What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-02-28 · 302 added, 472 removed, 814 unchanged (49% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to the “Company”, “BrightSphere” or “BSIG” refer to BrightSphere Investment Group Inc., and references to “we,” “our” and “us” refer to BSIG and its consolidated subsidiaries and previously disposed equity-accounted Affiliate, excluding discontinued operations.

References to the holding company or “Center” excluding the Affiliates refer to BrightSphere Inc., or BSUS, a Delaware corporation and indirect, wholly owned subsidiary of BSIG.

Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “Affiliates” or an “Affiliate” refer to the asset management firms in which we have or previously had an ownership interest.

References in this Annual Report on Form 10-K to “OM plc” refer to Old Mutual plc, our former parent.

None of the information in this Annual Report on Form 10-K constitutes either an offer or a solicitation to buy or sell Acadian’s products or services, nor is any such information a recommendation for Acadian’s products or services.

Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to the “Company”, “Acadian Asset Management”, “Acadian” or “AAMI” refer to Acadian Asset Management Inc., and references to “we,” “our” and “us” refer to AAMI and its consolidated subsidiaries.

References to Hold Co refer to AAMI and its subsidiaries excluding Acadian Asset Management LLC (“Acadian LLC”).

Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “OM plc” refer to Old Mutual plc, our former parent.

None of the information in this Annual Report on Form 10-K constitutes either an offer or a solicitation to buy or sell Acadian LLC’s products or services, nor is any such information a recommendation for Acadian LLC’s products or services.

The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes which appear in this Annual Report on Form 10-K in Item 8, Financial Statements and Supplementary Data.

5 unchanged sentences

• Overview provides a brief description of our business.

It includes information on our reporting segment and underlying Affiliate, a summary of The Economics of Our Business and an explanation of How We Measure Performance using a non-GAAP measure which we refer to as economic net income, or ENI.

It includes information on our reporting segment, a summary of The Economics of Our Business and an explanation of How We Measure Performance using a non-GAAP measure which we refer to as economic net income, or ENI.

This section also provides a Summary Results of Operations and information regarding our Assets Under Management by strategy, client type and client location, and net flows by segment, client type and client location.

18 unchanged sentences

These accounting policies and estimates require complex management judgment regarding matters that are highly uncertain at the time the policies were applied and estimates were made.

We are a global asset management holding company headquartered in Boston, Massachusetts.

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

We have completed the disposition of certain Affiliates and currently operate our business through the following 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, systematic macro, equity alternatives, and credit strategies.

This segment is comprised of our interest in our sole Affiliate, Acadian Asset Management LLC (“Acadian”).

Through Acadian, we offer a diverse range of actively-managed investment strategies and products to institutional investors around the globe.

The corporate head office is included within the Other category, along with our previously disposed Affiliate, Campbell Global, LLC (“Campbell Global”) for the year ended December 31, 2021.

We completed the sale of our equity interest in Campbell Global in August 2021.

Investment Counselors of Maryland, LLC (“ICM”) is also included in the Other category for the year ended December 31, 2021.

We completed the sale of our equity interests in ICM in July 2021.

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 our segment.

GAAP, Acadian is consolidated into our financial statements.

We may also be required to consolidate Acadian’s sponsored investment entities, or Funds, due to the nature of our decision-making rights, our economic interests in these Funds or the rights of third party clients in those Funds.

We are a holding company that operates a systematic investment management business through our majority owned subsidiary, Acadian LLC.

Acadian LLC offers institutional investors across the globe access to a diversified array of systematic investment strategies designed to meet a range of risk and return objectives.

Acadian LLC is a leading systematic investment manager of active equity products, including global, emerging market, international, and small cap equities, as well as credit and alternative strategies.

Acadian LLC comprises our Quant & Solutions reportable segment:

• Quant & Solutions —comprised of strategies that leverage cutting-edge technology to gather and analyze data to identify mispriced assets to deliver attractive risk-adjusted returns for investors;

portfolios include developed and developing markets for equity, credit and alternative strategies.

This segment is comprised of our interest in Acadian LLC.

Hold Co is included within the Unallocated Corporate expenses category.

GAAP, Acadian LLC is consolidated into our financial statements.

We may also be required to consolidate Acadian LLC’s sponsored investment entities, or Funds, due to the nature of our decision-making rights, our economic interests in these Funds or the rights of third-party clients in those Funds.

The Economics of Our Business

1 unchanged sentence

We earn management fees based on assets under management.

Approximately 80% of our management fees are calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM.

The majority of our management fees are calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM.

Changes in the levels of our AUM are driven by market investment performance and net client cash flows.

We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns.

We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed required returns.

Approximately $20 billion, or 17%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee.

2 unchanged sentences

Fixed compensation and benefits represents base salaries and wages, payroll taxes and the costs of our employee benefit programs.

Variable compensation, calculated as described below, may be awarded in cash, equity or profit interests.

The arrangement in place with Acadian results in the sharing of economics between BSUS and Acadian’s key management personnel using a profit-sharing model.

Variable compensation is comprised of variable compensation at both Hold Co and Acadian LLC.

Hold Co variable compensation includes discretionary annual bonuses and may be paid in the form of cash or AAMI equity.

Acadian LLC variable compensation, calculated as described below, may be awarded in cash, equity, or profit interests.

The arrangement in place with Acadian LLC results in the sharing of economics between us and key management personnel using a profit-sharing model.

Profit sharing affects two elements within our earnings:

(i) the calculation of variable compensation and (ii) the level of Acadian’s equity or profit interests distribution to its employees.

Variable compensation is the portion of earnings that is contractually allocated to Acadian employees as a bonus pool, typically representing a percentage of earnings before variable compensation, which is measured as revenues less fixed compensation and benefits and other operating and administrative expenses.

Profits after variable compensation are shared between us and Acadian key employee equity holders according to our respective equity or profit interests ownership.

The sharing of profits in this manner ensures that the economic interests of Acadian key employees and those of BSUS are aligned, both in terms of generating strong annual earnings as well as investing those earnings back into the business in order to generate growth over the long term.

(i) the calculation of variable compensation and (ii) the level of Acadian LLC’s equity or profit interests distribution to its employees.

Variable compensation includes the portion of earnings that is contractually allocated to Acadian LLC employees as a bonus pool, typically representing a percentage of earnings before variable compensation, which is measured as revenues less fixed compensation and benefits and other operating and administrative expenses.

Profits after variable compensation are shared between us and Acadian LLC key employee equity holders according to our respective equity or profit interests ownership.

The sharing of profits in this manner ensures that the economic interests of Acadian LLC key employees and ours are aligned, both in terms of generating strong annual earnings as well as investing those earnings back into the business in order to generate growth over the long term.

We view profit sharing as an attractive operating model, as it allows us to share in the benefits of operating leverage as the business grows, and ensures all equity and profit interests holders are incentivized to achieve that growth.

Equity or profit interests owned by Acadian key employees are awarded as part of their variable compensation arrangement.

Over time, Acadian key employee-owned equity or profit interests are recycled from one generation of employee owners to the next, either by the next generation purchasing equity or profit interests directly from retiring principals, or by Acadian key employees forgoing cash bonuses in exchange for the equivalent value in Acadian equity or profit interests.

The recycling of equity or profit interests is often facilitated by BSUS;

Equity or profit interests owned by Acadian LLC key employees are awarded as part of their variable compensation arrangement.

Over time, Acadian LLC key employee-owned equity or profit interests are recycled from one generation of employee-owners to the next, either by the next generation purchasing equity or profit interests directly from retiring principals, or by key employees forgoing cash bonuses in exchange for the equivalent value in Acadian LLC equity or profit interests.

The recycling of equity or profit interests is often facilitated by Hold Co;

GAAP Results of Operations—U.S.

2 unchanged sentences

In this structure, key employees who are managing the business have incentives to manage for profit, but also to manage the business prudently, in the interest of their clients, and invest for growth, since they will benefit over the long term as both employees and equity holders.

In this way, Acadian is aligned with BSUS and the public shareholders to generate profits and growth over time.

In this way, key employees are aligned with the public stockholders to generate profits and growth over time.

How We Measure Performance

1 unchanged sentence

In measuring and monitoring the key components of our earnings, our management uses a non-GAAP financial measure, ENI, to evaluate the financial performance of, and to make operational decisions for, our business.

We also use ENI to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and Affiliate equity distributions, and incentivize management.

We also use ENI to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and Acadian LLC equity distributions, and incentivize management.

It is an important measure in evaluating our financial performance because we believe it most accurately represents our operating performance and cash generation capability.

1 unchanged sentence

GAAP as a result of both the reclassification of certain income statement items and the exclusion of certain non-cash or non-recurring income statement items.

In particular, ENI excludes non-cash charges representing the changes in the value of Affiliate equity and profit interests held by Affiliate key employees, the results of discontinued operations which are no longer part of our business, restructuring costs, capital transaction costs, seed capital and co-investment gains, losses and related financing costs, and that portion of consolidated Funds which are not attributable to our stockholders.

In particular, ENI excludes non-cash charges representing the changes in the value of Acadian LLC equity and profit interests held by key employees, the results of discontinued operations which are no longer part of our business, restructuring costs, capital transaction costs, seed capital and co-investment gains, losses and related financing costs, and that portion of consolidated Funds which are not attributable to our stockholders.

ENI revenue is primarily comprised of the fee revenues paid to us by our clients for our advisory services.

Revenue included within ENI differs from U.S.

GAAP revenue in that it excludes amounts from consolidated Funds which are not attributable to our stockholders, and it includes our share of earnings from our former equity-accounted Affiliate.

GAAP revenue in that it excludes amounts from consolidated Funds which are not attributable to our stockholders.

ENI expenses are calculated to reflect all usual expenses from ongoing continuing operations attributable to our stockholders.

Expenses included within ENI differ from U.S.

GAAP expenses in that they exclude amounts from consolidated Funds which are not attributable to our stockholders, revaluations of Affiliate key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, and certain other non-cash expenses.

GAAP expenses in that they exclude amounts from consolidated Funds which are not attributable to our stockholders, revaluations of Acadian LLC key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, and certain other non-cash expenses.

“Non-controlling interests” is a concept under U.S.

10 unchanged sentences

Revenue $ 505.6 $ 426.6 $ 417.2 $ 79.0 $ 9.4

Pre-tax income from continuing operations attributable to controlling interests

95.2 144.8 178.1 (49.6) (33.3)

Net income from continuing operations attributable to controlling interests

Pre-tax income attributable to controlling interests

123.9 95.2 144.8 28.7 (49.6)

22 unchanged sentences

Net client cash flows (in billions) 1.8 (2.3) (3.1) 4.1 0.8

Annualized revenue impact of net flows (8)

(4.8) (5.0) (10.3) 0.2 5.3

GAAP operating margin equals operating income from continuing operations divided by total revenue.

GAAP operating margin equals operating income divided by total revenue.

(2) Economic net income is a non-GAAP measure we use to evaluate the performance of our business.

1 unchanged sentence

GAAP financial information and a further discussion of economic net income refer to “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis.”

(3) Excludes severance costs at Acadian of $7.3 million, legal-related restructuring costs at the Center of $0.9 million and costs associated with the transfer of an insurance policy from our former Parent of $1.3 million for the year ended December 31, 2023.

(3) Excludes severance-related items of $(1.0) million, costs associated with the transfer of an insurance policy from our former parent of $1.3 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the year ended December 31, 2024.

Excludes severance costs of $7.3 million, legal-related restructuring costs at the Hold Co of $0.9 million, and costs associated with the transfer of an insurance policy from our former parent of $1.3 million for the year ended December 31, 2023.

Excludes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $1.2 million for the year ended December 31, 2022.

Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center and Affiliates of $3.8 million, costs associated with the transfer of an insurance policy from our former Parent of $1.2 million, and the gain on sale of subsidiaries of $48.6 million for the year ended December 31, 2021.

(4) ENI revenue is the ENI measure which corresponds to U.S.

1 unchanged sentence

(5) Pre-tax economic net income is the ENI measure which corresponds to U.S.

GAAP pre-tax income from continuing operations attributable to controlling interests.

GAAP pre-tax income attributable to controlling interests.

(6) ENI operating margin is a non-GAAP efficiency measure, calculated based on ENI operating earnings divided by ENI revenue.

ENI operating earnings is calculated as ENI revenue, less ENI operating expense, less ENI variable compensation.

The ENI operating margin is most comparable to our U.S.

The ENI operating margin is most directly comparable to our U.S.

GAAP operating margin (excluding the effect of consolidated Funds).

(7) Economic net income is the non-GAAP measure which is most directly comparable to U.S.

GAAP net income from continuing operations attributable to controlling interests.

(8) Annualized revenue impact of net flows represents annualized management fees expected to be earned on new accounts and net assets contributed to existing accounts, less the annualized management fees lost on terminated accounts or net assets withdrawn from existing accounts, plus revenue impact from reinvested income and distributions, including our equity-accounted Affiliate.

The annualized management fees are calculated by multiplying the annual gross fee rate for the relevant account by the net assets gained in the account in the event of a positive flow, excluding any current or future market appreciation or depreciation, or the net assets lost in the account in the event of an outflow, excluding any current or future market appreciation or depreciation.

In addition, reinvested income and distributions are multiplied by the average fee rate to compute the revenue impact.

For a further discussion of the uses and limitations of the annualized revenue impact of net flows, see “Assets Under Management” herein.

GAAP net income attributable to controlling interests.

Assets Under Management

2 unchanged sentences

($ in billions) December 31, 2024 December 31, 2023 December 31, 2022

Acadian Asset Management $ 103.7 $ 93.6 $ 117.2

$ 117.3 $ 103.7 $ 93.6

Our strategies include:

Developed Markets equity, which includes Quant & Solutions U.S., global, and international equities;

Emerging Markets equity, which includes Quant & Solutions equity investments in the emerging and frontier markets

Developed Markets, which includes U.S., global and international strategies;

Developing Markets, which includes investments in the emerging and frontier markets.

The following table presents our assets under management by strategy as of each of the dates indicated:

1 unchanged sentence

Developed Markets $ 91.0 $ 80.7 $ 73.2

Emerging Markets 23.0 20.4 27.9

Developing Markets

26.3 23.0 20.4

Total assets under management $ 117.3 $ 103.7 $ 93.6

10 unchanged sentences

3.5 3.0 % 3.4 3.3 % 3.1 3.3 %

Mutual Fund 0.7 0.7 % 0.6 0.6 % 1.0 0.9 %

Other 8.5 7.2 % 6.6 6.4 % 4.6 4.9 %

9 unchanged sentences

Total assets under management $ 117.3 $ 103.7 $ 93.6

AUM flows and the annualized revenue impact of net flows

Net client cash flows and revenue impact of net client cash flows for all periods include reinvested income and distributions.

Net client cash flows for all periods include reinvested income and distributions.

Reinvested income and distributions represent investment yield that is reinvested back into the portfolios as opposed to distributed as cash.

In the following table, we present our asset flows and market appreciation (depreciation) by segment.

We also present a key metric used to better understand our asset flows, the annualized revenue impact of net client cash flows.

Annualized revenue impact of net flows represents annualized management fees expected to be earned on new accounts and net assets contributed to existing accounts (inflows), less the annualized management fees lost on terminated accounts or net assets withdrawn from existing accounts (outflows), plus revenue impact from reinvested income and distributions.

Annualized management fee for client flow is calculated by multiplying the annual gross fee rate for the relevant account with the inflow or the outflow, including our equity-accounted Affiliate.

In addition, reinvested income and distributions is multiplied by the average fee rate for the respective segment to compute the revenue impact.

The annualized revenue impact of net flows metric is designed to provide investors with a better indication of the potential financial impact of net client cash flows, however it has certain limitations.

For instance, it does not include assumptions for the next twelve months’ market appreciation or depreciation and investment performance associated with the assets gained or lost.

Nor does it account for factors such as future client terminations or additional contributions or withdrawals over the next twelve months.

Additionally, the basis points reported are fee rates based on the asset levels at the time of the transactions and do not consider the fact that client fee rates may change over the next twelve months.

The following table summarizes our asset flows and market appreciation (depreciation) by segment for each of the periods indicated:

9 unchanged sentences

Ending balance $ 117.3 $ 103.7 $ 93.6

Average AUM (2)

$ 112.3 $ 98.4 $ 98.7

Liquid Alpha (3)

Beginning balance $ — $ — $ 3.2

Sale of Affiliates — — —

Gross inflows — — —

Gross outflows — — —

Reinvested income and distributions — — —

Net flows — — —

Market appreciation (depreciation) — — —

Ending balance $ — $ — $ —

Average AUM $ — $ — $ —

Beginning balance $ — $ — $ 5.8

Sale of Affiliates — — (8.9)

Gross inflows — — 0.7

Gross outflows — — (0.2)

Net flows — — 0.5

Market appreciation

Other (1)(3)(4)

Ending balance $ — $ — $ —

Average AUM $ — $ — $ 5.4

Average AUM of consolidated Affiliates $ — $ — $ 2.9

Beginning balance $ 93.6 $ 117.2 $ 116.0

Sale of Affiliates — — (8.9)

Gross inflows 9.3 11.1 11.3

Gross outflows (15.2) (18.0) (19.9)

Reinvested income and distributions 3.6 3.8 2.7

Net flows (2.3) (3.1) (5.9)

Market appreciation (depreciation) 12.4 (20.5) 16.1

Ending balance

$ 103.7 $ 93.6 $ 117.2

Average AUM $ 98.4 $ 98.7 $ 119.3

Average AUM of consolidated Affiliates $ 98.4 $ 98.7 $ 116.8

Annualized basis points:

inflows 48.7 46.6 46.4

Annualized basis points:

outflows 42.2 39.6 36.5

Annualized revenue impact of net flows ($ in millions)

$ (4.8) $ (5.0) $ (10.3)

(1) AUM representing liquid alternative strategies previously excluded from the Quant & Solutions segment has been reclassified as of January 1, 2021.

(2) Average AUM equals average AUM of consolidated Affiliates.

(3) ICM has been reclassified to the Other category as of the beginning of the first quarter of 2021.

The Other category includes movements of our previously disposed affiliates, Campbell Global and ICM, for the year ended December 31, 2021.

(4) Other movements related to billable assets adjustment for our previous Affiliate.

We also analyze our asset flows by client type and client location.

5 unchanged sentences

also includes corporate and union-sponsored pension plans;

Retail/other, which includes assets managed for mutual funds sponsored by our Affiliates, defined contribution plans and accounts managed for high net worth clients.

Retail/other, which includes assets managed for mutual funds sponsored by Acadian LLC, defined contribution plans and accounts managed for high net worth clients.

The following table summarizes our asset flows by client type for each of the periods indicated:

2 unchanged sentences

Beginning balance $ 12.8 $ 11.8 $ 14.1

Sale of Affiliates — — (0.4)

Gross inflows 1.5 1.5 1.3

6 unchanged sentences

Beginning balance $ 84.3 $ 77.2 $ 97.8

Sale of Affiliates — — (6.0)

Gross inflows 17.9 6.3 8.3

6 unchanged sentences

Beginning balance $ 6.6 $ 4.6 $ 5.3

Sale of Affiliates — — (2.5)

Gross inflows 1.8 1.5 1.5

5 unchanged sentences

Beginning balance $ 103.7 $ 93.6 $ 117.2

Sale of Affiliates — — (8.9)

Gross inflows 21.2 9.3 11.1

4 unchanged sentences

Ending balance $ 117.3 $ 103.7 $ 93.6

$ 103.7 $ 93.6 $ 117.2

(1) Other movements related to billable assets adjustment for our previous Affiliate.

Our categorization of assets under management by client location includes:

5 unchanged sentences

Beginning balance $ 69.9 $ 62.7 $ 77.1

Sale of Affiliates — — (7.9)

Gross inflows 8.6 5.4 6.0

5 unchanged sentences

Beginning balance $ 33.8 $ 30.9 $ 40.1

Sale of Affiliates — (1.0)

Gross inflows 12.6 3.9 5.1

5 unchanged sentences

Beginning balance $ 103.7 $ 93.6 $ 117.2

Sale of Affiliates — — (8.9)

Gross inflows 21.2 9.3 11.1

5 unchanged sentences

$ 117.3 $ 103.7 $ 93.6

(1) Other movements related to billable assets adjustment for our previous Affiliate.

At December 31, 2024, our total assets under management were $117.3 billion, an increase of $13.6 billion or 13.1%, compared to $103.7 billion at December 31, 2023.

The assets under management at December 31, 2022 represented a decrease of $(23.6) billion or (20.1)% compared to $117.2 billion at December 31, 2021.

The assets under management at December 31, 2023 represented an increase of $10.1 billion or 10.8% compared to $93.6 billion at December 31, 2022.

The change in assets under management during the year ended December 31, 2024 reflects net market appreciation of $11.8 billion and net flows of $1.8 billion, including reinvested income and distributions of $3.3 billion.

The change in assets under management during the year ended December 31, 2023 reflects net market appreciation of $12.4 billion and net flows of $(2.3) billion, including reinvested income and distributions of $3.6 billion.

The change in assets under management during the year ended December 31, 2022 reflects net market depreciation of $(20.5) billion and net flows of $(3.1) billion, including reinvested income and distributions of $3.8 billion.

The change in assets under management during the year ended December 31, 2021 reflects the sale of Campbell Global and ICM of $(8.9) billion, net flows of $(5.9) billion, including reinvested income and distributions of $2.7 billion, and realizations and other of $(0.1) billion, offset by net market appreciation of $16.1 billion.

For the year ended December 31, 2023, our net outflows were $(2.3) billion compared to net outflows of $(3.1) billion for the year ended December 31, 2022 and net outflows of $(5.9) billion for the year ended December 31, 2021.

The change in net outflows for the year ended December 31, 2023 was primarily due to lower outflows in certain Acadian strategies, partly as a result of less sizeable client-driven asset re-allocation.

The change in net outflows for the year ended December 31, 2022 was primarily due to lower outflows in certain Acadian strategies, partly as the result of improved relative investment performance in the year ended December 31, 2022.

For the year ended December 31, 2024, our net inflows were $1.8 billion compared to net outflows of $(2.3) billion for the year ended December 31, 2023 and net outflows of $(3.1) billion for the year ended December 31, 2022.

The change in net flows for the year ended December 31, 2024 was primarily driven by gross sales, which increased to $21.2 billion for the year ended December 31, 2024.

The change in net flows for the year ended December 31, 2023 was primarily due to lower outflows in certain strategies, partly as a result of client-driven asset re-allocations.

The change in net flows for the year ended December 31, 2022 was primarily due to lower outflows in certain strategies, partly as the result of improved relative investment performance in the year ended December 31, 2022.

Reinvested income and distributions of $3.3 billion, $3.6 billion, and $3.8 billion are reflected in the net flows for the years ended December 31, 2024, 2023 and 2022, respectively.

For the year ended December 31, 2023, the annualized revenue impact of the net flows improved to $(4.8) million compared to $(5.0) million for the year ended December 31, 2022 and $(10.3) million for the year ended December 31, 2021.

GAAP Results of Operations

7 unchanged sentences

Performance fees 71.4 50.4 49.4 21.0 1.0

Other revenue — — 5.7 — (5.7)

Consolidated Funds’ revenue 3.1 3.0 0.4 0.1 2.6

3 unchanged sentences

Amortization of acquired intangibles — — 0.1 — (0.1)

— 0.1 0.1 (0.1) —

Depreciation and amortization 18.5 17.3 18.5 1.2 (1.2)

3 unchanged sentences

Investment income (loss) 2.2 (0.1) 0.2 2.3 (0.3)

(0.1) 0.2 8.3 (0.3) (8.1)

Interest income 3.5 6.1 0.8 (2.6) 5.3

1 unchanged sentence

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

Gain on sale of subsidiaries — — 48.6 — (48.6)

Net consolidated Funds’ investment gains (losses) 3.9 4.1 (0.4) (0.2) 4.5

4.1 (0.4) — 4.5 (0.4)

Income from continuing operations before taxes

Income before taxes

125.7 96.5 144.8 29.2 (48.3)

Income tax expense 38.9 29.4 44.2 9.5 (14.8)

Income from continuing operations 67.1 100.6 128.1 (33.5) (27.5)

Income from discontinued operations, net of tax — — 77.3 — (77.3)

Gain on disposal of discontinued operations, net of tax — — 691.0 — (691.0)

Net income 86.8 67.1 100.6 19.7 (33.5)

1 unchanged sentence

Net income attributable to controlling interests $ 85.0 $ 65.8 $ 100.6 $ 19.2 $ (34.8)

$ 65.8 $ 100.6 $ 828.4 $ (34.8) $ (727.8)

Basic earnings per share ($) $ 2.25 $ 1.59 $ 2.39 $ 0.66 $ (0.80)

1 unchanged sentence

Weighted average shares of common stock outstanding—basic 37.8 41.5 42.1 (3.7) (0.6)

41.5 42.1 77.2 (0.6) (35.1)

Weighted average shares of common stock outstanding—diluted 38.3 42.5 43.2 (4.2) (0.7)

42.5 43.2 80.5 (0.7) (37.3)

GAAP operating margin (2)

27 % 25 % 40 % 195 bps (1540) bps

(1) Certain Funds have been consolidated due to our seed capital or co-investments in the Funds.

GAAP operating margin equals operating income from continuing operations divided by total revenue.

The following table reconciles our net income attributable to controlling interests to our pre-tax income from continuing operations attributable to controlling interests:

(1) Certain Funds have been consolidated due to our seed capital investments in the Funds.

GAAP operating margin equals operating income divided by total revenue.

The following table reconciles our net income attributable to controlling interests to our pre-tax income from attributable to controlling interests:

Years ended December 31,

2 unchanged sentences

Net income attributable to controlling interests $ 85.0 $ 65.8 $ 100.6

Net income from discontinued operations attributable to controlling interests — — (700.3)

Net income from continuing operations attributable to controlling interests 65.8 100.6 128.1

Income tax expense 38.9 29.4 44.2

Pre-tax income from continuing operations attributable to controlling interests $ 95.2 $ 144.8 $ 178.1

Pre-tax income attributable to controlling interests

$ 123.9 $ 95.2 $ 144.8

GAAP Revenues

1 unchanged sentence

management fees earned based on our overall weighted average fee rate charged to our clients and the level of assets under management;

performance fees earned when our Affiliates’ investment performance over agreed time periods for certain clients has differed from pre-determined hurdles;

other revenue, consisting primarily of consulting services as well as reimbursement of certain Fund expenses our Affiliates paid on behalf of our Funds;

performance fees earned when our investment performance over agreed time periods for certain clients has differed from pre-determined hurdles;

revenue from consolidated Funds, a portion of which is attributable to the holders of non-controlling interests in consolidated Funds.

2 unchanged sentences

Average basis points earned on average assets under management were 38.4 bps for the year ended December 31, 2024, 37.9 bps for the year ended December 31, 2023 and 37.2 bps for the year ended December 31, 2022.

The greatest driver of increases or decreases in this average fee rate is changes in the mix of our assets under management caused by net inflows or outflows in certain asset classes, dispositions, and disproportionate market movements.

The greatest driver of increases or decreases in the average fee rate are changes in the mix of our assets under management caused by net inflows or outflows in certain asset classes, and disproportionate market movements.

Year ended December 31, 2024 compared to year ended December 31, 2023:

Management fees increased $57.9 million, or 15.5%, from $373.2 million for the year ended December 31, 2023 to $431.1 million for the year ended December 31, 2024.

The increase was primarily due to the improvement in blended average basis points on assets under management, due to fee rates from inflows being higher than outflows in 2022 and 2023.

Average assets under management decreased (0.3)%, from $98.7 billion for the year ended compared to $98.4 billion for the year ended December 31, 2023, mainly due to large equity market declines in 2022 that reduced the beginning of 2023 assets under management to $93.6 billion.

The increase was mainly driven by higher levels of average assets under management and an improvement in blended average basis points on assets under management, due to fee rates on inflows being higher than fee rates on outflows in the years ended December 31, 2024 and 2023.

Average assets under management increased 14.1%, from $98.4 billion for the year ended December 31, 2023 compared to $112.3 billion for the year ended December 31, 2024, mainly due to the positive equity market in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Management fees decreased $(65.9) million, or (15.2)%, from $433.3 million for the year ended December 31, 2021 to $367.4 million for the year ended December 31, 2022.

The decrease was primarily due to a decrease in average assets under management, a decrease in performance fees, as well as the disposition of Campbell Global in the third quarter of 2021.

Average assets under management excluding our previous equity-accounted Affiliate decreased (15.0)%, from $116.8 billion for the year ended December 31, 2021 to $98.7 billion for the year ended December 31, 2022, primarily due to the negative market and net outflows over the previous twelve months, as well as the disposition of Campbell Global in the third quarter of 2021.

Management fees increased $5.8 million, or 1.6%, from $367.4 million for the year ended December 31, 2022 to $373.2 million for the year ended December 31, 2023.

The increase was primarily due to an improvement in blended average basis points on assets under management, due to fee rates on inflows being higher than fee rates on outflows in 2022 and 2023.

Average assets under management decreased (0.3)%, from $98.7 billion for the year ended December 31, 2022 to $98.4 billion for the year ended December 31, 2023, mainly due to large equity market declines in 2022 that reduced the beginning of 2023 assets under management to $93.6 billion.

Performance Fees

Approximately $14.0 billion, or 14% of our AUM at December 31, 2023, are in accounts with performance fee features in which we participate.

Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Approximately $20 billion, or 17% of our AUM at December 31, 2024, were in accounts with performance fee features in which we participate.

Performance fees are typically shared with key employees through various contractual compensation and profit-sharing arrangements.

Year ended December 31, 2024 compared to year ended December 31, 2023:

Performance fees increased $1.0 million, or 2.0%, from $49.4 million for the year ended December 31, 2022 to $50.4 million for the year ended December 31, 2023, primarily due to strong performance relative to market in certain strategies.

Performance fees increased $21.0 million, or 41.7%, from $50.4 million for the year ended December 31, 2023 to $71.4 million for the year ended December 31, 2024, primarily due to strong performance relative to benchmarks in certain strategies.

Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Performance fees decreased $(35.4) million, or (41.7)%, from $84.8 million for the year ended December 31, 2021 to $49.4 million for the year ended December 31, 2022.

The decrease is partially driven by the reduction in assets under management, changes in outperformance during the year, and the disposition of Campbell Global in the third quarter of 2021.

Other Revenue

Year ended December 31, 2023 compared to year ended December 31, 2022:

There was no other revenue for the year ended December 31, 2023 and the year ended December 31, 2022.

Year ended December 31, 2022 compared to year ended December 31, 2021:

Other revenue was $5.7 million for the year ended December 31, 2021.

There was no other revenue for the year ended December 31, 2022.

The decrease was attributable to the sale of Campbell Global during the year ended December 31, 2021.

Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

GAAP Expenses

GAAP expenses principally consist of:

compensation paid to our investment professionals and other employees, including base salary, benefits, sales-based compensation, variable compensation, Affiliate distributions, and revaluation of key employee owned Affiliate equity and profit interests;

compensation paid to our investment professionals and other employees, including base salary, benefits, sales-based compensation, variable compensation, Acadian LLC key employee distributions, and revaluation of key employee-owned Acadian LLC equity and profit interests;

general and administrative expenses;

3 unchanged sentences

Compensation and Benefits Expense

Our most significant category of expense is compensation and benefits awarded to our and our Affiliates’ employees.

Our most significant category of expense is compensation and benefits awarded to our employees.

The following table presents the components of U.S.

7 unchanged sentences

122.7 112.2 100.3

Affiliate key employee distributions (4)

Non-cash Affiliate key employee equity revaluations (5)

Acadian LLC key employee distributions (4)

Non-cash Acadian LLC key employee equity revaluations (5)

23.2 (0.1) (40.0)

1 unchanged sentence

(1) Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided.

For the year ended December 31, 2023, $93.1 million of fixed compensation and benefits (of the $93.1 million above) is included within economic net income.

For the year ended December 31, 2022, $86.1 million of fixed compensation and benefits (of the $86.1 million above) is included within economic net income.

For the year ended December 31, 2021, $97.2 million of fixed compensation and benefits (of the $100.2 million above) is included within economic net income, which excludes Fund expenses initially paid by our Affiliates on the Fund’s behalf and subsequently reimbursed.

The year ended December 31, 2021 reflects the recategorization of Fund expenses reimbursed by customers of Campbell Global, a former Affiliate that was divested in August 2021.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

(2) Sales-based compensation is paid to our Affiliates’ sales and distribution teams and represents compensation earned by our sales professionals, paid over a multi-year period, related to revenue earned on new sales.

(2) Sales-based compensation is paid to our sales and distribution teams and represents compensation earned by our sales professionals, paid over a multi-year period, related to revenue earned on new sales.

Its variability is based upon the structure of sales-based compensation due on inflows of assets under management and market-based movement in both current and prior periods.

(3) Variable compensation is contractually set and calculated individually at each Affiliate, plus Center bonuses.

Variable compensation is usually awarded based on a contractual percentage of each Affiliate’s ENI profits before variable compensation and may be paid in the form of cash or non-cash Affiliate equity or profit interests.

In Affiliates with an agreed split of performance fees between Affiliate employees and BSUS, the Affiliates’ share of performance fees, which ranges between 60%-75% of the total, is allocated entirely to variable compensation.

For certain Affiliates, the variable compensation earned on performance fees vest over three-years and compensation expense is recognized over that service period.

Center variable compensation includes cash and BSIG equity.

(3) Variable compensation includes the portion of earnings that is contractually allocated to Acadian LLC employees as a bonus pool, plus Hold Co bonuses.

Variable compensation may be paid in the form of cash or non-cash equity or profit interests awards.

We have a contractual split of performance fees between Acadian LLC employees and AAMI.

Acadian LLC’s share of performance fees, which ranges between 60%-75% of the total, is allocated entirely to variable compensation.

The variable compensation earned on performance fees vests over three-years and compensation expense is recognized over that service period.

Hold Co variable compensation includes cash and our equity.

Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period.

5 unchanged sentences

$ 122.7 $ 112.2 $ 100.3

(a) For the year ended December 31, 2023, $104.9 million of variable compensation expense (of the $112.2 million above) is included within economic net income, which excludes the variable compensation associated with restructuring at Acadian of $7.3 million.

(a) For the year ended December 31, 2024, $122.8 million of variable compensation expense (of the $122.7 million above) is included within economic net income, which excludes the variable compensation associated with restructuring of $(1.0) million and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million.

For the year ended December 31, 2023, $104.9 million of variable compensation expense (of the $112.2 million above) is included within economic net income, which excludes the variable compensation associated with restructuring of $7.3 million.

For the year ended December 31, 2022, $100.3 million of variable compensation expense (of the $100.3 million above) is included within economic net income.

For the year ended December 31, 2021, $129.6 million of variable compensation expense (of the $130.5 million above) is included within economic net income, which excludes the variable compensation associated with restructuring at an Affiliate of $0.9 million.

(4) Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests.

The Affiliate key employee distribution ratio at each Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate.

At certain Affiliates with tiered equity structures, BSUS and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold, the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages.

(5) Non-cash Affiliate key employee equity revaluations represent changes in the value of Affiliate equity and profit interests held by Affiliate key employees.

These ownership interests may, in certain circumstances, be repurchased by BSUS at a value based on a pre-determined fixed multiple of twelve-month earnings and as such a liability is carried on our balance sheet based on the expected cash to be paid.

However, any equity or profit interests repurchased by BSUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.

Our Affiliate equity and profit interest plans have been designed to ensure BSUS is not required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

(4) Acadian LLC key employee distributions represent the share of Acadian LLC profits after variable compensation that is attributable to key employee equity and profit interests holders, according to their ownership interests.

Acadian LLC key employee distribution ratio is calculated as Acadian LLC key employee distributions divided by ENI operating earnings.

Within Acadian LLC we have a tiered equity structure, where AAMI and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold, the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages.

(5) Non-cash Acadian LLC key employee equity revaluations represent changes in the value of Acadian LLC equity and profit interests held by key employees.

These ownership interests may in certain circumstances be repurchased by Hold Co at a value based on a pre-determined fixed multiple of twelve-month earnings and as such a liability is carried on our balance sheet based on the expected cash to be paid.

However, any equity or profit interests repurchased by Hold Co can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.

The Acadian LLC equity and profit interest plans have been designed to ensure Hold Co is not required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

Fluctuations in compensation and benefits expense for the periods presented are discussed below.

1 unchanged sentence

Compensation and benefits expense increased $47.6 million, or 21.8%, from $217.9 million for the year ended December 31, 2023 to $265.5 million for the year ended December 31, 2024.

Fixed compensation and benefits increased $7.0 million, or 8.1%, from $86.1 million for the year ended December 31, 2022 to $93.1 million for the year ended December 31, 2023, primarily reflecting cost of living increases and the new hires to support our growth initiatives.

Fixed compensation and benefits increased $4.7 million, or 5.0%, from $93.1 million for the year ended December 31, 2023 to $97.8 million for the year ended December 31, 2024, primarily reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring at Acadian LLC in late 2023.

Variable compensation increased $10.5 million, or 9.4%, from $112.2 million for the year ended December 31, 2023 to $122.7 million for the year ended December 31, 2024.

The increase was primarily attributable to severance-related costs at Acadian in the year ended December 31, 2023 and the inclusion of deferred compensation expense earned on current and prior year performance fee revenues, of which Acadian’s share is determined by a contractual split and recognized as compensation expense over a vesting period.

Sales-based compensation decreased $(0.1) million, or (1.3)%, from $7.7 million for the year ended December 31, 2022 to $7.6 million for the year ended December 31, 2023 as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Affiliate key employee distributions were unchanged at $5.1 million for each of the years ended December 31, 2023 and 2022, respectively.

Revaluations of Affiliate key employee equity changed $39.9 million in 2023, reflecting revaluations of key employee ownership interests at Acadian, as the value of the equity plan liability decreased $(40.0) million for the year ended December 31, 2022, and decreased $(0.1) million for the year ended December 31, 2023.

The changes in value year over year reflect changes in earnings, as well as changes in inputs used in the valuation model, including market risk assumptions and discount rates.

The increase was primarily attributable to higher pre-bonus profits in the year ended December 31, 2024, partially offset by lower restructuring expenses in the current year.

Sales-based compensation increased $4.5 million, or 59.2%, from $7.6 million for the year ended December 31, 2023 to $12.1 million for the year ended December 31, 2024, driven by higher gross sales in the current year.

Acadian LLC key employee distributions increased $4.6 million, or 90.2%, from $5.1 million for the year ended December 31, 2023 to $9.7 million for the year ended December 31, 2024.

Acadian LLC key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold.

The change in Acadian LLC key employee distributions during the current period is driven by higher operating earnings in the current period and the leveraged nature of this distribution share.

Revaluations of Acadian LLC key employee equity changed by $23.3 million in 2024, reflecting revaluations of key employee ownership interests at Acadian LLC, as the value of the equity plan liability decreased $(0.1) million for the year ended December 31, 2023, and increased $23.2 million for the year ended December 31, 2024.

For certain tiers of Acadian LLC equity, revaluations are calculated based on earnings above a threshold.

The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Acadian LLC equity.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Compensation and benefits expense decreased $(125.4) million, or (44.1)%, from $284.6 million for the year ended December 31, 2021 to $159.2 million for the year ended December 31, 2022.

Fixed compensation and benefits decreased $(14.1) million, or (14.1)%, from $100.2 million for the year ended December 31, 2021 to $86.1 million for the year ended December 31, 2022, primarily reflecting the disposition of Affiliates.

Variable compensation decreased $(30.2) million, or (23.1)%, from $130.5 million for the year ended December 31, 2021 to $100.3 million for the year ended December 31, 2022.

The decrease was primarily attributable to lower pre-bonus profits in the year ended December 31, 2022 and the disposition of Campbell Global.

The decrease was partially offset by the inclusion of deferred compensation expense earned on prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period.

Sales-based compensation increased $0.1 million, or 1.3%, from $7.6 million for the years ended December 31, 2021 to $7.7 million for the year ended December 31, 2022.

Affiliate key employee distributions decreased $(8.3) million, or (61.9)%, from $13.4 million for the year ended December 31, 2021 to $5.1 million for the year ended December 31, 2022 as a result of lower underlying operating earnings at the consolidated Affiliates.

Revaluations of Affiliate key employee equity changed by $(72.9) million in 2022, reflecting revaluations of key employee ownership interests at our consolidated Affiliates, as the value of Affiliate equity increased $32.9 million for the year ended December 31, 2021, and decreased $(40.0) million for the year ended December 31, 2022.

Compensation and benefits expense increased $58.7 million, or 36.9%, from $159.2 million for the year ended December 31, 2022 to $217.9 million for the year ended December 31, 2023.

Variable compensation increased $11.9 million, or 11.9%, from $100.3 million for the year ended December 31, 2022 to $112.2 million for the year ended December 31, 2023.

The increase was primarily attributable to severance-related costs in the year ended December 31, 2023 and the inclusion of deferred compensation expense earned on current and prior year performance fee revenues, of which Acadian LLC’s share is determined by a contractual split and recognized as compensation expense over a vesting period.

Sales-based compensation decreased $(0.1) million, or (1.3)%, from $7.7 million for the years ended December 31, 2022 to $7.6 million for the year ended December 31, 2023 as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods.

Acadian LLC key employee distributions were unchanged at $5.1 million for the year ended December 31, 2023 and 2022, respectively.

Revaluations of Acadian LLC key employee equity changed by $39.9 million in 2023, reflecting revaluations of key employee ownership interests at Acadian LLC, as the value of the equity plan liability decreased $(40.0) million for the year ended December 31, 2022, and decreased $(0.1) million for the year ended December 31, 2023.

The changes in value year over year reflect changes in earnings, as well as changes in inputs used in the valuation model, including market risk assumptions and discount rates.

2 unchanged sentences

General and administrative expense increased $2.6 million, or 3.1%, from $82.6 million for the year ended December 31, 2023 to $85.2 million for the year ended December 31, 2024.

The increase was primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

The increase was primarily due to higher systems, outside services and portfolio administrative costs, our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Year ended December 31, 2023 compared to year ended December 31, 2022:

General and administrative expense decreased $(0.1) million, or (0.1)%, from $71.2 million for the year ended December 31, 2021 to $71.1 million for the year ended December 31, 2022.

The decrease was primarily due to the disposition of Affiliates, offset partially by an increase in travel and entertainment, consulting, and system costs in the year ended December 31, 2022.

General and administrative expense increased $11.5 million, or 16.2%, from $71.1 million for the year ended December 31, 2022 to $82.6 million for the year ended December 31, 2023.

The increase was primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

Amortization of Acquired Intangibles Expense

Year ended December 31, 2024 compared to year ended December 31, 2023:

There was no amortization of acquired intangibles expense for the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Amortization of acquired intangibles expense was $0.1 million for the year ended December 31, 2022.

There was no amortization of acquired intangibles expense for the year ended December 31, 2023 .

This account reflects the amortization of intangible assets acquired by Acadian.

Year ended December 31, 2022 compared to year ended December 31, 2021:

Amortization of acquired intangibles expense was unchanged at $0.1 million for the years ended December 31, 2022 and 2021, respectively.

This account reflects the amortization of intangible assets acquired by Acadian.

This account reflects the amortization of intangible assets acquired in previous periods.

Depreciation and Amortization Expense

Year ended December 31, 2024 compared to year ended December 31, 2023:

Depreciation and amortization expense decreased $(1.2) million, or (6.5)%, from $18.5 million for the year ended December 31, 2022 to $17.3 million for the year ended December 31, 2023.

The decrease was primarily attributable to the effect of certain assets becoming fully depreciated.

Depreciation and amortization expense increased $1.2 million, or 6.9%, from $17.3 million for the year ended December 31, 2023 to $18.5 million for the year ended December 31, 2024.

The increase was primarily attributable to additional software and technology investments in the business.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Depreciation and amortization expense decreased $(1.2) million, or (6.5)%, from $18.5 million for the year ended December 31, 2022 to $17.3 million for the year ended December 31, 2023.

The decrease was primarily attributable to the effect of certain assets becoming fully depreciated and the disposition of Affiliates in 2021.

The decrease was primarily attributable to the effect of certain assets becoming fully depreciated.

GAAP Other Non-Operating Items of Income and Expense

4 unchanged sentences

loss on extinguishment of debt

gain on sale of subsidiaries

Investment Income

Investment Income (loss)

Year ended December 31, 2024 compared to year ended December 31, 2023:

Investment income decreased $(0.3) million, or (150.0)%, from $0.2 million for the year ended December 31, 2022 to $(0.1) million for the year ended December 31, 2023.

The decrease is due to a decrease in returns generated by seed capital investments in the year ended December 31, 2023.

Investment income increased $2.3 million, from $(0.1) million for the year ended December 31, 2023 to $2.2 million for the year ended December 31, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Investment income decreased $(8.1) million, or (97.6)%, from $8.3 million for the year ended December 31, 2021 to $0.2 million for the year ended December 31, 2022.

The decrease is due to lower returns generated by seed capital investments in the current year driven by the market decline in the year ended December 31, 2022.

Investment income (loss) changed $(0.3) million, from $0.2 million for the year ended December 31, 2022 to $(0.1) million for the year ended December 31, 2023.

The decrease is due to a decrease in returns generated by seed capital investments in the year ended December 31, 2023.

Interest Income

Year ended December 31, 2024 compared to year ended December 31, 2023:

Interest income increased $5.3 million, from $0.8 million for the year ended December 31, 2022 to $6.1 million for the year ended December 31, 2023.

The increase was due to higher average cash balances and an increase in short-term investment returns in 2023.

Interest income decreased $(2.6) million, from $6.1 million for the year ended December 31, 2023 to $3.5 million for the year ended December 31, 2024.

The decrease was due to lower average cash balances and decreases in short-term investment returns in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Interest income increased $5.3 million, from $0.8 million for the year ended December 31, 2022 to $6.1 million for the year ended December 31, 2023.

The increase was due to an increase in short-term investment returns in 2022.

The increase was due to higher average cash balances and an increase in short-term investment returns in 2023.

Interest Expense

Year ended December 31, 2024 compared to year ended December 31, 2023:

Interest expense decreased $0.9 million, or 4.4%, from $20.5 million for the year ended December 31, 2022 to $19.6 million for the year ended December 31, 2023, primarily due to the $1.3 million of additional interest expense incurred for the year ended December 31, 2022 related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Interest expense decreased $0.2 million, or 1.0%, from $19.6 million for the year ended December 31, 2023 to $19.4 million for the year ended December 31, 2024, reflecting lower interest rates in the current year, partially offset by higher balances drawn on the revolving credit facility in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Interest expense decreased $(4.3) million, or (17.3)%, from $24.8 million for the year ended December 31, 2021 to $20.5 million for the year ended December 31, 2022, primarily reflecting a lower balance of third party borrowings in 2022, slightly offset by $1.3 million of additional interest expense related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Interest expense decreased $0.9 million, or 4.4%, from $20.5 million for the year ended December 31, 2022 to $19.6 million for the year ended December 31, 2023, primarily due to the $1.3 million of additional interest expense incurred for the year ended December 31, 2023 related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Loss on Extinguishment of Debt

Year ended December 31, 2024 compared to year ended December 31, 2023:

There was no loss on extinguishment of debt for the year ended December 31, 2023.

Loss on extinguishment of debt was $3.2 million for the year ended December 31, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

There was no loss on extinguishment of debt for the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022:

1 unchanged sentence

Gain on Sale of Subsidiaries

Year ended December 31, 2023 compared to year ended December 31, 2022:

There was no gain on sale of subsidiaries in the years ended December 31, 2023 and 2022.

Year ended December 31, 2022 compared to year ended December 31, 2021:

Gain on sale of subsidiaries was $48.6 million for the year ended December 31, 2021, representing our gain on sale of our equity interest in ICM and Campbell Global, slightly offset by the loss on disposition of a business unit during the year ended December 31, 2021.

There was no gain on sale of subsidiaries in the year ended December 31, 2022.

GAAP Income Tax Expense

Our effective tax rate has been impacted by changes in liabilities for uncertain tax positions, tax effects of stock-based compensation, limitations on executive compensation, the mix of income earned in the United States versus lower-taxed foreign jurisdictions.

Our effective tax rate has been impacted by state and local tax obligations, changes in liabilities for uncertain tax positions, tax effects of stock-based compensation, limitations on executive compensation, and the mix of income earned in the United States versus foreign jurisdictions.

Our effective tax rate could be impacted in the future by these items as well as further changes in tax laws and regulations in jurisdictions in which we operate.

Year ended December 31, 2024 compared to year ended December 31, 2023:

Income tax expense decreased $(14.8) million, from $44.2 million for the year ended December 31, 2022 to $29.4 million for the year ended December 31, 2023.

The decrease in income tax expense is primarily related to the decrease in income from continuing operations for the year ended December 31, 2023.

Income tax expense increased $9.5 million, from $29.4 million for the year ended December 31, 2023 to $38.9 million for the year ended December 31, 2024.

The increase in income tax expense is primarily related to the increase in pre-tax income from controlling interests for the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Income tax expense decreased $(14.8) million, from $44.2 million for the year ended December 31, 2022 to $29.4 million for the year ended December 31, 2023.

The decrease in income tax expense is primarily related to the decrease in the income from continuing operations for the year ended December 31, 2022.

The decrease in income tax expense is primarily related to the decrease in pre-tax income from controlling interests for the year ended December 31, 2023.

GAAP Consolidated Funds

2 unchanged sentences

Consolidated Funds’ revenue increased $0.1 million, from $3.0 million for the year ended December 31, 2023 to $3.1 million for the year ended December 31, 2024.

Consolidated Funds’ expense increased $2.4 million, from $0.4 million for the year ended $0.4 million to $2.8 million for the year ended December 31, 2023.

The increase in Consolidated Funds’ revenue and increase in Consolidated Funds’ expense is due to changes in the population of Consolidated Funds during the year ended December 31, 2023.

Year ended December 31, 2022 compared to year ended December 31, 2021:

Consolidated Funds’ revenue was $0.4 million for the year ended December 31, 2022.

Consolidated Funds’ expense was $0.4 million for the year ended December 31, 2022.

There were no consolidated Funds during the year ended December 31, 2021.

Discontinued Operations

As discussed further in Note 3 of our accompanying Consolidated Financial Statements, we completed the sale of all our equity interests in TSW on July 19, 2021, and we completed the sale of all our equity interests in Landmark on June 2, 2021.

As a result, Landmark and TSW are reported within discontinued operations.

Year ended December 31, 2023 compared to year ended December 31, 2022:

There was no income from discontinued operations for the years ended December 31, 2023 and 2022.

Consolidated Funds’ expense decreased $(1.9) million, from $2.8 million for the year ended December 31, 2023 to $0.9 million for the year ended December 31, 2024.

These movements relate to the underlying activity of our consolidated Funds.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Income from discontinued operations was $77.3 million for the year ended December 31, 2021, representing the income from TSW and Landmark, including consolidated Landmark Funds.

There was no income from discontinued operations for the year ended December 31, 2022.

The gain on disposal of discontinued operations, net of tax was $691.0 million for the year ended December 31, 2021 representing our gain on sale of our equity interests in Landmark and TSW.

There was no gain on disposal of discontinued operations for the year ended December 31, 2022.

Consolidated Funds’ revenue increased $2.6 million from $0.4 for the year ended December 31, 2022 to $3.0 million for the year ended December 31, 2023.

Consolidated Funds’ expense increased $2.4 million from $0.4 million for the year ended December 31, 2022 to $2.8 million for the year ended December 31, 2023.

The increase in Consolidated Funds’ revenue and increase in Consolidated Funds’ expense is due to changes in the population of Consolidated Funds during the year ended December 31, 2023.

GAAP Operating Metrics

18 unchanged sentences

$ 122.7 $ 112.2 $ 100.3

Operating income before variable compensation and Affiliate key employee distributions (2)(4)(5)

Operating income before variable compensation and Acadian LLC key employee distributions (2)(4)(5)

$ 265.7 $ 223.1 $ 273.3

1 unchanged sentence

46.2 % 50.3 % 36.7 %

Affiliate key employee distributions

Acadian LLC key employee distributions

$ 9.7 $ 5.1 5.1

Operating income before Affiliate key employee distributions (2)(4)(5)

Operating income before Acadian LLC key employee distributions (2)(4)(5)

$ 143.0 $ 110.9 $ 173.0

GAAP Affiliate key employee distributions ratio (3)

GAAP Acadian LLC key employee distributions ratio (3)

6.8 % 4.6 % 2.9 %

1 unchanged sentence

GAAP operating margin would be 26.5% for the year ended December 31, 2024, 25.0% for the year ended December 31, 2023 and 40.3% for the year ended December 31, 2022.

(2) Excludes consolidated Funds’ expense of $2.8 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

(2) Excludes consolidated Funds’ expense of $0.9 million for the year ended December 31, 2024, $2.8 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

(3) Excludes the effect of Funds’ consolidation for the years ended December 31, 2024, 2023 and 2022.

(4) Excludes consolidated Funds’ revenue of $3.0 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

(5) The following table identifies the components of operating income before variable compensation and Affiliate key employee distributions, as well as operating income before Affiliate key employee distributions:

(4) Excludes consolidated Funds’ revenue of $3.1 million for the year ended December 31, 2024, $3.0 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

(5) The following table identifies the components of operating income before variable compensation and Acadian LLC key employee distributions, as well as operating income before Acadian LLC key employee distributions:

Years ended December 31,

2 unchanged sentences

$ 135.5 $ 106.0 $ 167.9

Affiliate key employee distributions

Acadian LLC key employee distributions

Operating (income) loss of consolidated Funds

Operating income before Affiliate key employee distributions

(2.2) (0.2) —

Operating income before Acadian LLC key employee distributions

$ 143.0 $ 110.9 $ 173.0

Variable compensation 122.7 112.2 100.3

Operating income before variable compensation and Affiliate key employee distributions

Operating income before variable compensation and Acadian LLC key employee distributions

$ 265.7 $ 223.1 $ 273.3

6 unchanged sentences

GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S.

ENI is an important measure to investors because it is used by us to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine Affiliate variable compensation and equity distributions, and incentivize management.

It is also an important measure because it assists management in evaluating our operating performance and is presented in a way that most closely reflects the key elements of our profit share operating model with our Affiliates.

ENI is an important measure to investors because it is used by us to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and equity distributions, and incentivize management.

For a further discussion of how we use ENI and why ENI is useful to investors, see “—Overview—How We Measure Performance.”

1 unchanged sentence

• We exclude the effect of Funds’ consolidation by removing the portion of Fund revenues, expenses and investment return which were not attributable to our stockholders.

• We include within management fee revenue any fees paid to Affiliates by consolidated Funds, which are viewed as investment income under U.S.

• We include our share of earnings from equity-accounted Affiliates within other income in ENI revenue, rather than investment income.

• We include within management fee revenue any fees paid to the Company by consolidated Funds.

• We treat sales-based compensation as a general and administrative expense, rather than part of fixed compensation and benefits.

• We identify separately from operating expenses variable compensation and Affiliate key employee distributions, which represent Affiliate earnings shared with Affiliate key employees.

• We identify separately from operating expenses variable compensation and Acadian LLC key employee distributions, which represent Acadian LLC earnings shared with key employees.

We also make the following adjustments to U.S.

GAAP results to more closely reflect our economic results:

We exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees.

These ownership interests may in certain circumstances be repurchased by BSUS at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on our balance sheet as a liability.

We exclude non-cash expenses representing changes in the value of Acadian LLC equity and profit interests held by key employees.

These ownership interests may in certain circumstances be repurchased by Hold Co at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on our balance sheet as a liability.

Non-cash movements in the value of this liability are treated as compensation expense under U.S.

Our Affiliate equity and profit interest plans have been designed to ensure BSUS is never required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

Our equity and profit interest plans have been designed to ensure Hold Co is never required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

We exclude non-cash amortization or impairment expenses related to acquired goodwill and other intangibles as these are non-cash charges that do not result in an outflow of tangible economic benefits from the business.

1 unchanged sentence

We exclude seed capital and co-investment gains, losses, and related financing costs.

The net returns on these investments are considered and presented separately from ENI because ENI is primarily a measure of our earnings from managing client assets, which therefore differs from earnings generated by our investments in Affiliate products, which can be variable from period to period.

We include cash tax benefits associated with deductions allowed for acquired intangibles and goodwill that may not be recognized or have timing differences compared to U.S.

17 unchanged sentences

Discontinued operations attributable to controlling interests and restructuring (2)

9.5 1.3 (743.8)

ENI tax normalization (3)

2.4 3.3 (1.7)

Tax effect of above adjustments, as applicable (4)

11 unchanged sentences

* The blended rate is based on the weighted average rate of the long-term debt.

(2) For the year ended December 31, 2023, includes severance costs at Acadian of $7.3 million, legal-related restructuring costs at the Center of $0.9 million, and costs associated with the transfer of an insurance policy from our former Parent of $1.3 million.

(2) For the year ended December 31, 2024, includes severance-related items of $(1.0) million, costs associated with the transfer of an insurance policy from our former parent of $1.3 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million.

For the year ended December 31, 2023, includes severance costs of $7.3 million, legal-related restructuring costs at the Hold Co of $0.9 million, and costs associated with the transfer of an insurance policy from our former parent of $1.3 million.

For the year ended December 31, 2022, includes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $1.2 million.

For the year ended December 31, 2021, includes net income from discontinued operations attributable to controlling interest of $700.3 million, restructuring costs at the Center and Affiliates of $3.8 million, costs associated with the transfer of an insurance policy from our former Parent of $1.2 million, and the gain on sale of subsidiaries of $48.6 million.

(3) Includes adjustments of $(0.3) million, $(0.2) million and $0.2 million to remove the tax benefit (expense) resulting from the change in liabilities for uncertain tax positions recorded during the years ended December 31, 2024, 2023 and 2022, respectively.

(4) Reflects the sum of line items (i), (ii), (iii), (iv) and the restructuring portion of line item (vi) taxed at the 27.3% U.S.

statutory rate (including state tax).

(4) Reflects the sum of lines (i), (ii), (iii), (iv) and the restructuring portion of line item (vi) multiplied by the 27.3% U.S.

statutory tax rate (including state tax).

The following table reconciles U.S.

24 unchanged sentences

GAAP Revenue $ 505.6 $ 426.6 $ 417.2

Include earnings from equity-accounted Affiliate — — 2.6

Exclude revenue from consolidated Funds attributable to non-controlling interests

Exclude revenue from consolidated Funds

(3.1) (3.0) (0.4)

Exclude Fund expenses reimbursed by customers (1)

ENI Revenue $ 502.5 $ 423.6 $ 416.8

(1) Reflects the recategorization of fund expenses reimbursed by customers of Campbell Global, a former Affiliate that was divested in August 2021.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

The following table identifies the components of ENI revenue:

5 unchanged sentences

71.4 50.4 49.4

Other income, including equity-accounted Affiliate (3)

ENI Revenue $ 502.5 $ 423.6 $ 416.8

3 unchanged sentences

GAAP performance fees.

(3) ENI other income is comprised primarily of other revenue under U.S.

GAAP, plus our earnings from our equity-accounted Affiliate of $2.6 million for the year ended December 31, 2021.

For the year ended December 31, 2021, other income excludes certain Fund expenses initially paid by our previously divested Affiliate, Campbell Global, on the Funds’ behalf that are subsequently reimbursed.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

Refer to “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis” for a full discussion regarding the items excluded from the calculation of economic net income.

Years ended December 31,

($ in millions) 2023 2022 2021

GAAP other revenue $ — $ — $ 5.7

Earnings from equity-accounted Affiliate — — 2.6

Exclude Fund expenses reimbursed by customers (1)

ENI other income $ — $ — $ 5.4

(1) Reflects the recategorization of fund expenses reimbursed by customers of Campbell Global, a former Affiliate that was divested in August 2021.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

ENI Operating Expenses

1 unchanged sentence

GAAP operating expense and ENI operating expense relates to compensation.

As shown in the following reconciliation, the Company excludes the impact of key employee equity revaluations.

Variable compensation and Affiliate key employee distributions are also segregated out of U.S.

GAAP operating expense in order to align with the manner in which these items are contractually calculated at the Affiliate level.

As shown in the following reconciliation, we exclude the impact of key employee equity revaluations.

Variable compensation and Acadian LLC key employee distributions are also segregated out of U.S.

GAAP operating expense in order to align with the manner in which these items are contractually calculated.

The following table reconciles U.S.

6 unchanged sentences

Amortization of acquired intangible assets

— (0.1) (0.1)

Capital transaction costs — — —

1 unchanged sentence

(1.6) (9.5) (1.3)

Fund expenses reimbursed by customers (2)

Funds’ operating expenses (0.9) (2.8) (0.4)

3 unchanged sentences

(122.8) (104.9) (100.3)

Affiliate key employee distributions (5.1) (5.1) (13.4)

Acadian LLC key employee distributions

(9.7) (5.1) (5.1)

ENI operating expense $ 211.9 $ 198.4 $ 182.1

(1) For the year ended December 31, 2023, includes $7.3 million of severance costs at Acadian, $0.9 million of legal-related restructuring costs at the Center and $1.3 million costs associated with the transfer of an insurance policy from our former Parent.

(1) For the year ended December 31, 2024, includes $(1.0) million of severance-related items, $1.3 million of costs associated with the transfer of an insurance policy from our former parent and $1.3 million of costs associated with the wind-down of the MACS business in the standalone format.

For the year ended December 31, 2023, includes $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co and $1.3 million costs associated with the transfer of an insurance policy from our former parent.

For the year ended December 31, 2022, includes $0.1 million of restructuring costs and $1.2 million costs associated with the transfer of an insurance policy from our former parent.

For the year ended December 31, 2021, includes restructuring costs at the Center and the Affiliates of $3.8 million and $1.2 million costs associated with the transfer of an insurance policy from our former Parent.

(2) Reflects the recategorization of fund expenses reimbursed by customers of Campbell Global, a former Affiliate that was divested in August 2021.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

(3) For the year ended December 31, 2023, excludes variable compensation related to severance at Acadian of $7.3 million that is included within restructuring costs.

For the year ended December 31, 2021, excludes variable compensation related to restructuring at the Center and the Affiliates of $0.9 million that is included within restructuring costs.

(2) For the year ended December 31, 2024, excludes $(1.0) million of severance-related items that is included within restructuring costs and $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs.

For the year ended December 31, 2023, excludes variable compensation related to severance of $7.3 million that is included within restructuring costs.

The following table identifies the components of ENI operating expense:

9 unchanged sentences

The following table reconciles U.S.

GAAP compensation expense to ENI fixed compensation and benefits expense for the years ended December 31, 2023, 2022 and 2021:

GAAP compensation and benefits expense to ENI fixed compensation and benefits expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

5 unchanged sentences

(12.1) (7.6) (7.7)

Affiliate key employee distributions (5.1) (5.1) (13.4)

Restructuring expenses (7.3) — (0.9)

Acadian LLC key employee distributions

(9.7) (5.1) (5.1)

Restructuring expenses (a)

Variable compensation (122.8) (104.9) (100.3)

Fund expenses reimbursed by customers (a)

ENI fixed compensation and benefits $ 97.8 $ 93.1 $ 86.1

(a) Reflects the recategorization of fund expenses reimbursed by customers of Campbell Global, a former Affiliate that was divested in August 2021.

This recategorization is not applicable for the years ended December 31, 2023 and 2022.

(a) Reflects $(1.0) million of severance-related items and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million for the year ended December 31, 2024.

Reflects $7.3 million of severance-related costs for the year ended December 31, 2023.

(2) The following table reconciles U.S.

4 unchanged sentences

Sales-based compensation 12.1 7.6 7.7

Capital transaction costs — — (1.2)

Restructuring costs (a)

1 unchanged sentence

ENI general and administrative expense $ 96.0 $ 88.0 $ 77.5

(a) Reflects $0.9 million related to restructuring at the Center and $1.3 million of costs associated with the transfer of an insurance policy from our former Parent for the year ended December 31, 2023.

(a) Reflects $1.3 million of costs associated with the transfer of an insurance policy from our former parent for the year ended December 31, 2024.

Reflects $0.9 million related to restructuring at the Hold Co and $1.3 million of costs associated with the transfer of an insurance policy from our former parent for the year ended December 31, 2023.

Reflects $0.1 million related to restructuring and $1.2 million of costs associated with the transfer of an insurance policy from our former parent in the year ended December 31, 2022.

Reflects $2.9 million related to restructuring at the Center and Affiliates, and $1.2 million of costs associated with the transfer of an insurance policy from our former Parent in the year ended December 31, 2021.

Key Non-GAAP Operating Metrics

22 unchanged sentences

42.3 % 46.6 % 42.7 %

Affiliate key employee distributions

Acadian LLC key employee distributions

$ 9.7 $ 5.1 $ 5.1

1 unchanged sentence

$ 167.8 $ 120.3 $ 134.4

ENI Affiliate key employee distributions ratio (7)

ENI Acadian LLC key employee distributions ratio (7)

5.8 % 4.2 % 3.8 %

(1) ENI operating earnings represents ENI earnings before Affiliate key employee distributions and is calculated as ENI revenue, less ENI operating expense, less ENI variable compensation.

It differs from economic net income because it does not include the effects of Affiliate key employee distributions, net interest expense or income tax expense.

(1) ENI operating earnings represents ENI earnings before Acadian LLC key employee distributions and is calculated as ENI revenue, less ENI operating expense, less ENI variable compensation.

It differs from economic net income because it does not include the effects of Acadian LLC key employee distributions, net interest expense or income tax expense.

The following table reconciles U.S.

3 unchanged sentences

GAAP operating income $ 135.5 $ 106.0 $ 167.9

Include earnings from equity-accounted Affiliate — — 2.6

Exclude the impact of:

Affiliate key employee-owned equity and profit interest revaluations

Acadian LLC key employee-owned equity and profit interest revaluations

23.2 (0.1) (40.0)

2 unchanged sentences

Restructuring costs (a)

Affiliate key employee distributions 5.1 5.1 13.4

Acadian LLC key employee distributions

Variable compensation

3 unchanged sentences

290.6 225.2 234.7

ENI variable compensation (104.9) (100.3) (129.6)

ENI variable compensation (b)

(122.8) (104.9) (100.3)

ENI operating earnings 167.8 120.3 134.4

ENI Affiliate key employee distributions (5.1) (5.1) (13.4)

ENI earnings after Affiliate key employee distributions

ENI Acadian LLC key employee distributions

(9.7) (5.1) (5.1)

(a) For the year ended December 31, 2023, includes $7.3 million of severance costs at Acadian, $0.9 million of legal-related restructuring costs at the Center, and $1.3 million associated with the transfer of an insurance policy from our former Parent.

For the year ended December 31, 2022, includes $0.1 million of restructuring costs at the Center and Affiliates, and $1.2 million associated with the transfer of an insurance policy from our former Parent.

For the year ended December 31, 2021, includes $3.8 million of restructuring costs at the Center and the Affiliates, and $1.2 million associated with the transfer of an insurance policy from our former Parent.

(2) The ENI operating margin, which is calculated before Affiliate key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business without regard to our various ownership levels at each of the Affiliates.

ENI earnings after Acadian LLC key employee distributions

$ 158.1 $ 115.2 $ 129.3

(a) The year ended December 31, 2024 includes $(1.0) million of severance-related items, $1.3 million associated with the transfer of an insurance policy from our former Parent, and $1.3 million of costs associated with the wind-down of the MACS business in the standalone format.

For the year ended December 31, 2023, includes $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co, and $1.3 million associated with the transfer of an insurance policy from our former parent.

For the year ended December 31, 2022, includes $0.1 million of restructuring costs, and $1.2 million associated with the transfer of an insurance policy from our former parent.

(b) The year ended December 31, 2024 excludes $(1.0) million of severance-related items that is included within restructuring costs and $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs.

The year ended December 31, 2023 excludes $7.3 million of severance costs that are included within restructuring costs.

(2) The ENI operating margin, which is calculated before Acadian LLC key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business.

The ENI operating margin is most comparable to our U.S.

1 unchanged sentence

GAAP operating margin, excluding the effect of consolidated Funds, was 26.5% for the year ended December 31, 2024, 25.0% for the year ended December 31, 2023 and 40.3% for the year ended December 31, 2022.

The ENI operating margin is important because it gives investors an understanding of the profitability of the total business relative to revenue, irrespective of the ownership position which BSIG has in each of its Affiliates.

Management and investors use this ratio when comparing our profitability relative to our peer group and evaluating our ability to manage the cost structure and profitability of our business under different operating environments.

3 unchanged sentences

We have provided this ratio since many operating expenses, including fixed compensation and benefits and general and administrative expense, are generally linked to the overall size of the business.

We track this ratio as a key measure of scale economies at BSIG because in our profit sharing economic model, scale benefits both the Affiliate employees and BSIG stockholders.

We track this ratio as a key measure of scale economies because in our profit-sharing economic model, scale benefits both the Acadian LLC employees and our stockholders.

The ENI operating expense ratio is most comparable to the U.S.

2 unchanged sentences

(6) The ENI variable compensation ratio is used by management and is useful to investors to evaluate consolidated variable compensation as measured against our ENI earnings before variable compensation.

Variable compensation is contractually set and calculated individually at each Affiliate, plus Center bonuses.

Variable compensation is usually awarded based on a contractual percentage of each Affiliate’s ENI earnings before variable compensation and may be paid in the form of cash or non-cash Affiliate equity or profit interests.

Center variable compensation includes cash and BSIG equity.

Variable compensation is primarily comprised of a contractual percentage of Acadian LLC’s ENI earnings before variable compensation and may be paid in the form of cash or non-cash Acadian LLC equity or profit interests.

Hold Co variable compensation includes cash and AAMI equity.

Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period.

The variable compensation ratio at each Affiliate is calculated as variable compensation divided by ENI earnings before variable compensation.

The variable compensation ratio is calculated as variable compensation divided by ENI earnings before variable compensation.

The ENI variable compensation ratio is most comparable to the U.S.

GAAP variable compensation ratio.

(7) The ENI Affiliate key employee distribution ratio is used by management and is useful to investors to evaluate Affiliate key employee distributions as measured against our ENI operating earnings.

Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests.

The Affiliate key employee distribution ratio at each Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate.

At certain Affiliates with tiered equity structures, BSUS and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages.

The ENI Affiliate key employee distributions ratio is most comparable to the U.S.

GAAP Affiliate key employee distributions ratio.

(7) The ENI Acadian LLC key employee distribution ratio is used by management and is useful to investors to evaluate Acadian LLC key employee distributions as measured against our ENI operating earnings.

Acadian LLC key employee distributions represent the share of profits after variable compensation that is attributable to Acadian LLC key employee equity and profit interests holders, according to their ownership interests.

It is calculated as Acadian LLC key employee distributions divided by ENI operating earnings.

Within Acadian LLC, we have a tiered equity structure, where AAMI and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages.

The ENI Acadian LLC key employee distributions ratio is most comparable to the U.S.

GAAP Acadian LLC key employee distributions ratio.

Tax on Economic Net Income

20 unchanged sentences

ENI net interest income (expense) (11.9) (11.8) (17.3)

ENI earnings after Affiliate key employee distributions (b)

ENI earnings after Acadian LLC key employee distributions (b)

158.1 115.2 129.3

5 unchanged sentences

Includes $0.4 million related to the cost of seed and co-investment financing and $2.0 million related to the amortization of debt issuance costs for the year ended December 31, 2022.

(b) ENI earnings after Affiliate key employee distributions is calculated as ENI operating income (ENI revenue, less ENI operating expense, less ENI variable compensation), less Affiliate key employee distributions.

(b) ENI earnings after Acadian LLC key employee distributions is calculated as ENI operating income (ENI revenue, less ENI operating expense, less ENI variable compensation), less Acadian LLC key employee distributions.

Refer to “—Key Non-GAAP Operating Metrics” for a reconciliation from U.S.

GAAP operating income to ENI earnings after Affiliate key employee distributions.

GAAP operating income (loss) to ENI earnings after Acadian LLC key employee distributions.

(2) Taxed at U.S.

2 unchanged sentences

The value of our seed capital investments was $90.3 million as of December 31, 2024 and $41.4 million as of December 31, 2023, including direct investments in consolidated Funds.

Total seed capital investments represents our seed capital invested within our Affiliate’s investment products.

Total seed capital investments represents our seed capital invested within Acadian LLC’s investment products.

The following table reconciles the investments balance per our Consolidated Balance Sheets to the total value of our seed capital investments as of each of the dates indicated:

7 unchanged sentences

We operate our business through the following reportable segment:

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

This segment is comprised of our interest in Acadian.

The corporate head office is included within the Other category, along with our previously disposed Affiliate, Campbell Global, for the year ended December 31, 2021.

We completed the sale of our equity interest in Campbell Global in August 2021.

ICM is also included in the Other category for the year ended December 31, 2021.

We completed the sale of our equity interests in ICM in July 2021.

The corporate head office expenses are not allocated to the Company’s business segment but the CODM does consider the cost structure of the corporate head office when evaluating the financial performance of our segment.

The primary measure used by the CODM in measuring performance and allocating resources to the segments is ENI.

We define economic net income for the segments as ENI revenue less (i) ENI operating expenses, (ii) variable compensation and (iii) key employee distributions.

portfolios include developed and developing markets for equity, credit and alternative strategies.

This segment is comprised of our interest in Acadian LLC.

The corporate holding company (“Hold Co”) is included within the Unallocated Corporate expense category.

The Hold Co expenses are not allocated to the Company’s business segment, but the CODM does consider the cost structure of the corporate head office when evaluating the financial performance of our segment.

The CODM is the Company’s Chief Executive Officer.

The primary measure used by the CODM in measuring performance and allocating resources to the segment is ENI.

ENI is used to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and equity distributions, and incentivize management.

We define economic net income for the segment as ENI revenue less ENI operating expenses.

The ENI adjustments to U.S.

1 unchanged sentence

GAAP revenue and expense items, as well as adjustments to U.S.

GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S.

GAAP results, primarily to exclude non-cash, non-economic expenses recognized under U.S.

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 our share of earnings from our 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 amortization of acquired intangible assets, 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 Funds’ revenues, expenses and investment return recorded under U.S.

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

Significant segment ENI expenses include fixed compensation and benefits, variable compensation, Acadian LLC key employee distributions, depreciation and amortization, and general and administrative expense under U.S.

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

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

Refer to the reconciliations of U.S.

GAAP revenue to ENI revenue, U.S.

GAAP Operating expense to ENI Operating expense, variable compensation and Affiliate key employee distributions disclosed previously within this section.

GAAP Operating expense to ENI Operating expense, variable compensation and Acadian LLC key employee distributions disclosed previously within this section.

Segment ENI Revenue

The following tables identify the components of segment ENI revenue for the years ended December 31, 2023, 2022 and 2021:

The following table identifies the components of Quant & Solutions segment ENI revenue for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

($ in millions) 2024 2023 2022

Quant & Solutions Total Quant & Solutions Total

Management fees $ 431.1 $ 373.2 $ 367.4

1 unchanged sentence

71.4 50.4 49.4

ENI revenue $ 423.6 $ 423.6 $ 416.8 $ 416.8

Year ended December 31,

($ in millions) 2021

Quant & Solutions Other Total

Management fees $ 419.4 $ 13.9 $ 433.3

Performance fees

Segment ENI revenue

$ 502.5 $ 423.6 $ 416.8

Other income, including equity-accounted Affiliate — 5.4 5.4

ENI revenue $ 488.1 $ 35.4 $ 523.5

Quant & Solutions Segment ENI Revenue

1 unchanged sentence

Quant & Solutions ENI revenue increased $78.9 million, or 18.6%, from $423.6 million for the year ended December 31, 2023 to $502.5 million for the year ended December 31, 2024.

The increase was due to 2.0% higher performance fees in the year ended December 31, 2023, as well as 1.6% higher management fees due to improvement in blended average basis points on assets under management, due to fee rates from inflows being higher than outflows in the years ended December 31, 2023 and 2022.

The increase was due to 41.7% higher performance fees due to strong performance relative to market in certain strategies in the year ended December 31, 2024, and 15.5% higher management fees resulting from positive equity markets in the past year and an improvement in blended average basis points on assets under management, driven by fee rates from inflows being higher than outflows in the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Quant & Solutions ENI revenue decreased $(71.3) million, or (14.6)%, from $488.1 million for the year ended December 31, 2021 to $416.8 million for the year ended December 31, 2022.

The decrease was due to (28.1)% lower performance fees in the year ended December 31, 2022, as well as (12.4)% lower management fees driven by lower average AUM resulting from equity market decline and net outflows in the year ended December 31, 2022.

Quant & Solutions ENI revenue increased $6.8 million, or 1.6%, from $416.8 million for the year ended December 31, 2022 to $423.6 million for the year ended December 31, 2023.

The increase was due to 2.0% higher performance fees in the year ended December 31, 2023, as well as 1.6% higher management fees due to improvement in blended average basis points on assets under management, driven by fee rates from inflows being higher than outflows in the years ended December 31, 2023 and 2022.

Segment ENI Expense

The following tables identify the components of segment ENI expense for the years ended December 31, 2023, 2022 and 2021:

The following table identifies the components of Quant & Solutions segment ENI expenses for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

($ in millions) 2024 2023 2022

Quant & Solutions Other Total Quant & Solutions Other Total

Fixed compensation & benefits

$ 90.7 $ 86.6 $ 79.0

General and administrative expense

80.3 7.7 88.0 68.4 9.1 77.5

Depreciation and amortization

17.3 — 17.3 18.1 0.4 18.5

Total ENI Operating Expenses

$ 184.2 $ 14.2 $ 198.4 $ 165.5 $ 16.6 $ 182.1

Variable compensation

119.9 102.2 96.0

Affiliate key employee distributions

5.1 — 5.1 5.1 — 5.1

Total Expenses $ 291.5 $ 16.9 $ 308.4 $ 266.6 $ 20.9 $ 287.5

Year ended December 31,

($ in millions) 2021

Quant & Solutions Other Total

Fixed compensation & benefits

$ 79.1 $ 18.1 $ 97.2

General and administrative expense

60.5 13.0 73.5

Acadian LLC key employee distributions

Depreciation and amortization

18.1 17.3 18.1

Total ENI Operating Expenses

$ 160.8 $ 32.0 $ 192.8

Variable compensation

General and administrative expense

87.9 80.3 68.4

Affiliate key employee distributions

Segment ENI expenses

$ 326.3 $ 291.5 $ 266.6

Total Expenses $ 274.0 $ 61.8 $ 335.8

Quant & Solutions Segment ENI Expense

Year ended December 31, 2024 compared to year ended December 31, 2023:

Quant & Solutions ENI operating expense increased $18.7 million, or 11.3%, from $165.5 million for the year ended December 31, 2022 to $184.2 million for the year ended December 31, 2023.

The increase was driven by 17.4% higher ENI general and administrative expense primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

Quant & Solutions segment ENI expenses increased $34.8 million, or 12%, from $291.5 million for the year ended December 31, 2023 to $326.3 million for the year ended December 31, 2024.

Quant & Solutions segment ENI fixed compensation and benefits expense increased 4.7%, reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring in late 2023.

Quant & Solutions ENI variable compensation expense is based on contractual percentage of earnings before variable compensation and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.

Quant & Solutions ENI variable compensation expense increased 6.5%, driven by the inclusion of deferred compensation expense earned on current and prior year performance fee revenues.

Affiliate key employee distributions attributable to Quant & Solutions was unchanged.

The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings.

Quant & Solutions ENI variable compensation expense increased 17.3%, primarily as a result of higher earnings before variable compensation.

The change in Acadian LLC key employee distributions during the current period is driven by higher operating earnings and the leveraged nature of this distribution share.

Quant & Solutions ENI general and administrative expense increased 9.5% primarily due to higher systems, outside services and portfolio administrative costs, reflecting our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Quant & Solutions ENI operating expense increased $4.7 million, or 2.9%, from $160.8 million for the year ended December 31, 2021 to $165.5 million for the year ended December 31, 2022.

The increase was driven by 13.1% higher ENI general and administrative expense primarily due to higher travel and entertainment, consultant, and system costs.

Quant & Solutions ENI variable compensation expense is based on contractual percentage of earnings before variable compensation, and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.

Quant & Solutions ENI variable compensation expense decreased (4.8)%, as a result of lower earnings before variable compensation, including performance fees.

Affiliate key employee distributions attributable to Quant & Solutions decreased (58.9)%, impacted by lower ENI earnings after variable compensation and the leveraged nature of the distribution share.

Other ENI Expense

Quant & Solutions segment ENI expense increased $24.9 million, or 9%, from $266.6 million for the year ended December 31, 2022 to $291.5 million for the year ended December 31, 2023.

Quant & Solutions segment ENI fixed compensation and benefits expense increased 9.6%, driven by cost of living increases and the cost of new hires supporting our growth initiatives.

Quant & Solutions segment ENI variable compensation expense is based on contractual percentage of earnings before variable compensation and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period.

Quant & Solutions ENI variable compensation expense increased 6.5%, driven by the inclusion of deferred compensation expense earned on current and prior year performance fee revenues.

Quant & Solutions ENI general and administrative expense increased 17.4% primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

Unallocated corporate expense

The following table identifies unallocated corporate expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

($ in millions) 2024 2023 2022

Unallocated corporate expenses (1)

$ 19.4 $ 19.1 $ 22.2

(1) Unallocated corporate expenses are presented on a U.S.

Year ended December 31, 2024 compared to year ended December 31, 2023:

Other ENI operating expense decreased $(2.4) million, or (14.5)%, from $16.6 million for the year ended December 31, 2022 to $14.2 million for the year ended December 31, 2023.

The decrease was driven by (8.5)% lower ENI fixed compensation and benefits due to lower headcount at the corporate head office and (15.4)% lower ENI general and administrative expense resulting from cost-saving initiatives.

Other ENI variable compensation expense decreased (37.2)% due to lower non-cash equity compensation amortization at the corporate head office.

Unallocated corporate expense increased $0.3 million, or 2%, from $19.1 million for the year ended December 31, 2023 to $19.4 million for the year ended December 31, 2024.

The increase was driven by higher compensation and benefits expense due to cost of living and payroll tax increases, partially offset by lower general and administrative expenses due to a decrease in legal costs.

Year ended December 31, 2023 compared to year ended December 31, 2022:

Other ENI operating expense decreased $(15.4) million, or (48.1)%, from $32.0 million for the year ended December 31, 2021 to $16.6 million for the year ended December 31, 2022.

The decrease was driven by (60.8)% lower ENI fixed compensation and benefits and (30.0)% lower ENI general and administrative expense, both driven by the disposition of Affiliates during 2021.

Other ENI variable compensation expense decreased (85.1)% primarily due to the disposition of Campbell Global in 2021.

Unallocated corporate expenses decreased $(3.1) million, or (14.0)%, from $22.2 million for the year ended December 31, 2022 to $19.1 million for the year ended December 31, 2023.

The decrease was driven by lower compensation and benefits due to a reduction in headcount at the Hold Co and lower general and administrative expense driven by lower rent expense.

Capital Resources and Liquidity

8 unchanged sentences

(1) Excludes consolidated Funds.

(2) Cash flow data shown only includes cash flows from continuing operations.

Our most significant uses of cash include share repurchases, repayment of third-party borrowings, third-party interest payments, tax payments, seed capital investments, dividends and compensation and general and administrative expenses.

Our most significant uses of cash include share repurchases, repayment of third-party borrowings and revolving credit facility, third-party interest payments, tax payments, seed capital investments, dividends and compensation and general and administrative expenses.

Comparison for the Years Ended December 31, 2024, 2023 and 2022

Net cash provided by operating activities of continuing operations excluding consolidated Funds decreased $(41.3) million, from net cash provided of $119.0 million during the year ended December 31, 2022 to net cash provided of $77.7 million during the year ended December 31, 2023.

The decrease was driven by changes in operating asset and liabilities period-over-period, including changes in investment advisory fees receivable and accrued incentive compensation balances, as well as changes in net income period over period.

Net cash provided by operating activities of continuing operations excluding consolidated Funds increased $123.4 million, from net cash used of $(4.4) million during the year ended December 31, 2021 to net cash provided of $119.0 million during the year ended December 31, 2022.

The increase was primarily driven by taxes paid on the gain on sales of Affiliates and discontinued operations of $163.0 million in 2021, as well as changes in operating assets and liabilities offset by changes in net income period over period.

Net cash provided by (used in) investing activities of continuing operations, excluding consolidated Funds, was $(31.4) million, $(13.0) million and $1,036.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Fluctuations are principally due to the timing of sale proceeds received from the sales of Landmark, TSW, Campbell Global and ICM totaling $1,010.9 million in 2021.

Fluctuations are also impacted by the timing of investments or redemptions of seed capital.

Net cash provided by operating activities excluding consolidated Funds increased $31.2 million, from net cash provided of $77.7 million during the year ended December 31, 2023 to net cash provided of $108.9 million during the year ended December 31, 2024.

The increase was driven by changes in net income offset by changes in operating asset and liabilities period-over-period.

Net cash provided by operating activities excluding consolidated Funds decreased $(41.3) million, from net cash provided of $119.0 million during the year ended December 31, 2022 to net cash provided of $77.7 million during the year ended December 31, 2023.

The decrease was driven by changes in net income and changes in operating assets and liabilities period-over-period, including changes in investment advisory fees receivable and accrued incentive compensation balances.

Net cash used in investing activities, excluding consolidated Funds, was $(50.1) million, $(31.4) million and $(13.0) million for the years ended December 31, 2024, 2023 and 2022, respectively.

Fluctuations are driven by the timing of investments or redemptions of seed capital.

Net cash (used in) received from the (purchase) and sale of investments was $(40.2) million, $(17.6) million and $3.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

3 unchanged sentences

We paid $(96.7) million for share repurchases in 2024 compared to $(3.3) million in 2023 and $(103.2) million in 2022.

In 2022, we paid down net $(125.0) million against third party and revolving credit facility borrowings compared to $0.0 million in 2023 and $0.0 million in 2021.

In 2022, we paid down net $(125.0) million against third-party and revolving credit facility borrowings compared to $0.0 million in 2024 and 2023.

Working Capital and Long-Term Debt

13 unchanged sentences

Accrued short-term incentive compensation 118.6 99.3 92.5

Notes payable and other debt (3)

Other short-term liabilities (3)

5 unchanged sentences

(2) Includes income taxes receivable.

(3) Includes the short-term portion of our third-party borrowings.

On December 17, 2021, we issued a notice for the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 (the “2031 Notes”).

On January 18, 2022 we completed the full redemption of the 2031 Notes.

(3) Includes the short-term portion of our lease liability and accrued income taxes payable.

Excluded from other short-term liabilities for each of the years presented is an income tax reserve relating to net operating losses that does not represent a current obligation of the Company.

Puts related to Affiliate equity and profits interests are also excluded on a short-term basis because they are funded through recycling.

Puts related to Acadian LLC equity and profits interests are also excluded on a short-term basis because they are funded through recycling.

Working capital is defined as current assets less current liabilities, excluding the non-controlling interest portion of consolidated Funds.

2 unchanged sentences

Accrued compensation expense has primarily consisted of variable compensation accruals made throughout the year based on contractual arrangements.

Our cash management practices generally require that working capital be maintained at an appropriate level to meet short-term operational needs at both Acadian and BSUS.

Periodic distributions of Acadian earnings to BSUS and Acadian key employee equity holders are made according to our distribution policies, with BSUS having the ability to access any surplus cash at Acadian as necessary during interim periods.

Our cash management practices generally require that working capital be maintained at an appropriate level to meet short-term operational needs at both Acadian LLC and Hold Co.

Periodic distributions of Acadian LLC earnings to Hold Co and Acadian LLC key employee equity holders are made according to our distribution policies, with Hold Co having the ability to access any surplus cash at Acadian LLC as necessary during interim periods.

Borrowings and Long-Term Debt

5 unchanged sentences

$140 million revolving credit facility (1)

$ — $ — Variable rate March 7, 2025

$ — $ — Variable rate August 29, 2027

Total revolving credit facility $ — $ —

1 unchanged sentence

4.80% Senior Notes Due 2026 $ 274.3 $ 273.9 4.80% July 27, 2026

5.125% Senior Notes Due 2031 (1)

— — 5.125% August 1, 2031

Total third-party borrowings

(1) On January 18, 2022, we completed the full redemption of the $125.0 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031.

As a result of this transaction, we recorded $3.2 million of loss on extinguishment of debt within the Consolidated Statements of Operations for the year ended December 31, 2022.

$ 274.3 $ 273.9

(1) On August 29, 2024, Acadian LLC’s $125 million revolving credit facility was terminated and replaced with a new $140 million revolving credit facility.

Revolving Credit Facility

On March 7, 2022, Acadian, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian Credit Agreement”), which replaced our revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”).

The maturity date of the Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10% (“Adjusted Term SOFR”) plus 1%, plus, in each case an additional amount ranging from 0.5% to 1.0%, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR plus an additional amount ranging from 1.5% to 2.0%, with such additional amount based on Acadian’s Leverage Ratio.

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 2.5x and the ratio of Acadian’s trailing twelve months Adjusted EBITDA to Acadian’s interest expense (the “Interest Coverage Ratio”) must be not less than 4.0x.

At December 31, 2023, Acadian’s Leverage Ratio was 0x and Acadian’s Interest Coverage Ratio was 53.9x.

On August 29, 2024, Acadian LLC, Royal Bank of Canada, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., the Bank of New York Mellon, Bank of America N.A., as an issuing bank, and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian LLC Credit Agreement”), which replaced Acadian LLC’s revolving credit facility dated as of March 7, 2022 (the “Prior Credit Agreement”).

The maturity date of the Prior Credit Agreement was March 7, 2025, and the maturity date of the Acadian LLC Credit Agreement is August 29, 2027.

Borrowings under the Acadian LLC Credit Agreement bear interest, at Acadian LLC’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10% (“Adjusted Term SOFR”) plus 1%, plus, in each case, an additional amount ranging from 0.5% to 1.0%, with such additional amount based on Acadian LLC’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR plus an additional amount ranging from 1.5% to 2.0%, with such additional amount based on Acadian LLC’s Leverage Ratio.

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

Under the Acadian LLC Credit Agreement, the ratio of Acadian LLC’s third-party borrowings to Acadian LLC’s trailing twelve months Adjusted EBITDA, as defined by the Acadian LLC Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the Acadian LLC interest coverage ratio must not be less than 4x.

At December 31, 2024, Acadian LLC’s Leverage Ratio was 0x and Acadian LLC’s Interest Coverage Ratio was 96.1x.

In July 2016, we issued $275.0 million of 4.80% Senior Notes due 2026 (the “2026 Notes”).

3 unchanged sentences

Other Compensation Liabilities

Other compensation liabilities principally consist of cash-settled Affiliate equity and profit interests liabilities held by certain Affiliate key employees, and voluntary deferred compensation plans.

Other compensation liabilities principally consist of cash-settled Acadian LLC equity and profit interests liabilities held by key employees, and voluntary deferred compensation plans.

The following table summarizes our other compensation liabilities:

2 unchanged sentences

Share-based payments liability $ 25.4 $ 23.0

Affiliate profit interests liability — —

Profit interests liability

Employee equity 44.1 23.0

1 unchanged sentence

Total $ 92.5 $ 67.5

Share-based payments liability represents the value of Affiliate key employee-owned equity that may under certain circumstances be repurchased by us that is considered an equity award under U.S.

Share-based payments liability represents the value of Acadian LLC key employee-owned equity that may under certain circumstances be repurchased by us that is considered an equity award under U.S.

GAAP based on the terms and conditions attached to these interests.

Affiliate profit interests liability represent the value of Affiliate key employee-owned equity that may under certain circumstances be repurchased by us that is not considered an equity award under U.S.

Acadian LLC profit interests liability represents the value of Acadian LLC key employee-owned equity that may under certain circumstances be repurchased by us that is not considered an equity award under U.S.

GAAP, but rather a form of compensation arrangement, based on the terms and conditions attached to these interests.

Our obligation in any given period in respect of funding these potential repurchases of Affiliate equity is limited to only that portion that may be put to us by Affiliate key employees, which is typically capped annually under the terms of these arrangements such that we are not required to repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Affiliate key employees.

Certain of our and Acadian’s key employees are eligible to participate in our voluntary deferral plan, or VDP, which provides our senior personnel the opportunity to voluntarily defer a portion of their compensation.

Our obligation in any given period in respect of funding these potential repurchases of Acadian LLC equity is limited to only that portion that may be put to us by Acadian LLC key employees, which is typically capped annually under the terms of these arrangements such that we are not required to repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian LLC key employees.

Certain of our employees are eligible to participate in our voluntary deferral plan, or VDP, which provides our senior personnel the opportunity to voluntarily defer a portion of their compensation.

There is a voluntary deferral plan investment balance included in investments on the Consolidated Balance Sheets that corresponds to this deferral liability.

Additionally, we have recorded accrued incentive compensation of $119.6 million and $101.3 million on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively.

Included within the accrued incentive compensation balance is the vested portion of Acadian’s deferred compensation pool.

Acadian’s deferred compensation pool is based on a contractual percentage of Acadian performance fee revenues and post-bonus profits, and is subject to a three-year vesting period.

Included within the accrued incentive compensation balance is the vested portion of our deferred compensation pool.

The deferred compensation pool is based on a contractual percentage of Acadian LLC performance fee revenues and post-bonus profits, and is subject to a three-year vesting period.

Compensation expense is recognized over the requisite service period.

Unamortized compensation expense related to the unvested portion of the deferred compensation pool of $24.4 million and $14.3 million is expected to be recognized in the years ending December 31, 2025 and 2026, respectively.

For additional discussion of our compensation programs, please refer to the compensation discussions contained within our definitive proxy statement for our 2024 annual meeting of shareholders incorporated herein by reference.

For additional discussion of our compensation programs, please refer to the compensation discussions contained within our definitive proxy statement for our 2025 annual meeting of stockholders incorporated herein by reference.

Supplemental Liquidity Measure—Adjusted EBITDA

As supplemental information, we provide information regarding Adjusted EBITDA, which we define as economic net income before interest, income taxes, depreciation and amortization.

As supplemental information, we provide information regarding Adjusted EBITDA, which we define as economic net income before net interest, income taxes, depreciation and amortization.

Adjusted EBITDA is a non-GAAP liquidity measure that we provide in addition to, but not as a substitute for, cash flows from operating activities.

7 unchanged sentences

Net interest expense to third parties 15.9 13.5 19.7

Income tax expense (including tax expenses related to discontinued operations) 29.4 44.2 306.7

Depreciation and amortization (including intangible assets and discontinued operations)

Income tax expense

38.9 29.4 44.2

Depreciation and amortization (including intangible assets)

18.5 17.3 18.6

EBITDA $ 158.3 $ 126.0 183.1

Non-cash compensation costs, including revaluation of Affiliate key employee-owned equity and profit interests 1.2 (37.7) 34.8

EBITDA of discontinued operations attributable to controlling interests — — (960.2)

Non-cash compensation costs, including revaluation of Acadian LLC key employee-owned equity and profit interests

24.2 1.2 (37.7)

(Gain) loss on seed and co-investments (6.5) (2.9) 0.2

Restructuring (1)

9.5 1.3 (43.5)

Capital transaction costs — — 3.2

5 unchanged sentences

Economic net income $ 105.8 $ 75.7 81.6

(1) Included in restructuring for the year ended December 31, 2023 are $7.3 million of severance costs at Acadian, $0.9 million of legal-related restructuring costs at the Center and $1.3 million costs associated with the transfer of an insurance policy from our former Parent.

Included in restructuring for the year ended December 31, 2022 are $0.1 million of restructuring costs and $1.2 million costs associated with the transfer of an insurance policy from our former Parent.

Included in restructuring for the year ended December 31, 2021 are $3.8 million of restructuring costs at the Center and Affiliates and $1.2 million of costs associated with the transfer of an insurance policy from our former Parent and the gain on sale of Affiliates of $48.6 million.

(1) Included in restructuring for the year ended December 31, 2024 are $(1.0) million of severance-related items, $1.3 million costs associated with the transfer of an insurance policy from our former parent, and $0.9 million costs associated with the wind-down of the MACS business in the standalone format.

Included in restructuring for the year ended December 31, 2023 are $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co and $1.3 million costs associated with the transfer of an insurance policy from our former parent.

Included in restructuring for the year ended December 31, 2022 are $0.1 million of restructuring costs and $1.2 million of costs associated with the transfer of an insurance policy from our former parent.

(2) Includes non-cash equity-based award amortization expense.

10 unchanged sentences

Indemnifications

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

In the normal course of business, we occasionally enter into contracts that contain a variety of representations and warranties and which provide general indemnifications.

Our maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against us that have not yet occurred.

11 unchanged sentences

Lease obligations 77.7 9.5 18.4 16.6 33.2

Other liabilities (1)

$ 0.8 0.8 — — —

Maximum Affiliate equity and profits interests repurchase obligations (2)

Maximum Acadian LLC equity and profits interests repurchase obligations (1)

44.1 4.4 8.8 8.8 22.1

Total contractual obligations $ 396.8 $ 13.9 $ 302.2 $ 25.4 $ 55.3

(1) Represents amounts due to OM plc under the co-investment deed and related taxes.

(2) Represents amortized amounts held by Acadian key employees.

Our actual funding of these potential repurchases of Acadian equity and profits interests is limited to only that portion that may be put to us by Acadian key employees or that we decide to call to facilitate succession planning at Acadian, which is typically capped annually such that we do not repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian key employees.

(1) Represents amortized amounts held by Acadian LLC key employees.

Our actual funding of these potential repurchases of Acadian LLC equity and profits interests is limited to only that portion that may be put to us by Acadian LLC key employees or that we decide to call to facilitate succession planning at Acadian LLC, which is typically capped annually such that we do not repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian LLC key employees.

Any equity or profits interests repurchased by us are used to fund a portion of variable compensation awards resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.

14 unchanged sentences

We recognize forfeitures as they occur.

We have compensation arrangements with certain of our Affiliates whereby in exchange for continued service, Affiliate equity is either purchased by or granted to Affiliate key employees and may be repurchased either by Affiliate key employees or by us at a future date, subject to service requirements having been met.

Awards of equity made to Affiliate key employees are accounted for as cash-settled, with the fair value recognized as compensation expense over the requisite service period, with a corresponding liability carried within other compensation liabilities on the Consolidated Balance Sheets until the award is settled by us.

We have compensation arrangements Acadian LLC whereby in exchange for continued service, Acadian LLC equity is either purchased by or granted to key employees and may be repurchased either by Acadian LLC key employees or by us at a future date, subject to service requirements having been met.

Awards of equity made to key employees are accounted for as cash-settled, with the fair value recognized as compensation expense over the requisite service period, with a corresponding liability carried within other compensation liabilities on the Consolidated Balance Sheets until the award is settled by us.

The fair values of the liabilities are determined with the assistance of third party valuation specialists using discounted cash flow analyses which incorporate assumptions for the forecasted earnings information, growth rates, market risk adjustments, discount rates, when award holders maximize value and post-vesting restrictions.

5 unchanged sentences

As a result, it is likely that additions to, or reductions of, income tax expense will occur each year for prior reporting periods as actual tax returns and tax audits are settled.

Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of these assets over time.

these assets over time.

In the event that actual results differ from our expectations, or if our historical trends of positive operating income changes, we may be required to record a valuation allowance on some or all of these deferred tax assets, which may have a significant effect on our financial condition and results of operations.

7 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 7. Management’s Discussion and Analysis