EX-99.11 26 d431644dex9911.htm EX-99.11 EX-99.11

Exhibit 99.11

HISTORICAL AND COMBINED NON-GAAP MEASURES OF TWMH, THE TIG ENTITIES AND ALVARIUM

Reconciliation of Combined Historical GAAP Financial Measures to Certain Combined Historical Non-GAAP Measures

Historically, we used Adjusted Net Income, Adjusted EBITDA, and Economic EBITDA as non-GAAP measures to track our performance and assess the companies’ ability to service their borrowings. We believe the non-GAAP measures provide useful information to investors to help them evaluate historical operating results by facilitating an enhanced understanding of historical operating performance and enabling them to make more meaningful period to period comparisons. Adjusted Net Income, Adjusted EBITDA, and Economic EBITDA as presented within the Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of TWMH, the TIG Entities, and Alvarium are supplemental measures of historical performance that are not required by, or presented in accordance with, US GAAP, or UK GAAP. For more information, see “Non-GAAP Financial Measures” in TWMH and the TIG Entities’ respective Management’s Discussion and Analysis of Financial Condition and Results of Operations sections and “Non-UK GAAP Financial Measures” in Alvarium’s Management’s Discussion and Analysis of Financial Condition and Results of Operations section. The following tables present the reconciliation of historical and combined net income as reported in the historical Statements of Operations to Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA:

 

For the Nine Months Ended September 30, 2022    TWMH     TIG Entities     Alvarium
(a)		     Total  

Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA

         

Net income before taxes

    $ 2,381     $ 21,986     $ (11,187 )    $ 13,180  

Equity settled share based payments P&L(b)

      2,860       —         —         2,860  

Transaction expenses(c)

      3,371       2,283       6,411       12,065  

Change in fair value of (gains) / losses on investments (d)

      (256 )      —         —         (256 ) 

Fair value adjustments to strategic investments(e)

      —         (9,010 )      116       (8,894 ) 

Holbein compensatory earn-in (f)

      1,086       —         —         1,086  

Other one-time deal costs (g)

      273       —         —         273  

Long term incentive plan expenses (h)

      —         —         13,121       13,121  

Legal settlement (i)

      —         —         3,057       3,057  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined adjusted income before taxes

      9,715       15,259       11,518       36,492  

Adjusted income tax expense

      (656 )      (642 )      1,615       317  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Adjusted Net Income

      9,059       14,617       13,133       36,809  

Adjustments related to joint ventures and associates(j)

      —         —         1,536       1,536  

Interest expense, net

      310       1,757       3,568       5,635  

Income tax expense

      363       911       (1,637 )      (363 ) 

Adjusted income tax expense (benefit) less income tax expense

      293       (269 )      22       46  

Depreciation and amortization

      1,790       114       3,968       5,872  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Adjusted EBITDA

      11,815       17,130       20,590       49,535  

Affiliate profit-share in TIG Arbitrage(k)

      —         (7,037 )      —         (7,037 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Economic EBITDA

    $ 11,815     $ 10,093     $ 20,590     $ 42,498  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(a)

See Nine Months Ended September 30, 2022 GAAP Bridge table below for an explanation of the conversions of Alvarium’s historical net income to US GAAP and USD.

 

1

(b)

Represents add-back of the non-cash expense related to equity-based compensation to its employees.

(c)

Represents adjustment for transaction expenses related to the Business Combination, in order to reflect our recurring performance.

(d)

Represents the change in unrealized gains/losses related primarily to the interest rate swap.

(e)

Represents add-back of unrealized (gains) / losses on strategic investments.

(f)

Add-back of cash portion of the compensatory earn-ins related to the Holbein acquisition as discussed in Note 3, “Variable Interest Entities and Business Combinations” of the Notes to the Consolidated Financial Statements of TWMH.

(g)

Related to professional fees associated with an acquisition target. These costs are not related to the Business Combination.

(h)

Represents adjustment for one-time payments made under LTIP.

(i)

Represents adjustment for legal expense recorded during the three months ended September 30, 2022 for an exit settlement agreement.

(j)

Represents Alvarium’s share of joint ventures and associates Adjusted EBITDA.

(k)

Represents adjustment for the affiliate’s profit-share participation in TIG Arbitrage Fund, as the TIG Entities’ controlling shareholders are not entitled to such net income. The entire amount of net income earned from the TIG Arbitrage Fund is included within income in the Company’s statement of operations, of which Class D-1 members are entitled to 49.37% of the pre-tax net profits and losses as discussed further in Note 11, “Members’ Capital,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities. The profit-share participation is described in more detail under ”Business of Alvarium Tiedemann—Fund Management Fees.” Subsequent to the Business Combination, the Class D-1 equity interest will not be entitled to a 49.37% distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

     Nine Months Ended September 30, 2022  
£ and $‘000    GBP
UK GAAP		      GAAP
Bridge		      GBP US
GAAP		      USD US GAAP(1)  

Profit for the financial period before taxes

    £ (10,700 )     £ 1,796      £ (8,904)      $ (11,187 ) 

Equity settled share-based payments (i)

      —          —          —          —    

Other one-time fees and charges (i)

      5,103        —          5,103        6,411  

Fair value adjustments to strategic investments (i)

      92        —          92        116  

LTIP (i)

      10,443        —          10,443        13,121  

One-time legal settlement

      2,433        —          2,433        3,057  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income before taxes

      7,371        1,796        9,167        11,518  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income tax expense

      (1,400 )       649        1,285        1,615  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income

      5,971        2,445        10,452        13,133  

Joint ventures - Group share of Adjusted EBITDA (i)

      1,665        (480 )       1,185        1,489  

Associates - Group share of Adjusted EBITDA (ii)

      93        (56 )       37        47  

Interest expense, net

      2,839        1        2,840        3,568  

Income tax (benefit) / expense

      (654 )       (649 )       (1,303 )       (1,637 ) 

Adjusted income tax expense less income tax expense (benefit)

      2,054        —          18        22  

Depreciation and amortization

      6,204        (3,046 )       3,158        3,968  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    £ 18,172        (£1,784 )     £ 16,388      $ 20,590  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

 

(1)

Represents adjustments made to convert Alvarium balances from GBP to USD at a 1.0000 to 1.2564 conversion ratio.

 

2

(i)

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alvarium” for footnotes related to Adjusted EBITDA adjustments.

 

For the Nine Months Ended September 30, 2021    TWMH      TIG Entities      Alvarium (a)      Total  

Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA

            

Net income before taxes

    $ 5,435      $ 26,348      $ 5,526      $ 37,309  

Equity settled share based payments P&L(b)

      3,930        —          1        3,931  

Transaction expenses(c)

      2,669        738        2,937        6,344  

Change in fair value of (gains) / losses on investments (ed)

      6        —          —          6  

Fair value adjustments to strategic investments(e)

      —          365        —          365  
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined adjusted income before taxes

      12,040        27,451        8,464        47,955  

Adjusted income tax expense

      (739 )       (1,685 )       (3,381 )       (5,805 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted Net Income

      11,301        25,766        5,083        42,150  

Adjustments related to joint ventures and associates(f)

      —          —          2,063        2,063  

Interest expense, net

      341        1,681        1,088        3,110  

Income tax expense

      475        587        3,381        4,443  

Adjusted income tax expense (benefit) less income tax expense

      264        1,098        —          1,362  

Depreciation and amortization

      1,556        124        6,757        8,437  
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted EBITDA

      13,937        29,256        18,372        61,565  

Affiliate profit-share in TIG Arbitrage(g)

      —          (11,457 )       —          (11,457 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Economic EBITDA

    $ 13,937      $ 17,799      $ 18,372      $ 50,108  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(a)

See Nine Months Ended September 30, 2021 GAAP Bridge table below for an explanation of the conversions of Alvarium’s historical net income to US GAAP and USD.

(b)

Represents add-back of the non-cash expense related to equity-based compensation to its employees.

(c)

Represents adjustment for transaction expenses related to the Business Combination, in order to reflect our recurring performance.

(d)

Represents the change in unrealized gains/losses related primarily to the interest rate swap.

(e)

Represents add-back of unrealized (gains) / losses on strategic investments.

(f)

Represents Alvarium’s share of joint ventures and associates Adjusted EBITDA.

(g)

Represents adjustment for the affiliate’s profit-share participation in TIG Arbitrage Fund, as the TIG Entities’ controlling shareholders are not entitled to such net income. The entire amount of net income earned from the TIG Arbitrage Fund is included within income in the Company’s statement of operations, of which Class D-1

 

3

  members are entitled to 49.37% of the pre-tax net profits and losses as discussed further in Note 11, “Members’ Capital,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities. The profit-share participation is described in more detail under ”Business of Alvarium Tiedemann—Fund Management Fees.” Subsequent to the Business Combination, the Class D-1 equity interest will not be entitled to a 49.37% distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, and therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

     Nine Months Ended September 30, 2021  
£ and $‘000    GBP UK
GAAP		      GAAP
Bridge		      GBP US
GAAP		      USD US GAAP(1)  

Profit for the financial period before taxes

    £ 3,948      £ 42      £ 3,990      $ 5,526  

Equity settled share-based payments (i)

      1        —          1        1  

Other one-time fees and charges (i)

      2,121        —          2,121        2,937  

Fair value adjustments to strategic investments (i)

      —          —          —          —    
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income before taxes

      6,070        42        6,112        8,464  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income tax expense

      (1,153 )       (3,055 )       (2,442 )       (3,381 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income

      4,917        (3,013 )       3,670        5,083  

Joint ventures - Group share of Adjusted EBITDA (i)

      1,944        (480 )       1,464        2,027  

Associates - Group share of Adjusted EBITDA (ii)

      70        (44 )       27        36  

Interest expense, net

      1,293        —          786        1,088  

Income tax (benefit) / expense

      (613 )       3,055        2,442        3,381  

Adjusted income tax expense less income tax expense (benefit)

      1,766        —          —          —    

Depreciation and amortization

      3,976        903        4,879        6,757  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    £ 13,353      £ 421      £ 13,268      $ 18,372  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

 

(1)

Represents adjustments made to convert Alvarium balances from GBP to USD at a 1.0000 to 1.3849 conversion ratio.

(i)

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alvarium” for footnotes related to Adjusted EBITDA adjustments.

 

4

For the Year Ended December 31, 2021    TWMH      TIG Entities      Alvarium (a)      Total  

Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA

            

Net income before taxes

    $ 4,306      $ 70,006      $ 8,030      $ 82,342  

Equity settled share based payments P&L (b)

      5,532        —          1        5,533  

Transaction expenses (c)

      4,633        2,033        8,898        15,564  

Legal settlement (d)

      —          565        —          565  

Impairment of equity method investment (e)

      2,364        —          —          2,364  

Change in fair value of (gains) / losses on investments (f)

      (2 )       —          —          (2 ) 

Fair value adjustments to strategic investments (g)

      —          (15,444 )       74        (15,370 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined adjusted income before taxes

      16,833        57,160        17,003        90,996  

Adjusted income tax expense

      (1,016 )       (943 )       (4,600 )       (6,559 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted Net Income

      15,817        56,217        12,403        84,437  

Adjustments related to joint ventures and associates (h)

      —          —          3,313        3,313  

Interest expense, net

      398        2,240        2,211        4,849  

Income tax expense

      515        1,457        4,586        6,558  

Adjusted income tax expense (benefit) less income tax expense

      501        (514 )       14        1  

Depreciation and amortization

      2,052        165        2,273        4,490  
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted EBITDA

      19,283        59,565        24,800        103,648  

Affiliate profit-share in TIG Arbitrage (i)

      —          (25,080 )       —          (25,080 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Economic EBITDA

    $ 19,283      $ 34,485      $ 24,800      $ 78,568  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

 

(a)

See Year Ended December 31, 2021 GAAP Bridge table below for an explanation of the conversions of Alvarium’s historical net income to US GAAP and USD.

(b)

Represents add-back of the non-cash expense related to equity-based compensation to its employees.

(c)

Represents adjustment for transaction expenses related to Cartesian’s IPO and the Business Combination, in order to reflect our recurring performance.

(d)

Represents legal fees incurred in connection with a legal action that was settled in July 2021. For further detail on the legal settlement, refer to Note 12, “Legal settlement,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities.

(e)

Represents the adjustment to an other-than-temporary impairment of the Tiedemann Constantia AG equity method investment.

(f)

Represents the change in unrealized gains/losses related primarily to the interest rate swap.

(g)

Represents add-back of unrealized (gains) / losses on strategic investments.

(h)

Represents Alvarium’s share of joint ventures and associates Adjusted EBITDA.

(i)

Represents adjustment for the affiliate’s profit-share participation in TIG Arbitrage Fund, as the TIG Entities’ controlling shareholders are not entitled to such net income. The entire amount of net income earned from the TIG Arbitrage Fund is included within income in the Company’s statement of operations, of which Class D-1 members are entitled to 49.37% of the pre-tax net profits and losses as discussed further in Note 10, “Members’ Capital,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities. The profit-share participation is described in more detail under “Business of Alvarium Tiedemann—Fund Management Fees.” Subsequent to the Business Combination, the Class D-1 equity interest will not be entitled to a 49.37% distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, and therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

5

     Year Ended December 31, 2021  
£ and $‘000    GBP UK
GAAP		      GAAP
Bridge		      GBP US
GAAP		      USD US
GAAP(1)		  

Profit for the financial period before taxes

    £ 1,409      £ 4,428      £ 5,837      $ 8,030  

Equity settled share-based payments (i)

      1        —          1        1  

COVID-19 subsidies (i)

      —          —          —          —    

Other one-time fees and charges (i)

      6,471        310        6,781        8,898  

Fair value adjustments to strategic investments (i)

      54        —          54        74  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income before taxes

      7,935        4,738        12,673        17,003  

Adjusted income tax expense

      526        (3,870 )       (3,344 )       (4,600 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income

      8,461        868        9,329        12,403  

Joint ventures - Group share of reported EBITDA (i)

      3,003        (643 )       2,360        3,247  

Associates - Group share of reported EBITDA (ii)

      116        (68 )       48        66  

Interest expense, net

      1,607        —          1,607        2,211  

Income tax (benefit) / expense

      (536 )       3,870        3,334        4,586  

Adjusted income tax expense less income tax expense (benefit)

      10        —          10        14  

Depreciation and amortization

      6,276        (4,623 )       1,653        2,273  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    £ 18,937      £ (596 )     £ 18,341      $ 24,800  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Represents adjustments made to convert Alvarium balances from GBP to USD at a 1.0000 to 1.3757 conversion ratio.

(i)

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alvarium” for footnotes related to Adjusted EBITDA adjustments.

 

For the Year Ended December 31, 2020    TWMH     TIG Entities     Alvarium (a)     Total  

Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA

         

Net income (loss) before taxes

    $ 7,483     $ 43,306     $ (4,385 )    $ 46,404  

Equity settled share based payments P&L (b)

      1,145       —         9       1,154  

Covid subsidies (c)

      —         —         (976 )      (976 ) 

One-time bonuses (d)

      2,200       —         —         2,200  

Legal settlement (e)

      —         6,313       —         6,313  

Change in fair value of (gains) / losses on investments (f)

      266       —         —         266  

Fair value adjustments to strategic investments (g)

      —         (7,670 )      —         (7,670 ) 

One-time fees and charges (h)

      —         —         181       181  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined adjusted income before taxes

      11,094       41,949       (5,171 )      47,872  

Adjusted income tax expense

      (641 )      (694 )      1,199       (136 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Adjusted Net Income

      10,453       41,255       (3,972 )      47,736  

Adjustments related to joint ventures and associates (i)

      —         —         7,615       7,615  

Interest expense, net

      384       2,363       617       3,364  

Income tax expense / (benefit)

      497       748       (1,050 )      195  

Adjusted income tax expense (benefit) less income tax expense

      144       (54 )      (149 )      (59 ) 

Depreciation and amortization

      1,914       165       2,153       4,232  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Adjusted EBITDA

      13,392       44,477       5,214       63,083  

Affiliate profit-share in TIG Arbitrage (j)

      —         (19,999 )      —         (19,999 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined Economic EBITDA

    $ 13,392     $ 24,478     $ 5,214     $ 43,084  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

 

(a)

See Year Ended December 31, 2020 GAAP Bridge table below for an explanation of the conversions of Alvarium’s historical net income to US GAAP and USD.

 

6

(b)

Represents add-back of the non-cash expense related to equity-based compensation to its employees.

(c)

Represents COVID-19 subsidies received from UK, USA, Hong Kong and Singaporean governments.

(d)

Represents a one-time bonus payment made to certain members in 2020.

(e)

Represents an accrual related to a legal action that was settled in July 2021. For further detail on the legal settlement, refer to Note 12, “Legal settlement,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities.

(f)

Represents the change in unrealized gains/losses related primarily to the interest rate swap.

(g)

Represents add-back of unrealized (gains) / losses on strategic investments.

(h)

Represents other one-time fees and charges that management believes are not representative of the operating performance, which includes costs incurred in negotiating surrender and new lease in London office, professional fees related to this Transaction. One-time fees and charges incurred are included in administrative expenses in the Consolidated Statement of Comprehensive Income.

(i)

Represents Alvarium’s share of joint ventures and associates Adjusted EBITDA.

(j)

Represents adjustment for the affiliate’s profit-share participation in TIG Arbitrage Fund, as the TIG Entities’ controlling shareholders are not entitled to such net income. The entire amount of net income earned from the TIG Arbitrage Fund is included within income in the Company’s statement of operations, of which Class D-1 members are entitled to 49.37% of the pre-tax net profits and losses as discussed further in Note 10, “Members’ Capital,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities. The profit-share participation is described in more detail under ”Business of Alvarium Tiedemann—Fund Management Fees.” Subsequent to the Business Combination, the Class D-1 equity interest will not be entitled to a 49.37% distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

     Year Ended December 31, 2020  
£ and $’000    GBP UK
GAAP		      GAAP
Bridge		      GBP US
GAAP		      USD US
GAAP (1)		  

Profit (loss) for the financial period before taxes

    £ (3,693 )     £ 280      £ (3,413 )     $ (4,385 ) 

Equity settled share-based payments (i)

      7        —          7        9  

COVID-19 subsidies (i)

      (760 )       —          (760 )       (976 ) 

Other one-time fees and charges (i)

      141        —          141        181  

Fair value adjustments to strategic investments (i)

      —          —          —          —    
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income (loss) before taxes

      (4,305 )       280        (4,025 )       (5,171 ) 

Adjusted income tax expense (benefit)

      458        502        960        1,199  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income

      (3,847 )       782        (3,065 )       (3,972 ) 

Joint ventures - Group share of Adjusted EBITDA (i)

      2,022        3,855        5,877        7,551  

Associates - Group share of Adjusted EBITDA (ii)

      124        (74 )       50        64  

Interest expense, net

      481        —          481        617  

Income tax benefit

      (315 )       (502 )       (817 )       (1,050 ) 

Adjusted income tax expense (benefit) less income tax benefit

      (143 )       —          (143 )       (149 ) 

Depreciation and amortization

      6,357        (4,681 )       1,676        2,153  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    £  4,679      £ (620 )     £  4,059      $ 5,214  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Represents adjustments made to convert Alvarium balances from GBP to USD at a 1.0000 to 1.2848 conversion ratio.

(i)

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alvarium” for footnotes related to Adjusted EBITDA adjustments.

 

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For the Year Ended December 31, 2019    TWMH      TIG
Entities		      Alvarium
(a)		      Total  

Combined Adjusted Net Income, Combined Adjusted EBITDA, and Combined Economic EBITDA

            

Net income (loss) before taxes

    $ 7,644      $ 30,449      $ 16,678      $ 54,771  

Equity settled share based payments P&L (b)

      465        —          11        476  

Disposal of investment (c)

      —          (39 )       —          (39 ) 

Change in fair value of (gains)/losses on investments (d)

      (121 )       —          —          (121 ) 

Fair value adjustments to strategic investments (e)

      —          (1,709 )       —          (1,709 ) 

One-time fees and charges (f)

      —          —          213        213  

One-time bonuses (g)

      —          —          2,123        2,123  

Gain on acquisition (h)

      —          —          (12,793 )       (12,793 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined adjusted income before taxes

      7,988        28,701        6,232        42,921  

Adjusted income tax expense

      (426 )       (1,014 )       265        (1,175 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted Net Income

      7,562        27,687        6,497        41,746  

Adjustments related to joint ventures and associates (i)

      —          —          (5,093 )       (5,093 ) 

Interest expense, net

      172        1,534        857        2,563  

Income tax expense / (benefit)

      412        1,084        1,760        3,256  

Adjusted income tax expense (benefit) less income tax expense

      14        (70 )       (2,025 )       (2,081 ) 

Depreciation and amortization

      1,345        164        2,516        4,025  
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Adjusted EBITDA

      9,505        30,399        4,512        44,416  

Affiliate profit-share in TIG Arbitrage (j)

      —          (18,762 )       —          (18,762 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Combined Economic EBITDA

    $ 9,505      $ 11,637      $ 4,512      $ 25,654  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(a)

See Year Ended December 31, 2019 GAAP Bridge table below for an explanation of the conversions of Alvarium’s historical net income to US GAAP and USD.

(b)

Represents add-back of the non-cash expense related to equity-based compensation to its employees.

(c)

Represents adjustment to a disposed investment’s revenue, net of direct costs, in order to reflect our recurring performance.

(d)

Represents the change in unrealized gains/losses related primarily to the interest rate swap.

(e)

Represents add-back of unrealized (gains) / losses on strategic investments.

(f)

Represents other one-time fees and charges that management believes are not representative of the operating performance, which includes costs incurred in negotiating surrender and new lease in London office, and professional fees related to this transaction.

(g)

Represents one-time bonuses paid to partners and staff in lieu of amounts anticipated under employee share scheme, which had not been finalized prior to year-end.

(h)

Represents the removal of the one-time gain recognized on the step acquisition of LXi REIT Advisors Limited and Alvarium Social Housing Advisors Limited.

(i)

Represents Alvarium’s share of joint ventures and associates Adjusted EBITDA.

(j)

Represents adjustment for the affiliate’s profit-share participation in TIG Arbitrage Fund, as the TIG Entities’ controlling shareholders are not entitled to such net income. The entire amount of net income earned from the TIG Arbitrage Fund is included within income in the Company’s statement of operations, of which Class D-1 members are entitled to 49.37% of the net profits and losses as discussed further in Note 11, “Members’ Capital,” of the Notes to the Combined and Consolidated Financial Statements of the TIG Entities. The profit-share participation is described in more detail under ”Business of Alvarium Tiedemann—Fund Management Fees.” Subsequent to the Business Combination, the Class D-1 equity interest will not be entitled to a 49.37% distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

8

  distribution of the results of TIG Arbitrage Fund. The Company has entered into a provisional agreement with the Class D-1 equity interest holder, which would provide the same economic benefits subsequent to the Business Combination as an employee of the TIG Entities. Subsequent to the Business Combination, the Class D-1 equity interest holder will become an employee of the TIG Entities, therefore will no longer receive distributions going forward but will receive compensation as an employee of the TIG Entities.

 

     Year Ended December 31, 2019  
£ and $‘000    GBP UK
GAAP		      GAAP Bridge      GBP US
GAAP		      USD US GAAP (1)  

Profit (loss) for the financial period before taxes

    £ (3,221 )     £ 16,285      £ 13,064      $ 16,678  

Equity settled share-based payments (i)

      9        —          9        11  

COVID-19 subsidies (i)

      —          —          —          —    

Other one-time fees and charges (i)

      336        (169 )       167        213  

One-time bonuses (i)

      1,663        —          1,663        2,123  

Gain on acquisition

      —          (10,021 )       (10,021 )       (12,793 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted income (loss) before taxes

      (1,213 )       6,095        4,882        6,232  

Adjusted income tax expense (benefit)

      (829 )       (868 )       (1,697 )       265  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Income

      (2,042 )       5,227        3,185        6,497  

Joint ventures - Group share of Adjusted EBITDA (i)

      1,963        (6,195 )       (4,232 )       (5,403 ) 

Associates - Group share of Adjusted EBITDA (ii)

      77        166        243        310  

Interest expense, net

      671        —          671        857  

Income tax expense

      511        868        1,379        1,760  

Adjusted income tax expense (benefit) less income tax benefit

      318        —          318        (2,025 ) 

Depreciation and amortization

      5,620        (3,649 )       1,971        2,516  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    £ 7,118        (£3,583 )     £ 3,535      $ 4,512  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Represents adjustments made to convert Alvarium balances from GBP to USD at a 1.0000 to 1.2766 conversion ratio.

(i)

Refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alvarium” for footnotes related to Adjusted EBITDA adjustments.

 

9