Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q1 2022 Earnings Presentation
33 slides from Acadian Asset Management's earnings presentation, May 5, 2022
Slide 1: BrightSphere Reports Financial and Operating Results for the First Quarter Ended March 31, 2022
Contact: ir@bsig.com (617) 369-7300 BrightSphere Reports Financial and Operating Results for the First Quarter Ended March 31, 2022 • U.S. GAAP earnings per share of $0.53 for the quarter, compared to $0.33 for Q1'21 • ENI earnings per share of $0.52 for the quarter, compared to $0.27 for Q1'21 • Ne
Slide 2: Dividend Declaration
Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on June 24, 2022 to shareholders of record as of the close of business on June 10, 2022. Conference Call Dial-in The Company will hold a conference call and simultaneous webcast to
Slide 3: Forward Looking Statements
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 fo
Slide 4: Q1 2022 Earnings Presentation
Q1 2022 EARNINGS PRESENTATION May 5, 2022 4
Slide 5: Q1'22 Highlights
Q1'22 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.53 for Q1'22 compared to $0.33 for Q1'21 • ENI EPS of $0.52 for the quarter compared to $0.27 for Q1'21(1) • Investment performance strengthened further with 96%, 86%, 88% and 90% of strategies by revenue beating their benchmarks over th
Slide 6: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q1'22 vs. Q1'21 March 31, March 31, December 31, Increase 2022 2021(1) (Decrease) 2021(1) • Total revenue increased 2.3% from Management fees $ 102.2 $ 103.8 (1.5)% $ 106.5 Q1'21 primarily due to higher Perf
Slide 7: Acadian Financial Highlights
Acadian Financial Highlights • Segment NCCF of $(2.2) billion with $(1.1) million annualized revenue impact for Q1'22 compared to $(3.6) billion with annualized revenue impact of $(8.6) million for Q1'21; AUM decreased 1.2% from Q1'21 driven by outflows • Investment performance strengthened further
Slide 8: Acadian Platform Overview
Acadian Platform Overview Business Overview • Leading, at-scale, systematic investment manager with a track record of over 35 years and $110.2 billion in AUM as of March 31, 2022 • Quant-focused investment platform with leadership across team, technology and data, offering unique capabilities in lon
Slide 9: Investment Outperformance across 1-, 3-, 5-, and 10-Year Horizons
Investment Outperformance across 1-, 3-, 5-, and 10-Year Horizons (1) % of Strategies Beating Benchmark (Revenue-Weighted) 100% 96% 90% 86% 88% 80% 60% 40% 20% —% 1-Year 3-Year 5-Year 10-Year ___________________________________________________________ Please see Definitions and Additional Notes (1)
Slide 10: History of Strong AUM Growth
History of Strong AUM Growth $B Acadian's Total Ending AUM 2012 - March 31, 2022 $120.0 $117.2 $110.2 $110.0 $101.9 $107.4 $100.0 $97.7 $90.0 $86.2 $80.0 $70.3 $75.0 $70.0 $66.8 $65.2 $60.0 $50.0 $51.9 $40.0 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 03
Slide 11: Diversified Asset Base
Diversified Asset Base AUM by Client Type AUM by Client Location Public/Government Commingled 43.2% Trust/UCIT Europe 23.0% USA 17.7% 68.0% Asia Corporate/ Australia3.3% Union 5.3% 13.8% AUM by Strategy Other Other 5.8% 7.6% Sub-advisory 12.4% Developed Markets 75.3% Emerging Markets 24.7% _________
Slide 12: Investment Capabilities
Investment Capabilities Diversified Quant offerings including ESG-focused strategies Capability Attributes & Approach • Leverage numerous behavioral factors grounded in sound investment theory and psychological underpinnings; factors supported by observations from a range of disciplines, including s
Slide 13: Sector Tailwinds Expected to Support Long Term Growth
Sector Tailwinds Expected to Support Long Term Growth Secular Trends Anticipated Impact for Acadian Explosive Growth in Alpha Alternative Data Continued Development of Advanced Techniques: Brand Machine Learning, AI Scale of Investment in Data, Technology, and Flows Talent Increasingly Important Gro
Slide 14: Acadian's Recent and Ongoing Growth Initiatives
Acadian’s Recent and Ongoing Growth Initiatives Investment Theme Acadian Solutions • Systematic Macro Demand for ◦ Began offering to broad markets in late 2019; systematic macro strategies have since grown to Diversification, approximately $2 billion in AUM Downside ◦ Multi-Asset Absolute Return, Co
Slide 15: Disciplined Execution of Long-Term Growth Strategy
Disciplined Execution of Long-Term Growth Strategy Continue • Leveraging broad quant capabilities to provide exposures and solutions sought by clients Harnessing our • Highly scalable offerings with substantial capacity and global demand Unique Quant Capabilities • Multi-Asset Class capability has m
Slide 16: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended March 31, Three Months Ended December 31, Increase Increase U.S. GAAP Basis(2) 2022 2021 (Decrease) 2021 (Decrease) Revenue $ 112.2 $ 109.7 2.3 % $ 162.9 (31.1)% Pre-tax income from cont. op
Slide 17: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees. In Q1’21 ENI revenue includes our share of earnings from our previously disposed equity-accounted Affiliate. • Q1'22 ENI revenue of $112.2 million increased from Q1'21 by 2% driven by higher performance fees that off
Slide 18: ENI Operating Expenses
ENI Operating Expenses Commentary • Total ENI operating expenses reflect Affiliate operating expenses and Center expenses (excluding variable compensation) • ENI Operating expenses decreased to $45.6 million in Q1'22 from $48.8 million in Q1'21 reflecting the disposition of Affiliate; Q1'22 Operatin
Slide 19: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of each Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractu
Slide 20: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents employees’ share of profit from their respective Affiliate(1) • Q1'22 Distribution Ratio of 4.9% higher than Q1'21 mainly due to dispositions and mix of earnings • 2022 Distribution Ratio expected to be 7%-10%; mix of core and performance
Slide 21: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) March 31, 2022 December 31, 2021 Assets Cash and cash equivalents $ 88.8 $ 252.1 • March 31 net leverage ratio (third party borrowings and revolving credit facility, net of total cash and cash Investment advisory fees receivable 114.3 167.1 equival
Slide 22: Supplemental Information
Supplemental Information 22
Slide 23: Segment Information for Q1'22 and Q1'21
Segment Information for Q1'22 and Q1'21 Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Quant & Reconciling Total U.S. Quant & Reconciling Total U.S. ($ in millions, unless otherwise noted) Solutions Other Items(1) GAAP (3) Solutions Other(4) Items(1) GAAP (3) ENI Revenue $ 112.2
Slide 24: Segment Information for Q4'21
Segment Information for Q4'21 Three Months Ended December 31, 2021 Reconciling ($ in millions, unless otherwise noted) Quant & Solutions Other Items(1) Total U.S. GAAP (3) ENI Revenue $ 162.9 $ — $ — $ 162.9 ENI Operating Expenses 44.0 5.2 14.6 63.8 Earnings before variable compensation 118.9 (5.2)
Slide 25: Assets Under Management Rollforward by Segment
Assets Under Management Rollforward by Segment ($ in billions, unless otherwise noted) Three Months Ended March 31, 2022 March 31, 2021 December 31, 2021 Quant and Solutions Beginning balance $ 117.2 $ 107.0 $ 113.7 Gross inflows 3.5 2.2 2.9 Gross outflows (6.6) (6.4) (4.4) Reinvested income and dis
Slide 26: Reconciliations and Disclosures
Reconciliations and Disclosures 26
Slide 27: Reconciliations from U.S. GAAP to Non-GAAP Measures
Reconciliations from U.S. GAAP to Non-GAAP Measures(1)(2) Three Months Ended ENI Adjustments ($ in millions) March 31, March 31, December 31, 2022 2021 2021 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 23.8 $ 27.0 $ 39.2 changes in the value
Slide 28: 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(2) ($) Three Months Ended March 31, March 31, December 31, 2022 2021 2021 U.S. GAAP net income per share $ 0.53 $ 0.33 $ 0.53 Adjustments to reflect the ec
Slide 29: 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(2) ($ in millions) Three Months Ended March 31, March 31, December 31, 2022 2021 2021 U.S. GAAP operating expense $ 69.0 $ 77.2 $ 114.4 Less: items excluded from ENI
Slide 30: 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 from Continuing Operations to Pre-tax ENI(2) ($ in millions) Three Months Ended March 31, March 31, December 31, 2022 2021 2021 U.S. GAAP pre-tax income from continuing operations $ 33.4 $ 27.6 $
Slide 31: Definitions and Additional Notes
Definitions and Additional Notes References to “BrightSphere,” “BSIG” or the “Company” refer to BrightSphere Investment Group Inc.; references to “OM plc” or “Parent” refer to Old Mutual plc, the Company’s former parent; references to “BSUS” or the “Center” refer to the holding company excluding the
Slide 32: 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 33: 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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