Affiliated Managers Group, Inc.: Form 10-K for the period ended Dec 31, 2025

Overview

AMG is a strategic partner to leading independent investment firms globally. Our strategy is to generate long-term value

by investing in high-quality independent partner-owned firms, which we refer to as “Affiliates,” through a proven partnership

approach, and allocating resources across our unique opportunity set to the areas of highest growth and return.

We believe that high-quality, partner-owned firms have fundamental competitive advantages in meeting client objectives.

With their entrepreneurial, investment-centric cultures, and deep alignment of interests with clients through direct equity

ownership by firm principals, independent firms have an ownership mindset, a long-term orientation to building their firms, and

the ability to act nimbly to capitalize on market movements, enabling them to offer unique return streams to the marketplace.

AMG’s distinctive partnership approach magnifies the existing advantages of our independent Affiliates and actively

supports their ongoing independence and ownership culture. Our innovative model enables each Affiliate’s management team

to retain autonomy and significant equity ownership in their firm, while they leverage our strategic capabilities and insight,

including access to growth capital, product strategy and distribution through our capital formation capabilities, succession

planning, and strategic advisory, to expand their reach, diversify their businesses, and enhance their long-term success.

Given that our Affiliates operate across alternatives and differentiated long-only strategies, we believe AMG is highly

diversified. Our Affiliates manage numerous differentiated strategies across a range of return-oriented asset classes and

structures across alternatives (including private markets and liquid alternatives) and differentiated long-only (including equities

and multi-asset and fixed income). We have built a highly diversified portfolio of Affiliates over time, and the underlying

diversity by strategy, product, and client type enhances our earnings stability across all stages of a market cycle, and therefore

our ability to consistently invest in the areas of highest growth and return to generate value for shareholders.

Our Strategy

We generate long-term value by investing in high-quality independent partner-owned firms and allocating resources across

AMG’s unique opportunity set to the areas of highest growth and return. Our business generates significant cash flow, which

we deploy toward growth investments and the return of capital to shareholders.

Our growth investments are focused on: (i) partnering with high-quality new Affiliates operating in areas of durable client

demand; (ii) investing in and alongside our existing Affiliates to capitalize on their growth opportunities, including by seeding

new products; and (iii) investing in our own strategic value-add capabilities, which are leveraged by our Affiliates to further

scale and diversify their businesses. Across these opportunities, we are focused on investing in areas of secular growth and

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long-term client demand. As part of our strategy, we consistently evaluate our forward opportunity set; over the last several

years, we have further invested in alternative strategies, including significant capital deployed toward new investments in fast-

growing areas within private markets and liquid alternatives aligned with long-term trends. Through these recent growth

investments, we have deliberately evolved our business toward alternatives, with the intention of improving our long-term

organic growth and earnings growth prospects as well as further enhancing the stability of our cash flow.

AMG’s strategic expertise in collaborating with partner-owned firms has been honed across more than three decades of

working closely with our Affiliates. Our unique approach provides independent firms with the advantages of a long-term

strategic partnership, while actively supporting their autonomy and independence, thereby preserving their core advantages and

the essential elements of their success — their entrepreneurial cultures, differentiated investment expertise, and disciplined

long-term orientations. We believe that clients recognize these fundamental characteristics of partner-owned firms, as well as

the alignment created by direct equity ownership by firm principals, as competitive advantages in achieving client investment

goals and objectives. We hold meaningful equity interests in each of our Affiliates, and typically each Affiliate’s management

team retains a significant equity interest in their own firm. Affiliate management equity ownership (along with our long-term

ownership) creates strong alignment and enables Affiliate management to participate directly in the long-term success of their

firms.

Our goal with Affiliates is to be an excellent partner. As the business landscape continues to change, the needs of

independent firms also evolve. Accordingly, AMG continues to invest in our strategic capabilities to enhance our Affiliates’

ability to achieve their long-term strategic objectives. Each Affiliate partnership is unique, and we work closely with our

Affiliates to determine how AMG might amplify the long-term success of each firm by collaborating across a range of strategic

areas, including access to growth capital, product strategy and distribution through our capital formation capabilities, succession

planning, and strategic advisory. Today, we are increasingly focused on partnering with firms where AMG’s strategic

capabilities can add significant value and with firms that see the value of a strategic partner that can magnify their success — as

illustrated by our recent investments. We believe our strategic capabilities provide many of the benefits offered by

consolidation models, while critically enabling firms to retain their independence. Together, these capabilities and our

commitment to Affiliate independence over the long term distinctly differentiate AMG’s partnership model from other strategic

paths available to independent firms.

In many cases, where Affiliates access our growth capital or capital formation capabilities, we invest our capital and

resources to develop, seed, and distribute new strategies and products that meet evolving client needs. Our distribution

capabilities provide access to institutional and wealth clients to complement our Affiliates’ own resources and expand their

reach, including by leveraging the expertise of our senior sales and marketing professionals and the depth and breadth of

AMG’s strategic relationships in the U.S., Europe, the UK, the Middle East, and Asia. As part of our capital formation

capabilities, AMG’s partnership model provides Affiliates access to its vertically-integrated U.S. wealth platform, which

includes product development expertise, an operations team supporting all aspects of the product lifecycle, and a scaled

distribution organization operating across specialized sales teams, a strategic relationships team, and marketing. Accessing the

attractive and growing U.S. wealth marketplace is challenging for independent managers to effectively do on their own, at

scale; leveraging AMG’s dedicated resources and coordinated strategy across key distribution channels has been essential to the

successful launch and sustainable growth of our Affiliates’ new alternative products for the U.S. wealth market. Likewise,

AMG’s platform provides wealth clients with access to differentiated products from best-in-class independent managers. We

have a track record of successfully bringing Affiliate strategies to market — including one of the first evergreen funds in the

private equity space — and we are continuing to build on our success through the launch of innovative products, including four

new alternative strategies and an active exchange-traded fund (“ETF”) in the past two years.

In addition, for some of our Affiliates, we leverage our long-term partnership approach to facilitate succession planning

across generations of Affiliate management principals and provide succession planning solutions and advice, which can include

a degree of liquidity and financial diversification along with incentive alignment for next-generation partners. We also engage

with our Affiliates on strategic matters to advance their broader objectives. We enter every partnership with a long-term

orientation to magnify our Affiliates’ advantages and support their multi-year business plans. While Affiliates typically partner

with AMG to preserve their independence and partnership culture, evolving conditions may lead an Affiliate to consider other

options. In such cases, through our active strategic engagement, we collaborate with Affiliates to evaluate appropriate strategic

alternatives. When strategic transactions occur, they typically enhance our flexibility to execute our growth strategy and return

capital to shareholders, as we deploy the resulting proceeds in accordance with our disciplined capital allocation framework.

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Given our partnership structure, strategic decisions are led by our Affiliates and AMG retains certain rights to protect AMG

shareholder interests. And because we are aligned with our Affiliates, their success is our success.

Our proven ability to magnify the competitive advantages of partner-owned firms, while preserving their independence,

differentiates AMG's partnership model and is increasingly valued by prospective Affiliates. Independent firms seeking an

institutional partner are attracted to our innovative partnership approach and our global reputation as a successful strategic

partner to leading independent investment firms around the world. We anticipate that the principal owners of independent

investment firms will continue to seek access to an evolving range of growth and succession solutions. Accordingly, we expect

to continue to have a significant opportunity to invest in and partner with additional high-quality firms across the global

investment management industry. In addition, we continue to have the opportunity to make additional equity investments in

our existing Affiliates, or invest in their growth by providing seed or other growth capital. We are well-positioned to execute

upon these investment opportunities through our:

• established process of identifying, and cultivating relationships with, high-quality prospective Affiliates in our areas

of focus;

• broad industry network and proprietary relationships developed with prospects over many years;
• substantial experience and expertise in structuring and negotiating transactions;
• global reputation as an excellent partner to our Affiliates, having provided innovative solutions for the strategic

needs of independent investment firms for more than three decades; and

• successful engagement with our Affiliates to enhance their long-term prospects, including through access to growth

capital, product strategy and distribution through our capital formation capabilities, succession planning, and

strategic advisory.

Our Affiliates

Our Affiliates provide a diverse range of differentiated return streams through their specialized investment processes.

Given their long-term performance records, our Affiliates are recognized as being among the industry’s leaders in their

respective investment disciplines. Our Affiliates’ attractive return streams are utilized in client portfolios to address a range of

needs for institutional and individual clients globally; certain Affiliates also provide investment management and customized

investment counseling and fiduciary services to high net worth individuals, families, and institutional clients.

As of December 31, 2025, our Affiliates managed approximately $813 billion across a broad range of investment styles

and geographies, in alternative and differentiated long-only strategies, as described below.

Alternative Strategies

Private Markets: Our Affiliates managed approximately $146 billion in private market assets. These firms operate across a

diverse number of growing areas within private markets and share key characteristics that position them for long-term value

creation, including differentiated investment approaches, and deep sector expertise, regional networks, and market-specific

knowledge — all of which enhance sourcing and execution. With differentiated investment models, a focus on diverse areas

with long-term structural tailwinds, long-dated capital commitments, and the growing potential to generate and realize carried

interest over time, we believe our private markets Affiliates enhance AMG’s long-term organic growth and earnings power.

Liquid Alternatives: Our Affiliates managed approximately $227 billion in liquid alternative assets. These Affiliates have

excellent long-term track records across both beta-sensitive and absolute return strategies, including multi-strategy, global

macro, relative value fixed income, and trend-following, which are designed to generate returns that have low or no correlation

to broader markets. These strategies can generate sizable performance fee earnings that — given their diversity and

demonstrated low correlation to risk assets — can contribute to the stability of AMG’s earnings over time. Many of our liquid

alternative strategies are designed to protect against volatility and drawdowns, complementing our private markets and

differentiated long-only strategies.

Differentiated Long-Only Strategies

Equities and Multi-asset and Fixed Income: Our Affiliates managed approximately $312 billion in equity assets across a

number of differentiated products and approximately $128 billion in multi-asset and fixed income strategies.

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Our Affiliates operate across a range of traditional equity and fixed income strategies typically through mutual fund

products governed by the Investment Company Act of 1940, as amended (the “Investment Company Act”), ETFs, separately

managed accounts, and Undertakings for Collective Investment in Transferable Securities (“UCITS”), in both the U.S. and

international markets. Additionally, we have several wealth management Affiliates, which manage multi-asset class portfolios

on behalf of their clients. These Affiliates have built enduring franchises with specialized investment expertise and long-term

track records across all stages of a market cycle.

With meaningful earnings contributions from each of private markets, liquid alternatives, and differentiated long-only

(including equities and multi-asset and fixed income) strategies, AMG’s business and earnings profile is highly diversified.

Given the complementary nature of these strategies, this diversification enhances our earnings stability and supports our ability

to reinvest in the highest growth and return opportunities to benefit our shareholders. Our exposure across these

complementary areas further distinguishes AMG’s business model within the independent investment management industry and

positions AMG as an attractive strategic partner for leading independent investment firms operating across multiple asset

classes.

Our Partnership Structure with Affiliates

AMG offers bespoke partnership solutions to address each Affiliate’s unique needs. Consistent with AMG’s partnership

approach and commitment to independence, we offer a range of operating structures and have customized arrangements with

each of our Affiliates that provide their management teams with the authority to manage and operate the business on a day-to-

day basis.

Each of our Affiliates operates through distinct legal entities, which affords us the flexibility to design a separate operating

agreement for each Affiliate that reflects the customized arrangement, including with respect to the specific terms of our

economic participation in the Affiliate, which, in each case, uses a “structured partnership interest” to ensure alignment of our

economic interests with those of Affiliate management. The form of our structured partnership interests in our Affiliates differs

from Affiliate to Affiliate, and may change during the course of our investment.

In the case of structures where we contractually share in the Affiliate’s revenue without regard to expenses, comprising

Affiliates that contribute a majority of Consolidated revenue, the Affiliate allocates a specified percentage of its revenue to us

and Affiliate management, while using the remainder for operating expenses and additional distributions to Affiliate

management. We and Affiliate management, therefore, participate in any increase or decrease in revenue, and only Affiliate

management participates in any increase or decrease in expenses. Under these structured partnership interests our contractual

share of revenue generally has priority over distributions to Affiliate management.

In the case of structures where we contractually share in the Affiliate’s revenue less agreed-upon expenses, we benefit from

any increase in revenue or any decrease in the agreed-upon expenses, but also have exposure to any decrease in revenue or any

increase in such agreed-upon expenses. The degree of our exposure to agreed-upon expenses from these structured partnership

interests varies by Affiliate, and includes several Affiliates in which we fully share in the expenses of the business. Further, the

expenses in which we agree to share may change during the course of our investment.

When we own a controlling equity interest in an Affiliate, we consolidate the Affiliate’s financial results into our

Consolidated Financial Statements. When we do not own a controlling equity interest in an Affiliate, but have significant

influence, we account for our interest in the Affiliate under the equity method. Under the equity method of accounting, we do

not consolidate the Affiliate’s results into our Consolidated Financial Statements. Instead, our share of earnings or losses, net

of amortization and impairments, is included in Equity method income (net) in our Consolidated Statements of Income, and our

interest in these Affiliates is recorded in Equity method investments in Affiliates (net) in our Consolidated Balance Sheets.

Whether we consolidate an Affiliate’s financial results or use the equity method of accounting, we maintain the same

innovative partnership approach and offer support and assistance in substantially the same manner for all of our Affiliates.

From time to time, we may restructure our interest in an Affiliate to better support the Affiliate’s growth strategy, but only if

doing so is in the best interest of the Affiliate’s business, management partners, and clients, as well as our stakeholders.

Competition

Our Affiliates compete with numerous investment management firms globally, as well as with subsidiaries of larger

financial organizations. These firms may have significantly greater financial, technological, and marketing resources; access to

captive distribution; and assets under management. Many of these firms may offer products and services that our Affiliates

may not, in particular investment strategies such as passively managed products, including ETFs, which typically carry lower

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fee rates. Certain Affiliates offer their investment management services to the same client types and, from time to time, may

compete with each other for clients. In addition, there are relatively few barriers to entry for new investment management

firms, especially for those providing investment management services to institutional and high net worth investors. We believe

that the most important factors affecting our Affiliates’ ability to compete for clients are the:

• investment performance, investment styles, and reputations of our Affiliates and their management teams;
• differentiation of our Affiliates’ investment strategies and products and the continued development of investment

strategies and products to meet the evolving needs and demands of investors;

• depth and continuity of our and our Affiliates’ client relationships and the level of client service offered;
• maintenance of strong business relationships by us and our Affiliates with major intermediaries; and
• continued success of our and our Affiliates’ distribution efforts.

Additionally, our strategy includes investing in independent partner-owned investment firms, and in this area we compete

with a number of acquirers and investors, including investment management companies, private equity firms, sovereign wealth

funds, and larger financial organizations. We believe that the most important factors on which we compete for future

investments are purchase price; our partnership model, including the equity incentive structures and access to capital formation

and strategic advisory capabilities; and the breadth and depth of our relationships, and our reputation, with investment firm

prospects. We believe we offer a unique and differentiated partnership opportunity to Affiliates based on the long-term

duration of our partnership, the ability for our Affiliates to remain independent partner-owned investment firms, and our

strategic capabilities.

Government Regulation

Our Affiliates offer their investment management services and products around the world, and are subject to complex and

extensive regulation by regulatory and self-regulatory authorities and exchanges in various jurisdictions. Virtually all aspects

of the asset management business, including the provision of advice, investment strategies and trading, fund sponsorship, and

product-related sales and distribution activities, are subject to regulation. These regulations are primarily intended to protect the

clients of investment advisers and generally grant regulatory authorities broad administrative and enforcement powers.

The majority of our Affiliates are registered with the SEC as investment advisers under the Investment Advisers Act of

1940, as amended (the “Advisers Act”). The Advisers Act imposes numerous obligations on registered investment advisers,

including fiduciary duties, compliance and disclosure obligations, and operational and recordkeeping requirements. Our

Affiliates operating outside of the U.S. may be subject to the Advisers Act and are also subject to regulation by various

regulatory and self-regulatory authorities and exchanges in the relevant jurisdictions, including, for those Affiliates active in the

UK, the Financial Conduct Authority (the “FCA”). Many of our Affiliates also sponsor or advise registered and unregistered

funds in the U.S. and in other jurisdictions, and are subject to regulatory requirements in the jurisdictions where those funds are

sponsored or offered, including, with respect to mutual funds in the U.S., the Investment Company Act. The Investment

Company Act governs the operations of mutual funds and imposes obligations on their advisers, including investment

restrictions and other governance, compliance, reporting, and fiduciary obligations relating to the management of mutual funds.

Many of our Affiliates are also subject to directives and regulations in the European Union and other jurisdictions relating to

funds, such as the UCITS Directive and the Alternative Investment Fund Managers Directive, with respect to depositary

functions, remuneration policies, and sanctions, among other matters.

Our Affiliates’ sales and marketing activities are subject to regulation by authorities in the jurisdictions in which they offer

investment management products and services. Our Affiliates’ ability to transact business in these jurisdictions, and to conduct

related cross-border activities, is subject to the continuing availability of regulatory authorizations and exemptions. Through

our distribution platform, we also engage in sales and marketing activities that extend the reach of our Affiliates’ own business

development efforts, and which are subject to regulation in numerous jurisdictions. Our U.S. wealth distribution subsidiary is

registered with the SEC under the Advisers Act. This subsidiary sponsors mutual funds registered under the Investment

Company Act, and serves as an investment adviser and/or administrator for our fund complex. In the UK, our institutional

distribution subsidiary is regulated by the FCA. We also have an institutional distribution branch of a subsidiary regulated by

the Dubai Financial Services Authority, and any activities in the European Union are subject to compliance with applicable

regulations in various European jurisdictions.

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Certain of our Affiliates and our U.S. wealth distribution subsidiary are subject to the Employee Retirement Income

Security Act of 1974, as amended (“ERISA”), and related regulations, with respect to retirement plan clients. ERISA imposes

duties on persons who are fiduciaries under ERISA, and prohibits certain transactions involving related parties to a retirement

plan. The U.S. Department of Labor administers ERISA and regulates investment advisers who service retirement plan clients,

and has been increasingly active in proposing and adopting additional regulations applicable to the investment management

industry. Certain of our Affiliates and our U.S. wealth distribution subsidiary are also members of the National Futures

Association and are regulated by the U.S. Commodity Futures Trading Commission (“CFTC”) with respect to the management

of funds and other products that utilize futures, swaps, or other CFTC-regulated instruments.

In addition, certain of our Affiliates and our U.S. wealth broker-dealer subsidiary are registered broker-dealers and

members of the Financial Industry Regulatory Authority (“FINRA”), for the purpose of distributing funds or other products.

FINRA has adopted extensive regulatory requirements relating to sales practices, registration of personnel, compliance and

supervision, and compensation and disclosure. FINRA and the SEC have the authority to conduct periodic examinations of

member broker-dealers, and may also conduct administrative proceedings. These broker-dealers are also subject to net capital

rules in the U.S. that mandate the maintenance of certain levels of capital, and our Affiliates and our other distribution

subsidiaries may also be subject to other regulatory capital requirements imposed by non-U.S. regulatory authorities.

Due to the extensive laws and regulations to which we and our Affiliates are subject, we and our Affiliates must devote

substantial time, expense, and effort to remain current on, and to address, legal and regulatory compliance matters. We have

established compliance programs for each of our operating subsidiaries, and each of our Affiliates has established compliance

programs to address regulatory compliance requirements for its operations. We and our Affiliates have experienced legal and

compliance professionals in place to address these requirements, and have relationships with various legal and regulatory

advisors in each of the countries where we and our Affiliates conduct business. See “Item 1A. Risk Factors.”

Human Capital Management

As of December 31, 2025, we and our Affiliates had approximately 5,600 employees, the substantial majority of which

were employed by our Affiliates and not by AMG. Each Affiliate’s management team retains autonomy in managing and

operating their business on a day-to-day basis, including with respect to their human capital. Given this, the following is a

discussion of AMG’s workforce, or approximately 250 of the total employees, and the policies and cultural initiatives which

pertain to our human capital.

Our employees and our reputation are our most important assets, and attracting, retaining, and motivating top talent to

execute on our strategic business objectives is a fundamental imperative. We support that imperative through our strong

values-based culture, commitment to career development and training, employee engagement initiatives, attractive

compensation and benefits programs, attention to succession planning, and fostering of organizational diversity at all levels of

our organization.

Our leadership training and sponsored skills development programs cover a wide range of subject area expertise as well as

career development generally, and are anchored on a comprehensive performance review process, which includes a company-

wide 360-degree review program. Further, we support employees’ educational pursuits relating to degree programs and

certifications through company-supported time off and funding for professional development and flexible work arrangements

tailored to individual employees’ educational goals. We regularly conduct company-wide surveys to solicit feedback from our

employees on a variety of topics, including corporate culture, philanthropic interests, and general job satisfaction, which help us

to enhance employee engagement and retention. Our annual anonymous employee engagement survey reported an employee

satisfaction rating of 93% in 2025, which we attribute to our focus and commitment to our employees, our entrepreneurial

culture and partnership orientation, and our meaningful involvement with communities surrounding our offices.

We prioritize employee engagement through a range of cross-functional, multi-level communication and collaboration

mediums through both in-person and virtual forums, including small working group lunches, company-wide gatherings and

town halls, management off-sites, and charitable volunteer activities. Through employee participation in our corporate

philanthropic initiatives across our global offices, we are committed to giving back to the communities in which we work and

live, and we believe that these initiatives also support our efforts to attract and retain employees. We provide company-

supported time off to encourage employees in their charitable endeavors. We also offer a formal gift-matching program to

match employee donations to eligible non-profit institutions through AMG and The AMG Charitable Foundation, as well as a

volunteer-matching program, wherein volunteer hours are matched with philanthropic credits that employees may donate to

eligible organizations. Through our matching program as well as through direct grants, AMG and The AMG Charitable

Foundation have made donations to more than 1,100 organizations around the world to date.

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We seek to recruit the best people for each role without regard to gender, ethnicity, or other protected traits, and it is our

policy to comply fully with all domestic, foreign, and local laws relating to discrimination in the workplace. Across

management positions in our workforce, gender diversity is 39%, and nearly half (47%) of our employees are women. Further,

four of seven (57%) independent members of our Board of Directors are women, and three of seven (43%) independent

directors are ethnically diverse. In addition, two of our three Board committees are chaired by women. Our executive

management team has responsibility for human capital initiatives, in coordination with a cross-functional management

committee with oversight responsibility for these matters, and reviews these initiatives with our Board of Directors regularly.

Our Website

Our website is www.amg.com (http://www.amg.com). Our website provides information about us, and, from time to time, we may use it to

distribute material company information. We routinely post financial, investment performance, and other important

information regarding the Company in the Investor Relations section of our website and we encourage investors to consult that

section regularly. The Investor Relations section of our website also includes copies of our Annual Reports on Form 10-K,

Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including exhibits, and any amendments to those reports

filed or furnished with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. We

make these reports available through our website as soon as reasonably practicable after our electronic filing of such materials

with, or the furnishing of them to, the SEC. The information contained or incorporated on our website is not a part of this

Annual Report on Form 10-K.

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We and our Affiliates face a variety of risks that are substantial and inherent in our businesses. The following are some of

the more important factors that could affect our and our Affiliates’ businesses. Investors should carefully consider these risks,

along with the other information contained in this Annual Report on Form 10-K, before making an investment decision

regarding our common stock or other publicly-listed securities. There may be additional risks of which we are currently

unaware, or which we currently consider immaterial. Any of these risks could have a material adverse effect on our financial

condition, results of operations, and the market price of our common stock. Certain statements in “Risk Factors” are forward-

looking statements. See “Forward-Looking Statements.”

RISKS RELATED TO OUR INDUSTRY, BUSINESS AND OPERATIONS

Our financial results depend on our Affiliates’ receipt of asset- and performance-based fees, and are impacted by investment

performance, as well as changes in fee levels, product mix, and the relative levels of assets under management among our

Affiliates.

Our financial results depend on our Affiliates’ receipt of asset- and performance-based fees, which may vary substantially

from year to year. Our Affiliates’ ability to grow or maintain current fee levels depends on a number of factors, including our

Affiliates’ investment performance, as well as competition and trends in the investment management industry, such as investor

demand for passively-managed products, including index and exchange traded funds, that typically carry lower fee rates, or

preferences for other developing strategies or trends. Further, different types of assets under management can generate different

ratios of asset-based fees to assets under management (“asset-based fee ratio”), based on factors such as the investment strategy

and the type of client. Thus, a change in the composition of our assets under management, either within an Affiliate or among

our Affiliates, could result in a decrease in our aggregate fees even if our aggregate assets under management remains

unchanged or increases. Products that use fee structures based on investment performance may also vary significantly from

period to period, depending on the investment performance of the particular product. For some of our Affiliates, performance-

based fees include benchmarks, such as a high-watermark provision, which generally provide that if a product underperforms

on an absolute basis or relative to a specified benchmark, it must regain such underperformance before the Affiliate will earn

any performance-based fees. In addition, in the ordinary course of business, our Affiliates may reduce or waive fees on certain

products for particular time periods, to attract or retain assets or for other reasons. No assurances can be given that our

Affiliates will be able to grow or maintain current fee structures or levels, or that certain strategies they offer will be in demand

at any given time. A reduction in the fees that our Affiliates receive could have an adverse impact on our financial condition

and results of operations.

Additionally, our structured partnership interests are tailored to meet the needs of each Affiliate and are therefore varied,

and our earnings may be adversely affected by changes in the relative performance or in the relative levels and mix of assets

under management among our Affiliates, including as a result of restructurings or dispositions of our equity interests in an

Affiliate, independent of our aggregate operating performance measures. Challenging market conditions, volatility or

slowdowns affecting a particular asset class, client type, product structure, geographic region, industry or other category of

investment could have a significant adverse impact on a specific Affiliate if its investments are concentrated in that area, which

could result in lower investment returns and in turn, lower fees earned at that Affiliate. Further, certain Affiliates contribute

more significantly to our results than other Affiliates and, therefore, changes in fee levels, particularly with respect to Affiliates

earning performance-based fees, product mix, assets under management, or investment performance, or operational issues or

other events impacting such Affiliates could have a disproportionate adverse impact on our financial condition and results of

operations.

Our financial results could be adversely affected by any reduction in our assets under management, which could reduce the

asset- and performance-based fees earned by our Affiliates.

Our financial results may be impacted by changes in the total level of our assets under management. The total level of our

assets under management generally or with respect to particular products or Affiliates could be adversely affected by conditions

outside of our control, including:

• a decline in the market value of our assets under management, due to declines or heightened volatility in the capital

markets, fluctuations in foreign currency exchange rates and interest rates, inflation, changes in the yield curve, and

other market factors;

• changes in investor risk tolerance or investment preferences, which could result in investor allocations away from

strategies and products offered by our Affiliates;

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• our Affiliates’ ability to attract and retain client assets and market products and services, which may be impacted by

investment performance, client relationships, demand for product and service offerings, their continued development

of products to meet the changing demands of investors, and the prices of securities generally;

• global economic conditions, which may be exacerbated by changes in the equity or debt markets, including impacts

from shifting monetary policies of the U.S. Federal Reserve Bank and other global central banks, or instability and

liquidity issues in the financial system generally;

• financial crises, political or diplomatic developments or instability in the U.S. or globally, including uncertainties

regarding actual and potential changes in domestic, foreign, trade, economic, and other policies, trade tensions, public

health crises, civil unrest, war, terrorism, natural disasters, fluctuations in commodity prices, or risks associated with

global climate change; and

• other factors that are difficult to predict.

A reduction in our assets under management could adversely affect the fees payable to our Affiliates and, ultimately, our

financial condition and results of operations. To the extent any of these conditions or factors adversely affect our or our

Affiliates’ operations or global economic conditions generally, they may also have the effect of heightening other risks

described elsewhere in this “Risk Factors” section.

If our or our Affiliates’ reputations are harmed, we could suffer losses in our business and financial results.

The success of our business depends on earning and maintaining the trust and confidence of our Affiliates and our

stockholders, our ability to compete for future investment opportunities, and our and our Affiliates’ reputations among existing

and potential clients. Our and our Affiliates’ reputations are critical to our business and could be impacted by events that may

be difficult or impossible to control, and costly or impossible to remediate, including:

• alleged or actual failures by us, our Affiliates, or our respective employees or third-party service providers or

counterparties to comply with applicable laws, rules, or regulations, or contractual obligations or instructions;

• errors in our public reports;
• cyber-attack or data breach incidents;
• fund liquidity or valuation issues, or issues relating to the use of leverage, including with respect to assets within

private markets funds, liquid alternative, or similar products of certain of our Affiliates;

• threatened or actual litigation against us, any of our Affiliates, or our respective employees;
• perceived or actual conflict between us and any of our Affiliates or among our Affiliates;
• changes in the structure of our partnership interests in any of our Affiliates, including any repositioning or divestments

of such interests;

• research published by securities or industry analysts about us or any of our Affiliates;
• negative perceptions of our or certain of our Affiliates’ investments or business practices by stakeholder groups who

have increasingly expressed divergent views on a range of environmental, social, and governance matters;

• fraudulent impersonations of us, our Affiliates, or our respective employees by third-party bad actors, including in

social engineering schemes that attempt to manipulate targeted recipients into sharing confidential information,

participating in fraudulent investments, purport to offer investment services, or solicit fraudulent investments,

including through fake phone calls, e-mails, and websites, and on social media platforms and messaging applications;

or

• other events and factors that are difficult to predict including those that could impact our Affiliates’ ability to compete

effectively with other firms, our ability to successfully pursue our growth strategy, and other risks described elsewhere

in this “Risk Factors” section.

Any of the foregoing events, or the public announcement and potential publicity surrounding these issues, even if

inaccurate, satisfactorily addressed, or if no violation or wrongdoing actually occurred, could adversely impact our Affiliates’

reputations and their relationships with clients, our relationships with our Affiliates and business partners, our access to the

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capital markets or other financing, and our ability to negotiate agreements with new independent investment firms, any of

which could have an adverse effect on our reputation, our financial condition and results of operations, or the market price of

our common stock.

The investment management industry is highly competitive.

Our Affiliates compete with numerous investment management firms globally, including public, private, and client-owned

investment advisers; firms managing passively-managed products, including exchange traded funds; firms associated with

securities broker-dealers, financial institutions, insurance companies, private equity firms, sovereign wealth funds; and other

entities. These firms may have significantly greater financial, technological, and marketing resources, captive distribution and

assets under management, or be subject to less regulation and accordingly have more flexibility to undertake and execute

certain investments with less compliance expense, and many of these firms may offer products and services that our Affiliates

may not in particular investment strategies. These firms may also compete by seeking to capitalize on a trend towards

institutions consolidating the number of investment managers they work with, and advances in technology and digital wealth

and distribution tools.

Competition from these firms may reduce the fees that our Affiliates can obtain for investment management services, or

could impair our Affiliates’ ability to attract and retain client assets, and any failure by our Affiliates to successfully adapt their

strategies and develop competitive new products and services, or effectively manage the associated operational risks, could

harm our Affiliates’ reputations and competitive positions, and expose them to additional costs or regulatory scrutiny, which

could adversely affect our assets under management, financial condition and results of operations. We believe that our

Affiliates’ ability to compete effectively with other firms depends upon the performance of our Affiliates’ investment strategies,

the applicability of products to meet client objectives and preferences, and the continued development of increasingly complex

strategies and products, including those offered on our U.S. wealth distribution platform, to meet the evolving needs and

demands of investors, as well as our Affiliates’ reputations, client relationships, fee structures, client-servicing capabilities, and

the marketing and distribution of their investment strategies, among other factors. See “Competition” in Item 1. Our Affiliates

may not compare favorably with their competitors in any or all of these categories, and technological developments, including

financial applications and services based on generative artificial intelligence, machine-learning algorithms, and large language

models (“AI”), may over time reduce the demand for, or clients’ willingness to pay for, certain products and services. From

time to time, our Affiliates may also compete with each other for clients and investment opportunities.

Investment management contracts are subject to termination on short notice.

Through our Affiliates, we derive almost all of our asset- and performance-based fees from clients pursuant to investment

management contracts. While certain of our Affiliates’ private equity and alternative products have long-term commitment

periods, many of our Affiliates’ investment management contracts are terminable by the client without penalty upon relatively

short notice (typically not longer than 60 days). We cannot be certain that our Affiliates will be able to retain their existing

clients or attract new clients. If our Affiliates’ clients, in particular a significant client or a series of significant clients,

terminate their investment management contracts or withdraw a substantial amount of assets for any number of reasons,

including poor investment performance, loss of key investment personnel, changes in the client’s decision makers, or

reputational, regulatory, or compliance issues, it is likely to harm our results of operations. In addition, investment

management contracts with mutual funds or other similar products are subject to annual approval by the fund’s board of

directors.

We may need to raise additional capital in the future, and existing or future resources may not be available to us in

sufficient amounts or on acceptable terms.

While we believe that our existing cash resources and cash flow from operations will be sufficient to meet our working

capital needs for normal operations for the foreseeable future, our continuing acquisitions of interests in independent investment

firms and our other strategic initiatives may require additional capital. Further, we have significant purchase obligations

relating to Affiliate equity interests, as well as commitments relating to general partner and seed capital investments, and it is

difficult to predict the frequency and magnitude of these purchases or associated capital calls. Additionally, the valuation of

certain of these assets on our balance sheet may cause volatility from period to period. As of December 31, 2025, the current

redemption value relating to Affiliate equity interests was $408.0 million, of which $246.8 million was presented as

Redeemable non-controlling interests (including $32.2 million of consolidated Affiliate sponsored investment products

primarily attributable to third-party investors), and $161.2 million was included in Other liabilities. See “Liquidity and Capital

Resources-Affiliate Equity” in Item 7 and Notes 13 and 14 of the Consolidated Financial Statements. Unfunded commitments

relating to general partner and seed capital investments were $285.0 million as of December 31, 2025. See Notes 2 and 6 of our

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Consolidated Financial Statements. These obligations may require more cash than is then available from our existing cash

resources and cash flows from operations. Thus, we may need to raise capital through additional borrowings or by selling

shares of our common stock or other equity or debt securities, or otherwise refinance a portion of these obligations.

As of December 31, 2025, we had outstanding debt of $2.7 billion. Our level of indebtedness may increase if we, our

subsidiaries, and/or our consolidated Affiliates fund future investments or other expenses through borrowings. We may also

seek to refinance existing indebtedness for the purpose of managing maturity dates, to seek alternative financing terms or for

other reasons, which may not be available on similar terms as our existing indebtedness, including with respect to interest rates.

Any additional indebtedness could increase our vulnerability to general adverse economic and industry conditions and may

require us to dedicate a greater portion of our cash flows from operations to payments on our indebtedness.

The financing activities described above could increase our Interest expense, decrease our Net income (controlling

interest), or dilute the interests of our existing stockholders. In addition, our access to additional capital, and the cost of capital

we are able to access, is influenced by a number of factors, including the state of global credit and equity markets, interest rates,

credit spreads, and our credit ratings. As a result, we may be unable to enter into new credit facilities or issue debt or equity in

the future on attractive terms, or at all. We are currently rated A3 by Moody’s Investors Service and BBB+ by S&P Global

Ratings. A reduction in our credit ratings could also increase our borrowing costs under our revolver or, in certain cases, give

rise to a termination right by the counterparty under our derivative financial instruments, if any. There can be no assurance that

we will achieve a particular credit rating or maintain any particular rating in the future.

Our debt agreements impose certain covenants relating to the conduct of our business, including financial covenants under

our revolver, any breach of which could result in the acceleration of the repayment of any amounts borrowed or outstanding

thereunder.

Our debt agreements contain customary affirmative operating covenants and negative covenants that, among other things,

place certain limitations on our and our subsidiaries’ ability to incur debt, merge or transfer assets, and create liens and, in the

case of our revolver, require us to maintain specified financial ratios, including a maximum leverage ratio and a minimum

interest coverage ratio. The breach of any covenant (either due to our actions or omissions or, in the case of financial

covenants, due to a significant and prolonged market-driven decline in our operating results) could result in a default under the

applicable debt agreement and, in the case of our revolver, lenders could refuse to make further extensions of credit to us.

Further, in the event of certain defaults, amounts borrowed under our debt agreements, together with accrued interest and other

fees, could become immediately due and payable. If any indebtedness were to become subject to accelerated repayment, we

may not have sufficient liquid assets to repay such indebtedness in full.

We have substantial intangibles on our balance sheet, and any impairment of our intangibles could adversely affect our

financial condition and results of operations.

As of December 31, 2025, our total assets were $9.2 billion, of which $4.2 billion were intangibles, and $2.9 billion were

equity method investments in Affiliates, an amount primarily composed of intangible assets. We cannot be certain that we will

realize the value of such intangible assets. Our intangible assets may become impaired as a result of any number of factors,

including changes in market conditions, declines in the value of assets under management, client attrition, product performance,

reductions in fee rates, and changes in strategic objectives or growth prospects of an Affiliate. An impairment of our intangible

assets or an other-than-temporary decline in the value of our equity method investments could adversely affect our financial

condition and results of operations. Determining the value of intangible assets, and evaluating them for impairment, requires

management to exercise significant judgment. For the year ended December 31, 2025, we recorded expenses to reduce the

carrying value to fair value of certain acquired client relationships, and in prior periods we have recorded expenses to reduce the

carrying value to fair value of certain Affiliates and/or certain acquired client relationships, and may experience similar

impairment events in future reporting periods. See “Critical Accounting Estimates and Judgments” in Item 7 and Notes 7 and 8

of the Consolidated Financial Statements.

Market risk management activities may adversely affect our liquidity and results of operations.

Cash management transactions, capital markets financings, and certain investments or other transactions may create

exposure for us or our Affiliates to changes in interest rates, foreign currency exchange rates, marketable securities, and

financial markets generally, which we or our Affiliates may seek to offset by entering into derivative financial instruments. The

scope of these risk management activities is selective and varies based on the level and volatility of interest rates, foreign

currency exchange rates, applicable marketable securities, and other changing market conditions. We and our Affiliates do not

seek to hedge exposure to all market risks, which means that exposure to certain market risks is not limited. Further, the use of

derivative financial instruments does not entirely eliminate the possibility of fluctuations in the value of the underlying position

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or prevent losses if the value of the position declines, and also can limit the opportunity for gain if the value of the position

increases. There can be no assurance that our or our Affiliates’ derivative financial instruments will meet their overall objective

or that we or our Affiliates will be successful in entering into such instruments in the future. Further, while hedging

arrangements may reduce certain risks, such arrangements themselves may entail other risks, may generate significant

transaction costs, and may require the posting of cash collateral. For example, if our or our Affiliates’ counterparties fail to

honor their obligations in a timely manner, including any obligations to return posted collateral, our liquidity and results of

operations could be adversely impacted.

RISKS RELATED TO OUR STRATEGY AND OUR STRUCTURED PARTNERSHIPS WITH AFFILIATES

Our growth strategy depends in part upon our ability to identify and consummate investments in suitable independent

investment firms.

Our continued success in investing in independent investment firms will depend upon our ability to find suitable firms in

which to invest or make additional investments in our existing Affiliates, our ability to negotiate agreements with such firms on

acceptable terms, maintaining our relationships with prospects and our reputation as a leading partner to these firms, and our

ability to raise the capital necessary to finance such transactions. The market for acquisitions of interests in these firms is

highly competitive. Many other public and private financial services companies, including commercial and investment banks,

private equity firms, sovereign wealth funds, insurance companies, and investment management firms, also invest in

independent investment firms and may have significantly greater resources than we do. In addition to direct competition on

particular prospects, these firms can also negatively impact the volume and value of transactions more broadly. Further, our

innovative partnership approach with our Affiliates is designed to enhance our Affiliates’ ability to achieve their long-term

strategic objectives, while preserving their independence and autonomy, and, therefore, their unique entrepreneurial and

investment-centric cultures, and the management of some target firms may prefer terms and structures offered by our

competitors.

We may not be successful in making investments in new firms or maintaining existing investments, and any firms that we

do invest in may not have favorable results or performance following our initial investment or any subsequent investment,

which could have an adverse effect on our financial condition and results of operations. Our investments involve a number of

risks, including regulatory considerations and the existence of unknown liabilities that may arise after making an investment,

some of which may depend upon factors that are not under our control. We may also make new investments using complex or

innovative structures and terms, including joint ventures, deferred economics, or product development partnerships, which may

introduce additional risks and uncertainties. Further, the consummation of our announced investments is generally subject to a

number of closing conditions, contingencies, and approvals, including, but not limited to, obtaining certain consents of the

independent investment firm’s clients and applicable regulatory approvals. In the event that an announced transaction is not

consummated, we may experience a decline in the price of our common stock.

Our growth strategy also includes selectively pursuing strategic partnerships, transactions, joint ventures, and initiatives,

which could involve additional risks and uncertainties.

Our growth strategy also includes selectively pursuing strategic partnerships, transactions, joint ventures, and initiatives in

areas where we can assist our Affiliates in growing and diversifying their businesses (including through seed capital, general

partner commitments, and other strategic investments in our Affiliates and their funds), to further enhance our competitive

position, or where we believe we can add value and generate meaningful returns. These strategic partnerships, transactions,

joint ventures, and initiatives may be complementary to our existing business or involve new operational areas, product

structures, or strategies (including in private markets and liquid alternatives), which includes, among others, initiatives to

increase the number and type of investment products offered to high-net-worth individuals and families through our U.S. wealth

and global distribution platforms, and expanding the geography and scope of our operations. These initiatives involve risks and

uncertainties, including compliance with additional regulatory and disclosure requirements, increased potential for disputes,

exposure to more volatile market segments and reputational risks, and significant commitments of capital over extended periods

of time. Addressing these risks and uncertainties may require additional resources and investment, including the

implementation of new operational controls and procedures, as well as require complex contractual arrangements, structures,

and specialized skills. There is no certainty that such initiatives will deliver the anticipated benefits over the expected time

frame or at all, or that our stockholders will react favorably. Any failure to successfully execute on strategic partnerships,

transactions, joint ventures, or initiatives, including in connection with our entry into new operational areas or effectively

managing associated risks, or by our Affiliates in deploying strategic capital into suitable new investment opportunities, could

harm our reputation and expose us to additional costs or divert resources from other opportunities, which could adversely affect

our assets under management, financial condition, and results of operations.

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The structure of our partnership interests in our Affiliates may expose us to unanticipated changes in Affiliate revenue,

operating expenses, and other commitments, which we may not anticipate and may have limited ability to control.

The form of our structured partnership interests in our Affiliates differs from Affiliate to Affiliate, and may change during

the course of our investment.

In the case of structures where we contractually share in the Affiliate’s revenue without regard to expenses, comprising

Affiliates that contribute a majority of Consolidated revenue, the Affiliate allocates a specified percentage of its revenue to us

and Affiliate management, while using the remainder for operating expenses and additional distributions to Affiliate

management. In these types of structures, while our distributions generally have priority, our agreed allocations may not

anticipate changes in the revenue and operating expense base of the Affiliate, and the revenue remaining after our specified

share is allocated to us may not be large enough to cover all of the Affiliate’s operating expenses, which could result in a

reduction of the amount allocated to us or could negatively impact the Affiliate’s operations and prospects.

In the case of structures where we contractually share in the Affiliate’s revenue less agreed-upon expenses, we benefit from

any increase in revenue or any decrease in the agreed-upon expenses, but also have exposure to any decrease in revenue or any

increase in such expenses. The degree of our exposure to agreed-upon expenses from these structured partnership interests

varies by Affiliate (and may change during the course of our investment), and includes several Affiliates in which we fully

share in the expenses of the business. In these types of structures, we may have limited or no ability to control the level of

expenses at the Affiliate, and our distributions generally do not have priority. Further, the impact of Affiliate expenses on our

earnings and our stock price could increase if the portion of our earnings derived from such Affiliates increases.

As a result of these factors, unanticipated changes in revenue, operating expenses, or other commitments at any of our

Affiliates could leave the Affiliate with a shortfall in remaining funds for distribution to us or Affiliate management, or for

funding their operations. Changes in the global marketplace in particular could result in rapid changes to our Affiliates’

earnings or expenses, and our Affiliates may be unable to make appropriate expense reductions in a timely manner to respond

to such changes. Any of these developments could have an adverse effect on our financial condition generally, and on our

results of operations for the applicable reporting period.

Additionally, regardless of the particular structure, we may agree to change the structure, or may elect to defer or forgo the

receipt of our share of an Affiliate’s revenue or earnings, or adjust expenses allocated to us, to permit the Affiliate to fund

expenses in light of unanticipated changes in revenue or operating expenses, with the aim of maximizing the long-term benefits

for us and the Affiliate. These types of activities could increase during periods where an Affiliate’s revenues decline rapidly or

other events occur that impact the Affiliate’s expenses or operations. We cannot be certain that any such deferral or

forbearance would be of any greater long-term benefit to us, and such a deferral or forbearance may have an adverse effect on

our near- or long-term financial condition and results of operations.

We may reposition or divest our equity interests in our Affiliates, and we cannot be certain that any such repositioning or

divestment will benefit us in the near- or long-term.

From time to time, we may reposition our relationships with our Affiliates, which could, among other things, include

changes to our structured partnership interests, including changes in our ownership level and in the calculation of our share of

revenue and/or operating expenses. Such repositioning may be done in order to address an Affiliate’s succession planning,

changes in its revenue or operating expense base, our or the Affiliate’s strategic planning, regulatory considerations, or other

developments. Any repositioning of our interest in an Affiliate may result in increased exposure to changes in the Affiliate’s

revenue and/or operating expenses, or in additional investments or commitments from us, or could increase or reduce, or

change the structure of, our interest in the Affiliate, or cause misalignment with Affiliate management. In some cases, this

could result in the partial or full divestment of our interest to Affiliate management or to a third-party, or in our acquisition of

all of the equity interests of the Affiliate. The divestment of our interests in an Affiliate may result in changes in the

composition of our assets under management or client cash flows, and there can be no assurance that the proceeds from any

such transactions will be deployed more effectively, including for new investments or other strategic initiatives, than if we

retained our interest in such Affiliate. In addition, certain of our Affiliates have customary rights in certain circumstances to

restructure or sell their interests in their firm to a third-party, which could be through a direct majority or minority sale

transaction, a private or public offering, or otherwise, and to cause us to participate in such restructuring or sale, which could be

on terms that we view as less favorable than an alternative transaction or to retaining our interest, or that we may view

favorably, but results in reduced control for us, shifting incentives, and creating additional risks and uncertainties. The

occurrence of any of the above transactions or changes, increases in the frequency thereof, or disputes in relation to such

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transactions or changes, could have an adverse impact on our reputation, financial condition, and results of operations, as well

as on our relationships with existing and prospective Affiliates, and could divert capital from other opportunities.

We and our Affiliates rely on certain key personnel and cannot guarantee their continued service.

We depend on the efforts of our executive officers and our other officers and employees. Our executive officers, in

particular, play an important role in the stability and growth of our existing Affiliates and in identifying potential investments in

independent investment firms. There is no guarantee that these executive officers will remain with the Company. We do not

have employment agreements with our executive officers, although each has a significant deferred equity interest in the

Company and is subject to non-solicitation and non-competition restrictions that may be triggered upon their departure.

Further, we seek to attract and retain our key officers and employees through a number of initiatives and programs, including

developing a strong values-based culture, a commitment to career development, employee engagement, attractive compensation

and benefits programs, attention to succession planning, and fostering of organizational diversity, any of which may not be

successful in contributing to the retention of such employees. Changes in our management team, in particular, may be

disruptive to our business, and failure to attract and retain members of our executive or senior management team, or to

effectively implement and manage appropriate succession plans, could adversely affect our business, financial condition, and

results of operations.

In addition, our Affiliates depend heavily on the services of key principals who, in many cases, have managed their firms

for many years. These principals often are primarily responsible for their firm’s investment decisions. Although we use a

combination of economic incentives, transfer restrictions and, in some instances, non-solicitation, non-competition, and

employment agreements in an effort to retain key Affiliate personnel, there is no guarantee that these principals will remain

with their firms or refrain from competing with us if they depart their firms. The market for highly skilled professionals in the

investment management industry is highly competitive, particularly in alternative strategies, and further technological

advancements, including with respect to AI, could result in increased demand and competition for individuals with certain

specialized skills and technological knowledge. These individuals also have an increasing number of employment options

outside of asset management firms, such as family offices and multi-manager platforms. Further, the departure of key

individuals at an Affiliate could also cause investors to reduce or terminate their investments in such Affiliates’ funds or

products, or trigger certain provisions tied to the departure of, or cessation of committed time, by specified persons (known as

“key person” provisions) in the documentation governing certain Affiliate products and funds, which could permit the

suspension or termination of those products’ investment periods. In addition, the pervasiveness of social media and public

focus on the externalities of business activities could lead to wider dissemination of adverse or inaccurate information relating

to such key individuals, making remediation more difficult and magnifying reputational risk. Since certain of our Affiliates

contribute more significantly to our results than other Affiliates, the loss of key personnel at these Affiliates could have a

disproportionately adverse impact on our business, financial condition, and results of operations.

RISKS RELATED TO OUR COMMON STOCK

Equity markets and our common stock have been volatile.

The market price of our common stock has experienced and may continue to experience volatility, and the broader equity

markets have experienced and may continue to experience significant price and volume fluctuations. In addition,

announcements of our financial and operating results or other material information, including changes in net client cash flows

and assets under management, announcements and activity regarding our share repurchase programs, changes in our financial

guidance or our failure to meet such guidance, our new investments activity, changes in general conditions in the economy or

the financial markets, perceptions regarding our environmental, social, and governance profile or sustainable investment

decisions of our Affiliates, and other developments affecting us, our Affiliates, or our competitors, as well as geopolitical,

social, regulatory, capital markets, economic, public health, and other factors unrelated to us, could cause the market price of

our common stock to fluctuate substantially.

The sale or issuance of substantial amounts of our common stock, or the expectation that such sales or issuances will occur,

could adversely impact the price of our common stock.

The sale or issuance of substantial amounts of our common stock in the public market could adversely impact its price. In

connection with our financing activities we maintain an equity distribution program, under which we may issue shares of our

common stock from time to time. We also have outstanding option and restricted stock awards that have been granted under

our share-based incentive plans. Additionally, we have the right to settle certain Affiliate equity purchase obligations with

shares of our common stock. Moreover, in connection with future financing activities, we may issue convertible securities or

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shares of our common stock, including through forward equity transactions. Any such issuance of shares of our common stock

could have the effect of substantially diluting the interests of our current equity holders. In the event that a large number of

shares of our common stock are sold or issued in the public market, or the expectation that such sales or issuances will occur,

the price of our common stock may decline as a result.

Provisions in our organizational documents, Delaware law, and other factors could delay or prevent a change in control of

the Company, or adversely affect our financial results in periods prior to and following a change in control.

Provisions in our charter and by-laws and anti-takeover provisions under Delaware law could discourage, delay, or prevent

an unsolicited change in control of the Company. These provisions may also have the effect of making it more difficult for

third parties to replace our executive officers without the consent of our Board of Directors. These provisions include:

• the ability of our Board of Directors to issue preferred stock and to determine the terms, rights, and preferences of the

preferred stock without stockholder approval;

• the prohibition on the right of stockholders to call meetings or act by written consent and limitations on the right of

stockholders to present proposals or make nominations at stockholder meetings; and

• legal restrictions on mergers and other business combinations between us and any holder of 15 percent or more of our

outstanding common stock.

Further, given our long-term innovative partnership approach with our Affiliates, which is designed to maintain their

independence and autonomy, and, therefore, their unique entrepreneurial and investment-centric cultures, a change in control

may be viewed negatively by our Affiliates, impacting their relationships with us. Additionally, the disposition of certain of our

Affiliates following a change in control could result in the immediate realization of taxes owed on any excess proceeds above

our tax basis in the relevant Affiliate, which could impact the valuation a third-party may apply to us in a change in control.

Any of the forgoing factors may inhibit a change in control in circumstances that could give our stockholders the opportunity to

realize a premium over the market price of our common stock, or may result in negative impacts on our financial results in

periods prior to and following a change in control.

In addition, a change in control of the Company or the acquisition of a large ownership position in shares of our

outstanding common stock by a single holder may constitute a change in control for certain of our Affiliates for purposes of the

Advisers Act and the Investment Company Act. In that case, absent client consents, the Affiliate’s management agreements

may be deemed to be “assigned” in violation of the agreement and, for mutual fund clients, will terminate. We cannot be

certain that any required client consents (which the impacted Affiliates would need to be involved in requesting) would be

obtained if such a change of control occurs. Any termination, deemed assignment or renegotiation of any of our Affiliates’

management agreements could result in a reduction in our assets under management or the fees payable to our Affiliates and,

ultimately, our aggregate fees. Further, certain of our Affiliates operate regulated businesses in jurisdictions outside of the U.S.

that, in some cases, require regulatory notifications and other filings if a single stockholder acquires an ownership position in

the Company exceeding certain specified thresholds, regardless of whether a change in control has occurred for purposes of the

Advisers Act or the Investment Company Act. Such an ownership position could also trigger approvals under FINRA, for

Affiliates operating a broker-dealer in the U.S. As a result, a large ownership position in our stock, whether or not resulting in a

change of control of the Company, could result in increased regulatory reporting and compliance costs, and potential

restrictions on our or our Affiliates’ business activities, and could reduce the fees that our Affiliates receive under investment

management contracts, any of which could have an adverse effect on the Company’s financial condition and results of

operations.

LEGAL AND REGULATORY RISKS

Our and our Affiliates’ businesses are highly regulated.

Our and our Affiliates’ businesses are subject to complex and extensive regulation by regulatory and self-regulatory

authorities and exchanges in various jurisdictions around the world, which, for our Affiliates and our U.S. wealth distribution

subsidiary, include those applicable to investment advisers, as detailed in “Government Regulation” in Item 1. Applicable laws,

rules, and regulations impose requirements, restrictions, and limitations on our and our Affiliates’ businesses, and can result in

significant compliance and operational costs. Further, this regulatory environment may be altered without notice by new laws

or regulations, revisions to existing laws or regulations, or new or revised interpretations, guidance, or enforcement priorities,

and could cause us or our Affiliates to change or curtail operations or product offerings. Any determination of a failure to

comply with applicable laws, rules, or regulations could expose us, our Affiliates, or our respective employees to civil liability,

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criminal liability, or disciplinary or enforcement action, with penalties that could include the disgorgement of fees, fines,

sanctions, suspensions, termination of adviser status, or censure of individual employees or revocation or limitation of business

activities or registration, and may result in monetary losses that are not covered by insurance in adequate amounts or at all, any

of which could have an adverse impact on our stock price, financial condition, and results of operations. Further, if we, any of

our Affiliates, or our respective employees or third-party service providers were to fail to comply with applicable laws, rules, or

regulations, or be named as a subject of an investigation or other regulatory action, the public announcement and potential

publicity surrounding any such failure, investigation, or action could have an adverse effect on our or our Affiliates’ reputations

and on our stock price and result in increased costs, even if we, our Affiliates, or our respective employees or third-party service

providers were found not to have violated such laws, rules, or regulations.

Recently implemented and proposed regulations globally have called for more stringent oversight of the financial services

industry in which we and our Affiliates operate. In the U.S., the SEC has focused its enforcement, examination, and

rulemaking activities on issues relevant to alternative asset management firms, including consistent application of the

methodology, disclosure, and conflicts of interest related to the valuation of private funds to increase transparency and

accountability. Further, in response to shifting enforcement priorities and rulemaking activities at the federal level, certain state

and other governmental entities have maintained, and may continue to seek to maintain, existing, or implement potentially more

rigorous, regulatory requirements in response, which, coupled with legal challenges to a number of significant regulations and

judicial decisions regarding administrative law, may create uncertainty or lead to divergent interpretations of law, or change the

requirements applicable to our and our Affiliates’ businesses.

The use of AI technologies to provide certain business processes, services, and products may also require compliance with

additional U.S. and non-U.S. legal or regulatory frameworks which are not fully developed or tested, and which may subject us

and our Affiliates to litigation and regulatory actions. For example, the European Union (the “EU”) has enacted the Artificial

Intelligence Act, and various other jurisdictions have proposed or finalized laws and regulations that created, or have the

potential to create, regulatory risk around the use of AI or could restrict or eliminate our and our Affiliates’ ability to use certain

AI tools. These evolving laws and regulations could require changes in our and our Affiliates’ implementation of AI

technologies, increase compliance costs and the risk of non-compliance, and restrict or impede our respective abilities to

develop, adopt, and deploy AI technologies efficiently and effectively.

These and other regulatory developments could adversely affect our and our Affiliates’ businesses, increase compliance

and operational costs, require that we or our Affiliates change or curtail operations or investment offerings, or impact our and

our Affiliates’ access to capital and the market for our common stock. Further, in recent years, regulators in the U.S., the UK,

and other jurisdictions have expanded rules and devoted greater resources and attention to the enforcement of anti-bribery and

anti-money laundering laws, and while we and our Affiliates have developed and implemented policies and procedures

designed to comply with these rules, such policies and procedures may not be effective in all instances to prevent violations.

Our and our Affiliates’ international operations are subject to foreign risks, including political, regulatory, economic, and

currency risks.

We and certain of our Affiliates conduct business outside the U.S., and a number of our Affiliates are based or have offices

outside the U.S. and, accordingly, are subject to risks inherent in doing business internationally. These risks may include

difficulties in staffing and managing foreign operations, longer payment cycles, difficulties in collecting investment advisory

and other fees receivable, different (and in some cases less stringent) legal, regulatory and accounting regimes, political

instability, exposure to fluctuations in currency exchange rates, expatriation controls, expropriation risks, and potential adverse

tax consequences. For example, regulations in the EU pertaining to the integration of environmental, social, and governance

topics into, among other things, the organizational, risk, and governance arrangements of certain financial entities, and

increased disclosure requirements with regard to such factors generally, may materially impact the investment management

industry in member states that have adopted, or may in the future adopt, such legislation. Conversely, opposition to

environmental, social, and governance initiatives has gained momentum in the U.S., with several states and Congress having

proposed, enacted, or indicated an intent to pursue policies, legislation, or initiatives opposing such efforts, including engaging

in related inquiries, investigations, and litigation. The dynamic nature of environmental, social, and governance-related

regulations could impact our or our Affiliates’ businesses, increase regulatory and compliance costs, and adversely affect our

profitability, which effects could be exacerbated in the event of regulatory uncertainty or conflicting or inconsistent regulatory

guidance related thereto, including in the U.S. and the UK, as applicable. In addition, as a result of operating internationally,

certain of our Affiliates and our global capital distribution platform are subject to requirements under non-U.S. regulations to

maintain minimum levels of net capital. Such capital requirements may be increased from time to time with limited advance

notice, which may have the effect of limiting withdrawals of capital by us and the payment of distributions to us or, if there

were a significant change in the required capital or an extraordinary loss or charge against net capital at a particular Affiliate,

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could adversely impact such Affiliate’s ability to expand or maintain operations. These or other risks related to our and our

Affiliates’ international operations may have an adverse effect on our business, financial condition, and results of operations.

Changes in tax laws or exposure to additional tax liabilities could have an adverse impact on our business, financial

condition, and results of operations.

We are subject to income taxes as well as non-income based taxes in the U.S. and certain foreign jurisdictions, and our

Affiliates are generally subject to taxes in the jurisdictions in which they operate. Tax laws, regulations, and administrative

practices in these jurisdictions may be subject to significant change, with or without notice, and significant judgment is required

in estimating and evaluating tax provisions and accruals. Our and our Affiliates’ effective tax rates could be affected by a

change in the mix of earnings with differing statutory tax rates, changes to our or their existing businesses, and changes in

relevant tax, accounting or other laws, regulations, administrative practices, and interpretations. In the U.S., An Act to Provide

for Reconciliation Pursuant to Title II of the H. Con. Res. 14 (the “Act”) was signed into law in July 2025, which included

certain modifications to federal tax law. Although the Act is not expected to have a material impact on our net income and cash

flows, any future tax reform proposals, if ultimately enacted into legislation, could materially impact our tax provision, deferred

tax assets, and tax liabilities, or impact decisions on how to return value to stockholders in the most efficient manner. Further, a

portion of our earnings is from outside of the U.S., and the foreign government agencies in jurisdictions in which we and our

Affiliates do business continue to focus on the taxation of multinational companies, and could implement changes to their tax

laws. The potential effects may vary depending on the specific provisions and rules implemented by each jurisdiction. We

cannot predict future changes in the tax laws, regulations, administrative guidance, or judicial decisions to which we and our

Affiliates are subject or that could apply to our and our Affiliates’ businesses, and any changes to federal, state or foreign tax

laws, regulations, accounting standards or administrative practices, or the release of additional guidance, interpretations or other

information, could impact our estimated effective tax rate and overall tax expense, as well as our earnings estimates, and could

result in adjustments to our treatment of deferred taxes, including the realization or value thereof, or in unanticipated additional

tax liabilities, or cause us or our Affiliates to change or curtail product offerings, any of which could have an adverse effect on

our business, financial condition, and results of operations.

In addition, we and our Affiliates may be subject to tax examinations and inquiries by certain federal, state, and foreign tax

authorities. We regularly assess the likely outcomes of examinations that we are subject to, in order to determine the

appropriateness of our tax provision; however, tax authorities may disagree with certain positions we have taken or may take,

and may assess additional taxes and/or penalties and interest. There can be no assurance that we will accurately predict the

outcomes of any examinations and the actual outcomes could have an adverse impact on our financial condition and results of

operations.

We or our Affiliates may be involved in legal proceedings and regulatory matters from time to time, and we may be held

responsible for liabilities incurred by certain of our Affiliates.

Our operating agreements with our Affiliates provide for governance structures that give Affiliate management the

authority to manage and operate their businesses on a day-to-day basis, including investment management operations,

marketing, product development, client relationships, employee matters, compensation programs, and compliance activities. As

a consequence, our financial condition and results of operations may be adversely affected by problems stemming from the day-

to-day operations of our Affiliates that we are not involved in, and where weaknesses or failures in internal processes or

systems, legal or regulatory matters, or other operational challenges could lead to a disruption or cessation of our Affiliates’

operations, liability to their clients, exposure to claims or disciplinary action, or reputational harm.

Certain of our Affiliates are limited liability companies or limited partnerships (or equivalent non-U.S. forms) of which we,

or entities controlled by us, are the managing member or general partner (or equivalent). Consequently, to the extent that any of

these Affiliates incur liabilities or expenses that exceed their ability to pay for them, we may be directly or indirectly liable for

their payment. Similarly, an Affiliate’s payment of distributions to us may be subject to claims by potential creditors, and an

Affiliate may default on distributions that are payable to us. In addition, with respect to each of these Affiliates, creditors,

regulators, or other counterparties or claimants may seek to hold us directly or indirectly liable in certain circumstances as a

control person for the acts of the Affiliate or its employees. Such claims, even if ultimately unsuccessful, could result in

significant costs, diversion of management attention, reputational harm, or adverse financial consequences. Further, we also

conduct compliance, governance, and operational activities, including with respect to distribution, sales, and marketing, through

our U.S. wealth and global distribution platforms to extend the reach of our Affiliates, and any liability arising in connection

with these activities, whether as a result of our own actions or the actions of our participating Affiliates or third-party service

providers, could result in direct liability to us. Accordingly, we and our Affiliates may face various claims, litigation, or

complaints from time to time, and we cannot predict the eventual outcome of such matters, some of which may be resolved in a

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manner unfavorable to us or our Affiliates, or whether any such matters could become material to a particular Affiliate or us in

any reporting period. See “Legal Proceedings” in Item 3. While we and our Affiliates maintain errors and omissions and

general liability insurance in amounts believed to be adequate to cover potential liabilities, we cannot be certain that we or our

Affiliates will not have claims or related expenses that exceed the limits of available insurance coverage, that the insurers will

remain solvent and will meet their obligations to provide coverage, or that insurance coverage will continue to be available to us

and our Affiliates with sufficient limits and at a reasonable cost. Any legal proceedings or regulatory matters that we or our

Affiliates are subject to could, whether with or without merit, be time consuming and expensive to defend and could divert

management attention and resources, and could result in judgments, findings, settlements, or allegations of wrongdoing that

could adversely affect our or their reputation, current and future business relationships, and our financial condition and results

of operations.

Our or our Affiliates’ controls and procedures and risk management policies may be inadequate, fail or be circumvented,

and operational risk could adversely affect our or our Affiliates’ reputation and financial position.

We and our Affiliates have adopted various controls, procedures, policies, and systems to monitor and manage risk in our

and their businesses. While we currently believe that our and our Affiliates’ operational controls, including controls over

compliance and over financial reporting, are effective, we cannot provide assurance that those controls, procedures, policies,

and systems will always be adequate to identify and manage the internal and external risks in our and our Affiliates’ various

businesses. Furthermore, we or our Affiliates may have errors in business processes or fail to implement proper procedures in

operating our respective businesses, which may expose us or our Affiliates to risk of financial loss or failure to comply with

regulatory requirements. Additionally, although we and our Affiliates have systems and practices in place to monitor our

respective third-party service providers, such third parties are subject to similar risks. For example, as we and our Affiliates

increasingly rely on outsourced support services, including for certain fund administration and compliance functions, any

disruptions or operational difficulties by such service providers (including to their information technology infrastructure), and

our or our Affiliates’ inability to make alternative arrangements in a timely manner, could result in significant disruption to our

respective business operations. We and our Affiliates, as well as our respective third-party service providers, are also subject to

the risk that employees or contractors, or other third parties, may deliberately seek to circumvent established controls to commit

fraud or act in ways that are inconsistent with our or their controls, policies, and procedures, and which may be harder to

monitor in remote work environments. The financial and reputational impact of control failures can be significant.

In addition, our and our Affiliates’ businesses and the markets in which we and our Affiliates operate are continuously

evolving. For example, the use of AI technologies by us, our Affiliates, or our respective third-party service providers could

result in new and expanded risks, particularly as the use of AI applications increases in prevalence and scope. Failure by us to

effectively manage the development and use of AI, our competitors’ development or use of AI, and an evolving AI regulatory

environment could have an adverse effect on our growth prospects, reputation, or business and results of operations. If our or

our Affiliates’ risk frameworks are ineffective, either because of a failure to keep pace with changes in the financial markets,

technological advancements, or regulatory requirements, our or our Affiliates’ businesses, counterparties, clients, or respective

third-party service providers, or for other reasons, we or our Affiliates could incur losses, suffer reputational damage, or be out

of compliance with applicable regulatory or contractual mandates or expectations.

Failure to maintain and properly safeguard an adequate technology infrastructure may limit our or our Affiliates’ growth,

result in losses or disrupt our or our Affiliates’ businesses.

Our and our Affiliates’ businesses are reliant upon financial, accounting, and technology systems and networks to process,

transmit, and store information, including sensitive client and proprietary information, and to conduct many business activities

and transactions with clients, advisers, regulators, vendors, and other third parties. The failure to implement, maintain, and

safeguard an infrastructure commensurate with the size and scope of our and our Affiliates’ businesses could impede

productivity and growth, which could adversely impact our financial condition and results of operations. Further, we and our

Affiliates rely on third parties for certain aspects of our respective businesses, including financial intermediaries, providers of

technology infrastructure, and other service providers such as broker-dealers, custodians, administrators and other agents, as

well as accounting, legal, and other professional advisors, and these parties are susceptible to similar risks, which risks are

further heightened by the concentration of certain key services such as cloud storage and e-mail services with certain third-party

service providers, which have experienced outages.

Our computer systems, software, internal and cloud-based networks, and mobile devices are vulnerable to cyber-attacks,

data privacy or security breaches, phishing schemes and related fraud attempts, ransomware, social engineering, unauthorized

access, theft, misuse, computer viruses, or other malicious code and other events that could have a security impact, and bad

actors may target us and our Affiliates because they believe we hold personal, confidential, and other price sensitive

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information about our clients, and existing and potential investments, as applicable. Any such cyber-attacks could have a

material impact on our financial conditions or results of operations. Further, third parties on whom we and our Affiliates rely,

including those providing cloud-based network services, may have similar vulnerabilities and may lack the necessary

infrastructure or resources, or may otherwise fail, to adequately protect against or respond to any cyber-attacks, data breaches,

or other incidents. If any such events occur, it could jeopardize confidential, proprietary, or other sensitive information of ours,

our Affiliates and our respective clients, employees or counterparties that may be stored in, or transmitted through, internal or

third-party computer systems, networks, and mobile devices, the volume of which has increased rapidly in recent years, or

could otherwise cause interruptions or malfunctions in our and our Affiliates’ operations or those of our respective clients or

counterparties, or in the operations of third parties on whom we and our Affiliates rely. The rapid evolution and increased

availability of AI has intensified cybersecurity risk, and given rise to additional vulnerabilities and potential entry points for

cyber threats, providing threat actors with additional tools to automate attacks, evade detection, generate sophisticated phishing

emails, or impersonate legitimate businesses or individuals. Despite efforts to ensure the integrity of systems and networks, it is

possible that we, our Affiliates, or our respective third-party service providers may not be able to anticipate or to implement

effective preventive measures against all threats, especially because the techniques used change frequently and can originate

from a wide variety of sources. Further, human errors may occur from time to time at our third-party service providers’ staff or

among our or our Affiliates’ employees, which can lead to or exacerbate security vulnerabilities or attacks. The increasing

frequency, scope, and sophistication of these cyber threats, and involvement of large criminal organizations that share tactics

and strategies, including in foreign jurisdictions in which we and our Affiliates operate, along with the continued reliance on

work-from-home environments, personal mobile and computing technologies, and third-party web conferencing services, have

increased exposures to these security-related risks. As a result, we or our Affiliates could experience disruption, significant

losses, increased costs, reputational harm, regulatory actions, or legal liability, any of which could have an adverse effect on our

financial condition and results of operations. We or our Affiliates may be required to spend significant additional resources to

modify protective measures or to investigate and remediate vulnerabilities or other exposures, and may be subject to litigation,

regulatory investigations, and potential fines, and financial losses that are either not insured against fully or not fully covered

through any insurance that we or our Affiliates maintain. Additionally, given our business model of providing our Affiliates

with autonomy in managing their businesses, we do not control, and may have limited involvement in, the design, oversight,

and maintenance of their technology systems and networks, as well as in the identification of or response to any cyber-attacks,

data breaches, or other incidents. See “Cybersecurity” in Item 1C.

Further, government and regulatory oversight of data privacy in particular has become a priority for regulators around the

world, including as examples, through the EU’s General Data Protection Regulation and the California Privacy Rights Act,

resulting in heightened data security and handling requirements, increased enforcement risk and fines, increased compliance

costs, and expanded incident response, reporting, and notification obligations. More recently, the SEC has implemented new

rules related to cybersecurity risk management for public companies and indicated that the implementation and testing of

cybersecurity procedures and controls is a continued examination priority. Recent well-publicized security breaches and

service outages at other companies and third-party service providers have exemplified security-related vulnerabilities, and may

lead to further government and regulatory scrutiny and heightened security requirements both in the U.S. and in other

jurisdictions in which we and our Affiliates operate.

Risk Management and Strategy

Our cybersecurity risk management program is integrated into our overall risk management framework. We regularly

assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities, and test those systems

pursuant to our cybersecurity policies, processes, and practices. To protect our information systems from cybersecurity threats,

we use various security tools that help us identify, escalate, investigate, resolve, and recover from security incidents in a timely

manner.

We recognize the importance of protecting information assets such as the personally identifiable information of our

employees, and proprietary business information regarding our Affiliates and their clients, and have adopted policies,

management oversight, accountability structures, and technology processes designed to safeguard this information. All of our

employees are required to attest annually to our information security policies and participate in regular security awareness

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training to protect their information and the AMG data and systems to which they have access. These trainings also instruct

employees on how to report any potential privacy or data security issues.

Our information security organization comprises internal and external resources designed to identify, protect, detect,

mitigate, resolve, and recover from various threats and attacks by malicious actors. We leverage 24x7x365 monitoring tools

and services to address the confidentiality, integrity, and availability of AMG assets and data. Regular internal and third-party

reviews are performed on our processes and technologies to validate the effectiveness of our privacy and data security controls

and safeguards. We monitor industry best practices and developments in data privacy and security and have increased scrutiny

of third-party service providers with access to sensitive AMG data, including through security risk assessments at the time of

initial contract, periodically as part of our third-party risk management process, and upon detection of an increase in the

vendor’s risk profile. In addition, we require key providers to meet appropriate security requirements and controls, and we

investigate security incidents that have impacted our third-party providers, as appropriate. We also have our own fully

documented proprietary security incident response plan, with defined roles and responsibilities that address notification

obligations and incident response procedures in the event of a data security breach. We are dedicated to business continuity and

resiliency, and have documented strategies, policies, and procedures in place designed to protect employee, business, Affiliate,

and Affiliate client data in the event of an emergency or natural disaster.

Although we provide our Affiliates with operational autonomy in managing their businesses and may have limited

involvement in the design, oversight, and maintenance of their respective technology systems and networks, we offer

cybersecurity support to Affiliates through our information security program, including with respect to conducting Affiliate

program assessments and assisting, as appropriate and practicable, in their identification of, and response to, an actual or

suspected cybersecurity incident. Additionally, prior to any investment in a new Affiliate, we conduct a diligence review of its

information security program.

We work with third-party service providers to proactively assess our information security program and provide us with an

industry view of the cyberthreat landscape, in addition to monitoring and supporting our control environment and breach

notification and response processes.

As of the date of this Annual Report on Form 10-K, cybersecurity threats have not materially affected and we believe are

not reasonably likely to materially affect AMG, including our business strategy, results of operations, or financial condition.

Refer to the risk factor captioned “Failure to maintain and properly safeguard an adequate technology infrastructure may limit

our or our Affiliates’ growth, result in losses or disrupt our or our Affiliates’ businesses” in Part I, Item 1A. “Risk Factors” for

more information regarding cybersecurity risks and potential related impacts on AMG.

Governance

We have a formal information security program, designed to develop and maintain privacy and data security practices to

protect AMG assets and sensitive third-party information, including personal and Affiliate information. This program is

governed by a committee comprising members of senior management, including our Chief Information Officer (“CIO”), which

meets regularly and reports to the Board of Directors at least annually (the “Information Security Governance Committee”).

Members of the Information Security Governance Committee oversee communications with the Board of Directors regarding

material cybersecurity incidents and provide the Board with a summary of risks from current cybersecurity threats on a regular

basis, as well as updates on management’s information security program oversight and maintenance activities, and any material

changes to AMG’s information security practices and procedures. The Board of Directors is also regularly provided with

cybersecurity educational sessions, including perspectives from external advisors that are invited to present on current

cybersecurity topics.

We take a risk-based approach to cybersecurity and have implemented policies throughout our operations that are designed

to address cybersecurity threats and our response to actual or suspected incidents. In particular, the Information Security

Governance Committee is responsible for the ongoing identification and assessment of reasonably foreseeable cybersecurity

threats and based on these assessments, evaluating and overseeing the implementation of safeguards for limiting such risks,

including employee training and compliance, and detection and prevention mechanisms. If a cybersecurity incident occurs, the

Information Security Governance Committee will assemble an incident response team responsible for the identification,

remediation, and post-incident review of such incident, engage outside advisors and notify third parties as appropriate, and

assess the materiality of the nature, scope, and timing of a given incident and whether public disclosure is required.

The CIO, in coordination with the Information Security Governance Committee, is responsible for leading the assessment

and management of cybersecurity risks. The current CIO has over 25 years of experience in information security, including

serving as our CIO since 2016, and holds a B.A. in Business with a focus in Computer Science. The CIO reports to the Board

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of Directors as part of the Information Security Governance Committee’s updates discussed above and regularly communicates

with the other members of the Information Security Governance Committee and senior management regarding cybersecurity

risks.

We conduct our operations around the world using a combination of leased and owned facilities. While we believe we

have suitable property resources currently, we will continue to evaluate our property needs and will adjust these resources as

necessary. Our Affiliates also typically lease office space in the city or cities in which they conduct business, as appropriate for

their respective business needs.

Governmental and regulatory authorities in the U.S. and other jurisdictions in which we and our Affiliates operate regularly

make inquiries and administer examinations with respect to our and our Affiliates’ compliance with applicable laws and

regulations, and from time to time, we and our Affiliates may be parties to various claims, lawsuits, complaints, regulatory

investigations, and other proceedings in the ordinary course of business.

Currently, there are no such claims, lawsuits, complaints, regulatory investigations, or other proceedings against us or our

Affiliates that, in our opinion, would have a material adverse effect on our financial position, liquidity, or results of operations.

However, there is no assurance as to whether or not any such matters could arise or have a material effect on our or our

Affiliates’ financial position, liquidity, or results of operations in any future reporting period.

The following executive overview, which summarizes the significant trends affecting our results of operations and financial

condition, as well as the remainder of this Management’s Discussion and Analysis of Financial Condition and Results of

Operations of Affiliated Managers Group, Inc. and its subsidiaries, should be read in conjunction with the “Forward-Looking

Statements” section set forth in Part I, the “Risk Factors” section set forth in Item 1A of Part I and with our Consolidated

Financial Statements and the notes thereto contained elsewhere in this Annual Report on Form 10-K, and in any more recent

filings with the SEC.

Our discussion and analysis of the key operating performance measures and financial results for fiscal year 2025

compared to fiscal year 2024 is included herein. For discussion and analysis of fiscal year 2024 compared to fiscal year 2023,

please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II

in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on

February 14, 2025.

Executive Overview

AMG is a strategic partner to leading independent investment firms globally. Our strategy is to generate long-term value

by investing in high-quality independent partner-owned firms, which we refer to as “Affiliates,” through a proven partnership

approach, and allocating resources across our unique opportunity set to the areas of highest growth and return. With their

entrepreneurial, investment-centric cultures and alignment of interests with clients through direct equity ownership by firm

principals, independent firms have fundamental competitive advantages in offering unique return streams to the marketplace.

Through AMG’s distinctive approach, we enhance these advantages to magnify the long-term success of our Affiliates and

actively support their independence. Our innovative model enables each Affiliate’s management team to retain autonomy

and significant equity ownership in their firm, while they leverage our strategic capabilities and insight, including access to

growth capital, product strategy and development, capital formation capabilities, incentive alignment and succession

planning, and strategic advisory to expand their reach, diversify their businesses, and enhance their long-term success. As of

December 31, 2025, our aggregate assets under management were approximately $813 billion across a diverse range of

private markets, liquid alternative, and differentiated long-only investment strategies.

In 2025, we advanced our strategy of allocating capital to areas of durable client demand by entering into four new

partnerships with independent firms collectively managing approximately $23 billion in alternative strategies, announcing a

strategic partnership with Brown Brothers Harriman (“BBH”), and further expanding our U.S. wealth platform.

In the first quarter of 2025, we completed our minority investment in NorthBridge Partners, LLC (“NorthBridge”), a

private markets manager specializing in industrial logistics real estate assets, and in the second quarter of 2025, we completed

our minority investment in Verition Fund Management LLC (“Verition”), a global multi-strategy investment firm.

In the fourth quarter of 2025, we completed our minority investments in Montefiore Investment (“Montefiore”), a

European private equity firm focused on the services sector, and Qualitas Energy, a renewables-focused global infrastructure

manager specializing in energy transition. We also announced a strategic partnership with BBH, a privately held global

financial services firm, to acquire a minority equity interest in BBH Credit Partners, a newly formed subsidiary of BBH

focused on structured and alternative credit investment strategies. The transaction was completed in January 2026.

Following the close of these transactions, Affiliate management continues to hold a significant majority of the equity of the

respective businesses and directs the day-to-day operations.

On February 12, 2026, we announced the completion of our additional minority investment in Garda Capital Partners LP

(“Garda”), a liquid alternatives manager specializing in fixed income relative value strategies and an Affiliate since 2019, and

our minority investment in HighBrook Investors (“HighBrook”), a private markets manager specializing in real estate assets.

Following the close of the transactions, our investment in Garda continues to be accounted for under the equity method and

Affiliate management continues to hold a majority of the equity of the respective businesses and directs the day-to-day

operations.

While Affiliates typically partner with AMG to preserve their independence and partnership culture, evolving conditions

may lead an Affiliate to consider strategic alternatives; consistent with our partnership approach, in such instances, we

collaborate with Affiliates to evaluate these options. When strategic transactions occur, they typically enhance our flexibility

to execute our growth strategy and return capital to shareholders, as we deploy the resulting proceeds in accordance with our

disciplined capital allocation framework.

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In the third quarter of 2025, we completed the sale of our minority equity interest in Peppertree Capital Management,

Inc. (“Peppertree”), as part of the announced acquisition of Peppertree by TPG Inc. (“TPG”), a public company listed on the

Nasdaq Global Select Market (the “Peppertree Transaction”). Pursuant to the terms of the agreement with TPG, under which

we and each of the other owners agreed to sell our respective equity interests in Peppertree, we received total consideration of

$253.2 million, net of transaction costs, which included $99.8 million in cash and 2.9 million TPG Class A common shares,

all of which we have since sold. Our gain from the transaction was $127.6 million.

In November 2025, Comvest Partners (“Comvest”) completed the previously announced agreement to sell its private

credit business to Manulife Financial Corporation (the “Comvest Transaction”). Pursuant to the terms of the agreement, we

received total cash consideration of $282.0 million for our portion of Comvest’s private credit business and our gain from the

transaction was $227.6 million.

In December 2025, we completed the sale of our minority equity interest in Montrusco Bolton Investments Inc.

(“Montrusco Bolton”) to Walter Global Asset Management Inc. (the “Montrusco Bolton Transaction”). Pursuant to the terms

of the agreement, we received total cash consideration of $22.0 million and our gain from the transaction was $16.2 million.

Operating Performance Measures

Under accounting principles generally accepted in the U.S. (“GAAP”), we are required to consolidate certain of our

Affiliates and use the equity method of accounting for others. Whether we consolidate an Affiliate or use the equity method of

accounting, we maintain the same innovative partnership approach and provide support and assistance in substantially the same

manner for all of our Affiliates. Furthermore, all of our Affiliates are investment managers and are impacted by similar

marketplace factors and industry trends. Therefore, certain key aggregate operating performance measures are important in

providing management with a comprehensive view of the operating performance and material trends across our entire business.

The following table presents our key aggregate operating performance measures:

(in billions, except as noted)

Assets under management, and therefore average assets under management, include the assets under management of our

consolidated and equity method Affiliates. Assets under management is presented on a current basis without regard to the

timing of the inclusion of an Affiliate’s financial results in our operating performance measures and Consolidated Financial

Statements. Average assets under management reflects the timing of the inclusion of an Affiliate’s financial results in our

operating performance measures and Consolidated Financial Statements. Average assets under management for equities and

similar investment products generally represents an average of the daily net assets under management, while for liquid

alternatives and multi-asset and fixed income products, average assets under management generally represents an average of the

assets at the beginning or end of each month during the applicable period. Average assets under management for private

markets products generally represents total commitments or invested assets under management.

Aggregate fees consist of the total asset- and performance-based fees earned by all of our consolidated and equity method

Affiliates. In the case of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense

reimbursements paid by the underlying products. For certain of our Affiliates accounted for under the equity method, we report

the Affiliate’s aggregate fees one quarter in arrears. Aggregate fees are provided in addition to, but not as a substitute for,

Consolidated revenue or other GAAP performance measures.

Assets Under Management

Our Affiliates manage capital on behalf of clients across a diverse range of investment strategies. Our Affiliates earn asset-

based fees on the capital that they manage and certain of our Affiliate’s strategies earn performance-based fees based on the

performance generated by their investment products. For the year ended December 31, 2025, assets under management

increased $105.4 billion or 15% driven by a combination of investment performance generated across our Affiliates, net client

cash inflows, and the addition of assets associated with new partnerships with Affiliates operating in growing areas within

alternative strategies. Client demand for alternative strategies continued in 2025, with strong net inflows into liquid alternative

strategies and momentum in private markets fundraising, which more than offset net outflows in equity strategies — an area

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that continues to face headwinds in line with industry trends — and the removal of assets under management associated with

the sale of certain minority equity interests in Affiliates completed during the year. As we continue to execute our growth

strategy by investing in new and existing Affiliates, as well as in AMG’s strategic capabilities, we expect our business mix to

further evolve, expanding our exposure to in-demand strategies in both private markets and liquid alternatives, better

positioning AMG to continue to benefit from industry growth trends with an increasingly diversified business profile.

The following table presents changes in our assets under management by strategy:

(in billions)

(1) Attributable to NorthBridge, Verition, Montefiore, and Qualitas Energy as of their respective closing dates.

(2) Attributable to Peppertree, Comvest’s private credit business, and Montrusco Bolton as of their respective closing dates.

(3) Foreign exchange reflects the impact of translating the assets under management of our Affiliates whose functional

currency is not the U.S. dollar into our functional currency.

(4) Other includes product transitions and reclassifications.

The following tables present performance of our investment strategies, where available, measured by the percentage of

assets under management ahead of their relevant benchmark:

(1) Past performance is not indicative of future results. Performance and AUM information is as of December 31, 2025 and is

based on data available at the time of calculation. Product returns are sourced from Affiliates while benchmark returns are

generally sourced via third-party subscriptions.

(2) For private markets products, performance is reported as the percentage of assets that have outperformed benchmarks on a

since-inception internal rate of return basis. Benchmarks utilized include a combination of public market equivalents, peer

medians, and absolute returns where benchmarks are not available. For purposes of investment performance comparisons,

the latest vintage comparison includes the most recent vehicles and strategies (traditional long-duration investment funds,

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customized vehicles, and other evergreen vehicles and product structures) where meaningful performance is available and

calculable. In order to illustrate the performance of our private markets product category over a longer period of history,

the last three vintages comparison incorporates the latest vintage vehicles and the prior two vintages for traditional long-

duration investment funds, as well as additional vehicles and strategies launched during the equivalent time period as the

last three vintages of traditional long-duration investment funds. Due to the nature of these investments and vehicles,

reported performance is typically on a three- to six-month lag basis.

(3) For liquid alternative and equity products, performance is reported as the percentage of assets that have outperformed

benchmarks across the indicated periods, and excludes market-hedging products. For purposes of investment performance

comparisons, products are an aggregation of portfolios (separate accounts, investment funds, and other products) that each

represent a particular investment objective, using the most representative portfolio for the performance comparison.

Performance is presented for products with a three-, five-, and/or ten-year track record and is measured on a consistent

basis relative to the most appropriate benchmarks. Benchmark appropriateness is generally reviewed annually to reflect

any changes in how underlying portfolios/mandates are managed. Product and benchmark performance is reflected as total

return and is annualized. Reported product performance is gross-of-fees for institutional and high-net-worth separate

accounts, and generally net-of-fees across retail funds and other commingled vehicles such as hedge funds.

(4) Multi-asset and fixed income products are mainly our wealth management and solutions offerings. These investment

products are primarily customized toward wealth preservation, estate planning, and liability and tax management, and

therefore are typically not measured against a benchmark.

Aggregate Fees

Aggregate fees consist of asset- and performance-based fees of our consolidated and equity method Affiliates. In the case

of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense reimbursements paid by

the underlying products. Asset-based fees include advisory and other fees earned by our Affiliates for services provided to their

clients and are typically determined as a percentage of the value of a client’s assets under management, generally inclusive of

uncalled commitments. Asset-based fees are generally impacted by the level of average assets under management and the

composition of these assets across our strategies with different asset-based fee ratios. Our asset-based fee ratio is calculated as

asset-based fees divided by average assets under management.

In some cases, if product returns exceed certain performance thresholds, we will participate in performance-based fees.

Performance-based fees are based on investment performance, typically on an absolute basis or relative to a benchmark or

hurdle rate, and are generally recognized when it is improbable that there will be a significant reversal in the amount of revenue

recognized. Performance-based fees are generally recognized less frequently than asset-based fees and will vary from period to

period because they inherently depend on investment performance. As of December 31, 2025, approximately 28% of our total

assets under management could potentially earn performance-based fees. These percentages were approximately 10% and 47%

of our assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method,

respectively. We anticipate performance-based fees will be a recurring component of aggregate fees; however we do not

anticipate these fees to be a significant component of Consolidated revenue as these fees are predominately earned by our

Affiliates accounted for under the equity method.

Aggregate fees were $6,167.5 million in 2025, an increase of $931.5 million or 18% as compared to 2024. The increase in

aggregate fees was due to a $660.2 million or 13% increase from asset-based fees and a $271.3 million or 5% increase from

performance-based fees, primarily in liquid alternative strategies. The increase in asset-based fees was principally due to an

increase in our Affiliates’ average assets under management, primarily in liquid alternative and private markets strategies, and

changes in the composition of our assets under management, including net client cash flows from our Affiliates managing

alternative strategies, which typically have higher fee rates and the impact of our investments in new Affiliates primarily

managing alternative strategies.

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Financial and Supplemental Financial Performance Measures

The following table presents our key financial and supplemental financial performance measures:

(in millions)

(1) Adjusted EBITDA (controlling interest) and Economic net income (controlling interest) are non-GAAP performance

measures and are discussed in “Supplemental Financial Performance Measures.”

Net income (controlling interest) increased $205.0 million or 40% in 2025. This increase was primarily due to $371.3

million of Affiliate transaction gains and a $150.2 million increase in Equity method income (net). These increases were

partially offset by a $97.4 million increase in Income tax expense attributable to the controlling interest, primarily due to

Affiliate transaction gains, a $97.1 million increase in Intangible amortization and impairments attributable to the controlling

interest, and a $91.2 million increase in Affiliate equity expense attributable to the controlling interest.

Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management as it

provides a comprehensive view of our share of the financial performance of our business. Adjusted EBITDA (controlling

interest) increased $103.7 million or 11% in 2025, primarily due to a $931.5 million or 18% increase in aggregate fees.

Adjusted EBITDA (controlling interest) increased less than aggregate fees on a percentage basis primarily due to an increase in

earnings at certain Affiliates, many of which manage alternative strategies and are accounted for under the equity method, and

therefore we own less of an economic interest.

We believe Economic net income (controlling interest) is an important supplemental financial performance measure

because it represents our performance before non-cash expenses primarily related to our acquisition of interests in Affiliates and

improves comparability of performance between periods. Economic net income (controlling interest) increased $67.7 million

or 10% in 2025, primarily due to a $103.7 million or 11% increase in Adjusted EBITDA (controlling interest).

Results of Operations

The following discussion includes the key operating performance measures and financial results of our consolidated and

equity method Affiliates. Our consolidated Affiliates’ financial results are included in Consolidated revenue, Consolidated

expenses, and Investment and other income, and our share of our equity method Affiliates’ financial results is reported, net of

intangible amortization and impairments and tax, in Equity method income (net) in our Consolidated Statements of Income.

Consolidated Revenue

Consolidated revenue is derived primarily from asset-based fees from investment management services earned by our

consolidated Affiliates. For these Affiliates, we typically use operating structures where we contractually share in the

Affiliate’s revenue without regard to expenses. Consolidated revenue is generally determined by the level of our consolidated

Affiliates’ average assets under management and the composition of these assets across our consolidated Affiliates’ investment

strategies with different asset-based fee ratios and performance-based fees.

The following table presents our consolidated Affiliates’ average assets under management and Consolidated revenue:

(in millions, except as noted)

Consolidated revenue increased $33.5 million or 2% in 2025, due to a $26.1 million or 1% increase from asset-based fees

and a $7.4 million or 1% increase from performance-based fees, primarily in private markets strategies. The increase in asset-

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based fees was principally due to an increase in our consolidated Affiliates’ average assets under management, primarily in

private markets strategies, partially offset by changes in the composition of our assets under management.

Consolidated Expenses

The following table presents our Consolidated expenses:

(in millions)

(1) Percent change is not meaningful.

Compensation and related expenses increased $104.5 million or 11% in 2025, primarily due to an $83.9 million increase in

Affiliate equity-related activities and a $7.2 million increase in share-based compensation.

Selling, general and administrative expenses increased $32.1 million or 9% in 2025, primarily due to a $23.8 million

increase in professional fees and an $8.5 million increase in investment-related expenses driven by an increase in average assets

under management on which these expenses are incurred.

Intangible amortization and impairments increased $131.3 million in 2025, primarily due to expenses of $135.0 million to

reduce the carrying value of indefinite-lived acquired client relationships for certain mutual fund assets to fair value. This

increase was partially offset by a $3.7 million decrease in amortization expense due to certain definite-lived assets being fully

amortized.

Interest expense increased $3.2 million or 2% in 2025, primarily due to a $14.4 million increase from our 5.50% senior

unsecured notes issued in August 2024 (the “2034 senior notes”), a $6.7 million increase from our 6.75% junior subordinated

notes issued in March 2024 (the “2064 junior subordinated notes”), and a $3.6 million increase from borrowings under our

senior unsecured multicurrency revolving credit facility (the “revolver”). These increases were partially offset by a $13.0

million decrease due to the repayment of our senior unsecured term loan facility in the third quarter of 2024, a $5.3 million

decrease due to the maturity of our 3.50% senior notes in August 2025, and a $2.2 million decrease due to the maturity of our

4.25% senior notes in February 2024.

There were no significant changes to Depreciation and other amortization in 2025.

Other expenses (net) increased $29.5 million or 73% in 2025, primarily due to a $9.2 million increase in expenses related

to the settlement of conversions with respect to our junior convertible securities (see Note 5) and an $8.2 million increase in

expenses related to changes in the values of contingent payment obligations.

Equity Method Income (Net)

When we do not own a controlling equity interest in an Affiliate, but have significant influence, we account for our interest

in the Affiliate under the equity method. Our share of pre-tax earnings or losses from Affiliates accounted for under the equity

method (“pre-tax equity method earnings”), net of intangible amortization and impairments and tax, is included in Equity

method income (net). For certain of our Affiliates accounted for under the equity method, we report the Affiliate’s financial

results in our Consolidated Financial Statements one quarter in arrears.

For a majority of these Affiliates, we use operating structures where we contractually share in the Affiliate’s revenue less

agreed-upon expenses. We also use operating structures where we contractually share in the Affiliate’s revenue without regard

to expenses.

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Equity method revenue, net is derived primarily from asset- and performance-based fees from investment management

services earned by our equity method Affiliates, net of certain expense reimbursements paid by the underlying products. Equity

method revenue, net is generally determined by the level of our equity method Affiliates’ average assets under management and

the composition of these assets across our equity method Affiliates’ investment strategies with different asset-based fee ratios

and performance-based fees. Our Affiliates accounted for under the equity method manage a greater proportion of assets

subject to performance-based fees than our consolidated Affiliates and, as a result, equity method revenue, net will generally

have more performance-based fees than Consolidated revenue.

The following table presents our equity method Affiliates’ average assets under management and equity method Affiliate

revenue, net, as well as pre-tax equity method earnings, equity method intangible amortization, equity method intangible

impairments, if any, and equity method income tax, which in aggregate form Equity method income (net):

(in millions, except as noted)

(1) Percent change is not meaningful.

Equity method revenue, net increased $898.0 million or 28% in 2025, due to a $634.1 million or 20% increase from asset-

based fees and a $263.9 million or 8% increase from performance-based fees, primarily in liquid alternative strategies. The

increase in asset-based fees was principally due to an increase in our equity method Affiliates’ average assets under

management, primarily in liquid alternative strategies, and changes in the composition of our assets under management,

including net client cash flows from our equity method Affiliates managing alternative strategies, which typically have higher

fee rates and the impact of our investments in new Affiliates primarily managing alternative strategies.

Pre-tax equity method earnings increased $122.4 million or 27% in 2025, primarily due to an $898.0 million or 28%

increase in equity method revenue, net.

Equity method intangible amortization increased $8.0 million or 9% in 2025, primarily due to a $17.6 million increase in

amortization expense due to investments in new Affiliates. This increase was partially offset by a $4.6 million decrease in

amortization expense related to certain definite-lived assets being fully amortized and a $3.9 million decrease in amortization

expense due to a decrease in actual and expected client attrition for certain definite-lived acquired client relationships.

For the year ended December 31, 2024, we recorded a $39.9 million impairment on equity method investments. For the

year ended December 31, 2025, no equity method intangible impairments were recorded. See Note 8 of our Consolidated

Financial Statements.

Affiliate Transaction Gains

The following table presents our Affiliate transaction gains:

(in millions)

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(1) Percent change is not meaningful.

For the years ended December 31, 2023 and 2025, we recorded a gain of $133.1 million on the sale of our equity interest in

Veritable, LP (“Veritable”) (the “Veritable Transaction”), and total gains of $371.3 million related to the sale of our equity

interests in Peppertree, Comvest’s private credit business, and Montrusco Bolton, respectively. See Notes 7 and 8 of our

Consolidated Financial Statements.

Investment and Other Income

The following table presents our Investment and other income:

(in millions)

Investment and other income increased $5.7 million or 7% in 2025, primarily due to increases in net realized and

unrealized gains on other investments and marketable securities of $17.4 million and $5.8 million, respectively. These

increases were partially offset by a $16.6 million decrease in interest income.

Income Tax Expense

The following table presents our Income tax expense:

(in millions)

Our consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes

attributable to the non-controlling interests.

Income tax expense increased $99.7 million or 55% in 2025. Our effective tax rate (controlling interest) for the year ended

December 31, 2025 was 27.5% as compared to 25.5% for the year ended December 31, 2024. The increase in the effective tax

rate (controlling interest) was primarily due to unrecognized tax benefits and non-deductible compensation expense, partially

offset by higher tax windfalls attributable to share-based compensation for the year ended December 31, 2025.

Net Income

The following table presents Net income, Net income (non-controlling interests), and Net income (controlling interest):

(in millions)

Net income (controlling interest) increased $205.0 million or 40% in 2025, primarily due to Affiliate transaction gains and

an increase in Equity method income (net). These increases to Net income (controlling interest) were partially offset by

increases in Income tax expense attributable to the controlling interest, primarily due to Affiliate transaction gains, Intangible

amortization and impairments attributable to the controlling interest, and Affiliate equity expense attributable to the controlling

interest.

Supplemental Financial Performance Measures

As supplemental information to our GAAP performance measures, including Net income (see Note 21 of our Consolidated

Financial Statements), we provide non-GAAP performance measures of Adjusted EBITDA (controlling interest), Economic net

income (controlling interest), and Economic earnings per share. We believe that many investors use our Adjusted EBITDA

(controlling interest) when comparing our financial performance to other companies in the investment management industry.

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Management utilizes these non-GAAP performance measures to assess our performance before our share of certain non-cash

GAAP expenses primarily related to the acquisition of interests in Affiliates and to improve comparability between periods.

Economic net income (controlling interest) and Economic earnings per share are used by management and our Board of

Directors as our principal performance benchmarks, including as one of the measures for determining executive compensation.

These non-GAAP performance measures are provided in addition to, but not as a substitute for, Net income, Net income

(controlling interest), Earnings per share, or other GAAP performance measures.

Adjusted EBITDA (controlling interest)

Adjusted EBITDA (controlling interest) represents our performance before our share of interest expense, income and

certain non-income based taxes, depreciation, amortization, impairments, gains and losses related to Affiliate transactions, and

non-cash items such as certain Affiliate equity-related activities, gains and losses on our contingent payment obligations, and

unrealized gains and losses on seed capital, general partner commitments, and other strategic investments. Adjusted EBITDA

(controlling interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner

commitments, and other strategic investments.

The following table presents a reconciliation of Net income (controlling interest) to Adjusted EBITDA (controlling

interest):

(in millions)

(1) Includes equity method income tax.

(2) Intangible amortization and impairments in our Consolidated Statements of Income include amortization attributable to the

non-controlling interests of our consolidated Affiliates. For our Affiliates accounted for under the equity method, we do

not separately report intangible amortization and impairments in our Consolidated Statements of Income. Our share of

these Affiliates’ amortization and impairments is included in Equity method income (net). The following table presents the

Intangible amortization and impairments shown above:

(in millions)

(3) The year ended December 31, 2023 includes a gain of $133.1 million related to the Veritable Transaction and realized

gains of $29.6 million on ordinary shares of EQT AB (“EQT”), a public company listed on the Nasdaq Stockholm

(EQT.ST), which we received in connection with the sale of our equity interest in Baring Private Equity Asia (“BPEA”) in

the fourth quarter of 2022 (the “BPEA Transaction”). The year ended December 31, 2025 includes total gains of

$371.3 million related to the Peppertree, Comvest, and Montrusco Bolton Transactions and realized gains of $6.2 million

on TPG Class A common shares. See Notes 7 and 8 of our Consolidated Financial Statements. Veritable, Peppertree,

Comvest, and Montrusco Bolton Transaction gains are recorded in Affiliate transaction gains, and realized gains on EQT

ordinary shares and TPG Class A common shares are recorded in Investment and other income in our Consolidated

Statements of Income.

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(4) Other items include certain non-income based taxes, depreciation, and non-cash items such as certain Affiliate equity-

related activities, gains and losses on our contingent payment obligations, unrealized gains and losses on seed capital,

general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed

capital, general partner commitments, and other strategic investments. For the year ended December 31, 2025, the increase

in other items was predominantly the result of Affiliate equity-related activities.

Economic Net Income (controlling interest) and Economic Earnings Per Share

Under our Economic net income (controlling interest) definition, we adjust Net income (controlling interest) for our share

of pre-tax intangible amortization and impairments related to intangible assets (including the portion attributable to equity

method investments in Affiliates) because these expenses do not correspond to the changes in the value of these assets, which

do not diminish predictably over time. We also adjust for deferred taxes attributable to intangible assets because we believe it

is unlikely these accruals will be used to settle material tax obligations. Further, we adjust for gains and losses related to

Affiliate transactions, net of tax, and other economic items.

Economic earnings per share represents Economic net income (controlling interest) divided by the Average shares

outstanding (adjusted diluted). In this calculation, we exclude the potential shares issued upon settlement of Redeemable non-

controlling interests from Average shares outstanding (adjusted diluted) because we intend to settle those obligations without

issuing shares, consistent with all prior Affiliate equity purchase transactions. The potential share issuance in connection with

our junior convertible securities is measured using a “treasury stock” method. Under this method, only the net number of

shares of common stock equal to the value of these junior convertible securities in excess of par, if any, are deemed to be

outstanding. We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in

available capital resources (which could be used to repurchase shares of our common stock) that occurs when these securities

are converted and we are relieved of our debt obligation.

The following table presents a reconciliation of Net income (controlling interest) to Economic net income (controlling

interest) and Economic earnings per share:

(in millions, except per share data)

(1) See note (2) to the table in “Adjusted EBITDA (controlling interest).”

(2) Includes equity method deferred taxes. For the year ended December 31, 2023, intangible-related deferred taxes have been

adjusted to eliminate benefits of $28.9 million related to the Veritable Transaction. For the year ended December 31, 2025,

intangible-related deferred taxes have been adjusted to eliminate net expenses of $4.4 million related to the Peppertree and

Comvest Transactions.

(3) The year ended December 31, 2023 includes a gain of $133.1 million related to the Veritable Transaction and realized

gains of $29.6 million on EQT ordinary shares related to the BPEA Transaction, net of $40.6 million income tax expense.

The year ended December 31, 2025 includes total gains of $371.3 million related to the Peppertree, Comvest, and

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Montrusco Bolton Transactions and realized gains of $6.2 million on TPG Class A common shares, net of $93.1 million of

income tax expense. See Notes 7 and 8 of our Consolidated Financial Statements.

(4) Other economic items include certain Affiliate equity-related activities, gains and losses related to contingent payment

obligations, tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital,

general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed

capital, general partner commitments, and other strategic investments. For the year ended December 31, 2025, the increase

in other economic items was predominantly the result of Affiliate equity-related activities.

Liquidity and Capital Resources

We generate long-term value by investing in new Affiliate partnerships, existing Affiliates, and strategic value-add

capabilities through which we can leverage our scale and resources to benefit our Affiliates and enhance their long-term growth

prospects. Given our annual cash generation from operations, in addition to investing for growth in our business, we are also

able to return excess capital to shareholders primarily through share repurchases. We continue to manage our capital structure

consistent with an investment grade company and are currently rated A3 by Moody’s Investors Service and BBB+ by S&P

Global Ratings.

Cash and cash equivalents were $586.0 million as of December 31, 2025 and were attributable to both our controlling and

the non-controlling interests. In 2025, we met our cash requirements primarily through cash generated by operating activities,

senior bank debt borrowings, and an issuance of senior notes. In addition, during the year ended December 31, 2025, we

received total after-tax net proceeds of approximately $490 million from the Peppertree, Comvest, and Montrusco Bolton

Transactions. Our principal uses of cash in 2025 were for investments in new Affiliates, the return of excess capital through

share repurchases, repayment of debt, and distributions to Affiliate equity holders.

We expect investments in new Affiliates, investments in existing Affiliates, primarily through purchases of Affiliate equity

interests and general partner and seed capital investments, the return of capital through share repurchases and the payment of

cash dividends on our common stock, repayment of debt, distributions to Affiliate equity holders, payment of income taxes, and

general working capital to be the primary uses of cash on a consolidated basis for the foreseeable future. In addition, in January

2026, we settled each of our conversion obligations with respect to our junior convertible securities in cash for an aggregate

amount of $514.6 million. We anticipate that our current cash balance, cash flows from operations, and borrowings under our

revolver will be sufficient to support our uses of cash for the foreseeable future. In addition, we may draw funding from the

debt and equity capital markets, and our credit ratings, among other factors, allow us to access these sources of funding on

favorable terms.

The following table presents operating, investing, and financing cash flow activities:

(in millions)

Operating Cash Flow

Operating cash flows are calculated by adjusting Net income for other significant sources and uses of cash, significant non-

cash items, and timing differences in the cash settlement of assets and liabilities.

For the year ended December 31, 2025, Cash flows from operating activities were $973.2 million, primarily from Net

income of $904.0 million adjusted for non-cash items of $424.5 million and distributions of earnings received from equity

method investments of $467.8 million. In 2025, operating cash flows were primarily attributable to the controlling interest.

Investing Cash Flow

For the year ended December 31, 2025, Cash flows used in investing activities were $206.1 million, primarily due to

$776.0 million of investments in Affiliates and $103.8 million of purchases of investment securities. These items were partially

offset by $403.8 million of cash proceeds from Affiliate transactions and $266.2 million of maturities and sales of investment

securities. In 2025, investing cash flows were primarily attributable to the controlling interest.

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Financing Cash Flow

For the year ended December 31, 2025, Cash flows used in financing activities were $1,148.7 million, primarily due to

repayment of senior bank debt borrowings and matured senior notes of $826.1 million, $706.3 million of repurchases of

common stock, net, $252.3 million of distributions to non-controlling interests, $170.3 million of Affiliate equity purchases, net

of issuances, and $108.0 million of taxes paid on shares withheld for share-based awards. These items were partially offset by

senior bank debt borrowings and an issuance of senior notes of $899.3 million. In 2025, financing cash flows were primarily

attributable to the controlling interest.

Affiliate Equity

We periodically purchase Affiliate equity from and issue Affiliate equity to our consolidated Affiliate partners and other

parties under agreements that provide us with a conditional right to call and Affiliate equity holders with a conditional right to

put their Affiliate equity interests to us at certain intervals. We have the right to settle a portion of these purchases in shares of

our common stock. For Affiliates accounted for under the equity method, we do not typically have such put and call

arrangements. The purchase price of these conditional purchases is generally calculated based upon a multiple of the Affiliate’s

cash flow distributions, which is intended to represent fair value. In certain cases, Affiliate equity holders are also permitted to

sell their equity interests to Affiliate partners or other parties, subject to our approval or other restrictions.

As of December 31, 2025, the current redemption value of Affiliate equity interests was $408.0 million, of which $246.8

million was presented as Redeemable non-controlling interests (including $32.2 million of consolidated Affiliate sponsored

investment products primarily attributable to third-party investors), and $161.2 million was included in Other liabilities on the

Consolidated Balance Sheets. Although the timing and amounts of these purchases are difficult to predict, we paid $176.7

million for Affiliate equity purchases and received $6.4 million for Affiliate equity issuances in 2025, and we expect net

purchases of approximately $100 million of Affiliate equity in 2026. In the event of a purchase, we become the owner of the

cash flow associated with the purchased equity. See Notes 13 and 14 of our Consolidated Financial Statements.

Share Repurchases

Our Board of Directors authorized share repurchase programs in July 2024 and January 2026 to repurchase up to 5.4

million and 4.2 million shares of our common stock, respectively, and these authorizations have no expiry. Purchases may be

made from time to time, at management’s discretion, in the open market or in privately negotiated transactions, including

through the use of trading plans, as well as pursuant to accelerated share repurchase programs or other share repurchase

strategies that may include derivative financial instruments. For the year ended December 31, 2025, we repurchased 3.3 million

shares of our common stock at an average price per share of $212.92. As of the January 26, 2026 authorization, there were a

total of 6.0 million shares available for repurchase under our share repurchase programs.

Debt

The following table presents the carrying value of our outstanding indebtedness and a reconciliation to Debt as presented

on our Consolidated Balance Sheets:

(in millions)

As of December 31, 2025, the weighted average maturity of our outstanding senior and junior subordinated notes is 22

years, all of which is maturing in 2030 and beyond. Our nearest term maturity with respect to our senior and junior

subordinated notes relates to our $350.0 million senior notes due June 2030 (“the 2030 senior notes”). See Note 5 of our

Consolidated Financial Statements.

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Senior Bank Debt

As of December 31, 2025, we had a $1.25 billion revolver which matures on November 15, 2029. Subject to certain

conditions, we may increase the commitments under the revolver by up to an additional $500.0 million.

Under the terms of the revolver we are required to meet two financial ratio covenants. The first of these covenants is a

maximum ratio of debt to EBITDA (the “bank leverage ratio”) of 3.25x. The second covenant is a minimum ratio of EBITDA

to cash interest expense (the “bank interest coverage ratio”) of 3.00x. For purposes of calculating these ratios, share-based

compensation and certain Affiliate equity expenses, among other specified expenses, charges, and costs, are added back to

Adjusted EBITDA. As of December 31, 2025, our bank leverage and bank interest coverage ratios were 0.9x and 8.5x,

respectively.

As of December 31, 2025, we had no outstanding borrowings under the revolver, and we could borrow all remaining

capacity and maintain compliance with all of the terms of the revolver. As of the date of this Annual Report on Form 10-K, we

had outstanding borrowings of $475.0 million under the revolver.

Senior Notes

In the third quarter of 2025, our $350.0 million 3.50% senior notes matured and were fully repaid.

As of December 31, 2025, we had senior notes outstanding, the respective principal terms of which are presented and

described below:

On December 11, 2025, we issued $425.0 million of 2036 senior unsecured notes with a maturity date of February 15,

2036 (the “2036 senior notes”). Interest is payable beginning August 15, 2026.

In addition to customary event of default provisions, the indenture governing the senior notes, including the applicable

supplemental indentures with respect to the 2030, 2034, and 2036 senior notes, limits our ability to consolidate, merge, or sell

all or substantially all of our assets, and requires us to make an offer to repurchase the applicable senior notes at 101% of the

principal amount (plus any accrued and unpaid interest), upon certain change of control triggering events. The senior notes

may be redeemed, in whole or in part, at a make-whole redemption price (plus accrued and unpaid interest), at any time prior to

March 15, 2030, in the case of the 2030 senior notes, at any time prior to May 20, 2034, in the case of the 2034 senior notes,

and at any time prior to November 15, 2035, in the case of the 2036 senior notes. In addition, the 2030, 2034, and 2036 senior

notes may be redeemed at par (plus accrued and unpaid interest), in whole or in part, at any time, on or after March 15, 2030,

May 20, 2034, and November 15, 2035, respectively. We may also repurchase senior notes in the open market or in privately

negotiated transactions from time to time at management’s discretion.

We used a majority of the net proceeds from the 2036 senior notes to settle our conversion obligations with respect to our

junior convertible securities in January 2026, as further described below.

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Junior Subordinated Notes

As of December 31, 2025, we had junior subordinated notes outstanding, the respective principal terms of which are

presented and described below:

As of December 31, 2025, each of the 2059 and 2060 junior subordinated notes could be redeemed at any time, in whole or

in part. The other junior subordinated notes may be redeemed at any time, in whole or in part, on or after September 30, 2026,

in the case of the 2061 junior subordinated notes, and on or after March 30, 2029, in the case of the 2064 junior subordinated

notes. In each case, the junior subordinated notes may be redeemed at 100% of the principal amount of the notes being

redeemed, plus any accrued and unpaid interest thereon. Prior to the applicable redemption date, at our option, the applicable

junior subordinated notes may also be redeemed, in whole but not in part, at 100% of the principal amount, plus any accrued

and unpaid interest, if certain changes in tax laws, regulations, or interpretations occur; or at 102% of the principal amount, plus

any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for securities with

features similar to the applicable notes.

Junior Convertible Securities

As of December 31, 2025, we had $340.6 million of principal outstanding on our junior convertible trust preferred

securities outstanding (the “junior convertible securities”). Prior to their redemption, as described below, the junior convertible

securities bore interest at a rate of 5.15% per annum, which interest payments were payable quarterly in cash. The junior

convertible securities were considered contingent payment debt instruments under federal income tax regulations, which

required us to deduct interest in an amount greater than its reported interest expense (“excess interest expense deductions”).

In November 2025, pursuant to the terms of the junior convertible securities, we adjusted the conversion rate of the

securities to 0.2582 shares of common stock per $50.00 junior convertible security, equivalent to an adjusted conversion price

of $193.65 per share. The adjustment was the result of our cumulative declared dividends on our common stock since the prior

adjustment.

On December 8, 2025, we delivered notice that we had elected to redeem all of the outstanding junior convertible securities

on December 29, 2025 (the “Redemption Date”), and announced our intention to settle any and all conversion obligations in

cash. Substantially all holders of the junior convertible securities delivered requests to convert their securities prior to the

Redemption Date. On December 15, 2025, we made an irrevocable election to settle our conversion obligations in cash by

reference to the daily volume weighted average price of our common stock during each applicable ten trading day conversion

reference period. These conversions resulted in a settlement value in excess of the associated carrying value (the “conversion

premium”). As of December 31, 2025, the conversion premium of $155.5 million was recorded within Other liabilities, with a

corresponding reduction to Additional paid-in capital on the Consolidated Balance Sheets. In addition, the conversion resulted

in a reduction to Deferred tax liability (net) on the Consolidated Balance Sheets of $38.9 million, with a corresponding increase

to Additional paid-in capital. Our election to settle each applicable conversion premium in cash using a ten-day reference

period was accounted for as a forward sale contract, which resulted in a $9.2 million expense recorded in Other expenses (net)

in our Consolidated Statements of Income, in the fourth quarter of 2025.

On the Redemption Date, we redeemed $1.1 million of junior convertible securities which were not converted, reflecting

the principal amount of the redeemed securities, plus accrued and unpaid interest, up to, but not including, the Redemption

Date.

In January 2026, we settled each of our applicable conversion obligations in cash for an aggregate amount of

$514.6 million which resulted in an incremental expense related to the forward sale contract of $9.3 million. As a result of the

settlement of these securities, we expect to incur a current cash tax liability of approximately $56.0 million in 2026, reflective

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of the recapture of excess interest expense deductions. As of the date of this Annual Report on Form 10-K, no junior

convertible securities are outstanding.

Equity Distribution Program

In the first quarter of 2025, we entered into an equity distribution agreement and forward sale agreements with several

major securities firms under which we may, from time to time, issue and sell shares of our common stock (immediately or on a

forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”). This equity

distribution program superseded and replaced our prior equity distribution program. As of December 31, 2025, no sales had

occurred under the equity distribution program.

Commitments

See Note 6 of our Consolidated Financial Statements.

Other Contingent Commitments

See Notes 3 and 6 of our Consolidated Financial Statements.

Leases

As of December 31, 2025, our lease obligations were $30.8 million through 2026, $53.4 million from 2027 through 2028,

$48.0 million from 2029 through 2030, and $48.5 million thereafter. The portion of these lease obligations attributable to the

controlling interest were $5.8 million through 2026, $6.7 million from 2027 through 2028, $6.6 million from 2029 through

2030, and $11.3 million thereafter. See Note 9 of our Consolidated Financial Statements.

Recent Accounting Developments

See Note 1 of our Consolidated Financial Statements.

Critical Accounting Estimates and Judgments

The preparation of financial statements and related disclosures in conformity with GAAP requires us to make judgments,

assumptions, and estimates that affect the amounts reported in our Consolidated Financial Statements and accompanying notes.

See Note 1 of our Consolidated Financial Statements for a discussion of our significant accounting policies.

The following are our critical accounting estimates and judgments used in the preparation of our Consolidated Financial

Statements, and due to their subjectivity, actual results could differ materially from the amounts reported.

Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in

the principal or most advantageous market in an orderly transaction between market participants at the measurement date.

These standards establish a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical

assets or liabilities and the lowest priority to unobservable inputs.

We make judgments to determine the fair value of certain assets, liabilities, and equity interests when allocating the

purchase price of our new investments, when revaluing our contingent payment obligations, when we issue or purchase

Affiliate equity interests, and when we test our goodwill, indefinite- and definite-lived acquired client relationships, or equity

method investments for impairment.

In determining fair values that reflect our own assumptions concerning unobservable inputs, we typically use valuation

techniques, including probability-weighted discounted cash flow analyses and Monte Carlo simulations, where we make

assumptions about growth rates of assets under management, client attrition, asset- and performance-based fee rates, and

expenses. In these analyses, we also consider historical and current market multiples, tax benefits, credit risk, interest rates, tax

rates, discount rates, volatility, and discounts for lack of marketability. We consider the reasonableness of our assumptions by

comparing our valuation conclusions to observed market transactions and, in certain instances, by consulting with third-party

valuation firms. Changes in the assumptions used could significantly impact fair values.

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Indefinite-Lived Acquired Client Relationships

Indefinite-lived acquired client relationships include investment advisory contracts between our Affiliates and their mutual

funds and other retail-oriented investment products. Because these contracts are with the investment products themselves, and

not with the underlying investors, and the contracts between our Affiliates and the investment products are typically renewed on

an annual basis, industry practice under GAAP is to consider the contract life to be indefinite and, as a result, not amortizable.

We perform indefinite-lived acquired client relationship impairment assessments annually, or more frequently should

circumstances indicate fair value has declined below the related carrying value. For purposes of our assessments, we consider

various qualitative and quantitative factors to determine if it is more-likely-than-not that the fair value of each asset group is

greater than its carrying amount. If we determine that it is likely that the fair value has declined below our related carrying

value, we perform discounted cash flow analyses to determine the fair value of the asset group and record an expense in

Intangible amortization and impairments to reduce the carrying value to its fair value. In these analyses, the most relevant

assumptions are revenue growth rates and discount rates.

In the first quarter of 2025, we completed an impairment assessment of the indefinite-lived acquired client relationships for

certain mutual fund assets and determined that the fair value of the assets had declined below their carrying values.

Accordingly, we recorded an expense in Intangible amortization and impairments of $59.2 million attributable to the controlling

interest ($70.0 million in aggregate) to reduce the carrying value of the assets to fair value. The decline in the fair value was a

result of current and projected declines in assets under management that decreased the forecasted revenue associated with the

assets. The most relevant assumptions used in these analyses were revenue growth rates over the next five years ranging from

(21)% to 0%, long-term revenue growth rates of 0%, and discount rates of 11.0%.

In the fourth quarter of 2025, we completed our annual impairment assessment of our indefinite-lived acquired client

relationships and determined that the fair value of certain mutual fund assets had declined below their carrying values.

Accordingly, we recorded an expense in Intangible amortization and impairments of $37.0 million attributable to the controlling

interest ($58.0 million in aggregate) to reduce the carrying value of the assets to fair value. The decline in the fair value was a

result of current and projected declines in assets under management that decreased the forecasted revenue associated with the

assets. The most relevant assumptions used in these analyses were revenue growth rates over the next five years ranging from

(34)% to 0%, long-term revenue growth rates of 0%, and discount rates of 10.5%.

While we believe all assumptions used in our assessments are reasonable and appropriate, changes in these estimates could

produce different values. We performed a sensitivity analysis over the most relevant assumptions used in these assessments.

Assuming all other assumptions remain constant, a decrease in the revenue growth rates over the next five years of 200 basis

points would result in an additional impairment amount of approximately $80 million, while an increase in the discount rate of

100 basis points would result in an additional impairment amount of approximately $85 million. Further declines in assets

under management resulting from negative investment performance or net client outflows above our estimates could result in

additional future impairments.

For the year ended December 31, 2025, no other impairments were indicated for our indefinite-lived acquired client

relationships.

Equity Method Investments in Affiliates

We periodically perform assessments to determine if the fair value of an investment may have declined below its related

carrying value for our Affiliates accounted for under the equity method for a period that we consider to be other-than-

temporary. We perform these assessments if certain triggering events occur or annually during the fourth quarter. We first

consider whether certain qualitative and quantitative factors (including discount rates) indicate an increased likelihood of a

decline in the fair value of an Affiliate during the reporting period. If such a decline is identified, and it is likely that an

investment’s fair value may have declined below its carrying value, we perform a quantitative assessment to determine if an

impairment exists. Impairments are recorded as an expense in Equity method income (net) to reduce the carrying value of the

Affiliate to its fair value.

When we quantitatively test our equity method investments for impairment, we typically use valuation methods such as

discounted cash flow analyses. In these analyses, our most significant assumptions relate to growth rates of projected assets

under management, client attrition, asset- and performance-based fees, expenses, and discount rates. We consider the

reasonableness of our assumptions by comparing our valuation conclusions to observed market transactions, comparable

company valuations, and, in certain instances, by consulting with third-party valuation firms. Changes in these assumptions

could significantly impact the respective fair value of an Affiliate.

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For the year ended December 31, 2025, the Company completed its annual assessment of its investments in Affiliates

accounted for under the equity method and no impairments were indicated.

Assets Under Management Market Price Risk

Consolidated revenue and equity method revenue, net are derived primarily from asset-based fees that are typically

determined as a percentage of the value of a client’s assets under management. Such values are affected by changes in financial

markets (including declines in the capital markets, fluctuations in foreign currency exchange rates, inflation rates or the yield

curve, and other market factors) and, accordingly, declines in the financial markets may negatively impact Consolidated

revenue and equity method revenue, net.

As of December 31, 2025, we estimate a proportional 1% change in the value of our assets under management would have

resulted in a $17.2 million annualized change in asset-based fees in Consolidated revenue for our consolidated Affiliates and a

$27.0 million annualized change in asset-based fees in equity method revenue, net for our Affiliates accounted for under the

equity method. This proportional increase or decrease excludes assets under management on which asset-based fees are

charged on committed capital.

Interest Rate Risk

We have fixed rates of interest on our senior notes and junior subordinated notes. While a change in market interest rates

would not affect the interest expense incurred on our fixed rate securities, such a change may affect the fair value of these

securities. We estimate that a 1% change in interest rates would have resulted in a $205.9 million net change in the fair value of

our fixed rate securities as of December 31, 2025. We pay a variable rate of interest on any outstanding obligations under our

revolver at specified rates, based either on an applicable term Secured Overnight Financing Rate (“SOFR”) plus a SOFR

adjustment of 0.10% or prime rate, plus a marginal rate determined based on our credit rating. As of December 31, 2025, we

had no outstanding borrowings under the revolver.

Foreign Currency Risk

The functional currency of most of our Affiliates is the U.S. dollar. Certain of our Affiliates have the pound sterling,

Canadian dollar, or the euro as their functional currency, and are, therefore, impacted by movements in pound sterling,

Canadian dollar, and euro to U.S. dollar foreign currency exchange rates. In addition, the valuations of our foreign Affiliates

with a non-U.S. dollar functional currency change based on fluctuations in foreign currency exchange rates, among other

factors. Changes due to fluctuations in foreign currency exchange rates are recorded as a component of stockholders’ equity.

To illustrate the effect of possible changes in foreign currency exchange rates, we estimate a 1% change in the pound

sterling, Canadian dollar, and euro to U.S. dollar exchange rates would have resulted in an $8.4 million, $1.9 million, and $4.8

million change to stockholders’ equity, respectively, primarily based on the December 31, 2025 carrying value of Affiliates

whose functional currency is the pound sterling, Canadian dollar, or the euro. For the year ended December 31, 2025, we

estimate a 1% change in the pound sterling, Canadian dollar, and the euro to U.S. dollar exchange rates would have resulted in

$0.8 million, $0.3 million, and $0.3 million in annual changes to Income before income taxes (controlling interest),

respectively.

Derivative Risk

From time to time, we and our Affiliates seek to offset exposure to changes in interest rates, foreign currency exchange

rates, and markets by entering into derivative financial instruments. There can be no assurance that our or our Affiliates’

derivative financial instruments will meet their overall objective or that we or our Affiliates will be successful in entering into

such instruments in the future.

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As required by Rule 13a-15 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), as of

December 31, 2025, we carried out an evaluation under the supervision and with the participation of our management,

including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our

disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer

concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in

ensuring that (i) information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded,

processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) such information

is accumulated and communicated to our management, including our principal executive officer and principal financial officer,

as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and

procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only

reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its

judgment in evaluating and implementing possible controls and procedures. Our disclosure controls and procedures were

designed to provide reasonable assurance of achieving their stated objectives, and our principal executive officer and principal

financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level. We

review on an ongoing basis and document our disclosure controls and procedures, and our internal control over financial

reporting, and we may from time to time make changes in an effort to enhance their effectiveness and ensure that our systems

evolve with our business. See “Management’s Report on Internal Control over Financial Reporting” in Item 8.

Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has issued an audit report on our internal

control over financial reporting, which is included in Item 8.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange

Act) occurred during the fiscal quarter ended December 31, 2025 that has materially affected, or is reasonably likely to

materially affect, our internal control over financial reporting.