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 twelve months ended December 31, 2023, our assets under management increased 15.2% from $28.9 billion to $33.3 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 twelve months ended December 31, 2024, our assets under management increased 9.6% from $33.3 billion to $36.5 billion.

Previous wording

The business includes the management of funds of funds, and other investment funds, collectively referred to as the “Silvercrest Funds”. 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”. Silvercrest L.P. has issued restricted stock units exercisable for 205,079 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 majority of management and advisory fees that we earn on separately-managed accounts are based on the value of assets under management on the last day of each calendar quarter. Most of our management and advisory fees are billed quarterly in advance on the first day of each calendar quarter. Our basic annual fee schedule for management of clients’ assets in separately managed accounts is: (i) for managed equity or balanced portfolios, 1% of the first $10 million and 0.60% on the balance, (ii) for managed fixed income only portfolios, 0.40% on the first $10 million and 0.30% on the balance, (iii) for the municipal value strategy, 0.65%, (iv) for Cortina’s equity portfolios, 1% on the first $25 million, 0.90% on the next $50 million and 0.80% on the balance and (v) for outsourced chief investment officer portfolios, 0.40% on the first $50 million, 0.32% on the next $50 million and 0.24% on the balance. Our fee for monitoring non-discretionary assets can range from 0.05% to 0.01%, but can also be incorporated into an agreed-upon fixed family office service fee. The majority of our client relationships pay a blended fee rate because they are invested in multiple strategies.

Current wording

The majority of management and advisory fees that we earn on separately-managed accounts are based on the value of assets under management on the last day of each calendar quarter. Most of our management and advisory fees are billed quarterly in advance on the first day of each calendar quarter. Our basic annual fee schedule for management of clients’ assets in separately managed accounts is: (i) for managed equity or balanced portfolios, 1% of the first $10 million and 0.60% on the balance, (ii) for managed fixed income only portfolios, 0.40% on the first $10 million and 0.30% on the balance, (iii) for the municipal value strategy, 0.65%, (iv) for Cortina’s equity portfolios, 1% on the first $25 million, 0.90% on the next $50 million and 0.80% on the balance, (v) for outsourced chief investment officer portfolios, 0.40% on the first $50 million, 0.32% on the next $50 million and 0.24% on the balance and (vi) for the global value equity strategy, 0.15% per annum on the first AUD1.5 billion, 0.14% per annum on the next AUD1.5 billion, 0.11% per annum on the next AUD1.0 billion, 0.08% per annum on the next AUD1.0 billion and 0.05% per annum above AUD5.0 billion. Our fee for monitoring non-discretionary assets can range from 0.05% to 0.01%, but can also be incorporated into an agreed-upon fixed family office service fee. The majority of our client relationships pay a blended fee rate because they are invested in multiple strategies.

Previous wording

Average annual management fee is calculated by dividing our actual 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 management fee was 0.38%, 0.40% and 0.44% for the years ended December 31, 2023, 2022 and 2021, respectively. Changes in our total average management fee rates are typically the result of changes in the mix of our assets under management and increased concentration in our equities strategies whose fee rates are higher than those of other investment strategies. 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 years ended December 31, 2023, 2022 and 2021. 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 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 management fee was 0.35%, 0.38% and 0.40% for the years ended December 31, 2024, 2023 and 2022, respectively. Changes in our total average management fee rates are typically the result of changes in the mix of our assets under management and increased concentration in our equities strategies whose fee rates are higher than those of other investment strategies. 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 years ended December 31, 2024, 2023 and 2022. Silvercrest L.P. has authority to take fees directly from external custodian accounts of its separately managed accounts.

Previous wording

For the years ended December 31, 2023, 2022 and 2021, $31,289, $32,262 and $34,781 of partner incentive payments were included in cash compensation and benefits expense, respectively.

Current wording

For the years ended December 31, 2024, 2023 and 2022, $31,140, $31,289 and $32,262 of partner incentive payments were included in cash compensation and benefits expense, respectively.

Previous wording

During 2023, 2022 and 2021, Silvercrest L.P. granted restricted stock units (“RSU”) to existing Class B unit holders. During 2022 and 2021, Silvercrest L.P. granted non-qualified options (“NQO”) to an existing Class B unit holder. Information regarding restricted stock units can be found in Note 16. “Equity-Based Compensation” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.

Current wording

During 2024, 2023 and 2022, Silvercrest L.P. granted restricted stock units (“RSU”) to existing Class B unit holders. During 2024 and 2022, Silvercrest L.P. granted non-qualified options (“NQO”) to an existing Class B unit holder. Information regarding restricted stock units can be found in Note 16. “Equity-Based Compensation” in the accompanying consolidated financial statements.

Previous wording

Our total revenue decreased by $8.4 million, or 6.4%, to $123.2 million for year ended December 31, 2022, from $131.6 million for year ended December 31, 2021. This decrease was driven by market depreciation and net client outflows in discretionary assets under management.

Current wording

Our total revenue increased by $6.2 million, or 5.3%, to $123.7 million for year ended December 31, 2024, from $117.4 million for year ended December 31, 2023. This increase was driven by market appreciation in discretionary assets under management partially offset by net client outflows.

Previous wording

Assets under management decreased by $3.4 billion, or 10.5%, to $28.9 billion at December 31, 2022 from $32.3 billion at December 31, 2021. Our decrease in assets under management for the year ended December 31, 2022 was attributable to a decrease in discretionary assets under management of $4.2 billion, partially offset by an increase in non-discretionary assets under management of $0.8 billion. The decrease in our discretionary assets under management was driven by market depreciation and net client outflows. With respect to our discretionary assets under management, equity assets decreased by 15.9% during the year ended December 31, 2022 and fixed income assets increased by 4.7% during the same period. With respect to our discretionary assets under management, most of our decrease came from our smid growth, multi cap growth, REIT and core international strategies with composite returns of -32.7%, -26.6%, -26.3%, and -26.0%, respectively, for the year ended December 31, 2022. Compared to the year ended December 31, 2021, there was an increase of $0.2 billion of client inflows, an increase of $7.8 billion in market depreciation and an increase of $0.3 billion in client outflows. Our market depreciation during the year ended December 31, 2022 constituted a 12.1% rate of decrease in our total assets under management compared to December 31, 2021, as compared to our market appreciation during the year ended December 31, 2021 which constituted a 13.3% rate of increase in our total assets under management compared to December 31, 2020. Sub-advised fund management revenue increased by $0.1 million for the year ended December 31, 2022 as compared to the prior year. Proprietary fund management revenue decreased by $0.4 million for the year ended December 31, 2022 as compared to the prior year as a result of market appreciation. As of December 31, 2022, the composition of our assets under management was 72% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 28% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.

Current wording

Assets under management increased by $3.2 billion, or 9.6%, to $36.5 billion at December 31, 2024 from $33.3 billion at December 31, 2023. Our increase in assets under management for the year ended December 31, 2024 was attributable to an increase in discretionary assets under management of $1.4 billion and an increase in non-discretionary assets under management of $1.8 billion. The increase in our discretionary assets under management was driven by market appreciation and net client inflows. With respect to our discretionary assets under management, equity assets increased by 7.3% during the year ended December 31, 2024 and fixed income assets increased by 6.2% during the same period. With respect to our discretionary assets under management, most of our increase came from our energy infrastructure, SMID growth, large cap growth and multi cap growth strategies with composite returns of 42.1%, 20.9%, 20.5%, and 17.9%, respectively, for the year ended December 31, 2024. Compared to the year ended December 31, 2023, there was a decrease of $0.3 billion of client inflows and an increase of $0.9 billion in client outflows. Our market appreciation during the year ended December 31, 2024 constituted a 10.4% rate of increase in our total assets under management compared to December 31, 2023, as compared to our market appreciation during the year ended December 31, 2023 which constituted a 11.4% rate of increase in our total assets under management compared to December 31, 2022. Sub-advised fund management revenue remained flat at $1.2 million for the years ended December 31, 2024 and 2023. Proprietary fund management revenue remained flat at $2.9 million for the years ended December 31, 2024 and 2023. As of December 31, 2024, the composition of our assets under management was 64% in discretionary assets, which includes both separately managed accounts and proprietary and sub-advised funds, and 36% in non-discretionary assets which represent assets on which we provide portfolio reporting but do not have investment discretion.

Previous wording

For the years ended December 31, 2023 and 2022, $31,289 and $32,262, respectively, of partner incentive payments was included in compensation and benefits expense.

Current wording

For the years ended December 31, 2024 and 2023, $31,140 and $31,289, respectively, of partner incentive payments was included in compensation and benefits expense.

Previous wording

Compensation and benefits expense decreased by $1.0 million, or 1.3%, to $71.6 million for the year ended December 31, 2022 from $72.6 million for the year ended December 31, 2021. The decrease was primarily attributable to a decrease in the accrual for bonuses of $2.3 million and a decrease in equity based compensation expense of $0.3 million due to a decrease in the number of unvested restricted stock units and unvested non-qualified stock options outstanding, partially offset by an increase in salaries and benefits expense of $1.7 million primarily as a result of merit-based increases and newly-hired staff.

Current wording

Compensation and benefits expense increased by $4.0 million, or 5.6%, to $76.7 million for the year ended December 31, 2024 from $72.6 million for the year ended December 31, 2023. The increase was primarily attributable to an increase in equity based compensation expense of $0.3 million due to an increase in the number of unvested restricted stock units and unvested non-qualified stock options outstanding, an increase in salaries and benefits expense of $2.5 million primarily as a result of merit-based increases and newly-hired staff and an increase in the accrual for bonuses of $1.2 million.

Previous wording

General and administrative expenses decreased by $15.4 million, or 54.3%, to $13.0 million for the year ended December 31, 2022 from $28.5 million for the year ended December 31, 2021. The decrease was primarily attributable to decreases in the fair value of contingent consideration related to the Cortina Acquisition of $17.5 million, occupancy and related costs of $0.2 million and trade errors of $0.3 million. These decreases were partially offset by increases in professional fees of $0.6 million, portfolio and systems expenses of $0.3 million, travel and entertainment costs of $1.1 million, charitable donations of $0.1 million, office expenses of $0.1 million, training and conference expenses of $0.1 million, telephone and internet costs of $0.1 million and an increase in the fair value of contingent consideration related to the Neosho Acquisition of $0.1 million. Information regarding acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.

Current wording

General and administrative expenses increased by $3.4 million, or 13.1%, to $29.4 million for the year ended December 31, 2024 from $26.0 million for the year ended December 31, 2023. The increase was primarily attributable to increases in professional fees of $1.1 million, portfolio and systems expenses of $0.8 million, occupancy and related costs of $0.3 million, trading errors of $0.3 million, recruiting expenses of $0.3 million, travel and entertainment expenses of $0.2 million, depreciation and amortization of $0.1 million, office expense of $0.1 million, publications and subscriptions costs of $0.1 million and sub-advisory and referral fees of $0.1 million.

Previous wording

General and administrative expenses increased by $12.9 million, or 99.1%, to $26.0 million for the year ended December 31, 2023 from $13.0 million for the year ended December 31, 2022. The increase was primarily attributable to increases in the fair value of contingent consideration related to the Cortina Acquisition of $11.8 million and the Neosho Acquisition of $0.3 million, portfolio and systems expenses of $0.5 million, occupancy and related costs of $0.2 million, marketing costs of $0.2 million, depreciation and amortization of $0.1 million and office expense of $0.1 million. These increases were partially offset by decreases in professional fees of $0.1 million, sub-advisory and referral fees of $0.1 million and telephone and internet costs of $0.1 million. Information regarding acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.

Current wording

General and administrative expenses increased by $12.9 million, or 99.1%, to $26.0 million for the year ended December 31, 2023 from $13.0 million for the year ended December 31, 2022. The increase was primarily attributable to increases in the fair value of contingent consideration related to the Cortina Acquisition of $11.8 million and the Neosho Acquisition of $0.3 million, portfolio and systems expenses of $0.5 million, occupancy and related costs of $0.2 million, marketing costs of $0.2 million, depreciation and amortization of $0.1 million and office expense of $0.1 million. These increases were partially offset by decreases in professional fees of $0.1 million, sub-advisory and referral fees of $0.1 million and telephone and internet costs of $0.1 million. Information regarding acquisitions can be found in Note 3. “Acquisitions” in the “Notes to Consolidated Financial Statements” in the accompanying consolidated financial statements.

Previous wording

Other income (expense), net decreased by $1.5 million, or 112.1% to ($0.2) million for the year ended December 31, 2022 from $1.3 million for the year ended December 31, 2021. There was a $0.2 million adjustment to the fair value of our tax receivable agreement liability as of December 31, 2022. The adjustment in fair value was a result of a reduction in the future effective corporate tax rates at the federal level and in New York City as a result of law changes. Equity income from investments decreased by $1.6 million in 2022 as compared with the same period in the prior year as a result of decreased performance fee allocations. Interest expense increased for the year ended December 31, 2022 as compared to the prior year as a result of higher interest rates owed on borrowings under the credit facility. Interest income increased as a result of higher balances in interest-bearing accounts during the year.

Current wording

Other income (expense), net increased by $1.9 million to $2.6 million for the year ended December 31, 2024 from $0.7 million for the year ended December 31, 2023. There was a $0.1 million adjustment to the fair value of our tax receivable agreement liability as of December 31, 2024. The adjustment in fair value was a result of a reduction in the future effective corporate tax rates at the federal level and in New York City as a result of law changes. Equity income from investments increased by $1.1 million in 2024 as compared with the same period in the prior year as a result of increased performance fee allocations. Interest expense for the year ended December 31, 2024 decreased by $0.3 million as compared to the prior year due to the repayment of outstanding debt. Interest income increased by $0.5 million as a result of higher balances in interest-bearing accounts during the year.

Previous wording

The provision for income taxes was $7.6 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively. Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2022 and 2021 was 19.8% and 21.7%, respectively.

Current wording

The provision for income taxes was $4.6 million and $4.3 million for the years ended December 31, 2024 and 2023, respectively. Our provision for income taxes as a percentage of income before provision for income taxes for the year ended December 31, 2024 and 2023 was 22.5% and 22.1%, respectively.

Previous wording

In 2023, represents professional fees of $5 related to the acquisition of Cortina. In 2022, represents insurance costs of $22 and professional fees of $15 related to the acquisition of Cortina. In 2021, represents equity-based compensation of $300 related to restricted stock unit grants issued to two associates hired as part of the Cortina Acquisition in conjunction with their admission to Silvercrest L.P., insurance costs of $45 and professional fees of $18 related to the Cortina Acquisition.

Current wording

In 2023, represents professional fees of $5 related to the acquisition of Cortina. In 2022, represents insurance costs of $22 and professional fees of $15 related to the acquisition of Cortina.

Previous wording

In 2023, represents a variable compensation payment of $1,667 related to the difference between the number of non-qualified stock options granted to an existing Class B unit holder as determined using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input, an adjustment to the fair value of the tax receivable agreement of $2, an ASC 842 (see Note 2.“Summary of Significant Accounting Policies”) rent adjustment of $192 related to the amortization of property lease incentives, moving costs of $35, software implementation costs of $35, professional fees related to a transfer pricing project of $37, legal fees related to the startup of a fund of $2, a fair value adjustment to the Neosho contingent purchase price consideration of $24 and a fair value adjustment to the Cortina contingent purchase price consideration of ($2). In 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($11,781), a fair value adjustment to the Neosho contingent purchase price consideration of ($299), an adjustment to the fair value of the tax receivable agreement of ($202), an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives, expenses related to obtaining a business license of $26, system implementation costs of $6 and expenses related to the Coronavirus pandemic of $6. In 2021, represents a fair value adjustment to the Cortina contingent purchase price consideration of $5,670, an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives and expenses related to the Coronavirus pandemic of $191, partially offset by a fair value adjustment to the Neosho contingent purchase price consideration of ($365) and an adjustment to the fair value of our tax receivable agreement of ($114).

Current wording

In 2024, represents a fair value adjustment to the Neosho contingent purchase price consideration of $12, an ASC 842 (see Note 2.“Summary of Significant Accounting Policies”) rent adjustment of $192 related to the amortization of property lease incentives, Tax Receivable Agreement adjustment of ($78), sign on bonuses paid to certain employees of $188, professional fees of $53 related to a transfer pricing project, legal fees of $46, data conversion costs of $27 and software implementation costs of $22. In 2023, represents a variable compensation payment of $1,667 related to the difference between the number of non-qualified stock options granted to an existing Class B unit holder as determined using the Black-Scholes method inclusive and exclusive of the expected annual dividend yield input, Tax Receivable Agreement adjustment of $2, an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives, moving costs of $35, software implementation costs of $35, professional fees related to a transfer pricing project of $37, legal fees related to the startup of a fund of $2, a fair value adjustment to the Neosho contingent purchase price consideration of $24 and a fair value adjustment to the Cortina contingent purchase price consideration of ($2). In 2022, represents a fair value adjustment to the Cortina contingent purchase price consideration of ($11,781), a fair value adjustment to the Neosho contingent purchase price consideration of ($299), Tax Receivable Agreement adjustment of ($202), an ASC 842 rent adjustment of $192 related to the amortization of property lease incentives, expenses related to obtaining a business license of $26, system implementation costs of $6 and expenses related to the Coronavirus pandemic of $6.

Previous wording

Historically, the working capital needs of our business have primarily been met through cash generated by our operations. We expect that our cash and liquidity requirements in the next twelve months will be met primarily through cash generated by our operations. The challenges posed by the COVID-19 pandemic and the impact on our business and cash flows are evolving rapidly and cannot be predicted at this time. Consequently, we will continue to evaluate our liquidity and financial position on an ongoing basis.

Current wording

Historically, the working capital needs of our business have primarily been met through cash generated by our operations. We expect that our cash and liquidity requirements in the next twelve months will be met primarily through cash generated by our operations. We will continue to evaluate our liquidity and financial position on an ongoing basis.

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, Secured Overnight Financing Rate (“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 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 …

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 $8.8 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 $10.1 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

Operating activities provided $23.4 million and $44.3 million for the years ended December 31, 2022 and 2021, respectively. This difference is primarily the result of increases in net income of $5.8 million, deferred tax expense of $3.1 million, operating lease liabilities of $0.9 million, a decrease in equity income from investments of $1.6 million and distributions received from investment funds of $0.6 million. These increases were partially offset by a change in the TRA liability of $0.1 million, a change in prepaid and other assets of $2.9 million, and decreases in accounts receivable of $0.5 million due to timing of payments received from clients, non-cash lease expense of $1.5 million, equity-based compensation expense of $0.3 million, accounts payable and accrued expenses of $17.8 million, primarily due to a change in the fair value of contingent consideration related to the Cortina Acquisition and accrued compensation of $9.8 million.

Current wording

Operating activities provided $21.6 million and $21.0 million for the years ended December 31, 2024 and 2023, respectively. This difference is primarily the result of increases in net income of $0.5 million, equity-based compensation expense of $0.3 million, depreciation and amortization of $0.1 million, a change in prepaid and other assets of $0.1 million and accrued compensation of $4.9 million. These increases were partially offset by a changes in deferred tax expense of $0.2 million, accounts receivable of $2.7 million, the TRA liability of $0.1 million, non-cash lease expense of $0.5 million, accounts payable and accrued expenses of $0.1 million, operating lease liabilities of $0.7 million and an increase in equity income from investments of $1.1 million

Previous wording

For the years ended December 31, 2022 and 2021, investing activities used $1.0 million and $0.9 million, respectively. The primary use of cash during 2022 and 2021was for the acquisition of furniture, equipment and leasehold improvements.

Current wording

For the years ended December 31, 2024 and 2023, investing activities used $1.7 million and $3.9 million, respectively. The primary use of cash during 2024 and 2023 was for the acquisition of furniture, equipment and leasehold improvements.

Previous wording

For the years ended December 31, 2022 and 2021, financing activities used $30.7 million and $20.1 million, respectively. Dividends of $6.8 million and $6.4 million were paid during 2022 and 2021, respectively, to Class A shareholders. Payments received from partners on notes receivable was $0.2 million in each of 2022 and 2021. Distributions to partners of Silvercrest L.P. of $7.9 million and $6.7 million were paid during 2022 and 2021, respectively. Repayment of borrowings under the credit facility was $2.7 million and $3.6 million in 2022 and 2021, respectively. Payments of contingent purchase price consideration totaled $4.6 million and $3.0 million in 2022 and 2021, respectively. During 2022 and 2021, approximately 476 thousand and 33 thousand shares of Class A common stock of Silvercrest Asset Management Group Inc. were purchased at a cost of $8.8 million and $0.5 million, respectively.

Current wording

For the years ended December 31, 2024 and 2023, financing activities used $21.5 million and $24.2 million, respectively. Dividends of $7.4 million and $7.0 million were paid during 2024 and 2023, respectively, to Class A shareholders. Payments received from partners on notes receivable was $0.1 million and $0.1 million during 2024 and 2023, respectively. Distributions to partners of Silvercrest L.P. of $6.7 million and $7.8 million were paid during 2024 and 2023, respectively. Repayment of borrowings under the credit facility was $2.7 million and $3.6 million in 2024 and 2023, respectively. Payments of contingent purchase price consideration totaled $0.1 million and $0.1 million in 2024 and 2023, respectively. During 2024 and 2023, approximately 266 thousand and 300 thousand shares of Class A common stock of Silvercrest Asset Management Group Inc. were purchased at a cost of $4.6 million and $5.7 million, respectively.

Previous wording

As of December 31, 2023 and 2022, $2.7 million and $6.3 was outstanding under our term loan with City National Bank.

Current wording

As of December 31, 2024 and 2023, $0 and $2.7 was outstanding under our term loan with City National Bank.

Previous wording

We measure the fair value of contingent consideration at each reporting period using a probability-adjusted discounted cash flow method based on significant inputs not observable in the market and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings. In relation to our acquisitions of Milbank and Jamison, the fair value of the contingent consideration was based on discounted cash flow models using projected EBITDA for each earnout period. The discount rate applied to the projected EBITDA was determined based on our weighted average cost of capital and considered that the overall risk associated with the payments was similar to the overall risks of our business as there is no target, floor or cap associated with the contingent payments. In relation to the Neosho acquisition, the fair value of the contingent consideration was based on discounted cash flow models using projected revenue from each earnout period. The discount rate applied to the projected revenue was determined based on the weighted average cost of capital of the Company and took into account that the overall risk associated with the payments was similar to the overall risks of the Company as there is no target, floor of cap associated with the contingent payments. In relation to the Cortina Acquisition, the income approach was used to determine the fair value o the contingent consideration by estimating a range of likely outcomes and payouts given these outcomes. The potential payouts were estimated using a Monte Carlo simulation and discounted back to their present values using a risk-free discount rate adjusted to account for the Company’s credit or counterparty risk to arrive at the present value of the contingent consideration payments. The discount rate for the contingent consideration payment was based on the revenue cost of capital for Cortina’s revenue.

Current wording

We measure the fair value of contingent consideration at each reporting period using a probability-adjusted discounted cash flow method based on significant inputs not observable in the market and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings. In relation to our acquisitions of Milbank and Jamison, the fair value of the contingent consideration was based on discounted cash flow models using projected EBITDA for each earnout period. The discount rate applied to the projected EBITDA was determined based on our weighted average cost of capital and considered that the overall risk associated with the payments was similar to the overall risks of our business as there is no target, floor or cap associated with the contingent payments. In relation to the Neosho acquisition, the fair value of the contingent consideration was based on discounted cash flow models using projected revenue from each earnout period. The discount rate applied to the projected revenue was determined based on the weighted average cost of capital of the Company and took into account that the overall risk associated with the payments was similar to the overall risks of the Company as there is no target, floor of cap associated with the contingent payments. In relation to the Cortina Acquisition, the income approach was used to determine the fair value of the contingent consideration by estimating a range of likely outcomes and payouts given these outcomes. The potential payouts were estimated using a Monte Carlo simulation and discounted back to their present values using a risk-free discount rate adjusted to account for the Company’s credit or counterparty risk to arrive at the present value of the contingent consideration payments. The discount rate for the contingent consideration payment was based on the revenue cost of capital for Cortina’s revenue.

Previous wording

The average value of our assets under management for the year ended December 31, 2022 was approximately $30.6 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 $3.1 billion for the year ended December 31, 2022, which would cause an annualized increase or decrease in revenues of approximately $12.3 million for the year ended December 31, 2022, at a weighted average fee rate for the year ended December 31, 2022 of 0.40%.

Current wording

The average value of our assets under management for the year ended December 31, 2024 was approximately $34.9 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 $3.5 billion for the year ended December 31, 2024, which would cause an annualized increase or decrease in revenues of approximately $12.4 million for the year ended December 31, 2024, at a weighted average fee rate for the year ended December 31, 2024 of 0.35%.

Previous wording

Information regarding restricted stock units and stock options can be found in Note 16. “Equity-Based Compensation” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.

Current wording

Information regarding restricted stock units and stock options can be found in Note 16. “Equity-Based Compensation” in the accompanying consolidated financial statements.

Previous wording

In connection with our initial public offering and reorganization of Silvercrest L.P. that was completed on June 23, 2013, we entered into a tax receivable agreement with the partners of Silvercrest L.P. that requires it to pay them 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that it actually realizes (or is deemed to realize in the case of an early termination payment by it, or a change in control) as a result of the increases in tax basis and certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement or attributable to exchanges of shares of Class B common stock for shares of Class A common stock. The payments to be made pursuant to the tax receivable agreement are a liability of Silvercrest and not Silvercrest L.P.

Current wording

In connection with our initial public offering and reorganization of Silvercrest L.P. that was completed on June 23, 2013, we entered into a tax receivable agreement with the partners of Silvercrest L.P. that requires the Company to pay them 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in the case of an early termination payment by it, or a change in control) as a result of the increases in tax basis and certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement or attributable to exchanges of shares of Class B common stock for shares of Class A common stock. The payments to be made pursuant to the tax receivable agreement are a liability of Silvercrest and not Silvercrest L.P.

Previous wording

Information regarding recent accounting developments and their impact on Silvercrest can be found in Note 2. “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” in “Item 8. Financial Statements and Supplementary Data” of this filing.

Current wording

Information regarding recent accounting developments and their impact on Silvercrest can be found in Note 2. “Summary of Significant Accounting Policies” in the accompanying consolidated financial statements.