10q10k10q10k.net

What changed in AlTi Global, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of AlTi Global, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+489 added−565 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-22)

Top changes in AlTi Global, Inc.'s 2024 10-K

489 paragraphs added · 565 removed · 337 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

80 edited+33 added−69 removed48 unchanged
Biggest changeBelow are three examples of such accretive transactions. • Acquired 30% stake in Lugano-based $943 million AUM Wealth manager in 2019 • Expanded into attractive Northern Italian market • Grew assets to $1.2 billion in 2023 • In August 2023, acquired remaining 70% stake. • Acquired Seattle-based $3.4 billion AUM wealth manager in 2017 • Grew scale and West Coast presence in wealth management • Expanded impact investing capabilities • Acquired initial minority stake in London-based European Long Short fund in 2020 • Provided Zebedee immediate distribution access to U.S. and global investors • Investors Choice winner in 2022 • Increased stake by 5% to 12% in 2023 Applying our core principles globally, we aim to build on the success of our business, through: • Organic Growth: We attract clients and grow our AUM by providing exceptional client service and executing our clients’ investment objectives, partnering with our clients to deliver solutions, and accessing impact investing and other innovative investment opportunities on our clients’ behalf. • Selective Accretive Acquisitions: We thoughtfully evaluate global acquisition opportunities that enhance and deepen the services that we can offer our clients and investors.
Biggest changeUnited States East End Advisors Envoi Threshold Group • Acquired New York based independent advisory firm with ~$6 billion AUM in 2024 • Enhanced outsourced OCIO capabilities • Acquired Minneapolis -based UHNW wealth manager with ~$3 billion AUM in 2024 • Expands operations to the Midwest region, fortifying AlTi’s domestic footprint • Acquired Seattle-based ~$3.4 billion AUM wealth manager in 2017 • Grew scale and West Coast presence in wealth management • Expanded impact investing International Albacore Wealth Management AL Wealth Pointwise • Acquired 30% stake in Lugano-based ~$943 million AUM wealth manager in 2019 and remaining stake in 2023 • Expanded Swiss and Italian presence and client-base • Acquired Singapore -based ~$1 billion AUM wealth manager in 2023 • Expanded Asian presence and entered a key investment & philanthropic hub for global and regional families • Acquired 50% stake in London-based wealth manager in 2020 and remaining stake in 2024 when AUM was ~$670 million • Deepened operations in the United Kingdom Applying our core principles globally, we aim to build on the success of our business, through: • Organic Growth: We attract clients and grow our AUM by providing exceptional client service and executing our clients’ investment objectives, partnering with our clients to deliver solutions, and accessing impact investing and other innovative investment opportunities on our clients’ behalf. • Selective Accretive Acquisitions: We thoughtfully evaluate global acquisition opportunities that enhance and deepen the services that we can offer our clients and investors.
The fee typically covers the investment advisory services and basic estate and wealth planning services. The more complex estate and wealth planning services, as well as our Trustee service, and certain extended family office services, are typically billed separately, as a fixed or time-based amount.
The fee typically covers investment advisory services and basic estate and wealth planning services. The more complex estate and wealth planning services, as well as our Trustee service, and certain extended family office services, are typically billed separately, as a fixed or time-based amount.
In addition to the competition on the local level, we face intense competition in the markets in which we operate from national and international wealth managers, ranging from large independent wealth managers, wealth managers that sit within larger financial institutions, to private equity-backed wealth management platforms, 23 which have been relatively recently built through serial acquisitions, driving near-term scale, enhanced scope of investment capabilities, and exposure to new markets.
In addition to competition on the local level, we face intense competition in the markets in which we operate from national and international wealth managers, ranging from large independent wealth managers, wealth managers that sit within larger financial institutions, to private equity-backed wealth management platforms, which have been relatively recently built through serial acquisitions, driving near-term scale, enhanced scope of investment capabilities, and exposure to new markets.
According to Piper Sandler, the industry’s fragmentation is driven by a few key factors, including: • Low barriers to entry: launching a wealth management firm entails relatively low start-up costs with little upfront capital; and • Local focus: wealth management firms are typically locally focused, and expansion beyond a registered investment advisor’s local market can require significant costs and senior management resources.
According to Piper Sandler, the industry’s fragmentation is driven by a few key factors, including: • Low barriers to entry: launching a wealth management firm entails relatively low start-up costs with little upfront capital; and 21 • Local focus: wealth management firms are typically locally focused, and expansion beyond a registered investment advisor’s local market can require significant costs and senior management resources.
As compared to other, more disclosure-oriented U.S. federal securities laws, the Advisers Act, and the Investment Company Act of 1940, as amended (the “Investment Company Act”), together with the SEC’s regulations and interpretations thereunder, are highly 25 restrictive regulatory statutes.
As compared to other, more disclosure-oriented U.S. federal securities laws, the Advisers Act, and the Investment Company Act of 1940, as amended (the “Investment Company Act”), together with the SEC’s regulations and interpretations thereunder, are highly restrictive regulatory statutes.
The vehicles, by way of example, invest in either a single underlying private equity fund or a portfolio of private equity or other alternative assets funds, in each case, which are managed by managers we believe, based upon our thorough manager selection processes, will deliver strong risk adjusted performance, in line with their strategy, for our clients.
The vehicles, by way of example, invest in either a single underlying private equity fund or a portfolio of private equity or other alternative assets funds, in each case, which are managed by access constrained managers we believe, based upon our thorough manager selection processes, will deliver strong risk adjusted performance, in line with their strategy, for our clients.
We expect to continue to deepen our reach and expansion in current markets, and position us for expansion into complementary new markets in the U.S., Europe, and Asia, where we can bolster our client base, as well as enhance our service offering to existing clients across multiple jurisdictions.
We expect to continue to deepen our reach and expansion in current markets, and position ourselves for expansion into complementary new markets in the U.S., Europe, and Asia, where we can bolster our client base, as well as enhance our service offering to existing clients across multiple jurisdictions.
UHNW clients are increasingly focused on transparency and alignment and demand direct investments and impact investing. Clients are attracted to an independent advisory firm that holds similar values and has a curated set of solutions that address their holistic wealth management needs.
UHNW clients are increasingly focused on transparency and alignment and demand direct investments and impact investing. We believe that clients are attracted to an independent advisory firm that holds similar values and has a curated set of solutions that address their holistic wealth management needs.
Competition Wealth Management The wealth management industry is highly fragmented (according to the Investment Advisor Association, in 2022 there were 15,114 registered investment advisors in the United States alone), leading to intense competition on both the regional and local levels.
Competition Wealth & Capital Solutions The wealth management industry is highly fragmented (according to the Investment Advisor Association, in 2022 there were 15,114 registered investment advisors in the United States alone), leading to intense competition on both the regional and local levels.
This is an important differentiator as we are uniquely positioned as a global and independent advisor given most multi-family offices have a regional focus, and the private banks who have a global presence are not able to offer independent advice. Our global distribution platform in our alternatives business also enables us to reach clients across three continents.
This is an important differentiator as we are well-positioned as a global and independent advisor given most multi-family offices have a regional 19 focus, and the private banks who have a global presence are not able to offer independent advice. Our global distribution platform in our alternatives business also enables us to reach clients across three continents.
Through our business lines, we intend to: (1) provide our clients and investors access to unique investment and co-investment opportunities; (2) provide customized service to meet the needs of our clients and their families; (3) invest with intention—taking seriously the modern responsibilities of wealth; (4) innovate continuously to meet the needs and aspirations of our clients and investors; and (5) grow rapidly—both organically and by acquisitions—to build a premiere global financial services firm.
Through our business lines, we intend to: (1) provide our clients and investors access to unique investment and co-investment opportunities; (2) provide customized service to meet the needs of our clients and their families; (3) invest with intention—taking seriously the modern responsibilities of wealth; (4) innovate continuously to meet the needs and aspirations of our clients and investors; and (5) grow rapidly—both organically and by acquisitions—to build a premier global wealth management firm.
We consider our relationship with employees to be vital and are focused on effective attraction, development, retention, compensation and benefits for all employees. This includes workforce and management development, diversity and inclusion initiatives, corporate culture and leadership quality, and morale and development, which are vital to the success 24 of our innovation-driven growth strategy.
We consider our relationship with employees to be vital and are focused on effective attraction, development, retention, compensation and benefits for all employees. This includes workforce and management development, corporate culture and leadership quality, and morale and development, which are vital to the success of our innovation-driven growth strategy.
Large and growing addressable market. AlTi is an institution that is curated to serve the evolving UHNW demographic and meet the growing demand globally for independent advice and access to investment strategies in alternatives.
AlTi is an institution that is curated to serve the evolving UHNW demographic and meet the growing demand globally for independent advice and access to investment strategies in alternatives.
As of December 31, 2023, assets invested in impact strategies accounted for $4.4 billion of our AUM, and are a key area of growth within our wealth management platform.
As of December 31, 2024, assets invested in impact strategies accounted for $4.9 billion of our AUM, and are a key area of growth within our wealth management platform.
We diversify our clients’ portfolios across risk factors, geographies, and asset classes, including private equity, private credit, hedge funds, real estate, infrastructure and other assets through highly experienced, and hard to access, third-party managers.
Investment Management and Advisory Services We diversify our clients’ portfolios across risk factors, geographies, and asset classes, including private equity, private credit, hedge funds, real estate, infrastructure and other assets through highly experienced, and hard to access, third-party managers.
Then in 2015, LJ acquired Salisbury Partners LLP, a UK discretionary investment manager. Over the course of 2018 to 2020, it acquired Iskander in Paris, established a joint venture with Albacore in Lugano, and expanded into 20 Milan. Also in 2019, it merged with London based media, consumer, and technology firm Lepe Partners, creating our merchant banking platform.
Then in 2015, LJ acquired Salisbury Partners LLP, a UK discretionary investment manager. Over the course of 2018 to 2020, it acquired Iskander in Paris, established a joint venture with Albacore in Lugano, and expanded into Milan. Also in 2019, it merged with London based media, consumer, and technology firm Lepe Partners.
Under this banner of impact investing, we offer four distinct approaches to investment of client capital: • Values Alignment: Offering public equity investments which may have either a positive or negative “tilt” based upon client-specific values and interests as reflected in their investment policy statement; • Positive Engagement: Offering public equity investments with active managers who seek to engage in a positive manner with corporate leadership to integrate greater consideration of off-balance sheet factors (corporate governance, various social and/or environmental practices) which are material to long-term corporate financial performance and positive citizenship; • Thematic investing: Private market fund investments within the areas of environmental sustainability and socio-economic development; and • Catalytic: Private market investments in strategies that are non-conforming with our traditional investment approach and may include managers/teams building new track records, implementing innovative investment strategies, operating with evergreen or non-traditional fund structures and offering market rate, near or below market financial returns while seeking to leverage private capital for greater public good.
The use and our definition of this banner term acknowledges the different interpretations and uses, globally, but particularly between the United States and Europe, of the terms “impact investing” and “sustainable finance.” Under this banner of impact investing, we offer four distinct approaches to investment of client capital: • Values Alignment: Offering public equity investments which may have either a positive or negative “tilt” based upon client-specific values and interests as reflected in their investment policy statement; • Positive Engagement: Offering public equity investments with active managers who seek to engage in a positive manner with corporate leadership to integrate greater consideration of off-balance sheet factors (corporate governance, various social and/or environmental practices) which are material to long-term corporate financial performance and positive citizenship; • Thematic investing: Private market fund investments within the areas of environmental sustainability and socio-economic development; and • Catalytic: Private market investments in strategies that are non-conforming with our traditional investment approach and may include managers/teams building new track records, implementing innovative investment strategies, operating with evergreen or non-traditional fund structures and 16 offering market rate, near or below market financial returns while seeking to leverage private capital for greater public good.
Alvarium was established by its founder partners as LJ Capital in 2009, initially with the aim of sourcing direct 19 and co-investments in real estate in the UK and in Central Europe. The firm rebranded as LJ Partnership and underwent a series of acquisitions, before rebranding as Alvarium in 2019.
Alvarium was established by its founder partners as LJ Capital in 2009, initially with the aim of sourcing direct and co-investments in real estate in the UK and in Central Europe. The firm rebranded as LJ Partnership and underwent a series of acquisitions, before rebranding as Alvarium in 2019. In 2024, we welcomed Allianz and Constellation as strategic partners.
We plan to offer private markets and impact investing solutions, which also have significant appeal to UHNW clients, foundations, and institutional investors, and where we are able to leverage our global distribution platform. Select acquisitions and stakes in strategic managers.
We plan to offer private markets and impact investing solutions, which also have significant appeal to UHNW clients, foundations, and institutional investors, and where we are able to leverage our global distribution platform and our strategic partners’ expertise and networks. Select acquisitions.
Some clients in certain jurisdictions may also pay performance fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.
Our incentive fees are not subject to clawback provisions. Wealth management clients in certain jurisdictions may also pay performance or incentive fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.
The External Strategic Manager has more than 25 years of experience investing in performing, stressed, and distressed bonds and loans throughout the Asia Pacific region. We believe their on-the-ground expertise and deep local network makes it well-positioned to capitalize on an under-researched and inefficient market with limited competition and attractive levels of stressed and distressed activity.
They have more than 25 years of experience investing in performing, stressed, and distressed bonds and loans throughout the Asia Pacific region. We believe its on-the-ground expertise and deep local network makes them well-positioned to capitalize on an under-researched and inefficient market with limited competition and attractive levels of stressed and distressed activity.
Our economic interests in the External Strategic Managers are as follows: • Real Estate Bridge Lending Strategy—21% profit share; • European Equities—25% revenue share; and • Asian Credit and Special Situations—12% revenue share 17 Our distributions from investments from European equities and Asian credit and special situations are comprised of a management fee component and, depending on performance, an incentive fee component.
Our economic interests in the External Strategic Managers are as follows: • Real Estate Bridge Lending Strategy—21% profit share; • European Equities—25% revenue share; and • Asian Credit and Special Situations—12% revenue share The External Strategic Managers distributions from investments are all driven by a management fee component while the distributions from European equities and Asian credit and special situations also have an incentive fee 15 component depending on performance.
We have offices located in 21 leading financial centers, in ten counties across the U.S., Europe and Asia which enables us to service our clients across multiple jurisdictions.
We have offices located in 19 leading financial centers, in 8 countries across the U.S., Europe and Asia, which enables us to service our clients across multiple jurisdictions.
We are also planning to offer impact strategies in our alternatives business as they have significant appeal to UHNW clients, foundations, and institutional investor. 22 Record of Constructive Partnership We have the mergers and acquisition experience to complement proven organic growth, having made a number of acquisitions or joint venture investments to date.
We are also planning to offer impact strategies in our alternatives business as they have significant appeal to UHNW clients, foundations, and institutional investors. 20 Strong M&A track record We have the mergers and acquisition experience to complement our established track record of organic growth, having made a number of acquisitions or joint venture investments to date.
Wealth Management Fees Investment management or advisory fees are the primary source of revenue in our Wealth Management segment. These fees are generally calculated on the basis of a percentage of the value of each client’s assets (AUM or AUA) and are charged using either an average daily balance or ending balance, quarterly in arrears.
These fees are generally calculated on the basis of a percentage of the value of each client’s assets (AUM or AUA) and are charged using either an average daily balance or ending balance, quarterly in arrears.
LXi was advised by LRA, and its investment objective is to deliver inflation-protected income and capital growth over the medium-term for its shareholders through investing in a diversified portfolio of UK property that benefits from long-term index-linked leases with institutional-grade tenants. As of December 31, 2023, LXi’s market capitalization was approximately £1.8 billion ($2.3 billion).
LXi was advised by LRA, and its investment objective is to deliver inflation-protected income and capital growth over the medium-term for its shareholders through investing in a diversified portfolio of UK property that benefits from long-term index-linked leases with institutional-grade tenants.
In 1993, TIG launched the current version of the TIG Arbitrage strategy, which has grown from $6 million AUM in 1993 to $2.4 billion AUM as of December 31, 2023. In 2018, TIG launched a new business initiative focused on making growth equity investments in alternative managers.
In total, TIG launched 24 separate fund strategies. In 1993, TIG launched the current version of the TIG Arbitrage strategy, which has grown from $6 million of AUM in 1993 to $1.7 billion of AUM as of December 31, 2024. In 2018, TIG launched a new business initiative focused on making growth equity investments in alternative managers.
Broadly, our revenues fall into four categories: recurring management, advisory, or administration fees; performance or incentive fees; distribution from investments and other income or fees: • Management, advisory, and administration fees are historically more predictable across market conditions than our other revenue sources.
These revenue streams fall broadly into four categories: (i) recurring management, advisory, trustee, or administration fees; (ii) performance or incentive fees; (iii) distributions from investments and (iv) other income or fees: • Management, advisory, trustee, and administration fees are historically more predictable across market conditions than our other revenue sources.
Our focus will be on markets with attractive characteristics including significant market size, low regulatory barriers, and limited competition, where we can leverage our existing footprint. In alternatives, our focus to date has been on liquid alternatives and real estate.
Our focus will be on markets with attractive characteristics including significant market size, low regulatory barriers, and limited competition, where we can leverage our existing footprint.
As of December 31, 2023, approximately 45% of our employees were women. Our Focus on Sustainable Finance and Impact Investing We use the term “impact investing” to describe investment practices seeking to generate environmental and social impacts at a portfolio level.
Our Focus on Sustainable Finance and Impact Investing We use the term “impact investing” to describe investment practices seeking to generate environmental and social impacts at a portfolio level.
Funds Managed by our External Strategic Managers Romspen—Real Estate Bridge Lending Strategy (External Strategic Manager) The External Strategic Manager that operates a real estate bridge lending strategy is based in Toronto and focuses on complex construction, term, and pre-development bridge loans throughout North America. The strategy has approximately $2.2 billion AUA as of December 31, 2023.
Externally Managed Funds Romspen—Real Estate Bridge Lending Strategy This manager is based in Toronto and focuses on complex construction, term, and pre-development bridge loans throughout North America. The strategy has approximately $2.0 billion of AUA as of December 31, 2024.
Other Federal and State Regulators; Self-Regulatory Organizations In addition to SEC regulatory oversight, we are subject to compliance under the Advisers Act, and there are several other regulatory bodies that have or could potentially have jurisdiction to regulate our business activities.
Other Federal and State Regulators; Self-Regulatory Organizations In addition to SEC regulatory oversight, we are subject to compliance under the Advisers Act, and there are several other regulatory bodies that have or could potentially have jurisdiction to regulate our business activities. Besides the United States, we currently have operations in France, Hong Kong, Italy, Portugal, Singapore, Switzerland and United Kingdom.
The management fee component of the distributions is recurring in nature, while the incentive portion is more susceptible to impact from exogenous factors. • Other income or fees include transaction fees from our strategic advisory, corporate advisory, brokerage, and placement agency services.
The management fee component of the distributions is recurring in nature, while the incentive portion, which is performance based, is more susceptible to impact from exogenous factors. 14 • Other income or fees included transaction fees from businesses we have exited such as strategic advisory, corporate advisory, brokerage, and placement agency services.
As a result, performance and incentive fees provide potential upside to our revenues in the future and, in our view, can be highly accretive to our profitability. • Distributions from investments are generated from the equity interests we have in the three External Managers pursuant to which we are entitled to distributions based on the terms of the respective arrangements.
As a result, performance and incentive fees provide potential upside to our revenues in the future and, in our view, can be highly accretive to our profitability. • Distributions from investments are generated from the equity interests we have in three external managers. Distributions from each external manager are recorded upon receipt of the distribution.
Our team uses proprietary methodologies to monitor valuations in each major asset class across dozens of geographies and sectors, and to position portfolios where we believe they will have the best return. As of December 31, 2023, 20% of portfolios were invested in alternative assets.
Our team uses proprietary methodologies to monitor valuations in each major asset class across dozens of geographies and sectors, and to position portfolios where we believe they will have the best return. As of December 31, 2024, the average allocation of client portfolios to alternatives was approximately 27%.
ITEM 1. BUSINESS General AN INTRODUCTION TO ALTI We are a leading independent global wealth and alternatives manager providing entrepreneurs, multi-generational families, institutions, and emerging next-generation leaders with fiduciary capabilities as well as alternative investment strategies and advisory services .
ITEM 1. BUSINESS General AN INTRODUCTION TO ALTI AlTi is a leading independent global wealth manager providing entrepreneurs, multi-generational families, institutions, and emerging next-generation leaders with fiduciary capabilities as well as alternative investment strategies and advisory services. AlTi’s comprehensive offering is underscored by a commitment to impact or values-aligned investing.
Given our track record of executing attractive and strategic transactions in the U.S. and internationally, we are a desirable partner and have identified a pipeline of potential acquisitions across our wealth management and alternatives businesses. Alignment of interest with clients.
Identified pipeline of inorganic growth opportunities . Given our track record of executing attractive and strategic transactions in the U.S. and internationally, we are a desirable partner and have identified a pipeline of potential acquisitions across our wealth management business. Transformative strategic partners.
Its investment objective is to deliver secure inflation-protected income and capital growth by investing in a portfolio of UK homeless shelters. HLIF is advised by SHIA and AFM UK acts as its alternative investment fund manager. Both SHIA and AFM UK are wholly owned subsidiaries of the Company.
Home Long Income Fund Home Long Income Fund is an English open-ended investment company launched in October 2018. Its investment objective is to deliver secure inflation-protected income and capital growth by investing in a portfolio of UK homeless shelters. HLIF is advised by SHIA and AFM UK acts as its alternative investment fund manager.
Members of our senior management team have an average of over 20 years of experience and a strong track record in building successful businesses from the ground up and generating superior returns across market cycles.
Our management team has expertise across investment management, alternative asset management, real estate, financial planning, and trusts and estates as well as impact investing. Members of our senior management team have an average of over 20 years of experience and a strong track record in building successful businesses from the ground up and generating superior returns across market cycles.
To the extent that any of these laws and regulations to which we are subject in the operation of our business or the enforcement of the same become more stringent, or if new laws or regulations are enacted, our financial performance or plans for growth may be adversely impacted.
To the extent that any of these laws and regulations to which we are subject in the operation of our business or the enforcement of the same become more stringent, or if new laws or regulations are enacted, our financial performance or plans for growth may be adversely impacted. 23 United States SEC Regulations We provide investment advisory services through certain entities within our structure that are registered as investment advisers with the SEC pursuant to the Advisers Act.
The External Strategic Manager’s experience with mortgages dates back to the 1950s when the firm operated as a real estate law firm and entered the mortgage lending business in the 1960s. The manager converted its individual mortgage syndication business to a commingled fund in early 2006.
Their experience with mortgages dates back to the 1950s when the firm operated as a real estate law firm and entered the mortgage lending business in the 1960s. The manager converted its individual mortgage syndication 12 business to a commingled fund in early 2006. The strategy’s diversified portfolio primarily consists of first lien mortgages with little to no structural leverage.
We choose to use third-party software for record-keeping, performance calculation, and reporting, using Addepar’s SaaS platform, and we prepare performance reports by using data provided by custodians, investment managers, and independent pricing services. We then interpret and analyze how portfolio performance aligns with a clients’ financial, non-financial and, where relevant, impact goals and values.
We choose to use third-party software for record-keeping, performance calculation, and reporting, using Addepar’s SaaS platform, and we prepare performance reports by using data provided by custodians, investment managers, and independent pricing services.
As of December 31, 2023, we have approximately $4.4 billion of our AUM/AUA dedicated to impact investing in our wealth management business. Through impact investing, we seek to play our part in directing capital to sustainable investments that will aid in the transition to a low carbon economy, as well as investments that are well managed and socially beneficial.
Through both impact and values aligned investing, we seek to play our part in directing capital to sustainable investments that will aid in the transition to a low carbon economy, as well as investments that are well managed and socially beneficial.
These fees are recurring in nature (usually being annual or quarterly fees) and are earned from both our wealth management division from investment management, investment advisory, trusts and administration, and family office services, and also from our fund management activities associated with our internally Managed Funds.
These fees are recurring in nature (usually being annual or quarterly fees) and are earned from investment management, investment advisory, trusts, and family office services.
Non-billable assets are exempt of fees and consist of assets such as cash and cash equivalents in certain agreed upon situations, personally owned real estate, and other designated assets. The fees vary depending upon the level and complexity of client assets and the services being provided.
Billable assets represent the portion of our assets on which we charge fees. Non-billable assets are exempt from fees and consist of assets such as cash and cash equivalents in certain agreed upon situations, personally owned real estate, and other designated assets.
These fees, being performance related, are variable in nature and more susceptible to impact from exogenous factors.
It also includes carried interest payments we earn on co-investment. These fees, being performance related, are variable in nature and more susceptible to impact from exogenous factors.
Arkkan—Asian Credit and Special Situations (External Strategic Manager) The External Strategic Manager has operated an Asia credit and special situations strategy based in Hong Kong since 2013. The strategy has approximately $1.4 billion AUA as of December 31, 2023.
The strategy is market agnostic and runs with a variable net exposure, equally comfortable net long or net short. Arkkan—Asian Credit and Special Situations (External Strategic Manager) This manager has operated an Asia credit and special situations strategy based in Hong Kong since 2013. The strategy has approximately $1.3 billion of AUA as of December 31, 2024.
Diversity, equity, and inclusion are key to our firm’s open culture and long-term success. We recognize the important link between corporate values, employee engagement, and corporate performance. We also strive to foster a supportive environment that cultivates professional growth and development and encourages team members to continuously develop their skills.
Employees As of December 31, 2024, we employed approximately 430 professionals. We recognize the important link between corporate values, employee engagement, and corporate performance. We also strive to foster a supportive environment that cultivates professional growth and development and encourages team members to continuously develop their skills.
The investor base of each strategy is predominantly comprised of institutional investors. Internally Managed Funds Event-Driven Global Merger Arbitrage The TIG Arbitrage strategy is our event-driven strategy based in New York. This strategy, which has approximately $2.4 billion of AUM as of December 31, 2023, focuses on 0-to-30-day events within the merger process.
As a growth-oriented partner, we work with our fund managers on marketing, business development, and strategy. Internally Managed Funds Event-Driven Global Merger Arbitrage The TIG Arbitrage strategy is our event-driven strategy based in New York. This strategy, which has approximately $1.7 billion of AUM as of December 31, 2024, focuses on 0-to-30-day events within the merger process.
The independence of our investment management and advisory services is important to us and our wealth management clients. By independent, we mean that our investment management and advisory services operate independently of any managers or investment product manufacturers (including our own) to which we may allocate or recommend allocating capital.
By independent, we mean that our investment management and advisory services operate independently of any managers or investment product manufacturers (including our own) to which we may allocate or recommend allocating capital. Our clients may opt in to be informed of investment opportunities we are working on in our other business lines, (and some choose to do so).
Besides the United States, we currently have operations in France, Hong Kong, the Isle of Man, Italy, Portugal, Singapore, Switzerland and United Kingdom. As we expand our operations in the United States, Europe, Asia and other jurisdictions, we will become subject to various legislative frameworks in those jurisdictions 26
As we expand our operations in the United States, Europe, Asia and other jurisdictions, we will become subject to various legislative frameworks in those jurisdictions. 24
Such regulation relates to, among other things, antitrust laws, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws, and privacy laws with respect to client and other information, and some of our funds invest in businesses that operate in highly regulated industries.
Such regulation relates to, among other things, antitrust laws, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws, and privacy laws with respect to client and other information, and some of our funds invest in businesses that operate in highly regulated industries. 22 Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many aspects of financial services, including the authority to grant, and in specific circumstances to cancel, permissions to carry on particular activities.
Since inception in 1980, they have supported and helped money managers build their fund businesses, using a centralized platform of services proven to allow portfolio managers to focus exclusively on portfolio management (please refer to timeline below). In total, TIG launched 24 separate fund strategies.
TIG Entities 17 The TIG Entities were founded by seasoned entrepreneurs and over their history they have advised more than 30 financial businesses on their growth strategy. Since inception in 1980, they have supported and helped money managers build their fund businesses, using a centralized platform of services proven to allow portfolio managers to focus exclusively on portfolio management.
Strategic Alternatives Overview Our Strategic Alternatives segment includes our alternatives platform and our public and private real estate business. As of December 31, 2023, our AUM/AUA in this segment was $20.4 billion.
International Real Estate Overview Our International Real Estate segment includes our Real Estate Co-Investment and Real Estate Fund Management businesses. As of December 31, 2024, our AUM/AUA in this segment was $8.4 billion.
Our TIG Arbitrage strategy is managed by our subsidiary TIG Advisors, LLC, an SEC-registered investment advisor, and the External Strategic Managers each focus on capital preservation and uncorrelated returns by managing alpha driven investment strategies that align with the needs of a diverse global investor base.
The strategies of these External Strategic Managers include real estate bridge lending, European long short equities, and Asian credit and special situations. The External Strategic Managers each focus on capital preservation and uncorrelated returns by managing alpha driven investment strategies that align with the needs of a diverse global investor base.
Trusts and Administration Services The trust, corporate, and administration services that we provide within our wealth service offering aim to ensure our clients’ wealth is preserved, protected, distributed as intended, and developed with our investment teams.
We then interpret and analyze how portfolio performance aligns with clients’ financial, non-financial and, where relevant, impact goals and values. 11 Trust Services The trust services that we provide within our U.S. wealth service offering aim to ensure our clients’ wealth is preserved, protected, and distributed as intended.
Depending on the fund, the incentive fee component can range from 15% to 35% , of the net profit/income, in excess of a 10% return hurdle. Co-investment As sponsor of private market direct and co-investment transactions, we generate income from debt and equity structures relating to specified real estate investments or investments in other alternative asset classes.
Depending on the fund, the incentive fee component can range from 15% to 35% of the net profit/income, in excess of a 10% return hurdle. International Real Estate Income Real Estate Fund Advisory Fees We earn management fees in our International Real Estate segment through private real estate fund advisory and recurring fees.
We expect to continue to diligently evaluate and execute on inorganic opportunities which will enhance our platform by broadening our global footprint or enabling us to expand our product offerings. We will also analyze opportunities to increase our ownership stakes in best-in-class managers.
We expect to continue to diligently evaluate and execute inorganic opportunities which will enhance our platform by broadening our global footprint or enabling us to expand our product offerings. We have a proven track record in the wealth management, taking a disciplined approach to our pipeline and acquisition criteria. We focus on the target firm’s profile, footprint, and fit.
In addition, the global demand for alternatives has been growing strongly in recent years and is expected to reach $23 billion in 2026, a CAGR of 11% since 2011 (Prequin). 21 Recurring and diversified revenues.
In addition, the global demand for alternatives has been growing strongly in recent years and is expected to reach $30 trillion in 2030, a CAGR of 10% since 2017 (Preqin). Recurring and diversified revenues. For the year ended December 31, 2024, 96% of our revenue is generated from stable management or advisory fees.
AUA consists of all assets we are responsible for overseeing and reporting on, but we do not necessarily charge fees on all such assets. Billable assets represent the portion of our assets on which we charge fees.
AUM includes the value of all assets managed or supervised by operating partner subsidiaries, affiliates, and joint ventures in which the Company holds either a majority or minority stake. AUA consists of all assets we are responsible for overseeing and reporting on, but we do not necessarily charge fees on all such assets.
Founded in 2001, this External Strategic Manager trades the portfolio actively and is absolute return-oriented with a focus on financials, cyclicals, and mining and minerals. The strategy is market agnostic and runs with a variable net exposure, equally comfortable net long or net short.
Zebedee—European Equities (External Strategic Manager) This manager focused on European equities is based in London. The strategy has approximately $1.8 billion of AUA as of December 31, 2024. Founded in 2001, the manager trades the portfolio actively with absolute return-oriented focus on financials, cyclicals, and mining and minerals.
A list of our services is set out below. • Investments, Financial Planning, and Strategy: • business planning and talent sourcing; • budgeting and growth oversight; and • strategic development and training. 14 • Sales and Marketing: • centralized marketing; • strategic positioning; • product development; • sales planning and execution; • investor relations; • materials oversight; • branding; and • sales channel expertise covering North America, Europe, Middle East, Asia Pacific and Latin America. • Back and Middle Office Infrastructure/Administration: • risk management; • legal and compliance; • treasury management; • collateral management; • technology infrastructure and systems; • middle office operations; • accounting services; • real estate management; • counterparty management; and • human resources.
This includes the sales and marketing services set out below. • Sales and Marketing: • centralized marketing; • strategic positioning; • product development; • sales planning and execution; • investor relations; • materials oversight; • branding; and • sales channel expertise covering North America, Europe, Middle East, Asia Pacific and Latin America.
Added to the recurring nature of these fees, our high client retention rate in our wealth management services, and the long-term nature of our fund management fees, means that these fees are also relatively stable. • Incentive or performance fees are comprised of both carried interest payments we earn on co-investments and annual performance or incentive fees earned in some cases from our investment management and advisory or fund management services associated with our internally managed funds.
The recurring nature of these fees is underpinned by the client retention rate of wealth management services which means that these fees are also relatively stable. • Incentive or performance fees are comprised primarily of annual performance or incentive fees which may be earned by providing investment management and advisory as well as fund management activities.
Strategic Alternatives The investment management industry, encompassing asset management and fund management, is intensely competitive, and we expect it to remain so. We compete globally and on a regional, industry, and asset basis. We face competition both in the pursuit of fund investors and investment opportunities. Generally, our competition varies across business lines, geographies, and financial markets.
International Real Estate The real estate investment management industry is highly competitive, and we expect it to remain so. We compete globally and regionally for both fund investors and investment opportunities, with competition varying across business lines, geographies, and financial markets. We compete for investors based on factors such as investment performance, reputation, service quality, product breadth, and fee structures.
The incentive fees for TIG Arbitrage are calculated using 15% to 20% of the net profit/income. We recognize our incentive fees when it is no longer probable that a significant reversal of revenue will occur. Our incentive fees are not subject to clawback provisions.
Incentive Fees TIG Arbitrage is entitled to receive incentive fees from the assets it manages if certain performance returns have been achieved. These incentive fees range from 15% to 20% of net profits. In compliance with ASC 606, we recognize these fees only when it is probable that a significant revenue reversal will not occur.
Ancillary Fund Management Services We offer both our managers and the External Strategic Managers in which we have made strategic investments a complete platform solution to enable them to autonomously focus on their core investment competency. This includes investments, financial planning and strategy, sales and marketing, and back and middle office infrastructure/administration.
Ancillary Fund Management Services We offer both our manager and the External Strategic Managers in which we have made strategic investments solutions to enhance their growth.
For the year ended December 31, 2023, 77% of our revenue is generated from stable management or advisory fees whether internally or from our External Strategic Managers. In the wealth management business we have a long-tenured, multi-generational client base with a retention rate of 97% since 2019.
In the wealth management business we have a long-tenured, multi-generational client base with a retention rate of 96% since 2020. Our predictable revenue base results in a stable earnings model with attractive growth vectors. Global footprint.
Our business is organized into two business segments: Wealth Management and Strategic Alternatives (formerly known as Asset Management): • we manage or advise approximately $71.4 billion in combined assets as of December 31, 2023; • in our Wealth Management segment, we provide holistic solutions for our wealth management clients through our comprehensive range of wealth management services, including investment management and advisory services, estate and wealth planning, trust and administration services, and extended family office services; and • in our Strategic Alternatives segment, we assist our investors with alternative investments and co-investments by providing access to highly differentiated opportunities in these areas as well as structuring and selecting partners with a proven track record in alternative asset classes, with attractive risk adjusted return characteristics.
The segment also reflects the results of our internally managed event-driven strategy and our stakes in three externally managed alternative investment strategies; • in our International Real Estate segment, we assist our investors with real estate co-investments by providing access to highly differentiated opportunities in these areas as well as structuring and selecting partners with a proven track record in alternative asset classes, with attractive risk adjusted return characteristics.
On February 26, 2024, AFM UK and SHIA served notice to terminate their contracts with HLIF. We are in discussions with a third-party manager to take over the management of HLIF and termination of these contracts will become effective once the transition process has completed.
Both SHIA and AFM UK are wholly owned subsidiaries of the Company. As of December 31, 2024, HLIF had assets under management of approximately $0.3 billion. We are in discussions with a third-party manager to take over the management of HLIF and AFM UK’s and SHIA’s services to HLIF will terminate if the transition completes.
We have a proven track record in the wealth management and alternatives sectors, taking a disciplined approach to our pipeline and acquisition criteria. We focus on the target firm’s profile, footprint, and fit. As an independent platform with long-tenured clients and an extensive suite of services, we are a desirable partner for firms seeking consolidation and growth.
As an independent platform with long-tenured clients and an extensive suite of services, we are a desirable partner for firms seeking consolidation and growth. Expanded client base and deepened existing relationships . We will continue to fortify our client base through exceptional service and innovative solutions.
The equity structures are typically medium to long-term (three to ten years) closed-ended structures with fees normally ranging between 50 and 175 basis points of the equity value committed or drawn. The debt structure terms are generally between 12 and 36 months.
Equity structures typically last three to ten years, with fees between 50 and 175 basis points of committed or drawn equity. Debt structures range from 12 to 36 months. Fees are received monthly, quarterly, or annually. We may earn a share of performance-related entitlements, such as carried interest, if investor return hurdles (8%-15%) are met.
Private market fees include arrangement, retainer, management, advisory, performance, acquisition, promote and other associated fees as well as interest arbitrage for debt structures. Arrangement fees are typically 50 to 100 basis points of equity value contributed into a transaction.
These fees, governed by an investment advisory agreement, are calculated on a sliding scale based on the fund’s net asset value. Real Estate Co-investment Fees As sponsors of private market transactions, we generate income from debt and equity structures, including arrangement, management, advisory, performance, and transaction fees. Arrangement fees range from 50 to 100 basis points of contributed equity.
We have made strategic investments with External Strategic Managers, who manage approximately $5.3 billion of AUM in the aggregate as of December 31, 2023. The strategies of these External Strategic Managers include real estate bridge lending, European long short equities, and Asian credit and special situations.
It is managed by our subsidiary TIG Advisors, LLC, an SEC-registered investment advisor. In addition, we have made strategic investments with External Strategic Managers, who manage approximately $5.1 billion of AUM in the aggregate as of December 31, 2024.
In selecting operating partners, we will look for a demonstrable track record across multiple real estate cycles and a strong ability to source pipeline transactions. Our real estate investment team oversees deal origination, due diligence, documentation, and structuring from inception to exit for a variety of strategies including forward funding, development, income, value-add and planning.
Several strategic options are currently under consideration, and our objective is to finalize a course of action in the near future. Real Estate Co-Investment Real estate co-investment oversees deal origination, documentation, and structuring from inception to exit for a variety of strategies, including development, income, value-add, and planning. Investors are typically HNWIs, single family offices, and institutional investors.
Clients Our wealth management client base includes UHNW individuals, families, single family offices, foundations and endowments globally.
The wealth management client base includes ultra high-net-worth individuals, families, single-family offices, foundations, and endowments globally, while Alternatives Platform clients are typically institutional. Investment management or advisory fees, incentive fees, and distributions from investments are the primary sources of revenue in our Wealth & Capital Solutions segment.
Our U.S. trusts services are provided from Delaware, which is one of the most well-developed trust legal regimes in the United States. 12 We also provide international trust, corporate, and administration services from the Isle of Man and Switzerland. See Note 3 (Business Combinations and Divestitures).
As of December 31, 2024, these services are primarily provided from Delaware, which is one of the most well-developed trust legal regimes in the United States. Our trust services include creating or modifying trust instruments and acting as fiduciary in a full, directed or executor capacity.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees. For additional information concerning the competitive risks that we face, see “Risk Factors” in Item 1A.
Additionally, as institutional investors consolidate their investments among fewer managers, competition is expected to intensify, potentially reducing market inefficiencies our funds seek to exploit. We also face strong competition in attracting and retaining qualified employees, which is critical to our continued success. For additional information concerning the competitive risks that we face, see “Risk Factors” in Item 1A.
Our business is global, with approximately 480 professionals operating in 21 cities in 10 countries across three continents, as of December 31, 2023.
We operate a global business, with approximately 430 professionals operating in 19 cities in 8 countries across three continents as of December 31, 2024. Our strategy seeks to enhance our organic growth through acquisitions and integrations of other wealth and investment management businesses in both our existing and new markets.
OUR LEADERSHIP, CULTURE, AND VALUES Experienced Management Team with Proven Track Record We are led by a team of seasoned executives with diverse experience. Our management team has expertise across investment management, alternative asset management, real estate, financial planning, and trusts and estates as well as impact investing.
Carried interest typically accounts for 10%-20% of returns exceeding these hurdles. We also receive a share of base management fees from co-investments through advisory or management agreements, extending from investment inception to exit. OUR LEADERSHIP, CULTURE, AND VALUES Experienced Management Team with Proven Track Record We are led by a team of seasoned executives with diverse experience.
Transaction fees are generally non-recurring in nature, are typically commission based, and are payable on the successful completion of a transaction. Transactions are also susceptible to impact from exogenous factors. However, as is the case with performance and incentive fees, transaction fees provide potential upside to our revenues and, in our view, can be highly accretive to our profitability.
Transaction fees are generally non-recurring in nature, are typically commission based, and are payable on the successful completion of a transaction. Wealth & Capital Solutions Income Management Fees Investment management or advisory fees are the primary source of revenue in our Wealth & Capital Solutions segment.

… 102 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

154 edited+22 added−96 removed398 unchanged
Biggest changeIf we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed. 30 • If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline. • As a public company, we are subject to additional laws, regulations and stock exchange listing standards, which will impose additional costs on us and may strain our resources and divert our management’s attention. • If we are deemed an “investment company” subject to regulation under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business. • Our quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict. • The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members. • Our ability to raise capital in the future may be limited. • The forecasts of market growth and other projections included in this Annual Report may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, we cannot assure you that our business will grow at a similar rate, if at all. • We are an emerging growth company within the meaning of the Securities Act and we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies; this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. • Our certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Biggest changeIf we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed. • If we are deemed an “investment company” subject to regulation under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business. • We are an emerging growth company within the meaning of the Securities Act and we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies; this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are subject to the fiduciary responsibility provisions of the ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the Code in connection with the management of certain of funds.
We are subject to the fiduciary responsibility provisions of ERISA and the prohibited transaction provisions of ERISA and Section 4975 of the Code in connection with the management of certain of funds.
Our compliance obligations include those relating to state laws, such as the California Consumer Privacy Act (“CCPA”), which provides for enhanced privacy protections for California residents, a private right of action for data breaches and statutory fines and damages for data breaches or other CCPA violations, as well as well as a requirement of “reasonable” cybersecurity.
Our compliance obligations include those relating to state laws, such as the California Consumer Privacy Act (“CCPA”), which provides for enhanced privacy protections for California residents, a private right of action for data breaches and statutory fines and damages for data breaches or other CCPA violations, as well as a requirement of “reasonable” cybersecurity.
The Form PF Amendments would require (i) new “quarterly event” reporting for all private equity fund advisers within 60 days of the end of the fiscal quarter regarding certain trigger events (including adviser-led secondary transactions), (ii) expanded reporting for “large private equity fund advisers,” including reporting on any general partner clawback reporting on any limited partner clawback that is more than 10% of the fund’s capital commitments and additional information on events of default, and (iii) new “current” reporting for “large hedge fund advisers” upon a “trigger event,” including certain extraordinary investments losses that are 20% or more of a fund’s reporting fund aggregate calculated value over a rolling 10 business day period, significant margin and default events, certain operations events with respect to the fund’s critical operations, and events associated with withdrawals and / or redemptions of 50% or more of the fund’s net asset value.
The Form PF Amendments require (i) new “quarterly event” reporting for all private equity fund advisers within 60 days of the end of the fiscal quarter regarding certain trigger events (including adviser-led secondary transactions), (ii) expanded reporting for “large private equity fund advisers,” including reporting on any general partner clawback reporting on any limited partner clawback that is more than 10% of the fund’s capital commitments and additional information on events of default, and (iii) new “current” reporting for “large hedge fund advisers” upon a “trigger event,” including certain extraordinary investments losses that are 20% or more of a fund’s reporting fund aggregate calculated value over a rolling 10 business day period, significant margin and default events, certain operations events with respect to the fund’s critical operations, and events associated with withdrawals and / or redemptions of 50% or more of the fund’s net asset value.
Our international operations carry special financial and business risks, which could include the following: • greater difficulties in managing and staffing foreign operations; • differences between the U.S. and foreign capital markets, such as for accounting, auditing, financial reporting and legal standards, practices and disclosure requirements; • fluctuations in foreign currency exchange rates that could adversely affect our results; • additional costs of complying with, and exposure to liability under, foreign regulatory regimes; • unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; • longer transaction cycles; • higher operating costs; • local labor conditions and regulations; • adverse consequences or restrictions on the repatriation of earnings; • potentially adverse tax consequences, such as trapped foreign losses; • less stable political and economic environments; • terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic or pandemic events that reduce business activity; • cultural and language barriers and the need to adopt different business practices in different geographic areas; and • difficulty collecting fees and, if necessary, enforcing judgments.
Our international operations carry special financial and business risks, which could include the following: • greater difficulties in managing and staffing foreign operations; • differences between the U.S. and foreign capital markets, such as for accounting, auditing, financial reporting and legal standards, practices and disclosure requirements; • fluctuations in foreign currency exchange rates that could adversely affect our results; • additional costs of complying with, and exposure to liability under, foreign regulatory regimes; • changes in governmental policies; • unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; • longer transaction cycles; • higher operating costs; • local labor conditions and regulations; • adverse consequences or restrictions on the repatriation of earnings; 40 • potentially adverse tax consequences, such as trapped foreign losses; • less stable political and economic environments; • terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic or pandemic events that reduce business activity; • cultural and language barriers and the need to adopt different business practices in different geographic areas; and • difficulty collecting fees and, if necessary, enforcing judgments.
While we do not believe that any of the foregoing foreign persons or entities, nor any other foreign person or entity, “controls” us or any of our subsidiaries, CFIUS or another U.S. governmental agency could choose to review the Business Combination or any of our past or proposed transactions involving new or existing foreign investors, even if a filing with CFIUS is or was not required at the time of such transaction.
While we do not believe that any of the foregoing foreign persons or entities, nor any other foreign person or entity, “controls” us or any of our subsidiaries, CFIUS or another U.S. governmental agency could choose to review any of our past or proposed transactions, including the Business Combination, involving new or existing foreign investors, even if a filing with CFIUS is or was not required at the time of such transaction.
The integration of our acquisitions may present material challenges, including, without limitation: • combining leadership teams and corporate cultures; • the diversion of management’s attention from ongoing business concerns and performance shortfalls as a result of the devotion of management’s attention to the integration of a new asset or business; • managing a larger combined business; 41 • maintaining employee morale and retaining key management and other employees, including by offering sufficiently attractive terms of employment; • retaining existing business and operational relationships, and attracting new business and operational relationships; • the possibility of faulty assumptions underlying expectations regarding the integration process; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • managing expense loads and maintaining currently anticipated operating margins given that investment products and services may be different in nature and therefore may require additional personnel and compensation expenses, which expenses may be borne by us, rather than our investment products and services; and • unanticipated issues in integrating information technology, communications and other systems.
The integration of our acquisitions may present material challenges, including, without limitation: • combining leadership teams and corporate cultures; • the diversion of management’s attention from ongoing business concerns and performance shortfalls as a result of the devotion of management’s attention to the integration of a new asset or business; • managing a larger combined business; • maintaining employee morale and retaining key management and other employees, including by offering sufficiently attractive terms of employment; 36 • retaining existing business and operational relationships, and attracting new business and operational relationships; • the possibility of faulty assumptions underlying expectations regarding the integration process; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • managing expense loads and maintaining currently anticipated operating margins given that investment products and services may be different in nature and therefore may require additional personnel and compensation expenses, which expenses may be borne by us, rather than our investment products and services; and • unanticipated issues in integrating information technology, communications and other systems.
To the extent we enter into new lines of business, we will face numerous risks and uncertainties, including risks associated with the possibility that we 47 have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the required investment of capital and other resources and the loss of clients due to the perception that we are no longer focusing on our core business.
To the extent we enter into new lines of business, we will face numerous risks and uncertainties, including risks associated with the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the required investment of capital and other resources and the loss of clients due to the perception that we are no longer focusing on our core business.
With respect to these funds, this means that (1) the application of the fiduciary responsibility standards of ERISA to investments made by such funds, including the requirement of investment prudence and diversification, and (2) certain transactions that we enter into, or may have entered into, on behalf of these funds, in the ordinary course of business, are subject to the prohibited transactions rules under Section 406 of ERISA and Section 4975 of the Code.
With respect to these funds, this means that (1) the application of the fiduciary responsibility standards of ERISA to investments 43 made by such funds, including the requirement of investment prudence and diversification, and (2) certain transactions that we enter into, or may have entered into, on behalf of these funds, in the ordinary course of business, are subject to the prohibited transactions rules under Section 406 of ERISA and Section 4975 of the Code.
In the event it is determined that any investor, or any direct or indirect owner of any investor, is a person identified in any of these laws as a prohibited person, or is otherwise engaged in activities of the type prohibited under these laws, we may be obligated, among other actions to be taken, to withhold distributions of any funds otherwise owing to such investor or to cause such investor’s interests to be cancelled or otherwise redeemed (without the payment of any consideration in respect of those interests).
In the event it is determined that any investor, or any direct or indirect owner of any investor, is a person identified in any of these laws as a prohibited person, or is otherwise engaged in activities of the type prohibited under these laws, we may be obligated, among other actions to be taken, to withhold distributions of any funds otherwise owing 47 to such investor or to cause such investor’s interests to be cancelled or otherwise redeemed (without the payment of any consideration in respect of those interests).
Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as 31 a result, the market price of our Class A Common Stock could decline and you could lose all or part of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties.
Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our Class A Common Stock could decline and you could lose all or part of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties.
Management of these risks can be very complex. These strategies and procedures may fail under some circumstances, particularly if we are 62 confronted with risks that we have underestimated or not identified. Some of our risk evaluation methods depend upon information provided by others and public information regarding markets, clients or other matters that are otherwise accessible by us.
Management of these risks can be very complex. These strategies and procedures may fail under some circumstances, particularly if we are confronted with risks that we have underestimated or not identified. Some of our risk evaluation methods depend upon information provided by others and public information regarding markets, clients or other matters that are otherwise accessible by us.
Failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements, may subject us to litigation and investigations, and could cause us to fail to meet its reporting obligations, any of which could diminish investor confidence, cause a decline in the price of the Class A Common Stock and limit our ability to access capital markets.
Failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements, may subject us to litigation and investigations, and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence, cause a decline in the price of the Class A Common Stock and limit our ability to access capital markets.
As our investment management program is not broadly diversified, we may be uniquely exposed to market, tax, regulatory and other risks affecting the sectors in which we invest. There can be no assurance that we will be able to take actions necessary to mitigate the effect of such risks or otherwise diversify our investment program to minimize such exposure.
As our investment management program is not broadly diversified, we may be uniquely exposed to market, tax, regulatory and other risks affecting the sectors in which we invest. 33 There can be no assurance that we will be able to take actions necessary to mitigate the effect of such risks or otherwise diversify our investment program to minimize such exposure.
Among other things, CFIUS could seek to impose limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our Common Stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things), or CFIUS could require us to divest a portion of the Target Companies.
Among other things, CFIUS could seek to impose 45 limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our Common Stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things), or CFIUS could require us to divest a portion of the Target Companies.
The rule increases regulatory obligations and potential scrutiny and imposes more prescriptive requirements on investment advisers’ marketing activities, including but not limited to prohibitions on advertisements that are misleading or contain material statements that an investment adviser cannot substantiate as well as requirements 54 for performance advertising and the use of placement agent arrangements.
The rule increases regulatory obligations and potential scrutiny and imposes more prescriptive requirements on investment advisers’ marketing activities, including but not limited to prohibitions on advertisements that are misleading or contain material statements that an investment adviser cannot substantiate as well as requirements for performance advertising and the use of placement agent arrangements.
We currently provide or may in the future provide a broad spectrum of financial services, including investment advisory, asset management, capital markets, and idea generation. Because of our size and the variety of 43 investment strategies that we pursue, we may face a higher degree of scrutiny compared with investment managers that are smaller or focus on fewer asset classes.
We currently provide or may in the future provide a broad spectrum of financial services, including investment advisory, asset management, capital markets, and idea generation. Because of our size and the variety of investment strategies that we pursue, we may face a higher degree of scrutiny compared with investment managers that are smaller or focus on fewer asset classes.
Such requirements relate to, among other things, restrictions on entering into transactions with clients, maintaining an effective compliance program, incentive 49 fees, solicitation arrangements, allocation of investments, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an adviser and their advisory clients, as well as general anti-fraud prohibitions.
Such requirements relate to, among other things, restrictions on entering into transactions with clients, maintaining an effective compliance program, incentive fees, solicitation arrangements, allocation of investments, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an adviser and their advisory clients, as well as general anti-fraud prohibitions.
Even though these charges may be non-cash items that would not have an immediate impact on our liquidity, the reporting of charges of this 71 nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate leverage or other covenants to which it may be subject.
Even though these charges may be non-cash items that would not have an immediate impact on our liquidity, the reporting of charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate leverage or other covenants to which it may be subject.
IFR/IFD represents a complete overhaul of “prudential” regulation in the EU. As the application dates for IFR/IFD fall outside the end of the Brexit transition period, the UK is not required to implement the legislation and will instead establish a new Investment Firms Prudential Regime which is intended to achieve similar outcomes to IFD/IFR.
IFR/IFD represents a complete overhaul of “prudential” regulation in the EU. As the application dates for IFR/IFD fall outside the end of the Brexit transition period, the UK is not required to implement the legislation and 44 will instead establish a new Investment Firms Prudential Regime which is intended to achieve similar outcomes to IFD/IFR.
These laws and regulations relate to a number of aspects of our business, including with respect to servicing existing investors, finding new investors, and sourcing new investments, as well as activities by the portfolio companies in our investment portfolio or other controlled investments. Similar laws in non-U.S. jurisdictions, such as EU sanctions or the U.K.
These laws and regulations relate to a number of aspects of our business, including with respect to servicing existing investors, finding new investors, and sourcing new investments, as well as activities by the portfolio companies in our investment portfolio or other controlled investments. 46 Similar laws in non-U.S. jurisdictions, such as EU sanctions or the U.K.
In addition, certain of our funds have key person provisions that are triggered upon the loss of services of one or more specified employees and could, upon the occurrence of such event, 64 provide the investors in these funds with certain rights such as rights providing for the termination or suspension of the funds’ investment periods and/or wind-down of the funds.
In addition, certain of our funds have key person provisions that are triggered upon the loss of services of one or more specified employees and could, upon the occurrence of such event, provide the investors in these funds with certain rights such as rights providing for the termination or suspension of the funds’ investment periods and/or wind-down of the funds.
Any restrictions on the ability of Umbrella’s subsidiaries to make dividends or other distributions to 34 Umbrella would also reduce the cash available to Umbrella to make distributions. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid.
Any restrictions on the ability of Umbrella’s subsidiaries to make dividends or other distributions to Umbrella would also reduce the cash available to Umbrella to make distributions. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid.
Also, in the event of insolvency, liquidation, dissolution, reorganization or 38 bankruptcy of a company in which one or more of our clients hold an investment, holders of securities ranking senior to our client investments would typically be entitled to receive payment in full before distributions could be made in respect of our client investments.
Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which one or more of our clients hold an investment, holders of securities ranking senior to our client investments would typically be entitled to receive payment in full before distributions could be made in respect of our client investments.
Regulatory scrutiny of, or litigation in connection with, conflicts of interest could 44 have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including an inability to raise additional funds, attract new investors or retain existing clients.
Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including an inability to raise additional funds, attract new investors or retain existing clients.
In addition to these added costs and burdens, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A Common Stock, fines, sanctions, other regulatory actions and civil litigation, any of which could negatively affect the price of our Class A Common Stock.
In addition to these added costs and burdens, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A Common Stock, 60 fines, sanctions, other regulatory actions and civil litigation, any of which could negatively affect the price of our Class A Common Stock.
General Risk Factors We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition and its share price, which could cause you to lose some or all of your investment.
General Risk Factors We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition and our share price, which could cause you to lose some or all of your investment.
We intend to cause Umbrella to make ordinary distributions and tax distributions to holders of Umbrella common units on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments we make under the Tax Receivable Agreement and dividends, if any, we declare.
We intend to cause Umbrella to make ordinary distributions and tax distributions to holders of Umbrella common units on a pro rata basis in amounts sufficient to cover all 29 applicable taxes, relevant operating expenses, payments we make under the Tax Receivable Agreement and dividends, if any, we declare.
Additionally, actions brought against us may result in settlements, awards, injunctions, fines and penalties. The outcome of litigation or regulatory action is inherently difficult to predict and could have an adverse effect on our ability to offer some of our products and services.
Additionally, actions brought against us may result in settlements, awards, injunctions, fines and 42 penalties. The outcome of litigation or regulatory action is inherently difficult to predict and could have an adverse effect on our ability to offer some of our products and services.
Costly and time-consuming litigation could be 61 necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could reduce any competitive advantage we have developed and cause us to lose customers or otherwise harm our business.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could reduce any competitive advantage we have developed and cause us to lose customers or otherwise harm our business.
For example, certain of our funds may utilize lines of credit to fund investments. Because interest expense and other costs of borrowings under lines of credit are an expense of the fund, the fund’s net multiple of invested capital may be 37 reduced, as well as the amount of carried interest generated by the fund.
For example, certain of our funds may utilize lines of credit to fund investments. Because interest expense and other costs of borrowings under lines of credit are an expense of the fund, the fund’s net multiple of invested capital may be reduced, as well as the amount of carried interest generated by the fund.
Substantial legal or regulatory liability could have a material adverse effect on our business, financial condition and results of operations or cause significant reputational harm to us, which could seriously harm our business. Our inability to obtain adequate insurance could subject us to additional risk of loss or additional expenses.
Substantial legal or regulatory liability could have a material adverse effect on our business, financial condition and results of operations or cause significant reputational harm to us, which could seriously harm our business. 54 Our inability to obtain adequate insurance could subject us to additional risk of loss or additional expenses.
Even if the markets experience the forecasted growth described in this Annual Report, we may not grow our business at a similar rate, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many 69 risks and uncertainties.
Even if the markets experience the forecasted growth described in this Annual Report, we may not grow our business at a similar rate, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.
Tensions between the United States and China with respect to international trade policy, human rights and relations with Taiwan and Russia may result in the imposition of tariffs, export controls or economic sanctions, the application of which may be extended to Hong Kong.
Tensions between the United States and China with respect to international trade policy, human rights and relations with Taiwan and Russia may result in the imposition of more tariffs, export controls or economic sanctions, the application of which may be extended to Hong Kong.
The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period.
The JOBS 62 Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period.
Any adverse impact caused by the use of leverage by portfolio companies in which we directly or indirectly invest could in turn adversely affect the returns of our funds. Defaults by third-party investors could adversely affect that fund’s operations and performance.
Any adverse impact caused by the use of leverage by portfolio companies in which we directly or indirectly invest could in turn adversely affect the returns of our funds. 32 Defaults by third-party investors could adversely affect that fund’s operations and performance.
Any decreases in the fair value of our investment products and services’ investments could result in future realized or unrealized losses. Higher interest rates could have a material adverse effect on our business and that of our investment products and services’ portfolio companies.
Any decreases in the fair value of our investment products and services’ investments could result in future realized or unrealized losses. 27 Higher interest rates could have a material adverse effect on our business and that of our investment products and services’ portfolio companies.
Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact its stock price.
Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price.
The SEC continues to increase its regulation of the asset management and private equity industries, focusing on the private equity industry’s fees, allocation of expenses to funds, marketing practices, allocation of investment opportunities, disclosures to investors, the allocation of broken-deal expenses and general conflicts of interest disclosures.
The SEC continues to increase its regulation of the asset management and private equity industries, focusing on the private equity industry’s fees, allocation of expenses to funds, including the allocation of broken-deal expenses, marketing practices, allocation of investment opportunities, disclosures to investors, and general conflicts of interest disclosures.
These requirements can lead to increased expenses and exposure to enforcement actions. 53 Financial regulations and changes thereto in the United States could adversely affect our business and the possibility of increased regulatory focus could result in additional burdens and expenses on our business.
These requirements can lead to increased expenses and exposure to enforcement actions. Financial regulations and changes thereto in the United States could adversely affect our business and the possibility of increased regulatory focus could result in additional burdens and expenses on our business.
It is impossible to determine the extent of the impact of any new 48 laws, regulations, initiatives or regulatory guidance that may be proposed or may become law on our business or the markets in which we operate.
It is impossible to determine the extent of the impact of any new laws, regulations, initiatives or regulatory guidance that may be proposed or may become law on our business or the markets in which we operate.
IlWaddi Cayman Holdings (“IlWaddi”) is organized in the Cayman Islands and has its principal place of business in Qatar, and its sole ultimate beneficial owner is a Qatar national, and holds approximately 15.0% of our issued and outstanding Common Stock.
IlWaddi Cayman Holdings is organized in the Cayman Islands and has its principal place of business in Qatar, and its sole ultimate beneficial owner is a Qatar national, and holds approximately 15.0% of our issued and outstanding Common Stock.
Global Goldfield Limited (“GCL”) is organized in and has a principal place of business in Hong Kong, and its sole ultimate beneficial owner is a Hong Kong national, and holds approximately 8.7% of our issued and outstanding Common Stock.
Global Goldfield Limited is organized in and has a principal place of business in Hong Kong, and its sole ultimate beneficial owner is a Hong Kong national, and holds approximately 8.7% of our issued and outstanding Common Stock.
In addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other 52 export control laws, committed by companies in which we or our clients invest or which we or our clients acquire.
In addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other export control laws, committed by companies in which we or our clients invest or which we or our clients acquire.
We have made, and may make in the future strategic investments with certain External Strategic Managers that contribute to our revenues. Depending on the circumstances, in the future we may sell our strategic investments 39 in one or more of the External Strategic Managers.
We have made, and may make in the future strategic investments with certain External Strategic Managers that contribute to our revenues. Depending on the circumstances, in the future we may sell our strategic investments in one or more of the External Strategic Managers.
As a result, in certain circumstances we could make payments under the Tax Receivable Agreement in excess of our actual income or franchise tax savings, which could materially impair our financial condition.
As a 55 result, in certain circumstances we could make payments under the Tax Receivable Agreement in excess of our actual income or franchise tax savings, which could materially impair our financial condition.
Our personnel’s reputation, expertise in investing and risk management and relationships with our clients and third parties on which our funds depend for investment opportunities are each critical elements in operating and expanding our business.
Our personnel’s reputation, expertise in investing and risk management and relationships with our clients and third parties on 56 which our funds depend for investment opportunities are each critical elements in operating and expanding our business.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
These obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
We may be subject to increasing scrutiny from our clients with respect to the societal and environmental impact of investments we make, which may adversely impact our ability to retain clients or to grow our client base and assets under management or assets under advisement, and also may cause us to more likely invest client capital based on societal and environmental factors instead of investing client capital in the investment opportunities with the highest return potential for a particular level of risk.
We may be subject to increasing scrutiny from our clients with respect to the societal and environmental impact of investments we make, which may adversely impact our ability to retain clients or to grow our client base and assets under management or AUA, and also may cause us to more likely invest client capital based on societal and environmental factors instead of investing client capital in the investment opportunities with the highest return potential for a particular level of risk.
Because the techniques used by hackers change frequently and are increasingly complex and sophisticated, and new technologies may not be identified until they are launched 58 against a target, we and our third-party service providers may be unable to anticipate these techniques or detect an incident, assess its severity or impact, react or appropriately respond in a timely manner or implement adequate preventative measures.
Because the techniques used by hackers change frequently and are increasingly complex and sophisticated, and new technologies may not be identified until they are launched 51 against a target, we and our third-party service providers may be unable to anticipate these techniques or detect an incident, assess its severity or impact, react or appropriately respond in a timely manner or implement adequate preventative measures.
The anticipated benefits of future acquisitions that we may pursue may not be realized or may take longer than expected to realize. We may pursue acquisitions of assets or business that are complementary to our business.
The anticipated benefits of future acquisitions that we may pursue may not be realized or may take longer than expected to realize. We may pursue acquisitions of assets or businesses that are complementary to our business.
We also determine, in our sole discretion, the appropriate allocation of investment-related expenses, including broken deal expenses, incurred in respect of unconsummated 42 investments and expenses more generally relating to a particular investment strategy, among our investment products and services, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.
We also determine, in our sole discretion, the appropriate allocation 37 of investment-related expenses, including broken deal expenses, incurred in respect of unconsummated investments and expenses more generally relating to a particular investment strategy, among our investment products and services, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.
Further, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect its relationships with service providers and clients and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to 72 any securities litigation and activist stockholder matters.
Further, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and clients and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters.
In that 59 connection, consent must be explicit, and companies must be in a position to delete information from their global systems permanently if consent were withdrawn. Financial regulators and data protection authorities throughout the EU have broad audit and investigatory powers under the GDPR to probe how personal data is being used and processed.
In that 52 connection, consent must be explicit, and companies must be in a position to delete information from their global systems permanently if consent were withdrawn. Financial regulators and data protection authorities throughout the EU have broad audit and investigatory powers under the GDPR to probe how personal data is being used and processed.
A number of factors serve to increase our competitive risks: • a number of our competitors have greater financial, technical, marketing and other resources and more personnel than we do; • some of our competitors have significant amounts of capital or are expected to raise significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that our investments seek to exploit; • some of our investments may not perform as well as competitors’ funds or other available investment products; • some of our competitors may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Code limit the deductibility of interest expense; • some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities; • some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do; • some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors; • some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do; and 40 • other industry participants may, from time to time, seek to recruit our investment professionals and other employees away from us.
A number of factors serve to increase our competitive risks: • a number of our competitors have greater financial, technical, marketing and other resources and more personnel than we do; 35 • some of our competitors have significant amounts of capital or are expected to raise significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that our investments seek to exploit; • some of our investments may not perform as well as competitors’ funds or other available investment products; • some of our competitors may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Internal Revenue Code of 1986, as amended (the “Code”) limit the deductibility of interest expense; • some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities; • some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do; • some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors; • some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do; and • other industry participants may, from time to time, seek to recruit our investment professionals and other employees away from us.
Several of our directors and executive officers, including each of such persons who is currently a partner and/or officer of Alvarium, are also citizens and/or residents of countries other than the United States.
Several of our directors and executive officers, including each of such persons who is currently a partner and/or officer of AlTi, are also citizens and/or residents of countries other than the United States.
If we fail to meet the expectations of our clients or our investments otherwise experience poor investment performance, whether due to general economic and financial conditions, our investment acumen or otherwise, our ability to retain existing assets under management or advisement and attract new clients could be materially adversely affected and our management fees and/or incentive fees would be reduced.
If we fail to meet the expectations of our clients or our investments otherwise experience poor investment performance, whether due to general economic and financial conditions, our investment acumen or otherwise, our ability to retain existing AUM or advisement and attract new clients could be materially adversely affected and our management fees and/or incentive fees would be reduced.
The European Commission has proposed legislative reforms, which include, without limitation: (a) Regulation 2019/2088 regarding the introduction of transparency and disclosure obligations for investors, funds and asset managers in relation to ESG factors, for which most rules took effect beginning on March 10, 2021; (b) a proposed regulation regarding the introduction of an EU-wide taxonomy of environmentally sustainable activities, which will take effect in a staggered approach following the first phase which came into effect as of January 1, 2022; and (c) amendments to existing regulations including MiFID II and AIFMD to embed ESG requirements.
The European Commission has implemented various legislative reforms, which include, without limitation: (a) Regulation 2019/2088 regarding the introduction of transparency and disclosure obligations for investors, funds and asset managers in relation to ESG factors, for which most rules took effect beginning on March 10, 2021; (b) a regulation regarding the introduction of an EU-wide taxonomy of environmentally sustainable activities, which takes effect in a staggered approach following the first phase which came into effect as of January 1, 2022; and (c) amendments to existing regulations including MiFID II and AIFMD to embed ESG requirements.
Changes to tax laws may also adversely affect our ability to attract and retain key personnel. We may be subject to the excise tax included in the Inflation Reduction Act of 2022 in connection with redemptions of our Class A Common Stock after December 31, 2022.
Changes to tax laws may also adversely affect our ability to attract and retain key personnel. We may be subject to the excise tax included in the Inflation Reduction Act of 2022 in connection with redemptions of our Class A Common Stock.
These rules could impose significant economic sanctions on our business if we or one of the other persons covered by the rules make any prohibited contribution or payment, whether or not material or with an intent to secure an investment from a public pension plan.
These rules could impose significant economic sanctions on our business if we or one of the other persons covered by the rules make any prohibited contribution or payment, whether or not material or with an intent to secure an investment from certain government entities, including a public pension plan.
In the case of a significant change in how the Chinese government treats Hong Kong or its shares, or how China itself evolves from a sovereign risk perspective, there may be risk to the valuation of these shares.
In the case of a significant change in how the Chinese government treats Hong Kong or regulation of its equity markets, or how China itself evolves from a sovereign risk perspective, there may be risk to the valuation of these shares.
An issuer will generally be deemed to be an “investment company” for purposes of the Investment Company Act if, absent an applicable exemption: • it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or • it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. 67 We regard ourselves as a financial services business.
An issuer will generally be deemed to be an “investment company” for purposes of the Investment Company Act if, absent an applicable exemption: • it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or • it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
Poor performance of our investments in the future or terminations of significant client relationships, in each case, resulting in a reduction in assets under management or advisement, could have a materially adverse impact on our results, financial condition or business. The success and growth of our business is dependent upon the performance of our investments.
Poor performance of our investments in the future or terminations of significant client relationships, in each case, resulting in a reduction in AUM or advisement, could have a materially adverse impact on our results, financial condition or business. The success and growth of our business is dependent upon the performance of our investments.
The trading market for our Class A Common Stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. Securities and industry analysts do not currently, and may never, publish research on us.
The trading market for our Class A Common Stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts.
Risks Related to our Business and Industry • We are a holding company and our only material asset is our interest in our subsidiaries, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement (see Note 20 (Commitments and Contingencies)) and pay dividends. • Our revenue is derived from fees correlated to the amount of assets under management and assets under advisement that we have and the performance of our investment strategies and/or products.
Risks Related to our Business and Industry • We are a holding company and our only material asset is our interest in our subsidiaries, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement (see Note 20 (Commitments and Contingencies) to our consolidated financial statements included in this Annual Report) and pay dividends. • Our revenue is derived from fees correlated to the amount of assets under management and assets under advisement that we have and the performance of our investment strategies and/or products.
Our Hong Kong wealth management business represents $0.8 billion in AUM as of December 31, 2023, which represents approximately 1.2% of our AUM and less than 1.0% of revenue for the year ended December 31, 2023. Moreover, more than 99% of our Hong Kong client assets are custodied in locations other than China or Hong Kong.
Our Hong Kong wealth management business represents $1.0 billion in AUM as of December 31, 2024, which represents approximately 1.3% of our AUM and less than 2.7% of revenue for the year ended December 31, 2024. Moreover, more than 99% of our Hong Kong client assets are custodied in locations other than China or Hong Kong.
Certain of our investment products and services may have overlapping investment objectives, including funds that have different fee structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among those funds.
Potential conflicts of interest may arise in the allocation of investment opportunities among funds. Certain of our investment products and services may have overlapping investment objectives, including funds that have different fee structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among those funds.
These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time. We may incur significant legal expenses in defending litigation and responding to the regulatory investigations.
These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time. Significant legal expenses may be incurred in defending litigation and responding to regulatory investigations.
Interest 32 rates, which are subject to the influence of economic conditions generally, both domestic and foreign, to events in the capital markets and also to the monetary and fiscal policies of the United States and its agencies, particularly the FRB.
Interest rates, which are subject to the influence of economic conditions generally, both domestic and foreign, to events in the capital markets and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve.
Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
Risks Related to Being a Public Company Our management team has limited experience managing a public company. Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
The Excise Tax is imposed on the fair market value of the repurchased stock, subject to certain exceptions and adjustments. Because we are a Delaware corporation and our securities trade on Nasdaq, we are a “covered corporation” within the meaning of the Inflation Reduction Act and the Excise Tax may apply to redemptions of our stock after December 31, 2022.
The Excise Tax is imposed on the fair market value of the repurchased stock, subject to certain exceptions and adjustments. Because we are a Delaware corporation and our securities trade on Nasdaq, we are a “covered corporation” within the meaning of the Inflation Reduction Act and the Excise Tax may apply to any future redemptions of our stock.
Furthermore, even if the investment performance of our investments is positive, our business or financial condition could be materially adversely affected if we are unable to attract and retain additional assets under management and assets under advisement consistent with our past experience, industry trends or investor and market expectations.
Furthermore, even if the investment performance of our investments is positive, our business or financial condition could be materially adversely affected if we are unable to attract and retain additional AUM and AUA consistent with our past experience, industry trends or investor and market expectations.
Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
Our management team may not successfully or efficiently manage our compliance with obligations as a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
If our subsidiaries do not have sufficient funds to make distributions, the Company’s ability to declare and pay cash dividends may also be restricted or impaired. Our revenue is derived from fees correlated to the amount of assets under management and assets under advisement that we have and the performance of our investment strategies and/or products.
If our subsidiaries do not have sufficient funds to make distributions, our ability to declare and pay cash dividends may also be restricted or impaired. Our revenue is derived from fees correlated to the amount of AUM and AUA that we have and the performance of our investment strategies and/or products.
In addition, an amended SEC rule and subsequent guidance would, beginning in January 2025, prohibit broker dealers from providing price quotations for certain private debt security offerings unless information about the issuer of these securities is current and publicly available. This rule could affect our ability to trade in certain private debt securities.
In addition, an amended SEC rule and subsequent guidance would, beginning in January 2025, prohibit broker dealers from providing price quotations for certain private debt security offerings unless information about the issuer of these securities is current and publicly available.
Pursuant to the Registration Rights and Lock-Up Agreement and the Sponsor Support Agreement, dated September 19, 2021, by and between the Company, Sponsor, TWMH, the TIG Entities, and Alvarium (the “Sponsor Support Agreement”) after the consummation of the Business Combination and subject to certain exceptions, the Sponsor and certain stockholders receiving shares of Company stock as consideration pursuant to the Business Combination Agreement will be contractually restricted from selling or transferring any of their shares.
Pursuant to the Registration Rights and Lock-Up Agreement and the Sponsor Support Agreement, dated September 19, 2021, by and between the Company, Sponsor, TWMH, the TIG Entities, and Alvarium (the “Sponsor Support Agreement”) subject to certain exceptions, the Sponsor and certain stockholders receiving shares of Company stock as consideration pursuant to the Business Combination Agreement are contractually restricted from selling or transferring a portion of their shares.
As a company with publicly traded securities, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of Nasdaq and other applicable securities laws and regulations.
As a company with publicly traded securities, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of Nasdaq and other applicable securities laws and regulations.
Our failure to comply with applicable laws or regulations could result in fines, suspensions of personnel or other sanctions, including revocation of certain of our subsidiaries’ registrations as investment advisors.
Our failure to comply with applicable laws or regulations could result in fines, suspensions of personnel or other sanctions, including revocation of certain of our subsidiaries’ registrations as investment advisors, recession of contracts or products that we offer.
To the extent an increased share of carried interest and performance-based fees are insufficient to ensure an adequate amount of cash is received by our investment professionals and other key personnel, we may not be able to adequately attract or retain them.
To the extent an increased share of carried interest and performance-based fees are insufficient to ensure an adequate amount of cash is received by our investment professionals and other key personnel, we may not be able to adequately attract or retain them. Risks Related to Geographical Environment Our international operations subject us to numerous risks.
As part of our day-to-day operations outside the United States, we are required to maintain compensation programs, employment policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries. We also must communicate and monitor standards and directives across our global operations.
As part of our day-to-day operations outside the United States, we are required to maintain compensation programs, employment policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries. We also must communicate and monitor standards and directives across our global operations. Changes in governmental policy may adversely affect the profitability of our business.

… 192 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed8 unchanged
Biggest changeFor more information, please consult “ ITEM 1A. RISK FACTORS ”. Cybersecurity Governance Related to Cybersecurity Risks Our Board considers cybersecurity risk as part of its overall risk oversight, and has delegated to the Audit, Finance and Risk Committee (“AFRC”) responsibility for oversight of major risk exposures, including in relation to security, cybersecurity and privacy.
Biggest changeRISK FACTORS.” Cybersecurity Governance Related to Cybersecurity Risks Our Board considers cybersecurity risk as part of its overall risk oversight, and has delegated to the Audit, Finance and Risk Committee (“AFRC”) responsibility for oversight of major risk exposures, including in relation to security, cybersecurity and privacy.
We have not identified any cybersecurity incidents or threats that have materially affected us, including our business strategy, results of 73 operations, or financial condition. However, like other companies in our industry, we and our third-party vendors have from time to time experienced threats and security incidents that could affect our information or systems.
We have not identified any cybersecurity incidents or threats that have materially affected us, including our business strategy, results of operations, or financial condition. However, like other companies in our industry, we and our third-party vendors have from time to time experienced threats and security incidents that could affect our information or systems. For more information, please consult “ITEM 1A.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES Our corporate headquarters, which we lease, is located at 520 Madison Avenue, 26th Floor, New York, NY. Additionally we lease office space in Aspen, Bethesda, Dallas, Geneva, Hong Kong, Isle of Man, Lisbon, London, Lugano, Miami, Milan, New York, Palm Beach, Paris, Portland, San Francisco, Seattle, Singapore, and Wilmington. The Company does not own any real estate.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters, which we lease, is located at 22 Vanderbilt Avenue, 27th Floor, New York, NY. Additionally we lease office space in Bethesda, Dallas, Geneva, Hong Kong, Lisbon, London, Lugano, Miami, Milan, Minneapolis, New York, Palm Beach, Paris, Portland, San Francisco, Seattle, Singapore, Toronto, Wilmington and Zurich. The Company does not own any real estate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeFor additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of AlTi Global, Inc. - Litigation” and Note 20 (Commitments and Contingencies). ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 74 PART II
Biggest changeFor additional information, see 65 “Management’s Discussion and Analysis of Financial Condition and Results of Operations of AlTi Global, Inc. - Litigation” and Note 20 (Commitments and Contingencies) to our consolidated financial statements included in this Annual Report. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 66 PART II
ITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in various legal proceedings, lawsuits, and claims incidental to the conduct of its business, some of which may be material. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.
ITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in various legal proceedings, lawsuits, and claims incidental to the conduct of our business, some of which may be material. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A Common Stock trades on the Nasdaq Capital Market under the symbol “ALTI” since January 4, 2023. Holders As of March 21, 2024, there were 367 holders of record of our Class A Common Stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A Common Stock trades on the Nasdaq Capital Market under the symbol “ALTI.” Holders As of March 14, 2025, there were 351 holders of record of our Class A Common Stock.
The payment of any cash dividends will be within the discretion of the Board at such time. Our ability to declare dividends may also be limited by restrictive covenants pursuant to any debt financing agreements. ITEM 6. [RESERVED] 75
The payment of any cash dividends will be within the discretion of the Board at such time. Our ability to declare dividends may also be limited by restrictive covenants pursuant to any debt financing agreements. ITEM 6. [RESERVED] 67

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

96 edited+83 added−61 removed50 unchanged
Biggest changeThe Company’s reported value of these assets are either the net asset value or the market capitalization of the fund. 84 The tables below present the change in our total AUM/AUA by strategy and product for our alternatives platform for the periods indicated: Alternatives Platform (Dollars in Millions) AUM/AUA at January 1, 2023 Gross Appreciation New Investments Subscriptions Redemptions Distributions AUM/AUA at December 31, 2023 (Successor) Average AUM/AUA TIG Arbitrage $ 3,027 $ 290 $ — $ 769 $ (1,637) $ (67) $ 2,382 $ 2,705 External Strategic Managers: Real Estate Bridge Lending Strategy 2,153 138 — 28 (88) (37) 2,194 2,174 European Equities 1,632 40 — 212 (182) (26) 1,676 1,654 Asian Credit and Special Situation 1,498 30 — 85 (197) (28) 1,388 1,443 External Strategic Managers Subtotal 5,283 208 — 325 (467) (91) 5,258 5,271 Total $ 8,310 $ 498 $ — $ 1,094 $ (2,104) $ (158) $ 7,640 $ 7,976 The table below presents the change in our total AUM/AUA for our Real Estate - Public and Private funds for our Strategic Alternatives segment for the periods indicated: For the Period (Dollars in Millions) As of January 1 – December 31, 2023 (Successor) Beginning Balance: $ 14,130 Change (1,410) AUM/AUA at December 31, 2023* $ 12,720 Average AUM/AUA $ 13,425 * AUA is reported with a one quarter lag for HLIF as management fees are billed on that basis.
Biggest changeThe table below presents the change in our total AUA for the wealth management businesses within the Wealth & Capital Solutions segment for the periods indicated: (Dollars in Millions) For the Year Ended AUA December 31, 2024 December 31, 2023 Beginning Balance: $ 51,036 $ 42,541 Change 9,437 8,495 Ending Balance: $ 60,473 $ 51,036 Average AUA $ 55,755 $ 46,789 Within the Alternatives platform, assets consist of assets managed by TIG Arbitrage (AUM $1.7 billion and $2.4 billion as of December 31, 2024 and December 31, 2023, respectively), and the External Strategic Managers (AUA $5.1 billion and $5.3 billion as of December 31, 2024 and December 31, 2023, respectively). 77 The tables below present the change in our total AUM/AUA by strategy and product for our alternatives platform for the year ended December 31, 2024 and December 31, 2023: Alternatives Platform (Dollars in Millions) AUM/AUA at January 1, 2024 Gross Appreciation New Investments Subscriptions Redemptions Distributions AUM/AUA at December 31, 2024 Average AUM/AUA TIG Arbitrage $ 2,382 $ 14 $ — $ 292 $ (947) $ (22) $ 1,719 $ 2,051 External Strategic Managers: Real Estate Bridge Lending Strategy (1) $ 2,194 $ (141) $ — $ — $ — $ (34) $ 2,019 $ 2,107 European Equities $ 1,676 $ 216 $ — $ 431 $ (418) $ (57) $ 1,848 $ 1,762 Asian Credit and Special Situation $ 1,388 $ 233 $ — $ 67 $ (382) $ (46) $ 1,260 $ 1,324 External Strategic Managers Subtotal $ 5,258 $ 308 $ — $ 498 $ (800) $ (137) $ 5,127 $ 5,193 Total $ 7,640 $ 322 $ — $ 790 $ (1,747) $ (159) $ 6,846 $ 7,243 (Dollars in Millions) AUM/AUA at January 1, 2023 Gross Appreciation New Investments Subscriptions Redemptions Distributions AUM/AUA at December 31, 2023 Average AUM/AUA TIG Arbitrage $ 3,027 $ 290 $ — $ 769 $ (1,637) $ (67) $ 2,382 $ 2,705 External Strategic Managers: Real Estate Bridge Lending Strategy (1) $ 2,153 $ 138 $ — $ 28 $ (88) $ (37) $ 2,194 $ 2,174 European Equities $ 1,632 $ 40 $ — $ 212 $ (182) $ (26) $ 1,676 $ 1,654 Asian Credit and Special Situation $ 1,498 $ 30 $ — $ 85 $ (197) $ (28) $ 1,388 $ 1,443 External Strategic Managers Subtotal $ 5,283 $ 208 $ — $ 325 $ (467) $ (91) $ 5,258 $ 5,271 Total $ 8,310 $ 498 $ — $ 1,094 $ (2,104) $ (158) $ 7,640 $ 7,976 (1) The fair value of this investment is reported on a one-month lag from the fund financial statements due to timing of the information provided by the fund and third-party entity unless information is available on a more timely basis.
Arrangement fees range from 0.5% to 1.75% of the equity value contributed into a transaction and are payable upon close of the deal. The Company also generates brokerage fees which are similar to arrangement fees except that they are generally paid for assisting public companies in raising capital.
Arrangement fees range from 0.5% to 1.75% of the equity value contributed into a transaction and are payable upon close of the deal. The Company also generates 79 brokerage fees which are similar to arrangement fees except that they are generally paid for assisting public companies in raising capital.
In the period from June 30, 2022 to December 31, 2023, the estimated value of its underlying real estate investment portfolio declined by approximately 50%, primarily due to a decrease in the timely collection of rents on the underlying portfolio, but also due to higher interest rates and other macro-economic factors.
In the period from June 30, 2022 to December 31, 2023, the estimated value of its underlying real estate investment portfolio declined by approximately 50%, due to a decrease in the timely collection of rents on the underlying portfolio, but also due to higher interest rates and other macro-economic factors.
Liquidity and Capital Resources Management assesses liquidity in terms of our ability to generate cash to fund operating, investing, and financing activities. Management takes prudent approach to ensure the Company's liquidity will continue to be sufficient for its foreseeable working capital needs, contractual obligations, distribution payments and strategic initiatives.
Liquidity and Capital Resources Management assesses liquidity in terms of our ability to generate cash to fund operating, investing, and financing activities. Management takes a prudent approach to ensure the Company’s liquidity will continue to be sufficient for its foreseeable working capital needs, contractual obligations, distribution payments and strategic initiatives.
We then apply a discount rate that we believe is appropriate given the nature of and expected timing of payments of 94 the liability. A decrease in the discount rate assumption would result in an increase in the fair value estimate of the liability, which would have a correspondingly negative impact on our US GAAP results of operations.
We then apply a discount rate that we believe is appropriate given the nature of and expected timing of payments of the liability. A decrease in the discount rate assumption would result in an increase in the fair value estimate of the liability, which would have a correspondingly negative impact on our US GAAP results of operations.
However, it is possible that the UK FCA may determine that certain breaches have occurred and it may seek to impose financial penalties or other outcomes on one or more group entities, that may potentially be material to the Company. We intend to cooperate fully with the UK FCA as it conducts the investigations.
However, it is possible that the UK FCA may determine that certain breaches have occurred, and it may seek to impose financial penalties or other outcomes on one or more group entities, that may potentially be material. We intend to cooperate fully with the UK FCA as it conducts the investigations.
Amounts payable under the TRA are contingent upon (i) the generation of taxable income over the life of the TRA, (ii) the tax rates in effect as of time periods in which tax benefits are used, and (iii) certain terms governing the rate of interest to be applied to payments under the TRA.
Amounts payable under the TRA are contingent upon (i) the generation of taxable income in the Company over the life of the TRA, (ii) the tax rates in effect as of time periods in which tax benefits are used, and (iii) certain terms governing the rate of interest to be applied to payments under the TRA.
The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a 95 tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized.
The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized.
The fee typically covers the investment advisory services and basic estate and wealth planning services. The more complex estate and wealth planning services, as well as our Trustee service, and certain extended family office services, are typically billed separately, as a fixed or time-based amount.
The fee typically covers investment advisory services and basic estate and wealth planning services. The more complex 69 estate and wealth planning services, as well as our Trustee service, and certain extended family office services, are typically billed separately, as a fixed or time-based amount.
Changes in the estimated fair values of these assets may have a material impact on our results of operations in any given period, as any decreases in these assets have a corresponding negative impact on our US GAAP results of operations in the period in which the changes occur.
Changes in the estimated fair values of these assets may have a material impact on our results of operations in any given period, as any decreases in these assets have a corresponding negative impact on our GAAP results of operations in the period in which the changes occur.
Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum.
Amounts and percentages presented throughout our discussion and analysis of the financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum.
On January 3, 2023, concurrent with the consummation of the Business Combination, the Company entered into a $250.0 million credit facility with a syndicate led by BMO Capital Markets Corp.
On January 3, 2023, concurrent with the consummation of the Business Combination, the Company had entered into a $250.0 million credit facility with a syndicate led by BMO Capital Markets Corp.
Although we have investment responsibility for AUM, we include both billable (assets charged fees) and non-billable assets (assets exempt of fees) in our AUM calculation (e.g., we have agreements with certain clients under which we do not bill on certain securities or cash and cash equivalents held within their portfolio).
Although we have investment responsibility for AUM, we include both billable (assets charged fees) and non-billable assets (assets exempt from fees) in our AUM calculation (e.g., we have agreements with certain clients under which we do not bill on certain securities or cash and cash equivalents held within their portfolio).
Impact of Changes in Accounting on Recent and Future Trends We believe that none of the changes to US GAAP that went into effect during the year ended December 31, 2023, or that have been issued but that we have not yet adopted have substantively impacted our recent trends or are expected to substantively impact our future trends.
Impact of Changes in Accounting on Recent and Future Trends We believe that none of the changes to US GAAP that went into effect during the year ended December 31, 2024, or that have been issued but that we have not yet adopted have substantively impacted our recent trends or are expected to substantively impact our future trends.
AHRA was owned by ARE (another wholly owned subsidiary of the Company) up until December 30, 2022, when it was sold. AlTi was formed on January 3, 2023, through a business combination transaction that included certain legacy Alvarium companies, including AFM UK.
AHRA was owned by ARE (another wholly owned subsidiary of the Company) up until December 30, 2022, when it was sold. AlTi was formed on January 3, 2023, through the Business Combination that included certain legacy Alvarium companies, including AFM UK.
Our judgement when analyzing the status of an entity and whether we consolidate an entity could have a material impact on individual line items within our consolidated financial statements, as a change in our conclusion would have the effect of grossing up the assets, liabilities, revenues and expenses of the entity being evaluated.
Our judgment when analyzing the status of an entity and whether we consolidate an entity could have a material impact on individual line items within our consolidated financial statements, as a change in our conclusion 91 would have the effect of grossing up the assets, liabilities, revenues and expenses of the entity being evaluated.
Future changes in the fair value of the TRA liability will be recognized in earnings. Any future cash savings and related payments under the TRA due to subsequent exchanges of Class B Units for shares of Class A Common Stock would be accounted for separately from the amount related to the Business Combination.
Future changes in the fair value of the TRA liability will be recognized in earnings. Any future cash savings and related payments under the TRA due to subsequent exchanges of Class B Paired Interests for shares of Class A Common Stock would be accounted for separately from the amount related to the Business Combination.
On August 31, 2023, holders of Class B Units exchanged 1,813,248 Class B Paired Interests to the Company, in exchange for shares of Class A Common Stock on a 1:1 basis totaling an amount equal to $7.31 multiplied by the total number of shares of Class A Common Stock received at the time of the transaction.
On August 31, 2023, holders of Class B Units exchanged 1,813,248 Class B Paired Interests with the Company, for shares of Class A Common Stock on a 1:1 basis totaling an amount equal to $7.31 multiplied by the total number of shares of Class A Common Stock received at the time of the transaction.
As of December 31, 2023, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of material loss to be remote. Litigation From time to time, we may be named as a defendant in legal or regulatory actions.
As of December 31, 2024, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of material loss to be remote. 87 Litigation From time to time, we may be named as a defendant in legal or regulatory actions.
Pursuant to the TRA, the Company will pay certain parties to the Business Combination 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of any increase in tax basis of the assets of Alvarium Tiedemann related to the Business Combination.
Pursuant to the TRA, the Company will pay certain parties to the Business Combination 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of any increase in tax basis of the assets of Umbrella related to the Business Combination.
The AWMS Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $16.8 million. The total purchase consideration transferred consists of cash consideration, equity consideration, deferred cash consideration, earn-out consideration, (or AWMS earn-out liability), and the payment of assumed liabilities.
The AWMS Acquisition was accounted for using the acquisition method of accounting and the fair value of the total purchase consideration transferred was $16.8 million. The total purchase consideration transferred includes cash consideration, equity 86 consideration, deferred cash consideration, earn-out consideration, (or AWMS earn-out liability), and the payment of assumed liabilities.
Since the AWMS earn-out liability meets the definition of a derivative, it is recorded at fair value as a derivative liability on the Consolidated Statement of Financial Position and measured at fair value at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value to be recognized in Gain (loss) on earn-out liability in the Consolidated Statement of Operations and in Fair value of earn-out liability in the Consolidated Statement of Cash Flows in the period of change.
Since the AWMS earn-out liability meets the definition of a derivative, it is recorded at fair value as a derivative liability on the Consolidated Statement of Financial Position and measured at fair value at each reporting date in accordance with ASC 820, Fair Value Measuremen t, with changes in fair value to be recognized in Gain (loss) on earnout liabilities in the Consolidated Statement of Operations and in Fair value (gain) loss on earnout liability in the Consolidated Statement of Cash Flows in the period of change.
Certain of our subsidiaries are treated as flow-through entities for federal income tax purposes and, accordingly, are not subject to federal and state income taxes, as such taxes are the responsibility of certain direct and indirect owners of the flow-through entities. However, the flow-through entities are subjected to unincorporated business tax (“UBT”) and other state taxes.
Certain of our subsidiaries are treated as flow-through entities for federal income tax purposes and, accordingly, are not subject to federal and state income taxes, as such taxes are the responsibility of certain direct and indirect owners of the flow-through entities. However, the flow-through entities are subjected to UBT and certain other state taxes.
In light of the relevantly insignificant direct and indirect investments into our products, the likelihood of a reasonable change in our estimation and judgement would likely not result in a change in our conclusions to consolidate or not consolidate any VIEs to which we have exposure.
In light of the relatively insignificant direct and indirect investments into our products, the likelihood of a reasonable change in our estimation and judgment would likely not result in a change in our conclusions to consolidate or not consolidate any VIEs to which we have exposure.
Adjusted EBITDA represents adjusted net income plus (a) interest expense, net, (b) income tax expense, (c) adjusted income tax expense less income tax expense, and (d) depreciation and amortization expense. We use Adjusted Net Income and Adjusted EBITDA as non-US GAAP measures to track our performance and assess our ability to service our borrowings.
Adjusted EBITDA represents adjusted net income plus (a) interest expense, net, (b) income tax expense, (c) adjusted income tax expense less income tax expense, and (d) depreciation and amortization expense. We use Adjusted Net Income and Adjusted EBITDA as non-US GAAP measures to track our performance.
As of December 31, 2023, assuming no material changes in the relevant tax laws and that the Company generates sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain of AlTi’s assets, we expect to pay approximately $17.6 million under the TRA.
As of December 31, 2024, assuming no material changes in the relevant tax laws and that the Company generates sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain of AlTi’s assets, we expect to pay approximately $28.8 million under the TRA.
Non-Comparability of Predecessor Period Our results for the year ended 2022 reflect only the results of TWMH and do not include the results of the TIG Entities, Alvarium, or Cartesian Growth Capital. Therefore, prior period amounts are not comparable to current period.
Non-Comparability of Predecessor Period Our results for the year ended 2022 reflect only the results of TWMH and do not include the results of the TIG Entities, Alvarium, or Cartesian Growth Capital. Therefore, prior period amounts, related to 2022 are not comparable to the amounts presented for 2024 or 2023.
Managing Business Performance and Key Financial Measures Non-US GAAP Financial Measures We use Adjusted Net Income and Adjusted EBITDA as non-US GAAP financial measures. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable US GAAP measure of net income (loss).
Managing Business Performance and Key Financial Measures Non-US GAAP Financial Measures We use Adjusted Net Income and Adjusted EBITDA as non-US GAAP financial measures, which do not have uniform definitions. Adjusted EBITDA is derived from and reconciled to, but not equivalent to, its most directly comparable US GAAP measure of net income (loss).
The exercises and exchanges throughout the period from January 1, 2023 to June 30, 2023 resulted in an increase in Additional Paid-in-Capital amount of $29.5 million. Following the exchanges, none of the Warrants were outstanding as of December 31, 2023.
The exercises and exchanges throughout the period from January 1, 2023 to June 30, 2023 resulted in an increase in Additional paid-in-capital amount of $29.5 million. As of December 31, 2024, none of such Warrants are outstanding.
Distributions from Investments The Company has equity interests in three entities pursuant to which it is entitled to distributions based on the terms of the respective arrangements. Distributions from each investment will be recorded upon receipt of the distribution.
Distributions from Investments The Company has equity interests in External Strategic Managers pursuant to which it is entitled to distributions based on the terms of the respective arrangements. Distributions from each investment will be recorded upon receipt of the distribution.
In February 2024, the UK FCA commenced investigations into the historic performance of certain group entities, in their services to Home REIT and/or HLIF, and whether they breached certain civil or criminal regulatory rules and/or principles.
In February 2024, the UK FCA commenced investigations into the historic performance of certain group entities, in their services to Home REIT and/or HLIF, and whether they breached certain civil or criminal regulatory rules and/or principles. The investigations relate to the historic management of Home REIT and/or HLIF by certain legacy Alvarium companies.
The facility, which has a term of five years and is comprised of a $150.0 million revolving credit facility and a $100 million term loan facility, was to be used to pay down subsidiary debt, to fund growth initiatives and for working capital.
The facility, which had a term of five years and was comprised of a $150.0 million revolving credit facility and a $100.0 million term loan facility, was to be used to pay down subsidiary debt and fund growth initiatives.
Some clients in certain jurisdictions may also pay performance fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.
Our incentive fees are not subject to clawback provisions. Wealth management clients in certain jurisdictions may also pay performance or incentive fees if their portfolio achieves returns in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization and are not accrued prior to being earned.
Business Combination Earn-out Liability and AWMS Earn-out Liability: The fair values of our Business Combination Earn-out Securities liability and our AWMS earn-out liability were determined using various significant unobservable inputs.
Earn-out Liabilities: The fair values of our Business Combination Earn-out Securities liability, our AWMS earn-out liability, our EEA earn-out liability, our Envoi earn-out consideration liability, and our Envoi earn-out growth consideration liability were determined using various significant unobservable inputs.
Our economic interests in the External Strategic Managers are as follows: • Real Estate Bridge Lending Strategy—20.92% profit share; • European Equities—25% revenue share; and • Asian Credit and Special Situations—12% revenue share Our distributions from investments from European equities and Asian credit and special situations are comprised of a management fee component and, depending on performance, an incentive fee component.
Our economic interests in the External Strategic Managers are as follows: • Real Estate Bridge Lending Strategy—21% profit share; • European Equities—25% revenue share; and • Asian Credit and Special Situations—12% revenue share The External Strategic Managers distributions from investments are all driven by a management fee component while the distributions from European equities and Asian credit and special situations also have an incentive fee component depending on performance.
See Note 2 (Summary of Significant Accounting Policies) for additional detail. 92 AWMS Earn-out Liability On August 2, 2023, the Company acquired the remaining 70% of the issued and outstanding ownership and membership interests of AWMS, increasing its interest from 30% to 100%.
See Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included in this Annual Report for additional detail. AWMS Earn-out Liability On August 2, 2023, the Company acquired the remaining 70% of the issued and outstanding ownership and membership interests of AWMS, increasing its interest from 30% to 100%.
These assumptions, estimates, and/or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. Actual results may also differ from our estimates and judgments due to risks and uncertainties and changing circumstances, including uncertainty in the current economic environment due to geopolitical tensions, changes in market conditions, or other relevant factors.
Actual results may also differ from our estimates and judgments due to risks and uncertainties and changing circumstances, including uncertainty in the current economic environment due to geopolitical tensions, changes in market conditions, or other relevant 89 factors.
Wealth Management Fees Investment management or advisory fees are the primary source of revenue in our Wealth Management segment. These fees are generally calculated on the basis of a percentage of the value of each client’s assets (AUM or AUA) and are charged using either an average daily balance or ending balance, quarterly in arrears.
These fees are generally calculated on the basis of a percentage of the value of each client’s assets (AUM or AUA) and are charged using either an average daily balance or ending balance, quarterly in arrears.
These non-US GAAP financial measures supplement and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “Components of Consolidated Results of Income” and are prepared in accordance with US GAAP.
These non-US GAAP financial measures may not be comparable to similarly titled measures used by other companies and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “Components of Consolidated Results of Income” and are prepared in accordance with US GAAP.
Mitigating factors and risk management strategies are employed to address uncertainties and enhance the reliability of our financial disclosures. These disclosures provide stakeholders with insight into the robustness of our valuation methodologies and the degree of uncertainty inherent in our financial reporting process.
Our sensitivity analysis considers a range of potential outcomes and their implications on financial reporting. Mitigating factors and risk management strategies are employed to address uncertainties and enhance the reliability of our financial disclosures. These disclosures provide stakeholders with insight into the robustness of our valuation methodologies and the degree of uncertainty inherent in our financial reporting process.
The earn-out shares are precluded from being considered indexed to the Company’s own stock and are recognized as a liability at fair value with changes in fair value recognized in earnings. As of December 31, 2023, the fair value of the earn-out shares was $62.4 million.
The earn-out shares are precluded from being considered indexed to the Company’s own stock and are recognized as a liability at fair value with changes in fair value recognized in earnings.
Cash Flows For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The following tables and discussion summarize our Consolidated Statement of Cash Flows by activity attributable to AlTi. Negative amounts represent an outflow or use of cash.
As of December 31, 2024, none of the Constellation Warrants have been exercised. 83 Cash Flows For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 The following tables and discussion summarize our Consolidated Statement of Cash Flows by activity attributable to AlTi. Negative amounts represent an outflow or use of cash.
We also believe we are well positioned to capitalize on global market trends and dynamics that we see facing our world as well as the industry, clients, investors, and businesses we serve. Fee Structure Consistent with offering a diverse range of services, we generate a diverse range of revenue streams across our business lines.
We believe that we are well positioned to capitalize on global market trends and dynamics that we see facing our world as well as the industry, clients, investors, and businesses we serve. 68 Fee Structure Our comprehensive range of services generates a diverse array of revenue streams.
As a result, performance and incentive fees provide potential upside to our revenues in the future and, in our view, can be highly accretive to our profitability. • Distributions from investments are generated from the equity interests we have in the three external managers pursuant to which we are entitled to distributions based on the terms of the respective arrangements.
As a result, performance and incentive fees provide potential upside to our revenues in the future and, in our view, can be highly accretive to our profitability. • Distributions from investments are generated from the equity interests we have in three external managers. Distributions from each external manager are recorded upon receipt of the distribution.
The management component of the distributions is recurring in nature, while the incentive portion is more susceptible to impact from exogenous factors. • Other income or fees include transaction fees from our strategic advisory, corporate advisory, brokerage, and placement agency services.
The management fee component of the distributions is recurring in nature, while the incentive portion, which is performance based, is more susceptible to impact from exogenous factors. • Other income or fees included transaction fees from businesses we have exited such as strategic advisory, corporate advisory, brokerage, and placement agency services.
We are not able to estimate how long it might take for the UK FCA to complete such investigations, but it is possible that the investigations may continue for a prolonged period, potentially over several years. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with US GAAP.
We are not able to estimate how long it might take for the UK FCA to complete such investigations, but it is possible that the investigations may continue for a prolonged period, potentially over several years.
The pre-action letter does not provide details of amounts being claimed from any of the potential defendants (whether jointly or severally), and it is not possible at this point in time for us to reliably assess what the quantum of such claims might be, or AFM UK’s and ARE’s potential exposure, though they may potentially be material to the Company.
It is not possible at this point in time for us to reliably assess what the quantum of such claims might be, or AFM UK’s and/or ARE’s potential exposure, though they may potentially be material.
The incentive fees are generally calculated using 15% to 20% of the net profit its customers earn. Incentive fees are generally calculated and recognized when it is probable that there will be no significant reversal.
Incentive Fees The Company is entitled to receive incentive fees if certain targeted returns have been achieved as stipulated in its customer contracts. The incentive fees are generally calculated using 15% to 20% of the net profit its customers earn. Incentive fees are generally calculated and recognized when it is probable that there will be no significant reversal.
If any litigation or other action is commenced against AFM UK and/or ARE, we intend to defend ourselves in any such matters vigorously. However, if any claims were commenced, we would anticipate that such claims may involve complex questions of law and fact and we may incur significant legal expenses in defending such litigation.
Our intent is that any litigation or other action commenced by current and/or former shareholders of Home REIT against AFM UK and/or ARE will be defended vigorously. However, if any claims were commenced, we would anticipate that such claims may involve complex questions of law and fact, and significant legal expenses may be incurred in defending such litigation.
The investigations are focused primarily on whether any false or misleading statements were made in relation to Home REIT and/or HLIF and/or whether these group entries breached other FCA rules and/or principles. The commencement of the investigations does not mean that the UK FCA has determined that any such breaches have occurred.
The investigations are focused primarily on whether any false or misleading statements were made in relation to Home REIT and/or HLIF and/or whether these group entities breached other FCA rules and/or principles.
A high-level summary of these revenue streams is set forth below. Broadly, our revenues fall into four categories: recurring management, advisory, or administration fees; performance or incentive fees; distribution from investments and other income or fees: • Management, advisory, and administration fees are historically more predictable across market conditions than our other revenue sources.
These revenue streams fall broadly into four categories: (i) recurring management, advisory, trustee, or administration fees; (ii) performance or incentive fees; (iii) distributions from investments and (iv) other income or fees: • Management, advisory, trustee, and administration fees are historically more predictable across market conditions than our other revenue sources.
We do not have any off-financial position arrangements that would require us to fund losses or guarantee target returns to clients. Contractual Obligations Tax Receivable Agreement As discussed in Note 20 (Commitments and Contingencies) to our consolidated financial statements included in this Annual Report, we may in the future be required to make payments under the TRA.
Contractual Obligations Tax Receivable Agreement As discussed in Note 20 (Commitments and Contingencies) to our consolidated financial statements included in this Annual Report, we may in the future be required to make payments under the TRA.
Our calculations of AUM and AUA may differ from the calculation methodologies of other wealth managers and, as a result, this measure may not be comparable to similar measures presented by other wealth managers. 83 The table below presents the change in our total AUM for our Wealth Management segment for the periods indicated: (Dollars in Millions) For the Period AUM January 1, 2023 – December 31, 2023 (Successor) January 1, 2022 – December 31, 2022 (Predecessor) Beginning Balance: $ 27,961 $ 21,390 New Clients, net 1,352 1,472 Cash Flow, net 328 (672) Market Performance, net 3,184 (3,769) Acquisitions 1,700 840 Ending Balance: $ 34,525 $ 19,261 Average AUM $ 31,243 $ 20,326 Wealth Management - AUA AUA includes all assets we manage as defined above, oversee, and report on.
Our calculations of AUM and AUA may differ from the calculation methodologies of other wealth managers and, as a result, this measure may not be comparable to similar measures presented by other wealth managers. 76 The table below presents the change in our total AUM for the wealth management businesses within the Wealth & Capital Solutions segment for the periods indicated: (Dollars in Millions) For the Year Ended AUM December 31, 2024 December 31, 2023 Beginning Balance: $ 34,525 $ 27,961 Net client change (1,579) 1,352 Cash Flow, net (1,722) 328 Market Performance, net 3,558 3,184 Assets subject to change in billing methodology (415) — Prior Quarter Adj / Regulation change 31 — Acquisitions 8,693 1,700 Ending Balance: $ 43,091 $ 34,525 Average AUM $ 38,808 $ 31,243 Wealth & Capital Solutions - AUA AUA includes all assets we manage as defined above, oversee, and report on.
We conduct regular assessments for triggering events or changes in circumstances that may necessitate goodwill impairment testing. These disclosures ensure stakeholders understand the methodologies, assumptions, and sensitivities involved in our goodwill impairment testing process. We conduct sensitivity analyses on key inputs and assumptions used in fair value measurements and critical accounting estimates to assess the potential impact on financial results.
We conduct regular assessments for triggering events or changes in circumstances that may necessitate goodwill impairment 90 testing. These disclosures ensure stakeholders understand the methodologies, assumptions, and sensitivities involved in our goodwill impairment testing process.
Non-billable assets are exempt of fees and consist of assets such as cash and cash equivalents in certain agreed upon situations, personally owned real estate, and other designated assets. The fees vary depending upon the level and complexity of client assets and the services being provided.
Billable assets represent the portion of our assets on which we charge fees. Non-billable assets are exempt from fees and consist of assets such as cash and cash equivalents in certain agreed upon situations, personally owned real estate, and other designated assets.
Changes in assumptions, such as discount rates, growth rates, or market multiples, are carefully evaluated to understand their effect on the fair value of assets, liabilities, or reporting units. Our sensitivity analysis considers a range of potential outcomes and their implications on financial reporting.
We conduct sensitivity analyses on key inputs and assumptions used in fair value measurements and critical accounting estimates to assess the potential impact on financial results. Changes in assumptions, such as discount rates, growth rates, or market multiples, are carefully evaluated to understand their effect on the fair value of assets, liabilities, or reporting units.
These fees, being performance related, are variable in nature and more susceptible to impact from exogenous factors.
It also includes carried interest payments we earn on co-investment. These fees, being performance related, are variable in nature and more susceptible to impact from exogenous factors.
These fees are recurring in nature (usually being annual or 76 quarterly fees) and are earned from both our wealth management division from investment management, investment advisory, trusts and administration, and family office services, and also from our fund management activities associated with our internally managed funds.
These fees are recurring in nature (usually being annual or quarterly fees) and are earned from investment management, investment advisory, trusts, and family office services.
Class B Paired Interests may be exchanged for Class A Common Stock on a 1:1 exchange basis. These exchanges are anticipated to be treated as taxable exchanges which may provide an increase in the tax basis of the assets of the Company and therefore provide for additional payments under the TRA.
These future exchanges are anticipated to be treated as taxable exchanges which may provide an increase in the tax basis of the assets of the Company and therefore provide for additional payments under the TRA. TRA liabilities that are generated on account of future exchanges will be recorded under ASC 450, Contingencies .
(n) Represents forgiveness of a promissory note of a certain shareholder of TIH upon the sale of his shares in TIH to TWMH. Operating Metrics We monitor certain operating metrics that are common to the wealth and asset management industry, which are discussed below. AlTi Global, Inc.
Operating Metrics We monitor certain operating metrics that are common to the wealth and asset management industry, which are discussed below. AlTi Global, Inc.
Home REIT is a real estate investment trust company listed on the London Stock Exchange. AFM UK was its alternative investment fund manager (“AIFM”) until August 21, 2023 and AHRA was its investment adviser until June 30, 2023. AFM UK is a wholly owned subsidiary of the Company.
AFM UK was its alternative investment fund manager (“AIFM”) until August 21, 2023 and AHRA was its investment adviser until June 30, 2023. Services are no longer provided by any AlTi companies or any legacy Alvarium companies to Home REIT. AFM UK is a wholly owned subsidiary of the Company.
The customer exchanges consideration to obtain services that are the output of the Company’s ordinary activities, which are investment management services provided to each client account.
The customer exchanges consideration to obtain services that are the output of the Company’s ordinary activities, which are investment management services provided to each client account. Further, none of the scope exceptions under ASC 606-10-15-2 apply to the Management/advisory fees; therefore, they are in the scope of ASC 606.
(j) Represents the amortization of the step-up in equity method investments. (k) Represents reported interest, depreciation, amortization, and tax adjustments of the Company's equity method investments.
(k) Add-back of the amortization of the step-up in equity method investments. (l) Add-back of reported interest, depreciation, amortization, and tax adjustments of the Company’s equity method investments. (m) Add-back of the change in fair value of Preferred stock tranche liability.
AUM: $39.5 billion AUA: $71.4 billion Wealth Management AUM: $34.5 billion AUA: $51.0 billion Strategic Alternatives AUM: $5.0 billion AUA: $20.4 billion Wealth Management - AUM AUM refers to the market value of all assets that we manage, provide discretionary investment advisory services on, and have execution responsibility for.
AUM: $45.1 billion AUA: $75.7 billion Wealth & Capital Solutions AUM: $44.8 billion AUA: $67.3 billion International Real Estate AUM: $0.3 billion AUA: $8.4 billion Wealth & Capital Solutions - AUM AUM refers to the market value of all assets that we manage, provide discretionary investment advisory services on, and have execution responsibility for.
In applying many of these accounting principles, we need to make assumptions, estimates, and/or judgments that affect the reported amounts of assets, liabilities, revenues, and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances.
On March 13, 2025, the settlement amount of $5.1 million was paid. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with US GAAP. In applying many of these accounting principles, we need to make assumptions, estimates, and/or judgments that affect the reported amounts of assets, liabilities, revenues, and expenses in our consolidated financial statements.
Payments under the TRA that are on account of liabilities arising in connection with the Business Combination are revalued at the end of each reporting period with the gain or loss recognized in earnings. 91 In connection with the TRA, certain parties to the Business Combination who received Class B Units in Umbrella have the ability to exchange Class B Units in Umbrella for shares of Class A Common Stock in the Company.
In connection with the TRA, certain parties to the Business Combination who received Class B Units in Umbrella have the ability to exchange Class B Units in Umbrella (along with their paired shares of Class B Common Stock) for shares of Class A Common Stock in the Company on a 1:1 exchange basis.
Depending on the fund, the incentive fee component can range from 15% to 35% of the net profit/income, in excess of a 10% return hurdle. Co-investment As sponsor of private market direct and co-investment transactions, we generate income from debt and equity structures relating to specified real estate investments or investments in other alternative asset classes.
Depending on the fund, the incentive fee component can range from 15% to 35% of the net profit/income, in excess of a 10% return hurdle. International Real Estate Income Real Estate Fund Advisory Fees We earn management fees in our International Real Estate segment through private real estate fund advisory and recurring fees.
On the private real estate side, the more difficult market and interest rate conditions may reduce the ultimate return expected from some of these investments.
On the private real estate side within the International Real Estate segment, the more difficult market and interest rate conditions may reduce the ultimate return expected from some of these investments. It is important to note that these assets are utilized in conjunction with longer-term investment strategies and are not subject to daily market pricing.
On October 6, 2023, a pre-action letter of claim was received by, among others, AFM UK and ARE asserting potential claims against those entities relating to the above matters (a pre-action letter of claim is required to be sent by a claimant to a potential defendant under the Practice Direction on Pre-Action Protocols and Conduct contained in the United Kingdom’s Ministry of Justice Civil Procedure Rules prior to a claimant commencing litigation in the UK).
On October 6, 2023, pre-action steps were commenced by a law firm acting on behalf of a group of current and former shareholders in Home REIT (in the UK, pre-action correspondence is required under the Practice Direction on Pre-Action Protocols and Conduct contained in the United Kingdom’s Ministry of Justice Civil Procedure Rules prior to a claimant commencing litigation).
As of December 31, 2023, the AWMS earn-out liability of $1.1 million is reported in Other liabilities in the Consolidated Statement of Financial Position.
As of December 31, 2024, the fair value of the earn-out share liability was $29.9 million, which is included in Earn-out liabilities, at fair value presented on the Consolidated Statement of Financial Position.
The higher cost of capital environment, rising costs of construction and declining real estate prices are negatively impacting some of the real estate segments in which we operate.
Despite the Federal Reserve’s decision to cut interest rates in 2024, the higher cost of capital environment, ongoing increases in construction costs and generally stagnating real estate prices are negatively impacting some of the real estate segments in which we operate. These declines impact the level of management fees that we earn.
(b) Add-back of non-cash expense related to awards of Class A Common stock (approved pre-transaction). (c) Add-back of transaction expenses related to the Business Combination, including professional fees. (d) Represents the change in fair value of the warrant liability.
(b) Add-back of non-cash expense related to awards of Class A Common stock (approved pre-Business Combination). (c) Add-back of transaction expenses related to the Business Combination, subsequent acquisitions or divestitures, and issuance of preferred and common stock, including compensation arrangements, legal fees, accounting advisory fees, litigation settlements, and M&A-related audit fees among others.
(b) Add-back of non-cash expense related to awards of Class A Common stock (approved pre-transaction). (c) Add-back of transaction expenses related to the Business Combination, including professional fees. (d) Represents the change in fair value of the warrant liability.
(b) Add-back of non-cash expense related to awards of Class A Common stock (approved pre-Business Combination). (c) Add-back of transaction expenses related to the Business Combination, subsequent acquisitions or divestitures, and issuance of preferred and common stock, including compensation arrangements, legal fees, accounting advisory fees, litigation settlements, and M&A-related audit fees among others.
AUA consists of all assets we are responsible for overseeing and reporting on, but we do not necessarily charge fees on all such assets. Billable assets represent the portion of our assets on which we charge fees.
AUM includes the value of all assets managed or supervised by operating partner subsidiaries, affiliates, and joint ventures in which the Company holds either a majority or minority stake. AUA consists of all assets we are responsible for overseeing and reporting on, but we do not necessarily charge fees on all such assets.
For the specific components and calculations of these non-US GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with US GAAP, see “Reconciliation of Consolidated US GAAP Financial Measures to Certain Non-US GAAP Measures.” 81 The following tables present the non-US GAAP financial measures for the periods indicated: For the Period Favorable (Unfavorable) (Dollars in Thousands) January 1, 2023 – December 31, 2023 (Successor) January 1, 2022 – December 31, 2022 (Predecessor) $ Change Revenues Management/Advisory fees $ 184,824 $ 76,872 $ 107,952 Incentive fees 43,377 — 43,377 Distributions from investments 17,185 — 17,185 Other income/fees 5,494 — 5,494 Total Revenues 250,880 76,872 174,008 Net loss (305,803) (5,998) (299,805) Interest expense 14,501 427 14,074 Taxes (10,534) 527 (11,061) Depreciation & Amortization 17,039 2,339 14,700 EBITDA Reported (284,797) (2,705) (282,092) Stock based compensation (a) 21,450 4,223 17,227 Stock based compensation - Legacy (b) 24,697 — 24,697 Transaction expenses (c) 42,825 9,110 33,715 Change in fair value of warrant liability (d) 12,866 — 12,866 Change in fair value of gains on investments (e) (4,451) (247) (4,204) Change in fair value of earn-out liability (f) (31,126) — (31,126) Organization streamlining cost (g) 12,076 — 12,076 Impairment (non-cash) (h) 73,594 — 73,594 Impairment goodwill (i) 153,589 — 153,589 Losses on EMI/Carried Interest (non-cash) (j) 5,017 — 5,017 EMI Adjustments (Interest, Depreciation, Taxes & Amortization) (k) 2,889 — 2,889 Holbein compensatory earn-in (l) — 1,858 (1,858) TWMH Partner's payout right (m) — 3,662 (3,662) TIH Share Purchase extinguishment of debt (n) — 1,019 (1,019) Adjusted EBITDA $ 28,629 $ 16,920 $ 11,709 (a) Add-back of non-cash expense related to awards of Class A Common stock (approved post-transaction).
For the specific components and calculations of these non-US GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with US GAAP, see “Reconciliation of Consolidated US GAAP Financial Measures to Certain Non-US GAAP Measures.” 72 The following table presents the non-US GAAP financial measures for the periods indicated: For the Year Ended Favorable (Unfavorable) (Dollars in Thousands) December 31, 2024 December 31, 2023 $ Change Revenues Management/advisory fees $ 190,455 $ 180,861 $ 9,594 Incentive fees 3,256 43,377 (40,121) Distributions from investments 12,304 17,185 (4,881) Other income/fees 920 5,494 (4,574) Total Revenues 206,935 246,917 (39,982) Net income (loss) (174,305) (311,215) 136,910 Interest expense 22,146 14,501 7,645 Income tax expense (benefit) (21,133) (10,534) (10,599) Depreciation & Amortization 14,552 17,039 (2,487) EBITDA Reported (158,740) (290,209) 131,469 Stock based compensation (a) 24,215 25,225 (1,010) Stock based compensation - Legacy (b) (77) 24,697 (24,774) Transaction expenses (c) 40,368 43,597 (3,229) Change in fair value of warrant liabilities (d) — 12,866 (12,866) Change in fair value on investments and non-recurring realized gain/losses on sales (e) 5,573 (4,684) 10,257 Change in fair value of earnout liabilities (f) (30,727) (31,126) 399 Change in fair value of TRA liability (g) (3,855) 233 (4,088) Organization streamlining cost (h) 18,202 12,076 6,126 Impairment (non-cash) (i) 53,390 73,594 (20,204) Impairment goodwill (j) 69,724 153,859 (84,135) Losses on EMI/Carried Interest (non-cash) (k) (3,292) 5,017 (8,309) EMI Adjustments (Interest, Depreciation, Taxes & Amortization) (l) 1,619 2,889 (1,270) Change in fair value of Preferred stock tranche liability (m) (600) — (600) Adjusted EBITDA $ 15,800 $ 28,034 $ (12,234) (a) Add-back of non-cash expense related to awards of Class A Common stock (approved post-Business Combination).
Additionally, we used approximately $4.2 million to purchase shares issued as compensation and received $5.8 million from the exercise of warrants. Future Sources and Uses of Liquidity In the normal course of business, we may engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications, and potential contingent repayment obligations.
Future Sources and Uses of Liquidity In the normal course of business, we may engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications, and potential contingent repayment obligations. We do not have any off-financial position arrangements that would require us to fund losses or guarantee target returns to clients.
Added to the recurring nature of these fees, our high client retention rate in our wealth management services, and the long-term nature of our fund management fees, means that these fees are also relatively stable. • Incentive or performance fees are comprised of both carried interest payments we earn on co-investments and annual performance or incentive fees earned in some cases from our investment management and advisory or fund management services associated with our internally managed funds.
The recurring nature of these fees is underpinned by the client retention rate of wealth management services which means that these fees are also relatively stable. • Incentive or performance fees are comprised primarily of annual performance or incentive fees which may be earned by providing investment management and advisory as well as fund management activities.
Our operating net cash outflow of $81.7 million for the year ended December 31, 2023 was driven by the payment of fees related to the business combination. the payout of 2022 incentive compensation and other operating expenses.
Our net operating cash outflow of $81.7 million for the year ended December 31, 2023, primarily reflects the Company’s net operating loss for the period, as operating expenses exceeded revenues.
The incentive fees for TIG Arbitrage are calculated using 15% to 20% of the net profit/income. We recognize our incentive fees when it is no longer probable that a significant reversal of revenue will occur. Our incentive fees are not subject to clawback provisions.
Incentive Fees TIG Arbitrage is entitled to receive incentive fees from the assets it manages if certain performance returns have been achieved. These incentive fees range from 15% to 20% of net profits. In compliance with ASC 606, we recognize these fees only when it is probable that a significant revenue reversal will not occur.
These expenses were partially offset by a $31.1 million gain related to the change in fair value of earn-out liabilities as a result of share price changes. Taxes The Company's effective tax rate was 3.3% for year ended December 31, 2023 compared to (9.6)% for the year ended December 31, 2022.
These year over year increases in Other income were partially offset by higher interest expense, totaling $7.6 million in the current year period. Taxes The Company’s effective tax rate was 10.8% for the year ended December 31, 2024 compared to 3.3% for year ended December 31, 2023.

… 160 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

0 edited+14 added−2 removed0 unchanged
Removed
Quantitative and Qualitative Disclosures About Market Risk Under SEC rules and guidance, an issuer that no longer qualifies as a smaller reporting company at the determination date (the last day of the second fiscal quarter of such issuer) may continue to use the scaled disclosures permitted for a smaller reporting company through its annual report on Form 10-K and begin providing non-scaled larger company disclosure in the first Form 10-Q of the next fiscal year.
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk In the normal course of business as a wealth management advisor, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including market risk, credit and counterparty risk, liquidity risk, and exchange rate risk.
Removed
Although we are filing as an accelerated filer, we are allowed to continue reporting as a smaller reporting company in this Form 10-K. As such, we are not required to provide information under this Item. 96
Added
Market Risk Our revenue is predominantly derived from investment management or advisory fees, incentive fees, and distributions from investments. Management fees are generally calculated based on a percentage of the value of billable AUM or AUA (as applicable), while incentive fees are driven by the underlying performance of managed portfolios.
Added
The market price of investments may significantly fluctuate during the period of investment and should their value decline, our fees may decline accordingly. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets.
Added
The value of an investment may decline due to general market conditions, which are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates, or adverse investor sentiment generally.
Added
It may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.
Added
The impact of changes in market risk on client specific liquidity or overall financial position, may result in clients changing their asset holdings, including increasing or decreasing the non-billable portion of their asset portfolios. Such changes will also impact our fees.
Added
Credit Risk and Counterparty Risk We are party to agreements where we provide services, and such transactions contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the counterparty to make payment or otherwise perform.
Added
We generally endeavor to minimize our risk of exposure through reviews of the financial condition of new clients and through collection of fees directly from client portfolios. For clients that generate fees from carried interest and/or preferred return, we periodically review the receivables for collectability and will make appropriate provision for credit losses, should circumstances warrant.
Added
Additionally, our ability to secure credit from financial institutions and other lenders may be uncertain due to market conditions, and under certain circumstances we may not be able to access financing.
Added
Liquidity Risk See the disclosures contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations of AlTi Global, Inc. – Liquidity and Capital Resources” for a discussion of our liquidity risk. 92 Exchange Rate Risk We and our funds hold investments that are denominated in foreign currencies that may be affected by movements in the rate of exchange between those currencies and the U.S. dollar.
Added
Movements in the exchange rate between currencies impact the management fees, carried interest and incentive fees earned by funds with fee paying AUM denominated in foreign currencies as well as by funds with fee paying AUM denominated in U.S. dollars that hold investments denominated in foreign currencies.
Added
Additionally, movements in the exchange rate impact operating expenses for our global offices that transact in foreign currencies and the revaluation of assets and liabilities denominated in non-functional currencies, including cash balances and investments.
Added
We monitor our exposure to exchange rate risks in the course of our regular operating activities, wherein we utilize payments received in foreign currencies to fulfill obligations in foreign currencies.
Added
When appropriate, we will use derivative financial instruments to hedge the net foreign currency exposure from certain direct investments denominated in foreign currencies and the cash flow exposure from our foreign based subsidiaries. 93

Other ALTI 10-K year-over-year comparisons