Acadian Asset Management Inc. · NYSE:AAMI
Acadian Asset Management — BrightSphere Investment Group — Q2 2022 Earnings Presentation
34 slides from Acadian Asset Management's earnings presentation, Jul 28, 2022
Slide 1: BrightSphere Reports Financial and Operating Results for the Second Quarter Ended June 30, 2022
Contact: Elie Sugarman ir@bsig.com (617) 369-7300 BrightSphere Reports Financial and Operating Results for the Second Quarter Ended June 30, 2022 • U.S. GAAP earnings per share of $0.67 for the quarter, compared to $6.42 for Q2'21 due to the gain on sale of Landmark Partners (“Landmark”) in Q2’21 •
Slide 2: Dividend Declaration
Dividend Declaration The Company’s Board of Directors approved a quarterly interim dividend of $0.01 per share payable on September 30, 2022 to shareholders of record as of the close of business on September 16, 2022. Conference Call Dial-in The Company will hold a conference call and simultaneous w
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: Q2 2022 Earnings Presentation
Q2 2022 EARNINGS PRESENTATION July 28, 2022 4
Slide 5: Q2'22 Highlights
Q2'22 Highlights BrightSphere Highlights • U.S. GAAP EPS of $0.67 for Q2'22 compared to $6.42 for Q2'21; Q2'21 EPS included gain on sale of Landmark Partners (“Landmark”) • ENI EPS of $0.41 for the quarter compared to $0.40 for Q2'21; Q2'21 EPS included $0.07 per share contribution from since divest
Slide 6: U.S. GAAP Statement of Operations
U.S. GAAP Statement of Operations ($ in millions, unless otherwise noted) Three Months Ended Q2'22 vs. Q2'21 June 30, June 30, March 31, Increase 2022 2021 (Decrease) 2022 • Total revenue decreased (28.4)% Management fees $ 93.5 $ 111.6 (16.2)% $ 102.2 from Q2'21 primarily due to the Performance fee
Slide 7: Acadian Financial Highlights
Acadian Financial Highlights • Segment NCCF of $(2.8) billion with $(7.4) million annualized revenue impact for Q2'22 compared to $(1.3) billion with annualized revenue impact of $(2.5) million for Q2'21; AUM decreased 23.2% from Q2'21 driven by market decline and outflows • Continued strong long-te
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 $90.5 billion in AUM as of June 30, 2022 • Quant-focused investment platform with leadership across team, technology and data, offering unique capabilities in long-
Slide 9: Diversified Asset Base
Diversified Asset Base AUM by Client Type AUM by Client Location Commingled Public/Government Trust/UCIT 41.4% 23.2% Europe USA 17.6% 67.3% Asia Corporate/ Australia 3.2% Union 5.7% 14.5% AUM by Strategy Other Other 6.2% 7.8% Sub-advisory 13.0% Developed Markets 76.8% Emerging Markets 23.2% ________
Slide 10: Investment Capabilities
Investment Capabilities Diversified Quant offerings including ESG-focused strategies Capability Attributes & Approach • Leverage numerous behavioral factors grounded in sound investment theory and psychological underpinnings; factors supported by observations from a range of disciplines, including s
Slide 11: Sector Tailwinds Expected to Support Organic Long-term Growth
Sector Tailwinds Expected to Support Organic Long-term Growth Secular Trends Anticipated Impact for Acadian Explosive Growth in Alpha Alternative Data Continued Development Acadian Brand of Advanced Techniques: and Machine Learning, AI Barriers to Entry Scale of Investment in Data, Technology, and O
Slide 12: 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 the attractive opportunity for Acadian to expand and diversify its business into systematic credit, and is well positioned to win a share of this large
Slide 13: Systematic Credit: Differentiated Approach in a Vast Market
Systematic Credit: Differentiated Approach in a Vast Market Investors • Increasing demand for strategies uncorrelated with equities along with clear return drivers Pioneering systematic investor with 35+ year • Systematic credit managers have track record of alpha generation produced excess returns
Slide 14: Acadian Equity Alternatives Platform: Demand For Uncorrelated Strategies
Acadian Equity Alternatives Platform: Designed to Meet Investor Demand For Uncorrelated Strategies Market Demand For Diversified, Uncorrelated Strategies • The growing need for diversifying allocations with little correlation to equity markets is underserved by the hedge fund industry given meaningf
Slide 15: 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 All Investment • Factors built from empirical, data driven
Slide 16: 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 include Systematic Macro strategies including Multi-Asset Class, ESG, Unique Quant China A Onshore, Equity Alter
Slide 17: Key Performance Metrics
Key Performance Metrics Key Performance Metrics(1) ($ in millions, unless otherwise noted) Three Months Ended June 30, Three Months Ended March 31, Increase Increase U.S. GAAP Basis 2022 2021 (Decrease) 2022 (Decrease) Revenue $ 95.5 $ 133.3 (28.4)% $ 112.2 (14.9)% Pre-tax income from cont. ops. att
Slide 18: ENI Revenue
ENI Revenue Commentary • ENI revenue includes management fees and performance fees. In Q2’21 ENI revenue included our share of earnings from our previously divested equity-accounted Affiliate, ICM • Q2'22 ENI revenue of $95.5 million decreased from Q2'21 by (28)% primarily due to the impact of Affil
Slide 19: 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 $44.1 million in Q2'22 from $47.8 million in Q2'21 reflecting the disposition of Affiliates; Q2'22 Operati
Slide 20: ENI Variable Compensation
ENI Variable Compensation Commentary • Variable compensation is typically awarded based on contractual percentage of each Affiliate’s ENI earnings before variable compensation plus Center bonuses and also includes a contractual split of certain performance fees which is recognized over the contractu
Slide 21: Affiliate Key Employee Distributions
Affiliate Key Employee Distributions Commentary • Represents employees’ share of profit from their respective Affiliate(1) • Q2'22 Distribution Ratio of 1.7% is lower than Q2'21 mainly due to dispositions and mix of earnings • 2022 Distribution Ratio expected to be 4%-6%; mix of core and performance
Slide 22: Balance Sheet Management
Balance Sheet Management Balance Sheet Capital ($M) June 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 92.2 $ 252.1 • June 30 net leverage ratio (third party borrowings and revolving credit facility, net of total cash and cash Investment advisory fees receivable 98.9 167.1 equivalent
Slide 23: Supplemental Information
Supplemental Information 23
Slide 24: Segment Information for Q2'22 and Q2'21
Segment Information for Q2'22 and Q2'21 Three Months Ended June 30, 2022 Three Months Ended June 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 Revenue $ 95.5
Slide 25: Segment Information for Q1'22
Segment Information for Q1'22 Three Months Ended March 31, 2022 ($ in millions, unless otherwise noted) Quant & Solutions Other(4) Reconciling Items(1) Total U.S. GAAP (3) ENI Revenue $ 112.2 $ — $ — $ 112.2 ENI Operating Expenses 41.1 4.5 (6.4) 39.2 Earnings before variable compensation 71.1 (4.5)
Slide 26: Assets Under Management Rollforward by Segment
Assets Under Management Rollforward by Segment ($ in billions, unless otherwise noted) Three Months Ended June 30, 2022 June 30, 2021 March 31, 2022 Quant and Solutions Beginning balance $ 110.2 $ 111.5 $ 117.2 Gross inflows 2.5 2.7 3.5 Gross outflows (6.3) (4.7) (6.6) Reinvested income and distribu
Slide 27: Reconciliations and Disclosures
Reconciliations and Disclosures 27
Slide 28: 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) June 30, June 30, March 31, 2022 2021 2022 1i. Exclude non-cash expenses representing U.S. GAAP net income attributable to controlling interests $ 28.6 $ 532.7 $ 23.8 changes in the value of Aff
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 per-share U.S. GAAP Net Income to Economic Net Income per share ($) Three Months Ended June 30, June 30, March 31, 2022 2021 2022 U.S. GAAP net income per share $ 0.67 $ 6.42 $ 0.53 Adjustments to reflect the economic e
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 Operating Expense to ENI Operating Expense ($ in millions) Three Months Ended June 30, June 30, March 31, 2022 2021 2022 U.S. GAAP operating expense $ 48.8 $ 97.2 $ 69.0 Less: items excluded from ENI Non-cash
Slide 31: 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 June 30, June 30, March 31, 2022 2021 2022 U.S. GAAP pre-tax income from continuing operations $ 41.3 $ 34.6 $ 33.4 Ad
Slide 32: 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 operates its business through one asset management firm (the “A
Slide 33: 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 34: 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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