What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-26 compared with 2020-02-27 · 90 added, 72 removed, 158 unchanged (51% of the section changed)

Virtus Investment Partners, Inc.

(the "Company"), a Delaware corporation, commenced operations on November 1, 1995 through a reverse merger of the investment management subsidiary of Phoenix Life Insurance Company ("Phoenix") with Duff & Phelps Corporation.

The Company was a majority-owned subsidiary of Phoenix from 1995 to 2001 and a wholly owned subsidiary from 2001 until 2008.

On December 31, 2008, the Company became an independent publicly traded company as a result of Phoenix's distribution of 100% of Virtus common stock to Phoenix stockholders in a spin-off transaction.

(the "Company"), a Delaware corporation, commenced operations on November 1, 1995 and became an independent publicly traded company on December 31, 2008 as a result of the distribution by Phoenix Life Insurance Company ("Phoenix"), the Company's former parent, of 100% of Virtus common stock to Phoenix stockholders in a spin-off transaction.

We provide investment management and related services to individuals and institutions.

3 unchanged sentences

We offer investment strategies for individual and institutional investors in different product structures and through multiple distribution channels.

Our investment strategies are available in a diverse range of styles and disciplines and are managed by a collection of differentiated investment managers.

Our investment strategies are available in a diverse range of styles and disciplines, managed by a collection of differentiated investment managers.

We have offerings in various asset classes (equity, fixed income and alternative), geographies (domestic, international and emerging) market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental, quantitative and thematic).

Our retail products include U.S.

1940 Act mutual funds, Undertaking for Collective Investment in Transferable Securities ("UCITS" or "offshore funds" and collectively with U.S.

1940 Act mutual funds, "open-end funds"), exchange traded funds ("ETFs"), closed-end funds (collectively with open-end funds and ETFs, "funds") and retail separate accounts.

Our retail products include open-end funds and exchange traded funds ("ETFs") as well as closed-end funds and retail separate accounts.

Our institutional products are offered through separate accounts and pooled or commingled structures to a variety of institutional clients.

2 unchanged sentences

We provide investment management services through our affiliated investment managers who are registered under the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act").

The investment managers are responsible for portfolio management activities for our retail and institutional products operating under advisory or subadvisory agreements.

The investment managers are responsible for portfolio management activities for our retail, institutional and structured products operating under advisory, subadvisory or collateral management agreements.

We provide our affiliated managers with distribution, operational and administrative support, thereby allowing each manager to focus primarily on investment management.

We also engage select unaffiliated managers to sub-advise certain of our open-end funds and ETFs.

We also use the investment management services of select unaffiliated managers to sub-advise certain of our open-end funds and ETFs.

We monitor our managers' services by assessing their performance, style and consistency and the discipline with which they apply their investment process.

Our affiliated investment managers and their respective assets under management, products and strategies as of December 31, 2020 were as follows:

Manager Products Strategies Assets

(in billions)

Ceredex Value Advisors

Open-end funds and institutional accounts

Value-oriented strategies;

Ceredex Value Advisors Open-end funds and institutional accounts Value Equity Strategies

large-, mid- and small-cap domestic equities

Duff & Phelps Investment Management

Closed- and open-end funds and institutional accounts

Equity income strategies;

global listed infrastructure, domestic, international real estate and energy, and international equities

Kayne Anderson Rudnick Investment Management

Open-end funds, institutional accounts, intermediary-sold managed accounts and private client accounts

Quality-oriented equity strategies in

Duff & Phelps Investment Management Closed- and open-end funds and institutional accounts Income Focused Strategies

global listed infrastructure, domestic, international real estate and energy

Kayne Anderson Rudnick Investment Management Open-end funds, institutional accounts, intermediary-sold managed accounts and private client accounts Quality-Oriented Equity Strategies

small- to large-cap, including domestic global, international and emerging market strategies

Newfleet Asset Management

Closed- and open-end funds, ETFs, institutional, intermediary-sold managed accounts, private client accounts and structured products

Fixed income strategies;

Newfleet Asset Management Closed- and open-end funds, ETFs, institutional, private client accounts and structured products Multi-Sector Fixed Income Strategies

multi-sector, enhanced core strategies and dedicated sector strategies such as bank loans and high yield

Rampart Investment Management Company

Closed- and open-end funds, institutional accounts and intermediary-sold managed accounts

Quantitative and option related strategies

Seix Investment Advisors

Open-end funds, institutional, ETFs and structured products

High yield, leveraged loans, investment grade taxable, tax-exempt and multi-sector strategies

Silvant Capital Management

Open-end funds and institutional

Growth equity strategies, including large-cap and small-cap

Sustainable Growth Advisers

Institutional and private client accounts and open-end funds

Seix Investment Advisors Open-end funds, institutional, ETFs and structured products Investment Grade and Leveraged Finance Fixed Income Strategies

high yield, bank loans, investment grade taxable, non-taxable and multi-sector strategies

Silvant Capital Management Open-end funds and institutional Growth Equity Strategies

including large-cap and small-cap

Sustainable Growth Advisers Institutional and private client accounts and open-end funds Global Growth Equity Strategies

large-cap growth strategies, including domestic, global, international and emerging markets

As of December 31, 2019 , $9.9 billion in assets under management were managed by unaffiliated managers.

As of December 31, 2020, $10.5 billion in assets under management were managed by unaffiliated managers including an unaffiliated manager in which the Company holds a minority interest.

Our Investment Products

2 unchanged sentences

December 31, 2020

(in billions)

Fund assets (in billions)

Open-end funds $ 49.5

7 unchanged sentences

Total Assets Under Management $ 132.2

Represents assets under management in liquidity strategies, including certain open-end funds and institutional accounts.

(1) Represents assets under management in liquidity strategies, including in certain open-end funds and institutional accounts.

Open-End Funds

Our open-end mutual funds are offered in a variety of asset classes (domestic and international equity, taxable and non-taxable fixed income, and alternative investments), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental, quantitative and thematic).

Our Ireland domiciled off-shore funds are offered in select investment strategies to non-U.S.

Our offshore funds are offered in select investment strategies to non-U.S.

Summary information about our open-end funds as of December 31, 2020 were as follows:

Number of Funds Offered

Asset Class Number of Funds Offered Total Assets Advisory Fee

(in millions) (%)

Domestic Equity 20 $ 23,774 2.15-0.40

Fixed Income 22 11,317 1.85-0.21

International/Global Equity 15 12,054 1.20-0.65

Asset Allocation

Alternatives 9 1,303 1.30-0.55

Multi-Asset 2 1,073 0.55-0.45

Total Open-End Funds 68 $ 49,521

6 unchanged sentences

We managed the following closed-end funds as of December 31, 2020, each of which is traded on the New York Stock Exchange:

Fund Type/Name

Fund Type/Name Total Assets Advisory

(in millions) (%)

Asset Allocation

DNP Select Income Fund Inc.

$ 3,807 0.60-0.50 (1)

Virtus Total Return Fund Inc.

10 unchanged sentences

Our ETFs are offered in a range of actively managed and index-based investment capabilities across multiple asset classes.

We managed the following ETFs at December 31, 2019 :

We managed the following ETFs as of December 31, 2020:

ETF Name Total Assets Advisory

(in millions) (%)

Virtus InfraCap U.S.

Preferred Stock ETF $ 225 0.140

Virtus Real Asset Income ETF 152 0.033

InfraCap MLP ETF 147 0.075

Virtus Private Credit Strategy ETF

InfraCap REIT Preferred ETF 59 0.075

Virtus InfraCap U.S.

Preferred Stock ETF

Virtus Reaves Utilities ETF 30 0.490

Virtus Terranova U.S.

Quality Momentum ETF 92 0.290

Virtus LifeSci Biotech Clinical Trials ETF 47 0.450

Reaves Utilities ETF

Virtus LifeSci Biotech Products ETF 29 0.450

Virtus Glovista Emerging Markets ETF

Virtus WMC Global Factor Opportunities ETF

Virtus WMC International Dividend ETF 5 0.280

Virtus Newfleet Multi-Sector Bond ETF 18 0.700

1 unchanged sentence

Virtus Seix Senior Loan ETF 6 0.570

Virtus Private Credit Strategy ETF 21 0.467

Total ETFs $ 837

(1) Percentage of average daily net assets of each fund.

4 unchanged sentences

Summary information about our intermediary-sold managed accounts as of December 31, 2020 were as follows:

Asset Class Total Assets

(in millions)

Domestic equity $ 21,489

International equity 329

Investment grade 244

Leveraged finance 1,789

Alternative 1

Total Intermediary-Sold Managed Accounts $ 23,852

Private Client Accounts

Private client accounts are investment accounts offered by our affiliate, Kayne Anderson Rudnick ("Kayne"), directly to individual investors.

Kayne has advisers who provide investment advisory services employing both affiliated and unaffiliated investment managers.

Private client accounts are investment accounts offered by certain affiliates directly to individual investors.

Services provided include investment and wealth advisory services employing both affiliated and unaffiliated investment managers and select third-party business partners.

Summary information about our private client accounts as of December 31, 2020 was as follows:

Asset Class Total Assets

(in millions)

Multi-Asset $ 5,750

Fixed Income 103

Total Private Client Accounts $ 5,899

3 unchanged sentences

Summary information about our institutional accounts as of December 31, 2020 was as follows:

Asset Class Total Assets

(in millions)

Domestic equity $ 19,664

International equity 8,738

Investment grade 6,655

Leveraged finance 2,288

Alternative 2,333

Multi-Asset 945

Total Institutional Accounts $ 40,623

2 unchanged sentences

We managed the following structured products as of December 31, 2020:

Fund Name Inception Total Assets

(in millions)

2 unchanged sentences

Mountain View CLO 2016-1 Ltd.

Mountain View CLO X Ltd.

Mountain View CLO XIV Ltd.

Mountain View CLO XV Ltd.

Mountain View CLO 2017-2 Ltd.

Mountain View CLO XIV Ltd.

Mountain View CLO 2013-1 Ltd.

Mountain View CLO X Ltd.

Newfleet CLO 2016-1 Ltd.

15 unchanged sentences

Shareholder service fees 17,881 17,875 19,111

Prior period amounts have not been adjusted and are reported in accordance with historical accounting under Accounting Standards Codification 605, Revenue Recognition.

(2) Includes ETFs and liquidity strategies.

Total $ 564,801 $ 521,361 $ 500,635

Investment Management Fees

We provide investment management services pursuant to investment management agreements through our affiliated investment advisers (each an "Adviser").

With respect to our funds, the Adviser provides overall investment management services, pursuant to agreements with the funds that must be approved annually by the fund’s board of directors and that may be terminated without penalty, or automatically in certain situations, such as a "change in control" of the Adviser.

With respect to our funds, the Adviser provides overall investment management services, pursuant to agreements with the funds.

We earn fees based on each fund's average daily or weekly net assets with most fee schedules providing for rate declines or "breakpoints" as asset levels increase to certain thresholds.

For funds managed by subadvisers, the day-to-day investment management of the fund’s portfolio is performed by the subadviser, which receives a management fee based on the percentage of average daily net assets in the funds they subadvise or a percentage of the Adviser’s management fee.

For funds managed by subadvisers, the day-to-day investment management of the fund's portfolio is performed by the subadviser, which receives a management fee based on a percentage of the Adviser's management fee.

Each fund bears all expenses associated with its operations.

In some cases, to the extent total fund expenses exceed a specified percentage of a fund's average net assets, the Adviser has agreed to reimburse the funds for such excess expenses.

For retail separate accounts and institutional accounts, investment management fees are negotiated and based primarily on portfolio size and complexity, individual client requests and capacity in investment strategy, as appropriate.

In certain instances, institutional fees may include performance related fees that are based on relative investment returns.

Generally, we are entitled to performance fees only if the returns on the related portfolios exceed agreed upon periodic or cumulative return targets.

In certain instances, institutional fees may include performance related fees.

Generally, we are entitled to performance related fees only if the returns on the portfolios exceed agreed upon periodic or cumulative return targets, primarily benchmark indices.

Fees for structured finance products, for which we act as the collateral manager, consist of senior, subordinated and, in certain instances, incentive management fees.

2 unchanged sentences

Administration Fees

We provide various administrative fund services to our open-end funds and certain of our closed-end funds.

We provide various administrative fund services to our open-end mutual funds, ETFs and certain of our closed-end funds.

We earn fees based on each fund's average daily or weekly net assets.

10 unchanged sentences

Our sales efforts are supported by regional sales professionals, a national account relationship group and separate teams for ETFs and the retirement and insurance channels.

Our retail separate accounts are distributed through financial intermediaries and directly to private clients by teams at an affiliated manager.

Our retail separate accounts are distributed through financial intermediaries and directly to private clients by teams at our affiliated managers.

Our institutional services are marketed through relationships with consultants as well as directly to clients.

2 unchanged sentences

We operate a broker-dealer that is registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is a member of the Financial Industry Regulatory Authority ("FINRA").

Our broker-dealer serves as principal underwriter and distributor of our open-end mutual funds and ETFs under sales agreements with unaffiliated financial intermediaries, and also markets advisory services to sponsors of retail separate accounts.

Our broker-dealer serves as the principal underwriter and distributor of our open-end mutual funds and ETFs under sales agreements with unaffiliated financial intermediaries, and also market advisory services to sponsors of retail separate accounts.

Our broker-dealer is subject to the net capital rule of the Securities and Exchange Commission (the "SEC"), which is designed to enforce minimum standards regarding the general financial condition and liquidity of broker-dealers.

1 unchanged sentence

We face significant competition from a wide variety of financial institutions, including other investment management companies, as well as from proprietary products offered by our distribution partners such as banks, broker-dealers and financial planning firms.

Competition in our businesses is based on several factors, including investment performance, fees charged, access to distribution channels, and service to financial advisers and their clients.

Competition in our businesses is based on several factors, including investment performance, fees charged, access to distribution channels, and service to financial advisors and their clients.

Our competitors, many of which are larger than us, often offer similar products and use similar distribution sources, and may also offer less expensive products, have greater access to key distribution channels and have greater resources than we do.

1 unchanged sentence

We are subject to regulation by the SEC, FINRA and other federal and state agencies and self-regulatory organizations.

Each affiliated manager and unaffiliated subadviser is registered with the SEC under the Investment Advisers Act.

Each affiliated investment manager and unaffiliated subadviser is registered with the SEC under the Investment Advisers Act.

Each open-end mutual fund, closed-end fund and ETF is registered with the SEC under the Investment Company Act of 1940, as amended (the "Investment Company Act").

Our off-shore funds are subject to regulation by the Central Bank of Ireland (the "CBI"), and the funds and each investment manager and sub-investment manager are also registered with the CBI.

Our offshore funds are subject to regulation by the Central Bank of Ireland (the "CBI"), and the funds and each investment manager and sub-investment manager are also registered with the CBI.

The financial services industry is highly regulated, and failure to comply with related laws and regulations can result in the revocation of registrations, the imposition of censures or fines and the suspension or expulsion of a firm and/or its employees from the industry.

1 unchanged sentence

Virgin Islands.

Our off-shore funds are sold through financial intermediaries to investors who are not citizens or residents of the United States.

Our offshore funds are sold to both retail investors who are not citizens or residents of the United States or non-U.S.

institutional clients.

Most aspects of our investment management business, including the business of the unaffiliated subadvisers, are subject to various U.S.

1 unchanged sentence

Our officers, directors and employees may, from time to time, own securities that are also held by one or more of our funds.

We have adopted a Code of Ethics pursuant to the provisions of the Investment Company Act and the Investment Advisers Act that requires the disclosure of personal securities holdings and trading activity by all employees on a quarterly and annual basis.

We have adopted a Code of Ethics pursuant to the provisions of the Investment Company Act and the Investment Advisers Act that require the disclosure of personal securities holdings and trading activity by all employees on a quarterly and annual basis.

Employees with investment discretion or access to investment decisions are subject to additional restrictions with respect to the pre-clearance of the purchase or sale of securities over which they have investment discretion or beneficial interest.

Our Code of Ethics also imposes restrictions with respect to personal transactions in securities that are held, recently

sold, or contemplated for purchase by our mutual funds, and certain transactions are restricted so as to avoid the possibility of improper use of information relating to the management of client accounts.

Our Employees

As of December 31, 2019 , we had 578 full-time equivalent employees.

None of our employees are represented by a union.

Our Code of Ethics also imposes restrictions with respect to personal transactions in securities that are held, recently sold, or contemplated for purchase by our mutual funds, and certain transactions are restricted so as to avoid the possibility of improper use of information relating to the management of client accounts.

Human Capital

We believe our value as a company derives from the talents and diversity of our employees.

We foster a dynamic, entrepreneurial, and collaborative environment where talented people excel and are recognized and rewarded for their contributions.

We are committed to creating and maintaining an equitable, welcoming and inclusive environment that promotes respect for every employee.

As of December 31, 2020, we employed 581 employees and operated offices in seven states.

We strive to attract and retain talented individuals by creating an environment of excellence and opportunity that serves as a foundation for all employees to reach their potential and make meaningful contributions to the organization.

▪ We engage with employees in all areas of the organization to raise the awareness of, and advance, our diversity and inclusion efforts and ensure the greatest alignment of resources with business priorities.

▪ We offer career enhancement opportunities to maximize each employee's potential and develop leaders throughout the organization.

▪ We provide an education assistance program with tuition reimbursement for employees who wish to continue their education to secure increased responsibility and growth within their careers.

We have competitive salaries and offer a comprehensive suite of benefits, including programs that support wellness, financial security, and professional development.

▪ We regularly assess and benchmark our compensation and benefit practices and conduct internal and external pay comparisons to assist us in ensuring that employees are compensated fairly, equitably, and competitively.

▪ We offer benefits that promote financial and personal security including comprehensive insurance coverage, matching 401(k) employee contributions, an employee stock purchase plan, and employee reimbursement of work-related expenses.

▪ Our wellness programs include health screenings and wellness earned premium rebates, as well as paid time off for vacation, illness, bereavement, parental and family care leave, and volunteer activities.

We depend upon our key personnel to manage our business, including our senior executives, portfolio managers, securities analysts, investment advisers, sales personnel and other professionals.

The retention of our key investment personnel is material to the management of our business.

The departure of our key investment personnel could cause us to lose certain client accounts, which could adversely affect our business.

Available Information

5 unchanged sentences

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

What changed 10-K

Item 1. Business