AAMI · Read the filing

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to the “Company”, “Acadian Asset Management”, “Acadian” or “AAMI” refer to Acadian Asset Management Inc., and references to “we,” “our” and “us” refer to AAMI and its consolidated subsidiaries. References to Hold Co refer to AAMI and its subsidiaries excluding Acadian Asset Management LLC (“Acadian LLC”). Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “OM plc” refer to Old Mutual plc, our former parent. None of the information in this Annual Report on Form 10-K constitutes either an offer or a solicitation to buy or sell Acadian LLC’s products or services, nor is any such information a recommendation for Acadian LLC’s products or services.

The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes which appear in this Annual Report on Form 10-K in Item 8, Financial Statements and Supplementary Data.

This discussion contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements” 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 and elsewhere in this Annual Report on Form 10-K.

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, 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 client location, and net flows by segment, client type and client location.

•U.S. GAAP Results of Operations for the years ended December 31, 2024, 2023 and 2022 includes an explanation of changes in our U.S. GAAP revenue, expense and other items over the last three years 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 years ended December 31, 2024, 2023 and 2022, 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 segment.

•Capital Resources and Liquidity discusses our key balance sheet data. This section discusses Cash Flows from the business; Working Capital and Long-Term Debt;Adjusted EBITDA; Future Capital Needs; and Commitments, Contingencies and Off-Balance Sheet Obligations. 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.

Overview

We are a holding company that operates a systematic investment management business through our majority owned subsidiary, Acadian LLC. Acadian LLC offers institutional investors across the globe access to a diversified array of systematic investment strategies designed to meet a range of risk and return objectives. Acadian LLC is a leading systematic investment manager of active equity products, including global, emerging market, international, and small cap equities, as well as credit and alternative strategies. Acadian LLC comprises our Quant & Solutions reportable segment:

•Quant & Solutions—comprised of strategies that leverage cutting-edge technology to gather and analyze data to identify mispriced assets to deliver attractive risk-adjusted returns for investors; portfolios include developed and developing markets for equity, credit and alternative strategies. This segment is comprised of our interest in Acadian LLC.

Hold Co is included within the Unallocated Corporate expenses category.

Under U.S. GAAP, Acadian LLC is consolidated into our financial statements. We may also be required to consolidate Acadian LLC’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.

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. The majority of our management fees are 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. Changes in the levels of our AUM are driven by market investment performance and net client cash flows. We may also earn performance fees when certain accounts differ in relation to relevant benchmarks or exceed required returns. Approximately $20 billion, or 17%, of our AUM are in accounts with incentive fee features 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 is comprised of variable compensation at both Hold Co and Acadian LLC. Hold Co variable compensation includes discretionary annual bonuses and may be paid in the form of cash or AAMI equity. Acadian LLC variable compensation, calculated as described below, may be awarded in cash, equity, or profit interests.

The arrangement in place with Acadian LLC results in the sharing of economics between us and 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 Acadian LLC’s equity or profit interests distribution to its employees.

Variable compensation includes the portion of earnings that is contractually allocated to Acadian LLC employees as a bonus pool, typically representing a 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 LLC 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 LLC key employees and ours 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 LLC key employees are awarded as part of their variable compensation arrangement. Over time, Acadian LLC 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 LLC equity or profit interests. The recycling of equity or profit interests is often facilitated by Hold Co; see “—U.S. GAAP Results of Operations—U.S. GAAP Expenses—Compensation and Benefits Expense” for a further discussion. Employee equity is valued at a fixed multiple of profits, so employees have transparency into both their earning potential in any year from the bonus pool and share of profits, as well as the current value of their equity and the long-term potential to realize value from its growth.

In this structure, key employees who are managing the business have incentives to manage for profit, but also to manage the business prudently, in the interest of their clients, and invest for growth, since they will benefit over the long term as both employees and equity holders. In this way, key employees are aligned with the public stockholders to generate profits and growth over time.

How We Measure Performance

We manage our business based on one 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 Acadian LLC 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.

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 Acadian LLC equity and profit interests held by 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. 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.

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 Acadian LLC key employee owned equity and profit interests, amortization and impairment of acquired intangibles and other acquisition-related items, 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 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.”

Summary Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31, Increase (Decrease)

U.S. GAAP Basis

Diluted shares outstanding (in millions) 38.3 42.5 43.2 (4.2) (0.7)

Economic Net Income Basis(2)(3)

(Non-GAAP measure used by management)

Other Operational Information

Net client cash flows (in billions) 1.8 (2.3) (3.1) 4.1 0.8

(1)U.S. GAAP operating margin equals operating income 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 severance-related items of $(1.0) million, costs associated with the transfer of an insurance policy from our former parent of $1.3 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million for the year ended December 31, 2024. Excludes severance costs of $7.3 million, legal-related restructuring costs at the Hold Co of $0.9 million, and costs associated with the transfer of an insurance policy from our former parent of $1.3 million for the year ended December 31, 2023. Excludes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $1.2 million for the year ended December 31, 2022.

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

(5)Pre-tax economic net income is the ENI measure which corresponds to U.S. GAAP pre-tax income 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 is most directly comparable to our U.S. GAAP operating margin (excluding the effect of consolidated Funds).

(7)Economic net income is the non-GAAP measure which is most directly comparable to U.S. GAAP net income attributable to controlling interests.

Assets Under Management

Our total assets under management as of December 31, 2024 were $117.3 billion. The following table presents our assets under management as of each of the dates indicated:

Our strategies include:

i.Developed Markets, which includes U.S., global and international strategies; and

ii.Developing Markets, which includes investments in the emerging and frontier markets.

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

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

AUM % of total AUM % of total AUM % of total

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

AUM % of total AUM % of total AUM % of total

AUM flows

Net client cash flows for all periods include reinvested income and distributions. Reinvested income and distributions represent investment yield that is reinvested back into the portfolios as opposed to distributed as cash.

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

($ in billions, unless otherwise noted) Years ended December 31,

Quant & Solutions

Reinvested income and distributions 3.3 3.6 3.8

Market appreciation (depreciation) 11.8 12.4 (20.5)

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 Acadian LLC, defined contribution plans and accounts managed for high net worth clients.

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

($ in billions) Years ended December 31,

Sub-advisory

Gross outflows (5.0) (2.1) (1.8)

Reinvested income and distributions 0.4 0.5 0.5

Net flows (3.1) (0.1) —

Market appreciation (depreciation) 1.2 1.1 (2.3)

Institutional

Reinvested income and distributions 2.7 2.9 3.1

Market appreciation (depreciation) 9.3 10.4 (16.9)

Retail / Other

Beginning balance $ 6.6 $ 4.6 $ 5.3

Gross outflows (1.4) (0.6) (1.1)

Reinvested income and distributions 0.2 0.2 0.2

Market appreciation (depreciation) 1.3 0.9 (1.3)

Ending balance $ 8.5 $ 6.6 $ 4.6

Total

Reinvested income and distributions 3.3 3.6 3.8

Market appreciation (depreciation) 11.8 12.4 (20.5)

Our categorization of assets under management 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) Years ended December 31,

U.S.

Reinvested income and distributions 2.1 2.4 2.6

Market appreciation (depreciation) 7.9 8.5 (14.0)

Non-U.S.

Gross outflows (9.5) (6.1) (9.0)

Reinvested income and distributions 1.2 1.2 1.2

Market appreciation (depreciation) 3.9 3.9 (6.5)

Total

Reinvested income and distributions 3.3 3.6 3.8

Market appreciation (depreciation) 11.8 12.4 (20.5)

At December 31, 2024, our total assets under management were $117.3 billion, an increase of $13.6 billion or 13.1%, compared to $103.7 billion at December 31, 2023. The assets under management at December 31, 2023 represented an increase of $10.1 billion or 10.8% compared to $93.6 billion at December 31, 2022. The change in assets under management during the year ended December 31, 2024 reflects net market appreciation of $11.8 billion and net flows of $1.8 billion, including reinvested income and distributions of $3.3 billion. The change in assets under management during the year ended December 31, 2023 reflects net market appreciation of $12.4 billion and net flows of $(2.3) billion, including reinvested income and distributions of $3.6 billion. The change in assets under management during the year ended December 31, 2022 reflects net market depreciation of $(20.5) billion and net flows of $(3.1) billion, including reinvested income and distributions of $3.8 billion.

For the year ended December 31, 2024, our net inflows were $1.8 billion compared to net outflows of $(2.3) billion for the year ended December 31, 2023 and net outflows of $(3.1) billion for the year ended December 31, 2022. The change in net flows for the year ended December 31, 2024 was primarily driven by gross sales, which increased to $21.2 billion for the year ended December 31, 2024. The change in net flows for the year ended December 31, 2023 was primarily due to lower outflows in certain strategies, partly as a result of client-driven asset re-allocations. The change in net flows for the year ended December 31, 2022 was primarily due to lower outflows in certain strategies, partly as the result of improved relative investment performance in the year ended December 31, 2022. Reinvested income and distributions of $3.3 billion, $3.6 billion, and $3.8 billion are reflected in the net flows for the years ended December 31, 2024, 2023 and 2022, respectively.

U.S. GAAP Results of Operations

For the Years Ended December 31, 2024, 2023 and 2022

Our U.S. GAAP results of operations were as follows for the years ended December 31, 2024, 2023 and 2022.

Years ended December 31, Increase (Decrease)

U.S. GAAP Consolidated Statements of Operations(1)

Amortization of acquired intangibles — — 0.1 — (0.1)

Loss on extinguishment of debt — — (3.2) — 3.2

Net consolidated Funds’ investment gains (losses) 3.9 4.1 (0.4) (0.2) 4.5

(1)Certain Funds have been consolidated due to our seed capital investments in the Funds.

(2)U.S. GAAP operating margin equals operating income divided by total revenue.

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

Years ended December 31,

U.S. GAAP Consolidated Statements of Operations

Net income attributable to controlling interests $ 85.0 $ 65.8 $ 100.6

Pre-tax income attributable to controlling interests $ 123.9 $ 95.2 $ 144.8

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 investment performance over agreed time periods for certain clients has differed from pre-determined hurdles; and

iii.revenue from consolidated Funds, a portion of which is attributable to the holders of non-controlling interests in consolidated Funds.

Management Fees

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

Average basis points earned on average assets under management were 38.4 bps for the year ended December 31, 2024, 37.9 bps for the year ended December 31, 2023 and 37.2 bps for the year ended December 31, 2022. The greatest driver of increases or decreases in the average fee rate are changes in the mix of our assets under management caused by net inflows or outflows in certain asset classes, and disproportionate market movements.

Year ended December 31, 2024 compared to year ended December 31, 2023: Management fees increased $57.9 million, or 15.5%, from $373.2 million for the year ended December 31, 2023 to $431.1 million for the year ended December 31, 2024. The increase was mainly driven by higher levels of average assets under management and an improvement in blended average basis points on assets under management, due to fee rates on inflows being higher than fee rates on outflows in the years ended December 31, 2024 and 2023. Average assets under management increased 14.1%, from $98.4 billion for the year ended December 31, 2023 compared to $112.3 billion for the year ended December 31, 2024, mainly due to the positive equity market in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022: Management fees increased $5.8 million, or 1.6%, from $367.4 million for the year ended December 31, 2022 to $373.2 million for the year ended December 31, 2023. The increase was primarily due to an improvement in blended average basis points on assets under management, due to fee rates on inflows being higher than fee rates on outflows in 2022 and 2023. Average assets under management decreased (0.3)%, from $98.7 billion for the year ended December 31, 2022 to $98.4 billion for the year ended December 31, 2023, mainly due to large equity market declines in 2022 that reduced the beginning of 2023 assets under management to $93.6 billion.

Performance Fees

Approximately $20 billion, or 17% of our AUM at December 31, 2024, were in accounts with performance fee features in which we participate. Performance fees are typically shared with key employees through various contractual compensation and profit-sharing arrangements.

Year ended December 31, 2024 compared to year ended December 31, 2023: Performance fees increased $21.0 million, or 41.7%, from $50.4 million for the year ended December 31, 2023 to $71.4 million for the year ended December 31, 2024, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

Year ended December 31, 2023 compared to year ended December 31, 2022: Performance fees increased $1.0 million, or 2.0%, from $49.4 million for the year ended December 31, 2022 to $50.4 million for the year ended December 31, 2023, primarily due to strong performance relative to benchmarks in certain strategies. Performance fees are variable and are contractually triggered based on investment performance results over agreed upon time periods.

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, Acadian LLC key employee distributions, and revaluation of key employee-owned Acadian LLC equity and profit interests;

ii.general and administrative expenses;

iii.amortization of acquired intangible assets;

iv.depreciation and amortization charges; and

v.expenses of consolidated Funds, a portion of which is attributable to the holders of non-controlling interests in consolidated Funds.

Compensation and Benefits Expense

Our most significant category of expense is compensation and benefits awarded to our employees. The following table presents the components of U.S. GAAP compensation expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Fixed compensation and benefits(1) $ 97.8 $ 93.1 $ 86.1

Acadian LLC key employee distributions(4) 9.7 5.1 5.1

Non-cash Acadian LLC key employee equity revaluations(5) 23.2 (0.1) (40.0)

Total U.S. GAAP compensation and benefits expense $ 265.5 $ 217.9 $ 159.2

(1)Fixed compensation and benefits includes base salaries, payroll taxes and the cost of benefit programs provided.

(2)Sales-based compensation is paid to our 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 includes the portion of earnings that is contractually allocated to Acadian LLC employees as a bonus pool, plus Hold Co bonuses. Variable compensation may be paid in the form of cash or non-cash equity or profit interests awards. We have a contractual split of performance fees between Acadian LLC employees and AAMI. Acadian LLC’s share of performance fees, which ranges between 60%-75% of the total, is allocated entirely to variable compensation. The variable compensation earned on performance fees vests over three-years and compensation expense is recognized over that service period. Hold Co 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.

Years ended December 31,

Non-cash equity-based award amortization 6.9 6.3 9.5

(a)For the year ended December 31, 2024, $122.8 million of variable compensation expense (of the $122.7 million above) is included within economic net income, which excludes the variable compensation associated with restructuring of $(1.0) million and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million. For the year ended December 31, 2023, $104.9 million of variable compensation expense (of the $112.2 million above) is included within economic net income, which excludes the variable compensation associated with restructuring of $7.3 million. For the year ended December 31, 2022, $100.3 million of variable compensation expense (of the $100.3 million above) is included within economic net income.

(4)Acadian LLC key employee distributions represent the share of Acadian LLC profits after variable compensation that is attributable to key employee equity and profit interests holders, according to their ownership interests. Acadian LLC key employee distribution ratio is calculated as Acadian LLC key employee distributions divided by ENI operating earnings. Within Acadian LLC we have a tiered equity structure, where AAMI 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 Acadian LLC key employee equity revaluations represent changes in the value of Acadian LLC equity and profit interests held by key employees. These ownership interests may in certain circumstances be repurchased by Hold Co 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 Hold Co 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. The Acadian LLC equity and profit interest plans have been designed to ensure Hold Co is not required to repurchase more equity than we can reasonably recycle through variable compensation awards in any given twelve-month period.

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

Year ended December 31, 2024 compared to year ended December 31, 2023: Compensation and benefits expense increased $47.6 million, or 21.8%, from $217.9 million for the year ended December 31, 2023 to $265.5 million for the year ended December 31, 2024. Fixed compensation and benefits increased $4.7 million, or 5.0%, from $93.1 million for the year ended December 31, 2023 to $97.8 million for the year ended December 31, 2024, primarily reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring at Acadian LLC in late 2023. Variable compensation increased $10.5 million, or 9.4%, from $112.2 million for the year ended December 31, 2023 to $122.7 million for the year ended December 31, 2024. The increase was primarily attributable to higher pre-bonus profits in the year ended December 31, 2024, partially offset by lower restructuring expenses in the current year. Sales-based compensation increased $4.5 million, or 59.2%, from $7.6 million for the year ended December 31, 2023 to $12.1 million for the year ended December 31, 2024, driven by higher gross sales in the current year. Acadian LLC key employee distributions increased $4.6 million, or 90.2%, from $5.1 million for the year ended December 31, 2023 to $9.7 million for the year ended December 31, 2024. Acadian LLC key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Acadian LLC key employee distributions during the current period is driven by higher operating earnings in the current period and the leveraged nature of this distribution share. Revaluations of Acadian LLC key employee equity changed by $23.3 million in 2024, reflecting revaluations of key employee ownership interests at Acadian LLC, as the value of the equity plan liability decreased $(0.1) million for the year ended December 31, 2023, and increased $23.2 million for the year ended December 31, 2024. For certain tiers of Acadian LLC equity, revaluations are calculated based on earnings above a threshold. The change in the revaluation in the current period is driven by higher earnings period over period, including earnings over the threshold for certain Acadian LLC equity.

Year ended December 31, 2023 compared to year ended December 31, 2022: Compensation and benefits expense increased $58.7 million, or 36.9%, from $159.2 million for the year ended December 31, 2022 to $217.9 million for the year ended December 31, 2023. Fixed compensation and benefits increased $7.0 million, or 8.1%, from $86.1 million for the year ended December 31, 2022 to $93.1 million for the year ended December 31, 2023, primarily reflecting cost of living increases and the new hires to support our growth initiatives. Variable compensation increased $11.9 million, or 11.9%, from $100.3 million for the year ended December 31, 2022 to $112.2 million for the year ended December 31, 2023. The increase was primarily attributable to severance-related costs in the year ended December 31, 2023 and the inclusion of deferred compensation expense earned on current and prior year performance fee revenues, of which Acadian LLC’s share is determined by a contractual split and recognized as compensation expense over a vesting period. Sales-based compensation decreased $(0.1) million, or (1.3)%, from $7.7 million for the years ended December 31, 2022 to $7.6 million for the year ended December 31, 2023 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. Acadian LLC key employee distributions were unchanged at $5.1 million for the year ended December 31, 2023 and 2022, respectively. Revaluations of Acadian LLC key employee equity changed by $39.9 million in 2023, reflecting revaluations of key employee ownership interests at Acadian LLC, as the value of the equity plan liability decreased $(40.0) million for the year ended December 31, 2022, and decreased $(0.1) million for the year ended December 31, 2023. The changes in value year over year reflect changes in earnings, as well as changes in inputs used in the valuation model, including market risk assumptions and discount rates.

General and Administrative Expense

Year ended December 31, 2024 compared to year ended December 31, 2023: General and administrative expense increased $2.6 million, or 3.1%, from $82.6 million for the year ended December 31, 2023 to $85.2 million for the year ended December 31, 2024. The increase was primarily due to higher systems, outside services and portfolio administrative costs, our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Year ended December 31, 2023 compared to year ended December 31, 2022: General and administrative expense increased $11.5 million, or 16.2%, from $71.1 million for the year ended December 31, 2022 to $82.6 million for the year ended December 31, 2023. The increase was primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

Amortization of Acquired Intangibles Expense

Year ended December 31, 2024 compared to year ended December 31, 2023: There was no amortization of acquired intangibles expense for the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022: Amortization of acquired intangibles expense was $0.1 million for the year ended December 31, 2022. There was no amortization of acquired intangibles expense for the year ended December 31, 2023. This account reflects the amortization of intangible assets acquired in previous periods.

Depreciation and Amortization Expense

Year ended December 31, 2024 compared to year ended December 31, 2023: Depreciation and amortization expense increased $1.2 million, or 6.9%, from $17.3 million for the year ended December 31, 2023 to $18.5 million for the year ended December 31, 2024. The increase was primarily attributable to additional software and technology investments in the business.

Year ended December 31, 2023 compared to year ended December 31, 2022: Depreciation and amortization expense decreased $(1.2) million, or (6.5)%, from $18.5 million for the year ended December 31, 2022 to $17.3 million for the year ended December 31, 2023. The decrease was primarily attributable to the effect of certain assets becoming fully depreciated.

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

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

i.investment income (loss);

ii.interest income;

iii.interest expense; and

iv.loss on extinguishment of debt

Investment Income (loss)

Year ended December 31, 2024 compared to year ended December 31, 2023: Investment income increased $2.3 million, from $(0.1) million for the year ended December 31, 2023 to $2.2 million for the year ended December 31, 2024, reflecting an increase in returns generated by seed capital investments due to market appreciation in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022: Investment income (loss) changed $(0.3) million, from $0.2 million for the year ended December 31, 2022 to $(0.1) million for the year ended December 31, 2023. The decrease is due to a decrease in returns generated by seed capital investments in the year ended December 31, 2023.

Interest Income

Year ended December 31, 2024 compared to year ended December 31, 2023: Interest income decreased $(2.6) million, from $6.1 million for the year ended December 31, 2023 to $3.5 million for the year ended December 31, 2024. The decrease was due to lower average cash balances and decreases in short-term investment returns in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022: Interest income increased $5.3 million, from $0.8 million for the year ended December 31, 2022 to $6.1 million for the year ended December 31, 2023. The increase was due to higher average cash balances and an increase in short-term investment returns in 2023.

Interest Expense

Year ended December 31, 2024 compared to year ended December 31, 2023: Interest expense decreased $0.2 million, or 1.0%, from $19.6 million for the year ended December 31, 2023 to $19.4 million for the year ended December 31, 2024, reflecting lower interest rates in the current year, partially offset by higher balances drawn on the revolving credit facility in the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022: Interest expense decreased $0.9 million, or 4.4%, from $20.5 million for the year ended December 31, 2022 to $19.6 million for the year ended December 31, 2023, primarily due to the $1.3 million of additional interest expense incurred for the year ended December 31, 2023 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

Year ended December 31, 2024 compared to year ended December 31, 2023: There was no loss on extinguishment of debt for the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022: There was no loss on extinguishment of debt for the year ended December 31, 2023. Loss on extinguishment of debt was $3.2 million for the year ended December 31, 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.

U.S. GAAP Income Tax Expense

Our effective tax rate has been impacted by state and local tax obligations, changes in liabilities for uncertain tax positions, tax effects of stock-based compensation, limitations on executive compensation, and the mix of income earned in the United States versus 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.

Year ended December 31, 2024 compared to year ended December 31, 2023: Income tax expense increased $9.5 million, from $29.4 million for the year ended December 31, 2023 to $38.9 million for the year ended December 31, 2024. The increase in income tax expense is primarily related to the increase in pre-tax income from controlling interests for the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022: Income tax expense decreased $(14.8) million, from $44.2 million for the year ended December 31, 2022 to $29.4 million for the year ended December 31, 2023. The decrease in income tax expense is primarily related to the decrease in pre-tax income from controlling interests for the year ended December 31, 2023.

U.S. GAAP Consolidated Funds

The net income or loss of all consolidated Funds, excluding any income or loss attributable to seed capital or co-investments we make in the Funds, is included in non-controlling interests in our Consolidated Financial Statements and is not included in net income attributable to controlling interests or in management fees.

Year ended December 31, 2024 compared to year ended December 31, 2023: Consolidated Funds’ revenue increased $0.1 million, from $3.0 million for the year ended December 31, 2023 to $3.1 million for the year ended December 31, 2024. Consolidated Funds’ expense decreased $(1.9) million, from $2.8 million for the year ended December 31, 2023 to $0.9 million for the year ended December 31, 2024. These movements relate to the underlying activity of our consolidated Funds.

Year ended December 31, 2023 compared to year ended December 31, 2022: Consolidated Funds’ revenue increased $2.6 million from $0.4 for the year ended December 31, 2022 to $3.0 million for the year ended December 31, 2023. Consolidated Funds’ expense increased $2.4 million from $0.4 million for the year ended December 31, 2022 to $2.8 million for the year ended December 31, 2023. The increase in Consolidated Funds’ revenue and increase in Consolidated Funds’ expense is due to changes in the population of Consolidated Funds during the year ended December 31, 2023.

Key U.S. GAAP Operating Metrics

The following table shows our key U.S. GAAP operating metrics for the years ended December 31, 2024, 2023 and 2022. The second, third and fourth metrics below have each been adjusted to eliminate the effect of consolidated Funds to more accurately reflect the economics of our Company.

Years ended December 31,

U.S. GAAP operating expense / management fee revenue(3) 85.6 % 85.2 % 67.7 %

U.S. GAAP variable compensation ratio(3) 46.2 % 50.3 % 36.7 %

Numerator: Acadian LLC key employee distributions $ 9.7 $ 5.1 5.1

U.S. GAAP Acadian LLC key employee distributions ratio(3) 6.8 % 4.6 % 2.9 %

(1)Excluding the effect of Funds’ consolidation in the applicable periods, the U.S. GAAP operating margin would be 26.5% for the year ended December 31, 2024, 25.0% for the year ended December 31, 2023 and 40.3% for the year ended December 31, 2022.

(2)Excludes consolidated Funds’ expense of $0.9 million for the year ended December 31, 2024, $2.8 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

(3)Excludes the effect of Funds’ consolidation for the years ended December 31, 2024, 2023 and 2022.

(4)Excludes consolidated Funds’ revenue of $3.1 million for the year ended December 31, 2024, $3.0 million for the year ended December 31, 2023 and $0.4 million for the year ended December 31, 2022.

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

Years ended December 31,

Acadian LLC key employee distributions 9.7 5.1 5.1

Operating (income) loss of consolidated Funds (2.2) (0.2) —

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 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 Acadian LLC. 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 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 the Company by consolidated Funds.

•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 Acadian LLC key employee distributions, which represent Acadian LLC earnings shared with key employees.

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 Acadian LLC equity and profit interests held by key employees. These ownership interests may in certain circumstances be repurchased by Hold Co 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 Hold Co 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 equity and profit interest plans have been designed to ensure Hold Co 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.

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, 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 Years Ended December 31, 2024, 2023 and 2022

The following table reconciles U.S. GAAP net income attributable to controlling interests to economic net income for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

U.S. GAAP net income attributable to controlling interests $ 85.0 $ 65.8 $ 100.6

Adjustments to reflect the economic earnings of the Company:

ii. Goodwill impairment and amortization of acquired intangible assets — — 0.1

iii. Capital transaction costs 0.3 0.3 5.2

iv. Seed/Co-investment (gains) losses and financings(1) (2.8) (1.5) 0.6

v. Tax benefit of goodwill and acquired intangibles deductions 1.5 1.5 1.5

vii. ENI tax normalization(3) 3.1 2.4 3.3

Tax effect of above adjustments, as applicable(4) (6.1) (2.2) 9.0

(1)The net return on seed/co-investment (gains) losses and financings for the years ended December 31, 2024, 2023 and 2022 are shown in the following table.

Years ended December 31,

Seed/Co-investment (gains) losses $ (6.5) $ (2.9) $ 0.2

Financing costs:

Seed/Co-investment average balance 57.5 22.1 6.1

Blended interest rate* 6.5 % 6.5 % 6.5 %

Net seed/co-investment (gains) losses and financing $ (2.8) $ (1.5) $ 0.6

* The blended rate is based on the weighted average rate of the long-term debt.

(2)For the year ended December 31, 2024, includes severance-related items of $(1.0) million, costs associated with the transfer of an insurance policy from our former parent of $1.3 million, and costs associated with the wind-down of the MACS business in the standalone format of $1.3 million. For the year ended December 31, 2023, includes severance costs of $7.3 million, legal-related restructuring costs at the Hold Co of $0.9 million, and costs associated with the transfer of an insurance policy from our former parent of $1.3 million. For the year ended December 31, 2022, includes restructuring costs of $0.1 million and costs associated with the transfer of an insurance policy from our former parent of $1.2 million.

(3)Includes adjustments of $(0.3) million, $(0.2) million and $0.2 million to remove the tax benefit (expense) resulting from the change in liabilities for uncertain tax positions recorded during the years ended December 31, 2024, 2023 and 2022, respectively.

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

The following table reconciles U.S. GAAP net income per share to economic net income per share for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

U.S. GAAP net income per share $ 2.22 $ 1.55 $ 2.33

Adjustments to reflect the economic earnings of the Company:

ii. Goodwill impairment and amortization of acquired intangible assets — — —

iv. Seed/Co-investment (gains) losses and financings (0.07) (0.04) 0.01

v. Tax benefit of goodwill and acquired intangibles deductions 0.04 0.04 0.03

vi. Discontinued operations and restructuring 0.03 0.21 0.03

Tax effect of above adjustments (0.16) (0.05) 0.21

Economic net income per share $ 2.76 $ 1.78 $ 1.89

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 years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Exclude revenue from consolidated Funds (3.1) (3.0) (0.4)

The following table identifies the components of ENI revenue:

Years ended December 31,

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

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

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 Acadian LLC 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.

The following table reconciles U.S. GAAP operating expense to ENI operating expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Less: items excluded from economic net income

Non-cash key employee equity and profit interest revaluations (23.2) 0.1 40.0

Amortization of acquired intangible assets — — (0.1)

Capital transaction costs — — —

Restructuring costs(1) (1.6) (9.5) (1.3)

Funds’ operating expenses (0.9) (2.8) (0.4)

Less: items segregated out of U.S. GAAP operating expense

Acadian LLC key employee distributions (9.7) (5.1) (5.1)

(1)For the year ended December 31, 2024, includes $(1.0) million of severance-related items, $1.3 million of costs associated with the transfer of an insurance policy from our former parent and $1.3 million of costs associated with the wind-down of the MACS business in the standalone format. For the year ended December 31, 2023, includes $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co and $1.3 million costs associated with the transfer of an insurance policy from our former parent. For the year ended December 31, 2022, includes $0.1 million of restructuring costs and $1.2 million costs associated with the transfer of an insurance policy from our former parent.

(2)For the year ended December 31, 2024, excludes $(1.0) million of severance-related items that is included within restructuring costs and $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs. For the year ended December 31, 2023, excludes variable compensation related to severance of $7.3 million that is included within restructuring costs.

The following table identifies the components of ENI operating expense:

Years ended December 31,

Fixed compensation & benefits(1) $ 97.8 $ 93.1 $ 86.1

General and administrative expenses(2) 96.0 88.0 77.5

(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 to ENI fixed compensation and benefits expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Total U.S. GAAP compensation and benefits expense $ 265.5 $ 217.9 $ 159.2

Acadian LLC key employee distributions (9.7) (5.1) (5.1)

Restructuring expenses(a) 0.1 (7.3) —

ENI fixed compensation and benefits $ 97.8 $ 93.1 $ 86.1

(a)Reflects $(1.0) million of severance-related items and costs associated with the wind-down of the MACS business in the standalone format of $0.9 million for the year ended December 31, 2024. Reflects $7.3 million of severance-related costs for the year ended December 31, 2023.

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

Years ended December 31,

U.S. GAAP general and administrative expense $ 85.2 $ 82.6 $ 71.1

Sales-based compensation 12.1 7.6 7.7

Restructuring costs(a) (1.3) (2.2) (1.3)

ENI general and administrative expense $ 96.0 $ 88.0 $ 77.5

(a)Reflects $1.3 million of costs associated with the transfer of an insurance policy from our former parent for the year ended December 31, 2024. Reflects $0.9 million related to restructuring at the Hold Co and $1.3 million of costs associated with the transfer of an insurance policy from our former parent for the year ended December 31, 2023. Reflects $0.1 million related to restructuring and $1.2 million of costs associated with the transfer of an insurance policy from our former parent in the year ended December 31, 2022.

Key Non-GAAP Operating Metrics

The following table shows our key non-GAAP operating metrics for the years ended December 31, 2024, 2023 and 2022. 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:

Years ended December 31,

Denominator: ENI management fee revenue(3) $ 431.1 $ 373.2 $ 367.4

ENI operating expense ratio(4) 49.2 % 53.2 % 49.6 %

ENI variable compensation ratio(6) 42.3 % 46.6 % 42.7 %

Numerator: Acadian LLC key employee distributions $ 9.7 $ 5.1 $ 5.1

ENI Acadian LLC key employee distributions ratio(7) 5.8 % 4.2 % 3.8 %

(1)ENI operating earnings represents ENI earnings before Acadian LLC 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 Acadian LLC key employee distributions, net interest expense or income tax expense.

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

Years ended December 31,

Exclude the impact of:

Goodwill impairment and the amortization of acquired intangible assets — — 0.1

Capital transaction costs — — —

Restructuring costs(a) 1.6 9.5 1.3

Acadian LLC key employee distributions 9.7 5.1 5.1

Funds’ operating income (2.2) (0.2) —

Less: ENI Acadian LLC key employee distributions (9.7) (5.1) (5.1)

(a)The year ended December 31, 2024 includes $(1.0) million of severance-related items, $1.3 million associated with the transfer of an insurance policy from our former Parent, and $1.3 million of costs associated with the wind-down of the MACS business in the standalone format. For the year ended December 31, 2023, includes $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co, and $1.3 million associated with the transfer of an insurance policy from our former parent. For the year ended December 31, 2022, includes $0.1 million of restructuring costs, and $1.2 million associated with the transfer of an insurance policy from our former parent.

(b)The year ended December 31, 2024 excludes $(1.0) million of severance-related items that is included within restructuring costs and $0.9 million of costs associated with the wind-down of the MACS business in the standalone format that is included within restructuring costs. The year ended December 31, 2023 excludes $7.3 million of severance costs that are included within restructuring costs.

(2)The ENI operating margin, which is calculated before Acadian LLC key employee distributions, is used by management and is useful to investors to evaluate the overall operating margin of the business. 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, was 26.5% for the year ended December 31, 2024, 25.0% for the year ended December 31, 2023 and 40.3% for the year ended December 31, 2022.

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 Acadian LLC. 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 Acadian LLC employees 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 primarily comprised of a contractual percentage of Acadian LLC’s ENI earnings before variable compensation and may be paid in the form of cash or non-cash Acadian LLC equity or profit interests. Hold Co variable compensation includes cash and AAMI 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 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 Acadian LLC key employee distribution ratio is used by management and is useful to investors to evaluate Acadian LLC key employee distributions as measured against our ENI operating earnings. Acadian LLC key employee distributions represent the share of profits after variable compensation that is attributable to Acadian LLC key employee equity and profit interests holders, according to their ownership interests. It is calculated as Acadian LLC key employee distributions divided by ENI operating earnings. Within Acadian LLC, we have a tiered equity structure, where AAMI 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 Acadian LLC key employee distributions ratio is most comparable to the U.S. GAAP Acadian LLC key employee distributions ratio.

Tax on Economic Net Income

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

Years ended December 31,

Taxes at the U.S. federal and state statutory rates(2) (39.9) (28.3) (30.6)

Other reconciling tax adjustments (0.5) 0.6 0.2

Tax on economic net income (40.4) (27.7) (30.4)

Economic net income effective tax rate(3) 27.6 % 26.8 % 27.1 %

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

Years ended December 31,

U.S. GAAP interest income $ 3.5 $ 6.1 $ 0.8

U.S. GAAP interest expense (19.4) (19.6) (20.5)

U.S. GAAP net interest expense (15.9) (13.5) (19.7)

Other ENI interest expense exclusions(a) 4.0 1.7 2.4

ENI net interest income (expense) (11.9) (11.8) (17.3)

ENI earnings after Acadian LLC key employee distributions(b) 158.1 115.2 129.3

(a)Other ENI interest expense exclusions represent cost of financing on seed capital and co-investments and amortization of debt issuance costs. Includes $3.7 million related to the cost of seed and co-investment financing and $0.3 million related to the amortization of debt issuance costs for the year ended December 31, 2024. Includes $1.4 million related to the cost of seed and co-investment financing and $0.3 million related to the amortization of debt issuance costs for the year ended December 31, 2023. Includes $0.4 million related to the cost of seed and co-investment financing and $2.0 million related to the amortization of debt issuance costs for the year ended December 31, 2022.

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

Investments

The value of our seed capital investments was $90.3 million as of December 31, 2024 and $41.4 million as of December 31, 2023, including direct investments in consolidated Funds. Total seed capital investments represents our seed capital invested within Acadian LLC’s investment products. The following table reconciles the investments balance per our Consolidated Balance Sheets to the total value of our seed capital investments as of each of the dates indicated:

Investments per Consolidated Balance Sheets $ 67.9 $ 64.7

Seed capital investment in consolidated Funds 70.9 21.4

Investments related to long-term incentive compensation plans (48.5) (44.7)

Total seed capital investments $ 90.3 $ 41.4

Segment Analysis

We operate our business through the following reportable segment:

The corporate holding company (“Hold Co”) is included within the Unallocated Corporate expense category. The Hold Co 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 CODM is the Company’s Chief Executive Officer.

The primary measure used by the CODM in measuring performance and allocating resources to the segment is ENI. ENI is used 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. We define economic net income for the segment as ENI revenue less ENI operating expenses. 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 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 the Company by consolidated Funds.

Significant segment ENI expenses include fixed compensation and benefits, variable compensation, Acadian LLC key employee distributions, depreciation and amortization, and general and administrative expense under U.S. GAAP, adjusted to exclude non-cash expenses representing changes in the value of Acadian LLC equity and profit interests held by Acadian LLC key employees, capital transaction costs, and restructuring costs.

ENI segment results are also adjusted to exclude consolidated Fund revenues, consolidated Fund 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 Acadian LLC key employee distributions disclosed previously within this section.

Segment ENI Revenue

The following table identifies the components of Quant & Solutions segment ENI revenue for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Quant & Solutions Segment ENI Revenue

Year ended December 31, 2024 compared to year ended December 31, 2023: Quant & Solutions ENI revenue increased $78.9 million, or 18.6%, from $423.6 million for the year ended December 31, 2023 to $502.5 million for the year ended December 31, 2024. The increase was due to 41.7% higher performance fees due to strong performance relative to market in certain strategies in the year ended December 31, 2024, and 15.5% higher management fees resulting from positive equity markets in the past year and an improvement in blended average basis points on assets under management, driven by fee rates from inflows being higher than outflows in the years ended December 31, 2024 and 2023.

Year ended December 31, 2023 compared to year ended December 31, 2022: Quant & Solutions ENI revenue increased $6.8 million, or 1.6%, from $416.8 million for the year ended December 31, 2022 to $423.6 million for the year ended December 31, 2023. The increase was due to 2.0% higher performance fees in the year ended December 31, 2023, as well as 1.6% higher management fees due to improvement in blended average basis points on assets under management, driven by fee rates from inflows being higher than outflows in the years ended December 31, 2023 and 2022.

Segment ENI Expense

The following table identifies the components of Quant & Solutions segment ENI expenses for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Fixed compensation & benefits $ 90.7 $ 86.6 $ 79.0

Acadian LLC key employee distributions 9.7 5.1 5.1

General and administrative expense 87.9 80.3 68.4

Quant & Solutions Segment ENI Expense

Year ended December 31, 2024 compared to year ended December 31, 2023: Quant & Solutions segment ENI expenses increased $34.8 million, or 12%, from $291.5 million for the year ended December 31, 2023 to $326.3 million for the year ended December 31, 2024. Quant & Solutions segment ENI fixed compensation and benefits expense increased 4.7%, reflecting the cost of new hires supporting our growth initiatives and cost of living increases, partially offset by cost savings realized from restructuring in late 2023. Quant & Solutions ENI variable compensation expense is based on contractual percentage of earnings before variable compensation and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period. The deferred nature of the bonus earned on performance fee revenues can result in compensation expense variability that is uncorrelated to current period earnings. Quant & Solutions ENI variable compensation expense increased 17.3%, primarily as a result of higher earnings before variable compensation. Acadian LLC key employee distributions for certain tiers of equity are calculated after an earnings threshold is met, whereby no distributions are made to these equity holders when earnings are below the threshold. The change in Acadian LLC key employee distributions during the current period is driven by higher operating earnings and the leveraged nature of this distribution share. Quant & Solutions ENI general and administrative expense increased 9.5% primarily due to higher systems, outside services and portfolio administrative costs, reflecting our continued investment in growth initiatives and capabilities, partially offset by lower consultant costs.

Year ended December 31, 2023 compared to year ended December 31, 2022: Quant & Solutions segment ENI expense increased $24.9 million, or 9%, from $266.6 million for the year ended December 31, 2022 to $291.5 million for the year ended December 31, 2023. Quant & Solutions segment ENI fixed compensation and benefits expense increased 9.6%, driven by cost of living increases and the cost of new hires supporting our growth initiatives. Quant & Solutions segment ENI variable compensation expense is based on contractual percentage of earnings before variable compensation and also includes a formulaic split of performance fee revenue that gets deferred and recognized as variable compensation expense over a three-year vesting period. Quant & Solutions ENI variable compensation expense increased 6.5%, driven by the inclusion of deferred compensation expense earned on current and prior year performance fee revenues. Quant & Solutions ENI general and administrative expense increased 17.4% primarily due to higher systems, consultant and portfolio costs, as well as the impact of inflation and changes in foreign currency.

Unallocated corporate expense

The following table identifies unallocated corporate expense for the years ended December 31, 2024, 2023 and 2022:

Years ended December 31,

Unallocated corporate expenses(1) $ 19.4 $ 19.1 $ 22.2

(1)Unallocated corporate expenses are presented on a U.S. GAAP basis.

Year ended December 31, 2024 compared to year ended December 31, 2023: Unallocated corporate expense increased $0.3 million, or 2%, from $19.1 million for the year ended December 31, 2023 to $19.4 million for the year ended December 31, 2024. The increase was driven by higher compensation and benefits expense due to cost of living and payroll tax increases, partially offset by lower general and administrative expenses due to a decrease in legal costs.

Year ended December 31, 2023 compared to year ended December 31, 2022: Unallocated corporate expenses decreased $(3.1) million, or (14.0)%, from $22.2 million for the year ended December 31, 2022 to $19.1 million for the year ended December 31, 2023. The decrease was driven by lower compensation and benefits due to a reduction in headcount at the Hold Co and lower general and administrative expense driven by lower rent expense.

Capital Resources and Liquidity

Cash Flows

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

Years ended December 31,

Cash provided by (used in)(1)

(1)Excludes consolidated Funds.

Our most significant uses of cash include share repurchases, repayment of third-party borrowings and revolving credit facility, third-party interest payments, tax payments, seed capital investments, dividends and compensation and general and administrative expenses.

Comparison for the Years Ended December 31, 2024, 2023 and 2022

Net cash provided by operating activities excluding consolidated Funds increased $31.2 million, from net cash provided of $77.7 million during the year ended December 31, 2023 to net cash provided of $108.9 million during the year ended December 31, 2024. The increase was driven by changes in net income offset by changes in operating asset and liabilities period-over-period.

Net cash provided by operating activities excluding consolidated Funds decreased $(41.3) million, from net cash provided of $119.0 million during the year ended December 31, 2022 to net cash provided of $77.7 million during the year ended December 31, 2023. The decrease was driven by changes in net income and changes in operating assets and liabilities period-over-period, including changes in investment advisory fees receivable and accrued incentive compensation balances.

Net cash used in investing activities, excluding consolidated Funds, was $(50.1) million, $(31.4) million and $(13.0) million for the years ended December 31, 2024, 2023 and 2022, respectively. Fluctuations are driven by the timing of investments or redemptions of seed capital. Net cash (used in) received from the (purchase) and sale of investments was $(40.2) million, $(17.6) million and $3.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Net cash used in financing activities, excluding consolidated Funds, consists of share repurchases, third-party borrowings, payments made to OM plc, withholding tax payments on stock option exercises and dividend payments. Net cash used in financing activities was $(110.4) million, $(8.1) million and $(233.7) million for the years ended December 31, 2024, 2023 and 2022, respectively. Share repurchases, revolving credit facility borrowing activity and third party borrowing activity were the drivers of the changes in financing activities year over year. We paid $(96.7) million for share repurchases in 2024 compared to $(3.3) million in 2023 and $(103.2) million in 2022. In 2022, we paid down net $(125.0) million against third-party and revolving credit facility borrowings compared to $0.0 million in 2024 and 2023.

Working Capital and Long-Term Debt

The following table summarizes certain key financial data relating to our capital resources and liquid net assets. All amounts presented exclude the non-controlling interest portion of consolidated Funds:

Years ended December 31,

Balance Sheet Data(1)

Current assets

Current liabilities

Accounts payable and accrued expenses $ 37.9 $ 39.1 31.0

Accrued short-term incentive compensation 118.6 99.3 92.5

(1)Excludes the non-controlling interest portion of consolidated Funds.

(2)Includes income taxes receivable.

(3)Includes the short-term portion of our lease liability and accrued income taxes payable. Excluded from other short-term liabilities for each of the years presented is an income tax reserve relating to net operating losses that does not represent a current obligation of the Company. Puts related to Acadian LLC equity and profits interests are also excluded on a short-term basis because they are funded through recycling.

Working capital is defined as current assets less current liabilities, excluding the non-controlling interest portion of consolidated Funds. Our net working capital has been positive over the past several years and was $182.2 million at December 31, 2024. Our most significant current liabilities have been accounts payable, accrued compensation expense and the short-term portion of our third-party debt. Accrued compensation expense has primarily consisted of variable compensation accruals made throughout the year based on contractual arrangements. Our cash management practices generally require that working capital be maintained at an appropriate level to meet short-term operational needs at both Acadian LLC and Hold Co. Periodic distributions of Acadian LLC earnings to Hold Co and Acadian LLC key employee equity holders are made according to our distribution policies, with Hold Co having the ability to access any surplus cash at Acadian LLC as necessary during interim periods.

Borrowings and Long-Term Debt

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

($ in millions) December 31,2024 December 31,2023 Interest rate Maturity

Revolving credit facility:

$140 million revolving credit facility(1) $ — $ — Variable rate August 29, 2027

Total revolving credit facility $ — $ —

Third-party borrowings:

Total third-party borrowings $ 274.3 $ 273.9

(1)On August 29, 2024, Acadian LLC’s $125 million revolving credit facility was terminated and replaced with a new $140 million revolving credit facility.

Revolving Credit Facility

On August 29, 2024, Acadian LLC, Royal Bank of Canada, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., the Bank of New York Mellon, Bank of America N.A., as an issuing bank, and Citibank, N.A., as an issuing bank and administrative agent (collectively, the “Lenders”), entered into a new revolving credit facility agreement (the “Acadian LLC Credit Agreement”), which replaced Acadian LLC’s revolving credit facility dated as of March 7, 2022 (the “Prior Credit Agreement”). The maturity date of the Prior Credit Agreement was March 7, 2025, and the maturity date of the Acadian LLC Credit Agreement is August 29, 2027.

Borrowings under the Acadian LLC Credit Agreement bear interest, at Acadian LLC’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 LLC’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 LLC’s Leverage Ratio. In addition, Acadian LLC is charged a commitment fee based on the average daily unused portion of the revolving credit facility under the Acadian LLC Credit Agreement at a per annum rate ranging from 0.25% to 0.375%, with such amount based on Acadian LLC’s Leverage Ratio.

Under the Acadian LLC Credit Agreement, the ratio of Acadian LLC’s third-party borrowings to Acadian LLC’s trailing twelve months Adjusted EBITDA, as defined by the Acadian LLC Credit Agreement (the “Leverage Ratio”), cannot exceed 2.5x and the Acadian LLC interest coverage ratio must not be less than 4x. At December 31, 2024, Acadian LLC’s Leverage Ratio was 0x and Acadian LLC’s Interest Coverage Ratio was 96.1x.

Senior Notes

In July 2016, we issued $275.0 million of 4.80% Senior Notes due 2026 (the “2026 Notes”). The $275.0 million 2026 Notes were sold at a discount of $(0.5) million and we incurred debt issuance costs of $(3.0) million, which are being amortized to interest expense over the ten-year term. The 2026 Notes can be redeemed at any time prior to the scheduled maturity in part or in aggregate, at the greater of 100% of the principal amount at that time or the sum of the remaining scheduled payments discounted at the treasury rate (as defined) plus 0.5%, together with any related accrued and unpaid interest.

As of December 31, 2024, we were in compliance with the required covenants related to borrowings and debt facilities.

Other Compensation Liabilities

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

Years ended December 31,

Share-based payments liability $ 25.4 $ 23.0

Profit interests liability 18.7 —

Voluntary deferral plan liability 48.4 44.5

Share-based payments liability represents the value of Acadian LLC 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. Acadian LLC profit interests liability represents the value of Acadian LLC 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 Acadian LLC equity is limited to only that portion that may be put to us by Acadian LLC 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 Acadian LLC key employees.

Certain of our 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.

Additionally, we have recorded accrued incentive compensation of $119.6 million and $101.3 million on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. Included within the accrued incentive compensation balance is the vested portion of our deferred compensation pool. The deferred compensation pool is based on a contractual percentage of Acadian LLC performance fee revenues and post-bonus profits, and is subject to a three-year vesting period. Compensation expense is recognized over the requisite service period. Unamortized compensation expense related to the unvested portion of the deferred compensation pool of $24.4 million and $14.3 million is expected to be recognized in the years ending December 31, 2025 and 2026, respectively.

For additional discussion of our compensation programs, please refer to the compensation discussions contained within our definitive proxy statement for our 2025 annual meeting of stockholders incorporated herein by reference.

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.

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 years ended December 31, 2024, 2023 and 2022:

Years Ended December 31,

Net income attributable to controlling interests $ 85.0 $ 65.8 100.6

Net interest expense to third parties 15.9 13.5 19.7

Depreciation and amortization (including intangible assets) 18.5 17.3 18.6

(Gain) loss on seed and co-investments (6.5) (2.9) 0.2

Capital transaction costs — — 3.2

ENI net interest expense to third parties (11.9) (11.8) (17.3)

Depreciation and amortization(2) (19.0) (18.6) (20.8)

Tax on economic net income (40.4) (27.7) (30.4)

(1)Included in restructuring for the year ended December 31, 2024 are $(1.0) million of severance-related items, $1.3 million costs associated with the transfer of an insurance policy from our former parent, and $0.9 million costs associated with the wind-down of the MACS business in the standalone format. Included in restructuring for the year ended December 31, 2023 are $7.3 million of severance costs, $0.9 million of legal-related restructuring costs at the Hold Co and $1.3 million costs associated with the transfer of an insurance policy from our former parent. Included in restructuring for the year ended December 31, 2022 are $0.1 million of restructuring costs and $1.2 million of costs associated with the transfer of an insurance policy from our former parent.

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

For a full discussion regarding the items excluded from Adjusted EBITDA above and the calculation of economic net income, refer to “—Non-GAAP Supplemental Performance Measure—Economic Net Income and Segment Analysis.”

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.

Commitments, Contingencies and Off-Balance Sheet Obligations

Indemnifications

In the normal course of business, we occasionally enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. Our maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against us that have not yet occurred.

Off-Balance Sheet Obligations

Off-balance sheet arrangements, as defined by the SEC, include certain contractual arrangements pursuant to which a company has an obligation, such as certain contingent obligations, certain guarantee contracts, retained or contingent interests in assets transferred to an unconsolidated entity, certain derivative instruments classified as equity or material variable interests in unconsolidated entities that provide financing, liquidity, market risk or credit risk support. Disclosure is required for any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity or capital resources. We generally do not enter into off-balance sheet arrangements, other than those described in “Contractual Obligations” as well as Note 5 and Note 14 to our Consolidated Financial Statements included in Item 8 herein, “Variable Interest Entities” and “Commitments and Contingencies”, respectively.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2024:

Payments due by period

($ in millions) Total Less than1 year 1 - 3 years 3 - 5 years More than5 years

Contractual Obligations

Third party borrowings $ 275.0 $ — $ 275.0 $ — $ —

(1)Represents amortized amounts held by Acadian LLC key employees. Our actual funding of these potential repurchases of Acadian LLC equity and profits interests is limited to only that portion that may be put to us by Acadian LLC key employees or that we decide to call to facilitate succession planning at Acadian LLC, which is typically capped annually such that we do not repurchase more than we can reasonably recycle by re-granting the interests in lieu of cash variable compensation owed to Acadian LLC key employees. Any equity or profits interests repurchased by us are used to fund a portion of variable compensation awards resulting in savings in cash variable compensation that offset the negative cash effect of repurchasing the equity.

Critical Accounting Policies and Estimates

Our significant accounting policies are disclosed in Item 8, Financial Statements and Supplementary Data - Note 2, “Significant Accounting Policies.” The accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition are those that require complex management judgment regarding matters that are highly uncertain at the time policies were applied and estimates were made. These accounting policies and estimates are discussed below; however, the additional accounting policy detail in the footnote previously referenced is important to the discussion of each of the topics. Different estimates reasonably could have been used in the current period that would have had a material effect on these Consolidated Financial Statements, and changes in these estimates are likely to occur from period-to-period in the future.

Share-based compensation plans

We recognize the cost of all share-based payments to directors, senior management and employees, including grants of restricted stock and stock options, as compensation expense in the Consolidated Statements of Operations over the respective vesting periods.

Awards made under our equity plans are accounted for as equity-settled, and the grant date fair value is recognized as compensation expense over the requisite service period, with a corresponding contribution to additional paid-in capital. Valuation of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) is determined based on our closing share price as quoted on the New York Stock Exchange on the measurement date. For performance-based awards and stock options, a Monte-Carlo simulation model is used to determine the fair value. Key inputs for the model include: assumed reinvestment of dividends, risk-free interest rate and expected volatility. All excess tax benefits and deficiencies on share-based payment awards are recognized as income tax expense or benefit in the Consolidated Statements of Operations. In addition, the tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur and excess tax benefits or deficiencies are classified with other income tax cash flows as an operating activity in the Consolidated Statements of Cash Flows. We recognize forfeitures as they occur.

We have compensation arrangements Acadian LLC whereby in exchange for continued service, Acadian LLC equity is either purchased by or granted to key employees and may be repurchased either by Acadian LLC key employees or by us at a future date, subject to service requirements having been met. Awards of equity made to key employees are accounted for as cash-settled, with the fair value recognized as compensation expense over the requisite service period, with a corresponding liability carried within other compensation liabilities on the Consolidated Balance Sheets until the award is settled by us. The fair values of the liabilities are determined with the assistance of third party valuation specialists using discounted cash flow analyses which incorporate assumptions for the forecasted earnings information, growth rates, market risk adjustments, discount rates, when award holders maximize value and post-vesting restrictions. While we believe all assumptions used in determining the fair value of the liabilities are reasonable and appropriate, certain assumptions are subjective and changes in these assumptions could result in different fair value amounts.

Taxation

We file tax returns directly with the U.S., U.K., state tax authorities and in other foreign jurisdictions. These tax returns represent our filing positions within each jurisdiction and settle our tax liabilities. Each jurisdiction has the right to audit those tax returns and may take different positions with respect to income and expense allocations and taxable earnings determinations. Because the determinations of our annual provisions are subject to judgments and estimates, it is possible that actual results will vary from those recognized in our Consolidated Financial Statements. As a result, it is likely that additions to, or reductions of, income tax expense will occur each year for prior reporting periods as actual tax returns and tax audits are settled.

Deferred tax assets, net of any associated valuation allowance, have been recognized based on management's belief that taxable income of the appropriate character, more likely than not, will be sufficient to realize the benefits of

these assets over time. In the event that actual results differ from our expectations, or if our historical trends of positive operating income changes, we may be required to record a valuation allowance on some or all of these deferred tax assets, which may have a significant effect on our financial condition and results of operations. In assessing whether a valuation allowance should be established against a deferred tax asset, we consider the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryback and carry forward periods, among other factors.

We utilize a specific recognition threshold and measurement attribute for the Consolidated Financial Statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The prescribed two-step process for evaluating a tax position involves first determining whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities. If it is, the second step then requires a company to measure this tax position benefit as the largest cumulative amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Unrecognized tax benefits and related interest and penalties are adjusted periodically to reflect changing facts and circumstances.

Recent Accounting Developments

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

Item 7A. 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 December 31, 2024 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 remains the same as it was on December 31, 2024. 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 fee revenues could be significant in each period. The basis for the analysis is performance fees earned for the twelve months ended December 31, 2024.

Our profit sharing economic structure, described more fully in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—The Economics of Our Business,” 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 LLC 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 Acadian LLC key employee distributions in line with their formulaic calculations. Any change in pre-tax profit is tax-affected to calculate profit after tax.

The value of our assets under management was $117.3 billion as of December 31, 2024. 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 $44.0 million based on our current weighted average fee rate of approximately 38 basis points. Approximately $20 billion, or 17%, of our 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 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 million impact to our gross performance fees based on our trailing twelve-month performance fees of $71 million as of December 31, 2024. 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 $19 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., global, non-U.S. and emerging markets equities (including small cap through large cap securities). A 10% increase or decrease in equity markets would cause our approximately $114 billion of long-only equity assets under management to increase or decrease by $11 billion, resulting in a change in annualized management fee revenue of $43 million and an annual change in post-tax economic net income of approximately $17 million, given our current cost structure, operating model, and weighted average equity fee rates of 38 basis points at the current mix of strategies as of December 31, 2024. Approximately $18 billion, or 16%, 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 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 $94 billion of foreign currency denominated AUM to increase or decrease by $9 billion, resulting in a change in annualized management fee revenue of $37 million and an annual change in post-tax economic net income of $14 million, based on weighted average fees earned on our foreign currency denominated AUM of 39 basis points at the mix of strategies as of December 31, 2024. Approximately $14 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 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 $2 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 Acadian LLC’s revolving credit facility. Interest on borrowings under the revolving credit facility is based upon variable interest rates. There was no balance drawn on our revolving credit facility as of December 31, 2024. We currently do not hedge against interest rate risk. As of December 31, 2024, a hypothetical 10% change in interest rates would have resulted in an immaterial change to our interest expense during the twelve months ended December 31, 2024.

Item 8. Financial Statements and Supplementary Data.

Page

Index to financial statements

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185) 73

Consolidated Balance Sheets as of December 31, 2024 and 2023 76

Notes to Consolidated Financial Statements 82

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Acadian Asset Management Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Acadian Asset Management Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the fair value measurement of the cash-settled subsidiary awards liability

As discussed in Notes 2, 11 and 18 to the consolidated financial statements, the Company has issued cash-settled equity awards to certain key employees of the subsidiary which are liability classified. The total liability for these awards was $25.4 million at December 31, 2024. The liability is remeasured each reporting period to its fair value. The fair value is determined using discounted cash flow analysis which incorporate assumptions for the forecasted earnings information, growth rates, market risk adjustments, discount rates, and when award holders maximize value subject to post-vesting restrictions.

We identified the assessment of the fair value measurement of the cash-settled awards liability as a critical audit matter. Complex and subjective auditor judgment was required in evaluating the methodology and key assumptions used in determining the fair value of the liability related to the cash-settled awards. The significant assumptions that required complex and subjective auditor judgment include forecasted earnings, growth rates, market risk adjustments, discount rates, and adjustments to reflect the impact of post-vesting restrictions and when award holders will maximize value. Changes to these assumptions could have had an effect on the Company’s determination of the fair value of the cash-settled awards liability.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to determine the fair value of the cash-settled awards liability, including controls over the significant assumptions noted above. We compared forecasted earnings and growth rates to internal financial forecasts and historical results. We also compared certain inputs used in developing the forecasted earnings and growth rates to third party data. We held discussions with finance personnel of the Company to further evaluate the forecasted earnings used in the discounted cash flow models. We evaluated adjustments to reflect the impact of post-vesting restrictions on awards by comparing the restrictions to underlying plan documents and also assess that puts occur when award holders maximize value. We involved valuation professionals with specialized skills and knowledge, who assisted in:

•evaluating whether the methodology used to calculate the fair value of the awards was appropriate

•performing calculations of market risk adjustments using data that was independently obtained or otherwise corroborated

•evaluating the discount rates used by the Company by comparing them against discount rates that were developed using publicly available market data

•performing calculations of the fair value of the liability using the Company’s forecasted earnings and a combination of independent assumptions and Company assumptions and comparing the result to the amount recorded by the Company.

/s/ KPMG LLP

We have served as the Company’s auditor since 2014.

Boston, Massachusetts

February 27, 2025

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Acadian Asset Management Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Acadian Asset Management Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

/s/ KPMG LLP

Boston, Massachusetts

February 27, 2025

Acadian Asset Management Inc.

Consolidated Balance Sheets

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

Assets

Cash and cash equivalents $ 94.8 $ 146.8

Investment advisory fees receivable 164.7 143.4

Income taxes receivable 3.0 2.7

Assets of consolidated Funds:

Cash and cash equivalents, restricted 3.7 0.8

Liabilities and stockholders’ equity

Accounts payable and accrued expenses $ 37.9 $ 39.1

Accrued incentive compensation 119.6 101.3

Other compensation liabilities 92.5 67.5

Accrued income taxes 3.3 2.6

Operating lease liabilities 67.3 72.4

Other liabilities — 0.8

Revolving credit facility — —

AAMI US Equity

AAMI · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data.

AAMI US Equity☆

AAMI · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data.

AAMI US Equity