Christopher Marinac: Actually, Rick, you actually hit it right there because that was kind of where I was going. So that clarifies the point. So really don’t be too caught up in that basis point slippage based on that.
Richard Hough: Yes, precisely. Primarily look at discretionary assets under management as the driver of revenue. Of course, the OCIO business, which is basis points, it looks more like the institutional business, and pricing, by the way, is in there, and there’s some influence. But it’s still small compared to the overall enterprise. In fact, the $1.5 billion compared to our discretionary assets of $20.5 billion puts it around 4% or 5%.
Christopher Marinac: Great. Then last question for me just has to do with sort of expenses and hiring. If you have some delayed decision making in general, as you talked about, does that make any impact in the next couple of quarters on hires and just sort of how you spend at the company?
Richard Hough: Yes. I don’t think it affects our decision-making. This is a company that, over 20 years, has been through multiple business environments, including the Global Financial Crisis when — and of course, we were a private company then. It was really hard to manage through. There was a lot to deal with. And my partners and I have been through it. We know what to do. We know how to handle our expenses. We’re not done when it comes to capital allocation or too tight. We’re not going to hurt the business with slowing things down or delaying our decision-making. We just want to be really ourselves. I’m speaking about Silvercrest, really careful about how we deploy our cash. And of course, we’re watching expenses more closely than ever.
But we’re in an enviable position of having a lot of dry powder. We, unlike other folks, are not having to digest a lot of unwieldy acquisitions and need to make expensive operational changes and let alone worry about our debt load. So that money is to invest and create good return on invested capital for our investors. And just as we saw in 2019, when we merged with Cortina, you never know when there’s going to be a great opportunity for that cash. And I alluded to the fact that we have a number of new business opportunities in my opening remarks. And that refers to both the pipeline and kind of a new business I talked about earlier in the question, but it also speaks to hires. I’m having a lot of conversations. It speaks to other ways to advance the business from an investment perspective.
And we’re — if anything, it’s busier for us on that score than it has been in quite some time. Any number of different types of initiatives underway, it’s actually quite busy. So it’s not going to change my decision-making. The slowness in decision-making that I’m seeing really has to do with potential clients, institutions and just a sense of the business environment in general. This includes the feedback at things that we’re hearing from other management teams in their own earnings reports because we are investors, we are in the middle of the market, which is one of the advantages of this firm. And I think that could be prolonged into 2024. I really don’t know. I’m not an economist. I run a good business, and that’s all I’m focused on. On the expense side, we haven’t really made any new hires or changes since I last gave everyone an update.
It has been difficult on the expense side because a lot of vendors and companies have been increasing prices with inflation. And that’s going in one direction, while the stock markets have been going in the other. So that creates a little more stress and management issues than I would like to have, but we’re used to it. We’ve done this before. It’s nothing new. It’s part of being in our business. And as I highlighted, we continue with a very good EBITDA margin covering around 27%. That is not unusual for the business and looks pretty good overall. And I don’t expect that trend to change, barring some dramatic market effect.
Christopher Marinac: Sounds good, Rick. Thanks for all the background this morning. We appreciate it.
Richard Hough: Yeah, you’re very welcome.
Operator: [Operator Instructions] Our next question will come from Chris Sakai with Singular Research. You may now go ahead.
Richard Hough: Good morning, Chris.
Christopher Sakai: Hi. Good morning, Rick. Just I had a question on — you mentioned the M&A environment. Can you comment on — are you seeing any good acquisition targets out there?
Richard Hough: Yes. We always see potential M&A targets. It is kind of just a theme of my job that I’m regularly talking to other executives and companies. What we’re looking for is quite select in the marketplace. I’ve described before that this is a high net worth business. It’s not ultra-high net worth. Our average client is for the size company we are as well above most of our peers and continues to be at anywhere between $35 million and $40 million as an average. Our median is lower. I want to have a good firm with good planning, succession if it can be done. I’d like to at least know how to fix that, that can organically grow post acquisition by Silvercrest. That is not as common as you might think. The high net worth business can be quite slow, growing organically ex-markets witnessed the environment we’re in.
