BrightSphere Investment (BSIG) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial information for the reported periods Item 1. Financial Statements This section presents Acadian Asset Management Inc.'s unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $90.2 | $94.8 | | Investment advisory fees receivable | $124.2 | $164.7 | | Investments | $55.2 | $67.9 | | Total assets | $672.3 | $703.2 | | Liabilities | | | | Accrued incentive compensation | $66.0 | $119.6 | | Revolving credit facility | $20.0 | — | | Total liabilities | $585.4 | $616.1 | | Equity | | | | Retained earnings | $11.3 | $24.4 | | Total equity and redeemable non-controlling interests | $86.9 | $87.1 | - Total assets decreased by $30.9 million (4.4%) from $703.2 million at December 31, 2024, to $672.3 million at June 30, 2025, primarily due to decreases in investment advisory fees receivable and investments[8] - Total liabilities decreased by $30.7 million (5.0%) from $616.1 million at December 31, 2024, to $585.4 million at June 30, 2025, largely driven by a significant decrease in accrued incentive compensation[8] Condensed Consolidated Statements of Operations This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income Condensed Consolidated Statements of Operations (in millions, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Total revenue | $127.4 | $109.0 | +16.9% | $247.3 | $214.7 | +15.2% | | Total operating expenses | $111.2 | $88.4 | +25.8% | $199.2 | $171.2 | +16.3% | | Operating income | $16.2 | $20.6 | -21.3% | $48.1 | $43.5 | +10.6% | | Income before income taxes | $23.6 | $17.1 | +38.0% | $55.7 | $38.9 | +43.2% | | Net income attributable to controlling interests | $10.1 | $11.0 | -8.2% | $30.2 | $25.6 | +18.0% | | Basic EPS attributable to controlling interests | $0.28 | $0.29 | -3.4% | $0.82 | $0.67 | +22.4% | | Diluted EPS attributable to controlling interests | $0.28 | $0.29 | -3.4% | $0.82 | $0.66 | +24.2% | - Net consolidated Funds' investment gains significantly increased to $12.1 million for the three months ended June 30, 2025, from $0.8 million in the prior year, and to $15.7 million for the six months ended June 30, 2025, from $2.5 million in the prior year[10] Condensed Consolidated Statements of Comprehensive Income This section presents the company's net income and other comprehensive income components, reflecting changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $19.1 | $11.5 | $42.9 | $27.2 | | Total other comprehensive income | $1.1 | $0.8 | $2.3 | $1.3 | | Total comprehensive income attributable to controlling interests | $11.2 | $11.8 | $32.5 | $26.9 | - Total other comprehensive income increased for both the three-month period (from $0.8 million to $1.1 million) and the six-month period (from $1.3 million to $2.3 million) ended June 30, 2025, primarily due to amortization related to derivative securities and foreign currency translation adjustments[12] Condensed Consolidated Statements of Changes in Stockholders' Equity This section details the changes in the company's equity accounts, including net income, stock repurchases, and dividends Key Changes in Stockholders' Equity (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $10.1 | $11.0 | $30.2 | $25.6 | | Repurchase of common stock | $(23.8) | $(20.7) | $(43.4) | $(95.7) | | Dividends paid | $(0.4) | $(0.4) | $(0.8) | $(0.8) | | Total equity and redeemable non-controlling interests (End of Period) | $86.9 | $(18.8) | $86.9 | $(18.8) | - The company repurchased 0.9 million shares for $23.8 million in Q2 2025, compared to 0.9 million shares for $20.7 million in Q2 2024. For the six months, repurchases were 1.7 million shares for $43.4 million in 2025, down from 4.4 million shares for $95.7 million in 2024[13][14] Condensed Consolidated Statements of Cash Flows This section reports the cash generated and used by the company across operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash flows from operating activities | $12.8 | $5.3 | | Net cash flows from investing activities | $9.1 | $(18.8) | | Net cash flows from financing activities | $(26.9) | $(60.6) | | Net decrease in cash and cash equivalents | $(4.6) | $(74.2) | | Cash and cash equivalents at end of period | $93.9 | $73.4 | - Net cash from operating activities (including consolidated Funds) increased by $7.5 million, from $5.3 million in 2024 to $12.8 million in 2025[16] - Net cash from investing activities significantly improved, moving from an outflow of $(18.8) million in 2024 to an inflow of $9.1 million in 2025, primarily due to higher net sales of investment securities[16] - Net cash used in financing activities decreased by $33.7 million, from $(60.6) million in 2024 to $(26.9) million in 2025, mainly due to lower common stock repurchases[18] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1) Organization and Description of the Business%20Organization%20and%20Description%20of%20the%20Business) This note describes Acadian Asset Management Inc.'s business operations and organizational structure - Acadian Asset Management Inc. operates a systematic investment management business through its majority-owned subsidiary, Acadian Asset Management LLC ('Acadian LLC'), offering diversified systematic investment strategies to institutional investors globally[21] - The company's Quant & Solutions segment utilizes advanced technology to identify mispriced assets and generate risk-adjusted returns, covering global, emerging market, non-U.S., small cap, enhanced equities, credit, and alternative strategies[21] Common Stock Repurchases (in millions) | Period | Shares Repurchased | Total Value (including commissions) | | :-------------------------------- | :----------------- | :---------------------------------- | | 6 Months Ended June 30, 2025 | 1,696,553 | $43.0 | | 6 Months Ended June 30, 2024 | 4,445,534 | $94.9 | 2) Basis of Presentation and Significant Accounting Policies%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the accounting principles and policies used in preparing the financial statements - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, with all normal and recurring adjustments included[26] - Management makes estimates and assumptions that affect reported amounts, and actual results may differ materially[28] - The company adopted ASU 2024-01 (Compensation - Stock Compensation) in March 2024 with no material impact and is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) for future periods, not expecting a material impact from ASU 2023-09[29][31][32] 3) Investments%20Investments) This note details the composition and valuation of the company's investment portfolio Investments Breakdown (in millions) | Investment Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Investments of consolidated Funds | $170.5 | $154.0 | | Other investments | $19.3 | $19.4 | | Investments related to long-term incentive compensation plans | $35.9 | $48.5 | | Total investments | $225.7 | $221.9 | - Unrealized gains for investments of consolidated Funds were $12.3 million for the three months ended June 30, 2025 (vs. $(0.2) million in 2024) and $15.5 million for the six months ended June 30, 2025 (vs. $0.6 million in 2024)[35] 4) Fair Value Measurements%20Fair%20Value%20Measurements) This note explains the methodologies and hierarchy used to measure the fair value of assets and liabilities Fair Value Assets (in millions) as of June 30, 2025 | Asset Type | Level I | Level II | Level III | Uncategorized | Total | | :------------------------------------------ | :------ | :------- | :-------- | :------------ | :---- | | Common and preferred stock | $107.1 | — | — | — | $107.1 | | Corporate bonds | — | $62.6 | — | — | $62.6 | | Derivatives | $0.1 | $0.7 | — | — | $0.8 | | Investments related to long-term incentive compensation plans | $35.9 | — | — | — | $35.9 | | Investments in unconsolidated Funds | — | — | — | $19.3 | $19.3 | | Total fair value assets | $143.1 | $63.3 | — | $19.3 | $225.7 | Fair Value Liabilities (in millions) as of June 30, 2025 | Liability Type | Level I | Level II | Level III | Uncategorized | Total | | :-------------------- | :------ | :------- | :-------- | :------------ | :---- | | Securities sold short | $(25.7) | — | — | — | $(25.7) | | Derivatives | — | $(0.3) | — | — | $(0.3) | | Total fair value liabilities | $(25.7) | $(0.3) | — | — | $(26.0) | - Level I assets primarily include actively traded common and preferred stock and investments related to long-term incentive compensation plans. Level II assets include corporate bonds and derivatives valued using observable inputs[37][41][47] - Investments in unconsolidated Funds, primarily real estate investment funds, are valued using NAV as a practical expedient and are uncategorized within the fair value hierarchy[47] 5) Variable Interest Entities%20Variable%20Interest%20Entities) This note discusses the company's involvement with and consolidation of Variable Interest Entities - The Company sponsors various Variable Interest Entities (VIEs), primarily Funds managed by Acadian LLC, and consolidates those where it is the primary beneficiary, typically when its ownership interest is substantial[49][50] Consolidated VIEs Assets and Liabilities (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Investments | $170.5 | $154.0 | | Other assets | $10.3 | $5.3 | | Total Assets | $180.8 | $159.3 | | Liabilities | $27.1 | $21.2 | | Total Liabilities | $27.1 | $21.2 | - The Company's maximum exposure to loss from unconsolidated VIEs was $19.3 million at June 30, 2025, representing the carrying value of its investments in these entities[55] 6) Leases%20Leases) This note provides information on the company's operating lease arrangements and related expenses Operating Lease Expenses (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total operating lease expense | $2.3 | $2.2 | $4.5 | $4.4 | | Operating cash flows from operating leases | $2.5 | $2.1 | $4.9 | $4.5 | - The weighted average remaining lease term was 8.0 years at June 30, 2025, with a weighted average discount rate of 3.54%[56] Maturities of Operating Lease Liabilities (in millions) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2025 (excluding 6 months ended June 30, 2025) | $4.7 | | 2026 | $9.5 | | 2027 | $9.1 | | 2028 | $8.7 | | 2029 | $8.0 | | Thereafter | $33.2 | | Total lease payments | $73.2 | | Less imputed interest | $(9.4) | | Total | $63.8 | 7) Borrowings and Debt%20Borrowings%20and%20Debt) This note details the company's outstanding borrowings and long-term debt obligations Borrowings and Long-Term Debt (in millions) | Item | June 30, 2025 (Carrying Value) | December 31, 2024 (Carrying Value) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Revolving credit facility | $20.0 | — | | $275 million 4.80% Senior Notes Due 2026 | $274.5 | $274.3 | | Total | $294.5 | $274.3 | - Acadian LLC's $125 million revolving credit facility was replaced with a new $140 million facility on August 29, 2024, maturing on August 29, 2027[61][63] - The new revolving credit facility bears variable interest rates based on prime rate, federal funds effective rate, or Adjusted Term SOFR, plus additional amounts based on Acadian LLC's Leverage Ratio[64] 8) Commitments and Contingencies%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and potential contingent liabilities - The Company's subsidiaries are required to maintain minimum financial or capital requirements, with no known violations during the reported periods[66] - A guaranty for an office space security deposit of $2.5 million expires in 2033, with no related liabilities recorded[67] - Management does not believe any outstanding litigation or foreign tax contingencies will have a material adverse effect on the Company[68][71] 9) Earnings Per Share%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share for controlling interests Earnings Per Share (in millions, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | Weighted-average shares outstanding—basic | 35,912,023 | 37,547,741 | 36,633,243 | 38,305,631 | | Weighted-average shares outstanding—diluted | 35,929,662 | 38,238,620 | 36,651,092 | 38,985,030 | | Basic EPS attributable to controlling interests | $0.28 | $0.29 | $0.82 | $0.67 | | Diluted EPS attributable to controlling interests | $0.28 | $0.29 | $0.82 | $0.66 | - Basic and diluted EPS for the three months ended June 30, 2025, decreased slightly to $0.28 from $0.29 in the prior year, while for the six months, they increased to $0.82 from $0.67 and $0.66, respectively[76] 10) Revenue%20Revenue) This note disaggregates the company's revenue streams, including management and performance fees Revenue Breakdown (in millions) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------- | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Management fees | $122.3 | $105.5 | +15.9% | $235.2 | $207.7 | +13.2% | | Performance fees | $2.6 | $2.8 | -7.1% | $7.9 | $5.9 | +33.9% | | Consolidated Funds' revenue | $2.5 | $0.7 | +257.1% | $4.2 | $1.1 | +281.8% | | Total revenue | $127.4 | $109.0 | +16.9% | $247.3 | $214.7 | +15.2% | Management Fee Revenue by Client Domicile (in millions) | Client Location | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. | $92.9 | $79.5 | $178.8 | $156.8 | | Non-U.S. | $29.4 | $26.0 | $56.4 | $50.9 | | Total | $122.3 | $105.5 | $235.2 | $207.7 | - Performance fees decreased by $(0.2) million (7.1%) for the three months ended June 30, 2025, but increased by $2.0 million (33.9%) for the six months ended June 30, 2025, reflecting varied performance relative to benchmarks[10][138][139] 11) Accumulated Other Comprehensive Income (Loss)%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of accumulated other comprehensive income or loss Accumulated Other Comprehensive Income (Loss) (in millions) | Item | Balance as of March 31, 2025 | Other Comprehensive Income (3M) | Balance as of June 30, 2025 | | :------------------------------------------ | :--------------------------- | :------------------------------ | :-------------------------- | | Foreign currency translation adjustment | $3.2 | $0.4 | $3.6 | | Amortization of derivative securities | $(6.4) | $0.7 | $(5.7) | | Total | $(3.2) | $1.1 | $(2.1) | | Item | Balance as of December 31, 2024 | Other Comprehensive Income (6M) | Balance as of June 30, 2025 | | :------------------------------------------ | :---------------------------- | :------------------------------ | :-------------------------- | | Foreign currency translation adjustment | $2.7 | $0.9 | $3.6 | | Amortization of derivative securities | $(7.1) | $1.4 | $(5.7) | | Total | $(4.4) | $2.3 | $(2.1) | - Accumulated other comprehensive loss improved from $(4.4) million at December 31, 2024, to $(2.1) million at June 30, 2025, driven by positive foreign currency translation adjustments and amortization related to derivative securities[83] 12) Derivatives and Hedging%20Derivatives%20and%20Hedging) This note describes the company's derivative instruments and hedging activities - The Company previously entered into $300.0 million notional Treasury rate lock contracts, designated as cash flow hedges, which were settled in July 2016[84] - As of June 30, 2025, a balance of $(5.7) million (net of tax) related to these hedges is recorded in accumulated other comprehensive income (loss) and is expected to be reclassified to interest expense over the life of the issued debt[85] - The Company reclassified $0.9 million and $0.8 million to earnings for the three months ended June 30, 2025 and 2024, respectively, and expects to reclassify approximately $4.1 million to interest expense in the next twelve months[85] 13) Segment Information%20Segment%20Information) This note provides financial information for the company's reportable operating segment, Quant & Solutions - The Company operates through one reportable segment, 'Quant & Solutions,' which focuses on systematic investment strategies using advanced technology to identify mispriced assets[87] - Economic Net Income (ENI) is the primary measure used by the Chief Operating Decision Maker (CODM) to evaluate performance, allocate resources, and determine compensation, as it reflects underlying economic earnings by excluding non-cash or non-recurring items[88][110][111] Quant & Solutions Segment Economic Net Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Segment ENI revenue | $124.9 | $108.3 | $243.1 | $213.6 | | Segment ENI expenses | $85.6 | $76.6 | $168.9 | $150.5 | | Segment economic net income | $39.3 | $31.7 | $74.2 | $63.1 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of the company's financial condition, operational results, liquidity, and future outlook, including U.S. GAAP and non-GAAP performance measures Overview This section provides a general description of Acadian's business model, profitability drivers, and key performance metrics - Acadian operates a systematic investment management business through Acadian LLC, focusing on Quant & Solutions strategies for institutional investors globally[102] - Profitability is driven by AUM levels, fee rates, and expense structure, with management fees based on average AUM and performance fees earned when investment performance exceeds benchmarks[104] - The company uses a profit-sharing model with key employees, aligning economic interests through variable compensation and equity/profit interest distributions, which are key components of compensation and benefits expense[106][107] - Economic Net Income (ENI), a non-GAAP measure, is used by management to evaluate financial performance, make operational decisions, and manage capital, as it excludes non-cash or non-recurring items and reclassifies certain income statement items[110][111] Summary Results of Operations This section presents a high-level summary of the company's financial performance, including key U.S. GAAP and non-GAAP metrics Summary Results of Operations (in millions, unless otherwise noted) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP Revenue | $127.4 | $109.0 | $247.3 | $214.7 | | U.S. GAAP Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | U.S. GAAP Operating margin | 12.7% | 18.9% | 19.5% | 20.3% | | ENI revenue | $124.9 | $108.3 | $243.1 | $213.6 | | Economic net income | $22.9 | $17.2 | $43.2 | $34.6 | | Adjusted EBITDA | $39.1 | $32.0 | $74.3 | $63.9 | | ENI operating margin | 30.7% | 27.1% | 29.6% | 27.4% | | AUM at period end (in billions) | $151.1 | $112.6 | $151.1 | $112.6 | | Net client cash flows (in billions) | $13.8 | $0.0 | $17.6 | $0.4 | - AUM increased by $38.5 billion (34.2%) to $151.1 billion at June 30, 2025, compared to $112.6 billion at June 30, 2024, driven by market appreciation and positive net client cash flows[116][118][126] - Net client cash flows were $13.8 billion for the three months ended June 30, 2025, a significant increase from $0.0 billion in the prior year, and $17.6 billion for the six months, up from $0.4 billion[116][128] Assets Under Management This section details the company's Assets Under Management (AUM) by strategy, client type, and geographic location, along with AUM flows Assets Under Management by Strategy (in billions) | Strategy | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :-------------------- | :------------------ | :--------- | :-------------------- | :--------- | | Non-U.S. Equity | $32.4 | 21.4% | $26.6 | 22.7% | | Small Cap Equity | $29.4 | 19.5% | $25.0 | 21.3% | | Enhanced Equity | $27.5 | 18.2% | $10.8 | 9.2% | | Global Equity | $22.2 | 14.7% | $19.0 | 16.2% | | Emerging Markets Equity | $21.7 | 14.4% | $18.1 | 15.4% | | Other | $17.9 | 11.8% | $17.8 | 15.2% | | Total AUM | $151.1 | | $117.3 | | Assets Under Management by Client Type (in billions) | Client Type | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :------------ | :------------------ | :--------- | :-------------------- | :--------- | | Institutional | $121.9 | 80.7% | $93.0 | 79.3% | | Sub-Advisory | $16.0 | 10.6% | $13.1 | 11.2% | | Wealth/Other | $13.2 | 8.7% | $11.2 | 9.5% | | Total AUM | $151.1 | | $117.3 | | Assets Under Management by Client Location (in billions) | Client Location | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :-------------- | :------------------ | :--------- | :-------------------- | :--------- | | U.S. | $86.9 | 57.5% | $74.7 | 63.7% | | EMEA | $32.8 | 21.7% | $16.9 | 14.4% | | Asia Pacific | $23.9 | 15.8% | $18.8 | 16.0% | | Other | $7.5 | 5.0% | $6.9 | 5.9% | | Total AUM | $151.1 | | $117.3 | | AUM Flows (in billions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Beginning balance | $121.9 | $110.4 | $117.3 | $103.7 | | Gross inflows | $18.7 | $8.3 | $27.5 | $12.6 | | Gross outflows | $(5.7) | $(9.1) | $(11.5) | $(13.8) | | Net flows | $13.8 | $0.0 | $17.6 | $0.4 | | Market appreciation | $15.4 | $2.2 | $16.2 | $8.5 | | Ending balance | $151.1 | $112.6 | $151.1 | $112.6 | U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024 This section provides a detailed analysis of the company's financial performance based on U.S. GAAP for the specified periods U.S. GAAP Statement of Operations (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------------------------- | :--------------------------- | :--------------------------- | :----- | :--------------------------- | :--------------------------- | :----- | | Management fees | $122.3 | $105.5 | +$16.8 | $235.2 | $207.7 | +$27.5 | | Performance fees | $2.6 | $2.8 | -$(0.2) | $7.9 | $5.9 | +$2.0 | | Total revenue | $127.4 | $109.0 | +$18.4 | $247.3 | $214.7 | +$32.6 | | Compensation and benefits | $83.8 | $62.2 | +$21.6 | $144.6 | $120.3 | +$24.3 | | General and administrative expense | $21.8 | $21.1 | +$0.7 | $44.1 | $41.1 | +$3.0 | | Total operating expenses | $111.2 | $88.4 | +$22.8 | $199.2 | $171.2 | +$28.0 | | Operating income | $16.2 | $20.6 | -$(4.4) | $48.1 | $43.5 | +$4.6 | | Net consolidated Funds' investment gains | $12.1 | $0.8 | +$11.3 | $15.7 | $2.5 | +$13.2 | | Income before taxes | $23.6 | $17.1 | +$6.5 | $55.7 | $38.9 | +$16.8 | | Net income attributable to controlling interests | $10.1 | $11.0 | -$(0.9) | $30.2 | $25.6 | +$4.6 | - Average basis points earned on AUM decreased to 37.0 bps for Q2 2025 (from 38.5 bps in Q2 2024) and 37.3 bps for H1 2025 (from 38.3 bps in H1 2024), due to changes in the mix of AUM[133] - Compensation and benefits expense increased by $21.6 million (34.7%) for Q2 2025 and $24.3 million (20.2%) for H1 2025, driven by higher variable compensation, sales-based compensation, and Acadian LLC key employee distributions, as well as revaluations of key employee equity[147][148] Key U.S. GAAP Operating Metrics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP operating margin | 12.7% | 18.9% | 19.5% | 20.3% | | U.S. GAAP operating expense / management fee revenue | 89.8% | 83.7% | 83.8% | 82.3% | | U.S. GAAP variable compensation ratio | 62.3% | 55.8% | 53.8% | 53.7% | | U.S. GAAP Acadian LLC key employee distributions ratio | 20.9% | 9.5% | 13.4% | 9.2% | Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis This section reconciles U.S. GAAP net income to Economic Net Income (ENI) and analyzes segment performance using this non-GAAP measure - ENI is a non-GAAP measure used by management to evaluate financial performance, make operational decisions, and manage capital, differing from U.S. GAAP by reclassifying and excluding certain non-cash or non-recurring items[172] Reconciliation of U.S. GAAP Net Income to Economic Net Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | Non-cash key employee-owned equity and profit interest revaluations | $19.7 | $5.9 | $19.4 | $10.3 | | Seed/Co-investment (gains) losses and financings | $(2.6) | $(0.2) | $(2.6) | $(1.4) | | Economic net income | $22.9 | $17.2 | $43.2 | $34.6 | Key Non-GAAP Operating Metrics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | ENI operating margin | 30.7% | 27.1% | 29.6% | 27.4% | | ENI operating expense ratio | 44.6% | 48.8% | 46.3% | 48.6% | | ENI variable compensation ratio | 45.4% | 48.2% | 46.4% | 48.0% | | ENI Acadian LLC key employee distributions ratio | 10.4% | 7.1% | 9.9% | 7.3% | - The Quant & Solutions segment's ENI revenue increased by 15.3% to $124.9 million for Q2 2025 and 13.8% to $243.1 million for H1 2025, driven by higher management fees from increased AUM[200][201] - Segment ENI expenses increased by 11.7% to $85.6 million for Q2 2025 and 12.2% to $168.9 million for H1 2025, primarily due to higher variable compensation and general and administrative expenses[203][204] Capital Resources and Liquidity This section discusses the company's financial resources, cash flows, and ability to meet its short-term and long-term obligations Cash Flows (excluding consolidated Funds, in millions) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Operating activities | $10.7 | $5.4 | | Investing activities | $9.1 | $(18.8) | | Financing activities | $(24.8) | $(61.7) | - Net cash from operating activities (excluding consolidated Funds) increased by $5.3 million to $10.7 million for H1 2025[208] Adjusted EBITDA Reconciliation (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | EBITDA | $23.3 | $26.0 | $59.6 | $55.0 | | Adjusted EBITDA | $39.1 | $32.0 | $74.3 | $63.9 | - The Company believes its available cash, cash equivalents, and future operations, supplemented by financing, will be sufficient to fund operations and capital requirements for at least the next twelve months[213] Other Compensation Liabilities (in millions) | Liability Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Share-based payments liability | $30.2 | $25.4 | | Profit interests liability | $33.9 | $18.7 | | Voluntary deferral plan liability | $35.6 | $48.4 | | Total | $99.7 | $92.5 | Accrued Incentive Compensation (in millions) | Period | Amount | | :-------------------------- | :----- | | June 30, 2025 | $66.0 | | December 31, 2024 | $119.6 | Critical Accounting Policies and Estimates This section highlights the accounting policies and estimates that require significant judgment and can materially impact financial results - There have been no significant changes to the critical accounting policies and estimates disclosed in the Company's most recent Form 10-K for the year ended December 31, 2024[223] Forward Looking Statements This section provides cautionary statements regarding the inherent uncertainties and risks associated with forward-looking information - The report contains forward-looking statements regarding anticipated revenues, margins, cash flows, future performance, and market conditions, which are subject to known and unknown risks and uncertainties[225] - Actual results may differ materially from these statements due to various factors, and readers are cautioned not to place undue reliance on them[226] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the company's exposure to market risks, including AUM, equity markets, and foreign currency, and analyzes their potential impact on revenues and profitability - The Company's revenue is directly tied to AUM and investment performance, making it susceptible to market depreciation and client withdrawals[228] - Approximately 39% of the Company's Economic Net Income (ENI) cost structure is variable, linking variable compensation and Acadian LLC key employee distributions to profitability, thereby sharing market risk with employees[230] Market Risk Sensitivity Analysis (as of June 30, 2025, in millions) | Scenario | Impact on Annualized Gross Management Fee Revenue | Impact on Annual Post-Tax ENI | | :---------------------------------------------------- | :------------------------------------------ | :---------------------------- | | 10% increase/decrease in total AUM ($151.1B) | ±$56 | ±$24 | | 10% increase/decrease in equity markets-based AUM ($151B) | ±$55 | ±$22 (plus ±$2 from performance fees) | | 10% increase/decrease in foreign currency denominated AUM ($108B) | ±$45 | ±$18 (plus ±$2 from performance fees) | - The Company does not hedge market risks at the corporate level or within individual strategies, and changes in AUM composition could negatively impact overall weighted average fee rates[233][234] - Interest rate risk exposure is primarily from variable-rate borrowings under the revolving credit facility; a hypothetical 10% change in interest rates would have an immaterial impact on interest expense[235] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025[237] - There have been no material changes in internal control over financial reporting during the quarter ended June 30, 2025[238] PART II — OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales Item 1. Legal Proceedings This section addresses the company's involvement in legal proceedings and assesses their potential financial impact - The Company is involved in ordinary course legal proceedings but does not believe they will result in material liabilities to its consolidated financial condition, future results of operations, or cash flow[240] Item 1A. Risk Factors This section confirms no material changes to the risk factors previously disclosed in the company's latest annual report - No material changes have occurred in the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[241] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchase activities and the remaining authorization under its programs Equity Securities Purchases (3 Months Ended June 30, 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value Remaining Under Plans (in millions) | | :---------------- | :--------------------- | :--------------------------- | :------------------------------------------------------- | :--------------------------------------------------------- | | April 1-30, 2025 | 925,741 | $25.48 | 925,741 | $37.0 | | May 1-31, 2025 | — | — | — | $37.0 | | June 1-30, 2025 | — | — | — | $37.0 | | Total | 925,741 | $25.48 | 925,741 | | - The Board of Directors authorized the repurchase of up to $80 million of common stock on February 6, 2025, with no expiration. $23.6 million was used to repurchase 0.9 million shares during the three months ended June 30, 2025[242] Item 5. Other Information This section confirms no changes in Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or officers - No directors or officers changed their Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[243] Item 6. Exhibits This section lists all exhibits accompanying the Form 10-Q filing, including corporate governance documents and certifications - The exhibits include corporate governance documents (Amended and Restated Certificate of Incorporation, Bylaws), certifications from the CEO and CFO (Sarbanes-Oxley Act Sections 302 and 906), and interactive data files (XBRL) for the financial statements[244]