Sculptor Capital Management Inc
Sculptor Capital Management — Q1 2023 Earnings Presentation
34 slides from Sculptor Capital Management's earnings presentation, May 4, 2023
Slide 1: Sculptor Reports First Quarter 2023 Financial Results
Sculptor Reports First Quarter 2023 Financial Results May 4, 2023
Slide 2: Results announcement, dividend, conference call and About Sculptor
|2 New York - May 4, 2023 - Sculptor Capital Management, Inc. (NYSE: SCU) today reported its unaudited results for the first quarter of 2023. Dividend Sculptor has declared a cash dividend of $0.06 per Class A share to holders of record as of May 16, 2023, payable on May 23, 2023. Conference Call Sc
Slide 3: Forward-looking statements
|3 This press release and earnings presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company's current views with respect to, among other th
Slide 4: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results
Slide 5: Summary of GAAP and non-GAAP results
|5 (dollars in millions, except per share amounts) 1Q '23 4Q '22 1Q '22 GAAP Results Net Income Attributable to Sculptor Capital Management $ 9.7 $ 1.4 $ 13.8 Net Income Attributable to Class A Shareholders 8.5 1.7 16.9 Earnings per Class A Share - basic 0.34 0.07 0.63 Earnings (Loss) per Class A Sh
Slide 6: Fund performance, AUM, financial results and corporate actions
|6 ▪ Gross fund performance for the quarter1: – Sculptor Credit Opportunities Master Fund was up 3.6% – Customized Credit Focused Platform was up 4.1% – Master Fund was up 5.7% ▪ AUM was $36.1 billion, flat quarter-over-quarter ▪ Fee-paying AUM ("FP AUM") was $29.4 billion or 82% of total AUM ▪ Long
Slide 7: Fund Performance
|7 Fund Performance (as of March 31, 2023) 1Q 2023 FY 2022 5 Year Since Sculptor Fund Inception Sculptor Credit Opportunities Master Fund Gross (inception November 1, 2011)(a)(b) 3.6 % (3.2) % 6.0 % 12.6 % Sculptor Credit Opportunities Master Fund Net 3.1 % (4.1) % 3.7 % 8.9 % BAML Global High Yield
Slide 8: Assets Under Management
|8 37.4 36.8 36.0 32.2 30.1 29.4 24.9 25.1 26.0 11.5 9.7 9.3 11.2 9.5 9.2 0.7 0.5 0.4 6.5 6.0 5.9 6.0 5.5 5.3 4.7 4.6 4.8 15.1 16.5 16.3 11.1 11.2 11.2 15.1 15.6 16.3 4.3 4.6 4.5 3.9 3.9 3.8 4.4 4.4 4.5 Multi-strategy Opportunistic Credit ICS Real Estate 1Q 2022 4Q 2022 1Q 2023 1Q 2022 4Q 2022 1Q 20
Slide 9: Financial Results - First Quarter 2023 GAAP
|9 Financial Results - First Quarter 2023 GAAP For details on the additional underlying drivers of our revenue and expenses, see the Economic Income analysis on page 10. (dollars in millions, except per share amounts) 1Q '23 4Q '22 1Q '22 Revenues $ 113.2 $ 123.6 $ 97.3 Management fees 63.7 66.9 73.
Slide 10: Economic Income and Distributable Earnings
|10 (dollars in millions) 1Q '23 4Q '22 1Q '22 Revenues $ 105.6 $ 116.3 $ 90.8 Management fees 59.7 62.2 67.8 Incentive income 40.3 49.6 21.6 Other revenues 5.6 4.5 1.4 Expenses $ 87.0 $ 113.9 $ 61.6 Total compensation and benefits 53.8 79.4 39.2 Salaries and benefits 18.9 18.1 17.8 Bonus 34.9 61.3
Slide 11: Adjusted Net Assets
|11 (dollars in millions) 1Q ‘23 4Q '22 1Q '22 Summary Assets Cash, cash equivalents and U.S. government obligations, at fair value $ 221.8 $ 283.6 $ 136.0 Investments in funds, excluding employee-related investments 141.2 135.1 229.4 Investments in CLOs, net of financing 0.6 (1.7) 12.4 Summary Liab
Slide 12: Accrued but Unrecognized Incentive Income
|12 (dollars in millions) Opportunistic Credit Funds Real Estate Funds Multi-Strategy Funds Total Quarter-to-Date 4Q '22 $ 37.3 $ 122.8 $ 0.4 $ 160.5 Recognized Incentive Income (10.9) (29.2) (0.4) (40.4) Performance 32.1 9.7 0.7 42.5 1Q '23 $ 58.5 $ 103.3 $ 0.7 $ 162.6 This page contains non-GAAP m
Slide 13: Dividend, Distribution Holiday, Shares Outstanding and Share Repurchase
|13 ▪ Declared cash dividend of $0.06 per Class A Share for 1Q, representing 10% of Distributable Earnings ▪ Payable on May 23, 2023 to holders of record as of May 16, 2023 ▪ We will true up our dividend in 4Q to bring full year dividend amount to 20-30% of Distributable Earnings, in line with state
Slide 14: Supplemental Details
Supplemental Details Sculptor (CAPITAL MANAGEMENT
Slide 15: AUM and Fee-Paying AUM roll-forward
|15 (dollars in millions) Opportunistic Credit Funds Institutional Credit Strategies Real Estate Funds Multi-Strategy Funds Total Quarter-to-Date December 31, 2022 $ 5,387 $ 11,158 $ 3,717 $ 9,021 $ 29,283 Inflows / (Outflows)(h) (96) 23 15 (316) (374) Distributions / Other Reductions (210) (28) (71
Slide 16: Assets Under Management and returns by fund
|16 Assets Under Management as of March 31, Returns(a) for the Three Months Ended March 31, Annualized Returns Since Inception Through March 31, 20232023 2022 (dollars in thousands) 2023 2022 Gross Net Gross Net Gross Net Credit $ 22,281,976 $ 22,967,260 Opportunistic credit funds: 5,937,035 6,309,5
Slide 17: Customized Credit Focused Platform and closed-end credit funds
|17 Weighted-Average Returns for the Three Months Ended March 31, Inception to Date as of March 31, 2023 2023 2022 IRR Net Invested Capital MultipleGross Net Gross Net Gross Net Customized Credit Focused Platform(t) Opportunistic Credit Performance 4.1 % 3.3 % 1.2 % 0.8 % 14.4 % 10.9 % 2.9x Assets U
Slide 18: Institutional Credit Strategies
|18 Most Recent Launch or Refinancing Year Assets Under Management as of March 31, (dollars in thousands) Deal Size 2023 2022 Collateralized Loan Obligations $ 18,521,950 $ 14,301,994 $ 14,396,897 2017 $ 1,658,282 $ 1,020,903 $ 1,022,949 2018 5,315,728 3,786,673 4,120,842 2019 653,250 — — 2020 1,868
Slide 19: Real Estate Funds
|19 (dollars in thousands) Assets Under Management as of March 31, Inception to Date as of March 31, 2023 Total Investments Total Commitments Invested Capital(p) Total Value(q) Gross IRR(f) Net IRR(g) Gross MOIC(r)2023 2022 Real Estate Funds (Investment Period) $ 4,516,065 $ 4,590,385 $ 7,619,675 $
Slide 20: Appendix
Appendix Sculptor (CAPITAL MANAGEMENT
Slide 21: GAAP Consolidated Balance Sheet
|21 (dollars in thousands) March 31, 2023 December 31, 2022 Cash and cash equivalents $ 211,758 $ 258,863 Restricted cash 7,912 7,895 Investments (includes assets measured at fair value of $217,008 and $231,929, including assets sold under agreements to repurchase of $161,424 and $157,107 as of Marc
Slide 22: GAAP Consolidated Statements of Operations
|22 Three Months Ended March 31, (dollars in thousands, except per share amounts) 2023 2022 Revenues Management fees $ 63,708 $ 73,437 Incentive income 40,286 21,642 Other revenues 6,545 2,430 Income (loss) of consolidated entities 2,696 (161) Total Revenues 113,235 97,348 Expenses Compensation and
Slide 23: GAAP Consolidated Statements of Comprehensive Income
|23 Three Months Ended March 31, (dollars in thousands) 2023 2022 Consolidated net income $ 4,964 $ 4,876 Other Comprehensive Income, Net of Tax Other comprehensive income (loss) – currency translation adjustment 665 (750) Comprehensive Income 5,629 4,126 Less: Comprehensive loss attributable to red
Slide 24: Reconciliation of GAAP net income to Economic Income and Distributable Earnings
|24 (dollars in thousands, except per share amounts) 1Q '23 4Q '22 1Q '22 Net Income Attributable to Class A Shareholders—GAAP $ 8,492 $ 1,680 $ 16,882 Change in redemption value of redeemable noncontrolling interests 1,178 (263) (3,068) Net Income Allocated to Sculptor Capital Management, Inc.—GAAP
Slide 25: Reconciliation of GAAP to Economic Income basis revenues and expenses
|25 (dollars in thousands) 1Q '23 4Q '22 1Q '22 Management fees—GAAP $ 63,708 $ 66,931 $ 73,437 Adjustment to management fees1 (4,053) (4,773) (5,680) Management Fees—Economic Income Basis—Non-GAAP 59,655 62,158 67,757 Incentive income—GAAP 40,286 49,646 21,642 Adjustment to incentive income2 48 — (
Slide 26: Reconciliation of Adjusted Net Assets
|26 (dollars in thousands) 3/31/2023 12/31/2022 3/31/2022 Cash and cash equivalents—GAAP $ 211,758 $ 258,863 $ 135,951 U.S. government obligations, at fair value—GAAP 9,978 24,782 — Cash, Cash Equivalents and Long-Term U.S. Government Obligations—Non-GAAP $ 221,736 $ 283,645 $ 135,951 Investments in
Slide 27: Distribution Holiday Economic Income reconciliation
|27 (dollars in thousands) From October 1, 2018 to March 31, 2023 Net income attributable to Class A shareholders $ 208,998 Change in redemption value of redeemable noncontrolling interests and Preferred Units (14,512) Net Income Allocated to Sculptor Capital Management, Inc.—GAAP 194,486 Equity-bas
Slide 28: Non-GAAP and Other Measures
|28 Non-GAAP and Other Measures Accrued but Unrecognized Incentive Income (or "ABURI") is the amount of incentive income accrued at the fund level on our longer-term AUM that has not yet been recognized in our revenues. These amounts may ultimately not be recognized as revenue by us in the event of
Slide 29: Notes (contd.) Non-GAAP and Other Measures
|29 Notes (contd.) Non-GAAP and Other Measures (contd.) Fee Paying Assets Under Management (or "FP AUM") refers to the AUM on which we earn management fees and/or incentive income. Longer-term AUM (or "LT AUM") is defined as AUM from investors that are subject to initial commitment periods of three
Slide 30: Notes (contd.) Non-GAAP and Other Measures
|30 Notes (contd.) Non-GAAP and Other Measures (contd.) Distribution Holiday Economic Income is the cumulative amount of Economic Income earned since October 1, 2018, less any dividends paid to Class A Shareholders or on the now-retired Preferred Units. Distribution Holiday Economic Income is a non-
Slide 31: Footnotes to Non-GAAP Reconciliations
|31 Footnotes to Non-GAAP Reconciliations: (1) Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. (2) Adjustment to exclude the related eliminations of management fees and incen
Slide 32: Footnotes to Fund Information
|32 Footnotes to Fund Information (a) Past performance is not indicative of future results. The return information reflected in these tables represents, where applicable, the composite performance of all feeder funds that comprise each of the master funds presented. Gross return information is gener
Slide 33: Footnotes to Fund Information
|33 Footnotes to Fund Information (e) Source: Bloomberg, HFRI. The comparison shows the returns of the MSCI World Gross Local Index (GDDLWI Index), the Balanced US 60/40 Index (VBINX US Equity) and the HFRI Fund Weighted Composite Index (HFRIFWI Index (the “Broader Market Indices”) against the Multi
Slide 34: Footnotes to Fund Information
|34 Footnotes to Fund Information (q) Total value represents the sum of realized distributions and the fair value of unrealized and partially realized investments as of March 31, 2023. Total value will be impacted (either positively or negatively) by future economic and other factors. Accordingly th
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