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Related-Party Transactions
6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]  
Related-Party Transactions

NOTE 6. Related-Party Transactions

The Company considers certain funds that it manages, including the Victory Funds, the VictoryShares, collective trust funds that it sponsors (the “Victory Collective Funds”), the NEC Funds and other pooled investment vehicles that it sponsors, to be related parties as a result of its advisory relationship.

The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCS have with the Victory Funds and has invested a portion of its balance sheet cash in the Victory Treasury Money Market Trust and earns interest on the amount invested in this fund.

The Company receives investment management, administrative and compliance fees in accordance with contracts that VCM has with the VictoryShares.

We also receive investment management fees from the Victory Collective Funds, the NEC Funds and other pooled investment vehicles under VCM’s advisory contracts with these funds. In addition, VCTA receives fees for transfer agency services under contracts with the Victory Funds III and sub-transfer agency services under contracts with the Victory Funds for member class shares.

Director fees payable by the Company in cash and contributions made under the Director Deferred Compensation Plan for non-employee members of our Board of Directors are included in general and administrative expense in the unaudited Condensed Consolidated Statements of Operations.

The table below presents balances and transactions involving related parties included in the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations.

Included in cash and cash equivalents is cash held in the Victory Treasury Money Market Trust.
Included in receivables (investment management fees) are amounts due from the Victory Funds, VictoryShares, Victory Collective Funds and other pooled investment vehicles for investment management services.
Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds for fund administration services and compliance services, amounts due from the VictoryShares for fund administration services, amounts due from the Victory Funds III for transfer agent services and amounts due from the Victory Funds for sub-transfer agent services.
Included in prepaid expenses are amounts paid by VCM that will be invoiced to the NEC Funds in subsequent periods.
Included in revenue (investment management) are amounts earned for investment management services provided to the Victory Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled investment vehicles.
Included in revenue (fund administration and distribution fees) are amounts earned for fund administration and compliance services, transfer agent services and sub-transfer agent services.
Realized and unrealized gains and losses and dividend income on investments in the Victory Funds classified as investments in proprietary funds and deferred compensation plan investments and dividend income on
investments in the Victory Treasury Money Market Trust are recorded in interest income and other income (expense) in the unaudited Condensed Consolidated Statements of Operations.
Amounts due to the Victory Funds, VictoryShares and other pooled investment vehicles for waivers of investment management fees and reimbursements of fund operating expenses are included in accounts payable and accrued expenses in the unaudited Condensed Consolidated Balance Sheets and represent consideration payable to customers.

(in thousands)

 

June 30, 2023

 

 

December 31, 2022

 

Related party assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,771

 

 

$

24,575

 

Receivables (investment management fees)

 

 

43,960

 

 

 

44,218

 

Receivables (fund administration and distribution fees)

 

 

15,111

 

 

 

14,379

 

Prepaid expenses

 

 

982

 

 

 

1,097

 

Investments (investments in proprietary funds, fair value)

 

 

506

 

 

 

466

 

Investments (deferred compensation plan investments, fair value)

 

 

29,357

 

 

 

24,852

 

Total

 

$

121,687

 

 

$

109,587

 

 

 

 

 

 

 

Related party liabilities

 

 

 

 

 

 

Accounts payable and accrued expenses (fund reimbursements)

 

$

5,375

 

 

$

5,838

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Related party revenue

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

$

121,910

 

 

$

128,632

 

 

$

241,893

 

 

$

267,469

 

Fund administration and distribution fees

 

 

44,816

 

 

 

47,877

 

 

 

89,300

 

 

 

98,431

 

Total

 

$

166,726

 

 

$

176,509

 

 

$

331,193

 

 

$

365,900

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party expense

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

127

 

 

$

93

 

 

$

249

 

 

$

209

 

 

 

 

 

 

 

 

 

 

 

 

 

Related party other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income and other income (expense)

 

$

1,331

 

 

$

(3,193

)

 

$

2,795

 

 

$

(3,538

)