Associated Capital Reports Results for the Third Quarter 2024
AUM: $1.34 billion at September 30, 2024
Book Value per share ended the quarter at $42.02
Returned $45.9 million to shareholders through dividends declared and share repurchases in the third quarter
Approved $0.20 per share shareholder designated charitable contribution for registered shareholders, bringing total to $42 million since our spin-off in 2015
GREENWICH, Conn., Nov. 08, 2024 (GLOBE NEWSWIRE) -- Associated Capital Group, Inc. ("AC" or the "Company"), a diversified financial services company, today reported its financial results for the third quarter of 2024.
Financial Highlights($ in 000's except AUM and per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
AUM - end of period (in millions)
$
1,340
$
1,588
$
1,340
$
1,588
AUM - average (in millions)
1,349
1,580
1,450
1,686
Revenues
2,415
2,200
8,021
7,047
Operating loss before management fee (Non-GAAP)
(3,604
)
(3,533
)
(9,824
)
(9,050
)
Investment and other non-operating income/(loss), net
37,239
3,794
67,116
37,140
Income before income taxes and noncontrolling interests
30,323
273
51,556
25,015
Net income/(loss)
23,242
(16
)
40,048
21,109
Net income/(loss) per share - basic and diluted
1.09
0.00
1.87
0.97
Class A shares outstanding (000's)
2,297
2,672
2,297
2,672
Class B " "
18,951
18,951
18,951
18,951
Total " "
21,248
21,623
21,248
21,623
Book value per share
$
42.02
$
41.43
$
42.02
$
41.43
Giving Back to Society - (Y)our "S" in ESG
AC seeks to be a good corporate citizen by supporting our community through sponsoring local organizations. On August 7, 2024, the Board of Directors approved up to a $4.3 million, or $0.20 per share, shareholder designated charitable contribution ("SDCC") for registered shareholders as of October 18, 2024. Based on the program created by Warren Buffett at Berkshire Hathaway, our corporate charitable giving is unique in that the recipients of AC's charitable contributions are chosen directly by our shareholders, rather than by our corporate officers. Since our spin off as a public company, the shareholders of AC have donated approximately $42 million, including the most recent SDCC, to over 190 501(c)(3) organizations across the United States.
Third Quarter Financial Data
Assets under management ended the quarter at $1.34 billion versus $1.59 billion at September 30, 2023.
Book value was $42.02 per share (ex- $2 per share dividend) compared to $41.43 per share at September 30, 2023.
Third Quarter Results
Total revenues in the third quarter of 2024 were $2.4 million compared to $2.2 million in the third quarter of 2023. Revenues generated by the GAMCO International SICAV, GAMCO Merger Arbitrage (the "SICAV") were $1.1 million versus $0.8 million in the prior year period. All other revenues were $1.3 million compared to $1.4 million in the year ago quarter.
Starting in December 2023, the Company recognized 100% of the merger arbitrage SICAV revenues received by Gabelli Funds, LLC. In turn, AC pays the marketing expenses of the SICAV previously paid by Gabelli Funds, and remits an administrative fee to Gabelli Funds for administrative services provided. This change better aligns the financial arrangements with the services rendered by each party. The net effect of this change had no material impact on our operating results.
Total operating expenses, excluding management fee, were $6.0 million in the third quarter of 2024 and $5.7 million in the third quarter of 2023. The increase is primarily attributed to the $0.5 million of marketing expenses on the merger arbitrage SICAV, offset partially by lower variable based compensation expenses.
Net investment and other non-operating income was $37.2 million for the third quarter of 2024 compared to $3.8 million in the third quarter of 2023. The primary drivers of this quarter's results included gains from our merger arbitrage partnerships, a $2 per share special dividend declared on our holdings of GAMCO Investors, Inc. and interest income.
For the quarter ended September 30, 2024, the management fee was $3.3 million versus none in the year ago quarter.
The effective tax rate applied to our pre-tax income for the quarter ended September 30, 2024 was 22.9%. In the year ago quarter, the effective tax rate was 60.8% due to the deferred tax expense from a foreign investment.
Assets Under Management (AUM)
Assets under management at September 30, 2024 were $1.34 billion, $251 million lower than year-end 2023, the result of net outflows of $288 million and the impact of currency fluctuations in non-US dollar denominated classes of investment funds of $4 million, offset partially by market appreciation of $41 million.
September 30,
December 31,
September 30,
2024
2023
2023
($ in millions)
Merger Arbitrage(a)
$
1,095
$
1,312
$
1,322
Long/Short Value(b)
208
244
233
Other
37
35
33
Total AUM
$
1,340
$
1,591
$
1,588
(a) Includes $431, $621, and $613 of sub-advisory AUM related to GAMCO International SICAV - GAMCO Merger Arbitrage, and $68, $69, and $67 of sub-advisory AUM related to Gabelli Merger Plus+ Trust Plc at September 30, 2024, December 31, 2023 and September 30, 2023, respectively.(b) Includes $201, $237 and $226 for which Associated Capital receives only performance fees, less expenses of $25, $25, and $24 at September 30, 2024, December 31, 2023 and September 30, 2023, respectively.
Alternative Investment Management
The alternative investment strategy offerings center around our merger arbitrage strategy, which has an absolute return focus of generating returns independent of the broad equity and fixed income markets. We also offer strategies utilizing fundamental, active, event-driven and special situations investments.
Merger Arbitrage
For the third quarter of 2024, the longest continuously offered fund in the merger arbitrage strategy generated gross returns of 4.88% (3.80% net of fees). A summary of the performance is as follows:
Full Year
Performance%(a)
3Q '24
3Q '23
YTD '24
YTD '23
