Good morning, and welcome to the Silvercrest Asset Management Group, Inc. Q1 2025 Earnings Conference Call. All participants will be in listen-only mode. Please note this 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. 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 conference call over to Rick Hough, Chairman and CEO of Silvercrest. Please go ahead.

Good morning, everyone, and welcome to our first quarter 2025 conference call for Silvercrest. We experienced strong new client organic flows of $0.4 billion during the first quarter this year. The new assets under management follow on the significant new client flows of $1.4 billion in the fourth quarter of 2024, or a total of $1.8 billion over the past two quarters in new client accounts. Our first quarter's new client account flow was itself stronger than some recent years in total. Silvercrest's strategic investments continue to promote our growth. The increases during the quarter bode well for future revenue, and we remain highly optimistic about securing more significant organic flows over the course of 2025, as we discussed during our last call. Total AUM did decline during the quarter as a result of highly volatile markets amidst global economic and trade concerns, and our discretionary AUM now stands at $22.7 billion as of the end of the quarter, which is flat year-over-year, and our total AUM was $34.3 billion. We expect continued market volatility to affect our short-term results and top-line revenue. That said, we believe market and economic dislocations present meaningful opportunities for our business. Strategically, we will continue to pursue more initiatives to better highlight Silvercrest in both the institutional and wealth markets. The firm has invested in talent across the firm to drive new growth and successfully transition the business toward our next generation. The new business pipeline remains robust. Silvercrest will continue to monitor and adjust our interim compensation ratio to match important investments in the business as long as we have compelling opportunities to grow the firm and build our return on invested capital. We will keep you informed of our plans and the progress of these investments. We also completed a $12 million stock repurchase program. We will continue to look for opportunities to return capital to or accrete shareholders, especially as we invest in the business. Our strong balance sheet supports ongoing capital returns as well as our growth initiatives. On May 5th, the company declared a quarterly dividend of $0.20 per share of Class A common stock, which will be paid on or about June 20th of this year to stockholders of record. Scott will now cover our financial highlights, and then we'll go to questions.

Thank you, Rick. So as disclosed in our earnings release for the first quarter, discretionary AUM as of March 31st was $22.7 billion and total AUM as of the same period was $35.3 billion. Revenue for the quarter was $31.4 million, and reported consolidated net income for the quarter was $3.9 million. Revenue for the quarter increased year-over-year by $1.1 million or 3.7%, primarily driven by market appreciation during the 12-month period. Expenses for the quarter increased year-over-year by $2.2 million or 9%, primarily driven by increased compensation and benefits expense and general and administrative expenses. Compensation expense for the quarter increased year-over-year by $1.2 million or 6.9%, primarily due to increases in equity-based compensation and salaries and benefits expenses, partially offset by decreases in the accrual for bonuses and a decrease in severance expense. General and administrative expenses increased by $1 million or approximately 14.6%, primarily due to increases in professional fees, portfolio systems expense, recruiting costs, marketing and advertising, and travel and entertainment expenses. Reported net income attributable to Silvercrest or to Class A shareholders for the first quarter was approximately $2.5 million or $0.26 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, non-recurring items, was approximately $6.5 million or 20.7% of revenue for the quarter. 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 $3.9 million for the quarter or $0.29 and $0.27 for adjusted basic and diluted earnings per share, respectively. Looking quickly at the balance sheet, total assets were approximately $159.9 million as of March 31st compared to $194.4 million as of the end of 2024. Cash and cash equivalents were approximately $36.3 million as of March 31st compared to $68.6 million at the end of 2024. Please keep in mind that cash at March 31st is net of the payout of 2024 bonuses. There were no borrowings as of March 31st, and total Class A stockholders' equity was approximately $80 million as of the end of the first quarter of this year. That concludes my remarks. I'll now turn the call over for Q&A.

Thank you, Scott. We're ready to take questions. Thank you.

We will now begin the question-and-answer session. Our first question comes from Sandy Mehta with Evaluate Research. Please go ahead.

Yes, thank you. Good morning. Could you comment and give a little bit more color on the pipeline and what you're seeing for OCI as well as global going forward?

Sure. Thanks, Sandy. Good morning. A couple of broad comments on the pipeline. With regards to OCIO and the pipeline overall, I think I mentioned last quarter, we're in an environment where the nature of searches has changed a lot. It's no longer really an RFP game. It's about cultivating consultant relationships, putting yourself in a position where you're invited to participate in the search. Often, you're getting a call identifying that there is interest in one of our strategies and asking us to participate. We've been working very hard on building those relationships. We've always had very good consultant relationships, Sandy. Domestically, we've been expanding them internationally. Some of the hiring is with regards to client care and business development with those consultants. That said, I mentioned that I'm not going to measure the pipeline going forward as we had in the past. Traditionally, we had a great process of being able to keep shareholders updated on an apples-to-apples basis. But we're beginning to feel that that's not quite credible. So I'm going to speak this morning more about the color of what we're feeling, and I'm happy to talk more about it. Generally speaking, I feel very confident about the pipeline we have in global value in particular. The potential there is absolutely enormous. The number of contacts we have globally is strong. I feel optimistic not only about a very large second seed investment at some point in 2025 but follow-on flows into that strategy. We're about to complete the building of an Australian trust along with potential distribution so that we can take in other assets aside from institutional assets in that strategy. We're working on a UCITS in Europe for that and other strategies at the firm. So I'm quite optimistic. The OCIO pipeline has slowed, lots of activity there, but nothing I would measure strongly. I remain optimistic that those flows will pick back up. Currently, that strategy stands at about $1.8 billion at the firm. Our international value strategies have put up great numbers. There's a lot of good activity around that, and I feel strong about our ability to build those assets. There are quite a few areas of the firm that I feel positively about in terms of our growth looking out over the next two or three years, which should really help. As you would take from my introductory remarks, I have quite a positive tone about what we're seeing. Now, the only negative I would point out is that we had a pullback in AUM due to volatile markets, which overwhelmed good news. It's going to happen at our size; nothing we can do about it. Important to look at what's happening organically, and I feel very strongly that the organic picture looks good. When you have market turmoil, as much as I like the opportunities for the company and what we can do, and we've always performed well in those environments, it also means that asset allocators, similar to investors generally in the high-net-worth space, are taking a pause, thinking carefully about what they're going to do. The effect of this volatility, uncertainty about global trade and the global macro environment, certainly can hurt us short term as it did in the first quarter. Markets have become more constructive since then, thankfully, even though they were down in April to some extent. It also affects the search environment. We're going through a little period of hesitation that we must work through, but that doesn't change my medium to long-term optimistic tone.

And in the global area, your team is now fully built out, and how is the investment performance result? Is that still been quite satisfactory?

Just about fully built out. We're still working on those consultant business relationships that I mentioned. As the assets grow there, there may be some other things we will add, but we've added analysts, business development support, international trading, etc. Yes, we're getting there. I apologize, could you remind me of the second part of your question?

Yes, performance is good?

Performance is outstanding, very, very good, not only against the value benchmark they measure against but against the core benchmark, which interestingly we've been beating. We are entering the market with a great win and potential big pipeline, but we're going in with very strong performance. This performance has been very good, despite the volatile markets. It was not just relative outperformance; we had good absolute performance in that strategy, so quite remarkable.

Okay, great. And it was good to see the buyback. So could you just update us at what price you bought back stock and where are you now in the authorization looking forward on the buyback?

Yes, we're done with the buyback. We authorized $12 million, and we finished it last month. We felt really good about the buyback over the past two months. We noticed a substantial volume uptick in our stock. We were able to affect some block trades, which was part of that higher volume. We've worked closely to identify areas to buy stock back. That execution was successful. We’re in a great position with a strong balance sheet where we can contemplate such a thing. I think it’s a good investment on behalf of shareholders given the potential I see. We will be evaluating that once again since the $12 million buyback is complete.

All right, great. Thank you.

You're welcome, Sandy. Thanks.

Our next question comes from Chris Sakai with Singular Research. Please go ahead.

Good morning, Chris.

Yes, good morning. I just wanted to ask about the global expansion. How are things in Europe and Singapore? Can you add some color as to the AUM there?

Yes. The AUM is a little difficult to quantify, and I’m not going to measure that in our calls, Chris, because we have clients who may be domiciled in South Asia or in Europe, but they may have accounts here in the United States or other offshore places. Given the global nature of families in particular, you'd be hard-pressed to say sometimes whether they’re in New York, Singapore, or Europe. I'll give you more color instead of absolute AUM numbers because we've always had those clients. We see strong opportunity based on the meetings we're having and new clients that we've received. Regarding Europe, on the high-net-worth side, we've always had very significant relationships there, including in the Netherlands, Switzerland, Germany, U.K., and offshore locations in Europe. We also have new relationships, like in Poland, which is a rapidly growing economy. We are excited to be an early mover with some of those families. What we are changing is our ability to proactively market in Europe. Right now, we can only take inbound calls from people expressing interest in Silvercrest. We are establishing a European entity and are working with regulators to be licensed for proactive marketing in the European market. We will be pursuing a U.K. presence as well. This process has been ongoing for about six years. We will have our European license within the next eight to ten months, possibly sooner. In Southeast Asia, we are fully licensed in Singapore and have people there. We will be adding personnel due to the opportunities we see based on meetings with prospective clients. We do have clients in Southeast Asia, including Singapore. My recent travels involved meeting potential partners and clients as well as talent who can bring in AUM. We have taken a steady approach over the years and have been cautious about committing capital until we feel we can succeed.

Okay, great. Thanks for that answer. And just on the share buyback, can you share any color on potentially a new buyback and the amount there and how much that would be?

I think I've given comments that we're seriously looking at it, Chris. There’s a reason I mentioned it earlier. I think at a time with so much opportunity and as we make investments that affect earnings and EBITDA, it makes sense to have the capital to return to shareholders or accrete them while also pursuing investments in the business. I’m optimistic about the growth we see. But we will assess the amount and when that may occur. I'm not ready to announce anything along those lines at this time.

Okay, great. Thanks for the answers.

Thank you, Chris. Appreciate the questions.

Our next question comes from Christopher Marinac with Janney Montgomery Scott. Please go ahead.

Hi, Christopher. Good morning.

Hey, good morning. Thanks for hosting us this morning. Rick and Scott, I want to drill down on expenses and kind of the timing of getting additional revenue versus expenses. It's the operating leverage question. I know you’ve run this quarter-to-quarter?

It's super hard to give clarity to be honest. But yes, go ahead.

But the big picture is to get that positive crank as you think about it year-to-year, perhaps we should think about this year-over-year and last quarter-to-quarter. I'm curious how you think about that in the big picture. It’s a long-term focus and goal for you?

Yes, it really is. I think in the last call I talked about working through this until the end of 2026. The reason is this: let's break it apart. First, we have the investments we've made in the global value equity team. We've built out a lot, but there’s still more to come. The pipeline there is huge, absolutely enormous. I believe the international value team, which is separate from the global value team, is being hurt a bit by the global macro environment and trade environment; as the markets came down, the search environment has slowed a bit. Still, I believe that the opportunity is significant. This team will grow year-over-year. The institutional side, where growth is quicker, will add more leverage to the business. I expect to see increasing margins year-over-year as markets stabilize. I’d love to see our normalized EBITDA margins reclaimed. My expectation is that we will make progress year-over-year, but we’re not going back to high margins without meaningful flows and supportive markets.

Yes, I understand. As long as I've covered you, we see the AUM come in, and your ability to retain that has been very good. Obviously, markets move quarter-to-quarter, but the point is you're bringing that AUM in and the revenue?

Exactly. I will mention we might take a pause. I’m only a month into this quarter, but we may take a pause in the second quarter. The reason is that the search environment is certainly affected by current global macroeconomic conditions. This is a long-term business. Tax payments due in the second quarter can lead to some outflows. I’m hoping for more supportive markets.

Great. Last question from me: there’s been macro conversation recently about international investors pulling capital from the U.S. and going back home. Do you see any of that? Is that an issue for Silvercrest at all?

We can work through that. Most of our assets are U.S.-based, so that’s not a significant issue for us. We do have a global strategy. From what I see, there’s plenty of capital needing to go into those strategies. The United States is the world's largest economy; funds from outside will flow to the U.S. Despite some chatter, I don’t foresee that significantly impacting us. In my recent travels to Asia, I did not observe any significant worry. There’s a lot of opportunity, and we met with interested parties.

Great, Rick. Thank you for the background. I appreciate all the information today.

You're welcome, Christopher. Thanks for the questions.

This concludes our question-and-answer session. I would like to turn the conference back over to Rick Hough for any closing remarks.

Great. Thank you. I appreciate everyone joining us for this first quarter of 2025 call and the good questions. I greatly appreciate our shareholders who have been encouraging regarding our long-term strategy and the investments we're making. I want to make clear that Scott and I are always available to take questions about what we’re up to, and we’re excited about what we are building at the firm. Thanks again, and look forward to talking to everyone soon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.