Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 31, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | Victory Capital Holdings, Inc. | |
Entity Central Index Key | 0001570827 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2024 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Common Stock, Shares Outstanding | 64,875,913 | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | VCTR | |
Security Exchange Name | NASDAQ | |
Entity Tax Identification Number | 32-0402956 | |
Entity File Number | 001-38388 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 15935 La Cantera Parkway | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78256 | |
City Area Code | 216 | |
Local Phone Number | 898-2400 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and cash equivalents | $ 118,970 | $ 123,547 |
Receivables | 100,660 | 87,570 |
Prepaid expenses | 6,979 | 5,785 |
Investments, at fair value | 33,759 | 31,808 |
Property and equipment, net | 15,599 | 19,578 |
Goodwill | 981,805 | 981,805 |
Other intangible assets, net | 1,271,200 | 1,281,832 |
Other assets | 12,309 | 10,691 |
Total assets | 2,541,281 | 2,542,616 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued expenses | 54,528 | 56,477 |
Accrued compensation and benefits | 54,020 | 55,456 |
Consideration payable for acquisition of business | 141,200 | 217,200 |
Deferred tax liability, net | 142,418 | 128,714 |
Other liabilities | 44,579 | 42,499 |
Long-term debt, net | 981,724 | 989,269 |
Total liabilities | 1,418,469 | 1,489,615 |
Stockholders' equity | ||
Common stock, $0.01 par value per share: 2024 - 600,000,000 shares authorized, 83,454.305 shares issued and 64,808,655 shares outstanding; 2023 - 600,000,000 shares authorized, 82,404,305 shares issued and 64,254,714 shares outstanding | 835 | 824 |
Additional paid-in capital | 741,490 | 728,283 |
Treasury stock, at cost: 2024 - 18,645,658 shares; 2023 - 18,149,591 shares | (464,944) | (444,286) |
Accumulated other comprehensive income | 25,024 | 31,328 |
Retained earnings | 820,407 | 736,852 |
Total stockholders' equity | 1,122,812 | 1,053,001 |
Total liabilities and stockholders' equity | $ 2,541,281 | $ 2,542,616 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
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 | 83,454,313 | 82,404,305 |
Common stock, shares outstanding | 64,808,655 | 64,254,714 |
Treasury stock, shares | 18,645,658 | 18,149,591 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | ||||
Total revenue | $ 219,621 | $ 204,226 | $ 435,478 | $ 405,546 |
Expenses | ||||
Personnel compensation and benefits | 55,660 | 54,940 | 115,114 | 112,542 |
Distribution and other asset-based expenses | 36,474 | 37,344 | 72,737 | 74,998 |
General and administrative | 14,385 | 13,250 | 28,397 | 25,638 |
Depreciation and amortization | 7,551 | 9,650 | 15,152 | 21,330 |
Change in value of consideration payable for acquisition of business | (8,200) | 1,500 | 4,000 | 8,900 |
Acquisition-related costs | 3,049 | 16 | 4,075 | 18 |
Restructuring and integration costs | 105 | 0 | 597 | 29 |
Total operating expenses | 109,024 | 116,700 | 240,072 | 243,455 |
Income from operations | 110,597 | 87,526 | 195,406 | 162,091 |
Other income (expense) | ||||
Interest income and other income (expense) | 1,557 | 1,971 | 5,122 | 3,515 |
Interest expense and other financing costs | (16,279) | (14,902) | (32,765) | (29,141) |
Loss on debt extinguishment | (100) | 0 | (100) | 0 |
Total other expense, net | (14,822) | (12,931) | (27,743) | (25,626) |
Income before income taxes | 95,775 | 74,595 | 167,663 | 136,465 |
Income tax expense | (21,524) | (17,924) | (37,721) | (30,521) |
Net income | $ 74,251 | $ 56,671 | $ 129,942 | $ 105,944 |
Earnings per share of common stock | ||||
Basic | $ 1.15 | $ 0.85 | $ 2.01 | $ 1.58 |
Diluted | $ 1.12 | $ 0.83 | $ 1.97 | $ 1.53 |
Weighted average number of shares outstanding | ||||
Basic | 64,734 | 66,466 | 64,561 | 66,874 |
Diluted | 66,075 | 68,500 | 66,025 | 69,037 |
Dividends declared per share of common stock | $ 0.37 | $ 0.32 | $ 0.705 | $ 0.64 |
Investment Management Fees | ||||
Revenue | ||||
Total revenue | $ 173,163 | $ 159,410 | $ 342,948 | $ 316,246 |
Fund Administration and Distribution Fees | ||||
Revenue | ||||
Total revenue | $ 46,458 | $ 44,816 | $ 92,530 | $ 89,300 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 74,251 | $ 56,671 | $ 129,942 | $ 105,944 |
Other comprehensive income (loss), net of tax | ||||
Net unrealized income (loss) on cash flow hedges | 0 | 3,919 | 0 | (1,169) |
Net amortization of deferred gain on terminated cash flow hedges | (3,139) | (6,278) | ||
Net unrealized income (loss) on foreign currency translation | (1) | (6) | (26) | 14 |
Total other comprehensive income (loss), net of tax | (3,140) | 3,913 | (6,304) | (1,155) |
Comprehensive income | $ 71,111 | $ 60,584 | $ 123,638 | $ 104,789 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balance at beginning 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 | 60 | 60 | ||||
Repurchase of shares | (32,903) | (32,903) | ||||
Shares withheld related to net settlement of equity awards | (11,656) | (11,656) | ||||
Vesting of restricted share grants | 7 | (7) | ||||
Exercise of options | 1,710 | 3 | 1,707 | |||
Other comprehensive income (loss) | (5,068) | (5,068) | ||||
Share-based compensation | 4,252 | 4,252 | ||||
Dividends paid | (22,524) | (22,524) | ||||
Net Income (Loss) | 49,273 | 49,273 | ||||
Balance at end of period at Mar. 31, 2023 | 1,048,554 | 815 | (329,984) | 711,478 | 30,374 | 635,871 |
Balance at beginning of period at Dec. 31, 2022 | 1,065,410 | 805 | (285,425) | 705,466 | 35,442 | 609,122 |
Increase (Decrease) in Stockholders' Equity | ||||||
Other comprehensive income (loss) | (1,155) | (1,155) | ||||
Net Income (Loss) | 105,944 | |||||
Balance at end of period at Jun. 30, 2023 | 1,046,101 | 817 | (377,670) | 717,208 | 34,287 | 671,459 |
Balance at beginning of period at Mar. 31, 2023 | 1,048,554 | 815 | (329,984) | 711,478 | 30,374 | 635,871 |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock | 51 | 51 | ||||
Repurchase of shares | (44,496) | (44,496) | ||||
Shares withheld related to net settlement of equity awards | (3,190) | (3,190) | ||||
Exercise of options | 1,439 | 2 | 1,437 | |||
Other comprehensive income (loss) | 3,913 | 3,913 | ||||
Share-based compensation | 4,242 | 4,242 | ||||
Dividends paid | (21,083) | (21,083) | ||||
Net Income (Loss) | 56,671 | 56,671 | ||||
Balance at end of period at Jun. 30, 2023 | 1,046,101 | 817 | (377,670) | 717,208 | 34,287 | 671,459 |
Balance at beginning of period at Dec. 31, 2023 | 1,053,001 | 824 | (444,286) | 728,283 | 31,328 | 736,852 |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock | 75 | 75 | ||||
Shares withheld related to net settlement of equity awards | (13,253) | (13,253) | ||||
Vesting of restricted share grants | 4 | (4) | ||||
Exercise of options | 3,197 | 4 | 3,193 | |||
Other comprehensive income (loss) | (3,164) | (3,164) | ||||
Share-based compensation | 3,970 | 3,970 | ||||
Dividends paid | (22,384) | (22,384) | ||||
Net Income (Loss) | 55,691 | 55,691 | ||||
Balance at end of period at Mar. 31, 2024 | 1,077,133 | 832 | (457,539) | 735,517 | 28,164 | 770,159 |
Balance at beginning of period at Dec. 31, 2023 | 1,053,001 | 824 | (444,286) | 728,283 | 31,328 | 736,852 |
Increase (Decrease) in Stockholders' Equity | ||||||
Other comprehensive income (loss) | (6,304) | (6,304) | ||||
Net Income (Loss) | 129,942 | |||||
Balance at end of period at Jun. 30, 2024 | 1,122,812 | 835 | (464,944) | 741,490 | 25,024 | 820,407 |
Balance at beginning of period at Mar. 31, 2024 | 1,077,133 | 832 | (457,539) | 735,517 | 28,164 | 770,159 |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock | 63 | 63 | ||||
Shares withheld related to net settlement of equity awards | (7,405) | (7,405) | ||||
Exercise of options | 2,146 | 3 | 2,143 | |||
Other comprehensive income (loss) | (3,140) | (3,140) | ||||
Share-based compensation | 3,767 | 3,767 | ||||
Dividends paid | (24,003) | (24,003) | ||||
Net Income (Loss) | 74,251 | 74,251 | ||||
Balance at end of period at Jun. 30, 2024 | $ 1,122,812 | $ 835 | $ (464,944) | $ 741,490 | $ 25,024 | $ 820,407 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net income | $ 129,942 | $ 105,944 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for deferred income taxes | 15,741 | 12,003 |
Depreciation and amortization | 15,152 | 21,330 |
Deferred financing costs, accretion expense and derivative gains/losses | (6,149) | 2,104 |
Stock-based and deferred compensation | 10,131 | 11,356 |
Change in fair value of contingent consideration obligations | 4,000 | 8,900 |
Unrealized (appreciation) depreciation on investments | (1,161) | (1,375) |
Loss on debt extinguishment | 100 | 0 |
Changes in operating assets and liabilities: | ||
Receivables | (14,836) | (8,491) |
Prepaid expenses | (1,194) | (928) |
Other assets | (479) | (1,999) |
Accounts payable and accrued expenses | (223) | 5,388 |
Accrued compensation and benefits | (1,919) | (12,279) |
Other liabilities | (717) | (391) |
Net cash provided by operating activities | 148,388 | 141,562 |
Cash flows from investing activities | ||
Purchases of property and equipment | (725) | (2,572) |
Purchases of investments | (1,879) | (4,292) |
Sales of investments | 1,089 | 2,942 |
Net cash used in investing activities | (1,515) | (3,922) |
Cash flows from financing activities | ||
Issuance of common stock | 5,481 | 3,260 |
Repurchase of common stock | (5,090) | (79,912) |
Payments of taxes related to net share settlement of equity awards | (15,081) | (11,775) |
Payment of debt financing fees | (813) | 0 |
Repayments of long-term senior debt | (9,519) | 0 |
Payment of dividends | (46,387) | (43,607) |
Payment of consideration for acquisition | (80,000) | 0 |
Net cash used in financing activities | (151,409) | (132,034) |
Effect of changes of foreign exchange rate on cash and cash equivalents | (41) | 3 |
Net increase (decrease) in cash and cash equivalents | (4,577) | 5,609 |
Cash and cash equivalents, beginning of period | 123,547 | 38,171 |
Cash and cash equivalents, end of period | 118,970 | 43,780 |
Supplemental cash flow information | ||
Cash paid for interest | 39,766 | 32,729 |
Cash paid for income taxes | 30,108 | 24,465 |
Noncash items | ||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,862 | $ 0 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ 74,251 | $ 55,691 | $ 56,671 | $ 49,273 | $ 129,942 | $ 105,944 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
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 |
Non-Rule 10b5-1 Arrangement Modified | false |
Rule 10b5-1 Arrangement Modified | false |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2024 | |
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.” 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. VCM’s other wholly-owned subsidiary, RS Investments (HK) Limited, ceased operations in May 2023, and was deregistered and dissolved in May 2024. 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 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. 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 through private closed-end funds (the “NEC Funds”). 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. On April 16, 2024, the Company and Amundi Asset Management S.A.S ("Amundi') announced that they had signed a non-binding Memorandum of Understanding to combine Amundi US into Victory, for Amundi to become a strategic shareholder of Victory, and to establish long-term global distribution agreements. On July 9, 2024, the Company announced that it had reached a definitive agreement with Amundi for their previously announced transaction. Refer to Note 15, Subsequent Events, for further information. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. Use of Estimates and Assumptions The preparation of the unaudited condensed 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 and the notes. Actual results may ultimately differ materially from those estimates. New Accounting Pronouncements 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. • Income Taxes : In December 2023 , the FASB issued ASU 2023-09, "Income Taxes: Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 revises income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as the effectiveness of certain other income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The standard should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact that ASU 2023-09 will have on the Company's consolidated financial statement disclosures. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 3. Revenue RECOGNITION In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Investment management fees Mutual funds (Victory Funds) $ 116,550 $ 109,689 $ 231,723 $ 218,105 ETFs (VictoryShares) 5,515 5,260 10,694 10,701 Separate accounts and other vehicles 49,061 42,653 96,373 85,235 Performance-based fees Mutual funds (Victory Funds III) 1,949 1,712 3,972 2,402 Separate accounts and other vehicles 88 96 186 ( 197 ) Total investment management fees 173,163 159,410 342,948 316,246 Fund administration and distribution fees Administration fees Mutual funds (Victory Funds) $ 26,775 $ 24,927 $ 53,109 $ 49,303 ETFs (VictoryShares) 772 724 1,516 1,434 Distribution fees Mutual funds (Victory Funds) 5,549 5,590 11,132 11,330 Transfer agent fees Mutual funds (Victory Funds III) 13,362 13,575 26,773 27,233 Total fund administration and distribution fees 46,458 44,816 92,530 89,300 Total revenue $ 219,621 $ 204,226 $ 435,478 $ 405,546 The following table presents balances of receivables: (in thousands) June 30, 2024 December 31, 2023 Customer receivables Mutual funds (Victory Funds) $ 56,201 $ 55,858 ETFs (VictoryShares) 2,233 2,079 Separate accounts and other vehicles 34,567 28,189 Receivables from contracts with customers 93,001 86,126 Non-customer receivables 7,659 1,444 Total receivables $ 100,660 $ 87,570 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 unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed 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. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2024 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. ACQUISITIONS USAA AMCO Acquisition In the fourth quarter of 2023, the Company made the fourth and final earn-out payment due to sellers under the terms of the USAA AMCO purchase agreement. For the three and six months ended June 30, 2023, the increase in the USAA AMCO contingent consideration liability of $ 1.7 million and $ 6.0 million, respectively, was recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. NEC Acquisition Under the terms of the NEC purchase agreement, the Company will pay up to an additional $ 35.0 million in cash based on NEC’s 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, less any contingent payments previously paid, is due 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. The Company records compensation expense over the estimated service period in an amount equal to the total contingent payments currently forecasted to be paid. For the three and six months ended June 30, 2024, the Company recorded $ 0.5 million and $ 1.5 million in NEC contingent payment compensation expense, which is included in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. Expense recorded for the three and six months ended June 30, 2023 was $ 1.4 million and $ 3.0 million, respectively. The liability for NEC contingent payments totaled $ 15.2 million and $ 13.7 million as of June 30, 2024 and December 31, 2023, respectively, which is included in accrued compensation and benefits in the unaudited Condensed Consolidated Balance Sheets. WestEnd Acquisition Under the terms of the WestEnd purchase agreement, a maximum of $ 320.0 million ($ 80.0 million per year) of contingent payments is payable to sellers. 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. The estimated fair value of contingent consideration payable to sellers was $ 141.2 million as of June 30, 2024 and $ 217.2 million as of December 31, 2023, respectively. In the first quarter of 2024, the Company paid $ 80.0 million in cash to sellers as a catch-up payment for the first earn-out period. For the three and six months ended June 30, 2024, the change in the liability was a decrease of $ 8.2 million and an increase of $ 4.0 million, respectively. For the three and six months ended June 30, 2023, the change in the liability was a decrease of $ 0.2 million and an increase of $ 2.9 million, respectively. The impact of decreasing or increasing the valuation of the contingent consideration liability is recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. The estimated fair value of 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 adjustment for revenue, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk adjustment for revenue 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. Significant inputs to the valuation of contingent consideration payable to sellers as of June 30, 2024 and December 31, 2023 are as follows and are approximate values: June 30, 2024 December 31, 2023 Net revenue 5 year average annual growth rate 17 % 22 % Market price of risk adjustment for revenue (continuous) 7 % 7 % Revenue volatility 21 % 21 % Discount rate 7 % 7 % Years remaining in earn out period 3.3 3.8 Undiscounted estimated remaining earn out payments $ millions $ 160 - $ 240 $ 243 - $ 320 Amundi US Acquisition On April 16, 2024 , the Company and Amundi announced a non-binding Memorandum of Understanding to combine Amundi US into Victory, for Amundi to become a strategic shareholder of Victory, and to establish long-term global distribution agreements. In exchange, Amundi would receive a 26.1 % economic stake in Victory, with no cash payment involved, and would have two of its representatives joining the Company’s Board of Directors when the transaction closes. Refer to Note 15, Subsequent Events, for developments related to the Amundi US Acquisition subsequent to June 30, 2024. Acquisition-related costs Acquisition-related costs include legal fees, advisory services, mutual fund proxy voting costs and other one-time expenses related to business combinations. The Company expensed $ 3.1 million and $ 4.1 million in acquisition-related costs in the three and six months ended June 30, 2024 ($ 0.0 million in 2023), respectively. These amounts are included in acquisition-related costs in the unaudited Condensed Consolidated Statements of Operations and relate primarily to the Amundi US Acquisition. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Money market fund $ 103,148 $ 103,148 $ — $ — Investments in proprietary funds 561 561 — — Deferred compensation plan investments 33,198 33,198 — — Total Financial Assets $ 136,907 $ 136,907 $ — $ — Financial Liabilities Contingent consideration arrangements ( 141,200 ) — — ( 141,200 ) Total Financial Liabilities $ ( 141,200 ) $ — $ — $ ( 141,200 ) 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 ) 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. Contingent consideration arrangements represent the WestEnd earn-out payment liability, which is included in consideration payable for acquisition of business in the unaudited Condensed 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. An increase in the projected growth rate for net 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 earn-out 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 unaudited Condensed Consolidated Statements of Operations. The following table presents the balance of the change in contingent consideration arrangement liabilities for the six months ended June 30, 2024: (in thousands) Contingent Consideration Liabilities Balance, December 31, 2023 $ 217,200 WestEnd earn-out payment ( 80,000 ) WestEnd change in fair value measurement 4,000 Balance, June 30, 2024 $ 141,200 There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2023 to June 30, 2024. 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 June 30, 2024 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 | 6 Months Ended |
Jun. 30, 2024 | |
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 unaudited Condensed Consolidated Statements of Operations. The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed 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 unaudited Condensed 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 unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers. (in thousands) June 30, 2024 December 31, 2023 Related party assets Cash and cash equivalents $ 103,148 $ 109,183 Receivables (investment management fees) 47,432 46,217 Receivables (fund administration and distribution fees) 14,775 14,238 Prepaid expenses 1,281 730 Investments (investments in proprietary funds, fair value) 561 534 Investments (deferred compensation plan investments, fair value) 33,063 31,143 Total $ 200,260 $ 202,045 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 5,664 $ 5,641 Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Related party revenue Investment management fees $ 131,182 $ 121,910 $ 259,517 $ 241,893 Fund administration and distribution fees 46,458 44,816 92,530 89,300 Total $ 177,640 $ 166,726 $ 352,047 $ 331,193 Related party expense General and administrative $ 106 $ 127 $ 218 $ 249 Related party other income (expense) Interest income and other income (expense) $ 1,282 $ 1,331 $ 4,568 $ 2,795 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | NOTE 7. Investments As of June 30, 2024 and December 31, 2023, 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 consist of investments in Victory 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 June 30, 2024 $ 572 $ 70 $ ( 81 ) $ 561 As of December 31, 2023 569 55 ( 90 ) 534 There were no sales of investments in proprietary funds and realized gains and losses during the three and six months ended June 30, 2024. The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the three and six months ended June 30, 2023. Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended June 30, 2023 $ 32 $ 4 $ — For the six months ended June 30, 2023 32 4 — 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 June 30, 2024 $ 30,957 $ 2,492 $ ( 251 ) $ 33,198 As of December 31, 2023 30,109 1,610 ( 445 ) 31,274 The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the three and six months ended June 30, 2024 and 2023: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended June 30, 2024 $ 790 $ 59 $ ( 17 ) For the three months ended June 30, 2023 $ 939 $ 3 $ ( 31 ) Sale Realized (in thousands) Proceeds Gains (Losses) For the six months ended June 30, 2024 $ 1,089 $ 81 $ ( 22 ) For the six months ended June 30, 2023 $ 2,910 $ 4 $ ( 232 ) |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. Income Taxes The effective tax rate for the three and six months ended June 30, 2024 and 2023 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses. For the three months ended June 30, 2024 and 2023, the provision for income taxes was $ 21.5 million and $ 17.9 million, or 22.5 % and 24.0 %, of pre-tax income respectively. The effective tax rate for the three months ended June 30, 2024 was lower than the effective tax rate for the same period in 2023 due primarily to increased excess tax benefits on share-based compensation. For the six months ended June 30, 2024 and 2023, the provision for income taxes was $ 37.7 million and $ 30.5 million, or 22.5 % and 22.4 %, of pre-tax income respectively. No valuation allowance was recorded for deferred tax assets in the period ended June 30, 2024 and 2023. 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 | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. Debt On June 7, 2024, the Company entered into the Fifth Amendment to the 2019 Credit Agreement, extending the maturity date of the $ 100,000,000 senior secured first lien revolving facility from July 1, 2024 to March 31, 2026, and decreasing the drawn interest rate margin by 0.50 % per annum. The revolving facility otherwise remains subject to substantially the same terms as those set forth in the 2019 Credit Agreement. The Company incurred $ 1.0 million in upfront fees, arranger fees and other third party costs related to the Fifth Amendment to the 2019 Credit Agreement, which were recorded to revolving credit facility debt issuance cost in other assets. The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023. June 30, December 31, Interest Rate Effective Interest Rate (in thousands) 2024 2023 2024 2023 2024 2023 Term Loans Due July 2026 $ 624,693 $ 630,680 7.65 % 7.77 % 8.05 % 8.17 % Due December 2028 367,496 371,028 7.65 % 7.77 % 7.98 % 8.10 % Term loan principal outstanding 992,189 1,001,708 Unamortized debt issuance costs ( 7,412 ) ( 8,753 ) Unamortized debt discount ( 3,053 ) ( 3,686 ) Long-term debt, net $ 981,724 $ 989,269 The Company elects to use three-month Term SOFR plus a ten-point credit spread adjustment plus the margin on SOFR required by the 2019 Credit Agreement to pay interest on its debt. The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the 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 June 30, 2024, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant. Repayments of outstanding term loans under the 2019 Credit Agreement totaled $ 9.5 million for the three and six months ended June 30, 2024. The Company recognized a loss on debt extinguishment of $ 0.1 million in the three and six months ended June 30, 2024, due to the repayments of term loan principal. There were no repayments of outstanding term loans under the 2019 Credit Agreement during the three and six months ended June 30, 2023, and no loss on debt extinguishment was recorded in these periods. The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the periods ended June 30, 2024 and 2023. For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Interest expense $ 19,202 $ 18,406 $ 38,665 $ 35,683 Amortization of debt issuance costs 802 756 1,557 1,504 Amortization of debt discount 301 302 603 600 Interest rate swap (income) expense — ( 4,683 ) — ( 8,889 ) Amortization of deferred gain on terminated interest rate swap ( 4,155 ) — ( 8,309 ) — Other 129 121 249 243 Total $ 16,279 $ 14,902 $ 32,765 $ 29,141 Refer to Note 15, Subsequent Events, for developments related to the 2019 Credit Agreement subsequent to June 30, 2024. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Equity | NOTE 10. Equity Shares Rollforward The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Issued Shares of Treasury Stock Balance, December 31, 2023 82,404 ( 18,150 ) Issuance of shares 2 — Vesting of restricted share grants 382 — Exercise of options 378 — Shares withheld related to net settlement of equity awards — ( 345 ) Balance, March 31, 2024 83,166 ( 18,495 ) Issuance of shares 1 — Vesting of restricted share grants 18 — Exercise of options 269 — Shares withheld related to net settlement of equity awards — ( 151 ) Balance, June 30, 2024 83,454 ( 18,646 ) Shares of Common Stock Issued Shares of Treasury Stock Balance, December 31, 2022 80,528 ( 13,203 ) Issuance of shares 3 — Repurchase of shares — ( 1,032 ) Vesting of restricted share grants 680 — Exercise of options 295 — Shares withheld related to net settlement of equity awards — ( 390 ) Balance, March 31, 2023 81,506 ( 14,625 ) Issuance of shares 2 — Repurchase of shares — ( 1,380 ) Vesting of restricted share grants 27 — Exercise of options 191 — Shares withheld related to net settlement of equity awards — ( 102 ) Balance, June 30, 2023 81,726 ( 16,107 ) Shares Repurchased and Withheld Share Repurchase Programs 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. No shares were repurchased by the Company during the three and six months ended June 30, 2024. For the same periods in 2023, the Company repurchased 1.4 million and 2.4 million, respectively, shares of Common Stock at a total cost of $ 44.5 million and $ 77.4 million, which included $ 0.2 million and $ 0.6 million of excise taxes payable on shares repurchased, for an average price of $ 32.25 and $ 32.09 per share. As of June 30, 2024, $ 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 During the three months ended June 30, 2024, the Company net settled 0.2 million shares of Common Stock for $ 7.4 million to satisfy $ 5.3 million in employee tax obligations and $ 2.1 million in employee stock option exercise prices. During the same period in 2023, 0.1 million shares were net settled for $ 3.2 million to satisfy $ 1.8 million of employee tax obligations and $ 1.4 million of employee stock option exercise prices. During the six months ended June 30, 2024, the Company net settled 0.5 million shares of Common Stock for $ 20.7 million to satisfy $ 15.6 million in employee tax obligations and $ 5.1 million in employee stock option exercise prices. During the same period in 2023, 0.5 million shares were net settled for $ 14.8 million to satisfy $ 11.8 million of employee tax obligations and $ 3.0 million of employee stock option exercise prices. Dividend Payments Dividends paid or payable for the six months ended June 30, 2024 totaled $ 46.4 million and included quarterly dividends of $ 45.6 million and $ 0.8 million in cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock. During the same period in 2023, dividends paid or payable totaled $ 43.6 million and included quarterly dividends of $ 42.5 million and $ 1.1 million in cash bonuses and distributions related to dividends previously declared upon vesting of restricted stock. As of June 30, 2024 and December 31, 2023, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $ 1.0 million and $ 1.2 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 | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | NOTE 11. Share‑Based Compensation Amendment to the 2018 Stock Incentive Plan On May 8, 2024, the Company’s stockholders approved an amendment to the Company’s 2018 Stock Incentive Plan (the “2018 Plan”) which increased the number of shares of Common Stock, par value $ 0.01 per share, authorized for issuance under the 2018 Plan by 2,800,000 shares to 6,172,484 shares. As of December 31, 2023, 799,111 shares remained available for grant of the 3,372,484 shares originally authorized for issuance under the 2018 Plan. Current Period Activity During the three months ended June 30, 2024, the Company issued restricted stock awards for 7,661 shares of Common Stock, of which awards for 5,747 shares were fully vested on the grant date, awards for 1,394 shares vest over two years , and awards for 520 shares cliff vest after two years . For the six months ended June 30, 2024, the Company issued restricted stock awards for 473,633 shares of Common Stock, of which awards for 14,096 shares were fully vested on the grant date, awards for 73,794 shares vest over two years , awards for 1,534 shares cliff vest after two years , awards for 92,875 shares vest over three years , and awards for 291,334 shares vest over four years . Stock option award and restricted stock award activity during the six months ended June 30, 2024 and 2023 was as follows: Shares Subject to Stock Option Awards Six Months Ended June 30, 2024 2023 Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise fair value price Units fair value price Units Outstanding at beginning of period $ 4.68 $ 8.76 1,801,853 $ 4.31 $ 7.57 2,884,180 Exercised 4.44 8.26 ( 646,698 ) 3.89 6.48 ( 486,176 ) Outstanding at end of the period $ 4.82 $ 9.04 1,155,155 $ 4.40 $ 7.79 2,398,004 Vested $ 4.81 $ 9.01 978,957 $ 4.36 $ 7.68 2,221,806 Unvested 4.85 9.23 176,198 4.85 9.23 176,198 Restricted Stock Awards Six Months Ended June 30, 2024 2023 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 30.39 853,748 $ 25.38 1,153,515 Granted 40.11 473,633 29.88 480,562 Vested 30.72 ( 400,037 ) 22.60 ( 707,556 ) Forfeited 33.76 ( 8,041 ) 28.24 ( 3,240 ) Unvested at end of period $ 35.23 919,303 $ 29.81 923,281 Share-Based Compensation Expense The Company recorded $ 3.7 million and $ 4.2 million of share-based compensation expense in the three months ended June 30, 2024 and 2023, respectively, and $ 7.7 million and $ 8.5 million of share-based compensation expense in the six months ended June 30, 2024 and 2023, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 12. Earnings Per Share The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended (in thousands except per share amounts) 2024 2023 2024 2023 Net income $ 74,251 $ 56,671 $ 129,942 $ 105,944 Shares: Basic : Weighted average number of shares outstanding 64,734 66,466 64,561 66,874 Plus : Incremental shares from assumed conversion of dilutive instruments 1,341 2,034 1,464 2,163 Diluted : Weighted average number of shares outstanding 66,075 68,500 66,025 69,037 Earnings per share Basic: $ 1.15 $ 0.85 $ 2.01 $ 1.58 Diluted: $ 1.12 $ 0.83 $ 1.97 $ 1.53 Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive were de minimis for the three and six months ended June 30, 2024 and 2023. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2024 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 13. Accumulated Other Comprehensive Income (Loss ) The following table presents changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2024 and 2023. Cumulative Cash Flow Translation (in thousands) Hedges (1)(2) Adjustment Total Balance, December 31, 2023 $ 31,460 $ ( 132 ) $ 31,328 Other comprehensive income before reclassification and tax — ( 34 ) ( 34 ) Tax impact — 8 8 Reclassification adjustments, before tax ( 8,309 ) — ( 8,309 ) Tax impact 2,031 — 2,031 Net current period other comprehensive income (loss) ( 6,278 ) ( 26 ) ( 6,304 ) Balance, June 30, 2024 $ 25,182 $ ( 158 ) $ 25,024 Balance, December 31, 2022 $ 35,614 $ ( 172 ) $ 35,442 Other comprehensive income (loss) before reclassification and tax 7,345 19 7,364 Tax impact ( 1,783 ) ( 5 ) ( 1,788 ) Reclassification adjustments, before tax ( 8,889 ) — ( 8,889 ) Tax impact 2,158 — 2,158 Net current period other comprehensive income (loss) ( 1,169 ) 14 ( 1,155 ) Balance, June 30, 2023 $ 34,445 $ ( 158 ) $ 34,287 (1) Reclassifications out of accumulated other comprehensive income (loss) 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, which is being amortized on a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 14, Derivatives, for further information on the monetization of the gain on the Swap. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 14. DERIVATIVES Interest Rate Swaps In the fourth quarter of 2023, the Company monetized the gain on the floating-to-fixed interest rate swap transaction (“Swap”) entered into in 2020 to effectively fix the interest rate on $ 450 million of its outstanding Term Loan through the Term Loan maturity date of July 2026. The deferred gain on the termination of the Swap is being amortized on a straight-line basis through July 1, 2026 and is included in interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations. As of June 30, 2024 and December 31, 2023, the unamortized deferred gain on Swap monetization was $ 33.3 million and $ 41.6 million, respectively, before tax. The Swap was designated as a cash flow hedge. Prior to its termination, the Swap was measured at fair value with mark-to-market gains or losses deferred and included in AOCI(L), net of tax, to the extent the hedge was determined to be effective. Gains or losses were reclassified to interest expenses and other financing costs on the unaudited Condensed Consolidated Statements of Operations in the same period during which the hedged transaction affected earnings. The following tables summarize the classification of the Swap in our consolidated financial statements (in thousands): Three Months Ended Six Months Ended June 30, June 30, Statement of Operations Description 2024 2023 2024 2023 Interest income (expense) and other financing costs Reclassification from AOCI - Swap income $ — $ 4,683 $ — $ 8,889 Interest income (expense) and other financing costs Reclassification from AOCI - Amortization of Swap deferred gain 4,155 — 8,309 — Total $ 4,155 $ 4,683 $ 8,309 $ 8,889 Three Months Ended Six Months Ended June 30, June 30, Statements of Comprehensive Income Description 2024 2023 2024 2023 Other comprehensive income (loss) Income (loss) recognized in AOCI(L), net of tax $ — $ 3,919 $ — $ ( 1,169 ) Other comprehensive income (loss) Amortization of deferred gain on terminated Swap, net of tax ( 3,139 ) — ( 6,278 ) — Total $ ( 3,139 ) $ 3,919 $ ( 6,278 ) $ ( 1,169 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15. SUBSEQUENT EVENTS On July 1, 2024 , the Company executed an agency succession agreement, by and among Barclays Bank PLC as the resigning administrative agent and collateral agent under the 2019 Credit Agreement and Royal Bank of Canada, as the successor administrative agent and collateral agent. On July 9, 2024 , the Company issued a press release announcing that it has entered into definitive agreements with Amundi whereby Amundi’s U.S. business (formerly Pioneer Investments) will be combined into the Company in exchange for a 26.1 % economic stake in the Company, composed of newly issued shares of the Company’s Common Stock representing 4.9 % of the number of issued and outstanding shares of Company Common Stock, after giving effect to that issuance, and the balance in newly issued shares of Company Preferred Stock. The parties have also entered into reciprocal 15-year distribution agreements, which will be effective upon closing of the transaction. The closing of the contemplated transaction is subject to customary closing conditions and regulatory approvals. On August 8, 2024 , the Company’s Board of Directors approved a regular quarterly cash dividend of $ 0.41 per share. The dividend is payable on September 25, 2024 , to shareholders of record on September 10, 2024 . |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. Our involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the unaudited condensed 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 and the notes. Actual results may ultimately differ materially from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements 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. • Income Taxes : In December 2023 , the FASB issued ASU 2023-09, "Income Taxes: Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 revises income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as the effectiveness of certain other income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The standard should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact that ASU 2023-09 will have on the Company's consolidated financial statement disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Investment management fees Mutual funds (Victory Funds) $ 116,550 $ 109,689 $ 231,723 $ 218,105 ETFs (VictoryShares) 5,515 5,260 10,694 10,701 Separate accounts and other vehicles 49,061 42,653 96,373 85,235 Performance-based fees Mutual funds (Victory Funds III) 1,949 1,712 3,972 2,402 Separate accounts and other vehicles 88 96 186 ( 197 ) Total investment management fees 173,163 159,410 342,948 316,246 Fund administration and distribution fees Administration fees Mutual funds (Victory Funds) $ 26,775 $ 24,927 $ 53,109 $ 49,303 ETFs (VictoryShares) 772 724 1,516 1,434 Distribution fees Mutual funds (Victory Funds) 5,549 5,590 11,132 11,330 Transfer agent fees Mutual funds (Victory Funds III) 13,362 13,575 26,773 27,233 Total fund administration and distribution fees 46,458 44,816 92,530 89,300 Total revenue $ 219,621 $ 204,226 $ 435,478 $ 405,546 |
Schedule of Balances of Receivables from Contracts with Customers | The following table presents balances of receivables: (in thousands) June 30, 2024 December 31, 2023 Customer receivables Mutual funds (Victory Funds) $ 56,201 $ 55,858 ETFs (VictoryShares) 2,233 2,079 Separate accounts and other vehicles 34,567 28,189 Receivables from contracts with customers 93,001 86,126 Non-customer receivables 7,659 1,444 Total receivables $ 100,660 $ 87,570 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
WestEnd Acquisition | |
Business Acquisition [Line Items] | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | Significant inputs to the valuation of contingent consideration payable to sellers as of June 30, 2024 and December 31, 2023 are as follows and are approximate values: June 30, 2024 December 31, 2023 Net revenue 5 year average annual growth rate 17 % 22 % Market price of risk adjustment for revenue (continuous) 7 % 7 % Revenue volatility 21 % 21 % Discount rate 7 % 7 % Years remaining in earn out period 3.3 3.8 Undiscounted estimated remaining earn out payments $ millions $ 160 - $ 240 $ 243 - $ 320 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | As of June 30, 2024 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Money market fund $ 103,148 $ 103,148 $ — $ — Investments in proprietary funds 561 561 — — Deferred compensation plan investments 33,198 33,198 — — Total Financial Assets $ 136,907 $ 136,907 $ — $ — Financial Liabilities Contingent consideration arrangements ( 141,200 ) — — ( 141,200 ) Total Financial Liabilities $ ( 141,200 ) $ — $ — $ ( 141,200 ) 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 ) |
Summary of Change in Contingent Consideration Arrangement Liabilities | (in thousands) Contingent Consideration Liabilities Balance, December 31, 2023 $ 217,200 WestEnd earn-out payment ( 80,000 ) WestEnd change in fair value measurement 4,000 Balance, June 30, 2024 $ 141,200 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Summary of Related-Party Transactions | (in thousands) June 30, 2024 December 31, 2023 Related party assets Cash and cash equivalents $ 103,148 $ 109,183 Receivables (investment management fees) 47,432 46,217 Receivables (fund administration and distribution fees) 14,775 14,238 Prepaid expenses 1,281 730 Investments (investments in proprietary funds, fair value) 561 534 Investments (deferred compensation plan investments, fair value) 33,063 31,143 Total $ 200,260 $ 202,045 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 5,664 $ 5,641 Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Related party revenue Investment management fees $ 131,182 $ 121,910 $ 259,517 $ 241,893 Fund administration and distribution fees 46,458 44,816 92,530 89,300 Total $ 177,640 $ 166,726 $ 352,047 $ 331,193 Related party expense General and administrative $ 106 $ 127 $ 218 $ 249 Related party other income (expense) Interest income and other income (expense) $ 1,282 $ 1,331 $ 4,568 $ 2,795 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 $ 572 $ 70 $ ( 81 ) $ 561 As of December 31, 2023 569 55 ( 90 ) 534 |
Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized | Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended June 30, 2023 $ 32 $ 4 $ — For the six months ended June 30, 2023 32 4 — |
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 June 30, 2024 $ 30,957 $ 2,492 $ ( 251 ) $ 33,198 As of December 31, 2023 30,109 1,610 ( 445 ) 31,274 |
Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized | Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended June 30, 2024 $ 790 $ 59 $ ( 17 ) For the three months ended June 30, 2023 $ 939 $ 3 $ ( 31 ) Sale Realized (in thousands) Proceeds Gains (Losses) For the six months ended June 30, 2024 $ 1,089 $ 81 $ ( 22 ) For the six months ended June 30, 2023 $ 2,910 $ 4 $ ( 232 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023. June 30, December 31, Interest Rate Effective Interest Rate (in thousands) 2024 2023 2024 2023 2024 2023 Term Loans Due July 2026 $ 624,693 $ 630,680 7.65 % 7.77 % 8.05 % 8.17 % Due December 2028 367,496 371,028 7.65 % 7.77 % 7.98 % 8.10 % Term loan principal outstanding 992,189 1,001,708 Unamortized debt issuance costs ( 7,412 ) ( 8,753 ) Unamortized debt discount ( 3,053 ) ( 3,686 ) Long-term debt, net $ 981,724 $ 989,269 |
Schedule of Components of Interest Expense and Other Financing Costs | For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Interest expense $ 19,202 $ 18,406 $ 38,665 $ 35,683 Amortization of debt issuance costs 802 756 1,557 1,504 Amortization of debt discount 301 302 603 600 Interest rate swap (income) expense — ( 4,683 ) — ( 8,889 ) Amortization of deferred gain on terminated interest rate swap ( 4,155 ) — ( 8,309 ) — Other 129 121 249 243 Total $ 16,279 $ 14,902 $ 32,765 $ 29,141 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 Issued Shares of Treasury Stock Balance, December 31, 2023 82,404 ( 18,150 ) Issuance of shares 2 — Vesting of restricted share grants 382 — Exercise of options 378 — Shares withheld related to net settlement of equity awards — ( 345 ) Balance, March 31, 2024 83,166 ( 18,495 ) Issuance of shares 1 — Vesting of restricted share grants 18 — Exercise of options 269 — Shares withheld related to net settlement of equity awards — ( 151 ) Balance, June 30, 2024 83,454 ( 18,646 ) Shares of Common Stock Issued Shares of Treasury Stock Balance, December 31, 2022 80,528 ( 13,203 ) Issuance of shares 3 — Repurchase of shares — ( 1,032 ) Vesting of restricted share grants 680 — Exercise of options 295 — Shares withheld related to net settlement of equity awards — ( 390 ) Balance, March 31, 2023 81,506 ( 14,625 ) Issuance of shares 2 — Repurchase of shares — ( 1,380 ) Vesting of restricted share grants 27 — Exercise of options 191 — Shares withheld related to net settlement of equity awards — ( 102 ) Balance, June 30, 2023 81,726 ( 16,107 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards | Shares Subject to Stock Option Awards Six Months Ended June 30, 2024 2023 Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise fair value price Units fair value price Units Outstanding at beginning of period $ 4.68 $ 8.76 1,801,853 $ 4.31 $ 7.57 2,884,180 Exercised 4.44 8.26 ( 646,698 ) 3.89 6.48 ( 486,176 ) Outstanding at end of the period $ 4.82 $ 9.04 1,155,155 $ 4.40 $ 7.79 2,398,004 Vested $ 4.81 $ 9.01 978,957 $ 4.36 $ 7.68 2,221,806 Unvested 4.85 9.23 176,198 4.85 9.23 176,198 Restricted Stock Awards Six Months Ended June 30, 2024 2023 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 30.39 853,748 $ 25.38 1,153,515 Granted 40.11 473,633 29.88 480,562 Vested 30.72 ( 400,037 ) 22.60 ( 707,556 ) Forfeited 33.76 ( 8,041 ) 28.24 ( 3,240 ) Unvested at end of period $ 35.23 919,303 $ 29.81 923,281 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended (in thousands except per share amounts) 2024 2023 2024 2023 Net income $ 74,251 $ 56,671 $ 129,942 $ 105,944 Shares: Basic : Weighted average number of shares outstanding 64,734 66,466 64,561 66,874 Plus : Incremental shares from assumed conversion of dilutive instruments 1,341 2,034 1,464 2,163 Diluted : Weighted average number of shares outstanding 66,075 68,500 66,025 69,037 Earnings per share Basic: $ 1.15 $ 0.85 $ 2.01 $ 1.58 Diluted: $ 1.12 $ 0.83 $ 1.97 $ 1.53 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023. Cumulative Cash Flow Translation (in thousands) Hedges (1)(2) Adjustment Total Balance, December 31, 2023 $ 31,460 $ ( 132 ) $ 31,328 Other comprehensive income before reclassification and tax — ( 34 ) ( 34 ) Tax impact — 8 8 Reclassification adjustments, before tax ( 8,309 ) — ( 8,309 ) Tax impact 2,031 — 2,031 Net current period other comprehensive income (loss) ( 6,278 ) ( 26 ) ( 6,304 ) Balance, June 30, 2024 $ 25,182 $ ( 158 ) $ 25,024 Balance, December 31, 2022 $ 35,614 $ ( 172 ) $ 35,442 Other comprehensive income (loss) before reclassification and tax 7,345 19 7,364 Tax impact ( 1,783 ) ( 5 ) ( 1,788 ) Reclassification adjustments, before tax ( 8,889 ) — ( 8,889 ) Tax impact 2,158 — 2,158 Net current period other comprehensive income (loss) ( 1,169 ) 14 ( 1,155 ) Balance, June 30, 2023 $ 34,445 $ ( 158 ) $ 34,287 (1) Reclassifications out of accumulated other comprehensive income (loss) 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, which is being amortized on a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 14, Derivatives, for further information on the monetization of the gain on the Swap. |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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): Three Months Ended Six Months Ended June 30, June 30, Statement of Operations Description 2024 2023 2024 2023 Interest income (expense) and other financing costs Reclassification from AOCI - Swap income $ — $ 4,683 $ — $ 8,889 Interest income (expense) and other financing costs Reclassification from AOCI - Amortization of Swap deferred gain 4,155 — 8,309 — Total $ 4,155 $ 4,683 $ 8,309 $ 8,889 Three Months Ended Six Months Ended June 30, June 30, Statements of Comprehensive Income Description 2024 2023 2024 2023 Other comprehensive income (loss) Income (loss) recognized in AOCI(L), net of tax $ — $ 3,919 $ — $ ( 1,169 ) Other comprehensive income (loss) Amortization of deferred gain on terminated Swap, net of tax ( 3,139 ) — ( 6,278 ) — Total $ ( 3,139 ) $ 3,919 $ ( 6,278 ) $ ( 1,169 ) |
Organization and Nature of Bu_2
Organization and Nature of Business - Additional Information (Details) - USD ($) $ in Billions | 12 Months Ended | |
Nov. 01, 2021 | Dec. 31, 2021 | |
New Energy Capital Partners | ||
Subsidiary Sale Of Stock [Line Items] | ||
Percentage of equity interests | 100% | |
Asset under management acquired | $ 0.8 | |
WestEnd Acquisition | ||
Subsidiary Sale Of Stock [Line Items] | ||
Percentage of equity interests | 100% | |
Asset under management acquired | $ 19.3 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) | Jun. 30, 2024 |
Accounting Standards Update 2023-07 | |
Significant Accounting Policies [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Nov. 30, 2023 |
Accounting Standards Update 2023-09 | |
Significant Accounting Policies [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Dec. 31, 2023 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 219,621 | $ 204,226 | $ 435,478 | $ 405,546 |
Investment Management Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 173,163 | 159,410 | 342,948 | 316,246 |
Investment Management Fees | Mutual Funds | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 116,550 | 109,689 | 231,723 | 218,105 |
Investment Management Fees | ETF's | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 5,515 | 5,260 | 10,694 | 10,701 |
Investment Management Fees | Separate Accounts and Other Vehicles | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 49,061 | 42,653 | 96,373 | 85,235 |
Performance-based Investment Fees | Mutual Funds | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 1,949 | 1,712 | 3,972 | 2,402 |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 88 | 96 | 186 | (197) |
Administration Fees | Mutual Funds | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 26,775 | 24,927 | 53,109 | 49,303 |
Administration Fees | ETF's | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 772 | 724 | 1,516 | 1,434 |
Fund Distribution Fees | Mutual Funds | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 5,549 | 5,590 | 11,132 | 11,330 |
Transfer Agent Fees | Mutual Funds | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 13,362 | 13,575 | 26,773 | 27,233 |
Fund Administration and Distribution Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 46,458 | $ 44,816 | $ 92,530 | $ 89,300 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Disaggregation Of Revenue [Line Items] | ||
Receivables from contracts with customers | $ 93,001 | $ 86,126 |
Non-customer receivables | 7,659 | 1,444 |
Total receivables | 100,660 | 87,570 |
Mutual Funds | ||
Disaggregation Of Revenue [Line Items] | ||
Receivables from contracts with customers | 56,201 | 55,858 |
ETF's | ||
Disaggregation Of Revenue [Line Items] | ||
Receivables from contracts with customers | 2,233 | 2,079 |
Separate Accounts and Other Vehicles | ||
Disaggregation Of Revenue [Line Items] | ||
Receivables from contracts with customers | $ 34,567 | $ 28,189 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2024 | |
Class C | |
Disaggregation Of Revenue [Line Items] | |
Upfront sales commission percentage | 1% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 16, 2024 | Nov. 01, 2021 | Dec. 31, 2021 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | |||||||||
Contingent consideration liability | $ 141,200 | $ 141,200 | $ 217,200 | ||||||
Increase (decrease) in contingent consideration liability related to change in value of consideration payable | 4,000 | $ 8,900 | |||||||
Acquisition-related costs | 3,049 | $ 16 | 4,075 | 18 | 0 | ||||
Amundi US | |||||||||
Business Acquisition [Line Items] | |||||||||
Dividends, date of declaration | Apr. 16, 2024 | ||||||||
Percentage of economic stake | 26.10% | ||||||||
USAA AMCO | |||||||||
Business Acquisition [Line Items] | |||||||||
Increase (decrease) in contingent consideration liability related to change in value of consideration payable | 1,700 | 6,000 | |||||||
NEC Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration liability | 15,200 | 15,200 | 13,700 | ||||||
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 | 500 | 1,400 | 1,500 | 3,000 | |||||
WestEnd Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Period of time over which contingent payments will be made | 4 years | ||||||||
Contingent consideration liability | 141,200 | 141,200 | $ 217,200 | ||||||
Increase (decrease) in contingent consideration liability related to change in value of consideration payable | $ (8,200) | $ (200) | $ 4,000 | $ 2,900 | |||||
Payments to acquire business | $ 80,000 | ||||||||
Period of time over which contingent "catch-up" provisions payments will be made | 5 years 6 months | ||||||||
Maximum aggregate earn-out payments | $ 320,000 | ||||||||
Maximum annual earn-out payments | $ 80,000 |
Acquisitions - Summary of Signi
Acquisitions - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Details) - WestEnd Acquisition - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Net revenue average annual growth rate | 17% | 22% |
Market price of risk adjustment for revenue (continuous) | 7% | 7% |
Revenue volatility | 21% | 21% |
Discount rate | 7% | 7% |
Years remaining in earn out period | 3 years 3 months 18 days | 3 years 9 months 18 days |
Minimum | ||
Business Acquisition [Line Items] | ||
Undiscounted estimated remaining earn out payments in millions | $ 160 | $ 243 |
Maximum | ||
Business Acquisition [Line Items] | ||
Undiscounted estimated remaining earn out payments in millions | $ 240 | $ 320 |
Acquisitions - Summary of Sig_2
Acquisitions - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2024 | |
WestEnd Acquisition | |
Business Acquisition [Line Items] | |
Number of year of annual growth rate | 5 years |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Financial Liabilities | ||
Contingent consideration arrangements | $ (141,200) | $ (217,200) |
Fair Value on Recurring Basis | ||
Financial Assets | ||
Money market fund | 103,148 | 109,183 |
Investments in proprietary funds | 561 | 534 |
Deferred compensation plan investments | 33,198 | 31,274 |
Total Financial Assets | 136,907 | 140,991 |
Financial Liabilities | ||
Contingent consideration arrangements | (141,200) | (217,200) |
Total Financial Liabilities | (141,200) | (217,200) |
Fair Value on Recurring Basis | Level 1 | ||
Financial Assets | ||
Money market fund | 103,148 | 109,183 |
Investments in proprietary funds | 561 | 534 |
Deferred compensation plan investments | 33,198 | 31,274 |
Total Financial Assets | 136,907 | 140,991 |
Fair Value on Recurring Basis | Level 2 | ||
Financial Assets | ||
Total Financial Assets | 0 | 0 |
Fair Value on Recurring Basis | Level 3 | ||
Financial Liabilities | ||
Contingent consideration arrangements | (141,200) | (217,200) |
Total Financial Liabilities | $ (141,200) | $ (217,200) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Fair Value Disclosures [Abstract] | |
Transfers between levels | $ 0 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Change in Contingent Consideration Arrangement Liabilities (Details) - Contingent Consideration Liability $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Beginning balance | $ 217,200 |
Ending balance | 141,200 |
WestEnd | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Earn-out payment | (80,000) |
Change in fair value measurement | $ 4,000 |
Related-Party Transactions - Su
Related-Party Transactions - Summary of Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related party assets | |||||
Cash and cash equivalents | $ 118,970 | $ 118,970 | $ 123,547 | ||
Related party revenue | |||||
Total revenue | 219,621 | $ 204,226 | 435,478 | $ 405,546 | |
Investment Management Fees | |||||
Related party revenue | |||||
Total revenue | 173,163 | 159,410 | 342,948 | 316,246 | |
Fund Administration and Distribution Fees | |||||
Related party revenue | |||||
Total revenue | 46,458 | 44,816 | 92,530 | 89,300 | |
VCH | |||||
Related party assets | |||||
Cash and cash equivalents | 103,148 | 103,148 | 109,183 | ||
Receivables (investment management fees) | 47,432 | 47,432 | 46,217 | ||
Receivables (fund administration and distribution fees) | 14,775 | 14,775 | 14,238 | ||
Prepaid expenses | 1,281 | 1,281 | 730 | ||
Investments (investments in proprietary funds, fair value) | 561 | 561 | 534 | ||
Investments (deferred compensation plan investments, fair value) | 33,063 | 33,063 | 31,143 | ||
Total | 200,260 | 200,260 | 202,045 | ||
Related party liabilities | |||||
Accounts payable and accrued expenses (fund reimbursements) | 5,664 | 5,664 | $ 5,641 | ||
Related party revenue | |||||
Total revenue | 177,640 | 166,726 | 352,047 | 331,193 | |
Related party expense | |||||
General and administrative | 106 | 127 | 218 | 249 | |
Related party other income (expense) | |||||
Interest income and other income (expense) | 1,282 | 1,331 | 4,568 | 2,795 | |
VCH | Investment Management Fees | |||||
Related party revenue | |||||
Total revenue | 131,182 | 121,910 | 259,517 | 241,893 | |
VCH | Fund Administration and Distribution Fees | |||||
Related party revenue | |||||
Total revenue | $ 46,458 | $ 44,816 | $ 92,530 | $ 89,300 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments in Proprietary Funds (Details) - Proprietary Funds - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 572 | $ 569 |
Gross Unrealized Gains | 70 | 55 |
Gross Unrealized (Losses) | (81) | (90) |
Investments in proprietary funds, at fair value | $ 561 | $ 534 |
Investments - Summary of Procee
Investments - Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 1,089 | $ 2,942 | |
Proprietary Funds | |||
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 32 | 32 | |
Realized Gains | 4 | 4 | |
Realized (Losses) | $ 0 | $ 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 | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 30,957 | $ 30,109 |
Gross Unrealized Gains | 2,492 | 1,610 |
Gross Unrealized (Losses) | (251) | (445) |
Trading securities, at fair value | $ 33,198 | $ 31,274 |
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 | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Proceeds and realized gains and losses recognized | ||||
Sale Proceeds | $ 790 | $ 939 | $ 1,089 | $ 2,910 |
Realized Gains | 59 | 3 | 81 | 4 |
Realized (Losses) | $ (17) | $ (31) | $ (22) | $ (232) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 21,524 | $ 17,924 | $ 37,721 | $ 30,521 |
Federal income tax at U.S. statutory rate | 22.50% | 24% | 22.50% | 22.40% |
Valuation allowance, deferred tax assets | $ 0 | $ 0 | $ 0 | $ 0 |
Global minimum tax | 15% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jul. 01, 2019 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 07, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||||||
Incurred costs | $ 7,412 | $ 7,412 | $ 8,753 | ||||
Loss on debt extinguishment | 100 | $ 0 | 100 | $ 0 | |||
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 | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 100,000,000 | ||||||
Rate of interest | 0.50% | ||||||
Incurred costs | $ 1,000 | ||||||
Term Loans | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 992,189 | 992,189 | $ 1,001,708 | ||||
Repayments of debt | 9,500 | $ 0 | 9,500 | $ 0 | |||
Loss on debt extinguishment | $ 100 | $ 100 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (7,412) | $ (8,753) |
Unamortized debt discount | (3,053) | (3,686) |
Long-term debt, net | 981,724 | 989,269 |
Term Loans | ||
Debt Instrument [Line Items] | ||
Principal outstanding | 992,189 | 1,001,708 |
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 July 2026, 7.65% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 624,693 | |
Effective interest rate (as a percent) | 8.05% | |
Fixed interest rate (as a percent) | 7.65% | |
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% | |
Due December 2028, 7.65% interest rate | ||
Debt Instrument [Line Items] | ||
Principal outstanding | $ 367,496 | |
Effective interest rate (as a percent) | 7.98% | |
Fixed interest rate (as a percent) | 7.65% |
Debt - Schedule of Components_2
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Debt Disclosure [Abstract] | ||||
Interest expense | $ 19,202 | $ 18,406 | $ 38,665 | $ 35,683 |
Amortization of debt issuance costs | 802 | 756 | 1,557 | 1,504 |
Amortization of debt discount | 301 | 302 | 603 | 600 |
Interest rate swap (income) expense | (4,683) | (8,889) | ||
Amortization of deferred gain on terminated interest rate swap | (4,155) | (8,309) | ||
Other | 129 | 121 | 249 | 243 |
Total | $ 16,279 | $ 14,902 | $ 32,765 | $ 29,141 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Common Stock | ||||||
Balance at beginning of period (in shares) | 83,166 | 82,404 | 81,506 | 80,528 | 82,404 | 80,528 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares | 1 | 2 | 2 | 3 | ||
Vesting of restricted share grants | 18 | 382 | 27 | 680 | ||
Exercise of options | 269 | 378 | 191 | 295 | ||
Balance at end of period (in shares) | 83,454 | 83,166 | 81,726 | 81,506 | 83,454 | 81,726 |
Treasury Stock | ||||||
Balance at beginning of period (in shares) | (18,495) | (18,150) | (14,625) | (13,203) | (18,150) | (13,203) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of shares | (1,380) | (1,032) | ||||
Shares withheld related to net settlement of equity awards | (151) | (345) | (102) | (390) | ||
Balance at end of period (in shares) | (18,646) | (18,495) | (16,107) | (14,625) | (18,646) | (16,107) |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Number of shares acquired | 0 | 1,400,000 | 0 | 2,400,000 | |
Average cost of acquired shares (in dollars per share) | $ 32.25 | $ 32.09 | |||
Employee tax obligations amount | $ 15,081 | $ 11,775 | |||
Employee stock option exercise prices | $ 2,100 | $ 1,400 | 5,100 | 3,000 | |
Cost of acquired shares | 44,500 | 77,400 | |||
Excise taxes payable on shares repurchased | $ 200 | 600 | |||
Total dividends | 46,400 | 43,600 | |||
Dividends paid | 45,600 | 42,500 | |||
Special dividends paid | $ 800 | $ 1,100 | |||
Common Stock [Member] | |||||
Shares net settled | 200,000 | 100,000 | 500,000 | 500,000 | |
Net issued value | $ 7,400 | $ 3,200 | $ 20,700 | $ 14,800 | |
Employee tax obligations amount | 5,300 | $ 1,800 | $ 15,600 | $ 11,800 | |
2024 Share Repurchase Program | |||||
Authorized amount for share repurchase program | $ 100,000 | ||||
Number of shares acquired | 11,300,000 | ||||
Average cost of acquired shares (in dollars per share) | $ 26.26 | ||||
Remaining authorized amount for share repurchase program | $ 95,200 | $ 95,200 | |||
Cost of acquired shares | 295,800 | ||||
Unvested And Outstanding Restricted Share Awards And Stock Options | |||||
Special dividends paid | $ 1,000 | $ 1,200 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
May 08, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 3.7 | $ 4.2 | $ 7.7 | $ 8.5 | ||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||
2018 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of additional common stock authorized for issuance | 2,800,000 | |||||
Common stock, par value | $ 0.01 | |||||
Common stock remained available for issuance | 799,111 | |||||
Common stock available for issuance | 6,172,484 | 3,372,484 | ||||
Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total number of restricted shares granted | 7,661 | 473,633 | 480,562 | |||
Vested (in shares) | 400,037 | 707,556 | ||||
Restricted Shares | Grant | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested (in shares) | 5,747 | 14,096 | ||||
Restricted Shares | Vest Over Two Years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total number of restricted shares granted | 1,394 | 73,794 | ||||
Vesting period from grant date | 2 years | 2 years | ||||
Restricted Shares | Vest over Three Years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total number of restricted shares granted | 92,875 | |||||
Vesting period from grant date | 3 years | |||||
Restricted Shares | Vest Over Four Years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total number of restricted shares granted | 291,334 | |||||
Vesting period from grant date | 4 years | |||||
Restricted Shares | Vest After 2 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total number of restricted shares granted | 520 | 1,534 | ||||
Vesting period from grant date | 2 years | 2 years |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 $ / shares shares | Jun. 30, 2024 $ / shares shares | Jun. 30, 2023 $ / shares shares | |
Employee Stock Option | |||
Avg wtd grant-date fair value | |||
Outstanding at beginning of period | $ 4.68 | $ 4.31 | |
Exercised | 4.44 | 3.89 | |
Outstanding at end of the period | $ 4.82 | 4.82 | 4.40 |
Vested | 4.81 | 4.36 | |
Unvested | 4.85 | 4.85 | |
Avg wtd exercise price | |||
Outstanding at beginning of period | 8.76 | 7.57 | |
Exercised | 8.26 | 6.48 | |
Outstanding at end of the period | 9.04 | 9.04 | 7.79 |
Vested | $ 9.01 | 9.01 | 7.68 |
Unvested | $ 9.23 | $ 9.23 | |
Units | |||
Outstanding at beginning of period | shares | 1,801,853 | 2,884,180 | |
Exercised | shares | (646,698) | (486,176) | |
Outstanding at end of the period | shares | 1,155,155 | 1,155,155 | 2,398,004 |
Vested | shares | 978,957 | 2,221,806 | |
Unvested | shares | 176,198 | 176,198 | 176,198 |
Restricted Shares | |||
Avg wtd grant-date fair value | |||
Unvested at beginning of period | $ 30.39 | $ 25.38 | |
Granted | 40.11 | 29.88 | |
Vested | 30.72 | 22.60 | |
Forfeited | 33.76 | 28.24 | |
Unvested at end of period | $ 35.23 | $ 35.23 | $ 29.81 |
Units | |||
Unvested at beginning of period | shares | 853,748 | 1,153,515 | |
Granted | shares | 7,661 | 473,633 | 480,562 |
Vested | shares | (400,037) | (707,556) | |
Forfeited | shares | (8,041) | (3,240) | |
Unvested at end of period | shares | 919,303 | 919,303 | 923,281 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income | $ 74,251 | $ 56,671 | $ 129,942 | $ 105,944 |
Shares: | ||||
Basic: Weighted average number of shares outstanding | 64,734 | 66,466 | 64,561 | 66,874 |
Plus: Incremental shares from assumed conversion of dilutive instruments | 1,341 | 2,034 | 1,464 | 2,163 |
Diluted: Weighted average number of shares outstanding | 66,075 | 68,500 | 66,025 | 69,037 |
Earnings per share | ||||
Basic: | $ 1.15 | $ 0.85 | $ 2.01 | $ 1.58 |
Diluted: | $ 1.12 | $ 0.83 | $ 1.97 | $ 1.53 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance at beginning of period | $ 1,077,133 | $ 1,053,001 | $ 1,048,554 | $ 1,065,410 | $ 1,053,001 | $ 1,065,410 | |
Total other comprehensive income (loss), net of tax | (3,140) | (3,164) | 3,913 | (5,068) | (6,304) | (1,155) | |
Balance at end of period | 1,122,812 | 1,077,133 | 1,046,101 | 1,048,554 | 1,122,812 | 1,046,101 | |
Cash Flow Hedges | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance at beginning of period | [1],[2] | 31,460 | 35,614 | 31,460 | 35,614 | ||
Other comprehensive income (loss) before reclassification and tax | [1],[2] | 0 | 7,345 | ||||
Tax impact | [1],[2] | (1,783) | |||||
Reclassification adjustments, before tax | [1],[2] | (8,309) | (8,889) | ||||
Tax impact | [1],[2] | 2,031 | 2,158 | ||||
Total other comprehensive income (loss), net of tax | [1],[2] | (6,278) | (1,169) | ||||
Balance at end of period | [1],[2] | 25,182 | 34,445 | 25,182 | 34,445 | ||
Cumulative Translation Adjustment | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance at beginning of period | (132) | (172) | (132) | (172) | |||
Other comprehensive income (loss) before reclassification and tax | (34) | 19 | |||||
Tax impact | 8 | (5) | |||||
Total other comprehensive income (loss), net of tax | (26) | 14 | |||||
Balance at end of period | (158) | (158) | (158) | (158) | |||
Accumulated Other Comprehensive Income (Loss) | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance at beginning of period | 28,164 | 31,328 | 30,374 | 35,442 | 31,328 | 35,442 | |
Other comprehensive income (loss) before reclassification and tax | (34) | 7,364 | |||||
Tax impact | 8 | (1,788) | |||||
Reclassification adjustments, before tax | (8,309) | (8,889) | |||||
Tax impact | 2,031 | 2,158 | |||||
Total other comprehensive income (loss), net of tax | (3,140) | (3,164) | 3,913 | (5,068) | (6,304) | (1,155) | |
Balance at end of period | $ 25,024 | $ 28,164 | $ 34,287 | $ 30,374 | $ 25,024 | $ 34,287 | |
[1] Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs. On October 30, 2023, the Company terminated the Swap. The termination resulted in a $44.4 million deferred gain recorded in AOCI, before tax, which is being amortized on a straight-line basis over the remaining term of the hedged debt (through July 1, 2026). Please refer to Note 14, Derivatives, for further information on the monetization of the gain on the Swap. |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Jun. 30, 2024 | |
Derivative [Line Items] | ||
Long term debt outstanding | $ 450 | |
Swap Transaction Agreement | ||
Derivative [Line Items] | ||
Unamortized deferred gain on Swap | $ 41.6 | $ 33.3 |
Derivatives - Summary of Effect
Derivatives - Summary of Effects of Swap in Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative [Line Items] | ||||
Income (loss) recognized in AOCI(L), net of tax | $ 0 | $ 3,919 | $ 0 | $ (1,169) |
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Income (loss) reclassified from AOCI(L) | 4,155 | 4,683 | 8,309 | 8,889 |
Interest Rate Swap | Other Comprehensive Income | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Income (loss) recognized in AOCI(L), net of tax | (3,139) | 3,919 | (6,278) | (1,169) |
Interest Rate Swap | Reclassified from AOCI(L) | Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Income (loss) recognized in AOCI(L), net of tax | (3,139) | 0 | (6,278) | 0 |
Interest Rate Swap | Reclassified from AOCI(L) | Other Comprehensive Income | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Income (loss) recognized in AOCI(L), net of tax | 0 | 3,919 | 0 | (1,169) |
Interest Rate Swap | Interest Expense and Other Financing Costs | ||||
Derivative [Line Items] | ||||
Income (loss) reclassified from AOCI(L) | 0 | 4,683 | 0 | 8,889 |
Interest Rate Swap | Interest Expense and Other Financing Costs | Reclassified from AOCI(L) | ||||
Derivative [Line Items] | ||||
Income (loss) reclassified from AOCI(L) | $ 4,155 | $ 0 | $ 8,309 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||||||
Aug. 08, 2024 | Jul. 09, 2024 | Jul. 01, 2024 | Apr. 16, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Subsequent Event [Line Items] | ||||||||
Dividends declared per share of common stock | $ 0.37 | $ 0.32 | $ 0.705 | $ 0.64 | ||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends declared per share of common stock | $ 0.41 | |||||||
Dividends, date of declaration | Aug. 08, 2024 | Jul. 01, 2024 | ||||||
Dividends payable date | Sep. 25, 2024 | |||||||
Dividends payable, date of record | Sep. 10, 2024 | |||||||
Amundi US | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends, date of declaration | Apr. 16, 2024 | |||||||
Percentage of economic stake | 26.10% | |||||||
Amundi US | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends, date of declaration | Jul. 09, 2024 | |||||||
Percentage of economic stake | 26.10% | |||||||
Percentage of number of issued and outstanding shares of common Stock | 4.90% | |||||||
Distribution period | 15 years |