
(Unaudited and in billions)
Total Assets Under Management:
| Three Months Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 31.2 | $ | 27.4 | 13.9 | % | ||||||
| Gross client inflows | 0.9 | 1.0 | -10.0 | % | ||||||||
| Gross client outflows | (1.3 | ) | (1.0 | ) | 30.0 | % | ||||||
| Net client flows | (0.4 | ) | — | -100.0 | % | |||||||
| Market appreciation | 2.5 | 1.5 | 66.7 | % | ||||||||
| Ending assets under management | $ | 33.3 | $ | 28.9 | 15.2 | % | ||||||
| Year Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 28.9 | $ | 32.3 | -10.5 | % | ||||||
| Gross client inflows | 5.4 | 6.4 | -15.6 | % | ||||||||
| Gross client outflows | (4.8 | ) | (6.3 | ) | -23.8 | % | ||||||
| Net client flows | 0.6 | 0.1 | 500.0 | % | ||||||||
| Market appreciation/(depreciation) | 3.8 | (3.5 | ) | 208.6 | % | |||||||
| Ending assets under management | $ | 33.3 | $ | 28.9 | 15.2 | % | ||||||
Exhibit 7
Silvercrest Asset Management Group Inc.
Discretionary Assets Under Management
(Unaudited and in billions)
Discretionary Assets Under Management:
| Three Months Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 20.5 | $ | 19.4 | 5.7 | % | ||||||
| Gross client inflows | 0.7 | 0.9 | -22.2 | % | ||||||||
| Gross client outflows | (1.1 | ) | (0.8 | ) | 37.5 | % | ||||||
| Net client flows | (0.4 | ) | 0.1 | -500.0 | % | |||||||
| Market appreciation | 1.8 | 1.4 | 28.6 | % | ||||||||
| Ending assets under management | $ | 21.9 | $ | 20.9 | 4.8 | % | ||||||
| Twelve Months Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 20.9 | $ | 25.1 | -16.7 | % | ||||||
| Gross client inflows | 3.0 | 4.4 | -31.8 | % | ||||||||
| Gross client outflows | (4.1 | ) | (5.8 | ) | -29.3 | % | ||||||
| Net client flows | (1.1 | ) | (1.4 | ) | -21.4 | % | ||||||
| Market appreciation/(depreciation) | 2.1 | (2.8 | ) | 175.0 | % | |||||||
| Ending assets under management | $ | 21.9 | $ | 20.9 | 4.8 | % | ||||||
Exhibit 8
Silvercrest Asset Management Group Inc.
Non-Discretionary Assets Under Management
(Unaudited and in billions)
Non-Discretionary Assets Under Management:
| Three Months Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 10.7 | $ | 8.0 | 33.8 | % | ||||||
| Gross client inflows | 0.2 | 0.1 | 100.0 | % | ||||||||
| Gross client outflows | (0.2 | ) | (0.2 | ) | 0.0 | % | ||||||
| Net client flows | — | (0.1 | ) | 100.0 | % | |||||||
| Market appreciation | 0.7 | 0.1 | 600.0 | % | ||||||||
| Ending assets under management | $ | 11.4 | $ | 8.0 | 42.5 | % | ||||||
| Twelve Months Ended December 31, | % Change from December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Beginning assets under management | $ | 8.0 | $ | 7.2 | 11.1 | % | ||||||
| Gross client inflows | 2.4 | 2.0 | 20.0 | % | ||||||||
| Gross client outflows | (0.7 | ) | (0.5 | ) | 40.0 | % | ||||||
| Net client flows | 1.7 | 1.5 | 13.3 | % | ||||||||
| Market appreciation/(depreciation) | 1.7 | (0.7 | ) | 342.9 | % | |||||||
| Ending assets under management | $ | 11.4 | $ | 8.0 | 42.5 | % | ||||||
Exhibit 9
| Silvercrest Asset Management Group Inc. Assets Under Management (Unaudited and in billions) | ||||||||
| Three Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Total AUM as of September 30, | $ | 31.187 | $ | 27.403 | ||||
| Discretionary AUM: | ||||||||
| Total Discretionary AUM as of September 30, | $ | 20.462 | $ | 19.395 | ||||
| New client accounts/assets (1) | 0.188 | 0.220 | ||||||
| Closed accounts (2) | (0.103 | ) | (0.031 | ) | ||||
| Net cash inflow/(outflow) (3) | (0.479 | ) | (0.199 | ) | ||||
| Non-discretionary to Discretionary AUM (4) | (0.002 | ) | 0.054 | |||||
| Market appreciation | 1.819 | 1.412 | ||||||
| Change to Discretionary AUM | 1.423 | 1.456 | ||||||
| Total Discretionary AUM at December 31, | 21.885 | 20.851 | ||||||
| Change to Non-Discretionary AUM (5) | 0.671 | 0.046 | ||||||
| Total AUM as of December 31, | $ | 33.281 | $ | 28.905 | ||||
| Twelve Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Total AUM as of January 1, | $ | 28.905 | $ | 32.320 | ||||
| Discretionary AUM: | ||||||||
| Total Discretionary AUM as of January 1, | $ | 20.851 | $ | 25.073 | ||||
| New client accounts/assets (1) | 0.339 | 0.477 | ||||||
| Closed accounts (2) | (0.202 | ) | (0.070 | ) | ||||
| Net cash inflow/(outflow) (3) | (1.272 | ) | (1.832 | ) | ||||
| Non-discretionary to Discretionary AUM (4) | (0.032 | ) | 0.050 | |||||
| Market (depreciation)/appreciation | 2.201 | (2.847 | ) | |||||
| Change to Discretionary AUM | 1.034 | (4.222 | ) | |||||
| Total Discretionary AUM at December 31, | 21.885 | 20.851 | ||||||
| Change to Non-Discretionary AUM (5) | 3.342 | 0.807 | ||||||
| Total AUM as of December 31, | $ | 33.281 | $ | 28.905 | ||||
- Represents new account flows from both new and existing client relationships.
- Represents closed accounts of existing client relationships and those that terminated.
- Represents periodic cash flows related to existing accounts.
- Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM.
- Represents the net change to Non-Discretionary AUM.
Exhibit 10
| Silvercrest Asset Management Group Inc. Equity Investment Strategy Composite Performance1, 2 As of December 31, 2023 (Unaudited) | ||||||||||||||||||||||
| PROPRIETARY EQUITY PERFORMANCE 1, 2 | ANNUALIZED PERFORMANCE | |||||||||||||||||||||
| INCEPTION | 1-YEAR | 3-YEAR | 5-YEAR | 7-YEAR | INCEPTION | |||||||||||||||||
| Large Cap Value Composite | 4/1/02 | 13.0 | 9.6 | 13.4 | 11.7 | 9.4 | ||||||||||||||||
| Russell 1000 Value Index | 11.5 | 8.9 | 10.9 | 8.3 | 7.6 | |||||||||||||||||
| Small Cap Value Composite | 4/1/02 | 15.6 | 9.0 | 11.7 | 7.4 | 10.3 | ||||||||||||||||
| Russell 2000 Value Index | 14.6 | 7.9 | 10.0 | 6.1 | 7.9 | |||||||||||||||||
| Smid Cap Value Composite | 10/1/05 | 9.6 | 6.4 | 9.6 | 7.0 | 9.2 | ||||||||||||||||
| Russell 2500 Value Index | 16.0 | 8.8 | 10.8 | 7.1 | 7.6 | |||||||||||||||||
| Multi Cap Value Composite | 7/1/02 | 12.4 | 7.1 | 11.1 | 8.9 | 9.4 | ||||||||||||||||
| Russell 3000 Value Index | 11.7 | 8.8 | 10.8 | 8.2 | 8.1 | |||||||||||||||||
| Equity Income Composite | 12/1/03 | 7.0 | 8.4 | 9.4 | 8.7 | 10.8 | ||||||||||||||||
| Russell 3000 Value Index | 11.7 | 8.8 | 10.8 | 8.2 | 8.2 | |||||||||||||||||
| Focused Value Composite | 9/1/04 | 4.4 | 2.5 | 6.6 | 5.6 | 9.1 | ||||||||||||||||
| Russell 3000 Value Index | 11.7 | 8.8 | 10.8 | 8.2 | 8.0 | |||||||||||||||||
| Small Cap Opportunity Composite | 7/1/04 | 18.1 | 5.1 | 12.6 | 10.1 | 10.8 | ||||||||||||||||
| Russell 2000 Index | 16.9 | 2.2 | 10.0 | 7.3 | 8.0 | |||||||||||||||||
| Small Cap Growth Composite | 7/1/04 | 7.5 | (1.0 | ) | 12.8 | 12.1 | 10.5 | |||||||||||||||
| Russell 2000 Growth Index | 18.7 | (3.5 | ) | 9.2 | 8.1 | 8.2 | ||||||||||||||||
| Smid Cap Growth Composite | 1/1/06 | 11.5 | (5.3 | ) | 14.9 | 13.7 | 10.5 | |||||||||||||||
| Russell 2500 Growth Index | 18.9 | (2.7 | ) | 11.4 | 10.2 | 9.2 | ||||||||||||||||
| 1 | Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by Silvercrest Asset Management Group LLC (“SAMG LLC”), a subsidiary of Silvercrest. Performance results are gross of fees and net of commission charges. An investor’s actual return will be reduced by the advisory fees and any other expenses it may incur in the management of the investment advisory account. SAMG LLC’s standard advisory fees are described in Part 2 of its Form ADV. Actual fees and expenses will vary depending on a variety of factors, including the size of a particular account. Returns greater than one year are shown as annualized compounded returns and include gains and accrued income and reinvestment of distributions. Past performance is no guarantee of future results. This piece contains no recommendations to buy or sell securities or a solicitation of an offer to buy or sell securities or investment services or adopt any investment position. This piece is not intended to constitute investment advice and is based upon conditions in place during the period noted. Market and economic views are subject to change without notice and may be untimely when presented here. Readers are advised not to infer or assume that any securities, sectors or markets described were or will be profitable. SAMG LLC is an independent investment advisory and financial services firm created to meet the investment and administrative needs of individuals with substantial assets and select institutional investors. SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS®). |
| 2 | The market indices used to compare to the performance of Silvercrest’s strategies are as follows: |
| The Russell 1000 Index is a capitalization-weighted, unmanaged index that measures the 1000 largest companies in the Russell 3000. The Russell 1000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values. | |
| The Russell 2000 Index is a capitalization-weighted, unmanaged index that measures the 2000 smallest companies in the Russell 3000. The Russell 2000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values. | |
| The Russell 2500 Index is a capitalization-weighted, unmanaged index that measures the 2500 smallest companies in the Russell 3000. The Russell 2500 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values. | |
| The Russell 3000 Value Index is a capitalization-weighted, unmanaged index that measures those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth. |
FAQ
What was Silvercrest Asset Management Group Inc.'s total AUM at the end of 2023?
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