AlTi Global (ALTI) Q2 2026 Earnings Call Transcript

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DATE

Monday, Aug. 10, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

• Investor Relations - Jeff Schoenborn
• Interim Chief Executive Officer and Global Chief Investment Officer - Nancy Curtin
• Chief Financial Officer - Patrick Keenan
• President and Chief Operating Officer - Kevin Moran

TAKEAWAYS

• Total Revenue -- $58 million, representing 11% growth compared to the same period last year.
• Recurring Management and Advisory Fees -- $54 million, increasing 11% year over year primarily due to organic growth in assets under management.
• Assets Under Management -- $51.4 billion, reflecting 8% growth year over year and 6% growth compared to March 31, 2026, driven by net positive inflows and market appreciation.
• Assets Under Advisement -- $96.0 billion, which represents a 1% decline year over year and a 7% increase since the first quarter.
• Net Organic Inflows -- $700 million, contributing to the sequential growth in wealth management assets.
• Gross Client Inflows -- Nearly $800 million, reflecting demand for ultra-high net worth family office services.
• Adjusted EBITDA -- Over $5 million, a 9% increase year over year reflecting higher revenue and initial improvements in operating expenses.
• Adjusted EBITDA Margin -- 9.3%, compared to 9.5% in the second quarter of 2025.
• Reported Operating Expenses -- $69 million, improving 12% from $78 million in the year-ago period due to organizational streamlining.
• Compensation and Benefits Expense -- $41.4 million, a 5% decrease year over year and a 26% decrease from the previous quarter.
• Professional Fees -- Reduced by 40% year over year, reflecting progress in zero-based budgeting initiatives and cost controls.
• Unrealized Investment Loss -- Nearly $19 million, resulting from the planned unwinding of the Asian Credit and Special Situations fund following a serious health event involving its founder.
• GAAP Operating Loss -- $10.9 million, representing a 58% year-over-year improvement driven by revenue growth and lower expenses.
• GAAP Net Loss from Continuing Operations -- $31 million, compared to a loss of $26 million in the prior year period.
• Impact Investing Assets -- $5 billion, following over 10 years of experience in impact and values-aligned strategies.
• Client Retention Rate -- 96% since 2021, reflecting the stability of the ultra-high net worth client base.
• Average Client AUM -- Approximately $60 million per client across a base of roughly 830 families, individuals, and institutions.
• Asian Credit Fund Revenue Impact -- Representing 75 basis points of recurring management fees and 650 basis points of incentive distributions year to date.
• Investment Distributions -- Increased 28% year over year, driven by outperformance in European equity, and real estate bridge lending strategies.
• Noncompensation Expenses -- Improved by 20% year over year through vendor rationalization, lower technology costs, and occupancy reductions.
• Average Client Tenure -- Approximately 10 years, supported by 25 years of operating history focused on ultra-high net worth clients.
• Total Employees -- 490, as reported in the company's profile as of the second quarter.
• Market Appreciation Impact -- $2.3 billion added to assets under management in the second quarter, following performance in technology, energy, and power infrastructure.

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RISKS

• Pat Keenan stated, "Due to the unexpected decision by the Asian Credit and Special Situations manager to unwind the fund within a 12-month time horizon, we anticipate diminishing contributions to AlTi revenues from this fund," as the manager is liquidating the strategy following a health event.

SUMMARY

AlTi Global, Inc. (NASDAQ:ALTI) reported growth in management fees and assets under management for the second quarter of 2026. Management attributed the performance to organic client inflows and market appreciation in sectors such as energy, power infrastructure, and technology. The company is currently implementing a zero-based budgeting process to reduce operating expenses and improve scalability across its global hubs. While top-line results grew year over year, the company recognized a noncash loss related to the liquidation of an external investment fund.

• Management noted that Miami has become one of the fastest-growing wealth hubs in the United States, prompting the appointment of Cesar Pachon to lead the local office.
• Interim CEO Nancy Curtin stated that the company remains focused on serving families with "hundreds of millions, or indeed billions of dollars of assets" across global markets.
• The company expanded its private endowments business with the hire of Mike Cagnina, a former leader of SEI's Global Institutional Group.
• CFO Patrick Keenan noted that cost controls and vendor rationalization are expected to accelerate expense improvements in 2027.
• The board's special committee is continuing its strategic review process, though management indicated there was no update to report as of the call date.
• Research cited by the company found that nearly half of family office respondents have begun formally defining the purpose of wealth for future generations.
• Interim CEO Curtin indicated that external strategic managers provide downside protection, stating they "run with low net market exposure, so they tend to have a more muted performance when markets move higher."

INDUSTRY GLOSSARY

• ZBB (Zero-Based Budgeting): A budgeting method where all expenses must be justified for each new period, starting from a zero base.
• UHNW (Ultra-High Net Worth): Individuals or families with at least $30 million in investable assets.
• AUM (Assets Under Management): The total market value of assets that a financial institution manages on behalf of clients.
• AUA (Assets Under Advisement): Assets that are overseen or custodied by a firm but not necessarily managed on a discretionary basis.
• Adjusted EBITDA: A measure of a company's operating performance that excludes noncash or nonrecurring items such as stock-based compensation and transaction costs.
• PIK (Paid-In-Kind): A type of investment where the interest or dividend is paid with additional securities instead of cash.
• OCIO (Outsourced Chief Investment Officer): A service where an organization or family office outsources the management of their investment portfolio to a third party.
• Impact Investing: Investment practices seeking to generate financial returns alongside positive measurable environmental and social impacts.
• External Strategic Managers: Third-party managers in which AlTi holds an economic stake, covering strategies such as real estate bridge lending and long-short equity.

Full Conference Call Transcript

Operator: At this time, I would like to welcome everyone to AlTi's Second Quarter 2026 Earnings Conference Call. I would like to advise all parties that this conference is being recorded and a replay of the webcast is available on AlTi's Investor Relations website. Now at this time, I will turn things over to [ Jeff Schoenborn ] with AlTi Investor Relations. Please go ahead.

Unknown Executive: Good afternoon and welcome to AlTi Global's Second Quarter 2026 earnings conference call. On today's call, 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, plan, and will, or similar terms. Because these forward-looking statements involve both known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these statements. For a 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.

Nancy Curtin: Thank you, Jeff, and good afternoon, everyone. I want to begin with what we believe is one of the most important aspects of the AlTi's story: the strength, rarity, and long-term relevance of our franchise. Globally, the creation of private wealth continues to be supported by powerful secular tailwinds. Wealth creation is expanding not only in the United States, but increasingly across Europe, Asia, the Middle East, and other markets. At the same time, the needs of ultra-high net worth families are becoming more complex, more global, and more interconnected. Our focus remains squarely on serving ultra-high net worth families, family offices, and institutions.

The number of independent firms capable of advising families with hundreds of millions, or indeed billions of dollars of assets, across geographies, generations, and asset classes is remarkably small. We believe this scarcity value creates substantial long-term franchise value. Importantly, we do this as an independent adviser. Our model is designed around the needs of the client rather than proprietary product distribution. We believe that alignment, combined with our global capabilities and highly collaborative culture, differentiates us in the marketplace and contributes to the exceptionally high client retention rates that we enjoy. In fact, recent research we conducted among family offices globally reinforces what we hear from our clients daily.

Nearly half of respondents said they have begun to formally define the purpose of wealth and the role it should play across generations, yet many have not fully engaged the next generation in those discussions. We view this as a powerful validation of the work we do to help families navigate governance, succession planning, stewardship, education, and long-term legacy objectives, alongside our sophisticated investment management, planning, and wealth advice expertise. Increasingly, our role is helping to prepare future generations for the responsibilities that come with wealth. We believe that distinction is becoming more important to families around the world and represents a significant opportunity for AlTi to create meaningful long-term value for clients and shareholders.

As we look ahead, our strategic priorities remain clear. First is organic growth. We believe strong net organic growth is the clearest indication of the health of a wealth management business. Our focus is on attracting new clients, deepening existing relationships, expanding adviser capacity, and continuing to earn referrals through exceptional service and client outcomes. Second, we continue to invest in our core wealth management franchise. We remain focused on expanding adviser capacity in key markets, densifying offices where we already have scale, and selectively adding talent and teams that align with our culture.

A recent example is our continued investment in Miami, which has emerged as one of the fastest-growing wealth hubs in the United States, benefiting from both domestic migration and increasing international wealth flows. In the second quarter, we announced that Cesar Pachon joined AlTi to lead our Miami office, bringing decades of ultra-high net worth client experience, enhancing our strength in serving globally connected families and family offices. Internationally, we remain disciplined in allocating resources to markets that demonstrate strong growth potential and attractive long-term economics. Our global footprint is intentional, reflecting where internationally mobile families increasingly live, invest, and conduct businesses.

In addition, investments in our already substantial private endowments business continued with the recent addition of Mike Cagnina, who brings decades of experience to AlTi, including many years at SEI's Global Institutional Group, where he co-founded its endowment and foundations practice. A third strategic priority remains our laser focus on improving profitability and operating efficiency. We've undertaken a comprehensive effort to streamline the organization, simplify operations, reduce complexity, and improve scalability. We are in the early stages of seeing the benefits, and we believe the organization is becoming leaner and better positioned for long-term growth. While reported numbers do not yet fully reflect our progress, our underlying expense trajectory is improving.

These efforts are aimed at better aligning the business with its core strengths and ensuring our financial results more accurately reflect AlTi's long-term earnings power. Turning to our second quarter financial results, assets under management grew to $51 billion. In our wealth management business, AUM growth reflected gross client inflows of nearly $800 million in the second quarter of 2026, while net flows totaled about $700 million. Market appreciation also had a positive impact on AUM, supported by staying the course in more difficult markets and our positioning in technology, energy, and power infrastructure, all benefiting from longer-term secular demand tailwinds.

AUM growth was achieved even as we maintain a significant portion of the portfolio in alternatives, which do not price at quarter end. Our external strategic managers run with low net market exposure, so they tend to have a more muted performance when markets move higher in short bursts, but continue to provide both diversification and downside protection. During the second quarter, one of these three external managers, the Asian Credit and Special Situations strategy, experienced an extraordinary circumstance. Unfortunately, its founder and chief investment officer experienced a sudden and serious health event. Our thoughts are with him, as well as his family and colleagues, and he has our very best wishes for a full recovery.

Following this event, this external manager and his board made the unexpected decision to unwind the fund within a 12-month time horizon. As a result, for the second quarter, we recorded an unrealized investment loss on our stake in the strategy. This was an extraordinary event, unrelated to investment performance, and importantly, our stakes in the 2 other external strategic managers are performing solidly as expected. Turning to the top line, AlTi generated $58 million in total revenue, representing 11% growth compared to the same period of last year. Recurring management and advisory fees totaled $54 million, up 11% year-over-year, and continue to represent the majority of our revenue base, reflecting the stability and recurring nature of our business model.

We're also pleased to report that adjusted EBITDA for the second quarter of 2026 was over $5 million, up 9% compared to the prior year quarter, largely driven by the revenue increase, along with early improvements in our operating expenses, which we expect to accelerate in 2027 as cost controls and vendor rationalization take hold. Finally, with respect to the ongoing strategic review process, the Committee continues its work. As of today, there is nothing further to report. We will provide updates as appropriate. Now with that, I'll turn the call over to our CFO, Pat Keenan, to walk through the financials in more detail.

Patrick Keenan: Thank you, Nancy, and good afternoon, everyone. Assets under management on June 30, 2026, were $51 billion, up 8% year-over-year and 6% from March 31, 2026, driven by strong investment performance and net positive client inflows. In the second quarter of 2026, AlTi generated $58 million of total revenue, representing an 11% increase versus the same period last year. Recurring management and advisory fees totaled $54 million, up 11% year-over-year and 5% sequentially, primarily due to approximately $700 million of net organic growth in AUM in the second quarter of 2026.

Distributions from investments increased 28% year-over-year with outperformance by our external strategic managers, as reflected in higher distributions related to management fees in the European Equity Strategy and the Real Estate Bridge Lending Strategy. As discussed during our last earnings call, the incentive portion of investment distributions tend to be most significant in the first quarter of each year, which accounted for their contribution in the first 3 months of 2026. These distributions can play an important role in diversifying cash flows and contributing to results across different market environments.

Due to the unexpected decision by the Asian Credit and Special Situations manager to unwind the fund within a 12-month time horizon, we anticipate diminishing contributions to AlTi revenues from this fund. For context, this year to date, this strict strategy represented about 75 basis points of AlTi recurring management fees and about 650 basis points of the incentive portion of distributions. Also, as a result of the manager's decision to unwind, we recorded an unrealized investment loss of nearly $19 million on our stake in the fund. Turning to operating expenses, we are beginning to see the early benefits of AlTi's comprehensive effort to streamline the organization, simplify operations, reduce complexity, and improve scalability.

We expect these benefits to accelerate in 2027 as cost controls and vendor rationalization takes hold. During the quarter, reported operating expenses totaled $69 million, improving 12% from $78 million in the year-ago period, with reductions in both compensation and non-compensation expenses. Total compensation and benefits expense improved to $41 million, down 5% from the year-ago period, reflecting our expense reduction efforts. Comp and benefits declined 26% sequentially, given elevated first quarter expenses associated with AlTi's management restructuring earlier this year, as well as our focus on cost controls. Non-compensation expenses improved by 20% from the year-ago period, reflecting progress under our zero-based budgeting initiatives.

This included a 40% reduction in professional fees compared to the second quarter of 2025, as well as lower technology, occupancy, and marketing expenses. These reductions also reflect our focus on cost controls, as did the 8% decrease in non-compensation expenses for the first half of 2026 compared to the same period last year. For the second quarter of 2026, adjusted EBITDA was over $5 million, up 9% from the prior year period, driven by growth in total revenue and recurring management fees, as well as lower operating expenses. Adjusted EBITDA margin was 9.3% in the second quarter of 2026, compared to 9.5% in the prior year period.

Adjusted EBITDA margin of 20% in the first 3 months of 2026 reflect the impact of the incentive fees from investment holdings and external managers, which, as discussed, are primarily a first quarter complement to recurring management fee revenues. Other expense for the quarter was $20 million, including the effect of the unrealized investment loss on the Asian Credit and Special Situations stake, compared to other expense of $5 million in the year-ago period. On a GAAP basis, we reported an operating loss of $11 million, a 58% year-over-year improvement reflecting growth in total revenue and recurring management fees, as well as lower compensation and non-compensation expenses.

We also improved year-to-date GAAP operating loss by 37% in 2026 compared to the first half of 2025, driven largely by revenue growth as well as reductions in non-compensation expenses that resulted from our efficiency initiatives. And finally, on a GAAP basis, we reported a net loss from continuing operations of $31 million for the quarter compared to $26 million in the prior year period. With that, I'll turn it back to Nancy for her closing remarks.

Nancy Curtin: Thank you, Pat. As you've heard today, we continue to make meaningful progress across the areas that we have prioritized for our business. We remain focused on organic growth, thoughtful investment in our wealth management platform, strong and diversifying market gains, and operating efficiency improvement across the organization. We believe the secular trend supporting the growth of the ultra-high net worth market remains firmly intact, and we continue to see increasing demand for the comprehensive advice, family office capabilities, and global perspective that distinguish AlTi in the marketplace. I would like to thank our clients for their trust, our advisers and employees for their commitment, and our shareholders for their continued support.

Now I'll turn the call back to the operator for questions. Thank you.

Operator: [Operator Instructions] Our first question comes from Wilma Burdis with Raymond James.

Wilma Jackson Burdis: Reported operating expenses seem to improve considerably. Can you give us some color on where you are as far as rolling on the ZBB benefits and where should we expect that to trend in the coming quarters?

Nancy Curtin: Wilma, excellent question, and thanks for participating today. Let me turn to Kevin, who's really spearheaded that initiative, but we're really pleased with the beginning results we're seeing this year and the ongoing expense reductions that we think will come through in 2027. Kevin?

Kevin Moran: Thanks, Nancy. Yes, the zero-based budgeting, I think as we talked about on prior calls, is the budgeting methodology that we're using at AlTi. So we've now used it, I think this is the second year that we've used it. We used it for the 2025 and now the 2026 budgeting process. So I think as Nancy and -- as we spoke about on prior calls, we're laser-focused on reducing our cost structure of the business to improve profitability, combine that with revenue growth, which leads us to be really confident about the future of the business.

So we would expect and certainly are very focused on continuing the cost discipline and continuing to drive down all elements of our cost structure, both comp and non-comp. You've seen that in the Q2 numbers.

Wilma Jackson Burdis: And can you talk a little about the net flows in the quarter and how you guys are thinking about organic growth going forward?

Nancy Curtin: So, organic growth is a clear priority for our business, and it was, I think, quite pleasing. It's been a volatile year, to say the least, in markets, etc., but it was quite pleasing to see about $700 million of net flows in the second quarter. That combined with market performance, as I said, led to a very pleasing result. And part of the market performance, I would add, we stayed invested during the more turbulent first quarter. We felt our positioning was rightly aligned for what longer-term clients were looking for, and that bounced back quite nicely. So the combination of positive net flows and reaping the benefits of market performance, I think, characterized quite nicely the second quarter.

Wilma Jackson Burdis: And can you talk about the appetite for further M&A deals and maybe just touch on which geographies would be interesting to AlTi? Following Kontora, does it make sense to expand the European footprint or are domestic opportunities more attractive? Maybe just talk about that.

Nancy Curtin: Thanks, Wilma. We always are open to acquisition opportunities in the core and strategic markets that we think are most attractive. Of course, the United States has been a very successful market for us, and the recent acquisition, Kontora in Germany, has also been really a great foothold to expand our presence there. So we will continue to look opportunistically. It is not something we're trying as a sort of roll-up strategy. That's not what we do. We look strategically for management teams and companies that align from a philosophy, a target client, client-first mentality, and the type of independent, integrated, holistic advice that we provide.

And that's really important that we find those companies, and if we do, in strategic markets that we can integrate them. So nothing to comment on at the moment, but always part of our longer-term strategy.

Wilma Jackson Burdis: Okay, thank you. And then I realize you may not be able to say too much about this, but is there any update on the strategic review? Or how -- just maybe give an update of what you guys are thinking there.

Nancy Curtin: Yes, of course, as you can imagine, as a public company, there's not too much that we can comment on, and we don't comment on rumor and speculation. What I would say is the special committee, as you would expect, will continue to review any and all opportunities that will enhance the value of the company for shareholders, of course, our clients, employees, and the long-term franchise value of the firm. So, we're guided by those principles. The special committee is still in place, but that's really all I can comment on today.

Wilma Jackson Burdis: And then maybe just last one for me. Can you talk a little bit about the event-driven platform and the trends there that you're seeing?

Nancy Curtin: So, on the event-driven side, first of all, I would say that generally our external and hedge fund strategies tend to run with a much lower level of net exposure. So they're not strategies that are going to move with the market going down violently and then going up. So they protected capital quite nicely in the first quarter. But the second quarter, when you see a robust recovery of markets, is really not the environment for those strategies. And [ ARM ], in particular, is going to be very, very deal-specific. It doesn't invest in speculative transactions.

It has only announced deals where there's complexity and a spread that Drew thinks is -- worth the sort of risk-return payoff is appropriate. So I would say a little bit more muted performance, but again, these things can change quite quickly as the M&A environment changes, and often the fourth quarter tends to be a much better quarter generally for hedge fund strategies.

Operator: Okay, thank you. And at this time, we have no further questions. I'd like to hand the call back to Nancy Curtin for closing remarks. Nancy?

Nancy Curtin: I'd like to thank everyone for participating today. We look forward to updating you on our progress in the quarters ahead as we remain laser-focused on organic growth and cost discipline. We appreciate your interest and look forward to speaking with you again next quarter. So thank you, everyone.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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