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What changed in Victory Capital Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Victory Capital Holdings, 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.

+442 added−527 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in Victory Capital Holdings, Inc.'s 2025 10-K

442 paragraphs added · 527 removed · 340 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

103 edited+27 added−23 removed70 unchanged
Biggest changeStrategy/Benchmark Index 1 year 3 years 5 years 10 years Sycamore Mid Cap Value 10.78 % 6.42 % 11.70 % 11.44 % Russell MidCap Value 13.07 % 3.88 % 8.59 % 8.10 % Excess Return (2.29) % 2.54 % 3.11 % 3.34 % Victory S&P 500 Index 25.31 % 9.08 % 14.61 % 13.15 % S&P 500 25.02 % 8.94 % 14.53 % 13.10 % Excess Return 0.29 % 0.14 % 0.08 % 0.05 % Sycamore Small Cap Value 6.44 % 4.09 % 8.60 % 10.31 % Russell 2000 Value 8.05 % 1.94 % 7.29 % 7.14 % Excess Return (1.61) % 2.15 % 1.31 % 3.17 % WestEnd Global Balanced 8.82 % 0.77 % 6.66 % 7.08 % Global Balanced Benchmark 11.57 % 2.71 % 6.62 % 6.69 % Excess Return (2.75) % (1.94) % 0.04 % 0.39 % Victory NASDAQ-100 25.94 % 9.70 % 20.18 % 18.53 % NASDAQ-100 25.88 % 9.71 % 20.18 % 18.53 % Excess Return 0.06 % (0.01) % 0.00 % 0.00 % WestEnd US Sector 20.03 % 5.26 % 14.03 % 13.34 % S&P 500 25.02 % 8.94 % 14.53 % 13.10 % Excess Return (4.99) % (3.68) % (0.50) % 0.24 % WestEnd Global Equity 14.35 % 3.61 % 10.82 % 10.47 % MSCI ACWI (ND) 17.49 % 5.44 % 10.06 % 9.23 % Excess Return (3.14) % (1.83) % 0.76 % 1.24 % Victory Income investors – Core Plus Fixed Income 3.42 % (0.69) % 1.80 % 3.19 % Bloomberg US Aggregate 1.25 % (2.41) % (0.33) % 1.35 % Excess Return 2.17 % 1.72 % 2.13 % 1.84 % 10 Table of Contents Trivalent International Small-Cap Equity 6.00 % (1.30) % 4.86 % 7.12 % S&P Dev ex-US SmallCap (ND) (0.14) % (3.96) % 1.94 % 4.79 % Excess Return 6.14 % 2.66 % 2.92 % 2.33 % Victory Income investors – Income 3.87 % (0.89) % 1.30 % 2.86 % Bloomberg US Aggregate 1.25 % (2.41) % (0.33) % 1.35 % Excess Return 2.62 % 1.52 % 1.63 % 1.51 % A high percentage of our mutual fund and ETF assets have four- or five-star Morningstar ratings.
Biggest changeStrategy/Benchmark Index 1 year 3 years 5 years 10 years Pioneer US Large Cap Core Equity 24.32 % 26.02 % 15.99 % 16.69 % S&P 500 17.88 % 23.01 % 14.42 % 14.82 % Excess Return 6.44 % 3.01 % 1.57 % 1.87 % Sycamore Mid Cap Value Equity 3.20 % 8.23 % 10.53 % 11.60 % Russell Midcap Value 11.05 % 12.27 % 9.83 % 9.78 % Excess Return (7.85) % (4.04) % 0.70 % 1.82 % Pioneer US Large Cap Growth Equity 14.89 % 22.25 % 12.76 % 15.22 % Russell 1000 Growth 18.56 % 31.15 % 15.32 % 18.13 % Excess Return (3.67) % (8.90) % (2.56) % (2.91) % Victory S&P 500 Index 18.21 % 23.19 % 14.56 % 14.90 % S&P 500 17.88 % 23.01 % 14.42 % 14.82 % Excess Return 0.33 % 0.18 % 0.14 % 0.08 % Pioneer Multi-Asset Income 23.92 % 13.73 % 10.84 % 9.72 % 65% Bloomberg US Aggregate - 35% MSCI ACWI-ND 12.46 % 10.10 % 3.68 % 5.52 % Excess Return 11.46 % 3.63 % 7.16 % 4.20 % Pioneer Multi-Sector Fixed Income 11.34 % 8.37 % 2.89 % 4.74 % Bloomberg US Universal 7.58 % 5.24 % 0.06 % 2.44 % Excess Return 3.76 % 3.13 % 2.83 % 2.30 % Pioneer US Multi-Asset Ultrashort Income 5.15 % 6.77 % 4.63 % 3.41 % ICE BofAML US 3-Month Treasury Bill 4.18 % 4.81 % 3.17 % 2.18 % Excess Return 0.97 % 1.96 % 1.46 % 1.23 % Pioneer US Core Plus Fixed Income 9.24 % 6.48 % 1.04 % 3.38 % 11 Table of Contents Bloomberg US Aggregate 7.30 % 4.66 % (0.36) % 2.01 % Excess Return 1.94 % 1.82 % 1.40 % 1.37 % WEA Global Balanced 16.94 % 13.20 % 6.35 % 8.62 % Global Balanced Benchmark 16.81 % 14.87 % 7.06 % 8.50 % Excess Return 0.13 % (1.67) % (0.71) % 0.12 % Victory Nasdaq 100 Index 21.09 % 33.22 % 15.31 % 19.71 % NASDAQ-100 21.02 % 33.20 % 15.30 % 19.70 % Excess Return 0.07 % 0.02 % 0.01 % 0.01 % A high percentage of our mutual fund and ETF assets have four- or five-star Morningstar ratings.
Organic Growth – We seek to grow organically by offering strategies that are value-added, and solution oriented to investment portfolios with strong risk-adjusted performance track records over the long term. A key driver of our growth strategy lies in enhancing the strength of our existing Franchises.
Organic Growth – We seek to grow organically by offering strategies that are value-added, and solution oriented to investment portfolios with strong risk-adjusted performance track records over the long term. A key driver of our growth strategy lies in enhancing the strength of our existing Investment Franchises.
We offer mutual funds, ETFs, third-party ETF models, and separately managed wrap and unified managed accounts on intermediary and retirement platforms. We have agreements with many of the largest platforms in our retail channel, which has provided an opportunity to place our retail products on those platforms.
We offer mutual funds, ETFs, third-party ETF models, CITs, and separately managed wrap and unified managed accounts on intermediary and retirement platforms. We have agreements with many of the largest platforms in our retail channel, which has provided an opportunity to place our retail products on those platforms.
While we exercise broad discretion over the day‑to‑day management of the business and affairs of the Victory Funds, Victory Portfolios III, VictoryShares and the investment portfolios of the Victory Funds, Victory Portfolios III, and VictoryShares and the funds we sub‑advise, the funds are subject to oversight of and governance by each fund’s board of directors.
While we exercise broad discretion over the day‑to‑day management of the business and affairs of the Victory Funds, VictoryShares and the investment portfolios of the Victory Funds, VictoryShares and the funds we sub‑advise, the funds are subject to oversight of and governance by each fund’s board of directors.
Our Trivalent Investment Franchise includes seven investment professionals with average industry experience of approximately 28 years. Victory Income Investors – Victory Income Investors utilizes a rigorous process rooted in a team-oriented approach among portfolio managers, research analysts and traders. Their taxable and tax-exempt portfolios are built bond by bond using a fundamental, bottom up, credit and yield-focused analysis.
Our Trivalent Investment Franchise includes seven investment professionals with average industry experience of approximately 29 years. Victory Income Investors – Victory Income Investors utilizes a rigorous process rooted in a team-oriented approach among portfolio managers, research analysts and traders. Their taxable and tax-exempt portfolios are built bond by bond using a fundamental, bottom up, credit and yield-focused analysis.
Our WestEnd Investment Franchise has a team of 28 including seven investment professionals averaging approximately 14 years of industry experience. Solutions Platform Our Solutions Platform consists of multi‑asset, multi-manager, quantitative, rules-based, factor-based, and customized portfolios. These strategies are designed to achieve specific return characteristics, with products that include values-based and thematic outcomes and exposures.
Our WestEnd Investment Franchise has a team of 28 including seven investment professionals averaging approximately 17 years of industry experience. Solutions Platform Our Solutions Platform consists of multi‑asset, multi-manager, quantitative, rules-based, factor-based, and customized portfolios. These strategies are designed to achieve specific return characteristics, with products that include values-based and thematic outcomes and exposures.
If a strategy is currently not offered in the wrapper of choice for a client, we have the infrastructure and ability to create a new investment vehicle, which helps our Franchises further diversify their client base. Attractive Financial Profile – Our revenues are recurring in nature, as they are based on the level of client assets we manage.
If a strategy is currently not offered in the wrapper of choice for a client, we have the infrastructure and ability to create new investment vehicles, which helps our Franchises further diversify their client base. Attractive Financial Profile – Our revenues are recurring in nature, as they are based on the level of client assets we manage.
Despite their lower average fee rates, by managing these competitively priced strategies on our integrated platform we can earn margins in excess of our average consolidated margin on these products. Because we largely outsource our middle‑ and back‑office functions, as well as certain aspects of technological support, we have relatively minimal capital expenditure requirements.
Despite lower average fee rates, by managing these competitively priced products on our integrated platform we can earn margins on these products in excess of our average consolidated margin. Because we largely outsource our middle‑ and back‑office functions, as well as certain aspects of technological support, we have relatively minimal capital expenditure requirements.
Retail Sales – Our retail sales team includes regional external wholesalers, retirement specialists, RIA specialists, national account specialists, and ETF sales specialists, all of whom are supported by an internal sales desk. We also have a team of distribution professionals specializing in the sale of third-party ETF model strategies.
US Retail Sales – Our retail sales team includes regional external wholesalers, retirement specialists, national account specialists, and ETF sales specialists, all of whom are supported by an internal sales desk. We also have a team of distribution professionals specializing in the sale of third-party ETF model strategies.
Furthermore, we believe our Franchises’ brand independence reduces the impact of each individual Franchise’s performance on clients’ perceptions of the other Franchises. The distribution of AUM by Franchise and the number of Franchises, as well as succession planning, mitigates the level of key person risk typically associated with investment management businesses.
Furthermore, we believe our Franchises’ brand independence reduces the impact of each individual Franchise’s performance on clients’ perceptions of the 13 Table of Contents other Franchises. The distribution of AUM by Franchise and the number of Franchises, as well as succession planning, mitigates the level of key person risk typically associated with investment management businesses.
All our soft dollar arrangements are intended to be within 16 Table of Contents the safe harbor provided by Section 28(e) of the Exchange Act. If our ability to use soft dollars were reduced or eliminated as a result of the implementation of statutory amendments or new regulations, our operating expenses would increase.
All our soft dollar arrangements are intended to be within the safe harbor provided by Section 28(e) of the Exchange Act. If our ability to use soft dollars were reduced or eliminated as a result of the implementation of statutory amendments or new regulations, our operating expenses would increase.
One of our key advantages in a competitive merger and acquisition environment is our ability to provide access to multiple distribution channels. Our distribution and marketing platforms drive organic growth at our acquired Franchises both by opening new distribution channels and penetrating deeper into existing ones.
One of our key advantages in a competitive merger and acquisition environment is our ability to provide access to multiple distribution channels. Our sales and marketing platforms drive organic growth to our acquired Investment Franchises both by opening new distribution channels and penetrating deeper into existing ones.
Diversified Platform Across Investment Strategies, Franchises and Client Type – We have strategically built an investment platform that is diversified by investment strategy, Franchise, and client type. Within each asset class, Franchises with overlapping investment mandates still contribute to our diversification by pursuing different investment philosophies and/or processes.
Diversified Platform Across Investment Strategies, Franchises, and Client Type and Domicile – We have strategically built an investment platform that is diversified by investment strategy, Franchise, client type, and geographic location. Within each asset class, Franchises with overlapping investment mandates still contribute to our diversification by pursuing different investment philosophies and/or processes.
Trivalent’s investment strategy is primarily a proprietary quantitative process that drives stock selection across various countries. Trivalent frequently conducts reviews of stock selection rankings within a portfolio construction and risk management context in order to isolate performance to stock selection. Trivalent is based in Boston, MA, and managed $5.3 billion in AUM as of December 31, 2024.
Trivalent’s investment strategy is primarily a proprietary quantitative process that drives stock selection across various countries. Trivalent frequently conducts reviews of stock selection rankings within a portfolio construction and risk management context in order to isolate performance to stock selection. Trivalent is based in Boston, MA, and managed $8.5 billion in AUM as of December 31, 2025.
Integrated Distribution, Marketing and Operations The centralization of our distribution, marketing and operational functions is a key component in our model, allowing our Franchises to focus on their core competencies of security and sector selection, portfolio construction, and client service.
Integrated Distribution, Marketing and Operations The centralization of our distribution, marketing and operational functions is a key component in our model, allowing our Franchises to focus on their core competencies of security and sector selection, portfolio 14 Table of Contents construction, and client service.
SEC Investment Adviser and Investment Company Registration / Regulation – VCM and WestEnd are both registered with the SEC as investment advisers under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and the Victory Funds, Victory Portfolios III, VictoryShares and several of the investment companies we sub‑advise are registered under the Investment Company Act of 1940, as amended (the “1940 Act”).
SEC Investment Adviser and Investment Company Registration / Regulation – VCM and WestEnd are both independently registered with the SEC as investment advisers under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and the Victory Funds, VictoryShares and several of the investment companies we sub‑advise are registered under the Investment Company Act of 1940, as amended (the “1940 Act”).
The responsibilities of the fund’s board include, among other things: approving our investment advisory agreement with the fund (or, for sub‑advisory arrangements, our sub‑advisory agreement with the fund’s investment adviser); approving other service providers; determining the method of valuing assets; and monitoring transactions involving affiliates.
The responsibilities of the 18 Table of Contents fund’s board include, among other things: approving our investment advisory agreement with the fund (or, for sub‑advisory arrangements, our sub‑advisory agreement with the fund’s investment adviser); approving other service providers; determining the method of valuing assets; and monitoring transactions involving affiliates.
For the year ended December 31, 2024, 78% of our total revenues were derived from our services to investment companies registered under the 1940 Act – i.e., mutual funds and ETFs. The 1940 Act imposes significant requirements and limitations on a registered fund, including with respect to its capital structure, investments, and transactions.
For the year ended December 31, 2025, 75% of our total revenues were derived from our services to investment companies registered under the 1940 Act – i.e., mutual funds and ETFs. The 1940 Act imposes significant requirements and limitations on a registered fund, including with respect to its capital structure, investments, and transactions.
We principally compensate our investment professionals 15 Table of Contents through a revenue share program, which we believe further incentivizes our investment professionals to focus on investment performance and client retention, while simultaneously minimizing potential distractions from an expense allocation process that would be involved in a profit‑sharing program.
We principally compensate our investment professionals through a revenue share program, which we believe further incentivizes our investment professionals to focus on investment performance and client retention, while simultaneously minimizing potential distractions from an expense allocation process that would be involved in a profit‑sharing program.
In addition, certain VCM employees are registered with the CFTC and are also members of the NFA. Both the CFTC and NFA administer comparable 17 Table of Contents regulatory systems covering futures contracts and various other financial instruments, including swaps.
In addition, certain VCM employees are registered with the CFTC and are also members of the NFA. Both the CFTC and NFA administer comparable regulatory systems covering futures contracts and various other financial instruments, including swaps.
Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF 3 Table of Contents model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITS”).
Victory Capital’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITS”).
Over a three‑year and five‑year basis, 62% and 59% of our fund AUM achieved four- or five-star ratings, respectively. Competitive Strengths We believe we have significant competitive strengths that position us for sustained growth and shareholder value creation over the long term.
Over a three‑year and five‑year basis, 57% and 54% of our fund AUM achieved four- or five-star ratings, respectively. Competitive Strengths We believe we have significant competitive strengths that position us for sustained growth and shareholder value creation over the long term.
All pie chart data is as of December 31, 2024, values may not total 100% due to rounding. Within individual asset classes and strategies, our Franchises employ different investment approaches. This diversification reduces the correlation between investment return streams generated by multiple Franchises investing within the same asset class.
All pie chart data is as of December 31, 2025, values may not total 100% due to rounding. 8 Table of Contents Within individual asset classes and strategies, our Franchises employ different investment approaches. This diversification reduces the correlation between investment return streams generated by multiple Franchises investing within the same asset class.
Some of these organizations have greater financial resources and capabilities than we can offer and have strong performance track records.
Some of these organizations have greater financial resources and capabilities than we can offer and have impressive performance track records.
As illustrated below, as of December 31, 2024, our current business is well diversified from multiple perspectives, including by asset class, by investment vehicle, and by Investment Franchise and our Solutions Platform. Asset Class Mix 6 Table of Contents Vehicle Mix Franchise / Platform Mix *Includes CITs, UCITS, private funds, and non-U.S. domiciled pooled vehicles.
As illustrated below, as of December 31, 2025, our current business is well diversified from multiple perspectives, including by asset class, by investment vehicle, by geography, and by Investment Franchise and our Solutions Platform. 6 Table of Contents Asset Class Mix Vehicle Mix 7 Table of Contents Franchise / Platform Mix Geography *Includes CITs, private funds, and non-U.S. domiciled pooled vehicles.
The duties under ERISA require, among other obligations, that fiduciaries perform their duties solely in the interests of ERISA plan participants and beneficiaries. CFTC Regulation – VCM is registered as both a commodity pool operator and commodity trading advisor with the CFTC and a member of the National Futures Association (“NFA”).
The duties under ERISA require, among other obligations, that fiduciaries perform their duties solely in the interests of ERISA plan participants and beneficiaries. CFTC Regulation – VCM is registered as both a commodity pool operator and commodity trading advisor with the CFTC and a member of the National Futures Association (“NFA”) and approved by the NFA as a swap firm.
Under our direction and oversight, our outsourced model enhances our ability to integrate our acquisitions, as we are experienced in working with our vendors to efficiently bring additional Franchises onto our platform in a cost‑efficient manner.
Under our direction 16 Table of Contents and oversight, our outsourced model enhances our ability to integrate our acquisitions, as we are experienced in working with our vendors to efficiently bring additional Franchises onto our platform in a cost‑efficient manner.
Notably, a significant number of our employee shareholders acquired their equity in 2013 in connection with the management‑led buyout with Crestview GP from KeyCorp, as well as in connection with the acquisitions of Munder, RS Investments, and USAA Asset Management Company.
Notably, a significant number of our employee shareholders acquired their equity in 2013 in connection with the management‑led buyout from KeyCorp, as well as in connection with the acquisitions of RS Investments, USAA Asset Management Company, and Pioneer Investments.
The table below sets forth our 10 largest strategies by assets as of December 31, 2024, and their average annual total returns compared to their respective benchmark index over the one‑, three‑, five‑ and 10‑year periods ended December 31, 2024. These strategies represented approximately 50% of our Total Assets as of December 31, 2024.
The table below sets forth our 10 largest strategies by assets as of December 31, 2025, and their average annual total returns compared to their respective benchmark index over the one‑, three‑, five‑ and 10‑year periods ended December 31, 2025. These strategies represented approximately 44% of our Total Client Assets as of December 31, 2025.
We also have the capability to deliver our strategies in investment vehicles designed to 12 Table of Contents meet the needs and preferences of investors in each channel.
We also have the capability to deliver our strategies in investment vehicles designed to meet the needs and preferences of investors in each channel.
Economic and Structural Alignment of Interests Promotes Ownership Culture – Through our revenue share compensation model for our Franchises and broad employee ownership, we have structurally aligned our employees’ long-term interests with those of our clients and shareholders and have created an ownership culture that encourages employees to act in the best interests of clients and our Company shareholders.
Economic and Structural Alignment of Interests Promotes Ownership Culture – Through our revenue share compensation model for our investment professionals and broad firmwide employee equity and product ownership, we have structurally aligned our employees’ long-term interests with those of our clients and shareholders and have created an ownership culture that encourages employees to act in the best interests of clients and our Company shareholders.
Victory Capital’s strategies are sold directly to investors as well as through third-party investment products, including mutual funds, third-party ETF model strategies, retail SMAs and UMAs through wrap account programs, CITs, and UCITS. Our product mix could expand, as we can add investment vehicles to strategies offered by our Investment Franchises.
Victory Capital’s strategies are sold directly to investors as well as through third-party investment products, including mutual funds, third-party ETF model strategies, retail SMAs and UMAs through wrap account programs, CITs, and UCITS. Our product types may expand further, as we can add investment vehicles for strategies offered by our Investment Franchises.
Our SEC filings are available to the public from the SEC’s public internet site at https://www.sec.gov. 18 Table of Contents We maintain a public internet site at ir.vcm.com and make available free of charge through this site our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We maintain a public internet site at ir.vcm.com and make available free of charge through this site our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Further, to enhance our presence on large distribution platforms, we have focused our efforts on servicing intermediary home offices and research departments. These efforts have led to strong growth in platform penetration, as measured by investment products on approved and recommended lists, as well as our inclusion in model portfolios.
Further, to enhance our presence on large distribution platforms, we have focused our efforts on servicing intermediary home offices and research departments. These efforts have led to robust 15 Table of Contents growth in platform penetration, as measured by investment products on approved and recommended lists, as well as our inclusion in model portfolios.
WestEnd Advisors – WestEnd is a third-party ETF model strategist providing turnkey, core model allocation strategies serving as holistic solutions and complementary sources of alpha. WestEnd is based in Charlotte, NC, and had assets under advisement (“AUA”) and AUM totaling $22.8 billion as of December 31, 2024.
WestEnd Advisors – WestEnd is a third-party ETF model strategist providing turnkey, core model allocation strategies serving as holistic solutions and complementary sources of alpha. WestEnd is based in Charlotte, NC, and had assets under advisement (“AUA”) and AUM totaling $26.9 billion as of December 31, 2025.
We regularly evaluate potential acquisition candidates and maintain a strong network of industry participants and advisors who provide opportunities to establish potential target relationships and source transactions.
Summary of Prior Key Acquisitions We regularly evaluate potential acquisition candidates and maintain a strong network of industry participants and advisors who provide opportunities to establish potential target relationships and source transactions.
We also post on our website the charters for our board of directors’ Audit Committee, Nominating, Governance and Sustainability Committee and Compensation Committee, as well as our Corporate Governance Guidelines, our Corporate Responsibility Statement, and our Code of Business Conduct and Ethics governing our directors, officers, and employees.
We also post on our website the charters for our board of directors’ Audit Committee, Nominating and Governance Committee and Compensation Committee, as well as our Corporate Governance Guidelines, our Responsible Business Reports, and our Code of Business Conduct and Ethics governing our directors, officers, and employees.
Most of our strategies are in asset classes that require specialized skill, are in demand, and typically command attractive fee rates. With the growth of our Solutions Platform and third-party ETF model strategies, our average fee rate is likely to decline as those businesses continue to grow and represent an increasing proportion of our total AUM.
Most of our strategies are in asset classes that require specialized skill, are in demand, and typically command attractive fee rates. With the growth of our Solutions Platform and third-party ETF model strategies, our average fee rate could fluctuate as those businesses continue to scale and represent an increasing proportion of our total AUM.
Integrated Platform Providing Centralized Distribution, Marketing, and Support Functions to Investment Franchises, which maintain complete Investment Autonomy – Our highly integrated centralized operating and distribution platform allows us to achieve benefits from both our substantial scale and the focus of our specialized investment managers.
Integrated Platform Providing Centralized Distribution, Marketing, and Support Functions to Investment Franchises, which maintain Investment Autonomy – Our integrated centralized (not standardized) operating and distribution platform allows us to achieve benefits from both our substantial scale and the focus of our investment managers.
Although our operations are highly centralized, we allow our Franchises a degree of customization with respect to their desired investment support functions, which we believe helps them maintain their unique investment processes and minimize disruptions.
Although our operations are centralized, we allow our Investment Franchises a degree of customization with respect to their desired investment support functions, which we believe helps them maintain their unique investment processes and operational preferences without disruptions.
Proven Acquirer with Compelling Value Proposition – We believe our platform allows us to continue to be a strategic acquirer within the investment management industry, providing us with an opportunity to further grow and scale our business, expand our distribution capabilities, that optimize our operating platform and achieve our integration and synergy expectations.
Proven Acquirer with Compelling Value Proposition – We believe our platform allows us to continue to be a strategic acquirer, providing us with an opportunity to further grow and scale our business, expand our distribution capabilities, optimize our operating platform and achieve our integration and synergy expectations.
RS Global utilizes a highly disciplined quantitative approach to managing core‑oriented global and international equity strategies. RS Investments is based in San Francisco, CA, and managed $9.7 billion in AUM as of December 31, 2024. Our RS Investments Investment Franchise teams total 23 members including 18 investment professionals with average industry experience of approximately 23 years.
RS Global utilizes a highly disciplined quantitative approach to managing core‑oriented global and international equity strategies. RS Investments is based in San Francisco, CA, and managed $19.8 billion in AUM as of December 31, 2025. 9 Table of Contents Our RS Investments Investment Franchise teams total 18 investment professionals with average industry experience of approximately 23 years.
Furthermore, we believe equity ownership by our investment professionals and other employees reinforces our ownership culture by sharing in the potential upside of the entirety of our diversified investment management business. 11 Table of Contents Making us an even more attractive partner to investment firms seeking non-US distribution, is our 15-year exclusive global distribution agreement with Amundi which is scheduled to commence upon closing of the transaction in 2025.
Furthermore, we believe equity ownership by our investment professionals and other employees reinforces our ownership culture by sharing in the potential upside of the entirety of our diversified investment management business. 12 Table of Contents Making us an even more attractive partner to investment firms seeking global distribution is our 15-year exclusive offshore distribution agreement with Amundi which commenced in 2025.
We believe the diversity in investment styles reduces the correlation between the return profiles of strategies within the same asset class and consequently provides an additional layer of diversification of AUM and revenue stability. Our AUM is also well diversified at the Franchise level, with no Franchise accounting for more than 20% of total AUM.
We believe the diversity in investment styles reduces the correlation between the return profiles of strategies within the same asset class and consequently provides an additional layer of diversification of AUM and revenue stability. Our AUM is also well diversified at the Franchise level.
On an equally weighted basis, 65% of our strategies outperformed their benchmarks over a ten‑year period, 58% over a five‑year period, 58% over a three‑year period, and 53% over a one-year period. We consider both the AUM‑weighted and equal‑weighted metrics in evaluating our investment performance.
On an equally weighted basis, 68% of our strategies outperformed their benchmarks over a ten‑year period, 69% over a five‑year period, 62% over a three‑year period, and 60% over a one-year period. We consider both the AUM‑weighted and equal‑weighted metrics in evaluating our investment performance.
As of December 31, 2024, 45 of our Victory Capital mutual funds and ETFs, with Morningstar overall ratings, earned ratings of four or five stars overall and 66% of our mutual fund and ETF AUM were rated four or five stars overall by Morningstar.
As of December 31, 2025, 54 of our Victory Capital mutual funds and ETFs, with Morningstar overall ratings, earned ratings of four or five stars overall and 65% of our mutual fund and ETF AUM were rated four or five stars overall by Morningstar.
Through numerous transactions and our recent announcement to acquire Amundi, we have demonstrated an ability to successfully source, execute, and integrate new Franchises. We believe our unique business model is attractive for potential acquisition prospects.
Through numerous transactions we have demonstrated an ability to successfully source, execute, and integrate new businesses. We believe our unique business model is attractive for potential acquisition prospects.
As of December 31, 2024, our Franchises and our Solutions Platform collectively managed a diversified set of 124 investment strategies.
As of December 31, 2025, our Franchises and our Solutions Platform collectively managed a diversified set of 187 investment strategies.
Our Solutions Platform is based in San Antonio, TX, and managed $58.6 billion in AUM as of December 31, 2024. The Solutions Platform team of 14 includes 13 investment professionals with average industry experience of approximately 17 years.
Our Solutions Platform is based in San Antonio, TX, and managed $55.8 billion in AUM as of December 31, 2025. The Solutions Platform team of 20 includes 14 investment professionals with average industry experience of approximately 17 years.
Item 1. Business Overview We are a diversified global asset management firm with total assets under management (“AUM”) of $171.9 billion, and $176.1 billion in total client assets, as of December 31, 2024. Our differentiated business model combines boutique investment qualities with the benefits of an integrated, centralized (not standardized) operating and distribution platform.
Item 1. Business Overview We are a diversified global asset management firm with total assets under management (“AUM”) of $313.8 billion, and $316.6 billion in total client assets, as of December 31, 2025. Our differentiated business model combines boutique investment qualities with the benefits of a scaled, integrated, centralized (not standardized) operating and distribution platform.
Through our unified distribution platform, our Franchises can efficiently sell their products to institutional investors, retirement plans, wealth managers, directly to individual investors, as well as through retail and retirement intermediaries of all sizes, where it can be challenging for smaller managers to gain access.
Through our unified distribution platform, our Franchises can efficiently sell their products to institutional investors, retirement plans, wealth managers, directly to individual investors, as well as through retail and retirement intermediaries of all sizes, and to investors located outside of the U.S. across numerous geographies and regulatory jurisdictions, where it can be challenging for smaller managers to gain access.
Within these channels, clients are further diversified among intermediary (broker dealer and RIAs) platforms, sub advisory relationships, corporate and public entities, insurance companies, 529 Education Saving Plan participants, Taft-Hartley plans, endowments, and Family Offices.
Within these channels, clients are further diversified among intermediary platforms (broker dealer, RIA, wealth), sub advisory relationships, corporate and public entities, insurance companies, 529 Education Saving Plan participants, Taft-Hartley plans, endowments, Family Offices, and various geographic jurisdictions around the world.
At year-end, our employees also had approximately $240 million of their personal assets invested in our investment products at their own discretion. We believe that doing our part to maintain the health and welfare of our employees is a critical element for achieving commercial success.
At year-end, our employees also had more than $350 million of their personal assets invested in our investment products. 17 Table of Contents We believe that doing our part to maintain the health and welfare of our employees is a critical element for achieving commercial success.
Victory Income Investors is based in San Antonio, TX, and managed $29.8 billion in AUM as of December 31, 2024. Our Victory Income Investors Investment Franchise has a team of 40 including 30 investment professionals with an average industry experience of approximately 23 years.
Victory Income Investors is based in San Antonio, TX, and managed $35.6 billion in AUM as of December 31, 2025. Our Victory Income Investors Investment Franchise has a team of 39 including 30 investment professionals with an average industry experience of approximately 25 years.
With 11 autonomous Investment Franchises and a Solutions Platform, Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan.
With multiple Investment Franchises and a Solutions Platform that maintain autonomy in their respective investment processes, Victory Capital offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed 3 Table of Contents end funds, and a 529 Education Savings Plan.
We believe this broad diversification of customers has a stabilizing effect on revenue, as various types of investors have unique demand patterns and respond differently to trends and market cycles. Our Investment Franchises Our 11 Investment Franchises and Solutions Platform are not separate legal entities.
We believe this broad diversification of customers has a stabilizing effect on revenue, as diverse types of investors have unique demand patterns and respond differently to trends and market cycles. Our Investment Franchises Our eight Investment Franchises and Solutions Platform are not separate legal entities, with one exception: WestEnd Advisors operates as a separate RIA and legal entity.
Recent initiatives include investments in artificial intelligence (AI), data and analytics, technology, distribution, and marketing to enhance organic growth in our business and increase the effectiveness of our distribution channels. Inorganic Growth – We complement our organic growth through strategic acquisitions.
We continually evaluate and make investments to improve our operating platform. Recent initiatives include investments in artificial intelligence ("AI"), data and analytics, technology, product development, U.S. and International distribution, and marketing to enhance organic growth in our business and increase the effectiveness of our distribution channels. Inorganic Growth – We complement our organic growth through strategic acquisitions.
VCM is also licensed as an Australian Financial Services Licensee pursuant to section 913B of the Corporations Act 2001 subject to certain conditions and restrictions prescribed and contained within the license.
VCM is also licensed as an Australian Financial Services Licensee pursuant to section 913B of the Corporations Act 2001 subject to certain conditions and restrictions prescribed and contained within the license. Compliance – Our legal and compliance functions consist of 26 professionals as of December 31, 2025.
Our team is very experienced and has a history of success in meeting those objectives. Previous acquisitions have evolved and diversified our products resulting in a mix of compelling investment strategies in asset classes where we can be successful and earn sustainable management fees.
Previous acquisitions have evolved and diversified our products resulting in a mix of compelling investment strategies in asset classes where we can be successful and earn sustainable management fees.
We believe the high percentage of employee ownership creates a collective alignment with our success. Additionally, our employees invest in products managed by our Franchises and Solutions Platform, providing direct alignment with the interests of our clients. As of December 31, 2024, 81% of our employees held 13% of the equity in our Company.
We believe the high percentage of employee ownership creates a collective alignment with our success. Additionally, our employees invest in products managed by our Franchises and Solutions Platform, providing direct alignment with the interests of our clients. As of December 31, 2025, 69% of our employees controlled 12% of the fully diluted common shares in our Company.
For example, U.S. mid cap equities, which accounted for approximately 17% of Total AUM as of December 31, 2024, consists of five Franchises, each following a different investment strategy.
For example, U.S. mid cap equities, which accounted for approximately 9% of Total Client Assets as of December 31, 2025, consists of four Franchises, each following a different investment strategy.
We are committed to maintaining the same guiding principles with alternative Investment Franchises that led to success with our traditional Investment Franchises. Diversification Strategy We offer an array of equity, fixed income, investment models, alternative investments, closed end private funds, and solutions strategies that encompass a diverse spectrum of market capitalization segments, industry sectors, investment styles and approaches.
Diversification Strategy We offer an array of equity, fixed income, investment models, alternative investments, closed end private funds, and solutions strategies that encompass a diverse spectrum of market capitalization segments, industry sectors, investment styles and approaches.
Based on our successful acquisition track record, we believe that there is a significant opportunity for us to continue to profitably grow through additional acquisitions, as industry dynamics have expanded the universe of potential acquisition targets. Alternative Investments – We launched our alternative investments platform with the acquisition of New Energy Capital (“NEC”).
Based on our successful acquisition track record, we believe that there is a significant opportunity for us to continue to profitably grow through additional acquisitions, as industry dynamics have expanded the universe of potential acquisition targets. Alternative Investments – We offer both open-end liquid alternative investments as well as closed-end private funds.
Based in Norwalk, CT, our THB Investments Franchise includes eight investment professionals with an average industry experience of approximately 15 years. Trivalent Investments – Trivalent Investments utilizes a disciplined approach to stock selection across large to small companies in the international and emerging markets space.
Our Sycamore Investment Franchise has a team of 18 including 12 investment professionals with average industry experience of approximately 18 years. Trivalent Investments – Trivalent Investments utilizes a disciplined approach to stock selection across large to small companies in the international and emerging markets space.
Through this agreement, we will have access to a broad and deep distribution and joint venture network around the globe. Because we integrate a significant portion of most of our Franchises’ distribution, operational and administrative functions, we have been able to extract significant expense synergies from certain acquisitions, enabling us to create greater value from transactions.
Because we integrate a sizable portion of most of our Franchises’ distribution, operational and administrative functions, we have been able to extract significant expense synergies from certain acquisitions, enabling us to create greater value from transactions.
VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, two mutual fund series named the Victory Portfolios II and Victory Portfolios III (collectively, the “Victory Funds”), that are families of open-end mutual funds; VictoryShares (the Company’s ETF brand), and the USAA 529 Education Savings Plan.
VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, the mutual fund series of the Victory Portfolios II, Victory Portfolios III, and Victory Portfolios IV (collectively, the “Victory Funds”), a family of open-end mutual funds, and the VictoryShares (the Company’s ETF brand).
Our Investment Franchises are independent from one another from an investment process perspective, maintain their own separate brands and logos, which have been built over time, and are led by dedicated Chief Investment Officers (“CIOs”) or a dedicated management team. We customize each Franchise’s integration with our operating platform to optimize their investment processes.
We are well diversified across asset classes, investment approaches, and geographically. Our Investment Franchises are independent from one another from an investment process perspective, maintain their own separate brands and logos, which have been built over time, and are led by dedicated Chief Investment Officers (“CIOs”) or a dedicated management team.
As of December 31, 2024, 79% 9 Table of Contents of our strategies by AUM had returns in excess of their respective benchmarks over a ten‑year period, 73% over a five‑year period, 59% over a three‑year period, and 47% over a one-year period.
As of December 31, 2025, 78% of our strategies by AUM had returns in excess of their respective benchmarks over a ten‑year period, 68% over a five‑year period, 63% over a three‑year period, and 63% over a one-year period.
In recognition of this mission, Victory Capital has established an equity awards program, in which most employees participate. As of December 31, 2024, we had 460 employees, with 81% holding ownership interests in our Company that totaled 13% of the equity in our firm.
In recognition of this mission, Victory Capital has established an equity awards program, in which most employees participate. As of December 31, 2025, we had 699 employees, with 69% holding ownership interests in our Company totaling 12% of the fully diluted common shares in our firm.
Our design logos and the marks “Victory Capital,” “Victory Capital Management,” “Victory Funds,” “VictoryShares,” “Victory Capital inVest,” “Victory Capital Solutions,” “inVest,” “Munder,” “Munder Capital Management,” “New Energy Capital,” “THB,” “The Road to Victory,” “RS Investments,” “Sycamore Capital,” “Trivalent Investments,” “Victory Income Investors”, “USAA 529 Education Savings Plan,” and “WestEnd Advisors,” are pending, owned, or licensed for a period of time by us or one of our subsidiaries.
Our design logos and the marks “Victory Capital,” “Victory Capital Management,” “Victory Funds,” “VictoryShares,” “Victory Capital inVest,” “Victory Capital Solutions,” “inVest,” “Munder,” “Munder Capital,” “New Energy Capital,” “Pioneer Investments," “THB,” “The Road to Victory,” “RS Investments,” “Sycamore Capital,” “Trivalent Investments,” “Victory Income Investors,” and “WestEnd Advisors,” are pending or owned by us as of December 31, 2025.
Finally, the well-being of our employees is enhanced when they can give back to their local communities or charities and we have programs that encourage our employees to give back to their local communities.
Finally, the well-being of our employees is enhanced when they can give back to their local communities or charities. We have programs that facilitate this by encouraging employees to contribute both their time and monetary donations to causes they care about.
Outsourcing these functions enables us to grow our AUM, both organically and through acquisitions, without the incremental capital expenditures and working capital that would typically be needed.
These enterprise-wide programs are integrated across our centralized platform and regularly tested to address evolving threats and regulatory requirements. Outsourcing these functions enables us to grow our AUM, both organically and through acquisitions, without the incremental capital expenditures and working capital that would typically be needed.
We maintain relationships with multiple vendors for most of our outsourced functions, which we believe mitigates vendor‑specific risk. We also have cyber and information security, business continuity and data privacy programs in place to help mitigate risk.
We maintain relationships with multiple vendors for most of our outsourced functions, which we believe mitigates vendor‑specific risk. We maintain comprehensive cyber and information security, business continuity, and data privacy programs designed to protect client assets, sensitive information including personally identifiable information (PII), and operational continuity.
Our legal and compliance teams work through a well‑established reporting and communication structure to ensure we have a consistent and holistic program for legal and regulatory compliance. Senior management also is involved at various levels in all these functions. We cannot assure that our legal and compliance functions will be effective in preventing all losses. Refer to “Item 1A.
This group is responsible for all legal and regulatory compliance matters, as well as for monitoring adherence to client investment guidelines. Our legal and compliance teams work through a well‑established reporting and communication structure to ensure we have a consistent and holistic program for legal and regulatory compliance. Senior management also is involved at various levels in all these functions.
We strive to maintain a balance between direct investors, retail clients, and institutional clients with 35%, 41% and 24% of our Total AUM as of December 31, 2024, in each of these channels, respectively.
We strive to maintain a balance between U.S. retail clients, direct U.S. investors, U.S. institutional clients, and international clients with 37%, 20%, 26%, and 17% of our Total Client Assets as of December 31, 2025, in each of these channels and geographies, respectively.
By offering a platform on which Franchises can focus on their core competencies, grow their client base faster and participate in a revenue share program, we believe we are providing a compelling proposition.
Our model reduces the administrative burdens borne by our Investment Franchises and allows them to focus on the investment process, which we believe can enhance their investment performance. By offering a platform on which Franchises can focus on their core competencies, grow their client base faster and participate in a revenue share program, we believe we offer a compelling proposition.
Our Munder Investment Franchise includes four investment professionals with an average industry experience of approximately 24 years. New Energy Capital – NEC manages alternative investments in private closed end funds, with investment periods ranging between five and 10 years.
Integrity is based in Rocky River, OH, and managed $6.0 billion in AUM as of December 31, 2025. Our Integrity Investment Franchise includes 10 investment professionals with average industry experience of approximately 26 years. New Energy Capital (NEC) – NEC manages alternative investments in private closed end funds, with investment periods ranging between five and 10 years.
We encourage you to review our Responsible Business Report (located on our website) for more detailed information regarding our human capital programs and initiatives. Nothing on our website is deemed incorporated by reference into this Report.
We recognize and appreciate the importance of creating an environment in which all employees feel valued, included, and empowered to do their best work. We encourage you to review our Responsible Business Report (located on our website) for more detailed information regarding our human capital programs and initiatives. Nothing on our website is deemed incorporated by reference into this Report.
These asset classes collectively comprised 88% of our $171.9 billion of total AUM, and 90% of long-term AUM, as of December 31, 2024. Product Mix – Our investment strategies are offered through actively and passively managed mutual funds, rules-based and active ETFs, institutional separate accounts, VIPs, alternative investments, private closed end funds, and a 529 Education Savings Plan.
Product Diversification – Our investment strategies are offered through actively and passively managed mutual funds, rules-based and active ETFs, institutional separate accounts, VIPs, alternative investments, private closed end funds, and a 529 Education Savings Plan.
During 2024, we entered into a definitive agreement with Amundi SA (“Amundi”) to combine their US operations (“Amundi US”) into Victory Capital, to establish long-term global distribution agreements, and Amundi to become a strategic shareholder of Victory Capital.
During 2025, we closed on our strategic transaction with Amundi SA (“Amundi”) to combine their U.S. operations (“Amundi US”) into Victory Capital, established exclusive long-term global distribution agreements, and Amundi became a strategic shareholder of Victory Capital.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCapital Structure and Public Company Risks • If a relatively large percentage of our common stock is concentrated with a small number of shareholders, it could increase the volatility in our stock trading and affect our share price . • The market price of our common stock is likely to be volatile and could decline. • Future sales of shares by shareholders could cause our stock price to decline. • If securities or industry analysts publish misleading or unfavorable research about our business, our stock price and trading volume could decline. • The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business. • Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, operating results and stock price. • Our ability to pay regular dividends is subject to our Board’s discretion and Delaware law. 20 Table of Contents • Future offerings of debt or equity securities may rank senior to our common stock. • Provisions in our charter documents could discourage a takeover that shareholders may consider favorable. • Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Biggest changePublic Company Risks • The market price of our Common Stock is likely to be volatile and could decline. • Future sales of shares by shareholders could cause our stock price to decline. • Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, operating results and stock price. • Our ability to pay regular dividends is subject to our Board's discretion and Delaware law. • Future offerings of debt or equity securities may dilute or rank senior to our common stock. • Provisions in our charter documents could discourage a takeover that shareholders may consider favorable. • Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • Our certificate of incorporation contains a corporate opportunity waiver that permits certain of our significant stockholders and their affiliates to compete with us and to pursue business opportunities without offering them to us, which may result in conflicts of interest and limit our access to potentially beneficial transactions .
We provide a broad range of administrative services to the Victory Funds and VictoryShares, including providing personnel to the Victory Funds and VictoryShares to serve as directors and officers, the preparation or supervision of the preparation of the Victory Funds' and VictoryShares’ regulatory filings, maintenance of board calendars and preparation or supervision of the preparation of board meeting materials, management of compliance and regulatory matters, provision of shareholder services and communications, accounting services, including the supervision of the activities of the Victory Funds’ and VictoryShares’ accounting services provider in the calculation of the funds’ net asset values, supervision of the preparation of the Victory Funds’ and VictoryShares’ financial statements and coordination of the audits of those financial statements, tax services, including calculation of dividend and distribution amounts and supervision of tax return preparation, supervision of the work of the Victory Funds’ and VictoryShares’ other service providers, VCTA acting as transfer agent to the Victory Funds III and VCS acting as a distributor for the Victory Funds.
We provide a broad range of administrative services to the Victory Funds and VictoryShares, including providing personnel to the Victory Funds and VictoryShares to serve as directors and officers, the preparation or supervision of the preparation of the Victory Funds' and VictoryShares’ regulatory filings, maintenance of board calendars and preparation or supervision of the preparation of board meeting materials, management of compliance and regulatory matters, provision of shareholder services and communications, accounting services, including the supervision of the activities of the Victory Funds’ and VictoryShares’ accounting services provider in the calculation of the funds’ net asset values, supervision of the preparation of the Victory Funds’ and VictoryShares’ financial statements and coordination of the audits of those financial statements, tax services, including calculation of dividend and distribution amounts and supervision of tax return preparation, supervision of the work of the Victory Funds’ and VictoryShares’ other service providers, VCTA acting as transfer agent to the Victory Funds III and VCS acting as a distributor for the Victory Funds and VictoryShares.
Increasing government and regulatory scrutiny of the measures taken by companies to protect against cyberattacks and data privacy breaches, and have resulted in heightened security requirements, including additional regulatory expectations for oversight of vendors and service providers.
Increasing government and regulatory scrutiny of the measures taken by companies to protect against cyberattacks and data privacy breaches have resulted in heightened security requirements, including additional regulatory expectations for oversight of vendors and service providers.
Factors that could cause the market price of our Common Stock to fluctuate significantly include: • our operating and financial performance and prospects and the performance of other similar companies; • our quarterly or annual earnings or those of other companies in our industry; • conditions that impact demand for our products and services; • the public’s reaction to our press releases, financial guidance and other public announcements, and filings with the SEC; • changes in earnings estimates or recommendations by securities or research analysts who track our Common Stock; • market and industry perception of our level of success in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in government and other regulations; changes in accounting standards, policies, guidance, interpretations or principles; • departure of key personnel; • the number of shares publicly traded; • sales of our Common Stock by us, our investors or members of our management team; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, telecommunications failures, cyber‑attacks, civil unrest in various parts of the world, acts of war, terrorist attacks or other catastrophic events. 33 Table of Contents Any of these factors may result in large and sudden changes in the trading volume and market price of our Common Stock.
Factors that could cause the market price of our Common Stock to fluctuate significantly include: • our operating and financial performance and prospects and the performance of other similar companies; • our quarterly or annual earnings or those of other companies in our industry; • conditions that impact demand for our products and services; • the public’s reaction to our press releases, financial guidance and other public announcements, and filings with the SEC; • changes in earnings estimates or recommendations by securities or research analysts who track our Common Stock; • market and industry perception of our level of success in pursuing our growth strategy; • strategic actions by us or our competitors, such as acquisitions or restructurings; • changes in government and other regulations; changes in accounting standards, policies, guidance, interpretations or principles; • departure of key personnel; • the number of shares publicly traded; • sales of our Common Stock by us, our investors or members of our management team; and • changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, telecommunications failures, cyber‑attacks, civil unrest in various parts of the world, acts of war, terrorist attacks or other catastrophic events. 32 Table of Contents Any of these factors may result in large and sudden changes in the trading volume and market price of our Common Stock.
Department of Labor ("DOL") Reforms The DOL’s 2024 amended fiduciary rule broadening the definition of who is considered an “investment advice fiduciary” to a retirement investor, and adding significant restrictions and requirements for the use of prohibited transaction exemptions typically relied upon by investment firms such as ours, remains subject to applicable legal challenges.
Department of Labor Reforms The DOL’s 2024 amended fiduciary rule broadening the definition of who is considered an “investment advice fiduciary” to a retirement investor, and adding significant restrictions and requirements for the use of prohibited transaction exemptions typically relied upon by investment firms such as ours, remains subject to applicable legal challenges.
Our failure to comply with investment guidelines set by our clients, including the boards of registered funds, and limitations imposed by applicable law, could result in damage awards against us and a loss of AUM, either of which could adversely affect our results of operations or financial condition.
Our failure to comply with investment guidelines set by our clients, including the boards of registered and unregistered funds, and limitations imposed by applicable law, could result in damage awards against us and a loss of AUM, either of which could adversely affect our results of operations or financial condition.
When clients retain us to manage assets on their behalf, they generally specify certain guidelines regarding investment allocation and strategy that we are required to follow in managing their assets. The boards of registered funds we manage generally establish similar guidelines regarding the investment of assets in those funds.
When clients retain us to manage assets on their behalf, they generally specify certain guidelines regarding investment allocation and strategy that we are required to follow in managing their assets. The boards of registered and unregistered funds we manage generally establish similar guidelines regarding the investment of assets in those funds.
Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business, results of operations and financial condition.
Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our reputation, business, results of operations and financial condition.
Among other things, these provisions: • permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a shareholder rights plan; • provide that our board of directors is expressly authorized to amend or repeal any provision of our bylaws; • restrict the forum for certain litigation against us to Delaware; 36 Table of Contents • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at annual shareholder meetings; • establish a classified board of directors with three classes of directors and the removal of directors only for cause; • require that actions to be taken by our shareholders be taken only at an annual or special meeting of our shareholders, and not by written consent; • establish certain limitations on convening special shareholder meetings; and • restrict business combinations with interested shareholders.
Among other things, these provisions: • permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a shareholder rights plan; • provide that our board of directors is expressly authorized to amend or repeal any provision of our bylaws; • restrict the forum for certain litigation against us to Delaware; • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at annual shareholder meetings; • establish a classified board of directors with three classes of directors and the removal of directors only for cause; • require that actions to be taken by our shareholders be taken only at an annual or special meeting of our shareholders, and not by written consent; • establish certain limitations on convening special shareholder meetings; and • restrict business combinations with interested shareholders.
Potential difficulties that we may encounter in the integration process include the following: • the integration of personnel, operations, strategies, technologies and support services; • the disruption of ongoing businesses and distraction of their respective personnel from ongoing business concerns; • the retention of the existing clients; • the retention of key intermediary distribution relationships; • the integration of corporate cultures and maintenance of employee morale; 30 Table of Contents • the retention of key employees; • the creation of uniform standards, controls, procedures, policies and information systems; • the reduction of the costs associated with combining operations; • the consolidation and rationalization of information technology platforms and administrative infrastructures; and • potential unknown liabilities; The anticipated benefits and synergies include the elimination of duplicative personnel, realization of efficiencies in consolidating duplicative corporate, business support functions and amortization of purchased intangibles for tax purposes.
Potential difficulties that we may encounter in the integration process include the following: • the integration of personnel, operations, strategies, technologies and support services; • the disruption of ongoing businesses and distraction of their respective personnel from ongoing business concerns; • the retention of the existing clients; • the retention of key intermediary distribution relationships; • the integration of corporate cultures and maintenance of employee morale; • the retention of key employees; • the creation of uniform standards, controls, procedures, policies and information systems; • the reduction of the costs associated with combining operations; • the consolidation and rationalization of information technology platforms and administrative infrastructures; and • potential unknown liabilities; The anticipated benefits and synergies include the elimination of duplicative personnel, realization of efficiencies in consolidating duplicative corporate, business support functions and amortization of purchased intangibles for tax purposes.
In making decisions regarding our quarterly dividends, we consider general economic and business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions (including under the terms of our Fifth Amendment to the 2019 Credit Agreement) and legal, tax, regulatory and such other factors as we may deem relevant.
In making decisions regarding our quarterly dividends, we consider general economic and business conditions, our strategic plans and prospects, our businesses and investment opportunities, our financial condition and operating results, working capital requirements and anticipated cash needs, contractual restrictions (including under the terms of our Sixth Amendment to the 2019 Credit Agreement) and legal, tax, regulatory and such other factors as we may deem relevant.
Certain of our strategies invest principally in the securities of non‑U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. As of December 31, 2024, approximately 10% of our total AUM was invested in strategies that primarily invest in securities of non‑U.S. companies and securities denominated in currencies other than the U.S. dollar.
Certain of our strategies invest principally in the securities of non‑U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. As of December 31, 2025, approximately 10% of our total AUM was invested in strategies that primarily invest in securities of non‑U.S. companies and securities denominated in currencies other than the U.S. dollar.
Our assessment concluded that our internal control over financial reporting was effective as of December 31, 2024; however, there can be no assurance that we will be able to maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time in future periods.
Our assessment concluded that our internal control over financial reporting was effective as of December 31, 2025; however, there can be no assurance that we will be able to maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time in future periods.
In the U.S., the SEC adopted, but subsequently stayed implementation of, climate disclosure rules to require public issuers to include enhanced disclosure and financial metrics regarding corporate climate- related information in their periodic reports and registration statements, and these rules remain subject to applicable legal challenges.
In the U.S., the SEC adopted, but subsequently stayed the implementation of, climate disclosure rules to require public issuers to include enhanced disclosure and financial metrics regarding corporate climate-related information in their periodic reports and registration statements. These rules remain stayed and subject to ongoing legal challenges.
While it has not had a material adverse effect on our business, operations and financial results, the extent to which the geopolitical uncertainty and conflicts impact our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: 22 Table of Contents the duration and scope of the uncertainty and conflicts; governmental and business actions that have been and continue to be taken in response, and the impact on economic activity.
While it has not had a material adverse effect on our business, operations and financial results, the extent to which the geopolitical uncertainty and conflicts impact our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the uncertainty and conflicts; governmental and business actions that have been and continue to be taken in response, and the impact on economic activity.
If our strategies perform poorly for any reason, our earnings could decline because: • our existing clients may redeem their assets from our strategies or terminate their relationships with us; • the Morningstar and Lipper ratings and rankings of mutual funds and ETFs we manage may decline, which may adversely affect the ability of those funds to attract new or retain existing assets; and • third‑party financial intermediaries, advisors or consultants may remove our investment products from recommended lists due to poor performance or for other reasons, which may lead our existing clients to redeem their assets from our strategies or reduce asset inflows from these third parties or their clients.
If our strategies perform poorly for any reason, our earnings could decline because: • our existing clients may redeem their assets from our strategies or terminate their relationships with us; 24 Table of Contents • the Morningstar and Lipper ratings and rankings of mutual funds, ETFs and UCITS we manage may decline, which may adversely affect the ability of those funds to attract new or retain existing assets; and • third‑party financial intermediaries, advisors or consultants may remove our investment products from recommended lists due to poor performance or for other reasons, which may lead our existing clients to redeem their assets from our strategies or reduce asset inflows from these third parties or their clients.
Our ability to repay the principal amount of any outstanding loans under the 2019 Credit Agreement, to refinance our debt or 31 Table of Contents to obtain additional financing through debt or the sale of additional equity securities will depend on our performance, as well as financial, business and other general economic factors affecting the credit and equity markets generally or our business in particular, many of which are beyond our control.
Our ability to repay the principal amount of any outstanding loans under the 2019 Credit Agreement, to refinance our debt or to obtain additional financing through debt or the sale of additional equity securities will depend on our performance, as well as financial, business and other general economic factors affecting the credit and equity markets generally or our business in particular, many of which are beyond our control.
ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are fiduciaries under ERISA, 37 Table of Contents require the investment adviser to carry bonds insuring against losses caused by fraud or dishonesty, prohibit certain transactions involving ERISA plan clients and impose excise taxes for violations of these prohibitions, and mandate certain required periodic reporting and disclosures.
ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are fiduciaries under ERISA, require the investment adviser to carry bonds insuring against losses caused by fraud or dishonesty, prohibit certain transactions involving ERISA plan clients and impose excise taxes for violations of these prohibitions, and mandate certain required periodic reporting and disclosures.
The risk that sufficient appropriate investment opportunities may be unavailable is influenced by a number of factors, including general market conditions, but is particularly acute with respect to our strategies that focus on small‑ and mid‑cap equities, and is likely to increase as our AUM increases, particularly if these increases occur very rapidly.
The risk that sufficient appropriate investment opportunities may be unavailable is influenced by a number of factors, 25 Table of Contents including general market conditions, but is particularly acute with respect to our strategies that focus on small‑ and mid‑cap equities, and is likely to increase as our AUM increases, particularly if these increases occur very rapidly.
In the future, our expenses in connection with those intermediary relationships could increase if the portion of those fees determined to be in connection with marketing and distribution, or otherwise allocated to us, 41 Table of Contents increased. Clients of these intermediaries may not continue to be accessible to us on terms we consider commercially reasonable, or at all.
In the future, our expenses in connection with those intermediary relationships could increase if the portion of those fees determined to be in connection with marketing and distribution, or otherwise allocated to us, increased. Clients of these intermediaries may not continue to be accessible to us on terms we consider commercially reasonable, or at all.
In connection with the Amundi transaction, the Amundi Parties, the Company and VCM, have entered into an Off-Shore Master Distribution and Services Agreement and an On-Shore Master Distribution and Services Agreement (the “Distribution and Services Agreements”) which will become effective on closing of the transaction.
In connection with the Amundi transaction, the Amundi Parties, the Company and VCM, have entered into an Off-Shore Master Distribution and Services Agreement and an On-Shore Master Distribution and Services Agreement (the “Distribution and Services Agreements”) which has become effective on closing of the transaction.
In addition, any acquisition can involve a number of risks, including the 26 Table of Contents existence of known, unknown or contingent liabilities. An acquisition may impose additional demands on our staff that could strain our operational resources and require expenditure of substantial legal, investment banking and accounting fees.
In addition, any acquisition can involve a number of risks, including the existence of known, unknown or contingent liabilities. An acquisition may impose additional demands on our staff that could strain our operational resources and require expenditure of substantial legal, investment banking and accounting fees.
In the U.S., the new presidential administration may shift enforcement priorities under existing regulations, alter existing regulations, or pursue additional rulemaking impacting the financial services industry, whereas certain state and other governmental entities may seek to maintain existing, or implement potentially more rigorous, regulatory requirements in response, which, coupled with legal challenges to a number of significant regulations and judicial decisions regarding administrative law, may create uncertainty or lead to divergent interpretations of law, or change the requirements applicable to our and our affiliates’ businesses.
In the U.S., the election of a new presidential administration has resulted in and may continue to shift enforcement priorities under existing regulations, alter existing regulations, or pursue additional rulemaking impacting the financial services industry, whereas certain state and other governmental entities may seek to maintain existing, or implement potentially more rigorous, regulatory requirements in response, which, coupled with legal challenges to a number of significant regulations and judicial decisions regarding administrative law, may create uncertainty or lead to divergent interpretations of law, or change the requirements applicable to our businesses.
In addition, certain of our strategies have or may have capacity constraints, as there is a limit to the number of securities available for the strategy to operate effectively.
In addition, certain of our strategies have or may have capacity constraints, as there is a limit to the number of securities or size of market available for the strategy to operate effectively.
After an initial term (not to exceed two years), each registered fund’s investment advisory agreement must be approved and renewed annually by that fund’s board, including by its independent members. We maintain a long history of renewing these agreements.
After an initial term (not to exceed two years), each registered fund’s 26 Table of Contents investment advisory agreement must be approved and renewed annually by that fund’s board, including by its independent members. We maintain a long history of renewing these agreements.
The investment management industry is intensely competitive. 40 Table of Contents The investment management industry is intensely competitive, with competition based on a variety of factors, including investment performance, fees, continuity of investment professionals and client relationships, the quality of services provided to clients, corporate positioning and business reputation, continuity of selling arrangements with intermediaries and differentiated products.
The investment management industry is intensely competitive, with competition based on a variety of factors, including investment performance, fees, continuity of investment professionals and client relationships, the quality of services provided to clients, corporate positioning and business reputation, continuity of selling arrangements with intermediaries and differentiated products.
We depend on the skills and expertise of our portfolio managers and other investment professionals and our success depends on our ability to retain the key members of our investment teams, who possess substantial 24 Table of Contents experience in investing and have been primarily responsible for the historical investment performance we have achieved.
We depend on the skills and expertise of our portfolio managers and other investment professionals and our success depends on our ability to retain the key members of our investment teams, who possess substantial experience in investing and have been primarily responsible for the historical investment performance we have achieved.
As a result, we could experience material financial loss, loss of 43 Table of Contents competitive position, regulatory fines and/or sanctions, breach of client contracts, reputational harm or legal liability, which, in turn, could have an adverse effect on our financial condition and results of operations.
As a result, we could experience material financial loss, loss of competitive position, regulatory fines and/or sanctions, breach of client contracts, reputational harm or legal liability, which, in turn, could have an adverse effect on our financial condition and results of operations.
We also look to offer new strategies managed by our existing teams. We expect the costs associated with establishing a new team and/or strategy initially to exceed the revenues generated, which will likely negatively impact our results of operations.
We also look to offer new strategies managed by our existing teams. We expect 28 Table of Contents the costs associated with establishing a new team and/or strategy initially to exceed the revenues generated, which will likely negatively impact our results of operations.
Thus, holders of our Common Stock will bear the risk of our future offerings reducing the market price of our Common Stock and diluting the value of their shareholdings in us. Provisions in our charter documents could discourage a takeover that shareholders may consider favorable.
Thus, holders of our Common Stock will bear the risk of our future offerings reducing the market price of our Common Stock and diluting the value of their shareholdings in us. 33 Table of Contents Provisions in our charter documents could discourage a takeover that shareholders may consider favorable.
This expansion has required and will continue to require us to incur a number of up‑front expenses, including those associated with obtaining and maintaining regulatory approvals and office space, as well as additional ongoing expenses, including those associated with leases, the employment of additional support staff and regulatory compliance.
This expansion has required and will continue to require us to incur a number of up‑front expenses, including those associated with obtaining and maintaining regulatory approvals as well as additional ongoing expenses, including those associated with the employment of additional support staff and regulatory compliance.
The continued long‑term growth of our business will depend on, among other things, successfully making new acquisitions, achieving our synergies, retaining key investment professionals, maintaining existing strategies and selectively developing new, value‑added strategies.
The continued long‑term growth of our business will depend on, among other things, successfully making new acquisitions, achieving 27 Table of Contents our synergies, retaining key investment professionals, maintaining existing strategies and selectively developing new, value‑added strategies.
When a sub‑adviser terminates its sub‑advisory agreement to manage a fund that we advise there is a risk that investors in the fund 25 Table of Contents could redeem their assets in the fund, which would cause our AUM to decrease. Similarly, our fund administration, accounting, and transfer agency agreements are subject to annual fund board approval.
When a sub‑adviser terminates its sub‑advisory agreement to manage a fund that we advise there is a risk that investors in the fund could redeem their assets in the fund, which would cause our AUM to decrease. Similarly, our fund administration, accounting, and transfer agency agreements are subject to annual fund board approval.
If more restrictive privacy laws, rules or industry security requirements are adopted in the future on the Federal or State level, or by a specific industry body, they could have an adverse impact on us through increased costs or business restrictions.
If more restrictive privacy laws, rules or 42 Table of Contents industry security requirements are adopted in the future on the Federal or State level, or by a specific industry body, they could have an adverse impact on us through increased costs or business restrictions.
For the year ended December 31, 2024, we generated approximately 84% of our total revenues from mutual funds and other pooled investment vehicles that we advise (including our proprietary mutual funds, or the Victory Funds, VictoryShares, and other entities for which we are adviser or sub‑adviser).
For the year ended December 31, 2025, we generated approximately 80% of our total revenues from mutual funds and other pooled investment vehicles that we advise (including our proprietary mutual funds, or the Victory Funds, VictoryShares, and other entities for which we are adviser or sub‑adviser).
There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources and price and profitability targets may not prove feasible.
There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed or clients demand the creation of increasingly customizable products. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources and price and profitability targets may not prove feasible.
In those instances, we may choose to limit access to those strategies to new or existing investors, such as we have done for two mutual funds managed by the Sycamore Capital Franchise which had an aggregate of $24.9 billion in AUM as of December 31, 2024. • General domestic and global economic and political conditions can influence AUM.
In those instances, we may choose to limit access to those strategies to new or existing investors, such as we have done for two mutual funds managed by the Sycamore Capital Franchise which had an aggregate of $20.6 billion in AUM as of December 31, 2025. • General domestic and global economic and political conditions can influence AUM.
Business Risks • Pandemics have, and will likely continue to have, a negative impact on the global economy and interrupt normal business activity. • The loss of key investment professionals or members of our senior management team could have a material adverse effect on our business. • We derive substantially all of our revenues from contracts and relationships that may be terminated upon short or no notice. • Investors in certain funds that we advise can redeem their assets from those funds at any time without prior notice. • Investment recommendations provided to our direct investor channel may not be suitable or fulfill regulatory requirements; representatives may not disclose or address conflicts of interest, conduct 19 Table of Contents inadequate due diligence, provide inadequate disclosure; transactions may be subject to human error or fraud. • The significant growth we have experienced over the past few years may be difficult to sustain and our growth strategy is dependent in part upon our ability to make and successfully integrate new strategic acquisitions. • Our expenses are subject to fluctuations that could materially impact our results of operations. • A significant proportion of our existing AUM is managed in long‑only investments. • Our efforts to establish and develop new teams and strategies may be unsuccessful and could negatively impact our results of operations and could negatively impact our reputation and culture. • An assignment could result in termination of our investment advisory agreements to manage SEC‑registered funds and could trigger consent requirements in our other investment advisory agreements. • Our failure to comply with investment guidelines set by our clients, including the boards of registered funds, and limitations imposed by applicable law, could result in damage awards against us and a loss of AUM, either of which could adversely affect our results of operations or financial condition. • We provide a broad range of services to the Victory Funds, VictoryShares and sub‑advised mutual funds which may expose us to liability. • Potential impairment of goodwill and intangible assets could result in not realizing the value of these assets. • If we were deemed an investment company required to register under the Investment Company Act of 1940 (the “Investment Company Act”), we would become subject to burdensome regulatory requirements and our business activities could be restricted.
Business Risks • The loss of key investment professionals or members of our senior management team could have a material adverse effect on our business. • We derive substantially all of our revenues from contracts and relationships that may be terminated upon short or no notice. • Investors in certain funds that we advise can redeem their assets from those funds at any time without prior notice. • Investment recommendations provided to our direct investor channel may not be suitable or fulfill regulatory requirements; representatives may not disclose or address conflicts of interest, conduct inadequate due diligence, provide inadequate disclosure; transactions may be subject to human error or fraud. • The significant growth we have experienced over the past few years may be difficult to sustain and our growth strategy is dependent in part upon our ability to make and successfully integrate new strategic acquisitions. • Our expenses are subject to fluctuations that could materially impact our results of operations. • New lines of business or new products and services may subject us to reputational harm, additional costs or operating risks. • Our efforts to establish and develop new teams and strategies may be unsuccessful and could negatively impact our results of operations and could negatively impact our reputation and culture. • An assignment could result in termination of our investment advisory agreements to manage SEC‑registered funds and could trigger consent requirements in our other investment advisory agreements. • Our failure to comply with investment guidelines set by our clients, including the boards of registered and unregistered funds, and limitations imposed by applicable law, could result in damage awards against us and a loss of AUM, either of which could adversely affect our results of operations or financial condition. • We provide a broad range of services to the Victory Funds, VictoryShares and sub‑advised mutual funds which may expose us to liability. • Potential impairment of goodwill and intangible assets could result in not realizing the value of these assets. • If we were deemed an investment company required to register under the Investment Company Act of 1940 (the “Investment Company Act”), we would become subject to burdensome regulatory requirements and our business activities could be restricted.
We are exposed to risks arising from our International Activities In addition to having an office Singapore and UK subsidiary, we provide investment management services in a number of jurisdictions outside of the United States.
We are exposed to risks arising from our International Activities In addition to having a UK subsidiary, we provide investment management services in a number of jurisdictions outside of the United States.
General Risks • Reputational harm could result in a loss of AUM and revenues. • If our techniques for managing risk are ineffective, we may be exposed to material unanticipated losses. • Certain of our strategies invest principally in the securities of non‑U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. • The expansion of our business outside of the United States raises tax and regulatory risks, may adversely affect our profit margins and places additional demands on our resources and employees. • Failure to properly address conflicts of interest could harm our reputation, business and results of operations. • Our contractual obligations may subject us to indemnification obligations to third parties. • Insurance may not be available on a cost-effective basis to protect us from liability. • Failure to protect our intellectual property may negatively impact our business. • Climate change may adversely affect our office locations. 21 Table of Contents Market and Investment Performance Risks We earn substantially all of our revenues based on AUM, and any reduction in AUM would reduce our revenues and profitability.
General Risks • Reputational harm could result in a loss of AUM and revenues. • If our techniques for managing risk are ineffective, we may be exposed to material unanticipated losses. • Certain of our strategies invest principally in the securities of non‑U.S. companies, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks. • The expansion of our business outside of the United States raises tax and regulatory risks, may adversely affect our profit margins and places additional demands on our resources and employees. • Failure to properly address conflicts of interest could harm our reputation, business and results of operations. • Our contractual obligations may subject us to indemnification obligations to third parties. • Insurance may not be available on a cost-effective basis to protect us from liability. • Failure to protect our intellectual property may negatively impact our business. • Climate change may adversely affect our office locations.
Non‑U.S. legal and regulatory environments, including financial accounting standards and practices, may also be different, and there may be less publicly available information about such companies.
Non‑U.S. legal and regulatory environments, including financial accounting standards and practices, may also be different, and there may be less publicly available information 44 Table of Contents about such companies.
Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, tariffs, commodity prices, currency exchange rates and controls and national and international political circumstances such as the increased tension between the U.S. and China (including wars (such as the military conflict between Russia and Ukraine and the conflict in Israel), pandemics, terrorist acts and security operations) and other conditions may impact the equity and credit markets, which may influence our AUM.
Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, tariffs, commodity prices, currency exchange rates and controls and national and international political circumstances such as the increased tension between the U.S. and China (including wars (such as the military conflict between Russia and Ukraine and the conflict in the Middle East, military conflicts and potential conflicts in Venezuela and China/Taiwan), pandemics, 23 Table of Contents terrorist acts and security operations) and other conditions may impact the equity and credit markets, which may influence our AUM.
Generally, a company is an “investment company” required to register under the 1940 Act if, absent an applicable exception or exemption, it (i) is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or (ii) engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
Generally, a company is an “investment company” required to register under the 1940 Act if, absent an applicable exception or exemption, it (i) is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or (ii) engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. 30 Table of Contents We hold ourselves out as an investment management firm and do not propose to engage primarily in the business of investing, reinvesting or trading in securities.
The integrity of our brands and reputation is critical to our ability to attract and retain clients, business partners and employees and maintain relationships with consultants. We operate within the highly regulated financial services industry and various potential scenarios could result in harm to our reputation.
General Risks Reputational harm could result in a loss of AUM and revenues. The integrity of our brands and reputation is critical to our ability to attract and retain clients, business partners and employees and maintain relationships with consultants. We operate within the highly regulated financial services industry and various potential scenarios could result in harm to our reputation.
If market events lead to incidences where ETFs trade at prices that deviate significantly from an ETF’s net asset value, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and redeem their holdings, which may cause our AUM, revenue and earnings to decline. 44 Table of Contents General Risks Reputational harm could result in a loss of AUM and revenues.
If market events lead to incidences where ETFs trade at prices that deviate significantly from an ETF’s net asset value, 43 Table of Contents or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETF products and redeem their holdings, which may cause our AUM, revenue and earnings to decline.
The fair value of these liabilities is assessed on a quarterly basis and changes in assumptions used to determine the amount of the liability could lead to an adjustment that may have a material impact, favorable or unfavorable, on our results of operations.
The fair value of these liabilities is assessed on a quarterly basis and changes in assumptions used to determine the amount of the liability could lead to an adjustment that may have a material impact, favorable or unfavorable, on our results of operations. 31 Table of Contents Indebtedness Risks Our substantial indebtedness may expose us to material risks.
Continued geopolitical uncertainty such as the ongoing conflicts in Ukraine and Israel and tension between the U.S., China, North Korea, Iran and Russia has, and will likely continue to, negatively impact the global economy.
Continued geopolitical uncertainty such as the ongoing conflicts in Ukraine, Venezuela, and the Middle East and tension between (i) the U.S., China, North Korea, Iran and Russia and (ii) China/Taiwan has, and will likely continue to, negatively impact the global economy.
Operational and Cybersecurity Risks • Operational risks may disrupt our business, result in losses or limit our growth. • Failure to implement effective information and cyber security policies, procedures and capabilities could disrupt operations and cause financial losses. • Disruption to the operations of third parties whose functions are integral to our ETF platform may adversely affect the prices at which VictoryShares trade, particularly during periods of market volatility.
Operational and Cybersecurity Risks • Operational risks may disrupt our business, result in losses or limit our growth. 22 Table of Contents • Failure to implement effective information and cyber security policies, procedures and capabilities could disrupt operations and cause financial losses. • Our use of Artificial Intelligence technologies may not be successful and may present business, compliance and reputational risks. • Disruption to the operations of third parties whose functions are integral to our ETF platform may adversely affect the prices at which VictoryShares trade, particularly during periods of market volatility.
Future sales of shares by shareholders could cause our stock price to decline. Sales of substantial amounts of our Common Stock in the public market, or the perception that these sales could occur, could cause the market price of our Common Stock to decline. As of February 19, 2025, 63,661,988 shares of our Common Stock are outstanding.
Future sales of shares by shareholders could cause our stock price to decline. Sales of substantial amounts of our Common Stock in the public market, or the perception that these sales could occur, could cause the market price of our Common Stock to decline. As of February 19, 2026, 64,049,636 shares of our Common Stock are outstanding.
Continued geopolitical uncertainty such as the ongoing conflicts in Ukraine and Israel and tension between the U.S. and China, North Korea, Iran and Russia has created significant volatility, uncertainty and economic disruption.
Continued geopolitical uncertainty such as the ongoing conflicts in Ukraine, Venezuela and the Middle East and tension between (i) the U.S. and China, North Korea, Iran and Russia and (ii) China/Taiwan has created significant volatility, uncertainty and economic disruption.
We may decline to manage assets from potential clients who demand lower fees even though such assets would increase our revenue and AUM in the short term.
We may decline to manage assets from potential clients who demand lower fees even though such assets would increase our revenue and AUM in the short term. The investment management industry is intensely competitive and is consolidating.
If we believed that the circumstances did not justify a reimbursement, or clients and investors believed the reimbursement we offered was insufficient, they could seek to recover damages from us or could withdraw assets from our management or terminate their investment advisory agreement with us. Any of these events could harm our reputation and materially adversely affect our business.
If we believed that the circumstances did not justify a reimbursement, or clients and investors believed the reimbursement we offered was insufficient, they could seek to recover damages from us or could withdraw assets from our management or terminate their investment advisory agreement with us.
Material risks that may adversely affect our business, financial condition or results of operations include, but are not limited to, the following: Market and Investment Performance Risks • We earn substantially all of our revenues based on AUM, and any reduction in AUM would reduce our revenues and profitability. • The ongoing conflicts in Ukraine and Israel have, and will likely continue to, negatively impact the global economy. • We are exposed to risks arising from our International Activities. • If our strategies perform poorly, clients could redeem their assets and we could suffer a decline in our AUM, which would reduce our earnings. • The historical returns of our strategies may not be indicative of their future results or of the strategies we may develop in the future. • We may support our money market funds to maintain their stable net asset values, or other products we manage, which could affect our revenues or operating results . • The performance of our strategies or the growth of our AUM may be constrained by unavailability of appropriate investment opportunities.
Material risks that may adversely affect our business, financial condition or results of operations include, but are not limited to, the following: Market and Investment Performance Risks • We earn substantially all of our revenues based on AUM, and any reduction in AUM would reduce our revenues and profitability. 20 Table of Contents • The ongoing conflicts and potential military conflicts in Ukraine, Venezuela, China/Taiwan and/or the Middle East have, and will likely continue to, negatively impact the global economy. • We are exposed to risks arising from our International Activities. • If our strategies perform poorly, clients could redeem their assets and we could suffer a decline in our AUM, which would reduce our earnings. • The historical returns of our strategies may not be indicative of their future results or of the strategies we may develop in the future. • The performance of our strategies or the growth of our AUM may be constrained by unavailability of appropriate investment opportunities.
In recent years, across the investment management industry, passive products have experienced inflows and traditional actively managed products have experienced outflows, in each case, in the aggregate.
In recent years, across the investment management industry, passive products have experienced inflows and traditional actively managed products have experienced outflows, in each case, in the aggregate and our strategies are generally considered active.
However, appropriately dealing with conflicts of interest is complex and difficult and if we fail, or appear to fail, to deal appropriately with conflicts of interest, we could face reputational damage, litigation or regulatory proceedings or penalties, any of which may adversely affect our revenues or net income.
However, appropriately dealing with conflicts of interest is complex and difficult and if we fail, or appear to fail, to deal appropriately with conflicts of interest, we could face reputational damage, litigation or regulatory proceedings or penalties, any of which may adversely affect our revenues or net income. 45 Table of Contents Our contractual obligations may subject us to indemnification obligations to third parties.
Our contractual obligations may subject us to indemnification obligations to third parties. 46 Table of Contents In the ordinary course of business, we enter into contracts with third parties, including, without limitation, clients, vendors, and other service providers, that contain a variety of representations and warranties and that provide for indemnifications by us in certain circumstances.
In the ordinary course of business, we enter into contracts with third parties, including, without limitation, clients, vendors, and other service providers, that contain a variety of representations and warranties and that provide for indemnifications by us in certain circumstances.
Our total client assets has increased from $17.9 billion following our 2013 management‑led buyout with Crestview GP from KeyCorp to $176.1 billion as of December 31, 2024, primarily as a result of acquisitions. The absolute measure of our AUM represents a significant rate of growth that may be difficult to sustain.
Our total client assets have increased from $17.9 billion following our 2013 management‑led buyout from KeyCorp to $316.6 billion as of December 31, 2025, primarily as a result of acquisitions. The absolute measure of our AUM represents a significant rate of growth that may be difficult to sustain.
Operational and Cybersecurity Risks Operational risks may disrupt our business, result in losses or limit our growth. 42 Table of Contents We are heavily dependent on the capacity and reliability of the communications, information and technology systems supporting our operations, whether developed, owned and operated by us or by third parties.
Operational and Cybersecurity Risks Operational risks may disrupt our business, result in losses or limit our growth. We are heavily dependent on the capacity and reliability of the communications, information and technology systems supporting our operations, whether developed, owned and operated by us or by third parties. We also rely on manual workflows and a variety of manual user controls.
AUM fluctuates based on many factors, including investment performance, client withdrawals and difficult market conditions. We earn substantially all of our revenues from asset‑based fees from investment management products and services to individuals and institutions. Therefore, if our AUM declines, our fee revenue will decline, which will reduce our profitability as certain of our expenses are fixed.
We earn substantially all of our revenues from asset‑based fees from investment management products and services to individuals and institutions. Therefore, if our AUM declines, our fee revenue will decline, which will reduce our profitability as certain of our expenses are fixed.
Investment management firms are subject to extensive regulation in the United States, primarily at the federal level, including regulation by the SEC under the 1940 Act and the Advisers Act, by the U.S.
Legal and Regulatory Risks As an investment management and brokerage firm, we are subject to extensive U.S. and non-U.S. regulation. Investment management firms are subject to extensive regulation in the United States, primarily at the federal level, including regulation by the SEC under the 1940 Act and the Advisers Act, by the U.S.
Future offerings of debt or equity securities may rank senior to our Common Stock. If we decide to issue debt securities in the future, which would rank senior to shares of our common stock, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility.
If we decide to issue debt securities, which would rank senior to shares of our common stock, it is likely that they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. We and, indirectly, our shareholders will bear the cost of issuing and servicing such securities.
A number of factors, including the following, serve to increase our competitive risks: • a number of our competitors have greater financial, technical, marketing and other resources, more comprehensive name recognition and more personnel than we do; • potential competitors have a relatively low cost of entering the investment management industry; • certain investors may prefer to invest with an investment manager that is not publicly traded based on the perception that a publicly traded asset manager may focus on the manager’s own growth to the detriment of investment performance for clients; • other industry participants, hedge funds and alternative asset managers may seek to recruit our investment professionals; and • certain competitors charge lower fees for their investment management services than we do.
A number of factors, including the following, serve to increase our competitive risks: • the consolidation of financial services firms through mergers and acquisitions; • a number of our competitors have greater financial, technical, marketing and other resources, more comprehensive name recognition and more personnel than we do; • potential competitors have a relatively low cost of entering the investment management industry; • certain investors may prefer to invest with an investment manager that is not publicly traded based on the perception that a publicly traded asset manager may focus on the manager’s own growth to the detriment of investment performance for clients; • other industry participants, hedge funds and alternative asset managers may seek to recruit our investment professionals; • certain competitors charge lower fees for their investment management services than we do; and • as competitors grow through consolidation their increased size and scale increases competitive pressures on fees and distribution relationships. 39 Table of Contents Additionally, intermediaries through which we distribute our funds may also sell their own proprietary funds and investment products, which could limit the distribution of our strategies.
We electronically receive, process, store and transmit sensitive information of our clients including personal data, such as, without limitation, names, addresses, social security numbers, and driver's license numbers, which may be necessary to support our clients’ investment transactions.
Failure to implement effective information and cyber security policies, procedures and capabilities could disrupt operations and cause financial losses. We electronically receive, process, store and transmit sensitive information of our clients including personal data, such as, without limitation, names, addresses, social security numbers, and driver's license numbers, which may be necessary to support our clients’ investment transactions.
These risks could adversely affect the performance of our strategies that are invested in securities of non‑U.S. issuers and may be particularly acute in the emerging or less developed markets in 45 Table of Contents which we invest.
These risks could adversely affect the performance of our strategies that are invested in securities of non‑U.S. issuers and may be particularly acute in the emerging or less developed markets in which we invest. In addition to our Trivalent Franchise, certain of our other Franchises and Solutions Platform invest in emerging or less developed markets.
In addition, we could have penalties imposed on us, be required to pay fines or be subject to private litigation, any of which could decrease our future income or negatively affect our current business or our future growth prospects.
In addition, we could have penalties imposed on us, be required to pay fines or be subject to private litigation, any of which could decrease our future income or negatively affect our current business or our future growth prospects. Potential impairment of goodwill and intangible assets could result in not realizing the value of these assets.
The value of these assets may not be realized for a variety of reasons, including, but not limited to, significant redemptions, loss of clients, damage to brand name and unfavorable economic conditions.
As of December 31, 2025, our goodwill and intangible assets totaled $3.7 billion. The value of these assets may not be realized for a variety of reasons, including, but not limited to, significant redemptions, loss of clients, damage to brand name and unfavorable economic conditions.
Industry Risks • Recent trends in the investment management industry could reduce our AUM, revenues and net income . • The investment management industry is intensely competitive. • Failure to address the increased transformative pressures affecting the asset management industry could negatively impact our business.
Industry Risks • Recent trends in the investment management industry could reduce our AUM, revenues and net income, such as increased demand for passive management, low fee products or alternative asset classes . • The investment management industry is intensely competitive and is consolidating. • Failure to address the increased transformative pressures affecting the asset management industry could negatively impact our business.
We will depend on the Amundi parties to distribute Victory products outside the United States and create investment vehicles to provide investment management services with respect to any US active asset management products Under the Distribution Agreements, (1) the Amundi Parties will have the exclusive right, subject to certain exceptions, to distribute Victory’s products outside of the United States; (2) Victory will have the exclusive right, subject to certain exceptions, to provide investment management services with respect to any US active asset management products to the Amundi Parties for distribution outside the United States; (3) Victory will have the exclusive right, subject to certain exceptions, to distribute the Amundi Parties’ products in the United States; and (4) the Amundi Parties will have the exclusive right, subject to certain exceptions, to provide investment advisory or investment management services with respect to any non-US active asset management products to Victory for distribution in the United States.
Under the Distribution Agreements, (1) Amundi has the exclusive right, subject to certain exceptions, to distribute Victory’s products outside of the United States; (2) Victory has the exclusive right, subject to certain 40 Table of Contents exceptions, to provide investment management services with respect to any traditional U.S. active asset management products to the Amundi Parties for distribution outside the United States; (3) Victory has the exclusive right, subject to certain exceptions, to distribute Amundi products in the United States; and (4) Amundi has the exclusive right, subject to certain exceptions, to provide investment advisory or investment management services with respect to any non-U.S. active asset management products to Victory for distribution in the United States.
This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits. Legal and Regulatory Risks As an investment management and brokerage firm, we are subject to extensive regulation.
This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits.
We and, indirectly, our shareholders will bear the cost of issuing and servicing such securities. We may also issue preferred equity, which will have superior rights relative to our common stock, including with respect to voting and liquidation.
We may also issue preferred equity, which will have superior rights relative to our common stock, including with respect to voting and liquidation.
The investment performance we achieve for our clients varies over time and the variance can be wide. The ratings and rankings we or the mutual funds, ETFs and other pooled investment vehicles that we advise have received are typically 23 Table of Contents revised monthly.
The investment performance we achieve for our clients varies over time and the variance can be wide. The ratings and rankings we or the mutual funds, ETFs and other pooled investment vehicles that we advise have received are typically revised monthly. Our strategies’ returns have benefited during some periods from investment opportunities and positive economic and market conditions.
The amendments require more frequent reporting of 38 Table of Contents monthly portfolio holdings and related information to the Commission and the public, amend certain reporting requirements, and require open-end funds to report information about service providers used to comply with liquidity risk management program requirements.
The amendments require more frequent reporting of monthly portfolio holdings and related information to the Commission and the public, amend certain reporting requirements, and require open-end funds to report information about service providers used to comply with liquidity risk management program requirements. This rule, as adopted, has created additional operational complexities and has increased our administrative burden and costs.
Moreover, being subject to regulation in multiple jurisdictions may increase the cost, complexity and time required for engaging in transactions that require regulatory approval. Accordingly, we face the risk of significant intervention by regulatory authorities, including extended investigation and surveillance activity, adoption of costly or restrictive new regulations and judicial or administrative proceedings that may result in substantial penalties.
Accordingly, we face the risk of significant intervention by regulatory authorities, including extended investigation and surveillance activity, adoption of costly or restrictive new regulations and judicial or administrative proceedings that may result in substantial penalties.
We may also suffer losses due to employee negligence, fraud or misconduct. Non‑compliance with policies, employee misconduct, negligence or fraud could result in legal liability, regulatory sanctions and serious reputational or financial harm. It is not always possible to deter or detect employee misconduct and the precautions we take to prevent and detect this activity may not always be effective.
We may also suffer losses due to employee negligence, fraud or misconduct. Non‑compliance with policies, employee misconduct, negligence or fraud could result in legal liability, regulatory sanctions and serious reputational or financial harm.
These negative conditions may occur again, and in the future, we may not be able to identify and invest in profitable investment opportunities within our current or future strategies. New strategies that we launch or acquire in the future may present new and different investment, regulatory, operational, distribution and other risks than those presented by our current strategies.
New strategies that we launch or acquire in the future may present new and different investment, regulatory, operational, distribution and other risks than those presented by our current strategies.
Legal and Regulatory Risks • As an investment management firm and brokerage firm, we are subject to extensive regulation. • The regulatory environment in which we operate is subject to continual change and regulatory developments designed to increase oversight and may materially adversely affect our business.
Legal and Regulatory Risks • As an investment management firm and brokerage firm, we are subject to extensive U.S. and non-U.S. regulation. • Regulatory and governmental examinations and/or investigations, litigation and the legal risks associated with our business, could adversely impact our AUM, increase costs and negatively impact our profitability and/or our future financial results. • The regulatory environment in which we operate is subject to continual change and regulatory developments designed to increase oversight and may materially adversely affect our business.
If an assignment were to occur, we cannot be certain that we would be able to obtain the necessary approvals from the boards and shareholders of the registered funds we advise or the necessary consents from our separate account or pooled investment vehicle clients. 28 Table of Contents If an assignment of an investment advisory agreement is deemed to occur, and our clients do not consent to the assignment or enter into a new agreement, our results of operations could be materially and adversely affected.
If an assignment were to occur, we cannot be certain that we would be able to obtain the necessary approvals from the boards and shareholders of the registered funds we advise or the necessary consents from our separate account or pooled investment vehicle clients.
Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, operating results and stock price. Section 404 of the Sarbanes-Oxley Act and related SEC rules require that we perform an annual management assessment of the design and effectiveness of our internal control over financial reporting.
Section 404 of the Sarbanes-Oxley Act and related SEC rules require that we perform an annual management assessment of the design and effectiveness of our internal control over financial reporting.
Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, our business, financial condition, and results of operations may be adversely affected.
If the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, unreliable, misleading, biased, discriminatory or otherwise flawed, any of which may not be easily detectable, our business and reputation may be adversely affected.
In the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition or employee arrangement, or in certain other circumstances. Any of these issuances could result in substantial dilution to our existing shareholders and could cause the trading price of our Common Stock to decline.
Future offerings of debt or equity securities may dilute or rank senior to our Common Stock. In the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition or employee arrangement, or in certain other circumstances.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe ISC is chaired by our Chief Information Security Officer (“CISO”) and membership includes executive and management level representation from our technology, legal, and compliance departments. 47 Table of Contents Our cybersecurity program assesses our cybersecurity risk profile through inventories of physical devices, software, and information systems, evaluations of critical third-party systems, and a catalog of security risks.
Biggest changeOur cybersecurity program assesses our cybersecurity risk profile through inventories of physical devices, software, and information systems, evaluations of critical third-party systems, and a catalog of security risks. Periodic assessments are conducted to ensure the risk catalog is up to date. We protect our information systems, data, and network through technical and procedural controls and security awareness training.
The Enterprise Risk Committee and the Vendor Oversight Committee report their activities to the Audit Committee at least annually. The third-party security operations center, the endpoint managed detection and response service, and third-party penetration testing vendors are overseen by the CISO.
The Enterprise Risk Committee and the Vendor Oversight Committee report their activities to the Audit Committee at least annually. The third-party security operations center, the managed endpoint detection and response service, and third-party penetration testing vendors are overseen by the CISO.
Additional review and oversight is provided by the Enterprise Risk Committee where cybersecurity risk is vetted against other risk categories. Management also maintains a Vendor Oversight Committee which governs the use of third-party vendors and assesses cybersecurity risk related to those vendors.
Additional review and oversight are provided by the Enterprise Risk Committee where cybersecurity risk is vetted against other risk categories. Management also maintains a Vendor Oversight Committee which governs the use of third-party vendors and assesses cybersecurity risk related to those vendors.
The IRP is designed to provide guidance for effective, efficient, and orderly response to a variety of cybersecurity incidents. The ISC is responsible for communication escalation as necessary up to and including to the Board of Directors. The IRP is periodically exercised through tabletop exercises. 48 Table of Contents
The IRP is designed to provide guidance for effective, efficient, and orderly response to a variety of cybersecurity incidents. The ISC is responsible for communication escalation as necessary up to and including to the Board of Directors. The IRP is periodically exercised through tabletop exercises. 47 Table of Contents
The ISC provides a report on our cybersecurity program to our Board at least annually. Other key functions of the ISC are to align the overall security strategy with business objectives and to oversee the cataloging of cybersecurity risks and assessments.
The Audit Committee of the Board of Directors oversees our enterprise risk management, which includes cybersecurity. The ISC provides a report on our cybersecurity program to our Board at least annually. Other key functions of the ISC are to align the overall security strategy with business objectives and to oversee the cataloging of cybersecurity risks and assessments.
Our CISO has been with the firm since 2013 and has over 20 years of IT experience in various industries. He is a Certified Chief Information Security Officer from the Carnegie Mellon University executive education program, as well as a Certified Information Security Manager (CISM) and Certified Information Systems Security Professional (CISSP).
He is a Certified Chief Information Security Officer from the Carnegie Mellon University executive education program, as well as a Certified Information Security Manager (CISM) and Certified Information Systems Security Professional (CISSP). Our EVP joined the firm in 2025 with over 27 years of industry and leadership experience. Both the EVP and CISO serve on the ISC.
Security awareness training is mandatory for all employees and conducted at time of hire and periodically thereafter. The security awareness training program is designed to ensure employees are prepared to identify and avoid cyber risks and may cover topics such as phishing, ransomware, social engineering, public Wi-Fi risks, password security, and mobile device security.
The security awareness training program is designed to ensure employees are prepared to identify and avoid cyber risks and may cover topics such as phishing, ransomware, social engineering, public Wi-Fi risks, password security, and mobile device security. Training is supplemented by testing initiatives, including periodic phishing tests, which may result in targeted or remedial training.
Training is supplemented by testing initiatives, including periodic phishing tests, which may result in targeted or remedial training. We use a third-party security operations center and endpoint management and response service to continuously monitor information systems for emergent events including anomalous, suspicious, and unauthorized network activity. Detected events are immediately triaged and evaluated for threat potential and impact.
We use a third-party security operations center and managed endpoint detection and response service to continuously monitor information systems for emergent events including anomalous, suspicious, and unauthorized network activity. Detected events are immediately triaged and evaluated for threat potential and impact. We also engage third-party providers to perform penetration testing designed to identify vulnerabilities for remediation.
We also engage third-party providers to perform penetration testing designed to identify vulnerabilities for remediation. We rotate penetration testing providers to diversify testing approaches. No known cybersecurity threats or incidents have materially affected, or are likely to materially affect, our business strategy, results of operations, or financial condition.
We rotate penetration testing providers to diversify testing approaches. No known cybersecurity threats or incidents have materially affected, or are likely to materially affect, our business strategy, results of operations, or financial condition. While we maintain robust prevention and detection measures, we cannot eliminate all cybersecurity risks or guarantee absence of undetected incidents.
Periodic assessments are conducted to ensure the risk catalog is up to date. We protect our information systems, data, and network through technical and procedural controls and security awareness training. We deploy multiple technical controls to achieve a layered security strategy including systems access controls, firewalls, web application gateways, antivirus software, e-mail filtering, and endpoint protection.
We deploy multiple technical controls to achieve a layered security strategy including systems access controls, firewalls, web application gateways, antivirus software, e-mail filtering, and endpoint protection. Security awareness training is mandatory for all employees and conducted at time of hire and periodically thereafter.
The program is modeled upon the National Institute of Standards and Technology Cybersecurity Framework, a well-established and widely adopted framework in the financial services industry.
The program is modeled upon the National Institute of Standards and Technology Cybersecurity Framework, a well-established and widely adopted framework in the financial services industry. 46 Table of Contents The ISC is chaired by our Chief Information Security Officer (“CISO”) and membership includes executive and management level representation from our technology, legal, and compliance departments.
While we maintain robust prevention and detection measures, we cannot eliminate all cybersecurity risks or guarantee absence of undetected incidents. For further details on cybersecurity risks, see "Item 1A. Risk Factors" in this Form 10-K. Governance Role of the Board of Directors and Management Our CISO and Chief Technology Officer (“CTO”) oversee the day-to-day technology and security activities.
For further details on cybersecurity risks, see "Item 1A. Risk Factors" in this Form 10-K. Governance Role of the Board of Directors and Management Our Executive Vice President ("EVP") and CISO oversee security architecture, engineering and operations . Our CISO has been with the firm since 2013 and has over 20 years of IT experience in various industries.
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Our CTO joined the firm in 2020 with 30 years of IT experience, including over 20 years of executive level technology experience in the asset management industry. Both the CISO and CTO serve on the ISC. The Audit Committee of the Board of Directors oversees our enterprise risk management, which includes cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties. The Company leases its principal executive offices, which are located in San Antonio, TX. In the United States, the Company also leases office space in Brooklyn, OH; Birmingham, MI; Boston, MA; Rocky River, OH; Cincinnati, OH; Charlotte, NC; Denver, CO; Clive, IA; Hanover, NH; New York, NY; Norwalk, CT; and San Francisco, CA.
Biggest changeItem 2. Pr operties. The Company leases its principal executive offices, which are located in San Antonio, TX. In the United States, the Company also leases office space in Brooklyn, OH; Birmingham, MI; Boston, MA; Rocky River, OH; Cincinnati, OH; Charlotte, NC; Durham, NC; Miami, FL; Denver, CO; Clive, IA; Hanover, NH; Bozeman, MT; and San Francisco, CA.
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Outside the United States, the Company leases office space in Singapore. The Company believes its existing facilities are adequate to meet its current and future business requirements.
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The Company believes its existing facilities are adequate to meet its current and future business requirements. Item 3. Legal Proceedings. From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently a party to any material legal proceedings. Item 4. Mine Saf ety Disclosures.
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Not applicable 48 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 49 PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 50 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Qualitative and Quantitative Disclosures Regarding Market Risk 74 Item 8. Financial Statements and Supplementary Data 76
Biggest changeItem 4. Mine Safety Disclosures 48 PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 51 Item 7A. Qualitative and Quantitative Disclosures Regarding Market Risk 68 Item 8. Financial Statements and Supplementary Data 70

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Shares of Common Stock Average Price Paid Per Share of Common Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans Approximate Dollar Value That May Yet Be Purchased Under Outstanding Plans or Programs Period Purchased Stock or Programs (in millions) (1) October 1-31, 2024 — $ — — $ 95.2 November 1-30, 2024 1,128,240 67.92 1,128,240 19.0 December 1-31, 2024 275,061 69.79 275,061 200.0 Total 1,403,301 $ 68.29 1,403,301 (1) Six share repurchase programs were authorized from 2018 to 2021, each for $15.0 million of the Company’s Common Stock, that were completed in September 2019, June 2020, October 2020, May 2021, January 2022 and May 2022.
Biggest changeTotal Number of Shares of Common Stock Average Price Paid Per Share of Common Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans Approximate Dollar Value That May Yet Be Purchased Under Outstanding Plans or Programs Period Purchased (1) Stock or Programs (2) (in millions) (2) October 1, 2025 to October 31, 2025 61 $ 63.43 — $ 355.1 November 1, 2025 to November 30, 2025 723,799 63.06 716,590 310.2 December 1, 2025 to December 31, 2025 90,347 63.34 86,780 304.7 Total 814,207 $ 63.09 803,370 (1) Includes shares surrendered for taxes related to stock option exercises and vesting of restricted stock awards .
In December 2024, the Company’s Board of Directors approved a new share repurchase program (the “2025 Share Repurchase Program”) authorizing the repurchase of up to $200.0 million of the Company’s Common Stock through December 31, 2026.
(2) In December 2024, the Company’s Board of Directors approved a new share repurchase program (the “2025 Share Repurchase Program”) authorizing the repurchase of up to $200.0 million of the Company’s Common Stock through December 31, 2026.
The graph assumes that $100 was invested at the market close on December 31, 2019 in our common stock, the S&P 500 Index and the peer group and assumes reinvestment of any dividends.
The graph assumes that $100 was invested at the market close on December 31, 2020 in our common stock, the S&P 500 Index and the peer group and assumes reinvestment of any dividends.
Performance Graph The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total return of our Common Stock, the Standard & Poor’s 500 Stock Index (S&P 500 Index) and a peer group comprised of Affiliated Managers Group, Inc., Artisan Partners Asset Management Inc., Acadian Asset Management, and Virtus Investment Partners, Inc.
Performance Graph The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total return of our Common Stock, the Standard & Poor’s 500 Stock Index (S&P 500 Index) and a peer group comprised of Affiliated Managers Group, Inc., Artisan Partners Asset Management Inc., Acadian Asset Management, and Virtus Investment Partners, Inc.
Item 5. Market for Registrant’s Common Equity, Related Shar eholder Matters and Issuer Purchases of Equity Securities. Shares of the Company’s Common Stock are listed and trade on NASDAQ under the symbol “VCTR”. As of December 31, 2024, there were approximately 41,000 beneficial shareholders of the Company’s Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Shar eholder Matters and Issuer Purchases of Equity Securities Shares of the Company’s Common Stock are listed and trade on NASDAQ under the symbol “VCTR”. As of December 31, 2025, there were approximately 54,000 beneficial shareholders of the Company’s Common Stock.
The stock price performance of the following graph is not necessarily indicative of future stock price performance. 50 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers. The following table sets out information regarding purchases of equity securities by the Company for the three months ended December 31, 2024.
The stock price performance of the following graph is not necessarily indicative of future stock price performance. 49 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets out information regarding purchases of equity securities by the Company for the three months ended December 31, 2025.
Under the 2025 Share Repurchase Program, which took effect in December 2024, the Company may purchase its shares from time to time in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.
Under the 2025 Share Repurchase Program, the Company may purchase its shares from time to time in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.
Potential increases to the Company’s cash dividend rate will be assessed annually. 52 Table of Contents
Potential increases to the Company’s cash dividend rate will be assessed annually. 50 Table of Contents
During 2023, the Company’s Board declared $1.28 of cash dividends per share, an increase of $0.28, or 28%, from the $1.00 per share of cash dividends declared in 2022. During 2024, the Company’s Board declared $1.56 of cash dividends per share, an increase of $0.28, or 22%, from the $1.28 per share of cash dividends declared in 2023.
During 2025, the Company’s Board paid $1.94 of cash dividends per share, an increase of $0.38, or 24%, from the $1.56 per share of cash dividends declared in 2024.
Each year, since the commencement of cash dividends in 2019, the Company has increased the per-share amount of the quarterly cash dividends distributed to shareholders. During 2022, the Company’s Board declared $1.00 of cash dividends per share, an increase of $0.47, or 89%, from the $0.53 per share of cash dividends declared in 2021.
Dividend Policy In 2019, the Company announced the initiation of cash dividends and paid its first quarterly dividend to shareholders in September of that year. Each year, since the commencement of cash dividends in 2019, the Company has increased the per-share amount of the quarterly cash dividends distributed to shareholders.
In March 2023, the Company’s Board of Directors approved a new share repurchase program (the “2023 Share Repurchase Program”) authorizing the repurchase of up to $100.0 million of the Company’s Common Stock through December 31, 2025. The 2023 Share Repurchase Program was completed in December 2023.
On August 7, 2025, the Board authorized an increase in the 2025 Share Repurchase Program from $200.0 million to up to $500.0 million through December 31, 2027.
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In May 2022, the Company’s’ Board of Directors approved a new share repurchase program (the “2022 Share Repurchase Program”) authorizing the repurchase of up to $100.0 million of the Company’s Common Stock. The 2022 Share Repurchase Program was completed in March 2023.
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During the quarter ended December 31, 2025, the Company adopted a Rule 10b5-1 trading plan intended to facilitate repurchases of its common stock under its previously authorized 2025 Share Repurchase Program.
Removed
In December 2023, the Company’s Board of Directors approved a new share repurchase program (the “2024 Share Repurchase Program”) authorizing the repurchase of up to $100.0 million of the Company’s Common Stock through December 31, 2025. The 2024 Share Repurchase Program was completed in December 2024.
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Recent Sales of Unregistered Securities The information required by Regulation S-K Item 701 regarding the Company's issuance of unregistered equity securities is incorporated herein by reference to the Company's Current Report on Form 8-K filed on April 3, 2025 under Item 3.02 and Note 4 to the Consolidated Financial Statements.
Removed
In 2024, the Company repurchased 1.4 million shares of Common Stock at a total cost of $95.8 million, which included $0.6 million in excise taxes payable on share repurchases, for an average price of $68.29 per share.
Removed
In 2023, the Company repurchased 4.2 million shares of Common Stock at a total cost of $134.5 million, which included $1.0 million in excise taxes payable on share repurchases, for an average price of $32.33 per share.
Removed
In 2022, 3.0 million shares of Common Stock were repurchased under programs authorized by the Company’s Board of Directors at a total cost of $87.3 million for an average price of $28.76 per share.
Removed
As of December 31, 2024, $200.0 million was available for future repurchases under the 2025 Share Repurchase Program, and a cumulative total of 12.7 million shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $391.6 million for an average price of $30.91 per share. 51 Table of Contents Dividend Policy In 2019, the Company announced the initiation of cash dividends and paid its first quarterly dividend to shareholders in September of that year.
Removed
Holders of restricted stock awards on the Company’s Common Stock that are unvested at the time quarterly dividends are declared are entitled to be paid these dividends as and when the restricted stock vests.

Item 7. Management's Discussion & Analysis

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

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Biggest changeEquity Solutions Alternative Investments Total Long-term Money Market / Short-term Total AUM (1) Year Ended December 31, 2024 Beginning AUM $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 Gross client cash inflows 4,516 2,043 4,912 284 3,762 8,634 1,105 25,255 912 26,167 Gross client cash outflows (7,685 ) (4,195 ) (5,905 ) (1,540 ) (2,893 ) (8,509 ) (1,618 ) (32,345 ) (1,200 ) (33,545 ) Net client cash flows (3,169 ) (2,152 ) (993 ) (1,256 ) 869 125 (513 ) (7,090 ) (287 ) (7,377 ) Market appreciation / (depreciation) 3,189 1,035 924 2,873 1,570 8,290 47 17,929 172 18,100 Realizations and distributions — — — — — — (2 ) (2 ) — (2 ) Acquired & divested assets / Net transfers (40 ) (58 ) 116 (104 ) (115 ) (118 ) 17 (301 ) 188 (113 ) Ending AUM $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 Year Ended December 31, 2023 Beginning AUM $ 27,892 $ 15,103 $ 26,353 $ 10,973 $ 14,160 $ 46,317 $ 3,663 $ 144,460 $ 3,302 $ 147,762 Gross client cash inflows 5,090 2,741 4,024 284 2,581 6,337 1,593 22,651 853 23,504 Gross client cash outflows (5,536 ) (3,859 ) (6,129 ) (1,286 ) (2,304 ) (7,119 ) (2,002 ) (28,235 ) (1,245 ) (29,480 ) Net client cash flows (446 ) (1,117 ) (2,105 ) (1,002 ) 276 (781 ) (409 ) (5,584 ) (391 ) (5,976 ) Market appreciation / (depreciation) 3,153 1,978 1,595 2,809 2,431 8,804 270 21,039 149 21,188 Realizations and distributions — — — — — — (100 ) (100 ) — (100 ) Acquired & divested assets / Net transfers (2) 5 (4 ) (1,487 ) (145 ) (96 ) (43 ) 7 (1,763 ) 211 (1,552 ) Ending AUM $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 Year Ended December 31, 2022 Beginning AUM $ 30,578 $ 20,094 $ 35,154 $ 15,766 $ 16,050 $ 54,426 $ 2,548 $ 174,616 $ 3,100 $ 177,716 Gross client cash inflows 6,859 3,162 5,524 406 4,149 7,872 5,045 33,016 621 33,637 Gross client cash outflows (6,919 ) (5,214 ) (9,545 ) (1,498 ) (3,111 ) (5,871 ) (3,324 ) (35,481 ) (807 ) (36,289 ) Net client cash flows (60 ) (2,053 ) (4,020 ) (1,093 ) 1,038 2,001 1,721 (2,465 ) (187 ) (2,652 ) Market appreciation / (depreciation) (2,641 ) (2,965 ) (3,345 ) (3,328 ) (3,153 ) (10,218 ) (215 ) (25,864 ) 39 (25,826 ) Realizations and distributions — — — — — — (376 ) (376 ) — (376 ) Acquired & divested assets / Net transfers 14 27 (1,436 ) (372 ) 226 107 (16 ) (1,450 ) 350 (1,100 ) Ending AUM $ 27,892 $ 15,103 $ 26,353 $ 10,973 $ 14,160 $ 46,317 $ 3,663 $ 144,460 $ 3,302 $ 147,762 58 Table of Contents (1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
Biggest changeEquity Solutions Alternative Investments Total Long-term Money Market / Short-term Total AUM (1) Year Ended December 31, 2025 Beginning AUM $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 Gross client cash inflows 3,622 1,475 18,314 7,646 8,428 18,421 916 58,821 1,164 59,985 Gross client cash outflows (8,121 ) (4,994 ) (18,771 ) (12,137 ) (7,131 ) (10,925 ) (939 ) (63,019 ) (1,422 ) (64,441 ) Net client cash flows (4,500 ) (3,518 ) (458 ) (4,491 ) 1,297 7,496 (23 ) (4,198 ) (258 ) (4,456 ) Market appreciation / (depreciation) 1,737 353 3,506 12,367 6,836 12,677 119 37,595 146 37,742 Realizations and distributions — — (287 ) — — — (24 ) (311 ) — (311 ) Acquired & divested assets / Net transfers (2) 2,172 (440 ) 53,381 41,356 3,452 8,463 (15 ) 108,368 500 108,869 Ending AUM $ 29,993 $ 11,179 $ 80,544 $ 63,380 $ 30,680 $ 91,228 $ 3,038 $ 310,042 $ 3,733 $ 313,775 Year Ended December 31, 2024 Beginning AUM $ 30,604 $ 15,959 $ 24,355 $ 12,635 $ 16,772 $ 54,296 $ 3,431 $ 158,051 $ 3,271 $ 161,322 Gross client cash inflows 4,516 2,043 4,912 284 3,762 8,634 1,105 25,255 912 26,167 Gross client cash outflows (7,685 ) (4,195 ) (5,905 ) (1,540 ) (2,893 ) (8,509 ) (1,618 ) (32,345 ) (1,200 ) (33,545 ) Net client cash flows (3,169 ) (2,152 ) (993 ) (1,256 ) 869 125 (513 ) (7,090 ) (287 ) (7,377 ) Market appreciation / (depreciation) 3,189 1,035 924 2,873 1,570 8,290 47 17,929 172 18,100 Realizations and distributions — — — — — — (2 ) (2 ) — (2 ) Acquired & divested assets / Net transfers (40 ) (58 ) 116 (104 ) (115 ) (118 ) 17 (301 ) 188 (113 ) Ending AUM $ 30,584 $ 14,785 $ 24,402 $ 14,148 $ 19,095 $ 62,593 $ 2,980 $ 168,586 $ 3,344 $ 171,930 (1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in accordance with GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions that in certain circumstances affect amounts reported in the audited consolidated financial statements.
Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions that in certain circumstances affect amounts reported in the audited consolidated financial statements.
Our goal is to establish and maintain a client base that is diversified by Franchise and Solutions Platform, asset class, distribution channel and vehicle. Valuation of Assets Under Management The fair value of assets under management of the Victory Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes.
Our goal is to establish and maintain a client base that is diversified by Franchise and Solutions Platform, asset class, distribution channel, vehicle and geography. Valuation of Assets Under Management The fair value of assets under management of the Victory Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes.
Advertising and Marketing Costs In December 2022, the Company entered into a long-term partnership with Spurs Sports & Entertainment and executed naming rights and partnership agreements for the team’s new performance center. The agreements, which end in 2033, grant the Company exclusive naming rights, sponsorship, signage, advertising and other promotional rights and benefits for the new performance center.
Advertising and Marketing Costs In 2022, the Company entered into a long-term partnership with Spurs Sports & Entertainment and executed naming rights and partnership agreements for the team’s new performance center. The agreements, which end in 2033, grant the Company exclusive naming rights, sponsorship, signage, advertising and other promotional rights and benefits for the new performance center.
As of December 31, 2024, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.
As of December 31, 2025 and 2024, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant.
GAAP Expenses Our GAAP expenses principally consist of: (i) personnel compensation and benefits; (ii) distribution and other asset‑based expenses; (iii) general and administrative expenses; (iv) depreciation and amortization charges; and (v) acquisition‑related expenses comprising of changes in the fair value of contingent acquisition payments and restructuring and acquisition costs. 61 Table of Contents Personnel Compensation and Benefits – Personnel compensation and benefits is our most significant category of expense.
GAAP Expenses Our GAAP expenses principally consist of: (i) personnel compensation and benefits; (ii) distribution and other asset‑based expenses; (iii) general and administrative expenses; (iv) depreciation and amortization charges; and (v) acquisition‑related expenses comprising of changes in the fair value of contingent acquisition payments and restructuring and acquisition costs. 60 Table of Contents Personnel Compensation and Benefits – Personnel compensation and benefits is our most significant category of expense.
The objective of this section of the Annual Report on Form 10-K is to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition, results of operations, liquidity and cash flows for the year ended December 31, 2024.
The objective of this section of the Annual Report on Form 10-K is to provide a discussion and analysis, from management’s perspective, of the key performance indicators and material information necessary to assess our financial condition, results of operations, liquidity and cash flows for the year ended December 31, 2025.
(10) Represents the tax benefits associated with deductions allowed for intangibles and goodwill generated from acquisitions in which we received a step‑up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15‑year period.
(9) Represents the tax benefits associated with deductions allowed for intangibles and goodwill generated from acquisitions in which we received a step‑up in basis for tax purposes. Acquired intangible assets and goodwill may be amortized for tax purposes, generally over a 15‑year period.
The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service. For certain alternative investment vehicles, including the NEC funds, AUM represents limited partner capital commitments during the commitment period of the fund.
The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service. 54 Table of Contents For certain alternative investment vehicles, including the NEC funds, AUM represents limited partner capital commitments during the commitment period of the fund.
Our primary uses of cash include: (i) repayment of our debt obligations, (ii) funding of acquisitions, (iii) payment of contingent consideration for previous acquisitions, and (iv) working capital needs. Cash flows from operations also allow us to meet certain other cash uses such as quarterly cash dividends and 69 Table of Contents the repurchase of our Common Stock.
Our primary uses of cash include: (i) repayment of our debt obligations, (ii) funding of acquisitions, (iii) payment of contingent consideration for previous acquisitions, and (iv) working capital needs. Cash flows from operations also allow us to meet certain other cash uses such as quarterly cash dividends and the repurchase of our Common Stock.
In addition to historical information, this discussion and analysis contains forward‑looking statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from management’s expectations.
In addition to historical information, this discussion and analysis contain forward‑looking statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from management’s expectations.
Our retail sales team offers intermediary and retirement platform clients, including broker-dealers, retirement platforms and RIA networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.
Our retail sales team offers intermediary and retirement 51 Table of Contents platform clients, including broker-dealers, retirement platforms and RIA networks, mutual funds and ETFs as well as SMAs through wrap fee programs and access to our investment models through UMAs. Our direct investor business serves the investment needs of individual clients.
As of December 31, 2024, our Franchises and our Solutions Platform collectively managed a diversified set of 124 investment strategies for a wide range of institutional and retail clients and direct investors. Franchises – Our Franchises are largely operationally integrated but are separately branded and make investment decisions independently from one another within guidelines established by their respective investment mandates.
As of December 31, 2025, our Franchises and our Solutions Platform collectively managed a diversified set of 187 investment strategies for a wide range of institutional and retail clients and direct investors. Franchises – Our Franchises are largely operationally integrated but are separately branded and make investment decisions independently from one another within guidelines established by their respective investment mandates.
Fifth Amendment On June 7, 2024, the Company entered into the Fifth Amendment to the 2019 Credit Agreement, extending the maturity date of the $100.0 million senior secured first lien revolving facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50% per annum.
Fifth Amendment On June 7, 2024, the Company entered into the Fifth Amendment to the 2019 Credit Agreement (the "Fifth Amendment"), extending the maturity date of the $100.0 million Revolving Facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50% per annum.
The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform. Victory Capital provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with 11 autonomous Investment Franchises and a Solutions Platform.
The Company operates a next-generation business model combining boutique investment qualities with the benefits of an integrated, centralized operating and distribution platform. The Company provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors with multiple autonomous Investment Franchises and a Solutions Platform.
The revolving facility otherwise remains subject to substantially the same terms as those set forth in the 2019 Credit Agreement.
The Revolving Facility otherwise remained subject to substantially the same terms as those set forth in the 2019 Credit Agreement.
In preparing these financial statements, our estimates and judgements are based on historical experience, information from third-party valuation professionals and various other assumptions, giving due consideration to materiality. We 73 Table of Contents consider the accounting policy discussed below to be critical to the understanding of our consolidated financial statements.
In preparing these financial statements, our estimates and judgments are based on historical experience, information from third-party valuation professionals and various other assumptions, giving due consideration to materiality. We consider the accounting policy discussed below to be critical to the understanding of our consolidated financial statements.
Refer to “Supplemental Non‑GAAP Financial Information” for more information about how we calculate Adjusted Net Income and a reconciliation of net income to Adjusted Net Income. • GAAP earnings per diluted share was $4.38 for the year ended December 31, 2024 compared to $3.12 for the same period in 2023.
Refer to “Supplemental Non‑GAAP Financial Information” for more information about how we calculate Adjusted Net Income and a reconciliation of net income to Adjusted Net Income. • GAAP earnings per diluted share was $4.08 for the year ended December 31, 2025 compared to $4.38 for the same period in 2024.
Sales‑based compensation varies based on gross and net client cash flows and revenue earned on sales. (2) Share-based compensation typically vests over several years based on service and the achievement of specific business and financial targets.
Sales‑based compensation varies based on gross and net client cash flows and revenue earned on sales. (2) Share-based compensation typically vests over several years based on service and the achievement of specific business and financial targets. The value of share-based compensation is recognized as compensation expense over the vesting period.
For the years ended December 31, 2024 and 2023, the Company recorded an increases of $2.7 million and $14.5 million, respectively in contingent payment liabilities associated WestEnd Acquisition, which is included in consideration payable for acquisition of business in the Consolidated Balance Sheets.
For the years ended December 31, 2025 and 2024, the Company recorded an increase of $11.4 million and $2.7 million, respectively in contingent payment liabilities associated WestEnd Acquisition, which is included in consideration payable for acquisition of business in the Consolidated Balance Sheets.
The following table presents our liquidity position as of December 31, 2024 and 2023: December 31, December 31, (in thousands) 2024 2023 Cash and cash equivalents (1) $ 126,731 $ 123,547 Accounts and other receivables (2) 100,667 87,570 Undrawn commitment on revolving credit facility (3) 100,000 100,000 Accounts and other payables (4) (109,599 ) (111,933 ) (1) We manage our cash balances in order to fund our day-to-day operations and invest excess cash into money market funds and other short-term investments.
The following table presents our liquidity position as of December 31, 2025 and 2024: December 31, (in thousands) 2025 2024 Cash and cash equivalents (1) $ 163,690 $ 126,731 Accounts and other receivables (2) 181,141 100,667 Undrawn commitment on revolving credit facility (3) 100,000 100,000 Accounts and other payables (4) (158,742 ) (109,599 ) (1) We manage our cash balances in order to fund our day-to-day operations and invest excess cash into money market funds and other short-term investments.
Adjusted net income with tax benefit per diluted share was $5.36 and $4.51, respectively, for the years ended December 31, 2024 and 2023.
Adjusted net income with tax benefit per diluted share was $6.38 and $5.36, respectively, for the years ended December 31, 2025 and 2024.
Please refer to the sections of this report entitled “Forward‑Looking Statements” and “Risk Factors.” Overview Our Business – Victory is a diversified global asset management firm with total client assets of $176.1 billion, assets under management of $171.9 billion and other assets of $4.2 billion as of December 31, 2024.
Please refer to the sections of this report entitled “Forward‑Looking Statements” and “Risk Factors.” Overview Our Business – Victory is a diversified global asset management firm with total client assets of $316.6 billion, assets under management of $313.8 billion and other assets of $2.8 billion as of December 31, 2025.
Loss on Debt Extinguishment – Loss on debt extinguishment consists of the write-off of unamortized debt issuance costs and unamortized debt discount as a result of debt refinancing, the acceleration of the paydown of debt principal and debt repurchased and retired in open market transactions.
Refer to “Liquidity and Capital Resources” for more information. Loss on Debt Extinguishment – Loss on debt extinguishment consists of the write-off of unamortized debt issuance costs and unamortized debt discount as a result of debt refinancing, the acceleration of the paydown of debt principal and debt repurchased and retired in open market transactions.
(6) Adding back direct incremental costs of acquisitions, including restructuring costs. (7) Adding back debt issuance and Swap unwind cost expense. (8) Adjusting for losses (earnings) on equity method investments. (9) Subtracting an estimate of income tax expense applied to the sum of the adjustments above.
(6) Adding back direct incremental costs of acquisitions, including restructuring costs. (7) Adding back debt issuance and Swap unwind cost expense. (8) Subtracting an estimate of income tax expense applied to the sum of the adjustments above.
Investment performance : • 45 of our total Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 66% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 47% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 59% over a three-year period, 73% over a five-year period and 79% over a ten-year period.
Investment performance : • 54 of our Victory Capital mutual funds and ETFs had overall Morningstar ratings of four or five stars and 65% of our fund and ETF AUM were rated four or five stars overall by Morningstar. 63% of our strategies by AUM had investment returns in excess of their respective benchmarks over a one-year period, 63% over a three-year period, 68% over a five-year period and 78% over a ten-year period.
Refer to “Supplemental 54 Table of Contents Non‑GAAP Financial Information” for more information about how we calculate Adjusted Net Income and a reconciliation of net income to Adjusted Net Income. • Adjusted EBITDA and Adjusted EBITDA margin was $475.6 million and 53.2%, respectively, for the year ended December 31, 2024 compared to $418.0 million and 50.9%, respectively, for the year ended December 31, 2023.
Refer to “Supplemental Non‑GAAP Financial Information” for more information about how we calculate Adjusted Net Income and a reconciliation of net income to Adjusted Net Income. • Adjusted EBITDA and Adjusted EBITDA margin were $682.9 million and 52.3%, respectively, for the year ended December 31, 2025 compared to $475.6 million and 53.2%, respectively, for the year ended December 31, 2024.
Adjusted Net Income was $312.9 million for the year ended December 31, 2024 compared to $269.7 million for the year ended December 31, 2023.
Adjusted Net Income was $472.6 million for the year ended December 31, 2025 compared to $312.9 million for the year ended December 31, 2024.
The expense for the year ended December 31, 2024 was primarily due to legal and professional fees associated with the Amundi transaction. 2023 compared to 2022 – Acquisition-related costs decreased $0.3 million to $0.2 million for the year ended December 31, 2023 compared to $0.5 million in the prior year.
Acquisition-related costs increased $24.2 million to $35.5 million for the year ended December 31, 2025 compared to $11.3 million in the prior year. The expense for the year ended December 31, 2025 was primarily due to legal and professional fees associated with the Amundi US transaction.
On an equal-weighted basis, 53% of our strategies have outperformed their respective benchmarks over a one-year period, 58% over a three-year period, 58% over a five-year period and 65% over a ten-year period.
On an equal-weighted basis, 60% of our strategies have outperformed their benchmarks over a one-year period, 62% over a three-year period, 69% over a five-year period and 68% over a ten-year period.
We typically utilize an independent valuation expert to assist with these valuations. Any change in the fair value estimate subsequent to the acquisition date is recorded in the earnings of that period.
We typically utilize an independent valuation expert to assist with these valuations. Any change in the fair value estimate subsequent to the acquisition date is recorded in the earnings of that period. As of December 31, 2025, the fair value of the contingent consideration payable was $87.6 million.
The $4.9 million decrease in cash provided by operating activities was due to a $62.4 million decrease in net income partially offset by the combination of a $19.2 million increase in working capital and a $38.3 million increase in non-cash items.
The $45.5 million increase in cash provided by operating activities was due to the combination of a $41.2 million increase in net income and $76.6 million increase in non-cash items partially offset by a $72.3 million decrease in working capital.
Financial highlights : • Total revenue for the year ended December 31, 2024 was $893.5 million compared to $821.0 million for the year ended December 31, 2023. • Net income was $288.9 million and $213.2 million, respectively, for the years ended December 31, 2024 and 2023.
Financial highlights : • Total revenue for the year ended December 31, 2025 was $1.3 billion compared to $893.5 million for the year ended December 31, 2024. • Net income was $330.1 million and $288.9 million, respectively, for the years ended December 31, 2025 and 2024.
These intangibles include customer relationships, investment advisory contracts, intellectual property and non‑compete clauses acquired in connection with a business or asset acquisition. Both depreciation and amortization are recorded ratably over the assets’ useful lives. Acquisition‑Related Costs – Acquisition‑related costs include legal fees, advisory services, mutual fund proxy voting costs and other one‑time expenses related to acquisitions.
These intangibles include customer relationships, investment advisory contracts, intellectual property and non‑compete clauses acquired in connection with a business or asset acquisition. Both depreciation and amortization are recorded ratably over the assets’ useful lives.
The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangibles with a step‑up in tax basis.
The tax benefit from amortization on these assets is included to show the full economic benefit of deductions for all acquired intangibles with a step‑up in tax basis. Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit.
(2) Our accounts receivables consist primarily of investment management, fund administrative and distribution fees that have been earned but not yet received from clients. We perform a review of our receivables on a monthly basis to assess collectability.
(2) Our accounts receivables consist primarily of investment management, fund administrative and distribution fees that have been earned but not yet received from clients. We perform a review of our receivables on a monthly basis to assess collectability. (3) The balance at December 31, 2025 represents the Company's undrawn $100.0 million revolving credit facility.
Investment management fees are earned based on a percentage of AUM as delineated in the respective investment management agreements. Our investment management fees are calculated based on daily average AUM, monthly average AUM or point in time AUM. Fund Administration and Distribution Fees – Fund administration fees are primarily asset‑based fees earned from open‑end funds for administration services.
Investment management fees are earned based on a percentage of AUM as delineated in the respective investment management agreements. Our investment management fees are calculated based on daily average AUM, monthly average AUM or point in time AUM.
Capital Requirements VCS is a registered broker‑dealer subject to the Uniform Net Capital requirements under the Exchange Act, which requires maintenance of certain minimum net capital levels. In addition, we have certain non‑U.S. 72 Table of Contents subsidiaries that have minimum capital requirements.
Capital Requirements VCS is a registered broker‑dealer subject to the Uniform Net Capital requirements under the Exchange Act, which requires maintenance of certain minimum net capital levels. In addition, we have certain non‑U.S. subsidiaries that have minimum capital requirements. As a result, such subsidiaries of our Company may be restricted in their ability to transfer cash to their parents.
AUM by Asset Class – the following table presents our AUM by asset class as of the dates indicated: 57 Table of Contents As of December 31, (in millions) 2024 2023 2022 2021(1)(2) 2020(2) Fixed Income $ 24,402 $ 24,355 $ 26,353 $ 35,154 $ 36,639 Solutions 62,593 54,296 46,317 54,426 30,524 U.S.
AUM by Asset Class – the following table presents our AUM by asset class as of the dates indicated: As of December 31, (in millions) 2025(1) 2024 2023 2022 2021(2)(3) Fixed Income $ 80,544 $ 24,402 $ 24,355 $ 26,353 $ 35,154 Solutions 91,228 62,593 54,296 46,317 54,426 U.S. Mid Cap Equity 29,993 30,584 30,604 27,892 30,578 U.S.
Supplemental Non‑GAAP Financial Information We report our financial results in accordance with GAAP. Our management uses non‑GAAP performance measures to evaluate the underlying operations of our business. Non‑GAAP financial measures are used to supplement GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone.
Non‑GAAP financial measures are used to supplement GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone.
Personnel Compensation and Benefits The following table presents the components of GAAP compensation expense for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (in thousands) 2024 2023 2022 Salaries, payroll related taxes and employee benefits $ 88,599 $ 90,884 $ 87,819 Incentive compensation 102,712 87,081 94,511 Sales-based compensation (1) 24,338 20,945 27,589 Equity awards granted to employees and directors (2) 15,220 16,548 17,816 Acquisition and transaction-related compensation (13,655 ) 5,534 10,463 Total personnel compensation and benefits expense $ 217,214 $ 220,992 $ 238,198 (1) Represents sales‑based commissions paid to our distribution teams.
The following table presents the components of GAAP compensation expense for the years ended December 31, 2025 and 2024: Year Ended December 31, (in thousands) 2025 2024 Salaries, payroll related taxes and employee benefits $ 136,161 $ 88,599 Incentive compensation 140,133 102,712 Sales-based compensation (1) 38,661 24,338 Equity awards granted to employees and directors (2) 20,442 15,220 Acquisition and transaction-related compensation 27,594 (13,655 ) Total personnel compensation and benefits expense $ 362,991 $ 217,214 (1) Represents sales‑based commissions paid to our distribution teams.
Refer to Note 12, Derivatives, for further information on the Swap. Contingent Consideration At December 31, 2024 and 2023, the Company had $139.9 million and $217.2 million, respectively, in contingent consideration that is estimated to be payable over the next one to three years resulting from the WestEnd Acquisition.
Contingent Consideration At December 31, 2025 and 2024, the Company had $87.6 million and $139.9 million, respectively, in contingent consideration that is estimated to be payable over the next one to two years resulting from the WestEnd Acquisition.
Restructuring and Integration Costs – Restructuring and integration costs include costs incurred in connection with business combinations, including the change in the fair value of contingent acquisition payments, asset purchases and changes in business strategy.
Restructuring and Integration Costs – Restructuring and integration costs include costs incurred in connection with business combinations, asset purchases and changes in business strategy.
The portion of the effective income tax rate attributable to state and local income taxes varies from year to year depending on amounts of income apportioned to each jurisdiction, whether we file income tax returns on a unitary or separate return basis and with changes in tax laws. 63 Table of Contents The following table presents our GAAP results of operations for the years ended December 31, 2024, 2023 and 2022 (in thousands except per share data).
The portion of the effective income tax rate attributable to state and local income taxes varies from year to year depending on amounts of income apportioned to each jurisdiction, whether we file income tax returns on a unitary or separate return basis and with changes in tax laws.
Pursuant to the First Amendment, the Company refinanced the 2019 Term Loans with replacement term loans in an aggregate principal amount of $952.0 million (the “2020 Term Loans”).
Pursuant to the Sixth Amendment, the Company also refinanced its existing term loans (the "Existing Term Loans") with replacement term loans (the "Repriced Term Loans") in an aggregate principal amount of $985.0 million.
Other business taxes (3) 1,525 1,707 2,118 ii. Amortization of acquisition-related intangible assets (4) 21,217 32,805 35,160 iii. Share-based compensation (5) 4,246 6,496 10,143 iv. Acquisition, restructuring and exit costs (6) 1,735 28,982 (28,722 ) v.
Other business taxes (3) 3,353 1,525 ii. Amortization of acquisition-related intangible assets (4) 61,633 21,217 iii. Share-based compensation (5) 7,325 4,246 iv. Acquisition, restructuring and exit costs (6) 104,150 1,735 v.
Specifically, we make use of the non‑GAAP financial measures “Adjusted EBITDA” and “Adjusted Net Income.” The following table sets forth a reconciliation from GAAP financial measures to non‑GAAP measures for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of non-GAAP financial measures: Net income (GAAP) $ 288,864 $ 213,157 $ 275,511 Income tax expense (84,892 ) (62,751 ) (74,522 ) Income before income taxes $ 373,756 $ 275,908 $ 350,033 Interest expense (1) 60,799 57,820 41,024 Depreciation (2) 8,959 8,842 8,045 Other business taxes (3) 1,525 1,707 2,118 Amortization of acquisition-related intangible assets (4) 21,217 32,805 35,160 Share-based compensation (5) 4,246 6,496 10,143 Acquisition, restructuring and exit costs (6) 1,735 28,982 (28,722 ) Debt issuance costs (7) 3,385 5,394 5,620 Losses from equity method investments (8) — — 825 Adjusted EBITDA $ 475,622 $ 417,954 $ 424,246 68 Table of Contents Year Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of non-GAAP financial measures: Net income (GAAP) $ 288,864 $ 213,157 $ 275,511 Adjustments to reflect the operating performance of the Company: i.
Specifically, we make use of the non‑GAAP financial measures “Adjusted EBITDA” and “Adjusted Net Income.” 63 Table of Contents The following table sets forth a reconciliation from GAAP financial measures to non‑GAAP measures for the periods indicated: Year Ended December 31, (in thousands) 2025 2024 Reconciliation of non-GAAP financial measures: Net income (GAAP) $ 330,062 $ 288,864 Income tax expense (108,258 ) (84,892 ) Income before income taxes $ 438,320 $ 373,756 Interest expense (1) 52,224 60,799 Depreciation (2) 11,218 8,959 Other business taxes (3) 3,353 1,525 Amortization of acquisition-related intangible assets (4) 61,633 21,217 Share-based compensation (5) 7,325 4,246 Acquisition, restructuring and exit costs (6) 104,150 1,735 Debt issuance costs (7) 4,628 3,385 Adjusted EBITDA $ 682,851 $ 475,622 Year Ended December 31, (in thousands) 2025 2024 Reconciliation of non-GAAP financial measures: Net income (GAAP) $ 330,062 $ 288,864 Adjustments to reflect the operating performance of the Company: i.
Mid Cap Equity 30,584 30,604 27,892 30,578 26,230 U.S. Small Cap Equity 14,785 15,959 15,103 20,094 18,368 U.S. Large Cap Equity 14,148 12,635 10,973 15,766 14,230 Global / Non-U.S.
Small Cap Equity 11,179 14,785 15,959 15,103 20,094 U.S. Large Cap Equity 63,380 14,148 12,635 10,973 15,766 Global / Non-U.S.
Equity, or Alternative Investments based on the underlying investment strategy. Additionally, all assets managed using alternative investment strategies are now included in the Company's Alternative Investments asset class. Prior-period figures have been adjusted accordingly. Asset Flows by Asset Class – the following table summarizes our asset flows by asset class for the periods indicated: (in millions) U.S.
(2) Beginning in January 2022, the Company's "Other" asset class has been categorized to Solutions, Fixed Income, Global / Non-U.S. Equity, or Alternative Investments based on the underlying investment strategy. Additionally, all assets managed using alternative investment strategies are now included in the Company's Alternative Investments asset class. Prior-period figures have been adjusted accordingly.
Excludes ETF assets held by other Victory Capital products. (3) Includes collective trust funds, wrap program accounts, UMAs, UCITs, private funds and non-U.S. domiciled pooled vehicles. (4) Reflects divested assets associated with the INCORE transaction.
(2) Represents only ETF assets held by third parties. Excludes ETF assets held by other Victory Capital products. (3) Includes collective trust funds, wrap program accounts, UMAs, UCITs, private funds and non-U.S. domiciled pooled vehicles. (4) Includes the impact of Pioneer Investments, partially offset by assets divested due to the closure of four Investment Franchises.
(3) The balance at December 31, 2024 and 2023 represents the Company’s undrawn $99.9 million revolving credit facility and a $0.1 million standby letter of credit used as collateral for THB’s real estate location.
The balance at December 31, 2024 represents the Company’s undrawn $99.9 million revolving credit facility and a $0.1 million standby letter of credit used as collateral for THB’s real estate location. (4) Accounts and other payables consist primarily of various payables related to operations, transaction costs and interest payable on the term loan, as well as accrued compensation and benefits.
Key Performance Indicators The following table presents the key performance indicators we focus on when reviewing our results: Year Ended December 31, ($ in millions, except for basis points and percentages) 2024 2023 2022 AUM at period end $ 171,930 $ 161,322 $ 147,762 Average AUM 169,658 153,455 158,699 Gross flows 26,167 23,504 33,637 AUM net short term flows (287 ) (391 ) (187 ) AUM net long term flows (7,090 ) (5,584 ) (2,465 ) AUM net flows (7,377 ) (5,976 ) (2,652 ) Total revenue 893.5 821.0 854.8 Revenue realization on average AUM 52.6 bps 53.4 bps 53.9 bps Net income 288.9 213.2 275.5 Adjusted EBITDA (1) 475.6 418.0 424.2 Adjusted EBITDA margin (1)(2) 53.2 % 50.9 % 49.6 % Adjusted Net Income (1) 312.9 269.7 293.8 Tax benefit of goodwill and acquired intangibles (3) 40.2 38.3 37.5 (1) Our management uses Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the business.
Refer to “Supplemental Non‑GAAP Financial Information” for more information about how we calculate Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. 52 Table of Contents Key Performance Indicators The following table presents the key performance indicators we focus on when reviewing our results: Year Ended December 31, ($ in millions, except for basis points and percentages) 2025 2024 AUM at period end $ 313,775 $ 171,930 Average AUM 268,806 169,658 Gross flows 59,985 26,167 AUM net short term flows (258 ) (287 ) AUM net long term flows (4,198 ) (7,090 ) AUM net flows (4,456 ) (7,377 ) Total revenue 1,306.1 893.5 Revenue realization on average AUM 48.6 bps 52.6 bps Net income 330.1 288.9 Adjusted EBITDA (1) 682.9 475.6 Adjusted EBITDA margin (1)(2) 52.3 % 53.2 % Adjusted Net Income (1) 472.6 312.9 Tax benefit of goodwill and acquired intangibles (3) 41.4 40.2 (1) Our management uses Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the business.
Debt issuance costs (7) 3,385 5,394 5,620 Tax effect of above adjustments (9) (8,028 ) (18,847 ) (6,080 ) Adjusted Net Income $ 312,944 $ 269,694 $ 293,750 Tax benefit of goodwill and acquired intangibles (10) $ 40,171 $ 38,252 $ 37,490 Adjustments made to GAAP Net Income to calculate Adjusted EBITDA and Adjusted Net Income, as applicable, are: (1) Adding back interest paid on debt and other financing costs, net of interest income.
Debt issuance costs (7) 4,628 3,385 Tax effect of above adjustments (8) (38,576 ) (8,028 ) Adjusted Net Income $ 472,575 $ 312,944 Tax benefit of goodwill and acquired intangibles (9) $ 41,370 $ 40,171 Weighted average number of shares outstanding - diluted (GAAP) 66,376 65,928 Weighted average number of shares outstanding - diluted (Non-GAAP) (10) 80,524 65,928 Adjusted net income with tax benefit per share $ 6.38 $ 5.36 Adjustments made to GAAP Net Income to calculate Adjusted EBITDA and Adjusted Net Income, as applicable, are: (1) Adding back interest paid on debt and other financing costs, net of interest income.
The following table presents the components of acquisition, restructuring and exit costs for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 2022 Acquisition-related costs $ 11,285 $ 217 $ 534 Change in value of consideration payable for acquisition of business 2,694 23,236 (40,600 ) Restructuring and integration costs 1,411 595 881 Personnel compensation and benefits (13,655 ) 5,534 10,463 Interest income and other (income) expense — (600 ) — Total acquisition, restructuring and exit costs $ 1,735 $ 28,982 $ (28,722 ) Liquidity, Capital Resources and Contractual Obligations Sources and Uses of Cash – We generate strong cash flows from operations that allow us to meet our cash requirements.
(10) The Company includes participating securities in its computation of adjusted earnings per diluted share, including shares of series A Non-Voting Convertible Preferred stock for the year ended December 31, 2025. 64 Table of Contents The following table presents the components of acquisition, restructuring and exit costs for the periods indicated: Year Ended December 31, (in thousands) 2025 2024 Acquisition-related costs $ 35,479 $ 11,285 Change in value of consideration payable for acquisition of business 11,403 2,694 Restructuring and integration costs 29,674 1,411 Personnel compensation and benefits 27,594 (13,655 ) Total acquisition, restructuring and exit costs $ 104,150 $ 1,735 Liquidity, Capital Resources and Contractual Obligations Sources and Uses of Cash – We generate strong cash flows from operations that allow us to meet our cash requirements.
Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities $ 339,979 $ 330,291 $ 335,211 Net cash used in investing activities (3,979 ) (7,841 ) (6,317 ) Net cash used in financing activities (332,763 ) (237,132 ) (360,186 ) Operating Activities 2024 compared to 2023 – Cash provided by operating activities was $340.0 million in 2024, compared to $330.3 million in 2023.
Year Ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities $ 385,485 $ 339,979 Net cash provided by (used in) investing activities 76,576 (3,979 ) Net cash used in financing activities (425,484 ) (332,763 ) Operating Activities Cash provided by operating activities was $385.5 million in 2025, compared to $340.0 million in 2024.
Due to our acquisitive nature, tax deductions allowed on acquired intangible assets and goodwill provide us with a significant supplemental economic benefit. 55 Table of Contents The following table presents a reconciliation of our total client assets (1) as of the dates indicated: For the Year Ended December 31, (in millions) 2024 2023 2022 Beginning AUM $ 161,322 $ 147,762 $ 177,716 Beginning other assets 5,289 5,190 5,938 Beginning total client assets 166,611 152,952 183,654 AUM net cash flows (7,377 ) (5,976 ) (2,652 ) Other assets net cash flows (1,627 ) (591 ) (80 ) Total client assets net cash flows (9,004 ) (6,567 ) (2,732 ) AUM market appreciation (depreciation) 18,100 21,188 (25,826 ) Other assets market appreciation (depreciation) 504 690 (669 ) Total client assets market appreciation (depreciation) 18,604 21,878 (26,495 ) AUM realizations and distributions (2 ) (100 ) (376 ) Acquired & divested assets / Net transfers (113 ) (1,552 ) (1,100 ) Ending AUM 171,930 161,322 147,762 Ending other assets 4,165 5,289 5,190 Ending total client assets 176,096 166,611 152,952 Average total client assets 174,542 158,268 164,025 (1) Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table.
The following table presents a reconciliation of our total client assets (1) as of the dates indicated: For the Year Ended December 31, (in millions) 2025 2024 Beginning AUM $ 171,930 $ 161,322 Beginning other assets 4,165 5,289 Beginning total client assets 176,096 166,611 AUM net cash flows (4,456 ) (7,377 ) Other assets net cash flows (1,948 ) (1,627 ) Total client assets net cash flows (6,404 ) (9,004 ) AUM market appreciation (depreciation) 37,742 18,100 Other assets market appreciation (depreciation) 629 504 Total client assets market appreciation (depreciation) 38,371 18,604 AUM realizations and distributions (311 ) (2 ) Acquired & divested assets / Net transfers (2) 108,869 (113 ) Ending AUM 313,775 171,930 Ending other assets 2,846 4,165 Ending total client assets 316,621 176,096 Average total client assets 272,134 174,542 (1) Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table.
The increase was due to an increase in dividend income partially offset by a decrease in the net unrealized fair value of deferred compensation plan investments over the comparable period. 2023 compared to 2022 – Interest income and other income (expense) was income of $8.7 million in 2023 compared to expense of $2.5 million in 2022.
Interest income and other income (expense) was income of $15.3 million and $10.4 million in 2025 and 2024, respectively. The increase was primarily due to an increase in the net unrealized fair value of deferred compensation plan investments over the comparable period.
Income Tax Expense – The provision for income taxes includes U.S. federal, state and local taxes, and foreign income taxes payable by certain of our subsidiaries. The effective tax rate is primarily driven by state and local taxes and excess tax benefits on share-based compensation.
The effective tax rate is primarily driven by state and local taxes, excess tax benefits on share-based compensation, and certain non-deductible expenses.
Assets Flows by Vehicle – the following table summarizes our asset flows by vehicle for the periods indicated: Separate Accounts and Other (in millions) Mutual Funds(1) ETFs(2) Vehicles(3) Total Year Ended December 31, 2024 Beginning AUM $ 108,802 $ 4,970 $ 47,551 $ 161,322 Gross client cash inflows 14,954 3,089 8,124 26,167 Gross client cash outflows (22,408 ) (915 ) (10,222 ) (33,545 ) Net client cash flows (7,454 ) 2,174 (2,097 ) (7,377 ) Market appreciation / (depreciation) 12,561 404 5,136 18,100 Realization and distributions — — (2 ) (2 ) Acquired & divested assets / Net transfers (263 ) (40 ) 189 (113 ) Ending AUM $ 113,645 $ 7,508 $ 50,777 $ 171,930 Year Ended December 31, 2023 Beginning AUM $ 99,447 $ 5,627 $ 42,688 $ 147,762 Gross client cash inflows 15,594 969 6,942 23,504 Gross client cash outflows (21,276 ) (1,567 ) (6,637 ) (29,480 ) Net client cash flows (5,682 ) (599 ) 305 (5,976 ) Market appreciation / (depreciation) 15,114 (56 ) 6,130 21,188 Realization and distributions — — (100 ) (100 ) Acquired & divested assets / Net transfers (4) (77 ) (3 ) (1,471 ) (1,552 ) Ending AUM $ 108,802 $ 4,970 $ 47,551 $ 161,322 Year Ended December 31, 2022 Beginning AUM $ 124,142 $ 4,871 $ 48,703 $ 177,716 Gross client cash inflows 21,198 2,043 10,395 33,637 Gross client cash outflows (27,703 ) (572 ) (8,014 ) (36,289 ) Net client cash flows (6,505 ) 1,472 2,381 (2,652 ) Market appreciation / (depreciation) (17,092 ) (724 ) (8,010 ) (25,826 ) Realization and distributions — — (376 ) (376 ) Acquired & divested assets / Net transfers (1,098 ) 9 (11 ) (1,100 ) Ending AUM $ 99,447 $ 5,627 $ 42,688 $ 147,762 (1) Includes institutional and retail share classes, money market and Variable Insurance Products or VIP funds. 59 Table of Contents (2) Represents only ETF assets held by third parties.
Assets Flows by Vehicle – the following table summarizes our asset flows by vehicle for the periods indicated: Separate Accounts and Other (in millions) Mutual Funds (1) ETFs (2) Vehicles (3) Total Year Ended December 31, 2025 Beginning AUM $ 113,645 $ 7,508 $ 50,777 $ 171,930 Gross client cash inflows 24,768 7,476 27,741 59,985 Gross client cash outflows (36,240 ) (1,082 ) (27,119 ) (64,441 ) Net client cash flows (11,472 ) 6,394 622 (4,456 ) Market appreciation / (depreciation) 20,651 1,062 16,029 37,742 Realization and distributions — — (311 ) (311 ) Acquired & divested assets / Net transfers (4) 49,379 85 59,405 108,869 Ending AUM $ 172,203 $ 15,049 $ 126,523 $ 313,775 Year Ended December 31, 2024 Beginning AUM $ 108,802 $ 4,970 $ 47,551 $ 161,322 Gross client cash inflows 14,954 3,089 8,124 26,167 Gross client cash outflows (22,408 ) (915 ) (10,222 ) (33,545 ) Net client cash flows (7,454 ) 2,174 (2,097 ) (7,377 ) Market appreciation / (depreciation) 12,561 404 5,136 18,100 Realization and distributions — — (2 ) (2 ) Acquired & divested assets / Net transfers (263 ) (40 ) 189 (113 ) Ending AUM $ 113,645 $ 7,508 $ 50,777 $ 171,930 57 Table of Contents (1) Includes institutional and retail share classes, money market and Variable Insurance Products or VIP funds.
Cash Flows – The following table is derived from our Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022.
VCS and our non‑U.S. subsidiaries were in compliance with these requirements as of and for the years ended December 31, 2025 and 2024. 66 Table of Contents Cash Flows – The following table is derived from our Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024.
Interest Expense and Other Financing Costs 2024 compared to 2023 – Interest expense and other financing costs increased $2.6 million to $63.8 million in 2024 from $61.3 million in 2023 as a result of a higher average interest rate over the comparable period. 2023 compared to 2022 – Interest expense and other financing costs increased $17.3 million to $61.3 million in 2023 from $44.0 million in 2022 as a result of a higher average interest rate over the comparable period.
Interest Expense and Other Financing Costs – Interest expense and other financing costs consists primarily of interest expense attributable to long‑term debt. Interest expense and other financing costs decreased $9.0 million to $54.8 million in 2025 from $63.8 million in 2024 as a result of a lower average interest rate over the comparable period.
Change in Value of Consideration Payable for Acquisition of Business 2024 compared to 2023 - The change in value of consideration payable for acquisition of business decreased $20.5 million as a result of an increase of $2.7 million in the fair value of the contingent consideration associated with the WestEnd Acquisition for the year ended December 31, 2024, compared to increases of $8.7 million and $14.5 million associated with the USAA AMCO Acquisition and WestEnd Acquisition, respectively, for the year ended December 31, 2023.
Change in Value of Consideration Payable for Acquisition of Business – The change in value of consideration payable for acquisition of business increased $8.7 million due the change in the fair value of the contingent consideration associated with the WestEnd Acquisition increasing $11.4 million for the year ending December 31, 2025 compared to $2.7 million in 2024.
The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, average assets, revenues or earnings in the full-year period ended December 31, 2021. (2) Beginning in January 2022, the Company's "Other" asset class has been categorized to Solutions, Fixed Income, Global / Non-U.S.
The WestEnd acquired assets had no economic impact on operations in 2021 and no effect on asset flows, average assets, revenues or earnings in the full-year period ended December 31, 2021. 55 Table of Contents Asset Flows by Asset Class – the following table summarizes our asset flows by asset class for the periods indicated: (in millions) U.S.
We generated $26.2 billion in gross flows and $7.4 billion in net outflows ($7.1 billion long-term, $0.3 billion short-term) for the year ended December 31, 2024, compared to $23.5 billion in gross flows and $6.0 billion in net outflows ($5.6 billion long-term, $0.4 billion short-term) for the same period in 2023. • Within the following tables and disclosures, AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets.
We generated $60.0 billion in gross flows and $4.5 billion in net outflows for the year ended December 31, 2025 compared to $26.2 billion in gross flows and $7.4 billion in net outflows for the same period in 2024.
The following table presents a reconciliation of our total AUM (1) as of the dates indicated: For the Year Ended (in millions) 2024 2023 2022 Beginning AUM $ 161,322 $ 147,762 $ 177,716 Gross client cash inflows 26,167 23,504 33,637 Gross client cash outflows (33,545 ) (29,480 ) (36,289 ) Net client cash flows (7,377 ) (5,976 ) (2,652 ) Market appreciation (depreciation) 18,100 21,188 (25,826 ) Realizations and distributions (2 ) (100 ) (376 ) Acquired & divested assets / Net transfers (113 ) (1,552 ) (1,100 ) Ending AUM 171,930 161,322 147,762 Average AUM 169,658 153,455 158,699 (1) Total AUM includes both discretionary assets under management and non-discretionary assets under advisement and excludes other assets. 56 Table of Contents The following table presents a reconciliation of our other assets (1) as of the dates indicated: For the Year Ended December 31, (in millions) 2024 2023 2022 Beginning other assets (institutional) $ 5,289 $ 5,190 $ 5,938 Gross client cash inflows 467 600 297 Gross client cash outflows (2,094 ) (1,191 ) (377 ) Net client cash flows (1,627 ) (591 ) (80 ) Market appreciation (depreciation) 504 690 (669 ) Realizations and distributions — — — Acquired & divested assets / Net transfers — — — Ending other assets (institutional) 4,165 5,289 5,190 Average other assets (institutional) 4,883 4,813 5,327 (1) Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table.
The following table presents a reconciliation of our other assets (1) as of the dates indicated: For the Year Ended December 31, (in millions) 2025 2024 Beginning other assets (institutional) $ 4,165 $ 5,289 Gross client cash inflows — 467 Gross client cash outflows (1,949 ) (2,094 ) Net client cash flows (1,948 ) (1,627 ) Market appreciation (depreciation) 629 504 Realizations and distributions — — Acquired & divested assets / Net transfers — — Ending other assets (institutional) 2,846 4,165 Average other assets (institutional) 3,328 4,883 (1) Includes low-fee (2 to 4 bps) institutional assets, previously reported in the Solutions asset class within the by asset class table and in Separate Accounts and Other Pooled Vehicles within the by vehicle table.
Equity 19,095 16,772 14,160 16,050 14,141 Alternative Investments 2,980 3,431 3,663 2,548 422 Total Long-Term AUM $ 168,586 $ 158,051 $ 144,460 $ 174,616 $ 140,554 Money Market / Short-Term 3,344 3,271 3,302 3,100 3,534 Total AUM $ 171,930 $ 161,322 $ 147,762 $ 177,716 $ 144,088 (1) Includes the impact of acquired assets from the THB, NEC and WestEnd Acquisitions, which closed on March 1, 2021, November 1, 2021 and December 31, 2021, respectively, and increased our AUM by approximately $547 million, $795 million and $19.3 billion, at closing, respectively.
Equity 30,680 19,095 16,772 14,160 16,050 Alternative Investments 3,038 2,980 3,431 3,663 2,548 Total Long-Term AUM $ 310,042 $ 168,586 $ 158,051 $ 144,460 $ 174,616 Money Market / Short-Term 3,733 3,344 3,271 3,302 3,100 Total AUM $ 313,775 $ 171,930 $ 161,322 $ 147,762 $ 177,716 (1) Includes the impact of Pioneer Investments, partially offset by assets divested due to the closure of four Investment Franchises.
December 31, 2024 AUM – Our total AUM at December 31, 2024 increased by $10.6 billion, or 6.6%, to $171.9 billion from $161.3 billion at December 31, 2023, primarily driven by positive market movement of $18.1 billion, partially offset by net outflows of $7.4 billion.
Our total AUM at December 31, 2025 increased by $141.8 billion, or 82.5%, to $313.8 billion from $171.9 billion at December 31, 2024. The increase was primarily due to AUM acquired from Amundi US totaling $114.6 billion and positive market action of $37.7 billion partially offset by net outflows of $4.5 billion .
In addition, the value of the fixed income assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. Declines in the values of AUM could lead to reduced revenues as investment management fees are generally earned as a percentage of AUM.
To the degree that these expense increases are not recoverable or cannot be counterbalanced through price increases due to the competitive environment, our profitability could be negatively impacted. In addition, the value of the fixed income assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment.
Fund distribution fees fluctuate based on the level of average open‑end fund AUM and the composition of those assets across share classes that pay varying levels of fund distribution fees. The Company has contractual arrangements with a third party to provide certain sub-administration services.
Fund distribution fees fluctuate based on the level of average open‑end fund AUM and the composition of those assets across share classes that pay varying levels of fund distribution fees. Fund administration and distribution fees increased $71.8 million, or 38.0%, to $260.7 million in 2025 compared to $188.9 million in 2024.
The expense for the years ended December 31, 2023 and 2022 was primarily due to legal and professional fees. Restructuring and Integration Costs 2024 compared to 2023 – Restructuring and integration costs increased $0.8 million to $1.4 million for the year ended December 31, 2024 compared to $0.6 million in the prior year.
Restructuring and integration costs increased $28.3 million to $29.7 million for the year ended December 31, 2025 compared to $1.4 million in the prior year.
The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2019 Credit Agreement contains a financial performance covenant, requiring a maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00.
The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 4.00 to 1.00.
Distribution and other asset-based expenses decreased $3.1 million, or 2.1%, to $146.5 million in 2024 compared to $149.6 million in 2023, primarily due to a decrease in platform distribution fees over the comparable period. 2023 compared to 2022 – Distribution and other asset‑based expenses are primarily based on AUM.
Distribution and other asset-based expenses increased $85.5 million, or 58.4%, to $232.0 million in 2025 compared to $146.5 million in 2024, primarily due to an increase in broker dealer and platform distribution fees over the comparable period.
General and Administrative Expenses – General and administrative expenses primarily consist of investment research and technology costs, professional and marketing fees, travel, rent and insurance expenses. 62 Table of Contents Depreciation and Amortization – Depreciation and amortization expense consists primarily of the depreciation of property and equipment as well as the amortization of acquired intangibles that have a definite life.
The increase is primarily due to an increase facilities and data services and technology related expenses. Depreciation and Amortization – Depreciation and amortization expense consists primarily of the depreciation of property and equipment as well as the amortization of acquired intangibles that have a definite life.
General and Administrative Expenses 2024 compared to 2023 – General and administrative expenses were $56.7 million in 2024 compared to $56.3 million in 2023, an increase of $0.4 million, or 0.7%. 2023 compared to 2022 – General and administrative expenses were $56.3 million in 2023 compared to $52.4 million in 2022.
General and Administrative Expenses – General and administrative expenses primarily consist of investment research and technology costs, professional and marketing fees, travel, rent and insurance expenses. General and administrative expenses were $83.3 million in 2025 compared to $56.7 million in 2024, an increase of $26.6 million, or 47.0%.
The 2021 Incremental Term Loans will mature in December 2028 and, until the Fourth Amendment to the 2019 Credit Agreement, accrued interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%.
The Repriced Term Loans will mature on September 23, 2032 and will bear interest at an annual rate equal to, at the option of the Company, either SOFR plus a margin of 2.00% or an alternate base rate plus a margin of 1.00%.
Excludes $62.7 million and $78.3 million at December 31, 2024 and 2023, respectively, related to the estimated fair value of the contingent consideration that is expected to be paid over the next twelve month period resulting from the WestEnd Acquisition. 2019 Credit Agreement On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company entered into the 2019 Credit Agreement, repaid all indebtedness outstanding under the prior credit agreement (the “2018 Credit Agreement”), and terminated the 2018 Credit Agreement.
Excludes $39.3 million and $62.7 million at December 31, 2025 and 2024, respectively, related to the estimated fair value of the contingent consideration that is expected to be paid over the next twelve month period resulting from the WestEnd Acquisition. 2019 Credit Agreement Since 2019, the Company is a party to a credit agreement (the "2019 Credit Agreement"), which includes both a revolving credit facility (the “Revolving Facility”) with aggregate commitments of $100.0 million (with a $10.0 million sub-limit for the issuance of letters of credit) and a term loan with an aggregate principal amount of $1.1 billion (the “2019 Term Loans”).
Total AUM by Distribution Channel – the following table presents our total AUM by distribution channel as of the dates indicated: As of December 31, 2024 2023 2022 (in millions) Amount % of total Amount % of total Amount % of total Direct $ 60,949 35 % $ 57,840 36 % $ 52,551 36 % Institutional 41,322 24 % 40,866 25 % 39,320 26 % Retail 69,659 41 % 62,616 39 % 55,891 38 % Total AUM (1)(2) $ 171,930 100 % $ 161,322 100 % $ 147,762 100 % (1) The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.
(2) Includes the impact of Pioneer Investments, partially offset by assets divested due to the closure of four Investment Franchises. 56 Table of Contents Total AUM by Distribution Channel – the following table presents our total AUM by distribution channel as of the dates indicated: As of December 31, 2025 2024 (in millions) Amount % of total Amount % of total Direct $ 62,371 20 % $ 60,949 35 % Non-US 54,799 17 % 6,224 4 % Institutional 78,919 25 % 35,098 20 % Retail 117,685 38 % 69,659 41 % Total AUM (1)(2)(3) $ 313,775 100 % $ 171,930 100 % (1) The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.
Refer to Note 10, Income Taxes, to the audited financial statements for further details on income taxes. Effects of Inflation Inflation did not have a material effect on our consolidated results of operations. Inflationary pressures can result in increases to our cost structure.
Effects of Inflation Inflation did not have a material effect on our consolidated results of operations. Inflationary pressures can result in increases to our cost structure. Certain large expense components such as compensation and distribution expenses are predominately variable and move in tandem with revenues.
Sales-based compensation was $20.9 million and $27.6 million for the years ended December 31, 2023 and 2022, respectively. 65 Table of Contents Distribution and Other Asset‑based Expenses The following table presents the components of distribution and other asset‑based expenses for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (in thousands) 2024 2023 2022 Broker-dealer distribution fees $ 20,222 $ 20,275 $ 22,703 Platform distribution fees 89,233 92,509 98,155 Sub-administration 17,010 15,877 16,261 Sub-advisory 9,152 10,576 13,573 Middle-office 10,872 10,359 10,413 Total distribution and other asset-based expenses $ 146,489 $ 149,596 $ 161,105 2024 compared to 2023 – Distribution and other asset‑based expenses are primarily based on AUM.
Sub‑administration, sub-transfer agent, sub‑advisory and middle‑office expenses consist of fees paid to our sub‑administrators of the Victory Funds and VictoryShares, fees paid to our sub-transfer agent for the Victory Funds III, fees paid to sub‑advisers on certain Victory Funds and fees paid to vendors to which we outsource middle‑office functions. 61 Table of Contents The following table presents the components of distribution and other asset‑based expenses for the years ended December 31, 2025 and 2024: Year Ended December 31, (in thousands) 2025 2024 Broker-dealer distribution fees $ 70,725 $ 20,222 Platform distribution fees 121,734 89,233 Sub-administration 21,015 17,010 Sub-advisory 7,471 9,152 Middle-office 11,046 10,872 Total distribution and other asset-based expenses $ 231,991 $ 146,489 Distribution and other asset‑based expenses are primarily based on AUM.
Refer to Note 10, Income Taxes, to the audited financial statements for further details on income taxes. 2023 compared to 2022 – Our effective tax rate increased 1.4% from 21.3% in 2022 to 22.7% in 2023. The change in the effective tax rate was primarily due to lower excess tax benefits on share-based compensation.
For the year ended December 31, 2025 and 2024, the effective tax rate was 24.7% and 22.7%, respectively. The year-over-year increase in the effective tax rate is due to decreased excess tax benefits on share-based compensation and increased non-deductible expenses. Refer to Note 10, Income Taxes , for further details on the Company's income taxes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe same 10% increase or decrease in the value of our total AUM, if attributed entirely to a proportionate increase or decrease in the AUM of the Victory Funds and USAA Funds, to which we provide a range of services in addition to those provided to institutional separate accounts, would cause an annualized increase or decrease in our revenues of approximately $103.2 million at the Victory Funds’ and USAA Funds’ aggregate weighted-average fee rate of 60 basis points for the year ended December 31, 2024.
Biggest changeThe same 10% increase or decrease in the value of our total AUM, if attributed entirely to a proportionate increase or decrease in the AUM of the Victory Funds to which we provide a range 68 Table of Contents of services in addition to those provided to institutional separate accounts, would cause an annualized increase or decrease in our revenues of approximately $191.5 million at the Victory Funds’ aggregate weighted-average fee rate of 61 basis points for the year ended December 31, 2025.
Each investment team monitors its own exposure to exchange rate risk and makes decisions on how to manage that risk in the portfolios they manage. We believe many of our clients invest in those strategies in order to gain exposure to non‑U.S. currencies, or may implement their own 74 Table of Contents hedging programs.
Each investment team monitors its own exposure to exchange rate risk and makes decisions on how to manage that risk in the portfolios they manage. We believe many of our clients invest in those strategies in order to gain exposure to non‑U.S. currencies, or may implement their own hedging programs.
In addition, such depreciation could cause our clients to withdraw their assets in favor of other investment alternatives that they perceive to offer higher returns or lower risk, which could cause our revenues and net income to decline further. The value of our AUM was approximately $172 billion at December 31, 2024.
In addition, such depreciation could cause our clients to withdraw their assets in favor of other investment alternatives that they perceive to offer higher returns or lower risk, which could cause our revenues and net income to decline further. The value of our AUM was approximately $314 billion at December 31, 2025.
At December 31, 2024, we were exposed to interest rate risk as a result of the amounts outstanding under the 2019 Credit Agreement, as amended. Refer to Note 11, Debt, for a description of the amounts outstanding as of such date and the applicable interest rate. 75 Table of Contents
At December 31, 2025, we were exposed to interest rate risk as a result of the amounts outstanding under the 2019 Credit Agreement, as amended. Refer to Note 11, Debt, for a description of the amounts outstanding as of such date and the applicable interest rate. 69 Table of Contents
If the same 10% increase or decrease in the value of our total AUM was attributable entirely to a proportionate increase or decrease in the assets of our institutional separate accounts, it would cause an annualized increase or decrease in our revenues of approximately $72.2 million at the weighted-average fee rate across all of our institutional separate accounts of 42 basis points for the year ended December 31, 2024.
If the same 10% increase or decrease in the value of our total AUM was attributable entirely to a proportionate increase or decrease in the assets of our institutional separate accounts, it would cause an annualized increase or decrease in our revenues of approximately $94.2 million at the weighted-average fee rate across all of our institutional separate accounts of 30 basis points for the year ended December 31, 2025.
Assuming 11% of our AUM are invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangement, a 10% increase or decrease in the value of the U.S. dollar would decrease or increase the fair value of our AUM by approximately $1.9 billion, which would cause an annualized increase or decrease in revenues of approximately $10.0 million at our weighted-average fee rate for the business of 53 basis points for the year ended December 31, 2024.
Assuming 10% of our AUM are invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangement, a 10% increase or decrease in the value of the U.S. dollar would decrease or increase the fair value of our AUM by approximately $3.1 billion, which would cause an annualized increase or decrease in revenues of approximately $15.0 million at our weighted-average fee rate for the business of 49 basis points for the year ended December 31, 2025.
A 10% increase or decrease in the value of our AUM, if proportionately distributed over all of our strategies, products and client relationships, would cause an annualized increase or decrease in our revenues of approximately $91.2 million at our weighted-average fee rate of 53 basis points for the year ended December 31, 2024.
A 10% increase or decrease in the value of our AUM, if proportionately distributed over all of our strategies, products and client relationships, would cause an annualized increase or decrease in our revenues of approximately $153.9 million at our weighted-average fee rate of 49 basis points for the year ended December 31, 2025.
Removed
We operate in several foreign countries and incur operating expenses associated with these operations. In addition, we have revenue and revenue-sharing arrangements that are denominated in non-U.S. currencies. We do not believe foreign currency fluctuations materially affect our results of operations.

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