Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — Q4 2023 Earnings Presentation
29 slides from Acadian Asset Management's earnings presentation, Feb 1, 2024
Slide 1: Q4 2023 Earnings Presentation
Q4 2023 EARNINGS PRESENTATION February 1, 2024 4
Slide 2: Q4'23 Highlights
Q4'23 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.54 for Q4'23 compared to $0.72 for Q4'22 • Highest ever ENI EPS of $0.77 for the quarter compared to $0.67 for Q4'22 • Systematic Credit initiative seeded its first strategy, U.S. High Yield, in November 2023 with $15 million • Equity Al
Slide 3: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q4'23 vs. Q4'22 December 31, December 31, September 30, Increase 2023 2022 (Decrease) 2023 • Total revenue increased 6.9% Management fees $ 94.5 $ 86.0 9.9 % $ 95.3 from Q4'22 primarily due to Performance fe
Slide 4: Acadian Financial Highlights
Acadian Financial Highlights • Net flows of $(2.0) billion with $(6.4) million annualized revenue impact for Q4'23 driven by outflows from managed volatility strategies, compared to net flows of $1.3 billion with annualized revenue impact of $3.2 million for Q4'22 • AUM increased 10.8% from Q4'22 ma
Slide 5: Acadian Platform Overview
Acadian Platform Overview Business Overview • Kelly Young promoted to Chief Executive Officer of Acadian in 4Q ’23 to help drive Acadian’s next phase of growth ◦ Kelly has served in key leadership roles during her 15 years at Acadian, most recently as Executive Vice President, Chief Marketing Office
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 42.1% 24.3% USA 16.0% 67.4% Asia Corporate/ 4.2% Union Australia 11.6% AUM by Strategy Other 6.3% Other 6.1% 9.6% Sub-advisory 12.3% Developed Markets 77.8% Emerging Markets 22.2% _______
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 portfolios seek to deliver active returns
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: Acadian's Recent and Ongoing Growth Initiatives
Acadian’s Recent and Ongoing Growth Initiatives Investment Theme Acadian Solutions • 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
Slide 11: 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, Systematic Credit, and Multi-Asset Class Unique Quant strategies Capabilities • H
Slide 12: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended December 31, Three Months Ended September 30, Increase Increase U.S. GAAP Basis 2023 2022 (Decrease) 2023 (Decrease) Revenue $ 131.2 $ 122.7 6.9 % $ 107.3 22.3 % Pre-tax income attributable
Slide 13: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees • Q4'23 ENI revenue of $131.0 million increased from Q4'22 by 7%; primarily due to higher management fees driven by higher average AUM ◦ Performance fees remained strong due to outperformance in certain incentive-fee
Slide 14: ENI Operating Expenses
ENI Operating Expenses Commentary • Total ENI operating expenses reflect Affiliate operating expenses and Center expenses (excluding variable compensation) • ENI operating expenses increased to $52.7 million in Q4'23 from $47.9 million in Q4'22 driven by inflation and new investments • Q4'23 Operati
Slide 15: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of our Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractua
Slide 16: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents key employees’ share of profit from our Affiliate’s earnings • 2024 Distribution Ratio expected to be 5%-7%; mix of core and performance fee profits will impact the ratio Affiliate Key Employee Distributions Three Months Ended December 31,
Slide 17: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) December 31, 2023 December 31, 2022 Assets Cash and cash equivalents $ 146.8 $ 108.4 • December 31 net leverage ratio (third party borrowings Investment advisory fees receivable 143.4 122.5 and revolving credit facility, net of total cash and cash
Slide 18: Supplemental Information
Supplemental Information 21
Slide 19: Segment Information for Q4'23 and Q4'22
Segment Information for Q4'23 and Q4'22 Three Months Ended December 31, 2023 Three Months Ended December 31, 2022 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 Revenu
Slide 20: Segment Information for Q3'23
Segment Information for Q3'23 Three Months Ended September 30, 2023 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 106.5 $ — $ 0.8 $ 107.3 ENI Operating Expenses 44.0 3.4 (0.3) 47.1 Earnings before variable compensation 62.5
Slide 21: Assets Under Management Rollforward
Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended December 31, 2023 December 31, 2022 September 30, 2023 Total Beginning balance $ 97.4 $ 83.3 $ 99.9 Gross inflows 2.6 3.1 2.5 Gross outflows (5.5) (2.8) (3.9) Reinvested income and distributions 0.9 1.0 0.
Slide 22: Reconciliations and Disclosures
Reconciliations and Disclosures 25
Slide 23: 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) December 31, December 31, September 30, 2023 2022 2023 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 22.8 $ 30.4 $ 19.6 changes in the v
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 per-share U.S. GAAP Net Income to Economic Net Income per share ($) Three Months Ended December 31, December 31, September 30, 2023 2022 2023 U.S. GAAP net income per share $ 0.54 $ 0.72 $ 0.46 Adjustments to reflect th
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 Operating Expense to ENI Operating Expense ($ in millions) Three Months Ended December 31, December 31, September 30, 2023 2022 2023 U.S. GAAP operating expense $ 95.6 $ 74.8 $ 77.1 Less: items excluded from E
Slide 26: 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 December 31, December 31, September 30, 2023 2022 2023 U.S. GAAP pre-tax income $ 34.9 $ 44.8 $ 27.5 Adjustments to reflect the economic earnings
Slide 27: 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 the Affiliates. BrightSphere currently operates its business through one asset management fi
Slide 28: 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 29: 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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