Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q3 2023 Earnings Presentation
29 slides from Acadian Asset Management's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 EARNINGS PRESENTATION November 2, 2023 4
Slide 2: Q3'23 Highlights
Q3'23 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.46 for Q3'23 compared to $0.42 for Q3'22 • ENI EPS of $0.45 for the quarter compared to $0.30 for Q3'22 • Equity Alternatives platform seeded in Q4’22 and generating good investment performance; Systematic Credit initiative will start bu
Slide 3: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q3'23 vs. Q3'22 September 30, September 30, June 30, Increase 2023 2022 (Decrease) 2023 • Total revenue increased 23.6% Management fees $ 95.3 $ 85.7 11.2 % $ 92.8 from Q3'22 primarily due to Performance fee
Slide 4: Acadian Financial Highlights
Acadian Financial Highlights • Net flows of $(0.5) billion with $(0.3) million annualized revenue impact for Q3'23 compared to net flows of $0.6 billion with annualized revenue impact of $0.3 million for Q3'22 • AUM increased 16.9% from Q3'22 mainly driven by market rebound in 2023, AUM decreased (2
Slide 5: Acadian Platform Overview
Acadian Platform Overview Business Overview • Leading, at-scale, systematic investment manager with a track record of over 35 years and $97.4 billion in AUM as of September 30, 2023 • Quant-focused investment platform offering unique capabilities in active equities, multi-asset class, and alternativ
Slide 6: Systematic Investing Capabilities Built On
Systematic Investing Capabilities Built On Economic intuition & insights of a talented, experienced, diverse group of investors: 100+ person investment team | 1600+ years’ collective experience PEOPLE 100+ advanced analytical degrees Extensive data repository supplemented by alternative data scoutin
Slide 7: Diversified Asset Base
Diversified Asset Base AUM by Client Type AUM by Client Location Commingled Public/Government Trust/UCITS 42.6% Europe 23.7% USA 17.1% 66.9% Asia Corporate/ 4.0% Union Australia 11.9% AUM by Strategy Other 5.7% Other 6.2% 9.4% Sub-advisory 12.3% Developed Markets 77.5% Emerging Markets 22.5% _______
Slide 8: Systematic Investment Capabilities
Systematic Investment Capabilities Diversified Quant offerings Equity Equity strategies apply insights from over 35 years of systematic investing experience combined with the power of data Global, Emerging Markets, Non-US, Regional EQUITY Managed volatility portfolios seek to deliver active returns
Slide 9: Sector Tailwinds Expected to Support Organic Long-term Growth
Sector Tailwinds Expected to Support Organic Long-term Growth Secular Trends Continued Scale of Investment in Growing Demand for Explosive Growth in Development of Data, Technology, and Uncorrelated Strategies Alternative Data Advanced Techniques: Talent Increasingly and Customization Machine Learni
Slide 10: Acadian's Recent and Ongoing Growth Initiatives
Acadian’s Recent and Ongoing Growth Initiatives Investment Theme Acadian Solutions • Systematic Credit ◦ We believe current industry dynamics create an attractive opportunity for Acadian to expand and diversify its business into systematic credit and that Acadian is well positioned to win a share of
Slide 11: Disciplined Execution of Long-Term Growth Strategy
Disciplined Execution of Long-Term Growth Strategy Continue • Leveraging broad quant capabilities to provide exposures and solutions sought by clients Harnessing our ◦ Ongoing initiatives including Equity Alternatives, Systematic Credit strategies and Multi-Asset Class Unique Quant Capabilities • Hi
Slide 12: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended September 30, Three Months Ended June 30, Increase Increase U.S. GAAP Basis 2023 2022 (Decrease) 2023 (Decrease) Revenue $ 107.3 $ 86.8 23.6 % $ 96.3 11.4 % Pre-tax income attributable to co
Slide 13: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees • Q3'23 ENI revenue of $106.5 million increased from Q3'22 by 23%; primarily due to higher management fees, driven by higher average AUM, and performance fees increased due to strong alpha generated for certain incent
Slide 14: ENI Operating Expenses
ENI Operating Expenses Commentary • Total ENI operating expenses reflect Affiliate operating expenses and Center expenses (excluding variable compensation) • ENI operating expenses increased to $47.4 million in Q3'23 from $44.5 million in Q3'22 driven by inflation and new investments • Q3'23 Operati
Slide 15: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of our Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractua
Slide 16: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents key employees’ share of profit from our Affiliate’s earnings • Q3'23 Distribution Ratio of 4.9% is unchanged from Q3'22 • 2023 Distribution Ratio expected to be 4%-6%; mix of core and performance fee profits will impact the ratio Affiliate
Slide 17: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) September 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 143.1 $ 108.4 • September 30 net leverage ratio (third party borrowings Investment advisory fees receivable 103.8 122.5 and revolving credit facility, net of total cash and cas
Slide 18: Supplemental Information
Supplemental Information 21
Slide 19: Segment Information for Q3'23 and Q3'22
Segment Information for Q3'23 and Q3'22 Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Quant & Reconciling Total U.S. Quant & Reconciling Total U.S. ($ in millions, unless otherwise noted) Solutions Other(4) Items(1) GAAP (3) Solutions Other(4) Items(1) GAAP (3) ENI Reve
Slide 20: Segment Information for Q2'23
Segment Information for Q2'23 Three Months Ended June 30, 2023 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 95.0 $ — $ 1.3 $ 96.3 ENI Operating Expenses 47.3 3.9 0.8 52.0 Earnings before variable compensation 47.7 (3.9) 0.5
Slide 21: Assets Under Management Rollforward
Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended September 30, 2023 September 30, 2022 June 30, 2023 Total Beginning balance $ 99.9 $ 90.5 $ 97.5 Gross inflows 2.5 2.0 2.0 Gross outflows (3.9) (2.3) (2.8) Reinvested income and distributions 0.9 0.9 0.9 N
Slide 22: Reconciliations and Disclosures
Reconciliations and Disclosures 25
Slide 23: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1) Three Months Ended ENI Adjustments ($ in millions) September 30, September 30, June 30, 2023 2022 2023 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 19.6 $ 17.8 $ 11.4 changes in the valu
Slide 24: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1) (cont.) Reconciliation of per-share U.S. GAAP Net Income to Economic Net Income per share ($) Three Months Ended September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP net income per share $ 0.46 $ 0.42 $ 0.27 Adjustments to reflect the e
Slide 25: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1) (cont.) Reconciliation of U.S. GAAP Operating Expense to ENI Operating Expense ($ in millions) Three Months Ended September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP operating expense $ 77.1 $ 56.7 $ 75.9 Less: items excluded from ENI
Slide 26: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1)(cont.) Reconciliation of U.S. GAAP Pre-tax Income to Pre-tax ENI ($ in millions) Three Months Ended September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP pre-tax income $ 27.5 $ 25.3 $ 17.0 Adjustments to reflect the economic earnings of
Slide 27: Definitions and Additional Notes
Definitions and Additional Notes References to “BrightSphere,” “BSIG” or the “Company” refer to BrightSphere Investment Group Inc.; references to “BSUS” or the “Center” refer to the holding company excluding the Affiliates. BrightSphere currently operates its business through one asset management fi
Slide 28: Definitions and Additional Notes
Definitions and Additional Notes The Company adjusts its income tax expense to reflect any tax impact of its ENI adjustments. Adjusted EBITDA Adjusted EBITDA is defined as economic net income before interest, income taxes, depreciation and amortization. The Company notes that its calculation of Adju
Slide 29: Definitions and Additional Notes
Definitions and Additional Notes ENI earnings before variable compensation ENI earnings before variable compensation is calculated as ENI revenue, less ENI operating expense. ENI variable compensation ratio The ENI variable compensation ratio is calculated as variable compensation divided by ENI ear
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