Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q3 2022 Earnings Presentation
33 slides from Acadian Asset Management's earnings presentation, Nov 3, 2022
Slide 1: BrightSphere Reports Financial and Operating Results for the Third Quarter Ended September 30, 2022
Contact: Elie Sugarman ir@bsig.com (617) 369-7300 BrightSphere Reports Financial and Operating Results for the Third Quarter Ended September 30, 2022 • U.S. GAAP earnings per share of $0.42 for the quarter, compared to $2.76 for Q3'21, primarily due to the gain on sale of Affiliates in Q3’21 • ENI e
Slide 2: Dividend Declaration
Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on December 30, 2022 to shareholders of record as of the close of business on December 16, 2022. Conference Call Dial-in The Company will hold a conference call and simultaneous web
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: Q3 2022 Earnings Presentation
Q3 2022 EARNINGS PRESENTATION November 3, 2022 4
Slide 5: Q3'22 Highlights
Q3'22 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.42 for Q3'22 compared to $2.76 for Q3'21; Q3'21 EPS included gain on sale of Affiliates • ENI EPS of $0.30 for the quarter compared to $0.28 for Q3'21 • Team and infrastructure for Systematic Credit and Equity Alternatives platform conti
Slide 6: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q3'22 vs. Q3'21 September 30, September 30, June 30, Increase 2022 2021 (Decrease) 2022 • Total revenue decreased (26.4)% Management fees $ 85.7 $ 111.4 (23.1)% $ 93.5 from Q3'21 primarily due to the Perform
Slide 7: Acadian Financial Highlights
Acadian Financial Highlights • Segment NCCF of $0.6 billion with $0.3 million annualized revenue impact for Q3'22 compared to segment NCCF $(0.7) billion with annualized revenue impact of $(1.6) million for Q3'21; AUM decreased 26.7% from Q3'21 driven by market decline • Continued strong long-term i
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 $83.3 billion in AUM as of September 30, 2022 • Quant-focused investment platform offering unique capabilities in active equities, ESG, multi-asset class, managed v
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 Europe 41.4% 23.0% USA 17.3% 67.2% Asia Corporate/ Australia 3.2% Union 6.0% 14.9% AUM by Strategy Other Other 6.2% 7.8% Sub-advisory 12.8% Developed Markets 77.7% Emerging Markets 22.3% _______
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 September 30, Three Months Ended June 30, Increase Increase U.S. GAAP Basis 2022 2021 (Decrease) 2022 (Decrease) Revenue $ 86.8 $ 117.9 (26.4)% $ 95.5 (9.1)% Pre-tax income from cont. ops. a
Slide 17: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees; in Q3’21 ENI revenue included our share of earnings from our previously divested equity-accounted Affiliate, Investment Counselors of Maryland (“ICM”) • Q3'22 ENI revenue of $86.8 million decreased from Q3'21 by (26)
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 $44.5 million in Q3'22 from $47.0 million in Q3'21 reflecting the disposition of Affiliates; Q3'22 Operati
Slide 19: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of each Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractu
Slide 20: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents employees’ share of profit from their respective Affiliate(1) • Q3'22 Distribution Ratio of 4.9% is lower than Q3'21 mainly due to dispositions and mix of earnings • Full-year Distribution Ratio expected to be 4%-6%; mix of core and perfor
Slide 21: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) September 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 101.4 $ 252.1 • September 30 net leverage ratio (third party borrowings and revolving credit facility, net of total cash and cash Investment advisory fees receivable 91.1 167.1
Slide 22: Supplemental Information
Supplemental Information 22
Slide 23: Segment Information for Q3'22 and Q3'21
Segment Information for Q3'22 and Q3'21 Three Months Ended September 30, 2022 Three Months Ended September 30, 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 Reve
Slide 24: Segment Information for Q2'22
Segment Information for Q2'22 Three Months Ended June 30, 2022 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 95.5 $ — $ — $ 95.5 ENI Operating Expenses 39.7 4.4 (18.5) 25.6 Earnings before variable compensation 55.8 (4.4) 18
Slide 25: Assets Under Management Rollforward by Segment
Assets Under Management Rollforward by Segment ($ in billions, unless otherwise noted) Three Months Ended September 30, 2022 September 30, 2021 June 30, 2022 Quant and Solutions Beginning balance $ 90.5 $ 117.8 $ 110.2 Gross inflows 2.0 2.8 2.5 Gross outflows (2.3) (4.2) (6.3) Reinvested income and
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) September 30, September 30, June 30, 2022 2021 2022 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 17.8 $ 229.5 $ 28.6 changes in the val
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 ($) Three Months Ended September 30, September 30, June 30, 2022 2021 2022 U.S. GAAP net income per share $ 0.42 $ 2.76 $ 0.67 Adjustments to reflect the e
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 ($ in millions) Three Months Ended September 30, September 30, June 30, 2022 2021 2022 U.S. GAAP operating expense $ 56.7 $ 89.2 $ 48.8 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 ($ in millions) Three Months Ended September 30, September 30, June 30, 2022 2021 2022 U.S. GAAP pre-tax income from continuing operations $ 25.3 $ 57.4
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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