10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

(Mark One)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended June 30, 2022

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to

Commission File Number: 001-38979

BRIGHTSPHERE
Investment Group Inc.

(Exact name of registrant as specified in its charter) 

Delaware		47-1121020
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
200 Clarendon Street, 53rd Floor		02116
Boston,	Massachusetts
(Address of principal executive offices)		(Zip Code)

(617)-369-7300

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker Symbol	Name of each exchange on which registered
Common stock, par value $0.001 per share	BSIG	New York Stock Exchange
4.800% Notes due 2026	BSIG 26	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý 

The number of shares of the registrant’s common stock, $0.001 per share, outstanding as of August 3, 2022 was 41,433,855.

TABLE OF CONTENTS

		Page
Part I	Financial Information	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	7
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	74
Item 4.	Controls and Procedures	76
Part II	Other Information	77
Item 1.	Legal Proceedings	77
Item 1A.	Risk Factors	77
Item 6.	Exhibits	77

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

BrightSphere Investment Group Inc.

Condensed Consolidated Balance Sheets

(in millions, except for share and per share data, unaudited)

	June 30, 2022		December 31, 2021
Assets
Cash and cash equivalents	$	92.2	$	252.1
Investment advisory fees receivable	98.9		167.1
Income taxes receivable	15.0		4.9
Fixed assets, net	47.8		50.2
Right of use assets	63.1		65.1
Investments	49.1		54.5
Goodwill	20.3		20.3
Other assets	27.3		28.2
Deferred tax assets	64.6		72.4
Total assets	$	478.3	$	714.8
Liabilities and stockholders’ equity
Accounts payable and accrued expenses	$	24.4	$	35.2
Accrued incentive compensation	47.1		117.4
Other compensation liabilities	74.4		103.7
Accrued income taxes	2.8		1.1
Operating lease liabilities	76.1		77.6
Other liabilities	1.2		2.5
Debt:
Revolving credit facility	50.0		—
Third party borrowings	273.3		394.9
Total liabilities	549.3		732.4
Commitments and contingencies
Equity:
Common stock (par value $0.001; 41,433,855 and 45,397,260 shares, respectively, issued)	—		—
Additional paid-in capital	0.5		—
Retained deficit	(59.8)		(6.8)
Accumulated other comprehensive loss	(11.7)		(10.8)
Total equity	(71.0)		(17.6)
Total liabilities and equity	$	478.3	$	714.8

See Notes to Condensed Consolidated Financial Statements

3

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Operations

(in millions except for per share data, unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue:
Management fees	$	93.5	$	111.6	$	195.7	$	215.4
Performance fees	2.0		20.4		12.0		25.0
Other revenue	—		1.3		—		2.6
Total revenue	95.5		133.3		207.7		243.0
Operating expenses:
Compensation and benefits	27.0		73.4		73.8		126.0
General and administrative expense	16.5		18.0		33.4		37.1
Depreciation and amortization	5.3		5.8		10.6		11.3
Amortization of acquired intangibles	—		—		—		—
Total operating expenses	48.8		97.2		117.8		174.4
Operating income	46.7		36.1		89.9		68.6
Non-operating income and (expense):
Investment income (loss)	(0.7)		4.7		(0.8)		7.3
Interest income	0.1		0.1		0.1		0.1
Interest expense	(4.8)		(6.3)		(11.3)		(12.5)
Loss on extinguishment of debt	—		—		(3.2)		—
Loss on sale of subsidiary	—		—		—		(1.3)
Total non-operating income (loss)	(5.4)		(1.5)		(15.2)		(6.4)
Income from continuing operations before taxes	41.3		34.6		74.7		62.2
Income tax expense	12.7		9.9		22.3		19.0
Income from continuing operations	28.6		24.7		52.4		43.2
Income from discontinued operations, net of tax	—		53.4		—		75.3
Gain on disposal of discontinued operations, net of tax	—		509.2		—		509.2
Net income	28.6		587.3		52.4		627.7
Net income attributable to non-controlling interests in consolidated Funds	—		54.6		—		68.0
Net income attributable to controlling interests	$	28.6	$	532.7	$	52.4	$	559.7
Earnings per share (basic) attributable to controlling interests	$	0.69	$	6.71	$	1.23	$	7.05
Earnings per share (diluted) attributable to controlling interests	0.67		6.42		1.19		6.77
Continuing operations earnings per share (basic) attributable to controlling interests	0.69		0.31		1.23		0.54
Continuing operations earnings per share (diluted) attributable to controlling interests	0.67		0.29		1.19		0.52
Weighted average common stock outstanding	41.4		79.4		42.7		79.3
Weighted average diluted common stock outstanding	42.5		82.9		43.9		82.6

See Notes to Condensed Consolidated Financial Statements

4

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions, unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	28.6	$	587.3	$	52.4	$	627.7
Other comprehensive income (loss):
Amortization related to derivative securities, net of tax	0.6		0.6		2.2		1.2
Foreign currency translation adjustment	(2.4)		0.1		(3.1)		1.2
Total other comprehensive income (loss)	(1.8)		0.7		(0.9)		2.4
Comprehensive income attributable to non-controlling interests in consolidated Funds	—		54.6		—		68.0
Total comprehensive income attributable to controlling interests	$	26.8	$	533.4	$	51.5	$	562.1

See Notes to Condensed Consolidated Financial Statements

5

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended June 30, 2022 and 2021

($ in millions except share data, unaudited)

	Common stock (millions)	Common stock,  par value		Additional paid-in capital		Retained earnings (deficit)		Accumulated other comprehensive income (loss)		Total stockholders’ equity		Non- controlling interests		Non-controlling interests in consolidated Funds		Total  equity
March 31, 2021	79.4	$	0.1	$	492.8	$	(150.3)	$	(11.9)	$	330.7	$	5.6	$	93.7	$	430.0
Issuance of common stock	—	—		0.1		—		—		0.1		—		—		0.1
Capital contributions	—	—		—		—		—		—		—		29.7		29.7
Equity-based compensation	—	—		0.5		—		—		0.5		—		—		0.5
Foreign currency translation adjustment	—	—		—		—		0.1		0.1		—		—		0.1
Amortization related to derivatives securities, net of tax	—	—		—		—		0.6		0.6		—		—		0.6
Other changes in non-controlling interests	—	—		—		—		—		—		(5.6)		—		(5.6)
Net de-consolidation of Funds	—	—		—		—		—		—		—		(178.0)		(178.0)
Dividends ($0.01 per share)	—	—		—		(0.8)		—		(0.8)		—		—		(0.8)
Net income	—	—		—		532.7		—		532.7		—		54.6		587.3
June 30, 2021	79.4	$	0.1	$	493.4	$	381.6	$	(11.2)	$	863.9	$	—	$	—	$	863.9
March 31, 2022	41.4	$	—	$	—	$	(88.0)	$	(9.9)	$	(97.9)	$	—	$	—	$	(97.9)
Equity-based compensation	—	—		0.5		—		—		0.5		—		—		0.5
Foreign currency translation adjustment	—	—		—		—		(2.4)		(2.4)		—		—		(2.4)
Amortization related to derivatives securities, net of tax	—	—		—		—		0.6		0.6		—		—		0.6
Dividends ($0.01 per share)	—	—				(0.4)		—		(0.4)		—		—		(0.4)
Net income	—	—		—		28.6		—		28.6		—		—		28.6
June 30, 2022	41.4	$	—	$	0.5	$	(59.8)	$	(11.7)	$	(71.0)	$	—	$	—	$	(71.0)

See Notes to Condensed Consolidated Financial Statements

6

BrightSphere Investment Group Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the six months ended June 30, 2022 and 2021

($ in millions except share data, unaudited)

	Common stock (millions)	Common stock,  par value		Additional paid-in capital		Retained earnings (deficit)		Accumulated other comprehensive income (loss)		Total stockholders’ equity		Non- controlling interests		Non-controlling interests in consolidated Funds		Total  equity
December 31, 2020	79.4	$	0.1	$	492.4	$	(176.5)	$	(13.6)	$	302.4	$	1.7	$	80.3	$	384.4
Issuance of common stock	—	—		0.1		—		—		0.1		—		—		0.1
Capital contributions	—	—		—		—		—		—		3.8		29.7		33.5
Equity-based compensation	—	—		0.9		—		—		0.9		—		—		0.9
Foreign currency translation adjustment	—	—		—		—		1.2		1.2		—		—		1.2
Amortization related to derivatives securities, net of tax	—	—		—		—		1.2		1.2		—		—		1.2
Other changes in non-controlling interests	—	—		—		—		—		—		(5.5)		—		(5.5)
Net de-consolidation of Funds	—	—		—		—		—		—		—		(178.0)		(178.0)
Dividends ($0.02 per share)	—	—		—		(1.6)		—		(1.6)		—		—		(1.6)
Net income	—	—		—		559.7		—		559.7		—		68.0		627.7
June 30, 2021	79.4	$	0.1	$	493.4	$	381.6	$	(11.2)	$	863.9	$	—	$	—	$	863.9
December 31, 2021	45.4	$	—	$	—	$	(6.8)	$	(10.8)	$	(17.6)	$	—	$	—	$	(17.6)
Issuance of common stock	0.2	—		—		—		—		—		—		—		—
Repurchase of common stock	(4.2)	—		—		(103.2)		—		(103.2)		—		—		(103.2)
Equity-based compensation	—	—		1.4		—		—		1.4		—		—		1.4
Foreign currency translation adjustment	—	—		—		—		(3.1)		(3.1)		—		—		(3.1)
Amortization related to derivative securities, net of tax	—	—		—		—		2.2		2.2		—		—		2.2
Withholding tax related to stock option exercise	—	—		(0.9)		(1.4)		—		(2.3)		—		—		(2.3)
Dividends ($0.02 per share)	—	—		—		(0.8)		—		(0.8)		—		—		(0.8)
Net income	—	—		—		52.4		—		52.4		—		—		52.4
June 30, 2022	41.4	$	—	$	0.5	$	(59.8)	$	(11.7)	$	(71.0)	$	—	$	—	$	(71.0)

See Notes to Condensed Consolidated Financial Statements

7

BrightSphere Investment Group Inc. Condensed Consolidated Statements of Cash Flows (in millions, unaudited)
	Six Months Ended June 30,
	2022	2021
Cash flows from operating activities:
Net income	52.4	627.7
Less: Income from discontinued operations, net of tax	—	(75.3)
Adjustments to reconcile net income to net cash flows from operating activities from continuing operations:
Gain on sale of discontinued operations, net of tax	—	(509.2)
Loss on extinguishment of debt	3.2	—
Loss on sale of subsidiary	—	1.3
Depreciation and other amortization	10.6	11.3
Amortization of debt-related costs	3.6	2.2
Amortization and revaluation of non-cash compensation awards	(20.5)	13.3
Net earnings from Affiliate accounted for using the equity method	—	(2.4)
Distributions received from equity method Affiliate	—	2.9
Distributions from discontinued operations	—	46.4
Deferred income taxes	7.0	(4.1)
(Gains) losses on other investments	3.6	(2.8)
Changes in operating assets and liabilities (excluding discontinued operations):
(Increase) decrease in investment advisory fees receivable	68.2	(31.8)
(Increase) decrease in other receivables, prepayments, deposits and other assets	(1.7)	9.7
Decrease in accrued incentive compensation, operating lease liabilities and other liabilities	(77.3)	(21.6)
Decrease in accounts payable, accrued expenses and accrued income taxes	(19.2)	(20.6)
Net cash flows from operating activities of continuing operations	29.9	47.0
Net cash flows from operating activities of discontinued operations	—	(1.6)
Total net cash flows from operating activities	29.9	45.4
Cash flows from investing activities:
Additions of fixed assets, excluding discontinued operations	(8.2)	(7.4)
Cash proceeds from sale of subsidiaries	—	713.7
Purchase of investment securities	(5.1)	(2.5)
Sale of investment securities	6.9	8.4
Net cash flows from investing activities of continuing operations	(6.4)	712.2
Net cash flows from investing activities of discontinued operations	—	11.7
Total net cash flows from investing activities	(6.4)	723.9
Cash flows from financing activities:
Proceeds from revolving credit facility	175.0	132.0
Repayment of third party borrowings and revolving credit facility	(250.0)	(78.1)
Payment for debt issuance costs	(0.9)	(0.4)
Payment to OM plc for co-investment redemptions	(1.1)	(1.3)
Dividends paid to stockholders	(0.6)	(1.1)
Dividends paid to related parties	(0.3)	(0.6)
Repurchases of common stock	(103.2)	—
Withholding tax payments related to stock option exercise	(2.3)	—

See Notes to Condensed Consolidated Financial Statements

8

BrightSphere Investment Group Inc. Condensed Consolidated Statements of Cash Flows (in millions, unaudited)
	Six Months Ended June 30,
	2022		2021
Net cash flows from financing activities of continuing operations	(183.4)		50.5
Net cash flows from financing activities of discontinued operations	—		(28.4)
Total net cash flows from financing activities	(183.4)		22.1
Effect of foreign exchange rate changes on cash and cash equivalents	—		—
Net increase (decrease) in cash and cash equivalents	(159.9)		791.4
Cash and cash equivalents at beginning of period	$	252.1	$	372.9
Cash and cash equivalents at beginning of period classified within assets held for sale	$	—	$	31.2
Cash and cash equivalents at end of period	$	92.2	$	1,195.5
Less: cash and cash equivalents at end of period classified within assets held for sale	—		(18.5)
Cash and cash equivalents at end of period from continuing operations	$	92.2	$	1,177.0
Supplemental disclosure of cash flow information:
Interest paid	$	8.7	$	9.8
Income taxes paid	27.7		31.9

See Notes to Condensed Consolidated Financial Statements

9

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1) Organization and Description of the Business

BrightSphere Investment Group Inc. (“BrightSphere”, “BSIG” or the “Company”), through its subsidiaries, is a global asset management company. The Company provides investment management services globally to predominantly institutional investors. The Company historically held interests in a diverse group of investment management firms (the “Affiliates”) individually headquartered in the United States. The Company completed the disposition of certain Affiliates and currently operates the business through one Affiliate, Acadian Asset Management LLC (“Acadian”), within its Quant & Solutions reportable segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies.

Acadian is organized as a limited liability company. Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products. The Company utilizes a profit-sharing model in structuring its compensation and ownership with Acadian. Variable compensation is based on the firm’s profitability. BSIG and Acadian key employees share in profits after variable compensation according to their respective ownership interests. The profit-sharing model results in the alignment of BSIG and Acadian key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business.     

The corporate head office is included within the Other category, along with the Company’s previously disposed affiliates, Campbell Global, LLC (“Campbell Global”) and Investment Counselors of Maryland (“ICM”), for the prior year period.

Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection, and investment group, listed on the London Stock Exchange. On October 15, 2014, the Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended. Additionally, between the Offering and February 25, 2019, the Company, OM plc and/or HNA Capital U.S. (“HNA”) completed a series of transactions in the Company’s shares, including a two-step transaction announced on March 25, 2017 for a sale by OM plc of a 24.95% shareholding in the Company to HNA and a two-step transaction announced on November 19, 2018 for a sale of the substantial majority of the shares held by HNA of the Company to Paulson & Co. Inc. (“Paulson”). On February 25, 2019, this transaction was completed and Paulson held approximately 21.7% of the shares of the Company. The remaining shares held by HNA were bought back by the Company in the first quarter of 2019.

For the three months ended June 30, 2022, the Company did not repurchase any shares of common stock. For the six months ended June 30, 2022, the Company repurchased 4,147,450 shares of common stock at an average price of $24.09 per share, or approximately $100 million in total, including commissions. For the three and six months ended June 30, 2021, the Company did not repurchase any shares of common stock.

10

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

2) Basis of Presentation and Significant Accounting Policies

The Company’s significant accounting policies are as follows:

Basis of presentation

These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows of the Company. Within these Condensed Consolidated Financial Statements, Paulson and its related entities, as defined above, are referred to as “related parties.”

The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements have been included. All dollar amounts, except per-share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements, however, material intercompany balances and transactions among the Company, its consolidated Affiliates and consolidated Funds are eliminated in consolidation.

The Notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. See Note 3, Discontinued Operations for additional information.

Certain disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (annual report on Form 10-K) are not required to be included on an interim basis in the Company’s quarterly reports on Form 10-Q. The Company has condensed or omitted these disclosures. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The Company’s significant accounting policies, which have been consistently applied, are summarized in those financial statements.

Use of estimates

The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

New accounting standards not yet adopted

The Company has considered all newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the unaudited Condensed Consolidated Financial Statements, including those that have not yet been adopted. The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures.

11

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

3) Discontinued Operations

Landmark Partners

On March 30, 2021, the Company entered into a definitive agreement with Ares Holdings L.P. (“Ares”), pursuant to which Ares agreed to purchase all of the Company’s interests in Landmark Partners LLC (“Landmark”) and the Company’s co-investments in Landmark funds. On June 2, 2021, the Company completed the sale of all its interests in Landmark to Ares for cash consideration of $690.0 million, adjusted for customary closing adjustments. The Company recognized a gain on disposal of discontinued operations of $509.2 million, net of tax of $176.6 million for the three and six months ended June 30, 2021. The divestiture of Landmark met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results. The Company redeemed co-investments of $31.5 million in Landmark’s funds as of June 2, 2021 upon consummation of the sale.

Thompson, Siegel & Walmsley, LLC

On May 9, 2021, the Company entered into an agreement with Pendal Group Limited (“Pendal”), to sell all of the Company’s interests in Thompson, Siegel & Walmsley, LLC (“TSW”) and the Company’s seed investment in TSW strategies. On July 22, 2021, the Company completed the sale of all its interests in TSW to Pendal for cash consideration of $240.0 million. The divestiture of TSW met the discontinued operations criteria as it represented a strategic shift that has a major effect on the Company’s operations and financial results.

12

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

3) Discontinued Operations (cont.)

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 are as follows (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	—	$	51.3	$	—	$	109.5
Operating expenses:
Compensation and benefits	—		43.8		—		87.6
General and administrative expenses	—		3.3		—		7.7
Amortization of intangibles	—		1.1		—		2.7
Depreciation and amortization	—		0.2		—		0.5
Consolidated Funds’ expense	—		—		—		0.1
Total operating expenses	—		48.4		—		98.6
Operating income	—		2.9		—		10.9
Investment gains of consolidated Funds	—		51.5		—		68.1
Income from discontinued operations before taxes	—		54.4		—		79.0
Income tax expense	—		1.0		—		3.7
Income from discontinued operations, net of tax	—		53.4		—		75.3
Gain on disposal, net of tax of $0.0, $176.6, $0.0, and $176.6	—		509.2		—		509.2
Total discontinued operations	—		562.6		—		584.5
Income from discontinued operations attributable to non-controlling interests	—		54.6		—		68.0
Net income from discontinued operations attributable to controlling interests	$	—	$	508.0	$	—	$	516.5

Consolidated Funds

In connection with the sale of Landmark on June 2, 2021, the Company transferred its co-investment interests in Landmark funds to Ares for $31.5 million. The redemption resulted in the de-consolidation of consolidated Funds that were considered to be variable interest entities (“VIEs”) as of June 2, 2021 upon consummation of the sale. The criteria for discontinued operations accounting treatment were met. The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $(3.1) million and $0.0 million in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021, respectively.

4) Investments

Investments are comprised of the following as of the dates indicated (in millions):

13

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

4) Investments (cont.)

	June 30, 2022		December 31, 2021
Other investments	$	8.2	$	9.5
Investments related to long-term incentive compensation plans	40.9		45.0
Total investments per Condensed Consolidated Balance Sheets	$	49.1	$	54.5

Investment income (loss) is comprised of the following for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Realized and unrealized gains (losses) on other investments held at fair value	$	(0.7)	$	3.5	$	(0.8)	$	4.9
Earnings from equity-accounted investment in Affiliate	—		1.2		—		2.4
Total investment income (loss) per Condensed Consolidated Statements of Operations	$	(0.7)	$	4.7	$	(0.8)	$	7.3

14

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

5) Fair Value Measurements

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value, June 30, 2022
Assets(1)
Investments in separate accounts(2)	4.0		—		—		—		4.0
Investments related to long-term incentive compensation plans(3)	40.9		—		—		—		40.9
Investments in unconsolidated Funds(4)	—		—		—		4.2		4.2
Total fair value assets	$	44.9	$	—	$	—	$	4.2	$	49.1

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value December 31, 2021
Assets(1)
Investments in separate accounts(2)	4.6		—		—		—		4.6
Investments related to long-term incentive compensation plans(3)	45.0		—		—		—		45.0
Investments in unconsolidated Funds(4)	—		—		—		4.9		4.9
Total fair value assets	$	49.6	$	—	$	—	$	4.9	$	54.5

(1)Assets measured at fair value are comprised of financial investments managed by the Company's Affiliates.

Equity securities, including common and preferred stock and short-term investment funds which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. The securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II.

The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided.

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence

15

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

5) Fair Value Measurements (cont.)

procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2)Investments in separate accounts of $4.0 million at June 30, 2022 consist of approximately 100% of equity securities and other investments. Investments in separate accounts of $4.6 million at December 31, 2021 consist of approximately 100% of equity securities and other investments. The Company values these using the published price of the underlying securities (classified as Level I) or quoted price supported by observable inputs as of the measurement date (classified as Level II).

(3)Investments related to long-term incentive compensation plans of $40.9 million and $45.0 million at June 30, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I.

(4)The uncategorized amounts of $4.2 million and $4.9 million at June 30, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investment Funds, UCITS and other investment vehicles. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. UCITS and other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $4.2 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from June 30, 2022. The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions.

16

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

5) Fair Value Measurements (cont.)

The following table reconciles the opening balances of Level III financial assets to closing balances at the end of the period (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
Investments in unconsolidated Funds	2022		2021		2022		2021
Level III financial assets
At beginning of the period	$	—	$	2.5	$	—	$	2.5
Additions (redemptions)	—		(0.1)		—		(0.1)
Disposals	—		(2.7)		—		(2.7)
Total net fair value gains/losses recognized in net income	—		0.3		—		0.3
Total Level III financial assets	$	—	$	—	$	—	$	—

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and six months ended June 30, 2022 and 2021, respectively.

17

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

6) Variable Interest Entities

The Company, through its Affiliate, sponsors the formation of various entities considered to be VIEs. These VIEs are primarily Funds managed by the Company’s Affiliate and other partnership interests typically owned entirely by third party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own non-controlling interests in the Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to more than an insignificant amount of the risks and rewards of the entity. Typically, the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial. The Company did not consolidate any funds that are VIEs as of June 30, 2022 and December 31, 2021.

The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIEs results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

	June 30, 2022		December 31, 2021
Unconsolidated VIE assets	$	722.6	$	795.5
Unconsolidated VIE liabilities	$	298.4	$	323.6
Equity interests on the Condensed Consolidated Balance Sheets	$	4.2	$	4.8
Maximum risk of loss(1)	$	4.2	$	5.0

(1)Includes equity investments the Company has made or is required to make.

18

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

7) Borrowings and Debt

The Company’s borrowings and long-term debt was comprised of the following as of the dates indicated (in millions):

	June 30, 2022					December 31, 2021
(in millions)	Carrying Value		Fair Value		Fair Value Level	Carrying Value		Fair Value		Fair Value Level
Revolving credit facility:
$125 million revolving credit facility expiring March 7, 2025(1)	$	50.0	$	50.0	2	$	—	$	—
Total revolving credit facility	$	50.0	$	50.0		$	—	$	—
Third party borrowings:
$275 million 4.80% Senior Notes Due July 27, 2026(2)	$	273.3	$	251.7	2	$	273.1	$	286.5	2
$125 million 5.125% Senior Notes Due August 1, 2031(2)(3)	—		—			121.8		126.4		2
Total third party borrowings	$	273.3	$	251.7		$	394.9	$	412.9

(1)Fair value approximates carrying value because the credit facility has variable interest rates based on selected short term market rates.

(2)The difference between the principal amounts and the carrying values of the senior notes in the table above reflects the unamortized debt issuance costs and discounts.

(3)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded a $3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2022.

Revolving Credit Facility

On March 7, 2022, the Company, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian Credit Agreement”), which replaced the Company’s revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”). The maturity date of this Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

19

BrightSphere Investment Group Inc.

Notes to Consolidated Financial Statements

(unaudited)

7) Borrowings and Debt (cont.)

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10% (“Adjusted Term SOFR”) plus 1%, plus, in each case, an additional amount ranging from 0.5% to 1.0%, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR for plus an additional amount ranging from 1.5% to 2.0%, with such additional amount based on Acadian’s Leverage Ratio. In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian’s Leverage Ratio.

Under the Acadian Credit Agreement, the ratio of Acadian’s third-party borrowings to Acadian’s trailing twelve months Adjusted EBITDA, as defined by the Acadian Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the Acadian interest coverage ratio must not be less than 4.0x.

8) Leases

The Company has operating leases for corporate offices, data centers and certain equipment. The operating leases have remaining lease terms of less than 1 year to 12 years, some of which include options to extend the leases for up to 5 years.

The following table summarizes information about the Company’s operating leases for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	2.5	$	2.9	$	5.0	$	5.9
Variable lease cost	0.1		—		0.1		0.1
Sublease income	(0.2)		$	(0.1)	(0.3)		(0.1)
Total operating lease expense	$	2.4	$	2.8	$	4.8	$	5.9
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2.2	$	3.5	$	4.4	$	6.1
Right of use assets obtained in exchange for new operating lease liabilities	1.8		1.5		1.8		1.6

In determining the incremental borrowing rate, the Company considered the interest rate yield for the specific interest rate environment and the Company’s credit spread at the inception of the lease. For the six months ended June 30, 2022 and 2021, the weighted average remaining lease term was 10.9 and 11.7, respectively, and the weighted average discount rate was 3.39% and 3.35%, respectively.

20

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

8) Leases (cont.)

Maturities of operating lease liabilities were as follows (in millions):

	Operating Leases
Year Ending December 31,
2022 (excluding the six months ended June 30, 2022)	$	2.0
2023	8.9
2024	8.4
2025	8.1
2026	8.1
Thereafter	56.5
Total lease payments	$	92.0
Less imputed interest	(15.9)
Total	$	76.1

9) Commitments and Contingencies

Operational commitments

A number of our subsidiaries operate under regulatory authorities that require that they maintain minimum financial or capital requirements. Management is not aware of any violations of such financial requirements occurring during the period.

Included in cash and cash equivalents is $1.5 million pertaining to the wind-down of BrightSphere Investment U.K., Ltd.

Guaranty

The Company entered into a guaranty for an office space security deposit in the amount of $2.5 million in January 2020. This represents the maximum potential amount of future (undiscounted) payments that the Company could be required to make under the guaranty in the event of default by the guaranteed parties. This guaranty expires in 2022. There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2022 related to this guaranty.

Litigation

The Company is subject to claims, legal proceedings, and other contingencies in the ordinary course of its business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. If an insurance claim or other indemnification for a litigation accrual is available to the Company, the associated gain will not be recognized until all contingencies related to the gain have been resolved. As of June 30, 2022, there were no material accruals for claims, legal proceedings, or other contingencies.

21

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

9) Commitments and Contingencies (cont.)

Indemnifications

In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.

Foreign tax contingency

The Company has clients in non-U.S. jurisdictions which require entities that are conducting certain business activities in such jurisdictions to collect and remit tax assessed on certain fees paid for goods and services provided. The Company does not believe this requirement is applicable based on its limited business activities in these jurisdictions. However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes. At June 30, 2022, management of the Company has estimated the potential maximum exposure and concluded that it is not material. No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at June 30, 2022.

Considerations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash and investments. The Company maintains cash and cash equivalents and short term investments with various financial institutions. These financial institutions are typically located in cities in which the Company and its Affiliates operate. For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. At June 30, 2022, approximately $20.6 million of the Company’s cash and cash equivalents were invested in money market funds. Additionally, the Company holds insurance policies which cover historical and future tax benefits relating to certain of its deferred tax assets. The insurers of the policies are considered a significant counterparty to the Company.

22

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

10) Earnings Per Share

Basic earnings per share is calculated by dividing net income attributable to controlling interests by the weighted-average number of shares of common stock outstanding. Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable common stock, except when inclusion is antidilutive.

The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Income from continuing operations attributable to controlling interests	$	28.6	$	24.7	$	52.4	$	43.2
Income from discontinued operations attributable to controlling interests (Note 3)	—		508.0		—		516.5
Net income attributable to common stock	$	28.6	$	532.7	$	52.4	$	559.7
Denominator:
Weighted-average shares of common stock outstanding—basic	41,425,555		79,351,567		42,690,683		79,335,650
Potential shares of common stock:
Restricted stock units	6,935		23,323		8,523		29,472
Employee stock options	1,085,635		3,551,234		1,216,600		3,258,363
Weighted-average shares of common stock outstanding—diluted	42,518,125		82,926,124		43,915,806		82,623,485
Earnings per share of common stock attributable to controlling interests:
Basic
Continuing operations	$	0.69	$	0.31	$	1.23	$	0.54
Discontinued operations	—		6.40		—		6.51
Basic earnings per share of common stock attributable to controlling interests	$	0.69	$	6.71	$	1.23	$	7.05
Diluted
Continuing operations	$	0.67	$	0.29	$	1.19	$	0.52
Discontinued operations	—		6.13		—		6.25
Diluted earnings per share of common stock attributable to controlling interests	$	0.67	$	6.42	$	1.19	$	6.77

23

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

11) Revenue

Management fees

The Company’s management fees are a function of the fee rates the Affiliates charge to their clients, which are typically expressed in basis points, and the levels of the Company’s assets under management. The most significant driver of increases or decreases in this average fee rate is changes in the mix of the Company’s assets under management caused by net inflows or outflows in certain asset classes or disproportionate market movements.

Performance fees

The Company’s products subject to performance fees earn these fees upon exceeding high-water mark performance thresholds or outperforming a hurdle rate. Performance fees are recorded in revenues when the contractual performance criteria have been met and when it is probable that a significant reversal of revenue recognized will not occur in future reporting periods.

Other revenue

Included in other revenue are certain payroll and benefits costs and expenses paid on behalf of Funds by the Company’s Affiliates. In instances where a customer reimburses the Company for a cost paid on the customer’s behalf, the Company is acting as a principal and the reimbursement is accrued on a gross basis at cost as the corresponding reimbursable expenses are incurred. There was no revenue from expense reimbursements for the three and six months ended June 30, 2022. Revenue from expense reimbursements amounted to $1.2 million for the three months ended June 30, 2021. Revenue from expense reimbursements amounted to $2.2 million for the six months ended June 30, 2021. Revenue is recorded in other revenue in the Company’s Condensed Consolidated Statements of Operations. Other revenue may also consist of other miscellaneous revenue, consisting primarily of administration and consulting services.

Disaggregation of management fee revenue

The geographic disaggregation of management fee revenue for the three and six months ended June 30 (in millions) are presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Quant & Solutions
U.S.	$	71.2	$	80.0	$	148.2	$	154.4
Non-U.S.	22.3		26.0		47.5		50.5
Other(1)
U.S.	—		4.1		—		7.8
Non-U.S.	—		1.5		—		2.7
Management fee revenue	$	93.5	$	111.6	$	195.7	$	215.4

(1)The Company’s previously divested Affiliates, Campbell Global and ICM, are included within the Other category for the three and six months ended June 30, 2021.

24

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

12) Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2022	$	4.1	$	(14.0)	$	(9.9)
Foreign currency translation adjustment	(2.4)		—		(2.4)
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income (loss)	(2.4)		0.6		(1.8)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2021	$	5.5	$	(17.4)	$	(11.9)
Foreign currency translation adjustment	0.1		—		0.1
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income	0.1		0.6		0.7
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2021	$	4.8	$	(15.6)	$	(10.8)
Foreign currency translation adjustment	(3.1)		—		(3.1)
Amortization related to derivatives securities, before tax(1)	—		3.0		3.0
Tax impact	—		(0.8)		(0.8)
Other comprehensive income (loss)	(3.1)		2.2		(0.9)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

25

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

12) Accumulated Other Comprehensive Income (Loss) (cont.)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2020	$	4.4	$	(18.0)	$	(13.6)
Foreign currency translation adjustment	1.2		—		1.2
Amortization related to derivatives securities, before tax	—		1.6		1.6
Tax impact	—		(0.4)		(0.4)
Other comprehensive income	1.2		1.2		2.4
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

(1)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded $1.3 million of amortization expense included in Amortization related to derivatives securities, before tax.

13) Derivatives and Hedging

Cash flow hedge

In July 2015, the Company entered into a series of $300.0 million notional Treasury rate lock contracts which were designated and qualified as cash flow hedges. The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances. The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $(34.4) million, was settled. Refer to Note 7, Borrowings and Debt, for additional information on the debt issuances.

As of June 30, 2022, the balance recorded in accumulated other comprehensive income (loss) was $(13.4) million, net of tax. This balance will be reclassified to earnings through interest expense over the life of the issued debt. The Company reclassified $0.8 million for each of the three months ended June 30, 2022 and 2021. Amounts of $3.0 million and $1.6 million have been reclassified for the six months ended June 30, 2022 and 2021, respectively. During the next twelve months the Company expects to reclassify approximately $3.3 million to interest expense.

On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, amortization expense of $1.3 million (of the $3.0 million interest expense reclassified to earnings for the six months ended June 30, 2022) was reclassified to earnings as interest expense.

26

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments

The Company has the following reportable segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies. This segment is comprised of the Company’s interest in Acadian.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021. The corporate head office expenses are not allocated to the Company’s business segment but the Chief Operating Decision Maker (“CODM”) does consider the cost structure of the corporate head office when evaluating the financial performance of the segment.

Performance Measure

The primary measure used by the CODM in measuring performance and allocating resources to the segments is Economic Net Income (“ENI”). The Company defines ENI for the segments as ENI revenue less (i) ENI operating expenses, (ii) variable compensation and (iii) key employee distributions. The ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP. This measure supplements and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with U.S. GAAP. The Company does not disclose total asset information for its reportable segment as the information is not reviewed by the CODM.

ENI revenue includes management fees, performance fees and other revenue under U.S. GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and the Company’s share of earnings from equity-accounted Affiliate. ENI revenue is also adjusted to exclude the separate revenues recorded under U.S. GAAP for certain Fund expenses reimbursed to our Affiliates.

ENI operating expenses include compensation and benefits, general and administrative expense, and depreciation and amortization under U.S. GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, goodwill impairment and amortization of acquired intangible assets, capital transaction costs, restructuring costs, and the separate expenses recorded under U.S. GAAP for certain Fund expenses reimbursed to Affiliates. Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

ENI segment results are also adjusted to exclude the portion of consolidated Fund revenues, expenses and investment return recorded under U.S. GAAP.

Segment Presentation

The following tables set forth summarized operating results for the Company’s segments and related adjustments necessary to reconcile the segment economic net income to arrive at the Company’s consolidated U.S. GAAP net income (loss):

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2022 (in millions):

27

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments (cont.)

	Three Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	95.5	$	—	$	—		$	95.5
ENI operating expenses	39.7		4.4		(18.5)		(a)	25.6
Earnings before variable compensation	55.8		(4.4)		18.5			69.9
Variable compensation	21.7		1.0		—			22.7
ENI operating earnings (after variable comp)	34.1		(5.4)		18.5			47.2
Affiliate key employee distributions	0.5		—		—			0.5
Earnings after Affiliate key employee distributions	33.6		(5.4)		18.5			46.7
Net interest expense	—		(4.6)		(0.1)		(b)	(4.7)
Net investment income (loss)	—		—		(0.7)		(c)	(0.7)
Income tax expense	—		(6.3)		(6.4)		(d)	(12.7)
Economic net income	$	33.6	$	(16.3)	$	11.3		$	28.6

28

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments (cont.)

The following table presents the financial data for the Company’s segments for the three months ended June 30, 2021 (in millions):

	Three Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	111.1	$	22.3	$	(0.1)	(e)	$	133.3
ENI operating expenses	38.3		9.5		13.5		(a)	61.3
Earnings before variable compensation	72.8		12.8		(13.6)			72.0
Variable compensation	22.0		10.4		0.3		(f)	32.7
ENI operating earnings (after variable comp)	50.8		2.4		(13.9)			39.3
Affiliate key employee distributions	3.1		0.1		—			3.2
Earnings after Affiliate key employee distributions	47.7		2.3		(13.9)			36.1
Net interest expense	—		(5.4)		(0.8)		(b)	(6.2)
Net investment income	—		—		4.7		(c)	4.7
Net income attributable to non-controlling interests in consolidated Funds	—		—		(54.6)		(c)	(54.6)
Income tax (expense) benefit	—		(11.7)		1.8		(d)	(9.9)
Income from discontinued operations, net of tax	—		—		53.4		(c)	53.4
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	47.7	$	(14.8)	$	499.8		$	532.7

29

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments (cont.)

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2022 (in millions):

	Six Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	207.7	$	—	$	—		$	207.7
ENI operating expenses	80.8		8.9		(24.9)		(a)	64.8
Earnings before variable compensation	126.9		(8.9)		24.9			142.9
Variable compensation	48.0		2.6		—			50.6
ENI operating earnings (after variable comp)	78.9		(11.5)		24.9			92.3
Affiliate key employee distributions	2.4		—		—			2.4
Earnings after Affiliate key employee distributions	76.5		(11.5)		24.9			89.9
Net interest expense	—		(9.2)		(2.0)		(b)	(11.2)
Net investment loss	—		—		(0.8)		(c)	(0.8)
Loss on extinguishment of debt	—		—		(3.2)		(c)	(3.2)
Income tax expense	—		(15.1)		(7.2)		(d)	(22.3)
Economic net income	$	76.5	$	(35.8)	$	11.7		$	52.4

30

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments (cont.)

The following table presents the financial data for the Company’s segments for the six months ended June 30, 2021 (in millions):

	Six Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	214.6	$	28.6	$	(0.2)	(e)	$	243.0
ENI operating expenses	77.4		19.2		16.6		(a)	113.2
Earnings before variable compensation	137.2		9.4		(16.8)			129.8
Variable compensation	44.6		11.3		0.8		(f)	56.7
ENI operating earnings (after variable comp)	92.6		(1.9)		(17.6)			73.1
Affiliate key employee distributions	4.6		(0.1)		—			4.5
Earnings after Affiliate key employee distributions	88.0		(1.8)		(17.6)			68.6
Net interest expense	—		(10.8)		(1.6)		(b)	(12.4)
Net investment income	—		—		7.3		(c)	7.3
Loss on sale of subsidiary	—		—		(1.3)		(c)	(1.3)
Net income attributable to non-controlling interests in consolidated Funds	—		—		(68.0)		(c)	(68.0)
Income tax (expense) benefit	—		(20.0)		1.0		(d)	(19.0)
Income from discontinued operations, net of tax	—		—		75.3		(c)	75.3
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	88.0	$	(32.6)	$	504.3		$	559.7

(1)The most directly comparable U.S. GAAP measure of ENI revenue is U.S. GAAP revenue. The most directly comparable U.S. GAAP measure of ENI operating expenses is U.S. GAAP operating expenses, which is comprised of ENI operating expenses, variable compensation, and Affiliate key employee distributions above. The most directly comparable U.S. GAAP measure of earnings after Affiliate key employee distributions is U.S. GAAP operating income. The most directly comparable U.S. GAAP measure of ENI is U.S. GAAP net income attributable to controlling interests.

Reconciling Adjustments:

a.Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, and amortization of acquired intangible assets, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S. GAAP operating expenses.

b.Adjusted to include the cost of seed financing, which is included in U.S. GAAP interest expense.

c.Adjusted to include net investment income (loss), the loss on extinguishment of debt, net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, and the results of discontinued operations, net of tax, all of which are included in U.S. GAAP net income attributable to controlling interests.

31

BrightSphere Investment Group Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

14) Segments (cont.)

d.Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles. Also adjusted to include the tax impact of certain ENI adjustments; exclude the tax expense or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

e.Adjusted to exclude earnings from equity-accounted Affiliate, which are included in U.S. GAAP investment income, and to include consolidated Funds revenues and the separate revenues recorded for certain Fund expenses reimbursed by customers, which are included in U.S. GAAP revenue.

f.Adjusted to include restructuring costs which are included in U.S. GAAP compensation expense.

g.Adjusted to include the gain on disposal of discontinued operations, net of tax, which is included in U.S. GAAP net income attributable to controlling interests.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to “BrightSphere” or “BSIG” refer to BrightSphere Investment Group Inc., references to the “Company” refer to BSIG, and references to “we,” “our” and “us” refer to BSIG and its consolidated subsidiaries and equity-accounted Affiliate, excluding discontinued operations. References to the holding company or “Center” excluding the Affiliates refer to BrightSphere Inc., or “BSUS,” a Delaware corporation and wholly owned subsidiary of BSIG. Unless we state otherwise or the context otherwise requires, references in this Quarterly Report on Form 10-Q to “Affiliates” or an “Affiliate” refer to the asset management firms in which we have or had an ownership interest. References in this Quarterly Report on Form 10-Q to “OM plc” refer to Old Mutual plc, our former parent. None of the information in this Quarterly Report on Form 10-Q constitutes either an offer or a solicitation to buy or sell any of our Affiliates’ products or services, nor is any such information a recommendation for any of our Affiliates’ products or services.

The following discussion of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and related notes which appear elsewhere in this Quarterly Report on Form 10-Q.

This discussion contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements” at the end of this Item 2 for more information. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results.

Our MD&A is presented in five sections:

•Overview provides a brief description of our business. It includes information on our reporting segment and underlying Affiliate, a summary of The Economics of Our Business and an explanation of How We Measure Performance using a non-GAAP measure which we refer to as economic net income, or ENI. This section also provides a Summary Results of Operations and information regarding our Assets Under Management by strategy, client type and location, and net flows by segment, client type and client location.

•U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021 includes an explanation of changes in our U.S. GAAP revenue, expense and other items for the three and six months ended June 30, 2022 and 2021, as well as key U.S. GAAP operating metrics.

•Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis includes an explanation of the key differences between U.S. GAAP net income and ENI, the key measure management uses to evaluate our performance. This section also provides a reconciliation between U.S. GAAP net income attributable to controlling interests and ENI for the three and six months ended June 30, 2022 and 2021 as well as a reconciliation of key ENI operating items including ENI revenue and ENI operating expenses. This section also provides key non-GAAP operating metrics. In addition, this section provides segment analysis for our business segments.

•Capital Resources and Liquidity discusses our key balance sheet data. This section discusses Cash Flows from the business; Adjusted EBITDA; Future Capital Needs; Borrowings and Long-Term Debt. The discussion of Adjusted EBITDA includes an explanation of how we calculate Adjusted EBITDA and a reconciliation of U.S. GAAP net income attributable to controlling interests to Adjusted EBITDA.

•Critical Accounting Policies and Estimates provides a discussion of the key accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition. These accounting policies and estimates require complex management judgment regarding matters that are highly uncertain at the time the policies were applied and estimates were made.

33

Overview

We are a global asset management holding company headquartered in Boston, Massachusetts. We historically held interests in a group of investment management firms (the “Affiliates”) individually headquartered in the United States. We have completed the disposition of certain Affiliates and currently operate our business through the following segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies. This segment is comprised of our interest in our sole Affiliate, Acadian Asset Management LLC (“Acadian”).

Through Acadian, we offer a diverse range of actively-managed investment strategies and products to institutional investors around the globe.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global, LLC (“Campbell Global”) and Investment Counselors of Maryland, LLC (“ICM”), for the three and six months ended June 30, 2021. The corporate head office expenses are not allocated to the Company’s business segment but the Chief Operating Decision Maker (“CODM”) does consider the cost structure of the corporate head office when evaluating the financial performance of our segment.

Under U.S. GAAP, Acadian is consolidated into our financial statements. We may also be required to consolidate Acadian’s sponsored investment entities, or Funds, due to the nature of our decision-making rights, our economic interests in these Funds or the rights of third party clients in those Funds.

    Recent Developments

COVID-19 Impact

The COVID-19 pandemic has had a significant impact on the global economy and the financial and securities markets. Ongoing global health concerns and uncertainty regarding the impact of COVID-19 could lead to further market volatility. As the pandemic continues to evolve, we continue to monitor the economic uncertainty and market volatility related to COVID-19, which has impacted the investment management industry in which we operate. The extent of the impact on our business operations and financial results will depend on a number of factors and future developments, including the spread of variants of COVID-19, which are uncertain and cannot be predicted. See Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities Exchange Commission on February 28, 2022.

Russia Invasion of Ukraine

Russia’s military invasion of Ukraine in February 2022, the resulting responses by the U.S. and other countries (including the imposition of broad-ranging economic sanctions), and the potential for wider conflict has increased volatility and uncertainty in global financial markets and adversely affected regional and global economies. Although our overall exposure to Russian securities is limited, the extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions, such as cyber attacks) are impossible to predict, but could result in significant market disruptions, including in certain industries or sectors, and may negatively affect global supply chains, inflation and global growth.

34

    The Economics of Our Business

Our profitability is affected by a variety of factors including the level and composition of our average assets under management, or AUM, fee rates charged on AUM and our expense structure. We earn management fees based on assets under management. Approximately 80% of our management fees for the three months ended June 30, 2022 were calculated based on average AUM (calculated on either a daily or monthly basis) with the remainder of our management fees calculated based on period-end AUM or other measuring methods. Changes in the levels of our AUM are driven by our investment performance and net client cash flows. We may also earn performance fees, or adjust management fees, when certain accounts differ in relation to relevant benchmarks or exceed or fail to exceed required returns. Approximately $12 billion, or 13%, of our AUM are in accounts in which we participate in the performance fee. The majority of these performance fees are calculated based on value added over the relevant benchmarks on a rolling one-year basis.

Our largest expense item is compensation and benefits paid to our employees, which consists of both fixed and variable components. Fixed compensation and benefits represents base salaries and wages, payroll taxes and the costs of our employee benefit programs. Variable compensation, calculated as described below, may be awarded in cash, equity, or profit interests.

The arrangements in place with Acadian result in the sharing of economics between BSUS and Acadian’s key management personnel using a profit-sharing model. Profit sharing affects two elements within our earnings: (i) the calculation of variable compensation and (ii) the level of equity or profit interests distribution to our employees.

Variable compensation is the portion of earnings that is contractually allocated to Acadian employees as a bonus pool, typically representing a fixed percentage of earnings before variable compensation, which is measured as revenues less fixed compensation and benefits and other operating and administrative expenses. Profits after variable compensation are shared between us and Acadian key employee equity holders according to our respective equity or profit interests ownership. The sharing of profits in this manner ensures that the economic interests of Acadian key employees and those of BSUS are aligned, both in terms of generating strong annual earnings as well as investing those earnings back into the business in order to generate growth over the long term. We view profit sharing as an attractive operating model, as it allows us to share in the benefits of operating leverage as the business grows, and ensures all equity and profit interests holders are incentivized to achieve that growth.

Equity or profit interests owned by Acadian key employees are awarded as part of their variable compensation arrangements. Over time, key employee-owned equity or profit interests are recycled from one generation of employee-owners to the next, either by the next generation purchasing equity or profit interests directly from retiring principals, or by key employees forgoing cash bonuses in exchange for the equivalent value in Acadian equity or profit interests. The recycling of equity or profit interests is often facilitated by BSUS; see “—U.S. GAAP Results of Operations—U.S. GAAP Expenses—Compensation and Benefits Expense” for a further discussion.

How We Measure Performance

We manage our business based on one business segment, reflecting how our management assesses the performance of our business.

In measuring and monitoring the key components of our earnings, our management uses a non-GAAP financial measure, ENI, to evaluate the financial performance of, and to make operational decisions for, our business. We also use ENI to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine variable compensation and equity distributions, and incentivize management. It is an important measure in evaluating our financial performance because we believe it most accurately represents our operating performance and cash generation capability.

35

ENI differs from net income determined in accordance with U.S. GAAP as a result of both the reclassification of certain income statement items and the exclusion of certain non-cash or non-recurring income statement items. In particular, ENI excludes non-cash charges representing the changes in the value of Affiliate equity and profit interests held by Affiliate key employees, the results of discontinued operations which are no longer part of our business, restructuring costs, capital transaction costs, seed capital and co-investment gains, losses and related financing costs and that portion of consolidated Funds which are not attributable to our stockholders.

ENI revenue is primarily comprised of the fee revenues paid to us by our clients for our advisory services and earnings from our former equity-accounted Affiliate. Revenue included within ENI differs from U.S. GAAP revenue in that it excludes amounts from consolidated Funds which are not attributable to our stockholders, it excludes reimbursement of certain costs we paid on behalf of our customers and includes our share of earnings from our former equity-accounted Affiliate.

ENI expenses are calculated to reflect all usual expenses from ongoing continuing operations attributable to our stockholders. Expenses included within ENI differ from U.S. GAAP expenses in that they exclude amounts from consolidated Funds which are not attributable to our stockholders, revaluations of Affiliate key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, costs we paid on behalf of our customers which were subsequently reimbursed and certain other non-cash expenses.

“Non-controlling interests” is a concept under U.S. GAAP that identifies net components of revenues and expenses that are not attributable to our stockholders. For example, the portion of the net income (loss) of any consolidated Fund that is attributable to the outside investors or clients of the consolidated Fund is included in “Non-controlling interests” in our Condensed Consolidated Financial Statements. Conversely, “controlling interests” is the portion of revenue or expense that is attributable to our stockholders.

For a more detailed discussion of the differences between U.S. GAAP net income and economic net income, see “—Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis.”

36

Summary Results of Operations

The following table summarizes our unaudited results of operations for the three and six months ended June 30, 2022 and 2021: 

($ in millions, unless otherwise noted)	Three Months Ended June 30,								Six Months Ended June 30,
	2022			2021			2022 vs. 2021		2022			2021			2022 vs. 2021
U.S. GAAP Basis
Revenue	$	95.5		$	133.3		$	(37.8)	$	207.7		$	243.0		$	(35.3)
Pre-tax income from continuing operations attributable to controlling interests	41.3			34.6			6.7		74.7			62.2			12.5
Net income from continuing operations attributable to controlling interests	28.6			24.7			3.9		52.4			43.2			9.2
Net income attributable to controlling interests	28.6			532.7			(504.1)		52.4			559.7			(507.3)
U.S. GAAP operating margin(1)	48.9		%	27.1		%	2182 bps		43.3		%	28.2		%	1505 bps
Earnings per share, basic ($)	$	0.69		$	6.71		$	(6.02)	$	1.23		$	7.05		$	(5.82)
Earnings per share, diluted ($)	$	0.67		$	6.42		$	(5.75)	$	1.19		$	6.77		$	(5.58)
Basic shares outstanding (in millions)	41.4			79.4			(38.0)		42.7			79.3			(36.6)
Diluted shares outstanding (in millions)	42.5			82.9			(40.4)		43.9			82.6			(38.7)
Economic Net Income Basis(2)(3)
(Non-GAAP measure used by management)
ENI revenue(4)	$	95.5		$	133.4		$	(37.9)	$	207.7		$	243.2		$	(35.5)
Pre-tax economic net income(5)	23.6			44.6			(21.0)		55.8			75.4			(19.6)
Adjusted EBITDA	34.0			56.3			(22.3)		77.0			98.4			(21.4)
ENI operating margin(6)	30.1		%	39.9		%	(983) bps		32.5		%	37.3		%	(484) bps
Economic net income(7)	17.3			32.9			(15.6)		40.7			55.4			(14.7)
ENI diluted EPS ($)	$	0.41		$	0.40		$	0.01	$	0.93		$	0.67		$	0.26
Other Operational Information
Assets under management (AUM) at period end (in billions)	$	90.5		$	126.9		$	(36.4)	$	90.5		$	126.9		$	(36.4)
Net client cash flows (in billions)	(2.8)			(0.9)			(1.9)		(5.0)			(4.4)			(0.6)
Annualized revenue impact of net flows(8)	(7.4)			(0.9)			(6.5)		(8.5)			(8.8)			0.3

(1)U.S. GAAP operating margin equals operating income from continuing operations divided by total revenue.

(2)Economic net income is a non-GAAP measure we use to evaluate the performance of our business. For a reconciliation to U.S. GAAP financial information and a further discussion of economic net income refer to “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis.”

(3)Excludes restructuring costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended June 30, 2022. Excludes restructuring costs at Acadian of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $0.6 million for the six months ended June 30, 2022. Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center and Affiliates of $2.0 million and costs associated with the transfer of an insurance policy from our former parent of $0.3 million for the three months ended June 30, 2021. Excludes income from discontinued operations attributable to controlling interests, as well as restructuring costs at the Center of $3.5 million, costs associated with the transfer of an insurance policy from our former parent of $0.6 million and the loss on sale of Affiliates of $1.3 million for the six months ended June 30, 2021.

(4)ENI revenue is the ENI measure which corresponds to U.S. GAAP revenue.

37

(5)Pre-tax economic net income is the ENI measure which corresponds to U.S. GAAP pre-tax income from continuing operations attributable to controlling interests.

(6)ENI operating margin is a non-GAAP efficiency measure, calculated based on ENI operating earnings divided by ENI revenue. ENI operating earnings is calculated as ENI revenue, less ENI operating expense, less ENI variable compensation. The ENI operating margin corresponds to our U.S. GAAP operating margin, excluding the effect of consolidated Funds.

(7)Economic net income is the ENI measure which is most directly comparable to U.S. GAAP net income from continuing operations attributable to controlling interests.

(8)Annualized revenue impact of net flows represents annualized management fees expected to be earned on new accounts and net assets contributed to existing accounts (inflows), less the annualized management fees lost on terminated accounts or net assets withdrawn from existing accounts (outflows), plus revenue impact from reinvested income and distribution. Annualized management fee for client flow is calculated by multiplying the annual gross fee rate for the relevant account by the net assets gained in the account in the event of a positive flow, excluding any current or future market appreciation or depreciation, or the net assets lost in the account in the event of an outflow, excluding any current or future market appreciation or depreciation. In addition, reinvested income and distribution for each segment is multiplied by average fee rate for the respective segment to compute the revenue impact. For a further discussion of the uses and limitations of the annualized revenue impact of net flows, see “Assets Under Management” herein.

Assets Under Management

The following table presents our assets under management as of each of the dates indicated: 

($ in billions)	June 30, 2022		December 31, 2021
Acadian Asset Management	$	90.5	$	117.2

Our strategies include:

i.Developed Markets equity, which includes Quant & Solutions U.S., global and international equities; and

ii.Emerging Markets equity, which includes Quant & Solutions equity investments in the emerging and frontier markets.

The following table presents our assets under management by strategy as of each of the dates indicated: 

($ in billions)	June 30, 2022		December 31, 2021
Developed Markets	69.5		89.3
Emerging Markets	21.0		27.9
Total assets under management	$	90.5	$	117.2

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The following table shows assets under management by client type as of each of the dates indicated:

($ in billions)	June 30, 2022				December 31, 2021
	AUM		% of total		AUM		% of total
Public/Government	$	37.5	41.4	%	$	52.6	44.9	%
Commingled Trust/UCITS	21.0		23.2	%	26.1		22.3	%
Corporate/Union	13.1		14.5	%	15.8		13.5	%
Sub-advisory	11.8		13.0	%	14.1		12.0	%
Endowment/Foundation	2.7		3.0	%	3.3		2.8	%
Mutual Fund	0.8		0.9	%	1.0		0.9	%
Other	3.6		4.0	%	4.3		3.6	%
Total assets under management	$	90.5			$	117.2

The following table shows assets under management by client location as of each of the dates indicated:

($ in billions)	June 30, 2022				December 31, 2021
	AUM		% of total		AUM		% of total
U.S.	$	60.9	67.3	%	$	77.1	65.8	%
Europe	15.9		17.6	%	20.1		17.2	%
Asia	2.9		3.2	%	5.5		4.7	%
Australia	5.2		5.7	%	5.9		5.0	%
Other	5.6		6.2	%	8.6		7.3	%
Total assets under management	$	90.5			$	117.2

AUM flows and the annualized revenue impact of net flows

Net client cash flows and revenue impact of net client cash flows for all periods include reinvested income and distributions, and exclude realizations. Reinvested income and distributions represent investment yield that is reinvested back into the portfolios as opposed to distributed as cash.

In the following table, we present our asset flows and market appreciation (depreciation) by segment. We also present a key metric used to better understand our asset flows, the annualized revenue impact of net client cash flows. Annualized revenue impact of net flows represents annualized management fees expected to be earned on new accounts and net assets contributed to existing accounts (inflows), less the annualized management fees lost on terminated accounts or net assets withdrawn from existing accounts (outflows), plus revenue impact from reinvested income and distributions. Annualized management fee for client flow is calculated by multiplying the annual gross fee rate for the relevant account with the inflow or the outflow, including our equity-accounted Affiliate. In addition, reinvested income and distributions for each segment is multiplied by average fee rate for the respective segment to compute the revenue impact.

The annualized revenue impact of net flows metric is designed to provide investors with a better indication of the potential financial impact of net client cash flows, however it has certain limitations. For instance, it does not include assumptions for the next twelve months' market appreciation or depreciation and investment performance associated with the assets gained or lost. Nor does it account for factors such as future client terminations or additional contributions or withdrawals over the next twelve months. Additionally, the basis points reported are fee rates based on the asset levels at the time of the transactions and do not consider the fact that client fee rates may change over the next twelve months.

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The following table summarizes our asset flows and market appreciation (depreciation) by segment for each of the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in billions, unless otherwise noted)	2022		2021		2022		2021
Quant & Solutions
Beginning balance	$	110.2	$	111.5	$	117.2	$	107.0
Gross inflows	2.5		2.7		6.0		4.9
Gross outflows	(6.3)		(4.7)		(12.9)		(11.1)
Reinvested income and distributions	1.0		0.7		1.9		1.3
Net flows	(2.8)		(1.3)		(5.0)		(4.9)
Market appreciation (depreciation)	(16.9)		7.6		(21.7)		14.6
Other	—		—		—		1.1
Ending balance	$	90.5	$	117.8	$	90.5	$	117.8
Average AUM(1)	$	100.8	$	115.9	$	105.5	$	112.8
Liquid Alpha
Beginning balance	$	—	$	—	$	—	$	3.2
Gross inflows	—		—		—		—
Gross outflows	—		—		—		—
Net flows	—		—		—		—
Market appreciation	—		—		—		—
Other(2)	—		—		—		(3.2)
Ending balance	$	—	$	—	$	—	$	—
Average AUM	$	—	$	—	$	—	$	—
Average AUM of consolidated Affiliates	$	—	$	—	$	—	$	—
Other(2)
Beginning balance	$	—	$	8.7	$	—	$	5.8
Gross inflows	—		0.5		—		0.7
Gross outflows	—		(0.1)		—		(0.2)
Net flows	—		0.4		—		0.5
Market appreciation	—		0.1		—		0.8
Other	—		(0.1)		—		2.0
Ending balance	$	—	$	9.1	$	—	$	9.1
Average AUM			$	9.0	$	—	$	8.6
Average AUM of consolidated Affiliates	$	—	$	4.7	$	—	$	4.7
Total
Beginning balance	$	110.2	$	120.2	$	117.2	$	116.0
Gross inflows	2.5		3.2		6.0		5.6
Gross outflows	(6.3)		(4.8)		(12.9)		(11.3)
Reinvested income and distributions	1.0		0.7		1.9		1.3
Net flows	(2.8)		(0.9)		(5.0)		(4.4)
Market appreciation (depreciation)	(16.9)		7.7		(21.7)		15.4
Other	—		(0.1)		—		(0.1)
Ending balance continuing operations	$	90.5	$	126.9	$	90.5	$	126.9
Discontinued operations(2)	$	—	$	24.6	—		24.6
Ending balance including discontinued operations	$	90.5	$	151.5	$	90.5	$	151.5
Average AUM	$	100.8	$	124.9	$	105.5	$	121.4
Average AUM of consolidated Affiliates	$	100.8	$	120.6	$	105.5	$	117.5
Annualized basis points: inflows	51.2		48.2		50.7		48.6
Annualized basis points: outflows	37.8		39.0		35.5		36.1
Annualized revenue impact of net flows ($ in millions)	$	(7.4)	$	(0.9)	$	(8.5)	$	(8.8)

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(1)Average AUM equals average AUM of consolidated Affiliates.

(2)Our reportable segments reflect the sales of Landmark Partners (“Landmark”) and Thompson, Siegel & Walmsley LLC (“TSW”) and the reclassification of their AUM, asset flows and market appreciation (depreciation) to discontinued operations. The Other category consists of our previously disposed affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021.

We also analyze our asset flows by client type and client location. Our client types include:

i.Sub-advisory, which includes assets managed for underlying mutual fund and variable insurance products which are sponsored by insurance companies and mutual fund platforms, where the end client is typically retail;

ii.Institutional, which includes assets managed for public/government pension funds, including U.S. state and local government funds and non-U.S. sovereign wealth, local government and national pension funds; also includes corporate and union-sponsored pension plans; and

iii.Retail/other, which includes assets managed for mutual funds sponsored by our Affiliates, defined contribution plans and accounts managed for high net worth clients.

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The following table summarizes our asset flows by client type for each of the periods indicated: 

($ in billions)	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Sub-advisory
Beginning balance	$	13.7	$	12.2	$	14.1	$	11.5
Gross inflows	0.3		1.4		0.8		1.9
Gross outflows	(0.5)		(0.8)		(0.9)		(1.3)
Reinvested income and distributions	0.1		0.1		0.2		0.1
Net flows	(0.1)		0.7		0.1		0.7
Market appreciation (depreciation)	(1.8)		0.7		(2.4)		1.4
Ending balance	$	11.8	$	13.6	$	11.8	$	13.6
Institutional
Beginning balance	$	91.3	$	100.4	$	97.8	$	97.8
Gross inflows	1.8		1.7		4.4		3.0
Gross outflows	(5.4)		(3.6)		(11.3)		(9.2)
Reinvested income and distributions	0.8		0.5		1.6		1.1
Net flows	(2.8)		(1.4)		(5.3)		(5.1)
Market appreciation (depreciation)	(14.2)		6.6		(18.2)		12.9
Other(1)	—		(0.1)		—		(0.1)
Ending balance	$	74.3	$	105.5	$	74.3	$	105.5
Retail/Other
Beginning balance	$	5.2	$	7.6	$	5.3	$	6.7
Gross inflows	0.4		0.1		0.8		0.7
Gross outflows	(0.4)		(0.4)		(0.7)		(0.8)
Reinvested income and distributions	0.1		0.1		0.1		0.1
Net flows	0.1		(0.2)		0.2		—
Market appreciation (depreciation)	(0.9)		0.4		(1.1)		1.1
Ending balance	$	4.4	$	7.8	$	4.4	$	7.8
Total
Beginning balance	$	110.2	$	120.2	$	117.2	$	116.0
Gross inflows	2.5		3.2		6.0		5.6
Gross outflows	(6.3)		(4.8)		(12.9)		(11.3)
Reinvested income and distributions	1.0		0.7		1.9		1.3
Net flows	(2.8)		(0.9)		(5.0)		(4.4)
Market appreciation (depreciation)	(16.9)		7.7		(21.7)		15.4
Other(1)	—		(0.1)		—		(0.1)
Ending balance continuing operations	90.5		126.9		90.5		126.9
Discontinued operations(2)	—		24.6		—		24.6
Ending balance including discontinued operations	$	90.5	$	151.5	$	90.5	$	151.5

(1)Other movements related to billable assets adjustment.

(2)Reflects the disposition of Landmark and TSW. As a result of the transactions, Landmark and TSW are reported within discontinued operations.

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Our categorization by client location includes:

i. U.S.-based clients, where the contracting client is based in the United States, and

ii. Non-U.S.-based clients, where the contracting client is based outside the United States.

The following table summarizes asset flows by client location for each of the periods indicated:

($ in billions)	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S.
Beginning balance	$	74.9	$	81.5	$	77.1	$	77.4
Gross inflows	0.9		1.6		3.3		3.3
Gross outflows	(3.8)		(3.0)		(6.1)		(6.7)
Reinvested income and distributions	0.7		0.5		1.3		0.9
Net flows	(2.2)		(0.9)		(1.5)		(2.5)
Market appreciation (depreciation)	(11.8)		5.3		(14.7)		11.0
Ending balance	$	60.9	$	85.9	$	60.9	$	85.9
Non-U.S.
Beginning balance	$	35.3	$	38.7	$	40.1	$	38.6
Gross inflows	1.6		1.6		2.7		2.3
Gross outflows	(2.5)		(1.8)		(6.8)		(4.6)
Reinvested income and distributions	0.3		0.2		0.6		0.4
Net flows	(0.6)		—		(3.5)		(1.9)
Market appreciation (depreciation)	(5.1)		2.4		(7.0)		4.4
Other(1)	—		(0.1)		—		(0.1)
Ending balance	$	29.6	$	41.0	$	29.6	$	41.0
Total
Beginning balance	$	110.2	$	120.2	$	117.2	$	116.0
Gross inflows	2.5		3.2		6.0		5.6
Gross outflows	(6.3)		(4.8)		(12.9)		(11.3)
Reinvested income and distributions	1.0		0.7		1.9		1.3
Net flows	(2.8)		(0.9)		(5.0)		(4.4)
Market appreciation (depreciation)	(16.9)		7.7		(21.7)		15.4
Other(1)	—		(0.1)		—		(0.1)
Ending balance continuing operations	90.5		126.9		90.5		126.9
Discontinued operations(2)	—		24.6		—		24.6
Adjusted ending balance including discontinued operations	$	90.5	$	151.5	$	90.5	$	151.5

(1)Other movements related to billable assets adjustment.

(2)Reflects the disposition of Landmark and TSW. As a result of the transactions, Landmark and TSW are reported within discontinued operations.

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At June 30, 2022, our total assets under management were $90.5 billion, a decrease of $(19.7) billion, or (17.9)%, compared to $110.2 billion at March 31, 2022 and a decrease of $(36.4) billion, or (28.7)%, compared to $126.9 billion at June 30, 2021. The decrease in assets under management compared to June 30, 2021 is a result of market depreciation and net outflows in the last twelve months, along with the dispositions of previous Affiliates, ICM and Campbell Global, that occurred in the three months ended September 30, 2021. The change in assets under management during the three months ended June 30, 2022 reflects net market depreciation of $(16.9) billion, and net outflows of $(2.8) billion. The change in assets under management during the six months ended June 30, 2022 reflects net market deprecation of $(21.7) billion, and net flows of $(5.0) billion. Market appreciation or depreciation reported in current and prior periods includes changes in equity prices, as well as the impact from exchange rate fluctuations on our foreign-denominated AUM. Given a substantial portion of our AUM is denominated in foreign currencies, foreign exchange rate movements in the second quarter of 2022 had a more pronounced negative impact on AUM, as a result of the strengthening of the U.S. dollar relative to other currencies in the current quarter.

For the three months ended June 30, 2022, our net flows were $(2.8) billion compared to $(2.2) billion for the three months ended March 31, 2022 and $(0.9) billion for the three months ended June 30, 2021. The change in net flows during the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was primarily due to tactical re-allocations by a few large clients. Reinvested income and distributions of $1.0 billion, $0.9 billion, and $0.7 billion are reflected in the net flows for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively. For the three months ended June 30, 2022, the annualized revenue impact of the net flows was $(7.4) million. This is compared to the annualized revenue impact of net flows of $(1.1) million for the three months ended March 31, 2022 and $(0.9) million for the three months ended June 30, 2021. Gross inflows of $2.5 billion during the three-month period yielded approximately 51 bps compared to $3.2 billion yielding approximately 48 bps in the year-ago period, and gross outflows in the same period of $(6.3) billion yielded approximately 38 bps compared to $(4.8) billion yielding approximately 39 bps in the year-ago period.

For the six months ended June 30, 2022, our net flows were $(5.0) billion compared to $(4.4) billion for the six months ended June 30, 2021. The change in net flows during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily driven by higher outflows related to asset rebalancing. Reinvested income and distributions of $1.9 billion and $1.3 billion are reflected in the net flows for the six months ended June 30, 2022 and June 30, 2021, respectively. For the six months ended June 30, 2022, the annualized revenue impact of the net flows was $(8.5) million compared to $(8.8) million for the six months ended June 30, 2021. Gross inflows of $6.0 billion in the six months ended June 30, 2022 yielded approximately 51 bps compared to $5.6 billion yielding approximately 49 bps in the year-ago period. Gross outflows of $(12.9) billion yielded approximately 36 bps in the six months ended June 30, 2022 compared to $(11.3) billion yielding approximately 36 bps in the year-ago period.

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U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2022 and 2021

Our U.S. GAAP results of operations were as follows for the three and six months ended June 30, 2022 and 2021: 

	Three Months Ended June 30,								Six Months Ended June 30,
($ in millions, unless otherwise noted)	2022			2021			Increase (Decrease)		2022			2021			Increase (Decrease)
U.S. GAAP Statement of Operations
Management fees	$	93.5		$	111.6		$	(18.1)	$	195.7		$	215.4		$	(19.7)
Performance fees	2.0			20.4			(18.4)		12.0			25.0			(13.0)
Other revenue	—			1.3			(1.3)		—			2.6			(2.6)
Total revenue	95.5			133.3			(37.8)		207.7			243.0			(35.3)
Compensation and benefits	27.0			73.4			(46.4)		73.8			126.0			(52.2)
General and administrative expense	16.5			18.0			(1.5)		33.4			37.1			(3.7)
Depreciation and amortization	5.3			5.8			(0.5)		10.6			11.3			(0.7)
Total operating expenses	48.8			97.2			(48.4)		117.8			174.4			(56.6)
Operating income	46.7			36.1			10.6		89.9			68.6			21.3
Investment income (loss)	(0.7)			4.7			(5.4)		(0.8)			7.3			(8.1)
Interest income	0.1			0.1			—		0.1			0.1			—
Interest expense	(4.8)			(6.3)			1.5		(11.3)			(12.5)			1.2
Loss on extinguishment of debt	—			—			—		(3.2)			—			(3.2)
Loss on sale of subsidiary	—			—			—		—			(1.3)			1.3
Income from continuing operations before taxes	41.3			34.6			6.7		74.7			62.2			12.5
Income tax expense	12.7			9.9			2.8		22.3			19.0			3.3
Income from continuing operations	28.6			24.7			3.9		52.4			43.2			9.2
Income from discontinued operations, net of tax	—			53.4			(53.4)		—			75.3			(75.3)
Gain (loss) on disposal of discontinued operations, net of tax	—			509.2			(509.2)		—			509.2			(509.2)
Net income	28.6			587.3			(558.7)		52.4			627.7			(575.3)
Net income (loss) attributable to non-controlling interests in consolidated Funds	—			54.6			(54.6)		—			68.0			(68.0)
Net income attributable to controlling interests	$	28.6		$	532.7		$	(504.1)	$	52.4		$	559.7		$	(507.3)
Basic earnings per share ($)	$	0.69		$	6.71		$	(6.02)	$	1.23		$	7.05		$	(5.82)
Diluted earnings per share ($)	0.67			6.42			(5.75)		1.19			6.77			(5.58)
Weighted average shares of common stock outstanding—basic	41.4			79.4			(38.0)		42.7			79.3			(36.6)
Weighted average shares of common stock outstanding—diluted	42.5			82.9			(40.4)		43.9			82.6			(38.7)
U.S. GAAP operating margin(1)	48.9		%	27.1		%			43.3		%	28.2		%

(1) The U.S. GAAP operating margin equals operating income from continuing operations divided by total revenue.

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The following table reconciles our net income attributable to controlling interests to our pre-tax income from continuing operations attributable to controlling interests: 

($ in millions)	Three Months Ended June 30,				Six Months Ended June 30,
U.S. GAAP Statement of Operations	2022		2021		2022		2021
Net income attributable to controlling interests	$	28.6	$	532.7	$	52.4	$	559.7
Exclude: (Income) on discontinued operations attributable to controlling interests, net of tax	—		(508.0)		—		(516.5)
Net income from continuing operations attributable to controlling interests	28.6		24.7		52.4		43.2
Add: Income tax expense	12.7		9.9		22.3		19.0
Pre-tax income from continuing operations attributable to controlling interests	$	41.3	$	34.6	$	74.7	$	62.2

U.S. GAAP Revenues

Our U.S. GAAP revenues principally consist of:

i.management fees earned based on our overall weighted average fee rate charged to our clients and the level of assets under management;

ii.performance fees earned when our Affiliates’ investment performance over agreed time periods for certain clients has differed from pre-determined hurdles; and

iii.other revenue, consisting primarily of consulting services as well as reimbursement of certain Fund expenses our Affiliates paid on behalf of our Funds.

Management Fees

Our management fees are a function of the fee rates our Affiliates charge to their clients, which are typically expressed in basis points, and the levels of our assets under management.

Excluding assets managed by our equity-accounted Affiliate, average basis points earned on average assets under management were 37.2 bps and 37.1 bps for the three and six months ended June 30, 2022, respectively, and 37.2 and 37.0 bps bps for the three and six months ended June 30, 2021, respectively. The overall weighted average fee rate increase for the three and six months ended June 30, 2022 is the result of changes in the mix of assets under management caused by market movements and client flows.

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Management fees decreased $(18.1) million, or (16.2)%, from $111.6 million for the three months ended June 30, 2021 to $93.5 million for the three months ended June 30, 2022. The decrease was primarily due to a decrease in average assets under management, as well as the disposition of Campbell Global. Average assets under management excluding our equity-accounted Affiliate decreased (16)%, from $120.6 billion for the three months ended June 30, 2021 to $100.8 billion for the three months ended June 30, 2022, mainly due to the negative market and net outflows over the past twelve months, as well as the disposition of Campbell Global in the second half of 2021.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Management fees decreased $(19.7) million, or (9.1)%, from $215.4 million for the six months ended June 30, 2021 to $195.7 million for the six months ended June 30, 2022. The decrease was primarily attributable to the equity market decline and net outflows over the past twelve months, as well as the disposition of Campbell Global. Average assets under management excluding equity-accounted Affiliate decreased (10)%, from $117.5 billion for the six months ended June 30, 2021 to $105.5 billion for the six months ended June 30, 2022, mainly due to the equity market decline and net outflows over the past twelve months, as well as the disposition of Campbell Global in the second half of 2021.

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Performance Fees

Approximately $12.0 billion, or 13% of our AUM in consolidated Affiliates, were in accounts with performance fee features in which we participate. Performance fees are typically shared with our Affiliate key employees through various contractual compensation and profit-sharing arrangements.

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Performance fees decreased $(18.4) million, from $20.4 million for the three months ended June 30, 2021 to $2.0 million for the three months ended June 30, 2022, primarily due to the disposition of Campbell Global, which contributed $15.3 million to Q2 2021 performance fees. Performance fees can be variable and are contractually triggered based on investment performance results over agreed upon time periods.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Performance fees decreased $(13.0) million, from $25.0 million for the six months ended June 30, 2021 to $12.0 million for the six months ended June 30, 2022, primarily due to the disposition of Campbell Global, which contributed $15.3 million to the first half of 2021 performance fees. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Other Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Other revenue decreased $(1.3) million, from $1.3 million for the three months ended June 30, 2021 to $0.0 million for the three months ended June 30, 2022. The decrease was attributable to the disposition of Campbell Global in August 2021.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Other revenue decreased $(2.6) million, from $2.6 million for the six months ended June 30, 2021 to $0.0 million for the six months ended June 30, 2022. The decrease was attributable to the disposition of Campbell Global in August 2021.

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U.S. GAAP Expenses

Our U.S. GAAP expenses principally consist of:

i.compensation paid to our investment professionals and other employees, including base salary, benefits, sales-based compensation, variable compensation, Affiliate distributions, and revaluation of key employee owned Affiliate equity and profit interests;

ii.general and administrative expenses; and

iii.depreciation and amortization charges.

Compensation and Benefits Expense

Our most significant category of expense is compensation and benefits awarded to our and our Affiliates’ employees. The following table presents the components of U.S. GAAP compensation expense for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Fixed compensation and benefits(1)	$	20.5	$	25.4	$	42.4	$	50.6
Sales-based compensation(2)	2.1		1.9		4.0		3.5
Variable compensation(3)	22.7		32.7		50.6		56.7
Affiliate key employee distributions(4)	0.5		3.2		2.4		4.5
Non-cash Affiliate key employee equity revaluations(5)	(18.8)		10.2		(25.6)		10.7
Total U.S. GAAP compensation and benefits expense	$	27.0	$	73.4	$	73.8	$	126.0

(1)Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided. For the three and six months ended June 30, 2022, $20.5 million and $42.4 million, respectively, of fixed compensation and benefits (of the $20.5 million and $42.4 million above) are included within economic net income. Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided. For the three and six months ended June 30, 2021, $24.2 million and $48.5 million, respectively, of fixed compensation and benefits (of the $25.4 million and $50.6 million above) are included within economic net income, which excludes Fund expenses initially paid by our Affiliates on the Fund’s behalf and subsequently reimbursed.

(2)Sales-based compensation is paid to our Affiliates’ sales and distribution teams and represents compensation earned by our sales professionals, paid over a multi-year period, related to revenue earned on new sales. Its variability is based upon the structure of sales-based compensation due on inflows of assets under management and market-based movement in both current and prior periods.

(3)Variable compensation is contractually set and calculated individually at each Affiliate, plus Center bonuses and compensation paid by our Affiliates on behalf of their Funds that are subsequently reimbursed. Variable compensation is awarded based on a contractual percentage of Affiliate ENI profits before variable compensation and may be paid in the form of cash or non-cash Affiliate equity or profit interests. In Affiliates with an agreed split of performance fees between Affiliate employees and BSUS, the Affiliates’ share of performance fees is allocated entirely to variable compensation. Center variable compensation includes cash and our equity. Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period.

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	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Cash variable compensation	$	20.3	$	31.3	$	45.6	$	54.3
Non-cash equity-based award amortization	2.4		1.4		5.0		2.4
Total variable compensation(a)	$	22.7	$	32.7	$	50.6	$	56.7

(a)For the three and six months ended June 30, 2022, $22.7 million and $50.6 million, respectively, of variable compensation expense (of the $22.7 million and $50.6 million above) are included within economic net income. For the three and six months ended June 30, 2021, $32.4 million and $55.9 million, respectively, of variable compensation expense (of the $32.7 million and $56.7 million above) are included within economic net income, which excludes $0.3 million and $0.8 million of variable compensation associated with restructuring at an Affiliate.

(4)Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests. The Affiliate key employee distribution ratio at each Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate. At certain Affiliates with tiered equity structures, BSUS and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold, the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages.

(5)Non-cash Affiliate key employee equity revaluations represent changes in the value of Affiliate equity and profit interests held by Affiliate key employees. These ownership interests may in certain circumstances be repurchased by BSUS at a value based on a pre-determined fixed multiple of twelve-month earnings and as such a liability is carried on our balance sheet based on the expected cash to be paid. However, any equity or profit interests repurchased by BSUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity. Our Affiliate equity and profit interest plans have been designed to ensure BSUS is not required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

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Fluctuations in compensation and benefits expense for the periods presented are discussed below.

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Compensation and benefits expense decreased $(46.4) million, or (63.2)%, from $73.4 million for the three months ended June 30, 2021 to $27.0 million for the three months ended June 30, 2022. Fixed compensation and benefits decreased $(4.9) million, or (19.3)%, from $25.4 million for the three months ended June 30, 2021 to $20.5 million for the three months ended June 30, 2022, primarily reflecting disposition of Affiliates. Variable compensation decreased $(10.0) million, or (30.6)%, from $32.7 million for the three months ended June 30, 2021 to $22.7 million for the three months ended June 30, 2022. The decrease was primarily attributable to the disposition of Campbell Global. Sales-based compensation increased $0.2 million, or 10.5%, from $1.9 million for the three months ended June 30, 2021 to $2.1 million for the three months ended June 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions decreased $(2.7) million, or (84.4)%, from $3.2 million for the three months ended June 30, 2021 to $0.5 million for the three months ended June 30, 2022 as a result of lower underlying operating earnings at the consolidated Affiliates. Revaluations of Affiliate equity decreased by $(29.0) million reflecting revaluations of key employee ownership interests at our consolidated Affiliates as the value of Affiliate equity increased $10.2 million for the three months ended June 30, 2021 and decreased $(18.8) million for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Compensation and benefits expense decreased $(52.2) million, or (41.4)%, from $126.0 million for the six months ended June 30, 2021 to $73.8 million for the six months ended June 30, 2022. Fixed compensation and benefits decreased $(8.2) million, or (16.2)%, from $50.6 million for the six months ended June 30, 2021 to $42.4 million for the six months ended June 30, 2022, primarily reflecting Affiliate dispositions. Variable compensation decreased $(6.1) million, or (10.8)%, from $56.7 million for the six months ended June 30, 2021 to $50.6 million for the six months ended June 30, 2022. The decrease was primarily attributable to the disposition of Campbell Global. Sales-based compensation increased $0.5 million, or 14.3%, from $3.5 million for the six months ended June 30, 2021 to $4.0 million for the six months ended June 30, 2022, as a result of the structure of sales-based compensation programs, driven by the timing of asset inflows which trigger sales-based compensation in both current and prior periods. Affiliate key employee distributions decreased $(2.1) million, or (46.7)%, from $4.5 million for the six months ended June 30, 2021 to $2.4 million for the six months ended June 30, 2022, primarily as a result of lower underlying operating earnings at the consolidated Affiliates. Revaluations of Affiliate equity decreased by $(36.3) million reflecting the change in value of key employee ownership interests at our consolidated Affiliates, as the value of Affiliate equity increased $10.7 million for the six months ended June 30, 2021 and decreased $(25.6) million for the six months ended June 30, 2022.

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General and Administrative Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021: General and administrative expense decreased $(1.5) million, or (8.3)%, from $18.0 million for the three months ended June 30, 2021 to $16.5 million for the three months ended June 30, 2022. The decrease was primarily due to the disposition of Affiliates.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: General and administrative expense decreased $(3.7) million, or (10.0)%, from $37.1 million for the six months ended June 30, 2021 to $33.4 million for the six months ended June 30, 2022. The decrease was primarily due to the disposition of Affiliates.

Depreciation and Amortization Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Depreciation and amortization expense decreased $(0.5) million, or (8.6)%, from $5.8 million for the three months ended June 30, 2021 to $5.3 million for the three months ended June 30, 2022. The decrease was primarily due to the disposition of Affiliates.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Depreciation and amortization expense decreased $(0.7) million, or (6.2)%, from $11.3 million for the six months ended June 30, 2021 to $10.6 million for the six months ended June 30, 2022. The decrease was primarily due to the disposition of Affiliates.

U.S. GAAP Other Non-Operating Items of Income and Expense

Other non-operating items of income and expense consist of:

i.investment income;

ii.interest expense;

iii.loss on extinguishment of debt; and

iv.loss on sale of subsidiary.

Investment Income

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Investment income decreased $(5.4) million, from $4.7 million for the three months ended June 30, 2021 to $(0.7) million for the three months ended June 30, 2022. The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Investment income decreased $(8.1) million, from $7.3 million for the six months ended June 30, 2021 to $(0.8) million for the six months ended June 30, 2022. The decrease was driven primarily by lower returns on seed capital investments due to the market decline in the six months ended June 30, 2022.

Interest Income

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Interest income remained flat at $0.1 million for the three months ended June 30, 2021 compared to $0.1 million for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Interest income remained flat at $0.1 million for the six months ended June 30, 2021 compared to $0.1 million for the three months ended June 30, 2022.

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Interest Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Interest expense decreased $(1.5) million, or (23.8)%, from $6.3 million for the three months ended June 30, 2021 to $4.8 million for the three months ended June 30, 2022, primarily reflecting a lower balance of third party borrowings following the redemption of our our 5.125% Senior Notes due August 1, 2031 in January 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Interest expense decreased $(1.2) million, or (9.6)%, from $12.5 million for the six months ended June 30, 2021 to $11.3 million for the six months ended June 30, 2022, primarily reflecting the lower balance of third party borrowings in 2022, slightly offset by $1.3 million of additional interest expense related to the amortization of the cash flow hedge associated with the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Loss on Extinguishment of Debt

Three months ended June 30, 2022 compared to three months ended June 30, 2021: There was no loss on extinguishment of debt in the three months ended June 30, 2021 or the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: There was no loss on extinguishment of debt in the six months ended June 30, 2021. Loss on extinguishment of debt was $(3.2) million for the six months ended June 30, 2022 as a result of the full redemption of the $125 million aggregate principal amount outstanding of our 5.125% Senior Notes due August 1, 2031 that we redeemed in January 2022.

Loss on Sale of Subsidiary

Three months ended June 30, 2022 compared to three months ended June 30, 2021: There was no loss on sale of subsidiary in the three months ended June 30, 2021 or the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Loss on sale of subsidiary was $(1.3) million for the six months ended June 30, 2021, representing the loss on disposition of a business unit during the six months ended June 30, 2021. There was no loss on sale of subsidiary in the three months ended June 30, 2022.

U.S. GAAP Income Tax Expense (Benefit)

Our effective tax rate has been impacted by changes in liabilities for uncertain tax positions, tax effects of stock-based compensation, limitations on executive compensation, the mix of income earned in the United States versus lower-taxed foreign jurisdictions. Our effective tax rate could be impacted in the future by these items as well as further changes in tax laws and regulations in jurisdictions in which we operate.

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Income tax expense increased $2.8 million, from $9.9 million for the three months ended June 30, 2021 to $12.7 million for the three months ended June 30, 2022. The increase in income tax expense primarily relates to an increase in income from continuing operations in the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Income tax expense increased $3.3 million, from $19.0 million for the six months ended June 30, 2021 to $22.3 million for the six months ended June 30, 2022. The increase in income tax expense primarily relates to an increase in income from continuing operations during the six months ended June 30, 2022.

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U.S. GAAP Consolidated Funds

As discussed further in Note 3 of our accompanying Consolidated Financial Statements, we sold our equity interests in Landmark on June 2, 2021, which resulted in the de-consolidation of all Landmark Funds as of June 2, 2021, the consummation of the sale. There were no consolidated Funds for the three and six months ended June 30, 2022. As previously noted, consolidated Landmark Funds are included in discontinued operations for the three and six months ended June 30, 2021.

Discontinued Operations

As discussed further in Note 3 of our accompanying Consolidated Financial Statements, we completed the sale of all our equity interests in TSW on July 19, 2021, and we completed the sale of all our equity interests in Landmark on June 2, 2021. As a result, Landmark and TSW are reported within discontinued operations for the three and six months ended June 30, 2021.

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Income from discontinued operations was $53.4 million for the three months ended June 30, 2021, representing the income from TSW and Landmark including consolidated Landmark Funds. There was no income from discontinued operations for the three months ended June 30, 2022. The gain on sale of discontinued operations was $509.2 million for the three months ended June 30, 2021, representing the gain on sale of Landmark. There was no gain on disposal of discontinued operations for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Income from discontinued operations was $75.3 million for the six months ended June 30, 2021, representing the net income from TSW and Landmark, including consolidated Landmark Funds. There was no income from discontinued operations for the six months ended June 30, 2022. The gain on sale of discontinued operations was $509.2 million for the six months ended June 30, 2021, representing the gain on sale of Landmark. There was no gain on disposal of discontinued operations for the six months ended June 30, 2022.

Key U.S. GAAP Operating Metrics

The following table shows our key U.S. GAAP operating metrics for the three and six months ended June 30, 2022 and 2021.

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	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	2022			2021			2022			2021
Numerator: Operating income	$	46.7		$	36.1		$	89.9		$	68.6
Denominator: Total revenue	$	95.5		$	133.3		$	207.7		$	243.0
U.S. GAAP operating margin	48.9		%	27.1		%	43.3		%	28.2		%
Numerator: Total operating expenses	$	48.8		$	97.2		$	117.8		$	174.4
Denominator: Management fee revenue	$	93.5		$	111.6		$	195.7		$	215.4
U.S. GAAP operating expense / management fee revenue	52.2		%	87.1		%	60.2		%	81.0		%
Numerator: Variable compensation	$	22.7		$	32.7		$	50.6		$	56.7
Denominator: Operating income before variable compensation and Affiliate key employee distributions(1)	$	69.9		$	72.0		$	142.9		$	129.8
U.S. GAAP variable compensation ratio	32.5		%	45.4		%	35.4		%	43.7		%
Numerator: Affiliate key employee distributions	$	0.5		$	3.2		$	2.4		$	4.5
Denominator: Operating income before Affiliate key employee distributions(1)	$	47.2		$	39.3		$	92.3		$	73.1
U.S. GAAP Affiliate key employee distributions ratio	1.1		%	8.1		%	2.6		%	6.2		%

(1)The following table identifies the components of operating income before variable compensation and Affiliate key employee distributions, as well as operating income before Affiliate key employee distributions:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Operating income	$	46.7	$	36.1	$	89.9	$	68.6
Affiliate key employee distributions	0.5		3.2		2.4		4.5
Operating income before Affiliate key employee distributions	47.2		39.3		92.3		73.1
Variable compensation	22.7		32.7		50.6		56.7
Operating income before variable compensation and Affiliate key employee distributions	$	69.9	$	72.0	$	142.9	$	129.8

Effects of Inflation

Our financial results may be impacted by changes in the total level of our assets under management. The value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. Declines in the values of these AUM could lead to reduced revenues as management fees are generally calculated based upon the size of AUM.

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Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis

As supplemental information, we provide a non-GAAP performance measure that we refer to as economic net income, or ENI, which represents our management’s view of the underlying economic earnings generated by us. We define economic net income as ENI revenue less (i) ENI operating expenses, (ii) variable compensation, (iii) key employee distributions, (iv) net interest and (v) taxes, each as further discussed in this section. ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP.

ENI is an important measure to investors because it is used by us to make resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet leverage, determine Affiliate variable compensation and equity distributions, and incentivize management. It is also an important measure because it assists management in evaluating our operating performance and is presented in a way that most closely reflects the key elements of our profit share operating model with our Affiliates. For a further discussion of how we use ENI and why ENI is useful to investors, see “—Overview—How We Measure Performance.”

To calculate economic net income, we re-categorize certain line items on our Condensed Consolidated Statements of Operations to reflect the following:

•We exclude the effect of Funds consolidation by removing the portion of Fund revenues, expenses and investment return which were not attributable to our stockholders.

•We include within management fee revenue any fees paid to Affiliates by consolidated Funds, which are viewed as investment income under U.S. GAAP.

•We include our share of earnings from our equity-accounted Affiliate within other income in ENI revenue, rather than investment income.

•We treat sales-based compensation as a general and administrative expense, rather than part of fixed compensation and benefits.

•We identify separately from operating expenses variable compensation and Affiliate key employee distributions, which represent Affiliate earnings shared with Affiliate key employees.

•We net the separate revenues and expenses under U.S. GAAP for certain Fund expenses initially paid by our Affiliates on the Funds’ behalf and subsequently reimbursed, to better reflect the economics of our business.

We also make the following adjustments to U.S. GAAP results to more closely reflect our economic results:

i.We exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees. These ownership interests may in certain circumstances be repurchased by BSUS at a value based on a pre-determined fixed multiple of trailing earnings and as such this value is carried on our balance sheet as a liability. Non-cash movements in the value of this liability are treated as compensation expense under U.S. GAAP. However, any equity or profit interests repurchased by BSUS can be used to fund a portion of future variable compensation awards, resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity. Our Affiliate equity and profit interest plans have been designed to ensure BSUS is never required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

ii.We exclude non-cash amortization or impairment expenses related to acquired goodwill and other intangibles as these are non-cash charges that do not result in an outflow of tangible economic benefits from the business.

iii.We exclude capital transaction costs, including the costs of raising debt or equity, gains or losses realized as a result of redeeming debt or equity and direct incremental costs associated with acquisitions of businesses or assets.

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iv.We exclude seed capital and co-investment gains, losses, and related financing costs. The net returns on these investments are considered and presented separately from ENI because ENI is primarily a measure of our earnings from managing client assets, which therefore differs from earnings generated by our investments in Affiliate products, which can be variable from period to period.

v.We include cash tax benefits associated with deductions allowed for acquired intangibles and goodwill that may not be recognized or have timing differences compared to U.S. GAAP.

vi.We exclude the results of discontinued operations attributable to controlling interests since they are not part of our ongoing business and restructuring costs incurred in continuing operations.

vii.We exclude deferred tax resulting from changes in tax law and expiration of statutes, adjustments for uncertain tax positions, deferred tax attributable to intangible assets and other unusual items not related to current operating results to reflect ENI tax normalization.

We also adjust our income tax expense to reflect any tax impact of our ENI adjustments.

Reconciliation of U.S. GAAP Net Income to Economic Net Income for the Three and Six Months Ended June 30, 2022 and 2021

The following table reconciles net income attributable to controlling interests to economic net income for the three and six months ended June 30, 2022 and 2021: 

		Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)		2022		2021		2022		2021
U.S. GAAP net income attributable to controlling interests		$	28.6	$	532.7	$	52.4	$	559.7
Adjustments to reflect the economic earnings of the Company:
i.	Non-cash key employee-owned equity and profit interest revaluations	(18.8)		10.3		(25.6)		10.7
ii.	Amortization of acquired intangible assets	—		—		—		—
iii.	Capital transaction costs	—		0.2		5.0		0.7
iv.	Seed/Co-investment (gains) losses and financings(1)	0.8		0.2		1.0		(3.7)
v.	Tax benefit of goodwill and acquired intangibles deductions	0.4		0.2		0.7		0.5
vi.	Discontinued operations attributable to controlling interests and restructuring(2)	0.3		(508.7)		0.7		(511.0)
vii.	ENI tax normalization	1.1		1.6		1.3		2.1
Tax effect of above adjustments, as applicable(3)		4.9		(3.6)		5.2		(3.6)
Economic net income		$	17.3	$	32.9	$	40.7	$	55.4

(1)The net return on seed/co-investment (gains) losses and financings for the three and six months ended June 30, 2022 and 2021 is shown in the following table:

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	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	2022			2021			2022			2021
Seed/Co-investment (gains) losses	$	0.7		$	(0.3)		$	0.8		$	(4.9)
Financing costs:
Seed/Co-investment average balance	4.2			25.8			4.3			42.1
Blended interest rate*	6.5		%	3.9		%	6.4		%	5.7		%
Financing costs	0.1			0.5			0.2			1.2
Net seed/co-investment (gains) losses and financing	$	0.8		$	0.2		$	1.0		$	(3.7)

* The blended rate is based first on the interest rate paid on our non-recourse seed capital facility up to the average amount drawn, and thereafter on the weighted average rate of the long-term debt.

(2)The three months ended June 30, 2022 includes restructuring costs associated with the transfer of an insurance policy from our former parent of $0.3 million. The three months ended June 30, 2021 includes income from discontinued operations attributable to controlling interests of $511.1 million, restructuring costs at the Center and Affiliate of $2.0 million, and costs associated with the transfer of an insurance policy from our former parent of of $0.3 million. The six months ended June 30, 2022 includes restructuring costs at the Affiliate of $0.1 million, and costs associated with the transfer of an insurance policy from our former parent of $0.6 million. The six months ended June 30, 2021 includes income from discontinued operations attributable to controlling interests of $516.5 million, restructuring costs at the Center of $3.5 million, costs associated with the transfer of an insurance policy from our former parent of $0.6 million, and the loss on sale of subsidiary of $1.3 million.

(3)Reflects the sum of lines (i), (ii), (iii), (iv) and the restructuring component of line (vi) multiplied by the 27.3% U.S. statutory tax rate (including state tax).

Limitations of Economic Net Income

Economic net income is the key measure our management uses to evaluate the financial performance of, and make operational decisions for, our business. Economic net income is not audited and is not a substitute for net income or other performance measures that are derived in accordance with U.S. GAAP. Furthermore, our calculation of economic net income may differ from similarly titled measures provided by other companies.

Because the calculation of economic net income excludes certain ongoing expenses, including amortization expense and certain compensation costs, it has certain material limitations and should not be viewed in isolation or as a substitute for U.S. GAAP measures of earnings.

    ENI Revenues

The following table reconciles U.S. GAAP revenue to ENI revenue for the three and six months ended June 30, 2022 and 2021: 

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP revenue	$	95.5	$	133.3	$	207.7	$	243.0
Include investment return on equity-accounted Affiliate	—		1.3		—		2.4
Exclude Fund expenses reimbursed by customers	—		(1.2)		—		(2.2)
ENI revenue	$	95.5	$	133.4	$	207.7	$	243.2

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The following table identifies the components of ENI revenue:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Management fees(1)	$	93.5	$	111.6	$	195.7	$	215.4
Performance fees(2)	2.0		20.4		12.0		25.0
Other income, including equity-accounted Affiliate(3)	—		1.4		—		2.8
ENI revenue	$	95.5	$	133.4	$	207.7	$	243.2

(1)ENI management fees correspond to U.S. GAAP management fees.

(2)ENI performance fees correspond to U.S. GAAP performance fees.

(3)ENI other income is comprised primarily of other revenue under U.S. GAAP, plus our earnings from our previously disposed equity-accounted Affiliate of $1.3 million and $2.4 million for the three and six months ended June 30, 2021, respectively. As further described in “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis,” ENI other income also excludes certain Fund expenses initially paid by our Affiliates on the Funds’ behalf and subsequently reimbursed.

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP other revenue	$	—	$	1.3	$	—	$	2.6
Earnings from equity-accounted Affiliate	—		1.3		—		2.4
Exclude Fund expenses reimbursed by customers	—		(1.2)		—		(2.2)
ENI other income	$	—	$	1.4	$	—	$	2.8

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    ENI Operating Expenses

The largest difference between U.S. GAAP operating expense and ENI operating expense relates to compensation. As shown in the following reconciliation, we exclude the impact of key employee equity revaluations. Variable compensation and Affiliate key employee distributions are also segregated out of U.S. GAAP operating expense in order to align with the manner in which these items are contractually calculated at the Affiliate level.

The following table reconciles U.S. GAAP operating expense to ENI operating expense for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP operating expense	$	48.8	$	97.2	$	117.8	$	174.4
Less: items excluded from economic net income
Non-cash key employee equity and profit interest revaluations	18.8		(10.3)		25.6		(10.7)
Capital transaction costs	—		—		—		(0.4)
Restructuring costs(1)	(0.3)		(2.3)		(0.7)		(4.1)
Fund expenses reimbursed by customers	—		(1.2)		—		(2.2)
Less: items segregated out of U.S. GAAP operating expense
Variable compensation	(22.7)		(32.4)		(50.6)		(55.9)
Affiliate key employee distributions	(0.5)		(3.2)		(2.4)		(4.5)
ENI operating expense	$	44.1	$	47.8	$	89.7	$	96.6

(1)The three months ended June 30, 2022 includes $0.3 million costs associated with the transfer of an insurance policy from our former parent. The three months ended June 30, 2021 includes $2.0 million of restructuring costs at the Center and Affiliate and $0.3 million costs associated with the transfer of an insurance policy from our former parent. The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate, and $0.6 million of costs associated with the transfer of an insurance policy from our former parent. The six months ended June 30, 2021 includes $3.5 million of restructuring costs at the Center and Affiliates and $0.6 million costs associated with the transfer of an insurance policy from our former parent.

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The following table identifies the components of ENI operating expense:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Fixed compensation & benefits(1)	$	20.5	$	24.2	$	42.4	$	48.5
General and administrative expenses(2)	18.3		17.8		36.7		36.8
Depreciation and amortization	5.3		5.8		10.6		11.3
ENI operating expense	$	44.1	$	47.8	$	89.7	$	96.6

(1)Fixed compensation and benefits include base salaries, payroll taxes and the cost of benefit programs provided. The following table reconciles U.S. GAAP compensation and benefits expense for the three and six months ended June 30, 2022 and 2021 to ENI fixed compensation and benefits expense:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Total U.S. GAAP compensation and benefits expense	$	27.0	$	73.4	$	73.8	$	126.0
Non-cash key employee equity and profit interest revaluations excluded from ENI	18.8		(10.3)		25.6		(10.7)
Sales-based compensation reclassified to ENI general & administrative expenses	(2.1)		(1.9)		(4.0)		(3.5)
Affiliate key employee distributions	(0.5)		(3.2)		(2.4)		(4.5)
Restructuring expenses	—		(0.2)		—		(0.7)
Variable compensation	(22.7)		(32.4)		(50.6)		(55.9)
Fund expenses reimbursed by customers	—		(1.2)		—		(2.2)
ENI fixed compensation and benefits	$	20.5	$	24.2	$	42.4	$	48.5

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(2)The following table reconciles U.S. GAAP general and administrative expense to ENI general and administrative expense:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP general and administrative expense	$	16.5	$	18.0	$	33.4	$	37.1
Sales-based compensation	2.1		1.9		4.0		3.5
Capital transaction costs	—		—		—		(0.4)
Restructuring costs	(0.3)		(2.1)		(0.7)		(3.4)
ENI general and administrative expense	$	18.3	$	17.8	$	36.7	$	36.8

Key Non-GAAP Operating Metrics

The following table shows our key non-GAAP operating metrics for the three and six months ended June 30, 2022 and 2021. We present these metrics because they are the measures our management uses to evaluate the profitability of our business and are useful to investors because they represent the key drivers and measures of economic performance within our business model. Please see the footnotes below for an explanation of each ratio, its usefulness in measuring the economics and operating performance of our business, and a reference to the most closely related U.S. GAAP measure:

	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	2022			2021			2022			2021
Numerator: ENI operating earnings(1)	$	28.7		$	53.2		$	67.4		$	90.7
Denominator: ENI revenue	$	95.5		$	133.4		$	207.7		$	243.2
ENI operating margin(2)	30.1		%	39.9		%	32.5		%	37.3		%
Numerator: ENI operating expense	$	44.1		$	47.8		$	89.7		$	96.6
Denominator: ENI management fee revenue(3)	$	93.5		$	111.6		$	195.7		$	215.4
ENI operating expense ratio(4)	47.2		%	42.8		%	45.8		%	44.8		%
Numerator: ENI variable compensation	$	22.7		$	32.4		$	50.6		$	55.9
Denominator: ENI earnings before variable compensation(1)(5)	$	51.4		$	85.6		$	118.0		$	146.6
ENI variable compensation ratio(6)	44.2		%	37.9		%	42.9		%	38.1		%
Numerator: Affiliate key employee distributions	$	0.5		$	3.2		$	2.4		$	4.5
Denominator: ENI operating earnings(1)	$	28.7		$	53.2		$	67.4		$	90.7
ENI Affiliate key employee distributions ratio(7)	1.7		%	6.0		%	3.6		%	5.0		%

(1)ENI operating earnings represents ENI earnings before Affiliate key employee distributions and is calculated as ENI revenue, less ENI operating expense, less ENI variable compensation. It differs from economic net income because it does not include the effects of Affiliate key employee distributions, net interest expense or income tax expense.

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The following table reconciles U.S. GAAP operating income to ENI operating earnings:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP operating income	$	46.7	$	36.1	$	89.9	$	68.6
Include earnings from equity-accounted Affiliate	—		1.3		—		2.4
Exclude the impact of:
Affiliate key employee-owned equity and profit interest revaluations	(18.8)		10.3		(25.6)		10.7
Capital transaction costs	—		—		—		0.4
Restructuring costs(a)	0.3		2.3		0.7		4.1
Affiliate key employee distributions	0.5		3.2		2.4		4.5
Variable compensation	22.7		32.4		50.6		55.9
ENI earnings before variable compensation	51.4		85.6		118.0		146.6
Less: ENI variable compensation	(22.7)		(32.4)		(50.6)		(55.9)
ENI operating earnings	28.7		53.2		67.4		90.7
Less: ENI Affiliate key employee distributions	(0.5)		(3.2)		(2.4)		(4.5)
ENI earnings after Affiliate key employee distributions	$	28.2	$	50.0	$	65.0	$	86.2

(a)The three months ended June 30, 2022 includes $0.3 million costs associated with the transfer of an insurance policy from our former parent. The three months ended June 30, 2021 includes $2.0 million of restructuring costs at the Center and Affiliates and $0.3 million of costs associated with the transfer of an insurance policy from our former parent. The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate and $0.6 million of costs associated with the transfer of an insurance policy from our former parent. The six months ended June 30, 2021 includes $3.5 million of restructuring costs at the Center and $0.6 million of costs associated with the transfer of an insurance policy from our former parent.

(2)The ENI operating margin, which is calculated before Affiliate key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business without regard to our various ownership levels at each of the Affiliates. The ENI operating margin is most comparable to our U.S. GAAP operating margin. Our U.S. GAAP operating margin, excluding the effect of consolidated Funds, is 48.9% for the three months ended June 30, 2022 and 27.1% for the three months ended June 30, 2021, 43.3% for the six months ended June 30, 2022, and 28.2% for the six months ended June 30, 2021.

The ENI operating margin is important because it gives investors an understanding of the profitability of the total business relative to revenue, irrespective of the ownership position which we have in each of our Affiliates. Management and investors use this ratio when comparing our profitability relative to our peer group and evaluating our ability to manage the cost structure and profitability of our business under different operating environments.

(3)ENI management fee revenue corresponds to U.S. GAAP management fee revenue.

(4)The ENI operating expense ratio is used by management and is useful to investors to evaluate the level of operating expense as measured against our recurring management fee revenue. We have provided this ratio since many operating expenses, including fixed compensation and benefits and general and administrative expense, are generally linked to the overall size of the business. We track this ratio as a key measure of scale economies because in our profit-sharing economic model, scale benefits both the Affiliate employees

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and our stockholders. The ENI operating expense ratio is most comparable to the U.S. GAAP operating expense / management fee revenue ratio.

(5)ENI earnings before variable compensation is calculated as ENI revenue, less ENI operating expense.

(6)The ENI variable compensation ratio is used by management and is useful to investors to evaluate consolidated variable compensation as measured against our ENI earnings before variable compensation. Variable compensation is contractually set and calculated individually at each Affiliate, plus Center bonuses. Variable compensation is usually awarded based on a contractual percentage of each Affiliate’s ENI earnings before variable compensation and may be paid in the form of cash or non-cash Affiliate equity or profit interests. Center variable compensation includes cash and our equity. Non-cash variable compensation awards typically vest over several years and are recognized as compensation expense over that service period. The variable compensation ratio at each Affiliate is calculated as variable compensation divided by ENI earnings before variable compensation. The ENI variable compensation ratio is most comparable to the U.S. GAAP variable compensation ratio.

(7)The ENI Affiliate key employee distribution ratio is used by management and is useful to investors to evaluate Affiliate key employee distributions as measured against our ENI operating earnings. Affiliate key employee distributions represent the share of Affiliate profits after variable compensation that is attributable to Affiliate key employee equity and profit interests holders, according to their ownership interests. The Affiliate key employee distribution ratio at each Affiliate is calculated as Affiliate key employee distributions divided by ENI operating earnings at that Affiliate. At certain Affiliates, with tiered equity structures, BSUS and other classes of employee equity holders are entitled to an initial proportionate preference over profits after variable compensation, structured such that before a preference threshold is reached, there would be no required key employee distributions to the tiered equity holders, whereas for profits above the threshold the key employee distribution amount to the tiered equity holders would be calculated based on the tiered key employee ownership percentages. The ENI Affiliate key employee distributions ratio is most comparable to the U.S. GAAP Affiliate key employee distributions ratio.

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Tax on Economic Net Income

The following table reconciles the United States statutory tax to tax on economic net income:

	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions)	2022			2021			2022			2021
Pre-tax economic net income(1)	$	23.6		$	44.6		$	55.8		$	75.4
Taxes at the U.S. federal and state statutory rates(2)	(6.4)			(12.2)			(15.2)			(20.6)
Other reconciling tax adjustments	0.1			0.5			0.1			0.6
Tax on economic net income	(6.3)			(11.7)			(15.1)			(20.0)
Economic net income	$	17.3		$	32.9		$	40.7		$	55.4
Economic net income effective tax rate(3)	26.7		%	26.2		%	27.1		%	26.5		%

(1)Includes interest income and third-party ENI interest expense, as shown in the following table:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
U.S. GAAP interest income	$	0.1	$	0.1	$	0.1	$	0.1
U.S. GAAP interest expense	(4.8)		(6.3)		(11.3)		(12.5)
U.S. GAAP net interest expense	(4.7)		(6.2)		(11.2)		(12.4)
Other ENI interest expense exclusions(a)	0.1		0.8		2.0		1.6
ENI net interest expense	(4.6)		(5.4)		(9.2)		(10.8)
ENI earnings after Affiliate key employee distributions(b)	28.2		50.0		65.0		86.2
Pre-tax economic net income	$	23.6	$	44.6	$	55.8	$	75.4

(a)Other ENI interest expense exclusions represent cost of financing on seed capital and co-investments and amortization of debt issuance costs.

(b)ENI earnings after Affiliate key employee distributions is calculated as ENI operating income (ENI revenue, less ENI operating expense, less ENI variable compensation), less Affiliate key employee distributions. Refer to “—Key Non-GAAP Operating Metrics” for a reconciliation from U.S. GAAP operating income (loss) to ENI earnings after Affiliate key employee distributions.

(2)Taxed at U.S. Federal and State statutory rate of 27.3%.

(3)The economic net income effective tax rate is calculated by dividing the tax on economic net income by pre-tax economic net income.

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    Segment Analysis

We operate our business through the following reportable segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies. This segment is comprised of our interest in Acadian.    

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021. The corporate head office expenses are not allocated to the Company’s business segment but the CODM does consider the cost structure of the corporate head office when evaluating the financial performance of our segment.

The primary measure used by the CODM in measuring performance and allocating resources to the segments is ENI. We define economic net income for the segments as ENI revenue less (i) ENI operating expenses, (ii) variable compensation and (iii) key employee distributions. The ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP.

ENI revenue includes management fees, performance fees and other revenue under U.S. GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and our share of earnings from our equity-accounted Affiliate. ENI revenue is also adjusted to exclude the separate revenues recorded under U.S. GAAP for certain Fund expenses reimbursed to our Affiliates.

ENI operating expenses include compensation and benefits, general and administrative expense, and depreciation and amortization under U.S. GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, impairment of goodwill, and the separate expenses recorded under U.S. GAAP for certain Fund expenses reimbursed to our Affiliates. Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

ENI segment results are also adjusted to exclude the portion of consolidated Funds’ revenues, expenses and investment return recorded under U.S. GAAP.

Refer to the reconciliations of U.S. GAAP revenue to ENI revenue, U.S. GAAP Operating expense to ENI Operating expense, variable compensation and Affiliate key employee distributions disclosed previously within this section.

    Segment ENI Revenue

The following table identifies the components of segment ENI revenue for the three months ended June 30, 2022 and 2021:

	Three Months Ended June 30,
($ in millions)	2022						2021
	Quant & Solutions		Other		Total		Quant & Solutions		Other		Total
Management fees	$	93.5	$	—	$	93.5	$	106.0	$	5.6	$	111.6
Performance fees	2.0		—		2.0		5.1		15.3		20.4
Other income, including equity-accounted affiliate	—		—		—		—		1.4		1.4
ENI revenue	$	95.5	$	—	$	95.5	$	111.1	$	22.3	$	133.4

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The following table identifies the components of segment ENI revenue for the six months ended June 30, 2022 and 2021:

	Six Months Ended June 30,
($ in millions)	2022				2021
	Quant & Solutions		Total		Quant & Solutions		Other		Total
Management fees	$	195.7	$	195.7	$	204.9	$	10.5	$	215.4
Performance fees	12.0		12.0		9.7		15.3		25.0
Other income, including equity-accounted affiliate	—		—		—		2.8		2.8
ENI revenue	$	207.7	$	207.7	$	214.6	$	28.6	$	243.2

Quant & Solutions Segment ENI Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Quant & Solutions ENI revenue decreased $(15.6) million, or (14.0)%, from $111.1 million for the three months ended June 30, 2021 to $95.5 million for the three months ended June 30, 2022. The decrease was mainly attributable to (11.8)% lower management fees driven by lower average AUM resulting from equity market decline and net outflows over the past twelve months.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Quant & Solutions ENI revenue decreased $(6.9) million, or (3.2)%, from $214.6 million for the six months ended June 30, 2021 to $207.7 million for the six months ended June 30, 2022. The decrease was attributable to (4.5)% lower management fees, driven by lower average AUM, partly offset by an increase in performance fees in the current period as a result of higher out-performance in certain non-U.S. strategies.

Other ENI Revenue

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Other ENI revenue was $22.3 million for the three months ended June 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM. The sales of Campbell Global and ICM were completed in 2021. There was no Other ENI revenue for the for the three months ended June 30, 2022.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Other ENI revenue was $28.6 million for the six months ended June 30, 2021 representing the revenue from our previously disposed Affiliates, Campbell Global and ICM. The sales of Campbell Global and ICM were completed in 2021. There was no Other ENI revenue for the six months ended June 30, 2022.

    Segment ENI Expense

The following table identifies the components of segment ENI expense for the three months ended June 30, 2022 and 2021:

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	Three Months Ended June 30,
($ in millions)	2022						2021
	Quant & Solutions		Other		Total		Quant & Solutions		Other		Total
Fixed compensation & benefits	$	18.6	$	1.9	$	20.5	$	19.1	$	5.1	$	24.2
General and administrative expense	15.9		2.4		18.3		13.8		4.0		17.8
Depreciation and amortization	5.2		0.1		5.3		5.4		0.4		5.8
Total ENI Operating Expenses	$	39.7	$	4.4	$	44.1	$	38.3	$	9.5	$	47.8
Variable compensation	21.7		1.0		22.7		22.0		10.4		32.4
Affiliate key employee distributions	0.5		—		0.5		3.1		0.1		3.2
Total Expenses	$	61.9	$	5.4	$	67.3	$	63.4	$	20.0	$	83.4

The following table identifies the components of segment ENI expense for the six months ended June 30, 2022 and 2021:

	Six Months Ended June 30,
($ in millions)	2022						2021
	Quant & Solutions		Other		Total		Quant & Solutions		Other		Total
Fixed compensation & benefits	$	38.4	$	4.0	$	42.4	$	37.7	$	10.8	$	48.5
General and administrative expense	32.0		4.7		36.7		29.1		7.7		36.8
Depreciation and amortization	10.4		0.2		10.6		10.6		0.7		11.3
Total ENI operating expenses	$	80.8	$	8.9	$	89.7	$	77.4	$	19.2	$	96.6
Variable compensation	48.0		2.6		50.6		44.6		11.3		55.9
Affiliate key employee distributions	2.4		—		2.4		4.6		(0.1)		4.5
Total expenses	$	131.2	$	11.5	$	142.7	$	126.6	$	30.4	$	157.0

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Quant & Solutions Segment ENI Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Quant & Solutions ENI operating expense increased $1.4 million, or 3.7%, from $38.3 million for the three months ended June 30, 2021 to $39.7 million for the three months ended June 30, 2022. The increase was driven by 15.2% higher ENI general and administrative expense resulting from higher travel and entertainment, portfolio administrative and system costs. This increase was partly offset by (2.6)% lower ENI fixed compensation and benefits expense resulting from lower payroll tax. Quant & Solutions ENI variable compensation expense, which is based on contractual arrangements, decreased (1.4)%, as a result of lower profit before variable compensation. Affiliate key employee distributions attributable to Quant & Solutions decreased (83.9)%, impacted by lower ENI earnings after variable compensation and the leveraged nature of the distribution share.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Quant & Solutions ENI operating expense increased $3.4 million, or 4.4%, from $77.4 million for the six months ended June 30, 2021 to $80.8 million for the six months ended June 30, 2022. The increase was driven by 1.9% higher ENI fixed compensation and benefits expense resulting from higher headcount and 10.0% higher ENI general and administrative expense primarily due to higher travel and entertainment, portfolio administrative and systems costs. Quant & Solutions ENI variable compensation expense, which is based on contractual arrangements, increased 7.6%, as a result of higher earnings before variable compensation and the contractual share of variable compensation earned on performance fees. Affiliate key employee distributions attributable to Quant & Solutions decreased (47.8)%, impacted by lower ENI earnings after variable compensation, and the leveraged nature of the distribution share.

Other ENI Expense

Three months ended June 30, 2022 compared to three months ended June 30, 2021: Other ENI operating expense decreased $(5.1) million, or (53.7)%, from $9.5 million for the three months ended June 30, 2021 to $4.4 million for the three months ended June 30, 2022. The decrease was driven by (62.7)% lower fixed compensation and benefit expense, and (40.0)% lower general and administrative expense resulting from disposition of Affiliates in 2021. Other ENI variable compensation expense decreased (90.4)% due to the disposition of Campbell Global.

Six months ended June 30, 2022 compared to six months ended June 30, 2021: Other ENI operating expense decreased $(10.3) million, or (53.6)%, from $19.2 million for the six months ended June 30, 2021 to $8.9 million for the six months ended June 30, 2022. The decrease was driven by (63.0)% lower fixed compensation and benefit expense and (39.0)% lower general and administrative expense resulting from disposition of Affiliates in 2021. Other ENI variable compensation expense decreased (77.0)% due to the disposition of Campbell Global.

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Capital Resources and Liquidity

    Cash Flows

The following table summarizes certain key financial data relating to cash flows. All amounts presented exclude consolidated Funds: 

	Six Months Ended June 30,
($ in millions)	2022		2021
Cash provided by (used in)(1)
Operating activities	$	29.9	$	47.0
Investing activities	(6.4)		712.2
Financing activities	(183.4)		50.5

(1)Cash flow data shown only includes cash flows from continuing operations.

Comparison for the six months ended June 30, 2022 and 2021

Net cash from operating activities from continuing operations decreased $(17.1) million, from net cash provided of $47.0 million for the six months ended June 30, 2021 to net cash provided of $29.9 million for the six months ended June 30, 2022, driven by the disposition of Affiliates in 2021, as well as changes in net income offset by changes in operating assets and liabilities period over period. In the six months ended June 30, 2022, net cash from investing activities of continuing operations decreased $(718.6) million, from $712.2 million provided in the six months ended June 30, 2021 to $6.4 million used in the six months ended June 30, 2022, driven by proceeds from the sale of Landmark in the six months ended June 30, 2021. Net cash from financing activities from continuing operations decreased $233.9 million, from $50.5 million provided in the six months ended June 30, 2021 to $183.4 million used in the six months ended June 30, 2022, primarily due to the repayment of third party borrowings and the revolving credit facility, as well as higher share repurchases in the six months ended June 30, 2022.

    Supplemental Liquidity Measure — Adjusted EBITDA

As supplemental information, we provide information regarding Adjusted EBITDA, which we define as economic net income before net interest, income taxes, depreciation, and amortization. Adjusted EBITDA is a non-GAAP liquidity measure that we provide in addition to, but not as a substitute for, cash flows from operating activities. It should be noted that our calculation of Adjusted EBITDA may not be consistent with Adjusted EBITDA as calculated by other companies. We believe Adjusted EBITDA is a useful liquidity metric because it indicates our ability to make further investments in our business, service debt and meet working capital requirements.

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The following table reconciles our U.S. GAAP net income attributable to controlling interests to EBITDA to Adjusted EBITDA to economic net income for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	2022		2021		2022		2021
Net income attributable to controlling interests	$	28.6	$	532.7	$	52.4	$	559.7
Net interest expense to third parties	4.7		6.2		11.2		12.4
Income tax expense (including tax expenses related to discontinued operations)	12.7		187.7		22.3		199.4
Depreciation and amortization (including intangible assets and discontinued operations) and goodwill impairment	5.2		7.0		10.6		14.5
EBITDA	$	51.2	$	733.6	$	96.5	$	786.0
Non-cash compensation costs, including revaluation of Affiliate key employee-owned equity and profit interests	(18.3)		10.8		(24.2)		11.6
EBITDA of discontinued operations attributable to controlling interests	—		(690.0)		—		(700.0)
(Gain) loss on seed and co-investments	0.7		(0.3)		0.8		(4.9)
Restructuring expenses(1)	0.4		2.2		0.7		5.3
Capital transaction costs	—		—		3.2		0.4
Adjusted EBITDA	$	34.0	$	56.3	$	77.0	$	98.4
ENI net interest expense to third parties	(4.6)		(5.4)		(9.2)		(10.8)
Depreciation and amortization(2)	(5.8)		(6.3)		(12.0)		(12.2)
Tax on economic net income	(6.3)		(11.7)		(15.1)		(20.0)
Economic net income	$	17.3	$	32.9	$	40.7	$	55.4

(1)The three months ended June 30, 2022 includes $0.3 million of costs associated with the transfer of an insurance policy from our former parent. The six months ended June 30, 2022 includes $0.1 million of restructuring costs at the Affiliate, $0.6 million of costs associated with the transfer of an insurance policy from our former parent. The three months ended June 30, 2021 includes $2.0 million of restructuring costs and costs associated with the transfer of an insurance policy from our former parent of $0.3 million. The six months ended June 30, 2021 includes $3.5 million of restructuring costs and costs associated with the transfer of an insurance policy from our former parent of $0.6 million, and the loss on sale of subsidiary of $1.3 million.

(2)Includes non-cash equity-based award amortization expense.

Limitations of Adjusted EBITDA

As a non-GAAP, unaudited liquidity measure and derivation of EBITDA, Adjusted EBITDA has certain material limitations. It does not include cash costs associated with capital transactions and excludes certain U.S. GAAP expenses that fall outside the definition of EBITDA. Each of these categories of expense represents costs to us of doing business, and therefore any measure that excludes any or all of these categories of expense has material limitations.

    Future Capital Needs

We believe that our available cash and cash equivalents to be generated from operations, supplemented by short-term and long-term financing, as necessary, will be sufficient to fund current operations and capital requirements for at least the next twelve months, as well as our day-to-day operations and future investment requirements. Our ability to secure short-term and long-term financing in the future will depend on several factors, including our future profitability, our relative levels of debt and equity and the overall condition of the credit markets.

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    Borrowings and Long-Term Debt

The following table summarizes our financing arrangements as of the dates indicated: 

($ in millions)	June 30, 2022		December 31, 2021		Interest rate	Maturity
Revolving credit facility:
Revolving credit facility	$	50.0	$	—	Variable rate	March 7, 2025
Total revolving credit facility	$	50.0	$	—
Third party borrowings:
4.80% Senior Notes Due 2026	$	273.3	$	273.1	4.80%	July 27, 2026
5.125% Senior Notes Due 2031(1)	—		121.8		5.125%	August 1, 2031
Total third party borrowings	$	273.3	$	394.9

(1)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded $3.2 million of loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022.

Revolving Credit Facility

On March 7, 2022, the Company, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (“Acadian Credit Agreement”), which replaced the Company’s revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”). The maturity date of the Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10% (“Adjusted Term SOFR”) plus 1%, plus, in each case an additional amount ranging from 0.5% to 1.0%, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR plus an additional amount ranging from 1.5% to 2.0%, with such additional amount based on Acadian’s Leverage Ratio. In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian’s Leverage Ratio.

Under the Acadian Credit Agreement, the ratio of Acadian’s third-party borrowings to Acadian’s trailing twelve months Adjusted EBITDA, as defined by the Acadian Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the ratio of Acadian’s trailing twelve months Adjusted EBITDA to Acadian’s interest expense (the “Interest Coverage Ratio”) must be not less than 4.0x. At June 30, 2022, Acadian’s Leverage Ratio was 0.2x and Acadian’s Interest Coverage Ratio was 220.5x.

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Other Compensation Liabilities

Other compensation liabilities principally consist of cash-settled Affiliate equity and profit interests liabilities held by certain Affiliate key employees, and voluntary deferred compensation plans. The following table summarizes our other long-term liabilities:

	June 30, 2022		December 31, 2021
($ in millions)
Share-based payments liability	$	19.0	$	28.1
Affiliate profit interests liability	14.7		30.6
Employee equity	33.7		58.7
Voluntary deferral plan liability	40.7		45.0
Total	$	74.4	$	103.7

Share-based payments liability represents the value of Affiliate key employee-owned equity that may under certain circumstances be repurchased by us that is considered an equity award under U.S. GAAP based on the terms and conditions attached to these interests. Affiliate profit interests liability represents the value of Affiliate key employee-owned equity that may under certain circumstances be repurchased by us that is not considered an equity award under U.S. GAAP, but rather a form of compensation arrangement, based on the terms and conditions attached to these interests. Our obligation in any given period in respect of funding these potential repurchases of Affiliate equity is limited to only that portion that may be put to us by Affiliate key employees, which is typically capped annually under the terms of these arrangements such that we are not required to repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Affiliate key employees.

Certain of our and our Affiliates’ key employees are eligible to participate in our voluntary deferral plan, or VDP, which provides our senior personnel the opportunity to voluntarily defer a portion of their compensation. There is a voluntary deferral plan investment balance included in investments on the Consolidated Balance Sheets that corresponds to this deferral liability.

Critical Accounting Policies and Estimates

There have been no significant changes to the critical accounting policies and estimates disclosed in our most recent Form 10-K for the year ended December 31, 2021. Critical accounting policies and estimates are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

    Recent Accounting Developments

See discussion of Recent Accounting Developments in Note 2 of the accompanying Condensed Consolidated Financial Statements.

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Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements, including anticipated revenues, margins, cash flows or earnings, anticipated future performance of our business and our Affiliate, our expected future net cash flows, our anticipated expense levels, capital management, expected impact of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows, and/or expectations regarding market conditions. The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “can be,” “may be,” “aim to,” “may affect,” “may depend,” “intends,” “expects,” “believes,” “estimate,” “project,” and other similar expressions are intended to identify such forward-looking statements. Such statements are subject to various known and unknown risks and uncertainties and we caution readers that any forward-looking information provided by or on behalf of us is not a guarantee of future performance.

Actual results may differ materially from those in forward-looking information as a result of various factors, some of which are beyond our control, including but not limited to those discussed above and elsewhere in this Quarterly Report on Form 10-Q, in our most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 28, 2022, and subsequent SEC filings. Due to such risks and uncertainties and other factors, we caution each person receiving such forward-looking information not to place undue reliance on such statements. Further, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligations to update any forward looking statement to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.

73

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

Our exposure to market risk is directly related to our role as an asset manager. Substantially all of our investment management revenues are derived from our agreements with our clients. Under these agreements, the revenues we receive are based on the value of our assets under management or the investment performance on client accounts for which we earn performance fees. Accordingly, our revenues and net income may decline as a result of our assets under management decreasing due to depreciation of our investment portfolios. In addition, such depreciation could cause our clients to withdraw their funds in favor of investments offering higher returns or lower risk, which would cause our revenues and net income to decline further.

Our model for assessing the impact of market risk on our results uses June 30, 2022 ending AUM and management fee rates as the basis for management fee revenue calculations. With respect to performance fee revenue, we assume that relative investment performance is the same as in the past four quarters ended June 30, 2022. Therefore, market-driven changes in performance fees, which are typically based on relative performance versus market indices, reflect changes in the underlying AUM used in the calculation rather than differences in relative performance as a result of a changed market environment. The impact that market changes have on performance fee eligible accounts varies due to high-water marks and other measurement hurdles which are not factored in this analysis. Changes in performance fees revenues could be significant in each period. The basis for the analysis is performance fees earned for the twelve months ended June 30, 2022.

Our profit sharing economic structure results in a sharing of market risk between us and our employees. Approximately 40% of our ENI cost structure is variable, representing variable compensation and Acadian key employee distributions. These variable expenses generally are linked in a formulaic manner to the profitability of the business after covering operating expenses, which include base compensation and benefits, general and administrative expenses, and depreciation and amortization. In modeling the impact of market risk, we assume that these operating expenses remain unchanged, but the resulting impact on profit driven by increases or decreases in revenue will change variable compensation and Affiliate key employee distributions in line with their formulaic calculations. Any change in pre-tax profit is tax-affected at our statutory combined state and federal rate of approximately 27.3% to calculate profit after tax.

The value of our assets under management was $90.5 billion as of June 30, 2022. A 10% increase or decrease in the value of our assets under management, if proportionally distributed over all of our investment strategies, asset classes and client relationships, would cause an annualized increase or decrease in our gross management fee revenues of approximately $33.7 million based on our current weighted average fee rate of approximately 37 basis points. Approximately $12.0 billion, or 13%, of our AUM, are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees, or management fee adjustments, are calculated based on investment return that differs from the relative benchmark returns. Assuming the market change does not impact our relative performance, a 10% increase or decrease in AUM would have a $7.1 million impact to our gross performance fees based on our trailing twelve month performance fees of $71.0 million from Quant & Solutions segment as of June 30, 2022. The combined impact on our management fees and performance fees would have a direct impact on our earnings and result in an annual change of approximately $15.0 million in our post-tax economic net income, given our current cost structure and operating model.

Equity market risk, interest rate risk, and foreign currency risk are the market risks that could have the greatest impact on our management fees, performance fees and our business profitability. Impacts on our management and performance fees can be calculated based on the percentage of AUM constituting equity investments or foreign currency denominated investments, respectively, multiplied by the relevant weighted average management fee and performance fee attributable to that asset class.

•Our equity markets-based AUM includes U.S. equities (including small cap through large cap securities and substantially value or blended investment styles) and global/non-U.S. equities (including global, non-U.S. and emerging markets securities). A 10% increase or decrease in equity markets would cause our $88.2 billion of

74

equity assets under management to increase or decrease by $8.8 billion, resulting in a change in annualized management fee revenue of $32.9 million and an annual change in post-tax economic net income of approximately $12.8 million, given our current cost structure, operating model, and weighted average fee rate of 37 basis points at the mix of strategies as of June 30, 2022. Approximately $10.4 billion, or 12%, of our equity markets-based AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees are calculated based on investment return in excess of the relative benchmark returns. Assuming the market change does not impact our relative performance, a 10% change in equity markets would have an approximate incremental $1.9 million impact from performance fees on our post-tax economic net income, given our current cost structure and operating model.

•Foreign currency AUM includes equity and alternative assets denominated in foreign currencies. A 10% increase or decrease in foreign exchange rates against the U.S. dollar would cause our $72.0 billion of foreign currency denominated AUM to increase or decrease by $7.2 billion, resulting in a change in annualized management fee revenue of $28.6 million and an annual change in post-tax economic net income of $11.0 million, based on weighted average fees earned on our foreign currency denominated AUM of 40 basis points at the mix of strategies as of June 30, 2022. Approximately $10.5 billion, or 15%, of our foreign currency denominated AUM are in accounts subject to performance fees. Of these assets, the majority are in accounts for which performance fees, or management fee adjustments, are calculated based on investment return that differs from the relative benchmark returns. Assuming the market change does not impact our relative performance, a 10% change in foreign currency exchange rates would have an approximate incremental $1.5 million impact from performance fees on our post-tax economic net income, given our current cost structure and operating model.

While the analysis above assumes that market changes occur in a uniform manner across the relevant portfolio, because of our declining fee rates for larger relationships and differences in our fee rates across asset classes, a change in the composition of our assets under management, in particular an increase in the proportion of our total assets under management attributable to strategies, clients or relationships with lower effective fee rates, could have a material negative impact on our overall weighted average fee rate.

As is customary in the asset management industry, clients invest in particular strategies to gain exposure to certain asset classes, which exposes their investment to the benefits and risks of such asset classes. We have not adopted a corporate-level risk management policy regarding client assets, nor have we attempted to hedge at the corporate level or within individual strategies the market risks that would affect the value of our overall assets under management and related revenues. Any reduction in the value of our assets under management would result in a reduction in our revenues.

Interest Rate Risk

We are exposed to interest rate risks primarily through borrowings under the Acadian credit facility. Interest on borrowings under the Acadian credit facility is based upon variable interest rates. Borrowings under the credit facility were $50.0 million as of June 30, 2022. We currently do not hedge against interest rate risk. As of June 30, 2022, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the six months ended June 30, 2022.

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Item 4.  Controls and Procedures.

Controls and Procedures

Our management, including our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at June 30, 2022. Based on this evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures are effective.

Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1.         Legal Proceedings.

From time to time, we and our Affiliates may be parties to various claims, suits, and complaints in the ordinary course of our business. Although the amount of liability that may result from these matters cannot be ascertained, we do not currently believe that, in the aggregate, they will result in liabilities material to our consolidated financial condition, future results of operations or cash flow.

Item 1A.  Risk Factors.

There have been no material changes in the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Item 6.         Exhibits.

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of BrightSphere Investment Group Inc., adopted as of July 12, 2019, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K12B filed on July 15, 2019.
3.2	Amended and Restated Bylaws of BrightSphere Investment Group Inc., adopted as of July 12, 2019, incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K12B filed on July 15, 2019.
4.1	Description of Registrant’s Securities, incorporated herein by reference to Exhibit 4.9 to the Annual Report on Form 10-K filed on March 2, 2020.
31.1*	Certification of the Company’s principal executive officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Company’s principal financial officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Company’s principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Company’s principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, (ii) the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021, (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021, (iv) the Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021, (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021, and (vi) the Notes to Financial Statements.
104*	The cover page of this Quarterly Report on Form 10-Q, formatted in Inline eXtensible Business Reporting Language

* Filed herewith

** Furnished herewith

77

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BrightSphere Investment Group Inc.
Dated:	August 5, 2022
		By:	/s/ Suren Rana
			Suren Rana President and Chief Executive Officer (principal executive officer)
			/s/ Christina Wiater
			Christina Wiater Senior Vice President and Principal Financial Officer (principal financial officer and principal accounting officer)

78

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Suren Rana, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of BrightSphere Investment Group Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2022

/s/ Suren Rana

Suren Rana

President and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christina Wiater, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of BrightSphere Investment Group Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2022

/s/ Christina Wiater

Christina Wiater

Senior Vice President and Principal Financial Officer

(principal financial officer and principal accounting officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Suren Rana, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of BrightSphere Investment Group Inc. for the quarterly period ended June 30, 2022 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents in all material respects the financial condition and results of operations of BrightSphere Investment Group Inc. for the periods covered by the Report. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the Report. A signed original of this statement has been provided to BrightSphere Investment Group Inc. and will be retained by BrightSphere Investment Group Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	August 5, 2022	/s/ Suren Rana
		Name: Suren Rana
		Title: President and Chief Executive Officer
		(principal executive officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Christina Wiater, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of BrightSphere Investment Group Inc. for the quarterly period ended June 30, 2022 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents in all material respects the financial condition and results of operations of BrightSphere Investment Group Inc. for the periods covered by the Report. The foregoing certification is being furnished to the Securities and Exchange Commission as part of the Report. A signed original of this statement has been provided to BrightSphere Investment Group Inc. and will be retained by BrightSphere Investment Group Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	August 5, 2022	/s/ Christina Wiater
		Name: Christina Wiater
		Title: Senior Vice President and Principal Financial Officer
		(principal financial officer and principal accounting officer)

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Aug. 03, 2022
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-38979
Entity Registrant Name	BRIGHTSPHEREInvestment Group Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1121020
Entity Address, Address Line One	200 Clarendon Street, 53rd Floor
Entity Address, City or Town	Boston,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02116
City Area Code	617
Local Phone Number	369-7300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,433,855
Entity Central Index Key	0001748824
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	BSIG
Security Exchange Name	NYSE
4.800% Notes due 2026
Entity Information [Line Items]
Title of 12(b) Security	4.800% Notes due 2026
Trading Symbol	BSIG 26
Security Exchange Name	NYSE

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Assets
Cash and cash equivalents	$ 92.2	$ 252.1
Investment advisory fees receivable	98.9	167.1
Income taxes receivable	15.0	4.9
Fixed assets, net	47.8	50.2
Right of use assets	63.1	65.1
Investments	49.1	54.5
Goodwill	20.3	20.3
Other assets	27.3	28.2
Deferred tax assets	64.6	72.4
Total assets	478.3	714.8
Liabilities and stockholders’ equity
Accounts payable and accrued expenses	24.4	35.2
Accrued incentive compensation	47.1	117.4
Other compensation liabilities	74.4	103.7
Accrued income taxes	2.8	1.1
Operating lease liabilities	76.1	77.6
Other liabilities	1.2	2.5
Debt:
Revolving credit facility	50.0	0.0
Third party borrowings	273.3	394.9
Total liabilities	549.3	732.4
Commitments and contingencies
Equity:
Common stock (par value $0.001; 41,433,855 and 45,397,260 shares, respectively, issued)	0.0	0.0
Additional paid-in capital	0.5	0.0
Retained deficit	(59.8)	(6.8)
Accumulated other comprehensive loss	(11.7)	(10.8)
Total equity	(71.0)	(17.6)
Total liabilities and equity	$ 478.3	$ 714.8

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, issued (in shares)	41,433,855	45,397,260

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue:
Other revenue	$ 0.0	$ 1.3	$ 0.0	$ 2.6
Total revenue	95.5	133.3	207.7	243.0
Operating expenses:
Compensation and benefits	27.0	73.4	73.8	126.0
General and administrative expense	16.5	18.0	33.4	37.1
Depreciation and amortization	5.3	5.8	10.6	11.3
Amortization of acquired intangibles	0.0	0.0	0.0	0.0
Total operating expenses	48.8	97.2	117.8	174.4
Operating income	46.7	36.1	89.9	68.6
Non-operating income and (expense):
Investment income (loss)	(0.7)	4.7	(0.8)	7.3
Interest income	0.1	0.1	0.1	0.1
Interest expense	(4.8)	(6.3)	(11.3)	(12.5)
Loss on extinguishment of debt	0.0	0.0	(3.2)	0.0
Loss on sale of subsidiary	0.0	0.0	0.0	(1.3)
Total non-operating income (loss)	(5.4)	(1.5)	(15.2)	(6.4)
Income from continuing operations before taxes	41.3	34.6	74.7	62.2
Income tax expense	12.7	9.9	22.3	19.0
Income from continuing operations	28.6	24.7	52.4	43.2
Income from discontinued operations, net of tax	0.0	53.4	0.0	75.3
Gain on disposal of discontinued operations, net of tax	0.0	509.2	0.0	509.2
Net income	28.6	587.3	52.4	627.7
Net income attributable to non-controlling interests in consolidated Funds	0.0	54.6	0.0	68.0
Net income attributable to controlling interests	$ 28.6	$ 532.7	$ 52.4	$ 559.7
Earnings per share (basic) attributable to controlling interests (in dollars per share)	$ 0.69	$ 6.71	$ 1.23	$ 7.05
Earnings per share (diluted) attributable to controlling interests (in dollars per share)	0.67	6.42	1.19	6.77
Continuing operations earnings per share (basic) attributable to controlling interests (in dollars per share)	0.69	0.31	1.23	0.54
Continuing operations earnings per share (diluted) attributable to controlling interests (in dollars per share)	$ 0.67	$ 0.29	$ 1.19	$ 0.52
Weighted average common stock outstanding (in shares)	41,425,555	79,351,567	42,690,683	79,335,650
Weighted average diluted common stock outstanding (in shares)	42,518,125	82,926,124	43,915,806	82,623,485
Management fees
Revenue:
Revenue	$ 93.5	$ 111.6	$ 195.7	$ 215.4
Performance fees
Revenue:
Revenue	$ 2.0	$ 20.4	$ 12.0	$ 25.0

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 28.6	$ 587.3	$ 52.4	$ 627.7
Other comprehensive income (loss):
Amortization related to derivative securities, net of tax	0.6	0.6	2.2	1.2
Foreign currency translation adjustment	(2.4)	0.1	(3.1)	1.2
Total other comprehensive income (loss)	(1.8)	0.7	(0.9)	2.4
Comprehensive income attributable to non-controlling interests in consolidated Funds	0.0	54.6	0.0	68.0
Total comprehensive income attributable to controlling interests	$ 26.8	$ 533.4	$ 51.5	$ 562.1

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Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Retained earnings (deficit)	Total stockholders’ equity	Non- controlling interests	Consolidated Entity Excluding Consolidated Funds Common Stock	Consolidated Entity Excluding Consolidated Funds Additional paid-in capital	Consolidated Entity Excluding Consolidated Funds Retained earnings (deficit)	Consolidated Entity Excluding Consolidated Funds Accumulated other comprehensive income (loss)	Consolidated Entity Excluding Consolidated Funds Total stockholders’ equity	Consolidated Entity Excluding Consolidated Funds Non- controlling interests	Consolidated Funds Non- controlling interests
Beginning balance (in shares) at Dec. 31, 2020					79.4
Beginning balance at Dec. 31, 2020	$ 384.4				$ 0.1	$ 492.4	$ (176.5)	$ (13.6)	$ 302.4	$ 1.7	$ 80.3
Increase (Decrease) in Stockholders' Equity
Net de-consolidation of Funds	(178.0)
Ending balance (in shares) at Mar. 31, 2021					79.4
Ending balance at Mar. 31, 2021	430.0				$ 0.1	492.8	(150.3)	(11.9)	330.7	5.6	93.7
Beginning balance (in shares) at Dec. 31, 2020					79.4
Beginning balance at Dec. 31, 2020	384.4				$ 0.1	492.4	(176.5)	(13.6)	302.4	1.7	80.3
Increase (Decrease) in Stockholders' Equity
Issuance of common stock	0.1					0.1			0.1
Capital contributions	33.5									3.8	29.7
Equity-based compensation	0.9					0.9			0.9
Foreign currency translation adjustment	1.2							1.2	1.2
Amortization related to derivatives securities, net of tax	1.2							1.2	1.2
Other changes in non-controlling interests	(5.5)									(5.5)
Net de-consolidation of Funds											(178.0)
Dividends	(1.6)						(1.6)		(1.6)
Net income	627.7						559.7		559.7		68.0
Ending balance (in shares) at Jun. 30, 2021					79.4
Ending balance at Jun. 30, 2021	863.9				$ 0.1	493.4	381.6	(11.2)	863.9	0.0	0.0
Beginning balance (in shares) at Mar. 31, 2021					79.4
Beginning balance at Mar. 31, 2021	430.0				$ 0.1	492.8	(150.3)	(11.9)	330.7	5.6	93.7
Increase (Decrease) in Stockholders' Equity
Issuance of common stock	0.1					0.1			0.1
Capital contributions	29.7										29.7
Equity-based compensation	0.5					0.5			0.5
Foreign currency translation adjustment	0.1							0.1	0.1
Amortization related to derivatives securities, net of tax	0.6							0.6	0.6
Other changes in non-controlling interests	(5.6)									(5.6)
Net de-consolidation of Funds	(178.0)			$ (178.0)
Dividends	(0.8)	$ (0.8)	$ (0.8)
Net income	587.3						532.7		532.7		54.6
Ending balance (in shares) at Jun. 30, 2021					79.4
Ending balance at Jun. 30, 2021	863.9				$ 0.1	493.4	381.6	(11.2)	863.9	0.0	0.0
Beginning balance (in shares) at Dec. 31, 2021					45.4
Beginning balance at Dec. 31, 2021	(17.6)				$ 0.0	0.0	(6.8)	(10.8)	(17.6)	0.0	0.0
Increase (Decrease) in Stockholders' Equity
Issuance of common stock (in shares)					0.2
Repurchase of common stock (in shares)					(4.2)
Repurchase of common stock	(103.2)						(103.2)		(103.2)
Equity-based compensation	1.4					1.4			1.4
Foreign currency translation adjustment	(3.1)							(3.1)	(3.1)
Amortization related to derivatives securities, net of tax	2.2							2.2	2.2
Withholding tax related to stock option exercise	(2.3)					(0.9)	(1.4)		(2.3)
Dividends	(0.8)						(0.8)		(0.8)
Net income	52.4						52.4		52.4
Ending balance (in shares) at Jun. 30, 2022					41.4
Ending balance at Jun. 30, 2022	(71.0)				$ 0.0	0.5	(59.8)	(11.7)	(71.0)	0.0	0.0
Beginning balance (in shares) at Mar. 31, 2022					41.4
Beginning balance at Mar. 31, 2022	(97.9)				$ 0.0	0.0	(88.0)	(9.9)	(97.9)	0.0	0.0
Increase (Decrease) in Stockholders' Equity
Equity-based compensation	0.5					0.5			0.5
Foreign currency translation adjustment	(2.4)							(2.4)	(2.4)
Amortization related to derivatives securities, net of tax	0.6							0.6	0.6
Dividends	(0.4)						(0.4)		(0.4)
Net income	28.6						28.6		28.6
Ending balance (in shares) at Jun. 30, 2022					41.4
Ending balance at Jun. 30, 2022	$ (71.0)				$ 0.0	$ 0.5	$ (59.8)	$ (11.7)	$ (71.0)	$ 0.0	$ 0.0

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Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Stockholders' Equity [Abstract]
Dividends (in dollars per share)	$ 0.01	$ 0.01	$ 0.02	$ 0.02

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net income	$ 52.4	$ 627.7
Less: Income from discontinued operations, net of tax	0.0	(75.3)
Adjustments to reconcile net income to net cash flows from operating activities from continuing operations:
Gain on sale of discontinued operations, net of tax	0.0	(509.2)
Loss on extinguishment of debt	3.2	0.0
Loss on sale of subsidiary	0.0	1.3
Depreciation and other amortization	10.6	11.3
Amortization of debt-related costs	3.6	2.2
Amortization and revaluation of non-cash compensation awards	(20.5)	13.3
Net earnings from Affiliate accounted for using the equity method	0.0	(2.4)
Distributions received from equity method Affiliate	0.0	2.9
Distributions from discontinued operations	0.0	46.4
Deferred income taxes	7.0	(4.1)
(Gains) losses on other investments	3.6	(2.8)
Changes in operating assets and liabilities (excluding discontinued operations):
(Increase) decrease in investment advisory fees receivable	68.2	(31.8)
(Increase) decrease in other receivables, prepayments, deposits and other assets	(1.7)	9.7
Decrease in accrued incentive compensation, operating lease liabilities and other liabilities	(77.3)	(21.6)
Decrease in accounts payable, accrued expenses and accrued income taxes	(19.2)	(20.6)
Net cash flows from operating activities of continuing operations	29.9	47.0
Net cash flows from operating activities of discontinued operations	0.0	(1.6)
Total net cash flows from operating activities	29.9	45.4
Cash flows from investing activities:
Additions of fixed assets, excluding discontinued operations	(8.2)	(7.4)
Cash proceeds from sale of subsidiaries	0.0	713.7
Purchase of investment securities	(5.1)	(2.5)
Sale of investment securities	6.9	8.4
Net cash flows from investing activities of continuing operations	(6.4)	712.2
Net cash flows from investing activities of discontinued operations	0.0	11.7
Total net cash flows from investing activities	(6.4)	723.9
Cash flows from financing activities:
Proceeds from revolving credit facility	175.0	132.0
Repayment of third party borrowings and revolving credit facility	(250.0)	(78.1)
Payment for debt issuance costs	(0.9)	(0.4)
Payment to OM plc for co-investment redemptions	(1.1)	(1.3)
Dividends paid to stockholders	(0.6)	(1.1)
Dividends paid to related parties	(0.3)	(0.6)
Repurchases of common stock	(103.2)	0.0
Withholding tax payments related to stock option exercise	(2.3)	0.0
Net cash flows from financing activities of continuing operations	(183.4)	50.5
Net cash flows from financing activities of discontinued operations	0.0	(28.4)
Total net cash flows from financing activities	(183.4)	22.1
Effect of foreign exchange rate changes on cash and cash equivalents	0.0	0.0
Net increase (decrease) in cash and cash equivalents	(159.9)	791.4
Cash and cash equivalents at beginning of period	252.1	372.9
Cash and cash equivalents at beginning of period classified within assets held for sale	0.0	31.2
Cash and cash equivalents at end of period	92.2	1,195.5
Less: cash and cash equivalents at end of period classified within assets held for sale	0.0	(18.5)
Cash and cash equivalents at end of period from continuing operations	92.2	1,177.0
Supplemental disclosure of cash flow information:
Interest paid	8.7	9.8
Income taxes paid	$ 27.7	$ 31.9

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Organization and Description of the Business

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of the Business

Organization and Description of the Business

BrightSphere Investment Group Inc. (“BrightSphere”, “BSIG” or the “Company”), through its subsidiaries, is a global asset management company. The Company provides investment management services globally to predominantly institutional investors. The Company historically held interests in a diverse group of investment management firms (the “Affiliates”) individually headquartered in the United States. The Company completed the disposition of certain Affiliates and currently operates the business through one Affiliate, Acadian Asset Management LLC (“Acadian”), within its Quant & Solutions reportable segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies.

Acadian is organized as a limited liability company. Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products. The Company utilizes a profit-sharing model in structuring its compensation and ownership with Acadian. Variable compensation is based on the firm’s profitability. BSIG and Acadian key employees share in profits after variable compensation according to their respective ownership interests. The profit-sharing model results in the alignment of BSIG and Acadian key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business.     

The corporate head office is included within the Other category, along with the Company’s previously disposed affiliates, Campbell Global, LLC (“Campbell Global”) and Investment Counselors of Maryland (“ICM”), for the prior year period.

Prior to 2014, the Company was a wholly-owned subsidiary of Old Mutual plc (“OM plc”), an international long-term savings, protection, and investment group, listed on the London Stock Exchange. On October 15, 2014, the Company completed the initial public offering (the “Offering”) by OM plc pursuant to the Securities Act of 1933, as amended. Additionally, between the Offering and February 25, 2019, the Company, OM plc and/or HNA Capital U.S. (“HNA”) completed a series of transactions in the Company’s shares, including a two-step transaction announced on March 25, 2017 for a sale by OM plc of a 24.95% shareholding in the Company to HNA and a two-step transaction announced on November 19, 2018 for a sale of the substantial majority of the shares held by HNA of the Company to Paulson & Co. Inc. (“Paulson”). On February 25, 2019, this transaction was completed and Paulson held approximately 21.7% of the shares of the Company. The remaining shares held by HNA were bought back by the Company in the first quarter of 2019.

For the three months ended June 30, 2022, the Company did not repurchase any shares of common stock. For the six months ended June 30, 2022, the Company repurchased 4,147,450 shares of common stock at an average price of $24.09 per share, or approximately $100 million in total, including commissions. For the three and six months ended June 30, 2021, the Company did not repurchase any shares of common stock.

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Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

2) Basis of Presentation and Significant Accounting Policies

The Company’s significant accounting policies are as follows:

Basis of presentation

These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows of the Company. Within these Condensed Consolidated Financial Statements, Paulson and its related entities, as defined above, are referred to as “related parties.”

The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements have been included. All dollar amounts, except per-share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements, however, material intercompany balances and transactions among the Company, its consolidated Affiliates and consolidated Funds are eliminated in consolidation.

The Notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. See Note 3, Discontinued Operations for additional information.

Certain disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (annual report on Form 10-K) are not required to be included on an interim basis in the Company’s quarterly reports on Form 10-Q. The Company has condensed or omitted these disclosures. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The Company’s significant accounting policies, which have been consistently applied, are summarized in those financial statements.

Use of estimates

The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

New accounting standards not yet adopted

The Company has considered all newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the unaudited Condensed Consolidated Financial Statements, including those that have not yet been adopted. The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures.

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Discontinued Operations

6 Months Ended

Jun. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Landmark Partners

On March 30, 2021, the Company entered into a definitive agreement with Ares Holdings L.P. (“Ares”), pursuant to which Ares agreed to purchase all of the Company’s interests in Landmark Partners LLC (“Landmark”) and the Company’s co-investments in Landmark funds. On June 2, 2021, the Company completed the sale of all its interests in Landmark to Ares for cash consideration of $690.0 million, adjusted for customary closing adjustments. The Company recognized a gain on disposal of discontinued operations of $509.2 million, net of tax of $176.6 million for the three and six months ended June 30, 2021. The divestiture of Landmark met the discontinued operations criteria as it represented a strategic shift that had a major effect on the Company’s operations and financial results. The Company redeemed co-investments of $31.5 million in Landmark’s funds as of June 2, 2021 upon consummation of the sale.

Thompson, Siegel & Walmsley, LLC

On May 9, 2021, the Company entered into an agreement with Pendal Group Limited (“Pendal”), to sell all of the Company’s interests in Thompson, Siegel & Walmsley, LLC (“TSW”) and the Company’s seed investment in TSW strategies. On July 22, 2021, the Company completed the sale of all its interests in TSW to Pendal for cash consideration of $240.0 million. The divestiture of TSW met the discontinued operations criteria as it represented a strategic shift that has a major effect on the Company’s operations and financial results.

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 are as follows (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	—	$	51.3	$	—	$	109.5
Operating expenses:
Compensation and benefits	—		43.8		—		87.6
General and administrative expenses	—		3.3		—		7.7
Amortization of intangibles	—		1.1		—		2.7
Depreciation and amortization	—		0.2		—		0.5
Consolidated Funds’ expense	—		—		—		0.1
Total operating expenses	—		48.4		—		98.6
Operating income	—		2.9		—		10.9
Investment gains of consolidated Funds	—		51.5		—		68.1
Income from discontinued operations before taxes	—		54.4		—		79.0
Income tax expense	—		1.0		—		3.7
Income from discontinued operations, net of tax	—		53.4		—		75.3
Gain on disposal, net of tax of $0.0, $176.6, $0.0, and $176.6	—		509.2		—		509.2
Total discontinued operations	—		562.6		—		584.5
Income from discontinued operations attributable to non-controlling interests	—		54.6		—		68.0
Net income from discontinued operations attributable to controlling interests	$	—	$	508.0	$	—	$	516.5

Consolidated Funds

In connection with the sale of Landmark on June 2, 2021, the Company transferred its co-investment interests in Landmark funds to Ares for $31.5 million. The redemption resulted in the de-consolidation of consolidated Funds that were considered to be variable interest entities (“VIEs”) as of June 2, 2021 upon consummation of the sale. The criteria for discontinued operations accounting treatment were met. The consolidated Funds’ investments gains/(losses) from discontinued operations, net of tax, attributable to controlling interests was $(3.1) million and $0.0 million in the Company’s Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2021, respectively.

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Investments

6 Months Ended

Jun. 30, 2022

Investments [Abstract]

Investments

InvestmentsInvestments are comprised of the following as of the dates indicated (in millions):

	June 30, 2022		December 31, 2021
Other investments	$	8.2	$	9.5
Investments related to long-term incentive compensation plans	40.9		45.0
Total investments per Condensed Consolidated Balance Sheets	$	49.1	$	54.5

Investment income (loss) is comprised of the following for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Realized and unrealized gains (losses) on other investments held at fair value	$	(0.7)	$	3.5	$	(0.8)	$	4.9
Earnings from equity-accounted investment in Affiliate	—		1.2		—		2.4
Total investment income (loss) per Condensed Consolidated Statements of Operations	$	(0.7)	$	4.7	$	(0.8)	$	7.3

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value, June 30, 2022
Assets(1)
Investments in separate accounts(2)	4.0		—		—		—		4.0
Investments related to long-term incentive compensation plans(3)	40.9		—		—		—		40.9
Investments in unconsolidated Funds(4)	—		—		—		4.2		4.2
Total fair value assets	$	44.9	$	—	$	—	$	4.2	$	49.1

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value December 31, 2021
Assets(1)
Investments in separate accounts(2)	4.6		—		—		—		4.6
Investments related to long-term incentive compensation plans(3)	45.0		—		—		—		45.0
Investments in unconsolidated Funds(4)	—		—		—		4.9		4.9
Total fair value assets	$	49.6	$	—	$	—	$	4.9	$	54.5

(1)Assets measured at fair value are comprised of financial investments managed by the Company's Affiliates.

Equity securities, including common and preferred stock and short-term investment funds which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. The securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II.

The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided.

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence

procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2)Investments in separate accounts of $4.0 million at June 30, 2022 consist of approximately 100% of equity securities and other investments. Investments in separate accounts of $4.6 million at December 31, 2021 consist of approximately 100% of equity securities and other investments. The Company values these using the published price of the underlying securities (classified as Level I) or quoted price supported by observable inputs as of the measurement date (classified as Level II).

(3)Investments related to long-term incentive compensation plans of $40.9 million and $45.0 million at June 30, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I.

(4)The uncategorized amounts of $4.2 million and $4.9 million at June 30, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investment Funds, UCITS and other investment vehicles. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. UCITS and other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $4.2 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from June 30, 2022. The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions.

The following table reconciles the opening balances of Level III financial assets to closing balances at the end of the period (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
Investments in unconsolidated Funds	2022		2021		2022		2021
Level III financial assets
At beginning of the period	$	—	$	2.5	$	—	$	2.5
Additions (redemptions)	—		(0.1)		—		(0.1)
Disposals	—		(2.7)		—		(2.7)
Total net fair value gains/losses recognized in net income	—		0.3		—		0.3
Total Level III financial assets	$	—	$	—	$	—	$	—

There were no significant transfers of financial assets or liabilities between Levels II or III during the three and six months ended June 30, 2022 and 2021, respectively.

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Variable Interest Entities

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Variable Interest Entities

The Company, through its Affiliate, sponsors the formation of various entities considered to be VIEs. These VIEs are primarily Funds managed by the Company’s Affiliate and other partnership interests typically owned entirely by third party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own non-controlling interests in the Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to more than an insignificant amount of the risks and rewards of the entity. Typically, the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial. The Company did not consolidate any funds that are VIEs as of June 30, 2022 and December 31, 2021.

The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIEs results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

	June 30, 2022		December 31, 2021
Unconsolidated VIE assets	$	722.6	$	795.5
Unconsolidated VIE liabilities	$	298.4	$	323.6
Equity interests on the Condensed Consolidated Balance Sheets	$	4.2	$	4.8
Maximum risk of loss(1)	$	4.2	$	5.0

(1)Includes equity investments the Company has made or is required to make.

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Borrowings and Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Borrowings and Debt

Borrowings and Debt

The Company’s borrowings and long-term debt was comprised of the following as of the dates indicated (in millions):

	June 30, 2022					December 31, 2021
(in millions)	Carrying Value		Fair Value		Fair Value Level	Carrying Value		Fair Value		Fair Value Level
Revolving credit facility:
$125 million revolving credit facility expiring March 7, 2025(1)	$	50.0	$	50.0	2	$	—	$	—
Total revolving credit facility	$	50.0	$	50.0		$	—	$	—
Third party borrowings:
$275 million 4.80% Senior Notes Due July 27, 2026(2)	$	273.3	$	251.7	2	$	273.1	$	286.5	2
$125 million 5.125% Senior Notes Due August 1, 2031(2)(3)	—		—			121.8		126.4		2
Total third party borrowings	$	273.3	$	251.7		$	394.9	$	412.9

(1)Fair value approximates carrying value because the credit facility has variable interest rates based on selected short term market rates.

(2)The difference between the principal amounts and the carrying values of the senior notes in the table above reflects the unamortized debt issuance costs and discounts.

(3)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded a $3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2022.

Revolving Credit Facility

On March 7, 2022, the Company, Royal Bank of Canada, BMO Harris Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Bank of America N.A., the Bank of New York Mellon and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian Credit Agreement”), which replaced the Company’s revolving credit facility dated as of August 20, 2019 (as amended by an amendment dated September 3, 2020 and an assignment and assumption and amendment agreement dated February 23, 2021, the “Original Credit Agreement”). The maturity date of this Original Credit Agreement was August 22, 2022, and the maturity date of the Acadian Credit Agreement is March 7, 2025.

Borrowings under the Acadian Credit Agreement bear interest, at Acadian’s option, at the per annum rate equal to either (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the secured overnight financing rate for a one month period plus a credit spread adjustment of 0.10% (“Adjusted Term SOFR”) plus 1%, plus, in each case, an additional amount ranging from 0.5% to 1.0%, with such additional amount based on Acadian’s Leverage Ratio (as defined below) or (b) Adjusted Term SOFR for plus an additional amount ranging from 1.5% to 2.0%, with such additional amount based on Acadian’s Leverage Ratio. In addition, Acadian is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian’s Leverage Ratio.

Under the Acadian Credit Agreement, the ratio of Acadian’s third-party borrowings to Acadian’s trailing twelve months Adjusted EBITDA, as defined by the Acadian Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the Acadian interest coverage ratio must not be less than 4.0x.

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Leases

The Company has operating leases for corporate offices, data centers and certain equipment. The operating leases have remaining lease terms of less than 1 year to 12 years, some of which include options to extend the leases for up to 5 years.

The following table summarizes information about the Company’s operating leases for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	2.5	$	2.9	$	5.0	$	5.9
Variable lease cost	0.1		—		0.1		0.1
Sublease income	(0.2)		$	(0.1)	(0.3)		(0.1)
Total operating lease expense	$	2.4	$	2.8	$	4.8	$	5.9
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2.2	$	3.5	$	4.4	$	6.1
Right of use assets obtained in exchange for new operating lease liabilities	1.8		1.5		1.8		1.6

In determining the incremental borrowing rate, the Company considered the interest rate yield for the specific interest rate environment and the Company’s credit spread at the inception of the lease. For the six months ended June 30, 2022 and 2021, the weighted average remaining lease term was 10.9 and 11.7, respectively, and the weighted average discount rate was 3.39% and 3.35%, respectively.

Maturities of operating lease liabilities were as follows (in millions):

	Operating Leases
Year Ending December 31,
2022 (excluding the six months ended June 30, 2022)	$	2.0
2023	8.9
2024	8.4
2025	8.1
2026	8.1
Thereafter	56.5
Total lease payments	$	92.0
Less imputed interest	(15.9)
Total	$	76.1

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operational commitments

A number of our subsidiaries operate under regulatory authorities that require that they maintain minimum financial or capital requirements. Management is not aware of any violations of such financial requirements occurring during the period.

Included in cash and cash equivalents is $1.5 million pertaining to the wind-down of BrightSphere Investment U.K., Ltd.

Guaranty

The Company entered into a guaranty for an office space security deposit in the amount of $2.5 million in January 2020. This represents the maximum potential amount of future (undiscounted) payments that the Company could be required to make under the guaranty in the event of default by the guaranteed parties. This guaranty expires in 2022. There are no liabilities recorded on the Condensed Consolidated Balance Sheet as of June 30, 2022 related to this guaranty.

Litigation

The Company is subject to claims, legal proceedings, and other contingencies in the ordinary course of its business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company. The Company establishes accruals for matters for which the outcome is probable and can be reasonably estimated. If an insurance claim or other indemnification for a litigation accrual is available to the Company, the associated gain will not be recognized until all contingencies related to the gain have been resolved. As of June 30, 2022, there were no material accruals for claims, legal proceedings, or other contingencies.

Indemnifications

In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.

Foreign tax contingency

The Company has clients in non-U.S. jurisdictions which require entities that are conducting certain business activities in such jurisdictions to collect and remit tax assessed on certain fees paid for goods and services provided. The Company does not believe this requirement is applicable based on its limited business activities in these jurisdictions. However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes. At June 30, 2022, management of the Company has estimated the potential maximum exposure and concluded that it is not material. No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at June 30, 2022.

Considerations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash and investments. The Company maintains cash and cash equivalents and short term investments with various financial institutions. These financial institutions are typically located in cities in which the Company and its Affiliates operate. For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. At June 30, 2022, approximately $20.6 million of the Company’s cash and cash equivalents were invested in money market funds. Additionally, the Company holds insurance policies which cover historical and future tax benefits relating to certain of its deferred tax assets. The insurers of the policies are considered a significant counterparty to the Company.

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Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated by dividing net income attributable to controlling interests by the weighted-average number of shares of common stock outstanding. Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable common stock, except when inclusion is antidilutive.

The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Income from continuing operations attributable to controlling interests	$	28.6	$	24.7	$	52.4	$	43.2
Income from discontinued operations attributable to controlling interests (Note 3)	—		508.0		—		516.5
Net income attributable to common stock	$	28.6	$	532.7	$	52.4	$	559.7
Denominator:
Weighted-average shares of common stock outstanding—basic	41,425,555		79,351,567		42,690,683		79,335,650
Potential shares of common stock:
Restricted stock units	6,935		23,323		8,523		29,472
Employee stock options	1,085,635		3,551,234		1,216,600		3,258,363
Weighted-average shares of common stock outstanding—diluted	42,518,125		82,926,124		43,915,806		82,623,485
Earnings per share of common stock attributable to controlling interests:
Basic
Continuing operations	$	0.69	$	0.31	$	1.23	$	0.54
Discontinued operations	—		6.40		—		6.51
Basic earnings per share of common stock attributable to controlling interests	$	0.69	$	6.71	$	1.23	$	7.05
Diluted
Continuing operations	$	0.67	$	0.29	$	1.19	$	0.52
Discontinued operations	—		6.13		—		6.25
Diluted earnings per share of common stock attributable to controlling interests	$	0.67	$	6.42	$	1.19	$	6.77

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Revenue

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Management fees

The Company’s management fees are a function of the fee rates the Affiliates charge to their clients, which are typically expressed in basis points, and the levels of the Company’s assets under management. The most significant driver of increases or decreases in this average fee rate is changes in the mix of the Company’s assets under management caused by net inflows or outflows in certain asset classes or disproportionate market movements.

Performance fees

The Company’s products subject to performance fees earn these fees upon exceeding high-water mark performance thresholds or outperforming a hurdle rate. Performance fees are recorded in revenues when the contractual performance criteria have been met and when it is probable that a significant reversal of revenue recognized will not occur in future reporting periods.

Other revenue

Included in other revenue are certain payroll and benefits costs and expenses paid on behalf of Funds by the Company’s Affiliates. In instances where a customer reimburses the Company for a cost paid on the customer’s behalf, the Company is acting as a principal and the reimbursement is accrued on a gross basis at cost as the corresponding reimbursable expenses are incurred. There was no revenue from expense reimbursements for the three and six months ended June 30, 2022. Revenue from expense reimbursements amounted to $1.2 million for the three months ended June 30, 2021. Revenue from expense reimbursements amounted to $2.2 million for the six months ended June 30, 2021. Revenue is recorded in other revenue in the Company’s Condensed Consolidated Statements of Operations. Other revenue may also consist of other miscellaneous revenue, consisting primarily of administration and consulting services.

Disaggregation of management fee revenue

The geographic disaggregation of management fee revenue for the three and six months ended June 30 (in millions) are presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Quant & Solutions
U.S.	$	71.2	$	80.0	$	148.2	$	154.4
Non-U.S.	22.3		26.0		47.5		50.5
Other(1)
U.S.	—		4.1		—		7.8
Non-U.S.	—		1.5		—		2.7
Management fee revenue	$	93.5	$	111.6	$	195.7	$	215.4

(1)The Company’s previously divested Affiliates, Campbell Global and ICM, are included within the Other category for the three and six months ended June 30, 2021.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2022	$	4.1	$	(14.0)	$	(9.9)
Foreign currency translation adjustment	(2.4)		—		(2.4)
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income (loss)	(2.4)		0.6		(1.8)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2021	$	5.5	$	(17.4)	$	(11.9)
Foreign currency translation adjustment	0.1		—		0.1
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income	0.1		0.6		0.7
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2021	$	4.8	$	(15.6)	$	(10.8)
Foreign currency translation adjustment	(3.1)		—		(3.1)
Amortization related to derivatives securities, before tax(1)	—		3.0		3.0
Tax impact	—		(0.8)		(0.8)
Other comprehensive income (loss)	(3.1)		2.2		(0.9)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2020	$	4.4	$	(18.0)	$	(13.6)
Foreign currency translation adjustment	1.2		—		1.2
Amortization related to derivatives securities, before tax	—		1.6		1.6
Tax impact	—		(0.4)		(0.4)
Other comprehensive income	1.2		1.2		2.4
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

(1)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded $1.3 million of amortization expense included in Amortization related to derivatives securities, before tax.

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Derivatives and Hedging

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

Cash flow hedge

In July 2015, the Company entered into a series of $300.0 million notional Treasury rate lock contracts which were designated and qualified as cash flow hedges. The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances. The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $(34.4) million, was settled. Refer to Note 7, Borrowings and Debt, for additional information on the debt issuances.

As of June 30, 2022, the balance recorded in accumulated other comprehensive income (loss) was $(13.4) million, net of tax. This balance will be reclassified to earnings through interest expense over the life of the issued debt. The Company reclassified $0.8 million for each of the three months ended June 30, 2022 and 2021. Amounts of $3.0 million and $1.6 million have been reclassified for the six months ended June 30, 2022 and 2021, respectively. During the next twelve months the Company expects to reclassify approximately $3.3 million to interest expense.

On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, amortization expense of $1.3 million (of the $3.0 million interest expense reclassified to earnings for the six months ended June 30, 2022) was reclassified to earnings as interest expense

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Segments

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segments

Segments

The Company has the following reportable segment:

•Quant & Solutions—comprised of versatile, often highly-tailored strategies that leverage data and technology in a computational, factor-based investment process across a range of asset classes in developed and emerging markets, including global, non-U.S. and small-cap equities, as well as managed volatility, ESG, multi-asset, equity alternatives, and long/short strategies. This segment is comprised of the Company’s interest in Acadian.

The corporate head office is included within the Other category, along with our previously disposed Affiliates, Campbell Global and ICM, for the three and six months ended June 30, 2021. The corporate head office expenses are not allocated to the Company’s business segment but the Chief Operating Decision Maker (“CODM”) does consider the cost structure of the corporate head office when evaluating the financial performance of the segment.

Performance Measure

The primary measure used by the CODM in measuring performance and allocating resources to the segments is Economic Net Income (“ENI”). The Company defines ENI for the segments as ENI revenue less (i) ENI operating expenses, (ii) variable compensation and (iii) key employee distributions. The ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits not recognized under U.S. GAAP. This measure supplements and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with U.S. GAAP. The Company does not disclose total asset information for its reportable segment as the information is not reviewed by the CODM.

ENI revenue includes management fees, performance fees and other revenue under U.S. GAAP, adjusted to include management fees paid to Affiliates by consolidated Funds and the Company’s share of earnings from equity-accounted Affiliate. ENI revenue is also adjusted to exclude the separate revenues recorded under U.S. GAAP for certain Fund expenses reimbursed to our Affiliates.

ENI operating expenses include compensation and benefits, general and administrative expense, and depreciation and amortization under U.S. GAAP, adjusted to exclude non-cash expenses representing changes in the value of Affiliate equity and profit interests held by Affiliate key employees, goodwill impairment and amortization of acquired intangible assets, capital transaction costs, restructuring costs, and the separate expenses recorded under U.S. GAAP for certain Fund expenses reimbursed to Affiliates. Additionally, variable compensation and Affiliate key employee distributions are segregated from ENI operating expenses.

ENI segment results are also adjusted to exclude the portion of consolidated Fund revenues, expenses and investment return recorded under U.S. GAAP.

Segment Presentation

The following tables set forth summarized operating results for the Company’s segments and related adjustments necessary to reconcile the segment economic net income to arrive at the Company’s consolidated U.S. GAAP net income (loss):

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2022 (in millions):

	Three Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	95.5	$	—	$	—		$	95.5
ENI operating expenses	39.7		4.4		(18.5)		(a)	25.6
Earnings before variable compensation	55.8		(4.4)		18.5			69.9
Variable compensation	21.7		1.0		—			22.7
ENI operating earnings (after variable comp)	34.1		(5.4)		18.5			47.2
Affiliate key employee distributions	0.5		—		—			0.5
Earnings after Affiliate key employee distributions	33.6		(5.4)		18.5			46.7
Net interest expense	—		(4.6)		(0.1)		(b)	(4.7)
Net investment income (loss)	—		—		(0.7)		(c)	(0.7)
Income tax expense	—		(6.3)		(6.4)		(d)	(12.7)
Economic net income	$	33.6	$	(16.3)	$	11.3		$	28.6

The following table presents the financial data for the Company’s segments for the three months ended June 30, 2021 (in millions):

	Three Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	111.1	$	22.3	$	(0.1)	(e)	$	133.3
ENI operating expenses	38.3		9.5		13.5		(a)	61.3
Earnings before variable compensation	72.8		12.8		(13.6)			72.0
Variable compensation	22.0		10.4		0.3		(f)	32.7
ENI operating earnings (after variable comp)	50.8		2.4		(13.9)			39.3
Affiliate key employee distributions	3.1		0.1		—			3.2
Earnings after Affiliate key employee distributions	47.7		2.3		(13.9)			36.1
Net interest expense	—		(5.4)		(0.8)		(b)	(6.2)
Net investment income	—		—		4.7		(c)	4.7
Net income attributable to non-controlling interests in consolidated Funds	—		—		(54.6)		(c)	(54.6)
Income tax (expense) benefit	—		(11.7)		1.8		(d)	(9.9)
Income from discontinued operations, net of tax	—		—		53.4		(c)	53.4
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	47.7	$	(14.8)	$	499.8		$	532.7

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2022 (in millions):

	Six Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	207.7	$	—	$	—		$	207.7
ENI operating expenses	80.8		8.9		(24.9)		(a)	64.8
Earnings before variable compensation	126.9		(8.9)		24.9			142.9
Variable compensation	48.0		2.6		—			50.6
ENI operating earnings (after variable comp)	78.9		(11.5)		24.9			92.3
Affiliate key employee distributions	2.4		—		—			2.4
Earnings after Affiliate key employee distributions	76.5		(11.5)		24.9			89.9
Net interest expense	—		(9.2)		(2.0)		(b)	(11.2)
Net investment loss	—		—		(0.8)		(c)	(0.8)
Loss on extinguishment of debt	—		—		(3.2)		(c)	(3.2)
Income tax expense	—		(15.1)		(7.2)		(d)	(22.3)
Economic net income	$	76.5	$	(35.8)	$	11.7		$	52.4

The following table presents the financial data for the Company’s segments for the six months ended June 30, 2021 (in millions):

	Six Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	214.6	$	28.6	$	(0.2)	(e)	$	243.0
ENI operating expenses	77.4		19.2		16.6		(a)	113.2
Earnings before variable compensation	137.2		9.4		(16.8)			129.8
Variable compensation	44.6		11.3		0.8		(f)	56.7
ENI operating earnings (after variable comp)	92.6		(1.9)		(17.6)			73.1
Affiliate key employee distributions	4.6		(0.1)		—			4.5
Earnings after Affiliate key employee distributions	88.0		(1.8)		(17.6)			68.6
Net interest expense	—		(10.8)		(1.6)		(b)	(12.4)
Net investment income	—		—		7.3		(c)	7.3
Loss on sale of subsidiary	—		—		(1.3)		(c)	(1.3)
Net income attributable to non-controlling interests in consolidated Funds	—		—		(68.0)		(c)	(68.0)
Income tax (expense) benefit	—		(20.0)		1.0		(d)	(19.0)
Income from discontinued operations, net of tax	—		—		75.3		(c)	75.3
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	88.0	$	(32.6)	$	504.3		$	559.7

(1)The most directly comparable U.S. GAAP measure of ENI revenue is U.S. GAAP revenue. The most directly comparable U.S. GAAP measure of ENI operating expenses is U.S. GAAP operating expenses, which is comprised of ENI operating expenses, variable compensation, and Affiliate key employee distributions above. The most directly comparable U.S. GAAP measure of earnings after Affiliate key employee distributions is U.S. GAAP operating income. The most directly comparable U.S. GAAP measure of ENI is U.S. GAAP net income attributable to controlling interests.

Reconciling Adjustments:

a.Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, and amortization of acquired intangible assets, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S. GAAP operating expenses.

b.Adjusted to include the cost of seed financing, which is included in U.S. GAAP interest expense.

c.Adjusted to include net investment income (loss), the loss on extinguishment of debt, net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, and the results of discontinued operations, net of tax, all of which are included in U.S. GAAP net income attributable to controlling interests.

d.Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles. Also adjusted to include the tax impact of certain ENI adjustments; exclude the tax expense or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

e.Adjusted to exclude earnings from equity-accounted Affiliate, which are included in U.S. GAAP investment income, and to include consolidated Funds revenues and the separate revenues recorded for certain Fund expenses reimbursed by customers, which are included in U.S. GAAP revenue.

f.Adjusted to include restructuring costs which are included in U.S. GAAP compensation expense.

g.Adjusted to include the gain on disposal of discontinued operations, net of tax, which is included in U.S. GAAP net income attributable to controlling interests.

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows of the Company. Within these Condensed Consolidated Financial Statements, Paulson and its related entities, as defined above, are referred to as “related parties.”

The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements have been included. All dollar amounts, except per-share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and its related parties are included in the Condensed Consolidated Financial Statements, however, material intercompany balances and transactions among the Company, its consolidated Affiliates and consolidated Funds are eliminated in consolidation.

The Notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. See Note 3, Discontinued Operations for additional information.

Certain disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (annual report on Form 10-K) are not required to be included on an interim basis in the Company’s quarterly reports on Form 10-Q. The Company has condensed or omitted these disclosures. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The Company’s significant accounting policies, which have been consistently applied, are summarized in those financial statements.

Use of estimates

Use of estimatesThe preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from such estimates, and the differences may be material to the Condensed Consolidated Financial Statements.

New accounting standards not yet adopted

New accounting standards not yet adopted

The Company has considered all newly issued accounting guidance that is applicable to the Company’s operations and the preparation of the unaudited Condensed Consolidated Financial Statements, including those that have not yet been adopted. The Company does not believe that any such guidance has or will have a material effect on its Condensed Consolidated Financial Statements and related disclosures.

Variable interest entities (“VIEs”)

The Company, through its Affiliate, sponsors the formation of various entities considered to be VIEs. These VIEs are primarily Funds managed by the Company’s Affiliate and other partnership interests typically owned entirely by third party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own non-controlling interests in the Affiliate.

The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to more than an insignificant amount of the risks and rewards of the entity. Typically, the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial. The Company did not consolidate any funds that are VIEs as of June 30, 2022 and December 31, 2021.

The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIEs results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.

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Discontinued Operations and Disposal Groups (Tables)

6 Months Ended

Jun. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Divestitures and Assets Held for Sale

The major classes of revenue and expenses constituting net income from discontinued operations attributable to controlling interests for Landmark and TSW in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 are as follows (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	—	$	51.3	$	—	$	109.5
Operating expenses:
Compensation and benefits	—		43.8		—		87.6
General and administrative expenses	—		3.3		—		7.7
Amortization of intangibles	—		1.1		—		2.7
Depreciation and amortization	—		0.2		—		0.5
Consolidated Funds’ expense	—		—		—		0.1
Total operating expenses	—		48.4		—		98.6
Operating income	—		2.9		—		10.9
Investment gains of consolidated Funds	—		51.5		—		68.1
Income from discontinued operations before taxes	—		54.4		—		79.0
Income tax expense	—		1.0		—		3.7
Income from discontinued operations, net of tax	—		53.4		—		75.3
Gain on disposal, net of tax of $0.0, $176.6, $0.0, and $176.6	—		509.2		—		509.2
Total discontinued operations	—		562.6		—		584.5
Income from discontinued operations attributable to non-controlling interests	—		54.6		—		68.0
Net income from discontinued operations attributable to controlling interests	$	—	$	508.0	$	—	$	516.5

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Investment (Tables)

6 Months Ended

Jun. 30, 2022

Investments [Abstract]

Schedule of investment components

Investments are comprised of the following as of the dates indicated (in millions):

	June 30, 2022		December 31, 2021
Other investments	$	8.2	$	9.5
Investments related to long-term incentive compensation plans	40.9		45.0
Total investments per Condensed Consolidated Balance Sheets	$	49.1	$	54.5

Investment income

Investment income (loss) is comprised of the following for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Realized and unrealized gains (losses) on other investments held at fair value	$	(0.7)	$	3.5	$	(0.8)	$	4.9
Earnings from equity-accounted investment in Affiliate	—		1.2		—		2.4
Total investment income (loss) per Condensed Consolidated Statements of Operations	$	(0.7)	$	4.7	$	(0.8)	$	7.3

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Summary of the assets and liabilities that are measured at fair value on a recurring basis

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value, June 30, 2022
Assets(1)
Investments in separate accounts(2)	4.0		—		—		—		4.0
Investments related to long-term incentive compensation plans(3)	40.9		—		—		—		40.9
Investments in unconsolidated Funds(4)	—		—		—		4.2		4.2
Total fair value assets	$	44.9	$	—	$	—	$	4.2	$	49.1

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 (in millions):

	Quoted prices in active markets (Level I)		Significant other observable inputs (Level II)		Significant unobservable inputs (Level III)		Uncategorized		Total value December 31, 2021
Assets(1)
Investments in separate accounts(2)	4.6		—		—		—		4.6
Investments related to long-term incentive compensation plans(3)	45.0		—		—		—		45.0
Investments in unconsolidated Funds(4)	—		—		—		4.9		4.9
Total fair value assets	$	49.6	$	—	$	—	$	4.9	$	54.5

(1)Assets measured at fair value are comprised of financial investments managed by the Company's Affiliates.

Equity securities, including common and preferred stock and short-term investment funds which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. The securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II.

The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided.

If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence

procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.

(2)Investments in separate accounts of $4.0 million at June 30, 2022 consist of approximately 100% of equity securities and other investments. Investments in separate accounts of $4.6 million at December 31, 2021 consist of approximately 100% of equity securities and other investments. The Company values these using the published price of the underlying securities (classified as Level I) or quoted price supported by observable inputs as of the measurement date (classified as Level II).

(3)Investments related to long-term incentive compensation plans of $40.9 million and $45.0 million at June 30, 2022 and December 31, 2021, respectively, were investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I.

(4)The uncategorized amounts of $4.2 million and $4.9 million at June 30, 2022 and December 31, 2021, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in Funds and are valued using NAV which the Company relies on to determine their fair value as a practical expedient and has therefore not classified these investments in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investment Funds, UCITS and other investment vehicles. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates. UCITS and other investment vehicles are not subject to redemption restrictions.

The real estate investment Funds of $4.2 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively, are subject to longer than quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one year from June 30, 2022. The valuation process for the underlying real estate investments held by the real estate investment Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions.

Level Three Investment Reconciliation

The following table reconciles the opening balances of Level III financial assets to closing balances at the end of the period (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
Investments in unconsolidated Funds	2022		2021		2022		2021
Level III financial assets
At beginning of the period	$	—	$	2.5	$	—	$	2.5
Additions (redemptions)	—		(0.1)		—		(0.1)
Disposals	—		(2.7)		—		(2.7)
Total net fair value gains/losses recognized in net income	—		0.3		—		0.3
Total Level III financial assets	$	—	$	—	$	—	$	—

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of assets and liabilities and information pertains to VIEs

The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):

	June 30, 2022		December 31, 2021
Unconsolidated VIE assets	$	722.6	$	795.5
Unconsolidated VIE liabilities	$	298.4	$	323.6
Equity interests on the Condensed Consolidated Balance Sheets	$	4.2	$	4.8
Maximum risk of loss(1)	$	4.2	$	5.0

(1)Includes equity investments the Company has made or is required to make.

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Borrowings and Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of long term debt

The Company’s borrowings and long-term debt was comprised of the following as of the dates indicated (in millions):

	June 30, 2022					December 31, 2021
(in millions)	Carrying Value		Fair Value		Fair Value Level	Carrying Value		Fair Value		Fair Value Level
Revolving credit facility:
$125 million revolving credit facility expiring March 7, 2025(1)	$	50.0	$	50.0	2	$	—	$	—
Total revolving credit facility	$	50.0	$	50.0		$	—	$	—
Third party borrowings:
$275 million 4.80% Senior Notes Due July 27, 2026(2)	$	273.3	$	251.7	2	$	273.1	$	286.5	2
$125 million 5.125% Senior Notes Due August 1, 2031(2)(3)	—		—			121.8		126.4		2
Total third party borrowings	$	273.3	$	251.7		$	394.9	$	412.9

(1)Fair value approximates carrying value because the credit facility has variable interest rates based on selected short term market rates.

(2)The difference between the principal amounts and the carrying values of the senior notes in the table above reflects the unamortized debt issuance costs and discounts.

(3)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded a $3.2 million loss on extinguishment of debt within the Condensed Consolidated Statements of Operations for the six months ended June 30, 2022.

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Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Summary of lease information

The following table summarizes information about the Company’s operating leases for the three and six months ended June 30 (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	2.5	$	2.9	$	5.0	$	5.9
Variable lease cost	0.1		—		0.1		0.1
Sublease income	(0.2)		$	(0.1)	(0.3)		(0.1)
Total operating lease expense	$	2.4	$	2.8	$	4.8	$	5.9
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2.2	$	3.5	$	4.4	$	6.1
Right of use assets obtained in exchange for new operating lease liabilities	1.8		1.5		1.8		1.6

Maturities of operating lease liabilities

Maturities of operating lease liabilities were as follows (in millions):

	Operating Leases
Year Ending December 31,
2022 (excluding the six months ended June 30, 2022)	$	2.0
2023	8.9
2024	8.4
2025	8.1
2026	8.1
Thereafter	56.5
Total lease payments	$	92.0
Less imputed interest	(15.9)
Total	$	76.1

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Calculation of pro forma basic and diluted earnings per share

The calculation of basic and diluted earnings per share of common stock is as follows (dollars in millions, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Income from continuing operations attributable to controlling interests	$	28.6	$	24.7	$	52.4	$	43.2
Income from discontinued operations attributable to controlling interests (Note 3)	—		508.0		—		516.5
Net income attributable to common stock	$	28.6	$	532.7	$	52.4	$	559.7
Denominator:
Weighted-average shares of common stock outstanding—basic	41,425,555		79,351,567		42,690,683		79,335,650
Potential shares of common stock:
Restricted stock units	6,935		23,323		8,523		29,472
Employee stock options	1,085,635		3,551,234		1,216,600		3,258,363
Weighted-average shares of common stock outstanding—diluted	42,518,125		82,926,124		43,915,806		82,623,485
Earnings per share of common stock attributable to controlling interests:
Basic
Continuing operations	$	0.69	$	0.31	$	1.23	$	0.54
Discontinued operations	—		6.40		—		6.51
Basic earnings per share of common stock attributable to controlling interests	$	0.69	$	6.71	$	1.23	$	7.05
Diluted
Continuing operations	$	0.67	$	0.29	$	1.19	$	0.52
Discontinued operations	—		6.13		—		6.25
Diluted earnings per share of common stock attributable to controlling interests	$	0.67	$	6.42	$	1.19	$	6.77

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Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of revenue

The geographic disaggregation of management fee revenue for the three and six months ended June 30 (in millions) are presented below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Quant & Solutions
U.S.	$	71.2	$	80.0	$	148.2	$	154.4
Non-U.S.	22.3		26.0		47.5		50.5
Other(1)
U.S.	—		4.1		—		7.8
Non-U.S.	—		1.5		—		2.7
Management fee revenue	$	93.5	$	111.6	$	195.7	$	215.4

(1)The Company’s previously divested Affiliates, Campbell Global and ICM, are included within the Other category for the three and six months ended June 30, 2021.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Schedule of components of accumulated other comprehensive income including proportions attributable to non-controlling interests

The components of accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2022	$	4.1	$	(14.0)	$	(9.9)
Foreign currency translation adjustment	(2.4)		—		(2.4)
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income (loss)	(2.4)		0.6		(1.8)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of March 31, 2021	$	5.5	$	(17.4)	$	(11.9)
Foreign currency translation adjustment	0.1		—		0.1
Amortization related to derivatives securities, before tax	—		0.8		0.8
Tax impact	—		(0.2)		(0.2)
Other comprehensive income	0.1		0.6		0.7
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

The components of accumulated other comprehensive income (loss), net of tax, for the six months ended June 30, 2022 and 2021 are as follows (in millions):

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2021	$	4.8	$	(15.6)	$	(10.8)
Foreign currency translation adjustment	(3.1)		—		(3.1)
Amortization related to derivatives securities, before tax(1)	—		3.0		3.0
Tax impact	—		(0.8)		(0.8)
Other comprehensive income (loss)	(3.1)		2.2		(0.9)
Balance, as of June 30, 2022	$	1.7	$	(13.4)	$	(11.7)

	Foreign currency translation adjustment		Valuation and amortization of derivative securities		Total
Balance, as of December 31, 2020	$	4.4	$	(18.0)	$	(13.6)
Foreign currency translation adjustment	1.2		—		1.2
Amortization related to derivatives securities, before tax	—		1.6		1.6
Tax impact	—		(0.4)		(0.4)
Other comprehensive income	1.2		1.2		2.4
Balance, as of June 30, 2021	$	5.6	$	(16.8)	$	(11.2)

(1)On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, the Company recorded $1.3 million of amortization expense included in Amortization related to derivatives securities, before tax.

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Segments (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Reconciling Adjustments

The following table presents the financial data for the Company’s segment for the three months ended June 30, 2022 (in millions):

	Three Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	95.5	$	—	$	—		$	95.5
ENI operating expenses	39.7		4.4		(18.5)		(a)	25.6
Earnings before variable compensation	55.8		(4.4)		18.5			69.9
Variable compensation	21.7		1.0		—			22.7
ENI operating earnings (after variable comp)	34.1		(5.4)		18.5			47.2
Affiliate key employee distributions	0.5		—		—			0.5
Earnings after Affiliate key employee distributions	33.6		(5.4)		18.5			46.7
Net interest expense	—		(4.6)		(0.1)		(b)	(4.7)
Net investment income (loss)	—		—		(0.7)		(c)	(0.7)
Income tax expense	—		(6.3)		(6.4)		(d)	(12.7)
Economic net income	$	33.6	$	(16.3)	$	11.3		$	28.6

The following table presents the financial data for the Company’s segments for the three months ended June 30, 2021 (in millions):

	Three Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	111.1	$	22.3	$	(0.1)	(e)	$	133.3
ENI operating expenses	38.3		9.5		13.5		(a)	61.3
Earnings before variable compensation	72.8		12.8		(13.6)			72.0
Variable compensation	22.0		10.4		0.3		(f)	32.7
ENI operating earnings (after variable comp)	50.8		2.4		(13.9)			39.3
Affiliate key employee distributions	3.1		0.1		—			3.2
Earnings after Affiliate key employee distributions	47.7		2.3		(13.9)			36.1
Net interest expense	—		(5.4)		(0.8)		(b)	(6.2)
Net investment income	—		—		4.7		(c)	4.7
Net income attributable to non-controlling interests in consolidated Funds	—		—		(54.6)		(c)	(54.6)
Income tax (expense) benefit	—		(11.7)		1.8		(d)	(9.9)
Income from discontinued operations, net of tax	—		—		53.4		(c)	53.4
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	47.7	$	(14.8)	$	499.8		$	532.7

The following table presents the financial data for the Company’s segment for the six months ended June 30, 2022 (in millions):

	Six Months Ended June 30, 2022
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	207.7	$	—	$	—		$	207.7
ENI operating expenses	80.8		8.9		(24.9)		(a)	64.8
Earnings before variable compensation	126.9		(8.9)		24.9			142.9
Variable compensation	48.0		2.6		—			50.6
ENI operating earnings (after variable comp)	78.9		(11.5)		24.9			92.3
Affiliate key employee distributions	2.4		—		—			2.4
Earnings after Affiliate key employee distributions	76.5		(11.5)		24.9			89.9
Net interest expense	—		(9.2)		(2.0)		(b)	(11.2)
Net investment loss	—		—		(0.8)		(c)	(0.8)
Loss on extinguishment of debt	—		—		(3.2)		(c)	(3.2)
Income tax expense	—		(15.1)		(7.2)		(d)	(22.3)
Economic net income	$	76.5	$	(35.8)	$	11.7		$	52.4

The following table presents the financial data for the Company’s segments for the six months ended June 30, 2021 (in millions):

	Six Months Ended June 30, 2021
	Quant & Solutions		Other		Reconciling Adjustments			Total U.S. GAAP(1)
ENI revenue	$	214.6	$	28.6	$	(0.2)	(e)	$	243.0
ENI operating expenses	77.4		19.2		16.6		(a)	113.2
Earnings before variable compensation	137.2		9.4		(16.8)			129.8
Variable compensation	44.6		11.3		0.8		(f)	56.7
ENI operating earnings (after variable comp)	92.6		(1.9)		(17.6)			73.1
Affiliate key employee distributions	4.6		(0.1)		—			4.5
Earnings after Affiliate key employee distributions	88.0		(1.8)		(17.6)			68.6
Net interest expense	—		(10.8)		(1.6)		(b)	(12.4)
Net investment income	—		—		7.3		(c)	7.3
Loss on sale of subsidiary	—		—		(1.3)		(c)	(1.3)
Net income attributable to non-controlling interests in consolidated Funds	—		—		(68.0)		(c)	(68.0)
Income tax (expense) benefit	—		(20.0)		1.0		(d)	(19.0)
Income from discontinued operations, net of tax	—		—		75.3		(c)	75.3
Gain on disposal of discontinued operations, net of tax	—		—		509.2		(g)	509.2
Economic net income	$	88.0	$	(32.6)	$	504.3		$	559.7

(1)The most directly comparable U.S. GAAP measure of ENI revenue is U.S. GAAP revenue. The most directly comparable U.S. GAAP measure of ENI operating expenses is U.S. GAAP operating expenses, which is comprised of ENI operating expenses, variable compensation, and Affiliate key employee distributions above. The most directly comparable U.S. GAAP measure of earnings after Affiliate key employee distributions is U.S. GAAP operating income. The most directly comparable U.S. GAAP measure of ENI is U.S. GAAP net income attributable to controlling interests.

Reconciling Adjustments:

a.Adjusted to include non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, and amortization of acquired intangible assets, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S. GAAP operating expenses.

b.Adjusted to include the cost of seed financing, which is included in U.S. GAAP interest expense.

c.Adjusted to include net investment income (loss), the loss on extinguishment of debt, net income (loss) attributable to non-controlling interests in consolidated Funds, and the loss on sale of subsidiary, and the results of discontinued operations, net of tax, all of which are included in U.S. GAAP net income attributable to controlling interests.

d.Adjusted to include the impact of deferred tax attributable to the amortization of goodwill and acquired intangibles. Also adjusted to include the tax impact of certain ENI adjustments; exclude the tax expense or benefits relating to uncertain tax positions, and exclude the tax impact of other unusual items that are not related to current operating results for ENI purposes.

e.Adjusted to exclude earnings from equity-accounted Affiliate, which are included in U.S. GAAP investment income, and to include consolidated Funds revenues and the separate revenues recorded for certain Fund expenses reimbursed by customers, which are included in U.S. GAAP revenue.

f.Adjusted to include restructuring costs which are included in U.S. GAAP compensation expense.

g.Adjusted to include the gain on disposal of discontinued operations, net of tax, which is included in U.S. GAAP net income attributable to controlling interests.

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Organization and Description of the Business (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		6 Months Ended
	Mar. 25, 2017	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Feb. 25, 2019
Business Acquisition [Line Items]
Ordinary shares repurchased (in shares)		0	0	4,147,450	0
Average price of ordinary shares repurchased (in dollars per share)				$ 24.09
Value of treasury stock acquired using the cost method				$ 100
BrightSphere Investment Group | Paulson
Business Acquisition [Line Items]
Parent owned interest						21.70%
Parent Company
Business Acquisition [Line Items]
Percent of interest sold	24.95%

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Discontinued Operations - Narrative (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jun. 02, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Jul. 22, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Tax effect		$ 0.0	$ 176.6	$ 0.0	$ 176.6
Income from discontinued operations, net of tax		$ 0.0	53.4	$ 0.0	75.3
Interests In Landmark
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Redemption of co-investments	$ 31.5
Discontinued Operations, Disposed of by Sale | Interests In Landmark
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration	690.0
Gain on disposal of discontinued operations			509.2		509.2
Tax effect			176.6		176.6
Discontinued Operations, Disposed of by Sale | Thompson Siegel & Walmsley, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration						$ 240.0
Discontinued Operations, Held-for-sale | Landmark Partners, LLC , Carried Interest And Co-Investments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration	$ 31.5
Income from discontinued operations, net of tax			$ (3.1)		$ 0.0

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Discontinued Operations - Schedule of Divestitures and Assets Held for Sale (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]
Revenues	$ 0.0	$ 51.3	$ 0.0	$ 109.5
Compensation and benefits	0.0	43.8	0.0	87.6
General and administrative expenses	0.0	3.3	0.0	7.7
Amortization of intangibles	0.0	1.1	0.0	2.7
Depreciation and amortization	0.0	0.2	0.0	0.5
Consolidated Funds’ expense	0.0	0.0	0.0	0.1
Total operating expenses	0.0	48.4	0.0	98.6
Operating income	0.0	2.9	0.0	10.9
Investment gains of consolidated Funds	0.0	51.5	0.0	68.1
Income from discontinued operations before taxes	0.0	54.4	0.0	79.0
Income tax expense	0.0	1.0	0.0	3.7
Income from discontinued operations, net of tax	0.0	53.4	0.0	75.3
Gain on disposal of discontinued operations, net of tax	0.0	509.2	0.0	509.2
Income from discontinued operations, net of tax	0.0	562.6	0.0	584.5
Income from discontinued operations attributable to non-controlling interests	0.0	54.6	0.0	68.0
Net income from discontinued operations attributable to controlling interests	0.0	508.0	0.0	516.5
Tax effect	$ 0.0	$ 176.6	$ 0.0	$ 176.6

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Investments - Schedule of Investment Components (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Investment Holdings [Line Items]
Total investments per Condensed Consolidated Balance Sheets	$ 49.1	$ 54.5
Realized and unrealized gains (losses) on other investments held at fair value | Consolidated Entity Excluding Consolidated Funds
Investment Holdings [Line Items]
Investments, fair value disclosure	8.2	9.5
Investments related to long-term incentive compensation plans | Consolidated Entity Excluding Consolidated Funds
Investment Holdings [Line Items]
Investments, fair value disclosure	$ 40.9	$ 45.0

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Investments - Investment Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net Investment Income [Line Items]
Investment income (loss)	$ (0.7)	$ 4.7	$ (0.8)	$ 7.3
Consolidated Entity Excluding Consolidated Funds
Net Investment Income [Line Items]
Investment income (loss)	(0.7)	4.7	(0.8)	7.3
Consolidated Entity Excluding Consolidated Funds | Realized and unrealized gains (losses) on other investments held at fair value
Net Investment Income [Line Items]
Investment income (loss)	(0.7)	3.5	(0.8)	4.9
Consolidated Entity Excluding Consolidated Funds | Earnings from equity-accounted investment in Affiliate
Net Investment Income [Line Items]
Investment income (loss)	$ 0.0	$ 1.2	$ 0.0	$ 2.4

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Fair Value Measurements - Summary of the assets and liabilities that are measured at fair value on a recurring basis (Details) - USD ($) $ in Millions			6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2022
Asset of BSIF and consolidated Funds
Total fair value assets	$ 49.1	$ 54.5	$ 49.1
Investments in unconsolidated funds
Asset of BSIF and consolidated Funds
Uncategorized	4.2	4.9	$ 4.2
Minimum | Real estate investment funds
Asset of BSIF and consolidated Funds
Term over which the underlying assets are expected to be liquidated by the investees			1 year
Consolidated Entity Excluding Consolidated Funds
Asset of BSIF and consolidated Funds
Uncategorized	4.2		$ 4.2
Consolidated Entity Excluding Consolidated Funds | Investments in separate accounts
Asset of BSIF and consolidated Funds
Investments in separate accounts	4.0	4.6	4.0
Consolidated Entity Excluding Consolidated Funds | Investments related to long-term incentive compensation plans
Asset of BSIF and consolidated Funds
Investments related to long-term incentive compensation plans	40.9	45.0	40.9
Investments in unconsolidated Funds	40.9	45.0	40.9
Consolidated Entity Excluding Consolidated Funds | Investments in unconsolidated funds
Asset of BSIF and consolidated Funds
Uncategorized	4.2	4.9	4.2
Investments in unconsolidated Funds	4.2	4.9	4.2
Consolidated Entity Excluding Consolidated Funds | Investment Funds Subject to Longer Redemption Restrictions
Asset of BSIF and consolidated Funds
Uncategorized	4.2	4.8	4.2
Quoted prices in active markets (Level I)
Asset of BSIF and consolidated Funds
Total fair value assets	$ 44.9	$ 49.6	44.9
Quoted prices in active markets (Level I) | Consolidated Entity Excluding Consolidated Funds
Asset of BSIF and consolidated Funds
Investment in equity securities	100.00%	100.00%
Quoted prices in active markets (Level I) | Consolidated Entity Excluding Consolidated Funds | Investments in separate accounts
Asset of BSIF and consolidated Funds
Investments in separate accounts	$ 4.0	$ 4.6	4.0
Quoted prices in active markets (Level I) | Consolidated Entity Excluding Consolidated Funds | Investments related to long-term incentive compensation plans
Asset of BSIF and consolidated Funds
Investments related to long-term incentive compensation plans	40.9	45.0	40.9
Quoted prices in active markets (Level I) | Consolidated Entity Excluding Consolidated Funds | Investments in unconsolidated funds
Asset of BSIF and consolidated Funds
Investments in unconsolidated Funds	0.0	0.0	0.0
Significant other observable inputs (Level II)
Asset of BSIF and consolidated Funds
Total fair value assets	0.0	0.0	0.0
Significant other observable inputs (Level II) | Consolidated Entity Excluding Consolidated Funds | Investments in separate accounts
Asset of BSIF and consolidated Funds
Investments in separate accounts	0.0	0.0	0.0
Significant other observable inputs (Level II) | Consolidated Entity Excluding Consolidated Funds | Investments related to long-term incentive compensation plans
Asset of BSIF and consolidated Funds
Investments related to long-term incentive compensation plans	0.0	0.0	0.0
Significant other observable inputs (Level II) | Consolidated Entity Excluding Consolidated Funds | Investments in unconsolidated funds
Asset of BSIF and consolidated Funds
Investments in unconsolidated Funds	0.0	0.0	0.0
Significant unobservable inputs (Level III)
Asset of BSIF and consolidated Funds
Total fair value assets	0.0	0.0	0.0
Significant unobservable inputs (Level III) | Consolidated Entity Excluding Consolidated Funds | Investments in separate accounts
Asset of BSIF and consolidated Funds
Investments in separate accounts	0.0	0.0	0.0
Significant unobservable inputs (Level III) | Consolidated Entity Excluding Consolidated Funds | Investments related to long-term incentive compensation plans
Asset of BSIF and consolidated Funds
Investments related to long-term incentive compensation plans	0.0	0.0	0.0
Significant unobservable inputs (Level III) | Consolidated Entity Excluding Consolidated Funds | Investments in unconsolidated funds
Asset of BSIF and consolidated Funds
Investments in unconsolidated Funds	$ 0.0	$ 0.0	$ 0.0

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Fair Value Measurements - Schedule of Level Three Investment Reconciliation (Details) - Consolidated Entity Excluding Consolidated Funds - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
At beginning of the period	$ 0.0	$ 2.5	$ 0.0	$ 2.5
Additions (redemptions)	0.0	(0.1)	0.0	(0.1)
Disposals	0.0	(2.7)	0.0	(2.7)
Total net fair value gains/losses recognized in net income	0.0	0.3	0.0	0.3
Total Level III financial assets	$ 0.0	$ 0.0	$ 0.0	$ 0.0

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Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Variable Interest Entities
Unconsolidated VIE assets	$ 478.3	$ 714.8
Unconsolidated VIE liabilities	549.3	732.4
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entities
Unconsolidated VIE assets	722.6	795.5
Unconsolidated VIE liabilities	298.4	323.6
Equity interests on the Condensed Consolidated Balance Sheets	4.2	4.8
Maximum risk of loss	$ 4.2	$ 5.0

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Borrowings and Debt (Details) $ in Millions			3 Months Ended		6 Months Ended
	Mar. 07, 2022	Jan. 18, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt			$ 0.0	$ 0.0	$ 3.2	$ 0.0
Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Carrying value			273.3		273.3		$ 394.9
Fair value			251.7		251.7		412.9
Line of Credit | Revolving credit facility
Debt Instrument [Line Items]
Face amount			125.0		125.0
Interest coverage ratio	4.0
Line of Credit | Revolving credit facility | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.25%
Line of Credit | Revolving credit facility | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	0.375%
Line of Credit | Revolving credit facility | Fed Funds Effective Rate Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Line of Credit | Revolving credit facility | Adjusted Term SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	0.10%
Line of Credit | Revolving credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Line of Credit | Revolving credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate, Additional Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Line of Credit | Revolving credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate, Additional Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Line of Credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Line of Credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Line of Credit | Revolving credit facility | Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Carrying value			50.0		50.0		0.0
Fair value			50.0		50.0		0.0
Line of Credit | Revolving credit facility | Revolving Credit Facility Expiring August 22, 2022 | Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Carrying value			50.0		50.0		0.0
Fair value			50.0		50.0		0.0
Senior notes | Senior Notes, 4.80%, due 2026
Debt Instrument [Line Items]
Face amount			$ 275.0		$ 275.0
Stated interest rate			4.80%		4.80%
Senior notes | Senior Notes, 4.80%, due 2026 | Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Carrying value			$ 273.3		$ 273.3		273.1
Fair value			251.7		251.7		286.5
Senior notes | Senior Notes, 5.125%, due 2031
Debt Instrument [Line Items]
Face amount			$ 125.0		$ 125.0
Stated interest rate		5.125%	5.125%		5.125%
Debt repayments		$ 125.0
Loss on extinguishment of debt					$ 3.2
Senior notes | Senior Notes, 5.125%, due 2031 | Fair Value, Inputs, Level 2
Debt Instrument [Line Items]
Carrying value			$ 0.0		0.0		121.8
Fair value			$ 0.0		$ 0.0		$ 126.4

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Leases - Narrative (Details)	Jun. 30, 2022	Jun. 30, 2021
Lessee, Lease, Description [Line Items]
Lease renewal term	5 years
Weighted average remaining lease term	10 years 10 months 24 days	11 years 8 months 12 days
Weighted average discount rate	3.39%	3.35%
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	12 years

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Leases - Summary of Lease Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Leases [Abstract]
Operating lease cost	$ 2.5	$ 2.9	$ 5.0	$ 5.9
Variable lease cost	0.1	0.0	0.1	0.1
Sublease income	(0.2)	(0.1)	(0.3)	(0.1)
Total operating lease expense	2.4	2.8	4.8	5.9
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	2.2	3.5	4.4	6.1
Right of use assets obtained in exchange for new operating lease liabilities	$ 1.8	$ 1.5	$ 1.8	$ 1.6

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Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Leases [Abstract]
2022 (excluding the six months ended June 30, 2022)	$ 2.0
2023	8.9
2024	8.4
2025	8.1
2026	8.1
Thereafter	56.5
Total lease payments	92.0
Less imputed interest	(15.9)
Total	$ 76.1	$ 77.6

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Commitments and Contingencies (Details) - USD ($) $ in Millions	Jun. 30, 2022	Jan. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Cash and cash equivalents pertaining to wind-down	$ 1.5
Deposit guaranty on behalf of an Affiliate	0.0	$ 2.5
Money market funds	$ 20.6

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Earnings Per Share - Calculation of Pro Forma Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Income from continuing operations attributable to controlling interests	$ 28.6	$ 24.7	$ 52.4	$ 43.2
Net income from discontinued operations attributable to controlling interests	0.0	508.0	0.0	516.5
Net income attributable to controlling interests	$ 28.6	$ 532.7	$ 52.4	$ 559.7
Denominator:
Weighted-average shares of common stock outstanding—basic (in shares)	41,425,555	79,351,567	42,690,683	79,335,650
Potential shares of common stock:
Weighted average diluted common stock outstanding (in shares)	42,518,125	82,926,124	43,915,806	82,623,485
Basic
Continuing operations (in dollars per share)	$ 0.69	$ 0.31	$ 1.23	$ 0.54
Discontinued operations (in dollars per share)	0	6.40	0	6.51
Basic earnings per share of common stock attributable to controlling interests (in dollars per share)	0.69	6.71	1.23	7.05
Diluted
Continuing operations (in dollars per share)	0.67	0.29	1.19	0.52
Discontinued operations (in dollars per share)	0	6.13	0	6.25
Diluted earnings per share of common stock attributable to controlling interests (in dollars per share)	$ 0.67	$ 6.42	$ 1.19	$ 6.77
Restricted stock units
Potential shares of common stock:
Restricted stock units/Employee stock options (in shares)	6,935	23,323	8,523	29,472
Employee stock options
Potential shares of common stock:
Restricted stock units/Employee stock options (in shares)	1,085,635	3,551,234	1,216,600	3,258,363

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Revenue - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue from Contract with Customer [Abstract]
Revenue from expense reimbursement	$ 0	$ 1,200,000	$ 0	$ 2,200,000

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Revenue - Schedule of Disaggregation of Revenue (Details) - Management fees - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Management fee revenue	$ 93.5	$ 111.6	$ 195.7	$ 215.4
Quant & Solutions | U.S.
Disaggregation of Revenue [Line Items]
Management fee revenue	71.2	80.0	148.2	154.4
Quant & Solutions | Non-U.S.
Disaggregation of Revenue [Line Items]
Management fee revenue	22.3	26.0	47.5	50.5
Other | U.S.
Disaggregation of Revenue [Line Items]
Management fee revenue	0.0	4.1	0.0	7.8
Other | Non-U.S.
Disaggregation of Revenue [Line Items]
Management fee revenue	$ 0.0	$ 1.5	$ 0.0	$ 2.7

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Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jan. 18, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance		$ (97.9)	$ 430.0	$ (17.6)	$ 384.4
Foreign currency translation adjustment		(2.4)	0.1	(3.1)	1.2
Amortization related to derivatives securities, before tax		0.8	0.8	3.0	1.6
Tax impact		(0.2)	(0.2)	(0.8)	(0.4)
Total other comprehensive income (loss)		(1.8)	0.7	(0.9)	2.4
Ending balance		$ (71.0)	863.9	$ (71.0)	863.9
Amortization	$ 1.3
Senior Notes, 5.125%, due 2031 | Senior notes
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Debt repayments	$ 125.0
Stated interest rate	5.125%	5.125%		5.125%
Foreign currency translation adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance		$ 4.1	5.5	$ 4.8	4.4
Foreign currency translation adjustment		(2.4)	0.1	(3.1)	1.2
Amortization related to derivatives securities, before tax		0.0	0.0	0.0	0.0
Tax impact		0.0	0.0	0.0	0.0
Total other comprehensive income (loss)		(2.4)	0.1	(3.1)	1.2
Ending balance		1.7	5.6	1.7	5.6
Valuation and amortization of derivative securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance		(14.0)	(17.4)	(15.6)	(18.0)
Foreign currency translation adjustment		0.0	0.0	0.0	0.0
Amortization related to derivatives securities, before tax		0.8	0.8	3.0	1.6
Tax impact		(0.2)	(0.2)	(0.8)	(0.4)
Total other comprehensive income (loss)		0.6	0.6	2.2	1.2
Ending balance		(13.4)	(16.8)	(13.4)	(16.8)
Total
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance		(9.9)	(11.9)	(10.8)	(13.6)
Ending balance		$ (11.7)	$ (11.2)	$ (11.7)	$ (11.2)

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Derivatives and Hedging (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Jan. 18, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020	Jul. 31, 2016	Jul. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive income		$ (71.0)	$ 863.9	$ (71.0)	$ 863.9	$ (97.9)	$ (17.6)	$ 430.0	$ 384.4
Interest expense		$ 4.8	6.3	$ 11.3	12.5
Amortization	$ 1.3
Senior Notes, 5.125%, due 2031 | Senior notes
Derivative Instruments, Gain (Loss) [Line Items]
Debt repayments	$ 125.0
Stated interest rate	5.125%	5.125%		5.125%
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from AOCI to interest expense		$ 0.8	0.8	$ 3.0	1.6
Loss amount reclassified within twelve months				3.3
Valuation and amortization of derivative securities
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive income		(13.4)	(16.8)	(13.4)	(16.8)	(14.0)	(15.6)	(17.4)	(18.0)
Accumulated other comprehensive income (loss)
Derivative Instruments, Gain (Loss) [Line Items]
Other comprehensive income		$ (11.7)	$ (11.2)	(11.7)	$ (11.2)	$ (9.9)	$ (10.8)	$ (11.9)	$ (13.6)
Accumulated other comprehensive income (loss) | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense				$ 3.0
Treasury Lock | Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount											$ 300.0
Fair value of derivative										$ (34.4)

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Segments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting Information [Line Items]
ENI revenue	$ 95.5	$ 133.3	$ 207.7	$ 243.0
ENI operating expenses	25.6	61.3	64.8	113.2
Earnings before variable compensation	69.9	72.0	142.9	129.8
Variable compensation	22.7	32.7	50.6	56.7
ENI operating earnings (after variable comp)	47.2	39.3	92.3	73.1
Affiliate key employee distributions	0.5	3.2	2.4	4.5
Earnings after Affiliate key employee distributions	46.7	36.1	89.9	68.6
Net interest expense	(4.7)	(6.2)	(11.2)	(12.4)
Net investment income (loss)	(0.7)	4.7	(0.8)	7.3
Gain on sale of Affiliates			0.0	(1.3)
Net income attributable to non-controlling interests in consolidated Funds	0.0	(54.6)	0.0	(68.0)
Income tax expense	(12.7)	(9.9)	(22.3)	(19.0)
Income from discontinued operations, net of tax	0.0	53.4	0.0	75.3
Loss on extinguishment of debt	0.0	0.0	(3.2)	0.0
Gain on disposal of discontinued operations, net of tax	0.0	509.2	0.0	509.2
Net income attributable to controlling interests	28.6	532.7	52.4	559.7
Tax effect	0.0	176.6	0.0	176.6
Operating Segments | Quant & Solutions
Segment Reporting Information [Line Items]
ENI revenue	95.5	111.1	207.7	214.6
ENI operating expenses	39.7	38.3	80.8	77.4
Earnings before variable compensation	55.8	72.8	126.9	137.2
Variable compensation	21.7	22.0	48.0	44.6
ENI operating earnings (after variable comp)	34.1	50.8	78.9	92.6
Affiliate key employee distributions	0.5	3.1	2.4	4.6
Earnings after Affiliate key employee distributions	33.6	47.7	76.5	88.0
Net interest expense	0.0	0.0	0.0	0.0
Net investment income (loss)	0.0	0.0	0.0	0.0
Gain on sale of Affiliates				0.0
Net income attributable to non-controlling interests in consolidated Funds		0.0		0.0
Income tax expense	0.0	0.0	0.0	0.0
Income from discontinued operations, net of tax		0.0		0.0
Loss on extinguishment of debt			0.0
Gain on disposal of discontinued operations, net of tax		0.0		0.0
Net income attributable to controlling interests	33.6	47.7	76.5	88.0
Other
Segment Reporting Information [Line Items]
ENI revenue	0.0	22.3	0.0	28.6
ENI operating expenses	4.4	9.5	8.9	19.2
Earnings before variable compensation	(4.4)	12.8	(8.9)	9.4
Variable compensation	1.0	10.4	2.6	11.3
ENI operating earnings (after variable comp)	(5.4)	2.4	(11.5)	(1.9)
Affiliate key employee distributions	0.0	0.1	0.0	(0.1)
Earnings after Affiliate key employee distributions	(5.4)	2.3	(11.5)	(1.8)
Net interest expense	(4.6)	(5.4)	(9.2)	(10.8)
Net investment income (loss)	0.0	0.0	0.0	0.0
Gain on sale of Affiliates				0.0
Net income attributable to non-controlling interests in consolidated Funds		0.0		0.0
Income tax expense	(6.3)	(11.7)	(15.1)	(20.0)
Income from discontinued operations, net of tax		0.0		0.0
Loss on extinguishment of debt			0.0
Gain on disposal of discontinued operations, net of tax		0.0		0.0
Net income attributable to controlling interests	(16.3)	(14.8)	(35.8)	(32.6)
Reconciling Adjustments
Segment Reporting Information [Line Items]
ENI revenue	0.0	(0.1)	0.0	(0.2)
ENI operating expenses	(18.5)	13.5	(24.9)	16.6
Earnings before variable compensation	18.5	(13.6)	24.9	(16.8)
Variable compensation	0.0	0.3	0.0	0.8
ENI operating earnings (after variable comp)	18.5	(13.9)	24.9	(17.6)
Affiliate key employee distributions	0.0	0.0	0.0	0.0
Earnings after Affiliate key employee distributions	18.5	(13.9)	24.9	(17.6)
Net interest expense	(0.1)	(0.8)	(2.0)	(1.6)
Net investment income (loss)	(0.7)	4.7	(0.8)	7.3
Gain on sale of Affiliates				(1.3)
Net income attributable to non-controlling interests in consolidated Funds		(54.6)		(68.0)
Income tax expense	(6.4)	1.8	(7.2)	1.0
Income from discontinued operations, net of tax		53.4		75.3
Loss on extinguishment of debt			(3.2)
Gain on disposal of discontinued operations, net of tax		509.2		509.2
Net income attributable to controlling interests	$ 11.3	$ 499.8	$ 11.7	$ 504.3