PRUDENTIAL FINANCIAL INC

PGIM provides a comprehensive array of investment management solutions to institutional investors, retail clients, and our affiliated insurance and retirement businesses.

Investment Asset Classes

We distribute products and provide investment management capabilities through third-party client channels to both institutional and retail clients. Our centralized approach to product development, distribution, and marketing provide our clients with innovative investment solutions across our public and private markets capabilities. Our major distribution channels are:

•Institutional—The Institutional Client Group develops relationships with large institutions globally, coordinating with integrated teams across regions and countries that provide specialized support by asset class.

•Retail—Retail and Financial Intermediary Distribution offers actively managed investment solutions, including mutual funds, listed and unlisted closed-end funds, exchange-traded funds (“ETFs”), and separately managed accounts to individual investors, defined contribution plans, and financial intermediaries in the U.S., as well as Undertakings for the Collective Investment in Transferable Securities (“UCITS”) and other investment solutions to financial intermediaries in select countries across Europe, Asia, and Latin America.

In addition to these third-party client channels, PGIM provides investment management services across a broad array of asset classes for the Company’s general account and certain separate accounts of our affiliated insurance and retirement businesses.

Our revenues primarily come in the form of asset management fees, which are typically calculated based upon a percentage of assets under management. In certain asset management arrangements, we also receive performance-based incentive fees when the return on the managed assets exceeds certain benchmark returns or other performance targets. In addition, we earn revenues from commercial mortgage origination and servicing, along with transaction fees that are primarily related to real estate and private fixed income in connection with the structuring, sale, or purchasing of assets.

Additionally, we hold seed and co-investments in some of our investment products to either (i) seed new products or investment strategies in order to develop a track record prior to obtaining third-party investments, or (ii) co-invest alongside clients in PGIM-managed funds to demonstrate that our interests are aligned with theirs. As a result, we participate in the investment returns from these seed and co-investments.

Our profitability is substantially impacted by macro market movements (e.g., interest rates, credit spreads, and equity market performance), our ability to achieve investment returns above the target benchmarks, and our ability to attract and retain client investments.

We compete with numerous asset managers and other financial institutions. For our investment management products, we compete based on a number of factors, including investment performance, strategy and process, talent, organizational stability, and client relationships. We offer products across multiple asset classes, with specialized investment teams that employ approaches designed to add value in each product area or asset class. Our organizational stability and robust institutional and retail businesses have helped attract and retain talent critical to delivering investment results for clients. Our private credit and commercial real estate lending businesses compete based on price, terms, execution, and the strength of our relationship with the borrower. Our public fixed income investment capability competes based on our ability to deliver robust investment returns and customized solutions while maintaining operational excellence.