AlTi Global, Inc. Q4 FY2024 earnings call

• Strategic partnerships: Announced partnership with AllianzX, Constellation Wealth Capital, and Allianz, including $450 million investment and access to private markets. • Acquisitions: Completed acquisitions of East End Advisors, Envoy, Pointwise Partners, and Kontoora, adding assets and expanding market reach. • Divestitures: Sold LRA, European Trust and Private Office Service, and are divesting international real estate business. • Cost-cutting: Implemented zero-based budgeting (ZBB) to streamline costs, transformed technology platforms, and reduced operating expenses by $54 million in 2024.

On a consolidated basis, assets under management and advisement grew 6% year over year. The core wealth and capital solutions segment saw assets increase 15% driven by acquisitions and portfolio performance. For 2024, AlTi Global, Inc. generated $207 million in revenues, with 96% from recurring management fees. Consolidated adjusted EBITDA was $17 million, while the core wealth management and capital solutions segment delivered adjusted EBITDA of $37 million with a 19% margin. The core wealth and capital solutions segment had $198 million in revenues for the year and $51 million in Q4, with assets under management up 15% year over year. The international real estate segment, which is being divested, had revenues of $9 million for the year and $2 million in Q4.

• Expect to continue executing growth plans with available cash of $65 million as of December 31st. • Anticipate expenses to be lower going forward due to ZBB implementation. • Repaid credit facility and have no bank debt, with debt instruments to align with growth needs. • Confident in executing on growth plan with strengthened balance sheet and partnerships.

• Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ. • Year-over-year comparisons were skewed by a one-time $41 million incentive fee recorded in Q4 2023.

Q: Could you talk a little bit more about the acquisition in Germany and why it makes strategic sense?

A: Germany is the third-largest ultrahigh net worth market. Contura is a premier independent operator in Germany, a perfect fit for AlTi Global's services.

Q: Following the deal in Germany, can you talk about where you are on deploying capital? What amount of capital do you have that remains to be deployed, and just if you can give us some color on the pipeline?

A: As of December 31st, $65 million in available cash. Active pipeline of organic growth in US, Europe, Middle East, with acquisitions and team lift-outs considered.

Q: Is there anything else that we should expect from the strategic review on real estate? I guess, financial impact-wise, or is that behind us?

A: The review was complete, and we are in the final stages of the divestment process, with no additional financial impact expected.

Q: Could you talk a little about the normalized operating expenses? Is this a good run rate going forward, or is there a lot more that can be done on the expenses?

A: Using zero-based budgeting, we're optimizing expenses across all areas, expecting lower expenses going forward, focusing on non-comp expenses and streamlining.

Q: What are you seeing on the M&A, arbitrage, pipeline? Understand the M&A environment is a bit choppy. Just want to see if there is anything you are, I guess, expecting this year in terms of that connectivity?

A: The M&A environment is improving with constructive communication from regulators, setting up for increased M&A activity with a big pipeline of deals bankers are working on.