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Item 1A. Risk Factors

2023-02-27 compared with 2022-02-25 · 118 added, 144 removed, 126 unchanged (68% of the section changed)

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RISKS RELATED TO OUR INDUSTRY, BUSINESS AND OPERATIONS

We earn substantially all of our revenues based on assets under management, which fluctuate based on many factors, including market conditions, investment performance and client withdrawals, and any reduction would reduce our revenues and profitability.

We earn substantially all of our revenues based on assets under management that fluctuate based on many factors, and any reduction would negatively impact our revenues and profitability.

The majority of our revenues are generated from asset-based fees from investment management products and services to individuals and institutions.

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Assets under management could decline due to a variety of factors including, but not limited to, the following:

▪ General domestic and global economic and political conditions.

▪ General domestic and global economic, political and public health conditions.

Capital, equity and credit markets can experience substantial volatility.

Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, commodity prices, currency exchange rates and controls, national and international political circumstances (including wars, terrorist acts, pandemics, civil unrest and security operations) and other conditions may impact the capital, equity and credit markets which may impact our assets under management.

Employment rates, economic weakness and budgetary challenges in parts of the world, uncertainty regarding international trade policies, regional turmoil in the Middle East, concern over prospects in China and emerging markets, growing debt for certain countries, and uncertainty about the consequences of governments withdrawing monetary stimulus all indicate that economic and political conditions remain unpredictable.

If the security markets decline or experience volatility, our assets under management and our revenues could be negatively impacted.

Changes in currency exchange rates, such as an increase in the value of the U.S.

dollar relative to non-U.S.

currencies, could result in a decrease in the U.S.

dollar value of assets under management that are denominated in non-U.S.

In addition, diminishing investor confidence in the markets and/or adverse market conditions could result in a decrease in investor risk tolerance.

Such a decrease could prompt investors to reduce their rate of investment or to fully withdraw from markets, which could reduce our overall assets under management and have an adverse effect on our

revenues, earnings and growth prospects.

The volatility in the markets in the past has highlighted the interconnection of the global markets and demonstrated how the deteriorating financial condition of one institution may materially adversely impact the performance of other institutions.

Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, commodity prices, currency exchange rates, national and international political circumstances and conflicts, public health issues and other conditions may impact the capital, equity and credit markets.

Employment rates, economic weakness and budgetary challenges in parts of the world, uncertainty regarding governmental regulations and international trade policies, conflicts such as in Ukraine, concern over prospects in China and emerging markets, and growing debt for certain countries all indicate that economic and political conditions remain

unpredictable.

The occurrence of public health issues such as a major epidemic or pandemic that affect public health and public perception of health risk, as well as local, state and/or national government restrictive measures implemented to control such issues, could adversely affect the global financial markets, our employees and the systems we rely on.

For example, the outbreak and spread of contagious diseases, such as the COVID-19 pandemic in early 2020, resulted in a widespread global public health crisis, which had, and may continue to have, negative impacts on global financial markets.

Any of the conditions listed herein, among others, may impact our assets under management.

The volatility in the markets in the past has highlighted the interconnection of the global economies and markets and has demonstrated how the deteriorating financial condition of one institution may adversely impact the performance of other institutions.

Our assets under management have exposure to many different industries and counterparties and may be exposed to credit, operational or other risk due to the default by a counterparty or client or in the event of a market failure or disruption.

In the event of extreme circumstances, including economic, political or business crises, such as a widespread systemic failure in the global financial system or failures of firms that have significant obligations as counterparties, we may suffer significant declines in assets under management and severe liquidity or valuation issues.

▪ Price declines in specific securities, market segments or geographic areas where those assets are invested.

Funds and portfolios that we manage that are focused on certain geographic markets and industry sectors are particularly vulnerable to political, social and economic events in those markets and sectors.

Negative, uncertain or diminishing investor confidence in the markets and/or adverse market conditions could result in a decrease in investor risk tolerance.

Such a decrease could prompt investors to reduce their rate of investment or to partially or fully withdraw from markets, which could reduce our overall assets under management and have an adverse effect on our revenues, earnings and growth prospects.

In the event of extreme circumstances, including economic, political or business or health crises, such as a widespread systemic failure in the global financial system, failures of firms that have significant obligations as counterparties, political conflicts or global pandemics, we may suffer significant declines in assets under management and severe liquidity or valuation issues.

▪ Price declines in individual securities, market segments or geographic areas.

Portfolios that we manage that are focused on certain geographic markets or industry sectors are particularly vulnerable to political, social and economic events in those markets and sectors.

If those markets or industries decline or experience volatility, this could have a negative impact on our assets under management and our revenues.

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financial markets.

Liquidity in such markets may be adversely impacted by factors including political or economic events, government policies, expropriation, volume trading limits by foreign investors, social or civil unrest, etc.

In addition, certain industry sectors can experience significant volatility, such as the technology or oil sector.

Liquidity or values in such markets or sectors may be adversely impacted by factors including political or economic events, government policies, expropriation, volume trading limits by foreign investors, social or civil unrest, etc.

These factors may negatively impact the market value of a security or our ability to dispose of it.

▪ Any real or perceived negative absolute or relative performance.

▪ Real or perceived negative absolute or relative performance.

Sales and redemptions of our investment strategies can be affected by investment performance relative to established benchmarks or other competing investment strategies.

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These assessments often influence the investment decisions of clients.

If the performance or assessment of our investment strategies is seen as underperforming relative to peers, it could result in an increase in the withdrawal of assets by existing clients and the inability to attract additional investments from new and existing clients.

Certain of our investment strategies have capacity constraints as there is a limit to the number of securities available for the strategy to operate effectively.

In those instances, we may choose to limit access to new or existing investors.

▪ Changes in interest rates.

Increases in interest rates from their historically low levels may adversely affect the net asset values of our assets under management.

Conversely, decreases in interest rates could lead to outflows in fixed income assets that we manage as investors seek higher yields.

We may engage in significant transactions that may not achieve the expected benefits or could expose us to additional or increased risks.

We have executed several inorganic transactions over the past years and we regularly review and evaluate potential transactions, including acquisitions, consolidations, joint ventures, strategic partnerships, or similar transactions, some of which could be significant.

In recent years, we have completed a number of acquisitions and strategic alliances that have led to a significant increase in our assets under management and expanded our offering of products and services.

We cannot provide assurance that we will continue to be successful in negotiation of the required agreements, closing transactions after signing such agreements, or achieving expected financial benefits, including such things as revenue or cost synergies.

If the performance of our investment strategies is perceived to be underperforming relative to peers, it could result in increased withdrawals of assets by existing clients and the inability to attract additional investments from new and existing clients.

We may engage in significant transactions that may not achieve the anticipated benefits or could expose us to additional or increased risks.

We have executed several inorganic transactions over the past years and we regularly evaluate potential transactions, including acquisitions, consolidations, joint ventures, strategic partnerships, or similar transactions, some of which could be significant.

Our past acquisitions and strategic transactions have led to a significant increase in our assets under management and an expansion of our product and service offerings.

We cannot provide assurance that we will continue to be successful in closing on transactions or achieving anticipated financial benefits, including such things as revenue or cost synergies.

Any transaction may also involve a number of other risks, including additional demands on our staff, unanticipated problems regarding integration of operating facilities, technologies and new employees, and the existence of liabilities or contingencies not disclosed to, or otherwise unknown by, us prior to closing a transaction.

In addition, any business we acquire may underperform relative to expectations or may lose customers or employees.

Our business, results of operations and financial condition could be negatively affected by the effects of the ongoing COVID-19 pandemic and associated global economic disruption and uncertainty.

The onset of the COVID-19 pandemic in early 2020 resulted in a widespread global public health crisis, which had, and may continue to have, negative impacts on global financial markets, concerns for and restrictions on our personnel (including health concerns, quarantines, shelter-in-place orders and restrictions on travel), and increased privacy and cybersecurity risks.

Although the markets have generally recovered, the introduction of new, potentially more transmissible or severe variants of COVID-19 may test the efficacy of such vaccines and otherwise have resulted in, and may continue to result in, the implementation of continued restrictions across the world, including mandatory business shut-downs, travel restrictions, reduced business operations and social distancing requirements.

In addition, the pandemic continues to disrupt global supply

chains, has caused labor shortages and has contributed to broader inflationary pressures.

Accordingly, the broader implications of the pandemic on our results of operations and overall financial performance remain uncertain.

Currently, a large number of our employees are working remotely from home in an effort to reduce the spread of the virus and maintain the health and safety of our employees.

While our work from home efforts have been successful to date, operating remotely for an extended period could result in operational challenges, strain our technology resources and/or expose us to an increased number of cybersecurity threats.

A decline in the health and safety of our employees, including key employees, or material disruptions to their ability to work remotely, including power or Internet outages or electronic systems failures, could negatively affect our ability to operate our business normally and have a material adverse impact on our results of operations or financial condition.

Additionally, many of the key service providers and vendors upon which we rely also have transitioned to remote work environments pursuant to business continuity plans.

Third-party use of a remote working environment will continue to subject both us and our third-party intermediaries, service providers and key vendors to risk of operational issues and interruptions as well as to a heightened risk of cyberattacks or other privacy or data security incidents.

While, to date, the effects of the pandemic have not had a material negative impact on the services they provide to us, or, we believe, their business operations or service levels, to the extent that the COVID-19 virus continues to spread and affect the employee base or operations of our service providers, disruptions in or the inability to provide services to us could negatively impact our business operations.

Our investment advisory agreements are subject to renegotiation or termination on short notice, which could negatively impact our business.

Our clients include our sponsored fund investors, that are represented by boards of trustees or directors (the "boards"), managed account program sponsors, private clients and institutional clients.

Our clients include our sponsored fund investors, represented by boards of trustees or directors (the "boards"), managed account program sponsors, individual private clients, and institutional clients.

Our investment management agreements with these clients may be terminated on short notice and without penalty.

As a result, there would be little impediment for these clients or sponsors to terminate our agreements.

As a result, there would be little impediment for these clients to terminate our agreements.

Our clients may renegotiate their investment contracts, or reduce the assets we manage for them, due to a number of reasons including, but not limited to:

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If an assignment were to occur, we cannot be certain that the funds' boards and shareholders would approve a new investment advisory agreement.

In addition, investment advisory agreements for separate accounts we manage may not be assigned without the consent of the client.

In addition, investment advisory agreements for the separate accounts we manage may not be assigned without the consent of the client.

If an assignment occurs, we cannot be certain that the Company will be able to obtain the necessary approvals or client consents.

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Any damage to our reputation could impede our ability to attract and retain clients and key personnel, adversely impact relationships with clients, third-party distributors and other business partners, and lead to a reduction in the amount of our assets under management, any of which could adversely affect our results of operations and financial condition.

Our debt agreements contain covenants, required principal repayments and other provisions that could adversely affect our financial position or results of operations.

We incur indebtedness for a variety of business reasons, including in relation to financing acquisitions.

Our debt agreements contain covenants, required principal repayments and other provisions that could adversely affect our financial condition or results of operations.

We incur indebtedness for a variety of business reasons, including in relation to financing acquisitions and transactions.

The indebtedness we incur can take many forms including, but not limited to, term loans or revolving lines of credit that customarily contain covenants.

At December 31, 2022, the Company had $261.6 million of total debt outstanding under its credit agreement, excluding debt of consolidated investment products ("CIP"), and had no borrowings outstanding under its $175.0 million revolving credit facility.

Under our credit agreement, we are required to use a portion of our cash flow to service interest and make required annual principal payments, which will restrict our cash flow available to pursue business growth opportunities.

The credit agreement also contains covenants that limit our ability to return capital to shareholders.

In addition, our indebtedness may make it more difficult for us to withstand or respond to adverse or changing business, regulatory and economic conditions.

The credit agreement also contains covenants that may limit our ability to return capital to shareholders.

We cannot provide assurances that at all times in the future we will satisfy all such covenants or obtain any required waiver or amendment, in which event all indebtedness could become immediately due.

Any or all of the above factors could materially adversely affect our financial position or results of operations.

Any or all of the above factors could adversely affect our financial condition or results of operations.

We may need to obtain additional capital in the future that may not be available to us in sufficient amounts or on acceptable terms, which could have an adverse impact on our business.

Our ability to meet our future cash needs is dependent upon our ability to generate or have short-term access to cash.

Although we have generated sufficient cash in the past, we may not do so in the future.

The Company had unused capacity under its revolving credit facility of $175.0 million as of December 31, 2022.

Our ability to access capital markets efficiently depends on a number of factors, including the state of credit and equity markets, interest rates and credit spreads.

At December 31, 2022, we had $261.6 million in debt outstanding, excluding the notes payable of our CIP for which risk of loss to the Company is limited to our $78.9 million investment in such products.

See Note 21 of our consolidated financial statements for additional information on the notes payable of the CIP.

We may need to raise capital to fund new business initiatives in the future, and financing may not be available to us in sufficient amounts, on acceptable terms, or at all.

If we are unable to access sufficient capital on acceptable terms, our business could be adversely impacted.

Our business relies on the ability to attract and retain key employees, and the loss of such employees could negatively affect our financial performance.

The success of our business is dependent to a large extent on our ability to attract and retain key employees, such as senior executives, portfolio managers, securities analysts and sales personnel.

Competition in the job market for these professionals is generally intense, and compensation levels in the industry are highly competitive.

There is significant competition in the job market for these professionals and compensation levels in the industry are highly competitive.

Our industry is also characterized by the movement of investment professionals among different firms.

If we are unable to continue to attract and retain key employees, or if compensation costs required to attract and retain key employees increase, our performance, including our competitive position, could be materially adversely affected.

Additionally, we utilize equity awards as part of our compensation plans and as a means for recruiting and retaining key employees.

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In certain circumstances, the departure of key investment personnel could cause higher redemption rates in certain strategies or the loss of certain client accounts.

Any inability to retain key employees, attract qualified employees or replace key employees in a timely manner could lead to a reduction in the amount of our assets under management, which would have a material adverse effect on our revenues and profitability.

Any inability to retain key employees, attract qualified employees or replace key employees in a timely manner could lead to a reduction in the amount of our assets under management, which would have an adverse effect on our revenues and profitability.

In addition, there could be additional costs to replace, retain or attract new talent that could result in a decrease in our profitability and have an adverse impact on our results of operations and financial condition.

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

Our competitors, many of which are larger than we are, often offer similar products, use the same distribution sources, offer less expensive products, maintain greater access to key distribution channels, and have greater resources, geographic footprints and name recognition than we do.

Our competitors, many of which are larger, often offer similar products, use the same distribution sources, offer less expensive products, maintain greater access to key distribution channels, and have greater resources, geographic footprints and name recognition.

Additionally, certain products and asset classes that we do not currently offer, such as passive or index-based products, are popular with investors.

Existing clients may withdraw their assets in order to invest in these products, and we may be unable to attract additional investments from existing and new clients, which would lead to a decline in our assets under management and market share.

Our profits are highly dependent on the fees charged for our products and services.

In recent years, there has been a trend in certain segments of our markets toward lower fees and lower-fee products, such as passive products.

Our profits are highly dependent on the fees we earn for our products and services.

Competition could cause us to reduce the fees that we charge.

In order to maintain appropriate fee levels in a competitive environment, we must provide clients with investment products and services they view as appropriate in relation to the fees charged.

If our clients, including our fund boards, were to view our fees as being high relative to the market or the returns provided by our investment products, we may choose, or be required, to reduce our fee levels or we may experience significant redemptions in our assets under management, which could have an adverse impact on our results of operations and financial condition.

We utilize unaffiliated firms to provide investment management services, and any matters that adversely impact them, or any change in our relationships with them, could lead to a reduction in assets under management, which would adversely affect our revenues and profitability.

We utilize unaffiliated subadvisers as investment managers for certain of our retail products, and we have licensing arrangements with unaffiliated data providers.

If our clients, including our fund boards, were to view our fees as being inappropriately high relative to the market or the returns generated by our investment products, we may choose, or be required, to reduce our fee levels, or we may experience significant redemptions in our assets under management, which could have an adverse impact on our results of operations and financial condition.

We utilize unaffiliated firms to provide investment management services and any matters that adversely impact them or any change in our relationships with them could adversely affect our revenues and profitability.

We utilize unaffiliated subadvisers as investment managers for certain of our retail funds.

Because we typically have no ownership interests in these unaffiliated firms, we do not control their business activities.

Problems stemming from the business activities of these unaffiliated firms may negatively impact or disrupt their operations or expose them to disciplinary action or reputational harm.

Furthermore, any such

matters at these unaffiliated firms may have an adverse impact on our business or reputation or expose us to regulatory scrutiny, including with respect to our oversight of such firms.

Furthermore, any such matters at these unaffiliated firms may have an adverse impact on our business or reputation or expose us to regulatory scrutiny, including with respect to our oversight of such firms.

We periodically negotiate provisions and renewals of these relationships, and we cannot provide assurance that such terms will remain acceptable to us or the unaffiliated firms.

These relationships can also be terminated upon short notice without penalty.

In addition, the departure of key employees at unaffiliated subadviser firms could cause higher redemption rates for certain assets under management and/or the loss of certain client accounts.

In addition, the departure of key employees at unaffiliated subadvisers could cause higher redemption rates for certain assets under management.

An interruption or termination of unaffiliated firm relationships could affect our ability to market our products and result in a reduction in assets under management, which would have an adverse impact on our results of operations and financial condition.

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and registered investment advisers.

Our success is highly dependent on access to these various distribution systems.

We are highly dependent on access to these various distribution systems to maintain and raise assets under management.

These distributors are generally not contractually required to distribute our products and typically offer their clients various investment products and services, including proprietary products and services, in addition to, and in competition with, our products and services.

While we compensate these intermediaries for selling our products and services pursuant to contractual agreements, we may not be able to retain access to these channels at all or at similar pricing.

Increasing competition for these distribution channels could cause our distribution costs to rise, which could have a material adverse effect on our business, revenues and profitability.

While we compensate these intermediaries pursuant to contractual agreements, we may not be able to retain access to these channels at all or at similar pricing.

Increasing competition for these distribution channels could cause our distribution costs to rise, which could have an adverse effect on our business,

revenues and profitability.

To the extent that existing or future intermediaries prefer to do business with our competitors, the sales of our products as well as our market share, revenues and profitability could decline.

We and our third-party service providers rely on numerous technology systems, and any temporary business interruption, security breach or system failure could negatively impact our business and profitability.

We and our third-party service providers rely on numerous technology systems and any business interruption, security breach, or system failure could negatively impact our business and profitability.

Our technology systems, and those of third-party service providers, are critical to our operations.

The ability to consistently and reliably obtain accurate securities pricing information, process client portfolio and fund shareholder transactions, and provide reports and other customer service to fund shareholders and clients in accounts managed by us is an essential part of our business.

Any delays or inaccuracies in obtaining pricing information, processing such transactions or reports, other breaches and errors, and any inadequacies in other customer service could result in reimbursement obligations or other liabilities or alienate customers and potentially give rise to claims against us.

Any delays or inaccuracies in obtaining pricing information, processing such transactions or reports, other breaches and errors, and any inadequacies in other customer service could result in reimbursement obligations or other liabilities or alienate clients and potentially give rise to claims against us.

Our business is highly dependent on third-party service providers' information systems, including for our ability to obtain prompt and accurate securities pricing information and to process transactions and reports.

Any failure or interruption of those systems, whether resulting from technology or infrastructure breakdowns, defects or external causes such as fire, natural disaster, computer viruses, acts of terrorism or power disruptions, could result in financial loss, negatively impact our reputation and negatively affect our ability to do business.

Although we, and our third-party service providers, have disaster recovery plans in place, we may nonetheless experience interruptions if a natural or man-made disaster or prolonged power outage were to occur, which could have an adverse impact on our results of operations and financial condition.

In addition, like many companies, our computer systems are regularly, and expected to continue to be, the target of computer viruses or other malicious codes, unauthorized access, cyber-attacks or other computer-related penetrations.

The sophistication of cyber threats continues to increase (including through the use of "ransomware" and phishing attacks), and any controls we put in place and preventative actions we take to reduce the risk of cyber incidents and protect our information systems may be insufficient to detect or prevent unauthorized access, cyber-attacks or other security breaches to our computer systems or those of third parties with whom we do business.

Our or our third-party service providers' systems may also be affected by, or fail as a result of, catastrophic events, such as fires, floods, hurricanes and tornadoes.

A breach of our technology systems, or of those of third parties with whom we do business, through cyber-attacks or failure to manage and sufficiently secure our technology environment could result in interruptions or malfunctions in the operations of our business, loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by a breach or to recover access to our systems, additional costs to mitigate against future incidents, and litigation costs resulting from an incident.

Any failure or interruption of those systems, whether resulting from technology or infrastructure breakdowns, defects or external causes such as fire, natural disaster, computer viruses, acts of terrorism or power disruptions, or public health events could result in financial loss, negatively impact our reputation and negatively affect our ability to do business.

Although we and our third-party service providers have disaster recovery plans in place, we may nonetheless experience interruptions if a natural or man-made disaster or prolonged power outage were to occur, which could have an adverse impact on our business and profitability.

In addition, like many companies, our computer systems are regularly the target of computer viruses or other malicious codes, unauthorized access, cyber-attacks or other computer-related penetrations.

The sophistication of cyber threats continues to increase, including through the use of "ransomware" and phishing attacks, and our controls and the preventative actions we take to reduce the risk of cyber incidents and protect our information systems may be insufficient to detect or prevent unauthorized access, cyber-attacks or other security breaches to our computer systems or those of third parties with whom we do business.

Our third-party service providers' systems may also be affected by, or fail as a result of, catastrophic events, such as fires, floods, hurricanes and tornadoes.

A breach of our technology systems, or of those of third-party service providers, through cyber-attacks or failure to manage and sufficiently secure our technology environment could result in interruptions or malfunctions in the operations of our business, loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by a breach or to recover access to our systems, additional costs to mitigate against future incidents, and litigation costs resulting from an incident.

Any of these conditions could have an adverse impact on our business and profitability.

We and certain of our third-party vendors receive and store personal information as well as non-public business information.

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A breach of the systems or hardware could result in unauthorized access to our proprietary business or client data or release of this type of data, which could subject us to legal liability or regulatory action under data protection and privacy laws, which may result in fines or penalties, the termination of existing client contracts, costly mitigation activities and harm to our reputation.

The occurrence of any of these risks could have an adverse impact on our results of operations and

financial condition.

We have significant Company assets invested in marketable securities, which exposes us to earnings volatility as the value of these investments fluctuate, as well as risk of capital loss.

The occurrence of any of these risks could have an adverse impact on our business and profitability.

We have significant capital invested in marketable securities, which exposes us to earnings volatility as the value of these investments fluctuate, as well as risk of capital loss.

We use capital to incubate new investment strategies, introduce new products or to enhance distribution access of existing products.

At December 31, 2021, the Company had $144.7 million of such investments, comprising $70.1 million of marketable securities and $74.6 million of net interests in CIP.

The Company also had $76.2 million of net investments in CLOs.

These investments are in a variety of asset classes, including alternative, fixed income and equity strategies including first loss tranches of CLO equity.

Many of these investments employ a long-term investment strategy and entail an optimal investment period spanning several years.

Accordingly, during this investment period, the Company's capital utilized in these investments may not be available for other corporate purposes, or if required for alternative corporate purposes without significantly diminishing our invested capital or our investment return.

At December 31, 2022, the Company had $223.5 million of such investments, comprising $144.6 million of marketable securities and $78.9 million of net investments in CLOs.

These investments are in a variety of asset classes, including alternative, fixed income and equity strategies and first-loss tranches of CLO equity.

Many of these investments employ a long-term investment strategy with an optimal investment period spanning several years.

Accordingly, during this investment period, the capital held in these investments may not be available for other corporate purposes without significantly diminishing our investment return.

We cannot provide assurance that these investments will perform as expected.

Moreover, increases or decreases in the value of these investments will increase the volatility of our earnings, and an other than temporary or permanent decline in the value of these investments would result in the loss of capital and have an adverse impact on our results of operations and financial condition.

We may need to obtain additional capital in the future that may not be available to us in sufficient amounts or on acceptable terms, which could have an adverse impact on our business.

Our ability to meet our future cash needs is dependent upon our ability to generate or have short-term access to cash.

Although we have generated sufficient cash in the past, we may not do so in the future.

The Company had unused capacity under its revolving credit facility of $175.0 million as of December 31, 2021.

Our ability to access capital markets efficiently depends on a number of factors, including the state of credit and equity markets, interest rates and credit spreads.

At December 31, 2021, we had $274.3 million in debt outstanding, excluding the notes payable of our CIP for which risk of loss to the Company is limited to our $76.2 million investment in such products.

See Note 20 of our consolidated financial statements for additional information on the notes payable of the CIP.

We may need to raise capital to fund new business initiatives in the future, and financing may not be available to us in sufficient amounts, on acceptable terms, or at all.

If we are unable to access sufficient capital on acceptable terms, our business could be adversely impacted.

Increases or decreases in the value of these investments could increase the volatility of our earnings, and an other-than-temporary or permanent decline in the value of these investments could result in the loss of capital and have an adverse impact on our results of operations and financial condition.

LEGAL AND REGULATORY RISKS

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The investment management industry in which we operate is subject to extensive and frequently changing regulation.

We are regulated by the SEC under the Exchange Act, the Investment Company Act and the Investment Advisers Act, and we are subject to regulation by the Commodities Futures Trading Commission under the Commodities Exchange Act.

The Central Bank of Ireland regulates our global funds (UCITS) and has approved the Company entities that advise these funds.

We are also regulated by FINRA, the Department of Labor under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), as well as other federal and state laws and regulations.

Further, new regulations or interpretations of existing laws may result in enhanced disclosure obligations, including with respect to climate change or other environmental, social and governance (commonly referred to as ESG) matters, which could negatively affect us or materially increase our regulatory burden.

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

Each of our affiliated investment managers and unaffiliated subadvisers is registered with the SEC under the Investment Advisers Act.

Our affiliated investment managers operating outside of the U.S.

are also subject to regulation by various regulatory authorities and exchanges in the relevant jurisdictions, including, for those active in the UK, the Financial Conduct Authority ("FCA").

We have distribution teams that operate offices in the UK and Singapore and are subject to regulation by the FCA and the Monetary Authority of Singapore, respectively.

Each of our U.S.-sponsored funds is registered with the SEC under the Investment Company Act.

Our global funds are registered with and subject to regulation by the Central Bank of Ireland.

New regulations or interpretations of existing laws may result in enhanced disclosure obligations, including with respect to climate change or other environmental, social and governance ("ESG") matters, which could negatively affect us or materially increase our regulatory burden.

Increased regulations generally increase our costs, and we could continue to experience higher costs if new laws require us to spend more time, hire additional personnel, or purchase new technology to comply effectively.

Although we spend extensive time and resources to ensure compliance with all applicable laws and regulations, if we fail to properly modify and update our compliance procedures in a timely manner in this changing and highly complex regulatory environment, we may be subject to various legal proceedings, including civil litigation, governmental investigations and enforcement actions that could result in fines, penalties, suspensions of individual employees, or limitations on particular business activities, any of which could have an adverse impact on our results of operations and financial condition.

Although we spend extensive time and resources to ensure compliance with all applicable laws and regulations, if we fail to properly adhere to our policies or modify and update our compliance procedures in a timely manner in this changing and highly complex regulatory environment, we may be subject to various legal proceedings, including civil litigation, governmental investigations and enforcement actions that could result in fines, penalties, suspensions of individual employees, or limitations on particular business activities, any of which could have an adverse impact on our revenues and profitability.

We manage assets under agreements that have investment guidelines or other contractual requirements and failure to comply could result in claims, losses, or regulatory sanctions, which could negatively impact our revenues and profitability.

The agreements under which we manage client assets often have established investment guidelines or other contractual requirements with which we are required to comply in providing our investment management services.

Although we maintain various compliance procedures and other controls to prevent, detect and correct such errors, any failure or allegation of a failure to comply with these guidelines or other requirement could result in client claims, reputational damage, withdrawal of assets and potential regulatory sanctions, any of which could have an adverse impact on our results of operations and financial

We could be subject to civil litigation and government investigations or proceedings, which could adversely affect our business.

Many aspects of our business involve substantial risks of liability, and there have been substantial incidences of litigation and regulatory investigations in the financial services industry in recent years, including customer claims as well as class action suits seeking substantial damages.

From time to time, we and/or our funds may be named as defendants or co-defendants in lawsuits or be involved in disputes that involve the threat of lawsuits seeking substantial damages.

We and/or our funds are also involved from time to time in governmental and self-regulatory organization investigations and proceedings.

From time to time, we and/or our sponsored funds may be named as defendants or co-defendants in lawsuits or be involved in disputes that involve the threat of lawsuits seeking substantial damages.

We and/or our sponsored funds are also involved from time to time in governmental and self-regulatory organization investigations and proceedings.

"Legal Proceedings" for further information.

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We depend to a large extent on our business relationships and our reputation to attract and retain clients.

As a result, allegations of improper conduct by private litigants, including investors in our funds, or regulators, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, our investment activities or the asset management industry in general, whether or not valid, may harm our reputation, which may be more damaging to our business than to other types of businesses.

We may incur substantial legal expenses in defending against proceedings commenced by a client, regulatory authority or other private litigant.

Substantial legal liability levied on us could cause significant reputational harm and have an adverse impact on our results of operations and financial condition.

legal liability levied on us could cause significant reputational harm and have an adverse impact on our results of operations and financial condition.

We are subject to multiple tax jurisdictions and any changes in tax laws or unanticipated tax obligations could have an adverse impact on our financial condition, results of operations and cash flow.

We are subject to income taxes as well as non-income-based taxes, and are subject to ongoing tax audits, in various jurisdictions in which we operate.

Tax authorities may disagree with certain positions we have taken which may result in the assessment of additional taxes.

We are subject to income as well as non-income-based taxes and are subject to ongoing tax audits, in various jurisdictions in which we operate.

Tax authorities may disagree with certain positions we have taken that may result in the assessment of additional taxes.

We regularly assess the appropriateness of our tax positions and reporting.

We cannot provide assurance, however, that we will accurately predict the outcomes of audits, and the actual outcomes of these audits could be unfavorable.

Any changes to tax laws could impact our estimated effective tax rate and overall tax expense and could result in adjustments to our treatment of deferred taxes, including the realization or value thereof, which could have an adverse effect on our business, financial condition and results of operations.

In addition, our ability to use net operating loss carryforwards and other tax attributes available to us will be dependent on our ability to generate taxable income.

We cannot provide assurance that we will accurately predict the outcomes of audits and the actual outcomes of these audits could be unfavorable.

Any changes to tax laws could impact our estimated effective tax rate and tax expense and could result in adjustments to our treatment of deferred taxes, including the realization or value thereof, which could have an adverse effect on our business, financial condition and results of operations.

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

We have a large amount of our common stock concentrated with a small number of shareholders, which could increase the volatility in our stock trading and affect our share price.

A large percentage of our common stock is held by a limited number of shareholders.

If our larger shareholders decide to liquidate their positions, it could cause significant fluctuation in the share price of our common stock.

Public companies with a relatively concentrated level of institutional shareholders, such as we have, often have difficulty generating trading volume in their stock, which may increase the volatility in the price of our common stock.

We may not pay quarterly dividends as intended or at all .

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In making decisions regarding our quarterly dividends, we consider general economic and business conditions as well as our strategic plans and prospects, business and investment opportunities, financial condition and operating results, working capital requirements and anticipated cash needs, contractual and regulatory restrictions (including under the terms of our credit agreement) and other obligations, that may have implications on the payment of distributions by us to our shareholders or by our subsidiaries to us, and such other factors as we may deem relevant.

Our ability to pay dividends in excess of our current quarterly dividends is subject to restrictions under the terms of our credit agreement.

Our ability to pay or increase our dividends maybe subject to restrictions under the terms of our credit agreement.

We cannot make any assurances that any dividends, whether quarterly or otherwise, will continue to be paid in the future.

We have corporate governance provisions that may make an acquisition of us more difficult.

Certain provisions of our certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.

Certain provisions of our certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions by which stockholders might otherwise receive a premium for their shares.

These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.

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GENERAL RISK FACTORS

Our insurance policies may not cover all losses and costs to which we may be exposed.

Our insurance policies may not cover all losses and costs to which we may be exposed, which could adversely impact our results of operations and financial condition.

We carry insurance in amounts and under terms that we believe are appropriate.

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As our insurance policies come up for renewal, we may need to assume higher deductibles or pay higher premiums, which could have an adverse impact on our results of operations and financial condition.

We have goodwill and intangible assets on our balance sheet that could become impaired.

Our goodwill and indefinite-lived intangible assets are subject to annual impairment reviews.

We also have definite-lived intangible assets that are subject to impairment testing if indicators of impairment are identified.

A variety of factors could cause the carrying values to become impaired, which would adversely affect our results of operations.

We have goodwill and other intangible assets on our balance sheet that could become impaired, which could impact our results of operations and financial condition.

As of December 31, 2022, the Company had $791.4 million in intangible assets and goodwill.

We cannot be certain that we will realize the value of such intangible assets.

Our intangible assets may become impaired as a result of a variety of factors which could adversely affect our financial condition and results of operations.

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains statements that are, or may be considered to be, forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

All statements that are not historical facts, including statements about our beliefs or expectations, are "forward-looking statements." These statements may be identified by such forward-looking terminology as "expect," "estimate," "intent," "plan," "intend," "believe," "anticipate," "may," "will," "should," "could," "continue," "project," "opportunity," "predict," "would," "potential," "future," "forecast," "guarantee," "assume," "likely," "target" or similar statements or variations of such terms.

"forecast," "guarantee," "assume," "likely," "target" or similar statements or variations of such terms.

Our forward-looking statements are based on a series of expectations, assumptions and projections about the Company and the markets in which we operate, are not guarantees of future results or performance, and involve substantial risks and uncertainty, including assumptions and projections concerning our assets under management, net asset inflows and outflows, operating cash flows, business plans and ability to borrow, for all future periods.

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Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including those discussed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K, resulting from:

(i) any reduction in our assets under management;

(ii) general domestic and global economic, political, and pandemic conditions;

(iii) inability to achieve the expected benefits of our strategic transactions;

(iv) the effects of the on-going COVID-19 pandemic and associated global economic disruptions;

(v) withdrawal, renegotiation or termination of investment advisory agreements;

(vi) damage to our reputation;

(vii) inability to satisfy financial covenants and payments related to our indebtedness;

(viii) inability to attract and retain key personnel;

(ix) challenges from the competition we face in our business;

(x) adverse developments related to unaffiliated subadvisers;

(xi) negative changes in key distribution relationships;

(xii) interruptions in or failure to provide critical technological service by us or third parties;

(xiii) loss on our investments;

(xiv) lack of sufficient capital on satisfactory terms;

(xv) adverse regulatory and legal developments;

(xvi) failure to comply with investment guidelines or other contractual requirements;

(xvii) adverse civil

litigation and government investigations or proceedings;

(xviii) unfavorable changes in tax laws or limitations;

(xix) volatility associated with our common stock;

(xx) inability to make quarterly common stock dividends;

(xxi) certain corporate governance provisions in our charter and bylaws;

(xxii) losses or costs not covered by insurance;

and (xxiii) impairment of goodwill or intangible assets;

(i) any reduction in our assets under management including from domestic and global conditions, security price declines and negative performance;

(ii) inability to achieve the expected benefits of our strategic transactions;

(iii) withdrawal, renegotiation or termination of investment advisory agreements;

(iv) damage to our reputation;

(v) inability to satisfy financial debt covenants and required payments;

(vi) inability to attract and retain key personnel;

(vii) challenges from the competition we face in our business;

(viii) adverse developments related to unaffiliated subadvisers;

(ix) negative changes in key distribution relationships;

(x) interruptions, breaches, or failures of technology systems;

(xi) loss on our investments;

(xii) lack of sufficient capital on satisfactory terms;

(xiii) adverse regulatory and legal developments;

(xiv) failure to comply with investment guidelines or other contractual requirements;

(xv) adverse civil litigation, government investigations, or proceedings;

(xvi) unfavorable changes in tax laws or limitations;

(xvii) inability to make quarterly common stock dividends;

(xviii) impediments from certain corporate governance provisions;

(xix) losses or costs not covered by insurance;

(xx) impairment of goodwill or other intangible assets;

and other risks and uncertainties.

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We lease our principal offices, which are located at One Financial Plaza, Hartford, CT 06103.

In addition, we lease office space in California, Connecticut, Florida, Georgia, Illinois, New Jersey, New York and Texas.

In addition, we lease office space in California, Connecticut, Florida, Georgia, Illinois, New Jersey, New York, Texas, Singapore and the UK.

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 1A. Risk Factors