x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 95-4191764 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $.01 par value | The NASDAQ Stock Market LLC | |
(including attached Preferred Share Purchase Rights) |
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Item 15. | ||
Item 16. |
Item 1. | Business. |
Affiliated Managers | |||||||||
Duff & Phelps Investment Management | Newfleet Asset Management | Kayne Anderson Rudnick Investment Management | Rampart Investment Management | ||||||
Assets Under Management at December 31, 2016 ($ in billions) | $10.2 | $11.6 | $12.7 | $3.2 (1) | |||||
Location | Chicago, IL | Hartford, CT | Los Angeles, CA | Boston, MA | |||||
Core Strategy | Income oriented equities | Multi-sector fixed income | Quality focused equities | Quantitative strategies | |||||
Products | |||||||||
Open-End Funds | ü | ü | ü | ü | |||||
Closed-End Funds | ü | ü | ü | ||||||
Exchange traded funds | ü | ||||||||
Variable Insurance Funds | ü | ü | ü | ||||||
UCITs | ü | ü | |||||||
Separately Managed Accounts | ü | ü | ü | ||||||
Institutional | ü | ü | ü | ü |
Retail Products | |||
Mutual fund assets | |||
Open-end funds | $ | 23.4 | |
Closed-end funds | 6.8 | ||
Exchange traded funds | 0.6 | ||
Total fund assets | 30.8 | ||
Separately managed accounts | 8.5 | ||
Total retail assets | 39.3 | ||
Total institutional assets | 6.1 | ||
Total Assets Under Management | $ | 45.4 |
Fund Type/Name | Inception | Assets | Advisory Fee (1) | ||||
Open-End Funds | ($ in millions) | (%) | |||||
Alternatives | |||||||
Virtus Real Estate Securities Fund | 1995 | $ | 1,086.8 | 0.75-0.65 | |||
Virtus Global Real Estate Securities Fund | 2009 | 179.8 | 0.85-0.75 | ||||
Virtus Multi-Strategy Target Return Fund | 2015 | 131.7 | 1.30-1.25 | ||||
Virtus Global Infrastructure Fund | 2004 | 107.4 | 0.65-0.55 | ||||
Virtus Herzfeld Fund | 2012 | 54.8 | 1.0-0.95 | ||||
Virtus International Real Estate Securities Fund | 2007 | 30.0 | 1.0-0.90 | ||||
Virtus Select MLP and Energy Fund | 2015 | 5.6 | 1.00 | ||||
Virtus Essential Resources Fund | 2015 | 4.8 | 1.10 | ||||
Virtus Alternatives Diversifier Fund (2) | 2005 | — | — | ||||
Asset Allocation | |||||||
Virtus Strategic Allocation Fund | 1975 | 454.1 | 0.55-0.45 | ||||
Virtus Tactical Allocation Fund | 1940 | 137.6 | 0.70-0.60 | ||||
Virtus Multi-Asset Trend Fund | 2011 | 115.6 | 1.00-0.90 | ||||
Virtus DFA 2035 Target Date Retirement Income Fund | 2016 | 1.4 | 0.30 | ||||
Virtus DFA 2020 Target Date Retirement Income Fund | 2016 | 1.3 | 0.30 | ||||
Virtus DFA 2025 Target Date Retirement Income Fund | 2016 | 1.3 | 0.30 | ||||
Virtus DFA 2030 Target Date Retirement Income Fund | 2016 | 1.3 | 0.30 | ||||
Virtus DFA 2060 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Virtus DFA 2040 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Virtus DFA 2045 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Virtus DFA 2015 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Virtus DFA 2055 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Virtus DFA 2050 Target Date Retirement Income Fund | 2016 | 1.2 | 0.30 | ||||
Equity | |||||||
Virtus Equity Trend Fund | 2010 | 749.6 | 1.00-0.95 | ||||
Virtus Small-Cap Sustainable Growth Fund | 2006 | 527.3 | 0.90-0.80 | ||||
Virtus Small-Cap Core Fund | 2002 | 414.7 | 0.75 | ||||
Virtus Strategic Growth Fund | 1995 | 396.7 | 0.70-0.60 | ||||
Virtus Sector Trend Fund | 2003 | 356.2 | 0.45-0.40 | ||||
Virtus Quality Small-Cap Fund | 2006 | 324.1 | 0.70 | ||||
Virtus Contrarian Value Fund | 1997 | 201.5 | 0.75-0.70 | ||||
Virtus Enhanced Core Equity Fund | 1997 | 167.7 | 0.75-0.65 | ||||
Virtus Mid-Cap Growth Fund | 1975 | 82.6 | 0.80-0.70 | ||||
Virtus Wealth Masters Fund | 2012 | 77.3 | 0.85-0.80 | ||||
Virtus Mid-Cap Core Fund | 2009 | 65.1 | 0.80-0.70 | ||||
Virtus Quality Large-Cap Value Fund | 2005 | 63.8 | 0.75-0.65 | ||||
Virtus Low Volatility Equity Fund | 2013 | 2.6 | 0.95-0.85 | ||||
Fixed Income | |||||||
Virtus Multi-Sector Short Term Bond Fund | 1992 | 6,941.4 | 0.55-0.425 | ||||
Virtus Senior Floating Rate Fund | 2008 | 568.9 | 0.60-0.50 | ||||
Virtus Low Duration Income Fund | 1999 | 367.2 | 0.55-0.45 | ||||
Virtus Multi-Sector Intermediate Bond Fund | 1989 | 296.1 | 0.55-0.45 | ||||
Virtus Tax-Exempt Bond Fund | 2001 | 172.3 | 0.45 | ||||
Virtus Credit Opportunities Fund (3) | 2015 | 98.2 | 0.75 | ||||
Virtus High Yield Fund | 1980 | 72.4 | 0.65-0.55 | ||||
Virtus Bond Fund | 1998 | 71.1 | 0.45-0.40 | ||||
Virtus Emerging Markets Debt Fund | 2012 | 31.5 | 0.75-0.70 | ||||
Virtus Strategic Income Fund | 2014 | 29.9 | 0.80-0.75 | ||||
Virtus CA Tax-Exempt Bond Fund | 1983 | 28.8 | 0.45-0.35 |
Fund Type/Name | Inception | Assets | Advisory Fee (1) | ||||
($ in millions) | (%) | ||||||
International/Global | |||||||
Virtus Emerging Markets Opportunities Fund | 1997 | 6,469.4 | 1.00-0.95 | ||||
Virtus Foreign Opportunities Fund | 1990 | 1,250.5 | 0.85-0.75 | ||||
Virtus Global Opportunities Fund | 1960 | 175.0 | 0.85-0.75 | ||||
Virtus International Small-Cap Fund | 2012 | 52.1 | 1.00-0.95 | ||||
Virtus Emerging Markets Equity Income Fund | 2012 | 26.1 | 1.05-1.00 | ||||
Virtus Greater European Opportunities Fund | 2009 | 18.3 | 0.85-0.80 | ||||
Virtus Global Equity Trend Fund | 2011 | 18.2 | 1.00-0.90 | ||||
Virtus Emerging Markets Small-Cap Fund | 2013 | 5.4 | 1.20-1.15 | ||||
Virtus International Wealth Masters Fund | 2014 | 5.2 | 0.90-0.85 | ||||
Virtus International Equity Fund | 2010 | 4.2 | 0.85-0.75 | ||||
Variable Insurance Funds | |||||||
Virtus Capital Growth Series | 1982 | $ | 185.6 | 0.70-0.60 | |||
Virtus International Series | 1990 | 178.0 | 0.75-0.65 | ||||
Virtus Multi-Sector Fixed Income Series | 1982 | 126.1 | 0.50-0.40 | ||||
Virtus Enhanced Core Equity Series | 1998 | 104.6 | 0.70-0.60 | ||||
Virtus Small-Cap Value Series | 2000 | 95.0 | 0.90-0.80 | ||||
Virtus Strategic Allocation Series | 1984 | 93.1 | 0.55-0.45 | ||||
Virtus Real Estate Securities Series | 1995 | 81.4 | 0.75-0.65 | ||||
Virtus Small-Cap Growth Series | 2002 | 63.4 | 0.85-0.80 | ||||
Virtus Equity Trend Series | 2011 | 4.6 | 1.00 | ||||
Global Funds | |||||||
Virtus GF Multi-Sector Short Duration Bond Fund | 2013 | 44.8 | 1.75-0.55 | ||||
Virtus GF US Small Cap Focus Fund | 2014 | 4.1 | 2.15-0.80 | ||||
$ | 23,432.8 |
(1) | Percentage of average daily net assets of each fund. The percentages listed represent the range of management advisory fees paid by the funds, from the highest to the lowest. A range indicates that the fund has breakpoints at which management advisory fees decrease as assets in the funds increase. Subadvisory fees on funds managed by unaffiliated subadvisers are not reflected in the percentages listed. |
(2) | This fund contains investments in other Virtus open-end mutual funds. The related assets invested in other Virtus open-end mutual funds are reflected only in the balances of the respective funds. |
(3) | Other Virtus open-end mutual funds invest in this fund, the assets invested by other Virtus open-end mutual funds are reflected in this fund and are excluded from the assets of those funds. |
Fund Type/Name | Assets | Advisory Fee | ||||||
($ in billions) | % | |||||||
Balanced | ||||||||
DNP Select Income Fund Inc. | $ | 3.7 | 0.60-0.50 | (1) | ||||
Virtus Global & Dividend Income Fund Inc. | 0.5 | 0.70 | (2) | |||||
Virtus Total Return Fund | 0.2 | 0.85 | (2) | |||||
Equity | ||||||||
Duff & Phelps Global Utility Income Fund Inc. | 0.9 | 1.00 | (1)(3) | |||||
Zweig Fund Inc. | 0.3 | 0.85 | (2) | |||||
Alternatives | ||||||||
Duff & Phelps Select Energy MLP Fund | 0.3 | 1.00 | (2) | |||||
Fixed Income | ||||||||
Duff & Phelps Utility and Corporate Bond Trust Inc. | 0.4 | 0.50 | (1) | |||||
Virtus Global Multi-Sector Income Fund | 0.3 | 0.95 | (2) | |||||
DTF Tax-Free Income Inc. | 0.2 | 0.50 | (1) | |||||
Total Closed-End Funds | $ | 6.8 |
(1) | Percentage of average weekly net assets. The percentage listed represents the range of management advisory fees paid by the funds, from the highest to the lowest. A range indicates that the fund has breakpoints at which management advisory fees decrease as assets in the fund increase. |
(2) | Percentage of average daily net assets of each fund. |
(3) | The adviser has contractually agreed to waive a portion of its fee for a period of time, which is not reflected in the percentage listed. |
Fund Name | Assets | Advisory Fee | |||||
($ in millions) | % | ||||||
Virtus Newfleet Multi-Sector Unconstrained Bond ETF | $ | 198.6 | 0.700 | (1) | |||
InfraCap MLP ETF | 171.7 | 0.075 | (1) | ||||
Virtus Newfleet Dynamic Credit ETF | 77.7 | 0.550 | (1) | ||||
Tuttle Tactical Management Core ETF | 57.3 | 0.075 | (1) | ||||
Bioshares Biotech Products ETF | 31.1 | 0.075 | (1) | ||||
Tuttle Tactical Management Multi-Strategy ETF | 20.0 | 0.075 | (1) | ||||
Bioshares Biotech Clinical Trials ETF | 17.5 | 0.075 | (1) | ||||
Reaves Utilities ETF | 13.3 | 0.075 | (1) | ||||
iSectors Post-MPT Growth ETF | 9.6 | 0.125 | (1) | ||||
$ | 596.8 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Investment management fees: | |||||||||||
Funds | $ | 174,157 | $ | 209,994 | $ | 249,355 | |||||
Separately managed accounts | 40,155 | 37,296 | 35,152 | ||||||||
Institutional accounts | 20,918 | 17,575 | 16,156 | ||||||||
Total investment management fees | 235,230 | 264,865 | 300,663 | ||||||||
Administration fees | 26,997 | 33,981 | 39,374 | ||||||||
Transfer agent fees | 11,264 | 14,266 | 16,642 | ||||||||
Total | $ | 273,491 | $ | 313,112 | $ | 356,679 |
Item 1A. | Risk Factors. |
• | The value of assets under management can decline due to price declines in specific securities, market segments or geographic areas where those assets are invested. Funds and portfolios that we manage related to certain geographic markets and industry sectors are particularly vulnerable to political, social and economic events in those markets and sectors. If these markets or industries decline or experience volatility, this could have a negative impact on our assets under management and our revenues. For example, certain non-U.S. markets, particularly emerging markets, are not as developed or as efficient as the U.S. financial markets and, as a result, may be less liquid, less regulated and significantly more volatile than the U.S. financial markets. Liquidity in such markets may be adversely impacted by factors including political or economic events, government policies, expropriation, volume trading limits by foreign investors and social or civil unrest. These factors may negatively impact the market value of an investment or our ability to dispose of it. In addition, an increase in the value of the U.S. dollar relative to non-U.S. currencies could result in a decrease in the U.S. dollar value of assets under management that are denominated in non-U.S. currencies. |
• | The performance of our investment strategies is critical and any real or perceived negative absolute or relative performance could negatively impact the maintenance and growth of assets under management. Net flows related to our investment strategies can be affected by investment performance relative to other competing investment strategies or to established benchmarks. Our investment management strategies are rated, ranked or assessed by independent third-parties, distribution partners, and industry periodicals and services. These assessments often influence the investment decisions of our clients. If the performance or assessment of our investment strategies is seen as underperforming relative to peers, it could result in an increase in the withdrawal of assets by existing clients and the inability to attract additional investments from existing and new clients. In addition, certain of our investment strategies have capacity constraints, as there is a limit to the number of securities available for the strategy to operate effectively. In those instances, we may choose to limit access to new or existing investors. In addition, certain mutual funds employ the use of leverage as part of their investment strategies, which will increase or decrease the Company’s assets under management, and the risk associated with the investment, as the proceeds from the use of leverage are invested in accordance with the funds’ investment strategies. |
• | General domestic and global economic and political conditions can influence assets under management. Changes in interest rates, the availability and cost of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, commodity prices, currency exchange rates and controls and national and international political circumstances (including wars, terrorist acts and security operations) and other conditions may impact the equity and credit markets which may influence our assets under management. Capital and credit markets can experience substantial volatility. Employment rates, continued economic weakness and budgetary challenges in the EuroZone, regional turmoil in the Middle East, concern over growth prospects in China and emerging markets, growing debt loads for certain countries and uncertainty about the consequences of governments eventually withdrawing monetary stimulus all indicate that economic and political conditions remain unpredictable. If the security markets decline or experience volatility, our assets under management and our revenues could be negatively impacted. In addition, diminishing investor confidence in the markets and/or adverse market conditions could result in a decrease in investor risk tolerance. Such a decrease could prompt investors to reduce their rate of investment or to fully withdraw from |
• | Changes in interest rates can have adverse effects on our assets under management. Increases in interest rates from their historically low present levels may adversely affect the net asset values of our assets under management. Furthermore, increases in interest rates may result in reduced prices in equity markets. Conversely, decreases in interest rates could lead to outflows in fixed income assets that we manage as investors seek higher yields. Any of these effects could lower our assets under management and revenues and, if our revenues decline without a commensurate reduction in our expenses, would lead to a reduction in our net income. |
• | the Company will be required to pay its costs relating to the RidgeWorth Acquisition, such as legal, accounting and financial advisory fees, whether or not the RidgeWorth Acquisition is completed; |
• | time and resources committed by the Company’s management to matters relating to the RidgeWorth Acquisition could otherwise have been devoted to pursuing other beneficial opportunities; and |
• | the market price of the Company’s securities could decline to the extent that the current market price reflects a market assumption that the RidgeWorth Acquisition will be completed, or to the extent that the RidgeWorth Acquisition is fundamental to the Company’s business strategy. |
• | the integration of personnel, operations, strategies, technologies and support services; |
• | the disruption of ongoing businesses and distraction of their respective personnel from ongoing business concerns; |
• | the retention of the existing clients and the retention or transition of RidgeWorth vendors; |
• | the retention of key intermediary distribution relationships; |
• | the integration of corporate cultures and maintenance of employee morale; |
• | the retention of key employees; |
• | the creation of uniform standards, controls, procedures, policies and information systems; |
• | the reduction of the costs associated with the combined company’s operations; |
• | the consolidation and rationalization of information technology platforms and administrative infrastructures; and |
• | potential unknown liabilities associated with the RidgeWorth Acquisition. |
• | make it more difficult to satisfy our obligations under the terms of our indebtedness, including the new debt facility; |
• | limit our ability to refinance our indebtedness on terms acceptable to us or at all; |
• | limit our flexibility to plan for and adjust to changing business and market conditions and increase our vulnerability to general adverse economic and industry conditions; |
• | require us to dedicate a substantial portion of our cash flows to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future acquisitions, working capital, business activities, and other general corporate requirements; and |
• | limit our ability to obtain additional financing for working capital, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity, particularly if any ratings assigned to our debt securities by rating organizations were revised downward. |
Item 1B. | Unresolved Staff Comments. |
Item 2. | Properties. |
Item 3. | Legal Proceedings. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Year Ended | Year Ended | ||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
Quarter Ended | High | Low | Dividends Declared | High | Low | Dividends Declared | |||||||||||||||||
First Quarter | $ | 120.09 | $ | 73.33 | $ | 0.45 | $ | 171.00 | $ | 126.94 | $ | 0.45 | |||||||||||
Second Quarter | $ | 83.57 | $ | 66.12 | $ | 0.45 | $ | 147.77 | $ | 113.47 | $ | 0.45 | |||||||||||
Third Quarter | $ | 104.73 | $ | 69.78 | $ | 0.45 | $ | 134.78 | $ | 97.37 | $ | 0.45 | |||||||||||
Fourth Quarter | $ | 128.10 | $ | 92.80 | $ | 0.45 | $ | 141.97 | $ | 94.52 | $ | 0.45 |
Month | Total number of shares repurchased | Average price paid per share (1) | Total number of shares repurchased as part of publicly announced plans or programs | Maximum number of shares that may yet be repurchased under the plans or programs (2) | ||||||||
October 1—31, 2016 | 1,727,746 | $ | 93.50 | 1,727,746 | 200,000 | |||||||
November 1—30, 2016 | — | — | 200,000 | |||||||||
December 1—31, 2016 | — | — | 200,000 | |||||||||
Total | 1,727,746 | 1,727,746 |
(1) | Average price paid per share is calculated on a settlement basis and excludes commissions. |
(2) | The share repurchases above were completed pursuant to a program commenced on October 14, 2010 and most recently expanded on October 27, 2016. This repurchase program is not subject to an expiration date. |
Item 6. | Selected Financial Data. |
($ in thousands, except per share data) | Years Ended December 31, | ||||||||||||||||||
2016 (1) | 2015 (1) | 2014 (1) | 2013 (2) | 2012 (2) | |||||||||||||||
Results of Operations | |||||||||||||||||||
Revenues | $ | 322,554 | $ | 381,977 | $ | 450,598 | $ | 389,215 | $ | 280,086 | |||||||||
Operating expenses | 271,740 | 301,599 | 319,878 | 275,711 | 219,641 | ||||||||||||||
Operating income | 50,814 | 80,378 | 130,720 | 113,504 | 60,445 | ||||||||||||||
Income tax expense | 21,044 | 36,972 | 39,349 | 44,778 | 27,030 | ||||||||||||||
Net income | 48,763 | 30,671 | 96,965 | 77,130 | 37,773 | ||||||||||||||
Net income attributable to common stockholders | 48,502 | 35,106 | 97,700 | 75,190 | 37,608 | ||||||||||||||
Earnings per share—basic | 6.34 | 3.99 | 10.75 | 9.18 | 4.87 | ||||||||||||||
Earnings per share—diluted | 6.20 | 3.92 | 10.51 | 8.92 | 4.66 | ||||||||||||||
Cash dividends declared per share | 1.80 | 1.80 | 1.35 | — | — | ||||||||||||||
As of December 31, | |||||||||||||||||||
2016 (1) | 2015 (1) | 2014 (2) | 2013 (2) | 2012 (2) | |||||||||||||||
Balance Sheet Data | |||||||||||||||||||
Cash and cash equivalents | $ | 64,588 | $ | 87,574 | $ | 202,847 | $ | 271,014 | $ | 63,432 | |||||||||
Investments | 89,371 | 56,738 | 63,448 | 37,258 | 18,433 | ||||||||||||||
Investments of consolidated sponsored investment products | 142,075 | 323,335 | 236,652 | 139,054 | 43,227 | ||||||||||||||
Investments of consolidated investment product | 346,967 | 199,485 | — | — | — | ||||||||||||||
Goodwill and other intangible assets, net | 45,215 | 47,588 | 47,043 | 49,893 | 53,971 | ||||||||||||||
Total assets | 824,388 | 859,729 | 698,773 | 644,954 | 332,749 | ||||||||||||||
Accrued compensation and benefits | 47,885 | 49,617 | 54,815 | 53,140 | 41,252 | ||||||||||||||
Debt | 30,000 | — | — | — | 15,000 | ||||||||||||||
Debt of consolidated investment product | — | 152,597 | — | — | — | ||||||||||||||
Notes payable of consolidated investment product | 328,761 | — | — | — | — | ||||||||||||||
Total liabilities | 465,449 | 276,408 | 112,350 | 109,900 | 85,115 | ||||||||||||||
Redeemable noncontrolling interests | 37,266 | 73,864 | 23,071 | 42,186 | 3,163 | ||||||||||||||
Total equity | 321,673 | 509,457 | 563,352 | 492,868 | 244,471 | ||||||||||||||
As of December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
($ in millions) | |||||||||||||||||||
Assets Under Management | |||||||||||||||||||
Total assets under management | $ | 45,366 | $ | 47,385 | $ | 56,702 | $ | 57,740 | $ | 45,537 |
(1) | Derived from audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. |
(2) | Derived from audited consolidated financial statements not included in this Annual Report on Form 10-K. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | Net income per diluted share was $6.20 in 2016, up $2.28 or 58.2% from $3.92 per diluted share in 2015. |
• | Total sales (inflows) were $10.9 billion in 2016 compared with $12.7 billion in 2015. Net outflows were $4.7 billion in 2016 compared with $6.3 billion in 2015. |
• | Assets under management were $45.4 billion at December 31, 2016 compared to $47.4 billion at December 31, 2015. |
• | Seix Investment Advisors, which manages $27.6 billion (as of December 31, 2016) in fixed income through an investment grade team focused on high-quality securities and a leveraged finance team focused on leveraged loans and high-yield credit strategies. |
• | Ceredex Value Advisors, which manages $10.8 billion (as of December 31, 2016) for institutions, endowments, foundations and high-net-worth investors using a traditional value style across all market cap ranges. |
• | Silvant Capital Management, which manages $1.3 billion (as of December 31, 2016), primarily in the large-cap growth style for institutional clients. |
3-Year: | 3-Year | |||
Benchmark Index | Average Return (1) | Benchmark Index | ||
Fund Type/Name | Assets | Lipper Peer Group | Peer Group Ranking (2) | Return (3) |
Open-End Funds | ($ in millions) | (%) | (%) | |
Alternatives | ||||
Virtus Real Estate Securities Fund | $1,086.8 | FTSE NAREIT Equity REITs Index | 12.96 | 13.38 |
Real Estate Funds | 22 | |||
Virtus Global Real Estate Securities Fund | 179.8 | FTSE EPRA NAREIT Developed Rental Index | 9.28 | 8.49 |
Global Real Estate Funds | 2 | |||
Virtus Global Infrastructure Fund | 107.4 | Global Infrastructure Linked Benchmark (4) | 3.09 | 2.39 |
Global Infrastructure Funds | 46 | |||
Virtus Herzfeld Fund | 54.8 | 60% MSCI AC World Index (net) / 40% Bloomberg Barclays U.S. Aggregate | 6.06 | 3.26 |
Flexible Portfolio Funds | 4 | |||
Virtus International Real Estate Securities Fund | 30.0 | FTSE EPRA/NAREIT Developed Rental ex US Index (net) | 3.76 | 3.48 |
International Real Estate Funds | 3 | |||
Asset Allocation | ||||
Virtus Strategic Allocation Fund | 454.1 | Strategic Allocation Fund Linked Benchmark (5) | 0.31 | 6.27 |
Mixed-Asset Target Allocation Moderate Funds | 96 | |||
Virtus Tactical Allocation Fund | 137.6 | Tactical Allocation Fund Linked Benchmark (6) | 0.39 | 5.92 |
Mixed-Asset Target Allocation Moderate Funds | 96 | |||
Virtus Multi-Asset Trend Fund | 115.6 | Dow Jones Global Moderate Portfolio Index | (2.91) | 3.87 |
Flexible Portfolio Funds | 94 | |||
Equity | ||||
Virtus Equity Trend Fund | 749.6 | S&P 500(R) Index | (3.43) | 8.87 |
Large-Cap Core Funds | 100 | |||
Virtus Small-Cap Sustainable Growth Fund | 527.3 | Russell 2000(R) Growth Index | 10.06 | 5.05 |
Small-Cap Growth Funds | 1 | |||
Virtus Small-Cap Core Fund | 414.7 | Russell 2000(R) Index | 8.05 | 6.74 |
Small-Cap Growth Funds | 4 | |||
Virtus Strategic Growth Fund | 396.7 | Russell 1000(R) Growth Index | 6.24 | 8.55 |
Large-Cap Growth Funds | 46 | |||
Virtus Sector Trend Fund | 356.2 | S&P 500(R) Index | 0.10 | 8.87 |
Large-Cap Core Funds | 99 | |||
Virtus Quality Small-Cap Fund | 324.1 | Russell 2000(R) Value Index | 7.81 | 8.31 |
Small-Cap Growth Funds | 4 | |||
Virtus Contrarian Value Fund | 201.5 | Russell Midcap(R) Value Index | 0.70 | 9.45 |
Multi-Cap Value Funds | 98 | |||
Virtus Enhanced Core Equity Fund | 167.7 | S&P 500(R) Index | 9.21 | 8.87 |
Large-Cap Core Funds | 4 | |||
Virtus Mid-Cap Growth Fund | 82.6 | Russell Midcap(R) Growth Index | 2.74 | 6.23 |
Mid-Cap Growth Funds | 72 | |||
Virtus Wealth Masters Fund | 77.3 | S&P 500(R) Index | 3.97 | 8.87 |
Mid-Cap Core Funds | 90 | |||
Virtus Mid-Cap Core Fund | 65.1 | Russell Midcap(R) Index | 9.91 | 7.92 |
Mid-Cap Growth Funds | 1 |
3-Year: | 3-Year | |||
Benchmark Index | Average Return (1) | Benchmark Index | ||
Fund Type/Name | Assets | Lipper Peer Group | Peer Group Ranking (2) | Return (3) |
($ in millions) | (%) | (%) | ||
Virtus Quality Large-Cap Value Fund | 63.8 | Russell 1000(R) Value Index | 5.49 | 8.59 |
Large-Cap Core Funds | 80 | |||
Virtus Low Volatility Equity Fund | 2.6 | S&P 500(R) Index | 2.85 | 8.87 |
Large-Cap Core Funds | 96 | |||
Fixed Income | ||||
Virtus Multi-Sector Short Term Bond Fund | 6,941.4 | BofA Merrill Lynch 1-3 Year A-BBB Corporate Index | 2.34 | 1.60 |
Short-Intermediate Investment Grade Debt Funds | 7 | |||
Virtus Senior Floating Rate Fund | 568.9 | S&P/LSTA Leveraged Loan Index | 2.97 | 3.58 |
Loan Participation Funds | 42 | |||
Virtus Low Duration Income Fund | 367.2 | Bloomberg Barclays U.S. Intermediate Government/Credit Bond Index | 1.97 | 2.09 |
Short Investment Grade Debt Funds | 3 | |||
Virtus Multi-Sector Intermediate Bond Fund | 296.1 | Bloomberg Barclays U.S. Aggregate Bond Index | 3.46 | 3.03 |
Multi-Sector Income Funds | 30 | |||
Virtus Tax-Exempt Bond Fund | 172.3 | Virtus Tax-Exempt Bond Fund Linked Benchmark (7) | 3.54 | 3.55 |
General & Insured Municipal Debt Funds | 78 | |||
Virtus High Yield Fund | 72.4 | Bloomberg Barclays U.S. High-Yield 2% Issuer Capped Bond Index | 3.94 | 4.67 |
High Yield Funds | 30 | |||
Virtus Bond Fund | 71.1 | Bloomberg Barclays U.S. Aggregate Bond Index | 2.61 | 3.03 |
Core Plus Bond Funds | 64 | |||
Virtus Emerging Markets Debt Fund | 31.5 | JP Morgan EMBI Global Diversified Index | 3.23 | 6.19 |
Emerging Markets Hard Currency Debt Funds | 53 | |||
Virtus CA Tax-Exempt Bond Fund | 28.8 | Bloomberg Barclays California Municipal Bond Index | 4.46 | 4.36 |
California Municipal Debt Funds | 72 | |||
International/Global | ||||
Virtus Emerging Markets Opportunities Fund | 6,469.4 | MSCI Emerging Markets Index (net) | (0.70) | (2.55) |
Emerging Market Funds | 11 | |||
Virtus Foreign Opportunities Fund | 1,250.5 | MSCI EAFE(R) Index (net) | 0.54 | (1.60) |
International Large-Cap Growth | 5 | |||
Virtus Global Opportunities Fund | 175.0 | MSCI AC World Index (net) | 5.07 | 3.13 |
Global Large-Cap Growth | 9 | |||
Virtus International Small-Cap Fund | 52.1 | MSCI AC World Ex U.S. Small Cap Index (net) | 5.16 | 0.76 |
International Small/Mid-Cap Growth | 1 | |||
Virtus Emerging Markets Equity Income Fund | 26.1 | MSCI Emerging Markets Index (net) | (3.27) | (2.55) |
Emerging Markets Funds | 59 | |||
Virtus Greater European Opportunities Fund | 18.3 | MSCI Europe Index (net) | (1.20) | (3.17) |
European Region Funds | 19 | |||
Virtus Global Equity Trend Fund | 18.2 | MSCI AC World Index (net) | (5.14) | 3.13 |
Global Multi-Cap Growth | 99 | |||
Virtus Emerging Markets Small Cap Fund | 5.4 | MSCI Emerging Markets Small Cap Index (net) | (0.86) | (1.27) |
Emerging Markets Funds | 13 |
3-Year: | 3-Year | |||
Benchmark Index | Average Return (1) | Benchmark Index | ||
Fund Type/Name | Assets | Lipper Peer Group | Peer Group Ranking (2) | Return (3) |
($ in millions) | (%) | (%) | ||
Virtus International Equity Fund | 4.2 | MSCI EAFE(R) Index (net) | (2.43) | (1.60) |
International Large-Cap Growth | 68 | |||
Variable Insurance Funds | ||||
Virtus Capital Growth Series | 185.6 | Russell 1000(R) Growth Index | 6.57 | 8.55 |
Multi-Cap Growth Funds | 21 | |||
Virtus International Series | 178.0 | MSCI EAFE(R) Index (net) | (5.41) | (1.60) |
International Large-Cap Growth | 100 | |||
Virtus Multi-Sector Fixed Income Series | 126.1 | Bloomberg Barclays U.S. Aggregate Bond Index | 3.22 | 3.03 |
General Bond Funds | 41 | |||
Virtus Enhanced Core Equity Series | 104.6 | S&P 500(R) Index | 3.00 | 8.87 |
Multi-Cap Core Funds | 85 | |||
Virtus Small-Cap Value Series | 95.0 | Russell 2000(R) Value Index | 8.32 | 8.31 |
Small-Cap Growth Funds | 5 | |||
Virtus Strategic Allocation Series | 93.1 | Strategic Allocation Series Linked Benchmark | 0.85 | 6.27 |
Mixed-Asset Target Allocation Moderate Funds | 97 | |||
Virtus Real Estate Securities Series | 81.4 | FTSE NAREIT Equity REITs Index | 12.91 | 13.38 |
Real Estate Funds | 27 | |||
Virtus Small-Cap Growth Series | 63.4 | Russell 2000(R) Growth Index | 10.20 | 5.05 |
Small-Cap Growth Funds | 2 | |||
Virtus Equity Trend Series | 4.6 | S&P 500(R) Index | (2.81) | 8.87 |
Multi-Cap Core Funds | 100 | |||
All other funds (8) | 336.8 | |||
$23,432.8 |
(1) | Represents average annual total return performance of the largest share class as measured by net assets for which performance data is available. Performance shown does not include the effect of applicable sales charges. Had sales charges been reflected, performance would be lower than shown above. |
(2) | Represents the peer ranking of the fund’s average annual total return according to Lipper. Fund returns are reported net of fees and are of the largest share class as measured by net assets. |
(3) | Represents the average annual total return of the fund compared to the benchmark index. Fund returns are reported net of fees and are of the largest share class as measured by net assets. Benchmark indices are unmanaged, their returns do not reflect any fees, expenses, or sales charges and they are not available for direct investment. |
(4) | The Global Infrastructure Linked Benchmark consists of the FTSE Developed Core Infrastructure 50/50 Index (net). Performance of the Global Infrastructure Linked Benchmark prior to October 1, 2016 consisted of the MSCI World Infrastructure Sector Capped Index. |
(5) | The Strategic Allocation Fund Linked Benchmark consists of 45% Russell 1000(R) Growth Index, 15% MSCI EAFE(R) Index, and 40% Barclays U.S. Aggregate Bond Index. Performance of the Strategic Allocation Fund Linked Benchmark prior to September 7, 2016 consisted of 60% S&P 500(R) Index and 40% Barclays U.S. Aggregate Bond Index. |
(6) | The Tactical Allocation Fund Linked Benchmark consists of 45% Russell 1000(R) Growth Index, 15% MSCI EAFE(R) Index, and 40% Barclays U.S. Aggregate Bond Index. Performance of the Tactical Allocation Fund Linked Benchmark prior to September 7, 2016 consisted of 50% S&P 500(R) Index and 50% Barclays U.S. Aggregate Bond Index. |
(7) | The Virtus Tax-Exempt Bond Linked Benchmark consists of the Bank of America Merrill Lynch 1-22 Year U.S. Municipal Securities Index, a subset of the Bank of America Merrill Lynch U.S. Municipal Securities Index. |
(8) | Represents all funds that do not yet have a 3-year average return based on its inception date. |
As of December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | |||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||
Fund assets | |||||||||||||||||||||||||
Open-end funds (1) | $ | 23,432.8 | $ | 28,882.1 | $ | 37,514.2 | $ | (5,449.3 | ) | (18.9 | )% | $ | (8,632.1 | ) | (23.0 | )% | |||||||||
Closed-end funds | 6,757.4 | 6,222.3 | 7,581.4 | 535.1 | 8.6 | % | (1,359.1 | ) | (17.9 | )% | |||||||||||||||
Exchange traded funds | 596.8 | 340.8 | — | 256.0 | 75.1 | % | 340.8 | 100.0 | % | ||||||||||||||||
Total fund assets | 30,787.0 | 35,445.2 | 45,095.6 | (4,658.2 | ) | (13.1 | )% | (9,650.4 | ) | (21.4 | )% | ||||||||||||||
Separately managed accounts (2) | 8,473.5 | 6,784.4 | 6,884.8 | 1,689.1 | 24.9 | % | (100.4 | ) | (1.5 | )% | |||||||||||||||
Total retail assets | 39,260.5 | 42,229.6 | 51,980.4 | (2,969.1 | ) | (7.0 | )% | (9,750.8 | ) | (18.8 | )% | ||||||||||||||
Total institutional accounts (2) | 6,105.8 | 5,155.7 | 4,722.0 | 950.1 | 18.4 | % | 433.7 | 9.2 | % | ||||||||||||||||
Total Assets Under Management | $ | 45,366.3 | $ | 47,385.3 | $ | 56,702.4 | $ | (2,019.0 | ) | (4.3 | )% | $ | (9,317.1 | ) | (16.4 | )% | |||||||||
Average Assets Under Management | $ | 45,325.2 | $ | 52,310.5 | $ | 59,122.1 | $ | (6,985.3 | ) | (13.4 | )% | $ | (6,811.6 | ) | (11.5 | )% |
(1) | Includes assets under management of open-end mutual funds, UCITS and variable insurance funds. |
(2) | Includes assets under management related to option strategies and structured products. |
($ in millions) | December 31, | ||||||||||
2016 | 2015 | 2014 | |||||||||
Open-End Funds (1) | |||||||||||
Beginning balance | $ | 28,882.1 | $ | 37,514.2 | $ | 37,679.5 | |||||
Inflows | 7,070.1 | 10,046.8 | 12,733.7 | ||||||||
Outflows | (13,117.7 | ) | (17,010.5 | ) | (13,428.1 | ) | |||||
Net flows | (6,047.6 | ) | (6,963.7 | ) | (694.4 | ) | |||||
Market performance | 898.7 | (1,511.5 | ) | 1,297.2 | |||||||
Other (2) | (300.4 | ) | (156.9 | ) | (768.1 | ) | |||||
Ending balance | $ | 23,432.8 | $ | 28,882.1 | $ | 37,514.2 | |||||
Closed-End Funds | |||||||||||
Beginning balance | $ | 6,222.3 | $ | 7,581.4 | $ | 6,499.6 | |||||
Inflows | — | — | 493.8 | ||||||||
Outflows | (103.3 | ) | — | — | |||||||
Net flows | (103.3 | ) | — | 493.8 | |||||||
Market performance | 794.9 | (811.9 | ) | 799.3 | |||||||
Other (2) | (156.5 | ) | (547.2 | ) | (211.3 | ) | |||||
Ending balance | $ | 6,757.4 | $ | 6,222.3 | $ | 7,581.4 | |||||
Exchange Traded Funds | |||||||||||
Beginning balance | $ | 340.8 | $ | — | $ | — | |||||
Inflows | 382.8 | 342.8 | — | ||||||||
Outflows | (124.8 | ) | (49.0 | ) | — | ||||||
Net flows | 258.0 | 293.8 | — | ||||||||
Market performance | 20.3 | (27.9 | ) | — | |||||||
Other (2) | (22.3 | ) | 74.9 | — | |||||||
Ending balance | $ | 596.8 | $ | 340.8 | $ | — | |||||
Money Market Funds | |||||||||||
Beginning balance | $ | — | $ | — | $ | 1,556.6 | |||||
Other (2) | — | — | (1,556.6 | ) | |||||||
Ending balance | $ | — | $ | — | $ | — | |||||
Separately Managed Accounts (3) | |||||||||||
Beginning balance | $ | 6,784.4 | $ | 6,884.8 | $ | 7,433.1 | |||||
Inflows | 1,825.5 | 1,291.9 | 1,333.6 | ||||||||
Outflows | (1,156.9 | ) | (1,428.6 | ) | (2,244.8 | ) | |||||
Net flows | 668.6 | (136.7 | ) | (911.2 | ) | ||||||
Market performance | 1,023.5 | 70.7 | 355.5 | ||||||||
Other (2) | (3.0 | ) | (34.4 | ) | 7.4 | ||||||
Ending balance | $ | 8,473.5 | $ | 6,784.4 | $ | 6,884.8 | |||||
Institutional Accounts (3)(4) | |||||||||||
Beginning balance | $ | 5,155.7 | $ | 4,722.0 | $ | 4,570.8 | |||||
Inflows | 1,661.6 | 1,008.3 | 650.5 | ||||||||
Outflows | (1,109.6 | ) | (526.1 | ) | (743.0 | ) | |||||
Net flows | 552.0 | 482.2 | (92.5 | ) | |||||||
Market performance | 432.7 | 46.2 | 389.2 | ||||||||
Other (2) | (34.6 | ) | (94.7 | ) | (145.5 | ) | |||||
Ending balance | $ | 6,105.8 | $ | 5,155.7 | $ | 4,722.0 | |||||
Total | |||||||||||
Beginning balance | $ | 47,385.3 | $ | 56,702.4 | $ | 57,739.6 | |||||
Inflows | 10,940.0 | 12,689.8 | 15,211.6 | ||||||||
Outflows | (15,612.3 | ) | (19,014.2 | ) | (16,415.9 | ) | |||||
Net flows | (4,672.3 | ) | (6,324.4 | ) | (1,204.3 | ) | |||||
Market performance | 3,170.1 | (2,234.4 | ) | 2,841.2 | |||||||
Other (2) | (516.8 | ) | (758.3 | ) | (2,674.1 | ) | |||||
Ending balance | $ | 45,366.3 | $ | 47,385.3 | $ | 56,702.4 |
(1) | Includes assets under management of open-end mutual funds, variable insurance funds and UCITS. |
(2) | Represents open-end and closed-end mutual fund distributions, net of reinvestments, net flows of cash management strategies, net flows from non-sales related activities such as asset acquisitions/(dispositions), marketable securities investments/(withdrawals) and the impact on assets from the use of leverage |
(3) | Includes assets under management related to option strategies. |
(4) | Includes assets under management related to structured products. Effective April 1, 2016, the issuance/(repayment) of structured product notes are reported as inflows/(outflows). Prior to April 1, 2016, all changes in structured product assets under management were reported as a component of Other. |
December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | |||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||
Asset Class | |||||||||||||||||||||||||
Equity | $ | 25,822.3 | $ | 28,314.9 | $ | 34,180.7 | $ | (2,492.6 | ) | (8.8 | )% | $ | (5,865.8 | ) | (17.2 | )% | |||||||||
Fixed income | 15,523.6 | 15,115.6 | 16,681.6 | 408.0 | 2.7 | % | (1,566.0 | ) | (9.4 | )% | |||||||||||||||
Alternatives (1) | 3,548.3 | 3,468.7 | 5,372.4 | 79.6 | 2.3 | % | (1,903.7 | ) | (35.4 | )% | |||||||||||||||
Other (2) | 472.1 | 486.1 | 467.7 | (14.0 | ) | (2.9 | )% | 18.4 | 3.9 | % | |||||||||||||||
Total | $ | 45,366.3 | $ | 47,385.3 | $ | 56,702.4 | $ | (2,019.0 | ) | (4.3 | )% | $ | (9,317.1 | ) | (16.4 | )% |
(1) | Consists of long/short equity, real estate securities, master-limited partnerships and other. |
(2) | Consists of option strategies. |
December 31, | ||||||||||||||||||||
Average Fee Earned (expressed in basis points) | Average Assets Under Management ($ in millions) | |||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||
Products | ||||||||||||||||||||
Open-End Funds (1) | 49.3 | 48.2 | 51.3 | $ | 25,551.7 | $ | 33,290.1 | $ | 39,620.3 | |||||||||||
Closed-End Funds | 65.8 | 66.7 | 65.6 | 6,583.6 | 6,946.3 | 7,112.9 | ||||||||||||||
Exchange Traded Funds | 31.4 | 23.6 | — | 406.3 | 179.3 | — | ||||||||||||||
Money Market Funds | — | — | — | — | — | 1,060.1 | ||||||||||||||
Separately Managed Accounts (2) | 54.3 | 54.1 | 51.9 | 7,273.9 | 6,863.8 | 6,774.2 | ||||||||||||||
Institutional Accounts (2) | 38.0 | 34.9 | 35.5 | 5,509.7 | 5,031.0 | 4,554.6 | ||||||||||||||
All Products | 50.9 | 50.1 | 50.9 | $ | 45,325.2 | $ | 52,310.5 | $ | 59,122.1 |
(1) | Includes assets under management of open-end mutual funds, UCITS and variable insurance funds. |
(2) | Includes assets under management related to options strategies. |
Years Ended December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||
Investment management fees | $ | 235,230 | $ | 264,865 | $ | 300,663 | $ | (29,635 | ) | (11.2 | )% | $ | (35,798 | ) | (11.9 | )% | |||||||||
Other revenue | 87,324 | 117,112 | 149,935 | (29,788 | ) | (25.4 | )% | (32,823 | ) | (21.9 | )% | ||||||||||||||
Total revenues | 322,554 | 381,977 | 450,598 | (59,423 | ) | (15.6 | )% | (68,621 | ) | (15.2 | )% | ||||||||||||||
Total operating expenses | 271,740 | 301,599 | 319,878 | (29,859 | ) | (9.9 | )% | (18,279 | ) | (5.7 | )% | ||||||||||||||
Operating income | 50,814 | 80,378 | 130,720 | (29,564 | ) | (36.8 | )% | (50,342 | ) | (38.5 | )% | ||||||||||||||
Other income (expense), net | 8,819 | (26,650 | ) | (2,843 | ) | 35,469 | (133.1 | )% | (23,807 | ) | 837.4 | % | |||||||||||||
Interest income, net | 10,174 | 13,915 | 8,437 | (3,741 | ) | (26.9 | )% | 5,478 | 64.9 | % | |||||||||||||||
Income before income taxes | 69,807 | 67,643 | 136,314 | 2,164 | 3.2 | % | (68,671 | ) | (50.4 | )% | |||||||||||||||
Income tax expense | 21,044 | 36,972 | 39,349 | (15,928 | ) | (43.1 | )% | (2,377 | ) | (6.0 | )% | ||||||||||||||
Net income | 48,763 | 30,671 | 96,965 | 18,092 | 59.0 | % | (66,294 | ) | (68.4 | )% | |||||||||||||||
Noncontrolling interests | (261 | ) | 4,435 | 735 | (4,696 | ) | (105.9 | )% | 3,700 | 503.4 | % | ||||||||||||||
Net income attributable to common stockholders | $ | 48,502 | $ | 35,106 | $ | 97,700 | $ | 13,396 | 38.2 | % | $ | (62,594 | ) | (64.1 | )% | ||||||||||
Earnings per share - diluted | $ | 6.20 | $ | 3.92 | $ | 10.51 | $ | 2.28 | 58.2 | % | $ | (6.59 | ) | (62.7 | )% |
Years Ended December 31, | Change | ||||||||||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | 2016 vs 2015 | % | 2015 vs 2014 | % | ||||||||||||||||||
Investment management fees | |||||||||||||||||||||||||
Funds | $ | 174,157 | $ | 209,994 | $ | 249,348 | $ | (35,837 | ) | (17.1 | )% | $ | (39,354 | ) | (15.8 | )% | |||||||||
Separately managed accounts | 40,155 | 37,296 | 35,153 | 2,859 | 7.7 | % | 2,143 | 6.1 | % | ||||||||||||||||
Institutional accounts | 20,918 | 17,575 | 16,162 | 3,343 | 19.0 | % | 1,413 | 8.7 | % | ||||||||||||||||
Total investment management fees | 235,230 | 264,865 | 300,663 | (29,635 | ) | (11.2 | )% | (35,798 | ) | (11.9 | )% | ||||||||||||||
Distribution and service fees | 48,250 | 67,066 | 91,950 | (18,816 | ) | (28.1 | )% | (24,884 | ) | (27.1 | )% | ||||||||||||||
Administration and transfer agent fees | 38,261 | 48,247 | 56,016 | (9,986 | ) | (20.7 | )% | (7,769 | ) | (13.9 | )% | ||||||||||||||
Other income and fees | 813 | 1,799 | 1,969 | (986 | ) | (54.8 | )% | (170 | ) | (8.6 | )% | ||||||||||||||
Total revenues | $ | 322,554 | $ | 381,977 | $ | 450,598 | $ | (59,423 | ) | (15.6 | )% | $ | (68,621 | ) | (15.2 | )% |
Years Ended December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs 2015 | % | 2015 vs 2014 | % | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||
Employment expenses | $ | 135,641 | $ | 137,095 | $ | 139,809 | $ | (1,454 | ) | (1.1 | )% | $ | (2,714 | ) | (1.9 | )% | |||||||||
Distribution and other asset-based expenses | 69,049 | 89,731 | 123,665 | (20,682 | ) | (23.0 | )% | (33,934 | ) | (27.4 | )% | ||||||||||||||
Other operating expenses | 57,227 | 68,035 | 49,569 | (10,808 | ) | (15.9 | )% | 18,466 | 37.3 | % | |||||||||||||||
Restructuring and severance | 4,270 | — | 294 | 4,270 | 100.0 | % | (294 | ) | (100.0 | )% | |||||||||||||||
Depreciation and amortization expense | 5,553 | 6,738 | 6,541 | (1,185 | ) | (17.6 | )% | 197 | 3.0 | % | |||||||||||||||
Total operating expenses | $ | 271,740 | $ | 301,599 | $ | 319,878 | $ | (29,859 | ) | (9.9 | )% | $ | (18,279 | ) | (5.7 | )% |
Years Ended December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs 2015 | % | 2015 vs. 2014 | % | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||||
Realized and unrealized gain (loss) on investments, net | $ | 4,982 | $ | (862 | ) | $ | 914 | $ | 5,844 | 678.0 | % | $ | (1,776 | ) | (194.3 | )% | |||||||||
Realized and unrealized gain (loss) on investments of consolidated sponsored investment products, net | 3,818 | (23,181 | ) | (4,648 | ) | 26,999 | 116.5 | % | (18,533 | ) | (398.7 | )% | |||||||||||||
Realized and unrealized loss of consolidated investment product, net | (1,070 | ) | (3,505 | ) | — | 2,435 | 69.5 | % | (3,505 | ) | (100.0 | )% | |||||||||||||
Other income, net | 1,089 | 898 | 891 | 191 | 21.3 | % | 7 | 0.8 | % | ||||||||||||||||
Total Other Income (Expense), net | $ | 8,819 | $ | (26,650 | ) | $ | (2,843 | ) | $ | 35,469 | (133.1 | )% | $ | (23,807 | ) | 837.4 | % |
Years Ended December 31, | Change | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||
Interest Income (Expense) | |||||||||||||||||||||||||
Interest expense | $ | (679 | ) | $ | (523 | ) | $ | (537 | ) | $ | (156 | ) | (29.8 | )% | $ | 14 | 2.6 | % | |||||||
Interest and dividend income | 1,743 | 1,261 | $ | 1,706 | 482 | 38.2 | % | (445 | ) | (26.1 | )% | ||||||||||||||
Interest and dividend income of investments of consolidated sponsored investment products | 7,509 | 11,504 | $ | 7,268 | (3,995 | ) | (34.7 | )% | 4,236 | 58.3 | % | ||||||||||||||
Interest income of consolidated investment product | 12,893 | 2,157 | $ | — | 10,736 | 497.7 | % | 2,157 | 100.0 | % | |||||||||||||||
Interest expense of consolidated investment product | (11,292 | ) | (484 | ) | — | (10,808 | ) | (2,233.1 | )% | (484 | ) | (100.0 | )% | ||||||||||||
Total Interest Income, net | $ | 10,174 | $ | 13,915 | $ | 8,437 | $ | (3,741 | ) | (26.9 | )% | $ | 5,478 | 64.9 | % |
December 31, | Change | ||||||||||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | ||||||||||||||||||
Balance Sheet Data | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 64,588 | $ | 87,574 | $ | 202,847 | $ | (22,986 | ) | (26.2 | )% | $ | (115,273 | ) | (56.8 | )% | |||||||||
Investments | 89,371 | 56,738 | 63,448 | 32,633 | 57.5 | % | (6,710 | ) | (10.6 | )% | |||||||||||||||
Deferred taxes, net | 47,535 | 54,143 | 60,162 | (6,608 | ) | (12.2 | )% | (6,019 | ) | (10.0 | )% | ||||||||||||||
Dividends payable | 3,479 | 4,233 | 4,270 | (754 | ) | (17.8 | )% | (37 | ) | (0.9 | )% | ||||||||||||||
Total equity | 321,673 | 509,457 | 563,352 | (187,784 | ) | (36.9 | )% | (53,895 | ) | (9.6 | )% |
Years Ended December 31, | Change | ||||||||||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | 2016 vs. 2015 | % | 2015 vs. 2014 | % | ||||||||||||||||||
Cash Flow Data | |||||||||||||||||||||||||
Provided by (used in) | |||||||||||||||||||||||||
Operating activities | $ | 30,522 | $ | (209,430 | ) | $ | (58,871 | ) | $ | 239,952 | 114.6 | % | $ | (150,559 | ) | (255.7 | )% | ||||||||
Investing activities | 3,079 | (6,438 | ) | (8,181 | ) | 9,517 | 147.8 | % | 1,743 | 21.3 | % | ||||||||||||||
Financing activities | (48,298 | ) | 109,948 | (1,189 | ) | (158,246 | ) | (143.9 | )% | 111,137 | 9,347.1 | % |
Payments Due | |||||||||||||||||||
($ in millions) | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | ||||||||||||||
Lease obligations | $ | 18.1 | $ | 5.0 | $ | 9.9 | $ | 2.7 | $ | 0.5 | |||||||||
Credit Facility, including commitment fee (1) | 35.0 | 1.1 | 2.1 | 31.8 | — | ||||||||||||||
Notes payable of consolidated investment product, including interest (2) | 444.4 | 11.1 | 22.1 | 22.1 | 389.1 | ||||||||||||||
Minimum payments on service contracts (3) | 8.8 | 5.5 | 3.3 | — | — | ||||||||||||||
Total | $ | 506.3 | $ | 22.7 | $ | 37.4 | $ | 56.6 | $ | 389.6 |
(1) | At December 31, 2016, we had $30.0 million outstanding under our Credit Facility which has a variable interest rate. Amounts outstanding under the Credit Facility bear interest at an annual rate equal to, at our option, either LIBOR for interest periods of one, two, three or six months or an alternate base rate, plus, in each case, an applicable margin, that ranges from 0.75% to 2.25%. We are also required to pay an annual commitment fee that ranges from 0.30% to 0.45% on undrawn amounts. Payments due are estimated based on the commitment fee rate of 0.30% in effect on December 31, 2016. |
(2) | At December 31, 2016, Notes payable of $328.8 million were outstanding related to our CLO. The CLO has note obligations that bear interest at variable rates based on LIBOR plus a pre-defined spread ranging from 1.0% to 8.75%. The principal amounts outstanding of the note obligations issued by the CLO mature in April 2028. The investors in the CLOs have no recourse to our general assets for the debt issued by the CLOs. Therefore, this debt is not our obligation. |
(3) | Service contracts include contractual amounts that will be due to purchase goods and services to be used in our operations and may be canceled at earlier times than those indicated under certain conditions that may include termination fees. |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
December 31, 2016 | |||||||
$ in thousands | Fair Value | 10% Change | |||||
Marketable Securities - Available for Sale (a) | $ | 3,415 | $ | 342 | |||
Marketable Securities - Trading (b) | 71,492 | 7,149 | |||||
Our net interests in Consolidated Sponsored Investment Products (c) | 108,604 | 10,860 | |||||
Our net interest in Consolidated Investment Product (c) | 25,668 | 2,567 | |||||
Total Investments subject to Market Risk | $ | 209,179 | $ | 20,918 |
(a) | Any gains or losses arising from changes in the fair value of available-for-sale investments are recognized in accumulated other comprehensive income, net of tax, until the investment is sold or otherwise disposed of, or if the investment is determined to be other-than-temporarily impaired, at which time the cumulative gain or loss previously reported in equity is included in income. We evaluate the carrying value of investments for impairment on a quarterly basis. In our impairment analysis, we take into consideration numerous criteria, including the duration and extent of any decline in fair value and our intent and ability to hold the security for a period of time sufficient for a recovery in value. If the decline in value is determined to be other-than-temporary, the carrying value of the security is generally written down to fair value through the Consolidated Statement of Operations. If such a 10% decrease in fair value were to occur, it would not result in an other-than-temporary impairment charge that would be material to our pre-tax earnings. |
(b) | If such a 10% increase or decrease in fair values were to occur, the change of these trading investments would result in a corresponding increase or decrease in our pre-tax earnings. |
(c) | These represent our direct investments in investment products that are consolidated. Upon consolidation, these direct investments are eliminated, and the assets and liabilities of the consolidated investment product and consolidated sponsored investment products are consolidated in the Consolidated Balance Sheet, together with a noncontrolling interest balance representing the portion of the consolidated investment product or consolidated sponsored investment products owned by third parties. If a 10% increase or decrease in the fair values of our direct investments in the consolidated investment product and consolidated sponsored investment products were to occur, it would result in a corresponding increase or decrease in our pre-tax earnings. |
Item 8. | Financial Statements and Supplementary Data. |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
Item 9B. | Other Information. |
Item 10. | Directors, Executive Officers and Corporate Governance. |
Item 11. | Executive Compensation. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) (1) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | ||||||
Equity compensation plans approved by security holders (2) | 439,981 | $ | 17.77 | 749,178 | |||||
Equity compensation plans not approved by security holders | — | — | — | ||||||
Total | 439,981 | $ | 17.77 | 749,178 |
(1) | The weighted-average exercise price set forth in this column is calculated excluding outstanding restricted stock unit awards (“RSUs”) since recipients of such awards are not required to pay an exercise price to receive the shares subject to these awards. |
(2) | Represents 137,157 shares of common stock issuable upon the exercise of stock options and 302,824 shares of our common stock issuable upon the vesting of RSUs outstanding under the Company’s Omnibus Incentive and Equity Plan (the “Omnibus Plan”). Of the 2,400,000 maximum number of shares of our common stock authorized for issuance under the Omnibus Plan, 87,616 shares of common stock have been issued on a cumulative basis in the form of direct grants to directors. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accounting Fees and Services. |
Item 15. | Exhibits, Financial Statement Schedules. |
(a)(1) | Financial Statements: The following Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements of Virtus are included in this Annual Report: | |
Report of Independent Registered Public Accounting Firm | ||
Consolidated Balance Sheets as of December 31, 2016 and 2015 | ||
Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014 | ||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014 | ||
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2016, 2015 and 2014 | ||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014 | ||
Notes to Consolidated Financial Statements | ||
(a)(2) | Financial Statement Schedules: |
(a)(3) | Exhibits: |
Exhibit Number | Exhibit Description | |
(2) | Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession | |
2.1 | Separation Agreement, Plan of Reorganization and Distribution by and between The Phoenix Companies, Inc. and the Registrant, dated as of December 18, 2008 (incorporated by reference to Exhibit 2.1 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). | |
2.2 | Agreement and Plan of Merger dated as of December 16, 2016 among the Registrant, 100 Pearl Street 2, LLC, Lightyear Fund III, AIV-2, L.P., and RidgeWorth Holdings LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed December 22, 2016). | |
(3) | Articles of Incorporation and Bylaws | |
3.1 | Amended and Restated Certificate of Incorporation of the Registrant, dated December 18, 2008 (incorporated by reference to Exhibit 3.1 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). | |
3.2 | Amended and Restated Bylaws of the Registrant, as adopted on January 28, 2010 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed February 2, 2010). | |
3.3 | Certificate of Designations of Series A Non-Voting Convertible Preferred Stock and Series B Voting Convertible Preferred Stock of the Registrant, dated October 31, 2008 (incorporated by reference to Exhibit 4.2 of the Registrant’s Amendment No. 2 to Form 10, filed November 14, 2008). | |
3.4 | Certificate of Amendment of the Certificate of Designations of Series A Non-Voting Convertible Preferred Stock and Series B Voting Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q, filed August 13, 2009). | |
3.5 | Certificate of Designations of Series C Junior Participating Preferred Stock of the Registrant, dated December 29, 2008 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed January 2, 2009). | |
3.6 | Certificate of Designations of 7.25% Series D Mandatory Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed February 1, 2017). | |
(4) | Instruments Defining the Rights of Security Holders including Indentures | |
4.1 | Specimen 7.25% Series D Mandatory Convertible Preferred Stock share certificate (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K, filed on February 1, 2017) | |
(10) | Material Contracts | |
10.1 | Transition Services Agreement by and between The Phoenix Companies, Inc. and the Registrant, dated as of December 18, 2008 (incorporated by reference to Exhibit 10.1 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). | |
10.2 | Tax Separation Agreement by and between The Phoenix Companies, Inc. and the Registrant, dated December 18, 2008 (incorporated by reference to Exhibit 10.2 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). | |
10.3 | Amendment to Tax Separation Agreement, dated April 8, 2009, by and between The Phoenix Companies, Inc. and the Registrant, dated as of December 18, 2008 (incorporated by reference to Exhibit 10.15 of the Registrant’s Annual Report on Form 10-K, filed April 10, 2009). | |
10.4 | Employee Matters Agreement by and between The Phoenix Companies, Inc. and the Registrant, dated December 18, 2008 (incorporated by reference to Exhibit 10.3 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). |
*10.5 | Change in Control Agreement between George R. Aylward and the Registrant, effective as of December 31, 2008 (incorporated by reference to Exhibit 10.4 of the Registrant’s Amendment No. 4 to Form 10, filed December 19, 2008). | |
*10.6 | Amended and Restated Virtus Investment Partners, Inc. Omnibus Incentive and Equity Plan, effective as of January 1, 2014 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K, filed May 26, 2016). | |
*10.7 | Virtus Investment Partners, Inc. Non-Qualified Excess Investment Plan, effective as of November 1, 2008 (incorporated by reference to Exhibit 10.6 of the Registrant’s Amendment No. 2 to Form 10, filed November 14, 2008). | |
*10.8 | First Amendment to the Virtus Investment Partners, Inc. Non-Qualified Excess Investment Plan, effective as of February 1, 2010 (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q, filed May 4, 2010). | |
*10.9 | Virtus Investment Partners, Inc. Amended and Restated Executive Severance Allowance Plan, effective as of February 2, 2009 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed February 4, 2009). | |
*10.10 | Form of Non-Qualified Stock Option Agreement under the Virtus Investment Partners, Inc. Omnibus Incentive and Equity Plan (incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q, filed May 13, 2009). | |
*10.11 | Form of Restricted Stock Units Agreement under the Virtus Investment Partners, Inc. Omnibus Incentive and Equity Plan (incorporated by reference to Exhibit 10.5 of the Registrant’s Quarterly Report on Form 10-Q, filed May 13, 2009). | |
*10.12 | Form of Performance Share Units Agreement under the Virtus Investment Partners, Inc. Omnibus Incentive and Equity Plan (incorporated by reference to Exhibit 10.30 of the Registrant’s Quarterly Report on Form 10-Q, filed August 5, 2011). | |
10.13 | Credit Agreement, dated as of September 30, 2016 among the Registrant, as Borrower, the Lenders Party Thereto, PNC Bank, National Association, as Syndication Agent, and The Bank of New York Mellon, as Administrative Agent, as Swingline Lender and as Issuing Bank. | |
10.14 | Guarantee Agreement among the Registrant, Each Of The Subsidiary Guarantors Party Thereto and The Bank of New York Mellon, as Administrative Agent, dated as of September 30, 2016 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 10-K, filed October 5, 2016). | |
*10.15 | Form of Indemnity Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q, filed November 4, 2009). | |
*10.16 | Offer Letter from the Registrant to Mark S. Flynn dated December 9, 2010 (incorporated by reference to Exhibit 10.31 of the Registrant’s Annual Report on Form 10-K, filed March 1, 2012). | |
10.17 | Stock Purchase Agreement, dated October 27, 2016, between Bank of Montreal Holding Inc. and Virtus Investment Partners, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 27, 2016). | |
10.18 | Commitment Letter, dated as of December 16, 2016, among Barclays Bank PLC, Morgan Stanley Senior Funding, Inc. and Virtus Investment Partners, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 22, 2016). |
(21) | Subsidiaries of the Registrant | |
21.1 | Virtus Investment Partners, Inc., Subsidiaries List. |
(23) | Consents of Experts and Counsel | |
23.1 | Consent of Independent Registered Public Accounting Firm. | |
31.1 | Certifications of Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certifications of Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certifications of Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | The following information formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, (ii) Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014, (v) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014 and (iv) Notes to Consolidated Financial Statements. |
* | Management contract, compensatory plan or arrangement. |
Item 16. | Form 10-K Summary. |
Virtus Investment Partners, Inc. | ||
By: | /S/ MICHAEL A. ANGERTHAL | |
Michael A. Angerthal | ||
Executive Vice President Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
/S/ MARK C. TREANOR | /S/ GEORGE R. AYLWARD | |
Mark C. Treanor Director and Non-Executive Chairman | George R. Aylward President, Chief Executive Officer and Director (Principal Executive Officer) | |
/S/ JAMES R. BAIO | /S/ SUSAN S. FLEMING | |
James R. Baio Director | Susan S. Fleming Director | |
/S/ TIMOTHY A. HOLT | /S/ SHEILA HOODA | |
Timothy A. Holt Director | Sheila Hooda Director | |
/S/ MELODY L. JONES | /S/ STEPHEN T. ZARRILLI | |
Melody L. Jones Director | Stephen T. Zarrilli Director | |
/S/ MICHAEL A. ANGERTHAL | ||
Michael A. Angerthal Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||
Page | ||
Report of Independent Registered Public Accounting Firm | ||
Audited Consolidated Financial Statements | ||
December 31, 2016 | December 31, 2015 | |||||||
Assets: | ||||||||
Cash and cash equivalents | $ | 64,588 | $ | 87,574 | ||||
Investments | 89,371 | 56,738 | ||||||
Accounts receivable, net | 35,879 | 38,757 | ||||||
Assets of consolidated sponsored investment products | ||||||||
Cash of consolidated sponsored investment products | 3,650 | 1,513 | ||||||
Cash pledged or on deposit of consolidated sponsored investment products | 984 | 10,353 | ||||||
Investments of consolidated sponsored investment products | 142,075 | 323,335 | ||||||
Other assets of consolidated sponsored investment products | 3,270 | 8,549 | ||||||
Assets of consolidated investment product | ||||||||
Cash equivalents of consolidated investment product | 14,449 | 8,297 | ||||||
Investments of consolidated investment product | 346,967 | 199,485 | ||||||
Other assets of consolidated investment product | 5,888 | 1,467 | ||||||
Furniture, equipment, and leasehold improvements, net | 7,728 | 9,116 | ||||||
Intangible assets, net | 38,427 | 40,887 | ||||||
Goodwill | 6,788 | 6,701 | ||||||
Deferred taxes, net | 47,535 | 54,143 | ||||||
Other assets | 16,789 | 12,814 | ||||||
Total assets | $ | 824,388 | $ | 859,729 | ||||
Liabilities and Equity | ||||||||
Liabilities: | ||||||||
Accrued compensation and benefits | $ | 47,885 | $ | 49,617 | ||||
Accounts payable and accrued liabilities | 25,176 | 23,036 | ||||||
Dividends payable | 3,479 | 4,233 | ||||||
Debt | 30,000 | — | ||||||
Other liabilities | 13,505 | 13,051 | ||||||
Liabilities of consolidated sponsored investment products | 4,109 | 15,387 | ||||||
Liabilities of consolidated investment product | ||||||||
Debt of consolidated investment product | — | 152,597 | ||||||
Notes payable of consolidated investment product | 328,761 | — | ||||||
Securities purchased payable and other liabilities of consolidated investment product | 12,534 | 18,487 | ||||||
Total liabilities | 465,449 | 276,408 | ||||||
Commitments and Contingencies (Note 10) | ||||||||
Redeemable noncontrolling interests | 37,266 | 73,864 | ||||||
Equity: | ||||||||
Equity attributable to stockholders: | ||||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 9,119,058 shares issued and 5,889,013 shares outstanding at December 31, 2016 and 9,613,088 shares issued and 8,398,944 shares outstanding at December 31, 2015 | 91 | 96 | ||||||
Additional paid-in capital | 1,090,331 | 1,140,875 | ||||||
Accumulated deficit | (424,279 | ) | (472,614 | ) | ||||
Accumulated other comprehensive loss | (224 | ) | (1,034 | ) | ||||
Treasury stock, at cost, 3,230,045 and 1,214,144 shares at December 31, 2016 and December 31, 2015, respectively | (344,246 | ) | (157,699 | ) | ||||
Total equity attributable to stockholders | 321,673 | 509,624 | ||||||
Noncontrolling interests | — | (167 | ) | |||||
Total equity | 321,673 | 509,457 | ||||||
Total liabilities and equity | $ | 824,388 | $ | 859,729 |
Years Ended December 31, | |||||||||||
($ in thousands, except per share data) | 2016 | 2015 | 2014 | ||||||||
Revenues | |||||||||||
Investment management fees | $ | 235,230 | $ | 264,865 | $ | 300,663 | |||||
Distribution and service fees | 48,250 | 67,066 | 91,950 | ||||||||
Administration and transfer agent fees | 38,261 | 48,247 | 56,016 | ||||||||
Other income and fees | 813 | 1,799 | 1,969 | ||||||||
Total revenues | 322,554 | 381,977 | 450,598 | ||||||||
Operating Expenses | |||||||||||
Employment expenses | 135,641 | 137,095 | 139,809 | ||||||||
Distribution and other asset-based expenses | 69,049 | 89,731 | 123,665 | ||||||||
Other operating expenses | 50,274 | 63,901 | 46,531 | ||||||||
Other operating expenses of consolidated sponsored investment products | 3,009 | 4,134 | 3,038 | ||||||||
Other operating expenses of consolidated investment product | 3,944 | — | — | ||||||||
Restructuring and severance | 4,270 | — | 294 | ||||||||
Depreciation and other amortization | 3,092 | 3,443 | 2,763 | ||||||||
Amortization expense | 2,461 | 3,295 | 3,778 | ||||||||
Total operating expenses | 271,740 | 301,599 | 319,878 | ||||||||
Operating Income | 50,814 | 80,378 | 130,720 | ||||||||
Other Income (Expense) | |||||||||||
Realized and unrealized gain (loss) on investments, net | 4,982 | (862 | ) | 914 | |||||||
Realized and unrealized gain (loss) on investments of consolidated sponsored investment products, net | 3,818 | (23,181 | ) | (4,648 | ) | ||||||
Realized and unrealized loss of consolidated investment product, net | (1,070 | ) | (3,505 | ) | — | ||||||
Other income, net | 1,089 | 898 | 891 | ||||||||
Total other income (expense), net | 8,819 | (26,650 | ) | (2,843 | ) | ||||||
Interest Income (Expense) | |||||||||||
Interest expense | (679 | ) | (523 | ) | (537 | ) | |||||
Interest and dividend income | 1,743 | 1,261 | 1,706 | ||||||||
Interest and dividend income of investments of consolidated sponsored investment products | 7,509 | 11,504 | 7,268 | ||||||||
Interest income of consolidated investment product | 12,893 | 2,157 | — | ||||||||
Interest expense of consolidated investment product | (11,292 | ) | (484 | ) | — | ||||||
Total interest income, net | 10,174 | 13,915 | 8,437 | ||||||||
Income Before Income Taxes | 69,807 | 67,643 | 136,314 | ||||||||
Income tax expense | 21,044 | 36,972 | 39,349 | ||||||||
Net Income | 48,763 | 30,671 | 96,965 | ||||||||
Noncontrolling interests | (261 | ) | 4,435 | 735 | |||||||
Net Income Attributable to Common Stockholders | $ | 48,502 | $ | 35,106 | $ | 97,700 | |||||
Earnings per Share-Basic | $ | 6.34 | $ | 3.99 | $ | 10.75 | |||||
Earnings per Share-Diluted | $ | 6.20 | $ | 3.92 | $ | 10.51 | |||||
Cash Dividends Declared per Share | $ | 1.80 | $ | 1.80 | $ | 1.35 | |||||
Weighted Average Shares Outstanding-Basic (in thousands) | 7,648 | 8,797 | 9,091 | ||||||||
Weighted Average Shares Outstanding-Diluted (in thousands) | 7,822 | 8,960 | 9,292 |
Years Ended December 31, | |||||||||||
($ in thousands) | 2016 | 2015 | 2014 | ||||||||
Net Income | $ | 48,763 | $ | 30,671 | $ | 96,965 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustment, net of tax of ($348), $266 and $132 for the years ended December 31, 2016, 2015 and 2014 | 569 | (434 | ) | (216 | ) | ||||||
Unrealized (loss) gain on available-for-sale securities, net of tax of ($32), $71, and ($76) for the years ended December 31, 2016, 2015 and 2014, respectively | 241 | (358 | ) | 124 | |||||||
Other comprehensive (loss) income | 810 | (792 | ) | (92 | ) | ||||||
Comprehensive income | 49,573 | 29,879 | 96,873 | ||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (261 | ) | 4,435 | 735 | |||||||
Comprehensive income attributable to common stockholders | $ | 49,312 | $ | 34,314 | $ | 97,608 |
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total Attributed To Shareholders | Non- controlling Interest | Total Equity | Redeemable Non- controlling Interest | |||||||||||||||||||||||||||||||||
($ in thousands) | Shares | Par Value | Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balances at December 31, 2013 | 9,105,521 | $ | 95 | $ | 1,135,644 | $ | (605,221 | ) | $ | (150 | ) | 350,000 | $ | (37,438 | ) | $ | 492,930 | $ | (62 | ) | $ | 492,868 | $ | 42,186 | |||||||||||||||||
Net income (loss) | — | — | — | 97,700 | — | — | — | 97,700 | (128 | ) | 97,572 | (607 | ) | ||||||||||||||||||||||||||||
Net unrealized gain on securities available-for-sale | — | — | — | — | 124 | — | — | 124 | — | 124 | — | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (216 | ) | — | — | (216 | ) | — | (216 | ) | — | |||||||||||||||||||||||||||
Activity of noncontrolling interests, net | — | — | — | — | — | — | — | — | — | — | (18,508 | ) | |||||||||||||||||||||||||||||
Cash dividends declared ($1.35 per common share) | — | — | (12,451 | ) | — | — | — | — | (12,451 | ) | — | (12,451 | ) | — | |||||||||||||||||||||||||||
Repurchase of common shares | (225,441 | ) | — | — | — | — | 225,441 | (40,261 | ) | (40,261 | ) | — | (40,261 | ) | — | ||||||||||||||||||||||||||
Issuance of common stock related to employee stock transactions | 95,753 | 1 | 1,416 | — | — | — | — | 1,417 | — | 1,417 | — | ||||||||||||||||||||||||||||||
Taxes paid on stock-based compensation | — | — | (9,512 | ) | — | — | — | — | (9,512 | ) | — | (9,512 | ) | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | 9,006 | — | — | — | — | 9,006 | — | 9,006 | — | ||||||||||||||||||||||||||||||
Excess tax benefits from stock-based compensation | — | — | 24,805 | — | — | — | — | 24,805 | — | 24,805 | — | ||||||||||||||||||||||||||||||
Balances at December 31, 2014 | 8,975,833 | 96 | 1,148,908 | (507,521 | ) | (242 | ) | 575,441 | (77,699 | ) | 563,542 | (190 | ) | 563,352 | 23,071 | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | 35,106 | — | — | — | 35,106 | (176 | ) | 34,930 | (4,259 | ) | ||||||||||||||||||||||||||||
Net unrealized gain on securities available-for-sale | — | — | — | — | (358 | ) | — | — | (358 | ) | — | (358 | ) | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (434 | ) | — | — | (434 | ) | — | (434 | ) | — | |||||||||||||||||||||||||||
Activity of noncontrolling interests, net | — | — | — | (199 | ) | — | — | — | (199 | ) | 199 | — | 55,052 | ||||||||||||||||||||||||||||
Cash dividends declared ($1.80 per common share) | — | — | (16,009 | ) | — | — | — | — | (16,009 | ) | — | (16,009 | ) | — | |||||||||||||||||||||||||||
Repurchase of common shares | (638,703 | ) | — | — | — | — | 638,703 | (80,000 | ) | (80,000 | ) | — | (80,000 | ) | — | ||||||||||||||||||||||||||
Issuance of common shares related to employee stock transactions | 61,814 | — | 842 | — | — | — | — | 842 | — | 842 | — | ||||||||||||||||||||||||||||||
Taxes paid on stock-based compensation | — | — | (5,080 | ) | — | — | — | — | (5,080 | ) | — | (5,080 | ) | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | 11,116 | — | — | — | — | 11,116 | — | 11,116 | — | ||||||||||||||||||||||||||||||
Excess tax benefits from stock-based compensation | — | — | 1,098 | — | — | — | — | 1,098 | — | 1,098 | — | ||||||||||||||||||||||||||||||
Balances at December 31, 2015 | 8,398,944 | 96 | 1,140,875 | (472,614 | ) | (1,034 | ) | 1,214,144 | (157,699 | ) | 509,624 | (167 | ) | 509,457 | 73,864 | ||||||||||||||||||||||||||
Net income | — | — | — | 48,502 | — | — | — | 48,502 | — | 48,502 | 261 | ||||||||||||||||||||||||||||||
Net unrealized gain on securities available-for-sale | — | — | — | — | 241 | — | — | 241 | — | 241 | |||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 569 | — | — | 569 | — | 569 | — | ||||||||||||||||||||||||||||||
Activity of noncontrolling interests, net | — | — | — | (167 | ) | — | — | — | (167 | ) | 167 | — | (36,859 | ) | |||||||||||||||||||||||||||
Cash dividends declared ($1.80 per common share) | — | — | (13,015 | ) | — | — | — | — | (13,015 | ) | — | (13,015 | ) | — | |||||||||||||||||||||||||||
Repurchase of common shares | (2,572,417 | ) | (6 | ) | (47,204 | ) | — | — | 2,015,901 | (186,547 | ) | (233,757 | ) | — | (233,757 | ) | — | ||||||||||||||||||||||||
Issuance of common shares related to employee stock transactions | 62,486 | 1 | 1,054 | — | — | — | — | 1,055 | — | 1,055 | — | ||||||||||||||||||||||||||||||
Taxes paid on stock-based compensation | — | — | (1,530 | ) | — | — | — | — | (1,530 | ) | — | (1,530 | ) | — | |||||||||||||||||||||||||||
Stock-based compensation | — | — | 11,449 | — | — | — | — | 11,449 | — | 11,449 | — | ||||||||||||||||||||||||||||||
Tax deficiencies from stock-based compensation | — | — | (1,298 | ) | — | — | — | — | (1,298 | ) | — | (1,298 | ) | — | |||||||||||||||||||||||||||
Balances at December 31, 2016 | 5,889,013 | $ | 91 | $ | 1,090,331 | $ | (424,279 | ) | $ | (224 | ) | 3,230,045 | $ | (344,246 | ) | $ | 321,673 | $ | — | $ | 321,673 | $ | 37,266 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | 48,763 | $ | 30,671 | $ | 96,965 | |||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||
Depreciation expense, intangible asset and other amortization | 5,796 | 6,967 | 6,759 | ||||||||
Stock-based compensation | 11,948 | 11,863 | 9,778 | ||||||||
Excess tax benefit from stock-based compensation | (401 | ) | (1,586 | ) | (24,805 | ) | |||||
Amortization of deferred commissions | 2,413 | 7,924 | 17,907 | ||||||||
Payments of deferred commissions | (1,887 | ) | (3,322 | ) | (13,796 | ) | |||||
Equity in earnings of equity method investments | (1,075 | ) | (879 | ) | (488 | ) | |||||
Realized gain on sale of equity method investment | (2,883 | ) | — | — | |||||||
Realized and unrealized (gains) losses on trading securities, net | (2,099 | ) | 1,158 | (914 | ) | ||||||
Sales (purchases) of trading securities, net | 16,828 | 8,962 | 26,742 | ||||||||
Loss on disposal of fixed assets | 185 | — | — | ||||||||
Deferred taxes, net | 6,399 | 6,356 | 4,394 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net and other assets | (1,695 | ) | 10,620 | (4,157 | ) | ||||||
Accrued compensation and benefits, accounts payable, accrued liabilities and other liabilities | 50 | (14,795 | ) | 17,754 | |||||||
Operating activities of consolidated sponsored investment products: | |||||||||||
Realized and unrealized (gains) losses on investments of consolidated sponsored investment products, net | (4,718 | ) | 26,532 | 4,671 | |||||||
Purchases of investments by consolidated sponsored investment products | (187,489 | ) | (453,247 | ) | (382,015 | ) | |||||
Sales of investments by consolidated sponsored investment products | 274,991 | 394,552 | 210,021 | ||||||||
Net proceeds (purchases) of short term investments by consolidated sponsored investment products | 6,139 | (54,495 | ) | (23,856 | ) | ||||||
(Purchases) sales of securities sold short by consolidated sponsored investment products, net | (4,520 | ) | (1,747 | ) | 8,071 | ||||||
Change in cash pledged or on deposit of consolidated sponsored investment products | 9,604 | (2,604 | ) | (10,785 | ) | ||||||
Change in other assets of consolidated sponsored investment products | (777 | ) | (2,002 | ) | (1,468 | ) | |||||
Change in liabilities of consolidated sponsored investment products | 325 | 2,107 | 351 | ||||||||
Operating activities of consolidated investment product: | |||||||||||
Amortization of discount on notes payable of consolidated investment product | 3,719 | — | — | ||||||||
Realized and unrealized losses of consolidated investment product, net | 1,070 | 3,505 | — | ||||||||
Purchases of investments by consolidated investment product | (276,727 | ) | (199,892 | ) | — | ||||||
Sales of investments by consolidated investment product | 125,502 | 13,864 | — | ||||||||
Change in other assets of consolidated investment product | (714 | ) | (426 | ) | — | ||||||
Change in liabilities of consolidated investment product | 1,775 | 484 | — | ||||||||
Net cash provided by (used in) operating activities | 30,522 | (209,430 | ) | (58,871 | ) | ||||||
Cash Flows from Investing Activities: | |||||||||||
Capital expenditures | (2,023 | ) | (4,683 | ) | (2,432 | ) | |||||
Proceeds from sale of equity method investment | 8,621 | — | — | ||||||||
Decrease in cash and cash equivalents due to deconsolidation of sponsored investment products, net | (903 | ) | — | (436 | ) | ||||||
Equity method investment contributions | (2,471 | ) | (1,617 | ) | (5,000 | ) | |||||
Cash acquired in business combination | — | 89 | — | ||||||||
Purchases of available-for-sale securities | (145 | ) | (227 | ) | (313 | ) | |||||
Net cash provided by (used) in investing activities | 3,079 | (6,438 | ) | (8,181 | ) | ||||||
Cash Flows from Financing Activities: | |||||||||||
Borrowings of proceeds from short sales by consolidated sponsored investment products | — | 1,473 | 2,555 | ||||||||
Payments on borrowings by consolidated sponsored investment products | (3,557 | ) | (350 | ) | — | ||||||
(Repayment) Borrowings of debt of consolidated investment product | (152,597 | ) | 152,597 | — |
Proceeds from issuance of notes payable by consolidated investment product | 316,280 | — | — | ||||||||
Borrowings on credit facility | 30,000 | — | — | ||||||||
Repurchase of common shares | (233,757 | ) | (80,000 | ) | (40,261 | ) | |||||
Dividends paid | (13,774 | ) | (16,047 | ) | (8,182 | ) | |||||
Proceeds from exercise of stock options | 491 | 116 | 753 | ||||||||
Taxes paid related to net share settlement of restricted stock units | (1,530 | ) | (5,080 | ) | (9,512 | ) | |||||
Excess tax benefits from stock-based compensation | 401 | 1,586 | 24,805 | ||||||||
Payment of deferred financing costs | (1,159 | ) | (47 | ) | — | ||||||
Contributions of noncontrolling interests, net | 10,904 | 55,700 | 28,653 | ||||||||
Net cash (used in) provided by financing activities | (48,298 | ) | 109,948 | (1,189 | ) | ||||||
Net decrease in cash and cash equivalents | (14,697 | ) | (105,920 | ) | (68,241 | ) | |||||
Cash and cash equivalents, beginning of year | 97,384 | 203,304 | 271,545 | ||||||||
Cash and Cash Equivalents, end of year | $ | 82,687 | $ | 97,384 | $ | 203,304 | |||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Interest paid | $ | 420 | $ | 266 | $ | 266 | |||||
Income taxes paid, net | $ | 16,715 | $ | 31,850 | $ | 23,274 | |||||
Supplemental Disclosure of Non-Cash Activities | |||||||||||
Activity related to rabbi trust | $ | (499 | ) | $ | (247 | ) | $ | (843 | ) | ||
Change in accrual for capital expenditures | $ | 134 | $ | (692 | ) | $ | (311 | ) | |||
Dividends payable | $ | 2,650 | $ | 4,233 | $ | 4,270 | |||||
Decrease to noncontrolling interest due to consolidation and (deconsolidation) of sponsored investment products, net | $ | (47,763 | ) | $ | (648 | ) | $ | (47,165 | ) |
December 31, | |||||||
2016 | 2015 | ||||||
($ in thousands) | |||||||
Definite-lived intangible assets, net: | |||||||
Investment contracts | $ | 158,747 | $ | 158,747 | |||
Accumulated amortization | (155,136 | ) | (152,676 | ) | |||
Definite-lived intangible assets, net | 3,611 | 6,071 | |||||
Indefinite-lived intangible assets | 34,816 | 34,816 | |||||
Total intangible assets, net | $ | 38,427 | $ | 40,887 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Intangible assets, net | |||||||||||
Balance, beginning of period | $ | 40,887 | $ | 41,783 | $ | 44,633 | |||||
Acquisition | — | 2,400 | 1,075 | ||||||||
Amortization expense | (2,460 | ) | (3,296 | ) | (3,925 | ) | |||||
Balance, end of period | $ | 38,427 | $ | 40,887 | $ | 41,783 | |||||
Goodwill | |||||||||||
Balance, beginning of period | $ | 6,701 | $ | 5,260 | $ | 5,260 | |||||
Acquisition | — | 1,441 | — | ||||||||
Acquisition related adjustments | 87 | — | — | ||||||||
Balance, end of period | $ | 6,788 | $ | 6,701 | $ | 5,260 |
December 31, | |||||||
2016 | 2015 | ||||||
($ in thousands) | |||||||
Marketable securities | $ | 74,907 | $ | 41,496 | |||
Equity method investments | 7,731 | 9,007 | |||||
Nonqualified retirement plan assets | 5,808 | 5,310 | |||||
Other investments | 925 | 925 | |||||
Total investments | $ | 89,371 | $ | 56,738 |
December 31, 2016 | |||||||||||||||
Cost | Unrealized Loss | Unrealized Gain | Fair Value | ||||||||||||
($ in thousands) | |||||||||||||||
Trading: | |||||||||||||||
Sponsored funds | $ | 61,784 | $ | (1,942 | ) | $ | 177 | $ | 60,019 | ||||||
Equity securities | 10,578 | — | 895 | 11,473 | |||||||||||
Available-for-sale: | |||||||||||||||
Sponsored closed-end funds | 3,500 | (265 | ) | 180 | 3,415 | ||||||||||
Total marketable securities | $ | 75,862 | $ | (2,207 | ) | $ | 1,252 | $ | 74,907 |
December 31, 2015 | |||||||||||||||
Cost | Unrealized Loss | Unrealized Gain | Fair Value | ||||||||||||
($ in thousands) | |||||||||||||||
Trading: | |||||||||||||||
Sponsored funds | $ | 31,167 | $ | (2,134 | ) | $ | 298 | $ | 29,331 | ||||||
Equity securities | 9,434 | (386 | ) | 120 | 9,168 | ||||||||||
Available-for-sale: | |||||||||||||||
Sponsored closed-end funds | 3,355 | (365 | ) | 7 | 2,997 | ||||||||||
Total marketable securities | $ | 43,956 | $ | (2,885 | ) | $ | 425 | $ | 41,496 |
December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | 48,620 | $ | — | $ | — | $ | 48,620 | |||||||
Marketable securities trading: | |||||||||||||||
Sponsored funds | 60,019 | — | — | 60,019 | |||||||||||
Equity securities | 11,473 | — | — | 11,473 | |||||||||||
Marketable securities available-for-sale: | |||||||||||||||
Sponsored closed-end funds | 3,415 | — | — | 3,415 | |||||||||||
Other investments | |||||||||||||||
Nonqualified retirement plan assets | 5,808 | — | — | 5,808 | |||||||||||
Total assets measured at fair value | $ | 129,335 | $ | — | $ | — | $ | 129,335 |
December 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | 54,772 | $ | — | $ | — | $ | 54,772 | |||||||
Marketable securities trading: | |||||||||||||||
Sponsored funds | 29,331 | — | — | 29,331 | |||||||||||
Equity securities | 9,168 | — | — | 9,168 | |||||||||||
Marketable securities available-for-sale: | |||||||||||||||
Sponsored closed-end funds | 2,997 | — | — | 2,997 | |||||||||||
Other investments | |||||||||||||||
Nonqualified retirement plan assets | 5,310 | — | — | 5,310 | |||||||||||
Total assets measured at fair value | $ | 101,578 | $ | — | $ | — | $ | 101,578 |
December 31, | |||||||
2016 | 2015 | ||||||
($ in thousands) | |||||||
Furniture and office equipment | $ | 5,933 | $ | 5,840 | |||
Computer equipment and software | 7,330 | 6,600 | |||||
Leasehold improvements | 11,334 | 11,071 | |||||
24,597 | 23,511 | ||||||
Accumulated depreciation and amortization | (16,869 | ) | (14,395 | ) | |||
Furniture, equipment and leasehold improvements, net | $ | 7,728 | $ | 9,116 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Current | |||||||||||
Federal | $ | 12,790 | $ | 28,077 | $ | 31,787 | |||||
State | 1,855 | 2,539 | 3,168 | ||||||||
Total current tax expense | 14,645 | 30,616 | 34,955 | ||||||||
Deferred | |||||||||||
Federal | 5,489 | 4,339 | 3,200 | ||||||||
State | 910 | 2,017 | 1,194 | ||||||||
Total deferred tax expense | 6,399 | 6,356 | 4,394 | ||||||||
Total expense for income taxes | $ | 21,044 | $ | 36,972 | $ | 39,349 |
Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | ||||||||||||||||||
($ in thousands) | ||||||||||||||||||||
Tax at statutory rate | $ | 24,432 | 35 | % | $ | 23,675 | 35 | % | $ | 47,922 | 35 | % | ||||||||
State taxes, net of federal benefit | 2,010 | 3 | 2,717 | 4 | 4,357 | 3 | ||||||||||||||
Uncertain tax positions | — | — | — | — | (30,961 | ) | (22 | ) | ||||||||||||
IRS audit resolution | — | — | — | — | 15,505 | 11 | ||||||||||||||
Effect of net income attributable to noncontrolling interests | (91 | ) | — | 1,492 | 2 | — | — | |||||||||||||
Change in valuation allowance | (5,125 | ) | (7 | ) | 7,812 | 12 | 2,165 | 2 | ||||||||||||
Other, net | (182 | ) | (1 | ) | 1,276 | 2 | 361 | — | ||||||||||||
Income tax expense | $ | 21,044 | 30 | % | $ | 36,972 | 55 | % | $ | 39,349 | 29 | % |
December 31, | |||||||
2016 | 2015 | ||||||
($ in thousands) | |||||||
Deferred tax assets: | |||||||
Intangible assets | $ | 19,348 | $ | 27,728 | |||
Net operating losses | 20,272 | 20,591 | |||||
Compensation accruals | 8,854 | 7,804 | |||||
Capitalized transaction costs | 10,022 | 8,704 | |||||
Unrealized loss | 5,291 | 12,157 | |||||
Other | 1,394 | 118 | |||||
Gross deferred tax assets | 65,181 | 77,102 | |||||
Valuation allowance | (5,731 | ) | (10,855 | ) | |||
Gross deferred tax assets after valuation allowance | 59,450 | 66,247 | |||||
Deferred tax liabilities: | |||||||
Intangible assets | (11,915 | ) | (12,104 | ) | |||
Gross deferred tax liabilities | (11,915 | ) | (12,104 | ) | |||
Deferred tax assets, net | $ | 47,535 | $ | 54,143 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Balance, beginning of year | $ | — | $ | — | $ | 32,602 | |||||
Decrease related to tax positions taken in prior years | — | — | (32,602 | ) | |||||||
Increase related to positions taken in the current year | — | — | — | ||||||||
Balance, end of year | $ | — | $ | — | $ | — |
Unrealized Gains and (Losses) on Securities Available-for- Sale | Foreign Currency Translation Adjustments | ||||||
($ in thousands) | |||||||
Balance December 31, 2015 | $ | (465 | ) | $ | (569 | ) | |
Unrealized net gain on available-for-sale securities, net of tax of ($32) | 241 | — | |||||
Foreign currency translation adjustments, net of tax of ($348) | — | 569 | |||||
Amounts reclassified from accumulated other comprehensive loss | — | — | |||||
Net current-period other comprehensive income | 241 | 569 | |||||
Balance December 31, 2016 | $ | (224 | ) | $ | — |
Unrealized Gains and (Losses) on Securities Available-for- Sale | Foreign Currency Translation Adjustments | ||||||
($ in thousands) | |||||||
Balance December 31, 2014 | $ | (107 | ) | $ | (135 | ) | |
Unrealized net loss on available-for-sale securities, net of tax of $71 | (358 | ) | — | ||||
Foreign currency translation adjustments, net of tax of $266 | — | (434 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss | — | — | |||||
Net current-period other comprehensive (loss) | (358 | ) | (434 | ) | |||
Balance December 31, 2015 | $ | (465 | ) | $ | (569 | ) |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Stock-based compensation expense | $ | 11,948 | $ | 11,863 | $ | 9,778 |
Number of shares | Weighted Average Grant Date Fair Value | |||||
Outstanding at December 31, 2015 | 191,617 | $ | 156.66 | |||
Granted | 178,333 | $ | 80.33 | |||
Forfeited | (11,502 | ) | $ | 109.64 | ||
Settled | (55,624 | ) | $ | 167.23 | ||
Outstanding at December 31, 2016 | 302,824 | $ | 111.56 |
Number of shares | Weighted Average Exercise Price | |||||
Outstanding at December 31, 2015 | 156,636 | $ | 18.78 | |||
Granted | — | $ | — | |||
Exercised | (19,479 | ) | $ | 25.89 | ||
Forfeited | — | $ | — | |||
Outstanding at December 31, 2016 | 137,157 | $ | 17.77 | |||
Vested and exercisable at December 31, 2016 | 137,157 | $ | 17.77 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands, except per share amounts) | |||||||||||
Net Income | $ | 48,763 | $ | 30,671 | $ | 96,965 | |||||
Noncontrolling interests | (261 | ) | 4,435 | 735 | |||||||
Net Income Attributable to Common Stockholders | $ | 48,502 | $ | 35,106 | $ | 97,700 | |||||
Shares: | |||||||||||
Basic: Weighted-average number of shares outstanding | 7,648 | 8,797 | 9,091 | ||||||||
Plus: Incremental shares from assumed conversion of dilutive instruments | 174 | 163 | 201 | ||||||||
Diluted: Weighted-average number of shares outstanding | 7,822 | 8,960 | 9,292 | ||||||||
Earnings per share—basic | $ | 6.34 | $ | 3.99 | $ | 10.75 | |||||
Earnings per share—diluted | $ | 6.20 | $ | 3.92 | $ | 10.51 |
Years Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
($ in thousands) | |||||||||||
Virtus Emerging Markets Opportunities Fund | |||||||||||
Investment management, administration and transfer agent fees | $ | 49,085 | $ | 62,329 | $ | 50,435 | |||||
Percent of total revenues | 15 | % | 16 | % | 11 | % | |||||
Virtus Multi-Sector Short Term Bond Fund | |||||||||||
Investment management, administration and transfer agent fees | $ | 43,579 | $ | 49,174 | $ | 55,401 | |||||
Percent of total revenues | 14 | % | 13 | % | 12 | % |
As of December 31, | |||||||||||||||
2016 | 2015 | ||||||||||||||
($ in thousands) | VOE's | VIE | VOE's | VIE | |||||||||||
Total cash | $ | 1,859 | $ | 2,775 | $ | 11,408 | $ | 458 | |||||||
Total investments | 99,247 | 42,828 | 291,247 | 32,088 | |||||||||||
All other assets | 2,211 | 1,059 | 8,281 | 268 | |||||||||||
Total liabilities | (2,310 | ) | (1,799 | ) | (14,948 | ) | (439 | ) | |||||||
Redeemable noncontrolling interest | (12,505 | ) | (24,761 | ) | (61,236 | ) | (12,628 | ) | |||||||
The Company’s net interests in consolidated sponsored investment products | $ | 88,502 | $ | 20,102 | $ | 234,752 | $ | 19,747 |
As of December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Debt securities | $ | — | $ | 101,510 | $ | 87 | $ | 101,597 | |||||||
Equity securities | 40,270 | 208 | — | 40,478 | |||||||||||
Derivatives | 4 | — | — | 4 | |||||||||||
Total assets measured at fair value | $ | 40,274 | $ | 101,718 | $ | 87 | $ | 142,079 | |||||||
Liabilities | |||||||||||||||
Derivatives | $ | 3 | $ | 235 | $ | 62 | $ | 300 | |||||||
Short sales | 649 | — | — | 649 | |||||||||||
Total liabilities measured at fair value | $ | 652 | $ | 235 | $ | 62 | $ | 949 |
As of December 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Debt securities | $ | — | $ | 151,156 | $ | 1,397 | $ | 152,553 | |||||||
Equity securities | 162,986 | 7,796 | — | 170,782 | |||||||||||
Derivatives | 33 | 738 | — | 771 | |||||||||||
Total assets measured at fair value | $ | 163,019 | $ | 159,690 | $ | 1,397 | $ | 324,106 | |||||||
Liabilities | |||||||||||||||
Derivatives | $ | 128 | $ | 844 | $ | — | $ | 972 | |||||||
Short sales | 5,334 | 75 | — | 5,409 | |||||||||||
Total liabilities measured at fair value | $ | 5,462 | $ | 919 | $ | — | $ | 6,381 |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Level 3 Debt Securities (a) | |||||||
Balance at beginning of period | $ | 1,397 | $ | 1,065 | |||
Purchases | 174 | 913 | |||||
Sales | (1,472 | ) | (370 | ) | |||
Paydowns | (5 | ) | (10 | ) | |||
Change in unrealized loss, net | 348 | (113 | ) | ||||
Change in realized loss, net | (355 | ) | (141 | ) | |||
Transfers from Level 2 | (62 | ) | 151 | ||||
Transfers to Level 2 | — | (98 | ) | ||||
Balance at end of period | $ | 25 | $ | 1,397 |
(a) | None of the securities were internally fair valued at December 31, 2016 or December 31, 2015. |
As of December 31, | |||||||
2016 | 2015 | ||||||
($ in thousands) | |||||||
Total cash equivalents | $ | 14,449 | $ | 8,297 | |||
Total investments | 346,967 | 199,485 | |||||
Other assets | 5,888 | 1,467 | |||||
Debt | — | (152,597 | ) | ||||
Notes payable | (328,761 | ) | — | ||||
Securities purchased payable and other liabilities | (12,534 | ) | (18,487 | ) | |||
The Company’s net interests in the consolidated investment product | $ | 26,009 | $ | 38,165 |
As of | |||
Beneficial Interests | December 31, 2016 | ||
($ in thousands) | |||
Subordinated notes | $ | 25,668 | |
Accrued investment management fees | 341 | ||
Total Beneficial Interests | $ | 26,009 |
Year Ended December 31, 2016 | |||
($ in thousands) | |||
Income: | |||
Realized and unrealized loss, net | $ | (1,070 | ) |
Interest Income | 12,893 | ||
Total Revenue | $ | 11,823 | |
Expenses: | |||
Other operating expenses | 3,944 | ||
Interest expense | 11,292 | ||
Total Expense | $ | 15,236 | |
Net Loss attributable to consolidated investment product | $ | (3,413 | ) |
Economic Interests | Year Ended December 31, 2016 | ||
($ in thousands) | |||
Distributions received and unrealized losses on the subordinated notes held by the Company | (4,398 | ) | |
Investment management fees | 985 | ||
Total Economic Interests | $ | (3,413 | ) |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | 14,449 | $ | — | $ | — | $ | 14,449 | |||||||
Bank loans | — | 346,967 | — | 346,967 | |||||||||||
Total Assets Measured at Fair Value | $ | 14,449 | $ | 346,967 | $ | — | $ | 361,416 | |||||||
Liabilities | |||||||||||||||
Notes payable | $ | — | $ | 328,761 | $ | — | $ | 328,761 | |||||||
Total Liabilities Measured at Fair Value | $ | — | $ | 328,761 | $ | — | $ | 328,761 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
($ in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents | $ | 8,297 | $ | — | $ | — | $ | 8,297 | |||||||
Bank loans | — | 199,485 | — | 199,485 | |||||||||||
Total Assets Measured at Fair Value | $ | 8,297 | $ | 199,485 | $ | — | $ | 207,782 |
2016 | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
($ in thousands, except share data) | |||||||||||||||
Revenues | $ | 79,850 | $ | 82,324 | $ | 80,085 | $ | 80,295 | |||||||
Operating Income | 12,783 | 16,538 | 8,743 | 12,750 | |||||||||||
Net Income Attributable to Common Stockholders | 12,426 | 15,625 | 8,088 | 12,363 | |||||||||||
Earnings (loss) per share—Basic | $ | 1.94 | $ | 2.04 | $ | 0.99 | $ | 1.48 | |||||||
Earnings (loss) per share—Diluted | $ | 1.87 | $ | 1.99 | $ | 0.97 | $ | 1.45 |
2015 | |||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
($ in thousands, except share data) | |||||||||||||||
Revenues | $ | 86,115 | $ | 92,375 | $ | 99,656 | $ | 103,831 | |||||||
Operating Income | 16,506 | 23,112 | 16,208 | 24,542 | |||||||||||
Net Income (Loss) Attributable to Common Stockholders | 6,636 | (649 | ) | 9,777 | 19,342 | ||||||||||
Earnings per share—Basic | $ | 0.78 | $ | (0.07 | ) | $ | 1.10 | $ | 2.16 | ||||||
Earnings per share—Diluted | $ | 0.76 | $ | (0.07 | ) | $ | 1.08 | $ | 2.11 |
Article I |
When the Leverage Ratio is: | ||||
greater than or equal to | and less than | ABR Margin | Eurodollar Margin and LC Fee | Commitment Fee |
2.00:1.00 | n/a | 1.250% | 2.250% | 0.450% |
1.00:1.00 | 2.00:1.00 | 1.000% | 2.000% | 0.350% |
n/a | 1.00:1.00 | 0.750% | 1.750% | 0.300% |
Assignor | Assignee[s]3 | Facility Assigned 4 | Aggregate Amount of Commitment/Loans for all Lenders 5 | Amount of Commitment/Loans Assigned8 | Percentage Assigned of Commitment/Loans 6 | CUSIP Number |
$_______________ | $_______________ | ____% | ||||
$_______________ | $_______________ | ____% | ||||
$_______________ | $_______________ | ____% |
Type of Borrowing (ABR or Eurodollar) | Amount | Interest Period for Eurodollar Borrowings |
Date | Type of Loan | Amount of Loan | Amount of principal converted, paid or prepaid | Interest Rate on Eurodollar Loans | Interest Period for Eurodollar Loans | Notation Made By |
Name of Lender | Revolving Commitment (after giving effect to this increase) |
$ | |
$. | |
Name of Lender | Revolving Commitment |
$ | |
$. | |
(a) | immediately before and after giving effect to the increase contemplated hereby, no Default or Event of Default has occurred and is continuing; |
(b) | immediately after giving effect to the increase contemplated hereby, the aggregate Revolving Commitments of all Lenders will not exceed $200,000,000; |
(c) | the increase contemplated hereby shall be in an aggregate amount of not less than $15,000,000 or such amount plus an integral multiple of $1,000,000; |
(d) | after giving effect to the increase contemplated hereby, the Revolving Commitments shall not have been increased on more than three occasions pursuant to Section 2.11. |
Name | Title | Signature |
Name | Jurisdiction | |
Duff & Phelps Investment Management Co. | Illinois | |
ETF Distributors LLC | Delaware | |
ETFis Holdings LLC | Delaware | |
Euclid Advisors LLC | New York | |
Kayne Anderson Rudnick Investment Management, LLC | California | |
Newfleet Asset Management, LLC | Delaware | |
Rampart Investment Management Company, LLC | Delaware | |
Virtus Alternative Investment Advisers, Inc. | Connecticut | |
Virtus ETF Advisers LLC | Delaware | |
Virtus ETF Solutions LLC | Delaware | |
Virtus Fund Services, LLC | Delaware | |
Virtus Investment Advisers, Inc. | Massachusetts | |
Virtus Partners, Inc. | Delaware | |
Virtus Retirement Investment Advisers, LLC | Delaware | |
VP Distributors, LLC | Delaware | |
Zweig Advisers LLC | Delaware |
/S/ GEORGE R. AYLWARD |
George R. Aylward |
President, Chief Executive Officer and Director |
(Principal Executive Officer) |
/S/ MICHAEL A. ANGERTHAL |
Michael A. Angerthal |
Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/S/ GEORGE R. AYLWARD |
George R. Aylward |
President, Chief Executive Officer and Director |
(Principal Executive Officer) |
/S/ MICHAEL A. ANGERTHAL |
Michael A. Angerthal |
Executive Vice President, Chief Financial Officer |
(Principal Financial Officer and Principal Accounting Officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 09, 2017 |
Jun. 30, 2016 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | VRTS | ||
Entity Registrant Name | VIRTUS INVESTMENT PARTNERS, INC. | ||
Entity Central Index Key | 0000883237 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 6,819,003 | ||
Entity Public Float | $ 409,657,058 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in $ per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 9,119,058 | 9,613,088 |
Common stock, shares outstanding (in shares) | 5,889,013 | 8,398,944 |
Treasury stock, shares (in shares) | 3,230,045 | 1,214,144 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 48,763 | $ 30,671 | $ 96,965 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment, net of tax of ($348), $266 and $132 for the years ended December 31, 2016, 2015 and 2014 | 569 | (434) | (216) |
Unrealized (loss) gain on available-for-sale securities, net of tax of ($32), $71, and ($76) for the years ended December 31, 2016, 2015 and 2014, respectively | 241 | (358) | 124 |
Other comprehensive (loss) income | 810 | (792) | (92) |
Comprehensive income | 49,573 | 29,879 | 96,873 |
Comprehensive (income) loss attributable to noncontrolling interests | (261) | 4,435 | 735 |
Comprehensive income attributable to common stockholders | $ 49,312 | $ 34,314 | $ 97,608 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustment, tax benefit (expense) | $ (348) | $ 266 | $ 132 |
Unrealized gain (loss) on available-for-sale securities, tax benefit (expense) | $ (32) | $ 71 | $ (76) |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Stockholders' Equity [Abstract] | |||||||
Cash dividends declared (in $ per share) | $ 0.45 | $ 0.45 | $ 0.45 | $ 0.45 | $ 1.8 | $ 1.8 | $ 1.35 |
Organization and Business |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Virtus Investment Partners, Inc. (the “Company,” “we,” “us,” “our” or “Virtus”), a Delaware corporation, operates in the investment management industry through its subsidiaries. The Company provides investment management and related services to individuals and institutions throughout the United States of America. The Company’s retail investment management services are provided to individuals through products consisting of open-end mutual funds, closed-end funds, exchange traded funds (“ETFs”), variable insurance funds, Undertaking for Collective Investment in Transferable Securities (“UCITS”) and separately managed accounts. Institutional investment management services are provided to corporations, multiemployer retirement funds, employee retirement systems, foundations, endowments, structured products and as a subadviser to unaffiliated mutual funds. |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies, which have been consistently applied, are as follows: Principles of Consolidation and Basis of Presentation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated. Voting interest entities ("VOEs") are consolidated when the Company is considered to have a controlling financial interest which is typically present when the Company owns a majority of the voting interest in an entity or otherwise has the power to govern the financial and operating policies of the entity. See Note 18 for additional information related to the consolidation of sponsored investment products and the consolidated investment product. Intercompany accounts and transactions have been eliminated. The Company evaluates any variable interest entities ("VIEs") in which the Company has a variable interest for consolidation. A VIE is an entity in which either (a) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or (b) where as a group, the holders of the equity investment at risk do not possess: (i) the power through voting or similar rights to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb expected losses or the right to receive expected residual returns of the entity; or (iii) proportionate voting and economic interests and where substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately fewer voting rights. If an entity has any of these characteristics, it is considered a VIE and is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that has both the power to direct the activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company reclassified certain amounts in prior-period financial statements to conform to the current period's presentation. The Company has reclassified its net presentation of purchases and sales of investments by its consolidated sponsored investments products and its consolidated investment product in the Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014 to conform with the current year presentation of showing purchases and sales of investments by its consolidated sponsored investments products and its consolidated investment product as separate line items within the cash flows from operating activities. The reclassification had no impact on the net cash provided by or used in operating, investing or financing activities within the Consolidated Statement of Cash Flows, Consolidated Balance Sheets or Statements of Operations, Comprehensive Income or Changes in Stockholders' Equity for any period presented. Noncontrolling Interest Noncontrolling interests represent the profit or loss attributed to third-party investors in consolidated sponsored investment products and other affiliates. Movements in amounts attributable to noncontrolling interests in consolidated entities on the Company’s Consolidated Statements of Operations offset the operating results, gains and losses and interest expense of the third-party investors. Noncontrolling interests related to certain consolidated sponsored investment products are classified as redeemable noncontrolling interests because investors in these funds may request withdrawals at any time. Use of Estimates The preparation of the consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management believes the estimates used in preparing the consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates. Segment Information Accounting Standards Codification (“ASC”) 280, Segment Reporting, establishes disclosure requirements relating to operating segments in annual and interim financial statements. Business or operating segments are defined as components of an enterprise about which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company operates in one business segment, namely as an asset manager providing investment management and distribution services for individual and institutional clients with investment professionals managing both retail and institutional products. The Company’s Chief Executive Officer is the Company’s chief operating decision maker. Although the Company provides disclosures regarding assets under management and other asset flows by product, the Company’s determination that it operates in one business segment is based on the fact that the same investment and operational resources support multiple products, such products have the same or similar regulatory framework and the Company’s chief operating decision maker reviews the Company’s financial performance at a consolidated level. Investment organizations within the Company are generally not aligned with specific product lines. Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and money market fund investments. Investments Marketable Securities Marketable securities include sponsored mutual funds, sponsored variable insurance funds and other equity securities classified as trading securities and sponsored closed-end funds classified as available-for-sale securities which are carried at fair value in accordance with ASC 320, Investments—Debt and Equity Securities (“ASC 320”). Marketable securities are marked to market based on the respective publicly quoted net asset values of the funds or market prices of the equity securities or bonds. Marketable securities transactions are recorded on a trade date basis. Any unrealized appreciation or depreciation on available-for-sale securities, net of income taxes, is reported as a component of accumulated other comprehensive income in equity attributable to stockholders in the Consolidated Statement of Comprehensive Income. Any unrealized appreciation or depreciation on trading securities is reported as realized and unrealized gain (loss) on investments in the Consolidated Statement of Operations. On a quarterly basis, the Company conducts a review to assess whether other-than-temporary impairments exist on its available-for-sale marketable securities. Other-than-temporary declines in value may exist if the fair value of a marketable security has been below the carrying value for an extended period of time. If an other-than-temporary decline in value is determined to exist, the unrealized investment loss, net of tax, is recognized in the Consolidated Statements of Operations in the period in which the other-than-temporary decline in value occurs, as well as an accompanying permanent adjustment to accumulated other comprehensive income. Equity Method Investments The Company’s investment in noncontrolled entities, where the Company does not hold a controlling financial interest but has the ability to significantly influence operating and financial matters, is accounted for under the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures. Under the equity method of accounting, the Company’s share of the noncontrolled entities net income or loss is recorded in other income (expense), net in the accompanying Consolidated Statements of Operations. Distributions received reduce the Company’s investment balance. The investment is evaluated for impairment as events or changes indicate that the carrying amount exceeds its fair value. If the carrying amount of an investment does exceed its fair value and the decline in fair value is deemed to be other-than-temporary, an impairment charge will be recorded. Non-qualified Retirement Plan Assets and Liabilities The Company has a non-qualified retirement plan (the “Excess Incentive Plan”) that allows certain employees to voluntarily defer compensation. Under the Excess Incentive Plan, participants elect to defer a portion of their compensation, which the Company then contributes into a trust. Each participant is responsible for designating investment options for assets they contribute, and the ultimate distribution paid to each participant reflects any gains or losses on the assets realized while in the trust. The Company holds the Excess Incentive Plan assets in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of the Company’s bankruptcy or insolvency. Assets held in trust, which are considered trading securities, are included in investments and are carried at fair value in accordance with ASC 820, Fair Value Measurement; the associated obligations to participants are included in other liabilities in the Company’s Consolidated Balance Sheets and approximate the fair value of the associated assets. Assets held in trust consist of mutual funds and are recorded at fair value, utilizing Level 1 valuation techniques. Deferred Commissions Deferred commissions, which are included in other assets in the Company's Consolidated Balance Sheets, are commissions paid to broker-dealers on sales of mutual fund shares. Deferred commissions are recovered by the receipt of monthly asset-based distributor fees from the mutual funds or contingent deferred sales charges received upon redemption of shares within one to five years, depending on the fund share class. The deferred costs resulting from the sale of shares are amortized on a straight-line basis over a one to five-year period, depending on the fund share class, or until the underlying shares are redeemed. Deferred commissions are periodically assessed for impairment and additional amortization expense is recorded, as appropriate. Furniture, Equipment and Leasehold Improvements, Net Furniture, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years for furniture and office equipment, and three to five years for computer equipment and software. Leasehold improvements are depreciated over the shorter of the remaining estimated lives of the related leases or useful lives of the improvements. Major renewals or betterments are capitalized, and recurring repairs and maintenance are expensed as incurred. Leasehold improvements that are funded upfront by a landlord and are constructed for the benefit of the Company are recorded at cost and depreciated on a straight-line basis over the original minimum term of the lease and a corresponding lease incentive liability in the same amount is also recorded and initially amortized over the same period. Leases The Company currently leases office space and equipment under various leasing arrangements. Leases are classified as either capital leases or operating leases, as appropriate. Most lease agreements are classified as operating leases and contain renewal options, rent escalation clauses or other inducements provided by the lessor. Rent expense under non-cancelable operating leases with scheduled rent increases or rent holidays is accounted for on a straight-line basis over the lease term, beginning on the date of initial possession or the effective date of the lease agreement. The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability. Build-out allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the effective date of the lease. Intangible Assets and Goodwill Definite-lived intangible assets are comprised of acquired investment advisory contracts. These assets are amortized on a straight-line basis over the estimated useful lives of such assets, which range from one to sixteen years. Definite-lived intangible assets are evaluated for impairment on an ongoing basis under GAAP whenever events or circumstances indicate that the carrying value of the definite-lived intangible asset may not be fully recoverable. The Company determines if impairment has occurred by comparing estimates of future undiscounted cash flows to the carrying value of assets. Assets are considered impaired, and impairment is recorded, if the carrying value exceeds the expected future undiscounted cash flows. Goodwill represents the excess of the purchase price of acquisitions and mergers over the identified net assets and liabilities acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill is not being amortized. A single reporting unit has been identified for the purpose of assessing potential future impairments of goodwill. An impairment analysis of goodwill is performed annually or more frequently, if warranted by events or changes in circumstances affecting the Company’s business. The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment, which states that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The Company’s 2016 and 2015 annual goodwill impairment analysis did not result in any impairment charges. Indefinite-lived intangible assets are comprised of closed-end and exchange traded fund investment advisory contracts. These assets are tested for impairment annually and when events or changes in circumstances indicate the assets might be impaired. The Company follows ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which provides entities with an option to perform a qualitative assessment of indefinite-lived intangible assets other than goodwill for impairment to determine if additional impairment testing is necessary. The Company’s 2016 and 2015 annual indefinite-lived intangible assets impairment analyses did not result in any impairment charges. Treasury Stock Treasury stock is accounted for under the cost method and is included as a deduction from equity in the Stockholders’ Equity section of the Consolidated Balance Sheets. Upon any subsequent resale, the treasury stock account is reduced by the cost of such stock. Revenue Recognition Investment management fees, distribution and service fees and administration and transfer agent fees are recorded as revenues during the period in which services are performed. Investment management fees are earned based upon a percentage of assets under management and are paid pursuant to the terms of the respective investment management contracts, which generally require monthly or quarterly payment. The Company accounts for investment management fees in accordance with ASC 605, Revenue Recognition, and has recorded its management fees net of fees paid to unaffiliated subadvisers. The Company considers the nature of its contractual arrangements in determining whether to recognize revenue based on the gross amount billed or net amount retained. The Company has evaluated the factors in ASC 605-45 in determining whether to record revenue on a gross or net basis with significant weight placed on: (i) whether the Company is the primary obligor in the arrangement; and (ii) whether the Company has latitude in establishing price. Amounts paid to unaffiliated subadvisers for the years ended December 31, 2016, 2015 and 2014 were $47.2 million, $76.4 million and $124.4 million, respectively. Distribution and service fees are earned based on a percentage of assets under management and are paid monthly pursuant to the terms of the respective distribution and service fee contracts. Underwriter fees are sales-based charges on sales of certain class A-share mutual funds. Administration and transfer agent fees consist of fund administration fees, transfer agent fees and fiduciary fees. Fund administration and transfer agent fees are earned based on the average daily assets in the funds. Other income and fees consist primarily of redemption income on the early redemption of certain share classes of mutual funds. Advertising and Promotion Advertising and promotional costs include print advertising and promotional items and are expensed as incurred. These costs are classified in other operating expenses in the Consolidated Statements of Operations. Stock-based Compensation The Company accounts for stock-based compensation expense in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for share-based awards based on the estimated fair value on the date of grant. Restricted stock units (“RSUs”) are stock awards that entitle the holder to receive shares of the Company’s common stock as the award vests over time or when certain performance targets are achieved. The fair value of each RSU award is estimated using the intrinsic value method, which is based on the fair market value price on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Compensation expense for RSU awards is recognized ratably over the vesting period on a straight-line basis. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires recognition of the amount of taxes payable or refundable for the current year, as well as deferred tax liabilities and assets for the future tax consequences of events that have been included in the Company’s financial statements or tax returns. Deferred tax liabilities and assets result from temporary differences between the book value and tax basis of the Company’s assets, liabilities and carry-forwards, such as net operating losses or tax credits. The Company’s methodology for determining the realizability of deferred tax assets includes consideration of taxable income in prior carryback year(s) if carryback is permitted under the tax law, as well as consideration of the reversal of deferred tax liabilities that are in the same period and jurisdiction and are of the same character as the temporary differences that gave rise to the deferred tax assets. The Company’s methodology also includes estimates of future taxable income from its operations, as well as the expiration dates and amounts of carry-forwards related to net operating losses and capital losses. These estimates are projected through the life of the related deferred tax assets based on assumptions that the Company believes to be reasonable and consistent with demonstrated operating results. Changes in future operating results not currently forecasted may have a significant impact on the realization of deferred tax assets. Valuation allowances are provided when it is determined that it is more likely than not that the benefit of deferred tax assets will not be realized. Comprehensive Income The Company reports all changes in comprehensive income in the Consolidated Statements of Changes in Stockholders’ Equity and the Consolidated Statements of Comprehensive Income. Comprehensive income includes net income (loss), foreign currency translation adjustments (net of tax) and unrealized gains and losses on investments classified as available-for-sale (net of tax). Earnings per Share Earnings per share (“EPS”) is calculated in accordance with ASC 260, Earnings per Share. Basic EPS excludes dilution for potential common stock issuances and is computed by dividing basic net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of RSUs and stock options using the treasury stock method. Fair Value Measurements and Fair Value of Financial Instruments The FASB defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. ASC 820 Fair Value Measurements and Disclosures establishes a framework for measuring fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels as follows: Level 1—Unadjusted quoted prices for identical instruments in active markets. Level 1 assets and liabilities may include debt securities and equity securities that are traded in an active exchange market. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs may include observable market data such as closing market prices provided by independent pricing services after considering factors such as the yields or prices of comparable investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. In addition, pricing services may determine the fair value of equity securities traded principally in foreign markets when it has been determined that there has been a significant trend in the U.S. equity markets or in index futures trading. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. Recent Accounting Pronouncements New Accounting Standards Implemented The Company adopted Accounting Standards Update ("ASU") No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02"), on January 1, 2016. This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain entities. Certain unconsolidated entities that had been classified as VOEs under previous consolidation guidance are now classified as VIEs under ASU 2015-02. As such, disclosure for VIEs is included in Note 18 to the consolidated financial statements. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. The Company adopted ASU No. 2014-13, Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity (“CFE”) ("ASU 2014-13"), on January 1, 2016. This new standard requires reporting entities to use the more observable of the fair value of the financial assets or the financial liabilities to measure the financial assets and the financial liabilities of a CFE when a CFE is initially consolidated. It permits entities to make an accounting policy election to apply this same measurement approach after initial consolidation or to apply other GAAP to account for the consolidated CFE’s financial assets and financial liabilities. It also prohibits all entities from electing to use the fair value option in ASC 825, Financial Instruments, to measure either the financial assets or financial liabilities of a consolidated CFE that is within the scope of this issue. The Company has elected the measurement alternative for its consolidated investment product. The Company's subsequent earnings from the consolidated investment product will reflect changes in value of the Company's own economic interest in the consolidated investment product. Disclosures for the Company's CFE are included in Note 18 to the consolidated financial statements. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. The Company adopted ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"), on January 1, 2016. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. The Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-3"), on January 1, 2016, which changes the presentation of debt issuance costs in the balance sheet. This new standard requires that debt issuance costs be presented as a deduction from the carrying amount of the related debt rather than being presented as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. In August 2015, the FASB issued ASU 2015-15 to amend ASU 2015-03 to address line-of-credit agreements. ASU 2015-15 allows entities to present debt issuance costs related to line-of-credit agreements as an asset and amortize deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. New Accounting Standards Not Yet Implemented In November 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-the period and end-of-period total amounts shown on the statement of cash flows. This standard is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted in any interim or annual period. A reporting entity should apply this standard on a retrospective basis as of the beginning of the fiscal year for which the standard is effective. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") which clarifies the treatment of several cash flow categories. In addition, ASU 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its Consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholdings on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Under the modified retrospective transition method, the adoption of this standard will result in the Company recording a cumulative effect adjustment to retained earnings for excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable. Prospectively the Company will account for all excess tax benefits or deficiencies as part of income tax expense or benefit. The Company will also recognize the impact of forfeitures as they occur. In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), which amends the principal-versus-agent implementation guidance in ASU 2014-09 Revenue from Contracts with Customers, as further discussed below. The new guidance will impact whether an entity reports revenue on a gross or net basis. The Company is currently evaluating the potential impact of adopting this standard on its Consolidated Financial Statements; which is effective for the Company in conjunction with the adoption of ASU 2014-09. In March 2016, the FASB issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures (Topic 232): Simplifying the Transition to the Equity Method of Accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) will be recognized through earnings. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard will not have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). The standard replaces current codification Topic 840 with updated guidance on accounting for leases and requires a lessee to recognize assets and liabilities arising from an operating lease on the balance sheet, whereas previous GAAP rules did not require lease assets and liabilities to be recognized for most leases. Furthermore, companies are permitted to make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. For both finance leases and operating leases, the lease liability should be initially measured at the present value of the lease payments. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will not significantly change under this new guidance. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements but expects to record a right of use asset and a related lease obligation in the Company's consolidated balance sheet upon adoption. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), which requires all equity investments (other than those accounted for under the equity method) to be measured at fair value with changes in the fair value recognized through net income. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017 and interim periods therein. Early adoption is not permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements with respect to equity investments that currently report changes in fair value as a component of accumulated other comprehensive income in equity attributable to stockholders. Comprehensive income, net of tax, with respect to these equity investments was $0.2 million for the year ended December 31, 2016, and the comprehensive loss, net of tax, was $0.4 million for the year ended December 31, 2015. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 was originally effective for fiscal years and interim periods within those years beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year for periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date and requires either a retrospective or a modified retrospective approach to adoption. The core principle of the model is that revenue is recognized upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration to be received for the goods or services. The guidance also changes the accounting for certain contract costs and revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements. The guidance is effective for the Company beginning January 1, 2018 and allows for either a full retrospective or modified approach at adoption. Our implementation efforts include the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts. Although the Company still continues to evaluate the impact of ASU 2014-09, we have not identified material changes in the timing of revenue recognition. We are also evaluating the presentation of certain revenue related-costs on a gross versus net basis and related disclosures of revenue. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Intangible assets, net are summarized as follows:
Activity in goodwill and intangible assets, net is as follows:
Definite-lived intangible asset amortization for the next five years is estimated as follows: 2017—$0.8 million, 2018—$0.6 million, 2019—$0.5 million, 2020—$0.4 million, 2021—$0.4 million, and thereafter—$0.9 million. At December 31, 2016, the weighted average estimated remaining amortization period for definite-lived intangible assets is 6.8 years. |
Investments |
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Investments Schedule [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments consist primarily of investments in the Company's sponsored mutual funds. The Company’s investments, excluding the assets of consolidated sponsored investment products and the assets of the consolidated investment product discussed in Note 18, at December 31, 2016 and 2015 were as follows:
Marketable Securities The Company’s marketable securities consist of both trading (including securities held by a broker-dealer affiliate) and available-for-sale securities. The composition of the Company’s marketable securities is summarized as follows:
For the year ended December 31, 2016, the Company recognized a net realized loss of $0.3 million on trading securities. For the years ended December 31, 2015 and 2014, the Company recognized a net realized gain of $0.4 million and $8.2 million, respectively, on trading securities. Equity Method Investments In 2014, the Company acquired an interest in a limited partnership for approximately $5.0 million which included a future capital commitment for up to $5.0 million, in the event that it was called by the partnership. For the year ended December 31, 2016, the Company made capital contributions of $2.5 million to the partnership, and the remaining capital commitment is $2.3 million. On April 9, 2013, the Company acquired a 24% noncontrolling Euro-denominated equity interest in Kleinwort Benson Investors International, Ltd. (“KBII”), a subsidiary of Kleinwort Benson Investors (Dublin) (“KBID”) for €2.6 million or $3.4 million. KBII is a U.S. registered investment adviser that provides specialized equity strategies. This investment is translated into U.S. dollars at current exchange rates as of the end of each accounting period. Net income or loss of the noncontrolled affiliate is translated at average exchange rates in effect during the accounting period. Net translation exchange gains and losses are excluded from income and recorded in accumulated other comprehensive income. This equity method investment was sold during 2016 for a realized gain of $2.9 million. Nonqualified Retirement Plan Assets The Company has a nonqualified retirement plan ( the "Excess Incentive Plan") which allows certain employees to voluntarily defer compensation. The Company holds the Excess Incentive Plan assets in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of the Company’s bankruptcy or insolvency. Assets held in trust are included in investments and are carried at fair value in accordance with ASC 320; the associated obligations to participants are included in other liabilities in the Company’s Consolidated Balance Sheets. Other Investments Other investments represents interests in entities not accounted for under the equity method such as the cost method or fair value. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of consolidated sponsored investment products and the consolidated investment product discussed in Note 18, as of December 31, 2016 and December 31, 2015, by fair value hierarchy level were as follows:
The following is a discussion of the valuation methodologies used for the Company’s assets measured at fair value. Cash equivalents represent investments in money market funds. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1. Sponsored funds represent investments in open-end mutual funds, variable insurance funds and closed-end funds for which the Company acts as the investment manager. The fair value of open-end mutual funds and variable insurance funds is determined based on their published net asset values and are categorized as Level 1. The fair value of closed-end funds is determined based on the official closing price on the exchange they are traded on and are categorized as Level 1. Equity securities include securities traded on active markets and are valued at the official closing price (typically last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1. Nonqualified retirement plan assets represent mutual funds within a nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1. Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments. Transfers into and out of levels are reflected when significant inputs used for the fair value measurement, including market inputs or performance attributes, become observable or unobservable or when the Company determines it has the ability, or no longer has the ability, to redeem, in the near term, certain investments that the Company values using a net asset value, or if the book value no longer represents fair value. There were no transfers between Level 1 and Level 2 during the years ended December 31, 2016 and 2015. |
Furniture, Equipment and Leasehold Improvements, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Furniture, Equipment and Leasehold Improvements, Net | Furniture, Equipment and Leasehold Improvements, Net Furniture, equipment and leasehold improvements, net are summarized as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of the provision for income taxes are as follows:
The following presents a reconciliation of the provision (benefit) for income taxes computed at the federal statutory rate to the provision (benefit) for income taxes recognized in the Consolidated Statements of Operations for the years indicated:
The provision for income taxes reflects U.S. federal, state and local taxes at an estimated effective tax rate of 30%, 55% and 29% for the years ended December 31, 2016, 2015 and 2014, respectively. The Company's tax position for the years ended December 31, 2016 and 2015 was impacted by changes in the valuation allowance related to the unrealized and realized gain/loss position on the Company’s marketable securities. Additionally, the Company’s effective tax rate for the year ended December 31, 2014 was impacted by a net tax benefit of approximately $15.5 million due to the resolution of an Internal Revenue Service (“IRS”) examination of the Company's 2011 federal consolidated corporate income tax return. The net benefit is comprised of the recognition of tax benefits from previously uncertain tax positions of approximately $31.0 million and a reduction in the available loss deduction of approximately $15.5 million, of which both related to the past dissolution of a subsidiary. Deferred taxes resulted from temporary differences between the amounts reported in the consolidated financial statements and the tax basis of assets and liabilities. The tax effects of temporary differences are as follows:
At each reporting date, the Company evaluates the positive and negative evidence used to determine the likelihood of realization of its deferred tax assets. The Company maintained a valuation allowance in the amount of $5.7 million and $10.9 million at December 31, 2016 and 2015, respectively, relating to deferred tax assets on items of a capital nature as well as certain state deferred tax assets. As of December 31, 2016, the Company had net operating loss carry-forwards for federal income tax purposes represented by a $14.1 million deferred tax asset. The related federal net operating loss carry-forwards are scheduled to begin to expire in the year 2031. As of December 31, 2016, the Company had state net operating loss carry-forwards, varying by subsidiary and jurisdiction, represented by a $6.2 million deferred tax asset. The state net operating loss carry-forwards are scheduled to begin to expire in 2017. Internal Revenue Code Section 382 limits tax deductions for net operating losses, capital losses and net unrealized built-in losses after there is a substantial change in ownership in a corporation’s stock involving a 50 percentage point increase in ownership by 5% or larger stockholders. During the year ended December 31, 2009, the Company incurred an ownership change as defined in Section 382. At December 31, 2016, the Company has pre-change losses, represented by deferred tax assets totaling $21.4 million. The utilization of these assets in subject to an annual limitation of $1.6 million. Activity in unrecognized tax benefits is as follows:
The Company’s practice is to classify interest and penalties related to income tax matters in income tax expense. The Company recorded no interest or penalties related to unrecognized tax benefits at December 31, 2016, 2015 and 2014. During the year ended December 31, 2016, the Company experienced a tax shortfall of $1.3 million related to certain stock-based incentive plans. Under ASC 718, these tax shortfalls are able to be offset to the extent of the accumulated windfall deductions recorded in stockholders equity in the Company's Consolidated Balance Sheet. The earliest federal tax year that remains open for examination is 2008 since net operating loss carry-forwards from 2008 could be denied when claimed in future years. The earliest open years in the Company’s major state tax jurisdictions are 2008 for Connecticut and 2012 for all of the Company's remaining state tax jurisdictions. |
Business Combinations |
12 Months Ended |
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Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Virtus ETF Solutions On April 10, 2015, the Company made an investment of approximately $4.8 million for a majority ownership position in Virtus ETF Solutions (“VES”), formerly known as ETF Issuer Solutions. VES is a New York City-based company that operates a platform for listing, operating, and distributing exchange traded funds. The transaction was accounted for under ASC 805, Business Combinations. Goodwill of $1.5 million and other intangible assets of $2.4 million were recorded as a result of this transaction. The impact of this transaction was not material to the Company’s consolidated financial statements. As part of the purchase agreement, the minority shareholders, who own 42.5% of VES, have the ability to redeem a portion of their membership interests each year beginning in 2021 based on a multiple of 6 times trailing 12 months EBITDA. At December 31, 2016, the Company had $3.5 million accrued for the estimated redemption liability. RidgeWorth Investments On December 16, 2016, we entered into an agreement (the “Merger Agreement”) to acquire RidgeWorth Holdings, LLC (“RidgeWorth”). The purchase price for the Company’s acquisition of RidgeWorth (the “Proposed Acquisition”) equals (x) $472.0 million, plus (y) the fair market value of certain of RidgeWorth’s investments at the effective time of the Proposed Acquisition (the "Closing"), with the final purchase price subject to adjustments for working capital and client consents. The Proposed Acquisition is expected to close in mid-2017, subject to the satisfaction or waiver of various conditions; however, there can be no assurance that the Proposed Acquisition will close, or if it does, when the Closing will occur. |
Debt |
12 Months Ended |
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Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facility On September 30, 2016, the Company entered into a new senior unsecured revolving credit facility (“Credit Facility”) replacing the previous senior secured revolving credit facility. The Credit Facility has a five-year term and provides for borrowing capacity of up to $150.0 million, with an increase provision to $200.0 million conditioned on approval by the lending group. In addition, the Credit Facility has a $7.5 million sub-limit for the issuance of standby letters of credit. At December 31, 2016 and 2015, we had $30.0 million and $0.0 million respectively, of debt outstanding under our credit facility. On February 6, 2017, the Company repaid its $30.0 million debt outstanding. Amounts outstanding under the Credit Facility bear interest at an annual rate equal to, at the Company’s option, either LIBOR for interest periods of one, two, three or six months or an alternate base rate (as defined in the Credit Facility agreement), plus, in each case, an applicable margin, that ranges from 0.75% to 2.25%. At December 31, 2016, amounts outstanding under the Credit Facility bore interest at a rate of 2.5625%. Under the terms of the Credit Facility, the Company is also required to pay certain fees, including an annual commitment fee that ranges from 0.30% to 0.45% on undrawn amounts and a letter of credit participation fee at an annual rate equal to the applicable margin as well as any applicable fronting fees, each of which is payable quarterly in arrears. The credit agreement governing the Credit Facility contains customary restrictive covenants on the Company and its subsidiaries. Restrictive covenants in the credit agreement include, but are not limited to: prohibitions on creating, incurring or assuming any liens; entering into merger arrangements; selling, leasing, transferring or otherwise disposing of assets; making a material change in the nature of the business; entering into transactions with affiliates; and incurring indebtedness through the subsidiaries. Many of these restrictions are subject to certain minimum thresholds and exceptions. Financial covenants under the credit agreement include: (i) the quarterly maintenance of a leverage ratio (total debt to adjusted EBITDA), as defined in the credit agreement, of not greater than 3.00:1.00, and (ii) a minimum interest coverage ratio (EBITDA to interest expense) for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00. The Company was in compliance with all debt covenants at December 31, 2016. Debt Financing Commitment In connection with the Merger Agreement, on December 16, 2016, the Company entered into a debt financing commitment letter (the "Commitment Letter") with Barclays Bank PLC and Morgan Stanley Senior Funding, Inc. (the “Initial Commitment Parties”). Pursuant to the Commitment Letter, the Initial Commitment Parties committed to arrange and provide the Company with a senior secured credit facility ("Loan Facility") composed of (i) a term loan of up to $475.0 million with an expected maturity of seven years from the execution date and (ii) a revolving credit facility of up to $100.0 million maturing five years after the execution date. On February 1, 2017 we issued common stock and mandatory convertible preferred stock for total net proceeds of $207.1 million and, as a result, on February 7, 2017, the term loan under the Loan Facility was reduced from $475.0 million to $260.0 million in accordance with the terms of the Commitment Letter. The availability of borrowings under the Loan Facility is subject to satisfaction of certain customary conditions which include termination and repayment of all amounts outstanding under our existing senior unsecured revolving credit facility (using cash on hand). The senior secured credit facility will contain affirmative and negative financial and operating covenants and events of default customary for facilities of this type. The credit facility will be guaranteed by the Company's domestic subsidiaries (subject to certain exceptions) and will be secured by substantially all of the Company's assets. |
Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is regularly involved in litigation and arbitration as well as examinations, inquiries and investigations by various regulatory bodies, including the SEC, involving its compliance with, among other things, securities laws, client investment guidelines, laws governing the activities of broker-dealers and other laws and regulations affecting its products and other activities. Legal and regulatory matters of this nature involve or may involve but are not limited to the Company’s activities as an employer, issuer of securities, investor, investment adviser, broker-dealer or taxpayer. In addition, in the normal course of business, the Company discusses matters with its regulators raised during regulatory examinations or is otherwise subject to their inquiry. These matters could result in censures, fines, penalties or other sanctions. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In addition, in the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450, Loss Contingencies. The disclosures, accruals or estimates, if any, resulting from the foregoing analysis are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Based on information currently available, available insurance coverage and established reserves, the Company believes that the outcomes of its legal and regulatory proceedings are not likely, either individually or in the aggregate, to have a material adverse effect on the Company’s results of operations, cash flows or its consolidated financial condition. However, in the event of unexpected subsequent developments and given the inherent unpredictability of these legal and regulatory matters, the Company can provide no assurance that its assessment of any claim, dispute, regulatory examination or investigation or other legal matter will reflect the ultimate outcome and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods. In re Virtus Investment Partners, Inc. Securities Litigation; formerly Tom Cummins v. Virtus Investment Partners Inc. et al On February 20, 2015, a putative class action complaint alleging violations of certain provisions of the federal securities laws was filed by an individual shareholder against the Company and certain of the Company’s current officers (the “defendants”) in the United States District Court for the Southern District of New York (the "Court"). On April 21, 2015, three plaintiffs, including the original plaintiff, filed motions to be appointed lead plaintiff and, on June 9, 2015, the Court appointed Arkansas Teachers Retirement System lead plaintiff. On August 21, 2015, the plaintiffs filed a Consolidated Class Action Complaint (the “Consolidated Complaint”) amending the originally filed complaint, which was purportedly filed on behalf of all purchasers of the Company’s common stock between January 25, 2013 and May 11, 2015 (the “Class Period”). The Consolidated Complaint alleges that, during the Class Period, the defendants disseminated materially false and misleading statements and concealed material adverse facts relating to certain funds formerly subadvised by F-Squared Investments Inc. ("F-Squared"). The Consolidated Complaint alleges claims under Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5. The plaintiff seeks to recover unspecified damages. A motion to dismiss the Consolidated Complaint was filed on behalf of the Company and the other defendants on October 21, 2015. On July 1, 2016, the Court entered an opinion and order granting in part, and denying in part, the motion to dismiss, narrowing Plaintiff's claims under Sections 10(b) and 20(a) of the Exchange Act and dismissing one of the defendants from the suit. The remaining defendants' Answer to the Consolidated Complaint was filed on August 5, 2016. The parties are briefing Plaintiff's motion for class certification, and oral argument on class certification will be held on March 3, 2017. The Company believes that the suit is without merit and intends to defend it vigorously. The Company believes that there is not a material loss that is probable and reasonably estimable related to this claim. Mark Youngers v. Virtus Investment Partners, Inc. et al On May 8, 2015, a putative class action complaint alleging violations of certain provisions of the federal securities laws was filed in the United States District Court for the Central District of California (the "District Court") by an individual who alleges he is a former shareholder of one of the Virtus mutual funds formerly subadvised by F-Squared and formerly known as the AlphaSector Funds. The complaint alleges claims against the Company, certain of the Company’s officers and affiliates, and certain other parties (the “defendants”). The complaint was purportedly filed on behalf of purchasers of the AlphaSector Funds between May 8, 2010 and December 22, 2014, inclusive (the “Class Period”). The complaint alleges that, during the Class Period, the defendants disseminated materially false and misleading statements and concealed or omitted material facts necessary to make the statements made not misleading. On June 7, 2015, a group of three individuals, including the original plaintiff, filed a motion to be appointed lead plaintiff, and on July 27, 2015, the District Court appointed movants as lead plaintiff. On October 1, 2015, the plaintiffs filed a First Amended Class Action Complaint which, among other things, added a derivative claim for breach of fiduciary duty on behalf of Virtus Opportunities Trust. On October 19, 2015, the District Court entered an order transferring the action to the Southern District of New York (the "Court"). On January 4, 2016, the Plaintiffs filed a Second Amended Complaint. A motion to dismiss was filed on behalf of the Company and affiliated defendants on February 1, 2016. On July 1, 2016, the Court entered an opinion and order granting in part, and denying in part, the motion to dismiss. The Court dismissed four causes of action entirely and a fifth cause of action with respect to a portion of the Class Period. The Court also dismissed all claims against ten defendants named in the Complaint. The Court held that the Plaintiffs may pursue certain securities claims under Sections 10(b) and 20(a) of the Exchange Act and Section 12 of the Securities Act of 1933. The remaining defendants filed an Answer to the Second Amended Complaint on August 5, 2016. A Stipulation of Voluntary Dismissal of the claim under Section 12 of the Securities Act was filed on September 15, 2016. The defendants filed a motion to certify an interlocutory appeal of the July 1, 2016 order to the Court of Appeals for the Second Circuit on August 26, 2016. The motion was denied on January 6, 2017. The parties are briefing Plaintiff's motion for class certification, and oral argument on class certification will be held on March 3, 2017. The Company believes that the suit has no basis in law or fact and intends to defend it vigorously. The Company believes that there is not a material loss that is probable and reasonably estimable related to this claim. Lease Commitments The Company incurred rental expenses, primarily related to office space, under operating leases of $4.4 million, $4.3 million and $3.7 million in 2016, 2015 and 2014, respectively. Minimum aggregate rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016 are as follows: $5.0 million in 2017; $4.5 million in 2018; $3.0 million in 2019; $2.4 million in 2020; $1.9 million in 2021; and $1.3 million thereafter. |
Equity Transactions |
12 Months Ended |
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Dec. 31, 2016 | |
Equity [Abstract] | |
Equity Transactions | Equity Transactions As of December 31, 2016, 3.43 million shares of the Company's common stock have been authorized to be repurchased under the Board of Directors approved share repurchase program and 0.2 million shares remain available for repurchase. Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price and prevailing market and business conditions. The program, which has no specified term, may be suspended or terminated at any time. During the year ended December 31, 2016, the Company repurchased a total of 2,572,417 common shares for approximately $233.7 million, under board approved repurchases which included the repurchase of 1,727,746 common shares at a price of $93.50 per share for a total purchase price of $161.5 million with Bank of Montreal Holdings Inc. pursuant to a Stock Purchase Agreement and the repurchase of 556,516 shares, representing 6.7% of the Company's common stock outstanding, pursuant to a "modified Dutch Auction" tender offer. As of December 31, 2016, the Company has repurchased a total of 3,786,561 shares of common stock at a weighted average price of $103.38 per share plus transaction costs for a total cost of $391.5 million. During each quarter of the year ended December 31, 2016, the Board of Directors declared quarterly cash dividends of $0.45 each. Total dividends declared were $13.0 million for the year ended December 31, 2016. At December 31, 2016, $3.5 million is included as dividends payable in liabilities in the Consolidated Balance Sheet, primarily representing the fourth quarter dividend to be paid on February 10, 2017 to all shareholders of record on January 31, 2017. On February 1, 2017, the Company issued 910,000 shares of common stock and 1,150,000 shares of 7.25% mandatory convertible preferred stock ("MCPS") in a public offering which included the exercised over-allotment option for the MCPS offering for net proceeds of $207.1 million, after underwriting discounts, commissions and other offering expenses. On February 24, 2017, the underwriters exercised their option to purchase an additional 136,500 shares of common stock for net proceeds of $14.3 million. The mandatory convertible preferred stock was issued and has a liquidation preference of $100.00 per share. Unless converted earlier, each share of mandatory convertible preferred stock will convert automatically on February 1, 2020 (the "mandatory conversion date") into between 0.7576 and 0.9091 shares of common stock, subject to customary anti-dilution adjustments. The number of shares of common stock issuable upon conversion will be determined based on the average volume-weighted average price per share of Virtus common stock over the 20 consecutive trading day period beginning on, and including, the 22nd scheduled trading day immediately preceding the mandatory conversion date. Each share of MCPS can be converted prior to the mandatory conversion date at the option of the holder at the minimum conversion rate of 0.7576 or at specified rate, in the event of a fundamental change as defined in the certificate of designations of the MCPS. Dividends on the mandatory convertible preferred stock will be payable on a cumulative basis when, as and if declared by Virtus' board of directors, at an annual rate of 7.25 percent on the liquidation preference of $100.00 per share. If declared, these dividends will be paid in cash, or, subject to certain limitations, in shares of Virtus' common stock (or a combination) on February 1, May 1, August 1, and November 1 of each year, commencing May 1, 2017, and continuing to, and including, February 1, 2020. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in accumulated other comprehensive loss, by component, are as follows:
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Retirement Savings Plan |
12 Months Ended |
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Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Savings Plan | Retirement Savings Plan The Company sponsors a defined contribution 401(k) retirement plan (the “401(k) Plan”) covering all employees who meet certain age and service requirements. Employees may contribute a percentage of their eligible compensation into the 401(k) Plan, subject to certain limitations imposed by the Internal Revenue Code. The Company matches employees’ contributions at a rate of 100% of employees’ contributions up to the first 3.0% and 50.0% of the next 2.0% of the employees’ compensation contributed to the 401(k) Plan. The Company’s matching contributions were $2.4 million, $2.1 million and $2.8 million in 2016, 2015 and 2014, respectively. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has an Omnibus Incentive and Equity Plan (the “Plan”) under which officers, employees and directors may be granted equity-based awards, including restricted stock units (“RSUs”), stock options and unrestricted shares of common stock. On May 25, 2016, the shareholders of the Company approved an amendment to the Plan, which increased the number of authorized shares to 2,400,000. At December 31, 2016, 749,178 shares of common stock remain available for issuance of the 2,400,000 shares that were authorized for issuance under the Plan. Each RSU entitles the holder to one share of common stock when the restriction expires. RSUs generally have a term of one to three years and may be time-vested or performance-contingent. Stock options generally cliff vest after three years and have a contractual life of ten years. The fair value of each RSU is estimated using the intrinsic value method, which is based on the fair market value price on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant. Shares that are issued upon vesting of RSUs and exercise of stock options are newly issued shares from the Plan and are not issued from treasury stock. Stock-based compensation expense is summarized as follows:
RSU activity for the year ended December 31, 2016 is summarized as follows:
The grant-date intrinsic value of RSUs granted during the year ended December 31, 2016 was $14.3 million. The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2016, 2015 and 2014 was $80.33, $134.37 and $183.83 per share, respectively. The total fair value of RSUs vested during the years ended December 31, 2016, 2015 and 2014 was $9.3 million, $11.8 million and $21.1 million, respectively. For the years ended December 31, 2016, 2015 and 2014, a total of 19,592, 37,488 and 50,952 RSUs, respectively, were withheld through net share settlement by the Company to settle minimum employee tax withholding obligations. The Company paid $1.5 million, $5.1 million and $9.1 million for the years ended December 31, 2016, 2015 and 2014, respectively, in minimum employee tax withholding obligations related to RSUs withheld. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting. As of December 31, 2016, unamortized stock-based compensation expense for outstanding RSUs was $16.0 million, with a weighted average remaining contractual life of 1.4 years. As of December 31, 2015, unamortized stock-based compensation expense for outstanding RSUs was $16.7 million, with weighted average remaining contractual life of 1.7 years. The Company did not capitalize any stock-based compensation expenses during the years ended December 31, 2016, 2015 and 2014. There were no unvested stock options at December 31, 2016. During the years ended December 31, 2016 and 2015, the Company granted 33,244 and 33,632 RSUs, respectively, each of which contains two performance based metrics in addition to a service condition (Performance Share Units or "PSUs"). For the years ended December 31, 2016 and 2015, total stock-based compensation expense included $2.8 million and $2.5 million respectively, for PSUs. As of December 31, 2016 and 2015, unamortized stock-based compensation expense related to PSUs was $3.3 million and $6.2 million, respectively. Compensation expense for these PSUs is recognized over the three year service period based upon the value determined using a combination of the intrinsic value method, for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718 and the Monte Carlo simulation valuation model for awards under the performance metric that represents a "market condition" under ASC 718. Compensation expense for the awards that contain a market condition is fixed at the date of grant and will not be adjusted in future periods based upon the achievement of the market condition. Compensation expense for the awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon the final outcome. Stock option activity for the year ended December 31, 2016 is summarized as follows:
The weighted-average remaining contractual term for stock options outstanding at December 31, 2016 and December 31, 2015 was 1.9 and 2.9 years, respectively. The weighted-average remaining contractual term for stock options vested and exercisable at December 31, 2016 was 1.9 years. At December 31, 2016, the aggregate intrinsic value of stock options outstanding and vested and exercisable was $13.8 million. The total intrinsic value of stock options exercised for the years ended December 31, 2016, 2015 and 2014 was $1.3 million, $0.7 million and $4.2 million, respectively. Cash received from stock option exercises was $0.5 million, $0.1 million and $0.8 million for 2016, 2015 and 2014, respectively. Employee Stock Purchase Plan The Company offers an employee stock purchase plan that allows employees to purchase shares of common stock on the open market at market price through after-tax payroll deductions. The initial transaction fees are paid for by the Company and shares of common stock are purchased on a quarterly basis. The Company does not reserve shares for this plan or discount the purchase price of the shares. |
Restructuring and Severance |
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Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Severance | Restructuring and Severance During the year ended December 31, 2016, the Company incurred $3.9 million in severance costs related to staff reductions, primarily in business support areas, and $0.4 million in costs related to future lease obligations and leasehold improvement write-offs for vacated office space. Total unpaid severance and related charges as of December 31, 2016 was $2.4 million. |
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Earnings Per Share | Earnings Per Share The computation of basic and diluted earnings per share is as follows:
For the years ended December 31, 2016, 2015 and 2014, there were 7,973, 1,521 and 6,085 instruments, respectively, excluded from the above computations of weighted-average shares for diluted EPS because the effect would be anti-dilutive. |
Concentration of Credit Risk |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk The concentration of credit risk with respect to advisory fees receivable is generally limited due to the short payment terms extended to clients by the Company. The following funds provided 10 percent or more of the total revenues of the Company:
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Consolidation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation | Consolidation The Company has two types of investment products that are consolidated: consolidated sponsored investment product and the consolidated investment product. Consolidated sponsored investment products are investment products in which the Company generally holds a majority of the beneficial interests. The consolidated investment product is a collateralized loan obligation ("CLO") in which the Company has less than the majority of the beneficial interests. The secured notes of the CLO have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. The consolidation and deconsolidation of these investment products have no impact on net income attributable to stockholders. The Company’s risk with respect to these investments is limited to its beneficial interests in these products. The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company’s investments in, and fees generated from, these products. Consolidated Sponsored Investment Products In the normal course of its business, the Company sponsors various investment products. The Company consolidates, as a consolidated sponsored investment product, an investment product when it owns a majority of the voting interest in the entity or it is the primary beneficiary of an investment product that is a VIE. As of December 31, 2016 and December 31, 2015, the Company consolidated 19 and 12 sponsored investment products, respectively. During the year ended December 31, 2016, the Company consolidated 12 additional sponsored investment products and deconsolidated 5 sponsored investment products because the Company no longer has a majority voting interest. The following table presents the balances of the consolidated sponsored investment products that were reflected in the Consolidated Balance Sheets as of December 31, 2016 and 2015:
Fair Value Measurements of Consolidated Sponsored Investment Products The assets and liabilities of the consolidated sponsored investment products measured at fair value on a recurring basis by fair value hierarchy level were as follows:
The following is a discussion of the valuation methodologies used for the assets and liabilities of the Company’s consolidated sponsored investment products measured at fair value. Investments of consolidated sponsored investment products represent the underlying debt, equity and other securities held in sponsored products, which are consolidated by the Company. Equity securities are valued at the official closing price on the exchange on which the securities are traded and are categorized within Level 1. Level 2 investments include most debt securities, which are valued based on quotations received from independent pricing services or from dealers who make markets in such securities and certain equity securities, including non-US securities, for which closing prices are not readily available or are deemed to not reflect readily available market prices and are valued using an independent pricing service. Pricing services do not provide pricing for all securities, and therefore indicative bids from dealers are utilized, which are based on pricing models used by market makers in the security and are also included within Level 2. Level 3 investments include debt securities that are not widely traded, are illiquid or are priced by dealers based on pricing models used by market makers in the security. The following table is a reconciliation of assets and liabilities of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.
For the year ended December 31, 2016 and December 31, 2015, respectively, securities held by consolidated sponsored investment products with an end of period value of $3.7 million and $8.4 million, respectively, were transferred from Level 2 to Level 1 because certain non-US securities quoted market prices were no longer adjusted based on third-party factors derived from model-based valuation techniques for which the significant assumptions were observable in the market. No securities were transferred from Level 1 to Level 2 during the year ended December 31, 2016. Securities with an end of period market value of $0.2 million were transferred from Level 1 to Level 2 during the year ended December 31, 2015 because certain non-US securities' quoted market prices were adjusted based on third-party factors derived from model-based valuation techniques for which the significant assumptions were observable in the market or an exchange price for preferred shares was no longer available. Derivatives Certain consolidated sponsored investment products may employ derivative instruments as part of their investment strategies. These derivatives may include futures contracts, swaps contracts, options contracts and forward contracts. Derivative instruments in an asset position are classified as other assets of consolidated sponsored investment products in the Consolidated Balance Sheets. Derivative instruments in a liability position are classified as liabilities of consolidated sponsored investment products within the Consolidated Balance Sheets. The change in fair value of such derivatives is recorded in realized and unrealized gain (loss) on investments of consolidated sponsored investment products, net, in the Consolidated Statements of Operations. In connection with entering into these derivative contracts, these consolidated sponsored investment products may be required to pledge an amount of cash equal to the appropriate “initial margin” requirements . The cash pledged or on deposit is recorded in the Consolidated Balance Sheets of the Company as Cash pledged or on deposit of consolidated sponsored investment products. The fair value of such derivatives at December 31, 2016 was immaterial. Short Sales Certain consolidated sponsored investment products may engage in short sales, which are transactions in which a security is sold, which is not owned or is owned but there is no intention to deliver, in anticipation that the price of the security will decline. Short sales are recorded in the Consolidated Balance Sheets within other liabilities of consolidated sponsored investment products. Borrowings One of the Company’s consolidated sponsored investment products may employ leverage in the form of using proceeds from short sales, which allows it to use its long positions as collateral in order to purchase additional securities. The use of these proceeds from short sales is secured by the assets of the consolidated sponsored investment product, which are held with the custodian in a separate account. This consolidated sponsored investment product is permitted to borrow up to 33.33% of its total assets. Consolidated Investment Product Overview On June 9, 2016, the Company issued a collateralized loan obligation ("CLO") with a par value of $356.3 million consisting of six classes of senior secured floating rate notes payable with a par value of $320.0 million and subordinated notes with a par value of $36.3 million. Upon the launch of the CLO, the warehouse debt of $152.6 million was repaid, and the Company redeemed its preference shares while simultaneously making a $36.3 million investment in the CLO's subordinated notes. The CLO is a special purpose vehicle that owns a portfolio of investments and issues various tranches of debt and subordinated note securities to finance the purchase of those investments. The investment activities of the CLO are governed by investment guidelines contained within the CLO’s governing documents. The CLO has a defined investment period during which it is permitted to make investments and reinvest capital as it becomes available. The CLO is a VIE, and the Company consolidates the CLO's assets and liabilities as a consolidated investment product within its financial statements as it is the primary beneficiary of the VIE. The Company has determined that it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact the economic performance of the entity and has the obligation to absorb losses, or the rights to receive benefits from, the VIE that could potentially be significant to the VIE. As discussed in Note 2, the Company adopted ASU 2014-13 effective January 1, 2016. This guidance requires reporting entities to use the more observable of the fair value of the financial assets or the financial liabilities to measure the financial assets and the financial liabilities of a CFE when a CFE is initially consolidated. The Company has elected the measurement alternative for its consolidated investment product and has determined that the fair value of the financial assets of the CFE is more observable than the fair value of the financial liabilities of the CFE. The Company's earnings from the consolidated investment product will reflect changes in value of the Company's beneficial interest in the consolidated investment product. The fair value of the Company’s beneficial interest, which is eliminated in consolidation, is determined primarily based on an income approach. The income approach is driven by current information such as market yields and projected cash flows expected to be received from the portfolio of collateral assets based on forecasted default and recovery rates that a market participant would use in determining the current fair value of the interest. The Company utilizes unadjusted third party pricing information in determining the fair value of its beneficial interest. The following table presents the balances of the consolidated investment product that, after intercompany eliminations, were reflected in the Condensed Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015:
Total Investments of Consolidated Investment Product Total investments represent bank loan investments of $347.0 million at December 31, 2016, primarily comprised of secured corporate loans from a variety of industries. These bank loan investments mature at various dates between 2018 and 2025, pay interest at LIBOR plus a spread of up to 8.25% and typically range in S&P credit rating categories from BBB- to B-. At December 31, 2016, the fair value of the senior bank loans exceeded the unpaid principal balance by approximately $1.3 million. No collateral assets were in default as of December 31, 2016. Notes Payable of Consolidated Investment Product The CLO has note obligations that bear interest at variable rates based on LIBOR plus a pre-defined spread ranging from 1.0% to 8.75%. The principal amounts outstanding of the note obligations issued by the CLO mature in April 2028. The CLO may elect to reinvest any prepayments received on bank loan investments prior to April 2020. Any subsequent prepayments received must be used to pay down the note obligations. The Company’s beneficial interests and maximum exposure to loss related to the consolidated investment product is limited to (i) ownership in the subordinated notes and related participations in management fees of the CLOs and (ii) accrued management fees. The secured notes of the CLO have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative, prescribed by ASU 2014-13 and adopted on January 1, 2016, results in the net amount of the consolidated investment product shown above to be equivalent to the beneficial interests retained by the Company at December 31, 2016 as shown in the table below:
The following table represents revenue and expenses of the consolidated investment product included in the Company’s Consolidated Statements of Operations for the periods indicated:
As summarized in the table below, the application of the measurement alternative as prescribed by ASU 2014-13 results in the consolidated net income summarized above to be equivalent to the Company’s own economic interests in the consolidated investment product which are eliminated upon consolidation:
Fair Value Measurements of Consolidated Investment Product The assets and liabilities of the consolidated investment product measured at fair value on a recurring basis by fair value hierarchy level were as follows: As of December 31, 2016:
As of December 31, 2015:
The following is a discussion of the valuation methodologies used for the assets and liabilities of the Company’s consolidated investment product measured at fair value: Cash equivalents represent investments in money market funds. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1. Bank loans represent the underlying debt securities held in the sponsored product which are consolidated by the Company. Bank loan investments include debt securities, which are generally at the average mid-point of bid and ask quotations obtained from a third-party pricing service. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics. In certain instances, fair value has been determined utilizing discounted cash flow analyses or single broker non-binding quotes. Depending on the nature of the inputs, these assets are classified as Level 1, 2 or 3 within the fair value measurement hierarchy. Notes payable represent notes issued by the CLO and are measured using the measurement alternative in ASU 2014-13. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of the beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. The estimated fair value of debt at December 31, 2015, which had a variable interest rate, approximated its carrying value. The securities purchase payable at December 31, 2016 and December 31, 2015 approximated fair value due to the short-term nature of the instruments. Nonconsolidated VIEs The Company has interests in certain entities that are VIEs that the Company does not consolidate as it is not the primary beneficiary of those entities. The Company is not the primary beneficiary as its interest in the entities does not provide the Company with the power to direct the activities that most significantly impact the entities economic performance. At December 31, 2016, the carrying value and maximum risk of loss related to these VIEs was $9.0 million. Certain of the Company’s affiliates serve as the collateral manager for other collateralized loan and collateralized bond obligations (collectively, “CDOs”). The assets and liabilities of these CDOs reside in bankruptcy remote, special purpose entities in which the Company has no ownership in, nor holds any notes issued by, the CDOs and provides neither recourse nor guarantees. The Company determined that its investment management fees received as collateral manager for these CDOs did not represent a variable interest as: (1) the fees the Company earns are compensation for services provided and are commensurate with the level of effort required to provide the investment management services; (2) the Company does not hold other interests in the CDOs that individually, or in the aggregate, would absorb more than an insignificant amount of the CDO's expected losses or receive more than an insignificant amount of the CDO's expected residual return; and (3) the investment management arrangement only includes terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm's length. |
Subsequent Events |
12 Months Ended |
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Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 1, 2017 the Company issued 910,000 shares of common stock and 1,150,000 shares of 7.25% mandatory convertible preferred stock in a public offering which included the exercise of the underwriter option to purchase additional mandatory convertible preferred stock for net proceeds of $207.1 million, after underwriting discounts, commissions and other offering expenses. On February 24, 2017, the underwriters exercised their option to purchase an additional 136,500 shares of common stock for net proceeds of $14.3 million. The mandatory convertible preferred stock was issued and has a liquidation preference of $100.00 per share. Unless converted earlier, each share of mandatory convertible preferred stock will convert automatically on February 1, 2020 (the "mandatory conversion date"), into between 0.7576 and 0.9091 shares of common stock, subject to customary anti-dilution adjustments. The number of shares of common stock issuable upon conversion will be determined based on the average VWAP per share of Virtus common stock over the 20 consecutive trading day period beginning on, and including, the 22nd scheduled trading day immediately preceding the mandatory conversion date. Each share of mandatory convertible preferred stock can be converted prior to February 1, 2020 at the option of the holder at the minimum conversion rate of 0.7576 or at specified rate in the event of a fundamental change as defined in the certificate of designations of the mandatory convertible preferred stock. On February 7, 2017, the term loan commitment under the Loan Facility was reduced from $475.0 million to $260.0 million as a result of our February 1, 2017, issuances of common stock and mandatory convertible preferred stock. Dividends on the mandatory convertible preferred stock will be payable on a cumulative basis when, as and if declared by Virtus' board of directors, at an annual rate of 7.25% on the liquidation preference of $100.00 per share. If declared, these dividends will be paid in cash, or, subject to certain limitations, in shares of Virtus' common stock (or a combination) on February 1, May 1, August 1, and November 1 of each year, commencing May 1, 2017, and continuing to, and including, February 1, 2020. On February 6, 2017, the Company repaid the full outstanding balance of $30.0 million on the Company's Credit Facility. On February 15, 2017, the Company declared a quarterly cash dividend of $0.45 per common share to be paid on May 10, 2017 to shareholders of record at the close of business on April 28, 2017. The Company also declared a quarterly cash dividend of $1.8125 per share on the Company's 7.25% mandatory convertible preferred stock to be paid on May 1, 2017 to shareholders of record at the close of business on April 15, 2017. |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2016 | |
Variable Interest Entity [Line Items] | |
Basis of Presentation | The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Consolidation | The condensed consolidated financial statements include the accounts of the Company, its subsidiaries and investment products that are consolidated. Voting interest entities ("VOEs") are consolidated when the Company is considered to have a controlling financial interest which is typically present when the Company owns a majority of the voting interest in an entity or otherwise has the power to govern the financial and operating policies of the entity. See Note 18 for additional information related to the consolidation of sponsored investment products and the consolidated investment product. Intercompany accounts and transactions have been eliminated. |
Consolidation, Variable Interest Entities | The Company evaluates any variable interest entities ("VIEs") in which the Company has a variable interest for consolidation. A VIE is an entity in which either (a) the equity investment at risk is not sufficient to permit the entity to finance its own activities without additional financial support or (b) where as a group, the holders of the equity investment at risk do not possess: (i) the power through voting or similar rights to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb expected losses or the right to receive expected residual returns of the entity; or (iii) proportionate voting and economic interests and where substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately fewer voting rights. If an entity has any of these characteristics, it is considered a VIE and is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that has both the power to direct the activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company has two types of investment products that are consolidated: consolidated sponsored investment product and the consolidated investment product. Consolidated sponsored investment products are investment products in which the Company generally holds a majority of the beneficial interests. The consolidated investment product is a collateralized loan obligation ("CLO") in which the Company has less than the majority of the beneficial interests. The secured notes of the CLO have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. The consolidation and deconsolidation of these investment products have no impact on net income attributable to stockholders. The Company’s risk with respect to these investments is limited to its beneficial interests in these products. The Company has no right to the benefits from, and does not bear the risks associated with, these investment products beyond the Company’s investments in, and fees generated from, these products. |
Reclassifications | The Company reclassified certain amounts in prior-period financial statements to conform to the current period's presentation. The Company has reclassified its net presentation of purchases and sales of investments by its consolidated sponsored investments products and its consolidated investment product in the Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014 to conform with the current year presentation of showing purchases and sales of investments by its consolidated sponsored investments products and its consolidated investment product as separate line items within the cash flows from operating activities. The reclassification had no impact on the net cash provided by or used in operating, investing or financing activities within the Consolidated Statement of Cash Flows, Consolidated Balance Sheets or Statements of Operations, Comprehensive Income or Changes in Stockholders' Equity for any period presented. |
Noncontrolling Interest | Noncontrolling interests represent the profit or loss attributed to third-party investors in consolidated sponsored investment products and other affiliates. Movements in amounts attributable to noncontrolling interests in consolidated entities on the Company’s Consolidated Statements of Operations offset the operating results, gains and losses and interest expense of the third-party investors. Noncontrolling interests related to certain consolidated sponsored investment products are classified as redeemable noncontrolling interests because investors in these funds may request withdrawals at any time. |
Use of Estimates | The preparation of the consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management believes the estimates used in preparing the consolidated financial statements are reasonable and prudent. Actual results could differ from those estimates. |
Segment Information | Accounting Standards Codification (“ASC”) 280, Segment Reporting, establishes disclosure requirements relating to operating segments in annual and interim financial statements. Business or operating segments are defined as components of an enterprise about which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company operates in one business segment, namely as an asset manager providing investment management and distribution services for individual and institutional clients with investment professionals managing both retail and institutional products. The Company’s Chief Executive Officer is the Company’s chief operating decision maker. Although the Company provides disclosures regarding assets under management and other asset flows by product, the Company’s determination that it operates in one business segment is based on the fact that the same investment and operational resources support multiple products, such products have the same or similar regulatory framework and the Company’s chief operating decision maker reviews the Company’s financial performance at a consolidated level. Investment organizations within the Company are generally not aligned with specific product lines. |
Cash and Cash Equivalents | Cash and cash equivalents consist of cash in banks and money market fund investments. |
Marketable Securities | Marketable securities include sponsored mutual funds, sponsored variable insurance funds and other equity securities classified as trading securities and sponsored closed-end funds classified as available-for-sale securities which are carried at fair value in accordance with ASC 320, Investments—Debt and Equity Securities (“ASC 320”). Marketable securities are marked to market based on the respective publicly quoted net asset values of the funds or market prices of the equity securities or bonds. Marketable securities transactions are recorded on a trade date basis. Any unrealized appreciation or depreciation on available-for-sale securities, net of income taxes, is reported as a component of accumulated other comprehensive income in equity attributable to stockholders in the Consolidated Statement of Comprehensive Income. Any unrealized appreciation or depreciation on trading securities is reported as realized and unrealized gain (loss) on investments in the Consolidated Statement of Operations. On a quarterly basis, the Company conducts a review to assess whether other-than-temporary impairments exist on its available-for-sale marketable securities. Other-than-temporary declines in value may exist if the fair value of a marketable security has been below the carrying value for an extended period of time. If an other-than-temporary decline in value is determined to exist, the unrealized investment loss, net of tax, is recognized in the Consolidated Statements of Operations in the period in which the other-than-temporary decline in value occurs, as well as an accompanying permanent adjustment to accumulated other comprehensive income. |
Equity Method Investments | The Company’s investment in noncontrolled entities, where the Company does not hold a controlling financial interest but has the ability to significantly influence operating and financial matters, is accounted for under the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures. Under the equity method of accounting, the Company’s share of the noncontrolled entities net income or loss is recorded in other income (expense), net in the accompanying Consolidated Statements of Operations. Distributions received reduce the Company’s investment balance. The investment is evaluated for impairment as events or changes indicate that the carrying amount exceeds its fair value. If the carrying amount of an investment does exceed its fair value and the decline in fair value is deemed to be other-than-temporary, an impairment charge will be recorded. |
Non-qualified Retirement Plan Assets and Liabilities | The Company has a non-qualified retirement plan (the “Excess Incentive Plan”) that allows certain employees to voluntarily defer compensation. Under the Excess Incentive Plan, participants elect to defer a portion of their compensation, which the Company then contributes into a trust. Each participant is responsible for designating investment options for assets they contribute, and the ultimate distribution paid to each participant reflects any gains or losses on the assets realized while in the trust. The Company holds the Excess Incentive Plan assets in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of the Company’s bankruptcy or insolvency. Assets held in trust, which are considered trading securities, are included in investments and are carried at fair value in accordance with ASC 820, Fair Value Measurement; the associated obligations to participants are included in other liabilities in the Company’s Consolidated Balance Sheets and approximate the fair value of the associated assets. Assets held in trust consist of mutual funds and are recorded at fair value, utilizing Level 1 valuation techniques. |
Deferred Commissions | Deferred commissions, which are included in other assets in the Company's Consolidated Balance Sheets, are commissions paid to broker-dealers on sales of mutual fund shares. Deferred commissions are recovered by the receipt of monthly asset-based distributor fees from the mutual funds or contingent deferred sales charges received upon redemption of shares within one to five years, depending on the fund share class. The deferred costs resulting from the sale of shares are amortized on a straight-line basis over a one to five-year period, depending on the fund share class, or until the underlying shares are redeemed. Deferred commissions are periodically assessed for impairment and additional amortization expense is recorded, as appropriate. |
Furniture, Equipment and Leasehold Improvements, Net | Furniture, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years for furniture and office equipment, and three to five years for computer equipment and software. Leasehold improvements are depreciated over the shorter of the remaining estimated lives of the related leases or useful lives of the improvements. Major renewals or betterments are capitalized, and recurring repairs and maintenance are expensed as incurred. Leasehold improvements that are funded upfront by a landlord and are constructed for the benefit of the Company are recorded at cost and depreciated on a straight-line basis over the original minimum term of the lease and a corresponding lease incentive liability in the same amount is also recorded and initially amortized over the same period. |
Leases | The Company currently leases office space and equipment under various leasing arrangements. Leases are classified as either capital leases or operating leases, as appropriate. Most lease agreements are classified as operating leases and contain renewal options, rent escalation clauses or other inducements provided by the lessor. Rent expense under non-cancelable operating leases with scheduled rent increases or rent holidays is accounted for on a straight-line basis over the lease term, beginning on the date of initial possession or the effective date of the lease agreement. The amount of the excess of straight-line rent expense over scheduled payments is recorded as a deferred liability. Build-out allowances and other such lease incentives are recorded as deferred credits, and are amortized on a straight-line basis as a reduction of rent expense beginning in the period they are deemed to be earned, which generally coincides with the effective date of the lease. |
Intangible Assets and Goodwill | Definite-lived intangible assets are comprised of acquired investment advisory contracts. These assets are amortized on a straight-line basis over the estimated useful lives of such assets, which range from one to sixteen years. Definite-lived intangible assets are evaluated for impairment on an ongoing basis under GAAP whenever events or circumstances indicate that the carrying value of the definite-lived intangible asset may not be fully recoverable. The Company determines if impairment has occurred by comparing estimates of future undiscounted cash flows to the carrying value of assets. Assets are considered impaired, and impairment is recorded, if the carrying value exceeds the expected future undiscounted cash flows. Goodwill represents the excess of the purchase price of acquisitions and mergers over the identified net assets and liabilities acquired. In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill is not being amortized. A single reporting unit has been identified for the purpose of assessing potential future impairments of goodwill. An impairment analysis of goodwill is performed annually or more frequently, if warranted by events or changes in circumstances affecting the Company’s business. The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment, which states that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The Company’s 2016 and 2015 annual goodwill impairment analysis did not result in any impairment charges. Indefinite-lived intangible assets are comprised of closed-end and exchange traded fund investment advisory contracts. These assets are tested for impairment annually and when events or changes in circumstances indicate the assets might be impaired. The Company follows ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which provides entities with an option to perform a qualitative assessment of indefinite-lived intangible assets other than goodwill for impairment to determine if additional impairment testing is necessary. The Company’s 2016 and 2015 annual indefinite-lived intangible assets impairment analyses did not result in any impairment charges. |
Treasury Stock | Treasury stock is accounted for under the cost method and is included as a deduction from equity in the Stockholders’ Equity section of the Consolidated Balance Sheets. Upon any subsequent resale, the treasury stock account is reduced by the cost of such stock. |
Revenue Recognition | Investment management fees, distribution and service fees and administration and transfer agent fees are recorded as revenues during the period in which services are performed. Investment management fees are earned based upon a percentage of assets under management and are paid pursuant to the terms of the respective investment management contracts, which generally require monthly or quarterly payment. The Company accounts for investment management fees in accordance with ASC 605, Revenue Recognition, and has recorded its management fees net of fees paid to unaffiliated subadvisers. The Company considers the nature of its contractual arrangements in determining whether to recognize revenue based on the gross amount billed or net amount retained. The Company has evaluated the factors in ASC 605-45 in determining whether to record revenue on a gross or net basis with significant weight placed on: (i) whether the Company is the primary obligor in the arrangement; and (ii) whether the Company has latitude in establishing price. Distribution and service fees are earned based on a percentage of assets under management and are paid monthly pursuant to the terms of the respective distribution and service fee contracts. Underwriter fees are sales-based charges on sales of certain class A-share mutual funds. Administration and transfer agent fees consist of fund administration fees, transfer agent fees and fiduciary fees. Fund administration and transfer agent fees are earned based on the average daily assets in the funds. Other income and fees consist primarily of redemption income on the early redemption of certain share classes of mutual funds. |
Advertising and Promotion | Advertising and promotional costs include print advertising and promotional items and are expensed as incurred. These costs are classified in other operating expenses in the Consolidated Statements of Operations. |
Stock-based Compensation | The Company accounts for stock-based compensation expense in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for share-based awards based on the estimated fair value on the date of grant. Restricted stock units (“RSUs”) are stock awards that entitle the holder to receive shares of the Company’s common stock as the award vests over time or when certain performance targets are achieved. The fair value of each RSU award is estimated using the intrinsic value method, which is based on the fair market value price on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Compensation expense for RSU awards is recognized ratably over the vesting period on a straight-line basis. |
Income Taxes | The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires recognition of the amount of taxes payable or refundable for the current year, as well as deferred tax liabilities and assets for the future tax consequences of events that have been included in the Company’s financial statements or tax returns. Deferred tax liabilities and assets result from temporary differences between the book value and tax basis of the Company’s assets, liabilities and carry-forwards, such as net operating losses or tax credits. The Company’s methodology for determining the realizability of deferred tax assets includes consideration of taxable income in prior carryback year(s) if carryback is permitted under the tax law, as well as consideration of the reversal of deferred tax liabilities that are in the same period and jurisdiction and are of the same character as the temporary differences that gave rise to the deferred tax assets. The Company’s methodology also includes estimates of future taxable income from its operations, as well as the expiration dates and amounts of carry-forwards related to net operating losses and capital losses. These estimates are projected through the life of the related deferred tax assets based on assumptions that the Company believes to be reasonable and consistent with demonstrated operating results. Changes in future operating results not currently forecasted may have a significant impact on the realization of deferred tax assets. Valuation allowances are provided when it is determined that it is more likely than not that the benefit of deferred tax assets will not be realized. |
Comprehensive Income | The Company reports all changes in comprehensive income in the Consolidated Statements of Changes in Stockholders’ Equity and the Consolidated Statements of Comprehensive Income. Comprehensive income includes net income (loss), foreign currency translation adjustments (net of tax) and unrealized gains and losses on investments classified as available-for-sale (net of tax). |
Earnings per Share | Earnings per share (“EPS”) is calculated in accordance with ASC 260, Earnings per Share. Basic EPS excludes dilution for potential common stock issuances and is computed by dividing basic net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of RSUs and stock options using the treasury stock method. |
Fair Value Measurement | The FASB defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. ASC 820 Fair Value Measurements and Disclosures establishes a framework for measuring fair value and a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels as follows: Level 1—Unadjusted quoted prices for identical instruments in active markets. Level 1 assets and liabilities may include debt securities and equity securities that are traded in an active exchange market. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs may include observable market data such as closing market prices provided by independent pricing services after considering factors such as the yields or prices of comparable investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. In addition, pricing services may determine the fair value of equity securities traded principally in foreign markets when it has been determined that there has been a significant trend in the U.S. equity markets or in index futures trading. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. The following is a discussion of the valuation methodologies used for the Company’s assets measured at fair value. Cash equivalents represent investments in money market funds. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1. Sponsored funds represent investments in open-end mutual funds, variable insurance funds and closed-end funds for which the Company acts as the investment manager. The fair value of open-end mutual funds and variable insurance funds is determined based on their published net asset values and are categorized as Level 1. The fair value of closed-end funds is determined based on the official closing price on the exchange they are traded on and are categorized as Level 1. Equity securities include securities traded on active markets and are valued at the official closing price (typically last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1. Nonqualified retirement plan assets represent mutual funds within a nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1. Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments. |
New Accounting Standards | New Accounting Standards Implemented The Company adopted Accounting Standards Update ("ASU") No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015-02"), on January 1, 2016. This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain entities. Certain unconsolidated entities that had been classified as VOEs under previous consolidation guidance are now classified as VIEs under ASU 2015-02. As such, disclosure for VIEs is included in Note 18 to the consolidated financial statements. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. The Company adopted ASU No. 2014-13, Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity (“CFE”) ("ASU 2014-13"), on January 1, 2016. This new standard requires reporting entities to use the more observable of the fair value of the financial assets or the financial liabilities to measure the financial assets and the financial liabilities of a CFE when a CFE is initially consolidated. It permits entities to make an accounting policy election to apply this same measurement approach after initial consolidation or to apply other GAAP to account for the consolidated CFE’s financial assets and financial liabilities. It also prohibits all entities from electing to use the fair value option in ASC 825, Financial Instruments, to measure either the financial assets or financial liabilities of a consolidated CFE that is within the scope of this issue. The Company has elected the measurement alternative for its consolidated investment product. The Company's subsequent earnings from the consolidated investment product will reflect changes in value of the Company's own economic interest in the consolidated investment product. Disclosures for the Company's CFE are included in Note 18 to the consolidated financial statements. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. The Company adopted ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"), on January 1, 2016. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. The Company adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-3"), on January 1, 2016, which changes the presentation of debt issuance costs in the balance sheet. This new standard requires that debt issuance costs be presented as a deduction from the carrying amount of the related debt rather than being presented as an asset. Amortization of debt issuance costs will continue to be reported as interest expense. In August 2015, the FASB issued ASU 2015-15 to amend ASU 2015-03 to address line-of-credit agreements. ASU 2015-15 allows entities to present debt issuance costs related to line-of-credit agreements as an asset and amortize deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. Adoption of this standard did not have a material impact on the Company's consolidated financial statements. New Accounting Standards Not Yet Implemented In November 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-the period and end-of-period total amounts shown on the statement of cash flows. This standard is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted in any interim or annual period. A reporting entity should apply this standard on a retrospective basis as of the beginning of the fiscal year for which the standard is effective. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") which clarifies the treatment of several cash flow categories. In addition, ASU 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its Consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholdings on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Under the modified retrospective transition method, the adoption of this standard will result in the Company recording a cumulative effect adjustment to retained earnings for excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable. Prospectively the Company will account for all excess tax benefits or deficiencies as part of income tax expense or benefit. The Company will also recognize the impact of forfeitures as they occur. In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), which amends the principal-versus-agent implementation guidance in ASU 2014-09 Revenue from Contracts with Customers, as further discussed below. The new guidance will impact whether an entity reports revenue on a gross or net basis. The Company is currently evaluating the potential impact of adopting this standard on its Consolidated Financial Statements; which is effective for the Company in conjunction with the adoption of ASU 2014-09. In March 2016, the FASB issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures (Topic 232): Simplifying the Transition to the Equity Method of Accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) will be recognized through earnings. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard will not have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). The standard replaces current codification Topic 840 with updated guidance on accounting for leases and requires a lessee to recognize assets and liabilities arising from an operating lease on the balance sheet, whereas previous GAAP rules did not require lease assets and liabilities to be recognized for most leases. Furthermore, companies are permitted to make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. For both finance leases and operating leases, the lease liability should be initially measured at the present value of the lease payments. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee will not significantly change under this new guidance. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements but expects to record a right of use asset and a related lease obligation in the Company's consolidated balance sheet upon adoption. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), which requires all equity investments (other than those accounted for under the equity method) to be measured at fair value with changes in the fair value recognized through net income. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017 and interim periods therein. Early adoption is not permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements with respect to equity investments that currently report changes in fair value as a component of accumulated other comprehensive income in equity attributable to stockholders. Comprehensive income, net of tax, with respect to these equity investments was $0.2 million for the year ended December 31, 2016, and the comprehensive loss, net of tax, was $0.4 million for the year ended December 31, 2015. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 was originally effective for fiscal years and interim periods within those years beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year for periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date and requires either a retrospective or a modified retrospective approach to adoption. The core principle of the model is that revenue is recognized upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration to be received for the goods or services. The guidance also changes the accounting for certain contract costs and revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements. The guidance is effective for the Company beginning January 1, 2018 and allows for either a full retrospective or modified approach at adoption. Our implementation efforts include the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts. Although the Company still continues to evaluate the impact of ASU 2014-09, we have not identified material changes in the timing of revenue recognition. We are also evaluating the presentation of certain revenue related-costs on a gross versus net basis and related disclosures of revenue. |
Fair Value Measurements, Transfers | Transfers into and out of levels are reflected when significant inputs used for the fair value measurement, including market inputs or performance attributes, become observable or unobservable or when the Company determines it has the ability, or no longer has the ability, to redeem, in the near term, certain investments that the Company values using a net asset value, or if the book value no longer represents fair value. |
Consolidated Sponsored Investment Products [Member] | |
Variable Interest Entity [Line Items] | |
Fair Value Measurement | Investments of consolidated sponsored investment products represent the underlying debt, equity and other securities held in sponsored products, which are consolidated by the Company. Equity securities are valued at the official closing price on the exchange on which the securities are traded and are categorized within Level 1. Level 2 investments include most debt securities, which are valued based on quotations received from independent pricing services or from dealers who make markets in such securities and certain equity securities, including non-US securities, for which closing prices are not readily available or are deemed to not reflect readily available market prices and are valued using an independent pricing service. Pricing services do not provide pricing for all securities, and therefore indicative bids from dealers are utilized, which are based on pricing models used by market makers in the security and are also included within Level 2. Level 3 investments include debt securities that are not widely traded, are illiquid or are priced by dealers based on pricing models used by market makers in the security. |
Derivatives | consolidated sponsored investment products may employ derivative instruments as part of their investment strategies. These derivatives may include futures contracts, swaps contracts, options contracts and forward contracts. Derivative instruments in an asset position are classified as other assets of consolidated sponsored investment products in the Consolidated Balance Sheets. Derivative instruments in a liability position are classified as liabilities of consolidated sponsored investment products within the Consolidated Balance Sheets. The change in fair value of such derivatives is recorded in realized and unrealized gain (loss) on investments of consolidated sponsored investment products, net, in the Consolidated Statements of Operations. In connection with entering into these derivative contracts, these consolidated sponsored investment products may be required to pledge an amount of cash equal to the appropriate “initial margin” requirements . The cash pledged or on deposit is recorded in the Consolidated Balance Sheets of the Company as Cash pledged or on deposit of consolidated sponsored investment products. |
Short Sales | Certain consolidated sponsored investment products may engage in short sales, which are transactions in which a security is sold, which is not owned or is owned but there is no intention to deliver, in anticipation that the price of the security will decline. Short sales are recorded in the Consolidated Balance Sheets within other liabilities of consolidated sponsored investment products. |
Consolidated Investment Product [Member] | |
Variable Interest Entity [Line Items] | |
Fair Value Measurement | Cash equivalents represent investments in money market funds. Cash investments in actively traded money market funds are valued using published net asset values and are classified as Level 1. Bank loans represent the underlying debt securities held in the sponsored product which are consolidated by the Company. Bank loan investments include debt securities, which are generally at the average mid-point of bid and ask quotations obtained from a third-party pricing service. Fair value may also be based upon valuations obtained from independent third-party brokers or dealers utilizing matrix pricing models that consider information regarding securities with similar characteristics. In certain instances, fair value has been determined utilizing discounted cash flow analyses or single broker non-binding quotes. Depending on the nature of the inputs, these assets are classified as Level 1, 2 or 3 within the fair value measurement hierarchy. Notes payable represent notes issued by the CLO and are measured using the measurement alternative in ASU 2014-13. Accordingly, the fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of the beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. |
Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Goodwill and Intangible Assets, Net | Intangible assets, net are summarized as follows:
Activity in goodwill and intangible assets, net is as follows:
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Investments (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | The Company’s investments, excluding the assets of consolidated sponsored investment products and the assets of the consolidated investment product discussed in Note 18, at December 31, 2016 and 2015 were as follows:
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Schedule of Marketable Securities | The composition of the Company’s marketable securities is summarized as follows:
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Fair Value Measurements (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of consolidated sponsored investment products and the consolidated investment product discussed in Note 18, as of December 31, 2016 and December 31, 2015, by fair value hierarchy level were as follows:
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Furniture, Equipment and Leasehold Improvements, Net (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Furniture, Equipment and Leasehold Improvements, Net | Furniture, equipment and leasehold improvements, net are summarized as follows:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Provision for Income Taxes | The components of the provision for income taxes are as follows:
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Reconciliation of Provision (Benefit) for Income Taxes | The following presents a reconciliation of the provision (benefit) for income taxes computed at the federal statutory rate to the provision (benefit) for income taxes recognized in the Consolidated Statements of Operations for the years indicated:
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Summary of Tax Effects of Temporary Differences | The tax effects of temporary differences are as follows:
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Summary of Activity in Unrecognized Tax Benefits | Activity in unrecognized tax benefits is as follows:
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Accumulated Other Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive loss, by component, are as follows:
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Stock-Based Compensation (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock-Based Compensation Expense | Stock-based compensation expense is summarized as follows:
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Summary of Restricted Stock Units Activity | RSU activity for the year ended December 31, 2016 is summarized as follows:
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Summary of Stock Option Activity | Stock option activity for the year ended December 31, 2016 is summarized as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share is as follows:
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Concentration of Credit Risk (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Funds Provided Ten Percent or More of Total Revenues | The following funds provided 10 percent or more of the total revenues of the Company:
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Consolidation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of consolidated sponsored investment products and the consolidated investment product discussed in Note 18, as of December 31, 2016 and December 31, 2015, by fair value hierarchy level were as follows:
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Consolidated Sponsored Investment Products [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | The following table presents the balances of the consolidated sponsored investment products that were reflected in the Consolidated Balance Sheets as of December 31, 2016 and 2015:
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Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The assets and liabilities of the consolidated sponsored investment products measured at fair value on a recurring basis by fair value hierarchy level were as follows:
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Reconciliation of Assets of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value | The following table is a reconciliation of assets and liabilities of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.
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Reconciliation of Liabilities of Consolidated Sponsored Investment Products For Level 3 Investments, Unobservable Inputs Used to Determine Fair Value | The following table is a reconciliation of assets and liabilities of consolidated sponsored investment products for Level 3 investments for which significant unobservable inputs were used to determine fair value.
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Consolidated Investment Product [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | The following table presents the balances of the consolidated investment product that, after intercompany eliminations, were reflected in the Condensed Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015:
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Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The assets and liabilities of the consolidated investment product measured at fair value on a recurring basis by fair value hierarchy level were as follows: As of December 31, 2016:
As of December 31, 2015:
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Schedule of VIE Consolidated Investment Product | The Company’s beneficial interests and maximum exposure to loss related to the consolidated investment product is limited to (i) ownership in the subordinated notes and related participations in management fees of the CLOs and (ii) accrued management fees. The secured notes of the CLO have contractual recourse only to the related assets of the CLO and are classified as financial liabilities. Although these beneficial interests are eliminated upon consolidation, the application of the measurement alternative, prescribed by ASU 2014-13 and adopted on January 1, 2016, results in the net amount of the consolidated investment product shown above to be equivalent to the beneficial interests retained by the Company at December 31, 2016 as shown in the table below:
The following table represents revenue and expenses of the consolidated investment product included in the Company’s Consolidated Statements of Operations for the periods indicated:
As summarized in the table below, the application of the measurement alternative as prescribed by ASU 2014-13 results in the consolidated net income summarized above to be equivalent to the Company’s own economic interests in the consolidated investment product which are eliminated upon consolidation:
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Selected Quarterly Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Selected Quarterly Data |
|
Goodwill and Other Intangible Assets - Summary of Intangible Assets, Net (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|---|
Definite-lived intangible assets, net: | ||||
Investment contracts | $ 158,747 | $ 158,747 | ||
Accumulated amortization | (155,136) | (152,676) | ||
Definite-lived intangible assets, net | 3,611 | 6,071 | ||
Indefinite-lived intangible assets | 34,816 | 34,816 | ||
Total intangible assets, net | $ 38,427 | $ 40,887 | $ 41,783 | $ 44,633 |
Goodwill and Other Intangible Assets - Schedule of Activity in Goodwill and Intangible Assets, Net (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Intangible assets, net | |||
Balance, beginning of period | $ 40,887 | $ 41,783 | $ 44,633 |
Acquisition | 0 | 2,400 | 1,075 |
Amortization expense | (2,460) | (3,296) | (3,925) |
Balance, end of period | 38,427 | 40,887 | 41,783 |
Goodwill | |||
Balance, beginning of period | 6,701 | 5,260 | 5,260 |
Acquisition | 0 | 1,441 | 0 |
Acquisition related adjustments | 87 | 0 | 0 |
Balance, end of period | $ 6,788 | $ 6,701 | $ 5,260 |
Goodwill and Other Intangible Assets - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 0.8 |
2018 | 0.6 |
2019 | 0.5 |
2020 | 0.4 |
2021 | 0.4 |
Thereafter | $ 0.9 |
Weighted average estimated remaining amortization period | 6 years 9 months 18 days |
Investments - Summary of Investments (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Investment [Line Items] | ||
Marketable securities | $ 74,907 | $ 41,496 |
Parent [Member] | ||
Investment [Line Items] | ||
Marketable securities | 74,907 | 41,496 |
Equity method investments | 7,731 | 9,007 |
Nonqualified retirement plan assets | 5,808 | 5,310 |
Other investments | 925 | 925 |
Total investments | $ 89,371 | $ 56,738 |
Investments - Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Available-for-sale: | ||
Cost | $ 75,862 | $ 43,956 |
Unrealized Loss | (2,207) | (2,885) |
Unrealized Gain | 1,252 | 425 |
Fair Value | 74,907 | 41,496 |
Sponsored funds [Member] | ||
Trading: | ||
Cost | 61,784 | 31,167 |
Unrealized Loss | (1,942) | (2,134) |
Unrealized Gain | 177 | 298 |
Fair Value | 60,019 | 29,331 |
Equity securities [Member] | ||
Trading: | ||
Cost | 10,578 | 9,434 |
Unrealized Loss | 0 | (386) |
Unrealized Gain | 895 | 120 |
Fair Value | 11,473 | 9,168 |
Sponsored closed-end funds [Member] | ||
Available-for-sale: | ||
Cost | 3,500 | 3,355 |
Unrealized Loss | (265) | (365) |
Unrealized Gain | 180 | 7 |
Fair Value | $ 3,415 | $ 2,997 |
Investments - Additional Information (Detail) $ in Thousands, € in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2014
EUR (€)
|
Apr. 09, 2013 |
|
Investment [Line Items] | |||||
Realized (loss) gain on trading securities | $ (300) | $ 400 | $ 8,200 | ||
Investment in equity method investment | 5,000 | ||||
Capital contributions to equity method investments | $ 2,500 | ||||
Percentage of noncontrolling equity interest acquired | 50.00% | ||||
Realized gain on sale of equity method investment | $ 2,883 | $ 0 | 0 | ||
Kleinwort Benson Investors International, Ltd. [Member] | |||||
Investment [Line Items] | |||||
Capital contributions to equity method investments | 3,400 | € 2.6 | |||
Percentage of noncontrolling equity interest acquired | 24.00% | ||||
Realized gain on sale of equity method investment | 2,900 | ||||
Capital commitments [Member] | |||||
Investment [Line Items] | |||||
Future capital commitment (up to) | $ 2,300 | $ 5,000 |
Furniture, Equipment and Leasehold Improvements, Net (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Furniture and office equipment | $ 5,933 | $ 5,840 |
Computer equipment and software | 7,330 | 6,600 |
Leasehold improvements | 11,334 | 11,071 |
Furniture, equipment and leasehold improvements, gross | 24,597 | 23,511 |
Accumulated depreciation and amortization | (16,869) | (14,395) |
Furniture, equipment and leasehold improvements, net | $ 7,728 | $ 9,116 |
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current | |||
Federal | $ 12,790 | $ 28,077 | $ 31,787 |
State | 1,855 | 2,539 | 3,168 |
Total current tax expense | 14,645 | 30,616 | 34,955 |
Deferred | |||
Federal | 5,489 | 4,339 | 3,200 |
State | 910 | 2,017 | 1,194 |
Total deferred tax expense | 6,399 | 6,356 | 4,394 |
Income tax expense | $ 21,044 | $ 36,972 | $ 39,349 |
Income Taxes - Summary of Tax Effects of Temporary Differences (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Intangible assets | $ 19,348 | $ 27,728 |
Net operating losses | 20,272 | 20,591 |
Compensation accruals | 8,854 | 7,804 |
Capitalized transaction costs | 10,022 | 8,704 |
Unrealized loss | 5,291 | 12,157 |
Other | 1,394 | 118 |
Gross deferred tax assets | 65,181 | 77,102 |
Valuation allowance | (5,731) | (10,855) |
Gross deferred tax assets after valuation allowance | 59,450 | 66,247 |
Deferred tax liabilities: | ||
Intangible assets | (11,915) | (12,104) |
Gross deferred tax liabilities | (11,915) | (12,104) |
Deferred tax assets, net | $ 47,535 | $ 54,143 |
Income Taxes - Summary of Activity in Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 0 | $ 0 | $ 32,602 |
Decrease related to tax positions taken in prior years | 0 | 0 | (32,602) |
Increase related to positions taken in the current year | 0 | 0 | 0 |
Balance, end of year | $ 0 | $ 0 | $ 0 |
Business Combinations (Detail) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 10, 2015
USD ($)
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Business Acquisition [Line Items] | ||||||
Goodwill | $ 6,788 | $ 6,701 | $ 5,260 | $ 5,260 | ||
Redeemable noncontrolling interest, EBITDA multiplier for redemption | 6 | |||||
Redeemable noncontrolling interest, redemption liability | $ 3,500 | |||||
Virtus ETF Solutions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Minority shareholders ownership percentage | 42.50% | |||||
Virtus ETF Solutions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 4,800 | |||||
Goodwill | 1,500 | |||||
Other intangible assets | $ 2,400 | |||||
RidgeWorth Holdings, LLC [Member] | Forecast [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 472,000 |
Retirement Savings Plan (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Matching contributions | $ 2.4 | $ 2.1 | $ 2.8 |
First 3.0% [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company matching contribution percentage | 100.00% | ||
Percentage of employee's gross pay matched | 3.00% | ||
Next 2.0% [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company matching contribution percentage | 50.00% | ||
Percentage of employee's gross pay matched | 2.00% |
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock-based compensation expense | $ 11,948 | $ 11,863 | $ 9,778 |
Stock-Based Compensation - Summary of Restricted Stock Units Activity (Detail) - Restricted stock units (RSUs) [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Number of shares | |||
Number of shares, outstanding | 191,617 | ||
Number of shares, granted | 178,333 | ||
Number of shares, forfeited | (11,502) | ||
Number of shares, settled | (55,624) | ||
Number of shares, outstanding | 302,824 | 191,617 | |
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value, outstanding (in $ per share) | $ 156.66 | ||
Weighted average grant date fair value, granted (in $ per share) | 80.33 | $ 134.37 | $ 183.83 |
Weighted average grant date fair value, forfeited (in $ per share) | 109.64 | ||
Weighted average grant date fair value, settled (in $ per share) | 167.23 | ||
Weighted average grant date fair value, outstanding (in $ per share) | $ 111.56 | $ 156.66 |
Stock-Based Compensation - Summary of Stock Option Activity (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Number of shares | |
Number of shares, outstanding | shares | 156,636 |
Number of shares, granted | shares | 0 |
Number of shares, exercised | shares | (19,479) |
Number of shares, forfeited | shares | 0 |
Number of shares, outstanding | shares | 137,157 |
Number of shares, vested and exercisable | shares | 137,157 |
Weighted Average Exercise Price | |
Weighted average exercise price, outstanding (in $ per share) | $ / shares | $ 18.78 |
Weighted average exercise price, granted (in $ per share) | $ / shares | 0.00 |
Weighted average exercise price, exercised (in $ per share) | $ / shares | 25.89 |
Weighted average exercise price, forfeited (in $ per share) | $ / shares | 0.00 |
Weighted average exercise price, outstanding (in $ per share) | $ / shares | 17.77 |
Weighted average exercise price, vested and exercisable (in $ per share) | $ / shares | $ 17.77 |
Restructuring and Severance (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance | $ 4,270 | $ 0 | $ 294 |
Unpaid severance and related charges | 2,400 | ||
Severance costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance | 3,900 | ||
Other exit costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance | $ 400 |
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share [Abstract] | |||||||||||
Net Income | $ 48,763 | $ 30,671 | $ 96,965 | ||||||||
Noncontrolling interests | (261) | 4,435 | 735 | ||||||||
Net Income Attributable to Common Stockholders | $ 12,426 | $ 15,625 | $ 8,088 | $ 12,363 | $ 6,636 | $ (649) | $ 9,777 | $ 19,342 | $ 48,502 | $ 35,106 | $ 97,700 |
Shares: | |||||||||||
Basic: Weighted-average number of shares outstanding (in shares) | 7,648 | 8,797 | 9,091 | ||||||||
Plus: Incremental shares from assumed conversion of dilutive instruments (in shares) | 174 | 163 | 201 | ||||||||
Diluted: Weighted-average number of shares outstanding (in shares) | 7,822 | 8,960 | 9,292 | ||||||||
Earnings per share—basic (in $ per share) | $ 1.94 | $ 2.04 | $ 0.99 | $ 1.48 | $ 0.78 | $ (0.07) | $ 1.10 | $ 2.16 | $ 6.34 | $ 3.99 | $ 10.75 |
Earnings per share—diluted (in $ per share) | $ 1.87 | $ 1.99 | $ 0.97 | $ 1.45 | $ 0.76 | $ (0.07) | $ 1.08 | $ 2.11 | $ 6.20 | $ 3.92 | $ 10.51 |
Earnings Per Share - Additional Information (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share [Abstract] | |||
Number of anti-dilutive instruments excluded from computation of weighted-average shares for diluted earnings per share | 7,973 | 1,521 | 6,085 |
Concentration of Credit Risk - Summary of Funds Provided Ten Percent or More of Total Revenues (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Virtus Emerging Markets Opportunities Fund [Member] | |||
Concentration Risk [Line Items] | |||
Investment management, administration and transfer agent fees | $ 49,085 | $ 62,329 | $ 50,435 |
Virtus Multi-Sector Short Term Bond Fund [Member] | |||
Concentration Risk [Line Items] | |||
Investment management, administration and transfer agent fees | $ 43,579 | $ 49,174 | $ 55,401 |
Sales Revenue, Services, Net [Member] | Virtus Emerging Markets Opportunities Fund [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 15.00% | 16.00% | 11.00% |
Sales Revenue, Services, Net [Member] | Virtus Multi-Sector Short Term Bond Fund [Member] | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 14.00% | 13.00% | 12.00% |
Consolidation - Assets Related to Consolidated Sponsored Investment Products, Unobservable Input Reconciliation (Detail) - Consolidated Sponsored Investment Products [Member] - Debt Securities [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 1,397 | $ 1,065 |
Purchases | 174 | 913 |
Sales | (1,472) | (370) |
Paydowns | (5) | (10) |
Change in unrealized loss, net | 348 | (113) |
Change in realized loss, net | (355) | (141) |
Transfers from Level 2 | (62) | 151 |
Transfers to Level 2 | 0 | (98) |
Balance at end of period | $ 25 | $ 1,397 |
Consolidation - Beneficial Interests of Consolidated Investment Product (Detail) - Consolidated Investment Product [Member] $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Variable Interest Entity [Line Items] | |
Subordinated notes | $ 25,668 |
Accrued investment management fees | 341 |
Total Beneficial Interests | $ 26,009 |
Consolidation - Revenue and Expenses of Consolidated Investment Product (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income: | |||||||||||
Total revenues | $ 79,850 | $ 82,324 | $ 80,085 | $ 80,295 | $ 86,115 | $ 92,375 | $ 99,656 | $ 103,831 | $ 322,554 | $ 381,977 | $ 450,598 |
Expenses: | |||||||||||
Net Income Attributable to Common Stockholders | $ 12,426 | $ 15,625 | $ 8,088 | $ 12,363 | $ 6,636 | $ (649) | $ 9,777 | $ 19,342 | 48,502 | 35,106 | 97,700 |
Consolidated Investment Product [Member] | |||||||||||
Income: | |||||||||||
Realized and unrealized loss, net | (1,070) | (3,505) | 0 | ||||||||
Interest Income | 12,893 | 2,157 | 0 | ||||||||
Total revenues | 11,823 | ||||||||||
Expenses: | |||||||||||
Other operating expenses | 3,944 | 0 | 0 | ||||||||
Interest expense | 11,292 | $ 484 | $ 0 | ||||||||
Total Expense | 15,236 | ||||||||||
Net Income Attributable to Common Stockholders | $ (3,413) |
Consolidation - Economic Interests of Consolidated Investment Product (Detail) - Consolidated Investment Product [Member] $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Variable Interest Entity [Line Items] | |
Distributions received and unrealized losses on the subordinated notes held by the Company | $ (4,398) |
Investment management fees | 985 |
Total Economic Interests | $ (3,413) |
Selected Quarterly Data (Unaudited) - Summary of Selected Quarterly Data (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 79,850 | $ 82,324 | $ 80,085 | $ 80,295 | $ 86,115 | $ 92,375 | $ 99,656 | $ 103,831 | $ 322,554 | $ 381,977 | $ 450,598 |
Operating Income | 12,783 | 16,538 | 8,743 | 12,750 | 16,506 | 23,112 | 16,208 | 24,542 | 50,814 | 80,378 | 130,720 |
Net Income Attributable to Common Stockholders | $ 12,426 | $ 15,625 | $ 8,088 | $ 12,363 | $ 6,636 | $ (649) | $ 9,777 | $ 19,342 | $ 48,502 | $ 35,106 | $ 97,700 |
Earnings (loss) per share—Basic (in $ per share) | $ 1.94 | $ 2.04 | $ 0.99 | $ 1.48 | $ 0.78 | $ (0.07) | $ 1.10 | $ 2.16 | $ 6.34 | $ 3.99 | $ 10.75 |
Earnings (loss) per share—Diluted (in $ per share) | $ 1.87 | $ 1.99 | $ 0.97 | $ 1.45 | $ 0.76 | $ (0.07) | $ 1.08 | $ 2.11 | $ 6.20 | $ 3.92 | $ 10.51 |
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