Silvercrest Asset Management Group Inc. (SAMG) Q3 2026 earnings review
Silvercrest revenue rises 5%, but market drops shrink client assets
Silvercrest Asset Management, a wealth manager for rich families and institutions, grew revenue again, but third-quarter market drops shrank its fee-paying asset base. Revenue rose 5% from a year ago to $33 million because June's high stock markets lifted third-quarter billings. However, weaker markets in the third quarter cut discretionary client assets by 4% from last quarter to $24 billion, which reduces the billing base for the fourth quarter.
| Revenue | $32.7M +4.5% from a year ago |
|---|---|
| Discretionary client assets | $23.8B -3.8% from last quarter |
| Profit per share, excluding one-offs | $0.16 $0.19 a year ago |
| Cost and dividend outlook | Unchanged $0.21 dividend; pay ratio stays high |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because steadier client flows and the new Irish regulatory licence were offset by a lower asset base and high overhead costs. A $373 million follow-on investment in its global value strategy kept net client flows near zero after heavy withdrawals in the first half. One caution: office and travel costs rose 16%, and planned employee stock grants will add new costs while the firm's main US value funds still trail their market benchmarks.
The question now is whether new international institutional wins can bring in enough fee revenue to cover the higher cost base. Either high-fee inflows from the new Dublin and Australian channels lift profit margins back toward historical levels, or low-fee institutional mandates and market drops keep earnings depressed. Fourth-quarter client flows and overhead expenses will show if the turnaround is starting.
🐂 Bull Case
Global Value Wins Steady Client Flows and Revenue
Silvercrest bills most of its management fees at the start of each quarter based on discretionary assets under management (AUM), the client money it actively invests. Because a strong second-quarter stock market lifted that billing base to $24.7 billion on June 30, third-quarter revenue rose 4.5% from a year ago to $32.7 million. By our math, revenue grew 6.3% from the second quarter, breaking five straight quarters of flat top-line results.
Client flows also steadied after heavy withdrawals earlier in the year. The wealth manager reported $58.3 million in net client inflows before account reclassifications, driven by $182.2 million of new client accounts and "an affirming $373.0 million follow-on investment in the firm’s global value equity strategy". Even after $186 million of internal transfers lowered discretionary assets by $0.1 billion, the outflow was a fraction of last quarter's $0.8 billion drain.
What to watch: fourth-quarter discretionary net client flows in the next earnings release. A second straight quarter near or above zero would show that institutional wins are finally offsetting withdrawals by wealthy families.
Global Buildout Finishes as Dublin Opens With Licence
Over the past two years, Silvercrest has spent heavily to build an international sales network from scratch. During the third quarter, the investment adviser received its full MiFID regulatory licence from the Central Bank of Ireland and opened its Dublin office to serve European clients. The firm said it has now completed its Atlanta and Dublin offices, its European UCITS fund, and its Australian investment trust.
Completing the regulatory setup matters because the firm can now shift from paying legal bills to gathering assets overseas. Silvercrest expects "administrative and legal costs associated with these initiatives to decline and begin contributing revenue". Legal and professional fees tied to international expansion already stepped down to $170 thousand this quarter from $274 thousand in the second quarter.
What to watch: general and administrative expense in the fourth quarter. A drop from this quarter's $9.6 million level would confirm that one-time international setup costs are rolling off as promised.
🐻 Bear Case
Falling Markets Cut the Billing Base for Next Quarter
While June's asset peak boosted third-quarter fees, third-quarter market drops immediately reversed that gain for the fourth quarter. Discretionary AUM fell $939.2 million, or 3.8% from last quarter by our math, to $23.8 billion at September 30. The firm said $753.1 million of that drop directly reduces the asset base that earns revenue.
- Ending discretionary AUM: $23.8 billion, down 2.1% from $24.3 billion a year ago
- Third-quarter market drop in discretionary assets: $811 million
- Nine-month discretionary net client outflows: $1.9 billion, compared with $0.5 billion a year ago
Because Silvercrest bills quarterly in advance based on period-end assets, a 3.8% smaller discretionary asset base points to a sequential drop in fourth-quarter management fees. Over the past five quarters, management fees have tracked at roughly 0.13% of prior-quarter discretionary assets by our math, so market swings still dictate the firm's revenue.
What to watch: fourth-quarter management and advisory fees. Because the September 30 billing base is already set, only a mid-quarter jump in new client funding can prevent a sequential revenue dip.
High Pay and Office Costs Squeeze Profit Margins
Silvercrest attributes its depressed profitability to "the deliberate cost of the most significant investment program in the firm's history". Yet even with a 4.5% revenue increase this quarter, Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding one-offs) slipped 2.8% from a year ago to $4.4 million, and the Adjusted EBITDA margin fell 1 percentage point to 13.5%.
Overhead costs absorbed the revenue gain. Employee compensation and benefits took 65.0% of revenue by our math, down 4.4 percentage points from a year ago only because the firm cut bonus accruals by $0.9 million while salaries and Ireland staffing rose. Meanwhile, general and administrative expenses (office overhead, travel, and systems) jumped 16.0% to $9.6 million, rising 2.9 percentage points to 29.3% of revenue on higher travel, software, and Singapore rent.
Furthermore, the firm stated that it will "intend to imminently make equity grants to the professionals who are building our business", which will increase stock-based compensation and share count dilution. What to watch: total compensation as a share of revenue in the fourth quarter, when full-year bonus adjustments hit. If pay stays near 66% of revenue, margins cannot recover toward historical high-teens levels.
Core US Value Strategies Trail Their Benchmarks
Silvercrest relies on strong investment returns to win institutional mandates and retain wealthy families. While its newer Global Value Opportunity strategy beat its benchmark by 6.5 percentage points over the past year, every one of the firm's core US value strategies lagged its market index over both one-year and three-year periods.
- Large Cap Value 1-year return: 11.3%, trailing the Russell 1000 Value index by 12.5 percentage points
- Small Cap Value 1-year return: 6.8%, trailing the Russell 2000 Value index by 14.0 percentage points
- Multi Cap Value 1-year return: 8.5%, trailing the Russell 3000 Value index by 15.2 percentage points
- Small Cap Growth 1-year return: 46.8%, beating the Russell 2000 Growth index by 34.7 percentage points
This split matters because the underperforming US value strategies make up the bulk of Silvercrest's legacy assets and drove institutional withdrawals earlier this year. What to watch: one-year and three-year relative returns for the US value composites at year-end. Continued double-digit lags against passive benchmarks risk triggering fresh institutional redemptions.
Risks This Quarter Didn't Answer
Several standing questions about fee rates, institutional assets, and capital returns could not be checked from the earnings release alone.
- Average annual management fee rate: the release states that a higher average fee rate lifted revenue, but the exact percentage (0.34% last quarter) only appears in the quarterly filing.
- Institutional and strategy-level assets: the release does not update total institutional AUM ($9.8 billion in Q2) or give assets raised inside the new European UCITS and Australian trust vehicles.
- Pipeline size: the firm said its institutional pipeline grew in both opportunities and potential assets, but it still does not publish a dollar figure.
- Share buybacks: Treasury stock stayed unchanged from the second quarter at 3.18 million shares ($52.3 million at cost), showing no buybacks in the third quarter.
👓 Other Themes
Silvercrest Pushes Asset Reporting Overhaul to Next Year
Silvercrest tracks $12.4 billion of non-discretionary AUM, which are family office assets that pay flat fees rather than percentage-based management fees. Last quarter, the firm said it would change how it reports these assets in the third quarter, "likely eliminating the non-discretionary AUM category". It now plans to make that one-time cut at the end of the first quarter of 2027, which will lower total reported AUM without changing revenue.
💲 Other KPIs
Cash and cash equivalents rebuilt to $27.8 million from $20.7 million in the second quarter and $11.6 million after first-quarter bonus payouts, though still down from $44.1 million at year-end 2025. Term loan borrowings edged down to $9.0 million from $9.5 million last quarter, leaving $18.8 million in net cash by our math.
Total diluted Class A and Class B shares and units stood at 12.09 million, down 6.2% from 12.89 million a year ago due to earlier buybacks and expired options. However, the count was unchanged from the second quarter because Silvercrest paused share repurchases after completing its prior authorization in the first quarter.
Revenue from flat-fee family office services fell 7.7% from a year ago and dipped 0.6% from the second quarter by our math, representing 3.5% of total revenue. Meanwhile, core management and advisory fees rose 5.0% from a year ago to $31.6 million.
🔮 Guidance
Unchanged. The board declared a $0.21 quarterly dividend per Class A share, payable around December 18, 2026. Silvercrest has held the payout at $0.21 for six straight quarters, even though quarterly profit per share excluding one-offs ($0.16 in Q3) has remained below the dividend amount throughout 2026.
Unchanged. The firm reiterated that its compensation ratio will remain elevated while its new talent and global expansion investments mature. Compensation took 65.0% of revenue in the third quarter and 66.3% over the first nine months of 2026, compared with roughly 60% before the hiring wave began.
Unchanged. With the Atlanta and Dublin offices, European UCITS fund, Australian trust, and Irish MiFID licence completed, the company expects administrative and legal costs tied to these projects to fall and begin generating revenue. The firm did not provide a dollar target or timeline for the cost reduction.
❓ Key Questions
How much will new employee stock grants dilute shareholders?
Silvercrest said it will imminently grant equity to employees after shareholders approved 1.5 million new plan shares in 2025. Investors need to know the size, vesting terms, and quarterly expense of these grants now that share buybacks have stopped.
What is the average fee rate on new institutional assets?
The Global Value strategy won a $373 million follow-on mandate this quarter, but published fee tiers for that strategy start at 0.15% per year versus 0.60% to 1.00% for wealthy families. How is this mix shift affecting the firm's overall fee rate?
How much money sits in the new European and Australian funds?
Silvercrest finished building its European UCITS fund, Australian trust, and Dublin office. Disclosing the exact assets and fee run rate inside those new vehicles would show how fast the two-year investment program is paying back its setup costs.
By how much will quarterly overhead expenses actually fall?
General and administrative expenses rose 16% from a year ago to $9.6 million, yet the firm only flagged $170 thousand of international legal fees in its non-GAAP adjustments. How much of the remaining overhead is temporary setup cost versus permanent rent and travel?