What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-28 compared with 2022-02-28 · 44 added, 58 removed, 418 unchanged (20% of the section changed)

24 unchanged sentences

If the performance or assessment of our investment strategies is seen as underperforming relative to peers, it could, among other things, result in an increase in the withdrawal of assets by existing clients and investors in mutual funds and private funds we advise or sub-advise, the termination of us as a sub-adviser to a mutual fund and the inability to attract additional investments from existing and new clients or investors.

If a significant portion of clients or investors decides to withdraw their investments or terminate their investment management agreements

or sub-advisory agreements, our ability to generate earnings would decline and our results of operations and financial condition would be affected.

In addition, assets could be withdrawn for any number of reasons other than poor absolute or relative investment performance, including macro-economic factors unrelated to investment performance, a reduction in market demand for the asset classes, products or strategies we offer, the loss of key personnel, price declines in the securities markets generally, price declines in those assets in which client assets are concentrated or changes in investment patterns of clients, or a failure by us to comply with applicable client and regulatory investment guidelines.

If a significant portion of clients or investors decides to withdraw their investments or terminate their investment management agreements or sub-advisory agreements, our ability to generate earnings would decline and our results of operations and financial condition would be affected.

In addition, assets could be withdrawn for any number of reasons other than poor absolute or relative investment performance, including macro-economic factors unrelated to investment performance, a reduction in market demand for the asset classes, products or strategies we offer, the loss of key personnel, price declines in the securities markets generally, price declines in those assets in which client assets are concentrated or changes in investment patterns of clients, a failure by us to comply with applicable client and regulatory investment guidelines, or factors wholly unrelated to us.

Any of these factors could have a negative impact on our results of operations and financial condition.

3 unchanged sentences

As of December 31, 2022, $37.3 billion, or 40%, of our assets under management were concentrated across three investment strategies:

Acadian’s Emerging Markets Equity ($21.1 billion, or 18%), Acadian’s Global Equity ($12.8 billion, or 11%) and Acadian’s Global Managed Volatility Equity ($12.3 billion, or 10%).

Acadian’s Emerging Markets Equity ($14.7 billion, or 16%), Acadian’s All-Country World ex-US Equity ($11.5 billion, or 12%) and Acadian’s Global Equity ($11.1 billion, or 12%).

Consequently, our results of operations are dependent upon our ability to minimize the risk of outflows from these strategies through relatively strong performance over measured periods of time compared to relevant benchmarks and peer performance results.

2 unchanged sentences

Such volatility could adversely affect our results of operations and investors’ perception of us.

Additionally, if investment strategies we do not offer gain favor with investors we may lose existing clients or potential clients to others who offer such strategies.

We rely on certain key personnel, and our results are dependent upon our ability to retain and attract key personnel.

12 unchanged sentences

In addition to providing investment management services, we must have the necessary operational capabilities to manage our business effectively in accordance with client expectations and applicable law.

The required non-investment management functions include sales, marketing, portfolio recordkeeping and accounting, security

pricing, trading activity, investor reporting, corporate governance, compliance, net asset value computations, account reconciliations and calculations of required distributions to accounts.

The required non-investment management functions include sales, marketing, portfolio recordkeeping and accounting, security pricing, trading activity, investor reporting, corporate governance, compliance, net asset value computations, account reconciliations and calculations of required distributions to accounts.

Some of these functions are performed either independently or with the support of or in conjunction with us or third-party service providers that we oversee.

47 unchanged sentences

If anyone acquires, or is deemed to have acquired, a controlling block of our voting securities in the future, the contractual anti-assignment and termination provisions of the investment advisory and sub-advisory agreements between Acadian and its clients may be implicated.

stockholders in addition to its board of directors or trustees, our results of operations could be materially and adversely affected.

If an assignment of an investment advisory or sub-advisory agreement is deemed to occur, and clients do not consent to the assignment or, with respect to investment company clients, enter into a new agreement with Acadian, which may require the approval of the investment company’s stockholders in addition to its board of directors or trustees, our results of operations could be materially and adversely affected.

Pressure on fee levels and changes to mix of assets could impact our results of operations.

Our profit margins and net income are dependent on the our ability to maintain current fee levels for the products and services we offer.

Our profit margins and net income are dependent on our ability to maintain current fee levels for the products and services we offer.

The competitive nature of the asset management industry has led to a trend toward lower fees in certain segments of the asset management market, and there can be no assurance that we will be able to maintain our current pricing structures.

13 unchanged sentences

Investments in non-U.S.

markets and in securities of non-U.S.

companies may involve foreign currency exchange risk, and tax, political, social and economic uncertainties, and a reduction in assets under management associated with investments in non-U.S.

markets, in securities of non-U.S.

companies and utilization of currency forward contracts and options on currency may involve foreign currency exchange risk, and tax, political, social and economic uncertainties, and a reduction in assets under management associated with investments in non-U.S.

equities could have a disproportionately adverse impact on our results of operations.

12 unchanged sentences

In addition, non-U.S.

legal and regulatory financial accounting

standards and practices may be different from those of the U.S., and there may be less publicly available information about non-U.S.

legal and regulatory financial accounting standards and practices may be different from those of the U.S., and there may be less publicly available information about non-U.S.

companies and non-U.S.

28 unchanged sentences

Losses on our seed capital could adversely impact our results of operations or financial condition.

As of December 31, 2021, we had approximately $5 million committed to seed capital, which is currently invested in two products across two different asset classes.

As of December 31, 2022, we had approximately $19 million committed to seed capital, which is currently invested in three products.

The amount we commit to, or invest in, seed capital could change materially from time to time in our discretion based on the needs of the business.

The capital utilized in the seed portfolios may be subject to liquidity constraints over certain time periods and is subject to market conditions.

32 unchanged sentences

For example, our level of indebtedness may require us to use a substantial portion of our cash flow from operations to pay interest and principal on our debt, which would reduce the funds available to us for working capital, capital expenditures and other general corporate purposes and may limit our ability to pay future dividends.

Too much debt may limit our

ability to implement our business strategy;

Too much debt may limit our ability to implement our business strategy;

heighten our vulnerability to downturns in our business, the financial services industry or in the general economy and limit our flexibility in planning for, or reacting to, changes in our business and the financial services industry;

35 unchanged sentences

While we engage in certain actions to reduce the exposure resulting from outsourcing, such as performing onsite security control assessments, limiting third-party access to the least privileged level necessary to perform job functions, and restricting third-party processing to systems stored within our data centers, ongoing threats may result in accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, data and information, or other cyber incidents with increased costs and consequences to us such as those discussed above.

We are subject to data protection laws including in the European Union (“EU”), United Kingdom (“U.K.”) and other jurisdictions, and any failure to comply with such legislation could adversely affect our business, reputation, results of operations and financial condition.

We are subject to data protection laws including in the European Union (“EU”), United Kingdom (“U.K.”), United States (“U.S.”) and other jurisdictions, and any failure to comply with such legislation could adversely affect our business, reputation, results of operations and financial condition.

We are subject to privacy and security laws in the various jurisdictions in which we operate, obtain or store personally identifiable information.

2 unchanged sentences

GDPR”), along with the Data Protection Act 2018 in the U.K.

(“Act”) (together “EU Data Protection Laws”).

The EU Data Protection Laws have a wide territorial reach and apply to data controllers and data processors which have an establishment in the EU and U.K., or which offer goods or services to, or monitor the behavior of, data subjects in the EU and U.K.

The EU Data Protection Laws impose stringent operational requirements on data controllers and data processors.

These include (i) accountability and transparency obligations which require organizations to demonstrate and record compliance with the EU Data Protection Laws and to provide detailed information to data subjects regarding the processing of their personal data, (ii) obligations to consider data privacy as any new products or services are developed and to limit the amount of information they collect, process and store, (iii) ensuring and maintaining an appropriate level of security for personal data, and (iv) reporting breaches to data protection authorities and, in some cases, affected individuals.

The EU Data Protection Laws give strong enforcement powers to data protection authorities in the EU and U.K., and introduce significant penalties for non-compliance, with fines of up to 4% of total annual worldwide turnover or €20 million (whichever is higher), depending on the type and severity of the breach.

(“Act”) (together “EU/U.K.

Data Protection Laws”).

The EU Data Protection Laws have a wide territorial reach and apply to data controllers and data processors which have an establishment in the EU/U.K., or which offer goods or services to, or monitor the behavior of, data subjects in the EU and U.K.

Data Protection Laws impose stringent operational requirements on data controllers and data processors.

These include (i) accountability and transparency obligations which require organizations to demonstrate and record compliance with the EU/U.K.

Data Protection Laws and to provide detailed information to data subjects regarding the processing of their personal data, (ii) obligations to consider data privacy as any new products or services are developed and to limit the amount of information they collect, process and store, (iii) ensuring and maintaining an appropriate level of security for personal data, and (iv) reporting breaches to data protection authorities and, in some cases, affected individuals.

Data Protection Laws give strong enforcement powers to data protection authorities in the EU/U.K., and introduce significant penalties for non-compliance, with fines of up to 4% of total annual worldwide turnover or €20 million (whichever is higher), depending on the type and severity of the breach.

In the United States, we are subject to the California Consumer Privacy Act (“CCPA”).

2 unchanged sentences

Additionally, the CCPA gives California consumers the right to ask companies to delete a consumer’s personal information and it places limitations on a company’s ability to sell personal information, including providing consumers a right to opt out of sales of their personal information.

These protections will be expanded by the California Privacy Rights Act (CPRA), which was approved by California voters in November 2020 and will be operational in most key respects on January 1, 2023.

Colorado and Virginia have also passed comprehensive privacy laws that may impact our operations, and there are similar legislative proposals being advanced in other U.S.

These protections have been expanded by the California Privacy Rights Act (CPRA), which was approved by California voters in November 2020 and became operational in most key respects on January 1, 2023.

The CPRA imposes further obligations on covered businesses, establishes a new regulatory authority called the California Privacy Protection Agency and offers consumers additional rights, including the rights to correct and to opt out of the “sharing” of their personal information for purposes of cross-context behavioral advertising.

Colorado, Connecticut, Utah and Virginia have also passed comprehensive privacy laws that may impact our operations, with the Virginia law in effect as of January 1, 2023, and there are similar legislative proposals being advanced in other U.S.

states, as well as in Congress.

The interpretation of EU Data Protection Laws, the CCPA, and other privacy laws to which we are subject around the world can be uncertain, and as business practices are challenged by regulators, data subjects and consumer protection agencies, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data protection practices.

Compliance with data privacy and security regulation can require allocation of resources as well as changes in operations and non-compliance can result in substantial fines.

The interpretation of EU/U.K.

Data Protection Laws, the CCPA, and other privacy laws to which we are subject around the world can be uncertain, and as business practices are challenged by regulators, data subjects and consumer protection agencies, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data protection practices.

Compliance with data privacy and security regulations can require allocation of resources as well as changes in operations and non-compliance can result in substantial fines.

The failure of a counterparty to meet its obligations could affect our business adversely.

11 unchanged sentences

Bribery Act 2010, or the Bribery Act, and other anti-corruption laws that apply in countries where we do business.

The FCPA, the Bribery Act and these other laws generally prohibit us and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.

We and our commercial partners operate in a number of jurisdictions that may pose a risk of potential FCPA or Bribery Act violations, and we participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under FCPA, the Bribery Act or local anti-corruption laws.

The FCPA, the Bribery Act and other applicable anti-corruption laws generally prohibit us and our employees and intermediaries from paying bribes, receiving bribes or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.

We and our commercial partners operate in a number of jurisdictions that may pose an elevated risk of corruption, and we participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under FCPA, the Bribery Act or local anti-corruption laws.

We are also subject to other laws and regulations governing our international operations, including applicable export control regulations, economic sanctions on countries or persons, customs requirements currency exchange regulations, and anti-facilitation of tax evasion rules, or collectively Trade Control Laws.

As with anti-corruption laws, misconduct by third parties could potentially subject us to liability under Trade Control Laws.

There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws or Trade Control Laws.

In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our internal operations might be subject or the manner in which existing laws might be administered or interpreted.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the U.S.

and the U.K., and authorities in the EU, including applicable export control regulations, economic sanctions on countries or persons, customs requirements and currency exchange regulations, anti-facilitation of tax evasion rules (including the U.K.

Criminal Finances Act 2017), or Trade Control Laws.

There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the FCPA, the Bribery Act or other legal requirements, including Trade Control Laws.

If we are not in compliance with the FCPA, the Bribery Act and other anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity.

Likewise, any investigation of any potential violations of the FCPA, the Bribery Act, other anti-corruption laws or Trade Control Laws by U.K., U.S.

If we are not in compliance with anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity.

Likewise, any investigation of any potential violations of anti-corruption laws or Trade Control Laws by U.K., U.S.

or other authorities could also have an adverse impact on our reputation, business, results of operations and financial condition.

24 unchanged sentences

The outbreak of COVID-19 and the related containment and mitigation measures put in place have had, and may continue to have, a serious impact on the economy and the financial and securities markets.

As a result, our investment results have been, and may continue to be, negatively affected, resulting in decreases to our assets under management and related revenue and earnings.

In addition, the economic conditions caused by the COVID-19 pandemic may increase our funding costs or limit our access to the capital markets, which could impact our ability to finance our operations through borrowing.

As the potential impact of COVID-19 is impossible to predict, the extent to which COVID-19 could negatively affect our operating results or the duration of any potential business disruption is uncertain.

In addition, our operations, as well as third-party service providers on whom we rely, have been, and are expected to continue to be, significantly impacted by the COVID-19 pandemic.

As a result, our investment results have been, and may as a result of COVID-19 or other outbreaks again be, negatively affected, resulting in decreases to our assets under management and related revenue and earnings.

In addition, the economic conditions caused by the COVID-19 pandemic or another outbreak may increase our funding costs or limit our access to the capital markets, which could impact our ability to finance our operations through borrowing.

As the potential impact of COVID-19 or any other future outbreak is impossible to predict, the extent of any negative effects on our operating results or the duration of any potential business disruption is uncertain.

In addition, our operations, as well as third-party service providers on whom we rely, have been, and in the future may again be, significantly impacted by the COVID-19 pandemic.

No assurance can be given that the steps we have taken with respect to business continuity plans will be effective or appropriate.

2 unchanged sentences

Any such material disruptions to our business operations could have a material adverse impact on our results of operation or financial condition.

We may be adversely affected by the phase-out of the London Interbank Offered Rate (“LIBOR”) or the replacement of LIBOR with a different reference rate.

LIBOR is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on U.S.

dollar-denominated loans globally.

Our credit facility, originally entered into on August 20, 2019 and assigned to Acadian on February 23, 2021, uses LIBOR as a reference rate such that the interest due to our creditors under the facility is calculated using LIBOR.

On July 27, 2017, the U.K.’s Financial Conduct Authority (the authority that administers LIBOR) announced that it intends to phase out LIBOR by the end of 2021.

The Financial Conduct Authority later announced that LIBOR may continue for legacy contracts until June 2023.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, has recommended the Secured Overnight Finance Rate, or SOFR, as an alternative to LIBOR.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.

treasury repurchase (repo) market.

There can be no assurance that rates linked to SOFR or associated changes related to the adoption of SOFR will be as favorable to us as LIBOR and may result in an effective increase in the applicable interest rate on our current or future debt obligations.

This could materially and adversely affect our results of operations, cash flows, and liquidity.

We cannot predict the effect of the potential changes to LIBOR or SOFR or the establishment and use of alternative rates or benchmarks.

Risks Related to Our Industry

39 unchanged sentences

may include heightened and additional examinations and inspections by regulators and the imposition of additional reporting and disclosure obligations.

also may take a more aggressive posture on bringing enforcement proceedings which could result in fines, penalties and additional remedial activities.

Regulators also may take a more aggressive posture on bringing enforcement proceedings which could result in fines, penalties and additional remedial activities.

Policy and legislative changes in the U.S.

3 unchanged sentences

It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the proposals will become law.

Any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we s conduct business.

Any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business.

Failure to comply with applicable laws or regulations could result in fines, suspension or revocation of Acadian’s registration as an investment adviser, suspensions of individual employees, revocation of licenses to operate in certain jurisdictions or other sanctions, which could materially adversely affect our business, financial condition and results of operations.

14 unchanged sentences

Sales or distributions of substantial amounts of our common stock, including shares issued in connection with an acquisition, or the perception that such sales or distributions could occur, may cause the market price of our common stock to decline.

stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction.

31 unchanged sentences

and other jurisdictions could change in the future, and such changes could cause a material change in our effective tax rate and otherwise adversely affect our results of operations.

While the likelihood and nature of any such legislation or regulations is uncertain, the new administration may pursue tax policies seeking to increase the corporate tax rate and further limit the deductibility of interest, among other things.

Such changes could materially increase the amount of taxes we are required to pay.

While the likelihood and nature of any such legislation or regulations is uncertain, the new administration has pursued, and may continue to pursue, tax policies seeking to increase the corporate tax rate and further limit the deductibility of interest, among other things.

For example, the Inflation Reduction Act of 2022, enacted in August 2022, contained a number of changes to the U.S.

federal tax laws, including a new 15% corporate minimum tax and a new 1% excise tax on stock repurchases, which could impact our stock repurchase program and our ability to return value to stockholders efficiently.

These and other such changes could materially increase the amount of taxes we are required to pay.

Further, pursuant to ongoing efforts to encourage global tax compliance, the U.S.

41 unchanged sentences

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-K

Item 1A. Risk Factors