Acadian Asset Management Inc. 10-Q

Item 1. Financial Statements. Acadian Asset Management Inc. Condensed Consolidated Balance Sheets (in millions, except for share and per share data, unaudited) March 31, 2025 December 31, 2024 Assets Cash and cash equivalents $ 119.6 $ 94.8 Investment advisory fees receivable 132.0 164.7 Income taxes receivable — 3.0 Fixed assets, net 33.9 35.7 Right of use assets 50.9 52.5 Investments 52.9 67.9 Goodwill 20.3 20.3 Other assets 26.5 26.7 Deferred tax assets 77.0 78.3 Assets of consolidated Funds: Cash and cash equivalents, restricted 3.6 3.7 Investments 155.8 154.0 Other assets 4.8 1.6 Total assets $ 677.3 $ 703.2 Liabilities and stockholders’ equity Accounts payable and accrued expenses $ 26.3 $ 37.9 Accrued incentive compensation 34.6 119.6 Other compensation liabilities 76.2 92.5 Accrued income taxes 6.2 3.3 Operating lease liabilities 65.5 67.3 Revolving credit facility 80.0 — Third party borrowings 274.4 274.3 Liabilities of consolidated Funds: Accounts payable and accrued expenses 0.8 0.5 Other liabilities 0.5 0.3 Securities sold short 20.3 20.4 Total liabilities 584.8 616.1 Commitments and contingencies Redeemable non-controlling interests in consolidated Funds 70.8 67.1 Equity: Common stock (par value $ 0.001 ; 36,721,016 and 37,477,707 shares, respectively, issued) — — Additional paid-in capital — — Retained earnings 24.9 24.4 Accumulated other comprehensive loss ( 3.2 ) ( 4.4 ) Total equity and redeemable non-controlling interests in consolidated Funds 92.5 87.1 Total liabilities and equity $ 677.3 $ 703.2 See Notes to Condensed Consolidated Financial Statements 3 Table of Contents Acadian Asset Management Inc. Condensed Consolidated Statements of Operations (in millions except for per share data, unaudited) Three Months Ended March 31, 2025 2024 Revenue: Management fees $ 112.9 $ 102.2 Performance fees 5.3 3.1 Consolidated Funds’ revenue 1.7 0.4 Total revenue 119.9 105.7 Operating expenses: Compensation and benefits 60.8 58.1 General and administrative expense 22.3 20.0 Depreciation and amortization 4.2 4.6 Consolidated Funds’ expense 0.7 0.1 Total operating expenses 88.0 82.8 Operating income 31.9 22.9 Non-operating income and (expense): Investment income 0.3 0.9 Interest income 1.1 1.3 Interest expense ( 4.8 ) ( 5.0 ) Net consolidated Funds’ investment gains 3.6 1.7 Total non-operating income (loss) 0.2 ( 1.1 ) Income before income taxes 32.1 21.8 Income tax expense 8.3 6.1 Net income 23.8 15.7 Net income attributable to redeemable non-controlling interests in consolidated Funds 3.7 1.1 Net income attributable to controlling interests $ 20.1 $ 14.6 Earnings per share (basic) attributable to controlling interests $ 0.54 $ 0.37 Earnings per share (diluted) attributable to controlling interests 0.54 0.37 Weighted average common stock outstanding 37.4 39.1 Weighted average diluted common stock outstanding 37.4 39.7 See Notes to Condensed Consolidated Financial Statements 4 Table of Contents Acadian Asset Management Inc. Condensed Consolidated Statements of Comprehensive Income (in millions, unaudited) Three Months Ended March 31, 2025 2024 Net income $ 23.8 $ 15.7 Other comprehensive income: Amortization related to derivative securities, net of tax 0.7 0.7 Foreign currency translation adjustment, net of tax 0.5 ( 0.2 ) Total other comprehensive income 1.2 0.5 Comprehensive income attributable to redeemable non-controlling interests in consolidated Funds 3.7 1.1 Total comprehensive income attributable to controlling interests $ 21.3 $ 15.1 See Notes to Condensed Consolidated Financial Statements 5 Table of Contents Acadian Asset Management Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity For the three months ended March 31, 2025 and 2024 ($ in millions except share data, unaudited) Common stock (millions) Common stock, par value Additional paid-in capital Retained earnings (deficit) Accumulated other comprehensive income (loss) Total stockholders’ equity (deficit) Redeemable non-controlling interests in consolidated Funds Total equity (deficit) and redeemable non-controlling interests in consolidated Funds December 31, 2023 41.4 $ — $ — $ 46.9 $ ( 6.7 ) $ 40.2 $ 9.3 $ 49.5 Issuance of common stock 0.1 — — — — — — — Repurchase of common stock including excise taxes ( 3.5 ) — ( 0.2 ) ( 74.8 ) — ( 75.0 ) — ( 75.0 ) Capital contributions — — — — — — 1.1 1.1 Equity-based compensation — — 0.2 — — 0.2 — 0.2 Foreign currency translation adjustment, net of tax — — — — ( 0.2 ) ( 0.2 ) — ( 0.2 ) Amortization related to derivatives securities, net of tax — — — — 0.7 0.7 — 0.7 Withholding tax related to stock option exercise and restricted stock vesting — ( 1.8 ) — ( 1.8 ) ( 1.8 ) Dividends ($ 0.01 per share) — — — ( 0.4 ) — ( 0.4 ) — ( 0.4 ) Net income — — — 14.6 — 14.6 1.1 15.7 March 31, 2024 38.0 $ — $ — $ ( 15.5 ) $ ( 6.2 ) $ ( 21.7 ) $ 11.5 $ ( 10.2 ) December 31, 2024 37.5 $ — $ — $ 24.4 $ ( 4.4 ) $ 20.0 $ 67.1 $ 87.1 Repurchase of common stock including excise taxes ( 0.8 ) — ( 0.4 ) ( 19.2 ) — ( 19.6 ) — ( 19.6 ) Equity-based compensation — — 0.6 — — 0.6 — 0.6 Foreign currency translation adjustment, net of tax — — — — 0.5 0.5 — 0.5 Amortization related to derivative securities, net of tax — — — — 0.7 0.7 — 0.7 Withholding tax related to restricted stock vesting — — ( 0.2 ) — — ( 0.2 ) — ( 0.2 ) Dividends ($ 0.01 per share) — — — ( 0.4 ) — ( 0.4 ) — ( 0.4 ) Net income — — — 20.1 — 20.1 3.7 23.8 March 31, 2025 36.7 $ — $ — $ 24.9 $ ( 3.2 ) $ 21.7 $ 70.8 $ 92.5 See Notes to Condensed Consolidated Financial Statements 6 Table of Contents Acadian Asset Management Inc. Condensed Consolidated Statements of Cash Flows (in millions, unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 23.8 $ 15.7 Less: Net income attributable to redeemable non-controlling interests in consolidated Funds ( 3.7 ) ( 1.1 ) Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 4.2 4.6 Amortization of debt-related costs 1.1 1.1 Amortization and revaluation of non-cash compensation awards 0.8 6.2 Deferred income taxes 1.1 ( 2.7 ) (Gains) on other investments ( 0.1 ) ( 4.4 ) Changes in operating assets and liabilities: Decrease in investment advisory fees receivable 32.7 24.4 Decrease in other receivables, prepayments, deposits and other assets 3.6 2.6 (Decrease) in accrued incentive compensation, operating lease liabilities and other liabilities ( 101.6 ) ( 72.1 ) (Decrease) in accounts payable, accrued expenses and accrued income taxes ( 10.6 ) ( 13.6 ) Net cash flows from operating activities, excluding consolidated Funds ( 48.7 ) ( 39.3 ) Net income attributable to redeemable non-controlling interests in consolidated Funds 3.7 1.1 Adjustments to reconcile net income (loss) attributable to redeemable non-controlling interests of consolidated Funds to net cash flows from operating activities of consolidated Funds: (Gains) on other investments ( 2.7 ) ( 0.8 ) Purchase of investments ( 71.7 ) ( 18.8 ) Sale of investments 73.4 17.0 (Increase) in receivables and other assets ( 3.3 ) ( 0.4 ) Increase in accounts payable and other liabilities 0.5 0.8 Net cash flows from operating activities of consolidated Funds ( 0.1 ) ( 1.1 ) Net cash flows from operating activities ( 48.8 ) ( 40.4 ) Cash flows from investing activities: Additions of fixed assets ( 2.5 ) ( 2.4 ) Purchase of investment securities ( 2.5 ) ( 2.3 ) Sale of investment securities 16.8 3.3 Net cash flows from investing activities 11.8 ( 1.4 ) See Notes to Condensed Consolidated Financial Statements 7 Table of Contents Acadian Asset Management Inc. Condensed Consolidated Statements of Cash Flows (in millions, unaudited) Three Months Ended March 31, 2025 2024 Cash flows from financing activities: Proceeds from revolving credit facility 100.0 101.0 Repayment of revolving credit facility ( 20.0 ) ( 28.0 ) Payment to OM plc for co-investment redemptions — ( 0.2 ) Dividends paid to stockholders ( 0.2 ) ( 0.3 ) Dividends paid to related parties ( 0.2 ) ( 0.1 ) Repurchase of common stock ( 17.8 ) ( 74.3 ) Withholding tax payments related to stock option exercise and restricted stock vesting ( 0.2 ) ( 1.8 ) Cash flows from financing activities of consolidated Funds: Redeemable non-controlling interest capital raised — 1.1 Net cash flows from financing activities 61.6 ( 2.6 ) Effect of foreign exchange rate changes on cash and cash equivalents 0.1 ( 0.2 ) Net increase (decrease) in cash and cash equivalents 24.7 ( 44.6 ) Cash and cash equivalents at beginning of period 98.5 147.6 Cash and cash equivalents at end of period (including cash at consolidated Funds classified as restricted) $ 123.2 $ 103.0 Supplemental disclosure of cash flow information: Interest paid (excluding consolidated Funds) $ 6.7 $ 7.2 Income taxes paid 1.4 1.4 Supplemental disclosure of non-cash financing transactions: Payable for repurchases of common stock $ 1.6 $ — Excise tax on repurchases of common stock $ 0.2 $ 0.7 See Notes to Condensed Consolidated Financial Statements 8 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 1) Organization and Description of the Business Acadian Asset Management Inc. (“Acadian”, “AAMI” or the “Company”), is a holding company that operates a systematic investment management business through its majority owned subsidiary, Acadian Asset Management LLC (“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. The Company’s Quant & Solutions reportable segment consists of Acadian LLC: • 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. Acadian LLC is organized as a limited liability company. Fees for services are largely asset-based and, as a result, revenues fluctuate based on the performance of financial markets and investors’ asset flows in and out of Acadian LLC’s products. The Company utilizes a profit-sharing model in structuring its compensation and ownership arrangements with Acadian LLC. Variable compensation is based on the firm’s profitability. The Company and Acadian LLC key employees share in profits after variable compensation according to their respective ownership interests. The profit-sharing model results in the alignment of the Company and Acadian LLC key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business. The corporate holding company (“Hold Co”) is included within the Unallocated Corporate expenses category. Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection, and investment group, listed on the London Stock Exchange. On October 15, 2014, the Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended. As of March 31, 2025, Paulson & Co. Inc. (“Paulson”) and related parties thereof held approximately 24.4 % of the common stock of the Company. For the three months ended March 31, 2025, the Company repurchased 770,812 shares of common stock at an average price of $ 25.09 per share, or approximately $ 19.4 million in total, including commissions. For the three months ended March 31, 2024, the Company repurchased 3,530,908 shares of common stock at an average price of $ 21.04 per share, or approximately $ 74.4 million in total, including commissions. All shares of common stock repurchased by the Company were retired. 9 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 2) Basis of Presentation and Significant Accounting Policies The Company’s significant accounting policies are as follows: Basis of presentation These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, statements of comprehensive income, statements of changes in stockholders’ equity and statements of cash flows of the Company. Within these Condensed Consolidated Financial Statements, Paulson and its related entities, as defined above, are considered “related parties.” The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements have been included. All dollar amounts, except per-share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements; however, material intercompany balances and transactions among the Company, Acadian LLC and consolidated Funds are eliminated in consolidation. Certain disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (annual report on Form 10-K) are not required to be included on an interim basis in the Company’s quarterly reports on Form 10-Q. The Company has condensed or omitted these disclosures. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2025. The Company’s significant accounting policies, which have been consistently applied, are summarized in those financial statements. Use of estimates The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements. Recently adopted accounting standards In March 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), Scope Application of Profits Interest and Similar Awards. This standard provides clarity regarding whether profits interest and similar awards are within the scope of Topic 718 of the Accounting Standards Codification. This amendment is effective for annual periods beginning after December 15, 2024 and interim periods within those annual periods. Early adoption is permitted. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements and related disclosures. 10 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 2) Basis of Presentation and Significant Accounting Policies (cont.) New accounting standards not yet adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. This amendment is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025. The Company does not expect the additional disclosure requirements under ASU 2023-09 to have a material impact on the Condensed Consolidated Financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-4): Disaggregation of Income Statement Expenses, which requires disclosures of additional information and disaggregation of certain expenses included in the income statement. This amendment is for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is evaluating the impact that the adoption will have on the Condensed Consolidated Financial Statements and has not yet determined the transition approach. The Company has considered all other newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the unaudited Condensed Consolidated Financial Statements, including those that have not yet been adopted. The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures. 3) Investments Investments are comprised of the following as of the dates indicated (in millions): March 31, 2025 December 31, 2024 Investments of consolidated Funds $ 155.8 $ 154.0 Other investments 19.9 19.4 Investments related to long-term incentive compensation plans 33.0 48.5 Total investments per Condensed Consolidated Balance Sheets $ 208.7 $ 221.9 11 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 4) Fair Value Measurements The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2025 (in millions): Quoted prices in active markets (Level I) Significant other observable inputs (Level II) Significant unobservable inputs (Level III) Uncategorized Total value, March 31, 2025 Assets of AAMI and consolidated Funds Common and preferred stock $ 94.6 $ — $ — $ — $ 94.6 Corporate bonds — 60.7 — — 60.7 Derivatives — 0.5 — — 0.5 Consolidated Funds total (1) 94.6 61.2 — — 155.8 Investments related to long-term incentive compensation plans (2) 33.0 — — — 33.0 Investments in unconsolidated Funds (3) — — — 19.9 19.9 AAMI total 33.0 — — 19.9 52.9 Total fair value assets $ 127.6 $ 61.2 $ — $ 19.9 $ 208.7 Liabilities of consolidated Funds Securities sold short $ ( 20.3 ) $ — $ — $ — $ ( 20.3 ) Derivatives — ( 0.5 ) — — ( 0.5 ) Consolidated Funds total (1) ( 20.3 ) ( 0.5 ) — — ( 20.8 ) Total fair value liabilities $ ( 20.3 ) $ ( 0.5 ) $ — $ — $ ( 20.8 ) 12 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 4) Fair Value Measurements (cont.) The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2024 (in millions): Quoted prices in active markets (Level I) Significant other observable inputs (Level II) Significant unobservable inputs (Level III) Uncategorized Total value December 31, 2024 Assets of AAMI and consolidated Funds Common and preferred stock $ 94.2 $ — $ — $ — $ 94.2 Corporate bonds — 59.1 — — 59.1 Derivatives — 0.7 — — 0.7 Consolidated Funds total (1) 94.2 59.8 — — 154.0 Investments related to long-term incentive compensation plans (2) 48.5 — — — 48.5 Investments in unconsolidated Funds (3) — — — 19.4 19.4 AAMI total 48.5 — — 19.4 67.9 Total fair value assets $ 142.7 $ 59.8 $ — $ 19.4 $ 221.9 Liabilities of consolidated Funds Securities sold short $ ( 20.4 ) $ — $ — $ — $ ( 20.4 ) Derivatives — ( 0.3 ) — — ( 0.3 ) Consolidated Funds total (1) ( 20.4 ) ( 0.3 ) — — ( 20.7 ) Total fair value liabilities $ ( 20.4 ) $ ( 0.3 ) $ — $ — $ ( 20.7 ) (1) Assets and liabilities measured at fair value are comprised of financial investments managed by Acadian LLC. Equity securities and derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. The securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided. Assets of consolidated Funds also include investments in Corporate bonds. 13 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 4) Fair Value Measurements (cont.) If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model with unobservable inputs, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures. (2) Investments related to long-term incentive compensation plans of $ 33.0 million and $ 48.5 million at March 31, 2025 and December 31, 2024, respectively, were investments in publicly registered daily redeemable funds (some managed by Acadian LLC), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I. (3) The uncategorized amounts of $ 19.9 million and $ 19.4 million at March 31, 2025 and December 31, 2024, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investment Funds and other investment vehicles. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. Other investment vehicles are not subject to redemption restrictions. The real estate investment Funds of $ 3.0 million and $ 2.9 million at March 31, 2025 and December 31, 2024, respectively, were subject to longer than monthly or quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from March 31, 2025. The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, finance, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions. There were no significant transfers of financial assets or liabilities between Levels II or III during the three months ended March 31, 2025 and 2024. 14 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 5) Variable Interest Entities The Company, through Acadian LLC, sponsors the formation of various entities considered to be variable interest entities (“VIEs”). These VIEs are primarily Funds managed by Acadian LLC and other partnership interests typically owned entirely by third-party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Acadian LLC key employees and/or individuals that have ownership interests in Acadian LLC. The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to absorb more than an insignificant amount of the risks and rewards of the entity. Typically, the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial. The following table presents the assets and liabilities of Funds that are VIEs and consolidated by the Company (in millions): March 31, 2025 December 31, 2024 Assets Investments $ 155.8 $ 154.0 Other assets of consolidated Funds 8.4 5.3 Total Assets $ 164.2 $ 159.3 Liabilities Liabilities of consolidated Funds $ 21.6 $ 21.2 Total Liabilities $ 21.6 $ 21.2 “Investments” consist of investments in equity securities, corporate bonds and derivative securities. To the extent the Company also has consolidated Funds that are not VIEs, the assets and liabilities of those Funds are not included in the table above. The assets of consolidated VIEs presented in the table above belong to the investors in those Funds, are available for use only by the Fund to which they belong, and are not available for use by the Company to the extent they are held by non-controlling interests. Any debt or liabilities held by consolidated Funds have no recourse to the Company’s general credit. The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors. 15 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 5) Variable Interest Entities (cont.) The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions): March 31, 2025 December 31, 2024 Maximum exposure to loss (1) $ 19.9 $ 2.9 (1) Includes the carrying value of investments the Company has made in the unconsolidated VIEs in which the Company is not the primary beneficiary. 6) Leases The Company has operating leases for corporate offices, data centers and certain equipment. The operating leases have remaining lease terms of less than 1 year to 9 years, some of which include options to extend the leases for up to 5 years. The following table summarizes information about the Company’s operating leases for the three months ended March 31, 2025 and 2024 (in millions): Three Months Ended March 31, 2025 2024 Operating lease cost $ 2.2 $ 2.2 Variable lease cost — — Total operating lease expense $ 2.2 $ 2.2 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2.4 $ 2.4 Right of use assets obtained in exchange for new operating lease liabilities — — In determining the incremental borrowing rate, the Company considered the interest rate yield for the specific interest rate environment and the Company’s credit spread at the inception of the lease. For the three months ended March 31, 2025 and 2024, the weighted average remaining lease term was 8.3 years and 9.3 years, respectively, and the weighted average discount rate was 3.55 % and 3.52 %, respectively. 16 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 6) Leases (cont.) Maturities of operating lease liabilities were as follows (in millions): Operating Leases Year Ending December 31, 2025 (excluding the three months ended March 31, 2025) $ 7.1 2026 9.4 2027 9.0 2028 8.7 2029 8.0 Thereafter 33.2 Total lease payments $ 75.4 Less imputed interest ( 9.9 ) Total $ 65.5 7) Borrowings and Debt The Company’s borrowings and long-term debt were comprised of the following as of the dates indicated (in millions): March 31, 2025 December 31, 2024 (in millions) Carrying Value Fair Value Fair Value Level Carrying Value Fair Value Fair Value Level Revolving credit facility: $ 140 million revolving credit facility expiring August 29, 2027 (1)(2) $ 80.0 $ 80.0 2 $ — $ — Total revolving credit facility $ 80.0 $ 80.0 $ — $ — Third party borrowings: $ 275 million 4.80 % Senior Notes Due July 27, 2026 (3) $ 274.4 $ 271.4 2 $ 274.3 $ 271.7 2 Total third party borrowings $ 274.4 $ 271.4 $ 274.3 $ 271.7 (1) Fair value approximates carrying value because the credit facility has variable interest rates based on selected short term market rates. (2) On August 29, 2024, Acadian LLC’s $ 125 million revolving credit facility was terminated and replaced with a new $ 140 million revolving credit facility. (3) The difference between the principal amounts and the carrying values of the senior notes in the table above reflects the unamortized debt issuance costs and discounts. 17 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 7) Borrowings and Debt (cont.) Revolving credit facility 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, a commitment fee is charged 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 2.5 x and the Acadian LLC interest coverage ratio must not be less than 4.0 x. 8) Commitments and Contingencies Operational commitments A number of our subsidiaries operate under regulatory authorities that require that they maintain minimum financial or capital requirements. Management is not aware of any violations of such financial requirements occurring during the periods presented. Guaranty The Company entered into a guaranty for an office space security deposit on behalf of Acadian LLC in the amount of $ 2.5 million in January 2020. This represents the maximum potential amount of future (undiscounted) payments that the Company could be required to make under the guaranty in the event of default by the guaranteed parties. This guaranty expires in 2033. There are no liabilities recorded on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 related to this guaranty. Litigation The Company is subject to claims, legal proceedings, and other contingencies in the ordinary course of its business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. As of March 31, 2025, there were no material accruals for claims and the Company does not believe any outstanding matters will have a material adverse effect on the Company. 18 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 8) Commitments and Contingencies (cont.) Indemnifications In the normal course of business, the Company may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. Foreign tax contingency The Company has clients in non-U.S. jurisdictions which require entities that are conducting certain business activities in such jurisdictions to collect and remit tax assessed on certain fees paid for goods and services provided. The Company does not believe this requirement is applicable based on its limited business activities in these jurisdictions. However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes. At March 31, 2025, management of the Company has estimated the potential maximum exposure and concluded that it is not material. No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at March 31, 2025. Considerations of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash and investments. The Company maintains cash and cash equivalents and short term investments with various financial institutions. These financial institutions are typically located in cities in which the Company operates. Cash deposits at the various financial institutions may exceed Federal Deposit Insurance Corporation insurance limits. 19 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 9) Earnings Per Share Basic earnings per share is calculated by dividing net income attributable to controlling interests by the weighted-average number of shares of common stock outstanding. Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable common stock, except when inclusion is antidilutive. The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data): Three Months Ended March 31, 2025 2024 Numerator: Net income attributable to controlling interests $ 20.1 $ 14.6 Denominator: Weighted-average shares of common stock outstanding—basic 37,362,476 39,063,522 Potential shares of common stock: Restricted stock units 18,059 17,348 Employee stock options — 650,570 Weighted-average shares of common stock outstanding—diluted 37,380,535 39,731,440 Earnings per share of common stock attributable to controlling interests: Basic $ 0.54 $ 0.37 Diluted $ 0.54 $ 0.37 10) Revenue Management fees The Company’s management fees are a function of the fee rates charged to clients, which are typically expressed in basis points, and the levels of the Company’s assets under management. The most significant driver of increases or decreases in this average fee rate is changes in the mix of the Company’s assets under management caused by net inflows or outflows in certain asset classes or disproportionate market movements. Performance fees The Company’s products subject to performance fees earn these fees upon exceeding high-water mark performance thresholds or outperforming a hurdle rate. Performance fees are recorded in revenues when the contractual performance criteria have been met and when it is probable that a significant reversal of revenue recognized will not occur in future reporting periods. 20 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 10) Revenue (cont.) Disaggregation of management fee revenue The geographic disaggregation of management fee revenue for the three months ended March 31, 2025 and 2024 are as follows (in millions): Three Months Ended March 31, 2025 2024 Quant & Solutions U.S. $ 85.9 $ 77.3 Non-U.S. 27.0 24.9 Management fee revenue $ 112.9 $ 102.2 11) Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2025 and 2024 are as follows (in millions): Foreign currency translation adjustment Valuation and amortization of derivative securities Total Balance, as of December 31, 2024 $ 2.7 $ ( 7.1 ) $ ( 4.4 ) Foreign currency translation adjustment before tax 0.5 — 0.5 Amortization related to derivatives securities before tax — 1.0 1.0 Tax impact — ( 0.3 ) ( 0.3 ) Other comprehensive income 0.5 0.7 1.2 Balance, as of March 31, 2025 $ 3.2 $ ( 6.4 ) $ ( 3.2 ) Foreign currency translation adjustment Valuation and amortization of derivative securities Total Balance, as of December 31, 2023 $ 3.1 $ ( 9.8 ) $ ( 6.7 ) Foreign currency translation adjustment before tax ( 0.3 ) — ( 0.3 ) Amortization related to derivatives securities before tax — 0.9 0.9 Tax impact 0.1 ( 0.2 ) ( 0.1 ) Other comprehensive income (loss) ( 0.2 ) 0.7 0.5 Balance, as of March 31, 2024 $ 2.9 $ ( 9.1 ) $ ( 6.2 ) 21 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 12) Derivatives and Hedging Cash flow hedge In July 2015, the Company entered into a series of $ 300.0 million notional Treasury rate lock contracts which were designated and qualified as cash flow hedges. The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances. The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $( 34.4 ) million, was settled. As of March 31, 2025, the balance recorded in accumulated other comprehensive income (loss) was $( 6.4 ) million, net of tax. This balance will be reclassified to earnings through interest expense over the life of the issued debt. Amounts of $ 1.0 million and $ 0.9 million have been reclassified for the three months ended March 31, 2025 and 2024, respectively. During the next twelve months the Company expects to reclassify approximately $ 4.0 million to interest expense. 13) Segment Information The Company has the following 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. The Hold Co 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 the segment. The CODM is the Company’s Chief Executive Officer. Performance Measure The primary measure used by the CODM in measuring performance and allocating resources to the segment is economic net income (“ENI”). ENI is used to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and equity distributions, and incentivize management. The Company defines ENI for the segment as ENI revenue less ENI operating expenses. The ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses recognized under U.S. GAAP. This measure supplements and should be considered in addition to, and not in lieu of, the Consolidated Statements of Operations prepared in accordance with U.S. GAAP. The Company does not disclose total asset information for its reportable segment as the information is not reviewed by the CODM. ENI revenue includes management fees, performance fees and other revenue under U.S. GAAP, adjusted to include management fees paid to the Company by consolidated Funds. 22 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 13) Segment Information (cont.) Significant segment ENI expenses include fixed compensation and benefits, variable compensation, and Acadian LLC key employee distributions included in compensation and benefits expense under U.S. GAAP, depreciation and amortization 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. Other segment items include ENI general and administrative expense under U.S. GAAP, adjusted to exclude restructuring costs and include sales based compensation. ENI segment results are also adjusted to exclude consolidated Fund revenues, consolidated Fund expenses and investment return recorded under U.S. GAAP. 23 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 13) Segment Information (cont.) Segment Presentation The following table sets forth summarized operating results for the Company’s segment and related adjustments necessary to reconcile the segment economic net income to arrive at the Company’s consolidated U.S. GAAP net income attributable to controlling interests for the three months ended March 31, 2025 and 2024 are as follows (in millions): Three Months Ended March 31, ($ in millions) 2025 2024 U.S. GAAP consolidated revenue $ 119.9 $ 105.7 Exclude revenue from consolidated Funds (a) 1.7 0.4 Quant & Solutions segment ENI revenue $ 118.2 $ 105.3 Less: Quant & Solutions segment ENI expenses Fixed compensation and benefits (b) 22.9 21.6 Variable compensation (c) 29.4 26.0 Acadian LLC key employee distributions (d) 3.1 2.2 Depreciation and amortization (e) 4.2 4.6 Other segment items (f) 23.7 19.5 Segment economic net income $ 34.9 $ 31.4 Reconciliation of segment ENI to net income attributable to controlling interests: Unallocated corporate expenses (g) ( 4.5 ) ( 4.6 ) Adjustments and reconciling items (h) 1.2 0.5 Non-cash compensation expenses for Acadian LLC key employee equity and profit interest revaluations (i) 0.3 ( 4.4 ) Investment income 0.3 0.9 Interest income 1.1 1.3 Interest expense ( 4.8 ) ( 5.0 ) Net consolidated Funds' investment gains 3.6 1.7 Income before income taxes $ 32.1 $ 21.8 Income tax expense ( 8.3 ) ( 6.1 ) Consolidated net income $ 23.8 $ 15.7 Net income attributable to redeemable non-controlling interests in consolidated Funds ( 3.7 ) ( 1.1 ) Net income attributable to controlling interests $ 20.1 $ 14.6 24 Table of Contents Acadian Asset Management Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 13) Segment Information (cont.) Reconciling Adjustments: a. Adjustment to exclude consolidated Funds revenues, which are included in U.S. GAAP revenue. b. Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided. c. Variable compensation is contractually set and calculated individually for Acadian LLC bonuses. Amounts are adjusted for non-cash Acadian LLC key employee equity revaluations and severance relating to restructuring costs. d. Acadian LLC key employee distributions includes the share of Acadian LLC profits after variable compensation that is attributable to the Acadian LLC key employee equity and profits interests holders, according to their ownership interests. e. Depreciation and amortization includes U.S. GAAP depreciation and amortization. f. Other segment items includes segment systems, portfolio administration costs and other general & administrative expenses. g. Included in unallocated corporate expenses for the three months ended March 31, 2025 and 2024 was compensation and benefits of $ 2.4 million and $ 2.5 million, respectively, related to Hold Co which are included in U.S. GAAP net income attributable to controlling interests. Included in unallocated corporate expenses for the three months ended March 31, 2025 and 2024 was general and administrative expenses of $ 2.1 million and $ 2.1 million, respectively, related to Hold Co which are included in U.S. GAAP net income attributable to controlling interests. h. Adjustments and reconciling items includes consolidated Funds revenue, consolidated Fund expense, and restructuring costs. i. Non-cash Acadian LLC key employee equity revaluations represent changes in the value of Acadian LLC equity and profit interests held by Acadian LLC key employees, which are included within the U.S. GAAP compensation and benefits expense. 14) Subsequent Events During the period from April 1, 2025 through May 6, 2025, the Company repurchased 0.9 million shares of common stock at a weighted average price of $ 25.48 per share, or approximately $ 23.6 million in total, including commissions. 25 Table of Contents