AlTi Global, Inc. Q1 FY2025 earnings call

Growth Initiatives - Closed the acquisition of Kontora, entering Germany's ultra-high net worth market. - Launched a new private credit program in a joint venture with Allianz X, securing approximately $240 million in commitments from international wealth clients since December. - Implemented a resource optimization program using a zero-based budget approach to align costs with strategic priorities. ### Partnerships - Leveraged strategic partners Allianz X and Constellation Wealth Capital to scale operations, expand into new markets, and broaden offerings. - The joint venture with Allianz X is transforming client access to private markets, starting with the $1.5 trillion global private credit market. ### Operational Streamlining - Completed a zero-based budgeting process, identifying substantial annual savings to be reflected in 2026. - Progressed in exiting the noncore International Real Estate segment, with a definitive plan to be provided next quarter. ### Impact Focus - Launched the 2025 AlTi Global Social Progress Index in partnership with the Social Progress Imperative to help clients align investments with purpose.

AlTi generated $58 million in consolidated revenue in the first quarter, representing a 14% year-over-year increase. The core Wealth Management and Capital Solutions segment contributed $57 million in revenue, a 23% year-over-year rise. This growth was driven by a 10% increase in Assets Under Management and advisement, along with robust investment distributions. Notably, 83% of consolidated revenue stemmed from recurring management fees. Adjusted EBITDA for the quarter stood at $9 million, up from $7 million in the same period the previous year. The Wealth and Capital Solutions segment had an adjusted EBITDA of $19 million, with a 34% margin.

- Anticipates the Kontora acquisition to be consolidated in Q2 2025 and to be accretive to EBITDA this year. ### - Plans to provide more detailed guidance on the long-term financial outlook, including margin expansion and capital allocations later in the year. ### - Expect zero-based budgeting efforts to unlock meaningful savings, with some reinvested to support long-term margin expansion.

- Market volatility could affect portfolio performance and client asset allocations. ### - The recurring cost base remains high relative to the business scale, requiring ongoing efforts to optimize expenses. ### - Uncertainties in executing strategic initiatives such as M&A and market expansion could impact outcomes.

Q: Could you talk a bit about the zero-based budgeting efforts, quantify potential expense reductions and provide a timeline?

A: The zero-based budgeting process involves a line-by-line review of all business segments. Implementation has started immediately, though some costs have longer tails. More specifics will be given later in the year, with more precise quantification in August.

Q: Could you elaborate on expectations for Germany's growth and the M&A pipeline and remaining capital to deploy?

A: Germany is a significant market. Kontora is a well-matched entrepreneurial firm. They've already secured major client mandates and are working on several prospects. There's a range of M&A pipeline, including individual team lift-outs and organizations in various markets. Current capital is sufficient for short-term, smaller opportunities.

Q: Could you provide more detail on the real estate business and its near-term direction?

A: We are divesting from the International Real Estate segment, which is noncore. A definitive plan for this will be provided by the next call in August.

Q: How should we think about market volatility in 2Q and its impact on clients and AUM?

A: Relatively steady. We projected greater volatility. We focus on higher-quality risk assets and have a balance of assets like gold and illiquid assets. Our research team keeps clients informed about news flow, and some families are taking advantage of having assets in other jurisdictions and currencies.