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What changed in VIRTUS INVESTMENT PARTNERS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of VIRTUS INVESTMENT PARTNERS, INC.'s 2024 and 2025 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 2025 report.

+163 added−155 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in VIRTUS INVESTMENT PARTNERS, INC.'s 2025 10-K

163 paragraphs added · 155 removed · 146 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

40 edited+3 added−0 removed33 unchanged
Biggest changeWe monitor our managers' services by assessing their performance, style and consistency and the discipline with which they apply their investment process. 2 Table of Contents Our investment managers, their respective investment styles and assets under management as of December 31, 2024 were as follows: Investment Manager Location Investment Style Assets (in billions) AlphaSimplex Boston, MA Systematic Alternatives $ 6.1 Ceredex Value Advisors Orlando, FL Value Equity $ 5.2 Duff & Phelps Investment Management Chicago, IL Listed Real Assets $ 12.3 Kayne Anderson Rudnick Investment Management Los Angeles, CA Quality-Focused Equity $ 67.9 Newfleet Asset Management Hartford, CT Multi-Sector Fixed Income $ 15.3 NFJ Investment Group Dallas, TX Global Value Equity $ 5.8 Seix Investment Advisors Park Ridge, NJ Specialty Fixed Income $ 12.6 Silvant Capital Management Atlanta, GA Growth Equity $ 2.4 Stone Harbor Investment Partners New York, NY Emerging Markets Debt $ 5.4 Sustainable Growth Advisers Stamford, CT Global Growth Equity $ 24.9 Virtus Multi-Asset Hartford, CT Global Multi-Asset $ 0.1 Virtus Systematic San Diego, CA Global Equity $ 0.5 Westchester Capital Management Valhalla, NY Event-Driven Alternatives $ 2.7 Zevenbergen Capital Investments (1) Seattle, WA Disruptive Growth Equity $ 2.1 (1) Affiliated through ownership of a minority interest.
Biggest changeWe monitor our managers' services by assessing their performance, style and consistency and the discipline with which they apply their investment process. 1 Table of Contents Our investment managers, their respective investment styles and assets under management as of December 31, 2025 were as follows: Investment Manager Location Investment Style Assets (in billions) AlphaSimplex Boston, MA Systematic Alternatives $ 4.3 Ceredex Value Advisors Winter Park, FL Value Equity $ 3.4 Duff & Phelps Investment Management Chicago, IL Listed Real Assets $ 12.8 Kayne Anderson Rudnick Investment Management Los Angeles, CA Quality-Focused Equity $ 57.9 Newfleet Asset Management Hartford, CT Multi-Sector Fixed Income $ 16.9 NFJ Investment Group Dallas, TX Global Value Equity $ 5.1 Seix Investment Advisors Park Ridge, NJ Specialty Fixed Income $ 11.8 Silvant Capital Management Atlanta, GA Growth Equity $ 3.4 Stone Harbor Investment Partners New York, NY Emerging Markets Debt $ 6.5 Sustainable Growth Advisers Stamford, CT Global Growth Equity $ 18.0 Virtus Systematic San Diego, CA Systematic Global Equity $ 0.6 Westchester Capital Management Valhalla, NY Event-Driven Alternatives $ 2.8 Multi-Asset and Other Hartford, CT and New York, NY Various $ 0.5 Summary information regarding investment managers in which we have a minority interest, their respective investment styles and assets under management as of December 31, 2025 was as follows: Investment Manager Location Investment Style Assets (1) (in billions) Crescent Cove Advisors (2) San Francisco, CA Private Credit $ — Zevenbergen Capital Investments Seattle, WA Innovative Growth Equity $ 2.1 (1) Reflects assets under management in Virtus sponsored products and is included in our assets under management.
Our retail investment strategies are provided to individual investors through products consisting of: mutual funds registered pursuant to the Investment Company Act of 1940, as amended that include U.S. retail funds, exchange-traded funds ("ETFs"); Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S. retail funds and ETFs the "open-end funds"); closed-end funds (collectively with open-end funds, the "funds"); retail separate accounts sold through intermediaries and wealth advisory services to high- net-worth clients through our wealth management business.
Our investment strategies are provided to individual investors through products consisting of: mutual funds registered pursuant to the Investment Company Act of 1940, as amended, that include U.S. retail funds, exchange-traded funds ("ETFs"); Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S. retail funds and ETFs the "open-end funds"); closed-end funds (collectively with open-end funds, the "funds"); retail separate accounts sold through intermediaries; and wealth advisory services to high- net-worth clients through our wealth management business.
The percentages represent the range of management fees paid by the funds, from the highest to the lowest and includes the impact of breakpoints at which the fees for certain funds decrease as assets in such funds increase. Subadvisory fees paid on funds managed by unaffiliated subadvisers are not reflected.
The percentages represent the range of management fees paid by the funds, from the highest to the lowest and includes the impact of breakpoints at which the fees for certain funds decrease as assets in such funds increase. Subadvisory fees paid on funds managed by unaffiliated subadvisers are not reflected.
For intermediary sold retail separate accounts and institutional accounts, investment management fees are negotiated and based primarily on portfolio size and complexity, individual client requests and investment strategy capacity, as appropriate. In certain instances, institutional fees may include performance-related fees, generally earned if the returns on the portfolios exceed agreed upon periodic or cumulative return targets, primarily benchmark indices.
For intermediary sold retail separate accounts and institutional accounts, investment management fees are negotiated and based primarily on portfolio size and complexity, individual client requests and investment strategy capacity, as appropriate. In certain instances, institutional accounts may include performance-related fees, generally earned if the returns on the portfolios exceed agreed upon periodic or cumulative return targets, primarily benchmark indices.
Programs and practices - including those supporting workforce diversity, an inclusive culture, employee involvement in community activities and corporate philanthropy - are designed to help us deliver on our commitment to maintaining an organization that is diverse and inclusive for all employees. ▪ As an employer, we prohibit any form of discrimination and have no tolerance for harassment in any form or any behavior that may contribute to a hostile, intimidating, unwelcoming, and/or inaccessible work environment. ▪ Collaborative efforts with organizations, institutions, and referral sources support us in identifying diverse talent pools, increasing the diversity of backgrounds and experiences of potential candidates, and engaging with employees across the organization to raise the awareness of and advance our inclusion efforts. ▪ Community engagement is ingrained into our culture.
Programs and practices - including those supporting an inclusive culture, employee involvement in community activities and corporate philanthropy - are designed to help us deliver on our commitment to maintaining an organization that is diverse and inclusive for all employees. ▪ As an employer, we prohibit any form of discrimination and have no tolerance for harassment in any form or any behavior that may contribute to a hostile, intimidating, unwelcoming, and/or inaccessible work environment. ▪ Collaborative efforts with organizations, institutions, and referral sources support us in identifying diverse talent pools, increasing the diversity of backgrounds and experiences of potential candidates, and engaging with employees across the organization to raise the awareness of and advance our inclusion efforts. ▪ Community engagement is ingrained into our culture.
Our Advisers operating outside of the U.S. are also subject to regulation by various regulatory authorities and exchanges in the relevant jurisdiction such as directives and regulations in the European Union and other jurisdictions related to funds, including the Undertakings for the Collective Investment of Transferable Securities ("UCITS") Directive and the Alternative Investment Fund Managers Directive ("AIFMD"), with respect to depository functions, remuneration policies and sanctions and other matters.
Our investment managers operating outside of the U.S. are also subject to regulation by various regulatory authorities and exchanges in the relevant jurisdiction such as directives and regulations in the European Union and other jurisdictions related to funds, including the Undertakings for the Collective Investment of Transferable Securities ("UCITS") Directive and the Alternative Investment Fund Managers Directive ("AIFMD"), with respect to depository functions, remuneration policies and sanctions and other matters.
The Investment Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, compliance and disclosure obligations, and operational and recordkeeping requirements. Certain of our Advisers are also members of the NFA and are regulated by the CFTC with respect to the management of funds and other products that utilize futures, swaps, or other CFTC regulated instruments.
The Investment Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, compliance and disclosure obligations, and operational and recordkeeping requirements. Certain of our investment managers are also members of the NFA and are regulated by the CFTC with respect to the management of funds and other products that utilize futures, swaps, or other CFTC regulated instruments.
In the U.S., we are subject to regulation by the SEC, the U.S. Commodity Futures Trading Commission ("CFTC"), other federal and state agencies, as well as FINRA and the National Futures Association ("NFA"). Each of our Advisers is registered as an investment adviser with the SEC under the Investment Advisers Act.
In the U.S., we are subject to regulation by the SEC, the U.S. Commodity Futures Trading Commission ("CFTC"), other federal and state agencies, as well as FINRA and the National Futures Association ("NFA"). Each of our investment managers is registered as an investment adviser with the SEC under the Investment Advisers Act.
As part of our offerings, we: ▪ Regularly assess and benchmark our compensation and benefit practices and conduct internal and external pay comparisons to assist us in ensuring that employees are compensated fairly, equitably and competitively. ▪ Offer career enhancement opportunities to maximize each employee's potential and develop leaders throughout the organization. ▪ Provide an education assistance program with tuition reimbursement for employees who wish to continue their education to secure increased responsibility and growth within the organization and in their careers. ▪ Offer benefits that promote financial and personal security including comprehensive medical, dental, prescription, disability and life insurance coverages as well as an employee assistance program; company match to employees' 401(k) contributions; and an employee stock purchase plan. ▪ Provide wellness programs that include health screenings and wellness earned premium rebates, as well as paid time off for vacation, illness, bereavement, parental and family care leave, and volunteer activities.
As part of our offerings, we: ▪ Regularly assess and benchmark our compensation and benefit practices and conduct internal and external pay comparisons to assist us in ensuring that employees are compensated fairly, equitably and competitively. ▪ Offer career enhancement opportunities to maximize each employee's potential and develop leaders throughout the organization. ▪ Provide an education assistance program with tuition reimbursement for employees who wish to continue their education to secure increased responsibility and growth within the organization and in their careers. 8 Table of Contents ▪ Offer benefits that promote financial and personal security including comprehensive medical, dental, prescription, disability and life insurance coverages as well as an employee assistance program; company match to employees' 401(k) contributions; and an employee stock purchase plan. ▪ Provide wellness programs that include health screenings and wellness earned premium rebates, as well as paid time off for vacation, illness, bereavement, parental and family care leave, and volunteer activities.
Administration Fees We provide various administrative services to our U.S. retail funds, ETFs and certain closed-end funds. We earn fees based on each fund's average daily or weekly net assets.
Administration Fees We provide various administrative services to our U.S. retail funds, ETFs and closed-end funds. We earn fees based on each fund's average daily or weekly net assets.
Our ETFs are offered in a range of actively managed and index-based investment capabilities across multiple asset classes. Our global funds are offered in select investment strategies to non-U.S. investors. Summary information about our open-end funds by asset class as of December 31, 2024 was as follows: Total Assets (in millions) U.S.
Our ETFs are offered in a range of actively managed and index-based investment capabilities across multiple asset classes. Our global funds are offered in select investment strategies to non-U.S. investors. Summary information about our open-end funds by asset class as of December 31, 2025 was as follows: Total Assets (in millions) Asset Class U.S.
(3) Represents assets under management of institutional separate and commingled accounts including structured products. Open-End Funds Our U.S. retail funds are offered in a variety of asset classes, market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative).
(3) Represents assets under management of institutional separate and commingled accounts including structured products. 3 Table of Contents Open-End Funds Our U.S. retail funds are offered in a variety of asset classes, market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative).
Our Advisers manage registered and unregistered funds in the U.S. and other jurisdictions and are subject to the regulatory requirements in the jurisdiction where those funds are sponsored or offered. In the U.S., the open-end funds, ETFs and closed-end funds we offer are subject to the Investment Company Act of 1940, as amended (the "Investment Company Act").
Our investment managers manage registered and unregistered funds in the U.S. and other jurisdictions and are subject to the regulatory requirements in the jurisdiction where those funds are sponsored or offered. In the U.S., the open-end funds, ETFs and closed-end funds we offer are subject to the Investment Company Act of 1940, as amended (the "Investment Company Act").
Our value as a company derives from the talents an d diversity of all employees, and we are committed to creating and maintaining an environment where every employee is treated with dignity and respect. The collective sum of employees' backgrounds, unique skills, and life experiences creates an environment where they and the company can achieve the highest levels of performance.
Our value as a company derives from the talents of our employees, and we are committed to creating and maintaining an environment where every employee is treated with dignity and respect. The collective sum of employees' backgrounds, unique skills, and life experiences creates an environment where they and the company can achieve the highest levels of performance.
Our broker- 7 Table of Contents dealer is subject to, among others, the net capital rule of the Securities and Exchange Commission (the "SEC"), which is designed to enforce minimum standards regarding the general financial condition and liquidity of broker-dealers. Our Competition The financial services industry is a highly competitive global business.
Our broker-dealer is subject to, among others, the net capital rule of the Securities and Exchange Commission (the "SEC"), which is designed to enforce minimum standards regarding the general financial condition and liquidity of broker-dealers. Our Competition The financial services industry is a highly competitive global business.
Retail Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and ETFs. Our U.S. retail funds, ETFs and intermediary sold retail separate accounts are distributed through financial intermediaries.
Retail Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship 6 Table of Contents group and specialized teams for retirement and ETFs. Our U.S. retail funds, ETFs and intermediary sold retail separate accounts are distributed through financial intermediaries.
Due to the extensive laws and regulations to which we and our Advisers are subject, we devote substantial time, expense, and effort to remain current on, and to address, legal and regulatory compliance matters. We have established compliance programs to address regulatory compliance, and we have experienced legal and compliance professionals in place to address these requirements.
Due to the extensive laws and regulations to which we and our investment managers are subject, we devote substantial time, expense, and effort to remain current on, and to address, legal and regulatory compliance matters. We have established compliance programs to address regulatory compliance, and we have experienced legal and compliance professionals in place to address these requirements.
These laws and regulations grant the SEC broad administrative powers to address non-compliance with regulatory requirements. 8 Table of Contents We may be considered a fiduciary under the Employee Retirement Income Security Act, as amended (“ERISA”) and related regulations with respect to certain assets that we manage for benefit plans subject to ERISA.
These laws and regulations grant the SEC broad administrative powers to address non-compliance with regulatory requirements. We may be considered a fiduciary under the Employee Retirement Income Security Act, as amended (“ERISA”) and related regulations with respect to certain assets that we manage for benefit plans subject to ERISA.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. Other Fee Earning Assets Other fee earning assets include assets for which we provide services for an asset-based fee but do not serve as the investment adviser. Other fee earning assets are not included in our assets under management.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. 5 Table of Contents Other Fee Earning Assets Other fee earning assets include assets for which we provide services for an asset-based fee but do not serve as an investment adviser. Other fee earning assets are not included in our assets under management.
The Investment Company Act governs the operations of registered funds and imposes obligations on their advisers, including investment restrictions and other governance, compliance, reporting and fiduciary obligations with respect to the management of those funds.
The Investment Company Act governs the operations of registered funds and imposes 7 Table of Contents obligations on their advisers, including investment restrictions and other governance, compliance, reporting and fiduciary obligations with respect to the management of those funds.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. (3) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short and other strategies. 4 Table of Contents Closed-End Funds Our closed-end funds are offered in a variety of asset classes, each of which is traded on the New York Stock Exchange.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. (3) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies. Closed-End Funds Our closed-end funds, each of which is traded on the New York Stock Exchange, are offered in a variety of asset classes.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. (3) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short and other strategies. Retail Separate Accounts Intermediary-Sold Managed Accounts Intermediary-sold managed accounts are individual investment accounts that are contracted through intermediaries as part of investment programs offered to retail investors.
(2) Consists of multi-asset offerings not included in equity, fixed income and alternatives. (3) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies. Retail Separate Accounts Intermediary-Sold Managed Accounts Intermediary-sold managed accounts are individual investment accounts that are contracted through intermediaries 4 Table of Contents as part of investment programs offered to retail investors.
The Company and employees ha ve supported a wide 9 Table of Contents range of philanthropic activities that help to enrich and sustain the communities in which we have a business presence.
The Company and employees ha ve supported a wide range of philanthropic activities that help to enrich and sustain the communities in which we have a business presence.
(2) Consists of managed futures, event-drive, real estate securities, infrastructure, long/short and other strategies. 5 Table of Contents Institutional Accounts Our institutional clients include corporations, multi-employer retirement funds, public employee retirement systems, foundations and endowments. We also provide subadvisory services to unaffiliated mutual funds. In addition, we act as collateral manager for collateralized loan obligations ("CLOs").
(2) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies. Institutional Accounts Our institutional clients include corporations, multi-employer retirement funds, public employee retirement systems, foundations and endowments. We also provide subadvisory services to unaffiliated mutual funds. In addition, we act as collateral manager for collateralized loan obligations ("CLOs").
Human Capital As of December 31, 2024, we employed 805 employees and operated offices throughout the U.S., and in the U.K. and Singapore. We strive to attract and retain talented individuals by creating an environment of excellence and opportunity that serves as a foundation for all employees to reach their potential and make meaningful contributions to the organization.
Human Capital As of December 31, 2025, we employe d 801 emp loyees and operated offices throughout the U.S., and in the U.K. and Singapore. We strive to attract and retain talented individuals by creating an environment of excellence and opportunity that serves as a foundation for all employees to reach their potential and make meaningful contributions to the organization.
Summary information about our closed-end funds as of December 31, 2024 was as follows: Asset Class Total Assets (in millions) Management Fee Range % (1) Multi-Asset (2) $ 7,309 1.50 - 0.50 Fixed Income 1,375 1.00 - 0.50 Equity 911 1.25 Alternatives (3) 630 1.00 Total Closed-End Funds $ 10,225 (1) Represents management fees earned as a percentage of average daily net assets.
Summary information about our closed-end funds by asset class as of December 31, 2025 was as follows: (in millions) Asset Class Total Assets Management Fee Range % (1) Multi-Asset (2) $ 7,556 1.50 - 0.50 Fixed Income 1,445 1.00 - 0.50 Equity 956 1.25 Alternatives (3) 678 1.00 Total Closed-End Funds $ 10,635 (1) Represents management fees earned as a percentage of average daily net assets.
Assets Under Management by Product as of December 31, 2024 Products (in billions) Open-end funds (1) $ 56.1 Closed-end funds 10.2 Retail separate accounts (2) 49.5 Institutional accounts (3) 59.2 Total Assets Under Management $ 175.0 (1) Represents assets under management of U.S. retail funds, global funds and exchange traded funds. (2) Includes investment models provided to managed account sponsors.
Assets Under Management by Product as of December 31, 2025 Products (in billions) Open-end funds (1) $ 52.8 Closed-end funds 10.6 Retail separate accounts (2) 43.1 Institutional accounts (3) 53.0 Total Assets Under Management $ 159.5 (1) Represents assets under management of U.S. retail funds, ETFs and global funds. (2) Includes investment models provided to managed account sponsors.
Our wealth management business is marketed directly to individual clients by financial advisory teams at our Advisers. Institutional Our institutional distribution resources include affiliate-specific institutional sales teams primarily focused on the U.S. market, supported by shared consultant relations and U.S. and non-U.S. institutional sales distribution. Our institutional products are marketed through relationships with consultants as well as directly to clients.
Our wealth management business is marketed directly to individual clients by financial advisory teams at our investment managers. Institutional Our institutional distribution resources include manager-specific institutional sales teams primarily focused on the U.S. market, supported by shared consultant relations and U.S. and non-U.S. institutional sales distribution.
Our Investment Management, Administration and Shareholder Services Our investment management, administration and shareholder service fees earned in each of the last three years were as follows: Years Ended December 31, (in thousands) 2024 2023 2022 Open-end funds $ 317,990 $ 305,238 $ 335,585 Closed-end funds 59,184 58,136 63,841 Retail separate accounts 209,467 171,357 171,509 Institutional accounts 187,189 176,744 157,404 Total investment management fees 773,830 711,475 728,339 Administration fees 53,257 52,858 61,344 Shareholder service fees 21,037 20,999 24,518 Total $ 848,124 $ 785,332 $ 814,201 6 Table of Contents Investment Management Fees We provide investment management services through our investment managers (each an "Adviser") pursuant to investment management agreements.
Our Investment Management, Administration and Shareholder Services Our investment management, administration and shareholder service fees earned in each of the last three years were as follows: (in thousands) Years Ended December 31, Product 2025 2024 2023 Open-end funds $ 286,610 $ 317,990 $ 305,238 Closed-end funds 61,305 59,184 58,136 Retail separate accounts 209,538 209,467 171,357 Institutional accounts 167,586 187,189 176,744 Total investment management fees 725,039 773,830 711,475 Administration fees 53,829 53,257 52,858 Shareholder service fees 19,446 21,037 20,999 Total $ 798,314 $ 848,124 $ 785,332 Investment Management Fees We provide investment management services pursuant to investment management agreements through our investment advisers (each an "Adviser").
At December 31, 2024, we had $2.3 billion of other fee earning assets.
At December 31, 2025, we had $1.8 billion of other fee earning assets.
We also use the investment management services of select unaffiliated managers to sub-advise certain of our open- and closed-end funds.
We also use the investment management services of select unaffiliated managers for certain of our funds.
We have offerings in various asset classes (equity, fixed income, multi-asset and alternatives), geographies (domestic, global, international and emerging), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative). Our institutional strategies are offered to a variety of institutional clients through institutional separate and commingled accounts, including subadvisory services to other investment advisers.
We have offerings in various asset classes (equity, fixed income, multi-asset and alternatives), geographies (domestic, global, international and emerging), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative).
Our earnings are primarily from asset-based fees charged for services relating to these various products, primarily investment management, but certain products include fund administration, distribution and shareholder services.
Our Investment Products Our assets under management are in open-end funds, closed-end funds, retail separate accounts and institutional accounts. Our earnings are primarily from asset-based fees charged for services relating to these various products, including investment management, fund administration, distribution and shareholder services.
We target key market segments, including foundations and endowments, corporations, public and private pension plans, sovereign wealth funds and subadvisory relationships. Our Broker-Dealer Services We operate a broker-dealer that is registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is a member of the Financial Industry Regulatory Authority ("FINRA").
Our Broker-Dealer Services We operate a broker-dealer that is registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is a member of the Financial Industry Regulatory Authority ("FINRA").
The following table summarizes our retail separate accounts by asset class as of December 31, 2024: Total Assets (in millions) Intermediary-Sold Managed Accounts Wealth Management Accounts Equity Domestic equity $ 38,558 $ 515 International equity 77 — Global equity 443 2 Specialty equity — 38 Fixed Income Leveraged finance 1,394 — Investment grade 200 420 Emerging markets debt 16 — Multi-Asset (1) 130 7,742 Alternatives (2) 1 — Total Retail Separate Accounts $ 40,819 $ 8,717 (1) Consists of multi-asset offerings not included in equity, fixed income and alternatives.
The following table summarizes our retail separate accounts by asset class as of December 31, 2025: Total Assets (in millions) Asset Class Intermediary-Sold Managed Accounts Wealth Management Accounts Equity Domestic equity $ 32,342 $ 446 International equity 9 — Global equity 252 1 Specialty equity 30 — Fixed Income Leveraged finance 1,337 — Investment grade 154 425 Emerging markets debt 18 — Multi-sector 3 — Multi-Asset (1) 122 7,951 Alternatives (2) 1 — Total Retail Separate Accounts $ 34,268 $ 8,823 (1) Consists of multi-asset offerings not included in equity, fixed income and alternatives.
The following table summarizes our institutional accounts by asset class as of December 31, 2024: Total Assets (in millions) Separate Accounts Commingled Accounts Equity Domestic equity $ 21,336 $ 446 International equity 1,025 283 Global equity 8,720 247 Fixed Income Leveraged finance 1,105 3,083 Multi-sector 1,165 — Emerging markets debt 4,498 — Investment grade 8,628 — Alternatives (1) 7,171 1,054 Multi-Asset (2) 406 — Total Institutional Accounts $ 54,054 $ 5,113 (1) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short and other strategies.
The following table summarizes our institutional accounts by asset class as of December 31, 2025: Total Assets (in millions) Asset Class Separate Accounts Commingled Accounts Equity Domestic equity $ 18,769 $ 510 International equity 1,175 329 Global equity 4,094 203 Fixed Income Leveraged finance 832 2,986 Multi-sector 1,318 — Emerging markets debt 5,613 — Investment grade 8,527 — Alternatives (1) 6,834 1,256 Multi-Asset (2) 562 — Total Institutional Accounts $ 47,724 $ 5,284 (1) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies.
Sales and marketing activities of investment management services are also subject to regulation by non-U.S. authorities in the jurisdictions in which investment management products and services are offered. The ability to transact business in these jurisdictions and to conduct cross-border activities, is subject to the continuing availability of regulatory authorizations and exemptions.
We have distribution teams that operate in the United Kingdom and Singapore and are subject to regulation by the Financial Conduct Authority and Monetary Authority of Singapore, respectively. Sales and marketing activities of investment management services are also subject to regulation by non-U.S. authorities in the jurisdictions in which investment management products and services are offered.
Retail Funds ETFs Global Funds Management Fee Range % (1) Equity Domestic equity $ 19,692 $ 161 $ 607 2.50 - 0.29 International equity 2,558 12 4 2.50 - 0.49 Specialty equity 2,875 35 26 1.80 - 0.68 Global equity 363 — 1,858 1.85 - 0.55 Fixed Income Leveraged finance 2,683 301 46 1.70 - 0.38 Multi-sector 6,291 231 2,208 1.85 - 0.21 Hybrid 1,350 1,407 0.80 - 0.57 Emerging markets debt 260 12 383 1.60 - 0.55 Investment grade 624 16 0.50 - 0.17 Multi-Asset (2) 5,535 52 — 0.75 - 0.45 Alternatives (3) 5,583 824 76 1.65 - 0.45 Total Open-End Funds $ 47,814 $ 3,051 $ 5,208 (1) Represents management fees earned as a percentage of average daily net assets.
Retail Funds ETFs Global Funds Management Fee Range % (1) Equity Domestic equity $ 15,109 $ 295 $ 370 2.15 - 0.25 International equity 2,507 31 4 1.85 - 0.49 Specialty equity 2,802 82 42 1.80 - 0.68 Global equity 235 — 1,991 1.85 - 0.55 Fixed Income Leveraged finance 2,505 382 15 1.70 - 0.38 Multi-sector 6,642 364 2,453 1.85 - 0.21 Hybrid 1,431 2,040 — 0.80 - 0.57 Emerging markets debt 321 15 321 1.65 - 0.55 Investment grade 715 17 — 0.50 - 0.17 Multi-Asset (2) 5,382 44 — 0.75 - 0.45 Alternatives (3) 4,612 1,969 63 1.65 - 0.25 Total Open-End Funds $ 42,261 $ 5,239 $ 5,259 (1) Represents management fees earned as a percentage of average daily net assets.
Summary information regarding our select unaffiliated subadvisers, their respective investment styles and assets under management as of December 31, 2024 was as follows: Unaffiliated Subadviser Investment Style Assets (in billions) Voya Investment Management Income & Growth and Convertible $ 9.4 Other Various $ 2.3 3 Table of Contents Our Investment Products Our assets under management are in open-end funds, closed-end funds, retail separate accounts and institutional accounts.
(2) Acquired a 35% minority interest on December 15, 2025 2 Table of Contents Summary information regarding our select unaffiliated subadvisers, their respective investment styles and assets under management as of December 31, 2025 was as follows: Unaffiliated Subadviser Investment Style Assets (1) (in billions) Infrastructure Capital Advisors Infrastructure Fixed Income and Equity $ 2.5 Reaves Asset Management Utilities $ 1.4 Voya Investment Management Income & Growth and Convertible $ 9.5 (1) Reflects assets under management in Virtus sponsored products and is included in our assets under management.
We have distribution teams that operate in the United Kingdom and Singapore and are subject to regulation by the Financial Conduct Authority and Monetary Authority of Singapore, respectively. Virtus Fund Services, LLC is an SEC-registered transfer agent and is subject to the Exchange Act and the rules and regulations promulgated thereunder.
The ability to transact business in these jurisdictions and to conduct cross-border activities, is subject to the continuing availability of regulatory authorizations and exemptions. Virtus Fund Services, LLC is an SEC-registered transfer agent and is subject to the Exchange Act and the rules and regulations promulgated thereunder.
Added
Our investment strategies are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products.
Added
Assets under management as of December 31, 2025 of Crescent Cove Advisors and Zevenbergen Capital Investments, respectively, for which we do not serve as the investment adviser, but share in our portion of the earnings through our minority ownership was $0.9 billion and $2.4 billion, respectively. These amounts are not included in our assets under management.
Added
Our institutional products are marketed through relationships with consultants as well as directly to clients. We target key market segments, including foundations and endowments, corporations, public and private pension plans, sovereign wealth funds and subadvisory relationships.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

20 edited+3 added−2 removed74 unchanged
Biggest changeAs our insurance policies come up for renewal, we may need to assume higher deductibles or pay higher premiums, which could have an adverse impact on our results of operations and financial condition. 15 Table of Contents We have goodwill and other intangible assets on our balance sheet that could become impaired, which could impact our results of operations and financial condition.
Biggest changeCertain insurance coverage may not be available or may be prohibitively expensive in future periods. As our insurance policies come up for renewal, we may need to assume higher deductibles or pay higher premiums, which could have an adverse impact on our results of operations and financial condition.
LEGAL AND REGULATORY RISKS We are subject to an extensive and complex regulatory environment and changes in regulations or failure to comply with them could adversely affect our revenues and profitability. The investment management industry in which we operate is subject to extensive and frequently changing regulation.
LEGAL AND REGULATORY RISKS We are subject to an extensive and complex regulatory environment and changes in regulations or failure to comply with them could adversely affect our revenues and profitability. The investment management industry in which we operate is subject to extensive and frequently changing regulations.
The sophistication of cyber threats continues to increase, including through the use of "ransomware" and phishing attacks, and our controls and the preventative actions we take to reduce the risk of cyber incidents and protect our information systems may be insufficient to detect or prevent unauthorized access, cyber-attacks or other security breaches to our systems or those of third parties with whom we do business.
The sophistication of cyber threats continues to increase, including through the use of "ransomware," phishing attacks and artificial intelligence, and our controls and the preventative actions we take to reduce the risk of cyber incidents and protect our information systems may be insufficient to detect or prevent unauthorized access, cyber-attacks or other security breaches to our systems or those of third parties with whom we do business.
If our clients, including our fund boards, were to view our fees as being inappropriately high 12 Table of Contents relative to the market or the returns generated by our investment products, we may choose, or be required, to reduce our fee levels, or we may experience significant redemptions in our assets under management, which could have an adverse impact on our results of operations and financial condition.
If our clients, including our fund boards, were to view our fees as being inappropriately high relative to the market or the returns generated by our investment products, we may choose, or be required, to reduce our fee levels, or we may experience significant redemptions in our assets under management, which could have an adverse impact on our results of operations and financial condition.
RISKS RELATED TO OUR INDUSTRY, BUSINESS AND OPERATIONS We earn substantially all of our revenues based on assets under management that fluctuate based on many factors, and any reduction would negatively impact our revenues and profitability. The majority of our revenues are generated from asset-based fees from investment management products and services to individuals and institutions.
RISKS RELATED TO OUR INDUSTRY, BUSINESS AND OPERATIONS We earn substantially all of our revenues based on assets under management that fluctuate based on many factors, and any reduction would negatively impact our revenues and profitability. The majority of our revenues are generated from asset-based fees from investment management products and 9 Table of Contents services to individuals and institutions.
Any of these conditions could have an adverse impact on our business and profitability. 13 Table of Contents We and certain of our third-party service providers receive and store personal information as well as non-public business information. Although we and our third-party service providers take precautions, we may still be vulnerable to hacking or other unauthorized use.
Any of these conditions could have an adverse impact on our business and profitability. We and certain of our third-party service providers receive and store personal information as well as non-public business information. Although we and our third-party service providers take precautions, we may still be vulnerable to hacking or other unauthorized use.
Our technology systems, and those of third-party service providers, are critical to our operations. The ability to consistently and reliably obtain accurate securities pricing information, process client portfolio and fund shareholder transactions, and provide reports and other services to clients is an essential part of our business.
Our technology systems, and those of third-party service providers, are critical to our operations. The ability to 12 Table of Contents consistently and reliably obtain accurate securities pricing information, process client portfolio and fund shareholder transactions, and provide reports and other services to clients is an essential part of our business.
Declines in our stock price would result in deterioration of the value of equity awards granted, thus lessening the effectiveness of using stock-based awards to retain key employees. In certain circumstances, the departure of key investment personnel could cause higher redemption rates in certain strategies or the loss of certain client accounts.
Declines in our stock price would result in deterioration of the value of equity awards granted, thus lessening the effectiveness of using stock-based awards to retain key employees. 11 Table of Contents In certain circumstances, the departure of key investment personnel could cause higher redemption rates in certain strategies or the loss of certain client accounts.
From time to time, we and/or our sponsored funds may be named as defendants or co-defendants in lawsuits or be involved in disputes that involve the threat of lawsuits seeking substantial damages. We and/or our sponsored funds are also involved from time to time in governmental and self-regulatory 14 Table of Contents organization investigations and proceedings. (See Item 3.
From time to time, we and/or our sponsored funds may be named as defendants or co-defendants in lawsuits or be involved in disputes that involve the threat of lawsuits seeking substantial damages. We and/or our sponsored funds are also involved from time to time in governmental and self-regulatory organization investigations and proceedings. (See Item 3.
Sales and redemptions of our investment strategies can be 10 Table of Contents affected by investment performance relative to established benchmarks or other competing investment strategies. Negative absolute performance as a result of price declines in securities may also negatively impact our sales and redemptions and the value of our assets under management.
Sales and redemptions of our investment strategies can be affected by investment performance relative to established benchmarks or other competing investment strategies. Negative absolute performance as a result of price declines in securities may also negatively impact our sales and redemptions and the value of our assets under management.
If an assignment were to occur, we cannot be certain that the funds' boards and shareholders would approve a new investment management agreement. In addition, investment management agreements for the separate accounts we manage may not be assigned without the consent of the client.
If an assignment were to occur, we cannot be certain that the funds' boards and shareholders would approve a new investment management agreement. In addition, investment management agreements for the separate accounts we manage may not be 10 Table of Contents assigned without the consent of the client.
We are subject to regulation by the SEC, other federal and state agencies, certain international regulators, as well as FINRA and other self-regulatory organizations. Each of our investment management subsidiaries and unaffiliated subadvisers is registered with the SEC under the Investment Advisers Act.
We are subject to regulation by the SEC, other federal and state agencies, certain international regulators, as well as FINRA and other self-regulatory organizations. Each of our investment management subsidiaries and unaffiliated 13 Table of Contents subadvisers is registered with the SEC under the Investment Advisers Act.
Although we have generated sufficient cash in the past, we may not do so in the future. We had unused capacity under our revolving credit facility of $175.0 million as of December 31, 2024. Our ability to access capital markets efficiently depends on a number of factors, including the state of credit and equity markets, interest rates and credit spreads.
Although we have generated sufficient cash in the past, we may not do so in the future. We had unused capacity under our revolving credit facility of $250.0 million as of December 31, 2025. Our ability to access capital markets efficiently depends on a number of factors, including the state of credit and equity markets, interest rates and credit spreads.
We use capital to incubate new investment strategies, introduce new products or to enhance distribution access of existing products. At December 31, 2024, we had $282.4 million of such investments, comprising $171.3 million of marketable securities and $111.1 million of net investments in CLOs.
We use capital to incubate new investment strategies, introduce new products or to enhance distribution access of existing products. At December 31, 2025, we had $305.3 million of such investments, comprising $189.4 million of marketable securities and $115.9 million of net investments in CLOs.
At December 31, 2024, we had $236.1 million in debt outstanding, excluding the notes payable of our CIP for which risk of loss to the Company is limited to our $111.1 million investment in such products. (See Note 19 of our consolidated financial statements for additional information on the notes payable of the CIP).
At December 31, 2025, we had $399.0 million in debt outstanding, excluding the notes payable of our CIP for which risk of loss to the Company is limited to our $115.9 million investment in such products. (See Note 17 of our consolidated financial statements for additional information on the notes payable of the CIP).
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK We have corporate governance provisions that may make an acquisition of us more difficult. Certain provisions in our certificate of incorporation and bylaws and Delaware law could discourage, delay or prevent a merger, acquisition or other change in control even if certain shareholders may consider a change of control to be beneficial.
Certain provisions in our certificate of incorporation and bylaws and Delaware law could discourage, delay or prevent a merger, acquisition or other change in control even if certain shareholders may consider a change of control to be beneficial.
Any changes to tax laws could impact our estimated effective tax rate and tax expense and could result in adjustments to our treatment of deferred taxes, including the realization or value thereof, which could have an adverse effect on our business, financial condition and results of operations.
Any changes to tax laws could impact our estimated effective tax rate and tax expense and could result in adjustments to our treatment of deferred taxes, including the realization or value thereof, which could have an adverse effect on our business, financial condition and results of operations. 14 Table of Contents RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK We have corporate governance provisions that may make an acquisition of us more difficult.
The occurrence of any of these risks could have an adverse impact on our business and profitability. We have significant capital invested in marketable securities, which exposes us to earnings volatility as the value of these investments fluctuate, as well as risk of capital loss.
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 business and profitability. We have significant capital invested in marketable securities, which exposes us to earnings volatility as the value of these investments fluctuate, as well as risk of capital loss.
As of December 31, 2024, the Company had $775.3 million in intangible assets and goodwill. We cannot be certain that we will realize the value of such intangible assets. Our intangible assets may become impaired as a result of a variety of factors which could adversely affect our financial condition and results of operations. Item 1B. Unresolved Staff Comments. None.
Our intangible assets may become impaired as a result of a variety of factors which could adversely affect our financial condition and results of operations. Item 1B. Unresolved Staff Comments. None.
At December 31, 2024, we had $236.1 million of total debt outstanding under its credit agreement, excluding debt of consolidated investment products ("CIP"), and had no borrowings outstanding under our $175.0 million revolving credit facility.
The indebtedness we incur can take many forms including, but not limited to, term loans or revolving lines of credit that customarily contain covenants. At December 31, 2025, we had $399.0 million of total debt outstanding under our credit agreement, excluding debt of consolidated investment products ("CIP"), and had no borrowings outstanding under our $250.0 million revolving credit facility.
Removed
The indebtedness we incur can take many forms including, but not limited to, term loans or revolving lines of 11 Table of Contents credit that customarily contain covenants.
Added
The occurrence of any of these risks could have an adverse impact on our business and profitability. The development and use of various technologies based on machine learning and artificial intelligence (AI) is expanding rapidly in our industry.
Removed
Certain insurance coverage may not be available or may be prohibitively expensive in future periods.
Added
The use of AI technologies by us, or our third-party service providers could result in new and expanded risks including but not limited to operational, legal and regulatory risk.
Added
We have goodwill and other intangible assets on our balance sheet that could become impaired, which could impact our results of operations and financial condition. As of December 31, 2025, the Company had $724.5 million in intangible assets and goodwill. We cannot be certain that we will realize the value of such intangible assets.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, from time to time, our Chief Technology Officer and Chief Information Security Officer (“CISO”) brief the Board on the cyber-threat landscape, our information security program and other related information technology topics.
Biggest changeIn addition, from time to time, our Chief Technology Officer and CISO brief the Board on the cyber-threat landscape, our information security program and other related information technology topics. The Company maintains an Enterprise Risk Committee (“ERC”), comprising the Company executives who lead day-to-day risk management, and whose efforts are supplemented by specific risk-related committees or teams.
We have implemented various technology products and associated procedures, including, among others, the following: ▪ Firewall protection, operating system security patches, and multi-factor authentication; ▪ System security agent software, which includes encryption, malware protection, patches and virus definitions; ▪ Monitoring of computer systems for unauthorized use of or access to sensitive information; ▪ Web content filtering; ▪ Web and network vulnerability assessments and penetration testing; ▪ Monitoring emerging laws and regulations related to data protection and information security; ▪ Hosting in-house production systems in geographically dispersed locations that are backed up to alternate locations; and ▪ Employee cybersecurity awareness training that includes regular phishing simulations.
We have implemented various technology products and associated procedures, including, among others, the following: ▪ Firewall protection, operating system security patches, and multi-factor authentication; ▪ System security agent software, which includes encryption, malware protection, patches and virus definitions; 15 Table of Contents ▪ Monitoring of computer systems for unauthorized use of or access to sensitive information; ▪ Web content filtering; ▪ Web and network vulnerability assessments and penetration testing; ▪ Monitoring emerging laws and regulations related to data protection and information security; ▪ Hosting in-house production systems in geographically dispersed locations that are backed up to alternate locations; and ▪ Employee cybersecurity awareness training that includes regular phishing simulations.
“Risk Factors—Risks Related to our Industry, Business and Operations— We and our third-party service providers 16 Table of Contents rely on numerous technology systems and any business interruption, security breach, or system failure could negatively impact our business and profitability ” of this Annual Report on Form 10-K, which should be read in conjunction with the information in this section.
“Risk Factors—Risks Related to our Industry, Business and Operations— We and our third-party service providers rely on numerous technology systems and any business interruption, security breach, or system failure could negatively impact our business and profitability ” of this Annual Report on Form 10-K, which should be read in conjunction with the information in this section.
Our cybersecurity systems, controls and processes are overseen by our cybersecurity information technology team which is managed by our CISO.
Our cybersecurity systems, controls and processes are overseen by our cybersecurity information technology team which is managed by our Chief Information Security Officer ("CISO").
The Company maintains an Enterprise Risk Committee (“ERC”), comprising the Company executives who lead day-to-day risk management, and whose efforts are supplemented by specific risk-related committees or teams. The ERC is a cross-functional committee that focuses on identifying and managing operational risk throughout the organization, including cybersecurity threats.
The ERC is a cross-functional committee that focuses on identifying and managing operational risk throughout the organization, including cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. We lease our principal offices, which are located at One Financial Plaza, Hartford, CT 06103. In addition, we lease office space in California, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Jersey, New York, Texas, Singapore and the U.K.
Biggest changeItem 2. Properties. We lease our principal offices, which are located at One Financial Plaza, Hartford, CT 06103. In addition, we lease office space in California, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Jersey, New York, Texas, Singapore and the U.K. 16 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The information set forth in response to Item 103 of Regulation S-K under "Legal Proceedings" is incorporated by reference from Part II, Item 8. "Financial Statements and Supplementary Data," Note 12 "Commitments and Contingencies" of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 17 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings. The information set forth in response to Item 103 of Regulation S-K under "Legal Proceedings" is incorporated by reference from Part II, Item 8. "Financial Statements and Supplementary Data," Note 11 "Commitments and Contingencies" of this Annual Report on Form 10-K.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(formerly BrightSphere Investment Group Inc.)*, Cohen & Steers, Inc., Federated Hermes, Inc., Franklin Resources, Inc., Invesco Ltd., Janus Henderson Group Plc*, T. Rowe Price Group, Inc. and Victory Capital Holdings, Inc.* *Companies excluded from the since inception TSR table due to lack of comparative performance periods. 19 Table of Contents Item 6. Reserved
Biggest changeRowe Price Group, Inc. and Victory Capital Holdings, Inc.* *Companies excluded from the since inception TSR table due to lack of comparative performance periods. Item 6. Reserved
The graphs assume an equal investment in our common stock, the S&P 500 and the Financial Peer Group on December 31, 2019 (five-year TSR) and January 2, 2009 (since inception TSR), respectively, reflect reinvested dividends, and are weighted on a market capitalization basis. Each reported data point below represents the last trading day of each calendar year.
The graphs assume an equal investment in our common stock, the S&P 500 and the Financial Peer Group on December 31, 2020 (five-year TSR) and January 2, 2009 (since inception TSR), respectively, reflect reinvested dividends, and are weighted on a market capitalization basis. Each reported data point below represents the last trading day of each calendar year.
Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fourth quarter of fiscal 2024. Shares of our common stock purchased by participants in our Employee Stock Purchase Plan were delivered to participant accounts via open market purchases at fair value by the third-party administrator under the plan.
Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fourth quarter of fiscal 2025. Shares of our common stock purchased by participants in our Employee Stock Purchase Plan were delivered to participant accounts via open market purchases at fair value by the third-party administrator under the plan.
In making decisions regarding our quarterly dividend, we consider general economic and business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions and obligations, legal, tax, regulatory and other restrictions that may have implications on the payment of distributions by us to our common shareholders or by our subsidiaries to us, and such other factors as we may deem relevant.
In making determinations regarding our quarterly dividend, we consider general economic and business conditions and our strategic plans and prospects, business and investment opportunities, financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions and obligations, as well as legal, tax, regulatory and other restrictions that may have implications on the payment of dividends by us to our common shareholders or by our subsidiaries to us, and such other factors as we may deem relevant.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the New York Stock Exchange under the trading symbol "VRTS." As of February 7, 2025, we had 6,967,534 shares of common stock outstanding that were held by approximately 38,000 holders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the New York Stock Exchange under the trading symbol "VRTS." As of February 11, 2026, we had 6,695,515 shares of common stock outstanding that were held by approximately 36,000 holders of record.
The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance. 18 Table of Contents Five-year TSR Among Virtus, S&P 500 Index and Financial Peer Group Since Inception TSR Among Virtus, S&P 500 Index and Financial Peer Group Financial Peer Group: Affiliated Managers Group, Inc., AllianceBernstein Holding L.P., Artisan Partners Asset Management Inc.*, Acadian Asset Management Inc.
The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance. 18 Table of Contents Five-year TSR Among Virtus, S&P 500 Index and Financial Peer Group Since Inception TSR Among Virtus, S&P 500 Index and Financial Peer Group Financial Peer Group: Acadian Asset Management Inc.*, Affiliated Managers Group, Inc., AllianceBernstein Holding L.P., Artisan Partners Asset Management Inc.*, Cohen & Steers, Inc., Federated Hermes, Inc., Franklin Resources, Inc., Invesco Ltd., Janus Henderson Group Plc*, T.
Issuer Purchases of Equity Securities An aggregate of 5,680,045 shares of our common stock have been authorized to be repurchased under a share repurchase program, initially approved in 2010 by our Board of Directors. As of December 31, 2024, 403,312 shares remained available for repurchase.
Issuer Purchases of Equity Securities An aggregate of 6,430,045 shares of our common stock have been authorized to be repurchased under a share repurchase program, initially approved by our Board of Directors in 2010. As of December 31, 2025, 805,948 shares remained available for repurchase.
We cannot provide any assurances that any distributions, whether quarterly or otherwise, will continue to be paid in the future. On February 26, 2025, the Company declared a quarterly cash dividend of $2.25 per common share to be paid on May 14, 2025 to shareholders of record at the close of business on April 30, 2025.
We cannot provide any assurances that any dividends will continue to be paid in the future. On February 25, 2026, the Company declared a quarterly cash dividend of $2.40 per common share to be paid on May 13, 2026 to shareholders of record at the close of business on April 30, 2026.
The following table sets forth information regarding our share repurchases in each month during the quarter ended December 31, 2024: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 1—31, 2024 — $ — — 455,488 November 1—30, 2024 27,525 $ 239.20 27,525 427,963 December 1—31, 2024 24,651 $ 239.92 24,651 403,312 Total 52,176 52,176 (1) Average price paid per share is calculated on a settlement basis and excludes commissions and taxes.
The following table sets forth information regarding our share repurchases in each month during the quarter ended December 31, 2025: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 1—31, 2025 — $ — — 866,240 November 1—30, 2025 — $ — — 866,240 December 1—31, 2025 60,292 $ 165.82 60,292 805,948 Total 60,292 60,292 (1) Average price paid per share is calculated on a settlement basis and excludes commissions and taxes.
During the year ended December 31, 2024, we repurchased a total of 201,233 common shares for $45.1 million.
During the year ended December 31, 2025, we repurchased a total of 347,364 common shares for $60.0 million.

Item 7. Management's Discussion & Analysis

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

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Biggest changeSummary Financial Data Years Ended December 31, Change (in thousands) 2024 2023 $ % Investment management fees $ 773,830 $ 711,475 $ 62,355 8.8 % Other revenue 133,119 133,793 (674) (0.5) % Total revenues 906,949 845,268 61,681 7.3 % Total operating expenses 724,459 693,784 30,675 4.4 % Operating income (loss) 182,490 151,484 31,006 20.5 % Total other income (expense), net (8,510) 3,681 (12,191) (331.2) % Total interest income (expense), net 33,896 31,399 2,497 8.0 % Income (loss) before income taxes 207,876 186,564 21,312 11.4 % Income tax expense (benefit) 55,423 45,088 10,335 22.9 % Net income (loss) 152,453 141,476 10,977 7.8 % Noncontrolling interests (30,707) (10,855) (19,852) 182.9 % Net Income (Loss) Attributable to Virtus Investment Partners, Inc. $ 121,746 $ 130,621 $ (8,875) (6.8) % Earnings (loss) per share-diluted $ 16.89 $ 17.71 $ (0.82) (4.6) % In 2024, total revenues increased $61.7 million, or 7.3%, to $906.9 million from $845.3 million in 2023, and operating income increased by $31.0 million, or 20.5%, to $182.5 million in 2024 from $151.5 million in 2023, primarily as a result of increased average assets under management during the current year partially offset by an increase in operating expenses. 24 Table of Contents Revenues Revenues by source were as follows: Years Ended December 31, Change (in thousands) 2024 2023 $ % Investment management fees Open-end funds $ 317,990 $ 305,238 $ 12,752 4.2 % Closed-end funds 59,184 58,136 1,048 1.8 % Retail separate accounts 209,467 171,357 38,110 22.2 % Institutional accounts 187,189 176,744 10,445 5.9 % Total investment management fees 773,830 711,475 62,355 8.8 % Distribution and service fees 54,692 56,153 (1,461) (2.6) % Administration and shareholder service fees 74,294 73,857 437 0.6 % Other income and fees 4,133 3,783 350 9.3 % Total Revenues $ 906,949 $ 845,268 $ 61,681 7.3 % Investment Management Fees Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments.
Biggest changeSummary Financial Data Years Ended December 31, Change (in thousands) 2025 2024 $ % Investment management fees $ 725,039 $ 773,830 $ (48,791) (6.3) % Other revenue 127,826 133,119 (5,293) (4.0) % Total revenues 852,865 906,949 (54,084) (6.0) % Total operating expenses 684,185 724,459 (40,274) (5.6) % Operating income (loss) 168,680 182,490 (13,810) (7.6) % Total other income (expense), net (18,807) (8,510) (10,297) 121.0 % Total interest income (expense), net 37,376 33,896 3,480 10.3 % Income (loss) before income taxes 187,249 207,876 (20,627) (9.9) % Income tax expense (benefit) 51,261 55,423 (4,162) (7.5) % Net income (loss) 135,988 152,453 (16,465) (10.8) % Noncontrolling interests 2,408 (30,707) 33,115 (107.8) % Net Income (Loss) Attributable to Virtus Investment Partners, Inc. $ 138,396 $ 121,746 $ 16,650 13.7 % Earnings (loss) per share-diluted $ 19.97 $ 16.89 $ 3.08 18.2 % In 2025, total revenues decreased $54.1 million, or 6.0%, to $852.9 million from $906.9 million in 2024, and operating income decreased by $13.8 million, or 7.6%, to $168.7 million in 2025 from $182.5 million in 2024, due primarily to decreased revenues as mentioned above. 24 Table of Contents Revenues Revenues by source were as follows: Years Ended December 31, Change (in thousands) 2025 2024 $ % Investment management fees Open-end funds $ 286,610 $ 317,990 $ (31,380) (9.9) % Closed-end funds 61,305 59,184 2,121 3.6 % Retail separate accounts 209,538 209,467 71 — % Institutional accounts 167,586 187,189 (19,603) (10.5) % Total investment management fees 725,039 773,830 (48,791) (6.3) % Distribution and service fees 49,579 54,692 (5,113) (9.3) % Administration and shareholder service fees 73,275 74,294 (1,019) (1.4) % Other income and fees 4,972 4,133 839 20.3 % Total Revenues $ 852,865 $ 906,949 $ (54,084) (6.0) % Investment Management Fees Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments.
In addition to operating activities, other uses of cash could include: (i) investments in organic growth, including seeding or launching new products and expanding distribution; (ii) debt principal payments through scheduled amortization or additional paydowns; (iii) dividend payments to common stockholders; (iv) repurchases of our common stock, or 28 Table of Contents withholding obligations for the net settlement of employee share transactions; (v) investments in our technology infrastructure; (vi) investments in inorganic growth opportunities that may require upfront and/or future payments; (vii) integration costs, including restructuring and severance, related to acquisitions, if any; and (viii) purchases of affiliate equity interests.
In addition to operating activities, other uses of cash could include: (i) investments in organic growth, including 28 Table of Contents seeding or launching new products and expanding distribution; (ii) debt principal payments through scheduled amortization or additional paydowns; (iii) dividend payments to common stockholders; (iv) repurchases of our common stock, or withholding obligations for the net settlement of employee share transactions; (v) investments in our technology infrastructure; (vi) investments in inorganic growth opportunities that may require upfront and/or future payments; (vii) integration costs, including restructuring and severance, related to acquisitions, if any; and (viii) purchases of investment manager equity interests.
Results of Operations - December 31, 2024 compared to December 31, 2023 A discussion of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2023 , which specific discussion is incorporated herein by reference.
Results of Operations - December 31, 2025 compared to December 31, 2024 A discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024 , which specific discussion is incorporated herein by reference.
If we determine that the carrying value of the reporting unit is less than the fair value, a second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. We completed our annual goodwill impairment assessment as of October 31, 2024, and no impairment was identified.
If we determine that the carrying value of the reporting unit is less than the fair value, a second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. We completed our annual goodwill impairment assessment as of October 31, 2025, and no impairment was identified.
At December 31, 2024, our broker-dealer net capital was significantly greater than the required minimum. Balance Sheet Cash and cash equivalents consist of cash in banks and money market fund investments. Investments consist primarily of investments in our sponsored funds.
At December 31, 2025, our broker-dealer net capital was significantly greater than the required minimum. Balance Sheet Cash and cash equivalents consist of cash in banks and money market fund investments. Investments consist primarily of investments in our sponsored funds.
Distribution services are generally satisfied upon the sale of a fund share. Shareholder 31 Table of Contents servicing activities are generally services satisfied over time. We distribute our open-end funds through third-party financial intermediaries that comprise national, regional and independent broker-dealers. These third-party financial intermediaries provide distribution and shareholder service activities on our behalf.
Distribution services are generally satisfied upon the sale of a fund share. Shareholder servicing activities are generally services satisfied over time. We distribute our open-end funds through third-party financial intermediaries that comprise national, regional and independent broker-dealers. These third-party financial intermediaries provide distribution and shareholder service activities on our behalf.
The minority interests in the investment management subsidiary are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests. Goodwill As of December 31, 2024, the carrying value of goodwill was $397.1 million.
The minority interests in the investment management subsidiary are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Consolidated Statements of Operations within noncontrolling interests. Goodwill As of December 31, 2025, the carrying value of goodwill was $397.1 million.
These fees primarily consist of an asset-based fee that is paid by the fund over a period of years to cover allowable sales and marketing expenses for the fund or front-end sales charges that are based on a percentage of the offering price.
These fees primarily consist of an asset-based fee that is paid by the fund over a period of years to cover allowable sales and marketing expenses for the fund or front-end sales charges that are based on a percentage of the offering 31 Table of Contents price.
Actual results will vary from these estimates. Management believes the following critical accounting policies are important to understanding our results of operations and financial position. Consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated.
Actual results will vary 29 Table of Contents from these estimates. Management believes the following critical accounting policies are important to understanding our results of operations and financial position. Consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated.
Interest and Dividend Income Interest and dividend income is earned on cash equivalents and our marketable securities. Interest and dividend income remained consistent during the year ended December 31, 2024 compared to the prior year.
Interest and Dividend Income Interest and dividend income is earned on cash equivalents and our marketable securities. Interest and dividend income remained consistent during the year ended December 31, 2025 compared to the prior year.
Our institutional distribution resources include affiliate-specific sales teams primarily focused on the U.S. market, supported by shared consultant relations and U.S. and non-U.S. institutional sales distribution. Our institutional products are marketed through relationships with consultants as well as directly to clients.
Our institutional distribution resources include investment manager-specific sales teams primarily focused on the U.S. market, supported by shared consultant relations and U.S. and non-U.S. institutional sales distribution. Our institutional products are marketed through relationships with consultants as well as directly to clients.
We use a multi-manager, multi-style approach, offering investment strategies from investment managers, each having its own distinct investment style, autonomous investment process and individual brand, as well as from select unaffiliated managers for certain of our retail funds.
We use a multi-manager, multi-style approach, offering investment strategies from investment managers, each having its own distinct investment style, 19 Table of Contents autonomous investment process and individual brand, as well as from select unaffiliated managers for certain of our retail funds.
Voting interest entities ("VOEs") are consolidated when we are considered to have a controlling 29 Table of Contents financial interest, which is typically present when we own a majority of the voting interest in an entity or otherwise have the power to govern the financial and operating policies of the entity.
Voting interest entities ("VOEs") are consolidated when we are considered to have a controlling financial interest, which is typically present when we own a majority of the voting interest in an entity or otherwise have the power to govern the financial and operating policies of the entity.
Contingent payment obligations related to our asset purchases, if estimable and probable of payment, are initially 32 Table of Contents recorded at their estimated value and reviewed every reporting period for changes.
Contingent payment obligations related to our asset purchases, if estimable and probable of payment, are initially recorded at their estimated value and reviewed every reporting period for changes.
Only a significant decline in the fair value of our reporting unit would indicate that an impairment may exist. Indefinite-Lived Intangible Assets As of December 31, 2024, the carrying value of indefinite-lived intangible assets was $42.3 million. Indefinite-lived intangible assets comprise certain fund investment management agreements and trade names.
Only a significant decline in the fair value of our reporting unit would indicate that an impairment may exist. 30 Table of Contents Indefinite-Lived Intangible Assets As of December 31, 2025, the carrying value of indefinite-lived intangible assets was $42.3 million. Indefinite-lived intangible assets comprise certain fund investment management agreements and trade names.
We perform indefinite-lived intangible asset impairment tests annually, or more frequently, should circumstances change, which could reduce the fair value of indefinite-lived intangible assets below their carrying value. We completed our annual impairment assessment of 30 Table of Contents these assets as of October 31, 2024, and no impairments were identified.
We perform indefinite-lived intangible asset impairment tests annually, or more frequently, should circumstances change, which could reduce the fair value of indefinite-lived intangible assets below their carrying value. We completed our annual impairment assessment of these assets as of October 31, 2025, and no impairments were identified.
Amounts paid to unaffiliated subadvisers for the years ended December 31, 2024, 2023 and 2022 were $45.4 million, $54.7 million and $77.0 million, respectively. Retail separate account fees are generally earned based on the end of the preceding or current quarter's asset values. Institutional account fees are generally earned based on an average of month-end balances.
Amounts paid to unaffiliated subadvisers for the years ended December 31, 2025, 2024 and 2023 were $44.3 million, $45.4 million and $54.7 million, respectively. Retail separate account fees are generally earned based on the end of the preceding or current quarter's asset values. Institutional account fees are generally earned based on an average of month-end balances.
(2) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short, and other strategies.
(2) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies.
Performance is presented on an average annual total return basis for products with a one-, three-, five-, and/or ten-year track record, is net of fees for open-end funds, and is measured on a consistent basis relative to the most appropriate benchmarks.
Performance is presented on an average annual total return basis for products with a one-, three-, five- and/or ten-year track record, and is measured on a consistent basis relative to the most appropriate benchmarks. Fund investment performance is net of fees.
(2) Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from cash management strategies, and the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage. (3) Includes investment models provided to managed account sponsors.
(2) Represents open-end and closed-end fund distributions net of reinvestments, the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage. (3) Includes investment models provided to managed account sponsors.
Annual incentive compensation, our largest annual operating cash expenditure, is paid in the first quarter of the year. In 2024 and 2023, we paid approximately $146.1 million and $142.1 million, respectively, in incentive compensation earned during the years ended December 31, 2023 and 2022, respectively.
Annual incentive compensation, our largest annual operating cash expenditure, is paid in the first quarter of the year. In 2025 and 2024, we paid approximately $158.4 million and $146.1 million, respectively, in incentive compensation earned during the years ended December 31, 2024 and 2023, respectively.
Distribution and service fees decreased by $1.5 million, or 2.6%, for the year ended December 31, 2024 compared to the prior year, primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.
Distribution and service fees decreased by $5.1 million, or 9.3%, for the year ended December 31, 2025 compared to the prior year, primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.
Only a significant decline in the fair value of the indefinite-lived intangible assets would indicate that an impairment may exist. Definite-Lived Intangible Assets As of December 31, 2024, the carrying value of definite-lived intangible assets was $335.9 million. Definite-lived intangible assets comprise certain investment management agreements, trade names and non-competition agreements.
Only a significant decline in the fair value of the indefinite-lived intangible assets would indicate that an impairment may exist. Definite-Lived Intangible Assets As of December 31, 2025, the carrying value of definite-lived intangible assets was $285.1 million. Definite-lived intangible assets comprise certain investment management agreements, trade names and non-competition agreements.
Liabilities under contingent payment arrangements are recorded within contingent consideration on the Consolidated Balance Sheets. Contingent payment obligations related to business combinations are remeasured at fair value each reporting date using a simulation model with the assistance of an independent valuation firm (level 3 fair value measurement).
Liabilities under contingent payment arrangements are recorded within contingent consideration on the Consolidated Balance Sheets. Contingent payment obligations related to business combinations are remeasured at fair value each reporting date using a simulation model or an income approach valuation technique with the assistance of an independent valuation firm 32 Table of Contents (level 3 fair value measurement).
Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers and Company sponsored structured products. Our retail products include open-end funds, closed-end funds and retail separate accounts.
Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products. Our retail products include open-end funds, closed-end funds and retail separate accounts.
We target key market segments, including foundations and endowments, corporations, public and private pension plans, sovereign wealth funds and subadvisory relationships. Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and ETFs. Our U.S. retail funds and retail separate accounts are distributed through financial intermediaries.
We target key market segments, including foundations and endowments, corporations, public and private pension plans, sovereign wealth funds and subadvisory relationships. Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and exchange traded funds ("ETFs").
Income Tax Expense (Benefit) The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 26.7% and 24.2% for 2024 and 2023, respectively.
Income Tax Expense (Benefit) The provision for income taxes reflected U.S. federal, state and local taxes and foreign taxes at an estimated effective tax rate of 27.4% and 26.7% for 2025 and 2024, respectively.
Realized and Unrealized Gain (Loss) of CIP, net Realized and unrealized gain (loss) of CIP, net changed $12.1 million compared to the prior year primarily due to changes in net unrealized and realized losses of $38.0 million, due to changes in market values of leveraged loans partially offset by unrealized gains of $25.9 million related to the value of the notes payable.
Realized and Unrealized Gain (Loss) of CIP, net Realized and unrealized gain (loss) of CIP, net changed $13.6 million compared to the prior year primarily due to changes in net unrealized and realized losses of $50.7 million, due to changes in market values of leveraged loans partially offset by unrealized gains of $37.1 million related to the value of the notes payable.
Retail separate account fees which includes wealth management accounts are calculated based on the end of the preceding or current quarter’s asset values or on an average of month-end balances.
Fund fees are calculated based on average daily or weekly net assets. Retail separate account fees, which include fees for wealth management accounts, are calculated based on the end of the preceding or current quarter’s asset values or on an average of month-end balances.
Average Assets Under Management and Average Fees Earned The following table summarizes the average management fees earned in basis points and average assets under management: Years Ended December 31, Average Fee Earned (expressed in basis points) Average Assets Under Management (in millions) (4) 2024 2023 2024 2023 Products Open-End Funds (1) 50.0 49.5 $ 57,039 $ 55,226 Closed-End Funds 58.6 57.8 10,092 10,060 Retail Separate Accounts (2) 43.4 43.7 46,575 37,601 Institutional Accounts (3) 31.1 31.7 62,947 58,595 All Products 42.0 42.2 $ 176,653 $ 161,482 (1) Represents assets under management of U.S. retail funds, global funds and ETFs.
Average Assets Under Management and Average Fees Earned The following table summarizes the average management fees earned in basis points and average assets under management: Years Ended December 31, Average Fee Earned (expressed in basis points) Average Assets Under Management (in millions) (4) Products 2025 2024 2025 2024 Open-End Funds (1) 46.6 50.0 $ 55,059 $ 57,039 Closed-End Funds 58.5 58.6 10,474 10,092 Retail Separate Accounts (2) 42.4 43.4 47,402 46,575 Institutional Accounts (3) 31.7 31.1 56,076 62,947 All Products 41.2 42.0 $ 169,011 $ 176,653 (1) Represents assets under management of U.S. retail funds, ETFs and global funds.
In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Consolidated Balance Sheet net of related debt issuance costs, which were $3.9 million as of December 31, 2024.
The Company had $399.0 million outstanding at December 31, 2025 under the Term Loan. In accordance with Accounting Standards Codification ("ASC") 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Consolidated Balance Sheet net of related debt issuance costs, which were $9.0 million as of December 31, 2025.
Other Income (Expense), net Other income (expense), net changed by $2.5 million during the year ended December 31, 2024 compared to the prior year primarily due to changes in the gains and losses on our equity method investments.
Other Income (Expense), net Other income (expense), net changed by $1.4 million during the year ended December 31, 2025 compared to the prior year primarily due to changes in the gains and losses on our equity method investments, as well as foreign currency gains and losses.
Investment management fees increased by $62.4 million, or 8.8%, for the year ended December 31, 2024 compared to the prior year, primarily due to the increase in average assets under management. Distribution and Service Fees Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services.
Investment management fees decreased by $48.8 million, or 6.3%, for the year ended December 31, 2025 compared to the prior year, primarily due to decreased average assets under management and a decreased average fee rate. Distribution and Service Fees Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services.
The U.S. and global equity markets increased in value in 2024, as evidenced by increases in major indices as noted in the following table: December 31, As of Change Index 2024 2023 % MSCI World Index 3,708 3,169 17.0 % Standard & Poor's 500 Index 5,882 4,770 23.3 % Russell 2000 Index 2,250 2,027 11.0 % Morningstar / LSTA Leveraged Loan 100 Index 2,958 2,721 8.7 % 20 Table of Contents Financial Highlights ▪ Total revenues were $906.9 million in 2024, an increase of $61.7 million, or 7.3%, compared to total revenues of $845.3 million in 2023. ▪ Operating income was $182.5 million, in 2024, an increase of $31.0 million, or 20.5%, compared to $151.5 million in 2023. ▪ Net income per diluted share was $16.89 in 2024, a decrease of $0.82, or 4.6%, compared to net income per diluted share of $17.71 in 2023.
The U.S. and global equity markets increased in value in 2025, as evidenced by increases in major indices as noted in the following table: December 31, Change Index 2025 2024 % MSCI World Index 4,430 3,708 19.5 % Standard & Poor's 500 Index 6,846 5,882 16.4 % Russell 2000 Index 2,482 2,250 10.3 % Morningstar / LSTA Leveraged Loan 100 Index 3,172 2,958 7.2 % Financial Highlights ▪ Total revenues were $852.9 million in 2025, a decrease of $54.1 million, or 6.0%, compared to total revenues of $906.9 million in 2024. ▪ Operating income was $168.7 million, in 2025, a decrease of $13.8 million, or 7.6%, compared to $182.5 million in 2024. ▪ Net income per diluted share was $19.97 in 2025, an increase of $3.08, or 18.2%, compared to net income per diluted share of $16.89 in 2024.
Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed-through to third-party client intermediaries for services to investors in sponsored investment products. Fund fees are calculated based on average daily or weekly net assets.
Average fees earned represent investment management fees, net of revenue-related adjustments, and excluding the impact of consolidated investment products ("CIP") divided by average net assets. Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed-through to third-party client intermediaries for services to investors in sponsored investment products.
The change in fair value is recorded in the current period as a gain or loss. The change in fair value of contingent consideration for the year ended December 31, 2024 was primarily attributable to changes in underlying performance estimates. Depreciation Expense Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements.
The change in fair value is recorded in the current period as a gain or loss. The change in fair value of contingent consideration for the year ended December 31, 2025 was primarily attributable to changes in underlying performance estimates and the passage of time.
Other Operating Expenses Other operating expenses primarily consist of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs. Other operating expenses remained consistent during the year ended December 31, 2024 compared to the prior year.
Other Operating Expenses Other operating expenses primarily consist of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs.
(4) Represents assets under management of institutional separate and commingled accounts including structured products. 22 Table of Contents Assets Under Management by Asset Class The following table summarizes assets under management by asset class: As of December 31, Change % of Total (in millions) 2024 2023 $ % 2024 2023 Asset Class Equity $ 100,792 $ 96,703 $ 4,089 4.2 % 57.6 % 56.2 % Fixed Income 37,696 37,192 504 1.4 % 21.5 % 21.6 % Multi-Asset (1) 21,174 21,411 (237) (1.1) % 12.1 % 12.4 % Alternatives (2) 15,339 16,953 (1,614) (9.5) % 8.8 % 9.8 % Total $ 175,001 $ 172,259 $ 2,742 1.6 % 100.0 % 100.0 % (1) Consists of multi-asset offerings not included in equity, fixed income, and alternatives.
(4) Represents assets under management of institutional separate and commingled accounts including structured products. 22 Table of Contents Assets Under Management by Asset Class The following table summarizes assets under management by asset class: (in millions) As of December 31, Change % of Total Asset Class 2025 2024 $ % 2025 2024 Equity $ 82,584 $ 100,792 $ (18,208) (18.1) % 51.7 % 57.6 % Fixed Income 39,879 37,696 2,183 5.8 % 25.0 % 21.5 % Multi-Asset (1) 21,617 21,174 443 2.1 % 13.6 % 12.1 % Alternatives (2) 15,413 15,339 74 0.5 % 9.7 % 8.8 % Total $ 159,493 $ 175,001 $ (15,508) (8.9) % 100.0 % 100.0 % (1) Consists of multi-asset offerings not included in equity, fixed income, and alternatives.
Administration and Shareholder Service Fees Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S. retail funds, ETFs and closed-end funds. Fund administration and shareholder service fees remained consistent for the year ended December 31, 2024 compared to the prior year.
Administration and Shareholder Service Fees Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S. retail funds, ETFs and closed-end funds.
Assets Under Management by Product The following table summarizes our assets under management by product: As of December 31, Change (in millions) 2024 2023 $ % Open-End Funds (1) $ 56,073 $ 56,062 $ 11 — % Closed-End Funds 10,225 10,026 199 2.0 % Retail Separate Accounts (2) 49,536 43,202 6,334 14.7 % Institutional Accounts (3) 59,167 62,969 (3,802) (6.0) % Total $ 175,001 $ 172,259 $ 2,742 1.6 % Average Assets Under Management (4) $ 176,653 $ 161,482 $ 15,171 9.4 % (1) Represents assets under management of U.S. retail funds, global funds and ETFs.
Assets Under Management by Product The following table summarizes our assets under management by product: (in millions) As of December 31, Change Product 2025 2024 $ % Open-End Funds (1) $ 52,759 $ 56,073 $ (3,314) (5.9) % Closed-End Funds 10,635 10,225 410 4.0 % Retail Separate Accounts (2) 43,091 49,536 (6,445) (13.0) % Institutional Accounts (3) 53,008 59,167 (6,159) (10.4) % Total $ 159,493 $ 175,001 $ (15,508) (8.9) % Average Assets Under Management (4) $ 169,011 $ 176,653 $ (7,642) (4.3) % (1) Represents assets under management of U.S. retail funds, ETFs and global funds.
Operating Cash Flow Net cash provided by operating activities of $1.8 million for 2024 decreased by $235.4 million from cash flows provided by operating activities of $237.2 million in 2023 primarily due to an increase of $270.7 million in net purchases of investments of CIP in the current year period, partially offset by a $26.1 million increase in net sales of investments in the current year.
Operating Cash Flow Net cash used in operating activities of $67.2 million for 2025 changed by $69.0 million from cash provided by operating activities of $1.8 million in 2024 primarily due to an increase of $44.4 million in net purchases of investments of CIP in the current year and a decrease of $25.7 million in net sales of investments in the current year.
Other income and fees increased $0.4 million, or 9.3%, for the year ended December 31, 2024 compared to the prior year, primarily due to increased marketing fees earned during the current year. 25 Table of Contents Operating Expenses Operating expenses by category were as follows: Years Ended December 31, Change (in thousands) 2024 2023 $ % Operating expenses Employment expenses $ 432,587 $ 404,742 $ 27,845 6.9 % Distribution and other asset-based expenses 96,223 96,802 (579) (0.6) % Other operating expenses 127,526 125,871 1,655 1.3 % Other operating expenses of CIP 6,987 4,224 2,763 65.4 % Change in fair value of contingent consideration (5,608) (5,510) (98) 1.8 % Restructuring expense 1,487 824 663 80.5 % Depreciation expense 8,958 5,804 3,154 54.3 % Amortization expense 56,299 61,027 (4,728) (7.7) % Total operating expenses $ 724,459 $ 693,784 $ 30,675 4.4 % Employment Expenses Employment expenses consist of fixed and variable compensation and related employee benefit costs.
Other income and fees increased $0.8 million, or 20.3%, for the year ended December 31, 2025 compared to the prior year, primarily due to increased marketing fees earned during the current year. 25 Table of Contents Operating Expenses Operating expenses by category were as follows: Years Ended December 31, Change (in thousands) 2025 2024 $ % Operating expenses Employment expenses $ 400,720 $ 432,587 $ (31,867) (7.4) % Distribution and other asset-based expenses 89,047 96,223 (7,176) (7.5) % Other operating expenses 130,358 127,526 2,832 2.2 % Other operating expenses of CIP 5,812 6,987 (1,175) (16.8) % Change in fair value of contingent consideration (2,214) (5,608) 3,394 (60.5) % Restructuring expense 693 1,487 (794) (53.4) % Depreciation expense 7,992 8,958 (966) (10.8) % Amortization expense 51,777 56,299 (4,522) (8.0) % Total operating expenses $ 684,185 $ 724,459 $ (40,274) (5.6) % Employment Expenses Employment expenses consist of fixed and variable compensation and related employee benefit costs.
Interest Income (Expense), net Interest Income (Expense), net by category were as follows: Years Ended December 31, Change (in thousands) 2024 2023 $ % Interest Income (Expense) Interest expense $ (22,132) $ (23,431) $ 1,299 (5.5) % Interest and dividend income 12,488 12,458 30 0.2 % Interest and dividend income of investments of CIP 204,732 197,707 7,025 3.6 % Interest expense of CIP (161,192) (155,335) (5,857) 3.8 % Total Interest Income (Expense), net $ 33,896 $ 31,399 $ 2,497 8.0 % Interest Expense Interest expense decreased $1.3 million, or 5.5%, for the year ended December 31, 2024, compared to the prior year primarily due to lower average debt outstanding during the current year.
Interest Income (Expense), net Interest Income (Expense), net by category were as follows: Years Ended December 31, Change (in thousands) 2025 2024 $ % Interest Income (Expense) Interest expense $ (21,471) $ (22,132) $ 661 (3.0) % Interest and dividend income 12,303 12,488 (185) (1.5) % Interest and dividend income of investments of CIP 187,452 204,732 (17,280) (8.4) % Interest expense of CIP (140,908) (161,192) 20,284 (12.6) % Total Interest Income (Expense), net $ 37,376 $ 33,896 $ 3,480 10.3 % Interest Expense Interest expense decreased $0.7 million, or 3.0%, for the year ended December 31, 2025, compared to the prior year primarily due to lower average interest rates during the current year partially offset by higher average debt during the current year.
(4) Averages are calculated as follows: – Funds - average daily or weekly balances – Retail Separate Accounts - prior-quarter ending balances – Institutional Accounts - average of month-end balances 21 Table of Contents Asset Flows by Product The following table summarizes asset flows by product: Years Ended December 31, (in millions) 2024 2023 Open-End Funds (1) Beginning balance $ 56,062 $ 53,000 Inflows 12,420 11,188 Outflows (16,532) (18,526) Net flows (4,112) (7,338) Market performance 4,949 8,160 Other (2) (826) 2,240 Ending balance $ 56,073 $ 56,062 Closed-End Funds Beginning balance $ 10,026 $ 10,361 Inflows 1 24 Outflows (41) — Net flows (40) 24 Market performance 1,112 453 Other (2) (873) (812) Ending balance $ 10,225 $ 10,026 Retail Separate Accounts (3) Beginning balance $ 43,202 $ 35,352 Inflows 8,621 6,680 Outflows (6,957) (5,972) Net flows 1,664 708 Market performance 4,667 7,141 Other (2) 3 1 Ending balance $ 49,536 $ 43,202 Institutional Accounts (4) Beginning balance $ 62,969 $ 50,663 Inflows 5,715 7,965 Outflows (13,660) (8,579) Net flows (7,945) (614) Market performance 5,101 9,077 Other (2) (958) 3,843 Ending balance $ 59,167 $ 62,969 Total Beginning balance $ 172,259 $ 149,376 Inflows 26,757 25,857 Outflows (37,190) (33,077) Net flows (10,433) (7,220) Market performance 15,829 24,831 Other (2) (2,654) 5,272 Ending balance $ 175,001 $ 172,259 (1) Represents assets under management of U.S. retail funds, global funds and ETFs.
(4) Calculated according to revenue earning basis that includes average daily, weekly, monthly beginning balance, monthly ending balance, or quarter beginning and ending balance, as well as quarter beginning or ending spot balance. 21 Table of Contents Asset Flows by Product The following table summarizes asset flows by product: Years Ended December 31, (in millions) 2025 2024 Open-End Funds (1) Beginning balance $ 56,073 $ 56,062 Inflows 11,438 12,420 Outflows (17,077) (16,532) Net flows (5,639) (4,112) Market performance 3,378 4,949 Other (2) (1,053) (826) Ending balance $ 52,759 $ 56,073 Closed-End Funds Beginning balance $ 10,225 $ 10,026 Inflows 12 1 Outflows (104) (41) Net flows (92) (40) Market performance 1,268 1,112 Other (2) (766) (873) Ending balance $ 10,635 $ 10,225 Retail Separate Accounts (3) Beginning balance $ 49,536 $ 43,202 Inflows 5,864 8,621 Outflows (11,064) (6,957) Net flows (5,200) 1,664 Market performance (1,233) 4,667 Other (2) (12) 3 Ending balance $ 43,091 $ 49,536 Institutional Accounts (4) Beginning balance $ 59,167 $ 62,969 Inflows 6,125 5,715 Outflows (14,070) (13,660) Net flows (7,945) (7,945) Market performance 2,446 5,101 Other (2) (660) (958) Ending balance $ 53,008 $ 59,167 Total Beginning balance $ 175,001 $ 172,259 Inflows 23,439 26,757 Outflows (42,315) (37,190) Net flows (18,876) (10,433) Market performance 5,859 15,829 Other (2) (2,491) (2,654) Ending balance $ 159,493 $ 175,001 (1) Represents assets under management of U.S. retail funds, ETFs and global funds.
Employment expenses of $432.6 million increased $27.8 million, or 6.9%, from the prior year primarily due to an increase in profit- and sales-based compensation and the addition of AlphaSimplex in April 2023. Distribution and Other Asset-Based Expenses Distribution and other asset-based expenses consist primarily of payments to third-party client intermediaries for providing services to investors in sponsored investment products.
Employment expenses decreased by $31.9 million, or 7.4%, for the year ended December 31, 2025 primarily due to a decrease in profit- and sales-based compensation and stock-based compensation. Distribution and Other Asset-Based Expenses Distribution and other asset-based expenses consist primarily of payments to third-party client intermediaries for providing services to investors in sponsored investment products.
Other Income (Expense), net Other Income (Expense), net by category were as follows: Years Ended December 31, Change (in thousands) 2024 2023 $ % Other Income (Expense) Realized and unrealized gain (loss) on investments, net $ 3,914 $ 6,525 $ (2,611) (40.0) % Realized and unrealized gain (loss) of CIP, net (14,460) (2,404) (12,056) 501.5 % Other income (expense), net 2,036 (440) 2,476 (562.7) % Total Other Income (Expense), net $ (8,510) $ 3,681 $ (12,191) (331.2) % Realized and Unrealized Gain (Loss) on Investments, net Realized and unrealized gain (loss) on investments, net changed during the year ended December 31, 2024 by $2.6 million as compared to the prior year.
Other Income (Expense), net Other Income (Expense), net by category were as follows: Years Ended December 31, Change (in thousands) 2025 2024 $ % Other Income (Expense) Realized and unrealized gain (loss) on investments, net $ 5,823 $ 3,914 $ 1,909 48.8 % Realized and unrealized gain (loss) of CIP, net (28,103) (14,460) (13,643) 94.3 % Other income (expense), net 3,473 2,036 1,437 70.6 % Total Other Income (Expense), net $ (18,807) $ (8,510) $ (10,297) 121.0 % Realized and Unrealized Gain (Loss) on Investments, net Realized and unrealized gain (loss) on investments, net changed during the year ended December 31, 2025 by $1.9 million as compared to the prior year.
(2) Includes investment models provided to managed account sponsors. (3) Represents assets under management of institutional separate and commingled accounts including structured products.
(2) Includes investment models provided to managed account sponsors. (3) Represents assets under management of institutional separate and commingled accounts including structured products. (4) Calculated according to revenue earning basis that includes average daily, weekly, monthly beginning balance, monthly ending balance, or quarter beginning and ending balance, as well as quarter beginning or ending spot balance.
The capital and financial markets experience fluctuation, volatility and declines, which impact investment returns and asset flows of our investment offerings as well as in investor choices and preferences among investment products. The changes in our assets under management may also be affected by the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K.
Market Developments The financial markets have a significant impact on the value of our assets under management and on the level of our sales and net flows. The capital and financial markets experience fluctuation, volatility and declines, which impact investment returns and asset flows of our investment offerings as well as in investor choices and preferences among investment products.
Interest Expense of CIP Interest expense of CIP represents interest expense on the notes payable of CIP. Interest expense of CIP increased by $5.9 million, or 3.8%, compared to the prior year. The increase is primarily attributable to the addition of new CLOs in the 27 Table of Contents third quarter of 2023 and fourth quarter of 2024.
The decrease is primarily attributable to lower average interest rates in the current year partially offset by the addition of new CLOs in the fourth quarters of 2024 and 2025. 27 Table of Contents Interest Expense of CIP Interest expense of CIP represents interest expense on the notes payable of CIP.
Liquidity and Capital Resources Certain Financial Data The following tables summarize certain financial data relating to our liquidity and capital resources: December 31, Change (in thousands) 2024 2023 $ % Balance Sheet Data Cash and cash equivalents $ 265,888 $ 239,602 $ 26,286 11.0 % Investments 119,216 132,696 (13,480) (10.2) % Contingent consideration 63,505 90,938 (27,433) (30.2) % Debt 232,130 253,412 (21,282) (8.4) % Redeemable noncontrolling interests 107,282 104,869 2,413 2.3 % Total equity 901,636 868,289 33,347 3.8 % Years Ended December 31, Change (in thousands) provided by (used in) 2024 2023 $ % Cash Flow Data Operating activities $ 1,755 $ 237,157 $ (235,402) (99.3) % Investing activities (16,951) (129,732) 112,781 (86.9) % Financing activities 74,947 (356,113) 431,060 (121.0) % Overview At December 31, 2024, we had $265.9 million of cash and cash equivalents and $119.2 million of investments, which included $83.8 million of investment securities, compared to $239.6 million of cash and cash equivalents and $132.7 million of investments, which included $97.3 million of investment securities, at December 31, 2023.
Liquidity and Capital Resources Certain Financial Data The following tables summarize certain financial data relating to our liquidity and capital resources: (in thousands) December 31, Change Balance Sheet Data 2025 2024 $ % Cash and cash equivalents $ 386,483 $ 265,888 $ 120,595 45.4 % Investments 157,480 119,216 38,264 32.1 % Contingent consideration 39,108 63,505 (24,397) (38.4) % Debt 389,957 232,130 157,827 68.0 % Redeemable noncontrolling interests 102,934 107,282 (4,348) (4.1) % Total equity 934,845 901,636 33,209 3.7 % (in thousands) Years Ended December 31, Change Cash Flow Data provided by (used in) 2025 2024 $ % Operating activities $ (67,199) $ 1,755 $ (68,954) (3,929.0) % Investing activities (47,339) (16,951) (30,388) 179.3 % Financing activities 191,025 74,947 116,078 154.9 % Overview At December 31, 2025, we had $386.5 million of cash and cash equivalents and $157.5 million of investments, which included $76.5 million of investment securities, compared to $265.9 million of cash and cash equivalents and $119.2 million of investments, which included $83.8 million of investment securities, at December 31, 2024.
At December 31, 2024, total assets under management were $175.0 billion, representing an increase of $2.7 billion, or 1.6%, from December 31, 2023. The change in total assets under management from December 31, 2023 included $15.8 billion from positive market performance, partially offset by $(10.4) billion of net outflows.
The change in total assets under management from December 31, 2024 included $(18.9) billion of net outflows partially offset by $5.9 billion from positive market performance.
We have broad distribution access in the U.S. retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies. In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs.
Our U.S. retail funds, ETFs and intermediary sold retail separate accounts are distributed through financial intermediaries. We have broad distribution access in the U.S. retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies.
Depreciation expense increased $3.2 million, or 54.3%, for the year ended December 31, 2024 compared to the prior year primarily due to the acceleration of depreciation on leasehold improvements associated with a terminated lease in the current year period, as well as software and equipment purchases and depreciation expense associated with new office space.
Depreciation Expense Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements. Depreciation expense decreased by $1.0 million, or 10.8%, for the year ended December 31, 2025 compared to the prior year primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease.
Assets Under Management Total sales were $26.8 billion in 2024, an increase of $0.9 billion, or 3.5%, from $25.9 billion in 2023. Net flows were $(10.4) billion in 2024 compared to net flows of $(7.2) billion in 2023.
Net flows were $(18.9) billion in 2025 compared to net flows of $(10.4) billion in 2024. At December 31, 2025, total assets under management were $159.5 billion, representing a decrease of $15.5 billion, or 8.9%, from December 31, 2024.
Amortization expense decreased $4.7 million, or 7.7%, for the year ended December 31, 2024 compared to the prior year, primarily due to intangible assets becoming fully amortized during the current year partially offset by the addition of 26 Table of Contents intangible assets related to the AlphaSimplex acquisition in the second quarter of the prior year.
Amortization Expense Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives. Amortization expense decreased $4.5 million, or 8.0%, for the year ended December 31, 2025 compared to the prior year, 26 Table of Contents primarily due to intangible assets becoming fully amortized.
These payments are primarily based on assets under management. Distribution and other asset-based expenses remained consistent during the year ended December 31, 2024 compared to the prior year.
These payments are primarily based on assets under management. Distribution and other asset-based expenses decreased $7.2 million, or 7.5%, for the year ended December 31, 2025 primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.
Credit Agreement The Company's credit agreement (the "Credit Agreement"), comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026.
Credit Agreement On September 26, 2025, the Company refinanced its existing credit agreement by entering into a new agreement (the "Credit Agreement"). The Credit Agreement provides for (i) a $400.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2032, and (ii) a $250.0 million revolving credit facility with a five-year term expiring in September 2030.
Other Operating Expenses of CIP Other operating expenses of CIP of $7.0 million increased $2.8 million, or 65.4%, from the prior year primarily due to costs incurred related to the refinancing of three CLOs and issuance of one CLO in the current year.
Other Operating Expenses of CIP Other operating expenses of CIP decreased $1.2 million, or 16.8%, from the prior year primarily due to refinancing activities associated with two CLOs in the prior year period.
Investing Cash Flow Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations. Net cash used in investing activities of $17.0 million for 2024 decreased by $112.8 million from net cash used in investing activities of $129.7 million in 2023 primarily due to the AlphaSimplex acquisition in the prior year.
Investing Cash Flow Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations.
Benchmark indices are unmanaged, their returns do not reflect any fees, expenses or sales charges, and they are not available for direct investment. Past performance is not indicative of future results.
Benchmark indices are unmanaged, their returns do not reflect any fees, expenses or sales charges, and they are not available for direct investment. Certain strategies do not have stated benchmarks, such as wealth management, structured products, and certain other multi-asset accounts and therefore are excluded from the analysis.
Interest and Dividend Income of Investments of CIP Interest and dividend income of investments of CIP increased $7.0 million, or 3.6%, compared to the prior year. The increase is primarily attributable to the addition of a new CLO in the third quarter of 2023 and fourth quarter of 2024, respectively, and higher average interest rates during the current year.
Interest expense of CIP decreased by $20.3 million, or 12.6%, compared to the prior year. The decrease is primarily due to lower average interest rates in the current year period partially offset by the addition of new CLOs in the fourth quarters of 2024 and 2025.
The higher estimated effective tax rate for 2024 was primarily due to a change in valuation allowances associated with realized losses on the Company's investments as well as lower excess tax benefits associated with stock-based compensation.
The higher estimated effective tax rate for 2025 was primarily due to a change in valuation allowances in the current year related to the tax effects of lower realized and unrealized gains on Company investments compared to the prior year, along with the establishment of a valuation allowance on certain state tax attributes.
The average fee rate earned on all products was flat for 2024 compared to the prior year. 23 Table of Contents Investment Performance The following table presents a summary of investment performance by asset class measured by the percentage of assets under management exceeding their relevant benchmarks as of December 31, 2024: Percentage of Assets Under Management (1) Beating Benchmark (2) Asset Class 1-Year 3-Year 5-Year 10-Year Equity 25% 18% 55% 75% Fixed Income 81% 58% 79% 72% Alternatives 54% 49% 91% 96% (1) Excludes closed-end funds, wealth management accounts, structured products and certain other multi-asset strategies.
The average fee rate earned decreased for the year ended December 31, 2025 compared to the prior year primarily due to a shift in the asset mix in our open-end funds to investment strategies that have a lower fee rate, partially offset by an increase in average fee rates of our institutional accounts due to the redemptions of lower fee earning assets. 23 Table of Contents Investment Performance The following table presents a summary of investment performance by asset class measured by the percentage of assets under management exceeding their relevant benchmarks as of December 31, 2025: Percentage of Assets Under Management Beating Benchmark (1) Asset Class 1-Year 3-Year 5-Year 10-Year Equity 6% 21% 20% 62% Fixed Income 63% 76% 66% 77% Alternatives (2) 53% 60% 60% 71% Multi-Asset (3) 8% 41% 38% 41% Total 24% 39% 36% 64% (1) Percentage outperforming benchmark is reported as the percentage of assets under management that have outperformed benchmarks across the indicated periods.
Net cash provided by financing activities of $74.9 million in 2024 changed by $431.1 million from net cash used in financing activities of $356.1 million in the prior year primarily due to a $433.5 million increase in net borrowings of CIP attributable to the refinancing of two CLOs and the launch of a new CLO in the current year.
Net cash provided by financing activities of $191.0 million in 2025 increased by $116.1 million from net cash provided by financing activities of $74.9 million in the prior year primarily due to a $183.7 million increase in net borrowings as a result of the refinancing of our credit facility, partially offset by a $25.3 million decrease in net borrowings and payments of CIP and a $22.4 million decrease in net contributions from noncontrolling interests.
Our wealth management business is marketed directly to individual clients by financial advisory teams at our Advisers. Market Developments The financial markets have a significant impact on the value of our assets under management and on the level of our sales and net flows.
In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs. Our wealth management business is marketed directly to individual clients by financial advisory teams at our investment managers.
Removed
(4) Averages are calculated as follows: – Funds - average daily or weekly balances – Retail Separate Accounts - prior-quarter ending balances – Institutional Accounts - average of month-end balances Average fees earned represent investment management fees, net of revenue-related adjustments, and excluding the impact of consolidated investment products ("CIP") divided by average net assets.
Added
The changes in our assets under management may also be affected by the factors discussed in Item 1A. "Risk Factors" of this Annual Report on Form 10-K.
Removed
(2) Percentage beating benchmark is reported as the percentage of assets under management that have outperformed benchmarks across the indicated periods and does not include assets without benchmarks.
Added
Crescent Cove Advisors On December 15, 2025, the Company completed the acquisition of a 35% minority interest in Crescent Cove Advisors, LP ("Crescent Cove"), an investment manager specializing in private capital solutions, for $41.1 million. 20 Table of Contents Keystone National Group On December 5, 2025, the Company entered into an agreement to acquire a majority interest in Keystone National Group ("Keystone"), an investment manager specializing in asset-centric private credit.
Removed
As of December 31, 2024, 32 of 70, or 46%, of our rated U.S. retail funds received an overall rating of 4 or 5 stars representing 71% of our total U.S. retail fund assets under management (1) . By comparison, 32.5% of Morningstar's fund population is given a 4- or 5-star rating (2) .
Added
Under the agreement, the Company would purchase a majority interest in Keystone for consideration of $200.0 million at closing and up to an additional $170.0 million of deferred consideration, including earnout payments subject to the achievement of future revenue targets.
Removed
(1) Assets under management excludes non-rated funds. Based on institutional-class shares, except for funds without I shares, for which A shares were used, or if A share rating is higher than I shares. Past performance is not indicative of future results. (2) Morningstar ratings are based on risk-adjusted returns. Strong ratings are not indicative of positive fund performance.
Added
The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, necessary regulatory approvals and client approvals, including approvals by the Keystone registered fund shareholders. Assets Under Management Total sales were $23.4 billion in 2025, a decrease of $3.3 billion, or 12.4%, from $26.8 billion in 2024.
Removed
Amortization Expense Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives.
Added
(2) Consists of real estate securities, managed futures, event driven, infrastructure and other strategies. (3) Consists of multi-asset offerings not included in equity, fixed income and alternative.
Removed
The realized and unrealized gains and losses reflect changes in overall market conditions for the year.
Added
Fund administration and shareholder service fees decreased by $1.0 million, or 1.4%, for the year ended December 31, 2025 compared to the prior year primarily due to the decrease in average assets under management of our U.S. retail funds partially offset by increased closed-end fund administrative fees.
Removed
The Company repaid $22.8 million outstanding under the Term Loan during 2024 and had $236.1 million outstanding under the Term Loan at December 31, 2024.
Added
Other operating expenses increased $2.8 million, or 2.2% during the year ended December 31, 2025 compared to the prior year primarily due to increased legal and professional fees associated with the Keystone acquisition and the refinancing of the Company's credit facility.
Added
The change for the year ended December 31, 2025 is primarily attributable to an increase in unrealized gains due to changes in market values of our investments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table summarizes the impact of a 10% increase or decrease in the fair values of these financial instruments: December 31, 2024 (in thousands) Fair Value 10% Change Investment securities - fair value (1) $ 83,771 $ 8,377 Our net interest in CIP (2) 199,720 19,972 Total Investments subject to Market Risk $ 283,491 $ 28,349 (1) If a 10% increase or decrease in fair values were to occur, it would result in a corresponding increase or decrease in our pre-tax earnings.
Biggest changeThe following table summarizes the impact of a 10% increase or decrease in the fair values of these financial instruments: December 31, 2025 (in thousands) Fair Value 10% Change Investment securities - fair value (1) $ 76,462 $ 7,646 Our net interest in CIP (2) 230,676 23,068 Total Investments subject to Market Risk $ 307,138 $ 30,714 (1) If a 10% increase or decrease in fair values were to occur, it would result in a corresponding increase or decrease in our pre-tax earnings.
Given our borrowings are floating rate, we considered a hypothetical 100 basis point change in the base rate of our outstanding borrowings and determined that annual interest expense would change by an estimated $2.4 million, either an increase or decrease, depending on the direction of the change in the base rate.
Given our borrowings are floating rate, we considered a hypothetical 100 basis point change in the base rate of our outstanding borrowings and determined that annual interest expense would change by an estimated $4.0 million, either an increase or decrease, depending on the direction of the change in the base rate. 33 Table of Contents
At December 31, 2024, we were exposed to interest rate risk as a result of approximately $180.1 million of investments in fixed- and floating-rate income products, which include our net interests in CIP.
At December 31, 2025, we were exposed to interest rate risk as a result of approximately $198.7 million of investments in fixed- and floating-rate income products, which include our net interests in CIP.
We considered a hypothetical 100 basis point change in interest rates and determined that the fair value of our fixed income investments could change by an estimated $2.4 million. At December 31, 2024, we had $236.1 million outstanding under our Term Loan.
We considered a hypothetical 100 basis point change in interest rates and determined that the fair value of our fixed income investments could change by an estimated $2.8 million. At December 31, 2025, we had $399.0 million outstanding under our Term Loan.

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