What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 89 added, 93 removed, 383 unchanged (32% of the section changed)

1 unchanged sentence

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

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.

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 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.

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

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

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Our retail distribution resources in the U.S.

consist of regional sales professionals, a national account relationship group and specialized teams for retirement and ETFs.

retail funds and retail separate accounts are distributed through financial intermediaries.

consist of regional sales professionals, a national account relationship group and specialized teams for retirement and exchange traded funds ("ETFs").

retail funds, ETFs and intermediary sold retail separate accounts are distributed through financial intermediaries.

We have broad distribution access in 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 wealth management business is marketed directly to individual clients by financial advisory teams at our Advisers.

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

Market Developments

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and global equity markets increased in value in 2025, as evidenced by increases in major indices as noted in the following table:

December 31, As of Change

December 31, Change

Index 2025 2024 %

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Financial Highlights

▪ 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.

▪ Total revenues were $852.9 million in 2025, a decrease of $54.1 million, or 6.0%, compared to total revenues of $906.9 million in 2024.

▪ Operating income was $168.7 million, in 2025, a decrease of $13.8 million, or 7.6%, compared to $182.5 million in 2024.

▪ Net income per diluted share was $19.97 in 2025, an increase of $3.08, or 18.2%, compared to net income per diluted share of $16.89 in 2024.

Crescent Cove Advisors

On December 15, 2025, the Company completed the acquisition of a 35% minority interest in Crescent Cove Advisors, LP ("Crescent Cove"), an investment manager specializing in private capital solutions, for $41.1 million.

Keystone National Group

On December 5, 2025, the Company entered into an agreement to acquire a majority interest in Keystone National Group ("Keystone"), an investment manager specializing in asset-centric private credit.

Under the agreement, the Company would purchase a majority interest in Keystone for consideration of $200.0 million at closing and up to an additional $170.0 million of deferred consideration, including earnout payments subject to the achievement of future revenue targets.

The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, necessary regulatory approvals and client approvals, including approvals by the Keystone registered fund shareholders.

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.

Total sales were $23.4 billion in 2025, a decrease of $3.3 billion, or 12.4%, from $26.8 billion in 2024.

Net flows were $(18.9) billion in 2025 compared to net flows of $(10.4) billion in 2024.

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, 2023 included $15.8 billion from positive market performance, partially offset by $(10.4) billion of net outflows.

At December 31, 2025, total assets under management were $159.5 billion, representing a decrease of $15.5 billion, or 8.9%, from December 31, 2024.

The change in total assets under management from December 31, 2024 included $(18.9) billion of net outflows partially offset by $5.9 billion from positive market performance.

Assets Under Management by Product

The following table summarizes our assets under management by product:

As of December 31, Change

(in millions) 2024 2023 $ %

(in millions) As of December 31, Change

Product 2025 2024 $ %

Open-End Funds (1) $ 52,759 $ 56,073 $ (3,314) (5.9) %

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

retail funds, global funds and ETFs.

retail funds, ETFs and global funds.

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

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

(4) Averages are calculated as follows:

– Funds - average daily or weekly balances

– Retail Separate Accounts - prior-quarter ending balances

– Institutional Accounts - average of month-end balances

(4) Calculated according to revenue earning basis that includes average daily, weekly, monthly beginning balance, monthly ending balance, or quarter beginning and ending balance, as well as quarter beginning or ending spot balance.

Asset Flows by Product

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

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.

retail funds, ETFs and global funds.

(2) Represents open-end and closed-end fund distributions net of reinvestments, 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.

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The following table summarizes assets under management by asset class:

As of December 31, Change % of Total

(in millions) 2024 2023 $ % 2024 2023

(in millions) As of December 31, Change % of Total

Asset Class 2025 2024 $ % 2025 2024

Equity $ 82,584 $ 100,792 $ (18,208) (18.1) % 51.7 % 57.6 %

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(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.

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

Average Assets Under Management and Average Fees Earned

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(in millions) (4)

2024 2023 2024 2023

Products 2025 2024 2025 2024

Open-End Funds (1) 46.6 50.0 $ 55,059 $ 57,039

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

retail funds, global funds and ETFs.

retail funds, ETFs and global funds.

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

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

(4) Averages are calculated as follows:

– Funds - average daily or weekly balances

– Retail Separate Accounts - prior-quarter ending balances

– Institutional Accounts - average of month-end balances

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.

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

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.

Retail separate account fees, which include fees for 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 was flat for 2024 compared to the prior year.

The average fee rate earned decreased for the year ended December 31, 2025 compared to the prior year primarily due to a shift in the asset mix in our open-end funds to investment strategies that have a lower fee rate, partially offset by an increase in average fee rates of our institutional accounts due to the redemptions of lower fee earning assets.

Investment Performance

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Alternatives (2) 53% 60% 60% 71%

(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 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.

Multi-Asset (3) 8% 41% 38% 41%

Total 24% 39% 36% 64%

(1) Percentage outperforming benchmark is reported as the percentage of assets under management that have outperformed benchmarks across the indicated periods.

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

Fund investment performance is net of fees.

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

Past performance is not indicative of future results.

As of December 31, 2024, 32 of 70, or 46%, of our rated U.S.

retail funds received an overall rating of 4 or 5 stars representing 71% of our total U.S.

retail fund assets under management (1) .

By comparison, 32.5% of Morningstar's fund population is given a 4- or 5-star rating (2) .

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

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.

(2) Morningstar ratings are based on risk-adjusted returns.

Strong ratings are not indicative of positive fund performance.

Certain strategies do not have stated benchmarks, such as wealth management, structured products, and certain other multi-asset accounts and therefore are excluded from the analysis.

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

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

Results of Operations - December 31, 2025 compared to December 31, 2024

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Earnings (loss) per share-diluted $ 19.97 $ 16.89 $ 3.08 18.2 %

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.

In 2025, total revenues decreased $54.1 million, or 6.0%, to $852.9 million from $906.9 million in 2024, and operating income decreased by $13.8 million, or 7.6%, to $168.7 million in 2025 from $182.5 million in 2024, due primarily to decreased revenues as mentioned above.

Revenues by source were as follows:

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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 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.

Investment management fees decreased by $48.8 million, or 6.3%, for the year ended December 31, 2025 compared to the prior year, primarily due to decreased average assets under management and a decreased average fee rate.

Distribution and Service Fees

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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.

Fund administration and shareholder service fees decreased by $1.0 million, or 1.4%, for the year ended December 31, 2025 compared to the prior year primarily due to the decrease in average assets under management of our U.S.

retail funds partially offset by increased closed-end fund administrative fees.

Other Income and Fees

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

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.

Employment expenses decreased by $31.9 million, or 7.4%, for the year ended December 31, 2025 primarily due to a decrease in profit- and sales-based compensation and stock-based compensation.

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

Distribution and other asset-based expenses decreased $7.2 million, or 7.5%, for the year ended December 31, 2025 primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Other Operating Expenses

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 increased $2.8 million, or 2.2% during the year ended December 31, 2025 compared to the prior year primarily due to increased legal and professional fees associated with the Keystone acquisition and the refinancing of the Company's credit facility.

Other Operating Expenses of CIP

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.

Other operating expenses of CIP decreased $1.2 million, or 16.8%, from the prior year primarily due to refinancing activities associated with two CLOs in the prior year period.

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

The change in fair value of contingent consideration for the year ended December 31, 2025 was primarily attributable to changes in underlying performance estimates and the passage of time.

Depreciation Expense

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

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.

Depreciation expense decreased by $1.0 million, or 10.8%, for the year ended December 31, 2025 compared to the prior year primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease.

Amortization Expense

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

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.

Amortization expense decreased $4.5 million, or 8.0%, for the year ended December 31, 2025 compared to the prior year,

primarily due to intangible assets becoming fully amortized.

Other Income (Expense), net

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Realized and unrealized gain (loss) on investments, net changed during the year ended December 31, 2025 by $1.9 million as compared to the prior year.

The realized and unrealized gains and losses reflect changes in overall market conditions for the year.

The change for the year ended December 31, 2025 is primarily attributable to an increase in unrealized gains due to changes in market values of our investments.

Realized and Unrealized Gain (Loss) of CIP, net

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Other Income (Expense), net

Other income (expense), net changed by $2.5 million during the year ended December 31, 2024 compared to the prior year primarily due to changes in the gains and losses on our equity method investments.

Other income (expense), net changed by $1.4 million during the year ended December 31, 2025 compared to the prior year primarily due to changes in the gains and losses on our equity method investments, as well as foreign currency gains and losses.

Interest Income (Expense), net

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Interest Expense

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 expense decreased $0.7 million, or 3.0%, for the year ended December 31, 2025, compared to the prior year primarily due to lower average interest rates during the current year partially offset by higher average debt during the current year.

Interest and Dividend Income

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Interest and Dividend Income of Investments of CIP

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 and dividend income of investments of CIP decreased $17.3 million, or 8.4%, compared to the prior year.

The decrease is primarily attributable to lower average interest rates in the current year partially offset by the addition of new CLOs in the fourth quarters of 2024 and 2025.

Interest Expense of CIP

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

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.

Interest expense of CIP decreased by $20.3 million, or 12.6%, compared to the prior year.

The decrease is primarily due to lower average interest rates in the current year period partially offset by the addition of new CLOs in the fourth quarters of 2024 and 2025.

Income Tax Expense (Benefit)

The provision for income taxes reflected U.S.

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

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.

federal, state and local taxes and foreign taxes at an estimated effective tax rate of 27.4% and 26.7% for 2025 and 2024, respectively.

The higher estimated effective tax rate for 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, along with the establishment of a valuation allowance on certain state tax attributes.

Effects of Inflation

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The following tables summarize certain financial data relating to our liquidity and capital resources:

December 31, Change

(in thousands) 2024 2023 $ %

(in thousands) December 31, Change

Balance Sheet Data 2025 2024 $ %

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Total equity 934,845 901,636 33,209 3.7 %

Years Ended December 31, Change

(in thousands)

provided by (used in) 2024 2023 $ %

(in thousands) Years Ended December 31, Change

Cash Flow Data

provided by (used in) 2025 2024 $ %

Operating activities $ (67,199) $ 1,755 $ (68,954) (3,929.0) %

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In addition to operating activities, other uses of cash could include:

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

(i) investments in organic growth, including

seeding or launching new products and expanding distribution;

(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;

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

(v) investments in our technology infrastructure;

1 unchanged sentence

(vii) integration costs, including restructuring and severance, related to acquisitions, if any;

and (viii) purchases of affiliate equity interests.

and (viii) purchases of investment manager equity interests.

Capital and Reserve Requirements

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Operating Cash Flow

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.

Net cash used in operating activities of $67.2 million for 2025 changed by $69.0 million from cash provided by operating activities of $1.8 million in 2024 primarily due to an increase of $44.4 million in net purchases of investments of CIP in the current year and a decrease of $25.7 million 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 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.

Net cash used in investing activities of $47.3 million for 2025 increased by $30.4 million from net cash used in investing activities of $17.0 million in 2024 primarily due to the purchase of a minority interest in Crescent Cove in the current 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 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.

Net cash provided by financing activities of $191.0 million in 2025 increased by $116.1 million from net cash provided by financing activities of $74.9 million in the prior year primarily due to a $183.7 million increase in net borrowings as a result of the refinancing of our credit facility, partially offset by a $25.3 million decrease in net borrowings and payments of CIP and a $22.4 million decrease in net contributions from noncontrolling interests.

Credit Agreement

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.

On September 26, 2025, the Company refinanced its existing credit agreement by entering into a new agreement (the "Credit Agreement").

The Credit Agreement provides for (i) a $400.0 million term loan 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.

The Company had $399.0 million outstanding at December 31, 2025 under the Term Loan.

In accordance with Accounting Standards Codification ("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 $9.0 million as of December 31, 2025.

Recently Issued Accounting Pronouncements

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Our consolidated financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the use of estimates.

Actual results will vary from these estimates.

Actual results will vary

from these estimates.

Management believes the following critical accounting policies are important to understanding our results of operations and financial position.

1 unchanged sentence

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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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.

The minority interests in the investment management subsidiary 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 interests.

As of December 31, 2025, 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, 2024, and no impairments were identified.

We completed our annual impairment assessment of these assets as of October 31, 2025, 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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Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services.

These fees primarily consist of an asset-based fee that is paid by the fund over a period of years to cover allowable sales and marketing expenses for the fund or front-end sales charges that are based on a percentage of the offering price.

Asset-based distribution and service fees are primarily based on percentages of the average daily net asset value and are paid monthly pursuant to the terms of the respective distribution and service fee contracts.

1 unchanged sentence

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

servicing activities are generally services satisfied over time.

Shareholder 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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Liabilities under contingent payment arrangements are recorded within contingent consideration on the Consolidated Balance Sheets.

Contingent payment obligations related to business combinations are remeasured at fair value each reporting date using a simulation model with the assistance of an independent valuation firm (level 3 fair value measurement).

Contingent payment obligations related to business combinations are remeasured at fair value each reporting date using a simulation model or an income approach valuation technique with the assistance of an independent valuation firm

(level 3 fair value measurement).

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

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