SAMG.NASDAQSilvercrest Asset Management Group INC

10-Q: Silvercrest Asset Management Group Reports Q1 2025 Results: AUM Declines Slightly Amid Market Depreciation

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Silvercrest Asset Management Group's Q1 2025 results reveal a slight decrease in assets under management (AUM) due to market depreciation, despite net client inflows.

Worse than expectedNet income attributable to Silvercrest decreased to $2.469 million from $3.000 million in the prior year.Adjusted EBITDA decreased to $6.497 million from $7.453 million in the prior year.Assets under management decreased by 3.3% to $35.3 billion.

Summary

  • Silvercrest Asset Management Group Inc. reported its financial results for the first quarter of 2025.
  • Assets under management (AUM) decreased by 3.3% during the quarter, from $36.5 billion to $35.3 billion.
  • The decrease in AUM was primarily due to market depreciation.
  • Total revenue increased by 3.7% to $31.4 million, compared to $30.3 million in the same period last year.
  • Net income attributable to Silvercrest was $2.469 million, compared to $3.000 million in the prior year.
  • Adjusted EBITDA was $6.497 million, with an Adjusted EBITDA margin of 20.7%.
  • The company repurchased 217,063 shares of its Class A common stock during the quarter at an average price of $17.82 per share.
  • The company was in compliance with the covenants under its credit facility as of March 31, 2025.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While revenue increased slightly, AUM and net income decreased, indicating mixed performance. The company is managing its expenses and remains compliant with its credit facility, but the overall tone is cautiously optimistic.

Positives

  • Total revenue increased by 3.7% to $31.4 million.
  • The company continues to repurchase shares under its share repurchase program.
  • The company was in compliance with the covenants under its credit facility as of March 31, 2025.
  • Gross client inflows were $1.4 billion.

Negatives

  • Assets under management decreased by 3.3% to $35.3 billion.
  • Net income attributable to Silvercrest decreased to $2.469 million.
  • Net cash used in operating activities was $24.714 million.
  • The decrease in assets under management was primarily due to market depreciation.

Risks

  • A decline in the prices of securities would cause revenue and income to decline due to a decrease in the value of the assets managed.
  • Clients could withdraw their funds in favor of investments offering higher returns or lower risk, which would cause revenue and income to decline further.
  • The company's dividend policy has certain risks and limitations, particularly with respect to liquidity.

Future Outlook

The company expects that its cash and liquidity requirements in the next twelve months will be met primarily through cash generated by its operations and will continue to evaluate its liquidity and financial position on an ongoing basis.

Industry Context

The report reflects the challenges faced by asset managers in a market environment characterized by depreciation, impacting AUM and profitability.

Comparison to Industry Standards

  • Without specific competitor data, it's challenging to provide a detailed comparison.
  • However, firms like Affiliated Managers Group (AMG), Focus Financial Partners, and other publicly traded asset and wealth managers could be used as benchmarks.
  • Comparing Silvercrest's AUM change, revenue growth, and EBITDA margin to these firms would provide a better understanding of its relative performance.
  • For example, AMG's Q1 results often highlight net client cash flows and AUM changes, which can be compared to Silvercrest's reported figures.
  • Focus Financial Partners' emphasis on partnership firms and wealth management services offers another point of comparison, particularly regarding revenue mix and growth strategies.

Related Party Transactions

  • The Company provided services to related entities, including Silvercrest Hedged Equity Fund, L.P., Silvercrest Emerging Markets Fund, L.P., and others, earning management fee income of $916 and $1,005 for the three months ended March 31, 2025 and 2024, respectively.
  • The Company earned management and advisory fees of $472 and $455, respectively, from assets managed on behalf of certain of its employees for the three months ended March 31, 2025 and 2024.

Stakeholder Impact

  • Shareholders may be concerned about the decrease in AUM and net income.
  • Employees may be affected by changes in compensation and benefits expense.
  • Clients may be impacted by the performance of the company's investment strategies.

Next Steps

  • The company will continue to evaluate its liquidity and financial position on an ongoing basis.
  • The company intends to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P.

Key Dates

DateDescription
March 11, 2004Silvercrest Asset Management Group LLC (SAMG LLC) acquired 100% of the outstanding shares of James C. Edwards Asset Management, Inc. (JCE).
December 31, 2004SLP acquired 100% of the outstanding shares of the LongChamp Group, Inc. (now SAM Alternative Solutions, Inc.) (LGI).
March 31, 2005SLP entered into an Asset Contribution Agreement with and acquired all of the assets, properties, rights and certain liabilities of Heritage Financial Management, LLC (HFM).
October 3, 2008SLP acquired 100% of the outstanding limited liability company interests of Marathon Capital Group, LLC (MCG).
December 10, 2008Silvercrest L.P. was formed.
January 1, 2009Silvercrest L.P. commenced operations.
November 2, 2012The Companys board of directors adopted the 2012 Equity Incentive Plan.
June 24, 2013The subsidiaries of Silvercrest L.P. entered into a $15.0 million credit facility with City National Bank.
June 26, 2013Silvercrest became the sole general partner of Silvercrest L.P.
December 13, 2018Silvercrest executed an Asset Purchase Agreement to acquire certain assets of Neosho Capital LLC.
January 15, 2019The transaction contemplated by the Neosho Asset Purchase Agreement closed.
July 1, 2019The credit facility was increased and consisted of a $25.5 million delayed draw term loan that was to mature on July 1, 2026, and a $10.0 million revolving credit facility with a stated maturity date of June 18, 2024 and a stated term loan draw date of July 1, 2024.
June 17, 2022The revolving credit facility was amended to replace LIBOR terms with its successor, the Secured Overnight Financing Rate (SOFR).
February 15, 2022The credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company's subsidiaries.
June 18, 2024The subsidiaries of Silvercrest L.P. and City National Bank entered into an Amendment and Restatement Agreement, which amends and restates the credit facility.
August 16, 2024The Company announced that its Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $12,000,000 of the Company's outstanding Class A common stock (the 2024 Repurchase Program).
March 31, 2025End of the reporting period for the Q1 2025 results.
May 5, 2025The number of outstanding shares of the registrants Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, as of May 5, 2025 was 9,260,655 and 4,149,032 , respectively.
May 8, 2025Date of report filing.

Keywords

assets under management, financial results, investment management, revenue, EBITDA, share repurchase, Silvercrest

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