What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 104 added, 116 removed, 270 unchanged (45% of the section changed)

1 unchanged sentence

Cautionary Statement Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains statements that are, or may be considered to be, forward-looking statements within the meaning of federal securities laws, including Section 27A of the securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act");

and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act");

and the Private Securities Litigation Reform Act of 1995, as amended.

11 unchanged sentences

(iv) damage to our reputation;

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

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

(vi) lack of sufficient capital on satisfactory terms;

31 unchanged sentences

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

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

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

We have broad distribution access in the U.S.

3 unchanged sentences

Financial Highlights

▪ Total revenues were $216.4 million in the third quarter of 2025, a decrease of $10.6 million, or 4.7%, compared to total revenues of $227.0 million in the third quarter of 2024.

▪ Operating income was $47.1 million in the third quarter of 2025, a decrease of $8.2 million, or 14.8%, compared to $55.3 million in the third quarter of 2024.

▪ Net income per diluted share was $4.65 in the third quarter of 2025, a decrease of $1.06, or 18.6%, compared to net income per diluted share of $5.71 in the third quarter of 2024.

▪ Total revenues were $199.5 million in the first quarter of 2026, a decrease of $18.4 million, or 8.4%, compared to total revenues of $217.9 million in the first quarter of 2025.

▪ Operating income was $15.4 million in the first quarter of 2026, a decrease of $21.1 million, or 57.8%, compared to $36.6 million in the first quarter of 2025.

▪ Net income per diluted share was $1.05 in the first quarter of 2026, a decrease of $3.00, or 74.1%, compared to net income per diluted share of $4.05 in the first quarter of 2025.

Keystone National Group

On March 1, 2026, the Company completed a majority investment in Keystone National Group ("Keystone"), an investment manager specializing in asset-centric private credit with $2.3 billion of assets under management at February 28, 2026.

Assets Under Management

Total sales were $6.3 billion in the third quarter of 2025, a decrease of $0.3 billion, or 4.9%, from $6.6 billion in the third quarter of 2024.

Net flows were $(3.9) billion in the third quarter of 2025 compared to net flows of $(1.7) billion in the third quarter of 2024.

At September 30, 2025, total assets under management were $169.3 billion, representing a decrease of $14.4 billion, or 7.8%, from September 30, 2024, and a decrease of $5.7 billion, or 3.2%, from December 31, 2024.

The decrease in total assets under management from September 30, 2024 primarily included $15.6 billion from net outflows partially offset by $3.8 billion from positive market performance.

The decrease in total assets under management from December 31, 2024 included $10.8 billion from net outflows partially offset by $6.6 billion from positive market performance.

Total sales were $5.8 billion in the first quarter of 2026, a decrease of $0.5 billion, or 7.4%, from $6.2 billion in the first quarter of 2025.

Net flows were $(8.4) billion in the first quarter of 2026 compared to net flows of $(3.0) billion in the first quarter of 2025.

At March 31, 2026, total assets under management were $149.0 billion, representing a decrease of $18.4 billion, or 11.0%, from March 31, 2025, and a decrease of $10.5 billion, or 6.6%, from December 31, 2025.

The decrease in total assets under management from March 31, 2025 primarily included $24.3 billion from net outflows partially offset by $6.1 billion from positive market performance and $2.3 billion from the addition of Keystone.

The decrease in total assets under management from December 31, 2025 included $8.4 billion from net outflows and $3.9 billion from negative market performance partially offset by $2.3 billion from the addition of Keystone.

Assets Under Management by Product

The following table summarizes our assets under management by product:

As of September 30, Change

As of March 31, Change

(in millions) 2026 2025 $ %

5 unchanged sentences

Average Assets Under Management (5) $ 158,206 $ 173,590 $ (15,384) (8.9) %

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

retail funds, global funds and ETFs.

(1) Represents U.S.

retail funds, ETFs and global funds.

(2) Consists of traditional closed-end and tender offer funds.

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

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

(4) Represents institutional separate and commingled accounts including structured products.

(5) 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.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2026 2025

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Beginning balance $ 10,635 $ 10,225

Inflows 3 — 12 —

Outflows (4) (106) (40)

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Ending balance $ 37,341 $ 46,920

Three Months Ended

(in millions) 2026 2025

Institutional Accounts (6)

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Ending balance $ 149,026 $ 167,463

(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 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.

(1) Represents U.S.

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) Consists of traditional closed-end and tender offer funds.

(4) Primarily represents fund shares repurchased due to tender offers.

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

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

(6) Represents institutional separate and commingled accounts including structured products.

Assets Under Management by Asset Class

The following table summarizes assets under management by asset class:

As of September 30, Change % of Total

As of March 31, Change % of Total

(in millions) 2026 2025 $ % 2026 2025

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

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

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

Average Assets Under Management and Average Fees Earned

The following tables summarize the average management fees earned in basis points and average assets under management:

Three Months Ended September 30,

Average Fee Earned

(expressed in basis points)

Average Assets Under

(in millions) (4)

2025 2024 2025 2024

Open-End Funds (1) 47.0 49.7 $ 55,889 $ 56,731

Closed-End Funds 58.5 58.5 10,598 10,159

Retail Separate Accounts (2) 41.8 43.7 47,363 45,672

Institutional Accounts (3) 31.6 31.0 56,426 63,428

All Products 41.2 41.9 $ 170,276 $ 175,990

Nine Months Ended September 30,

Three Months Ended March 31,

Average Fee Earned

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All Products 41.9 41.7 $ 158,206 $ 173,590

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

retail funds, global funds and ETFs.

(1) Represents U.S.

retail funds, ETFs and global funds.

(2) Consists of traditional closed-end and tender offer funds.

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

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

(4) Represents institutional separate and commingled accounts including structured products.

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

Fund fees are calculated based on average daily or

weekly net assets.

Retail separate account fees, which include 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.

Fund fees are calculated based on average daily, weekly, or monthly ending net asset 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, the end of the preceding quarter or month's net assets 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 decreased for the three and nine months ended September 30, 2025 compared to the same periods in the prior year primarily due to a shift in the asset mix in our open-end funds to certain strategies, which 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.

The average fee rate earned increased for the three months ended March 31, 2026 compared to the same period in the prior year primarily due to higher fee rates earned on the assets under management acquired from Keystone partially offset by a shift in the asset mix in our open-end funds to certain strategies, which have a lower fee rate.

Results of Operations

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Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(in thousands) 2026 2025 $ %

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Operating income (loss) 15,448 36,595 (21,147) (57.8) %

Other income (expense), net (12,120) (28) (12,092) N/M (19,858) (8,419) (11,439) 135.9 %

Other income (expense), net (12,876) (7,642) (5,234) 68.5 %

Interest income (expense), net 10,731 11,449 (718) (6.3) %

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Earnings (loss) per share-diluted $ 1.05 $ 4.05 $ (3.00) (74.1) %

N/M = Not Meaningful

In the third quarter of 2025, total revenues decreased 4.7% to $216.4 million from $227.0 million in the third quarter of 2024, primarily as a result of decreased average assets under management.

Operating income decreased by $8.2 million to $47.1 million in the third quarter of 2025 compared to $55.3 million in the third quarter of 2024, due primarily to decreased revenues as mentioned above.

In the first quarter of 2026, total revenues decreased 8.4% to $199.5 million from $217.9 million in the first quarter of 2025, primarily as a result of decreased average assets under management partially offset by the addition of Keystone.

Operating income decreased by $21.1 million to $15.4 million in the first quarter of 2026 compared to $36.6 million in the first quarter of 2025, due primarily to decreased revenues as mentioned above.

Revenues by source were as follows:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(in thousands) 2026 2025 $ %

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Total investment management fees 169,133 186,091 (16,958) (9.1) %

Distribution and service fees 12,517 13,567 (1,050) (7.7) % 37,238 41,007 (3,769) (9.2) %

Administration and shareholder service fees 17,311 18,007 (696) (3.9) %

Distribution and service fees 11,633 12,753 (1,120) (8.8) %

Other income and fees 1,458 1,081 377 34.9 %

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

Investment management fees decreased by $10.1 million, or 5.2%, and $24.5 million, or 4.3%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year primarily due to decreased average assets under management.

Distribution and Service Fees

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

Distribution and service fees decreased by $1.1 million, or 7.7%, and $3.8 million, or 9.2%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Investment management fees decreased by $17.0 million, or 9.1%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to decreased average assets under management partially offset by the addition of Keystone.

Administration and Shareholder Service Fees

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

retail funds, ETFs and closed-end funds.

Fund administration and shareholder service fees remained consistent during the three and nine months ended September 30, 2025 compared to the same periods in the prior year.

retail funds, ETFs and traditional closed-end funds.

Fund administration and shareholder service fees decreased $0.7 million , or 3.9% during the three months ended March 31, 2026 compared to the same period in 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 administration fees.

Distribution and Service Fees

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

Distribution and service fees decreased by $1.1 million, or 8.8%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Other Income and Fees

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

Other income and fees increased $0.3 million, or 10.0%, for the nine months ended September 30, 2025, compared to the same period in the prior year primarily due to increased marketing fees earned during the current year period.

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

Other income and fees increased $0.4 million, or 34.9%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to increased marketing fees earned on ETFs during the current year period.

Operating Expenses

1 unchanged sentence

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(in thousands) 2026 2025 $ %

4 unchanged sentences

Other operating expenses of CIP 2,015 1,000 1,015 101.5 %

Change in fair value of contingent consideration — (4,000) 4,000 (100.0) % (3,014) (7,300) 4,286 (58.7) %

Restructuring expense 693 — 693 100.0 % 693 1,487 (794) (53.4) %

Change in fair value of contingent consideration 409 — 409 N/M

Restructuring expense 2,871 — 2,871 N/M

Depreciation expense 1,667 2,345 (678) (28.9) %

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Total operating expenses $ 184,087 $ 181,337 $ 2,750 1.5 %

N/M = Not Meaningful

Employment Expenses

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

Employment expenses decreased by $6.7 million, or 6.4%, and $20.5 million, or 6.3%, for the three and nine months ended September 30, 2025, respectively, primarily due to a decrease in profit- and sales-based compensation and stock-based compensation expense.

Employment expenses decreased by $3.9 million, or 3.6%, for the three months ended March 31, 2026, primarily due to a decrease in profit- and sales-based compensation and stock-based compensation expense partially offset by the addition of Keystone.

Distribution and Other Asset-Based Expenses

1 unchanged sentence

These payments are primarily based on assets under management.

Distribution and other asset-based expenses decreased $2.1 million, or 8.9%, and $5.3 million, or 7.4%, for the three and nine months ended September 30, 2025, respectively, primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Distribution and other asset-based expenses decreased $2.4 million, or 10.3%, for the three months ended March 31, 2026, 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 increased $2.1 million, or 6.8%, and $3.3 million, or 3.4%, for the three and nine months ended September 30, 2025 compared to the same periods in the prior year primarily due to increased legal and professional fees associated with the refinancing of the Company's credit facility and discrete business initiatives.

Other operating expenses consist primarily 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 increased $3.1 million, or 9.5%, for the three months ended March 31, 2026 compared to the same period in the prior year primarily due to transaction costs related to the Keystone acquisition.

Other Operating Expenses of CIP

Other operating expenses of CIP decreased by $1.8 million, or 43.3%, for the nine months ended September 30, 2025, compared to the same period in the prior year primarily due to refinancing activities associated with two CLO's in the prior year period.

Other operating expenses of CIP increased by $1.0 million, or 101.5%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to refinancing activities associated with one CLO in the current year.

Change in Fair Value of Contingent Consideration

1 unchanged sentence

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 nine months ended September 30, 2025 was primarily attributable to changes in underlying performance estimates and the passage of time.

The change in fair value of contingent consideration for the three months ended March 31, 2026 was primarily attributable to changes in underlying performance estimates and the passage of time.

Restructuring Expense

During the three months ended March 31, 2026, the Company incurred $2.9 million in restructuring expense related to severance costs.

Depreciation Expense

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

Depreciation expense decreased by $0.4 million, or 17.5%, and $0.4 million, or 5.4% for the three and nine

months ended September 30, 2025, compared to the same periods in the prior year primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease, partially offset by an increase as a result of software and equipment purchases.

Depreciation expense decreased by $0.7 million, or 28.9%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease and a decrease in depreciation expense on computer equipment in the current year due to these assets becoming fully depreciated.

Amortization Expense

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

Amortization expense decreased by $4.6 million, or 10.6%, for the nine months ended September 30, 2025, compared to the same period in the prior year, primarily due to intangible assets becoming fully amortized.

Amortization expense increased by $2.2 million, or 17.2%, for the three months ended March 31, 2026, compared to the same period in the prior year, primarily due to the additional amortization associated with the Keystone acquisition.

Other Income (Expense)

1 unchanged sentence

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(in thousands) 2026 2025 $ %

3 unchanged sentences

Other income (expense), net 623 998 (375) (37.6) %

Total Other Income (Expense), net $ (12,120) $ (28) $ (12,092) N/M $ (19,858) $ (8,419) $ (11,439) 135.9 %

N/M = Not Meaningful

Total Other Income (Expense), net $ (12,876) $ (7,642) $ (5,234) 68.5 %

Realized and unrealized gain (loss) on investments, net

Realized and unrealized gain (loss) on investments, net changed during the three and nine months ended September 30, 2025 by $(2.3) million and $(1.2) million, respectively, compared to the same periods in the prior year.

The change for the three and nine months ended September 30, 2025 is primarily attributable to a decrease in unrealized gains due to changes in market values of our investments.

Realized and unrealized gain (loss) on investments, net changed during the three months ended March 31, 2026 by $1.8 million compared to the same period in the prior year.

The change for the three months ended March 31, 2026 is primarily attributable to an increase in realized gains due to changes in market values of our investments.

Realized and unrealized gain (loss) of CIP, net

Realized and unrealized gain (loss) of CIP, net changed by $(9.8) million and $(11.2) million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year.

The change for the three months ended September 30, 2025 consisted primarily of changes in net unrealized losses of $21.8 million related to the value of the notes payable, partially offset by net unrealized and realized gains of $12.0 million due to changes in market values of leveraged loans.

The change for the nine months ended September 30, 2025 consisted primarily of changes in net unrealized and realized losses of $33.7 million, due to changes in market values of leveraged loans, partially offset by net unrealized gains of $22.5 million related to the value of the notes payable.

Realized and unrealized gain (loss) of CIP, net changed by $(6.7) million for the three months ended March 31, 2026, compared to the same period in the prior year.

The change for the three months ended March 31, 2026 consisted primarily of changes in net unrealized and realized losses of $19.5 million due to changes in market values of leveraged loans, partially offset by net unrealized gains of $12.8 million related to the value of the notes payable.

Other income (expense), net

Other income (expense), net changed by $1.0 million for the nine months ended September 30, 2025, compared to the same period in the prior year due to changes in the gains and losses on our equity method investments, as well as foreign currency gains and losses.

Other income (expense) remained consistent during the three months ended March 31, 2026 compared to the same period in the prior year.

Interest Income (Expense)

1 unchanged sentence

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(in thousands) 2026 2025 $ %

6 unchanged sentences

Interest Expense

Interest expense decreased $0.5 million, or 8.7%, and $2.7 million, or 15.5%, for the three and nine months ended September 30, 2025, respectively, primarily due to lower average debt outstanding and lower average interest rates during the current year periods.

Interest expense increased $2.2 million, or 48.3%, for the three months ended March 31, 2026, primarily due to increased average debt outstanding during the current year period.

Interest and Dividend Income

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

Interest and dividend income decreased $0.7 million, or 24.5%, and $1.8 million, or 19.4%, during the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year primarily due to lower average interest rates and average investments in the current year period.

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

Interest and dividend income remained consistent for the three months ended March 31, 2026, compared to the same period in the prior year.

Interest and Dividend Income of Investments of CIP

Interest and dividend income of investments of CIP decreased $4.7 million, or 9.3%, and $14.6 million, or 9.5%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year primarily due to lower average interest rates in the current year period.

Interest and dividend income of investments of CIP increased $1.1 million, or 2.3%, for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to the addition of a CLO in the fourth quarter of 2025.

Interest Expense of CIP

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

Interest expense of CIP decreased by $4.8 million, or 12.5%, and $18.7 million, or 15.6%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year, primarily due to lower average interest rates in the current year period.

Interest expense of CIP increased by $0.5 million, or 1.4%, for the three months ended March 31, 2026, compared to the same period in the prior year, primarily due to the addition of a CLO in the fourth quarter of 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 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.

federal, state and local taxes at an estimated effective tax rate of 53.8% and 30.6% for the three months ended March 31, 2026 and 2025, respectively.

The higher estimated effective tax rate for the three months ended March 31, 2026 was primarily due to a change in valuation allowances in the current year related to the tax effects of higher realized and unrealized losses on Company investments compared to the prior year and the rate impact of lower pre-tax income.

Liquidity and Capital Resources

1 unchanged sentence

The following table summarizes certain financial data relating to our liquidity and capital resources:

September 30,

2026 December 31, 2025 Change

5 unchanged sentences

Debt 439,292 389,957 49,335 12.7 %

Investment manager noncontrolling interests liability 151,546 14,937 136,609 N/M

Redeemable noncontrolling interests 193,068 102,934 90,134 87.6 %

Total equity 918,406 934,845 (16,439) (1.8) %

Nine Months Ended

September 30, Change

N/M = Not Meaningful

Three Months Ended

March 31, Change

(in thousands, Provided by (Used in);

1 unchanged sentence

Cash Flow Data

Operating activities $ 180,245 $ 104,562 $ 75,683 72.4 %

Investing activities (5,424) (4,816) (608) 12.6 %

Operating activities $ 35,901 $ (3,787) $ 39,688 N/M

Investing activities (198,470) (2,984) (195,486) N/M

Financing activities (40,899) (174,461) 133,562 (76.6) %

At September 30, 2025, we had $370.6 million of cash and cash equivalents and $149.5 million of investments, which included $110.6 million of investment securities, compared to $265.9 million of cash and cash equivalents and $119.2 million of investments, which included $83.8 million of investment securities, at December 31, 2024.

N/M = Not Meaningful

At March 31, 2026, we had $136.6 million of cash and cash equivalents and $143.1 million of investments, which included $53.5 million of investment securities, compared to $386.5 million of cash and cash equivalents and $157.5 million of investments, which included $76.5 million of investment securities, at December 31, 2025.

Uses of Capital

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

and (viii) purchases of our investment management subsidiary equity interests.

and (viii) purchases of investment manager equity interests.

Capital and Reserve Requirements

1 unchanged sentence

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

At September 30, 2025, these subsidiaries were in compliance with all minimum net capital requirements.

At March 31, 2026, our broker-dealer net capital was significantly greater than the required minimum.

Balance Sheet

1 unchanged sentence

Investments consist primarily of investments in our sponsored funds.

CIP represent investment products for which we provide investment management

services and where we have either a controlling financial interest or are considered the primary beneficiary of an investment product that is considered a variable interest entity.

CIP represent investment products for which we provide investment management services and where we have either a controlling financial interest or are considered the primary beneficiary of an investment product that is considered a variable interest entity.

Operating Cash Flow

Net cash provided by operating activities of $180.2 million for the nine months ended September 30, 2025 increased by $75.7 million from net cash provided by operating activities of $104.6 million for the same period in the prior year primarily due to an increase of $78.0 million in net sales of investments by CIP in the current year period.

Net cash provided by operating activities of $35.9 million for the three months ended March 31, 2026 changed by $39.7 million from net cash used in operating activities of $3.8 million for the same period in the prior year primarily due to an increase of $29.2 million in net sales of investments by CIP and $15.3 million in net sales of investments by us, partially offset by a $21.9 million decrease in net income in the current year period.

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 $5.4 million for the nine months ended September 30, 2025 increased by $0.6 million from net cash used in investing activities of $4.8 million for the same period in the prior year primarily due to increased capital expenditures in the current year period.

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

Net cash used in investing activities of $198.5 million for the three months ended March 31, 2026 increased by $195.5 million from net cash used in investing activities of $3.0 million for the same period in the prior year primarily due to the acquisition of Keystone.

Financing Cash Flow

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

Net cash used in financing activities of $114.2 million for the nine months ended September 30, 2025 decreased by $15.3 million from net cash used of $129.5 million for the same period in the prior year primarily due to a $179.0 million increase in net borrowings as a result of the refinancing of our credit facility partially offset by $136.4 million decrease in net borrowings of CIP and a $17.6 million increase in repurchases of our common shares during the current year period.

Net cash used in financing activities of $40.9 million for the three months ended March 31, 2026 decreased by $133.6 million from net cash used of $174.5 million for the same period in the prior year primarily due to a $102.5 million increase in net borrowings of CIP and $50.0 million in borrowings on our revolver during the current year period.

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.

At September 30, 2025, $400.0 million was outstanding under the Term Loan, and there were no outstanding borrowings under the revolving credit facility.

In accordance with Accounting Standards Codification 835, Interest , the amounts outstanding under the Term Loan are presented on the Condensed Consolidated Balance Sheet net of related debt issuance costs, which were $9.4 million as of September 30, 2025.

The Company's 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 (the "Revolver") with a five-year term expiring in September 2030.

The Company borrowed $50.0 million under the Revolver during the three months ended March 31, 2026.

The Company repaid $1.0 million outstanding under the Term Loan during the three months ended March 31, 2026 and had $398.0 million outstanding under the Term Loan at March 31, 2026.

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 $8.7 million as of March 31, 2026.

Critical Accounting Policies and Estimates

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A complete description of our significant accounting policies is included in our 2025 Annual Report on Form 10-K.

There were no material changes in our critical accounting policies and estimates in the three months ended September 30, 2025.

There were no material changes in our critical accounting policies and estimates in the three months ended March 31, 2026.

Recently Issued Accounting Pronouncements

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The Company is primarily exposed to market risk associated with unfavorable movements in interest rates and securities prices.

During the three and nine months ended September 30, 2025, there were no material changes to the information contained in Part II, Item 7A of the Company's 2024 Annual Report on Form 10-K.

During the three months ended March 31, 2026, there were no material changes to the information contained in Part II, Item 7A of the Company's 2025 Annual Report on Form 10-K.

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-Q

Item 2. Management’s Discussion and Analysis