|
|
|
|
|
|
|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delaware
|
|
26-3962811
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|||
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
|
|
Page
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
($ in thousands, except share data)
|
|
|
|
||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
80,764
|
|
|
$
|
132,150
|
|
Investments
|
125,348
|
|
|
108,492
|
|
||
Accounts receivable, net
|
62,636
|
|
|
65,648
|
|
||
Assets of consolidated investment products ("CIP")
|
|
|
|
||||
Cash and cash equivalents of CIP
|
54,836
|
|
|
101,315
|
|
||
Cash pledged or on deposit of CIP
|
899
|
|
|
817
|
|
||
Investments of CIP
|
1,634,085
|
|
|
1,597,752
|
|
||
Other assets of CIP
|
32,522
|
|
|
33,486
|
|
||
Furniture, equipment and leasehold improvements, net
|
11,396
|
|
|
10,833
|
|
||
Intangible assets, net
|
296,918
|
|
|
301,954
|
|
||
Goodwill
|
170,153
|
|
|
170,153
|
|
||
Deferred taxes, net
|
31,875
|
|
|
32,428
|
|
||
Other assets
|
36,777
|
|
|
35,771
|
|
||
Total assets
|
$
|
2,538,209
|
|
|
$
|
2,590,799
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accrued compensation and benefits
|
$
|
27,471
|
|
|
$
|
86,658
|
|
Accounts payable and accrued liabilities
|
28,214
|
|
|
29,607
|
|
||
Dividends payable
|
6,479
|
|
|
6,528
|
|
||
Debt
|
245,402
|
|
|
248,320
|
|
||
Other liabilities
|
48,477
|
|
|
39,895
|
|
||
Liabilities of CIP
|
|
|
|
||||
Notes payable of CIP
|
1,460,177
|
|
|
1,457,435
|
|
||
Securities purchased payable and other liabilities of CIP
|
92,421
|
|
|
112,954
|
|
||
Total liabilities
|
1,908,641
|
|
|
1,981,397
|
|
||
Commitments and Contingencies (Note 14)
|
|
|
|
||||
Redeemable noncontrolling interests of CIP
|
4,162
|
|
|
4,178
|
|
||
Equity:
|
|
|
|
||||
Equity attributable to stockholders:
|
|
|
|
||||
Series D mandatory convertible preferred stock, $0.01 par value, 1,150,000 shares authorized, issued and outstanding at March 31, 2018 and December 31, 2017
|
110,843
|
|
|
110,843
|
|
||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 10,513,732 shares issued and 7,217,443 shares outstanding at March 31, 2018 and 10,455,934 shares issued and 7,159,645 shares outstanding at December 31, 2017
|
105
|
|
|
105
|
|
||
Additional paid-in capital
|
1,213,342
|
|
|
1,216,173
|
|
||
Accumulated deficit
|
(363,094
|
)
|
|
(386,216
|
)
|
||
Accumulated other comprehensive income (loss)
|
(661
|
)
|
|
(600
|
)
|
||
Treasury stock, at cost, 3,296,289 shares at March 31, 2018 and December 31, 2017, respectively
|
(351,748
|
)
|
|
(351,748
|
)
|
||
Total equity attributable to stockholders
|
608,787
|
|
|
588,557
|
|
||
Noncontrolling interests of CIP
|
16,619
|
|
|
16,667
|
|
||
Total equity
|
625,406
|
|
|
605,224
|
|
||
Total liabilities and equity
|
$
|
2,538,209
|
|
|
$
|
2,590,799
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
($ in thousands, except per share data)
|
|
|
|
||||
Revenues
|
|
|
|
||||
Investment management fees
|
$
|
100,476
|
|
|
$
|
59,271
|
|
Distribution and service fees
|
12,607
|
|
|
10,783
|
|
||
Administration and shareholder service fees
|
15,738
|
|
|
8,981
|
|
||
Other income and fees
|
207
|
|
|
741
|
|
||
Total revenues
|
129,028
|
|
|
79,776
|
|
||
Operating Expenses
|
|
|
|
||||
Employment expenses
|
60,696
|
|
|
39,641
|
|
||
Distribution and other asset-based expenses
|
22,291
|
|
|
15,323
|
|
||
Other operating expenses
|
16,862
|
|
|
13,226
|
|
||
Operating expenses of consolidated investment products ("CIP")
|
511
|
|
|
642
|
|
||
Depreciation and other amortization
|
1,015
|
|
|
664
|
|
||
Amortization expense
|
5,036
|
|
|
233
|
|
||
Total operating expenses
|
106,411
|
|
|
69,729
|
|
||
Operating Income (Loss)
|
22,617
|
|
|
10,047
|
|
||
Other Income (Expense)
|
|
|
|
||||
Realized and unrealized gain (loss) on investments, net
|
438
|
|
|
297
|
|
||
Realized and unrealized gain (loss) of CIP, net
|
2,259
|
|
|
4,444
|
|
||
Other income (expense), net
|
1,319
|
|
|
646
|
|
||
Total other income (expense), net
|
4,016
|
|
|
5,387
|
|
||
Interest Income (Expense)
|
|
|
|
||||
Interest expense
|
(3,858
|
)
|
|
(243
|
)
|
||
Interest and dividend income
|
721
|
|
|
188
|
|
||
Interest and dividend income of investments of CIP
|
21,403
|
|
|
5,656
|
|
||
Interest expense of CIP
|
(14,549
|
)
|
|
(2,857
|
)
|
||
Total interest income (expense), net
|
3,717
|
|
|
2,744
|
|
||
Income (Loss) Before Income Taxes
|
30,350
|
|
|
18,178
|
|
||
Income tax expense (benefit)
|
6,523
|
|
|
4,433
|
|
||
Net Income (Loss)
|
23,827
|
|
|
13,745
|
|
||
Noncontrolling interests
|
(527
|
)
|
|
(718
|
)
|
||
Net Income (Loss) Attributable to Stockholders
|
23,300
|
|
|
13,027
|
|
||
Preferred stockholder dividends
|
(2,084
|
)
|
|
(2,084
|
)
|
||
Net Income (Loss) Attributable to Common Stockholders
|
$
|
21,216
|
|
|
$
|
10,943
|
|
Earnings (Loss) per Share—Basic
|
$
|
2.95
|
|
|
$
|
1.67
|
|
Earnings (Loss) per Share—Diluted
|
$
|
2.77
|
|
|
$
|
1.62
|
|
Cash Dividends Declared per Preferred Share
|
$
|
1.81
|
|
|
$
|
1.81
|
|
Cash Dividends Declared per Common Share
|
$
|
0.45
|
|
|
$
|
0.45
|
|
Weighted Average Shares Outstanding—Basic (in thousands)
|
7,197
|
|
|
6,542
|
|
||
Weighted Average Shares Outstanding—Diluted (in thousands)
|
8,411
|
|
|
6,773
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
($ in thousands)
|
|
|
|
||||
Net Income (Loss)
|
$
|
23,827
|
|
|
$
|
13,745
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustment, net of tax of ($4) for the three months ended March 31, 2018
|
10
|
|
|
—
|
|
||
Unrealized gain (loss) on available-for-sale securities, net of tax of $97 and $(54) for the three months ended March 31, 2018 and 2017, respectively
|
(249
|
)
|
|
88
|
|
||
Other comprehensive income (loss)
|
(239
|
)
|
|
88
|
|
||
Comprehensive income (loss)
|
23,588
|
|
|
13,833
|
|
||
Comprehensive (income) loss attributable to noncontrolling interests
|
(527
|
)
|
|
(718
|
)
|
||
Comprehensive Income (Loss) Attributable to Stockholders
|
$
|
23,061
|
|
|
$
|
13,115
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
($ in thousands)
|
|
|
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net income (loss)
|
$
|
23,827
|
|
|
$
|
13,745
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation expense, intangible asset and other amortization
|
6,819
|
|
|
960
|
|
||
Stock-based compensation
|
5,909
|
|
|
3,491
|
|
||
Amortization of deferred commissions
|
737
|
|
|
516
|
|
||
Payments of deferred commissions
|
(1,075
|
)
|
|
(671
|
)
|
||
Equity in earnings of equity method investments
|
(1,322
|
)
|
|
(629
|
)
|
||
Realized and unrealized (gains) losses on trading securities, net
|
(333
|
)
|
|
(297
|
)
|
||
Sales (purchases) of trading securities, net
|
4,718
|
|
|
2,396
|
|
||
Deferred taxes, net
|
646
|
|
|
2,817
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net and other assets
|
2,629
|
|
|
(13,013
|
)
|
||
Accrued compensation and benefits, accounts payable, accrued liabilities and other liabilities
|
(51,148
|
)
|
|
(24,305
|
)
|
||
Operating activities of consolidated investment products ("CIP"):
|
|
|
|
||||
Realized and unrealized (gains) losses on investments of CIP, net
|
(2,382
|
)
|
|
(4,857
|
)
|
||
Purchases of investments by CIP
|
(264,398
|
)
|
|
(92,478
|
)
|
||
Sales of investments by CIP
|
217,564
|
|
|
98,191
|
|
||
Net purchases of short term investments by CIP
|
(177
|
)
|
|
(1,735
|
)
|
||
Sales (purchases) of securities sold short by CIP, net
|
190
|
|
|
(20
|
)
|
||
Change in other assets of CIP
|
(492
|
)
|
|
535
|
|
||
Change in liabilities of CIP
|
(3,467
|
)
|
|
172
|
|
||
Net cash provided by (used in) operating activities
|
(61,755
|
)
|
|
(15,182
|
)
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(1,275
|
)
|
|
(369
|
)
|
||
Change in cash and cash equivalents of CIP due to consolidation, net
|
—
|
|
|
5,615
|
|
||
Purchases of available-for-sale securities
|
(20,302
|
)
|
|
(66
|
)
|
||
Net cash provided by (used in) investing activities
|
(21,577
|
)
|
|
5,180
|
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Repayments on debt
|
(650
|
)
|
|
(30,000
|
)
|
||
Payment of deferred financing costs
|
(3,400
|
)
|
|
(61
|
)
|
||
Proceeds from issuance of mandatory convertible preferred stock, net of issuance costs
|
—
|
|
|
111,280
|
|
||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
109,762
|
|
||
Common stock dividends paid
|
(3,412
|
)
|
|
(2,894
|
)
|
||
Preferred stock dividends paid
|
(2,084
|
)
|
|
—
|
|
||
Stock options exercised
|
698
|
|
|
86
|
|
||
Taxes paid related to net share settlement of restricted stock units
|
(5,014
|
)
|
|
(2,464
|
)
|
||
Contributions (redemptions) of noncontrolling interests, net
|
(589
|
)
|
|
(6,091
|
)
|
||
Financing activities of CIP:
|
|
|
|
||||
Borrowings (Payments) on borrowings by CIP
|
—
|
|
|
73
|
|
||
Proceeds from issuance of notes payable by CIP
|
350,000
|
|
|
—
|
|
||
Repayment of notes payable by CIP
|
(350,000
|
)
|
|
(500
|
)
|
||
Net cash provided by (used in) financing activities
|
(14,451
|
)
|
|
179,191
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(97,783
|
)
|
|
169,189
|
|
||
Cash and cash equivalents, beginning of period
|
234,282
|
|
|
83,671
|
|
||
Cash and Cash Equivalent, End of Period
|
$
|
136,499
|
|
|
$
|
252,860
|
|
Non-Cash Investing Activities:
|
|
|
|
||||
Change in accrual for capital expenditures
|
$
|
(375
|
)
|
|
$
|
(166
|
)
|
Non-Cash Financing Activities:
|
|
|
|
||||
Increase (decrease) to noncontrolling interest due to consolidation (deconsolidation) of CIP, net
|
$
|
—
|
|
|
$
|
13,083
|
|
Common stock dividends payable
|
$
|
3,248
|
|
|
$
|
3,145
|
|
Preferred stock dividends payable
|
$
|
2,084
|
|
|
$
|
2,084
|
|
Accrued stock issuance costs
|
$
|
—
|
|
|
$
|
886
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
($ in thousands)
|
|
|
|
||||
Reconciliation of cash and cash equivalents
|
|
|
|
||||
Cash and cash equivalents
|
$
|
80,764
|
|
|
$
|
132,150
|
|
Cash of consolidated investment products
|
54,836
|
|
|
101,315
|
|
||
Cash pledged or on deposit of consolidated investment products
|
899
|
|
|
817
|
|
||
Cash and cash equivalents at end of period
|
$
|
136,499
|
|
|
$
|
234,282
|
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury Stock
|
|
Total
Attributed To
Stockholders
|
|
Non-
controlling
Interests
|
|
Total
Equity
|
|
Redeemable
Non-
controlling
Interests
|
|||||||||||||||||||||||||||||
($ in thousands, except per share data)
|
Shares
|
|
Par Value
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||||
Balances at December 31, 2016
|
5,889,013
|
|
|
$
|
91
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,090,331
|
|
|
$
|
(424,279
|
)
|
|
$
|
(224
|
)
|
|
3,230,045
|
|
|
$
|
(344,246
|
)
|
|
$
|
321,673
|
|
|
$
|
—
|
|
|
$
|
321,673
|
|
|
$
|
37,266
|
|
Adjustment for adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,052
|
|
|
—
|
|
|
1,052
|
|
|
—
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,027
|
|
|
—
|
|
|
13,027
|
|
|
718
|
|
||||||||||
Net unrealized gain (loss) on securities available-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|
—
|
|
||||||||||
Activity of noncontrolling interests, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,992
|
|
||||||||||
Issuance of mandatory convertible preferred stock, net of offering costs
|
—
|
|
|
—
|
|
|
1,150,000
|
|
|
110,837
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,837
|
|
|
—
|
|
|
110,837
|
|
|
—
|
|
||||||||||
Cash dividends declared ($1.8125 per preferred share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
||||||||||
Issuance of common stock, net of offering costs
|
1,046,500
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
109,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,320
|
|
|
—
|
|
|
109,320
|
|
|
—
|
|
||||||||||
Cash dividends declared ($0.45 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,322
|
)
|
|
—
|
|
|
(3,322
|
)
|
|
—
|
|
||||||||||
Issuance of common shares related to employee stock transactions
|
53,631
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
|
—
|
|
||||||||||
Taxes paid on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,464
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,464
|
)
|
|
—
|
|
|
(2,464
|
)
|
|
—
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,175
|
|
|
—
|
|
|
4,175
|
|
|
—
|
|
||||||||||
Balances at March 31, 2017
|
6,989,144
|
|
|
$
|
102
|
|
|
1,150,000
|
|
|
$
|
110,837
|
|
|
$
|
1,196,031
|
|
|
$
|
(410,200
|
)
|
|
$
|
(136
|
)
|
|
3,230,045
|
|
|
$
|
(344,246
|
)
|
|
$
|
552,388
|
|
|
$
|
—
|
|
|
$
|
552,388
|
|
|
$
|
44,976
|
|
Balances at December 31, 2017
|
7,159,645
|
|
|
$
|
105
|
|
|
1,150,000
|
|
|
$
|
110,843
|
|
|
$
|
1,216,173
|
|
|
$
|
(386,216
|
)
|
|
$
|
(600
|
)
|
|
3,296,289
|
|
|
$
|
(351,748
|
)
|
|
$
|
588,557
|
|
|
$
|
16,667
|
|
|
$
|
605,224
|
|
|
$
|
4,178
|
|
Adjustment for adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
178
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,300
|
|
|
672
|
|
|
23,972
|
|
|
(145
|
)
|
||||||||||
Net unrealized gain (loss) on securities available-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(249
|
)
|
|
—
|
|
|
—
|
|
|
(249
|
)
|
|
—
|
|
|
(249
|
)
|
|
—
|
|
||||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||||||||
Activity of noncontrolling interests, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(720
|
)
|
|
(720
|
)
|
|
129
|
|
||||||||||
Cash dividends declared ($1.8125 per preferred share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
|
(2,084
|
)
|
|
—
|
|
||||||||||
Cash dividends declared ($0.45 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,394
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,394
|
)
|
|
—
|
|
|
(3,394
|
)
|
|
—
|
|
||||||||||
Issuance of common shares related to employee stock transactions
|
57,798
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
698
|
|
|
—
|
|
||||||||||
Taxes paid on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,014
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,014
|
)
|
|
|
|
(5,014
|
)
|
|
—
|
|
|||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,963
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,963
|
|
|
—
|
|
|
6,963
|
|
|
—
|
|
||||||||||
Balances at March 31, 2018
|
7,217,443
|
|
|
$
|
105
|
|
|
1,150,000
|
|
|
$
|
110,843
|
|
|
$
|
1,213,342
|
|
|
$
|
(363,094
|
)
|
|
$
|
(661
|
)
|
|
3,296,289
|
|
|
$
|
(351,748
|
)
|
|
$
|
608,787
|
|
|
$
|
16,619
|
|
|
$
|
625,406
|
|
|
$
|
4,162
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017 (1)
|
||||
($ in thousands)
|
|
|
|
||||
Investment management fees
|
|
|
|
||||
Open-end funds
|
$
|
54,361
|
|
|
$
|
30,526
|
|
Closed-end funds
|
10,378
|
|
|
11,079
|
|
||
Retail separate accounts
|
16,529
|
|
|
11,434
|
|
||
Institutional accounts
|
15,818
|
|
|
5,141
|
|
||
Structured products
|
2,326
|
|
|
498
|
|
||
Other products
|
1,064
|
|
|
593
|
|
||
Total investment management fees
|
100,476
|
|
|
59,271
|
|
||
Distribution and service fees
|
12,607
|
|
|
10,783
|
|
||
Administration and shareholder service fees
|
15,738
|
|
|
8,981
|
|
||
Other income and fees
|
207
|
|
|
741
|
|
||
Total revenues
|
$
|
129,028
|
|
|
$
|
79,776
|
|
(1)
|
Prior period amounts have not been adjusted and are reported in accordance with historical accounting under ASC 605,
Revenue Recognition
.
|
|
Three Months Ended March 31, 2018
|
||||||||||
($ in Thousands)
|
As
Reported |
|
Balance
Under Prior ASC 605 |
|
Effect of
Change Higher/(Lower) |
||||||
Revenues
|
|
|
|
|
|
||||||
Distribution and service fees
|
$
|
12,607
|
|
|
$
|
11,371
|
|
|
$
|
1,236
|
|
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Distribution and other asset-based expenses
|
22,291
|
|
|
21,055
|
|
|
1,236
|
|
|
June 1, 2017
|
||
($ in thousands)
|
|
||
Assets:
|
|
||
Cash and cash equivalents
|
$
|
39,343
|
|
Investments
|
5,516
|
|
|
Accounts receivable
|
20,311
|
|
|
Assets of consolidated investment products ("CIP")
|
|
||
Cash and cash equivalents of CIP
|
38,261
|
|
|
Investments of CIP
|
899,274
|
|
|
Other assets of CIP
|
19,158
|
|
|
Furniture, equipment and leasehold improvements
|
5,505
|
|
|
Intangible assets
|
275,700
|
|
|
Goodwill
|
163,365
|
|
|
Deferred taxes, net
|
6,590
|
|
|
Other assets
|
3,003
|
|
|
Total Assets
|
1,476,026
|
|
|
Liabilities
|
|
||
Accrued compensation and benefits
|
18,263
|
|
|
Accounts payable and accrued liabilities
|
11,858
|
|
|
Other liabilities
|
2,601
|
|
|
Liabilities of consolidated investment products ("CIP")
|
|
||
Notes payable of CIP
|
770,160
|
|
|
Securities purchased payable and other liabilities of CIP
|
109,881
|
|
|
Noncontrolling Interests of CIP
|
16,181
|
|
|
Total Liabilities & Noncontrolling Interests
|
928,944
|
|
|
Total Net Assets Acquired
|
$
|
547,082
|
|
|
June 1, 2017
|
||||
|
Approximate Fair Value
|
|
Weighted Average of Useful Life
|
||
($ in thousands)
|
|
|
|
||
Definite-lived intangible assets:
|
|
|
|
||
Mutual fund investment contracts
|
$
|
189,200
|
|
|
16.0 years
|
Institutional and retail separate account investment contracts
|
77,000
|
|
|
10.4 years
|
|
Trademarks/Trade names
|
800
|
|
|
10.0 years
|
|
Total finite-lived intangible assets
|
267,000
|
|
|
|
|
Indefinite-lived intangible assets:
|
|
|
|
||
Trade names
|
8,700
|
|
|
N/A
|
|
Total identifiable intangible assets
|
$
|
275,700
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
($ in thousands)
|
|
|
|
||||
Definite-lived intangible assets:
|
|
|
|
||||
Investment contracts
|
$
|
425,747
|
|
|
$
|
425,747
|
|
Accumulated amortization
|
(172,345
|
)
|
|
(167,309
|
)
|
||
Definite-lived intangible assets, net
|
253,402
|
|
|
258,438
|
|
||
Indefinite-lived intangible assets
|
43,516
|
|
|
43,516
|
|
||
Total intangible assets, net
|
$
|
296,918
|
|
|
$
|
301,954
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
($ in thousands)
|
|
|
|
||||
Intangible assets, net
|
|
|
|
||||
Balance, beginning of period
|
$
|
301,954
|
|
|
$
|
38,427
|
|
Amortization
|
(5,036
|
)
|
|
(233
|
)
|
||
Balance, end of period
|
$
|
296,918
|
|
|
$
|
38,194
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
($ in thousands)
|
|
|
|
||||
Marketable securities
|
$
|
62,039
|
|
|
$
|
66,424
|
|
Equity method investments
|
12,420
|
|
|
11,098
|
|
||
Nonqualified retirement plan assets
|
6,669
|
|
|
6,706
|
|
||
Investments in collateralized loan obligations
|
43,295
|
|
|
23,339
|
|
||
Other investments
|
925
|
|
|
925
|
|
||
Total investments
|
$
|
125,348
|
|
|
$
|
108,492
|
|
|
Cost
|
|
Unrealized
Loss
|
|
Unrealized
Gain
|
|
Fair
Value
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
$
|
41,463
|
|
|
$
|
(928
|
)
|
|
$
|
1,380
|
|
|
$
|
41,915
|
|
Equity securities
|
13,621
|
|
|
(11
|
)
|
|
2,939
|
|
|
16,549
|
|
||||
Sponsored closed-end funds
|
3,770
|
|
|
(382
|
)
|
|
187
|
|
|
3,575
|
|
||||
Total marketable securities
|
$
|
58,854
|
|
|
$
|
(1,321
|
)
|
|
$
|
4,506
|
|
|
$
|
62,039
|
|
|
Cost
|
|
Unrealized
Loss
|
|
Unrealized
Gain
|
|
Fair
Value
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
$
|
47,084
|
|
|
$
|
(1,294
|
)
|
|
$
|
1,059
|
|
|
$
|
46,849
|
|
Equity securities
|
13,141
|
|
|
(2
|
)
|
|
2,671
|
|
|
15,810
|
|
||||
Sponsored closed-end funds
|
3,761
|
|
|
(302
|
)
|
|
306
|
|
|
3,765
|
|
||||
Total marketable securities
|
$
|
63,986
|
|
|
$
|
(1,598
|
)
|
|
$
|
4,036
|
|
|
$
|
66,424
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
43,715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,715
|
|
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
41,915
|
|
|
—
|
|
|
—
|
|
|
41,915
|
|
||||
Equity securities
|
16,549
|
|
|
—
|
|
|
—
|
|
|
16,549
|
|
||||
Sponsored closed-end funds
|
3,575
|
|
|
—
|
|
|
—
|
|
|
3,575
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Investments in collateralized loan obligations
|
—
|
|
|
37,763
|
|
|
5,532
|
|
|
43,295
|
|
||||
Nonqualified retirement plan assets
|
6,669
|
|
|
—
|
|
|
—
|
|
|
6,669
|
|
||||
Total assets measured at fair value
|
$
|
112,423
|
|
|
$
|
37,763
|
|
|
$
|
5,532
|
|
|
$
|
155,718
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
72,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72,993
|
|
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
46,849
|
|
|
—
|
|
|
—
|
|
|
46,849
|
|
||||
Equity securities
|
15,810
|
|
|
—
|
|
|
—
|
|
|
15,810
|
|
||||
Sponsored closed-end funds
|
3,765
|
|
|
—
|
|
|
—
|
|
|
3,765
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Investment in collateralized loan obligations
|
—
|
|
|
18,900
|
|
|
4,439
|
|
|
23,339
|
|
||||
Nonqualified retirement plan assets
|
6,706
|
|
|
—
|
|
|
—
|
|
|
6,706
|
|
||||
Total assets measured at fair value
|
$
|
146,123
|
|
|
$
|
18,900
|
|
|
$
|
4,439
|
|
|
$
|
169,462
|
|
|
Three Months Ended March 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Level 3 Investments
(a)
|
|
|
|
||||
Balance at beginning of period
|
$
|
4,439
|
|
|
$
|
—
|
|
Acquired in period
|
1,326
|
|
|
—
|
|
||
Change in unrealized (loss), net
|
(233
|
)
|
|
—
|
|
||
Balance at end of period
|
$
|
5,532
|
|
|
$
|
—
|
|
(a)
|
The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment.
|
|
Unrealized Net
Gains and (Losses)
on Securities
Available-for-Sale
|
|
Foreign
Currency Translation Adjustments |
||||
($ in thousands)
|
|
|
|
||||
Balance December 31, 2017
|
$
|
(612
|
)
|
|
$
|
12
|
|
Unrealized net gain (loss) on securities available-for-sale, net of tax of $97
|
(249
|
)
|
|
—
|
|
||
Foreign currency translation adjustments, net of tax of $(4)
|
—
|
|
|
10
|
|
||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of ($61)
(1)
|
178
|
|
|
—
|
|
||
Net current-period other comprehensive income (loss)
|
(71
|
)
|
|
10
|
|
||
Balance March 31, 2018
|
$
|
(683
|
)
|
|
$
|
22
|
|
|
|
|
|
||||
|
Unrealized Net
Gains and (Losses)
on Securities
Available-for-Sale
|
|
Foreign
Currency
Translation
Adjustments
|
||||
($ in thousands)
|
|
|
|
||||
Balance December 31, 2016
|
$
|
(224
|
)
|
|
$
|
—
|
|
Unrealized net gain (loss) on securities available-for-sale, net of tax of $(54)
|
88
|
|
|
—
|
|
||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
||
Net current-period other comprehensive income (loss)
|
88
|
|
|
—
|
|
||
Balance March 31, 2017
|
$
|
(136
|
)
|
|
$
|
—
|
|
|
Number
of Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2017
|
483,021
|
|
|
$
|
104.16
|
|
Granted
|
92,681
|
|
|
$
|
139.49
|
|
Settled
|
(75,142
|
)
|
|
$
|
109.85
|
|
Outstanding at March 31, 2018
|
500,560
|
|
|
$
|
109.95
|
|
|
Number
of Shares
|
|
Weighted
Average
Exercise Price
|
|||
Outstanding at December 31, 2017
|
109,808
|
|
|
$
|
16.44
|
|
Exercised
|
(22,245
|
)
|
|
$
|
31.38
|
|
Outstanding at March 31, 2018
|
87,563
|
|
|
$
|
12.64
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
($ in thousands, except per share amounts)
|
|
|
|
||||
Net Income (Loss)
|
$
|
23,827
|
|
|
$
|
13,745
|
|
Noncontrolling interests
|
(527
|
)
|
|
(718
|
)
|
||
Net Income (Loss) Attributable to Stockholders
|
23,300
|
|
|
13,027
|
|
||
Preferred stock dividends
|
(2,084
|
)
|
|
(2,084
|
)
|
||
Net Income (Loss) Attributable to Common Stockholders
|
$
|
21,216
|
|
|
$
|
10,943
|
|
Shares
(in thousands)
:
|
|
|
|
||||
Basic: Weighted-average number of common shares outstanding
|
7,197
|
|
|
6,542
|
|
||
Plus: Incremental shares from assumed conversion of dilutive instruments
|
1,214
|
|
|
231
|
|
||
Diluted: Weighted-average number of common shares outstanding
|
8,411
|
|
|
6,773
|
|
||
Earnings (Loss) per Share—Basic
|
$
|
2.95
|
|
|
$
|
1.67
|
|
Earnings (Loss) per Share—Diluted
|
$
|
2.77
|
|
|
$
|
1.62
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
(in thousands)
|
|
|
|
||
Restricted stock units and stock options
|
15
|
|
|
—
|
|
Preferred stock
|
—
|
|
|
674
|
|
Total anti-dilutive securities
|
15
|
|
|
674
|
|
|
As of
|
||||||||||||||||||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
|
VIEs
|
|
|
|
VIEs
|
||||||||||||||||
|
VOEs
|
|
CLOs
|
|
Other
|
|
VOEs
|
|
CLOs
|
|
Other
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
978
|
|
|
$
|
54,757
|
|
|
$
|
—
|
|
|
$
|
820
|
|
|
$
|
82,823
|
|
|
$
|
18,489
|
|
Investments
|
36,702
|
|
|
1,572,898
|
|
|
24,485
|
|
|
34,623
|
|
|
1,555,879
|
|
|
7,250
|
|
||||||
Other assets
|
499
|
|
|
31,709
|
|
|
314
|
|
|
767
|
|
|
32,671
|
|
|
48
|
|
||||||
Notes payable
|
—
|
|
|
(1,460,177
|
)
|
|
—
|
|
|
—
|
|
|
(1,457,435
|
)
|
|
—
|
|
||||||
Securities purchased payable and other liabilities
|
(1,145
|
)
|
|
(90,920
|
)
|
|
(356
|
)
|
|
(1,319
|
)
|
|
(110,871
|
)
|
|
(764
|
)
|
||||||
Noncontrolling interests
|
(4,123
|
)
|
|
(16,619
|
)
|
|
(39
|
)
|
|
(4,178
|
)
|
|
(16,667
|
)
|
|
—
|
|
||||||
The Company’s net interests in consolidated investment vehicles
|
$
|
32,911
|
|
|
$
|
91,648
|
|
|
$
|
24,404
|
|
|
$
|
30,713
|
|
|
$
|
86,400
|
|
|
$
|
25,023
|
|
|
As of
|
||
|
March 31, 2018
|
||
($ in thousands)
|
|
||
Subordinated notes
|
$
|
89,950
|
|
Accrued investment management fees
|
1,698
|
|
|
Total Beneficial Interests
|
$
|
91,648
|
|
|
Three Months Ended March 31,
|
||
($ in thousands)
|
2018
|
||
Income:
|
|
||
Realized and unrealized gain (loss), net
|
$
|
4,037
|
|
Interest income
|
21,087
|
|
|
Total Income
|
25,124
|
|
|
|
|
||
Expenses:
|
|
||
Other operating expenses
|
396
|
|
|
Interest expense
|
14,549
|
|
|
Total Expense
|
14,945
|
|
|
Noncontrolling interest
|
(673
|
)
|
|
Net Income (loss) attributable to CIPs
|
$
|
9,506
|
|
|
Three Months Ended March 31,
|
||
($ in thousands)
|
2018
|
||
Distributions received and unrealized gains on the subordinated notes held by the Company
|
$
|
7,647
|
|
Investment management fees
|
1,859
|
|
|
Total Economic Interests
|
$
|
9,506
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
54,507
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,507
|
|
Debt investments
|
—
|
|
|
1,590,952
|
|
|
950
|
|
|
1,591,902
|
|
||||
Equity investments
|
37,649
|
|
|
2,736
|
|
|
1,798
|
|
|
42,183
|
|
||||
Total Assets Measured at Fair Value
|
$
|
92,156
|
|
|
$
|
1,593,688
|
|
|
$
|
2,748
|
|
|
$
|
1,688,592
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
$
|
—
|
|
|
$
|
1,460,177
|
|
|
$
|
—
|
|
|
$
|
1,460,177
|
|
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Short sales
|
839
|
|
|
—
|
|
|
—
|
|
|
839
|
|
||||
Total Liabilities Measured at Fair Value
|
$
|
839
|
|
|
$
|
1,460,177
|
|
|
$
|
—
|
|
|
$
|
1,461,016
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
($ in thousands)
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
82,769
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,769
|
|
Debt investments
|
—
|
|
|
1,527,845
|
|
|
33,887
|
|
|
1,561,732
|
|
||||
Equity investments
|
35,126
|
|
|
—
|
|
|
894
|
|
|
36,020
|
|
||||
Total Assets Measured at Fair Value
|
$
|
117,895
|
|
|
$
|
1,527,845
|
|
|
$
|
34,781
|
|
|
$
|
1,680,521
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
$
|
—
|
|
|
$
|
1,457,435
|
|
|
$
|
—
|
|
|
$
|
1,457,435
|
|
Derivatives
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Short sales
|
719
|
|
|
—
|
|
|
—
|
|
|
719
|
|
||||
Total Liabilities Measured at Fair Value
|
$
|
721
|
|
|
$
|
1,457,435
|
|
|
$
|
—
|
|
|
$
|
1,458,156
|
|
|
Three Months Ended March 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Level 3 Debt and Equity securities
(a)
|
|
|
|
||||
Balance at beginning of period
|
$
|
34,781
|
|
|
$
|
25
|
|
Realized gains (losses), net
|
43
|
|
|
(65
|
)
|
||
Change in unrealized gains (losses), net
|
2,375
|
|
|
62
|
|
||
Purchases
|
7,122
|
|
|
100
|
|
||
Paydowns
|
—
|
|
|
(1
|
)
|
||
Amortization
|
19
|
|
|
—
|
|
||
Sales
|
(11,934
|
)
|
|
(36
|
)
|
||
Transfers to Level 2
|
(29,658
|
)
|
|
—
|
|
||
Transfers from Level 2
|
—
|
|
|
1,638
|
|
||
Balance at end of period
|
$
|
2,748
|
|
|
$
|
1,723
|
|
|
|
|
|
(a)
|
The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. All transfers are deemed to occur at the end of period. Transfers between Level 2 and Level 3 were due to a decrease in trading activities at period end.
|
•
|
Net earnings per diluted share was
$2.77
in the
first
quarter of
2018
as compared to
$1.62
in the
first
quarter of
2017
.
|
•
|
Total sales (inflows) were
$5.4 billion
in the
first
quarter of
2018
, an increase of $
2.2 billion
, or
66.3%
, from
$3.3 billion
in the
first
quarter of
2017
. Net flows were
$(0.7) billion
in the
first
quarter of
2018
compared to
$0.5 billion
in the
first
quarter of
2017
.
|
•
|
Long-term assets under management were
$87.4 billion
at
March 31, 2018
, an increase of
$39.4 billion
from
March 31, 2017
.
|
|
As of March 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
($ in millions)
|
|
|
|
|
|
|
|
|||||||
Open-End Funds
(1)
|
$
|
43,202.5
|
|
|
$
|
24,716.8
|
|
|
$
|
18,485.7
|
|
|
74.8
|
%
|
Closed-End Funds
|
6,132.7
|
|
|
6,814.3
|
|
|
(681.6
|
)
|
|
(10.0
|
)%
|
|||
Exchange Traded Funds
|
980.2
|
|
|
863.3
|
|
|
116.9
|
|
|
13.5
|
%
|
|||
Retail Separate Accounts
|
14,012.3
|
|
|
9,312.1
|
|
|
4,700.2
|
|
|
50.5
|
%
|
|||
Institutional Accounts
|
19,411.2
|
|
|
5,711.3
|
|
|
13,699.9
|
|
|
239.9
|
%
|
|||
Structured Products
|
3,704.6
|
|
|
602.0
|
|
|
3,102.6
|
|
|
515.4
|
%
|
|||
Total Long-Term
|
87,443.5
|
|
|
48,019.8
|
|
|
39,423.7
|
|
|
82.1
|
%
|
|||
Liquidity
(2)
|
1,641.6
|
|
|
—
|
|
|
1,641.6
|
|
|
N/M
|
|
|||
Total
|
$
|
89,085.1
|
|
|
$
|
48,019.8
|
|
|
$
|
41,065.3
|
|
|
85.5
|
%
|
Average Assets Under Management
(3)
|
$
|
90,639.0
|
|
|
$
|
46,373.0
|
|
|
$
|
44,266.0
|
|
|
95.5
|
%
|
Average Long-Term Assets Under Management
(3)
|
$
|
88,851.4
|
|
|
$
|
46,373.0
|
|
|
$
|
42,478.4
|
|
|
91.6
|
%
|
(1)
|
Represents assets under management of U.S. 1940 Act mutual funds and Undertakings for Collective Investments in Transferable Securities ("UCITS")
|
(2)
|
Represents assets under management in liquidity strategies, including in certain open-end funds and institutional accounts
|
(3)
|
Averages are calculated as follows:
|
|
Three Months Ended March 31,
|
||||||
($ in millions)
|
2018
|
|
2017
|
||||
Open-End Funds
(1)
|
|
|
|
||||
Beginning balance
|
$
|
43,077.6
|
|
|
$
|
23,432.8
|
|
Inflows
|
3,783.6
|
|
|
2,032.7
|
|
||
Outflows
|
(3,662.2
|
)
|
|
(2,134.7
|
)
|
||
Net flows
|
121.4
|
|
|
(102.0
|
)
|
||
Market performance
|
69.8
|
|
|
1,444.5
|
|
||
Other
(2)
|
(66.3
|
)
|
|
(58.5
|
)
|
||
Ending balance
|
$
|
43,202.5
|
|
|
$
|
24,716.8
|
|
Closed-End Funds
|
|
|
|
||||
Beginning balance
|
$
|
6,666.2
|
|
|
$
|
6,757.4
|
|
Inflows
|
—
|
|
|
—
|
|
||
Outflows
|
—
|
|
|
(81.6
|
)
|
||
Net flows
|
—
|
|
|
(81.6
|
)
|
||
Market performance
|
(406.1
|
)
|
|
280.8
|
|
||
Other
(2)
|
(127.4
|
)
|
|
(142.3
|
)
|
||
Ending balance
|
$
|
6,132.7
|
|
|
$
|
6,814.3
|
|
Exchange Traded Funds
|
|
|
|
||||
Beginning balance
|
$
|
1,039.2
|
|
|
$
|
596.8
|
|
Inflows
|
139.5
|
|
|
265.7
|
|
||
Outflows
|
(63.2
|
)
|
|
(23.0
|
)
|
||
Net flows
|
76.3
|
|
|
242.7
|
|
||
Market performance
|
(77.5
|
)
|
|
34.6
|
|
||
Other
(2)
|
(57.8
|
)
|
|
(10.8
|
)
|
||
Ending balance
|
$
|
980.2
|
|
|
$
|
863.3
|
|
Retail Separate Accounts
|
|
|
|
||||
Beginning balance
|
$
|
13,936.8
|
|
|
$
|
8,473.5
|
|
Inflows
|
701.3
|
|
|
689.2
|
|
||
Outflows
|
(786.5
|
)
|
|
(297.9
|
)
|
||
Net flows
|
(85.2
|
)
|
|
391.3
|
|
||
Market performance
|
160.7
|
|
|
453.8
|
|
||
Other
(2)
|
—
|
|
|
(6.5
|
)
|
||
Ending balance
|
$
|
14,012.3
|
|
|
$
|
9,312.1
|
|
Institutional Accounts
|
|
|
|
||||
Beginning balance
|
$
|
20,815.9
|
|
|
$
|
5,492.7
|
|
Inflows
|
423.0
|
|
|
277.7
|
|
||
Outflows
|
(1,649.7
|
)
|
|
(191.9
|
)
|
||
Net flows
|
(1,226.7
|
)
|
|
85.8
|
|
||
Market performance
|
(172.7
|
)
|
|
138.3
|
|
||
Other
(2)
|
(5.3
|
)
|
|
(5.5
|
)
|
||
Ending balance
|
$
|
19,411.2
|
|
|
$
|
5,711.3
|
|
Structured Products
|
|
|
|
||||
Beginning balance
|
$
|
3,298.8
|
|
|
$
|
613.1
|
|
Inflows
|
383.6
|
|
|
—
|
|
||
Outflows
|
—
|
|
|
(16.7
|
)
|
||
Net flows
|
383.6
|
|
|
(16.7
|
)
|
||
Market performance
|
37.9
|
|
|
10.3
|
|
||
Other
(2)
|
(15.7
|
)
|
|
(4.7
|
)
|
||
Ending balance
|
$
|
3,704.6
|
|
|
$
|
602.0
|
|
|
|
|
|
Total Long-Term
|
|
|
|
||||
Beginning balance
|
$
|
88,834.5
|
|
|
$
|
45,366.3
|
|
Inflows
|
5,431.0
|
|
|
3,265.3
|
|
||
Outflows
|
(6,161.6
|
)
|
|
(2,745.8
|
)
|
||
Net flows
|
(730.6
|
)
|
|
519.5
|
|
||
Market performance
|
(387.9
|
)
|
|
2,362.3
|
|
||
Other
(2)
|
(272.5
|
)
|
|
(228.3
|
)
|
||
Ending balance
|
$
|
87,443.5
|
|
|
$
|
48,019.8
|
|
Liquidity
|
|
|
|
||||
Beginning balance
|
$
|
2,128.7
|
|
|
$
|
—
|
|
Other
(2)
|
(487.1
|
)
|
|
—
|
|
||
Ending balance
|
$
|
1,641.6
|
|
|
$
|
—
|
|
Total
|
|
|
|
||||
Beginning balance
|
$
|
90,963.2
|
|
|
$
|
45,366.3
|
|
Inflows
|
5,431.0
|
|
|
3,265.3
|
|
||
Outflows
|
(6,161.6
|
)
|
|
(2,745.8
|
)
|
||
Net flows
|
(730.6
|
)
|
|
519.5
|
|
||
Market performance
|
(387.9
|
)
|
|
2,362.3
|
|
||
Other
(2)
|
(759.6
|
)
|
|
(228.3
|
)
|
||
Ending balance
|
$
|
89,085.1
|
|
|
$
|
48,019.8
|
|
(1)
|
Includes assets under management of U.S. 1940 Act mutual funds and UCITS
|
(2)
|
Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from liquidity strategies, and the impact on net flows from non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), structured products reset transactions and the use of leverage
|
|
As of March 31,
|
|
Change
|
|
% of Total
|
|||||||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|||||||||
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asset Class
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity
|
$
|
45,892.8
|
|
|
$
|
27,990.5
|
|
|
$
|
17,902.3
|
|
|
64.0
|
%
|
|
51.5
|
%
|
|
58.3
|
%
|
Fixed income
|
37,999.2
|
|
|
15,908.7
|
|
|
22,090.5
|
|
|
138.9
|
%
|
|
42.7
|
%
|
|
33.1
|
%
|
|||
Alternatives
(1)
|
3,551.5
|
|
|
4,120.6
|
|
|
(569.1
|
)
|
|
(13.8
|
)%
|
|
4.0
|
%
|
|
8.6
|
%
|
|||
Liquidity
(2)
|
1,641.6
|
|
|
—
|
|
|
1,641.6
|
|
|
N/M
|
|
|
1.8
|
%
|
|
—
|
%
|
|||
Total
|
$
|
89,085.1
|
|
|
$
|
48,019.8
|
|
|
$
|
41,065.3
|
|
|
85.5
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
Consists of real estate securities, master-limited partnerships, option strategies and other
|
(2)
|
Represents assets under management in liquidity strategies, including in certain open-end funds and institutional accounts
|
|
Three Months Ended March 31,
|
||||||||||||
($ in millions, except average fee earned data which is in basis points)
|
Average Fees Earned
|
|
Average Assets Under Management (2)
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Products
|
|
|
|
|
|
||||||||
Open-End Funds
(1)
|
50.3
|
|
|
50.5
|
|
|
$
|
43,751.4
|
|
|
$
|
24,157.6
|
|
Closed-End Funds
|
66.3
|
|
|
66.2
|
|
|
6,346.1
|
|
|
6,786.1
|
|
||
Exchange Traded Funds
|
18.2
|
|
|
31.7
|
|
|
1,045.7
|
|
|
759.2
|
|
||
Retail Separate Accounts
|
47.6
|
|
|
53.9
|
|
|
13,923.3
|
|
|
8,463.6
|
|
||
Institutional Accounts
|
31.8
|
|
|
37.2
|
|
|
20,165.8
|
|
|
5,603.2
|
|
||
Structured Products
|
39.2
|
|
|
33.5
|
|
|
3,619.1
|
|
|
603.3
|
|
||
All Long-Term Products
|
46.0
|
|
|
51.3
|
|
|
88,851.4
|
|
|
46,373.0
|
|
||
Liquidity
(3)
|
11.8
|
|
|
—
|
|
|
1,787.6
|
|
|
—
|
|
||
All Products
|
45.3
|
|
|
51.3
|
|
|
$
|
90,639.0
|
|
|
$
|
46,373.0
|
|
(1)
|
Represents assets under management of U.S. 1940 Act mutual funds and UCITS
|
(2)
|
Averages are calculated as follows:
|
(3)
|
Represents assets under management in liquidity strategies, including in certain open-end funds and institutional accounts
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Results of Operations
|
|
|
|
|
|
|
|
|||||||
Investment management fees
|
$
|
100,476
|
|
|
$
|
59,271
|
|
|
$
|
41,205
|
|
|
69.5
|
%
|
Other revenues
|
28,552
|
|
|
20,505
|
|
|
8,047
|
|
|
39.2
|
%
|
|||
Total revenues
|
129,028
|
|
|
79,776
|
|
|
49,252
|
|
|
61.7
|
%
|
|||
Total operating expenses
|
106,411
|
|
|
69,729
|
|
|
36,682
|
|
|
52.6
|
%
|
|||
Operating income (loss)
|
22,617
|
|
|
10,047
|
|
|
12,570
|
|
|
125.1
|
%
|
|||
Other income (expense), net
|
4,016
|
|
|
5,387
|
|
|
(1,371
|
)
|
|
(25.5
|
)%
|
|||
Interest income (expense), net
|
3,717
|
|
|
2,744
|
|
|
973
|
|
|
35.5
|
%
|
|||
Income (loss) before income taxes
|
30,350
|
|
|
18,178
|
|
|
12,172
|
|
|
67.0
|
%
|
|||
Income tax expense (benefit)
|
6,523
|
|
|
4,433
|
|
|
2,090
|
|
|
47.1
|
%
|
|||
Net income (loss)
|
23,827
|
|
|
13,745
|
|
|
10,082
|
|
|
73.4
|
%
|
|||
Noncontrolling interests
|
(527
|
)
|
|
(718
|
)
|
|
191
|
|
|
(26.6
|
)%
|
|||
Net Income (Loss) Attributable to Stockholders
|
23,300
|
|
|
13,027
|
|
|
10,273
|
|
|
78.9
|
%
|
|||
Preferred stockholder dividends
|
(2,084
|
)
|
|
(2,084
|
)
|
|
—
|
|
|
—
|
%
|
|||
Net Income (Loss) Attributable to Common Stockholders
|
$
|
21,216
|
|
|
$
|
10,943
|
|
|
$
|
10,273
|
|
|
93.9
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Investment management fees
|
|
|
|
|
|
|
|
|||||||
Open-end funds
|
$
|
54,361
|
|
|
$
|
30,526
|
|
|
$
|
23,835
|
|
|
78.1
|
%
|
Closed-end funds
|
10,378
|
|
|
11,079
|
|
|
(701
|
)
|
|
(6.3
|
)%
|
|||
Retail separate accounts
|
16,529
|
|
|
11,434
|
|
|
5,095
|
|
|
44.6
|
%
|
|||
Institutional accounts
|
15,818
|
|
|
5,141
|
|
|
10,677
|
|
|
207.7
|
%
|
|||
Structured products
|
2,326
|
|
|
498
|
|
|
1,828
|
|
|
367.1
|
%
|
|||
Other products
|
1,064
|
|
|
593
|
|
|
471
|
|
|
79.4
|
%
|
|||
Total investment management fees
|
100,476
|
|
|
59,271
|
|
|
41,205
|
|
|
69.5
|
%
|
|||
Distribution and service fees
|
12,607
|
|
|
10,783
|
|
|
1,824
|
|
|
16.9
|
%
|
|||
Administration and shareholder service fees
|
15,738
|
|
|
8,981
|
|
|
6,757
|
|
|
75.2
|
%
|
|||
Other income and fees
|
207
|
|
|
741
|
|
|
(534
|
)
|
|
(72.1
|
)%
|
|||
Total revenues
|
$
|
129,028
|
|
|
$
|
79,776
|
|
|
$
|
49,252
|
|
|
61.7
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|
|||||||
Employment expenses
|
$
|
60,696
|
|
|
$
|
39,641
|
|
|
$
|
21,055
|
|
|
53.1
|
%
|
Distribution and other asset-based expenses
|
22,291
|
|
|
15,323
|
|
|
6,968
|
|
|
45.5
|
%
|
|||
Other operating expenses
|
17,373
|
|
|
13,868
|
|
|
3,505
|
|
|
25.3
|
%
|
|||
Depreciation and amortization expense
|
6,051
|
|
|
897
|
|
|
5,154
|
|
|
574.6
|
%
|
|||
Total operating expenses
|
$
|
106,411
|
|
|
$
|
69,729
|
|
|
$
|
36,682
|
|
|
52.6
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|||||||
Realized and unrealized gain (loss) on investments, net
|
$
|
438
|
|
|
$
|
297
|
|
|
$
|
141
|
|
|
47.5
|
%
|
Realized and unrealized gain (loss) of CIP, net
|
2,259
|
|
|
4,444
|
|
|
(2,185
|
)
|
|
(49.2
|
)%
|
|||
Other income (expense), net
|
1,319
|
|
|
646
|
|
|
673
|
|
|
104.2
|
%
|
|||
Total Other Income (Expense), net
|
$
|
4,016
|
|
|
$
|
5,387
|
|
|
$
|
(1,371
|
)
|
|
(25.5
|
)%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Interest Income (Expense)
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
$
|
(3,858
|
)
|
|
$
|
(243
|
)
|
|
$
|
(3,615
|
)
|
|
1,487.7
|
%
|
Interest and dividend income
|
721
|
|
|
188
|
|
|
533
|
|
|
283.5
|
%
|
|||
Interest and dividend income of investments of CIP
|
21,403
|
|
|
5,656
|
|
|
15,747
|
|
|
278.4
|
%
|
|||
Interest expense of CIP
|
(14,549
|
)
|
|
(2,857
|
)
|
|
(11,692
|
)
|
|
409.2
|
%
|
|||
Total Interest Income (Expense), net
|
$
|
3,717
|
|
|
$
|
2,744
|
|
|
$
|
973
|
|
|
35.5
|
%
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Change
|
|||||||||
|
2018 vs. 2017
|
|
%
|
|||||||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
80,764
|
|
|
$
|
132,150
|
|
|
$
|
(51,386
|
)
|
|
(38.9
|
)%
|
Investments
|
125,348
|
|
|
108,492
|
|
|
16,856
|
|
|
15.5
|
%
|
|||
Debt
|
245,402
|
|
|
248,320
|
|
|
(2,918
|
)
|
|
(1.2
|
)%
|
|||
Total equity
|
608,787
|
|
|
588,557
|
|
|
20,230
|
|
|
3.4
|
%
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
%
|
|||||||
($ in thousands)
|
|
|
|
|
|
|
|
|||||||
Cash Flow Data
|
|
|
|
|
|
|
|
|||||||
Provided by (Used In):
|
|
|
|
|
|
|
|
|||||||
Operating Activities
|
$
|
(61,755
|
)
|
|
$
|
(15,182
|
)
|
|
$
|
(46,573
|
)
|
|
306.8
|
%
|
Investing Activities
|
(21,577
|
)
|
|
5,180
|
|
|
(26,757
|
)
|
|
(516.5
|
)%
|
|||
Financing Activities
|
(14,451
|
)
|
|
179,191
|
|
|
(193,642
|
)
|
|
(108.1
|
)%
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Securities Purchase Agreement among the Registrant, Sustainable Growth Advisers, LP ("SGA"), SGIA, LLC, Estancia Capital Partners, L.P. and each of the management partners of SGA named therein, dated as of February 1, 2018 (incorporated by reference to Exhibit 2.3 of the Registrant’s Annual Report on Form 10-K, filed February 27, 2018).
|
|
|
|
|
|
Amendment No. 1, dated as of February 15, 2018, to Credit Agreement by and among the Registrant, Morgan Stanley Senior Funding, Inc. as administrative agent, and the lenders party thereto (including, without limitation, the Amendment No. 1 Additional Term Lenders (as defined in the Amendment to the Credit Agreement) dated as of June 1, 2017 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed February 22, 2018).
|
|
|
|
|
|
Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
The following information formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2018 and December 31, 2017, (ii) Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2018 and 2017, (iii) Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2018 and 2017, (iv) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2018 and 2017, (v) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2018 and 2017 and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).
|
|
|
|
|
VIRTUS INVESTMENT PARTNERS, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
By:
|
/s/ Michael A. Angerthal
|
|
|
Michael A. Angerthal
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
I have reviewed this quarterly report on Form 10-Q of Virtus Investment Partners, Inc.;
|
|
|
|
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ George R. Aylward
|
George R. Aylward
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
1
|
I have reviewed this quarterly report on Form 10-Q of Virtus Investment Partners, Inc.;
|
|
|
|
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Michael A. Angerthal
|
Michael A. Angerthal
|
Executive Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ George R. Aylward
|
George R. Aylward
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
/s/ Michael A. Angerthal
|
Michael A. Angerthal
Executive Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|