Acadian Asset Management Inc. Q3 FY2024 earnings call

• ENI in Q3 2024 increased by 15% to $22.2 million, driven by growth in management fee revenue from higher AUM due to market appreciation and expense discipline.
• ENI per share increased by 31% in Q3 2024 compared to Q3 2023, boosted by $100 million in share repurchases from Dec '23 to H1 2024.
• Acadian strategies showed strong performance: 85%, 93%, 94% of strategies outperformed benchmarks over 3, 5, 10-year periods.
• Positive net client cash flows of $0.5 billion in Q3 2024.
• Transition to rebrand as Acadian Asset Management, having sold 6 of 7 affiliates, reduced corporate overhead by ~70%, and expect new asset classes to drive organic growth.

For the third quarter of 2024, ENI was $22.2 million, a 15% increase from $19.3 million in the third quarter of 2023. ENI per share was $0.59, a 31% increase compared to the third quarter of 2023. Acadian investment performance was strong: as of September 30, 2024, 85%, 93%, and 94% of Acadian strategies by revenue outperformed their respective benchmarks over 3, 5, and 10-year periods. Net client cash flows were positive at $0.5 billion in the third quarter of 2024, compared to breakeven in the second quarter of 2024 and negative in the third quarter of 2023.

• Primary uses of cash are investment in organic growth (seeding new strategies) and share repurchases, both opportunistic.
• Cash usage remains focused on these two areas, with no predetermined prioritization between organic growth investment and share repurchases.

Q: Could there be further expense reductions as the company structure gets streamlined?

A: We maintain expense discipline and continue to find opportunities to be efficient. We've invested in infrastructure but may see operating leverage as revenue grows, but hard to say on absolute dollar expense reductions.

Q: Updated outlook on cash usage for remainder of year and share repurchases near-term?

A: Cash is primarily used for investment in organic growth (seeding new strategies) and share repurchases, both opportunistic and dependent on market conditions and opportunities.

Q: Update on institutional pipeline composition, magnitude, time to funding, geography?

A: Pipeline is healthy, across geographies and strategies. New strategies are moving as expected, but new strategies need track record for meaningful sales.

Q: Update on new strategy prompting, reception of strategic alternatives, traction of new strategies, and capital allocation?

A: Strategy remains focused on maximizing shareholder value and open to strategic alternatives. New strategies are moving as expected with execution going well. Cash is used for organic growth and repurchases opportunistically.