AlTi Q4 2025 Earnings Call - CEO Transition, Incentive Fees and ZBB Set Stage for 2026 Turning Point

Operator: Good morning. At this time, I would like to welcome everyone to AlTi’s fourth quarter 2025 earnings conference call. During the call, your lines will remain in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. I would like to advise all parties that this conference call is being recorded, and a replay of the webcast is available on AlTi’s investor relations website. Now, at this time, I will turn things over to Lily Arteaga, Head of Investor Relations for AlTi. Please go ahead.

Lily Arteaga, Head of Investor Relations, AlTi: Good morning to everyone on the call today. Today, we will hear from Michael Tiedemann, Nancy Curtin, and Mike Harrington. Nancy and Mike Harrington, along with Kevin Moran, our President and COO, will be available to take questions during Q&A. I would like to remind everyone that certain statements made during the call may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, comments made during the prepared remarks and in response to questions. Forward-looking statements can be identified by the use of words such as anticipate, believe, continue, estimate, expect, future, intend, may, planned, and will, or similar terms. Because these forward-looking statements involve both known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these statements.

For a discussion of the risks and uncertainties that could cause actual results to differ, please refer to AlTi’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. AlTi assumes no obligation or responsibility to update any forward-looking statements. During this call, some comments may include references to non-GAAP financial measures. Full reconciliations can be found in our earnings presentation and our related SEC filings. With that, I’d like to turn the call over to Michael Tiedemann.

Michael Tiedemann, Chief Executive Officer (Outgoing), AlTi: Thank you, Lily, and good morning, everyone. Before we begin, I would like to reflect on where AlTi stands today, 3 years since our listing. In early 2023, we entered the public markets with a clear ambition: to build the premier global wealth management platform focused on the fastest-growing segment of the wealth landscape, the ultra-high net worth segment. I feel immense pride in what we’ve accomplished over this period and believe our team has created the most complete high-end investment solution set for large and complex families that exists. Today, AlTi delivers full-service global wealth management solutions in 19 cities across 9 countries. Since our listing, we’ve grown our AUM and our wealth platform by 70% while maintaining industry-leading client retention rates above 95%.

We are established in the highest end of the wealth market, with clients that average assets in excess of $50 million, a number that continues to rise as our prospects grow in size over time. Our team and the platform we have built is positioned to perform over both the near and long term. Now, I want to turn to an important update, which also was announced earlier this morning with our earnings press release. After more than 25 years leading the company, I will be stepping down as CEO, and Nancy Curtin, our Global Chief Investment Officer, will become Interim CEO. I’ve known Nancy for many years, and her leadership has been pivotal to the success of our business. I am confident the company is in capable hands and will continue to be supporting Nancy to ensure a smooth transition.

Importantly, we’ve built a world-class team uniquely able to serve the most sophisticated client base in wealth management. I have immense respect and admiration for my colleagues all over the world for the dedication they have to serving our clients. Their relentless collaboration defines our corporate culture as a firm. Lastly, I would be remiss not to thank our incredible and loyal client base who’ve placed their trust in AlTi over the years, allowing us to serve their families across generations. With that, I will turn the call over to Nancy and the leadership team for their prepared remarks in today’s subsequent Q&A session. Thank you.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Thank you, Michael. I’m grateful for the opportunity to step into this role and to work with our talented professionals and global leadership team as we continue to drive the business forward. I also want to personally thank Michael for his many years of dedication and focus, which has laid an excellent foundation to advance the company into its next chapter. As he mentioned, AlTi was built to serve the most sophisticated segment of the wealth market. This segment is looking for what we can deliver, holistic and independent approach to complex wealth management, where client needs span family governance and education, tax and structuring, and multiple generations and jurisdictions. We’ve been doing this for over two decades and are one of the few firms truly able to deliver customized solutions on a global basis. We’re proud of what we’ve built.

Lily Arteaga, Head of Investor Relations, AlTi: The same investment discipline and long-term client-centric approach also underpins how we serve clients on the platform today. Alongside our work with families, we have leveraged our institutional capabilities to build a leading global endowment and foundation, or E&F business, using our institutional investment management platform and capabilities. This complementary and growing practice has grown to more than $8 billion in assets under management at year-end 2025, largely serving private and family foundations, and we view it as a natural extension of our wealth management business. Building on that foundation, growth across the platform has been strong. Since our listing, organic growth has been driven by both new client additions and continued expansion of existing relationships as families, endowments, and foundations increase the scope of their engagement with AlTi over time.

Over the past 3 years, we’ve generated over $9 billion of projected billable assets, including nearly $4 billion added in 2025 alone, reflecting sustained demand from ultra-high net worth and institutional clients across our U.S. and international businesses. At the same time, we’ve been deliberate in where we focus the business. Over the past 3 years, and especially in 2025, we have remained firmly focused on our core wealth and institutional management business with continued emphasis on delivering excellence in client service. In parallel, we’ve taken meaningful steps to simplify the organization and address non-core costs, actions that are enabling continued investment in our platform and positioning earnings to scale over time as these initiatives progress.

As part of that focus, a comprehensive strategic assessment led to the exit of our non-core International Real Estate business in 2025, eliminating the future costs and obligations associated with that platform. Complementing these efforts, we have adopted zero-based budgeting process as our budget methodology. Through the 2025 and 2026 process, ZBB has enabled us to identify approximately $20 million of recurring annual gross savings, with the majority expected to be realized by year-end 2026. Separately, our investments in alternative strategies continues to strengthen our capital and liquidity position and made a meaningful contribution to our results in 2025. Our interests in these internally and externally managed strategies provide a complementary source of cash flow to our core wealth and institutional management businesses and support future growth initiatives within that segment. With that context, I want to turn to our result highlights for the year.

In 2025, AlTi generated $255 million in total revenues, representing 29% growth compared to 2024. Total revenues benefited from contributions from our alternative interests, while the core of our revenue base remained anchored in nearly $200 million of predictable recurring management fees. Adjusted EBITDA reached $35 million for the year. As we look ahead, we are increasingly excited by the opportunities to continue to grow organically while continuing to streamline the cost basis of the firm. With the platform now simplified following the restructuring of our non-core International Real Estate business, we expect our results to increasingly reflect the strong fundamentals of the company. In closing, I want to provide an update on our strategic review. As announced in December, a special committee was formed to review strategic options to maximize long-term value for shareholders.

To date, the special committee has not received a proposal that it believes encapsulates the long-term value of the business, and it continues to evaluate a full range of alternatives with a clear focus on enhancing shareholder value informed by our clear strategy, strong management team, and simplified platform. If any proposal is received from any party, the committee will evaluate it consistently with its fiduciary duties. With that, I’ll turn over to Mike Harrington to walk through the financials. Mike?

Mike Harrington, Chief Financial Officer, AlTi: Thanks, Nancy. We made significant progress in 2025, and we expect to see the benefits of that progress in 2026. The exit of non-core activity is now complete, and the impact of zero-based budgeting is beginning to show. We believe the strength of our business will become increasingly evident in the years ahead. Total assets under management reached $50 billion at year-end, up 10% year-over-year, driven by strong investment performance and the acquisition of Kontora. That growth was achieved despite a more muted market impact in the international business stemming from foreign exchange headwinds related to the U.S. dollar depreciation, given that growth assets within these portfolios are typically unhedged. For the full year of 2025, AlTi generated approximately $255 million of total revenue, representing 29% year-over-year growth.

The increase was driven by robust AUM expansion, along with meaningful contributions from incentive fees, reflecting the strong investment performance throughout the year across the alternatives managers in which we hold ownership stakes. Fourth quarter revenue totaled $88 million, up 71% from the prior quarter, reflecting continued AUM growth and a $29 million contribution from incentive fees associated with the strong performance of the arbitrage strategy in 2025, which generated an 11.3% return for the year. Stepping back from the contribution of incentive fees in the year, the underlying strength of our business continues to be reflected in the growth of our recurring management fees.

Management fees totaled nearly $200 million in the year, up 9% year-over-year, and $53 million in the fourth quarter, up 14% compared to the same period in 2024, supported by sustained asset growth. Before turning to expenses, I want to highlight some important nuances in our financials. The results we’re presenting today continue to reflect a lag in actions taken and costs incurred in 2025. As a result, the operating leverage of the business is not yet visible. That said, revenue growth remains strong and we are seeing benefits from zero-based budgeting in areas such as occupancy, systems, and marketing. At this stage, however, those benefits are being offset in our reported results by discrete one-time items, including temporary costs associated with the strategic review process.

We expect these costs to subside in the coming periods and allow the underlying expense trends to become clearer. For the full year, reported operating expenses increased by $72 million to $329 million. The increase was largely driven by higher compensation costs, inclusive of an approximately $14 million bonus accrued associated with the arbitrage incentive fee recorded in Q4, the integration of Kontora in 2025, and other one-time items related to the strategic review process, zero-based budgeting program, and the exit of the International Real Estate business. On a normalized basis, excluding non-recurring and non-cash items, as well as the arbitrage incentive fee bonus accrual, full year operating expenses were $205 million compared to $182 million in 2024.

Increase primarily reflects higher compensation costs, including the effect of a Kontora acquisition, increased professional fees and G&A expenses driven partially by the strategic review process as well as foreign exchange and VAT. Beneath these temporary and non-core items, our cost structure is improving. As zero-based budgeting initiatives continue to progress and non-core items roll off, we expect these improvements to come increasingly visible in our reported results. For the full year, Adjusted EBITDA increased 45% to approximately $35 million, reflecting the contribution from incentive-related performance during the year. Adjusted EBITDA for the quarter was $11 million, nearly doubling sequentially, largely driven by the net contribution from the incentive fee. Adjusted EBITDA margins were 14% for the year and 13% for the quarter.

On a GAAP basis, we reported a net loss of $155 million for the year and $15 million for the quarter, driven largely by non-cash non-recurring items. For the full year, other loss was $31 million, primarily attributable to a $35 million impairment charge of the arbitrage fund recorded in Q3. In the fourth quarter, we recorded a loss of $8 million, reflecting fair value adjustments on certain items. Looking ahead, we expect 2026 to mark a turning point for the business. As initiatives continue to take hold, progress should become increasingly evident in our normalized results, supported by additional savings from optimizing office occupancy and completing the wind down of legacy technology and vendor contracts.

As revenues continue to grow and the platform scales, the impact of zero-based budgeting and platform efficiencies should become clearer, allowing the financial profile of the business to reflect its underlying strength. With a focused strategy, durable client relationships, and a simplified operating model, we believe AlTi is well positioned to deliver sustained growth and increased profitability over time. With that, I’ll turn it back to Nancy Curtain for her closing remarks.

Lily Arteaga, Head of Investor Relations, AlTi: Thank you, Mike. 2025 was a critical year for AlTi. While we continue to grow our business and deliver for our clients, we also made necessary decisions to simplify the business, sharpen our focus, and position the firm for long-term value creation. As a result, we enter 2026 with a cleaner structure, a stronger operating model, and a platform aligned around recurring revenue wealth and investment management. Thank you for your continued interest and support. We look forward to updating you on our progress in the quarters ahead. I’m now turning it over to the operator for questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Wilma Burdis with Raymond James.

Wilma Burdis, Analyst, Raymond James: Hey, good morning. Could you provide a little bit more color on the decision to transition CEOs, and just talk about what the search process looks like from here? Thanks.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Well, first of all, Wilma, it’s Nancy, and thank you very much for your support of the company. I think, it was a bit broken up, but I think you asked the question, can we give a little more color on the transition process? Is that right?

Wilma Burdis, Analyst, Raymond James: Yes.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Yeah. Okay, great. It was a thoughtful discussion, as you can imagine, between the board and management, as part of AlTi’s ongoing focus, and next phase of growth. I think we just decided it was the right time to appoint a new leader for AlTi’s next chapter, in growth ahead and continuing to execute our strategy. I want to say upfront that while there’s a change in leadership, obviously myself, you know, our overall strategy, of being a preeminent ultra high net worth firm operating on a global basis, with excellent client service, independent advice, and all those characteristics, that both Mike and I spoke to, that remains. You know, continuity, momentum, and the strategy that’s already in place is absolutely what we aim to continue to deliver on.

Mike, Wilma might be helpful, just to turn to Kevin, who’s sitting next to me as well, and he can comment on it. Kevin and I are working side by side, and we look forward to the partnership together.

Kevin Moran, President and Chief Operating Officer, AlTi: Thanks, Nancy. Wilma, I’ve spoken to you in the past on some of these calls. As I think you know, myself, Nancy, Michael Tiedemann, like, the management team here at the firm has been together for a very long time. I’ve been with the firm for about 18 years. That’s the case for many at the management level. As Nancy says, we believe in the strategy. There will be continued execution on the go-forward strategy that Michael Tiedemann put in place, you know, 25 years ago when he launched what was at that point Tiedemann Advisors. We at the management team, it’s a very cohesive, long tenured team, and we remain absolutely focused on continuing to grow and execute the business strategy that Nancy and Michael Tiedemann laid out in their remarks.

Wilma Burdis, Analyst, Raymond James: Great. I think you made a few comments on the process on the call, but can you just give us an update? I mean, it sounds like is this more of a pivot towards focusing on operating? Can you just talk a little bit more about, you know, how that all fits together? Thanks.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Let me think, Wilma. I think what you’re saying, again, it’s strange times. I think the strategy of being the preeminent global leader executing in a marketplace that is growing with ultra-high net worth, huge intergenerational wealth transfer, and our already existing excellent clients that we have in place remains unchanged. Let me turn to Kevin because a core part of that is of course growing our business organically and from time to time, opportunistically and strategically looking at inorganic, but there’s nothing on the horizon at the moment. Also continuing to be mindful of ZBB, which is a core part of our cost discipline and process, and continuing to think about how we scale the business.

Let me turn to Kevin to pick up on that because he’s really led that over the last couple of years.

Kevin Moran, President and Chief Operating Officer, AlTi: Sure. Thanks, Nancy. We’re very focused, as we’ve talked about on previous calls, I think as Mike talked again about today on further optimizing our cost structure. What we’re really looking to do is make sure that our cost structure is as optimized as possible to allow us to continue to scale the business. We’re very focused on the cost structure, but at the same time we’re very focused on growth. Organic growth for us is really the hallmark of a really healthy business, and we’re very focused on continuing. We think we have a terrific service model and then one of the best platforms for servicing the ultra-high net worth client base that exists globally, certainly United States and elsewhere.

We’re very confident in our ability to win business and bring on clients and service those in the best way possible in the industry. That’s on the growth side. Nancy said we’re uniquely positioned to also execute inorganic growth, both in the United States and elsewhere. We have a just a terrific opportunity set in terms of both growing organically and inorganically. At the same time, we are surely not taking our eye off the ball on the expense side. We’re gonna make investments. We’re seeing that on the technology side. We’re making technology investments that we think will drive efficiencies over time, think of everything from mid to back office and even on the front office side, there’s a lot to do in AI and technology initiatives.

At the same time, looking to really streamline the rest of our non-comp costs. We’ve been really proactive around occupancy as an example, and you’re seeing that in the numbers. We’re gonna continue to make sure that we’re right sizing our occupancy expense. Then the major where you’re gonna see continued improvements is on tech spend. Eventually we’re investing into technology. We’re also actively managing the technology spend. As some contracts wear off, you’ll see continued improvement on the tech spend. Professional fees, again, that’s where, you know, Mike had his remarks talking about some of the noise that we’ve seen through from costs related to the strategic initiatives and elsewhere. As those one-time expenses come off, you’ll also see improvement on the professional fees.

It’s a management team that’s very focused on both the top line growth as well as bottom line improvement on the expense side.

Wilma Burdis, Analyst, Raymond James: Great. Thank you. It looked like you had pretty solid merger arbitrage performance in the quarter. Maybe give us a little bit more color on that. Thanks.

Kevin Moran, President and Chief Operating Officer, AlTi: The merger arbitrage strategy has been operating for a very long time. 2025 had a strong year, so I think performance was up a little over 11% for the year. That correlated to, obviously, improving management fees, which are based upon improving AUM growth, as well as a strong incentive fee. As you know, the incentive fees for that are crystallized at the end of the year. Those, you know, based upon the performance for the full year, we earned a pretty strong incentive fee for 2025. We don’t have a view on 2026 because, again, we don’t know what performance will be for the strategy. That strategy has a very long track record of doing pretty well in most market environments.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: I guess I would just add to that, Wilma. I mean, we’ll have to see what happens, of course, with the conflict in the Middle East, but M&A activity is broadly picking up both the volume and value of transactions, and this represents a pretty ripe opportunity for the arbitrage strategy. You know, we’ll see what happens this year, but it’s a good indicator. He manages to produce performance in all sorts of years. I would say, M&A activity, it looks like again, assuming we get through the conflict, will be a strong year in 2026.

Wilma Burdis, Analyst, Raymond James: Okay, great. It looked like there were some pretty solid additions in AUA. Can you just touch on that a little bit?

Kevin Moran, President and Chief Operating Officer, AlTi: Yes. What I think you’re seeing on the AUA growth, you have the Kontora acquisition. That was the acquisition of the German multi-family office that we completed last April that led to increased, obviously, revenue. Our revenue numbers increased as a result of that transaction. But also they have their business, multi-family office. They have AUM and the AUA. You’re seeing the uptick in the AUA really from that acquisition. Part of the business strategy behind that acquisition was over time to convert their AUA assets to AUM assets, which we have had a very long successful track record to be able to do with the rest of the business. That was really the main driver in the AUA uptake in 2025.

Wilma Burdis, Analyst, Raymond James: I guess drilling into that a little bit more. I think there was some AUA that was added in Q4. I was just curious on that.

Kevin Moran, President and Chief Operating Officer, AlTi: I think what you’re seeing there is just the typical sort of movement of client assets in and out of their portfolios. We, you know, we provide holistic services across a client’s entire network. Everything from real assets like real estate to investment assets. Nancy and the investment team have done a terrific job of managing client portfolios. I think there’s nothing unusual, it’s just, you know, as we particularly if we can bring on large clients, they may have at times very large AUA as opposed to AUM assets. Just think of AUA as really non-financial assets, just anything else an ultra-high-net-worth client could own. Real estate, artwork, collectibles, those would all be flowing into our AUA as opposed to our AUM.

It’s really core to the service model for us to be able to oversee and report, manage and advise on both the AUA and the AUM.

Wilma Burdis, Analyst, Raymond James: Could you give us a little more color on the 13D that was filed by Allianz? Thanks.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Yeah. Thank you for that question, Wilma. So as you know, Allianz has been a strategic partner of the firm for the last 18 months, and they filed the 13D. We have no further insight into what their intentions or plans are. From a regulatory perspective, if they have any plans to increase their engagement, they are required to file a 13D. They’ve been a trusted and excellent partner, and if they decide to move forward and we don’t have any visibility into that at this point, that could be welcome.

Of course, in any event, as you’re well aware, we have a special committee of the board of directors, and any kind of proposal about the company strategically would go into our special committee, who is comprised of the independent directors, to delivering the value for shareholders and representing all shareholders of the company. That’s all I can say at the moment. Thank you for the question.

Wilma Burdis, Analyst, Raymond James: Thank you. Then could you just give us a little bit more detail on ZBB, where you stand with that? What’s to come? What else you’re doing there? Thanks.

Kevin Moran, President and Chief Operating Officer, AlTi: Wilma, it’s Kevin again. I can take that one and Nancy or Mike may want to jump in. Zero-based budgeting is, I think, primarily one, the budgeting approach we’re taking going forward. The numbers, the $20 million number that we talked about was based upon the zero-based budgeting approach that we used for the 2024, for the 2025 budget. Of the $20 million, right, it’s really it was across the entire scope of non-comp expenses. The expenses that we identified were expected to be realized over probably about 9 quarters, going into the first quarter of 2027. The reason it’s an extended period of time is that a lot of those expenses are subject to contracts.

Think of anything from leases to technology vendors that, you know, as we identify and then we just don’t renew the contract, we have to wait till the contract itself, it runs out. What we saw in 2025 was really the non-contractual expenses. What Nancy talked about or Mike Harrington, we talked about things like, marketing, travel, entertainment, and tech expenses where we had contracts expire in 2025. That’s what we’ve seen so far. Same thing with occupancy. We made a significant improvement in reducing our occupancy expense. What we’ll see in 2026 is continued cost reductions around, technology and occupancy as we continue to move through, the leases and contracts that are expiring over the next 4-5 quarters.

Wilma Burdis, Analyst, Raymond James: Just following up on the earlier question on Allianz. Could you just remind us? It seemed like I thought Allianz had a multi-year standstill. Can you just remind us where that stands? I guess, no pun intended.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Yes. No, that’s. I’ll let Kevin take that. Kevin?

Kevin Moran, President and Chief Operating Officer, AlTi: Yes. Well, Allianz X, they did have a standstill, so they would need board approval or board consent for us to waive the standstill. So the standstill can be waived. They do have one in place, so they will discuss that with the special committee in terms of how to, you know, move forward, if they wish to do so.

Wilma Burdis, Analyst, Raymond James: Makes a lot of sense. Could you just give us a quick reminder of where you stand with capital and potential to grow, acquire, you know, new advisors or new, platforms? Thanks.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: That’s a core part of our strategy. It’s both organic, which is the priority, but of course, inorganic as well. Let me turn to Kevin on that so he can talk about the funding that we have and sources we have to continue to allow us to pursue inorganic opportunities. Kevin?

Kevin Moran, President and Chief Operating Officer, AlTi: Thanks, Nancy. Yes, on the organic side, we don’t see a need for funding to allow us to continue to execute on the organic growth initiatives. We have a terrific group of advisors and support staff and development teams globally to allow us to continue to pursue organic growth. We have, you know, in event we identify an attractive sort of M&A opportunity or a larger op you know, list out that would require capital, we have had discussions with capital providers and think that capital is readily available for us. We can execute on a great idea, and we can show a capital provider, you know, how accretive that transaction will be. To sum it up, on the organic side, we don’t see a need for capital at this time to continue to execute.

If and when we identify an inorganic opportunity, we are confident we’ll be able to raise capital to fund and execute on that.

Wilma Burdis, Analyst, Raymond James: Okay. Thank you. I can requeue potentially. Thanks.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Yeah.

Operator: As a reminder, that is star one if you would like to ask a question, and we’ll pause for just a moment. This now concludes our question and answer session. I would like to turn the floor back over to Nancy Curtin for closing comments.

Nancy Curtin, Global Chief Investment Officer / Interim Chief Executive Officer, AlTi: Thank you very much for joining us on the call this morning. Of course, we look forward to sharing updates on our progress on our first quarter call. Thank you for the excellent questions. Very much appreciated, and thank you for your time.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines and have a wonderful day.