AlTi Global 2026 Q3 Earnings Call

Please go ahead. Good afternoon, and welcome to AlTi Global's third quarter 2026 earnings conference call.

Today, we will hear prepared remarks from Nancy Curtin, Interim Chief Executive Officer and Global Chief Investment Officer, as well as Pat Keenan, Chief Financial Officer. They will be joined by Kevin Moran, our President and Chief Operating Officer, for the Q&A session. Before we begin, 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. These forward-looking statements include, but are not limited to, comments made during the prepared remarks and in response to questions. Forward-looking statements can be identified by the use of words such as anticipate, believe, continue, estimate, expect, future, intend, may, planned, and will, or similar terms.

Because these forward-looking statements involve both known and unknown risks and uncertainties, these are important factors that could cause actual results to differ materially from those expressed or implied by these statements. For discussion of the risks and uncertainties that could cause actual results to differ, please refer to AlTi's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. 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. With that, I'd like to turn the call over to Nancy Curtin.

Thank you, Jeff, and good afternoon, everyone. We are pleased to be reporting third quarter 2026 results that reflect the positive momentum we're seeing in our wealth management franchise. The secular tailwind supporting ultra-high net worth wealth creation remain exceptionally strong in the United States and other global markets, and we continue to see growing demand for the independent, highly customized, sophisticated investment advice and family office capabilities that truly differentiate AlTi's platform. Not only are we winning new relationships, but we are being very deliberate about partnering with clients who can benefit most from our differentiated offering, and for whom we can deliver meaningful value across investments, governance, family office services, planning, trust, and stewardship. These clients rely on us for a highly bespoke experience that often spans multiple generations, jurisdictions, asset classes, trusts, governance structures, and operating entities.

We believe our approach strengthens the durability and long-term economics of our relationship and our franchise. It also aligns directly with our strategy of serving larger, more complex families, where our platform, expertise, and global capabilities are most differentiated. We are also pleased with investment performance. Our positioning across a diversified range of traditional and alternative asset classes and intentional exposures and tilts therein have allowed us to both protect capital in more volatile and a rising rate environment, while also benefiting from secular tailwinds of strong growth and earnings in sectors, companies, and countries well-positioned to benefit from innovation, need for energy security, and increasing industrial and investment activity. We've also been particularly pleased with our cautious positioning in long-term government bonds and exposure to various diversifying holdings.

The foundation of our business, of course, is the high-touch service and exceptional advice we seek to provide ultra-high-net-worth families around the world. To maintain and strengthen these investment and integrated wealth advice capabilities, we must continue to recruit, develop, and retain exceptional advisor talent. We remain committed to investing in our people, AI platforms, and other technology and infrastructure that directly support our clients and the client experience. We believe these investments are essential to delivering the extraordinary service, sophisticated advice, and superior long-term outcomes that our clients expect from us. To provide us additional capital to invest in our global business and fund organic and inorganic growth, we are very pleased to have entered into a new $85 million credit agreement with Diameter Finance Administration last month.

Having the support of credit investors with the sophistication and experience of Diameter and the other institutional participants underscores the strength and value of AlTi's global wealth management platform. In addition, we are pleased to report that our expense management efforts continue to bear fruit. As we mentioned last quarter, we continue to reduce corporate overhead, administrative expense, organizational complexity, and external vendor cost. This includes, for example, tightly managing corporate and administrative headcount, which has allowed us to reduce global headcount by about 8% over the last 12 months and 3% since the end of June. We also continue to actively evaluate professional fees, technology duplication, third-party service providers, occupancy costs, and other areas where greater efficiency can be achieved without compromising the client experience.

As Pat will momentarily cover, we are pleased with the ongoing improvements in operating expenses driven by our focus on cost controls as well as vendor rationalization. Operating expenses improved 25% from the year-ago period, a reflection of AlTi's comprehensive efforts to streamline the organization, simplify operations, reduce complexity, and improve scalability. Now, turning to our third quarter financial results, total assets under management grew to $51.6 billion, primarily due to strong portfolio performance. We continue to stay the course in volatile markets, with positioning technology, energy, power, infrastructure, all benefiting from long-term secular demand tailwinds. AUM growth was achieved even as we maintain a significant portion of the portfolios in alternatives, which do not price immediately at quarter end. Net wealth management outflows were about $250 million during the quarter.

This reflected a reduction in lower fee rate legacy accounts, partially offset by new client wins with fee rates that are better aligned with our differentiated offering and value proposition. It is worth noting that we remain encouraged by our pipeline of prospect opportunities, and note, for our business, flows in any one quarter can be lumpy given often considerable time lag between contract signing and client funding, hence contributing to delays in fee-paying revenue. As we've noted previously, the external strategic managers we have stakes in run with low net market exposure, so they tend to have a more muted performance when markets move higher, but continue to provide both diversification and downside protection benefits. Note that in the third quarter, we took a minor adjustment to the value of European equities manager Zebedee due to its more muted performance in 2026.

Subsequent to the third quarter, we received information that will result in a further non-cash unrealized loss in Q4. Zebedee has moved to a Co-CIO portfolio management structure with the aim of building perpetuity value for the firm while also promoting talent. That process is catalyzing some redemptions and will be reflected in our holding value of this investment in the next quarter. We currently expect to recognize an unrealized non-cash loss of approximately $20 million-$23 million on this stake in fourth quarter's other expense. As I shared with many of you previously, AlTi's non-strategic stakes in external managers are largely passive investments that have served as an attractive source of liquidity, which we use to fund our core wealth business. Turning to the top line, AlTi generated $58 million in total revenue in the third quarter of 2026, representing 1% growth compared to the same period last year.

Recurring management and advisory fees continue to represent the majority of our revenue base, reflecting the stability and recurring nature of our business model. We are also pleased to report that Adjusted EBITDA for the third quarter of 2026 was over $6 million, up 15% from the sequential quarter and up 1% from the third quarter of 2025, largely driven by the revenue increase along with continued improvements in our operating expenses. With respect to the ongoing strategic review process, the special committee continues its work. As of today, there's nothing further to report. We will provide updates as appropriate. With that, I'll turn the call over to our CFO, Pat Keenan, to walk through the financials in greater detail.

Pat? Thanks, Nancy, and good afternoon, everyone.

Assets under management on September 30, 2026 were $51.6 billion, up 5% year over year and in line with the sequential quarter end, primarily due to strong portfolio performance. In the third quarter of 2026, AlTi generated $58 million of total revenue, representing a 1% increase versus the same period last year. Recurring management and advisory fees totaled $55 million, up 7% year over year and 2% sequentially. Distributions from investments declined by 17% year over year, primarily due to lower distributions related to management fees in the real estate bridge lending strategy. As a reminder, the incentive portion of investment distributions tend to be most significant in the first quarter of each year. Turning to operating expenses, we are continuing to see early benefits of AlTi's comprehensive effort to streamline the organization, simplify operations, reduce complexity, and improve scalability.