Q4 2025 Silvercrest Asset Management Group Inc Earnings Call

March 17, 2026

Operator 1: Good morning, and welcome to the Silvercrest Asset Management Group Inc. Q4 and Full Year 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. 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.

Operator: Good morning, and welcome to the Silvercrest Asset Management Group Inc. Q4 and Full Year 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. 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.

Speaker #2: Should you need assistance, please signal the conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: Those factors are disclosed in our filings with the SEC under the caption Risk Factors. We're all such forward-looking statements, we claim the protections provided by the litigation reform act of 1995.

Operator 1: 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 Richard R. Hough III, Chairman and CEO of Silvercrest. Please go ahead.

Operator: 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 Richard R. Hough III, Chairman and CEO of Silvercrest. Please go ahead.

Speaker #2: 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.

Speaker #2: 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 discussionary assets under management, which primarily drives the firm's revenue decreased 1.2% during the fourth quarter.

Richard R. Hough III: Good morning. Thank you for joining us for our Q4 and year-end 2025 results. Silvercrest's discretionary assets under management, which primarily drives the firm's revenue, decreased 1.2% during the Q4 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 Q4, 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.

Rick Hough: Good morning. Thank you for joining us for our Q4 and year-end 2025 results. Silvercrest's discretionary assets under management, which primarily drives the firm's revenue, decreased 1.2% during the Q4 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 Q4, 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Richard R. Hough III: Total AUM decreased 1.6% during Q4 to $37 billion. It increased 2% year-over-year from $36.5 billion with no revenue effect. As discussed in prior quarters, our non-discretionary 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 non-discretionary AUM in a future quarter. This adjustment will substantially lower our non-discretionary AUM on a one-time basis without revenue effect, providing investors with a clear picture of the AUM and economics that drive our business.

Rick Hough: Total AUM decreased 1.6% during Q4 to $37 billion. It increased 2% year-over-year from $36.5 billion with no revenue effect. As discussed in prior quarters, our non-discretionary 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 non-discretionary AUM in a future quarter. This adjustment will substantially lower our non-discretionary AUM on a one-time basis without revenue effect, providing investors with a clear picture of the AUM and economics that drive our business.

Speaker #2: 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 non-discretionary AUM are associated with only 4% of total revenue, mostly comprising fixed fee reporting and family office services.

Speaker #2: 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.

Speaker #2: As previously announced, we will adjust how the firm reports non-discretionary AUM in a future quarter. This adjustment will substantially lower our non-discretionary AUM on a one-time basis, without revenue effect.

Speaker #2: Providing investors with a clear picture of the AUM and economics that drive our business. As we emphasized throughout 2024, Silvercrest has embarked on significant strategic investments to promote growth opportunities across multiple fronts.

Richard R. Hough III: 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 long-term strategic priorities. We continue to execute on these priorities in Q4 and across the full year. Our strategic initiatives highlight Silvercrest in both the institutional and wealth markets, and we have made meaningful progress on several key fronts. Our new business pipeline remains particularly robust with regards to our global and international equity strategies, bolstered by outstanding performance. The firm continues to generate strong interest from institutional consultants and allocators globally.

Rick Hough: 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 long-term strategic priorities. We continue to execute on these priorities in Q4 and across the full year. Our strategic initiatives highlight Silvercrest in both the institutional and wealth markets, and we have made meaningful progress on several key fronts. Our new business pipeline remains particularly robust with regards to our global and international equity strategies, bolstered by outstanding performance. The firm continues to generate strong interest from institutional consultants and allocators globally.

Speaker #2: 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 long-term strategic priorities.

Speaker #2: We continue to execute on these priorities in the fourth quarter and across the full year. Our strategic initiatives highlight Silvercrest in both the institutional and wealth markets, and we have made meaningful progress on several key fronts.

Speaker #2: Our new business pipeline remains particularly robust with regards to our global and international equity strategies, bolstered by outstanding performance. The firm continues to generate strong interest from institutional consultants and allocators globally.

Richard R. Hough III: Our recent ranking of 6 in Nasdaq eVestment's Q4 2025 brand awareness rankings among consultants in the mid-sized firm peer universe reflects the growing recognition of Silvercrest's institutional capabilities. We have reorganized our international business development effort and now have professionals in London and Australia. We are nearly complete with our creating an Australian investment trust and a UCITS vehicle in Europe. We expect regulatory approval to do business in Europe through our new Dublin office to be completed within Q2. The firm also continues to invest in talent across the organization to drive new growth and successfully transition the business toward the next generation, further strengthening our investment leadership bench. These investments in people are central to our long-term competitive positioning.

Rick Hough: Our recent ranking of 6 in Nasdaq eVestment's Q4 2025 brand awareness rankings among consultants in the mid-sized firm peer universe reflects the growing recognition of Silvercrest's institutional capabilities. We have reorganized our international business development effort and now have professionals in London and Australia. We are nearly complete with our creating an Australian investment trust and a UCITS vehicle in Europe. We expect regulatory approval to do business in Europe through our new Dublin office to be completed within Q2. The firm also continues to invest in talent across the organization to drive new growth and successfully transition the business toward the next generation, further strengthening our investment leadership bench. These investments in people are central to our long-term competitive positioning.

Speaker #2: Our recent ranking of number six in NASDAQ investments fourth quarter 2025 brand awareness rankings among consultants in the midsize firm peer universe reflects the growing recognition of Silvercrest's institutional capabilities.

Speaker #2: We have reorganized our international business development effort and now have professionals in London and Australia. We are nearly complete with our creating an Australian investment trust and a usage vehicle in Europe.

Speaker #2: We expect regulatory approval to do business in Europe through our new Dublin office to be completed within the second quarter. The firm also continues to invest in talent across the organization to drive new growth and successfully transition the business toward the next generation further strengthening our investment leadership bench.

Speaker #2: These investments and people are central to our long-term competitive positioning. Also, as previously discussed, Silvercrest will continue to adjust our interim compensation ratio to match important investments in the business as long as we have compelling opportunities to organically grow the firm and build our return on investment capital.

Richard R. Hough III: Also, as previously discussed, Silvercrest will continue to adjust our interim compensation ratio to match important investments in the business as long as we have compelling opportunities to organically grow the firm and build our return on investment capital. With significant initiatives for marketing and distribution in Europe, Oceania, and Asia, as well as in US-based personnel, our compensation ratio remains elevated during Q4 and for the full year 2025. We expect the compensation ratio to remain elevated for the foreseeable future as these investments mature and begin to contribute to revenue growth. For the full year 2025, total compensation and benefits expense was $83.9 million, representing 67% of revenue, compared to $76.7 million or 62% of revenue for 2024. We previously announced a new share repurchase program of $25 million in May 2025.

Rick Hough: Also, as previously discussed, Silvercrest will continue to adjust our interim compensation ratio to match important investments in the business as long as we have compelling opportunities to organically grow the firm and build our return on investment capital. With significant initiatives for marketing and distribution in Europe, Oceania, and Asia, as well as in US-based personnel, our compensation ratio remains elevated during Q4 and for the full year 2025. We expect the compensation ratio to remain elevated for the foreseeable future as these investments mature and begin to contribute to revenue growth. For the full year 2025, total compensation and benefits expense was $83.9 million, representing 67% of revenue, compared to $76.7 million or 62% of revenue for 2024. We previously announced a new share repurchase program of $25 million in May 2025.

Speaker #2: With significant initiatives from marketing and distribution in Europe, Oceania, and Asia, as well as in US-based personnel, our compensation ratio remains elevated during the fourth quarter and for the full year 2025.

Speaker #2: We expect the compensation ratio to remain elevated for the foreseeable future as these investments mature and begin to contribute to revenue growth. For the full year 2025, total compensation and benefits expense was 83.9 million, representing 67% of revenue, compared to 76.7 million or 62% of revenue for 2024.

Speaker #2: We previously announced a new share repurchase program of 25 million in May 2025. As of the end of 2025, we almost completed that program and repurchased approximately a total of 50.4 million worth of shares.

Richard R. Hough III: As of the end of 2025, we almost completed that program and repurchased approximately a total of $50.4 million worth of shares. Our strong balance sheet supports ongoing capital returns, our substantial dividend, as well as the growth initiatives. Silvercrest also previously received shareholder approval to increase the number of shares issuable under our equity incentive plan, and we expect to begin rewarding shares to further motivate our professionals during this growth phase. Those conclude my introductory remarks. We'll take questions later after Scott presents the financials. Thank you. Scott, go ahead.

Rick Hough: As of the end of 2025, we almost completed that program and repurchased approximately a total of $50.4 million worth of shares. Our strong balance sheet supports ongoing capital returns, our substantial dividend, as well as the growth initiatives. Silvercrest also previously received shareholder approval to increase the number of shares issuable under our equity incentive plan, and we expect to begin rewarding shares to further motivate our professionals during this growth phase. Those conclude my introductory remarks. We'll take questions later after Scott presents the financials. Thank you. Scott, go ahead.

Speaker #2: Our strong balance sheet supports ongoing capital returns, our substantial dividend, as well as the growth initiatives. Silvercrest also previously received shareholder approval to increase the number of shares issuable under our equity incentive plan, and we expect to begin rewarding shares to further motivate our professionals during this growth phase.

Speaker #2: Those conclude my introductory remarks. We'll take questions later after Scott presents the financials. Thank you, Scott. Go ahead.

Scott A. Gerard: Great. Thanks, Rick. As disclosed in our earnings release for Q4, 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 Q4, 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, new hires, and an increase in the accrual for bonuses.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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.

Scott A. Gerard: 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, amortization, and portfolio and systems expense. Reported net loss attributable to Silvercrest or to Class A shareholders for Q4 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 non-core and non-recurring items, was approximately $2.9 million or 8.9% of revenue for the quarter.

Speaker #3: General and administrative expenses increased by $0.2 million, or approximately 2.4%, primarily due to an increase in professional fees and an adjustment to our bad debt reserve, partially offset by decreases in depreciation and amortization, and portfolio and systems expense.

Speaker #3: Reported net loss attributable to Silvercrest or to Class A shareholders for the fourth quarter was approximately 0.1 million, or a penny per basic and diluted Class A share.

Speaker #3: Adjusted EBITDA, which we define as EBITDA, without giving effect to equity-based compensation expense and non-core and non-recurring items, was approximately 2.9 million or 8.9% of revenue for the quarter.

Scott A. Gerard: Adjusted net income, which we define as net income without giving effect to non-core and non-recurring 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. To the extent dilutive, we had unvested restricted stock units and non-qualified stock options to the total shares outstanding to compute diluted adjusted EPS. Looking at the full year, revenue increased year-over-year by $1.7 million or 1.3%, primarily driven by market appreciation in discretionary AUM, partially offset by net client outflows.

Speaker #3: Adjusted net income which we defined as net income without giving effect to non-core and non-recurring items and income tax expense assuming a corporate rate of 26% was approximately 2.3 million for the quarter or 19 cents, and 18 cents per adjusted basic and diluted EPS, respectively.

Speaker #3: 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 diluted, we add unvested restricted stock units and non-qualified stock options to the total shares outstanding to compute diluted adjusted EPS.

Speaker #3: Looking at the full year, revenue increased year over year by $1.7 million, or 1.3%, primarily driven by market appreciation in discretionary AUM, partially offset by net client outflows.

Scott A. Gerard: Expenses for the full year increased year-over-year by $10 million or 9.4%, primarily driven by increased compensation expense and general and administrative expenses. Looking further, compensation expense, it increased year-over-year by $7.3 million or 9.5%, primarily due to increases in salaries and benefits expense and as a result of merit-based increases, along with new hires. Furthermore, the accrual for bonuses increased, and these were partially offset by a decrease in equity-based compensation expense. General and administrative expenses increased by $2.7 million or approximately 9.2%, primarily due to increases in professional fees, bad debt reserve, travel and entertainment expense, and occupancy and related expenses, partially offset by decreases in depreciation and amortization expense and trade error expense.

Speaker #3: Expenses for the full year increased year over year by 10 million or 9.4%, primarily driven by increased compensation expense and general and administrative expenses.

Speaker #3: Looking further at compensation expense, it increased year over year by 7.3 million or 9.5%, primarily due to increases in salaries and benefits expense and as a result of merit-based increases along with new hires furthermore the accrual for bonuses increased and these were partially offset by decrease in equity-based compensation expense.

Speaker #3: General and administrative expenses increased by $2.7 million, or approximately 9.2%, primarily due to increases in professional fees, our bad debt reserve, travel and entertainment expense, and occupancy and related expenses, partially offset by decreases in depreciation and amortization expense and trade air expense.

Scott A. Gerard: Reported net income attributable to Silvercrest or to Class A shareholders for the full year was approximately $4.9 million or $0.56 per basic and diluted Class A share. Adjusted EBITDA was approximately $19.6 million or 15.7% of revenue for the full year. Adjusted net income was approximately $11.8 million for the full year or $1.91 per adjusted basic and diluted EPS, respectively. Looking at the balance sheet, total assets at the end of 2025 were approximately $166.6 million compared to $194.4 million as of the end of 2024.

Speaker #3: Reported net income attributable to Silvercrest or to Class A shareholders for the full year was approximately 4.9 million or 56 cents per basic and adjusted per basic and diluted Class A share.

Speaker #3: Adjusted EBITDA was approximately 19.6 million or 15.7% of revenue for the full year. Adjusted net income was approximately 11.8 million for the full year or a dollar and 91 cents for adjusted basic and diluted EPS, respectively.

Speaker #3: Looking at the balance sheet, total assets at the end of 2025 were approximately $166.6 million, compared to $194.4 million as of the end of 2024.

Scott A. Gerard: Cash and cash equivalents at the end of 2025 were $44.1 million compared to $68.6 million at the end of 2024. Borrowings totaled approximately $4 million as of the end of 2025. Total Class A stockholders' equity was approximately $50.3 million at the end of 2025. During the Q4 of last year, we repurchased Class A shares totaling approximately $7 million. We'll now turn it over to Q&A. Thank you.

Speaker #3: Cash and cash equivalents at the end of 2025 were 44.1 million compared to 68.6 million at the end of 2024. Borrowings totaled approximately 4 million as of the end of 2025.

Speaker #3: Total Class A stockholders’ equity was approximately $50.3 million at the end of 2025, and during the fourth quarter of last year, we repurchased Class A shares totaling approximately $7 million.

Speaker #3: We'll now turn it over to Q&A.

Speaker #4: Thank you.

Operator 1: Ladies and gentlemen, at this time, we'll begin that question-and-answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Sandy Mehta from Evaluate Research. Please go ahead with your question.

Operator: Ladies and gentlemen, at this time, we'll begin that question-and-answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Sandy Mehta from Evaluate Research. Please go ahead with your question.

Speaker #1: And, ladies and gentlemen, at this time we'll begin the question-and-answer session. To ask a question, you may press star, then one, using a touch-tone telephone.

Speaker #1: To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please limit your we ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality.

Speaker #1: Once again, that is star and then one to join the question queue. And our first question today comes from Sandy Mehta from Evaluate Research.

Speaker #1: Please go ahead with your question.

Sandy Mehta: Yes, sir. Good morning, Rick and Scott.

Richard R. Hough III: Good morning.

Rick Hough: Good morning.

Speaker #5: Yes, good morning, Rick and Scott.

Scott A. Gerard: Good morning.

Sandy Mehta: 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? Talk a little bit, give us some more color on what you see in terms of the potential going forward in AUM growth.

Speaker #4: Good morning.

Speaker #5: 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 the 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?

Richard R. Hough III: Yeah. Currently, we have over $2 billion across global and international strategies. There are multiple strategies in both international emerging markets and global. You know, 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 two and a half years. 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. That bodes well. We have built out, as I mentioned in my preliminary comments, Sandy, the business development team on an international basis.

Rick Hough: Yeah. Currently, we have over $2 billion across global and international strategies. There are multiple strategies in both international emerging markets and global. You know, 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 two and a half years. 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. That bodes well. We have built out, as I mentioned in my preliminary comments, Sandy, the business development team on an international basis.

Speaker #4: Yeah. So currently, we have over $2 billion U.S. 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.

Speaker #4: 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 two and a half 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.

Speaker #4: 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. We are continually building very excellent, high-level consultant contacts. That is primarily where I see the pipeline coming from.

Richard R. Hough III: We did not have people looking abroad explicitly, and we reorganized how we do institutional relationship and business development management at the firm. 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 a Australian investment trust that we have launched there for investors and a UCITS vehicle, which can be used for any of Silvercrest strategies in Europe. We expect our licensing for being able to market proactively in Europe to come through within the next couple months through the Central Bank of Ireland. Currently, as you well know, we have to rely on reverse solicitation.

Rick Hough: We did not have people looking abroad explicitly, and we reorganized how we do institutional relationship and business development management at the firm. 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 a Australian investment trust that we have launched there for investors and a UCITS vehicle, which can be used for any of Silvercrest strategies in Europe. We expect our licensing for being able to market proactively in Europe to come through within the next couple months through the Central Bank of Ireland. Currently, as you well know, we have to rely on reverse solicitation.

Speaker #4: There is also going to be the ability for investors to invest directly in an Australian investment trust that we have launched there, a vehicle which can be used for any of Silvercrest strategy in Europe.

Speaker #4: 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.

Speaker #4: 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 two-week road trip with consultants and investors in Australia where as you know we received a seed investment from a large superannuation fund.

Richard R. Hough III: These efforts are all coming together about now. We also just got back from a two-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 six months. It was a high level of confidence in the pipeline. The business just is not working that way anymore, more so we've stopped reporting over at least the past year the pipeline in those terms. Maybe it's even been a year and a half.

Rick Hough: These efforts are all coming together about now. We also just got back from a two-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 six months. It was a high level of confidence in the pipeline. The business just is not working that way anymore, more so we've stopped reporting over at least the past year the pipeline in those terms. Maybe it's even been a year and a half.

Speaker #4: 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.

Speaker #4: It used to be, Sandy, that we would look at finals invite only RFPs that were actionable within the next six months. It was a high-level confidence in the pipeline.

Speaker #4: 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 a year and a half.

Richard R. Hough III: What I'm giving you is color on what we're seeing. 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 small-cap strategies. The potential is multiple billions of dollars. Very hard to say when that can land or how. We should start seeing flows sooner than later in 2026, which I'll be able to report as progress, you know, towards the pipeline that I've mentioned, or at least fulfilling the potential of that pipeline.

Rick Hough: What I'm giving you is color on what we're seeing. 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 small-cap strategies. The potential is multiple billions of dollars. Very hard to say when that can land or how. We should start seeing flows sooner than later in 2026, which I'll be able to report as progress, you know, towards the pipeline that I've mentioned, or at least fulfilling the potential of that pipeline.

Speaker #4: 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, and the multiple meetings following on our initial introductions all bode very well for significant flows.

Speaker #4: 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.

Sandy Mehta: Great. Compensation was up as you mentioned.

Speaker #1: Great.

Richard R. Hough III: Yeah.

Rick Hough: Yeah.

Sandy Mehta: 67% versus 62.

Speaker #5: 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?

Richard R. Hough III: Right.

Rick Hough: Right.

Sandy Mehta: When we look out to 2026 and 2027, you know, where do you think comp should be? Is it gonna be more 67 or more 62? What's your thought there?

Speaker #5: Is it going to be more at 67, or more at 62? What's your thought there?

Richard R. Hough III: Yeah. It's gonna depend entirely on some of those flows. 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.

Rick Hough: Yeah. It's gonna depend entirely on some of those flows. 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.

Speaker #4: Yeah, it's going to depend entirely on some of those flows. 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 and hired a new portfolio manager in Atlanta.

Speaker #4: We have officially opened our office in Singapore, in part for that time zone and the flows throughout that region. There will likely be hiring there.

Speaker #4: 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.

Speaker #4: 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.

Richard R. Hough III: 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. 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 under 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, you know, a couple percentage points higher than what you see in a lot of similar businesses.

Rick Hough: 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. 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 under 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, you know, a couple percentage points higher than what you see in a lot of similar businesses.

Speaker #4: 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.

Speaker #4: The firm historically has run the business in a 54 to 55, sometimes 56 percent revenue model. I think it's not uncommon in our industry for people to be up at 60%.

Speaker #4: So we're clearly doing a lot more than that. Sixty-two percent at the end of 2024 was a couple of percentage points higher than what you see in a lot of similar businesses.

Richard R. Hough III: We've pushed it up even beyond that. It's gonna be for the foreseeable future and entirely dependent on those very substantial flows. 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.

Rick Hough: We've pushed it up even beyond that. It's gonna be for the foreseeable future and entirely dependent on those very substantial flows. 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.

Speaker #4: And we've pushed it up even beyond that. So it's going to be for the foreseeable future an entirely dependent on those very 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.

Speaker #4: What I want to do is just report progress.

Scott A. Gerard: Sandy, just a couple things to note on the compensation. The percentages that you see in the release is, you know, total GAAP compensation expense. 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 certain number of new hires in place before we can even receive our license and earn EUR 1 of revenue. You know, that, because of that, there's a lot of front loading of expense that, you know, will be followed up by revenue at a later time.

Speaker #5: And Sandy, just a couple of things to note on the compensation. So the percentages that you see in the release are total GAAP compensation expense.

Speaker #5: So, for 2025, our recurring cash comp ratio is about 62%. That was a few percentage points higher than 2024, to give you some perspective there.

Speaker #5: The other thing I wanted to mention with respect to our initiative in the EU from a regulatory standpoint, we are required to have certain number of new hires in place before we can even receive our license and earn one euro of revenue.

Speaker #5: So, 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.

Scott A. Gerard: You have that effect to keep in mind.

Richard R. Hough III: Yeah. Thank you, Scott, for those two important comments with regard to the ratio and where we are, as well as 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 value Global Equity team, multiple hires that culminated at the end of 2024 with our seed investment. That's kind of the phase we're in right now, Sandy.

Rick Hough: Yeah. Thank you, Scott, for those two important comments with regard to the ratio and where we are, as well as 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 value Global Equity team, multiple hires that culminated at the end of 2024 with our seed investment. That's kind of the phase we're in right now, Sandy.

Speaker #4: Yeah. Thank you, Scott, for those two important comments with regards to the ratio and where we are, as well as the hiring in advance.

Speaker #4: 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.

Speaker #4: So that's kind of the phase we're in right now, Sandy.

Sandy Mehta: Just one last question. 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. You also mentioned stock grants and awards to employees. Can we be confident that if you do further buybacks, that will offset any shares given to employees and the share count, if there are buybacks, will continue to decline?

Speaker #5: And just one last question. So, the buyback is almost completed. What are your thoughts on another buyback? Do you have a lot of cash on the balance sheet?

Speaker #5: 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 will offset any shares given to employees, and the share count, if there are buybacks, will continue to decline?

Richard R. Hough III: Well, yeah, I appreciate that. Another way to look at it is that we did the buybacks in advance of doing the equity awards. 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 in the firm, as partners, like accreting ourselves and being aligned with our external shareholders.

Rick Hough: Well, yeah, I appreciate that. Another way to look at it is that we did the buybacks in advance of doing the equity awards. 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 in the firm, as partners, like accreting ourselves and being aligned with our external shareholders.

Speaker #4: Well, another way to look at it—yeah, I appreciate that. Another way to look at it is that we did the buybacks in advance of doing the equity awards.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: We, as owners of the business, are ourselves working in the firm as partners, accreting ourselves and being aligned with our external shareholders. So when you look at those factors, we're very favorable about doing that.

Richard R. Hough III: You know, 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. 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. It's always foremost in our mind when we think about the uses of capital for the business.

Rick Hough: You know, 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. 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. It's always foremost in our mind when we think about the uses of capital for the business.

Speaker #4: And we're also paying a high dividend to encourage investors to have a very long-term vision for this company, especially as we go through this investment phase.

Speaker #4: So, we'll continue to consider it, depending on where the stock price is. I won't commit to it, of course. We have multiple uses for capital right now.

Speaker #4: But it's always foremost in our mind when we think about the uses of capital for the business.

Sandy Mehta: All right. Yeah. Thank you. It'll be great if the share count continues to come down, and we look forward to that. Thank you so much. Thank you.

Speaker #5: Yeah, thank you. It'll be great if the share count continues to come down, and we look forward to that. Thank you so much. Thank you.

Richard R. Hough III: Okay, Sandy. Near term, it's gonna, you know, it's not going to come down since we're gonna have these equity awards. We're just gonna be, you know, going back the other way a bit after the buybacks. Appreciate the comment and question.

Rick Hough: Okay, Sandy. Near term, it's gonna, you know, it's not going to come down since we're gonna have these equity awards. We're just gonna be, you know, going back the other way a bit after the buybacks. Appreciate the comment and question.

Speaker #4: 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.

Sandy Mehta: Thanks.

Rick Hough: Thanks.

Speaker #4: But I appreciate the comment and question.

Operator 1: Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. At this time, and showing no additional questions, I'd like to turn the floor back over to Chairman and CEO, Rick Huff, for any closing comments.

Operator: Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. At this time, and showing no additional questions, I'd like to turn the floor back over to Chairman and CEO, Rick Huff, for any closing comments.

Speaker #5: Thanks.

Speaker #6: And once again, if you would like to ask a question, please press star and then one. To withdraw your question, you may press star and then two.

Speaker #6: And at this time, seeing no additional questions, I'd like to turn the floor back over to Chairman and CEO Richard Hough for any closing comments.

Richard R. Hough III: Great. Thank you again for joining us for the Q4 and Year-End 2025 Earnings Call. We greatly appreciate our investors and those who are, you know, 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.

Rick Hough: Great. Thank you again for joining us for the Q4 and Year-End 2025 Earnings Call. We greatly appreciate our investors and those who are, you know, 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.

Speaker #4: 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.

Speaker #4: 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.

Operator 1: With that, everyone, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

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

Q4 2025 Silvercrest Asset Management Group Inc Earnings Call

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