Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value per share	MN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

(InU.S. dollars in thousands, except share data)

The accompanying notes are an integral part of these consolidated financial statements.

(InU.S. dollars in thousands, except share data)

The accompanying notes are an integral part of these consolidated financial statements.

(InU.S. dollars in thousands)

The accompanying notes are an integral part of these consolidated financial statements.

(InU.S. dollars in thousands, except share data)



	Common Stock – Class A			Treasury Stock			Additional Paid in Capital		Retained Deficit		Accumulated Other Comprehensive Income (Loss)		Non Controlling Interests
	Shares	Amount		Shares	Amount										Total















Three months ended March 31, 2022
Balance—December 31, 2021	18,754,080	$	195	749,005	$	(5,666)	$	104,740	$	(5,569)	$	(337)	$	(962)	$	92,401
Net income	—	—		—	—		—		1,186		—		38		1,224
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(45)		(45)
Net changes in unrealized investment securities gains or losses	—	—		—	—		—		—		(91)		(2)		(93)
Common stock issued under equity compensation plan, net of forfeitures	370,252	4		—	—		(4)		—		—		—		—
Shares withheld to satisfy tax withholding requirements related to equity awards	—	—		—	—		(1,640)		—		—		(38)		(1,678)
Equity-based compensation	—	—		—	—		506		—		—		12		518
Dividends declared on Class A common stock - $0.05 per share	—	—		—	—		—		(956)		—		—		(956)


Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)	—	—		—	—		(35)		—		—		35		—

Balance—March 31, 2022	19,124,332	$	199	749,005	$	(5,666)	$	103,567	$	(5,339)	$	(428)	$	(962)	$	91,371

Comprehensive Income (Loss)

The accompanying notes are an integral part of these consolidated financial statements.

(InU.S. dollars in thousands)

The accompanying notes are an integral part of these consolidated financial statements.

Note 1—Organization and Nature of the Business

Manning & Napier, Inc. ("Manning & Napier", or the "Company") is an independent investment management firm that provides our clients with a broad range of financial solutions and investment ~~solutions through separately managed accounts, mutual funds, and collective investment trusts, as well as a variety of consultative services that complement its investment process.~~strategies. Founded in 1970 ~~the Company offers U.S.~~ and ~~non-U.S. equity, fixed income and a range of blended asset portfolios, such as life cycle funds and actively-managed exchange-traded fund ("ETF")-based portfolios. Headquartered~~headquartered in Fairport, ~~New York,~~NY, the Company serves a diversified client base of ~~high net worth~~high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. The Company's investment strategies offer equity, fixed income and a range of blended asset portfolios, including life cycle funds.

The Company was incorporated in 2011 as a Delaware corporation, and is the sole managing member of Manning & Napier Group, LLC and its subsidiaries ("(“Manning & Napier ~~Group"~~Group”), a holding company for the investment management businesses conducted by its operating subsidiaries. The diagram below depicts the Company's ~~organization~~organizational structure as of ~~September 30, 2017~~.March 31, 2022.

(1)The consolidated operating subsidiaries of Manning & Napier Group include Manning & Napier Advisors, LLC ("MNA"), Manning & Napier Investor Services, Inc., Exeter Trust Company and Rainier Investment Management, LLC ("Rainier").

Plan of Acquisition by Callodine Group, LLC.

On March 31, 2022, the Company entered into an agreement (the "Merger Agreement") under which the Company will go private and be acquired by Callodine Group, LLC ("Callodine"), with the Company continuing as the surviving corporation (the "Merger").

Note 2—Summary of Significant Accounting Policies

Critical Accounting Policies

~~There have been no significant changes in our~~The Company's critical accounting policies and estimates ~~from those that were~~are disclosed in ~~our~~its Annual Report on Form 10-K for the year ended December 31, ~~2016~~.

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

2021. The Company believes that the disclosures herein are adequate so that the information presented is not misleading; however, these financial statements should be read in conjunction with the financial statements and the notes thereto in ~~our~~the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016~~.2021. The financial data for the interim periods may not necessarily be indicative of results for future interim periods or for the full year.

Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related rules and regulations of the U.S. Securities and

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

Exchange Commission (“SEC”) for interim financial reporting and include all adjustments, consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from these estimates or assumptions.

Principles of Consolidation

The Company consolidates all majority-owned subsidiaries. ~~In addition, as~~As of ~~September 30, 2017,~~March 31, 2022, Manning & Napier holds an economic interest of approximately ~~17.8%~~97.8% in Manning & Napier Group ~~but,~~and, as managing member, controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statements of financial condition with respect to the remaining economic interest in Manning & Napier Group held by ~~Manning & Napier Group Holdings, LLC (“~~M&N Group ~~Holdings”) and Manning & Napier Capital Company, LLC (“MNCC”).~~Holdings.

All material intercompany transactions have been eliminated in consolidation.

In accordance with Accounting Standards Update ("ASU") 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design, a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance, and whether a company is obligated to absorb losses or receive benefits that could potentially be significant to the entity. The standard also requires ongoing assessments of whether a company is the primary beneficiary of a variable interest entity (“VIE”). When utilizing the voting interest entity ("VOE") model, controlling financial interest is generally defined as majority ownership of voting interests.

The Company provides seed capital to its investment teams to develop new ~~products~~strategies and services for its clients. The original seed investment may be held in a separately managed account, comprised solely of the Company's investments or within a mutual fund, where the Company's investments may represent all or only a portion of the total equity investment in the mutual fund. Pursuant to U.S. GAAP, the Company evaluates its investments in mutual funds on a regular basis and consolidates such mutual funds for which it holds a controlling financial interest. When no longer deemed to hold a controlling financial interest, the Company would deconsolidate the fund and classify the remaining investment as either an equity method investment, equity investments, at fair value, or as trading securities, as applicable. As of March 31, 2022 and December 31, 2021, the Company did not have investments classified as an equity method investment.

The Company serves as the investment adviser for Manning & Napier Fund, Inc. series of mutual funds (the “Fund”), Exeter Trust Company Collective Investment Trusts (“CIT”)~~, Rainier Investment Management Mutual Funds~~ and Rainier Multiple Investment Trust. The Fund, CIT ~~Rainier Investment Management Mutual Funds~~ and Rainier Multiple Investment Trust are legal entities, the business and affairs of which are managed by their respective boards of directors. As a result, each of these entities is a VOE. The Company holds, in limited cases, direct investments in a mutual fund (which are made on the same terms as are available to other investors) and consolidates each of these entities where it has a controlling financial interest or a majority voting interest. The Company's investments in the Fund amounted to approximately ~~$1.5~~$14.9 million as of ~~September 30, 2017~~March 31, 2022 and ~~$1.3~~$1.1 million as of December 31, ~~2016.~~2021. As of March 31, 2022 and December 31, ~~2016,~~2021, the Company ~~maintained~~did not have a controlling financial interest in ~~one~~any mutual ~~fund,~~ fund.

Investment Management: Investment management fees are computed as a percentage of assets under management ("AUM"). The Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time.

Separately managed accounts are paid in advance, typically for a semi-annual or quarterly period, or in arrears, typically for a monthly or quarterly period. When investment management fees are paid in advance, the Company defers the revenue as a contract liability and recognizes it over the applicable period. When investment management fees are paid in arrears, the Company estimates revenue and records a contract asset (accrued accounts receivable) based on AUM as of the most recent month end date.

Mutual funds and collective investment trust investment management revenue is calculated and earned daily based on AUM. Revenue is presented net of cash rebates and fees waived pursuant to contractual expense limitations of the funds. The Company also has agreements with third parties who provide recordkeeping and administrative services for employee benefit plans participating in the collective investment trusts. The Company is acting as an agent on behalf of the employee benefit plan sponsors, therefore, investment management revenue is recorded net of fees paid to third party service providers.

Distribution and shareholder servicing: The Company receives distribution and servicing fees for providing services to its affiliated mutual funds. Revenue is computed and earned daily based on a percentage of AUM. The performance obligation is a series of services that form part of a single performance obligation satisfied over time. The Company has agreements with third parties who provide distribution and administrative services for its mutual funds. The agreements are evaluated to determine

Manning & Napier, ~~Fund,~~ Inc. ~~Quality Equity Series,~~

Notes to Consolidated Financial Statements (Continued)

whether revenue should be reported gross or net of payments to third-party service providers. The Company controls the services provided and ~~consolidated the mutual fund. As of September 30, 2017, the Company did not maintain~~acts as a ~~controlling financial interest, but did retain significant influence~~principal in the ~~mutual fund,~~relationship. Therefore, distribution and shareholder servicing revenue is recorded gross of fees paid to third parties.

Custodial services: Custodial service fees are calculated as a percentage of the client’s market value with additional fees charged for certain transactions. For the safeguarding and administrative services that are subject to a percentage of market value fee, the Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Revenue for transactions assigned a stand-alone selling price is recognized in the period in which ~~was accounted~~the transaction is executed. Custodial service fees are billed monthly in arrears. The Company has agreements with third parties who provide safeguarding, recordkeeping and administrative services for their clients. The Company controls the services provided and acts as ~~an equity method investment.~~a principal in the relationship. Therefore, custodial service revenue is recorded gross of fees paid to third parties.

Cash and Cash Equivalents

The Company generally considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in operating accounts at major financial institutions and also in money market securities. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. The fair value of cash equivalents ~~have~~has been classified as Level 1 in accordance with the fair value hierarchy.

Investment Securities

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

Investment securities are classified as either equity investments, trading, equity method investments or available-for-sale and are carried at fair value. Fair value is determined based on quoted market prices in active markets for identical or similar instruments.

Investment securities classified as ~~trading~~equity investments, at fair value consist of equity ~~securities, fixed income~~ securities and investments in mutual funds for which the Company provides advisory services. Realized and unrealized gains and losses on equity investments, at fair value or trading securities, ~~are recorded in net gains (losses) on investments in the consolidated statements of operations. At~~ ~~September 30, 2017, trading securities consist solely of investments held by the Company to provide initial cash seeding for product development purposes.~~

~~Investments classified~~ as equity method investments represent seed investments in which the Company owns between 20-50% of the outstanding voting interests in the affiliated fund or when it is determined that the Company is able to exercise significant influence but not control over the investments. If the seed investment results in significant influence, but not control, the investment will be accounted for as an equity method investment. When using the equity method, the Company recognizes its share of the investee's net income or loss for the period which isapplicable, are recorded in net gains (losses) on investments in the consolidated statements of operations.

Investment securities classified as available-for-sale consist of U.S. Treasury ~~notes~~securities and ~~other short-term investments.~~corporate bonds. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported, net of deferred income tax, as a separate component of accumulated other comprehensive income in ~~stockholders’~~shareholders’ equity until realized. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If impairment is determined to be other-than-temporary, the carrying value of the security will be written down to fair value and the loss will be recognized in earnings. Realized gains and losses on sales of available-for-sale securities are computed on a specific identification basis and are recorded in net gains (losses) on investments in the consolidated statements of operations.

Property, Equipment, Software and ~~Equipment~~Depreciation

Property and equipment is presented net of accumulated depreciation of approximately ~~$11.3~~$8.7 million and ~~$11.6~~$8.6 million as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively.

Capitalized implementation costs for hosting arrangements are included within prepaid expenses and other assets on the Company's statements of financial condition and totaled approximately $5.1 million and $7.0 million, net of accumulated amortization, as of March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022 , the Company recognized a $1.9 million charge for the impairment of certain internal and external costs capitalized in connection with hosted software arrangements, which is reflected within other operating costs in the statements of operations. This impairment charge was recorded subsequent to the Company's determination that portions of a software license agreement with a third-party service provider would be terminated. As such, the Company concluded that capitalized costs associated with the terminated services would not ultimately be completed and placed into service. The Company does not expect to incur future cash expenditures in connection with terminating these services.

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

Goodwill and Intangible Assets

Goodwill represents the excess cost over the fair value of the identifiable net assets of acquired companies. Identifiable intangible assets generally represent the cost of client relationships and investment management agreements acquired as well as trademarks. Goodwill and indefinite-lived assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Intangible assets subject to amortization are tested for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimate and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment.

~~On May 10, 2017,~~Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, accrued expenses and other liabilities and operating lease liabilities, non-current on its consolidated statements of financial condition. Finance leases are included in other long-term assets, accrued expenses and other liabilities, and other long-term liabilities on its consolidated statements of financial condition.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate, for each identified lease, is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term. The operating lease ROU asset is reduced for any lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are combined for all classes of underlying assets.

Impairment of Long-Lived Assets

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate.

During the three months ended March 31, 2022, the Company entered into ana sublease agreement for a portion of the Company's currently occupied office space, triggering a change in the way the leased asset is utilized by the Company. The subleased space was determined to ~~sell certain U.S. mutual funds to~~be a ~~third party.~~separate asset group from the remaining office space leased by the Company, and as such represents a distinct ROU asset and lease liability. The ~~transaction is~~Company assessed recoverability of the asset group by comparing the undiscounted future net cash flows expected to ~~close during~~result from the fourth quarter of 2017, with the selling price based on the total assets under management on the transaction closing date. As of September 30, 2017, the assets under management for these products was approximately $0.4 billion.asset group to its carrying value. The carrying value exceeded the undiscounted future net cash flows of the ~~intangible assets~~asset, and an impairment loss of approximately $0.5 million was recognized during the three months ended March 31, 2022 as the difference between the net book value and the fair value of the asset group.

Treasury stock is accounted for ~~client relationships associated with these products was $0~~under the cost method and is included as a deduction from equity in the Shareholders' Equity section of ~~September 30, 2017.~~the consolidated statements of financial condition. Upon any subsequent retirement or resale, the treasury stock account is reduced by the cost of such stock.

The Company operates in ~~one~~1 segment, the investment management industry.

The majority of the Company’s revenues are based on fees charged to manage customers’ portfolios. Investment management fees are generally computed as a percentage of assets under management ("AUM") and recognized as earned. Fees for providing investment advisory services are computed and billed in accordance with the provisions of the applicable investment management agreements. For the Company’s separately managed accounts, clients either pay investment management fees in advance, typically for a semi-annual or quarterly period, or in arrears, typically for a monthly or quarterly period. When investment management fees are paid in advance, the Company defers the revenue and recognizes it over the applicable period. When investment management fees are paid in arrears, the Company estimates revenues based on AUM market values as of the most recent month end date, and adjusts to actual when billed. For mutual funds and collective investment trust vehicles, the Company’s fees are calculated and earned daily based on AUM. Investment management fees are presented net of cash rebates and fees waived pursuant to contractual expense limitations of the funds.

~~The Company is contractually obligated to make payments to certain advisory clients with the intent of providing those clients a discounted fee. In accordance with ASC 605-50, Revenue Recognition - Customer Payments and Incentives, these payments are presented as a reduction to revenue. There were no incentives reported as a reduction to revenue for the three~~

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

Disaggregated Revenue

The following table represents the Company’s wealth management and institutional and intermediary investment management revenue by investment portfolio during the three months ended ~~September 30, 2017, while incentives were $3.4 million~~March 31, 2022 and 2021:










	Three months ended March 31, 2022						Three months ended March 31, 2021
	Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
	(in thousands)
Blended Asset	$	14,669	$	8,297	$	22,966	$	13,634	$	8,068	$	21,702
Equity	1,361		5,921		7,282		1,608		5,865		7,473
Fixed Income	110		469		579		106		395		501
Total	$	16,140	$	14,687	$	30,827	$	15,348	$	14,328	$	29,676

Accounts receivable as of March 31, 2022 and December 31, 2021 consisted of the following:


	March 31, 2022		December 31, 2021
	(in thousands)
Accounts receivable - third parties	$	5,931	$	8,119
Accounts receivable - affiliated mutual funds and collective investment trusts	5,209		5,732
Total accounts receivable	$	11,140	$	13,851

Accounts receivable represents the Company's unconditional rights to consideration arising from its performance under separately managed account, mutual fund and collective investment trust, distribution and shareholder servicing, and custodial service contracts. Accounts receivable balances do not include an allowance for doubtful accounts nor has any significant bad debt expense attributable to accounts receivable been recorded during the ~~nine~~three months ended ~~September 30, 2017. Incentives reported as a reduction of revenue were $3.3 million~~March 31, 2022 or 2021.

Advisory and ~~$8.9 million for the three and nine months ended September 30, 2016, respectively.~~

The Company has agreements with third parties who provide distribution and administrative services for its mutual funds, collective investment trusts and certain separately managed accounts. Third party agreements are evaluated against ASC 605-45 ~~Revenue Recognition - Principal Agent Considerations~~ to determine whether revenue should be reported gross or net of payments to third-party service providers. In management's judgment there are various indicators that support gross revenue reporting, the most notable being the Company acts as primary obligor and therefore principal service provider. Based on this evaluation, investment management service revenue is recorded gross of distribution and administrative fees paid to third parties.

~~Advisory~~Distribution Agreements

The Company ~~derives significant revenue from its role as advisor to~~earns investment advisory fees, distribution fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. Fees earned for advisory ~~related~~and distribution services provided were approximately ~~$19.4 million and $64.6~~$10.1 million for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2022 and ~~$28.8 million and $86.7~~approximately $9.9 million for the three ~~and nine~~ months ended ~~September 30, 2016, respectively,~~March 31, 2021, which represents greater than ~~10%~~25% of ~~the Company's~~ revenue in each period. The following provides amounts due from affiliated mutual funds and collective investment trusts reported within accounts receivable in the consolidated statements of financial condition as of March 31, 2022 and December 31, 2021:

~~Recent Accounting Pronouncements~~


	March 31, 2022		December 31, 2021
	(in thousands)
Affiliated mutual funds	$	3,928	$	4,309
Affiliated collective investment trusts	1,281		1,423
Accounts receivable - affiliated mutual funds and collective investment trusts	$	5,209	$	5,732

Contract assets and liabilities

Accrued accounts receivable: Accrued accounts receivable represents the ~~FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606), which supersedes existing accounting standards~~Company's contract asset for revenue ~~recognition and creates a single framework. The revenue standard contains principals~~ that ~~will be applied to determine~~has been recognized in advance of billing separately managed account contracts. Consideration for the ~~measurement of revenue and timing of recognition and also impacts~~period billed in arrears is dependent on the accounting for incremental costs to obtain a contract. We will adopt the new standard on its effective date of January 1, 2018. While we have not identified material changes in the timing of revenue recognition, we continue to evaluate the presentation of certain revenue related costsclient’s AUM on a ~~gross versus net basis. We anticipate that certain first year costs associated with new investment management contracts will be capitalized~~future billing date and amortized over an estimated customer contract period. We have not yet determined whether we will adopt the standard using the retrospective approach with adjustment to each prior period or modified retrospective approach with the cumulative effect of initial application recognized at the date of initial application.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities,~~ which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income. ASU 2016-01 will be effective on January 1, 2018 and will result in a cumulative-effect adjustment to the balance sheet upon adoption. The Company is currently evaluating the impact that ASU 2016-01 will have on its consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842),~~ ~~which is intended to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet~~therefore conditional as a lease liability and a right-of-use asset (as defined). The new guidance will be effective for fiscal years beginning after December 15, 2018, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Stock Compensation - Stock Compensation (Topic 718),Improvements to Employee Share-Based Payment Accounting~~, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance is effective for fiscal years beginning after December 15, 2016. The Company's adoption of these amendments on January 1, 2017 did not have a material impact on its consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments~~, to clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. The FASB issued the ASU with the intent of reducing diversity in practice regarding eight types of cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The Company is evaluating the effect of adopting this new accounting standard.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment~~, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The ASU requires goodwill impairments to be measured on the basis of the fair value of the reporting ~~unit relative~~period end. During the three months ended March 31, 2022, revenue was decreased by less than $0.1 million for changes in transaction price. Accrued accounts receivable of approximately $0.3 million is reported within prepaid expenses and other assets in the consolidated statements of financial condition for both March 31, 2022 and December 31, 2021.

Deferred revenue: Deferred revenue is recorded when consideration is received or unconditionally due in advance of providing services to the ~~reporting unit's carrying amount rather than on~~Company's customer. Revenue recognized during the ~~basis~~three months ended March 31, 2022 that was included in deferred revenue at the beginning of the implied amount of goodwill relative to the goodwill balance of the reporting unit. The ASU is effective for annual and interim impairment tests for periods beginning after December 15, 2019. Early adoption is allowed for annual and interim impairment tests occurring after January 1, 2017. The Company is evaluating the effect of adopting this new accounting standard.period was approximately $9.9 million.

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

~~Note 3—Acquisitions~~

~~On April 30, 2016, the Company acquired~~Costs to obtain a ~~majority ownership interest~~contract: Under compensation plans in ~~Rainier Investment Management, LLC ("Rainier”),~~effect for periods prior to January 1, 2020, certain incremental first year commissions directly associated with new customer contracts were capitalized and amortized on a straight-line basis over an ~~active investment management firm. Under the terms~~estimated customer contract period of the transaction, the Company initially acquired a 75% ownership interest in Rainier, with the remaining 25% ownership maintained by key professionals at Rainier. As of September 30, 2017, the Company's ownership interest in Rainier was 86%, an increase from the acquisition due3 to ~~the forfeiture of unvested ownership interests by certain individuals retiring from Rainier subsequent to the acquisition.~~

Consideration transferred included an upfront cash payment on the transaction closing date of $13.0 million, a portion of which was held in escrow. During the second quarter of 2017, the Company received approximately $0.3 million from amounts held in escrow for post closing adjustments. Additional cash payments of up to $32.5 million over a four year period are contingent upon Rainier’s achievement of certain annual financial targets.7 years. The fair value of the liability for this contingent consideration recognized on the acquisition date was $3.5 million. As of September 30, 2017 and December 31, 2016, the fair value of this contingent liability was $0.

~~The transaction was accounted for by the Company using the acquisition method under ASC 805,~~ ~~Business Combinations~~. During the second quarter of 2016, the Company completed a preliminary allocation of the April 30, 2016 purchase price to the assets acquired and liabilities assumed. During the first quarter of 2017, certain adjustments were recorded to liabilities assumed and the purchase price allocation was finalizedtotal net asset as of March 31, ~~2017.~~2022 and December 31, 2021 was approximately $0.4 million and $0.5 million, respectively. The ~~final purchase price was allocated as follows (in thousands):~~related amortization expense, which is included in compensation and related costs, totaled less than $0.1 million for the three months ended March 31, 2022 and less than $0.1 million for the three months ended March 31, 2021. An impairment loss is recorded for contract acquisition costs related to client contracts that cancel during the period. These impairment losses totaled less than $0.1 million for the three months ended March 31, 2022 and were zero for the three months ended March 31, 2021.

Assets acquired
Current assets $ 6,998
Property and equipment, net 783
Intangible assets
Client relationships 9,320
Trademarks 270
Goodwill 3,958
Total assets acquired 21,329
Liabilities assumed
Accounts payable and accrued expenses 4,023
Other liabilities 1,204
Total liabilities assumed 5,227
Purchase price $ 16,102

Note 4—Noncontrolling Interests

Manning & Napier holds an economic interest of approximately ~~17.8%~~97.8% in Manning & Napier Group, ~~but~~and as managing member controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated ~~statement~~statements of financial condition with respect to the remaining approximately ~~82.2% aggregate~~2.2% economic interest in Manning & Napier Group held by M&N Group ~~Holdings and MNCC.~~Holdings. Net income attributable to noncontrolling interests on the statements of operations represents the portion of earnings attributable to the economic interest in Manning & Napier Group held by the noncontrolling interests.

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

The following table provides a reconciliation from “Income before provision for (benefit from) income taxes” to “Net income attributable to Manning & Napier, Inc.”:


	Three months ended March 31,
		2022			2021
		(in thousands)
Income before provision for (benefit from) income taxes		$	478		$	6,667
Less: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)		(1,320)			7
Income before provision for income taxes, as adjusted		1,798			6,660
Controlling interest percentage (2)		97.8		%	88.9		%
Income before provision for income taxes attributable to controlling interest		1,758			5,921
Plus: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)		(1,320)			7
Income before provision for income taxes attributable to Manning & Napier, Inc.		438			5,928
Less: provision for (benefit from) income taxes of Manning & Napier, Inc.(3)		(748)			688
Net income attributable to Manning & Napier, Inc.		$	1,186		$	5,240

_______________________

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
(in thousands)
Income before provision for income taxes $ 12,591
$ 21,550
$ 46,279
$ 68,651
Less: gain (loss) before provision for income taxes of Manning & Napier, Inc. ⁽¹⁾
(51 ) (95 ) (45 ) (114 )
Income before provision for income taxes, as adjusted 12,642
21,645
46,324
68,765
Controlling interest percentage ⁽²⁾
17.8 % 17.4 % 17.7 % 17.1 %
Net income attributable to controlling interest 2,261
3,765
8,189
11,753
Plus: gain (loss) before provision for income taxes of Manning & Napier, Inc. ⁽¹⁾
(51 ) (95 ) (45 ) (114 )
Income before income taxes attributable to Manning & Napier, Inc. 2,210
3,670
8,144
11,639
Less: provision for income taxes of Manning & Napier, Inc. ⁽³⁾
689
1,412
3,041
4,358
Net income attributable to Manning & Napier, Inc. $ 1,521
$ 2,258
$ 5,103
$ 7,281
(1)Manning & Napier, Inc. incurs certain income or expenses that are only attributable to it and are therefore excluded from the net income attributable to noncontrolling interests.

(2)Income before provision for (benefit from) income taxes is allocated to the controlling interest based on the percentage of units of Manning & Napier Group held by Manning & Napier, Inc. The amount represents the Company's weighted ownership of Manning & Napier Group's income for the respective periods.

(3)The consolidated provision for (benefit from) income taxes is equal to the sum of (i) the provision for (benefit from) income taxes for entities other than Manning & Napier, Inc. and (ii) the provision for (benefit from) income taxes of Manning & Napier, Inc. which includes all U.S. federal and state income taxes. The consolidated provision for (benefit from) income taxes was a benefit of $0.7 million and provision of $0.7 million for the three months ended March 31, 2022 and 2021, respectively.

As of ~~September 30, 2017,~~March 31, 2022, a total of ~~63,931,065~~428,812 units of Manning & Napier Group were held by the noncontrolling interests. Pursuant to the terms of the exchange agreement entered into at the time of the Company's initial public offering ("Exchange Agreement"), such units may be ~~exchangeable~~tendered for ~~shares of the Company's Class A common stock.~~exchange or redemption. For any units exchanged, the Company ~~will~~may (i) pay an amount of cash equal to the number of tendered units ~~exchanged~~ multiplied by the value of one share of the Company's Class A common stock less a market discount and expected expenses, or, at the Company's election, (ii) issue shares of the Company's Class A common stock on a one-for-one basis, subject to customary adjustments. As the Company receives units of Manning & Napier Group that are exchanged, the Company's ownership of Manning & Napier Group will increase.

~~During the nine months ended September 30, 2017, M&N Group Holdings and MNCC exchanged a total of 1,853,506 Class A units of~~

Manning & Napier, ~~Group for approximately $9.8 million in cash. Subsequent~~Inc.

Notes to Consolidated Financial Statements (Continued)

During the ~~exchange the Class A units were retired, resulting in an increase in Manning & Napier's ownership in Manning & Napier Group. In addition, during the nine~~three months ended ~~September 30, 2017,~~March 31, 2022, Class A common stock was issued under the Company's 2011 Equity Compensation Plan (the "Equity Plan") for which Manning & Napier, Inc. acquired an equivalent number of Class A units of Manning & Napier ~~Group, net of forfeitures of unvested restricted stock awards.~~

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

The following is the impact to the Company's equity ownership interest in Manning & Napier Group for the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2022:

Manning & Napier Group Class A Units Held

Manning & Napier

Noncontrolling Interests Total Manning & Napier Ownership %
As of December 31, 2016 13,826,575
65,784,571
79,611,146
17.4%
Class A Units issued ⁽¹⁾
46,467
—
46,467
—%
Class A Units exchanged —
(1,853,506 ) (1,853,506 ) 0.4%
As of September 30, 2017 13,873,042
63,931,065
77,804,107
17.8%

~~______________________~~


	Manning & Napier Group Class A Units Held
	Manning & Napier	Noncontrolling Interests	Total	Manning & Napier Ownership %
As of December 31, 2021	18,296,780	428,812	18,725,592	97.7%
Class A Units issued	370,252	—	370,252	0.1%

As of March 31, 2022	18,667,032	428,812	19,095,844	97.8%

Manning & Napier Inc., as managing member, controls all of the business and affairs of Manning & Napier Group. Since the Company continues to have a controlling interest in Manning & Napier Group, the aforementioned changes in ownership of Manning & Napier Group were accounted for as equity transactions under ASC Topic 810, Consolidation. Additional paid-in capital and noncontrolling interests in the ~~Consolidated Statements~~consolidated statements of ~~Financial Position~~financial position are adjusted to reallocate the Company's historical equity to reflect the change in ownership of Manning & Napier Group.

Manning & Napier and the holders of Manning & Napier Group are party to a tax receivable agreement ("TRA"), pursuant to which Manning & Napier is required to pay to such holders 85% of the applicable cash savings, if any, in U.S. federal, state, local and foreign income tax that Manning & Napier actually realizes, or is deemed to realize in certain circumstances, as a result of (i) certain tax attributes of their units sold to Manning & Napier or exchanged (for shares of Class A common stock) and that are created as a result of the sales or exchanges and payments under the TRA and (ii) tax benefits related to imputed interest.

At ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016,~~2021, the Company had recorded a liability of ~~$34.7~~$17.8 million, ~~and $37.1 million, respectively,~~ representing the estimated payments due to the selling unit holders under the ~~tax receivable agreement ("TRA")~~TRA entered into between Manning & Napier and the other holders of Class A Units of Manning & Napier Group. Of these amounts, ~~$2.5 million and $2.4~~approximately $4.3 million were included in accrued expenses and other liabilities at ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016, respectively.~~2021. The Company made no payments ~~of $2.4 million and $3.4 million~~ pursuant to the TRA during either of the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively.~~2021.

Obligations pursuant to the TRA are obligations of Manning & Napier. They do not impact the noncontrolling interests. These obligations are not income tax obligations. Furthermore, the TRA has no impact on the allocation of the provision for income taxes to the Company’s net income.

~~Note 5—Investment Securities~~

~~The following represents the Company’s investment securities holdings as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~:

September 30, 2017
Cost
Unrealized
Gains

Unrealized
Losses

Fair
Value
(in thousands)
Available-for-sale securities
U.S. Treasury notes $ 7,117
$ 3
$ (13 ) $ 7,107
Short-term investments 22,255
—
—
22,255
29,362
Trading securities
Equity securities 2,493
Fixed income securities 5,009
Mutual funds 346
7,848
Equity method investments
Mutual funds 1,112
Total investment securities $ 38,322

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 5—Investment Securities

The following represents the Company’s investment securities holdings as of March 31, 2022 and December 31, 2021:


	December 31, 2016										March 31, 2022
	Cost		Unrealized Gains		Unrealized Losses			Fair Value			Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)										(in thousands)
Available-for-sale securities										Available-for-sale securities
U.S. Treasury notes	$	7,093	$	13	$	(6	)	$	7,100
Short-term investments	14,744		—		—			14,744
U.S. Treasury securities										U.S. Treasury securities	$	9,455	$	—	$	(191)	$	9,264
Fixed income securities										Fixed income securities	6,219		—		(204)		6,015
								21,844
Trading securities
																	15,279
Equity investments, at fair value										Equity investments, at fair value
Equity securities								7,176		Equity securities							6,796
Fixed income securities								7,167
Mutual funds								288		Mutual funds							14,945
Mutual funds - consolidated funds								995
								15,626									21,741
Total investment securities								$	37,470	Total investment securities							$	37,020


	December 31, 2021
	Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Available-for-sale securities
U.S. Treasury securities	$	10,442	$	—	$	(135)	$	10,307
Fixed income securities	7,015		—		(156)		6,859

							17,166
Equity investments, at fair value
Equity securities							6,377
Mutual funds							1,065
							7,442
Total investment securities							$	24,608

Investment securities are classified as either ~~trading~~equity investments or available-for-sale and are carried at fair value. Fair value is determined based on quoted market prices in active markets for identical or similar instruments.

Investment securities classified as ~~trading~~equity investments, at fair value consist of equity ~~securities, fixed income~~ securities and investments in mutual funds for which the Company provides advisory services. At ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016, trading securities~~2021, equity investments, at fair value consist ~~solely~~ of investments held by the Company to provide initial cash seeding for product development ~~purposes.~~purposes and investments in mutual funds to hedge economic exposure to market movements on its deferred compensation plan. The Company recognized approximately ~~$1.5~~$0.5 million of net unrealized losses and ~~$1.6~~$0.3 million of net unrealized gains related to investments classified as ~~trading~~equity investments, at fair value during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~,2021, respectively.

Investment securities classified as available-for-sale consist of U.S. Treasury ~~notes~~securities and ~~other short-term investments~~corporate bonds to optimize cash management opportunities and for compliance with certain regulatory ~~requirements and to optimize cash management opportunities.~~requirements. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, approximately $0.6 million of these securities was considered restricted. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. No other-than-temporary impairment charges have been recognized by the Company during the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2022 and ~~2016~~.2021.

Note 6—Fair Value Measurements

Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A fair value hierarchy is ~~provided~~applied that gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

The following three-tier fair value hierarchy prioritizes the inputs used in measuring fair value:

•Level 1—observable inputs such as quoted prices in active markets for identical securities;

•Level 2—other significant observable inputs (including but not limited to quoted prices for similar securities, interest rates, prepayment rates, credit risk, etc.); and

•Level 3—significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

The following ~~provides~~table summarizes the hierarchy of inputs used to derive the fair value of the Company’s ~~financial instruments measured at fair value on a recurring basis~~assets as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~:2021:


	March 31, 2022
	Level 1		Level 2		Level 3		Totals
	(in thousands)
Equity securities	$	6,796	$	—	$	—	$	6,796
Fixed income securities	—		6,015		—		6,015
Mutual funds	14,945		—		—		14,945

U.S. Treasury securities	—		9,264		—		9,264

Total assets at fair value	$	21,741	$	15,279	$	—	$	37,020


	September 30, 2017									December 31, 2021
	Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
	(in thousands)									(in thousands)
Equity securities	$	2,493	$	—	$	—	$	2,493	Equity securities	$	6,377	$	—	$	—	$	6,377
Fixed income securities	—		5,009		—		5,009		Fixed income securities	—		6,859		—		6,859
Mutual funds	1,458		—		—		1,458		Mutual funds	1,065		—		—		1,065
U.S. Treasury notes	—		7,107		—		7,107
Short-term investments	22,255		—		—		22,255
U.S. Treasury securities									U.S. Treasury securities	—		10,307		—		10,307

Total assets at fair value	$	26,206	$	12,116	$	—	$	38,322	Total assets at fair value	$	7,442	$	17,166	$	—	$	24,608

Contingent consideration liability	$	—	$	—	$	—	$	—
Total liabilities at fair value	$	—	$	—	$	—	$	—

December 31, 2016
Level 1 Level 2 Level 3 Totals
(in thousands)
Equity securities $ 7,176
$ —
$ —
$ 7,176
Fixed income securities 1,071
6,096
—
7,167
Mutual funds 288
—
—
288
Mutual funds - consolidated funds 995
—
—
995
U.S. Treasury notes —
7,100
—
7,100
Short-term investments 14,744
—
—
14,744
Total assets at fair value $ 24,274
$ 13,196
$ —
$ 37,470

Contingent consideration liability $ —
$ —
$ —
$ —
Total liabilities at fair value $ —
$ —
$ —
$ —

~~Short-term investments consists of certificate of deposits ("CDs") that are stated at cost, which approximate fair value due to the short maturity of the investments.~~

Valuations of investments in fixed income securities and U.S. Treasury ~~notes~~securities can generally be obtained through independent pricing services. For most bond types, the pricing service utilizes matrix pricing, which considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type and current day trade information, as well as dealer supplied prices. These valuations are categorized as Level 2 in the hierarchy.

Contingent consideration was a component of the purchase price of Rainier (Note 3). The contingent consideration is payable over a four year period upon Rainier’s achievement of certain financial targets. The fair value of the contingent consideration is calculated on a quarterly basis by forecasting Rainier’s adjusted earnings before interest, taxes and amortization ("EBITA") as defined by the purchase agreement over the contingency period with changes in the fair value included in other operating costs in the consolidated statements of operations.

There were no changes in contingent consideration liability measured at fair value using significant unobservable inputs (Level 3) for the nine months ended September 30, 2017. The fair value was $0 at September 30, 2017 and December 31, 2016.

The Company’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no transfers between ~~Levels~~valuation levels during the ~~nine~~three months ended ~~September 30, 2017~~.March 31, 2022.

Note 7—Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities as of March 31, 2022 and December 31, 2021 consisted of the following:


	March 31, 2022		December 31, 2021
	(in thousands)
Accrued bonus and sales commissions	$	11,182	$	22,144
Accrued payroll and benefits	2,953		4,548
Accrued sub-transfer agent fees	472		482

Amounts payable under tax receivable agreement	4,273		4,273
Short-term operating lease liabilities	2,788		2,728
Other accruals and liabilities	4,320		2,213
Total accrued expenses and other liabilities	$	25,988	$	36,388

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

The Company has operating and finance leases for office space and certain equipment. For these leases, the office space or equipment is an explicitly identified asset within the contract. The Company has determined that it has obtained substantially all of the economic benefits from the use of the underlying asset and directs how and for what purpose the asset is used during the term of the contract.

Certain of the Company's operating leases have been subleased for which the Company will receive cash totaling approximately $4.1 million over the remaining term of such leases. The lease terms for the five subleased operating leases end ranging from 2025 to 2028.

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows:


	Three months ended March 31,
		2022		2021
		(in thousands)
Finance lease expense
Amortization of right-of-use assets		$	13	$	24
Interest on lease liabilities		1		2
Operating lease expense		1,183		826
Short-term lease expense		—		—
Variable lease expense		77		41
Sublease income		(186)		(165)
Total lease expense		$	1,088	$	728

Supplemental cash flow information related to leases for the three months ended March 31, 2022 and 2021 were as follows:


	Three months ended March 31,
		2022		2021
		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases		$	1	$	2
Finance cash flows from finance leases		$	17	$	16
Operating cash flows from operating leases		$	1,189	$	946

Right-of-use assets obtained in exchange for new lease obligations:
Finance leases		$	—	$	—
Operating leases		$	(513)	$	38

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

Supplemental balance sheet information related to leases as of March 31, 2022 was as follows:


(in thousands, except lease term and discount rate)	March 31, 2022
Finance Leases
Finance lease right-of-use assets (1)	$	67

Accrued expenses and other liabilities	$	44
Other long-term liabilities	28
Total finance lease liabilities	$	72

Operating Leases
Operating lease right-of-use assets	$	12,999

Accrued expenses and other liabilities	$	2,788
Operating lease liabilities, non-current	12,708
Total operating lease liabilities	$	15,496

Weighted average remaining lease term
Finance leases	1.56 years
Operating leases	5.45 years
Weighted average discount rate
Finance leases	4.29		%
Operating leases	4.95		%

_______________________

(1)Amounts included in other long-term assets within the consolidated statements of financial condition.

Maturities of lease liabilities were as follows:


Twelve month period ending March 31,	Finance Leases		Operating Leases
	(in thousands)
2023	$	47	$	3,524
2024	27		3,292
2025	—		3,171
2026	—		2,906
2027	—		2,871
Thereafter	—		1,924
Total lease payments	74		17,688
Less imputed interest	(2)		(2,192)
Total lease liabilities	$	72	$	15,496

Note ~~7—Accrued Expenses and Other Liabilities~~

~~Accrued expenses and other liabilities as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~consisted of the following:~~

September 30, 2017 December 31, 2016
(in thousands)
Accrued bonus and sales commissions $ 11,471
$ 18,342
Accrued payroll and benefits 3,705
3,430
Accrued sub-transfer agent fees 3,000
4,785
Dividends payable 1,203
2,397
Amounts payable under tax receivable agreement 2,475
2,364
Other accruals and liabilities 3,755
3,797
Total accrued expenses and other liabilities $ 25,609
$ 35,115

~~Note 8—~~9—Commitments and Contingencies

The Company may from time to time enter into agreements that contain certain representations and warranties and which provide general indemnifications. The Company may also serve as a guarantor of such ~~obligations of one or more of the Manning & Napier Group entities.~~obligations. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects any risk of liability associated with such guarantees to be remote.

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

As an investment adviser to a variety of investment products, the Company and its affiliated broker-dealer are subject to routine reviews and inspections by the SEC and the Financial Industry Regulatory Authority, Inc.~~, National Futures Association and U.S. Commodity Futures Trading Commission.~~ From time to time the Company may also be subject to claims, or be involved in various legal proceedings, arising in the ordinary course of its business and ~~be subject to~~ other contingencies. The Company does not believe that the outcome of any of these reviews, inspections or other legal proceedings will have a material impact on its consolidated financial statements; however, litigation is subject to many uncertainties, and the outcome of individual litigated matters is difficult to predict. The Company will establish accruals for matters that are probable, can be reasonably estimated, and may take into account any related insurance recoveries to the extent of such recoveries. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, the Company has not accrued for any such claims, legal proceedings, or other contingencies.

The Company has made customary representations and warranties in the Merger Agreement with Callodine (Note 1). The Merger Agreement also contains customary covenants and agreements, including covenants and agreements relating to the conduct of the Company’s business between the date of the signing of the Merger Agreement and the closing of the transactions contemplated under the Merger Agreement.

The Merger Agreement contains certain termination rights for the Company and Callodine, including the right of the Company to terminate the Merger Agreement to accept a superior proposal, subject to specified limitations, and provides that, upon termination of the Merger Agreement by the Company, the Company will be required to pay Callodine a termination fee of $8,790,000 or upon termination of the Merger Agreement by Callodine, Callodine will be required to pay the Company a termination fee of $15,070,000 in each case under circumstances.

In addition to the foregoing termination rights, and subject to certain limitations, either party may terminate the Merger Agreement if the Merger is not consummated by October 1, 2022.

Note 9—10—Earnings per Common Share

Basic earnings per share (“basic EPS”) is computed ~~using~~by dividing net income by the ~~two-class method~~weighted average number of shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect during the reporting period to ~~determine~~other potentially dilutive shares outstanding.

Net income attributable to noncontrolling interests on the statements of operations represents the portion of earnings attributable to the economic interest of Manning & Napier Group held by the noncontrolling interests (Note 4). For periods in which the outstanding Class A Units of Manning & Napier Group are dilutive to the Company's earnings per share, the calculation of diluted earnings per share also takes into account the incremental net income that would be available to Class A common stock upon the conversion of Class A Units into Class A common stock. ~~The two-class method includes an earnings allocation formula that determines earnings per share~~

Weighted average shares outstanding for ~~each participating security according~~periods prior to ~~dividends declared and undistributed earnings for~~January 1, 2022 reflect the ~~period. The~~impact of the Company's restricted Class A common shares that had been granted under ~~the Equity Plan have~~a prior equity plan. These awards had non-forfeitable dividend rights during their vesting period and ~~are~~were therefore considered participating securities under the two-class ~~method. Under the two-class~~ method the Company's net income available to Class A common stock is reduced by the amount allocated to the unvested restricted Class A common stock. Basic EPS is calculated by dividing net income available to Class A common stock by the weighted average numberfor purposes of ~~common shares outstanding during the period.~~

~~Diluted~~computing both basic and diluted earnings per share (“diluted EPS”) is computed under the more dilutive of either the treasury method or the two-class method. For the diluted calculation, the weighted average number of common shares outstanding during the period is increased by the assumed conversion into Class A common stock of the unvested equity awards and the exchangeable units of Manning & Napier Group, to the extent that such conversion would dilute earnings per share.in those periods.

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

The following is a reconciliation of the income and share data used in the basic and diluted ~~earnings per share~~EPS computations for the three ~~and~~ ~~nine~~ months ended~~September 30, 2017~~ March 31, 2022 and ~~2016~~ ~~under~~2021:


	Three months ended March 31,
		2022		2021
		(in thousands, except share data)
Numerator:
Net income attributable to controlling and noncontrolling interests		$	1,224	$	5,964
Less: net income attributable to noncontrolling interests		38		724
Net income attributable to Manning & Napier, Inc.		$	1,186	$	5,240
Less: allocation to participating securities		—		38
Net income available to Class A common stock for basic EPS		$	1,186	$	5,202
Plus: reallocation of net income attributable to participating securities		—		5

Net income available to Class A common stock for diluted EPS		$	1,186	$	5,207

Denominator:
Weighted average shares of Class A common stock outstanding - basic		18,988,573		17,026,500
Dilutive effect of outstanding equity awards		2,563,364		3,246,843

Weighted average shares of Class A common stock outstanding - diluted		21,551,937		20,273,343
Net income available to Class A common stock per share - basic		$	0.06	$	0.31
Net income available to Class A common stock per share - diluted		$	0.06	$	0.26

Performance-based stock options are excluded from the ~~two-class method:~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
(in thousands, except share data)
Net income attributable to controlling and noncontrolling interests $ 11,852
$ 19,985
$ 42,955
$ 63,867
Less: net income attributable to noncontrolling interests 10,331
17,727
37,852
56,586
Net income attributable to Manning & Napier, Inc. $ 1,521
$ 2,258
$ 5,103
$ 7,281
Less: allocation to participating securities 83
158
288
480
Net income available to Class A common stock $ 1,438
$ 2,100
$ 4,815
$ 6,801

Weighted average shares of Class A common stock outstanding - basic 14,249,347
14,042,880
14,135,288
13,916,721
Dilutive effect of unvested equity awards 23,388
132,441
106,354
256,562
Dilutive effect of exchangeable Class A Units 63,937,284
—
—
—
Weighted average shares of Class A common stock outstanding - diluted 78,210,019
14,175,321
14,241,642
14,173,283
Net income available to Class A common stock per share - basic $ 0.10
$ 0.15
$ 0.35
$ 0.49
Net income available to Class A common stock per share - diluted $ 0.10
$ 0.15
$ 0.35
$ 0.48

~~The Company’s Class B common stock represents voting interests and does not participate in the earnings~~calculation of ~~the Company. Accordingly, there is no basic or~~ diluted EPS ~~related to~~for periods in which the ~~Company’s Class B common stock.~~associated market condition has not yet been achieved. As such, for the three months ended March 31, 2021, 288,000 unvested performance-based stock options were excluded from the calculation of diluted EPS.

For ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2017, 790,000~~March 31, 2021, 232,216 unvested equity awards were excluded from the calculation of diluted earnings per common share because the effect would have been anti-dilutive. For both the three and nine months ended September 30, 2016, 990,000 unvested equity awards were excluded from the calculation of diluted earnings per common shareEPS because the effect would have been anti-dilutive.

At ~~September 30, 2017~~March 31, 2022, and 2021 there were ~~63,931,065~~428,812 and 2,021,781 Class A Units of Manning & Napier Group outstanding, respectively, which, subject to certain restrictions, may be exchangeable for up to an equivalent number of shares of the Company's Class A common stock. These units were not included in the calculation of diluted earnings per common share for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2022 or for the three months ended March 31, 2021 because the effect would have been anti-dilutive.

At September 30, 2016 there were 65,784,571 Class A Units of Manning & Napier Group outstanding, which were not included in the calculation of diluted earnings per common share for the three and nine months ended September 30, 2016, because the effect would have been anti-dilutive.

Note ~~10—Equity Based~~11—Equity-Based Compensation

The Equity Plan was adopted by the Company's board of directors and approved by ~~stockholders~~shareholders prior to the consummation of the Company's 2011 initial public offering. ~~Under the Equity Plan, a~~A total of 13,142,813 equity interests ~~are~~were authorized for issuance, ~~and may~~eligible to be issued in the form of Class A common stock, restricted stock units, stock options, units of Manning & Napier Group, or certain classes of membership interests in the Company which may convert into units of Manning & Napier Group.

The Equity Plan expired in November 2021. As such, at March 31, 2022, there were no awards available for issuance pursuant to the Equity Plan.The following table summarizes ~~the award~~ activity ~~for the~~ ~~nine months ended September 30, 2017~~related to awards of restricted stock and restricted stock units (collectively, "stock awards") under the Equity ~~Plan:~~Plan for the three months ended March 31, 2022:


	Stock Awards	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	3,421,611	$	2.90
Granted	—	$	—
Vested	(581,595)	$	1.57
Forfeited	(19,737)	$	1.57
Outstanding at March 31, 2022	2,820,279	$	3.19

The weighted average fair value of stock awards granted during the three months ended March 31, 2021 was $6.04, based on the closing sale price of the Company's Class A common stock as reported on the New York Stock Exchange on the date of grant, and, if not entitled to dividends or dividend equivalents during the vesting period, reduced by the present value of such amounts expected to be paid on the underlying shares during the requisite service period.

Restricted
Stock Awards
Weighted Average Grant Date Fair Value
Stock awards outstanding at January 1, 2017 1,207,788
$ 12.56
Granted 70,399
$ 5.55
Vested (276,064 ) $ 12.41
Forfeited (150,000 ) $ 12.20
Stock awards outstanding at September 30, 2017 852,123
$ 12.09

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022 and 2021, the Company recorded approximately ~~$0.3~~$0.5 million and ~~$1.7~~$1.2 million, respectively, of compensation expense related to stock awards under the Equity Plan. ~~For~~The aggregate intrinsic value of stock awards that vested during each of the three ~~and nine~~ months ended ~~September 30, 2016, the Company recorded~~March 31, 2022 and 2021 was approximately ~~$0.4~~$4.6 million and ~~$2.5~~$0.5 million, ~~respectively, of compensation expense related to awards under the Equity Plan.~~respectively. As of ~~September 30, 2017,~~March 31, 2022, there was unrecognized compensation expense of approximately $6.9 million related to ~~Equity Plan~~stock awards, ~~of approximately $5.8 million,~~ which the Company expects to recognize over a weighted average period of approximately ~~3.5~~3.4 years.

~~During~~A summary of activity under the ~~nine~~Equity Plan related to stock option awards during the three months ended ~~September 30, 2017 and 2016,~~March 31, 2022 is presented below:


	Stock Option Awards	Weighted Average Exercise Price		Weighted Average Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2022	500,000	$	2.01
Granted	—	$	—
Exercised	—	$	—
Forfeited	—	$	—
Outstanding at March 31, 2022	500,000	$	2.01	3.4	$	3,550
Exercisable at March 31, 2022	500,000	$	2.01	3.4	$	3,550

For the three months ended March 31, 2021, the Company recorded approximately $0.1 million of compensation expense related to stock options under the Equity Plan. As of March 31, 2022, there was no unrecognized compensation expense related to stock options.

In connection with the vesting of restricted stock units during the three months ended March 31, 2022, the Company withheld a total of ~~69,597 and 111,729 restricted~~211,343 shares ~~respectively, as a result~~ of ~~net share settlements~~Class A common stock to satisfy approximately $1.7 million of employee income tax withholding obligations. The Company paid approximately $0.3 million and $1.0 million in employee tax withholding obligations related to these settlements during the nine months ended September 30, 2017 and 2016, respectively.requirements. These net share settlements had the effect of shares repurchased and retired by the Company, as they reduced the total number of Class A common shares outstanding.

Note ~~11—~~12—Income Taxes

The Company is comprised of entities that have elected to be treated as either a limited liability company ("LLC") or a “C-Corporation". As such, the entities functioning as ~~LLC’s~~LLCs are not liable for or able to benefit from U.S. federal and most state income taxes on their earnings, and earnings (losses) will be included in the personal income tax returns of each entity’s unit holders. The entities functioning as C-Corporations are liable for or able to benefit from U.S. federal and state and local income taxes on their earnings and losses, respectively.

In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances at each interim period. On a quarterly basis, the estimated annual effective tax rate is adjusted, as appropriate, based upon changes in facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and at each interim period thereafter.

The Company’s income tax provision (benefit) and effective tax rate were as follows:


	Three months ended March 31,
	2022			2021
	(in thousands)
Income before provision for (benefit from) income taxes	$	478		$	6,667
Effective tax rate	(156.1)		%	10.5		%
Provision for (benefit from) income taxes	(746)			703
Provision for income taxes at statutory rate	100			1,400
Difference between tax at effective vs. statutory rate	$	(846)		$	(697)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
(in thousands)
Earnings from continuing operations before income taxes $ 12,591
$ 21,550
$ 46,279
$ 68,651
Effective tax rate 5.9 % 7.3 % 7.2 % 7.0 %
Provision for income taxes 739
1,565
3,324
4,784
Provision for income taxes @ statutory rate 4,281
7,543
15,735
24,028
Difference between tax at effective vs. statutory rate $ (3,542 ) $ (5,978 ) $ (12,411 ) $ (19,244 )

~~For the~~ ~~three and nine months endedSeptember 30, 2017~~ ~~and~~ ~~2016, the difference between the Company’s recorded~~The provision ~~and the provision that would result from applying the U.S. statutory rate of 34% and 35%, respectively, is primarily~~for (benefit from) income taxes includes a benefit attributable to the ~~benefit resulting from the~~ fact that ~~a significant portion of~~ the Company’s operations include a series of flow-through entities which are generally not subject to federal and most state income taxes. Accordingly, a portion of the Company’s earnings are not subject to corporate level taxes. The Company recognized a reduced benefit from flow-through entities during the three months ended March 31, 2022 compared to March 31, 2021 due to a higher portion of Manning & Napier Group's earnings subject to taxation at the C-Corporation level attributed to Manning & Napier Inc.'s increased ownership of Manning & Napier Group as of March 31, 2022 compared to March 31, 2021.

Manning & Napier, Inc.

Notes to Consolidated Financial Statements (Continued)

The effective rate during the three months ended March 31, 2022 and 2021 is lower than the statutory rate of 21% due to the incremental tax benefits realized from the vesting of restricted stock units during the first quarters of 2022 and 2021 and exercise of stock options during the first quarter of 2021, partially offset by the impacts from permanent differences between book and tax income, including but not limited to Section 162(m) of the IRC which limits the annual amount of deductible compensation.

Note ~~12—~~13—Related Party Transactions

Transactions with noncontrolling members

From time to time, the Company may be asked to provide certain services, including accounting, legal and other administrative functions for the noncontrolling members of Manning & Napier Group. While immaterial, the Company has not received any reimbursement for such services.

The Company manages the personal funds of certain of the Company's executive officers ~~including William Manning.~~and directors and/or their affiliated entities. Pursuant to the respective investment management agreements, in some instances the Company ~~waives~~may waive or ~~reduces~~reduce its regular advisory fees for these ~~accounts and personal funds utilized to incubate products.~~accounts. The aggregate value of the fees earned was ~~approximately $0.2 million and the value of the fees waived was approximately $0.1 million for the~~ ~~nine months ended September 30, 2017. The aggregate value of the fees earned was approximately $0.1 million and the value of the fees waived was~~ less than $0.1 million for each of the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2022 and 2021. No fees were waived for the three months ended March 31, 2022 and 2021.

Affiliated fund transactions

The Company earns investment advisory fees, distribution fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. ~~The aggregate value of revenue~~Fees earned ~~was~~for advisory and distribution services provided were approximately ~~$19.4 million and $64.6~~$10.1 million for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2022, and ~~$28.8 million and $86.7~~$9.9 million for the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2021. Fees earned for administrative services provided were approximately $0.3 million for the three months ended March 31, 2022, and $0.2 million for the three months ended March 31, 2021, respectively. AsSee Note 3 for disclosure of September 30, 2017 and December 31, 2016, amounts due from the affiliated mutual funds was approximately $6.2 million and $6.8 million, respectively. As of September 30, 2017 and December 31, 2016, amounts due from affiliated mutual funds and collective investment ~~trusts was approximately $2.1 million and $4.5 million, respectively.~~

~~Manning & Napier, Inc.~~

~~Notes to Consolidated Financial Statements (Continued)~~

trusts.

The Company incurs certain expenses on behalf of the collective investment trusts and has contractually agreed to limit its fees and reimburse expenses to limit operating expenses incurred by certain affiliated fund series. The aggregate value of fees waived and expenses reimbursed to, or incurred for, affiliated mutual funds and collective investment trusts ~~was $4.1 million and $3.4~~were approximately $0.6 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022, and ~~2016, respectively.~~$0.5 million for the three months ended March 31, 2021.

Note ~~13—~~14—Subsequent Events

~~Distributions and dividends~~Distribution

On ~~October 24, 2017,~~April 20, 2022, the Company's Board of Directors approved a $2.0 million distribution from Manning & Napier Group to Manning & Napier and the noncontrolling interests of Manning & Napier ~~Group. The amount~~Group, of which less than $0.1 million was paid to the ~~distribution will be based~~noncontrolling members of Manning & Napier Group.

Dividend on ~~earnings for~~Class A common stock

On April 20, 2022, the ~~quarter ended December 31, 2017, with a maximum amount of $10.0 million. Concurrently, the~~Company's Board of Directors declared ~~an $0.08~~a $0.05 per share dividend to the holders of Class A common stock. The dividend is payable on or about ~~February 1, 2018~~May 20, 2022 to shareholders of record as of ~~January 15, 2018.~~May 6, 2022.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations

This report contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which reflect ~~our~~the views of Manning & Napier, Inc. ("we," "our," or "us") with respect to, among other things, our future operations and financial performance. Words like "believes," "expects," "may," "estimates," "will," "would," "should," "could," "intends," "likely," ~~"plans,~~"outlook," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, are used to identify forward-looking statements, although not all forward-looking statements contain these words.

Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, there can be no assurance that our actual results will not differ materially from what we expect or believe. Some of the factors that could cause our actual results to differ materially from our expectations or beliefs are disclosed in the “Risk Factors” section, as well as other sections, of our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, which include, without limitation: the delay in or failure to consummate the merger with Callodine Group, LLC ("Callodine"); changes in our business related to the merger with Callodine; changes in securities or financial markets or general economic ~~conditions;~~conditions, including as a result of the COVID-19 pandemic or political instability and uncertainty, such as the Russian invasion of Ukraine; inflation; changes in interest rates; a decline in the performance of our products; client sales and redemption activity; any loss of an executive officer or key personnel; ~~changes in our business related to strategic acquisitions and other transactions;~~ and changes of government policy or regulations. All forward-looking statements speak only as of the date on which they are made and we undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Our Business

~~We are~~Manning & Napier, Inc. is an independent investment management firm that provides our clients with a broad range of financial solutions and investment ~~solutions, as well as a variety of consultative services that complement our investment process.~~strategies. Founded in 1970 ~~we offer U.S.~~ and ~~non-U.S equity, fixed income, and a range of blended asset portfolios, such as life cycle funds and exchange-traded fund ("ETF")-based portfolios. We~~headquartered in Fairport, New York, we serve a diversified client base of ~~high net worth~~high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. Our investment strategies offer equity, fixed income and a range of blended asset portfolios, including life cycle funds.

Impact of COVID-19

We are continuing to address the challenges of COVID-19 by protecting the health and well-being of our employees, while servicing our clients and leveraging technology to fully support our business needs in a primarily digital manner.

For further discussion regarding the potential future impacts of COVID-19 and related economic conditions on the Company's financial statements, capital and liquidity, and business operations, ~~are based principally in~~see the ~~United States, with~~"Risk Factors" section of our ~~headquarters located in Fairport, New York.~~Annual Report on Form 10-K.

Market Developments

~~Financial~~U.S. equity markets ~~specifically~~started the year from a place of all-time highs before stumbling out of the gate and hitting correction territory in early-February. Investors reacted with caution to a combination of rising inflation, tightening financial conditions, and the Russia-Ukraine invasion. Equity markets later rallied, recovering some of the lost ground, but remain off their highs for the year. Overall, market valuations softened incrementally due to market weakness and robust earnings growth; however, equities remain expensive by longer-term historical standards.

Fixed income performance was also challenged as short- to intermediate-term rates rapidly rose, inverting segments of the yield curve. An inversion does not guarantee a recession, but it is of concern as yield curve inversions have historically occurred late in economic cycles. Additionally, inflation is adding further pressure on fixed income as it continues to measure well above levels of recent cycles. In response, the Federal Reserve implemented its first rate hike in March, as well as suggested a quicker pace of monetary policy tightening going forward, signifying a later start to policy normalization. It remains to be seen whether the Fed will need to be more aggressive to adequately address the inflation problem.

As the economy progresses into a later cycle phase, we will continue monitoring the ongoing logistical hurdles constraining supply chains, wage growth data as it reflects a hotter labor market, and corporate credit spreads, which remain compressed due to excess liquidity and generally low rates. The building risks and pressures outlined above, paired with the current ~~ten year bull~~state of the market ~~have had a significant impact on asset flows~~and economy, has led our outlook to become incrementally more cautious, and we are de-risking where applicable.

Table of Contents

Business Updates

On March 31, 2022, the Company entered into an agreement (the "Merger Agreement") under which the Company will go private and be acquired by Callodine, with the Company continuing as the surviving corporation (the "Merger").

Pursuant to the Merger Agreement, each outstanding share of common stock of the Company and Manning & Napier Group Holdings outstanding units will be converted into the right to receive from Callodine $12.85 in cash. The proposed acquisition is expected to close in the third quarter of 2022, contingent upon shareholder approval and other customary closing conditions. For additional information about the proposed Merger and the ~~market value of our assets under management ("AUM"). Though our relative returns have been competitive for~~Merger Agreement, please see the ~~nine months ended September 30, 2017~~Company’s Current Report on Form 8-K filed with the U.S. Securities and have helped repair our longer-term track records, the one, three, and five year annualized returns for many of our key investment strategies have trailed their related benchmarks in recent years. In addition, we have experienced increased competition as a result of lower fee passive investment products which have gained popularity over the last decade, such as index funds and ETFs.

As a result of these factors, we have experienced net client outflows since 2013 resulting in an overall decrease in our AUM, which is likely to continue in the near term, though at a slower rate of decrease. Additionally, we expect that AUM will decrease approximately $0.4 billion in the fourth quarter of 2017 as a result of the anticipated sale of the Rainier Investment Management U.S. product set. Our ability to increase AUM in the future will depend in partExchange Commission on our ability to execute our investment strategies to achieve competitive investment returns, and on our ability to successfully distribute our products and services, including those that have been areas of strategic focus for us.April 1, 2022.

Our strategic initiatives are focused on gathering and retaining client assets. In response to industry trends and increasing fee pressure from passive strategies offered by our competitors, management is evaluating fees across our product set, including restructuring fees across many of our mutual fund and collective trust products. Management fee reductions and corresponding distribution and shareholder servicing expense reductions for the various series of our funds will be rolled out beginning during the fourth quarter of 2017 and continuing through the first half of 2018. Given the overall pressure on fees that all active managers are facing, we believe that bringing our fund fees to a more competitive level will enhance our ability to attract additional assets in the future.

Additionally, we are actively marketing our Custom Solution program. Custom Solution is a competitively priced consultative advisory service in which we tailor an allocation among proprietary and non-proprietary investment products and vehicles to meet a client’s unique investment objectives and cash flow needs. Direct advisory services such as Custom Solution are an essential part of our strategy to pursue direct relationships with clients built on managing risk and meeting investment objectives over market cycles.

~~Our Products~~Solutions

We derive substantially all of our revenues from investment management fees earned from providing advisory services to separately managed accounts and to mutual funds and collective investment trusts—including those offered by ~~MNA,~~Manning & Napier Advisors, LLC ("MNA"), the Manning & Napier Fund, Inc. (the "Fund"), Exeter Trust Company, and Rainier Investment ~~Management.~~

Management, LLC ("Rainier").

Our separate accounts are primarily distributed through our ~~Direct Channel,~~wealth management sales channel, where our ~~representatives~~financial consultants form relationships with ~~high net worth~~high-net-worth individuals, ~~middle market institutions or large institutions that are working with a consultant.~~endowments, foundations, and retirement plans. To a lesser extent, we also obtain a portion of our separate account distribution via third parties, either through our ~~Intermediary Channel~~intermediary sales channel, where national brokerage firm representatives or independent financial advisors select our separate account strategies for their clients, or through our ~~Platform/Sub-Advisory Channel,~~platform/sub-advisor relationships, where unaffiliated registered investment advisors approve our strategies for their product platforms. Our separate account ~~products~~strategies are a primary driver of our blended asset portfolios for ~~high net worth,~~high-net-worth, middle market institutional clients and financial intermediaries. In contrast, larger institutions and unaffiliated registered investment advisor platforms are a driver of our separate account equity portfolios.

Our mutual funds and collective investment trusts are distributed primarily through financial intermediaries, including brokers, financial advisors, retirement plan advisors and platform relationships. We also distribute our mutual fund and collective investment trusts through our ~~direct sales~~institutional representatives, ~~in particular~~particularly within the defined contribution, Taft-Hartley, and institutional marketplace. Our mutual fund and collective investment trust ~~products~~strategies are an important driver of ~~both~~ our blended asset class and single asset class portfolios.

Table of Contents

Assets Under Management

Our ~~AUM was $26.5 billion~~sales efforts distinctly separate the Wealth Management clients to which we deliver holistic solutions, including high-net-worth families, endowments and foundations, and small and mid-sized business, from our Institutional and Intermediary clients, including third party advisors, platforms and consultants, as ~~of September 30, 2017.~~well as larger institutions and Taft-Hartley clients. The table below reflects the estimated composition of our assets under management ("AUM") as of March 31, 2022, by sales channel and investment portfolio:


	March 31, 2022
	Blended Asset			Equity			Fixed Income			Total
	(dollars in millions)
Total AUM
Wealth Management	$	7,980.2		$	972.9		$	221.7		$	9,174.8
Institutional and Intermediary	6,132.1			4,479.1			863.2			11,474.4

Total	$	14,112.3		$	5,452.0		$	1,084.9		$	20,649.2
Percentage of AUM
Wealth Management	38		%	5		%	1		%	44		%
Institutional and Intermediary	30		%	22		%	4		%	56		%

Total	68		%	27		%	5		%	100		%
Percentage of portfolio by channel
Wealth Management	57		%	18		%	20		%	44		%
Institutional and Intermediary	43		%	82		%	80		%	56		%

Total	100		%	100		%	100		%	100		%
Percentage of channel by portfolio
Wealth Management	87		%	11		%	2		%	100		%
Institutional and Intermediary	53		%	39		%	8		%	100		%

Our wealth management channel represented 44% of our total AUM as of March 31, 2022. Blended portfolios are the most significant portion of wealth management assets, representing 87%, while equity and fixed income portfolios represent 11% and 2%, respectively.

Our institutional and intermediary channel represented 56% of our total AUM as of March 31, 2022. Blended portfolios are also the largest portion of institutional and intermediary assets at 53% of AUM, followed by ~~vehicle~~equity and fixed income portfolios at 39% and 8%, respectively.

As of March 31, 2022, blended portfolios account for 68% of our total AUM at $14.1 billion, a 6% decrease from December 31, 2021 when blended assets were $15.1 billion. Blended portfolio AUM is ~~illustrated~~split across distribution channels, with 57% in wealth management and 43% in institutional and intermediary. Equity portfolios account for 27% of our total AUM, at $5.5 billion, a 14% decrease from December 31, 2021 when equity portfolios were at $6.4 billion. Of equity portfolio AUM, 82% is in the ~~table below:~~

September 30, 2017
AUM - by investment vehicle and portfolio
Blended
Asset
Equity Fixed Income Total
(in millions)
Separately managed accounts $ 10,728.4
$ 5,412.4
$ 1,219.5
$ 17,360.3
Mutual funds and collective investment trusts 5,651.7
3,425.0
108.8
9,185.5
Total $ 16,380.1
$ 8,837.4
$ 1,328.3
$ 26,545.8

~~The composition of our separately managed accounts as of~~ ~~September 30, 2017, by~~institutional and intermediary channel, and ~~portfolio,~~18% is ~~set forth~~ in the ~~table below:~~wealth management channel. Fixed income portfolios account for 5% of total AUM at $1.1 billion, a 1% increase from December 31, 2021. The majority of fixed income assets come through the institutional and intermediary channel at 80%, and 20% in the wealth management channel.

September 30, 2017

Blended
Asset
Equity Fixed Income Total
(dollars in millions)
Separate account AUM
Direct Channel $ 8,167.8
$ 3,789.4
$ 1,081.9
$ 13,039.1
Intermediary Channel 2,554.8
717.5
137.6
3,409.9
Platform/Sub-advisor Channel 5.8
905.5
—
911.3
Total $ 10,728.4
$ 5,412.4
$ 1,219.5
$ 17,360.3
Percentage of separate account AUM
Direct Channel 47 % 22 % 6 % 75 %
Intermediary Channel 15 % 4 % 1 % 20 %
Platform/Sub-advisor Channel 0 % 5 % — % 5 %
Total 62 % 31 % 7 % 100 %
Percentage of portfolio by channel
Direct Channel 76 % 70 % 89 % 75 %
Intermediary Channel 24 % 13 % 11 % 20 %
Platform/Sub-advisor Channel 0 % 17 % — % 5 %
Total 100 % 100 % 100 % 100 %
Percentage of channel by portfolio
Direct Channel 63 % 29 % 8 % 100 %
Intermediary Channel 75 % 21 % 4 % 100 %
Platform/Sub-advisor Channel 1 % 99 % — % 100 %

~~Our separate accounts~~During the three months ended March 31, 2022, our wealth management sales channel contributed ~~47%~~33% of our total gross client inflows, ~~for~~while our institutional and intermediary channel contributed 67%. Of the ~~nine months ended September 30, 2017~~ ~~and represented~~ ~~65%~~ ~~of our total AUM as of~~ ~~September 30, 2017~~.

Our separate account business has historically been driven primarily by our Direct Channel, where sales representatives form a relationship with high net worth investors, middle market institutions, and large institutional clients working$0.7 billion in ~~conjunction with a consultant. The Direct Channel contributed 66% of the total~~ gross client inflows, for our separate account business for the nine months ended September 30, 2017 and represented 75% of our total separate account AUM as of September 30, 2017. We anticipate the Direct Channel to continue to be the largest driver of new separate account business going forward, given the Direct Channel’s high net worth and middle market institutional client-type focus.

~~During the nine months ended September 30, 2017,~~ blended asset portfolios represented ~~68% of the separate account gross client inflows from the Direct Channel,~~59%, while equity and fixed income portfolios ~~each~~ represented ~~16%. As of September 30, 2017, blended asset~~24% and ~~equity portfolios represented 63% and 29%~~17%, respectively, of total Direct Channel separate account AUM, while our fixed income portfolios were 8%. We expect our focus on individuals and middle market institutions to continue to drive interest in our blended asset class portfolios, where we provide a comprehensive portfolio of stocks and bonds managed to a client’s specific investment objectives. Our relationships with larger institutions may also be a driver of growth in separately managed account equity strategies, though many of these larger institutions may seek exposure to non-U.S. equity strategies through commingled vehicles rather than separately managed accounts to limit related custody expenses.

To a lesser extent, we also obtain separate account business from third parties, including financial advisors or unaffiliated registered investment advisor programs or platforms. During the nine months ended September 30, 2017, 20% of the total gross client inflows for separate accounts came from financial advisor representatives (Intermediary Channel), and an additional 13% came from registered investment advisor platforms (Platform/Sub-advisor Channel). The Intermediary and Platform/Sub-advisor Channels represented 25% of our total separate account AUM as of September 30, 2017.

New separate account business through the Intermediary Channel flowed into both our blended asset and equity portfolios, driven by advisors’ needs to identify either a one-stop solution (blended asset portfolio) or to fill a mandate within a multi-strategy portfolio. During the nine months ended September 30, 2017, blended asset and equity portfolios represented 50% and 22%, respectively, of the separate account gross client inflows from the Intermediary Channel. As of September 30, 2017, 75% of our separate account AUM derived from financial advisors was allocated to blended asset portfolios, with 21% allocated to equity and 4% allocated to fixed income. We expect that equity and fixed income portfolios may see additional interest from financial advisors over time as more advisors structure a multi-strategy portfolio for their clients.

During the nine months ended September 30, 2017, 99% of our separate account gross client inflows from the Platform/Sub-advisory Channel were into equity portfolios. Gross client inflows through the Platform/Sub-advisor Channel are primarily directed to our equity strategies, where we are filling a specific mandate within the investment program or platform product.

Our annualized separate account retention rate across all channels was 80% during the nine months ended September 30, 2017, a decrease from our historical retention rate, which was 85% for the twelve months ended December 31, 2016.

~~The composition of our mutual fund and collective investment trust AUM as of September 30, 2017, by portfolio, is set forth in the table below:~~respectively.

September 30, 2017

Blended
Asset
Equity Fixed Income Total
(in millions)
Mutual fund and collective investment trust AUM $ 5,651.7
$ 3,425.0
$ 108.8
$ 9,185.5

~~Our mutual funds and collective investment trusts contributed~~ ~~53%~~

Table of ~~our total gross client inflows for the~~ ~~nine months ended September 30, 2017~~ ~~and represented~~ ~~35%~~ ~~of our total AUM as of~~ ~~September 30, 2017. As of~~ ~~September 30, 2017, our mutual fund and collective investment trust AUM consisted of~~ ~~62%~~ ~~from blended asset portfolios and~~ ~~37%~~ ~~from equity portfolios compared to 68% and 31% for blended asset and equity portfolios as of September 30, 2016. During the~~ ~~nine months ended September 30, 2017, 71% and 26% of the gross client inflows were attributable to blended assets and equity portfolios, respectively.~~Contents

Our mutual fund and collective investment trust business is driven by both financial intermediaries and direct sales representatives. Intermediary distribution of our mutual fund and collective investment trust vehicles is achieved via financial advisors, brokers and retirement plan advisors. Through our Intermediary Channel, we are focused on our blended asset life cycle fund vehicles given our emphasis on advisors who work with retirement plans. Our blended asset portfolios are also used by advisors seeking a multi-asset class solution for their retail clients. In addition, we are focused on equity and fixed income portfolios within the Intermediary Channel for intermediaries who wish to use our mutual funds as a component of a larger portfolio.

We also have relationships with consultants and manager research teams at platforms in order to distribute our funds within advisory programs, or through placement on platforms' approved lists of funds. To facilitate our relationships with intermediaries, we currently have approximately 285 dealer relationships. These relationships are important to our retail business as well as our 401(k) life cycle and institutional business.

Through the Direct Channel, we also form relationships with middle market and large market defined contribution plan sponsors seeking to use our life cycle mutual funds and collective investment trusts as default options on their investment menu. Our Direct Sales Representatives also distribute our equity portfolios to large institutional clients with which we have direct relationships and often, the client's consultant. We expect this channel to focus on distributing blended asset and equity portfolio funds in the future.

Results of Operations

Below is a discussion of our consolidated results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~.2021.

Components of Results of Operations

Overview

~~An important factor~~One of the most significant factors influencing ~~inflows~~net flows and ~~outflows of our~~ AUM is the investment performance of our various strategies. As an active manager, it is typical for our investment ~~approaches. Our variety~~strategies to exhibit portfolio positioning that is notably divergent from benchmarks and common market indices. We believe this is a strength of ~~stock selection~~our investment approach, although it can cause substantial performance deviations, both positive and negative, versus common benchmarks. In general, our investment processes have a preference for risk management, focusing heavily on fundamentals and valuations. Historically, we have tended to provide a degree of downside protection in adverse markets, while having participated somewhat less than fully in bull markets. Broadly speaking, we expect our investment approach to reduce volatility and create a smoother performance pattern over time, and we believe these characteristics are desirable and an attractive differentiator in our industry. As a result, the overall performance of our suite of investment strategies ~~absolute pricing discipline and active asset allocation management approach generally~~often differs from many others in the industry, potentially causing the results in specific absolute and relative return characteristics in different market environments. For example, during a fundamental-driven bull market when prices are rising alongside improving fundamentals, we are likelyof our operations to, experience positive absolute returns and competitive relative returns. However, in a more momentum-driven bull market, when prices become disconnected from underlying fundamentals, or narrow market environment where a small handful of stocks outperform the average stock, we are likely to experience positive absolute returns but lagging relative returns. Similarly, during a valuation-driven bear market, when markets experience a period of price correction following a momentum-driven bull market, we are likely to experience negative absolute returns but strong relative returns. However, in a momentum-driven bear market, which is typically characterized by broad price declines in a highly correlated market, we are likely to experience negative absolute returns and potentially lagging relative returns. Essentially, our approach is likely to do well when markets are driven by fundamentals, but lag when markets are driven primarily by momentum.at times, also diverge.

Other components impacting our operating results include:

•asset-based fee rates and changes in those rates;

•the composition of our AUM among various portfolios, vehicles and client types;

•changes in our variable costs, including incentive compensation and distribution, servicing and custody expenses, which are affected by our investment performance, level of our AUM and revenue; and

•fixed costs, including changes to base compensation, vendor-related costs and investment spending on new products.

Assets Under Management and Investment Performance

The following table reflects the indicated components of our AUM for our ~~investment vehicles~~sales channels for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~:

2021:


																	Sales Channel (4)
	Separately managed accounts			Mutual funds and collective investment trusts			Total			Separately managed accounts		Mutual funds and collective investment trusts		Total
				(in millions)
As of June 30, 2017	$	17,714.9		$	9,360.6		$	27,075.5		65	%	35	%	100	%

																	Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
																			(in millions)
As of December 31, 2021																As of December 31, 2021	$	9,776.9	$	12,765.7	$	22,542.6	43	%	57	%	100	%
Gross client inflows ⁽¹⁾	407.2			393.4			800.6									Gross client inflows (1)	242.0		486.4		728.4
Gross client outflows ⁽¹⁾	(1,383.4		)	(928.2		)	(2,311.6		)							Gross client outflows (1)	(330.0)		(1,007.8)		(1,337.8)
Market appreciation/(depreciation) & other ⁽²⁾	621.6			359.7			981.3									Market appreciation/(depreciation) & other (2)	(514.1)		(769.9)		(1,284.0)
As of September 30, 2017	$	17,360.3		$	9,185.5		$	26,545.8		65	%	35	%	100	%
As of March 31, 2022																As of March 31, 2022	$	9,174.8	$	11,474.4	$	20,649.2	44	%	56	%	100	%
Average AUM for period	$	17,707.0		$	9,294.0		$	27,001.0								Average AUM for period	$	9,381.6	$	11,949.3	$	21,330.9

As of June 30, 2016	$	20,585.0		$	15,131.2		$	35,716.2		58	%	42	%	100	%
As of December 31, 2020																As of December 31, 2020	$	8,906.4	$	11,213.0	$	20,119.4	44	%	56	%	100	%
Gross client inflows ⁽¹⁾	374.6			752.2			1,126.8									Gross client inflows (1)	224.8		401.6		626.4
Gross client outflows ⁽¹⁾	(1,226.0		)	(2,163.2		)	(3,389.2		)							Gross client outflows (1)	(305.3)		(453.5)		(758.8)
Market appreciation/(depreciation) & other ⁽²⁾	803.4			561.3			1,364.7
As of September 30, 2016	$	20,537.0		$	14,281.5		$	34,818.5		59	%	41	%	100	%

Market appreciation/(depreciation) & other (2)(3)																Market appreciation/(depreciation) & other (2)(3)	391.6		761.2		1,152.8
As of March 31, 2021																As of March 31, 2021	$	9,217.5	$	11,922.3	$	21,139.8	44	%	56	%	100	%
Average AUM for period	$	20,678.1		$	14,767.5		$	35,445.6								Average AUM for period	$	8,993.0	$	11,454.3	$	20,447.3

	Separately managed accounts			Mutual funds and collective investment trusts			Total			Separately managed accounts		Mutual funds and collective investment trusts		Total
				(in millions)
As of December 31, 2016	$	18,801.9		$	12,881.1		$	31,683.0		59	%	41	%	100	%
Gross client inflows ⁽¹⁾	1,384.3			1,554.4			2,938.7
Gross client outflows ⁽¹⁾	(5,223.1		)	(6,807.8		)	(12,030.9		)
Market appreciation/(depreciation) & other ⁽²⁾	2,397.2			1,557.8			3,955.0
As of September 30, 2017	$	17,360.3		$	9,185.5		$	26,545.8		65	%	35	%	100	%
Average AUM for period	$	18,397.8		$	10,784.9		$	29,182.7

As of December 31, 2015	$	20,735.4		$	14,706.8		$	35,442.2		59	%	41	%	100	%
Gross client inflows ⁽¹⁾	1,295.9			2,534.1			3,830.0
Gross client outflows ⁽¹⁾	(4,178.4		)	(5,694.7		)	(9,873.1		)
Acquired assets	1,234.2			1,660.1			2,894.3
Market appreciation/(depreciation) & other ⁽²⁾	1,449.9			1,075.2			2,525.1
As of September 30, 2016	$	20,537.0		$	14,281.5		$	34,818.5		59	%	41	%	100	%
Average AUM for period	$	20,584.2		$	14,724.0		$	35,308.2

________________________


~~(1)~~	~~Transfers of client assets between portfolios are included in gross client inflows and gross client outflows.~~


~~(2)~~	Market appreciation/(depreciation) and other includes investment gains/(losses) on assets under management, the impact of changes in foreign exchange rates and net flows from non-sales related activities including net reinvested dividends.

(1)Transfers of client assets between portfolios are included in gross client inflows and gross client outflows.

(2)Market appreciation/(depreciation) and other includes investment gains/(losses) on assets under management, the impact of changes in foreign exchange rates and net flows from non-sales related activities including net reinvested dividends.

Table of Contents

wealth management channel and $367.4 million in our institutional and intermediary channel. These amounts are included above in market appreciation (depreciation) and other for the three months ended March 31, 2021.

(4)AUM and gross client flows between sales channels have been estimated based upon preliminary data. For a limited portion of our mutual fund AUM, reporting by sales channel is not available at the time of this report. Such estimates have no impact on total AUM, total cash flows, or AUM by investment portfolio reported in the table above.

The following table reflects the indicated components of our AUM for our portfolios for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016:~~

2021:

Blended
Asset
Equity
Fixed
Income
Total
Blended
Asset
Equity
Fixed
Income
Total
(in millions)
As of June 30, 2017 $ 16,613.8
$ 9,094.3
$ 1,367.4
$ 27,075.5
61 % 34 % 5 % 100 %
Gross client inflows ⁽¹⁾
468.0
278.0
54.6
800.6

Gross client outflows ⁽¹⁾
(1,193.5 ) (1,014.5 ) (103.6 ) (2,311.6 )
Market appreciation/(depreciation) & other ⁽²⁾
491.8
479.6
9.9
981.3

As of September 30, 2017 $ 16,380.1
$ 8,837.4
$ 1,328.3
$ 26,545.8
62 % 33 % 5 % 100 %
Average AUM for period $ 16,538.6
$ 9,125.2
$ 1,337.2
$ 27,001.0

As of June 30, 2016 $ 21,676.8
$ 12,608.9
$ 1,430.5
$ 35,716.2
61 % 35 % 4 % 100 %
Gross client inflows ⁽¹⁾
742.8
329.1
54.9
1,126.8

Gross client outflows ⁽¹⁾
(1,628.3 ) (1,612.5 ) (148.4 ) (3,389.2 )
Market appreciation/(depreciation) & other ⁽²⁾
757.6
599.3
7.8
1,364.7

As of September 30, 2016 $ 21,548.9
$ 11,924.8
$ 1,344.8
$ 34,818.5
62 % 34 % 4 % 100 %
Average AUM for period $ 21,649.0
$ 12,412.7
$ 1,383.9
$ 35,445.6

Blended
Asset
Equity
Fixed
Income
Total
Blended
Asset
Equity
Fixed
Income
Total
(in millions)
As of December 31, 2016 $ 19,909.4
$ 10,463.9
$ 1,309.7
$ 31,683.0
63 % 33 % 4 % 100 %
Gross client inflows ⁽¹⁾
1,733.9
914.1
290.7
2,938.7

Gross client outflows ⁽¹⁾
(7,321.1 ) (4,382.1 ) (327.7 ) (12,030.9 )
Market appreciation/(depreciation) & other ⁽²⁾
2,057.9
1,841.5
55.6
3,955.0

As of September 30, 2017 $ 16,380.1
$ 8,837.4
$ 1,328.3
$ 26,545.8
62 % 33 % 5 % 100 %
Average AUM for period $ 17,917.8
$ 9,948.0
$ 1,316.9
$ 29,182.7

As of December 31, 2015 $ 22,442.4
$ 11,828.4
$ 1,171.4
$ 35,442.2
64 % 33 % 3 % 100 %
Gross client inflows ⁽¹⁾
2,571.2
972.1
286.7
3,830.0

Gross client outflows ⁽¹⁾
(4,982.2 ) (4,550.1 ) (340.8 ) (9,873.1 )
Acquired assets —
2,719.8
174.5
2,894.3

Market appreciation/(depreciation) & other ⁽²⁾
1,517.5
954.6
53.0
2,525.1

As of September 30, 2016 $ 21,548.9
$ 11,924.8
$ 1,344.8
$ 34,818.5
62 % 34 % 4 % 100 %
Average AUM for period $ 21,840.7
$ 12,167.4
$ 1,300.1
$ 35,308.2


	Portfolio
	Blended Asset		Equity		Fixed Income		Total		Blended Asset		Equity		Fixed Income		Total
			(in millions)
















As of December 31, 2021	$	15,074.1	$	6,374.4	$	1,094.1	$	22,542.6	67	%	28	%	5	%	100	%
Gross client inflows (1)	426.0		176.4		126.0		728.4
Gross client outflows (1)	(564.4)		(680.6)		(92.8)		(1,337.8)
Market appreciation/(depreciation) & other (2)	(823.4)		(418.2)		(42.4)		(1,284.0)
As of March 31, 2022	$	14,112.3	$	5,452.0	$	1,084.9	$	20,649.2	69	%	26	%	5	%	100	%
Average AUM for period	$	14,457.0	$	5,788.2	$	1,085.7	$	21,330.9

As of December 31, 2020	$	13,558.8	$	5,545.3	$	1,015.3	$	20,119.4	67	%	28	%	5	%	100	%
Gross client inflows (1)	379.8		187.6		59.0		626.4
Gross client outflows (1)	(501.2)		(200.1)		(57.5)		(758.8)

Market appreciation/(depreciation) & other (2)(3)	701.1		449.8		1.9		1,152.8
As of March 31, 2021	$	14,138.5	$	5,982.6	$	1,018.7	$	21,139.8	67	%	28	%	5	%	100	%
Average AUM for period	$	13,699.0	$	5,719.2	$	1,029.1	$	20,447.3

________________________


~~(1)~~	~~Transfers of client assets between portfolios are included in gross client inflows and gross client outflows.~~


~~(2)~~	Market appreciation/(depreciation) and other includes investment gains/(losses) on assets under management, the impact of changes in foreign exchange rates and net flows from non-sales related activities including net reinvested dividends.

(1)Transfers of client assets between portfolios are included in gross client inflows and gross client outflows.

(3)Beginning in March 2021, AUM includes assets associated with our model-delivery business, previously classified as assets under advisement. These assets totaled $429.9 million at December 31, 2020, comprised of $281.3 million in our blended asset portfolio and $148.6 million in our equity portfolio. These amounts are included above in market appreciation (depreciation) and other for the three months ended March 31, 2021.

Table of Contents

The following table summarizes the annualized returns for several of our key investment strategies and ~~the~~ relative ~~performance of the industry benchmark over the periods indicated.~~benchmarks. Since inception and over long-term periods, we believe these strategies have earned attractive returns on both an absolute and relative basis. These strategies are used across separate account, mutual fund and collective investment trust vehicles, and represent approximately 80% of our AUM as of ~~September 30, 2017.~~March 31, 2022.


Key Strategies	AUM as of September 30, 2017 (in millions)		Inception Date	Annualized Returns as of September 30, 2017 (3)						Key Strategies	AUM as of March 31, 2022 (in millions)		Inception Date	Annualized Returns as of March 31, 2022 (2)
				One Year	Three Year	Five Year	Ten Year	Market Cycle (1)	Inception					One Year	Three Year	Five Year	Ten Year	Inception
Long-Term Growth (30%-80% Equity Exposure)	$	7,440.5	1/1/1973	8.8%	4.4%	7.2%	4.7%	6.5%	9.6%	Long-Term Growth (30%-80% Equity Exposure)	$	5,711.6	1/1/1973	2.7%	11.1%	9.2%	7.9%	9.5%
Blended Benchmark: 55% S&P 500 Total Return / 45% Bloomberg Barclays Government/Credit Bond				9.9%	7.3%	8.7%	6.4%	5.4%	9.3%
Blended Index (3)										Blended Index (3)				2.6%	9.4%	8.3%	7.7%	8.8%
Core Non-U.S. Equity	$	4,242.2	10/1/1996	14.4%	3.6%	6.0%	1.6%	5.9%	7.7%	Core Non-U.S. Equity	$	465.8	10/1/1996	(4.5)%	12.1%	9.0%	5.9%	7.6%
Benchmark: ACWIxUS Index				19.6%	4.7%	7.0%	1.3%	3.8%	5.4%	Benchmark: ACWIxUS Index				(1.5)%	7.5%	6.8%	5.6%	5.3%
Growth with Reduced Volatility (20%-60% Equity Exposure)	$	3,322.9	1/1/1973	6.5%	3.4%	5.5%	4.2%	5.9%	8.8%	Growth with Reduced Volatility (20%-60% Equity Exposure)	$	2,851.3	1/1/1973	0.9%	8.9%	7.4%	6.3%	8.7%
Blended Benchmark: 40% S&P 500 Total Return / 60% Bloomberg Barclays Government/Credit Bond				7.1%	6.1%	6.9%	5.9%	5.4%	8.8%
Blended Index (4)										Blended Index (4)				0.8%	7.3%	6.6%	6.2%	8.3%
Equity-Oriented (70%-100% Equity Exposure)	$	1,513.4	1/1/1993	12.8%	5.6%	9.6%	4.9%	6.9%	10.0%	Equity-Oriented (70%-100% Equity Exposure)	$	1,560.6	1/1/1993	5.6%	15.5%	13.5%	10.9%	10.4%
Blended Benchmark: 65% Russell 3000® / 20% ACWIxUS / 15% Bloomberg Barclays U.S. Aggregate Bond				16.0%	8.4%	11.0%	6.0%	5.3%	8.6%
Blended Benchmark: 65% Russell 3000 / 20% ACWIxUS/ 15% Bloomberg U.S. Aggregate Bond										Blended Benchmark: 65% Russell 3000 / 20% ACWIxUS/ 15% Bloomberg U.S. Aggregate Bond				6.8%	13.7%	11.8%	10.8%	9.0%
Equity-Focused Blend (50%-90% Equity Exposure)	$	1,130.9	4/1/2000	10.4%	5.0%	8.2%	4.9%	7.0%	7.0%	Equity-Focused Blend (50%-90% Equity Exposure)	$	1,204.6	4/1/2000	4.2%	13.0%	10.7%	9.1%	7.7%
Blended Benchmark: 53% Russell 3000/ 17% ACWIxUS/ 30% Bloomberg Barclays U.S. Aggregate Bond				13.0%	7.4%	9.4%	5.8%	5.4%	5.4%
Blended Benchmark: 53% Russell 3000 / 17% ACWIxUS/ 30% Bloomberg U.S. Aggregate Bond										Blended Benchmark: 53% Russell 3000 / 17% ACWIxUS/ 30% Bloomberg U.S. Aggregate Bond				4.7%	11.6%	10.1%	9.3%	6.2%
Core Equity-Unrestricted (90%-100% Equity Exposure)	$	951.1	1/1/1995	14.8%	6.1%	11.4%	5.9%	7.7%	11.1%	Core Equity-Unrestricted (90%-100% Equity Exposure)	$	690.0	1/1/1995	7.0%	16.6%	14.9%	12.5%	11.7%
Blended Benchmark: 80% Russell 3000® / 20% ACWIxUS				19.0%	9.6%	12.8%	6.4%	5.1%	9.1%
Blended Benchmark: 80% Russell 3000 / 20% ACWIxUS										Blended Benchmark: 80% Russell 3000 / 20% ACWIxUS				9.2%	16.1%	13.7%	12.5%	9.8%
Core U.S. Equity	$	703.4	7/1/2000	16.1%	7.7%	12.5%	6.4%	N/A ⁽²⁾	7.5%	Core U.S. Equity	$	304.7	7/1/2000	10.7%	19.2%	17.1%	14.0%	9.4%
Benchmark: Russell 3000® Index				18.7%	10.7%	14.2%	7.6%	N/A ⁽²⁾	5.7%
Benchmark: Russell 3000										Benchmark: Russell 3000				11.9%	18.2%	15.4%	14.3%	7.6%
Conservative Growth (5%-35% Equity Exposure)	$	538.8	4/1/1992	3.6%	2.4%	3.3%	3.8%	5.2%	6.0%	Conservative Growth (5%-35% Equity Exposure)	$	1,191.3	4/1/1992	(1.6)%	5.1%	4.5%	3.9%	5.8%
Blended Benchmark:15% Russell 3000/ 5% ACWIxUS/ 80% Bloomberg Barclays U.S. Intermediate Aggregate Bond				3.8%	3.7%	3.9%	4.5%	5.0%	6.2%
Blended Benchmark: 15% Russell 3000 / 5% ACWIxUS / 80% Bloomberg U.S. Intermediate Aggregate Bond										Blended Benchmark: 15% Russell 3000 / 5% ACWIxUS / 80% Bloomberg U.S. Intermediate Aggregate Bond				(1.8)%	4.2%	4.1%	4.0%	5.9%
Aggregate Fixed Income	$	495.8	1/1/1984	0.3%	2.3%	1.8%	4.3%	4.9%	7.3%	Aggregate Fixed Income	$	184.4	1/1/1984	(3.7)%	2.3%	2.4%	2.3%	6.7%
Benchmark: Bloomberg Barclays U.S. Aggregate Bond				0.1%	2.7%	2.1%	4.3%	5.1%	7.2%
Benchmark: Bloomberg U.S. Aggregate Bond										Benchmark: Bloomberg U.S. Aggregate Bond				(4.2)%	1.7%	2.1%	2.2%	6.6%
Rainier International Small Cap	$	629.5	3/28/2012	22.1%	13.2%	15.3%	N/A ⁽²⁾	N/A ⁽²⁾	15.4%	Rainier International Small Cap	$	1,055.1	3/28/2012	(3.5)%	15.3%	12.7%	12.3%	12.3%
Benchmark: MSCI ACWIxUS Small Cap Index				19.2%	8.1%	9.7%	N/A ⁽²⁾	N/A ⁽²⁾	6%	Benchmark: MSCI ACWIxUS Small Cap Index				—%	10.2%	7.9%	7.3%	7.3%
Disciplined Value	$	372.4	11/1/2003	15.9%	9%	12.0%	8.2%	N/A ⁽²⁾	10.8%
Disciplined Value US										Disciplined Value US	$	1,326.5	1/1/2013	8.7%	11.6%	11.5%	N/A (1)	13.6%
Benchmark: Russell 1000 Value				15.1%	8.5%	13.2%	5.9%	N/A ⁽²⁾	8.4%	Benchmark: Russell 1000 Value				11.7%	13.0%	10.3%	N/A (1)	13.6%

__________________________

The market cycle performance numbers are calculated from April 1, 2000 to September 30, 2017. We believe that a full market cycle time period should contain a wide range of market conditions and usually consists of a bear market, recovery and bull market stage. Our definition of the current market cycle includes the bear market that began with an abrupt decline in the technology sector (4/1/2000 - 9/30/2002), the subsequent failed recovery (10/1/2002 - 10/31/2007), the financial crisis bear market (11/1/2007 - 2/28/2009), and the current bull market (3/1/2009 - current). The period utilized in our current market cycle may differ from periods used by other investment managers.

(1)Performance not available given the product's inception date.

(2)Key investment strategy returns are presented net of fees. Benchmark returns do not reflect any fees or expenses.

(3)Benchmark shown uses the 55/45 Blended Index from 01/01/1973-12/31/1987 and the 40/15/45 Blended Index from 01/01/1988- 3/31/2022. The 55/45 Blended Index is represented by 55% S&P 500 Total Return Index ("S&P 500") and 45% Bloomberg U.S. Government/Credit Bond Index ("BGCB"). The 40/15/45 Blended Index is 40% Russell 3000 Index ("Russell 3000"), 15% MSCI ACWI ex USA Index ("ACWxUS"), and 45% Bloomberg U.S. Aggregate Bond Index ("BAB").

(4)Benchmark shown uses the 40/60 Blended Index from 01/01/1973-12/31/1987, the 30/10/60 Blended Index from 01/01/1988-12/31/2019, and the 30/10/30/30 Blended Index from 01/01/2020 to 3/31/2022. The 40/60 Blended Index is represented by 40% S&P 500 and 60% BGCB. The 30/10/60 Blended Index is represented by 30% Russell 3000, 10% ACWxUS, and 60% BAB. The 30/10/30/30 Blended Index is represented by 30% Russell 3000, 10% ACWxUS, 30% BAB, and 30% Intermediate Aggregate Bond Index.

Our revenues primarily consist of investment management fees earned from managing our clients’ AUM. We earn our investment management fees as a percentage of our clients’ AUM either as of a specified date or on a daily basis. Our investment management fees can fluctuate based on the average fee rate for our investment management products, which are affected by the composition of our AUM among various portfolios and investment vehicles.

~~The Company serves~~

We serve as the investment adviser for Manning & Napier Fund, Inc., ~~Rainier Investment Management Mutual Funds,~~ Exeter Trust Company Collective Investment Trusts and Rainier Multiple Investment Trust. The mutual funds are open-end mutual funds that primarily offer no-load share classes designed to meet the needs of a range of institutional and other investors. Exeter Trust Company, an affiliated New Hampshire-chartered trust company and Rainier Multiple Investment Trust sponsor collective investment trusts for qualified retirement plans, including 401(k) plans. These mutual funds and collective investment trusts comprised ~~$9.2~~$5.7 billion,, or ~~35%~~28%, of our AUM as of ~~September 30, 2017~~.March 31, 2022. MNA and Rainier also serve as the investment advisor to all of our separately managed accounts, managing ~~$17.4~~$14.9 billion,, or ~~65%~~72%, of our AUM as of ~~September 30, 2017~~,March 31, 2022, including assets managed as a sub-advisor to pooled investment vehicles. For the period ended ~~September 30, 2017~~March 31, 2022 approximately ~~97%~~98% of our revenue was earned from clients located in the United States.

In response to industry trends and increasing fee pressure from passive strategies offered by our competitors as well as the anticipated impact of regulatory changes, management is in the midst of an effort to restructure fees across our fund product set. We ~~anticipate that the majority of the financial impacts, including reduced management fees and~~earn distribution and servicing ~~charges, will occur in the first half~~fees for providing services to our affiliated mutual funds. Revenue is computed and earned daily based on a percentage of ~~2018~~AUM.

We earn custodial service fees for administrative and ~~the impact on our overall revenue margins will vary depending on the business mix at the time~~safeguarding services performed by Exeter Trust Company. Fees are calculated as a percentage of the ~~fee change. Given the overall pressure on~~client's market value with additional fees ~~that all active managers are facing, we believe that bringing our fund fees to a more competitive level will enhance our ability to attract additional assets in the future.~~for certain transactions.

Our largest operating expenses are employee compensation and related costs, and to a lesser degree, distribution, servicing and custody expenses, discussed further below, with a significant portion of these expenses varying in a direct relationship to our absolute and relative investment management performance, as well as AUM and revenues. We review our operating expenses in relation to the investment market environment and changes in our revenues. However, ~~we are generally willing~~the strength of our balance sheet has historically provided us the flexibility to make the expenditures as necessary ~~even when faced with declining rates of growth in revenues in order~~ to support our investment products, our client service levels, strategic initiatives and our long-term value.

•Compensation and related costs. Employee compensation and related costs represent our largest expense, including employee salaries and benefits, incentive compensation to investment and sales professionals, ~~and equity-based~~ compensation issued under our ~~equity compensation~~long-term incentive plan. These costs are affected by changes in the employee headcount, the mix of existing job descriptions, competitive factors, the addition of new skill sets and variations in the level of our AUM and ~~revenues, changes in our stock price reflected in our share-based compensation and/or the number of awards issued.~~revenues. In addition, these costs are impacted by the amount of compensation granted under our equity plan and the amount of deferred cash awards granted under our long-term incentive plan. Incentive compensation for our research team considers the cumulative impact of both absolute and relative investment performance over ~~the trailing one-, two- and three-year~~historical time periods, with more weight placed on the recent periods. As such, incentive compensation paid to our research team will vary, in part, based on absolute and relative investment performance.



Delaware		45-2609100
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

290 Woodcliff Drive ~~Fairport, New York~~		~~14450~~
Fairport,	New York	14450
(Address of principal executive offices)		(Zip Code)



Class		Outstanding at ~~November 3, 2017~~May 5, 2022
Class A common stock, $0.01 par value per share		~~15,039,347~~
~~Class B common stock, $0.01 par value per share~~	~~1,000~~19,124,332



		Page
Part I	Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Financial Condition as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021	1
	Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021	2
	Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31,2022 and ~~2016~~2021	3
	Consolidated Statements of Shareholders’ Equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021	4
	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1921
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3836
Item 4.	Controls and Procedures	3936

Part II	Other Information
Item 1A.	Risk Factors	4037
Item 6.	Exhibits	40

	In this Quarterly Report on Form 10-Q, “we”, “our”, “us”, the “Company”, “Manning & Napier” and the “Registrant” refers to Manning & Napier, Inc. and, unless the context otherwise requires, its consolidated direct and indirect subsidiaries and predecessors.


	September 30, 2017			December 31, 2016				March 31, 2022		December 31, 2021
	(unaudited)							(unaudited)
Assets							Assets
Cash and cash equivalents	$	103,322		$	100,819		Cash and cash equivalents	$	51,738	$	73,489
Accounts receivable	11,041			15,434			Accounts receivable	11,140		13,851
Accounts receivable—affiliated mutual funds	6,213			6,761
Investment securities	38,322			36,475			Investment securities	37,020		24,608
Investment securities - consolidated funds	—			995
Prepaid expenses and other assets	2,977			4,883			Prepaid expenses and other assets	17,791		17,147
Total current assets	161,875			165,367			Total current assets	117,689		129,095
Property and equipment, net	5,536			5,680			Property and equipment, net	2,177		2,109
Operating lease right-of-use assets							Operating lease right-of-use assets	12,999		14,457
Net deferred tax assets, non-current	39,563			41,905			Net deferred tax assets, non-current	17,875		17,859
Goodwill	4,829			4,829			Goodwill	4,829		4,829
Other long-term assets	2,784			2,818			Other long-term assets	2,999		3,074
Total assets	$	214,587		$	220,599		Total assets	$	158,568	$	171,423

Liabilities							Liabilities
Accounts payable	$	1,915		$	2,053		Accounts payable	$	1,909	$	1,791
Accrued expenses and other liabilities	25,609			35,115			Accrued expenses and other liabilities	25,988		36,388
Deferred revenue	10,326			10,210			Deferred revenue	12,945		12,963
Total current liabilities	37,850			47,378			Total current liabilities	40,842		51,142
Operating lease liabilities, non-current							Operating lease liabilities, non-current	12,708		14,226
Amounts payable under tax receivable agreement, non-current							Amounts payable under tax receivable agreement, non-current	13,499		13,499
Other long-term liabilities	3,352			4,034			Other long-term liabilities	148		155
Amounts payable under tax receivable agreement, non-current	32,244			34,709
Total liabilities	73,446			86,121			Total liabilities	67,197		79,022
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 9)							Commitments and contingencies (Note 9)	0		0
Shareholders’ equity							Shareholders’ equity
Class A common stock, $0.01 par value; 300,000,000 shares authorized; 15,039,347 and 14,982,880 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	150			150
Class B common stock, $0.01 par value; 2,000 shares authorized, 1,000 shares issued and outstanding at September 30, 2017 and December 31, 2016	—			—
Class A common stock, $0.01 par value; 300,000,000 shares authorized; 19,873,337 and 19,124,332 shares issued and outstanding at March 31, 2022, 19,503,085 and 18,754,080 shares issued and outstanding at December 31, 2021							Class A common stock, $0.01 par value; 300,000,000 shares authorized; 19,873,337 and 19,124,332 shares issued and outstanding at March 31, 2022, 19,503,085 and 18,754,080 shares issued and outstanding at December 31, 2021	199		195
Treasury stock, at cost, 749,005 shares at March 31, 2022 and December 31, 2021							Treasury stock, at cost, 749,005 shares at March 31, 2022 and December 31, 2021	(5,666)		(5,666)
Additional paid-in capital	198,536			200,158			Additional paid-in capital	103,567		104,740
Retained deficit	(35,706		)	(37,383		)	Retained deficit	(5,339)		(5,569)
Accumulated other comprehensive income (loss)	(30		)	(13		)
Accumulated other comprehensive loss							Accumulated other comprehensive loss	(428)		(337)
Total shareholders’ equity	162,950			162,912			Total shareholders’ equity	92,333		93,363
Noncontrolling interests	(21,809		)	(28,434		)	Noncontrolling interests	(962)		(962)
Total shareholders’ equity and noncontrolling interests	141,141			134,478			Total shareholders’ equity and noncontrolling interests	91,371		92,401
Total liabilities, shareholders’ equity and noncontrolling interests	$	214,587		$	220,599		Total liabilities, shareholders’ equity and noncontrolling interests	$	158,568	$	171,423


	Nine months ended September 30,							Three months ended March 31,
	2017			2016				2022		2021
Cash flows from operating activities:							Cash flows from operating activities:
Net income attributable to controlling and noncontrolling interests	$	42,955		$	63,867		Net income attributable to controlling and noncontrolling interests	$	1,224	$	5,964
Adjustment to reconcile net income to net cash provided by operating activities:							Adjustment to reconcile net income to net cash provided by operating activities:
Equity-based compensation	1,716			2,535			Equity-based compensation	518		1,227
Depreciation and amortization	1,328			1,952			Depreciation and amortization	2,620		436
Change in amounts payable under tax receivable agreement	33			94
Change in contingent consideration liability	—			(500		)
Net (gains) losses on investment securities	(2,293		)	(1,192		)

Impairment of long-lived assets							Impairment of long-lived assets	430		—

Net losses (gains) on investment securities							Net losses (gains) on investment securities	646		(337)
Deferred income taxes	2,342			2,212			Deferred income taxes	(16)		756
Amortization of debt issuance costs	—			117
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:							(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Accounts receivable	4,073			2,011			Accounts receivable	2,712		1,139
Accounts receivable—affiliated mutual funds	548			1,862
Due from broker - consolidated funds	—			3,795
Prepaid expenses and other assets	1,907			1,238			Prepaid expenses and other assets	(2,992)		(2,089)
Other long-term assets							Other long-term assets	565		627
Accounts payable	(138		)	(349		)	Accounts payable	118		484
Accrued expenses and other liabilities	(10,599		)	(12,196		)	Accrued expenses and other liabilities	(10,455)		(13,868)
Deferred revenue	116			(68		)	Deferred revenue	(18)		640
Other long-term liabilities	(671		)	(8		)	Other long-term liabilities	(941)		(706)
Net cash provided by operating activities	41,317			65,370
Net cash used in operating activities							Net cash used in operating activities	(5,589)		(5,727)
Cash flows from investing activities:							Cash flows from investing activities:
Purchase of property and equipment	(1,057		)	(240		)	Purchase of property and equipment	(313)		(2)
Sale of investments	12,871			9,033			Sale of investments	6,373		4,001
Purchase of investments	(38,510		)	(4,229		)	Purchase of investments	(20,240)		(4,063)
Due from broker	—			4,022

Proceeds from maturity of investments	27,063			—			Proceeds from maturity of investments	715		—
Acquisitions, net of cash received	320			(9,321		)
Net cash provided by (used in) investing activities	687			(735		)

Net cash used in investing activities							Net cash used in investing activities	(13,465)		(64)
Cash flows from financing activities:							Cash flows from financing activities:
Distributions to noncontrolling interests	(24,490		)	(34,153		)	Distributions to noncontrolling interests	(45)		(295)
Dividends paid on Class A common stock	(4,802		)	(7,123		)	Dividends paid on Class A common stock	(956)		—
Payment of shares withheld to satisfy withholding requirements	(272		)	(953		)	Payment of shares withheld to satisfy withholding requirements	(1,678)		(3,349)
Purchases of treasury stock							Purchases of treasury stock	—		(2,987)
Payment of capital lease obligations	(134		)	(154		)	Payment of capital lease obligations	(18)		(18)
Purchase of Class A units of Manning & Napier Group, LLC	(9,803		)	(16,135		)

Net cash used in financing activities	(39,501		)	(58,518		)	Net cash used in financing activities	(2,697)		(6,649)
Net increase (decrease) in cash and cash equivalents	2,503			6,117

Net decrease in cash and cash equivalents							Net decrease in cash and cash equivalents	(21,751)		(12,440)
Cash and cash equivalents:							Cash and cash equivalents:
Beginning of period	100,819			117,591			Beginning of period	73,489		57,635
End of period	$	103,322		$	123,708		End of period	$	51,738	$	45,195



x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
	2017			2016			2017			2016					2022		2021
Revenues													Revenues
Investment management services revenue	$	48,838		$	63,305		$	155,859		$	189,852
Investment management fees													Investment management fees		$	30,827	$	29,676
Distribution and shareholder servicing													Distribution and shareholder servicing		2,082		2,153
Custodial services													Custodial services		1,677		1,645
Other revenue													Other revenue		963		677
Total revenue													Total revenue		35,549		34,151
Expenses													Expenses
Compensation and related costs	22,287			24,627			67,901			70,973			Compensation and related costs		20,707		18,874
Distribution, servicing and custody expenses	6,920			8,798			21,415			26,590			Distribution, servicing and custody expenses		2,280		2,358
Other operating costs	7,887			8,188			23,099			24,854			Other operating costs		11,477		6,710
Total operating expenses	37,094			41,613			112,415			122,417			Total operating expenses		34,464		27,942
Operating income	11,744			21,692			43,444			67,435			Operating income		1,085		6,209
Non-operating income (loss)													Non-operating income (loss)
Interest expense	(22		)	(127		)	(34		)	(339		)	Interest expense		(1)		(2)
Interest and dividend income	191			141			609			457			Interest and dividend income		40		123
Change in liability under tax receivable agreement	(33		)	(76		)	(33		)	(94		)

Net gains (losses) on investments	711			(80		)	2,293			1,192			Net gains (losses) on investments		(646)		337
Total non-operating income (loss)	847			(142		)	2,835			1,216			Total non-operating income (loss)		(607)		458
Income before provision for income taxes	12,591			21,550			46,279			68,651
Provision for income taxes	739			1,565			3,324			4,784
Income before provision for (benefit from) income taxes													Income before provision for (benefit from) income taxes		478		6,667
Provision for (benefit from) income taxes													Provision for (benefit from) income taxes		(746)		703
Net income attributable to controlling and noncontrolling interests	11,852			19,985			42,955			63,867			Net income attributable to controlling and noncontrolling interests		1,224		5,964
Less: net income attributable to noncontrolling interests	10,331			17,727			37,852			56,586			Less: net income attributable to noncontrolling interests		38		724
Net income attributable to Manning & Napier, Inc.	$	1,521		$	2,258		$	5,103		$	7,281		Net income attributable to Manning & Napier, Inc.		$	1,186	$	5,240

Net income per share available to Class A common stock													Net income per share available to Class A common stock
Basic	$	0.10		$	0.15		$	0.35		$	0.49		Basic		$	0.06	$	0.31
Diluted	$	0.10		$	0.15		$	0.35		$	0.48		Diluted		$	0.06	$	0.26
Weighted average shares of Class A common stock outstanding													Weighted average shares of Class A common stock outstanding
Basic	14,249,347			14,042,880			14,135,288			13,916,721			Basic		18,988,573		17,026,500
Diluted	78,210,019			14,175,321			14,241,642			14,173,283			Diluted		21,551,937		20,273,343
Cash dividends declared per share of Class A common stock	$	0.08		$	0.16		$	0.24		$	0.48


~~(1)~~	The consolidated operating subsidiaries of Manning & Napier Group include Manning & Napier Advisors, LLC ("MNA"), Manning & Napier Alternative Opportunities, LLC, Perspective Partners LLC, Manning & Napier Information Services, LLC, Manning & Napier Benefits, LLC, Manning & Napier Investor Services, Inc., Exeter Trust Company and Rainier Investment Management, LLC.


~~(2)~~	On November 17, 2017, all outstanding shares of the Company's Class B common stock will be automatically, without any further action on the Company's part or the holder of the shares of the Company's Class B common stock, canceled and will revert to the status of authorized but unissued shares of Class B common stock.



Assets acquired
Current assets	$	6,998
Property and equipment, net	783
Intangible assets
Client relationships	9,320
Trademarks	270
Goodwill	3,958
Total assets acquired	21,329
Liabilities assumed
Accounts payable and accrued expenses	4,023
Other liabilities	1,204
Total liabilities assumed	5,227
Purchase price	$	16,102


~~(1)~~	~~Manning & Napier, Inc. incurs certain gains or expenses that are only attributable to it and are therefore excluded from the net income attributable to noncontrolling interests.~~


~~(1)~~	~~The impact of the transaction of Manning & Napier's ownership was less than 0.1%.~~



	Restricted Stock Awards		Weighted Average Grant Date Fair Value
Stock awards outstanding at January 1, 2017	1,207,788		$	12.56
Granted	70,399		$	5.55
Vested	(276,064	)	$	12.41
Forfeited	(150,000	)	$	12.20
Stock awards outstanding at September 30, 2017	852,123		$	12.09



	September 30, 2017
AUM - by investment vehicle and portfolio	Blended Asset		Equity		Fixed Income		Total
	(in millions)
Separately managed accounts	$	10,728.4	$	5,412.4	$	1,219.5	$	17,360.3
Mutual funds and collective investment trusts	5,651.7		3,425.0		108.8		9,185.5
Total	$	16,380.1	$	8,837.4	$	1,328.3	$	26,545.8


~~(2)~~	~~Performance not available given the product's inception date.~~


~~(3)~~	~~Key investment strategy returns are presented net of fees. Benchmark returns do not reflect any fees or expenses.~~


													Three months ended March 31,				Period-to-Period
	Three months ended September 30,						Period-to-Period						2022		2021		$		%
	2017			2016			$			%			(in millions)
	(in millions)
Separately managed accounts
Wealth Management (4)												Wealth Management (4)
Beginning assets under management	$	17,714.9		$	20,585.0		$	(2,870.1	)	(14	)%	Beginning assets under management	$	9,776.9	$	8,906.4	$	870.5	10	%
Gross client inflows ⁽¹⁾	407.2			374.6			32.6			9	%	Gross client inflows (1)	242.0		224.8		17.2		8	%
Gross client outflows ⁽¹⁾	(1,383.4		)	(1,226.0		)	(157.4		)	13	%	Gross client outflows (1)	(330.0)		(305.3)		(24.7)		8	%
Market appreciation (depreciation) & other ⁽²⁾	621.6			803.4			(181.8		)	(23	)%
Market appreciation (depreciation) & other (2) (3)												Market appreciation (depreciation) & other (2) (3)	(514.1)		391.6		(905.7)		(231)	%
Ending assets under management	$	17,360.3		$	20,537.0		$	(3,176.7	)	(15	)%	Ending assets under management	$	9,174.8	$	9,217.5	$	(42.7)	—	%
Mutual funds and collective investment trusts
Average AUM for period												Average AUM for period	$	9,381.6	$	8,993.0	$	388.6	4	%
Institutional and Intermediary (4)												Institutional and Intermediary (4)
Beginning assets under management	$	9,360.6		$	15,131.2		$	(5,770.6	)	(38	)%	Beginning assets under management	$	12,765.7	$	11,213.0	$	1,552.7	14	%
Gross client inflows ⁽¹⁾	393.4			752.2			(358.8		)	(48	)%	Gross client inflows (1)	486.4		401.6		84.8		21	%
Gross client outflows ⁽¹⁾	(928.2		)	(2,163.2		)	1,235.0			(57	)%	Gross client outflows (1)	(1,007.8)		(453.5)		(554.3)		122	%
Market appreciation (depreciation) & other ⁽²⁾	359.7			561.3			(201.6		)	(36	)%

Market appreciation (depreciation) & other (2) (3)												Market appreciation (depreciation) & other (2) (3)	(769.9)		761.2		(1,531.1)		(201)	%
Ending assets under management	$	9,185.5		$	14,281.5		$	(5,096.0	)	(36	)%	Ending assets under management	$	11,474.4	$	11,922.3	$	(447.9)	(4)	%
Average AUM for period												Average AUM for period	$	11,949.3	$	11,454.3	$	495.0	4	%
Total assets under management												Total assets under management
Beginning assets under management	$	27,075.5		$	35,716.2		$	(8,640.7	)	(24	)%	Beginning assets under management	$	22,542.6	$	20,119.4	$	2,423.2	12	%
Gross client inflows ⁽¹⁾	800.6			1,126.8			(326.2		)	(29	)%	Gross client inflows (1)	728.4		626.4		102.0		16	%
Gross client outflows ⁽¹⁾	(2,311.6		)	(3,389.2		)	1,077.6			(32	)%	Gross client outflows (1)	(1,337.8)		(758.8)		(579.0)		76	%
Market appreciation (depreciation) & other ⁽²⁾	981.3			1,364.7			(383.4		)	(28	)%

Market appreciation (depreciation) & other (2) (3)												Market appreciation (depreciation) & other (2) (3)	(1,284.0)		1,152.8		(2,436.8)		(211)	%
Ending assets under management	$	26,545.8		$	34,818.5		$	(8,272.7	)	(24	)%	Ending assets under management	$	20,649.2	$	21,139.8	$	(490.6)	(2)	%
Average AUM for period												Average AUM for period	$	21,330.9	$	20,447.3	$	883.6	4	%


~~(1)~~	See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Supplemental Non-GAAP Financial Information” for Manning & Napier’s reasons for including these non-GAAP measures in this report in addition to a reconciliation of non-GAAP financial measures to GAAP measures for the periods indicated.


~~(2)~~	Represents the fair value of additional cash payments related to our acquisition of Rainier of up to $32.5 million over the period ending December 31, 2019, contingent upon Rainier's achievement of certain financial targets.


Exhibit No.		Description
2.1		Merger Agreement, dated March 31, 2022, by and among, Callodine Midco, Inc., Callodine Merger Sub, Inc., Callodine Merger Sub, LLC, Manning & Napier, Inc., and Manning & Napier Group, LLC is incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 1, 2022

~~Exhibit No.~~	~~Description~~
10.1		Support Agreement, dated March 31, 2022, by and among Callodine MidCo, Inc. and executive officers of Manning & Napier, Inc.

~~31.1~~10.2		Rollover Agreement, dated March 31, 2022, by and among Callodine MN Holdings, Inc. and Marc Mayer

10.3*		Employment Agreement, dated March 31, 2022, by and among Callodine MidCo, Inc. and Marc Mayer

31.1		Certification of the Company’s Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Company’s Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		Materials from the Manning & Napier, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2017,~~March 31, 2022, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated ~~Statement~~Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) related Notes to the Unaudited Consolidated Financial Statements.

104		Cover Page Interactive Data File (included in Exhibit 101)