FIRST QUARTER EARNINGS PRESENTATION April 26, 2024 George R. Aylward President and Chief Executive Officer Michael A. Angerthal Executive Vice President and Chief Financial Officer IMPORTANT DISCLOSURES This presentation contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of ...

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) This section provides an overview of Q1 2024 financial highlights, including GAAP and non-GAAP performance, key earnings metrics, sales, net flows, and assets under management [Q1 2024 Financial Highlights (Unaudited)](index=1&type=section&id=Q1%202024%20Financial%20Highlights%20%28Unaudited%29) Virtus Investment Partners reported Q1 2024 financial results, with GAAP and non-GAAP metrics showing revenue and adjusted operating income growth, while GAAP net income and diluted EPS declined year-over-year Q1 2024 Key Financial Metrics (Million USD, except per share data) | Metric | March 31, 2024 | March 31, 2023 | Y/Y Change | December 31, 2023 | Q/Q Change | | :---------------------------------------------------------- | :------------- | :------------- | :--------- | :---------------- | :--------- | | **U.S. GAAP Financial Metrics** | | | | | | | Revenue | $222.0 | $197.9 | 12 % | $214.6 | 3 % | | Operating Expenses | $189.7 | $169.3 | 12 % | $175.6 | 8 % | | Operating Income (Loss) | $32.3 | $28.6 | 13 % | $39.0 | (17 %) | | Operating Margin | 14.5 % | 14.4 % | | 18.2 % | | | Net Income (Loss) Attributable to Virtus Investment Partners, Inc. | $29.9 | $38.6 | (23 %) | $30.8 | (3 %) | | Diluted EPS | $4.10 | $5.21 | (21 %) | $4.21 | (3 %) | | **Non-GAAP Financial Metrics (1)** | | | | | | | Adjusted Revenue | $200.2 | $176.9 | 13 % | $193.4 | 4 % | | Adjusted Operating Expenses | $143.8 | $129.5 | 11 % | $129.5 | 11 % | | Adjusted Operating Income (Loss) | $56.4 | $47.4 | 19 % | $63.9 | (12 %) | | Adjusted Operating Margin | 28.2 % | 26.8 % | | 33.0 % | | | Adjusted Net Income (Loss) Attributable to Virtus Investment Partners, Inc. | $39.4 | $31.1 | 27 % | $44.8 | (12 %) | | Adjusted Diluted EPS | $5.41 | $4.20 | 29 % | $6.11 | (11 %) | [Earnings Summary](index=1&type=section&id=Earnings%20Summary) The company achieved diluted EPS of $4.10 and adjusted diluted EPS of $5.41 in Q1 2024, with total sales of $7.6 billion, net outflows of $1.2 billion, and AUM of $179.3 billion - Diluted EPS was **$4.10**; adjusted diluted EPS was **$5.41**[3](index=3&type=chunk) - Total sales reached **$7.6 billion**; net outflows were **$1.2 billion**; and assets under management (AUM) stood at **$179.3 billion**[3](index=3&type=chunk) [Assets Under Management and Asset Flows](index=2&type=section&id=Assets%20Under%20Management%20and%20Asset%20Flows) This section details the company's AUM and asset flows, including an overview of net flows, AUM breakdown by product and asset class, average management fees, and asset flows by product category [Overview of AUM and Net Flows](index=2&type=section&id=Overview%20of%20AUM%20and%20Net%20Flows) As of March 31, 2024, total AUM reached **$179.3 billion**, growing 4% quarter-over-quarter due to market performance and retail separate account net inflows, with total sales up 22% and significantly improved net outflows Assets Under Management and Asset Flows (Billion USD) | Metric | March 31, 2024 | March 31, 2023 | Y/Y Change | December 31, 2023 | Q/Q Change | | :------------------------- | :------------- | :------------- | :--------- | :---------------- | :--------- | | Total AUM at Period End | $179.3 | $154.8 | 16 % | $172.3 | 4 % | | Average Total AUM | $173.4 | $152.4 | 14 % | $162.7 | 7 % | | Total Sales | $7.6 | $6.2 | 22 % | $6.2 | 22 % | | Net Flows | ($1.2) | ($1.9) | (37 %) | ($3.8) | (68 %) | - As of March 31, 2024, total AUM was **$179.3 billion**, a **4% increase** from **$172.3 billion** on December 31, 2023, primarily driven by market performance and net inflows into retail separate accounts, partially offset by net outflows from institutional accounts and open-end funds[4](index=4&type=chunk) - Total sales increased **22% quarter-over-quarter** to **$7.6 billion**, with growth across all product categories, including institutional sales up **47% to $1.7 billion**, retail separate accounts up **12% to $2.4 billion**, and open-end funds up **18% to $3.5 billion**[5](index=5&type=chunk) - Net outflows improved from **($3.8 billion)** in the prior quarter to **($1.2 billion)**, with positive net inflows in retail separate accounts, ETFs, and global funds; institutional net outflows improved from **($2.2 billion)** to **($1.3 billion)**, and open-end fund net outflows significantly improved from **($2.0 billion)** to **($0.6 billion)**[6](index=6&type=chunk) [Assets Under Management - By Product and Asset Class](index=7&type=section&id=Assets%20Under%20Management%20-%20Product%20and%20Asset%20Class) At quarter-end, the company's AUM by product category showed growth in open-end funds, retail separate accounts, and institutional accounts, while by asset class, equity AUM significantly increased, with fixed income and alternative investments slightly decreasing End-of-Period AUM by Product Category (Million USD) | Product Category | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | | :------------------- | :------------- | :------------ | :----------------- | :---------------- | :------------- | | Open-End Funds | $53,865 | $56,828 | $54,145 | $56,062 | $57,818 | | Closed-End Funds | $10,358 | $10,166 | $9,472 | $10,026 | $10,064 | | Retail Separate Accounts | $37,397 | $38,992 | $38,665 | $43,202 | $46,816 | | Institutional Accounts | $53,229 | $62,330 | $60,257 | $62,969 | $64,613 | | **Total** | **$154,849** | **$168,316** | **$162,539** | **$172,259** | **$179,311** | End-of-Period AUM by Asset Class (Million USD) | Asset Class | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | | :------------------- | :------------- | :------------ | :----------------- | :---------------- | :------------- | | Equity | $87,511 | $91,211 | $87,984 | $96,703 | $103,501 | | Fixed Income | $36,596 | $38,361 | $37,352 | $37,192 | $37,037 | | Multi-Asset | $20,597 | $20,914 | $19,937 | $21,411 | $21,975 | | Alternative Investments | $10,145 | $17,830 | $17,266 | $16,953 | $16,798 | | **Total** | **$154,849** | **$168,316** | **$162,539** | **$172,259** | **$179,311** | [Assets Under Management - Average Management Fees Earned](index=8&type=section&id=Assets%20Under%20Management%20-%20Average%20Management%20Fees%20Earned) In Q1 2024, the average management fee rate for all products was **41.9 basis points**, a slight decrease from the prior quarter, with closed-end funds having the highest rate, institutional accounts the lowest, and a significant decline in institutional performance-related fees Average Management Fee Rates by Product Category (Basis Points) | Product Category | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | | :------------------- | :------------- | :------------ | :----------------- | :---------------- | :------------- | | Open-End Funds | 47.6 | 49.3 | 51.1 | 49.7 | 49.9 | | Closed-End Funds | 57.1 | 57.6 | 58.2 | 58.4 | 58.7 | | Retail Separate Accounts | 44.2 | 44.1 | 43.3 | 43.3 | 43.9 | | Institutional Accounts | 31.8 | 31.6 | 30.3 | 33.2 | 30.8 | | **All Products** | **42.0** | **42.2** | **42.0** | **42.6** | **41.9** | Performance-Related Fees (Basis Points) | Product Category | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | | :------------------- | :------------- | :------------ | :----------------- | :---------------- | :------------- | | Institutional Accounts | 0.2 | 0.2 | 0.4 | 2.2 | 0.3 | | **All Products** | **0.1** | **0.1** | **0.1** | **0.8** | **0.1** | [Assets Under Management - Asset Flows by Product](index=9&type=section&id=Assets%20Under%20Management%20-%20Asset%20Flows%20by%20Product) In Q1 2024, the company's total net outflows were **$1.238 billion**, a significant improvement from the prior quarter, with retail separate accounts achieving positive net inflows of **$678 million**, while open-end funds and institutional accounts remained in net outflow, though with reduced magnitudes Asset Flows by Product Category (Million USD) | Metric | Open-End Funds | Closed-End Funds | Retail Separate Accounts | Institutional Accounts | Total | | :----------------- | :------------- | :--------------- | :----------------------- | :--------------------- | :----------- | | Beginning Balance | $56,062 | $10,026 | $43,202 | $62,969 | $172,259 | | Inflows | $3,476 | $0 | $2,373 | $1,734 | $7,583 | | Outflows | ($4,104) | $0 | ($1,695) | ($3,022) | ($8,821) | | Net Flows | ($628) | $0 | $678 | ($1,288) | ($1,238) | | Market Performance | $2,560 | $239 | $2,936 | $3,001 | $8,736 | | Other | ($176) | ($201) | $0 | ($69) | ($446) | | Ending Balance | $57,818 | $10,064 | $46,816 | $64,613 | $179,311 | [Financial Performance (GAAP & Non-GAAP)](index=3&type=section&id=Financial%20Performance%20%28GAAP%20%26%20Non-GAAP%29) This section presents the company's Q1 2024 financial performance, detailing both GAAP and non-GAAP results, including revenue, operating income, expenses, and diluted EPS, highlighting key adjustments and drivers [GAAP Results](index=3&type=section&id=GAAP%20Results) In Q1 2024, GAAP operating income decreased **17% quarter-over-quarter** to **$32.3 million**, primarily due to revenue growth being offset by increased operating expenses, with diluted net EPS at **$4.10** including several non-recurring adjustments, and the effective tax rate falling to **19%** - Operating income was **$32.3 million**, a **17% decrease** from the prior quarter, as a **3% increase** in revenue (reflecting higher average AUM) was offset by an **8% increase** in operating expenses[8](index=8&type=chunk) - Diluted net EPS was **$4.10**, including fair value adjustments to minority interests in affiliates (**-$0.69**), amortization of early lease termination costs (**-$0.12**), and acquisition and integration costs (**-$0.11**), partially offset by realized and unrealized gains on investments (**+$0.76**)[9](index=9&type=chunk) - The effective tax rate decreased from **26%** in the prior quarter to **19%**, primarily reflecting changes in valuation allowances related to marketable securities[10](index=10&type=chunk) U.S. GAAP Condensed Consolidated Statements of Operations (Unaudited, Thousand USD, except per share data) | Metric | March 31, 2024 | March 31, 2023 | Y/Y Change | December 31, 2023 | Q/Q Change | | :---------------------------------------------------------- | :------------- | :------------- | :--------- | :---------------- | :--------- | | **Revenue** | | | | | | | Investment Management Fees | $188,360 | $164,478 | 15 % | $182,149 | 3 % | | Distribution and Service Fees | $14,030 | $14,153 | (1 %) | $13,535 | 4 % | | Administrative and Shareholder Service Fees | $18,678 | $18,359 | 2 % | $18,189 | 3 % | | Other Revenue and Fees | $974 | $884 | 10 % | $714 | 36 % | | **Total Revenue** | **$222,042** | **$197,874** | **12 %** | **$214,587** | **3 %** | | **Operating Expenses** | | | | | | | Employment Expenses | $115,163 | $98,614 | 17 % | $99,847 | 15 % | | Distribution and Other Asset-Based Expenses | $24,348 | $23,715 | 3 % | $23,470 | 4 % | | Other Operating Expenses | $31,375 | $30,730 | 2 % | $31,164 | 1 % | | Operating Expenses of Consolidated Investment Products | $690 | $700 | (1 %) | $2,611 | (74 %) | | Restructuring Expenses | $797 | — | N/M | $133 | 499 % | | Change in Fair Value of Contingent Consideration | — | — | N/M | $1,290 | (100 %) | | Depreciation Expense | $2,028 | $1,145 | 77 % | $1,670 | 21 % | | Amortization Expense | $15,335 | $14,391 | 7 % | $15,446 | (1 %) | | **Total Operating Expenses** | **$189,736** | **$169,295** | **12 %** | **$175,631** | **8 %** | | **Operating Income (Loss)** | **$32,306** | **$28,579** | **13 %** | **$38,956** | **(17 %)** | | **Other Income (Expense)** | | | | | | | Net Realized and Unrealized Gains (Losses) on Investments | $3,416 | $2,670 | 28 % | $4,056 | (16 %) | | Net Realized and Unrealized Gains (Losses) of Consolidated Investment Products | $1,535 | $2,596 | (41 %) | $449 | 242 % | | Net Other Income (Expense) | $550 | ($343) | N/M | $622 | (12 %) | | **Total Net Other Income (Expense)** | **$5,501** | **$4,923** | **12 %** | **$5,127** | **7 %** | | **Interest Income (Expense)** | | | | | | | Interest Expense | ($5,681) | ($5,005) | 14 % | ($5,987) | (5 %) | | Interest and Dividend Income | $3,469 | $3,238 | 7 % | $3,673 | (6 %) | | Interest and Dividend Income from Investments of Consolidated Investment Products | $51,115 | $46,814 | 9 % | $53,206 | (4 %) | | Interest Expense of Consolidated Investment Products | ($40,012) | ($35,203) | 14 % | ($43,182) | (7 %) | | **Total Net Interest Income (Expense)** | **$8,891** | **$9,844** | **(10 %)** | **$7,710** | **15 %** | | **Income (Loss) Before Income Taxes** | **$46,698** | **$43,346** | **8 %** | **$51,793** | **(10 %)** | | Income Tax Expense (Benefit) | $8,831 | $8,703 | 1 % | $13,294 | (34 %) | | **Net Income (Loss)** | **$37,867** | **$34,643** | **9 %** | **$38,499** | **(2 %)** | | Noncontrolling Interests | ($8,009) | $3,981 | N/M | ($7,665) | 4 % | | **Net Income (Loss) Attributable to Virtus Investment Partners, Inc.** | **$29,858** | **$38,624** | **(23 %)** | **$30,834** | **(3 %)** | | Basic EPS | $4.19 | $5.33 | (21 %) | $4.30 | (3 %) | | Diluted EPS | $4.10 | $5.21 | (21 %) | $4.21 | (3 %) | | Cash Dividends Declared Per Common Share | $1.90 | $1.65 | 15 % | $1.90 | — % | | Weighted Average Shares Outstanding - Basic | 7,119 | 7,245 | (2 %) | 7,178 | (1 %) | | Weighted Average Shares Outstanding - Diluted | 7,287 | 7,410 | (2 %) | 7,320 | — % | [Non-GAAP Results](index=3&type=section&id=Non-GAAP%20Results) In Q1 2024, adjusted revenue grew **4% quarter-over-quarter** to **$200.2 million**, driven by increased average AUM, but adjusted operating income and diluted EPS declined quarter-over-quarter due to seasonal employment expenses and higher variable incentive compensation - Adjusted revenue was **$200.2 million**, a **4% increase** from the prior quarter, primarily due to a **7% increase** in average AUM, partially offset by lower performance fees[11](index=11&type=chunk) - Adjusted employment expenses were **$111.6 million**, an increase from the prior quarter, primarily due to **$10.9 million** in seasonal expenses (mainly payroll taxes and benefits related to the timing of annual incentive payments) and higher variable incentive compensation[12](index=12&type=chunk) - Adjusted operating income was **$56.4 million**, with a related margin of **28.2%**, a decrease from the prior quarter, primarily due to seasonal employment expenses, partially offset by higher investment management fees and lower other operating expenses[13](index=13&type=chunk) - Adjusted diluted net EPS attributable to Virtus Investment Partners, Inc. was **$5.41**, an **11% decrease** from the prior quarter, primarily reflecting **$1.11 per share** in seasonal expenses, partially offset by increased adjusted revenue and lower adjusted other operating expenses[14](index=14&type=chunk) [Balance Sheet & Capital Management](index=4&type=section&id=Balance%20Sheet%20%26%20Capital%20Management) This section provides an overview of the company's balance sheet and capital management activities, including key asset and liability items, working capital, debt levels, and share repurchase activities [Select Balance Sheet Items (Unaudited)](index=4&type=section&id=Select%20Balance%20Sheet%20Items%20%28Unaudited%29) As of March 31, 2024, the company's cash and cash equivalents significantly decreased, but working capital grew quarter-over-quarter, total debt remained stable, and net debt substantially increased to **$134.2 million**, with **$5 million** in share repurchases during the quarter Select Balance Sheet Items (Million USD) | Metric | March 31, 2024 | March 31, 2023 | Y/Y Change | December 31, 2023 | Q/Q Change | | :-------------------------------------- | :------------- | :------------- | :--------- | :---------------- | :--------- | | Cash and Cash Equivalents | $123.9 | $213.4 | (42 %) | $239.6 | (48 %) | | Total Debt (1) | $258.1 | $260.9 | (1 %) | $258.8 | — % | | Contingent Consideration (2) | $66.7 | $101.2 | (34 %) | $90.9 | (27 %) | | Redeemable Noncontrolling Interests (3) | $80.0 | $88.2 | (9 %) | $74.2 | 8 % | | Total Equity Excluding Noncontrolling Interests | $871.7 | $837.9 | 4 % | $864.0 | 1 % | | Working Capital (4) | $123.4 | $208.3 | (41 %) | $109.1 | 13 % | | Net Debt (Cash) (5) | $134.2 | $47.5 | 183 % | $19.2 | N/M | - Working capital was **$123.4 million**, an increase from **$109.1 million** on December 31, 2023, as earnings exceeded capital returns[16](index=16&type=chunk) - During the quarter, the company repurchased **21,108 shares** for **$5.0 million** and net settled an additional **42,588 shares** for **$9.9 million**[17](index=17&type=chunk) - As of March 31, 2024, net debt was **$134.2 million**, or **0.4x** EBITDA[17](index=17&type=chunk) [Non-GAAP Information and Reconciliations](index=10&type=section&id=Non-GAAP%20Information%20and%20Reconciliations) This section provides comprehensive non-GAAP information, including detailed reconciliation tables from GAAP to non-GAAP metrics, explanatory notes for each adjustment, and clear definitions of the non-GAAP measures used [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliation tables adjusting U.S. GAAP financial metrics to non-GAAP measures, including revenue, operating expenses, operating income, income before taxes, income tax expense, and net income attributable to Virtus Investment Partners, Inc., aiming to offer a clearer view of the company's core investment management operations Revenue Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :-------------------------------------- | :------------- | :------------- | :---------------- | | Total Revenue, GAAP | $222,042 | $197,874 | $214,587 | | Revenue of Consolidated Investment Products (1) | $2,544 | $2,750 | $2,258 | | Investment Management Fees (2) | ($10,316) | ($9,561) | ($9,933) | | Distribution and Service Fees (2) | ($14,032) | ($14,154) | ($13,537) | | **Adjusted Total Revenue** | **$200,238** | **$176,909** | **$193,375** | Operating Expenses Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :-------------------------------------- | :------------- | :------------- | :---------------- | | Total Operating Expenses, GAAP | $189,736 | $169,295 | $175,631 | | Expenses of Consolidated Investment Products (1) | ($690) | ($700) | ($2,611) | | Distribution and Other Asset-Based Expenses (3) | ($24,348) | ($23,715) | ($23,470) | | Amortization of Intangible Assets (4) | ($15,335) | ($14,391) | ($15,446) | | Restructuring Expenses (5) | ($797) | — | ($133) | | Deferred Compensation and Related Investments (6) | ($1,249) | ($572) | ($925) | | Acquisition and Integration Costs (7) | ($1,042) | ($965) | ($3,050) | | Other (8) | ($2,444) | $592 | ($472) | | **Adjusted Total Operating Expenses** | **$143,831** | **$129,544** | **$129,524** | Operating Income (Loss) Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :-------------------------------------- | :------------- | :------------- | :---------------- | | Operating Income (Loss), GAAP | $32,306 | $28,579 | $38,956 | | Consolidated Investment Products (Gains) Losses (1) | $3,234 | $3,450 | $4,869 | | Amortization of Intangible Assets (4) | $15,335 | $14,391 | $15,446 | | Restructuring Expenses (5) | $797 | — | $133 | | Deferred Compensation and Related Investments (6) | $1,249 | $572 | $925 | | Acquisition and Integration Costs (7) | $1,042 | $965 | $3,050 | | Other (8) | $2,444 | ($592) | $472 | | **Adjusted Operating Income (Loss)** | **$56,407** | **$47,365** | **$63,851** | Income (Loss) Before Income Taxes Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :-------------------------------------- | :------------- | :------------- | :---------------- | | Income (Loss) Before Income Taxes, GAAP | $46,698 | $43,346 | $51,793 | | Consolidated Investment Products (Gains) Losses (1) | ($1,819) | ($1,412) | ($1,316) | | Amortization of Intangible Assets (4) | $15,335 | $14,391 | $15,446 | | Restructuring Expenses (5) | $797 | — | $133 | | Deferred Compensation and Related Investments (6) | ($400) | ($344) | ($783) | | Acquisition and Integration Costs (7) | $1,042 | $965 | $3,050 | | Other (8) | $2,444 | ($592) | $472 | | Seed Capital and CLO Investment (Gains) Losses (9) | ($7,333) | ($10,140) | ($5,078) | | **Adjusted Income (Loss) Before Income Taxes** | **$56,764** | **$46,214** | **$63,717** | Income Tax Expense (Benefit) Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :-------------------------------------- | :------------- | :------------- | :---------------- | | Income Tax Expense (Benefit), GAAP | $8,831 | $8,703 | $13,294 | | Tax Impact: | | | | | Amortization of Intangible Assets (4) | $3,993 | $4,025 | $4,202 | | Restructuring Expenses (5) | $208 | — | $36 | | Deferred Compensation and Related Investments (6) | ($104) | ($96) | ($213) | | Acquisition and Integration Costs (7) | $271 | $270 | $830 | | Other (8) | $1,056 | $1,745 | ($11) | | Seed Capital and CLO Investment (Gains) Losses (9) | $529 | ($1,722) | ($801) | | **Adjusted Income Tax Expense (Benefit)** | **$14,784** | **$12,925** | **$17,337** | Net Income (Loss) Attributable to Virtus Investment Partners, Inc. Reconciliation (Thousand USD) | Metric | March 31, 2024 | March 31, 2023 | December 31, 2023 | | :---------------------------------------------------------- | :------------- | :------------- | :---------------- | | Net Income (Loss) Attributable to Virtus Investment Partners, Inc., GAAP | $29,858 | $38,624 | $30,834 | | Amortization of Intangible Assets, Net of Tax (4) | $10,863 | $9,687 | $10,764 | | Restructuring Expenses, Net of Tax (5) | $589 | — | $97 | | Deferred Compensation and Related Investments (6) | ($296) | ($248) | ($570) | | Acquisition and Integration Costs, Net of Tax (7) | $771 | $695 | $2,220 | | Other, Net of Tax (8) | $5,476 | ($9,236) | $5,689 | | Seed Capital and CLO Investment (Gains) Losses, Net of Tax (9) | ($7,862) | ($8,418) | ($4,277) | | **Adjusted Net Income (Loss) Attributable to Virtus Investment Partners, Inc.** | **$39,399** | **$31,104** | **$44,757** | [Notes to Reconciliations](index=12&type=section&id=Notes%20to%20Reconciliations) This section details the reclassifications and adjustments in non-GAAP reconciliations, including consolidated investment products, investment management/distribution service fees, intangible asset amortization, restructuring, deferred compensation, acquisition and integration costs, and seed capital and CLO investment gains/losses, aiming for a clearer view of operating performance - Consolidated Investment Products: Excludes revenues and expenses from the operating activities of mutual funds and CLOs consolidated in the financial statements to reflect the company's operating results from managing third-party client assets[31](index=31&type=chunk) - Investment Management/Distribution and Service Fees: Deducts fees paid to third-party intermediaries who own retail client relationships and are responsible for product distribution and client servicing[32](index=32&type=chunk)[33](index=33&type=chunk) - Amortization of Intangible Assets: Excludes non-cash amortization or impairment charges related to acquisition-related intangible assets to aid comparison with other asset managers that have not made acquisitions[36](index=36&type=chunk) - Restructuring Expenses: Excludes non-recurring expenses related to business restructuring, such as lease abandonment charges and severance costs[36](index=36&type=chunk) - Deferred Compensation and Related Investments: Adjusts compensation expense, gains and losses, and interest and dividend income related to the market performance of deferred compensation and related balance sheet investments[36](index=36&type=chunk) - Acquisition and Integration Costs: Excludes expenses directly related to acquisition and integration activities, including deal-related employment expenses, transaction closing costs, changes in fair value of contingent consideration, professional fees, and financing costs[36](index=36&type=chunk)[37](index=37&type=chunk) - Other: Adjusts for certain expenses that do not reflect the ongoing profitability of the business, such as fair value measurement of minority interests in affiliates, non-capitalized debt issuance costs, amortization of lease termination fees, and tax adjustments unrelated to current operating results[37](index=37&type=chunk) - Seed Capital and CLO Investment (Gains) Losses: Excludes realized and unrealized gains and losses on seed capital and CLO investments, which are highly volatile and do not reflect the company's operating results from providing investment management and related services[38](index=38&type=chunk) [Definitions of Non-GAAP Measures](index=14&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines key non-GAAP financial measures used by the company, including adjusted revenue, adjusted operating expenses, adjusted operating margin, and adjusted EPS, which aim to better reflect the ongoing operating performance of the core investment management business - Adjusted Revenue: Refers to fee revenues paid by clients for investment management and related services, excluding the impact of operating activities of consolidated investment products, and deducting fees paid to third-party client intermediaries[39](index=39&type=chunk) - Adjusted Operating Expenses: Refers to expenses incurred from ongoing operations, excluding amortization or impairment of intangible assets, restructuring and severance charges, the impact of consolidated investment products, acquisition and integration-related costs, and other expenses not reflecting the ongoing profitability of the business[40](index=40&type=chunk) - Adjusted Operating Margin: An efficiency measure representing adjusted operating income divided by adjusted revenue[41](index=41&type=chunk) - Adjusted Earnings (Loss) Per Share: Refers to adjusted net income (loss) attributable to Virtus Investment Partners, Inc. divided by the adjusted weighted average shares outstanding (basic or diluted)[42](index=42&type=chunk) [Company Information & Forward-Looking Statements](index=5&type=section&id=Company%20Information%20%26%20Forward-Looking%20Statements) This section provides an overview of Virtus Investment Partners, details regarding investor conference calls, and important disclosures about forward-looking statements, including associated risks and the company's policy on updates [About Virtus Investment Partners, Inc.](index=5&type=section&id=About%20Virtus%20Investment%20Partners%2C%20Inc.) Virtus Investment Partners is a unique partnership of boutique investment managers dedicated to providing diverse investment management products and services across various disciplines and product types for individual and institutional investors - Virtus Investment Partners (NYSE: VRTS) is a unique partnership of boutique investment managers dedicated to the long-term success of individual and institutional investors[20](index=20&type=chunk) - The company offers investment management products and services through its affiliated managers and select subadvisers, each with distinct investment styles and autonomous investment processes to meet a wide range of investor needs[20](index=20&type=chunk) [Conference Call and Investor Presentation](index=5&type=section&id=Conference%20Call%20and%20Investor%20Presentation) Management will host an investor conference call and webcast on April 26, 2024, to discuss financial results and related matters, with presentation materials and a replay available on the company's investor relations website - Management will host an investor conference call and webcast on Friday, April 26, 2024, at 10:00 a.m. Eastern Time, to discuss financial results[19](index=19&type=chunk) - The conference presentation will be available in the investor relations section of virtus.com, where a replay of the call will also be available for at least one year[19](index=19&type=chunk) [Forward-Looking Information](index=15&type=section&id=Forward-Looking%20Information) This press release contains forward-looking statements based on expectations, assumptions, and projections about the company and market, which are not guarantees of future results or performance and involve significant risks and uncertainties, with no commitment to update or revise any such statements - This press release contains forward-looking statements based on a range of expectations, assumptions, and projections about the company and the market, which are not guarantees of future results or performance and involve significant risks and uncertainties[43](index=43&type=chunk)[44](index=44&type=chunk) - The business and forward-looking statements involve significant known and unknown risks and uncertainties, including AUM reductions, failure to realize expected benefits from strategic transactions, termination of investment advisory agreements, reputational harm, inability to satisfy debt covenants, inability to attract and retain key personnel, competitive challenges, technology system disruptions, investment losses, and regulatory and legal developments[45](index=45&type=chunk) - The company does not undertake or plan to update or revise any forward-looking statements to reflect actual results, plans, assumptions, estimates, or projections, or other circumstances occurring after the date of this release[47](index=47&type=chunk)

Assets Under Management - Total assets under management increased to $172.3 billion, a rise of $22.9 billion or 15.3% from December 31, 2022[133] - Positive market performance contributed $24.8 billion to the increase in assets under management, while net outflows totaled $7.2 billion[133] - Retail separate accounts saw a significant increase of $7.85 billion, or 22.2%, in assets under management compared to the previous year[134] - Institutional accounts experienced a growth of $12.3 billion, or 24.3%, in assets under management from December 31, 2022[134] - Open-end funds reported an increase of $3.06 billion, or 5.8%, in assets under management[134] - Closed-end funds experienced a decrease of $335 million, or 3.2%, in assets under management[134] - Average assets under management decreased by $5.31 billion, or 3.2%, compared to the previous year[134] - Assets under management rose by $22.9 billion, or 15.3%, to $172.3 billion at December 31, 2023, compared to $149.4 billion at December 31, 2022[136] Financial Performance - Net income per diluted share increased by $2.21, or 14.3%, to $17.71 in 2023 from $15.50 in 2022[136] - Total sales decreased by $4.4 billion, or 14.6%, to $25.9 billion in 2023 from $30.3 billion in 2022[136] - Total revenues decreased by $41.1 million, or 4.6%, to $845.3 million in 2023 from $886.4 million in 2022[149] - Operating income decreased by $46.0 million, or 23.3%, to $151.5 million in 2023 from $197.5 million in 2022[149] - Net income attributable to Virtus Investment Partners, Inc. for 2023 was $130,621,000, an increase of 11.5% compared to $117,541,000 in 2022[280] - Comprehensive income attributable to Virtus Investment Partners, Inc. for 2023 was $130,892,000, an increase from $117,163,000 in 2022, representing an increase of 11.7%[283] - Net income for 2023 was $141,476,000, an increase from $106,628,000 in 2022[288] Expenses - Investment management fees decreased by $16.9 million, or 2.3%, to $711.5 million in 2023 from $728.3 million in 2022, primarily due to lower average assets under management[149] - Employment expenses increased by $33.5 million, or 9.0%, to $404.7 million in 2023, primarily due to the addition of AlphaSimplex[157] - Distribution and other asset-based expenses decreased by $15.8 million, or 14.0%, to $96.8 million, mainly due to a decrease in average assets under management[158] - Total operating expenses rose by $4.9 million, or 0.7%, to $693.8 million in 2023[156] - Interest expense increased by $10.3 million, or 77.9%, to $23.4 million, attributed to higher average interest rates and debt balances[169] Cash Flow and Investments - Net cash provided by operating activities increased by $104.5 million, or 78.8%, to $237.2 million in 2023[183] - Net cash used in investing activities rose to $129.7 million in 2023, primarily due to the acquisition of AlphaSimplex[184] - The company reported a net cash decrease of $248,165,000 in 2023, contrasting with an increase of $3,034,000 in 2022[289] - The company acquired businesses for a net cash outflow of $108,999,000 in 2023, compared to $20,577,000 in 2022[288] Equity and Dividends - The company declared a quarterly cash dividend of $1.90 per common share, payable on May 15, 2024[117] - Total equity increased by $45.4 million, or 5.5%, to $868.3 million as of December 31, 2023[176] - The company reported a total equity attributable to Virtus Investment Partners, Inc. of $863,926,000 as of December 31, 2023, an increase of 5.8% from $817,019,000 in 2022[277] - Cash dividends declared for 2023 were $7.10 per common share, totaling $53,526,000[288] Acquisition and Goodwill - The acquisition of AlphaSimplex Group, LLC was completed for $113.4 million in cash, with $50.0 million drawn from the revolving credit facility[132] - The carrying value of goodwill was $397.1 million as of December 31, 2023, with no impairment identified during the annual assessment[195] - The carrying value of indefinite-lived intangible assets was $42.3 million as of December 31, 2023, with no impairments identified[196] - The carrying value of definite-lived intangible assets was $389.8 million as of December 31, 2023, with amortization calculated on a straight-line basis[197] Market Performance - The Standard & Poor's 500 Index increased by 24.2% in 2023, reflecting strong market performance[131] - The percentage of assets under management beating benchmarks was 42% for equity, 61% for fixed income, and 59% for alternatives over a three-year period[146] Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2023, based on COSO criteria[257] - The effectiveness of internal control over financial reporting has been audited by Deloitte & Touche LLP as of December 31, 2023[229] - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2023 that materially affected the company's reporting[226] Company Overview - The Company operates in the investment management industry, providing services to both institutional and individual clients through various investment products[292] - The Company manages assets through institutional separate and commingled accounts, mutual funds, global funds, variable insurance funds, ETFs, and closed-end funds[292] - The Company operates in one business segment as an asset manager, providing investment management services for individual and institutional clients[298]

Virtus Investment Partners, Inc. (NYSE:VRTS) Q4 2023 Earnings Conference Call February 2, 2024 10:00 AM ET Company Participants Sean Rourke - IR George Aylward - President &| CEO Michael Angerthal - CFO Conference Call Participants Crispin Love - Piper Sandler Bradley Hays - TD Cowan Michael Cyprys - Morgan Stanley Operator Good morning. My name is Dede, and I will be your conference operator today. I would like to welcome everyone to the Virtus Investment Partners Quarterly Conference Call. The slide prese ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 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: 001-10994 VIRTUS INVESTMENT PARTNERS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpor ...

Virtus Investment Partners, Inc. (NYSE:VRTS) Q3 2023 Results Conference Call October 27, 2023 10:00 AM ET Company Participants Sean Rourke - IR George Aylward - President and CEO Mike Angerthal - CFO Conference Call Participants Michael Cyprys - Morgan Stanley Operator Good morning. My name is Dede, and I will be your conference operator today. I would like to welcome everyone to the Virtus Investment Partners quarterly conference call. The slide presentation for this call is available in the Investor Relat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 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: 001-10994 VIRTUS INVESTMENT PARTNERS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...

Financial Data and Key Metrics Changes - Total assets under management (AUM) increased by 9% to $168 billion, driven by the addition of AlphaSimplex and market appreciation [8][15] - Sales rose by 22% sequentially to $7.6 billion, reflecting strong institutional business momentum [8][21] - Earnings per share (EPS) as adjusted increased to $5.43 from $4.20 in the first quarter, marking a 29% increase [12][32] Business Line Data and Key Metrics Changes - Institutional net inflows were $2.2 billion, a significant improvement from modest net outflows in the previous quarter [9][23] - Retail separate account sales remained largely unchanged, with net outflows of $0.1 billion compared to net inflows of $0.1 billion in the first quarter [10][24] - Fund net outflows were $2.1 billion, slightly worse than $1.8 billion in the first quarter, with fixed income strategies showing improvement [10][23] Market Data and Key Metrics Changes - Institutional AUM now represents 37% of total AUM, up from 32% a year ago, while non-US clients increased to 17% from 15% [17] - Approximately 69% of institutional assets and 89% of retail separate account assets outperformed their benchmarks over five years [18] - Positive net flows were observed in global funds and ETFs, indicating improved trends in the market [11][24] Company Strategy and Development Direction - The company is focused on diversifying its business through the addition of new affiliates and expanding investment capabilities in less correlated and alternative strategies [7][16] - There is a strong emphasis on maintaining a well-positioned balance sheet while returning capital to shareholders and investing in growth initiatives [13][34] - The company continues to evaluate M&A opportunities, particularly in areas that enhance diversification and align with less correlated investment strategies [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the institutional pipeline, noting strong demand across various strategies and geographies [39] - The macroeconomic environment for fixed income strategies is expected to improve as clarity on interest rates increases [41] - The company anticipates continued positive trends in AUM and sales, supported by market appreciation and strategic initiatives [12][11] Other Important Information - The operating margin improved to 32.3%, up from 26.8% in the previous quarter, primarily due to seasonal employment expenses [12][31] - The company repurchased approximately 52,000 shares for $10 million during the quarter, reflecting its commitment to returning capital to shareholders [14][35] Q&A Session Summary Question: Fee rate dynamics with large institutional inflows - Management explained that the fee rate is influenced by the mix of AUM and the strategies involved, with institutional business now comprising a larger portion of total AUM [37][38] Question: Update on institutional pipeline and demand trends - Management confirmed a strong institutional pipeline with diverse strategies and geographies, indicating continued strength in demand [39] Question: Expectations for fixed income demand - Management noted that while retail outflows have slowed, there is potential for increased interest in fixed income strategies as clarity on rates improves [41] Question: Capital allocation and M&A activity - Management reiterated the priority of paying down the credit facility while also considering share repurchases and evaluating M&A opportunities that align with strategic goals [47][48] Question: Contingent payments from acquisitions - Management provided details on upcoming cash payments related to contingent considerations from previous acquisitions, indicating a structured payment timeline [50]

Financial Performance - Net income per diluted share for Q1 2023 was $5.21, an increase of $0.99, or 23.5%, compared to $4.22 in Q1 2022[96] - Net income attributable to Virtus Investment Partners, Inc. increased by 16.8% to $38.6 million in Q1 2023, up from $33.1 million in Q1 2022[106] - Earnings per share (diluted) rose by 23.5% to $5.21 in Q1 2023, compared to $4.22 in Q1 2022[106] - Total revenues decreased by 21.6% to $197.9 million in Q1 2023 from $252.4 million in Q1 2022, primarily due to lower average assets under management[106] Assets Under Management - Total assets under management as of March 31, 2023, were $154.8 billion, a decrease of $28.5 billion, or 15.5%, from March 31, 2022, but an increase of $5.5 billion, or 3.7%, from December 31, 2022[96] - Open-End Funds saw a decrease in assets under management from $73.1 billion in 2022 to $53.9 billion in 2023, a decline of $19.3 billion, or 26.4%[97] - Institutional Accounts experienced a decrease in assets under management from $57.3 billion in 2022 to $53.2 billion in 2023, a decline of $4.1 billion, or 7.1%[97] - Average assets under management decreased by $37.7 billion, or 19.9%, from $190.1 billion in 2022 to $152.4 billion in 2023[97] - Average assets under management for open-end funds decreased from $75.5 billion in 2022 to $54.1 billion in 2023, a decline of 28.4%[103] Sales and Outflows - Total sales in Q1 2023 were $6.2 billion, a decrease of $3.2 billion, or 33.9%, from $9.4 billion in Q1 2022[96] - Net outflows in Q1 2023 were $1.9 billion, compared to $2.0 billion in Q1 2022[96] Expenses - Total operating expenses decreased by 9.4% to $169.3 million in Q1 2023 from $186.9 million in Q1 2022[113] - Employment expenses decreased by $7.4 million, or 7.0%, to $98.6 million in Q1 2023, primarily due to lower incentive compensation[114] - Distribution and service fees decreased by $5.9 million, or 29.3%, to $14.2 million in Q1 2023, reflecting lower sales and assets for open-end funds[109] Market Performance - The company reported $7.8 billion in positive market performance in Q1 2023, partially offsetting net outflows[99] - Realized and unrealized gains on investments improved by $5.7 million in Q1 2023 compared to the same period in the prior year[121] Cash Flow - Net cash used in operating activities improved by $38.8 million, or 47.5%, to $(43.0) million for the three months ended March 31, 2023, compared to $(81.8) million in the prior year[138] - Net cash used in investing activities decreased by $9.4 million, or 41.8%, to $(13.1) million for the three months ended March 31, 2023, compared to $(22.6) million in the same period last year[139] - Net cash used in financing activities decreased by $30.7 million to $(115.1) million for the three months ended March 31, 2023, from $(145.8) million in the prior year[140] Interest and Tax - Interest expense increased by $2.7 million, or 119.6%, to $(5.0) million for the three months ended March 31, 2023, compared to the same period in the prior year[125] - Interest and dividend income surged by $2.9 million, or 887.2%, reaching $3.2 million for the three months ended March 31, 2023, primarily due to higher interest earned on cash balances[126] - Interest and dividend income from investments of CIP rose by $26.4 million, or 129.7%, totaling $46.8 million for the three months ended March 31, 2023, driven by higher average interest rates and a new CLO added in Q4 2022[127][128] - Interest expense of CIP increased by $23.1 million, or 191.2%, to $(35.2) million for the three months ended March 31, 2023, primarily due to higher average interest rates[129] - The estimated effective tax rate decreased to 20.1% for the three months ended March 31, 2023, from 30.0% in the prior year, primarily due to excess tax benefits associated with stock-based compensation[130] Acquisition - The company completed the acquisition of AlphaSimplex Group, LLC for $130.0 million, financed with existing resources and $50.0 million drawn from a revolving credit facility[95] Cash and Equivalents - Cash and cash equivalents decreased by $124.8 million, or 36.9%, to $213.4 million as of March 31, 2023, compared to $338.2 million at December 31, 2022[131] Debt - The Company had $260.9 million outstanding under its Term Loan as of March 31, 2023, with no outstanding borrowings under the revolving credit facility[141]

Financial Data and Key Metrics Changes - Total assets under management increased by 4% to $155 billion due to market appreciation, partially offset by net outflows [7] - Earnings per share as adjusted was $4.20, which included $1.11 of seasonal employment expenses, reflecting a 3% increase over the prior quarter when adjusted for those items [12][33] - Operating margin as adjusted was 26.8%, compared to 31.8% in the fourth quarter, but improved by 140 basis points to 33.2% when excluding seasonal items [32] Business Line Data and Key Metrics Changes - Retail separate account sales increased by 12%, driven by SMID equities, while total sales declined sequentially to $6.2 billion due to lower institutional sales [7][21] - Fund net outflows improved to $1.8 billion from $3.8 billion in the prior quarter, with positive net flows in emerging markets, SMID, and large-cap equity funds [8][24] - Institutional sales were $1.9 billion, down from $3 billion in the previous quarter, but the institutional pipeline remains strong [21][9] Market Data and Key Metrics Changes - The pro-forma total assets under management, including AlphaSimplex, is $162.6 billion, with institutional assets increasing to 36% of AUM [18] - Approximately 43% of rated fund assets had four or five stars, and 87% were in three, four, or five-star funds as of March 31 [19] - On a five-year basis, 74% of rated fund AUM outperformed the median performance of their peer groups [20] Company Strategy and Development Direction - The acquisition of AlphaSimplex aims to expand and diversify alternative non-correlated investment offerings, appealing across market cycles [6] - The company is focused on leveraging AlphaSimplex's capabilities to accelerate growth and expand offerings to a broader range of clients [55] - There is an ongoing interest in M&A, particularly in expanding into non-correlated strategies and international markets [65] Management's Comments on Operating Environment and Future Outlook - Management noted a meaningful improvement in open-end fund flows and a strong institutional pipeline, expecting no redemptions over the next several quarters [10][9] - The company anticipates employment expenses as a percentage of revenues to be in the range of 49% to 51%, influenced by market performance [29] - Management expressed optimism about growth opportunities, particularly in non-U.S. institutional markets [59] Other Important Information - The company ended the quarter with a modest net-debt position of $47 million, representing net leverage of 0.2 times EBITDA [34] - The first quarter is typically the highest for cash utilization due to annual incentives and other payments [35] - The company did not repurchase shares in the open market during the first quarter, focusing on maintaining a strong balance sheet [49] Q&A Session Summary Question: AlphaSimplex AUM decline and market dynamics - Management acknowledged the decline in AlphaSimplex AUM due to market performance but noted positive net flows in the first quarter [39][40] Question: Updates on travel and entertainment expenses - Management indicated that travel expenses have not fully returned to pre-COVID levels and that the new expense guidance reflects the addition of AlphaSimplex [44][47] Question: Capital allocation and share repurchases - Management explained that the decision not to repurchase shares was due to competing cash demands and maintaining a strong balance sheet [49][50] Question: Leveraging AlphaSimplex capabilities for growth - Management expressed excitement about integrating AlphaSimplex's capabilities to reach a broader range of clients and enhance product offerings [55] Question: Institutional pipeline and funding expectations - Management highlighted a robust institutional pipeline with diverse strategies, although timing of fundings remains uncertain [60][62] Question: Future M&A considerations - Management reiterated that while M&A is part of their strategy, organic growth remains the primary focus, particularly in non-U.S. markets [63][65]