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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-3962811
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 par value
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The NASDAQ Stock Market LLC
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(including attached Preferred Share Purchase Rights)
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Large accelerated filer
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x |
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
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Business.
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Manager
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Clients
|
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Investment Management Services
|
|
Assets
(in billions)
|
||
Ceredex Value Advisors
|
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Open-end funds, institutional investors
|
|
Value-oriented strategies;
large-, mid-, and small-cap equities
|
|
$
|
8.0
|
|
Duff & Phelps Investment Management
|
|
Closed- and open-end funds and institutional investors
|
|
Equity income strategies;
global listed infrastructure, U.S. and global real estate, energy, and international equities
|
|
$
|
9.0
|
|
Kayne Anderson Rudnick Investment Management
|
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Closed- and open-end funds, institutional investors, financial intermediaries and high-net-worth individuals
|
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Quality-oriented equity strategies;
small to large cap and in global, international and emerging strategies
|
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$
|
22.8
|
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Newfleet Asset Management
|
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Closed-and open-end funds, institutional investors, financial intermediaries and high-net-worth clients
|
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Fixed income strategies;
multi-sector, enhanced core strategies and dedicated sector strategies such as bank loans and high yield
|
|
$
|
10.2
|
|
Rampart Investment Management Company
|
|
Closed- and open-end funds, institutional investors and financial intermediaries
|
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Quantitative and option related strategies
|
|
$
|
1.0
|
|
Seix Investment Advisors
|
|
Open-end funds and institutional investors
|
|
High yield, leveraged loans, investment grade taxable and tax-exempt and multi-sector strategies
|
|
$
|
21.3
|
|
Silvant Capital Management
|
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Open-end funds and institutional investors
|
|
Growth equity strategies, including large- cap and small-cap
|
|
$
|
0.7
|
|
Sustainable Growth Advisers
|
|
Institutional investors and high-net-worth clients
|
|
Large-cap growth strategies, including U.S., global, international and emerging markets
|
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$
|
10.6
|
|
Fund assets
|
|
||
Open-end funds
|
$
|
37.7
|
|
Closed-end funds
|
6.0
|
|
|
Exchange traded funds
|
0.7
|
|
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Retail separate accounts
|
15.0
|
|
|
Institutional accounts
|
27.4
|
|
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Structured products
|
3.6
|
|
|
Total Long-Term
|
90.4
|
|
|
Liquidity (1)
|
1.6
|
|
|
Total Assets Under Management
|
$
|
92.0
|
|
Asset Class
|
|
Number of Funds Offered
|
|
Total Assets
|
|
Advisory Fee
Range (1) |
|||
|
|
|
|
($ in millions)
|
|
(%)
|
|||
Fixed Income
|
|
27
|
|
|
$
|
14,921.5
|
|
|
1.85-0.21
|
US Equity
|
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22
|
|
|
12,451.9
|
|
|
2.15-0.40
|
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International/Global Equity
|
|
9
|
|
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8,645.6
|
|
|
1.20-0.65
|
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Alternatives
|
|
9
|
|
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969.2
|
|
|
1.30-0.55
|
|
Asset Allocation
|
|
5
|
|
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721.8
|
|
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1.00-0.45
|
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Total Open-End Funds
|
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72
|
|
|
$
|
37,710.0
|
|
|
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(1)
|
Percentage of average daily net assets of each fund. The percentages listed represent the range of management advisory fees paid by the funds, from the highest to the lowest. The range indicated includes the impact of breakpoints at which management advisory fees for certain of the funds in each fund type decrease as assets in the funds increase. Subadvisory fees paid on funds managed by unaffiliated subadvisers are not reflected in the percentages listed.
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Fund Type/Name
|
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Total Assets
|
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Advisory
Fee
|
|
|
|||
|
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($ in millions)
|
|
%
|
|
|
|||
Asset Allocation
|
|
|
|
|
|
|
|||
DNP Select Income Fund
|
|
$
|
3,600.9
|
|
|
0.60-0.50
|
|
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(1)
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Virtus Global Dividend & Income Fund Inc.
|
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325.0
|
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0.70
|
|
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(2)
|
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Virtus Total Return Fund Inc.
|
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289.1
|
|
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0.85
|
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(2)
|
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Equity
|
|
|
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|
|
|
|||
Duff & Phelps Global Utility Income Fund
|
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800.7
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|
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1.00
|
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(1)
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Alternatives
|
|
|
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|
|||
Duff & Phelps Select MLP and Midstream Energy Fund
|
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190.1
|
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1.00
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(2)
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Fixed Income
|
|
|
|
|
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|
|||
Duff & Phelps Utility and Corporate Bond Trust
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355.3
|
|
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0.50
|
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(1)
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Virtus Global Multi-Sector Income Fund
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201.9
|
|
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0.95
|
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(2)
|
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DTF Tax-Free Income Inc.
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193.0
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0.50
|
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(1)
|
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Total Closed-End Funds
|
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$
|
5,956.0
|
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|
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(1)
|
Percentage of average weekly net assets. A range indicates that the fund has breakpoints at which management advisory fees decrease as assets in the fund increase.
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(2)
|
Percentage of average daily net assets of each fund.
|
Fund Name
|
|
Total Assets
|
|
Advisory
Fee (1) |
|||
|
|
($ in millions)
|
|
%
|
|||
InfraCap MLP ETF
|
|
$
|
405.9
|
|
|
0.075
|
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Virtus Newfleet Multi-Sector Bond ETF
|
|
77.2
|
|
|
0.700
|
|
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Virtus Newfleet Dynamic Credit ETF
|
|
60.5
|
|
|
0.550
|
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Virtus LifeSci Biotech Clinical Trials ETF
|
|
26.9
|
|
|
0.450
|
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Virtus LifeSci Biotech Products ETF
|
|
24.5
|
|
|
0.450
|
|
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InfraCap REIT Preferred ETF
|
|
21.1
|
|
|
0.075
|
|
|
Reaves Utilities ETF
|
|
13.4
|
|
|
0.075
|
|
|
Virtus Glovista Emerging Markets ETF
|
|
12.5
|
|
|
0.260
|
|
|
Virtus Cumberland Municipal Bond ETF
|
|
11.2
|
|
|
0.245
|
|
|
Virtus InfraCap U.S. Preferred Stock ETF
|
|
9.9
|
|
|
0.140
|
|
|
Virtus WMC Global Factor Opportunities ETF
|
|
4.5
|
|
|
0.280
|
|
|
Total ETFs
|
|
$
|
667.6
|
|
|
|
(1)
|
Percentage of average daily net assets of each fund. Subadvisory fees paid on funds managed by unaffiliated subadvisers are not reflected in the percentages listed.
|
Asset Class
|
|
Total Assets
|
||
|
|
($ in millions)
|
||
Equity
|
|
$
|
9,474.8
|
|
Fixed income
|
|
1,745.8
|
|
|
Alternative
|
|
54.3
|
|
|
Total Intermediary-Sold Managed Accounts
|
|
$
|
11,274.9
|
|
Asset Class
|
|
Total Assets
|
||
|
|
($ in millions)
|
||
Equity
|
|
$
|
2,252.0
|
|
Fixed income
|
|
1,400.9
|
|
|
Alternative
|
|
69.2
|
|
|
Asset Allocation
|
|
1.4
|
|
|
Total Private Client Accounts
|
|
$
|
3,723.5
|
|
Asset Class
|
|
Total Assets
|
||
|
|
($ in millions)
|
||
Equity
|
|
$
|
16,507.8
|
|
Fixed income
|
|
9,875.5
|
|
|
Alternatives
|
|
1,061.7
|
|
|
Total Institutional Accounts
|
|
$
|
27,445.0
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Open-end funds
|
$
|
231,175
|
|
|
$
|
175,260
|
|
|
$
|
129,542
|
|
Closed-end funds
|
41,455
|
|
|
44,687
|
|
|
43,342
|
|
|||
Retail separate accounts
|
73,532
|
|
|
54,252
|
|
|
40,155
|
|
|||
Institutional accounts
|
77,711
|
|
|
46,600
|
|
|
18,707
|
|
|||
Structured products
|
9,622
|
|
|
6,302
|
|
|
2,211
|
|
|||
Other products (1)
|
3,526
|
|
|
3,974
|
|
|
1,273
|
|
|||
Total investment management fees
|
437,021
|
|
|
331,075
|
|
|
235,230
|
|
|||
Administration fees
|
44,503
|
|
|
34,413
|
|
|
26,997
|
|
|||
Shareholder service fees
|
19,111
|
|
|
14,583
|
|
|
11,264
|
|
|||
Total
|
$
|
500,635
|
|
|
$
|
380,071
|
|
|
$
|
273,491
|
|
Item 1A.
|
Risk Factors.
|
•
|
General domestic and global economic and political conditions can influence assets under management.
Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, commodity prices, currency exchange rates and controls and national and international political circumstances (including wars, terrorist acts and security operations) and other conditions may impact the equity and credit markets which may influence our assets under management. Capital and credit markets can experience substantial volatility. Employment rates, continued economic weakness and budgetary challenges in parts of the world, the prospective impact of the United Kingdom’s withdrawal from the European Union, uncertainty regarding
|
•
|
The value of assets under management can decline due to price declines in specific securities, market segments or geographic areas where those assets are invested.
Funds and portfolios that we manage, focused on certain geographic markets and industry sectors, are particularly vulnerable to political, social and economic events in those markets and sectors. If these markets or industries decline or experience volatility, this could have a negative impact on our assets under management and our revenues. For example, certain non-U.S. markets, particularly emerging markets, are not as developed or as efficient as the U.S. financial markets and, as a result, may be less liquid, less regulated and significantly more volatile than the U.S. financial markets. Liquidity in such markets may be adversely impacted by factors including political or economic events, government policies, expropriation, volume trading limits by foreign investors, and social or civil unrest. These factors may negatively impact the market value of an investment or our ability to dispose of it.
|
•
|
Any real or perceived negative absolute or relative performance could negatively impact the maintenance and growth of assets under management.
Sales and redemptions of our investment strategies can be affected by investment performance relative to other competing investment strategies or to established benchmarks. Our investment management strategies are rated, ranked or assessed by independent third-parties, distribution partners, and industry periodicals and services. These assessments often influence the investment decisions of clients. If the performance or assessment of our investment strategies is seen as underperforming relative to peers, it could result in an increase in the withdrawal of assets by existing clients and the inability to attract additional investments from existing and new clients. In addition, certain of our investment strategies have capacity constraints, as there is a limit to the number of securities available for the strategy to operate effectively. In those instances, we may choose to limit access to new or existing investors. In addition, certain mutual funds employ the use of leverage as part of their investment strategies, which will increase or decrease assets under management, and the risk associated with the investment, as the proceeds from the use of leverage are invested in accordance with the funds’ investment strategies.
|
•
|
Changes in interest rates can have adverse effects on our assets under management.
Increases in interest rates from their historically low levels may adversely affect the net asset values of our assets under management. Furthermore, increases in interest rates may result in reduced prices in equity markets. Conversely, decreases in interest rates could lead to outflows in fixed income assets that we manage as investors seek higher yields. Any of these effects could lower our assets under management and revenues and, if our revenues decline without a commensurate reduction in our expenses, would lead to a reduction in our net income.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Period
|
|
Total number of shares purchased
|
|
Average price paid per share
(1)
|
|
Total number of shares purchased as part of publicly announced plans or programs
(2)
|
|
Maximum number of shares that may yet be purchased under the plans or programs
(2)
|
|||||
October 1—31, 2018
|
|
9,426
|
|
|
$
|
99.19
|
|
|
9,426
|
|
|
775,524
|
|
November 1—30, 2018
|
|
95,374
|
|
|
$
|
98.90
|
|
|
95,374
|
|
|
680,150
|
|
December 1—31, 2018
|
|
55,347
|
|
|
$
|
83.59
|
|
|
55,347
|
|
|
624,803
|
|
Total
|
|
160,147
|
|
|
|
|
160,147
|
|
|
|
(1)
|
Average price paid per share is calculated on a settlement basis and excludes commissions.
|
Item 6.
|
Selected Financial Data.
|
|
Years Ended December 31,
|
||||||||||||||||||
($ in thousands, except per share data)
|
2018 (1)
|
|
2017 (1)(3)
|
|
2016 (1)
|
|
2015 (2)
|
|
2014 (2)
|
||||||||||
Results of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
552,235
|
|
|
$
|
425,607
|
|
|
$
|
322,554
|
|
|
$
|
381,977
|
|
|
$
|
450,598
|
|
Operating expenses
|
439,136
|
|
|
367,572
|
|
|
271,740
|
|
|
301,599
|
|
|
319,878
|
|
|||||
Operating income (loss)
|
113,099
|
|
|
58,035
|
|
|
50,814
|
|
|
80,378
|
|
|
130,720
|
|
|||||
Income tax expense (benefit)
|
32,961
|
|
|
40,490
|
|
|
21,044
|
|
|
36,972
|
|
|
39,349
|
|
|||||
Net income (loss)
|
76,080
|
|
|
39,939
|
|
|
48,763
|
|
|
30,671
|
|
|
96,965
|
|
|||||
Net income (loss) attributable to common stockholders
|
67,192
|
|
|
28,676
|
|
|
48,502
|
|
|
35,106
|
|
|
97,700
|
|
|||||
Earnings (loss) per share—basic
|
9.37
|
|
|
4.09
|
|
|
6.34
|
|
|
3.99
|
|
|
10.75
|
|
|||||
Earnings (loss) per share—diluted
|
8.86
|
|
|
3.96
|
|
|
6.20
|
|
|
3.92
|
|
|
10.51
|
|
|||||
Cash dividends declared per preferred share
|
7.25
|
|
|
7.25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash dividends declared per common share
|
2.00
|
|
|
1.80
|
|
|
1.80
|
|
|
1.80
|
|
|
1.35
|
|
|||||
|
As of December 31,
|
||||||||||||||||||
|
2018 (1)
|
|
2017 (1)(3)
|
|
2016 (2)
|
|
2015 (2)
|
|
2014 (2)
|
||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
201,705
|
|
|
$
|
132,150
|
|
|
$
|
64,588
|
|
|
$
|
87,574
|
|
|
$
|
202,847
|
|
Investments
|
79,558
|
|
|
108,492
|
|
|
89,371
|
|
|
56,738
|
|
|
63,448
|
|
|||||
Investments of consolidated investment products
|
1,749,568
|
|
|
1,597,752
|
|
|
489,042
|
|
|
522,820
|
|
|
236,652
|
|
|||||
Goodwill and other intangible assets, net
|
629,178
|
|
|
472,107
|
|
|
45,215
|
|
|
47,588
|
|
|
47,043
|
|
|||||
Total assets
|
2,870,535
|
|
|
2,590,799
|
|
|
824,388
|
|
|
859,729
|
|
|
698,773
|
|
|||||
Accrued compensation and benefits
|
93,339
|
|
|
86,658
|
|
|
47,885
|
|
|
49,617
|
|
|
54,815
|
|
|||||
Debt
|
329,184
|
|
|
248,320
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|||||
Notes payable of consolidated investment product
|
1,620,260
|
|
|
1,457,435
|
|
|
328,761
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
2,169,187
|
|
|
1,981,397
|
|
|
465,449
|
|
|
276,408
|
|
|
112,350
|
|
|||||
Redeemable noncontrolling interests
|
57,481
|
|
|
4,178
|
|
|
37,266
|
|
|
73,864
|
|
|
23,071
|
|
|||||
Mandatory convertible preferred stock
|
110,843
|
|
|
110,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total equity
|
643,867
|
|
|
605,224
|
|
|
321,673
|
|
|
509,457
|
|
|
563,352
|
|
|||||
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
($ in millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets Under Management
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets under management
|
$
|
92,030
|
|
|
$
|
90,963
|
|
|
$
|
45,366
|
|
|
$
|
47,385
|
|
|
$
|
56,702
|
|
Total long-term assets under management
|
$
|
90,417
|
|
|
$
|
88,835
|
|
|
$
|
45,366
|
|
|
$
|
47,385
|
|
|
$
|
56,702
|
|
(1)
|
Derived from audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
(2)
|
Derived from audited consolidated financial statements not included in this Annual Report on Form 10-K.
|
(3)
|
On June 1, 2017, we completed the acquisition of RidgeWorth Investments. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion of the RidgeWorth acquisition.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Net income per diluted share was
$8.86
in
2018
, up
$4.90
, or
123.7%
, from
$3.96
per diluted share in
2017
.
|
•
|
Total sales (inflows) were $
22.8 billion
in
2018
compared with $
15.4 billion
in
2017
. Net outflows were
$3.7 billion
in
2018
compared with
$0.2 billion
in
2017
.
|
•
|
Assets under management were
$92.0 billion
at
December 31, 2018
compared with
$91.0 billion
at
December 31, 2017
.
|
|
|
|
Three-Year:
|
Three-Year
|
|
|
Benchmark Index
|
Average Return (1)
|
Benchmark Index
|
Fund Type/Name
|
Assets
($ in millions) |
Morningstar Peer Group
|
Peer Group Percentile Ranking (2)
|
Return (3)
|
Retail Funds
|
|
|
(%)
|
(%)
|
Alternatives
|
|
|
|
|
Virtus Duff & Phelps Real Estate Securities Fund
|
$542.3
|
FTSE NAREIT Equity REITs Index
|
1.99
|
2.89
|
|
|
Real Estate Funds
|
54
|
|
Virtus Duff & Phelps International Real Estate Securities Fund
|
167.9
|
FTSE EPRA NAREIT Developed ex-U.S. Index (net)
|
5.01
|
4.40
|
|
|
Global Real Estate Funds
|
11
|
|
Virtus Duff & Phelps Global Infrastructure Fund
|
81.2
|
Global Infrastructure Linked Benchmark (4)
|
7.32
|
7.77
|
|
|
Infrastructure Funds
|
15
|
|
Virtus Aviva Multi-Strategy Target Return Fund
|
64.4
|
U.S. Treasury Federal Funds Rate
|
(2.07)
|
0.74
|
|
|
Multialternative Funds
|
94
|
|
Virtus Duff & Phelps Global Real Estate Securities Fund
|
40.3
|
FTSE EPRA NAREIT Developed Index (net)
|
3.95
|
2.72
|
|
|
Global Real Estate Funds
|
21
|
|
|
|
|
Three-Year:
|
Three-Year
|
|
|
Benchmark Index
|
Average Return (1)
|
Benchmark Index
|
Fund Type/Name
|
Assets
($ in millions) |
Morningstar Peer Group
|
Peer Group Percentile Ranking (2)
|
Return (3)
|
Asset Allocation
|
|
|
|
|
Virtus Strategic Allocation Fund
|
404.3
|
Strategic Allocation Fund Linked Benchmark (5)
|
4.18
|
6.97
|
|
|
Allocation--50% to 70% Equity
|
69
|
|
Virtus Tactical Allocation Fund
|
124.9
|
Tactical Allocation Fund Linked Benchmark (6)
|
4.28
|
6.89
|
|
|
Allocation--50% to 70% Equity
|
66
|
|
Virtus Rampart Multi-Asset Trend Fund
|
61.3
|
Dow Jones Global Moderate Portfolio Index
|
1.62
|
5.53
|
|
|
Tactical Allocation
|
79
|
|
Virtus Herzfeld Fund
|
51.8
|
60% MSCI AC World Index (net) /
40% Bloomberg Barclays U.S. Aggregate |
6.47
|
4.92
|
|
|
Allocation--50% to 70% Equity
|
12
|
|
Equity
|
|
|
|
|
Virtus KAR Small-Cap Growth Fund
|
4,053.7
|
Russell 2000® Growth Index
|
22.91
|
7.24
|
|
|
Small Growth Funds
|
1
|
|
Virtus Ceredex Mid-Cap Value Equity Fund
|
2,515.0
|
Russell Midcap® Value Index
|
7.34
|
6.06
|
|
|
Mid-Cap Value Funds
|
20
|
|
Virtus Ceredex Large-Cap Value Equity Fund
|
1,318.2
|
Russell 1000® Value Index
|
6.34
|
6.95
|
|
|
Large Value Funds
|
62
|
|
Virtus KAR Small-Cap Core Fund
|
1,208.9
|
Russell 2000® Index
|
15.83
|
7.36
|
|
|
Small Growth Funds
|
3
|
|
Virtus Ceredex Small-Cap Value Equity Fund
|
556.5
|
Russell 2000® Index
|
7.65
|
7.37
|
|
|
Small Blend Funds
|
23
|
|
Virtus KAR Small-Cap Value Fund
|
501.4
|
Russell 2000® Value Index
|
7.56
|
7.37
|
|
|
Small Growth Funds
|
63
|
|
Virtus KAR Capital Growth Fund
|
424.1
|
Russell 1000® Growth Index
|
7.18
|
11.15
|
|
|
Large Growth Funds
|
81
|
|
Virtus Rampart Equity Trend Fund
|
358.5
|
S&P 500® Index
|
2.97
|
9.26
|
|
|
Large Blend Funds
|
97
|
|
Virtus KAR Mid-Cap Core Fund
|
267.4
|
Russell Midcap® Index
|
10.04
|
7.04
|
|
|
Mid-Cap Growth Funds
|
16
|
|
Virtus Rampart Sector Trend Fund
|
216.7
|
S&P 500® Index
|
4.41
|
9.26
|
|
|
Large Blend Funds
|
94
|
|
Virtus KAR Mid-Cap Growth Fund
|
169.9
|
Russell Midcap® Growth Index
|
13.52
|
8.59
|
|
|
Mid-Cap Growth Funds
|
3
|
|
Virtus Rampart Enhanced Core Equity Fund
|
131.3
|
S&P 500® Index
|
6.18
|
9.26
|
|
|
Large Blend Funds
|
82
|
|
Virtus Silvant Large-Cap Growth Stock Fund
|
97.3
|
Russell 1000® Growth Index
|
6.67
|
11.15
|
|
|
Large Growth Funds
|
85
|
|
|
|
|
Three-Year:
|
Three-Year
|
|
|
Benchmark Index
|
Average Return (1)
|
Benchmark Index
|
Fund Type/Name
|
Assets
($ in millions) |
Morningstar Peer Group
|
Peer Group Percentile Ranking (2)
|
Return (3)
|
Virtus Zevenbergen Innovative Growth Stock Fund
|
96.2
|
Russell 3000® Growth Index
|
13.44
|
10.85
|
|
|
Large Growth Funds
|
4
|
|
Virtus Horizon Wealth Masters Fund
|
51.5
|
Russell Midcap® Index
|
5.35
|
7.04
|
|
|
Mid-Cap Blend Funds
|
58
|
|
Virtus Silvant Small-Cap Growth Stock Fund
|
23.9
|
Russell 2000® Growth Index
|
5.31
|
7.24
|
|
|
Small Growth Funds
|
86
|
|
Fixed Income
|
|
|
|
|
Virtus Newfleet Multi-Sector Short Term Bond Fund
|
6,246.0
|
ICE BofAML 1-3 Year A-BBB US Corporate Index
|
2.85
|
2.06
|
|
|
Short-Term Bond Funds
|
7
|
|
Virtus Seix Floating Rate High Income Fund
|
5,308.9
|
Credit Suisse Leveraged Loan Index
|
4.98
|
5.03
|
|
|
Bank Loan Funds
|
17
|
|
Virtus Seix Total Return Bond Fund
|
444.6
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
1.80
|
2.06
|
|
|
Intermediate-Term Bond Funds
|
69
|
|
Virtus Newfleet Senior Floating Rate Fund
|
426.4
|
S&P/LSTA Leveraged Loan Index
|
3.69
|
4.83
|
|
|
Bank Loan Funds
|
52
|
|
Virtus Newfleet Low Duration Income Fund
|
384.4
|
Low Duration Income Linked Benchmark (7)
|
1.98
|
1.60
|
|
|
Short-Term Bond
|
26
|
|
Virtus Seix Investment Grade Tax-Exempt Bond Fund
|
322.0
|
Bloomberg Barclays Municipal 1-15 Yr Blend (1-17) Index
|
1.50
|
1.96
|
|
|
Muni National Interm
|
65
|
|
Virtus Seix High Income Fund
|
296.7
|
Bloomberg Barclays U.S. Corporate High Yield Bond Index
|
6.95
|
7.23
|
|
|
High Yield Bond Funds
|
14
|
|
Virtus Seix High Yield Fund
|
290.3
|
ICE BofAML US High Yield BB-B Constrained Index
|
6.01
|
6.33
|
|
|
High Yield Bond Funds
|
37
|
|
Virtus Newfleet Multi-Sector Intermediate Bond Fund
|
248.0
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
4.68
|
2.06
|
|
|
Multisector Bond Funds
|
24
|
|
Virtus Seix Core Bond Fund
|
145.8
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
1.97
|
2.06
|
|
|
Intermediate Term Bond Funds
|
59
|
|
Virtus Newfleet Tax-Exempt Bond Fund
|
137.0
|
Virtus Tax-Exempt Bond Fund Linked Benchmark (8)
|
1.75
|
2.03
|
|
|
Muni National Interm Funds
|
45
|
|
Virtus Seix Georgia Tax-Exempt Bond Fund
|
75.1
|
Bloomberg Barclays Municipal Bond Index
|
1.69
|
2.30
|
|
|
Muni Single-State Interm Funds
|
22
|
|
|
|
|
Three-Year:
|
Three-Year
|
|
|
Benchmark Index
|
Average Return (1)
|
Benchmark Index
|
Fund Type/Name
|
Assets
($ in millions) |
Morningstar Peer Group
|
Peer Group Percentile Ranking (2)
|
Return (3)
|
Virtus Newfleet Credit Opportunities Fund
|
74.9
|
Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Bond Index
|
3.11
|
7.23
|
|
|
High Yield Bond Funds
|
96
|
|
Virtus Newfleet Bond Fund
|
64.3
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
2.67
|
2.06
|
|
|
Intermediate Term Bond Funds
|
21
|
|
Virtus Newfleet High Yield Fund
|
56.9
|
Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Bond Index
|
5.13
|
7.23
|
|
|
High Yield Bond
|
65
|
|
Virtus Seix High Grade Municipal Bond Fund
|
49.3
|
Bloomberg Barclays Municipal Bond Index
|
2.27
|
2.30
|
|
|
Muni National Long Funds
|
39
|
|
Virtus Seix Corporate Bond Fund
|
40.9
|
Bloomberg Barclays U.S. Corporate Investment Grade Bond Index
|
3.61
|
3.26
|
|
|
Corporate Bond Funds
|
29
|
|
Virtus Seix U.S. Mortgage Fund
|
24.7
|
Bloomberg Barclays U.S. Mortgage Backed Securities Index
|
1.42
|
1.71
|
|
|
Intermediate Government Funds
|
21
|
|
Virtus Newfleet CA Tax-Exempt Bond Fund
|
24.0
|
Bloomberg Barclays California Municipal Bond Index
|
1.99
|
2.17
|
|
|
Muni California Long Funds
|
58
|
|
Virtus Seix Virginia Intermediate Municipal Bond Fund
|
23.7
|
Bloomberg Barclays Municipal 1-15 Yr Blend (1-17) Index
|
1.76
|
1.96
|
|
|
Muni Single State Interm Funds
|
18
|
|
Virtus Seix Short-Term Municipal Bond Fund
|
20.2
|
Bloomberg Barclays Municipal 1-5 Yr Index
|
0.90
|
1.15
|
|
|
Muni National Short
|
46
|
|
Virtus Seix North Carolina Tax-Exempt Bond Fund
|
15.6
|
Bloomberg Barclays Municipal Bond Index
|
1.32
|
2.30
|
|
|
Muni Single State Interm Funds
|
55
|
|
International/Global
|
|
|
|
|
Virtus Vontobel Emerging Markets Opportunities Fund
|
6,244.8
|
MSCI Emerging Markets Index (net)
|
5.33
|
9.25
|
|
|
Diversified Emerging Markets
|
74
|
|
Virtus Vontobel Foreign Opportunities Fund
|
953.2
|
MSCI EAFE® Index (net)
|
3.67
|
2.87
|
|
|
Foreign Large Growth
|
39
|
|
Virtus KAR International Small-Cap Fund
|
900.1
|
MSCI AC World Ex U.S. Small Cap Index (net)
|
13.17
|
3.82
|
|
|
Foreign Small/Mid Blend
|
1
|
|
Virtus Vontobel Global Opportunities Fund
|
211.1
|
MSCI AC World Index (net)
|
8.57
|
6.60
|
|
|
World Large Stock
|
11
|
|
Virtus WCM International Equity Fund
|
90.2
|
MSCI AC World ex USA Index (net)
|
6.70
|
4.48
|
|
|
Foreign Large Growth
|
9
|
|
Virtus KAR Emerging Markets Small-Cap Fund
|
69.7
|
MSCI Emerging Markets Small Cap Index (net)
|
12.91
|
3.68
|
|
|
Diversified Emerging Markets
|
3
|
|
Virtus KAR Global Quality Dividend Fund
|
33.7
|
Global Quality Dividend Linked Benchmark (9)
|
5.76
|
8.79
|
|
|
World Large Stock
|
N/A
|
|
|
|
|
Three-Year:
|
Three-Year
|
|
|
Benchmark Index
|
Average Return (1)
|
Benchmark Index
|
Fund Type/Name
|
Assets
($ in millions) |
Morningstar Peer Group
|
Peer Group Percentile Ranking (2)
|
Return (3)
|
Global Funds
|
|
|
|
|
Virtus G.F. Multi-Sector Short Duration Bond Fund
|
49.7
|
Bloomberg Barclays U.S. Intermediate Aggregate Bond Index
|
2.05
|
1.72
|
|
|
USD Diversified Bond - Short Term
|
43
|
|
Virtus G.F. U.S. Small Cap Focus Fund
|
30.4
|
Russell 2000® Index
|
21.47
|
7.36
|
|
|
US Small-Cap Equity
|
2
|
|
Variable Insurance Funds
|
|
|
|
|
Virtus KAR Capital Growth Series
|
187.2
|
Russell 1000® Growth Index
|
7.75
|
11.15
|
|
|
Large Growth
|
73
|
|
Virtus Duff & Phelps International Series
|
137.1
|
MSCI EAFE® Index (net)
|
(1.67)
|
2.87
|
|
|
Foreign Large Blend
|
99
|
|
Virtus Newfleet Multi-Sector Intermediate Bond Series
|
114.6
|
Bloomberg Barclays U.S. Aggregate Bond Index
|
4.32
|
2.06
|
|
|
Multisector Bond
|
34
|
|
Virtus Rampart Enhanced Core Equity Series
|
85.8
|
S&P 500® Index
|
5.44
|
9.26
|
|
|
Large Blend
|
88
|
|
Virtus KAR Small-Cap Growth Series
|
84.0
|
Russell 2000® Growth Index
|
25.58
|
7.24
|
|
|
Small Growth
|
1
|
|
Virtus Strategic Allocation Series
|
79.4
|
Strategic Allocation Series Linked Benchmark (10)
|
4.12
|
6.97
|
|
|
Allocation--50% to 70% Equity
|
71
|
|
Virtus KAR Small-Cap Value Series
|
69.7
|
Russell 2000® Value Index
|
8.55
|
7.37
|
|
|
Small Growth
|
48
|
|
Virtus Duff & Phelps Real Estate Securities Series
|
65.6
|
FTSE NAREIT Equity REITs Index
|
1.90
|
2.89
|
|
|
Real Estate
|
56
|
|
Other Funds
|
55.1
|
|
|
|
|
$37,710.0
|
|
|
|
(1)
|
Represents the average annual total return performance of the largest share class as measured by net assets for which performance data is available. Performance shown does not include the effect of applicable sales charges, if any. Had any applicable sales charges been reflected, performance would be lower than shown above.
|
(2)
|
Represents the peer ranking of the fund’s average annual total return according to Morningstar. Fund returns are reported net of fees.
|
(3)
|
Represents the average annual total return of the benchmark index. Benchmark indices are unmanaged, their returns do not reflect any fees, expenses or sales charges, and they are not available for direct investment.
|
(4)
|
The Global Infrastructure Linked Benchmark consists of the FTSE Developed Infrastructure 50/50 Index (net). The Global Infrastructure Linked Benchmark prior to October 1, 2016 consisted of the MSCI World Infrastructure Sector Capped Index.
|
(5)
|
The Strategic Allocation Fund Linked Benchmark consists of 45% Russell 1000
®
Growth Index, 15% MSCI EAFE
®
Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index. The Strategic Allocation Fund Linked Benchmark prior to September 7, 2016 consisted of 60% S&P 500
®
Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index.
|
(6)
|
The Tactical Allocation Fund Linked Benchmark consists of 45% Russell 1000
®
Growth Index, 15% MSCI EAFE
®
Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index. The Tactical Allocation Fund Linked Benchmark prior to September 7, 2016 consisted of 50% S&P 500
®
Index and 50% Bloomberg Barclays U.S. Aggregate Bond Index.
|
(7)
|
The Low Duration Income Linked Benchmark costs of the ICE BofAML 1-5 Year US Corporate & Government Bond Index. The Low Duration Income Linked Benchmark prior to February 1, 2017 consisted of the Bloomberg Barclays U.S. Intermediate Government/Credit Bond Index.
|
(8)
|
The Tax-Exempt Bond Linked Benchmark consists of the ICE BofAML 1-22 Year US Municipal Securities Index, a subset of the Bank of America Merrill Lynch U.S. Municipal Securities Index.
|
(9)
|
The Global Quality Dividend Linked Benchmark consists of the Russell Developed Large Cap Index. The Global Quality Dividend Linked Benchmark prior to February 1, 2017 consisted of the Russell 1000
®
Value Index.
|
(10)
|
The Strategic Allocation Series Linked Benchmark consists of 45% Russell 1000
®
Growth Index, 15% MSCI EAFE
®
Index and 40% Bloomberg Barclays U.S. Aggregate Bond Index. The Strategic Allocation Series Linked Benchmark prior to September 7,
|
(11)
|
Represents all funds that do not yet have a three-year average return based on their inception date or funds with assets of less than $10.0 million.
|
|
As of December 31,
|
|
As of Change
|
||||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs.
2017 |
|
%
|
|
2017 vs.
2016 |
|
%
|
||||||||||||
Open-End Funds (1)
|
$
|
37,710.0
|
|
|
$
|
43,077.6
|
|
|
$
|
23,432.8
|
|
|
$
|
(5,367.6
|
)
|
|
(12.5
|
)%
|
|
$
|
19,644.8
|
|
|
83.8
|
%
|
Closed-End Funds
|
5,956.0
|
|
|
6,666.2
|
|
|
6,757.4
|
|
|
(710.2
|
)
|
|
(10.7
|
)%
|
|
(91.2
|
)
|
|
(1.3
|
)%
|
|||||
Exchange Traded Funds
|
667.6
|
|
|
1,039.2
|
|
|
596.8
|
|
|
(371.6
|
)
|
|
(35.8
|
)%
|
|
442.4
|
|
|
74.1
|
%
|
|||||
Retail Separate Accounts
|
14,998.4
|
|
|
13,936.8
|
|
|
8,473.5
|
|
|
1,061.6
|
|
|
7.6
|
%
|
|
5,463.3
|
|
|
64.5
|
%
|
|||||
Institutional Accounts
|
27,445.0
|
|
|
20,815.9
|
|
|
5,492.7
|
|
|
6,629.1
|
|
|
31.8
|
%
|
|
15,323.2
|
|
|
279.0
|
%
|
|||||
Structured Products
|
3,640.3
|
|
|
3,298.8
|
|
|
613.1
|
|
|
341.5
|
|
|
10.4
|
%
|
|
2,685.7
|
|
|
438.1
|
%
|
|||||
Total Long-Term
|
90,417.3
|
|
|
88,834.5
|
|
|
45,366.3
|
|
|
1,582.8
|
|
|
1.8
|
%
|
|
43,468.2
|
|
|
95.8
|
%
|
|||||
Liquidity (2)
|
1,612.5
|
|
|
2,128.7
|
|
|
—
|
|
|
(516.2
|
)
|
|
(24.2
|
)%
|
|
2,128.7
|
|
|
n/m
|
|
|||||
Total Assets Under Management
|
$
|
92,029.8
|
|
|
$
|
90,963.2
|
|
|
$
|
45,366.3
|
|
|
$
|
1,066.6
|
|
|
1.2
|
%
|
|
$
|
45,596.9
|
|
|
100.5
|
%
|
Average Long-Term Assets Under Management (3)
|
$
|
94,567.2
|
|
|
$
|
70,212.4
|
|
|
$
|
45,325.2
|
|
|
$
|
24,354.8
|
|
|
34.7
|
%
|
|
$
|
24,887.2
|
|
|
54.9
|
%
|
Average Assets Under Management (3)
|
$
|
96,278.2
|
|
|
$
|
72,286.1
|
|
|
$
|
45,325.2
|
|
|
$
|
23,992.1
|
|
|
33.2
|
%
|
|
$
|
26,960.9
|
|
|
59.5
|
%
|
(1)
|
Represents assets under management of U.S. retail funds, offshore funds and variable insurance funds
|
(2)
|
Represents assets under management in liquidity strategies, including certain open-end funds and institutional accounts
|
(3)
|
Averages are calculated as follows:
|
Asset Flows by Product
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
($ in millions)
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Open-End Funds (1)
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
43,077.6
|
|
|
$
|
23,432.8
|
|
|
$
|
28,882.1
|
|
Inflows
|
14,836.2
|
|
|
9,776.9
|
|
|
7,070.1
|
|
|||
Outflows
|
(17,098.4
|
)
|
|
(10,561.0
|
)
|
|
(13,117.7
|
)
|
|||
Net flows
|
(2,262.2
|
)
|
|
(784.1
|
)
|
|
(6,047.6
|
)
|
|||
Market performance
|
(2,521.5
|
)
|
|
5,107.0
|
|
|
898.7
|
|
|||
Other (2)
|
(583.9
|
)
|
|
15,321.9
|
|
|
(300.4
|
)
|
|||
Ending balance
|
$
|
37,710.0
|
|
|
$
|
43,077.6
|
|
|
$
|
23,432.8
|
|
Closed-End Funds
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
6,666.2
|
|
|
$
|
6,757.4
|
|
|
$
|
6,222.3
|
|
Inflows
|
21.6
|
|
|
—
|
|
|
—
|
|
|||
Outflows
|
—
|
|
|
(112.8
|
)
|
|
(103.3
|
)
|
|||
Net flows
|
21.6
|
|
|
(112.8
|
)
|
|
(103.3
|
)
|
|||
Market performance
|
(288.9
|
)
|
|
444.4
|
|
|
794.9
|
|
|||
Other (2)
|
(442.9
|
)
|
|
(422.8
|
)
|
|
(156.5
|
)
|
|||
Ending balance
|
$
|
5,956.0
|
|
|
$
|
6,666.2
|
|
|
$
|
6,757.4
|
|
Exchange Traded Funds
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
1,039.2
|
|
|
$
|
596.8
|
|
|
$
|
340.8
|
|
Inflows
|
290.5
|
|
|
732.6
|
|
|
382.8
|
|
|||
Outflows
|
(341.9
|
)
|
|
(152.6
|
)
|
|
(124.8
|
)
|
|||
Net flows
|
(51.4
|
)
|
|
580.0
|
|
|
258.0
|
|
|||
Market performance
|
(162.9
|
)
|
|
21.5
|
|
|
20.3
|
|
|||
Other (2)
|
(157.3
|
)
|
|
(159.1
|
)
|
|
(22.3
|
)
|
|||
Ending balance
|
$
|
667.6
|
|
|
$
|
1,039.2
|
|
|
$
|
596.8
|
|
Retail Separate Accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
13,936.8
|
|
|
$
|
8,473.5
|
|
|
$
|
6,784.4
|
|
Inflows
|
3,060.7
|
|
|
2,730.3
|
|
|
1,825.5
|
|
|||
Outflows
|
(2,439.8
|
)
|
|
(1,746.2
|
)
|
|
(1,156.9
|
)
|
|||
Net flows
|
620.9
|
|
|
984.1
|
|
|
668.6
|
|
|||
Market performance
|
(736.3
|
)
|
|
1,996.1
|
|
|
1,023.5
|
|
|||
Other (2)
|
1,177.0
|
|
|
2,483.1
|
|
|
(3.0
|
)
|
|||
Ending balance
|
$
|
14,998.4
|
|
|
$
|
13,936.8
|
|
|
$
|
8,473.5
|
|
Institutional Accounts
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
20,815.9
|
|
|
$
|
5,492.7
|
|
|
$
|
4,799.7
|
|
Inflows
|
4,143.3
|
|
|
1,684.4
|
|
|
1,345.3
|
|
|||
Outflows
|
(6,542.9
|
)
|
|
(2,698.1
|
)
|
|
(1,039.3
|
)
|
|||
Net flows
|
(2,399.6
|
)
|
|
(1,013.7
|
)
|
|
306.0
|
|
|||
Market performance
|
(992.0
|
)
|
|
1,339.4
|
|
|
412.6
|
|
|||
Other (2)
|
10,020.7
|
|
|
14,997.5
|
|
|
(25.6
|
)
|
|||
Ending balance
|
$
|
27,445.0
|
|
|
$
|
20,815.9
|
|
|
$
|
5,492.7
|
|
Structured Products
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
3,298.8
|
|
|
$
|
613.1
|
|
|
$
|
356.0
|
|
Inflows
|
421.4
|
|
|
474.3
|
|
|
316.3
|
|
|||
Outflows
|
(71.0
|
)
|
|
(345.8
|
)
|
|
(70.3
|
)
|
|||
Net flows
|
350.4
|
|
|
128.5
|
|
|
246.0
|
|
|||
Market performance
|
180.0
|
|
|
65.7
|
|
|
20.1
|
|
|||
Other (2)
|
(188.9
|
)
|
|
2,491.5
|
|
|
(9.0
|
)
|
|||
Ending balance
|
$
|
3,640.3
|
|
|
$
|
3,298.8
|
|
|
$
|
613.1
|
|
Total Long-Term
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
88,834.5
|
|
|
$
|
45,366.3
|
|
|
$
|
47,385.3
|
|
Inflows
|
22,773.7
|
|
|
15,398.5
|
|
|
10,940.0
|
|
|||
Outflows
|
(26,494.0
|
)
|
|
(15,616.5
|
)
|
|
(15,612.3
|
)
|
|||
Net flows
|
(3,720.3
|
)
|
|
(218.0
|
)
|
|
(4,672.3
|
)
|
|||
Market performance
|
(4,521.6
|
)
|
|
8,974.1
|
|
|
3,170.1
|
|
|||
Other (2)
|
9,824.7
|
|
|
34,712.1
|
|
|
(516.8
|
)
|
|||
Ending balance
|
$
|
90,417.3
|
|
|
$
|
88,834.5
|
|
|
$
|
45,366.3
|
|
Liquidity (3)
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
2,128.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other (2)
|
(516.2
|
)
|
|
2,128.7
|
|
|
—
|
|
|||
Ending balance
|
$
|
1,612.5
|
|
|
$
|
2,128.7
|
|
|
$
|
—
|
|
Total
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
90,963.2
|
|
|
$
|
45,366.3
|
|
|
$
|
47,385.3
|
|
Inflows
|
22,773.7
|
|
|
15,398.5
|
|
|
10,940.0
|
|
|||
Outflows
|
(26,494.0
|
)
|
|
(15,616.5
|
)
|
|
(15,612.3
|
)
|
|||
Net flows
|
(3,720.3
|
)
|
|
(218.0
|
)
|
|
(4,672.3
|
)
|
|||
Market performance
|
(4,521.6
|
)
|
|
8,974.1
|
|
|
3,170.1
|
|
|||
Other (2)
|
9,308.5
|
|
|
36,840.8
|
|
|
(516.8
|
)
|
|||
Ending balance
|
$
|
92,029.8
|
|
|
$
|
90,963.2
|
|
|
$
|
45,366.3
|
|
(1)
|
Represents assets under management of U.S. retail funds, offshore funds and variable insurance funds
|
(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
|
(3)
|
Represents assets under management in liquidity strategies, including in certain open-end funds and institutional accounts
|
|
December 31,
|
|
Change
|
||||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs.
2017 |
|
%
|
|
2017 vs.
2016 |
|
%
|
||||||||||||
Asset Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity
|
$
|
53,297.1
|
|
|
$
|
45,779.8
|
|
|
$
|
25,822.3
|
|
|
$
|
7,517.3
|
|
|
16.4
|
%
|
|
$
|
19,957.5
|
|
|
77.3
|
%
|
Fixed income
|
33,425.2
|
|
|
38,740.0
|
|
|
15,523.6
|
|
|
(5,314.8
|
)
|
|
(13.7
|
)%
|
|
23,216.4
|
|
|
149.6
|
%
|
|||||
Alternatives (1)
|
3,695.0
|
|
|
4,314.7
|
|
|
4,020.4
|
|
|
(619.7
|
)
|
|
(14.4
|
)%
|
|
294.3
|
|
|
7.3
|
%
|
|||||
Liquidity (2)
|
1,612.5
|
|
|
2,128.7
|
|
|
—
|
|
|
(516.2
|
)
|
|
(24.2
|
)%
|
|
2,128.7
|
|
|
N/M
|
|
|||||
Total
|
$
|
92,029.8
|
|
|
$
|
90,963.2
|
|
|
$
|
45,366.3
|
|
|
$
|
1,066.6
|
|
|
1.2
|
%
|
|
$
|
45,596.9
|
|
|
100.5
|
%
|
(1)
|
Consists of real estate securities, mid-stream energy securities and master limited partnerships, options strategies and other
|
(2)
|
Represents assets under management in liquidity strategies, including certain open-end funds and institutional accounts
|
|
December 31,
|
|||||||||||||||||||
($ in millions, except average fee earned data which is in basis points)
|
Average Fee Earned
(expressed in basis points) |
|
Average Assets Under Management
($ in millions) (2) |
|||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
Products
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Open-End Funds (1)
|
52.6
|
|
|
49.7
|
|
|
49.3
|
|
|
$
|
43,622.8
|
|
|
$
|
34,932.6
|
|
|
$
|
25,551.7
|
|
Closed-End Funds
|
66.0
|
|
|
66.0
|
|
|
65.8
|
|
|
6,283.7
|
|
|
6,770.0
|
|
|
6,583.6
|
|
|||
Exchange Traded Funds
|
14.9
|
|
|
25.0
|
|
|
31.4
|
|
|
984.9
|
|
|
890.8
|
|
|
406.3
|
|
|||
Retail Separate Accounts
|
48.2
|
|
|
48.6
|
|
|
54.3
|
|
|
15,069.1
|
|
|
11,001.2
|
|
|
7,273.9
|
|
|||
Institutional Accounts
|
31.1
|
|
|
32.1
|
|
|
37.3
|
|
|
24,965.8
|
|
|
14,515.0
|
|
|
5,009.4
|
|
|||
Structured Products
|
43.1
|
|
|
40.8
|
|
|
44.2
|
|
|
3,640.9
|
|
|
2,102.8
|
|
|
500.3
|
|
|||
All Long-Term Products
|
46.4
|
|
|
46.9
|
|
|
50.9
|
|
|
94,567.2
|
|
|
70,212.4
|
|
|
45,325.2
|
|
|||
Liquidity (3)
|
10.4
|
|
|
8.0
|
|
|
—
|
|
|
1,711.0
|
|
|
2,073.7
|
|
|
—
|
|
|||
All Products
|
45.7
|
|
|
45.8
|
|
|
50.9
|
|
|
$
|
96,278.2
|
|
|
$
|
72,286.1
|
|
|
$
|
45,325.2
|
|
(1)
|
Represents assets under management of U.S. retail funds, offshore funds and variable insurance funds
|
(3)
|
Represents assets under management in liquidity strategies, including certain open-end funds and institutional accounts
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Investment management fees
|
$
|
437,021
|
|
|
$
|
331,075
|
|
|
$
|
235,230
|
|
|
$
|
105,946
|
|
|
32.0
|
%
|
|
$
|
95,845
|
|
|
40.7
|
%
|
Other revenue
|
115,214
|
|
|
94,532
|
|
|
87,324
|
|
|
20,682
|
|
|
21.9
|
%
|
|
7,208
|
|
|
8.3
|
%
|
|||||
Total revenues
|
552,235
|
|
|
425,607
|
|
|
322,554
|
|
|
126,628
|
|
|
29.8
|
%
|
|
103,053
|
|
|
31.9
|
%
|
|||||
Total operating expenses
|
439,136
|
|
|
367,572
|
|
|
271,740
|
|
|
71,564
|
|
|
19.5
|
%
|
|
95,832
|
|
|
35.3
|
%
|
|||||
Operating income (loss)
|
113,099
|
|
|
58,035
|
|
|
50,814
|
|
|
55,064
|
|
|
94.9
|
%
|
|
7,221
|
|
|
14.2
|
%
|
|||||
Other income (expense), net
|
(23,180
|
)
|
|
18,161
|
|
|
8,819
|
|
|
(41,341
|
)
|
|
(227.6
|
)%
|
|
9,342
|
|
|
105.9
|
%
|
|||||
Interest income (expense), net
|
19,122
|
|
|
4,233
|
|
|
10,174
|
|
|
14,889
|
|
|
351.7
|
%
|
|
(5,941
|
)
|
|
(58.4
|
)%
|
|||||
Income (loss) before income taxes
|
109,041
|
|
|
80,429
|
|
|
69,807
|
|
|
28,612
|
|
|
35.6
|
%
|
|
10,622
|
|
|
15.2
|
%
|
|||||
Income tax expense (benefit)
|
32,961
|
|
|
40,490
|
|
|
21,044
|
|
|
(7,529
|
)
|
|
(18.6
|
)%
|
|
19,446
|
|
|
92.4
|
%
|
|||||
Net income (loss)
|
76,080
|
|
|
39,939
|
|
|
48,763
|
|
|
36,141
|
|
|
90.5
|
%
|
|
(8,824
|
)
|
|
(18.1
|
)%
|
|||||
Noncontrolling interests
|
(551
|
)
|
|
(2,927
|
)
|
|
(261
|
)
|
|
2,376
|
|
|
(81.2
|
)%
|
|
(2,666
|
)
|
|
1,021.5
|
%
|
|||||
Net Income (Loss) Attributable to Stockholders
|
$
|
75,529
|
|
|
$
|
37,012
|
|
|
$
|
48,502
|
|
|
$
|
38,517
|
|
|
104.1
|
%
|
|
$
|
(11,490
|
)
|
|
(23.7
|
)%
|
Preferred stockholder dividends
|
(8,337
|
)
|
|
(8,336
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
%
|
|
$
|
(8,336
|
)
|
|
N/M
|
|
||||
Net Income (Loss) Attributable to Common Stockholders
|
67,192
|
|
|
28,676
|
|
|
48,502
|
|
|
38,516
|
|
|
134.3
|
%
|
|
$
|
(19,826
|
)
|
|
(40.9
|
)%
|
||||
Earnings (loss) per share-diluted
|
$
|
8.86
|
|
|
$
|
3.96
|
|
|
$
|
6.20
|
|
|
$
|
4.90
|
|
|
123.7
|
%
|
|
$
|
(2.24
|
)
|
|
(36.1
|
)%
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Investment management fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Open-end funds
|
$
|
231,175
|
|
|
$
|
175,260
|
|
|
$
|
129,542
|
|
|
$
|
55,915
|
|
|
31.9
|
%
|
|
$
|
45,718
|
|
|
35.3
|
%
|
Closed-end funds
|
41,455
|
|
|
44,687
|
|
|
43,342
|
|
|
(3,232
|
)
|
|
(7.2
|
)%
|
|
1,345
|
|
|
3.1
|
%
|
|||||
Retail separate accounts
|
73,532
|
|
|
54,252
|
|
|
40,155
|
|
|
19,280
|
|
|
35.5
|
%
|
|
14,097
|
|
|
35.1
|
%
|
|||||
Institutional accounts
|
77,711
|
|
|
46,600
|
|
|
18,707
|
|
|
31,111
|
|
|
66.8
|
%
|
|
27,893
|
|
|
149.1
|
%
|
|||||
Structured products
|
9,622
|
|
|
6,302
|
|
|
2,211
|
|
|
3,320
|
|
|
52.7
|
%
|
|
4,091
|
|
|
185.0
|
%
|
|||||
Other products
|
3,526
|
|
|
3,974
|
|
|
1,273
|
|
|
(448
|
)
|
|
(11.3
|
)%
|
|
2,701
|
|
|
212.2
|
%
|
|||||
Total investment management fees
|
437,021
|
|
|
331,075
|
|
|
235,230
|
|
|
105,946
|
|
|
32.0
|
%
|
|
95,845
|
|
|
40.7
|
%
|
|||||
Distribution and service fees
|
50,715
|
|
|
44,322
|
|
|
48,250
|
|
|
6,393
|
|
|
14.4
|
%
|
|
(3,928
|
)
|
|
(8.1
|
)%
|
|||||
Administration and shareholder service fees
|
63,614
|
|
|
48,996
|
|
|
38,261
|
|
|
14,618
|
|
|
29.8
|
%
|
|
10,735
|
|
|
28.1
|
%
|
|||||
Other income and fees
|
885
|
|
|
1,214
|
|
|
813
|
|
|
(329
|
)
|
|
(27.1
|
)%
|
|
401
|
|
|
49.3
|
%
|
|||||
Total revenues
|
$
|
552,235
|
|
|
$
|
425,607
|
|
|
$
|
322,554
|
|
|
$
|
126,628
|
|
|
29.8
|
%
|
|
$
|
103,053
|
|
|
31.9
|
%
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employment expenses
|
$
|
238,501
|
|
|
$
|
191,394
|
|
|
$
|
135,641
|
|
|
$
|
47,107
|
|
|
24.6
|
%
|
|
$
|
55,753
|
|
|
41.1
|
%
|
Distribution and other asset-based expenses
|
92,441
|
|
|
71,987
|
|
|
69,049
|
|
|
20,454
|
|
|
28.4
|
%
|
|
2,938
|
|
|
4.3
|
%
|
|||||
Other operating expenses
|
74,853
|
|
|
69,410
|
|
|
50,274
|
|
|
5,443
|
|
|
7.8
|
%
|
|
19,136
|
|
|
38.1
|
%
|
|||||
Other operating expenses of consolidated investment products
|
3,515
|
|
|
8,531
|
|
|
6,953
|
|
|
(5,016
|
)
|
|
(58.8
|
)%
|
|
1,578
|
|
|
22.7
|
%
|
|||||
Restructuring and severance
|
87
|
|
|
10,580
|
|
|
4,270
|
|
|
(10,493
|
)
|
|
(99.2
|
)%
|
|
6,310
|
|
|
147.8
|
%
|
|||||
Depreciation and other amortization
|
4,597
|
|
|
3,497
|
|
|
3,092
|
|
|
1,100
|
|
|
31.5
|
%
|
|
405
|
|
|
13.1
|
%
|
|||||
Amortization expense
|
25,142
|
|
|
12,173
|
|
|
2,461
|
|
|
12,969
|
|
|
106.5
|
%
|
|
9,712
|
|
|
394.6
|
%
|
|||||
Total operating expenses
|
$
|
439,136
|
|
|
$
|
367,572
|
|
|
$
|
271,740
|
|
|
$
|
71,564
|
|
|
19.5
|
%
|
|
$
|
95,832
|
|
|
35.3
|
%
|
|
Years Ended December 31,
|
Change
|
|||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Realized and unrealized gain (loss) on investments, net
|
$
|
(5,217
|
)
|
|
$
|
2,973
|
|
|
$
|
4,982
|
|
|
$
|
(8,190
|
)
|
|
(275.5
|
)%
|
|
$
|
(2,009
|
)
|
|
40.3
|
%
|
Realized and unrealized gain (loss) on investments of consolidated investment products, net
|
(21,252
|
)
|
|
13,553
|
|
|
2,748
|
|
|
(34,805
|
)
|
|
(256.8
|
)%
|
|
10,805
|
|
|
(393.2
|
)%
|
|||||
Other income (expense), net
|
3,289
|
|
|
1,635
|
|
|
1,089
|
|
|
1,654
|
|
|
101.2
|
%
|
|
546
|
|
|
50.1
|
%
|
|||||
Total Other Income (Expense), net
|
$
|
(23,180
|
)
|
|
$
|
18,161
|
|
|
$
|
8,819
|
|
|
$
|
(41,341
|
)
|
|
(227.6
|
)%
|
|
$
|
9,342
|
|
|
(105.9
|
)%
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Interest Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
(19,445
|
)
|
|
$
|
(12,007
|
)
|
|
$
|
(679
|
)
|
|
$
|
(7,438
|
)
|
|
61.9
|
%
|
|
$
|
(11,328
|
)
|
|
(1,668.3
|
)%
|
Interest and dividend income
|
4,999
|
|
|
2,160
|
|
|
$
|
1,743
|
|
|
2,839
|
|
|
131.4
|
%
|
|
417
|
|
|
23.9
|
%
|
||||
Interest and dividend income of investments of consolidated investment products
|
98,356
|
|
|
49,323
|
|
|
$
|
20,402
|
|
|
49,033
|
|
|
99.4
|
%
|
|
28,921
|
|
|
141.8
|
%
|
||||
Interest expense of consolidated investment products
|
(64,788
|
)
|
|
(35,243
|
)
|
|
(11,292
|
)
|
|
(29,545
|
)
|
|
83.8
|
%
|
|
(23,951
|
)
|
|
212.1
|
%
|
|||||
Total Interest Income, net
|
$
|
19,122
|
|
|
$
|
4,233
|
|
|
$
|
10,174
|
|
|
$
|
14,889
|
|
|
351.7
|
%
|
|
$
|
(5,941
|
)
|
|
(58.4
|
)%
|
|
December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
201,705
|
|
|
$
|
132,150
|
|
|
$
|
64,588
|
|
|
$
|
69,555
|
|
|
52.6
|
%
|
|
$
|
67,562
|
|
|
104.6
|
%
|
Investments
|
79,558
|
|
|
108,492
|
|
|
89,371
|
|
|
(28,934
|
)
|
|
(26.7
|
)%
|
|
19,121
|
|
|
21.4
|
%
|
|||||
Debt
|
329,184
|
|
|
248,320
|
|
|
30,000
|
|
|
80,864
|
|
|
32.6
|
%
|
|
218,320
|
|
|
727.7
|
%
|
|||||
Redeemable noncontrolling interests
|
57,481
|
|
|
4,178
|
|
|
37,266
|
|
|
53,303
|
|
|
1,275.8
|
%
|
|
(33,088
|
)
|
|
(88.8
|
)%
|
|||||
Total equity
|
643,867
|
|
|
605,224
|
|
|
321,673
|
|
|
38,643
|
|
|
6.4
|
%
|
|
283,551
|
|
|
88.1
|
%
|
|
Years Ended December 31,
|
|
Change
|
||||||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
%
|
|
2017 vs. 2016
|
|
%
|
||||||||||||
Cash Flow Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provided by (used in)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating activities
|
$
|
(62,555
|
)
|
|
$
|
(182,859
|
)
|
|
$
|
20,918
|
|
|
$
|
120,304
|
|
|
(65.8
|
)%
|
|
$
|
(203,777
|
)
|
|
974.2
|
%
|
Investing activities
|
(121,228
|
)
|
|
(416,994
|
)
|
|
3,079
|
|
|
295,766
|
|
|
(70.9
|
)%
|
|
(420,073
|
)
|
|
13,643.2
|
%
|
|||||
Financing activities
|
204,157
|
|
|
750,464
|
|
|
(48,063
|
)
|
|
(546,307
|
)
|
|
(72.8
|
)%
|
|
798,527
|
|
|
(1,661.4
|
)%
|
|
Payments Due
|
||||||||||||||||||
($ in millions)
|
Total
|
|
Less Than
1 Year |
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years |
||||||||||
Lease obligations
|
$
|
38.0
|
|
|
$
|
6.1
|
|
|
$
|
15.5
|
|
|
$
|
6.9
|
|
|
$
|
9.5
|
|
Term Loan (1)
|
428.6
|
|
|
20.3
|
|
|
59.8
|
|
|
348.5
|
|
|
—
|
|
|||||
Credit Facility, including commitment fee (1)
|
1.7
|
|
|
0.5
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|||||
Minimum payments on service contracts (2)
|
8.4
|
|
|
7.5
|
|
|
0.8
|
|
|
0.1
|
|
|
—
|
|
|||||
Total
|
$
|
476.7
|
|
|
$
|
34.4
|
|
|
$
|
77.3
|
|
|
$
|
355.5
|
|
|
$
|
9.5
|
|
(1)
|
At
December 31, 2018
, we had
$340.6 million
outstanding under our Term Loan, which has a variable interest rate, and no amount outstanding under our Credit Facility. Payments due are estimated based on the variable interest rate and commitment fee rate in effect on
December 31, 2018
. Debt of CIP is excluded from the above table as we are not obligated for these amounts. See Item 8, Financial Statements and Supplementary Data - Note 19 "Consolidation" for additional information
|
(2)
|
Service contracts include contractual amounts that will be due to purchase goods and services to be used in our operations and may be canceled at earlier times than those indicated under certain conditions that may include termination fees.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
December 31, 2018
|
||||||
($ in thousands)
|
Fair Value
|
|
10% Change
|
||||
Investment Securities - Available for Sale
(a)
|
$
|
2,023
|
|
|
$
|
202
|
|
Investment Securities - Fair Value
(b)
|
59,271
|
|
|
5,927
|
|
||
Our net interest in Consolidated Investment Products
(c)
|
126,268
|
|
|
12,627
|
|
||
Total Investments subject to Market Risk
|
$
|
187,562
|
|
|
$
|
18,756
|
|
(a)
|
Any unrealized gains or losses arising from changes in the fair value of available-for-sale investments are recognized in accumulated other comprehensive income, net of tax, until the investment is sold or otherwise disposed of or, if the investment is determined to be other-than-temporarily impaired, at which time the cumulative gain or loss previously reported in equity is included in income. The Company evaluates the carrying value of investments for impairment on a quarterly basis. In its impairment analysis, the Company takes into consideration numerous criteria, including the duration and extent of any decline in fair value and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. If the decline in value is determined to be other-than-temporary, the carrying value of the security is generally written down to fair value through the Consolidated Statement of Operations. If such a 10% increase or decrease in fair value were to occur, it would not result in an other-than-temporary impairment charge that would be material to the Company's pre-tax earnings.
|
(b)
|
If such a 10% increase or decrease in fair values were to occur, the change of these investments would result in a corresponding increase or decrease in our pre-tax earnings.
|
(c)
|
These represent the Company's direct investments in investment products that are consolidated. Upon consolidation, these direct investments are eliminated, and the assets and liabilities of consolidated investment products are consolidated in the Consolidated Balance Sheet, together with a non-controlling interest balance representing the portion of the consolidated investment products owned by third parties. If a 10% increase or decrease in the fair values of the Company's direct investments in consolidated investment products were to occur, it would result in a corresponding increase or decrease in the Company's pre-tax earnings.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Plan Category
|
Number of
securities to be issued upon exercise of outstanding options, warrants and rights |
|
Weighted-average
exercise price of outstanding options, warrants and rights (1) |
|
Number of
securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
||||
Equity compensation plans approved by security holders
(2)
|
628,989
|
|
|
$
|
12.86
|
|
|
297,407
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
628,989
|
|
|
$
|
12.86
|
|
|
297,407
|
|
(1)
|
The weighted-average exercise price set forth in this column is calculated excluding outstanding restricted stock unit awards ("RSUs") since recipients of such awards are not required to pay an exercise price to receive the shares subject to these awards.
|
(2)
|
Represents
76,751
shares of common stock issuable upon the exercise of stock options and
552,238
shares of our common stock issuable upon the vesting of RSUs outstanding under the Company’s Omnibus Incentive and Equity Plan (the "Omnibus Plan"). Of the 2,400,000 maximum number of shares of our common stock authorized for issuance under the Omnibus Plan, 100,841 shares of common stock have been issued on a cumulative basis in the form of direct grants to directors.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
(a)(1)
|
Financial Statements:
The following Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements of Virtus are included in this Annual Report:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
(a)(2)
|
Financial Statement Schedules:
|
|
(a)(3)
|
Exhibits:
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
(2)
|
|
Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
|
*2.1
|
|
|
*2.2
|
|
|
2.3
|
|
|
(3)
|
|
Articles of Incorporation and Bylaws
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
(4)
|
|
Instruments Defining the Rights of Security Holders including Indentures
|
4.1
|
|
|
(10)
|
|
Material Contracts
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
**10.5
|
|
|
**10.6
|
|
|
**10.7
|
|
|
**10.8
|
|
|
**10.9
|
|
|
**10.10
|
|
|
**10.11
|
|
|
**10.12
|
|
|
**10.13
|
|
|
**10.14
|
|
|
**10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
**10.20
|
|
(21)
|
|
Subsidiaries of the Registrant
|
21.1
|
|
(23)
|
|
Consents of Experts and Counsel
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
Certifications of Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certifications of Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certifications of 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) Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017, (ii) Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016, (v) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2018, 2017 and 2016 and (iv) Notes to Consolidated Financial Statements.
|
*
|
Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. The descriptions of the omitted schedules and exhibits are contained within the relevant agreement. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request.
|
**
|
Management contract, compensatory plan or arrangement.
|
Item 16.
|
Form 10-K Summary.
|
|
|
|
Virtus Investment Partners, Inc.
|
||
|
|
|
By:
|
|
/S/ MICHAEL A. ANGERTHAL
|
|
|
Michael A. Angerthal
|
|
|
Executive Vice President
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
/S/ MARK C. TREANOR
|
|
/S/ GEORGE R. AYLWARD
|
Mark C. Treanor
Director and Non-Executive Chairman
|
|
George R. Aylward
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
/S/ JAMES R. BAIO
|
|
/S/ SUSAN S. FLEMING
|
James R. Baio
Director
|
|
Susan S. Fleming
Director |
|
|
|
/S/ TIMOTHY A. HOLT
|
|
/S/ SHEILA HOODA
|
Timothy A. Holt
Director
|
|
Sheila Hooda
Director
|
|
|
|
/S/ MELODY L. JONES
|
|
/S/ STEPHEN T. ZARRILLI
|
Melody L. Jones
Director
|
|
Stephen T. Zarrilli
Director |
|
|
|
/S/ MICHAEL A. ANGERTHAL
|
|
|
Michael A. Angerthal
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
Report of Independent Registered Public Accounting Firms
|
|
|
|
|
|
Audited Consolidated Financial Statements
|
|
|
|
||
|
||
|
||
|
||
|
||
|
($ in thousands, except per share data)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
201,705
|
|
|
$
|
132,150
|
|
Investments
|
|
79,558
|
|
|
108,492
|
|
||
Accounts receivable, net
|
|
70,047
|
|
|
65,648
|
|
||
Assets of consolidated investment products ("CIP")
|
|
|
|
|
||||
Cash and cash equivalents of CIP
|
|
52,015
|
|
|
101,315
|
|
||
Cash pledged or on deposit of CIP
|
|
936
|
|
|
817
|
|
||
Investments of CIP
|
|
1,749,568
|
|
|
1,597,752
|
|
||
Other assets of CIP
|
|
31,057
|
|
|
33,486
|
|
||
Furniture, equipment, and leasehold improvements, net
|
|
20,154
|
|
|
10,833
|
|
||
Intangible assets, net
|
|
338,812
|
|
|
301,954
|
|
||
Goodwill
|
|
290,366
|
|
|
170,153
|
|
||
Deferred taxes, net
|
|
22,116
|
|
|
32,428
|
|
||
Other assets
|
|
14,201
|
|
|
35,771
|
|
||
Total assets
|
|
$
|
2,870,535
|
|
|
$
|
2,590,799
|
|
Liabilities and Equity
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Accrued compensation and benefits
|
|
$
|
93,339
|
|
|
$
|
86,658
|
|
Accounts payable and accrued liabilities
|
|
27,926
|
|
|
29,607
|
|
||
Dividends payable
|
|
7,762
|
|
|
6,528
|
|
||
Debt
|
|
329,184
|
|
|
248,320
|
|
||
Other liabilities
|
|
20,010
|
|
|
39,895
|
|
||
Liabilities of CIP
|
|
|
|
|
||||
Notes payable of CIP
|
|
1,620,260
|
|
|
1,457,435
|
|
||
Securities purchased payable and other liabilities of CIP
|
|
70,706
|
|
|
112,954
|
|
||
Total liabilities
|
|
2,169,187
|
|
|
1,981,397
|
|
||
Commitments and Contingencies (Note 11)
|
|
|
|
|
||||
Redeemable noncontrolling interests
|
|
57,481
|
|
|
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 December 31, 2018 and December 31, 2017
|
|
110,843
|
|
|
110,843
|
|
||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 10,552,624 shares issued and 6,997,382 shares outstanding at December 31, 2018 and 10,455,934 shares issued and 7,159,645 shares outstanding at December 31, 2017
|
|
106
|
|
|
105
|
|
||
Additional paid-in capital
|
|
1,209,805
|
|
|
1,216,173
|
|
||
Retained earnings (accumulated deficit)
|
|
(310,865
|
)
|
|
(386,216
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(731
|
)
|
|
(600
|
)
|
||
Treasury stock, at cost, 3,555,242 and 3,296,289 shares at December 31, 2018 and December 31, 2017, respectively
|
|
(379,249
|
)
|
|
(351,748
|
)
|
||
Total equity attributable to stockholders
|
|
629,909
|
|
|
588,557
|
|
||
Noncontrolling interests
|
|
13,958
|
|
|
16,667
|
|
||
Total equity
|
|
643,867
|
|
|
605,224
|
|
||
Total liabilities and equity
|
|
$
|
2,870,535
|
|
|
$
|
2,590,799
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
|
|
|
|
||||||
Investment management fees
|
$
|
437,021
|
|
|
$
|
331,075
|
|
|
$
|
235,230
|
|
Distribution and service fees
|
50,715
|
|
|
44,322
|
|
|
48,250
|
|
|||
Administration and shareholder service fees
|
63,614
|
|
|
48,996
|
|
|
38,261
|
|
|||
Other income and fees
|
885
|
|
|
1,214
|
|
|
813
|
|
|||
Total revenues
|
552,235
|
|
|
425,607
|
|
|
322,554
|
|
|||
Operating Expenses
|
|
|
|
|
|
||||||
Employment expenses
|
238,501
|
|
|
191,394
|
|
|
135,641
|
|
|||
Distribution and other asset-based expenses
|
92,441
|
|
|
71,987
|
|
|
69,049
|
|
|||
Other operating expenses
|
74,853
|
|
|
69,410
|
|
|
50,274
|
|
|||
Other operating expenses of consolidated investment products
|
3,515
|
|
|
8,531
|
|
|
6,953
|
|
|||
Restructuring and severance
|
87
|
|
|
10,580
|
|
|
4,270
|
|
|||
Depreciation and other amortization
|
4,597
|
|
|
3,497
|
|
|
3,092
|
|
|||
Amortization expense
|
25,142
|
|
|
12,173
|
|
|
2,461
|
|
|||
Total operating expenses
|
439,136
|
|
|
367,572
|
|
|
271,740
|
|
|||
Operating Income (Loss)
|
113,099
|
|
|
58,035
|
|
|
50,814
|
|
|||
Other Income (Expense)
|
|
|
|
|
|
||||||
Realized and unrealized gain (loss) on investments, net
|
(5,217
|
)
|
|
2,973
|
|
|
4,982
|
|
|||
Realized and unrealized gain (loss) of consolidated investment products, net
|
(21,252
|
)
|
|
13,553
|
|
|
2,748
|
|
|||
Other income (expense), net
|
3,289
|
|
|
1,635
|
|
|
1,089
|
|
|||
Total other income (expense), net
|
(23,180
|
)
|
|
18,161
|
|
|
8,819
|
|
|||
Interest Income (Expense)
|
|
|
|
|
|
||||||
Interest expense
|
(19,445
|
)
|
|
(12,007
|
)
|
|
(679
|
)
|
|||
Interest and dividend income
|
4,999
|
|
|
2,160
|
|
|
1,743
|
|
|||
Interest and dividend income of investments of consolidated investment products
|
98,356
|
|
|
49,323
|
|
|
20,402
|
|
|||
Interest expense of consolidated investment products
|
(64,788
|
)
|
|
(35,243
|
)
|
|
(11,292
|
)
|
|||
Total interest income (expense), net
|
19,122
|
|
|
4,233
|
|
|
10,174
|
|
|||
Income (Loss) Before Income Taxes
|
109,041
|
|
|
80,429
|
|
|
69,807
|
|
|||
Income tax expense (benefit)
|
32,961
|
|
|
40,490
|
|
|
21,044
|
|
|||
Net Income (Loss)
|
76,080
|
|
|
39,939
|
|
|
48,763
|
|
|||
Noncontrolling interests
|
(551
|
)
|
|
(2,927
|
)
|
|
(261
|
)
|
|||
Net Income (Loss) Attributable to Stockholders
|
$
|
75,529
|
|
|
$
|
37,012
|
|
|
$
|
48,502
|
|
Preferred stockholder dividends
|
(8,337
|
)
|
|
$
|
(8,336
|
)
|
|
$
|
—
|
|
|
Net Income (Loss) Attributable to Common Stockholders
|
$
|
67,192
|
|
|
$
|
28,676
|
|
|
$
|
48,502
|
|
Earnings (Loss) per Share-Basic
|
$
|
9.37
|
|
|
$
|
4.09
|
|
|
$
|
6.34
|
|
Earnings (Loss) per Share-Diluted
|
$
|
8.86
|
|
|
$
|
3.96
|
|
|
$
|
6.20
|
|
Cash Dividends Declared per Preferred Share
|
$
|
7.25
|
|
|
$
|
7.25
|
|
|
$
|
—
|
|
Cash Dividends Declared per Common Share
|
$
|
2.00
|
|
|
$
|
1.80
|
|
|
$
|
1.80
|
|
Weighted Average Shares Outstanding-Basic (in thousands)
|
7,174
|
|
|
7,013
|
|
|
7,648
|
|
|||
Weighted Average Shares Outstanding-Diluted (in thousands)
|
8,527
|
|
|
7,247
|
|
|
7,822
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income (Loss)
|
$
|
76,080
|
|
|
$
|
39,939
|
|
|
$
|
48,763
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment, net of tax of $6, ($4) and ($348) for the years ended December 31, 2018, 2017 and 2016
|
(17
|
)
|
|
12
|
|
|
569
|
|
|||
Unrealized gain (loss) on available-for-sale securities, net of tax of $111, $100, and ($32) for the years ended December 31, 2018, 2017 and 2016, respectively
|
(292
|
)
|
|
(388
|
)
|
|
241
|
|
|||
Other comprehensive income (loss)
|
(309
|
)
|
|
(376
|
)
|
|
810
|
|
|||
Comprehensive income (loss)
|
75,771
|
|
|
39,563
|
|
|
49,573
|
|
|||
Comprehensive (income) loss attributable to noncontrolling interests
|
(551
|
)
|
|
(2,927
|
)
|
|
(261
|
)
|
|||
Comprehensive income (loss) attributable to stockholders
|
$
|
75,220
|
|
|
$
|
36,636
|
|
|
$
|
49,312
|
|
|
Permanent Equity
|
|
Temporary Equity
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Preferred Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated
Deficit) |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Treasury Stock
|
|
Total
Attributed To Shareholders |
|
Non-
controlling Interest |
|
Total
Equity |
|
Redeemable
Non- controlling Interest |
|||||||||||||||||||||||||||||
($ in thousands)
|
Shares
|
|
Par Value
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||||
Balances at December 31, 2015
|
8,398,944
|
|
|
$
|
96
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,140,875
|
|
|
$
|
(472,614
|
)
|
|
$
|
(1,034
|
)
|
|
1,214,144
|
|
|
$
|
(157,699
|
)
|
|
$
|
509,624
|
|
|
$
|
(167
|
)
|
|
$
|
509,457
|
|
|
$
|
73,864
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,502
|
|
|
—
|
|
|
48,502
|
|
|
261
|
|
||||||||||
Net unrealized gain (loss) on securities available-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
241
|
|
|
—
|
|
|
—
|
|
|
241
|
|
|
—
|
|
|
241
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
569
|
|
|
—
|
|
||||||||||
Net subscriptions (redemptions) and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
167
|
|
|
—
|
|
|
(36,859
|
)
|
||||||||||
Cash dividends declared ($1.80 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,015
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,015
|
)
|
|
—
|
|
|
(13,015
|
)
|
|
—
|
|
||||||||||
Repurchase of common shares
|
(2,572,417
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(47,204
|
)
|
|
—
|
|
|
—
|
|
|
2,015,901
|
|
|
(186,547
|
)
|
|
(233,757
|
)
|
|
—
|
|
|
(233,757
|
)
|
|
—
|
|
||||||||||
Issuance of common shares related to employee stock transactions
|
62,486
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,054
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,055
|
|
|
—
|
|
|
1,055
|
|
|
—
|
|
||||||||||
Taxes paid on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,530
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,530
|
)
|
|
—
|
|
|
(1,530
|
)
|
|
—
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,449
|
|
|
—
|
|
|
11,449
|
|
|
—
|
|
||||||||||
Tax deficiencies from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,298
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,298
|
)
|
|
—
|
|
|
(1,298
|
)
|
|
—
|
|
||||||||||
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
|
|
||||||||||
Cumulative effect adjustment for adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,051
|
|
|
—
|
|
|
1,051
|
|
|
—
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,012
|
|
|
1,507
|
|
|
38,519
|
|
|
1,420
|
|
||||||||||
Net unrealized gain (loss) on securities available-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(388
|
)
|
|
—
|
|
|
—
|
|
|
(388
|
)
|
|
—
|
|
|
(388
|
)
|
|
|
|||||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||||||||
Net subscriptions (redemptions) and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,160
|
|
|
15,160
|
|
|
(34,508
|
)
|
||||||||||
Issuance of mandatory convertible preferred stock, net of offering costs
|
—
|
|
|
—
|
|
|
1,150,000
|
|
|
110,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,843
|
|
|
—
|
|
|
110,843
|
|
|
—
|
|
||||||||||
Cash dividends declared ($7.25 per preferred share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
||||||||||
Issuance of common stock for acquisition of business
|
213,669
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
21,738
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,740
|
|
|
—
|
|
|
21,740
|
|
|
—
|
|
||||||||||
Issuance of common stock, net of offering costs
|
1,046,500
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
109,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,327
|
|
|
—
|
|
|
109,327
|
|
|
—
|
|
||||||||||
Cash dividends declared ($1.80 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,545
|
)
|
|
—
|
|
|
(13,545
|
)
|
|
—
|
|
||||||||||
Repurchase of common shares
|
(66,244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,244
|
|
|
(7,502
|
)
|
|
(7,502
|
)
|
|
—
|
|
|
(7,502
|
)
|
|
—
|
|
||||||||||
Issuance of common shares related to employee stock transactions
|
76,707
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
—
|
|
|
841
|
|
|
—
|
|
||||||||||
Taxes paid on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,499
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,499
|
)
|
|
—
|
|
|
(3,499
|
)
|
|
—
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,329
|
|
|
—
|
|
|
19,329
|
|
|
—
|
|
||||||||||
Balances at December 31, 2017
|
7,159,645
|
|
|
105
|
|
|
1,150,000
|
|
|
110,843
|
|
|
1,216,173
|
|
|
(386,216
|
)
|
|
(600
|
)
|
|
3,296,289
|
|
|
(351,748
|
)
|
|
588,557
|
|
|
16,667
|
|
|
605,224
|
|
|
4,178
|
|
|
Permanent Equity
|
|
Temporary Equity
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Preferred Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated
Deficit) |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Treasury Stock
|
|
Total
Attributed To Shareholders |
|
Non-
controlling Interest |
|
Total
Equity |
|
Redeemable
Non- controlling Interest |
|||||||||||||||||||||||||||||
($ in thousands)
|
Shares
|
|
Par Value
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||||||||
Adjustment for adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
178
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Acquisition of business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,500
|
|
||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,529
|
|
|
36
|
|
|
75,565
|
|
|
515
|
|
||||||||||
Net unrealized gain (loss) on securities available-for-sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
||||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
||||||||||
Net subscriptions (redemptions) (distributions) and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,745
|
)
|
|
(2,745
|
)
|
|
(2,712
|
)
|
||||||||||
Cash dividends declared ($7.25 per preferred share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
|
(8,337
|
)
|
|
—
|
|
||||||||||
Cash dividends declared ($2.00 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,267
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,267
|
)
|
|
—
|
|
|
(15,267
|
)
|
|
—
|
|
||||||||||
Repurchase of common shares
|
(258,953
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258,953
|
|
|
(27,501
|
)
|
|
(27,501
|
)
|
|
—
|
|
|
(27,501
|
)
|
|
—
|
|
||||||||||
Issuance of common shares related to employee stock transactions
|
96,690
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,544
|
|
|
—
|
|
|
1,544
|
|
|
—
|
|
||||||||||
Taxes paid on stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,591
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,591
|
)
|
|
—
|
|
|
(6,591
|
)
|
|
—
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,284
|
|
|
—
|
|
|
22,284
|
|
|
—
|
|
||||||||||
Balances at December 31, 2018
|
6,997,382
|
|
|
$
|
106
|
|
|
1,150,000
|
|
|
$
|
110,843
|
|
|
$
|
1,209,805
|
|
|
$
|
(310,865
|
)
|
|
$
|
(731
|
)
|
|
3,555,242
|
|
|
$
|
(379,249
|
)
|
|
$
|
629,909
|
|
|
$
|
13,958
|
|
|
$
|
643,867
|
|
|
$
|
57,481
|
|
|
Years Ended December 31,
|
||||||||||
$ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
76,080
|
|
|
$
|
39,939
|
|
|
$
|
48,763
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation expense, intangible asset and other amortization
|
33,426
|
|
|
18,329
|
|
|
5,796
|
|
|||
Stock-based compensation
|
23,100
|
|
|
20,327
|
|
|
11,948
|
|
|||
Amortization of deferred commissions
|
3,847
|
|
|
2,308
|
|
|
2,413
|
|
|||
Payments of deferred commissions
|
(4,218
|
)
|
|
(2,871
|
)
|
|
(1,887
|
)
|
|||
Equity in earnings of equity method investments
|
(3,703
|
)
|
|
(1,678
|
)
|
|
(1,075
|
)
|
|||
Realized and unrealized (gains) losses on investments, net
|
5,736
|
|
|
(3,237
|
)
|
|
(2,099
|
)
|
|||
Distributions from equity method investments
|
4,178
|
|
|
911
|
|
|
—
|
|
|||
Sales (purchases) of investments, net
|
4,995
|
|
|
20,444
|
|
|
16,828
|
|
|||
Other non-cash items, net
|
39
|
|
|
345
|
|
|
(3,099
|
)
|
|||
Deferred taxes, net
|
10,429
|
|
|
22,835
|
|
|
6,399
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net and other assets
|
24,794
|
|
|
(961
|
)
|
|
(1,695
|
)
|
|||
Accrued compensation and benefits, accounts payable, accrued liabilities and other liabilities
|
(24,714
|
)
|
|
11,468
|
|
|
50
|
|
|||
Operating activities of consolidated investment products ("CIP"):
|
|
|
|
|
|
||||||
Realized and unrealized (gains) losses on investments of CIP, net
|
18,706
|
|
|
(14,051
|
)
|
|
(3,648
|
)
|
|||
Purchases of investments by CIP
|
(1,106,991
|
)
|
|
(923,519
|
)
|
|
(464,216
|
)
|
|||
Sales of investments by CIP
|
874,279
|
|
|
615,565
|
|
|
400,493
|
|
|||
Net proceeds (purchases) of short term investments by CIP
|
(552
|
)
|
|
595
|
|
|
6,139
|
|
|||
(Purchases) sales of securities sold short by CIP, net
|
209
|
|
|
256
|
|
|
(4,520
|
)
|
|||
Change in other assets of CIP
|
(628
|
)
|
|
(255
|
)
|
|
(1,491
|
)
|
|||
Change in liabilities of CIP
|
(1,567
|
)
|
|
5,284
|
|
|
2,100
|
|
|||
Amortization of discount on notes payable of CIP
|
—
|
|
|
5,107
|
|
|
3,719
|
|
|||
Net cash provided by (used in) operating activities
|
(62,555
|
)
|
|
(182,859
|
)
|
|
20,918
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(11,717
|
)
|
|
(1,511
|
)
|
|
(2,023
|
)
|
|||
Proceeds from sale of equity method investment
|
—
|
|
|
—
|
|
|
8,621
|
|
|||
Change in cash and cash equivalents of CIP due to deconsolidation, net
|
(113
|
)
|
|
(604
|
)
|
|
(903
|
)
|
|||
Equity method investment contributions
|
—
|
|
|
—
|
|
|
(2,471
|
)
|
|||
Acquisition of business, net of cash acquired
|
(126,995
|
)
|
|
(393,446
|
)
|
|
—
|
|
|||
Sale of available-for-sale securities
|
37,785
|
|
|
—
|
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
(20,188
|
)
|
|
(21,433
|
)
|
|
(145
|
)
|
|||
Net cash provided by (used in) investing activities
|
(121,228
|
)
|
|
(416,994
|
)
|
|
3,079
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Issuance of debt
|
105,000
|
|
|
260,000
|
|
|
—
|
|
|||
Payment of long term debt
|
(23,776
|
)
|
|
(650
|
)
|
|
—
|
|
|||
Payment of contingent consideration
|
—
|
|
|
(51,690
|
)
|
|
—
|
|
|||
Payment of deferred financing costs
|
(3,810
|
)
|
|
(15,549
|
)
|
|
(1,159
|
)
|
|||
Borrowings (Repayments) on credit facility and other debt
|
—
|
|
|
(30,970
|
)
|
|
30,000
|
|
|||
Repurchase of common shares
|
(27,501
|
)
|
|
(7,502
|
)
|
|
(233,757
|
)
|
|||
Preferred stock dividends paid
|
(8,338
|
)
|
|
(6,253
|
)
|
|
—
|
|
|||
Common stock dividends paid
|
(14,038
|
)
|
|
(12,581
|
)
|
|
(13,774
|
)
|
|||
Proceeds from exercise of stock options
|
819
|
|
|
111
|
|
|
491
|
|
|||
Taxes paid related to net share settlement of restricted stock units
|
(6,591
|
)
|
|
(3,499
|
)
|
|
(1,530
|
)
|
|||
Proceeds from issuance of mandatory convertible preferred stock, net of issuance costs
|
—
|
|
|
111,004
|
|
|
—
|
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
109,487
|
|
|
—
|
|
Excess tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
401
|
|
|||
Net subscriptions received from (redemptions/distributions paid to) noncontrolling interests
|
(5,512
|
)
|
|
30,047
|
|
|
10,904
|
|
|||
Financing activities of CIP
|
|
|
|
|
|
||||||
Borrowings of debt of CIP
|
857,404
|
|
|
—
|
|
|
—
|
|
|||
(Repayment) on borrowings by CIP
|
(669,500
|
)
|
|
(105,000
|
)
|
|
(155,919
|
)
|
|||
Proceeds from issuance of notes payable by CIP
|
—
|
|
|
474,009
|
|
|
316,280
|
|
|||
Repayment of notes payable by CIP
|
—
|
|
|
(500
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
204,157
|
|
|
750,464
|
|
|
(48,063
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
20,374
|
|
|
150,611
|
|
|
(24,066
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
234,282
|
|
|
83,671
|
|
|
107,737
|
|
|||
Cash, cash equivalents and restricted cash, end of year
|
$
|
254,656
|
|
|
$
|
234,282
|
|
|
$
|
83,671
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Interest paid
|
$
|
11,846
|
|
|
$
|
8,147
|
|
|
$
|
420
|
|
Income taxes paid, net
|
23,800
|
|
|
12,149
|
|
|
16,715
|
|
|||
Supplemental Disclosure of Non-Cash Investing and Financing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
$
|
2,165
|
|
|
$
|
70
|
|
|
$
|
134
|
|
Preferred stock dividends payable
|
2,084
|
|
|
2,084
|
|
|
—
|
|
|||
Common stock dividends payable
|
3,849
|
|
|
965
|
|
|
2,650
|
|
|||
Increase (Decrease) to noncontrolling interest due to consolidation (deconsolidation) of CIP, net
|
56
|
|
|
(65,576
|
)
|
|
(47,763
|
)
|
|||
Stock issued for acquisition of business
|
—
|
|
|
21,738
|
|
|
—
|
|
|||
Accrued stock issuance costs
|
—
|
|
|
332
|
|
|
—
|
|
|
December 31,
|
|
|
||||||
($ in thousands)
|
2018
|
|
2017
|
|
|
||||
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
201,705
|
|
|
$
|
132,150
|
|
|
|
Cash of consolidated investment products
|
52,015
|
|
|
101,315
|
|
|
|
||
Cash pledged or on deposit of consolidated investment products
|
936
|
|
|
817
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
254,656
|
|
|
$
|
234,282
|
|
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017 (1)
|
|
2016 (1)
|
||||||
Investment management fees
|
|
|
|
|
|
||||||
Open-end funds
|
$
|
231,175
|
|
|
$
|
175,260
|
|
|
$
|
129,542
|
|
Closed-end funds
|
41,455
|
|
|
44,687
|
|
|
43,342
|
|
|||
Retail separate accounts
|
73,532
|
|
|
54,252
|
|
|
40,155
|
|
|||
Institutional accounts
|
77,711
|
|
|
46,600
|
|
|
18,707
|
|
|||
Structured products
|
9,622
|
|
|
6,302
|
|
|
2,211
|
|
|||
Other products
|
3,526
|
|
|
3,974
|
|
|
1,273
|
|
|||
Total investment management fees
|
437,021
|
|
|
331,075
|
|
|
235,230
|
|
|||
Distribution and service fees
|
50,715
|
|
|
44,322
|
|
|
48,250
|
|
|||
Administration and shareholder service fees
|
63,614
|
|
|
48,996
|
|
|
38,261
|
|
|||
Other income and fees
|
885
|
|
|
1,214
|
|
|
813
|
|
|||
Total revenues
|
$
|
552,235
|
|
|
$
|
425,607
|
|
|
$
|
322,554
|
|
|
Year Ended December 31, 2018
|
||||||||||
($ in thousands)
|
As Reported
|
|
Balance Under Prior ASC 605
|
|
Effect of Change
Higher/(Lower) |
||||||
Revenues
|
|
|
|
|
|
||||||
Distribution and service fees
|
$
|
50,715
|
|
|
$
|
44,739
|
|
|
$
|
5,976
|
|
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Distribution and other asset-based expenses
|
$
|
92,441
|
|
|
$
|
86,465
|
|
|
$
|
5,976
|
|
($ in thousands)
|
July 1, 2018
|
||
Assets:
|
|
||
Cash and cash equivalents
|
$
|
2,505
|
|
Investments
|
262
|
|
|
Accounts receivable
|
6,649
|
|
|
Furniture, equipment and leasehold improvements
|
70
|
|
|
Intangible assets
|
62,000
|
|
|
Goodwill
|
120,213
|
|
|
Other assets
|
659
|
|
|
Total Assets
|
192,358
|
|
|
Liabilities
|
|
||
Accrued compensation and benefits
|
824
|
|
|
Accounts payable and accrued liabilities
|
6,534
|
|
|
Total liabilities
|
7,358
|
|
|
Redeemable noncontrolling interests
|
55,500
|
|
|
Total Net Assets Acquired
|
$
|
129,500
|
|
|
July 1, 2018
|
||||
($ in thousands)
|
Approximate Fair Value
|
|
Weighted Average of Useful Life
|
||
Definite-lived intangible assets:
|
|
|
|
||
Institutional and retail separate account investment contracts
|
$
|
49,000
|
|
|
6 years
|
Trade name
|
7,000
|
|
|
10 years
|
|
Non-competition agreements
|
6,000
|
|
|
5 years
|
|
Total definite-lived intangible assets
|
$
|
62,000
|
|
|
|
|
December 31,
|
||||||
($ in thousands, except per share amounts)
|
2018
|
|
2017
|
||||
Total Revenues
|
$
|
569,465
|
|
|
$
|
454,156
|
|
Net Income (Loss) Attributable to Common Stockholders
|
$
|
69,341
|
|
|
$
|
26,175
|
|
($ in thousands)
|
June 1, 2017
|
||
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 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
|
||||
($ in thousands)
|
Approximate Fair Value
|
|
Weighted Average of Useful Life
|
||
Definite-lived intangible assets:
|
|
|
|
||
Mutual fund investment contracts
|
$
|
189,200
|
|
|
16 years
|
Institutional and retail separate account investment contracts
|
77,000
|
|
|
10 years
|
|
Trademarks/Trade names
|
800
|
|
|
10 years
|
|
Total finite-lived intangible assets
|
267,000
|
|
|
|
|
Indefinite-lived intangible assets:
|
|
|
|
||
Trade names
|
8,700
|
|
|
N/A
|
|
Total identifiable intangible assets
|
$
|
275,700
|
|
|
|
|
Years Ended December 31,
|
||||||
($ in thousands, except per share amounts)
|
2017
|
|
2016
|
||||
Total Revenues
|
$
|
489,094
|
|
|
$
|
466,429
|
|
Net Income (Loss) Attributable to Common Stockholders
|
$
|
27,523
|
|
|
$
|
23,511
|
|
|
December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Definite-lived intangible assets, net:
|
|
|
|
||||
Investment contracts and other
|
$
|
487,747
|
|
|
$
|
425,747
|
|
Accumulated amortization
|
(192,451
|
)
|
|
(167,309
|
)
|
||
Definite-lived intangible assets, net
|
295,296
|
|
|
258,438
|
|
||
Indefinite-lived intangible assets
|
43,516
|
|
|
43,516
|
|
||
Total intangible assets, net
|
$
|
338,812
|
|
|
$
|
301,954
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Intangible assets, net
|
|
|
|
|
|
||||||
Balance, beginning of period
|
$
|
301,954
|
|
|
$
|
38,427
|
|
|
$
|
40,887
|
|
Acquisitions (1)
|
62,000
|
|
|
275,700
|
|
|
—
|
|
|||
Amortization expense
|
(25,142
|
)
|
|
(12,173
|
)
|
|
(2,460
|
)
|
|||
Balance, end of period
|
$
|
338,812
|
|
|
$
|
301,954
|
|
|
$
|
38,427
|
|
Goodwill
|
|
|
|
|
|
||||||
Balance, beginning of period
|
$
|
170,153
|
|
|
$
|
6,788
|
|
|
$
|
6,701
|
|
Acquisitions (1)
|
120,213
|
|
|
163,365
|
|
|
—
|
|
|||
Acquisition related adjustments
|
—
|
|
|
—
|
|
|
87
|
|
|||
Balance, end of period
|
$
|
290,366
|
|
|
$
|
170,153
|
|
|
$
|
6,788
|
|
Fiscal Year
|
|
Amount
|
|||
2019
|
|
|
$
|
30,110
|
|
2020
|
|
|
29,945
|
|
|
2021
|
|
|
29,933
|
|
|
2022
|
|
|
29,809
|
|
|
2023
|
|
|
29,148
|
|
|
2024 and Thereafter
|
|
|
146,351
|
|
|
|
|
$
|
295,296
|
|
|
December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Investment securities - fair value
|
$
|
59,271
|
|
|
$
|
69,101
|
|
Investment securities - available for sale
|
2,023
|
|
|
20,662
|
|
||
Equity method investments
|
10,573
|
|
|
11,098
|
|
||
Nonqualified retirement plan assets
|
6,716
|
|
|
6,706
|
|
||
Other investments
|
975
|
|
|
925
|
|
||
Total investments
|
$
|
79,558
|
|
|
$
|
108,492
|
|
December 31, 2018
|
|
|
|
||||
($ in thousands)
|
Cost
|
|
Fair
Value
|
||||
Investment Securities - Equity:
|
|
|
|
||||
Sponsored funds
|
$
|
43,507
|
|
|
$
|
40,191
|
|
Equity securities
|
16,380
|
|
|
16,981
|
|
||
Trading debt securities
|
3,816
|
|
|
2,099
|
|
||
Total investment securities - equity
|
$
|
63,703
|
|
|
$
|
59,271
|
|
December 31, 2017
|
|
||||||
($ in thousands)
|
Cost
|
|
Fair
Value
|
||||
Investment Securities - Equity:
|
|
|
|
||||
Sponsored funds
|
$
|
50,845
|
|
|
$
|
50,614
|
|
Equity securities
|
13,141
|
|
|
15,810
|
|
||
Trading debt securities
|
3,816
|
|
|
2,677
|
|
||
Total investment securities - equity
|
$
|
67,802
|
|
|
$
|
69,101
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
($ in thousands)
|
Cost
|
|
Unrealized
Loss
|
|
Unrealized
Gain
|
|
Fair
Value
|
||||||||
Investments in CLOs
|
$
|
3,696
|
|
|
$
|
(1,673
|
)
|
|
$
|
—
|
|
|
$
|
2,023
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
($ in thousands)
|
Cost
|
|
Unrealized
Loss
|
|
Unrealized
Gain
|
|
Fair
Value
|
||||||||
Investments in CLOs
|
$
|
21,240
|
|
|
$
|
(630
|
)
|
|
$
|
52
|
|
|
$
|
20,662
|
|
December 31, 2018
|
|
||||||||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
158,596
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,596
|
|
Investment securities - fair value
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
40,191
|
|
|
—
|
|
|
—
|
|
|
40,191
|
|
||||
Equity securities
|
16,981
|
|
|
—
|
|
|
—
|
|
|
16,981
|
|
||||
Trading debt securities
|
—
|
|
|
—
|
|
|
2,099
|
|
|
2,099
|
|
||||
Investment securities - available for sale
|
—
|
|
|
—
|
|
|
2,023
|
|
|
2,023
|
|
||||
Nonqualified retirement plan assets
|
6,716
|
|
|
—
|
|
|
—
|
|
|
6,716
|
|
||||
Total assets measured at fair value
|
$
|
222,484
|
|
|
$
|
—
|
|
|
$
|
4,122
|
|
|
$
|
226,606
|
|
December 31, 2017
|
|
||||||||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
72,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72,993
|
|
Investment securities - equity
|
|
|
|
|
|
|
|
||||||||
Sponsored funds
|
50,614
|
|
|
—
|
|
|
—
|
|
|
50,614
|
|
||||
Equity securities
|
15,810
|
|
|
—
|
|
|
—
|
|
|
15,810
|
|
||||
Trading debt securities
|
—
|
|
|
—
|
|
|
2,677
|
|
|
2,677
|
|
||||
Investment securities - available for sale
|
—
|
|
|
18,900
|
|
|
1,762
|
|
|
20,662
|
|
||||
Nonqualified retirement plan assets
|
6,706
|
|
|
—
|
|
|
—
|
|
|
6,706
|
|
||||
Total assets measured at fair value
|
$
|
146,123
|
|
|
$
|
18,900
|
|
|
$
|
4,439
|
|
|
$
|
169,462
|
|
|
Twelve Months Ended December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Level 3 Investments (a)
|
|
|
|
||||
Balance at beginning of period
|
$
|
4,439
|
|
|
$
|
—
|
|
Acquired in business combination
|
—
|
|
|
2,916
|
|
||
Purchases
|
1,326
|
|
|
2,370
|
|
||
Change in unrealized gain (loss), net
|
(1,643
|
)
|
|
(847
|
)
|
||
Balance at end of period
|
$
|
4,122
|
|
|
$
|
4,439
|
|
(a)
|
The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment.
|
|
December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Furniture and office equipment
|
$
|
12,543
|
|
|
$
|
7,564
|
|
Computer equipment and software
|
6,811
|
|
|
9,274
|
|
||
Leasehold improvements
|
24,880
|
|
|
14,132
|
|
||
|
44,234
|
|
|
30,970
|
|
||
Accumulated depreciation and amortization
|
(24,080
|
)
|
|
(20,137
|
)
|
||
Furniture, equipment and leasehold improvements, net
|
$
|
20,154
|
|
|
$
|
10,833
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
18,864
|
|
|
$
|
15,670
|
|
|
$
|
12,790
|
|
State
|
3,668
|
|
|
1,985
|
|
|
1,855
|
|
|||
Total current tax expense (benefit)
|
22,532
|
|
|
17,655
|
|
|
14,645
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
5,901
|
|
|
20,895
|
|
|
5,489
|
|
|||
State
|
4,528
|
|
|
1,940
|
|
|
910
|
|
|||
Total deferred tax expense (benefit)
|
10,429
|
|
|
22,835
|
|
|
6,399
|
|
|||
Total expense (benefit) for income taxes
|
$
|
32,961
|
|
|
$
|
40,490
|
|
|
$
|
21,044
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Tax at statutory rate
|
$
|
22,899
|
|
|
21
|
%
|
|
$
|
28,150
|
|
|
35
|
%
|
|
$
|
24,432
|
|
|
35
|
%
|
State taxes, net of federal benefit
|
6,450
|
|
|
6
|
|
|
3,548
|
|
|
4
|
|
|
2,010
|
|
|
3
|
|
|||
Effect of U.S. tax reform (the Tax Act)
|
—
|
|
|
—
|
|
|
13,074
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|||
Effect of net income (loss) attributable to noncontrolling interests
|
(171
|
)
|
|
—
|
|
|
(1,017
|
)
|
|
(1
|
)
|
|
(91
|
)
|
|
—
|
|
|||
Change in valuation allowance
|
4,508
|
|
|
4
|
|
|
(2,613
|
)
|
|
(3
|
)
|
|
(5,125
|
)
|
|
(7
|
)
|
|||
Other, net
|
(725
|
)
|
|
(1
|
)
|
|
(652
|
)
|
|
(1
|
)
|
|
(182
|
)
|
|
(1
|
)
|
|||
Income tax expense (benefit)
|
$
|
32,961
|
|
|
30
|
%
|
|
$
|
40,490
|
|
|
50
|
%
|
|
$
|
21,044
|
|
|
30
|
%
|
|
December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Intangible assets
|
$
|
7,352
|
|
|
$
|
10,706
|
|
Net operating losses
|
14,750
|
|
|
16,769
|
|
||
Compensation accruals
|
11,728
|
|
|
7,681
|
|
||
Investments
|
7,557
|
|
|
7,322
|
|
||
Capital losses
|
512
|
|
|
870
|
|
||
Other
|
942
|
|
|
1,675
|
|
||
Gross deferred tax assets
|
42,841
|
|
|
45,023
|
|
||
Valuation allowance
|
(8,439
|
)
|
|
(3,088
|
)
|
||
Gross deferred tax assets after valuation allowance
|
34,402
|
|
|
41,935
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
(12,286
|
)
|
|
(9,507
|
)
|
||
Gross deferred tax liabilities
|
(12,286
|
)
|
|
(9,507
|
)
|
||
Deferred tax assets, net
|
$
|
22,116
|
|
|
$
|
32,428
|
|
Year
|
|
Amount
|
||
2019
|
|
$
|
3,651
|
|
2020
|
|
3,652
|
|
|
2021
|
|
3,651
|
|
|
2022
|
|
3,652
|
|
|
2023
|
|
3,651
|
|
|
2024
|
|
322,317
|
|
|
|
|
$
|
340,574
|
|
($ in thousands)
|
Unrealized Gains
(Losses) on
Securities
Available-for-Sale
|
|
Foreign
Currency
Translation
Adjustments
|
||||
Balance December 31, 2017
|
$
|
(612
|
)
|
|
$
|
12
|
|
Unrealized net gain (loss) on available-for-sale securities, net of tax of $111
|
(292
|
)
|
|
—
|
|
||
Foreign currency translation adjustments, net of tax of $6
|
—
|
|
|
(17
|
)
|
||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of ($61) (1)
|
178
|
|
|
—
|
|
||
Net current-period other comprehensive income (loss)
|
(114
|
)
|
|
(17
|
)
|
||
Balance December 31, 2018
|
$
|
(726
|
)
|
|
$
|
(5
|
)
|
(1)
|
On January 1, 2018, t
he Company adopted amendments to ASC 825 pursuant to ASU 2016-01
. This standard requires all equity investments (other than those accounted for under the equity method) to be measured at fair value with changes in the fair value recognized through net income.
|
($ in thousands)
|
Unrealized Gains
(Losses) on Securities Available-for-Sale |
|
Foreign
Currency Translation Adjustments |
||||
Balance December 31, 2016
|
$
|
(224
|
)
|
|
$
|
—
|
|
Unrealized net gain (loss) on available-for-sale securities, net of tax of $100
|
(388
|
)
|
|
—
|
|
||
Foreign currency translation adjustments, net of tax of ($4)
|
—
|
|
|
12
|
|
||
Net current-period other comprehensive income (loss)
|
(388
|
)
|
|
12
|
|
||
Balance December 31, 2017
|
$
|
(612
|
)
|
|
$
|
12
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Stock-based compensation expense
|
$
|
23,116
|
|
|
$
|
20,288
|
|
|
$
|
11,948
|
|
|
Number
of shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2017
|
483,021
|
|
|
$
|
104.16
|
|
Granted
|
198,180
|
|
|
$
|
131.16
|
|
Forfeited
|
(19,814
|
)
|
|
$
|
134.65
|
|
Settled
|
(109,149
|
)
|
|
$
|
114.28
|
|
Outstanding at December 31, 2018
|
552,238
|
|
|
$
|
111.49
|
|
|
Number
of shares
|
|
Weighted
Average
Exercise Price
|
|||
Outstanding at December 31, 2017
|
109,808
|
|
|
$
|
16.44
|
|
Exercised
|
(33,057
|
)
|
|
$
|
24.74
|
|
Outstanding at December 31, 2018
|
76,751
|
|
|
$
|
12.86
|
|
Vested and exercisable at December 31, 2018
|
76,751
|
|
|
$
|
12.86
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income (Loss)
|
$
|
76,080
|
|
|
$
|
39,939
|
|
|
$
|
48,763
|
|
Noncontrolling interests
|
(551
|
)
|
|
(2,927
|
)
|
|
(261
|
)
|
|||
Net Income (Loss) Attributable to Stockholders
|
75,529
|
|
|
37,012
|
|
|
48,502
|
|
|||
Preferred stock dividends
|
(8,337
|
)
|
|
(8,336
|
)
|
|
—
|
|
|||
Net Income (Loss) Attributable to Common Stockholders
|
$
|
67,192
|
|
|
$
|
28,676
|
|
|
$
|
48,502
|
|
Shares (in thousands):
|
|
|
|
|
|
||||||
Basic: Weighted-average number of shares outstanding
|
7,174
|
|
|
7,013
|
|
|
7,648
|
|
|||
Plus: Incremental shares from assumed conversion of dilutive instruments
|
1,353
|
|
|
234
|
|
|
174
|
|
|||
Diluted: Weighted-average number of shares outstanding
|
8,527
|
|
|
7,247
|
|
|
7,822
|
|
|||
Earnings (Loss) per Share—Basic
|
$
|
9.37
|
|
|
$
|
4.09
|
|
|
$
|
6.34
|
|
Earnings (Loss) per Share—Diluted
|
$
|
8.86
|
|
|
$
|
3.96
|
|
|
$
|
6.20
|
|
|
Years Ended Years Ended December 31,
|
|||||||
(In thousands)
|
2018
|
|
2017
|
|
2016
|
|||
Restricted stock units and stock options
|
12
|
|
|
—
|
|
|
8
|
|
Preferred stock
|
—
|
|
|
897
|
|
|
—
|
|
Total anti-dilutive securities
|
12
|
|
|
897
|
|
|
8
|
|
|
Years Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Virtus Vontobel Emerging Markets Opportunities Fund
|
|
|
|
|
|
||||||
Investment management, administration and shareholder service fees
|
$
|
52,548
|
|
|
$
|
48,826
|
|
|
$
|
49,085
|
|
Percent of total revenues
|
10
|
%
|
|
12
|
%
|
|
15
|
%
|
|||
Virtus Newfleet Multi-Sector Short Term Bond Fund
|
|
|
|
|
|
||||||
Investment management, administration and shareholder service fees
|
$
|
54,257
|
|
|
$
|
44,577
|
|
|
$
|
43,579
|
|
Percent of total revenues
|
10
|
%
|
|
11
|
%
|
|
14
|
%
|
($ in thousands)
|
Consolidated Investment Products
|
|
Affiliate Noncontrolling Interests
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
4,178
|
|
|
$
|
—
|
|
|
$
|
4,178
|
|
Business acquisition
|
—
|
|
|
55,500
|
|
|
55,500
|
|
|||
Net income (loss) attributable to noncontrolling interests
|
(472
|
)
|
|
987
|
|
|
515
|
|
|||
Net subscriptions (redemptions) (distributions) and other
|
(1,322
|
)
|
|
(1,390
|
)
|
|
(2,712
|
)
|
|||
Balance at December 31, 2018
|
$
|
2,384
|
|
|
$
|
55,097
|
|
|
$
|
57,481
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
|
VIEs
|
|
|
|
VIEs
|
||||||||||||||||
($ in thousands)
|
VOEs
|
|
CLOs
|
|
Other
|
|
VOEs
|
|
CLOs
|
|
Other
|
||||||||||||
Cash and cash equivalents
|
$
|
1,029
|
|
|
$
|
51,363
|
|
|
$
|
559
|
|
|
$
|
820
|
|
|
$
|
82,823
|
|
|
$
|
18,489
|
|
Investments
|
12,923
|
|
|
1,709,266
|
|
|
27,379
|
|
|
34,623
|
|
|
1,555,879
|
|
|
7,250
|
|
||||||
Other assets
|
228
|
|
|
30,426
|
|
|
403
|
|
|
767
|
|
|
32,671
|
|
|
48
|
|
||||||
Notes payable
|
—
|
|
|
(1,620,260
|
)
|
|
—
|
|
|
—
|
|
|
(1,457,435
|
)
|
|
—
|
|
||||||
Securities purchased payable and other liabilities
|
(823
|
)
|
|
(69,737
|
)
|
|
(146
|
)
|
|
(1,319
|
)
|
|
(110,871
|
)
|
|
(764
|
)
|
||||||
Noncontrolling interests
|
(2,348
|
)
|
|
(13,958
|
)
|
|
(36
|
)
|
|
(4,178
|
)
|
|
(16,667
|
)
|
|
$
|
—
|
|
|||||
The Company’s net interests in consolidated investment products
|
$
|
11,009
|
|
|
$
|
87,100
|
|
|
$
|
28,159
|
|
|
$
|
30,713
|
|
|
$
|
86,400
|
|
|
$
|
25,023
|
|
|
Year Ended
|
||
($ in thousands)
|
December 31, 2018
|
||
Income:
|
|
||
Realized and unrealized gain (loss), net
|
$
|
(16,202
|
)
|
Interest income
|
96,666
|
|
|
Total Income
|
$
|
80,464
|
|
|
|
||
Expenses:
|
|
||
Other operating expenses
|
$
|
2,547
|
|
Interest expense
|
64,788
|
|
|
Total Expense
|
67,335
|
|
|
Noncontrolling interest
|
(37
|
)
|
|
Net Income (loss) attributable to CIPs
|
$
|
13,092
|
|
|
Year Ended
|
||
($ in thousands)
|
December 31, 2018
|
||
Distributions received and unrealized gains (losses) on the subordinated notes held by the Company
|
$
|
5,763
|
|
Investment management fees
|
7,329
|
|
|
Total Economic Interests
|
$
|
13,092
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
51,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,363
|
|
Debt investments
|
5,306
|
|
|
1,724,714
|
|
|
6,848
|
|
|
1,736,868
|
|
||||
Equity investments
|
12,700
|
|
|
—
|
|
|
—
|
|
|
12,700
|
|
||||
Total assets measured at fair value
|
$
|
69,369
|
|
|
$
|
1,724,714
|
|
|
$
|
6,848
|
|
|
$
|
1,800,931
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
$
|
—
|
|
|
$
|
1,620,260
|
|
|
$
|
—
|
|
|
$
|
1,620,260
|
|
Short sales
|
707
|
|
|
—
|
|
|
—
|
|
|
707
|
|
||||
Total liabilities measured at fair value
|
$
|
707
|
|
|
$
|
1,620,260
|
|
|
$
|
—
|
|
|
$
|
1,620,967
|
|
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
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
|
|
|
Year Ended December 31,
|
||||||
($ in thousands)
|
2018
|
|
2017
|
||||
Level 3 Securities (a)
|
|
|
|
||||
Balance at Balance at beginning of period
|
$
|
34,781
|
|
|
$
|
25
|
|
Purchases
|
7,122
|
|
|
3,174
|
|
||
Sales
|
(13,895
|
)
|
|
(3,357
|
)
|
||
Paydowns
|
—
|
|
|
—
|
|
||
Amortization
|
19
|
|
|
9
|
|
||
Change in unrealized gains (losses), net
|
1,993
|
|
|
434
|
|
||
Realized gains (loss), net
|
562
|
|
|
(49
|
)
|
||
Acquired in business combination
|
—
|
|
|
9,151
|
|
||
Transfers to Level 2
|
(33,873
|
)
|
|
(35,258
|
)
|
||
Transfers from Level 2
|
10,139
|
|
|
60,652
|
|
||
Balance at end of period
|
$
|
6,848
|
|
|
$
|
34,781
|
|
(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.
|
|
2018
|
||||||||||||||
($ in thousands, except per share data)
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
Revenues
|
$
|
138,065
|
|
|
$
|
152,210
|
|
|
$
|
132,932
|
|
|
$
|
129,028
|
|
Operating Income (Loss)
|
29,228
|
|
|
33,946
|
|
|
27,308
|
|
|
22,617
|
|
||||
Net Income (Loss)
|
1,093
|
|
|
27,931
|
|
|
23,229
|
|
|
23,827
|
|
||||
Net Income (Loss) Attributable to Common Stockholders
|
77
|
|
|
24,913
|
|
|
20,986
|
|
|
21,216
|
|
||||
Earnings (loss) per share—Basic
|
$
|
0.01
|
|
|
$
|
3.47
|
|
|
$
|
2.91
|
|
|
$
|
2.95
|
|
Earnings (loss) per share—Diluted
|
$
|
0.01
|
|
|
$
|
3.19
|
|
|
$
|
2.75
|
|
|
$
|
2.77
|
|
|
2017
|
||||||||||||||
($ in thousands, except per share data)
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
Revenues
|
$
|
128,024
|
|
|
$
|
123,675
|
|
|
$
|
94,132
|
|
|
$
|
79,776
|
|
Operating Income (Loss)
|
28,015
|
|
|
16,789
|
|
|
3,184
|
|
|
10,047
|
|
||||
Net Income (Loss)
|
5,643
|
|
|
20,523
|
|
|
28
|
|
|
13,745
|
|
||||
Net Income (Loss) Attributable to Common Stockholders
|
3,414
|
|
|
16,708
|
|
|
(2,389
|
)
|
|
10,943
|
|
||||
Earnings (loss) per share—Basic
|
$
|
0.48
|
|
|
$
|
2.32
|
|
|
$
|
(0.34
|
)
|
|
$
|
1.67
|
|
Earnings (loss) per share—Diluted
|
$
|
0.46
|
|
|
$
|
2.21
|
|
|
$
|
(0.34
|
)
|
|
$
|
1.62
|
|
|
|
|
Name
|
|
Jurisdiction
|
|
|
|
Ceredex Value Advisors LLC
|
|
Delaware
|
|
|
|
Duff & Phelps Investment Management Co.
|
|
Illinois
|
|
|
|
ETF Distributors LLC
|
|
Delaware
|
|
|
|
ETFis Holdings LLC
|
|
Delaware
|
|
|
|
Kayne Anderson Rudnick Investment Management, LLC
|
|
California
|
|
|
|
Newfleet Asset Management, LLC
|
|
Delaware
|
|
|
|
Rampart Investment Management Company, LLC
|
|
Delaware
|
|
|
|
Seix Investment Advisors LLC
|
|
Delaware
|
|
|
|
SGIA, LLC GP
|
|
Delaware
|
|
|
|
Silvant Capital Management LLC
|
|
Delaware
|
|
|
|
Sustainable Growth Advisers, LP
|
|
Delaware
|
|
|
|
Virtus Alternative Investment Advisers, Inc.
|
|
Connecticut
|
|
|
|
Virtus ETF Advisers LLC
|
|
Delaware
|
|
|
|
Virtus ETF Solutions LLC
|
|
Delaware
|
|
|
|
Virtus Fund Advisers, LLC
|
|
Delaware
|
|
|
|
Virtus Fund Services, LLC
|
|
Delaware
|
|
|
|
Virtus Intermediate Holdings LLC
|
|
Delaware
|
|
|
|
Virtus Investment Advisers, Inc.
|
|
Massachusetts
|
|
|
|
Virtus Investment Partners International Ltd.
|
|
United Kingdom
|
|
|
|
Virtus Partners, Inc.
|
|
Delaware
|
|
|
|
Virtus Retirement Investment Advisers, LLC
|
|
Delaware
|
|
|
|
Virtus Shared Services, LLC
|
|
Delaware
|
|
|
|
VP Distributors, LLC
|
|
Delaware
|
|
|
|
Zweig Advisers LLC
|
|
Delaware
|
|
/
S
/ G
EORGE
R. A
YLWARD
|
George R. Aylward
|
President, Chief Executive Officer and Director
|
(Principal Executive Officer)
|
|
/
S
/ M
ICHAEL
A. A
NGERTHAL
|
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
/ G
EORGE
R. A
YLWARD
|
George R. Aylward
|
President, Chief Executive Officer and Director
|
(Principal Executive Officer)
|
|
/
S
/ M
ICHAEL
A. A
NGERTHAL
|
Michael A. Angerthal
|
Executive Vice President, Chief Financial Officer
|
(Principal Financial Officer and
Principal Accounting Officer)
|