VIRTUS INVESTMENT PARTNERS, INC. 10-Q

Item 1. Financial Statements Virtus Investment Partners, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share data) September 30, 2025 December 31, 2024 Assets: Cash and cash equivalents $ 370,563 $ 265,888 Investments 149,512 119,216 Accounts receivable, net 106,470 117,207 Assets of consolidated investment products ("CIP") Cash and cash equivalents of CIP 90,769 133,694 Cash pledged or on deposit of CIP 911 727 Investments of CIP 2,238,718 2,270,717 Other assets of CIP 52,463 174,371 Furniture, equipment and leasehold improvements, net 22,689 22,718 Operating lease right-of-use assets 76,894 57,131 Intangible assets, net 339,396 378,229 Goodwill 397,098 397,098 Deferred taxes, net 19,081 23,206 Other assets 41,773 34,292 Total assets $ 3,906,337 $ 3,994,494 Liabilities and Equity Liabilities: Accrued compensation and benefits $ 162,566 $ 224,501 Accounts payable and accrued liabilities 51,663 49,492 Contingent consideration 37,351 63,505 Debt 390,622 232,130 Operating lease liabilities 94,255 70,037 Other liabilities 20,388 15,932 Liabilities of CIP Notes payable of CIP 2,030,580 2,171,946 Securities purchased payable and other liabilities of CIP 95,944 158,033 Total liabilities 2,883,369 2,985,576 Commitments and Contingencies (Note 12) Redeemable noncontrolling interests 103,191 107,282 Equity: Equity attributable to Virtus Investment Partners, Inc.: Common stock, $ 0.01 par value, 1,000,000,000 shares authorized; 12,317,249 shares issued and 6,753,444 shares outstanding at September 30, 2025; and 12,243,880 shares issued and 6,967,147 shares outstanding at December 31, 2024 123 122 Additional paid-in capital 1,335,254 1,319,108 Retained earnings (accumulated deficit) 322,321 268,221 Accumulated other comprehensive income (loss) 598 ( 364 ) Treasury stock, at cost, 5,563,805 and 5,276,733 shares at September 30, 2025 and December 31, 2024, respectively ( 739,594 ) ( 689,594 ) Total equity attributable to Virtus Investment Partners, Inc. 918,702 897,493 Noncontrolling interests 1,075 4,143 Total equity 919,777 901,636 Total liabilities and equity $ 3,906,337 $ 3,994,494 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents Virtus Investment Partners, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2025 2024 2025 2024 Revenues Investment management fees $ 183,762 $ 193,843 $ 549,329 $ 573,855 Distribution and service fees 12,517 13,567 37,238 41,007 Administration and shareholder service fees 18,869 18,560 54,924 55,546 Other income and fees 1,237 1,059 3,351 3,047 Total revenues 216,385 227,029 644,842 673,455 Operating Expenses Employment expenses 98,807 105,555 305,930 326,385 Distribution and other asset-based expenses 22,034 24,175 66,905 72,218 Other operating expenses 32,428 30,363 98,051 94,788 Other operating expenses of consolidated investment products ("CIP") 496 465 2,306 4,064 Change in fair value of contingent consideration — ( 4,000 ) ( 3,014 ) ( 7,300 ) Restructuring expense 693 — 693 1,487 Depreciation expense 1,922 2,330 6,273 6,628 Amortization expense 12,945 12,883 38,833 43,416 Total operating expenses 169,325 171,771 515,977 541,686 Operating Income (Loss) 47,060 55,258 128,865 131,769 Other Income (Expense) Realized and unrealized gain (loss) on investments, net 2,257 4,552 5,237 6,415 Realized and unrealized gain (loss) of CIP, net ( 14,913 ) ( 5,128 ) ( 27,766 ) ( 16,529 ) Other income (expense), net 536 548 2,671 1,695 Total other income (expense), net ( 12,120 ) ( 28 ) ( 19,858 ) ( 8,419 ) Interest Income (Expense) Interest expense ( 5,299 ) ( 5,807 ) ( 14,442 ) ( 17,099 ) Interest and dividend income 2,200 2,913 7,270 9,025 Interest and dividend income of investments of CIP 45,918 50,628 139,508 154,128 Interest expense of CIP ( 33,310 ) ( 38,063 ) ( 101,346 ) ( 120,035 ) Total interest income (expense), net 9,509 9,671 30,990 26,019 Income (Loss) Before Income Taxes 44,449 64,901 139,997 149,369 Income tax expense (benefit) 13,108 15,797 37,861 36,376 Net Income (Loss) 31,341 49,104 102,136 112,993 Noncontrolling interests 585 ( 8,124 ) 810 ( 24,541 ) Net Income (Loss) Attributable to Virtus Investment Partners, Inc. $ 31,926 $ 40,980 $ 102,946 $ 88,452 Earnings (Loss) per Share—Basic $ 4.73 $ 5.80 $ 15.02 $ 12.45 Earnings (Loss) per Share—Diluted $ 4.65 $ 5.71 $ 14.81 $ 12.23 Weighted Average Shares Outstanding—Basic 6,757 7,071 6,854 7,105 Weighted Average Shares Outstanding—Diluted 6,867 7,176 6,953 7,234 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents Virtus Investment Partners, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Net Income (Loss) $ 31,341 $ 49,104 $ 102,136 $ 112,993 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment, net of tax of $ 226 and $( 144 ) for the three months ended September 30, 2025 and 2024, respectively and $( 105 ) and $( 106 ) for the nine months ended September 30, 2025 and 2024, respectively 12 430 962 317 Other comprehensive income (loss) 12 430 962 317 Comprehensive income (loss) 31,353 49,534 103,098 113,310 Comprehensive (income) loss attributable to noncontrolling interests 585 ( 8,124 ) 810 ( 24,541 ) Comprehensive Income (Loss) Attributable to Virtus Investment Partners, Inc. $ 31,938 $ 41,410 $ 103,908 $ 88,769 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents Virtus Investment Partners, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, (in thousands) 2025 2024 Cash Flows from Operating Activities: Net income (loss) $ 102,136 $ 112,993 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation expense, intangible asset and other amortization 48,080 52,851 Stock-based compensation 19,231 24,259 Equity in earnings of equity method investments ( 2,698 ) ( 2,097 ) Distributions from equity method investments 3,639 3,227 Realized and unrealized (gains) losses on investments, net ( 5,238 ) ( 6,417 ) Change in fair value of contingent consideration ( 3,014 ) ( 7,300 ) Lease termination — ( 1,318 ) Deferred taxes, net 6,501 2,226 Changes in operating assets and liabilities: Sales (purchases) of investments, net ( 21,859 ) ( 16,322 ) Accounts receivable, net and other assets 14,196 9,994 Accrued compensation and benefits, accounts payable, accrued liabilities and other liabilities ( 61,429 ) ( 60,793 ) Operating activities of consolidated investment products ("CIP"): Realized and unrealized (gains) losses on investments of CIP, net 19,931 10,073 Purchases of investments by CIP ( 799,487 ) ( 924,052 ) Sales of investments by CIP 861,104 907,925 Net proceeds (purchases) of short-term investments and securities sold short by CIP ( 112 ) ( 353 ) Change in other assets and liabilities of CIP ( 736 ) ( 2,221 ) Amortization of discount on notes payable of CIP — 1,887 Net cash provided by (used in) operating activities 180,245 104,562 Cash Flows from Investing Activities: Capital expenditures ( 5,946 ) ( 3,658 ) Change in cash and cash equivalents of CIP due to consolidation (deconsolidation), net 522 ( 1,158 ) Net cash provided by (used in) investing activities ( 5,424 ) ( 4,816 ) Cash Flows from Financing Activities: Repayments on credit agreement ( 39,254 ) ( 17,063 ) Refinancing of credit agreement 201,191 — Payment of deferred financing costs ( 7,132 ) — Common stock dividends paid ( 48,326 ) ( 42,256 ) Repurchase of common shares ( 50,000 ) ( 32,368 ) Payment of contingent consideration ( 23,140 ) ( 24,234 ) Taxes paid related to net share settlement of restricted stock units ( 7,639 ) ( 11,271 ) Investment management subsidiary equity sales (purchases) ( 15,849 ) ( 29,014 ) Net contributions from (distributions to) noncontrolling interests 9,499 23,894 Payments on borrowings by CIP ( 133,596 ) ( 735,258 ) Borrowings by CIP — 738,064 Net cash provided by (used in) financing activities ( 114,246 ) ( 129,506 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,359 659 Net increase (decrease) in cash, cash equivalents and restricted cash 61,934 ( 29,101 ) Cash, cash equivalents and restricted cash, beginning of period 400,309 341,014 Cash, cash equivalents and restricted cash, end of period $ 462,243 $ 311,913 Non-Cash Financing Activities: Increase (decrease) to noncontrolling interests due to consolidation (deconsolidation) of CIP, net $ ( 10 ) $ ( 26,276 ) Common stock dividends payable $ 16,208 $ 15,950 (in thousands) September 30, 2025 December 31, 2024 Reconciliation of cash, cash equivalents and restricted cash Cash and cash equivalents $ 370,563 $ 265,888 Cash and cash equivalents of CIP 90,769 133,694 Cash pledged or on deposit of CIP 911 727 Cash, cash equivalents and restricted cash at end of period $ 462,243 $ 400,309 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Virtus Investment Partners, Inc. Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) Permanent Equity Temporary Equity Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Attributed To Virtus Investment Partners, Inc. Non- controlling Interests Total Equity Redeemable Non- controlling Interests (in thousands, except per share data) Shares Par Value Shares Amount Balances at June 30, 2024 7,082,071 $ 122 $ 1,304,176 $ 226,540 $ ( 200 ) 5,151,707 $ ( 661,963 ) $ 868,675 $ 3,443 $ 872,118 $ 129,450 Net income (loss) — — — 40,980 — — — 40,980 401 41,381 7,723 Foreign currency translation adjustments — — — — 430 — — 430 — 430 — Net subscriptions (redemptions) and other — — 5,187 — — — — 5,187 ( 168 ) 5,019 ( 39,062 ) Cash dividends declared ($ 2.25 per common share) — — — ( 16,222 ) — — — ( 16,222 ) — ( 16,222 ) — Repurchases of common shares ( 72,850 ) — — — — 72,850 ( 14,869 ) ( 14,869 ) — ( 14,869 ) — Issuance of common shares related to employee stock transactions 7,212 — — — — — — — — — — Taxes paid on stock-based compensation — — ( 827 ) — — — — ( 827 ) — ( 827 ) — Stock-based compensation — — 5,692 — — — — 5,692 — 5,692 — Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111 Balances at June 30, 2025 6,748,088 $ 123 $ 1,327,872 $ 307,409 $ 586 5,563,805 $ ( 739,594 ) $ 896,396 $ 1,933 $ 898,329 $ 123,097 Net income (loss) — — — 31,926 — — — 31,926 ( 606 ) 31,320 21 Foreign currency translation adjustments — — — — 12 — — 12 — 12 — Net subscriptions (redemptions) and other — — 2,262 — — — — 2,262 ( 252 ) 2,010 ( 19,927 ) Cash dividends declared ($ 2.40 per common share) — — — ( 17,014 ) — — — ( 17,014 ) — ( 17,014 ) — Issuance of common shares related to employee stock transactions 5,356 — — — — — — — — — — Taxes paid on stock-based compensation — — ( 673 ) — — — — ( 673 ) — ( 673 ) — Stock-based compensation — — 5,793 — — — — 5,793 — 5,793 — Balances at September 30, 2025 6,753,444 $ 123 $ 1,335,254 $ 322,321 $ 598 5,563,805 $ ( 739,594 ) $ 918,702 $ 1,075 $ 919,777 $ 103,191 Permanent Equity Temporary Equity Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Attributed To Virtus Investment Partners, Inc. Non- controlling Interests Total Equity Redeemable Non- controlling Interests (in thousands, except per share data) Shares Par Value Shares Amount Balances at December 31, 2023 7,087,728 $ 122 $ 1,300,999 $ 207,356 $ ( 87 ) 5,075,500 $ ( 644,464 ) $ 863,926 $ 4,363 $ 868,289 $ 104,869 Net income (loss) — — — 88,452 — — — 88,452 119 88,571 24,422 Foreign currency translation adjustments — — — — 317 — — 317 — 317 — Net subscriptions (redemptions) and other — — 5,249 — — — — 5,249 ( 806 ) 4,443 ( 31,180 ) Cash dividends declared ($ 6.05 per common share) — — — ( 44,510 ) — — — ( 44,510 ) — ( 44,510 ) — Repurchases of common shares ( 149,057 ) — — — — 149,057 ( 32,368 ) ( 32,368 ) — ( 32,368 ) — Issuance of common shares related to employee stock transactions 77,762 — — — — — — — — — — Taxes paid on stock-based compensation — — ( 11,271 ) — — — — ( 11,271 ) — ( 11,271 ) — Stock-based compensation — — 19,251 — — — — 19,251 — 19,251 — Balances at September 30, 2024 7,016,433 $ 122 $ 1,314,228 $ 251,298 $ 230 5,224,557 $ ( 676,832 ) $ 889,046 $ 3,676 $ 892,722 $ 98,111 Balances at December 31, 2024 6,967,147 $ 122 $ 1,319,108 $ 268,221 $ ( 364 ) 5,276,733 $ ( 689,594 ) $ 897,493 $ 4,143 $ 901,636 $ 107,282 Net income (loss) — — — 102,946 — — — 102,946 ( 932 ) 102,014 122 Foreign currency translation adjustments — — — — 962 — — 962 — 962 — Net subscriptions (redemptions) and other — — 2,457 — — — — 2,457 ( 2,136 ) 321 ( 4,213 ) Cash dividends declared ($ 6.90 per common share) — — — ( 48,846 ) — — — ( 48,846 ) — ( 48,846 ) — Repurchases of common shares ( 287,072 ) 1 ( 1 ) — — 287,072 ( 50,000 ) ( 50,000 ) — ( 50,000 ) — Issuance of common shares related to employee stock transactions 73,369 — — — — — — — — — — Taxes paid on stock-based compensation — — ( 7,639 ) — — — — ( 7,639 ) — ( 7,639 ) — Stock-based compensation — — 21,329 — — — — 21,329 — 21,329 — Balances at September 30, 2025 6,753,444 $ 123 $ 1,335,254 $ 322,321 $ 598 5,563,805 $ ( 739,594 ) $ 918,702 $ 1,075 $ 919,777 $ 103,191 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Virtus Investment Partners, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Organization and Business Virtus Investment Partners, Inc. (the "Company," "we," "us," "our" or "Virtus"), a Delaware corporation, operates in the investment management industry through its subsidiaries. The Company provides investment management and related services to institutions and individuals. The Company's investment strategies are offered to institutional clients through institutional separate and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products. The Company’s retail investment management services are provided to individuals through products consisting of: mutual funds registered pursuant to the Investment Company Act of 1940, as amended that include U.S. retail funds, exchange-traded funds ("ETFs"), Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S. retail funds and ETFs the "open-end funds"); closed-end funds (collectively with open-end funds, the "funds"); retail separate accounts sold through intermediaries and wealth advisory services provided to high net worth clients through our wealth management business. 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations. Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC"). The Company’s significant accounting policies, which have been consistently applied, are summarized in its 2024 Annual Report on Form 10-K. Recent Accounting Pronouncements New Accounting Standards Implemented In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740). This standard updates income tax disclosure requirements by requiring disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The Company adopted this standard on January 1, 2025. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements. New Accounting Standards Not Yet Implemented In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) . The standard requires enhanced disclosures of certain expense captions presented on the face of the Consolidated Income Statement. In January 2025, the FASB issued ASU 2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective Date which clarifies that the standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted with amendments to be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its condensed consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40). The standard amends certain aspects of the accounting for internal-use software costs by requiring an entity to capitalize software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The standard is 6 Table of Contents effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2027. Early adoption is permitted using a prospective, modified or retrospective transition approach. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its condensed consolidated financial statements. 3. Revenues The Company's revenues are recognized when a performance obligation is satisfied, which occurs when control of the services is transferred to clients. Investment management fees, distribution and service fees, and administration and shareholder service fees are generally calculated as a percentage of average net assets of the investment portfolios managed. The net asset values from which these fees are calculated are variable in nature and subject to factors outside of the Company's control, such as additional investments, withdrawals and market performance. Because of this, these fees are considered constrained until the end of the contractual measurement period (monthly or quarterly), which is when asset values are generally determinable. Investment Management Fees by Source The following table summarizes investment management fees by source: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Investment management fees Open-end funds $ 73,270 $ 79,428 $ 217,686 $ 237,991 Closed-end funds 15,635 14,942 45,369 43,741 Retail separate accounts 52,172 52,068 158,262 153,265 Institutional accounts 42,685 47,405 128,012 138,858 Total investment management fees $ 183,762 $ 193,843 $ 549,329 $ 573,855 4. Intangible Assets, Net Below is a summary of intangible assets, net: Definite-Lived Indefinite-Lived Total (in thousands) Gross Book Value Accumulated Amortization Net Book Value Net Book Value Net Book Value Balances at December 31, 2024 $ 809,064 $ ( 473,133 ) $ 335,931 $ 42,298 $ 378,229 Intangible amortization — ( 38,833 ) ( 38,833 ) — ( 38,833 ) Balances at September 30, 2025 $ 809,064 $ ( 511,966 ) $ 297,098 $ 42,298 $ 339,396 Definite-lived intangible asset amortization for the remainder of fiscal year 2025 and succeeding fiscal years is estimated as follows: Fiscal Year Amount (in thousands) Remainder of 2025 12,944 2026 50,797 2027 47,695 2028 42,033 2029 36,440 2030 and thereafter 107,189 Total $ 297,098 7 Table of Contents 5. Investments Investments consist primarily of investments in the Company's sponsored products. The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 14, at September 30, 2025 and December 31, 2024 were as follows: (in thousands) September 30, 2025 December 31, 2024 Investment securities - fair value $ 110,561 $ 83,771 Equity method investments (1) 19,345 20,286 Nonqualified retirement plan assets 19,606 15,159 Total investments $ 149,512 $ 119,216 (1) The Company's equity method investments are valued on a three-month lag based upon the availability of financial information. Investment Securities - fair value Investment securities - fair value consist of investments in the Company's sponsored funds and in separate accounts. The composition of the Company’s investment securities - fair value was as follows: September 30, 2025 December 31, 2024 (in thousands) Cost Fair Value Cost Fair Value Investment Securities - fair value Sponsored funds $ 53,466 $ 56,383 $ 63,220 $ 63,296 Equity securities 19,020 22,124 17,406 19,019 Debt securities 32,059 32,054 1,457 1,456 Total investment securities - fair value $ 104,545 $ 110,561 $ 82,083 $ 83,771 For the three and nine months ended September 30, 2025, the Company recognized net realized gains of $ 0.8 million and $ 0.8 million, respectively, related to its investment securities - fair value. For the three and nine months ended September 30, 2024, the Company recognized net realized gains of $ 0.5 million and $ 1.2 million, respectively, related to its investment securities - fair value. 6. Fair Value Measurements The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 14, as of September 30, 2025 and December 31, 2024 by fair value hierarchy level were as follows: September 30, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 331,918 $ — $ — $ 331,918 Investment securities - fair value Sponsored funds 56,383 — — 56,383 Equity securities 22,124 — — 22,124 Debt securities — 2,403 29,651 32,054 Nonqualified retirement plan assets 19,606 — — 19,606 Total assets measured at fair value $ 430,031 $ 2,403 $ 29,651 $ 462,085 Liabilities Contingent consideration $ — $ — $ 20,000 $ 20,000 Total liabilities measured at fair value $ — $ — $ 20,000 $ 20,000 8 Table of Contents December 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 225,736 $ — $ — $ 225,736 Investment securities - fair value Sponsored funds 63,296 — — 63,296 Equity securities 19,019 — — 19,019 Debt securities — 1,456 — 1,456 Nonqualified retirement plan assets 15,159 — — 15,159 Total assets measured at fair value $ 323,210 $ 1,456 $ — $ 324,666 Liabilities Contingent consideration $ — $ — $ 36,100 $ 36,100 Total liabilities measured at fair value $ — $ — $ 36,100 $ 36,100 The following is a discussion of the valuation methodologies used for the Company’s assets measured at fair value: Cash equivalents represent investments in money market funds. Cash investments in money market funds are valued using published net asset values and are classified as Level 1. Sponsored funds represent investments in funds for which the Company acts as the investment manager. The fair values of U.S. retail funds and global funds are determined based on their published net asset values and are categorized as Level 1. The fair value of closed-end funds and ETFs is determined based on the official closing price on the exchange on which they are traded and are categorized as Level 1. Equity securities represent securities traded on active markets, are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1. Debt securities represent investments in corporate and government bonds and the note securities of collateralized loan obligations ("CLO"). The fair values of corporate and government bonds traded on active markets are valued at the official closing price on the exchange on which the securities are primarily traded and are categorized as Level 1. Debt securities for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service, are categorized as Level 2. The fair values of note securities of CLOs are based on valuations received from an independent valuation firm and are categorized as Level 3. The following table presents a reconciliation of beginning and ending balances of the Company's Level 3 debt securities: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Debt securities, beginning of period $ — $ — $ — $ — Purchases (sales), net 29,651 24,443 29,651 24,443 Debt securities, end of period $ 29,651 $ 24,443 $ 29,651 $ 24,443 Nonqualified retirement plan assets represent U.S. retail funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1. Contingent consideration represents liabilities associated with contingent payment arrangements made in connection with the Company's business combinations. In these contingent payment arrangements, the Company agrees to pay additional transaction consideration to the seller based on future performance. Contingent consideration is remeasured at fair value each reporting date using a simulation model with the assistance of an independent valuation firm and approved by management and are categorized as Level 3. 9 Table of Contents The following table presents a reconciliation of beginning and ending balances of the Company's contingent consideration liabilities: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Contingent consideration, beginning of period $ 20,000 $ 38,408 $ 36,100 $ 56,200 Reduction for payments made — — ( 13,086 ) ( 14,492 ) Increase (reduction) of liability related to re-measurement of fair value — ( 4,000 ) ( 3,014 ) ( 7,300 ) Contingent consideration, end of period $ 20,000 $ 34,408 $ 20,000 $ 34,408 The contingent consideration liability at September 30, 2025 of $ 20.0 million is related to the NFJ Group transaction. This liability is measured using an options pricing model valuation technique. The most significant unobservable inputs used relate to the revenue growth rates, discount rates (range of 6.06 % - 6.12 %) and the market price of risk adjustment ( 6.00 %). Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments. 7. Equity Transactions Dividends Declared On August 13, 2025, the Company declared a quarterly cash dividend of $ 2.40 per common share to be paid on November 14, 2025 to shareholders of record at the close of business on October 31, 2025. Common Stock Repurchases During the nine months ended September 30, 2025, the Company repurchased 287,072 common shares under its share repurchase program at a weighted average price of $ 174.14 per share, for a total cost, including fees and expenses, of $ 50.0 million. On May 14, 2025 the Board of Directors authorized an additional 750,000 shares to be repurchased under the program. There were no share repurchases during the three months ended September 30, 2025. As of September 30, 2025, 866,240 shares remained available for repurchase. Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price and prevailing market and business conditions. The program, which has no specified term, may be suspended or terminated at any time. 8. Stock-Based Compensation Equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), stock options and unrestricted shares of common stock, may be granted to officers, employees and directors of the Company pursuant to the Company's Amended and Restated Omnibus Incentive and Equity Plan (the "Omnibus Plan"). At September 30, 2025, 688,839 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan. Stock-based compensation expense is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Stock-based compensation expense $ 5,688 $ 8,239 $ 19,231 $ 24,259 Restricted Stock Units Each RSU entitles the holder to one share of common stock when the restriction expires. RSUs may be time-vested or performance-contingent PSUs that convert into RSUs after performance measurement is complete and generally vest in one to three years . Shares that are issued upon vesting are newly issued shares from the Omnibus Plan and are not issued from treasury stock. 10 Table of Contents RSU activity, inclusive of PSUs, for the nine months ended September 30, 2025 is summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2024 317,489 $ 205.86 Granted 167,110 $ 173.85 Forfeited ( 31,913 ) $ 218.76 Settled ( 112,055 ) $ 202.91 Outstanding at September 30, 2025 340,631 $ 189.92 For the nine months ended September 30, 2025 and 2024, a total of 43,532 and 49,086 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $ 7.6 million and $ 11.3 million, respectively, in minimum employee tax withholding obligations. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting. During the nine months ended September 30, 2025 and 2024, the Company granted 37,777 and 26,757 PSUs, respectively, that contain performance-based metrics in addition to a service condition. Compensation expense for PSUs is generally recognized over a three-year service period based upon the value determined using a combination of (i) the intrinsic value method for awards that contain a performance metric that represents a "performance condition" in accordance with Accounting Standards Codification ("ASC") 718, Stock Compensation ("ASC 718") and (ii) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718. Compensation expense for PSU awards that contain a market condition is fixed at the date of grant and will not be adjusted in future periods based upon the achievement of the market condition. Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period. As of September 30, 2025, unamortized stock-based compensation expense for unvested RSUs and PSUs was $ 34.1 million with a weighted-average remaining contractual life of 1.3 years. 9. Earnings (Loss) Per Share Earnings (loss) per share ("EPS") is calculated in accordance with ASC 260, Earnings per Share . Basic EPS is computed by dividing net income (loss) attributable to Virtus Investment Partners, Inc. by the weighted-average number of common shares outstanding for the period, excluding dilution for potential common stock issuances. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, including shares issuable upon the vesting of RSUs and stock option exercises using the treasury stock method, as determined under the if-converted method. The computation of basic and diluted EPS is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2025 2024 2025 2024 Net Income (Loss) $ 31,341 $ 49,104 $ 102,136 $ 112,993 Noncontrolling interests 585 ( 8,124 ) 810 ( 24,541 ) Net Income (Loss) Attributable to Virtus Investment Partners, Inc. $ 31,926 $ 40,980 $ 102,946 $ 88,452 Shares: Basic: Weighted-average number of shares outstanding 6,757 7,071 6,854 7,105 Plus: Incremental shares from assumed conversion of dilutive instruments 110 105 99 129 Diluted: Weighted-average number of shares outstanding 6,867 7,176 6,953 7,234 Earnings (Loss) per Share—Basic $ 4.73 $ 5.80 $ 15.02 $ 12.45 Earnings (Loss) per Share—Diluted $ 4.65 $ 5.71 $ 14.81 $ 12.23 11 Table of Contents The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Restricted stock units 2 12 26 — Total anti-dilutive securities 2 12 26 — 10. Income Taxes In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances at each interim period. On a quarterly basis, the estimated annual effective tax rate is adjusted, as appropriate, based upon changes in facts and circumstances, if any, compared to those forecasted at the beginning of the fiscal year and at each interim period thereafter. The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 27.0 % and 24.4 % for the nine months ended September 30, 2025 and 2024, respectively. The higher estimated effective tax rate for the nine months ended September 30, 2025 was primarily due to a change in valuation allowances in the current year related to the tax effects of lower realized and unrealized gains on Company investments compared to the prior year. On July 4, 2025, H.R. 1, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company will continue to evaluate the potential impact of the OBBBA on future periods as further guidance becomes available; however, the Company does not anticipate it will have a material impact on the Company’s consolidated financial statements. 11. Debt Credit Agreement On September 26, 2025, the Company refinanced its existing credit agreement by entering into a new credit agreement (the “Credit Agreement”). The Credit Agreement provides for (i) a $ 400.0 million term loan for the Company with a seven-year term (the "Term Loan") expiring in September 2032, and (ii) a $ 250.0 million revolving credit facility with a five-year term expiring in September 2030. A portion of the proceeds of the refinancing have been used to repay the $ 234.7 million outstanding on the previous term loan. The Company has the right, subject to customary conditions specified in the Credit Agreement, to request additional revolving credit facility commitments and additional term loans to be made under the Credit Agreement. In accordance with ASC 835, Interest , the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheets net of related debt issuance costs, which were $ 9.4 million as of September 30, 2025. Amounts outstanding under the Credit Agreement bear interest at an annual rate equal to, at the option of the Company, either Term SOFR for interest periods of one, three or six months or an alternate base rate, in either case plus an applicable margin. The applicable margins are 2.25 %, in the case of a SOFR-based Term Loan, and 1.25 %, in the case of an alternate base rate loan. The Company is also required to pay a quarterly commitment fee on the average unused amount of the revolving credit facility which ranges from 0.15 % to 0.25 %, based on the secured net leverage ratio of the Company as of the last day of the preceding fiscal quarter. The Term Loan will amortize at the rate of 1.00 % per annum, payable in equal quarterly installments on the last day of each March, June, September and December (commencing on December 31, 2025), based on the aggregate principal amount of the Term Loan's outstanding balance on the closing date. In addition, the Credit Agreement requires that the term loans be mandatorily prepaid with excess cash flow each fiscal year commencing with the fiscal year ended December 31, 2026 if the secured net leverage ratio at the end of such excess cash flow period is (a) greater than 3 :1, 50 %, (b) greater than or equal to 2.5 :1 but less than or equal to 3 :1, 25 %, and (c) less than 2.5 :1, 0 %, (d) 50 % of the net proceeds of certain asset sales, casualty or condemnation events, subject to customary reinvestment rights; and (e) 100 % of the proceeds of any indebtedness incurred to refinance the term loans or other refinancing indebtedness as well as indebtedness incurred other than indebtedness 12 Table of Contents permitted to be incurred by the Credit Agreement. At any time, upon timely notice, the Company may terminate the Credit Agreement in full, reduce the commitment under the facility in minimum specified increments or prepay loans in whole or in part, and in the case of any term loans that are prepaid in connection with a “repricing transaction” occurring within the six-month period following the closing date of the Credit Agreement, a 1.00 % premium. The Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds and qualifications. In addition, the Credit Agreement contains a financial performance covenant that is only applicable when greater than 35 % of the revolving credit facility is outstanding, requiring a maximum leverage ratio, as of the last day of each of the four fiscal quarter periods, of no greater than the levels set forth in the Credit Agreement. Future minimum Term Loan payments (exclusive of any mandatory excess cash flow repayments) as of September 30, 2025 were as follows: Amount Year (in thousands) Remainder of 2025 $ 1,000 2026 4,000 2027 4,000 2028 4,000 2029 4,000 2030 and thereafter 383,000 Total $ 400,000 12. Commitments and Contingencies Legal Matters The Company is involved from time to time in litigation and arbitration, as well as examinations, inquiries and investigations by various regulatory bodies, involving its compliance with, among other things, securities laws, client investment guidelines, laws governing the activities of broker-dealers and other laws and regulations affecting its products and other activities. The Company records a liability when it believes that it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Based on information currently available, available insurance coverage, indemnities and established reserves, the Company believes that the outcomes of its legal and regulatory proceedings are not likely, either individually or in the aggregate, to have a material adverse effect on the Company's results of operations, cash flows or consolidated financial condition. However, in the event of unexpected subsequent developments, and given the inherent unpredictability of these legal and regulatory matters, the Company can provide no assurance that its assessment of any legal matter will reflect the ultimate outcome, and an adverse outcome in certain matters could have a material adverse effect on the Company's results of operations or cash flows in particular quarterly or annual periods. 13. Redeemable Noncontrolling Interests Redeemable noncontrolling interests Minority interests held in a majority-owned investment management subsidiary 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 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 13 Table of Contents with any purchased equity. The minority interests 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. Redeemable noncontrolling interests for the nine months ended September 30, 2025 included the following amounts: Redeemable Noncontrolling Interests (in thousands) CIP Investment Manager Total Balances at December 31, 2024 $ 45,667 $ 61,615 $ 107,282 Net income (loss) attributable to noncontrolling interests 2,755 4,524 7,279 Changes in redemption value (1) — ( 7,157 ) ( 7,157 ) Total net income (loss) attributable to noncontrolling interests 2,755 ( 2,633 ) 122 Investment management subsidiary equity sales (purchases) — ( 15,849 ) ( 15,849 ) Net subscriptions (redemptions) and other 16,063 ( 4,427 ) 11,636 Balances at September 30, 2025 $ 64,485 $ 38,706 $ 103,191 (1) Relates to noncontrolling interests redeemable at other than fair value. Equity awards of majority owned investment management subsidiary The Company also issues equity-based profit-interest awards of a majority owned investment manager to certain of its employees, with certain awards having up to a three-year vesting period when issued. These profit-interest awards are subject to holder put rights and Company call rights at established multiples of earnings before interest, taxes, depreciation and amortization, with certain awards also subject to pre-established thresholds. The awards are accounted for as cash-settled liability awards under ASC 718, with changes in value at each reporting date recognized as compensation expense over the requisite service period, if any, in the Company’s Consolidated Statements of Operations. The awards are classified as a liability within accrued compensation and benefits on the Consolidated Balance Sheets until the awards are settled. Additionally, these awards have a right to participate in distributions of the investment manager which are recorded as employment expense in the Company’s Condensed Consolidated Statements of Operations. Accrued compensation associated with these awards was $ 16.5 million and $ 19.4 million at September 30, 2025 and December 31, 2024, respectively. Compensation expense related to these awards totaled $( 1.4 ) million and $ 5.5 million for the nine months ended September 30, 2025 and 2024, respectively. 14. Consolidation The condensed consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated. A voting interest entity ("VOE") is consolidated when the Company is considered to have a controlling financial interest, which is typically present when the Company owns a majority of the voting interest in an entity or otherwise has the power to govern the financial and operating policies of the entity. The Company evaluates any variable interest entity ("VIE") in which the Company has a variable interest for consolidation. A VIE is an entity in which either (i) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support, or (ii) where, as a group, the holders of the equity investment at risk do not possess any one of the following: (a) the power through voting or similar rights to direct the activities that most significantly impact the entity's economic performance, (b) the obligation to absorb expected losses or the right to receive expected residual returns of the entity, or (c) proportionate voting and economic interests and where substantially all of the entity's activities either involve or are conducted on behalf of an investor with disproportionately fewer voting rights. If an entity has any of these characteristics, it is considered a VIE and is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that has both the power to direct the activities that most significantly impact the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. In the normal course of its business, the Company sponsors various investment products, some of which are consolidated by the Company. CIP includes both VOEs, made up primarily of U.S. retail funds and ETFs in which the Company holds a controlling financial interest, and VIEs, which consist of collateralized loan obligations ("CLO") and certain global and private funds ("GF") of which the Company is considered the primary beneficiary. The consolidation and deconsolidation of these investment products have no impact on the Company's net income (loss). The Company's risk with respect to these 14 Table of Contents investment products is limited to its beneficial interests in these products. The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company's investments in, and fees generated from, these products. The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024: As of September 30, 2025 December 31, 2024 VOEs VIEs VOEs VIEs (in thousands) CLOs GFs CLOs GFs Cash and cash equivalents $ 4,048 $ 85,952 $ 1,680 $ 5,179 $ 125,995 $ 3,247 Investments 52,332 2,079,838 106,548 40,678 2,141,626 88,413 Other assets 605 50,259 1,599 403 172,707 1,261 Notes payable — ( 2,030,580 ) — — ( 2,171,946 ) — Securities purchased payable and other liabilities ( 371 ) ( 94,366 ) ( 1,207 ) ( 4,271 ) ( 151,922 ) ( 1,840 ) Noncontrolling interests ( 14,512 ) ( 1,075 ) ( 49,973 ) ( 12,452 ) ( 4,143 ) ( 33,215 ) Net interests in CIP $ 42,102 $ 90,028 $ 58,647 $ 29,537 $ 112,317 $ 57,866 Consolidated CLOs The majority of the Company's CIP that are VIEs are CLOs. A majority-owned consolidated private fund, whose primary purpose is to invest in CLOs for which the Company serves as the collateral manager, is also included. At September 30, 2025, the Company consolidated seven CLOs. On September 12, 2025, the Company issued a new CLO and in conjunction with the issuance, made a $ 29.7 million investment in the subordinated notes. The financial information of CLOs is included in the Company's condensed consolidated financial statements on a one-month lag based upon the availability of their financial information. Investments of CLOs The CLOs held investments of $ 2.1 billion at September 30, 2025, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries. These bank loan investments mature at various dates between 2025 and 2033 and generally pay interest at SOFR plus a spread. Notes Payable of CLOs The CLOs held notes payable with a total value, at par, of $ 2.3 billion at September 30, 2025, consisting of senior secured floating rate notes payable with a par value of $ 2.0 billion and subordinated notes with a par value of $ 238.8 million. These note obligations bear interest at variable rates based on SOFR plus a pre-defined spread. The Company's beneficial interests and maximum exposure to loss related to these consolidated CLOs is limited to (i) ownership in the subordinated notes and (ii) accrued management fees. The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, Consolidation (Topic 810) ("ASU 2014-13"), results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at September 30, 2025, as shown in the table below: (in thousands) Subordinated notes $ 88,609 Accrued investment management fees 1,419 Total Beneficial Interests $ 90,028 15 Table of Contents The following table represents income and expenses of the consolidated CLOs included in the Company’s Condensed Consolidated Statements of Operations for the period indicated: Nine Months Ended September 30, 2025 (in thousands) Income: Realized and unrealized gain (loss), net $ ( 31,172 ) Interest income 133,080 Total Income 101,908 Expenses: Other operating expenses 1,322 Interest expense 101,346 Total Expense 102,668 Noncontrolling interests 932 Net Income (Loss) Attributable to CLOs $ 172 The following table represents the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation: Nine Months Ended September 30, 2025 (in thousands) Distributions received and unrealized gains (losses) on the subordinated notes held by the Company $ ( 6,795 ) Investment management fees 6,967 Total Economic Interests $ 172 Fair Value Measurements of CIP The assets and liabilities of CIP measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 by fair value hierarchy level were as follows: As of September 30, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 85,952 $ — $ — $ 85,952 Debt investments 53 2,163,678 28,649 2,192,380 Equity investments 45,736 25 577 46,338 Total assets measured at fair value $ 131,741 $ 2,163,703 $ 29,226 $ 2,324,670 Liabilities Notes payable $ — $ 2,030,580 $ — $ 2,030,580 Short sales 272 — — 272 Total liabilities measured at fair value $ 272 $ 2,030,580 $ — $ 2,030,852 16 Table of Contents As of December 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 127,695 $ — $ — $ 127,695 Debt investments — 2,239,924 6,676 2,246,600 Equity investments 22,993 111 1,013 24,117 Total assets measured at fair value $ 150,688 $ 2,240,035 $ 7,689 $ 2,398,412 Liabilities Notes payable $ — $ 2,171,946 $ — $ 2,171,946 Short sales 356 — — 356 Total liabilities measured at fair value $ 356 $ 2,171,946 $ — $ 2,172,302 The following is a discussion of the valuation methodologies used for the assets and liabilities of the Company’s CIP measured at fair value: Level 1 assets represent cash investments in money market funds and debt and equity investments that are valued using published net asset values or the official closing price on the exchange on which the securities are traded. Level 2 assets represent most debt securities (including bank loans) and certain equity securities (including non-U.S. securities), for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service. Debt investments, other than bank loans, are valued based on quotations received from independent pricing services or from dealers who make markets in such securities. Bank loan investments, which are included as debt investments, are generally priced at the average mid-point of bid and ask quotations obtained from a third-party pricing service. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics. Level 3 assets include debt and equity securities that are not widely traded, are illiquid or are priced by dealers based on pricing models used by market makers in the security. These securities are valued using unadjusted prices from an independent pricing service. Level 1 liabilities consist of short sales transactions in which a security is sold that is not owned or is owned but there is no intention to deliver, in anticipation that the price of the security will decline. Short sales are recorded on the Condensed Consolidated Balance Sheets within other liabilities of CIP and are classified as Level 1 based on the underlying equity security. Level 2 liabilities consist of notes payable issued by CLOs and are measured using the measurement alternative in ASU 2014-13. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (i) the fair value of the beneficial interests held by the Company, and (ii) the carrying value of any beneficial interests that represent compensation for services. The fair value of the beneficial interests held by the Company is based on third-party pricing information without adjustment. The securities purchased payable at September 30, 2025 and December 31, 2024 approximated fair value due to the short-term nature of the instruments. 17 Table of Contents The following table is a reconciliation of assets of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value: Nine Months Ended September 30, (in thousands) 2025 2024 Balance at beginning of period $ 7,689 $ 37,062 Realized and unrealized gains (losses), net ( 1,872 ) 918 Purchases 2,398 19 Sales ( 49,282 ) ( 36,452 ) Transfers to Level 2 ( 50,208 ) ( 71,236 ) Transfers from Level 2 120,501 125,527 Balance at end of period (1) $ 29,226 $ 55,838 (1) The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/unobservable at period end. Nonconsolidated VIEs The Company serves as the collateral manager for other CLOs that are not consolidated. The assets and liabilities of these CLOs reside in bankruptcy remote, special purpose entities in which the Company has no ownership of, nor holds any notes issued by, the CLOs, and provides neither recourse nor guarantees. The Company has determined that the investment management fees it receives for serving as collateral manager for these CLOs did not represent a variable interest as (i) the fees the Company earns are compensation for services provided and are commensurate with the level of effort required to provide the investment management services, (ii) the Company does not hold other interests in the CLOs that individually, or in the aggregate, would absorb more than an insignificant amount of the CLOs' expected losses or receive more than an insignificant amount of the CLOs' expected residual return, and (iii) the investment management arrangement only includes terms, conditions and amounts that are customarily present in arrangements for similar services negotiated at arm's length. The Company has interests in certain other VIEs that the Company does not consolidate as it is not the primary beneficiary since its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance. At September 30, 2025, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $ 25.8 million. 15. Segments The key GAAP measure of segment profit or loss that the chief operating decision maker ("CODM") uses to evaluate the Company’s financial performance and allocate resources of the Company is net income, as reported on the Company’s Condensed Consolidated Statements of Operations. In addition, the CODM uses net income in deciding whether to reinvest profits or allocate profits to other uses of capital, such as for acquisitions or to pay dividends. All expense categories on the Condensed Consolidated Statements of Operations are significant and there are no other significant segment expenses that would require disclosure. Assets provided to the CODM are consistent with those reported on the Condensed Consolidated Balance Sheets. 18 Table of Contents