Good morning, and welcome to the Silvercrest Asset Management Group Inc. Q4 and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note today's 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. 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 floor over to Rick Hough, Chairman and CEO of Silvercrest. Please go ahead.

Good morning. Thank you for joining us for our fourth quarter and year-end 2025 results. Silvercrest's discretionary assets under management, which primarily drives the firm's revenue, decreased 1.2% during the fourth quarter from $24.3 billion to $24 billion. For the year 2025, total discretionary AUM increased by 3% from $23.3 billion to $24 billion, aided by supportive markets and organic net new client accounts. Silvercrest added $124.5 million in organic new client accounts during the fourth quarter, bringing our full year 2025 organic new client account flows to $688.3 million. For the full year, organic new client acquisition registered one of the stronger levels over the past several years, underscoring receptivity to our investment capabilities and momentum across our marketing efforts. Total AUM decreased 1.6% during the fourth quarter to $37 billion. It increased 2% year-over-year from $36.5 billion with no revenue effect. As discussed in prior quarters, our nondiscretionary AUM are associated with only 4% of total revenue, mostly comprising fixed fee reporting and family office services. These assets have more than doubled over the past few years, which artificially lowers the apparent average basis points we receive for advising on AUM. As previously announced, we will adjust how the firm reports nondiscretionary AUM in a future quarter. This adjustment will substantially lower our nondiscretionary AUM on a onetime basis without revenue effect, providing investors with a clear picture of the AUM and economics that drive our business. As we emphasized throughout 2025 and conveyed in 2024, Silvercrest has embarked on significant strategic investments to promote growth opportunities across multiple fronts. As it takes time for those investments, primarily in intellectual capital and headcount to bear fruit, our earnings and adjusted EBITDA are substantially lower than the steady-state business and reflect our concerted effort to invest capital to support…

Thanks, Rick. So as disclosed in our earnings release for the fourth quarter, discretionary AUM as of the end of 2025 was $24 billion and total AUM as of the same period was $37 billion. Revenue for the quarter was $32 million, and reported consolidated net loss for the quarter was $0.1 million. Looking further at the fourth quarter, expenses for the quarter increased year-over-year by $2.8 million or 9.5%, primarily driven by increased compensation and benefits expense and general and administrative expenses. Compensation and benefits for the quarter increased year-over-year by $2.6 million or 12.1%, primarily due to increases in salaries and benefits expenses, primarily as a result of merit-based increases and new hires and an increase in the accrual for bonuses. General and administrative expenses increased by $0.2 million or approximately 2.4%, primarily due to increase in professional fees and adjustment to our bad debt reserve partially offset by decreases in depreciation and amortization and portfolio and systems expense. Reported net loss attributable to Silvercrest or to Class A shareholders for the fourth quarter was approximately $0.1 million or $0.01 per basic and diluted Class A share. Adjusted EBITDA, which we define as EBITDA without giving effect to equity-based compensation expense and noncore and nonrecurring items, was approximately $2.9 million or 8.9% of revenue for the quarter. Adjusted net income, which we define as net income without giving effect to noncore and nonrecurring items and income tax expense assuming a corporate rate of 26%, was approximately $2.3 million for the quarter or $0.19 and $0.18 per adjusted basic and diluted EPS, respectively. Adjusted EPS is equal to adjusted net income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic adjusted EPS. And to the extent dilutive,…

[Operator Instructions] And our first question today comes from Sandy Mehta from Evaluate Research.

The international -- the global international had very strong performance, as you mentioned, and you talked about a strong pipeline and meaningful growth in AUM. Can you disclose how much AUM you presently have in these strategies? And talk a little bit, give us some more color on what you see in terms of the potential going forward in AUM growth?

Yes. So currently, we have over USD 2 billion across global and international strategies. There are multiple strategies in both international, emerging markets and global. And so that's off to a good start and performance in those capabilities across the board is excellent. Furthermore, we bolstered the analyst staff and the resources in that capability over the past, call it, 2.5 years. And I think our pivot towards highlighting that capability came at just the right time, as you know, with regards to the relative performance in different markets. So that bodes well. We have built out, as I mentioned in my preliminary comments, Sandy, the business development team on an international basis. We did not have people looking abroad explicitly, and we reorganized how we do institutional relationship and business development management at the firm. And we are continually building very excellent high-level consultant contacts. That is primarily where I see the pipeline coming from. There is also going to be the ability for investors to invest directly in an Australian investment trust that we have launched there for investors and a UCITS vehicle, which can be used for any Silvercrest strategy in Europe. And we expect our licensing for being able to market proactively in Europe to come through -- within the next couple of months through the Bank of Ireland. Currently, as you well know, we have to rely on reverse solicitation. So these efforts are all coming together about now. We also just got back from a 2-week road trip with consultants and investors in Australia, where, as you know, we received a seed investment from a large superannuation fund. With regards to the pipeline, as you know from prior calls, it's become quite difficult to measure compared to the way we used to do it. It used to be, Sandy, that we would look at finals, invite-only RFPs that were actionable within the next 6 months. It was a high-level confidence in the pipeline. The business just is not working that way anymore. So we've stopped reporting over at least the past year, the pipeline in those terms, maybe it's even been 1.5 years. So what I'm giving you is color on what we're seeing. And in terms of the meetings we have, the amount of AUM that can be allocated to our different strategies, the relative performance that we have, the multiple meetings following on our initial introductions all bode very well for significant flows. These strategies are largely not capacity constrained as you would find in smaller cap strategies. And so the potential is multiple billions of dollars. Very hard to say when that can land or how. But we should start seeing flows sooner than later in 2026, which I'll be able to report as progress towards the pipeline that I've mentioned or at least fulfilling the potential of that pipeline.

Great. And compensation was up, as you mentioned, so 67% versus 62%. So when we look out to 2026 and 2027, where do you think comp should be? Is it going to be more 67% or more 62%?

Yes, it's going to depend entirely on some of those flows and there's still more hiring to do. When you think about the office, I didn't mention in my remarks, but we've officially opened a physical office, hired a new portfolio manager in Atlanta. We have officially opened our office in Singapore, important for that time zone and the flows throughout that region. There will likely be hiring there. We have space now in Dublin. We expect our office to open and have to do hiring there for portfolio management and outward-facing professionals once we have our license. There is just an enormous amount of hiring represented in that 67%. It's going to entirely depend on those flows, Sandy. What I look forward to doing is reporting progress on those flows so that people feel comfortable that we will be slowly bringing down that compensation ratio. But we still have hiring to go. So even with the growth in revenue, I expect it to be elevated for the foreseeable future, which is, I think, the way I phrased it in my introductory remarks. The firm historically has run the business in a 54% to 55%, sometimes 56% revenue model. I think it's not uncommon in our industry for people to be up at 60%. So we're clearly doing a lot more than that. 62% at the end of 2024 was a couple of percentage points higher than what you see in a lot of similar businesses, and we pushed it up even beyond that. So it's going to be for the foreseeable future and entirely dependent on those very substantial flows. But I don't expect it to come down a lot in the near term because we do still have some more hiring to do even if we get those flows. What I want to do is just report progress.

And Sandy, just a couple of things to note on the compensation. So our -- the percentages that you see in the release is total GAAP compensation expense. So our -- for 2025, our recurring cash comp ratio was about 62%. That was a few percentage points higher than 2024 to give you some perspective there. The other thing I wanted to mention with respect to our initiative in the EU, from a regulatory standpoint, we are required to have a certain number of new hires in place before we can even receive our license and earn EUR 1 of revenue. So that -- because of that, there's a lot of front-loading of expense that will be followed up by revenue at a later time. So you have that effect to keep in mind.

Yes. Thank you, Scott, for those 2 important comments with regards to the ratio and where we are as well as the hiring in advance. Of course, any growth in revenue is preceded by the hiring of professionals. I think a good example was building out one of our global -- the value global equity team, multiple, multiple hires that culminated at the end of 2024 with our seed investment. So that's kind of the phase we're in right now, Sandy.

And just one last question. So the buyback is almost completed. What are your thoughts on another buyback? You have a lot of cash on the balance sheet. The share count has come down, which has been great. But you also mentioned stock grants and awards to employees. Can we be confident that if you do further buybacks that, that will offset any shares given to employees and the share count, if there are buybacks, will continue to decline?

Well, another way to look -- yes, I appreciate that. Another way to look at it is that we did the buybacks in advance of doing [indiscernible] equity awards. So what we'll be doing is just eating into the buybacks that we did rather than do the awards and then do a buyback. Just think of it in reverse. It comes out to a similar place. We will consider buybacks and continue to -- we love returning capital to investors in that way. We think it's a very good use of capital. We, as owners of the business ourselves, working at the firm as partners like accreting ourselves and being aligned with our external shareholders. So when you look at those factors, we're very favorable about doing that. And we're also like paying a high dividend to pay investors to have a very long-term vision for this company, especially as we go through this investment phase. So we'll continue to consider it depending where the stock price is. I won't commit to it, of course. We have multiple uses for capital right now, but it's always foremost in our mind when we think about the uses of capital for the business.

Yes. It will be great if the share count continues to come down, and we look forward to that.

Okay, Sandy. Near term, it's going to -- it's not going to come down since we're going to have these equity awards, we're just going to be coming -- going back the other way a bit after the buybacks. But I appreciate the comment and question.

[Operator Instructions] And at this time, I'm showing no additional questions, I'd like to turn the floor back over to Chairman and CEO, Rick Hough, for any closing comments.

Great. Thank you again for joining us for the fourth quarter and year-end 2025 earnings call. We greatly appreciate our investors and those who are supportive of this long-term vision and our investment plans in the business. I'm quite confident they will bear fruit with patience, and I look forward to reporting on our progress in the coming quarters. Thank you so much.

And with that, everyone, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.