Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q1 2023 Earnings Presentation
33 slides from Acadian Asset Management's earnings presentation, May 4, 2023
Slide 1: BrightSphere Reports First Quarter 2023 Financial and Operating Results
1 Contact: Investor Relations ir@bsig.com (617) 369-7300 Exhibit 99.1 BrightSphere Reports Financial and Operating Results for the First Quarter Ended March 31, 2023 • U.S. GAAP earnings per share of $0.28 for the quarter, compared to $0.53 for Q1'22 • U.S. GAAP net income attributable to controllin
Slide 2: Dividend Declaration and Conference Call
2 Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on June 30, 2023 to shareholders of record as of the close of business on June 16, 2023. Conference Call Dial-in The Company will hold a conference call and simultaneous webcast t
Slide 3: Forward-Looking Statements
3 Forward-Looking Statements This communication includes forward-looking statements which may include, from time to time, anticipated revenues, margins, operating expense and variable compensation ratios, cash flows or earnings growth profile, anticipated performance of the Company’s business going
Slide 4: Q1 2023
4 Q1 2023 EARNINGS PRESENTATION May 4, 2023
Slide 5: Q1 2023 Highlights
5 • U.S. GAAP EPS of $0.28 for Q1'23 compared to $0.53 for Q1'22 • ENI EPS of $0.28 for the quarter compared to $0.52 for Q1'22 • Continue rolling out Systematic Credit initiative as planned and building track record for Equity Alternatives after seeding at the end of 2022 • Continued strong investm
Slide 6: U.S. GAAP Statement of Operations
6 • Total revenue decreased (18.2)% from Q1'22 primarily due to the decrease in average AUM from the impact of the market decline in 2022 which had a negative impact on management fees; additionally, performance fees were lower than Q1'22 • Operating expenses increased 4.3% from Q1'22 driven by an i
Slide 7: Acadian Financial Highlights and Investment Performance
7 Revenue-Weighted 87% 86% 90% 3-Year 5-Year 10-Year 0% 50% 100% Equal-Weighted 76% 69% 83% 3-Year 5-Year 10-Year 0% 50% 100% Acadian Financial Highlights • Net flows of $0.1 billion with $1.0 million annualized revenue impact for Q1'23 compared to net flows of $(2.2) billion with annualized revenue
Slide 8: Acadian Platform Overview
8 Acadian Platform Overview • Leading, at-scale, systematic investment manager with a track record of over 35 years and $97.5 billion in AUM as of March 31, 2023 • Quant-focused investment platform offering unique capabilities in active equities, ESG, multi-asset class, managed volatility and altern
Slide 9: Systematic Investing Capabilities
9 Systematic Investing Capabilities Built On PEOPLE DATA CLARITY Economic intuition & insights of a talented, experienced, diverse group of investors: 100+ person investment team | 1600+ years’ collective experience 100+ advanced analytical degrees Extensive data repository supplemented by alternati
Slide 10: Diversified Asset Base
10 Developed Markets 77.9% Emerging Markets 22.1% USA 66.7% Europe 17.3% Asia 4.0% Australia 5.9%Other 6.1% Public/Government 42.3% Commingled Trust/UCITS 23.3% Corporate/ Union 14.1% Sub-advisory 12.2% Other 8.2% AUM by Client Type AUM by Client Location Total: $97.5 billion(1) Diversified Asset Ba
Slide 11: Acadian Strategies
11 Equity strategies apply insights from over 35 years of systematic investing experience combined with the power of data Global, Emerging Markets, Non-US, Regional Managed volatility portfolios seek to deliver active returns and lower volatility based on both the mispricing of risk and stock fundam
Slide 12: Sector Tailwinds Expected to Support Organic Long-term Growth
12 Sector Tailwinds Expected to Support Organic Long-term Growth Alpha Secular Trends Anticipated Impact for Acadian Acadian Brand and Barriers to Entry Organic Growth Applying Data and Expertise to New Capabilities Explosive Growth in Alternative Data Continued Development of Advanced Techniques: M
Slide 13: ESG and Systematic Credit Growth Initiatives
13 • ESG focused strategies represented $1.2 trillion in AUM industry-wide as of September 30, 2022(1) • Systematic investors well-positioned to customize sustainable portfolios and implement dynamic programs to meet Net Zero pathways • Built out Responsible Investing Team to increase focus on integ
Slide 14: ESG: Over Two Decades of Investment, Innovation & Leadership
14 • Early adopter (20+ year track record) in developing and applying proprietary ESG investment signals into investment process • Factors built from empirical, data driven research and display high efficacy in predicting risk-adjusted returns into investment strategies (no usage of “off the shelf”
Slide 15: Disciplined Execution of Long-Term Growth Strategy
15 • Leveraging broad quant capabilities to provide exposures and solutions sought by clients ◦ Ongoing initiatives including ESG, Equity Alternatives, Multi-Asset Class, and Systematic Credit strategies • Highly scalable offerings with substantial capacity and global demand Disciplined Execution of
Slide 16: Key Performance Metrics
16 Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended March 31, Three Months Ended December 31, U.S. GAAP Basis 2023 2022 Increase (Decrease) 2022 Increase (Decrease) Revenue $ 91.8 $ 112.2 (18.2) % $ 122.7 (25.2) % Income before income taxe
Slide 17: ENI Revenue
17 ENI Revenue • ENI revenue includes management fees and performance fees • Q1'23 ENI revenue of $91.1 million decreased from Q1'22 by (19)% primarily due to impact of 2022 market decline and lower performance fees • Management fees decreased (11)% from Q1'22 due to a 13% decrease in average AUM ma
Slide 18: ENI Operating Expenses
18 ENI Operating Expenses Three Months Ended March 31, Three Months Ended December 31, ($M) 2023 2022 Increase (Decrease) 2022 Increase (Decrease)$M % of MFs(2) $M % of MFs(2) $M % of MFs(2) Fixed compensation and benefits $ 23.4 25.8 % $ 21.9 21.4 % 7% $ 22.2 25.8 % 5% G&A expenses (excl. sales-bas
Slide 19: ENI Variable Compensation
19 ENI Variable Compensation ($M) Three Months Ended March 31, Three Months Ended December 31, 2023 2022 Increase (Decrease) 2022 Increase (Decrease) Cash variable compensation $ 21.6 $ 25.3 (15)% $ 27.6 (22)% Add: Non-cash equity-based award amortization 1.6 2.6 (38)% 2.3 (30)% Variable compensatio
Slide 20: Affiliate Key Employee Distributions
20 Affiliate Key Employee Distributions Three Months Ended March 31, Three Months Ended December 31, ($M) 2023 2022 Increase (Decrease) 2022 Increase (Decrease) Earnings after variable compensation (ENI operating earnings) $ 20.8 $ 38.7 (46)% $ 44.5 (53)% Less: Affiliate key employee distributions (
Slide 21: Balance Sheet
21 Balance Sheet ($M) March 31, 2023 December 31, 2022 Assets Cash and cash equivalents $ 154.1 $ 108.4 Investment advisory fees receivable 99.9 122.5 Right of use assets 61.3 59.9 Investments 49.9 48.4 Other assets 161.9 162.4 Assets of consolidated Funds 18.9 17.1 Total assets $ 546.0 $ 518.7 Liab
Slide 22: Supplemental Information
22 Supplemental Information
Slide 23: Segment Information for Q1'23 and Q1'22
23 Segment Information for Q1'23 and Q1'22 Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $
Slide 24: Segment Information for Q4'22
24 Three Months Ended December 31, 2022 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 122.3 $ — $ 0.4 $ 122.7 ENI Operating Expenses 44.3 3.6 (4.6) 43.3 Earnings before variable compensation 78.0 (3.6) 5.0 79.4 Variable comp
Slide 25: Assets Under Management Rollforward
25 Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended March 31, 2023 March 31, 2022 December 31, 2022 Total Beginning balance $ 93.6 $ 117.2 $ 83.3 Gross inflows 2.2 3.5 3.1 Gross outflows (3.0) (6.6) (2.8) Reinvested income and distributions 0.9 0.9 1.0 N
Slide 26: Reconciliations and Disclosures
26 Reconciliations and Disclosures
Slide 27: Reconciliation of U.S. GAAP Net Income to Economic Net Income
27 Three Months Ended ($ in millions) March 31, March 31, December 31, 2023 2022 2022 U.S. GAAP net income attributable to controlling interests $ 12.0 $ 23.8 $ 30.4 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit interest revaluations(2) (0
Slide 28: Reconciliations from U.S. GAAP to Non-GAAP Measures (cont.)
28 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, 2023 2022 2022 U.S. GAAP net income per share $ 0.28 $ 0.53 $ 0.72 Adjustments to reflect the ec
Slide 29: Reconciliation of U.S. GAAP Operating Expense to ENI Operating Expense
29 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, 2023 2022 2022 U.S. GAAP operating expense $ 72.0 $ 69.0 $ 74.8 Less: items excluded from ENI N
Slide 30: Reconciliation of U.S. GAAP Pre-tax Income to Pre-tax ENI
30 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, 2023 2022 2022 U.S. GAAP pre-tax income $ 17.1 $ 33.4 $ 44.8 Adjustments to reflect the economic earnings of
Slide 31: Definitions and Additional Notes
31 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
Slide 32: Definitions and Additional Notes (Adjusted EBITDA, Segment ENI)
32 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 Adjusted EBITDA may not be consist
Slide 33: Definitions and Additional Notes
33 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
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