Financial Performance - Revenue for Q3 2019 was $197.8 million, a decrease of 32.3% compared to $230.1 million in Q3 2018[204]. - Pre-tax income from continuing operations attributable to controlling interests increased to $43.4 million, up 32.9% from $10.5 million in the same period last year[204]. - Net income from continuing operations attributable to controlling interests was $75.4 million, a 21.5% increase from $53.9 million in Q3 2018[204]. - Total revenue for the nine months ended September 30, 2019 was $612.1 million, down from $713.7 million in 2018, reflecting a decrease of $101.6 million[234]. - The U.S. GAAP net income attributable to controlling interests for the three months ended September 30, 2019, was $75.4 million, compared to $54.0 million for the same period in 2018[295]. - Economic net income for the nine months ended September 30, 2019, was $117.6 million, compared to $154.2 million for the same period in 2018, a decline of 23.7%[360]. Assets Under Management (AUM) - Total assets under management (AUM) at the end of Q3 2019 were $216.8 billion, down from $237.7 billion in Q3 2018, a decrease of $20.9 billion[208]. - The average AUM of consolidated Affiliates was $216.8 billion, down from $235.0 billion in the previous period[220]. - U.S. equity assets under management totaled $62.9 billion, slightly up from $62.6 billion in December 2018[211]. - The ending balance for total assets was $216.8 billion, down from $237.7 billion in the previous period[218]. - The beginning balance for total assets under management was $225.0 billion, with a gross inflow of $4.6 billion and gross outflow of $(12.1) billion[227]. Management Fees and Expenses - Approximately 75% of management fees are based on average AUM, with the remainder based on period-end AUM or other methods[192]. - Management fees for the three months ended September 30, 2019 were $196.4 million, a decrease of $33.2 million from $229.6 million in the same period of 2018[234]. - Total expenses for the nine months ended September 30, 2019 were $445.6 million, down from $659.5 million in 2018, a decrease of $213.9 million[234]. - Compensation and benefits expense decreased by $220.0 million, or 39.8%, from $552.8 million in the first nine months of 2018 to $332.8 million in 2019[261]. - Cash variable compensation for the three months ended September 30, 2019 was $39.9 million, a decrease from $52.6 million in Q3 2018[257]. Economic Net Income (ENI) - Economic Net Income (ENI) is used as a key performance measure, differing from U.S. GAAP net income due to the exclusion of certain non-cash or non-recurring items[199]. - ENI revenue for Q3 2019 was $195.8 million, a decrease of 14.4% from $228.6 million in Q3 2018[301]. - Economic net income for the three months ended September 30, 2019, was $37.4 million, compared to $48.8 million in 2018, a decrease of 23.5%[320]. - ENI operating earnings for the three months ended September 30, 2019, were $68.0 million, down from $87.8 million in the same period of 2018, representing a decrease of 22.5%[313]. - The ENI operating margin for the three months ended September 30, 2019, was 34.7%, down from 38.4% in the same period of 2018[313]. Cash Flows and Financing - Net cash provided by operating activities decreased by $336.4 million, from $186.5 million in the nine months ended September 30, 2018, to $(149.9) million in the same period of 2019[356]. - Total borrowings and long-term debt as of September 30, 2019, amounted to $603.6 million, an increase from $393.3 million as of December 31, 2018[365]. - The company has a revolving credit facility of $450 million, with an initial drawdown of $210 million and a maturity date of August 22, 2022[366]. - The ratio of third-party borrowings to trailing twelve months Adjusted EBITDA was 2.3x as of September 30, 2019, with an interest coverage ratio of 8.2x[369]. - The company expects available cash and cash equivalents, along with financing, to be sufficient for operations and capital requirements for at least the next twelve months[364]. Market and Strategic Initiatives - The company underwent a strategic shift in segment reporting due to a change in the Chief Operating Decision Maker at the end of 2018[187][188]. - The company aims to increase the percentage of assets under management sourced from non-U.S. clients[226]. - The company expects continued focus on market expansion and new product development in the upcoming quarters[298]. - Forward-looking statements indicate anticipated growth in revenues and margins, subject to various risks and uncertainties[376].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36683 BRIGHTSPHERE Investment Group Inc. (Exact name of registrant as specified in its charter) Delaware 47-11 ...