Virtus Investment Partners Announces Financial Results for Fourth Quarter 2023

  • Earnings Per Share – Diluted of $4.21; Earnings Per Share – Diluted, as Adjusted, of $6.11
  • Total Sales of $6.2B; Net Flows of ($3.8B); Assets Under Management of $172.3B

HARTFORD, Conn.–(BUSINESS WIRE)–Virtus Investment Partners, Inc. (NYSE: VRTS) today reported financial results for the three months ended December 31, 2023.


Financial Highlights (Unaudited)

 

(in millions, except per share data or as noted)

   

 

Three Months Ended

 

 

 

Three

Months

Ended

 

 

 

12/31/2023

 

12/31/2022

 

Change

 

9/30/2023

 

Change

U.S. GAAP Financial Measures

 

 

 

 

 

 

 

 

 

Revenues

$

214.6

 

 

$

198.4

 

 

8

%

 

$

219.3

 

 

(2

%)

Operating expenses

$

175.6

 

 

$

167.2

 

 

5

%

 

$

174.4

 

 

1

%

Operating income (loss)

$

39.0

 

 

$

31.2

 

 

25

%

 

$

44.9

 

 

(13

%)

Operating margin

 

18.2

%

 

 

15.7

%

 

 

 

 

20.5

%

 

 

Net income (loss) attributable to Virtus Investment Partners, Inc.

$

30.8

 

 

$

35.4

 

 

(13

%)

 

$

30.9

 

 

%

Earnings (loss) per share – diluted

$

4.21

 

 

$

4.77

 

 

(12

%)

 

$

4.19

 

 

%

Weighted average shares outstanding – diluted

 

7.320

 

 

 

7.419

 

 

(1

%)

 

 

7.379

 

 

(1

%)

Non-GAAP Financial Measures (1)

 

 

 

 

 

 

 

 

 

Revenues, as adjusted

$

193.4

 

 

$

176.3

 

 

10

%

 

$

197.5

 

 

(2

%)

Operating expenses, as adjusted

$

129.5

 

 

$

120.2

 

 

8

%

 

$

130.5

 

 

(1

%)

Operating income (loss), as adjusted

$

63.9

 

 

$

56.1

 

 

14

%

 

$

67.0

 

 

(5

%)

Operating margin, as adjusted

 

33.0

%

 

 

31.8

%

 

 

 

 

33.9

%

 

 

Net income (loss) attributable to Virtus Investment Partners, Inc., as adjusted

$

44.8

 

 

$

38.3

 

 

17

%

 

$

45.8

 

 

(2

%)

Earnings (loss) per share – diluted, as adjusted

$

6.11

 

 

$

5.17

 

 

18

%

 

$

6.21

 

 

(2

%)

Weighted average shares outstanding – diluted, as adjusted

 

7.320

 

 

 

7.419

 

 

(1

%)

 

 

7.379

 

 

(1

%)

 

(1) See the information beginning on page 10 for reconciliations to the most directly comparable U.S. GAAP measures and other important disclosures

Earnings Summary

The company presents U.S. GAAP and non-GAAP earnings information in this release. Management believes that the non-GAAP financial measures presented reflect the company’s operating results from providing investment management and related services to individuals and institutions and uses these measures to evaluate financial performance. Non-GAAP financial measures have material limitations and should not be viewed in isolation or as a substitute for U.S. GAAP measures. Reconciliations of the non-GAAP financial measures to the most comparable U.S. GAAP measures can be found beginning on page 10 of this earnings release.

 

Assets Under Management and Asset Flows

 

(in billions)

 

 

Three Months Ended

 

 

 

Three

Months

Ended

 

 

 

12/31/2023

 

12/31/2022

 

Change

 

9/30/2023

 

Change

Ending total assets under management

$

172.3

 

 

$

149.4

 

 

15

%

 

$

162.5

 

 

6

%

Average total assets under management

$

162.7

 

 

$

148.6

 

 

9

%

 

$

167.9

 

 

(3

%)

Total sales

$

6.2

 

 

$

7.3

 

 

(14

%)

 

$

5.8

 

 

7

%

Net flows

$

(3.8

)

 

$

(3.4

)

 

12

%

 

$

(1.5

)

 

N/M

 

N/M – Not Meaningful

Total assets under management of $172.3 billion at December 31, 2023 increased 6% from $162.5 billion at September 30, 2023 primarily due to market performance with positive net flows in retail separate accounts, partially offset by net outflows in institutional and open-end funds. In addition, the company provided services to $2.6 billion of other fee-earning assets.

Total sales increased 7% to $6.2 billion from $5.8 billion in the third quarter due to higher retail sales, with growth in both retail separate accounts and open-end funds. Retail separate account sales of $2.1 billion increased 15% from $1.8 billion led by growth in the private client channel. Open-end fund sales of $2.9 billion increased 9% from $2.7 billion primarily reflecting higher sales of mid-cap, small/mid-cap, and bank loan strategies. Institutional sales of $1.2 billion declined modestly from $1.3 billion in the prior quarter, which included a $0.3 billion collateralized loan obligation (CLO) issuance.

Net flows of ($3.8) billion compared with ($1.5) billion in the third quarter. Institutional net flows of ($2.2) billion compared with ($0.4) billion and included repositioning by several large retirement plan mandates. Retail separate account net flows of $0.4 billion increased from $0.3 billion in the prior quarter, with net inflows in both the intermediary sold and private client channels. Open-end fund net flows of ($2.0) billion compared with ($1.5) billion in the prior quarter due to higher redemptions across strategies but included continued positive net flows in small/mid-cap and global equity strategies.

GAAP Results

Operating income of $39.0 million declined 13% from $44.9 million in the prior quarter due to a 2% decrease in revenues, reflecting lower average assets under management, and a 1% increase in operating expenses. The increase in operating expenses primarily reflected CLO issuance expenses and fair value adjustments to contingent consideration, partially offset by lower employment expenses, primarily variable incentive compensation, and lower distribution and other asset-based expenses.

Net income attributable to Virtus Investment Partners, Inc. of $4.21 per diluted share included ($0.71) of fair value adjustments to affiliate noncontrolling interests, ($0.36) of CLO issuance expense, ($0.18) of acquisition and integration costs, and ($0.13) of fair value adjustments to contingent consideration, partially offset by $0.35 of realized and unrealized gains on investments. Net income per diluted share of $4.19 in the prior quarter included ($0.67) of fair value adjustments to affiliate noncontrolling interests and ($0.30) of acquisition and integration costs.

The effective tax rate of 26% increased from 24% in the prior quarter, primarily reflecting changes in valuation allowances related to marketable securities.

Non-GAAP Results

Revenues, as adjusted, of $193.4 million decreased 2% from $197.5 million in the prior quarter primarily due to 3% lower average assets under management partially offset by higher performance fees.

Employment expenses, as adjusted, of $96.7 million decreased from $98.8 million in the prior quarter primarily due to lower variable incentive compensation. Other operating expenses, as adjusted, of $31.2 million increased from $30.1 million largely due to higher travel and related expenses and increased market data expenses.

Operating income, as adjusted, of $63.9 million and the related margin of 33.0% decreased from $67.0 million and 33.9% in the prior quarter, respectively, due to the lower investment management fees driven by lower average assets under management.

Net income attributable to Virtus Investment Partners, Inc., as adjusted, per diluted share was $6.11, a modest decrease of $0.10, or 2%, from $6.21 in the prior quarter. The decrease primarily reflected lower investment management fees due to lower average assets under management.

The effective tax rate, as adjusted, of 27% was unchanged from the prior quarter.

 

Select Balance Sheet Items (Unaudited)

(in millions)

 

 

As of

 

 

 

As of

 

 

 

12/31/2023

 

12/31/2022

 

Change

 

9/30/2023

 

Change

Cash and cash equivalents

$

239.6

 

$

338.2

 

 

(29

%)

 

$

195.4

 

23

%

Gross debt (1)

$

258.8

 

$

261.6

 

 

(1

%)

 

$

279.5

 

(7

%)

Contingent consideration (2)

$

90.9

 

$

128.4

 

 

(29

%)

 

$

94.4

 

(4

%)

Redeemable noncontrolling interests (3)

$

74.2

 

$

95.5

 

 

(22

%)

 

$

70.6

 

5

%

Total equity exc. noncontrolling interests

$

864.0

 

$

817.0

 

 

6

%

 

$

862.1

 

%

 

 

 

 

 

 

 

 

 

 

Working capital (4)

$

100.6

 

$

193.2

 

 

(48

%)

 

$

105.6

 

(5

%)

Net debt (cash) (5)

$

19.2

 

$

(76.7

)

 

N/M

 

 

$

84.1

 

(77

%)

(1)

 

Excludes deferred financing costs of $5.4 million, $6.5 million, and $5.7 million, as of December 31, 2023, December 31, 2022, and September 30, 2023, respectively

(2)

 

Represents estimates of revenue participation and contingent payments

(3)

 

Excludes redeemable noncontrolling interests of consolidated investment products of $30.6 million, $18.3 million, and $25.7 million as of December 31, 2023, December 31, 2022, and September 30, 2023, respectively

(4)

 

Defined as cash and cash equivalents plus accounts receivable, net, and deferred compensation related investments less accrued compensation and benefits, accounts payable and accrued liabilities, dividends payable, debt principal payments due over next 12 months and revenue participation amounts earned as of the balance sheet date and due within 12 months. As of December 31, 2023, deferred compensation related investments were added to the definition of working capital and prior period amounts have been adjusted to conform to this definition.

(5)

 

Defined as gross debt less cash and cash equivalents

N/M – Not Meaningful

Working capital of $100.6 million at December 31, 2023 compared with $105.6 million at September 30, 2023, as return of capital and debt repayment offset cash earnings.

During the quarter, the company repurchased 97,952 shares of common stock for $20.0 million. For the full year 2023, the company repurchased 223,807 shares for $45.0 million and reduced shares outstanding by 1%.

The company repaid the remaining $20.0 million balance of the revolving credit facility during the quarter. Net debt was $19.2 million, or 0.1x EBITDA, at December 31, 2023.

Conference Call and Investor Presentation

Management will host an investor conference call and webcast on Friday, February 2, 2024, at 10 a.m. Eastern to discuss these financial results and related matters. The presentation that will accompany the conference call is available in the Investor Relations section of virtus.com. A replay of the call will be available in the Investor Relations section for at least one year.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

 

U.S. GAAP Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

 

Three Months Ended

 

 

 

Three

Months

Ended

 

 

 

Twelve Months Ended

 

 

 

12/31/2023

 

12/31/2022

 

Change

 

9/30/2023

 

Change

 

12/31/2023

 

12/31/2022

 

Change

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

$

182,149

 

 

$

163,648

 

 

11

%

 

$

184,869

 

 

(1

%)

 

$

711,475

 

 

$

728,339

 

 

(2

%)

Distribution and service fees

 

13,535

 

 

 

14,606

 

 

(7

%)

 

 

14,333

 

 

(6

%)

 

 

56,153

 

 

 

67,518

 

 

(17

%)

Administration and shareholder service fees

 

18,189

 

 

 

18,973

 

 

(4

%)

 

 

19,069

 

 

(5

%)

 

 

73,857

 

 

 

85,862

 

 

(14

%)

Other income and fees

 

714

 

 

 

1,144

 

 

(38

%)

 

 

1,000

 

 

(29

%)

 

 

3,783

 

 

 

4,660

 

 

(19

%)

Total revenues

 

214,587

 

 

 

198,371

 

 

8

%

 

 

219,271

 

 

(2

%)

 

 

845,268

 

 

 

886,379

 

 

(5

%)

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employment expenses

 

99,847

 

 

 

87,676

 

 

14

%

 

 

101,587

 

 

(2

%)

 

 

404,742

 

 

 

371,259

 

 

9

%

Distribution and other asset-based expenses

 

23,470

 

 

 

24,365

 

 

(4

%)

 

 

24,157

 

 

(3

%)

 

 

96,802

 

 

 

112,612

 

 

(14

%)

Other operating expenses

 

31,164

 

 

 

31,811

 

 

(2

%)

 

 

30,494

 

 

2

%

 

 

125,871

 

 

 

126,178

 

 

%

Operating expenses of consolidated investment products

 

2,611

 

 

 

2,481

 

 

5

%

 

 

553

 

 

372

%

 

 

4,224

 

 

 

4,408

 

 

(4

%)

Restructuring expense

 

133

 

 

 

 

 

N/M

 

 

691

 

 

(81

%)

 

 

824

 

 

 

4,015

 

 

(79

%)

Change in fair value of contingent consideration

 

1,290

 

 

 

5,120

 

 

(75

%)

 

 

 

 

N/M

 

 

(5,510

)

 

 

8,020

 

 

N/M

Depreciation expense

 

1,670

 

 

 

1,088

 

 

53

%

 

 

1,504

 

 

11

%

 

 

5,804

 

 

 

3,923

 

 

48

%

Amortization expense

 

15,446

 

 

 

14,609

 

 

6

%

 

 

15,382

 

 

%

 

 

61,027

 

 

 

58,504

 

 

4

%

Total operating expenses

 

175,631

 

 

 

167,150

 

 

5

%

 

 

174,368

 

 

1

%

 

 

693,784

 

 

 

688,919

 

 

1

%

Operating Income (Loss)

 

38,956

 

 

 

31,221

 

 

25

%

 

 

44,903

 

 

(13

%)

 

 

151,484

 

 

 

197,460

 

 

(23

%)

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized gain (loss) on investments, net

 

4,056

 

 

 

3,529

 

 

15

%

 

 

(1,918

)

 

N/M

 

 

6,525

 

 

 

(12,489

)

 

N/M

Realized and unrealized gain (loss) of consolidated investment products, net

 

449

 

 

 

4,147

 

 

(89

%)

 

 

(1,013

)

 

N/M

 

 

(2,404

)

 

 

(39,296

)

 

(94

%)

Other income (expense), net

 

622

 

 

 

(352

)

 

N/M

 

 

128

 

 

386

%

 

 

(440

)

 

 

(153

)

 

188

%

Total other income (expense), net

 

5,127

 

 

 

7,324

 

 

(30

%)

 

 

(2,803

)

 

N/M

 

 

3,681

 

 

 

(51,938

)

 

N/M

Interest Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(5,987

)

 

 

(4,512

)

 

33

%

 

 

(6,222

)

 

(4

%)

 

 

(23,431

)

 

 

(13,173

)

 

78

%

Interest and dividend income

 

3,673

 

 

 

2,578

 

 

42

%

 

 

2,872

 

 

28

%

 

 

12,458

 

 

 

4,448

 

 

180

%

Interest and dividend income of investments of consolidated investment products

 

53,206

 

 

 

35,889

 

 

48

%

 

 

49,803

 

 

7

%

 

 

197,707

 

 

 

107,325

 

 

84

%

Interest expense of consolidated investment products

 

(43,182

)

 

 

(33,374

)

 

29

%

 

 

(38,218

)

 

13

%

 

 

(155,335

)

 

 

(80,234

)

 

94

%

Total interest income (expense), net

 

7,710

 

 

 

581

 

 

N/M

 

 

8,235

 

 

(6

%)

 

 

31,399

 

 

 

18,366

 

 

71

%

Income (Loss) Before Income Taxes

 

51,793

 

 

 

39,126

 

 

32

%

 

 

50,335

 

 

3

%

 

 

186,564

 

 

 

163,888

 

 

14

%

Income tax expense (benefit)

 

13,294

 

 

 

13,291

 

 

%

 

 

12,181

 

 

9

%

 

 

45,088

 

 

 

57,260

 

 

(21

%)

Net Income (Loss)

 

38,499

 

 

 

25,835

 

 

49

%

 

 

38,154

 

 

1

%

 

 

141,476

 

 

 

106,628

 

 

33

%

Noncontrolling interests

 

(7,665

)

 

 

9,565

 

 

N/M

 

 

(7,248

)

 

6

%

 

 

(10,855

)

 

 

10,913

 

 

N/M

Net Income (Loss) Attributable to Virtus Investment Partners, Inc.

$

30,834

 

 

$

35,400

 

 

(13

%)

 

$

30,906

 

 

%

 

$

130,621

 

 

$

117,541

 

 

11

%

Earnings (Loss) Per Share – Basic

$

4.30

 

 

$

4.87

 

 

(12

%)

 

$

4.26

 

 

1

%

 

$

18.02

 

 

$

15.90

 

 

13

%

Earnings (Loss) Per Share – Diluted

$

4.21

 

 

$

4.77

 

 

(12

%)

 

$

4.19

 

 

%

 

$

17.71

 

 

$

15.50

 

 

14

%

Cash Dividends Declared Per Common Share

$

1.90

 

 

$

1.65

 

 

15

%

 

$

1.90

 

 

%

 

$

7.10

 

 

$

6.30

 

 

13

%

Weighted Average Shares Outstanding – Basic

 

7,178

 

 

 

7,262

 

 

(1

%)

 

 

7,258

 

 

(1

%)

 

 

7,249

 

 

 

7,391

 

 

(2

%)

Weighted Average Shares Outstanding – Diluted

 

7,320

 

 

 

7,419

 

 

(1

%)

 

 

7,379

 

 

(1

%)

 

 

7,375

 

 

 

7,582

 

 

(3

%)

 

N/M – Not Meaningful

 

Assets Under Management – Product and Asset Class

(in millions)

 

 

Three Months Ended

 

12/31/2022

 

3/31/2023

 

6/30/2023

 

9/30/2023

 

12/31/2023

By Product (period end):

 

 

 

 

 

 

 

 

 

Open-End Funds (1)

$

53,000

 

$

53,865

 

$

56,828

 

$

54,145

 

$

56,062

Closed-End Funds

 

10,361

 

 

10,358

 

 

10,166

 

 

9,472

 

 

10,026

Retail Separate Accounts

 

35,352

 

 

37,397

 

 

38,992

 

 

38,665

 

 

43,202

Institutional Accounts (2)

 

50,663

 

 

53,229

 

 

62,330

 

 

60,257

 

 

62,969

Total

$

149,376

 

$

154,849

 

$

168,316

 

$

162,539

 

$

172,259

 

 

 

 

 

 

 

 

 

 

By Product (average) (3)

 

 

 

 

 

 

 

 

 

Open-End Funds (1)

$

54,870

 

$

54,141

 

$

56,120

 

$

56,511

 

$

54,132

Closed-End Funds

 

10,389

 

 

10,424

 

 

10,224

 

 

10,001

 

 

9,591

Retail Separate Accounts

 

33,381

 

 

35,352

 

 

37,397

 

 

38,992

 

 

38,665

Institutional Accounts (2)

 

49,981

 

 

52,444

 

 

59,248

 

 

62,368

 

 

60,319

Total

$

148,621

 

$

152,361

 

$

162,989

 

$

167,872

 

$

162,707

 

 

 

 

 

 

 

 

 

 

By Asset Class (period end):

 

 

 

 

 

 

 

 

 

Equity

$

81,894

 

$

87,511

 

$

91,211

 

$

87,984

 

$

96,703

Fixed Income

 

36,903

 

 

36,596

 

 

38,361

 

 

37,352

 

 

37,192

Multi-Asset (4)

 

19,937

 

 

20,597

 

 

20,914

 

 

19,937

 

 

21,411

Alternatives (5)

 

10,642

 

 

10,145

 

 

17,830

 

 

17,266

 

 

16,953

Total

$

149,376

 

$

154,849

 

$

168,316

 

$

162,539

 

$

172,259

 

Assets Under Management – Average Management Fees Earned (6)

(in basis points)

 

 

Three Months Ended

 

12/31/2022

 

3/31/2023

 

6/30/2023

 

9/30/2023

 

12/31/2023

By Product:

 

 

 

 

 

 

 

 

 

Open-End Funds (1)

47.2

 

47.6

 

49.3

 

51.1

 

49.7

Closed-End Funds

57.1

 

57.1

 

57.6

 

58.2

 

58.4

Retail Separate Accounts

42.6

 

44.2

 

44.1

 

43.3

 

43.3

Institutional Accounts (2)(7)

32.0

 

31.8

 

31.6

 

30.3

 

33.2

All Products (7)

41.7

 

42.0

 

42.2

 

42.0

 

42.6

(1)

 

Represents assets under management of U.S. retail funds, global funds, exchange traded funds, and variable insurance funds

(2)

 

Represents assets under management of institutional separate and commingled accounts including structured products

(3)

 

Averages are calculated as follows:

   

– Funds – average daily or weekly balances

   

– Retail Separate Accounts – prior-quarter ending balance

   

– Institutional Accounts – average of month-end balances in quarter

(4)

 

Consists of strategies and client accounts with substantial holdings in at least two of the following asset classes: equity, fixed income, and alternatives

(5)

 

Consists of managed futures, event-driven, real estate securities, infrastructure, long/short, and other strategies

(6)

 

Represents investment management fees, as adjusted, divided by average assets. Investment management fees, as adjusted, exclude the impact of consolidated investment products and are net of revenue-related adjustments. Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed through to third-party client intermediaries for services to investors in sponsored investment products

(7)

 

Includes performance-related fees, in basis points, earned during the three months ended as follows:

   

 

12/31/2022

 

3/31/2023

 

6/30/2023

 

9/30/2023

 

12/31/2023

 

   

Institutional Accounts

0.4

 

0.2

 

0.2

 

0.4

 

2.2

 

   

All Products

0.1

 

0.1

 

0.1

 

0.1

 

0.8

 

 

Assets Under Management – Asset Flows by Product

(in millions)

 

 

Three Months Ended

 

Twelve Months Ended

 

12/31/2022

 

3/31/2023

 

6/30/2023

 

9/30/2023

 

12/31/2023

 

12/31/2022

 

12/31/2023

Open-End Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

54,454

 

 

$

53,000

 

 

$

53,865

 

 

$

56,828

 

 

$

54,145

 

 

$

78,706

 

 

$

53,000

 

Inflows

 

3,029

 

 

 

3,011

 

 

 

2,550

 

 

 

2,687

 

 

 

2,940

 

 

 

13,985

 

 

 

11,188

 

Outflows

 

(6,839

)

 

 

(4,792

)

 

 

(4,692

)

 

 

(4,137

)

 

 

(4,905

)

 

 

(28,549

)

 

 

(18,526

)

Net flows

 

(3,810

)

 

 

(1,781

)

 

 

(2,142

)

 

 

(1,450

)

 

 

(1,965

)

 

 

(14,564

)

 

 

(7,338

)

Market performance

 

2,806

 

 

 

2,771

 

 

 

2,163

 

 

 

(1,034

)

 

 

4,260

 

 

 

(15,113

)

 

 

8,160

 

Other (2)

 

(450

)

 

 

(125

)

 

 

2,942

 

 

 

(199

)

 

 

(378

)

 

 

3,971

 

 

 

2,240

 

Ending balance

$

53,000

 

 

$

53,865

 

 

$

56,828

 

 

$

54,145

 

 

$

56,062

 

 

$

53,000

 

 

$

56,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Closed-End Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

10,146

 

 

$

10,361

 

 

$

10,358

 

 

$

10,166

 

 

$

9,472

 

 

$

12,068

 

 

$

10,361

 

Inflows

 

2

 

 

 

4

 

 

 

20

 

 

 

 

 

 

 

 

 

191

 

 

 

24

 

Outflows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net flows

 

2

 

 

 

4

 

 

 

20

 

 

 

 

 

 

 

 

 

191

 

 

 

24

 

Market performance

 

631

 

 

 

205

 

 

 

(1

)

 

 

(504

)

 

 

753

 

 

 

(1,346

)

 

 

453

 

Other (2)

 

(418

)

 

 

(212

)

 

 

(211

)

 

 

(190

)

 

 

(199

)

 

 

(552

)

 

 

(812

)

Ending balance

$

10,361

 

 

$

10,358

 

 

$

10,166

 

 

$

9,472

 

 

$

10,026

 

 

$

10,361

 

 

$

10,026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail Separate Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

33,381

 

 

$

35,352

 

 

$

37,397

 

 

$

38,992

 

 

$

38,665

 

 

$

44,538

 

 

$

35,352

 

Inflows

 

1,221

 

 

 

1,367

 

 

 

1,346

 

 

 

1,849

 

 

 

2,118

 

 

 

5,710

 

 

 

6,680

 

Outflows

 

(1,651

)

 

 

(1,288

)

 

 

(1,434

)

 

 

(1,524

)

 

 

(1,726

)

 

 

(6,440

)

 

 

(5,972

)

Net flows

 

(430

)

 

 

79

 

 

 

(88

)

 

 

325

 

 

 

392

 

 

 

(730

)

 

 

708

 

Market performance

 

2,401

 

 

 

1,966

 

 

 

1,683

 

 

 

(652

)

 

 

4,144

 

 

 

(8,456

)

 

 

7,141

 

Other (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Ending balance

$

35,352

 

 

$

37,397

 

 

$

38,992

 

 

$

38,665

 

 

$

43,202

 

 

$

35,352

 

 

$

43,202

 

Institutional Accounts (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

46,993

 

 

$

50,663

 

 

$

53,229

 

 

$

62,330

 

 

$

60,257

 

 

$

51,874

 

 

$

50,663

 

Inflows

 

2,999

 

 

 

1,852

 

 

 

3,660

 

 

 

1,274

 

 

 

1,179

 

 

 

10,407

 

 

 

7,965

 

Outflows

 

(2,162

)

 

 

(2,047

)

 

 

(1,478

)

 

 

(1,648

)

 

 

(3,406

)

 

 

(8,747

)

 

 

(8,579

)

Net flows

 

837

 

 

 

(195

)

 

 

2,182

 

 

 

(374

)

 

 

(2,227

)

 

 

1,660

 

 

 

(614

)

Market performance

 

2,976

 

 

 

2,906

 

 

 

2,440

 

 

 

(1,434

)

 

 

5,165

 

 

 

(12,168

)

 

 

9,077

 

Other (2)

 

(143

)

 

 

(145

)

 

 

4,479

 

 

 

(265

)

 

 

(226

)

 

 

9,297

 

 

 

3,843

 

Ending balance

$

50,663

 

 

$

53,229

 

 

$

62,330

 

 

$

60,257

 

 

$

62,969

 

 

$

50,663

 

 

$

62,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

144,974

 

 

$

149,376

 

 

$

154,849

 

 

$

168,316

 

 

$

162,539

 

 

$

187,186

 

 

$

149,376

 

Inflows

 

7,251

 

 

 

6,234

 

 

 

7,576

 

 

 

5,810

 

 

 

6,237

 

 

 

30,293

 

 

 

25,857

 

Outflows

 

(10,652

)

 

 

(8,127

)

 

 

(7,604

)

 

 

(7,309

)

 

 

(10,037

)

 

 

(43,736

)

 

 

(33,077

)

Net flows

 

(3,401

)

 

 

(1,893

)

 

 

(28

)

 

 

(1,499

)

 

 

(3,800

)

 

 

(13,443

)

 

 

(7,220

)

Market performance

 

8,814

 

 

 

7,848

 

 

 

6,285

 

 

 

(3,624

)

 

 

14,322

 

 

 

(37,083

)

 

 

24,831

 

Other (2)

 

(1,011

)

 

 

(482

)

 

 

7,210

 

 

 

(654

)

 

 

(802

)

 

 

12,716

 

 

 

5,272

 

Ending balance

$

149,376

 

 

$

154,849

 

 

$

168,316

 

 

$

162,539

 

 

$

172,259

 

 

$

149,376

 

 

$

172,259

 

(1)

 

Represents assets under management of U.S. retail funds, global funds, exchange traded funds, and variable insurance funds

(2)

 

Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from cash management strategies, and the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage

(3)

 

Represents assets under management of institutional separate and commingled accounts including structured products

Non-GAAP Information and Reconciliations

(in thousands except per share data)

The non-GAAP financial measures included in this release differ from financial measures determined in accordance with U.S. GAAP as a result of the reclassification of certain income statement items, as well as the exclusion of certain expenses and other items that are not reflective of the earnings generated from providing investment management and related services. Non-GAAP financial measures have material limitations and should not be viewed in isolation or as a substitute for U.S. GAAP measures.

The following are reconciliations and related notes of the most comparable U.S. GAAP measure to each non-GAAP measure:

 

Three Months Ended

Revenues

12/31/2023

 

12/31/2022

 

9/30/2023

Total revenues, GAAP

$

214,587

 

 

$

198,371

 

 

$

219,271

 

Consolidated investment products revenues (1)

 

2,258

 

 

 

2,264

 

 

 

2,337

 

Investment management fees (2)

 

(9,933

)

 

 

(9,758

)

 

 

(9,823

)

Distribution and service fees (2)

 

(13,537

)

 

 

(14,607

)

 

 

(14,334

)

Total revenues, as adjusted

$

193,375

 

 

$

176,270

 

 

$

197,451

 

Operating Expenses

 

 

 

 

 

Total operating expenses, GAAP

$

175,631

 

 

$

167,150

 

 

$

174,368

 

Consolidated investment products expenses (1)

 

(2,611

)

 

 

(2,481

)

 

 

(553

)

Distribution and other asset-based expenses (3)

 

(23,470

)

 

 

(24,365

)

 

 

(24,157

)

Amortization of intangible assets (4)

 

(15,446

)

 

 

(14,609

)

 

 

(15,382

)

Restructuring expense (5)

 

(133

)

 

 

 

 

 

(691

)

Deferred compensation and related investments (6)

 

(925

)

 

 

 

 

 

278

 

Acquisition and integration expenses (7)

 

(3,050

)

 

 

(6,175

)

 

 

(3,013

)

Other (8)

 

(472

)

 

 

637

 

 

 

(379

)

Total operating expenses, as adjusted

$

129,524

 

 

$

120,157

 

 

$

130,471

 

Operating Income (Loss)

 

 

 

 

 

Operating income (loss), GAAP

$

38,956

 

 

$

31,221

 

 

$

44,903

 

Consolidated investment products (earnings) losses (1)

 

4,869

 

 

 

4,745

 

 

 

2,890

 

Amortization of intangible assets (4)

 

15,446

 

 

 

14,609

 

 

 

15,382

 

Restructuring expense (5)

 

133

 

 

 

 

 

 

691

 

Deferred compensation and related investments (6)

 

925

 

 

 

 

 

 

(278

)

Acquisition and integration expenses (7)

 

3,050

 

 

 

6,175

 

 

 

3,013

 

Other (8)

 

472

 

 

 

(637

)

 

 

379

 

Operating income (loss), as adjusted

$

63,851

 

 

$

56,113

 

 

$

66,980

 

 

 

 

 

 

 

Operating margin, GAAP

 

18.2

%

 

 

15.7

%

 

 

20.5

%

Operating margin, as adjusted

 

33.0

%

 

 

31.8

%

 

 

33.9

%

 

Three Months Ended

Income (Loss) Before Taxes

12/31/2023

 

12/31/2022

 

9/30/2023

Income (loss) before taxes, GAAP

$

51,793

 

 

$

39,126

 

 

$

50,335

 

Consolidated investment products (earnings) losses (1)

 

(1,316

)

 

 

(441

)

 

 

(429

)

Amortization of intangible assets (4)

 

15,446

 

 

 

14,609

 

 

 

15,382

 

Restructuring expense (5)

 

133

 

 

 

 

 

 

691

 

Deferred compensation and related investments (6)

 

(783

)

 

 

 

 

 

212

 

Acquisition and integration expenses (7)

 

3,050

 

 

 

6,175

 

 

 

3,013

 

Other (8)

 

472

 

 

 

(637

)

 

 

379

 

Seed capital and CLO investments (gains) losses (9)

 

(5,078

)

 

 

(3,322

)

 

 

(3,146

)

Income (loss) before taxes, as adjusted

$

63,717

 

 

$

55,510

 

 

$

66,437

 

Contacts

Investor Relations Contact
Sean Rourke

(860) 263-4709

[email protected]

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