fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed in the Company’s filings with the SEC, including those factors listed under the caption entitled, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC.

In some cases these statements can be identified by forward-looking words such as believe, expect, anticipate, plan, estimate, likely, may, will, could, continue, project, predict, goal, the negative or plural of these words, and other similar expressions.

These forward-looking statements are predictions based on Silvercrest’s current expectation and its projections about future events. All forward-looking statements made on this call are made as of the date hereof, and Silvercrest assumes no obligation to update these forward-looking statements. At this time, all participants are in a listen-only mode.

Later, we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions] As a reminder, this conference is being recorded. And I would like to introduce your host for today’s conference Mr. Richard Hough. Sir you may begin..

Thank you very much and welcome to our second quarter 2015 earnings call. Silvercrest substantially and organically grew our net new assets for the second quarter ended June 30, 2015 including nearly $0.5 billion in new client accounts. Along with increased revenue, earnings and maintained margins.

The second quarter represented our eighth straight quarter of positive organic growth for Silvercrest, generated by both new ultra-high net worth and institutional business, including new institutional sub-advisory relationships.

We’re extraordinarily proud of this organic growth, since the second quarter normally includes significant outflows for client tax payments.

Silvercrest also successfully closed its acquisition of assets from Jamison, Eaton & Wood, Inc., enhancing our greater New York presence, adding approximately $0.7 billion in discretionary assets and a significant non-discretionary institutional relationship advising on multi-billions, as well as valued new colleagues.

Our total assets under management increased to $19.0 billion at June 30, 2015, from $18.2 billion as of March 31, 2015, and $16.7 billion as of June 30, 2014. Of that total, discretionary assets under management grew to $12.6 billion as of June 30, 2015 from $11.8 billion as of March 31, 2015, an increase of approximately 7%.

We are pleased with the execution of the firm's business strategy, including consistent strong organic growth, new institutional sub-advisory relationships, a successful acquisition and increased visibility of the firm's prestigious brand.

In August 5, 2015, the Company's Board of Directors declared a quarterly dividend of $0.12 per share of Class A common stock. The dividend will be paid on or about September 18, 2015 to shareholders of record as of the close of business on September 11, 2015.

With that, I will turn it over to Scott Gerard, our CFO for financial comments and then will be taking question. Thank you very much..

Thanks, Rick. As you may have read in our earnings release again for the second quarter, discretionary AUM as of June 30, 2015, was $12.6 billion and total AUM as of June 30, 2015 was $19 billion.

Again included in our AUM as of June 30, 2015 was approximately $0.7 billion of AUM acquired as part of recent acquisition of certain assets of Jamison, Eaton & Wood. Revenue for the quarter was $18.5 million and reported consolidated net income for the quarter was $3.3 million.

Delving a little bit further into Q2 of this year versus last year, again revenue for the second quarter was $18.5 million representing approximately an 8% increase over revenue of $17.2 million for the same period of last year. This increase was driven primarily by growth in our advisory fees as a result of increased AUM.

Expenses for the second quarter were $13.9 million, representing approximately a 7% increase from expenses of $13 million for the same period of last year. This increase is primarily attributable to increase in compensation benefits expenses of $0.7 million and an increase in G&A expense of $0.3 million.

Compensation grew primarily because of an increase to the accrual for a partner incentive bonuses and G&A increase primarily, because of increased professional fees and investment and research cost. Reported consolidated net income was $3.3 million for the quarter compared to $2.8 billion in the same period of last year.

Reported net incomes attributable to Silvercrest or to Class A shareholders for the second quarter of this year was $1.7 million, or $0.22 per basic and diluted Class A share.

Adjusted EBITDA, which we define as EBITDA without giving effect to equity based compensation expense and non-recurring items, was approximately $5.4 million or 28.9% of revenue for the quarter, compared to $5.1 million or 29.7% of revenue for the same period last year.

Adjusted net income, which we define as net income without giving effect to non-recurring items, an income tax expenses assuming a corporate rate of 40% was $2.9 million for the quarter or $0.23 for adjusted basic and diluted share.

Adjusted earnings per share is equal to adjusted net income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic adjusted EPS and to the extent [alluded] (Ph) we add unvested deferred equity units and performance units to the total shares outstanding to compute diluted adjusted EPS.

Looking at the first half of this year compared to the first half last year revenue was $36 million representing approximately a 6% increase over revenue of $33.9 million for the same period last year; again this primarily driven by growth in management and advisory fees revenue as a result of increased AUM.

Expenses for the first half were $27.2 million representing approximately a 5% increase from expenses of $25.9 million for the same period last year. Again, this increase was primarily attributable to increases in compensation benefits expense of $0.7 million and G&A of $0.6 million.

Compensation again went because of an increased partner incentive bonus accrual and G&A increases were driven by both professional fees and investment research costs.

Reported consolidated net income was $6.1 million for the first half as compared to $5 million in the same period last year and reported net income attributable to the Class A shareholders for the first half of this year was $3.1 million or $0.40 per basic and diluted Class A share.

Adjusted EBITDA for the first half of this year was approximately $10.3 million or 28.7% of revenue for the first half and that compared to $10.1 million or 29.7% of revenue for the same period last year.

Adjusted net income for the first half was $5.5 million or $0.43 per adjusted basic and diluted share and again adjusted earnings per share takes adjusted net income and divides by actually Class A and Class B shares outstanding for basic adjusted EPS and for diluted adjusted EPS we add any unvested differed equity units or performance units.

Little bit of detail about the Jamison acquisition, so again, we closed the deal on June 30 in consideration for the purchased assets and goodwill of closing, we made cash payments in the aggregate amount of approximately $3.6 million.

We issued promissory notes totaling approximately $2.2 million and we issued Class B units with a value equal to approximately $3.6 million.

Total deal consideration over timing includes contingent consideration in a form of an annual cash earn out which will based on 20% of the EBITDA attributable to the business and assets of Jamison for the first five years after the closing of the deal.

Looking at the balance sheet, total assets were $96.4 million as of June 30 compared to $99.7 million as of December 31 of last year. Cash and cash equivalents were $19.1 million at June compared to $30.8 million at the end of last year.

Notes payables were $6.2 million as of June 30 and $4.1 million as of December 31 last year and as of June 30 this year total stockholders equity was $44.9 million. That concludes my remarks; I’ll turn it back over to Rick to transfer it over to Q&A..

Thank you very much, Scott. We’re ready for questions at this time. Thank you..

[Operator Instructions] Our first question comes from Steven Schwartz with Raymond James..

Hey, good morning everybody..

Good morning Steven..

Good morning, Steven..

Good morning. A few on just the institutional flow, you see just as a $500 million came from client, how much to that was institutional..

We had new business coming into at the institutions of $358 million, so it’s a very good institutional quarter..

That was okay..

And if you reverse out the Jamison acquisition obviously, that’s not organic, but acquired assets that means. That we had almost $100 million in new high-net-worth clients in the quarter.

That the initial funding of accounts not total follows that’s just day one when they’ve become a new relationship or around day one, let’s just call it that it’s $100 million in new business, which is quite strong as well.

What pleased us most about this quarter Steven is that the second quarter is often significantly a negative one in our history, not always, it was I believe positive last year as well, but the negative outflows or taxes substantially can depress that quarter.

It’s expected as part of the business, but the tax outflow this year was very high, and so to overcome that with new business contributed by both the high-net-worth side and the institutional was really key to us. The reason taxes were so high year this year is, because and it was expected it is due to capital gains.

So the good news is we did very well on behalf of our clients. The bad news is we eventually have to pay taxes..

It actually works.

Can you talk about the just maybe flush out, you mentioned institutional sub- advisory what’s going on there?.

Well, I think we announced in both our second quarter and third quarter calls and since as last year, that we were actively seeking not just directed mandates for managing a set pool of assets or becoming private set pool of assets, but we were seeking sub-advisory relationships with institutions that might have a growing pool of assets.

That is to say, a pool of assets that is either being marketed or is linked directly to a retirement and an annuity type business that would have growing assets. And we have two new relationships in the quarter that represented wins in that area which is somewhat new for Silvercrest.

So that was the achievement of the goal that we had for business that isn’t just winning a update, but can expand..

Was any of that funded, any of that is funded?.

Yes it was funded.Yes those nice close we see as a result of some of that funding..

Okay.

Great and then just a couple on Jamison for Scott, Scott what is the rate on the Jamison notes?.

The rate is 5%..

Okay.

And the earn out that just goes into that capitalized goodwill or something like that?.

Yes that what happens is you do a fair value calculation as of the date of closings so that came out to about $1.4 million and then that gets trued up through the P&L in subsequent years as the earn outs crystallize..

Okay.

So it goes through income, all right?.

Yes it has to go through income that is based on new accounting standards effective in 2009 that changed..

Okay, all right. Thanks guys. I’ll get back in queue..

Sure, okay. Thank you. Operator [Operator Instructions] Our next question comes from Michael Kim with Sandler O’Neill..

Good morning, Michael..

Good morning.

First just can you quantify the two new sub-advisory mandates that funded during the quarter and then any color on sort of the relative economics of those wins versus either the institutional business or sort of the franchise more broadly?.

So let me see I’ve got those flows, we usually don’t get quite this granular. I’m not sure I’ve got it as granular as you want it. So I’ll follow up with that and if you want to publish it, it still becomes public that would be fine. I just have the aggregate numbers. So I don’t have each of those split out.

Sorry to say, I will tell you that the fee rates is consistent with our institutional business long and our high net worth business as you know is working with clients significant enough to essentially get institutional pricing, there isn’t much disparity there.

So you won’t see movement in particular downward as a result of winning larger institutional business that is going to be consistent on the fee basis with our business overall. So using those aggregate numbers could be a good idea of revenue run rate..

Got it, okay.

And then any update on sort of the institutional pipeline, I think last quarter you highlighted a $1.4 billion of searches that you felt were actionable, so just curious any mandates that may have funded in the second quarter and then any color on the pipeline or the outlook going forward?.

If I recall Michael, I may have used that number for fourth quarter with you and talking about the pipeline for the coming year and then I believe in the last call, I emphasize that our pipeline looks similar. If I gave a number it would have been around that, I think I try to stay away from a number because it moves around quite a bit.

I will say that the actionable pipeline which I call that the fine pool of opportunities we have for completed RFP or where semi finalist to finalist within let’s say six months something like that. That’s generally the timeline we’re going to know, remains quite robust.

Do keep in mind when I gave you that much larger number the $1.4 billion that we just had $360 million in new client asset on the institutional side flow so that’s a very nice chunk. And obviously we’re refilling that till all the time but that was an outlook for extend period of time, it wasn’t necessarily six months when I gave you that.

So at remains robust but we’re still looking at some advisory relationships and the overall search environment has slowed just in general in the industry, but the invitation only model for manger searches that we see in the business continues to be pretty active for the kind of strategies that we have.

So we’re optimistic about the continued growth in that business..

Okay and then just finally, any update on sort of the plans to grand equity awards and how that might impact compensation expense and margins as we look ahead..

Right so, as we had forecasted for the last two quarterly calls we felt it was important to give out those equity plans just as a point of review for people who may be knew to joining us. We have set-aside meaningful equity incentive for the partners here. We felt we had to accomplish them good things for the company before thosew could be given out.

And given the fact that we went probably two years ago, we have substantially grown the institutional business, we have continued the strong organic growth in our high-net-worth business.

We successfully completed in acquisition, we successfully hired a new team that’s been contributing assets in growing our Virginia presence and finally our brand is significantly more visible.

Having achieve those things with total shareholders we would, we felt there was time to reward our partners and so we were looking to reward about 60% of the available core which is about and round numbers about a $1 million shares to vest over four years.

At the last call we said that those awards would be imminent, those awards will made yesterday with the valuation as of the closing price for the stock on Wednesday, which I believe was $13.23..

Correct, Class B is the grants for me that will invest in Class B units that’s what was granted in past..

So that was disclosed in our filings to the 10Q yesterday..

Yes, subsequent about..

And I believe at the time we were talking about doing it, the stock was around call it $60 and around numbers so the hit to the P&L is $3 per share less then we would have expected at that time which is good. And in terms of earnings Scott I leave that you but I believe its on an annual basis close to $0.04..

Right, if yes you if you based that on, adding in the incremental shares that were granted which was – what was granted this week was about $967,000 shares so that’s the impact. That will vest evenly over four years and they are equity settled the words therefore the expense burden is locked in at the closing price on Wednesday..

Yes, Michael, the final part of your question was what that is due to compensation, we have targeted for the business around 55% total cash compensation ratio. we hover around that 55, 56, 57, 55 somewhere in that range this move it closer to 60% in total comp..

And just to make sure I heard you correctly, you said incremental expense related to the equity grants, the dilution is $0.04, is that?.

Yes. Per quarter..

Per quarter. got it. Okay. That’s more sense. Okay. Thanks for taking my questions..

On an adjusted diluted EPS based per adjusted diluted EPS..

Yes. Got it..

Okay. Thank you, Michael..

[Operator Instructions] Our next question comes from the line of Adam France with 1492 Capital..

Hey, good morning,.

Good morning, Adam..

Thanks for squeezing me in here.

Rick, could give me a maybe a tab-2 areas of improvement, could you need to be working on over there and then any feel or pattern to what you are seeing out there in terms of the next set of acquisitions? Prices coming down, prices going up, is there regional pattern, any thoughts you can give me there, much appreciated..

Absolutely. First of all, with regards to business and where we need to do work, I would highlight two areas.

I think just to be clear about our strategy, its growing institutional business which is very new to us over the past few years and has grown substantially, it’s continued organic growth through the building of - in high-net-worth to the building of our brand, which I think continues to get greater visibility.

And it’s strategic acquisitions in higher spend money center cites or areas. So that includes the Virginia market where we already were, centered in and around Richmond, Virginia, in Greater New York area, Chicago, Los Angeles, San Francisco, Texas, perhaps Minneapolis, Florida, Idaho, places like that.

And we’re going to execute those carefully overtime. We’ve typically done acquisitions every two to three years; it has been quite sometimes since we acquired an RIA when we did the Jamison acquisition.

And in my last call Adam, I mentioned that I saw the acquisition model accelerating a bit compared to Silvercrest’s history ultra extraordinarily important to us.

And we are very careful about the partners that we are going to do business with because we want to make sure we enjoy our job and have fun coming in to work everyday growth every business together. In terms of that we a few conversations I think I said last year that we were more conversations than we ever had in our history.

Given that we did one, you can image there others that sell outfor a variety of reasons. One reason sometimes is price.

There are in some areas eye-popping numbers in terms of price, that big banks and regional brokerages sometimes are willing to pay and frankly pay on terms that don’t make a lot of long-term sense from wise use of capital return on investment in my opinion. And that can turn heads with potential partners.

I think these people that we get the further swift and fine commonality with understand the realities of the business and that in becoming feature shareholders of Silvercrest. They too we are going to one has to be good stewards of capital because if were to come together we will be source of their capital.

And we have found people who are putting culture first potential future growth opportunities first we structure deals for that people get upside that they grow well with us. And then become a bit more reasonable around price make for great partners.

I would say the multiples have been moving up a bit over the past year, condition of the environment we’re inbut it hasn’t moved so far out of reach that we can’t get good deals done have good conversations, but it is important that we not only invest our capital wisely on behalf you and other shareholders, but that our feature partners see that’s what in their best interest in the long run as well.

With regards to what we work on in the business to get your priority of your question.

Having just answered you second, we’ve been working to expand and grow the family office service side a bit that took a hit just before the IPO and has had some declining revenues since we gone public that has been talked about, it’s I think going into the IPO was close to 10% of the revenue of the business and declined a bit, we have seen most of that behind us, there was an incremental growth in that business in the last quarter, some of that is timing but there is real growth there.

I don’t think that story is completely over but we that is an area that I think we can grow especially with some of the new larger high net worth clients that we’ve gotten recently.

We have also added some new personnel in that business and we did so, I think without hurting our margins, which is good we’ve made some other investments along those lines. A second area that we’re focusing on a bit here is technology; we don’t and can’t become a technology company but as you know, is increasingly important in our world.

And it’s not just a generational thing, it doesn’t matter what age you are and how much you have but people are becoming more and more digitally connected and we’re making investments in those areas nearly to help us provide much better service to our clients.

The one of the key distinguishing characteristics of our firm is how we service our clients and work with them. Performance on investment capabilities can be [indiscernible] there are periods of time where style comes in out of favour..

Sure..

And world where especially [indiscernible] rocking has 50 asset management firms, one of the key market distinguishing characteristics that we can bring to the table is how we work with and service our clients.

So we have – we are great at it, we have a dedicated focus on it but I think some investments and technology are key and it’s something that we have started to make and we have senior people deferment, portfolio managers very engaged in that process..

Very good, thank you, Rick..

You’re welcome..

[Operator Instructions] We have a follow-up question from Mr. Michael Kim with Sandler O’Neill..

Hey, guys thanks for taking my follow-ups, just one in terms of the equity grants, would you expect this to be sort of an annual type program where next year you should sort of continue to grant some equity?.

Given the amount of equity that we gave out Michael which was 60% of the pool and the fact that people whether it’s an analyst like yourself or good shareholders have reminded us that that’s meant the last four or five years it’s going to be a bit slower now that we’ve given out after two years of bit more than half the pool.

So we expect to get more out but I think it’s going to be much more sensitive and contingent on us growing top line revenue because we do want to maintain compensation levels at reasonable level as compared to revenue so that if we don’t we depress our margins and we think where we’re at is pretty reasonable.

So incremental grants are going to be closely linked to the incremental health of the revenue in the business. And going forward not unlike what we’ve just done we want to make sure that we have some real accomplishments which should be reflected in top line revenue before we give grants.

We waited until we had a fair bit of accomplishments and improved ourselves in the marketplace, we’ve had a remarkable and good period of growth in a very stable business while maintaining margins and we thought the awards were warranted, we’re going to take the same attitude going forward..

Okay.

And then maybe just one quick modelling one for Scott, how should we be thinking about sort of incremental expense related to the on-boarding of Jamison looking into the back half of the year and beyond particularly as it relates to the G&A line?.

Yes, I think that the nature of Jamison’s expense structure is very much like ours and from a EBITDA margin perspective, I would expect as their P&L maintain consistency there, so..

Michael this is Ric. Since I answer that evaluation question before for Adam, I think it’s worth mentioning that when we go into a relationship with good new partners and boy, our Jamison folks are came up and they are wonderful people.

They set so well here culturally, but we work very hard with the party that we’re negotiating with, they have that really solid agreement on what the P&L and EBITDA margins looks like going forward for the business.

It’s not only helpful in coming up with a the good price and being able to give our new partners full and fair value of their business, but it avoids any future misunderstanding and concerns and pressures if there is an earn out and some problem around what the margin contribution really is.

And that’s important, because to the extent there is an earn out, it represents meaningful offside for a new partners, should they grow the business at a good - and we want to make sure that they benefit from that. For growth, we willing to pay for it and we absolutely want new partners to benefit.

So getting that agree to upfront is really critical and we’ve been pretty good at that and have designed the acquisition far going in to really being inline with our existing margins which are hovering from the very high 20s to low 30s..

Got it, okay. Thanks for taking my follow up questions..

You are welcome..

Our next question comes from the line of Steven Schwartz with Raymond James..

Hi guys a couple of follow-ups. First just on the dilution from the equity stock compensation plan, Ric that was that’s $0.4 - I just want to make sure that $0.4 per quarter..

Correct..

Okay, and then one other thing on this, is that would be an accurate statement from the expense side, but Scott doesn’t the shares go into account immediately..

Yes, upon grand, so and that’s $0.4 reflects that, that is correct..

So, there is not in the - $961,000 shares in the account..

When we report next period, it will be included in the adjusted diluted account..

Okay, so the dilution actually is greater than the $0.4 because of the share that comes into denominator..

Right, but what I am saying is that $0.4 increment factors in that your adjusted diluted share account goes up by virtue of these grants..

Okay, we can discuss that offline. I am coming up with something little bit different.

And that just a we are going back to two sub-advisory relationships was that small cap?.

Yes..

Okay, all right, that’s what I want to do know thanks guys..

Sure. If we do have some opportunities Steven in equity income that’s been a great performing strategy for us and there have been a couple of key potential institutional, institutions they have approved equity income has strategies that could funded at any time, so it would be interesting to see what happens of that..

Okay, good. End of Q&A.

Thank you at this time, there is no further questions. I would like to turn the call back over to Mr. Richard Hough for closing remarks..

All right thank you very much, thanks everybody for joining us in the second quarter 2015 call.

Just to conclude as I mentioned during the business update, it was very good quarter for the firm where we increased our discretionary assets nearly 7% whether through a combination of very strong organic growth on both the institutional on high-net-worth side or as the result of executing successfully on our acquisition strategy with the combination of Jamison and wonderful new colleagues we have there.

Just to reemphasize, we have now for two years been growing organically for eight straight quarters for just two years and have executed on each piece of the strategic plan we put forth for this company to shareholders.

Again, building institutional growth, continued organic growth in the high-net-worth business, acquisitions are hiring talented teams that culturally fit into our building and enhancing the visibility of our prestigious brand.

The execution by my partners has been wonderful we’re having a great deal of fun growing this business and we look forward to continuing it.

It’s been unusually smooth, the markets have clearly been cooperating for some time and you never know how bumpy it can on the high net worth side, but we as I mentioned before have the robust pipeline in both the institutional and high-net-worth business areas and we feel very good about where are positioned now for feature growth.

Thank you very much for joining our call and look forward to talking to you soon. Thanks..

Ladies and gentlemen, thank you for participation in today’s conference. This does conclude the program. You may all disconnect. Have a wonderful day..