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Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-14 · 417 added, 320 removed, 435 unchanged (63% of the section changed)

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Our innovative model enables each Affiliate’s management team to retain autonomy

and significant equity ownership in their firm, while they leverage our strategic capabilities and insight, including growth

capital, product strategy and development, capital formation, and incentive alignment and succession planning.

and significant equity ownership in their firm, while they leverage our strategic capabilities and insight, including access to

growth capital, product strategy and development, capital formation capabilities, incentive alignment and succession

planning, and strategic advisory to expand their reach, diversify their businesses, and enhance their long-term success.

December 31, 2025 , our aggregate assets under management were approximately $813 billion across a diverse range of

private markets, liquid alternatives, and differentiated long-only investment strategies.

On February 6, 2025, we announced the completion of our minority investment in NorthBridge Partners, LLC

(“NorthBridge”), a private markets manager specializing in industrial logistics real estate assets .

Following the close of the

transaction, NorthBridge partners continue to hold a significant majority of the equity of the firm and direct its day-to-day

The financial results will be recognized in the Consolidated Financial Statements one quarter in arrears.

private markets, liquid alternative , and differentiated long-only investment strategies.

In 2025, we advanced our strategy of allocating capital to areas of durable client demand by entering into four new

partnerships with independent firms collectively managing approximately $23 billion in alternative strategies, announcing a

strategic partnership with Brown Brothers Harriman (“BBH”), and further expanding our U.S.

wealth platform.

I n the first quarter of 2025, we completed our minority investment in NorthBridge Partners, LLC (“NorthBridge”), a

private markets manager specializing in industrial logistics real estate assets, and in the second quarter of 2025, we completed

our minority investment in Verition Fund Management LLC (“Verition”), a global multi-strategy investment firm.

In the fourth quarter of 2025, we completed our minority investments in Montefiore Investment (“Montefiore”), a

European private equity firm focused on the services sector, and Qualitas Energy , a renewables-focused global infrastructure

manager specializing in energy transition.

We also announced a strategic partnership with BBH, a privately held global

financial services firm, to acquire a minority equity interest in BBH Credit Partners, a newly formed subsidiary of BBH

focused on structured and alternative credit investment strategies.

The transaction was completed in January 2026.

Following the close of these transactions, Affiliate management continues to hold a significant majority of the equity of the

respective businesses and directs the day-to-day operations.

On February 12, 2026, we announced the completion of our additional minority investment in Garda Capital Partners LP

(“Garda”), a liquid alternatives manager specializing in fixed income relative value strategies and an Affiliate since 2019, and

our minority investment in HighBrook Investors (“HighBrook”), a private markets manager specializing in real estate assets.

Following the close of the transactions, our investment in Garda continues to be accounted for under the equity method and

Affiliate management continues to hold a majority of the equity of the respective businesses and directs the day-to-day

While Affiliates typically partner with AMG to preserve their independence and partnership culture, evolving conditions

may lead an Affiliate to consider strategic alternatives;

consistent with our partnership approach, in such instances, we

collaborate with Affiliates to evaluate these options.

When strategic transactions occur, they typically enhance our flexibility

to execute our growth strategy and return capital to shareholders, as we deploy the resulting proceeds in accordance with our

disciplined capital allocation framework.

In the third quarter of 2025, we completed the sale of our minority equity interest in Peppertree Capital Management,

(“Peppertree”), as part of the announced acquisition of Peppertree by TPG Inc.

(“TPG”), a public company listed on the

Nasdaq Global Select Market (the “Peppertree Transaction”).

Pursuant to the terms of the agreement with TPG, under which

we and each of the other owners agreed to sell our respective equity interests in Peppertree, we received total consideration of

$253.2 million , net of transaction costs, which included $99.8 million in cash and 2.9 million TPG Class A common shares,

all of which we have since sold.

Our gain from the transaction was $127.6 million .

In November 2025, Comvest Partners (“Comvest”) completed the previously announced agreement to sell its private

credit business to Manulife Financial Corporation (the “Comvest Transaction”).

Pursuant to the terms of the agreement, we

received total cash consideration of $282.0 million for our portion of Comvest’s private credit business and our gain from the

transaction was $227.6 million .

In December 2025, we completed the sale of our minority equity interest in Montrusco Bolton Investments Inc.

(“Montrusco Bolton”) to Walter Global Asset Management Inc.

(the “Montrusco Bolton Transaction” ).

Pursuant to the terms

of the agreement, we received total cash consideration of $22.0 million and our gain from the transaction was $16.2 million .

Operating Performance Measures

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operating performance measures and Consolidated Financial Statements.

Average assets under management for mutual funds

and similar investment products generally represents an average of the daily net assets under management, while for

institutional and high net worth clients, average assets under management generally represents an average of the assets at the

beginning or end of each month during the applicable period.

Average assets under management for equities and

similar investment products generally represents an average of the daily net assets under management, while for liquid

alternatives and multi-asset and fixed income products, average assets under management generally represents an average of the

assets at the beginning or end of each month during the applicable period.

Average assets under management for private

markets products generally represents total commitments or invested assets under management.

Aggregate fees consist of the total asset- and performance-based fees earned by all of our consolidated and equity method

For certain of our Affiliates accounted for under the equity method, we report the Affiliate’s aggregate fees one

quarter in arrears.

Aggregate fees are provided in addition to, but not as a substitute for, Consolidated revenue or other GAAP

performance measures.

In the case of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense

reimbursements paid by the underlying products.

For certain of our Affiliates accounted for under the equity method, we report

the Affiliate’s aggregate fees one quarter in arrears.

Aggregate fees are provided in addition to, but not as a substitute for,

Consolidated revenue or other GAAP performance measures.

Assets Under Management

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performance generated by their investment products.

Assets under management increased du ring the year ended December 31,

2024 , primarily driven by investment performance generated across our Affiliates, partially offset by net outflows.

continue to see client demand for alternative strategies (both in private markets and liquid alternatives), as evidenced by our net

inflows in this category, but our equity strategies experienced net outflows in line with trends across the industry.

continue to invest in new and existing Affiliates, we expect to further evolve our business mix and better position AMG to

benefit from industry growth trends.

For the year ended December 31, 2025 , assets under management

increased $105.4 billion or 15% driven by a combination of investment performance generated across our Affiliates, net client

cash inflows, and the addition of assets associated with new partnerships with Affiliates operating in growing areas within

alternative strategies.

C lient demand for alternative strategies continued in 2025, with strong net inflows into liquid alternative

strategies and momentum in private markets fundraising, which more than offset net outflows in equity strategies — an area

that continues to face headwinds in line with industry trends — and the removal of assets under management associated with

the sale of certain minority equity interests in Affiliates completed during the year.

As we continue to execute our growth

strategy by investing in new and existing Affiliates, as well as in AMG’s strategic capabilities, we expect our business mix to

further evolve, expanding our exposure to in-demand strategies in both private markets and liquid alternatives, better

positioning AMG to continue to benefit from industry growth trends with a n increasingly diversified business profile.

The following table presents changes in our assets under management by strategy:

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New investments (1) .

Affiliate transactions (2) .

Market changes .

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(1) Equities i ncludes assets under management attributable to both global equities and U.S.

(1) Attributable to NorthBridge, Verition, Montefiore, and Qualitas Energy as of their respective closing dates.

(2) Attributable to Peppertree, Comvest’s private credit business , and Montrusco Bolton as of their respective closing dates.

(3) Foreign exchange reflects the impact of translating the assets under management of our Affiliates whose functional

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dollar into our functional currency.

(3) Other includes assets under management attributable to product transitions and reclassifications.

(4) Other includes product transitions and reclassifications.

The following tables present performance of our investment strategies, where available, measured by the percentage of

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Aggregate fees consist of asset- and performance-based fees of our consolidated and equity method Affiliates.

fees include advisory and other fees earned by our Affiliates for services provided to their clients and are typically determined

as a percentage of the value of a client’s assets under management, generally inclusive of uncalled commitments.

fees are generally impacted by the level of average assets under management and the composition of these assets across our

strategies with different asset-based fee ratios.

Our asset-based fee ratio is calculated as asset-based fees divided by average

assets under management.

of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense reimbursements paid by

the underlying products.

Asset-based fees include advisory and other fees earned by our Affiliates for services provided to their

clients and are typically determined as a percentage of the value of a client’s assets under management, generally i nclusive of

uncalled commitments .

Asset-based fees are generally impacted by the level of average assets under management and the

composition of these assets across our strategies with different asset-based fee ratios.

Our asset-based fee ratio is calculated as

asset-based fees divided by average assets under management.

In some cases, if product returns exceed certain performance thresholds, we will participate in performance-based fees.

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respectively.

We anticipate performance-based fees will be a recurring component of our aggregate fees;

We anticipate performance-based fees will be a recurring component of aggregate fees ;

however we do not

anticipate these fees to be a significant component of our Consolidated revenue as these fees are predominately earned by our

anticipate these fees to be a significant component of Consolidated revenue as these fees are predominately earned by our

Affiliates accounted for under the equity method.

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The increase in

our aggregate fees was due to a $323.1 million or 6% increase from asset-based fees, offset by a $153.7 million or 3% decrease

from performance-based fees, primarily in our liquid alternative strategies.

The increase in asset-based fees was principally due

to an increase in our average assets under management, primarily in our liquid alternative and private markets strategies, and

changes in the composition of our assets under management primarily driven by investments in new Affiliates.

aggregate fees was due to a $660.2 million or 13% increase from asset-based fees and a $271.3 million or 5% increase from

performance-based fees, primarily in liquid alternative strategies.

The increase in asset-based fees was principally due to an

increase in our Affiliates’ average assets under management, primarily in liquid alternative and private markets strategies, and

changes in the composition of our assets under management, including net client cash flows from our Affiliates managing

alternative strategies, which typically have higher fee rates and the impact of our investments in new Affiliates primarily

managing alternative strategies.

Financial and Supplemental Financial Performance Measures

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measures and are discussed in “Supplemental Financial Performance Measures.”

Net income (controlling interest) decreased $161.3 million or 24% in 2024 .

This decrease was primarily due to the

recognition of a $133.1 million pre-tax gain associated with the sale of our equity interest in Veritable, LP, one of our

consolidated Affiliates, in the third quarter of 2023 (the “Veritable Transaction”) and a $38.3 million decrease in Investment

and other income attributable to the controlling interest.

Net income (controlling interest) increased $205.0 million or 40% in 2025 .

This increase was primarily due to $371.3

million of Affiliate transaction gains and a $150.2 million increase in Equity method income (net).

These increases were

partially offset by a $97.4 million increase in Income tax expense attributable to the controlling interest, primarily due to

Affiliate transaction gains, a $97.1 million increase in Intangible amortization and impairments attributable to the controlling

interest, and a $91.2 million increase in Affiliate equity expense attributable to the controlling interest.

Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management as it

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Adjusted EBITDA (controlling

interest) increased $37.4 million or 4% in 2024 , primarily from investments in new Affiliates and the recognition of

performance-based fees earned by Affiliates in which we hold a greater economic interest.

interest) increased $103.7 million or 11% in 2025 , primarily due to a $931.5 million or 18% increase in aggregate fees.

Adjusted EBITDA (controlling interest) increased less than aggregate fees on a percentage basis primarily due to an increase in

earnings at certain Affiliates, many of which manage alternative strategies and are accounted for under the equity method, and

therefore we own less of an economic interest.

We believe Economic net income (controlling interest) is an important supplemental financial performance measure

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improves comparability of performance between periods.

Economic net income (controlling interest) decreased $16.2 million

or 2% in 2024 , primarily due to a $32.8 million increase in current and other deferred taxes attributable to the controlling

interest and a $9.5 million increase in Interest expense attributable to the controlling interest.

These decreases were partially

offset by a $37.4 million or 4% increase in Adjusted EBITDA (controlling interest).

Economic net income (controlling interest) increased $67.7 million

or 10% in 2025 , primarily due to a $103.7 million or 11% increase in Adjusted EBITDA (controlling interest).

Results of Operations

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equity method Affiliates.

Our consolidated Affiliates’ financial results are included in our Consolidated revenue, Consolidated

Our consolidated Affiliates’ financial results are included in Consolidated revenue, Consolidated

expenses, and Investment and other income, and our share of our equity method Affiliates’ financial results is reported, net of

intangible amortization and impairments, in Equity method income (net).

intangible amortization and impairments and tax, in Equity method income (net) in our Consolidated Statements of Income.

Consolidated Revenue

Our Consolidated revenue is derived from our consolidated Affiliates, primarily from asset-based fees from investment

management services.

For these Affiliates, we typically use operating structures where we contractually share in the Affiliate’s

revenue without regard to expenses.

Consolidated revenue is generally determined by the level of our consolidated Affiliates’

average assets under management and the composition of these assets across our consolidated Affiliates’ investment strategies

with different asset-based fee ratios and performance-based fees.

Consolidated revenue is derived primarily from asset-based fees from investment management services earned by our

consolidated Affiliates.

For these Affiliates, we typically use operating structures where we contractually share in the

Affiliate’s revenue without regard to expenses.

Consolidated revenue is generally determined by the level of our consolidated

Affiliates’ average assets under management and the composition of these assets across our consolidated Affiliates’ investment

strategies with different asset-based fee ratios and performance-based fees.

The following table presents our consolidated Affiliates’ average assets under management and Consolidated revenue:

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Consolidated revenue .

Our Consolidated revenue decreased $16.9 million or 1% in 2024 , primarily due to a $20.3 million or 1% decrease from

asset-based fees.

The decrease in asset-based fees was principally due to changes in the composition of our assets under

management, including the impact of the Veritable Transaction, partially offset by an increase in our consolidated Affiliate

average assets under management, primarily in our private markets strategies.

Consolidated revenue increased $33.5 million or 2% in 2025 , due to a $26.1 million or 1% increase from asset-based fees

and a $7.4 million or 1% increase from performance-based fees, primarily in private markets strategies.

The increase in asset-

based fees was principally due to an increase in our consolidated Affiliates’ average assets under management, primarily in

private markets strategies, partially offset by changes in the composition of our assets under management.

Consolidated Expenses

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Total consolidated expenses .

Compensation and related expenses increased $7.8 million or 1% in 2024 , primarily due to a $16.3 million increase in

compensation accruals and a $6.9 million increase in Affiliate equity compensation expense.

These increases were partially

offset by a $16.0 million decrease in compensation and related expenses due to the Veritable Transaction .

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(1) Percent change is not meaningful.

Compensation and related expenses increased $104.5 million or 11% in 2025 , primarily due to an $83.9 million increase in

Affiliate equity-related activities and a $7.2 million increase in share-based compensation.

Selling, general and administrative expenses increased $32.1 million or 9% in 2025 , primarily due to a $23.8 million

increase in distribution and investment-related expenses, principally as a result of the increase in average assets under

management on which these expenses are incurred.

This increase was partially offset by a $2.4 million decrease in professional

fees and a $1.6 million decrease in non-income based taxes .

Intangible amortization and impairments decreased $19.3 million or 40% in 2024 , primarily due to a $14.1 million

decrease in amortization expense related to certain definite-lived assets being fully amortized and a $5.0 million decrease due to

the Veritable Transaction.

Interest expense increased $9.5 million or 8% in 2024 , primarily due to a $23.8 million increase from our 6.75% junior

subordinated notes issued in March 2024 (the “2064 junior subordinated notes”) and an $8.1 million increase from our 5.50%

senior unsecured notes issued in August 2024 (the “2034 senior notes”).

increase in professional fees and an $8.5 million increase in investment-related expenses driven by an increase in average assets

under management on which these expenses are incurred.

Intangible amortization and impairments increased $131.3 million in 2025 , primarily due to expenses of $135.0 million to

reduce the carrying value of indefinite-lived acquired client relationships for certain mutual fund assets to fair value.

increase was partially offset by a $3.7 million decrease in amortization expense due to certain definite-lived assets being fully

Interest expense increased $3.2 million or 2% in 2025 , primarily due to a $14.4 million increase from our 5.50% senior

unsecured notes issued in August 2024 (the “2034 senior notes”), a $6.7 million increase from our 6.75% junior subordinated

notes issued in March 2024 (the “2064 junior subordinated notes”), and a $3.6 million increase from borrowings under our

senior unsecured multicurrency revolving credit facility (the “revolver”).

These increases were partially offset by a $13.0

million decrease due to the maturity of our 4.25% senior notes in February 2024 (the “2024 senior notes”) and an $8.2 million

decrease due to the repayment of our senior unsecured term loan facility (the “term loan”).

There were no significant changes to Depreciation and other amortization in 2024 .

Other expenses (net) decreased $5.5 million or 12% in 2024 , primarily due to a $2.7 million decrease in expenses related to

changes in the values of contingent payment obligations and a $1.5 million decrease in rent and related office costs.

million decrease due to the repayment of our senior unsecured term loan facility in the third quarter of 2024, a $5.3 million

decrease due to the maturity of our 3.50% senior notes in August 2025 , and a $2.2 million decrease due to the maturity of our

4.25% senior notes in February 2024.

There were no significant changes to Depreciation and other amortization i n 2025 .

Other expenses (net) increased $29.5 million or 73% in 2025 , primarily due to a $9.2 million increase in expenses related

to the settlement of conversions with respect to our junior convertible securities (see Note 5) and an $8.2 million increase in

expenses related to changes in the values of contingent payment obligations.

Equity Method Income (Net)

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in the Affiliate under the equity method.

Our share of earnings or losses from Affiliates accounted for under the equity method

(“equity method earnings”), net of amortization and impairments, is included in Equity method income (net).

For certain of our

Affiliates accounted for under the equity method, we report the Affiliate’s financial results in our Consolidated Financial

Statements one quarter in arrears.

Our share of pre-tax earnings or losses from Affiliates accounted for under the equity

method (“pre-tax equity method earnings”), net of intangible amortization and impairments and tax , is included in Equity

method income (net).

For certain of our Affiliates accounted for under the equity method, we report the Affiliate’s financial

results in our Consolidated Financial Statements one quarter in arrears.

For a majority of these Affiliates, we use operating structures where we contractually share in the Affiliate’s revenue less

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We also use operating structures where we contractually share in the Affiliate’s revenue without regard

Our equity method revenue is derived primarily from asset- and performance-based fees from investment management

services earned by our equity method Affiliates.

Equity method revenue incorporates the total asset- and performance-based

fees earned by all of our Affiliates accounted for under the equity method and is generally determined by the level of our equity

method Affiliate average assets under management and the composition of these assets across our strategies with different

asset-based fee ratios and performance-based fees.

Our Affiliates accounted for under the equity method manage a greater

proportion of assets subject to performance-based fees than our consolidated Affiliates and, as a result, equity method revenue

will generally have more performance-based fees than Consolidated revenue.

The following table presents equity method Affiliate average assets under management and equity method Affiliate

revenue (“equity method revenue”), as well as equity method earnings, equity method intangible amortization, and equity

method intangible impairments, if any, which in aggregate form Equity method income (net):

E quity method revenue, net is derived primarily from asset- and performance-based fees from investment management

services earned by our equity method Affiliates, net of certain expense reimbursements paid by the underlying products.

method revenue, net is generally determined by the level of our equity method Affiliates’ average assets under management and

the composition of these assets across our equity method Affiliates’ investment strategies with different asset-based fee ratios

and performance-based fees.

Our Affiliates accounted for under the equity method manage a greater proportion of assets

subject to performance-based fees than our consolidated Affiliates and, as a result, equity method revenue, net will generally

have more performance-based fees than Consolidated revenue.

The following table presents our equity method Affiliates’ average assets under management and equity method Affiliate

revenue, net, as well as pre-tax equity method earnings, equity method intangible amortization, equity method intangible

impairments, if any, and equity method income tax, which in aggregate form Equity method income (net):

For the Years Ended December 31,

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Equity method Affiliate average assets under management (in

Equity method revenue .

Equity method revenue, net .

Financial Performance Measures

Equity method earnings .

Pre-tax equity method earnings .

Equity method intangible amortization .

Equity method intangible impairments .

Equity method income tax .

Equity method income (net) .

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(1) Percent change is not meaningful.

Our equity method revenue increased $186.3 million or 6% in 2024 , due to a $343.4 million or 11% increase from asset-

based fees, offset by a $157.1 million or 5% decrease from performance-based fees, primarily in our liquid alternative

The increase in asset-based fees was principally due to an increase in our equity method Affiliate average assets

under management, primarily in our liquid alternative and private markets strategies, and changes in the composition of our

assets under management primarily driven by investments in new Affiliates.

Equity method earning s increased $67.1 million or 18% in 2024 , primarily due to a $186.3 million or 6% increase in equity

method revenue.

Equity method earnings increased more than equity method revenue on a percentage basis primarily due to an

increase in earnings at certain Affiliates in which we share in revenue less agreed-upon expenses and the recognition of

performance-based fees earned by Affiliates in which we hold a greater economic interest.

Equity method revenue, net increased $898.0 million or 28% in 2025 , due to a $634.1 million or 20% increase from asset-

based fees and a $263.9 million or 8% increase from performance-based fees, primarily in liquid alternative strategies.

increase in asset-based fees was principally due to an increase in our equity method Affiliates’ average assets under

management, primarily in liquid alternative strategies, and changes in the composition of our assets under management,

including net client cash flows from our equity method Affiliates managing alternative strategies, which typically have higher

fee rates and the impact of our investments in new Affiliates primarily managing alternative strategies.

Pre-tax equity method earnings increased $122.4 million or 27% in 2025 , primarily due to an $898.0 million or 28%

increase in equity method revenue, net.

Equity method intangible amortization increased $8.0 million or 9% in 2025 , primarily due to a $17.6 million increase in

amortization expense due to investments in new Affiliates and a $17.9 million increase in amortization expense due to a

decrease in actual and expected client attrition for certain definite-lived acquired client relationships.

These increases were

partially offset by a $33.3 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Equity method intangible impairments increased $30.3 million in 2024 .

See Note 8 of our Consolidated Financial

Affiliate Transaction Gains

For the years ended December 31, 2022 and 2023 , we recorded gains of $641.9 million on the sale of our equity interest in

Baring Private Equity Asia ("BPEA") to EQT AB ("EQT"), a public company listed on the Nasdaq Stockholm (EQT.ST) (the

"BPEA Transaction"), in connection with the strategic combination of BPEA and EQT, which was completed in the fourth

quarter of 2022, and $133.1 million on the Veritable Transaction, respectively.

See Notes 7 and 8 of our Consolidated

amortization expense due to investments in new Affiliates.

This increase was partially offset by a $4.6 million decrease in

amortization expense related to certain definite-lived assets being fully amortized and a $3.9 million decrease in amortization

expense due to a decrease in actual and expected client attrition for certain definite-lived acquired client relationships.

For the year ended December 31, 2024 , we recorded a $39.9 million impairment on equity method investments.

year ended December 31, 2025 , no equity method intangible impairments were recorded.

See Note 8 of our Consolidated

Financial Statements.

Affiliate Transaction Gains

The following table presents our Affiliate transaction gains:

For the Years Ended December 31,

(in millions)

Affiliate transaction gains .

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(1) P e rcent change is not meaningful.

For the years ended December 31, 2023 and 2025 , we recorded a gain of $133.1 million on the sale of our equity interest in

Veritable, LP (“Veritable”) (the “Veritable Transaction”), and total gains of $371.3 million related to the sale of our equity

interests in Peppertree, Comvest’s private credit business, and Montrusco Bolton, respectively.

See Notes 7 and 8 of our

Consolidated Financial Statements.

Investment and Other Income

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Investment and other income .

Investment and other income decreased $39.7 million or 34% in 2024 , primarily due to a $35.3 million decrease in net

realized and unrealized gains on investments in marketable securities.

Investment and other income increased $5.7 million or 7% in 2025 , primarily due to increases in net realized and

unrealized gains on other investments and marketable securities of $17.4 million and $5.8 million, respectively.

increases were partially offset by a $16.6 million decrease in interest income.

Income Tax Expense

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attributable to the non-controlling interests.

Income tax expense decreased $2.7 million or 1% in 2024 .

Our effective rate (controlling interest) for the year ended

Income tax expense increased $99.7 million or 55% in 2025 .

Our effective tax rate (controlling interest) for the year ended

December 31, 2025 was 27.5% as compared to 25.5% for the year ended December 31, 2024.

The increase in the tax rate

(controlling interest) was primarily due to discrete foreign tax benefits for the year ended December 31, 2023, and an expense

to reduce the carrying value of an Affiliate to fair value for which no tax benefit was recorded, partially offset by higher tax

windfalls attributable to share-based compensation, for the year ended December 31, 2024.

The increase in the effective tax

rate (controlling interest) was primarily due to unrecognized tax benefits and n on-deductible compensation expense , partially

offset by higher tax windfalls attributable to share-based compensation for the year ended December 31, 2025.

The following table presents Net income, Net income (non-controlling interests), and Net income (controlling interest):

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Net income (controlling interest) .

Net income (controlling interest) decreased $161.3 million or 24% in 2024 , primarily due to the recognition of a pre-tax

gain associated with the Veritable Transaction in the third quarter of 2023 and a decrease in Investment and other income

attributable to the controlling interest.

Net income (controlling interest) increased $205.0 million or 40% in 2025 , primarily due to Affiliate transaction gains and

an increase in Equity method income (net).

These increases to Net income (controlling interest) were partially offset by

increases in Income tax expense attributable to the controlling interest, primarily due to Affiliate transaction gains, Intangible

amortization and impairments attributable to the controlling interest, and Affiliate equity expense attributable to the controlling

Supplemental Financial Performance Measures

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certain non-income based taxes, depreciation, amortization, impairments, gains and losses related to Affiliate transactions, and

non-cash items such as certain Affiliate equity activity, gains and losses on our contingent payment obligations, and unrealized

gains and losses on seed capital, general partner commitments, and other strategic investments.

Adjusted EBITDA (controlling

interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner

non-cash items such as certain Affiliate equity-related activities, gains and losses on our contingent payment obligations, and

unrealized gains and losses on seed capital, general partner commitments, and other strategic investments.

Adjusted EBITDA

(controlling interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner

commitments, and other strategic investments.

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(1) Includes equity method income tax.

(2) Intangible amortization and impairments in our Consolidated Statements of Income include amortization attributable to the

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Equity method intangible amortization and impairments .

(2) The year ended December 31, 2022 includes BPEA Transaction gain of $641.9 million and realized and unrealized gains

on EQT ordinary shares of $43.8 million and $57.9 million , respectively.

The year ended December 31, 2023 includes

Veritable Transaction gain of $133.1 million and realized gains on ordinary shares of EQT of $29.6 million .

(3) The year ended December 31, 2023 includes a gain of $133.1 million related to the Veritable Transaction and realized

gains of $29.6 million on ordinary shares of EQT AB (“EQT”), a public company listed on the Nasdaq Stockholm

(EQT.ST), which we received in connection with the sale of our equity interest in Baring Private Equity Asia (“BPEA”) in

the fourth quarter of 2022 (the “BPEA Transaction”).

The year ended December 31, 2025 includes total gains of

$371.3 million related to the Peppertree, Comvest, and Montrusco Bolton Transactions and realized gains of $6.2 million

on TPG Class A common shares.

See Notes 7 and 8 of our Consolidated Financial Statements.

Veritable, Peppertree,

Comvest, and Montrusco Bolton Transaction gains are recorded in Affiliate transaction gains, and realized gains on EQT

ordinary shares and TPG Class A common shares are recorded in Investment an d other income in our Consolidated

Statements of Income.

(4) Other items include certain non-income based taxes, depreciation, and non-cash items such as certain Affiliate equity-

activity, gains and losses on our contingent payment obligations, unrealized gains and losses on seed capital, general

partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital,

general partner commitments, and other strategic investments.

related activities, gains and losses on our contingent payment obligations, unrealized gains and losses on seed capital,

general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed

capital, general partner commitments, and other strategic investments.

For the year ended December 31, 2025 , the increase

in other items was predominantly the result of Affiliate equity-related activities.

Economic Net Income (controlling interest) and Economic Earnings Per Share

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We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in

available capital resources (which could be used to repurchase shares of common stock) that occurs when these securities are

converted and we are relieved of our debt obligation.

available capital resources (which could be used to repurchase shares of our common stock) that occurs when these securities

are converted and we are relieved of our debt obligation.

The following table presents a reconciliation of Net income (controlling interest) to Economic net income (controlling

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Assumed issuance of junior convertible securities shares .

Dilutive impact of junior convertible securities shares .

Average shares outstanding (adjusted diluted) .

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(1) See note (2) to the table in “Adjusted EBITDA (controlling interest).”

(2) For the years ended December 31, 2022, and 2023, intangible-related deferred taxes have been adjusted to eliminate

benefits of $13.5 million related to the BPEA Transaction and $28.9 million related to the Veritable Transaction,

respectively.

(3) The year ended December 31, 2022 includes BPEA Transaction gain of $ 641.9 million and realized and unrealized gains

on EQT ordinary shares of $43.8 million and $57.9 million , respectively, net of $167.6 million of income tax expense.

year ended December 31, 2023 includes Veritable Transaction gain of $133.1 million and realized gains on EQT shares of

$29.6 million , net of $40.6 million income tax expense.

(4) Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations,

tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital, general partner

commitments, and other strategic investments, and realized economic gains and losses related to these seed capital, general

partner commitments, and other strategic investments.

For the years ended December 31, 2022 , 2023 , and 2024 , other

economic items were net of income tax expense (benefit) of $(6.4) million, $5.2 million, and $4.1 million, respectively.

(2) Includes equity method deferred taxes.

For the year ended December 31, 2023, intangible-related deferred taxes have been

adjusted to eliminate benefits of $28.9 million related to the Veritable Transaction.

For the year ended December 31, 2025,

intangible-related deferred taxes have been adjusted to eliminate net expenses of $4.4 million related to the Peppertree and

Comvest Transactions.

(3) The year ended December 31, 2023 includes a gain of $133.1 million related to the Veritable Transaction and realized

gains of $29.6 million on EQT ordinary shares related to the BPEA Transaction, net of $40.6 million income tax expense.

The year ended December 31, 2025 includes total gains of $371.3 million related to the Peppertree, Comvest, and

Montrusco Bolton Transactions and realized gains of $6.2 million on TPG Class A common shares, net of $93.1 million of

income tax expense.

See Notes 7 and 8 of our Consolidated Financial Statements.

(4) Other economic items include certa in Affiliat e equity-related activities, gains and losses related to contingent payment

obligations, tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital,

general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed

capital, general partner commitments, and other strategic investments.

For the year ended December 31, 2025 , the increase

in other economic items was predominantly the result of Affiliate equity-related activities.

Liquidity and Capital Resources

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In 2025 , we met our cash requirements primarily through cash generated by operating activities,

Our principal uses of cash in 2024 were for the return of excess capital through share repurchases, repayment of debt, purchases

of investment securities, and distributions to Affiliate equity holders .

senior bank debt borrowings, and an issuance of senior notes .

In addition, during the year ended December 31, 2025 , we

received total after-tax net proceeds of approximately $490 million from the Peppertree, Comvest, and Montrusco Bolton

Transactions.

Ou r principal uses of cash in 2025 were for investments in new Affiliates, the return of excess capital through

share repurchases, repayment of debt, and distributions to Affiliate equity holders.

We expect investments in new Affiliates, investments in existing Affiliates, primarily through purchases of Affiliate equity

interests and general partner and seed capital investments, the return of capital through share repurchases and the payment of

cash dividends on our common stock, repayment of debt, distributions to Affiliate equity holders, payment of income taxes,

purchases of marketable securities, and general working capital to be the primary uses of cash on a consolidated basis for the

foreseeable future.

We anticipate that our current cash balance, cash flows from operations, proceeds from sales of our

marketable securities, and borrowings under our senior unsecured multicurrency revolving credit facility (the “revolver”) will

be sufficient to support our uses of cash for the foreseeable future.

In addition, we may draw funding from the debt and equity

capital markets, and our credit ratings, among other factors, allow us to access these sources of funding on favorable terms.

cash dividends on our common stock, repayment of debt, distributions to Affiliate equity holders, payment of income taxes, and

general working capital to be the primary uses of cash on a consolidated basis for the foreseeable future.

In addition, in January

2026, we settled each of our conversion obligations with respect to our junior convertible securities in cash for an aggregate

amount of $514.6 million.

We anticipate that our current cash balance, cash flows from operations, and borrowings under our

revolver will be sufficient to support our uses of cash for the foreseeable future.

In addition, we may draw funding from the

debt and equity capital markets, and our credit ratings, among other factors, allow us to access these sources of funding on

favorable terms.

The following table presents operating, investing, and financing cash flow activities:

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For the year ended December 31, 2025 , Cash flows from operating activities were $973.2 million , primarily from Net

income of $740.6 million and distributions of earnings received from equity method investments of $403.9 million .

items were partially offset by timing differences in the cash settlement of receivables, other assets, and payables, accrued

liabilities, and other liabilities of $56.8 million .

In 2024 , operating cash flows were primarily attributable to the controlling

income of $904.0 million adjusted for non-cash items of $424.5 million and distributions of earnings received from equity

method investments of $467.8 million .

In 2025 , operating cash flows were primarily attributable to the controlling interest.

Investing Cash Flow

For the year ended December 31, 2024 , Cash flows from investing activities were $379.1 million , primarily due to $898.1

million of maturities and sales of investment securities, partially offset by $510.4 million of purchases of investment securities.

For the year ended December 31, 2025 , Cash flows used in investing activities were $206.1 million , primarily due to

$776.0 million of investments in Affiliates and $103.8 million of purchases of investment securities.

These items were partially

offset by $403.8 million of cash proceeds from Affiliate transactions and $266.2 million of maturities and sales of investment

In 2025 , investing cash flows were primarily attributable to the controlling interest.

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For the year ended December 31, 2025 , Cash flows used in financing activities were $1,148.7 million , primarily due to

$709.8 million of repurchases of common stock, net, repayment of senior notes and senior bank debt of $400.0 million and

$350.0 million, respectively, $258.0 million of distributions to non-controlling interests, $100.2 million of Affiliate equity

purchases, net of issuances, and $98.7 million of deferred payments.

These items were partially offset by the issuance of junior

subordinated notes and senior notes of $450.0 million and $397.6 million, respectively.

In 2024 , financing cash flows were

primarily attributable to the controlling interest.

repayment of senior bank debt borrowings and matured senior notes of $826.1 million , $706.3 million of repurchases of

common stock, net, $252.3 million of distributions to non-controlling interests, $170.3 million of Affiliate equity purchases, net

of issuances, and $108.0 million of taxes paid on shares withheld for share-based awards.

These items were partially offset by

senior bank debt borrowings and an issuance of senior notes of $899.3 million.

In 2025 , financing cash flows were primarily

attributable to the controlling interest.

Affiliate Equity

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cash flow distributions, which is intended to represent fair value.

Affiliate equity holders are also permitted to sell their equity

interests to other individuals or entities in certain cases, subject to our approval or other restrictions.

In certain cases, Affiliate equity holders are also permitted to

sell their equity interests to Affiliate partners or other parties, subject to our approval or other restrictions.

As of December 31, 2025 , the current redemption value of Affiliate equity interests was $408.0 million , of which $246.8

million was presented as Redeemable non-controlling interests (including $32.2 million of consolidated Affiliate sponsored

investment products primarily attributable to third-party investors), and $54.8 million was included in Other liabilities.

Although the timing and amounts of these purchases are difficult to predict, we paid $106.5 million for Affiliate equity

purchases and received $6.3 million for Affiliate equity issuances in 2024 , and we expect net purchases of approximately $175

million of Affiliate equity in 2025 .

In the event of a purchase, we become the owner of the cash flow associated with the

purchased equity.

investment products primarily attributable to third-party investors), and $161.2 million was included in Other liabilities on the

Consolidated Balance Sheets.

Although the timing and amounts of these purchases are difficult to predict, we paid $176.7

million for Affiliate equity purchases and received $6.4 million for Affiliate equity issuances in 2025 , and we expect net

purchases of approximately $100 million of Affiliate equity in 2026 .

In the event of a purchase, we become the owner of the

cash flow associated with the purchased equity.

See Notes 13 and 14 of our Consolidated Financial Statements.

Share Repurchases

Our Board of Directors authorized share repurchase programs in October 2022 , October 2023 , and July 2024 to repurchase

up to 3.0 million , 3.3 million , and 5.4 million shares of our common stock, respectively, and these authorizations have no

Purchases may be made from time to time, at management’s discretion, in the open market or in privately negotiated

transactions, including through the use of trading plans, as well as pursuant to accelerated share repurchase programs or other

share repurchase strategies that may include derivative financial instruments.

For the year ended December 31, 2024 , we

repurchased 4.3 million shares of our common stock at an average price per share of $162.65 .

As of March 31, 2024, we had

repurchased all of the shares in the repurchase program authorized in October 2022.

As of December 31, 2024 , we had

repurchased all of the shares in the repurchase program authorized in October 2023, and there were a total of 5.3 million shares

available for repurchase under our July 2024 share repurchase program.

The following table presents the carrying value of our outstanding indebtedness.

The weighted average maturity of our

outstanding debt is 21 years, with approximately 87% of debt maturing in 2030 and beyond.

Our nearest term maturity relates

to our $350.0 million senior notes due August 2025 (“the 2025 senior notes”).

See Note 5 of our Consolidated Financial

Our Board of Directors authorized share repurchase programs in July 2024 and January 2026 t o repurchase up to 5.4

million and 4.2 million shares of our common stock, respectively, and these authorizations have no expiry.

Purchases may be

made from time to time, at management’s discretion, in the open market or in privately negotiated transactions, including

through the use of trading plans, as well as pursuant to accelerated share repurchase programs or other share repurchase

strategies that may include derivative financial instruments.

For the year ended December 31, 2025 , we repurchased 3.3 million

shares of our common stock at an average price per share of $212.92 .

As of the January 26, 2026 authorization, there were a

total of 6.0 million shares available for repurchase under our share repurchase programs.

The following table presents the carrying value of our outstanding indebtedness and a reconciliation to Debt as presented

on our Consolidated Balance Sheets:

(in millions)

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Junior convertible securities .

The carrying value of our debt differs from the amount reported in the notes to our Consolidated Financial Statements, as

the carrying value of our debt in the table above is not reduced for debt issuance costs.

Total carrying value .

Debt issuance costs .

As of December 31, 2025 , the weighted average maturity of our outstanding senior and junior subordinated notes is 22

years, all of which is maturing in 2030 and beyond.

Our nearest term maturity with respect to our senior and junior

subordinated notes relates to our $350.0 million senior notes due June 2030 (“the 2030 senior notes”).

See Note 5 of our

Consolidated Financial Statements.

Senior Bank Debt

During the year ended December 31, 2024 , we repaid the $350.0 million outstanding under the term loan.

As of December 31, 2024 , w e had a $1.25 billion revolver .

We amended and restated the revolver in November 2024,

extending the maturity from October 25, 2027 to November 15, 2029, and the term loan terminated upon payment in full in the

third quarter of 2024 .

Subject to certain conditions, we may increase the commitments under the revolver by up to an

additional $500.0 million .

As of December 31, 2025 , we had a $1.25 billion revolver which matures on November 15, 2029.

Subject to certain

conditions, we may increase the commitments under the revolver by up to an additional $500.0 million .

Under the terms of the revolver we are required to meet two financial ratio covenants.

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maximum ratio of debt to EBITDA (the “bank leverage ratio”) of 3.25x.

The second covenant is a minimum EBITDA to cash

interest expense ratio of 3.00x (the “bank interest coverage ratio”).

The second covenant is a minimum ratio of EBITDA

to cash interest expense (the “bank interest coverage ratio”) of 3.00x.

For purposes of calculating these ratios, share-based

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respectively.

As of December 31, 2024 , we had no outstanding borrowings under the revolver, and could borrow all capacity and remain

in compliance with all of the terms of the revolver .

In the first quarter of 2024, our $400.0 million 2024 senior notes matured and were fully repaid.

As of December 31, 2024 , we had senior notes outstanding, the respective principal terms of which are presented below:

February 2015

As of December 31, 2025 , we had no outstanding borrowings under the revolver, and we could borrow all remaining

capacity and maintain compliance with all of the terms of the revolver.

As of the date of this Annual Report on Form 10-K, we

had outstanding borrowings of $475.0 million under the revolver .

In the third quarter of 2025, our $350.0 million 3.50% senior notes matured and were fully repaid.

As of December 31, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and

described below:

December 2025

Maturity date .

February 2036

Par value (in millions) .

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Semi-annually

In the third quarter of 2024, we issued $400.0 million of 2034 senior unsecured notes with a maturity date of August 20,

Interest is payable beginning February 20, 2025.

In addition to customary event of default provisions, the indenture

governing the 2034 senior notes limits our ability to consolidate, merge or sell all or substantially all of its assets and requires

us to make an offer to repurchase the 2034 senior notes upon certain change of control triggering events.

The senior notes may be redeemed, in whole or in part, at a make-whole redemption price (plus accrued and unpaid

interest), at any time, in the case of the 2025 senior notes, at any time prior to March 15, 2030, in the case of the 2030 senior

notes, and at any time prior to May 20, 2034, in the case of the 2034 senior notes.

In addition, the 2030 and 2034 senior notes

may be redeemed at par, in whole or in part, at any time, on or after March 15, 2030 and May 20, 2034, respectively.

also repurchase senior notes in the open market or in privately negotiated transactions from time to time at management’s

We have used a majority of the net proceeds from the 2034 senior notes for the repayment of the term loan, and in the

future intend to use the remaining net proceeds for general corporate purposes, which may include share repurchases and

investments in new and existing Affiliates , as well as further repayment or refinancing of indebtedness.

On December 11, 2025, we issued $425.0 million of 2036 senior unsecured notes with a maturity date of February 15,

2036 (the “2036 senior notes”) .

Interest is payable beginning August 15, 2026.

In addition to customary event of default provisions, the indenture governing the senior notes, including the applicable

supplemental indentures with respect to the 2030, 2034, and 2036 senior notes, limits our ability to consolidate, merge, or sell

all or substantially all of our assets, and requires us to make an offer to repurchase the applicable senior notes at 101% of the

principal amount (plus any accrued and unpaid interest), upon certain change of control triggering events.

The senior notes

may be redeemed, in whole or in part, at a make-whole redemption price (plus accrued and unpaid interest), at any time prior to

March 15, 2030, in the case of the 2030 senior notes, at any time prior to May 20, 2034, in the case of the 2034 senior notes,

and at any time prior to November 15, 2035, in the case of the 2036 senior notes.

In addition, the 2030, 2034, and 2036 senior

notes may be redeemed at par (plus accrued and unpaid interest), in whole or in part, at any time, on or after March 15, 2030,

May 20, 2034, and November 15, 2035, respectively .

We may also repurchase senior notes in the open market or in privately

negotiated transactions from time to time at management’s discretion.

We used a majority of the net proceeds from the 2036 senior notes to settle our conversion obligations with respect to our

junior convertible securities in January 2026, as further described below.

Junior Subordinated Notes

As of December 31, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are

presented below:

presented and described below:

Junior Subordinated

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NYSE Symbol .

In the first quarter of 2024, we issued $450.0 million of 2064 junior subordinated notes with a maturity date of March 30,

Interest was payable commencing on June 30, 2024, and we have the right to defer interest payments in accordance with

the terms of the notes.

The 2064 junior subordinated notes were issued at 100% of the principal amount and rank junior and

subordinate in right of payment and upon liquidation to all of our current and future senior indebtedness.

As of December 31,

2024 , the 2059 junior subordinated notes could be redeemed at any time, in whole or in part.

The other junior subordinated

notes may be redeemed at any time, in whole or in part, on or after September 30, 2025, in the case of the 2060 junior

subordinated notes, on or after September 30, 2026, in the case of the 2061 junior subordinated notes, and on or after March 30,

2029, in the case of the 2064 junior subordinated notes.

In each case, the junior subordinated notes may be redeemed at 100%

of the principal amount of the notes being redeemed, plus any accrued and unpaid interest thereon.

Prior to the applicable

redemption date, at our option, the applicable junior subordinated notes may also be redeemed, in whole but not in part, at

100% of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws, regulations, or

interpretations occur;

or at 102% of the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain

changes relating to the equity credit criteria for securities with features similar to the applicable notes.

We have used, and in the future intend to use, the net proceeds from the 2064 junior subordinated notes for general

corporate purposes, which may include share repurchases, investments in new and existing Affiliates, and the repayment or

refinancing of indebtedness.

Junior Convertible Securities

As of December 31, 2024 , we had $341.7 million of principal outstanding in our 5.15% junior convertible trust preferred

securities outstanding (the “junior convertible securities”) maturing in 2037.

The junior convertible securities were issued by

AMG Capital Trust II, a Delaware statutory trust, in October 2007.

Each of the junior convertible securities represents an

undivided beneficial interest in the assets of the trust.

The trust’s only assets are junior subordinated convertible debentures

issued to it by us, and have substantially the same payment terms as the junior convertible securities.

We own all of the trust’s

common securities, and have fully and unconditionally guaranteed, on a subordinated basis, the payment obligations on the

As of December 31, 2025 , each of the 2059 and 2060 junior subordinated notes could be redeemed at any time, in whole or

The other junior subordinated notes may be redeemed at any time, in whole or in part, on or after September 30, 2026,

in the case of the 2061 junior subordinated notes, and on or after March 30, 2029, in the case of the 2064 junior subordinated

In each case, the junior subordinated notes may be redeemed at 100% of the principal amount of the notes being

redeemed, plus any accrued and unpaid interest thereon.

Prior to the applicable redemption date, at our option, the applicable

junior subordinated notes may also be redeemed, in whole but not in part, at 100% of the principal amount, plus any accrued

and unpaid interest, if certain changes in tax laws, regulations, or interpretations occur;

or at 102% of the principal amount, plus

any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for securities with

features similar to the applicable notes.

Junior Convertible Securities

We do not consolidate the trust’s financial results into our Consolidated Financial Statements.

Holders of the junior convertible securities have no rights to put these securities to us.

Upon conversion, holders will

receive cash or shares of our common stock, or a combination thereof, at our election.

We may redeem the junior convertible

securities, subject to our stock trading at or above certain specified levels over specified times periods, and may also repurchase

junior convertible securities in the open market or in privately negotiated transactions from time to time at management’s

The junior convertible securities are considered contingent payment debt instruments under federal income tax

regulations, which require us to deduct interest in an amount greater than our reported interest expense.

We estimate that these

deductions will generate annual deferred tax liabilities of approximately $10 million .

We did not repurchase any of our junior

convertible securities during the years ended December 31, 2023 and 2024 .

As of December 31, 2025 , we had $340.6 million of principal outstanding on our junior convertible trust preferred

securities outstanding (the “junior convertible securities”).

Prior to their redemption , as described below, the junior convertible

securities bore interest at a rate of 5.15% per annum, which interest payments were payable quarterly in cash.

convertible securities were considered contingent payment debt instruments under federal income tax regulations, which

required us to deduct interest in an amount greater than its reported interest expense (“excess interest expense deductions”).

In November 2025, pursuant to the terms of the junior convertible securities, we adjusted the conversion rate of the

securities to 0.2582 shares of common stock per $50.00 junior convertible security, equivalent to an adjusted conversion price

of $193.65 per share.

The adjustment was the result of our cumulative declared dividends on our common stock since the prior

On December 8, 2025, we delivered notice that we had elected to redeem all of the outstanding junior convertible securities

on December 29, 2025 (the “Redemption Date”), and announced our intention to settle any and all conversion obligations in

Substantially all holders of the junior convertible securities delivered requests to convert their securities prior to the

Redemption Date.

On December 15, 2025, we made an irrevocable election to settle our conversion obligations in cash by

reference to the daily volume weighted average price of our common stock during each applicable ten trading day conversion

reference period.

These conversions resulted in a settlement value in excess of the associated carrying value (the “conversion

As of December 31, 2025, the conversion premium of $155.5 million was recorded within Other liabilities, with a

corresponding reduction to Additional paid-in capital on the Consolidated Balance Sheets.

In addition, the conversion resulted

in a reduction to Deferred tax liability (net) on the Consolidated Balance Sheets of $38.9 million , with a corresponding increase

to Additional paid-in capital.

Our election to settle each applicable conversion premium in cash using a ten-day reference

period was accounted for as a forward sale contract, which resulted in a $9.2 million expense recorded in Other expenses (net)

in our Consolidated Statements of Income, in the fourth quarter of 2025.

On the Redemption Date, we redeemed $1.1 million of junior convertible securities which were not converted, reflecting

the principal amount of the redeemed securities, plus accrued and unpaid interest, up to, but not including, the Redemption

In January 2026 , we settled each of our applicable conversion obligations in cash for an aggregate amount of

$514.6 million which resulted in an incremental expense related to the forward sale contract of $9.3 million .

As a result of the

settlement of these securities, we expect to incur a current cash tax liability of approximately $56.0 million in 2026, reflective

of the recapture of excess interest expense deductions.

As of the date of this Annual Report on Form 10-K, no junior

convertible securities are outstanding.

Equity Distribution Program

In the second quarter of 2022, we entered into equity distribution and forward equity agreements with several major

securities firms under which we may, from time to time, issue and sell shares of our common stock (immediately or on a

In the first quarter of 2025, we entered into an equity distribution agreement and forward sale agreements with several

major securities firms under which we may, from time to time, issue and sell shares of our common stock (immediately or on a

forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”).

As of December 31,

2024 , no sales had occurred under the equity distribution program.

distribution program superseded and replaced our prior equity distribution program.

As of December 31, 2025 , no sales had

occurred under the equity distribution program.

See Note 6 of our Consolidated Financial Statements.

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Changes in the assumptions used could significantly impact fair values.

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not

separately recognized.

We perform a qualitative impairment assessment at least annually to determine if the carrying value of

our single reporting unit is in excess of its fair value.

In this qualitative assessment, we typically measure the excess of the fair

value of our reporting unit over its carrying value using various qualitative and quantitative factors (including our market

capitalization).

If there is an indication that the carrying value of the reporting unit is in excess of the fair value under this test,

then we must determine if a potential impairment is more-likely-than-not.

To determine if a potential impairment is more-

likely-than-not, we perform a single step quantitative test with any excess of carrying value over fair value recorded as an

expense in Intangible amortization and impairments.

We completed our annual qualitative goodwill impairment assessment as of September 30, 2024 and no impairment was

Based on our assessment, the fair value of our reporting unit was substantially greater than its respective carrying

amount, including goodwill.

Indefinite-Lived Acquired Client Relationships

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assumptions are revenue growth rates and discount rates.

For the year ended December 31, 2024 , we completed our annual assessment and performed discounted cash flow analyses

for certain asset groups due to continued declines in assets under management.

The most relevant assumptions used in these

analyses were revenue growth rates over the next five years ranging from (18)% to 0%, long-term revenue growth rates of

0.0%, and discount rates of 11.0%.

Our analyses indicated that the value of these asset groups exceeded their carrying value by

less than 10%.

While we believe all assumptions utilized in our assessment are reasonable and appropriate, changes in these

estimates could produce different values which could imply an impairment.

For example, assuming all other assumptions

remain constant, a decrease in the revenue growth rate of 200 basis points or an increase in the discount rate of 100 basis points

would result in an impairment of approximately $30 million.

In the first quarter of 2025, we completed an impairment assessment of the indefinite-lived acquired client relationships for

certain mutual fund assets and determined that the fair value of the assets had declined below their carrying values.

Accordingly, we recorded an expense in Intangible amortization and impairments of $59.2 million attributable to the controlling

interest ( $70.0 million in aggregate) to reduce the carrying value of the assets to fair value.

The decline in the fair value was a

result of current and projected declines in assets under management that decreased the forecasted revenue associated with the

The most relevant assumptions used in these analyses were revenue growth rates over the next five years ranging from

(21)% to 0% , long-term revenue growth rates of 0% , and discount rates of 11.0% .

In the fourth quarter of 2025, we completed our annual impairment assessment of our indefinite-lived acquired client

relationships and determined that the fair value of certain mutual fund assets had declined below their carrying values.

Accordingly, we recorded an expense in Intangible amortization and impairments of $37.0 million attributable to the controlling

interest ( $58.0 million in aggregate) to reduce the carrying value of the assets to fair value.

The decline in the fair value was a

result of current and projected declines in assets under management that decreased the forecasted revenue associated with the

The most relevant assumptions used in these analyses were revenue growth rates over the next five years ranging from

(34)% to 0% , long-term revenue growth rates of 0% , and discount rates of 10.5% .

While we believe all assumptions used in our assessments are reasonable and appropriate, changes in these estimates could

produce different values.

We performed a sensitivity analysis over the most relevant assumptions used in these assessments.

Assuming all other assumptions remain constant, a decrease in the revenue growth rates over the next five years of 200 basis

points would result in an additional impairment amount of approximately $80 million , while an increase in the discount rate of

100 basis points would result in an additional impairment amount of approximately $85 million .

Further declines in assets

under management resulting from negative investment performance or net client outflows above our estimates could result in

additional future impairments.

For the year ended December 31, 2025 , no other impairments were indicated for our indefinite-lived acquired client

relationships.

Equity Method Investments in Affiliates

18 unchanged sentences

could significantly impact the respective fair value of an Affiliate.

In the second quarter of 2024, the Company recorded a $39.9 million expense to reduce the carrying value of an Affiliate to

See Note 8 of our Consolidated Financial Statements.

For the year ended December 31, 2025 , the Company completed its annual assessme nt of its investments in Affiliates

accounted for under the equity method and no other impairments were indicated.

accounted for under the equity method and no impairments were indicated.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis