AlTi Global, Inc. Held its Q4 2023 Earnings Conference Call on March 15, 2024

AlTi Global, Inc. recently held its Q4 2023 earnings conference call on March 15, 2024. After completing a successful business combination and going public in January 2023, the company has made significant strides in expanding its presence in the market. In Q2, AlTi secured a substantial $250 million credit facility, enhancing its share liquidity and float. Through a careful strategic review, the company identified $16 million in annualized cost savings initiatives. Moreover, AlTi’s assets under management and advisement grew by an impressive 10% in 2023, with the Wealth Management segment experiencing a remarkable 20% increase. Although the company reported a loss of $319 million for the full year of 2023, their adjusted net loss, excluding one-off items, was a modest $8 million. With a strong focus on long-term success and creating sustainable shareholder value, AlTi recently announced a strategic investment from Allianz X and Constellation Wealth Capital (CWC), providing up to $450 million for their strategic priorities. As they continue to pursue profitable organic and inorganic growth globally, AlTi aims to become the leading global independent multi-family office for the ultra-high net worth segment, particularly focusing on Alternatives. With a robust M&A pipeline, the company anticipates driving further growth and margin expansion through future transactions.

Q4 2023 Earnings Conference Call

AlTi Global, Inc. (ALTI) held its Q4 2023 earnings conference call on March 15, 2024. The conference call served as an opportunity for the company to provide updates and discuss its financial performance for the quarter and the full year of 2023.

Date and Venue

The Q4 2023 earnings conference call took place on March 15, 2024. It was held virtually, allowing participants from around the world to join remotely. This format ensured accessibility and convenience for all stakeholders, including investors, analysts, and media representatives.

Purpose of the Conference Call

The primary purpose of the conference call was to communicate AlTi’s financial results for the fourth quarter of 2023 and the full year. Additionally, the call provided an opportunity for the company’s management team to discuss key initiatives, strategic goals, and the future outlook of the organization. It aimed to give investors and analysts insights into AlTi’s performance, growth strategies, and long-term objectives.

Business Combination and Public Listing

Date of Business Combination

In January 2023, AlTi Global completed a business combination, resulting in the company becoming a publicly listed entity. The transformative event allowed AlTi to access the public markets and raise capital to support its growth initiatives and expansion plans.

Transition to a Public Company

As a result of the business combination, AlTi transitioned from a private company to a publicly listed company. This transition brought greater transparency, increased reporting requirements, and new stakeholders, including public shareholders. The move to the public market also provided AlTi with increased liquidity and visibility, enhancing its ability to attract investors and access new opportunities for growth.

Securing Credit Facility

Amount and Date of Credit Facility

During the second quarter of 2023, AlTi successfully secured a credit facility to support its operations and strategic objectives. The credit facility amounted to $250 million, providing the company with financial flexibility and additional resources to execute its growth plans effectively.

Impact on Share Liquidity and Float

The credit facility secured by AlTi had a positive impact on the company’s share liquidity and float. By securing additional funding, the company increased its financial strength, which in turn boosted investor confidence. The increased liquidity and float allowed for greater trading activity in AlTi’s shares, creating a more dynamic market for investors and potentially attracting a broader range of participants.

Cost Savings Initiatives

Strategic Review

As part of its ongoing focus on operational efficiency and effectiveness, AlTi conducted a strategic review during the year. The comprehensive review aimed to identify areas where cost savings could be realized without compromising the quality of services provided to clients. The strategic review formed the basis for AlTi’s cost savings initiatives.

Identified Cost Savings

Through its strategic review, AlTi successfully identified cost savings initiatives amounting to $16 million on an annualized basis. By implementing these measures, the company aimed to streamline its operations, optimize resources, and reduce unnecessary expenses. The identified cost savings initiatives reflected AlTi’s commitment to maximizing shareholder value while maintaining its high standards of service and performance.

Annualized Cost Savings Amount

The annualized cost savings resulting from the identified initiatives totaled $16 million. These savings contributed to improving the company’s financial performance and bottom line. AlTi’s ability to realize cost savings demonstrated its proactive approach to managing costs and its commitment to operational excellence.

Growth in Assets Under Management

Overall Growth in Assets

In 2023, AlTi achieved significant growth in its total assets under management and advisement. The company’s ability to attract new clients, retain existing ones, and deliver strong investment performance contributed to this growth. Over the course of the year, AlTi’s total assets under management increased by 10%, reflecting the confidence and trust placed in the company by its clients.

Specific Growth in Wealth Management Segment

Within its broader assets under management portfolio, AlTi experienced particularly robust growth in its Wealth Management segment. The segment, which caters to the ultra-high net worth segment, saw its assets grow by almost 20% in 2023. This growth underscores AlTi’s ability to attract and serve high-net-worth individuals and families, who value the company’s expertise, personalized service, and comprehensive wealth management solutions.

Revenue Generation

Q4 Revenue

For the fourth quarter of 2023, AlTi reported revenues of $92 million. This strong revenue performance reflected the continued growth of the company’s client base, the successful execution of its investment strategies, and the ongoing demand for its comprehensive wealth management services. The revenue generated in the fourth quarter demonstrated AlTi’s ability to deliver consistent results even in a challenging market environment.

Breakdown of Recurring and Non-Recurring Revenue

Of the total revenues reported in Q4 2023, approximately 77% came from recurring sources such as management and advisory fees. This stability in recurring revenue highlights AlTi’s ability to establish long-term client relationships and provide ongoing value to its clients. The remaining 23% of revenue came from non-recurring sources, which may include performance fees and other one-time revenues.

Financial Performance

Full Year Loss

During the full year of 2023, AlTi reported a loss of $319 million. This loss primarily stemmed from one-off items and non-recurring expenses related to the business combination and other strategic initiatives undertaken by the company. Despite this loss, AlTi remained optimistic about its long-term prospects and continued to focus on executing its growth strategies.

Adjusted Net Loss

To provide a clearer picture of its underlying financial performance, AlTi reported an adjusted net loss of $8 million for the full year of 2023. By excluding one-off items and non-recurring expenses, this adjusted figure better reflected the ongoing profitability and operational performance of the company. The adjusted net loss demonstrated AlTi’s ability to manage costs, adapt to market conditions, and generate positive results.

Adjusted EBITDA

AlTi reported adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $29 million for the full year of 2023. This metric, widely used in the financial industry, provided insight into the company’s operating profitability and cash flow generation. AlTi’s adjusted EBITDA demonstrated its ability to maintain a healthy financial position, allocate resources effectively, and drive sustainable growth.

Strategic Investment

Investors Involved

AlTi announced a strategic investment from Allianz X and Constellation Wealth Capital (CWC) during the reporting period. This investment represented a strong vote of confidence in AlTi’s business model, growth potential, and ability to generate long-term value for its investors. Allianz X and CWC’s involvement as strategic investors further enhanced AlTi’s reputation and credibility in the financial industry.

Investment Amount

The strategic investment from Allianz X and CWC amounted to up to $450 million, providing AlTi with substantial financial resources to pursue its strategic priorities. This investment demonstrated the strong partnership and alignment of interests between the investors and AlTi, reinforcing the company’s ability to attract capital from reputable institutions.

Purpose of the Investment

The strategic investment from Allianz X and CWC was intended to support AlTi’s growth strategy and accelerate its momentum. The additional capital provided by these strategic investors would be deployed towards both organic and inorganic growth initiatives, enabling AlTi to expand its client base, enhance its service offerings, and explore potential acquisitions and partnerships. The investment represented a significant milestone for AlTi and highlighted the company’s commitment to delivering on its strategic objectives.

Growth Strategy

Organic and Inorganic Growth

AlTi’s growth strategy encompassed both organic and inorganic elements. The company aimed to achieve growth organically by attracting new clients, deepening relationships with existing clients, and expanding its service offerings. Simultaneously, AlTi planned to pursue inorganic growth opportunities through strategic acquisitions and partnerships. This balanced approach allowed the company to leverage its existing capabilities, while also capitalizing on market opportunities and expanding its footprint.

Goal to Become Leading Global Independent Multi-Family Office

A key objective of AlTi’s growth strategy was to become the leading global independent multi-family office catering to the ultra-high net worth segment. The company aspired to be the preferred partner for wealthy families, providing them with comprehensive wealth management solutions, tailored investment advice, and a superior client experience. AlTi aimed to differentiate itself through its expertise, innovative offerings, and commitment to consistently delivering exceptional service.

Focus on Alternatives

As part of its growth strategy, AlTi placed a strong emphasis on the Alternatives segment. Recognizing the increased demand for alternative investments among its clients, AlTi sought to enhance its capabilities in this area. The company aimed to provide its clients with access to a wide range of alternative investment opportunities, such as private equity, real estate, and hedge funds, to help them diversify their portfolios and achieve their financial objectives.

M&A Pipeline

AlTi maintained a robust merger and acquisition (M&A) pipeline as a strategic lever to drive growth and margin expansion. The company actively evaluated potential acquisition targets, assessing their compatibility with AlTi’s business model, client base, and growth objectives. By pursuing strategic acquisitions, AlTi aimed to expand its market presence, acquire new capabilities, and achieve economies of scale. The M&A pipeline demonstrated the company’s commitment to pursuing opportunities that would enhance its competitive position and generate value for its shareholders.

Long-Term Success and Shareholder Value

AlTi’s focus and objectives revolved around long-term success and the creation of sustainable shareholder value. The company recognized that building lasting relationships with clients, maintaining a strong financial position, and delivering consistent performance were critical drivers of long-term success. AlTi remained committed to its core values and guiding principles, with a relentless focus on meeting clients’ evolving needs, driving innovation, and generating attractive risk-adjusted returns. By prioritizing long-term success, AlTi sought to create sustainable shareholder value and secure a prominent position in the global financial industry.