What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-09 compared with 2023-11-08 · 130 added, 217 removed, 479 unchanged (42% of the section changed)

3 unchanged sentences

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

September 30,

2024 December 31,

24 unchanged sentences

Accounts payable and accrued expenses 1.0 0.2

Derivative liabilities at fair value — 2.2

Securities sold, not yet purchased, at fair value 3.0 —

Derivative liabilities

Securities sold short

Total liabilities 555.1 561.9

13 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Management fees $ 102.2 $ 90.6

6 unchanged sentences

Depreciation and amortization 4.6 3.8

Amortization of acquired intangibles — 0.1 — 0.1

Consolidated Funds’ expense 0.1 0.7

2 unchanged sentences

Non-operating income and (expense):

Investment income (loss) ( 0.3 ) ( 0.4 ) 0.2 ( 1.2 )

Investment income 0.9 0.3

Interest income 1.3 1.1

Interest expense ( 5.0 ) ( 4.9 )

Loss on extinguishment of debt — — — ( 3.2 )

Net consolidated Funds’ investment gains 1.7 0.8

14 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income $ 15.7 $ 12.0

Other comprehensive income (loss):

Other comprehensive income:

Amortization related to derivative securities, net of tax

0.7 0.6 1.9 2.8

Foreign currency translation adjustment ( 0.9 ) ( 2.5 ) 0.6 ( 5.6 )

Total other comprehensive income (loss) ( 0.2 ) ( 1.9 ) 2.5 ( 2.8 )

Foreign currency translation adjustment, net of tax

Total other comprehensive income 0.5 1.3

Comprehensive income attributable to non-controlling interests in consolidated Funds 1.1 —

3 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended September 30, 2023 and 2022

($ in millions except share data, unaudited)

(millions) Common stock,

value Additional paid-in capital Retained earnings (deficit) Accumulated

comprehensive

income (loss) Total

stockholders’

equity (deficit) Redeemable non-controlling

Funds Total equity (deficit) and

non-controlling

June 30, 2022 41.4 $ — $ 0.5 $ ( 59.8 ) $ ( 11.7 ) $ ( 71.0 ) $ — $ ( 71.0 )

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

Foreign currency translation adjustment

— — — — ( 2.5 ) ( 2.5 ) — ( 2.5 )

Amortization related to derivatives securities, net of tax

— — — — 0.6 0.6 — 0.6

Dividends ($ 0.01 per share)

— — — ( 0.4 ) — ( 0.4 ) — ( 0.4 )

Net income — — — 17.8 — 17.8 — 17.8

September 30, 2022 41.4 $ — $ 0.9 $ ( 42.4 ) $ ( 13.6 ) $ ( 55.1 ) $ — $ ( 55.1 )

June 30, 2023 41.5 $ — $ 1.5 $ 10.1 $ ( 7.9 ) $ 3.7 $ 2.3 $ 6.0

Capital contributions — — — — — — 7.7 7.7

Equity-based compensation — — 0.3 — — 0.3 — 0.3

Foreign currency translation adjustment

— — — — ( 0.9 ) ( 0.9 ) — ( 0.9 )

Amortization related to derivatives securities, net of tax

— — — — 0.7 0.7 — 0.7

Net de-consolidation of Funds

— — — — — ( 1.9 ) ( 1.9 )

Dividends ($ 0.01 per share)

— — ( 0.5 ) — ( 0.5 ) — ( 0.5 )

Net income — — — 19.6 — 19.6 0.2 19.8

September 30, 2023 41.5 $ — $ 1.8 $ 29.2 $ ( 8.1 ) $ 22.9 8.3 $ 31.2

See Notes to Condensed Consolidated Financial Statements

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the nine months ended September 30, 2023 and 2022

For the three months ended March 31, 2024 and 2023

($ in millions except share data, unaudited)

9 unchanged sentences

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

Repurchase of common stock ( 4.2 ) — — ( 103.2 ) — ( 103.2 ) — ( 103.2 )

Capital contributions — — — — — — 0.4 0.4

Equity-based compensation — — 0.2 — — 0.2 — 0.2

3 unchanged sentences

— — — — 0.6 0.6 — 0.6

Withholding tax related to stock option exercise ( 0.9 ) ( 1.4 ) — ( 2.3 ) ( 2.3 )

Withholding tax related to stock option exercise and restricted stock vesting

( 0.3 ) — — ( 0.3 ) ( 0.3 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 12.0 — 12.0 — 12.0

September 30, 2022 41.4 $ — $ 0.9 $ ( 42.4 ) $ ( 13.6 ) $ ( 55.1 ) $ — $ ( 55.1 )

March 31, 2023 41.5 $ — $ 1.4 $ ( 0.8 ) $ ( 9.3 ) $ ( 8.7 ) $ 0.4 $ ( 8.3 )

December 31, 2023 41.4 $ — $ — $ 46.9 $ ( 6.7 ) $ 40.2 $ 9.3 $ 49.5

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

Repurchases of common stock including excise taxes

( 3.5 ) — ( 0.2 ) ( 74.8 ) — ( 75.0 ) — ( 75.0 )

Capital contributions — — — — — — 1.1 1.1

Equity-based compensation — — 0.2 — — 0.2 — 0.2

Foreign currency translation adjustment

Foreign currency translation adjustment, net of tax

— — — — ( 0.2 ) ( 0.2 ) — ( 0.2 )

2 unchanged sentences

Withholding tax related to stock option exercise and restricted stock vesting — — — ( 1.8 ) — ( 1.8 ) — ( 1.8 )

Net de-consolidation of Funds

— — — — — — ( 1.9 ) ( 1.9 )

Dividends ($ 0.01 per share)

1 unchanged sentence

Net income — — — 14.6 — 14.6 1.1 15.7

September 30, 2023 41.5 $ — $ 1.8 $ 29.2 $ ( 8.1 ) $ 22.9 $ 8.3 $ 31.2

March 31, 2024 38.0 $ — $ — $ ( 15.5 ) $ ( 6.2 ) $ ( 21.7 ) $ 11.5 $ ( 10.2 )

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

2 unchanged sentences

Adjustments to reconcile net income to net cash flows from operating activities:

Amortization of acquired intangibles — 0.1

Loss on extinguishment of debt — 3.2

Depreciation and other amortization 4.6 3.8

2 unchanged sentences

Deferred income taxes ( 2.7 ) ( 1.0 )

(Gains) losses on other investments ( 3.9 ) 5.3

(Gains) on other investments ( 4.4 ) ( 1.1 )

Changes in operating assets and liabilities:

Decrease in investment advisory fees receivable 24.4 22.6

Increase in other receivables, prepayments, deposits and other assets ( 2.7 ) ( 4.9 )

Decrease in other receivables, prepayments, deposits and other assets 2.6 0.8

Decrease in accrued incentive compensation, operating lease liabilities and other liabilities ( 72.1 ) ( 68.8 )

3 unchanged sentences

Adjustments to reconcile net income (loss) attributable to redeemable non-controlling interests of consolidated Funds to net cash flows from operating activities of consolidated Funds:

(Gains) losses on other investments ( 0.2 ) —

(Gains) on other investments ( 0.8 ) —

Purchase of investments ( 18.8 ) ( 0.1 )

Sale of investments 17.0 0.4

(Increase) decrease in receivables and other assets ( 3.2 ) —

Increase in receivables and other assets ( 0.4 ) ( 1.0 )

Increase in accounts payable and other liabilities 0.8 0.1

Net cash flows from operating activities of consolidated Funds ( 1.1 ) ( 0.6 )

4 unchanged sentences

Sale of investment securities 3.3 1.5

Cash flows from investing activities of consolidated Funds

Deconsolidation of Funds ( 12.5 ) —

Net cash flows from investing activities ( 1.4 ) ( 5.6 )

3 unchanged sentences

(in millions, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from financing activities:

Proceeds from revolving credit facility 101.0 100.0

Repayment of third party borrowings and revolving credit facility ( 87.0 ) ( 298.0 )

Payment for debt issuance costs — ( 0.9 )

Repayment of revolving credit facility

( 28.0 ) ( 13.0 )

Payment to OM plc for co-investment redemptions ( 0.2 ) ( 0.4 )

13 unchanged sentences

Income taxes paid $ 1.4 $ 0.8

Supplemental disclosure of non-cash investing and financing transactions:

Excise tax on repurchases of common stock

Payable for securities purchased by a consolidated Fund $ 0.9 $ —

See Notes to Condensed Consolidated Financial Statements

3 unchanged sentences

BrightSphere Investment Group Inc.

(“BrightSphere”, “BSIG” or the “Company”), through its subsidiaries, is a global asset management company.

(“BrightSphere”, “BSIG” or the “Company”) is a global, diversified asset management company.

The Company provides investment management services globally to predominantly institutional investors.

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

The Company completed the disposition of certain Affiliates and, beginning in 2021, has operated the business through one Affiliate, Acadian Asset Management LLC (“Acadian”).

The Company operates a differentiated investment management business through its majority owned subsidiary, Acadian Asset Management LLC (“Acadian” or the “Affiliate”), a leading systematic manager of active global, international equity and alternative strategies.

Acadian comprises the Company’s Quant & Solutions reportable segment:

• Quant & Solutions —comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S.

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

and small-cap equities, as well as managed volatility, equity alternatives including macro, and credit strategies.

Acadian is organized as a limited liability company.

7 unchanged sentences

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.

As of September 30, 2023, Paulson & Co.

As of March 31, 2024, Paulson & Co.

(“Paulson”) held approximately 23.6 % of the common stock of the Company.

For the nine months ended September 30, 2022, the Company repurchased 4,147,450 shares of common stock at an average price of $ 24.09 per share, or approximately $ 100 million in total, including commissions.

For the three months ended March 31, 2024, the Company repurchased 3,530,908 shares of common stock at an average price of $ 21.04 per share, or approximately $ 74.4 million in total, including commissions.

For the three months ended March 31, 2023, the Company did not repurchase any shares of common stock.

All shares of common stock repurchased by the Company were retired.

19 unchanged sentences

New accounting standards not yet adopted

The Company has considered all 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.

The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023-07 - Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.

The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance.

The amendment is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

We are currently evaluating the impact of adopting this standard, but we expect the standard to result in additional segment footnote disclosures.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

2) Basis of Presentation and Significant Accounting Policies (cont.)

In December 2023, the FASB issued Accounting Standards Update No.

2023-09 - Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

This amendment is effective for annual periods beginning after December 15, 2024.

We are currently evaluating the impact of adopting this standard and have not yet determined our transition approach.

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.

The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures.

3) Investments

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

September 30,

2024 December 31,

Investments of consolidated Funds held at fair value

$ 37.6 $ 33.9

Other investments 20.8 20.0

1 unchanged sentence

Total investments per Condensed Consolidated Balance Sheets $ 104.6 $ 98.6

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

4) Fair Value Measurements

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at September 30, 2023 (in millions):

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2024 (in millions):

Quoted prices

1 unchanged sentence

(Level II) Significant

(Level III) Uncategorized Total value, September 30,

(Level III) Uncategorized Total value, March 31,

Assets of BSIG and consolidated Funds (1)

Common stock $ 16.3 $ — $ — $ — $ 16.3

Common and preferred stock

$ 22.3 $ — $ — $ — $ 22.3

Corporate bonds

— 15.1 — — 15.1

Derivatives — 0.2 — — 0.2

9 unchanged sentences

Liabilities of consolidated Funds (1)

Derivatives ( 3.0 ) — — — ( 3.0 )

Securities sold short

$ ( 4.2 ) $ — $ — $ — $ ( 4.2 )

— ( 0.1 ) — — ( 0.1 )

Consolidated Funds total ( 4.2 ) ( 0.1 ) — — ( 4.3 )

3 unchanged sentences

4) Fair Value Measurements (cont.)

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at December 31, 2022 (in millions):

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2023 (in millions):

Quoted prices

3 unchanged sentences

Assets of BSIG and consolidated Funds (1)

Common and preferred stock $ 19.0 $ — $ — $ — $ 19.0

Corporate bonds

— 14.8 — — 14.8

Derivatives — 0.1 — — 0.1

9 unchanged sentences

Liabilities of consolidated Funds (1)

Securities sold short

$ ( 4.0 ) $ — $ — $ — $ ( 4.0 )

Derivatives — ( 0.1 ) — — ( 0.1 )

10 unchanged sentences

4) Fair Value Measurements (cont.)

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III.

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model with unobservable inputs, such securities are classified as Level III.

If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained.

1 unchanged sentence

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 $ 0.1 million at September 30, 2023 consisted of 100 % cash equivalents.

Investments in separate accounts of $ 4.2 million at December 31, 2022 consist of approximately 100 % of equity securities and other investments.

(2) Investments in separate accounts of $ 2.3 million at March 31, 2024 consisted of approximately 100 % equity securities.

Investments in separate accounts of $ 2.1 million at December 31, 2023 were composed of approximately 1 % cash equivalents and 99 % equity securities.

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 $ 42.0 million and $ 40.0 million at September 30, 2023 and December 31, 2022, respectively, were investments in publicly registered daily redeemable funds (some managed by Acadian), 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 $ 46.2 million and $ 44.7 million at March 31, 2024 and December 31, 2023, respectively, were investments in publicly registered daily redeemable funds (some managed by Acadian), 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 $ 20.2 million and $ 4.2 million at September 30, 2023 and December 31, 2022, 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 $ 18.5 million and $ 17.9 million at March 31, 2024 and December 31, 2023, 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

Other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $ 4.1 million and $ 4.1 million at September 30, 2023 and December 31, 2022, 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 to two years from September 30, 2023.

The real estate investment Funds of $ 3.3 million and $ 3.6 million at March 31, 2024 and December 31, 2023, respectively, were subject to longer than monthly or 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 from March 31, 2024.

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.

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and nine months ended September 30, 2023 and 2022, respectively.

There were no significant transfers of financial assets or liabilities between Levels II or III during the three months ended March 31, 2024 and 2023.

BrightSphere Investment Group Inc.

8 unchanged sentences

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

September 30,

2024 December 31,

Investments at fair value $ 16.4 $ 1.9

$ 37.6 $ 33.9

Other assets of consolidated Funds 1.8 $ 1.3

2 unchanged sentences

Total Liabilities $ 5.3 $ 4.3

“Investments at fair value” consist of investments in equity securities and derivatives.

“Investments” consist of investments in equity securities, corporate bonds and derivative securities.

To the extent the Company also has consolidated Funds that are not VIEs, the assets and liabilities of those Funds are not included in the table above.

9 unchanged sentences

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

September 30,

2024 December 31,

3 unchanged sentences

Maximum risk of loss (1)

(1) Includes equity investments the Company has made or is required to make.

(1) Includes equity investments the Company has made.

6) Borrowings and Debt

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

September 30, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

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

7 unchanged sentences

$ 274.0 $ 266.9 2 $ 273.9 $ 263.1 2

$ 125 million 5.125 % Senior Notes Due August 1, 2031 (2)(3)

Total third party borrowings $ 274.0 $ 266.9 $ 273.9 $ 263.1

1 unchanged sentence

(2) The difference between the principal amounts and the carrying values of the senior notes in the table above reflects the unamortized debt issuance costs and discounts.

(3) On January 18, 2022, the Company completed the full redemption of the $ 125 million aggregate principal amount outstanding of its 5.125 % Senior Notes due August 1, 2031.

As a result of this transaction, the Company recorded a $ 3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022.

BrightSphere Investment Group Inc.

9 unchanged sentences

The operating leases have remaining lease terms of less than 1 year to 10 years, some of which include options to extend the leases for up to 5 years.

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,

2023 2022 2023 2022

The following table summarizes information about the Company’s operating leases for the three months ended March 31, 2024 and 2023 (in millions):

Three Months Ended March 31,

Operating lease cost $ 2.2 $ 2.1

Variable lease cost — —

Sublease income — $ ( 0.1 ) — ( 0.4 )

Total operating lease expense $ 2.2 $ 2.1

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 nine months ended September 30, 2023 and 2022, the weighted average remaining lease term was 9.7 and 10.7 years, respectively, and the weighted average discount rate was 3.53 % and 3.39 %, respectively.

For the three months ended March 31, 2024 and 2023, the weighted average remaining lease term was 9.3 and 10.2 years, respectively, and the weighted average discount rate was 3.52 % and 3.54 %, respectively.

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

1 unchanged sentence

Year Ending December 31,

2023 (excluding the nine months ended September 30, 2023)

2024 (excluding the three months ended March 31, 2024)

Thereafter 41.1

5 unchanged sentences

Management is not aware of any violations of such financial requirements occurring during the period.

The Company entered into a guaranty for an office space security deposit in the amount of $ 2.5 million in January 2020.

The Company entered into a guaranty for an office space security deposit on behalf of Acadian in the amount of $ 2.5 million in January 2020.

This represents the maximum potential amount of future (undiscounted) payments that the Company could be required to make under the guaranty in the event of default by the guaranteed parties.

This guaranty expires in 2033.

There are no liabilities recorded on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 related to this guaranty.

There are no liabilities recorded on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 related to this guaranty.

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

1 unchanged sentence

The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated.

As of September 30, 2023, there were no material accruals for claims and the Company does not believe any outstanding matters will have a material adverse effect on the Company.

As of March 31, 2024, there were no material accruals for claims and the Company does not believe any outstanding matters will have a material adverse effect on the Company.

BrightSphere Investment Group Inc.

2 unchanged sentences

Indemnifications

In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications.

In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company has entered into contracts that contain a variety of representations and warranties and which provide general indemnifications.

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.

4 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 September 30, 2023, 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, 2023.

At March 31, 2024, 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 March 31, 2024.

Considerations of credit risk

3 unchanged sentences

For the Company and its Affiliate, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits.

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

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

The insurers of the policies are considered a significant counterparty to the Company.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

9) Earnings Per Share

1 unchanged sentence

Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable common stock, except when inclusion is antidilutive.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

9) Earnings Per Share (cont.)

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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net income attributable to controlling interests $ 14.6 $ 12.0

17 unchanged sentences

Disaggregation of management fee revenue

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,

2023 2022 2023 2022

The geographic disaggregation of management fee revenue for the three months ended March 31, 2024 and 2023 are as follows (in millions):

Three Months Ended March 31,

Quant & Solutions

$ 77.3 $ 67.9

23.3 20.8 69.4 68.3

Management fee revenue $ 102.2 $ 90.6

11) Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended September 30, 2023 and 2022 are as follows (in millions):

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2024 and 2023 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of June 30, 2023

$ 3.2 $ ( 11.1 ) $ ( 7.9 )

Foreign currency translation adjustment ( 0.9 ) — ( 0.9 )

Amortization related to derivatives securities, before tax — 0.9 0.9

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 0.9 ) 0.7 ( 0.2 )

Balance, as of September 30, 2023

Balance, as of December 31, 2023

$ 3.1 $ ( 9.8 ) $ ( 6.7 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of June 30, 2022

Foreign currency translation adjustment before tax

( 0.3 ) — ( 0.3 )

Foreign currency translation adjustment ( 2.5 ) — ( 2.5 )

Amortization related to derivatives securities before tax

1 unchanged sentence

Other comprehensive income (loss) ( 0.2 ) 0.7 0.5

Balance, as of September 30, 2022

Balance, as of March 31, 2024

$ 2.9 $ ( 9.1 ) $ ( 6.2 )

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

11) Accumulated Other Comprehensive Income (Loss) (cont.)

The components of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2023 and 2022 are as follows (in millions):

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of December 31, 2022

Foreign currency translation adjustment 0.6 — 0.6

Amortization related to derivatives securities, before tax — 2.5 2.5

Tax impact — ( 0.6 ) ( 0.6 )

Other comprehensive income 0.6 1.9 2.5

Balance, as of September 30, 2023

$ 1.7 $ ( 12.3 ) $ ( 10.6 )

Foreign currency translation adjustment Valuation and amortization of derivative securities Total

Balance, as of December 31, 2021 $ 4.8 $ ( 15.6 ) $ ( 10.8 )

Foreign currency translation adjustment ( 5.6 ) — ( 5.6 )

Foreign currency translation adjustment before tax

Amortization related to derivatives securities before tax

Tax impact — ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 5.6 ) 2.8 ( 2.8 )

Balance, as of September 30, 2022

Other comprehensive income 0.7 0.6 1.3

Balance, as of March 31, 2023

$ 2.4 $ ( 11.7 ) $ ( 9.3 )

(1) On January 18, 2022, the Company completed the full redemption of the $ 125 million aggregate principal amount outstanding of its 5.125 % Senior Notes due August 1, 2031.

As a result of this transaction, the Company recorded $ 1.3 million of amortization expense included in Amortization related to derivatives securities, before tax for the nine months ended September 30, 2022.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Derivatives and Hedging

5 unchanged sentences

The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $( 34.4 ) million, was settled.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

12) Derivatives and Hedging (cont.)

As of September 30, 2023, the balance recorded in accumulated other comprehensive income (loss) was $( 10.4 ) million, net of tax.

As of March 31, 2024, the balance recorded in accumulated other comprehensive income (loss) was $( 9.1 ) million, net of tax.

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

The Company reclassified $ 0.9 million and $ 0.8 million for the three months ended September 30, 2023 and 2022, respectively.

Amounts of $ 2.5 million and $ 3.8 million have been reclassified for the nine months ended September 30, 2023 and 2022, respectively.

The Company reclassified $ 0.9 million and $ 0.8 million for the three months ended March 31, 2024 and 2023, respectively.

During the next twelve months the Company expects to reclassify approximately $ 3.7 million to interest expense.

On January 18, 2022, the Company completed the full redemption of the $ 125 million aggregate principal amount outstanding of its 5.125 % Senior Notes due August 1, 2031.

As a result of this transaction, amortization expense of $ 1.3 million (of the $ 3.8 million interest expense reclassified to earnings for the nine months ended September 30, 2022) was reclassified to earnings as interest expense.

The Company has the following reportable segment:

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

and small-cap equities, as well as managed volatility, equity alternatives including macro, and credit strategies.

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

11 unchanged sentences

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

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

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

GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, and restructuring costs.

Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

GAAP, adjusted to include management fees paid to the Company’s Affiliate by consolidated Funds.

BrightSphere Investment Group Inc.

1 unchanged sentence

13) Segments (cont.)

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

GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, capital transaction costs, and restructuring costs.

Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

ENI segment results are also adjusted to exclude the portion of consolidated Fund revenues, expenses and investment return recorded under U.S.

2 unchanged sentences

GAAP net income (loss).

The following table presents the financial data for the Company’s segment for the three months ended September 30, 2023 (in millions):

Three Months Ended September 30, 2023

The following table presents the financial data for the Company’s segment for the three months ended March 31, 2024 (in millions):

Three Months Ended March 31, 2024

Quant & Solutions Other Reconciling Adjustments Total U.S.

2 unchanged sentences

Earnings before variable compensation 59.6 ( 3.8 ) ( 4.3 ) 51.5

Variable compensation 27.8 0.7 — 28.5

Variable compensation 26.0 0.6 ( 0.2 ) (c)

ENI operating earnings (after variable comp) 33.6 ( 4.4 ) ( 4.1 ) 25.1

1 unchanged sentence

Earnings after Affiliate key employee distributions 31.4 ( 4.4 ) ( 4.1 ) 22.9

Net interest expense — ( 2.7 ) ( 0.4 ) (c)

Net investment income — — 0.4 (d)

Net income attributable to non-controlling interests in consolidated Funds — — ( 0.2 ) (d)

Income tax expense — ( 7.1 ) ( 0.6 ) (e)

Net interest expense — ( 3.0 ) ( 0.7 ) (d)

Net investment income — — 2.6 (e)

Net income attributable to non-controlling interests in consolidated Funds — — ( 1.1 ) (e)

Income tax (expense) benefit — ( 6.6 ) 0.5 (f)

Economic net income $ 31.4 $ ( 14.0 ) $ ( 2.8 ) $ 14.6

2 unchanged sentences

13) Segments (cont.)

The following table presents the financial data for the Company’s segments for the three months ended September 30, 2022 (in millions):

Three Months Ended September 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 86.8 $ — $ — $ 86.8

ENI operating expenses 40.4 4.1 ( 8.7 ) (b)

Earnings before variable compensation 46.4 ( 4.1 ) 8.7 51.0

Variable compensation 18.9 0.9 — 19.8

ENI operating earnings (after variable comp) 27.5 ( 5.0 ) 8.7 31.2

Affiliate key employee distributions 1.1 — — 1.1

Earnings after Affiliate key employee distributions 26.4 ( 5.0 ) 8.7 30.1

Net interest expense — ( 4.3 ) ( 0.1 ) (c)

Net investment loss — — ( 0.4 ) (d)

Income tax expense — ( 4.6 ) ( 2.9 ) (e)

Economic net income $ 26.4 $ ( 13.9 ) $ 5.3 $ 17.8

The following table presents the financial data for the Company’s segment for the nine months ended September 30, 2023 (in millions):

Nine Months Ended September 30, 2023

The following table presents the financial data for the Company’s segment for the three months ended March 31, 2023 (in millions):

Three Months Ended March 31, 2023

Quant & Solutions Other Reconciling Adjustments Total U.S.

6 unchanged sentences

Earnings after Affiliate key employee distributions 23.8 ( 4.2 ) 0.2 19.8

Net interest expense — ( 9.6 ) ( 1.2 ) (c)

Net investment income — — 2.0 (d)

Net income attributable to non-controlling interests in consolidated Funds — — ( 0.3 ) (d)

Income tax expense — ( 15.9 ) ( 2.4 ) (e)

Economic net income $ 81.5 $ ( 38.4 ) $ ( 0.1 ) $ 43.0

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

13) Segments (cont.)

The following table presents the financial data for the Company’s segment for the nine months ended September 30, 2022 (in millions):

Nine Months Ended September 30, 2022

Quant & Solutions Other Reconciling Adjustments Total U.S.

ENI revenue $ 294.5 $ — $ — $ 294.5

ENI operating expenses 121.2 13.0 ( 33.6 ) (b)

Earnings before variable compensation 173.3 ( 13.0 ) 33.6 193.9

Variable compensation 66.9 3.5 — 70.4

ENI operating earnings (after variable comp) 106.4 ( 16.5 ) 33.6 123.5

Affiliate key employee distributions 3.5 — — 3.5

Earnings after Affiliate key employee distributions 102.9 ( 16.5 ) 33.6 120.0

Net interest expense — ( 13.5 ) ( 2.1 ) (c)

Net investment loss — — ( 1.2 ) (d)

Loss on extinguishment of debt — — ( 3.2 ) (d)

Income tax expense — ( 19.7 ) ( 10.1 ) (e)

Net interest expense — ( 3.4 ) ( 0.4 ) (d)

Net investment income — — 1.1 (e)

Income tax expense — ( 4.4 ) ( 0.7 ) (f)

Economic net income $ 23.8 $ ( 12.0 ) $ 0.2 $ 12.0

14 unchanged sentences

GAAP revenue.

Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, amortization of acquired intangible assets, restructuring costs, and consolidated Funds’ operating expenses, each of which are included in U.S.

Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, restructuring costs, and consolidated Funds’ operating expenses, each of which are included in U.S.

GAAP operating expenses.

Adjusted to include restructuring costs which are included in U.S.

GAAP compensation expense.

Adjusted to include the cost of seed financing and amortization of debt issuance costs, which is included in U.S.

GAAP interest expense.

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

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

GAAP net income attributable to controlling interests.

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

Also adjusted to include the tax impact of certain ENI adjustments;

Adjusted to include the tax impact of certain ENI adjustments;

exclude the tax expense or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

14) Subsequent Events

During the period from April 1, 2024 through May 7, 2024, the Company repurchased 269,361 shares of common stock at a weighted average price of $ 22.49 per share, or approximately $ 6 million in total, including commissions.

The Company seeded Acadian’s Global High Yield Strategy with $ 15 million of seed capital in April 2024.

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