What changed in Silvercrest Asset Management Group Inc.'s 10-K — 2022 vs 2023
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Paragraph-level year-over-year comparison of Silvercrest Asset Management Group Inc.'s 2022 and 2023 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 2023 report.
+91 added−101 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-02)
Top changes in Silvercrest Asset Management Group Inc.'s 2023 10-K
91 paragraphs added · 101 removed · 82 edited across 1 sections
- Item 4. Mine Safety Disclosures+91 / −101 · 82 edited
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
82 edited+9 added−19 removed151 unchanged
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
82 edited+9 added−19 removed151 unchanged
2022 filing
2023 filing
Biggest changePROPRIETARY EQUITY PERFORMANCE 1, 2 ANNUALIZED PERFORMANCE AS OF 12/31/2022 INCEPTION 1-YEAR 3-YEAR 5-YEAR 7-YEAR INCEPTION Large Cap Value Composite 4/1/02 -11.6 8.3 9.0 12.0 9.2 Russell 1000 Value Index -7.5 6.0 6.7 9.1 7.4 Small Cap Value Composite 4/1/02 -10.8 6.2 4.9 9.3 10.1 Russell 2000 Value Index -14.5 4.7 4.1 8.2 7.5 Smid Cap Value Composite 10/1/05 -14.8 4.4 4.9 9.6 9.1 Russell 2500 Value Index -13.1 5.2 4.8 8.3 7.2 Multi Cap Value Composite 7/1/02 -17.3 6.0 6.3 9.8 9.3 Russell 3000 Value Index -8.0 5.9 6.5 9.1 8.0 Equity Income Composite 12/1/03 -7.3 5.4 6.9 10.9 11.0 Russell 3000 Value Index -8.0 5.9 6.5 9.1 8.1 Focused Value Composite 9/1/04 -18.4 2.5 3.5 7.9 9.3 Russell 3000 Value Index -8.0 5.9 6.5 9.1 7.8 Small Cap Opportunity Composite 7/1/04 -16.0 6.3 7.7 10.5 10.4 Russell 2000 Index -20.4 3.1 4.1 7.9 7.5 Small Cap Growth Composite 7/1/04 -25.0 11.4 12.4 14.4 10.6 Russell 2000 Growth Index -26.4 0.6 3.5 7.1 7.6 Smid Cap Growth Composite 1/1/06 -32.8 10.3 13.5 14.6 10.5 Russell 2500 Growth Index -26.2 2.9 6.0 9.0 8.7 1 Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by Silvercrest Asset Management Group LLC (“SAMG LLC”), a subsidiary of Silvercrest.
Biggest changeFinancial Statements and Supplementary Data” of this filing. 43 Operating Results Revenue Our revenues for the years ended December 31, 2023, 2022 and 2021 are set forth below: For the Years Ended December 31, (in thousands) 2023 2022 2023 vs. 2022 ($) 2023 vs. 2022 (%) Management and advisory fees $ 112,794 $ 118,725 $ (5,931 ) (5.0 )% Performance fees and allocations — 2 (2 ) (100.0 )% Family office services 4,616 4,490 126 2.8 % Total revenue $ 117,410 $ 123,217 $ (5,807 ) (4.7 )% For the Years Ended December 31, (in thousands) 2022 2021 2022 vs. 2021 ($) 2022 vs. 2021 (%) Management and advisory fees $ 118,725 $ 126,976 $ (8,251 ) (6.5 )% Performance fees and allocations 2 86 (84 ) 100.0 % Family office services 4,490 4,541 (51 ) (1.1 )% Total revenue $ 123,217 $ 131,603 $ (8,386 ) (6.4 )% The growth in our assets under management from January 1, 2021 to December 31, 2023 is described below: Assets Under Management (in billions) Discretionary Non- Discretionary Total As of January 1, 2021 $ 20.6 $ 7.2 $ 27.8 (1) Gross client inflows 5.7 0.5 6.2 Gross client outflows (5.5 ) (0.5 ) (6.0 ) Net client flows 0.2 — 0.2 Market appreciation 4.3 — 4.3 As of December 31, 2021 $ 25.1 $ 7.2 $ 32.3 (1) Gross client inflows 4.4 2.0 6.4 Gross client outflows (5.8 ) (0.5 ) (6.3 ) Net client flows (1.4 ) 1.5 0.1 Market depreciation (2.8 ) (0.7 ) (3.5 ) As of December 31, 2022 $ 20.9 $ 8.0 $ 28.9 (1) Gross client inflows 3.0 2.4 5.4 Gross client outflows (4.1 ) (0.7 ) (4.8 ) Net client flows (1.1 ) 1.7 0.6 Market appreciation 2.1 1.7 3.8 As of December 31, 2023 $ 21.9 $ 11.4 $ 33.3 (1) (1) Less than 5% of assets under management generate performance fees. 44 PROPRIETARY EQUITY PERFORMANCE 1, 2 ANNUALIZED PERFORMANCE AS OF 12/31/2023 INCEPTION 1-YEAR 3-YEAR 5-YEAR 7-YEAR INCEPTION Large Cap Value Composite 4/1/02 13.0 9.6 13.4 11.7 9.4 Russell 1000 Value Index 11.5 8.9 10.9 8.3 7.6 Small Cap Value Composite 4/1/02 15.6 9.0 11.7 7.4 10.3 Russell 2000 Value Index 14.6 7.9 10.0 6.1 7.9 Smid Cap Value Composite 10/1/05 9.6 6.4 9.6 7.0 9.2 Russell 2500 Value Index 16.0 8.8 10.8 7.1 7.6 Multi Cap Value Composite 7/1/02 12.4 7.1 11.1 8.9 9.4 Russell 3000 Value Index 11.7 8.8 10.8 8.2 8.1 Equity Income Composite 12/1/03 7.0 8.4 9.4 8.7 10.8 Russell 3000 Value Index 11.7 8.8 10.8 8.2 8.2 Focused Value Composite 9/1/04 4.4 2.5 6.6 5.6 9.1 Russell 3000 Value Index 11.7 8.8 10.8 8.2 8.0 Small Cap Opportunity Composite 7/1/04 18.1 5.1 12.6 10.1 10.8 Russell 2000 Index 16.9 2.2 10.0 7.3 8.0 Small Cap Growth Composite 7/1/04 7.5 (1.0 ) 12.8 12.1 10.5 Russell 2000 Growth Index 18.7 (3.5 ) 9.2 8.1 8.2 Smid Cap Growth Composite 1/1/06 11.5 (5.3 ) 14.9 13.7 10.5 Russell 2500 Growth Index 18.9 (2.7 ) 11.4 10.2 9.2 1 Returns are based upon a time weighted rate of return of various fully discretionary equity portfolios with similar investment objectives, strategies and policies and other relevant criteria managed by Silvercrest Asset Management Group LLC (“SAMG LLC”), a subsidiary of Silvercrest.
Financing Activities Year Ended December 31, 2022 versus Year Ended December 31, 2021 For the years ended December 31, 2022 and 2021, financing activities used $30.7 million and $20.1 million, respectively. Dividends of $6.8 million and $6.4 million were paid during 2022 and 2021, respectively, to Class A shareholders.
Year Ended December 31, 2022 versus Year Ended December 31, 2021 For the years ended December 31, 2022 and 2021, financing activities used $30.7 million and $20.1 million, respectively. Dividends of $6.8 million and $6.4 million were paid during 2022 and 2021, respectively, to Class A shareholders.
Our management and advisory fees may fluctuate based on a number of factors, including the following: • changes in assets under management due to appreciation or depreciation of our investment portfolios, and the levels of the contribution and withdrawal of assets by new and existing clients; • allocation of assets under management among our investment strategies, which have different fee schedules; • allocation of assets under management between separately managed accounts and advised funds, for which we generally earn lower overall advisory fees; and • the level of our performance with respect to accounts and funds on which we are paid incentive fees.
Our management and advisory fees may fluctuate based on a number of factors, including the following: • changes in assets under management due to appreciation or depreciation of our investment portfolios, and the levels of the contribution and withdrawal of assets by new and existing clients; • allocation of assets under management among our investment strategies, which have different fee schedules; 41 • allocation of assets under management between separately managed accounts and advised funds, for which we generally earn lower overall advisory fees; and • the level of our performance with respect to accounts and funds on which we are paid incentive fees.
In addition, the Purchase Agreement provides for up to an additional $26.2 million to be paid 80% in cash with certain Principals receiving the remaining 20% in the form of Class B Units of Silvercrest L.P. in potential earn-out payments over the next four years. 42 On July 1, 2019, the acquisition was completed pursuant to the Purchase Agreement.
In addition, the Purchase Agreement provides for up to an additional $26.2 million to be paid 80% in cash with certain Principals receiving the remaining 20% in the form of Class B Units of Silvercrest L.P. in potential earn-out payments over the next four years. On July 1, 2019, the acquisition was completed pursuant to the Purchase Agreement.
Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefit of the increased depreciation and amortization of our assets, we expect that future payments to the selling principals of Silvercrest L.P. in respect of our purchase of Class B units from them will aggregate approximately $8.9 million.
Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefit of the increased depreciation and amortization of our assets, we expect that future payments to the selling principals of Silvercrest L.P. in respect of our purchase of Class B units from them will aggregate approximately $8.8 million.
(b) In 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($11,781), a fair value adjustment to the Neosho contingent purchase price consideration of ($299), an adjustment to the fair value of the tax receivable agreement of ($202), an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives, expenses related to obtaining a business license of $26, system implementation costs of $6 and expenses related to the Coronavirus pandemic of $6.
In 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($11,781), a fair value adjustment to the Neosho contingent purchase price consideration of ($299), an adjustment to the fair value of the tax receivable agreement of ($202), an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives, expenses related to obtaining a business license of $26, system implementation costs of $6 and expenses related to the Coronavirus pandemic of $6.
An understanding of these accounting policies is essential when reviewing our reported results of operations and our financial condition. Management believes that the critical accounting policies and estimates discussed below involve additional management judgment due to the sensitivity of the methods and assumptions used. 55 Business Combinations We account for business combinations using the acquisition method of accounting.
An understanding of these accounting policies is essential when reviewing our reported results of operations and our financial condition. Management believes that the critical accounting policies and estimates discussed below involve additional management judgment due to the sensitivity of the methods and assumptions used. Business Combinations We account for business combinations using the acquisition method of accounting.
In certain arrangements, we are only entitled to receive performance fees and allocations when the return on assets under management exceeds certain benchmark returns or other performance targets. 39 The discretionary investment management agreements for our separately managed accounts do not have a specified term.
In certain arrangements, we are only entitled to receive performance fees and allocations when the return on assets under management exceeds certain benchmark returns or other performance targets. The discretionary investment management agreements for our separately managed accounts do not have a specified term.
SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS ® ). 44 2 The market indices used to compare to the performance of our strategies are as follows: The Russell 1000 Index is a capitalization-weighted, unmanaged index that measures the 1000 smallest companies in the Russell 3000.
SAMG LLC claims compliance with the Global Investment Performance Standards (GIPS ® ). 2 The market indices used to compare to the performance of our strategies are as follows: The Russell 1000 Index is a capitalization-weighted, unmanaged index that measures the 1000 smallest companies in the Russell 3000.
Item 4. Mine Safety Disclosures. Not applicable. 36 PA RT II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Class A common stock has been listed on The Nasdaq Global Market under the symbol “SAMG” since June 27, 2013.
Item 4. Mine Safety Disclosures. Not applicable. 37 PA RT II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Class A common stock has been listed on The Nasdaq Global Market under the symbol “SAMG” since June 27, 2013.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 2, 2022.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 2, 2023.
Our expenses are driven primarily by our compensation costs. The table included in “—Expenses—Compensation and Benefits Expense” describes the components of our compensation expense for the three years ended December 31, 2022. Other expenses, such as rent, professional service fees, data-related costs, and sub-advisory fees incurred are included in our general and administrative expenses in the Consolidated Statement of Operations.
Our expenses are driven primarily by our compensation costs. The table included in “—Expenses—Compensation and Benefits Expense” describes the components of our compensation expense for the three years ended December 31, 2023. Other expenses, such as rent, professional service fees, data-related costs, and sub-advisory fees incurred are included in our general and administrative expenses in the Consolidated Statement of Operations.
During 2022, 2021 and 2020, Silvercrest L.P. granted restricted stock units (“RSU”) to existing Class B unit holders. During 2021 and 2020, Silvercrest L.P. granted non-qualified options (“NQO”) to an existing Class B unit holder. Information regarding restricted stock units can be found in Note 16. “Equity-Based Compensation” in the “Notes to Consolidated Financial Statements” in “Item 8.
During 2023, 2022 and 2021, Silvercrest L.P. granted restricted stock units (“RSU”) to existing Class B unit holders. During 2022 and 2021, Silvercrest L.P. granted non-qualified options (“NQO”) to an existing Class B unit holder. Information regarding restricted stock units can be found in Note 16. “Equity-Based Compensation” in the “Notes to Consolidated Financial Statements” in “Item 8.
Most of our revenue for the years ended December 31, 2022, 2021 and 2020 was derived from advisory fees, which are typically based on the market value of assets under management. Accordingly, a decline in the prices of securities would cause our revenue and income to decline due to a decrease in the value of the assets we manage.
Most of our revenue for the years ended December 31, 2023, 2022 and 2021 was derived from advisory fees, which are typically based on the market value of assets under management. Accordingly, a decline in the prices of securities would cause our revenue and income to decline due to a decrease in the value of the assets we manage.
Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2021 and 2020 was 21.7% and 23.6%, respectively. 49 Supplemental Non-GAAP Financial Information To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share, which are non-GAAP financial measures of earnings. • EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization. • We define Adjusted EBITDA as EBITDA without giving effect to the Delaware franchise tax, professional fees associated with acquisitions or financing transactions, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense.
Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2022 and 2021 was 19.8% and 21.7%, respectively. 49 Supplemental Non-GAAP Financial Information To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share, which are non-GAAP financial measures of earnings. • EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization. • We define Adjusted EBITDA as EBITDA without giving effect to the Delaware franchise tax, professional fees associated with acquisitions or financing transactions, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense.
Advisory fees are also adjusted for any cash flows into or out of a portfolio, where the cash flow represents greater than 10% of the previous quarter-end market value of the portfolio. These cash flow-related adjustments were insignificant for the years ended December 31, 2022, 2021 and 2020.
Advisory fees are also adjusted for any cash flows into or out of a portfolio, where the cash flow represents greater than 10% of the previous quarter-end market value of the portfolio. These cash flow-related adjustments were insignificant for the years ended December 31, 2023, 2022 and 2021.
We intend to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P. 53 Cash Flows The following table sets forth our cash flows for the years ended December 31, 2022, 2021 and 2020.
We intend to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P. 53 Cash Flows The following table sets forth our cash flows for the years ended December 31, 2023, 2022 and 2021.
Performance Graph As a “smaller reporting company” as defined in Item 10 of Regulation S-K, the Company is not required to provide this information. Ite m 6. [Reserved] 37 It em 7.
Performance Graph As a “smaller reporting company” as defined in Item 10 of Regulation S-K, the Company is not required to provide this information. Ite m 6. [Reserved] 38 It em 7.
We believe that we have sufficient cash from our operations to fund our operations and commitments for the next twelve months. 52 The following table sets forth certain key financial data relating to our liquidity and capital resources as of December 31, 2022, 2021 and 2020.
We believe that we have sufficient cash from our operations to fund our operations and commitments for the next twelve months. The following table sets forth certain key financial data relating to our liquidity and capital resources as of December 31, 2023, 2022 and 2021.
The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds”. Silvercrest L.P. has issued restricted stock units exercisable for 212,927. Class B units which entitle the holders thereof to receive distributions from Silvercrest L.P. to the same extent as if the underlying Class B units were outstanding.
The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds”. Silvercrest L.P. has issued restricted stock units exercisable for 240,998 Class B units which entitle the holders thereof to receive distributions from Silvercrest L.P. to the same extent as if the underlying Class B units were outstanding.
We utilized this option when performing our annual impairment assessment in 2022, 2021 and 2020, and concluded that our single reporting unit’s fair value was more likely than not greater than its carrying value, including goodwill.
We utilized this option when performing our annual impairment assessment in 2023 and 2022, and concluded that our single reporting unit’s fair value was more likely than not greater than its carrying value, including goodwill.
Average annual management fee is calculated by dividing our actual revenue earned over a period by our average assets under management during the same period (which is calculated by averaging quarter-end assets under management for the applicable period). Our average management fee was 0.40%, 0.44% and 0.41% for the years ended December 31, 2022, 2021 and 2020, respectively.
Average annual management fee is calculated by dividing our actual revenue earned over a period by our average assets under management during the same period (which is calculated by averaging quarter-end assets under management for the applicable period). Our average management fee was 0.38%, 0.40% and 0.44% for the years ended December 31, 2023, 2022 and 2021, respectively.
The interests of the limited partners’ collective 32.6% partnership interest in Silvercrest L.P. as of December 31, 2022 are reflected in non-controlling interests in our consolidated financial statements. This Item 7 generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
The interests of the limited partners’ collective 32.9% partnership interest in Silvercrest L.P. as of December 31, 2023 are reflected in non-controlling interests in our consolidated financial statements. This Item 7 generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
There was a $0.1 million adjustment to the fair value of our tax receivable agreement liability as of December 31, 2021. The adjustment in fair value was a result of a reduction in the future effective corporate tax rates at the federal level and in New York City as a result of law changes.
There was a $0.4 million adjustment to the fair value of our tax receivable agreement liability as of December 31, 2023. The adjustment in fair value was a result of a reduction in the future effective corporate tax rates at the federal level and in New York City as a result of law changes.
As of December 31, 2022 and 2021, we had $6.3 million and $9.0 million outstanding under the term loan. We were in compliance with the covenants under the credit facility as of December 31, 2022 and 2021. Our ongoing sources of cash will primarily consist of management fees and family office services fees, which are principally collected quarterly.
As of December 31, 2023 and 2022, we had $2.7 million and $6.3 million outstanding under the term loan. We were in compliance with the covenants under the credit facility as of December 31, 2023 and 2022. Our ongoing sources of cash will primarily consist of management fees and family office services fees, which are principally collected quarterly.
As of December 31, 2021, the composition of our assets under management was 78% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 22% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.
As of December 31, 2023, the composition of our assets under management was 66% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 34% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.
Discretionary Managed Accounts As of and for the Year Ended December 31, (in billions) 2022 2021 2020 AUM concentrated in Discretionary Managed Accounts $ 20.5 $ 24.6 $ 20.2 Average AUM For Discretionary Managed Accounts $ 22.6 $ 22.4 $ 19.3 Discretionary Managed Accounts Revenue (in millions) $ 114.3 $ 122.3 $ 99.1 Percentage of management and advisory fees revenue 96 % 96 % 96 % Private Funds As of and for the Year Ended December 31, (in billions) 2022 2021 2020 AUM concentrated in Private Funds $ 0.4 $ 0.5 $ 0.4 Average AUM For Private Funds $ 0.5 $ 0.5 $ 0.5 Private Funds Revenue (in millions) $ 4.4 $ 4.7 $ 4.6 Percentage of management and advisory fees revenue 4 % 4 % 4 % Our management and advisory fees are primarily driven by the level of our assets under management.
Discretionary Managed Accounts As of and for the Year Ended December 31, (in billions) 2023 2022 2021 AUM concentrated in Discretionary Managed Accounts $ 21.5 $ 20.5 $ 24.6 Average AUM For Discretionary Managed Accounts $ 21.0 $ 22.6 $ 22.4 Discretionary Managed Accounts Revenue (in millions) $ 108.7 $ 114.3 $ 122.3 Percentage of management and advisory fees revenue 96 % 96 % 96 % 40 Private Funds As of and for the Year Ended December 31, (in billions) 2023 2022 2021 AUM concentrated in Private Funds $ 0.4 $ 0.4 $ 0.5 Average AUM For Private Funds $ 0.4 $ 0.5 $ 0.5 Private Funds Revenue (in millions) $ 4.1 $ 4.4 $ 4.7 Percentage of management and advisory fees revenue 4 % 4 % 4 % Our management and advisory fees are primarily driven by the level of our assets under management.
Investing Activities Year Ended December 31, 2022 versus Year Ended December 31, 2021 For the years ended December 31, 2022 and 2021, investing activities used $1.0 million and $0.9 million, respectively.
Investing Activities Year Ended December 31, 2023 versus Year Ended December 31, 2022 For the years ended December 31, 2023 and 2022, investing activities used $3.9 million and $1.0 million, respectively.
Level 1 Level 2 Level 3 Total (in billions) December 31, 2022 AUM $ 22.4 $ 3.6 $ 2.9 $ 28.9 December 31, 2021 AUM $ 25.3 $ 5.4 $ 1.6 $ 32.3 As substantially all our assets under management are valued by independent pricing services based upon observable market prices or inputs, we believe market risk is the most significant risk underlying valuation of our assets under management, as discussed under the heading “Risk Factors” in this annual report.
Level 1 Level 2 Level 3 Total (in billions) December 31, 2023 AUM $ 23.8 $ 4.8 $ 4.7 $ 33.3 December 31, 2022 AUM $ 22.4 $ 3.6 $ 2.9 $ 28.9 As substantially all our assets under management are valued by independent pricing services based upon observable market prices or inputs, we believe market risk is the most significant risk underlying valuation of our assets under management, as discussed under the heading “Risk Factors” in this annual report.
The average value of our assets under management for the year ended December 31, 2021 was approximately $30.1 billion.
The average value of our assets under management for the year ended December 31, 2023 was approximately $31.1 billion.
Equity Compensation Plan Information Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 497,804 $ 14.33 1,140,265 Equity compensation plans not approved by security holders — — — Total 497,804 $ 14.33 1,140,265 A total of 1,670,960 shares of Class A common stock were initially registered and an additional 1,050,000 were added when the 2012 Equity Incentive Plan was amended in June 2022, 966,510 restricted stock units were granted in August 2015, 14,373 restricted stock units were granted in May 2016, 105,398 non-qualified stock options were granted in October 2018, 60,742 non-qualified stock options were granted in May 2019, 34,388 restricted stock units were granted in May 2019, 8,242 restricted stock units were granted in March 2020, 86,764 non-qualified stock options were granted in May 2020, 49,116 restricted stock units were granted in May 2020, 21,598 restricted stock units were granted in January 2021, 129,314 restricted stock units were granted in May 2021, 1,827 restricted stock units were granted in August 2021, 10,270 restricted stock units were granted in May 2022, 92,154 restricted stock units were granted in November 2022 and 1,140,265 remain reserved for issuance under the 2012 Equity Incentive Plan as of December 31, 2022.
Equity Compensation Plan Information Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 424,058 $ 15.32 1,110,578 Equity compensation plans not approved by security holders — — — Total 424,058 $ 15.32 1,110,578 A total of 1,670,960 shares of Class A common stock were initially registered and an additional 1,050,000 were added when the 2012 Equity Incentive Plan was amended in June 2022, 966,510 restricted stock units were granted in August 2015, 14,373 restricted stock units were granted in May 2016, 105,398 non-qualified stock options were granted in October 2018, 60,742 non-qualified stock options were granted in May 2019, 34,388 restricted stock units were granted in May 2019, 8,242 restricted stock units were granted in March 2020, 86,764 non-qualified stock options were granted in May 2020, 49,116 restricted stock units were granted in May 2020, 21,598 restricted stock units were granted in January 2021, 129,314 restricted stock units were granted in May 2021, 1,827 restricted stock units were granted in August 2021, 10,270 restricted stock units were granted in May 2022, 92,154 restricted stock units were granted in November 2022, 101,192 restricted stock units were granted in April 2023, 11,822 restricted stock units were granted in May 2023, 83,328 of the non-qualified stock options granted in October 2018 were returned to the plan in October 2023 and 1,110,578 remain reserved for issuance under the 2012 Equity Incentive Plan as of December 31, 2023.
(B) GAAP net income per share is strictly attributable to Class A shareholders. Adjusted earnings per share takes into account earnings attributable to both Class A and Class B shareholders. (C) Includes 31,974 and 21,704 unvested restricted stock units at December 31, 2022 and 2021, respectively.
(B) GAAP net income per share is strictly attributable to Class A shareholders. Adjusted earnings per share takes into account earnings attributable to both Class A and Class B shareholders. (C) Includes 35,554 and 31,974 unvested restricted stock units at December 31, 2023 and 2022, respectively.
Years Ended December 31, (in thousands) 2022 2021 2020 Cash and cash equivalents $ 77,432 $ 85,744 $ 62,498 Accounts receivable $ 9,118 $ 8,850 $ 8,341 Due from Silvercrest Funds $ 577 $ 428 $ 1,018 We anticipate that distributions to the principals of Silvercrest L.P. will continue to be a material use of our cash resources and will vary in amount and timing based on our operating results and dividend policy.
Years Ended December 31, (in thousands) 2023 2022 2021 Cash and cash equivalents $ 70,301 $ 77,432 $ 85,744 Accounts receivable $ 9,526 $ 9,118 $ 8,850 Due from Silvercrest Funds $ 558 $ 577 $ 428 We anticipate that distributions to the principals of Silvercrest L.P. will continue to be a material use of our cash resources and will vary in amount and timing based on our operating results and dividend policy.
Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.0 billion for the year ended December 31, 2021, which would cause an annualized increase or decrease in revenues of approximately $13.2 million for the year ended December 31, 2021, at a weighted average fee rate for the year ended December 31, 2021 of 0.44%.
Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.1 billion for the year ended December 31, 2023, which would cause an annualized increase or decrease in revenues of approximately $11.7 million for the year ended December 31, 2023, at a weighted average fee rate for the year ended December 31, 2023 of 0.38%.
The primary use of cash during 2022 and 2021was for the acquisition of furniture, equipment and leasehold improvements. 54 Year Ended December 31, 2021 versus Year Ended December 31, 2020 For the years ended December 31, 2021 and 2020, investing activities used $0.9 million and $0.6 million, respectively.
The primary use of cash during 2023 and 2022 was for the acquisition of furniture, equipment and leasehold improvements. 54 Year Ended December 31, 2022 versus Year Ended December 31, 2021 For the years ended December 31, 2022 and 2021, investing activities used $1.0 million and $0.9 million, respectively.
(D) Includes 212,927 and 170,854 unvested restricted stock units and 252,904 and 252,904 non-qualified stock options at December 31, 2022 and 2021, respectively. Liquidity and Capital Resources Historically, the working capital needs of our business have primarily been met through cash generated by our operations.
(D) Includes 240,998 and 212,927 unvested restricted stock units and 147,506 and 252,904 non-qualified stock options at December 31, 2023 and 2022, respectively. Liquidity and Capital Resources Historically, the working capital needs of our business have primarily been met through cash generated by our operations.
In addition to a wide range of investment capabilities, we offer a full suite of complementary and customized family office services for families seeking a comprehensive oversight of their financial affairs. During the twelve months ended December 31, 2022, our assets under management decreased 10.5% from $32.3 billion to $28.9 billion.
In addition to a wide range of investment capabilities, we offer a full suite of complementary and customized family office services for families seeking a comprehensive oversight of their financial affairs. During the twelve months ended December 31, 2023, our assets under management increased 15.2% from $28.9 billion to $33.3 billion.
Family office services revenue remained flat at $4.2 million for the years ended December 31, 2022 and 2021. Performance fee revenue was $0 and $0.1 million for the years ended December 31, 2022 and 2021. These performance fees are primarily related to external investment strategies in which we have a revenue sharing arrangement.
Family office services revenue remained flat at approximately $4.6 million for the years ended December 31, 2023 and 2022. There was no performance fee revenue for the years ended December 31, 2023 and 2022. These performance fees are primarily related to external investment strategies in which we have a revenue sharing arrangement.
Year Ended December 31, 2021 versus Year Ended December 31, 2020 The provision for income taxes was $6.9 million and $5.4 million for the years ended December 31, 2021 and 2020, respectively.
Year Ended December 31, 2022 versus Year Ended December 31, 2021 The provision for income taxes was $7.6 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively.
Sub-advised fund management revenue decreased by $0.1 million for the year ended December 31, 2021 as compared to the prior year. Proprietary fund management revenue increased by $0.2 million for the year ended December 31, 2021 as compared to the prior year as a result of market appreciation.
Sub-advised fund management revenue decreased by $0.1 million for the year ended December 31, 2023 as compared to the prior year. Proprietary fund management revenue decreased by $0.3 million for the year ended December 31, 2023 as compared to the prior year as a result of market depreciation.
Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2022 and 2021 was 19.8% and 21.7%, respectively.
Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2023 and 2022 was 22.1% and 19.8%, respectively.
Our Class B common stock is not listed on The Nasdaq Global Market and there is no established trading market for such shares. Issuer Purchases of Equity Securities The following table presents information with respect to purchases of our Class A common stock made during the quarter ended December 31, 2022.
Our Class B common stock is not listed on The Nasdaq Global Market and there is no established trading market for such shares. Issuer Purchases of Equity Securities No purchases of our Class A common stock were made during the quarter ended December 31, 2023.
Our increase in assets under management for the year ended December 31, 2021 was attributable to an increase in discretionary assets under management of $4.5 billion. Non-discretionary assets under management remained flat year over year. The increase in our discretionary assets under management was driven by market appreciation and net client inflows.
Our increase in assets under management for the year ended December 31, 2023 was attributable to an increase in discretionary assets under management of $1.0 billion and an increase in non-discretionary assets under management of $3.4 billion. The increase in our discretionary assets under management was driven by market appreciation and net client inflows.
Adjusted EBITDA Year Ended December 31, 2022 2021 2020 Reconciliation of non-GAAP financial measure: Net income $ 30,793 $ 24,946 $ 17,478 GAAP Provision for income taxes 7,606 6,923 5,394 Delaware Franchise Tax 200 200 200 Interest expense 416 383 563 Interest income (24 ) (7 ) (13 ) Depreciation and amortization 3,883 3,923 3,968 Equity-based compensation 1,149 1,126 659 Other adjustments (A) (12,002 ) 5,947 2,047 Adjusted EBITDA $ 32,021 $ 43,441 $ 30,296 Adjusted EBITDA Margin 26.0 % 33.0 % 28.1 % Adjusted Net Income and Adjusted Earnings Per Share Reconciliation of non-GAAP financial measure: Net income $ 30,793 $ 24,946 $ 17,478 GAAP Provision for income taxes 7,606 6,923 5,394 Delaware Franchise Tax 200 200 200 Other adjustments (A) (12,002 ) 5,947 2,047 Adjusted earnings before provision for income taxes 26,597 38,016 25,119 Adjusted provision for income taxes: Adjusted provision for income taxes (26% assumed tax rate) (6,915 ) (9,884 ) (6,531 ) Adjusted net income $ 19,682 $ 28,132 $ 18,588 GAAP net income per share (B): Basic and diluted $ 1.92 $ 1.52 $ 1.05 Adjusted earnings per share/unit (B): Basic $ 1.40 $ 1.95 $ 1.29 Diluted $ 1.35 $ 1.89 $ 1.28 Shares/units outstanding: Basic Class A shares outstanding 9,560 9,869 9,651 Basic Class B shares/units outstanding 4,545 4,594 4,722 Total basic shares/units outstanding 14,105 14,463 14,373 Diluted Class A shares outstanding (C) 9,592 9,891 9,659 Diluted Class B shares/units outstanding (D) 5,011 5,017 4,883 Total diluted shares/units outstanding 14,603 14,908 14,542 (A) Other adjustments consist of the following: Year Ended December 31, 2022 2021 2020 Acquisition costs (a) $ 37 $ 363 $ 350 Severance 13 10 — Other (b) (12,052 ) 5,574 1,697 Total other adjustments $ (12,002 ) $ 5,947 $ 2,047 (a) In 2022, represents insurance costs of $22 and professional fees of $15 related to the acquisition of Cortina.
Adjusted EBITDA Year Ended December 31, 2023 2022 2021 Reconciliation of non-GAAP financial measure: Net income $ 15,183 $ 30,793 $ 24,946 GAAP Provision for income taxes 4,310 7,606 6,923 Delaware Franchise Tax 200 200 200 Interest expense 421 416 383 Interest income (946 ) (24 ) (7 ) Depreciation and amortization 4,014 3,883 3,923 Equity-based compensation 1,627 1,149 1,126 Other adjustments (A) 2,069 (12,002 ) 5,947 Adjusted EBITDA $ 26,878 $ 32,021 $ 43,441 Adjusted EBITDA Margin 22.9 % 26.0 % 33.0 % Adjusted Net Income and Adjusted Earnings Per Share Reconciliation of non-GAAP financial measure: Net income $ 15,183 $ 30,793 $ 24,946 GAAP Provision for income taxes 4,310 7,606 6,923 Delaware Franchise Tax 200 200 200 Other adjustments (A) 2,069 (12,002 ) 5,947 Adjusted earnings before provision for income taxes 21,762 26,597 38,016 Adjusted provision for income taxes: Adjusted provision for income taxes (26% assumed tax rate) (5,658 ) (6,915 ) (9,884 ) Adjusted net income $ 16,104 $ 19,682 $ 28,132 GAAP net income per share (B): Basic and diluted $ 0.96 $ 1.92 $ 1.52 Adjusted earnings per share/unit (B): Basic $ 1.16 $ 1.40 $ 1.95 Diluted $ 1.12 $ 1.35 $ 1.89 Shares/units outstanding: Basic Class A shares outstanding 9,479 9,560 9,869 Basic Class B shares/units outstanding 4,431 4,545 4,594 Total basic shares/units outstanding 13,910 14,105 14,463 Diluted Class A shares outstanding (C) 9,515 9,592 9,891 Diluted Class B shares/units outstanding (D) 4,820 5,011 5,017 Total diluted shares/units outstanding 14,335 14,603 14,908 (A) Other adjustments consist of the following: Year Ended December 31, 2023 2022 2021 Acquisition costs (a) $ 5 $ 37 $ 363 Severance 71 13 10 Other (b) 1,993 (12,052 ) 5,574 Total other adjustments $ 2,069 $ (12,002 ) $ 5,947 (a) In 2023, represents professional fees of $5 related to the acquisition of Cortina.
Year Ended December 31, 2021 versus Year Ended December 31, 2020 Operating activities provided $44.3 million and $26.8 million for the years ended December 31, 2021 and 2020, respectively.
Year Ended December 31, 2022 versus Year Ended December 31, 2021 Operating activities provided $23.4 million and $44.3 million for the years ended December 31, 2022 and 2021, respectively.
With respect to our discretionary assets under management, equity assets increased by 18.1% during the year ended December 31, 2021 and fixed income assets increased by 6.6% during the same period.
With respect to our discretionary assets under management, equity assets increased by 5.3% during the year ended December 31, 2023 and fixed income assets increased by 4.4% during the same period.
A substantially greater number of holders of our Class A common stock are held in “street name” and held of record by banks, brokers and other financial institutions.
Holders As of March 4, 2024, there were 17 holders of record of our Class A common stock and 57 holders of record of our Class B common stock. A substantially greater number of holders of our Class A common stock are held in “street name” and held of record by banks, brokers and other financial institutions.
Our costs associated with operating and maintaining our research, trading and portfolio accounting systems and professional services expenses generally increase or decrease in relative proportion to the number of employees retained by us and the overall size and scale of our business operations. Sub-advisory fees will fluctuate based on the level of management fees from funds that utilize sub-advisors.
Our costs associated with operating and maintaining our research, trading and portfolio accounting systems and professional services expenses generally increase or decrease in relative proportion to the number of employees retained by us and the overall size and scale of our business operations.
The following table represents a further breakdown of our assets under management for the years ended December 31, 2022, 2021 and 2020: For the Years Ended December 31, (in billions) 2022 2021 2020 Total AUM as of January 1, $ 32.3 $ 27.8 $ 25.1 Discretionary AUM: Total Discretionary AUM as of January 1, 25.1 20.6 18.8 New client accounts/assets 0.5 0.5 0.6 (1) Closed accounts (0.1 ) (0.4 ) (0.2 ) (2) Net cash (outflow)/inflow (1.8 ) 0.1 (0.1 ) (3) Non-discretionary to Discretionary AUM — — — (4) Market (depreciation)/appreciation (2.8 ) 4.3 1.5 Change to Discretionary AUM (4.2 ) 4.5 1.8 Total Discretionary AUM at December 31, 20.9 25.1 20.6 Change to Non-Discretionary AUM 0.8 — 0.9 (5) Total AUM as of December 31, $ 28.9 $ 32.3 $ 27.8 (1) Represents new account flows from both new and existing client relationships (2) Represents closed accounts of existing client relationships and those that terminated (3) Represents periodic cash flows related to existing accounts (4) Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM (5) Represents the net change to Non-Discretionary AUM 46 Expenses Our expenses for the years ended December 31, 2022, 2021 and 2020, are set forth below: For the Years Ended December 31, (in thousands) 2022 2021 2022 vs. 2021 ($) 2022 vs. 2021 (%) Compensation and benefits (1) $ 71,610 $ 72,564 $ (954 ) (1.3 )% General and administrative 13,045 28,518 (15,473 ) (54.3 )% Total expenses $ 84,655 $ 101,082 $ (16,427 ) (16.3 )% For the Years Ended December 31, (in thousands) 2021 2020 2021 vs. 2020 ($) 2021 vs. 2020 (%) Compensation and benefits (1) $ 72,564 $ 62,379 $ 10,185 16.3 % General and administrative 28,518 23,323 5,195 22.3 % Total expenses $ 101,082 $ 85,702 $ 15,380 17.9 % (1) For the years ended December 31, 2022 and 2021, $32,262 and $34,781, respectively, of partner incentive payments was included in compensation and benefits expense.
These performance fees are primarily related to external investment strategies in which we have a revenue sharing arrangement. 46 The following table represents a further breakdown of our assets under management for the years ended December 31, 2023, 2022 and 2021: For the Years Ended December 31, (in billions) 2023 2022 2021 Total AUM as of January 1, $ 28.9 $ 32.3 $ 27.8 Discretionary AUM: Total Discretionary AUM as of January 1, 20.9 25.1 20.6 New client accounts/assets 0.3 0.5 0.5 (1) Closed accounts (0.2 ) (0.1 ) (0.4 ) (2) Net cash (outflow)/inflow (1.3 ) (1.8 ) 0.1 (3) Non-discretionary to Discretionary AUM — — — (4) Market appreciation/(depreciation) 2.2 (2.8 ) 4.3 Change to Discretionary AUM 1.0 (4.2 ) 4.5 Total Discretionary AUM at December 31, 21.9 20.9 25.1 Change to Non-Discretionary AUM 3.4 0.8 — (5) Total AUM as of December 31, $ 33.3 $ 28.9 $ 32.3 (1) Represents new account flows from both new and existing client relationships (2) Represents closed accounts of existing client relationships and those that terminated (3) Represents periodic cash flows related to existing accounts (4) Represents client assets that converted to Discretionary AUM from Non-Discretionary AUM (5) Represents the net change to Non-Discretionary AUM Expenses Our expenses for the years ended December 31, 2023, 2022 and 2021, are set forth below: For the Years Ended December 31, (in thousands) 2023 2022 2023 vs. 2022 ($) 2023 vs. 2022 (%) Compensation and benefits (1) $ 72,619 $ 71,610 $ 1,009 1.4 % General and administrative 25,972 13,045 12,927 99.1 % Total expenses $ 98,591 $ 84,655 $ 13,936 16.5 % For the Years Ended December 31, (in thousands) 2022 2021 2022 vs. 2021 ($) 2022 vs. 2021 (%) Compensation and benefits (1) $ 71,610 $ 72,564 $ (954 ) (1.3 )% General and administrative 13,045 28,518 (15,473 ) (54.3 )% Total expenses $ 84,655 $ 101,082 $ (16,427 ) (16.3 )% (1) For the years ended December 31, 2023 and 2022, $31,289 and $32,262, respectively, of partner incentive payments was included in compensation and benefits expense.
Key Performance Indicators When we review our performance, we focus on the indicators described below: For the Year Ended December 31, (in thousands except as indicated) 2022 2021 2020 Revenue $ 123,217 $ 131,603 $ 107,983 Income before other income (expense), net $ 38,562 $ 30,521 $ 22,281 Net income $ 30,793 $ 24,946 $ 17,478 Net income margin 25.0 % 19.0 % 16.2 % Net income attributable to Silvercrest $ 18,828 $ 14,693 $ 9,960 Adjusted EBITDA (1) $ 32,021 $ 43,441 $ 30,296 Adjusted EBITDA margin (2) 26.0 % 33.0 % 28.1 % Assets under management at period end (billions) $ 28.9 $ 32.3 $ 27.8 Average assets under management (billions) (3) $ 30.6 $ 30.1 $ 26.5 (1) EBITDA, a non-GAAP measure of earnings, represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.
The COVID-19 pandemic affected our operations in each of the quarters during the period April 1, 2020 through December 31, 2023 and may continue to do so indefinitely thereafter. 39 Key Performance Indicators When we review our performance, we focus on the indicators described below: For the Year Ended December 31, (in thousands except as indicated) 2023 2022 2021 Revenue $ 117,410 $ 123,217 $ 131,603 Income before other income (expense), net $ 18,819 $ 38,562 $ 30,521 Net income $ 15,183 $ 30,793 $ 24,946 Net income margin 12.9 % 25.0 % 19.0 % Net income attributable to Silvercrest $ 9,094 $ 18,828 $ 14,693 Adjusted EBITDA (1) $ 26,878 $ 32,021 $ 43,441 Adjusted EBITDA margin (2) 22.9 % 26.0 % 33.0 % Assets under management at period end (billions) $ 33.3 $ 28.9 $ 32.3 Average assets under management (billions) (3) $ 31.1 $ 30.6 $ 30.1 (1) EBITDA, a non-GAAP measure of earnings, represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.
These increases were partially offset by decreases in the fair value of contingent consideration related to the Neosho Acquisition of $0.3 million and occupancy and related costs of $0.1 million. Information regarding acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.
These increases were partially offset by decreases in professional fees of $0.1 million, sub-advisory and referral fees of $0.1 million and telephone and internet costs of $0.1 million. Information regarding acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.
Years Ended December 31, (in thousands) 2022 2021 2020 Net cash provided by operating activities $ 23,383 $ 44,278 $ 26,846 Net cash used in investing activities (956 ) (908 ) (626 ) Net cash used in financing activities (30,739 ) (20,124 ) (16,554 ) Net change in cash $ (8,312 ) $ 23,246 $ 9,666 Operating Activities Year Ended December 31, 2022 versus Year Ended December 31, 2021 Operating activities provided $23.4 million and $44.3 million for the years ended December 31, 2022 and 2021, respectively.
Years Ended December 31, (in thousands) 2023 2022 2021 Net cash provided by operating activities $ 20,975 $ 23,383 $ 44,278 Net cash used in investing activities (3,878 ) (956 ) (908 ) Net cash used in financing activities (24,216 ) (30,739 ) (20,124 ) Net change in cash $ (7,119 ) $ (8,312 ) $ 23,246 Operating Activities Year Ended December 31, 2023 versus Year Ended December 31, 2022 Operating activities provided $21.0 million and $23.4 million for the years ended December 31, 2023 and 2022, respectively.
Compared to the year ended December 31, 2020, there was an increase of $2.0 billion of client inflows, an increase of $2.0 billion in market appreciation and an increase of $2.2 billion in client outflows.
Compared to the year ended December 31, 2022, there was a decrease of $1.0 billion of client inflows, a decrease of $1.5 billion in client outflows and an increase of $7.3 billion in market appreciation.
We measure the fair value of contingent consideration at each reporting period using a probability-adjusted discounted cash flow method based on significant inputs not observable in the market and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings.
The acquisition method of accounting requires that purchase price, including the fair value of contingent consideration, of the acquisition be allocated to the assets acquired and liabilities assumed using the estimated fair values determined by management as of the acquisition date. 55 We measure the fair value of contingent consideration at each reporting period using a probability-adjusted discounted cash flow method based on significant inputs not observable in the market and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings.
The increase was primarily attributable to an increase in the accrual for bonuses of $7.8 million, an increase in salaries expense of $1.6 million primarily as a result of merit-based increases and newly-hired staff and an increase in equity based compensation expense of $0.8 million due to an increase in the number of unvested restricted stock units and unvested non-qualified stock options outstanding. 47 General and administrative expenses increased by $5.2 million, or 22.3%, to $28.5 million for the year ended December 31, 2021 from $23.3 million for the year ended December 31, 2020.
The increase was primarily attributable to an increase in equity based compensation expense of $0.5 million due to an increase in the number of unvested restricted stock units and unvested non-qualified stock options outstanding and an increase in salaries and benefits expense of $1.3 million primarily as a result of merit-based increases and newly-hired staff, partially offset by a decrease in the accrual for bonuses of $0.8 million.
Our market appreciation during the year ended December 31, 2021 constituted a 13.3% rate of increase in our total assets under management compared to December 31, 2020, as compared to our market appreciation during the year ended December 31, 2020 which constituted a 8.3% rate of increase in our total assets under management compared to December 31, 2019.
Our market appreciation during the year ended December 31, 2023 constituted a 11.4% rate of increase in our total assets under management compared to December 31, 2022, as compared to our market depreciation during the year ended December 31, 2022 which constituted a 12.1% rate of decrease in our total assets under management compared to December 31, 2021.
This increase was attributable to an increase in compensation and benefits expense of $10.2 million and an increase in general and administrative expenses of $5.2 million. Compensation and benefits expense increased by $10.2 million, or 16.3%, to $72.6 million for the year ended December 31, 2021 from $62.4 million for the year ended December 31, 2020.
This increase was attributable to an increase in general and administrative expenses of $12.9 million and an increase in compensation and benefits expense of $1.0 million. 47 Compensation and benefits expense increased by $1.0 million, or 1.4%, to $72.6 million for the year ended December 31, 2023 from $71.6 million for the year ended December 31, 2022.
Equity income from investments increased by $0.6 million in 2021 as compared with the same period in the prior year as a result of increased performance fee allocations. Interest expense decreased for the year ended December 31, 2021 as compared to the prior year as a result of interest owed on borrowings under the credit facility.
Equity income from investments increased by $0.1 million in 2023 as compared with the same period in the prior year as a result of increased performance fee allocations. Interest expense for the year ended December 31, 2023 was flat as compared to the prior year. Interest income increased as a result of higher balances in interest-bearing accounts during the year.
Other Income (Expense), Net For the Years Ended December 31, (in thousands) 2022 2021 2022 vs. 2021 ($) 2022 vs. 2021 (%) Other income (expense), net $ 260 $ 190 $ 70 36.8 % Interest income 24 7 17 242.9 % Interest expense (416 ) (383 ) (33 ) 8.6 % Equity income from investments (31 ) 1,534 (1,565 ) -102.0 % Total other income (expense), net $ (163 ) $ 1,348 $ (1,511 ) -112.1 % For the Years Ended December 31, (in thousands) 2021 2020 2021 vs. 2020 ($) 2021 vs. 2020 (%) Other income (expense), net $ 190 $ 243 $ (53 ) -21.8 % Interest income 7 13 (6 ) -46.2 % Interest expense (383 ) (563 ) 180 -32.0 % Equity income from investments 1,534 898 636 70.8 % Total other income (expense), net $ 1,348 $ 591 $ 757 128.1 % 48 Year Ended December 31, 2022 versus Year Ended December 31, 2021 Other income (expense), net decreased by $1.5 million, or 112.1% to ($0.2) million for the year ended December 31, 2022 from $1.3 million for the year ended December 31, 2021.
Other Income (Expense), Net For the Years Ended December 31, (in thousands) 2023 2022 2023 vs. 2022 ($) 2023 vs. 2022 (%) Other income (expense), net $ 76 $ 260 $ (184 ) -70.8 % Interest income 946 24 922 NM Interest expense (421 ) (416 ) (5 ) 1.2 % Equity income from investments 73 (31 ) 104 NM Total other income (expense), net $ 674 $ (163 ) $ 837 NM 48 For the Years Ended December 31, (in thousands) 2022 2021 2022 vs. 2021 ($) 2022 vs. 2021 (%) Other income (expense), net $ 260 $ 190 $ 70 36.8 % Interest income 24 7 17 242.9 % Interest expense (416 ) (383 ) (33 ) 8.6 % Equity income from investments (31 ) 1,534 (1,565 ) -102.0 % Total other income (expense), net $ (163 ) $ 1,348 $ (1,511 ) -112.1 % NM = Not Meaningful Year Ended December 31, 2023 versus Year Ended December 31, 2022 Other income (expense), net increased by $0.8 million to $0.7 million for the year ended December 31, 2023 from ($0.2) million for the year ended December 31, 2022.
Our fee for monitoring non-discretionary assets can range from 0.05% to 0.01%, but can also be incorporated into an agreed-upon fixed family office service fee.
Our fee for monitoring non-discretionary assets can range from 0.05% to 0.01%, but can also be incorporated into an agreed-upon fixed family office service fee. The majority of our client relationships pay a blended fee rate because they are invested in multiple strategies.
We have experienced, and expect to continue to experience, a general rise in compensation and benefits expense commensurate with growth in headcount and with the need to maintain competitive compensation levels. 41 The components of our compensation and benefits expenses for the years ended December 31, 2022, 2021 and 2020 are as follows: For the Year Ended December 31, (in thousands) 2022 2021 2020 Cash compensation and benefits (1) $ 70,461 $ 71,138 $ 61,720 Non-cash equity-based compensation expense 1,149 1,426 659 Total compensation expense $ 71,610 $ 72,564 $ 62,379 (1) For the years ended December 31, 2022, 2021 and 2020, $32,262, $34,781 and $27,467 of partner incentive payments were included in cash compensation and benefits expense, respectively.
The components of our compensation and benefits expenses for the years ended December 31, 2023, 2022 and 2021 are as follows: For the Year Ended December 31, (in thousands) 2023 2022 2021 Cash compensation and benefits (1) $ 70,992 $ 70,461 $ 71,138 Non-cash equity-based compensation expense 1,627 1,149 1,426 Total compensation expense $ 72,619 $ 71,610 $ 72,564 (1) For the years ended December 31, 2023, 2022 and 2021, $31,289, $32,262 and $34,781 of partner incentive payments were included in cash compensation and benefits expense, respectively.
Other Income Other income is derived primarily from investment income arising from our investments in various private investment funds that were established as part of our investment strategies. We expect the investment components of other income, in the aggregate, to fluctuate based on market conditions and the success of our investment strategies.
We expect the investment components of other income, in the aggregate, to fluctuate based on market conditions and the success of our investment strategies.
“Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.
“Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8.
Interest income decreased as a result of lower balances on notes receivable as a result of scheduled repayments. Provision for Income Taxes Year Ended December 31, 2022 versus Year Ended December 31, 2021 The provision for income taxes was $7.6 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively.
Interest income increased as a result of higher balances in interest-bearing accounts during the year. Provision for Income Taxes Year Ended December 31, 2023 versus Year Ended December 31, 2022 The provision for income taxes was $4.3 million and $7.6 million for the years ended December 31, 2023 and 2022, respectively.
Seasonality typically affects cash flow since the first quarter of each year, includes as a source of cash, the prior year’s annual performance fee payments, if any, from our various funds and external investment strategies and, as a use of cash, the prior fiscal year’s incentive compensation.
We will primarily use cash flow from operations to pay compensation and related expenses, general and administrative expenses, income taxes, debt service, capital expenditures, distributions to Class B unit holders and dividends on shares of our Class A common stock. 52 Seasonality typically affects cash flow since the first quarter of each year, includes as a source of cash, the prior year’s annual performance fee payments, if any, from our various funds and external investment strategies and, as a use of cash, the prior fiscal year’s incentive compensation.
With respect to our discretionary assets under management, most of our increase came from our REIT, energy infrastructure, multi cap value and large cap value strategies with composite returns of 38.6%, 36.9%, 32.9% and 31.5%, respectively, for the year ended December 31, 2021.
With respect to our discretionary assets under management, most of our decrease came from our large cap growth, multi cap growth, international small cap value and core international strategies with composite returns of 36.0%, 29.1%, 28.8%, and 26.8%, respectively, for the year ended December 31, 2023.
Payments of contingent purchase price consideration totaled $3.0 million and $0.7 million in 2021 and 2020, respectively. We anticipate that distributions to principals of Silvercrest L.P. will continue to be a material use of our cash resources, and will vary in amount and timing based on our operating results and dividend policy.
We anticipate that distributions to principals of Silvercrest L.P. will continue to be a material use of our cash resources, and will vary in amount and timing based on our operating results and dividend policy. As of December 31, 2023 and 2022, $2.7 million and $6.3 was outstanding under our term loan with City National Bank.
Payments received from partners on notes receivable was $0.2 million in 2021 and $0.3 million in 2020. Distributions to partners of Silvercrest L.P. of $6.7 million and $6.3 million were paid during 2021 and 2020, respectively. Repayment of borrowings under the credit facility was $3.6 million in both 2021 and 2020.
Dividends of $7.0 million and $6.8 million were paid during 2023 and 2022, respectively, to Class A shareholders. Payments received from partners on notes receivable was $0.1 million and $0.2 million during 2023 and 2022, respectively. Distributions to partners of Silvercrest L.P. of $7.8 million and $7.9 million were paid during 2023 and 2022, respectively.
The increase was primarily attributable to increases in the fair value of contingent consideration related to the Cortina Acquisition of $4.6 million, professional fees of $0.1 million, portfolio and systems expenses of $0.4 million, sub-advisory and referrals fees of $0.1 million, insurance costs of $0.1 million, marketing and advertising costs of $0.1 million, administrative costs of $0.1 million and charitable donations of $0.1 million.
The increase was primarily attributable to increases in the fair value of contingent consideration related to the Cortina Acquisition of $11.8 million and the Neosho Acquisition of $0.3 million, portfolio and systems expenses of $0.5 million, occupancy and related costs of $0.2 million, marketing costs of $0.2 million, depreciation and amortization of $0.1 million and office expense of $0.1 million.
The majority of our client relationships pay a blended fee rate because they are invested in multiple strategies. 40 Management fees earned on investment funds that we advise are calculated primarily based on the net assets of the funds.
Management fees earned on investment funds that we advise are calculated primarily based on the net assets of the funds.
Year Ended December 31, 2021 versus Year Ended December 31, 2020 Total expenses increased by $15.4 million, or 17.9%, to $101.1 million for the year ended December 31, 2021 from $85.7 million for the year ended December 31, 2020.
Year Ended December 31, 2023 versus Year Ended December 31, 2022 Total expenses increased by $13.9 million, or 16.5%, to $98.6 million for the year ended December 31, 2023 from $84.7 million for the year ended December 31, 2022.
In 2020, represents 51 legal and other professional fees of $90, insurance costs of $45 related to the acquisition of Cortina, and costs related to the integration of Cortina’s operations of $215.
In 2022, represents insurance costs of $22 and professional fees of $15 related to the acquisition of Cortina.
On June 17, 2022, the revolving credit facility was further amended to extend the maturity date to June 18, 2023 and amended to replace LIBOR terms with SOFR.
On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company’s subsidiaries. On June 15, 2023, the revolving credit facility was further amended to extend the maturity date to June 18, 2024.
This difference is primarily the result of increases in net income of $11.0 million, non-cash lease expense of $1.6 million, depreciation and amortization expense of $0.9 million primarily as a result of the Cortina Acquisition and the completion of renovations to our offices, equity-based compensation expense of $1.0 million, accounts payable and accrued expenses of $6.8 million, primarily due to a change in the fair value of contingent consideration related to the Cortina Acquisition and accrued compensation of $17.6 million.
These decreases were partially offset by a change in the TRA liability of $0.2 million, a change in prepaid and other assets of $2.6 million, and increases in non-cash lease expense of $1.6 million, equity-based compensation expense of $0.5 million, accounts payable and accrued expenses of $12.4 million, primarily due to a change in the fair value of contingent consideration related to the Cortina and Neosho Acquisitions and depreciation and amortization of $0.1 million.
Family office services revenue increased by $0.3 million, or 7.9% to $4.5 million for the year ended December 31, 2021, from $4.2 million for the year ended December 31, 2020. Performance fee revenue increased from $0 for the year ended December 31, 2020 to $0.1 million for the year ended December 31, 2021.
Family office services revenue remained flat at $4.2 million for the years ended December 31, 2022 and 2021. Performance fee revenue was $0 and $0.1 million for the years ended December 31, 2022 and 2021.
As of December 31, 2022 and 2021, $6.3 million and $9.0 was outstanding under our term loan with City National Bank. As of December 31, 2022 and 2021, there were no borrowings outstanding on our revolving credit facility with City National Bank.
As of December 31, 2023 and 2022, there were no borrowings outstanding on our revolving credit facility with City National Bank. Off-Balance Sheet Arrangements We did not have any significant off-balance sheet arrangements as of December 31, 2023 or December 31, 2022.
In 2021, represents equity-based compensation of $300 related to restricted stock unit grants issued to two associates hired as part of the Cortina Acquisition in conjunction with their admission to Silvercrest L.P., insurance costs of $45 and professional fees of $18 related to the Cortina Acquisition.
In 2021, represents equity-based compensation of $300 related to restricted stock unit grants issued to two associates hired as part of the Cortina Acquisition in conjunction with their admission to Silvercrest L.P., insurance costs of $45 and professional fees of $18 related to the Cortina Acquisition. 51 (b) In 2023, represents a variable compensation payment of $1,667 related to the difference between the number of non-qualified stock options granted to an existing Class B unit holder as determined using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input, an adjustment to the fair value of the tax receivable agreement of $2, an ASC 842 (see Note 2.
Interest income increased as a result of higher balances in interest-bearing accounts during the year. Year Ended December 31, 2021 versus Year Ended December 31, 2020 Other income (expense), net increased by $0.8 million, or 128.1% to $1.4 million for the year ended December 31, 2021 from $0.6 million for the year ended December 31, 2020.
Year Ended December 31, 2022 versus Year Ended December 31, 2021 Other income (expense), net decreased by $1.5 million, or 112.1% to ($0.2) million for the year ended December 31, 2022 from $1.3 million for the year ended December 31, 2021.
Year Ended December 31, 2021 versus Year Ended December 31, 2020 Our total revenue increased by $23.6 million, or 21.9%, to $131.6 million for year ended December 31, 2021, from $108.0 million for year ended December 31, 2020.
Year Ended December 31, 2023 versus Year Ended December 31, 2022 Our total revenue decreased by $5.8 million, or 4.7%, to $117.4 million for year ended December 31, 2023, from $123.2 million for year ended December 31, 2022.
These increases were partially offset by an increase in equity income from investments of $1.5 million due to higher performance fee allocations, a change in the TRA liability of $0.1 million, and decreases in accounts receivable of $0.1 million due to timing of payments received from clients, deferred tax expense of $0.8 million, distributions received from investment funds of $0.9 million and operating lease liabilities of $1.2 million.
This difference is primarily the result of decreases in net income of $15.6 million, deferred tax expense of $1.8 million, operating lease liabilities of $0.5 million, a decrease in equity income from investments of $0.1 million, distributions received from investment funds of $1.4 million and accrued compensation of $0.4 million.
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