Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AlTi Global Inc (ALTI, Financial) reported a 13% growth in assets under management and advisement over the trailing 12-month period, reaching $77 billion.
- The company generated revenues of $53.3 million in the third quarter, marking an 11% increase compared to the same period in 2023.
- 97% of the revenues in the quarter were from recurring fees, indicating a stable income stream.
- The partnership with Allianz X and Constellation Wealth Capital has strengthened AlTi's wealth management solutions and expanded its market footprint.
- AlTi's core wealth and capital solutions segment saw a 62% increase in adjusted EBITDA, reflecting strong operational performance.
Negative Points
- AlTi Global Inc (ALTI) recorded a GAAP net loss of $111.4 million for the third quarter, primarily due to impairment charges.
- The company faced a $116.1 million impairment charge related to goodwill and intangible assets, impacting financial results.
- Revenues in the international real estate segment decreased to $1.5 million from $4.1 million in the third quarter of 2023.
- The strategic review concluded that the real estate businesses are not additive to AlTi's long-term strategy, leading to potential divestitures.
- Operating expenses remain a focus, with ongoing efforts to reduce costs while balancing investments in infrastructure and personnel.
Q & A Highlights
Q: Could you talk a little bit about the demand for private debt in ultra high net worth portfolios? Is this a new asset class for many of them, and what do you think an allocation could be over the longer run?
A: Mike Tiedemann, CEO: Private debt is already an allocation in many portfolios, but we see it as an area for growth due to its competitive and consistent returns. It helps diversify portfolios and combat inflation. The partnership with Allianz offers a unique structure with competitive fees and co-investment opportunities, which will be increasingly attractive, especially in challenging credit markets.
Q: Could you talk a little bit about the run rate for expenses and what we can expect in the coming quarters?
A: Stephen Yarad, CFO: We've made progress on expenses both on a gross and normalized basis. While there might be some one-time expenses in any given quarter, we are working hard to reduce expenses and maintain cost discipline. We expect to continue making progress, although there might be offsets due to investments in infrastructure and people.
Q: Can you talk about some of your tech focuses given the hiring of the CTO?
A: Mike Tiedemann, CEO: Our tech focus is on delivering consistent and effective service and information to clients, creating operational efficiencies, and improving data collection and controls. We believe investing in a robust technology architecture will pay off significantly and are excited about the immediate impact of our new CTO, Phil Dundas.
Q: Can you discuss the impacts of interest rates on your business, both short-term and long-term, and any potential U.S. election impacts?
A: Mike Tiedemann, CEO: We avoid discussing politics directly, but we acknowledge geopolitical and currency effects. Regarding interest rates, higher rates provide a better base for portfolio growth, making the fixed income environment more attractive. For the firm, managing debt carefully is crucial, and falling rates would benefit our borrowing capabilities.
Q: How are you positioned to handle potential changes in the economic environment, such as interest rate fluctuations or geopolitical events?
A: Mike Tiedemann, CEO: We are well-positioned with a strong research team and strategic partnerships like Allianz, which provide unique opportunities and competitive advantages. Our focus remains on delivering value to clients and managing our financials prudently to navigate any economic changes effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
