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In addition, such depreciation could cause our clients to withdraw their funds in favor of investments offering higher returns or lower risk, which would cause our revenues and net income to decline further.
−Removed: Our model for assessing the impact of market risk on our results uses June 30, 2024 ending AUM and management fee rates as the basis for management fee revenue calculations.
−Removed: With respect to performance fee revenue, we assume that relative investment performance is the same as in the past four quarters ended June 30, 2024.
+Added: Our model for assessing the impact of market risk on our results uses September 30, 2024 ending AUM and management fee rates as the basis for management fee revenue calculations.
+Added: With respect to performance fee revenue, we assume that relative investment performance is the same as in the past four quarters ended September 30, 2024.
Therefore, market-driven changes in performance fees, which are typically based on relative performance versus market indices, reflect changes in the underlying AUM used in the calculation rather than differences in relative performance as a result of a changed market environment.
1 unchanged sentence
Changes in performance fee revenues could be significant in each period.
−Removed: The basis for the analysis is performance fees earned for the twelve months ended June 30, 2024.
+Added: The basis for the analysis is performance fees earned for the twelve months ended September 30, 2024.
Our profit sharing economic structure, described more fully in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—The Economics of Our Business,” results in a sharing of market risk between us and our employees.
3 unchanged sentences
Any change in pre-tax profit is tax-affected to calculate profit after tax.
−Removed: The value of our assets under management was $112.6 billion as of June 30, 2024.
+Added: The value of our assets under management was $120.3 billion as of September 30, 2024.
A 10% increase or decrease in the value of our assets under management, if proportionally distributed over all of our investment strategies, asset classes and client relationships, would cause an annualized increase or decrease in our gross management fee revenues of approximately $46 million based on our current weighted average fee rate of approximately 38 basis points.
1 unchanged sentence
Of these assets, the majority are in accounts for which performance fees are calculated based on investment return that differs from the relative benchmark returns.
−Removed: Assuming the market change does not impact our relative performance, a 10% increase or decrease in AUM would have a $5 million impact to our gross performance fees based on our trailing twelve-month performance fees of $54 million as of June 30, 2024.
+Added: Assuming the market change does not impact our relative performance, a 10% increase or decrease in AUM would have a $5 million impact to our gross performance fees based on our trailing twelve-month performance fees of $53 million as of September 30, 2024.
The combined impact on our management fees and performance fees would have a direct impact on our earnings and result in an annual change of approximately $20 million in our post-tax economic net income, given our current cost structure and operating model.
5 unchanged sentences
and emerging markets securities).
−Removed: A 10% increase or decrease in equity markets would cause our $112 billion of equity assets under management to increase or decrease by $11 billion, resulting in a change in annualized management fee revenue of $43 million and an annual change in post-tax economic net income of approximately $17 million, given our current cost structure, operating model, and weighted average fee rate of 38 basis points at the mix of strategies as of June 30, 2024.
+Added: A 10% increase or decrease in equity markets would cause our $120 billion of equity assets under management to increase or decrease by $12 billion, resulting in a change in annualized management fee revenue of $46 million and an annual change in post-tax economic net income of approximately $18 million, given our current cost structure, operating model, and weighted average fee rate of 38 basis points at the mix of strategies as of September 30, 2024.
Approximately $19 billion, or 16%, of our equity markets-based AUM are in accounts subject to performance fees.
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A 10% increase or decrease in foreign exchange rates against the U.S.
−Removed: dollar would cause our $88 billion of foreign currency denominated AUM to increase or decrease by $9 billion, resulting in a change in annualized management fee revenue of $36 million and an annual change in post-tax economic net income of $14 million, based on weighted average fees earned on our foreign currency denominated AUM of 41 basis points at the mix of strategies as of June 30, 2024.
+Added: dollar would cause our $94 billion of foreign currency denominated AUM to increase or decrease by $9 billion, resulting in a change in annualized management fee revenue of $39 million and an annual change in post-tax economic net income of $15 million, based on weighted average fees earned on our foreign currency denominated AUM of 41 basis points at the mix of strategies as of September 30, 2024.
Approximately $14 billion, or 15%, of our foreign currency denominated AUM are in accounts subject to performance fees.
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Interest on borrowings under the revolving credit facility is based upon variable interest rates.
−Removed: Borrowings under the credit facility were $36.0 million as of June 30, 2024.
+Added: There were no borrowings under our revolving credit facility as of September 30, 2024.
We currently do not hedge against interest rate risk.
−Removed: As of June 30, 2024, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the six months ended June 30, 2024.
+Added: As of September 30, 2024, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the nine months ended September 30, 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.