Bridge Investment Group Holdings Inc.

Greetings and welcome to the Bridge Investment Group first quarter 2024 earnings call-in webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Bonnie Rosen, head of shareholder relations for Bridge Investment Group. Thank you. You may begin.

Good morning, everyone. Welcome to the Bridge Investment Group conference call to review our first quarter 2024 financial results. Prepared remarks include comments from our Executive Chairman, Robert Morse, Chief Executive Officer, Jonathan Slager, and Chief Financial Officer, Katie Elsnab. We will hold a Q&A session following the prepared remarks. I'd like to remind you that today's call may include forward-looking statements which are uncertain, outside the firm's control, and may differ materially from actual results. We do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the risk factors section of our Form 10-K. During the call, we will also discuss certain non-GAAP financial metrics. The reconciliation of the non-GAAP metrics are provided in the appendix of our supplemental slides. The supplemental materials are accessible on our IR website at ir.bridgeig.com. These slides can be found under the presentations portion of the site along with the first quarter earnings call event link. They are also available live during the webcast. We reported a gap net loss to the company of approximately $36.8 million for the first quarter of 2024. On a basic and diluted basis, net income attributable to bridge per share of Class A common stock was $0.24 and a net loss of $0.05, respectively, mostly due to changes in non-cash items. Distributable earnings of the operating company were $32.2 million, or 17 cents per share after tax, and our board of directors declared a dividend of 12 cents per share, which will be paid on June 14th to shareholders of record as of May 31st. It is now my pleasure to turn the call over to Bob.

Thank you, Bonnie, and good morning to all. Bridge reported improved financial results for the first quarter of 2024, with distributable earnings increasing 27% from last quarter and fee-related earnings to the operating company increasing 19%. Excluding the impact of prior quarter write-offs, distributable earnings increased 10% and fee-related earnings to the operating company increased 4%. Our FRE base continues to build as we've expanded the number of specialized funds we offer and is composed of mostly long-tenured, closed-end fund revenues. Since IPO, our quarterly FRE has grown at a 12% compound annual growth rate from $24.9 million in 2Q 2021 to $33.9 million as of Q1 2024. Fee-earning AUM has grown at a 29% compound annual growth rate, driven by successful fundraising, including the successively larger funds in our flagship real estate strategies, the launch of new strategies, and the accretive acquisition of Newberry Partners, which now comprises the Bridge Secondaries business. We've achieved this growth through an incredibly volatile real estate environment, which highlights the strengths of our diversified and highly specialized platforms. As a capital light alternative asset manager with high margins and limited ongoing capital needs outside of GP commitments to our funds, our business has produced strong cash flow during an otherwise challenging period for the broader commercial real estate industry. This profitability in our platform is a testament to our resilient, profitable business model. As I will explain further, with a new cycle forming, we believe these positive attributes of our platform are not adequately reflected in our share price today. Our recently published 2024 outlook, Navigating the Curve, outlines our perspective and provides details on why we feel so strongly about investing in the areas where Bridge has developed distinctive competencies. In late 2022 and throughout 2023, as rates increased and the lending environment for real estate worsened, real estate asset prices reset more or less across the board. Although the Fed has kept rates at current elevated levels for the last six meetings, we believe we are close to or at the end of rate increases. The delay in rate reduction has had a modest positive effect as it has actually forced selected real estate asset sellers into the market. at realistic prices. In response to our macro assessment, which candidly is mirrored by many of our industry counterparts and by much of our investor base, we believe 2024 represents an attractive entry point to deploy capital into our specialized strategies. We also believe that Bridges' patience over the last 18 months has been warranted, and with $3.1 billion of dry powder, we have started to lean in to capitalize on selected opportunities. We are optimistic about bridges positioning. We are raising capital globally, leveraging our forward integration into property operations and investing in selective high performing sectors of alternative assets with a middle market focus. Importantly, we continue to invest in our platform, building upon our best in class infrastructure and sales organization with a number of mid and senior level hires over the past year. Additionally, we continue to find new avenues to enhance operating efficiencies, driving lower costs for our LPs in areas such as property insurance and investor reporting. Turning to capital raising, the first quarter was busy, and we believe the dialogue with investors will bear fruit over the course of the year. We raised $153.2 million of capital during the first quarter, primarily in our secondaries and opportunity zone strategies. While the debt strategies vertical did not have a closing in Q1, we anticipate meaningful inflows in Q2. Our CSG team logged over 1,000 meetings and calls in the first quarter with both current and prospective investors. Capital raising has taken us across the Middle East in the UAE, Saudi Arabia, Kuwait, and others, into Japan and Singapore in APAC, up to the Nordics and multiple visits to London and then closer to home to Bermuda and Puerto Rico. Across the U.S., we have already touched over a third of the U.S. states and the District of Columbia and are on pace for our goal of having boots on the ground in almost every state this year. 2024 is meaningfully different than 2023 in terms of which bridge strategies are available to investors. For most of 2023, our capital raising was focused on net lease industrial, AMBS, and solar renewable energy, which are relatively newer strategies with lower targets as we build a following. In 2024, capital raising activities will feature vehicles from what we call our four horsemen, including our debt strategies, workforce and affordable housing, Newberry Partners secondaries, and logistics value-add strategies. Although these strategies will represent the bulk of capital raising focus, we have other attractive vehicles and initiatives to further drive our business in evolution, such as broadening wealth channel efforts. We launched an accredited investor-focused product within our net lease industrial income vertical in Q1 to capitalize on the growing retail investor segment. We are now approved with several major custodians, including Fidelity, Schwab, and Pershing, as well as iCapital. iCapital is a leading platform providing alternative investment access to RIAs and broker dealers that do not have their own alternative investment groups. This is an important first step for the vehicle. We believe the combination of the attractiveness of the industrial sector, along with the yield, capital appreciation, and downside protection attributes of our net lease industrial income strategy will be in demand with this new retail constituency. Building on our success with qualified purchasers on the wealth platforms, this new channel represents an exciting opportunity for Bridge Over Time. We have also enhanced the team of CSG professionals who service the retail industrial distribution channel. We've added retail distribution responsibilities to five members of our team, inclusive of multiple senior leaders, to complement our existing wealth team with more to come in this space in the future. With that, I will turn the call over to Jonathan.