Good morning. My name is Sherry, and I will be your conference operator today. At this time, I would like to welcome everyone to AlTi’s First Quarter 2024 Earnings Conference Call. During the call, your lines will remain in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. I’d like to advise all parties that this conference call is being recorded, and a replay of the webcast is available on AlTi’s Investor Relations website. Now at this time, I’ll turn things over to Lily Arteaga, Head of Investor Relations for AlTi. Please go ahead.

Good morning to everyone on the call today. Joining me this morning are Michael Tiedemann, our CEO; and Stephen Yarad, our CFO. We invite you to visit the Investor Relations section of our website at www.alti-global.com to view our earnings materials, including our updated investor presentation. I would like to remind everyone that certain statements made during the call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as anticipate, believe, continue, estimate, expect, future, intend, may, plan, and will or similar words. Because these forward-looking statements involve both known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. AlTi assumes no obligation or responsibility to update any forward-looking statements. During this call, some comments may include references to non-GAAP financial measures. Full reconciliations can be found in our earnings presentation and our related SEC filings. As I mentioned, we filed an updated investor presentation earlier today. With that, I’d like to turn the call over to Mike.

Thank you, Lily, and thank you all for joining us this morning. The first quarter of 2024 will serve as a catalyst for AlTi in the quarters and years to come. During the quarter, we established groundbreaking strategic partnerships, progressed our growth strategy, and importantly, further streamlined away from noncore assets and strategies to focus on stable recurring revenue businesses. We have immense traction across both our core operations and our M&A pipeline, as you can see through the two deals, we announced since our last call less than 60 days ago. Today, I’m going to share more details on our Q1 results and the progress we are making towards our long-term goals and growth initiatives. Excluding LXi, we have grown our consolidated assets under management and advisement by 10% over the past 12 months to $71 billion. In the first quarter, AlTi generated revenues of $51 million. Importantly, 96% of the revenues in the quarter were from recurring fees. We reported net income of $22 million, adjusted EBITDA was $7 million, and the adjusted EBITDA margin was 13%. Turning to our segments. In Wealth Management, we reported 17% AUM growth in the last year, largely boosted by strong market performance and acquisitions closed in 2023. This robust growth will be further enhanced throughout 2024 as we integrate our recently announced acquisitions. In April, we announced the acquisition of East End Advisors, which adds nearly $6 billion of AUM to our Wealth Management platform. Headquartered in New York, East End boasts a strong investment record and an experienced team that will densify our operations in key regions across the U.S. Additionally, East End enhances our Outsourced Chief Investment Officer or OCIO capabilities as we seek to capitalize on that growing market. AlTi has long admired the exceptional team at East…

Thank you, Mike. Progress with our strategic partners has positioned AlTi for growth for the quarters to come as we continue to execute on our long-term strategy and to streamline and reposition the portfolio on our core recurring revenue businesses. AlTi generated revenues of $51 million in the first quarter. While this reflects a 12% decrease compared to the first quarter of 2023, recurring management fee revenues were essentially flat during this period. We are pleased with the stability of the management fees given the sale of LXi was completed during the current quarter. In addition, the prior year period also included approximately $2 million of management fees related to a public real estate fund, which was deconsolidated from our results after the second quarter of 2023. Further, on a quarter-over-quarter basis, recurring management fee revenues were up 1.4%, reflecting the stable, predictable nature of the business. Revenues in our Wealth Management segment increased 17% to $37 million in the first quarter compared to the first quarter of 2023, consistent with AUM growth during this period. Our robust asset growth is driven by strong market performance as well as by our acquisition of Singapore-based AL Wealth and our increased stake in the Lugano-based multifamily office during 2023. 99% of Wealth Management revenues in Q1 2024 were recurring. In our Strategic Alternatives segment, revenue totaled $14 million in Q1, a decrease of $13 million compared to the first quarter of 2023, largely driven by reduced distributions from investments and lower assets compared to the same quarter in 2023. As discussed earlier, the comparable quarter in 2023 included management fee revenue from public real estate, which was deconsolidated from our results starting in the third quarter of 2023. Compared to the immediately prior quarter, management fees were only marginally down, despite a…

Thanks Steve and thanks everyone for joining us this morning. As you can see, we’ve hit the ground running in 2024, establishing strategic partnerships, executing accretive acquisitions and expanding our portfolio of products and services to attract and retain an exceptional client base. We’re committed to delivering disciplined growth, while managing our expense profile to offer shareholders long-term margin expansion. Our unwavering focus on the Ultra-High-Net-Worth segment differentiates us from other public wealth and alternative platforms. We are positioned to be the global leader with this population and we look forward to updating you on progress in the quarters to come. With that, I’ll open up the call for questions.

Thank you. [Operator Instructions] Our first question is from Wilma Burdis with Raymond James. Please proceed.

Hey, good morning, everyone. Could you please give us an update on the investment by Allianz and CWC? Specifically could talk about the timeline for the approvals process and the potential timing for you to bring in the capital. Thank you.

Yes. Hi, Wilma. How are you? I’ll answer that quickly. They’re really separate. CWC did not have to apply for regulatory approval, so $115 million of the $150 million in total was drawn, and part of that was used in the East End acquisition. An additional $35 million will be coming this quarter to complete that. Allianz has put forth all of the regulatory approvals. So that is in the works, and that has been in the works now for several months. They move very quickly in all the jurisdictions – in the five jurisdictions. We expect that in the second half of the year, we obviously hope that it occurs earlier in the third quarter than later, but we’re – that is our timeframe that we’re working with.

Thank you. And could you talk a little bit about the trajectory of expenses is around $60 million ex-notables in professional fees, a good run rate. And could you discuss the outlook for professional fees giving upcoming investments in inorganic growth? Sorry, that was hard to say.

Thanks, Wilma. It’s Steve. How are you?

I’m doing well. How are you?

Great. So, yes, I think as you’ve seen in the results, we’re starting to see some results or some good trends, at least in the results from the professional fee line and the non-compensation operating expenses. Compared to the first quarter of 2023, we’re down about $8 million in the period, compared to the same period of last year, which is roughly a 15% decline. As we continue to move forward, we are very focused on further reducing professional fee spend. And with that continued focus, we do expect the trends to continue to trend downward. Obviously, as we embark on M&A activity, there will be a series of deal expenses that go with M&A, but you won’t see those. You’ll see those as part of the sort of gross GAAP expenses, but on a normalised basis, we add those back. And so those won’t be the normalized expenses. So you might see a situation where at least for the next few quarters, as we sort of execute on M&A activity, you might see a little bit higher professional fees on a gross basis, but on a normalized basis, they should continue to trend down.

And Wilma, just to supplement to what Steve said, this is the focus of the board, senior management, obviously, Steve and his team. It is also directly tied to the streamlining and simplification of the business in aggregate, so those two are linked and important to accomplish in a timeline. So that is absolutely one of our top goals for this calendar year to continue to make significant progress.

Thank you. So the $60 million, I think that was ex-notables and professional fees, is that pretty – that’s pretty good for now. I think you guys talked a little bit more about the professional fee part. And then I think you guys have talked about $16 million of run rate cost saves that should come in later this year. So maybe just talk about that piece as well. Thank you.

So, yes, Wilma, I think you’re referring to what we previously discussed, roughly $16 million of cost savings that were identified as part of an exercise we did during 2023. So we’ve talked about the fact that those cost savings would be achieved over a multi period time horizon and would be fully embedded in our results by the end of the second quarter of 2024. So I think we’d still say that that’s the case. I think when you look at our go forward professional expenses and – sorry, go forward operating expenses I should say, you’ll see the benefit of that cost saving initiative fully embedded in the results by the end of the second quarter. So I think we’re still on track for that.

Thank you. And can you discuss the rationale for exiting the LXi REIT advisory business? And it seems like you brought on a couple of very nice deals, and it sounds like you talked about those offsetting each other from an earnings perspective. But maybe talk a little bit about the businesses you’ve exited and the businesses you’ve entered and why you like that trade? Thank you.

The Board of LXi was the driver of the decision. We were the manager of the REIT. They felt that the combination of LondonMetric and LXi was a stronger, more scalable business. So the acquisition was ultimately approved by the Board and we helped. Obviously, we played along with the diligence process and then negotiated. What we felt was fair value for the exit of the remaining portion of the contract that we have.

And Wilma, what I’d add to Mike’s comments in terms of LXi coming off and that’s now out of our numbers starting in the second quarter. But what will be coming on to replace that revenue and EBITDA is the consolidation of East End. And also when we get to the third quarter, there’ll be the consolidation of Envoi, which we’ve just recently announced. And so the combination of those – when you think about what’s coming off versus what’s going on, it will largely be replaced. However, when you think about the revenue streams and the complexity of the new businesses versus the old, we feel that it’s a better fit. This – these types of acquisitions are very much in line with the type of business that we really like from an operating perspective. It’s recurring revenue-based activity at sort of lower headcount, lower operational risk, complexity type of things, so we really like these businesses.

Okay. And maybe just talk a little bit about the pipeline. It seems like it’s been pretty active, but just I realized you’ve got a lot of capital to invest. So maybe just talk about what you’re seeing out there? Thank you.

We think of it in three ways. And it’s important our top priority is and will always be organic growth. And the importance of why we integrate our offices are – our operations globally is because the collaboration and the support for the business development effort that can be driven by that leads to organic growth. So that is a critical focus, will always be and the more we get integration behind us, the more the organic growth begins to accelerate. So that’s the primary focus. The secondary focus is talent acquisition. As we think about our various jurisdictions and where we have offices across these various regions, we want to be able to bring in revenue-producing talent. We have the infrastructure to support them. We have a global infrastructure that is unique, and we are now turning our efforts or recruiting efforts related towards bringing in talent as we highlighted one in Dallas and a team of people that have – that are already paying benefits. And same is true in Europe, which we’ll talk about in later quarters. In terms of the inorganic pipeline, we are looking at that holistically. We’re – there really needs to be a strategic fit. The wealth firms that have joined us squarely in not only our strategy, but culturally and they are perfect fits within our organization. So the integration will be seamless. That’s vital – of vital importance to us. We’re now beginning to look, spend more time looking across other geographies, and obviously are engaged as well in the strategic alternative side.

Okay. Thank you.

[Operator Instructions] With no further questions at this time, I would like to turn the conference back over to Mike Tiedemann for closing remarks.

Thank you, operator, and thank you all for joining us this morning. We look forward to meeting with many of you in the months to come. And if you’re interested in meeting with me or other members of the management team, please don’t hesitate to reach out to Lily. As I mentioned earlier, we really do feel we are positioned to generate accelerated growth in 2024 and create long-term value for our shareholders. Wishing you all a happy and healthy beginning of summer before our next update in August. Thank you again.

Thank you. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.