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What changed in Acadian Asset Management Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Acadian Asset Management Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+437 added−483 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Acadian Asset Management Inc.'s 2024 10-K

437 paragraphs added · 483 removed · 387 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe charts below indicate that performance on a revenue-weighted basis relative to benchmark over the last five years have performed ahead of their respective benchmarks on a three-, five- and ten-year basis. 8 Data as of December 31 for the years 2019 to 2023 * Acadian assets representing 11%, 47%, 89%, 88% and 80% of revenue were outperforming benchmarks on a 1- year basis as of December 31, 2019, 2020, 2021, 2022 and 2023, respectively. 9 The chart below indicates performance on a revenue-weighted and equal-weighted basis relative to benchmark, as at December 31, 2023.
Biggest changeThe charts below indicate performance as of December 31, 2024 on a revenue-weighted, equal-weighted, and asset-weighted basis relative to benchmark on a trailing three-, five-, and ten-year basis. Investment Performance* Data as of December 31, 2024 * * As of December 31, 2024, assets representing 91% of revenue were outperforming benchmarks on a 1- year basis.
In particular, we believe we can generate strong returns on allocated capital by, among other things, (i) providing seed capital to fund new products and strategies; (ii) providing investment capital to support strategic growth; and (iii) implementing opportunistic share repurchases.
In particular, we believe we can generate strong returns on allocated capital by, among other things, (i) providing seed capital to fund new products and strategies; (ii) providing investment capital to support strategic growth initiatives; and (iii) implementing opportunistic share repurchases.
Acadian is also subject to the rules and regulations adopted by the Commodity Futures Trading Commission, under the Commodity Exchange Act; and may also be subject to the rules and regulations adopted by the Department of Labor, under ERISA; the Financial Industry Regulatory Authority, Inc., or FINRA; and state regulators.
Acadian LLC is also subject to the rules and regulations adopted by the Commodity Futures Trading Commission, under the Commodity Exchange Act; and may also be subject to the rules and regulations adopted by the Department of Labor, under ERISA; the Financial Industry Regulatory Authority, Inc., or FINRA; and state regulators.
Beyond the investment process infrastructure, we use a number of sophisticated systems to help maximize back-office efficiencies across functions such as operations, accounting, and client reporting. Available Information Our web site is www.bsig.com. Our web site provides information about us, and from time to time we may use it as a distribution channel of material company information.
Beyond the investment process infrastructure, we use a number of sophisticated systems to help maximize back-office efficiencies across functions such as operations, accounting, and client reporting. Available Information Our web site is www.acadian-inc.com. Our web site provides information about us, and from time to time we may use it as a distribution channel of material company information.
Its scientific approach to innovation is driven by research across signal generation, portfolio construction, implementation, and risk management. Research is data-dependent, and Acadian’s process benefits from its objectivity, breadth, and computational power.
Our scientific approach to innovation is driven by research across signal generation, portfolio construction, implementation, and risk management. Research is data-dependent, and our process benefits from its objectivity, breadth, and computational power.
Acadian pursues a fundamentally grounded, data-rich and highly structured approach to investing that seeks to identify and exploit systematic and structural inefficiencies in the markets. Acadian applies a range of investment and risk considerations to a universe of 40,000-plus securities taken from over 150 global markets.
Acadian LLC pursues a fundamentally grounded, data-rich, and highly structured approach to investing that seeks to identify and exploit systematic and structural inefficiencies in the markets. Acadian LLC applies a range of investment and risk considerations to a universe of 65,000-plus securities taken from over 150 global markets.
As Acadian expands distribution efforts into non-U.S. jurisdictions, including other member countries of the European Union, Latin America, the Middle East and Asian countries, Acadian may be required to register with additional foreign regulatory authorities or otherwise comply with non-U.S. rules and regulations that currently are not applicable to our business.
As we expand distribution efforts into non-U.S. jurisdictions, including other member countries of the European Union, Latin America, the Middle East and Asian countries, we may be required to register with additional foreign regulatory authorities or otherwise comply with non-U.S. rules and regulations that currently are not applicable to our business.
The information contained or incorporated on our web site is not a part of this Annual Report on Form 10-K. In addition, the SEC maintains a website that contains reports, proxy statement and other information about issuers, such as BSIG, who file electronically with the SEC. The address of the website is www.sec.gov. 12
The information contained or incorporated on our web site is not a part of this Annual Report on Form 10-K. In addition, the SEC maintains a website that contains reports, proxy statement and other information about issuers, such as AAMI, who file electronically with the SEC. The address of the website is www.sec.gov. 9
Acadian Australia is subject to regulation by the Australian Securities and Investment Commission, or ASIC. Each regulatory body imposes a comprehensive system of regulation on investment advisers and the manner in which we conduct our business in that country. 11 Employees and Human Capital We believe our ability to attract and retain employees is a key to our success.
Acadian LLC Australia is subject to regulation by the Australian Securities and Investment Commission. Each regulatory body imposes a comprehensive system of regulation on investment advisers and the manner in which we conduct our business in that country. Employees and Human Capital We believe our ability to attract and retain employees is a key to our success.
An extensive data repository, continually supplemented by an active alternative scouting effort, provides an extensive source for exploring new investment ideas. Given the size, breadth, and complexity of global equity markets, we believe that such an empirical approach is essential to exploiting behaviorally based mispricings and deliver superior risk-adjusted returns for our clients. Research. Acadian is a research-focused firm.
An extensive data repository, continually supplemented by an active alternative scouting effort, provides an extensive source for exploring new investment ideas. Given the size, breadth, and complexity of global markets, we believe that such an empirical approach is essential to exploiting behaviorally based mispricings and delivering superior risk-adjusted returns for our clients. Research. We are a research-focused firm.
This latter measure, labeled as “equal-weighted,” indicates the opportunity we have to generate sales in a variety of market environments. For instance, strong performance in a newer, smaller product such as small-cap emerging markets may not affect revenue-weighted performance, but it can have a meaningful effect on revenue growth given client demand for this higher fee product.
This latter measure, labeled as “equal-weighted,” indicates the opportunity we have to generate sales in a variety of market environments. For instance, strong performance in a newer, smaller product may not affect revenue-weighted performance, but it can have a meaningful effect on revenue growth given client demand for this higher fee product.
While we market primarily to institutional investors, we participate in the individual investor market through the sub-advisory channel, which represented 12% of our AUM as of December 31, 2023. We also manage assets for mutual funds, and other commingled products including UCITs and Collective Investment Trusts, which gives us exposure to a retail investor base and the defined contribution market.
While we market primarily to institutional investors, we participate in the individual investor market through the sub-advisory channel, which represented 9% of our AUM as of December 31, 2024. We also manage mutual funds and other commingled products including UCITs and Collective Investment Trusts, which gives us exposure to a retail investor base and the defined contribution market.
We compete with these organizations to attract and retain institutional clients and their assets based on the following primary factors: • the investment performance records of Acadian’s strategies; • the breadth of active investment strategies and vehicle options offered by Acadian; • the alignment of Acadian’s investment strategies to the current market conditions and investment preferences and needs of potential clients; • the quality, depth, and reputation of the investment teams that executes Acadian’s strategies; • the continuity of our investment and distribution teams; • the caliber of service we provide our clients; and • Acadian brand recognition and reputation within the investment community 10 Our History and Organizational Structure The predecessor of BSIG was formed in 1980.
We compete with these organizations to attract and retain institutional clients and their assets based on the following primary factors: • the investment performance records of our strategies; • the breadth of active investment strategies and vehicle options that we offer; • the alignment of our investment strategies to the current market conditions and investment preferences and needs of potential clients; • the quality, depth, and reputation of the investment teams that executes our strategies; • the continuity of our investment and distribution teams; • the caliber of service we provide our clients; and • our brand recognition and reputation within the investment community Our History and Organizational Structure The predecessor of AAMI was formed in 1980.
Our institutional marketplace clients are highly diverse across industry segments and geographies and have various growth characteristics. Our institutional distribution channel includes clients from across the globe, including, but not limited to, pension funds, state and local governments; employee benefit plans and foundations and endowments.
Our institutional marketplace clients are highly diverse across industry segments and geographies and have various growth characteristics. Our institutional clients are from across the globe, including, but not limited to, pension funds, state and local governments; sovereign wealth funds, employee benefit plans and foundations and endowments.
Management undertakes detailed business case analyses with respect to all growth opportunities, and only considers those that yield an acceptable return while operating within the parameters of our risk appetite. For the period January 1, 2019 to December 31, 2023, we repurchased approximately 63% of our shares.
Management undertakes detailed business case analyses with respect to all growth opportunities, and only considers those that yield an acceptable return while operating within the parameters of our risk appetite. For the period January 1, 2020 to December 31, 2024, we repurchased approximately 59% of our shares.
Acadian may also be registered from time to time in jurisdictions outside of the U.S. and will be subject to applicable regulation in those jurisdictions. Acadian is also subject to regulation relating to the offer and sale of financial products in each of the European Union countries in which Acadian operates.
Acadian LLC and its subsidiaries may also be registered from time to time in jurisdictions outside of the U.S. and will be subject to applicable regulation in those jurisdictions. Acadian LLC is also subject to regulation relating to the offer and sale of financial products in each of the European Union countries in which Acadian LLC and its subsidiaries operate.
Within this channel, we have strong relationships in the public/government pension market (42% of our AUM as of December 31, 2023) and the corporate plan market (12% of our AUM as of December 31, 2023), which comprise a substantial portion of the institutional investment market overall, particularly in the U.S.
Within this channel, we have strong relationships in the public/government pension market (43% of our AUM as of December 31, 2024) and the corporate plan market (13% of our AUM as of December 31, 2024), which comprise a substantial portion of the institutional investment market overall, particularly in the U.S.
As of December 31, 2023, our top five client relationships represented approximately 14% of total run rate gross management fee revenue, and our top 25 clients represented approximately 38% of run rate gross management fee revenue. The below graphic shows the breakdown of our assets under management as of December 31, 2023 by client type and location.
As of December 31, 2024, our top five client relationships represented approximately 13% of total run rate gross management fee revenue, and our top 25 clients represented approximately 35% of run rate gross management fee revenue. The below graphic shows the breakdown of our assets under management as of December 31, 2024 by client type and client location.
This experience affords us a broad perspective and data history. Guided by the economic intuition and insights of a talented, experienced, and diverse investment team, Acadian has been at the forefront of systematic research, signal development, and portfolio construction for 37 years. Objectivity. Acadian uses a disciplined and objective process, underpinned by rich data and powerful technological tools.
This experience affords us a broad perspective and data history. Guided by the economic intuition and insights of a talented, experienced, and diverse investment team, we have been at the forefront of systematic research, signal development, and portfolio construction for nearly 40 years. Objectivity. We use a disciplined and objective process, underpinned by rich data and powerful technological tools.
The ownership structure of Acadian provides incentives for growth and prudent business management across multiple generations of Acadian partners, who retain meaningful levels of equity in their own business to preserve strong alignment of interests between us, Acadian, their clients and our shareholders. Acadian comprises our Quant & Solutions reportable segment.
The ownership structure of Acadian LLC provides incentives for growth and prudent business management across multiple generations of Acadian LLC partners, who retain meaningful levels of equity in their own business to preserve strong alignment of interests between us, Acadian LLC, their clients, and our stockholders.
The fees we charge on separate accounts vary by client, investment strategy and the size of the account. • Commingled Vehicle : We also offer access to a number of our strategies through Acadian-branded commingled vehicles both within and outside the U.S.
The fees we charge on separate accounts vary by client, investment strategy and the size of the account. • Funds : We also offer access to our strategies through commingled funds both within and outside the U.S.
Our investment process is systematically driven and is supported by a sophisticated systems environment. A key tenet of our investment philosophy is that it is crucial to examine as much relevant information about as many companies as possible. Our systems allow us to evaluate a broad array of investment opportunities on a daily basis.
A key tenet of our investment philosophy is that it is crucial to examine as much relevant information about as many companies as possible. Our systems allow us to evaluate a broad array of investment opportunities on a daily basis.
Through wholly owned affiliates, Acadian is also subject to the regulatory environments of the non-U.S. jurisdictions in which Acadian operates. Acadian’s U.K. affiliate is subject to regulation by the Financial Conduct Authority, or FCA. Acadian’s Singapore affiliate is subject to regulation by the Monetary Authority of Singapore, or MAS.
Through wholly owned subsidiaries, Acadian LLC is also subject to the regulatory environments of the non-U.S. jurisdictions in which Acadian LLC operates. Acadian LLC’s U.K. subsidiary is subject to regulation by the Financial Conduct Authority, or FCA. Acadian LLC’s Singapore subsidiary is subject to regulation by the Monetary Authority of Singapore.
Distribution Model and Client Base Our distribution is focused on the institutional and sub-advisory channels. The institutional channel accounts for approximately 79% of our AUM.
Distribution and Client Base Our distribution is focused on the institutional, sub-advisory, and other channels. The institutional channel accounts for over 80% of our AUM.
Investors that do not meet our minimum account size for a separate account, or who otherwise prefer to invest through a fund, can invest in our pooled funds. The goal of our marketing, distribution and client service efforts is to grow and maintain a client base that is diversified by investment strategy, investment vehicle, distribution channel, and geographic region.
Investors that do not meet our minimum account size for a separate account, or who otherwise prefer to invest through a fund, can invest in our pooled funds. The goal of our marketing, distribution and client service efforts is to grow and maintain a diversified client base. We focus our distribution and marketing efforts on sophisticated investors and asset allocators.
We focus our distribution and marketing efforts on sophisticated investors and asset allocators. Our client service and distribution teams comprise knowledgeable, seasoned professionals, experienced in working across the investment spectrum of investors. 6 Our client base is diverse without significant concentration.
Our client service and distribution teams comprise knowledgeable, seasoned professionals, experienced in working across the investment spectrum of investors. 3 Our client base is diverse without significant concentration.
The firm’s clients were domiciled in approximately 20 countries across Asia, Australia, Europe and North America as of December 31, 2023. The firm has over 100 investment and research professionals and manages approximately 70 distinct investment products and strategies. Competitive Strengths Experience. As a pioneer in systematic investing, Acadian has been managing systematic equity portfolios since the 1980s.
The firm’s clients were domiciled in approximately 40 countries across the globe as of December 31, 2024. The firm has over 120 investment and research professionals and manages numerous investment products and strategies. Competitive Strengths Experience. As a pioneer in systematic investing, we have been managing systematic equity portfolios since the 1980s.
We recognize that markets are dynamic and that a robust culture of investment research is essential to maintaining a competitive edge. 5 Capital Management Our asset management business generates significant, recurring free cash flow that can be accessed to create value for our shareholders.
We recognize that markets are dynamic and that a robust culture of investment research is essential to maintaining a competitive edge. 2 Capital Management Our business generates significant, recurring free cash flow that can be used to return capital to stockholders through share repurchases and dividends, repay outstanding debt, and more broadly create value for our stockholders.
Acadian is also subject to regulation in the U.S. through its primary regulator, the SEC, under the Investment Advisers Act of 1940, as amended. To the extent Acadian acts as investment adviser or sub-adviser to registered investment companies, it must also comply with the terms of the Investment Company Act of 1940, as amended and the rules thereunder.
To the extent Acadian LLC acts as investment adviser or sub-adviser to registered investment companies, it must also comply with the terms of the Investment Company Act of 1940, as amended and the rules thereunder.
We believe our offerings are well-positioned in areas of investor demand and the diversity of investment style and asset class can enable us to participate in growing segments of the industry, through a range of investing environments. 7 Investment Performance Our mission is to produce risk-adjusted performance, or alpha, for our clients.
These offerings are designed to provide a balanced earnings stream to our business. We believe our offerings are well-positioned in areas of investor demand and the diversity of investment style and asset class can enable us to participate in growing segments of the industry, through a range of investing environments.
Our profit-sharing model enables us to participate directly in margin expansion as Acadian grows. Acadian Acadian, founded in 1986, is a leading systematic investment manager of active global, international equity, and alternative strategies with approximately $104 billion in AUM as of December 31, 2023.
Our profit-sharing model enables us to participate directly in margin expansion as Acadian LLC grows. Acadian LLC comprises our Quant & Solutions reportable segment. Acadian LLC Acadian LLC, founded in 1986, is a leading systematic investment manager with approximately $117 billion in AUM as of December 31, 2024.
Acadian manages strategies in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, systematic macro, equity alternatives, and credit strategies. Acadian invests on behalf of a wide range of institutional clients across the globe, including public and private funds, endowments and foundations, and retail clients through sub-advisory channels.
Acadian LLC manages strategies in developed and developing markets, including global, emerging market, international, and small cap equities, as well as credit and alternative strategies. Acadian LLC predominantly invests on behalf of a wide range of institutional clients across the globe, including public and private funds, endowments and foundations.
As of December 31, 2023, we had 387 full-time equivalent employees, of which 21 were employees of BrightSphere Investment Group Inc. and 366 were employees of Acadian. None of these employees are represented by any collective bargaining agreements. Operations, Systems and Technology Our advanced technological capabilities are one of our core strengths.
As of December 31, 2024, we had 383 full-time equivalent employees, of which 20 are at Hold Co. None of these employees are represented by any collective bargaining agreements. 8 Operations, Systems and Technology Our advanced technological capabilities are one of our core strengths. Our investment process is systematically driven and is supported by a sophisticated systems environment.
Total AUM: $103.7 bn Data as of December 31, 2023 Products and Investment Performance Product Mix We offer leading strategies in global, international, U.S. and emerging markets equities, in addition to credit, and alternative investments. The chart below presents our wide range of offerings. These areas have the potential to provide a balanced earnings stream to our business.
Total AUM: $117.3 bn Data as of December 31, 2024 Products and Investment Performance Product Mix We offer leading strategies in developed and developing markets, including global, emerging market, international, and small cap equities, as well as credit and alternative strategies. The chart below presents our wide range of offerings.
The common stock of BrightSphere Investment Group Inc. began trading on July 15, 2019, and our trading symbol on the NYSE remained unchanged as “BSIG.” Regulation We are subject to U.S. federal securities laws, state securities and corporate laws, and the rules and regulations of U.S. regulatory and self-regulatory organizations.
Effective as of January 1, 2025, we changed our name from BrightSphere Investment Group Inc. to Acadian Asset Management Inc. 7 Regulation We are subject to U.S. federal securities laws, state securities and corporate laws, and the rules and regulations of U.S. regulatory and self-regulatory organizations.
Some of these firms offer other products and services—in particular investment strategies such as passively managed products, including exchange traded funds, that typically carry lower fee rates. Additionally, there are limited barriers to entry for new investment managers.
Many of the organizations we compete with offer investment strategies similar to those offered by us, and these organizations may have greater financial resources and distribution capabilities than we offer. Some of these firms offer other products and services—in particular investment strategies such as passively managed products, including exchange traded funds, that typically carry lower fee rates.
We were incorporated on May 29, 2014 as a private limited company under the laws of England and Wales. At the time of our initial public offering of our ordinary shares in 2014, we changed our name to OM Asset Management plc.
We were incorporated on May 29, 2014 as a private limited company under the laws of England and Wales and completed a redomestication process to become a Delaware corporation on July 15, 2019.
We compete globally with international and domestic investment management firms, hedge funds, and other subsidiaries of financial institutions for institutional assets. Many of the organizations we compete with offer investment strategies similar to those offered by Acadian, and these organizations may have greater financial resources and distribution capabilities than we offer.
In order to be successful and grow our business, we must be able to compete effectively for AUM. We compete globally with international and domestic investment management firms, hedge funds, and other subsidiaries of financial institutions for institutional assets.
We operate our differentiated investment management business through our majority owned subsidiary, Acadian Asset Management LLC (“Acadian”), a leading systematic manager of active global, international equity and alternative strategies.
Item 1. Business. Overview We are a holding company that operates a systematic investment management business through our majority owned subsidiary, Acadian Asset Management LLC (“Acadian LLC”).
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Item 1. Business. Overview We are a global, diversified asset management company with approximately $104 billion of assets under management as of December 31, 2023. We provide investment management services globally, predominantly to institutional investors.
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With approximately $117 billion of assets under management as of December 31, 2024, Acadian LLC offers institutional investors across the globe access to a diversified array of systematic investment strategies designed to meet a range of risk and return objectives.
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We have generated strong, recurring free cash flow to our business that we can use for growth initiatives, return to shareholders through dividends and stock repurchases and to repay outstanding debt obligations. Our revenue consists largely of recurring management fees on assets under management and is not heavily dependent upon performance fees.
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Our product initiatives to drive growth include enhanced equity, equity extensions, systematic credit, and equity alternatives. Enhanced strategies offer attractive risk-adjusted returns with comparatively lower active risk relative to standard active offerings.
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We have competitive near- and long-term alpha performance records and are well-positioned for continued growth.
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Extension portfolios are a form of high conviction investing which leverage both long and short positions to increase active views, such as 130/30 products. 4 Investment Performance Our mission is to produce strong risk-adjusted returns for our clients. We have competitive near- and long-term track records and are well-positioned for continued growth.
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In addition, we have indicated the percentage of our assets beating their benchmarks over the same time periods. While we believe the first two methodologies provide better insight into our performance trends, we have also included AUM-weighted performance, as this is a more standard industry performance metric.
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We also present our performance by showing the percentage of our assets beating their benchmarks over the same time periods. The charts below reflect performance versus benchmark on a revenue-weighted basis on a trailing three-, five-, and ten-year basis over each of the last five years.
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Quant & Solutions Investment Performance* Data as of December 31, 2023 * * As of December 31, 2023, Acadian assets representing 80% of revenue were outperforming benchmarks on a 1- year basis. Competition We face competition from many segments in the asset management industry. We compete with other investment management firms, including investment management holding companies, insurance companies, and banks.
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Our long-term performance has been strong and has improved since 2020, which was negatively impacted by the global equity market environment during the pandemic. 5 Data as of December 31 for the years 2020 to 2024 * Assets representing 11%, 47%, 89%, 88% and 91% of revenue were outperforming benchmarks on a 1- year basis as of December 31, 2020, 2021, 2022, 2023 and 2024, respectively.
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On March 2, 2018, we announced the change of our name to BrightSphere Investment Group plc and on March 26, 2018, our ticker symbol changed to “BSIG.” On July 12, 2019, we completed a redomestication process to change from a company incorporated under the laws of England and Wales to a Delaware corporation.
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Figures calculated using gross of fee strategy composite returns. Past performance is no guarantee of 6 future results. This is not investment advice and may not be construed as sales or marketing material for any financial product or service sponsored or provided by Acadian LLC. Competition The industry in which we operate is highly competitive.
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Additionally, there are limited barriers to entry for new investment managers.
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Acadian LLC (including its subsidiaries) is also subject to regulation in the U.S. through its primary regulator, the SEC, under the Investment Advisers Act of 1940, as amended.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the performance or assessment of our systematic investment strategies is seen as underperforming relative to peers, it could, among other things, result in an increase in the withdrawal of assets by existing clients and investors in mutual funds and private funds we advise or sub-advise, the termination of us as a sub-adviser to a mutual fund and the inability to attract additional investments from existing and new clients or investors.
Biggest changeThese assessments often influence the investment decisions of our clients and investors in funds we advise or sub-advise. If the performance or assessment of our investment strategies is seen as underperforming relative to peers, it could, among other things, result in an increase in the withdrawal of assets by existing clients and investors and the inability to attract additional investments.
Among the factors that may affect our stock price are the following: • public health emergencies; • speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, 28 ability to maximize shareholder returns or plans to engage in strategic transactions by us or others in our industry; • the announcement of mergers, acquisitions, dispositions or new products or services by us or others in our industry; • announcements of our financial results, including changes in net client cash flows and assets under management, changes in earnings estimates by the investment community, and variations between estimated financial results and actual financial results; and • the pricing structure for products offered by us or our competitors.
Among the factors that may affect our stock price are the following: • public health emergencies; • speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, ability to maximize shareholder returns or plans to engage in strategic transactions by us or others in our industry; • the announcement of mergers, acquisitions, dispositions or new products or services by us or others in our industry; • announcements of our financial results, including changes in net client cash flows and assets under management, changes in earnings estimates by the investment community, and variations between estimated financial results and actual financial results; and • the pricing structure for products offered by us or our competitors.
However, our ability to make such distributions will be subject to our operating results, which are impacted by the ability of Acadian to make distributions to us, cash requirements and financial condition, the applicable provisions of Delaware law that may limit the amount of funds available for distribution, our compliance with covenants and financial ratios related to existing or future indebtedness, including under our notes and our credit facilities, and our other agreements with third parties.
However, our ability to make such distributions will be subject to our operating results, which are impacted by the ability of Acadian LLC to make distributions to us, cash requirements and financial condition, the applicable provisions of Delaware law that may limit the amount of funds available for distribution, our compliance with covenants and financial ratios related to existing or future indebtedness, including under our notes and our credit facilities, and our other agreements with third parties.
If an assignment of an investment advisory or sub-advisory agreement is deemed to occur, and clients do not consent to the assignment or, with respect to investment company clients, enter into a new agreement with Acadian, which may require the approval of the investment company’s stockholders in addition to its board of directors or trustees, our results of operations could be materially and adversely affected.
If an assignment of an investment advisory or sub-advisory agreement is deemed to occur, and clients do not consent to the assignment or, with respect to investment company clients, enter into a new agreement with Acadian LLC, which may require the approval of the investment company’s stockholders in addition to its board of directors or trustees, our results of operations could be materially and adversely affected.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws or Trade Control Laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our internal operations might be subject or the manner in which existing laws might be administered or interpreted.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws or Trade Control Laws. In addition, we cannot predict the nature, scope or effect of future regulatory 19 requirements to which our internal operations might be subject or the manner in which existing laws might be administered or interpreted.
Some competitors may operate in a different regulatory environment than we do, which may give them certain competitive advantages in the investment products and portfolio structures that they offer. 24 Furthermore, the development and use of various technologies based on machine learning and artificial intelligence is expanding rapidly in our industry.
Some competitors may operate in a different regulatory environment than we do, which may give them certain competitive advantages in the investment products and portfolio structures that they offer. Furthermore, the development and use of various technologies based on machine learning and artificial intelligence is expanding rapidly in our industry.
In addition, the investment advisory agreements and sub-advisory agreements with respect to registered investment companies generally may be terminated by the registered investment company or, in those instances where Acadian serves as a sub-adviser, the registered investment company’s adviser, without penalty, upon 60 days’ notice and are subject to annual approval by the registered investment company’s board of directors or trustees.
In addition, the investment advisory agreements and sub-advisory agreements with respect to registered investment companies generally may be terminated by the registered investment company or, in those instances where Acadian LLC serves as a sub-adviser, the registered investment company’s adviser, without penalty, upon 60 days’ notice and are subject to annual approval by the registered investment company’s board of directors or trustees.
To the extent that we do not anticipate or effectively mitigate these risks through policies, controls and procedures, and systems, there could be a material adverse effect on our financial condition and results of operations. 18 We may be exposed to potential liability as a general partner or a controlling person.
To the extent that we do not anticipate or effectively mitigate these risks through policies, controls and procedures, and systems, there could be a material adverse effect on our financial condition and results of operations. We may be exposed to potential liability as a general partner or a controlling person.
Consequently, if under such circumstances Acadian incurs liabilities or expenses that exceed its ability to pay, we may be directly or indirectly liable for its payment to the extent provided in the governing documents of the limited liability company, partnership or investment vehicle or under applicable law.
Consequently, if under such circumstances Acadian LLC incurs liabilities or expenses that exceed its ability to pay, we may be directly or indirectly liable for its payment to the extent provided in the governing documents of the limited liability company, partnership or investment vehicle or under applicable law.
Risks Related to Operations Our overall financial results are dependent on the ability of Acadian to generate earnings. Substantially all of our revenue generation is dependent on Acadian, who receives the majority of their fees based on the values of assets under management. Substantially all of our cash flows consist of distributions received from Acadian.
Risks Related to Operations Our overall financial results are dependent on the ability of Acadian LLC to generate earnings. Substantially all of our revenue generation is dependent on Acadian LLC, who receives the majority of their fees based on the values of assets under management. Substantially all of our cash flows consist of distributions received from Acadian LLC.
Acadian is subject to extensive regulation in the U.S. through its primary regulator, the SEC, under the Advisers Act. To the extent Acadian acts as investment adviser or sub-adviser to registered investment companies, it must also comply with the terms of the Investment Company Act and the rules thereunder.
Acadian LLC is subject to extensive regulation in the U.S. through its primary regulator, the SEC, under the Advisers Act. To the extent Acadian LLC acts as investment adviser or sub-adviser to registered investment companies, it must also comply with the terms of the Investment Company Act and the rules thereunder.
If anyone acquires, or is deemed to have acquired, a controlling block of our voting securities in the future, the contractual anti-assignment and termination provisions of the investment advisory and sub-advisory agreements between Acadian and its clients may be implicated.
If anyone acquires, or is deemed to have acquired, a controlling block of our voting securities in the future, the contractual anti-assignment and termination provisions of the investment advisory and sub-advisory agreements between Acadian LLC and its clients may be implicated.
This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents.
This choice of forum provision may limit our stockholders’ ability to bring a claim in a 22 judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents.
In addition we may be deemed to be a control person of Acadian as that term is defined in various U.S. federal and state statutes and, as such, potentially liable for the acts of Acadian or its employees.
In addition we may be deemed to be a control person of Acadian LLC as that term is defined in various U.S. federal and state statutes and, as such, potentially liable for the acts of Acadian LLC or its employees.
Net flows related to our systematic investment strategies can be affected by investment performance relative to other competing investment strategies or to established benchmarks. Investment management strategies may be rated, ranked or assessed by independent third parties, distribution partners, and industry periodicals and services.
Net flows related to our investment strategies can be affected by investment performance relative to other competing investment strategies or to established benchmarks. Investment management strategies may be rated, ranked or assessed by independent third parties, distribution partners, and industry periodicals and services.
The agreements generally provide for fees to be paid on the basis of the value of assets under management, although a portion also provide for performance-based fees to be paid on the basis of investment performance against stated benchmarks. Acadian is a U.S. registered investment adviser.
The agreements generally provide for fees to be paid on the basis of the value of assets under management, although a portion also provide for performance-based fees to be paid on the basis of investment performance against stated benchmarks. Acadian LLC is a U.S. registered investment adviser.
Acadian may also be subject to the rules and regulations adopted by the Commodity Futures Trading Commission, under the Commodity Exchange Act; by the Department of Labor, under ERISA; the Financial Industry Regulatory Authority, Inc., or FINRA; and state regulators.
Acadian LLC may also be subject to the rules and regulations adopted by the Commodity Futures Trading Commission, under the Commodity Exchange Act; by the Department of Labor, under ERISA; the Financial Industry Regulatory Authority, Inc., or FINRA; and state regulators.
Assignment, as generally defined, includes direct assignments as well as assignments that may be deemed to occur, under certain circumstances, upon the direct or indirect transfer of a “controlling block” of the voting securities of Acadian.
Assignment, as generally defined, includes direct assignments as well as assignments that may be deemed to occur, under certain circumstances, upon the direct or indirect transfer of a “controlling block” of the voting securities of Acadian LLC.
Acadian may also be retained by U.S. registered investment advisers to certain U.S. registered investment companies to provide investment sub-advisory services to U.S. registered investment companies pursuant to the terms of an investment sub-advisory agreement between Acadian and the relevant U.S. registered investment adviser.
Acadian LLC may also be retained by U.S. registered investment advisers to certain U.S. registered investment companies to provide investment sub-advisory services to U.S. registered investment companies pursuant to the terms of an investment sub-advisory agreement between Acadian LLC and the relevant U.S. registered investment adviser.
Moreover, if at any time we are not able to comply with the requirements of Section 404 in a timely manner, or if we identify material weaknesses or other deficiencies in our internal control over financial reporting, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, which would require additional financial and management resources. 30
Moreover, if at any time we are not able to comply with the requirements of Section 404 in a timely manner, or if we identify material weaknesses or other deficiencies in our internal control over financial reporting, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, which would require additional financial and management resources. 25
A transaction is not deemed an assignment under the Advisers Act or the Investment Company Act, however, if it does not result in a change of actual control or management of Acadian.
A transaction is not deemed an assignment under the Advisers Act or the Investment Company Act, however, if it does not result in a change of actual control or management of Acadian LLC.
In addition, we are dependent upon the ability of Acadian to generate earnings and cash flows and distribute them to us so that we may pay dividends to our stockholders.
In addition, we are dependent upon the ability of Acadian LLC to generate earnings and cash flows and distribute them to us so that we may pay dividends to our stockholders.
As required by the Investment Company Act of 1940, or the Investment Company Act, investment advisory agreements and sub-advisory agreements between Acadian and investment company clients and/or the investment advisers to those investment companies terminate upon their assignment.
As required by the Investment Company Act of 1940, or the Investment Company Act, investment advisory agreements and sub-advisory agreements between Acadian LLC and investment company clients and/or the investment advisers to those investment companies terminate upon their assignment.
From time to time, we may have to engage in litigation to attempt to achieve the results reflected in our estimates, which may be time-consuming and expensive and may have other adverse impacts.
From time to time, we may have to engage in litigation to attempt to achieve the results reflected in our estimates, which may be 23 time-consuming and expensive and may have other adverse impacts.
Acadian may provide investment advisory services to investment companies registered under the Investment Company Act pursuant to the terms of an investment advisory agreement between Acadian and the applicable U.S. registered investment company.
Acadian LLC may provide investment advisory services to investment companies registered under the Investment Company Act pursuant to the terms of an investment advisory agreement between Acadian LLC and the applicable U.S. registered investment company.
Acadian may serve as general partner, managing member or their equivalents for investment products that are organized as partnerships or other commingled vehicles.
Acadian LLC may serve as general partner, managing member or their equivalents for investment products that are organized as partnerships or other commingled vehicles.
A relatively small change in the relative performance of one of our largest strategies, such as Acadian’s Emerging Markets Equity, could have a significant impact on the asset-weighted performance of our assets under management. Such volatility could adversely affect our results of operations and investors’ perception of us.
A relatively small change in the relative performance of one of our largest strategies, such as Acadian Emerging Markets Equity, could have a significant impact on the asset-weighted performance of our assets under management. Such volatility could adversely affect our results of operations and investors’ perception of us.
A decrease in revenues resulting from termination of an investment advisory agreement or sub-advisory agreement for any reason could have a material adverse effect on our revenue and profits and a negative effect on our results of operations. 16 Pursuant to the Advisers Act, investment advisory agreements between Acadian, who is a U.S. registered investment advisers and their clients are not assignable without the consent of the client.
A decrease in revenues resulting from termination of an investment advisory agreement or sub-advisory agreement for any reason could have a material adverse effect on our revenue and profits and a negative effect on our results of operations. 13 Pursuant to the Advisers Act, investment advisory agreements between Acadian LLC, who is a U.S. registered investment advisers and their clients are not assignable without the consent of the client.
To the extent that our revenues associated with such products and/or capabilities do not increase as much as our related expenses, our profitability could be adversely affected. Our outstanding indebtedness may impact our business and may restrict our growth and results of operations. As of December 31, 2023, we had $275 million of long-term bonds outstanding.
To the extent that our revenues associated with such products and/or capabilities do not increase as much as our related expenses, our profitability could be adversely affected. Our outstanding indebtedness may impact our business and may restrict our growth and results of operations. As of December 31, 2024, we had $275.0 million of long-term bonds outstanding.
The performance of our systematic investment strategies, which can be impacted by factors within and/or outside our control, including general market and economic conditions, is critical to retaining existing client assets and investors, including in mutual funds and private funds we advise or sub-advise, and attracting new client and investor assets.
The performance of our investment strategies, which can be impacted by factors within and/or outside our control, including general market and economic conditions, is critical to retaining existing client assets and investors, including in funds we advise or sub-advise, and attracting new client and investor assets.
Brexit may result in significant market dislocation, heightened counterparty risk, an adverse effect on the management of market risk and, in particular, asset and liability management due in part to redenomination of financial assets and liabilities, an adverse effect on our ability to manage, operate and invest, and increased legal, regulatory or compliance burden for us, each of which may have a negative impact on our operations, financial condition, returns or prospects.
Brexit also may result in significant market dislocation, heightened counterparty risk and an adverse effect on the management of market risk, particularly asset and liability management due in part to redenomination of financial assets and liabilities, an adverse effect on our ability to manage, operate and invest and increased legal, regulatory or compliance burden for us, each of which could have a negative impact on our operations, investments, financial condition, returns or prospects.
Total run rate gross management fee revenue reflects the sum for each account at Acadian, of the product of (a) assets under management in each account at December 31, 2023, multiplied by (b) the relevant management fee rate on that account.
Total run rate gross management fee revenue reflects the sum for each account at Acadian LLC, of the product of (a) assets under management in each account at December 31, 2024, multiplied by (b) the relevant management fee rate on that account.
Additionally, one or more of the jurisdictions in which we operate may require our stockholders to seek the approval of, or provide notice to, an applicable regulator before acquiring a substantial amount of our outstanding shares. 25 Developments in the regulatory environment in the U.S. may include heightened and additional examinations and inspections by regulators and the imposition of additional reporting and disclosure obligations.
Additionally, one or more of the jurisdictions in which we operate may require our stockholders to seek the approval of, or provide notice to, an applicable regulator before acquiring a substantial amount of our outstanding shares. Developments in applicable regulatory environments may include heightened and additional examinations and inspections by regulators and the imposition of additional reporting and disclosure obligations.
We rely heavily upon the services of certain key investment and management personnel. The loss of key investment and management personnel for any reason could have an adverse impact upon our business, results of operations and financial condition. Any of our key investment or management personnel could resign at any time, join a competitor or form a competing company.
The loss of key investment and management personnel for any reason could have an adverse impact upon our business, results of operations and financial condition. Any of our key investment or management personnel could resign at any time, join a competitor or form a competing company.
Risks Related to Our Ownership Structure and Governance Paulson has meaningful ability to influence our business. As of February 14, 2024, Paulson & Co. Inc. (“Paulson”) owns 23.11% of our common stock.
Risks Related to Our Ownership Structure and Governance Paulson has meaningful ability to influence our business. As of February 14, 2025, Paulson & Co. Inc. (“Paulson”) owns 23.9% of our common stock.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations. 22 The failure of a counterparty to meet its obligations could affect our business adversely.
Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.
Likewise, any investigation of any potential violations of anti-corruption laws or Trade Control Laws by U.K., U.S. or other authorities could also have an adverse impact on our reputation, business, results of operations and financial condition. The U.K. exit from the EU (“Brexit”) could adversely impact our business.
Likewise, any investigation of any potential violations of anti-corruption laws or Trade Control Laws by U.K., U.S. or other authorities could also have an adverse impact on our reputation, business, results of operations and financial condition. The U.K. exit from the EU (“Brexit”) could adversely impact our business. Beginning January 1, 2021, EU laws ceased to apply in the U.K.
We rely on certain key personnel, and our results are dependent upon our ability to retain and attract key personnel. We depend on the skills and expertise of our key investment and management personnel, and our success and growth depends on our ability to attract and retain key personnel.
We depend on the skills and expertise of our key investment and management personnel, and our success and growth depends on our ability to attract and retain key personnel. We rely heavily upon the services of certain key investment and management personnel.
The investment management industry is highly competitive, with competition based on a variety of factors, including investment performance, investment management fee rates, continuity of investment professionals and client relationships, the quality of services provided to clients, reputation and the strategies offered.
Risks Related to Our Industry We operate in a competitive environment. The investment management industry is highly competitive, with competition based on a variety of factors, including investment performance, investment management fee rates, continuity of investment professionals and client relationships, the quality of services provided to clients, reputation and the strategies offered.
Losses on our seed capital could adversely impact our results of operations or financial condition. As of December 31, 2023, we had approximately $41 million committed to seed capital, which is currently invested in five products.
Losses on our seed capital could adversely impact our results of operations or financial condition. 15 As of December 31, 2024, we had approximately $90 million committed to seed capital, which is currently invested in seven products.
In addition, in the event current or future Affiliates have or develop a focus on strategies that generate lower fees, a decrease in revenues may result. A decrease in revenues without a reduction in expenses will result in reduced net income. Changes in how clients choose to access asset management services may also exert downward pressure on fees.
In addition, in the event Acadian LLC has or develops a focus on strategies that generate lower fees, a decrease in revenues may result. A decrease in revenues without a reduction in expenses will result in reduced net income. Changes in how clients choose to access asset management services may also exert downward pressure on fees.
Our actual global tax rate may vary from our expectation and that variance may be material. 27 Failure to comply with the tax laws of the U.S., the U.K. or other jurisdictions, which laws are subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive basis, may result in erroneous filings, adjustments to previously recognized tax assets and liabilities, negative impact to income and reputational damage.
Failure to comply with the tax laws of the U.S., the U.K. or other jurisdictions, which laws are subject to potential legislative, judicial or administrative change and differing interpretations, possibly on a retroactive basis, may result in erroneous filings, adjustments to previously recognized tax assets and liabilities, negative impact to income and reputational damage.
If our clients suffer significant losses or otherwise are dissatisfied with our service, we could be subject to the risk of legal liability or actions alleging, among other theories, negligent misconduct, breach of fiduciary duty, breach of contract, unjust enrichment and/or fraud.
We make investment decisions on behalf of our clients that could result in substantial losses to those clients. If our clients suffer significant losses or otherwise are dissatisfied with our service, we could be subject to the risk of legal liability or actions alleging, among other theories, negligent misconduct, breach of fiduciary duty, breach of contract, unjust enrichment and/or fraud.
As of December 31, 2023, our top five client relationships represented approximately 14% of total run rate gross management fee revenue, and our top 25 clients represented approximately 38% of run rate gross management fee revenue.
As of December 31, 2024, our top five client relationships represented approximately 13% of total run rate gross management fee revenue, and our top 25 clients represented approximately 35% of run rate gross management fee revenue.
The insurers of the policies are considered a significant counterparty to us. The failure of a counterparty to meet its obligations or provide the services or insurance protection we depend on for these or other reasons could adversely affect our ability to conduct our business and result in loss of client assets and potential liability.
The failure of a counterparty to meet its obligations or provide the services or insurance protection we depend on for these or other reasons could adversely affect our ability to conduct our business and result in loss of client assets and potential liability. We are subject to the U.S. Foreign Corrupt Practices Act, the U.K.
Failure to comply with applicable laws or regulations could result in fines, suspension or revocation of Acadian’s registration as an investment adviser, suspensions of individual employees, revocation of licenses to operate in certain jurisdictions or other sanctions, which could materially adversely affect our business, financial condition and results of operations.
Any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business. 21 Failure to comply with applicable laws or regulations could result in fines, suspension or revocation of Acadian LLC’s registration as an investment adviser, suspensions of individual employees, revocation of licenses to operate in certain jurisdictions or other sanctions, which could materially adversely affect our business, financial condition and results of operations.
Regulatory scrutiny, litigation or reputational risk incurred in connection with conflicts of interest would adversely impact our business in a number of ways, including by making counterparties reluctant to do business with us, impeding our ability to retain or increase our assets under management, subjecting us to potential litigation and adversely impacting our results of operations. 15 Equity ownership by employees of Acadian is at the level of Acadian and not at the holding company level, although employees of Acadian may acquire our common stock.
Regulatory scrutiny, litigation or reputational risk incurred in connection with conflicts of interest would adversely impact our business in a number of ways, including by making counterparties reluctant to do business with us, impeding our ability to retain or increase our assets under management, subjecting us to potential litigation and adversely impacting our results of operations.
The expansion of those and similar programs could, over time, make it more difficult for us to maintain our fee rates. 17 Investments in non-U.S. markets, in securities of non-U.S. companies and utilization of currency forward contracts and options on currency may involve foreign currency exchange risk, and tax, political, social and economic uncertainties, and a reduction in assets under management associated with investments in non-U.S. equities could have a disproportionately adverse impact on our results of operations.
Investments in non-U.S. markets, in securities of non-U.S. companies and utilization of currency forward contracts and options on currency may involve foreign currency exchange risk, and tax, political, social and economic uncertainties, and a reduction in assets under management associated with investments in non-U.S. equities could have a disproportionately adverse impact on our results of operations.
If a significant portion of clients or investors decides to withdraw their investments or terminate their investment management agreements or sub-advisory agreements, our ability to generate earnings would decline and our results of operations and financial condition would be affected. 13 In addition, assets could be withdrawn for any number of reasons other than poor absolute or relative investment performance, including macro-economic factors unrelated to investment performance, a reduction in market demand for the systematic asset classes, products or strategies we offer, the loss of key personnel, price declines in the securities markets generally, price declines in those assets in which client assets are concentrated or changes in investment patterns of clients, a failure by us to comply with applicable client and regulatory investment guidelines, or factors wholly unrelated to us.
In addition, assets could be withdrawn for any number of reasons other than poor absolute or relative investment performance, including macro-economic factors unrelated to investment performance, a reduction in market demand 10 for the asset classes, products or strategies we offer, the loss of key personnel, price declines in the securities markets generally, price declines in those assets in which client assets are concentrated or changes in investment patterns of clients, a failure by us to comply with applicable client and regulatory investment guidelines, or factors wholly unrelated to us.
Sales or distributions of substantial amounts of our common stock, including shares issued in connection with an acquisition, or the perception that such sales or distributions could occur, may cause the market price of our common stock to decline. 26 Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
If our techniques for managing risk are ineffective, we may be exposed to material unanticipated losses. In order to manage the significant risks inherent in our business, we must maintain effective policies, procedures and systems that enable us to identify, monitor and control our exposure to operational, legal and reputational risks.
In order to manage the significant risks inherent in our business, we must maintain effective policies, procedures and systems that enable us to identify, monitor and control our exposure to operational, legal and reputational risks.
The Exchange Act requires us to file annual, quarterly and current reports with respect to our business and financial condition. Our management and other personnel devote substantial time to compliance with our public company obligations.
The Exchange Act requires us to file annual, quarterly and current reports with respect to our business and financial condition. Our management and other personnel devote substantial time to compliance with our public company obligations. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
Impairment of our relationships with clients and/or consultants may negatively impact our business and our results of operations. We believe we have strong client and consultant relationships in our core institutional marketplaces, and we depend upon these relationships to successfully market our existing products and strategies and to introduce new products and strategies.
We believe we have strong client and consultant relationships in our core institutional marketplaces, and we depend upon these relationships to successfully market our existing products and strategies and to introduce new products and strategies.
As a result, we and our clients have exposure to the credit, operational and other risks posed by such counterparties, including the risk of default by or bankruptcy of a counterparty. Additionally, we hold insurance policies which cover historical tax benefits relating to certain of our deferred tax assets.
As a result, we and our clients have exposure to the credit, operational and other risks posed by such counterparties, including the risk of default by or bankruptcy of a counterparty.
A significant amount of our assets under management is represented by strategies that invest in securities of non-U.S. companies. Fluctuations in foreign currency exchange rates could negatively impact the account values and the investment returns of clients who are invested in these strategies, with a corresponding reduction in management fee income.
Fluctuations in foreign currency exchange rates could negatively impact the account values and the investment returns of clients who are invested in these strategies, with a corresponding reduction in management fee income.
As of December 31, 2023, $44.7 billion, or 43%, of our assets under management were concentrated across three investment strategies: Acadian’s Emerging Markets Equity ($16.8 billion, or 16%), Acadian’s Global Equity ($14.1 billion, or 14%), and Acadian’s All-Country World ex-US Equity ($13.8 billion, or 13%).
As of December 31, 2024, $52 billion, or 45%, of our assets under management were concentrated across three investment strategies: Acadian Global Equity ($19 billion, or 16%) Acadian Emerging Markets Equity ($18 billion, or 16%), and Acadian All-Country World ex-US Equity ($15 billion, or 13%).
We are subject to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws, as well as export control laws, customs laws, sanctions laws, anti-facilitation of tax evasion laws and other laws governing our operations.
Bribery Act and other anti-corruption laws, as well as export control laws, customs laws, sanctions laws, anti-facilitation of tax evasion laws and other laws governing our operations.
Our financial performance is dependent upon our ability to minimize outflows and increase inflows through sound relative investment performance over measured periods of time compared to relevant benchmarks and peer performance results.
Our ability to attract and retain assets under management and generate earnings is dependent on maintaining competitive investment performance, as well as market and other factors. Our financial performance is dependent upon our ability to minimize outflows and increase inflows through sound relative investment performance over measured periods of time compared to relevant benchmarks and peer performance results.
Any of these consequences could have a material adverse effect on our financial condition or results of operations. We may be unable to obtain sufficient capital and liquidity to meet the financing requirements of our business. In July 2016 we issued an aggregate of $400 million of long-term bonds, $125 million of which we redeemed in January 2022.
Any of these consequences could have a material adverse effect on our financial condition or results of operations. 16 We may be unable to obtain sufficient capital and liquidity to meet the requirements of our business.
Our continued growth depends in part on our effectiveness in developing and introducing new products and/or capabilities. Such innovation may require significant time and resources, including upfront and ongoing expenses, as well as expose us to additional risks, including but not limited to legal and regulatory risks.
Such innovation may require significant time and resources, including upfront and ongoing expenses, as well as expose us to additional risks, including but not limited to legal and regulatory risks.
It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the proposals will become law. Any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business.
It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the proposals will become law.
As a result, our cash flows and ability to fund operations are largely dependent upon the profitability of Acadian. Acadian is required to make certain cash distributions to us under its operating agreement. Distributions to us from Acadian may be subject to Acadian maintaining sufficient working capital, regulatory requirements, claims of creditors of Acadian and applicable bankruptcy and insolvency laws.
As a result, our cash flows and ability to fund operations are largely dependent upon the profitability of Acadian LLC. Acadian LLC is required to make certain cash distributions to us under its operating agreement.
A successful attack could result in significant adverse consequences, including regulatory inquiries or litigation, increased costs and expenses including costs related to insurance and remediation of any security vulnerabilities, reputational damage, lost revenue, and fines or penalties. 21 We are subject to data protection laws including in the European Union (“EU”), United Kingdom (“U.K.”), United States (“U.S.”) and other jurisdictions, and any failure to comply with such legislation could adversely affect our business, reputation, results of operations and financial condition.
We are subject to data protection laws including in the European Union (“EU”), United Kingdom (“U.K.”), United States (“U.S.”) and other jurisdictions, and any failure to comply with such legislation could adversely affect our business, reputation, results of operations and financial condition.
Any such legal action, whether threatened or actual, could result in reputational damage, loss of clients and assets, increased costs and expenses in resolving a claim, diversion of employee resources and resulting financial losses. 20 We make investment decisions on behalf of our clients that could result in substantial losses to those clients.
We may be named as defendants or co-defendants in lawsuits, or may be involved in disputes that include the threat of lawsuits seeking substantial damages. Any such legal action, whether threatened or actual, could result in reputational damage, loss of clients and assets, increased costs and expenses in resolving a claim, diversion of employee resources and resulting financial losses.
Additionally, it is possible that any such disruption or disaster could have a significant impact on the general economy, domestic and local financial and capital markets or specific industries, including the financial services industry.
Additionally, it is possible that any such disruption or disaster could have a significant impact on the general economy, domestic and local financial and capital markets or specific industries, including the financial services industry. 17 A significant portion of our operations relies heavily on the secure processing, storage and transmission of confidential and other information as well as the monitoring of a large number of complex transactions.
The EU/U.K. Data Protection Laws give strong enforcement powers to data protection authorities in the EU/U.K., and introduce significant penalties for non-compliance, with fines of up to 4% of total annual worldwide turnover or €20 million (whichever is higher), depending on the type and severity of the breach.
Data Protection Laws give strong enforcement powers to data protection authorities in the EU/U.K., and introduce significant penalties for non-compliance, with fines of up to 4% of total annual worldwide turnover or €20 million (whichever is higher), depending on the type and severity of the breach. 18 In the United States, we are subject to rules adopted pursuant to the Gramm Leach Bliley Act and an ever-increasing number of state laws and regulations, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act (together, the “CCPA”).
As a result, we may be more impacted by trends and issues and more susceptible to negative events impacting us and the asset management industry than other more diversified asset managers or other financial services companies that provide asset management and other financial services.
As a result, we may be more impacted by trends and issues and more susceptible to negative events impacting us and the asset management industry than other more diversified asset managers or other financial services companies that provide asset management and other financial services. 20 We operate in a highly regulated industry, and continually changing federal, state, local and foreign laws and regulations could materially adversely affect our business, financial condition and results of operations.
In addition to providing investment management services, we must have the necessary operational capabilities to manage our business effectively in accordance with client expectations and applicable law.
Our business operations are complex, and a failure to properly perform operational tasks or maintain infrastructure could have an adverse effect on our revenues and income. In addition to providing investment management services, we must have the necessary operational capabilities to manage our business effectively in accordance with client expectations and applicable law.
We operate in a highly regulated industry, and continually changing federal, state, local and foreign laws and regulations could materially adversely affect our business, financial condition and results of operations. The investment management business is highly regulated and, as a result, we are required to comply with a wide array of domestic and international laws and regulations.
The investment management business is highly regulated and, as a result, we are required to comply with a wide array of domestic and international laws and regulations.
Declines in the market price of our common stock or failure of the market price to increase could also harm our ability to retain key employees, reduce our access to capital and otherwise harm our business.
Declines in the market price of our common stock or failure of the market price to increase could also harm our ability to retain key employees, reduce our access to capital and otherwise harm our business. 24 The carrying value of goodwill and other intangible assets on our balance sheet could become impaired, which would adversely affect our financial condition and results of operations.
Certain client accounts have similar investment objectives and may engage in transactions in the same types of securities and instruments. These transactions could impact the prices and availability of the securities and instruments in which a client account invests and could have an adverse impact on an account’s performance.
Certain client accounts have similar investment objectives and may engage in transactions in the same types of securities and instruments.
Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly. 29 In addition, Sarbanes-Oxley requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures.
In addition, Sarbanes-Oxley requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures.
There have been historical periods in which directors’ and officers’ liability insurance and errors and omissions insurance have been available only with limited coverage amounts, less favorable terms or at prohibitive cost, and these conditions could recur. 19 Our growth initiatives, including the development and introduction of new products and/or capabilities, may be unsuccessful, may expose us to risks and may not facilitate the growth of our business.
In addition, we may obtain additional liability insurance for our directors and officers. There have been historical periods in which directors’ and officers’ liability insurance and errors and omissions insurance have been available only with limited coverage amounts, less favorable terms or at prohibitive cost, and these conditions could recur.
Accordingly, this credit facility is no longer available to us at the holding company level for future borrowings. Our ability to finance our operations, strategic initiatives and maturing obligations under our long-terms bonds is therefore dependent on future issuances of long-term bonds and our future operating performance.
Our ability to finance our operations, strategic initiatives and maturing obligations under our long-terms bonds is dependent on future issuances of long-term bonds or other financing options and our future operating performance.
The carrying value of goodwill and other intangible assets on our balance sheet could become impaired, which would adversely affect our financial condition and results of operations. We have recorded goodwill and intangible asset impairments in the past and could incur such charges in the future as acquisitions occur and we take on more goodwill.
We have recorded goodwill and intangible asset impairments in the past and could incur such charges in the future if acquisitions occur and we take on more goodwill.
We have entered into non-competition agreements with some, but not all, of our investment and management personnel, but these agreements may not be enforceable or may not be enforceable to their full extent. In addition, we may agree to waive a non-competition agreement applicable to investment or management personnel in light of the circumstances of our relationship with that person.
We have entered into non-competition agreements with some, but not all, of our investment and management personnel, but these agreements may not be enforceable or may not be enforceable to their full extent. Additionally, key employees 11 receive equity awards that limit a recipient’s right to provide competitive services to our clients or solicit our employees for prescribed periods.
There may be instances where the interests of Acadian’s key employee equity-holders may not align with ours in effecting a desired outcome. There is no assurance that a resolution of any conflicts of interest may be possible or the interests of all parties can be taken into account.
There is no assurance that a resolution of any conflicts of interest may be possible or the interests of all parties can be taken into account. Impairment of our relationships with clients and/or consultants may negatively impact our business and our results of operations.
Any material decrease in profits at, or material reduction in distributions from, Acadian could negatively impact our business and results of operations. Acadian operates under ownership, governance and economic arrangements that we and Acadian negotiated either at inception or during the course of our relationship. Periodically, this arrangement is reviewed and, in some instances, may be renegotiated and revised.
Acadian LLC operates under ownership, governance and economic arrangements that we and Acadian LLC negotiated either at inception or during the course of our relationship. Any renegotiation of the economic arrangement could reduce the economic benefits derived by us from Acadian LLC.
We rely upon the contributions of our senior management team to establish and implement our strategy and to manage the future growth of our business. The amount and structure of compensation and opportunities for equity ownership we offer are key components of our ability to attract and retain qualified management personnel.
The amount and structure of compensation and opportunities for equity ownership we offer are key components of our ability to attract and retain qualified management personnel. There is no assurance that we will be successful in designing and implementing an attractive compensation model to attract and retain qualified personnel.
Cyber-attacks are growing in sophistication and come from a variety of sources, including criminal hackers, hactivists, state-sponsored intrusions, industrial espionage, personnel or the personnel of third parties, and insider threats.
Like many other financial institutions, we have been subject to cyber-attacks and will continue to be subject to an increasing risk of cyber incidents from these activities. Cyber-attacks are growing in sophistication and come from a variety of sources, including criminal hackers, activists, state-sponsored intrusions, industrial espionage, and insider threats.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Head of IT & CISO has over 20 years of industry experience in information technology and maintains industry certifications such as the ISC2 CISSP.
Biggest changeOur Head of IT and CISO has over 20 years of industry experience in information technology and maintains industry certifications such as the ISC2 CISSP.
Reporting to the Audit Committee of our Board of Directors quarterly, our Head of IT and CISO may address overall assessment of the Company’s compliance with our cybersecurity policies and procedures, risk management, service provider arrangements, testing results and security incident response and makes recommendations for changes and updates to policies, procedures, and technologies related to cybersecurity and IT risk management. 31
Reporting to the Audit Committee of our Board of Directors quarterly, our Head of IT and CISO may address overall assessment of the Company’s compliance with our cybersecurity policies and procedures, risk management, service provider arrangements, testing results and security incident response and makes recommendations for changes and updates to policies, procedures, and technologies related to cybersecurity and IT risk management. 26
The Audit Committee of our Board of Directors has primary responsibility for oversight of cybersecurity and is briefed on cybersecurity risks quarterly and following any material cybersecurity incidents. Our cybersecurity program is managed by our Head of IT and CISO, who reports to our Chief Executive Officer and has served in this role since 2019.
The Audit Committee of our Board of Directors has primary responsibility for oversight of cybersecurity and is briefed on cybersecurity risks quarterly and following any material cybersecurity incidents. Our cybersecurity program is managed by our Head of IT and CISO, who reports to our Chief Administrative Officer and has served in this role since 2019.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive office is located at 200 State Street, 13th Floor, Boston, Massachusetts 02109. In Boston, we lease 7,218 square feet under a lease that expires on June 30, 2024. Acadian has its own primary office in Boston, MA where core investment management activities take place.
Biggest changeItem 2. Properties. Our principal executive office is located at 200 State Street, 13th Floor, Boston, Massachusetts 02109. Acadian LLC has its own primary office in Boston, MA where core investment management activities take place. In addition, Acadian LLC has leased secondary offices to support research, distribution and client servicing.
In addition, Acadian has leased secondary offices to support research, distribution and client servicing. Key locations for secondary offices include (but are not limited to) London, Singapore and Sydney. We believe existing facilities are appropriate in size, location and functionality to meet current and future business requirements.
Key locations for secondary offices include (but are not limited to) London, Singapore and Sydney. We believe existing facilities are appropriate in size, location and functionality to meet current and future business requirements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the amount of liability that may result from these matters cannot be ascertained, we do not currently believe that, in the aggregate, they will result in liabilities material to our consolidated financial condition, future results of operations or cash flow. Item 4. Mine Safety Disclosures. Not applicable. 32 PART II
Biggest changeAlthough the amount of liability that may result from these matters cannot be ascertained, we do not currently believe that, in the aggregate, they will result in liabilities material to our consolidated financial condition, future results of operations or cash flow. Item 4. Mine Safety Disclosures. Not applicable. 27 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, $94.9 million remained available to repurchase shares under the program. 33 Financial Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of BSIG under the Securities Act.
Biggest changeFinancial Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of AAMI under the Securities Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock trades on the New York Stock Exchange under the symbol “BSIG.” As of February 27, 2024 there were two registered stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock trades on the New York Stock Exchange under the symbol “AAMI.” As of February 26, 2025 there were two registered stockholders of record.
The following graph compares the cumulative shareholder return on our common stock during the five-year period ending December 31, 2023, with the cumulative total return, during the same period, of the Standard & Poor’s 500 Index and the Standard & Poor’s 500 Financial Sector Index. * The Company undertook leadership changes as of April 15, 2020. 34 Item 6. [Reserved] 35
The following graph compares the cumulative stockholder return on our common stock during the five-year period ending December 31, 2024, with the cumulative total return, during the same period, of the Standard & Poor’s 500 Index and the Standard & Poor’s 500 Financial Sector Index. 28 Item 6. [Reserved] 29
Removed
Repurchases The following table sets out information regarding repurchases of equity securities by the Company for the three months ended December 31, 2023: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value that may yet be purchased under the plans or programs (1) (in millions) October 1-31, 2023 — $ — — $ 100.0 November 1-30, 2023 — — — 100.0 December 1-31, 2023 268,800 19.03 268,800 94.9 Total 268,800 $ 19.03 268,800 (1) On December 20, 2023, we announced that our Board of Directors authorized the repurchase of up to $100.0 million of our common stock.
Removed
Share repurchases are subject to a variety of factors, such as our stock price, the capital needs of our business, and economic and market conditions and may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase transactions, exchange transactions, or any combination of such methods.
Removed
The program does not obligate us to repurchase any particular amount of its common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. We repurchased 268,800 shares of common stock with an aggregate purchase price of $5.1 million under this program during the three months ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdditionally, the basis points reported are fee rates based on the asset levels at the time of the transactions and do not consider the fact that client fee rates may change over the next twelve months. 42 The following table summarizes our asset flows and market appreciation (depreciation) by segment for each of the periods indicated: ($ in billions, unless otherwise noted) Years ended December 31, 2023 2022 2021 Quant & Solutions Beginning balance $ 93.6 $ 117.2 $ 107.0 Gross inflows 9.3 11.1 10.6 Gross outflows (15.2) (18.0) (19.7) Reinvested income and distributions 3.6 3.8 2.7 Net flows (2.3) (3.1) (6.4) Market appreciation (depreciation) 12.4 (20.5) 15.5 Other (1) — — 1.1 Ending balance $ 103.7 $ 93.6 $ 117.2 Average AUM (2) $ 98.4 $ 98.7 $ 113.9 Liquid Alpha (3) Beginning balance $ — $ — $ 3.2 Sale of Affiliates — — — Gross inflows — — — Gross outflows — — — Reinvested income and distributions — — — Net flows — — — Market appreciation (depreciation) — — — Other (3) — — (3.2) Ending balance $ — $ — $ — Average AUM $ — $ — $ — Other (3) Beginning balance $ — $ — $ 5.8 Sale of Affiliates — — (8.9) Gross inflows — — 0.7 Gross outflows — — (0.2) Net flows — — 0.5 Market appreciation — — 0.6 Other (1)(3)(4) — — 2.0 Ending balance $ — $ — $ — Average AUM $ — $ — $ 5.4 Average AUM of consolidated Affiliates $ — $ — $ 2.9 Total Beginning balance $ 93.6 $ 117.2 $ 116.0 Sale of Affiliates — — (8.9) Gross inflows 9.3 11.1 11.3 Gross outflows (15.2) (18.0) (19.9) Reinvested income and distributions 3.6 3.8 2.7 Net flows (2.3) (3.1) (5.9) Market appreciation (depreciation) 12.4 (20.5) 16.1 Other (4) — — (0.1) Ending balance $ 103.7 $ 93.6 $ 117.2 Average AUM $ 98.4 $ 98.7 $ 119.3 Average AUM of consolidated Affiliates $ 98.4 $ 98.7 $ 116.8 Annualized basis points: inflows 48.7 46.6 46.4 Annualized basis points: outflows 42.2 39.6 36.5 Annualized revenue impact of net flows ($ in millions) $ (4.8) $ (5.0) $ (10.3) 43 (1) AUM representing liquid alternative strategies previously excluded from the Quant & Solutions segment has been reclassified as of January 1, 2021.
Biggest changeThe following table summarizes our asset flows and market appreciation (depreciation) by segment for each of the periods indicated: ($ in billions, unless otherwise noted) Years ended December 31, 2024 2023 2022 Quant & Solutions Beginning balance $ 103.7 $ 93.6 $ 117.2 Gross inflows 21.2 9.3 11.1 Gross outflows (22.7) (15.2) (18.0) Reinvested income and distributions 3.3 3.6 3.8 Net flows 1.8 (2.3) (3.1) Market appreciation (depreciation) 11.8 12.4 (20.5) Ending balance $ 117.3 $ 103.7 $ 93.6 Average AUM $ 112.3 $ 98.4 $ 98.7 We also analyze our asset flows by client type and client location.
General and Administrative Expense Year ended December 31, 2023 compared to year ended December 31, 2022: General and administrative expense increased $11.5 million, or 16.2%, from $71.1 million for the year ended December 31, 2022 to $82.6 million for the year ended December 31, 2023.
Year ended December 31, 2023 compared to year ended December 31, 2022: General and administrative expense increased $11.5 million, or 16.2%, from $71.1 million for the year ended December 31, 2022 to $82.6 million for the year ended December 31, 2023.
Interest Expense Year ended December 31, 2023 compared to year ended December 31, 2022: Interest expense decreased $0.9 million, or 4.4%, from $20.5 million for the year ended December 31, 2022 to $19.6 million for the year ended December 31, 2023, primarily due to the $1.3 million of additional interest expense incurred for the year ended December 31, 2022 related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.
Year ended December 31, 2023 compared to year ended December 31, 2022: Interest expense decreased $0.9 million, or 4.4%, from $20.5 million for the year ended December 31, 2022 to $19.6 million for the year ended December 31, 2023, primarily due to the $1.3 million of additional interest expense incurred for the year ended December 31, 2023 related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.
Loss on Extinguishment of Debt Year ended December 31, 2023 compared to year ended December 31, 2022: There was no loss on extinguishment of debt for the year ended December 31, 2023.
Year ended December 31, 2023 compared to year ended December 31, 2022: There was no loss on extinguishment of debt for the year ended December 31, 2023.
Year ended December 31, 2023 compared to year ended December 31, 2022: Consolidated Funds’ revenue increased $2.6 million, from $0.4 million for the year ended December 31, 2022 to $3.0 million for the year ended December 31, 2023.
Year ended December 31, 2023 compared to year ended December 31, 2022: Consolidated Funds’ revenue increased $2.6 million from $0.4 for the year ended December 31, 2022 to $3.0 million for the year ended December 31, 2023.
Our actual funding of these potential repurchases of Acadian equity and profits interests is limited to only that portion that may be put to us by Acadian key employees or that we decide to call to facilitate succession planning at Acadian, which is typically capped annually such that we do not repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian key employees.
Our actual funding of these potential repurchases of Acadian LLC equity and profits interests is limited to only that portion that may be put to us by Acadian LLC key employees or that we decide to call to facilitate succession planning at Acadian LLC, which is typically capped annually such that we do not repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian LLC key employees.
GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP. ENI is an important measure to investors because it is used by us to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine Affiliate variable compensation and equity distributions, and incentivize management.
GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP. ENI is an important measure to investors because it is used by us to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and equity distributions, and incentivize management.
We view profit sharing as an attractive operating model, as it allows us to share in the benefits of operating leverage as the business grows, and ensures all equity and profit interests holders are incentivized to achieve that growth. Equity or profit interests owned by Acadian key employees are awarded as part of their variable compensation arrangement.
We view profit sharing as an attractive operating model, as it allows us to share in the benefits of operating leverage as the business grows, and ensures all equity and profit interests holders are incentivized to achieve that growth. Equity or profit interests owned by Acadian LLC key employees are awarded as part of their variable compensation arrangement.
We exclude deferred tax resulting from changes in tax law and expiration of statutes, adjustments for uncertain tax positions, deferred tax attributable to intangible assets and other unusual items not related to current operating results to reflect ENI tax normalization. We also adjust our income tax expense to reflect any tax impact of our ENI adjustments. Reconciliation of U.S.
We exclude deferred tax resulting from changes in tax law and expiration of statutes, adjustments for uncertain tax positions, deferred tax attributable to intangible assets and other unusual items not related to current operating results to reflect ENI tax normalization. We also adjust our income tax expense to reflect any tax impact of our ENI adjustments. 50 Reconciliation of U.S.
Because the calculation of economic net income excludes certain ongoing expenses, including amortization expense and certain compensation costs, it has certain material limitations and should not be viewed in isolation or as a substitute for U.S. GAAP measures of earnings. 60 ENI Revenues The following table reconciles U.S.
Because the calculation of economic net income excludes certain ongoing expenses, including amortization expense and certain compensation costs, it has certain material limitations and should not be viewed in isolation or as a substitute for U.S. GAAP measures of earnings. ENI Revenues The following table reconciles U.S.
Sales-based compensation decreased $(0.1) million, or (1.3)%, from $7.7 million for the year ended December 31, 2022 to $7.6 million for the year ended December 31, 2023 as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.
Sales-based compensation decreased $(0.1) million, or (1.3)%, from $7.7 million for the years ended December 31, 2022 to $7.6 million for the year ended December 31, 2023 as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.
Awards of equity made to Affiliate key employees are accounted for as cash-settled, with the fair value recognized as compensation expense over the requisite service period, with a corresponding liability carried within other compensation liabilities on the Consolidated Balance Sheets until the award is settled by us.
Awards of equity made to key employees are accounted for as cash-settled, with the fair value recognized as compensation expense over the requisite service period, with a corresponding liability carried within other compensation liabilities on the Consolidated Balance Sheets until the award is settled by us.
While we believe all assumptions used in determining the fair value of the liabilities are reasonable and appropriate, certain assumptions are subjective and changes in these assumptions could result in different fair value amounts. 78 Taxation We file tax returns directly with the U.S., U.K., state tax authorities and in other foreign jurisdictions.
While we believe all assumptions used in determining the fair value of the liabilities are reasonable and appropriate, certain assumptions are subjective and changes in these assumptions could result in different fair value amounts. Taxation We file tax returns directly with the U.S., U.K., state tax authorities and in other foreign jurisdictions.
Over time, Acadian key employee-owned equity or profit interests are recycled from one generation of employee owners to the next, either by the next generation purchasing equity or profit interests directly from retiring principals, or by Acadian key employees forgoing cash bonuses in exchange for the equivalent value in Acadian equity or profit interests.
Over time, Acadian LLC key employee-owned equity or profit interests are recycled from one generation of employee-owners to the next, either by the next generation purchasing equity or profit interests directly from retiring principals, or by key employees forgoing cash bonuses in exchange for the equivalent value in Acadian LLC equity or profit interests.
Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of these assets over time.
Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of 68 these assets over time.
We exclude capital transaction costs, including the costs of raising debt or equity, gains or losses realized as a result of redeeming debt or equity and direct incremental costs associated with acquisitions of businesses or assets. 58 iv. We exclude seed capital and co-investment gains, losses and related financing costs.
We exclude capital transaction costs, including the costs of raising debt or equity, gains or losses realized as a result of redeeming debt or equity and direct incremental costs associated with acquisitions of businesses or assets. iv. We exclude seed capital and co-investment gains, losses, and related financing costs.
Management and investors use this ratio when comparing our profitability relative to our peer group and evaluating our ability to manage the cost structure and profitability of our business under different operating environments. (3) ENI management fee revenue corresponds to U.S. GAAP management fee revenue.
Management and investors use this ratio when comparing our profitability relative to our peer group and evaluating our ability to manage the cost structure and profitability of our business under different operating environments. (3) ENI management fee revenue corresponds to U.S.
Quant & Solutions ENI variable compensation expense is based on contractual percentage of earnings before variable compensation, and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.
Quant & Solutions segment ENI variable compensation expense is based on contractual percentage of earnings before variable compensation and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.
Profits after variable compensation are shared between us and Acadian key employee equity holders according to our respective equity or profit interests ownership.
Profits after variable compensation are shared between us and Acadian LLC key employee equity holders according to our respective equity or profit interests ownership.
Our MD&A is presented in five sections: • Overview provides a brief description of our business. It includes information on our reporting segment and underlying Affiliate, a summary of The Economics of Our Business and an explanation of How We Measure Performance using a non-GAAP measure which we refer to as economic net income, or ENI.
Our MD&A is presented in five sections: • Overview provides a brief description of our business. It includes information on our reporting segment, a summary of The Economics of Our Business and an explanation of How We Measure Performance using a non-GAAP measure which we refer to as economic net income, or ENI.
This section also provides a Summary Results of Operations and information regarding our Assets Under Management by strategy, client type and client location, and net flows by segment, client type and client location. • U.S. GAAP Results of Operations for the years ended December 31, 2023, 2022 and 2021 includes an explanation of changes in our U.S.
This section also provides a Summary Results of Operations and information regarding our Assets Under Management by strategy, client type and client location, and net flows by segment, client type and client location. • U.S. GAAP Results of Operations for the years ended December 31, 2024, 2023 and 2022 includes an explanation of changes in our U.S.
The increase was due to 2.0% higher performance fees in the year ended December 31, 2023, as well as 1.6% higher management fees due to improvement in blended average basis points on assets under management, due to fee rates from inflows being higher than outflows in the years ended December 31, 2023 and 2022.
The increase was due to 2.0% higher performance fees in the year ended December 31, 2023, as well as 1.6% higher management fees due to improvement in blended average basis points on assets under management, driven by fee rates from inflows being higher than outflows in the years ended December 31, 2023 and 2022.
GAAP Operating Metrics The following table shows our key U.S. GAAP operating metrics for the years ended December 31, 2023, 2022 and 2021. The second, third and fourth metrics below have each been adjusted to eliminate the effect of consolidated Funds to more accurately reflect the economics of our Company.
GAAP Operating Metrics The following table shows our key U.S. GAAP operating metrics for the years ended December 31, 2024, 2023 and 2022. The second, third and fourth metrics below have each been adjusted to eliminate the effect of consolidated Funds to more accurately reflect the economics of our Company.
U.S.-based clients, where the contracting client is based in the United States, and ii. Non-U.S.-based clients, where the contracting client is based outside the United States. The following table summarizes asset flows by client location for each of the periods indicated: ($ in billions) Years ended December 31, 2023 2022 2021 U.S.
U.S.-based clients, where the contracting client is based in the United States, and ii. Non-U.S.-based clients, where the contracting client is based outside the United States. The following table summarizes asset flows by client location for each of the periods indicated: ($ in billions) Years ended December 31, 2024 2023 2022 U.S.
GAAP net income attributable to controlling interests and ENI for the years ended December 31, 2023, 2022 and 2021, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key Non-GAAP operating metrics.
GAAP net income attributable to controlling interests and ENI for the years ended December 31, 2024, 2023 and 2022, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics.
We believe Adjusted EBITDA is a useful liquidity metric because it indicates our ability to make further investments in our business, service debt and meet working capital requirements. 75 The following table reconciles our U.S.
We believe Adjusted EBITDA is a useful liquidity metric because it indicates our ability to make further investments in our business, service debt and meet working capital requirements. 65 The following table reconciles our U.S.
In particular, ENI excludes non-cash charges representing the changes in the value of Affiliate equity and profit interests held by Affiliate key employees, the results of discontinued operations which are no longer part of our business, restructuring costs, capital transaction costs, seed capital and co-investment gains, losses and related financing costs, and that portion of consolidated Funds which are not attributable to our stockholders.
In particular, ENI excludes non-cash charges representing the changes in the value of Acadian LLC equity and profit interests held by key employees, the results of discontinued operations which are no longer part of our business, restructuring costs, capital transaction costs, seed capital and co-investment gains, losses and related financing costs, and that portion of consolidated Funds which are not attributable to our stockholders.
GAAP net income attributable to controlling interests to Adjusted EBITDA. 36 • Critical Accounting Policies and Estimates provides a discussion of the key accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition.
GAAP net income attributable to controlling interests to Adjusted EBITDA. 30 • Critical Accounting Policies and Estimates provides a discussion of the key accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition.
Variable compensation is the portion of earnings that is contractually allocated to Acadian employees as a bonus pool, typically representing a percentage of earnings before variable compensation, which is measured as revenues less fixed compensation and benefits and other operating and administrative expenses.
Variable compensation includes the portion of earnings that is contractually allocated to Acadian LLC employees as a bonus pool, typically representing a percentage of earnings before variable compensation, which is measured as revenues less fixed compensation and benefits and other operating and administrative expenses.
Seed/Co-investment (gains) losses and financings (1) (1.5) 0.6 (4.0) v. Tax benefit of goodwill and acquired intangibles deductions 1.5 1.5 1.1 vi. Discontinued operations attributable to controlling interests and restructuring (2) 9.5 1.3 (743.8) vii.
Seed/Co-investment (gains) losses and financings (1) (2.8) (1.5) 0.6 v. Tax benefit of goodwill and acquired intangibles deductions 1.5 1.5 1.5 vi. Discontinued operations attributable to controlling interests and restructuring (2) 1.6 9.5 1.3 vii.
We also use ENI to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and Affiliate equity distributions, and incentivize management. It is an important measure in evaluating our financial performance because we believe it most accurately represents our operating performance and cash generation capability.
We also use ENI to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and Acadian LLC equity distributions, and incentivize management. It is an important measure in evaluating our financial performance because we believe it most accurately represents our operating performance and cash generation capability.
(3) Includes adjustments of $(0.2) million, $0.2 million and $3.0 million to remove the tax benefit (expense) resulting from the change in liabilities for uncertain tax positions recorded during the years ended December 31, 2023, 2022 and 2021, respectively.
(3) Includes adjustments of $(0.3) million, $(0.2) million and $0.2 million to remove the tax benefit (expense) resulting from the change in liabilities for uncertain tax positions recorded during the years ended December 31, 2024, 2023 and 2022, respectively.
These ownership interests may in certain circumstances be repurchased by BSUS at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on our balance sheet as a liability. Non-cash movements in the value of this liability are treated as compensation expense under U.S. GAAP.
These ownership interests may in certain circumstances be repurchased by Hold Co at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on our balance sheet as a liability. Non-cash movements in the value of this liability are treated as compensation expense under U.S. GAAP.
Year ended December 31, 2023 compared to year ended December 31, 2022: Performance fees increased $1.0 million, or 2.0%, from $49.4 million for the year ended December 31, 2022 to $50.4 million for the year ended December 31, 2023, primarily due to strong performance relative to market in certain strategies.
Year ended December 31, 2023 compared to year ended December 31, 2022: Performance fees increased $1.0 million, or 2.0%, from $49.4 million for the year ended December 31, 2022 to $50.4 million for the year ended December 31, 2023, primarily due to strong performance relative to benchmarks in certain strategies.
The increase was primarily attributable to severance-related costs at Acadian in the year ended December 31, 2023 and the inclusion of deferred compensation expense earned on current and prior year performance fee revenues, of which Acadian’s share is determined by a contractual split and recognized as compensation expense over a vesting period.
The increase was primarily attributable to severance-related costs in the year ended December 31, 2023 and the inclusion of deferred compensation expense earned on current and prior year performance fee revenues, of which Acadian LLC’s share is determined by a contractual split and recognized as compensation expense over a vesting period.
The change in net outflows for the year ended December 31, 2022 was primarily due to lower outflows in certain Acadian strategies, partly as the result of improved relative investment performance in the year ended December 31, 2022.
The change in net flows for the year ended December 31, 2022 was primarily due to lower outflows in certain strategies, partly as the result of improved relative investment performance in the year ended December 31, 2022.
GAAP results of operations were as follows for the years ended December 31, 2023, 2022 and 2021. Years ended December 31, Increase (Decrease) ($ in millions unless otherwise noted) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 U.S.
GAAP results of operations were as follows for the years ended December 31, 2024, 2023 and 2022. Years ended December 31, Increase (Decrease) ($ in millions unless otherwise noted) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 U.S.
The increase was primarily due to the improvement in blended average basis points on assets under management, due to fee rates from inflows being higher than outflows in 2022 and 2023.
The increase was primarily due to an improvement in blended average basis points on assets under management, due to fee rates on inflows being higher than fee rates on outflows in 2022 and 2023.
Loss on extinguishment of debt was $3.2 million for the year ended December 31, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.
Loss on extinguishment of debt was $3.2 million for the year ended December 31, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022. 46 U.S.
We earn management fees based on assets under management. Approximately 80% of our management fees are calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows.
We earn management fees based on assets under management. The majority of our management fees are calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows.
In 2022, we paid down net $(125.0) million against third party and revolving credit facility borrowings compared to $0.0 million in 2023 and $0.0 million in 2021. Working Capital and Long-Term Debt The following table summarizes certain key financial data relating to our capital resources and liquid net assets.
In 2022, we paid down net $(125.0) million against third-party and revolving credit facility borrowings compared to $0.0 million in 2024 and 2023. 62 Working Capital and Long-Term Debt The following table summarizes certain key financial data relating to our capital resources and liquid net assets.
Excludes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former Parent of $1.2 million for the year ended December 31, 2022.
For the year ended December 31, 2022, includes $0.1 million of restructuring costs, and $1.2 million associated with the transfer of an insurance policy from our former parent.
The sharing of profits in this manner ensures that the economic interests of Acadian key employees and those of BSUS are aligned, both in terms of generating strong annual earnings as well as investing those earnings back into the business in order to generate growth over the long term.
The sharing of profits in this manner ensures that the economic interests of Acadian LLC key employees and ours are aligned, both in terms of generating strong annual earnings as well as investing those earnings back into the business in order to generate growth over the long term.
These ownership interests may, in certain circumstances, be repurchased by BSUS at a value based on a pre-determined fixed multiple of twelve-month earnings and as such a liability is carried on our balance sheet based on the expected cash to be paid.
These ownership interests may in certain circumstances be repurchased by Hold Co at a value based on a pre-determined fixed multiple of twelve-month earnings and as such a liability is carried on our balance sheet based on the expected cash to be paid.
GAAP Net Income to Economic Net Income for the Years Ended December 31, 2023, 2022 and 2021 The following table reconciles U.S. GAAP net income attributable to controlling interests to economic net income for the years ended December 31, 2023, 2022 and 2021: Years ended December 31, ($ in millions) 2023 2022 2021 U.S.
GAAP Net Income to Economic Net Income for the Years Ended December 31, 2024, 2023 and 2022 The following table reconciles U.S. GAAP net income attributable to controlling interests to economic net income for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, ($ in millions) 2024 2023 2022 U.S.
The following table reconciles U.S. GAAP compensation expense to ENI fixed compensation and benefits expense for the years ended December 31, 2023, 2022 and 2021: Years ended December 31, ($ in millions) 2023 2022 2021 Total U.S.
The following table reconciles U.S. GAAP compensation and benefits expense to ENI fixed compensation and benefits expense for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, ($ in millions) 2024 2023 2022 Total U.S.
In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian’s Leverage Ratio.
In addition, Acadian LLC is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian LLC Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian LLC’s Leverage Ratio.
The net returns on these investments are considered and presented separately from ENI because ENI is primarily a measure of our earnings from managing client assets, which therefore differs from earnings generated by our investments in Affiliate products, which can be variable from period to period. v.
The net returns on these investments are considered and presented separately from ENI because ENI is primarily a measure of our earnings from managing client assets, which therefore differs from earnings generated by our investments, which can be variable from period to period. v.
(2) Excludes consolidated Funds’ expense of $2.8 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022. (3) Excludes the effect of Funds’ consolidation for the years ended December 31, 2023 and 2022.
(2) Excludes consolidated Funds’ expense of $0.9 million for the year ended December 31, 2024, $2.8 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022. (3) Excludes the effect of Funds’ consolidation for the years ended December 31, 2024, 2023 and 2022.
Net cash used in financing activities, excluding consolidated Funds, consists of share repurchases, third-party borrowings, payments made to OM plc, withholding tax payments on stock option exercises and dividend payments. Net cash used in financing activities was $(8.1) million, $(233.7) million and $(1,152.4) million for the years ended December 31, 2023, 2022 and 2021, respectively.
Net cash used in financing activities, excluding consolidated Funds, consists of share repurchases, third-party borrowings, payments made to OM plc, withholding tax payments on stock option exercises and dividend payments. Net cash used in financing activities was $(110.4) million, $(8.1) million and $(233.7) million for the years ended December 31, 2024, 2023 and 2022, respectively.
Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period. The variable compensation ratio at each Affiliate is calculated as variable compensation divided by ENI earnings before variable compensation. The ENI variable compensation ratio is most comparable to the U.S. GAAP variable compensation ratio.
Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period. The variable compensation ratio is calculated as variable compensation divided by ENI earnings before variable compensation. The ENI variable compensation ratio is most comparable to the U.S. GAAP variable compensation ratio.
For additional discussion of our compensation programs, please refer to the compensation discussions contained within our definitive proxy statement for our 2024 annual meeting of shareholders incorporated herein by reference. Supplemental Liquidity Measure—Adjusted EBITDA As supplemental information, we provide information regarding Adjusted EBITDA, which we define as economic net income before interest, income taxes, depreciation and amortization.
For additional discussion of our compensation programs, please refer to the compensation discussions contained within our definitive proxy statement for our 2025 annual meeting of stockholders incorporated herein by reference. Supplemental Liquidity Measure—Adjusted EBITDA As supplemental information, we provide information regarding Adjusted EBITDA, which we define as economic net income before net interest, income taxes, depreciation and amortization.
Revaluations of Affiliate key employee equity changed $39.9 million in 2023, reflecting revaluations of key employee ownership interests at Acadian, as the value of the equity plan liability decreased $(40.0) million for the year ended December 31, 2022, and decreased $(0.1) million for the year ended December 31, 2023.
Revaluations of Acadian LLC key employee equity changed by $39.9 million in 2023, reflecting revaluations of key employee ownership interests at Acadian LLC, as the value of the equity plan liability decreased $(40.0) million for the year ended December 31, 2022, and decreased $(0.1) million for the year ended December 31, 2023.
We may also be required to consolidate Acadian’s sponsored investment entities, or Funds, due to the nature of our decision-making rights, our economic interests in these Funds or the rights of third party clients in those Funds. 37 The Economics of Our Business Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure.
We may also be required to consolidate Acadian LLC’s sponsored investment entities, or Funds, due to the nature of our decision-making rights, our economic interests in these Funds or the rights of third-party clients in those Funds. 31 The Economics of Our Business Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure.
None of the information in this Annual Report on Form 10-K constitutes either an offer or a solicitation to buy or sell Acadian’s products or services, nor is any such information a recommendation for Acadian’s products or services.
None of the information in this Annual Report on Form 10-K constitutes either an offer or a solicitation to buy or sell Acadian LLC’s products or services, nor is any such information a recommendation for Acadian LLC’s products or services.
However, any equity or profit interests repurchased by BSUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.
However, any equity or profit interests repurchased by Hold Co can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.
It is also an important measure because it assists management in evaluating our operating performance and is presented in a way that most closely reflects the key elements of our profit share operating model with our Affiliates.
It is also an important measure because it assists management in evaluating our operating performance and is presented in a way that most closely reflects the key elements of our profit share operating model with Acadian LLC.
However, any equity or profit interests repurchased by BSUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.
However, any equity or profit interests repurchased by Hold Co can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.
GAAP net income and economic net income, see “—Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis.” 39 Summary Results of Operations The following table summarizes our results of operations for the years ended December 31, 2023, 2022 and 2021: Years ended December 31, Increase (Decrease) ($ in millions, unless otherwise noted) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 U.S.
GAAP net income and economic net income, see “—Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis.” 33 Summary Results of Operations The following table summarizes our results of operations for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, Increase (Decrease) ($ in millions, unless otherwise noted) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 U.S.
GAAP operating margin equals operating income from continuing operations divided by total revenue. (2) Economic net income is a non-GAAP measure we use to evaluate the performance of our business. For a reconciliation to U.S.
GAAP operating margin equals operating income divided by total revenue. (2) Economic net income is a non-GAAP measure we use to evaluate the performance of our business. For a reconciliation to U.S.
The recycling of equity or profit interests is often facilitated by BSUS; see “—U.S. GAAP Results of Operations—U.S. GAAP Expenses—Compensation and Benefits Expense” for a further discussion.
The recycling of equity or profit interests is often facilitated by Hold Co; see “—U.S. GAAP Results of Operations—U.S. GAAP Expenses—Compensation and Benefits Expense” for a further discussion.
GAAP operating expense to ENI operating expense for the years ended December 31, 2023, 2022 and 2021: Years ended December 31, ($ in millions) 2023 2022 2021 U.S.
GAAP operating expense to ENI operating expense for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, ($ in millions) 2024 2023 2022 U.S.
We generally do not enter into off-balance sheet arrangements, other than those described in “Contractual Obligations” as well as Note 6 and Note 15 to our Consolidated Financial Statements included in Item 8 herein, “Variable Interest Entities” and “Commitments and Contingencies”, respectively.
We generally do not enter into off-balance sheet arrangements, other than those described in “Contractual Obligations” as well as Note 5 and Note 14 to our Consolidated Financial Statements included in Item 8 herein, “Variable Interest Entities” and “Commitments and Contingencies”, respectively.
GAAP Revenue to ENI Revenue for the years ended December 31, 2023, 2022 and 2021: Years ended December 31, ($ in millions) 2023 2022 2021 U.S.
GAAP revenue to ENI revenue for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, ($ in millions) 2024 2023 2022 U.S.
Includes $1.4 million related to the cost of seed and co-investment financing and $0.3 million related to the amortization of debt issuance costs for the year ended December 31, 2023. Includes $0.4 million related to the cost of seed and co-investment financing and $2.0 million related to the amortization of debt issuance costs for the year ended December 31, 2022.
Includes $0.4 million related to the cost of seed and co-investment financing and $2.0 million related to the amortization of debt issuance costs for the year ended December 31, 2022.
Our most significant uses of cash include share repurchases, repayment of third-party borrowings, third-party interest payments, tax payments, seed capital investments, dividends and compensation and general and administrative expenses.
Our most significant uses of cash include share repurchases, repayment of third-party borrowings and revolving credit facility, third-party interest payments, tax payments, seed capital investments, dividends and compensation and general and administrative expenses.
Our Affiliate equity and profit interest plans have been designed to ensure BSUS is never required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period. ii.
Our equity and profit interest plans have been designed to ensure Hold Co is never required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period. ii.
GAAP net income attributable to controlling interests $ 65.8 $ 100.6 $ 828.4 Adjustments to reflect the economic earnings of the Company: i. Non-cash key employee-owned equity and profit interest revaluations (0.1) (40.0) 32.9 ii. Goodwill impairment and amortization of acquired intangible assets — 0.1 0.1 iii. Capital transaction costs 0.3 5.2 1.8 iv.
GAAP net income attributable to controlling interests $ 85.0 $ 65.8 $ 100.6 Adjustments to reflect the economic earnings of the Company: i. Non-cash key employee-owned equity and profit interest revaluations 23.2 (0.1) (40.0) ii. Goodwill impairment and amortization of acquired intangible assets — — 0.1 iii. Capital transaction costs 0.3 0.3 5.2 iv.
ENI tax normalization (3) 2.4 3.3 (1.7) Tax effect of above adjustments, as applicable (4) (2.2) 9.0 3.5 Economic net income $ 75.7 $ 81.6 $ 118.3 (1) The net return on seed/co-investment (gains) losses and financings for the years ended December 31, 2023, 2022 and 2021 are shown in the following table.
ENI tax normalization (3) 3.1 2.4 3.3 Tax effect of above adjustments, as applicable (4) (6.1) (2.2) 9.0 Economic net income $ 105.8 $ 75.7 $ 81.6 (1) The net return on seed/co-investment (gains) losses and financings for the years ended December 31, 2024, 2023 and 2022 are shown in the following table.
The greatest driver of increases or decreases in this average fee rate is changes in the mix of our assets under management caused by net inflows or outflows in certain asset classes, dispositions, and disproportionate market movements.
The greatest driver of increases or decreases in the average fee rate are changes in the mix of our assets under management caused by net inflows or outflows in certain asset classes, and disproportionate market movements.
(4) Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests. The Affiliate key employee distribution ratio at each Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate.
(4) Acadian LLC key employee distributions represent the share of Acadian LLC profits after variable compensation that is attributable to key employee equity and profit interests holders, according to their ownership interests. Acadian LLC key employee distribution ratio is calculated as Acadian LLC key employee distributions divided by ENI operating earnings.
GAAP expenses in that they exclude amounts from consolidated Funds which are not attributable to our stockholders, revaluations of Affiliate key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, and certain other non-cash expenses. “Non-controlling interests” is a concept under U.S.
Expenses included within ENI differ from U.S. GAAP expenses in that they exclude amounts from consolidated Funds which are not attributable to our stockholders, revaluations of Acadian LLC key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, and certain other non-cash expenses. “Non-controlling interests” is a concept under U.S.
Non-cash key employee-owned equity and profit interest revaluations — (0.92) 0.41 ii. Goodwill impairment and amortization of acquired intangible assets — — — iii. Capital transaction costs 0.01 0.12 0.02 iv. Seed/Co-investment (gains) losses and financings (0.04) 0.01 (0.05) v. Tax benefit of goodwill and acquired intangibles deductions 0.04 0.03 0.01 vi. Discontinued operations and restructuring 0.21 0.03 (9.23) vii.
Non-cash key employee-owned equity and profit interest revaluations 0.61 — (0.92) ii. Goodwill impairment and amortization of acquired intangible assets — — — iii. Capital transaction costs 0.01 0.01 0.12 iv. Seed/Co-investment (gains) losses and financings (0.07) (0.04) 0.01 v. Tax benefit of goodwill and acquired intangibles deductions 0.04 0.04 0.03 vi. Discontinued operations and restructuring 0.03 0.21 0.03 vii.
We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $14.0 billion, or 14%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee.
We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed required returns. Approximately $20 billion, or 17%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee.
Share repurchases, revolving credit facility borrowing activity and third party borrowing activity were the drivers of the changes in financing activities year over year. We paid $(3.3) million for share repurchases in 2023 compared to $(103.2) million in 2022 and $(1,121.7) million in 2021.
Share repurchases, revolving credit facility borrowing activity and third party borrowing activity were the drivers of the changes in financing activities year over year. We paid $(96.7) million for share repurchases in 2024 compared to $(3.3) million in 2023 and $(103.2) million in 2022.
(5) Non-cash Affiliate key employee equity revaluations represent changes in the value of Affiliate equity and profit interests held by Affiliate key employees.
(5) Non-cash Acadian LLC key employee equity revaluations represent changes in the value of Acadian LLC equity and profit interests held by key employees.
ENI tax normalization 0.06 0.08 (0.02) Tax effect of above adjustments (0.05) 0.21 0.04 Economic net income per share $ 1.78 $ 1.89 $ 1.47 Limitations of Economic Net Income Economic net income is the key measure our management uses to evaluate the financial performance of, and make operational decisions for, our business.
ENI tax normalization 0.08 0.06 0.08 Tax effect of above adjustments (0.16) (0.05) 0.21 Economic net income per share $ 2.76 $ 1.78 $ 1.89 Limitations of Economic Net Income Economic net income is the key measure our management uses to evaluate the financial performance of, and make operational decisions for, our business.
Variable compensation and Affiliate key employee distributions are also segregated out of U.S. GAAP operating expense in order to align with the manner in which these items are contractually calculated at the Affiliate level. The following table reconciles U.S.
Variable compensation and Acadian LLC key employee distributions are also segregated out of U.S. GAAP operating expense in order to align with the manner in which these items are contractually calculated. The following table reconciles U.S.
Our cash management practices generally require that working capital be maintained at an appropriate level to meet short-term operational needs at both Acadian and BSUS.
Our cash management practices generally require that working capital be maintained at an appropriate level to meet short-term operational needs at both Acadian LLC and Hold Co.
Consolidated Funds’ expense increased $2.4 million, from $0.4 million for the year ended $0.4 million to $2.8 million for the year ended December 31, 2023. The increase in Consolidated Funds’ revenue and increase in Consolidated Funds’ expense is due to changes in the population of Consolidated Funds during the year ended December 31, 2023.
Consolidated Funds’ expense increased $2.4 million from $0.4 million for the year ended December 31, 2022 to $2.8 million for the year ended December 31, 2023. The increase in Consolidated Funds’ revenue and increase in Consolidated Funds’ expense is due to changes in the population of Consolidated Funds during the year ended December 31, 2023. 47 Key U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

18 edited+1 added−1 removed7 unchanged
Biggest changeAssuming the market change does not impact our relative performance, a 10% change in foreign currency exchange rates would have an approximate incremental $1 million impact from performance fees on our post-tax economic net income, given our current cost structure and operating model. 80 While the analysis above assumes that market changes occur in a uniform manner across the relevant portfolio, because of our declining fee rates for larger relationships and differences in our fee rates across asset classes, a change in the composition of our assets under management, in particular an increase in the proportion of our total assets under management attributable to strategies, clients or relationships with lower effective fee rates, could have a material negative impact on our overall weighted average fee rate.
Biggest changeWhile the analysis above assumes that market changes occur in a uniform manner across the relevant portfolio, because of our declining fee rates for larger relationships and differences in our fee rates across asset classes, a change in the composition of our assets under management, in particular an increase in the proportion of our total assets under management attributable to strategies, clients or relationships with lower effective fee rates, could have a material negative impact on our overall weighted average fee rate. 70 As is customary in the asset management industry, clients invest in particular strategies to gain exposure to certain asset classes, which exposes their investment to the benefits and risks of such asset classes.
Our model for assessing the impact of market risk on our results uses December 31, 2023 ending AUM and management fee rates as the basis for management fee revenue calculations. With respect to performance fee revenue, we assume that relative investment performance remains the same as it was on December 31, 2023.
Our model for assessing the impact of market risk on our results uses December 31, 2024 ending AUM and management fee rates as the basis for management fee revenue calculations. With respect to performance fee revenue, we assume that relative investment performance remains the same as it was on December 31, 2024.
Approximately $12 billion, or 14%, of our foreign currency denominated AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return that differs from the relative benchmark returns.
Approximately $14 billion, or 15%, of our foreign currency denominated AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return that differs from the relative benchmark returns.
The combined impact on our management fees and performance fees would have a direct impact on our earnings and result in an annual change of approximately $17 million in our post-tax economic net income, given our current cost structure and operating model.
The combined impact on our management fees and performance fees would have a direct impact on our earnings and result in an annual change of approximately $19 million in our post-tax economic net income, given our current cost structure and operating model.
A 10% increase or decrease in the value of our assets under management, if proportionally distributed over all of our investment strategies, asset classes and client relationships, would cause an annualized increase or decrease in our gross management fee revenues of approximately $39 million based on our current weighted average fee rate of approximately 38 basis points.
A 10% increase or decrease in the value of our assets under management, if proportionally distributed over all of our investment strategies, asset classes and client relationships, would cause an annualized increase or decrease in our gross management fee revenues of approximately $44.0 million based on our current weighted average fee rate of approximately 38 basis points.
Any reduction in the value of our assets under management would result in a reduction in our revenues. Interest Rate Risk We are exposed to interest rate risks primarily through borrowings under Acadian’s revolving credit facility. Interest on borrowings under the revolving credit facility is based upon variable interest rates.
Any reduction in the value of our assets under management would result in a reduction in our revenues. Interest Rate Risk We are exposed to interest rate risks primarily through borrowings under Acadian LLC’s revolving credit facility. Interest on borrowings under the revolving credit facility is based upon variable interest rates.
There was no balance drawn on our revolving credit facility as of December 31, 2023. We currently do not hedge against interest rate risk. As of December 31, 2023, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the twelve months ended December 31, 2023. 81
There was no balance drawn on our revolving credit facility as of December 31, 2024. We currently do not hedge against interest rate risk. As of December 31, 2024, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the twelve months ended December 31, 2024. 71
Approximately $14 billion, or 14%, of our AUM, are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return that differs from the relative benchmark returns.
Approximately $20 billion, or 17%, of our AUM, are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return that differs from the relative benchmark returns.
Approximately $13 billion, or 13%, of our equity markets-based AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return in excess of the relative benchmark returns.
Approximately $18 billion, or 16%, of our equity markets-based AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return in excess of the relative benchmark returns.
Impacts on our management and performance fees can be calculated based on the percentage of AUM constituting equity investments, or foreign currency denominated investments, respectively, multiplied by the relevant weighted average management fee and performance fee attributable to that asset class. • Our equity markets-based AUM includes U.S. equities (including small cap through large cap securities and substantially value or blended investment styles) and global/non-U.S. equities (including global, non-U.S. and emerging markets securities).
Impacts on our management and performance fees can be calculated based on the percentage of AUM constituting equity investments, or foreign currency denominated investments, respectively, multiplied by the relevant weighted average management fee and performance fee attributable to that asset class. • Our equity markets-based AUM includes U.S., global, non-U.S. and emerging markets equities (including small cap through large cap securities).
Assuming the market change does not impact our relative performance, a 10% increase or decrease in AUM would have a $5 million impact to our gross performance fees based on our trailing twelve month performance fees of $50 million as of December 31, 2023.
Assuming the market change does not impact our relative performance, a 10% increase or decrease in AUM would have a $7 million impact to our gross performance fees based on our trailing twelve-month performance fees of $71 million as of December 31, 2024.
A 10% increase or decrease in equity markets would cause our $101 billion of equity assets under management to increase or decrease by $10 billion, resulting in a change in annualized management fee revenue of $38 million and an annual change in post-tax economic net income of approximately $15 million, given our current cost structure, operating model, and weighted average equity fee rates of 38 basis points at the mix of strategies as of December 31, 2023.
A 10% increase or decrease in equity markets would cause our approximately $114 billion of long-only equity assets under management to increase or decrease by $11 billion, resulting in a change in annualized management fee revenue of $43 million and an annual change in post-tax economic net income of approximately $17 million, given our current cost structure, operating model, and weighted average equity fee rates of 38 basis points at the current mix of strategies as of December 31, 2024.
A 10% increase or decrease in foreign exchange rates against the U.S. dollar would cause our $83 billion of foreign currency denominated AUM to increase or decrease by $8 billion, resulting in a change in annualized management fee revenue of $33 million and an annual change in post-tax economic net income of $13 million, based on weighted average fees earned on our foreign currency denominated AUM of 40 basis points at the mix of strategies as of December 31, 2023.
A 10% increase or decrease in foreign exchange rates against the U.S. dollar would cause our $94 billion of foreign currency denominated AUM to increase or decrease by $9 billion, resulting in a change in annualized management fee revenue of $37 million and an annual change in post-tax economic net income of $14 million, based on weighted average fees earned on our foreign currency denominated AUM of 39 basis points at the mix of strategies as of December 31, 2024.
In modeling the impact of market risk, we assume that these operating expenses remain unchanged, but the resulting impact on profit driven by increases or decreases in revenue will change variable compensation and Acadian key employee distributions in line with their formulaic calculations. Any change in pre-tax profit is tax-affected to calculate profit after tax.
In modeling the impact of market risk, we assume that these operating expenses remain unchanged, but the resulting impact on profit driven by increases or decreases in revenue will change variable compensation and Acadian LLC key employee distributions in line with their formulaic calculations.
The impact that market changes have on performance fee eligible accounts varies due to high-water marks and other measurement hurdles which are not factored in this analysis. Changes in performance fee revenues could be significant in each period.
The impact that market changes have on performance fee eligible accounts varies due to high-water marks and other measurement hurdles which are not factored in this analysis. Changes in performance fee revenues could be significant in each period. The basis for the analysis is performance fees earned for the twelve months ended December 31, 2024.
Approximately 35% of our ENI cost structure is variable, representing variable compensation and Acadian key employee distributions. These variable expenses generally are linked in a formulaic manner to the profitability of the business after covering operating expenses, which include base compensation and benefits, general and administrative expenses, and depreciation and amortization.
These variable expenses generally are linked in a formulaic manner to the profitability of the business after covering operating expenses, which include base compensation and benefits, general and administrative expenses, and depreciation and amortization.
The basis for the analysis is performance fees earned for the twelve months ended December 31, 2023. 79 Our profit sharing economic structure, described more fully in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—The Economics of Our Business,” results in a sharing of market risk between us and our employees.
Our profit sharing economic structure, described more fully in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—The Economics of Our Business,” results in a sharing of market risk between us and our employees. Approximately 40% of our ENI cost structure is variable, representing variable compensation and Acadian LLC key employee distributions.
The value of our assets under management was $103.7 billion as of December 31, 2023.
Any change in pre-tax profit is tax-affected to calculate profit after tax. 69 The value of our assets under management was $117.3 billion as of December 31, 2024.
Removed
As is customary in the asset management industry, clients invest in particular strategies to gain exposure to certain asset classes, which exposes their investment to the benefits and risks of such asset classes.
Added
Assuming the market change does not impact our relative performance, a 10% change in foreign currency exchange rates would have an approximate incremental $2 million impact from performance fees on our post-tax economic net income, given our current cost structure and operating model.

Other AAMI 10-K year-over-year comparisons