Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q4 2023 Earnings Presentation
32 slides from Acadian Asset Management's earnings presentation, Feb 1, 2024
Slide 1: BrightSphere Reports Fourth Quarter 2023 Results
1 Contact: Investor Relations ir@bsig.com (617) 369-7300 Exhibit 99.1 BrightSphere Reports Financial and Operating Results for the Fourth Quarter Ended December 31, 2023 • U.S. GAAP earnings per share of $0.54 for the quarter, compared to $0.72 for Q4'22 • 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 March 28, 2024 to shareholders of record as of the close of business on March 15, 2024. Conference Call Dial-in The Company will hold a conference call and simultaneous webcast
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 and growth of the Company’s busi
Slide 4: Q4 2023
4 Q4 2023 EARNINGS PRESENTATION February 1, 2024
Slide 5: Q4'23 Highlights
5 • 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 $15 million • Equity Alternatives continued to build a strong
Slide 6: U.S. GAAP Statement of Operations
6 U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended December 31, December 31, Increase (Decrease) September 30, 2023 2022 2023 Management fees $ 94.5 $ 86.0 9.9 % $ 95.3 Performance fees 36.5 36.3 0.6 % 11.2 Consolidated Funds’ revenue 0.2 0.4 (50.0) % 0.8
Slide 7: Acadian Financial Highlights
7 Revenue-Weighted 90% 90% 92% 3-Year 5-Year 10-Year 0% 50% 100% Equal-Weighted 79% 75% 87% 3-Year 5-Year 10-Year 0% 50% 100% 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, comp
Slide 8: Acadian Platform Overview
8 Acadian Platform 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 Officer • Leading, at-
Slide 9: Systematic Investing Capabilities
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 77.8% Emerging Markets 22.2% USA 67.4% Europe 16.0% Asia 4.2% Australia 6.3%Other 6.1% Public/Government 42.1% Commingled Trust/UCITS 24.3% Corporate/ Union 11.6% Sub-advisory 12.3% Other 9.6% AUM by Client Type AUM by Client Location Total: $103.7 billion(1) Diversified Asset B
Slide 11: Investment Strategies
11 Equity strategies apply insights from over 35 years of systematic investing experience combined with the power of data Global, Emerging Markets, Non-US, Regional Managed volatility portfolios seek to deliver active returns and lower volatility based on both the mispricing of risk and stock fundam
Slide 12: Sector Tailwinds Expected to Support Organic Long-term Growth
12 Sector Tailwinds Expected to Support Organic Long-term Growth Alpha Secular Trends Anticipated Impact for Acadian Acadian Brand and Barriers to Entry Organic Growth Applying Data and Expertise to New Capabilities Explosive Growth in Alternative Data Continued Development of Advanced Techniques: M
Slide 13: Growth Initiatives: Systematic Credit, Equity Alternatives, Systematic Macro
13 • Systematic Credit ◦ We believe current industry dynamics create an attractive opportunity for Acadian to expand and diversify its business into systematic credit and that Acadian is well positioned to win a share of this large market ◦ Roll-out of Systematic Credit effort continuing to move for
Slide 14: Disciplined Execution of Long-Term Growth Strategy
14 • Leveraging broad quant capabilities to provide exposures and solutions sought by clients ◦ Ongoing initiatives including Equity Alternatives, Systematic Credit, and Multi-Asset Class strategies • Highly scalable offerings with substantial capacity and global demand Disciplined Execution of Long
Slide 15: Key Performance Metrics
15 Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended December 31, Three Months Ended September 30, U.S. GAAP Basis 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Revenue $ 131.2 $ 122.7 6.9 % $ 107.3 22.3 % Pre-tax income attributab
Slide 16: ENI Revenue
16 ENI Revenue • ENI revenue includes management fees and performance fees • Q4'23 ENI revenue of $131.0 million increased from Q4'22 by 7%; primarily due to higher management fees driven by higher average AUM ◦ Performance fees remained strong due to outperformance in certain incentive-fee eligible
Slide 17: ENI Operating Expenses
17 ENI Operating Expenses Three Months Ended December 31, Three Months Ended September 30, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease)$M % of MFs(2) $M % of MFs(2) $M % of MFs(2) Fixed compensation and benefits $ 22.9 24.2 % $ 22.2 25.8 % 3% $ 23.1 24.2 % (1)% G&A expenses (excl. sal
Slide 18: ENI Variable Compensation
18 ENI Variable Compensation ($M) Three Months Ended December 31, Three Months Ended September 30, 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Cash variable compensation $ 28.7 $ 27.6 4% $ 26.9 7% Add: Non-cash equity-based award amortization 1.8 2.3 (22)% 1.6 13% Variable compensation 30
Slide 19: Affiliate Key Employee Distributions
19 Affiliate Key Employee Distributions Three Months Ended December 31, Three Months Ended September 30, ($M) 2023 2022 Increase (Decrease) 2023 Increase (Decrease) Earnings after variable compensation (ENI operating earnings) $ 47.8 $ 44.5 7% $ 30.6 56% Less: Affiliate key employee distributions (1
Slide 20: Balance Sheet
20 Balance Sheet ($M) December 31, 2023 December 31, 2022 Assets Cash and cash equivalents $ 146.8 $ 108.4 Investment advisory fees receivable 143.4 122.5 Right of use assets 57.2 59.9 Investments 64.7 48.4 Other assets 164.1 162.4 Assets of consolidated Funds 35.2 17.1 Total assets $ 611.4 $ 518.7
Slide 21: Supplemental Information
21 Supplemental Information
Slide 22: Segment Information for Q4'23 and Q4'22
22 Segment Information for Q4'23 and Q4'22 Three Months Ended December 31, 2023 Three Months Ended December 31, 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 Rev
Slide 23: Segment Information for Q3'23
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 (3.4) 1.1 60.2 Variable com
Slide 24: Assets Under Management Rollforward
24 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
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) December 31, December 31, September 30, 2023 2022 2023 U.S. GAAP net income attributable to controlling interests $ 22.8 $ 30.4 $ 19.6 Adjustments to reflect the economic earnings of the Company: Non-cash key employee-owned equity and profit interest revaluation
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 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
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 December 31, December 31, September 30, 2023 2022 2023 U.S. GAAP operating expense $ 95.6 $ 74.8 $ 77.1 Less: items excluded fro
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 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 of the Company: Non-cash key employee-owned equity and pro
Slide 30: Non-GAAP Measure Definitions and Disclosures
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 and Variable Compensation Ratio 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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