S-1/A 1 a2178609zs-1a.htm S-1/A
QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on September 17, 2007

Registration No. 333-143205



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


AMENDMENT NO. 7
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933


Duff & Phelps Corporation
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State of Incorporation)
  6199
(Primary Standard Industrial
Classification Code Number)
55 East 52nd Street
New York, New York 10055
(212) 871-2000

(Address, Including Zip Code, and
Telephone Number, Including Area
Code, of Registrant's Principal
Executive Offices)
  20-8893559
(I.R.S. Employer Identification Number)

Edward S. Forman, Esq.
Executive Vice President, General Counsel and Secretary
Duff & Phelps Corporation
55 East 52nd Street
New York, New York 10055
(212) 871-2000

(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)




Copies to:
David J. Goldschmidt, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
(212) 735-3000
  Michael Kaplan, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000

        Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o


        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), shall determine.




The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated September 17, 2007

PROSPECTUS

8,300,000 Shares

GRAPHIC

Class A Common Stock


        This is the initial public offering of our Class A common stock. We are offering 8,300,000 shares of our Class A common stock.

        Prior to this offering there has been no public market for our Class A common stock. It is currently estimated that the public offering price per share of our Class A common stock will be between $16.50 and $18.50. Our Class A common stock has been approved for listing on the New York Stock Exchange under the symbol "DUF."

        See "Risk Factors" on page 11 to read about factors you should consider before buying our Class A common stock.


        Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


 
  Per Share
  Total
Initial public offering price   $   $
Underwriting discount   $   $
Proceeds, before expenses, to us   $   $

        To the extent that the underwriters sell more than 8,300,000 shares of our Class A common stock, the underwriters have the option to purchase up to an additional 1,245,000 shares of our Class A common stock from us at the initial public offering price less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments.


        The underwriters expect to deliver the shares of our Class A common stock against payment in New York, New York on            , 2007.

Goldman, Sachs & Co.   UBS Investment Bank
Lehman Brothers        
William Blair & Company    
    Keefe, Bruyette & Woods
        Fox-Pitt, Kelton Cochran Caronia Waller

Prospectus dated            , 2007.


        You should rely only on the information contained in this prospectus or to which we have referred you, including any free writing prospectus that we file with the Securities and Exchange Commission relating to this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.


TABLE OF CONTENTS

Prospectus Summary   1
Risk Factors   11
Cautionary Note Regarding Forward-Looking Statements   25
Our Structure   26
Use of Proceeds   30
Dividend Policy   31
Capitalization   32
Dilution   33
Unaudited Pro Forma Financial Information   35
Selected Consolidated Financial and Operating Data   41
Management's Discussion and Analysis of Financial Condition and Results of Operations   44
Business   72
Management   87
Related Party Transactions   106
Principal Shareholders   110
Description of Capital Stock   112
Description of Indebtedness   116
Shares Eligible for Future Sale   118
Material U.S. Federal Tax Consequences to Non-U.S. Stockholders   121
Underwriting   123
Legal Matters   127
Experts   127
Where You Can Find More Information   128
Index to Financial Statements   F-1

        Until            , 2007 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


MARKET AND INDUSTRY DATA AND FORECASTS

        This prospectus includes market and industry data and forecasts that we have developed from independent consultant reports, publicly available information, various industry publications, other published industry sources and our internal data and estimates. Independent consultant reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we believe that the publications and reports are reliable, neither we nor the underwriters have independently verified the data.

        Our internal data, estimates and forecasts are based upon information obtained from our investors, partners, trade and business organizations and other contacts in the markets in which we operate and our management's understanding of industry conditions. Although we believe that such information is reliable, we have not had such information verified by any independent sources.



PROSPECTUS SUMMARY

        This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, especially the risks of investing in our Class A common stock discussed under "Risk Factors," and the consolidated financial statements and notes to those consolidated financial statements, before making an investment decision. In this prospectus, unless the context otherwise requires, the terms "Duff & Phelps," "the company," "we," "us" and "our" refer to Duff & Phelps Corporation and its subsidiaries. The pro forma revenues data for the year ended December 31, 2006 give pro forma effect to the Chanin acquisition described below, as if the acquisition had been completed as of January 1, 2006. Unless the context otherwise requires, the use of the term "revenue" or "revenues" in this prospectus, refers to revenue or revenues before reimbursable expenses.

Our Business

        We are a leading provider of independent financial advisory and investment banking services. Our mission is to help our clients protect, maximize and recover value. The foundation of our services is our ability to provide independent advice on issues involving highly technical and complex assessments of value. We principally support client needs in financial and tax valuation (especially in the context of business combinations and other corporate transactions), mergers and acquisitions ("M&A"), restructuring and litigation and disputes. We believe the Duff & Phelps brand is associated with a high level of professional service and integrity, knowledge leadership and independent, trusted advice. With over 680 highly experienced and credentialed client service professionals at June 30, 2007, we serve a global client base through offices in 21 cities, comprised of offices in 15 U.S. cities, including New York, Chicago and Los Angeles, and six international offices located in Amsterdam, London, Munich, Paris, Tokyo and Zurich.

        We provide our services through our Financial Advisory and Investment Banking segments. Our Financial Advisory segment provides valuation advisory, corporate finance consulting, specialty tax and dispute and legal management consulting services. These services help our clients effectively navigate through increasingly complex financial, accounting, tax, regulatory and legal issues. Our Investment Banking segment provides M&A advisory services, transaction opinions and restructuring advisory services. Through these services we provide independent advice to our clients in order to assist them in making critical decisions in a variety of strategic situations. The Financial Advisory and Investment Banking segments serve a broad base of clients and work collaboratively to identify and capture new business opportunities. For the year ended December 31, 2006, we generated 77% of our revenues and 72% of our pro forma revenues from our Financial Advisory segment, and 23% of our revenues and 28% of our pro forma revenues from our Investment Banking segment. For the six-month periods ended June 30, 2007 and 2006, we generated 76% and 83%, respectively, of our revenues from our Financial Advisory segment and 24% and 17%, respectively, of our revenues from our Investment Banking segment.

        We provide our services globally to a wide variety of companies who are in need of industry-leading, customized financial advice. Our clients include publicly-traded and privately-held companies, as well as investment firms such as private equity firms and hedge funds. Additionally, we maintain extensive relationships with law, accounting and investment banking firms from whom we receive referral business.

        We have a collaborative culture that is based on a team approach. This approach promotes the cross-selling of new business opportunities across practice groups and enables us to deliver the most appropriate Duff & Phelps professionals to meet a client's needs. In addition, our integrated, multi-disciplinary approach enables us to cross-staff our professionals across multiple service lines to better manage the utilization of our staff. We believe that, as a result of our firm's culture, global scale, broad

1



service offering and strong brand name, Duff & Phelps provides an attractive career platform, which allows us to attract and retain highly qualified professionals.

        From the fiscal year ended December 31, 2004 through the fiscal year ended December 31, 2006, our revenue has grown from $28.9 million to $246.7 million through a combination of acquisitions and organic growth. Our number of client service professionals has increased from 75 at December 31, 2004 to over 680 at June 30, 2007.

Our History

        The original Duff & Phelps business was founded in 1932 to provide high quality investment research services focused on the utility industry. Over several decades, it evolved into a diversified financial services firm providing investment banking, credit rating, and investment management services. In 1994, the credit rating business of Duff & Phelps was spun off into a separate public company that was eventually purchased by Fitch Ratings, Ltd. ("Fitch Ratings"). In 2000, Duff & Phelps, LLC, the company that operated the investment banking practice of the Duff & Phelps business, was acquired by Webster Financial Corporation ("Webster"). In 2004, Duff & Phelps, LLC was acquired from Webster by its management and an investor group led by Lovell Minnick Partners LLC ("Lovell Minnick"), a leading private equity firm.

        In 2005, Duff & Phelps, LLC teamed with Lovell Minnick and Vestar Capital Partners ("Vestar"), another leading private equity firm, to acquire the Corporate Value Consulting business ("CVC") from the Standard & Poor's division of The McGraw-Hill Companies, Inc. ("McGraw-Hill"). CVC was formed in the 1970's, initially as part of the financial advisory service groups of Price Waterhouse and Coopers & Lybrand. These practices were combined in 1998 when Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers ("PwC") and were subsequently acquired by McGraw-Hill in 2001, thereby establishing independence from the audit practice of PwC. In connection with the acquisition of CVC, Duff & Phelps Acquisitions, LLC ("D&P Acquisitions") was formed and Duff & Phelps, LLC became a wholly-owned subsidiary of D&P Acquisitions. In October 2006, D&P Acquisitions acquired Chanin Capital Partners LLC ("Chanin"), one of the leading independent specialty investment banks providing restructuring advisory services for middle market and distressed transactions. Duff & Phelps Corporation was formed in connection with this offering and will, upon consummation of this offering, be the sole managing member of D&P Acquisitions.

Recent Developments

        On September 1, 2007, we entered into a stock purchase agreement with Shinsei Bank, Limited, a Japanese corporation, which we refer to as Shinsei, pursuant to which we issued to Shinsei 3,375,000 shares of our Class A common stock for approximately $54.2 million, or at a purchase price equal to $16.07 per share, representing 97.4% of the low-end of the pricing range set forth on the cover page of this prospectus. We refer to this transaction as the Shinsei Investment. Upon consummation of this offering, Shinsei's equity interest in Duff & Phelps Corporation will be equal to approximately 10% of the equity capital of the company on a fully diluted basis. The proceeds from the Shinsei Investment and the Class A common stock issued to Shinsei will be held in escrow until consummation of this offering. If this offering is not consummated by October 31, 2007, half of Shinsei's investment will be returned to Shinsei and, instead of issuing Class A common stock to Shinsei, D&P Acquisitions will issue a note to Shinsei in the aggregate principal amount of approximately $27.1 million that is, upon certain conditions, convertible into units of D&P Acquisitions.

        Any shares of Class A common stock owned by Shinsei will be subject to restrictions on transfer until September 5, 2009. Shinsei may sell up to 50% of its Class A common stock on or after September 5, 2008, 75% of its Class A common stock on or after March 5, 2009 and 100% of its Class A common stock on or after September 5, 2009. In addition, Shinsei will be restricted from

2



purchasing any additional Class A common stock until March 5, 2009. In connection with this investment, we granted Shinsei registration rights.

        The transaction with Shinsei is expected to facilitate the expansion of our business in Asia. In connection with the Shinsei Investment, we entered into a referral agreement with Shinsei, who will work with us in good faith to develop a strategy to market and sell our financial advisory services in Asia. Pursuant to the referral agreement, we and Shinsei agreed to refer certain services to the other on a "preferred provider" basis in exchange for the payment of certain referral fees.

Industry Trends

        We believe that favorable long-term global trends have created a climate that supports strong revenue and profit growth in the industry segments in which we compete. These trends include:

    Growing demand for independent advisors. We are not affiliated with any public accounting firm and, therefore, we are not constrained by the provisions of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act") that limit an accounting firm's ability to provide certain non-audit services to its audit clients. We believe that these restrictions, together with the perceived conflicts of interest when auditors provide non-audit services to their audit clients, provide us with a competitive advantage over public accounting firms in securing financial advisory engagements. In addition, we believe our investment banking business will benefit from the growing scrutiny by regulators and investors regarding corporate governance. This has led to increased sensitivity among managers and corporate boards to the conflicts of interest presented by the advisory fees, underwriting, lending, sales and trading and other investment banking activities of our more diversified competitors. For example, we believe corporate boards are increasingly seeking independent fairness opinions from independent M&A advisory firms, such as us, either as the primary fairness opinion or as a supplemental opinion when there are concerns that their investment banking advisors are conflicted due to the M&A advisory fees they stand to earn upon successful consummation of a transaction.

    Movement to fair value accounting. Both the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") are increasingly favoring the use of fair value accounting techniques. These techniques seek to measure the current market value of a company's assets and liabilities as an alternative to the traditional historical cost method of accounting, which they argue is less relevant to investors who make investment decisions based on current, not historical, assessments of value. We believe that the movement of accounting standards to fair value accounting, coupled with the increased scrutiny by boards and investors of the quality, transparency and reliability of financial statements, will drive continued demand for high quality, third-party valuation services.

    Global M&A activity. Over the past several years, strong equity markets, robust earnings, significant cash balances and strong credit markets have fueled significant growth in global M&A activity. Although recent volatility in the equity and credit markets has created uncertainties regarding the ability of private equity firms and hedge funds to sustain their high levels of M&A activity, we believe strategic M&A activity driven by well capitalized corporations will remain healthy. For example, according to Forbes, as of December 2006, cash as a percentage of the largest 1,500 companies' assets was 9.7%, nearly double the amount of a decade ago.

    Restructuring and financial distress. If economic growth slows and default rates increase, we believe there will be a significant increase in demand for restructuring services, especially from new entrants into the market who lack experience in complex workout and bankruptcy situations.

3


    Litigation and disputes. Litigation and disputes often arise as a result of disagreements over economic value in the context of bankruptcies, M&A, commercial and shareholder disputes, intellectual property disputes, tax disputes, financial reporting and insurance claims. We believe increased M&A activity, shareholder activism, increased regulatory scrutiny and the increased complexity and value of intellectual property assets will continue to drive demand for our dispute consulting services.

Our Competitive Strengths

        We believe our key competitive strengths include:

    Strong brand name with leading market positions. We believe that the Duff & Phelps brand is well-recognized and associated with independent, trusted advice, knowledge leadership and technical expertise in the fields of finance, valuation, accounting and tax. We have a leading market position for many of the services that we provide. For example, we believe we are the industry's leading independent practice providing purchase price allocation services. Additionally, according to Thomson Financial, in 2006, we were the number two independent provider of fairness opinions (which we define as excluding investment banks that engage in underwriting, capital markets or lending activities) in the world based on the number of opinions delivered, and, according to The Deal, a top ten global provider of restructuring services based on number of assignments.

    Independent provider of financial advisory services. We consider ourselves independent because, among other things, we do not provide our clients with audit or Sarbanes-Oxley Act Section 404 compliance services, and we do not engage in public capital raising, trading, underwriting or lending activities. We believe that our independent and objective perspective is highly valued by our clients in various financial and strategic settings.

    Long-standing, diverse client relationships. We have achieved long-standing client relationships by providing advice on issues involving highly technical and complex assessments of value. We proactively assess the needs of our clients and deliver the full resources of our firm to address their issues, working collaboratively with our clients' other advisors, including law firms and accounting firms, to provide services which these advisors cannot provide either because they lack the expertise or due to conflict issues. We provide services to a diverse base of clients, including public and private companies, investment firms such as private equity firms and hedge funds and professional services firms, such as law firms and public accounting firms. In 2006, 62% of our revenue was derived from repeat engagements with existing clients.

    Broad service offering. We have a broad and well-balanced service offering. Our service offerings span across cyclical, non-cyclical and counter-cyclical activities and provide for revenue diversification through both time-and-materials-based and success-based fee structures. Our broad service offering allows us to better serve our global client base by drawing solutions from our various areas of expertise, reduce our dependence on any one service offering and promote cross-selling of our services and the development of our client service professionals.

    Critical mass of highly qualified and experienced professionals. With over 680 highly qualified and credentialed client service professionals at June 30, 2007, we can execute large and complex advisory assignments that we believe many of our competitors cannot. Many of our client service professionals are regarded as industry leaders, have previously held senior positions at the Big Four (i.e., the four largest accounting firms in the world: Deloitte Touche Tohmatsu; Ernst & Young Global Limited; KPMG International; and PricewaterhouseCoopers International Limited), hold advanced degrees or occupy or have occupied positions on national trade boards and trade associations.

4


    Distinctive, collaborative culture. We have developed a collaborative culture that is based on a team approach which aims to deliver the most appropriate Duff & Phelps client service professionals to meet a client's needs, regardless of the source of the client engagement. Our culture is exemplified by this team approach, the meritocracy under which client service professionals are promoted, the cross-selling of services between our practice groups and the cross-staffing by which client service professionals are encouraged to assist in other areas of client projects outside of their core practice group.

    Global presence. We deliver our services through offices in 21 cities, including six international offices. We believe our ability to operate in an integrated global manner provides us with a competitive advantage over many of our competitors to perform complex engagements that span multiple countries and continents.

    Strong and experienced management team. Our executive officers have an average of approximately 20 years of industry experience. In addition, our executive officers have successfully sourced, executed and integrated several acquisitions, including the hiring of various teams of seasoned professionals from other firms and the CVC and Chanin acquisitions.

Our Growth Strategy

        We intend to expand our business by:

    Expanding services to our existing clients. We intend to use our broad service offering, our leading market positions and our entrenched client relationships to continue penetrating our existing clients. Given the recent CVC and Chanin acquisitions and the recent additions of new business lines, we believe we have a meaningful opportunity to increase revenue through increased penetration of existing clients.

    Expanding our client base. We aim to significantly expand our client base and increase the overall exposure of our firm in the markets we serve. Despite holding market-leading positions in many of our service offerings, we operate in highly fragmented industries and believe there are significant opportunities to serve clients with whom we have no current relationship.

    Expanding our global presence. We believe that the continuing convergence of international and U.S. accounting standards and increasing global M&A activity have created a significant opportunity for global expansion of our services. In addition, we believe we have a significant opportunity to leverage our reputation and capabilities in the U.S. to Europe and Asia. In connection with the Shinsei Investment, we entered into a referral agreement with Shinsei to facilitate the expansion of our business in Asia. Pursuant to the referral agreement, Shinsei will work with us in good faith to develop a strategy to market and sell our financial advisory services in Asia. Further, in addition to our existing offices in Amsterdam and London, over the past year we have opened four international offices in Munich, Paris, Tokyo and Zurich, and at June 30, 2007 had 62 client service professionals in our international locations. We intend to continue our expansion in Europe and Asia in the future.

    Expanding our service offerings. We intend to expand our current capabilities around our core competencies and broaden the scope of our existing services to address the evolving needs of our clients and shifting market conditions. For example, in 2006, given the increasingly global nature of our client base, we invested resources internally to develop a specialty tax business in response to our identification of an underserved area in our Financial Advisory segment.

    Attracting additional highly qualified professionals. We believe our attractive, collaborative culture, differentiated business model, leading market positions and performance-based compensation structure will continue to enable us to attract and retain top client service professionals and provide a platform for career development.

5


    Pursuing strategic acquisitions and alliances. We plan to expand our operations opportunistically through the acquisition of complementary businesses and by establishing strategic alliances.

Our Structure

        In connection with this offering we will effect the Recapitalization Transactions described in "Our Structure" to simplify the capital structure of D&P Acquisitions. Currently, D&P Acquisitions' capital structure consists of seven different classes of membership interests that have different capital accounts and profits interests. The net effect of the Recapitalization Transactions will be to convert the current multiple-class structure into a single-class of membership interests in D&P Acquisitions. Following the Reorganization and Offering and the Shinsei Investment described under "Our Structure," we will be a holding company and our sole asset will be a controlling equity interest in D&P Acquisitions. We will operate and control all of the business and affairs of D&P Acquisitions and its subsidiaries and consolidate the financial results of D&P Acquisitions and its subsidiaries.

Additional Information

        Our principal executive offices are located at 55 East 52nd Street, New York, New York 10055. The telephone number of our principal executive offices is (212) 871-2000, and we maintain a website at www.duffandphelps.com. Information contained on our website does not constitute a part of this prospectus.

6



THE OFFERING

Class A common stock offered by us   8,300,000 shares of Class A common stock
Over-allotment option   1,245,000 shares of Class A common stock
Common stock to be outstanding immediately after this offering   11,675,000 shares of Class A common stock
22,121,965 shares of Class B common stock
Total shares of common stock to be outstanding immediately after this offering   33,796,965 shares of common stock
Voting   One vote per share; Class A and Class B common stock voting together as a single class.
Use of proceeds   We estimate that the net proceeds from the sale of our Class A common stock in this offering, after deducting offering expenses and the underwriting discounts, will be approximately $129.3 million based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. Based on this assumed initial public offering price, we intend to use the proceeds from this offering and the estimated net proceeds of approximately $51.5 million from the Shinsei Investment, (i) to redeem approximately $137.9 million of New Class A Units held by the existing unitholders of D&P Acquisitions, of which approximately $3.9 million will be paid to Noah Gottdiener, our Chairman and Chief Executive Officer, approximately $1.2 million to Gerard Creagh, our President, approximately $0.8 million to Jacob Silverman, our Executive Vice President and Chief Financial Officer, approximately $0.2 million to Brett Marschke, our Executive Vice President and Chief Operating Officer, approximately $0.1 million to Edward Forman, our Executive Vice President, General Counsel, and Secretary and approximately $0.2 million to Harvey Krueger, one of our independent directors and (ii) to repay $42.9 million outstanding borrowings under our credit agreement.
    For further information, see "Use of Proceeds."
Dividend policy   We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
New York Stock Exchange symbol   "DUF"
Risk factors   Please read the section entitled "Risk Factors" for a discussion of some of the factors you should carefully consider before deciding to invest in our Class A common stock.

        References in this section to the number of shares of our common stock to be outstanding after this offering, and the percent of our voting rights held, is based on 33,796,965 shares of our common stock outstanding.

        Unless otherwise indicated, the information presented in this prospectus:

    assumes an initial public offering price of $17.50 per share, the midpoint of the estimated initial public offering price range;

    assumes that the underwriters' option to purchase additional Class A common stock from us to cover over-allotments, if any, is not exercised;

    excludes 6,150,000 shares reserved for future issuance under our 2007 Omnibus Stock Incentive Plan; and

    is based on all vested and unvested New Class A Units. See "Our Structure" for further information regarding our New Class A Units.

7



SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND
OPERATING INFORMATION

        The following summary historical consolidated financial information and other data of D&P Acquisitions and its predecessor should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and notes thereto included elsewhere in this prospectus.

        The summary consolidated statements of operations data for each of the years ended December 31, 2006 and 2005, for the periods from March 15, 2004 through December 31, 2004 and from January 1, 2004 through March 14, 2004, and the summary consolidated balance sheets data at December 31, 2006 and 2005 have been derived from our and our predecessor's audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations data for the six months ended June 30, 2007 and 2006, and the summary consolidated balance sheet data at June 30, 2007 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus.

 
  Successor
  Predecessor
 
 
  Six Months Ended
June 30,

  Year Ended December 31,
  Period from
March 15,
2004 through
December 31,
2004(1)

  Period from
January 1,
2004 through
March 14,
2004(1)

 
Consolidated statements of operations

  2007
  2006
  2006
  2005
 
 
  (in thousands)

 
Revenues:                                      
  Financial Advisory   $ 124,432   $ 85,078   $ 189,486   $ 35,460   $   $  
  Investment Banking     40,131     17,598     57,256     38,466     24,995     3,881  
  Reimbursable expenses     6,058     6,574     12,526     4,313     1,339     272  
   
 
 
 
 
 
 
  Total revenues     170,621     109,250     259,268     78,239     26,334     4,153  

Direct client service costs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Compensation and benefits (including $22,041 and $2,889 of equity-based compensation for the six months ended June 30, 2007 and June 30, 2006, respectively and $10,244 and $2,113 of equity-based compensation for 2006 and 2005, respectively)(2)     110,051     64,098     146,926     44,387     15,545     2,861  
  Other direct client service costs     813     341     1,034     145     267     19  
  Acquisition retention expenses(3)     1,331     4,178     6,003     11,695          
  Reimbursable expenses     6,085     6,339     12,685     4,541     1,339     272  
   
 
 
 
 
 
 
    Total direct client service costs     118,280     74,956     166,648     60,768     17,151     3,152  

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Selling, general and administrative (including $7,798 and $1,298 of equity-based compensation for the six months ended June 30, 2007 and June 30, 2006, respectively and $3,790 and $1,803 of equity-based compensation for 2006 and 2005, respectively)(2)     49,160     30,305     68,606     22,246     5,212     1,466  
  Depreciation and amortization     4,398     4,048     7,702     3,186     1,237     113  
  Merger and acquisition costs(4)                 2,138          
   
 
 
 
 
 
 
    Total operating expenses     53,558     34,353     76,308     27,570     6,449     1,579  
   
 
 
 
 
 
 
Operating income/(loss)     (1,217 )   (59 )   16,312     (10,099 )   2,734     (578 )
    Total other expenses, net     2,550     1,657     5,112     2,066     256     28  
   
 
 
 
 
 
 
Income/(loss) before income tax expense     (3,767 )   1,716     11,200     (12,165 )   2,478     (606 )
Provision/(benefit) for income taxes     946     (27 )   701     330     63     12  
   
 
 
 
 
 
 
Net income/(loss)   $ (4,713 ) $ (1,689 ) $ 10,499   $ (12,495 ) $ 2,415   $ (618 )
   
 
 
 
 
 
 
Other financial data                                      
Adjusted EBITDA(5)   $ 34,351   $ 12,354   $ 44,051   $ 10,836   $ 3,971   $ (465 )
   
 
 
 
 
 
 

8


 
  Six Months Ended
June 30,

  Year Ended December 31,
 
  2007
  2006
  2006
  2005
  2004
Other operating data                            
Number of client service professionals (at period end)                            
  Financial Advisory     588     490     553     425  
  Investment Banking     98     77     118     84   75
   
 
 
 
 
  Total     686     567     671     509   75

Average number of client service professionals for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Financial Advisory     582     460     506     103  
  Investment Banking     104     84     88     93   69
   
 
 
 
 
  Total     686     544     594     196   69

Financial Advisory utilization rate(6)

 

 

69.3

%

 

67.7

%

 

68.1

%

 

71.4

%(7)

Financial Advisory rate per hour(8)   $ 325   $ 293   $ 300   $ 264 (9)
 
   
  As of December 31,
 
 
  As of
June 30,
2007

 
 
  2006
  2005
 
 
  (in thousands)

 
Consolidated balance sheets data                    

Cash and cash equivalents

 

$

42,575

 

$

59,132

 

$

12,134

 
Total assets     273,459     268,031     181,292  
Total debt     77,585     77,997     48,750  
Total liabilities     190,287     174,013     97,176  
Total redeemable units     91,918     91,973     92,053  
Total unitholders' equity/(deficit)     (8,746 )   2,045     (7,937 )
Total stockholders' equity              

(1)
D&P Acquisitions was formed in September 2005. Prior to that date, this financial information represents the operations of Duff & Phelps, LLC. Prior to March 15, 2004, Duff & Phelps, LLC was a majority-owned subsidiary of Webster. Webster owned approximately 73% of Duff & Phelps, LLC's outstanding equity interests. On March 15, 2004, Webster sold its interests in Duff & Phelps, LLC to an investor group consisting of management and Lovell Minnick. That transaction constituted a change of control and required purchase accounting revaluation of Duff & Phelps, LLC's assets and liabilities. Accordingly, this financial information reflects results of operations before and after the impact of the March 15, 2004 transaction.

(2)
The six months ended June 30, 2007 and June 30, 2006 include an aggregate of $24.8 million and $3.6 million, respectively, of equity-based compensation related to one-time grants of equity in connection with the acquisitions of Duff & Phelps, LLC in March 2004, CVC in September 2005 and Chanin in October 2006. During 2006, equity-based compensation reflects liability accounting treatment for our Class C, D and E Units. The years ended December 31, 2006 and 2005 include an aggregate of $12.7 million and $3.9 million, respectively, of equity-based compensation related to one-time grants of equity in connection with the acquisitions of Duff & Phelps, LLC in March 2004, CVC in September 2005 and Chanin in October 2006.

(3)
Reflects expense classified as compensation in connection with deferred payments that we agreed to make to certain employees of CVC in connection with the CVC acquisition in September 2005. The offers of employment to these employees included retention payments of $9.8 million paid in November 2005 and $11.4 million payable in installments of one-third on each of the first three anniversary dates of the CVC acquisition under the condition that the individuals are still employed by us at the anniversary date. We recognize the expenses associated with these payments on a graded-tranche basis, and there will be no further expense associated with these deferred payments after 2008. Retention payments to certain individuals may be accelerated if such individuals are terminated without cause.

(4)
Represents one-time costs associated with the CVC acquisition not otherwise included in acquisition retention expenses. We do not expect to recognize any further CVC acquisition costs after 2006 other than the expenses associated with acquisition retention expenses described in footnote (3) above.

(5)
The Adjusted EBITDA measure presented consists of net income/loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs.

9


(continued)


(5)
We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred recently as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (b) equity-based compensation (a significant portion of which is due to certain one-time grants associated with recent acquisitions as described in footnote (2) above) and (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions.


Given our recent level of acquisition activity and related capital investments and equity grants (which we do not expect to incur at the same levels in the future), and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. A measure substantially similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our senior secured credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income/(loss). Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.


Adjusted EBITDA is a non-GAAP measure that has material limitations because it does not include all items of income and expense that impact or have impacted our operations, including (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisitions retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs. This non-GAAP financial measure in not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating income, net income/(loss), net income/(loss) per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.


The following is a reconciliation of our net income/(loss) to Adjusted EBITDA:

 
  Successor
  Predecessor
 
 
  Six Months Ended June 30,
  Year Ended December 31,
  Period from
March 15,
2004 through
December 31,
2004

  Period from
January 1,
2004 through
March 14,
2004

 
 
  2007
  2006
  2006
  2005
 
 
  (in thousands)

 
Adjusted EBITDA reconciliation                                      
Net income/(loss)   $ (4,713 ) $ (1,689 ) $ 10,499   $ (12,495 ) $ 2,415   $ (618 )
Provision/(benefit) for income taxes     946     (27 )   701     330     63     12  
Interest expense     3,571     2,570     5,911     1,661     299     31  
Interest income     (829 )   (128 )   (556 )   (137 )   (43 )   (3 )
Other (income)/expense     (192 )   (785 )   (243 )   542          
Depreciation and amortization     4,398     4,048     7,702     3,186     1,237     113  
Acquisition retention expenses     1,331     4,178     6,003     11,695          
Equity-based compensation included in "compensation and benefits"     22,041     2,889     10,244     2,113          
Equity-based compensation included in "selling, general and administrative"     7,798     1,298     3,790     1,803          
Merger and acquisition costs                 2,138          
   
 
 
 
 
 
 
Adjusted EBITDA   $ 34,351   $ 12,354   $ 44,051   $ 10,836   $ 3,971   $ (465 )
   
 
 
 
 
 
 
(6)
The utilization rate for any given period is calculated by dividing the number of hours all our Financial Advisory client service professionals worked on client assignments during the period by the total available working hours for all of such client service professionals during the same period, assuming a forty-hour work week, less paid holidays and vacation days.

(7)
Represents utilization rate for all of fiscal 2005 as if the CVC acquisition had occurred on January 1, 2005.

(8)
Average billing rate per hour for any given period is calculated by dividing revenues for the period by the number of hours worked on client assignments during the same period.

(9)
Represents rate per hour for all of fiscal 2005 as if the CVC acquisition had occurred on January 1, 2005.

10



RISK FACTORS

        Investing in our Class A common stock involves a high degree of risk. You should carefully consider the following risks as well as other information contained in this prospectus, including our consolidated financial statements and the notes to those statements before investing in our Class A common stock. The occurrence of any of the following risks could materially and adversely affect our business, prospects, financial condition, results of operations and cash flow, in which case, the trading price of our Class A common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition, results of operations and cash flow.


Risks Related to Our Business

Our business operates in a highly competitive environment where typically there are no long-term contracted sources of revenue and clients can terminate engagements with us at any time

        Our business operates in a highly competitive environment where typically there are no long-term contracted sources of revenue. Each revenue-generating engagement typically is separately solicited, awarded and negotiated. In addition, many businesses do not routinely engage in transactions requiring our services. As a consequence, our fee-paying engagements with many clients are not likely to be predictable and high levels of revenue in one period are not necessarily predictive of continued high levels of revenue in future periods. We also lose clients each year as a result of the sale or merger of a client, a change in a client's senior management, competition from other firms and other causes. As a result, our revenue could decline materially due to such changes in the volume, nature and scope of our engagements.

        Further, many of our engagements depend upon transactions, disputes, or proceedings that involve our clients. Our clients may decide at any time to abandon the transaction, resolve the dispute or proceeding or file for bankruptcy. Our engagements can therefore terminate suddenly and without advance notice to us. If an engagement is terminated unexpectedly, our client service professionals working on the engagement could be underutilized until we assign them to other projects. In addition, because much of our work is project-based rather than recurring in nature, our client service professionals' utilization depends on our ability to secure engagements on a continual basis. Accordingly, the termination or significant reduction in the scope of a single large engagement could have an immediate adverse impact on our revenues and results of operations.

The financial advisory and investment banking industries are highly competitive, and we may not be able to compete effectively

        The financial advisory industry is extremely competitive, highly fragmented and subject to rapid change and we expect it to remain so in the future. The industry includes a large number of participants with a variety of skills and industry expertise, including the consulting practices of major accounting firms, financial consulting firms, technical and economic advisory firms, general management consulting firms, regional and specialty consulting firms and the internal professional resources of organizations. Our competitors vary depending on the particular practice group. In addition, we also expect to continue to face competition from new entrants because the barriers to entry into financial advisory services are relatively low. The principal competitive factors in the financial advisory market include firm and professional reputations, client and referral source relationships, the ability to attract and retain top professionals, the ability to manage engagements effectively and the ability to be responsive and provide high quality services. There is also competition on price. Many of our competitors have greater national and international presences, as well as significantly greater personnel, financial, technical and marketing resources. In addition, these competitors may generate greater revenues and have greater name recognition than we do. If we are unable to compete successfully with our existing competitors or with any new competitors, our financial results will be adversely affected.

11



        Further, in connection with our acquisition of the CVC business, we entered into a non-competition agreement with PwC, which prohibited PwC from offering certain services that are currently offered by us. This non-competition agreement terminated in the third quarter of 2006. It is difficult to predict the effect, if any, on our business, of PwC's reentry into the marketplace. Given the relatively short period of time that has transpired since the expiration of the non-competition agreement, it is unclear to us to what extent PwC will devote its resources to its reentry into the valuation advisory marketplace and the level of success PwC may have in this marketplace. Should PwC be successful in reentering the valuation advisory marketplace, such reentry could have a material impact on our business.

        The investment banking industry is extremely competitive and we expect it to remain so in the future. Most of our competitors in the investment banking industry have a greater range of products and services, greater financial and marketing resources, larger customer bases, greater name recognition, more managing directors to serve their clients' needs, greater global reach and more established relationships with their customers than we have. These larger and better capitalized competitors may be better able to respond to changes in the investment banking market, to compete for skilled professionals, to finance acquisitions, to fund internal growth and to compete for market share generally. In particular, the ability to provide financing as well as advisory services has become an important advantage for some of our larger competitors, and because we are unable to provide such financing we may be unable to compete for advisory clients in a significant part of the investment banking market.

Our inability to hire and retain talented people in an industry where there is great competition for talent could have a serious negative effect on our prospects and results of operations

        Our business involves the delivery of professional services and is highly labor-intensive. Our performance is largely dependent on the talents and efforts of highly skilled individuals. Competition for qualified professionals in the financial advisory and investment banking industries is intense. Our continued ability to compete effectively in our business depends on our ability to attract new professionals and to retain and motivate our existing professionals. The loss of a significant number of our professionals or the inability to attract, hire, develop, train and retain additional skilled personnel could have a serious negative effect on us, including our ability to manage, staff and successfully complete our existing engagements and obtain new engagements. Increasing competition for these individuals may also significantly increase our labor costs, which could negatively affect our margins and results of operations.

Our inability to retain our senior management team and other key personnel would be detrimental to our business

        We rely heavily on our senior management team and other key personnel, and our ability to retain them is particularly important to our business. Given the highly specialized nature of our services, these people must have a thorough understanding of our service offerings as well as the skills and experience necessary to manage an organization consisting of a diverse group of professionals. In addition, we rely on our senior management team and other key personnel to generate and market our business. Many of our key personnel do not have employment contracts with us. Any of our key personnel, including those with written employment contracts, may voluntarily terminate his or her employment with us. If one or more members of our senior management team or our other managing directors leave and we cannot replace them with a suitable candidate quickly, we could experience difficulty in securing and successfully completing engagements and managing our business properly, which could harm our business prospects and results of operations. In addition, the loss of these personnel could jeopardize our relationships with clients and result in the loss of client engagements.

12


Declines in the global financial markets may materially and adversely affect our business

        As a financial advisory and investment banking firm, our business segments are materially affected by conditions in the global financial markets and economic conditions throughout the world. For example, revenue generated by our M&A advisory, transaction opinions and purchase price allocation practice groups is directly related to the volume and value of the M&A transactions for which we provide service. During periods of unfavorable market or economic conditions, the volume and value of M&A transactions may decrease, thereby reducing the demand for our services and increasing price competition among financial advisory firms seeking such engagements. Our results of operations would be adversely affected by any such reduction in the volume or value of M&A transactions. Our profitability could also be adversely affected by our fixed costs and the possibility that we would be unable to scale back other costs within a time frame sufficient to match any decreases in revenue relating to changes in market and economic conditions. The future market and economic climate may deteriorate because of many factors beyond our control, and any one of these factors may cause a substantial decline in the global financial services markets, which could potentially result in reduced demand for our services. These factors include, among other things, economic and political conditions in the United States and elsewhere in the world, wavering corporate/consumer confidence levels, the availability of cash for investment by mutual funds and other institutional as well as retail investors, and legislative and regulatory changes. Beginning in July 2007, there has been a significant disruption in world financial markets, principally in the credit markets, which has impacted M&A activity, particularly among private equity buyers. If this disruption continues, it could adversely affect our results of operations in future periods.

Revenues from our success-based engagements are difficult to predict, and the timing and extent of recovery of our costs is uncertain

        From time to time, primarily in our Investment Banking segment, we enter into engagement agreements under which our fees include a significant success-based component. Success-based fees are contingent on the achievement of certain goals, such as the successful completion of a transaction or restructuring. In many cases we are not paid for advisory engagements that do not result in the successful consummation of a transaction or restructuring, other than the reimbursement of certain out-of-pocket expenses and, in some cases, a modest retainer. The achievement of these contractually-defined goals is often impacted by factors outside of our control, such as market conditions and the decisions and actions of our clients and interested third parties. For example, a client could delay or terminate an acquisition transaction because of a failure to agree upon final terms with the counterparty, failure to obtain necessary regulatory consents or board or shareholder approvals, failure to secure necessary financing, adverse market conditions or because the target's business is experiencing unexpected financial problems. Anticipated bidders for assets of a client during a restructuring transaction may not materialize or our client may not be able to restructure its operations or indebtedness due to a failure to reach agreement with its principal creditors. In many of these circumstances, we do not receive any advisory fees, other than the reimbursement of certain out-of-pocket expenses and, in some cases, a modest retainer. Because success-based fees are contingent, revenues on such engagements, which are recognized when all revenue recognition criteria are met, are not certain and the timing of receipt is difficult to predict and may not occur evenly throughout the year. We intend to continue to enter into success-based fee arrangements and these engagements could impact our revenues to a greater extent in the future. Should success-based fee arrangements represent a greater percentage of our business in the future, we may experience increased volatility in our working capital requirements and greater variations in our quarter-to-quarter results, which could affect the price of our Class A common stock.

13



Our financial results could suffer if we are unable to achieve or maintain adequate utilization and suitable billing rates for our client service professionals

        Our profitability depends to a large extent on the utilization and billing rates of our client service professionals in our Financial Advisory segment. Utilization of our client service professionals is affected by a number of factors, including, among other things, the number and size of client engagements, the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable, our ability to transition our client service professionals efficiently from completed engagements to new engagements, the hiring of additional client service professionals (because there is generally a transition period for new client service professionals that may result in a temporary drop in our utilization rate, which may be the result of restrictions imposed by non-compete or other similar agreements with the professional's former employer), unanticipated changes in the scope of client engagements, our ability to forecast demand for our services and thereby maintain an appropriate level of client service professionals, and conditions affecting the industries in which we practice as well as general economic conditions.

        The billing rates of our client service professionals in our Financial Advisory segment are also affected by a number of factors, including, among other things, our clients' perception of our ability to add value through our services, the market demand for the services we provide, introduction of new services by us or our competitors, the pricing policies of our competitors and general economic conditions.

        If we are unable to achieve and maintain adequate overall utilization as well as maintain or increase the billing rates for our professionals, our financial results could materially suffer.

The profitability of our fixed-fee engagements with clients may not meet our expectations if we underestimate the cost of these engagements

        When making proposals for fixed-fee engagements, we estimate the costs and timing for completing the engagements. These estimates reflect our best judgment regarding the efficiencies of our methodologies and client service professionals as we plan to deploy them on engagements. Any increased or unexpected costs or unanticipated delays in connection with the performance of fixed-fee engagements, including delays caused by factors outside our control, could make these contracts less profitable or unprofitable, which would have an adverse effect on our profit margin.

Fees earned in connection with assignments in the bankruptcy context may be subject to challenge and reduction

        From time to time we advise debtors or creditors of companies which are involved in bankruptcy proceedings in the United States Bankruptcy Courts. Under the applicable rules of those courts, our fees are subject to approval by the court and other interested parties have the ability to challenge the payment of those fees. Fees earned and reflected in our revenues may from time to time be subject to successful challenges, which could result in a reduction of revenues and affect our stock price adversely.

We have incurred losses and may incur losses in the future, which may impact our ability to implement our business strategy and adversely affect our financial condition

        We incurred a net loss for the six months ended June 30, 2007 and for the year ended December 31, 2005. We cannot assure you that we will be profitable or generate sufficient profits from operations in the future. We may experience a loss in one or more future periods, which may impact our ability to implement our business strategy and adversely affect our financial condition.

Fluctuations in our quarterly revenues and results of operations could depress the market price of our common stock

        We may experience significant fluctuations in our revenues and results of operations from one quarter to the next. If our revenues or net income in a quarter fall below the expectations of securities

14



analysts or investors, the market price of our Class A common stock could fall significantly. Our results of operations in any quarter can fluctuate for many reasons, including the number, scope, and timing of ongoing client engagements, the extent to which we can reassign our client service professionals efficiently from one engagement to the next, the extent to which our client service professionals take holiday, vacation, and sick time, hiring, the extent of fee discounting or cost overruns, and other factors affecting productivity and collectibility of receivables and unbilled work in process.

        Because we generate a substantial portion of our revenues from advisory services that we provide on a time-and-materials basis, our revenues in any period are directly related to the number of our client service professionals, their billing rates, and the number of billable hours they work in that period. We have a limited ability to increase any of these factors in the short term. Accordingly, if we underutilize our client service professionals during one part of a fiscal period, we may be unable to compensate by augmenting revenues during another part of that period. In addition, we are occasionally unable to fully utilize any additional client service professionals that we hire, particularly in the quarter in which we hire them. Moreover, a significant majority of our operating expenses, primarily office rent and salaries, are fixed in the short term. As a result, if our revenues fail to meet our projections in any quarter, that could have a disproportionate adverse effect on our net income. For these reasons, we believe our historical results of operations are not necessarily indicative of our future performance.

Our clients may be unable to pay us for our services

        Our clients include some companies that may from time to time encounter financial difficulties. If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us. The bankruptcy of a client with a substantial account receivable could have a material adverse effect on our financial condition and results of operations. In addition, if a client declares bankruptcy after paying us certain invoices, a court may determine that we are not properly entitled to that payment and may require repayment of some or all of the amount we received, which could adversely affect our financial condition and results of operations.

Potential conflicts of interest may preclude us from accepting some engagements

        We provide our services primarily in connection with significant or complex transactions, disputes, or other matters that usually involve sensitive client information or are adversarial. Our engagement by a client may preclude us from accepting engagements with the client's competitors or adversaries because of conflicts, or perceived conflicts, between their business interests or positions on disputed issues or other reasons. Accordingly, the nature of our business limits the number of both potential clients and potential engagements. Moreover, in many industries in which we provide services, there has been a continuing trend toward business consolidations and strategic alliances. These consolidations and alliances reduce the number of potential clients for our services and increase the chances that we will be unable to continue some of our ongoing engagements or accept new engagements as a result of actual or perceived conflicts of interest.

Our ability to maintain and attract new business depends upon our reputation, the professional reputation of our client service professionals and the quality of our services

        As a professional services firm, our ability to secure new engagements depends heavily upon our reputation and the individual reputations of our client service professionals. Any factor that diminishes our reputation or that of our client service professionals, including not meeting client expectations or misconduct by our client service professionals, could make it substantially more difficult for us to attract new engagements and clients. Similarly, because we obtain many of our new engagements from former or current clients or from referrals by those clients or by law, accounting or investment banking firms with whom we have worked in the past, any client that questions the quality of our work or that

15



of our client service professionals could impair our ability to secure additional new engagements and clients.

Our intellectual property rights in our "Duff & Phelps" name are important, and any inability to use that name could negatively impact our ability to build brand identity

        We believe that establishing, maintaining and enhancing the "Duff & Phelps" name is important to our business. Pursuant to a name use agreement between us and Phoenix Duff & Phelps Corporation, a subsidiary of Phoenix Life Insurance Company, we have the perpetual exclusive right to use the Duff & Phelps name in connection with capital raising, M&A services, corporate valuations, fairness opinions, strategic financial consulting, capital adequacy opinions and certain other investment banking businesses. It is possible that we and Phoenix Duff & Phelps Corporation could disagree on whether certain types of our businesses are covered by the name use agreement. If Phoenix Duff & Phelps Corporation were to successfully challenge our right to use our name, or if we were unable to prevent a competitor from using a name that is similar to our name, our ability to build brand identity could be negatively impacted. In addition, if Phoenix Duff & Phelps Corporation is involved in any misconduct or illegal act, our reputation could be negatively impacted.

Our engagements could result in professional liability, which could be very costly and hurt our reputation

        Our engagements typically involve complex analysis and the exercise of professional judgment. As a result, we are subject to the risk of professional liability. If a client questions the quality of our work, the client could threaten or bring a lawsuit to recover damages or contest its obligation to pay our fees. Litigation alleging that we performed negligently or breached any other obligations to a client could expose us to significant legal liabilities and, regardless of outcome, is often very costly, could distract our management and could damage our reputation. In addition, third parties may allege reliance on our work which could expose us to additional lawsuits and potential liability. We are not always able to include provisions in our engagement agreements that are designed to limit our exposure to legal claims relating to our services. Even if these limiting provisions are included in an engagement agreement, they may not protect us or may not be enforceable under some circumstances. In addition, we carry professional liability insurance to cover many of these types of claims, but the policy limits and the breadth of coverage may be inadequate to cover any particular claim or all claims plus the cost of legal defense. For example, we provide services on engagements in which the impact on a client may substantially exceed the limits of our professional liability coverage. If we are found to have professional liability with respect to work performed on such an engagement, we may not have sufficient insurance to cover the entire liability.

If the number of debt defaults, bankruptcies or other factors affecting demand for our restructuring advisory services declines, or we lose business to new entrants into the restructuring advisory business that are no longer precluded from offering such services due to changes to the U.S. Bankruptcy Code, our restructuring advisory business' revenue could suffer

        We provide various financial restructuring and related advice to companies in financial distress or to their creditors or other stakeholders. A number of factors affect demand for these advisory services, including general economic conditions, the availability and cost of debt and equity financing and changes to laws, rules and regulations, including deregulation or privatization of particular industries and those that protect creditors.

        Section 327 of the U.S. Bankruptcy Code, which requires that a "disinterested person" be employed in a restructuring, has been modified pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The "disinterested person" definition of the U.S. Bankruptcy Code had historically disqualified certain of our competitors, but had not often disqualified us from obtaining a role in restructurings because we are not an underwriter of securities or lender. However, the 2005 amendment to the "disinterested person" definition allows underwriters of securities to compete for restructuring engagements, as well as for the recruitment and retention of restructuring professionals. If

16



our competitors are retained in new restructuring engagements, our restructuring advisory business, and thereby our results of operations, could be adversely affected.

Legal and regulatory restrictions on our clients may reduce the demand for our services

        New laws or regulations or changes in enforcement of existing laws or regulations applicable to our clients may adversely affect our businesses. For example, changes in antitrust enforcement could affect the level of M&A activity and changes in regulation could restrict the activities of our clients and their need for the types of advisory services that we provide to them.

Changes in laws, regulations or accounting standards may adversely affect our business

        As an independent financial advisory firm, we have benefited from the enactment of the Sarbanes-Oxley Act, which substantially limits the scope of non-audit services that public accounting firms, such as the Big Four, can provide to their audit clients. Additionally, we have benefited from increased sensitivity among investors, managers and boards to auditor conflicts, which we believe has limited the engagement of public accounting firms to perform even permissible non-audit services. However, changes in the federal securities laws, changes in judicial interpretations of these laws or less vigorous enforcement of these laws, as a result of changes in political appointments or priorities or for other reasons, or reduced sensitivity among investors, managers and boards to auditor conflicts, could substantially reduce the limitations on public accounting firms to provide non-audit services, including the services that we provide or may provide in the future. Increased competition from accounting firms could materially adversely affect our financial condition and results of operations. Conversely, it is possible that increased sensitivity among investors or changes in regulations could lead to limits that would adversely impact us by creating real or perceived "conflicts" among the various services we provide to our clients.

        Further, the demand for a substantial portion of our business is generated by financial reporting requirements under U.S. Generally Accepted Accounting Principles ("GAAP") or International Financial Reporting Standards ("IFRS"). For example, the demand for our purchase price allocation services is primarily driven by the requirement under Statement of Financial Accounting Standards ("SFAS") 141 that, in a business combination, the acquiring company allocates the purchase price to individual tangible assets as well as intangible assets and liabilities, based on fair value. Therefore, the demand for our services could decrease as a result of any future changes in accounting standards and our financial condition and results of operation could be materially adversely affected by any future changes in accounting standards.

We are subject to extensive regulation in the financial services industry

        We participate in the financial services industry, and are subject to extensive regulation in the United States and elsewhere. Duff & Phelps Securities, LLC, our subsidiary through which we provide our M&A advisory services, is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") and is a member firm of the National Association of Securities Dealers ("NASD"). Accordingly, the conduct and activities of Duff & Phelps Securities, LLC are subject to the rules and regulations of, and oversight by the SEC, the NASD, and other self-regulatory organizations which are themselves subject to oversight by the SEC. State securities regulators also have regulatory or oversight authority over Duff & Phelps Securities, LLC. Duff & Phelps Securities, Ltd., our subsidiary, is in the process of applying for registration with the Financial Services Authority in the United Kingdom. Our business may also be subject to regulation by non-U.S. governmental and regulatory bodies and self-regulatory authorities in other countries where we operate. We face the risk of significant intervention by regulatory authorities in all jurisdictions in which we conduct our business. Among other things, we could be fined, prohibited from engaging in some of our business activities or subject to limitations or conditions on our business activities. In addition, as a result of highly publicized financial scandals, the environment in which we operate may be subject to further regulation. New laws or regulations or changes in the enforcement of existing laws or regulations applicable to our

17



clients may also adversely affect our business. See "—Legal and regulatory restrictions on our clients may reduce the demand for our services" and "Business—Regulation."

Our operations and infrastructure may malfunction or fail

        Our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located. This may include a disruption involving electrical, communications, transportation or other services used by us or third parties with or through whom we conduct business, whether due to human error, natural disasters, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism, acts of terrorism or war or otherwise. We do not have fully redundant systems, and our disaster recovery plan does not include restoration of all services. Nearly all of our personnel in our primary locations work in close proximity to each other. If a disruption occurs in one location and our personnel in that location are unable to communicate with or travel to other locations, our ability to service and interact with our clients and customers may suffer and we may not be able to implement successfully contingency plans that depend on communication or travel.

        Our operations also rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks. Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious events that could have a security impact. If one or more of such events occur, this could jeopardize our or our clients' or counterparties' confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our clients', our counterparties' or third parties' operations. We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us.

Our historical financial information may not be comparable to our results for future periods

        The historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial position and cash flows. For example, our historical financial data does not reflect the CVC acquisition or the Chanin acquisition prior to the dates of such acquisitions.

Acquisitions may disrupt our operations or adversely affect our results

        We regularly evaluate opportunities to acquire other businesses. The expenses we incur evaluating and pursuing acquisitions could have a material adverse effect on our results of operations. If we acquire a business, such as our recent acquisitions of CVC and Chanin, we may be unable to manage it profitably or successfully integrate its operations with our own. Moreover, we may be unable to realize the financial, operational, and other benefits we anticipate from acquisitions. Competition for future acquisition opportunities in our markets could increase the price we pay for businesses we acquire and could reduce the number of potential acquisition targets. Further, acquisitions may involve a number of special financial and business risks, including expenses related to any potential acquisition from which we may withdraw, diversion of our management's time, attention, and resources, decreased utilization during the integration process, loss of key acquired personnel, difficulties in integrating diverse corporate cultures, increased costs to improve or coordinate managerial, operational, financial, and administrative systems including compliance with the Sarbanes-Oxley Act, dilutive issuances of equity securities, including convertible debt securities, the assumption of legal liabilities, amortization of acquired intangible assets, potential write-offs related to the impairment of goodwill, and additional conflicts of interest.

18



If we are unable to manage the growth of our business successfully, we may not be able to sustain profitability

        We have grown significantly in recent years, increasing the number of our client service professionals from 75 at December 31, 2004 to over 680 at June 30, 2007. As we continue to increase the number of our client service professionals, we may not be able to successfully manage a significantly larger workforce. Additionally, our significant growth has placed demands on our management and our internal systems, procedures and controls and will continue to do so in the future. To successfully manage growth, we must add administrative staff and periodically update and strengthen our operating, financial, accounting and other systems, procedures and controls, which will increase our costs and could adversely affect our profitability if we do not generate increased revenues to offset the costs.

Expanding our service offerings or number of offices may not be profitable and our failure to manage expansion successfully could adversely affect our revenues and results of operations

        We may choose to develop new service offerings or open new offices because of market opportunities or client demands. Developing new service offerings involves inherent risks, including our inability to estimate demand for the new service offerings, competition from more established market participants, a lack of market understanding, and unanticipated expenses to recruit and hire qualified client service professionals and to market and provide our new service offerings.

        In addition, expanding into new geographic areas and/or expanding current service offerings is challenging and may require integrating new client service professionals into our culture as well as assessing the demand in the applicable market. Expansion creates new and increased management and training responsibilities for our professionals. Expansion also increases the demands on our internal systems, procedures, and controls, and on our managerial, administrative, financial, marketing, and other resources. New responsibilities and demands may adversely affect the overall quality of our work. If we cannot manage the risks associated with new service offerings or new locations effectively, we are unlikely to be successful in these efforts, which could harm our ability to sustain profitability and our business prospects.

Our international operations create special risks

        We intend to continue our international expansion, and our international revenues could account for an increasing portion of our revenues in the future. Our international operations carry special financial and business risks, including greater difficulties in managing and staffing foreign operations, cultural differences that result in lower utilization, currency fluctuations that adversely affect our financial position and operating results, unexpected changes in trading policies, regulatory requirements, tariffs and other barriers, greater difficulties in collecting accounts receivable, longer sales cycles, restrictions on the repatriation of earnings, potentially adverse tax consequences, such as trapped foreign losses, less stable political and economic environments, and civil disturbances or other catastrophic events that reduce business activity. If our international revenues increase relative to our total revenues, these factors could have a more pronounced effect on our operating results.

Employee misconduct could harm us and is difficult to detect and deter

        There have been a number of highly publicized cases involving fraud or other misconduct by employees in the financial services industry in recent years and we run the risk that employee misconduct could occur at our company. For example, misconduct by employees could involve the improper use or disclosure of confidential information, which could result in regulatory sanctions and serious reputational or financial harm. Our business often requires that we deal with confidences of the greatest significance to our clients, the improper use of which may have a material adverse impact on our clients. It is not always possible to deter employee misconduct and the precautions we take to detect and prevent this activity may not be effective in all cases. Any breach of our clients' confidences as a result of employee misconduct could impair our ability to attract and retain clients.

19



Risks Related to Our Organization and Structure

Our only material asset after completion of this offering will be our interest in D&P Acquisitions, and we are accordingly dependent upon distributions from D&P Acquisitions to pay dividends, if any, taxes and other expenses

        Duff & Phelps Corporation will be a holding company and will have no material assets other than its ownership of New Class A Units. Duff & Phelps Corporation has no independent means of generating revenue. We intend to cause D&P Acquisitions to make distributions to its unitholders in an amount sufficient to cover all applicable taxes payable and dividends, if any, declared by us. To the extent that we need funds, and D&P Acquisitions is restricted from making such distributions under applicable law or regulation, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.

Duff & Phelps Corporation is controlled by the existing unitholders of D&P Acquisitions, whose interests may differ from those of our public shareholders

        Immediately following this offering and the application of net proceeds from this offering, the existing unitholders of D&P Acquisitions will control approximately 65.5% of the combined voting power of our Class A and Class B common stock. Accordingly, the existing unitholders of D&P Acquisitions, if voting in the same manner, will have the ability to elect all of the members of our board of directors, and thereby to control our management and affairs. In addition, they will be able to determine the outcome of all matters requiring shareholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors, and could preclude any unsolicited acquisition of our company.

        In addition, immediately following this offering and the application of net proceeds from this offering, the existing unitholders of D&P Acquisitions will own 65.5% of the New Class A Units. Because they hold their ownership interest in our business through D&P Acquisitions, rather than through the public company, these existing unitholders may have conflicting interests with holders of our Class A common stock. For example, the existing unitholders of D&P Acquisitions may have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, and whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the tax receivable agreement. In addition, the structuring of future transactions may take into consideration these existing unitholders' tax considerations even where no similar benefit would accrue to us. See "Related Party Transactions—Tax Receivable Agreement."

We will be required to pay the existing unitholders of D&P Acquisitions for certain tax benefits we may claim arising in connection with this offering and related transactions

        On the date of this offering, we will be treated for U.S. federal income tax purposes as having directly purchased membership interests in D&P Acquisitions from the existing unitholders. In the future, additional New Class A units may be exchanged (as described in "Related Party Transactions—Tax Receivable Agreement") for shares of our Class A common stock. As a result of both this initial purchase and these additional exchanges of units, we will become entitled to a proportionate share of D&P Acquisitions' existing tax basis for its assets, and we will also become entitled to certain tax basis adjustments reflecting the difference between the price we pay to acquire those units and that proportionate share. As a result, the amount of tax that we would otherwise be required to pay in the future may be reduced, although the Internal Revenue Service ("IRS") may challenge all or part of that tax basis adjustment, and a court could sustain such a challenge.

        We intend to enter into a tax receivable agreement with the existing unitholders of D&P Acquisitions that will provide for the payment by us to them of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize as a result of (i) D&P Acquisitions' tax basis in its goodwill and similar intangible assets on the date of this offering, including any portion of that tax basis arising from its liabilities on the date of this offering, and (ii) the tax basis adjustments referred to above. While the actual amount of the adjusted tax basis, as well as the amount

20



and timing of any payments under this agreement will vary depending upon a number of factors, including the basis of our proportionate share of D&P Acquisitions' assets on the dates of exchanges, the timing of exchanges, the price of shares of our Class A common stock at the time of each exchange, the extent to which such exchanges are taxable, the deductions and other adjustments to taxable income to which D&P Acquisitions is entitled, the amount of liabilities of D&P Acquisitions in existence on the date of this offering, and the amount and timing of our income, we expect that during the anticipated term of the tax receivable agreement, the payments that we may make to the existing unitholders of D&P Acquisitions could be substantial. Payments under the tax receivable agreement will give rise to additional tax benefits and therefore to additional potential payments under the tax receivable agreement. In addition, the tax receivable agreement will provide for interest accrued from the due date (without extensions) of the corresponding tax return to the date of payment under the agreement.

        Were the IRS to challenge a tax basis adjustment, or other deductions or adjustments to taxable income of D&P Acquisitions, the existing unitholders of D&P Acquisitions will not reimburse us for any payments that may previously have been made under the tax receivable agreement, except that excess payments made to an existing unitholder are netted against payments otherwise to be made, if any, after our determination of such excess. As a result, in certain circumstances we could make payments to the existing unitholders of D&P Acquisitions under the tax receivable agreement in excess of our cash tax savings. Our ability to achieve benefits from any tax basis adjustment, or other deductions or adjustments to taxable income of D&P Acquisitions, and the payments to be made under this agreement, will depend upon a number of factors, as discussed above, including the timing and amount of our future income.

Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities identified by Lovell Minnick and Vestar

        Lovell Minnick and Vestar and their affiliates are in the business of providing buyout capital and growth capital to developing companies, and may acquire interests in businesses that directly or indirectly compete with certain portions of our business. Our amended and restated certificate of incorporation provides for the allocation of certain corporate opportunities between us, on the one hand, and Lovell Minnick and Vestar, on the other hand. As set forth in our amended and restated certificate of incorporation, neither Lovell Minnick nor Vestar, nor any director, officer, stockholder, member, manager or employee of Lovell Minnick or Vestar has any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Therefore, a director or officer of our company who also serves as a director, officer, member, manager or employee of Lovell Minnick or Vestar may pursue certain acquisition opportunities that may be complementary to our business and, as a result, such acquisition opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations or prospects if attractive corporate opportunities are allocated by Lovell Minnick or Vestar to themselves or their other affiliates instead of to us. The terms of our amended and restated certificate of incorporation are more fully described in "Description of Capital Stock."


Risks Related To This Offering

An active market for our Class A common stock may not develop

        Our Class A common stock has been approved for listing on the New York Stock Exchange under the symbol "DUF." However, we cannot assure you that a regular trading market of our Class A common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our Class A common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your Class A common stock when desired, or at all, or the prices that you may obtain for your Class A common stock.

21



The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our shareholders

        Even if an active trading market develops, the market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class A common stock may fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, you may be unable to sell your Class A common stock at or above your purchase price, if at all. We cannot assure you that the market price of our Class A common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: variations in our quarterly operating results; failure to meet our earnings estimates; publication of research reports about us or the investment management industry or the failure of securities analysts to cover our Class A common stock after this offering; additions or departures of our executive officers and other key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; changes in market valuations of similar companies; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; adverse publicity about the financial advisory industry generally or individual scandals, specifically; and general market and economic conditions.

Our Class A common stock price may decline due to the large number of shares eligible for future sale and for exchange into Class A common stock

        The market price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. After the consummation of this offering and the Shinsei Investment, we will have 33,796,965 shares of outstanding Class A common stock on a fully diluted basis, assuming that all the New Class A Units outstanding after giving effect to the Reorganization and Offering described under "Our Structure," excluding those held by us, are exchanged into shares of our Class A common stock.

        In connection with this offering, the existing unitholders of D&P Acquisitions will enter into an Exchange Agreement with D&P Acquisitions under which, from time to time, typically once a quarter, they will have the right to exchange with D&P Acquisitions their New Class A Units for shares of our Class A common stock on a one-for-one basis, subject to notice requirements and minimum retained ownership requirements, and subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The Exchange Agreement generally provides that (i) certain of our existing unitholders, including Vestar and Lovell Minnick, may elect to exchange with D&P Acquisitions 100% of their New Class A Units into shares of our Class A common stock after the 180-day lock-up period following the date of this prospectus (unless extended as provided in the Exchange Agreement); (ii) our executive unitholders may elect to exchange with D&P Acquisitions up to 20% of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, 40% of such New Class A Units after the second anniversary of this offering, 60% of such New Class A Units after the third anniversary of this offering, and 100% of such New Class A Units after the fourth anniversary of this offering, subject to the notice requirement; and (iii) our non-executive unitholders may elect to exchange with D&P Acquisitions up to one-third of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, two-thirds of such New Class A Units after the second anniversary of this offering, and 100% of such New Class A Units after the third anniversary of this offering, subject to the notice requirements. See "Related Party Transactions—Exchange Agreement." As a result of the Reorganization and Offering and the Shinsei Investment described under "Our Structure," immediately following this offering and the application of net proceeds from this offering and the Shinsei Investment, the existing unitholders of D&P

22



Acquisitions will beneficially own 22,121,965 New Class A Units, all of which will be potentially exchangeable with D&P Acquisitions for shares of our Class A common stock. These shares of Class A common stock and the shares of Class A common stock purchased by Shinsei in the Shinsei Investment, would be "restricted securities," as defined in Rule 144 of the Securities Act of 1933, as amended ("Rule 144"). However, effective upon consummation of this offering, we will enter into a registration rights agreement with certain unitholders of D&P Acquisitions and Shinsei that would require us, under certain circumstances, to register under the Securities Act of 1933, as amended ("Securities Act") these shares of Class A common stock. See "Related Party Transactions—Registration Rights Agreement" and "Shares Eligible for Future Sale."

        We and each of the existing unitholders of D&P Acquisitions who is a party to the Exchange Agreement have agreed with the underwriters not to sell, otherwise dispose of or hedge any of our Class A common stock, subject to specified exceptions, during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman, Sachs & Co. and UBS Securities LLC. Subject to these agreements, we may issue and sell in the future additional Class A common stock. In addition, after the expiration of the 180-day lock-up period, the shares of Class A common stock issuable upon exchange of the New Class A Units will be eligible for resale from time to time, subject to certain contractual and Securities Act restrictions. Further, subject to the approval of our compensation committee, we expect to grant to certain of our professionals (including our executive officers) options to purchase approximately 2.1 million shares of our Class A common stock in the aggregate pursuant to the 2007 Omnibus Stock Incentive Plan at the time of this offering. None of these stock options will be fully vested and will vest at various times pursuant to the schedule contained in each grant agreement.

Investors in this offering will suffer immediate and substantial dilution

        The initial public offering price per share of Class A common stock will be substantially higher than our pro forma net tangible book value per share immediately after this offering. As a result, you will pay a price per Class A share that substantially exceeds the book value of our assets after subtracting our liabilities. At an offering price of $17.50 per share, the mid-point of the range set forth on the cover of this prospectus, you will incur immediate and substantial dilution in an amount of $16.77 per share of Class A common stock. See "Dilution."

Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control

        Our certificate of incorporation and by-laws may delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting our board of directors to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations, and placing limitations on convening stockholder meetings. In addition, we are subject to provisions of the Delaware General Corporation Law that restrict certain business combinations with interested stockholders. These provisions may also discourage acquisition proposals or delay or prevent a change in control, which could harm our stock price. See "Description of Capital Stock."

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members

        As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), the Sarbanes-Oxley Act and the New York Stock Exchange rules promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In

23



order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations. We will need to hire more staff to comply with these requirements, which will increase our costs.

        These rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our board of directors. Additionally, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

24



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        Some of the statements under "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and elsewhere in this prospectus may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. We generally identify forward looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of those words or other comparable words. Any forward-looking statements contained in this prospectus are based upon the historical performance of us and our subsidiaries and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

25




OUR STRUCTURE

        The diagram below depicts our organizational structure immediately after the consummation of this offering and related transactions.

GRAPHIC

Recapitalization Transactions

        Immediately prior to this offering, D&P Acquisitions will effectuate certain transactions, which we collectively refer to as the "Recapitalization Transactions," intended to simplify the capital structure of D&P Acquisitions. Currently, D&P Acquisitions' capital structure consists of seven different classes of membership interests (Classes A through G), each of which has different capital accounts and amounts of aggregate distributions above which its holders share in future distributions. The net effect of the Recapitalization Transactions will be to convert the current multiple-class structure into a single new class of units called "New Class A Units." The conversion of all of the different classes of units of D&P Acquisitions will be in accordance with conversion ratios for each class of outstanding units based upon the liquidation value of D&P Acquisitions, as if it was liquidated upon this offering, with such value determined by the initial public offering price of the Class A common stock sold in this offering. The distribution of New Class A Units per class of outstanding units will be determined pursuant to the distribution provisions set forth in D&P Acquisitions' Second Amended and Restated Limited Liability Company Agreement, dated October 31, 2006. Upon completion of the Recapitalization

26



Transactions and after the redemptions have been made with the proceeds from this offering, there will be approximately 33,796,965 New Class A Units issued and outstanding. We refer to the contribution of certain of the net proceeds from this offering to D&P Acquisitions and the redemptions to be made with such proceeds collectively as the "Redemption." See "Shares Eligible for Future Sales" for a discussion of vesting provisions.

        In connection with the Recapitalization Transactions, we have entered into an agreement with the existing unitholders of D&P Acquisitions, pursuant to which certain unaffiliated unitholders have elected to have up to 100% of the New Class A Units held by them immediately prior to this offering redeemed by D&P Acquisitions upon consummation of this offering. Such unaffiliated unitholders held 6.2%, in the aggregate, of the membership interests of D&P Acquisitions immediately prior to this offering. In addition, in accordance with the Recapitalization Transactions, most of the other unitholders of D&P Acquisitions elected to have up to 10% (or 15% if the underwriters exercise in full their over-allotment option to purchase additional shares) of the New Class A Units held by them immediately prior to this offering redeemed by D&P Acquisitions upon consummation of this offering. In addition, we are redeeming those units that have a liquidation preference of approximately $94.5 million that are held by certain of our unitholders, including Lovell Minnick, Vestar, Noah Gottdiener, Jacob Silverman and Harvey Krueger. After the Redemption, there will be 22,121,965 New Class A Units held by the existing unitholders outstanding, 6,963,591 of which will be subject to vesting provisions.

Incorporation of Duff & Phelps Corporation

        Duff & Phelps Corporation was incorporated as a Delaware corporation on April 23, 2007. Duff & Phelps Corporation has not engaged in any business or other activities except in connection with its formation. The amended and restated certificate of incorporation of Duff & Phelps Corporation authorizes two classes of common stock, Class A common stock and Class B common stock, each having the terms described in "Description of Capital Stock."

        Duff & Phelps Corporation will issue a number of shares of Class B common stock equal to the number of outstanding New Class A Units. Each existing unitholder of D&P Acquisitions will receive a number of shares of Class B common stock equal to the number of New Class A Units held by such existing unitholder.

        The creation of Duff & Phelps Corporation will facilitate public ownership and achieve other desirable objectives, such as permitting use of its stock as acquisition currency and for long-term incentive compensation. However, Duff & Phelps Corporation is acquiring only a minority ownership interest in D&P Acquisitions. Following this offering, D&P Acquisitions and its subsidiaries will continue to operate the historical business. The existing members of D&P Acquisitions are implementing this structure because they desire that it maintain its existing tax treatment as a partnership for U.S. federal income tax purposes and they will continue to hold their ownership interests in the historical business until such time in the future as they may elect to exchange such membership interests for stock in Duff & Phelps Corporation.

Offering Transactions

        Upon the consummation of this offering, Duff & Phelps Corporation will contribute all of the net proceeds from this offering to D&P Acquisitions, and D&P Acquisitions will issue to Duff & Phelps Corporation a number of New Class A Units equal to the number of shares of Class A common stock that Duff & Phelps Corporation has issued in this offering. In connection with its acquisition of New Class A Units, Duff & Phelps Corporation will also become the sole managing member of D&P Acquisitions. D&P Acquisitions will then use such proceeds as described under "Use of Proceeds."

27



        In connection with the closing of this offering, D&P Acquisitions and certain of its existing unitholders will enter into the Exchange Agreement under which, subject to the applicable minimum retained ownership requirements and certain other restrictions, including notice requirements, from time to time, typically once a quarter, they (or certain transferees thereof) will have the right to exchange with D&P Acquisitions their New Class A Units for shares of our Class A common stock on a one-for-one basis. See "Related Party Transactions—Exchange Agreement."

        As a result of the transactions described above, including the application of the net proceeds from this offering as described herein, which we collectively refer to as the "Reorganization and Offering," and as a result of the Shinsei Investment immediately following this offering:

    Duff & Phelps Corporation will become the sole managing member of D&P Acquisitions and, through D&P Acquisitions and its subsidiaries and affiliates, operate our business. Accordingly, although Duff & Phelps Corporation will have a minority economic interest in D&P Acquisitions, Duff & Phelps Corporation will have a majority voting interest and control the management of D&P Acquisitions. As a result, we will consolidate the financial results of D&P Acquisitions and will record non-controlling interest on our balance sheet for the economic interest in D&P Acquisitions held by the existing unitholders to the extent the book value of their interest in D&P Acquisitions is greater than zero;

    the existing unitholders of D&P Acquisitions will hold 22,121,965 shares of our Class B common stock and 22,121,965 New Class A Units (or 21,611,830 shares of our Class B common stock and 21,611,830 New Class A Units if the underwriters exercise in full their over-allotment option to purchase additional shares), and Duff & Phelps Corporation will hold 11,675,000 New Class A Units (or 12,920,000 New Class A Units if the underwriters exercise in full their over-allotment option to purchase additional shares);

    through their holdings of our Class B common stock, the existing unitholders of D&P Acquisitions will have 65.5% of the voting power in Duff & Phelps Corporation (or 62.6% if the underwriters exercise in full their over-allotment option to purchase additional shares);

    the investors in this offering and Shinsei will collectively own all of our shares of Class A common stock and will collectively have 34.5% of the voting power in Duff & Phelps Corporation (or 37.4% if the underwriters exercise in full their over-allotment option to purchase additional shares); and

    the New Class A Units are exchangeable with D&P Acquisitions on a one-for-one basis for shares of our Class A common stock. In connection with an exchange, a corresponding number of shares of our Class B common stock will be required to be cancelled. However, the exchange of New Class A Units for shares of our Class A common stock will not affect our Class B common stockholders' voting power since the votes represented by the cancelled shares of our Class B common stock will be replaced with the votes represented by the shares of Class A common stock for which such New Class A Units are exchanged.

Holding Company Structure

        We will be a holding company and, immediately after the consummation of the Reorganization and Offering and the Shinsei Investment, our sole asset will be our approximately 34.5% equity interest in D&P Acquisitions (37.4% if the underwriters exercise in full their over-allotment option to purchase additional shares), and our controlling interest and related rights as the sole managing member of D&P Acquisitions. Our only business following this offering will be to act as the sole managing member of D&P Acquisitions, and, as such, we will operate and control all of the business and affairs of D&P Acquisitions and will consolidate D&P Acquisitions' financial results into our consolidated financial statements.

28



        The number of New Class A Units we will own equals the number of outstanding shares of our Class A common stock. The economic interest represented by each New Class A Unit that we will own will correspond to one of our shares of Class A common stock, and the total number of New Class A Units owned by us and the holders of our Class B common stock will equal the sum of outstanding shares of our Class A and Class B common stock. In addition, you should note that:

    a share of Class B common stock cannot be transferred except in connection with a transfer of a New Class A Unit. Further, a New Class A Unit cannot be exchanged with D&P Acquisitions for a share of our Class A common stock without the corresponding share of our Class B common stock being delivered together at the time of exchange for cancellation by us; and

    we do not intend to list our Class B common stock on any stock exchange.

        As a result of our acquisitions of D&P Acquisitions interests, we expect to benefit from depreciation and other tax deductions reflecting D&P Acquisitions' tax basis for its assets. Those deductions will be allocated to us and will be taken into account in reporting our taxable income. Further, as a result of a federal income tax election made by D&P Acquisitions applicable to a portion of our acquisition of D&P Acquisitions interests, the income tax basis of the assets of D&P Acquisitions underlying a portion of the interests we acquire will be adjusted based upon the amount that we have paid for that portion of our D&P Acquisitions interests. We intend to enter into an agreement with the existing unitholders of D&P Acquisitions (for the benefit of the existing unitholders of D&P Acquisitions) that will provide for the payment by us to the unitholders of D&P Acquisitions of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we realize (i) from the tax basis in our proportionate share of D&P Acquisitions' goodwill and similar intangible assets (determined as of the date of this offering) that we receive as a result of the exchanges and (ii) from the federal income tax election referred to above. See "Related Party Transactions—Tax Receivable Agreement."

        As a member of D&P Acquisitions, we will incur U.S. federal, state and local income taxes on our allocable share of any net taxable income of D&P Acquisitions. As authorized by the Third Amended and Restated Limited Liability Company Agreement of D&P Acquisitions ("LLC Agreement"), pursuant to which D&P Acquisitions will be governed, we intend to cause D&P Acquisitions to continue to distribute cash, generally, on a pro rata basis, to its members at least to the extent necessary to provide funds to pay the members' tax liabilities, if any, with respect to the earnings of D&P Acquisitions. See "Related Party Transactions—Third Amended and Restated Limited Liability Company Agreement of D&P Acquisitions."

Shinsei Investment

        On September 1, 2007, we completed the Shinsei Investment in which we issued to Shinsei 3,375,000 shares of our Class A common stock for approximately $54.2 million, or at a purchase price equal to $16.07 per share, representing 97.4% of the low-end of the pricing range set forth on the cover page of this prospectus. Upon consummation of this offering, Shinsei's equity interest in Duff & Phelps Corporation will be equal to approximately 10% of the equity capital of the Company on a fully diluted basis. The proceeds from the Shinsei Investment and the Class A common stock issued to Shinsei will be held in escrow until consummation of this offering. If this offering is not consummated by October 31, 2007, half of Shinsei's investment will be returned to Shinsei and, instead of issuing Class A common stock to Shinsei, D&P Acquisitions will issue a note to Shinsei in the aggregate principal amount of approximately $27.1 million that is, upon certain conditions, convertible into units of D&P Acquisitions.

        Any shares of Class A common stock owned by Shinsei will be subject to restrictions on transfer until September 5, 2009. Shinsei may sell up to 50% of its Class A common stock on or after September 5, 2008, 75% of its Class A common stock on or after March 5, 2009 and 100% of its Class A common stock on or after September 5, 2009. In addition, Shinsei will be restricted from purchasing any additional Class A common stock until March 5, 2009. In connection with this investment, we granted Shinsei registration rights.

29



USE OF PROCEEDS

        We estimate that we will receive net proceeds of approximately $129.3 million from the sale of 8,300,000 shares of Class A common stock at the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, after deducting underwriting commissions and discounts of approximately $10.2 million and estimated expenses of approximately $5.8 million. If the underwriters exercise their option to purchase an additional 1,245,000 shares in full, then the net proceeds will be approximately $149.5 million.

        Based on this assumed initial public offering price, we intend to use the proceeds from the offering, and the estimated net proceeds of approximately $51.5 million from the Shinsei Investment (i) to redeem approximately $137.9 million of New Class A Units held by the existing unitholders of D&P Acquisitions, of which amount we expect approximately $55.7 million will be paid to Vestar and its affiliates, approximately $33.5 million will be paid to Lovell Minnick and its affiliates, approximately $3.9 million will be paid to Mr. Gottdiener, approximately $1.2 million to Mr. Creagh, approximately $0.8 million to Mr. Silverman, approximately $0.2 million to Mr. Marschke, approximately $0.1 million to Mr. Forman and approximately $0.2 million to Mr. Krueger, and (ii) to repay $42.9 million outstanding borrowings under our credit agreement. If the underwriters exercise their option to purchase an additional 1,245,000 shares in full, we will redeem approximately $146.8 million of New Class A Units held by the existing unitholders, (including approximately $5.5 million to Mr. Gottdiener, approximately $1.7 million to Mr. Creagh, approximately $1.1 million to Mr. Silverman, approximately $0.3 million to Mr. Marschke, approximately $0.2 million to Mr. Forman and approximately $0.2 million to Mr. Krueger) and the remainder will be used for general corporate purposes, which may include repayment of outstanding borrowings under our credit agreement. We do not anticipate significant short-term capital needs, which allows us to apply a portion of the net proceeds from this offering to the Redemption. The Redemption will provide the existing unitholders of D&P Acquisitions with the opportunity to monetize a portion of their holdings in D&P Acquisitions.

        Our credit agreement consists of a revolving credit facility in the amount of $20.0 million and a term loan facility in the amount of $80.0 million. The revolving credit facility matures on October 1, 2011 and the term loan facility matures on October 1, 2012. At June 30, 2007, we had outstanding borrowings of $79.0 million under the term loan facility (before debt discount) bearing interest at a rate of LIBOR plus a margin of 2.75%. Proceeds from these borrowings have been used to acquire the CVC and Chanin businesses and for working capital purposes. At June 30, 2007, there was no outstanding loan balance under the revolving credit facility.

        A $1.00 increase (decrease) in the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us from this offering by $7.7 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        A $1.00 increase in the assumed initial offering price of $17.50 per share of Class A common stock, the midpoint of the price range set forth on the cover page of this prospectus, would increase the total number of shares of Class B common stock outstanding, and thus the total number of shares of common stock outstanding, by 279,447 shares after the Reorganization and Offering and the Shinsei Investment.

        A $1.00 decrease in the assumed initial offering price of $17.50 per share of Class A common stock, the midpoint of the price range set forth on the cover page of this prospectus, would decrease the total number of shares of Class B common stock outstanding, and thus the total number of shares of common stock outstanding, by 313,320 shares after the Reorganization and Offering and the Shinsei Investment.

        A change in the initial offering price would impact the number of shares of common stock outstanding because such a change would result in different exchange ratios pursuant to the Recapitalization Transactions and would impact the amount of the Redemptions, thereby altering the shares outstanding.

30



DIVIDEND POLICY

        We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.

        Future cash dividends, if any, will be at the discretion of our board of directors and will depend upon, among other things, our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors the board of directors may deem relevant.

31



CAPITALIZATION

        The following table sets forth our cash and cash equivalents and our capitalization at June 30, 2007:

    on an actual basis for D&P Acquisitions;

    on an as adjusted basis to give effect to the Reorganization and Offering and the Shinsei Investment for D&P Acquisitions. The adjustments do not give effect to any proceeds from Duff & Phelps Corporation as a result of the offering in excess of the amount required to effect the Redemption; and

    on a pro forma as adjusted basis for Duff & Phelps Corporation to give effect to (i) the sale by us of 8,300,000 shares of Class A common stock at an assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses, and the use of the estimated net proceeds as described under "Use of Proceeds"; (ii) the sale by us of 3,375,000 shares of Class A common stock to Shinsei at a price per share of $16.07 after deducting estimated expenses associated with the Shinsei Investment; and (iii) the estimated impact of the tax receivable agreement associated with the Redemption. See "Related Party Transactions—Tax Receivable Agreement." See "Use of Proceeds" for more information regarding our use of the net proceeds of this offering and the Shinsei Investment.

        A $1.00 increase (decrease) in the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us from this offering by $7.7 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. You should read the following table in conjunction with our consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus.

 
  As of June 30, 2007
 
  D&P Acquisitions
   
 
  Actual
  As Adjusted
for the
Reorganization and Offering and the Shinsei Investment

  Duff & Phelps
Corporation
Pro Forma

 
  (in thousands, except share data)

Cash and cash equivalents   $ 42,575   $ 42,575   $ 42,575
   
 
 
Total debt   $ 77,585   $ 77,585   $ 34,654
Non-controlling interest            
Redeemable units     91,918        
Total unitholders' (deficit)/equity     (8,746 )   87,035    
Class A common stock, par value $0.01 per share, 100,000,000 shares authorized; 11,675,000 shares issued and outstanding on a pro forma basis             117
Class B common stock, par value $0.0001 per share, 50,000,000 shares authorized; 22,121,965 shares issued and outstanding on a pro forma basis             2
  Additional paid-in capital             142,722
  Retained earnings            
   
 
 
Total stockholders' equity             142,841
   
 
 
Total capitalization   $ 160,757   $ 164,620   $ 177,494
   
 
 

32



DILUTION

        If you invest in our Class A common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the pro forma net tangible book value per share of our Class A common stock after this offering. Dilution results from the fact that the per share offering price of the Class A common stock is substantially in excess of the net tangible book value per share attributable to the existing equity holders. Net tangible book value represents net book equity excluding intangible assets, if any.

        Our pro forma net tangible book value at June 30, 2007 was approximately $(40.2) million, or $(1.78) per share of our Class A common stock. Pro forma net tangible book value represents the amount of total tangible assets less total liabilities of D&P Acquisitions, after giving effect to the Recapitalization Transactions but before the Redemption, and pro forma net tangible book value per share represents pro forma net tangible book value divided by the number of shares of Class A common stock outstanding, after giving effect to the Recapitalization Transactions and assuming that all of the members of D&P Acquisitions exchanged their vested New Class A Units for newly-issued shares of our Class A common stock on a one-for-one basis.

        After giving effect to (i) the sale by us of 8,300,000 shares of our Class A common stock at an assumed initial public offering price of $17.50 per share, the mid-point of the price range set forth on the cover page of this prospectus in this offering, after deducting the underwriting discounts, estimated offering expenses and other related transaction costs payable by us, and the use of the estimated net proceeds as described under "Use of Proceeds," (ii) the Shinsei Investment, and (iii) the estimated impact of the tax receivable agreement associated with the Redemption, our pro forma net tangible book value at June 30, 2007 was $19.5 million or $0.73 per share of Class A common stock, assuming that all of the existing unitholders of D&P Acquisitions exchanged their vested New Class A Units for shares of our Class A common stock on a one-for-one basis.

        The following table illustrates the pro forma immediate increase in book value of $2.50 per share for existing equity holders and the immediate dilution of $16.77 per share to new shareholders purchasing Class A common stock in this offering, assuming the underwriters do not exercise their option to purchase additional shares to cover any over-allotment.

Assumed initial public offering price per share   $ 17.50
  Pro forma net tangible book value per share prior to this offering at June 30, 2007   $ (1.78 )    
  Increase in net tangible book value per share attributable to Class A shareholders purchasing shares in this offering     2.50      
   
     
Pro forma net tangible book value per share after this offering     0.73
         
Dilution to new Class A shareholders per share   $ 16.77
         

        The following table summarizes, on the same pro forma basis at June 30, 2007, the total number of shares of Class A common stock purchased from us, the total cash consideration paid to us and the average price per share paid by the existing equityholders and by new investors purchasing shares in this offering and the Shinsei Investment, assuming that all of the existing unitholders of D&P

33



Acquisitions exchanged their vested New Class A Units for shares of our Class A common stock on a one-for-one basis.

 
  Shares Purchased
  Total Consideration
   
 
  Average Price
Per Share

 
  Number
  Percentage
  Amount
  Percentage
Existing unitholders   15,158,374   56.5 % $   0.0 % $
Public investors   8,300,000   30.9 %   145,250,000   72.8 % $ 17.50
Shinsei   3,375,000   12.6 %   54,236,250   27.2 % $ 16.07
   
 
 
 
     
Total   26,833,374   100.0 % $ 199,486,250   100.0 %    
   
 
 
 
     

        Of the 22,121,965 vested and unvested New Class A Units to be held by the existing unitholders of D&P Acquisitions following this offering, after giving effect to the impact of the redemption by D&P Acquisitions of certain of its outstanding New Class A Units immediately following the consummation of this offering, 15,158,374 will be fully vested and 6,963,591 will be unvested. If we had assumed that all of the existing unitholders exchanged their unvested membership interests in addition to their vested membership interests for shares of our Class A common stock, the dilution in pro forma net tangible book value per share to new investors would have been greater and the average price per share paid by the existing equityholders would have been lower.

        A $1.00 increase (decrease) in the assumed initial public offering price of $17.50 per share of Class A common stock, the mid-point of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors in this offering and by all investors by $8.3 million, and would increase (decrease) the average price per share paid by new investors (excluding existing unitholders) by $0.71, assuming the number of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and without deducting the estimated underwriting discounts and offering expenses payable by us in connection with this offering.

        If the underwriters' option to purchase additional shares to cover any over-allotment is exercised in full, the pro forma net tangible book value per share at June 30, 2007 would be approximately $1.14 per share and the dilution in pro forma net tangible book value per share to new investors would be $16.36 per share. Furthermore, the percentage of our shares held by existing equity owners would decrease to approximately 62.6% and the percentage of our shares held by new investors would increase to approximately 37.4%.

34



UNAUDITED PRO FORMA FINANCIAL INFORMATION

        The unaudited consolidated pro forma statements of operations for the year ended December 31, 2006 present our consolidated results of operations giving pro forma effect to the Chanin acquisition, the Reorganization and Offering and the Shinsei Investment described under "Our Structure" and the use of the estimated net proceeds as described under "Use of Proceeds," as if such transactions occurred on January 1, 2006. The unaudited consolidated pro forma statements of operations for the six months ended June 30, 2007 present our consolidated results of operations giving pro forma effect to the Reorganization and Offering and the Shinsei Investment described under "Our Structure" and the use of the estimated net proceeds as described under "Use of Proceeds," as if such transactions occurred on January 1, 2007. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions and this offering, on the historical financial information of D&P Acquisitions.

        The unaudited consolidated pro forma financial information of Duff & Phelps Corporation should be read together with "Our Structure," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the D&P Acquisitions and Chanin historical financial statements and related notes included elsewhere in this prospectus.

        The unaudited consolidated pro forma financial information is included for informational purposes only and does not purport to reflect the results of operations or financial position of Duff & Phelps Corporation that would have occurred had we operated as a public company during the periods presented. The unaudited consolidated pro forma financial information should not be relied upon as being indicative of our results of operations or financial condition had the Chanin acquisition, the Reorganization and Offering and the Shinsei Investment described under "Our Structure" and the use of the estimated net proceeds as described under "Use of Proceeds" occurred on the dates assumed. The unaudited consolidated pro forma financial information also does not project the results of operations or financial position for any future period or date.

        The D&P Acquisitions pro forma adjustments principally give effect to the acquisition of Chanin including adjustments relating to equity-based compensation, amortization of intangibles, interest expense and compensation with respect to the restructuring business of Chanin to reflect the agreement with the principals of Chanin that compensation for such restructuring business shall represent 50% of the net revenue of the restructuring business for the five-year period following the Chanin acquisition. With respect to the unaudited condensed consolidated pro forma balance sheet of D&P Acquisitions, the pro forma adjustments give effect to the Reorganization and Offering and the Shinsei Investment as described in "Our Structure." The pro forma adjustments do not give effect to any proceeds from Duff & Phelps Corporation in excess of the amount required to effect the Redemption.

        The Duff & Phelps Corporation pro forma adjustments principally give effect to the following items:

    the Reorganization and Offering and the Shinsei Investment described under "Our Structure" and the use of the estimated net proceeds as described under "Use of Proceeds";

    in the case of the unaudited consolidated pro forma statements of operations data, a provision for corporate income taxes at an effective rate of 40.6%, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction; and

    the estimated impact of the tax receivable agreement associated with the Redemption. See "Related Party Transactions—Tax Receivable Agreement."

35



Unaudited Consolidated Pro Forma Statements of Operations

 
  Year Ended December 31, 2006
 
 
  D&P
Acquisitions
Actual

  Chanin
Actual(1)

  Pro Forma
Adjustments
for Chanin

  D&P
Acquisitions
Pro Forma

  Adjustments for
Reorganization
and Offering
and the
Shinsei
Investment

  Duff & Phelps
Corporation
Pro Forma

 
 
  ($ in thousands, except per share data)

 
Revenues:                                      
  Financial Advisory   $ 189,486   $   $   $ 189,486   $   $ 189,486  
  Investment Banking     57,256     17,386         74,642         74,642  
  Reimbursable expenses     12,526     1,381         13,907         13,907  
   
 
 
 
 
 
 
  Total revenues     259,268     18,767         278,035         278,035  
Direct client service costs:                                      
  Compensation and benefits     146,926     12,693     (2,668 )(2)(3)(4)   156,951         156,951  
  Other direct client service costs     1,034     1,344         2,378         2,378  
  Acquisition retention expenses     6,003             6,003         6,003  
  Reimbursable expenses     12,685     1,872         14,557         14,557  
   
 
 
 
 
 
 
    Total direct client service costs     166,648     15,909     (2,668 )   179,889         179,889  
Operating expenses:                                      
  Selling, general and administrative     68,606     4,992         73,598         73,598  
  Depreciation and amortization     7,702     191     2,173   (5)   10,066         10,066  
   
 
 
 
 
 
 
    Total operating expenses     76,308     5,183     2,173     83,664         83,664  
   
 
 
 
 
 
 
    Operating income/(loss)     16,312     (2,325 )   495     14,482         14,482  
Other (income)/expense:                                      
  Interest income     (556 )   (116 )       (672 )       (672 )
  Interest expense     5,911         1,014     6,925     (3,477)   (7)   3,448  
  Other (income)/expense     (243 )           (243 )       (243 )
   
 
 
 
 
 
 
    Total other expenses, net     5,112     (116 )   1,014   (6)   6,010     (3,477 )   2,533  
   
 
 
 
 
 
 
Income before non-controlling interest and taxes     11,200     (2,209 )   (519 )   8,472     3,477     11,949  
Non-controlling interest                     7,821   (8)   7,821   (8)
   
 
 
 
 
 
 
Income before taxes     11,200     (2,209 )   (519 )   8,472     (4,344 )   4,128  
Provision for income taxes     701     91         792     885   (9)   1,677  
   
 
 
 
 
 
 
Net income   $ 10,499   $ (2,300 ) $ (519 ) $ 7,680   $ (5,229 ) $ 2,451  
   
 
 
 
 
 
 
Weighted average shares of Class A common stock outstanding:                                      
  Basic                         11,675  
  Diluted                         11,675  
Net income available to holders of shares of Class A common stock per share(10):                                      
  Basic                       $ 0.21  
  Diluted                       $ 0.21  

(1)
Represents the audited financial results of Chanin for the ten-month period ended October 31, 2006.

(2)
Includes $2.9 million reduction to compensation with respect to the restructuring business to reflect the agreement with the principals of Chanin that compensation for the restructuring business shall represent 50% of net revenue of the restructuring business.

(3)
Includes $1.0 million additional equity-based compensation expense to reflect the incremental full-year impact of equity grants issued by D&P Acquisitions as part of the Chanin acquisition.

(4)
Includes $0.7 million elimination of expense attributable to Chanin stock appreciation rights held by certain employees of Chanin.

(5)
Reflects additional amortization expense representing the incremental intangible asset amortization expense based on the Company's estimates of the values and lives of acquired intangible assets.

(6)
Reflects additional interest expense for the $15 million seventy-one-month credit facility entered into in conjunction with the Chanin acquisition as if it occurred as of January 1, 2006.

36


(continued)


(7)
Reflects reduction in interest expense as a result of repayment of debt following this offering, as if it occurred as of January 1, 2006.

(8)
As described in "Our Structure," Duff & Phelps Corporation will be the sole managing member of D&P Acquisitions. Accordingly, although Duff & Phelps Corporation will have a minority economic interest in D&P Acquisitions, it will have a majority voting interest and control the management of D&P Acquisitions. As a result, subsequent to the Reorganization, Offering and Shinsei Investment, Duff & Phelps Corporation will consolidate D&P Acquisitions and a record a non-controlling interest for the economic interest in D&P Acquisitions held by the existing unitholders.

(9)
Following the Reorganization and Offering and the Shinsei Investment, we will be subject to U.S. federal income taxes, in addition to state, local and international taxes, with respect to our allocable share of any net taxable income of D&P Acquisitions, which will result in higher income taxes and an increase in income taxes paid. As a result, this reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of 40.6%, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction.

(10)
Net income/(loss) available to holders of Class A common stock per share represents net income/(loss) adjusted for any preferred dividends.

37



Unaudited Consolidated Pro Forma Statements of Operations

 
  Six Months Ended June 30, 2007
 
 
  D&P
Acquisitions
Actual

  Adjustments
for the
Reorganization
and Offering
and the
Shinsei
Investment

  Duff & Phelps
Corporation
Pro Forma

 
 
  ($ in thousands, except per share data)

 
Revenues:                    
  Financial Advisory   $ 124,432   $   $ 124,432  
  Investment Banking     40,131         40,131  
  Reimbursable expenses     6,058         6,058  
   
 
 
 
  Total revenues     170,621         170,621  
   
 
 
 
Direct client service costs:                    
  Compensation and benefits     110,051         110,051  
  Other direct client service costs     813         813  
  Acquisition retention expenses     1,331         1,331  
  Reimbursable expenses     6,085         6,085  
   
 
 
 
    Total direct client service costs     118,280         118,280  
   
 
 
 
Operating expenses:                    
  Selling, general and administrative     49,160         49,160  
  Depreciation and amortization     4,398         4,398  
   
 
 
 
    Total operating expenses     53,558         53,558  
   
 
 
 
    Operating loss     (1,217 )       (1,217 )
Other (income)/expense:                    
  Interest income     (829 )       (829 )
  Interest expense     3,571     (1,738 )   1,833   (1)
  Other (income)/expense     (192 )       (192 )
   
 
 
 
    Total other expenses, net     2,550     (1,738 )   812  
   
 
 
 
Income/(loss) before non-controlling interest and taxes     (3,767 )   1,738     (2,029 )
Non-controlling interest         (1,328 )(2)   (1,328 )(2)
   
 
 
 
Income/(loss) before taxes     (3,767 )   3,066     (701 )
Provision/(benefit) for income taxes     946     (1,231 )(3)   (285 )
   
 
 
 
Net income/(loss)   $ (4,713 ) $ 4,297   (3) $ (416 )
   
 
 
 
Weighted average shares of Class A common stock outstanding:                    
  Basic             11,675  
  Diluted             11,675  
Net loss available to holders of shares of Class A common stock per share(4):                    
  Basic           $ (0.04 )
  Diluted           $ (0.04 )

(1)
Reflects reduction in interest expense as a result of repayment of debt following this offering, as if it occurred as of January 1, 2007.

(2)
As described in "Our Structure," Duff & Phelps Corporation will be the sole managing member of D&P Acquisitions. Accordingly, although Duff & Phelps Corporation will have a minority economic interest in D&P Acquisitions, it will have a majority voting interest and control the management of D&P Acquisitions. As a result, subsequent to the Reorganization, Offering and Shinsei Investment, Duff & Phelps Corporation will consolidate D&P Acquisitions and record a non-controlling interest for the economic interest in D&P Acquisitions held by the existing unitholders.

(3)
Following the Reorganization and Offering and the Shinsei Investment, we will be subject to U.S. federal income taxes, in addition to state, local and international taxes, with respect to our allocable share of any net taxable income of D&P Acquisitions, which will result in higher income taxes and an increase in income taxes paid. As a result, this reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of 40.6%, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction.

(4)
Net loss available to holders of ClassA common stock per share represents net loss adjusted for any preferred dividends.

38


Unaudited Condensed Consolidated Pro Forma Balance Sheet

 
  As of June 30, 2007
 
  D&P Acquisitions
   
   
 
  Actual
  Adjustments for the
Recapitalization
Transactions and
the Redemption(1)

  As Adjusted for
Recapitalization
Transactions and
Redemption(1)

  Adjustments
for the Reorganization and Offering
and Shinsei
Investment(2)

  As Adjusted
for the Reorganization and Offering
and Shinsei
Investment(2)

  Duff & Phelps
Corporation
Adjustments
for the Offering
Transactions
and Shinsei
Investment(3)

  Duff & Phelps
Corporation
Pro Forma(3)

Assets                                          
Current assets:                                          
  Cash and cash equivalents   $ 42,575   $   $ 42,575   $   $ 42,575   $   $ 42,575
  Accounts receivable, net     53,016         53,016         53,016         53,016
  Unbilled services     25,059         25,059         25,059         25,059
  Prepaid expenses     2,639         2,639         2,639         2,639
  Other current assets     253         253         253         253
   
 
 
 
 
 
 
    Total current assets     123,542         123,542         123,542         123,542
Property and equipment, net     17,863         17,863         17,863         17,863
Goodwill     98,389         98,389         98,389         98,389
Intangible assets, net     24,998         24,998         24,998         24,998
Other assets     8,667         8,667         8,667         8,667
Deferred tax assets                         85,826 (4)   85,826
   
 
 
 
 
 
 
    Total assets   $ 273,459   $   $ 273,459   $   $ 273,459   $ 85,826   $ 359,285
   
 
 
 
 
 
 
Liabilities and Stockholders' Equity                                          
Current liabilities:                                          
  Accounts payable   $ 6,478   $   $ 6,478   $   $ 6,478   $   $ 6,478
  Accrued expenses     8,070         8,070         8,070         8,070
  Accrued compensation and benefits     40,595         40,595         40,595         40,595
  Deferred revenues     4,676         4,676         4,676         4,676
  Equity-based compensation liability, current     6,947     (698 )   6,249         6,249         6,249
  Current portion of long-term debt     794         794         794         794
  Other current liabilities         137,866     137,866     (137,866 )          
  Current portion of due to existing unitholders                         4,863   (4)   4,863
   
 
 
 
 
 
 
    Total current liabilities     67,560     137,167     204,727     (137,866 )   66,862     4,863     71,725
Long-term debt, less current portion     76,791         76,791         76,791     (42,931) (5)   33,860
Equity-based compensation liability, long term     31,491     (3,165 )   28,326         28,326         28,326
Other long-term liabilities     14,445         14,445         14,445         14,445
Due to existing unitholders                         68,088   (4)   68,088
Non-controlling interest                           (6)  
Redeemable units     91,918     (91,918 )                  
Unitholders' deficit     (8,746 )   (42,084 )   (50,830 )   137,866     87,035     (87,035 )  
Class A common stock, par value $0.01 per share, 100,000,000 shares authorized; 11,675,000 shares issued and outstanding on a pro forma basis                         117   (7)   117
Class B common stock, par value $0.0001 per share, 50,000,000 shares authorized; 22,121,965 shares issued and outstanding on a pro forma basis                         2   (7)   2
  Additional paid-in capital                         142,722   (6)(7)   142,722
  Retained earnings                            
   
 
 
 
 
 
 
Total stockholders' equity                         142,841     142,841
   
 
 
 
 
 
 
    Total liabilities and stockholders' equity   $ 273,459   $   $ 273,459   $   $ 273,459   $ 85,826   $ 359,285
   
 
 
 
 
 
 

(1)
Represents (i) reduction in equity-based compensation as a result of the Redemption of approximately 10% of the units of D&P Acquisitions giving rise to such equity-based compensation, (ii) interim liability created as a result of the obligation of D&P Acquisitions to redeem such units pursuant to the Redemption and (iii) elimination of redeemable units of D&P Acquisitions in connection with the Reorganization as a result of the termination of the repurchase obligation feature associated with such units. Adjustments assume redemption of approximately 7.9 million New Class A Units at a price per unit of $17.50, the midpoint of the pricing range set forth on the cover page of this prospectus.

39


(continued)


(2)
Reflects elimination of liability to redeem units of D&P Acquisitions in the Redemption as a result of the receipt of cash proceeds from Duff & Phelps Corporation and application of such cash proceeds to effectuate the Redemption. Only cash proceeds from this offering that are necessary to effectuate the Redemption are included in this calculation.

(3)
Represents the pro forma adjustments for the Duff & Phelps Corporation balance sheet, giving effect to the Reorganization and Offering, the Shinsei Investment, the tax receivable agreement and consolidation of D&P Acquisitions, as further described in footnotes 4, 5, 6 and 7 below.

(4)
Reflects adjustments to give effect to the tax receivable agreement (as described in "Related Party Transactions—Tax Receivable Agreement"), as a result of the Redemption (as described in "Our Structure") based on the following assumptions:

we will record an increase in deferred tax assets for estimated income tax effects of the increase in the tax basis of the purchased interests, based on an effective income tax rate of 40.6% (which includes a provision for U.S. federal, state, local and/or foreign income taxes);

we will record 85% of the estimated realizable tax benefit as an increase to the liability due to existing unitholders under the tax receivable agreement and the remaining 15% of the estimated realizable tax benefit as an increase to total stockholders' equity;

payments under the tax receivable agreement will give rise to additional tax benefits and therefore to additional potential payments under the tax receivable agreement, which are reflected in the calculation of the deferred tax assets; and

assumes that there are no material changes in the relevant tax law and that we earn sufficient taxable income in each year to realize the full tax benefit of the amortization of our assets.

(5)
Represents the repayment of approximately $42.9 million of outstanding borrowings under our credit agreement. For further information, see "Use of Proceeds."

(6)
Duff & Phelps Corporation will become the sole managing member of D&P Acquisitions and, through D&P Acquisitions and its subsidiaries and affiliates, operate our business. Accordingly, although Duff & Phelps Corporation will have a minority economic interest in D&P Acquisitions, Duff & Phelps Corporation will have a majority voting interest and control the management of D&P Acquisitions. As a result, we will consolidate the financial results of D&P Acquisitions and will record non-controlling interest on our balance sheet for the economic interest in D&P Acquisitions held by the existing unitholders to the extent the book value of their interest in D&P Acquisitions is greater than zero.

(7)
Represents an adjustment to stockholders' equity reflecting (i) par value for Class A common stock and Class B common stock to be outstanding following this offering, (ii) an increase of $180.7 million of additional paid-in capital as a result of estimated net proceeds from this offering and the Shinsei Investment, (iii) an increase of $12.9 million as a result of the difference between the deferred tax asset and amounts due to unitholders resulting from the Redemption and tax receivable agreement, as further described in footnote 4 above and (iv) a reduction of $50.9 million upon consolidation of D&P Acquisitions, after giving effect to the estimated net proceeds from this offering and the Shinsei Investment, the elimination of unitholders' equity of D&P Acquisitions upon consolidation and the repayment of approximately $42.9 million of outstanding borrowings under our credit agreement.

40



SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following tables set forth selected financial consolidated information on a historical basis.

        The consolidated statements of operations data for each of the years ended December 31, 2006 and 2005, for the periods from March 15, 2004 through December 31, 2004 and from January 1, 2004 through March 14, 2004, and the consolidated balance sheets data as of December 31, 2006 and 2005 have been derived from our and our predecessor's audited consolidated financial statements included elsewhere in this prospectus and the consolidated balance sheet data as of December 31, 2004 and the consolidated statements of operations data and consolidated balance sheets data as of December 31, 2003 and 2002 have been derived from our predecessor's audited consolidated financial statements not included in this prospectus. The condensed consolidated statements of operations data for the six months ended June 30, 2007 and 2006, and the condensed consolidated balance sheet data as of June 30, 2007 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited interim condensed consolidated financial statements include all adjustments (consisting of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations for the periods presented. The interim results of operations are not necessarily indicative of operations for a full fiscal year.

        The information below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and notes thereto included in this prospectus.

 
  Successor
  Predecessor
 
 
  Six Months Ended June 30,
  Year Ended December 31,
  Period from
March 15,
2004 through
December 31,
2004(1)

  Period from
January 1,
2004 through
March 14,
2004(1)

  Year Ended
December 31,

 
Consolidated statements of operations

  2007
  2006
  2006
  2005
  2003
  2002
 
 
  (in thousands)

 
Revenues:                                                  
  Financial Advisory   $ 124,432   $ 85,078   $ 189,486   $ 35,460   $   $   $   $  
  Investment Banking     40,131     17,598     57,256     38,466     24,995     3,881     23,023     19,552  
  Reimbursable expenses     6,058     6,574     12,526     4,313     1,339     272     1,197     976  
   
 
 
 
 
 
 
 
 
    Total revenues     170,621     109,250     259,268     78,239     26,334     4,153     24,220     20,528  
Direct client service costs:                                                  
  Compensation and benefits (including $22,041 and $2,889 of equity-based compensation for the six months ended June 30, 2007 and June 30, 2006, respectively) and $10,244 and $2,113 of equity-based compensation for 2006 and 2005, respectively(2)     110,051     64,098     146,926     44,387     15,545     2,861     14,456     13,138  
  Other direct client service costs     813     341     1,034     145     267     19          
  Acquisition retention expenses(3)     1,331     4,178     6,003     11,695                  
    Reimbursable expenses     6,085     6,339     12,685     4,541     1,339     272     1,197     976  
   
 
 
 
 
 
 
 
 
    Total direct client service costs     118,280     74,956     166,648     60,768     17,151     3,152     15,653     14,114  

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Selling, general and administrative (including $7,798 and $1,298 of equity-based compensation for the six months ended June 30, 2007 and June 30, 2006, respectively) and $3,790 and $1,803 of equity-based compensation for 2006 and 2005, respectively(2)     49,160     30,305     68,606     22,246     5,212     1,466     6,095     6,691  
  Depreciation and amortization     4,398     4,048     7,702     3,186     1,237     113     730     800  
  Merger and acquisition costs(4)                 2,138                  
   
 
 
 
 
 
 
 
 
    Total operating expenses     53,558     34,353     76,308     27,570     6,449     1,579     6,825     7,491  
   
 
 
 
 
 
 
 
 
Operating income/(loss)     (1,217 )   (59 )   16,312     (10,099 )   2,734     (578 )   1,742     (1,077 )

Other (income)/expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Interest income     (829 )   (128 )   (556 )   (137 )   (43 )   (3 )   (12 )   (8 )
  Interest expense     3,571     2,570     5,911     1,661     299     31     182     244  
  Other (income)/expense     (192 )   (785 )   (243 )   542                  
   
 
 
 
 
 
 
 
 
    Total other expenses, net     2,550     1,657     5,112     2,066     256     28     170     236  
   
 
 
 
 
 
 
 
 

Income/(loss) before income tax expense

 

 

(3,767

)

 

(1,716

)

 

11,200

 

 

(12,165

)

 

2,478

 

 

(606

)

 

1,572

 

 

(1,313

)
Provision/(benefit) for income taxes     946     (27 )   701     330     63     12          
   
 
 
 
 
 
 
 
 
Net income/(loss)   $ (4,713 ) $ (1,689 ) $ 10,499   $ (12,495 ) $ 2,415   $ (618 ) $ 1,572   $ (1,313 )
   
 
 
 
 
 
 
 
 
Other financial data                                                  
Adjusted EBITDA(5)   $ 34,351   $ 12,354   $ 44,051   $ 10,836   $ 3,971   $ (465 ) $ 2,472   $ (276 )
   
 
 
 
 
 
 
 
 

41


 
  Six Months Ended
June 30,

  Year Ended December 31,
 
  2007
  2006
  2006
  2005
  2004
Other operating data                            
Number of client service professionals (at period end)                            
  Financial Advisory     588     490     553     425  
  Investment Banking     98     77     118     84   75
   
 
 
 
 
    Total     686     567     671     509   75

Average number of client service professionals for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Financial Advisory     582     460     506     103  
  Investment Banking     104     84     88     93   69
   
 
 
 
 
  Total     686     544     594     196   69

Financial Advisory utilization rate(6)

 

 

69.3

%

 

67.7

%

 

68.1

%

 

71.4

%(7)

Financial Advisory rate per hour(8)   $ 325   $ 293   $ 300   $ 264     (9)
 
   
  As of December 31,
 
 
  As of
June 30,
2007

 
 
  2006
  2005
  2004
  2003
  2002
 
 
  (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Consolidated balance sheets data                                      

Cash and cash equivalents

 

$

42,575

 

$

59,132

 

$

12,134

 

$

12,282

 

$

3,298

 

$

1,077

 
Total assets     273,459     268,031     181,292     30,591     9,154     7,176  
Total debt     77,585     77,997     48,750     8,570     3,549     4,006  
Total liabilities     190,287     174,013     97,176     17,241     8,795     8,389  
Total redeemable units     91,918     91,973     92,053              
Total unitholders' equity/(deficit)     (8,746 )   2,045     (7,937 )   13,350     359     (1,213 )
Total stockholders' equity                          

(1)
D&P Acquisitions, LLC was formed on September 30, 2005. Prior to that date, this financial information represents the operations of Duff & Phelps, LLC. Prior to March 15, 2004, Duff & Phelps, LLC was a majority-owned subsidiary of Webster. Webster owned approximately 73% of Duff & Phelps, LLC's outstanding equity interests. On March 15, 2004, Webster sold its interests in Duff & Phelps, LLC to an investor group consisting of management and Lovell Minnick. That transaction constituted a change of control and required purchase accounting revaluation of Duff & Phelps, LLC's assets and liabilities. Accordingly, this financial information reflects results of operations before and after the impact of the March 15, 2004 transaction.

(2)
The six months ended June 30, 2007 and June 30, 2006 include an aggregate of $24.8 million and $3.6 million, respectively, of equity-based compensation related to one-time grants of equity in connection with the acquisitions of Duff & Phelps, LLC in March 2004, CVC in September 2005 and Chanin in October 2006. During 2006, equity-based compensation reflects liability accounting treatment for our Class C, D and E Units. The years ended December 31, 2006 and 2005, include an aggregate of $12.7 million and $3.9 million, respectively, of equity-based compensation related to one-time grants of equity in connection with the acquisitions of Duff & Phelps, LLC in March 2004, CVC in September 2005 and Chanin in October 2006.

(3)
Reflects expense classified as compensation in connection with deferred payments that we agreed to make to certain employees of CVC in connection with the CVC acquisition in September 2005. The offers of employment to these employees included retention payments of $9.8 million paid in November 2005 and $11.4 million payable in installments of one-third on each of the first three anniversary dates of the CVC acquisition under the condition that the individuals are still employed by us at the anniversary date. We recognize the expenses associated with these payments on a graded-tranche basis, and there will be no further expense associated with these deferred payments after 2008.

(4)
Represents one-time costs associated with the CVC acquisition not otherwise included in acquisition retention expenses. We do not expect to recognize any further CVC acquisition costs after 2006 other than the expenses associated with deferred payments described in footnote (3) above.

(5)
The Adjusted EBITDA measure presented consists of net income/loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs.


We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts for (a) interest expense and depreciation and amortization (a significant portion of which relate to debt and capital investments that have been incurred recently as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the

42


(continued)



future), (b) equity-based compensation (a significant portion of which is due to certain one-time grants associated with recent acquisitions as described in footnote (2) above) and (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions.


Given our recent level of acquisition activity and related capital investments and equity grants (which we do not expect to incur at the same levels in the future), and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. A measure substantially similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our senior secured credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income/(loss). Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.


Adjusted EBITDA is a non-GAAP measure that has material limitations because it does not include all items of income and expense that impact or have impacted our operations, including (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisitions retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs. This non-GAAP financial measure in not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating income, net income/(loss), net income/(loss) per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.


The following is a reconciliation of our net income/(loss) from continuing operations to Adjusted EBITDA:

 
  Successor
  Predecessor
 
 
  Six Months Ended
June 30,

  Year Ended
December 31,

  Period from
March 15,
2004 through
December 31,
2004

  Period from
January 1,
2004 through
March 14,
2004

  Year Ended
December 31,

 
 
  2007
  2006
  2006
  2005
  2003
  2002
 
 
  (in thousands)

 
Adjusted EBITDA reconciliation                                                  
Net income/(loss)   $ (4,713 ) $ (1,689 ) $ 10,499   $ (12,495 ) $ 2,415   $ (618 ) $ 1,572   $ (1,313 )
Provision/(benefit) for income taxes     946     (27 )   701     330     63     12          
Interest expense     3,571     2,570     5,911     1,661     299     31     182     244  
Interest income     (829 )   (128 )   (556 )   (137 )   (43 )   (3 )   (12 )   (8 )
Other (income)/expense     (192 )   (785 )   (243 )   542                  
Depreciation and amortization     4,398     4,048     7,702     3,186     1,237     113     730     800  
Acquisition retention expenses     1,331     4,178     6,003     11,695                  
Equity-based compensation included in "compensation and benefits"     22,041     2,889     10,244     2,113                  
Equity-based compensation included in "selling, general and administrative"     7,798     1,298     3,790     1,803                  
Merger and acquisition costs                 2,138                  
   
 
 
 
 
 
 
 
 
Adjusted EBITDA   $ 34,351   $ 12,354   $ 44,051   $ 10,836   $ 3,971   $ (465 ) $ 2,472   $ (277 )
   
 
 
 
 
 
 
 
 
(6)
The utilization rate for any given period is calculated by dividing the number of hours all our Financial Advisory client service professionals worked on client assignments during the period by the total available working hours for all of such client service professionals during the same period, assuming a forty-hour work week, less paid holidays and vacation days.

(7)
Represents utilization rate for all of fiscal 2005 as if the CVC acquisition had occurred on January 1, 2005.

(8)
Average billing rate per hour for any given period is calculated by dividing revenues for the period by the number of hours worked on client assignments during the same period.

(9)
Represents rate per hour for all of fiscal 2005 as if the CVC acquisition had occurred on January 1, 2005.

43



MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the risks described in "Risk Factors" and elsewhere in this prospectus. You should read the following discussion with "Selected Consolidated Financial and Operating Data" and our consolidated financial statements and related notes included elsewhere in this prospectus.

        The historical consolidated financial data discussed below reflect the historical results of operations of D&P Acquisitions as Duff & Phelps Corporation has not had any historical operations. These historical consolidated financial data do not give effect to the Reorganization and Offering or the Shinsei Investment. See "Our Structure" and "Unaudited Pro Forma Financial Information" included elsewhere in this prospectus.

Overview

        We are a leading provider of independent financial advisory and investment banking services. Our mission is to help our clients protect, maximize and recover value. The foundation of our services is our ability to provide independent advice on issues involving highly technical and complex assessments of value, which typically support client needs in financial and tax valuation (especially in the context of business combinations and other corporate transactions), M&A, restructuring and litigation and disputes.

        We provide services through two segments: Financial Advisory and Investment Banking. The Financial Advisory segment provides valuation advisory services, corporate finance consulting services, specialty tax and dispute and legal management consulting services. The revenue model associated with this segment is generally based on time-and-materials or fixed-fees based on estimates of such work. In 2006, our Financial Advisory segment generated $189.5 million of revenue, or 77% of our revenue. The Investment Banking segment provides M&A advisory services, transaction opinions and restructuring advisory services. The revenue model associated with this segment is generally based on fixed retainers, fixed-fees and contingent fees upon the successful completion of a transaction. In 2006, our Investment Banking segment generated $57.3 million of revenue, or 23% of our revenue.

        The original Duff & Phelps business was founded in 1932 to provide high quality investment research services focused on the utility industry. Over several decades, it evolved into a diversified financial services firm providing investment banking, credit rating, and investment management services. In 1994, the credit rating business of Duff & Phelps was spun off into a separate public company that was eventually purchased by Fitch Ratings. In 2000, Duff & Phelps, LLC, the company that operated the investment banking practice of the original Duff & Phelps business, was acquired by Webster. In 2004, Duff & Phelps, LLC was acquired from Webster by its management and an investor group led by Lovell Minnick, a leading private equity firm.

        In 2005, Duff & Phelps, LLC teamed with Lovell Minnick and Vestar, another leading private equity firm, to acquire CVC from McGraw-Hill. CVC was formed in the 1970's, initially as part of the financial advisory service groups of Price Waterhouse and Coopers & Lybrand. These practices were combined in 1998 when Price Waterhouse merged with Coopers & Lybrand to form PwC and were subsequently acquired by McGraw-Hill in 2001, thereby establishing independence from the audit practice of PwC. In connection with the acquisition of CVC, D&P Acquisitions was formed and Duff & Phelps, LLC became a wholly-owned subsidiary of D&P Acquisitions. In October 2006, D&P Acquisitions acquired Chanin, one of the leading independent specialty investment banks providing restructuring advisory services for middle market and distressed transactions. Chanin was formed in 1990 and has played a lead role in many of the largest bankruptcy cases in the United States. Duff &

44



Phelps Corporation will, upon consummation of this offering, be the sole managing member of D&P Acquisitions.

        From the fiscal year ended December 31, 2004 through the fiscal year ended December 31, 2006, our revenue has grown from $28.9 million to $246.7 million through a combination of acquisitions and organic growth. Our number of client service professionals has grown from 75 at December 31, 2004 to over 680 at June 30, 2007.

Recent Acquisitions

Chanin Capital Partners LLC

        On October 31, 2006, we acquired the limited liability company units of Chanin Capital Partners LLC, an investment bank providing restructuring advisory, M&A and corporate finance services. The purchase consideration consisted of initial cash consideration of $15.6 million (subject to the completion of the final working capital adjustment), earn out payments equal to up to $5.0 million for each of the three twelve-month periods following the acquisition date (based on certain revenue performance thresholds), and the issuance of 3,000,000 Class F Units of D&P Acquisitions with a stated preference value of $3.0 million in the event of a liquidation or sale of D&P Acquisitions and a fair market value of $1.7 million at October 31, 2006 which, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, are convertible into approximately 153,913 New Class A Units pursuant to the Recapitalization Transactions. In addition, we incurred total fees and expenses associated with the acquisition of $1.0 million. The initial cash consideration was financed through borrowings of $15.0 million and cash on hand.

        Concurrent with the acquisition, D&P Acquisitions issued 9,855,000 Class G Units to 18 professionals of Chanin, of which 9,335,418 remain outstanding and which, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, are convertible into approximately 1,704,103 New Class A Units pursuant to the Recapitalization Transactions. This grant of equity has been accounted for as equity-based compensation, as the recipients have a required service commitment, and therefore the grant is being expensed over the requisite service period. Please refer to "Notes to the Consolidated Financial Statements of Duff & Phelps Acquisitions, LLC for December 31, 2006 and 2005 — Note 14. Capital Structure" for a description of D&P Acquisitions' capital structure prior to the Recapitalization Transactions.

        The acquisition was recorded using the purchase method of accounting and the purchase price was allocated to net assets based on fair values as determined in accordance with SFAS 141. Excess purchase price of $14.1 million was recognized as goodwill as a result of the acquisition.

Standard & Poor's Corporate Value Consulting

        On September 30, 2005, we acquired substantially all of the assets and assumed certain liabilities of CVC. The total cash purchase price was $118.7 million. The acquisition was financed through borrowings of $50.0 million and proceeds from the issuance of Class A Units of D&P Acquisitions of $82.9 million to Vestar and Lovell Minnick. The proceeds from the issuance of Class A Units were reduced by $2.5 million of equity issuance costs. In addition to the cash paid to effect the acquisition, the use of proceeds from these financing activities included the repayment of then outstanding senior secured notes of Duff & Phelps Holdings, LLC (the predecessor sole unitholder of D&P Acquisitions), payment of $3.2 million in fees and expenses associated with the acquisition and related transactions and general corporate purposes. In connection with the acquisition, we extended offers of employment to substantially all of the employees of CVC. The offers of employment to the client service professionals included retention payments of $9.8 million paid in November 2005 and $11.4 million payable in installments of one third on each of the first three anniversary dates of the transaction

45



under the condition that the individuals are still employed by us at the anniversary date. Retention payments to certain individuals may be accelerated if such individuals are terminated without cause. Concurrent with the acquisition, D&P Acquisitions issued 104,432 Class C Units, of which 99,516 remain outstanding and 10,338,782 Class D Units to 57 managing directors of CVC of which 9,852,073 remain outstanding and which, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, are convertible into approximately 952,397 and 1,970,805 New Class A Units, respectively, pursuant to the Recapitalization Transactions. This grant of equity has been accounted for as equity-based compensation to the recipients and is being expensed over the requisite service period. The acquisition was recorded using the purchase method of accounting and the purchase price was allocated to net assets based on fair values as determined in accordance with SFAS 141. Excess purchase price of $74.7 million was recognized as goodwill as a result of the acquisition.

Valuemetrics

        On January 1, 2005, Duff & Phelps Holdings, LLC acquired the assets of Valuemetrics Advisors, Inc. and Valuemetrics Capital, LLC (together, "Valuemetrics") for $3.7 million in cash and 2,600 Class C interests in Duff & Phelps Holdings, LLC, of which 2,495 remain outstanding and which, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, are convertible into approximately 153,836 New Class A Units pursuant to the Recapitalization Transactions. The acquisition was recorded using the purchase method of accounting and the purchase price was allocated to net assets based on fair values as determined in accordance with SFAS 141.

Sale of Controlling Interest in Duff & Phelps, LLC

        On March 15, 2004, Webster sold its 73% ownership interest in Duff & Phelps, LLC to Duff & Phelps Holdings, LLC, formed by an investor group consisting of management and Lovell Minnick. Webster received $1.0 million in cash, $7.0 million in promissory notes and a payoff of $2.0 million of the outstanding balance of Duff & Phelps, LLC's line of credit with Webster. Duff & Phelps, LLC allocated the purchase price to assets and liabilities based on their estimated fair values, considering ownership interest in the assets and liabilities. As of the date of the Webster transaction, Duff & Phelps, LLC had current assets of $4.3 million, property and equipment, net, of $0.5 million, other assets of $0.3 million, current liabilities of $4.3 million and long-term debt of $1.1 million. In connection with Webster's sale of its ownership interests in Duff & Phelps, LLC, Duff & Phelps, LLC recognized goodwill in the amount of $5.9 million.

Revenues

        We generate revenues from financial advisory and investment banking services. We typically enter into these engagements on a time-and-materials basis, a fixed-fee basis or a contingent-fee basis. We recognize revenues when persuasive evidence of an arrangement exists, the related services are provided, the price is fixed or determinable, and collectibility is reasonably assured.

        Revenues from time-and-materials engagements are recognized as the hours are incurred by our client service professionals. With respect to fixed-fee engagements, revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the project such as changes in scope, the staffing on the engagement and the level of client participation. Periodic engagement reviews require us to make judgments and estimates regarding the overall profitability and stage of project completion, which, in turn, affect how we recognize revenue.

        We have engagements for which the revenues are contingent on successful completion of the project, which would include, for example, "success fees" associated with our M&A advisory and restructuring businesses. Any contingent revenue on these contracts is not recognized until the

46



contingency is resolved and payment is reasonably assured. Retainer fees under these arrangements are deferred and recognized ratably over the period in which the related service is rendered.

        We have engagements to perform restructuring advisory services for which we are entitled to and record a monthly fee when services are rendered and collectibility is reasonably assured. Revenues from restructuring advisory engagements that are performed with respect to cases in bankruptcy court are typically recognized one-two months in arrears from the month in which the services were performed unless there are objections and/or holdbacks mandated by court instructions.

        Revenue trends in our Financial Advisory and Investment Banking segments generally are correlated to the volume of M&A activity and restructurings. However, deviations from this trend can occur in any given year for a number of reasons. For example, changes in our market share or the ability of our clients to close certain large transactions can cause our revenue results to diverge from the level of overall M&A or restructuring activity. In addition, because many businesses do not routinely engage in M&A and restructuring activity, our fee paying engagements with many clients are not likely to be predictable and high levels of revenue in one quarter are not necessarily predictive of continued high levels of revenue in future periods. Further, we have lines of business that are not correlated to the volume of M&A activity and restructurings, but rather to bankruptcy filings, litigation or regulatory trends.

        We operate in a highly competitive environment where there are limited long-term contracted sources of revenue and each revenue-generating engagement is separately awarded and negotiated. While we have achieved long and stable client relationships by providing outstanding service, attracting leaders in each industry and integrating ourselves with our clients' existing audit and other service providers, our list of clients, including our list of clients with whom there is a currently active revenue-generating engagement, changes continually. We gain new clients through our business development initiatives, through recruiting additional senior client service professionals who bring with them client relationships and through referrals from executives, directors, attorneys, accountants, private equity and hedge fund professionals and other parties with whom we have relationships. We may also lose clients as a result of the sale or merger of a client, a change in a client's senior management, competition from other firms and other causes. See "Risk Factors—Risks Related to Our Business—The financial advisory and investment banking industries are highly competitive and we may not be able to compete effectively" and "Risk Factors—Risks Related to Our Business—Our business operates in a highly competitive environment where typically there are no long-term contracted sources of revenue and clients can terminate engagements with us at any time."

Reimbursable Expenses

        Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and third-party costs are included as a component of total revenues. Expense reimbursements that are billable to clients are included in total revenues, and typically an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time-and-materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectibility is reasonably assured. We manage our business on the basis of revenue before reimbursable expenses. We believe this is the most accurate reflection of our services because it eliminates the effect of these reimbursable expenses that we bill to our clients.

Direct Client Service Costs

Compensation and Benefits

        Our most significant expenses are costs classified as direct client service costs. These direct client service costs include salaries, performance bonuses, payroll taxes, benefits and equity-based compensation for client service professionals.

47



Other Direct Client Service Costs

        In certain cases we incur fees paid to independent contractors that we retain to supplement full-time personnel, typically on an as-needed basis for specific client engagements.

Acquisition Retention Expenses

        We also incur compensation expense in connection with deferred payments that we agreed to make to certain employees of CVC in connection with the CVC acquisition in September 2005. The offers of employment to these employees included retention payments of $9.8 million paid in November 2005 and $11.4 million payable in installments of one-third on each of the first three anniversary dates of the CVC acquisition under the condition that the individuals are still employed by us as of the anniversary date. Retention payments to certain individuals may be accelerated if such individuals are terminated without cause. During 2006, we paid a total of $4.1 million to such employees. We recognize the expenses associated with these payments on a graded-tranche basis, whereby the first anniversary payment is recognized over the first 12 months since the CVC acquisition, the second anniversary payment is recognized over the first 24 months since the CVC acquisition, and the third anniversary payment is recognized over the 36-month period since the CVC acquisition, adjusted for any terminations that may result in an accelerated payment. There will be no further expense associated with these deferred payments for existing acquisitions after 2008.

Operating Expenses

        Our operating expenses include selling, general and administrative expenses, which consist of salaries, performance bonuses, payroll taxes, benefits and equity-based compensation for our corporate and administrative personnel, costs for occupancy, technology and communications, marketing and business development, recruiting, training, professional fees, depreciation and amortization and other operating expenses. In addition, operating expenses include costs associated with the CVC acquisition not otherwise included in "Acquisition Retention Expenses" described above. We do not expect to recognize any further CVC acquisition costs after 2006 other than the expenses associated with deferred payments described above.

Equity-Based Compensation

        Direct client service costs and selling, general and administrative expenses include equity-based compensation with respect to grants of units of D&P Acquisitions prior to the consummation of the Recapitalization Transactions. We have accounted for equity-based compensation in accordance with the fair value provisions of SFAS No. 123 (Revised), Share-Based Payment ("SFAS 123(R)") for the years ended December 31, 2006 and 2005. For the year ended December 31, 2004, we accounted for equity-based compensation in accordance APB No. 25. For the six months ended June 30, 2007 and the twelve months ended December 2006 and 2005, principles of option pricing theory were used to calculate the fair value of the subject grants. Under this methodology, periodic business enterprise valuations of D&P Acquisitions were performed. The business enterprise valuations were determined by various methodologies including the discounted future earnings method, the merger and acquisition method, and the guideline public company method, on a weighted and blended basis. The various classes of equity units of D&P Acquisitions were then modeled as call options with distinct claims on the assets of D&P Acquisitions. The characteristics of the equity unit classes, as determined in the D&P Acquisitions limited liability company agreement and unit grant agreements, determine the uniqueness of each unit's claim on D&P Acquisitions' assets relative to each other and the other components of D&P Acquisitions' capital structure. Periodic valuations were performed during 2006 and as of March 31, 2007 and June 30, 2007 in order to properly recognize equity-based compensation.

48



During 2006, our periodic business enterprise valuations increased as a result of the following significant factors:

    our positive financial performance relative to prior-year and sequential periods, and relative to initial internal budgets prepared by management. In particular, our revenues before reimbursable expenses for the years ended December 31, 2005 and December 31, 2006 increased from $73.9 million to $246.7 million, respectively, and our adjusted EBITDA for the years ended December 31, 2005 and December 31, 2006 increased from $10.8 million to $44.1 million, respectively. In addition, over the course of the period, we conducted periodic re-forecasts of our full-year results for 2006, which typically resulted in revised forecasts that were higher relative to the initial budget for the year;

    meaningful progress with respect to development of stand-alone operational infrastructure, including technology, finance and human capital functions, as well as real estate, separate from McGraw-Hill, which had been providing many services with respect to these items pursuant to a transitional services agreement that was entered into between us and McGraw-Hill subsequent to the CVC acquisition;

    entry into new service offerings and geographies, including the acquisition of Chanin (enabling us to expand our service offerings to include financial restructuring advice to constituencies in the business reorganization process), further diversifying our business and geographic mix and enhancing our prospects for future growth;

    increases in multiples of earnings of several of our comparable publicly traded peers; and

    greater visibility and likelihood, over the course of the period, with respect to the prospects for marketability of our equity securities.

        During the six months ended June 30, 2007 our periodic business enterprise valuations increased as a result of the following significant factors:

    our positive financial performance relative to prior-year and sequential periods, and relative to initial internal budgets prepared by management. In particular, our revenues before reimbursable expenses for the 12-month periods ended December 31, 2006 and June 30, 2007 increased from $246.7 million to $308.6 million, respectively, and our adjusted EBITDA for the 12-month periods ended December 31, 2006 and June 30, 2007 increased from $44.1 million to $66.1 million, respectively. In addition, over the course of the period, we conducted a re-forecast of our full-year results for 2007, which resulted in a revised forecast that was higher relative to the initial budget for the year;

    completion of the development of stand-alone operational infrastructure, including technology, finance and human capital functions, as well as real estate, separate from McGraw-Hill, which had been providing many services with respect to these items pursuant to a transitional services agreement that was entered into between us and McGraw-Hill subsequent to the CVC acquisition. We believe that the creation of our stand-alone infrastructure has and will continue to result in cost-savings and increased flexibility relative to being a party to the transitional services agreement;

    continued expansion of service offerings and geographies, including the opening or ramp-up of new offices in Munich, Paris and Zurich, further diversifying our business and geographic mix and enhancing our prospects for future growth;

    increases in multiples of earnings of several of our comparable publicly traded peers; and

    greater visibility and likelihood, over the course of the period, with respect to the prospects for marketability of our equity securities.

49


        The equity unit valuations included the key assumptions presented in the table below in determining fair value as of June 30, 2007 and December 31, 2006:

Valuation Date

  June 30, 2007
  December 31, 2006
Asset Volatility   23.0%   45.0%
Risk Free Rate   4.44%   5.00%
Expected Term of Units   0.1 year   0.8 year
Expected Dividends   None   None

        The Class C, D, E, and G Units issued to individuals as long-term incentive compensation were not options, but rather fully participating units in D&P Acquisitions. The C, D and G Units, as well as a majority of the E Units, were issued to individuals for future services in connection with the CVC and Chanin acquisitions, and therefore were one-time in nature; we do not believe that the level of unit grant activity in 2005 and 2006 as a result of acquisitions is representative of our ongoing equity issuance activity.

        The Class C, D, and E Units contained certain repurchase provisions which could result in an award being settled in cash in the event of certain types of termination scenarios. These provisions were invoked during 2006 and D&P Acquisitions established a policy to repurchase units upon these occurrences. As a result, during 2006, the expense recognition for the C, D, and E Units was under variable (also referred to as "liability") accounting until the award is settled, as per SFAS 123(R). Settlement occurs at the time of exercise, forfeiture, repurchase, or at the point in time where the unitholder has borne sufficient risks and rewards of equity ownership, also defined as six months and one day post-vesting. The fair values of these units are re-valued at each reporting period and any change in value is recognized in current period expense, until settled. As such, the fair value of the Class C, D and E Units is recognized in the current and long-term liabilities on our balance sheet. Upon settlement, the award is re-classified from a liability award to an equity award.

        In all cases of graded vesting, equity-based compensation expense is being accrued through charges to operations over the respective vesting periods of the equity grants using the accelerated method of amortization. The total equity-based compensation expense recognized for the six months ended June 30, 2007 and June 30, 2006 and the years ended December 31, 2006 and 2005 was $29.8 million, $4.2 million, $14.0 million and $3.9 million, respectively. Because D&P Acquisitions is a limited liability company, no tax benefit has been recognized. At June 30, 2007, the total unamortized compensation cost related to non-vested awards was $65.9 million. The weighted-average period over which this is expected to be recognized is 2.7 years.

        All the Class C, D, E and G Units will be converted into New Class A Units pursuant to the Recapitalization Transactions. Upon consummation of the Recapitalization Transactions, the repurchase provisions described above will be eliminated, and expense recognition will no longer be under liability accounting.

        Information with respect to applicable number of units by class in connection with equity-based compensation is set forth in the table below:

 
  As of June 30, 2007
 
  Vested
  Unvested
  Total
  Fair Value per Unit
Class C Units     99,516   99,516   $ 166.42
Class D Units     9,852,073   9,852,073   $ 3.57
Class E Units   2,778,666   14,776,834   17,555,500   $ 3.57
Class G Units   153,751   9,181,667   9,335,418   $ 3.23

The fair value per unit for the Class C Units is substantially higher than that of the Class D, Class E and Class G Units because the Class C Units entitle the holders thereof to a preference upon liquidation while the Class D, Class E and Class G Units represent only profits interests.

50


Results of Operations

Six months ended June 30, 2007 versus six months ended June 30, 2006

Revenues

        Revenues, excluding reimbursable expenses, increased $61.9 million, or 60.3%, to $164.6 million for the six months ended June 30, 2007 from $102.7 million for the six months ended June 30, 2006. Of the overall $61.9 million increase in revenues, $39.4 million is attributable to our Financial Advisory segment and $22.5 million is attributable to our Investment Banking segment, including $9.5 million attributable to the inclusion of the restructuring advisory business as a result of the Chanin acquisition. Our client service headcount increased to 686 client service professionals at June 30, 2007 from 567 client service professionals at June 30, 2006, as we added a significant number of client service professionals through the Chanin acquisition and new hiring in our Financial Advisory segment. Our revenue per client service professional increased to approximately $240,000 during the six months ended June 30, 2007 from approximately $189,000 during the six months ended June 30, 2006. In addition to the impact of the Chanin acquisition and new hiring, we believe that we have been able to increase productivity per client service professional as a result of increased marketing activity, greater name awareness as a result of our increased scale, and continued strength in the M&A marketplace and the economy in general. See "—Segment Results" for additional information.

Direct Client Service Costs

        Direct client service costs increased $43.3 million, or 57.7%, to $118.3 million for the six months ended June 30, 2007 from $75.0 million for the six months ended June 30, 2006. Compensation and benefits increased $46.0 million, or 71.7%, to $110.1 million for the six months ended June 30, 2007 from $64.1 million for the six months ended June 30, 2006. Of the $46.0 million increase in compensation, $19.1 million is attributable to higher equity-based compensation primarily as a result of liability accounting treatment and the inclusion of equity grants associated with the Chanin acquisition, with the balance due to increased compensation (other than equity-based compensation) as a result of the Chanin acquisition, new hiring activity and promotions and compensation increases of various client service professionals. Expenses related to retention payments associated with the CVC acquisition decreased by $2.9 million to $1.3 million for the six months ended June 30, 2007 from $4.2 million for the six months ended June 30, 2006. See "—Direct Client Service Costs—Acquisition Retention Expenses."

Operating Expenses

        Operating expenses increased $19.2 million, or 55.9%, to $53.6 million for the six months ended June 30, 2007 from $34.4 million for the six months ended June 30, 2006. Of the $19.2 million increase, $6.5 million is attributable to higher equity-based compensation primarily as a result of liability accounting treatment, with the balance due to increases in compensation (other than equity-based compensation) as a result of acquisitions, new hiring activity, promotions and compensation increases for individuals not classified as client service professionals, higher occupancy expenses associated with expanded or new office locations (including several lease termination charges) and increases in other operating expenses as a result of our growth and investment in infrastructure.

        Depreciation and amortization increased $0.4 million, or 8.6%, to $4.4 million for the six months ended June 30, 2007 from $4.0 million for the six months ended June 30, 2006. Depreciation and amortization of property and equipment increased as a result of additions to real estate and technology infrastructure to support our growth and amortization of intangibles associated with the Chanin acquisition.

51



Operating Income/(Loss)

        Operating loss increased $1.1 million to $(1.2) million for the six months ended June 30, 2007 from $(0.1) million for the six months ended June 30, 2006. The increase in operating loss was primarily due to increases in direct client service costs and operating expenses, partially offset by the increase in revenues as described above. In particular, total equity-based compensation increased $25.6 million to $29.8 million for the six months ended June 30, 2007 from $4.2 million for the six months ended June 30, 2006, primarily as a result of liability accounting treatment and the inclusion of equity grants associated with the Chanin acquisition.

        Adjusted EBITDA increased $22.0 million, to $34.4 million for the six months ended June 30, 2007 from $12.4 million for the six months ended June 30, 2006.

        The Adjusted EBITDA measure presented consists of net income/loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs.

        We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred recently as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (b) equity-based compensation (a significant portion of which is due to certain one-time grants associated with recent acquisitions) and (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions.

        Given our recent level of acquisition activity and related capital investments and equity grants (which we do not expect to incur at the same levels in the future), and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. A measure substantially similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our senior secured credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income/(loss). Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.

        Adjusted EBITDA is a non-GAAP measure that has material limitations because it does not include all items of income and expense that impact or have impacted our operations, including (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisitions retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs. This non-GAAP financial measure in not prepared in accordance with, and should not be considered an alternative to, measurements required by

52



GAAP, such as operating income, net income/(loss), net income/(loss) per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.

        The following is a reconciliation of our net loss to Adjusted EBITDA:

 
  Six Months Ended
June 30,

 
 
  2007
  2006
 
 
  (in thousands)

 
Net loss   $ (4,713 ) $ (1,689 )
Provision / (benefit) for income taxes     946     (27 )
Interest expense     3,571     2,570  
Interest income     (829 )   (128 )
Other income     (192 )   (785 )
Depreciation and amortization     4,398     4,048  
Acquisition retention expenses     1,331     4,178  
Equity based compensation included in "compensation and benefits"     22,041     2,889  
Equity based compensation included in "selling, general and administrative"     7,798     1,298  
   
 
 
Adjusted EBITDA   $ 34,351   $ 12,354  
   
 
 

Net Income/(Loss)

        Net loss increased $3.0 million to $(4.7) million for the six months ended June 30, 2007 from $(1.7) million for the six months ended June 30, 2006. The increase in net loss was primarily due to the $25.6 million increase in equity-based compensation as described above, a $1.0 million increase in provision for income taxes, and a $1.0 million increase in interest expense as a result of our higher average debt balance during the six months ended June 30, 2007 compared to the six months ended June 30, 2006, partially offset by a $0.7 million increase in interest income as a result of our higher average cash balance during the six months ended June 30, 2007 compared to the six months ended June 30, 2006, in addition to the other factors described above.

Year ended December 31, 2006 versus year ended December 31, 2005

Revenues

        Revenues, excluding reimbursable expenses, increased $172.8 million, or 233.8%, to $246.7 million for the year ended December 31, 2006 from $73.9 million for the year ended December 31, 2005. Revenues for the year ended December 31, 2006 included revenues generated by Chanin since November 1, 2006 and revenues of CVC for the entire year. Revenues for the year ended December 31, 2005 included revenues generated by CVC since October 1, 2005 and did not include revenues of Chanin.

        Of the overall $172.8 million increase in revenues, $101.8 million is attributable to the inclusion of the CVC business for all of 2006, $4.5 million is attributable to the inclusion of Chanin since November 1, 2006 and the balance is attributable to increased client service professional headcount and productivity improvements. Our client service headcount increased to 671 client service professionals at December 31, 2006 from 509 client service professionals at December 31, 2005, as we added a significant number of client service professionals through the Chanin acquisition and new hiring in our Financial Advisory segment, particularly in areas such as specialty tax and corporate finance consulting

53



services. Our revenue per client service professional increased to approximately $416,000 in 2006 from approximately $377,000 in 2005. In addition to the impact of acquisitions and hiring, we believe that we have been able to increase productivity per client service professional as a result of increased marketing activity, greater name awareness as a result of our increased scale, and continued strength in the M&A marketplace and the economy in general. See "—Segment Results" for additional information.

Direct Client Service Costs

        Direct client service costs increased $105.9 million, or 174.2%, to $166.6 million for the year ended December 31, 2006 from $60.8 million for the year ended December 31, 2005. Direct client service costs for the year ended December 31, 2006 included costs associated with Chanin since November 1, 2006 and costs associated with CVC for the entire year. Direct client service costs for the year ended December 31, 2005 included costs associated with CVC since October 1, 2005 and did not include costs associated with Chanin. Approximately $94.4 million of the increase is attributable to increases in compensation (other than equity-based compensation) as a result of acquisitions, new hiring activity and promotions and compensation increases of various client service professionals. Equity-based compensation increased $8.1 million, reflecting the inclusion of equity grants associated with the CVC acquisition for all of 2006 and the Chanin acquisition since November 1, 2006, as well as liability treatment for our equity-based compensation expense during 2006. Expenses related to retention payments associated with the CVC acquisition decreased by $5.7 million to $6.0 million for the year ended December 31, 2006 from $11.7 million for the year ended December 31, 2005. These payments include $9.8 million of retention payments paid in 2005 and aggregate retention payments of $11.4 million payable in installments of one-third on each of the first three anniversary dates of the CVC acquisition under the condition that the individuals are still employed by us at the anniversary date. Such payments have been recognized on a graded-tranche basis. See "—Direct Client Service Costs — Acquisition Retention Expenses."

Operating Expenses

        Operating expenses increased $48.7 million, or 176.8%, to $76.3 million for the year ended December 31, 2006 from $27.6 million for the year ended December 31, 2005. Operating expenses for the year ended December 31, 2006 included costs associated with Chanin since November 1, 2006. Operating expenses for the year ended December 31, 2005 included costs associated with CVC since October 1, 2005. $46.4 million of the increase is attributable to selling, general and administrative expenses, including a $31.6 million increase in non-compensation expense as a result of acquisitions, higher occupancy costs and other operating expenses associated with our growth, a $12.8 million increase in compensation (other than equity-based compensation) as a result of acquisitions, new hiring activity, promotions and compensation increases of individuals not classified as client service professionals, and a $2.0 million increase in equity-based compensation as a result of the recognition of certain equity grants for all of 2006 compared to the period of October 1 through December 31 for 2005, as well as liability treatment for our equity-based compensation during 2006. In addition, during 2005 we incurred approximately $2.1 million of non-recurring merger and acquisition costs associated with the CVC acquisition.

        Depreciation and amortization increased $4.5 million, or 141.7%, to $7.7 million for the year ended December 31, 2006 from $3.2 million for the year ended December 31, 2005. Depreciation and amortization for the year ended December 31, 2006 included expense associated with Chanin since November 1, 2006 and a full year of depreciation and amortization of assets acquired in the CVC acquisition. Depreciation and amortization for the year ended December 31, 2005 included expense associated with CVC since October 1, 2005. In addition, depreciation and amortization of property and equipment increased as a result of additions to real estate and technology infrastructure to support our growth.

54



Operating Income/(Loss)

        Operating income increased $26.4 million, to $16.3 million for the year ended December 31, 2006 from $(10.1) million for the year ended December 31, 2005. The increase was primarily due to the increase in revenues, partially offset by increases in direct client service costs and operating expenses as described above. In particular, total equity-based compensation increased $10.1 million to $14.0 million for the year ended December 31, 2006 from $3.9 million for the year ended December 31, 2005, primarily as a result of liability accounting treatment and the inclusion of grants associated with the CVC acquisition for all of 2006 and the Chanin acquisition from November 1, 2006.

        Adjusted EBITDA increased $33.2 million, to $44.1 million for the year ended December 31, 2006 from $10.8 million for the year ended December 31, 2005.

        The Adjusted EBITDA measure presented consists of net income/loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs.

        We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital costs that have been incurred recently as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (b) equity-based compensation (a significant portion of which is due to certain one-time grants associated with recent acquisitions) and (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions.

        Given our recent level of acquisition activity and related capital investments and equity grants, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance, compensation and operating expense characteristics and to compare our performance to that of certain of our competitors. Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our senior secured credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income/(loss). Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.

        Adjusted EBITDA is a non-GAAP measure that has material limitations because it does not include all items of income and expense that impact or have impacted our operations, including (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisitions retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs. This non-GAAP financial measure in not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating income, net income/(loss), net income/(loss) per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance

55



with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.

        The following is a reconciliation of our net income/(loss) to Adjusted EBITDA:

 
  Year Ended December 31,
 
 
  2006
  2005
 
 
  (in thousands)

 
Adjusted EBITDA reconciliation              
Net income/(loss)   $ 10,499   $ (12,495 )
Provision for income taxes     701     330  
Interest expense     5,911     1,661  
Interest income     (556 )   (137 )
Other (income)/expense     (243 )   542  
Depreciation and amortization     7,702     3,186  
Acquisition retention expenses     6,003     11,695  
Equity-based compensation included in "compensation and benefits"     10,244     2,113  
Equity-based compensation included in "selling, general and administrative"     3,790     1,803  
Merger and acquisition costs         2,138  
   
 
 
Adjusted EBITDA   $ 44,051   $ 10,836  
   
 
 

Net Income/(Loss)

        Net income increased $23.0 million to $10.5 million for the year ended December 31, 2006 from $(12.5) million for the year ended December 31, 2005. The increase was primarily due to the increase in revenues, partially offset by increases in direct client service costs and operating expenses as described above. Interest expense increased $4.3 million as a result of our higher average debt balance during the year ended December 31, 2006 compared to the year ended December 31, 2005. In addition, provision for income taxes increased $0.4 million and interest income increased by $0.4 million during the year ended December 31, 2006 compared to the year ended December 31, 2005.

        With respect to ongoing operations in 2007 and beyond, we expect the following key trends to be relevant to our operating results:

    inclusion of Chanin, which was acquired on October 31, 2006, for a full year.

    during 2006, we increased our number of client service managing directors from 101 at December 31, 2005 to 113 at December 31, 2006, through external hiring and internal promotions. During 2007, we expect to continue hiring additional managing directors. We anticipate that some of these managing directors may not be in a position to generate revenues for a period of six months or more, as they will initially focus their time on new business development efforts. Additionally, some of these managing directors may be subject to restrictive covenants and may require additional time to establish new client relationships.

    during 2006, we increased our number of client service professionals, excluding managing directors, from 408 at December 31, 2005 to 558 at December 31, 2006. During 2007, we expect to hire additional client service professionals to expand support for our existing practices and better leverage our existing managing directors.

    during 2007 and beyond, we expect to continue to hire additional administrative staff, to enhance our infrastructure and to increase legal and financial compliance costs to comply with rules and regulations associated with being a public company.

56


    during 2005 and 2006, we incurred a significant level of equity-based compensation due to equity grants that were made in connection with the CVC and Chanin acquisitions. We do not believe that the level of unit grant activity in 2005 and 2006 as a result of these acquisitions is representative of our ongoing equity issuance activity.

    D&P Acquisitions has historically operated as a limited liability company and was treated as a partnership for U.S. federal income tax purposes. As a result, its income has not been subject to U.S. federal income taxes. Income taxes shown on D&P Acquisitions' historical statements of operations are attributable to state, local and international income taxes. Following the Offering Transactions, we will be subject to U.S. federal income taxes, in addition to state, local and international taxes, with respect to our allocable share of any net taxable income of D&P Acquisitions, which will result in higher income taxes and an increase in income taxes paid. For information on our pro forma effective tax rate following the Offering Transactions, see "Unaudited Pro Forma Financial Information."

Year ended December 31, 2005 versus year ended December 31, 2004

        For purposes of the following comparison, we refer to the full-year 2004 financials of Duff & Phelps, LLC by combining the financial statements of Duff & Phelps, LLC that reflect the results of operations before and after the impact of the March 15, 2004 transaction in which an investor group consisting of management and Lovell Minnick purchased the interests of Duff & Phelps, LLC from Webster. That transaction constituted a change of control and required purchase accounting revaluation of Duff & Phelps, LLC's assets and liabilities.

Revenues

        Revenues, excluding reimbursable expenses, increased $45.1 million, or 156.0%, to $73.9 million for the year ended December 31, 2005 from $28.9 million for the year ended December 31, 2004. Revenues for the year ended December 31, 2005 included revenues generated by CVC since October 1, 2005.

        Of the overall $45.1 million increase in revenues, $35.5 million is attributable to the inclusion of the CVC business from October 1, 2005 through December 31, 2005, and the balance is attributable to increased client service professional headcount and productivity improvements. Our client service headcount increased to 509 client service professionals at December 31, 2005 from 75 client service professionals at December 31, 2004, primarily due to the addition of a significant number of professionals through the CVC acquisition. Our revenue per client service professional decreased to approximately $377,000 in 2005 from approximately $415,000 in 2004.

Direct Client Service Costs

        Direct client service costs increased $40.5 million, or 199.3%, to $60.8 million for the year ended December 31, 2005 from $20.3 million for the year ended December 31, 2004. Direct client service costs for the year ended December 31, 2005 included costs associated with CVC since October 1, 2005. Approximately $18.9 million of the increase is attributable to increases in compensation (other than equity-based compensation) as a result of the CVC acquisition. Equity-based compensation increased $2.1 million as a result of equity grants made in connection with the CVC acquisition and the adoption of SFAS 123(R) as of January 1, 2005. Expenses related to retention payments associated with the CVC acquisition were $11.7 million in 2005. These payments include $9.8 million of retention payments paid in 2005 and aggregate retention payments of $11.4 million payable in installments of one-third on each of the first three anniversary dates of the CVC acquisition under the condition that the individuals are still employed by us at the anniversary date. Such payments have been recognized on a graded-tranche basis. See "—Direct Client Service Costs—Acquisition Retention Expenses."

57



Operating Expenses

        Operating expenses increased $19.5 million, or 243.4%, to $27.6 million for the year ended December 31, 2005 from $8.0 million for the year ended December 31, 2004. Operating expenses for the year ended December 31, 2005 included costs associated with CVC since October 1, 2005. Approximately $9.4 million of the increase is attributable to selling, general and administrative expenses associated with the CVC acquisition. Equity-based compensation increased $1.8 million, as a result of equity grants made in connection with the CVC acquisition and the adoption of SFAS 123(R) as of January 1, 2005. In addition, during 2005, we incurred approximately $2.1 million of non-recurring merger and acquisition costs associated with the CVC acquisition.

        Depreciation and amortization increased $1.8 million, or 136.0%, to $3.2 million for the year ended December 31, 2005 from $1.4 million for the year ended December 31, 2004. Depreciation and amortization for the year ended December 31, 2005 included expense associated with CVC since October 1, 2005. In addition, depreciation and amortization of property and equipment increased as a result of additions to real estate and technology infrastructure to support our growth.

Operating Income

        Operating income decreased $12.3 million, to $(10.1) million for the year ended December 31, 2005 from $2.2 million for the year ended December 31, 2004. The decrease was primarily due to the increase in direct client service costs and operating expenses associated with the CVC acquisition, particularly acquisition retention payments and equity-based compensation, partially offset by increases in revenues as described above. In particular, total equity-based compensation increased $3.9 million for the year ended 2005 from zero for the year ended 2004 as a result of the adoption of SFAS 123(R) and equity grants made in connection with the CVC acquisition.

        Adjusted EBITDA increased $7.3 million to $10.8 million for the year ended December 31, 2005 from $3.5 million for the year ended December 31, 2004.

        The Adjusted EBITDA measure presented consists of net income/loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs.

        We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred recently as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (b) equity-based compensation (a significant portion of which is due to certain one-time grants associated with recent acquisitions) and (c) acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions.

        We believe that Adjusted EBITDA is useful to investors to provide them with disclosures of our operating results on the same basis as that used by our management. Additionally, our management believes that Adjusted EBITDA provides useful information to investors about the performance of the Company's overall business because such measure eliminates the effects of unusual or other infrequent charges that are not directly attributable to our underlying operating performance.

        Given our recent level of acquisition activity and related capital investments and equity grants, (which we do not expect to incur at the same levels in the future), and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the

58



Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. A measure substantially similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our senior secured credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income/(loss). Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.

        Adjusted EBITDA is a non-GAAP measure that has material limitations because it does not include all items of income and expense that impact or have impacted our operations, including (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisitions retention expenses, (f) equity-based compensation included in "compensation and benefits," (g) equity-based compensation included in "selling, general and administrative" and (h) merger and acquisition costs. This non-GAAP financial measure in not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating income, net income/(loss), net income/(loss) per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.

        The following is a reconciliation of our net income/(loss) to Adjusted EBITDA:

 
  Year Ended December 31,
 
 
  2005
  2004
 
 
  (in thousands)

 
Adjusted EBITDA reconciliation              
Net income/(loss)   $ (12,495 ) $ 1,797  
Provision for income taxes     330     75  
Interest expense     1,661     330  
Interest income     (137 )   (46 )
Other (income)/expense     542      
Depreciation and amortization     3,186     1,350  
Acquisition retention expenses     11,695      
Equity-based compensation included in "compensation and benefits"     2,113      
Equity-based compensation included in "selling, general and administrative"     1,803      
Merger and acquisition costs     2,138      
   
 
 
Adjusted EBITDA   $ 10,836   $ 3,506  
   
 
 

Net Income/(Loss)

        Net income decreased $14.3 million to $(12.5) million for the year ended December 31, 2005 from $1.8 million for the year ended December 31, 2004. The decrease was primarily due to increases in direct client service costs and operating expenses as described above, partially offset by increases in revenues. Interest expense increased $1.3 million as a result of our higher average debt balance during

59



the year ended December 31, 2005 compared to the year ended December 31, 2004. In addition, provision for income taxes increased $0.3 million and interest income increased by $0.1 million during the year ended December 31, 2005 compared to the year ended December 31, 2004.

Segment Results

        During 2006, we determined that we provide services through two segments: Financial Advisory and Investment Banking. Results for 2005 and 2004 have been adjusted to reflect this determination, which was made as a result of the evolution and growth of our Investment Banking segment, particularly after the acquisition of Chanin. During 2004, we operated in only the Investment Banking segment and as a result there is no comparative discussion with respect to 2004 contained herein. The Financial Advisory segment provides valuation advisory services, corporate finance consulting services, dispute and legal management consulting and specialty tax advisory services. The revenue model associated with this segment is generally based on time-and-materials. The Investment Banking segment provides merger and acquisition advisory services, transaction opinions and financial restructuring advisory services. The revenue model associated with this segment is generally based on fixed retainers, fixed fees and contingent fees upon the successful completion of a transaction. Segment operating income consists of revenues generated by the segment, less the direct and allocated costs of revenue and selling, general and administrative costs that are incurred by or allocated to the segment.

        The Company does not report separate balance sheet information by segment.

        The following tables set forth selected segment operating results for the periods indicated.

 
  Six Months ended June 30,
  Year Ended December 31,
 
Segment Operating Data

  2007
  2006
  2006
  2005
  2004
 
 
  (in thousands)

 
Financial Advisory:                                
Revenue   $ 124,432   $ 85,078   $ 189,486   $ 35,460   $  
Segment operating income     20,562     10,836     27,045     5,846      
Operating income margin     16.5 %   12.7 %   14.3 %   16.5 %    

Investment Banking:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Revenue   $ 40,131   $ 17,598   $ 57,256   $ 38,466   $ 28,876  
Segment operating income     13,816     1,283     17,165     5,217     3,506  
Operating income margin     34.4 %   7.3 %   30.0 %   13.6 %   12.1 %

Total Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Revenue   $ 164,563   $ 102,676   $ 246,742   $ 73,926   $ 28,876  
Reimbursable expenses     6,058     6,574     12,526     4,313     1,611  
   
 
 
 
 
 
Total revenue and reimbursable expenses   $ 170,621   $ 109,250   $ 259,268   $ 78,239   $ 30,487  
   
 
 
 
 
 

Statement of Operations Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Total segment operating income   $ 34,378   $ 12,119   $ 44,210   $ 11,063   $ 3,506  
Charges not allocated at the segment level:                                
  Net client reimbursable expenses/(income)     27     (235 )   159     228      
  Equity-based compensation     29,839     4,187     14,034     3,916      
  Depreciation and amortization     4,398     4,048     7,702     3,186     1,350  
  Acquisition retention payments     1,331     4,178     6,003     13,832      
   
 
 
 
 
 
Operating income/(loss)     (1,217 )   (59 )   16,312     (10,099 )   2,156  
  Interest expense, net     2,742     2,442     5,355     1,524     284  
  Other (income)/expense     (192 )   (785 )   (243 )   542      
   
 
 
 
 
 
Net income/(loss) before provision/(benefit) for income taxes     (3,767 )   (1,716 )   11,200     (12,165 )   1,872  
  Income tax provision/(benefit)     946     (27 )   701     330     75  
   
 
 
 
 
 
Net/(loss)income   $ (4,713 ) $ (1,689 ) $ 10,499   $ (12,495 ) $ 1,797  
   
 
 
 
 
 

60


Six months ended June 30, 2007 versus six months ended June 30, 2006

Financial Advisory

Revenues

        Financial Advisory segment revenues increased $39.3 million, or 46.3%, to $124.4 million for the six months ended June 30, 2007 from $85.1 million for the six months ended June 30, 2006, reflecting increased client service professional headcount and productivity improvement in terms of revenue per client service professional. Of the overall $39.3 million increase in revenues, $30.3 million is attributable to a higher number of chargeable hours as a result of the increase in the number of client service professionals and $9.0 million is attributable to higher rate per hour. Our Financial Advisory client service professional headcount increased to 588 client service professionals at June 30, 2007 from 490 client service professionals at June 30, 2006, with significant growth resulting from new hiring in specialty tax, corporate finance consulting services and in our international offices. Our revenue per client service professional increased to approximately $214,000 in the six months ended June 30, 2007 from approximately $185,000 in the six months ended June 30, 2006. Our client service utilization rate increased to 69.3% for the six months ended June 30, 2007 from 67.7% for the six months ended June 30, 2006, primarily as a result of the ability to better leverage the staff on engagements and better productivity from the new hires within the specialty tax, corporate finance consulting services and international offices. Our average rate per hour increased $32 to $325 for the six months ended June 30, 2007 from $293 for the six months ended June 30, 2006. The utilization rate for any given period is calculated by dividing the number of hours all our Financial Advisory client service professionals worked on client assignments during the period by the total available working hours for all of our client service professionals during the same period, assuming a forty-hour work week, less paid holidays and vacation days. Average rate per hour for any given period is calculated by dividing revenues for the period by the number of hours worked on client assignments during the same period.

Segment Operating Income

        Financial Advisory segment operating income increased $9.8 million, or 90.7%, to $20.6 million for the six months ended June 30, 2007 from $10.8 million for the six months ended June 30, 2006. Operating income margin, defined as segment operating income expressed as a percentage of segment revenues, increased to 16.5% for the six months ended June 30, 2007 from 12.7% for the six months ended June 30, 2006, due to higher revenue and leveraging of our expense structure.

Investment Banking

Revenues

        Investment Banking segment revenues increased $22.5 million, or 128.0%, to $40.1 million for the six months ended June 30, 2007 from $17.6 million for the six months ended June 30, 2006, reflecting increased client service professional headcount primarily as a result of the acquisition of Chanin, and productivity improvements in terms of revenue per client service professional as a result of higher volume of merger and acquisition and transaction opinion activity and higher revenue per assignment. Our Investment Banking client service professional headcount increased to 98 client service professionals at June 30, 2007 from 77 client service professionals at June 30, 2006. Our revenue per client service professional increased to approximately $388,000 in the six months ended June 30, 2007 from approximately $211,000 in the six months ended June 30, 2006.

Segment Operating Income

        Investment Banking segment operating income increased $12.5 million to $13.8 million for the six months ended June 30, 2007 from $1.3 million for the six months ended June 30, 2006. Operating income margin, defined as segment operating income expressed as a percentage of segment revenues,

61



increased to 34.4% for the six months ended June 30, 2007 from 7.3% for the six months ended June 30, 2006 due to higher revenue and leveraging of our expense structure.

Year ended December 31, 2006 versus year ended December 31, 2005

Financial Advisory

Revenues

        Financial Advisory segment revenues increased $154.0 million, or 434.4%, to $189.5 million for the year ended December 31, 2006 from $35.5 million for the year ended December 31, 2005. Revenues for the year ended December 31, 2005 included revenues generated by CVC since October 1, 2005.

        Of the overall $154.0 million increase in revenues, $101.8 million is attributable to the inclusion of the CVC business for all of 2006, and the balance is attributable to increased client service professional headcount through new hiring activities and productivity improvement in terms of revenue per client service professional. Our Financial Advisory client service headcount increased to 553 client service professionals at December 31, 2006 from 425 client service professionals at December 31, 2005, with significant growth resulting from hiring in specialty tax and corporate finance consulting services. In addition to the impact of acquisitions and new hiring, we believe that we have been able to increase revenue per client service professional in our Financial Advisory segment as a result of increased marketing activity, greater name awareness due to our increased scale and continued strength in the M&A marketplace and economy in general. Our revenue per client service professional increased to approximately $375,000 in 2006 from approximately $343,000 in 2005. Our client service utilization rate decreased to 68.1% for the year ended December 31, 2006 from 71.4% for the year ended December 31, 2005 (pro forma for the CVC acquisition as if it had occurred on January 1, 2005), as a result of significant new hiring activity in our Financial Advisory segment. Our average rate per hour increased $36 to $300 for the year ended December 31, 2006 from $264 for the year ended December 31, 2005 (pro forma for the CVC transaction as if it had occurred on January 1, 2005). The utilization rate for any given period is calculated by dividing the number of hours all our Financial Advisory client service professionals worked on client assignments during the period by the total available working hours for all of our client service professionals during the same period, assuming a forty-hour work week, less paid holidays and vacation days. Average rate per hour for any given period is calculated by dividing revenues for the period by the number of hours worked on client assignments during the same period.

Segment Operating Income

        Financial Advisory segment operating income increased $21.2 million, or 362.6%, to $27.0 million for the year ended December 31, 2006 from $5.8 million for the year ended December 31, 2005. Operating income margin, defined as segment operating income expressed as a percentage of segment revenues, decreased to 14.3% in 2006 from 16.5% in 2005, due to higher direct client service costs and operating expenses.

Investment Banking

Revenues

        Investment Banking segment revenues increased $18.8 million, or 48.8%, to $57.3 million for the year ended December 31, 2006 from $38.5 million for the year ended December 31, 2005. Revenues for the year ended December 31, 2006 included revenues generated by Chanin since November 1, 2006.

        Of the overall $18.8 million increase in revenues, $4.5 million is attributable to the inclusion of Chanin since November 1, 2006, and the balance is attributable primarily to productivity improvements in terms of revenue per client service professional, as a result of higher volume of merger and acquisition and transaction opinion activity and higher revenue per assignment. In addition to the impact of acquisitions, we believe that we have been able to increase productivity per person in our

62



Investment Banking segment as a result of increased marketing activity, greater name awareness due to our increased scale and continued strength in the M&A marketplace and economy in general. Our Investment Banking client service headcount increased to 118 client service professionals at December 31, 2006 from 84 client service professionals at December 31, 2005. Our revenue per client service professional increased to approximately $653,000 in 2006 from approximately $415,000 in 2005.

Segment Operating Income

        Investment Banking segment operating income increased $11.9 million, or 229.0%, to $17.2 million for the year ended December 31, 2006 from $5.2 million for the year ended December 31, 2005. Operating income margin, defined as segment operating income expressed as a percentage of segment revenues, increased to 30.0% in 2006 from 13.6% in 2005, due primarily to higher productivity per client service professional.

Liquidity and Capital Resources

        Our primary sources of liquidity are cash flows from operations and debt capacity available under our credit facility. Our historical cash flows are primarily related to the timing of receipt of Financial Advisory and Investment Banking revenues, payment of base compensation, benefits and operating expenses, and the timing of payment of bonuses to professionals and tax distributions to members of D&P Acquisitions. Typically, we accrue performance bonuses during the course of the calendar year, therefore generating cash, which is used to fund bonus payments to our personnel early in the following year. In addition, as a limited liability company, D&P Acquisitions does not incur significant federal or state and local taxes, which taxes are primarily the obligations of our members. Therefore, D&P Acquisitions makes periodic distributions to its members based on estimates of taxable income and assumptions about marginal tax rates. The marginal tax rate that has initially been set is 45%. In January 2007, D&P Acquisitions made a $12.2 million tax distribution with respect to 2006 taxable income. D&P Acquisitions is only required to make such distributions if cash is available for such purposes. Additional tax distributions of approximately $16.7 million in the aggregate have been or are anticipated to be made in the third quarter of 2007. Cash and cash equivalents decreased from $59.1 million at December 31, 2006 to $42.6 million at June 30, 2007, primarily due to the payment of bonuses to our professionals and tax distributions to the members of D&P Acquisitions with respect to 2006, offset by cash flow from operations. Cash and cash equivalents increased from $12.1 million at December 31, 2005 to $59.1 million at December 31, 2006, primarily due to cash flow from operations (including accrual of bonuses) and proceeds from issuance of debt as described below. Foreign currency translation gains and losses were immaterial for the six months ended June 30, 2007 and 2006 and the years ended December 31, 2006, 2005 and 2004.

Operating Activities

        During the six months ended June 30, 2007, cash of $0.8 million was provided by operating activities, primarily as a result of non-cash equity-based compensation and depreciation and amortization, partially offset primarily by payment of bonuses with respect to 2006 and increases in accounts receivable and unbilled services. During the six months ended June 30, 2006, cash of $13.3 million was used by operating activities, primarily as a result of payment of bonuses with respect to 2005, partially offset primarily by non-cash equity-based compensation. During the year ended December 31, 2006, cash of $40.9 million was provided by operating activities, including $10.5 million from net income. During the year ended December 31, 2005, cash of $5.1 million was provided by operating activities, offsetting a $12.5 million net loss during the period. The increase in cash provided by operating activities is largely attributable to higher net income as a result of overall growth in the business, higher non-cash equity-based compensation and accrued bonus compensation, partially offset by a higher investment in working capital (primarily accounts receivable) due to the increase in revenue.

63



Investing Activities

        During the six months ended June 30, 2007 and 2006, cash of $4.8 million and $2.5 million, respectively, was used for investing activities, relating to the purchase of property and equipment. During the year ended December 31, 2006, cash of $21.9 million was used for investing activities, including the cash portion of the purchase price in connection with the acquisition of Chanin, net of cash acquired. Investment in property, plant and equipment increased $7.4 million to $10.8 million for the year ended December 31, 2006 from $3.4 million for the year ended December 31, 2005, primarily as a result of increased investment in real estate and technology infrastructure following the CVC acquisition and to support our continued growth. During the year ended December 31, 2005, cash of $124.8 million was used for investing activities, including the cash portion of the purchase price in connection with the acquisition of CVC. The decrease in the cash used for investing activities is largely attributable to the cash purchase price for CVC during 2005.

Financing Activities

        During the six months ended June 30, 2007, cash of $12.7 million was used for financing activities, primarily as a result of tax distributions to and equity repurchases from members of D&P Acquisitions. During the six months ended June 30, 2006, cash of $14.4 million was provided by financing activities, primarily as a result of the delayed-draw term loan associated with the CVC acquisition. During the year ended December 31, 2006, cash of $27.7 million was provided by financing activities, including proceeds of $30.0 million from issuance of debt in connection with the acquisitions of Chanin and CVC, partially offset primarily by repayments of debt, repurchase of equity units and distributions to unitholders. The effect of exchange rates on cash and equivalents was $0.3 million during the period. During the year ended December 31, 2005, cash of $119.5 million was provided by financing activities, including proceeds of $81.1 million from issuance of equity and $49.2 million from issuance of debt in connection with the CVC acquisition, partially offset primarily by repayments of debt and distributions to members of D&P Acquisitions. There was no effect of exchange rates on cash and equivalents during the period.

        Duff & Phelps, LLC, a subsidiary of D&P Acquisitions, entered into a senior secured credit facility, dated as of September 30, 2005, as amended on June 14, 2006 and October 31, 2006, with a syndicate of financial institutions, including General Electric Capital Corporation as administrative agent. The credit facility provides for a $80.0 million term loan facility that matures on October 1, 2012 and a revolving credit facility with a $20.0 million aggregate loan commitment amount available, including a $5.0 million sub-facility for letters of credit and a $5.0 million swingline facility, that matures on October 1, 2011.

        All obligations under the credit facility are unconditionally guaranteed by each of our existing and future subsidiaries, other than certain foreign and regulated subsidiaries. The credit facility and the related guarantees are secured by substantially all of Duff & Phelps, LLC's present and future assets and all present and future assets of each guarantor on a first lien basis.

        At June 30, 2007, $79.0 million was outstanding under the term loan facility (before debt discount) and no amount was outstanding under the revolving credit facility. Borrowings under the credit facility bear interest at a rate based on LIBOR plus a margin of 2.75%. We incur an annual commitment fee of 0.5% of the unused portion of the revolving credit facility and 1% on the unused portion of the term loan facility.

        The credit facility includes customary events of default and covenants for maximum net debt to EBITDA, minimum interest coverage ratio and maximum capital expenditures. We were in compliance with the financial covenants at June 30, 2007. The credit facility requires a mandatory prepayment in an amount equal to half the Excess Cash Flow (as defined in the credit agreement) for fiscal year 2006 and each fiscal year thereafter if it is positive. Excess Cash Flow was negative for fiscal year 2006. See "Description of Indebtedness—Senior Secured Credit Facility."

64


        We intend to use a portion of the proceeds from this offering to repay a portion of the borrowings under this credit facility.

        We regularly monitor our liquidity position, including cash, other significant working capital assets and liabilities, debt, and other matters relating to liquidity and compliance with regulatory net capital requirements.

        As a result of our acquisitions of D&P Acquisitions interests, we expect to benefit from depreciation and other tax deductions reflecting D&P Acquisitions' tax basis for its assets. Those deductions will be allocated to us and will be taken into account in reporting our taxable income. Further, as a result of a federal income tax election made by D&P Acquisitions applicable to a portion of our acquisition of D&P Acquisitions interests, the income tax basis of the assets of D&P Acquisitions underlying a portion of the interests we acquire will be adjusted based upon the amount that we have paid for that portion of our D&P Acquisitions interests. We intend to enter into an agreement with the existing unitholders of D&P Acquisitions (for the benefit of the existing unitholders of D&P Acquisitions) that will provide for the payment by us to the unitholders of D&P Acquisitions of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we realize (i) from the tax basis in our proportionate share of D&P Acquisitions' goodwill and similar intangible assets (determined as of the date of this offering) that we receive as a result of the exchanges and (ii) from the federal income tax election referred to above. See "Related Party Transactions—Tax Receivable Agreement."

        As a member of D&P Acquisitions, we will incur U.S. federal, state and local income taxes on our allocable share of any net taxable income of D&P Acquisitions. As authorized by the LLC Agreement, pursuant to which D&P Acquisitions will be governed, we intend to cause D&P Acquisitions to continue to distribute cash, generally, on a pro rata basis, to its members at least to the extent necessary to provide funds to pay the members' tax liabilities, if any, with respect to the earnings of D&P Acquisitions. See "Related Party Transactions—Third Amended and Restated Limited Liability Company Agreement of D&P Acquisitions."

Future Needs

        Our primary financing need has been to fund our growth. Our growth strategy includes hiring additional revenue-generating client service professionals and expanding our service offerings through existing client service professionals, new hires or acquisitions of new businesses. We intend to fund such growth over the next twelve months with funds generated from operations and borrowings under our credit agreement. Because we expect that our future annual growth rate in revenues and related percentage increases in working capital balances will be moderate, we believe cash generated from operations, supplemented as necessary by borrowings under our credit facility, will be adequate to fund this growth. Our ability to secure short-term and long-term financing in the future will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity and the overall condition of the credit markets.

Contractual Obligations

        The contractual obligations presented in the table below represent our estimates of future payments under fixed contractual obligations and commitments at December 31, 2006. Changes in our business needs or interest rates, as well as actions by third parties and other factors, may cause these estimates to change. Because these estimates are complex and necessarily subjective, our actual

65



payments in future periods are likely to vary from those presented in the table. The following table sets forth information relating to our contractual obligations at December 31, 2006:

 
  Less than
1 year

  2-3 years
  4-5 years
  After
5 years

  Total
 
  (in thousands)

Credit facility(1)   $ 7,189   $ 14,184   $ 13,927   $ 79,944   $ 115,244
Capital lease obligations     249                 249
Operating lease obligations     12,720     23,572     19,071     86,855     142,218
   
 
 
 
 
  Total   $ 20,158   $ 37,756   $ 32,998   $ 166,799   $ 257,711
   
 
 
 
 

(1)
Assumes a constant interest rate of 8.1% for the duration of the credit facility, calculated as three-month LIBOR at May 17, 2007 plus a margin of 2.75%.

        We lease office facilities under non-cancelable operating leases that expire at various dates through 2023 and that include fixed or minimum payments plus, in some cases, scheduled base rent increases over the terms of the lease. Certain leases provide for monthly payment of real estate taxes, insurance and other operating expenses applicable to the property.

        In connection with the acquisition of Chanin, we may also be obligated to make earn-out payments equal to up to $5.0 million for each of the three 12-month periods following the acquisition date (based on certain revenue performance thresholds).

Off-Balance Sheet Arrangements

        We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any leasing activities that expose us to any liability that is not reflected in our combined/consolidated financial statements.

Qualitative and Quantitative Disclosure about Market Risk

        We are exposed to market risks related to interest rates and changes in the market value of our investments. Our exposure to changes in interest rates is limited to borrowings under our bank credit agreement, which has variable interest rates tied to the LIBOR or prime rate. At June 30, 2007 we had borrowings outstanding totaling $79.0 million (before debt discount) that bear interest at LIBOR plus a margin of 2.75%. A hypothetical 1% adverse change in interest rates would have an unfavorable impact of $0.8 million on our earnings, based on our level of debt at June 30, 2007. We have a $36.8 million notional amount interest rate swap that effectively converted floating rate LIBOR payments to fixed payments at 4.94%. The swap agreement terminates September 30, 2010. We elected not to apply hedge accounting to this instrument. The estimated fair value of the interest rate swap is based on quoted market prices. The estimated fair value of the swap at December 31, 2006 and 2005 resulted in an asset of $0.1 million and a liability of $0.2 million, respectively. We recorded a gain of $0.3 million for the year ended December 31, 2006 and a loss of $0.2 million for the year ended December 31, 2005, for the change in fair value of the interest rate swap. From time to time, we invest excess cash in marketable securities. These investments principally consist of overnight sweep accounts and short-term commercial paper. Due to the short maturity of our investments, we have concluded that we do not have material market risk exposure with respect to such investments.

Critical Accounting Policies

        Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The notes to our consolidated financial statements include disclosure of our significant accounting policies. We review our financial reporting and disclosure practices and accounting policies periodically to

66



ensure that our financial reporting and disclosures provide accurate information relative to the current economic and business environment.

        The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Critical estimates include the amount of proportional performance under client engagements for the purposes of determining revenue recognition, accounts receivable and unbilled services valuation, incentive compensation, useful lives of intangible assets and the carrying value of goodwill and intangible assets. Actual results may vary from such estimates.

        Critical accounting policies are those policies that we believe present the most complex or subjective measurements and have the most potential to impact our financial position and operating results. While all decisions regarding accounting policies are important, we believe that the following policies could be considered critical. These critical policies relate to revenue recognition, accounts receivable and allowance for doubtful accounts, goodwill and other intangible assets, acquisition accounting, accounting for equity-based compensation and valuation of net deferred tax assets.

Revenue Recognition

        We recognize revenues in accordance with Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue Recognition. Revenue is recognized when persuasive evidence of an arrangement exists, the related services are provided, the price is fixed or determinable and collectibility is reasonably assured.

        We generate revenues from services provided by our Financial Advisory and Investment Banking segments. We typically enter into these engagements on a time-and-materials basis, a fixed-fee basis or a contingent fee basis.

        Revenues from time-and-materials engagements are recognized as the hours are incurred by our client service professionals.

        Revenues from fixed-fee engagements are recognized as the services are provided under a proportional performance method. Revenues for engagements under a proportional performance method are recognized based on estimates of work completed versus the total services to be provided under the engagement. Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the project such as changes in scope, the staffing on the engagement and the level of client participation. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. To date, such losses have not been significant. Historically, if an engagement terminates prior to completion, we have typically recovered the costs incurred related to the services provided. Periodic engagement reviews require us to make judgments and estimates regarding the overall profitability and stage of project completion, which, in turn, impact the revenue recognition in the current period.

        In the absence of clear and reliable output measures, we believe that our method of recognizing service revenues, for contracts with fixed fees, based on hours of service provided represents an appropriate surrogate for output measures. We determined that an input-based approach was most appropriate because the input measures are deemed to be a reasonable substitute for output measures based on the performance of our obligations to the customer, and due to the fact that an input-based approach would not vary significantly from an output measure approach. We believe this methodology provides a reliable measure of the revenue from the advisory services we provide to our customers under fixed-fee engagements given the nature of the consulting services we provide and the following additional considerations:

    we are a specialty consulting firm;

67


    our engagements do not typically have specific interim deliverables or milestones;

    the customer receives the benefit of our services throughout the contract term;

    the customer is obligated to pay for services rendered even if a final deliverable is not produced, typically based on the proportional hours performed to date;

    we do not incur setup costs; and

    we expense contract fulfillment costs, which are primarily compensation costs, as incurred.

        We recognize revenue over the period that the services are provided in proportion to the delivery of services as measured by billable hours as this reflects the pattern in which obligations to the customer are filled and by which the customer receives the benefit of the service. Revenue is not recognized on a straight-line basis or upon completion as this is not reflective of the manner in which services are provided.

        We have engagements for which the revenues are contingent on successful completion of the project. Any contingent revenue on these contracts is not recognized until the contingency is resolved and payment is reasonably assured. Retainer fees under these arrangements are deferred and recognized ratably over the period in which the related service is rendered. Revenues from restructuring advisory engagements that are performed with respect to cases in bankruptcy court are typically recognized one-two months in arrears from the month in which the services were performed unless there are objections and/or holdbacks mandated by court instructions. Costs related to these engagements are expensed as incurred.

        We also have contracts with clients to deliver multiple services that are covered under specific engagement letters. These contracts specifically identify the services to be provided with the corresponding deliverable. All engagement letters are reviewed by management and signed by both the client and the Company prior to any engagement codes being created to track billable time or revenue being recorded. During the review process, management ascertains which services are being provided for within the contract and sets up the appropriate coding and accrual rates within the financial system for each element. For engagements that have multiple elements, a separate task will be set up for each element to enable more accurate tracking and variance analysis.

        The fair value for each service is determined based on the prices charged when each element is sold separately. Revenues are recognized in accordance with our accounting policies for the elements as described further above. The elements qualify for separation when the services have value on a stand-alone basis and fair value of the separate element exists. While determining fair value and identifying separate elements requires judgment, generally fair value and the separate elements are readily identifiable as we also sell those elements individually outside of a multiple services engagement.

        Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenue in the accompanying consolidated balance sheets. Revenues recognized for services performed but not yet billed to clients have been recorded as unbilled services. Client prepayments and retainers are classified as deferred revenue and recognized as earned or ratably over the service period.

Accounts Receivable and Allowance for Doubtful Accounts

        Accounts receivable are recorded at face amounts less an allowance for doubtful accounts. On a periodic basis, we evaluate our accounts receivable and establish the allowance for doubtful accounts by calculating and recording a specified percentage of the individual open receivable balances. Specific allowances are also recorded based on historical experience, analysis of past due accounts, client creditworthiness and other current available information. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their

68



inability or unwillingness to pay our fees, we may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we may receive retainers from some of our clients prior to performing significant services.

        The provision for doubtful accounts is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses.

        Historically, our actual losses and credits have been consistent with these allowances. As a percentage of gross accounts receivable, our accounts receivable allowances totaled 3.2% and 3.8% as of June 30, 2007 and December 31, 2006, respectively. As of June 30, 2007, a five-percentage point deviation in our accounts receivable allowances balance would have resulted in an increase or decrease in the allowance of $88,000.

Goodwill and Other Intangible Assets

        Goodwill represents the excess of purchase price and related acquisition costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Under the provisions of SFAS 142, Goodwill and Intangible Assets, goodwill is required to be tested for impairment on an annual basis and between annual tests whenever indications of impairment exist such as loss of key personnel, unanticipated competition or other unforeseen developments. Impairment exists when the carrying amount of goodwill exceeds its implied fair value, resulting in an impairment charge for this excess. An impairment test involves considerable management judgment and estimates regarding future operating results and cash flows. Pursuant to our policy, we performed the annual goodwill assessment as of October 1, 2006 and determined that no impairment of goodwill existed as of that date. No indications of impairment have arisen since that date.

        Other intangible assets include trade names, customer relationships, contract backlog, and non-competition agreements. We use valuation techniques in estimating the initial fair value of acquired intangible assets. These valuations are primarily based on the present value of the estimated net cash flows expected to be derived from the client contracts and relationships, discounted for assumptions about future customer attrition. We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In the event that higher or earlier-than-expected customer attrition occurs, it may result in higher future amortization charges or an impairment charge for customer-related intangible assets.

Acquisition Accounting

        Acquisitions are accounted for using the purchase method of accounting in accordance with SFAS 141. SFAS 141 requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition. The allocation of the purchase price is dependent upon certain valuations and other studies.

Accounting for Equity-Based Compensation

        In December 2004, SFAS 123(R) was issued. SFAS 123(R) is a revision of SFAS No. 123, Accounting for Stock-Based Compensation and supersedes APB 25. We elected to adopt SFAS 123(R) on January 1, 2005. Prior to that time, we accounted for equity-based compensation under APB 25.

        Equity-based compensation expense is based on fair value at the date of grant and the pre-vesting forfeiture rate. It is recognized over the requisite service period using the accelerated method of amortization as described in SFAS 123(R) for grants with graded vesting or using the straight-line

69



method for grants with cliff vesting. The fair value of the units is determined from periodic valuations using key assumptions for implied asset volatility, expected dividends, risk free rate and the expected term of the units. If factors change and we employ different assumptions in the application of SFAS 123(R) in future periods or if there is a material change in the fair value of the Company, the compensation expense that we record may differ significantly from what we have recorded in the current period. A five-percentage point deviation in the fair value of the Company would have resulted in a $2.2 million increase or decrease in compensation expense related to equity-based compensation expense for the quarter ended June 30, 2007.

        Forfeitures are estimated at the time a unit is granted and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures were estimated to be between 4% and 19% based on historical experience. A one-percentage point deviation in the estimated forfeiture rates would have resulted in a $1.4 million increase or decrease in compensation expense related to equity-based compensation expense for the quarter ended June 30, 2007.

Valuation of Net Deferred Tax Assets

        We have recorded net deferred tax assets as we expect to realize future tax benefits related to the utilization of certain of these assets. If we determine in the future that we will not be able to fully utilize all or part of these deferred tax assets, we would record a valuation allowance and record it as a charge to income in the period the determination was made. While utilization of these deferred tax assets will provide future cash flow benefits, they will not have an effect on future income tax periods.

Recent Accounting Pronouncements

        In May 2005, SFAS No. 154, Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"), was issued and is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. SFAS 154 applies to all voluntary changes in accounting principles and to changes required by accounting pronouncements that do not contain transition provisions. SFAS 154 requires, among other things, the retrospective application to prior periods' financial statements of changes in accounting principles as opposed to including in net income the cumulative effect of the change in accounting principles in the period of adoption, which was the standard under Accounting Principles Board Opinion No. 20, Accounting Changes. There was no impact of the adoption of SFAS 154 on our financial condition or results of operations.

        In June 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of SFAS No. 109 ("FIN 48"), was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The adoption of FIN 48 on January 1, 2007 had no impact on our consolidated financial statements.

        In September 2006, the SEC issued SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB 108 was issued to address diversity in practice in quantifying financial statement misstatements. Current practice allows for the evaluation of materiality on the basis of either (1) the error quantified as the amount by which the current year income statement was misstated ("rollover method") or (2) the cumulative error quantified as the cumulative amount by which the current year balance sheet was misstated ("iron curtain method"). The guidance provided in SAB 108 requires both methods to be used in evaluating materiality ("dual approach"). SAB 108 permits companies to initially apply its provisions either by (1) restating prior financial statements as if the dual approach had always been used or (2) recording the cumulative effect of initially applying the "dual approach" as adjustments to the carrying values of

70



assets and liabilities as of January 1, 2006 with an offsetting adjustment recorded to the opening balance of retained earnings. There were no matters warranting our consideration under the provisions of SAB 108 and, therefore, it did not have an impact on our financial position, results of operations or cash flows.

        In September 2006, SFAS No. 157, Fair Value Measurements ("SFAS 157") was issued. SFAS 157 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements in financial statements, but standardizes its definition and guidance in GAAP. Thus, for some entities, the application of this statement may change current practice. SFAS 157 became effective for us beginning on January 1, 2007. We are currently evaluating the impact that the adoption of this statement may have on our financial position, results of operations and cash flows.

        In December 2006, we adopted the provisions of SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans ("SFAS 158"). SFAS 158 requires that employers recognize on a prospective basis the funded status of an entity's defined benefit postretirement plan as an asset or liability in the financial statements, requires the measurement of defined benefit postretirement plan assets and obligations as of the end of the employer's fiscal year, and requires the recognition of the change in the funded status of defined benefit postretirement plans in other comprehensive income. SFAS 158 also requires additional disclosures in the notes to the financial statements. The effect of adopting SFAS 158 is further discussed the section entitled "Notes to consolidated financial statements—Note 12. Post Retirement Health Care Costs."

        In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that currently are not required to be measured at fair value. This is effective no later than fiscal years beginning on or after November 15, 2007. We are currently evaluating the impact this standard may have on our financial position, results of operations and cash flows.

71



BUSINESS

Overview

        We are a leading provider of independent financial advisory and investment banking services. Our mission is to help our clients protect, maximize and recover value. The foundation of our services is our ability to provide independent advice on issues involving highly technical and complex assessments of value. We principally support client needs in financial and tax valuation (especially in the context of business combinations and other corporate transactions), M&A, restructuring and litigation and disputes. We believe the Duff & Phelps brand is associated with a high level of professional service and integrity, knowledge leadership and independent, trusted advice. With over 680 highly experienced and credentialed client service professionals at June 30, 2007, we provide our clients with specialized, technical expertise in the areas of finance, valuation, accounting and tax. We serve a global client base through offices in 21 cities, comprised of offices in 15 U.S. cities, including New York, Chicago and Los Angeles, and six international offices located in Amsterdam, London, Munich, Paris, Tokyo and Zurich.

        We provide our services through our Financial Advisory and Investment Banking segments. Our Financial Advisory segment provides valuation advisory, corporate finance consulting, specialty tax and dispute and legal management consulting services. These services help our clients effectively navigate through increasingly complex financial, accounting, tax, regulatory and legal issues. Our Investment Banking segment provides M&A advisory services, transaction opinions and restructuring advisory services. Through these services we provide independent advice to our clients in order to assist them in making critical decisions in a variety of strategic situations. The Financial Advisory and Investment Banking segments serve a broad base of clients and work collaboratively to identify and capture new business opportunities. For the year ended December 31, 2006, we generated 77% of our revenues and 72% of our pro forma revenues from our Financial Advisory segment, and 23% of our revenues and 28% of our pro forma revenues from our Investment Banking segment. For the six-month periods ended June 30, 2007 and 2006, we generated 76% and 83%, respectively, of our revenues from our Financial Advisory segment and 24% and 17%, respectively, of our revenues from our Investment Banking segment.

        We believe that by operating as an integrated, single-source provider of these services, we are able to leverage our client service professionals' knowledge leadership across a range of functional disciplines to serve the diverse and complex needs of our clients. Our services are provided more typically by competitors who specialize primarily in financial, accounting or tax advisory services (such as specialty consulting, national accounting and regional advisory firms) or in transaction-based advisory services (such as boutique advisory firms and investment banks) and who therefore may not possess the breadth of services we can offer to act as a single source provider.

        We believe that, unlike public accounting or investment banking firms who are often subject to actual or perceived conflicts of interest with respect to some or all of the services they offer, the scope of services we currently offer enables us to provide advice to clients which is independent of conflicts related to audit services, Sarbanes-Oxley Act compliance services, public capital raising, trading, underwriting and lending activities. We believe that managers, corporate boards and investors will increasingly focus on conflicts of interest, independence and fiduciary obligations when selecting advisors, and will increasingly seek independent, objective and authoritative advice from independent providers like us.

        We provide our services globally to a wide variety of companies who are in need of industry-leading, customized financial advice. Our clients include publicly-traded and privately-held companies, as well as investment firms such as private equity firms and hedge funds. Additionally, we maintain extensive relationships with law, accounting and investment banking firms from whom we receive referral business. We have historically experienced a significant level of repeat referrals and engagements from our client base and are focused on ensuring that we cover multiple areas where we can assist a client with its financial advisory needs.

72



        We have a collaborative culture that is based on a team approach. This approach promotes the cross-selling of new business opportunities across practice groups and enables us to deliver the most appropriate Duff & Phelps client service professionals to meet a client's needs. In addition, our integrated, multi-disciplinary approach enables us to cross-staff our client service professionals across multiple service lines to better manage the utilization of our staff. To achieve these goals, we believe that we must recruit, train and develop the leading client service professionals in our industry to provide our clients with unparalleled financial advice and uphold our brand's reputation for market-leading technical excellence. We believe that, as a result of our firm's culture, global scale, broad service offering and strong brand name, Duff & Phelps provides an attractive career platform which we believe combines the stability of a larger firm with the collaborative culture and conflict-free environment of a smaller, high growth firm and allows us to attract and retain highly qualified client service professionals. We have hired experienced professionals from a variety of our competitors and have historically experienced low turnover among our senior client service professionals.

        From the fiscal year ended December 31, 2004 through the fiscal year ended December 31, 2006, our revenue has grown from $28.9 million to $246.7 million through a combination of acquisitions and organic growth. Our number of client service professionals has grown from 75 at December 31, 2004 to over 680 at June 30, 2007.

Our History

        The original Duff & Phelps business was founded in 1932 to provide high quality investment research services focused on the utility industry. Over several decades, it evolved into a diversified financial services firm providing investment banking, credit rating, and investment management services. In 1994, the credit rating business of Duff & Phelps was spun off into a separate public company that was eventually purchased by Fitch Ratings. In 2000, Duff & Phelps, LLC, the company that operated the investment banking practice of the original Duff & Phelps business, was acquired by Webster. In 2004, Duff & Phelps, LLC was acquired from Webster by its management and an investor group led by Lovell Minnick, a leading private equity firm.

        In 2005, Duff & Phelps, LLC teamed with Lovell Minnick and Vestar, another leading private equity firm, to acquire the CVC business from the Standard & Poor's division of McGraw-Hill. CVC was formed in the 1970's, initially as part of the financial advisory service groups of Price Waterhouse and Coopers & Lybrand. These practices were combined in 1998 when Price Waterhouse merged with Coopers & Lybrand to form PwC and were subsequently acquired by McGraw-Hill in 2001, thereby establishing independence from the audit practice of PwC. In connection with the acquisition of CVC, D&P Acquisitions was formed and Duff & Phelps, LLC became a wholly owned subsidiary of D&P Acquisitions. In October 2006, D&P Acquisitions acquired Chanin, one of the leading independent specialty investment banks providing restructuring advisory services for middle market and distressed transactions. Chanin was formed in 1990 and has played a lead role in many of the largest bankruptcy cases in the United States. Duff & Phelps Corporation was formed in connection with this offering and will, upon consummation of this offering, be the sole managing member of D&P Acquisitions.

        On September 1, 2007, we entered into a stock purchase agreement with Shinsei, pursuant to which we issued to Shinsei 3,375,000 shares of our Class A common stock for approximately $54.2 million, or at a purchase price equal to $16.07 per share, representing 97.4% of the low-end of the pricing range set forth on the cover page of this prospectus. Upon consummation of this offering, Shinsei's equity interest in Duff & Phelps Corporation will be equal to approximately 10% of the equity capital of the company on a fully diluted basis. The proceeds from the Shinsei Investment and the Class A common stock issued to Shinsei will be held in escrow until consummation of this offering. If this offering is not consummated by October 31, 2007, half of Shinsei's investment will be returned to Shinsei and, instead of issuing Class A common stock to Shinsei, D&P Acquisitions will issue a note to Shinsei in the aggregate principal amount of approximately $27.1 million that is, upon certain conditions, convertible into units of D&P Acquisitions.

73



        Any shares of Class A common stock owned by Shinsei will be subject to restrictions on transfer until September 5, 2009. Shinsei may sell up to 50% of its Class A common stock on or after September 5, 2008, 75% of its Class A common stock on or after March 5, 2009 and 100% of its Class A common stock on or after September 5, 2009. In addition, Shinsei will be restricted from purchasing any additional Class A common stock until March 5, 2009. In connection with this investment, we granted Shinsei registration rights.

        The transaction with Shinsei is expected to facilitate the expansion of our business in Asia. In connection with the Shinsei Investment, we entered into a referral agreement with Shinsei, who will work with us in good faith to develop a strategy to market and sell our financial advisory services in Asia. Pursuant to the referral agreement, we and Shinsei agreed to refer certain services to the other on a "preferred provider" basis in exchange for the payment of certain referral fees.

Industry Trends

        We believe that favorable long-term global trends have created a climate which supports strong revenue and profit growth in the industry segments in which we compete. Companies often do not possess the specialized knowledge and in-house staff to effectively respond to these industry trends, and we believe, are therefore increasingly relying on independent, third party advisors who have the expertise and resources to advise them on a wide array of complex issues. Because of our independence, our leading brand name and our technical expertise in the financial advisory industry, we believe that we are well positioned to capitalize on these long-term trends. These trends include:

    Growing demand for independent advisors.    We are not affiliated with any public accounting firm and, therefore, we are not constrained by the provisions of the Sarbanes-Oxley Act that limit an accounting firm's ability to provide certain non-audit services to its audit clients. We believe that these restrictions, together with the perceived conflicts of interest when auditors provide non-audit services to their audit clients, provide us with a competitive advantage over public accounting firms in securing financial advisory engagements. We believe that the relatively small number of large public accounting firms will lead some organizations to engage independent advisory firms like us in order to preserve their flexibility to hire large public accounting firms for audit or other attest services. We also believe that the large accounting firms are motivated to recommend independent advisory firms to their audit clients for non-audit services, rather than expose their lucrative audit relationships to potential competition from other accounting firms. We therefore believe that there is a significant opportunity for us to provide non-audit services currently provided by the Big Four accounting firms. In addition, we believe our investment banking business will benefit from the growing scrutiny by regulators and investors regarding corporate governance. This has led to increased sensitivity among managers and corporate boards to the conflicts of interest presented by the advisory fees, underwriting, lending, sales and trading and other investment banking activities of our more diversified competitors. For example, we believe corporate boards are increasingly seeking independent fairness opinions from independent M&A advisory firms, such as us, either as the primary fairness opinion or as a supplemental opinion when there are concerns that their investment banking advisors are conflicted due to the M&A advisory fees they stand to earn upon successful consummation of a transaction.

    Movement to fair value accounting.    Corporate boards, managers, and regulatory bodies have increased their focus on improving the quality and transparency of financial reporting to stakeholders. Both the FASB and the IASB are increasingly favoring the use of fair value accounting techniques. These techniques seek to measure the current market value of a company's assets and liabilities as an alternative to the traditional historical cost method of accounting, which they argue is less relevant to investors who make investment decisions based on current, not historical, assessments of value. The FASB has issued numerous standards in recent years to require the use of or provide guidance for calculating fair-value measurements in

74


      financial accounting. The issuance of SFAS 141 and SFAS 142 in 2001 was a watershed event in fair value accounting because they require intangible assets to be separately valued and reported from goodwill in a business combination, and goodwill and intangible assets that have indefinite useful lives to be valued at least annually for impairment. The promulgation of fair value accounting continued with the issuance in December 2004 of SFAS 123(R), which requires companies to account for share-based payments using fair value, and the issuance in September 2006 of SFAS 157, which provides a comprehensive framework for measuring fair value and expands on certain disclosure requirements. In 2004, the IASB released IFRS 3 and revisions for the related standards IAS 36 and IAS 38, which are similar to the fair value accounting standards under SFAS 141 and SFAS 142. In addition, the Memorandum of Understanding issued on February 27, 2006 between the FASB and the IASB sets out a time frame for convergence efforts between U.S. GAAP and IFRS by 2009 in an effort to standardize global accounting policies and facilitate capital flows internationally. We believe that the movement of accounting standards to fair value accounting, coupled with the increased scrutiny by boards and investors on the quality, transparency and reliability of financial statements, will drive continued demand for high quality, independent valuation services.

    Global M&A activity.    According to Thomson Financial, global M&A volume increased 38% in 2006 to an all-time high of $3.8 trillion. Over the past several years, strong equity markets, robust earnings, and significant cash balances have made corporate buyers much more active in M&A. In addition, private equity firms and hedge funds, fueled by low interest rates and strong capital inflows into alternative investments, emerged as aggressive acquirers, creating additional layers of competition and complexity in the M&A environment. Although recent volatility in the equity and credit markets has created uncertainties regarding the ability of private equity firms and hedge funds to sustain their high levels of M&A activity, we believe strategic M&A activity driven by well capitalized corporations will remain healthy. For example, according to Forbes, as of December 2006, cash as a percentage of the largest 1,500 companies' assets was 9.7%, nearly double the amount of a decade ago. Moreover, we believe the middle market, in which we primarily operate with respect to our M&A advisory and M&A due diligence services, is less exposed to broader market volatility and should continue to remain strong. Middle market M&A volume, which we define as transactions with values ranging from $20 million to $250 million, increased to $445 billion in 2006, up 65% from the lows reached in 2002, according to Thomson Financial. We believe that continuing resilience in the middle market, coupled with the heightened sensitivity among managers and corporate boards to conflicts of interest and fiduciary duties, will provide continued demand for certain of our services, such as purchase price allocation and our other valuation services, M&A advisory, M&A due diligence and transaction opinions services.

    Restructuring and financial distress.    According to Standard & Poor's/LCD and Thomson Financial, over the past three years, approximately $1.9 trillion of leveraged bank loans and high yield bonds have been issued, including record issuances in 2006 for both types of securities. Growth has been driven largely by a combination of low interest rates, stable economic growth and increased liquidity from new institutional investors such as collateralized debt obligation funds and hedge funds. However, despite this growth, according to Moody's Investors Service, default rates on non-investment grade securities remain at historical lows of less than 2%, compared to default rates of over 10% during the last two recessions in 1990 and 2000. If economic growth slows and default rates increase, we believe there will be a significant increase in demand for restructuring advisory services, especially from new entrants into the market who lack the experience in complex workout and bankruptcy situations.

    Litigation and disputes.    Litigation and disputes are an inherent part of the U.S. economy and complex litigation continues to grow, driven by legislative ambiguities, regulatory activities, judicial interpretations and private actions. Litigation and disputes often arise as a result of

75


      disagreements over valuation in the context of bankruptcies, M&A, commercial and shareholder disputes, intellectual property disputes, tax disputes, financial reporting and insurance claims. In complex litigation and disputes, organizations and the law firms that represent them regularly engage experienced professionals, like us, to provide or support expert testimony or perform data analyses involving valuation and other financial issues. We believe shareholder activism, increased regulatory scrutiny, and the increased complexity and value of intellectual property assets will continue to drive the demand for our dispute consulting and litigation services.

Our Competitive Strengths

        We believe our key competitive strengths include:

    Strong brand name with leading market positions.    We believe that the Duff & Phelps brand is well recognized and associated with independent, trusted advice, knowledge leadership and technical expertise in the fields of finance, valuation accounting and tax. We have a leading market position for many of the services that we provide. Our acquisition of CVC, which formerly constituted the valuation practice of PwC and is now the foundation of our Financial Advisory segment, provides us with what we believe to be the industry's leading independent practice providing purchase price allocation services. Additionally, according to Thomson Financial, in 2006, we were the number two independent provider of fairness opinions (which we define as excluding investment banks that engage in underwriting, capital markets or lending activities) in the world based on number of opinions delivered, and, according to The Deal, a top ten global provider of restructuring services based on number of assignments.

    Independent provider of financial advisory services.    We consider ourselves independent because, among other things, we do not provide our clients with audit or Sarbanes-Oxley Act Section 404 compliance services, and we do not engage in public capital raising, trading, underwriting or lending activities. We believe increased regulation, growing public scrutiny and investor concerns regarding perceived and actual conflicts of interest have resulted in increased opportunities for independent providers of financial advisory services like us. We believe that our objective perspective is highly valued by our clients in various financial and strategic settings.

    Long-standing, diverse client relationships.    We have achieved long-standing client relationships by providing advice on issues involving highly technical and complex assessments of value. We proactively assess the needs of our clients and deliver the full resources of our firm to address their issues, working collaboratively with our clients' other advisors, including law firms and accounting firms, to provide services which these advisors cannot provide either because they lack the expertise or due to conflict issues. We provide services to a diverse base of clients, including public and private companies, investment firms such as private equity firms and hedge funds and professional services firms, such as law firms and public accounting firms. In 2006, 62% of our revenue was derived from repeat engagements with existing clients to whom we provided services during the prior three years, and our largest client represented approximately 3% of our revenue. We currently provide, or have provided in the past, services to approximately 36% of the S&P 500 companies. We believe the diversity of our client base mitigates the impact of the loss of any one customer or the completion of a project on our revenues and profitability.

    Broad service offering.    We have a broad and well-balanced service offering, which encompasses multiple disciplines across our Financial Advisory and Investment Banking segments. We promote cross-selling among our practice groups, enabling us to cross-staff extensively and share analytical approaches, technical data and analysis, research and marketing strategies. We believe this breadth of services and integrated approach give us a competitive advantage, as they allow us to better serve our global client base by drawing solutions from our various areas of expertise. In addition, our range of service offerings reduces our dependence on any one service offering or industry, provides a stimulating work environment for our client service professionals while

76


      enhancing our flexibility in managing their utilization and career development and aids in our recruitment of new client service professionals. Our service offerings span across cyclical, non-cyclical and counter-cyclical activities and provide for revenue diversification through both time-and-materials-based and success-based fee structures.

    Critical mass of highly qualified and experienced professionals.    With over 680 highly qualified and credentialed client service professionals at June 30, 2007, we can execute large and complex advisory assignments that we believe many of our competitors cannot. Our client service professionals have developed a reputation for high integrity and technical excellence. Many of our client service professionals are regarded as industry leaders, have previously held senior positions at the Big Four, hold advanced degrees or occupy or have occupied positions on national trade boards and trade associations.

    Distinctive, collaborative culture.    We have developed a collaborative culture that is based on a team approach which aims to deliver the most appropriate Duff & Phelps client service professionals to meet a client's needs regardless of the source of the client engagement. Our culture is exemplified by this team approach, the meritocracy under which client service professionals are promoted, the cross-selling of services between our practice groups and the cross-staffing by which client service professionals are encouraged to assist in other areas of client projects outside of their core practice group. We believe that our distinctive culture, broad service offering and client service professional development initiatives allow us to better serve our clients and recruit and retain a greater number of talented personnel.

    Global presence.    We deliver our services through offices in 21 cities, including six international offices. Our international offices are located in Amsterdam, London, Munich, Paris, Tokyo and Zurich. Many of our clients are multi-national firms with issues that cross national boundaries, and we believe our ability to operate in an integrated global manner provides us with a competitive advantage over many of our competitors in performing complex engagements that span multiple countries and continents. Our global presence also provides us with a strong platform to take advantage of emerging opportunities in Europe and Asia as global accounting standards converge and cross-border M&A increases. Our overseas operations also help to counter-balance our exposure to U.S. economic growth.

    Strong and experienced management team.    Our executive officers have an average of approximately 20 years of industry experience. Upon completion of the offering, our executive officers will own approximately 8.2% of the Company on a fully diluted basis. In addition, our executive officers have successfully sourced, executed and integrated several acquisitions, including the hiring of various teams of seasoned professionals from other firms and the acquisitions of the CVC and Chanin businesses.

Our Growth Strategy

        We intend to expand our business by:

    Expanding services to our existing clients.    We intend to use our broad service offering, our leading market positions and our long-standing client relationships to continue penetrating our existing clients. During 2006, approximately 650 of our clients, or 27% of our total 2006 client base, purchased multiple Duff & Phelps services. Given the recent CVC and Chanin acquisitions and recent additions of new business lines, we believe we have a meaningful opportunity to increase revenue through increased penetration of our existing client base. For example, Chanin, which we acquired in September 2006, has established relationships providing restructuring services to several leading hedge funds and could potentially serve as a point of referral for our other service offerings, such as portfolio valuation, financial engineering, corporate finance consulting services and M&A advisory services.

77


    Expanding our client base.    We aim to significantly expand our client base and increase the overall exposure of our firm in the markets we serve. Despite holding market-leading positions in many of our service offerings, we operate in a highly fragmented industry and believe there are significant opportunities to serve clients with whom we have no current relationship. In 2006, we generated approximately 38% of our revenue from clients that did not have a prior relationship with Duff & Phelps during the prior three years.

    Expanding our global presence.    We believe that the continuing convergence of international and U.S. accounting standards and increasing global M&A activity have created a significant opportunity for global expansion of our services. In addition, we believe we have a significant opportunity to leverage our reputation and capabilities in the U.S. to Europe and Asia. In 2006, approximately 10% of our revenue was sourced from international relationships. We currently service our global client base from either our multiple international offices or our U.S.-based offices, depending on the nature and scope of the assignment. At June 30, 2007, we had 62 client service professionals located in six international offices. In connection with the Shinsei Investment, we entered into a referral agreement with Shinsei to facilitate the expansion of our business in Asia. Pursuant to the referral agreement, Shinsei will work with us in good faith to develop a strategy to market and sell our financial advisory services in Asia. Further, in addition to our existing international offices in Amsterdam and London, over the past year we have opened four international offices in Munich, Paris, Tokyo and Zurich. We intend to continue our expansion in Europe and Asia in the future.

    Expanding our service offerings.    We intend to expand our current capabilities around our core competencies, and broaden the scope of our existing services to address the evolving needs of our clients and shifting market conditions. For example, given the increasingly global nature of our client base, in 2006, we invested resources internally to develop a specialty tax business in response to our identification of an underserved area in our Financial Advisory segment.

    Attracting additional highly qualified professionals.    We believe our attractive, collaborative culture, differentiated business model, leading market positions and performance-based compensation structure will continue to enable us to attract and retain top client service professionals and provide a platform for career development. We have hired experienced professionals from a variety of our competitors and have historically experienced low turnover among our senior client service professionals. In 2006, we hired 20 new managing directors.

    Pursuing strategic acquisitions and alliances.    We plan to expand our operations opportunistically through the acquisition of complementary businesses and by establishing strategic alliances. Our senior management team has a demonstrated track record of sourcing, executing and integrating several acquisitions as evidenced by the acquisitions of the CVC and Chanin businesses.

Our Services

        We provide our services through two reporting segments: Financial Advisory and Investment Banking. For the year ended December 31, 2006, our Financial Advisory segment contributed 77% of our revenues and 72% of our pro forma revenues and our Investment Banking segment contributed 23% of our revenues and 28% of our pro forma revenues. The services we offer within these segments are often complementary, which enables us to cross-sell related services and increase our relevance to our clients. In addition, our client service professionals possess core financial and valuation skill sets that are highly portable within operating segments, facilitating the sharing of resources across the organization.

78


Overview of Our Services

GRAPHIC

Financial Advisory

        The foundation of our Financial Advisory segment is our core competency in making highly technical and complex assessments of value. We believe we are one of the leading independent valuation services firms in the world. Our Financial Advisory segment provides our clients with valuation advisory, corporate finance consulting, specialty tax, and dispute and legal management consulting services delivered by client service professionals who possess highly specialized skills in finance, valuation, accounting and tax. We typically price these services based on our assessment of the hours required to deliver the work and the billing rates of the client service professionals assigned to the project.

Valuation Advisory

        Financial reporting.    We believe we are a leading independent provider of valuation services for financial reporting. We provide objective and independent valuation reports that allow our clients to meet important regulatory, market and fiduciary requirements. Our finance and accounting expertise, combined with our use and development of sophisticated valuation methodologies, fulfill even the most complex financial reporting requirements. Examples of the financial reporting services we offer include: SFAS 141 and 142 valuations used in conjunction with purchase price allocation and periodic impairment testing; SFAS 123(R) share-based compensation valuation; "cheap stock" valuation; and fresh start accounting for companies emerging from Chapter 11 bankruptcy. The acute sensitivity of our clients at the highest levels of the organization to the quality and transparency of the financial information they present to their investors results in strong customer loyalty, which often leads to repeat client engagements and creates an established entry point for the delivery of additional services.

79


        Fixed asset/real estate valuation.    We provide integrated fixed asset and real estate valuations, with specialized expertise in machinery and equipment valuation, fixed asset reconciliation, cost segregation, real estate valuation and real estate consulting. Our services are used for a variety of purposes, including: valuation of machinery and equipment for financial and tax reporting and loan/lease structuring; satisfying Sarbanes-Oxley Act Section 404 requirements for fixed asset internal controls; optimizing tax depreciation benefits; and various real estate appraisal purposes. Our geographic scale enables us to compete effectively and win large client assignments involving multiple asset sites on both a national and global basis.

        Tax valuation.    We specialize in tax valuations and related advisory services when tax laws and regulations stipulate that a valuation is required or when assistance is needed to implement a client's tax strategies. We offer tax valuation and advisory services services for a variety of transaction-related, compliance and planning purposes, including taxable reorganizations; purchase price allocations; inventory, fixed asset, intangible asset and goodwill valuations; net operating loss and built-in gains analyses; and estate and gift taxes. We have the expertise and testimony experience to defend our work and our clients' valuation positions in regulatory inquiries. We have advised staff and members of the U.S. Senate Finance Committee, the U.S. House Ways and Means Committee and the Joint Committee on Taxation on tax valuation and related legislative matters. We believe that the tax advisory services provided by the Big Four accounting firms to their audit clients will be an additional area of scrutiny regarding potential conflicts, and that independent firms like us will have an opportunity to gain meaningful market share in this service area.

Corporate Finance Consulting

        M&A due diligence.    We provide buy-side and sell-side M&A due diligence services to private equity and strategic buyers. Our client service professionals assist with the accounting, financial, commercial operational, tax and information technology aspects of the due diligence process, by developing and executing a due diligence plan that focuses on the key value drivers and risks that are critical to our clients' investment or divestiture decision. Recently, demand for our M&A due diligence services has grown significantly, fueled by increased M&A activity by middle market companies that lack the internal resources and capabilities to execute a comprehensive due diligence process on their own, as well as private equity buyers who are increasingly viewing due diligence services as a necessary cost of doing business in an increasingly competitive M&A environment. We believe our independence provides us with a competitive advantage over the Big Four accounting firms. In addition, we believe the collaboration with our other practice areas creates a more efficient transaction process for our clients, giving us a distinct competitive advantage.

        Portfolio valuations.    Our portfolio valuation client service professionals specialize in valuing the investment portfolios of our private equity and hedge fund clients. The majority of these portfolios are comprised of illiquid or restricted securities, including secured and unsecured loans and other debt instruments, privately held preferred equity and common equity, convertible securities, warrants and options, as well as other derivative securities. Similar to our corporate clients, our private equity and hedge fund clients are under intense scrutiny regarding their fiduciary duties to their investors, which has prompted many of these firms to obtain outside assurances on the valuations of their investment portfolios. Conflict of interest considerations typically prevent any accounting firm which has an audit relationship with a portfolio company from rendering valuation advisory services on the entire portfolio. As a result, we typically do not compete with large accounting firms, such as the Big Four, in providing these services. We typically deliver these services on a recurring, quarterly basis. We believe we are a market leader in portfolio valuations, which provides us with an attractive opportunity to increase our revenues in this practice group and increase our brand equity and recognition among private equity firms and hedge funds.

80



        Strategic finance.    Our strategic finance practice group has developed proprietary tools and methodologies to build, review and validate financial projections and models. We believe our strategic finance services enhance the sophistication and accuracy of our clients' internal planning and budget forecasts, M&A analysis, capital allocation decisions and capital structure optimization. We also provide financial engineering services that assist clients in solving critical and complex business problems using technically sophisticated mathematical models. Services include the design and valuation of derivatives, options and other complex financial instruments.

Specialty Tax

        Transfer pricing.    Transfer pricing is a significant international tax issue facing multi-national companies. Most tax authorities require comprehensive transfer pricing documentation and have other compliance requirements, and impose severe penalties for failure to comply. Furthermore, transfer pricing presents significant tax optimization opportunities for multi-national companies. We provide a full scope of transfer pricing services to ensure that inter-company transactions comply with required arm's-lengths standards, as well as create the contemporaneous documentation that satisfies global compliance requirements.

        Property tax.    Property taxes are a significant recurring expense paid by corporations, but one of the least understood due to the complexity of the applicable tax regulations. We assist corporations in identifying opportunities for property tax savings by reviewing their property tax assessments and liabilities. Our services include negotiating assessment appeals, providing property tax due diligence for acquisitions, preparing studies to remove non-taxable embedded costs, obtaining property tax exemptions and providing general property tax consulting services.

        Business incentives.    State and local governments often offer valuable tax incentives in return for investments in their jurisdictions. Whether the planned investment will create new facilities, expand or relocate operations, penetrate new markets, result in hiring additional or replacement employees, or initiate research and development activities, business incentives in the form of tax exemptions, tax credits, project grants and other tax benefits are likely to be available at the state and local levels to offset some of these costs. Our strategic geographic network of business incentives experts provides us with specialized, local knowledge of the potential business incentives available to our clients.

Dispute and Legal Management Consulting

        Dispute consulting.    We offer a broad array of dispute consulting services to corporate clients and attorneys at many of the country's largest law firms. Our client service professionals typically serve as consultants who provide comprehensive support throughout all stages of the litigation process, including, on occasion, as testifying experts. We have focused our dispute consulting practice on bankruptcy and retrospective solvency, business insurance consulting, intellectual property disputes, commercial and shareholder litigation, forensic and investigative services, and purchase price disputes. Our dispute consulting practice draws on the subject matter expertise and industry experience of many of our client service professionals from across the firm, which we believe provides us with a competitive advantage over many litigation support firms which have a much narrower focus on the litigation process and do not have the same industry knowledge as us. We also maintain an external network of affiliates with whom we contract to provide testimony on an as-needed basis.

        Legal management consulting.    We provide various services designed to enable chief legal officers, chief compliance officers and law firms to analyze and implement strategy, operations, compliance and risk management decisions. Legal management consulting services are matched to the specific needs of the client, and have encompassed technology and infrastructure planning, merger and acquisition integration, caseload management, compliance program implementation, intellectual asset management and strategy development.

81



Investment Banking

        Our Investment Banking segment focuses on providing M&A advisory services, transaction opinions and restructuring advisory services to corporate and investor clients. A significant portion of revenues in this segment are generated from success-based fees that are paid when a transaction closes and are generally tied to the value of the transaction. As a result, revenues in this segment can be less predictable and more event-driven than revenues in our Financial Advisory segment. However, projects in this segment have the potential to generate higher revenue per client service professional, resulting in higher margins.

M&A Advisory Services

        We provide objective valuation, structuring and negotiation services tailored to help our clients achieve their strategic goals on the best possible terms. We have developed our expertise through hundreds of sell-side, buy-side and divestiture assignments across a wide range of industries. We provide our services primarily to middle-market clients, including the portfolio companies of our private equity clients, focusing on transaction values ranging from $20 million to $250 million. We believe our technical expertise, strong brand name, reputation and geographic scale provide us with key competitive advantages that separate us from other independent M&A advisory boutiques.

Transaction Opinions

        Our independent fairness and solvency opinions help provide boards of directors and other corporate fiduciaries with a legally defensible basis to support important corporate decisions. Our ability to offer opinions that satisfy all constituencies, including regulators, has been developed through extensive research, detailed financial analyses and a commitment to stay current on key governance and regulatory issues. In recent years, we believe our fairness opinion practice has benefited from an increase in the perceived standard of diligence required by boards of directors to adequately satisfy their fiduciary duties, particularly when faced with financial advisors who may have conflicts arising from the receipt of success-based transaction advisory or financing fees in conjunction with sell-side advisory assignments. According to Thomson Financial, in 2006, we were the number two independent provider of fairness opinions (which we define as excluding investment banks that engage in underwriting, capital markets or lending activities) in the world based on number of opinions delivered. In addition, the greater use of financial leverage in leveraged buyout transactions and the increasing number of spin-offs and leveraged recapitalizations being undertaken by corporations is driving the need for solvency opinions. Finally, we believe we are one of the leading financial advisors in transactions involving benefit plans, including employee stock ownership plans ("ESOPs"). We have a strong background in resolving the unique financial, valuation, tax and structural issues involving employee benefit plans under the Employee Retirement Income Security Act of 1974 ("ERISA"), and also provide recurring ERISA/ESOP valuation services for our clients on a periodic basis.

Restructuring Advisory Services

        Our restructuring client service professionals provide financial restructuring advice to all constituencies in the business reorganization process, including debtors, senior and junior lenders, existing and potential equity investors and other interested parties. Our services include strategy, plan development and implementation, exchange offers and consent solicitations, out-of-court workouts, Chapter 11 restructurings and debtor-in-possession and exit financing advisory. Since 1984, our restructuring advisory practice, which includes our recently acquired subsidiary Chanin, has advised hundreds of clients in transactions valued collectively at over $150 billion.

82


Our Clients

        We have a client base that includes Fortune 1000 and smaller corporations, prominent law firms and leading private equity and hedge funds. Our clients operate in a broad array of industries, including automotive, consumer products, energy, financial services, healthcare, industrial products, media and entertainment, pharmaceuticals, real estate, technology, telecommunications and utilities. In 2006, we conducted over 4,400 engagements for over 2,400 clients located around the globe, including approximately 36% of the S&P 500 companies. Our top ten clients represented 12% of our revenues in 2006, and no single client accounted for more than 3% of our revenues in 2006.

        We believe the strength of our existing customer relationships provides us with a substantial opportunity to generate new business through the cross-selling of additional services that are beneficial to our clients. An example of our ability to effectively cross-sell our portfolio of services is our history with a large, diversified industrial company that is a member of the S&P 500. This company became a client of CVC approximately ten years ago, beginning with relatively small tax valuation assignments during the late 1990's. Over the years, we have maintained our relationship with the company, despite significant management and structural changes within the company. As a result of our knowledge of their business and our long-standing relationship, we have the ability to sell additional financial advisory and investment banking services to this client and maintain our position as a preferred provider. During 2006, we generated approximately $7.7 million in revenue from this company, consisting of approximately $5.7 million of multiple tax valuation services and assignments, approximately $1.0 million of financial reporting services, approximately $0.9 million of investment banking services and approximately $0.1 million of other financial advisory services. We believe that our ability to cross-sell our services to our existing clients will continue to increase as we expand our service and geographic portfolio and continue to enhance coordination of our marketing activities.

Our Professionals

        We believe our core asset is our professional staff, their intellectual capital, their professional relationships, and their dedication to providing the highest quality services to our clients. We seek talented, motivated and detail-oriented individuals with a desire to grow in a challenging, professional and diversified work environment. We believe individuals are attracted to us because we combine the stability, professionalism and client relationships of a large firm with the collaborative culture and conflict-free environment of a smaller, high growth firm, which enables our personnel to maximize their commercial potential and career development opportunities.

        At June 30, 2007, we had 870 globally based personnel, consisting of 686 client service professionals, 63 executive assistants and 121 internal support personnel. Of our 686 client service professionals, 126 were managing directors, and 560 were directors, vice-presidents, senior associates and analysts. Most of our client service professionals have backgrounds in accounting, finance and economics. The common elements of these skill sets enables us to readily transfer staff between service lines to better manage the utilization and career development of our client service professionals. We source these client service professionals from top undergraduate and graduate schools, and from a variety of our competitors, including the Big Four, independent specialty consulting firms, middle market investment banks, and larger, diversified investment banks.

        We consistently monitor the performance of our personnel through an annual performance management process which is designed to align performance with our business strategy, assess competency against appropriately set benchmarks and identify development needs in the context of short and long-term career aspirations. To reward performance we have implemented a reward program which aims to aggressively differentiate compensation based on performance. Our reward program includes a base pay, an incentive bonus and a variety of benefits. We also aim to align the interests of our personnel with those of the firm through significant equity ownership programs. Excluding executive management, personnel will own 19.7% of our Class A common stock outstanding following

83



the completion of this offering, assuming that all the New Class A Units outstanding after giving effect to the Reorganization and Offering and the Shinsei Investment, except those held by Duff & Phelps Corporation, are exchanged into shares of our Class A common stock. Many of our senior client service professionals are subject to non-competition and non-solicitation covenants which, in most cases, prohibit the individual from soliciting our clients for a period of two years following termination of the person's employment with us and from soliciting our personnel for a period of two years after termination of the person's employment.

        We have comprehensive training programs in place to further enhance the development of our personnel. We provide ongoing professional development through the D&P University (our annual multi-week national training event) for new client service professionals and internal courses on both technical and non-technical subjects, and support personnel in their career progression through training and development programs designed to help new and recently promoted personnel to quickly become effective in their new roles.

Business Development & Marketing

        Our goal is to build a leading, global, well-recognized brand that is synonymous with high quality, financial advisory and investment banking services. We generate new business opportunities primarily based on the professional relationships of our managing directors, our reputation in the marketplace, and referrals from third party advisors, including law, accounting and investment banking firms and our corporate investor clients. Our managing directors are respected within their chosen fields and are instrumental to our business development activities. Many of our managing directors are recognized as leaders in their fields of expertise, and are members of national trade boards and committees of trade associations.

        Our client service professionals are encouraged to generate new business from both existing and new clients, and are rewarded with increased compensation and promotions for obtaining new business. Many of our client service professionals have published articles in industry, business opportunities, economic and legal journals and have made speeches and presentations at industry conferences and seminars, which serve as a means of attracting new business and enhancing their reputations. In pursuing new business, our client service professionals emphasize Duff & Phelps' institutional reputation and experience, while also promoting the expertise of the particular individuals who will work on the matter. We augment the business development activities of our managing directors and other client service professionals with a centralized marketing group that provides traditional marketing services such as local advertising in business and industry periodicals, the production of marketing materials and the organization and sponsorship of seminars, trade conferences and other events.

Competition

        Our competition varies by segment. Within our Financial Advisory segment, we compete primarily with the consulting practices of major accounting firms, such as the Big Four, and regional and global consulting companies. Within our Investment Banking segment, we compete with both boutique M&A and restructuring advisory firms as well as large, diversified investment banks. We believe the principal competitive factors in both segments include the reputation of the firm and its professionals, technical expertise and experience, the ability to rapidly deploy large teams for client engagements, geographic presence, and to a lesser extent, price. See "Risk Factors—Risks Related to Our Business—The financial advisory and investment banking industries are highly competitive, and we may not be able to compete effectively."

Regulation

        We, as a participant in the financial services industry, are subject to extensive regulation in the U.S. and elsewhere. As a matter of public policy, regulatory bodies in the U.S. and the rest of the

84



world are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of customers participating in those markets. In the United States, the SEC is the federal agency responsible for the administration of the federal securities laws. Duff & Phelps Securities, LLC, our subsidiary through which we provide our M&A advisory services, is registered as a broker-dealer with the SEC and is a member firm of the NASD. Accordingly, the conduct and activities of Duff & Phelps Securities, LLC are subject to the rules and regulations of and oversight by the SEC, the NASD, and other self-regulatory organizations which are themselves subject to oversight by the SEC. As Duff & Phelps Securities, LLC is also registered to conduct business in a substantial majority of the U.S. states, the District of Columbia and Puerto Rico, state securities regulators also have regulatory or oversight authority over Duff & Phelps Securities, LLC. In addition, Duff & Phelps Securities, Ltd., is in the process of applying for registration with the Financial Services Authority in the U.K. Our business may also be subject to regulation by non-U.S. governmental and regulatory bodies and self-regulatory authorities in other jurisdictions in which we operate.

        Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of customers' funds and securities, capital structure, record-keeping, the financing of customers' purchases and the conduct and qualifications of directors, officers and employees. In particular, as a registered broker-dealer and member of various self-regulatory organizations, Duff & Phelps Securities, LLC is subject to the SEC's uniform net capital rule, Rule 15c3-1. Rule 15c3-1 specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer's assets be kept in relatively liquid form. The SEC and various self-regulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, limit the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker- dealer to expand its business under certain circumstances. Additionally, the SEC's uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital. Certain of our businesses are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to the privacy of client information, and any failure to comply with these regulations could expose us to liability and/or reputational damage.

        Additional legislation, changes in rules promulgated by the SEC and self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect the mode of our operation and profitability.

        The U.S. and non-U.S. government agencies and self-regulatory organizations, as well as state securities commissions in the United States, are empowered to conduct administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees.

Intellectual Property

        Our success has resulted in part from our methodologies and other proprietary intellectual property rights. We rely upon a combination of nondisclosure and other contractual arrangements, trade secret, copyright and trademark laws to protect our proprietary rights and rights of third parties from whom we license intellectual property. We also enter into confidentiality and intellectual property agreements with our personnel that limit the distribution of proprietary information. We currently have only a limited ability to protect our important intellectual property rights. Pursuant to a name use agreement between us and Phoenix Duff & Phelps Corporation, a subsidiary of Phoenix Life Insurance Company, we have the perpetual exclusive right to use the Duff & Phelps name in connection with capital raising, M&A advisory services, corporate valuation, fairness opinions, strategic financial consulting, capital adequacy opinions and certain other investment banking businesses. See "Risk

85



Factors—Risks Related to Our Business—Our intellectual property rights in our 'Duff & Phelps Corporation' name are important, and any inability to use that name could negatively impact our ability to build brand identity."

Facilities

        We currently have offices located in 21 cities across the U.S., Europe and Asia. Our current principal executive office, which we occupied commencing in June 2007, is located in one leased facility in New York, consisting of approximately 60,000 square feet of office space under a 16-year sublease that expires in 2023. Total annual rent expense for our principal executive offices in 2006, including base rent, operating expenses and taxes, was $3.3 million. Our principal executive office in New York accommodates our executive team and corporate functions, as well as client services professionals in many of our practice groups.

        We also occupy leased facilities for our other offices under non-cancelable operating leases that expire at various dates through 2021 and that include fixed or minimum payments, plus, in some cases, scheduled base rent increases over the terms of the lease.

        We believe our current facilities are adequate to meet our needs for at least the next twelve months.

Legal Proceedings

        From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this prospectus, we are not a party to or threatened with any litigation or other legal proceeding that, in our opinion, could have a material adverse effect on our business, operating results or financial condition.

86



MANAGEMENT

Executive Officers and Directors

        The following table sets forth information regarding our directors and executive officers. Our executive officers also will serve as executive officers of our subsidiaries, including D&P Acquisitions. All of our directors and executive officers were elected or appointed to their positions effective May 2007, other than William R. Carapezzi, who was appointed in July 2007.

Name

  Age
  Position
Noah Gottdiener   51   Chief Executive Officer and Chairman of the Board
Gerard Creagh   49   President and Director
Jacob Silverman   35   Executive Vice President & Chief Financial Officer
Brett Marschke   44   Executive Vice President & Chief Operating Officer
Edward Forman   38   Executive Vice President, General Counsel & Secretary
Robert Belke   37   Director
Peter Calamari   32   Director
William R. Carapezzi   50   Director
Harvey Krueger   78   Director
Sander Levy   45   Director
Jeffrey Lovell   55   Director

        Noah Gottdiener has served as the Chief Executive Officer of D&P Acquisitions since March 2004 when he led the acquisition of Duff & Phelps, LLC from Webster Financial Corporation, and currently serves as our Chief Executive Officer and the chairman of our board of directors. Mr. Gottdiener was the founding partner of Stone Ridge Partners LLC, an M&A advisory firm focused on middle market companies. Previously, Mr. Gottdiener was a Partner of Thomas Weisel Partners and Furman Selz LLC, and a Managing Director at Lehman Brothers, Inc., or Lehman Brothers, where he began his career. Mr. Gottdiener has more than 20 years of investment banking origination, execution and management experience. Mr. Gottdiener sits on the advisory board of the National Outdoor Leadership School and is a member of the advisory council of the mathematics department of Princeton University. Mr. Gottdiener is also on the Board of Directors of the Manhattan Theatre Club. Mr. Gottdiener received his B.A. from Princeton University and an M.B.A. from Harvard Business School.

        Gerard Creagh has served as the President of D&P Acquisitions since September 2005 and currently serves as our President and a member of our board of directors. Mr. Creagh served as Executive Managing Director of Standard & Poor's Corporate Value Consulting prior to its merger with Duff & Phelps in September 2005. He joined Standard & Poor's from PricewaterhouseCoopers, where he held the position of North American Valuation Services Practice Leader. Mr. Creagh's tenure with PricewaterhouseCoopers came from a merger between Coopers & Lybrand in 1998, where he was the U.S. Leader for its Valuation Practice. He has more than 20 years of experience consulting with U.S. and multinational companies on valuation issues arising from corporate strategies, M&A, joint ventures, divestitures and restructurings. Mr. Creagh received his B.E. and M.E. degrees in mechanical engineering from Manhattan College and his M.B.A. degree in finance from New York University's Leonard N. Stern School of Business.

        Jacob Silverman has served as the Chief Financial Officer of D&P Acquisitions since December 2006 and currently serves as our Chief Financial Officer. Mr. Silverman joined Duff & Phelps in March 2004, in connection with the acquisition of Duff & Phelps, LLC from Webster. From April 2001 to March 2004, Mr. Silverman was with Stone Ridge Partners LLC, an M&A advisory firm

87



focused on middle market companies. He joined Stone Ridge Partners from Atomica Corporation, a venture-backed enterprise software company, where he served as Vice President of Finance and acting CFO. Prior to Atomica, Mr. Silverman worked for Oak Hill Advisors, a private investment firm. Mr. Silverman received his M.B.A and B.A. degrees from Harvard University.

        Brett Marschke has served as the Chief Operating Officer of D&P Acquisitions since January 2007 and currently serves as our Chief Operating Officer. From September 2001 to January 2007, Mr. Marschke was employed by The McGraw-Hill Companies, Inc., where he held the position of Vice President of Human Resources for the Information & Media business and was a member of the Information and Media Executive team. Mr. Marschke has extensive professional service and consulting experience, with PricewaterhouseCoopers, Andersen Consulting (Accenture), Gemini Consulting and Coopers & Lybrand. Mr. Marschke holds a B.A. in Economics from the State University of New York and a CCP certification from the American Compensation Association.

        Edward S. Forman has served as the Executive Vice President, General Counsel and Secretary of D&P Acquisitions since February 2006 and currently serves as our Executive Vice President, General Counsel and Secretary. From May 1998 to February 2006, Mr. Forman was employed by The BISYS Group, Inc., a publicly traded financial outsourcing company, most recently as its Senior Vice President, Acting General Counsel and Secretary. Mr. Forman received his B.A. in economics from Yeshiva University and his J.D. and M.B.A. from Columbia University.

        Robert M. Belke has served as a member of the board of managers of D&P Acquisitions since September 2005, when D&P Acquisitions was formed in connection with the CVC acquisition. Prior to that, Mr. Belke was a member of the board of managers of Duff & Phelps Holdings, LLC from March 2004. Mr. Belke currently serves as a member of our board of directors. He is also a Managing Director of Lovell Minnick Partners LLC. Mr. Belke has worked for Lovell Minnick Partners LLC and its predecessor firm since 2000. Prior to joining Lovell Minnick Partners, he was an associate in the Private Equity Group at Teachers Insurance and Annuity Association — College Retirement Equities Fund. Mr. Belke received his B.B.A. degree in Finance and Accounting from the University of Wisconsin and an M.B.A. with honors in Finance and Accounting from the University of Chicago. Mr. Belke also serves on the boards of directors of UNX, Inc. and PlanMember Financial Corporation, and on the board of managers of Denali Advisors, LLC.

        Peter Calamari currently serves as a member of our board of directors. He is also a Vice President of Vestar Capital Partners, which he joined in 1999. Prior to joining Vestar, Mr. Calamari was a member of the Mergers & Acquisitions group at Merrill Lynch. Mr. Calamari received his B.A. from Yale University and an M.B.A. from Harvard Business School. Mr. Calamari is on the board of directors of Solo Cup Company, Birds Eye Foods, Inc. and Consolidated Container Corporation. He also serves on the board of directors of the Colorado Coalition for the Homeless.

        William R. Carapezzi joined our board of directors in July 2007. Prior to his retirement in 2006, Mr. Carapezzi served as the Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary of Lucent Technologies Inc. from 2004 to 2006. Prior to that role, he was Vice President — Global Tax and Trade of Lucent Technologies Inc. from 2002 to 2004. Mr. Carapezzi received his B.S. in Accounting from Fairfield University, his J.D. from Western New England School of Law, and his L.L.M. in Taxation from New York University School of Law.

        Harvey M. Krueger has served as a member of the board of managers of D&P Acquisitions since 2006 and currently serves as a member of our board of directors. Mr. Krueger is Vice Chairman Emeritus of Lehman Brothers and has been involved with that firm and Kuhn Loeb & Co, one of its constituent firms, since 1959. Mr. Krueger currently serves as a director of Delta Galil Industries, Chaus, Inc. and Hansard Global plc, and is also Chairman of Stockton Partners Inc. In addition, Mr. Krueger is former chairman of the Peres Center for Peace, former Chairman of Cooper-Hewitt National Design Museum of the Smithsonian Institution, former and honorary Chairman of the

88



Hebrew University of Jerusalem and a member of the Board of Directors of Beth Israel Medical Center (NY) and Continuum Health Partners.

        Sander M. Levy has served as a member of the board of managers of D&P Acquisitions since September 2005, when D&P Acquisitions was formed in connection with the CVC acquisition. Mr. Levy currently serves as a member of our board of directors. He is also a Managing Director of Vestar Capital Partners and was a founding partner of Vestar Capital Partners at its inception in 1988. Previously, he was a member of the Management Buyout Group of The First Boston Corporation. Mr. Levy is currently a member of the board of directors of St. John Knits, Inc., Symetra Financial Corporation, Wilton Re Holdings Limited and Validus Holdings, Ltd. Mr. Levy received his B.S. from The Wharton School, University of Pennsylvania and an M.B.A. from Columbia University.

        Jeffrey Lovell has served as a member of the board of managers of D&P Acquisitions since September 2005 when D&P Acquisitions was formed in connection with the CVC acquisition. Prior to that, Mr. Lovell was a member of the board of managers of Duff & Phelps Holdings, LLC, from March 2004. Mr. Lovell currently serves as a member of our board of directors. He is also Chairman and Chief Executive Officer of Lovell Minnick Partners LLC, which he co-founded in 1999. Prior to founding Lovell Minnick Partners LLC, Mr. Lovell was the co-founder and President of Putnam Lovell Securities, now a division of Jefferies & Co. Inc., in 1987 following twelve years at SEI Investments where he held executive and operating positions. Mr. Lovell received a B.S.B.A., from the Leeds School of Business at the University of Colorado. Mr. Lovell also serves on the board of managers of Berkeley Capital Management LLC and on the boards of directors of ALPS Holdings Inc. and PlanMember Financial Corporation.

Board of Directors

        Our bylaws provide that our board of directors shall consist of such number of directors as shall from time to time be fixed by our board of directors, which will initially consist of eight directors. Each director will serve until our next annual meeting or until the director's earlier resignation or removal.

Committees of the Board of Directors

        Upon consummation of this offering, we will establish the following committees of our board of directors:

Audit Committee

        The audit committee:

    reviews the audit plans and findings of our independent registered public accounting firm and our internal audit and risk review staff, as well as the results of regulatory examinations, and tracks management's corrective action plans where necessary;

    reviews our financial statements, including any significant financial items and/or changes in accounting policies, with our senior management and independent registered public accounting firm;

    reviews our financial risk and control procedures, compliance programs and significant tax, legal and regulatory matters; and

    has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance and set clear hiring policies for employees or former employees of the independent registered public accounting firm.

        The members of the committee have not yet been appointed. We intend to appoint at least three members that are "independent" directors as defined under NYSE rules and Rule 10A-3 of the Exchange Act within the time period specified in the NYSE's transition rules applicable to companies completing an initial public offering.

89



Nominating and Corporate Governance Committee

        The nominating and corporate governance committee:

    reviews the performance of our board of directors and makes recommendations to the board regarding the selection of candidates, qualification and competency requirements for service on the board and the suitability of proposed nominees as directors;

    advises the board with respect to the corporate governance principles applicable to us; and

    oversees the evaluation of the board and management.

        The members of the committee have not yet been appointed. We intend to appoint at least three members that are "independent" directors as defined under the NYSE rules.

Compensation Committee

        The compensation committee:

    reviews and recommends to the board the equity incentive grants for all professionals, consultants, officers, directors and other individuals to whom we make such grants;

    reviews and approves corporate goals and objectives relevant to chief executive officer compensation, evaluates the chief executive officer's performance in light of those goals and objectives, and determines the chief executive officer's compensation based on that evaluation; and

    oversees our compensation and employee benefit plans.

        The members of the committee have not yet been appointed. We intend to appoint at least three members that are "independent" directors as defined under the NYSE rules, "non-employee" directors as defined in Rule 16b-3(b)(3) under the Exchange Act and "outside" directors within the meaning of Section 162(m)(4)(c)(i) of the Code.

Compensation Committee Interlocks and Insider Participation

        Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will form a compensation committee as described above. The board of managers of D&P Acquisitions has historically made all determinations regarding executive officer compensation, including compensation decisions during the year ended December 31, 2006. None of our executive officers has served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the board of managers of D&P Acquisitions, our board of directors or compensation committee.

Compensation Discussion and Analysis

Overview

        The following paragraphs provide an overview and analysis of our executive compensation policies and programs, the compensation decisions material to an understanding of our policies and programs, and the material factors and rationale considered in making those decisions. This discussion is intended to put in context the information in the tables that follow, each of which contains detailed information on the compensation granted, earned and paid to our named executive officers.

        In connection with this offering, we retained the compensation consulting firm Watson Wyatt Worldwide, Inc. ("Watson Wyatt") to evaluate our compensation practices and assist in developing and implementing our executive compensation program and philosophy. Watson Wyatt developed competitive peer groups and performed analyses of competitive performance and compensation levels. Watson Wyatt also met with the members of our board of directors and our senior management to learn about our business operations and strategy, key performance metrics, target goals and the labor

90



and capital markets in which we compete. Watson Wyatt provided peer group information and information regarding the competitiveness of the compensation provided to our named executive officers to our board of directors. This information provided by Watson Wyatt and described in greater detail below was utilized by our board of directors in the construction of the compensation elements within the employment agreements as well as the equity grant guidelines for the named executive officers.

Objectives of Our Compensation Program

        Our objective is to have an executive compensation program that will attract and retain the best possible executive talent, to tie annual and long-term cash and equity to achievement of measurable corporate and individual performance goals and objectives, and to align executives' incentives with stockholder value creation. To achieve these objectives, the board of managers of D&P Acquisitions has implemented, and it is expected that the compensation committee, when formed, will continue to implement and maintain compensation plans that tie a substantial portion of executives' overall compensation to our financial performance, including our revenue and earnings growth. Overall, the executive compensation program is intended to create the opportunity for total compensation that is comparable with that available to executives at other companies of similar size in comparable industries. The compensation committee will review and recommend for approval to the board all of our compensation policies regarding our executive officers, which we expect will include the following:

    provide a pay opportunity that is dependent to a large extent upon our performance via variable pay rather than fixed pay;

    provide a pay opportunity that is targeted at or near the median of competitive companies, with an opportunity for pay higher than the median if our performance is higher than our targeted performance; and

    determine compensation practices of our competitors by reference to relevant benchmarks in the industry, executive pay surveys, and peer group practices as described below as "Peer Group 1."

Determining Executive Compensation

        Our board of directors, after receiving recommendations from the compensation committee, will ultimately bear the primary responsibility for approving the compensation of our named executive officers, other than our chief executive officer. Among other things, the compensation committee will be responsible for:

    setting the compensation of our chief executive officer;

    overseeing our equity incentive plans;

    developing and recommending to the board total compensation for directors;

    reviewing development and succession plans;

    evaluating the performance of the chief executive officer;

    approving any employment agreement, severance arrangement, retirement arrangement, change in control agreement or provision, and any special or supplemental benefit for the chief executive officer or any other executive officer; and

    to the extent the board of directors decides that it is advisable, any matter involving compensation assigned to the compensation committee by the board of directors.

        The chief executive officer will provide his recommendations regarding compensation matters involving named executive officers, including base and total compensation, to the compensation committee. From time to time, the chief executive officer may consult with Watson Wyatt or other compensation experts to obtain competitive information regarding compensation levels at peers or surveyed companies before submitting his recommendations to the compensation committee. The chief

91



executive officer also may have input in the determination of appropriate peers and surveyed companies, before being approved by the compensation committee. The compensation committee will independently determine the performance of the chief executive officer and approve his compensation levels, including base and total compensation.

        Prior to the formation of the compensation committee, the task of recommending and approving the compensation elements provided to the named executive officers has resided with the board of managers of D&P Acquisitions.

Peer Groups

        In determining the various levels of compensation and equity grants, in consultation with Watson Wyatt, we constructed two peer groups. Our purpose in constructing two peer groups was to provide a sufficient number of companies to be benchmarked to allow for any comparison to be statistically relevant.

        Peer Group 1 was utilized to determine the appropriate level of base and total compensation for the named executive officers within their employment agreements. Peer Group 1 consists of those companies that are similar in revenue, market capitalization, and industry to us. Peer Group 1 is comprised of the following companies:

Company Name

  Industry

Advisory Board Co.   Management Consulting Services
CBIZ, Inc.   Accounting Services
Cohen & Steers, Inc.   Investment Advice
CRA International, Inc.   Legal Services
Diamond Management & Technology Consultants, Inc.   Management Consulting Services
Digitas, Inc.   Management Consulting Services
Exponent, Inc.   Management Consulting Services
First Advantage Corporation   Business Services
FTI Consulting, Inc.   Accounting Services
Huron Consulting Group Inc.   Management Consulting Services
LECG Corporation   Management Consulting Services
Navigant Consulting, Inc.   Management Consulting Services
PHH Corporation   Fleet Management Services
Resources Connection, Inc.   Accounting Services
Watson Wyatt Worldwide, Inc.   Management Consulting Services

        Peer Group 2 was constructed to determine the appropriate level of equity to be granted to the named executive officers in connection with this offering. Peer Group 2 consists of those companies

92



within the business services or financial services industry that have completed an initial public offering within the prior several years.

Company Name

  Industry

Clayton Holdings, Inc.   Mortgage Banking
Cohen & Steers, Inc.   Investment Advice
Cowen Group, Inc.   Financial Services
CRA International, Inc.   Business Services
Evercore Partners Inc.   Financial Services
Fortress Investment Group LLC   Financial Services
FTI Consulting, Inc.   Business Services
Greenhill & Co., Inc.   Financial Services
Heartland Payment Systems, Inc.   Business Services
Hewitt Associates, Inc.   Management Consulting Services
Huron Consulting Group, Inc.   Management Consulting Services
ICF International, Inc.   Management Consulting Services
LECG Corporation   Management Consulting Services
Navigant Consulting, Inc.   Management Consulting Services
TRX, Inc.   Business Services

Executive Compensation Components

        Our executive compensation program consists primarily of the following components: base salary, annual bonus and long-term incentives (stock options, restricted stock awards and other long-term awards). The program includes minimal levels of perquisites and also includes severance and change-in-control benefits.

        Base Salary.    Historically, base salaries for each executive were set by the board of managers of D&P Acquisitions based on the executive's duties and responsibilities, individual performance, contribution, tenure and experience. In September 2005, concurrent with the CVC Acquisition, the base salaries for Messrs. Gottdiener, Creagh and Silverman were established in connection with the execution of their employment agreements. In 2006, base salaries for Messrs. Forman and Livingston were established upon their joining the Company in accordance with the criteria set forth above. There were no increases to base salaries of our named executive officers during 2006. During the first quarter of 2007, the base salaries of Messrs. Gottdiener, Creagh, Silverman and Forman were reviewed by the board of managers of D&P Acquisitions, which proposed an increase to reflect our performance, the individual's performance, as well as the increased responsibilities relating to this offering and being a public company.

        Following the consummation of this offering, base salaries for our named executive officers will be adjusted based on the scope of their responsibilities, taking into account competitive market compensation paid by the companies listed above in Peer Group 1 and other companies of similar size in comparable industries for similar positions. We believe that executive base salaries should be targeted near or above the median of the range of salaries for executives in similar positions with similar responsibilities at comparable companies, in line with our compensation philosophy. Annual salary adjustments will be based on the executive's individual performance, contribution, tenure and experience.

        Annual Bonus.    In the first quarter of 2007, Messrs. Gottdiener, Creagh and Silverman were entitled to an annual bonus award for the fiscal year ended December 31, 2006 in accordance with their employment agreements in effect at that time. This bonus award was calculated by multiplying the target bonus amount (50% of their base salary) by a fraction (i) the numerator of which was the Company EBITDA less a stated Minimum Company EBITDA (each as defined in the employment

93



agreements) and (ii) the denominator of which was the stated Target Company EBITDA less the Minimum Company EBITDA. Upon the recommendations of Messrs. Gottdiener, Creagh and Silverman, the amount of the annual bonus award each was entitled to was reduced by $58,000, $38,000 and $33,000, respectively, and used to increase the Company's non-executive officer bonus pool. Given the amount by which the Company EBITDA exceeded Target Company EBITDA, bonuses were paid at approximately four times target bonus amounts. Bonuses paid to Messrs. Gottdiener, Creagh and Silverman were $1,280,000, $1,161,000 and $705,000, respectively. Based on the recommendation of Mr. Gottdiener, and approval of the board of managers of D&P Acquisitions, Mr. Forman was paid an annual bonus award of $300,000, which was approximately three times his target annual bonus of $95,000. This was based on the Company's performance and determination that Mr. Forman substantially exceeded his individual goals and objectives during 2006.

        Following the consummation of this offering, the compensation committee will recommend and the board will have the authority to award discretionary bonuses to our executive officers, other than our chief executive officer, subject to the parameters set forth in their employment agreements. Consistent with our emphasis on performance incentive compensation programs, bonuses are to be paid to executive officers based on our financial performance. Pursuant to their employment agreements to be effective upon the effectiveness of the registration statement in connection with this offering, target annual bonus awards for each of our executive officers is 100% of their base salary, based on our achieving target adjusted EBITDA thresholds specified in the employment agreements. The employment agreements do not fix a maximum payout for any executive officer's annual bonus. Annual bonuses are typically paid to executive officers during the first quarter in respect of the prior year.

        The target annual bonus award was increased to 100% of base salary in order to adjust proportionally with the thresholds, which we doubled since 2006. Both the target bonus as a percentage of base salary and the target adjusted EBITDA in the new employment agreements were doubled to allow the target adjusted EBITDA to be more in line with our actual results. Since both the target adjusted EBITDA and the target bonus percentage were adjusted by the same factor, this adjustment did not result in any change to the bonus calculation in the new employment agreements from the prior employment agreements. The annual bonus award will be calculated by multiplying the base salary by a fraction (i) the numerator of which shall be Company EBITDA less Minimum Company EBITDA (which shall not result in a number less than zero), and (ii) the denominator of which shall be Target Company EBITDA less Minimum Company EBITDA. "Company EBITDA" is as defined in the employment agreements and represents EBITDA adjusted (up or down) as follows: (i) any non-recurring one-time expenses or any such expenses as determined by the Executive Committee of the Board and approved by the Compensation Committee of the Board will be added to Company EBITDA, (ii) Company EBITDA attributable to any acquisition with an aggregate purchase price during any 12 month period in excess of $10 million will be subtracted from Company EBITDA, (iii) the aggregate annual bonus amounts payable to Messrs. Gottdiener, Creagh and Silverman for such period under their respective employment agreements will be added to Company EBITDA, and (iv) any compensation expense related to the portion of any equity awards issued to the executive or any of our other other employees or employees of any of our affiliates or subsidiaries as part of his or her annual bonus award will be subtracted from Company EBITDA. We believe that: (i) non-recurring expenses are not generally indicative of the executive's performance and, as such, should not be considered in determining executive compensation unless specifically approved by the compensation committee, (ii) in order to properly align executives with the interests of shareholders, executives should not be credited with EBITDA added as a result of significant acquisitions, and (iii) the exclusion of compensation expense related to equity awards is consistent with the definition of Adjusted EBITDA discussed in "Prospectus Summary—Summary Historical Consolidated Financial and Operating Information." In addition, in setting the Target Company EBITDA, the inclusion of bonus payments to Messrs. Gottdiener, Creagh and Silverman was taken into account. "Minimum Company EBITDA" and

94



"Target Company EBITDA" mean, for each fiscal year, the corresponding amount of Company EBITDA shown in the table below:

Fiscal year ended
December 31,

  Minimum
Company EBITDA

  Target
Company EBITDA


2007

 

$

30,650,000

 

$

44,975,000

2008

 

$

35,450,000

 

$

52,175,000

2009

 

$

38,650,000

 

$

56,975,000

2010

 

$

42,218,000

 

$

62,327,000

The targets are consistent with those established for compensation purposes in the employment agreements entered into in connection with the CVC Acquisition in September 2005 and have not been revised to reflect our current expectations as a result of changes in company performance or general industry or economic conditions since that date. As such, the Target Company EBITDA does not represent our current view of our projected results in any of the periods presented. Based on our results to date and assuming similar results for the remainder of the year, we anticipate that Target Company EBITDA will be exceeded in 2007. The annual bonus award will be payable in a combination of cash and a number of restricted shares of Class A common stock as described below in the description of employment agreements.

        Long-Term Incentive Program.    We believe that long-term performance is achieved through an ownership culture that encourages long-term performance by our executive officers through the use of stock and stock-based awards. Our long-term incentive plan will be established prior to the consummation of this offering to provide certain of our personnel, including our executive officers, with incentives to help align those individuals' interests with the interests of stockholders. We believe that the use of stock and stock-based awards offers the best approach to achieving our compensation goals.

        In connection with the stated objective of achieving the ownership goal with the provision of long-term incentive awards, we are adopting the 2007 Omnibus Stock Incentive Plan which will permit the granting of several types of equity-based compensation awards. The determination of the grant pool together with the awards for the chief executive officer and other executive officers was determined based upon the competitive data provided by Watson Wyatt from industry surveys and available information within the peer group established by Watson Wyatt. The following details the 2007 grants that have been and are being made to the named executive officers pursuant to this Plan.

2007 Grants

        In January 2007, the board of managers of D&P Acquisitions granted 700,000 Class E Units in D&P Acquisitions to Mr. Marschke in connection with his joining the company which, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus, are convertible into approximately 113,554 New Class A Units pursuant to the Recapitalization Transaction, which vest 20% on each of the first five anniversaries of the date of grant. Effective on the date of this offering, our board of directors awarded options to purchase 135,000 shares of Class A common stock to Noah Gottdiener, our chairman and chief executive officer, and options to purchase 410,000 shares of Class A common stock in the aggregate to our other named executive officers. All of these options are nonqualified stock options and have an exercise price equal to the initial public offering price in this offering. In determining these grants, our board of directors allocated an aggregate number of stock options to be issued to our executive officers based on the size of similar grants made by companies listed in Peer Group 2. Based on Mr. Gottdiener's recommendation, our board of directors allocated this pool of options to our executive officers. Mr. Gottdiener's recommendations were based on his assessment that all of the executives have

95



contributed to our performance and are expected to contribute to our future performance. Messrs. Creagh and Gottdiener were allocated more options than Messrs. Forman, Marschke and Silverman in light of the leadership they have exhibited and are expected to continue to exhibit in their roles as our President and Chief Executive Officer, respectively. The Company has not yet made a determination with respect to future grants.

Other Compensation

        Our determination regarding levels of benefits and perquisites is based on what we have seen in the market through our recruiting process and our actual ability to hire senior executives over the last several years. The benefits we have provided to our executives have not materially changed during that period and we believe we are generally competitive with the market. The benefits provided to our executives have been for the most part limited to core benefit programs including health and welfare plans, defined contribution plans, vacation and severance that we find to be typical in the market.

        Gerard Creagh, our President, received $16,200 in 2006 in reimbursements for membership dues to his country club and is entitled to certain retiree medical benefits. All of our executive officers are eligible for benefits offered to personnel generally, including life, health, disability, dental and vision insurance and our 401(k) plan. In addition, certain of our more senior personnel, including our executive officers, are eligible for supplemental group variable life insurance, supplemental disability plan and a nonqualified supplemental retirement plan. The compensation committee in its discretion may revise, amend or add to the executive officers' benefits and perquisites if it deems it advisable.

        Prior to this offering, our business was conducted through one or more entities, including D&P Acquisitions, that will become our subsidiaries upon consummation of this offering.

Employment Agreements with Executive Officers

        On July 17, 2007, Duff & Phelps, LLC entered into employment agreements with each of Messrs. Gottdiener, Creagh, Silverman, Marschke and Forman, which provide that Mr. Gottdiener will serve as our Chief Executive Officer, Mr. Creagh as our President, Mr. Silverman as our Executive Vice President and Chief Financial Officer, Mr. Marschke as our Chief Operating Officer and Mr. Forman as our Executive Vice President, General Counsel and Secretary. Each of the agreements will become effective on the date that our registration statement with respect to our initial public offering becomes effective and has an initial term that ends on December 31, 2010, with automatic one-year renewal periods thereafter.

        Pursuant to the employment agreements, Mr. Gottdiener will receive an annual base salary of $750,000; Mr. Creagh will receive an annual base salary of $675,000; Mr. Silverman will receive an annual base salary of $425,000; Mr. Marschke will receive an annual base salary of $400,000 and Mr. Forman will receive an annual base salary of $300,000. The annual salaries may be increased from time to time by our board of directors (or in the case of Mr. Gottdiener, the compensation committee). In addition, each of the employment agreements provide for an annual bonus for each fiscal year. The target annual bonus is 100% of annual base salary, based on our achieving targeted adjusted EBITDA thresholds specified in the employment agreements. See "Compensation Disclosure and Analysis—Executive Compensation Components—Annual Bonus." If we achieve greater than the targeted adjusted EBITDA threshold, the amount of the bonus increases proportionally and is not subject to a cap. The annual bonus is payable in the form of 70% cash and the remainder in a number of restricted shares of our Class A common stock, valued at the per share closing price on the date the bonus is paid, rounded down to the nearest whole share. The restricted shares awarded as bonus payments generally become non-forfeitable as to 1/3 of each such award on each of the first three anniversaries of the subject award. In addition, each of the executive officers may elect to increase the amount of their bonus payable in restricted stock by up to 15%, such that the maximum percentage of the bonus payable in such restricted stock is 45%. In the event that an executive officer so elects, we will grant a matching award of restricted stock equal to the number of shares of restricted stock paid as a result of

96



the election. The matching award will have the same vesting schedule as the automatic awards discussed above. In order to receive an annual bonus, the executive generally must have been employed by us or one of our subsidiaries on the last day of the fiscal year to which the bonus relates. Each annual bonus is payable to the executives on or before March 15, following the year to which it applies. The employment agreements also provide that each of the executive officers will be eligible to participate in company benefit plans relating to, among other things, options, equity purchase, pension, profit sharing, employee equity ownership and group life insurance.

        Pursuant to the employment agreements, if an executive's employment terminates prior to the expiration of the term by us for "cause" (as defined in the employment agreements) or is terminated by the executive without "good reason" (as defined in the employment agreements), the executive would be entitled to receive any base salary earned, but unpaid through the date of termination.

        If an executive's employment terminates prior to the expiration of the term due to death or "disability" (as defined in the employment agreements), the executive would be entitled to receive any base salary earned, but unpaid through the date of termination, any pro rata portion of the annual bonus up to the date of such termination, acceleration of vesting of the awards of restricted stock paid as part of an annual bonus (other than acceleration of vesting with respect to the matching portion of any award), and acceleration of any unvested equity awarded to the executive prior to the date of the employment agreement.

        If an executive retires after reaching retirement age (generally 65 years of age or 55 years of age with 15 years of service to us or a subsidiary) the executive would be entitled to receive any base salary earned, but unpaid through the date of termination, and, if the executive signs a general release of liability, any unvested equity awarded to the executive under the employment agreement would become vested.

        If an executive's employment is terminated prior to the expiration of the term by us without cause or by the executive for good reason, and the executive signs a general release of liability, the executive would be entitled to (i) any base salary earned but unpaid through the date of termination and a payment equal to the executive's annual base salary as of the date of termination; (ii) the amount of the most recent annual bonus earned by the executive or, if higher, the target bonus amount as of the date of termination, (iii) any pro rata portion of the annual bonus up to the date of termination, (iv) full and immediate vesting of any equity or equity-based awards (including stock options) then held by the executive, (v) should the executive elect continuation of the medical and dental benefits under COBRA, payment of the executive's costs for such coverage for a period of up to one year following the date of termination; and (vi) any other amounts or benefits required to be paid or provided, or which the executive is entitled to receive, as of the date of termination, as provided for under any plan, program, policy, contract or agreement of the company or any subsidiaries, including any severance plan or policy which is then applicable to executive.

        If an executive's employment is terminated prior to the expiration of the term and within eighteen (18) months following a "change in control" (as defined in the employment agreements) and the executive signs a general release of liability, (unless such termination is for cause, by reason of death or disability, or by the executive without good reason) the executive would be entitled to the same payments and benefits as if terminated without cause, and would be entitled to an additional amount equal to the executive's annual base salary as of the date of termination and the amount of the most recent annual bonus earned by the executive or, if higher, the target bonus amount as of the date of termination. For purposes of the employment agreements, change in control generally includes circumstances in which any person acquires 50% of our voting securities, if the directors as of the effective date of the agreement fail to constitute a majority of our board of directors, if there is a merger or acquisition of the company or any of our subsidiaries, or if our stockholders approve a sale or liquidation of the company or an agreement to sell or dispose of substantially all of our assets is consummated.

97



        Our executives are also entitled to tax gross-up payments in the event that compensation to the executive is assessed an excise tax on "excess parachute payments" under section 280G of the Code or in the event that an excise tax is levied as a result of section 409A of the Code (despite the full cooperation of the executives to ensure compliance with Section 409A).

        Pursuant to the employment agreements, our executives are required, whether during or after employment with us, to protect and use confidential information in accordance with the restrictions placed by us on its use and disclosure. Additionally, our executives are subject to customary intellectual property covenants with respect to works created, implemented or developed by them that are relevant to or implicated by employment with us. Further, during the term of employment and during the one-year period immediately after employment is terminated, each of our executives will not, directly or indirectly engage or have any financial interest in any business within a 50-mile radius of any metropolitan area in which we conducted significant business during the 12-month period immediately preceding the subject termination of employment (i) that competes with any business actively conducted in such area by us and (ii) that is of the type of business activity in which the executive was engaged on our behalf. In addition, during the term of employment and during the two-year period immediately after employment is terminated, each of our executives is prohibited from soliciting our employees for hire and from soliciting business from our clients.

        We have also agreed in the employment agreements to indemnify our executives for liability arising from the fact that they were employed by us or acting on our behalf (other than liability incurred as a result of the executive's gross negligence or willful misconduct).

COMPENSATION TABLES

        The following tables set forth certain information concerning compensation paid or accrued by D&P Acquisitions, or one of its affiliates, including Duff & Phelps Holdings LLC ("DPH") which, prior to the date of this offering, holds all of the outstanding Class B Units of D&P Acquisitions, for services rendered in all capacities by our chairman and chief executive officer, our chief financial officer, our former chief financial officer and our other executive officers during the fiscal year ended December 31, 2006. References to units in the tables below are to memberships interests in either of D&P Acquisitions or DPH, as applicable. Each of the units referenced in the tables below will convert, upon consummation of this offering, into a number of New Class A Units determined in accordance with conversion ratios for each class of outstanding units based upon the valuation of D&P Acquisitions as determined by the initial public offering price of the Class A common stock sold in this offering. See "Our Structure—Recapitalization Transactions." Vesting provisions applicable to all classes of Units in D&P Acquisitions that are subject to vesting will continue to apply to the New Class A Units obtained upon conversion. In addition, SEC regulations require inclusion in the tables below of certain compensation expenses imposed by accounting rules on the Company. Accordingly, the information depicted may not reflect actual compensation paid to our officers in 2006.

SUMMARY COMPENSATION TABLE

Name and
Principal Position

  Year
  Salary
($)

  Bonus(1)
($)

  Equity
Awards(2)
($)

  All Other
Compensation(3)
($)

  Total
($)

Noah Gottdiener
Chairman and Chief Executive Officer
  2006   $ 666,401   $ 1,280,000   $ 1,271,465   $ 118,836   $ 3,336,702

Gerard Creagh
President

 

2006

 

$

650,000

 

$

1,161,000

 

$

926,834

 

$

138,455

 

$

2,876,279

Jacob Silverman
Executive Vice President & Chief Financial Officer

 

2006

 

$

400,000

 

$

705,000

 

$

342,503

 

$

336

 

$

1,447,839

Edward Forman(4)
Executive Vice President, General Counsel & Secretary

 

2006

 

$

239,794

 

$

325,000

(5)

$

90,098

 

$

12,167

 

$

667,059
                                   

98



Philip Livingston(6)
Former Chief Financial Officer

 

2006

 

$

233,333

 

 


 

$

159,427

 

$

108,782

 

$

501,542

(1)
Because our executives are paid annual bonuses in the first quarter of the year following the year in which the bonus was earned, the bonuses set forth below were paid during the first quarter 2007, but earned in 2006.

(2)
Reflects the compensation expense recognized in 2006 for equity awards under FAS No 123(R) for each of our identified executive officers and as reported in our financial statements, whether or not the awards were made in 2006. Refer to Notes 3 and 14 to our attached Condensed Consolidated Financial Statements as of June 30, 2007 and June 30, 2006 and Notes 2 and 15 to our Consolidated Financial Statements as of December 31, 2006 and 2005 for a discussion of the relevant assumptions used in calculating the compensation expense.

(3)
All Other Compensation includes: 401(k) match contributions by the Company (generally available to all employees) in the amount of $9,900 for Messrs. Gottdiener and Creagh, $9,804 for Mr. Forman and $8,250 for Mr. Livingston; contributions by the Company to a nonqualified supplemental retirement plan of $33,138 for Mr. Gottdiener, $40,545 for Mr. Creagh and $2,016 for Mr. Forman; premiums on group life insurance policies in the amount of $798 for Messrs. Gottdiener and Creagh, $336 for Mr. Silverman, $347 for Mr. Forman and $532 for Mr. Livingston; severance payments of $100,000 for Mr. Livingston; reimbursement of country club dues of $16,200 for Mr. Creagh; deferred payment to Mr. Creagh in connection with the CVC acquisition of $71,000; and $75,000 paid to Stone Ridge Partners LLC ("Stone Ridge"), a company owned by Mr. Gottdiener, pursuant to a consulting agreement between D&P Acquisitions and Stone Ridge. The consulting agreement was terminated effective December 31, 2006.

(4)
Mr. Forman's compensation in 2006 reflects the fact that he began serving the company in February of 2006.

(5)
Includes a $25,000 sign-on bonus.

(6)
Mr. Livingston's compensation in 2006 reflects the fact that he began serving the company in March of 2006 and left the company in September of 2006. In connection with his departure, the equity awards of Mr. Livingston were forfeited.

GRANTS OF PLAN-BASED AWARDS

        Equity awards made during 2006 to the executive officers identified above are described in the table below.

Name

  Grant
Date

  All Other
Equity Awards:
Number of
Shares of
Stock or
Units
(#)

  Grant Date Fair
Value of Equity
and Option
Awards(1)
($)

 
Noah Gottdiener          
Gerard Creagh          
Jacob Silverman          
Edward Forman   3/1/06     (2) $ 130,000
                               10/29/06     (3) $ 97,000  
Philip Livingston   3/21/06     (4) $ 455,000

(1)
This column shows the full grant date fair value of each award, computed in accordance with FAS 123(R), as mandated by SEC Regulations.

(2)
200,000 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 39,948 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The units vest at a rate of 20% on each of the first five anniversaries of the grant date, with accelerated vesting in the case of a sale (other than in connection with a public offering) of more than 50% of the equity or assets of D&P Acquisition or its affiliates. See "Our Structure—Offering Transactions."

(3)
100,000 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 18,201 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The units vest at a rate of 20% on each of the first five anniversaries of the grant date, with accelerated vesting in the case of a sale (other than in connection with a public offering) of more than 50% of the equity or assets of D&P Acquisition or its affiliates. See "Our Structure—Offering Transactions."

(4)
700,000 Class E Units in D&P Acquisitions. Equity awards made to Mr. Livingston were forfeited in connection with his departure in September 2006.

99


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 
  Equity Awards
Name

  Number of
Units That
Have Not
Vested
(#)

  Market
Value of
Units That
Have Not
Vested(1)
($)

  Equity Incentive Plan
Awards: Number of
Unearned, Units
or Other Rights That
Have Not Vested
(#)

  Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned, Units
or Other Rights That
Have Not Vested(1)
($)

Noah Gottdiener   (2 ) $ 11,481,794   (3 ) $ 867,100
Gerard Creagh   (4 ) $ 4,017,902   (5 ) $ 1,150,000
Jacob Silverman   (6 ) $ 2,434,644   (7 ) $ 345,000
Edward Forman   (8 ) $ 414,000      
Philip Livingston              

(1)
Represents the fair value of the equity awards that have not been considered "vested" for purposes of this table based on a valuation of the various classes of units in D&P Acquisitions or DPH, as applicable, as of December 31, 2006.

(2)
Mr. Gottdiener's equity awards that we have determined to treat as not "vested" for purposes of this table consist of 11,990 Class A Interests and 3,235 Class D Interests in DPH; and 1,633,667 Class E Units in D&P Acquisitions, all of which, effective upon consummation of this offering, convert into 700,609, 214,865 and 326,243 New Class A Units, respectively based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. Mr. Gottdiener purchased an aggregate of 19,749 Class A Interests in DPH on March 15, 2004 for an aggregate purchase price of $531,363. The Class A and Class D Interests in DPH are not subject to vesting but, upon termination of Mr. Gottdiener's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally granted interests becoming repurchasable at 100% of fair market value on each one month anniversary of the date of purchase. The number of interests represented in the table reflects that portion of the DPH interests that was, as of December 31, 2006, repurchasable at 50% of fair market value. The Class E Units in D&P Acquisitions vest 20% per year on each of the first five anniversaries of the date of grant (September 30, 2005).

(3)
Represents 628,333 Class E Units in D&P Acquisitions, all of which, upon consummation of this offering, convert into 125,478 New Class A Units based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus that are subject to D&P Acquisitions achieving specified levels of EBITDA adjusted for certain items, in 2007 and 2008. For each such year in which D&P Acquisitions meets such specified levels of EBITDA adjusted for certain items, 50% of such units will be eligible to vest 20% on each of the first five anniversaries of the date of grant (September 30, 2005).

(4)
Mr. Creagh's equity awards that have not vested consist of 3,664 Class C Units, 362,764 Class D Units and 2,166,668 Class E Units in D&P Acquisitions, all of which, effective upon consummation of this offering, convert into 35,066, 72,567 and 432,684 New Class A Units, respectively, based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The Class C and Class D Units in D&P Acquisitions vest 100% on the fifth anniversary of the date of grant (September 15, 2005); provided that upon the occurrence of an initial public offering, 25% of the Class C and Class D Units vest on each of the first four anniversaries of the date of grant. The Class E Units in D&P Acquisitions vest 20% per year on each of the first five anniversaries of the date of grant (September 30, 2005).

(5)
Represents 833,333 Class E Units in D&P Acquisitions, all of which, upon consummation of this offering, convert into 166,417 New Class A Units based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus that are subject to D&P Acquisitions achieving specified levels of EBITDA adjusted for certain items, in 2007 and 2008. For each such year in which D&P Acquisitions meets such specified levels of EBITDA adjusted for certain items, 50% of such units will be eligible to vest 20% on each of the first five anniversaries of the date of grant

(September 30, 2005).

(6)
Mr. Silverman's equity awards that we have determined to treat as not "vested" for purposes of this table consist of 1,998 Class A Interests and 539 Class D Interests in DPH; and 650,000 Class E Units in D&P Acquisitions all of which, effective upon consummation of this offering convert into 116,749, 35,800 and 129,805 New Class A Units, respectively based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. Mr. Silverman purchased an aggregate of 3,291 Class A Interests in DPH on March 15, 2004 for an aggregate purchase price of $88,547. The Class A and Class D Interests in DPH are not subject to vesting but, upon termination of Mr. Silverman's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally granted interests becoming repurchasable at 100% of fair market value on each one month anniversary of the date of purchase. The number of interests represented in the table reflects that portion of the interests that was, as of December 31, 2006, repurchasable at

100


(continued)



50% of fair market value. The Class E Units in D&P Acquisitions vest 20% per year on each of the first five anniversaries of the date of grant (September 30, 2005).

(7)
Represents 250,000 Class E Units in D&P Acquisitions, all of which, effective upon consummation of this offering, convert into 49,925 New Class A Units based on the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus that are subject to D&P Acquisitions achieving specified levels of EBITDA adjusted for certain items, in 2007 and 2008. For each such year in which D&P Acquisitions meets such specified levels of EBITDA adjusted for certain items, 50% of such units will be eligible to vest 20% on each of the first five anniversaries of the date of grant (September 30, 2005).

(8)
Mr. Forman's equity awards that have not vested consist of 300,000 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 58,149 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The Class E Units in D&P Acquisitions vest 20% per year on each of the first five anniversaries of the date of grant (March 1, 2006 with respect to 200,000 units and October 29, 2006 with respect to 100,000 units).

        The interests and units described in the table above will be converted in connection with the closing of this offering and exchangeable for a number of shares of our common stock having equivalent value. The vesting provisions described above will generally continue to apply to interests obtained upon such conversion or exchange. With respect to the DPH Class A Units and Class D Units held by Messrs. Gottdiener and Silverman, such units will be converted into units in D&P Acquisitions in connection with the Recapitalization Transactions. On September 11, 2007 we entered into agreements with each of Messrs. Gottdiener and Silverman, on the one hand, and D&P Acquisitions and Duff & Phelps, LLC, on the other hand, that provide that the units so converted shall be 75% vested, with the remaining 25% of the units vesting at a rate of 20% on each of the first five anniversaries of the pricing of this offering. There will be no repurchase obligation associated with these converted units. See discussion of "Our Structure—Offering Transactions."

OPTION EXERCISES AND STOCK VESTED

 
  Number of Units
Acquired on Vesting
(#)

  Value Realized on
Vesting
($)

 
Noah Gottdiener   (1 ) $ 1,633,868 (2)
                                 (3 ) $ 461,360 (4)
                                 (5 ) $ 346,839 (6)

Gerard Creagh

 

(7

)

$

459,999

(6)

Jacob Silverman

 

(8

)

$

272,270

(9)
                               (10 ) $ 76,879 (4)
                               (11 ) $ 138,000 (6)

Edward Forman

 


 

 


 

Philip Livingston

 


 

 


 

(1)
Represents 2,821 Class A Interests in DPH which, effective upon consummation of this offering, convert into 164,839 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. Mr. Gottdiener purchased an aggregate of 19,749 Class A Interests in DPH on March 15, 2004 for an aggregate purchase price of $531,363. The Class A Interests in DPH are not subject to vesting but, upon termination of Mr. Gottdiener's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally purchased interests becoming repurchasable at 100% of fair market value on each one month anniversary of the date of purchase. The number of interests represented in the table reflects the portion of the DPH Class A Interests that became repurchasable at 100% of fair market value during 2006.

(2)
Represents the fair value, as of December 31, 2006, calculated in accordance with FAS 123(R), of the DPH Class A Interests included in the table less the purchase price paid by Mr. Gottdiener for such interests.

101


(continued)


(3)
Represents 761 Class D Interests in DPH granted to Mr. Gottdiener on March 15, 2004 which, effective upon consummation of this offering, convert into 50,545 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The Class D Interests in DPH are not subject to vesting but, upon termination of Mr. Gottdiener's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally granted interests becoming repurchasable at 100% of fair market value on each one month anniversary of the date of grant. The number of interests represented in the table reflects the portion of the DPH Class D Interests that became repurchasable at 100% of fair market value during 2006.

(4)
Represents the fair value, as of December 31, 2006, calculated in accordance with FAS 123(R), of the DPH Class D Interests included in the table.

(5)
Represents 251,333 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 50,191 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus.

(6)
Represents the fair value, as of December 31, 2006, calculated in accordance with FAS 123(R), of the Class E Units included in the table.

(7)
Represents 333,333 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 66,567 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus.

(8)
Represents 470 Class A Interests in DPH which, effective upon consummation of this offering, convert into 27,464 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. Mr. Silverman purchased an aggregate of 1,998 Class A Interests in DPH on March 15, 2004 for an aggregate purchase price of $88,547. The Class A Interests in DPH are not subject to vesting but, upon termination of Mr. Silverman's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally purchased interests becoming repurchasable at 100% of fair market value on each one month anniversary of the date of purchase. The number of interests represented in the table reflects the portion of the DPH Class A Interests that became repurchasable at 100% of fair market value during 2006.

(9)
Represents the fair value, as of December 31, 2006, calculated in accordance with FAS 123(R), of the DPH Class A Interests included in the table less the purchase price paid by Mr. Silverman for such interests.

(10)
Represents 127 Class D Interests in DPH granted to Mr. Silverman on March 15, 2004 which, effective upon consummation of this offering, convert into 8,435 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus. The Class D Interests in DPH are not subject to vesting but, upon termination of Mr. Silverman's employment, are repurchasable by DPH initially at 50% of fair market value, with 1/84 of the originally granted interests becoming repurchasable at 100% fair market value on each one month anniversary of the date of grant. The number of interests represented in the table reflects the portion of the DPH Class D Interests that became repurchasable at 100% of fair market value during 2006.

(11)
Represents 99,750 Class E Units in D&P Acquisitions which, effective upon consummation of this offering, convert into 19,920 New Class A Units based upon the assumed initial public offering price of $17.50 per share, the midpoint of the range set forth on the cover of this prospectus.

NONQUALIFIED DEFERRED COMPENSATION(1)

Name

  Registrant Contributions
in Last FY
($)

  Aggregate Earnings
in Last FY
($)

  Aggregate Balance at
Last FYE
($)

Noah Gottdiener   $ 33,138       $ 33,138
Gerard Creagh   $ 40,545   $ 313   $ 48,170
Jacob Silverman            
Edward Forman   $ 2,016       $ 2,016
Philip Livingston            
(1)
Represents contributions made by D&P Acquisitions pursuant to its Nonqualified Supplemental Retirement Plan which is made available to all managing directors and executive officers of D&P Acquisitions. Pursuant to the plan, D&P Acquisitions contributes 4.5% of each participant's total cash compensation that exceed the statutory maximum compensation for 401(k) plan participation ($220,000 in 2006) provided that the participant has made the maximum allowable deductible contribution to his 401(k) account ($15,500 in 2006). These amounts are included in the Summary Compensation Table as "Other Compensation." Earnings on balances in the plan are calculated based on the performance of the ABN Amro Income Plus Fund. Withdrawals from the plan are permitted only upon death, retirement, disability or cessation of employment with D&P Acquisitions.

102


Compensation of Directors

        We will pay an annual fee to each non-affiliated director equal to $50,000, payable quarterly. In addition, an annual fee of $10,000, $7,500 and $7,500, respectively, will be paid to the chairs of each of the audit, compensation and nominating and corporate governance committees of the board of directors. We do not intend to separately compensate our directors who are also employed by us or who are otherwise affiliated with us. All members of the board of directors will be reimbursed for reasonable costs and expenses incurred in attending meetings of our board of directors. In addition, each non-affiliated director will receive an annual grant of Class A common stock with a value of $50,000 based on the closing stock price on the day prior to the annual stockholder's meeting, which Class A common stock will vest over four years, provided that any such issuance does not prevent such director from being determined to be independent.

Equity Incentive Plan

2007 Omnibus Stock Incentive Plan

        The Duff & Phelps Corporation 2007 Omnibus Stock Incentive Plan, our stock incentive plan, will be adopted by our board of directors and approved by our stockholders prior to the consummation of this offering. The stock incentive plan permits us and our subsidiaries to make grants of "incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, dividend equivalent rights and other stock-based awards" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or any combination of the foregoing. We have initially reserved 6,150,000 shares of our Class A common stock for the issuance of awards under our stock incentive plan. The number of shares reserved under our stock incentive plan is also subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization. Generally, shares that are forfeited or canceled from awards under our stock incentive plan also will be available for future awards.

        Our stock incentive plan will be administered by the compensation committee of our board of directors. The compensation committee may interpret the stock incentive plan and may make all determinations necessary or desirable for the administration of the stock incentive plan and has full power and authority to select the participants to whom awards will be granted, to make any combination of awards to participants, to accelerate the exercisability or vesting of any award and to determine the specific terms and conditions of each award, subject to the provisions of our stock incentive plan. All full-time and part-time officers, employees, directors, members and other key persons (including consultants and prospective personnel) of Duff & Phelps Corporation, D&P Acquisitions and affiliates are eligible to participate in our stock incentive plan.

        We may issue incentive stock options or non-qualified stock options under the stock incentive plan. The exercise price of stock options awarded under our stock incentive plan may not be less than 100% of the fair market value of our common stock on the date of the option grant. The compensation committee will determine at what time or times each option may be exercised (provided that in no event may it exceed ten years from the date of grant) and the period of time, if any, after retirement, death, disability or other termination of employment during which options may be exercised.

        Stock appreciation rights may be granted under our stock incentive plan. Stock appreciation rights allow the participant to receive the appreciation in the fair market value of our Class A common stock between the exercise date and the date of grant in the form of shares of our Class A common stock. The exercise price of stock appreciation rights awarded under our stock incentive plan may not be less than 100% of the fair market value of our Class A common stock on the date of grant. The compensation committee determines the terms of stock appreciation rights, including when such rights become exercisable and the period of time, if any, after retirement, death, disability or other termination of employment during which stock appreciation rights may be granted.

103



        Restricted stock and deferred stock awards may also be granted under our stock incentive plan. Restricted stock awards are shares of our Class A common stock that vest in accordance with terms and conditions established by the compensation committee. The compensation committee may impose whatever conditions to vesting it determines to be appropriate, including attainment of performance goals. Shares of restricted stock that do not satisfy the vesting conditions are subject to our right of repurchase or forfeiture. Deferred stock awards are stock units entitling the participant to receive shares of Class A common stock paid out on a deferred basis and subject to such restrictions and conditions as the compensation committee shall determine. The compensation committee may impose whatever conditions to vesting it determines to be appropriate, including attainment of performance goals. Deferred stock awards that do not satisfy the vesting conditions are subject to forfeiture.

        Dividend equivalent rights may also be granted under our stock incentive plan. These rights entitle the participant to receive credits for dividends that would be paid if the participant had held specified shares of our Class A common stock. Dividend equivalent rights may be granted as a component of another award or as a freestanding award.

        Other stock-based awards under our stock incentive plan will include awards that are valued in whole or in part by reference to shares of our Class A common stock, including convertible preferred stock, convertible debentures and other convertible or exchangeable securities, membership units in a subsidiary or D&P Acquisitions, awards valued by reference to book value, fair value or performance of a subsidiary, and any class of profits interest or limited liability company membership units. We may make certain awards in the form of long-term incentive units, or "LTIP units." LTIP units will be issued pursuant to a separate series of units in D&P Acquisitions. LTIP units, which can be granted either as free-standing awards or in tandem with other awards under our stock incentive plan, will be valued by reference to the value of our Class A common stock, and will be subject to such conditions and restrictions as the compensation committee may determine, including continued employment or service, computation of financial metrics and/or achievement of pre-established performance goals and objectives. If applicable conditions and/or restrictions are not attained, participants would forfeit their LTIP units. LTIP unit awards, whether vested or unvested, may entitle the participant to receive, currently or on a deferred or contingent basis, dividends or dividend equivalent payments with respect to the number of shares of our Class A common stock underlying the LTIP unit award or other distributions from D&P Acquisitions, and the compensation committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional shares of our Class A common stock or LTIP units.

        LTIP units may be structured as "profits interests" for federal income tax purposes, in which case we would not expect the grant, vesting or conversion of LTIP units to produce a tax deduction for us. As profits interests, LTIP units initially would not have full parity, on a per unit basis, with D&P Acquisitions' common units with respect to liquidating distributions. Upon the occurrence of specified events, LTIP units can over time achieve full parity with common units and therefore accrete to an economic value for the participant equivalent to common units. If such parity is achieved, LTIP units may be exchanged with D&P Acquisitions, subject to the satisfaction of applicable vesting and other conditions, on a one-for-one basis into common units, which in turn could be exchangeable by the holder with D&P Acquisitions for shares of our Class A common stock on a one-for-one basis or for the cash value of such shares, at our election. However, there are circumstances under which LTIP units will not achieve parity with common units, and until such parity is reached, the value that a participant could realize for a given number of LTIP units will be less than the value of an equal number of shares of our common stock and may be zero. Ordinarily, we anticipate that each LTIP unit awarded will be equivalent to an award of one share of Class A common stock reserved under our stock incentive plan, thereby reducing the number of shares of Class A common stock available for other equity awards on a one-for-one basis. However, the compensation committee has the authority under the plan to determine the number of shares of Class A common stock underlying an award of

104



LTIP units in light of all applicable circumstances, including performance-based vesting conditions, D&P Acquisitions "capital account allocations," to the extent set forth in the LLC Agreement, the Code or Treasury Regulations, value accretion factors and conversion ratios.

        Unless the compensation committee provides otherwise, our stock incentive plan does not generally allow for the transfer of awards, and only the participant may exercise an award during his or her lifetime. In the event of a change-in-control of the company, our board of directors and the board of directors of the surviving or acquiring entity shall, as to outstanding awards under our stock incentive plan, make appropriate provision for the continuation or assumption of such awards and may provide for the acceleration of vesting with respect to existing awards.

        The terms of the stock incentive plan provide that we may amend, suspend or terminate the stock incentive plan at any time, but stockholder approval of any such action will be obtained if required to comply with applicable law. Further, no action may be taken that adversely affects any rights under outstanding awards without the holder's consent. The stock incentive plan will terminate on the tenth anniversary of the date on which stockholder approval was received.

        We intend to file with the SEC a registration statement on Form S-8 covering the shares of our Class A common stock issuable under the stock incentive plan.

Minimum Retained Ownership Requirements

        While employed by us, each of our executive officers will be required to continue to hold, either in the form of our Class A common stock, New Class A Units or other equity instruments granted pursuant to the 2007 Omnibus Stock Incentive Plan, at least 25% of the New Class A Units held by him or her immediately following the Reorganization and Offering and the Shinsei Investment, and each of our other professionals who hold New Class A Units will be required to continue to hold at least 20% of such New Class A Units. See "Related Party Transactions—Exchange Agreement."

105



RELATED PARTY TRANSACTIONS

Redemption of Certain D&P Acquisitions New Class A Units

        Immediately following this offering, we will use a portion of the net proceeds from this offering and the Shinsei Investment to redeem approximately $137.9 million of New Class A Units held by the existing unitholders of D&P Acquisitions, at a redemption price per New Class A Unit equal to the public offering price per share of our Class A common stock in this offering. Of this amount, we expect that approximately $55.7 million will be paid to Vestar and its affiliates and approximately $33.5 million will be paid to Lovell Minnick and its affiliates. In addition, we expect that an aggregate amount of approximately $19.9 million (or $28.6 million if the underwriters exercise in full their over-allotment option to purchase additional shares) will be paid to our professionals, of which amount approximately $3.9 million (or $5.5 million if the underwriters exercise in full their over-allotment option to purchase additional shares) to Mr. Gottdiener, approximately $1.2 million (or $1.7 million if the underwriters exercise in full their over-allotment option to purchase additional shares) to Mr. Creagh, approximately $0.8 million (or $1.1 million if the underwriters exercise in full their over-allotment option to purchase additional shares) to Mr. Silverman, approximately $0.2 million, which includes redemption of unvested New Class A Units (or $0.3 million if the underwriters exercise in full their over-allotment option to purchase additional shares, which includes redemption of unvested New Class A Units) to Mr. Marschke, approximately $0.1 million (or $0.2 million if the underwriters exercise in full their over-allotment option to purchase additional shares, which includes redemption of unvested New Class A Units) to Mr. Forman and approximately $0.2 million to Mr. Krueger. Upon the completion of this offering, after giving effect to the use of proceeds, there will be approximately 22,121,965 New Class A Units oustanding. See "Use of Proceeds" and "Our Structure."

Tax Receivable Agreement

        On the date of this offering, we will be treated for U.S. federal income tax purposes as having directly purchased membership interests in D&P Acquisitions from the existing unitholders. In the future, additional New Class A Units may be exchanged (as described in "Related Party Transactions—Tax Receivable Agreement") for shares of our Class A common stock. As a result of both this initial purchase and these additional exchanges of units (each being referred to as an "Exchange"), we will become entitled to a proportionate share of D&P Acquisitions' existing tax basis for its tangible and intangible assets. Further, D&P Acquisitions intends to make an election under Section 754 of the Code effective for each taxable year in which an Exchange occurs, which will generally result in an adjustment to D&P Acquisitions' tax basis reflected in that proportionate share. Both that proportionate share and the adjustments to tax basis under Section 754 of the Code may reduce the amount of tax that we would otherwise be required to pay in the future.

        We intend to enter into a tax receivable agreement with the existing unitholders of D&P Acquisitions that will provide for the payment by us to them of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize as a result of (i) D&P Acquisitions' tax basis in its goodwill and similar intangible assets on the date of this offering, including any portion of that tax basis arising from its liabilities on the date of this offering, and (ii) the Section 754 adjustments referred to above.

        For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing our income tax liability, calculated pursuant to the assumptions therein, to the amount of such taxes that we would have been required to pay had there been no such tax basis adjustments and no such initial basis in goodwill or similar intangibles. We expect to benefit from the remaining 15% of cash savings, if any, not paid pursuant to the tax receivable agreement. The term of the tax receivable agreement will commence upon consummation of this offering and will continue until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the tax receivable

106



agreement for an amount based on an agreed value of payments remaining to be made under the agreement.

        Were the IRS to successfully challenge a tax basis adjustment, or other deductions or adjustments to taxable income of D&P Acquisitions, the existing unitholders of D&P Acquisitions will not reimburse us for any payments that may previously have been made under the tax receivable agreement. In certain circumstances we could make payments to the existing unitholders of D&P Acquisitions under the tax receivable agreement in excess of our cash tax savings. While the actual amount of the adjusted tax basis, as well as the amount and timing of any payments under this agreement will vary depending upon a number of factors, including the basis of our proportionate share of D&P Acquisitions' assets on the dates of Exchanges, the timing of Exchanges, the extent to which Exchanges are taxable, the deductions and other adjustments to taxable income to which D&P Acquisitions is entitled, the amount of liabilities of D&P Acquisitions in existence on the date of this offering, and the amount and timing of our income, we expect that during the anticipated term of the tax receivable agreement, the payments that we may make to the existing unitholders of D&P Acquisitions could be substantial. Payments under the tax receivable agreement will give rise to additional tax benefits and therefore to additional potential payments under the tax receivable agreement. In addition, the tax receivable agreement will provide for interest accrued from the due date (without extensions) of the corresponding tax return to the date of payment under the agreement.

Exchange Agreement

        In connection with the closing of this offering, the existing unitholders of D&P Acquisitions will enter into the Exchange Agreement with D&P Acquisitions under which, from time to time, typically once a quarter, they (or certain transferees thereof) will have the right to exchange their New Class A Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The Exchange Agreement generally provides that (i) certain of our existing unitholders, including Vestar and Lovell Minnick, may elect to exchange with D&P Acquisitions 100% of their New Class A Units into shares of our Class A common stock after the 180-day lock-up period following the closing of this offering (unless extended as provided in the exchange agreement); (ii) unitholders who are our executive officers may elect to exchange with D&P Acquisitions up to 20% of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, 40% of such New Class A Units after the second anniversary of this offering, 60% of such New Class A Units after the third anniversary of this offering, and 100% of such New Class A Units after the fourth anniversary of this offering, subject to the notice requirement and minimum retained ownership requirements applicable to such executives; and (iii) unitholders who are not our executive officers may elect to exchange with D&P Acquisitions up to one-third of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, two-thirds of such New Class A Units after the second anniversary of this offering, and 100% of such New Class A Units after the third anniversary of this offering, subject to the notice requirement and minimum retained ownership requirements applicable to such unitholders. See "Management—Minimum Retained Ownership Requirements." As the existing unitholders of D&P Acquisitions exchange their New Class A Units with D&P Acquisitions, our membership interests in D&P Acquisitions will be correspondingly increased and their corresponding shares of Class B common stock will be cancelled.

Registration Rights Agreement

        Effective upon consummation of this offering, we will enter into a registration rights agreement pursuant to which we may be required to register the sale of shares of our Class A common stock held by the existing unitholders of D&P Acquisitions upon exchange of New Class A Units held by them and the Class A common stock held by Shinsei. Under the registration rights agreement, the existing

107



unitholders of D&P Acquisitions and Shinsei have the right to request us to register the sale of their shares and may require us to make available shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition, the existing unitholders of D&P Acquisitions and Shinsei will have the ability to exercise certain piggyback registration rights in connection with registered offerings requested by any of such holders or initiated by us.

Third Amended and Restated Limited Liability Company Agreement of D&P Acquisitions

        As a result of the Reorganization and Offering, Duff & Phelps Corporation will, through D&P Acquisitions and its subsidiaries and affiliates, operate our business. The form of the third amended and restated limited liability company agreement of D&P Acquisitions, or the LLC Agreement, is filed as an exhibit to the registration statement of which this prospectus forms a part, and the following description of the LLC Agreement is qualified by reference thereto.

        As the sole managing member of D&P Acquisitions, we will have control over all of the affairs and decision making of D&P Acquisitions. As such, we, through our officers and directors, will be responsible for all operational and administrative decisions of D&P Acquisitions and the day-to-day management of D&P Acquisitions' business.

        In accordance with the LLC Agreement, net profits and net losses of D&P Acquisitions will be allocated to its members pro rata in accordance with the respective percentages of their New Class A Units. Accordingly, net profits and net losses of D&P Acquisitions will initially be allocated, approximately 34.5% to us and approximately 65.5% to the existing unitholders of D&P Acquisitions.

        The holders of New Class A Units, including us, will generally incur U.S. federal, state and local income taxes on their proportionate share of any net taxable income of D&P Acquisitions. Net profits and net losses of D&P Acquisitions will generally be allocated to its members pro rata in accordance with the percentages of their respective New Class A Units, though certain non pro rata adjustments will be made to reflect tax depreciation, amortization and other allocations. The LLC Agreement will provide for cash distributions to its members if the taxable income of D&P Acquisitions will give rise to taxable income for its members. In accordance with the LLC Agreement, D&P Acquisitions will make cash distributions to the holders of its New Class A Units for purposes of funding their tax obligations in respect of the income of D&P Acquisitions that is allocated to them. Generally, these tax distributions will be computed based on our estimate of the net taxable income of D&P Acquisitions allocable to such holder of New Class A Units multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the nondeductibility of certain expenses and the character of our income).

        The LLC Agreement will provide that at any time we issue a share of our Class A common stock other than pursuant to a stock incentive plan, the net proceeds received by us with respect to such share, if any, shall be concurrently transferred to D&P Acquisitions and the D&P Acquisitions shall issue to us one New Class A Unit. Conversely, if at any time, any shares of our Class A common stock are redeemed by us for cash, D&P Acquisitions shall, immediately prior to such redemption of our Class A common stock, redeem an equal number of New Class A Units held by us, upon the same terms and for the same price, as the shares of our Class A common stock are redeemed.

Shinsei Investment

        On September 1, 2007, we entered into a stock purchase agreement with Shinsei pursuant to which we issued to Shinsei 3,375,000 shares of our Class A common stock for approximately $54.2 million, or at a purchase price equal to $16.07 per share, representing 97.4% of the low-end of the pricing range set forth on the cover page of this prospectus. Upon consummation of this offering, Shinsei's equity interest in Duff & Phelps Corporation will be equal to approximately 10% of the equity capital of the

108



Company on a fully diluted basis. The proceeds from the Shinsei Investment and the Class A common stock issued to Shinsei will be held in escrow until consummation of this offering. If this offering is not consummated by October 31, 2007, half of Shinsei's investment will be returned to Shinsei and, instead of issuing Class A common stock to Shinsei, D&P Acquisitions will issue a note to Shinsei in the aggregate principal amount of approximately $27.1 million that is, upon certain conditions, convertible into units of D&P Acquisitions.

        Any shares of Class A common stock owned by Shinsei will be subject to restrictions on transfer until September 5, 2009. Shinsei may sell up to 50% of its Class A common stock on or after September 5, 2008, 75% of its Class A common stock on or after March 5, 2009 and 100% of its Class A common stock on or after September 5, 2009. In addition, Shinsei will be restricted from purchasing any additional Class A common stock until March 5, 2009. In connection with this investment, we granted Shinsei registration rights.

        Upon consummation of the sale of Class A common stock to Shinsei, we entered into a stockholders agreement with Shinsei. The stockholders agreement provides Shinsei with the right to designate a non-voting observer to attend our board of director's meetings. In addition, we will enter into a registration rights agreement with Shinsei upon the consummation of this offering pursuant to which we may be required to register the sale of shares of our Class A common stock held by Shinsei.

        In connection with the Shinsei Investment, Lehman Brothers is providing investment advice to us. One of our independent directors, Harvey Krueger, is Vice Chairman Emeritus of Lehman Brothers. We estimate that we will pay Lehman Brothers approximately $1.6 million in fees in connection with the Shinsei Investment.

Other Related Party Transactions

        In 2005, D&P Acquisitions paid Vestar and Lovell Minnick $1.0 million and $0.5 million, respectively, for services rendered in connection with securing, structuring and negotiating the equity and debt financing associated with the CVC acquisition. In addition, pursuant to certain agreements, D&P Acquisitions paid professional services fees to Vestar and Duff & Phelps Holdings, LLC, totaling $0.2 million in the first quarter of 2007, $0.9 million in fiscal 2006 and $0.2 million in fiscal 2005. Following the consummation of this offering, we will no longer pay these professional services fees.

Statement Regarding Transactions with Related Parties

        Upon the completion of this offering, we will adopt a Statement of Policy Regarding Transactions with Related Parties that will require that a Related Party (defined as any person described in paragraph (a) of Item 404 of Regulation S-K) to promptly disclose to our general counsel any Related Party transaction in which we are to be a participant and the amount involved exceeds $120,000 and in which such Related Party had or will have a direct or indirect material interest and all material facts with respect thereto. The general counsel will then communicate that information to the board of directors. No Related Party transaction will be consummated without the approval of the nominating and corporate governance committee. However, it will be our policy that directors interested in a Related Party transaction will recuse themselves from any vote of a Related Party transaction in which they have an interest.

109



PRINCIPAL SHAREHOLDERS

        The following table sets forth information regarding the beneficial ownership of our Class A common stock and New Class A Units, for:

    each beneficial owner of more than 5% of any class of our outstanding shares;

    each of our named executive officers;

    each of our directors; and

    all of our executive officers and directors as a group.

        The number of New Class A Units outstanding and percentage of beneficial ownership before this offering set forth below is based on the number of New Class A Units outstanding immediately prior to the consummation of this offering after giving effect to the Recapitalization Transactions. The number of shares of our Class A common stock and percentage of beneficial ownership after this offering set forth below is based on the shares of our Class A common stock outstanding after this offering, assuming that all the vested and unvested New Class A Units outstanding after giving effect to the Reorganization and Offering and the Shinsei Investment, except those held by Duff & Phelps Corporation, are exchanged into shares of our Class A common stock.

        Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The table set forth below reflects the inclusion of both vested and unvested New Class A Units. Messrs. Gottdiener, Creagh, Silverman, Marschke, Forman and Krueger hold 1,640,015 unvested New Class A Units, and the associated shares of our Class B common stock, in the aggregate, after giving effect to the Recapitalization Transactions but before the Redemption and this offering. Except as otherwise indicated, the address for each of our principal shareholders is c/o Duff & Phelps Corporation, 55 East 52nd Street, New York, New York 10055.

 
   
   
   
   
  Class A common stock owned after giving effect to the Reorganization and Offering and the Shinsei Investment, assuming exercise in full of the over-allotment option
 
 
  New Class A Units owned after giving effect to the Recapitalization Transactions and before the Offering and the Shinsei Investment
  Class A common stock owned after giving effect to the Reorganization and Offering and the Shinsei Investment
 
Name and Address of Beneficial Owner

 
  Number
  %
  Number
  %
  Number
  %
 
Noah Gottdiener(1)   1,906,873   6.4 % 1,683,958   5.0 % 1,591,254   4.6 %
Gerard Creagh(2)   629,411   2.1 % 561,569   1.7 % 531,220   1.5 %
Jacob Silverman   401,089   1.3 % 356,427   1.1 % 336,625   1.0 %
Brett Marschke   113,554   *   102,198   *   96,521   *  
Edward Forman   58,149   *   52,334   *   49,427   *  
Robert Belke(3)(4)   7,549,906   25.2 % 5,635,621   16.7 % 5,635,621   16.3 %
Peter Calamari(5)(6)   9,983,355   33.3 % 6,803,355   20.1 % 6,803,355   19.7 %
Harvey Krueger   67,847   *   57,139   *   54,642   *  
Sander Levy(5)(7)   9,983,355   33.3 % 6,803,355   20.1 % 6,803,355   19.7 %
Jeffrey Lovell(3)(8)   7,549,906   25.2 % 5,635,621   16.7 % 5,635,621   16.3 %
All executive officers and directors as a group (10 persons)   20,710,184   69.0 % 15,252,601   45.1 % 15,098,665   43.7 %
Entities affiliated with Vestar(5)   9,983,355   33.3 % 6,803,355   20.1 % 6,803,355   19.7 %
Entities affiliated with Lovell Minnick(3)   7,549,906   25.2 % 5,635,621   16.7 % 5,635,621   16.3 %
Shinsei Bank, Limited       3,375,000   10.0 % 3,375,000   9.8 %

*
Represents less than 1%.

110


(continued)


(1)
Certain New Class A Units beneficially owned by Mr. Gottdiener are held by trusts for the benefit of Mr. Gottdiener.

(2)
Certain New Class A Units beneficially owned by Mr. Creagh are held by a trust for the benefit of Mr. Creagh.

(3)
Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC. The address of Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC is 2141 Rosencrans Avenue, Suite 5150 El Segundo, CA 90245. Each of Robert Belke and Jeffrey Lovell disclaim beneficial ownership of such shares and any other shares held by affiliates of Lovell Minnick Partners LLC.

(4)
As an officer of Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC, Mr. Belke may be deemed to share beneficial ownership of the shares held respectively by Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC. Mr. Belke disclaims beneficial ownership of such shares and any other shares held by affiliates of Lovell Minnick Partners LLC.

(5)
Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC. The address of Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC is 245 Park Avenue, 41st Floor, New York, NY 10167. Each of Peter Calamari and Sander Levy disclaim beneficial ownership of such shares and any other shares held by affiliates of Vestar Capital Partners. Excludes 22,424 New Class A Units held by each of Messrs. Gottdiener and Creagh and 17,911 New Class A Units held by Mr. Krueger through Vestar/D&P Holdings, LLC.

(6)
As an officer of Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC, Mr. Calamari may be deemed to share beneficial ownership of the shares held respectively by Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC. Mr. Calamari disclaims beneficial ownership of such shares and any other shares held by affiliates of Vestar Capital Partners.

(7)
As an officer of Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC, Mr. Levy may be deemed to share beneficial ownership of the shares held respectively by Vestar Capital Partners IV, L.P. and Vestar/D&P Holdings, LLC. Mr Levy disclaims beneficial ownership of such shares and any other shares held by affiliates of Vestar Capital Partners.

(8)
As an officer of Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC, Mr. Lovell may be deemed to share beneficial ownership of the shares held respectively by Lovell Minnick Equity Partners LP and LM Duff Holdings, LLC. Mr. Lovell disclaims beneficial ownership of such shares and any other shares held by affiliates of Lovell Minnick Partners LLC.

111



DESCRIPTION OF CAPITAL STOCK

        The following description of our capital stock is a summary and is qualified in its entirety by reference to our certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part, and by applicable law.

        Our authorized capital stock consists of 100,000,000 shares of Class A common stock, par value $.01 per share, 50,000,000 shares of Class B common stock, par value $.0001 per share and 50,000,000 shares of preferred stock. Unless our board of directors determines otherwise, we will issue all shares of our capital stock in uncertificated form.

Common Stock

    Class A common stock

        Holders of our Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

        Holders of our Class A common stock are entitled to receive dividends when and if declared by our board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

        In the event of our merger or consolidation with or into another entity in connection with which shares of our Class A common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of shares of our Class A common stock will thereafter be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash). Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our Class A common stock will be entitled to receive pro rata our remaining assets available for distribution.

        Holders of our Class A common stock do not have preemptive, subscription, redemption or conversion rights.

        Subject to the transfer restrictions set forth in the LLC Agreement of D&P Acquisitions, holders of fully vested New Class A Units (other than Duff & Phelps Corporation) may exchange these New Class A Units with D&P Acquisitions for shares of Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.

    Class B common stock

        Holders of our Class B common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

        Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of Class B common stock and Class A common stock present in person or represented by proxy, voting together as a single class. Except as otherwise provided by law, amendments to the amended and restated certificate of incorporation must be approved by a majority of the combined voting power of all shares of Class B common stock and Class A common stock, voting together as a single class. However, amendments to the certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B common stock so as to affect them adversely also must be approved by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class. Notwithstanding the foregoing, any amendment to our amended and restated certificate of incorporation to increase or decrease the authorized shares of any class of common stock

112



shall be approved upon the affirmative vote of the holders of a majority of the shares of Class B common stock and Class A common stock, voting together as a single class.

        Holders of our Class B common stock will not have any right to receive dividends (other than dividends consisting of shares of our Class B common stock paid proportionally with respect to each outstanding share of our Class B common stock) or to receive a distribution upon a liquidation or winding up of Duff & Phelps Corporation.

        No shares of either class of common stock will be subject to redemption or will have preemptive rights to purchase additional shares of either class of common stock. Upon consummation of this offering, all the outstanding shares of Class B common stock will be legally issued, fully paid and nonassessable.

    Preferred Stock

        Our certificate of incorporation authorizes our board of directors to establish one or more series of preferred stock (including convertible preferred stock). Unless required by law or by any stock exchange, the authorized shares of preferred stock will be available for issuance without further action by you. Our board of directors is able to determine, with respect to any series of preferred stock, the terms and rights of that series, including:

    the designation of the series;

    the number of shares of the series, which our board may, except where otherwise provided in the preferred stock designation, increase or decrease, but not below the number of shares then outstanding;

    whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;

    the dates at which dividends, if any, will be payable;

    the redemption rights and price or prices, if any, for shares of the series;

    the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;

    the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of our company;

    whether the shares of the series will be convertible into shares of any other class or series, or any other security, of our company or any other entity, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates at which the shares will be convertible and all other terms and conditions upon which the conversion may be made;

    restrictions on the issuance of shares of the same series or of any other class or series; and

    the voting rights, if any, of the holders of the series.

        We could issue a series of preferred stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of you might believe to be in your best interests or in which you might receive a premium for your Class A common stock over the market price of the Class A common stock.

113


    Authorized but Unissued Capital Stock

        Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the New York Stock Exchange, which would apply so long as the Class A common stock remains listed on the New York Stock Exchange, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Class A common stock. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

        One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.

    Anti-Takeover Effects of Provisions of Delaware Law

        We are a Delaware corporation subject to Section 203 of the Delaware General Corporation Law. Section 203 provides that, subject to certain exceptions specified in the law, a Delaware corporation shall not engage in certain "business combinations" with any "interested stockholder" for a three-year period after the date of the transaction in which the person became an interested stockholder unless:

    prior to such time, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

    upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

    at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least 662/3% of the outstanding voting stock that is not owned by the interested stockholder.

        Generally, a "business combination" includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is a person who, together with that person's affiliates and associates, owns, or within the previous three years did own, 15% or more of our voting stock.

        Under certain circumstances, Section 203 makes it more difficult for a person who would be an "interested stockholder" to effect various business combinations with a corporation for a three-year period. The provisions of Section 203 may encourage companies interested in acquiring our company to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our board of directors approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These provisions also may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

    Corporate Opportunities and Transactions with Lovell Minnick and Vestar

        In recognition that directors, officers, stockholders, members, managers and/or employees of Lovell Minnick and Vestar and their respective affiliates may serve as our directors and/or officers, and that Lovell Minnick and Vestar may acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or clients of ours, our amended and restated certificate of incorporation provides for the allocation of certain corporate opportunities between us on the one

114


hand, and Lovell Minnick and Vestar, on the other hand. As set forth in our amended and restated certificate of incorporation, neither Lovell Minnick nor Vestar, nor any director, officer, stockholder, member, manager or employee of Lovell Minnick or Vestar has any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. In the event that Lovell Minnick or Vestar acquire knowledge of a potential transaction or matter which may be a corporate opportunity for itself and us, we will not have any expectancy in such corporate opportunity and Lovell Minnick and Vestar will not have any duty to communicate or offer such corporate opportunity to us and may pursue or acquire such corporate opportunity for themselves or direct such opportunity to another person. In addition, if a director or officer of our company who is also a director, officer, member, manager or employee of Lovell Minnick or Vestar acquires knowledge of a potential transaction or matter which may be a corporate opportunity for us and Lovell Minnick and/or Vestar, we will not have any expectancy in such corporate opportunity unless such corporate opportunity is offered to such person in his or her capacity as a director or officer of our company.

        The above provision shall automatically, without any need for any action by us, be terminated and void at such time as Lovell Minnick and Vestar, whose ownership interests shall be counted together as a group, beneficially own less than 20% of us.

Listing

        Our Class A common stock has been approved for listing on the New York Stock Exchange under the symbol "DUF."

Transfer Agent and Registrar

        The transfer agent and registrar for our Class A common stock is American Stock Transfer & Trust Company.

115



DESCRIPTION OF INDEBTEDNESS

Senior Secured Credit Facility

        Duff & Phelps, LLC, one of our affiliates, entered into a senior secured credit facility, dated as of September 30, 2005, as amended on June 14, 2006, October 31, 2006 and August 31, 2007, with a syndicate of financial institutions, including General Electric Capital Corporation as administrative agent. The credit facility provides for an $80.0 million term loan facility that matures on October 1, 2012 and a revolving credit facility with a $20.0 million aggregate loan commitment amount available, including a $5.0 million sub-facility for letters of credit and a $5.0 million swingline facility, that matures on October 1, 2011.

        All obligations under the credit facility are unconditionally guaranteed by each of our existing and future subsidiaries, other than certain foreign and regulated subsidiaries. The credit facility and the related guarantees are secured by substantially all of Duff & Phelps, LLC's present and future assets and all present and future assets of each guarantor on a first lien basis.

        As of June 30, 2007, $79.0 million was outstanding under the term loan facility (before debt discount) and no amount was outstanding under the revolving credit facility. In general, borrowings under the credit facility bear interest, at our option, at either the Base Rate (as defined in the credit agreement) plus a margin of 1.75%, or a rate based on LIBOR plus a margin of 2.75%. We incur an annual commitment fee of 0.5% of the unused portion of the revolving credit facility and 1.0% on the unused portion of the term loan facility.

        No principal payments are due on the revolving credit facility until the applicable maturity date. Commencing on January 1, 2007 and ending on July 1, 2012, on the first date of each quarter, we are required to repay borrowings under the term loan facility in an amount equal to 0.25% of the outstanding balance as of October 31, 2006, with the remaining balance to be repaid on the applicable maturity date.

        The credit facility contains the following financial covenants that generally require Duff & Phelps, LLC to maintain certain financial ratios, at the end of each fiscal quarter: (a) maximum ratio of senior debt to EBITDA (as defined in the credit facility) as of the last day of such fiscal quarter of not more than (i) 3.50 to 1.00 for each fiscal quarter ending on or prior to June 30, 2007, (ii) 3.25 to 1.00 for each fiscal quarter ending after July 1, 2007 and on or prior to June 30, 2008, and (iii) 3.00 to 1.00 for each fiscal quarter ending after July 1, 2008; (b) minimum ratio of EBITDA to interest expense for the twelve-month period then ended of not less than (i) 3.50 to 1.00 for each fiscal quarter ending on or prior to June 30, 2007, (ii) 3.75 to 1.00 for each fiscal quarter ending after July 1, 2007 and on or prior to June 30, 2008, and (iii) 4.00 to 1.00 for each fiscal quarter ending after July 1, 2008. In addition, the credit facility requires Duff & Phelps, LLC not to incur capital expenditures (as defined in the credit facility) in excess of $6.0 million in fiscal year 2007 and any fiscal year thereafter, provided that up to $2.0 million of capital expenditures permitted but not made during any fiscal year may be carried forward into the immediately following fiscal year. The credit facility requires a mandatory prepayment in an amount equal to half of the Excess Cash Flow (as defined in the credit agreement) for fiscal year 2006 and each fiscal year thereafter if it is positive. Excess Cash Flow was negative for fiscal year 2006.

        The credit facility also contains affirmative and negative covenants customarily found in loan agreements for similar transactions, including restrictions on our ability to incur indebtedness, create liens on assets, engage in mergers or consolidations, change the nature of our business, dispose of assets, make certain investments, engage in transactions with affiliates, enter into negative pledges or pay dividends or make other restricted payments, and modify our constituent documents if the modification materially adversely affect the interests of the lenders.

116


        The credit facility contains customary events of default, including defaults based on a failure to pay principal, reimbursement obligations, interest, fees or other obligations, subject to specified grace periods; a material inaccuracy of representations and warranties; breach of covenants; failure to pay other indebtedness and cross-defaults; a Change of Control (as defined in the credit facility); events of bankruptcy and insolvency; material judgments; and impairment of collateral. Upon the occurrence of an event of default, the lenders have the ability to accelerate all amounts then outstanding under the credit facility.

117



SHARES ELIGIBLE FOR FUTURE SALE

        Prior to this offering, there has been no public market for our Class A common stock. No prediction can be made as to the effect, if any, future sales of shares, or the availability for future sales of shares, will have on the market price of our Class A common stock prevailing from time to time. The sale of substantial amounts of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our Class A common stock.

        Upon consummation of this offering and the Shinsei Investment, we will have outstanding 11,675,000 shares of Class A common stock (or a maximum of 12,920,000 Class A common stock if the underwriters exercise their over-allotment option to purchase additional shares). The shares of Class A common stock sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any Class A common stock held by our "affiliates," as defined in Rule 144, which would be subject to the limitations and restrictions described below.

        In addition, pursuant to the stockholders' agreement with Shinsei dated September 5, 2007, any shares of Class A common stock owned by Shinsei will be subject to restrictions on transfer until September 5, 2009. Shinsei may sell up to 50% of its Class A common stock on or after September 5, 2008, 75% of its Class A common stock on or after March 5, 2009 and 100% of its Class A common stock on or after September 5, 2009. In addition, Shinsei will be restricted from purchasing any additional Class A common stock until March 5, 2009. In connection with this investment, we granted Shinsei registration rights.

        In addition, pursuant to the terms of the exchange agreement, the existing unitholders of D&P Acquisitions could from time to time, typically once a quarter, exchange with D&P Acquisitions their New Class A Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The exchange agreement generally provides that (i) certain of our existing unitholders, including Vestar and Lovell Minnick, may elect to exchange with D&P Acquisitions 100% of their New Class A Units into shares of our Class A common stock after the 180-day lock-up period following this offering; (ii) unitholders who are our executive officers may elect to exchange with D&P Acquisitions up to 20% of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, 40% of such New Class A Units after the second anniversary of this offering, 60% of such New Class A Units after the third anniversary of this offering, and 100% of such New Class A Units after the fourth anniversary of this offering, subject to the notice requirements and the minimum retained ownership requirements applicable to such executives; and (iii) unitholders who are not our executive officers may elect to exchange with D&P Acquisitions up to one-third of their New Class A Units into shares of our Class A common stock after the first anniversary of this offering, two-thirds of such New Class A Units after the second anniversary of this offering, and 100% of such New Class A Units after the third anniversary of this offering, subject to the notice requirements and the minimum retained ownership requirements applicable to such unitholders. See "Related Party Transactions—Exchange Agreement." As a result of the Reorganization and Offering and the Shinsei Investment, immediately following this offering and the application of net proceeds from this offering and the Shinsei Investment as described herein, the existing unitholders of D&P Acquisitions will beneficially own 65.5% New Class A Units, all of which will be exchangeable with D&P Acquisitions for shares of our Class A common stock. These shares of Class A common stock would be "restricted securities," as defined in Rule 144. However, effective upon consummation of this offering, we will enter into a registration rights agreement with the existing unitholders of D&P Acquisitions that would require us to register under the Securities Act these shares of Class A common stock. See "—Registration Rights Agreement" and "Related Party Transactions—Registration Rights Agreement."

        Under the terms of the LLC Agreement of D&P Acquisitions, all of the New Class A Units received by the existing unitholders of D&P Acquisitions in the Recapitalization Transactions will be subject to restrictions on disposition, and 6,963,591 of the New Class A Units received by our

118



professionals, independent directors and consultants in the Recapitalization Transactions will be subject to forfeiture if the individual ceases to be employed by us prior to the occurrence of specified vesting events. See "Our Structure—Recapitalization Transactions." Additionally, consistent with the terms of the underlying unit grant agreements executed at the time of original grant, New Class A Units that are issued in the Recapitalization Transactions in exchange for Class C and Class D Units of D&P Acquisitions will vest 25% per year from the date of original grant and New Class A Units that are issued in the Recapitalization Transactions in exchange for Class E and Class G Units of D&P Acquisitions will generally vest 20% per year from the date of original grant. New Class A Units that are issued in the Recapitalization Transactions in exchange for Class F Units of D&P Acquisitions will generally continue to vest 100% on the fifth anniversary of the date of original grant. Generally, vesting will accelerate upon the sale of the Company or other specified liquidity events.

        We intend to file one or more registration statements on Form S-8 under the Securities Act to register Class A common stock issued or reserved for issuance under our stock incentive plan. Any such Form S-8 registration statement will automatically become effective upon filing. Accordingly, shares registered under such registration statement will be available for sale in the open market, unless such shares are subject to vesting restrictions with us or the lock-up restrictions described below.

Registration Rights Agreement

        Effective upon consummation of this offering, we will enter into a registration rights agreement with the existing unitholders of D&P Acquisitions and Shinsei pursuant to which we will grant them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of our Class A common stock (and other securities convertible into or exchangeable or exercisable for shares of our Class A common stock) held or acquired by them. Such securities registered under any registration statement will be available for sale in the open market unless restrictions apply.

Lock-Up of our Class A common stock

        We and substantially all of the existing unitholders of D&P Acquisitions have agreed with the underwriters, subject to certain exceptions described below, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of our Class A common stock, or any options or warrants to purchase any shares of our Class A common stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of our Class A common stock, including any New Class A Units, or any such substantially similar securities, whether owned directly by such member (including holding as a custodian) or with respect to which such member has beneficial ownership within the rules and regulations of the SEC, during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman, Sachs & Co. and UBS Securities LLC. Currently, the underwriters have no intention to release the aforementioned holders of our Class A common stock from the lock-up restrictions described above.

        The 180-day restricted period described in the preceding paragraph will be automatically extended if (i) during the last 17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event relating to us occurs or (ii) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 15-day period beginning on the last day of the 180-day restricted period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

        Our lock-up agreement will provide exceptions for, among other things, the issuance by us of securities pursuant to any employee benefit plan which may (by their express provisions or pursuant to

119



any exchange offer) be or become exercisable, convertible or exchangeable for shares of our Class A common stock.

Rule 144

        In general, under Rule 144, a person (or persons whose shares are aggregated), including any person who may be deemed our affiliate, is entitled to sell within any three-month period, a number of restricted securities that does not exceed the greater of 1% of the then outstanding Class A common stock and the average weekly trading volume during the four calendar weeks preceding each such sale, provided that at least one year has elapsed since such shares were acquired from us or any affiliate of ours and certain manner of sale, notice requirements and requirements as to availability of current public information about us are satisfied. Any person who is deemed to be our affiliate must comply with the provisions of Rule 144 (other than the one-year holding period requirement) in order to sell shares of Class A common stock which are not restricted securities (such as shares acquired by affiliates either in this offering or through purchases in the open market following the completion of this offering). In addition, under Rule 144(k), a person who is not our affiliate, and who has not been our affiliate at any time during the 90 days preceding any sale, is entitled to sell such shares without regard to the foregoing limitations, provided that at least two years have elapsed since the shares were acquired from us or any affiliate of ours.

120



MATERIAL U.S. FEDERAL TAX CONSEQUENCES TO NON-U.S. STOCKHOLDERS

        The following is a general discussion of the material U.S. federal income and estate tax consequences of the purchase, ownership and disposition of shares of common stock by a Non-U.S. Stockholder. For purposes of this discussion, a Non-U.S. Stockholder is a beneficial owner of our Class A common stock who is treated for U.S. federal tax purposes as:

    a non-resident alien individual;

    a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized under the laws of a jurisdiction other than the U.S. or any state or political subdivision thereof;

    an estate, other than an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

    a trust, other than a trust that (i) is subject to the primary supervision of a court within the United States and which has one or more United States fiduciaries who have the authority to control all substantial decisions of the trust, or (ii) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

        For purposes of this discussion, it is important to note that the rules for determining whether an individual is a non-resident alien for income tax purposes differ from those applicable for estate tax purposes. Also, a beneficial owner who is a partner in a partnership or other flow-through entity that holds our common stock should consult its own tax advisor regarding the U.S. federal income and estate tax consequences of the purchase, ownership and disposition of our common stock.

        This summary assumes that our common stock is held as a capital asset (generally, property held for investment). The discussion does not address all of the United States federal income tax and estate tax considerations that may be relevant to a Non-U.S. Stockholder in light of its particular circumstances or to Non-U.S. Stockholders that may be subject to special treatment under United States federal tax laws. Furthermore, this summary does not discuss any aspects of state, local or non-U.S. taxation. This summary is based on current provisions of the Code, Treasury regulations, judicial opinions, published positions of the IRS and other applicable authorities, all of which are subject to change, possibly with retroactive effect. Each prospective purchaser of Class A common stock is advised to consult its tax advisor with respect to the U.S. federal, state, local or non-U.S. tax consequences of acquiring, holding and disposing of our common stock.

Dividends

        Although we do not expect to pay any dividends in the foreseeable future, any dividend paid to a Non-U.S. Stockholder with respect to our Class A common stock generally will be subject to withholding tax at a 30% rate (or such lower rate specified by an applicable income tax treaty). Generally, a Non-U.S. Stockholder must certify as to its status, and to any right to reduced withholding under an applicable income tax treaty, on a properly completed IRS Form W-8BEN in order to obtain the benefit of such right. If, however, the Non-U.S. Stockholder provides an IRS Form W-8ECI, certifying that the dividend is effectively connected with the Non-U.S. Stockholder's conduct of a trade or business within the United States, the dividend will not be subject to withholding. Instead, such dividends are subject to U.S. federal income tax at regular rates applicable to U.S. persons generally and, for corporate holders, may also be subject to "branch profits tax."

Sale or Disposition of Common Stock

        Except as otherwise discussed below, a Non-U.S. Stockholder generally will not be subject to United States federal income tax on any gain realized upon the sale or other disposition of the

121



common stock unless (i) such gain is effectively connected with the Non-U.S. Stockholder's conduct of a United States trade or business, (ii) the Non-U.S. Stockholder is an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which such sale or disposition occurs and certain other conditions are met, (iii) the Non-U.S. Stockholder is subject to provisions applicable to certain United States expatriates, or (iv) we are or become a "United States real property holding corporation" ("USRPHC"), for U.S. federal income tax purposes. We do not believe that we are or will become a USRPHC.

Information Reporting and Backup Withholding

        Annual reporting to the IRS and to each Non-U.S. Stockholder will be required as to the amount of dividends paid to such stockholder and the amount, if any, of tax withheld with respect to such dividends. This information may also be made available to the tax authorities in the Non-U.S. Stockholder's country of residence. Dividends paid to a Non-U.S. Stockholder may be subject to withholding as described above under "Dividends," but generally are not subject to "backup withholding" if the Non-U.S. Stockholder properly certifies as to its Non-U.S. status (usually by completing an IRS Form W-8BEN, including any claim to reduced withholding under an applicable income tax treaty). Treasury regulations contain special rules for determining whether an income tax treaty benefit depends upon the residence of an entity that is a holder of our Class A common stock or upon the residence of the holders of an interest in the entity.

        The payment of the proceeds of the sale or other taxable disposition of the Class A common stock to or through the United States office of a broker is subject to information reporting. Information reporting requirements, but not backup withholding, will also generally apply to payments of the proceeds of a sale of the Class A common stock by foreign offices of United States brokers or foreign brokers with certain types of relationships to the United States unless the Non-U.S. Stockholder establishes an exemption.

        Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from payments made to a stockholder may be refunded or credited against such stockholder's United States federal income tax liability, if any, provided that the required information is furnished to the IRS.

Estate Tax

        A non-resident alien individual should note that shares of Class A common stock held by (i) such individual or (ii) an entity created by such individual and included in such individual's gross estate for U.S. federal estate tax purposes (for example, a trust funded by such individual and with respect to which the individual has retained certain interests or powers), will be, absent an applicable treaty, treated as U.S. situs property subject to U.S. federal estate tax. Accordingly, stockholders who are Non-U.S. Stockholders may be subject to U.S. federal estate tax on all or a portion of the value of the common stock owned at the time of their death. Prospective individual stockholders who are Non-U.S. persons are urged to consult their tax advisors concerning the potential U.S. federal estate tax consequences with respect to our Class A common stock.

122



UNDERWRITING

        We and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman, Sachs & Co. and UBS Securities LLC are the representatives of the underwriters.

Underwriters

  Number of Class A
common stock

Goldman, Sachs & Co.    
UBS Securities LLC    
Lehman Brothers Inc.    
William Blair & Company, L.L.C.    
Keefe, Bruyette & Woods, Inc.    
Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC    
   
  Total   8,300,000
   

        The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

        If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional 1,245,000 shares from us to cover such sales. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

        The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase 1,245,000 additional shares.

 
  No Exercise
  Full Exercise
Per Share   $     $  
Total   $     $  

        Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $          per share from the initial public offering price. If all the shares are not sold at the initial public offering price, the representatives may change the offering price and the other selling terms.

        We and substantially all of the existing unitholders of D&P Acquisitions have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their Class A common stock or securities convertible into or exchangeable for shares of Class A common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives. See "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions.

        The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or announces material news or a material event; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 15-day period following the last day of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release of the announcement of the material news or material event.

123



        At our request, certain of the underwriters have reserved up to 5% of the Class A common stock being offered by this prospectus for sale at the initial offering price to our personnel. The sales will be made by UBS Financial Services Inc., an affiliate of UBS Securities LLC, through a directed share program. We do not know whether these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. We have agreed to indemnify UBS Financial Services Inc. for the failure of participants in the directed share program to pay for and accept delivery of the shares they have agreed to purchase.

        Prior to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among us and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

        Our Class A common stock has been approved for listing on the New York Stock Exchange under the symbol "DUF." In order to meet one of the requirements for listing the Class A common stock on the NYSE, the underwriters will undertake to sell lots of 100 or more shares to a minimum of 400 beneficial holders.

        In connection with the offering, the underwriters may purchase and sell shares of Class A common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Shorts sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from us in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option granted to them. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

        The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

        Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our Class A common stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the Class A common stock. As a result, the price of our Class A common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise.

        In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an

124



offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

    to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

    to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

    to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

    in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

        For the purposes of this provision, the expression an "offer of shares to the public" in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

        Each underwriter has represented and agreed that:

    it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and

    it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

        The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

        This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under

125



Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

        Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

        The shares have not been and will not be registered under the Securities and Exchange Law of Japan (the Securities and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

        A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by one or more of the underwriters and/or selling group members participating in this offering, or by their affiliates. In those cases, prospective investors may view offering terms online and, depending upon the particular underwriter or selling group member, prospective investors may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the representatives on the same basis as other allocations.

        Other than the prospectus in electronic format, the information on any underwriter's or selling group member's web site and any information contained in any other web site maintained by an underwriter or selling group member is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter or selling group member in its capacity as underwriter or selling group member and should not be relied upon by investors.

        If you purchase shares of Class A common stock offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

        The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

        We estimate that our total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $5.8 million.

        We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

        Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the company, for which they received or will receive customary fees and expenses. In connection with the Shinsei Investment, Lehman Brothers is providing investment advice to us. We estimate that we will pay Lehman Brothers approximately $1.6 million in fees in connection with the Shinsei Investment.

126



LEGAL MATTERS

        Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, is representing Duff & Phelps in connection with this offering. Davis Polk & Wardwell, New York, New York, is acting as counsel to the underwriters.


EXPERTS

        The balance sheet of Duff & Phelps Corporation as of June 30, 2007, consolidated financial statements of Duff & Phelps Acquisitions, LLC and its subsidiaries as of December 31, 2006 and 2005, and for each of the years in the two-year period ended December 31, 2006, the consolidated financial statements of Chanin Capital Partners LLC and its subsidiaries for the ten-months ended October 31, 2006, and the financial statements of Standard & Poor's Corporate Value Consulting as of and for the nine-months ended September 30, 2005 have been included herein and in the registration statement in reliance upon the reports of KPMG LLP, independent registered public accounting firm of Duff & Phelps Corporation and Duff & Phelps Acquisitions, LLC and subsidiaries, and independent auditors' of Chanin Capital Partners LLC and subsidiaries and Standard & Poor's Corporate Value Consulting, appearing herein and elsewhere in the registration statement, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2006 and 2005 financial statements of Duff & Phelps Acquisitions, LLC and its subsidiaries refers to the adoption of Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payments, as of January 1, 2005, and Statement of Financial Accounting Standards No. 158, Employers' Accounting For Defined Benefit Pension and Other Post-retirement Plans as of December 31, 2006.

        The consolidated financial statements of Duff & Phelps, LLC for the periods from March 15, 2004 through December 31, 2004 and from January 1, 2004 through March 14, 2004 included in this prospectus have been audited by Grant Thornton LLP, independent auditors, as stated in its report appearing herein and elsewhere in the registration statement, and have been so included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing.

        The financial statements of Standard & Poor's Corporate Value Consulting as of December 31, 2004 and for the year then ended included in this prospectus have been audited by Ernst & Young LLP, and have been included in reliance upon the authority of their report as experts in accounting and auditing.

127



WHERE YOU CAN FIND MORE INFORMATION

        We have filed a registration statement, of which this prospectus is a part, on Form S-1 with the SEC relating to this offering. This prospectus does not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References in this prospectus to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contracts, agreements or documents. You may read and copy the registration statement, the related exhibits and other material we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 F Street, Room 1580, N.E., Washington, D.C. 20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request a copy of these filings, at no cost, by writing us at 55 East 52 Street, New York, New York 10055 or telephoning us at (212) 871-2000.

        Upon the effectiveness of the registration statement, we will be subject to the informational requirements of the Exchange Act and, in accordance with the Exchange Act, will file reports, proxy and information statements and other information with the SEC. Such annual, quarterly and special reports, proxy and information statements and other information can be inspected and copied at the locations set forth above. We will report our financial statements on a year ended December 31. We intend to furnish our shareholders with annual reports containing consolidated financial statements audited by our independent certified public accountants and with quarterly reports containing unaudited consolidated financial statements for each of the first three quarters of each fiscal year.

128



Index to financial statements

 
  Page
Duff & Phelps Corporation    

Independent auditors' report

 

F-2

Balance sheet as of June 30, 2007

 

F-3

Notes to balance sheet

 

F-4

Duff & Phelps Acquisitions, LLC

 

 

Condensed consolidated balance sheets as of December 31, 2006 and June 30, 2007 (unaudited)

 

F-6

Condensed consolidated statements of operations for the three and six months ended June 30, 2006 and 2007 (unaudited)

 

F-7

Condensed consolidated statements of unitholders' equity/(deficit) and comprehensive income/(loss) as of June 30, 2006 and 2007 (unaudited)

 

F-8

Condensed consolidated statements of cash flows for the six months ended June 30, 2006 and 2007 (unaudited)

 

F-10

Notes to condensed consolidated financial statements

 

F-11

Independent auditors' reports

 

F-34

Consolidated balance sheets as of December 31, 2005 and 2006

 

F-36

Consolidated statements of operations for the years ended December 31, 2005 and 2006, for the period from January 1, 2004 through March 14, 2004 and for the period from March 15, 2004 through December 31, 2004

 

F-37

Consolidated statements of unitholders' equity/(deficit) and comprehensive income/(loss) as of December 31, 2004, 2005 and 2006, and March 14, 2004

 

F-38

Consolidated statements of cash flows for the years ended December 31, 2005 and 2006, for the period from January 1, 2004 through March 14, 2004 and for the period from March 15, 2004 through December 31, 2004

 

F-40

Notes to consolidated financial statements

 

F-41

Chanin Capital Partners LLC

 

 

Independent auditors' report

 

F-72

Consolidated statement of operations of Chanin Capital Partners LLC for the ten-months ended October 31, 2006

 

F-73

Consolidated statement of cash flows of Chanin Capital Partners LLC for the ten-months ended October 31, 2006

 

F-74

Notes to consolidated financial statements

 

F-75

Standard & Poor's Corporate Value Consulting

 

 

Independent auditors' reports

 

F-80

Balance sheets of Standard & Poor's Corporate Value Consulting as of December 31, 2004 and September 30, 2005

 

F-82

Statements of operations, comprehensive income and retained earnings/(accumulated deficit) of Standard & Poor's Corporate Value Consulting for the year ended December 31, 2004 and for the period from January 1, 2005 through September 30, 2005

 

F-83

Statements of cash flows of Standard & Poor's Corporate Value Consulting for the year ended December 31, 2004 and for the period from January 1, 2005 through September 30, 2005

 

F-84

Notes to financial statements

 

F-85

F-1




Report of Independent Registered Public Accounting Firm

The Board of Directors of Duff & Phelps Corporation:

        We have audited the accompanying balance sheet of Duff & Phelps Corporation as of June 30, 2007. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, the financial statement referred to above presents fairly, in all material respects, the financial position of Duff & Phelps Corporation as of June 30, 2007 in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

New York, New York
August 27, 2007

F-2



DUFF & PHELPS CORPORATION

Balance Sheet

 
  June 30, 2007
Assets      
Other assets- deferred issuance costs   $ 26,640
   
  Total assets   $ 26,640
   
Liabilities and Stockholder's Equity      
Due to affiliates   $ 26,640
Stockholder's equity:      
Common stock- $0.01 par value, 1,000 shares authorized; zero issued and outstanding    
   
  Total liabilities and stockholder's equity   $ 26,640
   

See accompanying notes to balance sheet

F-3



DUFF & PHELPS CORPORATION
Notes to Balance Sheet
June 30, 2007

(1) Organization

        Duff & Phelps Corporation (the Company), a Delaware corporation, was incorporated on April 23, 2007 as a holding company for the purposes of facilitating an initial public offering of common equity. The Company has not engaged in any business or other activities except in connection with its formation. It is expected that following an internal reorganization of Duff & Phelps Acquisitions, LLC and the initial public offering of the Company, the Company will be the sole managing member of and have a controlling interest in Duff & Phelps Acquisitions, LLC. The Company's only business following the initial public offering of the Company will be to act as the sole managing member of Duff & Phelps