What changed in this filing

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Item 1. Business

2023-02-15 compared with 2022-02-24 · 132 added, 155 removed, 329 unchanged (47% of the section changed)

Rowe Price Group, Inc.

is a financial services holding company that provides global investment management services through its subsidiaries to investors worldwide.

Rowe Price", "we", "us", or "our") is a financial services holding company that provides global investment management services through its subsidiaries to investors worldwide.

We provide an array of U.S.

mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other T.

Rowe Price products.

Rowe Price products include:

open-ended investment products offered to investors outside the U.S.

and products offered through variable annuity life insurance plans in the U.S.

mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other sponsored products.

The other sponsored products include:

open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds and collateralized loan obligations.

We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services;

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On December 29, 2021, we completed our acquisition of Oak Hill Advisors, L.P., a leading alternative credit manager, and other entities that had common ownership (collectively, "OHA").

We acquired 100% of the equity interests of Oak Hill Advisors, L.P., 100% of the equity interests in entities that make co-investments in certain affiliated private investment funds (the "co-investment entities") and a majority of the equity interests in entities that have interests in general partners of affiliated private investment funds and are entitled to a disproportionate allocation of income (the "carried interest entities") for upfront purchase consideration of $3.4 billion in a combination of cash and T.

Rowe Price Group, Inc.

common stock.

The upfront purchase consideration included the retirement of $217.1 million of OHA debt.

In addition, the consideration may be increased by up to an incremental $900.0 million in cash as part of an earnout payment starting in early 2025 and ending in early 2027, upon satisfying or exceeding certain defined revenue targets.

These defined revenue targets are evaluated on a cumulative basis beginning at the end of 2024, with the ability to extend two additional years if the defined revenue targets are not achieved.

The earnout amount will be subject to a proportional reduction if OHA's actual revenue at the end of the earnout period does not meet the defined revenue targets and could result in no earnout payout if OHA's actual revenue falls below 75% of the defined revenue targets.

The acquisition of OHA included $57 billion of capital under management, of which $47 billion of fee-basis assets under management was added to our assets under management as of the date of the acquisition.

The acquisition accelerates our expansion into alternative investment markets and complements our existing global platform and ongoing strategic initiatives in our core investments and distribution capabilities.

Alternative credit strategies continue to be in demand from institutional and retail investors across the globe seeking attractive yields and risk-adjusted returns.

Over its more than 30-year history, OHA has generated attractive risk-adjusted returns across numerous market cycles.

Its fully integrated team specializes in private, distressed, special situations, liquid, and structured credit and real asset strategies in North America, Europe and other geographies.

OHA manages private investment funds, collateralized loan obligations ("CLOs") and other private accounts on behalf of a global, largely institutional client base.

OHA has over 300 employees with headquarters in New York and primary offices in London, Sydney, Hong Kong, Luxembourg, Fort Worth, and San Francisco.

As of December 31, 2022, OHA had $57 billion of capital under management (which includes net asset value, portfolio value and/or unfunded capital).

Core Capabilities

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Our strategic investments have been focused on increasing our investment professional headcount globally, expanding our product offerings, expanding our global distribution footprint to strengthen our regional relationships and brand, and investing in new technology and the core infrastructure of the firm.

The industry in which we operate has been evolving quickly and a number of headwinds have arisen over the last few years, including passive investments taking market share from traditional active strategies;

The industry in which we operate has been evolving and a number of headwinds have arisen over the last few years, including passive investments taking market share from traditional active strategies;

continued downward fee pressure;

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Despite the headwinds, we believe there are significant opportunities that align to our core capabilities.

As such, we have been responding with several multi-year initiatives that are designed to strengthen our long-term competitive position and to:

• Maintain our position as a premier active asset manager, delivering durable value to clients.

Rowe Price into a more globally diversified asset manager.

• Extend and leverage our retirement expertise globally while becoming an ever more integrated investment solutions provider.

• Embed best practices for sustainability and environmental, social and corporate governance throughout the company.

• Expand our investment capabilities and product offerings, including through our acquisition of OHA.

• Maintain strong processes and internal controls, which is increasingly important with growing business complexity and regulation.

• Remain a destination of choice for top talent, with a culture of diversity, inclusivity, empowerment, accountability and collaboration.

As such, we have been responding with several strategic, multi-year initiatives that are designed to strengthen our long-term competitive position and to:

• Access growth through improved investment vehicles, technology, sales and content.

• Focus on further growth in countries where we have an existing business by investing more in resources, products, and marketing in high opportunity countries.

• Deepen client relationships and renew our individual client base by innovating and investing in our capabilities to deliver a differentiated offer to clients.

• Broaden our reach in the private and alternatives market by leveraging our distribution channels and organically expanding our investment capabilities.

• Strengthen our distribution technology to enhance the digital client experience and client reporting.

• Attract and retain top talent, enable effective hybrid collaboration, and deliver on our expanded diversity, equity, and inclusion goals.

• Deliver strong financial results and balance sheet strength for our stockholders over the long term.

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During 2022, we derived the vast majority of our consolidated net revenues and net income from investment advisory services provided by our subsidiaries, primarily T.

Rowe Price Associates and T.

Rowe Price International Ltd.

Beginning in 2022, investment advisory services provided to OHA-affiliated investment products and vehicles will be included in consolidated net revenues and net income.

Previously, in November 2020, we announced our plan to establish T.

Rowe Price Associates, T.

Rowe Price International Ltd., and OHA.

In March 2022, we established and launched T.

Rowe Price Investment Management, a separate SEC-registered investment advisor, to support our continued focus on generating strong investment results for clients.

Rowe Price Investment Management is anticipated to begin operations in March 2022.

Subsequent to this date, services related to this investment advisor will be included in our consolidated net revenue and net income.

Since its launch in March 2022, services related to this investment advisor have been included in our consolidated net revenue and net income.

Our revenues depend largely on the total value and composition of our assets under management.

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At December 31, 2022, we had $1,274.7 billion in assets under management, including $627.8 billion in U.S.

mutual funds, $437.1 billion in subadvised funds and separately managed accounts (including $10.9 billion of OHA separate accounts), $343.3 billion in collective investment trusts and other T.

Rowe Price products, and $36.0 billion in private investment funds and CLOs.

The acquisition of OHA completed on December 29, 2021 included $57 billion of capital under management (which includes net assets value, portfolio value and/or unfunded capital), of which $46.9 billion of fee-basis assets under management are included in our assets under management as of December 31, 2021.

Assets under management increased $217.3 billion from the end of 2020.

This increase was primarily driven by market appreciation and income, net of distributions not reinvested, of $198.9 billion and fee-basis assets under management of $46.9 billion that was acquired in the OHA acquisition.

These increases were partially offset by net cash outflows of $28.5 billion for 2021.

mutual funds, $320.5 billion in subadvised funds and separately managed accounts, $288.9 billion in collective investment trusts and other sponsored investment products, and $37.5 billion in private investment funds and CLOs.

Assets under management decreased $413.1 billion from the end of 2021.

This decrease was primarily driven by market depreciation and losses, including distributions not reinvested, of $351.4 billion and net cash outflows of $61.7 billion.

The following tables show our assets under management by vehicle, asset class, distribution channel, and account type:

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(3) Includes Americas, Europe, Middle East and Africa ("EMEA"), and Asia Pacific ("APAC").

(4) Includes T.

Rowe Price investments in proprietary products, assets of the T.

(4) Includes seed investments in proprietary products, assets of the T.

Rowe Price employee benefit plans, Private Asset Management accounts, and other as well as OHA products.

(5) The 2020 amounts have been reclassified to conform with the 2021 presentation.

In 2022, our target date retirement products experienced net cash inflows of $11.3 billion.

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We service clients in 55 countries around the world.

Investors domiciled outside the U.S., including OHA's clients, represented about 10% of total assets under management at the end of 2021.

Investors domiciled outside the U.S.

represented about 9% of total assets under management at the end of 2022.

We accumulate our assets under management from a diversified client base across five primary distribution channels:

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investors on a direct basis, U.S.

retirement plan sponsors for which we provide recordkeeping services, and global institutional investors.

retirement plan sponsors for which we provide recordkeeping services, and global institutions.

The following table outlines the types of products within each distribution channel through which our assets under management are sourced as of December 31, 2022.

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The following tables set forth our broad investment capabilities as of December 31, 2022.

Growth Core Value Concentrated Quantitative Sustainable

All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors Large-Cap, Mid-Cap, Small-Cap Large-Cap, Mid-Cap, Small-Cap Large-Cap (Growth & Value) Large-Cap (Value), Multi-Cap, Small-Cap Large-Cap (Growth & Value)

Growth Core Value Concentrated Integrated (Quantitative & Fundamental) Impact

All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors Large-Cap, Mid-Cap, Small-Cap Large-Cap, Mid-Cap, Small-Cap Large-Cap (Value) Large-Cap (Growth & Value, Lower Volatility), Multi-Cap, Small-Cap Large-Cap

Global / International:

All-Cap, Large-Cap, Small-Cap, Sectors, Regional Large-Cap Large-Cap, Regional Large-Cap Large-Cap (Growth & Value) All-Cap, Large-Cap

All-Cap, Large-Cap, Small-Cap, Sectors, Regional Large-Cap Large-Cap, Regional Large-Cap, Regional Large-Cap (Core) Large-Cap

Cash Low Duration High Yield / Bank Loans Government Securitized Investment Grade Credit

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Global / International:

N/R N/R Euro High Yield, High Income, Global High Yield Global Government Bond, Global Government Bond ex-Japan, Global Government Bond High Quality N/R Global Investment Grade Corporate, Euro Investment Grade Corporate, Global Impact Credit

N/R - Not relevant

Fixed Income, cont'd

Multi-Sector Dynamic Suite Emerging Markets Municipal

QM US Bond, US Core Bond, US Core Plus, US Investment Grade Core, US Total Return N/R N/R Tax-Free High Yield, Intermediate Tax-Free High Yield, Muni Intermediate, Tax-Free Long-Term, Tax-Free Short/Intermediate

Multi-Sector Dynamic Suite Emerging Markets Municipal Impact

Global / International:

Global Multi-Sector, Global Aggregate, International Bond, Euro Aggregate Dynamic Credit, Dynamic Global Bond, Dynamic Global Bond Investment Grade, Dynamic Emerging Markets Bond EM Bond, EM Corporate, EM Corporate High Yield, EM Corporate Investment Grade, EM Local Bond, Asia Credit N/R

N/R - Not relevant

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We attempt to ensure that the new investment product has a sustainable level of assets from unrelated shareholders before we consider redemption of our seed capital investment in order to not negatively impact the new investment product's net asset value or its investment performance record.

We also provide seed capital for new investment products in the alternative asset class.

The length of time we hold our seed investment is dependent on the terms of each investment.

At December 31, 2022, we had seed capital investments in our products of $1.1 billion.

We may also close or limit new investments to new investors across T.

Rowe Price investment products in order to maintain the integrity of the investment strategy and to protect the interests of its existing shareholders and investors.

We may also close or limit new investments to new investors across sponsored investment products in order to maintain the integrity of the investment strategy and to protect the interests of its existing shareholders and investors.

At present, the following strategies, which represent about 10% of total assets under management at December 31, 2022, are generally closed to new investors:

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Investment Advisory Fees

We provide investment advisory services through our subsidiaries to the U.S.

Our investment advisory fees are earned pursuant to agreements with our funds and/or clients, including investment products for which we provide sub-advisory services.

Our advisory fees are generally based as a percentage of AUM pursuant to such contractual arrangements.

The fee rate will vary depending on the services provided, the asset class and/or vehicle.

Through our subsidiaries, we provide investment advisory services to the U.S.

mutual funds;

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collective investment trusts;

Rowe Price products, including funds offered to investors outside the U.S.

and portfolios offered through variable annuity life insurance plans in the U.S.

Rowe Price products.

Rowe Price products include:

Nearly 58% of our investment advisory fees are earned from our U.S.

mutual funds, while about 42% of our investment advisory fees are earned from our other investment portfolios.

Ten of our 185 U.S.

mutual funds - Blue Chip Growth, Capital Appreciation, Growth Stock, New Horizons, Mid-Cap Growth, Large-Cap Growth, Health Sciences, International Discovery, Retirement 2030, and Dividend Growth - accounted for approximately 29% of our investment advisory revenues in 2021, and approximately 22% of our assets under management at December 31, 2021.

Our largest client account relationship, apart from the U.S.

mutual funds, is with a third-party financial intermediary that accounted for about 7% of our investment advisory revenues in 2021.

At December 31, 2022, assets under our management in the U.S.

mutual funds aggregated $871.4 billion, an increase of 9.7% or $76.8 billion from the beginning of the year.

mutual funds aggregated $627.8 billion, a decrease of 28.0% from the beginning of the year.

Investment advisory services are provided to each U.S.

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The Boards of the respective funds, including a majority of directors who are not interested persons of the funds or of T.

Rowe Price Group (as defined in the Investment Company Act of 1940), must approve the investment management agreements annually.

Rowe Price Group (as defined in the Investment Company Act of 1940), must approve the investment management agreements annually and regularly review their fee structures.

Fund shareholders approve material changes to these investment management agreements.

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The termination of one or more of these agreements could have a material adverse effect on our results of operations.

Independent directors and trustees of the U.S.

mutual funds regularly review our fee structures.

The advisory fee paid monthly by each of the U.S.

mutual funds is computed on a daily basis by multiplying a fund’s net assets by its effective fee rate.

For the majority of the U.S.

mutual funds, the fee rate is equal to the sum of a tiered group fee rate plus an individual fund rate.

A fund’s fee rate is either an all-in fee rate, an individual fund fee rate, or the sum of an individual fund fee rate and the tiered group fee rate.

The individual fund rates are generally flat rates that are set based on the fund’s specific investment objective.

Several funds have tiered individual fund rates that reduce their individual flat fee rates based on certain asset levels of the fund as described in their prospectus.

The tiered group rate is based on the combined net assets of nearly all of the U.S.

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mutual funds exceed $845 billion, the weighted-average fee across pricing tiers is 28.1 basis points for the first $845 billion of net assets plus 26.0 basis points for net assets in excess of $845 billion.

To the extent that the combined net assets of the funds included in the group rate calculation increase, the group charge component of a fund's advisory fee rate and the resulting advisory fee rate paid by each fund will decrease.

The individual fund rates are generally flat rates that are set based on the fund’s specific investment objective.

Several funds have tiered individual fund rates that reduce their individual flat fee based on certain asset levels of the fund as described in their prospectus.

The effective fee rates for each of the stock, bond, and multi-asset funds on which we earned annual advisory fees of $10 million or greater in 2021, varied from a low of 31 basis points for the Short-Term Bond Fund to a high of 104 basis points for the International Discovery Fund.

The fee rate of several of the U.S.

mutual funds, including the Target-Date, Index funds, and Spectrum funds as well as specific funds offered solely to institutional investors, does not include a group fee component but rather an individual fund fee or an all-inclusive fee.

An all-inclusive fee covers both the investment management fee and ordinary operating expenses incurred by the fund and, as a result, our management fee varies with the level of operating expenses a fund incurs.

mutual fund typically bears all expenses associated with its operation and the issuance and redemption of its securities.

In particular, each fund pays investment advisory fees;

shareholder servicing fees and expenses;

fund accounting fees and expenses;

transfer and sub-transfer agent fees;

custodian fees and expenses;

legal and auditing fees;

expenses of preparing, printing and mailing prospectuses and shareholder reports to existing shareholders;

registration fees and expenses;

proxy and annual meeting expenses;

and independent trustee or director fees and expenses.

We usually provide that a newly organized fund’s expenses will not exceed a specified percentage of its net assets during an initial operating period.

Generally, during the earlier portion of the period, we will waive advisory fees and absorb other fund expenses, such as those described above, in excess of these self-imposed limits.

During the latter portion of the period, we may recover some or all of the waived fees and absorbed costs, but such recovery is not assured.

Additionally, we have contractual management fee waivers for certain U.S mutual funds, including nearly all money market funds, which could occur under certain specified circumstances.

Unlike traditional expense limits for newly organized funds, these waivers will not be recovered by T.

Rowe Price in the future.

In addition to these contractual fee waivers, due to the low interest rate environment in 2021, we voluntarily waived $57.9 million, or less than 1%, of our investment advisory fees from certain of our money market mutual funds, trusts, and other investment portfolios in order to maintain a positive yield for investors.

The firm expects to continue to waive fees through at least the first half of 2022.

The tiered group fee component will fluctuate with movements in our net asset value within the U.S.

mutual funds.

An all-in fee covers both the investment management fee and ordinary operating expenses incurred by the fund.

Investment management fees are waived or voluntarily reduced at times when a new fund is established.

These waivers or reductions are based on a specified percentage of its net asset value during the agreed upon period.

We may recover some or all of the waived fees, but such recovery is not assured.

Subadvised funds, separate accounts, collective investment trusts, and other investment products

Our subadvised, separate accounts, collective investment trusts, and other investment products had assets under management of $780.4 billion at December 31, 2021, an increase of $104.5 billion from the beginning of the year.

This includes $10.9 billion of fee-basis assets under management attributable to separate accounts that were acquired as part of the OHA acquisition.

Our subadvised, separate accounts, collective investment trusts, and other investment products had assets under management of $609.4 billion at December 31, 2022, a decrease of 21.9% from the beginning of the year.

Other investment products include open-ended investment products offered to investors outside the U.S.

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We earn investment management fees from these clients based on, among other things, the specific investment services to be provided, and these investment management fees are computed using the value of assets under management at a contracted annual fee rate or the products' effective fee rate for those with a tiered-fee rate structure.

The value of assets under management billed is generally based on daily valuations, end of billing period valuations, or month-end average valuations.

In 2021, approximately 79% of our advisory fees were recognized based on daily portfolio valuations, 15% were based on end of billing period valuations, and 6% were based on month-end averages.

Our standard subadvised client accounts normally pay a daily tiered rate and their agreement typically provides for termination with 60 days notice.

For separately managed accounts, the fee is generally based on a period ending value and their agreements provide for termination at any time.

Unearned fees paid in advance are refunded upon termination.

The majority of assets under management within these products are based on daily valuation.

For these products, the agreement typically provides for termination upon relatively short notice with little or no penalty.

We currently also earn performance-based investment advisory fees on certain separately managed accounts.

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This recognition criteria can lead to uneven recognition of performance-based revenue throughout the year.

collective investment trusts, sponsored by T.

Rowe Price Trust Company and subscribed to by certain qualified U.S.

retirement plans, normally pay an all-inclusive tiered rate investment management fee computed on a daily basis.

Our standard form of investment advisory agreement with other T.

Rowe Price products that pay management fees on a daily basis normally provides for termination with 30 days' notice.

The following table details the services provided by certain of our subsidiaries based on our non-U.S.

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Rowe Price Japan Japanese ITMs Investment management

Our subsidiaries T.

Rowe Price Associates, T.

Rowe Price International, T.

Rowe Price Hong Kong, T.

Rowe Price Singapore, T.

Rowe Price Australia and T.

Rowe Price Japan, may also provide subadvised investment management services to those global investment products listed in the table above.

We distribute the products listed in the table above outside the U.S.

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We currently recognize any related distribution fees paid to these financial intermediaries in distribution and servicing costs.

Private investment funds and CLOs

We also provide investment advisory services to private investment funds, CLOs and other private accounts in exchange for an investment advisory fee.

At December 31, 2022, fee basis assets under management for these vehicles totaled $37.5 billion, an increase of $1.5 billion from the beginning of the year.

Investment advisory fees from private investment funds are determined either monthly or quarterly, and are generally based on the private investment fund’s net asset value or invested capital.

Investment advisory fees earned from CLOs include senior collateral management fees and subordinated collateral management fees, which are generally determined quarterly based on the sum of collateral principal amounts and the aggregate principal amount of all defaulted obligations.

If amounts distributable on any payment date are insufficient to pay the collateral management fee according to the priority of payments, any shortfall is deferred and payable on subsequent payment dates.

Investment advisory fees from private accounts are determined either monthly or quarterly and are generally based upon the net asset value of the account.

We also recognize performance-based fees related to these products.

In connection with the management contracts from certain private accounts, we are entitled to receive performance-based incentive fees when investment returns exceed a certain performance hurdle.

In such arrangements, incentive fees are recognized when the performance benchmark has been achieved, which is generally measured on an annual basis.

Incentive fees are considered a form of variable consideration, and as such, these fees are subject to potential reversal up until the end of the measurement period (which is generally one year) when the performance-based incentive fees become fixed, determinable, and not subject to significant reversal.

Incentive fees are generally paid within 90 days of the end of the private account’s measurement period.

ADMINISTRATIVE, DISTRIBUTION, AND SERVICING FEES.

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mutual funds;

recordkeeping services for defined contribution

retirement plans investing in mutual funds outside the T.

recordkeeping services for defined contribution retirement plans investing in mutual funds outside the T.

Rowe Price complex;

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mutual funds, the T.

Rowe Price collective investment trusts, and funds outside the T.

Rowe Price collective investment trusts, and

funds outside the T.

Rowe Price complex.

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Advertising and promotion expenditures vary over time based on investor interest, market conditions, new and existing investment offerings, and the development and expansion of new marketing initiatives, including the enhancement of our digital capabilities.

ACQUISITION OF OHA.

Beginning in 2022:

Rowe Price will recognize investment advisory fees related to certain OHA products.

OHA provides investment advisory services to private investment funds, CLOs and other private accounts in exchange for an investment advisory fee.

Investment advisory fees from private investment funds are determined either monthly or quarterly, and are generally based on the private investment fund’s net asset value or invested capital.

Investment advisory fees from private accounts are determined either monthly or quarterly and are generally based upon the net asset value of the account.

Rowe Price will recognize performance-based fees related to OHA products.

In connection with the management contracts from certain private accounts, OHA is entitled to receive performance-based incentive fees when investment returns exceed a certain performance hurdle.

In such arrangements, incentive fees are recognized when the performance benchmark has been achieved, which is generally measured on an annual basis.

Incentive fees are generally paid within 90 days of the end of the private account’s measurement period.

Rowe Price will recognize income earned from interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income, which is also referred to as carried interest.

We will record our proportionate share of the investment funds' income assuming the funds were liquidated as of each reporting date pursuant to each investment fund's governing agreements.

A portion of this income will be allocated to non-controlling interest holders and will be reflected as compensation expense in the future.

CAPITAL ALLOCATION-BASED INCOME.

We recognize income earned from interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income, which is also referred to as carried interest.

We record our proportionate share of the investment funds' income assuming the funds were liquidated as of each reporting date pursuant to each investment fund's governing agreements.

A portion of this income is allocated to non-controlling interest holders and is reflected as compensation expense.

Capital allocation-based income will fluctuate period-to-period to reflect the adjustment to accrued carried interest for the change in value of the affiliated funds' underlying investments assuming the value was realized as of the end of the period, regardless of whether the fund's underlying investments have been realized.

The realization of accrued carried interest occurs over a number of years.

All aspects of our business are subject to extensive federal, state, and foreign laws and regulations.

These laws and regulations are primarily intended to benefit or protect our clients and T.

Rowe Price product shareholders.

They generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict the conduct of our business in the event that we fail to comply with laws and regulations.

Possible sanctions that may be imposed on us, in the event that we fail to comply, include the suspension of individual employees, limitations on engaging in certain business activities for specified periods of time, revocation of our investment adviser and other registrations, censures, and fines.

These laws and regulations are primarily intended to benefit or protect our clients and product shareholders.

They generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict the conduct of our business if we fail to comply with laws and regulations.

Possible sanctions that may be imposed on us, if we fail to comply, include the suspension of individual employees, limitations on engaging in certain business activities for specified periods of time, revocation of our investment adviser and other registrations, censures, and fines.

Furthermore, the regulations to which we are subject continue to change over time, resulting in uncertainty for our business as we must adapt to new laws and regulatory regimes.

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and/or non-U.S.

We are subject to various securities, compliance, corporate governance, disclosure, privacy, anti-bribery and anti-corruption, anti-money laundering, anti-terrorist financing, and economic, trade and sanctions laws and regulations, both domestically and internationally, as well as to various cross-border rules and regulations, and the data protection laws and regulations of numerous

jurisdictions, including the General Data Protection Regulation (“GDPR”) of the European Union (“EU”).

We are subject to various securities/financial services, compliance, corporate governance, disclosure, privacy, cybersecurity, technology, anti-bribery and anti-corruption, anti-money laundering, anti-terrorist financing, and economic, trade and sanctions laws and regulations, both domestically and internationally, as well as to various cross-border rules and regulations, and the data protection laws and regulations of numerous jurisdictions, including the General Data Protection Regulation (“GDPR”) of the European Union (“EU”).

We also must comply with complex and changing tax regimes in the jurisdictions where we operate our business.

The following table shows the regulator to certain of our subsidiaries:

The following table shows the securities and financial services regulator to certain of our subsidiaries:

Rowe Price Entity

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- Oak Hill Advisors (Europe) - OHA (UK)

-OHA Private Credit Advisors - OHA Private Credit Advisors II

All entities above are registered as investment advisers under the Investment Advisers Act of 1940, which imposes substantive regulation around, among other things, fiduciary duties to clients, transactions with clients, effective compliance programs, conflicts of interest, advertising, recordkeeping, reporting, and disclosure requirements.

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- Oak Hill Advisors (Europe)

Rowe Price Entity

Securities and Futures Commission - T.

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A significant number of proprietary and other sponsors’ mutual funds are sold to the public by other investment management firms, broker-dealers, mutual fund companies, banks, and insurance companies.

We compete with brokerage and investment banking firms, insurance companies, banks, mutual fund companies, hedge funds, and other financial institutions and funds in all aspects of our business and in every country in which we offer our advisory services.

Some of these financial institutions have greater resources than we do.

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While we cannot predict how much market share these competitors will gain, we believe there will always be demand for good active management investment products.

In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities and, if appropriate, engage in discussions and negotiations that could lead to the acquisition of a new equity or other financial relationships.

In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities and, if appropriate, engage in discussions and negotiations that could lead to an acquisition transaction or other financial relationships with another entity.

HUMAN CAPITAL.

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Our associates’ knowledge, insight, enthusiasm, and creativity are the reason our clients succeed and our firm excels.

In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in Company diversity and inclusion initiatives, provide opportunities for our associates to learn and grow, provide strong, competitive, and regionally specific benefits and programs that promote the health and wellness of our associates, both personally and financially.

In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in Company diversity and inclusion initiatives, provide opportunities for our associates to learn and grow, and provide strong, competitive, and regionally specific benefits and programs that promote the health and wellness of our associates, both personally and financially.

At December 31, 2022, we employed 7,868 associates, an increase of 4.5% from the 7,529 associates employed at the end of 2021.

We may add temporary and part-time personnel to our staff from time to time to meet periodic and special project demands, primarily for technology and collective investment fund administrative services.

Investing In Our People

We seek to help our clients achieve their long-term investment goals.

In order to do this, we are committed to helping our associates achieve their long-term career goals.

We continuously seek to identify new opportunities for our associates to expand their experience and grow their skills.

As a result of our associates developing these skills we are able to promote from within, with approximately 34% of our open positions being filled by internal applicants, and almost all of our portfolio managers having been promoted from within.

We are committed to the professional growth of our associates through the development of their knowledge, skills and experience, by providing them access to in-person, virtual and online training programs and by offering a generous tuition reimbursement program.

We believe a critical driver of our firm’s future growth is our ability to grow leaders.

Reflecting this, we have held a series of leadership speaker events and offer access to virtual programs focused on leadership development led by professors at leading universities.

Hiring Diverse Talent

Having a diverse and inclusive workforce and providing an equal opportunity to all associates is a business and cultural imperative.

Our diversity, equity, and inclusion initiatives have garnered recognitions, including Pensions & Investments 2021 Best Places to Work in Money Management, and Best Places to work for LGBTQ Equality by the Human Rights Campaign Foundation.

Although we have made progress in our workforce diversity representation, we seek to continuously improve in this area.

Our goal is to increase our hiring and the retention and development of talent from groups that are underrepresented in asset management, including both women and ethnically diverse individuals.

Pursuant to this goal, each year we establish annual corporate diversity and inclusion goals to continue improving our hiring, development, advancement, and retention of diverse talent and our overall diversity representation.

At the end of 2021, women comprised 44.1% of our associates globally.

In addition, at the end of 2021, 29.9% of our U.S.

associates were racially and ethnically diverse.

Furthermore, we are committed to pay equity for employees doing similar work, regardless of gender, race or ethnicity, and we conduct pay equity analyses on a regular basis and adjust our associates pay accordingly.

At December 31, 2021, we employed 7,529 associates, a decrease of 1.9% from the 7,678 associates employed at the end of 2020.

The decrease in the number of associates is directly a result of our expanded relationship with FIS Capital Markets US LLC ("FIS"), which began providing technology development and core operations for our full-service recordkeeping offering in August 2021, and in which approximately 800 T.

Rowe Price operations and technology associates transitioned to FIS on August 1, 2021.

On December 29, 2021, we added 333 associates as a result of the acquisition of OHA.

We may add temporary and part-time personnel to our staff from time to time to meet periodic and special project demands, primarily for technology and mutual fund administrative services.

Our priority is to increase our hiring, retention and development of talent from groups that are underrepresented in asset management;

including both ethnically diverse associates and women.

At the end of 2022, female associates held 32.7% of senior roles globally and ethnically diverse associates held 20.3% of senior roles in the U.S.

For every open role at the firm, our goal is that at least 40% of interviewed candidates will be female and/or ethnically diverse, and during 2022, 66% of the candidates were ethnically diverse and/or female.

In an effort to be more transparent, we publish our EEO data on our website, which can be seen on our website, at https://www.troweprice.com/corporate/us/en/what-sets-us-apart/Diversity-and-inclusion.html.

In addition, during 2022, we published our sustainability report which included transparency into our diversity, equity and inclusion data, a copy of which can be found on our website at https://www.troweprice.com/corporate/us/en/what-sets-us-apart/corporate-responsibility.html.

Set forth below is our diversity information as of December 31, 2022, grouped by division.

The data excludes information about the employees of OHA.

Investments Group Diversity Breakdown

Gender Representation - Global Population Ethnically Diverse - US Population Only

Female Male Total Ethnically Diverse Non- Ethnically Diverse Total

Investments Group 24% 76% 1,000 25% 75% 706

Portfolio Managers 13% 87% 158 13% 87% 112

Analysts 27% 73% 394 37% 63% 269

Traders 26% 74% 96 22% 78% 67

All Other Roles 35% 65% 352 17% 83% 258

Global Distribution and Global Product Group Diversity Breakdown

Gender Representation - Global Population Ethnically Diverse - US Population Only

Female Male Total Ethnically Diverse Non- Ethnically Diverse Total

Global Distribution & Global Product 50% 50% 2,998 32% 68% 2,712

Senior Level* 36% 64% 476 16% 84% 386

All Others 53% 47% 2,522 34% 66% 2,326

Corporate Functions Group Diversity Breakdown

Gender Representation - Global Population Ethnically Diverse - US Population Only

Female Male Total Ethnically Diverse Non- Ethnically Diverse Total

Corporate Functions 45% 55% 3,498 35% 65% 2,849

Senior Level* 44% 55% 447 21% 79% 354

All Others 45% 54% 3,051 37% 63% 2,495

* Senior Level is defined as people leaders and individual contributors with significant business or functional responsibility.

AVAILABLE INFORMATION.

Our Internet address is troweprice.com.

We intend to use our website as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

These disclosures will be included in the Investor Relations section of our website, troweprice.gcs-web.com.

We intend to use our website, troweprice.com, as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

These disclosures will be included in the Investor Relations section of our website, investors.troweprice.com.

We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, available free of charge in this section of our website as soon as reasonably practicable after they have been filed with the SEC.

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• corporate governance information including our governance guidelines, committee charters, senior officer code of ethics and conduct, and other governance-related policies;

• other news and announcements that we may post from time to time that investors might find useful or interesting, including our monthly assets under management disclosure;

• other news and announcements that we may post from time to time that investors might find useful or interesting, including our monthly assets under management disclosure and periodic investor presentations;

• opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.

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Unless otherwise expressly stated, the information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

Specifically, information in our sustainability report is not incorporated by reference into this Form 10-K.

The SEC maintains a website that contains the materials we file with the SEC at www.sec.gov.

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 1. Business