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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-28 · 92 added, 96 removed, 384 unchanged (33% of the section changed)

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

We use a multi-manager, multi-style approach, offering investment strategies from affiliated managers, each having its own distinct investment style, autonomous investment process and individual brand, as well as from select unaffiliated managers for certain of our retail funds.

We use a multi-manager, multi-style approach, offering investment strategies from investment managers, each having its own distinct investment style, autonomous investment process and individual brand, as well as from select unaffiliated managers for certain of our retail funds.

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.

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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 institutional products are offered through institutional separate accounts and commingled accounts, including structured products to a variety of institutional clients.

Our products include open-end funds, closed-end funds and retail separate accounts.

We also provide subadvisory services to other investment advisers.

Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers and Company sponsored structured products.

Our retail products include open-end funds, closed-end funds and retail separate accounts.

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

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In many of these firms, we have a number of products that are on preferred "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.

Our wealth management business is marketed directly to individual clients by financial advisory teams at our Advisers.

Market Developments

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Financial Highlights

▪ Net income per diluted share was $17.71 in 2023, an increase of $2.21, or 14.3%, compared to net income per diluted share of $15.50 in 2022.

▪ Total sales were $25.9 billion in 2023, a decrease of $4.4 billion, or 14.6%, from $30.3 billion in 2022.

Net flows were $(7.2) billion in 2023 compared to $(13.4) billion in 2022.

▪ Assets under management were $172.3 billion at December 31, 2023, an increase of $22.9 billion, or 15.3%, from $149.4 billion at December 31, 2022.

On April 1, 2023, the Company completed the acquisition of AlphaSimplex Group, LLC ("AlphaSimplex") for $113.4 million in cash at closing, including $50.0 million drawn from the Company's revolving credit facility, that was repaid as of December 31, 2023.

▪ Total revenues were $906.9 million in 2024, an increase of $61.7 million, or 7.3%, compared to total revenues of $845.3 million in 2023.

▪ Operating income was $182.5 million, in 2024, an increase of $31.0 million, or 20.5%, compared to $151.5 million in 2023.

▪ Net income per diluted share was $16.89 in 2024, a decrease of $0.82, or 4.6%, compared to net income per diluted share of $17.71 in 2023.

Assets Under Management

Total sales were $26.8 billion in 2024, an increase of $0.9 billion, or 3.5%, from $25.9 billion in 2023.

Net flows were $(10.4) billion in 2024 compared to net flows of $(7.2) billion in 2023.

At December 31, 2024, total assets under management were $175.0 billion, representing an increase of $2.7 billion, or 1.6%, from December 31, 2023.

The change in total assets under management from December 31, 2022 included $24.8 billion from positive market performance and $7.8 billion from the acquisition of AlphaSimplex, partially offset by $7.2 billion of net outflows.

The change in total assets under management from December 31, 2023 included $15.8 billion from positive market performance, partially offset by $(10.4) billion of net outflows.

Assets Under Management by Product

The following table summarizes our assets under management by product:

As of December 31, As of Change

(in millions) 2023 2022 2023 vs.

As of December 31, Change

(in millions) 2024 2023 $ %

Open-End Funds (1) $ 56,073 $ 56,062 $ 11 — %

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(1) Represents assets under management of U.S.

retail funds, global funds, ETFs and variable insurance funds.

retail funds, global funds and ETFs.

(2) Includes investment models provided to managed account sponsors.

(3) Represents assets under management of institutional separate and commingled accounts including structured products.

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Beginning balance $ 10,026 $ 10,361

Inflows 24 191

Outflows (41) —

Net flows (40) 24

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(1) Represents assets under management of U.S.

retail funds, global funds, ETFs and variable insurance funds.

retail funds, global funds and ETFs.

(2) Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from cash management strategies, and the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage.

(3) Includes investment models provided to managed account sponsors.

(4) Represents assets under management of institutional separate and commingled accounts including structured products.

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The following table summarizes assets under management by asset class:

December 31, Change % of Total

(in millions) 2023 2022 2023 vs.

2022 % 2023 2022

As of December 31, Change % of Total

(in millions) 2024 2023 $ % 2024 2023

Equity $ 100,792 $ 96,703 $ 4,089 4.2 % 57.6 % 56.2 %

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Total $ 175,001 $ 172,259 $ 2,742 1.6 % 100.0 % 100.0 %

(1) Consists of strategies and client accounts with substantial holdings in at least two of the following asset classes:

equity, fixed income, and alternatives.

(1) Consists of multi-asset offerings not included in equity, fixed income, and alternatives.

(2) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short, and other strategies.

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(1) Represents assets under management of U.S.

retail funds, global funds, ETFs and variable insurance funds.

retail funds, global funds and ETFs.

(2) Includes investment models provided to managed account sponsors.

(3) Represents assets under management of institutional separate and commingled accounts including structured products.

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– Institutional Accounts - average of month-end balances

Average fees earned represent investment management fees, net of revenue-related adjustments, divided by average net assets, excluding the impact of consolidated investment products ("CIP").

Average fees earned represent investment management fees, net of revenue-related adjustments, and excluding the impact of consolidated investment products ("CIP") divided by average net assets.

Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed-through to third-party client intermediaries for services to investors in sponsored investment products.

Fund fees are calculated based on average daily or weekly net assets.

Retail separate account fees are calculated based on the end of the preceding or current quarter’s asset values or on an average of month-end balances.

Retail separate account fees which includes wealth management accounts are calculated based on the end of the preceding or current quarter’s asset values or on an average of month-end balances.

Institutional account fees are calculated based on an average of month-end balances, an average of current quarter’s asset values or on a combination of the underlying cash flows and the principal value of the product.

Average fees earned will vary based on several factors, including the asset mix and expense reimbursements to the funds.

The average fee rate earned on all products for 2023 increased by 0.6 basis points compared to the prior year primarily due to the addition of alternative strategies with higher fee rates from the AlphaSimplex acquisition.

The average fee rate earned on all products was flat for 2024 compared to the prior year.

Investment Performance

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Beating Benchmark (2)

Asset Class (1) 3-Year 5-Year 10-Year

Asset Class 1-Year 3-Year 5-Year 10-Year

Equity 25% 18% 55% 75%

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Alternatives 54% 49% 91% 96%

(1) Excludes closed-end funds, private client accounts, structured products and certain other multi-asset strategies.

(1) Excludes closed-end funds, wealth management accounts, structured products and certain other multi-asset strategies.

(2) Percentage beating benchmark is reported as the percentage of assets under management that have outperformed benchmarks across the indicated periods and does not include assets without benchmarks.

Performance is presented on an average annual total return basis for products with a three-, five-, and/or ten-year track record, is net of fees and is measured on a consistent basis relative to the most appropriate benchmarks.

Performance is presented on an average annual total return basis for products with a one-, three-, five-, and/or ten-year track record, is net of fees for open-end funds, and is measured on a consistent basis relative to the most appropriate benchmarks.

Benchmark indices are unmanaged, their returns do not reflect any fees, expenses or sales charges, and they are not available for direct investment.

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(1) Assets under management excludes non-rated funds.

Based on institutional-class shares, except for funds without I shares, for which shares were used, or if A share rating is higher than I shares.

Based on institutional-class shares, except for funds without I shares, for which A shares were used, or if A share rating is higher than I shares.

Past performance is not indicative of future results.

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Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Investment management fees $ 773,830 $ 711,475 $ 62,355 8.8 %

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Operating income (loss) 182,490 151,484 31,006 20.5 %

Other income (expense), net 3,681 (51,938) 55,619 (107.1) %

Interest income (expense), net 31,399 18,366 13,033 71.0 %

Total other income (expense), net (8,510) 3,681 (12,191) (331.2) %

Total interest income (expense), net 33,896 31,399 2,497 8.0 %

Income (loss) before income taxes 207,876 186,564 21,312 11.4 %

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Earnings (loss) per share-diluted $ 16.89 $ 17.71 $ (0.82) (4.6) %

In 2023, total revenues decreased $41.1 million, or 4.6%, to $845.3 million from $886.4 million in 2022, and operating income decreased by $46.0 million, or 23.3%, to $151.5 million in 2023 from $197.5 million in 2022, primarily as a result of lower average assets under management.

In 2024, total revenues increased $61.7 million, or 7.3%, to $906.9 million from $845.3 million in 2023, and operating income increased by $31.0 million, or 20.5%, to $182.5 million in 2024 from $151.5 million in 2023, primarily as a result of increased average assets under management during the current year partially offset by an increase in operating expenses.

Revenues by source were as follows:

Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Investment management fees

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Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments.

Investment management fees decreased by $16.9 million, or 2.3%, for the year ended December 31, 2023 compared to the prior year, primarily due to lower average assets under management, partially offset by the addition of AlphaSimplex.

Investment management fees increased by $62.4 million, or 8.8%, for the year ended December 31, 2024 compared to the prior year, primarily due to the increase in average assets under management.

Distribution and Service Fees

Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services.

Distribution and service fees decreased by $11.4 million, or 16.8%, for the year ended December 31, 2023 compared to the prior year, primarily due to lower average assets for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Distribution and service fees decreased by $1.5 million, or 2.6%, for the year ended December 31, 2024 compared to the prior year, primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Administration and Shareholder Service Fees

Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S.

retail funds, ETFs and certain closed-end funds.

Fund administration and shareholder service fees decreased by $12.0 million, or 14.0%, for the year ended December 31, 2023 compared to the prior year, primarily due to the decrease in average assets under management in open-end funds during the period as a result of market performance and net outflows.

retail funds, ETFs and closed-end funds.

Fund administration and shareholder service fees remained consistent for the year ended December 31, 2024 compared to the prior year.

Other Income and Fees

Other income and fees primarily represent fees related to other fee-earning assets and contingent sales charges earned from investor redemptions of certain shares sold without a front-end sales charge.

Other income and fees decreased $0.9 million, or 18.8%, for the year ended December 31, 2023 compared to the prior year, primarily due to lower redemption income as well as the decline in average other fee-earning assets in the current year.

Other income and fees primarily represent fees related to other fee-earning assets and marketing fees earned on certain ETFs.

Other income and fees increased $0.4 million, or 9.3%, for the year ended December 31, 2024 compared to the prior year, primarily due to increased marketing fees earned during the current year.

Operating Expenses

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Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Operating expenses

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Employment expenses consist of fixed and variable compensation and related employee benefit costs.

Employment expenses of $404.7 million increased $33.5 million, or 9.0%, from the prior year primarily due to the addition of AlphaSimplex, which included retention payments to employees incurred as part of the transaction consideration that were classified as employment expense.

Employment expenses of $432.6 million increased $27.8 million, or 6.9%, from the prior year primarily due to an increase in profit- and sales-based compensation and the addition of AlphaSimplex in April 2023.

Distribution and Other Asset-Based Expenses

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These payments are primarily based on assets under management.

Distribution and other asset-based expenses also include the amortization of deferred sales commissions related to up-front commissions on shares sold without a front-end sales charge to shareholders.

The deferred sales commissions are amortized on a straight-line basis over the period commissions are recovered from distribution fee revenues and contingent sales charges received upon redemption of shares.

Distribution and other asset-based expenses decreased $15.8 million, or 14.0%, compared to the prior year primarily due to a decrease in average assets under management in share classes that have asset-based distribution and other asset-based expenses.

Distribution and other asset-based expenses remained consistent during the year ended December 31, 2024 compared to the prior year.

Other Operating Expenses

Other operating expenses primarily consist of investment research and technology costs, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs.

Other operating expenses decreased modestly by $0.3 million, or 0.2%, for the year ended December 31, 2023 as compared to the prior year primarily due to a decrease in other third-party support costs partially offset by the addition of AlphaSimplex.

Other operating expenses primarily consist of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs.

Other operating expenses remained consistent during the year ended December 31, 2024 compared to the prior year.

Other Operating Expenses of CIP

Other operating expenses of CIP remained consistent during the year ended December 31, 2023 compared to the prior year.

Other operating expenses of CIP of $7.0 million increased $2.8 million, or 65.4%, from the prior year primarily due to costs incurred related to the refinancing of three CLOs and issuance of one CLO in the current year.

Change in Fair Value of Contingent Consideration

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The change in fair value is recorded in the current period as a gain or loss.

The $13.5 million change in fair value of contingent consideration for the year ended December 31, 2023 as compared to the prior year was primarily attributable to changes in underlying performance estimates and discount rates.

The change in fair value of contingent consideration for the year ended December 31, 2024 was primarily attributable to changes in underlying performance estimates.

Depreciation Expense

Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements.

Depreciation expense increased $1.9 million, or 47.9%, for the year ended December 31, 2023 compared to the prior year primarily due to the addition of AlphaSimplex, as well as leasehold improvements and equipment purchases made in the current year.

Depreciation expense increased $3.2 million, or 54.3%, for the year ended December 31, 2024 compared to the prior year primarily due to the acceleration of depreciation on leasehold improvements associated with a terminated lease in the current year period, as well as software and equipment purchases and depreciation expense associated with new office space.

Amortization Expense

Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives.

Amortization expense increased $2.5 million, or 4.3%, for the year ended December 31, 2023 compared to the prior year, primarily due to the addition of AlphaSimplex.

Amortization expense decreased $4.7 million, or 7.7%, for the year ended December 31, 2024 compared to the prior year, primarily due to intangible assets becoming fully amortized during the current year partially offset by the addition of

intangible assets related to the AlphaSimplex acquisition in the second quarter of the prior year.

Other Income (Expense), net

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Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Other Income (Expense)

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Realized and Unrealized Gain (Loss) of CIP, net

Realized and unrealized gain (loss) of CIP, net changed $36.9 million compared to the prior year.

The change for the current year consisted primarily of net realized and unrealized gains of $145.8 million primarily due to changes in market values of leveraged loans, partially offset by changes in net realized and unrealized losses of $108.9 million related to the value of the notes payable.

Realized and unrealized gain (loss) of CIP, net changed $12.1 million compared to the prior year primarily due to changes in net unrealized and realized losses of $38.0 million, due to changes in market values of leveraged loans partially offset by unrealized gains of $25.9 million related to the value of the notes payable.

Other Income (Expense), net

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Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Interest Income (Expense)

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Interest Expense

Interest expense increased $10.3 million, or 77.9%, for the year ended December 31, 2023, compared to the prior year primarily due to higher average interest rates and higher average debt balances during the current year.

Interest expense decreased $1.3 million, or 5.5%, for the year ended December 31, 2024, compared to the prior year primarily due to lower average debt outstanding during the current year.

Interest and Dividend Income

Interest and dividend income is earned on cash equivalents and our marketable securities.

Interest and dividend income increased $8.0 million, or 180.1%, compared to the prior year due to higher average investment balances and higher

interest rates during the current year compared to the prior year.

Interest and dividend income remained consistent during the year ended December 31, 2024 compared to the prior year.

Interest and Dividend Income of Investments of CIP

Interest and dividend income of investments of CIP increased $90.4 million, or 84.2%, compared to the prior year primarily attributable to higher interest earned on cash balances.

Interest and dividend income of investments of CIP increased $7.0 million, or 3.6%, compared to the prior year.

The increase is primarily attributable to the addition of a new CLO in the third quarter of 2023 and fourth quarter of 2024, respectively, and higher average interest rates during the current year.

Interest Expense of CIP

Interest expense of CIP represents interest expense on the notes payable of CIP.

Interest expense of CIP increased by $75.1 million, or 93.6%, compared to the prior year primarily due to higher average interest rates and the addition of a CLO during the third quarter of 2023 and fourth quarter of 2022.

Interest expense of CIP increased by $5.9 million, or 3.8%, compared to the prior year.

The increase is primarily attributable to the addition of new CLOs in the

third quarter of 2023 and fourth quarter of 2024.

Income Tax Expense (Benefit)

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federal, state and local taxes at an estimated effective tax rate of 26.7% and 24.2% for 2024 and 2023, respectively.

The lower estimated effective tax rate for 2023 was primarily due to excess tax benefits associated with stock-based compensation and the change in valuation allowances in the current year related to the tax effects of unrealized gains on certain of our investments.

The higher effective tax rate in the prior year was due to valuation allowances recorded for the tax effects of unrealized losses on certain of our investments.

The higher estimated effective tax rate for 2024 was primarily due to a change in valuation allowances associated with realized losses on the Company's investments as well as lower excess tax benefits associated with stock-based compensation.

Effects of Inflation

Inflationary pressures can result in increases to our costs, especially to the extent that large expense components such as compensation are impacted.

Inflationary pressures can result in increases to our costs, especially to the extent that large expense components such as service provider, data and compensation are impacted.

To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our profitability could be negatively impacted.

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December 31, Change

(in thousands) 2023 2022 2023 vs.

(in thousands) 2024 2023 $ %

Balance Sheet Data

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Years Ended December 31, Change

(in thousands) 2023 2022 2023 vs.

Cash Flow Data

(in thousands)

provided by (used in) 2024 2023 $ %

Cash Flow Data

Operating activities $ 1,755 $ 237,157 $ (235,402) (99.3) %

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Uses of Capital

Our operating expenses consist of employee compensation and related benefit costs and, other operating expenses, which primarily consist of investment research, technology costs, professional fees, distribution and occupancy costs, as well as interest on our indebtedness and income taxes.

Annual incentive compensation, the largest annual operating cash expenditure, is paid in the first quarter of the year.

Our operating expenses consist of employee compensation and related benefit costs and other operating expenses, which primarily consist of costs related to distribution, investment research and data, occupancy, software application and development and professional fees, as well as interest on our indebtedness and income taxes.

Annual incentive compensation, our largest annual operating cash expenditure, is paid in the first quarter of the year.

In 2024 and 2023, we paid approximately $146.1 million and $142.1 million, respectively, in incentive compensation earned during the years ended December 31, 2023 and 2022, respectively.

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(i) investments in organic growth, including seeding or launching new products and expanding distribution;

(ii) debt principal payments through scheduled amortization, excess cash flow payment requirements or additional paydowns;

(ii) debt principal payments through scheduled amortization or additional paydowns;

(iii) dividend payments to common stockholders;

(iv) repurchases of our common stock, or withholding obligations for the net settlement of employee share transactions;

(v) investments in our infrastructure;

(iv) repurchases of our common stock, or

withholding obligations for the net settlement of employee share transactions;

(v) investments in our technology infrastructure;

(vi) investments in inorganic growth opportunities that may require upfront and/or future payments;

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Capital and Reserve Requirements

We operate an SEC-registered broker-dealer subsidiary that is subject to certain rules regarding minimum net capital.

Certain of our subsidiaries are registered with the SEC, Central Bank of Ireland, Financial Conduct Authority or other regulators that subject them to certain rules regarding minimum net capital.

Failure to meet these requirements could result in adverse consequences to us, including additional reporting requirements, or interruption of our business.

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Operating Cash Flow

Net cash provided by operating activities of $237.2 million for 2023 increased by $104.5 million from cash flows provided by operating activities of $132.7 million in 2022 primarily due to a decrease of $117.4 million in net purchases of investments by CIP.

Net cash provided by operating activities of $1.8 million for 2024 decreased by $235.4 million from cash flows provided by operating activities of $237.2 million in 2023 primarily due to an increase of $270.7 million in net purchases of investments of CIP in the current year period, partially offset by a $26.1 million increase in net sales of investments in the current year.

Investing Cash Flow

Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations.

Net cash used in investing activities was $129.7 million for 2023 compared to net cash used in investing activities of $27.5 million in 2022.

The increase in cash used in investing activities during 2023 compared to the prior year was primarily due to the cash used for the acquisition of AlphaSimplex.

Net cash used in investing activities of $17.0 million for 2024 decreased by $112.8 million from net cash used in investing activities of $129.7 million in 2023 primarily due to the AlphaSimplex acquisition in the prior year.

Financing Cash Flow

Cash flows from financing activities consist primarily of transactions related to our common shares, issuance and repayment of debt by us and CIP, payments of contingent consideration and purchases and sales of noncontrolling interests.

Net cash used in financing activities increased by $254.1 million to $356.1 million in 2023 from $102.1 million in the prior year.

The increase in cash used in financing activities during 2023 compared to the prior year was primarily due to an increase of $315.1 million in net borrowings by CIP, partially offset by a $45.0 million decrease in common share repurchases during the year ended December 31, 2023 as compared to the prior year.

Net cash provided by financing activities of $74.9 million in 2024 changed by $431.1 million from net cash used in financing activities of $356.1 million in the prior year primarily due to a $433.5 million increase in net borrowings of CIP attributable to the refinancing of two CLOs and the launch of a new CLO in the current year.

Credit Agreement

The Company's credit agreement (the "Credit Agreement"), most recently amended on June 20, 2023 to change the base interest rate from LIBOR to SOFR, comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026.

On April 3, 2023, the Company borrowed $50.0 million under the revolving credit facility to partially finance its acquisition of

AlphaSimplex (see Note 4 for further information) and repaid the entire outstanding balance prior to December 31, 2023.

In addition, the Company repaid $2.8 million outstanding under the Term Loan.

At December 31, 2023, $258.8 million was outstanding under the Term Loan.

The Company's credit agreement (the "Credit Agreement"), comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026.

The Company repaid $22.8 million outstanding under the Term Loan during 2024 and had $236.1 million outstanding under the Term Loan at December 31, 2024.

In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Consolidated Balance Sheet net of related debt issuance costs, which were $3.9 million as of December 31, 2024.

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The consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated.

Voting interest entities ("VOEs") are consolidated when we are considered to have a controlling financial interest, which is typically present when we own a majority of the voting interest in an entity or otherwise have the power to govern the financial and operating policies of the entity.

Voting interest entities ("VOEs") are consolidated when we are considered to have a controlling

financial interest, which is typically present when we own a majority of the voting interest in an entity or otherwise have the power to govern the financial and operating policies of the entity.

We evaluate any variable interest entities ("VIEs") in which we have a variable interest for consolidation.

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Noncontrolling interests - CIP represent third-party investments in the Company's CIP and are classified as redeemable noncontrolling interests on the Consolidated Balance Sheets because investors in those products are able to request withdrawal at any time.

Noncontrolling interests - Affiliate

Noncontrolling interests - affiliate represent minority interests held in a consolidated affiliate.

Minority interests held in the affiliate are subject to holder put rights and Company call rights at established multiples of earnings before interest, taxes, depreciation and amortization and, as such, are considered redeemable at other than fair value.

Noncontrolling interests - Investment Manager

Noncontrolling interests - Investment Manager represents the minority interests of a majority owned consolidated investment management subsidiary.

These minority interests are subject to holder put rights and Company call rights at pre-established multiples of earnings before interest, taxes, depreciation and amortization and, as such, are considered redeemable at other than fair value.

The rights are exercisable at pre-established intervals or upon certain conditions, such as retirement.

The put and call rights are not legally detachable or separately exercisable and are deemed to be embedded in the related noncontrolling interests.

The Company, in purchasing affiliate equity, has the option to settle in cash or shares of the Company's common stock and is entitled to the cash flow associated with any purchased equity.

These minority interests in the affiliate are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Consolidated Statements of Operations within noncontrolling

The Company, in purchasing equity of the investment management subsidiary, has the option to settle in cash or shares of the Company's common stock and is entitled to the cash flow associated with any purchased equity.

The minority interests in the investment management subsidiary are recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests.

As of December 31, 2024, the carrying value of goodwill was $397.1 million.

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We perform indefinite-lived intangible asset impairment tests annually, or more frequently, should circumstances change, which could reduce the fair value of indefinite-lived intangible assets below their carrying value.

We completed our annual impairment assessment of these assets as of October 31, 2023, and no impairments were identified.

We completed our annual impairment assessment of

these assets as of October 31, 2024, and no impairments were identified.

For purposes of this assessment, we considered various qualitative factors for the investment management agreement intangible assets including, but not limited to, changes in (i) assets under management, (ii) operating margins, and (iii) net cash flows generated, and we determined that it was more likely than not that the fair value of indefinite-lived intangible assets was greater than their carrying value.

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Institutional account fees are generally earned based on an average of month-end balances.

In certain instances,

institutional fees may include performance related fees that are based on investment returns relative to benchmarks.

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

Fees for structured finance products consist of senior, subordinated and, in certain instances, incentive management fees.

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Distribution services are generally satisfied upon the sale of a fund share.

Shareholder servicing activities are generally services satisfied over time.

servicing activities are generally services satisfied over time.

We distribute our open-end funds through third-party financial intermediaries that comprise national, regional and independent broker-dealers.

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We provide administrative fund services to our U.S.

retail funds, ETFs and the majority of our closed-end funds and shareholder services to our U.S.

retail funds, ETFs and closed-end funds and shareholder services to our U.S.

retail funds.

15 unchanged sentences

Our methodology also includes estimates of future taxable income from operations, as well as the expiration dates and amounts of carryforwards related to net operating losses and capital losses.

These estimates are projected through the life of the related deferred tax assets based on

assumptions that we believe to be reasonable and consistent with demonstrated operating results.

These estimates are projected through the life of the related deferred tax assets based on assumptions that we believe to be reasonable and consistent with demonstrated operating results.

Changes in future operating results not currently forecasted may have a significant impact on the realization of deferred tax assets.

8 unchanged sentences

Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected within change in fair value of contingent consideration on the Consolidated Statements of Operations.

Contingent payment obligations related to our asset purchases, if estimable and probable of payment, are initially recorded at their estimated value and reviewed every reporting period for changes.

Contingent payment obligations related to our asset purchases, if estimable and probable of payment, are initially

recorded at their estimated value and reviewed every reporting period for changes.

Any changes to the estimated value are recorded as an update of the initial acquisition cost of the asset with a corresponding change to the estimated contingent payment obligation on the Consolidated Balance Sheets.

3 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 7. Management’s Discussion and Analysis