Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Q1 2025 Earnings Presentation
46 slides from Virtus Investment Partners's earnings presentation, Apr 25, 2025
Slide 1: First Quarter Earnings Presentation
FIRST QUARTER EARNINGS PRESENTATION April 25, 2025 George R. Aylward President and Chief Executive Officer Michael A. Angerthal Executive Vice President and Chief Financial Officer
Slide 2: Important Disclosures
IMPORTANT DISCLOSURES This presentation contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The Private Secur
Slide 3: Agenda
AGENDA ■ Overview of Quarter ■ Results ■ Q & A Session 3
Slide 4: Overview of Quarter
INVESTMENT PARTNERS OVERVIEW OF QUARTER
Slide 5: First Quarter 2025 Overview
FIRST QUARTER 2025 OVERVIEW Assets and Flows ■ Assets under management (AUM) declined due to negative market performance and net outflows – AUM of $167.5 billion declined from $175.0 billion; average AUM decreased 5% to $173.6 billion – Sales of $6.2 billion compared with $6.4 billion; continued str
Slide 6: Results
INVESTMENT PARTNERS RESULTS
Slide 7: Assets Under Management
ASSETS UNDER MANAGEMENT BROADLY DIVERSIFIED Institutional Accounts Closed-End Funds ■ AUM of $167.5 billion declined from U.S. Retail Funds Retail Separate Accounts $175.0 billion due to: Global Funds and ETFs – ($4.1) billion of market performance; and – ($3.0) billion of net outflows ■ AUM well-di
Slide 8: Asset Flows
ASSET FLOWS HIGHER FIXED INCOME SALES ■ Sales of $6.2 billion compared with $6.4 billion as increased fixed income sales offset by other asset classes. By product: – Institutional sales of $1.5 billion compared with $1.6 billion, as higher fixed income sales were offset by lower alternative and equi
Slide 9: Investment Management Fees, As Adjusted
INVESTMENT MANAGEMENT FEES, AS ADJUSTED LOWER AVERAGE ASSETS ■ Investment management fees, as adjusted, decreased by 7% due to lower average AUM and lower performance fees ■ Average fee rate of 41.7 basis points – Unchanged excluding performance fees ■ Average fee rate by product – Institutional: 31
Slide 10: Employment Expenses, As Adjusted
EMPLOYMENT EXPENSES, AS ADJUSTED HIGHER ON SEASONAL EXPENSES ■ Employment expenses, as adjusted, of Seasonal Expenses $109.4 million included $10.0 million of seasonally higher expenses – Excluding seasonal expenses, declined 5% due to lower variable incentive compensation ■ Employment expenses, as
Slide 11: Other Operating Expenses, As Adjusted
OTHER OPERATING EXPENSES, AS ADJUSTED STABLE RANGE ■ Other operating expenses, as adjusted, of $31.3 million essentially unchanged, reflecting ongoing expense discipline ■ Other operating expenses, as adjusted, as a percentage of revenues, as adjusted, of 15.8% compared with 14.6% % of Revenues, as
Slide 12: Non-GAAP Results
NON-GAAP RESULTS EARNINGS INCREASE OVER PRIOR YEAR ■ Operating margin, as adjusted, of 27.6% Operating Income, as Adjusted compared with 35.1% Diluted earnings per share, as adjusted – Excluding the seasonal employment expenses, operating margin was 32.7% ■ Interest expense declined to $4.6 million
Slide 13: Capital and Select Balance Sheet
CAPITAL AND SELECT BALANCE SHEET BALANCED CAPITAL MANAGEMENT ■ Working capital of $137.2 million Select Balance Sheet Items: 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 increased from $134.5 million as Cash and cash equivalents $124 $183 $196 $266 $135 cash earnings exceeded capital Investments - seed
Slide 14: Financial Supplement
INVESTMENT PARTNERS FINANCIAL SUPPLEMENT
Slide 15: Non-GAAP Information: Income Statement
NON-GAAP INFORMATION INCOME STATEMENT1 (UNAUDITED) Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 Revenues, As Adjusted Investment management fees, as adjusted $180,547 $183,670 $185,487 $192,176 $178,501 $180,547 $178,501 Administration and shareholder service fees, as adjusted 18,717 18,331 18,579 18
Slide 16: Non-GAAP Information: Income Statement (Continued)
NON-GAAP INFORMATION INCOME STATEMENT1 (CONTINUED) (UNAUDITED) Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 Other Income (Expense), As Adjusted Realized and unrealized gain (loss) on investments, net, as adjusted $122 ($211) $656 ($389) $341 $122 $341 Other income, net, as adjusted 550 597 548 341 99
Slide 17: Non-GAAP Information: Balance Sheet
NON-GAAP INFORMATION BALANCE SHEET1 (UNAUDITED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Assets: Cash and cash equivalents $123,880 $183,001 $195,533 $265,888 $135,380 Investments – seed capital 144,682 139,584 143,901 140,049 143,000 Investments – other 128,025 118,384 140,748 142,317 132
Slide 18: Non-GAAP Information: Balance Sheet (Continued)
NON-GAAP INFORMATION BALANCE SHEET1 (CONTINUED) (UNAUDITED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Liabilities and Equity Liabilities: Accrued compensation and benefits $95,591 $132,261 $180,078 $224,501 $92,988 Accounts payable and accrued liabilities 60,835 47,257 49,618 49,492 56,699
Slide 19: U.S. GAAP Information: Income Statement
U.S. GAAP INFORMATION INCOME STATEMENT (UNAUDITED) Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 Revenues Investment management fees $188,360 $191,652 $193,843 $199,975 $186,091 $188,360 $186,091 Distribution and service fees 14,030 13,410 13,567 13,685 12,753 14,030 12,753 Administration and sharehol
Slide 20: U.S. GAAP Information: Income Statement (Continued)
U.S. GAAP INFORMATION INCOME STATEMENT (CONTINUED) (UNAUDITED) Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 Other Income (Expense) Realized and unrealized gain (loss) on investments, net $3,416 ($1,553) $4,552 ($2,501) ($991) $3,416 ($991) Realized and unrealized gain (loss) of CIP1, net 1,535 (12,93
Slide 21: Assets Under Management by Product, Asset Class and Region
ASSETS UNDER MANAGEMENT BY PRODUCT, ASSET CLASS AND REGION 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Assets by Product U.S. Retail Funds $51,171 $48,935 $50,115 $47,814 $44,952 Global Funds 4,749 4,809 5,343 5,208 5,241 Exchange Traded Funds 1,898 2,108 2,642 3,051 3,415 Total – Open-End Fu
Slide 22: Assets Under Management by Product and Asset Class
ASSETS UNDER MANAGEMENT BY PRODUCT AND ASSET CLASS Open-End Closed-End Retail Separate Institutional Total as of Funds Funds Accounts Accounts 3/31/2025 Equity: Domestic Equity $18,588 $— $36,857 $20,608 $76,053 International Equity 2,494 — 33 1,345 3,872 Global Equity 2,163 — 300 7,831 10,294 Speci
Slide 23: Asset Flows: Total
ASSET FLOWS TOTAL 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Total Beginning balance $172,259 $179,311 $173,585 $183,742 $175,001 $172,259 $175,001 Inflows 7,583 6,137 6,597 6,440 6,240 7,583 6,240 Outflows (8,821) (8,762) (8,321) (11,286) (9,219) (8,821) (9,219) Net Flows (1,2
Slide 24: Asset Flows by Product
ASSET FLOWS BY PRODUCT 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 U.S. Retail Funds Beginning balance $49,957 $51,171 $48,935 $50,115 $47,814 $49,957 $47,814 Inflows 2,944 2,300 2,391 2,267 2,376 2,944 2,376 Outflows (3,943) (3,887) (3,943) (3,964) (3,792) (3,943) (3,792) Net F
Slide 25: Asset Flows by Product (Continued)
ASSET FLOWS BY PRODUCT (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Exchange Traded Funds Beginning balance $1,545 $1,898 $2,108 $2,642 $3,051 $1,545 $3,051 Inflows 298 241 450 508 434 298 434 Outflows (28) (43) (59) (64) (88) (28) (88) Net Flows 270 198 391 444 346 2
Slide 26: Asset Flows by Product (Continued)
ASSET FLOWS BY PRODUCT (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Closed-End Funds Beginning balance $10,026 $10,064 $9,915 $10,432 $10,225 $10,026 $10,225 Inflows — — — 1 5 — 5 Outflows — (41) — — (40) — (40) Net Flows — (41) — 1 (35) — (35) Market performance 239
Slide 27: Asset Flows by Product (Continued)
ASSET FLOWS BY PRODUCT (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Intermediary Sold Managed Accounts2 Beginning balance $35,438 $38,610 $37,537 $41,913 $40,857 $35,438 $40,857 Inflows 2,171 1,895 1,985 1,526 1,522 2,171 1,522 Outflows (1,505) (1,465) (1,570) (1,504)
Slide 28: Asset Flows by Product (Continued)
ASSET FLOWS BY PRODUCT (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Institutional Accounts Beginning balance $59,548 $61,253 $58,828 $61,142 $56,084 $59,548 $56,084 Inflows 1,734 1,085 943 1,574 1,455 1,734 1,455 Outflows (3,022) (2,913) (2,349) (5,376) (2,659) (3,022
Slide 29: Asset Flows by Asset Class
ASSET FLOWS BY ASSET CLASS 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Domestic Equity Beginning balance $77,263 $83,474 $79,679 $86,474 $81,315 $77,263 $81,315 Inflows 4,390 3,381 3,185 2,921 2,659 4,390 2,659 Outflows (4,190) (4,854) (3,954) (6,888) (4,084) (4,190) (4,084) Net
Slide 30: Asset Flows by Asset Class (Continued)
ASSET FLOWS BY ASSET CLASS (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Global Equity Beginning balance $10,552 $11,228 $11,224 $11,824 $11,633 $10,552 $11,633 Inflows 318 363 274 525 549 318 549 Outflows (203) (443) (289) (601) (1,398) (203) (1,398) Net Flows 115 (80
Slide 31: Asset Flows by Asset Class (Continued)
ASSET FLOWS BY ASSET CLASS (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Leveraged Finance Beginning balance $9,083 $8,941 $8,790 $8,990 $8,612 $9,083 $8,612 Inflows 366 364 530 353 395 366 395 Outflows (505) (410) (363) (377) (504) (505) (504) Net Flows (139) (46) 167
Slide 32: Asset Flows by Asset Class (Continued)
ASSET FLOWS BY ASSET CLASS (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Investment Grade Beginning balance $10,128 $9,969 $10,030 $10,616 $9,973 $10,128 $9,973 Inflows 179 119 302 154 137 179 137 Outflows (258) (155) (239) (256) (484) (258) (484) Net Flows (79) (36) 6
Slide 33: Asset Flows by Asset Class (Continued)
ASSET FLOWS BY ASSET CLASS (CONTINUED) 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 YTD:24 YTD:25 Multi-Asset1 Beginning balance $21,411 $21,975 $21,060 $21,619 $21,174 $21,411 $21,174 Inflows 335 393 391 360 321 335 321 Outflows (455) (544) (1,121) (513) (532) (455) (532) Net Flows (120) (151
Slide 34: Investment Management Fees: Average Assets by Product
INVESTMENT MANAGEMENT FEES AVERAGE ASSETS1 BY PRODUCT Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 U.S. Retail Funds $50,487 $49,984 $49,318 $49,723 $47,451 $50,487 $47,451 Global Funds 4,623 4,717 5,110 5,249 5,291 4,623 5,291 Exchange Traded Funds 1,718 1,991 2,303 2,933 3,362 1,718 3,362 Total – O
Slide 35: Investment Management Fees: Average Fees Earned by Product
INVESTMENT MANAGEMENT FEES AVERAGE MANAGEMENT FEES EARNED1 BY PRODUCT (IN BASIS POINTS) Q1:24 Q2:24 Q3:24 Q4:24 Q1:25 YTD:24 YTD:25 U.S. Retail Funds 52.6 53.0 52.9 53.1 51.4 52.6 51.4 Global Funds 34.6 45.2 35.7 36.2 37.7 34.6 37.7 Exchange Traded Funds 11.8 11.3 12.5 12.4 13.9 11.8 13.9 Total – Op
Slide 36: Reconciliation: U.S. GAAP to Non-GAAP (Q1 2025)
RECONCILIATION: U.S. GAAP TO NON-GAAP Q1 2025 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Distributions Amortization Seed capital compensation Acquisition U.S. GAAP investment to minority Revenue of intangible and CLO and related and Non-GAAP Basis products interests related
Slide 37: Reconciliation: U.S. GAAP to Non-GAAP (Q4 2024)
RECONCILIATION: U.S. GAAP TO NON-GAAP Q4 2024 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Amortization Seed capital compensation Acquisition U.S. GAAP investment Revenue of intangible and CLO and related and Non-GAAP Basis products related assets investments investments inte
Slide 38: Reconciliation: U.S. GAAP to Non-GAAP (Q3 2024)
RECONCILIATION: U.S. GAAP TO NON-GAAP Q3 2024 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Amortization Seed capital compensation Acquisition U.S. GAAP investment Revenue of intangible and CLO and related and Non-GAAP Basis products related assets investments investments inte
Slide 39: Reconciliation: U.S. GAAP to Non-GAAP (Q2 2024)
RECONCILIATION: U.S. GAAP TO NON-GAAP Q2 2024 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Amortization Seed capital compensation Acquisition U.S. GAAP investment Revenue of intangible Restructuring and CLO and related and Non-GAAP Basis products related assets expense invest
Slide 40: Reconciliation: U.S. GAAP to Non-GAAP (Q1 2024)
RECONCILIATION: U.S. GAAP TO NON-GAAP Q1 2024 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Amortization Seed capital compensation Acquisition U.S. GAAP investment Revenue of intangible Restructuring and CLO and related and Non-GAAP Basis products related assets expense invest
Slide 41: Reconciliation: U.S. GAAP to Non-GAAP (YTD 2025)
RECONCILIATION: U.S. GAAP TO NON-GAAP YTD 2025 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Distributions Amortization Seed capital compensation Acquisition U.S. GAAP investment to minority Revenue of intangible and CLO and related and Non-GAAP Basis products interests relate
Slide 42: Reconciliation: U.S. GAAP to Non-GAAP (YTD 2024)
RECONCILIATION: U.S. GAAP TO NON-GAAP YTD 2024 (UNAUDITED) Reclassification Other adjustments Deferred Consolidated Amortization Seed capital compensation Acquisition U.S. GAAP investment Revenue of intangible Restructuring and CLO and related and Non-GAAP Basis products related assets expense inves
Slide 43: Reconciliation: Footnotes
RECONCILIATION: FOOTNOTES Non-GAAP financial information differs from financial information determined in accordance with U.S. GAAP as a result of the reclassification of certain income statement items, as well as the exclusion of certain expenses and other items that are not reflective of the earni
Slide 44: Reconciliation: Footnotes
RECONCILIATION: FOOTNOTES Seed Capital and CLO Related: 10. Seed capital and CLO investments (gains) losses - Gains and losses (realized and unrealized) of seed capital and CLO investments. Gains and losses (realized and unrealized) generated by investments in seed capital and CLO investments can va
Slide 45: Reconciliation: Footnotes
RECONCILIATION: FOOTNOTES (UNAUDITED) Components of Acquisition and Integration Expenses and Other for the respective periods are shown in the table below: Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 YTD:24 YTD:25 Acquisition and Integration Expenses Employment expenses $1,042 $1,099 $956 $861 $417 $1,0
Slide 46: Virtus Investment Partners
3éVIRTUS INVESTM! ENT PARTNERS
Virtus Investment Partners — Q1 2025 Earnings Presentation on 6ix