Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — Q4 2024 Earnings Presentation
40 slides from Acadian Asset Management's earnings presentation, Feb 6, 2025
Slide 1: Q4 2024 Earnings Presentation
Q4 2024 EARNINGS PRESENTATION February 6, 2025
Slide 2: Presenters: Kelly Young, Brendan Bradley, Melody Huang
Kelly Young President and Chief Executive Officer Brendan Bradley Chief Investment Officer Melody Huang Director of Finance and Investor Relations 2
Slide 3: Acadian: Only Pure-Play Publicly-Traded Systematic Manager
Acadian: Only Pure-Play Publicly-Traded Systematic Manager Nearly 40-year Founded in 1986, Acadian has delivered sustained outperformance across operating history investment strategies and through market cycles Pure systematic Managing $117B of AUM, Acadian is a pure systematic manager applying data
Slide 4: Acadian Q4 2024: Strong Outperformance
Acadian Q4 2024: Strong Outperformance Key Performance Metrics Highlights Increase Q4'23 Q4'24 (Decrease) ▪ U.S. GAAP EPS of $1.13 up 109% Net income attributable to compared to Q4'23 controlling interests $m $22.8 $42.5 86% ▪ ENI diluted EPS up 69% compared to U.S. GAAP diluted EPS $0.54 $1.13 109%
Slide 5: Acadian 2024: Strong Outperformance
Acadian 2024: Strong Outperformance Key Performance Metrics Highlights Increase FY 2023 FY 2024 (Decrease) ▪ U.S. GAAP EPS of $2.22 up 43% Net income attributable to compared to 2023 controlling interests $m $65.8 $85.0 29% ▪ ENI diluted EPS up 55% compared to U.S. GAAP diluted EPS $1.55 $2.22 43% 2
Slide 6: The Systematic Edge
The Systematic Edge A Proven Investment Philosophy Financial assets are often mispriced Systematic processes capture Our edge comes from embracing new due to investors incorrectly processing inefficiencies arising from mispriced ideas and a continuous investment in information, having incomplete fun
Slide 7: Systematic Investing Capabilities Built On People, Data, Clarity
Systematic Investing Capabilities Built On Economic intuition & insights of a talented, experienced, diverse group of investors: PEOPLE 120+ person investment team | 1600+ years’ collective experience 100+ advanced analytical degrees Extensive data repository supplemented by alternative data scoutin
Slide 8: Strong Performance Track Records
Strong Performance Track Records % of Major Strategy Group Assets Outperforming Benchmarks Global Equity Emerging Markets Equity International Equity 100% 100% 100% 100% 100% 100% 100% 100% 100% 3-Year 5-Year 10-Year 3-Year 5-Year 10-Year 3-Year 5-Year 10-Year Small Cap Equity Enhanced Equity 100% 1
Slide 9: Meaningful Long Term Alpha Generation
Meaningful Long Term Alpha Generation Revenue Weighted Asset Weighted +4.4% +3.5% 5-year annualized return in excess of 5-year annualized return in excess of benchmark benchmark 94% 93% 94% 90% 89% 91% 3-Year 5-Year 10-Year 3-Year 5-Year 10-Year Consolidated Firmwide Investment Performance _________
Slide 10: Distribution Platform
Distribution Platform > 1,000 > 10 years > 90 institutional client accounts average relationship length experienced distribution with top 50 clients professionals 40 ~40 4 countries represented investment consultant global distribution offices across client base relationships serving clients Gross S
Slide 11: Acadian: Established Institutional Investment Manager
Acadian: Established Institutional Investment Manager ▪ 6 clients among the top 20 global asset owners ▪ 27 clients among the top 50 U.S. retirement plans ▪ > 50% of assets from clients invested in multiple Acadian strategies ▪ 36% of assets managed for clients outside the U.S. ▪ > 80 institutional-
Slide 12: Positive 2024 Net Flows
Positive 2024 Net Flows $0.4b $0.5b $0.9b $0.0b Q1'24 Q2'24 Q3'24 Q4'24 Gross Sales Reinvested Dividends Outflows Net Flows 12
Slide 13: Product Initiatives to Drive Growth
Product Initiatives to Drive Growth Enhanced Equity Equity Extensions Systematic Credit Equity Alternatives 13
Slide 14: Growth Opportunities: Enhanced Equity
Growth Opportunities: Enhanced Equity ▪ Targeting broad investor demand for lower fee, more consistent return allocations as well as investors in $16 trillion global passive equity market (42% of total externally managed equity assets) seeking improved performance with modest incremental risk(1) ▪ E
Slide 15: Growth Opportunities: Equity Extensions
Growth Opportunities: Equity Extensions ▪ Extension strategies are a form of high conviction investing ▪ These portfolios use both long and short positions to increase a manager’s active views while keeping the underlying capital invested and market exposure roughly unchanged ▪ Example strategy: 130
Slide 16: Growth Opportunities: Scaling Systematic Credit
Growth Opportunities: Scaling Systematic Credit ▪ First strategies seeded in Q4 2023 and live track records for U.S. High Yield, Global High Yield, and U.S. Investment Grade ▪ Targeting $3T active corporate credit space with offerings across high yield, investment grade, and long duration(1) Opportu
Slide 17: Growth Opportunities: Scaling Equity Alternatives
Growth Opportunities: Scaling Equity Alternatives ▪ First strategies seeded in Q4 2022 ▪ Targeting multi-strategy hedge fund market, which is amongst the fastest growing segments of the global hedge fund industry Opportunity ▪ Higher fee revenue opportunity ▪ Unmet demand for diversified offerings w
Slide 18: Low Leverage Ratios With High Liquidity Position
Low Leverage Ratios With High Liquidity Position Balance Sheet Profile ($ in millions) December 31, 2024 ▪ Cash and cash-equivalents totaled $94.8 million ▪ $90.3 million of seed investments ▪ The revolving credit facility was fully paid down as of December 31, 2024; facility supports first quarter
Slide 19: Track Record of Significant Value Creation Through Buybacks
Track Record of Significant Value Creation Through Buybacks Quarterly Diluted Shares Outstanding (in millions) Return of Capital ▪ $1.4 billion in excess capital returned to stockholders over the last 5 years through share buybacks and dividends ▪ Share buybacks highly accretive to EPS growth and ta
Slide 20: Acadian: Positioned for Multiple Expansion & Value Creation
Acadian: Positioned for Multiple Expansion & Value Creation CY 2024 P/E Multiple 14x 55% 9x AAMI Peer Average ___________________________________________________________ AAMI calculation based on 2024 ENI EPS and share price as of February 4, 2025; Peer EPS based on consensus estimates or actual res
Slide 21: Closing: Acadian Compelling Investment Opportunity
Closing: Acadian Compelling Investment Opportunity ▪ Only pure-play publicly-traded systematic manager ▪ Nearly 40-year track record with competitive edge in systematic investing ▪ Strong performance track record: ▪ > 90% of strategies by revenue outperforming over 3- / 5- / 10- year periods(1) ▪ Ou
Slide 22: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations Increase ($ in millions, unless otherwise noted) Q4'23 Q4'24 (Decrease) FY 2023 FY 2024 Q4'24 vs. Q4'23 Management fees $ 94.5 $ 111.3 17.8 % $ 373.2 $ 431.1 ▪ Total revenue increased 27.9% from Performance fees 36.5 55.4 51.8 % 50.4 71.4 Q4'23 driven by higher mana
Slide 23: Supplemental Information
Supplemental Information 23
Slide 24: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Q4'23 Q4'24 Increase (Decrease) U.S. GAAP Basis Revenue $ 131.2 $ 167.8 27.9 % Pre-tax income attributable to controlling interests 33.9 60.3 77.9 % Net income attributable to controlling interests 22.8 42.5 8
Slide 25: ENI Revenue
ENI Revenue Commentary ▪ ENI revenue includes management fees and performance fees ▪ Q4'24 ENI revenue of $166.7 million increased from Q4'23 by 27%; primarily due to higher performance fees and higher management fees driven by higher average AUM ▪ Management fees increased 18% from Q4'23 reflecting
Slide 26: ENI Operating Expenses
ENI Operating Expenses Commentary ▪ ENI operating expenses reflect the Company’s operating expenses (excluding variable compensation) ▪ ENI operating expenses increased to $57.0 million in Q4'24 compared to $52.7 million in Q4'23 ▪ Q4'24 Operating Expense Ratio(1) fell to 51.2% for the period from 5
Slide 27: ENI Variable Compensation
ENI Variable Compensation Commentary ▪ Variable compensation is primarily comprised of a contractual percentage of ENI earnings before variable compensation and a contractual split of performance fees, which is awarded to employees and recognized over a contractual vesting period ▪ Variable compensa
Slide 28: Acadian LLC Key Employee Distributions
Acadian LLC Key Employee Distributions Commentary ▪ Represents key employees’ share of profit from Acadian LLC’s earnings ▪ 2025 full-year Distribution Ratio expected to be 7%-8% if the equity market remains at the same level; mix of core and performance fee profits will impact the ratio Acadian LLC
Slide 29: Balance Sheet Management
Balance Sheet Management ($ in millions) December 31, 2023 December 31, 2024 Assets Cash and cash equivalents $ 146.8 $ 94.8 Investment advisory fees receivable 143.4 164.7 Right of use assets 57.2 52.5 Investments 64.7 67.9 Other assets 164.1 164.0 Assets of consolidated Funds 35.2 159.3 Total asse
Slide 30: Assets Under Management Rollforward
Assets Under Management Rollforward ($ in billions, unless otherwise noted) Q4'23 Q4'24 FY 2023 FY 2024 Beginning balance $ 97.4 $ 120.3 $ 93.6 $ 103.7 Gross sales 2.6 5.5 9.3 21.2 Gross outflows (5.5) (5.4) (15.2) (22.7) Reinvested income and distributions 0.9 0.8 3.6 3.3 Net flows (2.0) 0.9 (2.3)
Slide 31: Reconciliations and Disclosures
Reconciliations and Disclosures 31
Slide 32: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1) ($ in millions) Q4'23 Q4'24 FY 2023 FY 2024 ENI Adjustments U.S. GAAP net income attributable to controlling interests $ 22.8 $ 42.5 $ 65.8 $ 85.0 1i. Exclude non-cash expenses representing Adjustments to reflect the economic earnings of the cha
Slide 33: Reconciliations from U.S. GAAP to Non-GAAP Measures (cont.)
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 ($) Q4'23 Q4'24 FY 2023 FY 2024 U.S. GAAP net income per share $ 0.54 $ 1.13 $ 1.55 $ 2.22 Adjustments to reflect the economic earnings of the Company: i. N
Slide 34: Reconciliations from U.S. GAAP to Non-GAAP Measures (cont.)
Reconciliations from U.S. GAAP to Non-GAAP Measures(1)(cont.) Reconciliation of U.S. GAAP Operating Expense to ENI Operating Expense ($ in millions) Q4'23 Q4'24 U.S. GAAP operating expense $ 95.6 $ 102.8 Less: items excluded from ENI Non-cash key employee-owned equity and profit interest revaluation
Slide 35: Reconciliations from U.S. GAAP to Non-GAAP Measures (cont.)
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) Q4'23 Q4'24 U.S. GAAP pre-tax income $ 34.9 $ 58.4 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit intere
Slide 36: Segment Reconciliation
Segment Reconciliation ($ in millions) Q4'23 Q4'24 U.S. GAAP Consolidated Revenue $ 131.2 $ 167.8 Exclude revenue from consolidated funds (a) 0.2 1.1 Quant & Solutions Segment ENI Revenue 131.0 166.7 Quant & Solutions Segment ENI Expenses Fixed compensation and benefits (b) 21.5 23.8 Variable compen
Slide 37: Segment Reconciliation (continued)
Segment Reconciliation (continued) Notes to Segment Reconciliation (a) Adjusted to exclude consolidated Funds revenues which are included in U.S. GAAP revenue (b) Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided, adjusted for severance r
Slide 38: Definitions and Additional Notes
Definitions and Additional Notes References to “Acadian Asset Management”, “Acadian”, “AAMI” or the “Company” refer to Acadian Asset Management Inc.; references to “Hold Co” refer to AAMI and its subsidiaries excluding Acadian Asset Management LLC (“Acadian LLC”). The Company currently operates its
Slide 39: 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 40: Definitions and Additional Notes
Definitions and Additional Notes ENI variable compensation ratio The ENI variable compensation ratio is calculated as variable compensation divided by ENI earnings before variable compensation. It is used by management and is useful to investors to evaluate consolidated variable compensation as meas
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