
		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		(unaudited)					(unaudited)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	45,195	$	57,635	Cash and cash equivalents	$	55,716	$	57,635
Accounts receivable	Accounts receivable	10,776		11,915		Accounts receivable	12,534		11,915
Investment securities	Investment securities	23,905		23,497		Investment securities	23,698		23,497
Prepaid expenses and other assets	Prepaid expenses and other assets	17,731		15,711		Prepaid expenses and other assets	14,202		15,711
Total current assets	Total current assets	97,607		108,758		Total current assets	106,150		108,758
Property and equipment, net	Property and equipment, net	2,728		3,075		Property and equipment, net	2,553		3,075
Operating lease right-of-use assets	Operating lease right-of-use assets	15,859		16,405		Operating lease right-of-use assets	15,266		16,405
Net deferred tax assets, non-current	Net deferred tax assets, non-current	18,889		19,645		Net deferred tax assets, non-current	20,635		19,645
Goodwill	Goodwill	4,829		4,829		Goodwill	4,829		4,829
Other long-term assets	Other long-term assets	3,294		3,373		Other long-term assets	3,231		3,373
Total assets	Total assets	$	143,206	$	156,085	Total assets	$	152,664	$	156,085

Liabilities	Liabilities					Liabilities
Accounts payable	Accounts payable	$	2,271	$	1,787	Accounts payable	$	1,917	$	1,787
Accrued expenses and other liabilities	Accrued expenses and other liabilities	22,156		36,439		Accrued expenses and other liabilities	26,841		36,439
Deferred revenue	Deferred revenue	12,116		11,476		Deferred revenue	12,935		11,476
Total current liabilities	Total current liabilities	36,543		49,702		Total current liabilities	41,693		49,702
Operating lease liabilities, non-current	Operating lease liabilities, non-current	15,935		16,646		Operating lease liabilities, non-current	15,177		16,646
Amounts payable under tax receivable agreement, non-current	Amounts payable under tax receivable agreement, non-current	13,759		13,759		Amounts payable under tax receivable agreement, non-current	15,598		13,759
Other long-term liabilities	Other long-term liabilities	199		221		Other long-term liabilities	185		221
Total liabilities	Total liabilities	66,436		80,328		Total liabilities	72,653		80,328
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)	0		0		Commitments and contingencies (Note 9)	0		0
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Class A common stock, $0.01 par value; 300,000,000 shares authorized; 17,423,202 and 17,010,797 shares issued and outstanding at March 31, 2021, 16,989,943 shares issued and outstanding at December 31, 2020		174		170
Treasury stock, at cost, 412,405 and zero shares at March 31, 2021 and December 31, 2020, respectively		(2,987)		0
Class A common stock, $0.01 par value; 300,000,000 shares authorized; 19,207,235 and 18,493,570 shares issued and outstanding at June 30, 2021, 16,989,943 shares issued and outstanding at December 31, 2020						Class A common stock, $0.01 par value; 300,000,000 shares authorized; 19,207,235 and 18,493,570 shares issued and outstanding at June 30, 2021, 16,989,943 shares issued and outstanding at December 31, 2020	192		170
Treasury stock, at cost, 713,665 and 0 shares at June 30, 2021 and December 31, 2020, respectively						Treasury stock, at cost, 713,665 and 0 shares at June 30, 2021 and December 31, 2020, respectively	(5,337)		0
Additional paid-in capital	Additional paid-in capital	110,182		111,848		Additional paid-in capital	104,402		111,848
Retained deficit	Retained deficit	(23,586)		(28,826)		Retained deficit	(17,661)		(28,826)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(228)		(235)		Accumulated other comprehensive loss	(284)		(235)
Total shareholders’ equity	Total shareholders’ equity	83,555		82,957		Total shareholders’ equity	81,312		82,957
Noncontrolling interests	Noncontrolling interests	(6,785)		(7,200)		Noncontrolling interests	(1,301)		(7,200)
Total shareholders’ equity and noncontrolling interests	Total shareholders’ equity and noncontrolling interests	76,770		75,757		Total shareholders’ equity and noncontrolling interests	80,011		75,757
Total liabilities, shareholders’ equity and noncontrolling interests	Total liabilities, shareholders’ equity and noncontrolling interests	$	143,206	$	156,085	Total liabilities, shareholders’ equity and noncontrolling interests	$	152,664	$	156,085


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
			2021		2020				2021		2020		2021		2020
Revenues	Revenues							Revenues
Management Fees	Management Fees							Management Fees
Wealth Management	Wealth Management		$	15,348	$	14,020		Wealth Management	$	16,111	$	13,571	$	31,459	$	27,591
Institutional and Intermediary	Institutional and Intermediary		14,328		12,411			Institutional and Intermediary	15,141		12,311		29,469		24,722
Distribution and shareholder servicing	Distribution and shareholder servicing		2,153		2,390			Distribution and shareholder servicing	2,236		2,303		4,389		4,693
Custodial services	Custodial services		1,645		1,599			Custodial services	1,721		1,463		3,366		3,062
Other revenue	Other revenue		677		689			Other revenue	868		698		1,545		1,387
Total revenue	Total revenue		34,151		31,109			Total revenue	36,077		30,346		70,228		61,455
Expenses	Expenses							Expenses
Compensation and related costs	Compensation and related costs		18,874		19,263			Compensation and related costs	18,347		17,379		37,221		36,642
Distribution, servicing and custody expenses	Distribution, servicing and custody expenses		2,358		2,813			Distribution, servicing and custody expenses	2,497		2,425		4,855		5,238
Other operating costs	Other operating costs		6,710		7,097			Other operating costs	7,463		7,489		14,173		14,586
Total operating expenses	Total operating expenses		27,942		29,173			Total operating expenses	28,307		27,293		56,249		56,466
Operating income	Operating income		6,209		1,936			Operating income	7,770		3,053		13,979		4,989
Non-operating income (loss)	Non-operating income (loss)							Non-operating income (loss)
Interest expense	Interest expense		(2)		(2)			Interest expense	(1)		(3)		(3)		(5)
Interest and dividend income	Interest and dividend income		123		357			Interest and dividend income	108		363		231		720
Change in liability under tax receivable agreement	Change in liability under tax receivable agreement		0		(2,850)			Change in liability under tax receivable agreement	(228)		914		(228)		(1,936)
Net gains (losses) on investments	Net gains (losses) on investments		337		(1,832)			Net gains (losses) on investments	377		1,416		714		(416)

Total non-operating income (loss)	Total non-operating income (loss)		458		(4,327)			Total non-operating income (loss)	256		2,690		714		(1,637)
Income before provision for (benefit from) income taxes	Income before provision for (benefit from) income taxes		6,667		(2,391)			Income before provision for (benefit from) income taxes	8,026		5,743		14,693		3,352
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes		703		(3,226)			Provision for (benefit from) income taxes	1,285		1,460		1,988		(1,766)
Net income attributable to controlling and noncontrolling interests	Net income attributable to controlling and noncontrolling interests		5,964		835			Net income attributable to controlling and noncontrolling interests	6,741		4,283		12,705		5,118
Less: net income (loss) attributable to noncontrolling interests			724		(23)
Less: net income attributable to noncontrolling interests								Less: net income attributable to noncontrolling interests	816		2,737		1,540		2,714
Net income attributable to Manning & Napier, Inc.	Net income attributable to Manning & Napier, Inc.		$	5,240	$	858		Net income attributable to Manning & Napier, Inc.	$	5,925	$	1,546	$	11,165	$	2,404

Net income per share available to Class A common stock	Net income per share available to Class A common stock							Net income per share available to Class A common stock
Basic	Basic		$	0.31	$	0.05		Basic	$	0.35	$	0.09	$	0.65	$	0.15
Diluted	Diluted		$	0.26	$	0.01		Diluted	$	0.29	$	0.06	$	0.55	$	0.06
Weighted average shares of Class A common stock outstanding	Weighted average shares of Class A common stock outstanding							Weighted average shares of Class A common stock outstanding
Basic	Basic		17,026,500		15,812,951			Basic	16,956,265		16,132,667		16,991,188		15,972,809
Diluted	Diluted		20,273,343		77,907,557			Diluted	20,314,285		46,296,214		20,290,914		61,851,067


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
			2021		2020				2021		2020		2021		2020
Net income attributable to controlling and noncontrolling interests	Net income attributable to controlling and noncontrolling interests		$	5,964	$	835		Net income attributable to controlling and noncontrolling interests	$	6,741	$	4,283	$	12,705	$	5,118
Net unrealized holding gains (losses) on investment securities, net of tax	Net unrealized holding gains (losses) on investment securities, net of tax		8		(428)			Net unrealized holding gains (losses) on investment securities, net of tax	(60)		179		(52)		(249)
Reclassification adjustment for net realized gains on investment securities included in net income	Reclassification adjustment for net realized gains on investment securities included in net income		97		(33)			Reclassification adjustment for net realized gains on investment securities included in net income	(23)		(141)		74		(174)
Comprehensive income	Comprehensive income		$	6,069	$	374		Comprehensive income	$	6,658	$	4,321	$	12,727	$	4,695
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests		822		(400)			Less: Comprehensive income attributable to noncontrolling interests	789		2,753		1,611		2,353
Comprehensive income attributable to Manning & Napier, Inc.	Comprehensive income attributable to Manning & Napier, Inc.		$	5,247	$	774		Comprehensive income attributable to Manning & Napier, Inc.	$	5,869	$	1,568	$	11,116	$	2,342


		Common Stock – Class A			Treasury Stock			Additional Paid in Capital		Retained Deficit		Accumulated Other Comprehensive Income (Loss)			Non Controlling Interests						Common Stock – Class A			Treasury Stock			Additional Paid in Capital		Retained Deficit			Accumulated Other Comprehensive Income (Loss)		Non Controlling Interests
		Shares	Amount		Shares	Amount								Total			Shares				Amount	Shares		Amount							Total
Three months ended June 30, 2021																				Three months ended June 30, 2021
Balance—March 31, 2021																				Balance—March 31, 2021	17,010,797	$	174	412,405	$	(2,987)	$	110,182	$	(23,586)		$	(228)	$	(6,785)	$	76,770
Net income																				Net income	—	—		—	—		—		5,925			—		816		6,741
Distributions to noncontrolling interests																				Distributions to noncontrolling interests	—	—		—	—		—		—			—		(277)		(277)
Net changes in unrealized investment securities gains or losses																				Net changes in unrealized investment securities gains or losses	—	—		—	—		—		—			(56)		(4)		(60)
Common stock issued under equity compensation plan, net of forfeitures																				Common stock issued under equity compensation plan, net of forfeitures	191,064	2		—	—		(2)		—			—		—		0
Shares withheld to satisfy tax withholding requirements related to equity awards																				Shares withheld to satisfy tax withholding requirements related to equity awards	—	—		—	—		(2,233)		—			—		(20)		(2,253)
Equity-based compensation																				Equity-based compensation	—	—		—	—		872		—			—		4		876
Purchases of treasury stock																				Purchases of treasury stock	(301,260)	—		301,260	(2,350)		—		—			—		—		(2,350)
Cost of issuing common stock																				Cost of issuing common stock	—	—		—	—		(56)		—			—		—		(56)
Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)																				Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)	1,592,969	16		—	—		(4,981)		—			—		4,965		0
Deferred tax impacts from transactions with shareholders (Note 4)																				Deferred tax impacts from transactions with shareholders (Note 4)	—	—		—	—		620		—			—		—		620
Balance—June 30, 2021																				Balance—June 30, 2021	18,493,570	$	192	713,665	$	(5,337)	$	104,402	$	(17,661)		$	(284)	$	(1,301)	$	80,011

Three months ended March 31, 2021
Six months ended June 30, 2021																				Six months ended June 30, 2021
Balance—December 31, 2020	Balance—December 31, 2020	16,989,943	$	170	0	$	0	$	111,848	$	(28,826)	$	(235)		$	(7,200)		$	75,757	Balance—December 31, 2020	16,989,943	$	170	0	$	0	$	111,848	$	(28,826)		$	(235)	$	(7,200)	$	75,757
Net income	Net income	—	—		—	—		—		5,240		—			724			5,964		Net income	—	—		—	—		—		11,165			—		1,540		12,705
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—			(295)			(295)		Distributions to noncontrolling interests	—	—		—	—		—		—			—		(572)		(572)
Net changes in unrealized investment securities gains or losses	Net changes in unrealized investment securities gains or losses	—	—		—	—		—		—		7			1			8		Net changes in unrealized investment securities gains or losses	—	—		—	—		—		—			(49)		(3)		(52)
Common stock issued under equity compensation plan, net of forfeitures	Common stock issued under equity compensation plan, net of forfeitures	433,259	4		—	—		(4)		—		—			—			0		Common stock issued under equity compensation plan, net of forfeitures	624,323	6		—	—		(6)		—			—		—		0
Shares withheld to satisfy tax withholding requirements related to equity awards	Shares withheld to satisfy tax withholding requirements related to equity awards	—	—		—	—		(2,582)		—		—			(322)			(2,904)		Shares withheld to satisfy tax withholding requirements related to equity awards	—	—		—	—		(4,814)		—			—		(343)		(5,157)
Equity-based compensation	Equity-based compensation	—	—		—	—		1,091		—		—			136			1,227		Equity-based compensation	—	—		—	—		1,963		—			—		140		2,103

Cost of issuing common stock																				Cost of issuing common stock	—	—		—	—		(56)		—			—		—		(56)
Purchases of treasury stock	Purchases of treasury stock	(412,405)	—		412,405	(2,987)		—		—		—			—			(2,987)		Purchases of treasury stock	(713,665)	—		713,665	(5,337)		—		—			—		—		(5,337)
Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)	Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)	—	—		—	—		(171)		—		—			171			0		Impact of changes in ownership of Manning & Napier Group, LLC (Note 4)	1,592,969	16		—	—		(5,153)		—			—		5,137		0

Balance—March 31, 2021		17,010,797	$	174	412,405	$	(2,987)	$	110,182	$	(23,586)	$	(228)		$	(6,785)		$	76,770
Deferred tax impacts from transactions with shareholders (Note 4)																				Deferred tax impacts from transactions with shareholders (Note 4)	—	—		—	—		620		—			—		—		620
Balance—June 30, 2021																				Balance—June 30, 2021	18,493,570	$	192	713,665	$	(5,337)	$	104,402	$	(17,661)		$	(284)	$	(1,301)	$	80,011

Common Stock – Class A Treasury Stock Additional
Paid in Capital Retained
Deficit Accumulated
Other
Comprehensive Income (Loss) Non
Controlling
Interests
Shares Amount Shares Amount Total
Three months ended March 31, 2020
Balance—December 31, 2019 15,956,526 $ 160 $ 0 $ 0 $ 198,516 $ (38,478) $ (50) $ (10,527) $ 149,621
Net income — — — — — 858 — (23) 835
Net changes in unrealized investment securities gains or losses — — — — — — (84) (344) (428)
Common stock issued under equity compensation plan, net of forfeitures 318,833 3 — — (3) — — — 0
Shares withheld to satisfy tax withholding requirements related to equity awards — — — — 0 — — (2) (2)
Equity-based compensation — — — — 252 — — 1,034 1,286
Dividends declared on Class A common stock - $0.02 per share — — — — — (333) — — (333)
Impact of changes in ownership of Manning & Napier Group, LLC — — — — (43) — — 43 0
Balance—March 31, 2020 16,275,359 $ 163 $ 0 $ 0 $ 198,722 $ (37,953) $ (134) $ (9,819) $ 150,979


	Common Stock – Class A			Treasury Stock				Additional Paid in Capital		Retained Deficit		Accumulated Other Comprehensive Income (Loss)		Non Controlling Interests
	Shares	Amount		Shares		Amount										Total
Three months ended June 30, 2020
Balance—March 31, 2020	16,275,359	$	163	$	0	$	0	$	198,722	$	(37,953)	$	(134)	$	(9,819)	$	150,979
Net income	—	—		—		—		—		1,546		—		2,737		4,283

Net changes in unrealized investment securities gains or losses	—	—		—		—		—		—		22		157		179


Equity-based compensation	—	—		—		—		271		—		—		559		830


Impact of changes in ownership of Manning & Napier Group, LLC	—	—		—		—		(90,299)		—		—		(486)		(90,785)
Deferred tax impacts from transactions with shareholders								3,606								3,606
Balance—June 30, 2020	16,275,359	$	163	0		0		$	112,300	$	(36,407)	$	(112)	$	(6,852)	$	69,092

Six months ended June 30, 2020
Balance—December 31, 2019	15,956,526	$	160	$	0	$	0	$	198,516	$	(38,478)	$	(50)	$	(10,527)	$	149,621
Net income	—	—		—		—		—		2,404		—		2,714		5,118

Net changes in unrealized investment securities gains or losses	—	—		—		—		—		—		(62)		(187)		(249)
Common stock issued under equity compensation plan, net of forfeitures	318,833	3		—		—		(3)		—		—		—		0
Shares withheld to satisfy tax withholding requirements related to equity awards	—	—		—		—		0		—		—		(2)		(2)
Equity-based compensation	—	—		—		—		522		—		—		1,593		2,115
Dividends declared on Class A common stock - $0.02 per share	—	—		—		—		—		(333)		—		—		(333)
Impact of changes in ownership of Manning & Napier Group, LLC	—	—		—		—		(90,341)		—		—		(443)		(90,784)
Deferred tax impacts from transactions with shareholders								3,606								3,606
Balance—June 30, 2020	16,275,359	$	163	$	0	$	0	$	112,300	$	(36,407)	$	(112)	$	(6,852)	$	69,092


		Three months ended March 31,					Six months ended June 30,
		2021		2020			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income attributable to controlling and noncontrolling interests	Net income attributable to controlling and noncontrolling interests	$	5,964	$	835	Net income attributable to controlling and noncontrolling interests	$	12,705	$	5,118
Adjustment to reconcile net income to net cash provided by operating activities:	Adjustment to reconcile net income to net cash provided by operating activities:					Adjustment to reconcile net income to net cash provided by operating activities:
Equity-based compensation	Equity-based compensation	1,227		1,286		Equity-based compensation	2,103		2,115
Depreciation and amortization	Depreciation and amortization	436		378		Depreciation and amortization	909		796
Change in amounts payable under tax receivable agreement	Change in amounts payable under tax receivable agreement	0		2,850		Change in amounts payable under tax receivable agreement	228		1,936

Impairment of long-lived assets						Impairment of long-lived assets	0		553
Gain on sale of intangible assets	Gain on sale of intangible assets	0		(19)		Gain on sale of intangible assets	0		(21)

Net losses (gains) on investment securities	Net losses (gains) on investment securities	(337)		1,832		Net losses (gains) on investment securities	(714)		416
Deferred income taxes	Deferred income taxes	756		(3,734)		Deferred income taxes	1,240		(1,853)
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:	(Increase) decrease in operating assets and increase (decrease) in operating liabilities:					(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Accounts receivable	Accounts receivable	1,139		676		Accounts receivable	(619)		(1,191)
Prepaid expenses and other assets	Prepaid expenses and other assets	(2,089)		(2,528)		Prepaid expenses and other assets	1,215		(2,708)
Other long-term assets	Other long-term assets	627		767		Other long-term assets	1,261		1,574
Accounts payable	Accounts payable	484		(309)		Accounts payable	130		(375)
Accrued expenses and other liabilities	Accrued expenses and other liabilities	(13,868)		(9,761)		Accrued expenses and other liabilities	(9,226)		(4,705)
Deferred revenue	Deferred revenue	640		285		Deferred revenue	1,459		18
Other long-term liabilities	Other long-term liabilities	(706)		(1,534)		Other long-term liabilities	(1,434)		(2,163)
Net cash used in operating activities		(5,727)		(8,976)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	9,257		(490)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of property and equipment	Purchase of property and equipment	(2)		76		Purchase of property and equipment	(53)		(204)
Sale of investments	Sale of investments	4,001		17,518		Sale of investments	5,369		69,531
Purchase of investments	Purchase of investments	(4,063)		(10,520)		Purchase of investments	(6,157)		(20,298)
Sale of intangible assets	Sale of intangible assets	0		19		Sale of intangible assets	0		21

Proceeds from maturity of investments	Proceeds from maturity of investments	0		10,165		Proceeds from maturity of investments	1,250		16,400

Net cash (used in) provided by investing activities		(64)		17,258
Net cash provided by investing activities						Net cash provided by investing activities	409		65,450
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(295)		0		Distributions to noncontrolling interests	(572)		0
Dividends paid on Class A common stock	Dividends paid on Class A common stock	0		(319)		Dividends paid on Class A common stock	0		(645)
Payment of shares withheld to satisfy withholding requirements	Payment of shares withheld to satisfy withholding requirements	(3,349)		(2)		Payment of shares withheld to satisfy withholding requirements	(5,602)		(2)
Purchases of treasury stock	Purchases of treasury stock	(2,987)		0		Purchases of treasury stock	(5,337)		0
Payment of capital lease obligations	Payment of capital lease obligations	(18)		(30)		Payment of capital lease obligations	(18)		(41)

Payment of issuing common stock costs						Payment of issuing common stock costs	(56)		0
Purchase of Class A units of Manning & Napier Group, LLC						Purchase of Class A units of Manning & Napier Group, LLC	0		(90,783)

Net cash used in financing activities	Net cash used in financing activities	(6,649)		(351)		Net cash used in financing activities	(11,585)		(91,471)

Net (decrease) increase in cash and cash equivalents		(12,440)		7,931
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	(1,919)		(26,511)
Cash and cash equivalents:	Cash and cash equivalents:					Cash and cash equivalents:
Beginning of period	Beginning of period	57,635		67,088		Beginning of period	57,635		67,088
End of period	End of period	$	45,195	$	75,019	End of period	$	55,716	$	40,577

Manning & Napier, Inc. ("Manning & Napier" or the "Company") is an independent investment management firm that provides our clients with a broad range of financial solutions and investment ~~solutions through separately managed accounts, mutual funds, and collective investment trust funds, as well as a variety of consultative services that complement its investment process.~~strategies. Founded in 1970 ~~the Company offers equity, fixed income~~ and ~~alternative strategies, as well as a range of blended asset portfolios, including life cycle funds. Headquartered~~headquartered in Fairport, ~~New York,~~NY, the Company serves a diversified client base of high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. The Company's investment strategies offer equity, fixed income and a range of blended asset portfolios, including life cycle funds.

The Company was incorporated in 2011 as a Delaware corporation, and is the sole managing member of Manning & Napier Group, LLC and its subsidiaries (“Manning & Napier Group”), a holding company for the investment management businesses conducted by its operating subsidiaries. The Company completed the exchange of 1,562,959 Class A units held by M&N Group Holdings, LLC ("M&N Group Holdings") and 30,010 Class A units held by Manning & Napier Capital Company, LLC ("MNCC"), the entirety of its ownership in Manning & Napier Group, on June 30, 2021 through the issuance of 1,592,969 shares of unregistered Class A Common Stock of the Company. As a result, Manning & Napier acquired an equivalent number of Class A units of Manning & Napier Group and its ownership of Manning & Napier Group increased from approximately 89.0% to 97.7% (Refer to Note 4 for further discussion). The diagram below depicts the Company's organizational structure as of ~~March 31,~~June 30, 2021.

The Company's critical accounting policies and estimates are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020. The Company believes that the disclosures herein are adequate so that the information presented is not misleading; however, these financial statements should be read in conjunction with the financial statements and the notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The financial data for the interim periods may not necessarily be indicative of results for future interim periods or for the full year.

The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting and include all adjustments, consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period.

The Company consolidates all majority-owned subsidiaries. As of ~~March 31,~~June 30, 2021, Manning & Napier holds an economic interest of approximately ~~88.9%~~97.7% in Manning & Napier Group and, as managing member, controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statements of financial condition with respect to the remaining economic interest in Manning & Napier Group held by ~~Manning & Napier Group Holdings, LLC ("~~M&N Group ~~Holdings") and Manning & Napier Capital Company, LLC ("MNCC").~~Holdings.

In accordance with Accounting Standards Update ("ASU") 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design, a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance, and whether a company is obligated to absorb losses or receive benefits that could potentially be significant to the entity. The standard also requires ongoing assessments of whether a company is the primary beneficiary of a variable interest entity (“VIE”). When utilizing the voting interest entity ("VOE") model, controlling financial interest is generally defined as majority ownership of voting interests.

The Company provides seed capital to its investment teams to develop new strategies and services for its clients. The original seed investment may be held in a separately managed account, comprised solely of the Company's investments or within a mutual fund, where the Company's investments may represent all or only a portion of the total equity investment in the mutual fund. Pursuant to U.S. GAAP, the Company evaluates its investments in mutual funds on a regular basis and consolidates such mutual funds for which it holds a controlling financial interest. When no longer deemed to hold a controlling financial interest, the Company would deconsolidate the fund and classify the remaining investment as either an equity method investment, equity investments, at fair value, or as trading securities, as applicable. As of ~~March 31,~~June 30, 2021 and December 31, 2020, the Company did not have investments classified as an equity method investment.

The Company serves as the investment adviser for Manning & Napier Fund, Inc. series of mutual funds (the “Fund”), Exeter Trust Company Collective Investment Trusts (“CIT”) and Rainier Multiple Investment Trust. The Fund, CIT and Rainier Multiple Investment Trust are legal entities, the business and affairs of which are managed by their respective boards of directors. As a result, each of these entities is a VOE. The Company holds, in limited cases, direct investments in a mutual fund (which are made on the same terms as are available to other investors) and consolidates each of these entities where it has a controlling financial interest or a majority voting interest. The Company's investments in the Fund amounted to approximately $1.1 million as of ~~March 31,~~June 30, 2021 and $1.0 million as of December 31, 2020. As of ~~March 31,~~June 30, 2021 and December 31, 2020, the Company did not have a controlling financial interest in any mutual fund.

Separately managed accounts are paid in advance, typically for a semi-annual or quarterly period, or in arrears, typically for a monthly or quarterly period. When investment management fees are paid in advance, the Company defers the revenue as a contract liability and recognizes it over the applicable period. When investment management fees are paid in arrears, the Company estimates revenue and records a contract asset (accrued accounts receivable) based on AUM as of the most recent month end date.

Mutual funds and collective investment trust investment management revenue is calculated and earned daily based on AUM. Revenue is presented net of cash rebates and fees waived pursuant to contractual expense limitations of the funds. The Company also has agreements with third parties who provide recordkeeping and administrative services for employee benefit plans participating in the collective investment trusts. The Company is acting as an agent on behalf of the employee benefit plan sponsors, therefore, investment management revenue is recorded net of fees paid to third party service providers.

Distribution and shareholder servicing: The Company receives distribution and servicing fees for providing services to its affiliated mutual funds. Revenue is computed and earned daily based on a percentage of AUM. The performance obligation is a series of services that form part of a single performance obligation satisfied over time. The Company has agreements with third parties who provide distribution and administrative services for its mutual funds. The agreements are evaluated to determine whether revenue should be reported gross or net of payments to third-party service providers. The Company controls the services provided and acts as a principal in the relationship. Therefore, distribution and shareholder servicing revenue is recorded gross of fees paid to third parties.

value fee, the Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Revenue for transactions assigned a stand-alone selling price is recognized in the period in which the transaction is executed. Custodial service fees are billed monthly in arrears. The Company has agreements with third parties who provide safeguarding, recordkeeping and administrative services for their clients. The Company controls the services provided and acts as a principal in the relationship. Therefore, custodial service revenue is recorded gross of fees paid to third parties.

The Company generally considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in operating accounts at major financial institutions and also in money market securities. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. The fair value of cash equivalents has been classified as Level 1 in accordance with the fair value hierarchy.

Investment securities classified as available-for-sale consist of U.S. Treasury notes and corporate bonds. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported, net of deferred income tax, as a separate component of accumulated other comprehensive income in shareholders’ equity until realized. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If impairment is determined to be other-than-temporary, the carrying value of the security will be written down to fair value and the loss will be recognized in earnings. Realized gains and losses on sales of available-for-sale securities are computed on a specific identification basis and are recorded in net gains (losses) on investments in the consolidated statements of operations.

Goodwill represents the excess cost over the fair value of the identifiable net assets of acquired companies. Identifiable intangible assets generally represent the cost of client relationships and investment management agreements acquired as well as trademarks. Goodwill and indefinite-lived assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Intangible assets subject to amortization are tested for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimate and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, accrued expenses and other liabilities and operating lease liabilities, non-current on its consolidated statements of financial condition. Finance leases are included in other long-term assets, accrued expenses and other liabilities, and other long-term liabilities on its consolidated statements of financial condition.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate, for each identified lease, is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term. The

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects of the income tax accounting guidance, including interim-period accounting for enacted changes in the tax law. ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The adoption of this ASU as of January 1, 2021 did not have a material impact on the Company's consolidated financial statements.


		Three months ended March 31, 2021						Three months ended March 31, 2020							Three months ended June 30, 2021						Three months ended June 30, 2020
		Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total			Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
		(in thousands)													(in thousands)
Blended Asset	Blended Asset	$	13,634	$	8,068	$	21,702	$	11,942	$	8,186	$	20,128	Blended Asset	$	14,215	$	8,346	22,561		$	11,984	$	7,650	$	19,634
Equity	Equity	1,608		5,865		7,473		1,885		3,899		5,784		Equity	1,784		6,374		8,158		1,465		4,350		5,815
Fixed Income	Fixed Income	106		395		501		193		326		519		Fixed Income	112		421		533		122		311		433
Total	Total	$	15,348	$	14,328	$	29,676	$	14,020	$	12,411	$	26,431	Total	16,111		$	15,141	$	31,252	$	13,571	$	12,311	$	25,882

															Six months ended June 30, 2021						Six months ended June 30, 2020
															Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
															(in thousands)
Blended Asset														Blended Asset	$	27,849	$	16,414	$	44,263	$	23,926	$	15,836	$	39,762
Equity														Equity	3,392		12,239		15,631		3,350		8,249		11,599
Fixed Income														Fixed Income	218		816		1,034		315		637		952
Total														Total	$	31,459	$	29,469	$	60,928	$	27,591	$	24,722	$	52,313


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		(in thousands)					(in thousands)
Accounts receivable - third parties	Accounts receivable - third parties	$	6,174	$	7,315	Accounts receivable - third parties	$	7,821	$	7,315
Accounts receivable - affiliated mutual funds and collective investment trusts	Accounts receivable - affiliated mutual funds and collective investment trusts	4,602		4,600		Accounts receivable - affiliated mutual funds and collective investment trusts	4,713		4,600
Total accounts receivable	Total accounts receivable	$	10,776	$	11,915	Total accounts receivable	$	12,534	$	11,915

Accounts receivable represents the Company's unconditional rights to consideration arising from its performance under separately managed account, mutual fund and collective investment trust, distribution and shareholder servicing, and custodial service contracts. Accounts receivable balances do not include an allowance for doubtful accounts nor has any significant bad debt expense attributable to accounts receivable been recorded during the three and six months ended ~~March 31,~~June 30, 2021 or 2020.

The Company earns investment advisory fees, distribution fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. Fees earned for advisory and distribution services provided were approximately ~~$9.9~~$10.6 million and $20.5 million for the three and six months ended ~~March 31,~~June 30, 2021, respectively, and approximately ~~$8.9~~$8.5 million and $17.4 million for the three and six months ended ~~March 31,~~June 30, 2020, respectively, which represents greater than 25% of revenue in each period. The following provides amounts due from affiliated mutual funds and collective investment trusts reported within accounts receivable in the consolidated statements of financial condition as of ~~March 31,~~June 30, 2021 and December 31, 2020:


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		(in thousands)					(in thousands)
Affiliated mutual funds	Affiliated mutual funds	$	3,270	$	3,275	Affiliated mutual funds	$	3,332	$	3,275
Affiliated collective investment trusts	Affiliated collective investment trusts	1,332		1,325		Affiliated collective investment trusts	1,381		1,325
Accounts receivable - affiliated mutual funds and collective investment trusts	Accounts receivable - affiliated mutual funds and collective investment trusts	$	4,602	$	4,600	Accounts receivable - affiliated mutual funds and collective investment trusts	$	4,713	$	4,600

Accrued accounts receivable: Accrued accounts receivable represents the Company's contract asset for revenue that has been recognized in advance of billing separately managed account contracts. Consideration for the period billed in arrears is dependent on the client’s AUM on a future billing date and therefore conditional as of the reporting period end. During the ~~three~~six months ended ~~March 31,~~June 30, 2021, revenue was increased by less than $0.1 million for changes in transaction price. Accrued accounts receivable of approximately $0.3 million is reported within prepaid expenses and other assets in the consolidated statements of financial condition for both ~~March 31,~~June 30, 2021 and December 31, 2020.

Costs to obtain a contract: Under compensation plans in effect for periods prior to January 1, 2020, certain incremental first year commissions directly associated with new customer contracts were capitalized and amortized on a straight-line basis over an estimated customer contract period of 3 to 7 years. The total net asset as of ~~both March 31,~~June 30, 2021 and December 31, 2020 was approximately $0.6 million and $0.7 ~~million.~~million, respectively. The related amortization expense, which is included in compensation and related costs, totaled ~~less than~~approximately $0.1 million for the three and six months ended ~~March 31,~~June 30, 2021 and $0.1 million and $0.2 million for the three and six months ended ~~March 31,~~June 30, 2020. An impairment loss is recorded for contract acquisition costs related to client contracts that cancel during the period. ~~There were 0~~These impairment losses ~~for the three months ended March 31, 2021 and~~totaled less than $0.1 million for both the three and six months ended ~~March 31,~~June 30, 2021 and June 30, 2020.

Manning & Napier holds an economic interest of approximately ~~88.9%~~97.7% in Manning & Napier Group, and as managing member controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statements of financial condition with respect to the remaining approximately ~~11.1%~~2.3% economic interest in Manning & Napier Group held by M&N Group ~~Holdings and MNCC.~~Holdings. Net income attributable to noncontrolling interests on the statements of operations represents the portion of earnings attributable to the economic interest in Manning & Napier Group held by the noncontrolling interests.


		Three months ended March 31,						Three months ended June 30,					Six months ended June 30,
			2021			2020				2021			2020			2021			2020
			(in thousands)							(in thousands)
Income (loss) before provision for (benefit from) income taxes			$	6,667		$	(2,391)
Income before provision for (benefit from) income taxes									Income before provision for (benefit from) income taxes	$	8,026		$	5,743		$	14,693		$	3,352
Less: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)	Less: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)		7			(2,866)			Less: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)	(218)			901			(211)			(1,965)
Income before provision for (benefit from) income taxes, as adjusted			6,660			475
Income before provision for income taxes, as adjusted									Income before provision for income taxes, as adjusted	8,244			4,842			14,904			5,317
Controlling interest percentage (2)	Controlling interest percentage (2)		88.9		%	19.5		%	Controlling interest percentage (2)	90.1		%	44.5		%	89.6		%	42.3		%
Net income attributable to controlling interest	Net income attributable to controlling interest		5,921			93			Net income attributable to controlling interest	7,426			2,154			13,347			2,247
Plus: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)	Plus: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)		7			(2,866)			Plus: income (loss) before provision for (benefit from) income taxes of Manning & Napier, Inc. (1)	(218)			901			(211)			(1,965)
Income (loss) before provision for (benefit from) income taxes attributable to Manning & Napier, Inc.	Income (loss) before provision for (benefit from) income taxes attributable to Manning & Napier, Inc.		5,928			(2,773)			Income (loss) before provision for (benefit from) income taxes attributable to Manning & Napier, Inc.	7,208			3,055			13,136			282
Less: provision for (benefit from) income taxes of Manning & Napier, Inc.(3)	Less: provision for (benefit from) income taxes of Manning & Napier, Inc.(3)		688			(3,631)			Less: provision for (benefit from) income taxes of Manning & Napier, Inc.(3)	1,283			1,509			1,971			(2,122)
Net income attributable to Manning & Napier, Inc.	Net income attributable to Manning & Napier, Inc.		$	5,240		$	858		Net income attributable to Manning & Napier, Inc.	$	5,925		$	1,546		$	11,165		$	2,404

(3)The consolidated provision for (benefit from) income taxes is equal to the sum of (i) the provision for (benefit from) income taxes for entities other than Manning & Napier, Inc. and (ii) the provision for (benefit from) income taxes of Manning & Napier, Inc. which includes all U.S. federal and state income taxes. The consolidated provision for (benefit from) income taxes was a provision of ~~$0.7~~$1.3 million and ~~a benefit of $3.2~~$1.5 million for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively, and a provision of $2.0 million and benefit of $1.8 million for the six months ended June 30, 2021 and 2020, respectively.

As of ~~March 31,~~June 30, 2021, a total of ~~2,021,781~~428,812 units of Manning & Napier Group were held by the noncontrolling interests. Pursuant to the terms of the exchange agreement entered into at the time of the Company's initial public offering ("Exchange Agreement"), such units may be tendered for exchange or redemption. For any units exchanged, the Company may (i) pay an amount of cash equal to the number of tendered units multiplied by the value of one share of the Company's Class A common stock less a market discount and expected expenses, or, at the Company's election, (ii) issue shares of the Company's Class A common stock on a one-for-one basis, subject to customary adjustments. As the Company receives units of Manning & Napier Group that are exchanged, the Company's ownership of Manning & Napier Group will increase.

On March 15, 2021, the Company received notice that 1,592,969 of Class A units of Manning & Napier Group were tendered for redemption or exchange. The independent directors, on behalf of the Company, decided that such exchange ~~will~~would be settled in 1,592,969 shares of unregistered Class A ~~Common Stock~~common stock of the Company. The Company ~~expects the settlement of~~completed the exchange on June 30, 2021 and as a result, Manning & Napier acquired an equivalent number of Class A units of Manning & Napier Group and its ownership of Manning & Napier Group increased from 89.0% to ~~occur later in the year.~~97.7%.


		Manning & Napier Group Class A Units Held					Manning & Napier Group Class A Units Held
		Manning & Napier	Noncontrolling Interests	Total	Manning & Napier Ownership %		Manning & Napier	Noncontrolling Interests	Total	Manning & Napier Ownership %

As of December 31, 2020	As of December 31, 2020	15,783,638	2,021,781	17,805,419	88.6%	As of December 31, 2020	15,783,638	2,021,781	17,805,419	88.6%
Class A Units issued	Class A Units issued	433,259	—	433,259	0.3%	Class A Units issued	624,323	—	624,323	0.4%

As of March 31, 2021		16,216,897	2,021,781	18,238,678	88.9%
Class A Units exchanged						Class A Units exchanged	1,592,969	(1,592,969)	0	8.7%
As of June 30, 2021						As of June 30, 2021	18,000,930	428,812	18,429,742	97.7%

Manning & Napier Inc., as managing member, controls all of the business and affairs of Manning & Napier Group. Since the Company continues to have a controlling interest in Manning & Napier Group, the aforementioned changes in ownership of Manning & Napier Group were accounted for as equity transactions under ASC Topic 810, Consolidation. Additional paid-in capital and noncontrolling interests in the consolidated statements of financial position are adjusted to reallocate the Company's historical equity to reflect the change in ownership of Manning & Napier Group.

As a result of the completion of the exchange on June 30, 2021 and Manning & Napier Group's election under Section 754 of the Internal Revenue Code ("IRC"), the Company expects to benefit from future depreciation and amortization deductions resulting from increases in the tax basis of tangible and intangible assets of Manning & Napier Group. Those deductions allocated to the Company will be taken into account in reporting the Company's taxable income resulting in the recognition of a deferred tax asset.

Manning & Napier and the holders of Manning & Napier Group are party to a tax receivable agreement ("TRA"), pursuant to which Manning & Napier is required to pay to such holders 85% of the applicable cash savings, if any, in U.S. federal, state, local and foreign income tax that Manning & Napier actually realizes, or is deemed to realize in certain circumstances, as a result of (i) certain tax attributes of their units sold to Manning & Napier or exchanged (for shares of Class A common stock) and that are created as a result of the sales or exchanges and payments under the TRA and (ii) tax benefits related to imputed interest.

Accordingly, as a result of the completion of the exchange on June 30, 2021, deferred tax assets, amounts payable under the tax receivable agreement and additional paid-in capital increased by approximately $1.9 million, $1.6 million and $0.3 million respectively, within the Company’s consolidated statements of financial condition as of June 30, 2021. In addition, the Company recognized a deferred tax asset of approximately $0.3 million, resulting from an increased share of Manning & Napier Group's existing deferred tax assets.

At ~~both March 31,~~June 30, 2021 and December 31, 2020, the Company had recorded a liability of $20.8 million and $19.0 million, respectively, representing the estimated payments due to the selling unit holders under the ~~tax receivable agreement ("TRA")~~TRA entered into between Manning & Napier and the other holders of Class A Units of Manning & Napier Group. Of these amounts, approximately $5.2 million were included in accrued expenses and other liabilities at both ~~March 31,~~June 30, 2021 and December 31, 2020. The Company made 0 payments pursuant to the TRA during either of the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020.


		March 31, 2021									June 30, 2021
		Cost		Unrealized Gains		Unrealized Losses		Fair Value			Cost		Unrealized Gains		Unrealized Losses		Fair Value
		(in thousands)									(in thousands)
Available-for-sale securities	Available-for-sale securities									Available-for-sale securities
U.S. Treasury notes	U.S. Treasury notes	$	11,089	$	0	$	(130)	$	10,959	U.S. Treasury notes	$	11,086	$	0	$	(172)	$	10,914
Fixed income securities	Fixed income securities	5,952		0		(45)		5,907		Fixed income securities	6,153		0		(62)		6,091

								16,866									17,005
Equity investments, at fair value	Equity investments, at fair value									Equity investments, at fair value
Equity securities	Equity securities							5,980		Equity securities							5,567
Mutual funds	Mutual funds							1,059		Mutual funds							1,126
								7,039									6,693
Total investment securities	Total investment securities							$	23,905	Total investment securities							$	23,698

Investment securities classified as equity investments, at fair value consist of equity securities and investments in mutual funds for which the Company provides advisory services. At ~~March 31,~~June 30, 2021 and December 31, 2020, equity investments, at fair value consist of investments held by the Company to provide initial cash seeding for product development purposes and investments in mutual funds to hedge economic exposure to market movements on its deferred compensation plan. The Company recognized approximately $0.3 million of net unrealized gains and ~~$1.8~~$0.6 million of net unrealized losses related to investments classified as equity investments, at fair value during the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively.

Investment securities classified as available-for-sale consist of U.S. Treasury notes and corporate bonds to optimize cash management opportunities and for compliance with certain regulatory requirements. As of ~~March 31,~~June 30, 2021 and December 31, 2020, approximately $0.6 million of these securities was considered restricted. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. NaN other-than-temporary impairment charges have been recognized by the Company during the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020.

Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A fair value hierarchy is applied that gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).


		March 31, 2021									June 30, 2021
		Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
		(in thousands)									(in thousands)
Equity securities	Equity securities	$	5,980	$	0	$	0	$	5,980	Equity securities	$	5,567	$	0	$	0	$	5,567
Fixed income securities	Fixed income securities	0		5,907		0		5,907		Fixed income securities	0		6,091		0		6,091
Mutual funds	Mutual funds	1,059		0		0		1,059		Mutual funds	1,126		0		0		1,126

U.S. Treasury notes	U.S. Treasury notes	0		10,959		0		10,959		U.S. Treasury notes	0		10,914		0		10,914

Total assets at fair value	Total assets at fair value	$	7,039	$	16,866	$	0	$	23,905	Total assets at fair value	$	6,693	$	17,005	$	0	$	23,698

Valuations of investments in fixed income securities and U.S. Treasury notes can generally be obtained through independent pricing services. For most bond types, the pricing service utilizes matrix pricing, which considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type and current day trade information, as well as dealer supplied prices. These valuations are categorized as Level 2 in the hierarchy.


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		(in thousands)					(in thousands)
Accrued bonus and sales commissions	Accrued bonus and sales commissions	$	6,427	$	19,999	Accrued bonus and sales commissions	$	13,004	$	19,999
Accrued payroll and benefits	Accrued payroll and benefits	3,736		4,629		Accrued payroll and benefits	2,789		4,629
Accrued sub-transfer agent fees	Accrued sub-transfer agent fees	436		437		Accrued sub-transfer agent fees	454		437

Amounts payable under tax receivable agreement	Amounts payable under tax receivable agreement	5,220		5,220		Amounts payable under tax receivable agreement	5,220		5,220
Short-term operating lease liabilities	Short-term operating lease liabilities	2,902		2,854		Short-term operating lease liabilities	2,945		2,854
Other accruals and liabilities	Other accruals and liabilities	3,435		3,300		Other accruals and liabilities	2,429		3,300
Total accrued expenses and other liabilities	Total accrued expenses and other liabilities	$	22,156	$	36,439	Total accrued expenses and other liabilities	$	26,841	$	36,439


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
			2021		2020				2021		2020		2021		2020
			(in thousands)						(in thousands)
Finance lease expense	Finance lease expense							Finance lease expense
Amortization of right-of-use assets	Amortization of right-of-use assets		$	24	$	25		Amortization of right-of-use assets	$	12	$	23	$	36	$	48
Interest on lease liabilities	Interest on lease liabilities		2		2			Interest on lease liabilities	1		2		3		4
Operating lease expense	Operating lease expense		826		792			Operating lease expense	819		1,428		1,645		2,220
Short-term lease expense	Short-term lease expense		0		1			Short-term lease expense	0		1		0		2
Variable lease expense	Variable lease expense		41		75			Variable lease expense	98		72		139		147
Sublease income	Sublease income		(165)		(166)			Sublease income	(179)		(161)		(344)		(327)
Total lease expense	Total lease expense		$	728	$	729		Total lease expense	$	751	$	1,365	$	1,479	$	2,094


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
			2021		2020				2021		2020		2021		2020
			(in thousands)						(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:							Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	Operating cash flows from finance leases		$	2	$	2		Operating cash flows from finance leases	$	1	$	2	$	3	$	5
Finance cash flows from finance leases	Finance cash flows from finance leases		$	16	27			Finance cash flows from finance leases	$	17	$	24	$	33	51
Operating cash flows from operating leases	Operating cash flows from operating leases		$	946	720			Operating cash flows from operating leases	$	945	$	940	$	1,891	1,660

Right-of-use assets obtained in exchange for new lease obligations:	Right-of-use assets obtained in exchange for new lease obligations:							Right-of-use assets obtained in exchange for new lease obligations:
Finance leases	Finance leases		$	0	0			Finance leases	$	0	$	0	$	0	0
Operating leases	Operating leases		$	38	$	136		Operating leases	$	0	$	0	$	38	$	136


(in thousands, except lease term and discount rate)	~~March 31,~~June 30, 2021
Finance Leases
Finance lease right-of-use assets (1)	$	~~130~~114

Accrued expenses and other liabilities	$	6765
Other long-term liabilities	7156
Total finance lease liabilities	$	~~138~~121

Operating Leases
Operating lease right-of-use assets	$	~~15,859~~15,266

Accrued expenses and other liabilities	$	~~2,902~~2,945
Operating lease liabilities, non-current	~~15,935~~15,177
Total operating lease liabilities	$	~~18,837~~18,122

Weighted average remaining lease term
Finance leases	~~2.29 Years~~2.08 years
Operating leases	~~6.27 Years~~6.05 years
Weighted average discount rate
Finance leases	~~4.38~~4.37		%
Operating leases	~~5.14~~5.15		%

~~_______________________~~BS_______________________


Twelve month period ending March 31,		Finance Leases		Operating Leases
Twelve month period ending June 30,						Twelve month period ending June 30,	Finance Leases		Operating Leases
		(in thousands)					(in thousands)
2022	2022	$	72	$	3,793	2022	$	68	$	3,795
2023	2023	46		3,705		2023	42		3,596
2024	2024	27		3,359		2024	17		3,357
2025	2025	0		3,235		2025	0		3,135
2026	2026	0		2,966		2026	0		2,968
Thereafter	Thereafter	0		4,970		Thereafter	0		4,227
Total lease payments	Total lease payments	145		22,028		Total lease payments	127		21,078
Less imputed interest	Less imputed interest	(7)		(3,191)		Less imputed interest	(6)		(2,956)
Total lease liabilities	Total lease liabilities	$	138	$	18,837	Total lease liabilities	$	121	$	18,122

The Company may from time to time enter into agreements that contain certain representations and warranties and which provide general indemnifications. The Company may also serve as a guarantor of such obligations. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects any risk of liability associated with such guarantees to be remote.

As an investment adviser to a variety of investment products, the Company and its affiliated broker-dealer are subject to routine reviews and inspections by the SEC and the Financial Industry Regulatory Authority, Inc. Additionally, the Company could be subject to non-routine reviews and inspections by the National Futures Association and U.S. Commodity Futures Trading Commission in regards to the Company’s de minimis exposure to commodity interest investments in the mutual funds and collective investment trust vehicles it operates. From time to time the Company may also be subject to claims, or be involved in various legal proceedings, arising in the ordinary course of its business and other contingencies. The Company does not believe that the outcome of any of these reviews, inspections or other legal proceedings will have a material impact on its consolidated financial statements; however, litigation is subject to many uncertainties, and the outcome of individual litigated matters is difficult to predict. The Company will establish accruals for matters that are probable, can be reasonably estimated, and may take into account any related insurance recoveries to the extent of such recoveries. As of ~~March 31,~~June 30, 2021 and December 31, 2020, the Company has not accrued for any such claims, legal proceedings, or other contingencies.

Basic earnings per share (“basic EPS”) is computed using the two-class method to determine net income available to Class A common stock. The two-class method includes an earnings allocation formula that determines earnings per share for each participating security according to dividends declared and undistributed earnings for the period. The Company's restricted Class A common shares granted under the Equity Plan have non-forfeitable dividend rights during their vesting period and are therefore considered participating securities under the two-class method. Under the two-class method, the Company's net income available to Class A common stock is reduced by the amount allocated to the unvested restricted Class A common stock. Basic EPS is calculated by dividing net income available to Class A common stock by the weighted average number of common shares outstanding during the period.

Diluted earnings per share (“diluted EPS”) is computed under the more dilutive of either the treasury method or the two-class method. For the diluted calculation, the weighted average number of common shares outstanding during the period is increased by the assumed conversion into Class A common stock of unvested restricted stock units, unvested restricted stock awards, and outstanding stock options (collectively, "outstanding equity awards"), as well as the exchangeable Class A units of Manning & Napier Group, to the extent that such conversion would dilute earnings per share.

Net income attributable to noncontrolling interests on the statements of operations represents the portion of earnings attributable to the economic interest of Manning & Napier Group held by the noncontrolling interests (Note 4). For periods in which the outstanding Class A Units of Manning & Napier Group are dilutive to the Company's earnings per share, the calculation of diluted earnings per share also takes into account the incremental net income that would be available to Class A common stock upon the conversion of Class A Units into Class A common stock.


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
			2021		2020				2021		2020		2021		2020
			(in thousands, except share data)						(in thousands, except share data)
Numerator:	Numerator:							Numerator:
Net income attributable to controlling and noncontrolling interests	Net income attributable to controlling and noncontrolling interests		$	5,964	$	835		Net income attributable to controlling and noncontrolling interests	$	6,741	$	4,283	$	12,705	$	5,118
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests		724		(23)			Less: net income attributable to noncontrolling interests	816		2,737		1,540		2,714
Net income attributable to Manning & Napier, Inc.	Net income attributable to Manning & Napier, Inc.		$	5,240	$	858		Net income attributable to Manning & Napier, Inc.	$	5,925	$	1,546	$	11,165	$	2,404
Less: allocation to participating securities	Less: allocation to participating securities		38		13			Less: allocation to participating securities	7		13		46		27
Net income available to Class A common stock for basic EPS	Net income available to Class A common stock for basic EPS		$	5,202	$	845		Net income available to Class A common stock for basic EPS	$	5,918	$	1,533	$	11,119	$	2,377
Plus: reallocation of net income attributable to participating securities	Plus: reallocation of net income attributable to participating securities		5		0			Plus: reallocation of net income attributable to participating securities	1		0		8		0
Plus: incremental net income as a result of conversion of Class A Units of Manning & Napier Group to Class A common stock	Plus: incremental net income as a result of conversion of Class A Units of Manning & Napier Group to Class A common stock		0		215			Plus: incremental net income as a result of conversion of Class A Units of Manning & Napier Group to Class A common stock	0		1,270		0		1,485
Net income available to Class A common stock for diluted EPS	Net income available to Class A common stock for diluted EPS		$	5,207	$	1,060		Net income available to Class A common stock for diluted EPS	$	5,919	$	2,803	$	11,127	$	3,862

Denominator:	Denominator:							Denominator:
Weighted average shares of Class A common stock outstanding - basic	Weighted average shares of Class A common stock outstanding - basic		17,026,500		15,812,951			Weighted average shares of Class A common stock outstanding - basic	16,956,265		16,132,667		16,991,188		15,972,809
Dilutive effect of outstanding equity awards	Dilutive effect of outstanding equity awards		3,246,843		60,406			Dilutive effect of outstanding equity awards	3,358,020		1,762,681		3,299,726		660,725
Dilutive effect of exchangeable Class A Units	Dilutive effect of exchangeable Class A Units		0		62,034,200			Dilutive effect of exchangeable Class A Units	0		28,400,866		0		45,217,533
Weighted average shares of Class A common stock outstanding - diluted	Weighted average shares of Class A common stock outstanding - diluted		20,273,343		77,907,557			Weighted average shares of Class A common stock outstanding - diluted	20,314,285		46,296,214		20,290,914		61,851,067
Net income available to Class A common stock per share - basic	Net income available to Class A common stock per share - basic		$	0.31	$	0.05		Net income available to Class A common stock per share - basic	$	0.35	$	0.09	$	0.65	$	0.15
Net income available to Class A common stock per share - diluted	Net income available to Class A common stock per share - diluted		$	0.26	$	0.01		Net income available to Class A common stock per share - diluted	$	0.29	$	0.06	$	0.55	$	0.06

Performance-based stock options are excluded from the calculation of diluted EPS for periods in which the associated market condition has not yet been achieved. As such, for the three and six months ended ~~March 31,~~June 30, 2021, ~~288,000~~0 unvested performance-based stock options were excluded, and for the three and six months ended ~~March 31,~~June 30, 2020, 3,000,000 unvested performance-based stock options were excluded from the calculation of diluted EPS.

At ~~March 31,~~June 30, 2021, there were ~~2,021,781~~428,812 Class A Units of Manning & Napier Group outstanding, which, subject to certain restrictions, may be exchangeable for up to an equivalent number of shares of the Company's Class A common stock. These units were not included in the calculation of diluted earnings per common share for the three months ended ~~March 31,~~June 30, 2021 because the effect would have been anti-dilutive.

The Equity Plan was adopted by the Company's board of directors and approved by shareholders prior to the consummation of the Company's 2011 initial public offering. Under the Equity Plan, a total of 13,142,813 equity interests are authorized for issuance, and may be issued in the form of Class A common stock, restricted stock units, stock options, units of Manning & Napier Group, or certain classes of membership interests in the Company which may convert into units of Manning & Napier Group. At ~~March 31,~~June 30, 2021, a total of 1,998,367 equity interests were available for issuance pursuant to the Equity Plan.

The weighted average fair value of stock awards granted during the ~~three~~six months ended ~~March 31,~~June 30, 2021 was $6.04, based on the closing sale price of the Company's Class A common stock as reported on the New York Stock Exchange on the date of grant, and, if not entitled to dividends or dividend equivalents during the vesting period, reduced by the present value of such amounts expected to be paid on the underlying shares during the requisite service period.

For the three and six months ended ~~March 31,~~June 30, 2021, the Company recorded approximately $0.8 million and $2.0 million, respectively, of compensation expense related to stock awards under the Equity Plan. For the three and six months ended June 30, 2020, the Company recorded approximately ~~$1.2~~$0.7 million and ~~$1.1~~$1.8 million, respectively, of compensation expense related to stock awards under the Equity Plan. The aggregate intrinsic value of stock awards that vested during each of the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020 was approximately ~~$0.5 million.~~$1.4 million and $0.9 million, respectively. As of ~~March 31,~~June 30, 2021, there was unrecognized compensation expense of approximately ~~$10.0~~$9.1 million related to stock awards, which the Company expects to recognize over a weighted average period of approximately ~~4.2~~4.1 years.


		Stock Option Awards	Weighted Average Exercise Price		Weighted Average Contractual Term (years)	Aggregate Intrinsic Value (in thousands)			Stock Option Awards	Weighted Average Exercise Price		Weighted Average Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2021	Outstanding at January 1, 2021	2,250,000	$	2.01				Outstanding at January 1, 2021	2,250,000	$	2.01
Granted	Granted	0	$	0				Granted	0	$	0
Exercised	Exercised	(1,100,000)	$	2.01				Exercised	(1,750,000)	$	2.01
Forfeited	Forfeited	0	$	0				Forfeited	0	$	0
Outstanding at March 31, 2021		1,150,000	$	2.01	4.0	$	5,129
Exercisable at March 31, 2021		695,332	$	2.01	3.9	$	3,101
Outstanding at June 30, 2021								Outstanding at June 30, 2021	500,000	$	2.01	4.1	$	2,930
Exercisable at June 30, 2021								Exercisable at June 30, 2021	333,332	$	2.01	3.7	$	1,953

For ~~each of~~both the three and six months ended ~~March 31,~~June 30, 2021, ~~and 2020,~~ the Company recorded approximately $0.1 million of compensation expense related to stock options under the Equity Plan. For the three and six months ended June 30, 2020, the Company recorded approximately $0.1 million and $0.3 million, respectively, of compensation expense related to stock options under the Equity Plan. As of ~~March 31,~~June 30, 2021, there was unrecognized compensation expense of approximately $0.1 million related to stock options, which the Company expects to recognize over a weighted average period of approximately ~~0.9~~0.3 years.

In connection with the vesting of restricted stock units and exercise of stock options during the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Company withheld a total of ~~414,764~~705,504 shares of Class A common stock to satisfy approximately ~~$2.9~~$5.2 million of employee income tax withholding requirements. These net share settlements had the effect of shares repurchased and retired by the Company, as they reduced the total number of Class A common shares outstanding.

The Company is comprised of entities that have elected to be treated as either a limited liability company ("LLC") or a “C-Corporation". As such, the entities functioning as LLCs are not liable for or able to benefit from U.S. federal and most state income taxes on their earnings, and earnings (losses) will be included in the personal income tax returns of each entity’s unit holders. The entities functioning as C-Corporations are liable for or able to benefit from U.S. federal and state and local income taxes on their earnings and losses, respectively.

In calculating the provision for income taxes, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances at each interim period. On a quarterly basis, the estimated annual effective tax rate is adjusted, as appropriate, based upon changes in facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and at each interim period thereafter.


		Three months ended March 31,						Three months ended June 30,					Six months ended June 30,
			2021			2020				2021			2020			2021			2020
			(in thousands)							(in thousands)
Income (loss) before provision for (benefit from) income taxes	Income (loss) before provision for (benefit from) income taxes		$	6,667		$	(2,391)		Income (loss) before provision for (benefit from) income taxes	$	8,026		$	5,743		$	14,693		$	3,352
Effective tax rate	Effective tax rate		10.5		%	134.9		%	Effective tax rate	16.0		%	25.4		%	13.5		%	(52.7)		%
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes		703			(3,226)			Provision for (benefit from) income taxes	1,285			1,460			1,988			(1,766)
Provision for (benefit from) income taxes at statutory rate	Provision for (benefit from) income taxes at statutory rate		1,400			(502)			Provision for (benefit from) income taxes at statutory rate	1,685			1,206			3,086			704
Difference between tax at effective vs. statutory rate	Difference between tax at effective vs. statutory rate		$	(697)		$	(2,724)		Difference between tax at effective vs. statutory rate	$	(400)		$	254		$	(1,098)		$	(2,470)

portion of the Company’s earnings are not subject to corporate level taxes. The Company recognized a reduced benefit from ~~the~~ flow-through entities during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to ~~March 31,~~June 30, 2020 due to a higher portion of Manning & Napier Group's earnings subject to taxation at the C-Corporation level attributed to Manning & Napier Inc.'s increased ownership of Manning & Napier Group as of ~~March 31,~~June 30, 2021 compared to ~~March 31,~~June 30, 2020.

In addition, the effective rate during the three and six months ended ~~March 31,~~June 30, 2021 is lower than the statutory rate of 21% due to the incremental tax benefits realized from the exercise of stock option awards during the first and second quarters of 2021, partially offset by the impacts from permanent differences between book and tax income, including but not limited to Section 162(m) of the IRC which limits the annual amount of deductible compensation.

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, the income tax benefit also includes the impact from the enactment of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") on March 27, 2020 which includes, among other things, the ability to carryback net operating losses from 2018, 2019 and 2020 when the federal tax rate was 34% compared to the current statutory ~~rates~~rate of 21%. As a result, the Company recognized an income tax benefit related to the favorable rate applied to its net operating losses.

A state is currently auditing the Company's 2016, 2017 and 2018 corporate tax returns. The audit is expected to be completed in 2021. As of ~~March 31,~~June 30, 2021, the audit is in process and the state is collecting and evaluating the data for which the Company has not recorded a liability for uncertain tax positions under ASC Topic 740, Income Taxes. The Company believes any potential increases to this liability, which could be up to approximately $1.3 million, would not result in a material change to its financial position.

The Company manages the personal funds of certain of the Company's executive officers and directors and/or their affiliated entities. Pursuant to the respective investment management agreements, in some instances the Company may waive or reduce its regular advisory fees for these accounts. The aggregate value of the fees earned was less than $0.1 million for each of the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020. NaN fees were waived for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and the aggregate value of the fees waived was less than $0.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020.

The Company earns investment advisory fees, distribution fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. Fees earned for advisory and distribution services provided were approximately ~~$9.9~~$10.6 million and $20.5 million for the three and six months ended ~~March 31,~~June 30, 2021, respectively, and ~~$8.9~~$8.5 million and $17.4 million for the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively. Fees earned for administrative services provided were approximately ~~$0.2~~$0.3 million and ~~$0.4~~$0.5 million ~~respectively,~~ for the three and six months ended ~~March 31,~~June 30, 2021, respectively, and

The Company incurs certain expenses on behalf of the collective investment trusts and has contractually agreed to limit its fees and reimburse expenses to limit operating expenses incurred by certain affiliated fund series. The aggregate value of fees waived and expenses reimbursed to, or incurred for, affiliated mutual funds and collective investment trusts were approximately $0.5 million ~~for the three months ended March 31, 2021~~ and ~~$1.2~~$1.0 million for the three and six months ended ~~March 31,~~June 30, 2021, and $1.3 million and $2.5 million for the three and six months ended June 30, 2020.

As of March 31, 2021, a total of 2,021,781 units of Manning & Napier Group were held by the noncontrolling interests. Pursuant to the terms of the Exchange Agreement, such units may be tendered for exchange or redemption. In connection with the exchange, the Company has the ability to pay an amount of cash equal to the number of units tendered multiplied by the 15 day average value of one share of the Company'sDividend on Class A common stock ~~between February 22,~~

~~On March 15,~~or about August 16, 2021 ~~the Company received notice that 1,592,969~~to shareholders of ~~Class A units~~record as of Manning & Napier Group were tendered for redemption or exchange. The independent directors, on behalf of the Company, have decided that such exchange will be settled in 1,592,969 shares of unregistered Class A Common Stock of the Company. The Company expects the settlement of the exchange to occur later in the year. As a result of the exchange, Manning & Napier, Inc. will acquire an equivalent number of Class A units of Manning & Napier Group, resulting in an increase in its ownership of Manning & Napier Group from approximately 88.9% to 98%.August 2, 2021.

This report contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which reflect the views of Manning & Napier, Inc. ("we," "our," or "us") with respect to, among other things, our future operations and financial performance. Words like "believes," "expects," "may," "estimates," "will," "should," "could," "intends," "likely," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, are used to identify forward-looking statements, although not all forward-looking statements contain these words.

Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, there can be no assurance that our actual results will not differ materially from what we expect or believe. Some of the factors that could cause our actual results to differ materially from our expectations or beliefs are disclosed in the “Risk Factors” section, as well as other sections, of our Annual Report on Form 10-K which include, without limitation: changes in securities or financial markets or general economic conditions; the impact of the COVID-19 pandemic and related recovery efforts on the U.S. and global economy; a decline in the performance of our products; client sales and redemption activity; any loss of an executive officer or key personnel; changes in our business related to strategic acquisitions and other transactions; and changes of government policy or regulations. All forward-looking statements speak only as of the date on which they are made and we undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Manning & Napier, Inc. is an independent investment management firm that provides our clients with a broad range of financial solutions and investment strategies. Founded in 1970 and headquartered in Fairport, New York, we serve a diversified client base of high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. Our investment strategies offer equity, fixed income and a range of blended asset portfolios, ~~by employing traditional and quantitative approaches.~~including life cycle funds.

We are closely monitoring the ~~economy and financial markets continue recovering from the impact of COVID-19, we expect our business to gradually return to a pre-pandemic, ‘normal’ state. More directly, any~~ potential near-term impacts of a COVID-19 resurgence on our investment performance, financial statements, capital and liquidity, and our business ~~operations are lessening, and~~operations. Our financial condition is stable, which we believe ~~it is no longer an immediate concern.~~will allow us to effectively manage the financial impacts of COVID-19. We believe our balance sheet should provide us with more than sufficient resources and flexibility to meet our present and future cash needs, as well as to continue investing in key strategic initiatives.

~~First~~Second quarter financial market performance was ~~decidedly mixed~~strong as ~~another strong quarter of~~both equity ~~market returns was partially offset by one of the most difficult three-month stretches for aggregate US~~and fixed income ~~in decades, catalyzed~~markets added further gains onto their already robust post-pandemic rallies. Within the US, economic activity surged, driven by ~~a substantial move higher in US Treasury interest rates.~~

For most of the first half of the quarter, equity market leadership was within smaller and more economically sensitive areas. By the end of the quarter, however, economic growth ahead powered equities higher. Gains were led by stocks in the value-style and of smaller capitalization, a continuation of a trend reversal first experienced at the tail end of last year. Internationally,expectations began to moderate, causing investor preferences to sharply swing back toward more growth-oriented businesses. Elsewhere, international equity ~~returns were broad-based, stretching between both developed and emerging market economies. Despite improving expectations for economic growth, equity market valuations remain elevated.~~markets continued to lag their domestic peers.

Within fixed income, ~~market expectations for potentially stronger economic growth and higher inflation drove yields significantly higher~~a partial reversal of the recent rise in interest rates aided performance broadly, particularly on the mid- to ~~long-end~~long-ends of the yield curve. ~~Rising rates were an immediate challenge~~Additional credit spread compression, down to ~~performance for~~historically low levels, in corporate and municipal bond securities, including in both investment and below-investment grade issuances, also aided performance.

We believe US economic fundamentals are strong, but those fundamentals are being at least partially, if not wholly offset by elevated valuations across financial markets. Given that valuations tend to be a strong indicator of future long-term returns, we believe that the ~~quarter but set the stage for potential higher yields~~forward return expectations of investors should be modest, or at least relatively lower than they have been in the future. At the same time, further progress along the economic recovery led credit spreads to tighten, and they are now near historic lows throughout credit markets, including both investment-grade and below-investment-grade corporate bonds, as well as in municipal securities.

On February 3, 2021, the Board of Directors approved a share repurchase program authorizing the purchase of up to $10.0 million of Manning & Napier Inc. Class A common shares. Given the strength of our balance sheet and cash position, the Company plans to use the approved share repurchase program to, at a minimum, offset dilution created from the awards issued under the Company’s long-term incentive plan to our employees during the first quarter of 2021. These equity awards were valued at approximately $6.0 million and will vest over the next 5 years. The authority to repurchase shares will be exercised from time to time as market conditions warrant, is subject to regulatory considerations and will expire on December 31, 2021. The timing, amount, and other terms and conditions of any repurchases will be determined by management at its discretion based on a variety of factors, including the market price of shares, general market and economic conditions, and legal requirements. The repurchase program may be modified, discontinued or suspended at any time. We currently intend to fund the program through cash on hand and future cash flow. During the ~~first quarter of~~six months ended June 30, 2021, ~~Manning & Napier, Inc.~~we. purchased a total of ~~412,405~~713,665 Class A common shares using approximately ~~$3.0~~$5.3 million in cash.

~~Also during the first quarter of~~On March 15, 2021, ~~pursuant to the terms of the Exchange Agreement between~~ the Company ~~and the holders~~received notice that 1,592,969 of ~~its non-controlling interests, 1,592,969~~ Class A units of Manning & Napier Group, LLC ("Manning & Napier Group") were tendered for ~~cash~~redemption or ~~shares of the Company's Class A common stock.~~exchange. The independent directors, on behalf of the Company, ~~have~~ decided that such exchange will be settled in 1,592,969 shares of unregistered Class A Common Stock of the Company. The Company ~~expects the settlement of~~completed the exchange ~~to occur later in the year. As~~on June 30, 2021 and as a result, ~~of the exchange,~~ Manning & Napier ~~Inc. will acquire~~acquired an equivalent number of Class A units of Manning & Napier Group ~~resulting in an increase in~~and its ownership of Manning & Napier Group increased from ~~approximately 89%~~89.0% to ~~98%~~97.7%.

Our separate accounts are primarily distributed through our wealth management sales channel, where our financial consultants form relationships with high-net-worth individuals, endowments, foundations, and retirement plans. To a lesser extent, we also obtain a portion of our separate account distribution via third parties, either through our intermediary sales channel, where national brokerage firm representatives or independent financial advisors select our separate account strategies for their clients, or through our platform/sub-advisor relationships, where unaffiliated registered investment advisors approve our strategies for their product platforms. Our separate account strategies are a primary driver of our blended asset portfolios for high-net-worth, middle market institutional clients and financial intermediaries. In contrast, larger institutions and unaffiliated registered investment advisor platforms are a driver of our separate account equity portfolios.

Our mutual funds and collective investment trusts are distributed primarily through financial intermediaries, including brokers, financial advisors, retirement plan advisors and platform relationships. We also distribute our mutual fund and collective investment trusts through our institutional representatives, particularly within the defined contribution, Taft-Hartley, and institutional marketplace. Our mutual fund and collective investment trust strategies are an important driver of our blended asset class and single asset class portfolios.

Our sales efforts distinctly separate the Wealth Management clients to which we deliver holistic solutions, including high-net-worth families, endowments and foundations, and small and mid-sized business, from our Institutional and Intermediary clients, including third party advisors, platforms and consultants, as well as larger institutions and Taft-Hartley clients. The table below reflects the estimated composition of our assets under management ("AUM") as of ~~March 31,~~June 30, 2021, by sales channel and investment portfolio:


		March 31, 2021													June 30, 2021
		Blended Asset			Equity			Fixed Income			Total				Blended Asset			Equity			Fixed Income			Total
		(dollars in millions)													(dollars in millions)
Total AUM	Total AUM													Total AUM
Wealth Management	Wealth Management	$	8,042.6		$	925.9		$	249.0		$	9,217.5		Wealth Management	$	8,382.7		$	979.0		$	251.8		$	9,613.5
Institutional and Intermediary	Institutional and Intermediary	6,095.9			5,056.7			769.7			11,922.3			Institutional and Intermediary	6,485.9			5,354.9			807.2			12,648.0

Total	Total	$	14,138.5		$	5,982.6		$	1,018.7		$	21,139.8		Total	$	14,868.6		$	6,333.9		$	1,059.0		$	22,261.5
Percentage of AUM	Percentage of AUM													Percentage of AUM
Wealth Management	Wealth Management	38		%	4		%	1		%	43		%	Wealth Management	38		%	4		%	1		%	43		%
Institutional and Intermediary	Institutional and Intermediary	29		%	24		%	4		%	57		%	Institutional and Intermediary	29		%	24		%	4		%	57		%

Total	Total	67		%	28		%	5		%	100		%	Total	67		%	28		%	5		%	100		%
Percentage of portfolio by channel	Percentage of portfolio by channel													Percentage of portfolio by channel
Wealth Management	Wealth Management	57		%	15		%	24		%	44		%	Wealth Management	56		%	15		%	24		%	43		%
Institutional and Intermediary	Institutional and Intermediary	43		%	85		%	76		%	56		%	Institutional and Intermediary	44		%	85		%	76		%	57		%

Total	Total	100		%	100		%	100		%	100		%	Total	100		%	100		%	100		%	100		%
Percentage of channel by portfolio	Percentage of channel by portfolio													Percentage of channel by portfolio
Wealth Management	Wealth Management	87		%	10		%	3		%	100		%	Wealth Management	87		%	10		%	3		%	100		%
Institutional and Intermediary	Institutional and Intermediary	52		%	42		%	6		%	100		%	Institutional and Intermediary	52		%	42		%	6		%	100		%

As of ~~March 31,~~June 30, 2021, blended portfolios account for 67% of our total AUM at ~~$14.1~~$14.9 billion, a 4%5% increase from ~~December~~March 31, ~~2020~~2021 when blended assets were ~~$13.6~~$14.1 billion. Blended portfolio AUM is ~~similar~~split across ~~both~~ distribution channels, with ~~57%~~56% in wealth management and ~~43%~~44% in institutional and intermediary. Equity portfolios account for 28% of our total AUM, at ~~$6.0~~$6.3 billion, a 8%6% increase from ~~December~~March 31, ~~2020~~2021 when equity portfolios were at ~~$5.5~~$6.0 billion. Of equity portfolio AUM, 85% is in the institutional and intermediary channel, and 15% is in the wealth management channel. Fixed income portfolios account for 5% of total AUM at ~~$1.0~~$1.1 billion, ~~consistent with December~~a 4% increase from March 31, ~~2020. Similar to equity portfolio AUM, the~~2021. The majority of fixed income assets come through the institutional and intermediary channel at 76%, and 24% ~~of fixed income AUM is~~ in the wealth management channel.

During the ~~three~~six months ended ~~March 31,~~June 30, 2021, our wealth management sales channel contributed ~~36%~~31% of our total gross client inflows, while our institutional and intermediary channel contributed ~~64%~~69%. Of the ~~$0.6~~$1.4 billion in gross client inflows, blended asset portfolios represented ~~61%~~66%, while equity and fixed income portfolios represented ~~30%~~26% and 9%8%, respectively.

One of the most significant factors influencing net flows and AUM is the investment performance of our various strategies. As an active manager, it is typical for our investment strategies to exhibit portfolio positioning that is notably divergent from benchmarks and common market indices. We believe this is a strength of our investment approach, although it can cause substantial performance deviations, both positive and negative, versus common benchmarks. In general, our investment processes have a preference for risk management, focusing heavily on fundamentals and valuations. Historically, we have tended to provide a degree of downside protection in adverse markets, while having participated somewhat less than fully in bull markets. Broadly speaking, we expect our investment approach to reduce volatility and create a smoother performance pattern over time, and we believe these characteristics are desirable and an attractive differentiator in our industry. As a result, the overall performance of our suite of investment strategies often differs from many others in the industry, potentially causing the results of our operations to, at times, also diverge.


															Sales Channel (4)
															Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
																	(in millions)
As of March 31, 2021														As of March 31, 2021	$	9,217.5	$	11,922.3	$	21,139.8	44	%	56	%	100	%
Gross client inflows (1)														Gross client inflows (1)	216.6		570.7		787.3
Gross client outflows (1)														Gross client outflows (1)	(295.2)		(553.8)		(849.0)

Market appreciation/(depreciation) & other (2)														Market appreciation/(depreciation) & other (2)	474.6		708.8		1,183.4
As of June 30, 2021														As of June 30, 2021	$	9,613.5	$	12,648.0	$	22,261.5	43	%	57	%	100	%
Average AUM for period														Average AUM for period	$	9,467.4	$	12,373.0	$	21,840.4

As of March 31, 2020														As of March 31, 2020	$	7,732.9	$	9,327.6	$	17,060.5	45	%	55	%	100	%
Gross client inflows (1)														Gross client inflows (1)	193.3		359.5		552.8
Gross client outflows (1)														Gross client outflows (1)	(360.7)		(850.9)		(1,211.6)
Market appreciation/(depreciation) & other (2)														Market appreciation/(depreciation) & other (2)	768.9		1,469.7		2,238.6
As of June 30, 2020														As of June 30, 2020	$	8,334.4	$	10,305.9	$	18,640.3	45	%	55	%	100	%
Average AUM for period														Average AUM for period	$	8,164.0	$	9,930.2	$	18,094.2
		Sales Channel (4)
		Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total			Wealth Management		Institutional and Intermediary		Total		Wealth Management		Institutional and Intermediary		Total
				(in millions)													(in millions)
As of December 31, 2020	As of December 31, 2020	$	8,906.4	$	11,213.0	$	20,119.4	44	%	56	%	100	%	As of December 31, 2020	$	8,906.4	$	11,213.0	$	20,119.4	44	%	56	%	100	%
Gross client inflows (1)	Gross client inflows (1)	224.8		401.6		626.4								Gross client inflows (1)	441.4		972.3		1,413.7
Gross client outflows (1)	Gross client outflows (1)	(305.3)		(453.5)		(758.8)								Gross client outflows (1)	(600.5)		(1,007.3)		(1,607.8)

Market appreciation/(depreciation) & other (2)(3)	Market appreciation/(depreciation) & other (2)(3)	391.6		761.2		1,152.8								Market appreciation/(depreciation) & other (2)(3)	866.2		1,470.0		2,336.2
As of March 31, 2021		$	9,217.5	$	11,922.3	$	21,139.8	44	%	56	%	100	%
As of June 30, 2021														As of June 30, 2021	$	9,613.5	$	12,648.0	$	22,261.5	43	%	57	%	100	%
Average AUM for period	Average AUM for period	$	8,993.0	$	11,454.3	$	20,447.3							Average AUM for period	$	9,232.0	$	11,929.7	$	21,161.7

As of December 31, 2019	As of December 31, 2019	$	8,716.4	$	10,763.7	$	19,480.1	45	%	55	%	100	%	As of December 31, 2019	$	8,716.4	$	10,763.7	$	19,480.1	45	%	55	%	100	%
Gross client inflows (1)	Gross client inflows (1)	202.1		466.7		668.8								Gross client inflows (1)	395.4		826.2		1,221.6
Gross client outflows (1)	Gross client outflows (1)	(375.3)		(753.9)		(1,129.2)								Gross client outflows (1)	(736.0)		(1,604.8)		(2,340.8)

Market appreciation/(depreciation) & other (2)	Market appreciation/(depreciation) & other (2)	(810.3)		(1,148.9)		(1,959.2)								Market appreciation/(depreciation) & other (2)	(41.4)		320.8		279.4
As of March 31, 2020		$	7,732.9	$	9,327.6	$	17,060.5	45	%	55	%	100	%
As of June 30, 2020														As of June 30, 2020	$	8,334.4	$	10,305.9	$	18,640.3	45	%	55	%	100	%
Average AUM for period	Average AUM for period	$	8,527.9	$	10,136.2	$	18,691.1							Average AUM for period	$	8,486.1	$	10,130.7	$	18,616.8

(3)Beginning in March 2021, AUM includes assets associated with our model-delivery business, previously classified as assets under advisement. These assets totaled $429.9 million at December 31, 2020, comprised of $62.5 million in our wealth management channel and $367.4 million in our institutional and intermediary channel. These amounts are included above in market appreciation (depreciation) and other for the ~~first quarter of~~six months ended June 30, 2021.


																			Blended Asset		Equity		Fixed Income		Total		Blended Asset		Equity		Fixed Income		Total
																					(in millions)
As of March 31, 2021																		As of March 31, 2021	$	14,138.5	$	5,982.6	$	1,018.7	$	21,139.8	67	%	28	%	5	%	100	%
Gross client inflows (1)																		Gross client inflows (1)	543.7		183.2		60.4		787.3
Gross client outflows (1)																		Gross client outflows (1)	(572.5)		(242.7)		(33.8)		(849.0)
Market appreciation/(depreciation) & other (2)																		Market appreciation/(depreciation) & other (2)	758.9		410.8		13.7		1,183.4
As of June 30, 2021																		As of June 30, 2021	$	14,868.6	$	6,333.9	$	1,059.0	$	22,261.5	67	%	28	%	5	%	100	%
Average AUM for period																		Average AUM for period	$	14,562.2	$	6,240.3	$	1,037.9	$	21,840.4

As of March 31, 2020																		As of March 31, 2020	$	12,096.8	$	3,944.7	$	1,019.0	$	17,060.5	71	%	23	%	6	%	100	%
Gross client inflows (1)																		Gross client inflows (1)	426.5		99.4		26.9		552.8
Gross client outflows (1)																		Gross client outflows (1)	(851.8)		(292.5)		(67.3)		(1,211.6)
Market appreciation/(depreciation) & other (2)																		Market appreciation/(depreciation) & other (2)	1,403.8		810.1		24.7		2,238.6
As of June 30, 2020																		As of June 30, 2020	$	13,075.3	$	4,561.7	$	1,003.3	$	18,640.3	70	%	25	%	5	%	100	%
Average AUM for period																		Average AUM for period	$	12,729.7	$	4,353.7	$	1,010.8	$	18,094.2

		Blended Asset		Equity		Fixed Income		Total		Blended Asset		Equity		Fixed Income		Total			Blended Asset		Equity		Fixed Income		Total		Blended Asset		Equity		Fixed Income		Total
				(in millions)																	(in millions)
As of December 31, 2020	As of December 31, 2020	$	13,558.8	$	5,545.3	$	1,015.3	$	20,119.4	67	%	28	%	5	%	100	%	As of December 31, 2020	$	13,558.8	$	5,545.3	$	1,015.3	$	20,119.4	67	%	28	%	5	%	100	%
Gross client inflows (1)	Gross client inflows (1)	379.8		187.6		59.0		626.4										Gross client inflows (1)	923.5		370.8		119.4		1,413.7
Gross client outflows (1)	Gross client outflows (1)	(501.2)		(200.1)		(57.5)		(758.8)										Gross client outflows (1)	(1,073.7)		(442.8)		(91.3)		(1,607.8)
Market appreciation/(depreciation) & other (2) (3)	Market appreciation/(depreciation) & other (2) (3)	701.1		449.8		1.9		1,152.8										Market appreciation/(depreciation) & other (2) (3)	1,460.0		860.6		15.6		2,336.2
As of March 31, 2021		$	14,138.5	$	5,982.6	$	1,018.7	$	21,139.8	67	%	28	%	5	%	100	%
As of June 30, 2021																		As of June 30, 2021	$	14,868.6	$	6,333.9	$	1,059.0	$	22,261.5	67	%	28	%	5	%	100	%
Average AUM for period	Average AUM for period	$	13,699.0	$	5,719.2	$	1,029.1	$	20,447.3									Average AUM for period	$	14,159.4	$	5,967.4	$	1,034.9	$	21,161.7

As of December 31, 2019	As of December 31, 2019	$	13,473.3	$	4,988.8	$	1,018.0	$	19,480.1	69	%	26	%	5	%	100	%	As of December 31, 2019	$	13,473.3	$	4,988.8	$	1,018.0	$	19,480.1	69	%	26	%	5	%	100	%
Gross client inflows (1)	Gross client inflows (1)	368.2		237.2		63.4		668.8										Gross client inflows (1)	794.7		336.6		90.3		1,221.6
Gross client outflows (1)	Gross client outflows (1)	(816.4)		(231.7)		(81.1)		(1,129.2)										Gross client outflows (1)	(1,668.2)		(524.2)		(148.4)		(2,340.8)

Market appreciation/(depreciation) & other (2)	Market appreciation/(depreciation) & other (2)	(928.3)		(1,049.6)		18.7		(1,959.2)										Market appreciation/(depreciation) & other (2)	475.5		(239.5)		43.4		279.4
As of March 31, 2020		$	12,096.8	$	3,944.7	$	1,019.0	$	17,060.5	71	%	24	%	5	%	100	%
As of June 30, 2020																		As of June 30, 2020	$	13,075.3	$	4,561.7	$	1,003.3	$	18,640.3	70	%	25	%	5	%	100	%
Average AUM for period	Average AUM for period	$	13,025.7	$	4,640.4	$	1,025.0	$	18,691.1									Average AUM for period	$	12,974.6	$	4,619.6	$	1,022.6	$	18,616.8

(3)Beginning in March 2021, AUM includes assets associated with our model-delivery business, previously classified as assets under advisement. These assets totaled $429.9 million at December 31, ~~2020, comprised of $281.3 million in our blended asset portfolio and $148.6 million in our equity portfolio.~~2020. These amounts are included above in market appreciation (depreciation) and other for the ~~first quarter of~~six months ended June 30, 2021.

The following table summarizes the annualized returns for several of our key investment strategies and relative benchmarks. Since inception and over long-term periods, we believe these strategies have earned attractive returns on both an absolute and relative basis. We recognize, however that some key strategies have mixed track records over the past several years. These strategies are used across separate account, mutual fund and collective investment trust vehicles, and represent approximately ~~77%~~78% of our AUM as of ~~March 31,~~June 30, 2021.


Key Strategies	Key Strategies	AUM as of March 31, 2021 (in millions)		Inception Date	Annualized Returns as of March 31, 2021 (2)				Key Strategies	AUM as of June 30, 2021 (in millions)		Inception Date				Annualized Returns as of June 30, 2021 (2)
					One Year	Three Year	Five Year	Ten Year						AUM as of June 30, 2021 (in millions)		Inception Date	One Year	Three Year	Five Year	Ten Year	Inception
Long-Term Growth (30%-80% Equity Exposure)	Long-Term Growth (30%-80% Equity Exposure)	$	5,946.9	1/1/1973	29.9%	11.9%	10.5%	8.0%			9.7%		Long-Term Growth (30%-80% Equity Exposure)				22.6%	13.2%	11.2%	8.5%	9.7%
Blended Index (3)	Blended Index (3)				30.0%	10.3%	9.7%	8.0%			8.9%		Blended Index (3)				21.4%	11.7%	10.3%	8.4%	9.0%
Core Non-U.S. Equity	Core Non-U.S. Equity	$	754.0	10/1/1996	65.4%	11.8%	11.2%	5.7%			8.2%		Core Non-U.S. Equity	$	814.3	10/1/1996	46.8%	15.9%	13.3%	6.3%	8.4%
Benchmark: ACWIxUS Index	Benchmark: ACWIxUS Index				49.4%	6.5%	9.8%	4.9%			5.6%		Benchmark: ACWIxUS Index				35.7%	9.4%	11.1%	5.5%	5.7%
Growth with Reduced Volatility (20%-60% Equity Exposure)	Growth with Reduced Volatility (20%-60% Equity Exposure)	$	2,827.3	1/1/1973	23.3%	10.2%	8.6%	6.6%			8.8%		Growth with Reduced Volatility (20%-60% Equity Exposure)	$	2,940.7	1/1/1973	17.5%	11.3%	9.2%	6.9%	8.9%
Blended Index (4)	Blended Index (4)				21.8%	8.8%	7.9%	6.7%			8.4%		Blended Index (4)				15.4%	9.8%	8.3%	7.0%	8.5%
Equity-Oriented (70%-100% Equity Exposure)	Equity-Oriented (70%-100% Equity Exposure)	$	1,438.3	1/1/1993	50.7%	15.7%	14.7%	10.2%			10.6%		Equity-Oriented (70%-100% Equity Exposure)	$	1,569.8	1/1/1993	35.4%	17.3%	15.9%	11.1%	10.8%
Blended Benchmark: 65% Russell 3000 / 20% ACWIxUS/ 15% Bloomberg Barclays U.S. Aggregate Bond	Blended Benchmark: 65% Russell 3000 / 20% ACWIxUS/ 15% Bloomberg Barclays U.S. Aggregate Bond				49.2%	13.3%	13.3%	10.6%			9.1%		Blended Benchmark: 65% Russell 3000 / 20% ACWIxUS/ 15% Bloomberg Barclays U.S. Aggregate Bond				35.0%	15.0%	14.4%	11.3%	9.3%
Equity-Focused Blend (50%-90% Equity Exposure)	Equity-Focused Blend (50%-90% Equity Exposure)	$	1,057.4	4/1/2000	36.7%	13.5%	12.0%	9.0%			7.9%		Equity-Focused Blend (50%-90% Equity Exposure)	$	1,137.1	4/1/2000	27.1%	15.0%	12.9%	9.6%	8.1%
Blended Benchmark: 53% Russell 3000 / 17% ACWIxUS/ 30% Bloomberg Barclays U.S. Aggregate Bond	Blended Benchmark: 53% Russell 3000 / 17% ACWIxUS/ 30% Bloomberg Barclays U.S. Aggregate Bond				39.4%	11.9%	11.6%	9.4%			6.3%		Blended Benchmark: 53% Russell 3000 / 17% ACWIxUS/ 30% Bloomberg Barclays U.S. Aggregate Bond				28.1%	13.4%	12.4%	9.9%	6.5%
Core Equity-Unrestricted (90%-100% Equity Exposure)	Core Equity-Unrestricted (90%-100% Equity Exposure)	$	669.3	1/1/1995	57.8%	16.9%	16.3%	11.6%			11.8%		Core Equity-Unrestricted (90%-100% Equity Exposure)	$	721.1	1/1/1995	39.3%	18.4%	17.6%	12.7%	12.1%
Blended Benchmark: 80% Russell 3000 / 20% ACWIxUS	Blended Benchmark: 80% Russell 3000 / 20% ACWIxUS				59.9%	15.0%	15.3%	12.0%			9.8%		Blended Benchmark: 80% Russell 3000 / 20% ACWIxUS				42.5%	16.9%	16.5%	12.8%	10.0%
Core U.S. Equity	Core U.S. Equity	$	284.8	7/1/2000	59.1%	19.1%	18.1%	12.8%			9.3%		Core U.S. Equity	$	304.7	7/1/2000	41.0%	20.4%	19.6%	14.0%	9.7%
Benchmark: Russell 3000	Benchmark: Russell 3000				62.5%	17.1%	16.6%	13.8%			7.4%		Benchmark: Russell 3000				44.2%	18.7%	17.9%	14.7%	7.7%
Conservative Growth (5%-35% Equity Exposure)	Conservative Growth (5%-35% Equity Exposure)	$	569.0	4/1/1992	12.6%	7.0%	5.6%	4.5%			6.0%		Conservative Growth (5%-35% Equity Exposure)	$	677.3	4/1/1992	9.0%	7.6%	5.8%	4.6%	6.1%
Blended Benchmark: 15% Russell 3000 / 5% ACWIxUS / 80% Bloomberg Barclays U.S. Intermediate Aggregate Bond	Blended Benchmark: 15% Russell 3000 / 5% ACWIxUS / 80% Bloomberg Barclays U.S. Intermediate Aggregate Bond				11.3%	6.5%	5.2%	4.7%			6.2%		Blended Benchmark: 15% Russell 3000 / 5% ACWIxUS / 80% Bloomberg Barclays U.S. Intermediate Aggregate Bond				7.6%	7.0%	5.3%	4.8%	6.2%
Aggregate Fixed Income	Aggregate Fixed Income	$	196.7	1/1/1984	2.2%	5.1%	3.3%	3.4%			7.0%		Aggregate Fixed Income	$	213.4	1/1/1984	0.5%	5.8%	3.4%	3.4%	7.0%
Benchmark: Bloomberg Barclays U.S. Aggregate Bond	Benchmark: Bloomberg Barclays U.S. Aggregate Bond				0.7%	4.7%	3.1%	3.4%			6.9%		Benchmark: Bloomberg Barclays U.S. Aggregate Bond				(0.3)%	5.3%	3.0%	3.4%	6.9%
Rainier International Small Cap	Rainier International Small Cap	$	1,088.0	3/28/2012	76.6%	11.9%	14.2%	N/A (1)			14.3%		Rainier International Small Cap	$	1,215.3	3/28/2012	49.1%	15.3%	16.1%	N/A (1)	14.9%
Benchmark: MSCI ACWIxUS Small Cap Index	Benchmark: MSCI ACWIxUS Small Cap Index				69.8%	6.6%	10.4%	N/A (1)			8.1%		Benchmark: MSCI ACWIxUS Small Cap Index				47.0%	9.8%	12.0%	N/A (1)	8.6%
Disciplined Value US	Disciplined Value US	$	1,435.4	1/1/2013	50.9%	11.2%	13.3%	N/A (1)			14.2%		Disciplined Value US	$	1,488.6	1/1/2013	35.5%	12.2%	13.3%	N/A (1)	14.2%
Benchmark: Russell 1000 Value	Benchmark: Russell 1000 Value				56.1%	11.0%	11.7%	N/A (1)			13.8%		Benchmark: Russell 1000 Value				43.7%	12.4%	11.9%	N/A (1)	14.0%

(3)Benchmark shown uses the 55/45 Blended Index from 01/01/1973-12/31/1987 and the 40/15/45 Blended Index from 01/01/1988- ~~03/31/~~6/30/2021. The 55/45 Blended Index is represented by 55% S&P 500 Total Return Index ("S&P 500") and 45% Bloomberg Barclays U.S. Government/Credit Bond Index ("BGCB"). The 40/15/45 Blended Index is 40% Russell 3000 Index ("Russell 3000"), 15% MSCI ACWI ex USA Index ("ACWxUS"), and 45% Bloomberg Barclays U.S. Aggregate Bond Index ("BAB").

(4)Benchmark shown uses the 40/60 Blended Index from 01/01/1973-12/31/1987, the 30/10/60 Blended Index from 01/01/1988-12/31/2019, and the 30/10/30/30 Blended Index from 01/01/2020 to ~~03/31/2021.~~6/30/21. The 40/60 Blended Index is represented by 40% S&P 500 and 60% BGCB. The 30/10/60 Blended Index is represented by 30% Russell 3000, 10% ACWxUS, and 60% BAB. The 30/10/30/30 Blended Index is represented by 30% Russell 3000, 10% ACWxUS, 30% BAB, and 30% Barclays Intermediate Aggregate Bond Index.

Our revenues primarily consist of investment management fees earned from managing our clients’ AUM. We earn our investment management fees as a percentage of our clients’ AUM either as of a specified date or on a daily basis. Our investment management fees can fluctuate based on the average fee rate for our investment management products, which are affected by the composition of our AUM among various portfolios and investment vehicles.

We serve as the investment adviser for Manning & Napier Fund, Inc., Exeter Trust Company Collective Investment Trusts and Rainier Multiple Investment Trust. The mutual funds are open-end mutual funds that primarily offer no-load share classes designed to meet the needs of a range of institutional and other investors. Exeter Trust Company, an affiliated New Hampshire-chartered trust company and Rainier Multiple Investment Trust sponsor collective investment trusts for qualified retirement plans, including 401(k) plans. These mutual funds and collective investment trusts comprised ~~$5.7~~$6.1 billion, or 27%, of our AUM as of ~~March 31,~~June 30, 2021. MNA and Rainier also serve as the investment advisor to all of our separately managed accounts, managing ~~$15.5~~$16.2 billion, or 73%, of our AUM as of ~~March 31,~~June 30, 2021, including assets managed as a sub-advisor to pooled investment vehicles. For the period ended ~~March 31,~~June 30, 2021 approximately 98% of our revenue was earned from clients located in the United States.

Our largest operating expenses are employee compensation and related costs, and to a lesser degree, distribution, servicing and custody expenses, discussed further below, with a significant portion of these expenses varying in a direct relationship to our absolute and relative investment management performance, as well as AUM and revenues. We review our operating expenses in relation to the investment market environment and changes in our revenues. However, ~~we are generally willing~~the strength of our balance sheet has historically provided us the flexibility to make the expenditures as necessary ~~even when faced with declining rates of growth in revenues, in order~~ to support our investment products, our client service levels, strategic initiatives and our long-term value.

•Compensation and related costs. Employee compensation and related costs represent our largest expense, including employee salaries and benefits, incentive compensation to investment and sales professionals, compensation issued under our long-term incentive plan as well as equity compensation. These costs are affected by changes in the employee headcount, the mix of existing job descriptions, competitive factors, the addition of new skill sets and variations in the level of our AUM and revenues. In addition, these costs are impacted by the amount of compensation granted under our equity plan and the amount of deferred cash awards granted under our long-term incentive plan. Incentive compensation for our research team considers the cumulative impact of both absolute and relative investment performance over historical time periods, with more weight placed on the recent periods. As such, incentive compensation paid to our research team will vary, in part, based on absolute and relative investment performance.

Non-operating income (loss) includes interest expense, interest and dividend income, changes in liability under the tax receivable agreement ("TRA") entered into between Manning & Napier and the other holders of Class A units of Manning & Napier Group, LLC ("Manning & Napier Group"), gains (losses) related to investment securities sales as well as changes in values of those investment securities designated as equity securities, at fair value.

The Company is comprised of entities that have elected to be treated as either a limited liability company ("LLC") or a "C-Corporation". As such, the entities functioning as LLCs are not liable for or able to benefit from U.S. federal or most state and local income taxes on their earnings, and their earnings (losses) will be included in the personal income tax returns of each entity's unit holders. The entities functioning as C-Corporations are liable for or able to benefit from U.S. federal and state and local income taxes on their earnings and losses, respectively.

Manning & Napier, Inc. holds an economic interest of approximately ~~88.9%~~97.7% in Manning & Napier Group as of ~~March 31,~~June 30, 2021 and, as managing member, controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest in our consolidated financial statements. Net income attributable to noncontrolling interests on the consolidated statements of operations represents the portion of earnings attributable to the economic interest in Manning & Napier Group held by the noncontrolling interests.


		Three months ended March 31,				Period-to-Period					Three months ended June 30,				Period-to-Period
		2021		2020		$		%			2021		2020		$		%
		(in millions)									(in millions)
Wealth Management ~~(4)~~(3)	Wealth Management ~~(4)~~(3)									Wealth Management ~~(4)~~(3)
Beginning assets under management	Beginning assets under management	$	8,906.4	$	8,716.4	$	190.0	2	%	Beginning assets under management	$	9,217.5	$	7,732.9	$	1,484.6	19	%
Gross client inflows (1)	Gross client inflows (1)	224.8		202.1		22.7		11	%	Gross client inflows (1)	216.6		193.3		23.3		12	%
Gross client outflows (1)	Gross client outflows (1)	(305.3)		(375.3)		70.0		(19)	%	Gross client outflows (1)	(295.2)		(360.7)		65.5		(18)	%

Market appreciation (depreciation) & other (2)(3)		391.6		(810.3)		1,201.9		(148)	%
Market appreciation (depreciation) & other (2)										Market appreciation (depreciation) & other (2)	474.6		768.9		(294.3)		(38)	%
Ending assets under management	Ending assets under management	$	9,217.5	$	7,732.9	$	1,484.6	19	%	Ending assets under management	$	9,613.5	$	8,334.4	$	1,279.1	15	%
Average AUM for period	Average AUM for period	$	8,993.0	$	8,527.9					Average AUM for period	$	9,467.4	$	8,164.0
Institutional and Intermediary ~~(4)~~(3)	Institutional and Intermediary ~~(4)~~(3)									Institutional and Intermediary ~~(4)~~(3)
Beginning assets under management	Beginning assets under management	$	11,213.0	$	10,763.7	$	449.3	4	%	Beginning assets under management	$	11,922.3	$	9,327.6	$	2,594.7	28	%
Gross client inflows (1)	Gross client inflows (1)	401.6		466.7		(65.1)		(14)	%	Gross client inflows (1)	570.7		359.5		211.2		59	%
Gross client outflows (1)	Gross client outflows (1)	(453.5)		(753.9)		300.4		(40)	%	Gross client outflows (1)	(553.8)		(850.9)		297.1		(35)	%

Market appreciation (depreciation) & other ~~(3)~~(2)	Market appreciation (depreciation) & other ~~(3)~~(2)	761.2		(1,148.9)		1,910.1		(166)	%	Market appreciation (depreciation) & other ~~(3)~~(2)	708.8		1,469.7		(760.9)		(52)	%
Ending assets under management	Ending assets under management	$	11,922.3	$	9,327.6	$	2,594.7	28	%	Ending assets under management	$	12,648.0	$	10,305.9	$	2,342.1	23	%
Average AUM for period	Average AUM for period	$	11,454.3	$	10,136.2					Average AUM for period	$	12,373.0	$	9,930.2
Total assets under management	Total assets under management									Total assets under management
Beginning assets under management	Beginning assets under management	$	20,119.4	$	19,480.1	$	639.3	3	%	Beginning assets under management	$	21,139.8	$	17,060.5	$	4,079.3	24	%
Gross client inflows (1)	Gross client inflows (1)	626.4		668.8		(42.4)		(6)	%	Gross client inflows (1)	787.3		552.8		234.5		42	%
Gross client outflows (1)	Gross client outflows (1)	(758.8)		(1,129.2)		370.4		(33)	%	Gross client outflows (1)	(849.0)		(1,211.6)		362.6		(30)	%

Market appreciation (depreciation) & other (2)(3)		1,152.8		(1,959.2)		3,112.0		(159)	%
Market appreciation (depreciation) & other (2)										Market appreciation (depreciation) & other (2)	1,183.4		2,238.6		(1,055.2)		(47)	%
Ending assets under management	Ending assets under management	$	21,139.8	$	17,060.5	$	4,079.3	24	%	Ending assets under management	$	22,261.5	$	18,640.3	$	3,621.2	19	%
Average AUM for period	Average AUM for period	$	20,447.3	$	18,691.1					Average AUM for period	$	21,840.4	$	18,094.2

Our total AUM increased by $3.6 billion from $18.6 billion at June 30, 2020 to $22.3 billion at June 30, 2021. The increase was attributable to market appreciation of $5.0 billion, partially offset by net client outflows of $1.4 billion. Net client outflows consisted of approximately $0.4 billion of net outflows for wealth management and $1.0 billion for institutional and intermediary. By portfolio, the rates of change in AUM from June 30, 2020 to June 30, 2021 consisted of a $1.8 billion, or 39% increase in our equity portfolio, a $1.8 billion, or 14% increase in our blended asset portfolio, and an increase of approximately $55.7 million, or 6% in our fixed income portfolio.

We have experienced a decrease in the overall rate of outflows with gross outflows of approximately $0.8 billion during the quarter ended June 30, 2021, a 30% decrease from the quarter ended June 30, 2020. Gross outflows annualized as a percentage of our AUM, or turnover rate, for the three months ended June 30, 2021 was 16%. We believe outflows have improved as a result of our client service efforts and excellent performance, particularly regarding our ability to retain AUM in the most performance sensitive areas of our business, such as our Institutional and Intermediary channel, coupled with the lack of COVID-driven market volatility during the 2021 period as compared to 2020.

The rate of gross client inflows was approximately $0.8 billion during the three months ended June 30, 2021, a 42% increase from the quarter ended June 30, 2020. The 2020 period reflects impacts from COVID related travel restrictions, while 2021 changes in our organization and national recognition awards boosted our presence within intermediated channels. We believe that by continuing to demonstrate stability in client AUM and modernizing our platform, we will provide a foundation from which we can continue to grow.

The total AUM increase of approximately $1.1 billion, to $22.3 billion at June 30, 2021 from $21.1 billion at March 31, 2021 was attributable to market appreciation of $1.2 billion, partially offset by net client outflows of approximately $0.1 billion. Net client outflows consisted of $78.6 million for wealth management while net client inflows in institutional and intermediary were $16.9 million. The blended investment gain was 5.1% in wealth management accounts and 5.9% in institutional and intermediary. By portfolio in the period, our AUM increased by $0.7 billion in our blended asset portfolio, $0.4 billion in our equity portfolio, and $40.3 million in our fixed income portfolio.

As of June 30, 2021, the composition of our AUM was 43% in wealth management and 57% in institutional and intermediary, compared to 45% in wealth management and 55% in institutional and intermediary at June 30, 2020. The composition of our AUM across portfolios at June 30, 2021 was 67% in blended assets, 28% in equity, and 5% in fixed income, compared to 70% in blended assets, 25% in equity, 5% in fixed income at June 30, 2020.

For our wealth management channel, gross client inflows of $0.2 billion were offset by $0.3 billion of gross client outflows during the three months ended June 30, 2021. Gross client inflows include approximately $0.2 billion into our blended asset portfolio and less than $0.1 billion into both our equity and fixed income portfolios. Outflows during the quarter were $0.3 billion, or 87% from blended portfolios, less than $0.1 billion, or 12% from equity, and less than $0.1 billion, or 1% from fixed income portfolios, respectively.

Gross client inflows of $0.6 billion were offset almost entirely by gross client outflows of $0.6 billion within our institutional and intermediary channel during the three months ended June 30, 2021. Gross client inflows include approximately $0.4 billion into our blended asset portfolios, $0.2 billion into our equity portfolios, and less than $0.1 billion into our fixed income portfolios. With regard to gross client outflows, $0.3 billion, or 58% was from our blended asset portfolios, $0.2 billion or 37% was from our equity portfolios, and less than $0.1 billion, or 5% was from our fixed income portfolios.


	Three months ended June 30,				Period-to-Period
	2021		2020		$		%
	(in thousands, except share data)
Revenues
Management Fees
Wealth management	$	16,111	$	13,571	$	2,540	19	%
Institutional and intermediary	15,141		12,311		2,830		23	%
Distribution and shareholder servicing	2,236		2,303		(67)		(3)	%
Custodial services	1,721		1,463		258		18	%
Other revenue	868		698		170		24	%
Total revenue	36,077		30,346		5,731		19	%
Expenses
Compensation and related costs	18,347		17,379		968		6	%
Distribution, servicing and custody expenses	2,497		2,425		72		3	%
Other operating costs	7,463		7,489		(26)		—	%
Total operating expenses	28,307		27,293		1,014		4	%
Operating income	7,770		3,053		4,717		155	%
Non-operating income (loss)
Non-operating income (loss), net	256		2,690		(2,434)		(90)	%
Income before provision for (benefit from) income taxes	8,026		5,743		2,283		40	%
Provision for (benefit from) income taxes	1,285		1,460		(175)		(12)	%
Net income attributable to controlling and noncontrolling interests	6,741		4,283		2,458		57	%
Less: net income (loss) attributable to noncontrolling interests	816		2,737		(1,921)		(70)	%
Net income attributable to Manning & Napier, Inc.	$	5,925	$	1,546	$	4,379	283	%
Per Share Data
Net income per share available to Class A common stock
Basic	$	0.35	$	0.09
Diluted	$	0.29	$	0.06
Weighted average shares of Class A common stock outstanding
Basic	16,956,265		16,132,667
Diluted	20,314,285		46,296,214

Other financial and operating data
Economic income (1)	$	8,840	$	6,701	$	2,139	32	%
Economic net income (1)	$	7,387	$	3,971	$	3,416	86	%
Economic net income per adjusted share (1)	$	0.31	$	0.08
Weighted average adjusted Class A common stock outstanding(1)	23,471,600		48,309,400

(1)See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Supplemental Non-GAAP Financial Information” for Manning & Napier’s reasons for including these measures not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP") in this report in addition to a reconciliation of non-GAAP financial measures to GAAP measures for the periods indicated.

Wealth management revenue increased by $2.5 million, or 19%, to $16.1 million for the three months ended June 30, 2021 from $13.6 million for the three months ended June 30, 2020. This increase is driven primarily by a 16%, or $1.3 billion, increase in our average wealth management AUM for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. At June 30, 2021 the concentration of investments in our wealth management assets were 87% blended assets, 10% equity and 3% fixed income, consistent with the concentration of investments as of June 30, 2020.

Institutional and intermediary revenue increased by $2.8 million, or 23%, to $15.1 million for the three months ended June 30, 2021 from $12.3 million for the three months ended June 30, 2020. This increase is driven primarily by a 25%, or $2.4 billion, increase in our average institutional and intermediary AUM for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. As of June 30, 2021, the concentration of assets in our institutional and intermediary channel was 52% blended assets, 42% equity and 6% fixed income, compared to 56% blended assets, 37% equity and 7% fixed income as of June 30, 2020.

Compensation and related costs increased by $1.0 million, or 6%, to $18.3 million for the three months ended June 30, 2021 from $17.4 million for the three months ended June 30, 2020. This increase in the current quarter compared to the second quarter of 2020 was driven by higher incentive compensation accruals based on increases in both sales and year to date performance in 2021, partially offset by a decrease in our workforce, coupled with the impacts of the implementation of a deferred compensation plan during the three months ended June 30, 2021, whereby a fraction of incentive compensation for our most highly compensated employees will be invested in our investment products and vested over a multi-year period. When considered as a percentage of revenue, compensation and related costs was 51% for the three months ended June 30, 2021 and 57% for the three months ended June 30, 2020.

Distribution, servicing and custody expenses increased by $0.1 million, or 3%, to $2.5 million for the three months ended June 30, 2021 from $2.4 million for the three months ended June 30, 2020. As a percentage of mutual fund and collective investment trust average AUM, distribution, servicing and custody expense was 0.17% for the three months ended June 30, 2021, compared to 0.18% for the three months ended June 30, 2020.

(2)The change in the liability under the TRA for the three months ended June 30, 2021 is driven by a decrease in the Company's expected tax benefits under the TRA with the other holders of units of Manning & Napier Group and the corresponding changes in the payment of such benefits. The change during the three months ended June 30, 2020 was the result of a reduction in the Company's estimated 2020 net operating loss. This change reduced the favorable rate of applying estimated 2020 net operating losses to prior years with the enactment of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") on March 27, 2020.

Our provision for income taxes was $1.3 million for the three months ended June 30, 2021, compared to a provision of $1.5 million for the three months ended June 30, 2020. During the first quarter of 2020, as a result of the CARES Act on March 27, 2020, which, among other things, eliminated certain restrictions on recognizing net operating losses, we recognized an income tax benefit related to the favorable rate applied to our net operating losses. This benefit was subsequently reduced during the second quarter of 2020, resulting in an income tax expense of approximately $1.2 million in that period. The overall decrease in the provision of income taxes for the three months ended June 30, 2021 compared to the same period in 2020 was partially offset by a higher portion of Manning & Napier Group's earnings subject to taxation at the C-Corporation level during the three months ended June 30, 2021 compared to the same period in 2020. Manning & Napier Inc.'s weighted ownership of Manning & Napier Group was 90.1% for the three months ended June 30, 2021 compared to 44.5% for the same period in 2020. This increase in weighted ownership is primarily the result of the annual exchange process between the Company and the holders of its non-controlling interests.


	Six months ended June 30,				Period-to-Period
	2021		2020		$		%
	(in millions)
Wealth Management (4)
Beginning assets under management	$	8,906.4	$	8,716.4	$	190.0	2	%
Gross client inflows (1)	441.4		395.4		46.0		12	%
Gross client outflows (1)	(600.5)		(736.0)		135.5		(18)	%
Market appreciation (depreciation) & other (2) (3)	866.2		(41.4)		907.6		(2,192)	%
Ending assets under management	$	9,613.5	$	8,334.4	$	1,279.1	15	%
Average AUM for period	$	9,232.0	$	8,486.1
Institutional and Intermediary (4)
Beginning assets under management	$	11,213.0	$	10,763.7	$	449.3	4	%
Gross client inflows (1)	972.3		826.2		146.1		18	%
Gross client outflows (1)	(1,007.3)		(1,604.8)		597.5		(37)	%

Market appreciation (depreciation) & other (2) (3)	1,470.0		320.8		1,149.2		358	%
Ending assets under management	$	12,648.0	$	10,305.9	$	2,342.1	23	%
Average AUM for period	$	11,929.7	$	10,130.7
Total assets under management
Beginning assets under management	$	20,119.4	$	19,480.1	$	639.3	3	%
Gross client inflows (1)	1,413.7		1,221.6		192.1		16	%
Gross client outflows (1)	(1,607.8)		(2,340.8)		733.0		(31)	%

Market appreciation (depreciation) & other (2) (3)	2,336.2		279.4		2,056.8		736	%
Ending assets under management	$	22,261.5	$	18,640.3	$	3,621.2	19	%
Average AUM for period	$	21,161.7	$	18,616.8

Our total AUM increased by ~~$4.1~~$3.6 billion from ~~$17.1~~$18.6 billion at ~~March 31,~~June 30, 2020 to ~~$21.1~~$22.3 billion at ~~March 31,~~June 30, 2021. The increase was attributable to ~~market appreciation of $6.1 billion, including the addition of approximately $0.4 billion in model-delivery assets that were previously classified as assets under advisement, and partially offset by~~ net client outflows of ~~$2.0~~$1.4 billion, partially offset by market appreciation of $5.0 billion. Net client outflows consisted of approximately $0.4 billion of net outflows for wealth management and ~~$1.5~~$1.0 billion for institutional and intermediary. By portfolio, the rates of change in AUM from ~~March 31,~~June 30, 2020 to ~~March 31,~~June 30, 2021 consisted of a ~~$2.0~~$1.8 billion, or ~~52%~~39% increase in our equity portfolio, a ~~$2.0~~$1.8 billion, or ~~17%~~14% increase in our blended asset portfolio, and ana increase of ~~approximately $0.3~~$55.7 million, or ~~0.03%~~6% in our fixed income ~~portfolio.~~

~~The rate of gross client inflows was~~were approximately ~~$0.6~~$1.4 billion during the ~~three~~six months ended ~~March 31,~~June 30, 2021, a ~~6% decrease from~~16% increase compared to the ~~quarter ended March 31,~~same period in 2020. We believe that by demonstrating stability in client AUM and in our organization, along with continuing to improve long-term track records and modernizing our platform, we will provide a foundation from which we can grow.

The total AUM increase of ~~approximately $1.0~~$2.1 billion, or 11%, to ~~$21.1~~$22.3 billion at ~~March 31,~~June 30, 2021 from $20.1 billion at December 31, 2020 was attributable to market appreciation of ~~$1.2~~$2.3 billion, ~~partially~~ offset by net client cash outflows of ~~approximately $0.1~~$0.2 billion. ~~Net~~Included in net client ~~outflows consisted of $80.5 million for wealth management while~~flows during the six months ended June 30, 2021 were net client outflows in ~~institutional~~wealth management of approximately $0.2 billion. The blended investment appreciation was 9.7% in wealth management and ~~intermediary were $51.9 million. The~~the blended investment gain was ~~4.4% in wealth management accounts and 6.8%~~13.1% in institutional and intermediary. By portfolio, our $2.1 billion AUM increase was derived from increases of $0.8 billion, or 14%, in ~~the period,~~ our ~~AUM increased by $0.6~~equity portfolio, $1.3 billion, or 10%, in our blended asset portfolio ~~$0.4 billion in our equity portfolio,~~ and ~~$3.4~~$43.7 million, or 4%, in our fixed income portfolio.

As of ~~March 31,~~June 30, 2021, the composition of our AUM was ~~44%~~43% in wealth management and ~~56%~~57% in institutional and intermediary, compared to 45% in wealth management and 55% in institutional and intermediary at ~~March 31,~~June 30, 2020. The composition of our AUM across portfolios at ~~March 31,~~June 30, 2021 was 67% in blended assets, 28% in equity, and 5% in fixed income, compared to ~~71%~~70% in blended assets, ~~24%~~25% in equity, and 5% in fixed income ~~at March 31,~~as of June 30, 2020.

~~For~~With regard to our wealth management channel, gross client inflows of ~~less than $0.2~~$0.4 billion were offset by ~~$0.3~~approximately $0.6 billion of gross client outflows during the ~~three~~six months ended ~~March 31,~~June 30, 2021. ~~The approximately $0.2 billion gross~~Gross client inflows ~~include approximately $0.2~~included $0.4 billion into our blended asset ~~portfolio~~portfolios, and less than $0.1 billion into both our equity portfolios and fixed income portfolios. Outflows during the ~~quarter~~six months ended June 30, 2021 were ~~$0.3~~$0.5 billion, orwith 87% from blended portfolios, ~~less than $0.1 billion, or 8%~~10% from equity, and ~~less than $0.1 billion, or 5%~~3% from fixed income portfolios, respectively. The annualized separate account retention rate was 97% for the six months ended June 30, 2021,consistent with the rolling twelve months ended June 30, 2021.

~~Gross~~Net client flows from our institutional and intermediary channel were relatively stable and included gross client inflows of ~~$0.4~~$1.0 billion ~~were~~ offset by gross client outflows of ~~$0.5~~$1.0 billion ~~within our institutional and intermediary channel~~ during the ~~three~~six months ended ~~March 31,~~June 30, 2021. Gross client inflows ~~include approximately $0.2~~included $0.5 billion, or 55% into our blended asset portfolios, ~~$0.2~~$0.3 billion or 34% into our equity portfolios and ~~less than~~ $0.1 billion or 11% into our fixed income ~~portfolios.~~portfolios during the six months ended June 30, 2021. With regard to ~~gross~~institutional and intermediary client outflows, ~~$0.2~~$0.6 billion, or ~~52% was~~55%, were from ~~our~~ blended asset portfolios, ~~$0.1~~$0.4 billion or ~~39% was~~38% were from our equity portfolios and less than $0.1 billion ~~or 9%~~ was from our fixed income ~~portfolios.~~portfolios during the six months ended June 30, 2021.


		Three months ended March 31,				Period-to-Period					Six months ended June 30,				Period-to-Period
		2021		2020		$		%			2021		2020		$		%
		(in thousands, except share data)									(in thousands, except share data)
Revenues	Revenues									Revenues
Management Fees	Management Fees									Management Fees
Wealth management	Wealth management	$	15,348	$	14,020	$	1,328	9	%	Wealth management	$	31,459	$	27,591	$	3,868	14	%
Institutional and intermediary	Institutional and intermediary	14,328		12,411		1,917		15	%	Institutional and intermediary	29,469		24,722		4,747		19	%
Distribution and shareholder servicing	Distribution and shareholder servicing	2,153		2,390		(237)		(10)	%	Distribution and shareholder servicing	4,389		4,693		(304)		(6)	%
Custodial services	Custodial services	1,645		1,599		46		3	%	Custodial services	3,366		3,062		304		10	%
Other revenue	Other revenue	677		689		(12)		(2)	%	Other revenue	1,545		1,387		158		11	%
Total revenue	Total revenue	34,151		31,109		3,042		10	%	Total revenue	70,228		61,455		8,773		14	%
Expenses	Expenses									Expenses
Compensation and related costs	Compensation and related costs	18,874		19,263		(389)		(2)	%	Compensation and related costs	37,221		36,642		579		2	%
Distribution, servicing and custody expenses	Distribution, servicing and custody expenses	2,358		2,813		(455)		(16)	%	Distribution, servicing and custody expenses	4,855		5,238		(383)		(7)	%
Other operating costs	Other operating costs	6,710		7,097		(387)		(5)	%	Other operating costs	14,173		14,586		(413)		(3)	%
Total operating expenses	Total operating expenses	27,942		29,173		(1,231)		(4)	%	Total operating expenses	56,249		56,466		(217)		—	%
Operating income	Operating income	6,209		1,936		4,273		221	%	Operating income	13,979		4,989		8,990		180	%
Non-operating income (loss)	Non-operating income (loss)									Non-operating income (loss)
Non-operating income (loss), net	Non-operating income (loss), net	458		(4,327)		4,785		(111)	%	Non-operating income (loss), net	714		(1,637)		2,351		(144)	%
Income before provision for (benefit from) income taxes		6,667		(2,391)		9,058		(379)	%
Income before provision for income taxes										Income before provision for income taxes	14,693		3,352		11,341		338	%
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes	703		(3,226)		3,929		(122)	%	Provision for (benefit from) income taxes	1,988		(1,766)		3,754		(213)	%
Net income attributable to controlling and noncontrolling interests	Net income attributable to controlling and noncontrolling interests	5,964		835		5,129		614	%	Net income attributable to controlling and noncontrolling interests	12,705		5,118		7,587		148	%
Less: net income (loss) attributable to noncontrolling interests		724		(23)		747		(3,248)	%
Less: net income attributable to noncontrolling interests										Less: net income attributable to noncontrolling interests	1,540		2,714		(1,174)		(43)	%
Net income attributable to Manning & Napier, Inc.	Net income attributable to Manning & Napier, Inc.	$	5,240	$	858	$	4,382	511	%	Net income attributable to Manning & Napier, Inc.	$	11,165	$	2,404	$	8,761	364	%
Per Share Data	Per Share Data									Per Share Data
Net income per share available to Class A common stock	Net income per share available to Class A common stock									Net income per share available to Class A common stock
Basic	Basic	$	0.31	$	0.05					Basic	$	0.65	$	0.15
Diluted	Diluted	$	0.26	$	0.01					Diluted	$	0.55	$	0.06
Weighted average shares of Class A common stock outstanding	Weighted average shares of Class A common stock outstanding									Weighted average shares of Class A common stock outstanding
Basic	Basic	17,026,500		15,812,951						Basic	16,991,188		15,972,809
Diluted	Diluted	20,273,343		77,907,557						Diluted	20,290,914		61,851,067

Other financial and operating data	Other financial and operating data									Other financial and operating data
Economic income (loss) (1)		$	7,569	$	(1,672)	$	9,241	(553)	%
Economic income (1)										Economic income (1)	$	16,409	$	5,029	$	11,380	226	%
Economic net income (1)	Economic net income (1)	$	6,700	$	1,566	$	5,134	328	%	Economic net income (1)	$	14,087	$	5,537	$	8,550	154	%
Economic net income per adjusted share (1)	Economic net income per adjusted share (1)	$	0.29	$	0.02					Economic net income per adjusted share (1)	$	0.60	$	0.09
Weighted average adjusted Class A common stock outstanding(1)	Weighted average adjusted Class A common stock outstanding(1)	23,399,391		80,759,644						Weighted average adjusted Class A common stock outstanding (1)	23,435,693		64,534,522

(1)See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Supplemental Non-GAAP Financial Information” for Manning & Napier’s reasons for including these non-GAAP measures ~~not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP")~~ in this report in addition to a reconciliation of non-GAAP financial measures to GAAP measures for the periods indicated.

Wealth management revenue increased by $1.3 million, or 9%, to $15.3 million for the three months ended March 31, 2021 from $14.0 million for the three months ended March 31, 2020. This increase is driven primarily by a 5%, or $0.5 billion, increase in our average wealth management AUM for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. At March 31,June 30, 2021, the concentration of ~~investments~~assets in our wealth management ~~assets were~~channel was 87% blended assets, 10% equity and 3% fixed income, ~~compared to 84% blended assets, 12% equity and 4% fixed income~~which is consistent with the concentration of investments as of ~~March 31,~~June 30, 2020.

Institutional and intermediary revenue increased by ~~$1.9~~$4.7 million, or ~~15%~~19%, to ~~$14.3~~$29.5 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 from ~~$12.4~~$24.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. This increase is driven primarily by a ~~13%~~18%, or ~~$1.3~~$1.8 billion, increase in ~~our~~ average institutional and intermediary AUM for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2020. As of ~~March 31,~~June 30, 2021 the concentration of assets in our institutional and intermediary channel was 52% blended assets, 42% equity and 6% fixed income, compared to ~~60%~~56% blended assets, ~~32%~~37% equity and 8%7% fixed income as of ~~March 31,~~June 30, 2020.

Compensation and related costs ~~decreased~~increased by ~~$0.4~~$0.6 million, or 2%, to ~~$18.9~~$37.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 from ~~$19.3~~$36.6 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. This ~~decrease~~change was driven by higher incentive compensation accruals based on increases in ~~the current quarter compared~~both sales and year to ~~the first quarter of 2020 was driven~~date performance in 2021, partially offset by a decrease in our workforce ~~coupled with~~and the impacts offrom the ~~implementation of a~~newly implemented deferred compensation plan ~~during the three months ended March 31, 2021, whereby a fraction of incentive compensation for our most highly compensated employees will be invested~~ in ~~our investment products and vested over a multi-year period.~~2021. When considered as a percentage of revenue, compensation and related costs was ~~55%~~53% for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and ~~62%~~60% for the ~~three~~six months ended ~~March 31,~~June 30, 2020.

Distribution, servicing and custody expenses decreased by ~~$0.5~~$0.4 million, or ~~16%~~7%, to ~~$2.4~~$4.9 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 from ~~$2.8~~$5.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. The ~~decrease resulted primarily from~~expense decreased despite a 5% increase in mutual fund and collective investment trust average AUM for the ~~Target Date Mutual Fund merger that was completed during~~six months ended June 30, 2021 compared to the ~~third quarter of 2020 as well as changes~~six months ended June 30, 2020. AUM increases were concentrated in ~~our business mix.~~fund share classes where the company does not incur distribution and servicing fees. As a percentage of mutual fund and collective investment trust average AUM, distribution, servicing and custody expense was ~~0.17%~~0.34% for the ~~three~~six months ended ~~March 31,~~June 30, 2021, compared to ~~0.20%~~0.38% for the ~~three~~six months ended ~~March 31,~~June 30, 2020.

Other operating costs ~~for the three months ended March 31, 2021 were $6.7~~decreased by $0.4 million, ~~as compared~~or 3%, to ~~$7.1~~$14.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 from $14.6 million for the six months ended June 30, 2020. The decrease was primarily driven by an overall reduction in operational costs resulting from COVID-19 including a decrease in travel and facility costs, which we do not expect to remain at lower levels once the prevalence of COVID-19 has diminished. As a percentage of revenue, other operating costs ~~were 20%~~ for the ~~three~~six months ended ~~March 31,~~June 30, 2021 ~~and 23%~~was 20% compared to 24% for ~~the three~~six months ended ~~March 31,~~June 30, 2020.


		Three months ended March 31,				Period-to-Period					Six months ended June 30,				Period-to-Period
		2021		2020		$		%			2021		2020		$		%
		(in thousands)									(in thousands)
Non-operating income (loss)	Non-operating income (loss)									Non-operating income (loss)
Interest expense	Interest expense	$	(2)	$	(2)	$	—	—	%	Interest expense	$	(3)	$	(5)	$	2	40	%
Interest and dividend income (1)	Interest and dividend income (1)	123		357		(234)		(66)	%	Interest and dividend income (1)	231		720		(489)		(68)	%
Change in liability under tax receivable agreement (2)	Change in liability under tax receivable agreement (2)	—		(2,850)		2,850		(100)	%	Change in liability under tax receivable agreement (2)	(228)		(1,936)		1,708		88	%
Net gains (losses) on investments (3)	Net gains (losses) on investments (3)	337		(1,832)		2,169		(118)	%	Net gains (losses) on investments (3)	714		(416)		1,130		272	%

Total non-operating income (loss)	Total non-operating income (loss)	$	458	$	(4,327)	$	4,785	(111)	%	Total non-operating income (loss)	$	714	$	(1,637)	$	2,351	144	%

(2)The change in the liability under the ~~TRA~~tax receivable agreement for the ~~three~~six months ended ~~March 31, 2020~~June 30, 2021 is driven by an increase in the Company's expected tax benefits under the ~~TRA~~tax receivable agreement with the other holders of units of Manning & Napier Group and the corresponding changes in the payment of such benefits. The change during the ~~three~~six months ended ~~March 31,~~June 30, 2020 is ~~a result of~~driven by the tax benefits realized with the enactment of the ~~Coronavirus Aid, Relief, and Economic Security Act ("~~CARES ~~Act") on March 27, 2020.~~Act.

Our provision for income taxes was ~~$0.7~~$2.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021, compared to a benefit of ~~$3.2~~$1.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. The ~~change~~expense increase is attributed primarily to the 2020 enactment of the CARES Act ~~on March 27, 2020~~ which ~~included,~~includes, among other things, the elimination of certain restrictions on recognizing net operating losses. As a result, during the six months ended June 30, 2020, we recognized an income tax benefit related to the favorable rate applied to our net operating ~~losses during~~losses. Further, for the ~~three~~six months ended ~~March 31, 2020. This decrease is partially offset by~~June 30, 2021, a higher portion of Manning & Napier Group's earnings is subject to taxation at the C-Corporation level ~~during the three months ended March 31, 2021~~when compared to the same period in 2020. Manning & Napier Inc.'s weighted ownership of Manning & Napier Group was ~~88.9% as of March 31,~~89.6% for the six months ended June 30, 2021, compared to ~~19.5% as~~42.3% during the same period of ~~March 31,~~ 2020. This increase is primarily the result of the ~~redemption~~annual exchange process between the Company and ~~subsequent retirement~~the holders of ~~60,012,419 Class A units of Manning & Napier Group on May 11, 2020.~~its non-controlling interests.

Economic income presents a non-GAAP financial measure of the controlling and non-controlling interests of Manning & Napier Group and excludes from income before provision for income taxes strategic restructuring and transaction costs, net. We define strategic restructuring and transaction costs, net, as items related to our ongoing strategic review focused on the evolution of our distribution strategy and technology initiatives. These costs include severance-related costs, certain consulting and other professional service fees, lease and other contract termination costs, and gain or loss on sale of a business.

Economic net income is a non-GAAP measure of after-tax operating performance and equals the Company’s income before provision for income taxes less adjusted income taxes. Adjusted income taxes are estimated assuming the exchange of all outstanding units of Manning & Napier Group into Class A common stock on a one-to-one basis. Therefore, all income of Manning & Napier Group allocated to the units of Manning & Napier Group is treated as if it were allocated to us and represents an estimate of income tax expense (benefit) at an effective rate of ~~11.5%~~16.4% and ~~(193.7%)~~40.7% for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively, and of 14.2% and (10.1)% for the six months ended June 30, 2021 and 2020, respectively, reflecting assumed federal, state and local income taxes.

Economic net income per adjusted share is a non-GAAP measure and is equal to economic net income divided by the weighted average adjusted Class A common shares outstanding. The number of weighted average adjusted Class A common shares outstanding for all periods presented is determined by assuming the weighted average exchangeable units of Manning & Napier Group, weighted average unvested stock units, weighted average unvested restricted stock awards, and weighted average vested stock options are converted into our outstanding Class A common stock as of the respective reporting date, on a one-to-one basis. Our management uses economic net income, among other financial data, to determine the earnings available to distribute as dividends to holders of its Class A common stock and to the holders of the units of Manning & Napier Group.


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
		2021		2020					2021		2020		2021		2020
		(in thousands, except share data)				(in thousands, except share data)
Economic income (loss) (Non-GAAP)		$	7,569	$	(1,672)
Economic income (Non-GAAP)								Economic income (Non-GAAP)	$	8,840	$	6,701	$	16,409	$	5,029
Economic net income (Non-GAAP)	Economic net income (Non-GAAP)	$	6,700	$	1,566			Economic net income (Non-GAAP)	$	7,387	$	3,971	$	14,087	$	5,537
Economic net income per adjusted share (Non-GAAP)	Economic net income per adjusted share (Non-GAAP)	$	0.29	$	0.02			Economic net income per adjusted share (Non-GAAP)	$	0.31	$	0.08	$	0.60	$	0.09
Weighted average adjusted Class A common stock outstanding (Non-GAAP)	Weighted average adjusted Class A common stock outstanding (Non-GAAP)	23,399,391		80,759,644				Weighted average adjusted Class A common stock outstanding (Non-GAAP)	23,471,600		48,309,400		23,435,693		64,534,522


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
		2021		2020					2021		2020		2021		2020
		(in thousands, except share data)				(in thousands, except share data)
Net income attributable to Manning & Napier, Inc.	Net income attributable to Manning & Napier, Inc.	$	5,240	$	858			Net income attributable to Manning & Napier, Inc.	$	5,925	$	1,546	$	11,165	$	2,404
Add back: Net income (loss) attributable to noncontrolling interests		724		(23)
Add back: Net income attributable to noncontrolling interests								Add back: Net income attributable to noncontrolling interests	816		2,737		1,540		2,714

Add back: Provision for (benefit from) income taxes	Add back: Provision for (benefit from) income taxes	703		(3,226)				Add back: Provision for (benefit from) income taxes	1,285		1,460		1,988		(1,766)
Income (loss) before provision for (benefit from) income taxes		$	6,667	$	(2,391)
Income before provision for (benefit from) income taxes								Income before provision for (benefit from) income taxes	$	8,026	$	5,743	$	14,693	$	3,352
Add back: Strategic restructuring and transaction costs, net (1)	Add back: Strategic restructuring and transaction costs, net (1)	902		719				Add back: Strategic restructuring and transaction costs, net (1)	814		958		1,716		1,677
Economic income (loss) (Non-GAAP)		$	7,569	(1,672)
Economic income (Non-GAAP)								Economic income (Non-GAAP)	$	8,840	6,701		16,409		5,029
Adjusted income taxes (Non-GAAP)	Adjusted income taxes (Non-GAAP)	869		(3,238)				Adjusted income taxes (Non-GAAP)	1,453		2,730		2,322		(508)
Economic net income (Non-GAAP)	Economic net income (Non-GAAP)	$	6,700	$	1,566			Economic net income (Non-GAAP)	$	7,387	$	3,971	$	14,087	$	5,537

Weighted average shares of Class A common stock outstanding - Basic	Weighted average shares of Class A common stock outstanding - Basic	17,026,500		15,812,951				Weighted average shares of Class A common stock outstanding - Basic	16,956,265		16,132,667		16,991,188		15,972,809
Assumed vesting, conversion or exchange of:	Assumed vesting, conversion or exchange of:							Assumed vesting, conversion or exchange of:
Weighted average Manning & Napier Group, LLC units outstanding (noncontrolling interest)	Weighted average Manning & Napier Group, LLC units outstanding (noncontrolling interest)	2,021,781		62,034,200				Weighted average Manning & Napier Group, LLC units outstanding (noncontrolling interest)	2,004,276		28,400,866		2,012,980		45,217,533
Weighted average unvested restricted stock units and share awards	Weighted average unvested restricted stock units and share awards	3,764,744		2,745,827				Weighted average unvested restricted stock units and share awards	4,001,287		3,609,201		3,883,669		3,177,514
Weighted average vested stock options	Weighted average vested stock options	586,366		166,666				Weighted average vested stock options	509,772		166,666		547,856		166,666
Weighted average adjusted shares (Non-GAAP)	Weighted average adjusted shares (Non-GAAP)	23,399,391		80,759,644				Weighted average adjusted shares (Non-GAAP)	23,471,600		48,309,400		23,435,693		64,534,522

Economic net income per adjusted share (Non-GAAP)	Economic net income per adjusted share (Non-GAAP)	$	0.29	$	0.02			Economic net income per adjusted share (Non-GAAP)	$	0.31	$	0.08	$	0.60	$	0.09


		Three months ended March 31,					Three months ended June 30,				Six months ended June 30,
		2021		2020					2021		2020		2021		2020
		(in thousands)				(in thousands)
Compensation and related costs	Compensation and related costs	$	484	$	686			Compensation and related costs	$	156	$	154	$	640	$	840
Other operating costs	Other operating costs	418		33				Other operating costs	658		804		1,076		837

Total strategic restructuring and transaction costs		$	902	$	719
Total strategic restructuring and transaction costs, net								Total strategic restructuring and transaction costs, net	$	814	$	958	$	1,716	$	1,677

Historically, our cash and liquidity needs have been met primarily through cash generated by our operations and cash and cash equivalents on hand. Our financial condition at ~~March 31,~~June 30, 2021 was highly liquid, with a significant amount of our assets comprised of cash and cash equivalents, accounts receivable and investment securities held by us for the purpose of optimizing short-term cash management and providing initial cash seeding for product development purposes.


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
		(in thousands)					(in thousands)
Cash and cash equivalents	Cash and cash equivalents	$	45,195	$	57,635	Cash and cash equivalents	$	55,716	$	57,635
Accounts receivable	Accounts receivable	10,776		11,915		Accounts receivable	12,534		11,915
Investment securities	Investment securities	23,905		23,497		Investment securities	23,698		23,497
Amounts payable under tax receivable agreement (1)	Amounts payable under tax receivable agreement (1)	$	18,979	$	18,979	Amounts payable under tax receivable agreement (1)	$	20,818	$	18,979

We have no material assets other than our ownership of Class A units of Manning & Napier Group and, accordingly, will depend on distributions from Manning & Napier Group to pay taxes and operating expenses, as well as any dividends we may pay. As managing member of Manning & Napier Group, we will determine the timing and amount of any distributions to be paid to its members. We intend to cause Manning & Napier Group to distribute cash to its members, including us, in an amount sufficient to cover taxes and operating expenses, including dividends, if any, declared by us. If we do cause Manning & Napier Group to make such distributions, Manning & Napier Group Holdings, LLC ("M&N Group Holdings")~~, Manning & Napier Capital Company, LLC ("MNCC")~~ and any other holders of units of Manning & Napier Group will be entitled to receive equivalent distributions on a pari-passu basis. Due to the market volatility and corresponding earnings volatility that could occur stemming from the COVID-19 pandemic, the Board of Directors did not approve any cash dividends on our Class A common stock since the dividend paid on May 1, 2020. The historical quarterly cash dividends on our Class A common stock were, and we believe any future dividends would be, funded from our portion of distributions made by Manning & Napier Group, from its available cash generated from operations. While our operating earnings and margins have improved, they remain below industry averages as our digital transformation and corresponding restructuring continues. Our management team and the Board of Directors will continue to monitor our financial results and liquidity and will determine whether or not to pay future dividends on a quarterly basis.

On February 3, 2021, the Board of Directors approved a share repurchase program authorizing the purchase of up to $10.0 million of Manning & Napier Inc. Class A common shares. Given the strength of our balance sheet and cash position, the Company plans to use the approved share repurchase program to, at a minimum, offset dilution created from the awards issued under the Company’s long-term incentive plan to our employees during the first quarter of 2021. These equity awards were valued at approximately $6$6.0 million and will vest over the next 5 years. The authority to repurchase shares, which will be exercised from time to time as market conditions warrant, is subject to regulatory considerations and will expire on December 31, 2021. The timing, amount, and other terms and conditions of any repurchases will be determined by management at its discretion based on a variety of factors, including the market price of shares, general market and economic conditions, and legal requirements. The repurchase program may be modified, discontinued or suspended at any time. We intend to fund the program through cash on hand and future cash flow. During the ~~first quarter of~~six months ended June 30, 2021, Manning & Napier Inc. purchased a total of ~~412,405~~713,665 Class A common shares using approximately ~~$3.0~~$5.3 million in cash.

Due to the market volatility and corresponding earnings volatility that could occur stemming from the COVID-19 pandemic, the Board of Directors did not approve any cash dividends on our Class A common stock since the dividend paid on May 1, 2020. However, the strength of our balance sheet in early 2021 led to the Board of Directors to authorize the share repurchase plan as a means to return capital to Class A shareholders and is intended to offset dilution stemming from our long-term incentive plan awards. Given the continued strength of our balance sheet during the six months ended June 30, 2021, along with the renewed stability of our earnings, our Board of Directors reinstated the cash dividends on our Class A common stock while continuing our share repurchase program. As such, on July 20, 2021, the Board of Directors declared a $0.05 per share dividend to the holders of Class A common stock. The dividend is payable on or about August 16, 2021 to shareholders of record as of August 2, 2021. The historical quarterly cash dividends on our Class A common stock were, and any future dividends would be, funded from our portion of distributions made by Manning & Napier Group, from its available cash generated from operations.

As of ~~March 31,~~June 30, 2021, a total of ~~2,021,781~~428,812 units of Manning & Napier Group were held by the noncontrolling interests, including M&N Group ~~Holdings and MNCC.~~Holdings. Pursuant to the terms of the annual exchange process, such units may be tendered for exchange or redemption. On March 15, 2021, the Company received notice that 1,592,969 of Class A units of Manning & Napier Group ~~will be~~were tendered for redemption or exchange. The independent directors, on behalf of the Company, ~~have~~ decided that such exchange will be settled in 1,592,969 shares of unregistered Class A Common Stock of the Company. The Company ~~expects the settlement of~~completed the exchange ~~to occur later in the year. As~~on June 30, 2021 and as a result, ~~of the exchange,~~ Manning & Napier ~~Inc. will acquire~~acquired an equivalent number of Class A units of Manning & Napier Group ~~resulting in an increase in~~and its ownership of Manning & Napier Group increased from ~~approximately 89%~~89.0% to ~~98%~~97.7%.

With approximately ~~$69.1~~$79.4 million in cash and investment securities on hand as of ~~March 31,~~June 30, 2021, we expect that we have sufficient liquidity available to meet our needs for the foreseeable future. ~~During the three months ended March 31, 2021 we did not generate net cash from operations, which was driven by the timing of accrued annual incentive compensation payments during the first quarter.~~ We believe cash on hand and cash generated from operations will be sufficient over the next twelve months to meet our working capital requirements.

The following table sets forth our cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020. Operating activities consist primarily of net income subject to adjustments for changes in operating assets and liabilities, equity-based compensation expense, changes in the liability under the TRA, deferred income tax expense and depreciation and amortization. Investing activities consist primarily of the purchase and sale of investments for the purpose of providing initial cash seeding for product development and cash management purposes and purchases of property and equipment. Financing activities consist primarily of distributions to noncontrolling interests, purchases of treasury stock, dividends paid on our Class A common stock, payment of shares withheld to satisfy withholding requirements and purchases of Class A units held by noncontrolling interests of Manning & Napier Group.


		Three months ended March 31,					Six months ended June 30,
		2021		2020			2021		2020
		(in thousands)					(in thousands)
Net cash used in operating activities		$	(5,727)	$	(8,976)
Net cash (used in) provided by investing activities		(64)		17,258
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	$	9,257	$	(490)
Net cash provided by investing activities						Net cash provided by investing activities	409		65,450
Net cash used in financing activities	Net cash used in financing activities	(6,649)		(351)		Net cash used in financing activities	(11,585)		(91,471)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	(12,440)	$	7,931	Net change in cash and cash equivalents	$	(1,919)	$	(26,511)

Operating activities ~~used $5.7~~provided $9.3 million and ~~$9.0~~used less than $0.5 million of net cash for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. This overall ~~$3.2~~$9.7 million ~~decrease~~increase in net cash ~~used in~~provided by operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to 2020 was attributed to an increase in net income after adjustment for non-cash items of approximately ~~$4.6~~$7.4 million during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the same period of 2020. The increase in net income after adjustment for non-cash items of ~~$8.0~~$16.5 million during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to ~~$3.4~~$9.1 million during the same period in 2020 was driven by higher revenues resulting from an increase in our average AUM, coupled with a decrease in operating expenses. This ~~decrease~~increase in net cash ~~used~~ was ~~partially offset~~also attributed by changes in operating assets and operating liabilities of approximately ~~$1.4~~$2.3 million driven by the ~~timing~~receipt of ~~payments, including compensation and benefits and other accrued costs.~~an income tax refund during the second quarter of 2021.

Investing activities ~~used $0.1~~provided $0.4 million and ~~provided $17.3~~$65.5 million of net cash for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. This change was driven by a decrease in cash from investing activities of ~~$17.2~~$65.2 million due to our funding of and timing of activity within our investment securities. During the ~~three~~six months ended ~~March 31,~~June 30, 2021, we ~~used~~received approximately ~~$0.1~~$0.5 million, net, from the purchase and sale of certain securities for cash management purposes compared to receiving ~~$17.2~~$65.6 million in the same period of 2020, primarily related to the sale of investment securities in order help fund the redemption of Class A units during the six months ended June 30, 2020. We used an additional ~~$0.1~~$0.2 million of cash for the purchases of property and equipment during the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to the same period of 2020.

Financing activities used ~~$6.6~~$11.6 million and ~~$0.4~~$91.5 million of net cash for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. This overall ~~$6.3~~$79.9 million ~~increase~~decrease in net cash used in financing activities was primarily the result of cash used for the redemption of Class A units of Manning & Napier Group pursuant to the annual exchange process, existing since the time

of our IPO, of $90.8 million in 2020, whereas the Company settled the exchange in 2021 utilizing 1,592,969 shares of unregistered Class A Common Stock of the Company. This decrease in cash used was partially offset by an increase in cash used for the payment of shares withheld to satisfy withholding requirements in connection with the vesting of restricted stock units and exercise of stock options and the purchase of treasury shares during the ~~three~~six months ended ~~March 31,~~June 30, 2021. The increase in cash used for the payment of shares withheld to satisfy withholding requirements on equity awards of ~~$3.3~~$5.6 million compared to 2020 is attributed to the timing and amount of stock options exercised during the ~~three~~six months ended ~~March 31,~~June 30, 2021. In addition, we used cash of ~~$3.0~~$5.3 million for the purchase of treasury shares during the ~~three~~six months ended ~~March 31,~~June 30, 2021 under the share repurchase program of up to $10.0 million of Manning & Napier Inc. Class A common shares approved on February 3, 2021.

We have funded our historical quarterly cash dividends on our Class A common stock, and we believe any future dividends would be funded from our portion of distributions made by Manning & Napier Group, from its available cash generated from operations. Due to the market volatility and corresponding earnings volatility that could occur stemming from the COVID-19 pandemic, the Board of Directors ~~has~~had not approved any cash dividends on our Class A common stock since the dividend paid on May 1, 2020. ~~The historical quarterly~~Given the continued strength of our balance sheet, along with the renewed stability of our earnings, our Board of Directors reinstated the cash dividends on our Class A common stock ~~were, and we believe any future dividends would be, funded from~~while continuing our portion of distributions made by Manning & Napier Group, from its available cash generated from operations. While our operating earnings and margins have improved, they remain below industry averages as our digital transformation and corresponding restructuring continues. Our management team andshare repurchase program.

We have no material assets other than our ownership of Class A units of Manning & Napier Group and, accordingly, will depend on distributions from Manning & Napier Group to fund any dividends we may pay. As managing member of Manning & Napier Group, we will determine the timing and amount of any distributions to be paid to its members, other than mandatory tax distributions required under Manning & Napier Group's operating agreement. We intend to cause Manning & Napier Group to distribute cash to its members, including us, in an amount sufficient to cover dividends, if any, declared by us. If we do cause Manning & Napier Group to make such distributions, M&N Group Holdings ~~MNCC~~ and any other holders of units of Manning & Napier Group will be entitled to receive equivalent distributions on a pari passu basis.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31,~~June 30, 2021 pursuant to Rule 13a-15 under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~March 31,~~June 30, 2021, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

We have set forth in Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2020 risk factors relating to our business, our industry, our structure and our Class A common stock. Readers of this Quarterly Report on Form 10-Q are referred to such Item 1A for a more complete understanding of risks concerning our company. There have been no material changes in our risk factors since those published in such Form 10-K for the year ended December 31, 2020.

Period Total Number of Shares Purchased Average Price Paid Per Share
(in dollars) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - 31, 2021 — $ — — $ —
February 1 - 28, 2021 52,570 $ 7.15 52,570 $ 9,620,485
March 1 - 31, 2021 359,835 $ 7.27 359,835 $ 7,012,781
Total 412,405 $ 7.24 412,405 $ 7,012,781


Period	Total Number of Shares Purchased	Average Price Paid Per Share (in dollars)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2021	—	$	—	—	$	7,012,781
May 1 - 31, 2021	136,038	$	7.41	136,038	$	6,014,246
June 1 - 30, 2021	165,222	$	8.13	165,222	$	4,663,255
Total	301,260	$	7.80	301,260	$	4,663,255

On March 23, 2021, the Company filed a Current Report on Form 8-K disclosing that the Company would settle the approximately 1.6 million units of Manning & Napier Group, LLC, tendered for exchange by certain legacy owners, in approximately 1.6 million shares of unregistered Class A Common Stock of the Company. The closing of such transaction was previously reported to occur on or before May 15, 2021. The Company continues to work diligently to close the transaction expeditiously and expects such closing to occur later in the year.


Delaware		45-2609100
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

290 Woodcliff Drive
Fairport,	New York	14450
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value per share	MN	~~New York Stock Exchange~~
~~Common Stock Purchase Rights~~	MN	New York Stock Exchange


Class						Outstanding at ~~May~~August 10, 2021
Class A common stock, $0.01 par value per share						~~16,991,569~~18,496,008


		Page
Part I	Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Financial Condition as of ~~March 31,~~June 30, 2021 and December 31, 2020	1
	Consolidated Statements of Operations for the three and six months ended ~~March 31,~~June 30, 2021 and 2020	2
	Consolidated Statements of Comprehensive Income for the three and six months ended ~~March 31,~~June 30, 2021 and 2020	3
	Consolidated Statements of Shareholders’ Equity for the three and six months ended ~~March 31,~~June 30, 2021 and 2020	4
	Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020	56
	Notes to Consolidated Financial Statements	67
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3946
Item 4.	Controls and Procedures	4047

Part II	Other Information
Item 1A.	Risk Factors	4148
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
~~Item 5.~~	~~Other Information~~	4148
Item 6.	Exhibits	4148

	In this Quarterly Report on Form 10-Q, “we”, “our”, “us”, the “Company”, “Manning & Napier” and the “Registrant” refers to Manning & Napier, Inc. and, unless the context otherwise requires, its consolidated direct and indirect subsidiaries and predecessors.


	Stock Awards	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2021	3,044,981	$	2.03
Granted	1,152,369	$	6.04
Vested	(67,439)	$	6.56
Forfeited	(26,316)	$	1.57
Outstanding at March 31, 2021	4,103,595	$	3.08


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


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


Exhibit No.						Description
10.1						Share Redemption and Exchange Agreement by and among Manning & Napier, Inc., M&N Group Holdings, LLC and Manning & Napier Group, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 6, 2021

10.2						Share Redemption and Exchange Agreement between M&N Group Holdings, LLC and MNA Advisors, Inc., dated June 30, 2021, is incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 6, 2021

10.3						Share Redemption and Exchange Agreement by and among Manning & Napier, Inc., Manning & Napier Group, LLC and Manning & Napier Capital Company, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 6, 2021

10.4						Form of Share Redemption and Exchange Agreement between Manning & Napier Capital Company, LLC and unitholders of Manning & Napier Capital Company, LLC, dated June 30, 2021, is incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 6, 2021

31.1						Certification of the Company’s Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Company’s Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2						Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101						Materials from the Manning & Napier, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2021, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) related Notes to the Unaudited Consolidated Financial Statements.

104						Cover Page Interactive Data File (included in Exhibit 101)