Summary and Analysis of Key Points

Overview

• Silvercrest is a full-service wealth management firm focused on providing financial advisory and family office services to ultra-high net worth individuals and institutional investors.
• During the three months ended March 31, 2025, Silvercrest’s assets under management (AUM) decreased by 3.3% from $36.5 billion to $35.3 billion.
• The business includes the management of funds of funds and other investment funds, referred to as the “Silvercrest Funds.”

Revenue

• Silvercrest generates revenue from management and advisory fees, performance fees and allocations, and family office services fees.
• Revenue is primarily driven by the level of assets under management, which can increase or decrease based on net inflows/outflows and investment performance.
• Silvercrest’s average annual management fee was 0.35% and 0.36% for the three months ended March 31, 2025 and 2024, respectively.

Expenses

• Silvercrest’s largest expense is compensation and benefits, which includes salaries, bonuses, equity-based compensation and related benefits.
• General and administrative expenses include occupancy, professional fees, office expenses, depreciation and amortization, sub-advisory fees, and technology costs.

Other Income

• Other income is derived primarily from investment income on Silvercrest’s investments in private investment funds.

Non-Controlling Interests

• Silvercrest consolidates the financial results of Silvercrest L.P., its operating subsidiary, and reflects the limited partners’ 29.9% interest as non-controlling interests.

Acquisitions

• Silvercrest completed the Neosho Acquisition in January 2019, acquiring certain assets of Neosho Capital LLC.

Financial Performance

• For the three months ended March 31, 2025, Silvercrest’s revenue increased by 3.7% to $31.4 million, driven by market appreciation.
• Total expenses increased by 9.0% to $26.6 million, primarily due to higher compensation and general/administrative costs.
• Net income decreased by 20.1% to $3.9 million, resulting in a net income margin of 12.5%.
• Adjusted EBITDA decreased by 12.8% to $6.5 million, with an Adjusted EBITDA margin of 20.7%.

Outlook

• Silvercrest’s ongoing sources of cash are primarily management fees and family office services fees, which are collected quarterly.
• The company expects to have sufficient cash from operations to fund its operations and commitments for the next twelve months.
• Distributions to Silvercrest L.P. partners and dividends to Class A shareholders will continue to be a material use of cash.
• Silvercrest’s tax receivable agreement with Class B unitholders is expected to result in substantial future payments.

Overall, Silvercrest’s financial performance in the first quarter of 2025 was mixed, with revenue growth offset by higher expenses, leading to a decline in profitability. The company continues to focus on managing its assets under management, controlling costs, and leveraging its wealth management and family office capabilities to serve its ultra-high net worth client base.