Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q4 2022 Earnings Presentation
33 slides from Acadian Asset Management's earnings presentation, Feb 2, 2023
Slide 1: BrightSphere Reports Financial and Operating Results for the Fourth Quarter Ended December 31, 2022
Contact: Elie Sugarman ir@bsig.com (617) 369-7300 Exhibit 99.1 BrightSphere Reports Financial and Operating Results for the Fourth Quarter Ended December 31, 2022 • U.S. GAAP earnings per share of $0.72 for the quarter, compared to $0.53 for Q4'21 • ENI earnings per share of $0.67 for the quarter, c
Slide 2: Dividend Declaration
Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on March 31, 2023 to shareholders of record as of the close of business on March 17, 2023. Conference Call Dial-in The Company will hold a conference call and simultaneous webcast t
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: Q4 2022 Earnings Presentation
Q4 2022 EARNINGS PRESENTATION February 2, 2023 4
Slide 5: Q4'22 Highlights
Q4'22 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.72 for Q4'22 compared to $0.53 for Q4'21 • Highest ever quarterly ENI EPS of $0.67 for the quarter compared to $0.53 for Q4'21 • Seeded Acadian Asset Management’s (“Acadian”) Equity Alternatives platform in Q4’22 with $15 million; Invest
Slide 6: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q4'22 vs. Q4'21 December 31, December 31, September 30, Increase 2022 2021 (Decrease) 2022 • Total revenue decreased (24.7)% Management fees $ 86.0 $ 106.5 (19.2)% $ 85.7 from Q4'21 primarily due to the Perf
Slide 7: Acadian Financial Highlights
Acadian Financial Highlights • NCCF of $1.3 billion with $3.2 million annualized revenue impact for Q4'22 compared to NCCF of $(0.8) billion with annualized revenue impact of $0.1 million for Q4'21 • AUM decreased 20.1% from Q4'21 mainly driven by equity market decline in 2022, AUM increased 12.4% c
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 $93.6 billion in AUM as of December 31, 2022 • Quant-focused investment platform offering unique capabilities in active equities, ESG, multi-asset class, managed vo
Slide 9: 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 10: Diversified Asset Base
Diversified Asset Base AUM by Client Type AUM by Client Location Commingled Public/Government Trust/UCITS 42.0% 23.2% Europe USA 17.4% 67.0% Asia Corporate/ Australia 3.4% Union 6.0% 14.0% AUM by Strategy Other Other 6.2% 8.2% Sub-advisory 12.6% Developed Markets 78.2% Emerging Markets 21.8% _______
Slide 11: Systematic Investment Capabilities
Systematic Investment Capabilities Diversified Quant offerings including ESG-integrated capabilities 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 Mana
Slide 12: 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 13: 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 14: ESG: Over Two Decades of Investment, Innovation & Leadership
ESG: Over Two Decades of Investment, Innovation & Leadership Acadian’s Approach to ESG • Early adopter (20+ year track record) in developing and applying proprietary ESG investment signals into Incorporate ESG Factors investment process Into Equity Investment • Factors built from empirical, data dri
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 ◦ Ongoing initiatives including ESG, Equity Alternatives, Multi-Asset Class, and Systematic Unique Quant Credit strategies Capabilitie
Slide 16: 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 2022 2021 (Decrease) 2022 (Decrease) Revenue $ 122.7 $ 162.9 (24.7)% $ 86.8 41.4 % Pre-tax income from cont. o
Slide 17: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees • Q4'22 ENI revenue of $122.3 million decreased from Q4'21 by (25)% primarily due to market decline and lower performance fees • Management fees decreased (19)% from Q4'21 due to a 22% decrease in average AUM mainly a
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 $47.9 million in Q4'22 from $49.2 million in Q4'21 reflecting a decrease in payroll tax and benefits • Q4'
Slide 19: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of our Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractua
Slide 20: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents key employees’ share of profit from our Affiliate’s earnings • Q4'22 Distribution Ratio of 3.6% is lower than Q4'21 mainly due to a decrease in ENI operating earnings and the leveraged nature of key employee distribution • 2023 Distributio
Slide 21: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) December 31, 2022 December 31, 2021 Assets Cash and cash equivalents $ 108.4 $ 252.1 • Acadian fully paid down its revolving credit facility as of Investment advisory fees receivable 122.5 167.1 December 31, 2022 compared to $29 million being outst
Slide 22: Supplemental Information
Supplemental Information 22
Slide 23: Segment Information for Q4'22 and Q4'21
Segment Information for Q4'22 and Q4'21 Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Quant & Reconciling Total U.S. Quant & Reconciling Total U.S. ($ in millions, unless otherwise noted) Solutions Other(4) Items(1) GAAP (3) Solutions Other(4) Items(1) GAAP (3) ENI Revenu
Slide 24: Segment Information for Q3'22
Segment Information for Q3'22 Three Months Ended September 30, 2022 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 86.8 $ — $ — $ 86.8 ENI Operating Expenses 40.4 4.1 (8.7) 35.8 Earnings before variable compensation 46.4 (4.1
Slide 25: Assets Under Management Rollforward
Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended December 31, 2022 December 31, 2021 September 30, 2022 Total Beginning balance $ 83.3 $ 113.7 $ 90.5 Gross inflows 3.1 2.9 2.0 Gross outflows (2.8) (4.4) (2.3) Reinvested income and distributions 1.0 0.7 0
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) Three Months Ended ENI Adjustments ($ in millions) December 31, December 31, September 30, 2022 2021 2022 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 30.4 $ 39.2 $ 17.8 changes in the v
Slide 28: Reconciliations from U.S. GAAP to Non-GAAP Measures
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, 2022 2021 2022 U.S. GAAP net income per share $ 0.72 $ 0.53 $ 0.42 Adjustments to reflect th
Slide 29: Reconciliations from U.S. GAAP to Non-GAAP Measures
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, 2022 2021 2022 U.S. GAAP operating expense $ 74.8 $ 114.4 $ 56.7 Less: items excluded from
Slide 30: Reconciliations from U.S. GAAP to Non-GAAP Measures
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 ($ in millions) Three Months Ended December 31, December 31, September 30, 2022 2021 2022 U.S. GAAP pre-tax income from continuing operations $ 44.8 $ 58
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 “BSUS” or the “Center” refer to the holding company excluding the Affiliates. BrightSphere currently operates its business through one asset management fi
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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