What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-09 · 204 added, 218 removed, 793 unchanged (35% of the section changed)

3 unchanged sentences

(in millions, except for share and per share data, unaudited)

September 30,

2021 December 31,

40 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

17 unchanged sentences

Interest expense ( 6.2 ) ( 6.9 ) ( 18.7 ) ( 22.1 )

Loss on sale of subsidiary — — ( 1.3 ) —

Gain on sale of subsidiaries 34.6 7.2 33.3 7.2

Net consolidated Funds’ investment gains (losses) — 2.8 — ( 7.7 )

6 unchanged sentences

Net income 229.5 34.0 857.2 110.0

Net income attributable to non-controlling interests in consolidated Funds 54.6 35.0 68.0 24.5

Net income (loss) attributable to non-controlling interests in consolidated Funds — ( 3.2 ) 68.0 21.3

Net income attributable to controlling interests $ 229.5 $ 37.2 $ 789.2 $ 88.7

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Total other comprehensive income (loss) ( 0.3 ) 2.0 2.1 1.3

Comprehensive income attributable to non-controlling interests in consolidated Funds 54.6 35.0 68.0 24.5

Comprehensive income (loss) attributable to non-controlling interests in consolidated Funds — ( 3.2 ) 68.0 21.3

Total comprehensive income attributable to controlling interests $ 229.2 $ 39.2 $ 791.3 $ 90.0

2 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended June 30, 2021 and 2020

For the three months ended September 30, 2021 and 2020

($ in millions except share data, unaudited)

8 unchanged sentences

non-controlling

March 31, 2020 82.5 $ 0.1 $ 516.2 $ ( 428.3 ) $ ( 19.1 ) $ 68.9 $ 1.3 $ 49.1 $ 119.3 $ 74.5 $ 193.8

June 30, 2020 80.1 $ 0.1 $ 500.6 $ ( 410.1 ) $ ( 18.2 ) $ 72.4 $ 1.4 $ 78.8 $ 152.6 $ 79.9 $ 232.5

Issuance of common stock — — 0.2 — — 0.2 — — 0.2 — 0.2

Repurchase of common stock ( 2.5 ) — ( 16.1 ) — — ( 16.1 ) — — ( 16.1 ) — ( 16.1 )

Capital contributions (redemptions) — — — — — — — 0.9 0.9 ( 0.8 ) 0.1

Capital contributions — — — — — — — 0.3 0.3 129.7 130.0

Equity-based compensation — — 0.4 — — 0.4 — — 0.4 — 0.4

3 unchanged sentences

— — — — 0.6 0.6 — — 0.6 — 0.6

Other changes in non-controlling interests

— — — — — — 0.1 — 0.1 — 0.1

Net de-consolidation of Funds — — — — — — — — — ( 126.8 ) ( 126.8 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 37.2 — 37.2 — ( 6.1 ) 31.1 2.8 33.9

September 30, 2020 80.1 $ 0.1 $ 501.2 $ ( 373.7 ) $ ( 16.2 ) $ 111.4 $ 1.4 $ 73.0 $ 185.8 $ 85.6 $ 271.4

June 30, 2021 79.4 $ 0.1 $ 493.4 $ 381.6 $ ( 11.2 ) $ 863.9 $ — $ — $ 863.9 $ — $ 863.9

March 31, 2021 79.4 $ 0.1 $ 492.8 $ ( 150.3 ) $ ( 11.9 ) $ 330.7 $ 5.6 $ 93.7 $ 430.0 $ — $ 430.0

Issuance of common stock 0.4 — 0.1 — — 0.1 — — 0.1 — 0.1

Capital contributions — — — — — — — 29.7 29.7 — 29.7

Equity-based compensation — — 0.4 — — 0.4 — — 0.4 — 0.4

3 unchanged sentences

— — — — 0.6 0.6 — — 0.6 — 0.6

Other changes in non-controlling interests

— — — — — — ( 5.6 ) — ( 5.6 ) — ( 5.6 )

Net de-consolidation of Funds — — — — — — ( 178.0 ) ( 178.0 ) — ( 178.0 )

Withholding tax related to stock option exercise — — ( 8.9 ) — — ( 8.9 ) — — ( 8.9 ) — ( 8.9 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 229.5 — 229.5 — — 229.5 — 229.5

June 30, 2021 79.4 $ 0.1 $ 493.4 $ 381.6 $ ( 11.2 ) $ 863.9 $ — $ — $ 863.9 $ — $ 863.9

September 30, 2021 79.8 $ 0.1 $ 485.0 $ 610.4 $ ( 11.5 ) $ 1,084.0 $ — $ — $ 1,084.0 $ — $ 1,084.0

See Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the six months ended June 30, 2021 and 2020

For the nine months ended September 30, 2021 and 2020

($ in millions except share data, unaudited)

20 unchanged sentences

— — — — — — 0.1 — 0.1 — 0.1

Net de-consolidation of Funds — — — — — — — — — ( 126.8 ) ( 126.8 )

Dividends ($ 0.12 per share)

1 unchanged sentence

Net income (loss) — — — 88.7 — 88.7 — 22.8 111.5 ( 1.6 ) 109.9

June 30, 2020 80.1 $ 0.1 $ 500.6 $ ( 410.1 ) $ ( 18.2 ) $ 72.4 $ 1.4 $ 78.8 $ 152.6 $ 79.9 $ 232.5

September 30, 2020 80.1 $ 0.1 $ 501.2 $ ( 373.7 ) $ ( 16.2 ) $ 111.4 $ 1.4 $ 73.0 $ 185.8 $ 85.6 $ 271.4

December 31, 2020 79.4 $ 0.1 $ 492.4 $ ( 176.5 ) $ ( 13.6 ) $ 302.4 $ 1.7 $ 80.3 $ 384.4 $ — $ 384.4

6 unchanged sentences

— — — — 1.8 1.8 — — 1.8 — 1.8

Withholding tax related to stock option exercise — — ( 8.9 ) — — ( 8.9 ) — — ( 8.9 ) — ( 8.9 )

Other changes in non-controlling interests

3 unchanged sentences

— — — ( 2.3 ) — ( 2.3 ) — — ( 2.3 ) — ( 2.3 )

Net income (loss) — — — 559.7 — 559.7 — 68.0 627.7 — 627.7

June 30, 2021 79.4 $ 0.1 $ 493.4 $ 381.6 $ ( 11.2 ) $ 863.9 $ — $ — $ 863.9 $ — $ 863.9

Net income — — — 789.2 — 789.2 — 68.0 857.2 — 857.2

September 30, 2021 79.8 $ 0.1 $ 485.0 $ 610.4 $ ( 11.5 ) $ 1,084.0 $ — $ — $ 1,084.0 $ — $ 1,084.0

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

Gain on sale of discontinued operations, net of tax ( 694.6 ) —

Loss on sale of subsidiary 1.3 —

Gain on sale of subsidiaries ( 33.3 ) ( 7.2 )

Depreciation and other amortization 16.7 14.8

8 unchanged sentences

(Increase) decrease in investment advisory fees receivable ( 33.7 ) 24.5

(Increase) decrease in other receivables, prepayments, deposits and other assets 9.7 ( 15.4 )

Increase in other receivables, prepayments, deposits and other assets ( 0.1 ) ( 3.4 )

(Decrease) in accrued incentive compensation, operating lease liabilities and other liabilities ( 3.5 ) ( 27.5 )

7 unchanged sentences

(Increase) decrease in receivables and other assets — ( 28.7 )

Increase (decrease) in accounts payable and other liabilities — ( 2.2 )

Increase in accounts payable and other liabilities — 3.0

Net cash flows from operating activities of continuing operations of consolidated Funds — ( 52.6 )

5 unchanged sentences

Cash proceeds from sale of discontinued operations 950.2 —

Cash proceeds from sale of subsidiaries 46.2 —

Purchase of investment securities ( 2.3 ) ( 12.6 )

Sale of investment securities 26.0 62.9

Cash flows from investing activities of consolidated Funds

Deconsolidation of Funds — ( 86.0 )

Net cash flows from investing activities of continuing operations 1,009.0 ( 56.9 )

3 unchanged sentences

(in millions, unaudited)

Six Months Ended

Nine Months Ended

September 30,

Net cash flows from investing activities of discontinued operations 3.1 ( 3.2 )

4 unchanged sentences

Payment for debt issuance costs ( 0.4 ) —

Proceeds from stock issuance 0.2 —

Payment to OM plc for co-investment redemptions ( 1.5 ) ( 0.3 )

2 unchanged sentences

Repurchases of common stock — ( 35.3 )

Withholding tax payments related to stock option exercise ( 8.9 ) —

Cash flows from financing activities of consolidated Funds

14 unchanged sentences

Income taxes paid 114.0 4.1

Supplemental disclosure of non-cash investing and financing transactions:

Payable for securities purchased by a consolidated Fund $ — $ 0.5

See Notes to Condensed Consolidated Financial Statements

6 unchanged sentences

The Company historically held interests in a group of investment management firms (the “Affiliates”) individually headquartered in the United States.

The Company has completed the disposition of certain Affiliates and currently operates the business through its Quant & Solutions segment.

The Company’s Affiliates are organized as limited liability companies.

The Company completed the disposition of certain Affiliates and currently operates the business through one Affiliate, Acadian Asset Management LLC (“Acadian”), within its Quant & Solutions segment.

The Company’s Affiliate is organized as a limited liability company.

Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products.

The Company generally utilizes a profit-sharing model in structuring its compensation and ownership arrangements with its Affiliates.

The Affiliates’ variable compensation is generally based on each firm’s profitability.

The Company utilizes a profit-sharing model in structuring its compensation and ownership with its Affiliate.

Variable compensation is based on the firm’s profitability.

BSIG and Affiliate key employees share in profits after variable compensation according to their respective ownership interests.

3 unchanged sentences

and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies.

This segment is comprised of the Company’s interest in Acadian Asset Management LLC (“Acadian”).

This segment is comprised of the Company’s interest in Acadian.

Campbell Global, LLC (“Campbell Global”), Investment Counselors of Maryland (“ICM”) and the corporate head office are included within the Other (1)(2) category.

8 unchanged sentences

On May 9, 2021, the Company entered into an agreement to sell all of the Company’s interests in TSW.

As a result of this transaction, TSW has been reclassified to discontinued operations and the Liquid Alpha no longer constitutes a reportable segment of the Company.

As a result of this transaction, TSW has been reclassified to discontinued operations and the Liquid Alpha segment no longer constitutes a reportable segment of the Company.

The reportable segments for all periods presented have been recast to reflect the reporting of TSW within discontinued operations.

Also, the ICM operating segment has been reclassified to “Other” within the Company’s segment reporting for the three and six months ended June 30, 2021.

Also, the ICM operating segment has been reclassified to “Other” within the Company’s segment reporting for the three and nine months ended September 30, 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations and Note 15, Segments for further discussion.

Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection, and investment group, listed on the London Stock Exchange.

On October 15, 2014, the

BrightSphere Investment Group Inc.

1 unchanged sentence

1) Organization and Description of the Business (cont.)

Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection and investment group, listed on the London Stock Exchange.

On October 15, 2014, the Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended.

Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended.

Additionally, between the Offering and February 25, 2019, the Company, OM plc and/or HNA Capital U.S.

2 unchanged sentences

The remaining shares held by HNA were bought back by the Company in the first quarter of 2019.

For the three and six months ended June 30, 2021, the Company did no t repurchase any shares of common stock.

For the three months ended June 30, 2020, the Company repurchased 2,437,700 shares of common stock at an average price of $ 6.56 per share, or approximately $ 16 million in total, including commissions.

For the six months ended June 30, 2020, the Company repurchased 5,667,962 shares of common stock at an average price of $ 6.20 per share, or approximately $ 35.3 million in total, including commissions.

For the three and nine months ended September 30, 2021, the Company did no t repurchase any shares of common stock.

For the three months ended September 30, 2020, the Company did no t repurchase any shares of common stock.

For the nine months ended September 30, 2020, the Company repurchased 5,667,962 shares of common stock at an average price of $ 6.20 per share, or approximately $ 35.3 million in total, including commissions.

2) Basis of Presentation and Significant Accounting Policies

18 unchanged sentences

The divestiture of Landmark met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

As a result, the Company has reclassified the financial results of Landmark and consolidated Landmark Funds to income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and June 30, 2020.

The assets and liabilities of Landmark and consolidated Landmark Funds have been reflected as assets and liabilities held for sale in the Condensed Consolidated Balance Sheet as of December 31, 2020.

Cash flows from discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and June 30, 2020.

Cash flows from discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and September 30, 2020.

On May 9, 2021, the Company entered into a definitive agreement with Pendal Group Limited (“Pendal”), pursuant to which Pendal agreed to purchase all of the Company’s interests in TSW and the Company’s seed investments in TSW strategies.

1 unchanged sentence

The divestiture of TSW met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

As a result, the Company has reclassified the financial results of TSW to income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and June 30, 2020.

The assets and liabilities of TSW have been reflected as assets and liabilities held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2021 and December 31, 2020.

Cash flows from discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and June 30, 2020.

Cash flows from discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and September 30, 2020.

On June 21, 2021, the Company entered into a definitive agreement to sell all of the Company’s interests in Campbell Global and the Company’s co-investments in Campbell Global’s Funds.

The transaction is expected to close in the third quarter of 2021.

The pending divestiture of Campbell Global did not meet the discontinued operations criteria as it did not represent a strategic shift that has a major effect on the Company’s operations and financial results.

The assets and liabilities of Campbell Global and Campbell Global Funds have been reflected as assets and liabilities held for sale in the Condensed Consolidated Balance Sheet as of June 30, 2021.

The transaction closed on August 31, 2021.

The divestiture of Campbell Global did not meet the discontinued operations criteria as it did not represent a strategic shift that had a major effect on the Company’s operations and financial results.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for additional information.

10 unchanged sentences

The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

The three and six months ended June 30, 2021 were characterized by continued uncertainty due to the COVID-19 pandemic which could impact estimates and assumptions made by management.

The three and nine months ended September 30, 2021 were characterized by continued uncertainty due to the COVID-19 pandemic which could impact estimates and assumptions made by management.

Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

8 unchanged sentences

This ASU is effective as of March 12, 2020 through December 31, 2022.

The Company has not adopted any of the optional expedients or exceptions as of June 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period to determine the impact on its Condensed Consolidated Financial Statements and related disclosures.

The Company has not adopted any of the optional expedients or exceptions as of September 30, 2021, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period to determine the impact on its Condensed Consolidated Financial Statements and related disclosures.

The Company has considered all other newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the unaudited Condensed Consolidated Financial Statements, including those that have not yet been adopted.

6 unchanged sentences

On June 2, 2021, the Company completed the sale of all its interests in Landmark to Ares for cash consideration of $ 690.0 million, adjusted for customary closing adjustments.

The Company recognized a gain on disposal of discontinued operations of $ 509.2 million, net of tax of $ 176.6 million for the three and six months ended June 30, 2021.

The Company recognized a gain on disposal of discontinued operations of $ 509.2 million, net of tax of $ 176.6 million for the nine months ended September 30, 2021.

The divestiture of Landmark met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

The Company utilized $ 87.9 million of its deferred tax asset in connection with the sale of all its interests in Landmark.

The Company also redeemed co-investments of $ 31.5 million in Landmark’s funds as of June 2, 2021 upon consummation of the sale.

Thompson Siegel & Walmsley, LLC

On May 9, 2021, the Company entered into an agreement to sell all of the Company’s interests in TSW to Pendal for cash consideration totaling approximately $ 240 million, adjusted for customary closing adjustments.

The Company also agreed to redeem its seed investments in TSW strategies post-close for approximately $ 14 million, subject to adjustment for certain related cashflow.

The divestiture of TSW met the discontinued operations criteria as it represents a strategic shift that has a major effect on the Company’s operations and financial results.

On July 22, 2021, the Company completed the sale of TSW to Pendal.

On May 9, 2021, the Company entered into an agreement with Pendal to sell all of the Company’s interests in TSW and the Company’s seed investment in TSW strategies.

On July 22, 2021, the Company completed the sale of all its interests in TSW to Pendal for cash consideration of $ 240.0 million.

The Company recognized a gain on disposal of discontinued operations of $ 185.4 million net of tax of $ 74.0 million for the three and nine months ended September 30, 2021.

The divestiture of TSW met the discontinued operations criteria as it represented a strategic shift that has a major effect on the Company’s operations and financial results.

The Company utilized $ 6.9 million of its deferred tax asset in connection with the sale of all its interests in TSW.

Campbell Global

On June 21, 2021, the Company entered into a definitive agreement to sell all of the Company’s interests in Campbell Global, an Affiliate included within “Other” category, to J.P.

Morgan Asset Management.

The assets and liabilities of Campbell Global have been classified as held for sale as the criteria for held for sale accounting treatment was met.

The criteria for discontinued operations were not met for this pending divestiture.

The transaction is expected to close in the third quarter of 2021.

On June 21, 2021, the Company entered into a definitive agreement with J.P.

Morgan to sell all of the Company’s interests in Campbell and the Company’s co-investments in Campbell funds.

On August 31, 2021, the Company completed the sale of all its interests in Campbell to J.P.

Financial and operational results for Campbell are included within the “Other” category until August 31, 2021, the consummation of the sale.

The divestiture of Campbell did not meet the criteria for discontinued operations.

The Company also redeemed co-investments in Campbell’s funds as of August 31, 2021 upon consummation of the sale.

BrightSphere Investment Group Inc.

1 unchanged sentence

3) Divestitures, Held for Sale and Discontinued Operations (cont.)

The major classes of assets and liabilities held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 are as follows (in millions):

The major classes of assets and liabilities held for sale in the Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 are as follows (in millions):

September 30,

2021 December 31,

9 unchanged sentences

Assets of discontinued operations classified as held for sale (1)

$ 74.2 $ 326.8

Other assets held for sale (2)

6 unchanged sentences

Liabilities of discontinued operations classified as held for sale (1)

$ 92.4 $ 313.3

Other liabilities held for sale (3)

Liabilities held for sale $ 119.2 $ 313.3

(1) Includes assets and liabilities of discontinued operations of TSW that are classified as held for sale as of June 30, 2021 and of Landmark and TSW as of December 31, 2020.

(2) Includes assets of Campbell Global, the Company's co-investments in Campbell Global Funds and seed investments in TSW strategies as of June 30, 2021.

(3) Includes liabilities of Campbell Global as of June 30, 2021.

(1) Includes assets and liabilities of discontinued operations of Landmark and TSW as of December 31, 2020.

(2) Includes seed investments in TSW strategies as of September 30, 2021.

BrightSphere Investment Group Inc.

1 unchanged sentence

3) Divestitures, Held for Sale and Discontinued Operations (cont.)

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

8 unchanged sentences

Operating income (loss) 1.6 6.3 12.5 36.0

Investment gains of consolidated Funds 51.5 28.9 68.1 28.9

Investment income (loss) of consolidated Funds — ( 0.7 ) 68.1 28.2

Income from discontinued operations before taxes 1.6 5.6 80.6 64.2

Income tax expense (benefit) 1.0 ( 1.5 ) 3.7 8.6

Income tax expense 0.4 3.5 4.1 12.1

Income from discontinued operations, net of tax 1.2 2.1 76.5 52.1

2 unchanged sentences

Total discontinued operations 186.6 2.1 771.1 52.1

Income from discontinued operations attributable to non-controlling interests 54.6 28.9 68.0 29.0

Income (loss) from discontinued operations attributable to non-controlling interests — ( 6.1 ) 68.0 22.9

Net income from discontinued operations attributable to controlling interests $ 186.6 $ 8.2 $ 703.1 $ 29.2

3 unchanged sentences

The assets and liabilities of the consolidated Funds have been classified as held for sale as the criteria for held for sale and discontinued operations accounting treatment were met and are therefore presented separately in the Company’s Condensed Consolidated Balance Sheet as of December 31, 2020.

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $( 3.1 ) million and $ 0.0 million in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021, respectively.

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $ 0.0 million and $( 0.2 ) million in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2020, respectively.

The major classes of assets comprising the consolidated Funds classified as held for sale are as follows at June 30, 2021 and December 31, 2020 (in millions):

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $ 0.0 million and $ 0.0 million in the Company’s Condensed Consolidated Statement of Operations for each of the three and nine months ended September 30, 2021.

The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $ 5.4 million and $ 5.2 million in the Company’s Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2020, respectively.

The major classes of assets comprising the consolidated Funds classified as held for sale are as follows at September 30, 2021 and December 31, 2020 (in millions):

BrightSphere Investment Group Inc.

1 unchanged sentence

3) Divestitures, Held for Sale and Discontinued Operations (cont.)

September 30,

2021 December 31,

7 unchanged sentences

On February 6, 2021, the Company entered into a definitive agreement to sell all of the Company’s interests in ICM, an equity-accounted Affiliate within “Other” category.

The criteria for discontinued operations were not met for this divestiture.

On July 19, 2021, the Company completed the sale of all its interest in ICM to William Blair Investment Management for cash consideration totaling $ 18.5 million.

The criteria for discontinued operations were not met for this divestiture.

BrightSphere International Ltd.

3 unchanged sentences

(“Perpetual”).

The Company recognized a pre-tax loss on sale of subsidiary of $( 1.3 ) million within the Condensed Consolidated Statement of Operations for the six months ended June 30, 2021.

Barrow, Hanley, Mewhinney & Strauss LLC

On October 14, 2021 the Company received $ 15.8 million of cash proceeds from the sale of a previously disposed of Affiliate, Barrow, Hanley, Mewhinney & Strauss LLC.

4) Investments

Investments are comprised of the following as of the dates indicated (in millions):

September 30,

2021 December 31,

7 unchanged sentences

4) Investments (cont.)

Investment income is comprised of the following for the three and six months ended June 30 (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Investment income is comprised of the following for the three and nine months ended September 30 (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

3 unchanged sentences

$ 0.3 $ 3.9 $ 7.6 $ ( 3.2 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 (in millions):

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at September 30, 2021 (in millions):

Quoted prices

2 unchanged sentences

(Level III) Uncategorized Total value,

June 30, 2021

Assets of BSIG (1)

September 30, 2021

Investments in separate accounts (2)

10 unchanged sentences

(Level III) Uncategorized Total value December 31, 2020

Assets of BSIG (1)

Investments in separate accounts (2)

8 unchanged sentences

To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

The securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II.

4 unchanged sentences

In either case, such securities are classified as Level III.

The Company performs due diligence

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2) Investments in separate accounts of $ 9.3 million at June 30, 2021 consist of approximately 1 % of cash equivalents and 99 % of equity securities, fixed income securities, and other investments.

The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2) Investments in separate accounts of $ 4.2 million at September 30, 2021 consist of approximately 100 % of equity securities and other investments.

Investments in separate accounts of $ 21.3 million at December 31, 2020 consist of approximately 11 % of cash equivalents and 89 % of equity securities, fixed income securities, and other investments.

The Company values these using the published price of the underlying securities (classified as Level I) or quoted price supported by observable inputs as of the measurement date (classified as Level II).

(3) Investments related to long-term incentive compensation plans of $ 45.6 million and $ 48.0 million at June 30, 2021 and December 31, 2020, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

(3) Investments related to long-term incentive compensation plans of $ 45.6 million and $ 48.0 million at September 30, 2021 and December 31, 2020, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates.

Accordingly, the Company has classified these investments as Level I.

(4) The uncategorized amounts of $ 5.6 million and $ 16.2 million at June 30, 2021 and December 31, 2020, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

(4) The uncategorized amounts of $ 5.0 million and $ 16.2 million at September 30, 2021 and December 31, 2020, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets.

2 unchanged sentences

UCITS and other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $ 4.9 million and $ 6.2 million at June 30, 2021 and December 31, 2020, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year to ten years from June 30, 2021.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

The real estate investment Funds of $ 4.7 million and $ 6.2 million at September 30, 2021 and December 31, 2020, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds.

The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year to two years from September 30, 2021.

The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams.

2 unchanged sentences

In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions.

Investments in unconsolidated Funds categorized as Level III of $ 0.0 million and $ 2.5 million at June 30, 2021 and December 31, 2020, respectively, related to investments in Forestry Funds advised by an Affiliate and are valued by the general partner of those Funds.

Investments in unconsolidated Funds categorized as Level III of $ 0.0 million and $ 2.5 million at September 30, 2021 and December 31, 2020, respectively, related to investments in Forestry Funds advised by an Affiliate and are valued by the general partner of those Funds.

Determination of estimated fair value involves subjective judgment because the actual fair value can be determined only through negotiation between parties in a sale transaction, and amounts ultimately realized may vary significantly from the fair value presented.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

5) Fair Value Measurements (cont.)

The following table reconciles the opening balances of Level III financial assets to closing balances at the end of the period (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Investments in unconsolidated Funds 2021 2020 2021 2020

1 unchanged sentence

At beginning of the period $ — $ 3.0 $ 2.5 $ 3.0

Additions (redemptions) ( 0.1 ) — ( 0.1 ) —

Transfers to held for sale (see Note 3) ( 2.7 ) — ( 2.7 ) —

Redemptions — ( 0.3 ) ( 0.1 ) ( 0.3 )

Disposals — — ( 2.7 ) —

Total net fair value gains/losses recognized in net income

1 unchanged sentence

$ — $ 2.7 $ — $ 2.7

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and six months ended June 30, 2021 and 2020, respectively.

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and nine months ended September 30, 2021 and 2020, respectively.

BrightSphere Investment Group Inc.

4 unchanged sentences

Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own non-controlling interests in an Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to absorb more than an insignificant amount of the risks and rewards of the entity.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to more than an insignificant amount of the risks and rewards of the entity.

Typically, the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds.

1 unchanged sentence

The following table presents the assets of Funds that are VIEs and consolidated by the Company (in millions):

September 30,

2021 December 31,

15 unchanged sentences

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

September 30,

2021 December 31,

2 unchanged sentences

Equity interests on the Condensed Consolidated Balance Sheets $ 4.7 $ 14.3

$ 14.0 $ 14.3

Maximum risk of loss (1)

$ 19.3 $ 19.3

(1) Includes equity investments the Company has made or is required to make and any earned but uncollected management and incentive fees.

The Company does not record performance or incentive allocations until the respective measurement period has ended.

(2) Includes co-investment interests in Campbell Funds classified as “assets held for sale” as of June 30, 2021 in connection with the pending divestiture of Campbell Global.

See Note 3, Divestitures, Held for Sale and Discontinued Operations, in these Notes for additional information.

The Company does not record performance or incentive allocations until it is probable that a significant reversal will not occur.

BrightSphere Investment Group Inc.

2 unchanged sentences

The Company’s borrowings and long-term debt was comprised of the following as of the dates indicated (in millions):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in millions) Carrying Value Fair Value Fair Value Level Carrying Value Fair Value Fair Value Level

18 unchanged sentences

The Acadian Credit Agreement has a maturity date of August 22, 2022.

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at either the per annum rate equal to (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5 % and (iii) the one month Adjusted LIBOR Rate plus 1.0 %, plus, in each case an additional amount based on its credit rating or (b) the London interbank offered rate for a period, at the Company’s election equal to one, three or six months plus an additional amount ranging from 1.5 % to 2.0 %, with such additional amount based on Acadian’s Leverage Ratio (as defined

BrightSphere Investment Group Inc.

1 unchanged sentence

7) Borrowings and Debt (cont.)

amount ranging from 1.5 % to 2.0 %, with such additional amount based on Acadian’s Leverage Ratio (as defined below).

In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25 % to 0.375 %, with such amount based on Acadian’s Leverage Ratio.

Under the Acadian Credit Agreement, the ratio of Acadian’s third-party borrowings to Acadian’s trailing twelve months Adjusted EBITDA, as defined by the Acadian Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5 x and the Acadian interest coverage ratio must not be less than 4.0 x.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

The Company has operating leases for corporate offices, data centers, vehicles, and certain equipment.

The operating leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

The following table summarizes information about the Company’s operating leases for the three and six months ended June 30, (in millions):

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes information about the Company’s operating leases for the three and nine months ended September 30, (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

In determining the incremental borrowing rate, the Company considered the interest rate yield for the specific interest rate environment and the Company’s credit spread at the inception of the lease.

For the six months ended June 30, 2021 and 2020, the weighted average remaining lease term was 11.7 years and 12.4 years, respectively, and the weighted average discount rate was 3.35 % and 3.34 %, respectively.

For the nine months ended September 30, 2021 and 2020, the weighted average remaining lease term was 11.6 years and 12.3 years, respectively, and the weighted average discount rate was 3.34 % and 3.34 %, respectively.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

8) Leases (cont.)

Maturities of operating lease liabilities were as follows (in millions):

1 unchanged sentence

Year Ending December 31,

2021 (excluding the six months ended June 30, 2021)

2021 (excluding the nine months ended September 30, 2021)

Thereafter 64.0

4 unchanged sentences

9) Goodwill and Intangible Assets

In connection with the divestiture of Landmark, the Company reclassified $ 148.1 million of goodwill to “Assets held for sale” in the Condensed Consolidated Balance Sheet as of December 31, 2020.

The Landmark divestiture was consummated on June 2, 2021.

In connection with the pending divestiture of TSW, the Company reclassified $ 13.7 million of goodwill to “Assets held for sale” in the Condensed Consolidated Balance Sheet as of June 30, 2021 and December 31, 2020.

In connection with the divestitures of Landmark and TSW, the Company disposed of goodwill of $ 148.1 million and $ 13.7 million respectively, during the nine months ended September 30, 2021.

The Landmark divestiture was consummated on June 2, 2021 and the TSW divestiture was consummated on July 22, 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations, in these Notes for additional information.

1 unchanged sentence

Operational commitments

The Company had unfunded commitments to invest up to approximately $ 4 million in co-investments at Campbell as of June 30, 2021.

The Company had unfunded commitments to invest up to approximately $ 1 million in co-investments at a former Affiliate as of September 30, 2021.

These commitments will be funded as required through the end of the respective investment periods ranging through fiscal 2022.

On June 21, 2021, the Company announced the divestiture of all of the Company’s interests in Campbell.

The pending divestiture of Campbell met the held for sale criteria.

The commitments will be funded as required through the disposition date, which is expected to occur in the third quarter of 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for additional information.

On March 30, 2021, the Company announced the divestiture of all of the Company’s interest in Landmark and funded its commitments as required through the disposition, which consummated on June 2, 2021.

As a result of the disposition, the Company no longer had any unfunded commitments to Landmark as of June 30, 2021.

During 2021, the Company divested of all of its interests in Landmark and Campbell and funded its commitments as required through the transaction dates.

As a result of these dispositions, the Company no longer had any unfunded commitments to Landmark or Campbell as of September 30, 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for additional information.

4 unchanged sentences

This guaranty expires in 2022.

There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2021 related to this guaranty.

There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of September 30, 2021 related to this guaranty.

The Company and its Affiliates are subject to claims, legal proceedings, and other contingencies in the ordinary course of their business activities.

2 unchanged sentences

If an insurance claim or other indemnification for a litigation accrual is available to the Company, the associated gain will not be recognized until all contingencies related to the gain have been resolved.

As of June 30, 2021, there were no material accruals for claims, legal proceedings or other contingencies.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

10) Commitments and Contingencies (cont.)

As of September 30, 2021, there were no material accruals for claims, legal proceedings, or other contingencies.

Indemnifications

1 unchanged sentence

The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

10) Commitments and Contingencies (cont.)

Foreign tax contingency

3 unchanged sentences

However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes.

At June 30, 2021, management of the Company has estimated the potential maximum exposure and concluded that it is not material.

No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at June 30, 2021.

At September 30, 2021, management of the Company has estimated the potential maximum exposure and concluded that it is not material.

No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at September 30, 2021.

Considerations of credit risk

4 unchanged sentences

The majority of the Company’s cash equivalents consists of money market funds.

At June 30, 2021, approximately $ 1.1 billion of the Company’s cash and cash equivalents were invested in money market funds.

At September 30, 2021, approximately $ 1.4 billion of the Company’s cash and cash equivalents were invested in money market funds.

Additionally, the Company holds insurance policies which cover historical and future tax benefits relating to certain of its deferred tax assets.

6 unchanged sentences

The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

20 unchanged sentences

Notes to Condensed Consolidated Financial Statements

11) Earnings Per Share (cont.)

Employee options to purchase 7,474,000 shares were not included in the computation of diluted EPS for the three and six months ended June 30, 2020 because the assumed proceeds from exercising such options exceed the average price of the shares of common stock for the period and, therefore, the options are deemed antidilutive.

Management fees

7 unchanged sentences

In instances where a customer reimburses the Company for a cost paid on the customer’s behalf, the Company is acting as a principal and the reimbursement is accrued on a gross basis at cost as the corresponding reimbursable expenses are incurred.

Revenue from expense reimbursements amounted to $ 1.2 million and $ 1.1 million for the three months ended June 30, 2021 and 2020, respectively.

Revenue from expense reimbursements amounted to $ 2.2 million and $ 2.2 million for the six months ended June 30, 2021 and 2020, respectively, and is recorded in other revenue in the Company’s Condensed Consolidated Statements of Operations.

Revenue from expense reimbursements amounted to $ 0.7 million and $ 1.1 million for the three months ended September 30, 2021 and 2020, respectively.

Revenue from expense reimbursements amounted to $ 2.9 million and $ 3.3 million for the nine months ended September 30, 2021 and 2020, respectively, and is recorded in other revenue in the Company’s Condensed Consolidated Statements of Operations.

Other revenue may also consist of other miscellaneous revenue, consisting primarily of administration and consulting services.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Revenue (cont.)

Disaggregation of management fee revenue

The geographic disaggregation of management fee revenue for the three and six months ended June 30 (in millions) are presented below:

Three Months Ended June 30, Six Months Ended June 30,

The geographic disaggregation of management fee revenue for the three and nine months ended September 30 (in millions) are presented below:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

7 unchanged sentences

Management fee revenue $ 111.4 $ 123.3 $ 326.8 $ 366.4

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Revenue (cont.)

(1) Prior to June 30, 2021, the Company had a Liquid Alpha reportable segment which was comprised of TSW and ICM.

On May 9, 2021, the Company entered into an agreement to sell all of the Company’s interests in TSW and completed the sale on July 22, 2021.

As a result of this transaction, TSW was reclassified to discontinued operations and the Liquid Alpha no longer constitutes a reportable segment of the Company.

The ICM operating segment was reclassified to “Other” within the Company’s segment reporting for the three and nine months ended September 30, 2021.

On July 19, 2021, the Company completed the sale of all its equity interests in ICM.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for further discussion and Note 15, Segments for further discussion.

(2) Prior to March 31, 2021, the Company had the Alternatives reportable segment which consisted of Landmark and Campbell Global operating segments.

On March 30, 2021, the Company entered into an agreement to sell of all of the Company’s interests in Landmark.

On March 30, 2021, the Company entered into an agreement to sell of all of the Company’s interests in Landmark and completed the sale on June 2, 2021.

As a result of this transaction, Landmark was reclassified to discontinued operations, and the Alternatives segment no longer constitutes a reportable segment of the Company.

The Campbell Global operating segment was reclassified to “Other” within the Company’s segment reporting.

On June 21, 2021 the Company entered into an agreement to sell all of our equity interests in Campbell Global.

On August 31, 2021 the Company sold all of its equity interests in Campbell Global.

See Note 3, Divestitures, Held for Sale and Discontinued Operations and Note 15, Segments for further discussion.

(2) Prior to June 30, 2021, the Company had a Liquid Alpha reportable segment which was comprised of TSW and ICM.

On February 6, 2021, the Company entered into an agreement to sell all of the Company’s interests in ICM, an equity-accounted Affiliate.

On May 9, 2021, the Company entered into an agreement to sell all of the Company’s interests in TSW.

As a result of this transaction, TSW was reclassified to discontinued operations and the Liquid Alpha no longer constitutes a reportable segment of the Company.

The ICM operating segment was reclassified to “Other” within the Company’s segment reporting for the three and six months ended June 30, 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for further discussion and Note 15, Segments for further discussion.

BrightSphere Investment Group Inc.

1 unchanged sentence

13) Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2021 and 2020 are as follows (in millions):

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended September 30, 2021 and 2020 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of March 31, 2021

Balance, as of June 30, 2021

$ 5.6 $ ( 16.8 ) $ ( 11.2 )

2 unchanged sentences

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income 0.1 0.6 0.7

Balance, as of June 30, 2021

Other comprehensive income (loss) ( 0.9 ) 0.6 ( 0.3 )

Balance, as of September 30, 2021

$ 4.7 $ ( 16.2 ) $ ( 11.5 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of March 31, 2020 $ 0.7 $ ( 19.8 ) $ ( 19.1 )

Balance, as of June 30, 2020 $ 1.0 $ ( 19.2 ) $ ( 18.2 )

Foreign currency translation adjustment 1.4 — 1.4

2 unchanged sentences

Other comprehensive income 1.4 0.6 2.0

Balance, as of June 30, 2020

Balance, as of September 30, 2020

$ 2.4 $ ( 18.6 ) $ ( 16.2 )

For each of the three months ended June 30, 2021 and 2020, the Company reclassified $ 0.8 million from accumulated other comprehensive income (loss) to interest expense on the Condensed Consolidated Statements of Operations.

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2021 and 2020 are as follows (in millions):

For each of the three months ended September 30, 2021 and 2020, the Company reclassified $ 0.8 million from accumulated other comprehensive income (loss) to interest expense on the Condensed Consolidated Statements of Operations.

The components of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2021 and 2020 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

4 unchanged sentences

Other comprehensive income 0.3 1.8 2.1

Balance, as of June 30, 2021

Balance, as of September 30, 2021

$ 4.7 $ ( 16.2 ) $ ( 11.5 )

8 unchanged sentences

Other comprehensive income (loss) ( 0.4 ) 1.7 1.3

Balance, as of June 30, 2020

Balance, as of September 30, 2020

$ 2.4 $ ( 18.6 ) $ ( 16.2 )

For the six months ended June 30, 2021 and 2020, the Company reclassified $ 1.6 million and $ 1.5 million, respectively, from accumulated other comprehensive income (loss) to interest expense on the Condensed Consolidated Statements of Operations.

For the nine months ended September 30, 2021 and 2020, the Company reclassified $ 2.4 million and $ 2.3 million, respectively, from accumulated other comprehensive income (loss) to interest expense on the Condensed Consolidated Statements of Operations.

14) Derivatives and Hedging

6 unchanged sentences

Refer to Note 7, Borrowings and Debt, for additional information on the debt issuances.

As of June 30, 2021, the balance recorded in accumulated other comprehensive income (loss) was $( 16.8 ) million, net of tax.

As of September 30, 2021, the balance recorded in accumulated other comprehensive income (loss) was $( 16.2 ) million, net of tax.

This balance will be reclassified to earnings through interest expense over the life of the issued debt.

The Company reclassified $ 0.8 million for each of the three months ended June 30, 2021 and 2020, respectively.

Amounts of $ 1.6 million and $ 1.5 million have been reclassified for the six months ended June 30, 2021.

The Company reclassified $ 0.8 million for each of the three months ended September 30, 2021 and 2020, respectively.

Amounts of $ 2.4 million and $ 2.3 million have been reclassified for the nine months ended September 30, 2021 and 2020, respectively.

During the next twelve months the Company expects to reclassify approximately $ 3.5 million to interest expense.

5 unchanged sentences

This segment is comprised of the Company’s interest in Acadian.

Campbell Global, ICM and the corporate head office are included within Other (1)(2) category.

The corporate head office is included within Other (1)(2) category.

The corporate head office expenses are not allocated to the Company’s business segment but the Chief Operating Decision Maker (“CODM”) does consider the cost structure of the corporate head office when evaluating the financial performance of the segment.

1 unchanged sentence

On March 30, 2021, the Company entered into an agreement to sell all of the Company’s interests in Landmark.

On June 2, 2021, the Company completed the sale of all the Company’s interests in Landmark.

As a result of this transaction, Landmark has been reclassified to discontinued operations, and the Alternatives segment no longer constitutes a reportable segment of the Company.

The reportable segments for all periods presented have been recast to reflect the reporting of Landmark within discontinued operations and the reclassification of Campbell Global to “Other” category.

On June 21, 2021, the Company entered into an agreement to sell all of the Company’s interests in Campbell Global.

On August 31, 2021, the Company completed the sale of all its interests in Campbell Global.

The financial results of Campbell Global are included in the “Other” category until August 30, 2021, the consummation of the sale.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for further discussion.

(2) Prior to June 30, 2021, the Company had a Liquid Alpha reportable segment which was comprised of TSW and ICM.

On February 6, 2021, the Company entered into an agreement to sell all of the Company’s interests in ICM, an equity-accounted Affiliate.

On May 9, 2021, the Company entered into an agreement to sell all of the Company’s interests in TSW.

On July 19, 2021, the Company completed the sale of all the Company’s interest in TSW.

As a result of this transaction, TSW has been reclassified to discontinued operations and Liquid Alpha no longer constitutes a reportable segment of the Company.

The ICM operating segment was reclassified to “Other” category within the Company’s segment reporting for the three and six months ended June 30, 2021.

The ICM operating segment was reclassified to “Other” category within the Company’s segment reporting for the three and nine months ended September 30, 2021.

On July 19, 2021 the Company completed the sale of all its interests in ICM, an equity-accounted Affiliate.

The financial results of ICM are included in the “Other” category until July 19, 2021, the consummation of the sale.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for further discussion.

9 unchanged sentences

ENI revenue includes management fees, performance fees and other revenue under U.S.

GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and the Company’s share of earnings from equity-accounted Affiliate.

ENI revenue is also adjusted to exclude the separate revenues recorded under U.S.

GAAP for certain Fund expenses reimbursed to our Affiliates.

GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and the Company’s share of earnings from equity-

BrightSphere Investment Group Inc.

1 unchanged sentence

15) Segments (cont.)

accounted Affiliate.

ENI revenue is also adjusted to exclude the separate revenues recorded under U.S.

GAAP for certain Fund expenses reimbursed to our Affiliates.

ENI operating expenses include compensation and benefits, general and administrative expense, and depreciation and amortization under U.S.

6 unchanged sentences

GAAP net income (loss):

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2021 (in millions):

Three Months Ended June 30, 2021

The following table presents the financial data for the Company’s segment for the three months ended September 30, 2021 (in millions):

Three Months Ended September 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

2 unchanged sentences

Earnings before variable compensation 71.2 ( 0.8 ) ( 9.6 ) 60.8

72.8 12.8 ( 13.6 ) 72.0

Variable compensation 23.5 3.5 0.1 (c) 27.1

ENI operating earnings (after variable comp) 47.7 ( 4.3 ) ( 9.7 ) 33.7

50.8 2.4 ( 13.9 ) 39.3

Affiliate key employee distributions 3.8 1.2 — 5.0

3.1 0.1 — 3.2

Earnings after Affiliate key employee distributions 43.9 ( 5.5 ) ( 9.7 ) 28.7

47.7 2.3 ( 13.9 ) 36.1

Net interest expense — ( 5.8 ) ( 0.4 ) (d) ( 6.2 )

Net investment income — — 0.3 (e) 0.3

Net income attributable to non-controlling interests in consolidated Funds

— — ( 54.6 ) (e) ( 54.6 )

Income tax (expense) benefit — ( 11.7 ) 1.8 (f) ( 9.9 )

Gain on sale of Affiliates — — 34.6 (e) 34.6

Income tax expense — ( 9.0 ) ( 5.5 ) (f) ( 14.5 )

Income from discontinued operations, net of tax — — 1.2 (g) 1.2

1 unchanged sentence

Economic net income $ 43.9 $ ( 20.3 ) $ 205.9 $ 229.5

$ 47.7 $ ( 14.8 ) $ 499.8 $ 532.7

The following table presents the financial data for the Company’s segments for the three months ended June 30, 2020 (in millions):

BrightSphere Investment Group Inc.

1 unchanged sentence

15) Segments (cont.)

Three Months Ended June 30, 2020

The following table presents the financial data for the Company’s segments for the three months ended September 30, 2020 (in millions):

Three Months Ended September 30, 2020

Quant & Solutions Liquid Alpha Other Reconciling Adjustments Total U.S.

2 unchanged sentences

Earnings before variable compensation 51.8 20.3 ( 4.3 ) ( 3.9 ) 63.9

47.8 19.1 ( 4.1 ) ( 0.5 ) 62.3

Variable compensation 18.0 8.4 1.4 0.1 (c) 27.9

ENI operating earnings (after variable comp) 33.8 11.9 ( 5.7 ) ( 4.0 ) 36.0

30.1 11.5 ( 5.6 ) ( 3.5 ) 32.5

Affiliate key employee distributions 0.8 0.8 0.2 — 1.8

1.3 1.1 0.2 — 2.6

Earnings after Affiliate key employee distributions 33.0 11.1 ( 5.9 ) ( 4.0 ) 34.2

28.8 10.4 ( 5.8 ) ( 3.5 ) 29.9

Net interest expense — — ( 5.3 ) ( 1.6 ) (d) ( 6.9 )

Net investment income — — — 6.7 (e) 6.7

Net income attributable to non-controlling interests in consolidated Funds

— — — ( 35.0 ) (e) ( 35.0 )

Gain on sale of Affiliate — — — 7.2 (e) 7.2

Net income attributable to non-controlling interests in consolidated Funds — — — 3.2 (e) 3.2

Income tax expense — — ( 9.0 ) ( 0.3 ) (f) ( 9.3 )

1 unchanged sentence

Economic net income $ 33.0 $ 11.1 $ ( 20.2 ) $ 13.3 $ 37.2

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2021 (in millions):

Six Months Ended June 30, 2021

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

15) Segments (cont.)

The following table presents the financial data for the Company’s segment for the nine months ended September 30, 2021 (in millions):

Nine Months Ended September 30, 2021

Quant & Solutions Other Reconciling Adjustments Total U.S.

2 unchanged sentences

Earnings before variable compensation 208.4 8.6 ( 26.4 ) 190.6

137.2 9.4 ( 16.8 ) 129.8

Variable compensation 68.1 14.8 0.9 (c) 83.8

ENI operating earnings (after variable comp) 140.3 ( 6.2 ) ( 27.3 ) 106.8

92.6 ( 1.9 ) ( 17.6 ) 73.1

Affiliate key employee distributions 8.4 1.1 — 9.5

4.6 ( 0.1 ) — 4.5

Earnings after Affiliate key employee distributions 131.9 ( 7.3 ) ( 27.3 ) 97.3

88.0 ( 1.8 ) ( 17.6 ) 68.6

Net interest expense — ( 16.6 ) ( 2.0 ) (d) ( 18.6 )

Net investment income — — 7.6 (e) 7.6

Loss on sale of subsidiary — — ( 1.3 ) (e) ( 1.3 )

Gain on sale of Affiliates — — 33.3 (e) 33.3

Net loss attributable to non-controlling interests in consolidated Funds — — ( 68.0 ) (e) ( 68.0 )

Income tax (expense) benefit — ( 20.0 ) 1.0 (f) ( 19.0 )

Income tax expense — ( 29.0 ) ( 4.5 ) (f) ( 33.5 )

Income from discontinued operations, net of tax — — 76.5 (g) 76.5

1 unchanged sentence

Economic net income $ 131.9 $ ( 52.9 ) $ 710.2 $ 789.2

$ 88.0 $ ( 32.6 ) $ 504.3 $ 559.7

BrightSphere Investment Group Inc.

1 unchanged sentence

15) Segments (cont.)

The following table presents the financial data for the Company’s segments for the six months ended June 30, 2020 (in millions):

Six Months Ended June 30, 2020

The following table presents the financial data for the Company’s segments for the nine months ended September 30, 2020 (in millions):

Nine Months Ended September 30, 2020

Quant & Solutions Liquid Alpha Other Reconciling Adjustments Total U.S.

2 unchanged sentences

Earnings before variable compensation 148.6 60.8 ( 15.3 ) 2.5 196.6

96.8 40.5 ( 11.0 ) 6.4 132.7

Variable compensation 52.7 24.8 4.3 3.5 (c) 85.3

ENI operating earnings (after variable comp) 95.9 36.0 ( 19.6 ) ( 1.0 ) 111.3

62.1 24.1 ( 13.9 ) 3.0 75.3

Affiliate key employee distributions 2.9 3.2 0.4 — 6.5

2.1 2.4 0.2 — 4.7

Earnings after Affiliate key employee distributions 93.0 32.8 ( 20.0 ) ( 1.0 ) 104.8

60.0 21.7 ( 14.1 ) 3.0 70.6

Net interest expense — — ( 16.5 ) ( 5.1 ) (d) ( 21.6 )

Net investment income (loss) — — — ( 10.9 ) (e) ( 10.9 )

Net income attributable to non-controlling interests in consolidated Funds

— — — ( 24.5 ) (e) ( 24.5 )

Gain on sale of Affiliate — — — 7.2 (e) 7.2

Net income attributable to non-controlling interests in consolidated Funds — — — ( 21.3 ) (e) ( 21.3 )

Income tax (expense) benefit — — ( 24.1 ) 2.5 (f) ( 21.6 )

1 unchanged sentence

Economic net income $ 93.0 $ 32.8 $ ( 60.6 ) $ 23.5 $ 88.7

$ 60.0 $ 21.7 $ ( 40.4 ) $ 10.2 $ 51.5

(1) The most directly comparable U.S.

20 unchanged sentences

GAAP interest expense.

(e) Adjusted to include net investment income (loss), net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, all of which are included in U.S.

GAAP net income attributable to controlling interests.

BrightSphere Investment Group Inc.

1 unchanged sentence

15) Segments (cont.)

(e) Adjusted to include net investment income (loss), net income (loss) attributable to non-controlling interests in consolidated Funds, and the gain on sale of Affiliates, all of which are included in U.S.

GAAP net income attributable to controlling interests.

(f) Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles.

6 unchanged sentences

16) Related Party Transactions

Landmark has provided loans to its employees.

Certain Affiliates have provided loans to Affiliate employees.

There are no loans outstanding as of September 30, 2021.

At December 31, 2020, the balance of the loans to Affiliate employees was $ 8.4 million.

On March 30 2021, the Company announced the divestiture of all of the Company’s interest in Landmark, which occurred on June 2, 2021.

As a result of the disposition, the Company no longer had any related party transactions with Landmark as of June 30, 2021.

See Note 3, Divestitures, Held for Sale and Discontinued Operations for additional information.

17) Subsequent Events

Commencement of Common Stock Cash Tender Offer

On November 4, 2021, the Company commenced a tender offer (the “Tender Offer”) to purchase up to 33.3 million shares of the Company’s common stock, that are properly tendered and not properly withdrawn, at a price of $ 31.50 per share to the seller in cash, less any applicable withholding taxes and without interest.

The Tender Offer is scheduled to expire at 5:00 p.m.

on December 6, 2021 and is subject to certain conditions.

Repurchase of 5.125 % Senior Notes

Subsequent to September 30, 2021, the Company’s Board approved the repurchase of 5.125 % Senior Notes in the near term up to the maximum aggregate principal amount of $ 125 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements