Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | Victory Capital Holdings, Inc. | |
Entity Central Index Key | 0001570827 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Common Stock, Shares Outstanding | 68,594,219 | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | VCTR | |
Security Exchange Name | NASDAQ | |
Entity Tax Identification Number | 32-0402956 | |
Entity File Number | 001-38388 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 15935 La Cantera Parkway | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78256 | |
City Area Code | 216 | |
Local Phone Number | 898-2400 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 38,550 | $ 69,533 |
Receivables | 93,713 | 104,305 |
Prepaid expenses | 7,914 | 6,654 |
Investments, at fair value | 32,388 | 31,724 |
Property and equipment, net | 24,760 | 25,295 |
Goodwill | 981,805 | 981,805 |
Other intangible assets, net | 1,341,140 | 1,349,797 |
Other assets | 52,322 | 10,633 |
Total assets | 2,572,592 | 2,579,746 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued expenses | 47,587 | 62,102 |
Accrued compensation and benefits | 43,388 | 53,905 |
Consideration payable for acquisition of business | 305,553 | 309,380 |
Deferred tax liability, net | 76,176 | 63,120 |
Other liabilities | 53,085 | 33,388 |
Long-term debt, net | 1,060,529 | 1,127,924 |
Total liabilities | 1,586,318 | 1,649,819 |
Stockholders' equity | ||
Common stock, $0.01 par value per share: 2022 - 600,000,000 shares authorized, 77,947,578 shares issued and 68,789,615 shares outstanding; 2021 - 600,000,000 shares authorized, 77,242,372 shares issued and 68,662,779 shares outstanding | 779 | 772 |
Additional paid-in capital | 678,812 | 673,572 |
Treasury stock, at cost: 2022 - 9,157,963 shares; 2021 - 8,579,593 shares | (171,954) | (153,200) |
Accumulated other comprehensive income | 22,171 | 5,972 |
Retained earnings | 456,466 | 402,811 |
Total stockholders' equity | 986,274 | 929,927 |
Total liabilities and stockholders' equity | $ 2,572,592 | $ 2,579,746 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 77,947,578 | 77,242,372 |
Common stock, shares outstanding | 68,789,615 | 68,662,779 |
Treasury stock, shares | 9,157,963 | 8,579,593 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | ||
Total revenue | $ 230,019 | $ 212,949 |
Expenses | ||
Personnel compensation and benefits | 64,901 | 59,006 |
Distribution and other asset-based expenses | 43,584 | 42,103 |
General and administrative | 12,762 | 13,310 |
Depreciation and amortization | 10,607 | 4,385 |
Change in value of consideration payable for acquisition of business | (3,500) | 2,500 |
Acquisition-related costs | 117 | (164) |
Restructuring and integration costs | 9 | 2,053 |
Total operating expenses | 128,480 | 123,193 |
Income from operations | 101,539 | 89,756 |
Other income (expense) | ||
Interest income and other income (expense) | (207) | 2,734 |
Interest expense and other financing costs | (9,233) | (6,845) |
Loss on debt extinguishment | (1,555) | (2,781) |
Total other income (expense), net | (10,995) | (6,892) |
Income before income taxes | 90,544 | 82,864 |
Income tax expense | (19,271) | (17,662) |
Net income | $ 71,273 | $ 65,202 |
Earnings per share of common stock | ||
Basic | $ 1.04 | $ 0.96 |
Diluted | $ 0.97 | $ 0.88 |
Weighted average number of shares outstanding | ||
Basic | 68,747 | 67,761 |
Diluted | 73,652 | 74,108 |
Dividends declared per share of common stock | $ 0.25 | $ 0.09 |
Investment Management Fees | ||
Revenue | ||
Total revenue | $ 179,465 | $ 160,284 |
Fund Administration and Distribution Fees | ||
Revenue | ||
Total revenue | $ 50,554 | $ 52,665 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 71,273 | $ 65,202 |
Other comprehensive income (loss), net of tax | ||
Net unrealized income on cash flow hedges | 16,276 | 10,773 |
Net unrealized loss on foreign currency translation | (77) | (2) |
Total other comprehensive income (loss), net of tax | 16,199 | 10,771 |
Comprehensive income | $ 87,472 | $ 75,973 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Common StockClass B | Treasury Stock | Treasury StockClass B | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balance at beginning of period at Dec. 31, 2020 | $ 707,541 | $ 194 | $ 548 | $ (47,844) | $ (47,080) | $ 647,602 | $ (7,460) | $ 161,581 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 44 | 44 | ||||||
Share conversion - Class B to A | 2 | (2) | ||||||
Repurchase of shares | (7,122) | (7,122) | ||||||
Shares withheld related to net settlement of equity awards | (10,916) | (10,916) | ||||||
Vesting of restricted share grants | 9 | (9) | ||||||
Exercise of options | 790 | 1 | 789 | |||||
Share-based compensation | 5,547 | 5,547 | ||||||
Dividends paid | (6,481) | (6,481) | ||||||
Net income | 65,202 | 65,202 | ||||||
Other comprehensive income | 10,771 | 10,771 | ||||||
Balance at end of period at Mar. 31, 2021 | 765,376 | 196 | $ 556 | (54,966) | $ (57,996) | 653,973 | 3,311 | 220,302 |
Balance at beginning of period at Dec. 31, 2021 | 929,927 | 772 | (153,200) | 673,572 | 5,972 | 402,811 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock | 69 | 69 | ||||||
Repurchase of shares | (9,437) | (9,437) | ||||||
Shares withheld related to net settlement of equity awards | (9,317) | (9,317) | ||||||
Vesting of restricted share grants | 5 | (5) | ||||||
Exercise of options | 1,233 | 2 | 1,231 | |||||
Share-based compensation | 3,945 | 3,945 | ||||||
Dividends paid | (17,618) | (17,618) | ||||||
Net income | 71,273 | 71,273 | ||||||
Other comprehensive income | 16,199 | 16,199 | ||||||
Balance at end of period at Mar. 31, 2022 | $ 986,274 | $ 779 | $ (171,954) | $ 678,812 | $ 22,171 | $ 456,466 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income | $ 71,273 | $ 65,202 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred income taxes | 7,894 | 6,269 | |
Depreciation and amortization | 10,607 | 4,385 | |
Deferred financing costs and derivative and accretion expense | 1,171 | 983 | |
Stock-based and deferred compensation | 4,792 | 9,471 | |
Change in fair value of contingent consideration obligations | (3,500) | 2,500 | |
Unrealized depreciation (appreciation) on investments | 452 | (2,720) | |
Noncash lease expense | 94 | ||
Loss on equity method investment | 57 | 92 | |
Loss on debt extinguishment | 1,555 | 2,781 | |
Changes in operating assets and liabilities: | |||
Receivables | 4,210 | (6,730) | |
Prepaid expenses | (1,260) | (695) | |
Other assets | (80) | ||
Accounts payable and accrued expenses | (8,819) | 13,573 | |
Accrued compensation and benefits | (13,487) | (14,987) | |
Other liabilities | (146) | (490) | |
Net cash provided by operating activities | 74,813 | 79,634 | |
Cash flows from investing activities | |||
Purchases of property and equipment | (1,176) | (393) | |
Purchases of investments | (2,365) | (2,626) | |
Sales of investments | 1,249 | 1,909 | |
Purchase of equity method investment | (1,500) | ||
Acquisition of business and assets, net of cash acquired | (327) | (30) | |
Net cash used in investing activities | (4,119) | (1,140) | |
Cash flows from financing activities | |||
Issuance of common stock | 1,302 | 834 | |
Repurchase of common stock | (10,193) | (7,661) | |
Payments of taxes related to net share settlement of equity awards | (5,373) | (7,614) | |
Repayment of long-term senior debt | (70,000) | (50,000) | |
Payment of dividends | (17,381) | (6,393) | |
Net cash used in financing activities | (101,645) | (70,834) | |
Effect of changes of foreign exchange rate on cash and cash equivalents | (32) | (18) | |
Net increase in cash and cash equivalents | (30,983) | 7,642 | |
Cash and cash equivalents, beginning of period | 69,533 | 22,744 | $ 22,744 |
Cash and cash equivalents, end of period | 38,550 | 30,386 | $ 69,533 |
Supplemental cash flow information | |||
Cash paid for interest | 7,074 | 8,096 | |
Cash paid for income taxes | 1,012 | $ 831 | |
Noncash items | |||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,991 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | Note 1. ORGANIZATION AND NATURE OF BUSINESS Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as the “Company,” “Victory,” or in the first-person notations of “we,” “us,” and “our”), was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Services, Inc. (“VCS”), formerly known as Victory Capital Advisers, Inc., which occurred on August 1, 2013. On February 12, 2018, the Company completed the initial public offering (the “IPO”) of its Class A common stock, which trades on the NASDAQ under the symbol “VCTR.” On and effective July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition” or “USAA AMCO”) of USAA Asset Management Company (“USAA Adviser”) and Victory Capital Transfer Agency, Inc. (“VCTA”), formally known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services. The USAA AMCO Acquisition includes USAA’s mutual fund and exchange traded fund (“ETF”) businesses and its 529 Education Savings Plan (collectively, the “USAA Mutual Fund Business”). Refer to Note 4, Acquisitions, for further details on the acquisition. VCM is a registered investment adviser managing assets through mutual funds, institutional separate accounts, separately managed account products, unified managed account products, third-party ETF model strategies, collective trust funds, private funds, undertakings for the collective investment in transferrable securities, other pooled vehicles and ETFs. VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds and the mutual fund series of the Victory Portfolios II (collectively, the “Victory Funds”), a family of open-end mutual funds, the VictoryShares (the Company’s ETF brand), as well as the USAA Mutual Fund Business, which includes the USAA Mutual Fund Trust, a family of open-end mutual funds (the “USAA Funds”). Additionally, VCM employs all of the Company’s United States investment professionals across its Franchises and Solutions, which are not separate legal entities. VCM’s wholly-owned subsidiaries include RS Investment Management (Singapore) Pte. Ltd., RS Investments (Hong Kong) Limited, RS Investments (UK) Limited, Victory Capital Digital Assets, LLC and NEC Pipeline LLC. VCS is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds, the USAA Funds and the USAA 529 Education Savings Plan as well as placement agent for certain private funds managed by VCM. VCTA is registered with the SEC as a transfer agent for the USAA Funds. On March 1, 2021, the Company completed the acquisition of THB Asset Management (“THB”), resulting in THB becoming the Company’s tenth investment franchise. THB manages responsible investment portfolios in the micro-cap, small-cap and mid-cap asset classes, including U.S., global and international strategies. At March 1, 2021, the THB AUM that was acquired totaled $547 million. Refer to Note 4, Acquisitions, for further details on the acquisition. On November 1, 2021, the Company completed the acquisition of New Energy Capital Partners (“NEC”), resulting in NEC becoming the Company’s eleventh investment franchise. Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies. At November 1, 2021, the NEC AUM that was acquired totaled $795 million. On December 31, 2021, the Company completed the acquisition of WestEnd Advisors, LLC (“WestEnd”), resulting in WestEnd becoming the Company’s twelfth investment franchise. Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy, all in tax efficient Separately Managed Account (SMA) structures. At December 31, 2021, the WestEnd AUM that was acquired totaled $19.3 billion. WestEnd is a wholly-owned subsidiary of Victory Capital Holdings, Inc. and is the Company’s second registered investment adviser. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. The Company owns a 15% equity interest in Alderwood Partners LLP (“Alderwood”). Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. The Company analyzed its investment in Alderwood under the voting interest model and determined that it did not have a controlling financial interest. The Company accounts for this investment using the equity method of accounting. The Company’s involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2021. Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption. Financial markets experienced significant declines during the first quarter of 2020, although certain markets, including domestic equity securities, experienced recoveries that more than offset the first quarter decline. While COVID-19 did not have a material adverse effect on our business, operations and financial results, the extent to which the pandemic impacts our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; and the effect on our ability to sell and provide our services. Lease Accounting Policy The Company’s leases consist primarily of real estate leases for office space. The Company determines if an arrangement is a lease at contract inception. A lease liability and a corresponding right of use ("ROU") asset are recognized on the commencement date for leases with terms longer than one year. Lease liabilities represent an obligation to make lease payments arising from a lease while ROU assets represent a right to use an underlying asset during the lease term. The lease liability is measured at the present value of the future lease payments over the lease term generally using the Company's incremental borrowing rate, which is determined through market sources. Lease components and non-lease components such as fixed maintenance and other costs are combined into one lease component and capitalized in lease liabilities. Variable lease payments, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease payments are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. A ROU asset is measured initially as the value of the lease liability plus initial direct costs and prepaid lease payments and less lease incentives received. The lease term includes periods covered by options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses on the unaudited Condensed Consolidated Statements of Operations. New Accounting Pronouncements Accounting Standards Adopted in 2022 • Leases: Effective January 1, 2022, the Company adopted ASU 2016‑02, “Leases (Topic 842)” (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840 (“ASC Topic 840”). The New Lease Standard required lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, “Leases Targeted Improvements,” which provided a package of practical expedients for entities to apply upon adoption. The Company adopted the New Lease Standard using the modified retrospective method of applying the new standard at the adoption date. We elected the package of practical expedients permitted under the transition guidance which allowed us to carry forward historical lease classification s for existing and expired leases and not reassess existing lease initial direct costs. In addition, we elected for all classes of underlying assets not to separate lease and non-lease components of a contract. We also elected the practical expedients to determine the likelihood of an extension or reduction in lease terms at commencement through adoption of the New Lease Standard and to not apply the New Lease Standard to leases with terms of one year or less. The adoption of the New Lease Standard resulted in the recognition of $18.7 million of operating lease ROU assets and the corresponding operating lease liabilities on the unaudited Condensed Consolidated Balance Sheet and the reclassification of $1.7 million of deferred rent liabilities relating to these leases, reducing operating lease ROU assets. The consolidated balance sheet prior to January 1, 2022 was not restated and continues to be reported under the Legacy ASC Topic 840, which did not require the recognition of operating lease ROU assets and liabilities. The expense recognition for operating leases and finance leases under the New Lease Standard is consistent with the Legacy ASC Topic 840. As a result, there is no significant impact to our results of operations, liquidity or debt covenant compliance under our current credit agreements. The following table presents the impact of adopting the New Lease Standard on our consolidated balance sheet (in thousands). Balance at December 31, 2021 New Lease Standard Balance at January 1, 2022 Total assets 2,579,746 17,031 2,596,777 Total liabilities 1,649,819 17,031 1,666,850 Total liabilities and stockholders' equity 2,579,746 17,031 2,596,777 The lease liability recorded for our operating leases on January 1, 2022 was based on the present value of the remaining minimum lease payments discounted using our secured incremental borrowing rate on that date for the average remaining term for our lease portfolio. Accounting Standards Adopted in 2021 • Internal-Use Software: Effective January 1, 2021, the Company adopted, on a prospective basis, Accounting Standards Update (“ASU”) 2018-15 (“ASU 2018-15”), "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. The adoption had no impact on the Company’s consolidated financial statements. • Subsequent Measurement of Goodwill: Effective January 1, 2021, the Company adopted, on a prospective basis, ASU 2017-04 (“ASU 2017-04”), “Intangibles – Goodwill and Other (Topic 350)” (“ASU 2017-04”) which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The adoption had no impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards • Reference Rate Reform: In March 2020, the Financial Accounting Standards Board (the “FASB”) issued ASU 2020-04, (“ASU 2020-04”), “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 contains optional practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this guidance are effective for all entities through December 31, 2022. The Company is currently evaluating the effect of this new standard on its consolidated financial statements. Currently, the Company elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt. The 2019 Credit Agreement provides for a mechanism for determining an alternative interest rate following the phase-out of LIBOR, which for the three-month rate is expected to occur following the publication of LIBOR rates on June 30, 2023. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities was January 1, 2020. As an emerging growth company (“EGC”) , the Company will adopt ASU 2016-13 on January 1, 2023 and is currently reviewing the effect of this new standard on its consolidated financial statements . |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | NOTE 3. REVENUE RECOGNITION In accordance with the revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Three Months Ended March 31, (in thousands) 2022 2021 Investment management fees Mutual funds (Victory/USAA Funds) $ 127,473 $ 127,746 ETFs (VictoryShares) 4,934 3,454 Separate accounts and other vehicles 48,298 29,541 Performance-based fees Mutual funds (USAA Funds) (903 ) (1,439 ) Separate accounts and other vehicles (337 ) 982 Total investment management fees $ 179,465 $ 160,284 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 28,384 $ 29,004 ETFs (VictoryShares) 521 441 Distribution fees Mutual funds (Victory/USAA Funds) 6,794 6,938 Transfer agent fees Mutual funds (USAA Funds) 14,855 16,282 Total fund administration and distribution fees $ 50,554 $ 52,665 Total revenue $ 230,019 $ 212,949 The following table presents balances of receivables: (in thousands) March 31, 2022 December 31, 2021 Customer receivables Mutual funds (Victory/USAA Funds) $ 61,759 $ 65,304 ETFs (VictoryShares) 2,036 1,934 Separate accounts and other vehicles 29,717 30,519 Receivables from contracts with customers 93,512 97,757 Non-customer receivables 201 6,548 Total receivables $ 93,713 $ 104,305 Revenue The Company’s revenue includes fees earned from providing; • investment management services, • fund administration services, • fund transfer agent services, and • fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable. The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service. Investment Management Fees Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are primarily paid in arrears on a monthly or quarterly basis. AUM represents the financial assets the Company manages for clients on either a discretionary or non-discretionary basis. In general, AUM reflects the valuation methodology that corresponds to the basis used for determining revenue such as net asset value for the Victory Funds, USAA Funds and certain other pooled funds and account market value for separate accounts. For the NEC Funds, AUM represents limited partner capital commitments during the commitment period of the fund. Following the earlier of the termination of the commitment period and the beginning of any commitment period for a successor fund, AUM generally represents, depending on the fund, the lesser of a) the net asset value of the fund and b) the aggregated adjusted cost basis of each unrealized portfolio investment or the limited partner capital commitments reduced by the amount of capital contributions used to make portfolio investments that have been disposed. Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change. The Company may waive certain fees for investment management services provided to the Victory Funds, USAA Funds, VictoryShares and other pooled investment vehicles and may subsidize certain share classes of the Victory Funds, USAA Funds, VictoryShares and other pooled investment vehicles to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, USAA Funds, VictoryShares and other pooled investment vehicles for waivers and expense reimbursements represent consideration payable to customers, which is recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, and no distinct services are received in exchange for these payments. Performance‑based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when and to the extent that it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fulcrum fee arrangements include a performance fee adjustment that increases or decreases the total investment management fee depending on whether the assets being managed experienced better or worse investment performance than the index specified in the customer’s contract. The performance fee adjustment arrangement with certain equity and fixed income USAA Funds is calculated monthly based on the investment performance of those funds relative to their specified benchmark indexes over the discrete performance period ending with that month. Fund Administration Fees The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds, USAA Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company’s fund administration f ee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds, USAA Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis. Fund Transfer Agent Fees The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the USAA Funds for which transfer agent services are provided or number of accounts in the USAA Funds. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company’s fund transfer agent fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations. The Company also receives fees for sub-transfer agency services under contracts with the Victory Funds for member class shares. Sub-transfer agency fees are recognized and recorded in a manner similar to fund transfer agent fees and are recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. We are the primary obligor under the transfer agency contracts with the USAA Funds and have the ability to select the service provider and establish pricing. As a result, fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis. Fund Distribution Fees The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds and USAA Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds and USAA Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption. Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration, the Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods, as it represents variable consideration and is recognized as uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the unaudited Condensed Consolidated Statements of Operations. The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and USAA Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s fund distribution fees are recorded gross of payments made to third parties. Costs Incurred to Obtain or Fulfill Customer Contracts The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contract with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions. Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in prepaid expenses in the unaudited Condensed Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit. Valuation of Assets Under Management The fair value of assets under management of the Victory Funds, USAA Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes. In limited circumstances, a quotation or price evaluation is not readily available from a pricing service. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored products. The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service. The fair value of Level III assets held by alternative investment vehicles is determined under the respective valuation policy for each fund. The valuation policies address the fact that substantially all the investments of a fund may not have readily available market information and therefore the fair value for these assets is typically determined using unobservable inputs and models that may include subjective assumptions. AUM reported by the Company for alternative investment vehicles may not necessarily equal the funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees. For the periods presented, less than one percent of the Company’s total AUM were Level III assets priced without a quoted market price, broker price quote or pricing service quotation. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. ACQUISITIONS USAA AMCO Acquisition Under the terms of the USAA AMCO Acquisition purchase agreement, a maximum of $150.0 million ($37.5 million per year) in contingent payments is payable to sellers based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related AUM in each of the first four years following the closing. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80% of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the closing date, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100% of that closing date revenue run-rate. Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement. The estimated fair value of contingent consideration payable to sellers is determined using the real options method. Revenue related to “non-managed money” assets is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the “non-managed money” revenue projected annual growth rate, the market price of risk adjustment for revenue, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk adjustment for revenue and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration. Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values: March 31, 2022 December 31, 2021 Non-managed money revenue average annual growth rate 1 % 5 % Market price of risk 6 % 6 % Revenue volatility 16 % 17 % Discount rate 5 % 3 % Years remaining in earn out period 1.6 1.9 Undiscounted estimated remaining earn out payments in millions $70- $75 $72 - $75 The estimated fair value of contingent consideration payable to sellers at March 31, 2022 was estimated at $66.0 million and is recorded in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. The decrease in the liability of $2.8 million from $68.8 million at December 31, 2021 was recorded in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. THB Acquisition On March 1, 2021, the Company completed the acquisition of certain assets of THB, including without limitation, (i) certain investment advisory and business contracts, (ii) certain books and records, (iii) the investment performance track record, and (iv) all business intellectual property and proprietary software, and hired the THB investment team. At March 1, 2021, the THB AUM that was acquired totaled $547 million. THB manages responsible investment portfolios in the micro-cap, small-cap and mid-cap asset classes, including U.S., global and international strategies. Because substantially all of the fair value of the acquired assets was concentrated in a single identifiable asset, the transaction was accounted for as an asset acquisition. Estimated acquisition costs of $0.6 million were allocated to a definite-lived customer relationship intangible asset. NEC Acquisition On November 1, 2021, VCM completed the acquisition of 100% of the equity interests in NEC. Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies through four active private closed-end funds (the “NEC Funds”). The estimated purchase price for the NEC Acquisition is $63.1 million, which includes $62.8 million in cash paid at closing, net of cash acquired, and $0.3 million of net working capital adjustments paid in cash to sellers in March 2022. Under the terms of the purchase agreement, the Company will pay up to an additional $35.0 million in cash based on net revenue growth over a six year period following the closing date. The purchase agreement specifies net revenue and payment targets for the 36-month, 48-month and 60-month periods beginning on November 30, 2021 (the “Start Date”) for the contingent payments. It also provides for advance payments and catch-up payments to be made based on actual NEC net management fee revenue, as defined in the purchase agreement, as measured at the end of each 12 month anniversary of the Start Date over a six year period. The maximum amount of contingent payments is due, less any contingent payments previously paid, upon the occurrence of certain specified events within a five year period following the Start Date. The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services. Accordingly, these contingent payments were excluded from the purchase price for the NEC Acquisition and a liability for these contingent payments was not recorded on the acquisition date. The Company records compensation expense over the estimated service period on a straight-line basis in an amount equal to the total contingent payments currently forecasted to be paid. In the first quarter of 2022, the Company recorded $1.8 million in NEC contingent payment compensation expense, which is included in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. At March 31, 2022, the liability for NEC contingent payments totaled $2.9 million, which is included in accrued compensation and benefits in the unaudited Condensed Consolidated Balance Sheets. The NEC Acquisition purchase price of $63.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The carried interests in the existing NEC Funds were not acquired in the transaction. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $41.0 million was recorded to goodwill in the unaudited Condensed Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from future earnings and cash flows from new funds expected to be launched on the NEC alternative investment platform. The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 118 Other receivables and prepaid expenses 60 Property and equipment 19 Other intangible assets (1) 23,700 Goodwill 41,032 Accounts payable and accrued expenses (1,780 ) Purchase price, net of cash acquired $ 63,149 (1) Includes $14.0 million for definite-lived customer relationships with a 6 year estimated useful life and $9.7 million for definite-lived investment advisory contracts with a 2 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets. As of March 31, 2022, the purchase price allocation for the NEC Acquisition is preliminary as all of the customary post-closing purchase adjustments have not been finalized. The final purchase price allocation may reflect changes to the provisional valuations for accounts payable and accrued expenses. Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date. WestEnd Acquisition On December 31, 2021, the Company completed the acquisition of 100% of the equity interests of WestEnd. Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy in Separately Managed Account (SMA) structures. The aggregate purchase price (the “WestEnd Purchase Price”) for the WestEnd Acquisition is estimated at $716.1 million, net of cash acquired, which includes (i) $475.8 million in cash paid at closing (the “WestEnd Closing”) net of cash acquired, plus the acquisition date value of contingent payments due to sellers of $239.7 million plus $0.6 million payable in cash for net working capital adjustments. The contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the WestEnd Closing, subject to certain “catch-up” provisions over a five and one half year period following the WestEnd Closing. A maximum of $320.0 million ($80.0 million per year) in earn-out payments may be paid. In connection with the closing of the WestEnd Acquisition, the Company entered into the Third Amendment to the 2019 Credit Agreement and obtained incremental term loans in an aggregate principal amount of $505.0 million to fund the acquisition and pay fees and expenses related to the transaction. Please refer to Note 9, Debt, for more information on the 2021 Incremental Term Loans. A total of $2.9 million of the cash paid at closing was placed in escrow, of which $0.5 million was available for purchase price adjustments and $2.4 million is available to compensate the Company for eligible claims under the purchase agreement’s indemnification provisions. In April 2022, the Company paid $0.6 million in cash to sellers for net working capital adjustments and the $0.5 million in escrow funds reserved for purchase price adjustments was released to sellers. The purchase price of $716.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the WestEnd Acquisition. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $536.0 million was recorded to goodwill in the unaudited Condensed Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from revenue synergies expected from combining WestEnd and Victory distribution platforms and sales efforts The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 4,560 Prepaid expenses and other assets 256 Property and equipment 2,011 Other intangible assets (1) 175,500 Goodwill 536,023 Accounts payable and accrued expenses (115 ) Accrued compensation and benefits (1,480 ) Other liabilities (693 ) Purchase price, net of cash acquired $ 716,062 (1) Includes $172.5 million for definite-lived customer relationship assets with a 10 year estimated useful life and $3.0 million for a definite-lived trade name asset with a 7 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets. As of March 31, 2022, the purchase price allocation for the WestEnd Acquisition is preliminary as all customary post-closing purchase adjustments have not been finalized. The final purchase price allocation may reflect changes to the provisional valuations for accounts payable and accrued expenses. Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date. The estimated fair value for contingent consideration payable to sellers is estimated using the real options method. WestEnd net revenue growth is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the WestEnd net revenue projected annual growth rate, the market price of risk adjustment for revenue, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk adjustment for revenue and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration. A maximum of $320.0 million ($80.0 million per year) is payable to sellers in contingent payments. The fair value of contingent consideration payable to sellers was estimated at $239.0 million at March 31, 2022, a decrease of $0.7 million from December 31, 2021. Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values: December 31, 2021 March 31, 2022 Acquisition Date Net revenue average annual growth rate 34 % 37 % Market price of risk adjustment for revenue (continuous) 11 % 11 % Revenue volatility 20 % 21 % Discount rate 5 % 4 % Years remaining in earn out period 5.6 5.8 Undiscounted estimated remaining earn out payments $ millions $280 - $320 $277 - $320 As the WestEnd Acquisition was effective at market close on December 31, 2021, the Company’s operating results for 2021 do not include WestEnd. Actual and Pro Forma Results for WestEnd WestEnd revenue for the three months ended March 31, 2022, was as follows: Unaudited Three Months Ended (in millions) March 31, 2022 Revenue $ 14.6 Net income attributable to WestEnd for the three months ended March 31, 2022 is impractical to determine as the Company does not prepare discrete financial information at that level. The following Unaudited Pro Forma Condensed Combined Statement of Operations is provided for illustrative purposes only and assumes that the acquisition occurred on January 1, 2020. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. The historical unaudited consolidated financial information of the Company and WestEnd have been adjusted to give effect to unaudited pro forma events that are directly attributable to the WestEnd Acquisition. These amounts have been calculated after adjusting the results of WestEnd and the Company to reflect additional interest expense, intangible asset amortization and income taxes that would have been expensed assuming the WestEnd Acquisition was consummated on January 1, 2020. Unaudited Three Months Ended (in thousands, except per share amount) March 31, 2021 Revenue $ 222,013 Net income 63,809 Earnings per share of common stock Basic $ 0.94 Diluted $ 0.86 Weighted average number of shares outstanding Basic 67,761 Diluted 74,108 Acquisition-Related Costs Costs related to acquisitions are summarized below and include legal and filing fees, advisory services, mutual fund proxy voting costs and other one-time expenses related to the transactions. These costs are included in acquisition-related costs in the unaudited Condensed Consolidated Statements of Operations. Acquisition-related costs Three Months Ended March 31, (in thousands) 2022 2021 NEC $ 29 $ — WestEnd $ 41 — Other 47 (164 ) Total acquisition-related costs $ 117 $ (164 ) Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. The following table presents the rollforward of restructuring and integration liabilities, which are recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, (in millions) 2022 2021 Liability balance, beginning of period $ 0.3 $ 1.0 Severance expense USAA AMCO Acquisition — 1.6 THB — 0.1 Integration costs USAA AMCO Acquisition — 0.4 Total restructuring and integration costs — 2.1 Settlement of liabilities (0.3 ) (1.7 ) Liability balance, end of period $ — $ 1.4 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the fair value hierarchy contains three levels: • Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. • Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured. • Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. The table below shows liabilities measured at fair value on a recurring basis. As of March 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Investments in proprietary funds $ 800 $ 800 $ - $ - Deferred compensation plan investments 31,588 31,588 - - Interest rate swap asset 29,234 $ - 29,234 $ - Total Financial Assets $ 61,622 $ 32,388 $ 29,234 $ - Financial Liabilities Contingent consideration arrangements (1) (305,000 ) - - (305,000 ) Total Financial Liabilities $ (305,000 ) $ - $ - $ (305,000 ) (1) Contingent consideration arrangement liabilities of $305.0 million plus $0.6 million of consideration payable to sellers for WestEnd acquisition net working capital adjustments equal $305.6 million in consideration payable for acquisition of business on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022. As of December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Investments in proprietary funds $ 912 $ 912 $ - $ - Deferred compensation plan investments 30,812 30,812 - - Interest rate swap asset 7,774 - 7,774 - Total Financial Assets $ 39,498 $ 31,724 $ 7,774 $ - Financial Liabilities Contingent consideration arrangements (1) (308,500 ) - - (308,500 ) Total Financial Liabilities $ (308,500 ) $ - $ - $ (308,500 ) (1) Contingent consideration arrangement liabilities of $308.5 million plus $0.3 million and $0.6 million of consideration payable to sellers for estimated net working capital adjustments for the NEC and WestEnd acquisitions, respectively, equal $309.4 million in consideration payable for acquisition of business on the unaudited Condensed Consolidated Balance Sheets as of December 31, 2021. Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets. The money market fund is included in cash and cash equivalents in the unaudited Condensed Consolidated Balance Sheets and proprietary fund investments and deferred compensation plan investments are included in investments in the unaudited Condensed Consolidated Balance Sheets. The interest rate swap (the “Swap”) asset and liability represent amounts receivable or payable under a Contingent consideration arrangements include the USAA AMCO earn-out payment liability and the WestEnd earn-out payment liability. Contingent consideration arrangements are included in consideration payable for acquisition of business in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 4, Acquisitions, for further details related to the contingent consideration arrangements. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk adjustment for revenue and discount rate. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the WestEnd Acquisition earn-out payment liability include the WestEnd net revenue projected growth rate, revenue volatility, market price of risk adjustment for revenue and discount rate. For both the USAA AMCO and WestEnd contingent consideration arrangements, an increase in the market price of risk adjustment for revenue, discount rate and revenue volatility results in a lower fair value for the earn-out payment liability, while an increase in the projected growth rate for the relevant revenue base results in a higher fair value for the earn-out payment liability. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the USAA AMCO Acquisition and WestEnd Acquisition. Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the unaudited Condensed Consolidated Statements of Operations. The following table presents the change in contingent consideration arrangement liabilities for the three months ended March 31, 2022. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2021 $ (308,500 ) USAA AMCO change in fair value measurement 2,800 WestEnd change in fair value measurement 700 Balance, March 31, 2022 $ (305,000 ) There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy from December 31, 2021 to March 31, 2022. The Company recognizes transfers at the end of the reporting period. The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt at March 31, 2022 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long ‑term debt . |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6. Related-Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the USAA Funds, the VictoryShares, collective trust funds that it sponsors (the “Victory Collective Funds”) and other sponsored pooled investment vehicles, to be related parties as a result of our advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCS have with the Victory Funds and the USAA Funds. The Company receives investment management, administrative and compliance fees in accordance with contracts that VCM has with the VictoryShares. We also receive investment management fees from the Victory Collective Funds, the NEC Funds and other pooled funds under VCM’s advisory contracts with these funds. In addition, VCTA receives fees for transfer agency services under contracts with the USAA Funds and sub-transfer agency services under contracts with the Victory Funds for member class shares. Director fees payable by the Company in cash and contributions made under the Director Deferred Compensation Plan for non-employee members of our Board of Directors are included in general and administrative expense in the unaudited Condensed Consolidated Statements of Operations. The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations. • Included in receivables (investment management fees) are amounts due from the Victory Funds, USAA Funds, VictoryShares, Victory Collective Funds and other pooled investment vehicles for investment management services. • Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds and USAA Funds for fund administration services and compliance services, amounts due from the VictoryShares for fund administration services, amounts due from the USAA Funds for transfer agent services, amounts due from the Victory Funds for sub-transfer agent services and amounts invoiced to the NEC Funds for costs paid by VCM. • Included in prepaid expenses are amounts paid by VCM that will be invoiced to the NEC Funds in the following period. • Included in revenue (investment management) are amounts earned for investment management services provided to the Victory Funds, the USAA Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles. • Included in revenue (fund administration and distribution fees) are amounts earned for fund administration and compliance services, transfer agent services and sub-transfer agent services. • Realized and unrealized gains and losses and dividend income on investments in the Victory Funds and USAA Funds classified as investments in proprietary funds and deferred compensation plan investments are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations. • Amounts due to the Victory Funds, USAA Funds, VictoryShares and other pooled investment vehicles for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers. (in thousands) March 31, 2022 December 31, 2021 Related party assets Receivables (investment management fees) $ 50,694 $ 53,256 Receivables (fund administration and distribution fees) 16,031 17,123 Prepaid expenses 569 304 Investments (investments in proprietary funds, fair value) 800 912 Investments (deferred compensation plan investments, fair value) 29,089 28,643 Total $ 97,183 $ 100,238 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 6,249 $ 6,695 Three Months Ended March 31, (in thousands) 2022 2021 Related party revenue Investment management fees $ 138,837 $ 133,294 Fund administration and distribution fees 50,554 52,665 Total $ 189,391 $ 185,959 Related party expense General and administrative $ 115 $ 130 Total $ 115 $ 130 Related party other (expense) income Interest income and other (expense) income $ (345 ) $ 2,675 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 7. Investments At March 31, 2022 and December 31, 2021, the Company had investments in proprietary funds and deferred compensation plan investments. Investments in proprietary funds consist entirely of seed capital investments in certain Victory Funds and USAA Funds. Deferred compensation plan investments are held under deferred compensation plans and include Victory Funds, USAA Funds and third-party mutual funds. Unrealized and realized gains and losses on investments in proprietary funds and deferred compensation plan investments are recorded in earnings as interest income and other income (expense). Investments in Proprietary Funds The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2022 $ 721 $ 130 $ (51 ) $ 800 As of December 31, 2021 769 169 (26 ) 912 Proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2022 $ 65 $ — $ (2 ) For the three months ended March 31, 2021 19 — — Deferred Compensation Plan Investments The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2022 $ 28,426 $ 4,493 $ (1,331 ) $ 31,588 As of December 31, 2021 27,174 4,266 (628 ) 30,812 Proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2022 $ 1,184 $ 103 $ (12 ) For the three months ended March 31, 2021 1,890 89 (28 ) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. Income Taxes The effective tax rate for the three months ended March 31, 2022 and 2021 differs from the United States federal statutory rate primarily as a result of state and local income taxes, excess tax benefits on share-based compensation and certain non-deductible expenses. For the three months ended March 31, 2022 and 2021, the provision for income taxes was $19.3 million and $17.7 million, respectively, and the effective tax rate for each period was 21.3%. No valuation allowance was recorded for deferred tax assets for the three months ended March 31, 2022 and 2021 . |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. Debt 2021 Debt Repricing On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the Second Amendment, the Company repriced the existing term loans (the “2020 Term Loans”) with replacement term loans in an aggregate principal amount of $755.7 million (the “Repriced Term Loans”). The Repriced Term Loans provide for substantially the same terms as the 2020 Term Loans, including the same maturity date of July 2026, except that the Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. After the Second Amendment, the applicable margin on LIBOR under the Repriced Term Loans is 2.25%. 2021 Incremental Term Loans On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $505.0 million and used the proceeds to fund the WestEnd Acquisition and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans mature in December 2028 and bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. Original issue discount was $2.5 million for the 2021 Incremental Term Loans. The Company incurred a total of $9.1 million of other third party costs related to the 2021 Incremental Term Loans, which were recorded as term loan debt issuance costs. The following table presents the components of long-term debt in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. (in thousands) March 31, 2022 December 31, 2021 Effective Interest Rate as of March 31, 2022 Term Loans Due July 2026, 2.47% interest rate, resets April 6, 2022 $ 646,239 $ 646,239 2.86% Due December 2028, 3.26% interest rate, reset March 31, 2022 435,000 505,000 3.58% Term loan principal outstanding 1,081,239 1,151,239 Unamortized debt issuance costs (14,496 ) (16,436 ) Unamortized debt discount (6,214 ) (6,879 ) Long-term debt, net $ 1,060,529 $ 1,127,924 The Company elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt. The 2019 Credit Agreement provides for a mechanism for determining an alternative interest rate following the phase-out of LIBOR, which for the three-month rate is expected to occur following the publication of LIBOR rates on June 30, 2023. In addition, Repayments of outstanding term loans under the 2019 Credit Agreement totaled $70.0 million and $50.0 million for the three months ended March 31, 2022 and 2021, respectively. The Company recognized a $1.6 million loss on debt extinguishment in the three months ended March 31, 2022, due to repayments of term loan principal, which consisted of the write-off of $1.2 million and $0.4 million of unamortized debt issuance costs and debt discount, respectively. During the three months ended March 31, 2021, the Company recognized a net loss on debt extinguishment of $2.8 million due to repayments of term loan principal and execution of the Second Amendment, which consisted of the write-off of $1.8 million and $1.0 million of unamortized debt issuance costs and debt discount, respectively. The following table presents the components of interest expense and other financing costs on the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021. For the Three Months Ended March 31, (in thousands) 2022 2021 Interest expense $ 7,120 $ 4,929 Amortization of debt issuance costs 843 662 Amortization of debt discount 328 321 Interest rate swap expense 849 818 Other 93 115 Total $ 9,233 $ 6,845 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Equity | NOTE 10. Equity Shares Rollforward The following tables present the changes in the number of shares of Common Stock issued and repurchased (in thousands): Shares of Common Stock Issued Shares of Treasury Stock Balance, December 31, 2021 77,242 (8,580 ) Issuance of shares 3 — Repurchase of shares — (293 ) Vesting of restricted share grants 481 — Exercise of options 222 — Shares withheld related to net settlement of equity awards — (285 ) Balance, March 31, 2022 77,948 (9,158 ) Shares of Common Stock Issued Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2020 19,389 54,767 (3,183 ) (3,431 ) Issuance of shares 1 — — — Share conversion - Class B to A 221 (221 ) — — Repurchase of shares — — (287 ) — Vesting of restricted share grants — 953 — — Exercise of options — 109 — — Shares withheld related to net settlement of equity awards — — — (431 ) Balance, March 31, 2021 19,611 55,608 (3,470 ) (3,862 ) Share Repurchase Program In December 2021, the Company’s Board of Directors authorized a sixth share repurchase program whereby the Company may repurchase up to an additional $15.0 million of the Company’s Common Stock in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. The amount and timing of purchases under the share repurchase program authorized in December 2021 will depend on a number of factors, including the price and availability of the Company’s shares, trading volume, capital availability, Company performance and general economic and market conditions. The program can be suspended or discontinued at any time. The December 2021 share repurchase program took effect in January 2022, immediately upon the completion of the May 2021 share repurchase program, and expires when $15 million of shares are repurchased or December 31, 2022. During the three months ended March 31, 2022, the Company repurchased 292,570 shares of Common Stock at a total cost of $9.4 million Dividend Payments Dividends paid or payable for the three months ended March 31, 2022 totaled $17.6 million At March 31, 2022 and December 31, 2021, the amount of cash bonuses and distributions related to dividends previously declared on unvested and outstanding restricted share awards and stock options totaled $0.8 million and $1.0 million, respectively, which was not recorded as a liability as of the balance sheet date. A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | NOTE 11. Share‑Based Compensation During the three months ended March 31, 2022, the Company issued restricted stock awards for 514,223 shares of Common Stock, of which awards for 7,995 shares were fully vested on the grant date, awards for 345,069 shares vest over two years, awards for 3,108 shares vest over thirty-three months and 158,051 shares vest over three years. Stock option award and restricted stock award activity during the three months ended March 31, 2022 and 2021 was as follows: Shares Subject to Stock Option Awards Three Months Ended March 31, 2022 2021 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 $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 Forfeited 6.39 14.00 (206 ) 5.12 10.19 (69,989 ) Exercised 3.72 5.55 (222,057 ) 4.28 7.23 (109,237 ) Outstanding at end of period $ 3.95 $ 6.76 5,092,947 $ 3.89 $ 6.45 6,685,875 Vested $ 3.91 $ 6.63 4,888,331 $ 3.81 $ 6.20 6,254,734 Unvested 5.05 9.92 204,616 5.11 10.07 431,141 Restricted Stock Awards Three Months Ended March 31, 2022 2021 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 17.75 1,352,839 $ 14.99 2,827,008 Granted 32.19 514,223 26.49 231,568 Vested 17.07 (480,645 ) 14.61 (952,696 ) Forfeited 24.99 (438 ) 15.24 (47,301 ) Unvested at end of period $ 23.34 1,385,979 $ 16.45 2,058,579 Share-Based Compensation Expense The Company recorded $3.9 million and $5.5 million of share-based compensation expense during the three months ended March 31, 2022 and 2021, respectively, in personnel compensation and benefits in the unaudited Condensed Consolidated Statements of Operations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 12. Earnings Per Share The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, (in thousands except per share amounts) 2022 2021 Net income $ 71,273 $ 65,202 Shares: Basic 68,747 67,761 Plus 4,905 6,347 Diluted 73,652 74,108 Earnings per share Basic: $ 1.04 $ 0.96 Diluted: $ 0.97 $ 0.88 Outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive were de minimus in amount for the three months ended March 31, 2022. There were no outstanding instruments excluded from the computation of weighted average shares for diluted earnings per share because the effect would be anti-dilutive for the three months ended March 31, 2021. Holders of non-vested share-based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 13. Accumulated Other Comprehensive Income (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2022 and 2021. Cumulative Cash Flow Translation (in thousands) Hedges (a) Adjustment Total Balance, December 31, 2021 $ 5,895 $ 77 $ 5,972 Other comprehensive income (loss) before reclassification and tax 20,612 (102 ) 20,510 Tax impact (4,980 ) 25 (4,955 ) Reclassification adjustments, before tax 849 — 849 Tax impact (205 ) — (205 ) Net current period other comprehensive income (loss) 16,276 (77 ) 16,199 Balance, March 31, 2022 $ 22,171 $ — $ 22,171 Balance, December 31, 2020 $ (7,573 ) $ 113 $ (7,460 ) Other comprehensive income (loss) before reclassification and tax 13,414 (3 ) 13,411 Tax impact (3,260 ) 1 (3,259 ) Reclassification adjustments, before tax 818 — 818 Tax impact (199 ) — (199 ) Net current period other comprehensive income (loss) 10,773 (2 ) 10,771 Balance, March 31, 2021 $ 3,200 $ 111 $ 3,311 (a) Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 14. DERIVATIVES Interest Rate Swaps On March 27, 2020, the Company entered into the Swap to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Company does not purchase or hold any derivative instruments for trading or speculative purposes. Under the terms of the Swap, the Company pays interest at a fixed rate of interest on a quarterly basis and receives interest at the three-month LIBOR rate in effect for that quarter. The notional value, fixed rate of interest and expiration date of the Swap as of March 31, 2022 were $ 450 million – 0.965 % – July 1, 2026 . Refer to Note 5, Fair Value Measurements, for additional disclosures regarding fair value measurements. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap is assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. For the three months ended March 31, 2022 and since inception, the Swap was deemed to be highly effective. The Swap is designated as a cash flow hedge. Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss) (“AOCI(L)”), net of tax, to the extent the hedge is determined to be effective. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings. The amount payable to the Swap counterparty at March 31, 2022 of $0.8 million is recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets. All derivative instruments are recorded on the unaudited Condensed Consolidated Balance Sheets at fair value as an asset (if the derivative is in a gain position) or a liability (if the derivative is in a loss position). On March 31, 2022 and December 31, 2021, the Swap had a fair value of $29.2 million and $7.8 million and was recorded in other assets. The following table summarizes the classification of the Swap in the unaudited Condensed Consolidated Balance Sheets and the notional amount at March 31, 2022 and December 31, 2021 (in thousands): Balance Sheets Description March 31, 2022 December 31, 2021 Other assets Fair value of interest rate swap $ 29,234 $ 7,774 Notional amount 450,000 450,000 The following tables summarize the effects of the Swap in the unaudited Condensed Consolidated Statements of Operations and unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31 Statement of Operations Description 2022 2021 Interest expense and other financing costs Loss reclassified from AOCI(L) $ 849 $ 818 Three Months Ended March 31 Statements of Comprehensive Income Description 2022 2021 Other comprehensive income Income recognized in AOCI(L), net of tax $ 16,276 $ 10,773 |
Equity Method Investment
Equity Method Investment | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Equity Method Investment | NOTE 15. EQUITY METHOD INVESTMENT On September 20, 2020, the Company acquired, through a wholly owned subsidiary, a 15% interest voting share and income share in Alderwood and made a capital contribution to Alderwood of $1.5 million in cash. Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. On January 31, 2022, the Company signed an amendment to the Alderwood members’ agreement (“Alderwood Amendment”) and made an additional $1.5 million capital contribution to Alderwood. The Alderwood Amendment reduced the Company’s commitment to contribute additional capital to Alderwood from $4.5 million to $3.0 million. The Company also has commitments to contribute additional capital of $50.0 million to a private fund to be launched by Alderwood, subject to certain terms and conditions, including obtaining an agreed amount of aggregate legally binding commitments from investors in the private fund. The Company analyzed its investment in Alderwood under the voting interest model and determined that it does not have a controlling financial interest over Alderwood and should not consolidate under the voting interest model. Given the level of ownership interest in Alderwood, which is an English limited liability partnership, and the fact that Alderwood will maintain specific ownership accounts for investors, the Company accounts for its investment in Alderwood using the equity method of accounting. For each of the periods ended March 31, 2022 and 2021, losses from equity method investments recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations were $0.1 million. Equity method investments are recorded in other assets in the unaudited Condensed Consolidated Balance Sheets. At March 31, 2022 and December 31, 2021, the Company held an equity investment in Alderwood of $2.5 million and $1.1 million, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | NOTE 16. LEASES The Company determines if a contract is a lease at inception. We have leases primarily for office facilities and information technology equipment. All of our leases are classified as operating leases. Supplemental balance sheet information related to the Company’s operating leases as of March 31, 2022 was as follows (in thousands): March 31, 2022 Operating lease ROU assets (1) $ 18,899 Current portion of operating lease liabilities (2) 4,279 Noncurrent portion of operating lease liabilities (2) 16,397 Total operating lease liabilities $ 20,676 (1) ROU assets are recorded in other assets on the unaudited Condensed Consolidated Balance Sheets. (2) Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets. March 31, 2022 Weighted-average remaining lease term 5.1 years Weighted-average discount rate 3.9 % The components of lease expense and other lease information as of and during the three-month period ended March 31, 2022 are as follows (in thousands): March 31, 2022 Operating lease cost $ 1,365 Short-term lease cost 21 Variable lease cost 498 Gross lease cost $ 1,884 Sub-lease income (209 ) Net lease cost $ 1,675 Other lease information Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating leases $ 1,277 Our leases have remaining lease terms of 1 year to 10 years. These leases generally contain renewal options for periods ranging from two to five years Variable lease costs, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease costs are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. The following table summarizes the maturity of our operating lease liabilities as of March 31, 2022 (in thousands): Operating Leases 2022 $ 3,644 2023 5,269 2024 4,214 2025 3,859 2026 3,070 Thereafter 2,739 Total undiscounted lease payments 22,795 Less: imputed interest 2,119 Total lease liabilities $ 20,676 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17. SUBSEQUENT EVENTS Subsequent to March 31, 2022, the Company reduced outstanding debt on the 2021 Incremental Term Loans by $20.0 million . Subsequent to March 31, 2022, the Company’s Board of Directors approved a new common stock repurchase program authorizing the repurchase of up to $100 million of its common stock. Under the new program, which will commence immediately upon completion of the current program, the Company may purchase its shares from time to time until December 31, 2023 in privately negotiated transactions, through block trades, pursuant to open market purchases, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC. The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company's shares, trading volume, capital availability, Company performance and general economic and market conditions. The share repurchase program may be suspended or discontinued at any time. On May 5, 2022, the Company’s Board of Directors also approved a regular quarterly cash dividend of $0.25 per share. The dividend is payable on June 27, 2022, to shareholders of record on June 10, 2022. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete annual financial statements. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial condition, results of operations, and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries, after elimination of all intercompany balances and transactions. The Company owns a 15% equity interest in Alderwood Partners LLP (“Alderwood”). Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. The Company analyzed its investment in Alderwood under the voting interest model and determined that it did not have a controlling financial interest. The Company accounts for this investment using the equity method of accounting. The Company’s involvement with non-consolidated variable interest entities (“VIEs”) includes sponsored investment funds. For further discussion regarding VIEs, refer to Note 2, Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2021. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements and the notes. Actual results may ultimately differ materially from those estimates. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption. Financial markets experienced significant declines during the first quarter of 2020, although certain markets, including domestic equity securities, experienced recoveries that more than offset the first quarter decline. While COVID-19 did not have a material adverse effect on our business, operations and financial results, the extent to which the pandemic impacts our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; and the effect on our ability to sell and provide our services. |
Lease Accounting Policy | Lease Accounting Policy The Company’s leases consist primarily of real estate leases for office space. The Company determines if an arrangement is a lease at contract inception. A lease liability and a corresponding right of use ("ROU") asset are recognized on the commencement date for leases with terms longer than one year. Lease liabilities represent an obligation to make lease payments arising from a lease while ROU assets represent a right to use an underlying asset during the lease term. The lease liability is measured at the present value of the future lease payments over the lease term generally using the Company's incremental borrowing rate, which is determined through market sources. Lease components and non-lease components such as fixed maintenance and other costs are combined into one lease component and capitalized in lease liabilities. Variable lease payments, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease payments are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor. A ROU asset is measured initially as the value of the lease liability plus initial direct costs and prepaid lease payments and less lease incentives received. The lease term includes periods covered by options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses on the unaudited Condensed Consolidated Statements of Operations. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in 2022 • Leases: Effective January 1, 2022, the Company adopted ASU 2016‑02, “Leases (Topic 842)” (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840 (“ASC Topic 840”). The New Lease Standard required lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, “Leases Targeted Improvements,” which provided a package of practical expedients for entities to apply upon adoption. The Company adopted the New Lease Standard using the modified retrospective method of applying the new standard at the adoption date. We elected the package of practical expedients permitted under the transition guidance which allowed us to carry forward historical lease classification s for existing and expired leases and not reassess existing lease initial direct costs. In addition, we elected for all classes of underlying assets not to separate lease and non-lease components of a contract. We also elected the practical expedients to determine the likelihood of an extension or reduction in lease terms at commencement through adoption of the New Lease Standard and to not apply the New Lease Standard to leases with terms of one year or less. The adoption of the New Lease Standard resulted in the recognition of $18.7 million of operating lease ROU assets and the corresponding operating lease liabilities on the unaudited Condensed Consolidated Balance Sheet and the reclassification of $1.7 million of deferred rent liabilities relating to these leases, reducing operating lease ROU assets. The consolidated balance sheet prior to January 1, 2022 was not restated and continues to be reported under the Legacy ASC Topic 840, which did not require the recognition of operating lease ROU assets and liabilities. The expense recognition for operating leases and finance leases under the New Lease Standard is consistent with the Legacy ASC Topic 840. As a result, there is no significant impact to our results of operations, liquidity or debt covenant compliance under our current credit agreements. The following table presents the impact of adopting the New Lease Standard on our consolidated balance sheet (in thousands). Balance at December 31, 2021 New Lease Standard Balance at January 1, 2022 Total assets 2,579,746 17,031 2,596,777 Total liabilities 1,649,819 17,031 1,666,850 Total liabilities and stockholders' equity 2,579,746 17,031 2,596,777 The lease liability recorded for our operating leases on January 1, 2022 was based on the present value of the remaining minimum lease payments discounted using our secured incremental borrowing rate on that date for the average remaining term for our lease portfolio. Accounting Standards Adopted in 2021 • Internal-Use Software: Effective January 1, 2021, the Company adopted, on a prospective basis, Accounting Standards Update (“ASU”) 2018-15 (“ASU 2018-15”), "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. The adoption had no impact on the Company’s consolidated financial statements. • Subsequent Measurement of Goodwill: Effective January 1, 2021, the Company adopted, on a prospective basis, ASU 2017-04 (“ASU 2017-04”), “Intangibles – Goodwill and Other (Topic 350)” (“ASU 2017-04”) which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The adoption had no impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards • Reference Rate Reform: In March 2020, the Financial Accounting Standards Board (the “FASB”) issued ASU 2020-04, (“ASU 2020-04”), “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 contains optional practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this guidance are effective for all entities through December 31, 2022. The Company is currently evaluating the effect of this new standard on its consolidated financial statements. Currently, the Company elects to use the three-month LIBOR rate plus the margin on LIBOR required by the 2019 Credit Agreement to pay interest on its debt. The 2019 Credit Agreement provides for a mechanism for determining an alternative interest rate following the phase-out of LIBOR, which for the three-month rate is expected to occur following the publication of LIBOR rates on June 30, 2023. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities was January 1, 2020. As an emerging growth company (“EGC”) , the Company will adopt ASU 2016-13 on January 1, 2023 and is currently reviewing the effect of this new standard on its consolidated financial statements . |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Impact of Adopting New Lease Standard | The following table presents the impact of adopting the New Lease Standard on our consolidated balance sheet (in thousands). Balance at December 31, 2021 New Lease Standard Balance at January 1, 2022 Total assets 2,579,746 17,031 2,596,777 Total liabilities 1,649,819 17,031 1,666,850 Total liabilities and stockholders' equity 2,579,746 17,031 2,596,777 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type and Product | In accordance with the revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Three Months Ended March 31, (in thousands) 2022 2021 Investment management fees Mutual funds (Victory/USAA Funds) $ 127,473 $ 127,746 ETFs (VictoryShares) 4,934 3,454 Separate accounts and other vehicles 48,298 29,541 Performance-based fees Mutual funds (USAA Funds) (903 ) (1,439 ) Separate accounts and other vehicles (337 ) 982 Total investment management fees $ 179,465 $ 160,284 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 28,384 $ 29,004 ETFs (VictoryShares) 521 441 Distribution fees Mutual funds (Victory/USAA Funds) 6,794 6,938 Transfer agent fees Mutual funds (USAA Funds) 14,855 16,282 Total fund administration and distribution fees $ 50,554 $ 52,665 Total revenue $ 230,019 $ 212,949 |
Schedule of Balances of Receivables from Contracts with Customers | The following table presents balances of receivables: (in thousands) March 31, 2022 December 31, 2021 Customer receivables Mutual funds (Victory/USAA Funds) $ 61,759 $ 65,304 ETFs (VictoryShares) 2,036 1,934 Separate accounts and other vehicles 29,717 30,519 Receivables from contracts with customers 93,512 97,757 Non-customer receivables 201 6,548 Total receivables $ 93,713 $ 104,305 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Acquisition [Line Items] | |
Summary of Business Acquisition Related Cost | Acquisition-related costs Three Months Ended March 31, (in thousands) 2022 2021 NEC $ 29 $ — WestEnd $ 41 — Other 47 (164 ) Total acquisition-related costs $ 117 $ (164 ) |
Summary of Rollforward of Restructuring and Integration Liabilities | The following table presents the rollforward of restructuring and integration liabilities, which are recorded in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets, for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, (in millions) 2022 2021 Liability balance, beginning of period $ 0.3 $ 1.0 Severance expense USAA AMCO Acquisition — 1.6 THB — 0.1 Integration costs USAA AMCO Acquisition — 0.4 Total restructuring and integration costs — 2.1 Settlement of liabilities (0.3 ) (1.7 ) Liability balance, end of period $ — $ 1.4 |
USAA AMCO | |
Business Acquisition [Line Items] | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values: March 31, 2022 December 31, 2021 Non-managed money revenue average annual growth rate 1 % 5 % Market price of risk 6 % 6 % Revenue volatility 16 % 17 % Discount rate 5 % 3 % Years remaining in earn out period 1.6 1.9 Undiscounted estimated remaining earn out payments in millions $70- $75 $72 - $75 |
NEC Acquisition | |
Business Acquisition [Line Items] | |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 118 Other receivables and prepaid expenses 60 Property and equipment 19 Other intangible assets (1) 23,700 Goodwill 41,032 Accounts payable and accrued expenses (1,780 ) Purchase price, net of cash acquired $ 63,149 (1) Includes $14.0 million for definite-lived customer relationships with a 6 year estimated useful life and $9.7 million for definite-lived investment advisory contracts with a 2 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets. |
WestEnd Acquisition | |
Business Acquisition [Line Items] | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | A maximum of $320.0 million ($80.0 million per year) is payable to sellers in contingent payments. The fair value of contingent consideration payable to sellers was estimated at $239.0 million at March 31, 2022, a decrease of $0.7 million from December 31, 2021. Significant inputs to the valuation of contingent consideration payable to sellers as of March 31, 2022 and December 31, 2021 are as follows and are approximate values: December 31, 2021 March 31, 2022 Acquisition Date Net revenue average annual growth rate 34 % 37 % Market price of risk adjustment for revenue (continuous) 11 % 11 % Revenue volatility 20 % 21 % Discount rate 5 % 4 % Years remaining in earn out period 5.6 5.8 Undiscounted estimated remaining earn out payments $ millions $280 - $320 $277 - $320 |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 4,560 Prepaid expenses and other assets 256 Property and equipment 2,011 Other intangible assets (1) 175,500 Goodwill 536,023 Accounts payable and accrued expenses (115 ) Accrued compensation and benefits (1,480 ) Other liabilities (693 ) Purchase price, net of cash acquired $ 716,062 (1) Includes $172.5 million for definite-lived customer relationship assets with a 10 year estimated useful life and $3.0 million for a definite-lived trade name asset with a 7 year estimated useful life, which are recorded in other intangible assets, net on the unaudited Condensed Consolidated Balance Sheets. |
Summary of Revenue | WestEnd revenue for the three months ended March 31, 2022, was as follows: Unaudited Three Months Ended (in millions) March 31, 2022 Revenue $ 14.6 |
Summary of Unaudited Pro Forma Information | Unaudited Three Months Ended (in thousands, except per share amount) March 31, 2021 Revenue $ 222,013 Net income 63,809 Earnings per share of common stock Basic $ 0.94 Diluted $ 0.86 Weighted average number of shares outstanding Basic 67,761 Diluted 74,108 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | The table below shows liabilities measured at fair value on a recurring basis. As of March 31, 2022 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Investments in proprietary funds $ 800 $ 800 $ - $ - Deferred compensation plan investments 31,588 31,588 - - Interest rate swap asset 29,234 $ - 29,234 $ - Total Financial Assets $ 61,622 $ 32,388 $ 29,234 $ - Financial Liabilities Contingent consideration arrangements (1) (305,000 ) - - (305,000 ) Total Financial Liabilities $ (305,000 ) $ - $ - $ (305,000 ) (1) Contingent consideration arrangement liabilities of $305.0 million plus $0.6 million of consideration payable to sellers for WestEnd acquisition net working capital adjustments equal $305.6 million in consideration payable for acquisition of business on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2022. As of December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Financial Assets Investments in proprietary funds $ 912 $ 912 $ - $ - Deferred compensation plan investments 30,812 30,812 - - Interest rate swap asset 7,774 - 7,774 - Total Financial Assets $ 39,498 $ 31,724 $ 7,774 $ - Financial Liabilities Contingent consideration arrangements (1) (308,500 ) - - (308,500 ) Total Financial Liabilities $ (308,500 ) $ - $ - $ (308,500 ) (1) Contingent consideration arrangement liabilities of $308.5 million plus $0.3 million and $0.6 million of consideration payable to sellers for estimated net working capital adjustments for the NEC and WestEnd acquisitions, respectively, equal $309.4 million in consideration payable for acquisition of business on the unaudited Condensed Consolidated Balance Sheets as of December 31, 2021. |
Summary of Change in Contingent Consideration Arrangement Liabilities | The following table presents the change in contingent consideration arrangement liabilities for the three months ended March 31, 2022. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2021 $ (308,500 ) USAA AMCO change in fair value measurement 2,800 WestEnd change in fair value measurement 700 Balance, March 31, 2022 $ (305,000 ) |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Related-Party Transactions | (in thousands) March 31, 2022 December 31, 2021 Related party assets Receivables (investment management fees) $ 50,694 $ 53,256 Receivables (fund administration and distribution fees) 16,031 17,123 Prepaid expenses 569 304 Investments (investments in proprietary funds, fair value) 800 912 Investments (deferred compensation plan investments, fair value) 29,089 28,643 Total $ 97,183 $ 100,238 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 6,249 $ 6,695 Three Months Ended March 31, (in thousands) 2022 2021 Related party revenue Investment management fees $ 138,837 $ 133,294 Fund administration and distribution fees 50,554 52,665 Total $ 189,391 $ 185,959 Related party expense General and administrative $ 115 $ 130 Total $ 115 $ 130 Related party other (expense) income Interest income and other (expense) income $ (345 ) $ 2,675 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Proprietary Funds | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Investments in Proprietary Funds | The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2022 $ 721 $ 130 $ (51 ) $ 800 As of December 31, 2021 769 169 (26 ) 912 |
Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized | Proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2022 $ 65 $ — $ (2 ) For the three months ended March 31, 2021 19 — — |
Deferred Compensation Plan Investments | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Deferred Compensation Plan Investments | The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of March 31, 2022 $ 28,426 $ 4,493 $ (1,331 ) $ 31,588 As of December 31, 2021 27,174 4,266 (628 ) 30,812 |
Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized | Proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the three months ended March 31, 2022 and 2021 are as follows: Sale Realized (in thousands) Proceeds Gains (Losses) For the three months ended March 31, 2022 $ 1,184 $ 103 $ (12 ) For the three months ended March 31, 2021 1,890 89 (28 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | (in thousands) March 31, 2022 December 31, 2021 Effective Interest Rate as of March 31, 2022 Term Loans Due July 2026, 2.47% interest rate, resets April 6, 2022 $ 646,239 $ 646,239 2.86% Due December 2028, 3.26% interest rate, reset March 31, 2022 435,000 505,000 3.58% Term loan principal outstanding 1,081,239 1,151,239 Unamortized debt issuance costs (14,496 ) (16,436 ) Unamortized debt discount (6,214 ) (6,879 ) Long-term debt, net $ 1,060,529 $ 1,127,924 |
Schedule of Components of Interest Expense and Other Financing Costs | For the Three Months Ended March 31, (in thousands) 2022 2021 Interest expense $ 7,120 $ 4,929 Amortization of debt issuance costs 843 662 Amortization of debt discount 328 321 Interest rate swap expense 849 818 Other 93 115 Total $ 9,233 $ 6,845 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased | The following tables present the changes in the number of shares of Common Stock issued and repurchased (in thousands): Shares of Common Stock Issued Shares of Treasury Stock Balance, December 31, 2021 77,242 (8,580 ) Issuance of shares 3 — Repurchase of shares — (293 ) Vesting of restricted share grants 481 — Exercise of options 222 — Shares withheld related to net settlement of equity awards — (285 ) Balance, March 31, 2022 77,948 (9,158 ) Shares of Common Stock Issued Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2020 19,389 54,767 (3,183 ) (3,431 ) Issuance of shares 1 — — — Share conversion - Class B to A 221 (221 ) — — Repurchase of shares — — (287 ) — Vesting of restricted share grants — 953 — — Exercise of options — 109 — — Shares withheld related to net settlement of equity awards — — — (431 ) Balance, March 31, 2021 19,611 55,608 (3,470 ) (3,862 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards | Stock option award and restricted stock award activity during the three months ended March 31, 2022 and 2021 was as follows: Shares Subject to Stock Option Awards Three Months Ended March 31, 2022 2021 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 $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 Forfeited 6.39 14.00 (206 ) 5.12 10.19 (69,989 ) Exercised 3.72 5.55 (222,057 ) 4.28 7.23 (109,237 ) Outstanding at end of period $ 3.95 $ 6.76 5,092,947 $ 3.89 $ 6.45 6,685,875 Vested $ 3.91 $ 6.63 4,888,331 $ 3.81 $ 6.20 6,254,734 Unvested 5.05 9.92 204,616 5.11 10.07 431,141 Restricted Stock Awards Three Months Ended March 31, 2022 2021 Avg wtd grant- Avg wtd grant- date fair value Units date fair value Units Unvested at beginning of period $ 17.75 1,352,839 $ 14.99 2,827,008 Granted 32.19 514,223 26.49 231,568 Vested 17.07 (480,645 ) 14.61 (952,696 ) Forfeited 24.99 (438 ) 15.24 (47,301 ) Unvested at end of period $ 23.34 1,385,979 $ 16.45 2,058,579 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the reconciliation of basic earnings per share and diluted earnings per share from net income for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, (in thousands except per share amounts) 2022 2021 Net income $ 71,273 $ 65,202 Shares: Basic 68,747 67,761 Plus 4,905 6,347 Diluted 73,652 74,108 Earnings per share Basic: $ 1.04 $ 0.96 Diluted: $ 0.97 $ 0.88 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table presents changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2022 and 2021. Cumulative Cash Flow Translation (in thousands) Hedges (a) Adjustment Total Balance, December 31, 2021 $ 5,895 $ 77 $ 5,972 Other comprehensive income (loss) before reclassification and tax 20,612 (102 ) 20,510 Tax impact (4,980 ) 25 (4,955 ) Reclassification adjustments, before tax 849 — 849 Tax impact (205 ) — (205 ) Net current period other comprehensive income (loss) 16,276 (77 ) 16,199 Balance, March 31, 2022 $ 22,171 $ — $ 22,171 Balance, December 31, 2020 $ (7,573 ) $ 113 $ (7,460 ) Other comprehensive income (loss) before reclassification and tax 13,414 (3 ) 13,411 Tax impact (3,260 ) 1 (3,259 ) Reclassification adjustments, before tax 818 — 818 Tax impact (199 ) — (199 ) Net current period other comprehensive income (loss) 10,773 (2 ) 10,771 Balance, March 31, 2021 $ 3,200 $ 111 $ 3,311 (a) Reclassifications out of accumulated other comprehensive income (loss) related to cash flow hedges are recorded in interest expense and other financing costs. |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Classification of Swap in Unaudited Condensed Consolidated Balance Sheets and Notional Amount | The following table summarizes the classification of the Swap in the unaudited Condensed Consolidated Balance Sheets and the notional amount at March 31, 2022 and December 31, 2021 (in thousands): Balance Sheets Description March 31, 2022 December 31, 2021 Other assets Fair value of interest rate swap $ 29,234 $ 7,774 Notional amount 450,000 450,000 |
Summary of Effects of Swap in Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | The following tables summarize the effects of the Swap in the unaudited Condensed Consolidated Statements of Operations and unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31 Statement of Operations Description 2022 2021 Interest expense and other financing costs Loss reclassified from AOCI(L) $ 849 $ 818 Three Months Ended March 31 Statements of Comprehensive Income Description 2022 2021 Other comprehensive income Income recognized in AOCI(L), net of tax $ 16,276 $ 10,773 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company’s operating leases as of March 31, 2022 was as follows (in thousands): March 31, 2022 Operating lease ROU assets (1) $ 18,899 Current portion of operating lease liabilities (2) 4,279 Noncurrent portion of operating lease liabilities (2) 16,397 Total operating lease liabilities $ 20,676 (1) ROU assets are recorded in other assets on the unaudited Condensed Consolidated Balance Sheets. (2) Current portion and noncurrent portion of operating lease liabilities are recorded in other liabilities on the unaudited Condensed Consolidated Balance Sheets. March 31, 2022 Weighted-average remaining lease term 5.1 years Weighted-average discount rate 3.9 % |
Schedule of Components of Lease Expense and Other Lease Information | The components of lease expense and other lease information as of and during the three-month period ended March 31, 2022 are as follows (in thousands): March 31, 2022 Operating lease cost $ 1,365 Short-term lease cost 21 Variable lease cost 498 Gross lease cost $ 1,884 Sub-lease income (209 ) Net lease cost $ 1,675 Other lease information Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating leases $ 1,277 |
Summary of Maturity of Operating Lease Liabilities | The following table summarizes the maturity of our operating lease liabilities as of March 31, 2022 (in thousands): Operating Leases 2022 $ 3,644 2023 5,269 2024 4,214 2025 3,859 2026 3,070 Thereafter 2,739 Total undiscounted lease payments 22,795 Less: imputed interest 2,119 Total lease liabilities $ 20,676 |
Organization and Nature of Bu_2
Organization and Nature of Business - Additional Information (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Mar. 01, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Subsidiary Sale Of Stock [Line Items] | |||||
Asset under management acquired | $ 327 | $ 30 | |||
THB Acquisition | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Asset under management acquired | $ 547,000 | ||||
NEC Acquisition | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Asset under management acquired | $ 795,000 | ||||
WestEnd Acquisition | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Asset under management acquired | $ 19,300,000 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Sep. 20, 2020 |
Significant Accounting Policies [Line Items] | |||
Operating lease ROU assets | $ 18,899 | $ 18,700 | |
Reclassification of deferred rent liabilities | $ 1,700 | ||
Accounting Standards Update 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2022 | ||
Accounting Standards Update 2018-15 | |||
Significant Accounting Policies [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | ||
Accounting Standards Update 2017-04 | |||
Significant Accounting Policies [Line Items] | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 | ||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | ||
Cerebellum | Alderwood Partners LLP | |||
Significant Accounting Policies [Line Items] | |||
Equity interest percentage | 15.00% |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Schedule of Impact of Adopting of New Lease Standard (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Significant Accounting Policies [Line Items] | |||
Total assets | $ 2,572,592 | $ 2,596,777 | $ 2,579,746 |
Total liabilities | 1,586,318 | 1,666,850 | 1,649,819 |
Total liabilities and stockholders' equity | $ 2,572,592 | 2,596,777 | $ 2,579,746 |
Accounting Standards Update 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Total assets | 17,031 | ||
Total liabilities | 17,031 | ||
Total liabilities and stockholders' equity | $ 17,031 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of revenue | ||
Total revenue | $ 230,019 | $ 212,949 |
Investment Management Fees | ||
Disaggregation of revenue | ||
Total revenue | 179,465 | 160,284 |
Investment Management Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 127,473 | 127,746 |
Investment Management Fees | ETF's | ||
Disaggregation of revenue | ||
Total revenue | 4,934 | 3,454 |
Investment Management Fees | Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Total revenue | 48,298 | 29,541 |
Performance-based Investment Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | (903) | (1,439) |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Total revenue | (337) | 982 |
Administration Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 28,384 | 29,004 |
Administration Fees | ETF's | ||
Disaggregation of revenue | ||
Total revenue | 521 | 441 |
Fund Distribution Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 6,794 | 6,938 |
Transfer Agent Fees | Mutual Funds | ||
Disaggregation of revenue | ||
Total revenue | 14,855 | 16,282 |
Fund Administration and Distribution Fees | ||
Disaggregation of revenue | ||
Total revenue | $ 50,554 | $ 52,665 |
Revenue - Schedule of Balances
Revenue - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 93,512 | $ 97,757 |
Non-customer receivables | 201 | 6,548 |
Total receivables | 93,713 | 104,305 |
Mutual Funds | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 61,759 | 65,304 |
ETF's | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 2,036 | 1,934 |
Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 29,717 | $ 30,519 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Class C | |
Disaggregation of revenue | |
Upfront sales commission percentage | 1.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Nov. 01, 2021 | Mar. 01, 2021 | Jul. 01, 2019 | Dec. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||||||
Contingent consideration liability | $ 309,380,000 | $ 305,553,000 | $ 309,380,000 | ||||
Decrease in contingent consideration liability | 3,500,000 | $ (2,500,000) | |||||
Goodwill | 981,805,000 | 981,805,000 | $ 981,805,000 | ||||
USAA AMCO | |||||||
Business Acquisition [Line Items] | |||||||
Maximum aggregate contingent payment | $ 150,000,000 | 75,000,000 | |||||
Maximum annual contingent payment | $ 37,500,000 | $ 37,500,000 | |||||
Period of time over which contingent payments will be made | 4 years | ||||||
Contingent consideration threshold percentage | 80.00% | ||||||
Annual revenue percentage requirement to achieve the maximum contingent payment | 100.00% | ||||||
Years remaining in earn out period | 1 year 7 months 6 days | 1 year 10 months 24 days | |||||
Contingent consideration liability | 68,800,000 | $ 66,000,000 | $ 68,800,000 | ||||
Decrease in contingent consideration liability | 2,800,000 | ||||||
THB Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 547,000,000 | ||||||
THB Acquisition | Customer Relationship | |||||||
Business Acquisition [Line Items] | |||||||
Estimated acquisition costs allocated to definite- lived intangible asset | $ 600,000 | ||||||
NEC Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Contingent consideration liability | 2,900,000 | ||||||
Purchase price | $ 63,100,000 | ||||||
Business acquisition, acquired percentage | 100.00% | ||||||
Payments to acquire business | $ 62,800,000 | ||||||
Net working capital adjustments | 300,000 | 300,000 | |||||
Additional payments in cash to acquire business based on revenue growth | $ 35,000,000 | ||||||
Cash based on revenue growth period | 6 years | ||||||
Contingent payment period one | 36 months | ||||||
Contingent payment period two | 48 months | ||||||
Contingent payment period three | 60 months | ||||||
Contingent payment compensation expense | $ 1,800,000 | ||||||
Assets acquired and liabilities assumed based upon their estimated fair values | $ 63,100,000 | ||||||
Goodwill expected to be deductible for tax purposes | 41,000,000 | ||||||
Goodwill | $ 41,032,000 | ||||||
WestEnd Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Maximum aggregate contingent payment | 320,000,000 | 320,000,000 | |||||
Maximum annual contingent payment | $ 80,000,000 | ||||||
Period of time over which contingent payments will be made | 4 years | ||||||
Years remaining in earn out period | 5 years 9 months 18 days | 5 years 7 months 6 days | |||||
Contingent consideration liability | $ 239,700,000 | $ 239,000,000 | $ 239,700,000 | ||||
Decrease in contingent consideration liability | 700,000 | ||||||
Purchase price | $ 716,100,000 | ||||||
Business acquisition, acquired percentage | 100.00% | 100.00% | |||||
Payments to acquire business | $ 475,800,000 | ||||||
Net working capital adjustments | 600,000 | $ 600,000 | $ 600,000 | ||||
Cash payable for net working capital adjustments | $ 600,000 | 600,000 | |||||
Period of time over which contingent "catch-up" provisions payments will be made | 5 years 6 months | ||||||
Maximum aggregate earn-out payments | $ 320,000,000 | 320,000,000 | |||||
Maximum annual earn-out payments | 80,000,000 | ||||||
Cash paid at closing placed in escrow | 2,900,000 | 2,900,000 | |||||
Amount available for purchase price adjustments | 500,000 | 500,000 | |||||
Amount available to compensate for eligible claims under purchase agreement indemnification provisions | 2,400,000 | 2,400,000 | |||||
Escrow funds reserved | 500,000 | 500,000 | |||||
Goodwill | 536,023,000 | 536,023,000 | |||||
WestEnd Acquisition | Third Amendment to 2019 Credit Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate principal amount | $ 505,000,000 | $ 505,000,000 |
Acquisitions - Summary of Signi
Acquisitions - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
USAA AMCO | |||
Business Acquisition [Line Items] | |||
Non-managed money revenue average annual growth rate | 1.00% | 5.00% | |
Market price of risk | 6.00% | 6.00% | |
Revenue volatility | 16.00% | 17.00% | |
Discount rate | 5.00% | 3.00% | |
Years remaining in earn out period | 1 year 7 months 6 days | 1 year 10 months 24 days | |
USAA AMCO | Minimum | |||
Business Acquisition [Line Items] | |||
Undiscounted estimated remaining earn out payments in millions | $ 70 | $ 72 | |
USAA AMCO | Maximum | |||
Business Acquisition [Line Items] | |||
Undiscounted estimated remaining earn out payments in millions | $ 75 | $ 75 | |
WestEnd Acquisition | |||
Business Acquisition [Line Items] | |||
Net revenue average annual growth rate | 37.00% | 34.00% | |
Market price of risk | 11.00% | 11.00% | |
Revenue volatility | 21.00% | 20.00% | |
Discount rate | 4.00% | 5.00% | |
Years remaining in earn out period | 5 years 9 months 18 days | 5 years 7 months 6 days | |
WestEnd Acquisition | Minimum | |||
Business Acquisition [Line Items] | |||
Undiscounted estimated remaining earn out payments in millions | $ 277 | $ 280 | |
WestEnd Acquisition | Maximum | |||
Business Acquisition [Line Items] | |||
Undiscounted estimated remaining earn out payments in millions | $ 320 | $ 320 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Nov. 01, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 981,805 | $ 981,805 | |
NEC Acquisition | |||
Business Acquisition [Line Items] | |||
Investment management fees receivable | $ 118 | ||
Other receivables and prepaid expenses | 60 | ||
Property and equipment | 19 | ||
Other intangible assets (1) | 23,700 | ||
Goodwill | 41,032 | ||
Accounts payable and accrued expenses | (1,780) | ||
Purchase price, net of cash acquired | $ 63,149 | ||
WestEnd Acquisition | |||
Business Acquisition [Line Items] | |||
Investment management fees receivable | 4,560 | ||
Prepaid expenses and other assets | 256 | ||
Property and equipment | 2,011 | ||
Other intangible assets (1) | 175,500 | ||
Goodwill | 536,023 | ||
Accounts payable and accrued expenses | (115) | ||
Accrued compensation and benefits | (1,480) | ||
Other liabilities | (693) | ||
Purchase price, net of cash acquired | $ 716,062 |
Acquisitions - Summary of All_2
Acquisitions - Summary of Allocation of Purchase Price (Parenthetical) (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Dec. 31, 2021 |
NEC Acquisition | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 23,700 | |
NEC Acquisition | Customer Relationship | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 14,000 | |
other intangible asset estimated useful life | 6 years | |
NEC Acquisition | Investment Advisory Contracts | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 9,700 | |
other intangible asset estimated useful life | 2 years | |
WestEnd Acquisition | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 175,500 | |
WestEnd Acquisition | Customer Relationship | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 172,500 | |
other intangible asset estimated useful life | 10 years | |
WestEnd Acquisition | Trade Name | ||
Business Acquisition [Line Items] | ||
Other intangible assets, net | $ 3,000 | |
other intangible asset estimated useful life | 7 years |
Acquisitions - Summary of Reven
Acquisitions - Summary of Revenue (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
WestEnd Acquisition | |
Business Acquisition [Line Items] | |
Revenue | $ 14.6 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro Forma Information (Details) - WestEnd Acquisition $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Business Acquisition [Line Items] | |
Revenue | $ | $ 222,013 |
Net income | $ | $ 63,809 |
Basic | $ / shares | $ 0.94 |
Diluted | $ / shares | $ 0.86 |
Basic | shares | 67,761 |
Diluted | shares | 74,108 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisition Related Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 117 | $ (164) |
NEC Acquisition | ||
Business Acquisition [Line Items] | ||
Acquisition-related costs | 29 | |
WestEnd Acquisition | ||
Business Acquisition [Line Items] | ||
Acquisition-related costs | 41 | |
Other | ||
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 47 | $ (164) |
Acquisitions - Summary of Rollf
Acquisitions - Summary of Rollforward of Restructuring and Integration Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Rollforward of restructuring and integration liabilities | ||
Liability balance, beginning of period | $ 300 | $ 1,000 |
Restructuring and integration costs | 9 | 2,053 |
Settlement of liabilities | $ (300) | (1,700) |
Liability balance, end of period | 1,400 | |
USAA AMCO | ||
Rollforward of restructuring and integration liabilities | ||
Integration costs | 400 | |
Severance expense | USAA AMCO | ||
Rollforward of restructuring and integration liabilities | ||
Severance expense | 1,600 | |
Severance expense | THB Acquisition | ||
Rollforward of restructuring and integration liabilities | ||
Severance expense | $ 100 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financial Liabilities | ||
Contingent consideration arrangements | $ (305,553) | $ (309,380) |
Fair Value on Recurring Basis | ||
Financial Assets | ||
Investments in proprietary funds | 800 | 912 |
Deferred compensation plan investments | 31,588 | 30,812 |
Interest rate swap asset | 29,234 | 7,774 |
Total Financial Assets | 61,622 | 39,498 |
Financial Liabilities | ||
Contingent consideration arrangements | (305,000) | (308,500) |
Total Financial Liabilities | (305,000) | (308,500) |
Fair Value on Recurring Basis | Level 1 | ||
Financial Assets | ||
Investments in proprietary funds | 800 | 912 |
Deferred compensation plan investments | 31,588 | 30,812 |
Total Financial Assets | 32,388 | 31,724 |
Fair Value on Recurring Basis | Level 2 | ||
Financial Assets | ||
Interest rate swap asset | 29,234 | 7,774 |
Total Financial Assets | 29,234 | 7,774 |
Fair Value on Recurring Basis | Level 3 | ||
Financial Liabilities | ||
Contingent consideration arrangements | (305,000) | (308,500) |
Total Financial Liabilities | $ (305,000) | $ (308,500) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Consideration payable for acquisition of business | $ 309,380 | $ 305,553 | $ 309,380 | |
WestEnd Acquisition | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Net working capital adjustments | 600 | 600 | 600 | |
Consideration payable for acquisition of business | 239,700 | 239,000 | 239,700 | |
NEC Acquisition | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Net working capital adjustments | $ 300 | 300 | ||
Consideration payable for acquisition of business | 2,900 | |||
Contingent Consideration Liability | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Contingent consideration arrangement liabilities | $ 308,500 | $ 305,000 | $ 308,500 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 27, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfers between levels | $ 0 | $ 0 | |
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional amount | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 |
Rate of interest | 0.965% | 3.22% |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Change in Contingent Consideration Arrangement Liabilities (Details) - Contingent Consideration Liability $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Beginning balance | $ (308,500) |
Ending balance | (305,000) |
USAA AMCO | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Change in fair value measurement | 2,800 |
WestEnd | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Change in fair value measurement | $ 700 |
Related-Party Transactions - Su
Related-Party Transactions - Summary of Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related party revenue | |||
Total revenue | $ 230,019 | $ 212,949 | |
Investment Management Fees | |||
Related party revenue | |||
Total revenue | 179,465 | 160,284 | |
Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | 50,554 | 52,665 | |
VCH | |||
Related party assets | |||
Receivables (investment management fees) | 50,694 | $ 53,256 | |
Receivables (fund administration and distribution fees) | 16,031 | 17,123 | |
Prepaid expenses | 569 | 304 | |
Investments (investments in proprietary funds, fair value) | 800 | 912 | |
Deferred compensation plan investments | 29,089 | 28,643 | |
Total | 97,183 | 100,238 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 6,249 | $ 6,695 | |
Related party revenue | |||
Total revenue | 189,391 | 185,959 | |
Related party expense | |||
General and administrative | 115 | 130 | |
Total | 115 | 130 | |
Related party other (expense) income | |||
Interest income and other (expense) income | (345) | 2,675 | |
VCH | Investment Management Fees | |||
Related party revenue | |||
Total revenue | 138,837 | 133,294 | |
VCH | Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | $ 50,554 | $ 52,665 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments in Proprietary Funds (Details) - Proprietary Funds - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | $ 721 | $ 769 |
Gross Unrealized Gains | 130 | 169 |
Gross Unrealized (Losses) | (51) | (26) |
Investments in proprietary funds, at fair value | $ 800 | $ 912 |
Investments - Summary of Procee
Investments - Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Proceeds and realized gains and losses recognized | ||
Sales of investments | $ 1,249 | $ 1,909 |
Proprietary Funds | ||
Proceeds and realized gains and losses recognized | ||
Sales of investments | 65 | $ 19 |
Realized (Losses) | $ (2) |
Investments - Summary of Cost_2
Investments - Summary of Cost and Fair Value of Deferred Compensation Plan Investments (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 28,426 | $ 27,174 |
Gross Unrealized Gains | 4,493 | 4,266 |
Gross Unrealized (Losses) | (1,331) | (628) |
Trading securities, at fair value | $ 31,588 | $ 30,812 |
Investments - Summary of Proc_2
Investments - Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Proceeds and realized gains and losses recognized | ||
Sale Proceeds | $ 1,184 | $ 1,890 |
Realized Gains | 103 | 89 |
Realized (Losses) | $ (12) | $ (28) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 19,271,000 | $ 17,662,000 |
Federal income tax at U.S. statutory rate | 21.30% | 21.30% |
Valuation allowance, deferred tax assets | $ 0 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Feb. 18, 2021 | Jul. 01, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||||
Original issue discount | $ 6,214,000 | $ 6,879,000 | |||
Loss on debt extinguishment | 1,555,000 | $ 2,781,000 | |||
Unamortized debt issuance costs | 14,496,000 | $ 16,436,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowing | $ 0 | ||||
Repriced Term Loans | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 755,700,000 | ||||
Debt maturity date | 2026-07 | ||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. | ||||
Basis spread on variable rate, increase (decrease) | 0.25% | ||||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Base spread (as a percent) | 2.25% | ||||
2021 Incremental Term Loans | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 505,000,000 | ||||
Debt maturity date | 2028-12 | ||||
Debt instrument interest rate description | The 2021 Incremental Term Loans mature in December 2028 and bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. | ||||
Basis spread on variable rate, increase (decrease) | 0.50% | ||||
Original issue discount | $ 2,500,000 | ||||
Debt issuance costs, gross | $ 9,100,000 | ||||
2021 Incremental Term Loans | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Base spread (as a percent) | 2.25% | ||||
2021 Incremental Term Loans | Adjusted London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Base spread (as a percent) | 2.25% | ||||
2021 Incremental Term Loans | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Base spread (as a percent) | 1.25% | ||||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Maximum percentage of borrowings for revolving credit facility as a percent of total commitments | 35.00% | ||||
Maximum first lien leverage ratio on last day of quarter (as a percent) | 380.00% | ||||
Term Loans | |||||
Debt Instrument [Line Items] | |||||
Original issue discount | $ 400,000 | 1,000,000 | |||
Repayments of Debt | 70,000,000 | 50,000,000 | |||
Loss on debt extinguishment | 1,600,000 | 2,800,000 | |||
Unamortized debt issuance costs | $ 1,200,000 | $ 1,800,000 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (14,496) | $ (16,436) | |
Unamortized debt discount | (6,214) | (6,879) | |
Long-term debt, net | 1,060,529 | 1,127,924 | |
Term Loans | |||
Debt Instrument [Line Items] | |||
Principal outstanding | 1,081,239 | 1,151,239 | |
Unamortized debt issuance costs | (1,200) | $ (1,800) | |
Unamortized debt discount | (400) | $ (1,000) | |
Due July 2026, 2.47% interest rate, resets April 6, 2022 | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 646,239 | 646,239 | |
Effective interest rate (as a percent) | 2.86% | ||
Due December 2028, 3.26% interest rate, reset March 31, 2022 | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 435,000 | $ 505,000 | |
Effective interest rate (as a percent) | 3.58% |
Debt - Schedule of Components_2
Debt - Schedule of Components of Long-Term Debt (Parenthetical) (Details) | Mar. 31, 2022 | Dec. 31, 2021 |
Due July 2026, 2.47% interest rate, resets April 6, 2022 | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 2.47% | 2.47% |
Due December 2028, 3.26% interest rate, reset March 31, 2022 | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 3.26% | 3.26% |
Debt - Schedule of Components_3
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 7,120 | $ 4,929 |
Amortization of debt issuance costs | 843 | 662 |
Amortization of debt discount | 328 | 321 |
Interest rate swap expense | 849 | 818 |
Other | 93 | 115 |
Total | $ 9,233 | $ 6,845 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Common Stock | ||
Balance at beginning of period (in shares) | 77,242 | 19,389 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issuance of shares | 3 | 1 |
Share conversion - Class B to A | 221 | |
Vesting of restricted share grants | 481 | |
Exercise of options | 222 | |
Balance at end of period (in shares) | 77,948 | 19,611 |
Common Stock | Class B | ||
Balance at beginning of period (in shares) | 54,767 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Share conversion - Class B to A | (221) | |
Vesting of restricted share grants | 953 | |
Exercise of options | 109 | |
Balance at end of period (in shares) | 55,608 | |
Treasury Stock | ||
Balance at beginning of period (in shares) | (8,580) | (3,183) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Repurchase of shares | (293) | (287) |
Shares withheld related to net settlement of equity awards | (285) | |
Balance at end of period (in shares) | (9,158) | (3,470) |
Treasury Stock | Class B | ||
Balance at beginning of period (in shares) | (3,431) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares withheld related to net settlement of equity awards | (431) | |
Balance at end of period (in shares) | (3,862) |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 51 Months Ended |
Dec. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Class Of Stock [Line Items] | ||||
Authorized amount for share repurchase program | $ 15,000,000 | $ 15,000,000 | ||
Share repurchase program expiration period | Dec. 31, 2022 | |||
Number of shares acquired | 292,570 | 4,361,057 | ||
Average cost of acquired shares (in dollars per share) | $ 32.26 | $ 19.13 | ||
Cost of acquired shares | $ 9,400,000 | $ 83,400,000 | ||
Remaining authorized amount for share repurchase program | 6,600,000 | $ 6,600,000 | ||
Total dividends | 17,600,000 | |||
Dividends paid | 17,200,000 | |||
Special dividends paid | 400,000 | |||
Unvested And Outstanding Restricted Share Awards And Stock Options | ||||
Class Of Stock [Line Items] | ||||
Special dividends paid | $ 800,000 | $ 1,000,000 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 3.9 | $ 5.5 |
Restricted Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 514,223 | 231,568 |
Vested (in shares) | 480,645 | 952,696 |
Restricted Shares | Vest Over Two Years | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 345,069 | |
Vested (in shares) | 7,995 | |
Vesting period from grant date | 2 years | |
Restricted Shares | Vest Over Thirty Three Months | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 3,108 | |
Vesting period from grant date | 33 months | |
Restricted Shares | Vest Over Three Years | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of restricted shares granted | 158,051 | |
Vesting period from grant date | 3 years |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Options | ||
Avg wtd grant-date fair value | ||
Outstanding at beginning of period | $ 3.94 | $ 3.91 |
Forfeited | 6.39 | 5.12 |
Exercised | 3.72 | 4.28 |
Outstanding at end of period | 3.95 | 3.89 |
Vested | 3.91 | 3.81 |
Unvested | 5.05 | 5.11 |
Avg wtd exercise price | ||
Outstanding at beginning of period | 6.71 | 6.50 |
Forfeited | 14 | 10.19 |
Exercised | 5.55 | 7.23 |
Outstanding at end of period | 6.76 | 6.45 |
Vested | 6.63 | 6.20 |
Unvested | $ 9.92 | $ 10.07 |
Units | ||
Outstanding at beginning of period | 5,315,210 | 6,865,101 |
Forfeited | (206) | (69,989) |
Exercised | (222,057) | (109,237) |
Outstanding at end of period | 5,092,947 | 6,685,875 |
Vested | 4,888,331 | 6,254,734 |
Unvested | 204,616 | 431,141 |
Restricted Shares | ||
Avg wtd grant-date fair value | ||
Unvested at beginning of period | $ 17.75 | $ 14.99 |
Granted | 32.19 | 26.49 |
Vested | 17.07 | 14.61 |
Forfeited | 24.99 | 15.24 |
Unvested at end of period | $ 23.34 | $ 16.45 |
Units | ||
Unvested at beginning of period | 1,352,839 | 2,827,008 |
Granted | 514,223 | 231,568 |
Vested | (480,645) | (952,696) |
Forfeited | (438) | (47,301) |
Unvested at end of period | 1,385,979 | 2,058,579 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Reconciliation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net income | $ 71,273 | $ 65,202 |
Shares: | ||
Basic: Weighted average number of shares outstanding | 68,747 | 67,761 |
Plus: Incremental shares from assumed conversion of dilutive instruments | 4,905 | 6,347 |
Diluted: Weighted average number of shares outstanding | 73,652 | 74,108 |
Earnings per share | ||
Basic: | $ 1.04 | $ 0.96 |
Diluted: | $ 0.97 | $ 0.88 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2021shares | |
Earnings Per Share [Abstract] | |
Number of shares excluded from the computations of weighted average shares for diluted earnings per share because the effects would be anti dilutive | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | $ 929,927 | $ 707,541 |
Total other comprehensive income (loss), net of tax | 16,199 | 10,771 |
Balance at end of period | 986,274 | 765,376 |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | 5,895 | (7,573) |
Other comprehensive income (loss) before reclassification and tax | 20,612 | 13,414 |
Tax impact | (4,980) | (3,260) |
Reclassification adjustments, before tax | 849 | 818 |
Tax impact | (205) | (199) |
Total other comprehensive income (loss), net of tax | 16,276 | 10,773 |
Balance at end of period | 22,171 | 3,200 |
Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | 77 | 113 |
Other comprehensive income (loss) before reclassification and tax | (102) | (3) |
Tax impact | 25 | 1 |
Total other comprehensive income (loss), net of tax | (77) | (2) |
Balance at end of period | 111 | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at beginning of period | 5,972 | (7,460) |
Other comprehensive income (loss) before reclassification and tax | 20,510 | 13,411 |
Tax impact | (4,955) | (3,259) |
Reclassification adjustments, before tax | 849 | 818 |
Tax impact | (205) | (199) |
Total other comprehensive income (loss), net of tax | 16,199 | 10,771 |
Balance at end of period | $ 22,171 | $ 3,311 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Mar. 27, 2020 | |
Other Liabilities | |||
Derivative [Line Items] | |||
Amount payable to swap | $ 800,000 | ||
Other Assets | |||
Derivative [Line Items] | |||
Interest rate swap asset | 29,200,000 | $ 7,800,000 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amount | $ 450,000,000 | 450,000,000 | $ 450,000,000 |
Fixed interest rate (as a percent) | 0.965% | 3.22% | |
Expiration date of swap | Jul. 1, 2026 | ||
Interest Rate Swap | Other Assets | |||
Derivative [Line Items] | |||
Interest rate swap asset | $ 29,234,000 | $ 7,774,000 |
Derivatives - Summary of Classi
Derivatives - Summary of Classification of Swap in Unaudited Condensed Consolidated Balance Sheets and Notional Amount (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 27, 2020 |
Other Assets | |||
Derivative [Line Items] | |||
Fair value of interest rate swap | $ 29,200,000 | $ 7,800,000 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amount | 450,000,000 | 450,000,000 | $ 450,000,000 |
Interest Rate Swap | Other Assets | |||
Derivative [Line Items] | |||
Fair value of interest rate swap | $ 29,234,000 | $ 7,774,000 |
Derivatives - Summary of Effect
Derivatives - Summary of Effects of Swap in Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative [Line Items] | ||
Loss reclassified from AOCI(L) | $ 9,233 | $ 6,845 |
Income recognized in AOCI(L), net of tax | 16,276 | 10,773 |
Interest Rate Swap | Reclassified from AOCI(L) | Other Comprehensive Income | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Income recognized in AOCI(L), net of tax | 16,276 | 10,773 |
Interest Rate Swap | Interest Expense and Other Financing Costs | ||
Derivative [Line Items] | ||
Loss reclassified from AOCI(L) | $ 849 | $ 818 |
Equity Method Investment - Addi
Equity Method Investment - Additional Information (Details) - Cerebellum - USD ($) $ in Millions | Jan. 31, 2022 | Sep. 20, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Interest Income and Other Income (Expense) | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Gain (losses) from equity method investment | $ 0.1 | $ 0.1 | |||
Private Fund | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity method commitments to contribute additional capital | $ 50 | ||||
Alderwood Partners LLP | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Equity interest percentage | 15.00% | ||||
Equity method investment | $ 1.5 | $ 2.5 | $ 1.1 | ||
Additional capital contribution equity method investment | 1.5 | ||||
Equity method commitments to contribute additional capital | $ 3 | $ 4.5 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 18,899 | $ 18,700 |
Current portion of operating lease liabilities | 4,279 | |
Noncurrent portion of operating lease liabilities | 16,397 | |
Total operating lease liabilities | $ 20,676 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense and Other Lease Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 1,365 |
Short-term lease cost | 21 |
Variable lease cost | 498 |
Gross lease cost | 1,884 |
Sub-lease income | (209) |
Net lease cost | 1,675 |
Cash paid for amounts included in measurement of lease liabilities | |
Operating cash flows for operating leases | $ 1,277 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee Lease Description [Line Items] | ||
Operating Lease expenses | $ 1.9 | $ 1.8 |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Operating lease remaining lease terms | 1 year | |
Operating lease renewal options term | 2 years | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Operating lease remaining lease terms | 10 years | |
Operating lease renewal options term | 5 years |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Operating Leases | |
2022 | $ 3,644 |
2023 | 5,269 |
2024 | 4,214 |
2025 | 3,859 |
2026 | 3,070 |
Thereafter | 2,739 |
Total undiscounted lease payments | 22,795 |
Less: imputed interest | 2,119 |
Total lease liabilities | $ 20,676 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | May 05, 2022 | May 09, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Subsequent Event [Line Items] | ||||
Dividends declared per share of common stock | $ 0.25 | $ 0.09 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Dividends declared per share of common stock | $ 0.25 | |||
Dividends, date of declared | May 5, 2022 | |||
Dividends payable date | Jun. 27, 2022 | |||
Dividends payable, date of record | Jun. 10, 2022 | |||
Subsequent Event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Stock repurchase program, shares authorized | 100,000,000 | |||
Subsequent Event | 2021 Incremental Term Loans | ||||
Subsequent Event [Line Items] | ||||
Reduced outstanding debt | $ 20 |