Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q3 2023 Earnings Presentation
32 slides from Acadian Asset Management's earnings presentation, Nov 2, 2023
Slide 1: BrightSphere Reports Third 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 Third Quarter Ended September 30, 2023 • U.S. GAAP earnings per share of $0.46 for the quarter, compared to $0.42 for Q3'22 • U.S. GAAP net income attributable to contro
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 December 28, 2023 to shareholders of record as of the close of business on December 15, 2023. Conference Call Dial-in The Company will hold a conference call and simultaneous w
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: Q3 2023
4 Q3 2023 EARNINGS PRESENTATION November 2, 2023
Slide 5: Q3'23 Highlights
5 • U.S. GAAP EPS of $0.46 for Q3'23 compared to $0.42 for Q3'22 • ENI EPS of $0.45 for the quarter compared to $0.30 for Q3'22 • Equity Alternatives platform seeded in Q4’22 and generating good investment performance; Systematic Credit initiative will start building a track record by investing seed
Slide 6: U.S. GAAP Statement of Operations
6 U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended September 30, September 30, Increase (Decrease) June 30, 2023 2022 2023 Management fees $ 95.3 $ 85.7 11.2 % $ 92.8 Performance fees 11.2 1.1 n/m 2.2 Consolidated Funds’ revenue 0.8 — n/m 1.3 Total revenue
Slide 7: Acadian Financial Highlights and Investment Performance
7 Revenue-Weighted 83% 88% 91% 3-Year 5-Year 10-Year 0% 50% 100% Equal-Weighted 74% 69% 83% 3-Year 5-Year 10-Year 0% 50% 100% Acadian Financial Highlights • Net flows of $(0.5) billion with $(0.3) million annualized revenue impact for Q3'23 compared to net flows of $0.6 billion with annualized reven
Slide 8: Acadian Platform Overview
8 Acadian Platform Overview • Leading, at-scale, systematic investment manager with a track record of over 35 years and $97.4 billion in AUM as of September 30, 2023 • Quant-focused investment platform offering unique capabilities in active equities, multi-asset class, and alternatives; now launchin
Slide 9: Systematic Investing Capabilities Built on People, Data, Clarity
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 77.5% Emerging Markets 22.5% USA 66.9% Europe 17.1% Asia 4.0% Australia 5.7%Other 6.2% Public/Government 42.6% Commingled Trust/UCITS 23.7% Corporate/ Union 11.9% Sub-advisory 12.3% Other 9.4% AUM by Client Type AUM by Client Location Total: $97.4 billion(1) Diversified Asset Ba
Slide 11: Investment Strategies
11 Equity strategies apply insights from over 35 years of systematic investing experience combined with the power of data Global, Emerging Markets, Non-US, Regional Managed volatility portfolios seek to deliver active returns and lower volatility based on both the mispricing of risk and stock fundam
Slide 12: Sector Tailwinds Expected to Support Organic Long-term Growth
12 Sector Tailwinds Expected to Support Organic Long-term Growth Alpha Secular Trends Anticipated Impact for Acadian Acadian Brand and Barriers to Entry Organic Growth Applying Data and Expertise to New Capabilities Explosive Growth in Alternative Data Continued Development of Advanced Techniques: M
Slide 13: Growth Initiatives: Systematic Credit, Equity Alternatives, Systematic Macro
13 • Systematic Credit ◦ We believe current industry dynamics create an attractive opportunity for Acadian to expand and diversify its business into systematic credit and that Acadian is well positioned to win a share of this large market ◦ Roll-out of Systematic Credit effort continuing to move for
Slide 14: Disciplined Execution of Long-Term Growth Strategy
14 • Leveraging broad quant capabilities to provide exposures and solutions sought by clients ◦ Ongoing initiatives including Equity Alternatives, Systematic Credit strategies and Multi-Asset Class • Highly scalable offerings with substantial capacity and global demand Disciplined Execution of Long-
Slide 15: Key Performance Metrics
15 Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended September 30, Three Months Ended June 30, U.S. GAAP Basis 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Revenue $ 107.3 $ 86.8 23.6 % $ 96.3 11.4 % Pre-tax income attributable to
Slide 16: ENI Revenue
16 ENI Revenue • ENI revenue includes management fees and performance fees • Q3'23 ENI revenue of $106.5 million increased from Q3'22 by 23%; primarily due to higher management fees, driven by higher average AUM, and performance fees increased due to strong alpha generated for certain incentive-fee
Slide 17: ENI Operating Expenses
17 ENI Operating Expenses Three Months Ended September 30, Three Months Ended June 30, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease)$M % of MFs(2) $M % of MFs(2) $M % of MFs(2) Fixed compensation and benefits $ 23.1 24.2 % $ 21.5 25.1 % 7% $ 23.7 25.5 % (3)% G&A expenses (excl. sales-b
Slide 18: ENI Variable Compensation
18 ENI Variable Compensation ($M) Three Months Ended September 30, Three Months Ended June 30, 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Cash variable compensation $ 26.9 $ 17.6 53% $ 21.4 26% Add: Non-cash equity-based award amortization 1.6 2.2 (27)% 1.3 23% Variable compensation 28.5
Slide 19: Affiliate Key Employee Distributions
19 Affiliate Key Employee Distributions Three Months Ended September 30, Three Months Ended June 30, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Earnings after variable compensation (ENI operating earnings) $ 30.6 $ 22.5 36% $ 21.1 45% Less: Affiliate key employee distributions (1.5)
Slide 20: Balance Sheet
20 Balance Sheet ($M) September 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 143.1 $ 108.4 Investment advisory fees receivable 103.8 122.5 Right of use assets 58.6 59.9 Investments 62.3 48.4 Other assets 168.6 162.4 Assets of consolidated Funds 16.6 17.1 Total assets $ 553.0 $ 518.7
Slide 21: Supplemental Information
21 Supplemental Information
Slide 22: Segment Information for Q3'23 and Q3'22
22 Segment Information for Q3'23 and Q3'22 Three Months Ended September 30, 2023 Three Months Ended September 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 R
Slide 23: Segment Information for Q2'23
23 Three Months Ended June 30, 2023 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 95.0 $ — $ 1.3 $ 96.3 ENI Operating Expenses 47.3 3.9 0.8 52.0 Earnings before variable compensation 47.7 (3.9) 0.5 44.3 Variable compensation
Slide 24: Assets Under Management Rollforward
24 Assets Under Management Rollforward ($ in billions, unless otherwise noted) Three Months Ended September 30, 2023 September 30, 2022 June 30, 2023 Total Beginning balance $ 99.9 $ 90.5 $ 97.5 Gross inflows 2.5 2.0 2.0 Gross outflows (3.9) (2.3) (2.8) Reinvested income and distributions 0.9 0.9 0.
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) September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP net income attributable to controlling interests $ 19.6 $ 17.8 $ 11.4 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit interest revaluations(2
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 September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP net income per share $ 0.46 $ 0.42 $ 0.27 Adjustments to reflect th
Slide 28: Reconciliation of U.S. GAAP 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 September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP operating expense $ 77.1 $ 56.7 $ 75.9 Less: items excluded from E
Slide 29: Reconciliation of U.S. GAAP 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 September 30, September 30, June 30, 2023 2022 2023 U.S. GAAP pre-tax income $ 27.5 $ 25.3 $ 17.0 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit
Slide 30: Definitions and Non-GAAP Measures Notes
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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