What changed in this filing

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Item 1. Business

2024-02-28 compared with 2023-02-27 · 95 added, 89 removed, 164 unchanged (53% of the section changed)

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(the "Company"), a Delaware corporation, commenced operations on November 1, 1995 and became an independent publicly traded company on December 31, 2008.

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

We use a multi-manager, multi-style approach, offering investment strategies from affiliated managers, each having its own distinct investment style, autonomous investment process, individual brand, and select unaffiliated subadvisers.

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

By offering a broad array of products, we believe we can appeal to a greater number of investors and have offerings across market cycles and through changes in investor preferences.

Through our multi-manager model, we provide our affiliated managers with centralized U.S.

retail distribution capabilities and offer institutional sales and business support resources to support affiliate operations.

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

Through our multi-manager model, we provide our affiliated managers with retail and institutional distribution capabilities and business and operational support.

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

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

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

Our retail products include mutual funds registered pursuant to the Investment Company Act of 1940, as amended ("U.S.

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

Our products include mutual funds registered pursuant to the Investment Company Act of 1940, as amended ("U.S.

retail funds");

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and retail separate accounts that include intermediary-sold and private client accounts;

Our investment strategies are offered to institutional clients through separate accounts and pooled, or commingled, structures.

and institutional separate and commingled accounts, including structured products.

We also provide subadvisory services to other investment advisers and serve as the collateral manager for structured products.

Our Investment Managers

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").

We provide investment management services through our affiliated investment managers who are registered directly and indirectly as investment advisers 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, subadvisory or collateral management agreements.

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(in billions)

Boston, MA Systematic Alternatives $ 7.4

Ceredex Value Advisors

Orlando, FL Value Equities $ 7.0

Orlando, FL Value Equity $ 6.2

Duff & Phelps Investment Management

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Kayne Anderson Rudnick Investment Management

Los Angeles, CA Quality-Oriented Equities $ 47.4

Los Angeles, CA Quality-Focused Equity $ 59.6

Newfleet Asset Management (1)

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NFJ Investment Group

Dallas, TX Global Value Equities $ 6.8

Dallas, TX Global Value Equity $ 6.6

Seix Investment Advisors (1)

Park Ridge, NJ Investment Grade and Leveraged Finance Fixed Income $ 14.4

Park Ridge, NJ Specialty Fixed Income $ 13.1

Silvant Capital Management

Atlanta, GA Growth Equities $ 1.7

Atlanta, GA Growth Equity $ 2.2

Stone Harbor Investment Partners (1)

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Sustainable Growth Advisers

Stamford, CT Global Growth Equities $ 20.8

Stamford, CT Global Growth Equity $ 26.4

Virtus Multi-Asset (2)

Hartford, CT Global Multi-Asset $ 0.2

Virtus Systematic (2)

San Diego, CA Systematic Global Equity $ 0.4

Westchester Capital Management

Valhalla, NY Event-Driven Equity $ 5.1

Virtus Multi-Asset (1) Hartford, CT Global Multi-Asset $ 0.2

Virtus Systematic (1) San Diego, CA Systematic Equity $ 0.5

Valhalla, NY Event-Driven Alternatives $ 3.7

Zevenbergen Capital Investments (3)

Seattle, WA High Growth Equity $ 1.3

(1) Operates as a division within a broader legal entity.

Seattle, WA Disruptive Growth Equity $ 1.9

(1) Operates as a division of Virtus Fixed Income Advisors LLC, a wholly owned subsidiary of the Company.

(2) Operates as a division of Virtus Investment Advisers, Inc., a wholly owned subsidiary of the Company.

(3) Affiliated through ownership of a minority interest.

Our select unaffiliated subadvisers, their respective investment styles and assets under management as of December 31, 2022 were as follows:

Summary information regarding our select unaffiliated subadvisers, their respective investment styles and assets under management as of December 31, 2023 were as follows:

Unaffiliated Subadviser Investment Style Assets

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Voya Investment Management Income & Growth and Convertible $ 9.7

Vontobel Asset Management, Inc.

International Growth Equity $ 2.6

Other Risk-Based Quantitative, Income-Focused Equity and Systematic Quantitative $ 1.1

Other International Growth Equity, Income-Focused Equity, Risk Managed and Quantitative $ 2.3

Our Investment Products

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Open-End Funds

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

retail funds are offered in a variety of asset classes (domestic, global and international equity, taxable and non-taxable fixed income, multi-asset and alternatives), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative).

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

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Multi-Asset 4 5,777 0.75 - 0.45

Alternative 16 6,319 1.25 - 0.45

Alternatives 17 7,456 1.65 - 0.45

Specialty Equity 10 2,937 1.80 - 0.59

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Closed-End Funds

Our closed-end funds are offered in a variety of asset classes such as equity, fixed income and multi-asset.

We managed the following closed-end funds as of December 31, 2022, each of which is traded on the New York Stock Exchange:

Our closed-end funds are offered in a variety of asset classes such as equity, fixed income, multi-asset and alternatives, each of which is traded on the New York Stock Exchange.

Summary information about our closed-end funds as of December 31, 2023 was as follows:

Asset Class Number of Funds Total Assets

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Intermediary-sold managed accounts are individual investment accounts that are contracted through intermediaries as part of investment programs offered to retail investors.

Summary information about our intermediary-sold managed accounts as of December 31, 2022 was as follows:

Asset Class Total Assets

(in millions)

Private Client Accounts

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

Services provided include wealth advisory and investment services that include third-party investment services.

The following table summarizes our retail separate accounts by asset class as of December 31, 2023:

(in millions) Intermediary-Sold

Managed Accounts Private Client Accounts

Domestic $ 33,105 $ 29

International 82

International equity 81 —

Global equity 366 —

Specialty equity 70 —

Leveraged finance 1,444 2

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Multi-Asset (1) 175 7,435

Total Intermediary-Sold Managed Accounts $ 29,160

Private Client Accounts

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, 2022 was as follows:

Asset Class Total Assets

(in millions)

Multi-Asset $ 6,054

Investment grade 110

Leveraged finance 3

Total Private Client Accounts $ 6,192

Alternatives 1 —

Total Retail Separate Accounts $ 35,438 $ 7,764

(1) For private client accounts, consists of individual client accounts with substantial holdings in at least two of the following asset classes:

equity, fixed income, and alternatives.

Institutional Accounts

Our institutional clients include corporations, multi-employer retirement funds, public employee retirement systems, foundations and endowments.

We also act as collateral manager for 12 collateralized loan obligations ("CLOs").

We also act as collateral manager for nine collateralized loan obligations ("CLOs").

In addition, we provide subadvisory services to unaffiliated mutual funds.

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Investment grade 8,923

Alternative 3,653

Alternatives 8,926

Multi-Asset 966

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Investment Management Fees

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

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

For our sponsored 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 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 fee based on a percentage of the management fee.

Each fund bears all expenses associated with its operations.

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In certain instances, institutional fees may include performance-related fees, generally earned if the returns on the portfolios exceed agreed upon periodic or cumulative return targets, primarily benchmark indices.

Fees for CLOs, for which we act as the collateral manager,

consist of senior, subordinated and, in certain instances, incentive management fees.

Senior and subordinated management fees are calculated at a contractual fee rate applied against the end of the preceding quarter par value of the total collateral being managed with subordinated fees being recognized only after certain portfolio criteria are met.

Incentive fees on certain of our structured products are typically a percentage of the excess cash flows available to holders of the subordinated notes, above a threshold level internal rate of return.

Fees for CLOs are generally

calculated at a contractual fee rate applied against the end of the preceding quarter par value of the total collateral being managed.

Administration Fees

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retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies.

In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs.

In many of these firms, we have a number of products that are on preferred or "recommended" lists and on fee-based advisory programs.

Our private client business is marketed directly to individual clients by financial advisory teams at our affiliated investment managers.

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Our institutional distribution resources include affiliate-specific institutional sales teams primarily focused on the U.S.

market, supported by shared consultant relation support and non-U.S.

institutional distribution.

market, supported by shared consultant relations and U.S.

institutional sales distribution.

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

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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 the principal underwriter and distributor of our funds under sales agreements with unaffiliated financial intermediaries, provides market advisory services to sponsors of retail separate accounts, and is also a program manager and distributor of a qualified tuition plan under Section 529 of the Internal Revenue Code ("529 Plan").

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.

Our broker-dealer serves as the principal underwriter and distributor of our funds, provides market advisory services to sponsors of retail separate accounts, and is also a program manager and distributor of a qualified tuition plan under Section 529 of the Internal Revenue Code ("529 Plan").

Our broker-dealer is subject to, among others, 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.

Our Competition

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Our Regulatory Matters

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 United Kingdom (the "UK"), the Financial Conduct Authority (the "FCA").

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

Each of our U.S.

sponsored funds is registered with the SEC under the Investment Company Act of 1940, as amended ("the Investment Company Act").

The financial services industry is highly regulated, regulations are complex, 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.

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

Each of our affiliated investment managers is registered directly and indirectly as an investment adviser with the SEC under the Investment Advisers Act.

The Investment Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary duties, compliance and disclosure obligations, and operational and recordkeeping requirements.

Certain investment management affiliates are also members of the National Futures Association and are regulated by the U.S.

Commodity Futures trading Commission ("CFTC") with respect to the management of funds and other products that utilize futures, swaps, or other CFTC regulated instruments.

Our affiliated investment managers also advise registered and unregistered funds in the U.S.

and other jurisdictions and are subject to the regulatory requirements in the jurisdiction where those funds are sponsored or offered, including with respect to mutual funds and closed end funds in the U.S., the Investment Company Act of 1940, as amended (the "Investment Company Act").

The Investment Company Act governs the operations of mutual funds and imposes obligations on their advisers, including investment restrictions and other governance, compliance, reporting and fiduciary obligations with respect to the management of those funds.

Affiliated investment managers operating outside of the U.S.

are also subject to regulation by various regulatory authorities and exchanges in the relevant jurisdiction.

Some of our investment affiliates are subject to directives and regulations in the European Union and other jurisdictions related to funds, such as the Undertakings for the Collective Investment of Transferable Securities ("UCITS") Directive and the Alternative Investment Fund Managers Directive ("AIFMD"), with respect to depository functions, remuneration policies and sanctions and other matters.

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.

New regulations or interpretations of existing laws may result in enhanced disclosure obligations.

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.

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.

Most aspects of our investment management business are subject to various U.S.

federal and state laws and regulations.

Our U.S.-domiciled open-end mutual funds are generally available for sale and are qualified in all 50 states, Washington, D.C., Puerto Rico, Guam and the U.S.

Virgin Islands.

Our global funds are sold to non-U.S.

institutional and retail clients who are not citizens or residents of the U.S.

Our broker-dealer is subject to SEC and FINRA rules and regulations, including extensive regulatory requirements related to sales practices, registration of personnel, compliance and supervision and compensation and disclosure.

Sales and marketing activities of investment management services are also subject to regulation by non-U.S.

authorities in the jurisdictions in which investment management products and services are offered.

The ability to transact business in these jurisdictions and to conduct cross-border activities, is subject to the continuing availability of regulatory authorizations and exemptions.

We have distribution teams that operate offices in the United Kingdom and Singapore and are subject to regulation by the Financial Conduct Authority and Monetary Authority of Singapore, respectively.

Due to the extensive laws and regulations to which we and our investment management affiliates are subject, we and our investment management affiliates must devote substantial time, expense, and effort to remain current on, and to address, legal and regulatory compliance matters.

We and our investment management affiliates have established compliance programs to address regulatory compliance and we have experienced legal and compliance professionals in place to address these requirements.

We also have established legal and regulatory advisers in each of the countries where we conduct business.

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

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Human Capital

As of December 31, 2022, we employed 772 employees and we operate offices in the U.S., UK and Singapore.

As of December 31, 2023, we employed 824 employees and operated offices throughout the U.S., and in the U.K.

and Singapore.

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 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 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 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.

We believe our value as a company derives from the talents and diversity of our employees, and we are committed to creating and maintaining an environment where every employee is treated with dignity and respect.

The collective sum of our individual differences, backgrounds, unique skills, and life experiences creates an environment where employees and the company can achieve the highest levels of performance.

Our programs and practices in (i) workforce diversity, (ii) inclusive culture, (iii) community participation, (iv) employee involvement, and (v) philanthropy are designed to help us deliver on our commitment to maintaining an organization that is diverse, equitable, and inclusive for all employees.

▪ We collaborate with organizations, institutions, and referral sources to identify diverse talent pools and increase the diversity of potential candidates.

▪ We prohibit any form of discrimination and have no tolerance for harassment in any form or any behavior that may contribute to a hostile, intimidating, unwelcoming, and/or inaccessible work environment.

▪ We engage with employees across the organization to raise the awareness of and advance our diversity and inclusion efforts.

▪ We and our employees have a rich history of community engagement and philanthropic activities that support the diverse needs of the communities in which we have a business presence.

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

As part of our offerings, 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.

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

▪ Provide an education assistance program with tuition reimbursement for employees who wish to continue their education to secure increased responsibility and growth within the organization and in their careers.

▪ Offer benefits that promote financial and personal security including comprehensive medical, dental, prescription, disability and life insurance coverages as well as an employee assistance program;

company match to employees' 401(k) contributions;

and an employee stock purchase plan.

▪ Provide wellness programs that 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 rely upon key personnel to manage our business, including senior executives, portfolio managers, securities analysts, investment advisers, sales personnel and other professionals.

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

Our value as a company derives from the talents and diversity of all employees, and we are committed to creating and maintaining an environment where every employee is treated with dignity and respect.

The collective sum of employees' backgrounds, unique skills, and life experiences creates an environment where they and the company can achieve the highest levels of performance.

Programs and practices - including those supporting workforce diversity, an inclusive culture, employee involvement in community activities and corporate philanthropy - are designed to help us deliver on our commitment to maintaining an organization that is diverse and inclusive for all employees.

▪ As an employer, we prohibit any form of discrimination and have no tolerance for harassment in any form or any behavior that may contribute to a hostile, intimidating, unwelcoming, and/or inaccessible work environment.

▪ Collaborative efforts with organizations, institutions, and referral sources support us in identifying diverse talent pools, increasing the diversity of potential candidates, and engaging with employees across the organization to raise the awareness of and advance our inclusion efforts.

▪ Community engagement is ingrained into our culture.

The Company and employees have supported a wide range of philanthropic activities that help to enrich and sustain the communities in which we have a business presence.

Available Information

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Reports, proxy statements and other information regarding issuers that file electronically with the SEC, including our filings, are also available to the public on the SEC's website at http://www.sec.gov.

A copy of our Corporate Governance Principles, our Code of Conduct and the charters of our Audit Committee, Compensation Committee, and Governance Committee are posted on our website at http://ir.virtus.com under "Corporate Governance" and are available in print to any person who requests copies by contacting Investor Relations by email to:

A copy of our Corporate Governance Guidelines, our Code of Conduct and the charters of our Audit Committee, Compensation Committee, and Governance Committee are posted on our website at http://ir.virtus.com under "Corporate Governance" and are available in print without charge to any person who requests copies by contacting Investor Relations by email to:

investor.relations@virtus.com or by mail to Virtus Investment Partners, Inc., c/o Investor Relations, One Financial Plaza, Hartford, CT 06103.

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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