Press Releases

Silvercrest Asset Management Group Inc. Reports Q4 and Year-end 2013 Results

NEW YORK, March 13, 2014 /PRNewswire/ -- Silvercrest Asset Management Group Inc. (NASDAQ: SAMG) (the "Company" or "Silvercrest") today reported the results of its operations for the quarter and year ended December 31, 2013.

Business Update

Silvercrest has experienced strong growth in assets under management for the twelve months ended December 31, 2013. We also have experienced strong revenue growth in the three-month period ending December 31, 2013. As of December 31, 2013, assets under management had risen to $15.7 billion from $14.6 billion as of September 30, 2013, due to strong organic growth and investment performance. We are pleased with these results as well as with continued progress in growing our institutional business.

Fourth Quarter 2013 Highlights

  • Assets Under Management ("AUM") of $15.7 billion at December 31, 2013
  • Revenue of $17.2 million
  • U.S. Generally Accepted Accounting Principles ("GAAP") consolidated net income and net income attributable to Silvercrest of $4.0 million and $2.0 million, respectively.
  • Basic and diluted net income per share of $0.32
  • Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")1 of $4.5 million
  • Adjusted net income1 of $1.9 million
  • Adjusted basic and diluted earnings per share1 of $0.16 and $0.15, respectively.

The table below presents a comparison of certain GAAP and non-GAAP ("adjusted") financial measures and AUM.



For the Three Months

Ended December 31,

For the Year Ended

December 31,

(in thousands except as indicated)


2013

2012


2013

2012




Revenue


$    17,157

$      14,144


$      60,051

$      51,690

Income before other income (expense), net


$      1,747

$        3,985


$      16,532

$      18,902

Net income


$      3,989

$        5,654


$      17,168

$      19,720

Net income attributable to Silvercrest


$      2,026

NA


$      13,690

         NA

Adjusted EBITDA1


$      4,507

$        4,134


$      17,324

$      14,702

Adjusted EBITDA margin1


26.3%

28.9%


28.8%

28.4%

Adjusted net income1


$      1,868

$        2,085


$        7,681

$        6,725

Adjusted basic earnings per share1


$        0.16

$          0.20


$          0.64

$          0.66

Adjusted diluted earnings per share1


$        0.15

$          0.20


$          0.62

$          0.63

Assets under management at period end (billions)


$        15.7

$          11.2


$          15.7

$           11.2

Average assets under management (billions)2


$        15.2

$          11.2


$          13.5

$           10.7

AUM Increased to $15.7 billion

Silvercrest's AUM increased by $4.5 billion, or 40.2%, to $15.7 billion at December 31, 2013 from $11.2 billion at December 31, 2012.  The increase was attributable to $2.3 billion in market appreciation in addition to net client inflows of $2.2 billion, related primarily to the Ten-Sixty Asset Management, LLC ("Ten-Sixty") asset acquisition.

Silvercrest's AUM increased by $1.1 billion, or 10.9%, to $11.2 billion at December 31, 2012 from $10.1 billion at December 31, 2011. The increase was attributable to net client inflows.   

Fourth Quarter 2013 vs. Fourth Quarter 2012

Revenue increased by $3.0 million, or 21.3%, to $17.2 million for the three months ended December 31, 2013, from $14.1 million for the three months ended December 31, 2012. This increase was driven primarily by growth in the Company's management and advisory fees as a result of increased AUM.

Total expenses increased by $5.3 million, or 51.7%, to $15.4 million for the three months ended December 31, 2013 from $10.2 million for the three months ended December 31, 2012. This increase was primarily attributable to an increase in compensation and benefits expense of $6.1 million.  General and administrative expenses decreased by $0.9 million for the three months ended December 31, 2013 from the same period in the prior year.  The increase in compensation and benefits expense was primarily attributable to an increase in the accrual for bonuses of $5.1 million as a result of the recognition of partner incentive payments as compensation expense that began in the third quarter of this year subsequent to the completion of our IPO.  Prior to our IPO, partner incentive payments were treated as distributions of net income when paid.   General and administrative expenses decreased primarily as a result of incurring fees for services rendered in the prior year in connection with a planned initial public offering that was withdrawn in 2012. 

Consolidated net income was $4.0 million.  Net income attributable to Silvercrest was $2.0 million, or $0.32 per basic and diluted share for the three months ended December 31, 2013.   The Company's Adjusted Net Income1 was $1.9 million, or $0.16 and $0.15 per adjusted basic and diluted share4, respectively, for the three months ended December 31, 2013.

Adjusted EBITDA1 was $4.5 million or 26.3% of revenue for the three months ended December 31, 2013 as compared to $4.0 million or 28.9% of revenue for the same period in the prior year.

Year Ended December 31, 2013 vs. Year Ended December 31, 2012

Revenue increased by $8.4 million, or 16.2%, to $60.1 million for the year ended December 31, 2013, from $51.7 million for the year ended December 31, 2012. This increase was driven primarily by growth in the Company's management and advisory fees as a result of increased AUM.

Total expenses increased by $10.7 million, or 32.7%, to $43.5 million for the year ended December 31, 2013 from $32.8 million for the year ended December 31, 2012. This increase was primarily attributable to an increase in compensation and benefits expense of $11.2 million partially offset by a decrease in general and administrative expenses of $0.5 million.  The increase in compensation and benefits expense was primarily attributable to an increase in the accrual for bonuses of $5.1 million as a result of the recognition of partner incentive payments as compensation expense that began in the third quarter of this year subsequent to the completion of our IPO.   Prior to our IPO, partner incentive payments were treated as distributions of net income when paid.  Also, special non-principal bonuses of $0.8 million that were paid in July 2013 upon completion of Silvercrest's initial public offering, an increase in salaries and benefits expense of $0.8 million and $0.2 million, respectively, as a result of both merit increases and increased headcount, and increased equity-based compensation expense of $0.8 million, primarily due to an increase in the fair value of the Company's previously issued deferred equity units.  The decrease in general and administrative expenses was primarily due to a reduction in professional fees of $2.5 million as a result of incurring fees for services rendered in the prior year in connection with a planned initial public offering that was withdrawn in 2012.  Furthermore, our sub-advisory fees decreased by $0.3 million as a result of the Ten-Sixty Asset Management, LLC acquisition.  Partially offsetting these decreases was a $0.8 million charge for payments to be made through November 2014 to a relative of our former Chief Executive Officer, an increase in occupancy expense of $0.6 million due to the reversal of a lease abandonment liability in 2012 that was originally recorded in 2009 in connection with reoccupying space in our headquarters resulting in reduced occupancy expenses in 2012, and an increase in various expenses totaling $0.8 million.     

The portion of the results for the year ended December 31, 2013 represented by the results for the six months ended June 30, 2013 are those of the Company's accounting predecessor, Silvercrest L.P., and as a result, did not take into consideration changes related to the Company's initial public offering3.  Consolidated net income was $17.2 million.  Net income attributable to Silvercrest was $13.7 million, or $1.68 per basic and $1.63 per diluted share/unit for the year ended December 31, 2013.  Weighted average shares/units for the year ended December 31, 2013 includes weighting for our units outstanding, on a converted basis, as of the completion of our initial public offering in addition to the weighted average Class A shares outstanding for the six months ended December 31, 2013.

Silvercrest's Adjusted Net Income1 was $7.7 million, or $0.64 and $0.62 per adjusted basic and diluted share4, respectively, for the year ended December 31, 2013.

Adjusted EBITDA1 was $17.3 million or 28.8% of revenue for the year ended December 31, 2013 as compared to $14.7 million or 28.4% of revenue for the same period in the prior year.

1 Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in Exhibits 3 and 4.

2 The Company has computed average AUM by averaging AUM at the beginning of the applicable period and AUM at the end of the applicable period.

The Company became the general partner of Silvercrest L.P. on June 26, 2013, but net income of Silvercrest L.P. was allocated to the Company effective July 2013 as allocable net income prior to July 2013 was de minimis.  Accordingly, the portion of the Consolidated Statements of Operations for the year ended December 31, 2013 represented by the six months ended June 30, 2013 does not represent earnings attributable to the Class A stockholders.

4Adjusted basic and diluted earnings per share measures for the year ended December 31, 2013 are based on the number of shares of Class A common stock and Class B common stock outstanding as of December 31, 2013.

Liquidity and Capital Resources

Cash and cash equivalents were $27.1 million at December 31,2013, compared to $13.4 million at December 31, 2012. Silvercrest L.P. had notes payable of $8.3 million at December 31, 2013 and $3.3 million at December 31, 2012.    As of December 31, 2013, the principal balance on our revolving credit facility with City National Bank was $3.0 million.  In July 2013, Silvercrest completed its initial public offering of 4,790,684 of its Class A common shares at $11.00 per share (the "IPO").  Silvercrest's stock began trading on June 27, 2013 on NASDAQ under the symbol "SAMG".  The net proceeds from the IPO, which were received on July 2, 2013, were $47.8 million.  In connection with the IPO, the Company used a portion of the net proceeds to purchase 3,540,684 Class B units from partners of Silvercrest L.P. for $35.4 million.  The amounts due to Silvercrest L.P. partners were paid out on July 2, 2013.  Furthermore, on July 12, 2013, Silvercrest sold an additional 718,603 shares of its Class A common stock at $11.00 per share pursuant to the underwriters' exercise in full of the over-allotment option that Silvercrest granted to the underwriters in connection with its IPO.  The net proceeds from this exercise, which were received on July 12, 2013, were $7.4 million.

Total stockholders' equity was $41.2 million at December 31, 2013.  The Company had 7,522,974 million shares of Class A common stock outstanding and 4,464,617 million shares of Class B common stock outstanding at December 31, 2013.

Non-GAAP Financial Measures

To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the Company supplements its consolidated financial statements presented on a basis consistent with GAAP with Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share which are non-GAAP financial measures of earnings.  These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze the Company's operations between periods and over time. Investors should consider the Company's non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

Conference Call

The Company will host a conference call on March 14, 2014, at 8:30am (Eastern Time) to discuss these results. Hosting the call will be Richard R. Hough III, Chief Executive Officer and President and Scott A. Gerard, Chief Financial Officer. Listeners may access the call by dialing 1-866-394-9665 or for international listeners the call may be accessed by dialing 1-253-237-1128.  An archived replay of the call will be available after the completion of the live call on the Investor Relations page of the Silvercrest website at http://ir.silvercrestgroup.com/.  

Forward-Looking Statements And Other Disclosures

Certain statements in this release, and other written or oral statements made by or on behalf of the Company, are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and Silvercrest's future performance, as well as management's current expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. These forward-looking statements are only predictions based on current expectations and projections about future events. These forward-looking statements are subject to a number of risks and uncertainties, and there are important factors that could cause actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed in the Company's filings with the Securities and Exchange Commission, including those factors listed under the caption entitled "Risk Factors" in the Company's prospectus dated June 26, 2013, filed with the Securities and Exchange Commission in accordance with Rule 424(b) and the Securities Act of 1933, as amended. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.  Any discrepancies included in this release between totals and the sums of the amounts listed are due to rounding.

About Silvercrest

Silvercrest was founded in April 2002 as an independent, employee-owned registered investment adviser. With offices in New York, Boston, Charlottesville and Los Angeles, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families and select institutional investors.

Exhibit 1


Silvercrest Asset Management Group Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts or as noted)






For the year ended December 31,




2013


2012


2011




(Unaudited)











Revenue








Management and advisory fees

$

53,465

$

46,069

$

37,869


Performance fees and allocations


1,830


714


85


Family office services


4,756


4,907


4,833


Total revenue


60,051


51,690


42,787


Expenses








Compensation and benefits


30,322


19,108


17,492


General and administrative  


13,197


13,680


10,849


Total expenses


43,519


32,788


28,341


 

Income before other income (expense),  net


 

16,532


 

18,902


 

14,446


Other income (expense), net








Loss on forgiveness of notes receivable


-


-


(34)


Other income (expense), net


3,118


123


(210)


Interest income 


92


145


187


Interest expense


(447)


(304)


(164)


Equity income from investments


21


1,911


950


Total other income (expense), net  


2,784


1,875


729


 

Income before provision for income taxes 


 

19,316


 

20,777


 

15,175


Provision for income taxes


(2,148)


(1,057)


(566)


Net income

$

17,168

$

19,720

$

14,609


Less: net income attributable to non-controlling interests


 

(3,478)






Net income attributable to Silvercrest

$

13,690














Net income per share/unit:








Basic

$

1.68

$

1.87

$

1.46


Diluted

$

1.63

$

1.84

$

1.40










Weighted average shares/units outstanding:








Basic


8,145,476


10,544,323


10,004,227


Diluted


8,374,025


10,690,775


10,443,317











 


Exhibit 2


Silvercrest Asset Management Group Inc.
Consolidated Statements of Operations
(Unaudited and in thousands, except share and per share amounts or as noted)






For the three months ended December 31,




2013




2012





         (Unaudited)










Revenue








Management and advisory fees

$

14,220



$

12,199


Performance fees and allocations


1,813




664


Family office services


1,124




1,281


Total revenue


17,157




14,144


Expenses








Compensation and benefits


10,809




4,693


General and administrative  


4,601




5,466


Total expenses


15,410




10,159


 

Income before other income (expense),  net


 

1,747




 

3,985


Other income (expense), net








Other income (expense), net


3,032




33


Interest income 


7




25


Interest expense


(159)




(45)


Equity income from investments


21




1,911


Total other income (expense), net  


2,901




1,924


 

Income before provision for income taxes 


 

4,648




 

5,909


Provision for income taxes


(659)




(255)


Net income

$

3,989



$

5,654


Less: net income attributable to non-controlling interests


 

(1,963)






Net income attributable to Silvercrest

$

2,026














Net income per share/unit:








Basic

$

0.32



$

0.54


Diluted

$

0.32



$

0.53










Weighted average shares/units outstanding:








Basic


6,390,588




10,547,365


Diluted


6,390,588




10,693,816











 


Exhibit 3

Silvercrest Asset Management Group Inc.
Reconciliation of GAAP to non-GAAP ("Adjusted") Adjusted EBITDA Measure
(Unaudited and in thousands, except share and per share amounts or as noted)


Adjusted EBITDA


Three Months Ended

December 31,


Year Ended

December 31,



2013


2012


2013


2012

Reconciliation of non-GAAP financial measure:









Net income


$    3,989


$    5,654


$ 17,168


$19,720

Provision for income taxes


659


255


2,148


1,057

Delaware Franchise Tax


125


-


125


-

Interest expense


159


45


447


304

Interest income


(7)


(25)


(92)


(145)

Partner/member incentive allocations (A)


-


(5,157)


(6,000)


(12,129)

Depreciation and amortization


489


474


1,944


1,918

Equity-based compensation


753


165


2,222


1,416

Other adjustments (B)


(1,659)


2,723


(639)


2,561

Adjusted EBITDA


$    4,507


$    4,134


$ 17,324


$ 14,702










Adjusted EBITDA Margin


26.3%


29.2%


28.8%


28.4%










(A) Partner/member incentive allocations have historically been treated as distributions of net income and recorded when paid. Upon the completion of Silvercrest's reorganization and initial public offering, the Company accounts for partner incentive payments as an expense in its statement of operations. Accordingly, this had the effect of increasing compensation expense relative to the amounts that had been recorded historically in the Company's financial statements.


(B) Other adjustments consist of the following:


















Loss on sub-lease (a)


$       (14)


$     (22)


$    (77)


$  (85)

Lease abandonment (reversal)/charge (b)


-


-


-


(662)

Client Reimbursement


249


12


249


12

Fund redemption costs (c)


-


(13)


-


(4)

IPO professional fees (d)


60


2,526


83


2,892

IPO-related non-principal bonuses


-


-


754


-

Acquisition costs (e)


37


85


127


121

Severance


-


79


-


79

Insurance Proceeds (f)


(3,010)


-


(3,010)


-

Other (g)


1,017


56


1,235


208










Total other adjustments


$   (1,659)


$      2,723


$    (639)


$2,561


(a) Reflects the amortization recognized, on a present value basis, between the per square foot rental rate for the Company's primary lease and a sub-lease that the Company signed in 2011 with a sub-tenant for its headquarters in New York.


(b) Reflects the reversal of the remaining rent expense on a portion of the Company's unutilized space at its headquarters that the Company abandoned in 2009 and reoccupied in May 2012. A portion of this space is subleased through September 29, 2017.


(c) Includes the costs associated with the reimbursement to one of the Company's funds for the difference between the value of certain investor redemptions and the actual proceeds of the underlying securities in 2012 and 2011.


(d) Represents professional fees incurred in conjunction with the preparation and reporting related to our IPO.


(e) Reflects the legal and accounting fees associated with the closing of the Ten-Sixty asset acquisition in 2013, legal fees related to various strategic initiatives in 2013, and the MW Commodity Advisors, LLC ("Commodity Advisors") acquisition in 2012. Also reflects transition expenses related to integrating the Ten-Sixty acquisition in 2013, and expenses related to relocating Milbank Winthrop & Co. personnel and operations to the Company's headquarters that were incurred during the year ended December 31, 2012.


(f) Represents proceeds to the Company which was the beneficiary on a key-man policy in the name of our former Chief Executive Officer


(g) In 2013, represents the accrual of Quarterly Income Payments, as defined in the MW Commodity Advisors, LLC purchase agreement, a fair value adjustment to the Milbank contingent consideration of $148, and a $781 charge related to payments to be made through November 2014 to a relative of our former Chief Executive Officer and $30 in related legal fees. Also, $37 of legal fees related to the simultaneous redemption and contribution of investors of one of the Silvercrest funds into one of the Milbank funds. In 2012, represents a fair value adjustment to the Milbank contingent consideration of ($42), a non-recurring catch-up operating escalation from our landlord of $97, and $153 of expenses incurred related to our 10th anniversary client event. Represents the accrual of Quarterly Income Payments, as defined in the Commodity Advisors purchase agreement, related to the Commodity Advisors acquisition and other one-time costs related to client promotion and the relocation of a partner of Silvercrest L.P.

 


Exhibit 4

Silvercrest Asset Management Group Inc.

Reconciliation of GAAP to non-GAAP ("Adjusted")

Adjusted Net Income and Adjusted Earnings Per Share Measures

(Unaudited and in thousands, except per share amounts or as noted)


Adjusted Net Income and Adjusted Earnings Per Share


Three Months Ended

December 31,


Year Ended

December 31,



2013


2012


2013


2012

Reconciliation of non-GAAP financial measure:









Consolidated net income


$ 3,989


$ 5,654


$17,168


$19,720

Consolidated GAAP provision for income taxes


659


255


2,148


1,057

Delaware Franchise Tax


125


-


125


-

Partner/member incentive allocations (See A in Exhibit 3)


-


(5,157)


(6,000)


(12,129)

Other adjustments (See B in Exhibit 3)


(1,659)


2,723


(639)


2,561

Adjusted income before provision for income taxes


$ 3,114


$ 3,475


$ 12,802


$11,209










Adjusted provision for income taxes:









Adjusted provision for income taxes (40% assumed tax rate)


(1,246)


(1,390)


(5,121)


(4,484)










Adjusted net income


$ 1,868


$ 2,085


$ 7,681


$ 6,725

Adjusted earnings per share/unit:









Basic


$ 0.16


$ 0.20


$ 0.64


$ 0.66

Diluted


$ 0.15


$ 0.20


$ 0.62


$ 0.63










Shares/units outstanding:


















Basic Class A shares outstanding


7,523


-


7,523


-

Basic Class B shares/units outstanding


4,465


10,213


4,465


10,213










Total basic shares/units outstanding


11,988


10,213


11,988


10,213



















Diluted Class A shares outstanding


7,523


-


7,523


-

Diluted Class B shares/units outstanding (C)


4,869


10,689


4,869


10,689










Total diluted shares/units outstanding


12,392


10,689


12,392


10,689










(C) Includes 175,298 unvested deferred equity units as of December 31, 2013. Also, 228,549
and 146,452 performance units which are conditionally issuable units that would be issuable if
December 31, 2013 and 2012, respectively, was the end of the contingency period are included.

 

Exhibit 5

Silvercrest Asset Management Group Inc.
Condensed Consolidated Statements of Financial Condition
(in thousands)




December 31,



December 31,



2013



2012

Assets


(Unaudited)




Cash and cash equivalents

$

27,122


$

13,443

Restricted certificates of deposit and escrow 


1,021



1,020

Investments 


103



1,980

Receivables, net 


5,405



3,675

Due from Silvercrest Funds 


2,653



1,622

Furniture, equipment and leasehold improvements, net


1,913



2,061

Goodwill 


20,031



15,891

Intangible assets, net


12,589



12,363

Deferred tax asset – tax receivable agreement


25,022



-

Prepaid expenses and other assets


4,868



399

Total assets

$

100,727


$

52,454

Liabilities, Redeemable Partners' Capital and Stockholders' Equity/Partners' Deficit






Accounts payable and accrued expenses

$

6,587


$

4,513

Accrued compensation


17,424



3,656

Notes payable


8,303



3,315

Borrowings under revolving credit facility


3,000



-

Deferred rent 


1,742



2,268

Deferred tax and other liabilities


15,506



565

Total liabilities


52,562



14,317

Redeemable partners' capital


-



102,017

Notes receivable from partners


-



(3,410)

Total redeemable partners' capital  


-



98,607

Commitments and Contingencies






Stockholders' Equity/Partners' Capital






Preferred Stock, par value $0.01,






10,000,000 shares authorized; none issued and outstanding


-



-

Class A Common Stock, par value $0.01,






50,000,000 shares authorized; 7,522,974 issued and outstanding


75



-

Class B Common Stock, par value $0.01,






25,000,000 shares authorized; 4,464,617 issued and outstanding


45



-

Additional Paid-In Capital


39,003



-

Retained earnings


2,099



-

Partners' capital 


-



47,904

Excess of liabilities, redeemable partners' capital and partners' capital over assets


-



(108,374)

Total stockholders' equity/partners' deficit


41,222



(60,470)

Non-controlling interests


6,943



-

Total stockholders' equity/partners' deficit


48,165



(60,470)

Total liabilities, redeemable partners' capital and stockholders' equity/partners' deficit

$

100,727


$

52,454

 

Exhibit 6

Silvercrest Asset Management Group Inc.
Total Assets Under Management
(Unaudited and
in billions)








Total Assets Under Management:









Three Months Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$        14.6


$        11.2


30.4%

Gross client inflows


1.0


2.4


-58.3%

Gross client outflows


(0.7)


(2.6)


-73.1%

Market appreciation


0.8


0.1


700.0%








Ending assets under management


$        15.7


$        11.2


40.8%

















Year Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$        11.2


$        10.1


10.9%

Gross client inflows


6.0


7.3


-17.8%

Gross client outflows


(3.8)


(6.9)


-44.9%

Market appreciation


2.3


0.6


283.3%








Ending assets under management


$        15.7


$        11.2


40.8%

 

Exhibit 7

Silvercrest Asset Management Group Inc.
Discretionary Assets Under Management
(Unaudited and
in billions)


Discretionary Assets Under Management:








Three Months Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$          9.2


$          8.1


13.6%

Gross client inflows


0.7


2.2


-68.2%

Gross client outflows


(0.4)


(2.4)


-83.3%

Market appreciation


0.6


-










Ending assets under management


$        10.1


$          8.0


27.0%

















Year Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$          8.0


$          7.0


14.3%

Gross client inflows


3.5


6.7


-47.8%

Gross client outflows


(3.0)


(6.3)


-52.4%

Market appreciation


1.6


0.5


220.0%








Ending assets under management


$        10.1


$          8.0


27.0%

 

Exhibit 8

Silvercrest Asset Management Group Inc.
Non-Discretionary Assets Under Management
(Unaudited and
in billions)


Non-Discretionary Assets Under Management:








Three Months Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$          5.4


$          3.1


74.2%

Gross client inflows


0.3


0.2


50.0%

Gross client outflows


(0.3)


(0.2)


50.0%

Market appreciation


0.2


0.1


100.0%








Ending assets under management


$          5.6


$          3.1


78.3%

















Year Ended


% Change From



December 31,


December 31,



2013


2012


2012








Beginning assets under management


$          3.1


$          3.1


0.0%

Gross client inflows


2.5


0.6


316.7%

Gross client outflows


(0.7)


(0.6)


16.7%

Market appreciation


0.7


0.1


600.0%








Ending assets under management


$          5.6


$          3.1


78.3%

Exhibit 9

Silvercrest Asset Management Group Inc.
Equity Investment Strategy Composite Performance1, 2
As of December 31, 2013
(Unaudited)


PROPRIETARY EQUITY PERFORMANCE


ANNUALIZED PERFORMANCE

AS OF 12/31/13


INCEPTION


1-YEAR


3-YEAR


5-YEAR


7-YEAR


INCEPTION














Large Cap Value Composite


4/1/02


34.2


15.0


17.9


7.0


8.2

Russell 1000 Value Index




32.5


16.1


16.7


4.5


6.9














Small Cap Value Composite


4/1/02


38.7


17.8


20.7


12.6


12.0

Russell 2000 Value Index




34.5


14.5


17.6


5.4


8.8














Smid Cap Value Composite


10/1/05


33.5


16.4


20.0


9.4


10.2

Russell 2500 Value Index




33.3


15.4


19.6


6.4


7.9














Multi Cap Value Composite


7/1/02


34.3


16.2


19.6


9.0


9.5

Russell 3000 Value Index




32.7


15.9


16.8


4.6


8.0














Equity Income Composite


12/1/03


34.2


17.2


18.0


9.6


12.2

Russell 3000 Value Index




32.7


15.9


16.8


4.6


8.2














Focused Value Composite


9/1/04


37.1


14.6


20.8


8.1


11.1

Russell 3000 Value Index




32.7


15.9


16.8


4.6


7.8

1 Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by SAMG LLC. Performance results are gross of fees and net of commission charges. An investor's actual return will be reduced by the advisory fees and any other expenses it may incur in the management of the investment advisory account.   SAMG LLC's standard advisory fees are described in Part 2 of its Form ADV. Actual fees and expenses will vary depending on a variety of factors, including the size of a particular account. An investor's actual return will be reduced by the advisory fees and any other expenses it may incur in the management of the investment advisory account.  Investment management fees have a compounding effect on cumulative results.  For example, assume SAMG LLC achieves a 10% annual return prior to the deduction of fees each year for a period of 10 years.  If an annual investment management fee of 1% of assets under management for the 10 year period were charged, the resulting annual average return after fees would be reduced to 8.9%.  Returns greater than one year are shown as annualized compounded returns and include gains and accrued income and reinvestment of distributions. Past performance is no guarantee of future results. This piece contains no recommendations to buy or sell securities or a solicitation of an offer to buy or sell securities or investment services or adopt any investment position. This piece is not intended to constitute investment advice and is based upon conditions in place during the period noted. Market and economic views are subject to change without notice and may be untimely when presented here. Readers are advised not to infer or assume that any securities, sectors or markets described were or will be profitable.  SAMG LLC is an independent investment advisory and financial services firm created to meet the investment and administrative needs of individuals with substantial assets and select institutional investors. SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS®).

2 The market indices used to compare to the performance of Silvercrest's strategies are as follows: 

The Russell 1000 Index is a capitalization-weighted, unmanaged index that measures the 1000 smallest companies in the Russell 3000. The Russell 1000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.

The Russell 2000 Index is a capitalization-weighted, unmanaged index that measures the 2000 smallest companies in the Russell 3000. The Russell 2000 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values.

The Russell 2500 Index is a capitalization-weighted, unmanaged index that measures the 2500 smallest companies in the Russell 3000. The Russell 2500 Value Index is a capitalization-weighted, unmanaged index that includes those Russell 2000 Index companies with lower price-to-book ratios and lower expected growth values.

The Russell 3000 Value Index is a capitalization-weighted, unmanaged index that measures those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth.

Exhibit 10

Silvercrest Asset Management Group Inc.
Model Portfolio Performance
As of December 31, 2013
(Unaudited)


MODEL PORTFOLIO PERFORMANCE


ANNUALIZED PERFORMANCE

AS OF 12/31/13


INCEPTION


1-YEAR


3-YEAR


5-YEAR


7-YEAR


INCEPTION














Income Portfolio


5/1/03


13.4


7.7


9.9


6.1


7.0

25/45/30% S&P 500, Barclays Aggregate, HFRI FOF Comp




9.6


6.4


8.5


4.8


6.0














Balanced Portfolio


5/1/03


18.4


8.8


12.6


6.6


8.2

50/30/20% S&P 500, Barclays Aggregate, HFRI FOF Comp




17.0


9.7


12.0


5.7


7.3














Growth Portfolio


5/1/03


27.6


11.7


17.9


7.3


9.7

80/10/10% S&P 500, Barclays Aggregate, HFRI FOF Comp




26.4


13.6


15.8


6.1


8.4

These model portfolios are not actual strategies in which clients can invest or allocate assets.  They are hypothetical combinations of: (i) internally-managed strategies in which clients are invested and (ii) externally-managed funds or products in which clients are invested.  We track three such portfolios depending on the overall strategy by which the securities purchased may be characterized.  They are Income, Growth, and Balanced (Income and Growth).  The returns shown assume annual rebalancing and reinvestment of dividends over the entirety of each of the periods shown.   Some of the underlying returns used to calculate each portfolio's returns were net of fees and some were gross of fees. The rates of return for each of the three portfolios are presented gross of investment management fees and custody fees, but include the deduction of estimated brokerage commissions and transaction costs. An investor's actual return on a portfolio of the type shown would be reduced by the advisory fees and any other expenses it may incur in the management of the investment advisory account. For example, assume the Firm achieves a 10% annual return prior to the deduction of fees each year for a period of 10 years. If an annual investment management fee of 1% of assets under management for the 10 year period were charged, the resulting annual average return after fees would be reduced to 8.9%. Silvercrest's standard annual asset-based fee schedule is described in Part 2 of its Form ADV, and outsourced Manager's standard annual asset-based fee schedules are described in Part 2 of each of their Form ADVs. Actual fees and expenses will vary depending on a variety of factors, including the size of a particular account. Generally, investment management fees are charged based upon the size of the portfolio, computed quarterly. An investor's actual result would be different from those portrayed in the models. A reader should not infer or assume that any portfolio is appropriate to meet the objectives, situation or needs of a particular investor, as the implementation of any financial strategy, and the purchase or sale of any security, should only be made after consultation with an attorney, tax advisor and investment advisor.  Past performance is no indication of future results.

The benchmark is a composite of the S&P 500 Index, the Barclays Capital Aggregate Index, and the HFRI Fund of Funds Composite Index.  Each index's blend is rebalanced annually.  Index returns do not reflect a deduction for fees or expenses.  Investors cannot invest directly in any of these indices.  

The market indices used to compare to the performance of Silvercrest's strategies are as follows: 

The Barclays Capital Aggregate Index is an index of investment grade government and corporate bonds with a maturity of more than one year.

The S&P 500 Index is a capitalization-weighted, unmanaged index that measures 500 widely held US common stocks of leading companies in leading industries, representative of the broad US equity market.

The HFRI Fund of Funds Composite Index is an index that is equal weighted, net of fees, and comprised of over 1,500 funds which report to Hedge Fund Research.

SOURCE Silvercrest Asset Management Group Inc.