What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 319 added, 477 removed, 563 unchanged (59% 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 Quarterly Report on Form 10-Q 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, excluding discontinued operations.

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

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

References in this Quarterly Report on Form 10-Q to “Acadian” refer to Acadian Asset Management LLC, our sole Affiliate.

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

None of the information in this Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q to “OM plc” refer to Old Mutual plc, our former parent.

None of the information in this Quarterly Report on Form 10-Q 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 Condensed Consolidated Financial Statements and related notes which appear in this Quarterly Report on Form 10-Q in Item 1, Financial Statements.

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• 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.

GAAP Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 includes an explanation of changes in our U.S.

GAAP revenue, expense and other items for the three and nine months ended September 30, 2024 and 2023, as well as key U.S.

GAAP Results of Operations for the Three Months Ended March 31, 2025 and 2024 includes an explanation of changes in our U.S.

GAAP revenue, expense and other items for the three months ended March 31, 2025 and 2024, as well as key U.S.

GAAP operating metrics.

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This section also provides a reconciliation between U.S.

GAAP net income attributable to controlling interests and ENI for the three and nine months ended September 30, 2024 and 2023, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses.

GAAP net income attributable to controlling interests and ENI for the three months ended March 31, 2025 and 2024, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses.

This section also provides key non-GAAP operating metrics.

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

Acadian comprises our Quant & Solutions reportable segment:

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

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

This segment is comprised of our interest in our sole Affiliate, 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.

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, non-U.S., small cap and enhanced equities, as well as credit and alternative strategies.

Acadian LLC comprises our Quant & Solutions reportable segment:

• Quant & Solutions —incorporates strategies that utilize advanced technology to collect and analyze data, aiming to identify mispriced assets and generate attractive risk-adjusted returns for investors;

portfolios include global, emerging market, non-U.S., small cap and enhanced equities, as well as credit and alternative strategies.

This segment consists of our ownership 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

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We earn management fees based on assets under management.

Approximately 80% of our management fees for the three months ended September 30, 2024 were 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 16%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee.

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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.

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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.

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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.

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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.

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Summary Results of Operations

The following table summarizes our unaudited results of operations for the three and nine months ended September 30, 2024 and 2023:

($ in millions, unless otherwise noted) Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 vs.

The following table summarizes our unaudited results of operations for the three months ended March 31, 2025 and 2024:

($ in millions, unless otherwise noted) Three Months Ended March 31,

2025 2024 2025 vs.

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GAAP operating margin (1)

21.9 % 28.1 % (621) bps 20.9 % 23.8 % (296) bps

26.6 % 21.7 % 494 bps

Earnings per share, basic ($) $ 0.54 $ 0.37 $ 0.17

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ENI operating margin (6)

31.7 % 28.7 % 294 bps 29.0 % 24.8 % 420 bps

28.3 % 27.7 % 61 bps

Economic net income (7)

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Net client cash flows (in billions) 3.8 0.4 3.4

Annualized revenue impact of net flows (8)

6.9 (0.3) 7.2 8.1 1.6 6.5

GAAP operating margin equals operating income divided by total revenue.

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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-related items at Acadian of $(0.3) million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended September 30, 2024.

Excludes costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended September 30, 2023.

Excludes severance-related items at Acadian of $(0.8) million, costs associated with the transfer of an insurance policy from our former Parent of $0.9 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the nine months ended September 30, 2024.

Excludes costs associated with the transfer of an insurance policy from our former parent of $0.9 million for the nine months ended September 30, 2023.

(3) Excludes severance-related items of $(0.2) million for the three months ended March 31, 2025.

Excludes severance-related items of $(0.2) million and costs associated with the transfer of an insurance policy from our former parent of $0.2 million for the three months ended March 31, 2024.

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

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GAAP net income 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.

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.

Assets Under Management

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

($ in billions) September 30, 2024 December 31, 2023

Acadian Asset Management $ 120.3 $ 103.7

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.

In the first quarter of 2025, we changed the presentation of our AUM.

The new presentation reflects better alignment of our view on the business and distribution channels.

We made certain reclassifications between strategies, client type and client location groupings to better reflect the underlying AUM.

In the AUM tables below, all periods have been reclassified to conform to the new presentation.

Our total assets under management were $121.9 billion as of March 31, 2025 and $117.3 billion as of December 31, 2024.

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

($ in billions) September 30, 2024 December 31, 2023

Developed Markets $ 92.6 $ 80.7

Emerging Markets 27.7 23.0

($ in billions) March 31, 2025 December 31, 2024

AUM % of total AUM % of total

Equity $ 28.5 23.4 % $ 26.6 22.7 %

Small Cap Equity 25.3 20.8 % 25.0 21.3 %

Global Equity 19.5 16.0 % 19.0 16.2 %

Emerging Markets Equity 19.4 15.9 % 18.1 15.4 %

Enhanced Equity 11.5 9.4 % 10.8 9.2 %

Other 17.7 14.5 % 17.8 15.2 %

Total assets under management $ 121.9 $ 117.3

The following table shows assets under management by client type as of each of the dates indicated:

($ in billions) September 30, 2024 December 31, 2023

($ in billions) March 31, 2025 December 31, 2024

AUM % of total AUM % of total

Public/Government $ 53.0 44.1 % $ 43.7 42.1 %

Commingled Trust/UCITS 29.4 24.4 % 25.2 24.3 %

Corporate/Union 14.7 12.2 % 12.0 11.6 %

Institutional $ 96.3 79.0 % $ 93.0 79.3 %

Sub-Advisory 14.0 11.5 % 13.1 11.2 %

Endowment/Foundation 3.8 3.2 % 3.4 3.3 %

Mutual Fund 1.0 0.8 % 0.7 0.7 %

Other 6.8 5.7 % 5.9 5.7 %

Wealth/Other 11.6 9.5 % 11.2 9.5 %

Total assets under management $ 121.9 $ 117.3

The following table shows assets under management by client location as of each of the dates indicated:

($ in billions) September 30, 2024 December 31, 2023

($ in billions) March 31, 2025 December 31, 2024

AUM % of total AUM % of total

$ 77.0 63.2 % $ 74.7 63.7 %

Europe 16.0 13.3 % 16.6 16.0 %

Asia 9.4 7.8 % 4.4 4.2 %

Australia 8.3 6.9 % 6.5 6.3 %

20.8 17.1 % 18.8 16.0 %

17.4 14.3 % 16.9 14.4 %

Other 6.7 5.4 % 6.9 5.9 %

Total assets under management $ 121.9 $ 117.3

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.

In addition, reinvested income and distributions is multiplied by the average fee rate 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:

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

Three Months Ended March 31,

($ in billions, unless otherwise noted) 2025 2024

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Net flows 3.8 0.4

Market appreciation (depreciation) 7.2 (2.0) 15.7 4.1

Market appreciation 0.8 6.3

Ending balance $ 121.9 $ 110.4

Average AUM $ 120.7 $ 107.6

Annualized basis points:

inflows 57.0 50.7 39.5 46.2

Annualized basis points:

outflows 39.8 41.9 36.6 41.2

Annualized revenue impact of net flows ($ in millions) $ 6.9 $ (0.3) $ 8.1 $ 1.6

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

Our client types include:

Sub-advisory, which includes assets managed for underlying mutual fund and variable insurance products which are sponsored by insurance companies and mutual fund platforms, where the end client is typically retail;

Institutional, which includes assets managed for public/government pension funds, including U.S.

Sub-advisory, which includes assets managed for third-party mutual funds sponsored by platforms in the U.S.

or abroad, where the end client is typically retail;

Institutional, which includes assets managed for public/government pension funds and other investments, including U.S.

state and local government funds and non-U.S.

sovereign wealth, local government and national pension funds;

also includes corporate and union-sponsored pension plans;

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

sovereign wealth, local government and national investments;

also includes corporate and union-sponsored pension plans and other investments;

Wealth/other, which includes assets managed for registered investment advisor clients, private banks, high-net-worth clients, and family offices, defined contribution clients on certain platforms, mutual funds directly sponsored by Acadian LLC, and other assets.

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

($ in billions) Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

($ in billions) Three Months Ended March 31,

Beginning balance $ 13.1 $ 13.6

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Net flows 0.4 (0.3)

Market appreciation (depreciation) 0.8 (0.3) 1.5 0.2

Market appreciation 0.5 0.7

Ending balance $ 14.0 $ 14.0

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Net flows 3.1 —

Market appreciation (depreciation) 6.0 (1.7) 12.9 3.5

Market appreciation 0.2 5.1

Ending balance $ 96.3 $ 86.8

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Net flows 3.8 0.4

Market appreciation (depreciation) 7.2 (2.0) 15.7 4.1

Market appreciation 0.8 6.3

Ending balance $ 121.9 $ 110.4

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

($ in billions) Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

($ in billions) Three Months Ended March 31,

Beginning balance $ 74.7 $ 70.2

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Net flows 1.0 (1.2)

Market appreciation (depreciation) 4.7 (1.1) 10.5 2.9

Market appreciation 1.3 4.1

Ending balance $ 77.0 $ 73.1

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Net flows 3.8 0.4

Market appreciation (depreciation) 7.2 (2.0) 15.7 4.1

Market appreciation 0.8 6.3

Ending balance $ 121.9 $ 110.4

At September 30, 2024, our total assets under management were $120.3 billion, an increase of $7.7 billion, or 6.8%, compared to $112.6 billion at June 30, 2024 and an increase of $22.9 billion, or 23.5%, compared to $97.4 billion at September 30, 2023.

The increase in assets under management compared to September 30, 2023 was driven by the equity market appreciation in the last twelve months.

The change in assets under management during the three months ended September 30, 2024 reflects net market appreciation of $7.2 billion, and net inflows of $0.5 billion.

The change in assets under management during the nine months ended September 30, 2024 reflects net market appreciation of $15.7 billion and net inflows of $0.9 billion.

At March 31, 2025, our total assets under management were $121.9 billion, an increase of $4.6 billion, or 3.9%, compared to $117.3 billion at December 31, 2024 and an increase of $11.5 billion, or 10.4%, compared to $110.4 billion at March 31, 2024.

The increase in assets under management compared to March 31, 2024 was driven by the equity market appreciation and positive NCCF in the last twelve months.

The change in assets under management during the three months ended March 31, 2025 reflects net market appreciation of $0.8 billion, and net inflows of $3.8 billion.

Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM.

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dollar changes relative to other currencies.

For the three months ended September 30, 2024, our net flows were $0.5 billion compared to $(0.5) billion for the three months ended September 30, 2023.

Reinvested income and distributions of $0.9 billion and $0.9 billion are reflected in the net flows for the three months ended September 30, 2024 and September 30, 2023, respectively.

For the three months ended September 30, 2024, the annualized revenue impact of the net flows was $6.9 million compared to $(0.3) million for the three months ended September 30, 2023.

Gross inflows of $3.1 billion in the three months ended September 30, 2024 yielded approximately 57 bps compared to $2.5 billion yielding approximately 51 bps in the year-ago period.

Gross outflows of $(3.5) billion yielded approximately 40 bps in the three months ended September 30, 2024 compared to $(3.9) billion yielding approximately 42 bps in the year-ago period.

For the nine months ended September 30, 2024, our net flows were $0.9 billion compared to $(0.3) billion for the nine months ended September 30, 2023.

The change in net flows during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily driven by increased sales in the nine months ended September 30, 2024.

Reinvested income and distributions of $2.5 billion and $2.7 billion are reflected in the net flows for the nine months ended September 30, 2024 and September 30, 2023, respectively.

For the nine months ended September 30, 2024, the annualized revenue impact of the net flows was $8.1 million compared to $1.6 million for the nine months ended September 30, 2023.

Gross inflows of $15.7 billion in the nine months ended September 30, 2024 yielded approximately 40 bps compared to $6.7 billion yielding approximately 46 bps in the year-ago period.

Gross outflows of $(17.3) billion yielded approximately 37 bps in the nine months ended September 30, 2024 compared to $(9.7) billion yielding approximately 41 bps in the year-ago period.

GAAP Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

GAAP results of operations were as follows for the three and nine months ended September 30, 2024 and 2023:

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

For the three months ended March 31, 2025, our net inflows were $3.8 billion compared to $0.4 billion for the three months ended March 31, 2024.

The change in net flows during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by strong gross sales, which increased to $8.8 billion in the three months ended March 31, 2025.

Reinvested income and distributions of $0.8 billion and $0.8 billion are reflected in the net inflows for the three months ended March 31, 2025 and March 31, 2024, respectively.

GAAP Results of Operations for the Three Months Ended March 31, 2025 and 2024

GAAP results of operations were as follows for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions, unless otherwise noted) 2025 2024 Increase

(Decrease) 2024 2023 Increase

GAAP Statement of Operations (1)

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Operating income 31.9 22.9 9.0

Investment income (loss) 1.5 (0.3) 1.8 2.5 0.2 2.3

Investment income 0.3 0.9 (0.6)

Interest income 1.1 1.3 (0.2)

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Net consolidated Funds’ investment gains 3.6 1.7 1.9

Income before income taxes 28.4 27.5 0.9 67.3 61.6 5.7

Income before taxes

32.1 21.8 10.3

Income tax expense 8.3 6.1 2.2

23.8 15.7 8.1

Net income attributable to non-controlling interests in consolidated Funds 2.1 0.2 1.9 3.7 0.3 3.4

Net income attributable to redeemable non-controlling interests in consolidated Funds

Net income attributable to controlling interests

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($ in millions) Three Months Ended

September 30, Nine Months Ended

September 30,

GAAP Statement of Operations 2024 2023 2024 2023

GAAP Consolidated Statements of Operations

Net income attributable to controlling interests $ 20.1 $ 14.6

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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 Affiliate’s investment performance over agreed time periods for certain clients has differed from pre-determined hurdles;

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.

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Our management fees are a function of the fee rates charged to our clients, which are typically expressed in basis points, and the levels of our assets under management.

Average basis points earned on average assets under management were 38.3 bps and 38.4 bps for the three and nine months ended September 30, 2024, respectively, and 37.6 bps and 37.9 bps for the three and nine months ended September 30, 2023.

The overall weighted average fee rate increase for the three and nine months ended September 30, 2024 is the result of changes in the mix of assets under management caused by market movements and client flows.

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Management fees increased $16.8 million, or 17.6%, from $95.3 million for the three months ended September 30, 2023 to $112.1 million for the three months ended September 30, 2024.

The increase was mainly driven by higher levels of average assets under management.

Average assets under management increased 15.8%, from $100.5 billion for the three months ended September 30, 2023 to $116.4 billion for the three months ended September 30, 2024, mainly due to the positive equity market impact in the past twelve months.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Management fees increased $41.1 million, or 14.7%, from $278.7 million for the nine months ended September 30, 2023 to $319.8 million for the nine months ended September 30, 2024.

Average basis points earned on average assets under management were 37.9 bps for the three months ended March 31, 2025, and 38.2 bps for the three months ended March 31, 2024.

The overall weighted average fee rate decrease for the three months ended March 31, 2025 is the result of changes in the mix of assets under management caused by market movements and client flows.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Management fees increased $10.7 million, or 10.5%, from $102.2 million for the three months ended March 31, 2024 to $112.9 million for the three months ended March 31, 2025.

The increase was primarily driven by higher levels of average assets under management.

Average assets under management increase 12.8%, from $98.2 billion for the nine months ended September 30, 2023 to $110.8 billion for the nine months ended September 30, 2024, mainly due to the positive equity market in the past twelve months.

Average assets under management increased 12.2%, from $107.6 billion for the three months ended March 31, 2024 to $120.7 billion for the three months ended March 31, 2025, mainly due to the positive equity market and positive net flows in the past twelve months.

Performance Fees

Approximately $20 billion, or 16% of our AUM, were 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.

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Performance fees decreased $(1.1) million, from $11.2 million for the three months ended September 30, 2023 to $10.1 million for the three months ended September 30, 2024, primarily due to a change in performance relative to benchmarks in certain strategies.

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

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Performance fees increased $2.1 million, from $13.9 million for the nine months ended September 30, 2023 to $16.0 million for the nine months ended September 30, 2024, primarily due to strong performance relative to benchmarks in certain strategies.

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

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Performance fees increased $2.2 million, or 71.0%, from $3.1 million for the three months ended March 31, 2024 to $5.3 million for the three months ended March 31, 2025, 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.

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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;

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Compensation and Benefits Expense

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

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

The following table presents the components of U.S.

GAAP compensation expense for the three and nine months ended September 30, 2024 and 2023:

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

GAAP compensation expense for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions) 2025 2024

2 unchanged sentences

Sales-based compensation (2)

3.3 1.2 6.9 4.7

Variable compensation (3)

29.4 28.5 83.7 74.4

Affiliate key employee distributions (4)

3.1 1.5 7.4 3.9

Non-cash Affiliate key employee equity revaluations (5)

9.3 (1.3) 19.6 (2.6)

Acadian LLC key employee distributions (4)

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

GAAP compensation and benefits expense

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

(2) Sales-based compensation is paid to our Affiliate’s 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 for our Affiliate, plus Center bonuses.

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

With our Affiliate, we have a contractual split of performance fees between Affiliate employees and BSUS.

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

(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.

Center variable compensation includes cash and our equity.

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.

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

Three Months Ended March 31,

($ in millions) 2025 2024

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$ 30.2 $ 26.4

(a) For the three and nine months ended September 30, 2024, $29.6 million and $83.6 million, respectively, of variable compensation expense (of the $29.4 million and $83.7 million above) is included within economic net income.

The three months ended September 30, 2024 excludes $(0.3) million of severance-related items at Acadian.

The nine months ended September 30, 2024 excludes $(0.8) million of severance-related items at Acadian and costs associated with the wind-down of the MACS business in the standalone format 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 our Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at the Affiliate.

Within our Affiliate we have a tiered equity structure, where 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.

(a) For the three months ended March 31, 2025, $30.4 million, variable compensation expense (of the $30.2 million above) is included within economic net income, which excludes $(0.2) million of variable compensation associated with restructuring.

For the three months ended March 31, 2024, $26.6 million of variable compensation expense (of the $26.4 million above) is included with economic net income, which excludes $(0.2) million of variable compensation associated with restructuring at Acadian LLC.

(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.

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Compensation and benefits expense increased $16.6 million, or 31.3%, from $53.0 million for the three months ended September 30, 2023 to $69.6 million for the three months ended September 30, 2024.

Fixed compensation and benefits increased $1.4 million, or 6.1%, from $23.1 million for the three months ended September 30, 2023 to $24.5 million for the three months ended September 30, 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 our Affiliate in late 2023.

Variable compensation increased $0.9 million, or 3.2%, from $28.5 million for the three months ended September 30, 2023 to $29.4 million for the three months ended September 30, 2024.

The increase was primarily attributable to higher pre-bonus profits in the three months ended September 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and 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.

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

Sales-based compensation increased $2.1 million, or 175.0%, from $1.2 million for the three months ended September 30, 2023 to $3.3 million for the three months ended September 30, 2024, 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 increased $1.6 million, or 106.7%, from $1.5 million for the three months ended September 30, 2023 to $3.1 million for the three months ended September 30, 2024.

Affiliate 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 Affiliate 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 Affiliate equity changed by $10.6 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(1.3) million for the three months ended September 30, 2023 and increased $9.3 million for the three months ended September 30, 2024.

For certain tiers of Affiliate 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 Affiliate equity.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Compensation and benefits expense increased $39.3 million, or 26.1%, from $150.6 million for the nine months ended September 30, 2023 to $189.9 million for the nine months ended September 30, 2024.

Fixed compensation and benefits increased $2.1 million, or 3.0%, from $70.2 million for the nine months ended September 30, 2023 to $72.3 million for the nine months ended September 30, 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 our Affiliate in late 2023.

Variable compensation increased $9.3 million, or 12.5%, from $74.4 million for the nine months ended September 30, 2023 to $83.7 million for the nine months ended September 30, 2024.

The increase was primarily attributable to higher pre-bonus profits in the nine months ended September 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and 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.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Compensation and benefits expense increased $2.7 million, or 4.6%, from $58.1 million for the three months ended March 31, 2024 to $60.8 million for the three months ended March 31, 2025.

Fixed compensation and benefits increased $0.8 million, or 3.4%, from $23.5 million for the three months ended March 31, 2024 to $24.3 million for the three months ended March 31, 2025, primarily reflecting cost of living increases and the cost of new hires supporting our growth initiatives.

Variable compensation increased $3.8 million, or 14.4%, from $26.4 million for the three months ended March 31, 2024 to $30.2 million for the three months ended March 31, 2025.

The increase was primarily attributable to higher pre-bonus profits in the three months ended March 31, 2025.

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

Sales-based compensation increased $2.2 million or 46.8% from $4.7 million for the nine months ended September 30, 2023 to $6.9 million for the nine months ended September 30, 2024, 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 increased $3.5 million, or 89.7%, from $3.9 million for the nine months ended September 30, 2023 to $7.4 million for the nine months ended September 30, 2024.

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

Revaluations of Affiliate equity changed $22.2 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(2.6) million for the nine months ended September 30, 2023 and increased $19.6 million for the nine months ended September 30, 2024.

For certain tiers of Affiliate 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 Affiliate equity.

Sales-based compensation increased $1.9 million or 118.8% from $1.6 million for the three months ended March 31, 2024 to $3.5 million for the three months ended March 31, 2025, 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 increased $0.9 million, or 40.9%, from $2.2 million for the three months ended March 31, 2024 to $3.1 million for the three months ended March 31, 2025.

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 three months ended March 31, 2025 is driven by higher operating earnings and the leveraged nature of this distribution share.

Revaluations of Acadian LLC equity changed $(4.7) million, reflecting fluctuations in the value of key employee ownership interests at Acadian LLC, as the value of the equity plan liability increased $4.4 million for the three months ended March 31, 2024 and decreased $(0.3) million for the three months ended March 31, 2025.

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

The change in the revaluation in the three months ended March 31, 2025 reflect changes in earnings, as well as changes in inputs used in the valuation model, including market risk assumptions and discount rates.

General and Administrative Expense

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

General and administrative expense increased $3.0 million, or 16.0%, from $18.8 million for the three months ended September 30, 2023 to $21.8 million for the three months ended September 30, 2024.

The increase in general and administrative expenses primarily reflects the impact of foreign currency changes, higher systems and portfolio administrative costs, and our continued investment in growth initiatives and capabilities.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

General and administrative expense increased $3.9 million, or 6.6%, from $59.0 million for the nine months ended September 30, 2023 to $62.9 million for the nine months ended September 30, 2024.

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

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

General and administrative expense increased $2.3 million, or 11.5%, from $20.0 million for the three months ended March 31, 2024 to $22.3 million for the three months ended March 31, 2025.

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

Depreciation and Amortization Expense

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Depreciation and amortization expense was flat at $4.5 million for each of the three months ended September 30, 2023 and 2024.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Depreciation and amortization expense increased $1.4 million, or 11.0%, from $12.7 million for the nine months ended September 30, 2023 to $14.1 million for the nine months ended September 30, 2024.

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

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Depreciation and amortization expense decreased $(0.4) million, or (8.7)%, from $4.6 million for the three months ended March 31, 2024 to $4.2 million for the three months ended March 31, 2025.

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

GAAP Other Non-Operating Items of Income and Expense

4 unchanged sentences

Investment Income

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Investment income (loss) changed $1.8 million, from $(0.3) million for the three months ended September 30, 2023 to $1.5 million for the three months ended September 30, 2024, reflecting the change in returns generated by seed capital investments.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Investment income increased $2.3 million, from $0.2 million for the nine months ended September 30, 2023 to $2.5 million for the nine months ended September 30, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Investment income decreased $(0.6) million, or (66.7)%, from $0.9 million for the three months ended March 31, 2024 to $0.3 million for the three months ended March 31, 2025, reflecting a decrease in returns generated by seed capital investments due to market depreciation in the three months ended March 31, 2025.

Interest Income

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Interest income decreased $(1.1) million, or (64.7)% from $1.7 million for the three months ended September 30, 2023 compared to $0.6 million for the three months ended September 30, 2024.

The decrease was due to lower average cash balances and decreases in short-term investment returns in the three months ended September 30, 2024.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Interest income decreased $(1.5) million, or (34.9)%, from $4.3 million for the nine months ended September 30, 2023 compared to $2.8 million for the nine months ended September 30, 2024.

The decrease was due to lower average cash balances and decreases in short-term investment returns in the nine months ended September 30, 2024.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Interest income decreased $(0.2) million, or (15.4)%, from $1.3 million for the three months ended March 31, 2024 compared to $1.1 million for the three months ended March 31, 2025.

The decrease was due to lower average cash balances and decreases in short-term investment returns in the three months ended March 31, 2025.

Interest Expense

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Interest expense decreased $(0.1) million, or (2.1)%, from $4.8 million for the three months ended September 30, 2023 to $4.7 million for the three months ended September 30, 2024, reflecting a lower balance drawn on the revolving credit facility in the three months ended September 30, 2024.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Interest expense decreased $(0.1) million, or (0.7)%, from $15.1 million for the nine months ended September 30, 2023 compared to $15.0 million for the nine months ended September 30, 2024, reflecting a lower balance drawn on the revolving credit facility in the nine months ended September 30, 2024.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Interest expense decreased $(0.2) million, or (4.0)%, from $5.0 million for the three months ended March 31, 2024 compared to $4.8 million for the three months ended March 31, 2025, reflecting a decrease in interest rates on the revolving credit facility in the three months ended March 31, 2025.

GAAP Income Tax Expense

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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.

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Income tax expense increased $1.7 million, from $7.7 million for the three months ended September 30, 2023 to $9.4 million for the three months ended September 30, 2024.

The increase in income tax expense primarily relates to an increase in the disallowance of executive compensation deduction in the three months ended September 30, 2024.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023 :

Income tax expense increased $2.8 million, from $18.3 million for the nine months ended September 30, 2023 to $21.1 million for the nine months ended September 30, 2024.

The increase in income tax expense primarily relates to an increase in the disallowance of executive compensation deduction in the nine months ended September 30, 2024.

Three months ended March 31, 2025 compared to three months ended March 31, 2024 :

Income tax expense increased $2.2 million, from $6.1 million for the three months ended March 31, 2024 to $8.3 million for the three months ended March 31, 2025.

The increase in income tax expense primarily relates to an increase in pretax income attributable to controlling interest in the three months ended March 31, 2025.

GAAP Consolidated Funds

The net income or loss of all consolidated Funds, excluding any income or loss attributable to seed capital or co-investments we make in the Funds, is included in non-controlling interests in our Consolidated Financial Statements and is not included in net income attributable to controlling interests or in management fees.

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Consolidated Funds’ revenue increased $0.1 million, from $0.8 million for the three months ended September 30, 2023 to $0.9 million for the three months ended September 30, 2024.

Consolidated Funds’ expense decreased $(0.6) million, from $0.8 million for the three months ended September 30, 2023 to $0.2 million for the three months ended September 30, 2024.

Net consolidated Funds’ investment gain increased $3.3 million from $0.7 million for the three months ended September 30, 2023 to $4.0 million for the three months ended September 30, 2024.

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

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023 :

Consolidated Funds’ revenue decreased $(0.8) million, from $2.8 million for the nine months ended September 30, 2023 to $2.0 million for the nine months ended September 30, 2024.

Consolidated Funds’ expense decreased $(2.3) million, from $2.7 million for the nine months ended September 30, 2023 to $0.4 million for the nine months ended September 30, 2024.

Net consolidated Funds’ investment gain increased $4.7 million from $1.8 million for the nine months ended September 30, 2023 to $6.5 million for the nine months ended September 30, 2024.

Three months ended March 31, 2025 compared to three months ended March 31, 2024 :

Consolidated Funds’ revenue increased $1.3 million, from $0.4 million for the three months ended March 31, 2024 to $1.7 million for the three months ended March 31, 2025.

Consolidated Funds’ expense increased $0.6 million, from $0.1 million for the three months ended March 31, 2024 to $0.7 million for the three months ended March 31, 2025.

Net consolidated Funds’ investment gain increased $1.9 million from $1.7 million for the three months ended March 31, 2024 to $3.6 million for the three months ended March 31, 2025.

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

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The following table shows our key U.S.

GAAP operating metrics for the three and nine months ended September 30, 2024 and 2023.

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

GAAP operating metrics for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

($ in millions) 2025 2024

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Variable compensation $ 30.2 $ 26.4

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)

$ 64.2 $ 51.2

1 unchanged sentence

47.0 % 51.6 %

Affiliate key employee distributions $ 3.1 $ 1.5 $ 7.4 $ 3.9

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

$ 29.4 $ 31.7 $ 76.3 $ 74.2

GAAP Affiliate key employee distributions ratio (3)

Acadian LLC key employee distributions

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

$ 34.0 $ 24.8

GAAP Acadian LLC key employee distributions ratio (3)

(1) Excluding the effect of Funds’ consolidation in the applicable periods, the U.S.

GAAP operating margin is 21.5% for the three months ended September 30, 2024, 28.4% for the three months ended September 30, 2023, 20.5% for the nine months ended September 30, 2024, and 24.0% for the nine months ended September 30, 2023.

(2) Excludes consolidated Funds’ expense of $0.2 million for the three months ended September 30, 2024, $0.8 million for the three months ended September 30, 2023, $0.4 million for the nine months ended September 30, 2024, and $2.7 million for the nine months ended September 30, 2023.

(3) Excludes the effect of Funds consolidation for the three and nine months ended September 30, 2024 and 2023.

(4) Excludes consolidated Funds’ revenue of $0.9 million for the three months ended September 30, 2024, $0.8 million for the three months ended September 30, 2023, $2.0 million for the nine months ended September 30, 2024, and $2.8 million for the nine months ended September 30, 2023.

(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:

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

GAAP operating margin is 26.1% for the three months ended March 31, 2025, and 21.5% for the three months ended March 31, 2024.

(2) Excludes consolidated Funds’ expense of $0.7 million for the three months ended March 31, 2025, and $0.1 million for the three months ended March 31, 2024.

(3) Excludes the effect of Funds consolidation for the three months ended March 31, 2025 and 2024.

(4) Excludes consolidated Funds’ revenue of $1.7 million for the three months ended March 31, 2025, and $0.4 million for the three months ended March 31, 2024.

(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:

Three Months Ended March 31,

($ in millions) 2025 2024

1 unchanged sentence

$ 31.9 $ 22.9

Affiliate key employee distributions

3.1 1.5 7.4 3.9

Operating (income) loss of consolidated Funds (0.7) — (1.6) (0.1)

Operating income before Affiliate key employee distributions

29.4 31.7 76.3 74.2

Acadian LLC key employee distributions

Operating income of consolidated Funds (1.0) (0.3)

Operating income before Acadian LLC key employee distributions

Variable compensation 30.2 26.4

Operating income before variable compensation and Affiliate key employee distributions

Operating income before variable compensation and Acadian LLC key employee distributions

$ 64.2 $ 51.2

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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 Affiliate.

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.”

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• 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 our Affiliate by consolidated Funds.

• We include our share of earnings from our equity-accounted Affiliate 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.

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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.

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Reconciliation of U.S.

GAAP Net Income to Economic Net Income for the Three and Nine Months Ended September 30, 2024 and 2023

The following table reconciles net income attributable to controlling interests to economic net income for the three and nine months ended September 30, 2024 and 2023:

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

GAAP Net Income to Economic Net Income for the Three Months Ended March 31, 2025 and 2024

The following table reconciles net income attributable to controlling interests to economic net income for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions) 2025 2024

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Seed/Co-investment (gains) losses and financings (1)

(3.0) 0.1 (4.4) (0.8)

Tax benefit of goodwill and acquired intangibles deductions 0.3 0.4

Discontinued operations attributable to controlling interests and restructuring (2)

— 0.3 1.4 0.9

ENI tax normalization

0.3 — 0.9 0.7

Tax effect of above adjustments, as applicable (3)

(1.7) 0.2 (4.6) 0.6

Economic net income

$ 20.3 $ 17.4

(1) The net return on seed/co-investment (gains) losses and financings for the three and nine months ended September 30, 2024 and 2023 is shown in the following table:

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

(1) The net return on seed/co-investment (gains) losses and financings for the three months ended March 31, 2025 and 2024 is shown in the following table:

Three Months Ended March 31,

($ in millions) 2025 2024

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

(2) The three months ended September 30, 2024 includes severance-related items at Acadian of $(0.3) million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million.

The three months ended September 30, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.3 million.

The nine months ended September 30, 2024 includes severance-related items at Acadian of $(0.8) million, costs associated with the transfer of an insurance policy from our former parent of $0.9 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million.

The nine months ended September 30, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.9 million.

(2) The three months ended March 31, 2025 includes severance-related items of $(0.2) million.

The three months ended March 31, 2024 includes severance-related items of $(0.2) million and costs associated with the transfer of an insurance policy from our former parent of $0.2 million.

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

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The following table reconciles U.S.

GAAP revenue to ENI revenue for the three and nine months ended September 30, 2024 and 2023:

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

GAAP revenue to ENI revenue for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions) 2025 2024

GAAP revenue $ 119.9 $ 105.7

Exclude revenue from consolidated Funds attributable to non-controlling interests

(0.9) (0.8) (2.0) (2.8)

Exclude revenue from consolidated Funds

ENI revenue $ 118.2 $ 105.3

The following table identifies the components of ENI revenue:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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Performance fees (2)

10.1 11.2 16.0 13.9

ENI revenue $ 118.2 $ 105.3

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As shown in the following reconciliation, we exclude 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.

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.

GAAP operating expense to ENI operating expense for the three and nine months ended September 30, 2024 and 2023.

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

GAAP operating expense to ENI operating expense for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

($ in millions) 2025 2024

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Non-cash key employee equity and profit interest revaluations

(9.3) 1.3 (19.6) 2.6

Restructuring costs (1)

— (0.2) (1.4) (0.9)

Funds’ operating expense (0.7) (0.1)

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(30.4) (26.6)

Affiliate key employee distributions (3.1) (1.5) (7.4) (3.9)

Acadian LLC key employee distributions

ENI operating expense $ 54.3 $ 49.5

(1) The three months ended September 30, 2024 includes $(0.3) million of severance-related items at Acadian and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2023 includes $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2024 includes $(0.8) million of severance-related items at Acadian, $0.9 million of costs associated with the transfer of an insurance policy from our former parent, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million.

The nine months ended September 30, 2023 includes $0.9 million costs associated with the transfer of an insurance policy from our former parent.

(2) The three and nine months ended September 30, 2024 excludes $(0.3) million and $(0.8) million, respectively, of severance-related items at Acadian that is included within restructuring costs.

The nine months ended September 30, 2024 excludes $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs.

(1) The three months ended March 31, 2025 includes $(0.2) million of severance-related items.

The three months ended March 31, 2024 includes $(0.2) million of severance-related items and $0.2 million costs associated with the transfer of an insurance policy from our former parent.

(2) The three months ended March 31, 2025 excludes $(0.2) million of severance-related items that is included within restructuring costs.

The three months ended March 31, 2024 excludes $(0.2) million severance-related items that is included within restructuring costs.

The following table identifies the components of ENI operating expense:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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General and administrative expenses (2)

24.9 19.8 68.9 62.8

Depreciation and amortization 4.2 4.6

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The following table reconciles U.S.

GAAP compensation and benefits expense for the three and nine months ended September 30, 2024 and 2023 to ENI fixed compensation and benefits expense:

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

GAAP compensation and benefits expense for the three months ended March 31, 2025 and 2024 to ENI fixed compensation and benefits expense:

Three Months Ended March 31,

($ in millions) 2025 2024

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Non-cash key employee equity and profit interest revaluations excluded from ENI

(9.3) 1.3 (19.6) 2.6

Sales-based compensation reclassified to ENI general & administrative expenses

(3.3) (1.2) (6.9) (4.7)

Affiliate key employee distributions

(3.1) (1.5) (7.4) (3.9)

Acadian LLC key employee distributions

Restructuring expenses (a)

0.2 — (0.1) —

Variable compensation

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ENI fixed compensation and benefits $ 24.3 $ 23.5

(a) The three months ended September 30, 2024 includes $(0.3) million of severance-related items at Acadian.

The nine months ended September 30, 2024 includes $(0.8) million of severance-related items at Acadian and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million.

(a) The three months ended March 31, 2025 includes $(0.2) million of severance-related items.

The three months ended March 31, 2024 includes $(0.2) million of severance-related items.

(2) The following table reconciles U.S.

GAAP general and administrative expense to ENI general and administrative expense:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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Sales-based compensation 3.5 1.6

Restructuring costs (0.2) (0.2) (0.9) (0.9)

Restructuring costs (a)

ENI general and administrative expense $ 25.8 $ 21.4

(a) Reflects $0.2 million of costs associated with the transfer of an insurance policy from our former parent for the three months ended March 31, 2024.

Key Non-GAAP Operating Metrics

The following table shows our key non-GAAP operating metrics for the three and nine months ended September 30, 2024 and 2023.

The following table shows our key non-GAAP operating metrics for the three months ended March 31, 2025 and 2024.

We present these metrics because they are the measures our management uses to evaluate the profitability of our business and are useful to investors because they represent the key drivers and measures of economic performance within our business model.

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GAAP measure:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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47.6 % 47.7 %

Affiliate key employee distributions

$ 3.1 $ 1.5 $ 7.4 $ 3.9

Acadian LLC key employee distributions

ENI operating earnings (1)

$ 33.5 $ 29.2

ENI Affiliate key employee distributions ratio (7)

8.0 % 4.9 % 7.6 % 5.4 %

(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.

ENI Acadian LLC key employee distributions ratio (7)

(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.

GAAP operating income to ENI operating earnings:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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Exclude the impact of:

Affiliate key employee-owned equity and profit interest revaluations 9.3 (1.3) 19.6 (2.6)

Acadian LLC key employee-owned equity and profit interest revaluations

Goodwill impairment and amortization of acquired intangible assets

Restructuring costs (a)

— 0.2 1.4 0.9

Affiliate key employee distributions 3.1 1.5 7.4 3.9

Acadian LLC key employee distributions

Variable compensation 30.4 26.6

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ENI operating earnings 33.5 29.2

ENI Affiliate key employee distributions (3.1) (1.5) (7.4) (3.9)

ENI earnings after Affiliate key employee distributions $ 35.6 $ 29.1 $ 89.9 $ 68.6

(a) The three months ended September 30, 2024 includes $(0.3) million of severance-related items at Acadian and $0.3 million costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2023 includes $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2023 includes $0.9 million of costs associated with the transfer of an insurance policy from our former parent.

(b) The three and nine months ended September 30, 2024 excludes $(0.3) million and $(0.8) million, respectively, of severance-related items at Acadian.

The nine months ended September 30, 2024 excludes $0.9 million of costs associated with the wind-down of the MACS business in the standalone format.

(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.

ENI Acadian LLC key employee distributions

ENI earnings after Acadian LLC key employee distributions

$ 30.4 $ 27.0

(a) The three months ended March 31, 2025 includes $(0.2) million of severance-related items.

The three months ended March 31, 2024 includes $(0.2) million of severance-related items and $0.2 million of costs associated with the transfer of an insurance policy from our former parent.

(b) The three months ended March 31, 2025 excludes $(0.2) million of severance-related items that are included within restructuring costs.

The three months ended March 31, 2024 excludes $(0.2) million of severance-related items 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.

GAAP operating margin.

GAAP operating margin, excluding the effect of consolidated Funds, is 21.5% for the three months ended September 30, 2024, 28.4% for the three months ended September 30, 2023, 20.5% for the nine months ended September 30, 2024, and 24.0% for the nine months ended September 30, 2023.

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 we have in our Affiliate.

GAAP operating margin, excluding the effect of consolidated Funds, is 26.1% for the three months ended March 31, 2025, and 21.5% for the three months ended March 31, 2024.

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.

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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 because in our profit-sharing economic model, scale benefits both the Affiliate employees and our 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.

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(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 our Affiliate, plus Center bonuses.

Variable compensation is usually awarded based on a contractual percentage of our 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 our 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 our 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 our Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate.

Within our Affiliate, we have a tiered equity structure, where 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

The following table reconciles the United States statutory tax to tax on economic net income:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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federal and state statutory rates (2)

(8.9) (7.2) (22.0) (16.1)

Other reconciling tax adjustments — —

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(1) Includes interest income and third-party ENI interest expense, as shown in the following table:

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

Three Months Ended March 31,

($ in millions) 2025 2024

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Other ENI interest expense exclusions (a)

1.1 0.4 2.7 1.2

ENI net interest expense (2.4) (3.0)

ENI earnings after Affiliate key employee distributions (b)

35.6 29.1 89.9 68.6

ENI earnings after Acadian LLC key employee distributions (b)

Pre-tax economic net income $ 28.0 $ 24.0

(a) Other ENI interest expense exclusions represent cost of financing on seed capital and co-investments and amortization of debt issuance costs.

(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 to ENI earnings after Acadian LLC key employee distributions.

(2) Taxed at U.S.

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(3) The economic net income effective tax rate is calculated by dividing the tax on economic net income by pre-tax economic net income.

The value of our seed capital investments was $90.6 million as of September 30, 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.

The value of our seed capital investments was $91.5 million as of March 31, 2025 and $90.3 million as of December 31, 2024, including direct investments in consolidated Funds.

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

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

($ in millions) September 30,

($ in millions) March 31,

2025 December 31,

Investments per Consolidated Balance Sheets $ 68.5 $ 64.7

Investments per Condensed Consolidated Balance Sheets

$ 52.9 $ 67.9

Seed capital investment in consolidated Funds 71.6 70.9

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We operate our business through the following reportable segment:

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

This segment is comprised of our interest in Acadian.

The corporate head office is included within the Other category.

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.

portfolios include global, emerging market, non-U.S., small cap and enhanced equities, as well as credit and alternative strategies.

This segment consists of our ownership 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.

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

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.

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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 our Affiliate by consolidated Funds.

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

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

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

ENI segment results are also adjusted to exclude the portion of consolidated 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 Funds’ revenues, consolidated Funds’ 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 table identifies the components of segment ENI revenue for the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

($ in millions) 2024 2023

Quant & Solutions Total Quant & Solutions Total

Management fees $ 112.1 $ 112.1 $ 95.3 $ 95.3

Performance fees

10.1 10.1 11.2 11.2

ENI revenue $ 122.2 $ 122.2 $ 106.5 $ 106.5

The following table identifies the components of segment ENI revenue for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

The following table identifies the components of Quant & Solutions segment ENI revenue for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions) 2025 2024

Quant & Solutions Total Quant & Solutions Total

Management fees $ 112.9 $ 102.2

Performance fees

Segment ENI revenue

$ 118.2 $ 105.3

ENI revenue $ 335.8 $ 335.8 $ 292.6 $ 292.6

Quant & Solutions Segment ENI Revenue

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Quant & Solutions ENI revenue increased $15.7 million, or 14.7%, from $106.5 million for the three months ended September 30, 2023 to $122.2 million for the three months ended September 30, 2024.

The increase was mainly attributable to 17.6% higher management fees driven by higher average AUM resulting from positive equity markets in the past twelve months, slightly offset by lower performance fees.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Quant & Solutions ENI revenue increased $43.2 million, or 14.8%, from $292.6 million for the nine months ended September 30, 2023 to $335.8 million for the nine months ended September 30, 2024.

The increase was attributable to 14.7% higher management fees driven by higher average AUM resulting from positive equity markets in the past twelve months and higher performance fees due to strong performance relative to market in certain strategies.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Quant & Solutions ENI revenue increased $12.9 million, or 12.3%, from $105.3 million for the three months ended March 31, 2024 to $118.2 million for the three months ended March 31, 2025.

The increase was attributable to 71.0% higher performance fees due to strong performance relative to market in certain strategies in the three months ended March 31, 2025, and 10.5% higher management fees driven by higher average AUM resulting from positive equity markets in the past twelve months.

Segment ENI Expense

The following table identifies the components of segment ENI expense for the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

($ in millions) 2024 2023

Quant & Solutions Other Total Quant & Solutions Other Total

The following table identifies the components of Quant & Solutions segment ENI expense for the three months ended March 31, 2025 and 2024:

($ in millions) Three Months Ended March 31,

Fixed compensation & benefits

$ 22.9 $ 21.6

General and administrative expense 22.7 2.2 24.9 18.0 1.8 19.8

Depreciation and amortization

4.5 — 4.5 4.5 — 4.5

Total ENI operating expenses

$ 49.9 $ 4.0 $ 53.9 $ 44.0 $ 3.4 $ 47.4

Variable compensation

29.0 0.6 29.6 27.8 0.7 28.5

Affiliate key employee distributions

3.1 — 3.1 1.5 — 1.5

Total expenses

$ 82.0 $ 4.6 $ 86.6 $ 73.3 $ 4.1 $ 77.4

The following table identifies the components of segment ENI expense for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

($ in millions) 2024 2023

Quant & Solutions Other Total Quant & Solutions Other Total

Fixed compensation & benefits

$ 66.9 $ 5.4 $ 72.3 $ 65.1 $ 5.1 $ 70.2

General and administrative expense 62.7 6.2 68.9 57.1 5.7 62.8

Acadian LLC key employee distributions

Depreciation and amortization

13.7 — 13.7 12.7 — 12.7

Total ENI operating expenses $ 143.3 $ 11.6 $ 154.9 $ 134.9 $ 10.8 $ 145.7

Variable compensation

81.8 1.8 83.6 72.3 2.1 74.4

Affiliate key employee distributions

General and administrative expense 23.7 19.5

Segment ENI expenses

$ 83.3 $ 73.9

Total expenses $ 232.5 $ 13.4 $ 245.9 $ 211.1 $ 12.9 $ 224.0

Quant & Solutions Segment ENI Expense

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Quant & Solutions ENI operating expense increased $5.9 million, or 13.4%, from $44.0 million for the three months ended September 30, 2023 to $49.9 million for the three months ended September 30, 2024.

The increase was driven by 26.1% higher ENI general and administrative expense reflecting the impact of foreign currency changes, higher systems and portfolio administration costs, and our continued investment in growth initiatives and capabilities.

Quant & Solutions ENI fixed compensation and benefits expense increased 5.6%, reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring at our Affiliate 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.

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 4.3% as a result of higher earnings before variable compensation, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues in the three months ended September 30, 2024.

Affiliate key employee distributions attributable to Quant & Solutions increased 106.7%.

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

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Quant & Solutions ENI operating expense increased $8.4 million, or 6.2%, from $134.9 million for the nine months ended September 30, 2023 to $143.3 million for the nine months ended September 30, 2024.

The increase was driven by 9.8% higher ENI general and administrative expense primarily due to higher outside services, systems, and portfolio administrative costs, reflecting our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Quant & Solutions ENI fixed compensation and benefits expense increased 2.8%, 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.

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Quant & Solutions segment ENI expenses increased $9.4 million, or 12.7%, from $73.9 million for the three months ended March 31, 2024 to $83.3 million for the three months ended March 31, 2025.

Quant & Solutions ENI fixed compensation and benefits expense increased 6.0%, reflecting cost of living increases and the cost of new hires supporting our growth initiatives.

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 13.1% as a result of higher earnings before variable compensation, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues in the nine months ended September 30, 2024.

Affiliate key employee distributions attributable to Quant & Solutions increased 89.7%.

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

Other ENI Expense

Three months ended September 30, 2024 compared to three months ended September 30, 2023:

Other ENI operating expense increased $0.6 million, or 17.6%, from $3.4 million for the three months ended September 30, 2023 to $4.0 million for the three months ended September 30, 2024.

The increase was driven by 22.2% higher general and administrative expense driven by an increase in legal costs.

Other ENI variable compensation expense decreased (14.3)% due to lower non-cash equity compensation amortization at the corporate head office.

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023:

Other ENI operating expense increased $0.8 million, or 7.4%, from $10.8 million for the nine months ended September 30, 2023 to $11.6 million for the nine months ended September 30, 2024.

The increase was driven by 8.8% higher general and administrative expense driven by an increase in legal costs and 5.9% higher fixed compensation and benefit expense due to cost of living and employee benefit increases driven by inflation.

Other ENI variable compensation expense decreased (14.3)% due to lower non-cash equity compensation amortization at the corporate head office.

Acadian LLC key employee distributions attributable to Quant & Solutions increased 40.9%.

The change in Acadian LLC key employee distributions during the three months ended March 31, 2025 is driven by higher operating earnings and the leveraged nature of this distribution share.

Quant & Solutions ENI general and administrative expense increased 21.5% primarily due to higher systems, outside services and portfolio administrative costs, reflecting our continued investment in growth initiatives and capabilities, foreign currency loss, partially offset by lower consultant costs.

Unallocated corporate expense

The following table identifies unallocated corporate expense for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

($ in millions) 2025 2024

Unallocated corporate expenses (1)

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

Three months ended March 31, 2025 compared to three months ended March 31, 2024:

Unallocated corporate expense decreased $(0.1) million, or (2.2)%, from $4.6 million for the three months ended March 31, 2024 to $4.5 million for the three months ended March 31, 2025.

The decrease was driven by lower fixed compensation and benefits expense.

Capital Resources and Liquidity

1 unchanged sentence

All amounts presented exclude consolidated Funds:

Nine Months Ended September 30,

Three Months Ended March 31,

($ in millions) 2025 2024

4 unchanged sentences

(1) Excludes consolidated Funds.

Comparison for the nine months ended September 30, 2024 and 2023

Net cash from operating activities increased $23.3 million, from net cash provided of $35.8 million for the nine months ended September 30, 2023 to net cash provided of $59.1 million for the nine months ended September 30, 2024, driven by changes in net income offset by changes in operating assets and liabilities period-over-period.

In the nine months ended September 30, 2024, net cash from investing activities changed by $(37.1) million, from $(11.2) million used in the nine months ended September 30, 2023 to $(48.3) million used in the nine months ended September 30, 2024, driven by higher net purchases of investment securities and lower fixed asset additions in the nine months ended September 30, 2024.

Net cash from financing activities decreased $114.3 million, from $10.2 million provided in the nine months ended September 30, 2023 to $(104.1) million used in the nine months ended September 30, 2024, primarily due to the repayment of revolving credit facility borrowings and higher share repurchases in the nine months ended September 30, 2024.

Comparison for the three months ended March 31, 2025 and 2024

Net cash from operating activities, excluding consolidated Funds, decreased $(9.4) million, from net cash used of $(39.3) million for the three months ended March 31, 2024 to net cash used of $(48.7) million for the three months ended March 31, 2025, driven by changes in net income offset by changes in operating assets and liabilities period-over-period.

In the three months ended March 31, 2025, net cash from investing activities, excluding consolidated Funds, changed by $13.2 million, from $(1.4) million used in the three months ended March 31, 2024 to $11.8 million provided in the three months ended March 31, 2025, driven by higher net sales of investment securities in the three months ended March 31, 2025.

Net cash from financing activities, excluding consolidated Funds, increased $65.3 million, from $(3.7) million used in the three months ended March 31, 2024 to $61.6 million provided in the three months ended March 31, 2025, primarily due to higher share repurchases in the three months ended March 31, 2024.

Supplemental Liquidity Measure — Adjusted EBITDA

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The following table reconciles our U.S.

GAAP net income attributable to controlling interests to EBITDA to Adjusted EBITDA to economic net income for the three and nine months ended September 30, 2024 and 2023.

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

GAAP net income attributable to controlling interests to EBITDA to Adjusted EBITDA to economic net income for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

($ in millions) 2025 2024

2 unchanged sentences

Income tax expense 8.3 6.1

Depreciation and amortization (including intangible assets) 4.5 4.5 14.1 12.7

Depreciation and amortization

EBITDA $ 36.3 $ 29.0

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

9.4 (1.0) 20.2 (1.6)

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

Gain on seed and co-investments (1.2) (1.8)

Restructuring expenses (1)

0.2 0.3 1.1 0.9

Capital transaction costs — — — —

Restructuring (1)

Adjusted EBITDA

2 unchanged sentences

Depreciation and amortization (2)

(4.8) (4.9) (14.4) (13.7)

Tax on economic net income (7.7) (6.6)

1 unchanged sentence

$ 20.3 $ 17.4

(1) The three months ended September 30, 2024 includes $(0.3) million of severance-related items at Acadian and $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The three months ended September 30, 2023 includes $0.3 million of costs associated with the transfer of an insurance policy from our former parent.

The nine months ended September 30, 2023 includes costs associated with the transfer of an insurance policy from our former parent of $0.9 million.

(1) The three months ended March 31, 2025 includes $(0.2) million of severance-related items.

The three months ended March 31, 2024 includes $(0.2) million of severance-related items and $0.2 million of costs associated with the transfer of an insurance policy from our former parent.

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

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Our ability to secure short-term and long-term financing in the future will depend on several factors, including our future profitability, our relative levels of debt and equity and the overall condition of the credit markets.

As of March 31, 2025, we have $119.6 million in cash and cash equivalents and $91.5 million in seed capital investments.

Borrowings and Long-Term Debt

The following table summarizes our financing arrangements as of the dates indicated:

($ in millions) September 30,

($ in millions) March 31,

2025 December 31,

7 unchanged sentences

Total third party borrowings $ 274.4 $ 274.3

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

(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 August 29, 2024, Acadian, 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 Credit Agreement”), which replaced Acadian’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 Credit Agreement is August 29, 2027.

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 September 30, 2024, Acadian’s Leverage Ratio was 0.0x and Acadian’s Interest Coverage Ratio was 69.8x.

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

At March 31, 2025, Acadian LLC’s Leverage Ratio was 0.4x and Acadian LLC’s Interest Coverage Ratio was 109.7x.

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 certain key employees, and voluntary deferred compensation plans.

The following table summarizes our other compensation liabilities as of each of the dates indicated:

September 30,

2025 December 31,

1 unchanged sentence

Share-based payments liability $ 23.8 $ 25.4

Affiliate profit interests liability 18.5 —

Profit interests liability

Employee equity 43.4 44.1

1 unchanged sentence

Total $ 76.2 $ 92.5

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 represents 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 Condensed Consolidated Balance Sheets that corresponds to this deferral liability.

Additionally, we have recorded accrued incentive compensation of $84.0 million and $101.3 million on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 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.

Additionally, we have recorded accrued incentive compensation of $34.6 million and $119.6 million on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively.

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.

2 unchanged sentences

There have been no significant changes to the critical accounting policies and estimates disclosed in our most recent Form 10-K for the year ended December 31, 2024.

Critical accounting policies and estimates are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

Critical accounting policies and estimates are those that require

management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

Recent Accounting Developments

8 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-Q

Item 2. Management’s Discussion and Analysis