Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q1 2024 Earnings Presentation
28 slides from Acadian Asset Management's earnings presentation, May 2, 2024
Slide 1: Q1 2024 Earnings Presentation
Q1 2024 EARNINGS PRESENTATION May 2, 2024 4
Slide 2: Q1'24 Highlights
Q1'24 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.37 for Q1'24 compared to $0.28 for Q1'23 • ENI EPS of $0.44 for the quarter compared to $0.28 for Q1'23 • Systematic Credit’s first strategy, U.S. High Yield strategy, has started to build a good track record, and a second strategy, Glob
Slide 3: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q1'24 vs. Q1'23 March 31, March 31, December 31, Increase 2024 2023 (Decrease) 2023 • Total revenue increased 15.1% Management fees $ 102.2 $ 90.6 12.8 % $ 94.5 from Q1'23 primarily due to Performance fees 3
Slide 4: Acadian Financial Highlights
Acadian Financial Highlights • Net flows of $0.4 billion with $(0.2) million annualized revenue impact for Q1'24 compared to net flows of $0.1 billion with annualized revenue impact of $1.0 million for Q1'23 • AUM increased 13.2% from Q1'23 mainly driven by market appreciation in the last twelve mon
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 $110.4 billion in AUM as of March 31, 2024 • Quant-focused investment platform offering unique capabilities in active equities, credit and alternatives; including r
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 Europe 42.6% 24.5% 16.3% USA 66.1% Asia 4.9% Corporate/ Union Australia 12.0% AUM by Strategy Other 6.5% Other 6.2% Sub-advisory 9.1% 11.8% Developed Markets 79.0% Emerging Markets 21.0% _______
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 Managed volatility portfolios seek to deli
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: 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 and Systematic Credit strategies Unique Quant Capabilities • Highly scalable offer
Slide 11: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended March 31, Three Months Ended December 31, Increase Increase U.S. GAAP Basis 2024 2023 (Decrease) 2023 (Decrease) Revenue $ 105.7 $ 91.8 15.1 % $ 131.2 (19.4)% Pre-tax income attributable to
Slide 12: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees • Q1'24 ENI revenue of $105.3 million increased from Q1'23 by 16%; primarily due to higher management fees driven by higher average AUM • Management fees increased 13% from Q1'23 due to a 12% increase in average AUM m
Slide 13: ENI Operating Expenses
ENI Operating Expenses Commentary • Total ENI operating expenses reflect Acadian and Center operating expenses (excluding variable compensation) • ENI operating expenses increased to $49.5 million in Q1'24 from $47.1 million in Q1'23 driven by continued investments in the business • Q1'24 Operating
Slide 14: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation comprises a contractual percentage of Acadian’s ENI earnings before variable compensation and a contractual split of performance fees, which is recognized over the contractual vesting period, awarded to Acadian’s employees and additionally
Slide 15: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents key employees’ share of profit from our Affiliate’s earnings • 2024 full year Distribution Ratio expected to be 7%-8% if the equity market remains at the same level; mix of core and performance fee profits will impact the ratio Affiliate K
Slide 16: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 102.2 $ 146.8 • March 31 net leverage ratio (third party borrowings and Investment advisory fees receivable 119.0 143.4 revolving credit facility, net of total cash and cash equiva
Slide 17: Supplemental Information
Supplemental Information 20
Slide 18: Segment Information for Q1'24 and Q1'23
Segment Information for Q1'24 and Q1'23 Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 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 Revenue $ 10
Slide 19: Segment Information for Q4'23
Segment Information for Q4'23 Three Months Ended December 31, 2023 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 131.0 $ — $ 0.2 $ 131.2 ENI Operating Expenses 49.3 3.4 3.9 56.6 Earnings before variable compensation 81.7 (3.
Slide 20: Assets Under Management Rollforward
Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended March 31, 2024 March 31, 2023 December 31, 2023 Total Beginning balance $ 103.7 $ 93.6 $ 97.4 Gross inflows 4.3 2.2 2.6 Gross outflows (4.7) (3.0) (5.5) Reinvested income and distributions 0.8 0.9 0.9 Net
Slide 21: Reconciliations and Disclosures
Reconciliations and Disclosures 24
Slide 22: 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) March 31, March 31, December 31, 2024 2023 2023 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 14.6 $ 12.0 $ 22.8 changes in the value of
Slide 23: 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 ($) Three Months Ended March 31, March 31, December 31, 2024 2023 2023 U.S. GAAP net income per share $ 0.37 $ 0.28 $ 0.54 Adjustments to reflect the econo
Slide 24: 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) Three Months Ended March 31, March 31, December 31, 2024 2023 2023 U.S. GAAP operating expense $ 82.8 $ 72.0 $ 95.6 Less: items excluded from ENI Non-
Slide 25: 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) Three Months Ended March 31, March 31, December 31, 2024 2023 2023 U.S. GAAP pre-tax income $ 21.8 $ 17.1 $ 34.9 Adjustments to reflect the economic earnings of the
Slide 26: 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 our Affiliate. BrightSphere currently operates its business through one asset management fir
Slide 27: 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 28: 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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