Victory Capital (VCTR) 10-Q 14 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 27, 2018
Entity Registrant Name	Victory Capital Holdings, Inc.
Entity Central Index Key	1,570,827
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Class A
Entity Common Stock, Shares Outstanding		12,952,380
Class B
Entity Common Stock, Shares Outstanding		54,998,720

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 12,296	$ 12,921
Receivables	54,763	55,917
Prepaid expenses	4,102	5,441
Investments	12,243	11,336
Property and equipment, net	8,776	8,844
Goodwill	284,108	284,108
Other intangible assets, net	402,325	408,000
Other assets	6,532	6,055
Total assets	785,145	792,622
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses	25,396	21,996
Accrued compensation and benefits	21,031	29,305
Consideration payable for acquisition of business	9,997	9,856
Deferred tax liability, net	5,582	4,068
Other liabilities	13,878	12,989
Long-term debt	310,435	483,225
Total liabilities	386,319	561,439
Stockholders' equity:
Common stock		572
Additional paid-in capital	591,038	435,334
Treasury stock, at cost: 2018 and 2017-2,064,057 shares	(20,899)	(20,899)
Accumulated other comprehensive income	98	64
Retained deficit	(172,111)	(183,888)
Total stockholders' equity	398,826	231,183
Total liabilities and stockholders' equity	785,145	$ 792,622
Class A
Stockholders' equity:
Common stock	129
Class B
Stockholders' equity:
Common stock	$ 571

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Common stock, par value		$ 0.01
Common stock, shares authorized	0	78,837,300
Common stock, shares issued	0	57,182,730
Common stock, shares outstanding	0	55,118,673
Treasury stock, shares	2,064,057	2,064,057
Class A
Common stock, par value	$ 0.01
Common stock, shares authorized	400,000,000	0
Common stock, shares issued	12,899,315	0
Common stock, shares outstanding	12,899,315	0
Class B
Common stock, par value	$ 0.01
Common stock, shares authorized	200,000,000	0
Common stock, shares issued	57,115,842	0
Common stock, shares outstanding	55,051,785	0

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue
Investment management fees	$ 89,130	$ 84,115
Fund administration and distribution fees	15,834	16,546
Total revenue	104,964	100,661
Expenses
Personnel compensation and benefits	36,803	35,650
Distribution and other asset-based expenses	25,161	26,881
General and administrative	9,056	8,921
Depreciation and amortization	6,412	8,154
Acquisition-related costs		363
Restructuring and integration costs	264	1,130
Total operating expenses	77,696	81,099
Income from operations	27,268	19,562
Other income (expense)
Interest income and other income/(expense)	(37)	345
Interest expense and other financing costs	(7,092)	(12,628)
Loss on debt extinguishment	(6,058)
Total other income (expense), net	(13,187)	(12,283)
Income before income taxes	14,081	7,279
Income tax expense	(3,557)	(2,866)
Net income	$ 10,524	$ 4,413
Earnings per share-basic	$ 0.17	$ 0.08
Earnings per share-diluted	$ 0.16	$ 0.08
Weighted average shares outstanding-basic	61,599,057	54,813,823
Weighted average shares outstanding-diluted	66,283,621	58,746,227
Dividends declared per share		$ 2.19

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Condensed Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 10,524	$ 4,413
Other comprehensive income, net of tax
Net unrealized income on available-for-sale securities	5	30
Net unrealized income on cash flow hedges		92
Net unrealized gain on foreign currency translation	29	33
Total other comprehensive income, net of tax	34	155
Comprehensive income	$ 10,558	$ 4,568

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common StockClass A	Common StockClass B	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Deficit	Class A	Class B	Total
Balance at beginning of period at Dec. 31, 2016			$ 565	$ (16,245)	$ 421,747	$ (537)	$ (74,532)			$ 330,998
Balance at beginning of period (in shares) at Dec. 31, 2016			56,505,321	(1,719,529)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock			$ 1		781					782
Issuance of common stock (in shares)			57,814
Vesting of restricted and director share grants (in shares)			18,395
Other comprehensive loss						155				155
Stock-based compensation					2,393					2,393
Dividend							(119,866)			(119,866)
Other							(10)			(10)
Net income							4,413			4,413
Balance at end of period at Mar. 31, 2017			$ 566	$ (16,245)	424,921	(382)	(189,995)			218,865
Balance at end of period (in shares) at Mar. 31, 2017			56,581,530	(1,719,529)
Balance at beginning of period at Dec. 31, 2017			$ 572	$ (20,899)	435,334	64	(183,888)			$ 231,183
Balance at beginning of period (in shares) at Dec. 31, 2017			57,182,730	(2,064,057)				0	0	55,118,673
Increase (Decrease) in Stockholders' Equity
Issuance of common stock	$ 128				156,421					$ 156,549
Issuance of common stock (in shares)	12,810,860
Class A common stock offering costs					(4,561)					(4,561)
Redesignation of common stock		$ 572	$ (572)
Redesignation of common stock, (in shares)		57,184,766	(57,184,766)
Share conversion - Class B to A	$ 1	$ (1)
Share conversion - Class B to A (in shares)	88,455	(88,455)
Vesting of restricted share grants (in shares)		14,794	2,036
Exercise of options					12					12
Exercise of options (in shares)		5,000
Fractional shares retired					(2)					(2)
Fractional shares retired (in shares)		(263)
Other comprehensive loss						34				34
Stock-based compensation					3,322					3,322
Dividend							(53)			(53)
Net income							10,524			10,524
Balance at end of period at Mar. 31, 2018	$ 129	$ 571		$ (20,899)	591,038	$ 98	(172,111)			$ 398,826
Balance at end of period (in shares) at Mar. 31, 2018	12,899,315	57,115,842		(2,064,057)				12,899,315	55,051,785	0
Increase (Decrease) in Stockholders' Equity
Cumulative effect adjustment for adoption of ASU 2016-09					$ 512		$ 1,306			$ 1,818

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net income	$ 10,524	$ 4,413
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for deferred income taxes	3,361	2,736
Depreciation and amortization	6,412	8,154
Deferred financing costs and derivative and accretion expense	995	1,640
Stock-based and deferred compensation	4,253	3,605
Unrealized depreciation (appreciation) on investments	124	(179)
Loss on equity method investment	137
Loss on debt extinguishment	6,058
Changes in operating assets and liabilities:
Receivables	1,104	8,555
Prepaid expenses	(1,545)	(1,897)
Other assets	425	(25)
Accounts payable and accrued expenses	2,166	2,749
Accrued compensation and benefits	(8,280)	(19,806)
Other liabilities	138	(271)
Net cash provided by operating activities	25,872	9,674
Cash flows from investing activities
Purchases of property and equipment	(703)	(666)
Purchases of investments	(1,464)	(1,833)
Sales of investments	448	937
Equity method investment	(1,000)
Net cash used in investing activities	(2,719)	(1,562)
Cash flows from financing activities
Payment of Class A common stock deferred offering costs	(438)
Proceeds from long-term senior debt	359,100	125,000
Repayment of draw on line of credit		(3,500)
Payment of debt financing fees	(2,091)	(1,733)
Repayment of long-term senior debt	(536,750)	(7,938)
Repayment of promissory note	(144)	(144)
Payment of dividends	(53)	(119,866)
Payment of consideration for acquisition		(5,068)
Net cash provided by financing activities	(23,817)	(12,467)
Effect of changes of foreign exchange rate on cash and cash equivalents	39
Net decrease in cash and cash equivalents	(625)	(4,355)
Cash and cash equivalents, beginning of period	12,921	16,441
Cash and cash equivalents, end of period	12,296	12,086
Supplemental cash flow information
Cash paid for interest	6,163	10,989
Supplemental disclosure of noncash item
Class A common stock offering costs reclassed from prepaid expenses and accounts payable and accrued expenses to additional paid in capital	4,123
Class A
Cash flows from financing activities
Issuance of common stock	156,549	$ 782
Class B
Cash flows from financing activities
Issuance of common stock	$ 10

Organization and Nature of Busi

Organization and Nature of Business	3 Months Ended
	Mar. 31, 2018
Organization and Nature of Business
Organization and Nature of Business	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”) was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Advisers, Inc. (“VCA”), which occurred on August 1, 2013. VCM is a registered investment adviser managing assets through open-end mutual funds, separately managed accounts, unified management accounts, ETFs, collective trust funds, wrap separate account programs and UCITS. VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds, Victory Institutional Funds and the mutual fund series of the Victory Portfolios II (collectively, “the Victory Funds”), a family of open-end mutual funds, and the VictoryShares (the Company’s ETF brand). VCM additionally employs all of the Company’s U.S. investment professionals across its Franchises and Solutions Platform, which are not separate legal entities. VCA is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds. Initial Public Offering On February 12, 2018, the Company completed the initial public offering (“IPO”) of its Class A common stock, which trades on NASDAQ under the symbol “VCTR”. The Company issued 11,700,000 shares of Class A common stock at a price of $13.00 per share at the closing of the IPO. On March 13, 2018, the Company issued an additional 1,110,860 shares of Class A common stock pursuant to the underwriters’ exercise of their option. The net proceeds totaled $156.5 million: $143.0 million received at the closing of the IPO and $13.5 million received at the subsequent closing of the underwriters’ exercise of their option, after deducting in each case underwriting discounts. In connection with the IPO, the following transactions were completed: · The Company’s certificate of incorporation was amended and restated to, among other things, provide for Class A common stock and Class B common stock, specify voting rights for the Class A common stock and Class B common stock, establish a classified board of directors and adopt the 2018 Stock Incentive Plan and 2018 Employee Stock Purchase Plan. · All shares of common stock outstanding prior to the IPO were immediately converted into Class B common stock at a one-to-one ratio. · A substantial majority of the Company’s employee stockholders entered into an Employee Shareholders’ Agreement, pursuant to which they granted an irrevocable voting proxy with respect to the shares of the Company’s common stock they acquired from the Company, and any shares they may acquire from the Company in the future, to the Employee Shareholders Committee. The current members of the Employee Shareholders Committee are the Chief Executive Officer, the Chief Operating Officer and the President, Investment Franchises. On February 12, 2018, concurrently with the closing of the IPO, the Company entered into a credit agreement (the “Credit Agreement”) under which the Company received seven-year term loans in an original aggregate principal amount of $360.0 million and established a five-year revolving credit facility (which was unfunded as of closing) with original aggregate commitments of $50.0 million. Net proceeds received from the IPO and the Credit Agreement together with cash on hand were used to repay all indebtedness outstanding under the credit agreement dated as of October 31, 2014 (as amended) (the “2014 Credit Agreement”) on February 12, 2018. See Note 7 for more information on the Company’s current debt structure.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies	2. Basis of Presentation and Significant Accounting Policies The Company prepares its interim unaudited condensed consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. A complete listing of the Company’s significant accounting policies is included in the 2017 Annual Report on Form 10-K. All dollar amounts, except per share data in the text and tables herein, are stated in thousands unless otherwise indicated. Retroactive Adjustments for Common Stock Split The Company's Board of Directors and stockholders approved a 175.194 for 1 stock split of the Company's common stock on February 1, 2018. All common share and common per share amounts in the unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this stock split. See Notes 8, 9 and 10. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if 1) the Company holds greater than 50% voting interest in entities controlled through voting interests or if 2) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company's involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory services, fund administration, distribution and compliance services and/or holding a minority interest. At March 31, 2018 and December 31, 2017, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $11.9 million and $10.9 million respectively which are included in investments on the unaudited condensed consolidated balance sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it had an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. During the period ended March 31, 2018, the Company's involvement with other non‑consolidated VIEs included an equity method investment and put and call option arrangements with Cerebellum Capital, LLC (“Cerebellum Capital”). The Company's maximum risk of loss associated with Cerebellum Capital totaled $6.0 million at March 31, 2018 and December 31, 2017, which includes the $6.0 million investment at March 31, 2018 and as of December 31, 2017, $5.0 million investment and $1.0 million exposure under the put option for the purchase of additional equity. See Note 11. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. Use of Estimates and Assumptions The preparation of 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. Actual results may ultimately differ from those estimates and the differences may be material. Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs on the unaudited condensed consolidated statements of operations. A rollforward of restructuring and integration liabilities for the periods ended March 31, 2018 and 2017 appears below. Quarter ended March 31 , (in millions) 2018 2017 Liability balance, beginning of period $ 0.1 $ 7.4 Severance expense RS Investment Management Co. — 0.3 Other 0.3 — Contract termination expense RS Investment Management Co. — 0.7 Integration costs — 0.1 Restructuring and integration costs 0.3 1.1 Settlement of liabilities (0.2) (2.4) Liability balance, end of period $ 0.2 $ 6.1 Accrued expenses $ 0.2 $ 5.7 Other liabilities — 0.4 Liability balance, end of period $ 0.2 $ 6.1 Earnings per share The calculation of basic earnings per share is based on the weighted average number of shares of the Company's common stock, Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of all classes of the Company's common stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and included in general and administrative expense on the unaudited condensed consolidated statements of operations. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Accounting policies updated for ASU 2014-09 guidance The Company’s introducing broker-dealer VCA adopted ASU 2014-09 on January 1, 2018 and updated the following policies. (a) Prepaid C Share Commissions VCA 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 VCA makes an upfront payment to a dealer or institution for the sale of Class C shares, VCA capitalizes the cost of such payment, which is recorded in prepaid expenses on the unaudited condensed balance sheets, and amortizes the cost over a 12 month period, the estimated period of benefit. Deferred sales commission amortization expense was $0.2 million and $0.3 million for the quarters ended March 31, 2018 and 2017, respectively, and was included in distribution and other asset-based expenses on the unaudited condensed consolidated statements of operations. (b) Revenue Recognition VCA receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. There are no direct costs incurred to obtain these contracts. Direct costs incurred to fulfill services under the distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. Revenue is measured in an amount that reflects the consideration to which VCA 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. VCA’s performance obligation is satisfied 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, and is subject to factors outside of VCA’s control including investor behavior and activity and market volatility and is recognized as these uncertainties are resolved. VCA may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods, as it represents variable consideration and is recognized as uncertainties are resolved. VCA has contractual arrangements with third parties to provide certain distribution services. Management considers whether VCA is acting as the principal service provider or as an agent to determine whether its revenue should be recorded based on the gross amount payable by the Victory Funds or net of payments to third-party service providers, respectively. VCA is considered a principal service provider if it controls the service that is transferred to the customer. VCA is considered an agent when it arranges for the service to be provided by another party and does not control the service. Substantially all of VCA’s revenue is recorded gross of payments made to third parties. VCA’s distribution fee revenue, which is earned from mutual funds domiciled in the U.S., totaled $10.1 million and $11.2 million for the quarters ended March 31, 2018 and 2017, respectively, and is recorded in fund administration and distribution fees on the unaudited condensed consolidated statements of operations. Adoption of New Accounting Standards ASU 2016-09 was issued by the FASB in March 2016 to reduce the cost and complexity of reporting on employee share based payments and to address the tax reporting, forfeitures, and expected term related to equity awards. ASU 2016-09 eliminates the requirement that excess tax benefits be realized through a reduction in income taxes payable before the benefits can be recognized. The Company adopted ASU 2016-09 on January 1, 2018 using a modified retrospective transition method. A one-time credit to retained earnings of $1.3 million was recorded as the cumulative-effect adjustment for excess tax benefits not previously recognized and to adjust compensation cost on equity awards outstanding at January 1, 2018 as if the Company had previously accounted for forfeitures as they occurred. With the adoption of ASU 2016-09, the Company now recognizes the income tax effects of stock-based compensation in income tax expense, which may cause significant fluctuations in the reported amount of income tax expense in the unaudited condensed consolidated statements of operation and the effective tax rate as restricted shares vest and stock options are exercised. In addition, upon adoption of ASU 2016-09, the Company made the election to account for forfeitures of equity awards as they occur. The Company elected to adopt the amendment related to the cash flow presentation of excess tax benefits prospectively and prior periods have not been adjusted. ASU 2017-09 was issued by the FASB in May 2017 to clarify when changes in the terms or conditions of a share-based payment award qualify for accounting treatment as a modification. The Company adopted ASU 2017-09 on January 1, 2018 and will apply the new guidance prospectively to awards modified after January 1, 2018. The adoption had no significant impact on the Company’s unaudited condensed consolidated financial statements for the period ended March 31, 2018. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue from contracts with customers and to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards. This ASU will supersede existing revenue recognition guidance and require the following steps when recognizing revenue under ASU 2014‑09: 1) identify the contract with the customer 2) identify performance obligations in the contract 3) determine the transaction price 4) allocate the transaction price to the performance obligations in the contract and 5) recognize revenue when or as the entity satisfies the performance obligation. This ASU also requires additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. An entity may apply the new guidance by using one of two methods 1) retrospective application to each prior reporting period presented or 2) a modified retrospective approach, requiring the standard be applied only to the most current period presented, with the cumulative effect of initially applying the standard recognized at the date of initial application. ASU 2014‑09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for non‑emerging growth companies, and for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, for the Company. The Company's introducing broker-dealer VCA adopted ASU 2014-09 effective January 1, 2018. VCA receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. There are no direct costs incurred to obtain these contracts. Direct costs incurred to fulfill services under the distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. There was no change to how VCA records revenue from contracts with customers and accounts for costs incurred to fulfill services under distribution contracts from adoption of ASU 2014-09. The Company is currently evaluating the potential impact of other revenue and related direct costs on its financial statements. In early 2016, the FASB issued ASU 2016‑01. This update requires equity securities to be measured at fair value and changes in the fair value of equity securities to be recognized in net income. The update is effective for fiscal years beginning after December 15, 2017 for non‑emerging growth companies and for fiscal years beginning after December 31, 2018 for the Company. Management does not expect the adoption of the standard to have a significant impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02 on leases. The new guidance requires lessees to record most leases on their balance sheets. Expense will be recognized in the income statement in a manner that is similar to today's accounting. The update is effective for fiscal years beginning after December 15, 2018 for non‑emerging growth companies and for fiscal years beginning after December 15, 2019 for the Company. The Company is in the process of analyzing how the new rules will impact financial reporting. In August 2016, the FASB issued ASU 2016‑15. The update provides guidance on certain cash flow statement classifications that were previously unclear or lacked specific guidance. The classifications addressed in the update include debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. The update is effective for fiscal years beginning after December 15, 2017 for non‑emerging growth companies and for fiscal years beginning after December 15, 2018 for the Company. The Company is in the process of analyzing how the new rules will impact financial reporting. In January 2017, the FASB issued ASU 2017-04 simplifying the test for goodwill impairment. The standard eliminates Step 2 from the goodwill impairment test. Under the amended guidance, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. The new guidance is effective for the Company's fiscal year that begins after December 15, 2020 and requires a prospective approach to adoption. Early adoption is permitted for interim or annual goodwill impairment tests. Upon adoption, the new guidance will impact the Company’s consolidated financial statements and related disclosures only in the event there is goodwill impairment. On February 14, 2018, the FASB issued ASU 2018-02 permitting companies to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The guidance is effective for the Company’s fiscal year beginning January 1, 2019. Early adoption is permitted. Management does not expect the adoption to have a significant impact on the Company's consolidated financial statements. On March 13, 2018, the FASB issued ASU 2018-05 incorporating guidance from SEC Staff Accounting Bulletin (SAB) 118 into Accounting Standards Codification 740 on income taxes. SAB 118 addresses situations where companies are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. See Note 6 for more information on the Company’s accounting for the income tax effects of the Tax Act.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Fair Value Measurements	3 . 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. As of March 31, 2018, the Company had $1.2 million in contingent consideration arrangement liabilities that were measured at fair value on a recurring basis. These liabilities represent the CEMP earn-out payment liability, which is included in consideration payable for acquisition of business on the unaudited condensed consolidated balance sheets. Level 3 inputs were utilized to determine fair value, or the present value of the expected future settlement, of the contingent consideration arrangement. Changes in the fair value of the liability, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business on the unaudited condensed consolidated statements of operations. There were no changes in the fair value of the liability in the three months ended March 31, 2018 or 2017. Significant unobservable inputs used in the fair value calculation for this obligation include discount rates and growth assumptions. Four scenarios were used in formulating the growth rate assumptions with varying levels of revenue growth and were probability‑weighted. An increase to the discount rate would result in a lower fair value, while an increase to growth rate assumptions would result in a higher fair value. There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2017 to March 31, 2018. The Company recognizes transfers at the end of the reporting period. The net carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value due to the short-term nature of these assets and liabilities. The fair value of the Company’s long-term debt at March 31, 2018 is considered to be its carrying amount as the Company entered into the Credit Agreement in February 2018. See Note 7. Level 2 inputs are utilized to determine the fair value of the Company’s long-term debt.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2018
Related Party Transactions
Related Party Transactions	4 . Related‑Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the Victory Shares, the Victory Collective Funds and Victory Capital Series, LLC, to be related parties as a result of the Company’s advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCA have with the Victory Funds. The Company also receives investment management fees from the VictoryShares, Victory Collective Funds and Victory Capital Series, LLC under VCM’s advisory contracts with these funds and administrative fees under VCM’s administration contract with the Victory Shares. Under the terms of monitoring agreements with affiliates of two shareholders of the Company, the Company paid fees for monitoring services, which are included in general and administrative expense in the unaudited condensed consolidated statements of operations. These monitoring agreements terminated upon the completion of the IPO. Balances and transactions involving related parties included in the unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operations are summarized below. Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds for compliance services and expense reimbursements. Included in fund administration and distribution fees are amounts earned for compliance services. As of As of March 31, 2018 December 31, 2017 Related party assets Receivables (Investment management fees) $ 22,982 $ 23,027 Receivables (Fund administration and distribution fees) 4,653 3,925 Investments 11,857 10,925 Total $ 39,492 $ 37,877 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 2,672 $ 1,155 Other liabilities (promissory note) 527 671 Total $ 3,199 $ 1,826 Quarter Ended March 31, 2018 2017 Related party revenue Investment management fees $ 65,866 $ 61,310 Fund administration and distribution fees 15,834 16,546 Total $ 81,700 $ 77,856 Related party expense Distribution and other asset-based expenses (fund reimbursements) $ 2,933 $ 4,013 General and administrative 141 288 Interest expense and other financing costs (promissory note) 6 9 Total $ 3,080 $ 4,310

Investments

Investments	3 Months Ended
	Mar. 31, 2018
Investments.
Investments	5. Investments As of March 31, 2018 and December 31, 2017, the Company held both available-for-sale securities and trading securities. Available-for-sale investments consist entirely of seed capital investments in certain Victory Funds. Trading securities are held under a deferred compensation plan and include Victory Funds and third party mutual funds. Available‑For‑Sale Securities A summary of the cost and fair value of investments classified as available-for-sale is as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2018 $ 595 $ 97 $ — $ 692 As of December 31, 2017 $ 595 $ 82 $ — $ 677 Unrealized gains and losses on available‑for‑sale investments are recorded, net of tax, to accumulated other comprehensive loss. Upon sale, accrued unrealized gains or losses are reclassed out of accumulated comprehensive income, see Note 12, and realized gains and losses are recognized on the unaudited condensed consolidated statements of operations as interest income and other income/(expense). There were no sales of available-for-sale securities in the quarters ended March 31, 2018 and 2017. Trading Securities A summary of the cost and fair value of investments classified as trading securities is as follows: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2018 $ 11,020 $ 801 $ (270) $ 11,551 As of December 31, 2017 9,978 950 (269) 10,659 Unrealized and realized gains and losses on trading securities are recorded in interest income and other income/(expense) in the unaudited condensed consolidated statements of operations. Proceeds from sales and realized gains and losses from trading securities in the quarters ended March 31, 2018 and 2017 are as follows: Sale Realized Proceeds Gains (Losses) For the quarter ending March 31, 2018 $ 448 $ 28 $ (2) For the quarter ending March 31, 2017 937 9 (6)

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	6 . Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act significantly revised the U.S. corporate income tax law by, among other things, decreasing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. SEC Staff Accounting Bulletin No. 118 (SAB 118) addresses situations when a company has not completed the accounting for certain income tax effects of the Tax Act and provides a measurement period of up to one year after the enactment date for the accounting to be completed. The Company recorded a provisional credit to federal tax expense of $2.4 million in 2017 from remeasuring deferred tax assets and deferred tax liabilities due to the Tax Act. Any subsequent adjustment to these amounts, if any, will be recorded to provision for income taxes in 2018. No adjustment was made to the provisional credit recorded in 2017 in the period ended March 31, 2018. The effective tax rate for the quarters ended March 31, 2018 and 2017 differs from the U.S. federal statutory rate primarily as a result of certain non-deductible expenses and state and local income taxes and for 2018, tax benefits from share-based compensation activity. The provision for income taxes was $3.6 million and $2.9 million, or 25.3% and 39.4% of pre ‐ tax income for the three months ended March 31, 2018 and 2017, respectively. The effective tax rate for the quarter ended March 31, 2018 was significantly lower than the effective tax rate for the quarter ended March 31, 2017 due to the reduction in the federal corporate income tax rate effective January 1, 2018. No valuation allowance was recorded for deferred tax assets in the periods ended March 31, 2018 and 2017.

Debt

Debt	3 Months Ended
	Mar. 31, 2018
Debt
Debt	7 . Debt 2018 Debt Refinancing On February 12, 2018, concurrently with the closing of the IPO, the Company entered into the Credit Agreement under which the Company received seven‑year term loans in an original aggregate principal amount of $360.0 million and established a five‑year revolving credit facility (which was unfunded as of closing) with original aggregate commitments of $50.0 million. Net proceeds of $355.9 million from the term loans under the Credit Agreement and $143.0 million from the IPO, as well as cash on hand of $0.8 million, were used to repay all of the indebtedness outstanding under the 2014 Credit Agreement ($499.7 million of term loans) on February 12, 2018. The 2014 Credit Agreement was terminated on this date. The Credit Agreement Subject to certain terms and conditions set forth in the Credit Agreement (including obtaining commitments from one or more new or existing lenders), the Company may incur additional loans or commitments under the Credit Agreement in an aggregate principal amount of up to $154.0 million (or, if greater, 100% of Consolidated Adjusted EBITDA (as defined in the Credit Agreement) for the most recently ended period of four fiscal quarters), plus certain additional amounts set forth in the Credit Agreement (including an unlimited amount of additional loans or commitments based on achievement of a specified first lien leverage ratio). Term loans amortize at a rate of 1.00% per annum. Mandatory prepayments of term loans are required on an annual basis, starting with the year ending December 31, 2019, with a percentage of annual excess cash flow ranging from 0% to 50% depending on the Company’s first lien leverage ratio. Mandatory prepayments of term loans are also required with all or a portion of net cash proceeds of certain asset sales, casualty or condemnation events and with the proceeds of certain incurrences of indebtedness. At any time the Company may terminate commitments under the revolving credit facility in full or in part or prepay term loans in whole or in part, subject to the payment of LIBOR breakage fees, if any, and, in the case of certain prepayments of term loans occurring within the six-month period following closing, a 1.00% premium. Term loans under the Credit Agreement have an interest rate of LIBOR plus 2.75%. Obligations under the Credit Agreement are guaranteed by all of the Company’s domestic subsidiaries other than VCA (the Guarantors) and are secured by substantially all of the assets of the Company and the Guarantors, subject in each case to certain customary exceptions. The Credit Agreement contains customary affirmative and negative covenants, including but not limited to, covenants that affect the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, make distributions and dividends. The Credit Agreement also requires a certain maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments. Original issue discount was $0.9 million for the term loans under the Credit Agreement and $0.3 million for the revolving credit facility under the Credit Agreement. The Company incurred a total of $3.7 million in arranger fees and other third party costs related to the Credit Agreement: $1.8 million was recorded as debt issuance costs and $1.9 million was expensed in general and administrative expense in the unaudited condensed consolidated statements of operations as costs related to modified debt. The Company recognized a $6.1 million loss on debt extinguishment, which consisted of the write-off of $4.2 million in unamortized debt issuance costs and $1.9 million in unamortized debt discount. As of March 31, 2018, the term loans under the Credit Agreement had an interest period of three months and the interest rate was 5.05% per annum. Including the impact of amortization of debt issuance costs and original issue discount described herein, the effective yield for term loans under the Credit Agreement as of March 31, 2018 was 5.57% per annum. On February 21, 2018, the Company repaid $10.0 million of the outstanding term loans under the Credit Agreement, and on March 19, 2018, the Company used the net proceeds from the underwriters’ exercise of their option and cash on hand to repay an additional $27.0 million of the outstanding term loans under the Credit Agreement. The components of interest expense and other financing costs on the unaudited condensed consolidated statement of operations for the quarters ended March 31, 2018 and 2017 appear below. For the quarter ended, March 31, 2018 2017 Interest expense $ 6,015 $ 10,916 Amortization of debt issuance costs 603 914 Amortization of debt discount 252 400 Interest rate cap expense — 153 CEMP base payment accretion expense 140 173 Other 82 72 Total $ 7,092 $ 12,628 The components of long-term debt on the unaudited condensed consolidated balance sheets at March 31, 2018 and December 31, 2017 appear below. March 31, 2018 December 31, 2017 Principal outstanding $ 323,000 $ 499,750 Unamortized debt issuance costs (8,602) (11,442) Unamortized debt discount (3,963) (5,083) Long-term debt $ 310,435 $ 483,225

Equity

Equity	3 Months Ended
	Mar. 31, 2018
Equity
Equity	8 . Equity Until the closing of the Company’s IPO on February 12, 2018, the Company had one class of common stock with a par value of $0.01 per share. Holders of this common stock were entitled to one vote per share. With the closing of the Company’s IPO, the Company’s authorized capital stock consists of 400,000,000 shares of Class A common stock, $0.01 par value per share, 200,000,000 shares of Class B common stock, $0.01 par value per share, and 10,000,000 shares of ''blank check'' preferred stock, $0.01 par value per share. The Company incurred offering costs of $4.6 million related to the IPO and underwriter option exercise, of which $2.9 million of legal, accounting and other costs were included in prepaid expenses on the unaudited condensed consolidated balance sheets at December 31, 2017 and were subsequently reclassified to equity issuance costs upon closing of the IPO. The Company paid $0.3 million, $0.4 million and $3.9 million of these offering costs in 2017, the first quarter of 2018 and the second quarter of 2018, respectively. All shares of common stock outstanding, all shares of common stock held as treasury stock and all unvested restricted shares of common stock outstanding prior to the IPO were redesignated as shares of Class B common stock with a par value of $0.01 per share upon completion of the IPO. The first shares of Class A common stock were issued in the IPO; no shares of preferred stock were issued as of March 31, 2018. The rights of the holders of Class A common stock and Class B common stock are identical, except voting and conversion rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to ten votes. Holders of the Company’s Class A common stock and Class B common stock will generally vote together as a single class, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Each share of our Class B common stock is convertible into one share of the Company’s Class A common stock at any time, at the option of the holder, and will convert automatically upon transfers (subject to certain exceptions), a termination of employment by an employee stockholder and upon the date the number of shares of Class B common stock then outstanding (including unvested restricted shares) is less than 10% of the aggregate number of shares of Class A common stock and Class B common stock outstanding (including unvested restricted shares).

Share Based Compensation

Share Based Compensation	3 Months Ended
	Mar. 31, 2018
Share Based Compensation
Share Based Compensation	9. Share‑Based Compensation Equity Incentive Plans Until the IPO was completed, equity-based awards were issued to executives, directors and key employees of the Company under the Victory Capital Holdings, Inc. Equity Incentive Plan (“the 2013 Plan”) and the Outside Director Equity Incentive Plan (“the Director Plan”). In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the Victory Capital Holdings, Inc. 2018 Stock Incentive Plan (“the 2018 Plan”), and the Victory Capital Holdings, Inc. 2018 Employee Stock Purchase Plan (“the 2018 ESPP”), each of which became effective upon the completion of the IPO. The 2018 Plan authorizes the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other awards that may be settled in or based upon shares of the Company’s Class A common stock or Class B common stock, collectively, the Shares, though the Company currently intend to grant these awards based upon shares of Class B common stock. As the 2018 Plan took effect upon completion of the IPO, no further grants will be made under the 2013 Plan. A total of 3,372,484 shares of either Class A or Class B common stock, or any combination thereof, as determined by the Compensation Committee are reserved for and available for issuance under the 2018 Plan. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. Shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again become available for issuance under the 2018 Plan. As of March 31, 2018, no grants had been issued under the 2018 Plan and the 2018 ESPP was not yet funded. Current Year Grants and Activity On January 1, 2018, the Company issued grants for 1,678,743 restricted shares of common stock and stock option awards for 357,256 shares of common stock under the 2013 Plan. Grants for 1,609,857 restricted shares of common stock consisted of time-vested restricted shares (50%) and performance-vested restricted shares (50%). The performance-vested restricted shares will vest in three equal installments based on achievement of certain share price targets. The time-vested portion of the restricted share awards vest over a three to five year period.. For the remaining grants of 68,886 restricted shares of common stock, the shares vest based on service over a four year period. For the stock option awards granted on January 1, 2018, sixty percent of the shares of common stock subject to each option vest based on service over a four year period; the remaining forty percent of the shares of common stock subject to each option vest upon satisfaction of various performance conditions. Following the completion of the Company’s IPO in February 2018, the Company uses the public share price in the determination of the grant date fair value of equity award grants. Activity during the three month periods ended March 31, 2018 and 2017 related to stock option awards and restricted stock awards is shown in the tables below. Shares Subject to Stock Option Awards Quarter Ended March 31, 2018 2017 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 $ 3.66 $ 5.71 9,078,728 $ 3.40 $ 4.90 8,669,475 Granted 6.52 14.27 357,256 6.16 13.51 444,117 Forfeited 6.26 13.73 (4,552) — — — Exercised 2.54 2.45 (5,000) — — — Outstanding at end of the period $ 3.76 $ 6.04 9,426,432 $ 3.53 $ 5.32 9,113,592 Vested $ 3.21 $ 4.32 5,872,927 $ 2.95 $ 3.49 3,716,741 Unvested 4.68 8.88 3,553,505 3.93 6.58 5,396,851 Restricted Stock Awards Quarter Ended March 31, 2018 2017 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 11.82 1,293,107 $ 9.48 1,018,228 Granted 14.27 1,678,743 13.51 502,981 Vested 12.84 (16,830) 7.99 (2,102) Forfeited — — — — Unvested at end of period $ 13.20 2,955,020 $ 10.82 1,519,107 Director Plan Restricted Stock Awards Quarter Ended March 31, 2018 2017 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ — — $ 5.71 49,230 Granted — — — — Vested — — 5.71 (16,293) Forfeited — — — — Unvested at end of period $ — — $ 5.71 32,937 Share-based compensation expense for equity awards is measured at the grant date, based on the estimated fair value of the award, and recognized over the requisite employee service period. Stock option awards have an expiration date of ten years from the grant date. The grant date fair value of stock option awards is computed using Black-Scholes option pricing framework. The grant date fair value of stock option awards granted in the quarter ended March 31, 2018 and 2017 was computed using the following assumptions as of the date of the grant: 2018 2017 Current stock price $ 14.27 $ 13.51 Exercise price $ 14.27 $ 13.51 Expected volatility 50 % 50 % Risk free rate 2.27 % 2.22 % Expected average years to exit 5 5 The Company used both a market approach and income approach to estimate the current stock price used in the valuation of restricted share and stock option awards issued in the first quarter of 2017 and on January 1, 2018. The market approach considered the then current EBITDA multiples and price/earnings multiples of comparable public companies. The income approach considered management’s forecast of operating results, a long-term growth rate and a discount rate. The results of the market and income approach were weighted in developing the estimate of fair value. The expected life of the options granted in the quarter ended March 31, 2018 and 2017 was based on the average holding period for a private equity investment. The risk free interest rate was based on the yield for the U.S. Treasury coupon strip with a maturity date equal to the expected life of the award. As the Company’s common shares were not publicly traded prior to the IPO, the Company has historically calculated expected volatility based on an average volatility of companies in the same or similar lines of business adjusted for differing levels of leverage. In the quarter ended March 31, 2018, the Company revised the estimate of time it expected to take to achieve the performance conditions on certain performance-vested restricted share awards. A cumulative catch up adjustment was recorded so that the cumulative compensation cost for these awards was equal to what would have been recognized had the new estimate been used since the grant date. Dividend Payments As of March 31, 2018 and December 31, 2017, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $2.1 and $2.0 million, respectively, which is 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.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2018
Earnings per Share
Earnings Per Share	10. Earnings Per Share The computation of basic and diluted earnings per share is as follows: Quarter ended March 31, (in thousands except per share amounts) 2018 2017 Net income $ 10,524 $ 4,413 Shares: Basic: Weighted average number of shares outstanding 61,599,057 54,813,823 Plus: Incremental shares from assumed conversion of dilutive instruments 4,684,564 3,932,404 Diluted: Weighted average number of shares outstanding 66,283,621 58,746,227 For the three month periods ended March 31, 2018 and 2017, there were 1,646,844 and 266,470 outstanding instruments, respectively, excluded from the above computations of weighted average shares for diluted EPS because the effects would be anti-dilutive. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards.

Equity Method Investment

Equity Method Investment	3 Months Ended
	Mar. 31, 2018
Equity Method Investment
Equity Method Investment	11. Equity Method Investment The Company made the third and final $1.0 million equity investment required under the Cerebellum Capital put option on February 1, 2018. On March 2, 2018, the Company agreed to purchase an additional $3.0 million of participating preferred units in Cerebellum Capital in three installments of $1.0 million each on April 1, 2018, July 1, 2018 and October 1, 2018. The Company made the first $1.0 million investment in additional participating preferred units on April 1, 2018. The Company recorded $0.1 million in losses from equity method investments in the quarter ended March 31, 2018 and no losses from equity method investments in the quarter ended March 31, 2017. Losses from equity method investments are recorded in interest income and other income/(expense) on the unaudited condensed consolidated statement of operations. Equity method investments are recorded in other assets on the unaudited condensed consolidated balance sheets.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)	12. Accumulated Other Comprehensive Income (Loss) The following table presents changes in accumulated other comprehensive income/(loss) by component for the quarters ended March 31, 2018 and 2017. Cumulative Available-for-sale Cash Flow Translation Securities (a) Hedges (b) Adjustment Total Balance, December 31, 2016 $ (13) $ (462) $ (62) $ (537) Other comprehensive income/(loss) before reclassification and tax 50 (4) 55 101 Tax impact (20) 1 (22) (41) Reclassification adjustments, before tax — 158 — 158 Tax impact — (63) — (63) Net current period other comprehensive income/(loss) 30 92 33 155 Balance, March 31, 2017 $ 17 $ (370) $ (29) $ (382) Balance, December 31, 2017 $ 51 $ — $ 13 $ 64 Other comprehensive income/(loss) before reclassification and tax 14 — 39 53 Tax impact (9) — (10) (19) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income/(loss) 5 — 29 34 Balance, March 31, 2018 $ 56 $ — $ 42 $ 98 (a) Reclassifications out of AOCL related to available-for-sale securities are recorded in interest income and other income/(expense) (b) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events
Subsequent Events	13. Subsequent Events On April 11, 2018 and May 3, 2018, the Company repaid $15.0 million and $3.0 million, respectively, of the outstanding term loans under the Credit Agreement, thereby decreasing the principal amount of term loans outstanding under the Credit Agreement to $305.0 million. On May 3, 2018, the Company signed an amendment to the Credit Agreement increasing the commitments for the revolving credit facility from $50.0 million to $100.0 million. An estimated $0.4 million in debt issuance costs were incurred with the amendment. No other terms or conditions of the Credit Agreement were modified.

Significant Accounting Polici21

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies
Basis of Presentation	The Company prepares its interim unaudited condensed consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. A complete listing of the Company’s significant accounting policies is included in the 2017 Annual Report on Form 10-K. All dollar amounts, except per share data in the text and tables herein, are stated in thousands unless otherwise indicated.
Retroactive Adjustments for Common Stock Split	Retroactive Adjustments for Common Stock Split The Company's Board of Directors and stockholders approved a 175.194 for 1 stock split of the Company's common stock on February 1, 2018. All common share and common per share amounts in the unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this stock split. See Notes 8, 9 and 10.
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if 1) the Company holds greater than 50% voting interest in entities controlled through voting interests or if 2) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company's involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory services, fund administration, distribution and compliance services and/or holding a minority interest. At March 31, 2018 and December 31, 2017, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $11.9 million and $10.9 million respectively which are included in investments on the unaudited condensed consolidated balance sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it had an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. During the period ended March 31, 2018, the Company's involvement with other non‑consolidated VIEs included an equity method investment and put and call option arrangements with Cerebellum Capital, LLC (“Cerebellum Capital”). The Company's maximum risk of loss associated with Cerebellum Capital totaled $6.0 million at March 31, 2018 and December 31, 2017, which includes the $6.0 million investment at March 31, 2018 and as of December 31, 2017, $5.0 million investment and $1.0 million exposure under the put option for the purchase of additional equity. See Note 11. The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value.
Use of Estimates and Assumptions	Use of Estimates and Assumptions The preparation of 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. Actual results may ultimately differ from those estimates and the differences may be material.
Restructuring and Integration Costs	Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance‑related expenses related to one‑time benefit arrangements and contract termination costs. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs on the unaudited condensed consolidated statements of operations. A rollforward of restructuring and integration liabilities for the periods ended March 31, 2018 and 2017 appears below. Quarter ended March 31 , (in millions) 2018 2017 Liability balance, beginning of period $ 0.1 $ 7.4 Severance expense RS Investment Management Co. — 0.3 Other 0.3 — Contract termination expense RS Investment Management Co. — 0.7 Integration costs — 0.1 Restructuring and integration costs 0.3 1.1 Settlement of liabilities (0.2) (2.4) Liability balance, end of period $ 0.2 $ 6.1 Accrued expenses $ 0.2 $ 5.7 Other liabilities — 0.4 Liability balance, end of period $ 0.2 $ 6.1
Earnings per share	Earnings per share The calculation of basic earnings per share is based on the weighted average number of shares of the Company's common stock, Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of all classes of the Company's common stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share.
Debt Modification	Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and included in general and administrative expense on the unaudited condensed consolidated statements of operations. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis.
Revenue Recognition	Accounting policies updated for ASU 2014-09 guidance The Company’s introducing broker-dealer VCA adopted ASU 2014-09 on January 1, 2018 and updated the following policies. (a) Prepaid C Share Commissions VCA 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 VCA makes an upfront payment to a dealer or institution for the sale of Class C shares, VCA capitalizes the cost of such payment, which is recorded in prepaid expenses on the unaudited condensed balance sheets, and amortizes the cost over a 12 month period, the estimated period of benefit. Deferred sales commission amortization expense was $0.2 million and $0.3 million for the quarters ended March 31, 2018 and 2017, respectively, and was included in distribution and other asset-based expenses on the unaudited condensed consolidated statements of operations. (b) Revenue Recognition VCA receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. There are no direct costs incurred to obtain these contracts. Direct costs incurred to fulfill services under the distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. Revenue is measured in an amount that reflects the consideration to which VCA 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. VCA’s performance obligation is satisfied 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, and is subject to factors outside of VCA’s control including investor behavior and activity and market volatility and is recognized as these uncertainties are resolved. VCA may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods, as it represents variable consideration and is recognized as uncertainties are resolved. VCA has contractual arrangements with third parties to provide certain distribution services. Management considers whether VCA is acting as the principal service provider or as an agent to determine whether its revenue should be recorded based on the gross amount payable by the Victory Funds or net of payments to third-party service providers, respectively. VCA is considered a principal service provider if it controls the service that is transferred to the customer. VCA is considered an agent when it arranges for the service to be provided by another party and does not control the service. Substantially all of VCA’s revenue is recorded gross of payments made to third parties. VCA’s distribution fee revenue, which is earned from mutual funds domiciled in the U.S., totaled $10.1 million and $11.2 million for the quarters ended March 31, 2018 and 2017, respectively, and is recorded in fund administration and distribution fees on the unaudited condensed consolidated statements of operations.
Adoption of New Accounting Standards and Recent Accounting Pronouncements	Adoption of New Accounting Standards ASU 2016-09 was issued by the FASB in March 2016 to reduce the cost and complexity of reporting on employee share based payments and to address the tax reporting, forfeitures, and expected term related to equity awards. ASU 2016-09 eliminates the requirement that excess tax benefits be realized through a reduction in income taxes payable before the benefits can be recognized. The Company adopted ASU 2016-09 on January 1, 2018 using a modified retrospective transition method. A one-time credit to retained earnings of $1.3 million was recorded as the cumulative-effect adjustment for excess tax benefits not previously recognized and to adjust compensation cost on equity awards outstanding at January 1, 2018 as if the Company had previously accounted for forfeitures as they occurred. With the adoption of ASU 2016-09, the Company now recognizes the income tax effects of stock-based compensation in income tax expense, which may cause significant fluctuations in the reported amount of income tax expense in the unaudited condensed consolidated statements of operation and the effective tax rate as restricted shares vest and stock options are exercised. In addition, upon adoption of ASU 2016-09, the Company made the election to account for forfeitures of equity awards as they occur. The Company elected to adopt the amendment related to the cash flow presentation of excess tax benefits prospectively and prior periods have not been adjusted. ASU 2017-09 was issued by the FASB in May 2017 to clarify when changes in the terms or conditions of a share-based payment award qualify for accounting treatment as a modification. The Company adopted ASU 2017-09 on January 1, 2018 and will apply the new guidance prospectively to awards modified after January 1, 2018. The adoption had no significant impact on the Company’s unaudited condensed consolidated financial statements for the period ended March 31, 2018. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue from contracts with customers and to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards. This ASU will supersede existing revenue recognition guidance and require the following steps when recognizing revenue under ASU 2014‑09: 1) identify the contract with the customer 2) identify performance obligations in the contract 3) determine the transaction price 4) allocate the transaction price to the performance obligations in the contract and 5) recognize revenue when or as the entity satisfies the performance obligation. This ASU also requires additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. An entity may apply the new guidance by using one of two methods 1) retrospective application to each prior reporting period presented or 2) a modified retrospective approach, requiring the standard be applied only to the most current period presented, with the cumulative effect of initially applying the standard recognized at the date of initial application. ASU 2014‑09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for non‑emerging growth companies, and for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, for the Company. The Company's introducing broker-dealer VCA adopted ASU 2014-09 effective January 1, 2018. VCA receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds. There are no direct costs incurred to obtain these contracts. Direct costs incurred to fulfill services under the distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. There was no change to how VCA records revenue from contracts with customers and accounts for costs incurred to fulfill services under distribution contracts from adoption of ASU 2014-09. The Company is currently evaluating the potential impact of other revenue and related direct costs on its financial statements. In early 2016, the FASB issued ASU 2016‑01. This update requires equity securities to be measured at fair value and changes in the fair value of equity securities to be recognized in net income. The update is effective for fiscal years beginning after December 15, 2017 for non‑emerging growth companies and for fiscal years beginning after December 31, 2018 for the Company. Management does not expect the adoption of the standard to have a significant impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02 on leases. The new guidance requires lessees to record most leases on their balance sheets. Expense will be recognized in the income statement in a manner that is similar to today's accounting. The update is effective for fiscal years beginning after December 15, 2018 for non‑emerging growth companies and for fiscal years beginning after December 15, 2019 for the Company. The Company is in the process of analyzing how the new rules will impact financial reporting. In August 2016, the FASB issued ASU 2016‑15. The update provides guidance on certain cash flow statement classifications that were previously unclear or lacked specific guidance. The classifications addressed in the update include debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees. The update is effective for fiscal years beginning after December 15, 2017 for non‑emerging growth companies and for fiscal years beginning after December 15, 2018 for the Company. The Company is in the process of analyzing how the new rules will impact financial reporting. In January 2017, the FASB issued ASU 2017-04 simplifying the test for goodwill impairment. The standard eliminates Step 2 from the goodwill impairment test. Under the amended guidance, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. The new guidance is effective for the Company's fiscal year that begins after December 15, 2020 and requires a prospective approach to adoption. Early adoption is permitted for interim or annual goodwill impairment tests. Upon adoption, the new guidance will impact the Company’s consolidated financial statements and related disclosures only in the event there is goodwill impairment. On February 14, 2018, the FASB issued ASU 2018-02 permitting companies to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. The guidance is effective for the Company’s fiscal year beginning January 1, 2019. Early adoption is permitted. Management does not expect the adoption to have a significant impact on the Company's consolidated financial statements. On March 13, 2018, the FASB issued ASU 2018-05 incorporating guidance from SEC Staff Accounting Bulletin (SAB) 118 into Accounting Standards Codification 740 on income taxes. SAB 118 addresses situations where companies are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. See Note 6 for more information on the Company’s accounting for the income tax effects of the Tax Act.

Significant Accounting Polici22

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Significant Accounting Policies
Summary of rollforward of restructuring and integration liabilities	Quarter ended March 31 , (in millions) 2018 2017 Liability balance, beginning of period $ 0.1 $ 7.4 Severance expense RS Investment Management Co. — 0.3 Other 0.3 — Contract termination expense RS Investment Management Co. — 0.7 Integration costs — 0.1 Restructuring and integration costs 0.3 1.1 Settlement of liabilities (0.2) (2.4) Liability balance, end of period $ 0.2 $ 6.1 Accrued expenses $ 0.2 $ 5.7 Other liabilities — 0.4 Liability balance, end of period $ 0.2 $ 6.1

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2018
Related Party Transactions
Summary of related party transactions	As of As of March 31, 2018 December 31, 2017 Related party assets Receivables (Investment management fees) $ 22,982 $ 23,027 Receivables (Fund administration and distribution fees) 4,653 3,925 Investments 11,857 10,925 Total $ 39,492 $ 37,877 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 2,672 $ 1,155 Other liabilities (promissory note) 527 671 Total $ 3,199 $ 1,826 Quarter Ended March 31, 2018 2017 Related party revenue Investment management fees $ 65,866 $ 61,310 Fund administration and distribution fees 15,834 16,546 Total $ 81,700 $ 77,856 Related party expense Distribution and other asset-based expenses (fund reimbursements) $ 2,933 $ 4,013 General and administrative 141 288 Interest expense and other financing costs (promissory note) 6 9 Total $ 3,080 $ 4,310

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2018
Available For Sale Securities
Gain (Loss) on Investments [Line Items]
Summary of the cost and fair value of investments	Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2018 $ 595 $ 97 $ — $ 692 As of December 31, 2017 $ 595 $ 82 $ — $ 677
Trading Securities.
Gain (Loss) on Investments [Line Items]
Cost and fair value of investments	Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2018 $ 11,020 $ 801 $ (270) $ 11,551 As of December 31, 2017 9,978 950 (269) 10,659
Summary of proceeds and realized gains and losses	Sale Realized Proceeds Gains (Losses) For the quarter ending March 31, 2018 $ 448 $ 28 $ (2) For the quarter ending March 31, 2017 937 9 (6)

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2018
Debt
Schedule of components of interest expense and other financing costs	For the quarter ended, March 31, 2018 2017 Interest expense $ 6,015 $ 10,916 Amortization of debt issuance costs 603 914 Amortization of debt discount 252 400 Interest rate cap expense — 153 CEMP base payment accretion expense 140 173 Other 82 72 Total $ 7,092 $ 12,628
Schedule of components of long-term debt	March 31, 2018 December 31, 2017 Principal outstanding $ 323,000 $ 499,750 Unamortized debt issuance costs (8,602) (11,442) Unamortized debt discount (3,963) (5,083) Long-term debt $ 310,435 $ 483,225

Share Based Compensation (Table

Share Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Share Based Compensation
Summary of activity related to stock option awards and restricted stock awards	Shares Subject to Stock Option Awards Quarter Ended March 31, 2018 2017 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 $ 3.66 $ 5.71 9,078,728 $ 3.40 $ 4.90 8,669,475 Granted 6.52 14.27 357,256 6.16 13.51 444,117 Forfeited 6.26 13.73 (4,552) — — — Exercised 2.54 2.45 (5,000) — — — Outstanding at end of the period $ 3.76 $ 6.04 9,426,432 $ 3.53 $ 5.32 9,113,592 Vested $ 3.21 $ 4.32 5,872,927 $ 2.95 $ 3.49 3,716,741 Unvested 4.68 8.88 3,553,505 3.93 6.58 5,396,851 Restricted Stock Awards Quarter Ended March 31, 2018 2017 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 11.82 1,293,107 $ 9.48 1,018,228 Granted 14.27 1,678,743 13.51 502,981 Vested 12.84 (16,830) 7.99 (2,102) Forfeited — — — — Unvested at end of period $ 13.20 2,955,020 $ 10.82 1,519,107 Director Plan Restricted Stock Awards Quarter Ended March 31, 2018 2017 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ — — $ 5.71 49,230 Granted — — — — Vested — — 5.71 (16,293) Forfeited — — — — Unvested at end of period $ — — $ 5.71 32,937
Summary of grant date fair value of stock option awards is computed using Black Scholes option pricing framework	2018 2017 Current stock price $ 14.27 $ 13.51 Exercise price $ 14.27 $ 13.51 Expected volatility 50 % 50 % Risk free rate 2.27 % 2.22 % Expected average years to exit 5 5

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings per Share
Summary of computation of basic and diluted earnings per share	Quarter ended March 31, (in thousands except per share amounts) 2018 2017 Net income $ 10,524 $ 4,413 Shares: Basic: Weighted average number of shares outstanding 61,599,057 54,813,823 Plus: Incremental shares from assumed conversion of dilutive instruments 4,684,564 3,932,404 Diluted: Weighted average number of shares outstanding 66,283,621 58,746,227

Accumulated Other Comprehensi28

Accumulated Other Comprehensive Income (Loss) (Tables)	3 Months Ended
	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss)
Summary of changes in accumulated other comprehensive income/(loss) by component	Cumulative Available-for-sale Cash Flow Translation Securities (a) Hedges (b) Adjustment Total Balance, December 31, 2016 $ (13) $ (462) $ (62) $ (537) Other comprehensive income/(loss) before reclassification and tax 50 (4) 55 101 Tax impact (20) 1 (22) (41) Reclassification adjustments, before tax — 158 — 158 Tax impact — (63) — (63) Net current period other comprehensive income/(loss) 30 92 33 155 Balance, March 31, 2017 $ 17 $ (370) $ (29) $ (382) Balance, December 31, 2017 $ 51 $ — $ 13 $ 64 Other comprehensive income/(loss) before reclassification and tax 14 — 39 53 Tax impact (9) — (10) (19) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income/(loss) 5 — 29 34 Balance, March 31, 2018 $ 56 $ — $ 42 $ 98 (a) Reclassifications out of AOCL related to available-for-sale securities are recorded in interest income and other income/(expense) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs

Organization and Nature of Bu29

Organization and Nature of Business - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions	Mar. 13, 2018	Feb. 12, 2018
Term Loans
Sale of Stock
Debt Term		7 years
Debt Instrument, Face Amount		$ 360
Revolving Credit Facility
Sale of Stock
Debt Term		5 years
Amount of revolving credit facility		$ 50
IPO
Sale of Stock
Proceeds received from issuance of shares	$ 156.5
Class A | IPO
Sale of Stock
Number of shares issued		11,700,000
Share price		$ 13
Proceeds received from issuance of shares		$ 143
Class A | Underwriter's Option
Sale of Stock
Number of shares issued	1,110,860
Proceeds received from issuance of shares	$ 13.5

Significant Accounting Polici30

Significant Accounting Policies (Details) $ in Millions	Feb. 01, 2018	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Retroactive Adjustments for Common Stock Split
Stock split	175.194
Variable Interest Entities
Maximum risk of loss related to unconsolidated sponsored VIE investment funds		$ 11.9	$ 10.9
Cerebellum Capital, LLC
Variable Interest Entities
Maximum risk of loss related to unconsolidated sponsored VIE investment funds		6	6
Maximum exposure, put option			1
Investment in unconsolidated VIE and maximum exposure, investment		$ 6	$ 5

Significant Accounting Polici31

Significant Accounting Policies - Restructuring and integration liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Restructuring and Integration Costs
Restructuring and integration costs	$ 264	$ 1,130
Rollforward of restructuring and integration liabilities
Liability balance, beginning of year	100	7,400
Integration costs		100
Restructuring and integration costs	264	1,130
Settlement of liabilities	(200)	(2,400)
Liability balance, end of year	200	6,100
Accrued expenses
Rollforward of restructuring and integration liabilities
Liability balance, end of year	200	5,700
Other liabilities.
Rollforward of restructuring and integration liabilities
Liability balance, end of year		400
Severance expense | RSIM
Rollforward of restructuring and integration liabilities
Severance expense and contract termination expense		300
Severance expense | Other
Rollforward of restructuring and integration liabilities
Severance expense and contract termination expense	$ 300
Contract termination expense | RSIM
Rollforward of restructuring and integration liabilities
Severance expense and contract termination expense		$ 700

Significant Accounting Polici32

Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 01, 2018
Recent Accounting Pronouncements
Upfront sales commissions that may be paid to dealers and institutions with respect to Class C shares	1.00%
Amortization period for upfront sales commissions paid to dealers and institutions	12 months
Deferred sales commission amortization expense	$ 200	$ 300
Fund administration and distribution fees	15,834	16,546
Cumulative effect adjustment for adoption of ASU 2016-09	1,818
Distribution Fee Revenue
Recent Accounting Pronouncements
Direct costs incurred to obtain contracts	0
Fund administration and distribution fees	$ 10,100	$ 11,200
ASU 2016-09
Recent Accounting Pronouncements
Cumulative effect adjustment for adoption of ASU 2016-09			$ 1,300

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Financial Liabilities
Transfers between levels	$ 0	$ 0
Level 3
Financial Liabilities
Contingent Consideration Arrangements	$ (1,200)

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Related party assets
Investments	$ 12,243		$ 11,336
Related party liabilities
Other liabilities (promissory note)	13,878		12,989
Related party revenue
Investment management fees	89,130	$ 84,115
Fund administration and distribution fees	15,834	16,546
Total revenue	104,964	100,661
Related party expense
Distribution and other asset-based expenses (fund reimbursements)	25,161	26,881
General and administrative	9,056	8,921
VCH
Related party assets
Receivables (Investment management fees)	22,982		23,027
Receivables (Fund administration and distribution fees)	4,653		3,925
Investments	11,857		10,925
Total	39,492		37,877
Related party liabilities
Accounts payable and accrued expenses (fund reimbursements)	2,672		1,155
Other liabilities (promissory note)	527		671
Total	3,199		$ 1,826
Related party revenue
Investment management fees	65,866	61,310
Fund administration and distribution fees	15,834	16,546
Total revenue	81,700	77,856
Related party expense
Distribution and other asset-based expenses (fund reimbursements)	2,933	4,013
General and administrative	141	288
Interest expense and other financing costs (promissory note)	6	9
Total	$ 3,080	$ 4,310

Investments (Details)

Investments (Details) - Available For Sale Securities - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Investments
Cost	$ 595	$ 595
Gross unrealized gains	97	82
Available-for-sale securities, at fair value	$ 692	$ 677

Investments -Trading Securities

Investments -Trading Securities (Details) - Trading Securities. - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Investments
Cost	$ 11,020		$ 9,978
Gross unrealized gains	801		950
Gross unrealized losses	270		269
Trading securities, at fair value	11,551		$ 10,659
Proceeds and realized gains and losses recognized
Sale Proceeds	448	$ 937
Realized gains	28	9
Realized losses	$ 2	$ 6

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Income Taxes
Federal income tax at U.S. statutory rate	21.00%		35.00%
Provisional credit to federal tax expense			$ (2,400)
Income tax benefit/(expense)	$ 3,557	$ 2,866
Effective income tax rate ( as a percent)	25.30%	39.40%
Valuation allowance, deferred tax assets	$ 0	$ 0

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Mar. 19, 2018	Mar. 13, 2018	Feb. 21, 2018	Feb. 12, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Debt
Debt Issuance cost expensed					$ 603	$ 914
Dividends paid					53	$ 119,866
Loss on debt extinguishment					6,058
Revolving Credit Facility
Debt
Amount of revolving credit facility				$ 50,000
Debt Term				5 years
Interest Expense and Other Financing Costs
Debt
Write-off of unamortized debt discount and debt issuance costs				$ 4,200
Write-off of unamortized debt discount				1,900
Loss on debt extinguishment				6,100
Credit Agreement
Debt
Additional loans or commitments available under credit agreement				$ 154,000
Percentage of consolidated EBITDA				100.00%
Arranger and legal costs expensed				$ 3,700
Debt Issuance cost capitalized				1,800
Repayments of debt				499,700
Credit Agreement | Revolving Credit Facility
Debt
Original issue discount				$ 300
Maximum first lien leverage ratio (as a percent)				35.00%
Credit Agreement | General and Administrative Expense.
Debt
Debt Issuance cost expensed				$ 1,900
Term Loans
Debt
Principal amount				360,000
Net proceeds from issuance of debt				355,900
Cash on hand for term loan repayment				$ 800
Debt Term				7 years
Original issue discount				$ 900	$ 3,963		$ 5,083
Prepayment penalty				1.00%
Effective period of prepayment penalty				6 months
Amortization rate (as a percent)				1.00%
Fixed interest rate (as a percent)					5.05%
Effective yield					5.57%
Repayments of debt	$ 27,000		$ 10,000
Term Loans | London Interbank Offered Rate (LIBOR)
Debt
Base Spread				2.75%
Minimum | Term Loans
Debt
Mandatory prepayments, annual excess cash flows, effective December 31, 2019 (as a percent)				0.00%
Maximum | Term Loans
Debt
Mandatory prepayments, annual excess cash flows, effective December 31, 2019 (as a percent)				50.00%
IPO
Debt
Proceeds received from issuance of shares		$ 156,500
Class A | IPO
Debt
Proceeds received from issuance of shares				$ 143,000

Debt - Component of Interest Ex

Debt - Component of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt
Interest expense	$ 6,015	$ 10,916
Amortization of debt issuance costs	603	914
Amortization of debt discount	252	400
Interest rate cap expense		153
CEMP base payment accretion expense	140	173
Other	82	72
Total	$ 7,092	$ 12,628

Debt - Component of Long Term D

Debt - Component of Long Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Feb. 12, 2018	Dec. 31, 2017
Debt
Long-term debt	$ 310,435		$ 483,225
Term Loans
Debt
Principal outstanding	323,000		499,750
Unamortized debt issuance costs	(8,602)		(11,442)
Unamortized debt discount	(3,963)	$ (900)	(5,083)
Long-term debt	$ 310,435		$ 483,225

Equity (Details)

Equity (Details)	Feb. 12, 2018USD ($)item$ / sharesshares	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)$ / sharesshares	Dec. 31, 2017USD ($)item$ / sharesshares
Pre-IPO Number of classes of common stock | item				1
Common stock, par value | $ / shares				$ 0.01
Common stock, shares authorized			0	78,837,300
Preferred stock, shares authorized	10,000,000
Preferred stock, par value | $ / shares	$ 0.01
Preferred stock, shares issued			0
Number of votes for each share of common stock | item				1
Conversion basis of Class B Shares into Class A shares | $	$ 1
Threshold for number of class B shares as a percent of the aggregate class A shares for conversion	10.00%
Offering costs | $		$ 3,900,000	$ 438,000	$ 300,000
Stock issuance costs included in prepaid expenes | $				$ 2,900,000
Class A
Common stock, par value | $ / shares	$ 0.01		$ 0.01
Common stock, shares authorized	400,000,000		400,000,000	0
Number of votes for each share of common stock | item	1
Class B
Common stock, par value | $ / shares	$ 0.01		$ 0.01
Common stock, shares authorized	200,000,000		200,000,000	0
Number of votes for each share of common stock | item	10
IPO
Legal, accounting and other costs included in offering costs | $				$ 4,600,000

Share Based Compensation (Detai

Share Based Compensation (Details)	Jan. 01, 2018itemshares	Mar. 31, 2018$ / sharesshares	Mar. 31, 2017$ / sharesshares
Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of restricted shares granted		1,678,743	502,981
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		357,256	444,117
Estimated share price | $ / shares		$ 14.27	$ 13.51
2013 Plan | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of restricted shares granted	1,678,743
2013 Plan | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of options granted	357,256
2013 Plan | Time-vested and performance-vested | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of restricted shares granted	1,609,857
2013 Plan | Vesting based on time | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of share instruments issued	50.00%
2013 Plan | Vesting based on performance | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of share instruments issued	50.00%
Vesting installments | item	3
2013 Plan | Vesting based on performance | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	40.00%
2013 Plan | Vesting based on service | Restricted shares remaining
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of restricted shares granted	68,886
Service based vesting period of awards	4 years
2013 Plan | Vesting based on service | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	60.00%
Service based vesting period of awards	4 years
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		3,372,484
Granted (in shares)		0
Minimum | 2013 Plan | Vesting based on time | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service based vesting period of awards	3 years
Maximum | 2013 Plan | Vesting based on time | Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service based vesting period of awards	5 years

Share Based Compensation - Stoc

Share Based Compensation - Stock Options (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock options
Avgwtd grant-date fair value
Outstanding at the beginning of period	$ 3.66	$ 3.40
Granted (in dollars per share)	6.52	6.16
Forfeited (in dollars per share)	6.26
Exercised (in dollars per share)	2.54
Outstanding at the end of period	3.76	3.53
Vested (in dollars per share)	3.21	2.95
Nonvested (in dollars per share)	4.68	3.93
Avgwtd exercise price(1)
Outstanding at the beginning of period	5.71	4.90
Granted (in dollars per share)	14.27	13.51
Forfeited (in dollars per share)	13.73
Exercised (in dollars per share)	2.45
Outstanding at the end of the period	6.04	5.32
Vested (in dollars per share)	4.32	3.49
Nonvested (in dollars per share)	$ 8.88	$ 6.58
Units
Outstanding at the beginning of period	9,078,728	8,669,475
Granted (in shares)	357,256	444,117
Forfeited (in shares)	(4,552)
Exercised	(5,000)
Outstanding at the end of the period	9,426,432	9,113,592
Vested (in shares)	5,872,927	3,716,741
Nonvested (in shares)	3,553,505	5,396,851
2018 Plan
Units
Granted (in shares)	0

Share Based Compensation - Rest

Share Based Compensation - Restricted Stock Awards (Details) - Restricted shares - $ / shares	Jan. 01, 2018	Mar. 31, 2018	Mar. 31, 2017
Avg wtd grant-date fair value
Unvested at beginning of period	$ 11.82	$ 11.82	$ 9.48
Granted		14.27	13.51
Vested		12.84	7.99
Unvested at end of period		$ 13.20	$ 10.82
Units
Unvested at beginning of period	1,293,107	1,293,107	1,018,228
Granted (in shares)		1,678,743	502,981
Vested (in shares)		(16,830)	(2,102)
Unvested at end of period		2,955,020	1,519,107
2013 Plan
Units
Granted (in shares)	1,678,743
Director Plan
Avg wtd grant-date fair value
Unvested at beginning of period			$ 5.71
Vested			5.71
Unvested at end of period			$ 5.71
Units
Unvested at beginning of period			49,230
Vested (in shares)			(16,293)
Unvested at end of period			32,937

Share Based Compensation - Fair

Share Based Compensation - Fair vlaue of Stock Option Awards (Details) - Stock options - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share Based Compensation
Expiration period	10 years
Grant date fair value of stock option awards computed using Black Scholes option pricing framework
Stock price at time of grant	$ 14.27	$ 13.51
Exercise price	$ 14.27	$ 13.51
Expected volatility	50.00%	50.00%
Risk free rate	2.27%	2.22%
Expected average years to exit	5 years	5 years

Share Based Compensation - Divi

Share Based Compensation - Dividend Payments (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Restricted shares
Share Based Compensation
Amount of cash bonuses and distributions related to all dividends previously declared	$ 2.1	$ 2

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Computation of basic and diluted earnings per share
Net income	$ 10,524	$ 4,413
Shares:
Basic: Weighted average number of shares outstanding	61,599,057	54,813,823
Plus: Incremental shares from assumed conversion of dilutive instruments	4,684,564	3,932,404
Diluted: Weighted average number of shares outstanding	66,283,621	58,746,227
Number of shares excluded from the computations of weighted average shares for diluted EPS because the effects would be anti dilutive	1,646,844	266,470

Equity Method Investment (Detai

Equity Method Investment (Details) $ in Thousands	Apr. 01, 2018USD ($)	Feb. 01, 2018USD ($)	Mar. 31, 2018USD ($)	Mar. 31, 2017USD ($)	Oct. 01, 2018USD ($)	Jul. 01, 2018USD ($)	Mar. 02, 2018USD ($)item
Equity Method Investment
Purchase of equity method investment			$ 1,000
Losses recorded under the equity method of accounting			(137)
Cerebellum
Equity Method Investment
Purchase of equity method investment	$ 1,000
Additional equity that may be purchased per agreement							$ 3,000
Number of installments for purchase of additional equity | item							3
Installment for purchase of additional equity	$ 1,000				$ 1,000	$ 1,000
Losses recorded under the equity method of accounting			$ (100)	$ 0
Cerebellum | Put option
Equity Method Investment
Purchase of equity method investment		$ 1,000

Accumulated Other Comprehensi49

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Changes in accumulated other comprehensive income/(loss) by component
Balance at beginning of period	$ 231,183	$ 330,998
Net current period other comprehensive income/(loss)	34	155
Balance at end of period	398,826	218,865
Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive income/(loss) by component
Balance at beginning of period	64	(537)
Other comprehensive income/(loss) before reclassification and tax	53	101
Tax impact	(19)	(41)
Reclassification adjustments, before tax		158
Tax impact		(63)
Net current period other comprehensive income/(loss)	34	155
Balance at end of period	98	(382)
Available-for-sale Securities
Changes in accumulated other comprehensive income/(loss) by component
Balance at beginning of period	51	(13)
Other comprehensive income/(loss) before reclassification and tax	14	50
Tax impact	(9)	(20)
Net current period other comprehensive income/(loss)	5	30
Balance at end of period	56	17
Cash Flow Hedges
Changes in accumulated other comprehensive income/(loss) by component
Balance at beginning of period		(462)
Other comprehensive income/(loss) before reclassification and tax		(4)
Tax impact		1
Reclassification adjustments, before tax		158
Tax impact		(63)
Net current period other comprehensive income/(loss)		92
Balance at end of period		(370)
Cumulative Translation Adjustment
Changes in accumulated other comprehensive income/(loss) by component
Balance at beginning of period	13	(62)
Other comprehensive income/(loss) before reclassification and tax	39	55
Tax impact	(10)	(22)
Net current period other comprehensive income/(loss)	29	33
Balance at end of period	$ 42	$ (29)

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	May 03, 2018	Apr. 11, 2018	Mar. 19, 2018	Feb. 21, 2018	Feb. 12, 2018	May 02, 2018	Mar. 31, 2018	Dec. 31, 2017
Credit Agreement
Subsequent Events
Repayments of debt					$ 499,700
Term Loans
Subsequent Events
Repayments of debt			$ 27,000	$ 10,000
Principal outstanding							$ 323,000	$ 499,750
Term Loans | Subsequent event
Subsequent Events
Repayments of debt	$ 3,000	$ 15,000
Principal outstanding	305,000
Revolving Credit Facility
Subsequent Events
Amount of revolving credit facility					$ 50,000
Revolving Credit Facility | Subsequent event
Subsequent Events
Amount of revolving credit facility	100,000					$ 50,000
Debt issuance costs	$ 400