Sculptor Capital Management, Inc (NYSE:SCU) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 08:30 am ET

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Sculptor Capital Management, Inc (NYSE:SCU) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, everyone, and welcome to the Sculptor Capital Management's Third Quarter 2019 Earnings Call. [Operator Instructions] I would now like to introduce your host for today's conference, Elise King, Head of Shareholder Services at Sculptor Capital Management.

Executive
Elise King

Thanks, Bonita. Good morning, everyone, and welcome to our call. Joining me are Robert Shafir, our Chief Executive Officer; and Tom Sipp, our Chief Financial Officer. Today's call contains forward-looking statements, many of which are inherently uncertain and outside of our control. Before we get started, I need to remind you that Sculptor Capital's actual results may differ possibly materially from those indicated in these forward-looking statements. Please refer to our most recent SEC filings for a description of the risk factors, including those in our most recent 10-K, that could affect our financial results, our business and other matters related to these statements.

The company does not undertake any obligation to publicly update any forward-looking statements. During today's call, we will be referring to economic income, distributable earnings and other financial measures that are not prepared in accordance with US GAAP. Information about and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release, which is posted on our website. No statements made during this call should be construed as an offer to purchase shares of the company or an interest in any of our funds or any other entities. Our earnings press release from this morning also included an earnings presentation. We will be referring to this report during the call. If you would like to follow along, you can find the presentation on the public Investors page of sculptor.com at the 3Q Press Release link.

Earlier this morning, we reported a third quarter 2019 GAAP net loss of $25 million or $1.20 times per basic and diluted Class A share. As always, you can find a full review of our GAAP results in our earnings release. On an economic income basis, we reported third quarter 2019 distributable earnings of $2.3 million or $0.04 per fully diluted share. In the third quarter, we recorded a legal provision of $19.1 million, which will be -- which we will provide further detail on during the financial update. Adjusted distributable earnings, which excludes the legal provision net of TRA and other payables, were $17.7 million or $0.32 per fully diluted share for the third quarter of 2019. If you have any questions about the information provided in our press release or on our call this morning, please feel free to follow-up with me. With that, let me turn the call over to Rob.

Executive
Robert Shafir

Thanks, Elise, and good morning, everyone. Starting with investment performance, this is a challenging quarter for our funds. Markets continued to react to developments in the US-China trade war and shifting sentiment over global growth as well as sizable movements in interest rates and abrupt factor rotations in equities. Sculptor Master Fund was down 2.8% net for the third quarter but is up