Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q1 2019 Earnings Presentation
19 slides from Acadian Asset Management's earnings presentation, May 2, 2019
Slide 1: Q1 2019 Earnings Presentation
Exhibit 99.2 Q1 2019 EARNINGS PRESENTATION May 2, 2019 1
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation may contain forward looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “expect,” “anticipate,” “may,” “intends,
Slide 3: Leading Company Positioned for Growth
Leading Company Positioned for Growth BrightSphere Highlights(1) Diversified Asset and Client Base(1) • Diversified multi-Affiliate business with $222.3 AUM by Client Location Quarterly Mgmt. Fee Revenue by Asset Class Middle East | 0.1% billion in AUM Asia | 4.9% Australia | 4.5% Fixed Income | 3.1
Slide 4: BrightSphere Strategic Update
BrightSphere Strategic Update Successful Repositioning Focus on Organic Growth • Optimized Center resources and streamlined • Responding to global demand for solutions and Center functions alternative-based strategies by enhancing ◦ Nimble, efficient structure investment capabilities ◦ Entrepreneuri
Slide 5: Solid Earnings Results as Market Recovered
Solid Earnings Results as Market Recovered • GAAP EPS of $0.54 for Q1'19 up 145.5% from $0.22 for Q4'18, primarily driven by completion of Landmark earnout in Q4'18 Financial Results • ENI per share of $0.40 for Q1'19, down (7.0)% from Q4'18 • Results benefitted from a strong market environment, imp
Slide 6: Q1'19 Results Remained Stable from Q4'18
Q1'19 Results Remained Stable from Q4’18 AUM ENI Revenue(1) Pre-tax ENI $206 Performance Average AUM % Change Q4'18 to Q1'19: (3.0)% Performance $m $b % Change E.O.P. AUM Q4'18 to $m % Change Q4'18 to Q1'19: (15.5)% Fees Fees Q1'19: 7.8% End of period % Change ex. perf. fees: 1.7% % Change ex. perf.
Slide 7: Strong Long-Term Investment Performance
Strong Long-Term Investment Performance Products representing ≥ 59% of revenue outperforming on a 3-, 5- and 10- year basis Commentary • BrightSphere uses revenue-weighted performance as its primary investment metric ◦ Ties investment performance to business performance ◦ Reflects percent of managem
Slide 8: Net Client Cash Flows and Revenue Impact
Net Client Cash Flows and Revenue Impact AUM Net Client Cash Flows (“NCCF”) Revenue Impact of NCCF(1) $B $M $19.0 $4 $20 $14.6 $2.4 $15 $13.1 $12.2 $1.9 $2 $1.5 $10 $7.3 $6.8 $0.5 $4.7 $5 $0 $0.8 $(0.3) $0 -$2 -$5 $(3.4) $(1.8) $(5.9) $(2.6) $(2.5) $(2.6) $(7.5) $(2.9) -$10 -$4 $(3.7) $(12.3) $(4.1)
Slide 9: Net Client Cash Flows Breakdown
Net Client Cash Flows Breakdown AUM Net Client Cash Flows (“NCCF”) - by Asset Class Revenue Impact of NCCF(1) - by Asset Class $B $M $4 $24 $3 $20 $2.8 $2 $16 $1.9 $1 74 $12 $22.1 $0.2 $13.8 $0.7 $0.7 $0.6 41 $0.3 $0.2 $8 $0 $0.1 $0.1 $(1.6) $(1.7) 25 $4 -$1 $(2.9) $2.9 $(0.1) $(3.3) $0.5 $1.4 $(3.9
Slide 10: Management Fee Increase Driven by Market Appreciation
Management Fee Increase Driven by Market Appreciation Average AUM and Fee Rate by Asset Class(1)(2) ENI Management Fee Revenue by Asset Class(1)(2) $B Avg. AUM $M % Change % Change % Change: (1.6 )% $250 $250 36.9 % Change: 1.7% $219.4 39.0 $215.9 $23.8 (11%) $204.0 $207.5 73 0% $23.9 (11%) 74 $200
Slide 11: Expense Growth Stable; Q1 Reflects Seasonal Expenses
Expense Growth Stable; Q1 Reflects Seasonal Expenses Commentary • Total ENI operating expenses reflect Affiliate operating expenses, Center expenses and key initiatives, including Global Distribution (excluding variable compensation) • Q1'19 operating expense ratio(1) increased to 42.7% for the peri
Slide 12: Variable Compensation Consistent with Q4'18
Variable Compensation Consistent with Q4’18 Commentary • Variable compensation typically awarded based on contractual percentage (e.g., ~25 – 35%) of each Affiliate’s ENI earnings before variable compensation, plus Center bonuses; also includes contractual split of certain performance fees ◦ Affilia
Slide 13: Affiliate Key Employee Distributions Typically Will Move in Line with Affiliate Profitability
Affiliate Key Employee Distributions Typically Will Move in Line with Affiliate Profitability Commentary • Represents employees’ share of profit from their respective Affiliates, in some cases following an initial preference to BSIG and other equity holders(1) • Q1'19 Distribution Ratio of 19.6% hig
Slide 14: Balance Sheet Management Provides Ongoing Opportunities to Increase Shareholder Value
Balance Sheet Management Provides Ongoing Opportunities to Increase Shareholder Value Balance Sheet Capital ($M) December 31, • March 31 leverage ratio (Debt / Adj. EBITDA) of 2.3x ; March 31, 2019 2018 March 31 net leverage ratio (Debt, net of total cash and Assets cash equivalents / Adj. EBITDA) o
Slide 15: Appendix
Appendix BRIGHTSPHERE investment Group 14
Slide 16: Reconciliation: GAAP to ENI and Adjusted EBITDA
Reconciliation: GAAP to ENI and Adjusted EBITDA(1) ($M) Three Months Ended Three Months Ended ENI Adjustments March 31, December 31, 2019 2018 2018 i. 1 Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling changes in the value of Affiliate equity and interests $ 52
Slide 17: Definitions and Additional Notes
Definitions and Additional Notes References to “BrightSphere,” “BSIG” or the “Company” refer to BrightSphere Investment Group plc; references to “OM plc” refer to Old Mutual plc, the Company’s former parent; references to “BSUS” or the “Center” refer to the holding company excluding the Affiliates;
Slide 18: 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 19: 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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