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What changed in WESTWOOD HOLDINGS GROUP INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WESTWOOD HOLDINGS GROUP 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.

+197 added−209 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in WESTWOOD HOLDINGS GROUP INC's 2025 10-K

197 paragraphs added · 209 removed · 168 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

83 edited+12 added−19 removed69 unchanged
Biggest changeWestwood Management provides investment advisory services to the Westwood Funds® family of mutual funds: ● Westwood Alternative Income (WMNIX) ● Westwood Quality MidCap (WWMCX) ● Westwood Broadmark Tactical Plus (SBTIX) ● Westwood Quality SmallCap (WHGSX) ● Westwood Broadmark Tactical Growth (FTGWX) ● Westwood Quality SMidCap (WHGMX) ● Westwood Multi-Asset Income (WHGHX) ● Westwood Quality Value (WHGLX) ● Westwood Income Opportunity (WHGIX) ● Westwood MLP & Energy Infrastructure (SMLPX) ● Westwood Quality AllCap (WQAIX) ● Westwood Real Estate Income (KIFYX) Westwood Management provides investment advisory services to the Westwood ETFs: ● Westwood Salient Enhanced Midstream Income ETF (MDST) ● Westwood Salient Enhanced Energy Income ETF (WEEI) As of December 31, 2024, AUM in the Westwood Funds® totaled $3.9 billion.
Biggest changeOur sub-advisory fees are generally computed based upon the average daily AUM and are payable on a monthly basis. 4 Westwood Management provides investment advisory services to the Westwood Funds® family of mutual funds: ● Westwood Alternative Income (WMNIX) ● Westwood Quality MidCap (WWMCX)* ● Westwood Broadmark Tactical Plus (SBTIX) ● Westwood Quality SmallCap (WHGSX) ● Westwood Broadmark Tactical Growth (FTGWX) ● Westwood Quality SMidCap (WHGMX) ● Westwood Multi-Asset Income (WHGHX) ● Westwood Quality Value (WHGLX) ● Westwood Income Opportunity (WHGIX) ● Westwood MLP & Energy Infrastructure (SMLPX) ● Westwood Quality AllCap (WQAIX)* ● Westwood Real Estate Income (KIFYX) Westwood Management provides investment advisory services to the Westwood ETFs: ● Westwood Enhanced Income Opportunity ETF (YLDW) ● Westwood LBRTY Global Equity ETF (BFRE)* ● Westwood Salient Enhanced Midstream Income ETF (MDST) ● Westwood Salient Enhanced Energy Income ETF (WEEI) As of December 31, 2025, AUM in the Westwood Funds® totaled $3.9 billion and AUM in the Westwood ETFs totaled $0.2 billion. * Following our assessment of the commercial viability of Westwood Quality AllCap (WQAIX), Westwood Quality MidCap (WWMCX), and Westwood LBRTY Global Equity ETF (BFRE), we determined that closing and liquidating these funds was in the best interests of the funds and their shareholders.
SMidCap Value: Investments in equity securities of approximately 50 to 70 companies benchmarked to the Russell 2500 Value Index. Multi-Asset The Multi-Asset team employs an investment process that applies top-down views across asset classes along with bottom-up security selection, utilizing quantitative and fundamental tools to evaluate macro, micro and technical conditions across a range of asset classes.
SMidCap Value: Investments in equity securities of approximately 50 to 70 companies benchmarked to the Russell 2500 Value Index. Multi-Asset The Multi-Asset team employs an investment process that applies top-down views across asset classes along with bottom-up security selection, utilizing quantitative and fundamental tools to evaluate macro, micro and technical conditions 2 across a range of asset classes.
Advisory General Our advisory business encompasses six distinct investment capabilities — United States ("U.S.") Value Equity, Multi-Asset, Energy and Real Assets, Tactical Absolute Return, Income Alternatives and Managed Investment Solutions. Westwood Management provides investment advisory services to large institutions, including corporate retirement plans, public retirement plans, endowments and foundations.
Advisory General Our advisory business encompasses six distinct investment capabilities — United States ("U.S.") Value Equity, Multi-Asset, Energy and Real Assets, Tactical Absolute Return, Income Alternatives and Managed Investment Solutions ("MIS"). Westwood Management provides investment advisory services to large institutions, including corporate retirement plans, public retirement plans, endowments and foundations.
Investment Strategies We offer high-conviction equity, outcome-oriented solutions and liquid alternatives to address a wide range of investment objectives, including five strategies each having AUM exceeding $1 billion in AUM: LargeCap Value, Income Opportunity, SmallCap Value, MLP & Energy Infrastructure and SMidCap Value. U.S. Value Equity The U.S.
Investment Strategies We offer high-conviction equity, outcome-oriented solutions and liquid alternatives to address a wide range of investment objectives, including five strategies each having AUM exceeding $1 billion: LargeCap Value, Income Opportunity, SmallCap Value, MLP & Energy Infrastructure and SMidCap Value. U.S. Value Equity The U.S.
Our focus on transparency, corporate governance, life principles, ethical conduct and giving back to the communities in which we operate is central to our values. Governance Westwood is committed to the successful integration and promotion of ESG at the corporate level and the investment level.
Our focus on transparency, corporate governance, life principles, ethical conduct and giving back to the communities in which we operate is central to our values. Governance 10 Westwood is committed to the successful integration and promotion of ESG at the corporate level and the investment level.
In honoring Westwood’s history of community involvement and support of local charitable causes, Westwood supports and partners with organizations that embrace activities that align with Westwood’s core values of teamwork, excellence, integrity and placement of client and stakeholder interests above our own.
In honoring Westwood’s history of community involvement and support of local charitable causes, Westwood supports and partners with 11 organizations that embrace activities that align with Westwood’s core values of teamwork, excellence, integrity and placement of client and stakeholder interests above our own.
In addition, certain of our employees are registered with FINRA and various states and are subject to SEC, state and FINRA regulation. The failure of this company and/or employees to comply with relevant regulation could have a material adverse effect on our business.
In addition, certain of our employees are registered with FINRA and various states and are subject to SEC, state and FINRA regulation. The failure of the company and/or employees to comply with relevant regulation could have a material adverse effect on our business.
Westwood Management Corp. also acts as adviser to the Westwood Funds®, a family of mutual funds registered with the SEC under the Investment Company Act of 1940, as amended (the “Investment Company Act”). As an adviser to a registered investment company, Westwood Management Corp. must comply with the Investment Company Act and related regulations.
Westwood Management Corp. also acts as adviser to the Westwood Funds®, a family of mutual funds and Westwood ETFs registered with the SEC under the Investment Company Act of 1940, as amended (the “Investment Company Act”). As an adviser to a registered investment company, Westwood Management Corp. must comply with the Investment Company Act and related regulations.
Westwood’s ESG Steering Committee is responsible for ensuring the effective execution of our overall ESG strategy. Along with our CEO, this group sets the strategic direction for our ESG agenda, oversees implementation, and reviews our ESG strategy with our Board.
Westwood’s ESG Steering Committee is responsible for ensuring effective execution of our overall ESG strategy. Along with our CEO, this group sets the strategic direction for our ESG agenda, oversees its implementation, and reviews our ESG strategy with our Board.
We believe opportunities for future growth will come from our ability to: • generate growth in our investment management platform from new and existing clients and consultant relationships; • attract and retain key employees; • grow assets in our existing investment strategies; • foster continued growth of the wealth management platform and distribution channel; • expand intermediary distribution; • innovate to bring newly developed investment capabilities and vehicles to market; • pursue strategic corporate development opportunities; • continue to strengthen our brand name; and • develop or acquire new investment strategies.
We believe opportunities for future growth will come from our ability to: • generate growth in our investment management platform from new and existing clients and consultant relationships; • attract and retain key employees; • grow assets in our existing investment strategies; • foster continued growth of the wealth management platform and distribution channel; 6 • expand and enhance intermediary distribution; • innovate to bring newly developed investment capabilities and vehicles to market; • pursue strategic corporate development opportunities; • continue to strengthen our brand name; and • develop or acquire new investment strategies.
LargeCap Value: Investments in equity securities of approximately 40 to 60 companies benchmarked to the Russell 1000 Value Index. MidCap Value: Investments in equity securities of approximately 50 to 80 companies benchmarked to the Russell Midcap Value Index. 2 SmallCap Value: Investments in equity securities of approximately 50 to 70 companies benchmarked to the Russell 2000 Value Index.
LargeCap Value: Investments in equity securities of approximately 40 to 60 companies benchmarked to the Russell 1000 Value Index. MidCap Value: Investments in equity securities of approximately 50 to 80 companies benchmarked to the Russell 1000 Value Index. SmallCap Value: Investments in equity securities of approximately 50 to 70 companies benchmarked to the Russell 2000 Value Index.
The Texas Triangle is experiencing rapid growth in population and jobs and, in aggregate, represents the 15 th largest economy in the world. We anticipate continued interest from clients and prospective clients in our holistic wealth management approach, which leverages our long history and deep experience as a trust company and investment management firm.
The Texas Triangle is experiencing rapid growth in population and jobs and, in aggregate, represents the 8 th largest economy in the world. We anticipate continued interest from clients and prospective clients in our holistic wealth management approach, which leverages our long history and deep experience as a trust company and investment management firm.
Our growth strategy provides clients with more investment opportunities and diversifies our AUM and revenue sources, thereby reducing risk in any one area of investment and increasing our ability to attract new clients Our ten largest clients accounted for approximately 20% of our fee revenues for the year ended December 31, 2024.
Our growth strategy provides clients with more investment opportunities and diversifies our AUM and revenue sources, thereby reducing risk in any one area of investment and increasing our ability to attract new clients. Our ten largest clients accounted for approximately 20% of our fee revenues for the year ended December 31, 2025.
Institutional separate account minimums vary by investment strategy and generally range from $10 million to $25 million. Westwood Management also provides advisory services to financial advisors, individuals, the Westwood Funds ® mutual funds, and Westwood ETFs, as well as sub-advisory services to other mutual funds and pooled investment vehicles.
Institutional separate account minimums vary by investment strategy and generally range from $10 million to $25 million. Westwood Management also provides advisory services to financial advisors, individuals, the Westwood Funds ® mutual funds, Westwood ETFs, and private capital funds, as well as sub-advisory services to other mutual funds and pooled investment vehicles.
Our fundamental, financial materiality-based approach to identifying high-quality companies and businesses around the world leads our investment team to consider these issues in their fundamental analyses of the merits of a company's strategy, downside risk and valuation. As ESG integration and evaluation techniques evolve we will adapt to ensure compliance with our fiduciary responsibilities at all times.
Our fundamental, financial materiality-based approach to identifying high-quality companies and businesses around the world leads our investment team to consider these issues in their fundamental analyses of the merits of a company's strategy, downside risk and valuation. As ESG integration and evaluation techniques evolve we will adapt to ensure compliance with our fiduciary responsibilities.
Vista offers traditional banking services and provides clients of Westwood Trust efficient access to lines of credit secured by their investment portfolios. Our partnership enables Vista to refer its clients needing more complex financial planning and investment services to Westwood Wealth Management.
Vista offers traditional banking services and provides clients of Westwood Trust efficient access to lines of credit secured by their investment portfolios. Our partnership enables Vista to refer its clients needing more complex financial planning and investment services to Westwood Trust.
Salient Advisors is an SEC-registered investment adviser, a Commodity Futures Trading Commission ("CFTC") registered Commodity Pool Operator ("CPO") and a National Futures Association ("NFA") member. Salient Advisors is an advisor to the Westwood Salient Tactical Plus Fund, which is subadvised by Broadmark.
Salient Advisors is an SEC-registered investment adviser, a Commodity Futures Trading Commission ("CFTC") registered Commodity Pool Operator ("CPO") and a National Futures Association ("NFA") member. Salient Advisors is an advisor to the Westwood Salient Tactical Plus Fund, which is sub-advised by Broadmark.
No employees are represented by a labor union, and we believe our employee relations are favorable. As of December 31, 2024, approximately 15% of our employees held the Chartered Financial Analyst designation. Environmental, Social and Governance ESG Core Principles Since inception, we have fostered a corporate culture focused on a set of core values.
No employees are represented by a labor union, and we believe our employee relations are favorable. As of December 31, 2025, approximately 14% of our employees held the Chartered Financial Analyst designation. Environmental, Social and Governance ESG Core Principles Since inception, we have fostered a corporate culture focused on a set of core values.
We have found inspiration in Coach John Wooden’s Pyramid of Success™ which helps us aspire to and maintain a culture of teamwork, integrity and putting client interests ahead of our own. Our ESG focus is guided by the following six pillars: 1. Environmental impact; 2. Diversity, equity and inclusion; 3. Community; 4. Responsible investing; 5.
We have found inspiration in Coach John Wooden’s Pyramid of Success™ which helps us aspire to and maintain a culture of teamwork, integrity and putting client interests ahead of our own. Our ESG focus is guided by the following six pillars: 1. Environmental impact; 2. Diversity and inclusion; 3. Community; 4. Responsible investing; 5. Privacy and data protection; and 6.
These strategies seek to deliver positive absolute returns through market cycles. We believe that tactical portfolio allocation can actively manage market exposure by adapting to economic conditions and internal market momentum. These strategies appeal to clients who consider it unwise to be fully invested in equities during periods of intense speculation and monetary tightening within an overvalued market.
These strategies seek to deliver positive absolute returns through market cycles. We believe that tactical portfolio allocation can actively manage market exposure by adapting to economic conditions and internal market momentum. These strategies appeal to clients unwilling to be fully invested in equities during periods of intense speculation and monetary tightening within an overvalued market.
The principal investment strategy currently managed by the Energy and Real Asset team is: MLP & Energy Infrastructure: Provides access to a universe of energy infrastructure, MLPs and MLP-related companies with the potential to diversify a traditional stock/bond portfolio along with income and inflation protection. Tactical Absolute Return Our Tactical Absolute Return strategies are subadvised by Broadmark.
The principal investment strategy currently managed by the Energy and Real Assets team is: MLP & Energy Infrastructure: Provides access to a universe of energy infrastructure, MLPs and MLP-related companies with the potential to diversify a traditional stock/bond portfolio along with income and inflation protection. Tactical Absolute Return Our Tactical Absolute Return strategies are sub-advised by Broadmark.
Westwood Management, founded in 1983, provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds®, other mutual funds, individual investors and clients of Westwood Trust.
Westwood Holdings Group, founded in 1983, through Westwood Management, provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds®, other mutual funds, individual investors and clients of Westwood Trust.
Typical of the asset management industry, these agreements are usually terminable upon short notice and provide for revenues based on the market value of client AUM.
Typical of the asset management industry, these agreements are usually terminable upon short notice by either party and provide for revenues based on the market value of client AUM.
Diversity and Inclusion We believe that our culture of diversity and inclusion enables us to develop and fully utilize the strengths of our people. As of December 31, 2024, approximately 41% of our workforce was female and minorities represented approximately 32% of our workforce. Employees At December 31, 2024, we had 151 full-time employees, all located in the U.S.
Diversity and Inclusion We believe that our culture of diversity and inclusion enables us to develop and fully utilize the strengths of our people. As of December 31, 2025, approximately 41% of our workforce was female and minorities represented approximately 31% of our workforce. Employees At December 31, 2025, we had 148 full-time employees, all located in the U.S.
Privacy and data protection; and 6. Governance. 10 We include ESG pillars in conducting our business and measure ourselves against them because they make good sense. It improves our ability to create an environment that values true diversity, inclusiveness and transparency and ultimately supports long-term employee growth.
Governance. We include ESG pillars in conducting our business and measure ourselves against them because they make good sense. It improves our ability to create an environment that values true diversity, inclusiveness and transparency and ultimately supports long-term employee growth.
Many of our investment professionals have been prominent in print and electronic media, and we will continue to use creative ways to strengthen our brand name and reputation in our target markets. Develop or acquire new investment strategies. We constantly seek opportunities to expand our range of investment strategies available to existing and prospective clients.
Many of our investment professionals have been prominent in print and electronic media, and we will continue to seek creative approaches to strengthen our brand name and reputation in our target markets. Develop or acquire new investment strategies. We continuously seek opportunities to expand our range of investment strategies available to existing and prospective clients.
We have built a proprietary portfolio 7 management system to take the team’s custom solutions capabilities to market. We increased our proactive sales efforts throughout 2024 with well-received road shows focused on consultants and institutional plan sponsors. • Energy Secondaries private investment funds – we see attractive opportunities to acquire limited partnership interests in seasoned energy private equity funds.
We have built a proprietary portfolio management system to take the team’s custom solutions capabilities to market. We increased our proactive sales efforts throughout 2025 with well-received road shows focused on consultants and institutional plan sponsors. • Energy Secondaries private capital – we continue to see attractive opportunities to acquire limited partnership interests in energy private equity funds.
Westwood provided the initial capital to launch WEBs and will provide distribution resources and administrative support, with an option to buy the entity subject to certain growth milestones Pursue strategic corporate development opportunities. We continually evaluate strategic corporate development opportunities to augment our organic growth.
Westwood provided the initial capital to launch WEBs and provides distribution resources and administrative support, with an option to buy the entity subject to achievement of certain growth milestones. Pursue strategic corporate development opportunities. We continually evaluate strategic corporate development opportunities to augment our organic growth.
We believe that the strength of our brand name has been a key component to our long-term success in the investment industry and will be instrumental to our future success. We have developed a strong brand name largely through our performance, coupled with high-profile coverage in investment publications and electronic media.
We believe that the strength of our brand name has been a key component to our long-term success in the investment industry and will be instrumental to our future success. We have developed a strong brand name largely thanks to our investment performance and attentive client service approach, coupled with high-profile coverage in investment publications and electronic media.
Sub-advising funds of other financial institutions allows us to extend our marketing reach via other firms' distribution systems. Intermediary and Retail In the intermediary and retail channel, our team directly markets our investment services, including the Westwood Funds®, to financial intermediaries, RIAs, broker-dealers, turnkey asset management programs and select mutual fund platforms.
Sub-advising funds of other financial institutions allows us to extend our marketing reach via other firms' distribution systems. Intermediary and Retail In the intermediary and retail channel, our team directly markets our investment services, including the Westwood Funds®, Westwood ETFs and private capital funds to financial intermediaries, RIAs, broker-dealers, and turnkey asset management programs.
We use proxy voting as a means of addressing corporate governance issues and identifying corporate actions that enhance shareholder value. Our process benefits from multiple inputs and directly involves our investment professionals. 11 Westwood uses guidelines from a third-party proxy research service, Glass, Lewis & Co.
We use proxy voting as a means of addressing corporate governance issues and identifying corporate actions that enhance shareholder value. Our process benefits from multiple inputs and directly involves our investment professionals. Westwood uses guidelines from a third-party proxy research service, Glass, Lewis & Co. ("Glass Lewis"), that we believe create value for our clients and cover most proxy issues.
Westwood Trust serves high net worth and ultra-high net worth individuals and families as well as small to medium-sized institutions. Our location within the Texas Triangle, comprised of Dallas-Fort Worth, Houston, San Antonio, and Austin, provides significant opportunities for future growth.
Foster continued growth of the wealth management platform and distribution channel. Westwood Trust serves high net worth and ultra-high net worth individuals and families as well as small to medium-sized institutions. Our location within the Texas Triangle, comprised of Dallas-Fort Worth, Houston, San Antonio, and Austin, provides significant opportunities for future growth.
Under such laws and regulations, agencies that regulate investment advisers have broad administrative powers, including the power to limit, restrict or prohibit advisers from carrying on their business if they fail to comply with such laws and regulations.
These laws and regulations are primarily intended to protect investment advisory clients. Under such laws and regulations, agencies that regulate investment advisers have broad administrative powers, including the power to limit, restrict or prohibit advisers from carrying on their business if they fail to comply with such laws and regulations.
Westwood Management and Westwood Trust collectively had AUM of approximately $16.6 billion and AUA of approximately $1.0 billion at December 31, 2024. We were incorporated under the laws of the State of Delaware on December 12, 2001.
Westwood Management and Westwood Trust collectively had AUM of approximately $16.5 billion and AUA of approximately $0.9 billion at December 31, 2025. We were incorporated under the laws of the State of Delaware on December 12, 2001.
For a discussion of our investment in WEBs, see "Growth Strategy" below. Available Information We maintain a website at westwoodgroup.com. Information contained on, or connected to, our website is not incorporated by reference into this Report and should not be considered part of this Report or any other filing that we make with the SEC.
Available Information We maintain a website at westwoodgroup.com. Information contained on, or connected to, our website is not incorporated by reference into this Report and should not be considered part of this Report or any other filing that we make with the SEC.
We also look for market environments in which we believe investors should be fully invested or should even overweight higher beta sectors and indices. Our goal is to be in concert with the overall economic/business cycle. Broadmark’s investment process is grounded in four pillars.
We also look for market environments in which we believe investors should be fully invested or should even overweight higher beta sectors and indices. Our goal is to be in concert with the overall economic/business cycle. Broadmark’s investment process is grounded in four pillars. The first three pillars – valuation, monetary policy and investor sentiment — are qualitative in nature.
Strategic Investments 1 Over the past several years we have made a number of strategic investments, including investments in Vista Bank, ("Vista"), Westwood Hospitality Fund I, LLC ("Westwood Hospitality"), Westwood Energy Secondaries Fund I, LLC ("Westwood Energy Secondaries"), the TXSE Group Inc ("TXSE") and Westwood Engineered Beta ("WEBs").
Strategic Investments Over the past several years we have made a number of strategic investments, including investments in Vista Bancshares, Inc. ("Vista"), Westwood Hospitality Fund I, LLC ("Westwood Hospitality"), the TXSE Group Inc. ("TXSE") and WEBs Investments Inc. ("WEBs").
Westwood was founded by a woman in 1983, when the finance industry had only a small percentage of women in the workforce. We embrace opportunity for individuals from all backgrounds and are committed to fostering unique ideas, perspectives and experiences.
Diversity and inclusion concepts are an integral part of our history, culture and identity. Westwood was founded by a woman in 1983, when the finance industry had only a small percentage of women in the workforce. We embrace opportunity for individuals from all backgrounds and are committed to fostering unique ideas, perspectives and experiences.
Growth Strategy 6 We believe we have established a strong platform to support future growth, deriving strength from the experience and capabilities of our management team and our skilled investment, distribution and client service professionals.
We also seek asset growth generated by referrals from existing clients. Growth Strategy We believe we have established a strong platform to support future growth, deriving strength from the experience and capabilities of our management team and our skilled investment, distribution and client service professionals.
We continually seek to expand AUM by organically growing our current investment strategies and by adding new products like our Salient Acquisition in 2022, the acquisition of a controlling interest in Broadmark in 2023, the addition of our Managed Investment Solutions team in 2023, and the launch of our first two actively-managed ETFs in 2024.
We continually seek to expand AUM by organically growing our current investment strategies and by adding new products as we did via our Salient Acquisition in 2022 (the "Salient Acquisition"), the acquisition of a controlling interest in Broadmark in 2023, the addition of our MIS team in 2023, and the launch of ETFs in 2024 and 2025.
Seeks to produce above-average, risk-adjusted returns in any market environment while exhibiting less downside volatility than the S&P 500 ® Index by investing mainly in a diversified portfolio of instruments with exposure to U.S. 3 and non-U.S. equity securities.
Seeks to produce above-average, risk-adjusted returns in any market environment while exhibiting less downside volatility than the S&P 500 ® Index by investing mainly in a diversified portfolio of instruments with exposure to U.S. and non-U.S. equity securities. Designed to help investors sidestep market downturns while attempting to participate in market upsides via continuous active management of portfolio market exposure.
We employ a multi-strategy process seeking to generate positive absolute returns through a short duration yield portfolio of global fixed income securities, convertible arbitrage and macro-hedging, with a focus on convertible arbitrage for reduced correlation and market exposure.
Our framework consists of three primary sources of return that aim to neutralize systematic risk. We employ a multi-strategy process seeking to generate positive absolute returns through a short duration yield portfolio of global fixed income securities, convertible arbitrage and macro-hedging, with a focus on convertible arbitrage for reduced correlation and market exposure.
Our common stock is listed on the New York Stock Exchange under the ticker symbol "WHG." We are a holding company whose principal assets consist of the capital stock and ownership interests of our operating subsidiaries, primarily Westwood Management, Westwood Trust and Broadmark Asset Management, LLC ("Broadmark").
Our common stock is listed on the New York Stock Exchange under the ticker symbol "WHG." We are a holding company whose principal assets consist of the capital stock and ownership interests of our operating subsidiaries, primarily Westwood Management and Westwood Trust. The success of our business is dependent on client, institutional investment consultant and intermediary relationships.
The Finance Code provides for and regulates a variety of matters, such as: • minimum capital maintenance requirements; • restrictions on dividends; • restrictions on investments of restricted capital; • lending and borrowing limitations; • prohibitions against engaging in certain activities; • periodic fiduciary and information technology examinations by the Texas Department of Banking Commissioner; 9 • furnishing periodic financial statements to the Texas Department of Banking Commissioner; • fiduciary record keeping requirements; and • prior regulatory approval for certain corporate events (mergers, sale or purchase of all or substantially all trust company assets, and transactions transferring control of a trust company).
The Finance Code provides for and regulates a variety of matters, such as: • minimum capital maintenance requirements; • restrictions on dividends; • restrictions on investments of restricted capital; • lending and borrowing limitations; • prohibitions against engaging in certain activities; • periodic fiduciary and information technology examinations by the Texas Department of Banking Commissioner; • furnishing periodic financial statements to the Texas Department of Banking Commissioner; • fiduciary record keeping requirements; and • prior regulatory approval for certain corporate events (mergers, sale or purchase of all or substantially all trust company assets, and transactions transferring control of a trust company). 9 The Finance Code gives the Texas Department of Banking Commissioner broad regulatory powers (including penalties and civil and administrative actions) if the trust company violates certain provisions of the Finance Code, including implementing conservatorship or closure if Westwood Trust is determined to be in a "hazardous condition" (as defined by applicable law).
The first three pillars – valuation s , monetary policy and investor sentiment — are mostly qualitative in nature. The fourth pillar is a quantitative assessment of market volume and breadth-based momentum. Using a combination of these qualitative and quantitative metrics, Broadmark seeks to manage risk and enhance alpha by tactically phasing into and out of major equity cycles.
The fourth pillar is a quantitative assessment of market volume and breadth-based momentum. Using a combination of these qualitative and quantitative metrics, Broadmark seeks to manage risk and enhance alpha by tactically phasing into and out of major equity cycles.
Equity portfolios are generally patterned after the institutional strategies offered by Westwood Management or developed by our internal investment teams. Fixed income portfolios consist of targeted "laddered" portfolios of primarily high-quality municipal securities, corporate securities and Treasury bills. Westwood Trust also sponsors a range of commingled funds in which client assets are commingled to achieve economies of scale.
Equity portfolios are generally patterned after the institutional strategies offered by Westwood Management or developed by our internal investment teams. Fixed income portfolios consist of taxable and tax-exempt portfolios with a high credit quality and intermediate duration bias. Westwood Trust also sponsors a range of commingled funds in which client assets are commingled to achieve economies of scale.
These funds are designed to provide advisors and investors with a robust solution for generating high distributable monthly income, combining dividend yield and options premiums from covered calls, while offering the potential for equity appreciation within the midstream energy and broad energy sectors, respectively.
These Enhanced Income Series TM funds are designed to provide advisors and investors with a robust solution for generating high distributable monthly income, combining dividend yield and options premiums from covered calls, while offering the potential for equity appreciation across multiple asset classes.
Grow assets in our existing investment strategies . We have significant capacity to manage additional assets across our investment management platform. We have considerably expanded our range of investment strategies and capabilities through the Salient Acquisition and the addition of Managed Investment Solutions, further enhancing our growth opportunities. Foster continued growth of the wealth management platform and distribution channel.
Grow assets in our existing investment strategies . We have significant capacity to manage additional assets across our investment management platform. We have considerably expanded our range of investment strategies and capabilities through the Salient Acquisition, the addition of MIS and the launch of our Energy Secondaries private capital platform, further enhancing our growth opportunities.
Distribution Channels Westwood Management investment funds and advisory services are distributed through two primary market channels - Institutional and Intermediary. Our Distribution sales and support infrastructure supports dedicated marketing and client service in both channels. Westwood Wealth Management provides wealth and investment management solutions primarily to individuals and utilizes both Westwood Management and external investment management services.
Our Distribution sales and support infrastructure supports dedicated marketing and client service in both channels. Westwood Trust provides wealth and investment management solutions primarily to individuals and utilizes both Westwood Management and external investment management services.
Westwood Trust’s commingled funds fall within two basic categories: personal trusts (common trust funds) and employee benefit trusts (collective investment funds). Westwood Trust sponsors commingled funds for several of the investment strategies managed by Westwood Management.
Westwood Trust’s commingled funds fall within two basic categories: personal trusts (common trust funds) and employee benefit trusts (collective investment funds). Westwood Trust sponsors commingled funds for several of the investment strategies managed by Westwood Management. Westwood Trust also develops asset allocation models for certain clients utilizing its commingled funds, mutual funds managed by Westwood Management and non-affiliated mutual funds.
Risk Factors.” General We manage investment assets and provide services for our clients through our subsidiaries, Westwood Management Corp., Westwood Advisors, L.L.C., Salient Advisors, L.P. and Broadmark Asset Management LLC (each of which is a registered investment adviser ("RIA") registered with the Securities and Exchange Commission ("SEC"), and Salient Capital, L.P., SEC-registered broker-dealer and Financial Industry Regulatory Authority ("FINRA") member, collectively referred to hereinafter together as "Westwood Management") and Westwood Trust ("Westwood Wealth Management").
("Salient Advisors") and Broadmark Asset Management LLC ("Broadmark"), (each of which is a registered investment adviser ("RIA") registered with the Securities and Exchange Commission ("SEC"), and Salient Capital, L.P., ("SCLP") an SEC-registered broker-dealer and Financial Industry Regulatory Authority ("FINRA") member, collectively referred to hereinafter together as "Westwood Management") and Westwood Trust.
Investment Services Westwood Trust utilizes a consultative approach in developing a portfolio asset allocation for individual clients. Our approach involves examining clients' financial situations, including their current portfolio of investments, and advising clients on ways to reduce risk, enhance investment returns and strengthen their financial position based on each client’s unique objectives and constraints.
Our approach involves examining clients' financial situations, including their current investment portfolio, and advising clients on ways to reduce risk, enhance investment returns and strengthen their financial position based on each client’s unique objectives and constraints.
Select Equity Strategy The Westwood Select Equity strategy aims to provide low-frequency turnover and tax efficiency to high net worth individuals. The offering allows individuals to own a diversified portfolio of best ideas from across Westwood's investment teams. These portfolios include value and growth stocks, along with small-, mid- and large-cap stocks.
The offering allows individuals to own a diversified portfolio representing our best ideas from across Westwood's investment teams. These portfolios include value and growth stocks, along with small-, mid- and large-capitalization stocks. Westwood Select Equity is also available without the tax efficiency overlay. Dividend Select Strategy The Westwood Dividend Select strategy aims to provide dividend income to investors.
In January 2023 we acquired an additional 32% interest in Broadmark, increasing our ownership of Broadmark to approximately 80%, which represents a controlling interest for financial statement consolidation purposes (the "Broadmark Acquisition").
In January 2023 we acquired an additional 32% interest in Broadmark, increasing our ownership of Broadmark to approximately 80%, which represents a controlling interest for financial statement consolidation purposes (the "Broadmark Acquisition"). Our revenues are generally derived from fees based on a percentage of assets under management ("AUM") and assets under advisement ("AUA").
Social Impact and Corporate Giving Westwood has a long history of community involvement and support of local charitable causes. This involvement is a cornerstone of our culture, drives employee engagement and makes employees proud to work at Westwood.
This involvement is a cornerstone of our culture, drives employee engagement and makes employees proud to work at Westwood.
We believe alternative approaches to income investing can provide diversified sources of risk and return and potentially reduce volatility. Absolute return-oriented and yield-focused strategies for investing in securities not typically found in traditional fixed income portfolios can help investors produce returns from non-traditional sources with low correlation and enhanced portfolio diversification.
Absolute return-oriented and yield-focused strategies for investing in securities not typically found in traditional fixed income portfolios can help investors produce returns from non-traditional sources with low correlation and enhanced portfolio diversification. 3 Alternative Income: We believe that a market-neutral approach utilizing convertible arbitrage and opportunistic fixed income can serve as a complement to bond allocations.
Westwood Select Equity is also available without the tax efficiency overlay. Dividend Select Strategy The Westwood Dividend Select strategy aims to provide dividend income to investors. The offering allows investors to own a diversified portfolio of dividend-producing equity securities. These portfolios primarily include value stocks, along with mid- and large-cap stocks.
The offering allows investors to own a diversified portfolio of dividend-producing equity securities. These portfolios primarily include value stocks, along with mid- and large-capitalization stocks. Thematic Innovation and Growth The Thematic Innovation and Growth strategy aims to provide long-term appreciation to investors.
Developing new investment strategies and building the organization to support these strategies can result in incurring expenses before significant offsetting revenues are realized. We continue to evaluate new strategies and resources in terms of meeting actual and potential investor needs. During 2022 we acquired the asset management business of Salient Partners, L.P. (the "Salient Acquisition").
We have developed investment strategies that we expect to be attractive in our target institutional, wealth management and intermediary markets. Developing new investment strategies and building the organization to support these strategies can result in incurring expenses before significant offsetting revenues are realized. We continue to evaluate new strategies and resources in terms of meeting actual and potential investor needs.
We also focus on expanding our relationships with financial intermediaries that manage discretionary mutual fund models. Our Intermediary sales team markets our mutual funds, ETFs and separately managed accounts directly to select broker-dealers and RIAs. Managed accounts are similar to mutual fund relationships in that a third-party financial institution, such as a broker-dealer or RIA, trades securities using our model.
We also focus on expanding our relationships with financial intermediaries that manage discretionary mutual fund and ETF models. Managed accounts are similar to sub-advisory relationships in that a third-party financial institution, such as a broker-dealer or RIA, trades securities using our model. The typical managed account client is a high net worth individual or small institution.
Trust General Westwood Trust provides fiduciary and investment services to high net worth individuals and families, non-profit endowments and foundations, public and private retirement plans and individual retirement accounts. Westwood Trust is chartered and regulated by the Texas Department of Banking. Fees charged by Westwood Trust are separately negotiated with each client and are typically based on AUM.
WQAIX and WWMCX were liquidated on February 24, 2026, and BFRE will be liquidated on March 6, 2026. Trust General Westwood Trust provides fiduciary and investment services to high net worth individuals and families, non-profit endowments and foundations, public and private retirement plans and individual retirement accounts. Westwood Trust is chartered and regulated by the Texas Department of Banking.
We have developed a world-class ETF vendor ecosystem to support future ETF launches. • Partnership with WEBs Investments Inc. – in the fourth quarter of 2024 we partnered with a newly launched firm, WEBs Investments Inc., to develop and launch innovative investment strategies for investors and advisors.
We have deployed an ETF ecosystem with top-tier partners, which can serve as a platform for future ETF launches. • Partnership with WEBs Investments Inc. – in late 2024 we partnered with a newly launched firm, WEBs Investments Inc., to develop and launch innovative investment strategies for investors and advisors.
Wealth Management In our wealth management channel, we generate awareness of our trust fiduciary and investment services through investment consultants, centers of influence, community involvement, and targeted direct marketing to high net worth individuals, families and small to medium-sized institutions. We also seek asset growth generated by referrals from existing clients.
In these arrangements, the third-party financial institution is responsible to the end client for client service, operations and accounting. Wealth Management In our wealth management channel, we generate awareness of our trust fiduciary and investment services through investment consultants, centers of influence, community involvement, and targeted direct marketing to high net worth individuals, families and small to medium-sized institutions.
High Alpha Strategy The Westwood High Alpha strategy aims to provide long-term appreciation to investors. The offering allows investors to own a concentrated portfolio of securities to provide higher returns commensurate with higher volatility. These portfolios primarily include growth stocks in the mid- to large-capitalization range.
The offering allows investors to own a concentrated portfolio of securities to provide higher returns commensurate with higher volatility. These portfolios primarily include growth stocks in the mid- to large-capitalization range. Distribution Channels Westwood Management investment funds and advisory services are distributed through two primary market channels - Institutional and Intermediary.
Our ability to grow AUM is primarily dependent on our competitive investment performance and success in building strong relationships with clients, investment consulting firms, financial intermediaries and RIAs.
BFRE seeks to track the TOBAM LBRTY® All World Equity Index. The approach is grounded in academic research highlighting the economic advantages of democratic nations. Our ability to grow AUM is primarily dependent on our competitive investment performance and success in building strong relationships with clients, investment consulting firms, financial intermediaries and RIAs.
Generate growth from new and existing clients and consultant relationships . A primary business objective is to maintain and enhance existing relationships with clients, investment consultants and intermediaries by providing value-added investment opportunities, performance and excellent client service. Over the last few years, we have expanded and restructured our distribution team to improve our proactive sales and client engagement strategy.
Generate growth from new and existing clients and consultant relationships . A primary business objective is to maintain and enhance existing relationships with clients, investment consultants and intermediaries by providing value-added investment opportunities, performance and excellent client service. We pursue growth via targeted sales and marketing efforts that showcase our boutique, innovative offerings across our product platform.
Westwood’s Corporate Responsibility Committee, together with our investment team’s bi-monthly review of ballots, evaluates the alignment of Glass-Lewis proxy voting guidelines on environmental and social issues with our financial-materiality-based view of ESG integration. The Glass Lewis policy states that it will vote in favor when there is a clear link between the proposal and value enhancement or risk mitigation.
The Investment Operations Team, including the head of data governance, oversees the implementation of our proxy voting policy. Westwood’s Corporate Responsibility Committee, together with our investment team’s bi-monthly review of ballots, evaluates the alignment of Glass-Lewis proxy voting guidelines on environmental and social issues with our financial-materiality-based view of ESG integration.
Clients generally have at least $1 million in investable assets. Fiduciary Services Westwood Trust’s fiduciary services include but are not limited to: financial planning, wealth transfer planning, customizable trust services, trust administration and estate settlement. Westwood Trust also provides custodial services, tax reporting, accounting of trust income and principal, beneficiary and retiree distributions and safekeeping of assets.
Fees charged by Westwood Trust are separately negotiated with each client and are typically based on AUM. Clients generally have at least $1 million in investable assets. Fiduciary Services Westwood Trust’s fiduciary services include but are not limited to - financial planning, wealth transfer planning, customizable trust services, trust administration and estate settlement.
Diversity, Equity and Inclusion ("DEI") Diversity is an important part of our culture and identity; approximately 41% of our employees are women — many in senior positions — and approximately 32% of our employees self-identify as members of minority communities. DEI concepts are an integral part of our history, culture and identity.
We are committed to offsetting our carbon emissions generated through air travel which makes up a substantial portion of our carbon emissions. Diversity and Inclusion Diversity is an important part of our culture and identity; approximately 41% of our employees are women — many in senior positions — and approximately 31% of our employees self-identify as members of minority communities.
Westwood Management is party to sub-advisory agreements with other investment advisers under which it performs similar services under advisory agreements. Our sub-advisory fees are generally computed based upon the average daily AUM and are payable on a monthly basis.
Westwood Management is party to sub-advisory agreements with other investment advisers under which it performs similar services under advisory agreements.
The success of our business is dependent on client, institutional investment consultant and intermediary relationships. In addition to offering attractive investment opportunities and investment performance, we believe that client service is of paramount importance in the asset management business.
In addition to offering attractive investment opportunities and investment performance, we believe that client service is of paramount importance in the asset management business. Accordingly, a major business focus for us is to build strong relationships with clients to enhance our ability to anticipate their needs and satisfy their investment objectives.
The allocation of assets by many investors from active equity investing to index funds, fixed income or similar asset classes has enhanced the ability of firms offering non-equity asset classes and passive equity management to compete more effectively with us.
The allocation of assets by many investors from active equity investing has enhanced the ability of firms offering passive equity management to compete more effectively with us. The demand for passive strategies with low-fee structures has rapidly increased and investors frequently demand customized and personalized strategies to fit their investment needs.
Our operating structure can support a larger business and we believe we are able to accommodate growth by acquisition, product innovation and internal growth within our client base. We have developed investment strategies that we expect to be attractive in our target institutional, wealth management and intermediary markets.
Our team approach is designed to deliver efficient, responsive service to our clients, while innovating investment strategies and product alternatives. Our operating structure can support a larger business and we believe we are able to accommodate growth by acquisition, product innovation and internal growth within our client base.
A significant percentage of Westwood Trust’s asset inflows stems from referrals along with gathering additional assets from existing clients, trends we see continuing. Expand intermediary distribution . For the past several years, we have expanded our geographic approach and focused coverage for intermediary distribution, building up our intermediary sales team to extend our reach and accelerate growth in top markets.
A significant percentage of Westwood Trust’s asset inflows stems from referrals along with gathering additional assets from existing clients, trends we see continuing. Expand and enhance intermediary distribution .
Our goal is to vote all proxies and we generally follow the recommendations of our proxy research service however our Research Analysts occasionally recommend a vote that differs from Glass Lewis. We vote against recommendations when we believe that it serves our clients’ best interests. An annual summary of voting is sent to each client for whom proxies are voted.
We vote against recommendations when we believe that it serves our clients’ best interests. An annual summary of voting is sent to each client for whom proxies are voted. Social Impact and Corporate Giving Westwood has a long history of community involvement and support of local charitable causes.
Westwood Trust Enhanced Balanced® portfolios allocate assets among these asset classes into a customizable portfolio for clients seeking to maximize return for a given level of risk. Periodic adjustments are made to asset class weightings in Enhanced Balanced® portfolios based on historical returns, risk and correlation data, and our current capital markets outlook.
Enhanced Balanced® Portfolios Westwood Trust is a strong proponent of asset class diversification and offers its clients the ability to diversify among many different asset classes. Westwood Trust Enhanced Balanced® portfolios allocate assets among these asset classes into a customizable portfolio for clients seeking to maximize return for a given level of risk.
Westwood Hospitality is a private investment fund seeded via our investment that we offer to clients of Westwood Trust. Westwood Energy Secondaries is a private investment fund seeded via our investment that we offer to our clients. TXSE is a private company that offers expansion potential for our Texas presence, specifically in the Texas triangle.
Westwood Hospitality is a private investment fund seeded via our investment that we offer to clients of Westwood Trust. 1 TXSE is a private company that is the parent company of the Texas Stock Exchange, a national securities exchange built and headquartered in Dallas, Texas. For a discussion of our investment in WEBs, see "Growth Strategy" below.
The Salient Acquisition, the addition of our Managed Investment Solutions team, and the launch of our first two ETFs have significantly expanded our product range and distribution capabilities. We plan to leverage our increased scale and broader product availability to enhance offerings to institutional, intermediary and wealth management clients.
We plan to leverage our increased scale and broader product availability to enhance offerings to institutional, intermediary and wealth management clients.
The process of obtaining a new client typically takes twelve to eighteen months from the time of initial contact. While we have achieved success in competing for clients, we dedicate significant resources to this process over an extended period of time with no certainty of winning client mandates.
While we have achieved success in competing for clients, we dedicate significant resources to this process over an extended period of time with no certainty of winning client mandates. Regulation 8 Virtually all aspects of our business are subject to federal, state and other non-U.S. jurisdictions' laws and regulations.
In summary, our competitive landscape is intense and dynamic, which may affect our ability to compete successfully. 8 Most prospective clients perform a thorough review of an investment manager’s background, investment policies and performance before committing assets and many prospective clients invite competing firms to make presentations.
Most prospective clients perform a thorough review of an investment manager’s background, investment policies and performance before committing assets and many prospective clients invite competing firms to make presentations. The process of obtaining a new client typically takes twelve to eighteen months from the time of initial contact.
Westwood Trust, founded as a state-chartered trust company in 1974, provides trust, custodial and investment management services through the use of commingled funds and individual securities to institutions and high net worth individuals. Our revenues are generally derived from fees based on a percentage of assets under management ("AUM") and assets under advisement ("AUA").
Westwood Trust, founded as a state-chartered trust company in 1974, provides trust, custodial and investment management services through the use of commingled funds and individual securities to institutions and high net worth individuals. Broadmark is a San Francisco-based RIA managing and/or sub-advising mutual funds, retail and institutional separately-managed accounts. SCLP serves as a sub-placement agent for private placements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMany financial markets are less developed or efficient than U.S. financial markets with limited liquidity and higher price volatility and may also lack an established regulatory framework. Liquidity and price volatility may be adversely affected by political or economic events, government policies and social or civil unrest within a particular country.
Biggest changeInvestments in non-U.S. issuers may also be affected by tax policies in countries or regions in which we are invested, as well as political, social and economic uncertainty or other diplomatic developments. Many financial markets are less developed or efficient than U.S. financial markets with limited liquidity and higher price volatility and may also lack an established regulatory framework.
We, as a public company, have controls and procedures that relate to cybersecurity disclosure and are required under the federal securities laws to disclose information relating to certain cyber attacks or other information security breaches.
As a public company, we have controls and procedures that relate to cybersecurity disclosure and are required under the federal securities laws to disclose information relating to certain cyber attacks or other information security breaches.
The potential risks associated with successful integration and realization of benefits include, but are not limited to the following: • our due diligence may not identify or fully assess valuation issues, potential liabilities or other acquisition risks; • acquired entities may not achieve anticipated revenue targets, cost savings or other synergies or benefits, or acquisitions may not result in improved operating performance, which could adversely affect our earnings, and we may be unable to recover investments in any such acquisitions; • we may have difficulty integrating acquired businesses, resulting in unforeseen difficulties and greater expenses than expected; • we may have difficulty entering into new markets in which we are not experienced in an efficient and cost-effective manner while maintaining adequate standards, controls and procedures; • key personnel within an acquired organization may resign from their related positions resulting in a significant loss to our strategic and operational efficiency associated with the acquired company; • the effectiveness of our daily operations may be reduced by the redirection of employees and other resources to acquisition and integration activities; • we may assume liabilities of an acquired business (including litigation, tax liabilities, and other contingent liabilities), including liabilities that were unknown at the time of the acquisition, that pose future risks to our working capital needs, cash flows and the profitability of related operations; • we may assume unprofitable projects that pose future risks to our working capital needs, cash flows and the profitability of related operations; or • business acquisitions may include substantial transactional costs to complete the acquisition that exceed the estimated financial and operational benefit.
The potential risks associated with successful integration and realization of benefits include, but are not limited to the following: • our due diligence may not identify or fully assess valuation issues, potential liabilities or other acquisition risks; • acquired entities may not achieve anticipated revenue targets, cost savings or other synergies or benefits, or acquisitions may not result in improved operating performance, which could adversely affect our earnings, and we may be unable to recover investments in any such acquisitions; • we may have difficulty integrating acquired businesses, resulting in unforeseen difficulties and greater expenses than expected; • we may have difficulty entering into new markets in an efficient and cost-effective manner while maintaining adequate standards, controls and procedures; • key personnel within an acquired organization may resign from their related positions resulting in a significant loss to our strategic and operational efficiency associated with the acquired company; • the effectiveness of our daily operations may be reduced by the redirection of employees and other resources to acquisition and integration activities; • we may assume liabilities of an acquired business (including litigation, tax liabilities, and other contingent liabilities), including liabilities that were unknown at the time of the acquisition, that pose future risks to our working capital needs, cash flows and the profitability of related operations; • we may assume unprofitable projects that pose future risks to our working capital needs, cash flows and the profitability of related operations; or • business acquisitions may include substantial transactional costs to complete the acquisition that exceed the estimated financial and operational benefit.
Business acquisitions are subject to the risks commonly associated with such transactions including, among others, potential exposure to unknown liabilities of acquired companies and to acquisition costs and expenses, the difficulty and expense of integrating the operations and personnel of the acquired companies, potential disruptions to the business of the combined company and potential diversion of management’s time and attention, the impairment of relationships with and the possible loss of key employees and clients as a result of changes in management, potential litigation or other legal risks, potential write-downs related to goodwill impairments in connection with acquisitions and dilution to the stockholders of the combined company if the acquisition is made for stock of 18 the combined company.
Business acquisitions are subject to the risks commonly associated with such transactions including, among others, potential exposure to unknown liabilities of acquired companies and to acquisition costs and expenses, the difficulty and expense of integrating the operations and personnel of the acquired companies, potential disruptions to the business of the combined company and potential diversion of management’s time and attention, the impairment of relationships with and the possible loss of key employees and clients as a result of changes in management, potential litigation or other legal risks, potential write-downs related to goodwill impairments in connection with acquisitions and dilution to the stockholders of the combined company if the acquisition is made for stock of the combined company.
Although we believe such actions enable us to retain client assets and maintain our profit margins, if clients perceive a change in our investment or operational decisions favors a strategy to maximize short term results, they may withdraw funds, which could adversely affect our revenues and results of operations. 19 Insurance coverage may be inadequate to cover legal and regulatory proceedings.
Although we believe such actions enable us to retain client assets and maintain our profit margins, if clients perceive a change in our investment or operational decisions favors a strategy to maximize short term results, they may withdraw funds, which could adversely affect our revenues and results of operations. Insurance coverage may be inadequate to cover legal and regulatory proceedings.
In addition, during periods of slowing growth or declining revenues, profits and profit margins are adversely affected because certain expenses remain relatively fixed. 12 • Investment performance: Because we compete with many asset management firms based on our investment strategies, the maintenance and growth of AUM and AUA is largely dependent on the investment performance of the assets that we manage.
In addition, during periods of slowing growth or declining revenues, profits and profit margins are adversely affected because certain expenses remain relatively fixed. • Investment performance: Because we compete with many asset management firms based on our investment strategies, the maintenance and growth of AUM and AUA is largely dependent on the investment performance of the assets that we manage.
The addition of a new team using an investment strategy with which we may have limited or no experience may require additional resources to update our operational platform and could strain our operational resources and increase the possibility of operational errors. Additional investments may be required to improve our operational platform.
The addition of a new team using an investment strategy with which we may have limited or no experience may 14 require additional resources to update our operational platform and could strain our operational resources and increase the possibility of operational errors. Additional investments may be required to improve our operational platform.
We may continue to seek business acquisitions as a means of broadening our offerings and capturing additional opportunities. However, there is no guarantee that we will be successful in identifying target companies that meet our criteria for acquisition.
We may continue to seek business acquisitions as a means of broadening our offerings and capturing additional opportunities. However, there is no guarantee that we will be successful in identifying target companies that meet our criteria 17 for acquisition.
The development of new investment strategies, whether through acquisition or internal development, requires a substantial amount of time and significant financial resources, including expenses related to compensation, sales and marketing, 14 information technology, legal counsel and other professional services.
The development of new investment strategies, whether through acquisition or internal development, requires a substantial amount of time and significant financial resources, including expenses related to compensation, sales and marketing, information technology, legal counsel and other professional services.
Any such proceeding or liability could have a material adverse effect upon our business, financial condition, results of operations and business prospects. The regulatory environment in which we operate is subject to change.
Any such proceeding or liability could have a material adverse effect upon our business, financial condition, results of operations and business prospects. 13 The regulatory environment in which we operate is subject to change.
Such returns of capital reduce our asset base and could result in future needs for debt or capital infusions, which could have a material adverse impact on our business.
Such returns of 16 capital reduce our asset base and could result in future needs for debt or capital infusions, which could have a material adverse impact on our business.
Business — Regulation." We engage in product offerings and international business activities through our global multi-asset securities product offerings that are available to our international and domestic clients. As of December 31, 2024, approximately 1% of our AUM is managed for clients who are domiciled outside the U. S.
Business — Regulation." We engage in product offerings and international business activities through our global multi-asset securities product offerings that are available to our international and domestic clients. As of December 31, 2025, approximately 1% of our AUM is managed for clients who are domiciled outside the U. S.
The investment management and wealth management industry is highly competitive based on factors such as investment performance, fee rates, continuity of investment professionals and client relationships, the quality of client service, corporate positioning, business reputation and differentiated products.
The investment management and wealth management industry is highly competitive and innovative. 12 The investment management and wealth management industry is highly competitive based on factors such as investment performance, fee rates, continuity of investment professionals and client relationships, the quality of client service, corporate positioning, business reputation and differentiated products.
Our revenues from performance-based fees can fluctuate significantly between measurement periods, depending on how we perform relative to the indexes specified in these agreements. For example, we earned performance fees of $1.9 million in 2024, $1.6 million in 2023 and $1.0 million in 2022.
Our revenues from performance-based fees can fluctuate significantly between measurement periods, depending on how we perform relative to the indexes specified in these agreements. For example, we earned performance fees of $1.1 million in 2025, $1.9 million in 2024 and $1.6 million in 2023.
Our ability to market and sell a new investment strategy depends on our financial resources, the investment performance of the specific strategy, the timing of the offering, the timing of regulatory approvals and our marketing strategies. Once an investment strategy is developed, we must effectively introduce the strategy to existing and prospective clients.
Our ability to market and sell a new investment strategy depends on our financial resources, the investment performance of the specific strategy, the timing of the offering, the timing of regulatory approvals and our marketing strategies. Once an investment strategy is developed, we must effectively introduce the strategy to existing and prospective clients, as well as consultants.
We are dependent to a significant degree on our ability to maintain our relationships with clients, consultants, managed account platforms and other intermediaries. Our ten largest clients accounted for approximately 20%, 21% and 22% of our fee 17 revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
We are dependent to a significant degree on our ability to maintain our relationships with clients, consultants, managed account platforms and other intermediaries. Our ten largest clients accounted for approximately 20%, 20% and 21% of our fee revenues for the years ended December 31, 2025, 2024 and 2023, respectively.
A third-party vendor's failure to accurately perform important operations or follow our processes, policies and 15 procedures could result in the loss of clients, significant regulatory sanctions, fines, penalties and litigation, which could have a material adverse effect on our business, financial condition and results of operations.
A third-party vendor's failure to accurately perform important operations or follow our processes, policies and procedures could result in the loss of clients, significant regulatory sanctions, fines, penalties and litigation, which could have a material adverse effect on our business, financial condition and results of operations. We are a holding company dependent on the operations and funds of our subsidiaries.
Certain of our investment strategies have capacity constraints because there may be a limit to the number of securities available for certain strategies to operate effectively. In those instances, we may choose to limit access to new or existing investors. The investment management and wealth management industry is highly competitive and innovative.
Certain of our investment strategies have capacity constraints because there may be a limit to the number of securities available for certain strategies to operate effectively. In those instances, we may choose to limit access to new or existing investors.
If any such limited trading in our stock continues, it may be difficult for holders to sell their shares in the public market at any given time at prevailing prices. 16 The prevailing market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including actual or anticipated fluctuations in operating results; changes in market valuations of other similar companies; additions or departures of key personnel; future sales of common stock; deviations in net revenues or in losses from levels expected by the investment community; and trading volume fluctuations.
The prevailing market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including actual or anticipated fluctuations in operating results; changes in market valuations of other similar companies; additions or departures of key personnel; future sales of common stock; deviations in net revenues or in losses from levels expected by the investment community; and trading volume fluctuations.
We have incurred significant costs to develop new investment strategies, launch new mutual funds under the Westwood Funds® name, and upgrade our business infrastructure. We expect to continue to incur significant costs related to such improvements.
We have incurred significant costs to develop new investment strategies, launch ETFs and other investment vehicles, and upgrade our business infrastructure. We expect to continue to incur significant costs related to such improvements.
ERISA Section 408(b)(2) and related regulations require additional information to be provided to ERISA-governed retirement plans. We believe that changes in laws, rules and regulations, including those discussed above, have increased our administrative and compliance costs however we are unable to quantify the increased costs attributable to such changes. See "Item 1.
We believe that changes in laws, rules and regulations, including those discussed above, have increased our administrative and compliance costs however we are unable to quantify the increased costs attributable to such changes. See "Item 1.
Risks related to divestitures can include difficulties in the separation of the divested business, loss of clients, retention or obligation to indemnify certain liabilities, the failure of counterparties to satisfy payment obligations, unfavorable market conditions that may impact any earnout or contingency payment due to us, unexpected difficulties in losing employees of the divested business or asset impairments.
Risks related to divestitures can include difficulties in the separation of the divested business, loss of clients, retention or obligation to indemnify certain liabilities, the failure of counterparties to satisfy payment obligations, unfavorable market conditions that may impact any earnout or contingency payment due to us, unexpected difficulties in losing employees of the divested business or asset impairments. 18 As consumer demand for digital interaction with investment advisors and portfolios continues to grow, we are exploring opportunities to develop digital solutions to enhance services to our clients.
Accordingly, we are dependent on the cash flow generated by these operating subsidiaries and rely on dividends or other intercompany transfers from our operating subsidiaries to generate the funds necessary to meet our obligations.
We are a holding company, with no revenue-generating operations or assets other than our ownership interests in Westwood Management and Westwood Trust. Accordingly, we are dependent on the cash flow generated by these operating subsidiaries and rely on dividends or other intercompany transfers from our operating subsidiaries to generate the funds necessary to meet our obligations.
Legal and Regulatory Risks Our business is subject to extensive regulation, which is subject to frequent change, with attendant compliance costs and serious consequences for violations; expansion into international markets and introduction of new products and services increases our regulatory and operational risks. 13 Virtually all aspects of our business are subject to laws and regulations, including the Investment Advisers Act, the Investment Company Act, the Patriot Act, the Finance Code and anti-money laundering laws.
Legal and Regulatory Risks Our business is subject to extensive regulation, which is subject to frequent change, with attendant compliance costs and serious consequences for violations; expansion into international markets and introduction of new products and services increases our regulatory and operational risks.
These risks, among others, could adversely affect the performance of our strategies invested in securities of non-U.S. issuers and may be particularly acute in emerging or less developed markets.
Liquidity and price volatility may be adversely affected by political or economic events, government policies and social or civil unrest within a particular country. These risks, among others, could adversely affect the performance of our strategies invested in securities of non-U.S. issuers and may be particularly acute in emerging or less developed markets.
If we are unable to compete effectively, our earnings could be reduced, and our business could be adversely affected. Some of our strategies invest in the securities of non-U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. Some of our strategies offer access to global markets with exposure to non-U.S. companies.
Some of our strategies invest in the securities of non-U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. Some of our strategies offer access to global markets with exposure to non-U.S. companies. Fluctuations in foreign currency exchange rates could negatively affect the returns of clients invested in these strategies.
Technology and Privacy Risks Failure to implement and maintain effective cybersecurity controls could disrupt our operations and have a material adverse effect on our results of operations, reputation and stock price.
Technology and Privacy Risks Failure to implement and maintain effective cybersecurity controls could disrupt our operations and have a material adverse effect on our results of operations, reputation and stock price. 15 Our business is dependent on information technology systems and the cybersecurity controls we and our third party vendors have in place to protect those systems and the information contained therein.
Investors may be unable to buy or sell a certain quantity of our shares in the public market within one or more trading days.
Investors may be unable to buy or sell a certain quantity of our shares in the public market within one or more trading days. If any such limited trading in our stock continues, it may be difficult for holders to sell their shares in the public market at any given time at prevailing prices.
If we cannot provide reliable financial reports, our brand and operating results could be harmed. All internal control systems, no matter how well designed, contain inherent limitations, and systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
All internal control systems, no matter how well designed, contain inherent limitations, and systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 19 We cannot be certain that the measures we take to evaluate and improve our internal controls will ensure that we implement and maintain adequate controls over our financial processes and reporting.
As a result, we face increased operational, regulatory, compliance, marketing, client service, reputational and foreign exchange rate risks. Rapid regulatory change is occurring internationally with respect to financial institutions, including, but not limited to, anticipated revisions to the European Communities (Undertakings for Collective Investment in Transferable Securities, or "UCITS") Regulations 2011 and the Markets in Financial Instruments Directive.
As a result, we face increased operational, regulatory, compliance, marketing, client service, reputational and foreign exchange rate risks. Rapid regulatory change is occurring internationally with respect to financial institutions.
We may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation or enforcement of existing laws and regulations. In recent years, regulators have increased their oversight of the financial services industry. Some regulations focus on the investment management industry while other, more broadly focused regulations still affect our industry.
We may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation or enforcement of existing laws and regulations. The Dodd-Frank Act of 2010 significantly increased and revised the federal rules and regulations governing the financial services industry and has generally resulted in increased compliance and administrative requirements.
The Dodd-Frank Act of 2010 significantly increased and revised the federal rules and regulations governing the financial services industry and has generally resulted in increased compliance and administrative requirements. For example, the SEC’s adoption of Form PF and revisions to Form ADV impose additional reporting requirements for SEC-registered investment advisors.
For example, the SEC’s adoption of Form PF and revisions to Form ADV impose additional reporting requirements for SEC-registered investment advisors. ERISA Section 408(b)(2) and related regulations require additional information to be provided to ERISA-governed retirement plans.
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Fluctuations in foreign currency exchange rates could negatively affect the returns of clients invested in these strategies. Investments in non-U.S. issuers may also be affected by tax policies in countries or regions in which we are invested, as well as political, social and economic uncertainty or other diplomatic developments.
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If we are unable to compete effectively, our earnings could be reduced and our business could be adversely affected. In addition, the use of various technologies based on artificial intelligence ("AI") is expanding rapidly in our industry.
Removed
We are a holding company dependent on the operations and funds of our subsidiaries. We are a holding company, with no revenue-generating operations or assets other than our ownership interests in Westwood Management, Westwood Trust and Broadmark.
Added
Our competitors may have access to more advanced technology, including AI, which might enable our competitors to innovate better and more quickly, or to compete more effectively on quality and price, which could impact our profitability.
Removed
Our business is dependent on information technology systems and the cybersecurity controls we and our third party vendors have in place to protect those systems and the information contained therein.
Added
Interest in AI may increase competition and lower barriers to entry in the industry, and we may be unable to compete with the products or services offered by new competitors, resulting in lower earnings or the ability to operate sustainably.
Removed
As consumer demand for digital interaction with investment advisors and portfolios continues to grow, we are exploring opportunities to develop digital solutions to enhance services to our clients.
Added
Virtually all aspects of our business are subject to laws and regulations, including the Investment Advisers Act, the Investment Company Act, the Patriot Act, the Finance Code and anti-money laundering laws.
Removed
We cannot be certain that the measures we take to evaluate and improve our internal controls will ensure that we implement and maintain adequate controls over our financial processes and reporting.
Added
If we cannot provide reliable financial reports, our brand and operating results could be harmed.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have designed procedures to implement our cybersecurity policy, minimize cybersecurity threats to our clients and conduct reviews to monitor and ensure our policy is observed, properly implemented and amended or updated as necessary, including cybersecurity oversight, periodic risk assessments and external consultant reviews, access restrictions, ongoing training, governance policies and procedures, authentication protocols, secure access measures, and policies for elevating suspicious activities.
Biggest changeWe have designed procedures to implement our cybersecurity policy, minimize cybersecurity threats to our clients and conduct reviews to monitor and ensure our policy is observed, properly implemented and updated as necessary, including cybersecurity oversight, periodic risk assessments and external consultant reviews, access restrictions, ongoing training, governance policies and procedures, authentication protocols, secure access measures, and policies for elevating suspicious activities.
Along with management, our Board reviews our cybersecurity efforts and programs and is informed of cybersecurity risks primarily through discussions with management, educational sessions and exercises. Our Board’s responsibilities include, but are not limited to: 20 a. Overseeing effective implementation of cybersecurity initiatives and alignment with our policies and strategies; b.
Along with management, our Board reviews our cybersecurity efforts and programs and is informed of cybersecurity risks primarily through discussions with management, educational sessions and exercises. Our Board’s responsibilities include, but are not limited to: a. Overseeing effective implementation of cybersecurity initiatives and alignment with our policies and strategies; b.
Reviewing and updating our policies and procedures annually; c. Assigning all data within Westwood to an appropriate owner, and ensuring data owners have knowledge of such data and have an information classification selected for that data; d. Ensuring annual compliance with our information security management policies and procedures; e.
Reviewing and updating our policies and procedures annually; c. Assigning all data within Westwood to an appropriate owner, and ensuring data owners have knowledge of such data and have an information classification selected for that data; 20 d. Ensuring annual compliance with our information security management policies and procedures; e.
In the event of a cybersecurity breach Westwood management notifies our Board as soon as practicable, along with other affected parties including clients, regulatory bodies, third parties and employees, as necessary and required by applicable laws and regulations.
In the event of a cybersecurity breach Westwood management would notify our Board as soon as practicable, along with other affected parties including clients, regulatory bodies, third parties and employees, as necessary and required by applicable laws and regulations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe are subject from time to time to certain claims and legal proceedings arising in the ordinary course of our business. Item 4. Mine Safety Disclosures. Not applicable. 21 PART II
Biggest changeWe lease a limited amount of office space in Chicago, Illinois. We monitor these facilities to ensure their adequacy to serve our anticipated business needs. Item 3. Legal Proceedings. We are subject from time to time to certain claims and legal proceedings arising in the ordinary course of our business. Item 4. Mine Safety Disclosures. Not applicable. 21 PART II
Item 2. Properties. Westwood, Westwood Management and Westwood Trust conduct their principal operations using approximately 38,000 square feet of leased office space in Dallas, Texas pursuant to a lease with an initial term that expires in March 2026.
Item 2. Properties. Westwood, Westwood Management and Westwood Trust conduct their principal operations using approximately 30,000 square feet of leased office space in Dallas, Texas pursuant to a lease with an initial term that expires in 2036. In addition, we lease approximately 11,000 square feet of office space in Houston, Texas pursuant to a lease that expires in September 2029.
Removed
In addition, we lease approximately 11,000 square feet of office space in Houston, Texas pursuant to a lease that expires in September 2029. We lease a limited amount of office space in San Francisco, California and Chicago, Illinois. We monitor these facilities to ensure their adequacy to serve our anticipated business needs. Item 3. Legal Proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIndex Period ended December 31, Cumulative Five-Year Total Return 2019 2020 2021 2022 2023 2024 Westwood Holdings Group, Inc. $ 100.00 $ 49.85 $ 65.80 $ 45.20 $ 53.70 $ 64.90 (35.10) % Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 42.93 % S&P U.S.
Biggest changeIndex Period ended December 31, Cumulative Five-Year Total Return 2020 2021 2022 2023 2024 2025 Westwood Holdings Group, Inc. $ 100.00 $ 132.00 $ 90.52 $ 107.72 $ 130.20 $ 160.26 60.26 % Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 34.40 % S&P U.S.
The Board authorized an additional $5.0 million of repurchases under the share repurchase program in July 2016, an additional $10.0 million in February 2020, and an additional $10.0 million in April 2020. The share repurchase program has no expiration date and may be discontinued at any time by the Board of Directors.
The Board authorized an additional $5.0 million of repurchases under the share repurchase program in July 2016, an additional $10.0 million in February 2020, an additional $10.0 million in April 2020, and an additional $5.0 million in April 2025. The share repurchase program has no expiration date and may be discontinued at any time by the Board of Directors.
Market Information Our common stock trades on the New York Stock Exchange under the symbol "WHG." At December 31, 2024, there were approximately 130 record holders of our common stock, although we believe that the number of beneficial owners of our common stock is substantially greater.
Market Information Our common stock trades on the New York Stock Exchange under the symbol "WHG." At December 31, 2025, there were approximately 130 record holders of our common stock, although we believe that the number of beneficial owners of our common stock is substantially greater.
Dividends Declarations of cash dividends is at the discretion of the Board of Directors and is subject to limitations under the Delaware General Corporation Law. Westwood Holdings Group is the sole stockholder of Westwood Management and Westwood Trust.
Dividends Declarations of cash dividends is at the discretion of the Board of Directors and is subject to limitations under the Delaware General Corporation Law. Westwood Holdings Group is the sole beneficial owner of Westwood Management and Westwood Trust.
The closing price of our common stock on the last trading day of the year ended December 31, 2024 was $14.51 per share. Historical stock price performance is not necessarily indicative of future price performance. Item 6. Reserved. 23
The closing price of our common stock on the last trading day of the year ended December 31, 2025 was $17.21 per share. Historical stock price performance is not necessarily indicative of future price performance. Item 6. Reserved. 23
BMI Asset Management & Custody Banks Index 100.00 115.88 171.06 128.15 168.44 232.43 132.43 % The total return for our stock and for each index assumes $100 invested on December 31, 2019 in our common stock, the Russell 2000 Index, and the S&P U.S. BMI Asset Management & Custody Banks Index, including reinvestment of dividends.
BMI Asset Management & Custody Banks Index 100.00 147.62 110.59 145.36 200.58 211.25 111.25 % The total return for our stock and for each index assumes $100 invested on December 31, 2020 in our common stock, the Russell 2000 Index, and the S&P U.S. BMI Asset Management & Custody Banks Index, including reinvestment of dividends.
Removed
Between January 1, 2024 and December 31, 2024, under the share repurchase program, the Company repurchased 108,225 shares of our common stock at an average price of $12.46 per share, including commissions, for an aggregate purchase price of $1.3 million.
Added
As of December 31, 2025, $5.5 million of shares may yet be repurchased under our share repurchase plan.
Removed
The following table displays information with respect to the treasury shares we purchased during the year ended December 31, 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (1) Repurchase program (1) $ 500,000 April 20,059 $ 12.92 20,059 May 41,710 $ 12.37 41,710 June 24,577 $ 12.20 24,577 July 6,919 $ 12.30 6,919 August 9,924 $ 12.52 9,924 September 5,036 $ 12.73 5,036 Total 108,225 $ 12.46 108,225 (1) These purchases relate to the share repurchase program and were authorized in April 2020. 22 Performance Graph The following graph compares total stockholder returns of Westwood since December 31, 2019 with the total return of the Russell 2000 Index and the S&P U.S.
Added
The Company did not repurchase any shares of its common stock during the year ended December 31, 2025. 22 Performance Graph The following graph compares total stockholder returns of Westwood since December 31, 2020 with the total return of the Russell 2000 Index and the S&P U.S.

Item 7. Management's Discussion & Analysis

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

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Biggest changeFor the year ended December 31, 2024, our Economic Earnings decreased by 62% to $7.0 million compared with $18.3 million for the year ended December 31, 2023. 2024 Economic Earnings was impacted by higher revenues offset by losses from changes in the fair value of contingent consideration. 30 The following table provides a reconciliation of Income (loss) attributable to Westwood Holdings Group, Inc. to Economic Earnings: For the years ended December 31, (in thousands, except percentages and per share data) 2024 Change 2023 Change 2022 Change 2021 Change 2020 Income (loss) attributable to Westwood Holdings Group, Inc. $ 2,215 (77) % $ 9,520 (306) % $ (4,628) (147) % $ 9,763 (209) % $ (8,947) Stock-based compensation expense 5,537 (15) 6,518 9 6,001 3 5,834 (13) 6,701 Impairment expense — NM — NM — NM — NM 3,403 Intangible amortization 4,148 — 4,149 120 1,889 16 1,624 (6) 1,721 Currency translation adjustment reclassification — NM — NM — NM — NM 4,169 Tax benefit from goodwill amortization 340 (32) 500 66 302 27 237 — 237 Tax impact of adjustments to GAAP net income (loss) (5,275) 125 (2,345) 160 (901) (61) (2,309) (179) 2,922 Economic Earnings $ 6,965 (62) % $ 18,342 589 % $ 2,663 (82) % $ 15,149 48 % $ 10,206 Economic Earnings per Share $ 0.82 (64) % $ 2.26 402 % $ 0.45 (80) % $ 2.20 142 % $ 0.91 The following tables provide Economic Earnings by segment: For the years ended December 31, (in thousands, except percentages) 2024 Change 2023 Change 2022 Change 2021 Change 2020 Advisory net income $ 17,653 30 % $ 13,585 23 % $ 11,010 (34) % $ 16,783 781 % $ 1,905 Stock-based compensation expense 3,762 (16) 4,456 16 3,847 15 3,347 5 3,199 Impairment expense — NM — NM — NM — NM 3,403 Intangible amortization 2,665 — 2,674 633 365 183 129 (37) 206 Tax benefit from goodwill amortization 104 (60) 262 NM 66 NM — NM — Tax impact of adjustments to GAAP net income (3,500) 46 (2,404) (38) (3,865) 44 (2,679) (177) 3,495 Economic Earnings $ 20,684 11 % $ 18,573 63 % $ 11,423 (35) % $ 17,580 44 % $ 12,208 31 For the years ended December 31, (in thousands, except percentages) 2024 Change 2023 Change 2022 Change 2021 Change 2020 Trust net income $ 2,756 55 % $ 1,777 78 % $ 1,000 (82) % $ 5,660 89 % $ 2,991 Stock-based compensation expense 74 (77) 326 (31) 471 (37) 743 (28) 1,027 Intangible amortization 1,359 — 1,359 (1) 1,379 — 1,378 (2) 1,413 Tax benefit from goodwill amortization 236 (1) 238 1 236 — 237 — 237 Tax impact of adjustments to GAAP net income (780) 84 (424) (46) (779) (27) (1,060) (147) 2,274 Economic Earnings $ 3,645 11 % $ 3,276 42 % $ 2,307 (67) % $ 6,958 (12) % $ 7,942 For the years ended December 31, (in thousands, except percentages) 2024 Change 2023 Change 2022 Change 2021 Change 2020 Westwood Holdings net income (loss) $ (18,194) 211 % $ (5,842) (65) % $ (16,638) 31 % $ (12,680) (8) % $ (13,843) Stock-based compensation expense 1,701 (2) 1,736 3 1,683 (3) 1,744 (30) 2,475 Intangible amortization 124 (15) 146 1 145 24 117 15 102 Currency translation adjustment reclassification — NM — NM — NM — NM 4,169 Tax impact of adjustments to GAAP net income (loss) (995) (320) 453 (88) 3,743 162 1,430 (150) (2,847) Economic Earnings $ (17,364) 395 % $ (3,507) (68) % $ (11,067) 18 % $ (9,389) (6) % $ (9,944) Liquidity and Capital Resources As of December 31, Balance Sheet Data (in thousands) 2024 2023 Cash and cash equivalents $ 18,847 $ 20,422 Accounts receivable 14,453 14,394 Total liquid assets $ 33,300 $ 34,816 Trading securities $ 25,748 $ 32,674 Historically we have funded our operations and cash requirements with cash generated from operating activities.
Biggest changeFor the year ended December 31, 2025, our Economic Earnings increased by 105% to $14.3 million compared with $7.0 million for the year ended December 31, 2024. 2025 Economic Earnings was impacted by higher 2025 revenues and losses from changes in the fair value of contingent consideration in 2024. 30 The following table provides a reconciliation of income (loss) attributable to Westwood Holdings Group, Inc. to Economic Earnings: For the years ended December 31, (in thousands, except percentages and per share data) 2025 Change 2024 Change 2023 Change 2022 Change 2021 Income (loss) attributable to Westwood Holdings Group, Inc. $ 7,058 219 % $ 2,215 (77) % $ 9,520 (306) % $ (4,628) (147) % $ 9,763 Stock-based compensation expense 5,148 (7) 5,537 (15) 6,518 9 6,001 3 5,834 Intangible amortization 3,945 (5) 4,148 — 4,149 120 1,889 16 1,624 Tax benefit from goodwill amortization 533 57 340 (32) 500 66 302 27 237 Tax impact of adjustments to GAAP net income (loss) (2,388) (55) (5,275) 125 (2,345) 160 (901) (61) (2,309) Economic Earnings $ 14,296 105 % $ 6,965 (62) % $ 18,342 589 % $ 2,663 (82) % $ 15,149 Economic Earnings per Share $ 1.61 96 % $ 0.82 (64) % $ 2.26 402 % $ 0.45 (80) % $ 2.20 The following tables provide Economic Earnings (Loss) by segment: For the years ended December 31, (in thousands, except percentages) 2025 Change 2024 Change 2023 Change 2022 Change 2021 Advisory net income $ 19,862 13 % $ 17,653 30 % $ 13,585 23 % $ 11,010 (34) % $ 16,783 Stock-based compensation expense 3,106 (17) 3,762 (16) 4,456 16 3,847 15 3,347 Intangible amortization 2,543 (5) 2,665 — 2,674 633 365 183 129 Tax benefit from goodwill amortization 297 186 104 NM 262 NM 66 NM — Tax impact of adjustments to GAAP net income (1,483) (58) (3,500) 46 (2,404) (38) (3,865) 44 (2,679) Economic Earnings $ 24,325 18 % $ 20,684 11 % $ 18,573 63 % $ 11,423 (35) % $ 17,580 For the years ended December 31, (in thousands, except percentages) 2025 Change 2024 Change 2023 Change 2022 Change 2021 Trust net income $ 2,910 6 % $ 2,756 55 % $ 1,777 78 % $ 1,000 (82) % $ 5,660 Stock-based compensation expense 47 (36) 74 (77) 326 (31) 471 (37) 743 Intangible amortization 1,359 — 1,359 — 1,359 (1) 1,379 — 1,378 Tax benefit from goodwill amortization 236 — 236 (1) 238 1 236 — 237 Tax impact of adjustments to GAAP net income (369) (53) (780) 84 (424) (46) (779) (27) (1,060) Economic Earnings $ 4,183 15 % $ 3,645 11 % $ 3,276 42 % $ 2,307 (67) % $ 6,958 For the years ended December 31, (in thousands, except percentages) 2025 Change 2024 Change 2023 Change 2022 Change 2021 Other net loss $ (15,714) (14) % $ (18,194) 211 % $ (5,842) (65) % $ (16,638) 31 % $ (12,680) Stock-based compensation expense 1,995 17 1,701 (2) 1,736 3 1,683 (3) 1,744 Intangible amortization 43 (65) 124 (15) 146 1 145 24 117 Tax impact of adjustments to GAAP net income (loss) (536) (46) (995) (320) 453 (88) 3,743 162 1,430 Economic Earnings (Loss) $ (14,212) (18) % $ (17,364) 395 % $ (3,507) (68) % $ (11,067) 18 % $ (9,389) 31 Liquidity and Capital Resources As of December 31, Balance Sheet Data (in thousands) 2025 2024 Cash and cash equivalents $ 26,249 $ 18,847 Accounts receivable 16,751 14,453 Total liquid assets $ 43,000 $ 33,300 Liquid investments $ 17,887 $ 25,748 Historically we have funded our operations and cash requirements with cash generated from operating activities.
Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the 25 stated period. We recognize advisory fee revenues as services are rendered.
Advisory fees are paid quarterly in advance based on AUM on the last day of the preceding quarter, quarterly in 25 arrears based on AUM on the last day of the quarter just ended or are based on a daily or monthly analysis of AUM for the stated period. We recognize advisory fee revenues as services are rendered.
Our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill.
Our estimates are inherently uncertain and subject to refinement. As a result, during the 33 measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill.
Critical Accounting Estimates 33 The preparation of our Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent losses and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
Critical Accounting Estimates The preparation of our Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent losses and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
In the event we were to determine that a reporting unit's carrying value would more likely than not exceed its fair value, quantitative testing would be performed comparing carrying values to estimated fair values. 34 The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit.
In the event we were to determine that a reporting unit's carrying value would more likely than not exceed its fair value, quantitative testing would be performed comparing carrying values to estimated fair values. The quantitative analysis requires a comparison of each reporting unit’s carrying value to the fair value of the respective unit.
Westwood Mutual Funds Expenses for Westwood mutual funds relate to our marketing, distribution and administration of the Westwood Funds ® . Information Technology Information technology expenses include costs associated with proprietary investment research tools, maintenance and support, computing hardware, software licenses, telecommunications and other related costs.
Westwood Funds Expenses for Westwood funds relate to our marketing, distribution and administration of the Westwood Funds ® mutual funds and Westwood ETFs. Information Technology Information technology expenses include costs associated with proprietary investment research tools, maintenance and support, computing hardware, software licenses, telecommunications and other related costs.
(3) Mutual Funds include the Westwood Funds®, a family of mutual funds for which Westwood Management or Salient Advisors serves as advisor. These funds are available to individual investors, institutional investors and wealth management accounts.
(3) Mutual Funds & ETFs include the Westwood Funds®, a family of mutual funds and Westwood ETFs, for which Westwood Management or Salient Advisors serves as advisor. These funds are available to individual investors, institutional investors and wealth management accounts.
Net Change in Unrealized Appreciation (Depreciation) on Private Investments Net change in unrealized appreciation (depreciation) on private investments includes changes in the value of our private equity investments. Net Investment Income Net investment income primarily includes interest and dividend income on fixed income securities and money market funds.
Net Change in Unrealized Appreciation on Private Investments Net change in unrealized appreciation on private investments includes changes in the value of our private equity investments. Net Investment Income Net investment income primarily includes interest and dividend income on fixed income securities and money market funds.
Based on the qualitative analyses performed in 2024, we concluded that there were no changes that were reasonably likely to cause the fair value of the Advisory and Trust reporting units to be less than those reporting unit's carrying values, and determined that there was no impairment of our goodwill.
Based on the qualitative analyses performed in 2025, we concluded that there were no changes that were reasonably likely to cause the fair value of the Advisory and Trust reporting units to be less than those reporting unit's carrying values, and determined that there was no impairment of our goodwill.
If the carrying value exceeds the fair value, an impairment charge is recorded based on that difference. We completed our most recent annual goodwill impairment assessment during the third quarter of 2024 and determined that no goodwill impairment related to the Advisory or Trust segment was required.
If the carrying value exceeds the fair value, an impairment charge is recorded based on that difference. We completed our most recent annual goodwill impairment assessment during the third quarter of 2025 and determined that no goodwill impairment related to the Advisory or Trust segment was required.
For the years ended December 31, 2024 and 2023, changes in growth projections, due to increases in AUM and AUA values, and volatility assumptions were the primary drivers of changes in our fair value estimates. Goodwill Goodwill is tested at least annually for impairment.
For the years ended December 31, 2025 and 2024, changes in growth projections, due to increases in AUM and AUA values, and volatility assumptions were the primary drivers of changes in our fair value estimates. Goodwill Goodwill is tested at least annually for impairment.
(Gain) loss from change in fair value of contingent consideration (Gain) loss from change in fair value of contingent consideration consists of fair value adjustments related to contingent consideration from our 2022 acquisition of Salient, with gains representing reductions in value and losses representing increases in value. Acquisition expenses Acquisition expenses consist of costs related to the Salient Acquisition.
(Gain) loss from change in fair value of contingent consideration (Gain) loss from change in fair value of contingent consideration consists of fair value adjustments related to contingent consideration from the Salient Acquisition, with gains representing reductions in value and losses representing increases in value. Acquisition expenses Acquisition expenses consist of costs related to the Salient Acquisition.
We may also use cash from operations to pay dividends to our stockholders or for deferred contingent consideration payments. We had no debt as of December 31, 2024 and 2023.
We may also use cash from operations to pay dividends to our stockholders or for deferred contingent consideration payments. We had no debt as of December 31, 2025 and 2024.
Changes in working capital, especially accounts receivable and accounts payable, are generally the result of timing differences between collection of fees billed and payment of operating expenses. We had cash and liquid investments of $44.6 million and $53.1 million as of December 31, 2024 and 2023, respectively.
Changes in working capital, especially accounts receivable and accounts payable, are generally the result of timing differences between collection of fees billed and payment of operating expenses. We had cash and liquid investments of $44.1 million and $44.6 million as of December 31, 2025 and 2024, respectively.
Net outflows were primarily related to our LargeCap Value and SmallCap Value strategies. 27 Year Ended December 31, 2023 AUM (in millions) Institutional Wealth Management Mutual Funds Total Beginning of period assets* $ 6,968 $ 3,666 $ 4,145 $ 14,779 Client flows: Inflows 360 446 814 1,620 Outflows (936) (615) (1,347) (2,898) Net client flows (576) (169) (533) (1,278) Market appreciation (depreciation) 823 643 492 1,958 Net change 247 474 (41) 680 End of period assets $ 7,215 $ 4,140 $ 4,104 $ 15,459 * Certain assets under management acquired from Salient were reclassified from Mutual Funds to Institutional as of December 31, 2022 to be consistent with the classification of existing assets.
Year Ended December 31, 2023 AUM (in millions) Institutional Wealth Management Mutual Funds Total Beginning of period assets* $ 6,968 $ 3,666 $ 4,145 $ 14,779 Client flows: Inflows 360 446 814 1,620 Outflows (936) (615) (1,347) (2,898) Net client flows (576) (169) (533) (1,278) Market appreciation (depreciation) 823 643 492 1,958 Net change 247 474 (41) 680 End of period assets $ 7,215 $ 4,140 $ 4,104 $ 15,459 * Certain assets under management acquired from Salient were reclassified from Mutual Funds to Institutional as of December 31, 2022 to be consistent with the classification of existing assets.
There was no goodwill impairment for either segment during the years ended December 31, 2024, 2023 or 2022.
There was no goodwill impairment for either segment during the years ended December 31, 2025, 2024 or 2023.
Cash Dividends The following table summarizes dividends declared during 2024 and 2023: 2024 Dividends Declaration Date Record Date Paid Date Dividend Per Share February 14, 2024 (1) March 1, 2024 April 3, 2024 $0.15 May 1, 2024 (1) June 3, 2024 July 1, 2024 $0.15 July 31, 2024 (1) September 2, 2024 October 1, 2024 $0.15 October 30, 2024 (1) December 2, 2024 January 3, 2025 $0.15 $0.60 2023 Dividends Declaration Date Record Date Paid Date Dividend Per Share February 15, 2023 (1) March 1, 2023 April 3, 2023 $0.15 April 26, 2023 (1) June 2, 2023 July 3, 2023 $0.15 August 2, 2023 (1) September 1, 2023 October 2, 2023 $0.15 October 31, 2023 (1) December 1, 2023 January 3, 2024 $0.15 $0.60 (1) This dividend was treated for accounting purposes as a return of capital.
Cash Dividends The following table summarizes dividends declared during 2025 and 2024: 32 2025 Dividends Declaration Date Record Date Paid Date Dividend Per Share February 12, 2025 (1) March 3, 2025 April 1, 2025 $0.15 April 30, 2025 June 2, 2025 July 1, 2025 $0.15 August 8, 2025 September 2, 2025 October 1, 2025 $0.15 October 30, 2025 December 1, 2025 January 2, 2026 $0.15 $0.60 2024 Dividends Declaration Date Record Date Paid Date Dividend Per Share February 14, 2024 (1) March 1, 2024 April 3, 2024 $0.15 May 1, 2024 (1) June 3, 2024 July 1, 2024 $0.15 July 31, 2024 (1) September 2, 2024 October 1, 2024 $0.15 October 30, 2024 (1) December 2, 2024 January 3, 2025 $0.15 $0.60 (1) This dividend was treated for accounting purposes as a return of capital.
The following table presents our AUM (in millions, except percentages): As of December 31, 2024 Change 2023 Change 2022 Institutional (1) $ 8,301 15 % $ 7,215 6 % $ 6,785 Wealth Management (2) 4,391 6 % 4,140 13 % 3,666 Mutual Funds (3) 3,915 (5) % 4,104 (5) % 4,328 Total AUM $ 16,607 7 % $ 15,459 5 % $ 14,779 (1) Institutional includes (i) separate accounts of corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) sub-advisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers.
The following table presents our AUM (in millions, except percentages): As of December 31, 2025 Change 2024 Change 2023 Institutional (1) $ 8,332 — % $ 8,301 15 % $ 7,215 Wealth Management (2) 4,317 (2) % 4,391 6 % 4,140 Mutual Funds & ETFs (3) 3,890 (1) % 3,915 (5) % 4,104 Total AUM $ 16,539 — % $ 16,607 7 % $ 15,459 (1) Institutional includes (i) separate accounts of corporate pension and profit sharing plans, public employee retirement funds, Taft-Hartley plans, endowments, foundations and individuals; (ii) sub-advisory relationships where Westwood provides investment management services for funds offered by other financial institutions; (iii) pooled investment vehicles, including collective investment trusts; and (iv) managed account relationships with brokerage firms and other registered investment advisors that offer Westwood products to their customers.
We recorded a loss of $4.9 million upon the remeasurement of contingent consideration, payable in the first quarter of 2025 for the Salient Acquisition primarily, due to positive changes in growth projections following asset appreciation and asset flows in the period. 29 Provision for Income Taxes. The effective tax rate was 44.9% for 2024 compared to 23.2% for 2023.
We recorded a loss of $4.9 million upon the remeasurement of contingent consideration for the Salient Acquisition, due to positive changes in growth projections following asset appreciation and asset flows in the period. Provision for Income Taxes. The effective tax rate was 44.9% for 2024 compared to 23.2% for 2023.
Westwood Trust is required by the Texas Finance Code to maintain cash and investments in an amount equal to the minimum restricted capital of $4.0 million . Restricted capital is included in "Investments at fair value" in the accompanying Consolidated Balance Sheets. At December 31, 2024, Westwood Trust had approximately $11.9 million in excess of its minimum capital requirement.
Westwood Trust is required by the Texas Finance Code to maintain cash and investments in an amount equal to the minimum restricted capital of $4.0 million . Restricted capital is included in "Investments at fair value" in the accompanying Consolidated Balance Sheets. At December 31, 2025, Westwood Trust had approximately $13.2 million in excess of its minimum capital requirement.
Roll-Forward of Assets Under Management Year Ended December 31, 2024 AUM (in millions) Institutional Wealth Management Mutual Funds Total Beginning of period assets $ 7,215 $ 4,140 $ 4,104 $ 15,459 Client flows: Inflows 1,070 338 663 2,071 Outflows (966) (524) (1,353) (2,843) Net client flows 104 (186) (690) (772) Market appreciation (depreciation) 982 437 501 1,920 Net change 1,086 251 (189) 1,148 End of period assets $ 8,301 $ 4,391 $ 3,915 $ 16,607 The increase in AUM for the year ended December 31, 2024 was due to market appreciation of $1.9 billion offset by net outflows of $0.8 billion.
Net outflows were primarily related to our LargeCap Value strategy. 27 Year Ended December 31, 2024 AUM (in millions) Institutional Wealth Management Mutual Funds & ETFs Total Beginning of period assets $ 7,215 $ 4,140 $ 4,104 $ 15,459 Client flows: Inflows 1,070 338 663 2,071 Outflows (966) (524) (1,353) (2,843) Net client flows 104 (186) (690) (772) Market appreciation (depreciation) 982 437 501 1,920 Net change 1,086 251 (189) 1,148 End of period assets $ 8,301 $ 4,391 $ 3,915 $ 16,607 The increase in AUM for the year ended December 31, 2024 was due to market appreciation of $1.9 billion offset by net outflows of $0.8 billion.
SCLP serves as a sub-placement agent for private placements. Our revenues are generally derived from fees based on a percentage of AUM and AUA, and Westwood Management and Westwood Trust collectively had AUM of approximately $16.6 billion and AUA of approximately $1.0 billion at December 31, 2024.
Our revenues are generally derived from fees based on a percentage of AUM. SCLP serves as a sub-placement agent for private placements. Our revenues are generally derived from fees based on a percentage of AUM and AUA, and Westwood Management and Westwood Trust collectively had AUM of approximately $16.5 billion and AUA of approximately $0.9 billion at December 31, 2025.
As of December 31, 2024, our purchase commitments for the next five years and thereafter were as follows (in thousands): Payments due in: Total Less than 1 year 1-3 years 4-5 years Thereafter Purchase commitments (1) $ 15,685 $ 7,102 $ 6,307 $ 2,276 $ — (1) A “purchase commitment” is defined as an agreement to purchase goods or services that is enforceable and legally binding and that specifies all significant terms, including (a) fixed or minimum quantities to be purchased; (b) fixed, minimum or variable price provisions; and (c) the approximate timing of the transaction.
As of December 31, 2025, our purchase commitments for the next five years and thereafter were as follows (in thousands): Payments due in: Total Less than 1 year 1-3 years 4-5 years Thereafter Purchase commitments (1) $ 14,276 $ 6,652 $ 6,962 $ 662 $ — (1) A “purchase commitment” is defined as an agreement to purchase goods or services that is enforceable and legally binding and that specifies all significant terms, including (a) fixed or minimum quantities to be purchased; (b) fixed, minimum or variable price provisions; and (c) the approximate timing of the transaction.
Cash flow used in investing activities in 2024 primarily related to the purchases of strategic investments, compared to cash flow provided by investing activities in 2023 related to the receipt of life insurance proceeds offset by the Broadmark Acquisition. Cash flow used in investing activities in 2022 was primarily related to the Salient Acquisition.
Cash flow used in investing activities in 2025 and 2024 primarily related to the purchases of strategic investments, compared to cash flow provided by investing activities in 2023 related to the receipt of life insurance proceeds offset by the Broadmark Acquisition.
Other Income Other income primarily consists of income from the sublease of a portion of our corporate offices and the receipt of life insurance proceeds. Firm-wide Assets Under Management 26 Firm-wide assets under management of $17.6 billion at December 31, 2024 consisted of $16.6 billion of AUM and $1.0 billion of AUA.
Other Income Other income primarily consists of income from the sublease of a portion of our corporate offices and the receipt of life insurance proceeds. 26 Firm-wide Assets Under Management Firm-wide assets under management of $17.4 billion at December 31, 2025 consisted of $16.5 billion of AUM and $0.9 billion of AUA.
Cash used in financing activities was $18.1 million in 2024 compared to $6.4 million and $9.1 million in 2023 and 2022, respectively. The change from 2023 to 2024 related to payments for contingent consideration for the Salient Acquisition and treasury stock purchases in 2024. The change from 2022 to 2023 primarily related to treasury stock purchases in 2022.
Cash used in financing activities was $7.9 million in 2025 compared to $18.1 million and $6.4 million in 2024 and 2023, respectively. The change from 2024 to 2025 related to 2025 noncontrolling interest activity, 2024 payments for contingent consideration for the Salient Acquisition and treasury stock purchases in 2024.
Our future liquidity and capital requirements will depend upon numerous factors, including results of operations, the timing and magnitude of capital expenditures or strategic initiatives, our dividend policy and other business and risk factors described under “Item 1A. Risk Factors” in this Report.
The change from 2023 to 2024 primarily related to contingent consideration payments. Our future liquidity and capital requirements will depend upon numerous factors, including results of operations, the timing and magnitude of capital expenditures or strategic initiatives, our dividend policy and other business and risk factors described under “Item 1A. Risk Factors” in this Report.
For the years ended December 31, Cash Flow Data (in thousands) 2024 2023 2022 Operating cash flows $ 21,122 $ (1,185) $ 51,490 Investing cash flows (4,613) 4,112 (33,739) Financing cash flows (18,084) (6,364) (9,103) During 2024, cash flow provided by operating activities was $21.1 million, compared to cash used in operating activities of $1.2 million during 2023 and cash provided by operating activities of $51.5 million during 2022.
For the years ended December 31, Cash Flow Data (in thousands) 2025 2024 2023 Operating cash flows $ 18,922 $ 21,122 $ (1,185) Investing cash flows (3,666) (4,613) 4,112 Financing cash flows (7,854) (18,084) (6,364) During 2025, cash flow provided by operating activities was $18.9 million, compared to $21.1 million during 2024 and cash used in operating activities of $1.2 million during 2023.
Total revenues increased $4.9 million, or 6%, to $94.7 million compared to $89.8 million for 2023. The increase was attributable to higher average assets under management. Employee Compensation and Benefits. Employee compensation and benefits expenses increased primarily due to higher performance-related incentive compensation following increased AUM balances and additional headcount. (Gain) loss from change in fair value of contingent consideration.
The increase was attributable to higher average assets under management. Employee Compensation and Benefits. Employee compensation and benefits expenses increased primarily due to higher performance-related incentive compensation following increased AUM balances and additional headcount. (Gain) loss from change in fair value of contingent consideration.
Quarterly average AUM increased 9% to $16.3 billion for 2024 versus 2023, which contributed to a 6% increase in total revenue from 2023. • Our SMidCap Value, Multi-Asset, Credit Opportunities, Real Estate Income, MLP SMA, MLP High Conviction and MLP & Energy Infrastructure strategies performed strongly by beating their primary benchmarks for the year. • We paid $5.4 million of dividends to our common stockholders. • Our financial position remains strong with liquid cash and investments of $44.6 million and no debt as of December 31, 2024 .
Quarterly average AUM increased 5% to $17.1 billion for 2025 versus 2024, which, along with higher revenues from our ETFs and private energy secondaries funds, contributed to a 3% increase in total revenue from 2024. • Our MLP Total Return, Income Opportunity, Multi-Asset Income, Alternative Income, Credit Opportunities, Westwood Salient Enhanced Midstream Income ETF and Westwood Salient Enhanced Energy Income ETF strategies performed strongly by beating their primary benchmarks for the year. • We paid $5.4 million of dividends to our common stockholders. • Our financial position remains strong with liquid cash and investments of $44.1 million and no debt as of December 31, 2025 .
Westwood Management provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds®, other mutual funds, individuals and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in common trust funds to institutions and high net worth individuals. Our revenues are generally derived from fees based on a percentage of AUM.
Westwood Management provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds®, Westwood ETFs, other mutual funds, individuals, private capital funds and clients of Westwood Trust. Westwood Trust provides trust and custodial services and participation in common trust funds to high net worth individuals and families, and institutions.
The increase of $22.3 32 million from 2023 to 2024 primarily reflected the net sales of investments in 2024 compared to net purchases of investments in 2023. The decrease of $52.7 million from 2022 to 2023 primarily reflected net sales of investments in 2022 to fund the Salient Acquisition.
The decrease of $2.2 million from 2024 to 2025 primarily reflected the final contingent consideration payment related to the Salient Acquisition. The increase of $22.3 million from 2023 to 2024 primarily reflected the net sales of investments in 2024 compared to net purchases of investments in 2023.
We do not advocate that investors consider these non-GAAP measures without also considering financial information prepared in accordance with GAAP. We define Economic Earnings as Income (loss) attributable to Westwood Holdings Group, Inc. plus non-cash equity-based compensation expense, impairment expense, amortization of intangible assets, currency translation adjustment reclassification and deferred taxes related to goodwill.
We define Economic Earnings as income (loss) attributable to Westwood Holdings Group, Inc. plus non-cash equity-based compensation expense, impairment expense, amortization of intangible assets, currency translation adjustment reclassification, deferred taxes related to goodwill and the tax impact of adjustments to GAAP income (loss).
AUM increased $0.7 billion, or 5%, to $15.5 billion at December 31, 2023 compared to $14.8 billion at December 31, 2022. Quarterly average AUM increased $1.9 billion, up 15%, to $15.0 billion compared with $13.1 billion for 2022. The increase in average AUM was primarily due to $2.0 billion of market appreciation in 2023.
AUM of $16.5 billion at December 31, 2025 was consistent with $16.6 billion at December 31, 2024. Quarterly average AUM increased $0.7 billion, up 5%, to $17.1 billion compared with $16.3 billion for 2024. The increase in average AUM was primarily due to the timing of both $1.0 billion of market appreciation in 2025 and inflows.
Years ended December 31, (in thousands, except percentages) 2024 Change 2023 Change 2022 Revenues: Advisory fees: Asset-based $ 69,755 4 % $ 67,391 44 % $ 46,685 Performance-based 1,393 10 1,265 24 1,018 Trust fees 21,422 6 20,242 (7) 21,686 Trust performance-based fees 482 38 349 NM — Other revenues, net 1,669 213 534 (175) (708) Total revenues 94,721 6 89,781 31 68,681 Expenses: Employee compensation and benefits 56,011 6 52,918 32 40,124 Sales and marketing 2,668 (11) 2,990 49 2,003 Westwood mutual funds 3,254 4 3,133 42 2,201 Information technology 9,662 — 9,650 25 7,719 Professional services 5,468 7 5,132 (4) 5,357 General and administrative 11,947 (5) 12,512 38 9,057 (Gain) loss from change in fair value of contingent consideration 4,881 (276) (2,768) NM — Acquisition expenses — NM 209 (97) 7,093 Total expenses 93,891 12 83,776 14 73,554 Net operating income (loss) 830 (86) 6,005 (223) (4,873) Net change in unrealized appreciation (depreciation) on private investments — NM 6 (100) (1,495) Net investment income 2,183 83 1,191 348 266 Other income 1,002 (84) 6,241 588 907 Income (loss) before income taxes $ 4,015 (70) % $ 13,443 (359) % $ (5,195) Income tax provision 1,804 (37) 2,872 (607) (567) Net income (loss) $ 2,211 (79) % $ 10,571 (328) % $ (4,628) Less: Income (loss) attributable to noncontrolling interest (4) (100) % 1,051 NM — Income (loss) attributable to Westwood Holdings Group, Inc. $ 2,215 (77) % $ 9,520 (306) % $ (4,628) NM - Not meaningful Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Total Revenues.
Roll-Forward of Assets Under Advisement Years Ended December 31, AUA (in millions) 2025 2024 2023 Beginning of period assets $ 960 $ 1,079 $ 1,255 Inflows 139 105 160 Outflows (157) (316) (400) Net client flows (18) (211) (240) Market appreciation (depreciation) — 92 64 Net change (18) (119) (176) End of period assets $ 942 $ 960 $ 1,079 Results of Operations The following table and discussion of our results of operations are based upon data derived from our Consolidated Statements of Operations contained in our Consolidated Financial Statements and should be read in conjunction with these statements included elsewhere in this Report. 28 Years ended December 31, (in thousands, except percentages) 2025 Change 2024 Change 2023 Revenues: Advisory fees: Asset-based $ 74,722 7 % $ 69,755 4 % $ 67,391 Performance-based 874 (37) 1,393 10 1,265 Trust fees 21,560 1 21,422 6 20,242 Trust performance-based fees 260 (46) 482 38 349 Other revenues, net 346 (79) 1,669 213 534 Total revenues 97,762 3 94,721 6 89,781 Expenses: Employee compensation and benefits 56,686 1 56,011 6 52,918 Sales and marketing 2,744 3 2,668 (11) 2,990 Westwood funds 4,258 31 3,254 4 3,133 Information technology 10,894 13 9,662 — 9,650 Professional services 6,917 26 5,468 7 5,132 General and administrative 11,290 (5) 11,947 (5) 12,512 (Gain) loss from change in fair value of contingent consideration — (100) 4,881 (276) (2,768) Acquisition expenses — NM — (100) 209 Total expenses 92,789 (1) 93,891 12 83,776 Net operating income 4,973 499 830 (86) 6,005 Net change in unrealized appreciation on private investments 1,932 100 — (100) 6 Net investment income 1,655 (24) 2,183 83 1,191 Other income 1,117 11 1,002 (84) 6,241 Income before income taxes $ 9,677 141 % $ 4,015 (70) % $ 13,443 Income tax provision 2,600 44 1,804 (37) 2,872 Net income $ 7,077 220 % $ 2,211 (79) % $ 10,571 Less: Income (loss) attributable to noncontrolling interest 19 (575) % (4) (100) % 1,051 Income attributable to Westwood Holdings Group, Inc. $ 7,058 219 % $ 2,215 (77) % $ 9,520 NM - Not meaningful Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Total Revenues.
Overview We manage investment assets and provide services for our clients through our subsidiaries, Westwood Management Corp., Westwood Advisors, L.L.C. and Salient Advisors, LP (each of which is an SEC-registered investment advisor and referred to hereinafter together as “Westwood Management”) and Westwood Trust.
Overview We manage investment assets and provide services for our clients through our subsidiaries, Westwood Management Corp., Westwood Advisors, L.L.C., Salient Advisors, L.P.
We believe that investors will recognize the potential for new revenue streams inherent in these products and services however there is no guarantee that they will occur. 2024 Highlights The following items were reported for the year ended December 31, 2024: • Launched two new ETFs: Westwood Salient Enhanced Midstream Income ETF (MDST) and Westwood Salient Enhanced Energy Income ETF (WEEI). • Entered a partnership with WEBs Investments Inc., a new firm to develop and launch innovative investment strategies for investors and advisors. • AUM as of December 31, 2024 was $16.6 billion, 7% higher than December 31, 2023.
We develop new products that we believe will be in demand by clients and investors, thereby generating new revenue streams for us; however, there is no guarantee that new products will be successful in generating demand and incremental revenues. 2025 Highlights The following items were reported for the year ended December 31, 2025: • Launched Westwood Enhanced Income Opportunity ETF (YLDW). • AUM as of December 31, 2025 was $16.5 billion, consistent with December 31, 2024.
Other income. We recorded life insurance proceeds of $5.0 million in 2023. Provision for Income Taxes. The effective tax rate was 23.2% for 2023 compared to 10.9% for 2022.
In 2025 we recorded an unrealized gain of approximately $2.0 million for our investment in TXSE following observable price changes. Provision for Income Taxes. The effective tax rate was 26.9% for 2025 compared to 44.9% for 2024.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Total Revenues. Total revenues increased $21.1 million, or 31%, to $89.8 million compared with $68.7 million for 2022.
Our income tax rate differed from the 21% statutory tax rate due to permanent differences due to executive compensation and the impact of state and local taxes. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Total Revenues. Total revenues increased $4.9 million, or 6%, to $94.7 million compared to $89.8 million for 2023.
Year Ended December 31, 2022 AUM (in millions) Institutional Wealth Management Mutual Funds Total Beginning of period assets $ 7,037 $ 4,420 $ 3,046 $ 14,503 Client flows: Inflows 286 457 800 1,543 Outflows (698) (714) (1,029) (2,441) Net client flows (412) (257) (229) (898) Salient acquisition 788 — 1,873 2,661 Market appreciation (depreciation) (628) (497) (362) (1,487) Net change (252) (754) 1,282 276 End of period assets $ 6,785 $ 3,666 $ 4,328 $ 14,779 The increase in AUM for the year ended December 31, 2022 was due to $2.7 billion of AUM from the Salient Acquisition partially offset by market depreciation of $1.5 billion and net outflows of $0.9 billion.
Roll-Forward of Assets Under Management Year Ended December 31, 2025 AUM (in millions) Institutional Wealth Management Mutual Funds & ETFs Total Beginning of period assets $ 8,301 $ 4,391 $ 3,915 $ 16,607 Client flows: Inflows 1,457 329 696 2,482 Outflows (1,929) (729) (864) (3,522) Net client flows (472) (400) (168) (1,040) Market appreciation (depreciation) 503 326 143 972 Net change 31 (74) (25) (68) End of period assets $ 8,332 $ 4,317 $ 3,890 $ 16,539 The decrease in AUM for the year ended December 31, 2025 was due to net outflows of $1.0 billion offset by market appreciation of $1.0 billion.
Removed
Net outflows were primarily related to our LargeCap Value, Income Opportunity and Enhanced Balanced strategies. Roll-Forward of Assets Under Advisement AUA has historically been disclosed in aggregate due to its relative insignificance to our business.
Added
("Salient Advisors") and Broadmark Asset Management LLC ("Broadmark"), (each of which is a registered investment adviser ("RIA") registered with the Securities and Exchange Commission ("SEC"), and Salient Capital, L.P., ("SCLP") an SEC-registered broker-dealer and Financial Industry Regulatory Authority ("FINRA") member, collectively referred to hereinafter together as "Westwood Management") and Westwood Trust.
Removed
Following our November 2022 acquisition of Salient's asset management business, AUA becane a more meaningful component of our business and accordingly, we will present AUA details from the year ended December 31, 2023 going forward: Years Ended December 31, AUA (in millions) 2024 2023 Beginning of period assets $ 1,079 $ 1,255 Inflows 105 160 Outflows (316) (400) Net client flows (211) (240) Market appreciation (depreciation) 92 64 Net change (119) (176) End of period assets $ 960 $ 1,079 Results of Operations 28 The following table and discussion of our results of operations is based upon data derived from our Consolidated Statements of Operations contained in our Consolidated Financial Statements and should be read in conjunction with these statements included elsewhere in this Report.
Added
Net outflows were primarily related to our LargeCap Value and SmallCap Value strategies.
Removed
The increase was attributable to higher average assets under management following our acquisition of Salient Partners' asset management business during the fourth quarter of 2022, partially offset by a $1.4 million decrease in Trust fees due to lower average AUM. Employee Compensation and Benefits. Employee compensation and benefits expenses increased due to additional headcount resulting from the Salient Acquisition.
Added
Total revenues increased $3.0 million, or 3%, to $97.8 million compared to $94.7 million for 2024. The increase was attributable to higher average assets under management and higher revenues from our ETFs and private energy secondaries funds. Westwood funds .
Removed
Sales and Marketing . Sales and marketing expenses increased due to higher product placement fees for certain Salient funds. Westwood Mutual Funds. Westwood mutual funds expenses increased primarily due to an increase in mutual fund placement fees for certain mutual funds acquired in the Salient Acquisition. Information Technology.
Added
Westwood fund expenses increased 31% to $4.3 million compared to $3.3 million for 2024, primarily due to increased administration and distribution expenses related to our ETFs, driven by higher fund assets. Information technology. Information technology costs increased 13% to $10.9 million compared to $9.7 million in 2024, primarily due to additional investment resource tools and software licenses. Professional services.
Removed
Information technology costs increased primarily due to additional software licenses and investment research expenses. General and administrative. General and administrative expenses increased 38% to $12.5 million compared to $9.1 million in 2022 primarily due to increased intangible asset amortization following the Salient Acquisition. (Gain) loss from change in fair value of contingent consideration.
Added
Professional services expense increased $1.4 million, or 26%, to $6.9 million in 2025 primarily due to additional consulting costs. 29 (Gain) loss from change in fair value of contingent consideration. In 2025 we did not adjust our contingent consideration from the 2022 Salient Acquisition as the specific revenue thresholds were not met. Net change in unrealized appreciation on private investments.
Removed
We recorded a gain of $2.8 million upon the remeasurement of contingent consideration of the Salient Acquisition primarily due to changes in growth projections and volatility assumptions. Net change in unrealized appreciation (depreciation) on private investments. In 2022 we recorded a $1.6 million net change in unrealized depreciation to reflect a market transaction related to our previous investment in Charis.
Added
We do not advocate that investors consider these non-GAAP measures without also considering financial information prepared in accordance with GAAP.
Removed
Our income tax rate differed from the 21% statutory tax rate due to permanent differences between book and tax restricted stock expense based on a decrease in our stock price between the restricted stock grant and vesting date, along with the impact of state and local taxes.
Added
Non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
Removed
Accounting for Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes , which requires recognition of the amount of taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the reported amounts on the Consolidated Financial Statements.
Added
Some of the limitations in relying on these non-GAAP financial measures are that they can have a material impact on the equivalent GAAP measures or they may be calculated differently by other companies.
Removed
We include penalties and interest on income-based taxes, if any, in the “General and administrative” line on our Consolidated Statements of Operations. Significant judgment is required in determining the provision for income taxes and, in particular, factors considered when assessing whether a valuation allowance should be established and our estimated uncertain tax positions.
Added
We compensate for these limitations on the use of non-GAAP financial measures by relying primarily on our GAAP results and using non-GAAP financial measures only as a supplement.
Removed
We are required to assess whether a valuation allowance should be established against our deferred tax assets based on consideration of all available evidence, using a more-likely-than-not standard.
Added
We believe that providing non-GAAP diluted net earnings per share and non-GAAP Income (loss) in addition to the related GAAP measures provides greater transparency to the information used in our financial and operational decision-making.
Removed
Evidence considered includes, but is not limited to, consideration of taxable income in prior carryback year(s), estimates of future taxable income from operations, and the expiration dates and amounts of carryforwards related to net operating losses and capital losses.
Removed
A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence it is more likely than not that some or all the deferred tax assets will not be realized.
Removed
We account for uncertain tax positions by recognizing the impact of a tax position in our Consolidated Financial Statements when we believe it is more likely than not that the tax position would not be sustained upon examination by the appropriate tax authority based on the merits of the position.
Removed
We periodically review our tax positions and adjust the balances as new information becomes available. In making these assessments, we often must analyze complex tax laws of multiple domestic and international jurisdictions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed4 unchanged
Biggest changeA hypothetical 10% decrease in our average AUM and AUA during the year ended December 31, 2024 would have reduced our reported consolidated total revenue by approximately $9 million. Our cash equivalents and other investment instruments are exposed to financial market risk due to fluctuations in interest rates, which may affect interest income.
Biggest changeA hypothetical 10% 34 decrease in our average AUM and AUA during the year ended December 31, 2025 would have reduced our reported consolidated total revenue by approximately $10 million. Our cash equivalents and other investment instruments are exposed to financial market risk due to fluctuations in interest rates, which may affect interest income.

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