To Our Shareholders, Clients and Friends

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As we look back at the financial markets in 2019, we are reminded of how important it is to expect the unexpected and invest for the long term. After a mini-meltdown at the end of 2018 related to global trade uncertainty, the equity and fixed-income markets experienced a historic and rapid turnaround in 2019. This rally reflected growing confidence in the strength and durability of the ongoing economic expansion, rewarding investors who stayed the course.

This same concept applies to Glenmede. Despite depressed market levels early in the year, we continued to focus on a broad range of efforts to provide our clients with an exceptional level of service and performance over the long term.

Balancing growth with a “boutique” commitment to clients

At Glenmede, we aim to generate business results that deliver attractive returns for our shareholders and steady growth for our firm. This strategy runs counter to the emerging consensus that asset and wealth managers should pursue rapid growth and scale through consolidation and acquisition. We cannot see how this approach benefits our current or future clients. Our core offering is based on trust, partnership and conflict-free advice and investment performance. None of these propositions becomes easier to deliver by becoming substantially larger. When considering scale, Glenmede is optimally positioned by being large enough to possess a comprehensive set of capabilities and yet small enough to remain a boutique committed to our select and discerning group of clients.

Rising customer satisfaction and referrals

The results of our 2019 private client survey reiterate many of the benefits of our business strategy, with satisfaction levels rising over our past three polls. It is notable and significant that most survey respondents have referred business to us, and almost all who did would do so again. Candid feedback on our strengths and shortcomings, along with a forward-looking approach to industry trends, helps to guide how we invest in our business.

Strategic initiatives and investments

Our investments have focused on building talent, developing innovative investment and advice solutions, leveraging market-leading technology platforms and expanding Glenmede’s geographic reach.

Goals-based investment and wealth planning

A notable evolution of our offering to Private Wealth clients began two years ago, when we introduced our investment and wealth planning report — the Goals-Based Wealth Review. Since then, we have prioritized the integration of our goals-based investment and wealth planning capabilities and, in 2019 alone, completed nearly 500 reviews. For many of our clients, this comprehensive approach to planning has become the primary tool used to guide the purpose, power and potential of their wealth.

Geographic expansion

In early 2019, we celebrated the opening of our first office in Florida, a state where many Glenmede clients live or have homes. Chip Wilson, who formerly served as our Executive Director of Relationship Management, led his team to an excellent first year in serving clients and developing organic growth. We see Florida as an increasingly attractive destination for our clients and prospects, especially given recent tax law changes in other jurisdictions.

Impact and sustainable investing

We continue to prioritize the expansion of our impact and sustainable investing capabilities, following double-digit annual growth in clients and assets under management for the fifth consecutive year in 2019. As with all new disciplines, we have developed an extensive training program that has been particularly engaging for our personnel, especially the next generation of professionals. Our goal is broader than establishing a group of sustainable and impact investing specialists. Rather, we intend to have all of our investment and relationship managers fluent in this area to encourage thoughtful and effective programs for clients interested in this type of investing. Other highlights for the year include Glenmede’s becoming a signatory to the United Nations Principles for Responsible Investment (UNPRI) and the launch of the Global Growth Fund, targeting top-quartile global private investment fund managers who promote sustainable prosperity.

Automation to improve operational efficiency

Technology has been a significant and continued area of focus and investment. Several recent initiatives automate routine and repetitive operational tasks, allowing us to spend more time serving clients. Additionally, we have allocated considerable resources to improving our client portal, which launched in early 2020. The enhancements deliver faster task execution and a more prominent display of important information through a thoughtful visual reorganization. We will launch a mobile version later this year.

Strong financial results

Our financial results were strong in 2019, which is notable considering our substantial investments and negative market conditions in the early part of the year. Net operating income for 2019 was $48 million and exceeded our initial targets. This result came through the combined impact of thoughtful spending, strong organic growth for our Private Wealth and Endowment & Foundation businesses and the full-year impact of financial markets. Following several years of explosive growth in assets under management, Glenmede Investment Management, our institutional product management business, detracted from overall results, experiencing outflows in 2019 consistent with industry trends towards passive management and away from value-oriented investing. Our return on equity (ROE) remained at over 20 percent for the sixth year in a row, and our net operating income (NOI) profit margin was 23 percent. We regard our NOI profit margin as a safety barometer that allows us to maintain stable and consistent operations during inevitable market downturns.

Milestone retirements: Bob Mancuso and Sally Wirts

It is worth noting two important milestones. First, Bob Mancuso stepped down as co- portfolio manager for Small Cap equities at Glenmede after a 23-year tenure. Simply put, Bob developed the process and strategy that we use today, blending a disciplined quantitative framework with a thoughtful approach to fundamental research. Under Bob’s leadership, the strategy grew at an annualized return of 9.2 percent, providing consistent excess returns over its benchmark index. The transition to Bob’s retirement has been well planned, with Chris Colarik, Bob’s co-portfolio manager for the past 18 years, in place and joined by Jordan Irving, who was hired in 2017.

Another notable retirement is that of Sally Wirts, who stepped down in early 2020. After joining Glenmede 38 years ago, Sally started our fixed-income department and more recently has been Chief Administrative Officer for Glenmede Investment Management LP, and President of the Glenmede Mutual Funds, which grew during her tenure from $150 million in 1988 to $10.6 billion in 2019. Sally has been a role model and trailblazer for women in asset management, demonstrating incredible perseverance and strength. Sally has achieved these firsts with a genuine level of grace and warmth. Glenmede is indebted to Sally and Bob for their tremendous contributions to the firm.

New investments in 2020 to maintain extraordinary client service

As we look ahead to the rest of 2020, we will continue our strategic investments, including the anticipated launch of a Delaware-regulated Trust Company, the enhancement of our transatlantic alliance with Stonehage Fleming and an increase in our operational efficiency. While we adapt to continuous change in the markets and technology, our commitment to serving our clients’ best interests with extraordinary care is enduring. We look forward to reporting back to you next year on what we achieved in 2020.