AlTi Global outlines cost reductions and $20M annual savings target as restructuring completes

Earnings Call Insights: AlTi Global, Inc. (ALTI) Q3 2025

MANAGEMENT VIEW

* CEO Michael Tiedemann emphasized the continued execution of AlTi's strategy, stating the focus remains on the core wealth management business, organizational simplification, and reducing structural costs to ensure earnings scale directly with revenue. He announced, "As previously disclosed, we placed our international real estate business in administration this quarter. The charges associated with placing under administration will be our final restructuring charges related to it, and the business will no longer take management attention going forward. This results in cleaner financials and bottom line improvements as we move ahead."
* Tiedemann highlighted a move to a single reporting segment for improved transparency and evaluation of operating leverage. He expressed confidence in the global platform, citing a client retention rate of approximately 96% and an average AUM per client above $50 million, stating, "These long-standing relationships are built on a foundation of trust and their wealth compounds over time through market cycles with diversified exposures to both public and private markets."
* The CEO referenced a partnership with Allianz in private credit as "a perfect example" of leveraging scale for client benefit and discussed international and U.S. organic growth momentum, with substantial asset inflows and a robust pipeline.
* Tiedemann outlined four distinct client segments—women who manage wealth, family offices, endowments and foundations, and established wealth—as key areas for growth focus, noting that "early indicators are positive, collaboration is accelerating."
* CFO Michael Harrington explained, "Our international real estate business being placed under administration in July qualified it to be presented as discontinued operations...we have unified our financial reporting into a single segment."
* Harrington noted that revenues for the third quarter were $57 million, with 95% recurring, and AUM reached $49 billion. He stated, "Operating expenses for the quarter were $86 million, up from $61 million in the prior year period. The increase was largely driven by nonrecurring noncash charges."

OUTLOOK

* Management described continued cost discipline, with zero-based budgeting initiatives expected to generate about $20 million in recurring annual gross savings across non-compensation categories by the end of 2026.
* Tiedemann commented, "As new mandates and assets move into billing, revenue growth will convert into margin expansion. With the firm now squarely focused on organic and strategic growth within our core segment, we expect results to reflect this clearly as we move forward."
* Harrington noted, "We got a lot of confidence in terms of how we're managing cost and the direction that those costs are headed...the pipeline activity is very strong."
* No explicit forward guidance or numerical projections for EPS or revenues were provided.

FINANCIAL RESULTS

* CFO Harrington reported consolidated revenue of $57 million for the quarter, up 10% year-over-year and 9% sequentially, led by management fees of $52 million and supported by robust asset growth.
* Assets under management reached $49 billion, up 6% year-over-year and 4% sequentially.
* Operating expenses were $86 million, including $4 million client redress provision and $16 million write-off related to the exited international real estate business. Excluding these items, normalized operating expenses were $51 million.
* Adjusted EBITDA was $6 million, compared to $12 million in the prior year period. Harrington stated, "Importantly, nearly all of the $93 million in EBITDA adjustments, approximately $87 million, are noncash in nature."
* The company reported a net loss of $107 million for the quarter, primarily due to nonrecurring charges, and adjusted net income of $1 million.

Q&A

* Wilma Jackson Burdis, Raymond James: Asked about normalized EBITDA and restructuring completion. Harrington responded that, "you should add that back. I mean going to my comments around the adjusted EBITDA, I think that's what you should focus on. That's what's been normalized."
* Burdis asked for guidance on a normalized EBITDA run rate. Harrington advised, "I'd build off the $6 million number we were providing as adjusted and then expand off of that number."
* Burdis inquired about cash flows. Harrington replied, "we did consume some cash this period...on a go-forward basis, I expect cash to -- our cash and our cash flow to improve just based on the performance of the business improving."
* Burdis questioned the impairment in the arbitrage fund, with Harrington explaining, "the strategy is doing very well. It just didn't grow last year, actually shrank."
* Burdis asked about additional restructuring needs, with Harrington stating, "Not that I'm aware of, no."
* Burdis asked about buyback plans and noncore divestitures. Tiedemann said buybacks are "on the list of topics to be discussed with the Board in our next meeting" and asset optimization is continuously evaluated, "but nothing to be announced."
* Burdis requested an update on the pipeline. Tiedemann described a global pipeline, focus on densifying existing jurisdictions, and interest in Middle East expansion.
* Christoph Kotowski, Oppenheimer: Asked about the impairment and Kontora integration. Harrington confirmed, "Intangible related to the investment management contract." Tiedemann stated, "The integration is going very well...there have been some big -- actually some collaborations already and some early wins that were meaningful."
* Kotowski sought clarification on the U.K. administration timeline and litigation exposure. Harrington explained AlTi's support will end December 2027, after which "we will not be obliged to" continue support; legal matters related to the international real estate business are now the responsibility of the administrator.

SENTIMENT ANALYSIS

* Analysts focused on normalization of earnings, restructuring completeness, and cash flow, with a neutral to slightly positive tone, reflecting a desire for clarity and guidance; no overt skepticism was present.
* Management maintained a confident, disciplined tone throughout, highlighting cost control and growth initiatives; during Q&A, responses indicated confidence but avoided giving explicit forward-looking guidance, with phrases such as "we got a lot of confidence," and "we feel good about what's coming online."
* Compared to the previous quarter, management's tone was more assured regarding the completion of restructuring and the tangible impact of cost reduction initiatives, while analysts remained focused on operational clarity and forward earnings potential.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter marks the completion of the international real estate business restructuring, while the previous quarter discussed the initiation of this process and anticipated cost savings.
* Guidance language shifted from expectation of future savings to confirmation of realized and upcoming cost reductions.
* Strategic focus sharpened on core wealth management, with more specific segmentation and pricing enhancements mentioned this quarter.
* Analysts' questions evolved from seeking details on restructuring impact in Q2 to clarifying normalized earnings and cash flow trends in Q3.
* The management's confidence in operational discipline and organic growth was more pronounced in the current call.

RISKS AND CONCERNS

* Management noted nonrecurring noncash charges and the risk of further impairments, but emphasized that "these nonrecurring costs should not mask the encouraging quarter-over-quarter trends on a normalized basis."
* The company will provide financial support to the international real estate business through December 2027, but legal and other exposures have been transferred to the administrator.
* Analysts sought assurance that further restructuring is not anticipated and queried about future capital allocation and noncore asset divestitures; management confirmed ongoing evaluations but no immediate changes.

FINAL TAKEAWAY

AlTi Global management highlighted the completion of major restructuring efforts, with a structurally lower cost base and a streamlined platform now focused on core wealth management. The company expects to realize approximately $20 million in annual savings from ongoing zero-based budgeting initiatives by the end of 2026, while organic growth and pipeline strength in both the U.S. and international markets underpin confidence in sustainable margin expansion moving forward. Management reiterated that one-time charges this quarter are nonrecurring, and the platform is positioned for operational leverage, margin growth, and long-term value creation as new mandates and assets are onboarded.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/alti/earnings/transcripts]

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