Silvercrest Asset Management Group Inc. (NASDAQ:SAMG) Q3 2022 Earnings Conference Call November 4, 2022 8:30 AM ET

Company Participants

Richard Hough - Chairman & CEO

Scott Gerard - Chief Financial Officer

Conference Call Participants

Sandy Mehta - Evaluate Research

Chris Sakai - Singular Research

Operator

Good morning, and welcome to the Silvercrest Asset Management Group, Inc. Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please also note, this event is being recorded.

Before we begin, let me remind you that during today's call, certain statements made regarding our future performance are forward-looking statements. They are based on current expectations and projections, which are subject to a number of risks and uncertainties and many factors could cause actual results to differ materially from the statements that are made. Those factors are disclosed in our filings with the SEC under the caption Risk Factors. For all such forward-looking statements, we claim the protections provided by the Litigation Reform Act of 1995. All forward-looking statements made on this call are made as of the date hereof, and Silvercrest assumes no obligation to update them.

I would now like to turn the conference over to Mr. Rick Hough, Chairman and CEO of Silvercrest. Sir, please go ahead.

Richard Hough

Thank you very much. And thanks for joining us today for our third quarter results. Volatile market conditions continue to affect Silvercrest’s assets under management in the third quarter of 2022. The firm’s discretionary AUM, which drives revenue, decreased to $19.4 billion as of the end of the third quarter from $22.5 billion as of the end of the same period in 2021. The firm’s third quarter 2022 revenue decreased year-over-year to $29 million from $33.5 million. Total AUM now stands at $27.4 billion.

The firm’s quarterly adjusted EBITDA was approximately $8.2 million, and annualized adjusted EBITDA run-rate of $32.8 million. Silvercrest’s third quarter 2022 adjusted EBITDA margin was 28.1%, a healthy margin in light of declining AUM and the associated revenue.

Silvercrest added relationships during the third quarter and new accounts partially offset outflows for taxes and rebalancing. Silvercrest’s suite of proprietary equity capabilities have maintained solid performance and our sub-advisory relationships continued to add assets during the third quarter of 2022. And Silvercrest launched a Large Cap Value Unit Investment Trust during the quarter.

Silvercrest repurchased approximately 286,000 shares of Class A common stock for approximately $5.2 million during the third quarter. Market volatility and uncertainty create long-term opportunities that typically benefited the high quality of Silvercrest’s capabilities, and we look forward to more stable markets in the future.