Silvercrest Asset Management Group Inc. Reports Q2 2014 Results

New York, NY – August 12, 2014 – Silvercrest Asset Management Group Inc. (NASDAQ: SAMG) (the “Company” or “Silvercrest”) today reported the results of Silvercrest L.P., of which the Company is general partner, for the quarter ended June 30, 2014.

Business Update

Silvercrest continued good growth in its assets under management and revenue for the second quarter ended June 30, 2014. As of June 30, 2014, assets under management rose to $16.7 billion from $16.2 billion as of March 31, 2014, and from $13.9 billion as of June 30, 2013. The firm’s asset growth was due to organic growth and new relationships in our family wealth business as well as market appreciation. Revenue grew to $17.2 million for the quarter ended June 30, 2014, from $16.7 million for the quarter ended March 31, 2014, and from $14.5 million for the quarter ended June 30, 2013.

Our next dividend will be $0.12 cents per Class A share payable on September 19, 2014 to Class A shareholders of record on September 12, 2014.

Second Quarter 2014 Highlights

AUM of $16.7 billion at June 30, 2014

Revenue of $17.2 million

U.S. Generally Accepted Accounting Principles (“GAAP”) net income of $2.8 million

Basic and diluted net income per share of $0.18

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)1 of $5.1 million

Adjusted net income1 of $2.5 million

Adjusted basic and diluted earnings per share1 of $0.21

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

 

 

  

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

(in thousands except per share amounts and as indicated)

  

2014

 

 

2013

 

 

2014

 

 

2013

 

Revenue

  

$

17,226

  

 

$

14,472

  

 

$

33,946

  

 

$

28,157

  

Income before other income (expense), net

  

$

4,243

  

 

$

5,825

  

 

$

8,038

  

 

$

11,598

  

Net income

  

$

2,798

  

 

$

5,467

  

 

$

5,039

  

 

$

10,929

  

Net income attributable to Silvercrest

  

$

1,351

  

 

 

N/A

  

 

$

2,295

  

 

 

N/A

  

Adjusted EBITDA1

  

$

5,108

  

 

$

4,393

  

 

$

10,089

  

 

$

8,530

  

Adjusted EBITDA margin1

  

 

29.7

 

 

30.4

 

 

29.7

 

 

30.3

Adjusted net income1

  

$

2,541

  

 

$

2,060

  

 

$

4,861

  

 

$

3,889

  

Adjusted basic earnings per share1

  

$

0.21

  

 

$

0.18

  

 

$

0.40

  

 

$

0.35

  

Adjusted diluted earnings per share1

  

$

0.21

  

 

$

0.18

  

 

$

0.39

  

 

$

0.33

  

Assets under management at period end (billions)

  

$

16.7

  

 

$

13.9

  

 

$

16.7

  

 

$

13.9

  

Average assets under management (billions)2

  

$

16.5

  

 

$

13.8

  

 

$

16.2

  

 

$

12.6

  

AUM Increased to $16.7 billion

Silvercrest’s AUM increased by $0.5 billion, or 3.1%, to $16.7 billion at June 30, 2014 from $16.2 billion at March 31, 2014. The increase in AUM was attributable to $0.5 billion in market appreciation. Also, AUM increased as a result of new discretionary AUM of $0.1 million during the quarter ended June 30, 2014.

Silvercrest’s AUM increased by $2.8 billion, or 20.1%, to $16.7 billion at June 30, 2014 from $13.9 billion at June 30, 2013. The increase was attributable to $1.1 billion of net client inflows and $1.7 billion of market appreciation.

1


Second Quarter 2014 vs. Second Quarter 2013

Revenue increased by $2.7 million, or 19.0%, to $17.2 million for the three months ended June 30, 2014, from $14.5 million for the three months ended June 30, 2013. 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 $4.3 million, or 50.1%, to $13.0 million for the three months ended June 30, 2014 from $8.7 million for the three months ended June 30, 2013. This increase was primarily attributable to increases in compensation and benefits expense and general and administrative expenses of $3.8 million and $0.5 million, respectively. The increase in compensation and benefits expense was primarily attributable to an increase in the partner incentive bonuses of $4.3 million as a result of the recognition of partner incentive payments as compensation expense and an increase in salaries expense of $0.1 million, as a result of both merit increases and increased headcount. This was partially offset by a decrease in accrued employee incentive bonuses of $0.5 million and a decrease in equity-based compensation expense of $0.1 million primarily as a result of lower levels of deferred equity units due to vesting in prior periods. General and administrative expenses increased by $0.5 million for the three months ended June 30, 2014 from the same period in the prior year. This increase was primarily due to an increase in occupancy and related expenses of $0.2 million as a result of a reduction in subtenant rental income earned for the three months ended June 30, 2014 as compared to the same period in the prior year, an increase in sub-advisory fees of $0.1 million in conjunction with increased revenue levels, an increase in investor relations costs of $0.1 million and an increase in insurance costs of $0.1 million.

Consolidated net income was $2.8 million. Net income attributable to Silvercrest was $1.4 million, or $0.18 per basic and diluted share for the three months ended June 30, 2014. The Company’s Adjusted Net Income1 was $2.5 million, or $0.21 per adjusted basic and diluted share4 for the three months ended June 30, 2014.

Adjusted EBITDA1 was $5.1 million or 29.7% of revenue for the three months ended June 30, 2014 as compared to $4.4 million or 30.4% of revenue for the same period in the prior year.

Six Months Ended June 30, 2014 vs. Six Months Ended June 30, 2013

Revenue increased by $5.7 million, or 20.6%, to $33.9 million for the six months ended June 30, 2014, from $28.2 million for the six months ended June 30, 2013. 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 $9.3 million, or 56.5%, to $25.9 million for the six months ended June 30, 2014 from $16.6 million for the six months ended June 30, 2013. This increase was primarily attributable to increases in compensation and benefits expense and general and administrative expenses of $8.3 million and $1.0 million, respectively. The increase in compensation and benefits expense was primarily attributable to an increase in the accrual for partner incentive bonuses of $8.4 million as a result of the recognition of partner incentive payments as compensation expense and an increase in salaries and benefits expense of $0.4 million and $0.1 million, respectively, as a result of both merit increases and increased headcount. This was partially offset by a decreased equity-based compensation expense of $0.3 million primarily due to lower levels of deferred equity units due to vesting in prior periods, and a decrease in accrued employee incentive bonuses of $0.3 million. General and administrative expenses increased by $1.0 million for the six months ended June 30, 2014 from the same period in the prior year. This increase was primarily due to an increase in occupancy expense of $0.4 million as a result of a reduction of subtenant rental income earned for the six months ended June 30, 2014 as compared to the same period in the prior year, an increase in the provision for doubtful accounts of $0.2 million in conjunction with increased revenue levels, an increase in client reimbursement costs of $0.1 million, an increase in investor relations costs of $0.1 million, an increase in business taxes of $0.1 million and an increase in insurance costs of $0.1 million.

Consolidated net income was $5.0 million. Net income attributable to Silvercrest was $2.3 million, or $0.31 per basic and diluted share for the six months ended June 30, 2014. The Company’s Adjusted Net Income1 was $4.9 million, or $0.40 and $0.39 per adjusted basic and diluted share4, respectively, for the six months ended June 30, 2014.

2


Adjusted EBITDA1 was $10.1 million or 29.7% of revenue for the six months ended June 30, 2014 as compared to $8.5 million or 30.3% 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 2 and 3.

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.

3

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 minimus. Accordingly, the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013 do not present separate earnings attributable to the Class A stockholders.

4 

Adjusted basic and diluted earnings per share measures for the three and six months ended June 30, 2013 are based on the number of weighted average shares of Class A common stock and Class B common stock outstanding as of June 30, 2013. Adjusted basic and diluted earnings per share measures for the three and six months ended June 30, 2014 are based on the number of weighted average shares of Class A common stock outstanding as of June 30, 2014.

Liquidity and Capital Resources

Cash and cash equivalents were $21.4 million at June 30, 2014, compared to $27.1 million at December 31, 2013. Silvercrest L.P. had notes payable of $8.2 million at June 30, 2014 and $8.3 million at December 31, 2013. As of June 30, 2014 and 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 $47.9 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 $41.7 million at June 30, 2014. The Company had 7,524,271 shares of Class A common stock outstanding and 4,704,152 shares of Class B common stock outstanding at June 30, 2014.

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 August 13, 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/.

3


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 annual report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission. 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, Los Angeles and Virginia, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families and select institutional investors.

Silvercrest Asset Management Group Inc.

Contact: Richard Hough

212-649-0601

rhough@silvercrestgroup.com

 

 

 

4


Exhibit 1

Silvercrest Asset Management Group Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

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

 

 

  

Three months ended June 30,

 

 

Six months ended June 30,

 

 

  

2014

 

 

2013

 

 

2014

 

 

2013

 

Revenue

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management and advisory fees

  

$

16,088

  

 

$

13,272

  

 

$

31,671

  

 

$

25,729

  

Performance fees and allocations

  

 

  

 

 

  

 

 

  

 

 

3

  

Family office services

  

 

1,138

  

 

 

1,200

  

 

 

2,275

  

 

 

2,425

  

Total revenue

  

 

17,226

  

 

 

14,472

  

 

 

33,946

  

 

 

28,157

  

Expenses

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

  

 

9,761

  

 

 

5,925

  

 

 

19,472

  

 

 

11,125

  

General and administrative

  

 

3,222

  

 

 

2,722

  

 

 

6,436

  

 

 

5,434

  

Total expenses

  

 

12,983

  

 

 

8,647

  

 

 

25,908

  

 

 

16,559

  

Income before other (expense) income, net

  

 

4,243

  

 

 

5,825

  

 

 

8,038

  

 

 

11,598

  

Other (expense) income, net

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

  

 

  

 

 

29

  

 

 

8

  

 

 

57

  

Interest income

  

 

16

  

 

 

22

  

 

 

36

  

 

 

49

  

Interest expense

  

 

(128

 

 

(71

 

 

(255

 

 

(108

Total other (expense) income, net

  

 

(112

 

 

(20

 

 

(211

 

 

(2

Income before provision for income taxes

  

 

4,131

  

 

 

5,805

  

 

 

7,827

  

 

 

11,596

  

Provision for income taxes

  

 

(1,333

 

 

(338

 

 

(2,788

 

 

(667

Net income

  

$

2,798

  

 

$

5,467

  

 

$

5,039

  

 

$

10,929

  

Less: net income attributable to non-controlling interests

  

 

(1,447

 

 

  

 

 

 

(2,744

 

 

  

 

Net income attributable to Silvercrest

  

$

1,351

  

 

 

 

 

 

$

2,295

  

 

 

 

 

Net income per share/unit:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

  

$

0.18

 

 

$

0.50

 

 

$

0.31

 

 

$

1.02

  

Diluted

  

$

0.18

 

 

$

0.49

 

 

$

0.31

 

 

$

0.99

  

Weighted average shares/units outstanding:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

  

 

7,523,464

 

 

 

10,909,091

 

 

 

7,523,219

 

 

 

10,697,653

 

Diluted

  

 

7,523,464

 

 

 

11,146,180

 

 

 

7,523,219

 

 

 

10,934,742

 

 

 

 

5


Exhibit 2

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

June 30,

 

 

Six Months Ended

June 30,

 

 

  

2014

 

 

2013

 

 

2014

 

 

2013

 

Reconciliation of non-GAAP financial measure:

  

 

 

 

 

 

 

 

Net income

  

$

2,798

  

 

$

5,467

  

 

$

5,039

  

 

$

10,929

  

Provision for income taxes

  

 

1,333

  

 

 

338

  

 

 

2,788

  

 

 

667

  

Delaware Franchise Tax

  

 

45

  

 

 

  

 

 

90

  

 

 

  

Interest expense

  

 

128

  

 

 

71

  

 

 

255

  

 

 

108

  

Interest income

  

 

(16

 

 

(22

 

 

(24

 

 

(49

Partner incentive allocations (A)

  

 

  

 

 

(3,120

 

 

  

 

 

(6,000

Depreciation and amortization

  

 

501

  

 

 

503

  

 

 

982

  

 

 

954

  

Equity-based compensation

  

 

260

  

 

 

408

  

 

 

775

  

 

 

1,036

  

Other adjustments (B)

  

 

59

  

 

 

748

  

 

 

184

  

 

 

885

  

Adjusted EBITDA

  

$

5,108

  

 

$

4,393

  

 

$

10,089

  

 

$

8,530

  

 

Adjusted EBITDA Margin

  

 

29.7

 

 

30.4

 

 

29.7

 

 

30.3

(A)

Partner incentive allocations, prior to our initial public offering, were treated as distributions of net income and recorded when paid. Upon the completion of our reorganization and initial public offering, we account for partner incentive payments as an expense in our Statement of Operations and have reflected the related adjustments in our historical financial information. Accordingly, this has the effect of increasing compensation expense relative to the amounts that have been recorded historically in our financial statements.

(B)

Other adjustments consist of the following:

 

Loss on sub-lease (a)

  

$

  

  

$

(21

 

$

  

  

$

(42

Client reimbursement

  

 

  

  

 

  

 

 

125

  

  

 

  

IPO professional fees

  

 

  

  

 

(28

 

 

  

  

 

(20

IPO-related non-principal bonuses

  

 

  

  

 

754

  

 

 

  

  

 

754

  

Acquisition costs (b)

  

 

  

  

 

23

  

 

 

  

  

 

74

  

Other (c)

  

 

59

  

  

 

20

  

 

 

59

  

  

 

119

  

Total other adjustments

  

$

59

  

  

$

748

  

 

$

184

  

  

$

885

  

(a)

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

(b)

Reflects the legal and accounting fees associated with the closing of the Ten-Sixty acquisition in 2013. Also reflects transition expenses related to integrating the Ten-Sixty acquisition in 2013.

(c)

In 2013, represents the accrual of Quarterly Income Payments, as defined in the MW Commodity Advisors, LLC purchase agreement. In 2014, represents the accrued $18 earnout related to our Richmond expansion and $41 of professional fees related to our shelf registration filing.

 

 

 

6


Exhibit 3

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)

 

 

  

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 Adjusted Net Income and Adjusted Earnings Per Share

  

2014

 

 

2013

 

 

2014

 

 

2013

 

Reconciliation of non-GAAP financial measure:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

  

$

2,798

  

 

$

5,467

  

 

$

5,039

  

 

$

10,929

  

GAAP Provision for income taxes

  

 

1,333

  

 

 

338

  

 

 

2,788

  

 

 

667

  

Delaware Franchise Tax

  

 

45

  

 

 

  

 

 

90

  

 

 

  

Partner incentive allocations (See A in Exhibit 2 )

  

 

  

 

 

(3,120

 

 

  

 

 

(6,000

Other adjustments (See B in Exhibit 2)

  

 

59

  

 

 

748

  

 

 

184

  

 

 

885

  

Adjusted earnings before provision for income taxes

  

$

4,235

  

 

$

3,433

  

 

$

8,101

  

 

$

6,481

  

Adjusted provision for income taxes:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

  

 

(1,694

 

 

(1,373

 

 

(3,240

 

 

(2,592

Adjusted net income

  

$

2,541

  

 

$

2,060

  

 

$

4,861

  

 

$

3,889

  

Adjusted earnings per share/unit:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

  

$

0.21

  

 

$

0.18

  

 

$

0.40

  

 

$

0.35

  

Diluted

  

$

0.21

  

 

$

0.18

  

 

$

0.39

  

 

$

0.33

  

Shares/units outstanding:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Class A shares outstanding

  

 

7,524

  

 

 

4,791

  

 

 

7,524

  

 

 

4,791

  

Basic Class B shares/units outstanding

  

 

4,704

  

 

 

6,459

  

 

 

4,704

  

 

 

6,459

  

Total basic shares/units outstanding

  

 

12,228

  

 

 

11,250

  

 

 

12,228

  

 

 

11,250

  

Diluted Class A shares outstanding

  

 

7,524

  

 

 

4,791

  

 

 

7,524

  

 

 

4,791

  

Diluted Class B shares/units outstanding (C)

  

 

4,847

  

 

 

6,888

  

 

 

4,847

  

 

 

6,888

  

Total diluted shares/units outstanding

  

 

12,371

  

 

 

11,679

  

 

 

12,371

  

 

 

11,679

  

(C)

Includes 52,188 and 191,828 unvested deferred equity units as of June 30, 2014 and 2013, respectively. Also, 90,959 and 237,089 performance units, which are conditionally issuable units that would be issuable if June 30, 2014 and 2013, respectively, was the end of the contingency period, are included.

 

 

 

7


Exhibit 4

Silvercrest Asset Management Group Inc.

Condensed Consolidated Statements of Financial Condition

(in thousands, except par value data)

 

 

  

June 30,

 

  

 

 

 

  

2014

 

  

December 31,

 

 

  

(Unaudited)

 

  

2013

 

Assets

  

 

 

 

  

 

 

 

Cash and cash equivalents

  

$

21,438

  

  

$

27,122

  

Restricted certificates of deposit and escrow

  

 

1,022

  

  

 

1,021

  

Investments

  

 

100

  

  

 

103

  

Receivables, net

  

 

4,098

  

  

 

5,405

  

Due from Silvercrest Funds

  

 

3,599

  

  

 

2,653

  

Furniture, equipment and leasehold improvements, net

  

 

2,175

  

  

 

1,913

  

Goodwill

  

 

20,008

  

  

 

20,031

  

Intangible assets, net

  

 

11,870

  

  

 

12,589

  

Deferred tax asset – tax receivable agreement

  

 

23,841

  

  

 

25,022

  

Prepaid expenses and other assets

  

 

2,123

  

  

 

4,868

  

Total assets

  

$

90,274

  

  

$

100,727

  

Liabilities and Stockholders’ Equity

  

 

 

 

  

 

 

 

Accounts payable and accrued expenses

  

$

2,294

  

  

$

6,587

  

Accrued compensation

  

 

10,282

  

  

 

17,424

  

Notes payable

  

 

8,164

  

  

 

8,303

  

Borrowings under revolving credit facility

  

 

3,000

  

  

 

3,000

  

Deferred rent

  

 

1,523

  

  

 

1,742

  

Deferred tax and other liabilities

  

 

15,737

  

  

 

15,506

  

Total liabilities

  

 

41,000

  

  

 

52,562

  

Commitments and Contingencies

  

 

 

 

  

 

 

 

Stockholders’ Equity

  

 

 

 

  

 

 

 

Preferred Stock, par value $0.01, 10,000,000 shares authorized; none issued and outstanding as of June 30, 2014 and December 31, 2013

  

 

—  

  

  

 

—  

  

Class A Common Stock, par value $0.01, 50,000,000 shares authorized; 7,524,271 and 7,522,974 issued and outstanding, as of June 30, 2014 and December 31, 2013, respectively

  

 

75

  

  

 

75

  

Class B Common Stock, par value $0.01, 25,000,000 shares authorized; 4,704,152 and 4,464,617 issued and outstanding, as of June 30, 2014 and December 31, 2013, respectively

  

 

47

  

  

 

45

  

Additional Paid-In Capital

  

 

39,026

  

  

 

39,003

  

Retained earnings

  

 

2,588

  

  

 

2,099

  

Total stockholders’ equity

  

 

41,736

  

  

 

41,222

  

Non-controlling interests

  

 

7,538

  

  

 

6,943

  

Total equity

  

 

49,274

  

  

 

48,165

  

Total liabilities and stockholders’ equity

  

$

90,274

  

  

$

100,727

  

 

 

 

8


Exhibit 5

Silvercrest Asset Management Group Inc.

Total Assets Under Management

(Unaudited and in billions)

Total Assets Under Management:

 

 

  

Three Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

16.2

  

 

$

13.6

  

 

 

19.1

Gross client inflows

  

 

0.9

  

 

 

0.5

  

 

 

80.0

Gross client outflows

  

 

(0.9

 

 

(0.6

 

 

50.0

Market appreciation

  

 

0.5

  

 

 

0.4

  

 

 

25.0

Ending assets under management

  

$

16.7

  

 

$

13.9

  

 

 

20.1

 

 

  

Six Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

15.7

  

 

$

11.2

  

 

 

40.2

Gross client inflows

  

 

2.0

  

 

 

4.2

  

 

 

-52.4

Gross client outflows

  

 

(1.4

 

 

(2.5

 

 

-44.0

Market appreciation

  

 

0.4

  

 

 

1.0

  

 

 

-60.0

Ending assets under management

  

$

16.7

  

 

$

13.9

  

 

 

20.1

 

 

 

9


Exhibit 6

Silvercrest Asset Management Group Inc.

Discretionary Assets Under Management

(Unaudited and in billions)

Discretionary Assets Under Management

 

 

  

Three Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

10.6

  

 

$

8.6

  

 

 

23.3

Gross client inflows

  

 

0.8

  

 

 

0.4

  

 

 

100.0

Gross client outflows

  

 

(0.7

 

 

(0.5

 

 

40.0

Market appreciation

  

 

0.4

  

 

 

0.1

  

 

 

300.0

Ending assets under management

  

$

11.1

  

 

$

8.6

  

 

 

29.1

 

 

  

Six Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

10.1

  

 

$

8.0

  

 

 

26.3

Gross client inflows

  

 

1.7

  

 

 

2.1

  

 

 

-19.0

Gross client outflows

  

 

(1.1

 

 

(2.1

 

 

-47.6

Market appreciation

  

 

0.4

  

 

 

0.6

  

 

 

-33.3

Ending assets under management

  

$

11.1

  

 

$

8.6

  

 

 

29.1

 

 

 

10


Exhibit 7

Silvercrest Asset Management Group Inc.

Non-Discretionary Assets Under Management

(Unaudited and in billions)

Non-Discretionary Assets Under Management

 

 

  

Three Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

5.6

  

 

$

5.0

  

 

 

12.0

Gross client inflows

  

 

0.1

  

 

 

0.1

  

 

 

0.0

Gross client outflows

  

 

(0.2

 

 

(0.1

 

 

100.0

Market appreciation

  

 

0.1

  

 

 

0.3

  

 

 

-66.7

Ending assets under management

  

$

5.6

  

 

$

5.3

  

 

 

5.7

 

 

  

Six Months Ended

 

 

% Change From

 

 

  

June 30,

 

 

June 30,

 

 

  

2014

 

 

2013

 

 

2013

 

Beginning assets under management

  

$

5.6

  

 

$

3.1

  

 

 

80.6

Gross client inflows

  

 

0.3

  

 

 

2.1

  

 

 

-85.7

Gross client outflows

  

 

(0.3

 

 

(0.3

 

 

0.0

Market appreciation

  

 

  

 

 

0.4

  

 

 

-100.0

Ending assets under management

  

$

5.6

  

 

$

5.3

  

 

 

5.7

 

 

 

11


Exhibit 8

Silvercrest Asset Management Group Inc.

Equity Investment Strategy Composite Performance1, 2

As of June 30, 2014

(Unaudited)

PROPRIETARY EQUITY PERFORMANCE

as of 06/30/14

 

 

  

annualized performance

 

 

  

inception

 

  

1-year

 

  

3-year

 

  

5-year

 

  

7-year

 

  

inception

 

Large Cap Value Composite

  

 

4/1/02

  

  

 

24.7

  

  

 

14.9

  

  

 

18.3

  

  

 

6.9

  

  

 

8.4

  

Russell 1000 Value Index

  

 

 

 

  

 

23.8

  

  

 

16.9

  

  

 

19.2

  

  

 

4.8

  

  

 

7.3

  

 

Small Cap Value Composite

  

 

4/1/02

  

  

 

25.1

  

  

 

16.3

  

  

 

21.6

  

  

 

12.3

  

  

 

11.9

  

Russell 2000 Value Index

  

 

 

 

  

 

22.5

  

  

 

14.6

  

  

 

19.9

  

  

 

5.5

  

  

 

8.8

  

 

Smid Cap Value Composite

  

 

10/1/05

  

  

 

25.7

  

  

 

16.1

  

  

 

20.5

  

  

 

9.4

  

  

 

10.5

  

Russell 2500 Value Index

  

 

 

 

  

 

24.9

  

  

 

16.0

  

  

 

21.6

  

  

 

6.7

  

  

 

8.4

  

 

Multi Cap Value Composite

  

 

7/1/02

  

  

 

25.7

  

  

 

15.6

  

  

 

19.8

  

  

 

8.8

  

  

 

9.8

  

Russell 3000 Value Index

  

 

 

 

  

 

23.7

  

  

 

16.7

  

  

 

19.3

  

  

 

4.9

  

  

 

8.3

  

 

Equity Income Composite

  

 

12/1/03

  

  

 

26.7

  

  

 

17.4

  

  

 

20.1

  

  

 

10.1

  

  

 

12.5

  

Russell 3000 Value Index

  

 

 

 

  

 

23.7

  

  

 

16.7

  

  

 

19.3

  

  

 

4.9

  

  

 

8.6

  

 

Focused Value Composite

  

 

9/1/04

  

  

 

27.4

  

  

 

13.8

  

  

 

19.3

  

  

 

8.3

  

  

 

11.4

  

Russell 3000 Value Index

  

 

 

 

  

 

23.7

  

  

 

16.7

  

  

 

19.3

  

  

 

4.9

  

  

 

8.2

  

 

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. 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 AIMR Performance Presentation Standards (AIMR-PPS®), the U.S. and Canadian version of GIPS®. AIMR has not been involved with or reviewed SAMG LLC’s claim of compliance.

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.

 

 

 

12


Exhibit 9

Silvercrest Asset Management Group Inc.

Model Portfolio Performance

As of June 30, 2014

(Unaudited)

MODEL PORTFOLIO PERFORMANCE

as of 6/30/2014

 

 

  

annualized performance

 

 

  

inception

 

  

1-year

 

  

3-year

 

  

5-year

 

  

7-year

 

  

inception

 

Income Portfolio

  

 

5/1/03

  

  

 

12.1

  

  

 

7.7

  

  

 

9.5

  

  

 

5.9

  

  

 

7.0

 

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

 

 

 

 

 

 

10.5

  

  

 

6.9

  

  

 

8.4

  

  

 

4.8

  

  

 

6.1

 

 

Balanced Portfolio

  

 

5/1/03

  

  

 

16.6

  

  

 

9.0

  

  

 

12.1

  

  

 

6.3

  

  

 

8.2

  

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

 

 

 

 

 

 

15.3

  

  

 

10.1

  

  

 

11.9

  

  

 

5.7

  

  

 

7.4

 

 

Growth Portfolio

  

 

5/1/03

  

  

 

22.5

  

  

 

11.3

  

  

 

16.4

  

  

 

6.6

  

  

 

9.6

  

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

 

 

 

 

 

 

21.0

  

  

 

14.0

  

  

 

16.1

  

  

 

6.0

  

  

 

8.6

 

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 our 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.

13