Silvercrest Asset Management's Earnings Calls Clash on Aum Growth Timelines and Buyback Capacity

Date of Call: Mar 17, 2026

Financials Results

• Revenue: $32 million for Q4; full year revenue increased $1.7 million or 1.3% YOY
• EPS: $0.01 net loss per basic and diluted Class A share in Q4; full year $0.56 per basic and diluted Class A share; adjusted EPS $0.19 and $0.18 in Q4; full year $1.91 per adjusted basic and diluted EPS
• Operating Margin: Adjusted EBITDA margin 15.7% for full year; Q4 adjusted EBITDA $2.9 million or 8.9% of revenue

Business Commentary:

Discretionary and Total AUM Trends:

• Silvercrest Asset Management Group's discretionary assets under management decreased by 1.2% during the fourth quarter from $24.3 billion to $24 billion. For the full year 2025, total discretionary AUM increased by 3% from $23.3 billion to $24 billion.
• The decrease in discretionary AUM during the fourth quarter was due to market conditions, while the full-year increase was supported by favorable markets and organic net new client accounts.

Compensation Expense and Ratio:

• The firm's compensation and benefits expense increased by 12.1% year-over-year in the fourth quarter, contributing to a compensation ratio of 67% of revenue compared to 62% in the previous year.
• This increase was primarily due to merit-based salary increases, new hires, and higher bonus accruals, as the company continues to invest in talent to support growth initiatives.

Non-Discretionary AUM and Reporting Adjustments:

• Total AUM decreased by 1.6% in the fourth quarter to $37 billion, with non-discretionary AUM comprising 4% of total revenue.
• The firm plans to adjust its reporting of non-discretionary AUM to provide a clearer picture of its revenue-driving AUM, as these assets have more than doubled over the past few years.

Strategic Investments and Growth Initiatives:

• Silvercrest has made significant strategic investments in intellectual capital and headcount, which have resulted in elevated compensation ratios and lower earnings compared to steady-state operations.
• These investments are aimed at promoting growth in institutional and wealth markets, with progress highlighted by a strong new business pipeline, particularly in global and international equity strategies.

Capital Returns and Share Repurchase:

• Silvercrest completed a share repurchase program worth $50.4 million, utilizing a strong balance sheet to support capital returns, along with a substantial dividend and growth initiatives.
• The company plans to continue considering share repurchases as a means of returning capital to investors, while also using equity awards to motivate professionals during the growth phase.

Sentiment Analysis:

Overall Tone: Positive

• Management highlights robust new business pipeline, strong institutional interest, and excellent performance in global/international strategies. CEO states, 'I’m quite confident they will bear fruit with patience,' referring to long-term investments. The tone emphasizes strategic progress and future growth potential despite current elevated compensation ratios.

Q&A:

• Question from Sandy Mehta (Evaluate Research): The global international had very strong performance, as you mentioned, and you talked about a strong pipeline. Meaningful growth in AUM. Can you disclose how much AUM you presently have in these strategies? Talk a little bit, give us some more color on what you see in terms of the potential going forward in AUM growth.
  Response: Currently over $2 billion in global/international strategies; performance is excellent, pipeline is strong with significant potential for multi-billion dollar flows, expected to start seeing flows in 2026.

• Question from Sandy Mehta (Evaluate Research): Compensation was up as you mentioned. 67% versus 62%. When we look out to 2026 and 2027, you know, where do you think it comp should be? Is it gonna be more 67 or more 62? What’s your thought here?
  Response: Compensation ratio will remain elevated for foreseeable future, dependent on hiring and flows; expects it to slowly come down but still likely above historical 54-56% range near term.

• Question from Sandy Mehta (Evaluate Research): The buyback is almost completed. What are your thoughts on another buyback? You have a lot of cash on the balance sheet. The share count has come down, which has been great, but you also mentioned stock grants and awards to employees. Can we be confident that if you do further buybacks, that will offset any shares given to employees and the share count, if there are buybacks, will continue to decline?
  Response: Future equity awards will be offset by prior buybacks; firm remains favorable to buybacks as a capital return method but will consider based on stock price and has multiple capital uses.

Contradiction Point 1

AUM Growth Potential and Timing

Contradiction on the timeline for AUM growth contribution.

What did Sandy Mehta from Evaluate Research highlight in the earnings call analysis? - Sandy Mehta (Evaluate Research)

2025Q4: Potential AUM growth is in the multiple billions of dollars, though timing is uncertain; flows are expected to start in 2026. - Rick Hough(CEO)

What is the current AUM in your global/international strategies and the potential for future AUM growth? - Christopher Marinac (Janney Montgomery Scott LLC)

2025Q3: The company expects meaningful progress and a return to more elevated EBITDA and earnings levels by 2027-2028. - Rick Hough(CEO)

Contradiction Point 2

Share Repurchase Program Status

Contradiction on the remaining capacity of the share buyback program.

Sandy Mehta (Evaluate Research) - Sandy Mehta (Evaluate Research)

2025Q4: The firm is favorable toward share buybacks as a capital return method... Share count will not decline further in the near term due to upcoming equity awards. - Rick Hough(CEO)

With the share repurchase program nearly complete, what are your thoughts on another buyback considering the cash on the balance sheet, share count decline, and planned stock grants to employees? - Sandy Mehta (Evaluate Research Limited)

2025Q3: The buyback program was announced in May 2025, and ~$16 million worth of shares have been repurchased year-to-date, with approximately $8-9 million remaining under the program. - Scott Gerard(CFO)

Contradiction Point 3

AUM Growth Pipeline and Timing

Contradiction on the size and immediacy of the AUM pipeline.

Sandy Mehta (Evaluate Research) - Sandy Mehta (Evaluate Research)

2025Q4: Potential AUM growth is in the multiple billions of dollars, though timing is uncertain; flows are expected to start in 2026. - Rick Hough(CEO)

Can you disclose the current AUM in your global/international strategies and discuss their potential for future AUM growth? - Sandy Mehta (Evaluate Research Limited)

2025Q2: The pipeline for clearly defined, actionable opportunities is about $200 million, which has doubled since last quarter. - Richard R. Hough(CEO)

Contradiction Point 4

Compensation Ratio Target and Drivers

Contradiction on the target compensation ratio and the primary driver of its current level.

What are your key takeaways from the earnings call? - Sandy Mehta (Evaluate Research)

2025Q4: The ratio depends entirely on future AUM flows and continued hiring... The historical target is around 54%-56% - Rick Hough(CEO)

Okay, let's see. The user wants me to rewrite the input into a concise earnings-call question following specific rules. The input is: "Compensation was up to 67% versus 62%. Where do you think the compensation ratio will be in 2026 and 2027?" First, I need to make sure I understand the input. The first part gives a comparison between two percentages related to compensation. The question is asking about the future compensation ratio in 2026 and 2027. The rules state that the output must be exactly one line, only the final question text, end with a question mark if possible, and no extra text. Also, if the input isn't a question or too vague, output as-is. But here, the input is already a question, so I need to make it more concise.The original question is a bit wordy. Let's break it down. The first sentence provides context, but maybe that's not necessary. The key part is the question about the future ratio. The original question is "Where do you think the compensation ratio will be in 2026 and 2027?" But "Where do you think" can be simplified. Maybe "What will the compensation ratio be in 2026 and 2027?" That's more direct. Also, the first part about 67% vs 62% might be context, but since the user wants a single question, perhaps the context is implied. However, the instruction says to rewrite into one question, so maybe the context is part of the question? Wait, the input is two sentences. The first is a statement, the second is a question. But the user wants to combine them into one question. Wait, the input is two parts: a statement and a question. The user might want to form a question that includes both. For example, "Given that compensation increased to 67% versus 62%, what will the compensation ratio be in 2026 and 2027?" But the user wants it concise. Maybe "What will the compensation ratio be in 2026 and 2027, given the current 67% versus 62%?" But maybe even shorter. Alternatively, the original question is already a valid question, but perhaps the first part is just context. The user might want to include the context in the question. However, the instruction says to output exactly one line. The original input is two sentences. The user might want to combine them into one question. But the original input is two sentences. The first is a statement, the second is a question. The user wants to rewrite this into one concise question. So perhaps rephrase the question to include the context. For example: "Given the compensation ratio increased to 67% from 62%, what is your outlook for the ratio in 2026 and 2027?" But that's a bit long. Maybe "What will the compensation ratio be in 2026 and 2027, considering the recent increase to 67% versus 62%?" But the user wants it concise. Let me check the example. The original question is "Where do you think the compensation ratio will be in 2026 and 2027?" So maybe the first part is just context, but the user wants to form a question that's concise. Since the input is two sentences, maybe the answer is to combine them into a question that includes the context. However, the instruction says to output exactly one line. The original input is two sentences. The user might want to create a single question that captures both parts. Alternatively, maybe the first sentence is just context and the question is the second part. Since the user wants a single question, perhaps the answer is just the second part, but the first part is context. However, the user wants to include the context in the question. But the user's instruction says "rewrite the input into one concise earnings-call question." So the input is two sentences, and the output should be one question. The first sentence is "Compensation was up to 67% versus 62%." The second is the question. So the output should be a question that includes both parts. So the final question would be: "Given that compensation increased to 67% versus 62%, what will the compensation ratio be in 2026 and 2027?" But maybe "What will the compensation ratio be in 2026 and 2027, considering the current 67% versus 62%?" But the user wants it as concise as possible. Let me check the example again. The input is two sentences. The user wants to combine them into one question. So - Christopher William Marinac (Janney Montgomery Scott LLC)

2025Q2: The mix shift is driven by lower-fee institutional mandates... the basis point per AUM may come down slightly - Richard R. Hough(CEO)

Contradiction Point 5

AUM Growth Timeline

Conflicting statements on when significant AUM growth will start.

How does Evaluate Research assess the company's Q3 earnings performance? - Sandy Mehta (Evaluate Research)

2025Q4: Potential AUM growth is in the multiple billions of dollars, though timing is uncertain; flows are expected to start in 2026. - Rick Hough(CEO)

What is the current AUM in global/international strategies, and what is the potential for future AUM growth? - Sandy Mehta (Evaluate Research)

2025Q1: There is strong optimism for the global value strategy, with a robust pipeline for large follow-on flows in 2025. - Richard Hough(CEO)