VIRTUS INVESTMENT PARTNERS, INC.

Notes to Condensed Consolidated Financial Statements

1. Organization and Business

Virtus Investment Partners, Inc. (the "Company," "we," "us," "our" or "Virtus"), a Delaware corporation, operates in the investment management industry through its subsidiaries.

The Company provides investment management and related services to institutions and individuals. The Company's investment strategies are offered to institutional clients through institutional separate and commingled accounts, including subadvisory services to other investment advisers as well as collateral management of structured products. The Company’s investment management services are provided to individuals through products consisting of: mutual funds registered pursuant to the Investment Company Act of 1940, as amended that include U.S. retail funds, exchange-traded funds ("ETFs"), Undertaking for Collective Investment in Transferable Securities and Qualifying Investor Funds ("global funds" and collectively with U.S. retail funds and ETFs the "open-end funds"); closed-end funds (collectively with open-end funds, the "funds"); retail separate accounts sold through intermediaries and wealth advisory services provided to high net worth clients through our wealth management business.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations. Operating results for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC"). The Company’s significant accounting policies, which have been consistently applied, are summarized in its 2025 Annual Report on Form 10-K.

Certain prior period balances on the Condensed Consolidated Balance Sheets have been reclassified to conform to the current period presentation. These changes, which had no effect on net income, total comprehensive income, total assets, or total liabilities and equity as previously reported, are as follows:

▪With the acquisition of 56% of the equity of Keystone National Group, LLC ("Keystone") on March 1, 2026, the Company has separately reported its investment manager noncontrolling interests liability on its Condensed Consolidated Balance Sheets. Other investment manager noncontrolling interests liabilities classified within accrued compensation and benefits in prior periods have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

New Accounting Standards Not Yet Implemented

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The standard requires enhanced disclosures of certain expense captions presented on the face of the Consolidated Income Statement. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective Date which clarifies that the standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted with amendments to be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic

350-40). The standard amends certain aspects of the accounting for internal-use software costs by requiring an entity to capitalize software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2027. Early adoption is permitted using a prospective, modified or retrospective transition approach. The Company is in the process of evaluating the impact of adopting this standard and, at this time, does not anticipate it will have a material impact on its condensed consolidated financial statements.

3. Revenues

The Company's revenues are recognized when a performance obligation is satisfied, which occurs when control of the services is transferred to clients. Investment management fees are generally calculated as either a percentage of average or period end net assets of the investment portfolios managed. Distribution and service fees and administration and shareholder service fees are generally calculated as a percentage of average net assets of the investment portfolios managed. The net asset values from which these fees are calculated are variable in nature and subject to factors outside of the Company's control, such as additional investments, withdrawals and market performance. Because of this, these fees are considered constrained until the end of the contractual measurement period (monthly or quarterly), which is when asset values are generally determinable. Incentive fees are recognized on certain management contracts when performance hurdles or other specified criteria are achieved upon completion of each contractually determined measurement period and are not subject to clawback.

Investment Management Fees by Source

The following table summarizes investment management fees by source:

4. Acquisitions

On March 1, 2026, the Company completed the acquisition of 56% of the equity of Keystone (the "Acquisition"), an investment manager specializing in asset-centric private credit. The Acquisition expands the Company's offerings into private markets with the addition of a differentiated asset-backed lending capability. The total purchase price of the Acquisition was $308.2 million, comprising $198.8 million paid in cash and $109.4 million in contingent consideration recorded at fair value. The initial contingent consideration consists of $88.1 million in deferred cash consideration at fair value, which represents payments of $65.0 million and $30.0 million to be paid on the first and second anniversary of the acquisition, and a fair value estimate of $21.3 million in contingent consideration related to potential earn-out payments of a maximum of $75.0 million that are based on pre-established performance metrics related to revenue retention and revenue growth rates.

The Company accounted for the Acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired, liabilities assumed and noncontrolling interests based upon their estimated fair values at the date of the Acquisition, as well as goodwill and definite-lived intangible assets of $243.8 million and $307.0 million, respectively. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations and could differ materially from the preliminary purchase price allocation and may include changes to various balances, including fixed assets, intangible assets and goodwill. The finalization of the purchase price allocation will not extend beyond the one-year measurement period provided under ASC 805.

The following table summarizes the initial estimate of amounts of identified acquired assets, liabilities assumed and noncontrolling interests as of the acquisition date:

Identifiable Intangible Assets Acquired

In connection with the allocation of the purchase price, we identified the following intangible assets:

The fair value of investment management agreements was estimated using a multi-period excess earnings method and the fair value of the trade name was estimated using a royalty savings method.

Redeemable Noncontrolling Interests and Investment Manager Noncontrolling Interests Liability

Represents the noncontrolling interests of Keystone equity units subject to holder put rights and Company call rights and conditional and unconditional redemption provisions depending on unit class. Noncontrolling interests with conditional redemption provisions are classified as redeemable noncontrolling interests and noncontrolling interests with unconditional redemption provisions are classified as a liability. The fair value of these noncontrolling interests was estimated by applying the income and market approach valuation methodologies. Significant assumptions and inputs include discount rate (10%-11%) and future revenue and earnings assumptions. See Note 14 for further discussion.

Acquired Business

Revenues and earnings of Keystone subsequent to the closing date of the Acquisition of March 1, 2026 for the three and seven months ended September 30, 2026 were as follows:

(1) Includes $7.3 million and $17.1 million of amortization expense in the three- and seven-month periods, respectively, related to the identifiable intangible assets acquired.

The following unaudited pro-forma condensed consolidated results of operations are provided for illustrative purposes only and assume that the Acquisition occurred on January 1, 2025. The unaudited pro-forma information also reflects adjustments for transaction and integration expenses as if the transaction had been consummated on January 1, 2025. This unaudited pro-forma information should not be relied upon as being indicative of historical results that would have been obtained if the Acquisition had occurred on that date, nor of the results that may be obtained in the future.

For the three and nine months ended September 30, 2026, the Company incurred zero and $5.9 million, respectively, in transaction and integration costs associated with the Acquisition, which are included in other operating expenses on the Company's Condensed Consolidated Statements of Operations.

5. Goodwill and Intangible Assets, Net

Activity in goodwill was as follows:

Below is a summary of intangible assets, net:

Definite-lived intangible asset amortization for the remainder of fiscal year 2026 and succeeding fiscal years is estimated as follows:

6. Investments

Investments consist primarily of investments in equity method investments and the Company's sponsored products. The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 15, at September 30, 2026 and December 31, 2025 were as follows:

(1) The Company's equity method investments are valued on a three-month lag based upon the availability of financial information.

Investment Securities - fair value

Investment securities - fair value consist of investments in the Company's sponsored funds and in separate accounts. The composition of the Company’s investment securities - fair value was as follows:

For the three and nine months ended September 30, 2026, the Company recognized net realized gains of $0.3 million and $3.6 million, respectively, related to its investment securities - fair value. For the three and nine months ended September 30, 2025, the Company recognized net realized gains of $0.8 million and $0.8 million, respectively, related to its investment securities - fair value.

7. Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 15, as of September 30, 2026 and December 31, 2025 by fair value hierarchy level were as follows:

September 30, 2026

December 31, 2025

The following is a discussion of the valuation methodologies used for the Company’s assets measured at fair value.

Cash equivalents represent investments in money market funds. Cash investments in money market funds are valued using published net asset values and are classified as Level 1.

Sponsored funds represent investments in funds for which the Company acts as the investment manager. The fair values of U.S. retail funds and global funds are determined based on their published net asset values and are categorized as Level 1. The fair values of closed-end funds and ETFs are determined based on the official closing price on the exchange on which they are traded and are categorized as Level 1.

Equity securities represent securities traded on active markets, are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.

Debt securities represent investments in corporate and government bonds and the note securities of collateralized loan obligations ("CLO"). The fair values of corporate and government bonds traded on active markets are valued at the official closing price on the exchange on which the securities are primarily traded and are categorized as Level 1. Debt securities for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service, are categorized as Level 2. The fair value of note securities of CLOs are based on valuations received from an independent valuation firm and are categorized as Level 3.

The following table presents a reconciliation of beginning and ending balances of the Company's level 3 debt securities:

Nonqualified retirement plan assets represent U.S. retail funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.

Contingent consideration represents liabilities associated with contingent payment arrangements made in connection with the Company's business combinations. In these contingent payment arrangements, the Company agrees to pay additional transaction consideration to the seller based on future performance and/or the passage of time. Contingent consideration is remeasured at fair value each reporting date using a simulation model or an income approach valuation technique with the assistance of an independent valuation firm, approved by management and is categorized as Level 3.

The following table presents a reconciliation of beginning and ending balances of the Company's contingent consideration liabilities:

The contingent consideration liability as of September 30, 2026 was comprised of the following:

▪Keystone Acquisition liability as of September 30, 2026 was $96.7 million, measured using an option-pricing model and discounted cash flow valuation technique. The most significant unobservable inputs used relate to the discount rates (range of 6.42% -6.97%) and the market price of risk adjustment (5.60%).

▪NFJ Group transaction liability as of September 30, 2026 was $11.3 million measured using an option-pricing model valuation technique. The most significant unobservable inputs used relate to the revenue growth rates, discount rates (6.15%) and the market price of risk adjustment (6.20%).

Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments.

8. Equity Transactions

Dividends Declared

On August 19, 2026, the Company declared a quarterly cash dividend of $2.45 per common share to be paid on November 13, 2026 to shareholders of record at the close of business on October 30, 2026.

Common Stock Repurchases

During the three and nine months ended September 30, 2026, the Company repurchased 64,666 and 208,226 common shares, respectively, under its share repurchase program at a weighted average price of $154.61 and $144.04 per share, respectively, for a total cost, including fees and expenses, of $10.0 million and $30.0 million, respectively. As of September 30, 2026,597,722 shares remained available for repurchase. Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price and prevailing market and business conditions. The program, which has no specified term, may be suspended or terminated at any time.

9. Stock-Based Compensation

Equity-based awards, including restricted stock units ("RSUs"), performance stock units ("PSUs"), stock options and unrestricted shares of common stock, may be granted to officers, employees and directors of the Company pursuant to the Company's Amended and Restated Omnibus Incentive and Equity Plan (the "Omnibus Plan"). At September 30, 2026,472,105 shares of common stock remained available for issuance of the 3,825,000 shares that are authorized for issuance under the Omnibus Plan.

Stock-based compensation expense is summarized as follows:

Restricted Stock Units

Each RSU entitles the holder toone share of common stock when the restriction expires. RSUs may be time-vested or performance-contingent PSUs that convert into RSUs after performance measurement is complete and generally vest inone tothree years. Shares that are issued upon vesting are newly issued shares from the Omnibus Plan and are not issued from treasury stock.

RSU activity, inclusive of PSUs, for the nine months ended September 30, 2026 is summarized as follows:

For the nine months ended September 30, 2026 and 2025, a total of 44,419 and 43,532 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations and for which the Company paid $5.7 million and $7.6 million, respectively, in minimum employee tax withholding obligations. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting.

During the nine months ended September 30, 2026 and 2025, the Company granted 48,754 and 37,777 PSUs, respectively, that contain performance-based metrics in addition to a service condition. Compensation expense for PSUs is generally recognized over athree-year service period based upon the value determined using a combination of (i) the intrinsic value method, for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718, Stock Compensation ("ASC 718") and (ii) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718. Compensation expense for PSU awards that contain a market condition is fixed at the date of grant and will not be adjusted in future periods based upon the achievement of the market condition. Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period.

As of September 30, 2026, unamortized stock-based compensation expense for unvested RSUs and PSUs was $36.2 million with a weighted-average remaining contractual life of 1.4 years.

10. Earnings (Loss) Per Share

Earnings (loss) per share ("EPS") is calculated in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing net income (loss) attributable to Virtus Investment Partners, Inc. by the weighted-average number of common shares outstanding for the period, excluding dilution for potential common stock issuances. Diluted EPS reflects the potential dilution from securities or other contracts to issue common stock, including shares issuable upon the vesting of RSUs and the exercise of stock options, using the treasury stock method.

The computation of basic and diluted EPS is as follows:

The following table details the securities that have been excluded from the above computation of weighted-average number of shares for diluted EPS, because the effect would be anti-dilutive.

11. Income Taxes

In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances at each interim period. On a quarterly basis, the estimated annual effective tax rate is adjusted, as appropriate, based upon changes in facts and circumstances, if any, compared to those forecasted at the beginning of the fiscal year and at each interim period thereafter.

The provision for income taxes reflected U.S. federal, state and local taxes at an estimated effective tax rate of 26.8% and 27.0% for the nine months ended September 30, 2026 and 2025, respectively. The lower estimated effective tax rate for the nine months ended September 30, 2026 was primarily due to a change in valuation allowances in the current year related to the tax effects of higher realized and unrealized gains on Company investments compared to the prior year and the rate impact of lower pre-tax income.

12. Debt

Credit Agreement

The Company's credit agreement (the "Credit Agreement") provides for (i) a $400.0 million term loan for the Company with aseven-year term (the "Term Loan") expiring in September 2032, and (ii) a $250.0 million revolving credit facility (the "Revolver") with afive-year term expiring in September 2030. The Company borrowed $50.0 million under the Revolver during the nine months ended September 30, 2026. During the nine months ended September 30, 2026, the Company repaid $35.0 million and $3.0 million outstanding under the Revolver and Term Loan, respectively. At September 30, 2026, the Company had $15.0 million and $396.0 million outstanding under the Revolver and Term Loan, respectively. 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 $8.0 million as of September 30, 2026.

13. Commitments and Contingencies

Legal Matters

The Company is involved from time to time in litigation and arbitration, as well as examinations, inquiries and investigations by various regulatory bodies, involving its compliance with, among other things, securities laws, client investment guidelines, laws governing the activities of broker-dealers and other laws and regulations affecting its products and other activities.

The Company records a liability when it believes that it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Based on information currently available, available insurance coverage, indemnities and established reserves, the Company believes that the outcomes of its legal and regulatory proceedings are not likely, either individually or in the aggregate, to have a material adverse effect on the Company's results of operations, cash flows or consolidated financial condition. However, in the event of unexpected subsequent developments, and given the inherent unpredictability of these legal and regulatory matters, the Company can provide no assurance that its assessment of any legal matter will reflect the ultimate outcome, and an adverse outcome in certain matters could have a material adverse effect on the Company's results of operations or cash flows in particular quarterly or annual periods.

14. Redeemable Noncontrolling Interests and Investment Manager Noncontrolling Interests Liability

Minority interests held in majority-owned investment management subsidiaries are subject to certain redemption provisions which may consist of holder put and company call rights and/or other conditional and unconditional redemption features. The rights are exercisable at pre-established intervals or upon certain conditions, such as death, disability or retirement and are redeemable at a pre-established fixed redemption price during a discrete period or pre-established multiples of earnings before interest, taxes, depreciation and amortization. These redemption provisions are not legally detachable or separately exercisable and are deemed to be embedded in the related noncontrolling interests. The Company, in purchasing equity of the investment management subsidiary, has the option to settle in cash or shares of the Company's common stock and is entitled to the cash flow associated with any purchased equity.

Redeemable noncontrolling interests

Minority interests held in majority-owned investment management subsidiaries that are subject to conditional or contingent redemption provisions are classified as mezzanine equity within redeemable noncontrolling interests on the Company's Consolidated Balance Sheets and recorded at estimated redemption value, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests.

Redeemable noncontrolling interests for the nine months ended September 30, 2026 included the following amounts:

(1) See Note 15 for further description of the Company's consolidated investment products.

(2) Relates to noncontrolling interests redeemable at other than fair value.

Investment Manager Noncontrolling Interests Liability

Minority interests held in a majority-owned investment management subsidiary that are subject to unconditional redemption provisions are considered mandatorily redeemable and classified as a liability. This liability is recorded at the greater of the estimated redemption value or the initial fair value with any changes recorded on the Condensed Consolidated

Statements of Operations within other expenses along with any distributions earned and paid. The balance as of September 30, 2026 was $140.4 million primarily attributable to the Keystone acquisition (see Note 4).

Equity awards of majority owned investment management subsidiary

The Company issues equity-based profit-interest awards of a majority owned investment manager to its employees, with awards having up to athree-year vesting period when issued. These profit-interest awards are subject to holder put rights and Company call rights at pre-established multiples of earnings before interest, taxes, depreciation and amortization, with certain awards also subject to pre-established thresholds. The awards are accounted for as cash-settled liability awards under ASC 718, with changes in value at each reporting date recognized as compensation expense over the requisite service period, if any, in the Company’s Condensed Consolidated Statements of Operations. The awards are classified as a liability within investment manager noncontrolling interests liability on the Condensed Consolidated Balance Sheets until the awards are settled. Additionally, these awards have a right to participate in distributions of the investment manager which are recorded as employment expense in the Company’s Condensed Consolidated Statements of Operations.

The liability associated with these awards was $1.6 million and $14.4 million at September 30, 2026 and December 31, 2025, respectively. Compensation expense related to these awards totaled $(3.9) million and $(1.4) million for the nine months ended September 30, 2026 and 2025, respectively.

15. Consolidation

The condensed consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated. A voting interest entity ("VOE") is consolidated when the Company is considered to have a controlling financial interest, which is typically present when the Company owns a majority of the voting interest in an entity or otherwise has the power to govern the financial and operating policies of the entity.

The Company evaluates any variable interest entity ("VIE") in which the Company has a variable interest for consolidation. A VIE is an entity in which either (i) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support, or (ii) where, as a group, the holders of the equity investment at risk do not possess any one of the following: (a) the power through voting or similar rights to direct the activities that most significantly impact the entity's economic performance, (b) the obligation to absorb expected losses or the right to receive expected residual returns of the entity, or (c) proportionate voting and economic interests and where substantially all of the entity's activities either involve or are conducted on behalf of an investor with disproportionately fewer voting rights. If an entity has any of these characteristics, it is considered a VIE and is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that has both the power to direct the activities that most significantly impact the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

In the normal course of its business, the Company sponsors various investment products, some of which are consolidated by the Company. CIP includes both VOEs, made up primarily of ETFs and U.S. retail funds in which the Company holds a controlling financial interest, and VIEs which consist of collateralized loan obligations ("CLO") and certain global and private funds ("GF") of which the Company is considered the primary beneficiary. The consolidation and deconsolidation of these investment products have no impact on the Company's net income (loss). The Company's risk with respect to these investment products is limited to its beneficial interests in these products. The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company's investment in, and fees generated from, these products.

The following table presents the balances of CIP that, after intercompany eliminations, were reflected on the Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025:

Consolidated CLOs

The majority of the Company's CIP that are VIEs are CLOs. A majority-owned consolidated private fund, whose primary purpose is to invest in CLOs for which the Company serves as the collateral manager, is also included. At September 30, 2026, the Company consolidated eight CLOs. On September 30, 2026, the Company issued a new CLO and in conjunction with the issuance, made a $28.4 million investment in the subordinated notes. The financial information of CLOs is included in the Company's condensed consolidated financial statements on a one-month lag based upon the availability of their financial information.

Investments of CLOs

The CLOs held investments of $2.4 billion at September 30, 2026, consisting of bank loan investments that comprise the majority of the CLOs' portfolio asset collateral and are senior secured corporate loans across a variety of industries. These bank loan investments mature at various dates between 2026 and 2033 and generally pay interest at SOFR plus a spread.

Notes Payable of CLOs

The CLOs held notes payable with a total value, at par, of $2.6 billion at September 30, 2026, consisting of senior secured floating rate notes payable with a par value of $2.3 billion and subordinated notes with a par value of $271.8 million. These note obligations bear interest at variable rates based on SOFR plus a pre-defined spread.

The Company's beneficial interests and maximum exposure to loss related to these consolidated CLOs is limited to (i) ownership in the subordinated notes and (ii) accrued management fees. The secured notes of the consolidated CLOs have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative prescribed by ASU 2014-13, Consolidation (Topic 810) ("ASU 2014-13"), results in the net assets of the consolidated CLOs shown above to be equivalent to the beneficial interests retained by the Company at September 30, 2026, as shown in the table below:

The following table represents income and expenses of the consolidated CLOs included in the Company’s Condensed Consolidated Statements of Operations for the period indicated:

The following table represents the Company’s own economic interests in the consolidated CLOs, which are eliminated upon consolidation:

Fair Value Measurements of CIP

The assets and liabilities of CIP measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025 by fair value hierarchy level were as follows:

The following is a discussion of the valuation methodologies used for the assets and liabilities of the Company’s CIP measured at fair value:

Level 1 assets represent cash investments in money market funds, debt and equity investments, and derivatives (futures) that are valued using published net asset values or the official closing price on the exchange on which the securities are traded.

Level 2 assets represent most debt securities (including bank loans), certain equity securities (including non-U.S. securities), and derivatives (forwards and swaps), for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) by an independent pricing service. Debt investments, other than bank loans, are valued based on quotations received from independent pricing services or from dealers who make markets in such securities. Bank loan investments, which are included as debt investments, are generally priced at the average mid-point of bid and ask quotations obtained from a third-party pricing service utilizing matrix pricing models that consider information regarding securities with similar characteristics. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics.

Level 3 assets include debt and equity securities that are not widely traded, are illiquid or are priced by dealers based on pricing models used by market makers in the security. These securities are valued using significant unobservable inputs and may be based on internal valuation committees' assumptions in determining fair value or unadjusted prices from independent pricing services.

Level 1 liabilities consist of derivatives (short sales and futures). These liabilities are recorded on the Condensed Consolidated Balance Sheets within other liabilities of CIP and are classified as Level 1 based on the underlying equity security.

Level 2 liabilities primarily consist of notes payable issued by CLOs and are measured using the measurement alternative in ASU 2014-13. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (i) the fair value of the beneficial interests held by the Company, and (ii) the carrying value of any beneficial interests that represent compensation for services. The fair value of the beneficial interests held by the Company is based on third-party pricing information without adjustment.

The securities purchased payable at September 30, 2026 and December 31, 2025 approximated fair value due to the short-term nature of the instruments.

The following table is a reconciliation of assets of CIP for Level 3 investments for which significant unobservable inputs were used to determine fair value:

(1)The investments that are categorized as Level 3 were valued utilizing third-party pricing information without adjustment. Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/unobservable at period end.

Nonconsolidated VIEs

The Company serves as the collateral manager for other CLOs that are not consolidated. The assets and liabilities of these CLOs reside in bankruptcy remote, special purpose entities in which the Company has no ownership of, nor holds any notes issued by, the CLOs, and provides neither recourse nor guarantees. The Company has determined that the investment management fees it receives for serving as collateral manager for these CLOs did not represent a variable interest as (i) the fees the Company earns are compensation for services provided and are commensurate with the level of effort required to provide the investment management services, (ii) the Company does not hold other interests in the CLOs that individually, or in the aggregate, would absorb more than an insignificant amount of the CLOs' expected losses or receive more than an insignificant amount of the CLOs' expected residual return, and (iii) the investment management arrangement only includes terms, conditions and amounts that are customarily present in arrangements for similar services negotiated at arm's length.

The Company has interests in certain other VIEs that the Company does not consolidate as it is not the primary beneficiary since its interest in these entities does not provide the Company with the power to direct the activities that most significantly impact the entities' economic performance. At September 30, 2026, the carrying value and maximum risk of loss related to the Company's interest in these VIEs was $64.6 million.

16. Segments

The key GAAP measure of segment profit or loss that the chief operating decision maker ("CODM") uses to evaluate the Company’s financial performance and allocate resources of the Company is net income, as reported on the Company’s Condensed Consolidated Statements of Operations. In addition, the CODM uses net income in deciding whether to reinvest profits or allocate profits to other uses of capital, such as for acquisitions or to pay dividends. All expense categories on the Condensed Consolidated Statements of Operations are significant and there are no other significant segment expenses that would require disclosure. Assets provided to the CODM are consistent with those reported on the Condensed Consolidated Balance Sheets.