Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 20, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Entity Registrant Name | Victory Capital Holdings, Inc. | ||
Entity Central Index Key | 0001570827 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2023 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,220 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Common Stock, Shares Outstanding | 64,316,865 | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | ||
Trading Symbol | VCTR | ||
Security Exchange Name | NASDAQ | ||
Entity Tax Identification Number | 32-0402956 | ||
Entity File Number | 001-38388 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 15935 La Cantera Parkway | ||
Entity Address, City or Town | San Antonio | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78256 | ||
City Area Code | 216 | ||
Local Phone Number | 898-2400 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Cleveland, Ohio | ||
Auditor Firm ID | 42 | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement related to its 2024 Annual Stockholders’ Meeting to be filed within 120 days of the end of the fiscal year ended December 31, 2023, are incorporated by reference into Part III hereof. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the registrant’s proxy statement is not deemed to be filed as part hereof. | ||
Document Financial Statement Error Correction [Flag] | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 123,547 | $ 38,171 |
Investment management fees receivable | 71,888 | 68,347 |
Fund administration and distribution fees receivable | 14,238 | 14,379 |
Other receivables | 1,444 | 1,747 |
Prepaid expenses | 5,785 | 8,443 |
Fair Value | 534 | 466 |
Deferred compensation plan investments, at fair value | 31,274 | 26,800 |
Property and equipment, net | 19,578 | 21,146 |
Goodwill | 981,805 | 981,805 |
Other intangible assets, net | 1,281,832 | 1,314,637 |
Other assets | 10,691 | 64,958 |
Total assets | 2,542,616 | 2,540,899 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued expenses | 56,477 | 50,862 |
Accrued compensation and benefits | 55,456 | 58,458 |
Consideration payable for acquisition of business | 217,200 | 230,400 |
Deferred compensation plan liability | 31,274 | 26,800 |
Deferred tax liability, net | 128,714 | 108,138 |
Other liabilities | 11,225 | 15,317 |
Long-term debt, net | 989,269 | 985,514 |
Total liabilities | 1,489,615 | 1,475,489 |
Stockholders' equity | ||
Common stock, $0.01 par value per share: 2023 - 600,000,000 shares authorized, 82,404,305 shares issued and 64,254,714 shares outstanding; 2022 - 600,000,000 shares authorized, 80,528,137 shares issued and 67,325,534 shares outstanding | 824 | 805 |
Additional paid-in capital | 728,283 | 705,466 |
Treasury stock, at cost: 2023 - 18,149,591 shares; 2022 - 13,202,603 shares | (444,286) | (285,425) |
Accumulated other comprehensive income | 31,328 | 35,442 |
Retained earnings | 736,852 | 609,122 |
Total stockholders' equity | 1,053,001 | 1,065,410 |
Total liabilities and stockholders' equity | $ 2,542,616 | $ 2,540,899 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 82,404,305 | 80,528,137 |
Common stock, shares outstanding | 64,254,714 | 67,325,534 |
Treasury stock, shares | 18,149,591 | 13,202,603 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | |||
Total revenue | $ 821,028 | $ 854,800 | $ 890,265 |
Expenses | |||
Personnel compensation and benefits | 220,992 | 238,198 | 234,833 |
Distribution and other asset-based expenses | 149,596 | 161,105 | 176,385 |
General and administrative | 56,287 | 52,373 | 53,722 |
Depreciation and amortization | 41,647 | 43,201 | 18,840 |
Change in value of consideration payable for acquisition of business | 23,236 | (40,600) | 13,800 |
Acquisition-related costs | 217 | 534 | 16,262 |
Restructuring and integration costs | 595 | 881 | 2,578 |
Total operating expenses | 492,570 | 455,692 | 516,420 |
Income from operations | 328,458 | 399,108 | 373,845 |
Other income (expense) | |||
Interest income and other income (expense) | 8,732 | (2,463) | 6,045 |
Interest expense and other financing costs | (61,282) | (43,964) | (24,652) |
Loss on debt extinguishment | 0 | (2,648) | (4,596) |
Total other income (expense), net | (52,550) | (49,075) | (23,203) |
Income before income taxes | 275,908 | 350,033 | 350,642 |
Income tax expense | (62,751) | (74,522) | (72,253) |
Net income | $ 213,157 | $ 275,511 | $ 278,389 |
Earnings per share of common stock | |||
Basic | $ 3.22 | $ 4.02 | $ 4.10 |
Diluted | $ 3.12 | $ 3.81 | $ 3.75 |
Weighted average number of shares outstanding | |||
Basic | 66,202 | 68,481 | 67,976 |
Diluted | 68,214 | 72,266 | 74,151 |
Dividends declared per share of common stock | $ 1.28 | $ 1 | $ 0.53 |
Investment Management Fees | |||
Revenue | |||
Total revenue | $ 640,876 | $ 664,710 | $ 674,539 |
Fund Administration and Distribution Fees | |||
Revenue | |||
Total revenue | $ 180,152 | $ 190,090 | $ 215,726 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) | $ 213,157 | $ 275,511 | $ 278,389 |
Other comprehensive income (loss), net of tax | |||
Net unrealized income (loss) on cash flow hedges | (1,970) | 29,719 | 13,468 |
Net amortization of deferred gain on terminated cash flow hedges | (2,184) | 0 | 0 |
Net unrealized income (loss) on foreign currency translation | 40 | (249) | (36) |
Net current period other comprehensive income (loss) | (4,114) | 29,470 | 13,432 |
Comprehensive income | $ 209,043 | $ 304,981 | $ 291,821 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Common Stock Class B | Treasury Stock [Member] | Treasury Stock [Member] Class B | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) |
Balance at beginning of period at Dec. 31, 2020 | $ 707,541 | $ 194 | $ 548 | $ (47,844) | $ (47,080) | $ 647,602 | $ (7,460) | $ 161,581 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 254 | 254 | ||||||
Conversion of Class B shares to Common Stock | 66 | (66) | ||||||
Repurchase of shares | (26,150) | (26,150) | ||||||
Shares withheld related to net settlement of equity awards | (32,126) | (1,721) | (30,405) | |||||
Vesting of restricted share grants | 16 | (16) | ||||||
Exercise of options | 8,121 | 1 | 13 | 8,107 | ||||
Elimination of Class B share class | 511 | $ (511) | (77,485) | $ 77,485 | ||||
Other comprehensive income (loss) | 13,432 | 13,432 | ||||||
Share-based compensation | 17,625 | 17,625 | ||||||
Dividends paid | (37,159) | (37,159) | ||||||
Net income | 278,389 | 278,389 | ||||||
Balance at end of period at Dec. 31, 2021 | 929,927 | 772 | (153,200) | 673,572 | 5,972 | 402,811 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 266 | 266 | ||||||
Repurchase of shares | (87,256) | (87,256) | ||||||
Shares withheld related to net settlement of equity awards | (44,969) | (44,969) | ||||||
Vesting of restricted share grants | 8 | (8) | ||||||
Exercise of options | 13,845 | 25 | 13,820 | |||||
Other comprehensive income (loss) | 29,470 | 29,470 | ||||||
Share-based compensation | 17,816 | 17,816 | ||||||
Dividends paid | (69,200) | (69,200) | ||||||
Net income | 275,511 | 275,511 | ||||||
Balance at end of period at Dec. 31, 2022 | 1,065,410 | 805 | (285,425) | 705,466 | 35,442 | 609,122 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 253 | 253 | ||||||
Repurchase of shares | (134,506) | (134,506) | ||||||
Shares withheld related to net settlement of equity awards | (24,355) | (24,355) | ||||||
Vesting of restricted share grants | 8 | (8) | ||||||
Exercise of options | 6,035 | 11 | 6,024 | |||||
Other comprehensive income (loss) | (4,114) | (4,114) | ||||||
Share-based compensation | 16,548 | 16,548 | ||||||
Dividends paid | (85,427) | (85,427) | ||||||
Net income | 213,157 | 213,157 | ||||||
Balance at end of period at Dec. 31, 2023 | $ 1,053,001 | $ 824 | $ (444,286) | $ 728,283 | $ 31,328 | $ 736,852 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income | $ 213,157 | $ 275,511 | $ 278,389 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred income taxes | 21,539 | 35,654 | 19,488 |
Depreciation and amortization | 41,647 | 43,201 | 18,840 |
Deferred financing costs, accretion expense and derivative gains/losses | 1,454 | 4,477 | 3,430 |
Share-based and deferred compensation | 21,543 | 17,718 | 26,498 |
Change in fair value of contingent consideration obligations | 23,236 | (40,600) | 13,800 |
Unrealized (appreciation) depreciation on investments | (1,868) | 4,650 | (3,557) |
Noncash lease expense | 0 | 212 | 0 |
Loss on equity method investment | 0 | 825 | 331 |
Loss on debt extinguishment | 0 | 2,648 | 4,596 |
Loss on disposal of property and equipment due to restructuring | 0 | 485 | 0 |
Changes in operating assets and liabilities: | |||
Investment management fees receivable | (3,541) | 12,287 | (8,000) |
Fund administration and distribution fees receivable | 141 | 2,744 | (104) |
Other receivables | (266) | 4,815 | (1,624) |
Prepaid expenses | 316 | (1,789) | (305) |
Other assets | 47,540 | (3,342) | 402 |
Accounts payable and accrued expenses | 5,666 | (10,229) | 19,442 |
Accrued compensation and benefits | (2,880) | 4,428 | 5,148 |
Deferred compensation plan liability | (523) | (3,913) | (633) |
Other liabilities | (434) | (871) | 55 |
Payment of consideration for acquisition | (36,436) | (13,700) | 0 |
Net cash provided by operating activities | 330,291 | 335,211 | 376,196 |
Cash flows from investing activities | |||
Purchases of property and equipment | (5,169) | (5,245) | (12,674) |
Purchases of deferred compensation plan investments | (13,805) | (24,082) | (14,375) |
Sales of deferred compensation plan investments | 11,147 | 23,714 | 9,662 |
Purchases of proprietary funds | (46) | (119) | (176) |
Sales of proprietary funds | 32 | 295 | 215 |
Acquisition of business and assets, net of cash acquired | 0 | (880) | (539,240) |
Net cash used in investing activities | (7,841) | (6,317) | (556,588) |
Cash flows from financing activities | |||
Issuance of common stock | 6,288 | 14,111 | 8,375 |
Repurchase of common stock | (139,299) | (101,178) | (31,533) |
Payments of taxes related to net share settlement of equity awards | (18,694) | (31,067) | (26,694) |
Proceeds from long-term senior debt, net | 0 | 0 | 502,475 |
Payment of debt financing fees | 0 | 0 | (8,747) |
Repayment and repurchases of long-term senior debt | 0 | (149,052) | (142,000) |
Payment of dividends | (85,427) | (69,200) | (37,159) |
Payment of consideration for acquisition | 0 | (23,800) | (37,500) |
Net cash provided by (used in) financing activities | (237,132) | (360,186) | 227,217 |
Effect of changes of foreign exchange rate on cash and cash equivalents | 58 | (70) | (36) |
Net increase (decrease) in cash and cash equivalents | 85,376 | (31,362) | 46,789 |
Cash and cash equivalents, beginning of period | 38,171 | 69,533 | 22,744 |
Cash and cash equivalents, end of period | 123,547 | 38,171 | 69,533 |
Supplemental cash flow information | |||
Cash paid for interest | 70,685 | 31,981 | 18,768 |
Cash paid for income taxes | $ 38,690 | $ 35,725 | $ 55,153 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 213,157 | $ 275,511 | $ 278,389 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b5-1 Arrangement Modified | false |
Non-Rule 10b5-1 Arrangement Modified | false |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1. Organization and Nature of Business Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our”), was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Services, Inc. (“VCS”), formerly known as Victory Capital Advisers, Inc., which occurred on August 1, 2013. On February 12, 2018, the Company completed the initial public offering (the “IPO”) of its Class A common stock, which trades on the NASDAQ under the symbol “VCTR.” On July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition” or “USAA AMCO”) of USAA Asset Management Company and Victory Capital Transfer Agency, Inc. (“VCTA”), formerly known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services. The USAA AMCO Acquisition included USAA’s mutual fund and ETF businesses and its 529 Education Savings Plan. Victory provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors. With 11 autonomous Investment Franchises and a Solutions Platform, the Company offers a wide array of investment products, including actively and passively managed mutual funds, rules-based and active exchange traded funds (“ETFs”), institutional separate accounts, variable insurance products (“VIPs”), alternative investments, private closed end funds, and a 529 Education Savings Plan. The Company’s strategies are also offered through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts (“SMAs”) and unified managed accounts (“UMAs”) through wrap account programs, Collective Investment Trusts (“CITs”), and undertakings for the collective investment in transferable securities (“UCITs”). VCM is a registered investment adviser and provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, the mutual fund series of the Victory Portfolios II and the Victory Portfolios III (collectively, the “Victory Funds”), a family of open-end mutual funds, and the VictoryShares (the Company’s ETF brand). Additionally, VCM employs all of the Company’s United States investment professionals across its Franchises and Solutions, which are not separate legal entities. VCM’s wholly-owned subsidiaries include RS Investment Management (Singapore) Pte. Ltd., RS Investments (UK) Limited, Victory Capital Digital Assets, LLC and NEC Pipeline LLC. RS Investments (Hong Kong) Limited, VCM’s other wholly-owned subsidiary, ceased operations on May 31, 2023. VCS is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds, which includes the mutual funds of the Victory Portfolios III (the “Victory Funds III”) and a 529 Education Savings Plan. VCS offers brokerage services to individual investors through an open architecture brokerage platform launched in April 2023. VCS is also the placement agent for certain private funds managed by VCM. VCTA is registered with the SEC as a transfer agent for the Victory Funds III. On November 1, 2021, the Company completed the acquisition of 100 % of the equity interests in New Energy Capital Partners (“NEC”). Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies. AUM acquired in the NEC acquisition totaled $ 0.8 billion as of November 1, 2021. On December 31, 2021, the Company completed the acquisition (“WestEnd Acquisition”) of 100 % of the equity interests in WestEnd Advisors, LLC (“WestEnd”). Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy, all in tax efficient Separately Managed Account (SMA) structures. AUM acquired in the WestEnd Acquisition totaled $ 19.3 billion on December 31, 2021. WestEnd is a wholly-owned subsidiary of Victory Capital Holdings, Inc. and is the Company’s second registered investment adviser. Changes in Capital Structure On September 27, 2021, the Board of Directors approved amendments to the Company’s corporate charter and bylaws to eliminate the Company’s dual-class share structure. On November 19, 2021, the Company’s stockholders voted on and approved an amendment to the Company’s Restated Certificate of Incorporation (the “Amendment”), as amended, to eliminate the Company’s dual-class stock structure. The Amendment (i) converted all the shares of Class B Common Stock into an equal number of shares of Class A Common Stock (the “Conversion”), (ii) deleted provisions no longer applicable following the Conversion, (iii) renamed our Class A Common Stock as “Common Stock.” On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company (i) entered into the 2019 Credit Agreement, (ii) repaid all indebtedness outstanding under the 2018 Credit Agreement and (iii) terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among the Company, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained seven-year term loans in an aggregate principal amount of $ 1.1 billion and established a five-year revolving credit facility (which was unfunded as of the closing date) with aggregate commitments of $ 100.0 million. On December 31, 2021, the Company entered into the Third Amendment to the 2019 Credit Agreement (the “Third Amendment”) and obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $ 505.0 million and used the proceeds to fund the WestEnd Acquisition and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans will mature in 2028. Refer to Note 4, Acquisitions, for further information on the WestEnd, NEC and USAA AMCO acquisitions and Note 11, Debt, for additional information on the Company’s debt structure. |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Accounting Policies | NOTE 2. Accounting Policies Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all the shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if (i) the Company holds greater than 50 % voting interest in entities controlled through voting interests or if (ii) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution services and other management services and/or holding a minority interest. As of December 31, 2023 and 2022, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $ 31.7 million and $ 25.3 million, respectively which are included in investments in proprietary funds and deferred compensation plan investments in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it has an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. Upon the completion of the NEC Acquisition on November 1, 2021, VCM became the manager of certain general partner entities associated with the acquired NEC Funds. The Company has no equity investment in these general partner entities, which are non-consolidated VIEs, and has no share of these general partner entities’ income or losses. The Company owned a 15 % equity interest in Alderwood Partners LLP (“Alderwood”) from September 20, 2020 to July 31, 2022, when the Company retired as a member of Alderwood. The Company analyzed its investment in Alderwood under the voting interest model and determined that it did not have a controlling financial interest. The Company accounted for its Alderwood investment using the equity method of accounting. Refer to Note 13, Equity Method Investment, for additional information on Alderwood. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on the Company’s various revenue streams, refer to Note 3, Revenue. Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan or are the result of a continuing contractual obligation with no continuing economic benefit to the Company and include penalties incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. Investments Investments in Proprietary Funds Investments in proprietary funds include investments in affiliated mutual funds and are recorded in investments in proprietary funds, at fair value in the Consolidated Balance Sheets. Changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2023, 2022 and 2021. Deferred Compensation Plan Investments Deferred compensation plan investments include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Deferred compensation plan investments are recorded at fair value in the Consolidated Balance Sheets. Changes in value in deferred compensation plan investments are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's investments in proprietary funds and deferred compensation plan investments are valued using quoted market prices available in an active market, which is the net asset value of the funds. Derivative Financial Instruments The Company does not purchase or hold any derivative instruments for trading or speculative purposes. On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long-term debt. On October 30, 2023, the Company monetized the gain on the Swap and entered into an agreement to terminate the Swap effective as of that date. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap was assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. Since inception through termination, the Swap was deemed to be highly effective. The Swap was designated as a cash flow hedge. Accordingly, through the termination date, the Swap was measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss) (“AOCI”), net of tax, to the extent the hedge was determined to be effective. Upon termination of the Swap, the market-to market gain of $ 44.4 million, before tax, was replaced in AOCI by a realized gain of an equal amount. Gains and losses from the Swap are reclassified from AOCI in the same period during the which the hedged transaction affects earnings. Refer to Note 12, Derivatives, for further information. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years . Improvements to leased property are amortized on a straight‑line basis over the lesser of the useful life of the improvements or the term of the applicable lease. When assets are sold or retired, the related cost and accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in other income (expense) in the Consolidated Statements of Operations. Gains and losses resulting from the sale or disposal of assets as part of a restructuring plan are included in restructuring and integration costs in the Consolidated Statements of Operations. The cost of repairs and maintenance are expensed as incurred. Equipment and leasehold improvements are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable. Leases The Company’s leases consist primarily of real estate leases for office space. The Company determines if an arrangement is a lease at contract inception. A lease liability and a corresponding right-of-use ("ROU") asset are recognized on the commencement date for leases with terms longer than one year . Lease liabilities represent an obligation to make lease payments arising from a lease while ROU assets represent a right to use an underlying asset during the lease term. The lease liability is measured at the present value of the future lease payments over the lease term generally using the Company's incremental borrowing rate, which is determined through market sources. Lease components and non-lease components such as fixed maintenance and other costs are combined into one lease component and capitalized in lease liabilities. Variable lease payments, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease payments are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. A ROU asset is measured initially as the value of the lease liability plus initial direct costs and prepaid lease payments and less lease incentives received. The lease term includes periods covered by options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses on the Consolidated Statements of Operations. Capitalized Service Contract Implementation Costs The Company follows the internal-use software guidance in ASC 350-40 to determine for hosting arrangements that are service contracts which implementation costs to capitalize as assets. Costs incurred in the software application development stage such as customization, integration with Company software, coding and configuration are capitalized. Costs incurred in the preliminary project and post-implementation stages are expensed as incurred. Capitalized service contract implementation costs are expensed over the fixed, noncancelable term of the contract plus any reasonably certain renewal periods. The estimated term of the hosting arrangement is reassessed periodically, and any change is accounted for as a change in accounting estimate, with the remaining deferred costs recognized over the rest of the revised period. Amortization begins when the related component of the arrangement is ready for its intended use, and costs are evaluated for impairment on an annual basis. Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, significant negative industry or economic trends and significant decreases in the Company’s market capitalization. The Company conducts the annual impairment assessment as of October 1 st and uses a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, the fair value of the reporting unit is compared to its carrying amount. A goodwill impairment charge is recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value. The assumptions used to estimate fair value include management's estimates of future growth rates, operating cash flows, discount rates and terminal value. These assumptions and estimates can change in future periods based on market movement and factors impacting the expected business performance. Changes in assumptions or estimates could materially affect the determination of our fair value. Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in or with institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA), unified managed account/model (UMA) intermediaries and private funds. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to, continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1 st using a qualitative approach which requires that positive and negative evidence collected as a result of considering various factors be weighed in order to determine whether it is more likely than not that an indefinite‑lived intangible asset is impaired. In addition, periodically management reconsiders whether events or circumstances continue to support an indefinite useful life. Indicators monitored by management that may indicate an indefinite useful life is no longer supported include a significant decline in the level of managed assets, changes to legal, regulatory or contractual provisions of the renewable investment advisory contracts and reductions in underlying operating cash flows. Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, the VictoryShares and other pooled funds sponsored by Victory and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds and the VictoryShares and transfer agent fees due from the Victory Portfolios III and sub-transfer agent fees due from the Victory Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2023, 2022 and 2021, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2023, 2022 and 2021. Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2023 and 2022. Advertising and Marketing Costs In December 2022, the Company entered into a long-term partnership with Spurs Sports & Entertainment and executed naming rights and partnership agreements for the team’s new performance center. The agreements, which end in 2033, grant the Company exclusive naming rights, sponsorship, signage, advertising and other promotional rights and benefits for the new performance center. Payments made under the agreements are deferred and expensed on a straight-line basis over the term of the arrangement. The related advertising and marketing expense is recorded in general and administrative expense in the Consolidated Statements of Operations. The balance of amounts paid less amortized expense are included in the Consolidated Balance Sheets in other assets when cumulative payments exceed amortized expense and in other liabilities when amortized expense exceeds cumulative payments. Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s Common Stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s Common Stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company expenses the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $ 0.4 million in costs related to debt modifications in 2021 ($ 0 in 2023 and 2022). The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained earnings in the Consolidated Balance Sheets. Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount as of December 31, 2023, 2022 and 2021. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the Consolidated Statements of Operations. Foreign exchange gains and losses for the years ended December 31, 2023, 2022 and 2021 were immaterial. Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets, goodwill, depreciation, debt issuance costs and mark-to-market gains on the Swap. Deferred tax assets are generally attributable to definite‑lived intangible assets, share-based compensation expense, deferred compensation and acquisition-related costs. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more-likely-than-not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a more‑likely‑than‑not threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. Loss |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3. Revenue In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Year Ended December 31, (in thousands) 2023 2022 2021 Investment management fees Mutual funds (Victory Funds) $ 440,021 $ 465,031 $ 536,902 ETFs (VictoryShares) 20,800 20,603 16,517 Separate accounts and other vehicles 173,433 180,476 125,417 Performance-based fees Mutual funds (Victory Funds III) 5,460 ( 812 ) ( 5,839 ) Separate accounts and other vehicles 1,162 ( 588 ) 1,542 Total investment management fees 640,876 664,710 674,539 Fund administration and distribution fees Administration fees Mutual funds (Victory Funds) 100,174 104,764 120,414 ETFs (VictoryShares) 2,881 2,800 1,887 Distribution fees Mutual funds (Victory Funds) 22,350 24,971 28,939 Transfer agent fees Mutual funds (Victory Funds III) 54,747 57,555 64,486 Total fund administration and distribution fees 180,152 190,090 215,726 Total revenue $ 821,028 $ 854,800 $ 890,265 The following table presents balances of receivables: (in thousands) December 31, 2023 December 31, 2022 Customer receivables Mutual funds (Victory Funds) $ 55,858 $ 53,835 ETFs (VictoryShares) 2,079 2,239 Separate accounts and other vehicles 28,189 26,652 Receivables from contracts with customers 86,126 82,726 Non-customer receivables 1,444 1,747 Total receivables $ 87,570 $ 84,473 Investment management fees receivable $ 71,888 $ 68,347 Fund administration and distribution fees receivable 14,238 14,379 Other receivables 1,444 1,747 Total receivables $ 87,570 $ 84,473 Revenue The Company’s revenue includes fees earned from providing; • investment management services, • fund administration services, • fund transfer agent services, and • fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable. The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service. Investment Management Fees Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are generally paid in arrears on a monthly or quarterly basis. AUM represents the financial assets the Company manages for clients on either a discretionary or non-discretionary basis. In general, AUM reflects the valuation methodology that corresponds to the basis used for determining revenue such as net asset value for the Victory Funds and certain other pooled funds and account market value for separate accounts. For the NEC Funds, AUM represents limited partner capital commitments during the commitment period of the fund. Following the earlier of the termination of the commitment period and the beginning of any commitment period for a successor fund, AUM generally represents, depending on the fund, the lesser of a) the net asset value of the fund and b) the aggregated adjusted cost basis of each unrealized portfolio investment or the limited partner capital commitments reduced by the amount of capital contributions used to make portfolio investments that have been disposed. Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change. The Company may waive certain fees for investment management services provided to the Victory Funds, VictoryShares and other pooled investment vehicles and may subsidize certain share classes of the Victory Funds, VictoryShares and other pooled investment vehicles to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, VictoryShares and other pooled investment vehicles for waivers and expense reimbursements represent consideration payable to customers, which is recorded in accounts payable and accrued expenses in the Consolidated Balance Sheets, and no distinct services are received in exchange for these payments. Performance-based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when and to the extent that it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fulcrum fee arrangements include a performance fee adjustment that increases or decreases the total investment management fee depending on whether the assets being managed experienced better or worse investment performance than the index specified in the customer’s contract. The performance fee adjustment arrangement with certain equity and fixed income Victory Funds III is calculated monthly based on the investment performance of those funds relative to their specified benchmark indexes over the discrete performance period ending with that month. Fund Administration Fees The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company’s fund administration fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis. Fund Compliance Fees The Company has an agreement to provide compliance design, administration and oversight services for the Victory Funds and the VictoryShares in accordance with Rule 38a-1 under the Investment Company Act. The Company furnishes a VCM employee to serve as the Chief Compliance Officer and provides other compliance personnel and resources reasonably necessary to perform the services under this agreement. The Company earns a fixed annual fee for these compliance services which is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. Fund Transfer Agent Fees The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the Victory Funds III for which transfer agent services are provided or number of accounts in the Victory Funds III. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company’s fund transfer agent fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company also receives fees for sub-transfer agency services under contracts with the Victory Funds for member class shares. Sub-transfer agency fees are recognized and recorded in a manner similar to fund transfer agent fees and are recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. As the Company is the primary obligor under the transfer agency contracts with the Victory Funds III and has the ability to select the service provider and establish pricing, fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis. Fund Distribution Fees The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption. Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration. The Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods as variable consideration is recognized only when uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s revenue is recorded gross of payments made to third parties. Included in fund distribution fees are transaction and account-level fees paid by VCS brokerage platform customers for trade execution, cash transfer and other services. Costs Incurred to Obtain or Fulfill Customer Contracts The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contact with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions. Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00 % of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in prepaid expenses in the Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit. Valuation of AUM and fund investments The fair value of assets under management of the Victory Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes. In certain circumstances, a quotation or price evaluation is not readily available from a pricing service. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored products. The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service. The fair value of Level III assets held by alternative investment vehicles is determined under the respective valuation policy for each fund. The valuation policies address the fact that substantially all the investments of a fund may not have readily available market information and therefore the fair value for these assets is typically determined using unobservable inputs and models that may include subjective assumptions. AUM reported by the Company for alternative investment vehicles may not necessarily equal the funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees. For the periods presented, less than one percent of the Company’s total AUM were Level III assets priced without using a quoted market price, broker price quote or pricing service quotation. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 4. ACQUISITION USAA AMCO Acquisition Under the terms of the USAA AMCO Acquisition purchase agreement, a maximum of $ 150.0 million ($ 37.5 million per year) in contingent payments was payable to sellers based on the annual revenue of USAA Asset Management Company attributable to all “non-managed money”-related AUM in each of the first four years following the closing. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets was required to be at least 80 % of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Asset Management Company's “non-managed money”-related assets under management as of the closing date, and to achieve the maximum contingent payment for a given year, such annual revenue was required to be at least 100 % of that closing date revenue run-rate. On October 10, 2023, the Company paid $ 36.4 million in cash to sellers for the fourth and final earn out period payment, bringing total cumulative contingent payments to $ 148.9 million. At December 31, 2022, the estimated fair value of contingent consideration payable to sellers was $ 27.7 million and was determined using a real options method, where revenue related to “non-managed money” assets was simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which were then discounted from the expected payment dates at the relevant cost of debt. Contingent consideration payable to sellers is recorded in consideration payable for acquisition of business in the Consolidated Balance Sheets. The Company recorded an increases in the liability of $ 8.7 million and $ 13.8 million in 2023 and 2021, respectively, and a decrease in the liability of $ 3.6 million in 2022, in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2022 and the acquisition date are as follows and are approximate values: July 1, 2019 December 31, 2022 Acquisition Date Non-managed money revenue 4 year average annual growth rate — % 8 % Market price of risk 6 % 4 % Revenue volatility 17 % 20 % Discount rate 8 % 7 % Years remaining in earn out period 0.9 4.3 Undiscounted estimated remaining earn out payments $ millions $ 30 - $ 37.5 $ 119 - $ 150 NEC Acquisition On November 1, 2021, VCM completed the acquisition of 100 % of the equity interests in NEC. Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies through private closed-end funds (the “NEC Funds”). The NEC Acquisition purchase price was $ 63.1 million, which included $ 62.8 million in cash paid at closing, net of cash acquired, and $ 0.3 million of net working capital adjustments paid to sellers in March 2022. Under the terms of the purchase agreement, the Company will pay up to an additional $ 35.0 million in cash based on net revenue growth over a six year period following the closing date. The purchase agreement specifies net revenue and payment targets for the 36 -month, 48 -month and 60 -month periods beginning on November 30, 2021 (the “Start Date”) for the contingent payments. It also provides for advance payments and catch-up payments to be made based on actual NEC net management fee revenue, as defined in the purchase agreement, as measured at the end of each 12 month anniversary of the Start Date over a six year period. The maximum amount of contingent payments is due, less any contingent payments previously paid, upon the occurrence of certain specified events within a five year period following the Start Date. The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services. Accordingly, these contingent payments were excluded from the purchase price for the NEC Acquisition and a liability for these contingent payments was not recorded on the acquisition date. The Company recognizes compensation expense over the estimated service period on a straight-line basis in an amount equal to the total contingent payments currently forecasted to be paid. The Company recorded $ 5.6 million, $ 5.5 million and $ 2.6 million in NEC contingent payment compensation expense for the years ended December 31, 2023, 2022 and 2021, respectively, which is included in personnel compensation and benefits in the Consolidated Statements of Operations. The corresponding liability is recorded in accrued compensation and benefits in the Consolidated Balance Sheets and totaled $ 13.7 million and $ 8.1 million as of December 31, 2023 and 2022, respectively. The NEC Acquisition purchase price of $ 62.8 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The carried interests in the existing NEC Funds were not acquired in the transaction. No adjustments were made to the purchase price allocation during the one year measurement period following the closing date. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $ 41.0 million was recorded to goodwill in the Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from future earnings and cash flows from new funds expected to be launched on the NEC alternative investment platform. WestEnd Acquisition On and effective December 31, 2021, the Company completed the WestEnd Acquisition. Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy in SMA structures. The aggregate purchase price for the WestEnd Acquisition was $ 716.1 million, net of cash acquired, which includes (i) $ 475.8 million in cash paid at closing (the “WestEnd Closing”) net of cash acquired, (ii) the acquisition date value of contingent payments due to sellers of $ 239.7 million and iii) $ 0.6 million paid in cash to sellers in April 2022 for net working capital adjustments. The contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the WestEnd Closing, subject to certain “catch-up” provisions over a five and one half year period following the WestEnd Closing. A maximum of $ 320.0 million ($ 80.0 million per year) in earn-out payments may be paid. In connection with the closing of the WestEnd Acquisition, the Company entered into the Third Amendment to the 2019 Credit Agreement and obtained incremental term loans in an aggregate principal amount of $ 505.0 million to fund the acquisition and pay fees and expenses related to the transaction. Please refer to Note 11, Debt, for more information on the 2021 Incremental Term Loans. A total of $ 2.9 million of the cash paid at closing was placed in escrow. In April 2022, the $ 0.5 million of escrow funds reserved for purchase price adjustments was released to sellers. The remaining $ 2.4 million of escrow funds that was available to compensate the Company for eligible claims under the purchase agreement’s indemnification provisions was released to sellers in February 2023. The purchase price of $ 716.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the WestEnd Acquisition. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. No adjustments were made to the purchase price allocation during the one year measurement period following the closing date. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $ 536.0 million was recorded to goodwill in the Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from revenue synergies expected from combining WestEnd and Victory distribution platforms and sales efforts. The estimated fair value for contingent consideration payable to sellers is estimated using the real options method. WestEnd net revenue growth is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the WestEnd net revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration. A maximum of $ 320.0 million ($ 80.0 million per year) is payable to sellers in contingent payments. The estimated fair value of contingent consideration payable to sellers was $ 217.2 million and $ 202.7 million at December 31, 2023 and 2022, respectively. Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2023 and 2022 and the acquisition date are as follows and are approximate values: December 31, 2021 December 31, 2023 December 31, 2022 Acquisition Date Net revenue 5 year average annual growth rate 22 % 28 % 38 % Market price of risk adjustment for revenue (continuous) 7 % 11 % 11 % Revenue volatility 21 % 20 % 21 % Discount rate 7 % 8 % 4 % Years remaining in earn out period 3.8 4.8 5.8 Undiscounted estimated remaining earn out payments $ millions $ 243 - $ 320 $ 247 - $ 320 $ 277 - $ 320 As the WestEnd Acquisition was effective at market close on December 31, 2021, the Company’s operating results for 2021 do not include WestEnd. The following Unaudited Pro Forma Condensed Combined Statement of Operations is provided for illustrative purposes only and assumes that the acquisition occurred on January 1, 2020. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. The historical consolidated financial information of the Company and WestEnd has been adjusted to give effect to unaudited pro forma events that are directly attributable to the WestEnd Acquisition. These amounts have been calculated after adjusting the results of WestEnd and the Company to reflect additional interest expense, intangible asset amortization, acquisition-related costs, transaction-related compensation costs and income taxes that would have been expensed assuming the WestEnd Acquisition was consummated on January 1, 2020. Unaudited Year Ended December 31, (in thousands, except per share amount) 2021 Revenue $ 936,609 Net income 280,980 Earnings per share of common stock Basic $ 4.13 Diluted $ 3.79 Weighted average number of shares outstanding Basic 67,976 Diluted 74,151 Acquisition-related costs Costs related to acquisitions of businesses and assets are summarized below and include legal and filing fees, advisory services, mutual fund proxy voting costs and other one‑time expenses related to the transactions. Included in USAA AMCO acquisition-related costs in 2021 is a liability for one-time payments for assets not acquired in the transaction. Costs related to acquisitions were expensed in 2023, 2022 and 2021 and are included in acquisition‑related costs in the Consolidated Statements of Operations. Acquisition-related costs (in thousands) 2023 2022 2021 USAA AMCO $ - $ - $ 5,534 NEC - 112 2,605 WestEnd 47 139 8,102 Other 170 283 21 Total acquisition-related costs $ 217 $ 534 $ 16,262 Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. The following table presents a rollforward of restructuring and integration liabilities, which as of December 31, 2023, 2022 and 2021 were included in accounts payable and accrued expenses on the Consolidated Balance Sheets. (in millions) 2023 2022 2021 Liability balance, beginning of period $ 0.3 $ 0.3 $ 1.0 Severance expense USAA AMCO Acquisition — — 1.4 Other 0.6 0.3 0.4 Contract termination expense — 0.5 — Integration costs USAA AMCO Acquisition — — 0.5 Other — 0.1 0.3 Restructuring and integration costs 0.6 0.9 2.6 Settlement of liabilities ( 0.5 ) ( 0.9 ) ( 3.3 ) Liability balance, end of period $ 0.4 $ 0.3 $ 0.3 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the fair value hierarchy contains three levels: • Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. • Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured. • Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability. The following table presents assets and liabilities measured at fair value on a recurring basis: As of December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 109,183 $ 109,183 $ — $ — Investments in proprietary funds 534 534 — — Deferred compensation plan investments 31,274 31,274 — — Total financial assets $ 140,991 $ 140,991 $ — $ — Financial liabilities Contingent consideration arrangements $ ( 217,200 ) $ — $ — $ ( 217,200 ) Total financial liabilities $ ( 217,200 ) $ — $ — $ ( 217,200 ) As of December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 24,575 $ 24,575 $ — $ — Investments in proprietary funds 466 466 — — Deferred compensation plan investments 26,800 26,800 — — Interest rate swap 46,931 — 46,931 — Total financial assets $ 98,772 $ 51,841 $ 46,931 $ — Financial liabilities Contingent consideration arrangements $ ( 230,400 ) $ — $ — $ ( 230,400 ) Total financial liabilities $ ( 230,400 ) $ — $ — $ ( 230,400 ) Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets. On October 30, 2023, the Company entered into an agreement to terminate the Swap effective as of that date. As of December 31, 2022, Level 2 assets included amounts receivable under the Swap, which were included in the Consolidated Balance Sheets in other assets. Pricing was determined based on a third party, model-derived valuation in which all significant inputs are observable in active markets. Refer to Note 12, Derivatives, for further detail on the Swap. Contingent consideration arrangements include the WestEnd earn-out payment liability at December 31, 2023 and the USAA AMCO and WestEnd earn-out payment liabilities at December 31, 2022. Contingent consideration arrangements are included in consideration payable for acquisition of business in the Consolidated Balance Sheets. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the WestEnd Acquisition earn-out payment liability include the WestEnd net revenue projected growth rate, revenue volatility, market price of risk and discount rate. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk and discount rate. For the WestEnd contingent consideration arrangement, an increase in the projected growth rate for revenue results in a higher fair value for the earn-out payment liability while an increase in the discount rate results in a lower fair value for the earnout payment liability. An increase in the market price of risk and revenue volatility results in a lower fair value. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the WestEnd Acquisition. Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2023, 2022 and 2021, respectively: (in thousands) Contingent Balance, December 31, 2021 $ 308,500 USAA AMCO third annual earn-out payment ( 37,500 ) USAA AMCO change in fair value measurement ( 3,600 ) WestEnd change in fair value measurement ( 37,000 ) Balance, December 31, 2022 230,400 USAA AMCO fourth and final annual earn-out payment ( 36,436 ) USAA AMCO change in fair value measurement 8,736 WestEnd change in fair value measurement 14,500 Balance, December 31, 2023 $ 217,200 There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the years ended December 31, 2023 and 2022. The Company recognizes transfers at the end of the reporting period. The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt as of December 31, 2023 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6. Related‑Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the VictoryShares, collective trust funds that it sponsors (the “Victory Collective Funds”), the NEC Funds and other pooled investment vehicles that it sponsors, to be related parties as a result of its advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCS have with the Victory Funds and has invested a portion of its balance sheet cash in the Victory Treasury Money Market Trust and earns interest on the amount invested in this fund. The Company receives investment management, administrative and compliance fees in accordance with contracts that VCM has with the VictoryShares. We also receive investment management fees from the Victory Collective Funds, the NEC Funds and other pooled investment vehicles under VCM’s advisory contracts with these funds. In addition, VCTA receives fees for transfer agency services under contracts with the Victory Funds III and sub-transfer agency services under contracts with the Victory Funds for member class shares. Director fees payable by the Company in cash and contributions made under the Director Deferred Compensation Plan for non-employee members of our Board of Directors are included in general and administrative expense in the Consolidated Statements of Operations. The table below presents balances and transactions involving related parties included in the Consolidated Balance Sheets and Consolidated Statements of Operations. • Included in cash and cash equivalents is cash held in the Victory Treasury Money Market Trust. • Included in receivables (investment management fees) are amounts due from the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles for investment management services. • Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds for fund administration services and compliance services, amounts due from the VictoryShares for fund administration services, amounts due from the Victory Funds III for transfer agent services and amounts due from the Victory Funds for sub-transfer agent services. • Included in prepaid expenses are amounts paid by VCM that will be invoiced to the NEC Funds in subsequent periods. • Included in revenue (investment management fees) are amounts earned for investment management services provided to the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles. • Included in revenue (fund administration and distribution fees) are amounts earned for fund administration and compliance services, transfer agent services and sub-transfer agent services. • Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as investments in proprietary funds and deferred compensation plan investments and dividend income on investments in the Victory Treasury Money Market Trust are recorded in interest income and other income (expense) in the Consolidated Statements of Operations. • Amounts due to the Victory Funds, the VictoryShares and other pooled investment vehicles for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the Consolidated Balance Sheets and represent consideration payable to customers. As of December 31, (in thousands) 2023 2022 Related party assets Cash and cash equivalents $ 109,183 $ 24,575 Receivables (investment management fees) 46,217 44,218 Receivables (fund administration and distribution fees) 14,238 14,379 Prepaid expenses 730 1,097 Investments (investments in proprietary funds, fair value) 534 466 Investments (deferred compensation plan investments, fair value) 31,143 24,852 Total $ 202,045 $ 109,587 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 5,641 $ 5,838 Year ended December 31, (in thousands) 2023 2022 2021 Related party revenue Investment management fees $ 488,132 $ 510,900 $ 566,775 Fund administration and distribution fees 180,152 190,090 215,726 Total $ 668,284 $ 700,990 $ 782,501 Related party expense General and administrative $ 506 $ 415 $ 521 Related party other income (expense) Interest income and other income (expense) $ 6,531 $ ( 2,199 ) $ 5,470 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | NOTE 7. Investments As of December 31, 2023 and 2022, the Company had investments in proprietary funds and deferred compensation plan investments. Investments in proprietary funds consist entirely of seed capital investments in certain Victory Funds. Deferred compensation plan investments are held under deferred compensation plans and include Victory Funds and third party mutual funds. Unrealized and realized gains and losses on investments in proprietary funds and deferred compensation plan investments are recorded in earnings as interest income and other income (expense). Investments in Proprietary Funds The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2023 $ 569 $ 55 $ ( 90 ) $ 534 As of December 31, 2022 551 29 ( 114 ) 466 The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the years ended December 31, 2023, 2022 and 2021: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2023 $ 32 $ 4 $ — For the year ending December 31, 2022 295 — ( 42 ) For the year ending December 31, 2021 215 50 — Deferred Compensation Plan Investments The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2023 $ 30,109 $ 1,610 $ ( 445 ) $ 31,274 As of December 31, 2022 27,801 529 ( 1,530 ) 26,800 The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the years ended December 31, 2023, 2022 and 2021: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2023 $ 11,147 $ 89 $ ( 440 ) For the year ending December 31, 2022 23,714 2,225 ( 1,966 ) For the year ending December 31, 2021 9,662 1,315 ( 59 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 8. Property and Equipment The following table presents property and equipment as of December 31, 2023 and 2022: As of December 31, (in thousands) 2023 2022 Equipment, purchased software and implementation costs $ 40,713 $ 33,925 Leasehold improvements 4,381 4,380 Furniture and fixtures 3,055 3,036 Total 48,149 41,341 Accumulated depreciation and amortization ( 28,571 ) ( 20,195 ) Total property and equipment, net $ 19,578 $ 21,146 Depreciation and amortization expense for property and equipment was $ 8.8 million, $ 8.0 million and $ 6.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE 9. Goodwill and Other Intangible Assets The following table presents changes in the goodwill balance for the periods ended December 31, 2023 and 2022: As of December 31, (in thousands) 2023 2022 Balance, beginning of period $ 981,805 $ 981,805 Balance, end of period $ 981,805 $ 981,805 There were no impairments to goodwill recognized during the years ended December 31, 2023, 2022 or 2021. Identifiable Intangible Assets The following table presents a summary of indefinite‑lived intangible assets by type: Fund Agent and Trade (in thousands) Contracts Names Totals December 31, 2021 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2022 balance $ 1,113,000 $ 23,700 $ 1,136,700 Impairment — ( 3,770 ) ( 3,770 ) Transfers to definite-lived intangible assets — ( 3,130 ) ( 3,130 ) December 31, 2023 balance $ 1,113,000 $ 16,800 $ 1,129,800 In the third quarter of 2023, the Company recognized a $ 3.8 million impairment loss on an indefinite-lived trade name asset primarily due to changing the asset’s estimated remaining useful life. The asset was transferred to definite lived intangible assets and the remaining book value of the asset is being amortized on a straight-line basis over a period that is shorter than the asset’s economic life. The impairment loss is recorded in depreciation and amortization in the Consolidated Statements of Operations. There were no impairments to indefinite-lived intangible assets recognized in 2022 and 2021. The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2022 $ 310,286 $ 12,068 $ 42,332 $ 7,547 $ 372,233 Accumulated amortization ( 143,530 ) ( 8,443 ) ( 34,866 ) ( 7,457 ) ( 194,296 ) Net book value - December 31, 2022 $ 166,756 $ 3,625 $ 7,466 $ 90 $ 177,937 Weighted average useful life (yrs) 8.4 0.7 0.8 1.2 5.1 Gross book value - December 31, 2023 $ 310,286 $ 12,068 $ 45,462 $ 7,547 $ 375,363 Accumulated amortization ( 163,309 ) ( 12,068 ) ( 40,446 ) ( 7,508 ) ( 223,331 ) Net book value - December 31, 2023 $ 146,977 $ — $ 5,016 $ 39 $ 152,032 Weighted average useful life (yrs) 7.4 — 3.2 0.5 7.1 Amortization expense for definite‑lived intangible assets for the years ended December 31, 2023, 2022 and 2021 was $ 29.0 million, $ 35.2 million and $ 12.6 million, respectively, and is recorded in depreciation and amortization in the Consolidated Statements of Operations. There were no impairments to definite-lived intangible assets recognized in 2023, 2022 or 2021. The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter: 2024 $ 21,217 2025 21,055 2026 20,707 2027 19,623 2028 17,680 Thereafter 51,750 Total $ 152,032 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10. Income Taxes The following table presents the provision for income taxes for the years ended December 31, 2023, 2022 and 2021: (in thousands) 2023 2022 2021 Current tax expense (benefit): Federal $ 32,457 $ 30,723 $ 42,845 State 8,554 8,055 9,929 Foreign 201 90 ( 9 ) Total current tax expense 41,212 38,868 52,765 Deferred tax expense (benefit): Federal 17,951 29,263 15,716 State 3,618 6,654 3,742 Foreign ( 30 ) ( 263 ) 30 Total deferred tax expense 21,539 35,654 19,488 Income tax expense $ 62,751 $ 74,522 $ 72,253 As of December 31, 2023, 2022 and 2021, the Company had no material liability for unrecognized tax benefits. The effective tax rate for the years ended December 31, 2023, 2022 and 2021 differs from the United States federal statutory rate primarily as a result of state and local income taxes and excess tax benefits on share-based compensation. The following table presents the tax rates for the years ended December 31, 2023, 2022 and 2021. 2023 2022 2021 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 21.0 % State income tax rate, net of federal tax benefit 3.3 % 3.3 % 3.2 % Excess tax benefits on share-based compensation ( 2.3 ) % ( 3.4 ) % ( 3.4 ) % Foreign taxes and other 0.7 % 0.4 % ( 0.2 ) % Income tax expense 22.7 % 21.3 % 20.6 % Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax reporting purposes. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities as well as projections of future taxable income during the periods in which temporary differences are expected to reverse. Based on the consideration of these facts, the Company believes it is more likely than not that all of its gross deferred tax assets will be realized in the future, and as a result, has not recorded a valuation allowance on these amounts as of December 31, 2023 and 2022. (in thousands) 2023 2022 Deferred tax assets: Definite-lived intangibles $ 23,516 $ 22,565 Share-based compensation expense 4,717 6,234 Acquisition-related costs 3,979 4,504 Deferred compensation 9,108 7,276 Restructuring expenses 1,223 1,337 Contingent consideration arrangements 286 337 Unrealized loss on deferred compensation investments — 240 R&E expenditures 2,940 1,220 Other 300 442 Total deferred tax assets 46,069 44,155 Deferred tax liabilities: Indefinite-lived intangibles 149,320 127,973 Goodwill 8,944 6,045 Debt issuance costs 2,146 3,026 Depreciation 3,157 3,695 OCI - Swap gain and cumulative translation adjustment 10,685 11,317 Prepaid expenses 241 237 Unrealized gain on deferred compensation investments 290 — Total deferred tax liabilities 174,783 152,293 Deferred tax liability, net $ ( 128,714 ) $ ( 108,138 ) As of December 31, 2023 and 2022, the Company had no material net operating loss carryforwards. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. As of December 31, 2023, U.S. federal income tax returns for 2020, 2021 and 2022 are open and therefore subject to examination. State and local income tax returns filed are generally subject to examination from 2019 to 2022. We have analyzed our tax positions for all open years and have concluded that no additional provision for income tax is required in the consolidated financial statements. The Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months. The Organization for Economic Co-operation and Development has released a framework (“Pillar 2”) to introduce a global minimum tax of 15 % for companies with global revenues and profits above certain thresholds. Certain aspects of Pillar 2 are effective January 1, 2024 and other aspects are effective January 1, 2025. Although the U.S. has not yet enacted legislation to adopt Pillar 2, certain countries have already adopted, or are in the process of adopting, legislation to implement Pillar 2. The Company continues to analyze Pillar 2 but does not currently expect it to have a material impact on our effective tax rate or on our consolidated balance sheet, statement of operations or statement of cash flows. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 11. Debt 2019 Credit Agreement On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company entered into the 2019 Credit Agreement, repaid all indebtedness outstanding under the prior credit agreement (the “2018 Credit Agreement”), and terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among Victory, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained a seven-year term loan in an aggregate principal amount of $ 1.1 billion (the “2019 Term Loans”) and established a five-year revolving credit facility (which was unfunded as of the closing date) with aggregate commitments of $ 100.0 million (with a $ 10.0 million sub-limit for the issuance of letters of credit). The obligations of the Company under the 2019 Credit Agreement are guaranteed by the Company’s domestic subsidiaries (other than VCS) (the “Guarantors”) and secured by substantially all of the assets of the Company and the Guarantors, subject in each case to certain customary exceptions. The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2019 Credit Agreement contains a financial performance covenant, requiring a maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0 % of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of December 31, 2023 and 2022, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant. First Amendment Amounts outstanding under the 2019 Credit Agreement originally accrued interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves) plus a margin of 3.25 % or an alternate base rate plus a margin of 2.25 %. On January 17, 2020, the Company entered into the First Amendment (the “First Amendment”) to the 2019 Credit Agreement with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the First Amendment, the Company refinanced the 2019 Term Loans with replacement term loans in an aggregate principal amount of $ 952.0 million (the “2020 Term Loans”). The 2020 Term Loans provided for substantially the same terms as the 2019 Term Loans, including the same maturity date of July 1, 2026 , except that the 2020 Term Loans reduced the applicable margin on LIBOR by 75 basis points , resulting in an applicable margin on LIBOR under the 2020 Term Loans of 2.50 %. Second Amendment On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the Second Amendment, the Company repriced the 2020 Term Loans with replacement term loans in an aggregate principal amount of $ 755.7 million (the “Repriced Term Loans”). The Repriced Term Loans provided for substantially the same terms as the 2020 Term Loans, including the same maturity date of July 2026 , except that the Repriced Term Loans reduced the applicable margin on LIBOR by 25 basis points , resulting in an applicable margin on LIBOR under the Repriced Term Loans of 2.25 %. The Company incurred costs of $ 0.4 million related to the Second Amendment, which were recorded in general and administrative expense in the Consolidated Statements of Operations. Third Amendment On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $ 505.0 million and used the proceeds to fund the WestEnd Acquisition and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans will mature in December 2028 and, until the Fourth Amendment to the 2019 Credit Agreement, accrued interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25 % or an alternate base rate plus a margin of 1.25 %. Original issue discount was $ 2.5 million for the 2021 Incremental Term Loans. The Company incurred a total of $ 9.1 million of other third party costs related to the 2021 Incremental Term Loans, which were recorded as term loan debt issuance costs. Fourth Amendment On September 23, 2022, the Company entered into the Fourth Amendment (the “Fourth Amendment”) to the 2019 Credit Agreement to change the interest rate on its debt from LIBOR to a rate based on the secured overnight financing rate (“SOFR”) plus a ten-basis point credit spread adjustment. There was no change to the applicable margin on the referenced rate from the Fourth Amendment. The LIBOR rate loans outstanding as of the Fourth Amendment’s effective date continued as LIBOR rate loans until the end of their then current interest periods. The 2021 Incremental Term Loans converted into Term SOFR loans on September 30, 2022, while the Repriced Term Loans converted into Term SOFR loans on October 6, 2022. Also on October 6, 2022, the interest periods for the Repriced Term Loans and 2021 Incremental Term Loans were aligned and the three-month Term SOFR rate was elected for all the Company’s term loans. The Company has continued to elect the three-month Term SOFR rate for all of the term loans outstanding under the 2019 Credit Agreement since executing the Fourth Amendment. The following table presents the components of long-term debt in the Consolidated Balance Sheets as of December 31, 2023 and 2022. Interest Rate Effective Interest Rate (in thousands) 2023 2022 2023 2022 2023 2022 Term Loans Due July 2026 $ 630,680 $ 630,680 7.77 % 5.96 % 8.17 % 6.36 % Due December 2028 371,028 371,028 7.77 % 5.96 % 8.10 % 6.29 % Term loan principal outstanding 1,001,708 1,001,708 Unamortized debt issuance costs ( 8,753 ) ( 11,299 ) Unamortized debt discount ( 3,686 ) ( 4,895 ) Long-term debt $ 989,269 $ 985,514 Debt issuance costs related to the 2019 Credit Agreement totaled $ 48.7 million at December 31, 2023 and 2022 and are reflected net of accumulated amortization and loss on debt extinguishment of $ 40.0 million and $ 37.4 million, respectively. Debt issuance costs of $ 3.7 million at December 31, 2023 and 2022 related to the revolving credit facility are included in other assets in the Consolidated Balance Sheets and are reflected net of accumulated amortization and loss on debt extinguishment of $ 3.5 million and $ 3.0 million as of December 31, 2023 and 2022, respectively. Debt discount related to the Term Loans totaled $ 23.3 million at December 31, 2023 and 2022 and is reflected net of accumulated amortization and loss on debt extinguishment of $ 19.6 million and $ 18.4 million, respectively. There were no repayments of outstanding term loans under the 2019 Credit Agreement in 2023. In 2022, a total of $ 149.5 million of the outstanding term loans under the 2019 Credit Agreement was repaid or repurchased and retired. The Company recognized a $ 2.6 million loss on debt extinguishment in 2022 due to the repayments and repurchases of term loan principal, which consisted of the write-off of $ 2.4 million and $ 0.7 million of unamortized debt issuance costs and debt discount, respectively, net of a $ 0.5 million gain on repurchases. In 2021, a total of $ 142.0 million of the outstanding term loans under the 2019 Credit Agreement was repaid or repurchased and retired. The Company recognized a $ 4.6 million loss on debt extinguishment in 2021 due to the repayments and repurchases of term loan principal, which consisted of the write-off of $ 2.9 million and $ 1.7 million of unamortized debt issuance costs and debt discount, respectively. The following table presents the components of interest expense and other financing costs on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021. (in thousands) 2023 2022 2021 Interest expense $ 75,016 $ 42,715 $ 17,250 Amortization of debt issuance costs 3,029 3,207 2,332 Amortization of debt discount 1,210 1,270 1,098 Interest rate swap (income) expense ( 15,726 ) ( 3,684 ) 3,602 Amortization of deferred gain on terminated interest rate swap ( 2,785 ) — — Other 538 456 370 Total $ 61,282 $ 43,964 $ 24,652 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 12. Derivatives Interest Rate Swap On March 27, 2020, the Company entered into the Swap to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Company does not purchase or hold any derivative instruments for trading or speculative purposes. Under the terms of the original Swap agreement, the Company paid interest at a fixed rate of interest on a quarterly basis and received interest at the three-month LIBOR rate in effect for that quarter. On September 26, 2022, the Company and the Swap counterparty executed an amendment to the Swap to update LIBOR conventions to SOFR conventions and to modify the fixed rate for the change from three-month LIBOR to three-month Term SOFR effective on October 6, 2022. There was no change to the $ 450 million notional value, the July 1, 2026 expiration date, the quarterly payment frequency or the designated three-month maturity from the Swap Amendment. The interest rate effectively fixed by the Swap on $ 450 million of the Company’s outstanding term loan debt through July 1, 2026 changed from 3.215 % to 3.149 % as a result of the amendment to the Swap. The Company elected to apply certain optional expedients available under ASC 848 providing relief from contract modification and hedge accounting requirements to the amendments to the Swap agreement. As a result, the Company was not required to evaluate whether the modifications to the Swap agreement resulted in the establishment of a new contract or the continuation of an existing contract and elected not to remeasure the contract at the modification date or reassess its previous accounting determination. The modified contract is accounted for, and presented as, a continuation of the existing contract. The Company also elected to change the contractual terms of the Swap without dedesignating the existing hedging relationship and redesignating a new hedging relationship. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap was assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. Since inception, the Swap was deemed to be highly effective. The Swap was designated as a cash flow hedge. Accordingly, the Swap was measured at fair value with mark-to-market gains or losses deferred and included in AOCI, net of tax, to the extent the hedge was determined to be effective. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affected earnings. Cash flows from the Swap are classified as operating cash flows in the Consolidated Statements of Cash Flows consistent with the classification of cash flows from the hedged transactions. On October 30, 2023, the Company monetized the gain on the Swap and entered into an agreement to terminate the Swap ("Swap Termination Agreement"). The Swap Termination Agreement was effective on October 30, 2023. Under the Swap Termination Agreement, the Swap counterparty agreed to pay the Company $ 43.4 million in cash, which was comprised of the $ 45.8 million value of the Swap on the termination date inclusive of $ 1.4 million of interest receivable less $ 2.4 million in swap unwind costs. As a result of the Swap Termination Agreement, the Company recorded a $ 44.4 million deferred gain in AOCI, before tax, replacing the $ 44.4 million fair value of the Swap in AOCI, before tax. The deferred gain on the Swap monetization is being amortized on a straight-line basis through July 1, 2026 and is included in interest expense and other financing costs on the Consolidated Statements of Operations. For the year ended December 31, 2023, the Company recorded $ 2.8 million in amortization of deferred gain on Swap monetization. As of December 31, 2023, the unamortized deferred gain on Swap monetization was $ 41.6 million, before tax. The Swap unwind costs of $ 2.4 million were recorded in general and administrative costs on the Consolidated Statement of Operations for the year ended December 31, 2023. Due to the termination of the Swap, there was no amount receivable from the Swap counterparty at December 31, 2023. The amount receivable at December 31, 2022 of $ 3.0 million is recorded in other assets on the Consolidated Balance Sheets. The following tables summarize the classification of the Swap in our consolidated financial statements (in thousands): Balance Sheets Description December 31, 2023 December 31, 2022 Other assets Fair value of interest rate swap $ — $ 46,931 Notional amount — 450,000 Year ended December 31, Statements of Operations Description 2023 2022 2021 Interest income (expense) and other financing costs Reclassification from AOCI – Swap income/expense $ 15,726 $ 3,684 $ ( 3,602 ) Interest income (expense and other financing costs Reclassification from AOCI – Amortization of Swap deferred gain 2,785 — — Total $ 18,511 $ 3,684 $ ( 3,602 ) Year ended December 31, Statements of Comprehensive Income Description 2023 2022 2021 Other comprehensive income (loss) Swap income (loss), net of tax $ ( 1,970 ) $ 29,719 $ 13,468 Other comprehensive income (loss) Amortization of deferred gain on terminated Swap, net of tax ( 2,184 ) — — Total $ ( 4,154 ) $ 29,719 $ 13,468 |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | NOTE 13. Equity Method Investment In September 2020, the Company acquired, through a wholly owned subsidiary, a 15 % interest voting share and income share in Alderwood and made a capital contribution to Alderwood of $ 1.5 million in cash. The Company also committed to contribute additional capital of $ 4.5 million to Alderwood and $ 50.0 million to a private fund to be launched by Alderwood, subject to certain terms and conditions. Alderwood’s operating entity, Alderwood Capital, was a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. In January 2022, the Company signed an amendment to the Alderwood members’ agreement (“Alderwood Amendment”) and made an additional $ 1.5 million capital contribution to Alderwood. The Alderwood Amendment reduced the Company’s commitment to contribute additional capital to Alderwood from $ 4.5 million to $ 3.0 million. In July 2022, Alderwood decided to wind down its business and operations, including the business and operations of its private fund. On July 31, 2022, the Company’s wholly owned subsidiary retired as a member of Alderwood thereby terminating the Company’s commitment to contribute an additional $ 3.0 million in capital to Alderwood and $ 50.0 million in capital to Alderwood’s private fund. Alderwood returned the $ 1.5 million in capital contributed to Alderwood pursuant to the Alderwood Amendment, and the Company recognized a loss on disposal of its investment in Alderwood of $ 0.8 million. Given the level of ownership interest in Alderwood, an English limited liability partnership, and the fact that Alderwood maintained specific ownership accounts for investors, the Company accounted for its investment in Alderwood using the equity method of accounting. Losses from equity method investments are recorded in interest income and other income (expense) in the Consolidated Statements of Operations. For the years ended December 31, 2022 and 2021, losses from equity method investments totaled $ 0.8 million and $ 0.3 million, respectively ($ 0 in 2023). As of December 31, 2023 and 2022, the Company had no equity method investments. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | NOTE 14. Equity Equity Structure Following the Company’s IPO in February 2018, authorized capital stock consisted of 400,000,000 shares of Class A common stock, $ 0.01 par value per share, 200,000,000 shares of Class B common stock, $ 0.01 par value per share, and 10,000,000 shares of “blank check” preferred stock, $ 0.01 par value per share. The rights of the holders of Class A common stock and Class B common stock were identical, except voting and conversion rights. Each share of Class A common stock was entitled to one vote. Each share of Class B common stock was entitled to ten votes. Holders of the Company’s Class A common stock and Class B common stock would generally vote together as a single class, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Each share of Class B common stock was convertible into one share of the Company’s Class A common stock at any time, at the option of the holder, and would convert automatically upon termination of employment by an employee shareholder and upon transfers (subject to certain exceptions). Shares of Class B common stock would convert automatically into shares of Class A common stock at a one to one ratio upon the date the number of shares of Class B common stock then outstanding (including unvested restricted shares) was less than 10 % of the aggregate number of shares of Class A common stock and Class B common stock outstanding (including unvested restricted shares). In September 2021, the Company’s Board of Directors approved the elimination of the Company’s dual-class share structure, which was subsequently approved by the Company’s stockholders on November 19, 2021. On November 23, 2021 (the “Effective Date”), the Company filed an amended and restated certificate of incorporation authorizing capital stock consisting of 600,000,000 shares of common stock, $ 0.01 par value per share (“Common Stock”) and 10,000,000 shares of “blank check” preferred stock, $ 0.01 par value per share. Each share of the Company’s Class A common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was renamed as Common Stock and became one share of Common Stock. For comparative purposes, we now refer to each share of stock that was previously known as Class A common stock as Common Stock. Each share of Class B common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was converted into Common Stock on a one-for-one basis. As a result, the Company currently has one class of common stock entitling the holder to one vote per share. No shares of preferred stock were issued as of December 31, 2023. Share Rollforward The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2020 19,389 54,767 ( 3,183 ) ( 3,431 ) Issuance of shares 7 — — — Conversion of Class B shares to Common Stock 6,632 ( 6,632 ) — — Repurchase of shares — — ( 886 ) — Vesting of restricted share grants 4 1,604 — — Exercise of options 91 1,380 — — Shares withheld related to net settlement of equity awards — — ( 49 ) ( 1,031 ) Elimination of Class B share class 51,119 ( 51,119 ) ( 4,462 ) 4,462 Balance, December 31, 2021 77,242 — ( 8,580 ) — Issuance of shares 11 — — — Repurchase of shares — — ( 3,034 ) — Vesting of restricted share grants 844 — — — Exercise of options 2,431 — — — Shares withheld related to net settlement of equity awards — — ( 1,589 ) — Balance, December 31, 2022 80,528 — ( 13,203 ) — Issuance of shares 9 — — — Repurchase of shares — — ( 4,161 ) — Vesting of restricted share grants 786 — — — Exercise of options 1,081 — — — Shares withheld related to net settlement of equity awards — — ( 786 ) — Balance, December 31, 2023 82,404 — ( 18,150 ) — Shares Repurchased and Withheld Share Repurchase Program Six share repurchase programs were authorized from 2018 to 2021, each for $ 15.0 million of the Company’s Common Stock, that were completed in September 2019, June 2020, October 2020, May 2021, January 2022 and May 2022. In May 2022, the Company’s’ Board of Directors approved a new share repurchase program (the “2022 Share Repurchase Program”) authorizing the repurchase of up to $ 100.0 million of the Company’s Common Stock. The 2022 Share Repurchase Program was completed in March 2023 . In March 2023, the Company’s Board of Directors approved a new share repurchase program (the “2023 Share Repurchase Program”) authorizing the repurchase of up to $ 100.0 million of the Company’s Common Stock through December 31, 2025. The 2023 Share Repurchase Program was completed in December 2023 . In December 2023, the Company’s Board of Directors approved a new share repurchase program (the “2024 Share Repurchase Program”) authorizing the repurchase of up to $ 100.0 million of the Company’s Common Stock through December 31, 2025. Under the 2024 Share Repurchase Program, which took effect in December 2023, the Company may purchase its shares from time to time in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. The amount and timing of purchases under the 2024 Share Repurchase Program will depend on a number of factors including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The 2024 Share Repurchase Program can be suspended or discontinued at any time. In 2023, the Company repurchased 4.2 million shares of Common Stock at a total cost of $ 134.5 million, which included $ 1.0 million in excise taxes payable on share repurchases, for an average price of $ 32.33 per share. In 2022, the Company repurchased 3.0 million shares of Common Stock at a total cost of $ 87.3 million for an average price of $ 28.76 per share. In 2021, 0.9 million shares of Common Stock were repurchased under programs authorized by the Company’s Board of Directors at a total cost of $ 26.2 million for an average price of $ 29.53 per share. As of December 31, 2023, $ 95.2 million was available for future repurchases under the 2024 Share Repurchase Program, and a cumulative total of 11.3 million shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $ 295.8 million for an average price of $ 26.26 per share. Shares Withheld for net settlement of employee equity awards In 2023, 2022 and 2021, the Company net settled 0.8 million, 1.6 million and 1.1 million shares of Common Stock for $ 24.4 million, $ 45.0 million and $ 32.1 million to satisfy $ 18.6 million, $ 31.2 million and $ 27.0 million in employee tax obligations and $ 5.8 million, $ 13.8 million and $ 5.1 million in employee stock option exercise prices, respectively. Dividend Payments Dividends paid or payable for the years ended December 31, 2023, 2022 and 2021 totaled $ 85.4 million, $ 69.2 million and $ 37.2 million and included quarterly dividends of $ 84.2 million, $ 68.3 million and $ 36.1 million and cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock and stock option awards of $ 1.2 million, $ 0.9 million and $ 1.1 million, respectively. As of December 31, 2023 and 2022, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $ 1.2 million and $ 1.3 million, respectively, which was not recorded as a liability as of the balance sheet date. A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | NOTE 15. Share‑Based Compensation Equity Incentive Plans Prior to the Company’s IPO in 2018, equity-based awards were issued to executives, directors and key employees of the Company under the Victory Capital Holdings, Inc. Equity Incentive Plan (the “2013 Plan”) and the Outside Director Equity Incentive Plan (the “Director Plan”). In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the Victory Capital Holdings, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), and the Victory Capital Holdings, Inc. 2018 Employee Stock Purchase Plan (the “ESPP Plan”), each of which became effective upon the completion of the IPO. No further grants will be made under the 2013 Plan. The 2018 Plan authorizes the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other awards that may be settled in or based upon shares of the Company’s Common Stock. A total of 3,372,484 of Common Stock is available for issuance under the 2018 Plan, as determined by the Compensation Committee of the Company’s board of directors. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. In addition, shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again be available for issuance under the 2018 Plan. As of December 31, 2023, 799,111 shares of Common Stock remained available for issuance under the 2018 Plan. The Compensation Committee of the Company’s board of directors approves the terms and conditions for offerings under the ESPP Plan. A total of 350,388 shares of Common Stock is available for issuance under the ESPP Plan. As of December 31, 2023, 308,619 shares of Common Stock remained available for issuance under the ESPP Plan. Under the Company’s approved offerings under the ESPP Plan, shares of Common Stock are available for purchase at three month calendar intervals at a 5 percent discount from the market price on the purchase date, which is the last day of each calendar quarter during the six month offering period. Amounts purchased by an individual cannot exceed $ 25,000 worth of stock in any given calendar year. The ESPP Plan is a non-compensatory plan and includes no option features other than employees may change their contributions or withdraw from the plan once during each six month offering period during a specified time approved by the Company. All U.S.-based employees are eligible to participate in the ESPP. Grant Activity In 2023, the company issued grants for 539,597 restricted shares of Common Stock under the 2018 Plan. The 2023 grants included grants for 38,669 restricted shares of Common Stock that were fully vested on the grant date, grants for 24,140 restricted shares of Common Stock that vest over four years , 68,271 restricted shares of Common Stock that vest over two years , 258,908 restricted shares of Common Stock that vest over three years , 84,039 that have a cliff vesting of two years , 33,624 restricted shares that vest 33 % over two years and the rest in one year , and 31,946 restricted shares that vest 67 % over two years and the rest in one year . No stock option awards were issued in 2023. In 2022, the company issued grants for 655,542 restricted shares of Common Stock under the 2018 Plan. The 2022 grants included grants for 41,587 restricted shares of Common Stock that were fully vested on the grant date, grants for 3,108 restricted shares of Common Stock that vest over 33 months , 449,113 restricted shares of Common Stock that vest over two years , 158,051 restricted shares of Common Stock that vest over three years , and 3,683 restricted shares that vest based on performance conditions. No stock option awards were issued in 2022. In 2021, the Company issued grants for 270,824 restricted shares of Common Stock under the 2018 Plan. The 2021 grants included grants for 34,770 restricted shares of Common Stock that were fully vested on the grant date, grants for 227,019 restricted shares of Common Stock that vest over three years and 9,035 restricted shares of Common Stock that vest over two years . No stock option awards were issued in 2021. The following tables presents activity during the years ended December 31, 2023, 2022, and 2021 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2023 2022 2021 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 4.31 $ 7.57 2,884,180 $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 Forfeited 6.32 13.84 ( 650 ) 6.46 14.15 ( 451 ) 5.29 10.73 ( 79,271 ) Exercised 3.69 5.58 ( 1,081,677 ) 3.51 5.70 ( 2,430,579 ) 3.72 5.52 ( 1,470,620 ) Outstanding at end of the period $ 4.68 $ 8.76 1,801,853 $ 4.31 $ 7.57 2,884,180 $ 3.94 $ 6.71 5,315,210 Vested $ 4.66 $ 8.71 1,625,655 $ 4.27 $ 7.46 2,707,632 $ 3.88 $ 6.53 5,072,585 Unvested 4.85 9.23 176,198 4.85 9.24 176,548 5.28 10.60 242,625 Total intrinsic value of stock options exercised in 2023, 2022, and 2021 was $ 28.5 million, $ 54.9 million, and $ 39.5 million, respectively. Restricted Stock Awards For Year Ended December 31, 2023 2022 2021 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 25.38 1,153,515 $ 17.75 1,352,839 $ 14.99 2,827,008 Granted 30.25 539,597 31.01 655,542 27.29 270,824 Vested 22.96 ( 786,205 ) 17.50 ( 844,205 ) 14.62 ( 1,607,973 ) Forfeited 29.55 ( 53,159 ) 28.79 ( 10,661 ) 16.51 ( 137,020 ) Unvested at end of period $ 30.39 853,748 $ 25.38 1,153,515 $ 17.75 1,352,839 Share‑based compensation expense for equity awards is measured at the grant date, based on the estimated fair value of the award, and recognized over the requisite employee service period. Stock option awards have a ten year contractual life. The Company uses the Common Stock closing price on the grant date as the grant date fair value of restricted share awards. For stock option awards, the grant date fair value of stock option awards is computed using Black‑Scholes option pricing framework. Share-based Compensation Expense The Company recorded $ 16.5 million, $ 17.8 million and $ 17.6 million of share-based compensation expense related to the 2018 Plan and 2013 Plan in 2023, 2022 and 2021, respectively. Share-based compensation expense is recorded in personnel compensation and benefits in the Consolidated Statements of Operations. The related tax benefits were $ 4.0 million for 2023 and $ 4.3 million for 2022 and 2021. As of December 31, 2023, the Company expects to recognize total share-based compensation expense of $ 14.7 million over a weighted average period of 1.7 years. The total fair value of restricted share awards vested during the years ended December 31, 2023, 2022, and 2021 was $ 23.1 million, $ 24.2 million, and $ 45.2 million respectively. The aggregate intrinsic value of stock options currently exercisable at December 31, 2023, 2022 and 2021 was $ 41.6 million, $ 52.4 million and $ 152.0 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | NOTE 16. LEASES The Company determines if a contract is a lease at inception. We have leases primarily for office facilities and information technology equipment. All of our leases are classified as operating leases. Supplemental balance sheet information related to the Company’s operating leases as of December 31, 2023 and 2022 is as follows: (in thousands) December 31, 2023 December 31, 2022 Operating lease ROU assets (1) $ 9,665 $ 13,396 Current portion of operating lease liabilities (2) 4,675 5,056 Noncurrent portion of operating lease liabilities (2) 6,487 10,227 Total operating lease liabilities $ 11,162 $ 15,283 (1) ROU assets are recorded in other assets on the Consolidated Balance Sheets. (2) Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the Consolidated Balance Sheets. December 31, 2023 December 31, 2022 Weighted-average remaining lease term 4.0 years 4.4 years Weighted-average discount rate 4.7 % 4.6 % The components of lease expense and other lease information for the years ended December 31, 2023 and 2022 are as follows: Year Ended Year Ended (in thousands) December 31, 2023 December 31, 2022 Operating lease cost $ 5,207 $ 5,235 Short-term lease cost — 84 Variable lease cost 1,885 1,798 Gross lease cost 7,092 7,117 Sub-lease income ( 815 ) ( 787 ) Net lease cost $ 6,277 $ 6,330 Other lease information Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating leases $ 5,660 $ 5,023 Our leases have remaining lease terms of 1 year to 8 years. These leases gen erally contain renewal options for periods ranging from two to five years . Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments. Expenses associated with operating leases are recorded in general and administrative expenses on the Consolidated Statement of Operations. Variable lease costs, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease costs are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. Future undiscounted cash flows related to our operating leases and the reconciliation to operating lease liabilities as of December 31, 2023 are shown in the table below. (in thousands) As of December 31, 2023 2024 $ 5,058 2025 2,444 2026 1,623 2027 1,069 2028 474 Thereafter 1,454 Total undiscounted lease payments 12,122 Less: imputed interest 960 Total lease liabilities $ 11,162 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | NOTE 17. Employee Benefit Plans The Company maintains a defined contribution 401(k) Plan (the “401(k) Plan”), covering substantially all employees who have met the eligibility requirements. The 401(k) Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 and the Economic Growth and Tax Relief Reconciliation Act of 2001. In 2023, 2022 and 2021 the Company recognized expense o f $ 5.0 million, $ 4.8 million and $ 4.0 million in employer matched contributions, respectively. The Company sponsors a deferred compensation plan primarily for the benefit of a select group of management or highly compensated employees (“Employee DC Plan”) as a means to reward and motivate them. The Company purchases mutual funds as directed by the plan participants to fund its related obligations. Such securities are held in a rabbi trust for the participants, and under the terms of the trust agreement, the assets of the trust are available to satisfy the claims of the Company’s general creditors in the event of bankruptcy. Effective January 1, 2020, the Company created a deferred compensation plan for non-employee members of our board of directors (the “Director DC Plan”). Benefits payable under the Director DC Plan are payable from the Company’s general assets. Amounts contributed under the Director DC Plan and earnings on those amounts are subject to the claims of the Company’s general creditors. Gains and losses from fluctuations in value of deferred compensation plan investments are included in interest income and other income (expense) in the Consolidated Statements of Operations and are offset entirely by the corresponding changes in value of the deferred compensation liability. Changes in the value of the Employee DC Plan and Director DC Plan liabilities are recorded in personnel compensation and benefits and general and administrative expense, respectively, in the Consolidated Statements of Operations. Investments held under both deferred compensation plans are recorded in deferred compensation plan investments in the Consolidated Balance Sheets. The following table presents the components of deferred compensation plan-related expense related to the Employee DC Plan. (in thousands) 2023 2022 2021 Employee contributions $ 1,529 $ 1,872 $ 2,231 Employer contributions 683 936 975 Change in value of deferred compensation plan liability 2,754 ( 2,907 ) 5,527 Total $ 4,966 $ ( 99 ) $ 8,733 Expense related to the Director DC plan was de minimis for the years ended December 31, 2023, 2022 and 2021. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 18. Earnings Per Share The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in thousands, except per share amounts) 2023 2022 2021 Net income $ 213,157 $ 275,511 $ 278,389 Shares: Basic weighted average common shares outstanding 66,202 68,481 67,976 Assumed conversion of dilutive instruments 2,012 3,785 6,175 Diluted weighted average common shares outstanding 68,214 72,266 74,151 Earnings per share Basic: $ 3.22 $ 4.02 $ 4.10 Diluted: $ 3.12 $ 3.81 $ 3.75 For the years ended December 31, 2023, 2022, and 2021, the number of outstanding instruments excluded from the above computations of weighted average shares for diluted earnings per share because the effects would be anti‑dilutive was de minimis. Holders of non‑vested share‑based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Net Capital Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Net Capital Requirements | NOTE 19. Net Capital Requirements VCS is subject to the SEC Uniform Net Capital Rule (Rule 15c3‑1 under the Exchange Act) administered by the SEC and FINRA, which requires the maintenance of minimum net capital, as defined, and requires that the ratio of aggregate indebtedness to net capital, cannot exceed 15 to 1. Net capital and the related net capital requirement may fluctuate on a daily basis. At December 31, 2023, VCS had net capital under the Rule 15c3‑1 of $ 0.4 million, which was $ 0.3 million in excess of its minimum required net capital of $ 0.1 million. At December 31, 2022, VCS had net capital under the Rule 15c3‑1 of $ 0.4 million, which was $ 0.2 million in excess of its minimum required net capital of $ 0.2 million. The Company's ratio of aggregate indebtedness to net capital as of December 31, 2023 and 2022 was 5.15 to 1 and 8.25 to 1, respectively. Capital requirements may limit the amount of cash available for dividend from VCS to the parent company. VCS's cash and cash equivalents are generally not available for corporate purposes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 20. Accumulated Other Comprehensive INCOME (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2023, 2022, and 2021. Cash Flow Cumulative Hedges Translation (in thousands) (1)(2) Adjustment Total Balance, December 31, 2020 $ ( 7,573 ) $ 113 $ ( 7,460 ) Other comprehensive income (loss) before reclassification and tax 14,177 ( 49 ) 14,128 Tax impact ( 3,438 ) 13 ( 3,425 ) Reclassification adjustments, before tax 3,602 — 3,602 Tax impact ( 873 ) — ( 873 ) Net current period other comprehensive income (loss) 13,468 ( 36 ) 13,432 Balance, December 31, 2021 5,895 77 5,972 Other comprehensive income (loss) before reclassification and tax 42,842 ( 331 ) 42,511 Tax impact ( 10,327 ) 82 ( 10,245 ) Reclassification adjustments, before tax ( 3,684 ) — ( 3,684 ) Tax impact 888 — 888 Net current period other comprehensive income (loss) 29,719 ( 249 ) 29,470 Balance, December 31, 2022 35,614 ( 172 ) 35,442 Other comprehensive income (loss) before reclassification and tax 13,214 54 13,268 Tax impact ( 2,850 ) ( 14 ) ( 2,864 ) Reclassification adjustments, before tax (3) ( 18,511 ) — ( 18,511 ) Tax impact 3,993 — 3,993 Net current period other comprehensive income (loss) ( 4,154 ) 40 ( 4,114 ) Balance, December 31, 2023 $ 31,460 $ ( 132 ) $ 31,328 (1) Reclassifications out of AOCI(L) related to cash flow hedges are recorded in interest expense and other financing costs (2) On October 30, 2023, the Company terminated the Swap. The termination resulted in a $ 44.4 million deferred gain recorded in AOCI, before tax, and the elimination of the unrealized gain on cash flow hedge recorded in AOCI prior to the termination. The deferred gain is being amortization a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 12, Derivatives, for further information on the monetization of the interest rate swap gain. (3) Reclassification adjustments, before tax, includes $ 15,726 of income reclassified out of AOCI prior to the termination of the Swap and $ 2,785 of amortization of deferred gain following the termination of the Swap. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 21. Subsequent Events On February 8, 2024 , o ur Board of Directors declared a quarterly cash dividend of $ 0.335 per share on Victory common stock. The dividend is payable on March 25, 2024 , to stockholders of record on March 11, 2024 . |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all the shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if (i) the Company holds greater than 50 % voting interest in entities controlled through voting interests or if (ii) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution services and other management services and/or holding a minority interest. As of December 31, 2023 and 2022, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $ 31.7 million and $ 25.3 million, respectively which are included in investments in proprietary funds and deferred compensation plan investments in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it has an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. Upon the completion of the NEC Acquisition on November 1, 2021, VCM became the manager of certain general partner entities associated with the acquired NEC Funds. The Company has no equity investment in these general partner entities, which are non-consolidated VIEs, and has no share of these general partner entities’ income or losses. The Company owned a 15 % equity interest in Alderwood Partners LLP (“Alderwood”) from September 20, 2020 to July 31, 2022, when the Company retired as a member of Alderwood. The Company analyzed its investment in Alderwood under the voting interest model and determined that it did not have a controlling financial interest. The Company accounted for its Alderwood investment using the equity method of accounting. Refer to Note 13, Equity Method Investment, for additional information on Alderwood. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on the Company’s various revenue streams, refer to Note 3, Revenue. |
Distribution and Other Asset-Based Expenses | Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. |
Restructuring and Integration Costs | Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan or are the result of a continuing contractual obligation with no continuing economic benefit to the Company and include penalties incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. |
Investments | Investments Investments in Proprietary Funds Investments in proprietary funds include investments in affiliated mutual funds and are recorded in investments in proprietary funds, at fair value in the Consolidated Balance Sheets. Changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2023, 2022 and 2021. Deferred Compensation Plan Investments Deferred compensation plan investments include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Deferred compensation plan investments are recorded at fair value in the Consolidated Balance Sheets. Changes in value in deferred compensation plan investments are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's investments in proprietary funds and deferred compensation plan investments are valued using quoted market prices available in an active market, which is the net asset value of the funds. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not purchase or hold any derivative instruments for trading or speculative purposes. On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long-term debt. On October 30, 2023, the Company monetized the gain on the Swap and entered into an agreement to terminate the Swap effective as of that date. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap was assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. Since inception through termination, the Swap was deemed to be highly effective. The Swap was designated as a cash flow hedge. Accordingly, through the termination date, the Swap was measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss) (“AOCI”), net of tax, to the extent the hedge was determined to be effective. Upon termination of the Swap, the market-to market gain of $ 44.4 million, before tax, was replaced in AOCI by a realized gain of an equal amount. Gains and losses from the Swap are reclassified from AOCI in the same period during the which the hedged transaction affects earnings. Refer to Note 12, Derivatives, for further information. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years . Improvements to leased property are amortized on a straight‑line basis over the lesser of the useful life of the improvements or the term of the applicable lease. When assets are sold or retired, the related cost and accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in other income (expense) in the Consolidated Statements of Operations. Gains and losses resulting from the sale or disposal of assets as part of a restructuring plan are included in restructuring and integration costs in the Consolidated Statements of Operations. The cost of repairs and maintenance are expensed as incurred. Equipment and leasehold improvements are tested for impairment whenever changes in facts or circumstances indicate that the carrying amount of an asset may not be recoverable. |
Leases | Leases The Company’s leases consist primarily of real estate leases for office space. The Company determines if an arrangement is a lease at contract inception. A lease liability and a corresponding right-of-use ("ROU") asset are recognized on the commencement date for leases with terms longer than one year . Lease liabilities represent an obligation to make lease payments arising from a lease while ROU assets represent a right to use an underlying asset during the lease term. The lease liability is measured at the present value of the future lease payments over the lease term generally using the Company's incremental borrowing rate, which is determined through market sources. Lease components and non-lease components such as fixed maintenance and other costs are combined into one lease component and capitalized in lease liabilities. Variable lease payments, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease payments are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. A ROU asset is measured initially as the value of the lease liability plus initial direct costs and prepaid lease payments and less lease incentives received. The lease term includes periods covered by options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses on the Consolidated Statements of Operations. |
Capitalized Service Contract Implementation Costs | Capitalized Service Contract Implementation Costs The Company follows the internal-use software guidance in ASC 350-40 to determine for hosting arrangements that are service contracts which implementation costs to capitalize as assets. Costs incurred in the software application development stage such as customization, integration with Company software, coding and configuration are capitalized. Costs incurred in the preliminary project and post-implementation stages are expensed as incurred. Capitalized service contract implementation costs are expensed over the fixed, noncancelable term of the contract plus any reasonably certain renewal periods. The estimated term of the hosting arrangement is reassessed periodically, and any change is accounted for as a change in accounting estimate, with the remaining deferred costs recognized over the rest of the revised period. Amortization begins when the related component of the arrangement is ready for its intended use, and costs are evaluated for impairment on an annual basis. |
Segment Reporting | Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. |
Goodwill | Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, significant negative industry or economic trends and significant decreases in the Company’s market capitalization. The Company conducts the annual impairment assessment as of October 1 st and uses a qualitative approach to test for potential impairment of goodwill. If, after considering various factors, management determines that it is more likely than not that goodwill is impaired, the fair value of the reporting unit is compared to its carrying amount. A goodwill impairment charge is recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value. The assumptions used to estimate fair value include management's estimates of future growth rates, operating cash flows, discount rates and terminal value. These assumptions and estimates can change in future periods based on market movement and factors impacting the expected business performance. Changes in assumptions or estimates could materially affect the determination of our fair value. |
Intangible Assets | Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in or with institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA), unified managed account/model (UMA) intermediaries and private funds. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to, continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1 st using a qualitative approach which requires that positive and negative evidence collected as a result of considering various factors be weighed in order to determine whether it is more likely than not that an indefinite‑lived intangible asset is impaired. In addition, periodically management reconsiders whether events or circumstances continue to support an indefinite useful life. Indicators monitored by management that may indicate an indefinite useful life is no longer supported include a significant decline in the level of managed assets, changes to legal, regulatory or contractual provisions of the renewable investment advisory contracts and reductions in underlying operating cash flows. Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. |
Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable | Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, the VictoryShares and other pooled funds sponsored by Victory and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds and the VictoryShares and transfer agent fees due from the Victory Portfolios III and sub-transfer agent fees due from the Victory Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2023, 2022 and 2021, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2023, 2022 and 2021. |
Other Receivables | Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2023 and 2022. |
Advertising and Marketing Cost | Advertising and Marketing Costs In December 2022, the Company entered into a long-term partnership with Spurs Sports & Entertainment and executed naming rights and partnership agreements for the team’s new performance center. The agreements, which end in 2033, grant the Company exclusive naming rights, sponsorship, signage, advertising and other promotional rights and benefits for the new performance center. Payments made under the agreements are deferred and expensed on a straight-line basis over the term of the arrangement. The related advertising and marketing expense is recorded in general and administrative expense in the Consolidated Statements of Operations. The balance of amounts paid less amortized expense are included in the Consolidated Balance Sheets in other assets when cumulative payments exceed amortized expense and in other liabilities when amortized expense exceeds cumulative payments. |
Share-Based Compensation Arrangements | Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. |
Earnings Per Share | Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s Common Stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s Common Stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. |
Deferred Financing Fees | Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company expenses the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. |
Debt Modification | Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $ 0.4 million in costs related to debt modifications in 2021 ($ 0 in 2023 and 2022). The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. |
Treasury Stock | Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained earnings in the Consolidated Balance Sheets. |
Foreign Currency Transactions | Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount as of December 31, 2023, 2022 and 2021. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the Consolidated Statements of Operations. Foreign exchange gains and losses for the years ended December 31, 2023, 2022 and 2021 were immaterial. |
Income Taxes | Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets, goodwill, depreciation, debt issuance costs and mark-to-market gains on the Swap. Deferred tax assets are generally attributable to definite‑lived intangible assets, share-based compensation expense, deferred compensation and acquisition-related costs. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more-likely-than-not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a more‑likely‑than‑not threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. |
Loss Contingencies | Loss Contingencies The Company continuously reviews investor, client, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting and allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values are determined in accordance with the guidance in ASC 820, Fair Value Measurement, based on valuations performed by the Company and independent valuation specialists. |
Asset Acquisitions | Asset Acquisitions When a group of assets is acquired that does constitute a business, the Company accounts for the transaction as an asset acquisition. The cost of the acquisition, which includes transaction costs directly related to the transaction and consideration paid, is allocated on a relative fair value basis to the net assets acquired. |
Contingent and Deferred Payment Arrangements | Contingent and Deferred Payment Arrangements The Company periodically enters into contingent and/or deferred payment arrangements in connection with its business combinations. Liabilities under contingent and deferred payment arrangements are recorded in consideration payable for acquisition of business in the Consolidated Balance Sheets. In contingent payment arrangements, the Company agrees to pay additional consideration to the sellers based on future performance, such as future net revenue levels. The Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in the Consolidated Balance Sheets at estimated fair value. In deferred payment arrangements, the Company records a liability in the Consolidated Balance Sheets at the time a business combination is consummated for the present value, which is the estimated fair value, of the future fixed dollar contractual payments. Contingent payment obligations are remeasured at fair value each reporting date taking into consideration changes in expected payments, and the change in fair value is recorded in the current period as a gain or loss. Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The Company accretes obligations under deferred payment arrangements to their expected payment amounts over the period covered by the arrangement. |
Compensatory Payment Arrangements | Compensatory Payment Arrangements In connection with business combinations, the Company evaluates whether any portion of the transaction consideration is in exchange for elements other than the acquired business and should be accounted for as a separate transaction apart from the business combination. If based on the substance of the contingent payment arrangement, the Company determines that the payments are compensation for post-acquisition employee services, the Company considers this a compensatory payment arrangement and no liability is recorded for the payments on the acquisition date. The related expense, which is the total amount of compensation management estimates will be paid, is accrued on a straight-line basis over the estimated service period, which is the time period when management determines that it is probable that the performance conditions will be achieved. At each reporting date, cumulative expense recognized under the compensatory payment arrangement will be at least equal to the cumulative dollar amount actually paid out and currently payable under the terms of the related purchase agreement. If there is a significant change in the estimated service period and/or estimated total compensation amount, management generally adjusts the amount of expense recorded on a prospective basis. Expense recognized under compensatory payment arrangements is recorded in personnel compensation and benefits in the Consolidated Statements of Operations and the related liability is included in accrued compensation and benefits in the Consolidated Balance Sheets. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in 2023 • Expected Credit Losses : In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities was January 1, 2020. As an emerging growth company, the Company adopted ASU 2016-13 on January 1, 2023 , and the adoption did no t have a significant impact on the Company's consolidated financial statements. Recently Issued Accounting Standards • Segment Reporting : In November 2023 , the FASB issued ASU 2023-07, "Segment Reporting: Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. We are currently evaluating the impact that ASU 2023-07 will have on the Company's consolidated financial statement disclosures. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type and Product | In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Year Ended December 31, (in thousands) 2023 2022 2021 Investment management fees Mutual funds (Victory Funds) $ 440,021 $ 465,031 $ 536,902 ETFs (VictoryShares) 20,800 20,603 16,517 Separate accounts and other vehicles 173,433 180,476 125,417 Performance-based fees Mutual funds (Victory Funds III) 5,460 ( 812 ) ( 5,839 ) Separate accounts and other vehicles 1,162 ( 588 ) 1,542 Total investment management fees 640,876 664,710 674,539 Fund administration and distribution fees Administration fees Mutual funds (Victory Funds) 100,174 104,764 120,414 ETFs (VictoryShares) 2,881 2,800 1,887 Distribution fees Mutual funds (Victory Funds) 22,350 24,971 28,939 Transfer agent fees Mutual funds (Victory Funds III) 54,747 57,555 64,486 Total fund administration and distribution fees 180,152 190,090 215,726 Total revenue $ 821,028 $ 854,800 $ 890,265 |
Schedule of Balances of Receivables from Contracts with Customers | The following table presents balances of receivables: (in thousands) December 31, 2023 December 31, 2022 Customer receivables Mutual funds (Victory Funds) $ 55,858 $ 53,835 ETFs (VictoryShares) 2,079 2,239 Separate accounts and other vehicles 28,189 26,652 Receivables from contracts with customers 86,126 82,726 Non-customer receivables 1,444 1,747 Total receivables $ 87,570 $ 84,473 Investment management fees receivable $ 71,888 $ 68,347 Fund administration and distribution fees receivable 14,238 14,379 Other receivables 1,444 1,747 Total receivables $ 87,570 $ 84,473 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | The significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2022 and the acquisition date are as follows and are approximate values: July 1, 2019 December 31, 2022 Acquisition Date Non-managed money revenue 4 year average annual growth rate — % 8 % Market price of risk 6 % 4 % Revenue volatility 17 % 20 % Discount rate 8 % 7 % Years remaining in earn out period 0.9 4.3 Undiscounted estimated remaining earn out payments $ millions $ 30 - $ 37.5 $ 119 - $ 150 |
Summary of Business Acquisition Related Cost | Costs related to acquisitions were expensed in 2023, 2022 and 2021 and are included in acquisition‑related costs in the Consolidated Statements of Operations. Acquisition-related costs (in thousands) 2023 2022 2021 USAA AMCO $ - $ - $ 5,534 NEC - 112 2,605 WestEnd 47 139 8,102 Other 170 283 21 Total acquisition-related costs $ 217 $ 534 $ 16,262 |
Summary of Rollforward of Restructuring and Integration Liabilities | (in millions) 2023 2022 2021 Liability balance, beginning of period $ 0.3 $ 0.3 $ 1.0 Severance expense USAA AMCO Acquisition — — 1.4 Other 0.6 0.3 0.4 Contract termination expense — 0.5 — Integration costs USAA AMCO Acquisition — — 0.5 Other — 0.1 0.3 Restructuring and integration costs 0.6 0.9 2.6 Settlement of liabilities ( 0.5 ) ( 0.9 ) ( 3.3 ) Liability balance, end of period $ 0.4 $ 0.3 $ 0.3 |
WestEnd Acquisition | |
Acquisitions | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2023 and 2022 and the acquisition date are as follows and are approximate values: December 31, 2021 December 31, 2023 December 31, 2022 Acquisition Date Net revenue 5 year average annual growth rate 22 % 28 % 38 % Market price of risk adjustment for revenue (continuous) 7 % 11 % 11 % Revenue volatility 21 % 20 % 21 % Discount rate 7 % 8 % 4 % Years remaining in earn out period 3.8 4.8 5.8 Undiscounted estimated remaining earn out payments $ millions $ 243 - $ 320 $ 247 - $ 320 $ 277 - $ 320 |
Summary of Unaudited Pro Forma Information | Unaudited Year Ended December 31, (in thousands, except per share amount) 2021 Revenue $ 936,609 Net income 280,980 Earnings per share of common stock Basic $ 4.13 Diluted $ 3.79 Weighted average number of shares outstanding Basic 67,976 Diluted 74,151 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | As of December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 109,183 $ 109,183 $ — $ — Investments in proprietary funds 534 534 — — Deferred compensation plan investments 31,274 31,274 — — Total financial assets $ 140,991 $ 140,991 $ — $ — Financial liabilities Contingent consideration arrangements $ ( 217,200 ) $ — $ — $ ( 217,200 ) Total financial liabilities $ ( 217,200 ) $ — $ — $ ( 217,200 ) As of December 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 24,575 $ 24,575 $ — $ — Investments in proprietary funds 466 466 — — Deferred compensation plan investments 26,800 26,800 — — Interest rate swap 46,931 — 46,931 — Total financial assets $ 98,772 $ 51,841 $ 46,931 $ — Financial liabilities Contingent consideration arrangements $ ( 230,400 ) $ — $ — $ ( 230,400 ) Total financial liabilities $ ( 230,400 ) $ — $ — $ ( 230,400 ) Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets. On October 30, 2023, the Company entered into an agreement to terminate the Swap effective as of that date. As of December 31, 2022, Level 2 assets included amounts receivable under the Swap, which were included in the Consolidated Balance Sheets in other assets. Pricing was determined based on a third party, model-derived valuation in which all significant inputs are observable in active markets. Refer to Note 12, Derivatives, for further detail on the Swap. Contingent consideration arrangements include the WestEnd earn-out payment liability at December 31, 2023 and the USAA AMCO and WestEnd earn-out payment liabilities at December 31, 2022. Contingent consideration arrangements are included in consideration payable for acquisition of business in the Consolidated Balance Sheets. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the WestEnd Acquisition earn-out payment liability include the WestEnd net revenue projected growth rate, revenue volatility, market price of risk and discount rate. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk and discount rate. For the WestEnd contingent consideration arrangement, an increase in the projected growth rate for revenue results in a higher fair value for the earn-out payment liability while an increase in the discount rate results in a lower fair value for the earnout payment liability. An increase in the market price of risk and revenue volatility results in a lower fair value. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the WestEnd Acquisition. Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2023, 2022 and 2021, respectively: |
Summary of Contingent Consideration Arrangement Liabilities | (in thousands) Contingent Balance, December 31, 2021 $ 308,500 USAA AMCO third annual earn-out payment ( 37,500 ) USAA AMCO change in fair value measurement ( 3,600 ) WestEnd change in fair value measurement ( 37,000 ) Balance, December 31, 2022 230,400 USAA AMCO fourth and final annual earn-out payment ( 36,436 ) USAA AMCO change in fair value measurement 8,736 WestEnd change in fair value measurement 14,500 Balance, December 31, 2023 $ 217,200 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Summary of Related-Party Transactions | As of December 31, (in thousands) 2023 2022 Related party assets Cash and cash equivalents $ 109,183 $ 24,575 Receivables (investment management fees) 46,217 44,218 Receivables (fund administration and distribution fees) 14,238 14,379 Prepaid expenses 730 1,097 Investments (investments in proprietary funds, fair value) 534 466 Investments (deferred compensation plan investments, fair value) 31,143 24,852 Total $ 202,045 $ 109,587 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 5,641 $ 5,838 Year ended December 31, (in thousands) 2023 2022 2021 Related party revenue Investment management fees $ 488,132 $ 510,900 $ 566,775 Fund administration and distribution fees 180,152 190,090 215,726 Total $ 668,284 $ 700,990 $ 782,501 Related party expense General and administrative $ 506 $ 415 $ 521 Related party other income (expense) Interest income and other income (expense) $ 6,531 $ ( 2,199 ) $ 5,470 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Gain (Loss) on Securities [Line Items] | |
Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized | The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the years ended December 31, 2023, 2022 and 2021: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2023 $ 11,147 $ 89 $ ( 440 ) For the year ending December 31, 2022 23,714 2,225 ( 1,966 ) For the year ending December 31, 2021 9,662 1,315 ( 59 ) |
Proprietary Funds | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments in Proprietary Funds | The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2023 $ 569 $ 55 $ ( 90 ) $ 534 As of December 31, 2022 551 29 ( 114 ) 466 |
Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized | The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the years ended December 31, 2023, 2022 and 2021: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2023 $ 32 $ 4 $ — For the year ending December 31, 2022 295 — ( 42 ) For the year ending December 31, 2021 215 50 — |
Deferred Compensation Plan Investments | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Deferred Compensation Plan Investments | The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2023 $ 30,109 $ 1,610 $ ( 445 ) $ 31,274 As of December 31, 2022 27,801 529 ( 1,530 ) 26,800 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | The following table presents property and equipment as of December 31, 2023 and 2022: As of December 31, (in thousands) 2023 2022 Equipment, purchased software and implementation costs $ 40,713 $ 33,925 Leasehold improvements 4,381 4,380 Furniture and fixtures 3,055 3,036 Total 48,149 41,341 Accumulated depreciation and amortization ( 28,571 ) ( 20,195 ) Total property and equipment, net $ 19,578 $ 21,146 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table presents changes in the goodwill balance for the periods ended December 31, 2023 and 2022: As of December 31, (in thousands) 2023 2022 Balance, beginning of period $ 981,805 $ 981,805 Balance, end of period $ 981,805 $ 981,805 |
Summary of Definite Lived Intangible Assets | The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2022 $ 310,286 $ 12,068 $ 42,332 $ 7,547 $ 372,233 Accumulated amortization ( 143,530 ) ( 8,443 ) ( 34,866 ) ( 7,457 ) ( 194,296 ) Net book value - December 31, 2022 $ 166,756 $ 3,625 $ 7,466 $ 90 $ 177,937 Weighted average useful life (yrs) 8.4 0.7 0.8 1.2 5.1 Gross book value - December 31, 2023 $ 310,286 $ 12,068 $ 45,462 $ 7,547 $ 375,363 Accumulated amortization ( 163,309 ) ( 12,068 ) ( 40,446 ) ( 7,508 ) ( 223,331 ) Net book value - December 31, 2023 $ 146,977 $ — $ 5,016 $ 39 $ 152,032 Weighted average useful life (yrs) 7.4 — 3.2 0.5 7.1 |
Summary of Estimated Amortization Expense for Definite Lived Intangible Assets | 2024 $ 21,217 2025 21,055 2026 20,707 2027 19,623 2028 17,680 Thereafter 51,750 Total $ 152,032 |
Schedule of Indefinite-lived Intangible Assets by Type | The following table presents a summary of indefinite‑lived intangible assets by type: Fund Agent and Trade (in thousands) Contracts Names Totals December 31, 2021 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2022 balance $ 1,113,000 $ 23,700 $ 1,136,700 Impairment — ( 3,770 ) ( 3,770 ) Transfers to definite-lived intangible assets — ( 3,130 ) ( 3,130 ) December 31, 2023 balance $ 1,113,000 $ 16,800 $ 1,129,800 In the third quarter of 2023, the Company recognized a $ 3.8 million impairment loss on an indefinite-lived trade name asset primarily due to changing the asset’s estimated remaining useful life. The asset was transferred to definite lived intangible assets and the remaining book value of the asset is being amortized on a straight-line basis over a period that is shorter than the asset’s economic life. The impairment loss is recorded in depreciation and amortization in the Consolidated Statements of Operations. There were no impairments to indefinite-lived intangible assets recognized in 2022 and 2021. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The following table presents the provision for income taxes for the years ended December 31, 2023, 2022 and 2021: (in thousands) 2023 2022 2021 Current tax expense (benefit): Federal $ 32,457 $ 30,723 $ 42,845 State 8,554 8,055 9,929 Foreign 201 90 ( 9 ) Total current tax expense 41,212 38,868 52,765 Deferred tax expense (benefit): Federal 17,951 29,263 15,716 State 3,618 6,654 3,742 Foreign ( 30 ) ( 263 ) 30 Total deferred tax expense 21,539 35,654 19,488 Income tax expense $ 62,751 $ 74,522 $ 72,253 |
Summary of Effective Tax Rate | The following table presents the tax rates for the years ended December 31, 2023, 2022 and 2021. 2023 2022 2021 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 21.0 % State income tax rate, net of federal tax benefit 3.3 % 3.3 % 3.2 % Excess tax benefits on share-based compensation ( 2.3 ) % ( 3.4 ) % ( 3.4 ) % Foreign taxes and other 0.7 % 0.4 % ( 0.2 ) % Income tax expense 22.7 % 21.3 % 20.6 % |
Summary of Components of Deferred Income Tax Assets and Liabilities | (in thousands) 2023 2022 Deferred tax assets: Definite-lived intangibles $ 23,516 $ 22,565 Share-based compensation expense 4,717 6,234 Acquisition-related costs 3,979 4,504 Deferred compensation 9,108 7,276 Restructuring expenses 1,223 1,337 Contingent consideration arrangements 286 337 Unrealized loss on deferred compensation investments — 240 R&E expenditures 2,940 1,220 Other 300 442 Total deferred tax assets 46,069 44,155 Deferred tax liabilities: Indefinite-lived intangibles 149,320 127,973 Goodwill 8,944 6,045 Debt issuance costs 2,146 3,026 Depreciation 3,157 3,695 OCI - Swap gain and cumulative translation adjustment 10,685 11,317 Prepaid expenses 241 237 Unrealized gain on deferred compensation investments 290 — Total deferred tax liabilities 174,783 152,293 Deferred tax liability, net $ ( 128,714 ) $ ( 108,138 ) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | The following table presents the components of long-term debt in the Consolidated Balance Sheets as of December 31, 2023 and 2022. Interest Rate Effective Interest Rate (in thousands) 2023 2022 2023 2022 2023 2022 Term Loans Due July 2026 $ 630,680 $ 630,680 7.77 % 5.96 % 8.17 % 6.36 % Due December 2028 371,028 371,028 7.77 % 5.96 % 8.10 % 6.29 % Term loan principal outstanding 1,001,708 1,001,708 Unamortized debt issuance costs ( 8,753 ) ( 11,299 ) Unamortized debt discount ( 3,686 ) ( 4,895 ) Long-term debt $ 989,269 $ 985,514 |
Schedule of Components of Interest Expense and Other Financing Costs | The following table presents the components of interest expense and other financing costs on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021. (in thousands) 2023 2022 2021 Interest expense $ 75,016 $ 42,715 $ 17,250 Amortization of debt issuance costs 3,029 3,207 2,332 Amortization of debt discount 1,210 1,270 1,098 Interest rate swap (income) expense ( 15,726 ) ( 3,684 ) 3,602 Amortization of deferred gain on terminated interest rate swap ( 2,785 ) — — Other 538 456 370 Total $ 61,282 $ 43,964 $ 24,652 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Classification of Swap in Consolidated Financial Statements | The following tables summarize the classification of the Swap in our consolidated financial statements (in thousands): Balance Sheets Description December 31, 2023 December 31, 2022 Other assets Fair value of interest rate swap $ — $ 46,931 Notional amount — 450,000 Year ended December 31, Statements of Operations Description 2023 2022 2021 Interest income (expense) and other financing costs Reclassification from AOCI – Swap income/expense $ 15,726 $ 3,684 $ ( 3,602 ) Interest income (expense and other financing costs Reclassification from AOCI – Amortization of Swap deferred gain 2,785 — — Total $ 18,511 $ 3,684 $ ( 3,602 ) Year ended December 31, Statements of Comprehensive Income Description 2023 2022 2021 Other comprehensive income (loss) Swap income (loss), net of tax $ ( 1,970 ) $ 29,719 $ 13,468 Other comprehensive income (loss) Amortization of deferred gain on terminated Swap, net of tax ( 2,184 ) — — Total $ ( 4,154 ) $ 29,719 $ 13,468 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased | The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2020 19,389 54,767 ( 3,183 ) ( 3,431 ) Issuance of shares 7 — — — Conversion of Class B shares to Common Stock 6,632 ( 6,632 ) — — Repurchase of shares — — ( 886 ) — Vesting of restricted share grants 4 1,604 — — Exercise of options 91 1,380 — — Shares withheld related to net settlement of equity awards — — ( 49 ) ( 1,031 ) Elimination of Class B share class 51,119 ( 51,119 ) ( 4,462 ) 4,462 Balance, December 31, 2021 77,242 — ( 8,580 ) — Issuance of shares 11 — — — Repurchase of shares — — ( 3,034 ) — Vesting of restricted share grants 844 — — — Exercise of options 2,431 — — — Shares withheld related to net settlement of equity awards — — ( 1,589 ) — Balance, December 31, 2022 80,528 — ( 13,203 ) — Issuance of shares 9 — — — Repurchase of shares — — ( 4,161 ) — Vesting of restricted share grants 786 — — — Exercise of options 1,081 — — — Shares withheld related to net settlement of equity awards — — ( 786 ) — Balance, December 31, 2023 82,404 — ( 18,150 ) — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards | The following tables presents activity during the years ended December 31, 2023, 2022, and 2021 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2023 2022 2021 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 4.31 $ 7.57 2,884,180 $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 Forfeited 6.32 13.84 ( 650 ) 6.46 14.15 ( 451 ) 5.29 10.73 ( 79,271 ) Exercised 3.69 5.58 ( 1,081,677 ) 3.51 5.70 ( 2,430,579 ) 3.72 5.52 ( 1,470,620 ) Outstanding at end of the period $ 4.68 $ 8.76 1,801,853 $ 4.31 $ 7.57 2,884,180 $ 3.94 $ 6.71 5,315,210 Vested $ 4.66 $ 8.71 1,625,655 $ 4.27 $ 7.46 2,707,632 $ 3.88 $ 6.53 5,072,585 Unvested 4.85 9.23 176,198 4.85 9.24 176,548 5.28 10.60 242,625 Restricted Stock Awards For Year Ended December 31, 2023 2022 2021 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 25.38 1,153,515 $ 17.75 1,352,839 $ 14.99 2,827,008 Granted 30.25 539,597 31.01 655,542 27.29 270,824 Vested 22.96 ( 786,205 ) 17.50 ( 844,205 ) 14.62 ( 1,607,973 ) Forfeited 29.55 ( 53,159 ) 28.79 ( 10,661 ) 16.51 ( 137,020 ) Unvested at end of period $ 30.39 853,748 $ 25.38 1,153,515 $ 17.75 1,352,839 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company’s operating leases as of December 31, 2023 and 2022 is as follows: (in thousands) December 31, 2023 December 31, 2022 Operating lease ROU assets (1) $ 9,665 $ 13,396 Current portion of operating lease liabilities (2) 4,675 5,056 Noncurrent portion of operating lease liabilities (2) 6,487 10,227 Total operating lease liabilities $ 11,162 $ 15,283 (1) ROU assets are recorded in other assets on the Consolidated Balance Sheets. (2) Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the Consolidated Balance Sheets. December 31, 2023 December 31, 2022 Weighted-average remaining lease term 4.0 years 4.4 years Weighted-average discount rate 4.7 % 4.6 % |
Schedule of Components of Lease Expense and Other Lease Information | The components of lease expense and other lease information for the years ended December 31, 2023 and 2022 are as follows: Year Ended Year Ended (in thousands) December 31, 2023 December 31, 2022 Operating lease cost $ 5,207 $ 5,235 Short-term lease cost — 84 Variable lease cost 1,885 1,798 Gross lease cost 7,092 7,117 Sub-lease income ( 815 ) ( 787 ) Net lease cost $ 6,277 $ 6,330 Other lease information Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating leases $ 5,660 $ 5,023 |
Summary of Future Undiscounted Cash Flows Related to Operating Leases and Reconciliation to Operating Lease Liabilities | Future undiscounted cash flows related to our operating leases and the reconciliation to operating lease liabilities as of December 31, 2023 are shown in the table below. (in thousands) As of December 31, 2023 2024 $ 5,058 2025 2,444 2026 1,623 2027 1,069 2028 474 Thereafter 1,454 Total undiscounted lease payments 12,122 Less: imputed interest 960 Total lease liabilities $ 11,162 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Summary of Components of Deferred Compensation Plan-Related Expense Related to Employee DC Plan | The following table presents the components of deferred compensation plan-related expense related to the Employee DC Plan. (in thousands) 2023 2022 2021 Employee contributions $ 1,529 $ 1,872 $ 2,231 Employer contributions 683 936 975 Change in value of deferred compensation plan liability 2,754 ( 2,907 ) 5,527 Total $ 4,966 $ ( 99 ) $ 8,733 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in thousands, except per share amounts) 2023 2022 2021 Net income $ 213,157 $ 275,511 $ 278,389 Shares: Basic weighted average common shares outstanding 66,202 68,481 67,976 Assumed conversion of dilutive instruments 2,012 3,785 6,175 Diluted weighted average common shares outstanding 68,214 72,266 74,151 Earnings per share Basic: $ 3.22 $ 4.02 $ 4.10 Diluted: $ 3.12 $ 3.81 $ 3.75 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2023, 2022, and 2021. Cash Flow Cumulative Hedges Translation (in thousands) (1)(2) Adjustment Total Balance, December 31, 2020 $ ( 7,573 ) $ 113 $ ( 7,460 ) Other comprehensive income (loss) before reclassification and tax 14,177 ( 49 ) 14,128 Tax impact ( 3,438 ) 13 ( 3,425 ) Reclassification adjustments, before tax 3,602 — 3,602 Tax impact ( 873 ) — ( 873 ) Net current period other comprehensive income (loss) 13,468 ( 36 ) 13,432 Balance, December 31, 2021 5,895 77 5,972 Other comprehensive income (loss) before reclassification and tax 42,842 ( 331 ) 42,511 Tax impact ( 10,327 ) 82 ( 10,245 ) Reclassification adjustments, before tax ( 3,684 ) — ( 3,684 ) Tax impact 888 — 888 Net current period other comprehensive income (loss) 29,719 ( 249 ) 29,470 Balance, December 31, 2022 35,614 ( 172 ) 35,442 Other comprehensive income (loss) before reclassification and tax 13,214 54 13,268 Tax impact ( 2,850 ) ( 14 ) ( 2,864 ) Reclassification adjustments, before tax (3) ( 18,511 ) — ( 18,511 ) Tax impact 3,993 — 3,993 Net current period other comprehensive income (loss) ( 4,154 ) 40 ( 4,114 ) Balance, December 31, 2023 $ 31,460 $ ( 132 ) $ 31,328 (1) Reclassifications out of AOCI(L) related to cash flow hedges are recorded in interest expense and other financing costs (2) On October 30, 2023, the Company terminated the Swap. The termination resulted in a $ 44.4 million deferred gain recorded in AOCI, before tax, and the elimination of the unrealized gain on cash flow hedge recorded in AOCI prior to the termination. The deferred gain is being amortization a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 12, Derivatives, for further information on the monetization of the interest rate swap gain. (3) Reclassification adjustments, before tax, includes $ 15,726 of income reclassified out of AOCI prior to the termination of the Swap and $ 2,785 of amortization of deferred gain following the termination of the Swap. |
Organization and Nature of Bu_2
Organization and Nature of Business - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Nov. 01, 2021 | Feb. 18, 2021 | Jul. 01, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsidiary Sale Of Stock [Line Items] | ||||||
Asset under management acquired | $ 0 | $ 880 | $ 539,240 | |||
Term Loans | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Debt Term | 7 years | |||||
Principal amount | $ 1,100,000 | |||||
Revolving Credit Facility | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Debt Term | 5 years | |||||
Amount of revolving credit facility | $ 100,000 | |||||
Repriced Term Loans | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Principal amount | $ 755,700 | |||||
Basis spread on variable rate, increase (decrease) | 0.25% | |||||
Debt instrument interest rate description | Repriced Term Loans reduced the applicable margin on LIBOR by 25 basis points | |||||
Debt maturity date | Jul. 01, 2026 | |||||
2021 Incremental Term Loans | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Principal amount | $ 505,000 | |||||
Basis spread on variable rate, increase (decrease) | 50% | |||||
Debt instrument interest rate description | The 2021 Incremental Term Loans will mature in December 2028 and, until the Fourth Amendment to the 2019 Credit Agreement, accrued interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. | |||||
2021 Incremental Term Loans | Adjusted London Interbank Offered Rate (LIBOR) | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | Base Rate | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Base spread (as a percent) | 1.25% | |||||
2021 Incremental Term Loans | Third Amendment | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Principal amount | $ 505,000 | |||||
New Energy Capital Partners | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of equity interests | 100% | |||||
Asset under management acquired | $ 800,000 | |||||
WestEnd Acquisition | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of equity interests | 100% | |||||
Asset under management acquired | $ 19,300,000 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2020 | |
Significant Accounting Policies [Line Items] | ||||
Maximum risk of loss related to unconsolidated sponsored VIE investment funds | $ 31,700,000 | $ 25,300,000 | ||
Impairments of investments | 0 | 0 | $ 0 | |
Derivative financial instrument, market-to market gain | $ 44,400,000 | |||
Lease term | 1 year | |||
Number of operating segments | Segment | 1 | |||
Reserve for credit losses | $ 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | |
Costs expensed related to debt modifications | $ 0 | $ 0 | $ 400,000 | |
Accounting Standards Update 2016-13 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2023 | |||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||
Accounting Standards Update 2023-07 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Nov. 30, 2023 | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 10 years | |||
Alderwood Partners LLP | Cerebellum | ||||
Significant Accounting Policies [Line Items] | ||||
Equity interest percentage | 15% | 15% | ||
Variable Interest Entity, Primary Beneficiary | ||||
Significant Accounting Policies [Line Items] | ||||
Percentage of voting interest in entities | 50% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of revenue | |||
Total revenue | $ 821,028 | $ 854,800 | $ 890,265 |
Investment Management Fees | |||
Disaggregation of revenue | |||
Total revenue | 640,876 | 664,710 | 674,539 |
Investment Management Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 440,021 | 465,031 | 536,902 |
Investment Management Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 20,800 | 20,603 | 16,517 |
Investment Management Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 173,433 | 180,476 | 125,417 |
Performance-based Investment Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 5,460 | (812) | (5,839) |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 1,162 | (588) | 1,542 |
Administration Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 100,174 | 104,764 | 120,414 |
Administration Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 2,881 | 2,800 | 1,887 |
Fund Distribution Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 22,350 | 24,971 | 28,939 |
Transfer Agent Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 54,747 | 57,555 | 64,486 |
Fund Administration and Distribution Fees | |||
Disaggregation of revenue | |||
Total revenue | $ 180,152 | $ 190,090 | $ 215,726 |
Revenue - Schedule of Balances
Revenue - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 86,126 | $ 82,726 |
Non-customer receivables | 1,444 | 1,747 |
Total receivables | 87,570 | 84,473 |
Investment management fees receivable | 71,888 | 68,347 |
Fund administration and distribution fees receivable | 14,238 | 14,379 |
Total | 1,444 | 1,747 |
Mutual Funds | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 55,858 | 53,835 |
ETF's | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 2,079 | 2,239 |
Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 28,189 | $ 26,652 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Class C | |
Disaggregation of revenue | |
Upfront sales commission percentage | 1% |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Nov. 04, 2021 | Nov. 01, 2021 | Jul. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 10, 2023 | Feb. 28, 2023 | Apr. 30, 2022 | |
Acquisitions | ||||||||||
Contingent consideration liability | $ 217,200 | $ 230,400 | ||||||||
Goodwill | $ 981,805 | 981,805 | 981,805 | $ 981,805 | ||||||
Change in value of consideration payable for acquisition of business | 23,236 | (40,600) | 13,800 | |||||||
Increase (decrease) in liability related to change in value of consideration payable | 23,236 | (40,600) | 13,800 | |||||||
USAA AMCO | ||||||||||
Acquisitions | ||||||||||
Contingent consideration liability | 148,900 | 27,700 | $ 36,400 | |||||||
Maximum aggregate contingent payment | $ 150,000 | |||||||||
Maximum annual contingent payment | $ 37,500 | |||||||||
Contingent consideration threshold percentage | 80% | |||||||||
Annual revenue percentage requirement to achieve the maximum contingent payment | 100% | |||||||||
Period of time over which contingent payments will be made | 4 years | |||||||||
Increase (decrease) in liability related to change in value of consideration payable | 8,700 | 3,600 | 13,800 | |||||||
NEC Acquisition | ||||||||||
Acquisitions | ||||||||||
Business acquisition, acquired percentage | 100% | |||||||||
Purchase price | $ 63,100 | |||||||||
Payments to acquire business | 62,800 | |||||||||
Contingent consideration liability | 13,700 | 8,100 | ||||||||
Working capital adjustment | 300 | |||||||||
Additional payments in cash to acquire business based on revenue growth | $ 35,000 | |||||||||
Cash based on revenue growth period | 6 years | |||||||||
Contingent payment period one | 36 months | |||||||||
Contingent payment period two | 48 months | |||||||||
Contingent payment period three | 60 months | |||||||||
Contingent payment compensation expense | 5,600 | 5,500 | 2,600 | |||||||
Assets acquired and liabilities assumed based upon their estimated fair values | $ 62,800 | |||||||||
Goodwill expected to be deductible for tax purposes | $ 41,000 | |||||||||
WestEnd Acquisition | ||||||||||
Acquisitions | ||||||||||
Purchase price | 716,100 | |||||||||
Payments to acquire business | 475,800 | |||||||||
Contingent consideration liability | 239,700 | $ 217,200 | $ 202,700 | 239,700 | ||||||
Maximum aggregate contingent payment | 320,000 | 320,000 | ||||||||
Maximum annual contingent payment | 80,000 | |||||||||
Goodwill | 536,000 | 536,000 | ||||||||
Cash payable for net working capital adjustments | $ 600 | 600 | ||||||||
Period of time over which contingent payments will be made | 4 years | |||||||||
Period of time over which contingent "catch-up" provisions payments will be made | 5 years 6 months | |||||||||
Maximum aggregate earn-out payments | $ 320,000 | 320,000 | ||||||||
Maximum annual earn-out payments | 80,000 | |||||||||
Cash paid at closing placed in escrow | 2,900 | 2,900 | ||||||||
Amount available for purchase price adjustments | $ 500 | |||||||||
Amount available to compensate for eligible claims under purchase agreement indemnification provisions | $ 2,400 | |||||||||
WestEnd Acquisition | Third Amendment to 2019 Credit Agreement | ||||||||||
Acquisitions | ||||||||||
Principal amount | $ 505,000 | $ 505,000 |
Acquisition - Summary of Signif
Acquisition - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 01, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
USAA AMCO | ||||
Acquisitions | ||||
Non-managed money revenue average annual growth rate | 8% | 0% | ||
Market price of risk (continuous) | 4% | 6% | ||
Revenue volatility | 20% | 17% | ||
Discount rate | 7% | 8% | ||
Years remaining in earn out period | 4 years 3 months 18 days | 10 months 24 days | ||
USAA AMCO | Minimum | ||||
Acquisitions | ||||
Undiscounted estimated remaining earn out payments $ millions | $ 119 | $ 30 | ||
USAA AMCO | Maximum | ||||
Acquisitions | ||||
Undiscounted estimated remaining earn out payments $ millions | $ 150 | $ 37.5 | ||
WestEnd Acquisition | ||||
Acquisitions | ||||
Net revenue average annual growth rate | 22% | 28% | 38% | |
Market price of risk (continuous) | 7% | 11% | 11% | |
Revenue volatility | 21% | 20% | 21% | |
Discount rate | 7% | 8% | 4% | |
Years remaining in earn out period | 3 years 9 months 18 days | 4 years 9 months 18 days | 5 years 9 months 18 days | |
WestEnd Acquisition | Minimum | ||||
Acquisitions | ||||
Undiscounted estimated remaining earn out payments $ millions | $ 243 | $ 247 | $ 277 | |
WestEnd Acquisition | Maximum | ||||
Acquisitions | ||||
Undiscounted estimated remaining earn out payments $ millions | $ 320 | $ 320 | $ 320 |
Acquisition - Summary of Sign_2
Acquisition - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
USAA AMCO | ||
Acquisitions | ||
Number of year of annual growth rate | 4 years | |
WestEnd Acquisition | ||
Acquisitions | ||
Number of year of annual growth rate | 5 years |
Acquisition - Summary of Unaudi
Acquisition - Summary of Unaudited Pro Forma Information (Details) - WestEnd Acquisition $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) $ / shares shares | |
Acquisitions | |
Revenue | $ | $ 936,609 |
Net income | $ | $ 280,980 |
Basic | $ / shares | $ 4.13 |
Diluted | $ / shares | $ 3.79 |
Basic | shares | 67,976 |
Diluted | shares | 74,151 |
Acquisition - Summary of Acquis
Acquisition - Summary of Acquisition Related Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Acquisitions | |||
Acquisition-related costs | $ 217 | $ 534 | $ 16,262 |
USAA AMCO | |||
Acquisitions | |||
Acquisition-related costs | 5,534 | ||
NEC Acquisition | |||
Acquisitions | |||
Acquisition-related costs | 112 | 2,605 | |
WestEnd Acquisition | |||
Acquisitions | |||
Acquisition-related costs | 47 | 139 | 8,102 |
Other | |||
Acquisitions | |||
Acquisition-related costs | $ 170 | $ 283 | $ 21 |
Acquisition - Summary of Rollfo
Acquisition - Summary of Rollforward of Restructuring and Integration Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | $ 300 | $ 300 | $ 1,000 |
Contract termination expense | 500 | ||
Restructuring and integration costs | 595 | 881 | 2,578 |
Settlement of liabilities | (500) | (900) | (3,300) |
Liability balance, end of year | 400 | 300 | 300 |
USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Integration costs | 500 | ||
Other | |||
Rollforward of restructuring and integration liabilities | |||
Integration costs | 100 | 300 | |
Severance expense | USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | 1,400 | ||
Severance expense | Other | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 600 | $ 300 | $ 400 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financial Liabilities | ||
Contingent consideration arrangements | $ (217,200) | $ (230,400) |
Fair Value on Recurring Basis | ||
Financial Assets | ||
Money market fund | 109,183 | 24,575 |
Investments in proprietary funds | 534 | 466 |
Deferred compensation plan investments | 31,274 | 26,800 |
Fair value of interest rate swap | 46,931 | |
Total financial assets | 140,991 | 98,772 |
Financial Liabilities | ||
Contingent consideration arrangements | (217,200) | (230,400) |
Total financial liabilities | (217,200) | (230,400) |
Fair Value on Recurring Basis | Level 1 | ||
Financial Assets | ||
Money market fund | 109,183 | 24,575 |
Investments in proprietary funds | 534 | 466 |
Deferred compensation plan investments | 31,274 | 26,800 |
Total financial assets | 140,991 | 51,841 |
Fair Value on Recurring Basis | Level 2 | ||
Financial Assets | ||
Fair value of interest rate swap | 46,931 | |
Total financial assets | 46,931 | |
Fair Value on Recurring Basis | Level 3 | ||
Financial Liabilities | ||
Contingent consideration arrangements | (217,200) | (230,400) |
Total financial liabilities | $ (217,200) | $ (230,400) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 26, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfers between levels | $ 0 | ||
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional amount | $ 0 | $ 450,000,000 | $ 450,000,000 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Contingent Consideration Arrangement Liabilities (Details) - Contingent Consideration Liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Beginning balance | $ 230,400 | $ 308,500 |
Ending balance | 217,200 | 230,400 |
USAA AMCO | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Third annual earn-out payment | (37,500) | |
Fourth and final annual earn-out payment | (36,436) | |
Change in fair value measurement | 8,736 | (3,600) |
WestEnd | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Change in fair value measurement | $ 14,500 | $ (37,000) |
Related Party Transactions -Sum
Related Party Transactions -Summary of Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related party assets | |||
Cash and cash equivalents | $ 123,547 | $ 38,171 | |
Receivables (investment management fees) | 71,888 | 68,347 | |
Receivables (fund administration and distribution fees) | 14,238 | 14,379 | |
Total | 1,444 | 1,747 | |
Related party revenue | |||
Total revenue | 821,028 | 854,800 | $ 890,265 |
Investment Management Fees | |||
Related party revenue | |||
Total revenue | 640,876 | 664,710 | 674,539 |
Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | 180,152 | 190,090 | 215,726 |
VCH | |||
Related party assets | |||
Cash and cash equivalents | 109,183 | 24,575 | |
Receivables (investment management fees) | 46,217 | 44,218 | |
Receivables (fund administration and distribution fees) | 14,238 | 14,379 | |
Prepaid expenses | 730 | 1,097 | |
Investments (investments in proprietary funds, fair value) | 534 | 466 | |
Investments (deferred compensation plan investments, fair value) | 31,143 | 24,852 | |
Total | 202,045 | 109,587 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 5,641 | 5,838 | |
Related party revenue | |||
Total revenue | 668,284 | 700,990 | 782,501 |
Related party expense | |||
General and administrative | 506 | 415 | 521 |
Related party other income (expense) | |||
Interest income and other income (expense) | 6,531 | (2,199) | 5,470 |
VCH | Investment Management Fees | |||
Related party revenue | |||
Total revenue | 488,132 | 510,900 | 566,775 |
VCH | Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | $ 180,152 | $ 190,090 | $ 215,726 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments in Proprietary Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value | $ 534 | $ 466 |
Proprietary Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 569 | 551 |
Gross Unrealized Gains | 55 | 29 |
Gross Unrealized (Losses) | (90) | (114) |
Fair Value | $ 534 | $ 466 |
Investments - Summary of Procee
Investments - Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized (Details) - Proprietary Funds - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 32 | $ 295 | $ 215 |
Realized Gains | 4 | 0 | 50 |
Realized (Losses) | $ 0 | $ 42 | $ 0 |
Investments - Summary of Cost_2
Investments - Summary of Cost and Fair Value of Deferred Compensation Plan Investments (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 30,109 | $ 27,801 |
Gross Unrealized Gains | 1,610 | 529 |
Gross Unrealized (Losses) | (445) | (1,530) |
Trading securities, at fair value | $ 31,274 | $ 26,800 |
Investments - Summary of Proc_2
Investments - Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 11,147 | $ 23,714 | $ 9,662 |
Realized Gains | 89 | 2,225 | 1,315 |
Realized (Losses) | $ (440) | $ (1,966) | $ (59) |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 48,149 | $ 41,341 |
Accumulated depreciation and amortization | (28,571) | (20,195) |
Total property and equipment, net | 19,578 | 21,146 |
Equipment, Purchased Software and Implementation Costs | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 40,713 | 33,925 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,381 | 4,380 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,055 | $ 3,036 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 8.8 | $ 8 | $ 6.2 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Changes in the goodwill balance | ||
Balance, beginning of period | $ 981,805 | $ 981,805 |
Balance, end of period | $ 981,805 | $ 981,805 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Indefinite-lived Intangible Assets by Type (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Indefinite-lived Intangible Assets | |||
Indefinite-lived intangible assets, Beginning balance | $ 1,136,700,000 | $ 1,136,700,000 | |
Impairment | (3,770,000) | ||
Transfers to definite-lived intangible assets | (3,130,000) | ||
Additions or transfers | 0 | ||
Indefinite-lived intangible assets, Ending balance | 1,129,800,000 | 1,136,700,000 | |
Fund Advisory, Transfer Agent and Distribution Contracts [Member] | |||
Indefinite-lived Intangible Assets | |||
Indefinite-lived intangible assets, Beginning balance | 1,113,000,000 | 1,113,000,000 | |
Impairment | 0 | ||
Transfers to definite-lived intangible assets | 0 | ||
Additions or transfers | 0 | ||
Indefinite-lived intangible assets, Ending balance | 1,113,000,000 | 1,113,000,000 | |
Trade Name | |||
Indefinite-lived Intangible Assets | |||
Indefinite-lived intangible assets, Beginning balance | 23,700,000 | 23,700,000 | |
Impairment | $ 3,800 | (3,770,000) | |
Transfers to definite-lived intangible assets | (3,130,000) | ||
Additions or transfers | 0 | ||
Indefinite-lived intangible assets, Ending balance | $ 16,800,000 | $ 23,700,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||||
Impairments to definite lived intangible assets | $ 0 | $ 0 | $ 0 | |
Amortization expense for definite lived intangible assets | 29,000,000 | $ 35,200,000 | $ 12,600,000 | |
Impairments to indefinite lived intangible assets | $ (3,770,000) | |||
Trade Names [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Depreciation, Depletion and Amortization | |||
Impairments to indefinite lived intangible assets | $ 3,800 | $ (3,770,000) |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Definite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Identifiable Intangible Assets | ||
Net book value | $ 152,032 | |
USAA AMCO | ||
Identifiable Intangible Assets | ||
Gross book value | 375,363 | $ 372,233 |
Accumulated amortization | (223,331) | (194,296) |
Net book value | $ 152,032 | $ 177,937 |
Weighted average useful life (yrs) | 7 years 1 month 6 days | 5 years 1 month 6 days |
USAA AMCO | Customer Relationship | ||
Identifiable Intangible Assets | ||
Gross book value | $ 310,286 | $ 310,286 |
Accumulated amortization | (163,309) | (143,530) |
Net book value | $ 146,977 | $ 166,756 |
Weighted average useful life (yrs) | 7 years 4 months 24 days | 8 years 4 months 24 days |
USAA AMCO | Advisory and distribution contracts with Victory Funds | ||
Identifiable Intangible Assets | ||
Gross book value | $ 12,068 | $ 12,068 |
Accumulated amortization | (12,068) | (8,443) |
Net book value | 0 | $ 3,625 |
Weighted average useful life (yrs) | 8 months 12 days | |
USAA AMCO | Trade Name | ||
Identifiable Intangible Assets | ||
Gross book value | 45,462 | $ 42,332 |
Accumulated amortization | (40,446) | (34,866) |
Net book value | $ 5,016 | $ 7,466 |
Weighted average useful life (yrs) | 3 years 2 months 12 days | 9 months 18 days |
USAA AMCO | Intellectual Property/Other | ||
Identifiable Intangible Assets | ||
Gross book value | $ 7,547 | $ 7,547 |
Accumulated amortization | (7,508) | (7,457) |
Net book value | $ 39 | $ 90 |
Weighted average useful life (yrs) | 6 months | 1 year 2 months 12 days |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense for Definite Lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Estimated amortization expense for definite lived intangible assets | |
2024 | $ 21,217 |
2025 | 21,055 |
2026 | 20,707 |
2027 | 19,623 |
2028 | 17,680 |
Thereafter | 51,750 |
Net book value | $ 152,032 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax expense (benefit): | |||
Federal | $ 32,457 | $ 30,723 | $ 42,845 |
State | 8,554 | 8,055 | 9,929 |
Foreign | 201 | 90 | (9) |
Total current tax expense | 41,212 | 38,868 | 52,765 |
Deferred tax expense (benefit): | |||
Federal | 17,951 | 29,263 | 15,716 |
State | 3,618 | 6,654 | 3,742 |
Foreign | (30) | (263) | 30 |
Total deferred tax expense | 21,539 | 35,654 | 19,488 |
Income tax expense | $ 62,751 | $ 74,522 | $ 72,253 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Net operating loss carryforward balance | $ 0 | ||
Global minimum tax | 15% |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at U.S. statutory rate | 21% | 21% | 21% |
State income tax rate, net of federal tax benefit | 3.30% | 3.30% | 3.20% |
Excess tax benefits on share-based compensation | (2.30%) | (3.40%) | (3.40%) |
Foreign taxes and other | 0.70% | 0.40% | (0.20%) |
Income tax expense | 22.70% | 21.30% | 20.60% |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Definite-lived intangibles | $ 23,516 | $ 22,565 |
Share-based compensation expense | 4,717 | 6,234 |
Acquisition-related costs | 3,979 | 4,504 |
Deferred compensation | 9,108 | 7,276 |
Restructuring expenses | 1,223 | 1,337 |
Contingent consideration arrangements | 286 | 337 |
Unrealized loss on deferred compensation investments | 240 | |
R&E expenditures | 2,940 | 1,220 |
Other | 300 | 442 |
Total deferred tax assets | 46,069 | 44,155 |
Deferred tax liabilities: | ||
Indefinite-lived intangibles | 149,320 | 127,973 |
Goodwill | 8,944 | 6,045 |
Debt issuance costs | 2,146 | 3,026 |
Depreciation | 3,157 | 3,695 |
OCI - Swap gain and cumulative translation adjustment | 10,685 | 11,317 |
Prepaid expenses | 241 | 237 |
Unrealized gain on deferred compensation investments | 290 | |
Total deferred tax liabilities | 174,783 | 152,293 |
Deferred tax liability, net | $ (128,714) | $ (108,138) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Feb. 18, 2021 | Jan. 17, 2020 | Jul. 01, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||||
Original issue discount | $ 3,686 | $ 4,895 | ||||
Loss on debt extinguishment | 0 | 2,648 | $ 4,596 | |||
Unamortized debt issuance costs | 8,753 | 11,299 | ||||
Standby Letters of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 10,000 | |||||
Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Debt Term | 7 years | |||||
Principal amount | $ 1,100,000 | |||||
Original issue discount | 23,300 | 23,300 | ||||
Repayments of debt | 0 | |||||
Accumulated amortization and loss on debt extinguishment | 19,600 | 18,400 | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt Term | 5 years | |||||
Maximum borrowing capacity | $ 100,000 | |||||
Outstanding borrowing | 0 | 0 | ||||
Debt issuance costs, gross | 3,700 | 3,700 | ||||
Accumulated amortization and loss on debt extinguishment | $ 3,500 | 3,000 | ||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum percentage of borrowings for revolving credit facility as a percent of total commitments | 35% | |||||
Maximum first lien leverage ratio on last day of quarter (as a percent) | 3.80% | |||||
Credit Agreement | Adjusted London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 3.25% | |||||
Credit Agreement | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2020 Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 952,000 | |||||
Debt maturity date | Jul. 01, 2026 | |||||
Debt instrument interest rate description | 2020 Term Loans reduced the applicable margin on LIBOR by 75 basis points | |||||
Basis spread on variable rate, increase (decrease) | 0.75% | |||||
2020 Term Loans | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.50% | |||||
Repriced Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 755,700 | |||||
Original issue discount | 700 | 1,700 | ||||
Loss on debt extinguishment | 2,600 | 4,600 | ||||
Debt maturity date | Jul. 01, 2026 | |||||
Debt instrument interest rate description | Repriced Term Loans reduced the applicable margin on LIBOR by 25 basis points | |||||
Basis spread on variable rate, increase (decrease) | 0.25% | |||||
Unamortized debt issuance costs | 2,400 | 2,900 | ||||
Gain on repurchase | 500 | |||||
Repriced Term Loans | General and Administrative Expense | ||||||
Debt Instrument [Line Items] | ||||||
Cost incurred | $ 400 | |||||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | 505,000 | |||||
Original issue discount | 2,500 | |||||
Debt issuance costs, gross | $ 9,100 | |||||
Debt instrument interest rate description | The 2021 Incremental Term Loans will mature in December 2028 and, until the Fourth Amendment to the 2019 Credit Agreement, accrued interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. | |||||
Basis spread on variable rate, increase (decrease) | 50% | |||||
Debt maturity date | 2028-12 | |||||
2021 Incremental Term Loans | Adjusted London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 1.25% | |||||
2019 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs, gross | $ 48,700 | 48,700 | ||||
Repayments of debt | 149,500 | $ 142,000 | ||||
Accumulated amortization and loss on debt extinguishment | $ 40,000 | $ 37,400 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (8,753) | $ (11,299) |
Unamortized debt discount | (3,686) | (4,895) |
Long-term debt | 989,269 | 985,514 |
Due July 2026, 5.96% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 630,680 | |
Effective interest rate (as a percent) | 6.36% | |
Fixed interest rate (as a percent) | 5.96% | |
Due July 2026, 7.77% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 630,680 | |
Effective interest rate (as a percent) | 8.17% | |
Fixed interest rate (as a percent) | 7.77% | |
Due December 2028, 5.96% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 371,028 | |
Effective interest rate (as a percent) | 6.29% | |
Fixed interest rate (as a percent) | 5.96% | |
Due December 2028, 7.77% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 371,028 | |
Effective interest rate (as a percent) | 8.10% | |
Fixed interest rate (as a percent) | 7.77% | |
Term Loans | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 1,001,708 | $ 1,001,708 |
Unamortized debt discount | $ (23,300) | $ (23,300) |
Debt - Schedule of Components_2
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 75,016 | $ 42,715 | $ 17,250 |
Amortization of debt issuance costs | 3,029 | 3,207 | 2,332 |
Amortization of debt discount | 1,210 | 1,270 | 1,098 |
Interest rate swap (income) expense | (15,726) | (3,684) | 3,602 |
Amortization of deferred gain on terminated interest rate swap | (2,785) | ||
Other | 538 | 456 | 370 |
Total | $ 61,282 | $ 43,964 | $ 24,652 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Sep. 26, 2022 | Dec. 31, 2023 | Oct. 30, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | ||||
Amount payable to swap | $ 0 | |||
Long term debt outstanding | $ 450,000,000 | |||
Business Combination, Contingent Consideration, Liability | 217,200,000 | $ 230,400,000 | ||
Amortization of deferred gain on terminated swap | 2,785,000 | |||
Swap Termination Agreement | ||||
Derivative [Line Items] | ||||
Comprised value of Swap | $ 45,800,000 | |||
Deferred gain in AOCI | 44,400,000 | |||
Fair value of Swap in AOCI | 44,400,000 | |||
Unamortized deferred gain on Swap | 41,600,000 | |||
Swap unwind costs | 2,400,000 | 2,400,000 | ||
Cash | Swap Termination Agreement | ||||
Derivative [Line Items] | ||||
Comprised value of Swap | 43,400,000 | |||
Other Assets | ||||
Derivative [Line Items] | ||||
Amount receivable from swap | 3,000,000 | |||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional amount | $ 450,000,000 | 0 | 450,000,000 | |
Expiration date of swap | Jul. 01, 2026 | |||
Interest Rate Swap | Swap Termination Agreement | ||||
Derivative [Line Items] | ||||
Swap on interest receivable | $ 1,400,000 | |||
Interest Rate Swap | Other Assets | ||||
Derivative [Line Items] | ||||
Amount receivable from swap | $ 0 | $ 46,931,000 | ||
Interest Rate Swap | Minimum | ||||
Derivative [Line Items] | ||||
Base spread (as a percent) | 3.149% | |||
Interest Rate Swap | Maximum | ||||
Derivative [Line Items] | ||||
Base spread (as a percent) | 3.215% |
Derivatives - Summary of Classi
Derivatives - Summary of Classification of Swap in Consolidated Financial Statements (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 26, 2022 | |
Derivative [Line Items] | ||||
Swap income (loss), Amortization of deferred gain on terminated Swap | $ (1,970,000) | $ 29,719,000 | $ 13,468,000 | |
Other Assets | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swap | 3,000,000 | |||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional amount | 0 | 450,000,000 | $ 450,000,000 | |
Reclassification from AOCI | 18,511,000 | |||
Interest Rate Swap | Other Comprehensive Income (loss) | ||||
Derivative [Line Items] | ||||
Swap income (loss), Amortization of deferred gain on terminated Swap | (1,970,000) | 29,719,000 | 13,468,000 | |
Interest Rate Swap | Other Comprehensive Income (loss) | Reclassified from AOCI(L) | ||||
Derivative [Line Items] | ||||
Swap income (loss), Amortization of deferred gain on terminated Swap | (4,154,000) | 29,719,000 | 13,468,000 | |
Interest Rate Swap | Reclassification from AOCI - Amortization of Swap deferred gain | Other Comprehensive Income (loss) | ||||
Derivative [Line Items] | ||||
Swap income (loss), Amortization of deferred gain on terminated Swap | (2,184,000) | 0 | 0 | |
Interest Rate Swap | Interest Income (Expense) and Other Financing Costs | ||||
Derivative [Line Items] | ||||
Reclassification from AOCI | 15,726,000 | 3,684,000 | (3,602,000) | |
Interest Rate Swap | Interest Income (Expense) and Other Financing Costs | Reclassification from AOCI - Amortization of Swap deferred gain | ||||
Derivative [Line Items] | ||||
Reclassification from AOCI | 2,785,000 | 0 | $ 0 | |
Interest Rate Swap | Other Assets | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swap | $ 0 | $ 46,931,000 |
Equity Method Investment - Addi
Equity Method Investment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Jul. 31, 2022 | Jan. 31, 2022 | Jan. 01, 2022 | Sep. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest Income and Other Income (Expense) | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Gain (losses) from equity method investment | $ 0 | ||||||
Cerebellum | Interest Income and Other Income (Expense) | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Gain (losses) from equity method investment | $ 0.8 | $ 0.3 | |||||
Cerebellum | Alderwood Partners LLP | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity interest percentage | 15% | 15% | |||||
Equity method investment | $ 1.5 | $ 0 | $ 0 | ||||
Equity method commitments to contribute additional capital | $ 3 | $ 3 | $ 4.5 | 4.5 | |||
Additional capital contribution equity method investment | $ 1.5 | ||||||
Gain (losses) from equity method investment | 0.8 | ||||||
Proceeds from sale of equity method investment | 1.5 | ||||||
Private Fund | Cerebellum | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method commitments to contribute additional capital | $ 50 | $ 50 |
Equity - Additional Information
Equity - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Feb. 12, 2018 USD ($) Item $ / shares shares | Mar. 31, 2023 USD ($) | May 31, 2022 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Nov. 23, 2021 Item $ / shares shares | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized | shares | 400,000,000 | 600,000,000 | 600,000,000 | 600,000,000 | ||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Number of votes for each share of common stock | Item | 1 | 1 | ||||||||
Conversion basis of Class B Shares into Class A shares | $ 1,000 | |||||||||
Threshold for number of class B shares as a percent of the aggregate class A shares for conversion | 10% | |||||||||
Common stock, Conversion basis description | Each share of Class B common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was converted into Common Stock on a one-for-one basis. | |||||||||
Preferred stock, shares issued | shares | 0 | |||||||||
Authorized amount for share repurchase program | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | ||||||
Number of shares acquired | shares | 4,200,000 | 3,000,000 | 900,000 | |||||||
Average cost of acquired shares (in dollars per share) | $ / shares | $ 32.33 | $ 28.76 | $ 29.53 | |||||||
Cost of acquired shares | $ 134,500,000 | $ 87,300,000 | $ 26,200 | |||||||
Excise taxes payable on shares repurchased | 1,000,000 | |||||||||
Employee tax obligations amount | 18,694,000 | 31,067,000 | 26,694,000 | |||||||
Employee stock option exercise prices | 5,800,000 | 13,800,000 | 5,100,000 | |||||||
Total dividends | 85,400,000 | 69,200,000 | 37,200,000 | |||||||
Dividends paid | 84,200,000 | 68,300,000 | 36,100,000 | |||||||
Special dividends paid | $ 1,200,000 | $ 900,000 | $ 1,100,000 | |||||||
Common Stock [Member] | ||||||||||
Shares net settled | shares | 800,000 | 1,600,000 | 1,100,000 | |||||||
Net issued value | $ 24,400,000 | $ 45,000,000 | $ 32,100,000 | |||||||
Employee tax obligations amount | 18,600,000 | 31,200,000 | $ 27,000,000 | |||||||
2022 Share Repurchase Program | ||||||||||
Authorized amount for share repurchase program | $ 100,000,000 | |||||||||
Share repurchase program expiration period | Mar. 31, 2023 | |||||||||
2023 Share Repurchase Program | ||||||||||
Authorized amount for share repurchase program | $ 100,000,000 | |||||||||
Share repurchase program expiration period | Dec. 31, 2023 | |||||||||
2024 Share Repurchase Program | ||||||||||
Authorized amount for share repurchase program | $ 100,000,000 | |||||||||
Number of shares acquired | shares | 11,300,000 | |||||||||
Average cost of acquired shares (in dollars per share) | $ / shares | $ 26.26 | |||||||||
Cost of acquired shares | $ 295,800,000 | |||||||||
Remaining authorized amount for share repurchase program | 95,200,000 | |||||||||
Class B | ||||||||||
Common stock, par value | $ / shares | $ 0.01 | |||||||||
Common stock, shares authorized | shares | 200,000,000 | |||||||||
Number of votes for each share of common stock | Item | 10 | |||||||||
Unvested And Outstanding Restricted Share Awards And Stock Options | ||||||||||
Special dividends paid | $ 1,200,000 | $ 1,300,000 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common Stock | |||
Balance at beginning of period (in shares) | 80,528 | 77,242 | 19,389 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Issuance of shares | 9 | 11 | 7 |
Conversion of Class B shares to Common Stock | 6,632 | ||
Vesting of restricted share grants | 786 | 844 | 4 |
Exercise of options | 1,081 | 2,431 | 91 |
Elimination of Class B share class | 51,119 | ||
Balance at end of period (in shares) | 82,404 | 80,528 | 77,242 |
Common Stock | Class B | |||
Balance at beginning of period (in shares) | 0 | 0 | 54,767 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Conversion of Class B shares to Common Stock | (6,632) | ||
Vesting of restricted share grants | 1,604 | ||
Exercise of options | 1,380 | ||
Elimination of Class B share class | (51,119) | ||
Balance at end of period (in shares) | 0 | 0 | 0 |
Treasury Stock | |||
Balance at beginning of period (in shares) | (13,203) | (8,580) | (3,183) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Repurchase of shares | (4,161) | (3,034) | 886 |
Shares withheld related to net settlement of equity awards | (786) | (1,589) | 49 |
Elimination of Class B share class | (4,462) | ||
Balance at end of period (in shares) | (18,150) | (13,203) | (8,580) |
Treasury Stock | Class B | |||
Balance at beginning of period (in shares) | 0 | 0 | (3,431) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Shares withheld related to net settlement of equity awards | (1,031) | ||
Elimination of Class B share class | 4,462 | ||
Balance at end of period (in shares) | 0 | 0 | 0 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total intrinsic value of options exercised | $ 28,500,000 | $ 54,900,000 | $ 39,500,000 | |
Common stock, dividends declared | $ 1.28 | $ 1 | $ 0.53 | |
Amount of cash bonuses and distributions related to all dividends previously declared on unvested shares | $ 1,200,000 | $ 900,000 | $ 1,100,000 | |
Total share based compensation expense expects to recognize | $ 14,700,000 | |||
Share based compensation, weighted average period | 1 year 8 months 12 days | |||
Aggregate intrinsic value of stock options currently exercisable | $ 41,600,000 | $ 52,400,000 | $ 152,000,000 | |
Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 539,597 | 655,542 | 270,824 | |
Total number of restricted shares granted | 786,205 | 844,205 | 1,607,973 | |
Total fair value of restricted share awards vested | $ 23,100,000 | $ 24,200,000 | $ 45,200,000 | |
2013 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of options granted | 0 | |||
2018 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock available for issuance | 3,372,484 | |||
Common stock remained available for issuance | 799,111 | |||
Total number of restricted shares granted | 0 | 0 | 0 | |
2018 Plan | Restricted Shares of Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 539,597 | 655,542 | 270,824 | |
2018 Plan | Restricted Shares of Common Stock | Vested On Grant Date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 38,669 | 41,587 | 34,770 | |
2018 Plan | Restricted Shares of Common Stock | Vest Over 33 Months | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 3,108 | |||
Vesting period from grant date | 33 months | |||
2018 Plan | Restricted Shares of Common Stock | Vest Over Three Years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 24,140 | |||
Vesting period from grant date | 4 years | |||
2018 Plan | Restricted Shares of Common Stock | Vest Over Two Years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 68,271 | 449,113 | 9,035 | |
Vesting period from grant date | 2 years | 2 years | 2 years | |
2018 Plan | Restricted Shares of Common Stock | Vest Over Three Years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 258,908 | 158,051 | 227,019 | |
Vesting period from grant date | 3 years | 3 years | 3 years | |
2018 Plan | Restricted Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 3,683 | |||
2018 Plan | Restricted Shares | Vest Over Two Year | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 84,039 | |||
Vesting period from grant date | 2 years | |||
2018 Plan | Restricted Shares | Vest Over Two Years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 33,624 | |||
Vesting period from grant date | 2 years | |||
Share-Based Payment Award, Award Vesting Rights, Percentage | 33% | |||
2018 Plan | Restricted Shares | Vest Rest in One Year | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period from grant date | 1 year | |||
2018 Plan | Restricted Shares | Vest Over Two Year | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total number of restricted shares granted | 31,946 | |||
Vesting period from grant date | 2 years | |||
Share-Based Payment Award, Award Vesting Rights, Percentage | 67% | |||
2018 Plan | Restricted Shares | Vest Rest in One Year | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period from grant date | 1 year | |||
ESPP Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock available for issuance | 350,388 | |||
Common stock remained available for issuance | 308,619 | |||
Term of individual offering periods | 6 months | |||
Term established for purchasing stock under the employee stock purchase plan | 3 months | |||
Discount percentage | 5% | |||
Maximum dollar amount of shares that can be purchased by an individual in any given calendar year | $ 25,000,000 | |||
2018 and 2013 Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 16,500,000 | $ 17,800,000 | $ 17,600,000 | |
Tax benefit related to stock-based compensation | $ 4,000,000 | $ 4,300,000 | $ 4,300,000 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Option | |||
Avg wtd grant-date fair value | |||
Outstanding at beginning of period | $ 4.31 | $ 3.94 | $ 3.91 |
Forfeited | 6.32 | 6.46 | 5.29 |
Exercised | 3.69 | 3.51 | 3.72 |
Outstanding at end of the period | 4.68 | 4.31 | 3.94 |
Vested | 4.66 | 4.27 | 3.88 |
Unvested | 4.85 | 4.85 | 5.28 |
Avg wtd exercise price | |||
Outstanding at beginning of period | 7.57 | 6.71 | 6.5 |
Forfeited | 13.84 | 14.15 | 10.73 |
Exercised | 5.58 | 5.7 | 5.52 |
Outstanding at end of the period | 8.76 | 7.57 | 6.71 |
Vested | 8.71 | 7.46 | 6.53 |
Unvested | $ 9.23 | $ 9.24 | $ 10.6 |
Units | |||
Outstanding at beginning of period | 2,884,180 | 5,315,210 | 6,865,101 |
Forfeited | (650) | (451) | (79,271) |
Exercised | (1,081,677) | (2,430,579) | (1,470,620) |
Outstanding at end of the period | 1,801,853 | 2,884,180 | 5,315,210 |
Vested | 1,625,655 | 2,707,632 | 5,072,585 |
Unvested | 176,198 | 176,548 | 242,625 |
Restricted Shares | |||
Avg wtd grant-date fair value | |||
Unvested at beginning of period | $ 25.38 | $ 17.75 | $ 14.99 |
Granted | 30.25 | 31.01 | 27.29 |
Vested | 22.96 | 17.5 | 14.62 |
Forfeited | 29.55 | 28.79 | 16.51 |
Unvested at end of period | $ 30.39 | $ 25.38 | $ 17.75 |
Units | |||
Unvested at beginning of period | 1,153,515 | 1,352,839 | 2,827,008 |
Granted | 539,597 | 655,542 | 270,824 |
Vested | (786,205) | (844,205) | (1,607,973) |
Forfeited | (53,159) | (10,661) | (137,020) |
Unvested at end of period | 853,748 | 1,153,515 | 1,352,839 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets | |
Operating lease ROU assets | [1] | $ 9,665 | $ 13,396 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities | |
Current portion of operating lease liabilities | [2] | $ 4,675 | $ 5,056 |
Noncurrent portion of operating lease liabilities | [2] | 6,487 | 10,227 |
Total operating lease liabilities | $ 11,162 | $ 15,283 | |
Weighted-average remaining lease term | 4 years | 4 years 4 months 24 days | |
Weighted-average discount rate | 4.70% | 4.60% | |
[1] ROU assets are recorded in other assets on the Consolidated Balance Sheets. Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the Consolidated Balance Sheets. |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense and Other Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 5,207 | $ 5,235 |
Short-term lease cost | 0 | 84 |
Variable lease cost | 1,885 | 1,798 |
Gross lease cost | 7,092 | 7,117 |
Sub-lease income | (815) | (787) |
Net lease cost | 6,277 | 6,330 |
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows for operating leases | $ 5,660 | $ 5,023 |
Leases - Additional Information
Leases - Additional Information (Details) | Dec. 31, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease remaining lease terms | 1 year |
Operating lease renewal options term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease remaining lease terms | 8 years |
Operating lease renewal options term | 5 years |
Leases - Summary of Future Undi
Leases - Summary of Future Undiscounted Cash Flows Related to Operating Leases and Reconciliation to Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 5,058 | |
2025 | 2,444 | |
2026 | 1,623 | |
2027 | 1,069 | |
2028 | 474 | |
Thereafter | 1,454 | |
Total undiscounted lease payments | 12,122 | |
Less: imputed interest | 960 | |
Total lease liabilities | $ 11,162 | $ 15,283 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement | |||
Expense of employer matched contributions | $ 5 | $ 4.8 | $ 4 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Components of Deferred Compensation Plan-Related Expense Related to Employee DC Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement | |||
Change in value of deferred compensation plan liability | $ 523 | $ 3,913 | $ 633 |
Deferred Compensation Plan | |||
Deferred Compensation Arrangement | |||
Employee contributions | 1,529 | 1,872 | 2,231 |
Employer contributions | 683 | 936 | 975 |
Change in value of deferred compensation plan liability | 2,754 | (2,907) | 5,527 |
Total | $ 4,966 | $ (99) | $ 8,733 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share Reconciliation [Abstract] | |||
Net income | $ 213,157 | $ 275,511 | $ 278,389 |
Shares: | |||
Basic weighted average common shares outstanding | 66,202 | 68,481 | 67,976 |
Assumed conversion of dilutive instruments | 2,012 | 3,785 | 6,175 |
Diluted weighted average common shares outstanding | 68,214 | 72,266 | 74,151 |
Earnings per share of common stock | |||
Basic | $ 3.22 | $ 4.02 | $ 4.10 |
Diluted | $ 3.12 | $ 3.81 | $ 3.75 |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Details) $ in Millions | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | ||
Net capital | $ 0.4 | $ 0.4 |
Excess net capital | 0.3 | 0.2 |
Minimum net capital requirement | $ 0.1 | $ 0.2 |
Ratio of aggregated indebtedness to net capital | 5.15 | 8.25 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance at beginning of period | $ 1,065,410 | $ 929,927 | $ 707,541 | ||
Net current period other comprehensive income (loss) | (4,114) | 29,470 | 13,432 | ||
Balance at end of period | 1,053,001 | 1,065,410 | 929,927 | ||
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance at beginning of period | 35,442 | 5,972 | (7,460) | ||
Other comprehensive income (loss) before reclassification and tax | 13,268 | 42,511 | 14,128 | ||
Tax impact | (2,864) | (10,245) | (3,425) | ||
Reclassification adjustments, before tax | (18,511) | [1] | (3,684) | 3,602 | |
Tax impact | 3,993 | 888 | (873) | ||
Net current period other comprehensive income (loss) | (4,114) | 29,470 | 13,432 | ||
Balance at end of period | 31,328 | 35,442 | 5,972 | ||
Cash Flow Hedges | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance at beginning of period | [2],[3] | 35,614 | 5,895 | (7,573) | |
Other comprehensive income (loss) before reclassification and tax | [2],[3] | 13,214 | 42,842 | 14,177 | |
Tax impact | [2],[3] | (2,850) | (10,327) | (3,438) | |
Reclassification adjustments, before tax | [2],[3] | (18,511) | [1] | (3,684) | 3,602 |
Tax impact | [2],[3] | 3,993 | 888 | (873) | |
Net current period other comprehensive income (loss) | [2],[3] | (4,154) | 29,719 | 13,468 | |
Balance at end of period | [2],[3] | 31,460 | 35,614 | 5,895 | |
Cumulative Translation Adjustment | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance at beginning of period | (172) | 77 | 113 | ||
Other comprehensive income (loss) before reclassification and tax | 54 | (331) | (49) | ||
Tax impact | (14) | 82 | 13 | ||
Net current period other comprehensive income (loss) | 40 | (249) | (36) | ||
Balance at end of period | $ (132) | $ (172) | $ 77 | ||
[1] Reclassification adjustments, before tax, includes $ 15,726 of income reclassified out of AOCI prior to the termination of the Swap and $ 2,785 of amortization of deferred gain following the termination of the Swap. On October 30, 2023, the Company terminated the Swap. The termination resulted in a $ 44.4 million deferred gain recorded in AOCI, before tax, and the elimination of the unrealized gain on cash flow hedge recorded in AOCI prior to the termination. The deferred gain is being amortization a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 12, Derivatives, for further information on the monetization of the interest rate swap gain. Reclassifications out of AOCI(L) related to cash flow hedges are recorded in interest expense and other financing costs |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income reclassified of AOCI | $ 15,726 | $ 3,684 | $ (3,602) | |
Amortization of deferred gain on terminated interest rate swap | 2,785 | |||
Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Deferred gain in AOCI | $ 44,400 | |||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income reclassified of AOCI | 15,726 | |||
Amortization of deferred gain on terminated interest rate swap | $ 2,785 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Feb. 08, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 28, 2023 | |
Subsequent Event [Line Items] | |||||
Dividends declared per share of common stock | $ 1.28 | $ 1 | $ 0.53 | ||
WestEnd Acquisition | |||||
Subsequent Event [Line Items] | |||||
Amount available to compensate for eligible claims under purchase agreement indemnification provisions | $ 2.4 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends, date of declared | Feb. 08, 2024 | ||||
Dividends declared per share of common stock | $ 0.335 | ||||
Dividends payable date | Mar. 25, 2024 | ||||
Dividends payable, date of record | Mar. 11, 2024 |