BrightSphere Investment Group Inc

Previous wording

•U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023 includes an explanation of changes in our U.S. GAAP revenue, expense and other items for the three and six months ended June 30, 2024 and 2023, as well as key U.S. GAAP operating metrics.

Current wording

•U.S. GAAP Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 includes an explanation of changes in our U.S. GAAP revenue, expense and other items for the three and nine months ended September 30, 2024 and 2023, as well as key U.S. GAAP operating metrics.

Previous wording

•Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis includes an explanation of the key differences between U.S. GAAP net income and ENI, the key measure management uses to evaluate our performance. This section also provides a reconciliation between U.S. GAAP net income attributable to controlling interests and ENI for the three and six months ended June 30, 2024 and 2023, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics. In addition, this section provides segment analysis for our business segment.

Current wording

•Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis includes an explanation of the key differences between U.S. GAAP net income and ENI, the key measure management uses to evaluate our performance. This section also provides a reconciliation between U.S. GAAP net income attributable to controlling interests and ENI for the three and nine months ended September 30, 2024 and 2023, as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics. In addition, this section provides segment analysis for our business segment.

Previous wording

Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure. We earn management fees based on assets under management. Approximately 80% of our management fees for the three months ended June 30, 2024 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows. We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $16 billion, or 14%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee. The majority of these performance fees are calculated based on value added over the relevant benchmarks on a rolling one-year basis.

Current wording

Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure. We earn management fees based on assets under management. Approximately 80% of our management fees for the three months ended September 30, 2024 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM. Changes in the levels of our AUM are driven by market investment performance and net client cash flows. We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $20 billion, or 16%, of our AUM are in accounts with incentive fee features in which we participate in the performance fee. The majority of these performance fees are calculated based on value added over the relevant benchmarks on a rolling one-year basis.

Previous wording

The following table summarizes our unaudited results of operations for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our unaudited results of operations for the three and nine months ended September 30, 2024 and 2023:

Previous wording

(3)Excludes severance-related items at Acadian of $(0.3) million, costs associated with the transfer of an insurance policy from our former parent of $0.4 million, and costs associated with the wind-down of the Multi-Asset Class Strategies, or “MACS” business in the standalone format of $1.3 million for the three months ended June 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.2 million for the three months ended June 30, 2023. Excludes severance-related items at Acadian of $(0.5) million, costs associated with the transfer of an insurance policy from our former Parent of $0.6 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the six months ended June 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.6 million for the six months ended June 30, 2023.

Current wording

(3)Excludes severance-related items at Acadian of $(0.3) million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended September 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended September 30, 2023. Excludes severance-related items at Acadian of $(0.8) million, costs associated with the transfer of an insurance policy from our former Parent of $0.9 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the nine months ended September 30, 2024. Excludes costs associated with the transfer of an insurance policy from our former parent of $0.9 million for the nine months ended September 30, 2023.

Previous wording

At June 30, 2024, our total assets under management were $112.6 billion, an increase of $2.2 billion, or 2.0%, compared to $110.4 billion at March 31, 2024 and an increase of $12.7 billion, or 12.7%, compared to $99.9 billion at June 30, 2023. The increase in assets under management compared to June 30, 2023 was driven by the equity market appreciation in the last twelve months. The change in assets under management during the three months ended June 30, 2024 reflects net market appreciation of $2.2 billion, and flat net flows. The change in assets under management during the six months ended June 30, 2024 reflects net market appreciation of $8.5 billion and net inflows of $0.4 billion. Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM. Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements during the period can impact AUM when the strength of the U.S. dollar changes relative to other currencies.

Current wording

At September 30, 2024, our total assets under management were $120.3 billion, an increase of $7.7 billion, or 6.8%, compared to $112.6 billion at June 30, 2024 and an increase of $22.9 billion, or 23.5%, compared to $97.4 billion at September 30, 2023. The increase in assets under management compared to September 30, 2023 was driven by the equity market appreciation in the last twelve months. The change in assets under management during the three months ended September 30, 2024 reflects net market appreciation of $7.2 billion, and net inflows of $0.5 billion. The change in assets under management during the nine months ended September 30, 2024 reflects net market appreciation of $15.7 billion and net inflows of $0.9 billion. Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM. Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements during the period can impact AUM when the strength of the U.S. dollar changes relative to other currencies.

Previous wording

For the three months ended June 30, 2024, our net flows were flat compared to $0.1 billion for the three months ended June 30, 2023. Reinvested income and distributions of $0.8 billion and $0.9 billion are reflected in the net flows for the three months ended June 30, 2024 and June 30, 2023, respectively. For the three months ended June 30, 2024, the annualized revenue impact of the net flows was $1.4 million compared to $0.9 million for the three months ended June 30, 2023. Gross inflows of $8.3 billion in the three months ended June 30, 2024 yielded approximately 33 bps compared to $2.0 billion yielding approximately 46 bps in the year-ago period. Gross outflows of $(9.1) billion yielded approximately 32 bps in the three months ended June 30, 2024 compared to $(2.8) billion yielding approximately 43 bps in the year-ago period.

Current wording

For the three months ended September 30, 2024, our net flows were $0.5 billion compared to $(0.5) billion for the three months ended September 30, 2023. Reinvested income and distributions of $0.9 billion and $0.9 billion are reflected in the net flows for the three months ended September 30, 2024 and September 30, 2023, respectively. For the three months ended September 30, 2024, the annualized revenue impact of the net flows was $6.9 million compared to $(0.3) million for the three months ended September 30, 2023. Gross inflows of $3.1 billion in the three months ended September 30, 2024 yielded approximately 57 bps compared to $2.5 billion yielding approximately 51 bps in the year-ago period. Gross outflows of $(3.5) billion yielded approximately 40 bps in the three months ended September 30, 2024 compared to $(3.9) billion yielding approximately 42 bps in the year-ago period.

Previous wording

For the six months ended June 30, 2024, our net flows were $0.4 billion compared to $0.2 billion for the six months ended June 30, 2023. The change in net flows during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by increased sales in the six months ended June 30, 2024. Reinvested income and distributions of $1.6 billion and $1.8 billion are reflected in the net flows for the six months ended June 30, 2024 and June 30, 2023, respectively. For the six months ended June 30, 2024, the annualized revenue impact of the net flows was $1.2 million compared to $1.9 million for the six months ended June 30, 2023. Gross inflows of $12.6 billion in the six months ended June 30, 2024 yielded approximately 35 bps compared to $4.2 billion yielding approximately 44 bps in the year-ago period. Gross outflows of $(13.8) billion yielded approximately 36 bps in the six months ended June 30, 2024 compared to $(5.8) billion yielding approximately 41 bps in the year-ago period.

Current wording

For the nine months ended September 30, 2024, our net flows were $0.9 billion compared to $(0.3) billion for the nine months ended September 30, 2023. The change in net flows during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily driven by increased sales in the nine months ended September 30, 2024. Reinvested income and distributions of $2.5 billion and $2.7 billion are reflected in the net flows for the nine months ended September 30, 2024 and September 30, 2023, respectively. For the nine months ended September 30, 2024, the annualized revenue impact of the net flows was $8.1 million compared to $1.6 million for the nine months ended September 30, 2023. Gross inflows of $15.7 billion in the nine months ended September 30, 2024 yielded approximately 40 bps compared to $6.7 billion yielding approximately 46 bps in the year-ago period. Gross outflows of $(17.3) billion yielded approximately 37 bps in the nine months ended September 30, 2024 compared to $(9.7) billion yielding approximately 41 bps in the year-ago period.

Previous wording

Our U.S. GAAP results of operations were as follows for the three and six months ended June 30, 2024 and 2023:

Current wording

Our U.S. GAAP results of operations were as follows for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Average basis points earned on average assets under management were 38.5 bps and 38.3 bps for the three and six months ended June 30, 2024, respectively, and 38.1 bps for the three and six months ended June 30, 2023. The overall weighted average fee rate increase for the three and six months ended June 30, 2024 is the result of changes in the mix of assets under management caused by market movements and client flows.

Current wording

Average basis points earned on average assets under management were 38.3 bps and 38.4 bps for the three and nine months ended September 30, 2024, respectively, and 37.6 bps and 37.9 bps for the three and nine months ended September 30, 2023. The overall weighted average fee rate increase for the three and nine months ended September 30, 2024 is the result of changes in the mix of assets under management caused by market movements and client flows.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Management fees increased $12.7 million, or 13.7%, from $92.8 million for the three months ended June 30, 2023 to $105.5 million for the three months ended June 30, 2024. The increase was driven by higher levels of average assets under management. Average assets under management increased 12.7%, from $97.9 billion for the three months ended June 30, 2023 to $110.3 billion for the three months ended June 30, 2024, mainly due to the positive equity market impact in the past twelve months.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Management fees increased $16.8 million, or 17.6%, from $95.3 million for the three months ended September 30, 2023 to $112.1 million for the three months ended September 30, 2024. The increase was mainly driven by higher levels of average assets under management. Average assets under management increased 15.8%, from $100.5 billion for the three months ended September 30, 2023 to $116.4 billion for the three months ended September 30, 2024, mainly due to the positive equity market impact in the past twelve months.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Management fees increased $24.3 million, or 13.2%, from $183.4 million for the six months ended June 30, 2023 to $207.7 million for the six months ended June 30, 2024. The increase was driven by higher levels of average assets under management. Average assets under management increased 12.3%, from $97.1 billion for the six months ended June 30, 2023 to $109.0 billion for the six months ended June 30, 2024, mainly due to the positive equity market in the past twelve months.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Management fees increased $41.1 million, or 14.7%, from $278.7 million for the nine months ended September 30, 2023 to $319.8 million for the nine months ended September 30, 2024. The increase was primarily driven by higher levels of average assets under management. Average assets under management increase 12.8%, from $98.2 billion for the nine months ended September 30, 2023 to $110.8 billion for the nine months ended September 30, 2024, mainly due to the positive equity market in the past twelve months.

Previous wording

Approximately $16 billion, or 14% of our AUM, were in accounts with performance fee features in which we participate. Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Current wording

Approximately $20 billion, or 16% of our AUM, were in accounts with performance fee features in which we participate. Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Performance fees increased $0.6 million, from $2.2 million for the three months ended June 30, 2023 to $2.8 million for the three months ended June 30, 2024, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees can be variable and are contractually triggered based on investment performance results over agreed upon time periods.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Performance fees decreased $(1.1) million, from $11.2 million for the three months ended September 30, 2023 to $10.1 million for the three months ended September 30, 2024, primarily due to a change in performance relative to benchmarks in certain strategies. Performance fees can be variable and are contractually triggered based on investment performance results over agreed upon time periods.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Performance fees increased $3.2 million, from $2.7 million for the six months ended June 30, 2023 to $5.9 million for the six months ended June 30, 2024, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Performance fees increased $2.1 million, from $13.9 million for the nine months ended September 30, 2023 to $16.0 million for the nine months ended September 30, 2024, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Previous wording

Our most significant category of expense is compensation and benefits awarded to our and our Affiliate’s employees. The following table presents the components of U.S. GAAP compensation expense for the three and six months ended June 30, 2024 and 2023:

Current wording

Our most significant category of expense is compensation and benefits awarded to our and our Affiliate’s employees. The following table presents the components of U.S. GAAP compensation expense for the three and nine months ended September 30, 2024 and 2023:

Previous wording

(a)For the three and six months ended June 30, 2024, $27.4 million and $54.0 million, respectively, of variable compensation expense (of the $27.9 million and $54.3 million above) is included within economic net income. The three months ended June 30, 2024 excludes $(0.3) million of severance-related items at Acadian and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million. The six months ended June 30, 2024 excludes $(0.5) million of severance-related items at Acadian and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million.

Current wording

(a)For the three and nine months ended September 30, 2024, $29.6 million and $83.6 million, respectively, of variable compensation expense (of the $29.4 million and $83.7 million above) is included within economic net income. The three months ended September 30, 2024 excludes $(0.3) million of severance-related items at Acadian. The nine months ended September 30, 2024 excludes $(0.8) million of severance-related items at Acadian and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Compensation and benefits expense increased $13.7 million, or 28.2%, from $48.5 million for the three months ended June 30, 2023 to $62.2 million for the three months ended June 30, 2024. Fixed compensation and benefits increased $0.6 million, or 2.5%, from $23.7 million for the three months ended June 30, 2023 to $24.3 million for the three months ended June 30, 2024, primarily reflecting cost of living increases and the cost of new hires supporting our growth initiatives, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $5.2 million, or 22.9%, from $22.7 million for the three months ended June 30, 2023 to $27.9 million for the three months ended June 30, 2024. The increase was primarily attributable to higher pre-bonus profits in the three months ended June 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Sales-based compensation increased $0.4 million, or 25.0%, from $1.6 million for the three months ended June 30, 2023 to $2.0 million for the three months ended June 30, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $0.9 million, or 75.0%, from $1.2 million for the three months ended June 30, 2023 to $2.1 million for the three months ended June 30, 2024. Affiliate key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Affiliate key employee distributions during the current period is driven by higher operating earnings in the current period and the leveraged nature of this distribution share. Revaluations of Affiliate equity changed by $6.6 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(0.7) million for the three months ended June 30, 2023 and increased $5.9 million for the three months ended June 30, 2024. For certain tiers of Affiliate equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Affiliate equity.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Compensation and benefits expense increased $16.6 million, or 31.3%, from $53.0 million for the three months ended September 30, 2023 to $69.6 million for the three months ended September 30, 2024. Fixed compensation and benefits increased $1.4 million, or 6.1%, from $23.1 million for the three months ended September 30, 2023 to $24.5 million for the three months ended September 30, 2024, primarily reflecting the cost of new hires supporting our growth initiatives, and cost of living increases, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $0.9 million, or 3.2%, from $28.5 million for the three months ended September 30, 2023 to $29.4 million for the three months ended September 30, 2024. The increase was primarily attributable to higher pre-bonus profits in the three months ended September 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Sales-based compensation increased $2.1 million, or 175.0%, from $1.2 million for the three months ended September 30, 2023 to $3.3 million for the three months ended September 30, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $1.6 million, or 106.7%, from $1.5 million for the three months ended September 30, 2023 to $3.1 million for the three months ended September 30, 2024. Affiliate key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Affiliate key employee distributions during the current period is driven by higher operating earnings in the current period and the leveraged nature of this distribution share. Revaluations of Affiliate equity changed by $10.6 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(1.3) million for the three months ended September 30, 2023 and increased $9.3 million for the three months ended September 30, 2024. For certain tiers of Affiliate equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Affiliate equity.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Compensation and benefits expense increased $22.7 million, or 23.3%, from $97.6 million for the six months ended June 30, 2023 to $120.3 million for the six months ended June 30, 2024. Fixed compensation and benefits increased $0.7 million, or 1.5%, from $47.1 million for the six months ended June 30, 2023 to $47.8 million for the six months ended June 30, 2024, primarily reflecting cost of living increases and the cost of new hires supporting our growth initiatives, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $8.4 million, or 18.3%, from $45.9 million for the six months ended June 30, 2023 to $54.3 million for the six months ended June 30, 2024. The increase was primarily attributable to higher pre-bonus profits in the six months ended June 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Sales-based compensation increased $0.1 million or 2.9% from $3.5 million for the six months ended June 30, 2023 to $3.6 million for the six months ended June 30, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $1.9 million, or 79.2%, from $2.4 million for the six months ended June 30, 2023 to $4.3 million for the six months ended June 30, 2024. Affiliate key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Affiliate key employee distributions during the current period is driven by higher operating earnings and the leveraged nature of this distribution share. Revaluations of Affiliate equity changed $11.6 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(1.3) million for the six months ended June 30, 2023 and increased $10.3 million for the six months ended June 30, 2024. For certain tiers of Affiliate equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Affiliate equity.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Compensation and benefits expense increased $39.3 million, or 26.1%, from $150.6 million for the nine months ended September 30, 2023 to $189.9 million for the nine months ended September 30, 2024. Fixed compensation and benefits increased $2.1 million, or 3.0%, from $70.2 million for the nine months ended September 30, 2023 to $72.3 million for the nine months ended September 30, 2024, primarily reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring at our Affiliate in late 2023. Variable compensation increased $9.3 million, or 12.5%, from $74.4 million for the nine months ended September 30, 2023 to $83.7 million for the nine months ended September 30, 2024. The increase was primarily attributable to higher pre-bonus profits in the nine months ended September 30, 2024 at our Affiliate, partially offset by changes in deferred compensation expense earned on current and prior year performance fee revenues, of which the Affiliate’s share is determined by a contractual split and recognized as compensation expense over a vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Sales-based compensation increased $2.2 million or 46.8% from $4.7 million for the nine months ended September 30, 2023 to $6.9 million for the nine months ended September 30, 2024, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions increased $3.5 million, or 89.7%, from $3.9 million for the nine months ended September 30, 2023 to $7.4 million for the nine months ended September 30, 2024. Affiliate key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Affiliate key employee distributions during the current period is driven by higher operating earnings and the leveraged nature of this distribution share. Revaluations of Affiliate equity changed $22.2 million, reflecting fluctuations in the value of key employee ownership interests at our consolidated Affiliate, as the value of Affiliate equity decreased $(2.6) million for the nine months ended September 30, 2023 and increased $19.6 million for the nine months ended September 30, 2024. For certain tiers of Affiliate equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Affiliate equity.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: General and administrative expense decreased $(0.7) million, or (3.2)%, from $21.8 million for the three months ended June 30, 2023 to $21.1 million for the three months ended June 30, 2024. The decrease in general and administrative expenses primarily reflects lower consultant costs and the impact of foreign currency changes.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: General and administrative expense increased $3.0 million, or 16.0%, from $18.8 million for the three months ended September 30, 2023 to $21.8 million for the three months ended September 30, 2024. The increase in general and administrative expenses primarily reflects the impact of foreign currency changes, higher systems and portfolio administrative costs, and our continued investment in growth initiatives and capabilities.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: General and administrative expense increased $0.9 million, or 2.2%, from $40.2 million for the six months ended June 30, 2023 to $41.1 million for the six months ended June 30, 2024. The increase was primarily due to higher systems, outside services and portfolio administrative costs, and our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs and the impact of foreign currency changes.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: General and administrative expense increased $3.9 million, or 6.6%, from $59.0 million for the nine months ended September 30, 2023 to $62.9 million for the nine months ended September 30, 2024. The increase was primarily due to higher systems, outside services and portfolio administrative costs, and our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Depreciation and amortization expense increased $0.6 million, or 13.6%, from $4.4 million for the three months ended June 30, 2023 to $5.0 million for the three months ended June 30, 2024. The increase was due to additional software and technology investments in the business.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Depreciation and amortization expense was flat at $4.5 million for each of the three months ended September 30, 2023 and 2024.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Depreciation and amortization expense increased $1.4 million, or 17.1%, from $8.2 million for the six months ended June 30, 2023 to $9.6 million for the six months ended June 30, 2024. The increase was primarily attributable to additional software and technology investments in the business.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Depreciation and amortization expense increased $1.4 million, or 11.0%, from $12.7 million for the nine months ended September 30, 2023 to $14.1 million for the nine months ended September 30, 2024. The increase was primarily attributable to additional software and technology investments in the business.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Investment income (loss) decreased $(0.1) million or (50.0)%, from $0.2 million for the three months ended June 30, 2023 to $0.1 million for the three months ended June 30, 2024, reflecting the change in returns generated by seed capital investments.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Investment income (loss) changed $1.8 million, from $(0.3) million for the three months ended September 30, 2023 to $1.5 million for the three months ended September 30, 2024, reflecting the change in returns generated by seed capital investments.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Investment income increased $0.5 million, or 100.0%, from $0.5 million for the six months ended June 30, 2023 to $1.0 million for the six months ended June 30, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Investment income increased $2.3 million, from $0.2 million for the nine months ended September 30, 2023 to $2.5 million for the nine months ended September 30, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Interest income decreased $(0.6) million, or (40.0)% from $1.5 million for the three months ended June 30, 2023 compared to $0.9 million for the three months ended June 30, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the three months ended June 30, 2024.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Interest income decreased $(1.1) million, or (64.7)% from $1.7 million for the three months ended September 30, 2023 compared to $0.6 million for the three months ended September 30, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the three months ended September 30, 2024.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Interest income decreased $(0.4) million, or (15.4)%, from $2.6 million for the six months ended June 30, 2023 compared to $2.2 million for the six months ended June 30, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the six months ended June 30, 2024.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Interest income decreased $(1.5) million, or (34.9)%, from $4.3 million for the nine months ended September 30, 2023 compared to $2.8 million for the nine months ended September 30, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the nine months ended September 30, 2024.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Interest expense decreased $(0.1) million, or (1.9)%, from $5.4 million for the three months ended June 30, 2023 to $5.3 million for the three months ended June 30, 2024, reflecting a lower balance drawn on the revolving credit facility in the three months ended June 30, 2024.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Interest expense decreased $(0.1) million, or (2.1)%, from $4.8 million for the three months ended September 30, 2023 to $4.7 million for the three months ended September 30, 2024, reflecting a lower balance drawn on the revolving credit facility in the three months ended September 30, 2024.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Income tax expense increased $0.1 million, from $5.5 million for the three months ended June 30, 2023 to $5.6 million for the three months ended June 30, 2024. The increase in income tax expense primarily relates to changes in discrete tax items, partially offset by a decrease in income before income taxes attributable to controlling interests in the three months ended June 30, 2024.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Income tax expense increased $1.7 million, from $7.7 million for the three months ended September 30, 2023 to $9.4 million for the three months ended September 30, 2024. The increase in income tax expense primarily relates to an increase in the disallowance of executive compensation deduction in the three months ended September 30, 2024.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Income tax expense increased $1.1 million, from $10.6 million for the six months ended June 30, 2023 to $11.7 million for the six months ended June 30, 2024. The increase in income tax expense primarily relates to the increase in income before income taxes attributable to controlling interests in the six months ended June 30, 2024.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Income tax expense increased $2.8 million, from $18.3 million for the nine months ended September 30, 2023 to $21.1 million for the nine months ended September 30, 2024. The increase in income tax expense primarily relates to an increase in the disallowance of executive compensation deduction in the nine months ended September 30, 2024.

Previous wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023: Consolidated Funds’ revenue decreased $(0.6) million, from $1.3 million for the three months ended June 30, 2023 to $0.7 million for the three months ended June 30, 2024. Consolidated Funds’ expense decreased $(1.1) million, from $1.2 million for the three months ended June 30, 2023 to $0.1 million for the three months ended June 30, 2024. Net consolidated Funds’ investment gain increased $0.5 million from $0.3 million for the three months ended June 30, 2023 to $0.8 million for the three months ended June 30, 2024. These movements relate to the underlying activity of our consolidated Funds.

Current wording

Three months ended September 30, 2024 compared to three months ended September 30, 2023: Consolidated Funds’ revenue increased $0.1 million, from $0.8 million for the three months ended September 30, 2023 to $0.9 million for the three months ended September 30, 2024. Consolidated Funds’ expense decreased $(0.6) million, from $0.8 million for the three months ended September 30, 2023 to $0.2 million for the three months ended September 30, 2024. Net consolidated Funds’ investment gain increased $3.3 million from $0.7 million for the three months ended September 30, 2023 to $4.0 million for the three months ended September 30, 2024. These movements relate to the underlying activity of our consolidated Funds.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023: Consolidated Funds’ revenue decreased $(0.9) million, from $2.0 million for the six months ended June 30, 2023 to $1.1 million for the six months ended June 30, 2024. Consolidated Funds’ expense decreased $(1.7) million, from $1.9 million for the six months ended June 30, 2023 to $0.2 million for the six months ended June 30, 2024. Net consolidated Funds’ investment gain increased $1.4 million from $1.1 million for the six months ended June 30, 2023 to $2.5 million for the six months ended June 30, 2024. These movements relate to the underlying activity of our consolidated Funds.

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023: Consolidated Funds’ revenue decreased $(0.8) million, from $2.8 million for the nine months ended September 30, 2023 to $2.0 million for the nine months ended September 30, 2024. Consolidated Funds’ expense decreased $(2.3) million, from $2.7 million for the nine months ended September 30, 2023 to $0.4 million for the nine months ended September 30, 2024. Net consolidated Funds’ investment gain increased $4.7 million from $1.8 million for the nine months ended September 30, 2023 to $6.5 million for the nine months ended September 30, 2024. These movements relate to the underlying activity of our consolidated Funds.

Previous wording

The following table shows our key U.S. GAAP operating metrics for the three and six months ended June 30, 2024 and 2023.

Current wording

The following table shows our key U.S. GAAP operating metrics for the three and nine months ended September 30, 2024 and 2023.

Previous wording

(1)Excluding the effect of Funds’ consolidation in the applicable periods, the U.S. GAAP operating margin is 18.5% for the three months ended June 30, 2024, 21.4% for the three months ended June 30, 2023, 19.9% for the six months ended June 30, 2024, and 21.5% for the six months ended June 30, 2023.

Current wording

(1)Excluding the effect of Funds’ consolidation in the applicable periods, the U.S. GAAP operating margin is 21.5% for the three months ended September 30, 2024, 28.4% for the three months ended September 30, 2023, 20.5% for the nine months ended September 30, 2024, and 24.0% for the nine months ended September 30, 2023.

Previous wording

(2)Excludes consolidated Funds’ expense of $0.1 million for the three months ended June 30, 2024, $1.2 million for the three months ended June 30, 2023, $0.2 million for the six months ended June 30, 2024, and $1.9 million for the six months ended June 30, 2023.

Current wording

(2)Excludes consolidated Funds’ expense of $0.2 million for the three months ended September 30, 2024, $0.8 million for the three months ended September 30, 2023, $0.4 million for the nine months ended September 30, 2024, and $2.7 million for the nine months ended September 30, 2023.

Previous wording

(3)Excludes the effect of Funds consolidation for the three and six months ended June 30, 2024 and 2023.

Current wording

(3)Excludes the effect of Funds consolidation for the three and nine months ended September 30, 2024 and 2023.

Previous wording

(4)Excludes consolidated Funds’ revenue of $0.7 million for the three months ended June 30, 2024, $1.3 million for the three months ended June 30, 2023, $1.1 million for the six months ended June 30, 2024, and $2.0 million for the six months ended June 30, 2023.

Current wording

(4)Excludes consolidated Funds’ revenue of $0.9 million for the three months ended September 30, 2024, $0.8 million for the three months ended September 30, 2023, $2.0 million for the nine months ended September 30, 2024, and $2.8 million for the nine months ended September 30, 2023.

Previous wording

Reconciliation of U.S. GAAP Net Income to Economic Net Income for the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Reconciliation of U.S. GAAP Net Income to Economic Net Income for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

The following table reconciles net income attributable to controlling interests to economic net income for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles net income attributable to controlling interests to economic net income for the three and nine months ended September 30, 2024 and 2023:

Previous wording

(1)The net return on seed/co-investment (gains) losses and financings for the three and six months ended June 30, 2024 and 2023 is shown in the following table:

Current wording

(1)The net return on seed/co-investment (gains) losses and financings for the three and nine months ended September 30, 2024 and 2023 is shown in the following table: