Silvercrest Asset Management (SAMG) 1 Nov 24 2024 Q3 Earnings call transcript

Silvercrest Asset Management Group Inc. held its third quarter 2024 earnings conference call, providing insights into the company's financial performance and strategic initiatives. The call, led by Chairman and CEO Richard Hough and CFO Scott Gerard, highlighted key themes and trends that underscore Silvercrest's growth prospects and challenges.

Financial Performance and Business Growth

The call underscored Silvercrest's successful navigation of the market recovery since 2022, with a focus on diversified wealth management and small-cap institutional business. The company reported a robust pipeline of new business opportunities, with discretionary AUM increasing by $1 billion to $22.6 billion and total AUM reaching $35.1 billion, marking a 13% year-over-year growth. Despite a reported net loss in discretionary flows, total asset flows and market increases remained positive, indicating a promising outlook for future revenue growth.

Global Equity Strategy and New Hires

A significant highlight of the call was the update on Silvercrest's global equity strategy, which is expected to attract significant inflows in the near term. The company has already hired the primary portfolio management team and is actively expanding its staffing in this area. The global equity strategy is seen as a high-capacity opportunity for substantial inflows, given the high demand for global equity capabilities and the increasing interest of international families and institutions in this asset class.

Compensation and Buyback Activity

Silvercrest also discussed its compensation strategy and buyback activity. The company emphasized its commitment to attracting top talent while maintaining a competitive compensation structure. Additionally, the company's buyback activity was highlighted, with a plan to repurchase shares up to $12 million and a focus on leveraging the flexibility of this approach to accommodate potential acquisitions.

EBITDA Margin and Future Growth

Looking ahead, Silvercrest remains focused on achieving an EBITDA margin in the upper 20s, reflecting the maturity of its business. The company is investing in various areas, including organic growth initiatives and international expansion, to position itself for future growth. These investments are expected to enhance the firm's institutional quality offering and support its pursuit of large mandates from high-net-worth clients.

In conclusion, Silvercrest Asset Management Group's third quarter earnings call painted a positive picture of the company's financial health and strategic direction. The call underscored Silvercrest's resilience in navigating market recovery and its focus on diversified wealth management and global equity strategies. With a strong pipeline of new business opportunities and strategic investments in place, Silvercrest is well-positioned to capitalize on the growing demand for institutional-quality offerings in the global equity market.