Mount Logan Capital (MLCI) Q3 2024 earnings summary

Executive summary

• Achieved strong organic growth in both asset management and insurance segments, with significant year-over-year increases in fee-related and spread-related earnings.

• Insurance segment SRE reached $10.7M for the trailing twelve months ended September 30, 2024, up from $1.0M year-over-year.

• Announced the 21st consecutive quarterly dividend of $0.02 per share for shareholders of record as of November 22, 2024.

• Entered into an agreement to acquire a minority stake in Runway Growth, a $1.4 billion alternative asset manager, expected to close by year-end.

• Management and insiders made open market share purchases, reflecting confidence in the company's valuation and growth prospects.

Financial highlights

• Asset management segment generated $3.8 million in revenue for Q3 2024, up 20% year-over-year, driven by growth in SOFIX, CLOs, and sub-advisory fees.

• Insurance business revenue was $31.5 million, up $15.7 million from the prior quarter, driven by unrealized gains on the bond portfolio and interest rate swaps.

• Fee-related earnings (FRE) for the trailing 12 months were $7.5 million, up 37% year-over-year.

• Spread-related earnings (SRE) for the trailing 12 months were $10.7 million, up $9.7 million year-over-year.

• Reported a basic and diluted loss per share of $0.68 for Q3 2024, compared to earnings per share of $0.14 in Q2 2024 and $0.62 in Q3 2023, mainly due to non-cash mark-to-market losses and higher insurance finance expenses.

Outlook and guidance

• Management expects continued growth in recurring management fees and insurance segment profitability, supported by organic and inorganic initiatives, including the Runway transaction.

• Anticipates continued asset growth in the insurance segment and ongoing fundraising momentum for interval funds.

• Expects to leverage the Runway Growth acquisition to broaden credit investment expertise and product offerings.

• Focus remains on scaling both asset management and insurance businesses, with emphasis on profitability and integration.