AlTi Global, Inc. (ALTI) Q3 2025 Earnings Call Transcript
Consolidated Revenue $57 million, up 10% year-over-year and 9% sequentially, driven by continued momentum in the Wealth Management business. Growth was led by management fees of $52 million, up 7% versus last year, due to robust asset growth and an increase in incentive fees in the arbitrage fund.
Assets Under Management (AUM) $49 billion at quarter end, up 6% year-over-year and 4% sequentially, fueled by strong portfolio performance and the acquisition of Kontora last quarter.
Operating Expenses $86 million, up from $61 million in the prior year period. The increase was largely driven by nonrecurring noncash charges, including a $4 million client redress provision and a $16 million write-off of receivables due from the disposed international real estate business. Excluding onetime items, normalized operating expenses were $51 million versus $43 million in the third quarter of 2024.
Normalized Compensation Expenses $32 million compared to $28 million in the prior year period, primarily reflecting the inclusion of Kontora and the bonus provision associated with the arbitrage incentive fee.
Normalized Non-Compensation Expenses $19 million compared to $15 million in the prior year period, driven by Kontora's consolidation and higher professional fees and G&A expenses.
Consolidated Adjusted EBITDA $6 million compared to $12 million in the prior year period. The decrease reflects the full impact of Kontora, adding approximately $3 million in normalized costs, alongside higher professional fees and G&A expenses.
Net Loss (GAAP Basis) $107 million for the quarter, primarily reflecting noncash nonrecurring charges related to the exit of the international real estate business, the impairment of the arbitrage intangible, and the valuation allowance against the deferred tax asset.
Adjusted Net Income $1 million, excluding nonrecurring items.
Net Loss from Discontinued Operations $20 million for the quarter, reflecting the full impact of placing the International Real Estate division in administration.
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Pathstone Leverages AI to Enhance Client Acquisition, Securing 5 Inquiries from Billionaire Clients in Two Weeks
- Client Acquisition Strategy: Pathstone CEO Matthew Fleissig emphasizes that while AI can provide data on ultra-high-net-worth clients, true client acquisition relies on personalized services, such as arranging a private jet in under an hour, showcasing the firm's capabilities in the high-end market.
- Market Competition Analysis: Andrew Douglass from AlTi Tiedemann Global notes that over the past five years, client referrals and personal networks have accounted for 40% and 30% of their organic growth, respectively, highlighting the importance of building trust among high-net-worth clients.
- Limitations of AI Tools: Several high-end advisors express skepticism towards AI client prospecting tools, arguing that most are built on existing large language models and lack genuine competitive advantages, while also being costly.
- Growth Target Setting: AlTi Global aims to add 25 to 30 new clients annually, potentially bringing in $1.5 billion to $2 billion in new assets, demonstrating its growth potential in the high-end wealth management market.
Ultra-High-Net-Worth Client Acquisition: Referrals Outperform AI
- Client Acquisition Strategy: Despite market data firms promoting AI as key to acquiring ultra-high-net-worth clients, Pathstone's CEO Matthew Fleissig emphasizes that personalized service and referrals remain central to success, especially for clients with over $100 million in assets.
- Market Feedback: Andrew Douglass from AlTi Tiedemann Global notes that over the past five years, client referrals and personal networks accounted for 40% and 30% of their organic growth, highlighting the importance of traditional methods in high-end wealth management.
- Limitations of AI Tools: Several high-end advisors express skepticism towards AI client prospecting tools, arguing that most are built on widely available large language models and lack true competitive advantage, with cold emails failing to engage clients who already have advisors.
- Growth Targets: AlTi Global aims to add 25 to 30 new clients annually, potentially bringing in $1.5 billion to $2 billion in new assets, underscoring a strategy that prioritizes quality over quantity in the ultra-high-net-worth market.
