Silvercrest Asset Management Group Inc

Previous wording

We are a full-service wealth management firm focused on providing financial advisory and related family office services to ultra-high net worth individuals and institutional investors. In addition to a wide range of investment capabilities, we offer a full suite of complementary and customized family office services for families seeking a comprehensive oversight of their financial affairs. During the three months ended March 31, 2024, our assets under management increased by 3.6% from $33.3 billion to $34.5 billion.

Current wording

We are a full-service wealth management firm focused on providing financial advisory and related family office services to ultra-high net worth individuals and institutional investors. In addition to a wide range of investment capabilities, we offer a full suite of complementary and customized family office services for families seeking a comprehensive oversight of their financial affairs. During the three months ended June 30, 2024, our assets under management decreased by 3.2% from $34.5 billion to $33.4 billion. During the six months ended June 30, 2024, our assets under management increased by 0.3% from $33.3 billion to $33.4 billion.

Previous wording

The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds.” As of March 31, 2024, Silvercrest L.P. has issued Restricted Stock Units exercisable for 240,998 Class B units which entitle the holders thereof to receive distributions from Silvercrest L.P. to the same extent as if the underlying Class B units were outstanding. Net profits and net losses of Silvercrest L.P. will be allocated, and distributions from Silvercrest L.P. will be made, to its current partners pro rata in accordance with their respective partnership units (and assuming the Class B units underlying all restricted stock units are outstanding).

Current wording

The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds.” As of June 30, 2024, Silvercrest L.P. has issued Restricted Stock Units exercisable for 228,118 Class B units which entitle the holders thereof to receive distributions from Silvercrest L.P. to the same extent as if the underlying Class B units were outstanding. Net profits and net losses of Silvercrest L.P. will be allocated, and distributions from Silvercrest L.P. will be made, to its current partners pro rata in accordance with their respective partnership units (and assuming the Class B units underlying all restricted stock units are outstanding).

Previous wording

The historical results of operations discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations include those of Silvercrest L.P. and its subsidiaries. As the general partner of Silvercrest L.P., we control its business and affairs and, therefore, consolidate its financial results with ours. The interests of the limited partners’ collective 31.8% partnership interest in Silvercrest L.P. as of March 31, 2024 are reflected in non-controlling interests in our Condensed Consolidated Financial Statements.

Current wording

The historical results of operations discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations include those of Silvercrest L.P. and its subsidiaries. As the general partner of Silvercrest L.P., we control its business and affairs and, therefore, consolidate its financial results with ours. The interests of the limited partners’ collective 31.9% partnership interest in Silvercrest L.P. as of June 30, 2024 are reflected in non-controlling interests in our Condensed Consolidated Financial Statements.

Previous wording

Average annual management fee is calculated by dividing our actual annualized revenue earned over a period by our average assets under management during the same period (which is calculated by averaging quarter-end assets under management for the applicable period). Our average annual management fee was 0.36% and 0.40% for the three months ended March 31, 2024 and 2023, respectively. Changes in our total average management fee rates are typically the result of changes in the mix of our assets under management and the concentration in our equities strategies whose fee rates are higher than those of other investment strategies. Management and advisory fees are also adjusted for any cash flows into or out of a portfolio, where the cash flow represents greater than 10% of the previous quarter-end market value of the portfolio. These cash flow-related adjustments were insignificant for the three months ended March 31, 2024 and 2023. Silvercrest L.P. has authority to take fees directly from external custodian accounts of its separately managed accounts.

Current wording

Average annual management fee is calculated by dividing our actual annualized revenue earned over a period by our average assets under management during the same period (which is calculated by averaging quarter-end assets under management for the applicable period). Our average annual management fee was 0.37% and 0.38% for the three months ended June 30, 2024 and 2023, respectively. Our average annual management fee was 0.37% and 0.39% for the six months ended June 30, 2024 and 2023, respectively. Changes in our total average management fee rates are typically the result of changes in the mix of our assets under management and the concentration in our equities strategies whose fee rates are higher than those of other investment strategies. Management and advisory fees are also adjusted for any cash flows into or out of a portfolio, where the cash flow represents greater than 10% of the previous quarter-end market value of the portfolio. These cash flow-related adjustments were insignificant for the three and six months ended June 30, 2024 and 2023. Silvercrest L.P. has authority to take fees directly from external custodian accounts of its separately managed accounts.

Previous wording

The components of our compensation expense for the three months ended March 31, 2024 and 2023 are as follows:

Current wording

The components of our compensation expense for the three and six months ended June 30, 2024 and 2023 are as follows:

Previous wording

For the three months ended March 31, 2024 and 2023, $6,977 and $6,531, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

Current wording

For the three months ended June 30, 2024 and 2023, $7,514 and $6,962, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2024 and 2023, $14,491 and $13,493, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

Previous wording

Our revenues for the three months ended March 31, 2024 and 2023 are set forth below:

Current wording

Our revenues for the three and six months ended June 30, 2024 and 2023 are set forth below:

Previous wording

The growth in our assets under management during the three months ended March 31, 2024 and 2023 is described below:

Current wording

The growth in our assets under management during the three and six months ended June 30, 2024 and 2023 is described below:

Previous wording

Our total revenue increased by $0.8 million, or 2.8%, to $30.3 million for the three months ended March 31, 2024, from $29.4 million for the three months ended March 31, 2023. This increase was driven by market appreciation partially offset by net client outflows.

Current wording

Our total revenue increased by $1.3 million, or 4.2%, to $31.0 million for the three months ended June 30, 2024, from $29.7 million for the three months ended June 30, 2023. This increase was driven by market appreciation partially offset by net client outflows.

Previous wording

Total assets under management increased by $4.6 billion, or 15.4%, to $34.5 billion at March 31, 2024 from $29.9 billion at March 31, 2023. Compared to the three months ended March 31, 2023, there was an increase in market appreciation of $0.3 billion, an increase of $0.6 billion in client inflows, and an increase of $0.7 billion in client outflows. During the three months ended March 31, 2024, from December 31, 2023, there was an increase of $0.8 billion in discretionary assets under management and an increase of $0.4 billion in non-discretionary assets under management. The increase in assets under management as of March 31, 2024 as compared to December 31, 2023 was primarily due to market appreciation partially offset by net client outflows during the quarter ended March 31, 2024. Sub-advised fund management revenue remained flat at $0.3 million for the three months ended March 31, 2024 and March 31, 2023. Proprietary fund management revenue remained flat at $0.7 million for the three months ended March 31, 2024 and March 31, 2023. With respect to our discretionary assets under management, equity assets increased by 4.0% during the three months ended March 31, 2024 and fixed income assets increased by 5.1% during the same period. For the three months ended March 31, 2024, most of the increase in equity assets came from our energy infrastructure, core international and focused opportunity strategies with composite returns of 13.0%, 12.7% and 11.3%, respectively. As of March 31, 2024, the composition of our assets under management was 66% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 34% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.

Current wording

Total assets under management increased by $1.5 billion, or 4.7%, to $33.4 billion at June 30, 2024 from $31.9 billion at June 30, 2023. From June 30, 2023, there was market appreciation of $3.3 billion, client inflows of $3.3 billion, and client outflows of $5.1 billion. During the three months ended June 30, 2024, from March 31, 2024, there was a decrease of $1.1 billion in discretionary assets under management and no change in non-discretionary assets under management. The decrease in assets under management as of June 30, 2024 as compared to March 31, 2024 was primarily due to net client outflows and market depreciation during the quarter ended June 30, 2024. Sub-advised fund management revenue remained flat at $0.3 million for the three months ended June 30, 2024 and June 30, 2023. Proprietary fund management revenue remained flat at $0.7 million for the three months ended June 30, 2024 and June 30, 2023. With respect to our discretionary assets under management, equity assets decreased by 5.9% during the three months ended June 30, 2024 and fixed income assets increased by 0.9% during the same period. For the three months ended June 30, 2024, most of the decrease in equity assets came from our focused opportunity, smid growth and small cap growth strategies with composite returns of -3.8%, -3.1% and -3.0%, respectively. As of June 30, 2024, the composition of our assets under management was 65% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 35% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.

Previous wording

Our expenses for the three months ended March 31, 2024 and 2023 are set forth below:

Current wording

Our expenses for the three and six months ended June 30, 2024 and 2023 are set forth below:

Previous wording

For the three months ended March 31, 2024 and 2023, $6,977 and $6,531, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

Current wording

For the three months ended June 30, 2024 and 2023, $7,514 and $6,962, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2024 and 2023, $14,491 and $13,493, respectively, of partner incentive payments were included in cash compensation and benefits expense in the Condensed Consolidated Statements of Operations.

Previous wording

Our expenses are driven primarily by our compensation costs. The table included in “—Expenses—Compensation and Benefits Expense” describes the components of our compensation expense for the three months ended March 31, 2024 and 2023. Other expenses, such as rent, professional service fees, data-related costs, and sub-advisory fees incurred are included in our general and administrative expenses in the Condensed Consolidated Statements of Operations.

Current wording

Our expenses are driven primarily by our compensation costs. The table included in “—Expenses—Compensation and Benefits Expense” describes the components of our compensation expense for the three and six months ended June 30, 2024 and 2023. Other expenses, such as rent, professional service fees, data-related costs, and sub-advisory fees incurred are included in our general and administrative expenses in the Condensed Consolidated Statements of Operations.

Previous wording

Total expenses increased by $1.7 million, or 7.4%, to $24.4 million for the three months ended March 31, 2024 from $22.7 million for the three months ended March 31, 2023. This increase was attributable to an increase in compensation and benefits expense of $1.2 million and an increase in general, administrative and other expenses of $0.5 million.

Current wording

Total expenses increased by $2.5 million, or 10.6%, to $25.7 million for the three months ended June 30, 2024 from $23.2 million for the three months ended June 30, 2023. This increase was attributable to an increase in compensation and benefits expense of $1.7 million and an increase in general, administrative and other expenses of $0.7 million.

Previous wording

Compensation and benefits expense increased by $1.2 million, or 7.1% to $17.7 million for the three months ended March 31, 2024 from $16.5 million for the three months ended March 31, 2023. The increase was primarily attributable to an increase in the accrual for bonuses of $1.0 million, an increase in salaries and benefits of $0.1 million primarily as a result of merit-based increases and severance of $0.1 million paid in the current quarter.

Current wording

Compensation and benefits expense increased by $1.7 million, or 10.4% to $18.5 million for the three months ended June 30, 2024 from $16.8 million for the three months ended June 30, 2023. The increase was primarily attributable to an increase in the accrual for bonuses of $1.3 million and an increase in salaries and benefits of $0.4 million primarily as a result of merit-based increases.

Previous wording

General and administrative expenses increased by $0.5 million, or 8.4%, to $6.7 million for the three months ended March 31, 2024 from $6.2 million for the three months ended March 31, 2023. This was primarily attributable to increases in travel and entertainment expenses of $0.1 million, occupancy and related costs of $0.1 million, professional fees of $0.2 million and depreciation and amortization expense of $0.1 million.

Current wording

General and administrative expenses increased by $1.3 million, or 9.9%, to $13.9 million for the six months ended June 30, 2024 from $12.6 million for the six months ended June 30, 2023. This was primarily attributable to increases in travel and entertainment expenses of $0.2 million, occupancy and related costs of $0.2 million, professional fees of $0.5 million, portfolio and systems expenses of $0.1 million, recruiting expenses of $0.3 million and depreciation and amortization expense of $0.1 million, partially offset by a decrease in marketing expenses of $0.1 million.

Previous wording

Total other income (expense) net increased by $0.4 million to other income of $0.3 million for the three months ended March 31, 2024 from other expense of $0.1 million for the three months ended March 31, 2023. Interest income increased due to higher rates earned on cash in interest-bearing accounts. Interest expense decreased because of lower outstanding balances on borrowings under our credit facility during the three months ended March 31, 2024 as compared with the same period in the prior year.

Current wording

Total other income (expense) net increased by $0.3 million to other income of $0.3 million for the three months ended June 30, 2024 from other expense of $0.1 million for the three months ended June 30, 2023. Interest income increased due to higher rates earned on cash in interest-bearing accounts. Interest expense decreased because of lower outstanding balances on borrowings under our credit facility during the three months ended June 30, 2024 as compared with the same period in the prior year.

Previous wording

The provision for income taxes was $1.3 million and $1.4 million for the three months ended March 31, 2024 and 2023, respectively. The change was primarily related to decreased profitability during the current period as compared to the prior year. Our provision for income taxes as a percentage of income before provision for income taxes for the three months ended March 31, 2024 and 2023 was 20.8% and 20.7%, respectively.

Current wording

The provision for income taxes was $1.2 million and $1.3 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily related to decreased profitability during the current period as compared to the prior year. Our provision for income taxes as a percentage of income before provision for income taxes for the three months ended June 30, 2024 and 2023 was 21.4% and 20.4%, respectively.

Previous wording

For the three months ended March 31, 2023, represents professional fees of $5 related to the acquisition of Cortina.

Current wording

For the six months ended June 30, 2023, represents professional fees of $5 related to the acquisition of Cortina.

Previous wording

For the three months ended March 31, 2024, represents an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives and software implementation costs of $10. For the three months ended March 31, 2023, represents an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives and software implementation costs of $11.

Current wording

For the three months ended June 30, 2024, represents a fair value adjustment to the Neosho contingent purchase price consideration of $12, an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives, sign on bonuses paid to certain employees of $188, professional fees of $26 related to a transfer pricing project, legal fees of $46 and software implementation costs of $3. For the six months ended June 30, 2024, represents a fair value adjustment to the Neosho contingent purchase price consideration of $12, an ASC 842 rent adjustment of $96 related to the amortization of property lease incentives, sign on bonuses paid to certain employees of $188, professional fees of $26 related to a transfer pricing project, legal fees of $46 and software implementation costs of $13. For the three months ended June 30, 2023, represents an ASC 842 rent adjustment of $48 related to the amortization of property lease incentives, $12 related to moving costs, a fair value adjustment to the Cortina contingent purchase price consideration of ($2) and software implementation costs of $9. For the six months ended June 30, 2023, represents an ASC 842 rent adjustment of $96 related to the amortization of property lease incentives, $12 related to moving costs, a fair value adjustment to the Cortina contingent purchase price consideration of ($2) and software implementation costs of $20.

Previous wording

Includes 35,554 and 23,732 unvested restricted stock units at March 31, 2024 and 2023, respectively.

Current wording

Includes 38,936 and 23,732 unvested restricted stock units at June 30, 2024 and 2023, respectively.

Previous wording

Includes 240,998 and 212,927 unvested restricted stock units at March 31, 2024 and 2023, respectively, and 147,506 and 252,904 unvested non-qualified options at March 31, 2024 and 2023, respectively.

Current wording

Includes 228,118 and 264,037 unvested restricted stock units at June 30, 2024 and 2023, respectively, and 366,293 and 252,904 unvested non-qualified options at June 30, 2024 and 2023, respectively.

Previous wording

On June 24, 2013, the subsidiaries of Silvercrest L.P. entered into a $15.0 million credit facility with City National Bank. The subsidiaries of Silvercrest L.P. are the borrowers under such facility and Silvercrest L.P. guarantees the obligations of its subsidiaries under the credit facility. The credit facility is secured by certain assets of Silvercrest L.P. and its subsidiaries. The credit facility consists of a $7.5 million delayed draw term loan that matures on June 24, 2025 and a $7.5 million revolving credit facility that was scheduled to mature on June 21, 2019. On July 1, 2019, the credit facility was amended to increase the term loan by $18.0 million to $25.5 million, extend the draw date on the term loan facility to July 1, 2024, extend the maturity date of the term loan to July 1, 2026 and increase the revolving credit facility by $2.5 million to $10.0 million. On June 17, 2022, the revolving credit facility was further amended to extend the maturity date to June 18, 2023 and amended to replace LIBOR terms with its successor, SOFR The loan bears interest at either (a) the higher of the prime rate plus a margin of 0.25 percentage points and 2.5% or (b) the SOFR rate plus 2.80 percentage points, at the borrowers’ option. Borrowings under the term loan on or prior to June 30, 2021 are payable in 20 equal quarterly installments. Borrowings under the term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company’s subsidiaries. On June 15, 2023, the revolving credit facility was further amended to extend the maturity date to June 18, 2024. The loan bears interest at either (a) the higher of the prime rate plus a margin of 0.25 percentage points and 2.5% or (b) the SOFR rate plus 2.80 percentage points, at the borrowers’ option. Borrowings under the term loan on or prior to June 30, 2021 are payable in 20 equal quarterly installments. Borrowings under the term loan after June 30, 2021 will be payable in equal quarterly installments through the maturity date. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to our subsidiaries. The credit facility contains restrictions on, among other things, (i) incurrence of additional debt, (ii) creating liens on certain assets, (iii) making certain investments, (iv) consolidating, merging or otherwise disposing of substantially all of our assets, (v) the sale of certain assets, and (vi) entering into transactions with affiliates. In addition, the credit facility contains certain financial covenants including a test on discretionary assets under management, maximum debt to EBITDA and a fixed charge coverage ratio. The credit facility contains customary events of default, including the occurrence of a change in control…

Excerpt shortened here; the source contains the full paragraph.

Current wording

On June 24, 2013, the subsidiaries of Silvercrest L.P. entered into a $15.0 million credit facility with City National Bank. The subsidiaries of Silvercrest L.P. are the borrowers under such facility and Silvercrest L.P. guarantees the obligations of its subsidiaries under the credit facility. The credit facility is secured by certain assets of Silvercrest L.P. and its subsidiaries. The credit facility consisted of a $7.5 million delayed draw term loan that was scheduled to mature on June 24, 2025, and a $7.5 million revolving credit facility that was scheduled to mature on June 21, 2019. Effective July 1, 2019, the credit facility was increased and consisted of a $25.5 million delayed draw term loan that was to mature on July 1, 2026, and a $10.0 million revolving credit facility with a stated maturity date of June 18, 2024 and a stated term loan draw date of July 1, 2024. On June 17, 2022, the revolving credit facility was amended to replace LIBOR terms with its successor, SOFR. The loan bears interest at either (a) the higher of the prime rate plus a margin of 0.25 percentage points and 2.5% or (b) the SOFR rate plus 2.80 percentage points, at the borrowers’ option. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company’s subsidiaries. On February 15, 2022, the credit facility was amended and restated to reflect changes to various definitions and related clauses with respect to the Company’s subsidiaries. The credit facility contains restrictions on, among other things, (i) incurrence of additional debt, (ii) creating liens on certain assets, (iii) making certain investments, (iv) consolidating, merging or otherwise disposing of substantially all of our assets, (v) the sale of certain assets, and (vi) entering into transactions with affiliates. In addition, the credit facility contains certain financial covenants including a test on discretionary assets under management, maximum debt to EBITDA and a fixed charge coverage ratio. The credit facility contains customary events of default, including the occurrence of a change in control which includes a person or group of persons acting together acquiring more than 30% of the total voting securities of Silvercrest. On June 18, 2024, the subsidiaries of Silvercrest L.P. and City National Bank entered into an Amendment and Restatement Agreement, which amends and restates the credit facility (as so amended and restated, the “A&R Credit Agreement”) whereby, among other items, (i) the term loan maturity date was extended until June 18, 2027, (ii) the term loan draw date was extended to June 18, 2025, (iii) the term loan commitment was decreased from $25.5 million to $10.0 million as a result of the repayment in full of the existing term loans previously borrowed under the Credit Agreement, and (iv) the $10.0 million revolving credit facility maturity date was extended until June 18, 2025. Additionally, …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount and timing of our income and the tax rates then applicable. Nevertheless, we expect that as a result of the size of the increases in the tax basis of our tangible and intangible assets, the payments that we may make under the tax receivable agreement likely will be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefit of the increased depreciation and amortization of our assets, we expect that future payments to the selling principals of Silvercrest L.P. in respect of our purchase of Class B units from them will aggregate approximately $9.2 million. Future payments to current principals of Silvercrest L.P. and future holders of Class B units in respect of subsequent exchanges would be in addition to these amounts and are expected to be substantial. We intend to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P.

Current wording

The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount and timing of our income and the tax rates then applicable. Nevertheless, we expect that as a result of the size of the increases in the tax basis of our tangible and intangible assets, the payments that we may make under the tax receivable agreement likely will be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize the full tax benefit of the increased depreciation and amortization of our assets, we expect that future payments to the selling principals of Silvercrest L.P. in respect of our purchase of Class B units from them will aggregate approximately $9.0 million. Future payments to current principals of Silvercrest L.P. and future holders of Class B units in respect of subsequent exchanges would be in addition to these amounts and are expected to be substantial. We intend to fund required payments pursuant to the tax receivable agreement from the distributions received from Silvercrest L.P.

Previous wording

The following table sets forth our cash flows for the three months ended March 31, 2024 and 2023. Operating activities consist of net income subject to adjustments for changes in operating assets and liabilities, depreciation, and equity-based compensation expense. Investing activities consist primarily of acquiring and selling property and equipment, and cash paid as part of business acquisitions. Financing activities consist primarily of contributions from partners, distributions to partners, dividends paid on Class A common stock, the issuance and payments on partner notes, other financings, and earnout payments related to business acquisitions.

Current wording

The following table sets forth our cash flows for the six months ended June 30, 2024 and 2023. Operating activities consist of net income subject to adjustments for changes in operating assets and liabilities, depreciation, and equity-based compensation expense. Investing activities consist primarily of acquiring and selling property and equipment, and cash paid as part of business acquisitions. Financing activities consist primarily of contributions from partners, distributions to partners, dividends paid on Class A common stock, the issuance and payments on partner notes, other financings, and earnout payments related to business acquisitions.

Previous wording

For the three months ended March 31, 2024 and 2023, operating activities used $24.1 million and $25.5 million, respectively. This difference is primarily the result of a decrease in net income of $0.4 million, decreased deferred tax expense of $0.1 million, decreased operating lease liabilities of $1.2 million, an increase in receivables and due from Silvercrest funds of $1.5 million and an increase in accounts payable and accrued expenses of $0.4 million, partially offset by an increase in accrued compensation of $3.4 million, increased non-cash lease expense of $1.2 million, an increase in prepaid and other expenses of $0.3 million and an increase in depreciation and amortization of $0.1 million.

Current wording

For the six months ended June 30, 2024 and 2023, operating activities used $8.1 million and $9.9 million, respectively. This difference is primarily the result of a decrease in net income of $1.2 million, decreased deferred tax expense of $0.4 million, decreased operating lease liabilities of $1.4 million and an increase in receivables and due from Silvercrest funds of $0.9 million, partially offset by an increase in accounts payable and accrued expenses of $0.4 million, an increase in accrued compensation of $4.1 million, increased non-cash lease expense of $0.4 million, an increase in prepaid and other expenses of $0.5 million, an increase in equity-based compensation of $0.1 million and an increase in depreciation and amortization of $0.1 million.

Previous wording

For the three months ended March 31, 2024 and 2023, investing activities used $0.6 million and $1.1 million, respectively. The primary use of cash during the three months ended March 31, 2024 and 2023 was for the acquisition of furniture and equipment and for leasehold improvements.

Current wording

For the six months ended June 30, 2024 and 2023, investing activities used $1.0 million and $2.6 million, respectively. The primary use of cash during the six months ended June 30, 2024 and 2023 was for the acquisition of furniture and equipment and for leasehold improvements.

Previous wording

For the three months ended March 31, 2024 and 2023, financing activities used $5.9 million and $9.2 million, respectively. During the three months ended March 31, 2024 and 2023, the Company repaid $0.9 million and $1.8 million, respectively, of principal on the term loan with City National Bank. Distributions to partners during the three months ended March 31, 2024 and 2023 were $3.3 million and $4.1 million, respectively. During the three months ended March 31, 2024 and 2023, the Company paid dividends of $1.8 million and $1.7 million, respectively, to Class A shareholders. During the three months ended March 31, 2024 and 2023, we received payments from partners on notes receivable of $0.1 million and $0.1 million, respectively. During the three months ended March 31, 2023, we purchased approximately 96,000 shares of Class A common stock of Silvercrest Asset Management Group Inc. at a cost of $1.6 million.

Current wording

For the six months ended June 30, 2024 and 2023, financing activities used $11.3 million and $17.5 million, respectively. During the six months ended June 30, 2024 and 2023, the Company repaid $2.7 million and $2.7 million, respectively, of principal on the term loan with City National Bank. Distributions to partners during the six months ended June 30, 2024 and 2023 were $4.9 million and $6.3 million, respectively. During the six months ended June 30, 2024 and 2023, the Company paid dividends of $3.6 million and $3.4 million, respectively, to Class A shareholders. During the six months ended June 30, 2024 and 2023, we received payments from partners on notes receivable of $0.1 million and $0.1 million, respectively. During the six months ended June 30, 2024 and 2023, we made earnout payments of $0.1 and $0.1 million, respectively. During the three and six months ended June 30, 2023, we purchased approximately 262,000 shares of Class A common stock of Silvercrest Asset Management Group Inc. at a cost of $5.0 million.

Previous wording

As of March 31, 2024 and December 31, 2023, $1.8 million and $2.7 million, respectively, was outstanding under the term loan with City National Bank. As of March 31, 2024 and December 31, 2023, accrued but unpaid interest on the term loan with City National Bank was $13 thousand and $33 thousand, respectively.

Current wording

As of June 30, 2024 and December 31, 2023, $0 and $2.7 million, respectively, was outstanding under the term loan with City National Bank. As of June 30, 2024 and December 31, 2023, accrued but unpaid interest on the term loan with City National Bank was $0 and $33 thousand, respectively.

Previous wording

There have been no changes to our critical accounting policies during the three months ended March 31, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 7, 2024.

Current wording

There have been no changes to our critical accounting policies during the six months ended June 30, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on March 7, 2024.

Previous wording

The average value of our assets under management for the three months ended March 31, 2024 was approximately $33.9 billion. Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.4 billion for the three months ended March 31, 2024, which would cause an annualized increase or decrease in revenues of approximately $12.1 million for the three months ended March 31, 2024, at a weighted average fee rate for the three months ended March 31, 2024 of 0.36%.

Current wording

The average value of our assets under management for the three and six months ended June 30, 2024 was approximately $34.0 and $33.4 billion, respectively. Assuming a 10% increase or decrease in our average assets under management and the change being proportionately distributed over all our products, the value would increase or decrease by approximately $3.4 and $3.3 billion, for the three and six months ended June 30, 2024, respectively, which would cause an annualized increase or decrease in revenues of approximately $3.1 and $6.1 million for the three and six months ended June 30, 2024, respectively, at a weighted average fee rate for the three and six months ended June 30, 2024 of 0.37% and 0.37%, respectively.