VIRTUS INVESTMENT PARTNERS, INC.

Previous wording

We offer investment strategies for institutional and individual investors in different investment products and through multiple distribution channels. Our investment strategies are available in a diverse range of styles and disciplines, managed by differentiated investment managers. We have offerings in various asset classes (equity, fixed income, multi-asset and alternatives), geographies (domestic, global, international and emerging), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative). Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers and Company sponsored structured products. Our retail products include open-end funds, closed-end funds and retail separate accounts.

Current wording

We offer investment strategies for institutional and individual investors in different investment products and through multiple distribution channels. Our investment strategies are available in a diverse range of styles and disciplines, managed by differentiated investment managers. We have offerings in various asset classes (equity, fixed income, multi-asset and alternatives), geographies (domestic, global, international and emerging), market capitalizations (large, mid and small), styles (growth, core and value) and investment approaches (fundamental and quantitative). Our institutional products are offered to a variety of institutional clients through institutional separate accounts and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products. Our retail products include open-end funds, closed-end funds and retail separate accounts.

Previous wording

Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and ETFs. Our U.S. retail funds and retail separate accounts are distributed through financial intermediaries. We have broad distribution access in the U.S. retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies. In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs. Our wealth management business is marketed directly to individual clients by financial advisory teams at our investment managers.

Current wording

Our retail distribution resources in the U.S. consist of regional sales professionals, a national account relationship group and specialized teams for retirement and exchange traded funds ("ETFs"). Our U.S. retail funds and retail separate accounts are distributed through financial intermediaries. We have broad distribution access in the U.S. retail market, with distribution partners that include national and regional broker-dealers, independent broker-dealers and registered investment advisers, banks and insurance companies. In many of these firms, we have a number of products that are on preferred "recommended" lists and on fee-based advisory programs. Our wealth management business is marketed directly to individual clients by financial advisory teams at our investment managers.

Previous wording

▪Total revenues were $217.9 million in the first quarter of 2025, a decrease of $4.1 million, or 1.9%, compared to total revenues of $222.0 million in the first quarter of 2024.

Current wording

▪Total revenues were $210.5 million in the second quarter of 2025, a decrease of $13.9 million, or 6.2%, compared to total revenues of $224.4 million in the second quarter of 2024.

Previous wording

▪Operating income was $36.6 million in the first quarter of 2025, an increase of $4.3 million, or 13.3%, compared to $32.3 million in the first quarter of 2024.

Current wording

▪Operating income was $45.2 million in the second quarter of 2025, an increase of $1.0 million, or 2.3%, compared to $44.2 million in the second quarter of 2024.

Previous wording

▪Net income per diluted share was $4.05 in the first quarter of 2025, a decrease of $0.05, or 1.2%, compared to net income per diluted share of $4.10 in the first quarter of 2024.

Current wording

▪Net income per diluted share was $6.12 in the second quarter of 2025, an increase of $3.69, or 151.9%, compared to net income per diluted share of $2.43 in the second quarter of 2024.

Previous wording

Total sales were $6.2 billion in the first quarter of 2025, a decrease of $1.3 billion, or 17.7%, from $7.6 billion in the first quarter of 2024. Net flows were $(3.0) billion in the first quarter of 2025 compared to net flows of $(1.2) billion in the first quarter of 2024.

Current wording

Total sales were $5.6 billion in the second quarter of 2025, a decrease of $0.6 billion, or 9.1%, from $6.1 billion in the second quarter of 2024. Net flows were $(3.9) billion in the second quarter of 2025 compared to net flows of $(2.6) billion in the second quarter of 2024.

Previous wording

At March 31, 2025, total assets under management were $167.5 billion, representing a decrease of $11.8 billion, or 6.6%, from March 31, 2024, and a decrease of $7.5 billion, or 4.3%, from December 31, 2024. The decrease in total assets under management from March 31, 2024 included $12.2 billion from net outflows partially offset by $2.9 billion from positive market performance. The decrease in total assets under management from December 31, 2024 included $4.1 billion from negative market performance and $3.0 billion from net outflows.

Current wording

At June 30, 2025, total assets under management were $170.7 billion, representing a decrease of $2.9 billion, or 1.7%, from June 30, 2024, and a decrease of $4.3 billion, or 2.5%, from December 31, 2024. The decrease in total assets under management from June 30, 2024 included $13.5 billion from net outflows and $2.7 billion from other activity partially offset by $13.3 billion from positive market performance. The decrease in total assets under management from December 31, 2024 included $6.9 billion from net outflows partially offset by $3.6 billion from positive market performance.

Previous wording

(2)Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from cash management strategies, and the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/

Current wording

(2)Represents open-end and closed-end fund distributions net of reinvestments, the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products, and the use of leverage.

Previous wording

(2) Consists of managed futures, event-driven, real estate securities, infrastructure, long/short and other strategies.

Current wording

(2) Consists of real estate securities, managed futures, event-driven, infrastructure and other strategies.

Previous wording

In the first quarter of 2025, total revenues decreased 1.9% to $217.9 million from $222.0 million in the first quarter of 2024, primarily as a result of decreased average fee rates during the current year period compared to the prior year period. Operating income increased $4.3 million to $36.6 million in the first quarter of 2025 compared to $32.3 million in the first quarter of 2024, due primarily to decreased employment expenses and amortization expense.

Current wording

In the second quarter of 2025, total revenues decreased 6.2% to $210.5 million from $224.4 million in the second quarter of 2024, primarily as a result of decreased average assets under management. Operating income increased $1.0 million to $45.2 million in the second quarter of 2025 compared to $44.2 million in the second quarter of 2024, due primarily to decreased employment expenses and amortization expense.

Previous wording

Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments. Investment management fees decreased by $2.3 million, or 1.2%, for the three months ended March 31, 2025, compared to the same period in the prior year primarily due to decreased fee rates during the current year period compared to the prior year period.

Current wording

Investment management fees are earned based on a percentage of assets under management and are paid pursuant to the terms of the respective investment management agreements, which generally require monthly or quarterly payments. Investment management fees decreased by $12.2 million, or 6.4%, and $14.4 million, or 3.8%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to decreased average assets under management.

Previous wording

Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services. Distribution and service fees decreased by $1.3 million, or 9.1%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Current wording

Distribution and service fees are sales- and asset-based fees earned from open-end funds for marketing and distribution services. Distribution and service fees decreased by $1.4 million, or 10.8%, and $2.7 million, or 9.9%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to lower sales and average assets under management for open-end funds in share classes that have sales- and asset-based distribution and service fees.

Previous wording

Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S. retail funds, ETFs and closed-end funds. Fund administration and shareholder service fees decreased by $0.7 million, or 3.6% for the three months ended March 31, 2025, compared to the same period in the prior year due to the decrease in average assets under management of our U.S. retail funds.

Current wording

Administration and shareholder service fees represent fees earned for fund administration and shareholder services from our U.S. retail funds, ETFs and closed-end funds. Fund administration and shareholder service fees decreased by $0.3 million, or 1.4%, and $0.9 million, or 2.5%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year due to the decrease in average assets under management of our U.S. retail funds.

Previous wording

Other income and fees primarily represent fees related to other fee-earning assets and marketing fees earned on certain ETFs. Other income and fees remained consistent during the three months ended March 31, 2025, compared to the same period in the prior year.

Current wording

Other income and fees primarily represent fees related to other fee-earning assets and certain ETFs. Other income and fees remained consistent during the three and six months ended June 30, 2025 compared to the same periods in the prior year.

Previous wording

Employment expenses consist of fixed and variable compensation and related employee benefit costs. Employment expenses of $109.1 million decreased by $6.1 million, or 5.3%, for the three months ended March 31, 2025 primarily due to a decrease in profit- and sales-based compensation.

Current wording

Employment expenses consist of fixed and variable compensation and related employee benefit costs. Employment expenses decreased by $7.6 million, or 7.2%, and $13.7 million, or 6.2%, for the three and six months ended June 30, 2025, respectively, primarily due to a decrease in profit- and sales-based compensation.

Previous wording

Distribution and other asset-based expenses consist primarily of payments to third-party client intermediaries for providing services to investors in sponsored investment products. These payments are primarily based on assets under management. Distribution and other asset-based expenses decreased $1.5 million, or 6.0%, for the three months ended March 31, 2025, primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Current wording

Distribution and other asset-based expenses consist primarily of payments to third-party client intermediaries for providing services to investors in sponsored investment products. These payments are primarily based on assets under management. Distribution and other asset-based expenses decreased $1.7 million, or 7.3%, and $3.2 million, or 6.6%, for the three and six months ended June 30, 2025, respectively, primarily due to decreases in assets under management in share classes that have asset-based distribution and other asset-based expenses.

Previous wording

Other operating expenses primarily consist of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs. Other operating expenses increased $1.7 million, or 5.4%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to increased rent for lease renewals and costs associated with lease terminations.

Current wording

Other operating expenses primarily consist of investment research and technology costs, software application and development expenses, professional fees, travel and distribution-related costs, rent and occupancy expenses, and other business costs. Other operating expenses decreased $0.5 million, or 1.5% for the three months ended June 30, 2025 primarily as a result of lower rent expense. Other operating expenses increased by $1.2 million, or 1.9%, for the six months ended June 30, 2025 compared to the same period in the prior year primarily due to costs associated with lease terminations during the first quarter of 2025.

Previous wording

Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements. Depreciation expense increased $0.3 million, or 15.6%, for the three months ended March 31, 2025, compared to the same period in the prior year primarily due to software and equipment purchases and the acceleration of depreciation on leasehold improvements associated with a terminated lease in the prior year.

Current wording

Depreciation expense consists primarily of the straight-line depreciation of furniture, equipment and leasehold improvements. Depreciation expense decreased by $0.3 million, or 11.6%, for the three months ended June 30, 2025 and remained consistent for the six months ended June 30, 2025, compared to the same periods in the prior year. The decrease in the three month period is primarily due to the prior year acceleration of depreciation on leasehold improvements associated with a terminated lease, partially offset by an increase as a result of software and equipment purchases.

Previous wording

Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives. Amortization expense decreased $2.4 million, or 15.6%, for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to intangible assets becoming fully amortized.

Current wording

Amortization expense consists of the amortization of definite-lived intangible assets over their estimated useful lives. Amortization expense decreased $2.3 million, or 14.8%, and $4.6 million, or 15.2%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year, primarily due to intangible assets becoming fully amortized.

Previous wording

Realized and unrealized gain (loss) on investments, net changed during the three months ended March 31, 2025 by $(4.4) million, compared to the same period in the prior year. The realized and unrealized gains and losses reflect changes in overall market conditions for the respective periods.

Current wording

Realized and unrealized gain (loss) on investments, net changed during the three and six months ended June 30, 2025 by $5.5 million and $1.1 million, respectively, compared to the same periods in the prior year. The realized and unrealized gains and losses reflect changes in overall market conditions for the respective periods.

Previous wording

Realized and unrealized gain (loss) of CIP, net changed by $(9.2) million for the three months ended March 31, 2025, compared to the same period in the prior year. The change for the three months ended March 31, 2025 consisted primarily of changes in net unrealized and realized losses of $39.3 million, due to changes in market values of leveraged loans, partially offset by unrealized gains of $30.1 million related to the value of the notes payable.

Current wording

Realized and unrealized gain (loss) of CIP, net changed by $7.7 million and $(1.5) million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. The change for the three months ended June 30, 2025 consisted primarily of changes in net unrealized gains of $14.2 million related to the value of the notes payable, partially offset by net unrealized and realized losses of $6.4 million due to changes in market values of leveraged loans. The change for the six months ended June 30, 2025 consisted primarily of changes in net unrealized and realized losses of $45.7 million, due to changes in market values of leveraged loans, partially offset by net unrealized gains of $44.2 million related to the value of the notes payable.

Previous wording

Other income (expense), net changed by $0.4 million for the three months ended March 31, 2025, compared to the same period in the prior year primarily due to changes in the gains and losses on our equity method investments.

Current wording

Other income (expense), net changed by $0.5 million and $1.0 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year due to changes in the gains and losses on our equity method investments, as well as foreign currency gains and losses.

Previous wording

Interest expense decreased $1.1 million, or 19.7%, for the three months ended March 31, 2025, primarily due to lower average debt outstanding and lower average interest rates during the current year period.

Current wording

Interest expense decreased $1.0 million, or 18.3%, and $2.1 million, or 19.0%, for the three and six months ended June 30, 2025, respectively, primarily due to lower average debt outstanding and lower average interest rates during the current year periods.

Previous wording

Interest and dividend income is earned on cash equivalents and our marketable securities. Interest and dividend income decreased $0.5 million, or 13.1% during the three months ended March 31, 2025 compared to the same period in the prior year primarily due to lower average interest rates and average investments in the current year period.

Current wording

Interest and dividend income is earned on cash equivalents and our marketable securities. Interest and dividend income decreased $0.6 million, or 22.3%, and $1.0 million, or 17.0%, during the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to lower average interest rates and average investments in the current year period.

Previous wording

Interest and dividend income of investments of CIP decreased $3.6 million, or 7.0%, for the three months ended March 31, 2025, compared to the same period in the prior year primarily due to lower average interest rates in the current year period.

Current wording

Interest and dividend income of investments of CIP decreased $6.3 million, or 12.1%, and $9.9 million, or 9.6%, for the three and six months ended June 30, 2025, respectively, compared to the same period in the prior year primarily due to lower average interest rates in the current year period.

Previous wording

Interest expense of CIP represents interest expense on the notes payable of CIP. Interest expense of CIP decreased by $5.5 million, or 13.6% for the three months ended March 31, 2025 compared to the same period in the prior year, primarily due to lower average interest rates in the current year period.

Current wording

Interest expense of CIP represents interest expense on the notes payable of CIP. Interest expense of CIP decreased by $8.5 million, or 20.2%, and $13.9 million, or 17.0%, for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year, primarily due to lower average interest rates in the current year period.

Previous wording

The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 30.6% and 18.9% for the three months ended March 31, 2025 and 2024, respectively. The higher estimated effective tax rate for the three months ended March 31, 2025 was primarily due to a change in valuation allowances in the current year related to the tax effects of realized and unrealized losses on Company investments compared to realized and unrealized gains in the prior year.

Current wording

The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 25.9% and 24.4% for the six months ended June 30, 2025 and 2024, respectively. The higher estimated effective tax rate for the six months ended June 30, 2025 was primarily due to a change in valuation allowances in the current year related to the tax effects of lower realized and unrealized gains on Company investments compared to the prior year.

Previous wording

At March 31, 2025, we had $135.4 million of cash and cash equivalents and $119.9 million of investments, which included $81.5 million of investment securities, compared to $265.9 million of cash and cash equivalents and $119.2 million of investments, which included $83.8 million of investment securities, at December 31, 2024.

Current wording

At June 30, 2025, we had $172.2 million of cash and cash equivalents and $120.6 million of investments, which included $82.9 million of investment securities, compared to $265.9 million of cash and cash equivalents and $119.2 million of investments, which included $83.8 million of investment securities, at December 31, 2024.

Previous wording

Net cash used in operating activities of $3.8 million for the three months ended March 31, 2025 decreased by $30.7 million from net cash used in operating activities of $34.5 million for the same period in the prior year primarily due to an increase of $27.9 million in net sales of investments by CIP in the current year period.

Current wording

Net cash provided by operating activities of $72.0 million for the six months ended June 30, 2025 increased by $36.5 million from net cash provided by operating activities of $35.4 million for the same period in the prior year primarily due to an increase of $36.4 million in net sales of investments by CIP in the current year period.

Previous wording

Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations. Net cash used in investing activities of $3.0 million for the three months ended March 31, 2025 increased by $0.5 million from net cash used in investing activities of $2.5 million for the same period in the prior year primarily due to an increase in capital expenditures in the current year.

Current wording

Cash flows from investing activities consist primarily of capital expenditures and other investing activities related to our business operations. Net cash used in investing activities of $4.0 million for the six months ended June 30, 2025 was consistent with net cash used in investing activities of $3.8 million for the same period in the prior year.

Previous wording

Cash flows from financing activities consist primarily of transactions related to our common shares, issuance and repayment of debt by us and CIP, payments of contingent consideration and purchases and sales of noncontrolling interests. Net cash used in financing activities of $174.5 million for the three months ended March 31, 2025 increased by $118.3 million from net cash used of $56.1 million for the same period in the prior year primarily due to an increase of $105.8 million in payments on borrowings by CIP during the current year period and an increase of $15.0 million in repurchases of our common shares during the current year period.

Current wording

Cash flows from financing activities consist primarily of transactions related to our common shares, issuance and repayment of debt by us and CIP, payments of contingent consideration and purchases and sales of noncontrolling interests. Net cash used in financing activities of $226.5 million for the six months ended June 30, 2025 increased by $204.7 million from net cash used of $21.8 million for the same period in the prior year primarily due to a $173.9 million decrease in net borrowings of CIP and an increase of $32.5 million in repurchases of our common shares during the current year period.

Previous wording

The Company's credit agreement, as amended (the "Credit Agreement"), comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026. The Company repaid $0.7 million outstanding under the Term Loan during the three months ended March 31, 2025 and had $235.4 million outstanding under the Term Loan at March 31, 2025. In accordance with ASC 835, Interest, the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheets net of related debt issuance costs, which were $3.7 million as of March 31, 2025.

Current wording

The Company's credit agreement, as amended (the "Credit Agreement"), comprises (i) a $275.0 million term loan with a seven-year term (the "Term Loan") expiring in September 2028, and (ii) a $175.0 million revolving credit facility with a five-year term expiring in September 2026. The Company repaid $1.4 million outstanding under the Term Loan during the six months ended June 30, 2025 and had $234.7 million outstanding under the Term Loan at June 30, 2025. In accordance with ASC 835, Interest, the amounts outstanding under the Company's Term Loan are presented on the Condensed Consolidated Balance Sheets net of related debt issuance costs, which were $3.4 million as of June 30, 2025.