Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q2 2023 Earnings Presentation
32 slides from Acadian Asset Management's earnings presentation, Aug 3, 2023
Slide 1: BrightSphere Reports Second Quarter 2023 Results
1 Contact: Investor Relations ir@bsig.com (617) 369-7300 Exhibit 99.1 BrightSphere Reports Financial and Operating Results for the Second Quarter Ended June 30, 2023 • U.S. GAAP earnings per share of $0.27 for the quarter, compared to $0.67 for Q2'22 • U.S. GAAP net income attributable to controllin
Slide 2: Dividend Declaration and Conference Call Dial-in
2 Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on September 29, 2023 to shareholders of record as of the close of business on September 15, 2023. Conference Call Dial-in The Company will hold a conference call and simultaneous
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: Q2 2023
4 Q2 2023 EARNINGS PRESENTATION August 3, 2023
Slide 5: Q2'23 Highlights
5 • U.S. GAAP EPS of $0.27 for Q2'23 compared to $0.67 for Q2'22 • ENI EPS of $0.28 for the quarter compared to $0.41 for Q2'22 • Equity Alternatives platform seeded in Q4’22 generating good investment performance; roll out of Systematic Credit initiative continuing on plan • Continued strong invest
Slide 6: U.S. GAAP Statement of Operations
6 U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended June 30, June 30, Increase (Decrease) March 31, 2023 2022 2023 Management fees $ 92.8 $ 93.5 (0.7) % $ 90.6 Performance fees 2.2 2.0 10.0 % 0.5 Consolidated Funds’ revenue 1.3 — n/m 0.7 Total revenue 96.3
Slide 7: Acadian Financial Highlights
7 Revenue-Weighted 81% 81% 90% 3-Year 5-Year 10-Year 0% 50% 100% Equal-Weighted 74% 66% 83% 3-Year 5-Year 10-Year 0% 50% 100% Acadian Financial Highlights • Net flows of $0.1 billion with $0.9 million annualized revenue impact for Q2'23 compared to net flows of $(2.8) 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 $99.9 billion in AUM as of June 30, 2023 • Quant-focused investment platform offering unique capabilities in active equities, multi-asset class, managed volatility and alternatives
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 67.0% Europe 17.4% Asia 4.1% Australia 5.8%Other 5.7% Public/Government 42.3% Commingled Trust/UCITS 23.8% Corporate/ Union 12.7% Sub-advisory 12.4% Other 8.7% AUM by Client Type AUM by Client Location Total: $99.9 billion(1) Diversified Asset Ba
Slide 11: AUM by Strategy
11 Equity strategies apply insights from over 35 years of systematic investing experience combined with the power of data Global, Emerging Markets, Non-US, Regional Managed volatility portfolios seek to deliver active returns and lower volatility based on both the mispricing of risk and stock fundam
Slide 12: Sector Tailwinds Expected to Support Organic Long-term Growth
12 Sector Tailwinds Expected to Support Organic Long-term Growth Alpha Secular Trends Anticipated Impact for Acadian Acadian Brand and Barriers to Entry Organic Growth Applying Data and Expertise to New Capabilities Explosive Growth in Alternative Data Continued Development of Advanced Techniques: M
Slide 13: New Capabilities: Systematic Credit, Equity Alternatives, Systematic Macro
13 • Systematic Credit ◦ We believe current industry dynamics create an attractive opportunity for Acadian to expand and diversify its business into systematic credit and that Acadian is well positioned to win a share of this large market ◦ Roll-out of Systematic Credit effort continuing to move for
Slide 14: Long-Term Growth Strategy and Shareholder Value
14 • Leveraging broad quant capabilities to provide exposures and solutions sought by clients ◦ Ongoing initiatives including Equity Alternatives, Multi-Asset Class, and Systematic Credit strategies • Highly scalable offerings with substantial capacity and global demand Disciplined Execution of Long
Slide 15: Key Performance Metrics
15 Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended June 30, Three Months Ended March 31, U.S. GAAP Basis 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Revenue $ 96.3 $ 95.5 0.8 % $ 91.8 4.9 % Pre-tax income attributable to contro
Slide 16: ENI Revenue
16 ENI Revenue • ENI revenue includes management fees and performance fees • Q2'23 ENI revenue of $95.0 million decreased from Q2'22 by (1)% primarily due to lower average AUM • Management fees decreased (1)% from Q2'22 due to a 3% decrease in average AUM mainly as the result of 2022 market deprecia
Slide 17: ENI Operating Expenses
17 ENI Operating Expenses Three Months Ended June 30, Three Months Ended March 31, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease)$M % of MFs(2) $M % of MFs(2) $M % of MFs(2) Fixed compensation and benefits $ 23.7 25.5 % $ 20.5 21.9 % 16% $ 23.4 25.8 % 1% G&A expenses (excl. sales-based
Slide 18: ENI Variable Compensation
18 ENI Variable Compensation ($M) Three Months Ended June 30, Three Months Ended March 31, 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Cash variable compensation $ 21.4 $ 20.3 5% $ 21.6 (1)% Add: Non-cash equity-based award amortization 1.3 2.4 (46)% 1.6 (19)% Variable compensation 22.7 2
Slide 19: Affiliate Key Employee Distributions
19 Affiliate Key Employee Distributions Three Months Ended June 30, Three Months Ended March 31, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Earnings after variable compensation (ENI operating earnings) $ 21.1 $ 28.7 (26)% $ 20.8 1% Less: Affiliate key employee distributions (1.2) (0
Slide 20: Balance Sheet
20 Balance Sheet ($M) June 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 140.8 $ 108.4 Investment advisory fees receivable 89.8 122.5 Right of use assets 60.3 59.9 Investments 47.4 48.4 Other assets 168.3 162.4 Assets of consolidated Funds 51.7 17.1 Total assets $ 558.3 $ 518.7 Liabi
Slide 21: Supplemental Information
21 Supplemental Information
Slide 22: Segment Information for Q2'23 and Q2'22
22 Segment Information for Q2'23 and Q2'22 Three Months Ended June 30, 2023 Three Months Ended June 30, 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 $ 9
Slide 23: Segment Information for Q1'23
23 Three Months Ended March 31, 2023 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 91.1 $ — $ 0.7 $ 91.8 ENI Operating Expenses 43.6 3.5 0.5 47.6 Earnings before variable compensation 47.5 (3.5) 0.2 44.2 Variable compensatio
Slide 24: Assets Under Management Rollforward
24 Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended June 30, 2023 June 30, 2022 March 31, 2023 Total Beginning balance $ 97.5 $ 110.2 $ 93.6 Gross inflows 2.0 2.5 2.2 Gross outflows (2.8) (6.3) (3.0) Reinvested income and distributions 0.9 1.0 0.9 Net fl
Slide 25: Reconciliations and Disclosures
25 Reconciliations and Disclosures
Slide 26: Reconciliation of U.S. GAAP Net Income to Economic Net Income
26 Three Months Ended ($ in millions) June 30, June 30, March 31, 2023 2022 2023 U.S. GAAP net income attributable to controlling interests $ 11.4 $ 28.6 $ 12.0 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit interest revaluations(2) (0.7) (
Slide 27: Reconciliations from U.S. GAAP to Non-GAAP Measures (cont.)
27 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 June 30, June 30, March 31, 2023 2022 2023 U.S. GAAP net income per share $ 0.27 $ 0.67 $ 0.28 Adjustments to reflect the economi
Slide 28: Reconciliation of Operating Expense to ENI Operating Expense
28 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 June 30, June 30, March 31, 2023 2022 2023 U.S. GAAP operating expense $ 75.9 $ 48.8 $ 72.0 Less: items excluded from ENI Non-ca
Slide 29: Reconciliation of Pre-tax Income to Pre-tax ENI
29 Reconciliation of U.S. GAAP Pre-tax Income to Pre-tax ENI ($ in millions) Three Months Ended June 30, June 30, March 31, 2023 2022 2023 U.S. GAAP pre-tax income $ 17.0 $ 41.3 $ 17.1 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit interest
Slide 30: Definitions and Non-GAAP Measures Disclosures
30 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 31: Adjusted EBITDA and Segment ENI Definitions
31 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 32: ENI Earnings Before Variable Compensation Definitions
32 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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