Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | Victory Capital Holdings, Inc. | ||
Entity Central Index Key | 0001570827 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 502.8 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Common Stock, Shares Outstanding | 68,750,266 | ||
Entity Ex Transition Period | false | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | ||
Trading Symbol | VCTR | ||
Security Exchange Name | NASDAQ | ||
Entity Tax Identification Number | 32-0402956 | ||
Entity File Number | 001-38388 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 15935 La Cantera Parkway | ||
Entity Address, City or Town | San Antonio | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78256 | ||
City Area Code | 216 | ||
Local Phone Number | 898-2400 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Cleveland, Ohio | ||
Auditor Firm ID | 42 | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement related to its 2022 Annual Stockholders’ Meeting to be filed within 120 days of the end of the fiscal year ended December 31, 2021, are incorporated by reference into Part III hereof. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the registrant’s proxy statement is not deemed to be filed as part hereof. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 69,533 | $ 22,744 |
Investment management fees receivable | 80,634 | 67,957 |
Fund administration and distribution fees receivable | 17,123 | 16,971 |
Other receivables | 6,548 | 3,254 |
Prepaid expenses | 6,654 | 6,082 |
Investments in proprietary funds, at fair value | 912 | 922 |
Deferred compensation plan investments, at fair value | 30,812 | 22,571 |
Property and equipment, net | 25,295 | 18,747 |
Goodwill | 981,805 | 404,750 |
Other intangible assets, net | 1,349,797 | 1,162,641 |
Other assets | 10,633 | 4,090 |
Total assets | 2,579,746 | 1,730,729 |
Liabilities and stockholders' equity | ||
Accounts payable and accrued expenses | 62,102 | 42,144 |
Accrued compensation and benefits | 53,905 | 47,278 |
Consideration payable for acquisition of business | 309,380 | 92,500 |
Deferred compensation plan liability | 30,812 | 22,571 |
Deferred tax liability, net | 63,120 | 37,684 |
Other liabilities | 2,576 | 12,002 |
Long-term debt, net | 1,127,924 | 769,009 |
Total liabilities | 1,649,819 | 1,023,188 |
Stockholders' equity | ||
Additional paid-in capital | 673,572 | 647,602 |
Accumulated other comprehensive income (loss) | 5,972 | (7,460) |
Retained earnings | 402,811 | 161,581 |
Total stockholders' equity | 929,927 | 707,541 |
Total liabilities and stockholders' equity | 2,579,746 | 1,730,729 |
Class A | ||
Stockholders' equity | ||
Common stock | 772 | 194 |
Treasury stock, at cost | $ (153,200) | (47,844) |
Class B | ||
Stockholders' equity | ||
Common stock | 548 | |
Treasury stock, at cost | $ (47,080) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 400,000,000 |
Common stock, shares issued | 77,242,372 | 19,388,671 |
Common stock, shares outstanding | 68,662,779 | 16,205,689 |
Class A | ||
Treasury stock, shares | 8,579,593 | 3,182,982 |
Class B | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 0 | 200,000,000 |
Common stock, shares issued | 0 | 54,766,934 |
Common stock, shares outstanding | 0 | 51,336,177 |
Treasury stock, shares | 0 | 3,430,757 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | |||
Total revenue | $ 890,265 | $ 775,351 | $ 612,373 |
Expenses | |||
Personnel compensation and benefits | 234,833 | 197,158 | 179,809 |
Distribution and other asset-based expenses | 176,385 | 175,687 | 146,622 |
General and administrative | 53,722 | 51,218 | 46,568 |
Depreciation and amortization | 18,840 | 16,381 | 23,873 |
Change in value of consideration payable for acquisition of business | 13,800 | 11,300 | 19,886 |
Acquisition-related costs | 16,262 | 1,108 | 22,317 |
Restructuring and integration costs | 2,578 | 7,786 | 8,678 |
Total operating expenses | 516,420 | 460,638 | 447,753 |
Income from operations | 373,845 | 314,713 | 164,620 |
Other income (expense) | |||
Interest income and other income (expense) | 6,045 | 3,703 | 6,829 |
Interest expense and other financing costs | (24,652) | (37,005) | (40,901) |
Loss on debt extinguishment | (4,596) | (2,871) | (9,860) |
Total other income (expense), net | (23,203) | (36,173) | (43,932) |
Income before income taxes | 350,642 | 278,540 | 120,688 |
Income tax expense | (72,253) | (66,018) | (28,197) |
Net income | $ 278,389 | $ 212,522 | $ 92,491 |
Earnings per share of common stock | |||
Basic | $ 4.10 | $ 3.14 | $ 1.37 |
Diluted | $ 3.75 | $ 2.88 | $ 1.26 |
Weighted average number of shares outstanding | |||
Basic | 67,976 | 67,710 | 67,616 |
Diluted | 74,151 | 73,719 | 73,466 |
Dividends declared per share of common stock | $ 0.53 | $ 0.23 | $ 0.10 |
Investment Management Fees | |||
Revenue | |||
Total revenue | $ 674,539 | $ 562,036 | $ 466,802 |
Fund Administration and Distribution Fees | |||
Revenue | |||
Total revenue | $ 215,726 | $ 213,315 | $ 145,571 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 278,389 | $ 212,522 | $ 92,491 |
Other comprehensive income (loss), net of tax | |||
Net unrealized income (loss) on cash flow hedges | 13,468 | (7,573) | |
Net unrealized income (loss) on foreign currency translation | (36) | 113 | 24 |
Total other comprehensive income (loss), net of tax | 13,432 | (7,460) | 24 |
Comprehensive income | $ 291,821 | $ 205,062 | $ 92,515 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Common StockClass B | Treasury Stock | Treasury StockClass B | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | Retained Earnings (Deficit)Cumulative Effect, Period of Adoption, Adjustment |
Balance at beginning of period at Dec. 31, 2018 | $ 455,548 | $ 153 | $ 553 | $ (8,045) | $ (21,719) | $ 604,401 | $ (86) | $ (119,709) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of shares | 62 | 62 | ||||||||
Conversion of Class B shares to Common Stock | 28 | (28) | ||||||||
Repurchase of shares | (13,479) | (13,479) | ||||||||
Shares withheld related to net settlement of equity awards | (9,667) | (9,667) | ||||||||
Vesting of restricted share grants | 4 | (4) | ||||||||
Exercise of options | 4,014 | 10 | 4,004 | |||||||
Other comprehensive income (loss) | 24 | 24 | ||||||||
Share-based compensation | 16,303 | 16,303 | ||||||||
Dividends paid | (7,425) | (7,425) | ||||||||
Net income | 92,491 | 92,491 | ||||||||
Balance at end of period at Dec. 31, 2019 | 537,871 | 181 | 539 | (21,524) | (31,386) | 624,766 | (34,705) | |||
Balance at end of period (ASU 2016-01 and 2018-02) at Dec. 31, 2019 | $ 62 | $ (62) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of shares | 135 | 1 | 134 | |||||||
Conversion of Class B shares to Common Stock | 12 | (12) | ||||||||
Repurchase of shares | (26,320) | (26,320) | ||||||||
Shares withheld related to net settlement of equity awards | (15,694) | (15,694) | ||||||||
Vesting of restricted share grants | 11 | (11) | ||||||||
Exercise of options | 4,627 | 10 | 4,617 | |||||||
Other comprehensive income (loss) | (7,460) | (7,460) | ||||||||
Share-based compensation | 18,096 | 18,096 | ||||||||
Dividends paid | (16,236) | (16,236) | ||||||||
Net income | 212,522 | 212,522 | ||||||||
Balance at end of period at Dec. 31, 2020 | 707,541 | 194 | 548 | (47,844) | (47,080) | 647,602 | (7,460) | 161,581 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Issuance of shares | 254 | 254 | ||||||||
Conversion of Class B shares to Common Stock | 66 | (66) | ||||||||
Repurchase of shares | (26,150) | (26,150) | ||||||||
Shares withheld related to net settlement of equity awards | (32,126) | (1,721) | (30,405) | |||||||
Vesting of restricted share grants | 16 | (16) | ||||||||
Exercise of options | 8,121 | 1 | 13 | 8,107 | ||||||
Elimination of Class B share class | 511 | $ (511) | (77,485) | $ 77,485 | ||||||
Other comprehensive income (loss) | 13,432 | 13,432 | ||||||||
Share-based compensation | 17,625 | 17,625 | ||||||||
Dividends paid | (37,159) | (37,159) | ||||||||
Net income | 278,389 | 278,389 | ||||||||
Balance at end of period at Dec. 31, 2021 | $ 929,927 | $ 772 | $ (153,200) | $ 673,572 | $ 5,972 | $ 402,811 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income | $ 278,389 | $ 212,522 | $ 92,491 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred income taxes | 19,488 | 34,599 | (745) |
Depreciation and amortization | 18,840 | 16,381 | 23,873 |
Deferred financing costs and derivative and accretion expense | 3,430 | 4,468 | 3,892 |
Share-based and deferred compensation | 26,498 | 22,519 | 22,124 |
Change in fair value of contingent consideration obligations | 13,800 | 11,300 | 19,886 |
Unrealized appreciation on investments | (3,557) | (1,658) | (1,887) |
Loss (gain) on equity method investment | 331 | 193 | (2,683) |
Loss on debt extinguishment | 4,596 | 2,871 | 9,860 |
Loss on disposal of property and equipment due to restructuring | 263 | ||
Changes in operating assets and liabilities: | |||
Investment management fees receivable | (8,000) | 6,364 | (10,988) |
Fund administration and distribution fees receivable | (104) | 2,342 | (11,380) |
Other receivables | (1,624) | (3,075) | 322 |
Prepaid expenses | (305) | (1,230) | (2,141) |
Other assets | 402 | (11) | (836) |
Accounts payable and accrued expenses | 19,442 | (47,255) | 64,261 |
Accrued compensation and benefits | 5,148 | (7,620) | 18,700 |
Deferred compensation plan liability | (633) | (157) | (236) |
Other liabilities | 55 | (2,200) | 2,871 |
Net cash provided by operating activities | 376,196 | 250,616 | 227,384 |
Cash flows from investing activities | |||
Purchases of property and equipment | (12,674) | (8,059) | (5,239) |
Purchases of deferred compensation plan investments | (14,375) | (6,777) | (6,594) |
Sales of deferred compensation plan investments | 9,662 | 4,063 | 2,749 |
Purchases of proprietary funds | (176) | (551) | (182) |
Sales of proprietary funds | 215 | 507 | 158 |
(Purchase) sale of equity method investment | (1,523) | 10,572 | |
Acquisition of business and assets, net of cash acquired | (539,240) | (851,276) | |
Net cash used in investing activities | (556,588) | (12,340) | (849,812) |
Cash flows from financing activities | |||
Issuance of common stock | 8,375 | 4,762 | 4,076 |
Repurchase of common stock | (31,533) | (29,875) | (15,535) |
Payments of taxes related to net share settlement of equity awards | (26,694) | (12,109) | (7,659) |
Proceeds from long-term senior debt, net | 502,475 | 1,088,503 | |
Payment of debt financing fees | (8,747) | (19,820) | |
Repayment and repurchases of long-term senior debt | (142,000) | (162,387) | (428,000) |
Repayment of promissory note | (96) | ||
Payment of dividends | (37,159) | (16,236) | (7,436) |
Payment of consideration for acquisition | (37,500) | (36,851) | (6,017) |
Net cash provided by (used in) financing activities | 227,217 | (252,696) | 608,016 |
Effect of changes of foreign exchange rate on cash and cash equivalents | (36) | 43 | 42 |
Net (decrease) increase in cash and cash equivalents | 46,789 | (14,377) | (14,370) |
Cash and cash equivalents, beginning of period | 22,744 | 37,121 | 51,491 |
Cash and cash equivalents, end of period | 69,533 | 22,744 | 37,121 |
Supplemental cash flow information | |||
Cash paid for interest | 18,768 | 38,687 | 23,454 |
Cash paid for income taxes | $ 55,153 | $ 37,812 | $ 24,634 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1. Organization and Nature of Business Victory Capital Holdings, Inc., a Delaware corporation (along with its wholly-owned subsidiaries, collectively referred to as “the Company” or “Victory”) was formed on February 13, 2013 for the purpose of acquiring Victory Capital Management Inc. (“VCM”) and Victory Capital Services, Inc. (“VCS”), formerly known as Victory Capital Advisers, Inc., which occurred on August 1, 2013. On and effective July 1, 2019, the Company completed the acquisition (the “USAA AMCO Acquisition” or “USAA AMCO”) of USAA Asset Management Company (“USAA Adviser”) and Victory Capital Transfer Agency, Inc. (“VCTA”), formally known as the USAA Transfer Agency Company d/b/a USAA Shareholder Account Services. The USAA AMCO Acquisition includes USAA’s mutual fund and exchange traded fund (“ETF”) businesses and its 529 Education Savings Plan (collectively, the “USAA Mutual Fund Business”). Refer to Note 4, Acquisitions, for further details on the acquisition. VCM is a registered investment adviser managing assets through mutual funds, institutional separate accounts, separately managed account products, unified managed account products, collective trust funds, private funds, undertakings for the collective investment in transferrable securities, other pooled vehicles and ETFs. VCM also provides mutual fund administrative services for the Victory Portfolios, Victory Variable Insurance Funds and the mutual fund series of the Victory Portfolios II (collectively, the “Victory Funds”), a family of open-end mutual funds, the VictoryShares (the Company’s ETF brand), as well as the USAA Mutual Fund Business, which includes the USAA Mutual Fund Trust, a family of open-end mutual funds (the “USAA Funds”). Additionally, VCM employs all of the Company’s United States investment professionals across its Franchises and Solutions, which are not separate legal entities. VCM’s wholly-owned subsidiaries include RS Investment Management (Singapore) Pte. Ltd., RS Investments (Hong Kong) Limited, RS Investments (UK) Limited, Victory Capital Digital Assets, LLC and NEC Pipeline LLC. VCS is registered with the SEC as an introducing broker-dealer and serves as distributor and underwriter for the Victory Funds, the USAA Funds and the USAA 529 Education Savings Plan as well as placement agent for certain private funds managed by VCM. VCTA is registered with the SEC as a transfer agent for the USAA Funds. On March 1, 2021, the Company completed the acquisition of THB Asset Management (“THB”), resulting in THB becoming the Company’s tenth investment franchise. THB manages responsible investment portfolios in the micro-cap, small-cap and mid-cap asset classes, including U.S., global and international strategies. At March 1, 2021, the THB AUM that was acquired totaled $547 million. Refer to Note 4, Acquisitions, for further details on the acquisition. On November 1, 2021, the Company completed the acquisition of New Energy Capital Partners (“NEC”), resulting in NEC becoming the Company’s eleventh investment franchise. Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies. At November 1, 2021, the NEC AUM that was acquired totaled $795 million. On December 31, 2021, the Company completed the acquisition of WestEnd Advisors, LLC (“WestEnd”), resulting in WestEnd becoming the Company’s twelfth investment franchise. Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy, all in tax efficient Separately Managed Account (SMA) structures. At December 31, 2021, the WestEnd AUM that was acquired totaled $19.3 billion. WestEnd is a wholly-owned subsidiary of Victory Capital Holdings, Inc. and is the Company’s second registered investment adviser. Changes in Capital Structure On February 12, 2018, the Company completed the initial public offering (“IPO”) of its Class A common stock. The Company issued 11,700,000 shares of Class A common stock at a price of $13.00 per share at the closing of the IPO. On March 13, 2018, the Company issued an additional 1,110,860 shares of Class A common stock pursuant to the underwriters’ exercise of their option. All shares of common stock outstanding prior to the IPO were immediately converted into Class B common stock at a one -to-one ratio. On September 27, 2021, the Board of Directors approved amendments to the Company’s corporate charter and bylaws to eliminate the Company’s dual-class share structure. On November 19, 2021, the Company’s stockholders voted on and approved an amendment to the Company’s Restated Certificate of Incorporation (the “Amendment”), as amended, to eliminate the Company’s dual-class stock structure. The Amendment (i) converted all the shares of Class B Common Stock into an equal number of shares of Class A Common Stock (the “Conversion”), (ii) deleted provisions no longer applicable following the Conversion, (iii) renamed our Class A Common Stock as “Common Stock.” On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company (i) entered into the 2019 Credit Agreement, (ii) repaid all indebtedness outstanding under the 2018 Credit Agreement and (iii) terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among the Company, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained seven-year five-year On January 17, 2020, the Company entered into the First Amendment to the 2019 Credit Agreement. Pursuant to the First Amendment, the Company refinanced the existing term loans (the “2019 Term Loans”) with replacement term loans (the “2020 Term Loans”) in an aggregate principal amount of $952.0 million. The 2020 Term Loans provide for substantially the same terms as the 2019 Term Loans, including the same maturity date of July 1, 2026, except that the 2020 Term Loans provide for a reduced applicable margin on the London Interbank Offered Rate (“LIBOR”) of 75 basis points. The applicable margin on LIBOR under the 2020 Term Loans is 2.50%, compared to 3.25% under the 2019 Term Loans. On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement, as amended, with the other loan parties thereto, Barclays Bank PLC, as administrative agent, and the Royal Bank of Canada as fronting bank. Pursuant to the Second Amendment, the Company refinanced the 2020 Term Loans with replacement term loans in an aggregate principal amount of $755.7 (the “Repriced Term Loans”). The Repriced Term Loans provide for substantially the same terms as the 2020 Term Loans, including the same maturity date of July 1, 2026, except that the Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. The applicable margin on LIBOR under the Repriced Term Loans is 2.25%, compared to 2.50% under the 2020 Terms Loans. On December 31, 2021, the Company entered into the Third Amendment to the Credit Agreement (the “Third Amendment”), dated as of July 1, 2019 (as amended by the First Amendment to Credit Agreement, dated as of January 17, 2020, and the Second Amendment to Credit Agreement, dated as of February 18, 2021) with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $505.0 million and used the proceeds to fund the WestEnd Acquisition of 100% of the equity interests of WestEnd and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans will mature in 2028 and will bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. The 2021 Incremental Term Loans will amortize at a rate of 1.00% per annum. Refer to Note 4, Acquisitions, for further information on the USAA AMCO and WestEnd Acquisitions and Note 11, Debt, for additional information on the Company’s debt structure. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2. Significant Accounting Policies Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all the shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if (i) the Company holds greater than 50% voting interest in entities controlled through voting interests or if (ii) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution services and other management services and/or holding a minority interest. At December 31, 2021 and 2020, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $29.6 million and $22.9 million, respectively which are included in investments in proprietary funds and deferred compensation plan investments in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it has an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. Upon the completion of the NEC Acquisition on November 1, 2021, VCM became the manager of certain general partner entities associated with the NEC Funds. The Company has no equity investment in these general partner entities, which are non-consolidated VIEs, nor in the NEC Funds and has no share of these general partner entities’ income or losses. On September 20, 2020, the Company acquired a 15% equity interest in Alderwood Partners LLP (“Alderwood”) and made a capital contribution of $1.5 million in cash. Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. The Company analyzed its investment in Alderwood under the voting interest model and determined that it would not consolidate Alderwood as it does not have a controlling financial interest. During 2019, the Company’s involvement The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption impacts our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; and the effect on our ability to sell and provide our services. Revenue Recognition The Company a ccounts for revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on the Company’s various streams of revenue, refer to Note 3, Revenue. Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance ‑related expenses related to one ‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan, or are the result of a continuing contractual obligation with no continuing economic benefit to the Company, or a penalty incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. Investments Investments in Proprietary Funds Investments in proprietary funds include investments in affiliated mutual funds and are recorded in investments in proprietary funds, at fair value in the Consolidated Balance Sheets. Changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2021, 2020 and 2019. Deferred Compensation Plan Investments Deferred compensation plan investments include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Deferred compensation plan investments are recorded at fair value in the Consolidated Balance Sheets. Changes in value in deferred compensation plan investments are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's investments in proprietary funds and deferred compensation plan investments are valued through the use of quoted market prices available in an active market, which is the net asset value of the funds. Derivative Financial Instruments On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Company does not purchase or hold any derivative instruments for trading or speculative purposes. Under the terms of the Swap, the Company pays interest at a fixed rate of interest and receive interest that varies with the three-month LIBOR rate. The notional value, fixed rate of interest and expiration date of the Swap as of December 31, 2021 were $450 million – 0.965% – July 1, 2026. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap is assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. For the year ended December 31, 202 1 and since inception, the Swap was deemed to be highly effective. The Swap is designated as a cash flow hedge. Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive loss (“AOCL”), net of tax, to the extent the hedge is determined to be effective. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings. Refer to Note 12, Derivatives, for further information. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, significant negative industry or economic trends and significant decreases in the Company’s market capitalization. The Company conducts the annual impairment assessment as of October 1 st Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in or with institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA), unified managed account/model (UMA) intermediaries and private funds. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1 st Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, USAA Funds, VictoryShares and other pooled funds sponsored by Victory and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds, USAA Funds and VictoryShares and transfer agent fees due from the USAA Funds and sub-transfer agent fees due from the Victory Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2021, 2020 and 2019, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2021, 2020 and 2019. Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2021, 2020 and 2019. Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The Black‑Scholes option valuation model incorporates assumptions as to dividend yield, expected volatility, an appropriate risk‑free interest rate and the expected life of the option. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s Common Stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s Common Stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company expenses the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $0.4 million, $0.9 million and $4.4 million in costs related to debt modifications in 2021, 2020 and 2019. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. Leases The Company currently leases office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Lease agreements that are classified as operating leases may contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight‑line basis over the lease term commencing when we obtain the right to control the use of the leased property. Rent expense is included in general and administrative expense in the Consolidated Statements of Operations. Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained earnings in the Consolidated Balance Sheets. Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount at December 31, 2021, 2020 and 2019. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the C onsolidated S tatements of O perations. Foreign exchange gains and losses for the years ended December 31, 202 1 , 20 20 and 201 9 were immaterial. Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets, depreciation and debt issuance costs. Deferred tax assets are generally attributable to definite‑lived intangible assets, goodwill, stock compensation, deferred compensation and acquisition-related costs. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a "more‑likely‑than‑not" threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. Loss Contingencies The Company continuously reviews investor, client, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. Business Combinations The Company accounts for business combinations under the acquisition method of accounting and allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values are determined in accordance with the guidance in ASC 820, Fair Value Measurement, based on valuations performed by the Company and independent valuation specialists. Asset Acquisitions When a group of assets is acquired that does constitute a business, the Company accounts for the transaction as an asset acquisition. The cost of the acquisition, which includes transaction costs directly related to the transaction and consideration paid, is allocated on a relative fair value basis to the net assets acquired. Contingent and Deferred Payment Arrangements The Company periodically enters into contingent and/or deferred payment arrangements in connection with its business combinations. Liabilities under contingent and deferred payment arrangements are recorded in consideration payable for acquisition of business in the C onsolidated B alance S heets. In contingent payment arrangements, the Company agrees to pay additional consideration to the sellers based on future performance, such as future net revenue levels. The Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in the C onsolidated B alance S heet s at estimated fair value. In deferred payment arrangements, the Company records a liability in the C onsolidated Ba lance S heet s at the time a business combination is consummated for the present value, which is the estimated fair value, of the future fixed dollar contractual payments. Contingent payment obligations are remeasured at fair value each reporting date taking into consideration changes in expected payments, and the change in fair value is recorded in the current period as a gain or loss. Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The Company accretes obligations under deferred payment arrangements to their expected payment amounts over the period covered by the arrangement. Accretion expense related to deferred payment obligations is reflected in interest expense and other financing costs in the Consolidated Statements of Operations and totaled $0.2 million in 2019 ($0 in 2021 and 2020). Compensatory Payment Arrangements In connection with business combinations, the Company evaluates whether any portion of the transaction consideration is in exchange for elements other than the acquired business and should be accounted for as a separate transaction apart from the business combination. If based on the substance of the contingent payment arrangement, the Company determines that the payments are compensation for post-acquisition employee services, the Company considers this a compensatory payment arrangement and no liability is recorded for the payments on the acquisition date. The related expense, which is the total amount of compensation management estimates will be paid, is accrued on a straight-line basis over the estimated service period, which is the time period when management determines that it is probable that the performance conditions will be achieved. At each reporting date, cumulative expense recognized under the compensatory payment arrangement will be at least equal to the cumulative dollar amount actually paid out and currently payable under the terms of the related purchase agreement. If there is |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | NOTE 3. Revenue In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Year Ended December 31, (in thousands) 2021 2020 2019 Investment management fees Mutual funds (Victory/USAA Funds) $ 536,902 $ 455,715 $ 355,969 ETFs (VictoryShares) 16,517 11,604 10,422 Separate accounts and other vehicles 125,417 99,125 99,726 Performance-based fees Mutual funds (USAA Funds) (5,839 ) (4,771 ) — Separate accounts and other vehicles 1,542 363 685 Total investment management fees $ 674,539 $ 562,036 $ 466,802 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 120,414 $ 112,279 $ 71,131 ETFs (VictoryShares) 1,887 1,460 1,317 Distribution fees Mutual funds (Victory/USAA Funds) 28,939 25,599 30,356 Transfer agent fees Mutual funds (USAA Funds) 64,486 73,977 42,767 Total fund administration and distribution fees $ 215,726 $ 213,315 $ 145,571 Total revenue $ 890,265 $ 775,351 $ 612,373 The following table presents balances of receivables: (in thousands) December 31, 2021 December 31, 2020 Customer receivables Mutual funds (Victory/USAA Funds) $ 65,304 $ 60,868 ETFs (VictoryShares) 1,934 1,419 Separate accounts and other vehicles 30,519 22,641 Receivables from contracts with customers 97,757 84,928 Non-customer receivables 6,548 3,254 Total receivables $ 104,305 $ 88,182 Investment management fees receivable $ 80,634 $ 67,957 Fund administration and distribution fees receivable 17,123 16,971 Other receivables 6,548 3,254 Total receivables $ 104,305 $ 88,182 Revenue The Company’s revenue includes fees earned from providing; • investment management services, • fund administration services, • fund transfer agent services, and • fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Investment management, fund administration and fund distribution fees are generally considered variable consideration as they are typically calculated as a percentage of AUM. Fund transfer agent fees are also considered variable consideration as they are calculated as a percentage of AUM or based on the number of accounts in the fund. In such cases, the amount of fees earned is subject to factors outside of the Company’s control including customer or underlying investor contributions and redemptions and financial market volatility. These fees are considered constrained and are excluded from the transaction price until the asset values or number of accounts on which the customer is billed are calculated and the value of consideration is measurable. The Company has contractual arrangements with third parties to provide certain advisory, administration, transfer agent and distribution services. Management considers whether we are acting as the principal service provider or as an agent to determine whether revenue should be recorded based on the gross amount payable by the customer or net of payments to third-party service providers, respectively. Victory is considered a principal service provider if we control the service that is transferred to the customer. We are considered an agent when we arrange for the service to be provided by another party and do not control the service. Investment Management Fees Investment management fees are received in exchange for investment management services that represent a series of distinct incremental days of investment management service. Control of investment management services is transferred to the customers over time as these customers receive and consume the benefits provided by these services. Investment management fees are calculated as a contractual percentage of AUM and are generally paid in arrears on a monthly or quarterly basis. AUM represents the financial assets the Company manages for clients on either a discretionary or non-discretionary basis. In general, AUM reflects the valuation methodology that corresponds to the basis used for determining revenue such as net asset value for the Victory Funds, USAA Funds and certain other pooled funds and account market value for separate accounts. For the NEC Funds, AUM represents limited partner capital commitments during the commitment period of the fund. Following the earlier of the termination of the commitment period and the beginning of any commitment period for a successor fund, AUM generally represents, depending on the fund, the lesser of a) the net asset value of the fund and b) the aggregated adjusted cost basis of each unrealized portfolio investment or the limited partner capital commitments reduced by the amount of capital contributions used to make portfolio investments that have been disposed. Investment management fees are recognized as revenue using a time-based output method to measure progress. Revenue is recorded at month end or quarter end when the value of consideration is measured. The amount of investment management fee revenue varies from one reporting period to another as levels of AUM change (from inflows, outflows and market movements) and as the number of days in the reporting period change. The Company may waive certain fees for investment management services provided to the Victory Funds, USAA Funds , VictoryShares and other pooled investment vehicles and may subsidize certain share classes of the Victory Funds, USAA Funds , VictoryShares and other pooled investment vehicles to ensure that specified operating expenses attributable to such share classes do not exceed a specified percentage. These waivers and reimbursements reduce the transaction price allocated to investment management services and are recognized as a reduction to investment management fees revenue. The amounts due to the Victory Funds, USAA Funds , VictoryShares and other pooled investment vehicles for waivers and expense reimbursements represent consideration payable to customers, which is recorded in a ccounts payable and accrued expenses in the Consolidated Balance Sheets, and no distinct services are received in exchange for these payments. Performance-based investment management fees, which include fees under performance fee and fulcrum fee arrangements, are included in the transaction price for providing investment management services. Performance-based investment management fees are calculated as a percentage of investment performance on a client’s account versus a specified benchmark or hurdle based on the terms of the contract with the customer. Performance-based investment management fees are variable consideration and are recognized as revenue when and to the extent that it is probable that a significant reversal of the cumulative revenue for the contractual performance period will not occur. Performance-based investment management fees recognized as revenue in the current period may pertain to performance obligations satisfied in prior periods. Fulcrum fee arrangements include a performance fee adjustment that increases or decreases the total investment management fee depending on whether the assets being managed experienced better or worse investment performance than the index specified in the customer’s contract. The performance fee adjustment arrangement with certain equity and fixed income USAA Funds took effect on July 1, 2020 and is calculated monthly based on the investment performance of those funds relative to their specified benchmark indexes over the discrete performance period ending with that month . Fund Administration Fees The Company recognizes fund administration fees as revenue using a time-based output method to measure progress. Fund administration fees are determined based on the contractual rate applied to average daily net assets of the Victory Funds, USAA Funds and VictoryShares for which administration services are provided. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets and constraints are removed. The Company’s fund administration fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-administration services. We are the primary obligor under the contracts with the Victory Funds, USAA Funds and VictoryShares and have the ability to select the service provider and establish pricing. As a result, fund administration fees and sub-administration expenses are recorded on a gross basis. Fund Transfer Agent Fees The Company recognizes fund transfer agent fees using a time-based output method to measure progress. Fund transfer agent fees are determined based on the contractual rate applied to either the average daily net assets of the USAA Funds for which transfer agent services are provided or number of accounts in the USAA Funds. Revenue is recorded on a monthly basis when the value of consideration is measured using actual average daily net assets or actual number of accounts and constraints are removed. The Company’s fund transfer agent fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company also receives fees for sub-transfer agency services under contracts with the Victory Funds for member class shares. Sub-transfer agency fees are recognized and recorded in a manner similar to fund transfer agent fees and are recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with a third party to provide certain sub-transfer agent services. As the Company is the primary obligor under the transfer agency contracts with the USAA Funds and has the ability to select the service provider and establish pricing , fund transfer agent fees and sub-transfer agent expenses are recorded on a gross basis. Fund Distribution Fees The Company receives compensation for sales and sales-related services promised under distribution contracts with the Victory Funds and USAA Funds. Revenue is measured in an amount that reflects the consideration to which the Company expects to be entitled in exchange for providing distribution services. Distribution fees are generally calculated as a percentage of average net assets in the Victory Funds and USAA Funds. The Company’s performance obligation is satisfied at the point in time when control of the services is transferred to customers, which is upon investor subscription or redemption. Based on the nature of the calculation, the revenue for these services is accounted for as variable consideration. The Company may recognize distribution fee revenue in the current period that pertains to performance obligations satisfied in prior periods as variable consideration is recognized only when uncertainties are resolved. The Company’s distribution fee revenue is recorded in fund administration and distribution fees in the Consolidated Statements of Operations. The Company has contractual arrangements with third parties to provide certain distribution services. The Company is the primary obligor under the contracts with the Victory Funds and USAA Funds and has the ability to select the service provider and establish pricing. Substantially all of the Company’s revenue is recorded gross of payments made to third parties. Costs Incurred to Obtain or Fulfill Customer Contracts The Company is required to capitalize certain costs directly related to the acquisition or fulfillment of a contact with a customer. Victory has not identified any sales-based compensation or similar costs that meet the definition of an incremental cost to acquire a contract and as such we have no intangible assets related to contract acquisitions. Direct costs incurred to fulfill services under the Company’s distribution contracts include sales commissions paid to third party dealers for the sale of Class C Shares. The Company may pay upfront sales commissions to dealers and institutions that sell Class C shares of the participating Victory Funds at the time of such sale. Upfront sales commission payments with respect to Class C shares equal 1.00% of the purchase price of the Class C shares sold by the dealer or institution. When the Company makes an upfront payment to a dealer or institution for the sale of Class C shares, the Company capitalizes the cost of such payment, which is recorded in prepaid expenses in the Consolidated Balance Sheets and amortizes the cost over a 12-month period, the estimated period of benefit. Valuation of AUM and fund investments The fair value of assets under management of the Victory Funds, USAA Funds and VictoryShares is primarily determined using quoted market prices or independent third-party pricing services or broker price quotes. In certain circumstances, a quotation or price evaluation is not readily available from a pricing service. In these cases, pricing is determined by management based on a prescribed valuation process that has been approved by the directors/trustees of the sponsored products. The same prescribed valuation process is used to price securities in separate accounts and the Company’s other non-alternative investment vehicles for which a quotation or price evaluation is not readily available from a pricing service. The fair value of Level III assets held by alternative investment vehicles is determined under the respective valuation policy for each fund. The valuation policies address the fact that substantially all the investments of a fund may not have readily available market information and therefore the fair value for these assets is typically determined using unobservable inputs and models that may include subjective assumptions. AUM reported by the Company for alternative investment vehicles may not necessarily equal the funds’ net asset values or the total fair value of the funds’ portfolio investments as AUM represents the basis for calculating management fees. For the periods presented, less than one percent of the Company’s total AUM were Level III assets priced without using a quoted market price, broker price quote or pricing service quotation. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 4. ACQUISITION USAA AMCO Acquisition On July 1, 2019, the Company completed the acquisition of USAA Adviser and VCTA (collectively, the “USAA Acquired Companies”), which includes the USAA Mutual Fund Business, and executed Amendment No. 1 (the “Amendment”) to the stock purchase agreement (the “Stock Purchase Agreement”). The Amendment amended the Stock Purchase Agreement entered into on November 6, 2018 between the Company, USAA Investment Corporation, and for certain limited purposes, USAA Capital Corporation. The assets acquired and liabilities assumed and results of the USAA Mutual Fund Business are reflected in the consolidated financial statements from the closing date of July 1, 2019. The USAA AMCO Acquisition expanded and diversified the Company’s investment platform, particularly in the fixed income and solutions asset classes, and increased the Company’s size and scale. Additional products added to the investments platform include target date and target risk strategies, managed volatility mutual funds, active fixed income ETFs, sub-advised and multi-manager equity funds. The acquisition also added to the Company’s lineup of asset allocation portfolios and smart beta equity ETFs and provided the Company the rights to offer products and services using the USAA brand and the opportunity to offer its products to USAA members through a direct investor channel. Purchase Price The Company purchased 100% of the outstanding common stock of the USAA Acquired Companies. The purchase price for the USAA Acquired Companies was $949.4 million, comprised of $851.3 million of cash paid at closing plus the acquisition date value of contingent payments due to sellers of $98.8 million less $0.7 million in net working capital adjustments settled in the first quarter of 2020. No further purchase price adjustments were recorded during the measurement period. A maximum of $150.0 million ($37.5 million per year) in contingent payments is payable to sellers based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related AUM in each of the first four annual earn out periods following the closing as defined in the Stock Purchase Agreement. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80% of the revenue run-rate (as calculated under the Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the Closing, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100% of that Closing revenue run-rate. Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement. The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the USAA AMCO Acquisition. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $120.6 million was recorded to goodwill in the Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily resulted from expected future earnings and cash flows, as well as the expected synergies created by the integration of the USAA Acquired Companies within our organization. The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 299 Property and equipment 1,165 Other intangible assets ( 1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Purchase price $ 949,427 (1) Includes $750.2 million for indefinite-lived investment advisory contracts, $19.1 million for indefinite-lived transfer agent contracts, $0.8 million for indefinite-lived distribution contracts, $38.2 million for definite-lived trade name assets and $0.4 million for definite-lived lease-related assets, all of which are recorded in other intangible assets, net on the Consolidated Balance Sheets. Contingent Consideration The estimated fair value for contingent consideration payable to sellers is estimated using the real options method. Revenue related to “non-managed money” assets is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the “non-managed money” revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration. The fair value of contingent consideration payable to sellers was estimated at $68.8 million and $92.5 million at December 31, 2021 and 2020, respectively, and $98.8 million as of the acquisition date. The Company recognized expense of $13.8 million, $11.3 million and $19.9 million in 2021, 2020 and 2019, respectively, which was recorded in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. As of December 31, 2021, the Company has paid a total of $75.0 million (the $37.5 million maximum payment for each of the first and second earn out periods) in contingent consideration to sellers. Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2021 and 2020 and the acquisition date are as follows and are approximate values: December 31, 2021 December 31, 2020 July 1, 2019 Acquisition Date Non-managed money revenue average annual growth rate 5 % 3 % 3 % Market price of risk (continuous) 6 % 7 % 4 % Revenue volatility 17 % 16 % 20 % Discount rate 3 % 3 % 7 % Years remaining in earn out period 1.9 2.9 4.3 Undiscounted estimated remaining earn out payments $ millions $72 - $75 $98 - $113 $119 - $150 USAA Acquired Companies Revenue of the USAA Acquired Companies subsequent to the effective closing date of July 1, 2019 for the six months ended December 31, 2019 and the six months ended June 30, 2020, was as follows: Unaudited Unaudited Six Months Ended Six Months Ended (in millions) June 30, 2020 December 31, 2019 Revenue $ 221.3 $ 244.5 Net income attributable to the USAA Acquired Companies for the six months ended December 31, 2019 and the first six months of 2020 is impractical to determine as the Company does not prepare discrete financial information at that level. The Company’s consolidated financial statements for the year ended December 31, 2019 include the operating results of the USAA Acquired Companies for the period from July 1, 2019 to December 31, 2019. The historical consolidated financial information of Victory and the USAA Acquired Companies have been adjusted to give effect to unaudited pro forma events that are directly attributable to the transaction, factually supportable and expected to have continuing impact on the combined results. These amounts have been calculated after adjusting the results of the USAA Acquired Companies to reflect additional interest expense, distribution costs, share-based compensation expense, income taxes and intangible asset amortization that would have been expensed assuming the fair value adjustments had been applied on January 1, 2018. In addition, Victory’s and the USAA Acquired Companies’ results were adjusted to remove incentive compensation, legal fees and mutual fund proxy costs directly attributable to the acquisition. The following Unaudited Pro Forma Condensed Combined Statements of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2018. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. Unaudited Twelve Months Ended December 31, (in thousands, except per share amount) 2019 2018 Revenue $ 851,440 $ 906,844 Net income 114,988 71,471 Earnings per share of common stock Basic $ 1.70 $ 1.08 Diluted $ 1.56 $ 1.01 Weighted average number of shares outstanding Basic 67,693 66,295 Diluted 73,612 70,511 THB Acquisition On March 1, 2021, the Company completed the acquisition of certain assets of THB, including without limitation, (i) certain investment advisory and business contracts, (ii) certain books and records, (iii) the investment performance track record, and (iv) all business intellectual property and proprietary software, and hired the THB investment team. At March 1, 2021, the THB AUM that was acquired totaled $547 million. THB manages responsible investment portfolios in the micro-cap, small-cap and mid-cap asset classes, including U.S., global and international strategies. Because substantially all of the fair value of the acquired assets was concentrated in a single identifiable asset, the transaction was accounted for as an asset acquisition. Estimated acquisition costs of $0.6 million were allocated to a definite-lived customer relationship intangible asset. NEC Acquisition On September 10, 2021, VCM entered into a definitive agreement to acquire 100% of the equity interests in NEC. Founded in 2004 and based in Hanover, New Hampshire, NEC is an alternative asset management firm focused on debt and equity investments in clean energy infrastructure projects and companies through four active private closed-end funds (the “NEC Funds”). On November 1, 2021 (the “NEC Closing Date”), the acquisition of NEC was completed. The estimated purchase price for the NEC Acquisition is $63.1 million, which includes $62.8 million in cash paid at closing, net of cash acquired, and $0.3 million of net working capital adjustments to be settled in the first half of 2022. Consideration paid at closing was funded with balance sheet cash and proceeds from borrowings under the Company’s revolving line of credit. All borrowings under the revolving line of credit were repaid prior to December 31, 2021. Under the terms of the purchase agreement, the Company will pay up to an additional $35.0 million in cash based on net revenue growth over a six year period following the closing date. The purchase agreement specifies net revenue and payment targets for the 36-month, 48-month and 60-month periods beginning on November 30, 2021 (the “Start Date”) for the contingent payments. It also provides for advance payments and catch-up payments to be made based on actual NEC net management fee revenue, as defined in the purchase agreement, as measured at the end of each 12 month anniversary of the Start Date over a six year period. The maximum amount of contingent payments is due, less any contingent payments previously paid, upon the occurrence of certain specified events within a five year period following the Start Date. The Company determined that substantially all of the contingent payments payable per the NEC purchase agreement represent compensation for post-closing services. Accordingly, these contingent payments were excluded from the purchase price for the NEC Acquisition and a liability for these contingent payments was not recorded on the acquisition date. The Company will recognize compensation expense over the estimated service period on a straight-line basis in an amount equal to the total contingent payments currently forecasted to be paid. As of December 31, 2021, the Company had recorded $1.1 million in NEC contingent payment compensation expense, which is included in personnel compensation and benefits in the Consolidated Statements of Operations. A liability for the corresponding amount is recorded in accrued compensation and benefits in the Consolidated Balance Sheets. The NEC Acquisition purchase price of $62.8 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The carried interests in the existing NEC Funds were not acquired in the transaction. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $41.0 million was recorded to goodwill in the Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from future earnings and cash flows from new funds expected to be launched on the NEC alternative investment platform. The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 118 Other receivables and prepaid expenses 60 Property and equipment 19 Other intangible assets (1) 23,700 Goodwill 41,032 Accounts payable and accrued expenses (2,096 ) Purchase price, net of cash acquired $ 62,833 (1) Includes $14.0 million for definite-lived customer relationships with a 6 year estimated useful life and $9.7 million for definite-lived investment advisory contracts with a 2 year estimated useful life, which are recorded in other intangible assets, net on the Consolidated Balance Sheets. As of December 31, 2021, the purchase price allocation for the NEC Acquisition is preliminary as customary post-closing purchase adjustments have not been finalized. The final purchase price allocation may reflect changes to the preliminary valuations for accounts payable and accrued expenses and other liabilities for net working capital adjustments. Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date. WestEnd Acquisition On November 4, 2021, the Company entered into a definitive agreement (the “WestEnd Purchase Agreement”) with WestEnd Advisors, LLC (“WestEnd”), pursuant to which the Company agreed to purchase 100% of the equity interests of WestEnd (the “WestEnd Acquisition”) on the terms and subject to the conditions therein. Founded in 2004, and headquartered in Charlotte, North Carolina, WestEnd is an ETF strategist advisor that provides financial advisors with a turnkey, core model allocation strategy for either a holistic solution or complementary source of alpha. The firm offers four primary ETF strategies and one large cap core strategy in Separately Managed Account (SMA) structures. On and effective December 31, 2021, the Company completed the WestEnd Acquisition. The aggregate purchase price (the “WestEnd Purchase Price”) for the WestEnd Acquisition is estimated at $716.1 million, net of cash acquired, which includes (i) $475.8 million in cash paid at closing (the “WestEnd Closing”) net of cash acquired, plus the acquisition date value of contingent payments due to sellers of $239.7 million plus an estimated $0.6 million payable in cash in the first half of 2022 for net working capital adjustments. The contingent earn-out payments are based on net revenue of the WestEnd business during each of the first four years following the WestEnd Closing, subject to certain “catch-up” provisions over a five and one half year period following the WestEnd Closing. A maximum of $320.0 million ($80.0 million per year) in earn-out payments may be paid. The WestEnd Purchase Price is subject to adjustments based on the level of client consents received, net working capital, debt, cash and unpaid transaction expenses. In connection with the closing of the WestEnd Acquisition, the Company entered into the Third Amendment to the 2019 Credit Agreement and obtained incremental term loans in an aggregate principal amount of $505.0 million to fund the acquisition and pay fees and expenses related to the transaction. Please refer to Note 11, Debt, for more information on the 2021 Incremental Term Loans. A total of $2.9 million of the cash paid at closing was placed in escrow, of which $0.5 million is available for purchase price adjustments and $2.4 million is available to compensate the Company for eligible claims under the purchase agreement’s indemnification provisions. The purchase price of $716.1 million was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the WestEnd Acquisition. The Company used an independent valuation specialist to assist with the determination of fair value for certain of the acquired assets and assumed liabilities disclosed below. The excess purchase price over the estimated fair values of assets acquired and liabilities assumed of $536.0 million was recorded to goodwill in the Consolidated Balance Sheets, all of which is expected to be deductible for tax purposes. The goodwill arising from the acquisition primarily results from revenue synergies expected from combining WestEnd and Victory distribution platforms and sales efforts. The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 4,560 Prepaid expenses and other assets 256 Property and equipment 2,011 Other intangible assets (1) 175,500 Goodwill 536,023 Accounts payable and accrued expenses (115 ) Accrued compensation and benefits (1,480 ) Other liabilities (693 ) Purchase price, net of cash acquired $ 716,062 (1) Includes $172.5 million for definite-lived customer relationship assets with a 10 year estimated useful life and $3.0 million for a definite-lived trade name asset with a 7 year estimated useful life, which are recorded in other intangible assets, net on the Consolidated Balance Sheets. As of December 31, 2021, the purchase price allocation for the WestEnd Acquisition is preliminary as customary post-closing purchase adjustments have not been finalized. The final purchase price allocation may reflect changes to the preliminary valuations for receivables and accounts payable and accrued expenses for net working capital adjustments. Adjustments will be made, as necessary, during the measurement period of up to one year after the closing date. The estimated fair value for contingent consideration payable to sellers is estimated using the real options method. WestEnd net revenue growth is simulated in a risk-neutral framework to calculate expected probability-weighted earn out payments, which are then discounted from the expected payment dates at the relevant cost of debt. Significant assumptions and inputs include the WestEnd net revenue projected annual growth rate, the market price of risk, which adjusts the projected revenue growth rate to a risk-neutral expected growth rate, revenue volatility and discount rate. The market price of risk and revenue volatility are based on data for comparable companies. As the contingent consideration represents a subordinate, unsecured claim of the Company, the Company assesses a discount rate which incorporates adjustments for credit risk and the subordination of the contingent consideration. A maximum of $320.0 million ($80.0 million per year) is payable to sellers in contingent payments. The fair value of contingent consideration payable to sellers was estimated at $239.7 million as of the acquisition date. Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2021 are as follows and are approximate values: December 31, 2021 Acquisition Date Net revenue average annual growth rate 37 % Market price of risk adjustment for revenue (continuous) 11 % Revenue volatility 21 % Discount rate 4 % Years remaining in earn out period 5.8 Undiscounted estimated remaining earn out payments $ millions $277 - $320 As the WestEnd Acquisition was effective at market close on December 31, 2021, the Company’s operating results for 2021 do not include WestEnd. The following Unaudited Pro Forma Condensed Combined Statements of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2020. This unaudited information should not be relied upon as indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. The historical consolidated financial information of the Company and WestEnd have been adjusted to give effect to unaudited pro forma events that are directly attributable to the WestEnd Acquisition. These amounts have been calculated after adjusting the results of WestEnd and the Company to reflect additional interest expense, intangible asset amortization, acquisition-related costs, transaction-related compensation costs and income taxes that would have been expensed assuming the WestEnd Acquisition was consummated on January 1, 2020. Unaudited Year Ended December 31, (in thousands, except per share amount) 2021 2020 Revenue $ 936,609 $ 798,401 Net income 280,980 177,637 Earnings per share of common stock Basic $ 4.13 $ 2.62 Diluted $ 3.79 $ 2.41 Weighted average number of shares outstanding Basic 67,976 67,710 Diluted 74,151 73,719 Acquisition-related costs Costs related to acquisitions of businesses and assets are summarized below and include legal and filing fees, advisory services, mutual fund proxy voting costs and other one‑time expenses related to the transactions. Included in USAA AMCO acquisition-related costs in 2021 is a liability for one-time payments for assets not acquired in the transaction. Costs related to acquisitions were expensed in 2021, 2020 and 2019 and are included in acquisition‑related costs in the Consolidated Statements of Operations. Acquisition-related costs (in thousands) 2021 2020 2019 USAA AMCO $ 5,534 $ 426 $ 21,333 NEC 2,605 - - WestEnd 8,102 - - Other 21 682 984 Total acquisition-related costs $ 16,262 $ 1,108 $ 22,317 Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. The following table presents a rollforward of restructuring and integration liabilities: (in millions) 2021 2020 2019 Liability balance, beginning of period $ 1.0 $ 3.0 $ 0.1 Severance expense USAA AMCO Acquisition 1.4 1.2 6.2 THB 0.2 — — Other 0.2 — — Contract termination expense USAA AMCO Acquisition — 0.1 0.2 Integration costs USAA AMCO Acquisition 0.5 6.5 2.3 THB 0.3 Restructuring and integration costs 2.6 7.8 8.7 Settlement of liabilities (3.3 ) (9.8 ) (5.8 ) Liability balance, end of period $ 0.3 $ 1.0 $ 3.0 Accrued expenses $ 0.3 $ 1.0 $ 2.9 Other liabilities — — 0.1 Liability balance, end of period $ 0.3 $ 1.0 $ 3.0 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company determines the fair value of certain financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value determinations utilize a valuation hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the fair value hierarchy contains three levels: • Level 1—Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. • Level 2—Valuation inputs are quoted prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other observable inputs directly or indirectly related to the asset or liability being measured. • Level 3—Valuation inputs are unobservable and significant to the fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability. The following table presents assets and liabilities measured at fair value on a recurring basis: As of December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Investments in proprietary funds $ 912 $ 912 $ — $ — Deferred compensation plan investments 30,812 30,812 — — Interest rate swap asset 7,774 — 7,774 — Total financial assets $ 39,498 $ 31,724 $ 7,774 $ — Financial liabilities Contingent consideration arrangements (308,500 ) — — (308,500 ) Total financial liabilities $ (308,500 ) $ — $ — $ (308,500 ) As of December 31, 2020 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 10,088 $ 10,088 $ — $ — Investments in proprietary funds 922 922 — — Deferred compensation plan investments 22,571 22,571 — — Total financial assets $ 33,581 $ 33,581 $ — $ — Financial liabilities Interest rate swap liability $ (10,006 ) $ — $ (10,006 ) $ — Contingent consideration arrangements (92,500 ) — - (92,500 ) Total financial liabilities $ (102,506 ) $ — $ (10,006 ) $ (92,500 ) (1) Level 1 assets consist of money market funds and open-end mutual funds. The fair values for these assets are determined utilizing quoted market prices for identical assets. The Company redeemed its money market fund investment in the fourth quarter of 2021. The interest rate swap (the “Swap”) asset and liability represent amounts receivable or payable under a floating-to-fixed interest rate swap transaction entered into by the Company on March 27, 2020. The Swap effectively fixed the interest rate at 3.465% on $450 million of the outstanding Term Loan balance through the Term Loan’s maturity in July 2026. The fair value of the Swap is included in the Consolidated Balance Sheets in other assets at December 31, 2021 and in other liabilities as of December 31, 2020. Pricing was determined based on a third party, model-derived valuation in which all significant inputs are observable in active markets (Level 2). Refer to Note 12, Derivatives, for further detail on the Swap. Contingent consideration arrangements include the USAA AMCO earn-out payment liability at December 31, 2021 and December 31, 2020 and the WestEnd earn-out payment liability at December 31, 2021. Contingent consideration arrangements are included in consideration payable for acquisition of business in the Consolidated Balance Sheets. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the USAA AMCO Acquisition earn-out payment liability include the “non-managed money” revenue projected growth rate, revenue volatility, market price of risk and discount rate. Significant unobservable inputs for the option pricing model used to determine the estimated fair value of the WestEnd Acquisition earn-out payment liability include the WestEnd net revenue projected growth rate, revenue volatility, market price of risk and discount rate. For both the USAA AMCO and WestEnd contingent consideration arrangements, an increase in the market price of risk, discount rate and revenue volatility results in a lower fair value for the earn-out payment liability, while an increase in the projected growth rate for revenue results in a higher fair value for the earn-out payment liability. Refer to Note 4, Acquisitions, for further details related to the valuation of contingent consideration payable related to the USAA AMCO Acquisition and WestEnd Acquisition. Changes in the fair value of contingent consideration arrangement liabilities, realized or unrealized, are recorded in earnings and are included in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2021, 2020 and 2019, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2019 $ 118,700 USAA AMCO first annual earn-out payment (37,500 ) USAA AMCO change in fair value measurement 11,300 Balance, December 31, 2020 $ 92,500 USAA AMCO second annual earn-out payment (37,500 ) USAA AMCO change in fair value measurement 13,800 WestEnd acquisition date contingent consideration liability 239,700 Balance, December 31, 2021 $ 308,500 There were no transfers between any of the Level 1, 2 and 3 categories in the fair value measurement hierarchy for the years ended December 31, 2021 and 2020. The Company recognizes transfers at the end of the reporting period. The net carrying value of accounts receivable and accounts payable approximates fair value due to the short‑term nature of these assets and liabilities. The fair value of our long-term debt at December 31, 2021 is considered to be its carrying value as the interest rate on the bank debt is variable and approximates current market rates. As a result, Level 2 inputs are utilized to determine the fair value of our long‑term debt. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6. Related‑Party Transactions The Company considers certain funds that it manages, including the Victory Funds, the USAA Funds, the VictoryShares, collective trust funds that it sponsors (the “Victory Collective Funds”), the NEC Funds and other pooled investment vehicles that it sponsors, to be related parties as a result of its advisory relationship. The Company receives investment management, administrative, distribution and compliance fees in accordance with contracts that VCM and VCS have with the Victory Funds and the USAA Funds, and has invested a portion of its balance sheet cash in the USAA Treasury Money Market Fund and earned interest on the amount invested in this fund. The Company receives investment management, administrative and compliance fees in accordance with contracts that VCM has with the VictoryShares. We also receive investment management fees from the Victory Collective Funds, the NEC Funds and other pooled funds under VCM’s advisory contracts with these funds. In addition, VCTA receives fees for transfer agency services under contracts with the USAA Funds and sub-transfer agency services under contracts with the Victory Funds for member class shares. In 2021 and 2020, the Company paid director fees to and made contributions under the Director DC Plan for non-employee members of our Board of Directors, which are included in general and administrative expense in the Consolidated Statements of Operations. The table below presents balances and transactions involving related parties included in the Consolidated Balance Sheets and Consolidated Statements of Operations. • Included in cash and cash equivalents in 2020 is an investment in the USAA Treasury Money Market Fund. This investment was redeemed in full in the fourth quarter of 2021. • Included in receivables (investment management fees) are amounts due from the Victory Funds, USAA Funds, Victory Collective Funds and other pooled funds for investment management services. • Included in receivables (fund administration and distribution fees) are amounts due from the Victory Funds and USAA Funds for compliance services, amounts due from the USAA Funds for transfer agent services, amounts due from the Victory Funds for sub-transfer agent services and amounts invoiced to the NEC Funds for costs paid by VCM. • Included in prepaid expenses are amounts paid by VCM that will be invoiced to the NEC Funds in the following period. • Included in revenue (investment management) are amounts earned for investment management services provided to the Victory Funds, the USAA Funds, the VictoryShares, the Victory Collective Funds, the NEC Funds and other pooled funds. • Included in revenue (fund administration and distribution fees) are amounts earned for compliance services, transfer agent services and sub-transfer agent services. • Realized and unrealized gains and losses and dividend income on investments in the Victory Funds and USAA Funds classified as investments in proprietary funds and deferred compensation plan investments as well as dividend income on investments in the USAA Treasury Money Market Fund are recorded in interest income and other income (expense) in the Consolidated Statements of Operations. • Amounts due to the Victory Funds, USAA Funds, VictoryShares for waivers of investment management fees and reimbursements of fund operating expenses are included in accrued expenses in the Consolidated Balance Sheets and represent consideration payable to customers. (in thousands) 2021 2020 Related party assets Cash and cash equivalents $ — $ 10,088 Receivables (investment management fees) 53,256 46,958 Receivables (fund administration and distribution fees) 17,123 16,971 Prepaid expenses 304 Investments (investments in proprietary funds, fair value) 912 922 Investments (deferred compensation plan investments, fair value) 28,643 22,062 Total $ 100,238 $ 97,001 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 6,695 $ 5,978 Total $ 6,695 $ 5,978 Year ended December 31, (in thousands) 2021 2020 2019 Related party revenue Investment management fees $ 566,775 $ 471,153 $ 371,807 Fund administration and distribution fees 215,726 213,315 145,571 Total $ 782,501 $ 684,468 $ 517,378 Related party expense General and administrative 521 702 — Total $ 521 $ 702 $ — Related party other income (expense) Interest income (expense) and other income (expense) $ 5,470 $ 2,337 $ 2,692 Total $ 5,470 $ 2,337 $ 2,692 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 7. Investments As of December 31, 2021 and 2020, the Company had investments in proprietary funds and deferred compensation plan investments. Investments in proprietary funds consist entirely of seed capital investments in certain Victory Funds and USAA Funds. Deferred compensation plan investments are held under deferred compensation plans and include Victory Funds, USAA Funds and third party mutual funds. Unrealized and realized gains and losses on investments in proprietary funds and deferred compensation plan investments are recorded in earnings as interest income and other income (expense). Investments in Proprietary Funds The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2021 $ 769 $ 169 $ (26 ) $ 912 As of December 31, 2020 758 164 — 922 The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the years ended December 31, 2021, 2020 and 2019: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2021 $ 215 $ 50 $ — For the year ending December 31, 2020 507 31 (13 ) For the year ending December 31, 2019 158 6 — Deferred Compensation Plan Investments The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2021 $ 27,174 $ 4,266 $ (628 ) $ 30,812 As of December 31, 2020 21,205 1,725 (359 ) 22,571 The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the years ended December 31, 2021, 2020 and 2019: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2021 $ 9,662 $ 1,315 $ (59 ) For the year ending December 31, 2020 4,063 130 (309 ) For the year ending December 31, 2019 2,749 22 (71 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 8. Property and Equipment The following table presents property and equipment as of December 31, 2021 and 2020: As of December 31, (in thousands) 2021 2020 Equipment, purchased software and implementation costs $ 31,503 $ 21,710 Leasehold improvements 4,488 3,155 Furniture and fixtures 3,072 2,743 Total 39,063 27,608 Accumulated depreciation and amortization (13,768 ) (8,861 ) Total property and equipment, net $ 25,295 $ 18,747 Depreciation and amortization expense for property and equipment was $6.2 million, $3.6 million and $3.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE The following table presents changes in the goodwill balance from December 31, 2020 to December 31, 2021: As of December 31, (in thousands) 2021 2020 Balance, beginning of period $ 404,750 $ 404,750 Goodwill recorded in NEC Acquisition 41,032 — Goodwill recorded in WestEnd Acquisition 536,023 — Balance, end of period $ 981,805 $ 404,750 There were no impairments to goodwill recognized during the years ended December 31, 2021, 2020 or 2019. Identifiable Intangible Assets The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2020 $ 123,200 $ 2,368 $ 39,332 $ 7,547 $ 172,447 Accumulated amortization (121,497 ) (2,368 ) (15,406 ) (7,235 ) (146,506 ) Net book value - December 31, 2020 $ 1,703 $ — $ 23,926 $ 312 $ 25,941 Weighted average useful life (yrs) 0.1 — 2.2 0.1 2.4 Gross book value - December 31, 2021 $ 310,286 $ 12,068 $ 42,332 $ 7,547 $ 372,233 Accumulated amortization (123,752 ) (3,176 ) (24,921 ) (7,287 ) (159,136 ) Net book value - December 31, 2021 $ 186,534 $ 8,892 $ 17,411 $ 260 $ 213,097 Weighted average useful life (yrs) 9.4 1.8 1.8 5.0 6.2 Amortization expense for definite‑lived intangible assets for the years ended December 31, 2021, 2020 and 2019, was $12.6 million, $12.8 million and $20.9 million, respectively, and is recorded in depreciation and amortization within the Consolidated Statements of Operations. There were no impairments to definite-lived intangible assets recognized in 2021, 2020 or 2019. The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter: 2022 $ 34,625 2023 29,104 2024 20,187 2025 20,064 2026 20,063 Thereafter 89,054 Total $ 213,097 The following table presents a summary of indefinite‑lived intangible assets by type: Fund Advisory, Transfer Agent and Distribution Trade (in thousands) Contracts Names Totals December 31, 2019 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2020 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2021 balance $ 1,113,000 $ 23,700 $ 1,136,700 There were no impairments to indefinite-lived intangible assets recognized in 2021, 2020 or 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10. Income Taxes The following table presents the provision for income taxes for the years ended December 31, 2021, 2020 and 2019: (in thousands) 2021 2020 2019 Current tax expense (benefit): Federal $ 42,845 $ 24,048 $ 22,234 State 9,929 7,263 6,656 Foreign (9 ) 108 52 Total current tax expense (benefit) 52,765 31,419 28,942 Deferred tax expense (benefit): Federal 15,716 27,793 (449 ) State 3,742 6,860 (289 ) Foreign 30 (54 ) (7 ) Total deferred tax expense (benefit) 19,488 34,599 (745 ) Income tax expense $ 72,253 $ 66,018 $ 28,197 During 2019, the Company recorded a liability for $2.9 million ($2.3 million net of federal benefit) for unrecognized tax benefits, which included $0.3 million of interest and penalties. During 2020, the Company recognized all of the unrecognized tax benefits established at December 31, 2019 as a result of settlements with state taxing authorities, and as of December 31, 2020, the Company had no liability for unrecognized tax benefits. The Company had no additional activity related to unrecognized tax benefits in 2021. As of December 31, 2019, the liability for gross unrecognized tax benefits and interest and penalties totaled $2.9 million which was included in other liabilities in the Consolidated Balance Sheets ($0 for 2021 and 2020). The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2021, 2020 and 2019. (in thousands) 2021 2020 2019 Beginning balance $ - $ 2,582 $ - Additions for tax positions of prior years - - 1,703 Additions based on tax positions related to current year - - 879 Reductions related to settlement of tax matters - (2,582 ) - Ending balance $ - $ - $ 2,582 The Company recognized $0.2 million in interest expense, net of federal benefit, and penalties related to the liability for unrecognized tax benefits in its income tax provision for the year ended December 31, 2019 ($0 in 2021 and 2020). The effective tax rate for the years ended December 31, 2021 and 2020 differs from the United States federal statutory rate primarily as a result of state and local income taxes and excess tax benefits on share-based compensation, and for 2019, expense related to recording the uncertain tax position (“UTP”) liability for unrecognized tax benefits. The following table presents the tax rates for the years ended December 31, 2021, 2020 and 2019. 2021 2020 2019 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 21.0 % State income tax rate, net of federal tax benefit 3.2 % 3.8 % 3.3 % UTP liability — % — % 1.9 % Excess tax benefits on share-based compensation (3.4 ) % (1.4 ) % (2.8 ) % Foreign taxes and other (0.2 ) % 0.3 % — % Income tax expense 20.6 % 23.7 % 23.4 % Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax reporting purposes. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities as well as projections of future taxable income during the periods in which temporary differences are expected to reverse. Based on the consideration of these facts, the Company believes it is more likely than not that all of its gross deferred tax assets will be realized in the future, and as a result has not recorded a valuation allowance on these amounts as of December 31, 2021 and 2020. The following table presents the components of deferred income tax assets and deferred tax liabilities at December 31, 2021 and 2020: (in thousands) 2021 2020 Deferred tax assets: Definite-lived intangibles $ 21,373 $ 21,455 Share-based compensation expense 7,988 10,318 Acquisition-related costs 5,110 4,194 Deferred compensation 7,909 5,621 Restructuring expenses 1,431 1,616 Contingent consideration arrangements 383 431 Goodwill 11,443 7,454 OCI - Swap liability and cumulative translation adjustment — 2,432 Other 54 83 Total deferred tax assets 55,691 53,604 Deferred tax liabilities: Indefinite-lived intangibles 106,230 81,429 Debt issuance costs 4,087 5,085 Depreciation 5,444 4,216 OCI - Swap liability and cumulative translation adjustment 1,878 — Prepaid expenses 271 220 Unrealized gain on deferred compensation investments 901 338 Total deferred tax liabilities 118,811 91,288 Net deferred tax liability $ (63,120 ) $ (37,684 ) As of December 31, 2021 and 2020, the Company had no net operating loss carryforwards. In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. As of December 31, 2021, U.S. federal income tax returns for 2018, 2019 and 2020 are open and therefore subject to examination. State and local income tax returns filed are generally subject to examination from 2017 to 2020. We have analyzed our tax positions for all open years and have concluded that no additional provision for income tax is required in the consolidated financial statements. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 11. Debt 2019 Credit Agreement On July 1, 2019, concurrent with the USAA AMCO Acquisition, the Company entered into the 2019 Credit Agreement, repaid all indebtedness outstanding under the prior credit agreement (the “2018 Credit Agreement”), and terminated the 2018 Credit Agreement. The 2019 Credit Agreement was entered into among Victory, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained a seven-year term loan in an aggregate principal amount of $ 1.1 billion (the “2019 Term Loans”) and established a five-year revolving credit facility (which was unfunded as of the closing date) with aggregate commitments of $ 100.0 million (with a $ 10.0 million sub-limit for the issuance of letters of credit). Amounts outstanding under the 2019 Credit Agreement bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves) plus a margin of 3.25 % or an alternate base rate plus a margin of 2.25 %. The obligations of the Company under the 2019 Credit Agreement are guaranteed by the Company’s domestic subsidiaries (other than VCS) (the “Guarantors”) and secured by substantially all of the assets of the Company and the Guarantors, subject in each case to certain customary exceptions. The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2019 Credit Agreement contains a financial performance covenant, requiring a maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00. As of December 31, 2021, there were no outstanding borrowings under the revolving credit facility and the Company was in compliance with its financial performance covenant. Original issue discount was $11.5 million for the 2019 Term Loans and $1.5 million for the revolving credit facility under the 2019 Credit Agreement. The Company incurred a total of $22.8 million in other third party costs related to the 2019 Credit Agreement and recorded $18.0 million as term loan debt issuance costs, $0.3 million as revolving credit facility debt issuance cost and $4.5 million as expense related to modified debt in general and administrative expense in the Consolidated Statements of Operations. A total of $148.0 million of the 2019 Term Loans was repaid in 2019. The Company recognized a $9.9 million loss on debt extinguishment in 2019, which consisted of the write-off of $6.3 million and $3.6 million of unamortized debt issuance costs and debt discount, respectively, due to the termination of the previous credit agreement and repayments of term loan principal. Debt extinguishment costs relating to the termination of the 2018 Credit Agreement and 2019 Term Loans repayments totaled $5.5 million and $4.4 million, respectively. 2020 Debt Refinancing (First Amendment) On January 17, 2020, the Company entered into the First Amendment (the “First Amendment”) to the 2019 Credit Agreement Pursuant to the First Amendment, the Company refinanced the 2019 Term Loans with replacement term loans in an aggregate principal amount of $952.0 million (the “2020 Term Loans”). The 2020 Term Loans provided for substantially the same terms as the 2019 Term Loans, including the same maturity date of July 1, 2026, except that the 2020 Term Loans provided for a reduced applicable margin on LIBOR of 75 basis points. The applicable margin on LIBOR under the 2020 Term Loans was 2.50%, compared to 3.25% under the 2019 Term Loans. The Company incurred costs of $0.9 million related to the First Amendment which were recorded in general and administrative expense in the Consolidated Statements of Operations. The Company recognized a $2.9 million loss on debt extinguishment in 2020 due to the repayments and repurchases of term loan principal, which consisted of the write-off of $2.7 million and $1.6 million of unamortized debt issuance costs and debt discount, respectively, net of a gain on repurchase of $1.4 million. In 2020, a total of $163.8 million of the outstanding term loans under the 2019 Credit Agreement was repaid or repurchased and retired. 2021 Debt Repricing (Second Amendment) On February 18, 2021, the Company entered into the Second Amendment (the “Second Amendment”) to the 2019 Credit Agreement T In 2021, a total of $142.0 million of the outstanding term loans under the 2019 Credit Agreement was repaid or repurchased and retired. The Company recognized a $4.6 million loss on debt extinguishment in 2021 due to the repayments and repurchases of term loan principal, which consisted of the write-off of $2.9 million and $1.7 million of unamortized debt issuance costs and debt discount, respectively. 2021 Incremental Term Loans (Third Amendment) On December 31, 2021, the Company entered into the Third Amendment (the “Third Amendment”) to the 2019 Credit Agreement with the guarantors party thereto, Barclays Bank PLC, as administrative agent, and the lenders party thereto from time to time. Pursuant to the Third Amendment, the Company obtained incremental term loans (the “2021 Incremental Term Loans”) in an aggregate principal amount of $505.0 million and used the proceeds to fund the WestEnd Acquisition of 100% of the equity interest of WestEnd and to pay fees and expenses incurred in connection therewith. The 2021 Incremental Term Loans will mature in December 2028 and will bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. Original issue discount was $2.5 million for the 2021 Incremental Term Loans. The Company incurred a total of $9.1 million of other third party costs related to the 2021 Incremental Term Loans, which were recorded as term loan debt issuance costs. Refer to Note 21, Subsequent Events, for information related to loan activity subsequent to December 31, 2021. The following table presents the components of long-term debt in the Consolidated Balance Sheets at December 31, 2021 and 2020. Effective (in thousands) 2021 2020 Interest Rate Term Loans Due July 2026, 2.73% interest rate $ — $ 788,239 3.17 % Due July 2026, 2.38% interest rate 646,239 — 2.77 % Due December 2028, 2.75% interest rate 505,000 — 3.09 % Term loan principal outstanding 1,151,239 788,239 Unamortized debt issuance costs (16,436 ) (12,065 ) Unamortized debt discount (6,879 ) (7,165 ) Long-term debt $ 1,127,924 $ 769,009 Debt issuance costs related to the 2019 Credit Agreement totaled $48.7 million and $39.6 million at December 31, 2021 and 2020, respectively, and are reflected net of accumulated amortization and loss on debt extinguishment of $32.3 million and $27.6 million, respectively. Debt issuance costs of $3.7 million at December 31, 2021 and 2020 related to the revolving credit facility are included in other assets in the Consolidated Balance Sheets and are reflected net of accumulated amortization and loss on debt extinguishment of $2.5 million and $2.0 million as of December 31, 2021 and 2020, respectively. Debt discount related to the Term Loans totaled $23.3 million and $20.7 million at December 31, 2021 and 2020, respectively, and is reflected net of accumulated amortization and loss on debt extinguishment of $16.4 million and $13.5 million, respectively. The following table presents the components of interest expense and other financing costs on the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019. (in thousands) 2021 2020 2019 Interest expense $ 17,250 $ 30,941 $ 36,423 Amortization of debt issuance costs 2,332 2,984 2,499 Amortization of debt discount 1,098 1,485 1,200 Interest rate swap expense 3,602 1,042 — Other 370 553 779 Total $ 24,652 $ 37,005 $ 40,901 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 12. Derivatives Interest Rate Swap On March 27, 2020, the Company entered into the Swap to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Company does not purchase or hold any derivative instruments for trading or speculative purposes. Under the terms of the Swap, the Company pays interest at a fixed rate of interest on a quarterly basis and receives interest at the three-month LIBOR rate in effect for that quarter. The notional value, fixed rate of interest and expiration date of the Swap as of December 31, 2021 were $450 million – 0.965% – July 1, 2026. Refer to Note 5, Fair Value Measurements, for additional disclosures regarding fair value measurements. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap is assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. For the year ended December 31, 2021 and since inception, the Swap was deemed to be highly effective. The Swap is designated as a cash flow hedge. Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive income (loss) (“AOCI(L)”), net of tax, to the extent the hedge is determined to be effective. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings. The amount payable to the Swap counterparty at December 31, 2021 and 2020 was $0.9 million and $0.8 million, respectively, and is recorded in other liabilities on the Consolidated Balance Sheets. The following tables summarize the classification of the Swap in our consolidated financial statements (in thousands): Balance Sheets Description December 31, 2021 December 31, 2020 Other assets (Other liabilities) Fair value of interest rate swap $ 7,774 $ (10,006 ) Notional amount 450,000 450,000 Twelve Months Ended December 31, Statements of Operations Description 2021 2020 2019 Interest expense and other financing costs Loss reclassified from AOCI(L) $ 3,602 $ 1,042 $ — Twelve Months Ended December 31, Statements of Comprehensive Income Description 2021 2020 2019 Other comprehensive income (loss) Income (loss) recognized in AOCI(L), net of tax $ 13,468 $ (7,573 ) $ — |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Equity Method Investment | NOTE 13. Equity Method Investment On September 20, 2020, the Company acquired, through a wholly owned subsidiary, a 15% interest voting share and income share in Alderwood and made a capital contribution to Alderwood of $1.5 million in cash. Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. The Company has commitments to contribute additional capital of $4.5 million to Alderwood and $50.0 million to a private fund to be launched by Alderwood, subject to certain terms and conditions, which include receipt of required regulatory approvals and obtaining an agreed amount of aggregate legally binding commitments from investors in the private fund. On March 8, 2021, the Company announced that Alderwood Capital had received authorization from the Financial Conduct Authority of the United Kingdom and that Alderwood’s private fund had been formally launched to institutional investors. The Company analyzed its investment in Alderwood under the voting interest model and determined that it does not have a controlling financial interest over Alderwood and should not consolidate under the voting interest model. Given the level of ownership interest in Alderwood, which is an English limited liability partnership, and the fact that Alderwood will maintain specific ownership accounts for investors, the Company accounts for its investment in Alderwood using the equity method of accounting. For the years ended December 31, 2021, 2020 and 2019, losses from equity method investments recorded in interest income and other income (expense) in the Consolidated Statements of Operations were $0.3 million, $0.2 million and $0.2 million, respectively. On August 30, 2019, the Company sold 100% of its equity investment in Cerebellum Capital LLC (“Cerebellum”) for $10.6 million in cash and recognized $2.9 million on the gain on sale, which was recorded in interest income and other income (expense) in the Consolidated Statements of Operations. Equity method investments are recorded in other assets in the Consolidated Balance Sheets. At December 31, 2021 and 2020, the Company held an equity investment in Alderwood of $1.1 million and $1.4 million, respectively. At December 31, 2019, the Company had no |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity | NOTE 14. Equity Equity Structure Following the Company’s IPO in February 2018, authorized capital stock consisted of 400,000,000 shares of Class A common stock, $0.01 par value per share, 200,000,000 shares of Class B common stock, $0.01 par value per share, and 10,000,000 shares of “blank check” preferred stock, $0.01 par value per share. The rights of the holders of Class A common stock and Class B common stock were identical, except voting and conversion rights. Each share of Class A common stock was entitled to one vote. Each share of Class B common stock was entitled to ten votes. Holders of the Company’s Class A common stock and Class B common stock would generally vote together as a single class, unless otherwise required by law or the Company’s amended and restated certificate of incorporation. Each share of Class B common stock was convertible into one share of the Company’s Class A common stock at any time, at the option of the holder, and would convert automatically upon termination of employment by an employee shareholder and upon transfers (subject to certain exceptions). Shares of Class B common stock would convert automatically into shares of Class A common stock at a one to one ratio upon the date the number of shares of Class B common stock then outstanding (including unvested restricted shares) was less than 10% of the aggregate number of shares of Class A common stock and Class B common stock outstanding (including unvested restricted shares). In September 2021, the Company’s Board of Directors approved the elimination of the Company’s dual-class share structure, which was subsequently approved by the Company’s stockholders on November 19, 2021. On November 23, 2021 (the “Effective Date”), the Company filed an amended and restated certificate of incorporation authorizing capital stock consisting of 600,000,000 shares of common stock, $0.01 par value per share (“Common Stock”) and 10,000,000 shares of “blank check” preferred stock, $0.01 par value per share. Each share of the Company’s Class A common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was renamed as Common Stock and became one share of Common Stock. For comparative purposes, we now refer to each share of stock that was previously known as Class A common stock as Common Stock. Each share of Class B common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was converted into Common Stock on a one-for-one basis. As a result, the Company currently has one class of common stock entitling the holder to one vote per share. No shares of preferred stock were issued as of December 31, 2021. Share Rollforward The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2018 15,281 55,284 (856) (2,147) Issuance of shares 4 — — — Conversion of Class B shares to Common Stock 2,815 (2,815) — — Repurchase of shares — — (829) — Vesting of restricted share grants — 522 — — Exercise of options — 946 — — Shares withheld related to net settlement of equity awards — — — (509) Balance, December 31, 2019 18,100 53,937 (1,685) (2,656) Issuance of shares 8 — — — Conversion of Class B shares to Common Stock 1,281 (1,281) — — Repurchase of shares — — (1,498) — Vesting of restricted share grants — 1,105 — — Exercise of options — 1,006 — — Shares withheld related to net settlement of equity awards — — — (775) Balance, December 31, 2020 19,389 54,767 (3,183) (3,431) Issuance of shares 7 — — — Conversion of Class B shares to Common Stock 6,632 (6,632) — — Repurchase of shares — — (886) — Vesting of restricted share grants 4 1,604 — — Exercise of options 91 1,380 — — Shares withheld related to net settlement of equity awards — — (49) (1,031) Elimination of Class B share class 51,119 (51,119 ) (4,462 ) 4,462 Balance, December 31, 2021 77,242 — (8,580) — Share Repurchase Program The share repurchase programs authorized in 2018, 2019, May 2020 and November 2020, each for $15.0 million of the Company’s Common Stock, were completed in September 2019, June 2020, October 2020 and May 2021, respectively. A fifth share repurchase program for $15.0 million of the Company’s Common Stock was authorized in May 2021 and was completed in January 2022. In December 2021, the Company’s Board of Directors authorized a sixth share repurchase program whereby repurchase up to an additional $15.0 million of the Company’s Common Stock In 2021, shares of Common Stock repurchased under programs authorized by the Company’s Board of Directors totaled 885,505 at a total cost of $26.2 million for an average price of $29.53 per share. In 2020, the Company repurchased 1,497,827 shares of Common Stock at a total cost of $26.3 million for an average price of $17.57 per share, while in 2019, the Company’s share repurchases totaled 828,880 shares of Common Stock at a total cost of $13.5 million and an average price of $16.26 per share. As of December 31, 2021, a cumulative total of 4,068,487 shares of Common Stock had been repurchased under programs authorized by the Company’s Board of Directors at a total cost of $74.0 million for an average price of $18.19 per share. As of December 31, 2021, $16.0 million was available for future repurchases under authorized share repurchase programs, $1.0 million under the May 2021 program and $15.0 million under the December 2021 program. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | NOTE 15. Share‑Based Compensation Equity Incentive Plans Prior to the Company’s IPO in 2018, equity-based awards were issued to executives, directors and key employees of the Company under the Victory Capital Holdings, Inc. Equity Incentive Plan (the “2013 Plan”) and the Outside Director Equity Incentive Plan (the “Director Plan”). In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the Victory Capital Holdings, Inc. 2018 Stock Incentive Plan (the “2018 Plan”), and the Victory Capital Holdings, Inc. 2018 Employee Stock Purchase Plan (the “ESPP Plan”), each of which became effective upon the completion of the IPO. No further grants will be made under the 2013 Plan. The 2018 Plan authorizes the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other awards that may be settled in or based upon shares of the Company’s Common Stock. A total of 3,372,484 shares of Common Stock is available for issuance under the 2018 Plan, as determined by the Compensation Committee of the Company’s board of directors. Shares underlying awards that are settled in cash, expire or are canceled, forfeited or otherwise terminated without delivery to a participant will again be available for issuance under the 2018 Plan. In addition, shares withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again be available for issuance under the 2018 Plan. As of December 31, 2021, 1,483,673 shares of Common Stock remained available for issuance under the 2018 Plan. The Compensation Committee of the Company’s board of directors approves the terms and conditions for offerings under the ESPP Plan. A total of 350,388 shares of Common Stock was available to issue under the ESPP Plan. As of December 31, 2021, 327,886 shares of Common Stock remained available for issuance under the ESPP Plan. The first ESPP Plan offering ran for eighteen months, from July 1, 2018 to December 31, 2019, and included three, six month offering periods. The second offering ran for twenty-four months from January 1, 2020 to December 31, 2021 and included four, six month offering periods. The third ESPP Plan offering will run from January 1, 2022 to December 31, 2022 and will include two six month offering periods. For all ESPP Plan offerings, shares of Common Stock are available for purchase at three month calendar intervals at a 5 percent discount from the market price on the purchase date, which is the last day of each calendar quarter during the offering. Amounts purchased by an individual cannot exceed $25,000 worth of stock in any given calendar year. The ESPP Plan is a non-compensatory plan and includes no option features other than employees may change their contributions or withdraw from the plan once during each six month offering period during a specified time approved by the Company. All U.S.-based employees are eligible to participate in the ESPP. All of the Company’s stock option awards are considered non‑qualified. Shares of common stock subject to stock option awards granted in 2019 vest based on service. Shares of common stock subject to stock option awards granted in years prior to 2019 vest based on a combination of service and satisfaction of various performance conditions. Grant Activity In 2021, the Company issued grants for 270,824 restricted shares of Common Stock under the 2018 Plan. The 2021 grants included grants for 34,770 restricted shares that were fully vested on the grant date, grants for 227,019 restricted shares that vest over three years and 9,035 restricted shares that vest over two years. No stock option awards were issued in 2021. In 2020, the Company issued grants for 795,487 restricted shares of Common Stock under the 2018 Plan, which included 42,848 restricted shares that were fully vested on the grant date, grants for 338,202 restricted shares that vest over three years and 414,437 restricted shares that vest over thirty months . No stock option awards were issued in 2020. In 2019, the Company issued grants for 1,196,820 restricted shares of Common Stock and stock option awards for 31,178 shares of Common Stock under the 2018 Plan. The 2019 grants included grants for 18,943 restricted shares that were fully vested on the grant date, grants for 1,144,589 restricted shares that vest over three years and 33,288 restricted shares that vest over five years. Stock option awards granted in 2019 vest based on service over a three year period. The following tables presents activity during the years ended December 31, 2021, 2020 and 2019 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2021 2020 2019 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 3.91 $ 6.50 6,865,101 $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 Granted — — — — — — 7.25 17.64 31,178 Forfeited 5.29 10.73 (79,271 ) 5.87 12.42 (8,949 ) 5.01 9.68 (274,774 ) Exercised 3.72 5.52 (1,470,620 ) 3.27 4.60 (1,006,117 ) 3.19 4.24 (946,289 ) Outstanding at end of the period $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 $ 3.83 $ 6.27 7,880,167 Vested $ 3.88 $ 6.53 5,072,585 $ 3.78 $ 6.10 6,259,420 $ 3.61 $ 5.59 6,724,030 Unvested 5.28 10.60 242,625 5.31 10.69 605,681 5.10 10.25 1,156,137 Total intrinsic value of stock options exercised in 2021, 2020, and 2019 was $39.5 million, $16.3 million and $12.8 million, respectively. Restricted Stock Awards For Year Ended December 31, 2021 2020 2019 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 14.99 2,827,008 $ 14.29 3,215,619 $ 13.17 2,997,856 Granted 27.29 270,824 16.70 795,487 16.27 1,196,820 Vested 14.62 (1,607,973 ) 14.39 (1,104,710 ) 12.83 (521,701 ) Forfeited 16.51 (137,020 ) 15.89 (79,388 ) 13.42 (457,356 ) Unvested at end of period $ 17.75 1,352,839 $ 14.99 2,827,008 $ 14.29 3,215,619 Share‑based compensation expense for equity awards is measured at the grant date, based on the estimated fair value of the award, and recognized over the requisite employee service period. Stock option awards have a ten year contractual life. The Company uses the Common Stock closing price on the grant date as the grant date fair value for restricted stock awards. For stock option awards, the grant date fair value is computed using Black-Scholes option pricing framework. The fair value of stock option awards granted in 2019 was determined using a $17.64 grant date stock price and exercise price, expected volatility of 40%, a risk free rate of 1.85% and a six year expected term. Expected volatility was based on a consideration of the average volatility of companies in the same or similar lines of business adjusted for differing levels of leverage and the Company’s volatility for the post-IPO period. The expected term was determined using the simplified method detailed in SEC Staff Accounting Bulletin No. 10. Dividend Payments In February 2017 and December 2017, the Company declared and paid dividends of $2.19 and $0.23 per share, respectively. Holders of restricted shares that were unvested at the time the February 2017 dividend were declared are paid this dividend when the restricted shares vest, and the strike price per share for all stock option awards granted prior to February 2017 was reduced by $2.19 under the anti-dilution provisions of the stock option grant agreements. Holders of restricted shares that were unvested at the time the December 2017 dividend was declared are paid the $0.23 per share dividend when the restricted stock vests. Holders of stock options that were unvested at the time the December 2017 dividend was declared receive a cash bonus equivalent of $0.23 per share when the stock options vest. In August 2019, the Company announced the initiation of quarterly cash dividends to be paid beginning in September 2019. Holders of restricted stock awards that are unvested at the time the quarterly dividends are declared are entitled to be paid these dividends as and when the restricted stock vests. As of December 31, 2021, 2020 and 2019, the amount of cash bonuses and distributions related to dividends previously declared on restricted shares and options expected to vest in the future totaled $1.0 million, $1.2 million and $1.3 million, respectively, which is not recorded as a liability as of the balance sheet date. A liability will be recorded for these cash bonuses and dividends when the restricted shares and options vest. Share-based Compensation Expense The Company recorded $17.6 million, $18.1 million and $16.3 million of share-based compensation expense related to the 2018 Plan and 2013 Plan in 2021, 2020 and 2019, respectively. Share-based compensation expense is recorded in personnel compensation and benefits in the Consolidated Statements of Operations. The related tax benefits were $4.3 million, $4.5 million, and $4.0 million for the fiscal years 2021, 2020, and 2019, respectively. As of December 31, 2021, the Company expects to recognize total share-based compensation expense of $14.1 million over a weighted average period of 1.0 years. The total fair value of restricted share awards vested during the years ended December 31, 2021, 2020, and 2019 was $45.2 million, $20.8 million, and $9.7 million respectively. The aggregate intrinsic value of stock options currently exercisable at December 31, 2021, 2020 and 2019 was $152.0 million, $117.1 million, and $103.4 million, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | NOTE 16. Commitments The Company leases office space and equipment under operating leases expiring at various dates. We have the right to renew or extend the leases under the agreements for certain non‑headquarter office spaces. Future calendar year minimum lease payments under the leases are as follows (in thousands): Gross Operating Net Operating Lease Commitments Sub-Leases Lease Commitments 2022 $ 5,304 $ 432 $ 4,872 2023 4,311 437 3,874 2024 3,295 454 2,841 2025 3,148 466 2,682 2026 3,185 477 2,708 Thereafter 2,776 20 2,756 Total $ 22,019 $ 2,286 $ 19,733 Rent expense for the years ended December 31, 2021, 2020 and 2019 was $6.5 million, $7.5 million, and $4.9 million, respectively, and is included in general and administrative expense in the Consolidated Statements of Operations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE 17. Employee Benefit Plans The Company maintains a defined contribution 401(k) Plan (the “401(k) Plan”), covering substantially all employees who have met the eligibility requirements. The 401(k) Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 and the Economic Growth and Tax Relief Reconciliation Act of 2001. In 2021, 2020 and 2019 the Company recognized expense of $4.0 million, $4.7 million and $3.3 million in employer matched contributions, respectively. The Company sponsors a deferred compensation plan for key investment professionals and executives (“Employee DC Plan”) as a means to reward and motivate them. The Company purchases mutual funds as directed by the plan participants to fund its related obligations. Such securities are held in a rabbi trust for the participants, and under the terms of the trust agreement, the assets of the trust are available to satisfy the claims of the Company’s general creditors in the event of bankruptcy. Effective January 1, 2020, the Company created a deferred compensation plan for non-employee members of our board of directors (the “Director DC Plan”). Benefits payable under the Director DC Plan are payable from the Company’s general assets. Amounts contributed under the Director DC Plan and earnings on those amounts are subject to the claims of the Company’s general creditors. Gains and losses from fluctuations in value of deferred compensation plan investments are included in interest income and other income (expense) in the Consolidated Statements of Operations and are offset entirely by the corresponding changes in value of the deferred compensation liability. Changes in the value of the Employee DC Plan and Director DC Plan liabilities are recorded in personnel compensation and benefits and general and administrative expense, respectively, in the Consolidated Statements of Operations. Investments held under both deferred compensation plans are recorded in deferred compensation plan investments in the Consolidated Balance Sheets. The following table presents the components of deferred compensation plan-related expense related to the Employee DC Plan. (in thousands) 2021 2020 2019 Employee contributions $ 2,231 $ 1,293 $ 2,202 Employer contributions 975 819 1,017 Change in value of deferred compensation plan liability 5,527 2,155 2,603 Total $ 8,733 $ 4,267 $ 5,822 Expenses related to the Director DC plan totaled $0.1 million and $0.2 million for the years ended December 31, 2021 and 2020, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 18. Earnings Per Share The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, (in thousands, except per share amounts) 2021 2020 2019 Net income $ 278,389 $ 212,522 $ 92,491 Shares: Basic weighted average common shares outstanding 67,976 67,710 67,616 Assumed conversion of dilutive instruments 6,175 6,009 5,850 Diluted weighted average common shares outstanding 74,151 73,719 73,466 Earnings per share Basic: $ 4.10 $ 3.14 $ 1.37 Diluted: $ 3.75 $ 2.88 $ 1.26 For the years ended December 31, 2021, 2020 and 2019, there were 4,558, 31,178 and 821,544 outstanding instruments, respectively, excluded from the above computations of weighted average shares for diluted earnings per share because the effects would be anti‑dilutive. Holders of non‑vested share‑based compensation awards do not have rights to receive nonforfeitable dividends on the shares covered by the awards. |
Net Capital Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2021 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements | NOTE 19. Net Capital Requirements VCS is subject to the SEC Uniform Net Capital Rule (Rule 15c3‑1 under the Exchange Act) administered by the SEC and FINRA, which requires the maintenance of minimum net capital, as defined, and requires that the ratio of aggregate indebtedness to net capital, cannot exceed 15 to 1. Net capital and the related net capital requirement may fluctuate on a daily basis. At December 31, 2021 and 2020, VCS had net capital under the Rule 15c3‑1 of $2.2 million which was $2.0 million in excess of its minimum required net capital of $0.2 million. The Company's ratio of aggregate indebtedness to net capital at December 31, 2021 and 2020 was 1.27 to 1 and 1.10 to 1, respectively. Capital requirements may limit the amount of cash available for dividend from VCS to the parent company. VCS's cash and cash equivalents are generally not available for corporate purposes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2021 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 20. Accumulated Other Comprehensive INCOME (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2021, 2020, and 2019. Investments in Cumulative Proprietary Cash Flow Translation (in thousands) Funds (a) Hedges (b) Adjustment Total Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 32 32 Tax impact — — (8 ) (8 ) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income — — 24 24 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 3 62 Balance, December 31, 2019 $ — $ — $ — $ — Other comprehensive income/(loss) before reclassification and tax — (11,047 ) 151 (10,896 ) Tax impact — 2,685 (38 ) 2,647 Reclassification adjustments, before tax — 1,042 — 1,042 Tax impact — (253 ) — (253 ) Net current period other comprehensive income/(loss) — (7,573 ) 113 (7,460 ) Balance, December 31, 2020 $ — $ (7,573 ) $ 113 $ (7,460 ) Other comprehensive income/(loss) before reclassification and tax — 14,177 (49 ) 14,128 Tax impact — (3,438 ) 13 (3,425 ) Reclassification adjustments, before tax — 3,602 — 3,602 Tax impact — (873 ) — (873 ) Net current period other comprehensive income/(loss) — 13,468 (36 ) 13,432 Balance, December 31, 2021 $ — $ 5,895 $ 77 $ 5,972 (a) Reclassifications out of AOCL related to investments in proprietary funds are recorded in interest income and other income (expense) (b) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 21. Subsequent Events On January 31, 2022, the Company signed the Alderwood Amendment and made an additional $1.5 million capital contribution to Alderwood. The Alderwood Amendment reduced the Company’s commitment to contribute additional capital to Alderwood from $4.5 million to $3.0 million . Refer to Note 13, Equity Method Investment, for further details Subsequent to December 31, 2021, the Company reduced outstanding debt on the 2021 Incremental Term Loans by $65.0 million. On February 10, 2022, our Board of Directors declared a quarterly cash dividend of $0.25 per share on Victory common stock. The dividend is payable on March 25, 2022, to stockholders of record on March 10, 2022. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company prepares its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). On November 19, 2021, the Company’s stockholders voted on and approved the Amendment eliminating the Company’s dual-class stock structure. Upon the filing of the Amendment on November 23, 2021, all the shares of Class B common stock were converted into an equal number of shares of Class A common stock and the Company’s Class A common stock was renamed as “Common Stock.” All references within this document to Class A common stock for periods prior to November 23, 2021 have been updated for the renaming. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the operations of the Company and its wholly‑owned subsidiaries, after elimination of all significant intercompany transactions and balances. Certain prior year amounts have been reclassified to conform to the current year presentation. The Company evaluates entities in which it invests and investment funds that it sponsors to determine whether the Company has a controlling financial interest in these entities and is required to consolidate them. A controlling financial interest generally exists if (i) the Company holds greater than 50% voting interest in entities controlled through voting interests or if (ii) the Company has the ability to direct significant activities of a fund not controlled through voting interests (a variable interest entity or VIE) and the obligation to absorb losses of and/or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s involvement with non‑consolidated sponsored investment funds that are considered VIEs include providing investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution services and other management services and/or holding a minority interest. At December 31, 2021 and 2020, the Company's investments in and maximum risk of loss related to unconsolidated sponsored VIE investment funds totaled $29.6 million and $22.9 million, respectively which are included in investments in proprietary funds and deferred compensation plan investments in the Consolidated Balance Sheets. The Company has not provided financial support to these entities outside the ordinary course of business, which includes assuming operating expenses of funds for competitive or contractual reasons through fee waivers and fund expense reimbursements. The Company does not consolidate the sponsored investment funds in which it has an equity investment as it holds a minority interest, does not direct significant activities of these funds and does not have the right to receive benefits nor the obligation to absorb losses that could potentially be significant to these funds. Upon the completion of the NEC Acquisition on November 1, 2021, VCM became the manager of certain general partner entities associated with the NEC Funds. The Company has no equity investment in these general partner entities, which are non-consolidated VIEs, nor in the NEC Funds and has no share of these general partner entities’ income or losses. On September 20, 2020, the Company acquired a 15% equity interest in Alderwood Partners LLP (“Alderwood”) and made a capital contribution of $1.5 million in cash. Alderwood’s operating entity, Alderwood Capital, is a London-based investment advisory firm focused on taking minority stakes in specialist boutique asset management businesses. The Company analyzed its investment in Alderwood under the voting interest model and determined that it would not consolidate Alderwood as it does not have a controlling financial interest. During 2019, the Company’s involvement The Company applies the equity method of accounting to investments where it does not hold a controlling equity interest, but has the ability to exercise significant influence over operating and financial matters. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, the investment is written down to its estimated fair value. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may ultimately differ from those estimates and the differences may be material. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption impacts our business, operations and financial results going forward will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; and the effect on our ability to sell and provide our services. |
Revenue Recognition | Revenue Recognition The Company a ccounts for revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The Company’s revenue includes fees earned from providing investment management services, fund administration services, fund compliance, fund transfer agent services and fund distribution services. Revenue is recognized for each distinct performance obligation identified in customer contracts when the performance obligation has been satisfied by transferring services to a customer either over time or at the point in time when the customer obtains control of the service. Revenue is recognized in the amount of variable or fixed consideration allocated to the satisfied performance obligation that Victory expects to be entitled to in exchange for transferring services to a customer. Variable consideration is included in the transaction price only when it is probable that a significant reversal of such revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For further information on the Company’s various streams of revenue, refer to Note 3, Revenue. |
Distribution and Other Asset Based Expenses | Distribution and Other Asset‑Based Expenses Distribution and other asset‑based expenses include (i) broker dealer distribution fees, (ii) platform distribution fees, (iii) sub‑administration, third party sub-transfer agent and sub‑advisory expenses. These expenses are accrued on a monthly basis and are generally calculated as a percentage of AUM and vary as levels of AUM change from inflows, outflows and market movement and with the number of days in the month. Also included in distribution and other asset‑based expenses are middle office expenses. Middle office expenses are accrued on a monthly basis and vary with changes in mutual fund, institutional and wrap separate account AUM levels, the number of accounts and volume of account transaction activity. |
Restructuring and Integration Costs | Restructuring and Integration Costs In connection with business combinations, asset purchases and changes in business strategy, the Company incurs costs integrating investment platforms, products and personnel into existing systems, processes and service provider arrangements and restructuring the business to capture operating expense synergies. These costs include severance ‑related expenses related to one ‑time benefit arrangements and contract termination costs. A liability for restructuring costs is recognized only after management has developed a formal plan to which it has committed. The costs included in the restructuring liability are those costs that are either incremental or incurred as a direct result of the plan, or are the result of a continuing contractual obligation with no continuing economic benefit to the Company, or a penalty incurred to cancel the contractual obligation. Severance expense is recorded when management has committed to a plan for a reduction in workforce, the plan has been communicated to employees and it is unlikely that there will be significant changes to the plan. Contract termination liabilities are recorded for contract termination costs when the Company terminates a contract or stops using the product or service covered by the contract. Contract termination liabilities are recognized and measured at fair value. Contract termination costs are recorded in restructuring and integration costs in the Consolidated Statements of Operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash at banks, money market accounts and funds and short‑term liquid investments with original maturities of three months or less at the time of purchase. For the Company and certain subsidiaries, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. |
Investments | Investments Investments in Proprietary Funds Investments in proprietary funds include investments in affiliated mutual funds and are recorded in investments in proprietary funds, at fair value in the Consolidated Balance Sheets. Changes in fair value are recognized in other income (expense) in the Consolidated Statements of Operations. The cost of securities sold is determined using the specific identification method. Dividend income is accrued on the declaration date and is included in other income in the Consolidated Statements of Operations. Transactions are recorded on a trade‑date basis. The Company periodically reviews each individual security that is in an unrealized loss position to determine if the impairment is other‑than‑temporary. Factors that are considered in determining whether other‑than‑temporary declines in value have occurred include the severity and duration of the unrealized loss and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses. Impairment charges are recorded in other income (expense) in the Consolidated Statements of Operations. No impairments were recognized as a result of such review in the years ended December 31, 2021, 2020 and 2019. Deferred Compensation Plan Investments Deferred compensation plan investments include investments in affiliated and third party mutual funds held in a rabbi trust under a deferred compensation plan. Deferred compensation plan investments are recorded at fair value in the Consolidated Balance Sheets. Changes in value in deferred compensation plan investments are recognized by the Company in other income (expense) in the Consolidated Statements of Operations. The Company's investments in proprietary funds and deferred compensation plan investments are valued through the use of quoted market prices available in an active market, which is the net asset value of the funds. |
Derivative Financial Instruments | Derivative Financial Instruments On March 27, 2020, the Company entered into an interest rate swap transaction (the “Swap”) to manage interest rate risk associated with a portion of its floating-rate long-term debt. The Company does not purchase or hold any derivative instruments for trading or speculative purposes. Under the terms of the Swap, the Company pays interest at a fixed rate of interest and receive interest that varies with the three-month LIBOR rate. The notional value, fixed rate of interest and expiration date of the Swap as of December 31, 2021 were $450 million – 0.965% – July 1, 2026. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how the Company reflects the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. The Swap is assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. For the year ended December 31, 202 1 and since inception, the Swap was deemed to be highly effective. The Swap is designated as a cash flow hedge. Accordingly, the Swap is measured at fair value with mark-to-market gains or losses deferred and included in accumulated other comprehensive loss (“AOCL”), net of tax, to the extent the hedge is determined to be effective. Gains or losses from the Swap are reclassified to interest expense in the same period during which the hedged transaction affects earnings. Refer to Note 12, Derivatives, for further information. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is computed using the straight‑line method over the estimated useful lives of the related assets, generally three to ten years |
Segment Reporting | Segment Reporting The Company operates in one business segment that provides investment management services and products to institutional, intermediary, retirement platforms and individual investors. Our determination that we had one operating segment is based on the fact that the Chief Operating Decision Maker reviews the Company's financial performance on an aggregate level. |
Goodwill | Goodwill Goodwill represents the excess cost of the acquisition over the fair value of net assets acquired in a business combination. For goodwill impairment testing purposes, the Company has determined that there is only one reporting unit. The Company tests goodwill for impairment on an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired. Factors that could trigger an impairment review include underperformance relative to historical or projected future operating results, significant changes in the Company's use of the acquired assets in a business combination or strategy for the Company's overall business, significant negative industry or economic trends and significant decreases in the Company’s market capitalization. The Company conducts the annual impairment assessment as of October 1 st |
Intangible Assets | Intangible Assets Intangible assets acquired in a business combination are initially recognized and measured at fair value. Intangible assets acquired by the Company outside of a business combination are initially recognized and measured based on the Company's cost to acquire the intangible assets. If a group of assets is acquired, the cost is allocated to individual assets based on their relative fair value. In valuing these assets, we make assumptions regarding useful lives and projected growth rates, and significant judgment is required. Definite‑lived intangible assets represent the value of acquired customer relationships in or with institutional separate accounts, collective funds, intermediary wrap separate account (wrap SMA), unified managed account/model (UMA) intermediaries and private funds. Definite‑lived intangible assets also include intellectual property, advisory contracts that do not have a sufficient history of annual renewal, definite-lived trade name assets, lease-related assets and non‑competition agreements. The Company amortizes definite‑lived identifiable intangible assets on a straight‑line basis over a period that is shorter than the asset's economic life as the pattern of economic benefit cannot be reliably determined. Management periodically evaluates the remaining useful lives and carrying values of the intangible assets to determine whether events and circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include a decline in the level of managed assets, changes to contractual provisions underlying certain intangible assets and reductions in underlying operating cash flows. Should there be an indication of a change in the useful life or impairment in value of the definite‑lived intangible assets, we compare the carrying value of the asset to the projected undiscounted cash flows expected to be generated from the underlying asset over its remaining useful life to determine whether impairment has occurred. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. The Company writes off the cost and accumulated amortization balances for all fully amortized intangible assets. Indefinite‑lived intangible assets include trade names and contracts for fund advisory, distribution and transfer agent services where the Company expects to, and has the ability to continue to manage these funds indefinitely, the contracts have annual renewal provisions, and there is a high likelihood of continued renewal based on historical experience. Trade names are considered indefinite‑lived intangible assets when they are expected to generate cash flows indefinitely. Indefinite‑lived intangible assets are reviewed for impairment annually as of October 1 st Indefinite-lived intangible assets are combined into a single unit of accounting for purposes of testing impairment if they operate as a single asset and represent as a group the highest and best use of the assets. If the qualitative approach indicates that it is more likely than not that an indefinite-lived intangible asset is impaired, the Company estimates the fair value of the indefinite‑lived intangible asset and compares it to the book value of the asset to determine whether an impairment charge is necessary. Impairment is indicated when the carrying value of the intangible asset exceeds its fair value. |
Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable | Investment Management Fees Receivable and Fund Administration and Distribution Fees Receivable Investment management fees receivable include investment management fees due from the Victory Funds, USAA Funds, VictoryShares and other pooled funds sponsored by Victory and investment management fees due from non-affiliated parties. Fund administration and distribution fees receivable include administration, compliance and distribution fees due from the Victory Funds, USAA Funds and VictoryShares and transfer agent fees due from the USAA Funds and sub-transfer agent fees due from the Victory Funds. Provision for credit losses on these receivables is made in amounts required to maintain an adequate allowance to cover anticipated losses. All investment management fees receivable and fund administration and distribution fees receivable were determined to be collectible as of December 31, 2021, 2020 and 2019, and accordingly, no reserve for credit losses and no provision for credit losses were recognized as of and for the years ended December 31, 2021, 2020 and 2019. |
Other Receivables | Other Receivables Other receivables primarily include income and other taxes receivable and were determined to be collectible as of December 31, 2021, 2020 and 2019. |
Share Based Compensation Arrangements | Share‑Based Compensation Arrangements Compensation expense related to share‑based payments is measured at the grant date based on the fair value of the award. The fair value of each option granted is estimated using the Black‑Scholes option valuation model. The Black‑Scholes option valuation model incorporates assumptions as to dividend yield, expected volatility, an appropriate risk‑free interest rate and the expected life of the option. The fair value of restricted share awards with service based vesting conditions and performance based vesting conditions is based on the market price of our stock on the date of grant. The fair value of restricted share awards subject to market conditions is estimated based on a probability-weighted expected value analysis. Compensation expense is recognized on a straight‑line basis over the total vesting period of the award for the service portion of restricted share awards and stock option awards. Compensation expense is recognized on an accelerated basis over the derived service period for awards that vest based on market conditions and on an accelerated basis over the requisite service period for awards with performance conditions if it is probable that the performance conditions will be satisfied. Compensation expense is adjusted for actual forfeitures in the period the forfeiture occurs. The corresponding credit for restricted share and stock option compensation expense is recorded to additional paid in capital. When changes are made to the terms of an equity award that result in a change in the fair value of the equity award immediately before and after the change, the Company applies modification accounting, treating the change as an exchange of the original award for a new award. The calculation of the incremental value associated with the modified award is based on the excess of the fair value of the modified award over the fair value of the original award measured immediately before its terms are modified. |
Earnings Per Share | Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s Common Stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s Common Stock. The Company had vested and unvested stock options and unvested restricted stock grants outstanding during the periods presented and applies the treasury stock method to these securities in its calculation of diluted earnings per share. The treasury stock method assumes that the proceeds of exercise are used to purchase common stock at the average market price for the period. The Company does not have any participating securities that would require the use of the two‑class method of computing earnings per share. |
Deferred Financing Fees | Deferred Financing Fees The costs of obtaining term loan financing are capitalized in long‑term debt in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations over the term of the respective financing using the effective interest method. The costs of obtaining revolving line of credit financing are capitalized in other assets in the Consolidated Balance Sheets and amortized to interest expense and other financing costs in the Consolidated Statements of Operations on a straight‑line basis over the term of the facility. The Company expenses the portion of unamortized debt financing costs associated with paydowns of principal in excess of required loan amortization payments. Management considers this debt to be partially settled. Deferred financing costs expensed due to partial settlements of debt are recorded in loss on debt extinguishment in the Consolidated Statements of Operations. |
Debt Modification | Debt Modification Gains and losses on debt modifications that are considered extinguishments are recognized in current earnings. Debt modifications that are not considered extinguishments are accounted for prospectively through yield adjustments, based on the revised terms. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred and generally are included in general and administrative expense in the Consolidated Statements of Operations. The Company expensed $0.4 million, $0.9 million and $4.4 million in costs related to debt modifications in 2021, 2020 and 2019. The analysis as to whether a modification of debt is an extinguishment or modification is performed on a creditor‑by‑creditor basis. Refer to Note 11, Debt, for further information on debt refinancings and modifications. |
Leases | Leases The Company currently leases office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Lease agreements that are classified as operating leases may contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight‑line basis over the lease term commencing when we obtain the right to control the use of the leased property. Rent expense is included in general and administrative expense in the Consolidated Statements of Operations. |
Treasury Stock | Treasury Stock Acquisitions of treasury stock are recorded at cost. Treasury stock held is reported as a deduction from stockholders' equity in the Consolidated Balance Sheets. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a specific‑identification basis. Additional paid‑in capital from treasury stock transactions is increased as the Company reissues treasury stock for more than the cost of the shares. If the Company issues treasury stock for less than its cost, additional paid‑in capital from treasury stock transactions is reduced to no less than zero. Once this account is at zero, any further required reductions are recorded to retained earnings in the Consolidated Balance Sheets. |
Foreign Currency Transactions | Foreign Currency Transactions The financial statements of the Company’s subsidiaries which operate outside of the United States (U.S.) are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in other comprehensive income (loss), which were immaterial in amount at December 31, 2021, 2020 and 2019. Transactions denominated in currencies other than the functional currency are recorded using the exchange rate on the date of the transaction. Exchange differences arising on the settlement of financial assets and liabilities are recorded in other income (expense) in the C onsolidated S tatements of O perations. Foreign exchange gains and losses for the years ended December 31, 202 1 , 20 20 and 201 9 were immaterial. |
Income Taxes | Income Taxes Income taxes are accounted for using the assets and liability method as required by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax liabilities are generally attributable to indefinite‑lived intangible assets, depreciation and debt issuance costs. Deferred tax assets are generally attributable to definite‑lived intangible assets, goodwill, stock compensation, deferred compensation and acquisition-related costs. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses whether a valuation allowance should be established against its deferred income tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. The assessment considers, among other matters, recent operating results, forecasts of future profitability, the duration of statutory carry back and carry forward periods and the Company's experience with tax attributes expiring unused. Changes in circumstances could cause the Company to revalue its deferred tax balances with the resulting change impacting the Consolidated Statements of Operations in the period of the change. The Company records income tax liabilities pursuant to ASC 740, Income Taxes, which prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de‑recognition, classification of interest and penalties, accounting in interim periods, disclosure and transition. For tax positions meeting a "more‑likely‑than‑not" threshold, the amount recognized in the financial statements is the largest amount of benefit greater than 50% likely of being sustained. The more‑likely‑than‑not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The Company's accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as income taxes. |
Loss Contingencies | Loss Contingencies The Company continuously reviews investor, client, employee or vendor complaints and pending or threatened litigation. The Company evaluates the likelihood that a loss contingency exists under the criteria of applicable accounting standards through consultation with legal counsel and records a loss contingency, inclusive of legal costs, if the contingency is probable and reasonably estimable at the date of the financial statements. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting and allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values are determined in accordance with the guidance in ASC 820, Fair Value Measurement, based on valuations performed by the Company and independent valuation specialists. |
Asset Acquisitions | Asset Acquisitions When a group of assets is acquired that does constitute a business, the Company accounts for the transaction as an asset acquisition. The cost of the acquisition, which includes transaction costs directly related to the transaction and consideration paid, is allocated on a relative fair value basis to the net assets acquired. |
Contingent and Deferred Payment Arrangements | Contingent and Deferred Payment Arrangements The Company periodically enters into contingent and/or deferred payment arrangements in connection with its business combinations. Liabilities under contingent and deferred payment arrangements are recorded in consideration payable for acquisition of business in the C onsolidated B alance S heets. In contingent payment arrangements, the Company agrees to pay additional consideration to the sellers based on future performance, such as future net revenue levels. The Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in the C onsolidated B alance S heet s at estimated fair value. In deferred payment arrangements, the Company records a liability in the C onsolidated Ba lance S heet s at the time a business combination is consummated for the present value, which is the estimated fair value, of the future fixed dollar contractual payments. Contingent payment obligations are remeasured at fair value each reporting date taking into consideration changes in expected payments, and the change in fair value is recorded in the current period as a gain or loss. Gains and losses resulting from changes in the fair value of contingent payment obligations are reflected in change in value of consideration payable for acquisition of business in the Consolidated Statements of Operations. The Company accretes obligations under deferred payment arrangements to their expected payment amounts over the period covered by the arrangement. Accretion expense related to deferred payment obligations is reflected in interest expense and other financing costs in the Consolidated Statements of Operations and totaled $0.2 million in 2019 ($0 in 2021 and 2020). |
Compensatory Payment Arrangements | Compensatory Payment Arrangements In connection with business combinations, the Company evaluates whether any portion of the transaction consideration is in exchange for elements other than the acquired business and should be accounted for as a separate transaction apart from the business combination. If based on the substance of the contingent payment arrangement, the Company determines that the payments are compensation for post-acquisition employee services, the Company considers this a compensatory payment arrangement and no liability is recorded for the payments on the acquisition date. The related expense, which is the total amount of compensation management estimates will be paid, is accrued on a straight-line basis over the estimated service period, which is the time period when management determines that it is probable that the performance conditions will be achieved. At each reporting date, cumulative expense recognized under the compensatory payment arrangement will be at least equal to the cumulative dollar amount actually paid out and currently payable under the terms of the related purchase agreement. If there is a significant change in the estimated service period and/or estimated total compensation amount, management adjusts the amount of expense recorded on a prospective basis. Expense recognized under compensatory payment arrangements is recorded in personnel compensation and benefits in the Consolidated Statements of Operations and the related liability is included in other liabilities in the Consolidated Balance Sheets. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in 2021 • Internal-Use Software: In August 2018, the FASB issued ASU 2018-15 (“ASU 2018-15”), "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard was effective for interim and annual reporting periods beginning after December 15, 2019 for public companies and can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted the new guidance on January 1, 2021 and elected to adopt ASU 2018-15 on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial statements. • Subsequent Measurement of Goodwill: In January 2017, the FASB issued ASU 2017-04 (“ASU 2017-04”), “Intangibles – Goodwill and Other (Topic 350)” which simplifies the test for goodwill impairment. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (step two) to measure a goodwill impairment charge. Goodwill impairment will be based upon the results of step one of the impairment test, which is defined as the excess of the carrying amount of a reporting unit over its fair value, not to exceed the carrying amount of goodwill allocated to that reporting unit. The effective date for calendar-year public business entities was January 1, 2020. The new guidance was effective for the Company’s fiscal year that began on January 1, 2021 and required a prospective approach to adoption. The impact of this new guidance will depend upon the performance of our one reporting unit and the market conditions impacting the fair value. There was no impact on the Company’s consolidated financial statements in 2021. Recently Issued Accounting Standards • Reference Rate Reform: In March 2020, the FASB issued ASU 2020-04, (“ASU 2020-04”), “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 contains optional practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this guidance are effective for all entities through December 31, 2022. The Company is currently evaluating the effect of this new standard on its consolidated financial statements. • Expected Credit Losses: In June 2016, the FASB issued ASU 2016-13 (“ASU 2016-13”), “Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 creates a new model for determining current expected credit losses (“CECL”) on trade and other receivables, net investments in leases, contract assets and long-term receivables. The CECL impairment model requires companies to consider the risk of loss even if it is remote and to include forecasts of future economic conditions as well as information about past events and current conditions. The effective date for calendar-year public business entities was January 1, 2020. In November 2019, the FASB deferred the effective date for ASU 2016-13 for private companies and other companies who had not yet been required to adopt the standard. As a result of the Company’s EGC status, the Company will adopt ASU 2016-13 on January 1, 2023. The Company is currently reviewing the effect of this new standard on its consolidated financial statements. • Leases: In February 2016, the FASB issued ASU 2016‑02, “Leases (Topic 842)” (the “New Lease Standard”) which supersedes previous lease guidance, Accounting Standards Codification (“ASC”) Topic 840. The New Lease Standard requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) on their balance sheet at the commencement date and recognize expenses on their income statement similar to ASC Topic 840 guidance. In addition, the FASB issued ASU 2018-11, “Leases Targeted Improvements” which provides a package of practical expedients for entities to apply upon adoption. The effective date for calendar-year public business entities was January 1, 2019. In June 2020, the FASB deferred the effective date of the New Lease Standard for private companies and other companies who had not yet been required to adopt the standard. Due to the Company’s EGC status, the New Lease Standard will be adopted on January 1, 2022. The Company will adopt Topic 842 using the simplified transition method approach and apply the provision at January 1, 2022. In addition, the Company will utilize the package of three practical expedients as well as the practical expedient of not separating lease and non-lease components, the practical expedient of not applying Topic 842 to short-term leases and the hindsight practical expedient. The Company organized a team that assessed and evaluated the Company’s portfolio of active real estate leases and utilized a software that provides for a comprehensive solution for managing leased, owned and subleased properties. As of January 1, 2022, the Company has approximately $18 million in discounted, future minimum cash commitments under operating leases. The New Lease Standard will result in a gross up of assets and liabilities on the Consolidated Balance Sheets and have no material impact on the Consolidated Statements of Operations or the Company’s liquidity or debt covenant compliance under the current credit agreement. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Type and Product | In accordance with revenue recognition standard requirements, the following table disaggregates our revenue by type and product: Year Ended December 31, (in thousands) 2021 2020 2019 Investment management fees Mutual funds (Victory/USAA Funds) $ 536,902 $ 455,715 $ 355,969 ETFs (VictoryShares) 16,517 11,604 10,422 Separate accounts and other vehicles 125,417 99,125 99,726 Performance-based fees Mutual funds (USAA Funds) (5,839 ) (4,771 ) — Separate accounts and other vehicles 1,542 363 685 Total investment management fees $ 674,539 $ 562,036 $ 466,802 Fund administration and distribution fees Administration fees Mutual funds (Victory/USAA Funds) $ 120,414 $ 112,279 $ 71,131 ETFs (VictoryShares) 1,887 1,460 1,317 Distribution fees Mutual funds (Victory/USAA Funds) 28,939 25,599 30,356 Transfer agent fees Mutual funds (USAA Funds) 64,486 73,977 42,767 Total fund administration and distribution fees $ 215,726 $ 213,315 $ 145,571 Total revenue $ 890,265 $ 775,351 $ 612,373 |
Schedule of Balances of Receivables from Contracts with Customers | The following table presents balances of receivables: (in thousands) December 31, 2021 December 31, 2020 Customer receivables Mutual funds (Victory/USAA Funds) $ 65,304 $ 60,868 ETFs (VictoryShares) 1,934 1,419 Separate accounts and other vehicles 30,519 22,641 Receivables from contracts with customers 97,757 84,928 Non-customer receivables 6,548 3,254 Total receivables $ 104,305 $ 88,182 Investment management fees receivable $ 80,634 $ 67,957 Fund administration and distribution fees receivable 17,123 16,971 Other receivables 6,548 3,254 Total receivables $ 104,305 $ 88,182 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisitions | |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2021 and 2020 and the acquisition date are as follows and are approximate values: December 31, 2021 December 31, 2020 July 1, 2019 Acquisition Date Non-managed money revenue average annual growth rate 5 % 3 % 3 % Market price of risk (continuous) 6 % 7 % 4 % Revenue volatility 17 % 16 % 20 % Discount rate 3 % 3 % 7 % Years remaining in earn out period 1.9 2.9 4.3 Undiscounted estimated remaining earn out payments $ millions $72 - $75 $98 - $113 $119 - $150 |
Summary of Revenue Subsequent to Acquisition | Revenue of the USAA Acquired Companies subsequent to the effective closing date of July 1, 2019 for the six months ended December 31, 2019 and the six months ended June 30, 2020, was as follows: Unaudited Unaudited Six Months Ended Six Months Ended (in millions) June 30, 2020 December 31, 2019 Revenue $ 221.3 $ 244.5 |
Summary of Unaudited Pro Forma Information | Unaudited Twelve Months Ended December 31, (in thousands, except per share amount) 2019 2018 Revenue $ 851,440 $ 906,844 Net income 114,988 71,471 Earnings per share of common stock Basic $ 1.70 $ 1.08 Diluted $ 1.56 $ 1.01 Weighted average number of shares outstanding Basic 67,693 66,295 Diluted 73,612 70,511 |
Summary of Business Acquisition Related Cost | Costs related to acquisitions were expensed in 2021, 2020 and 2019 and are included in acquisition‑related costs in the Consolidated Statements of Operations. Acquisition-related costs (in thousands) 2021 2020 2019 USAA AMCO $ 5,534 $ 426 $ 21,333 NEC 2,605 - - WestEnd 8,102 - - Other 21 682 984 Total acquisition-related costs $ 16,262 $ 1,108 $ 22,317 |
Summary of Rollforward of Restructuring and Integration Liabilities | The following table presents a rollforward of restructuring and integration liabilities: (in millions) 2021 2020 2019 Liability balance, beginning of period $ 1.0 $ 3.0 $ 0.1 Severance expense USAA AMCO Acquisition 1.4 1.2 6.2 THB 0.2 — — Other 0.2 — — Contract termination expense USAA AMCO Acquisition — 0.1 0.2 Integration costs USAA AMCO Acquisition 0.5 6.5 2.3 THB 0.3 Restructuring and integration costs 2.6 7.8 8.7 Settlement of liabilities (3.3 ) (9.8 ) (5.8 ) Liability balance, end of period $ 0.3 $ 1.0 $ 3.0 Accrued expenses $ 0.3 $ 1.0 $ 2.9 Other liabilities — — 0.1 Liability balance, end of period $ 0.3 $ 1.0 $ 3.0 |
USAA AMCO | |
Acquisitions | |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 17,473 Investment management fees receivable 25,353 Fund administration and distribution fees receivable 4,779 Other receivables and prepaid expenses 299 Property and equipment 1,165 Other intangible assets ( 1) 808,670 Goodwill 120,643 Accounts payable and accrued expenses (5,575 ) Accrued compensation and benefits (5,907 ) Payable to members and custodians (17,473 ) Purchase price $ 949,427 (1) Includes $750.2 million for indefinite-lived investment advisory contracts, $19.1 million for indefinite-lived transfer agent contracts, $0.8 million for indefinite-lived distribution contracts, $38.2 million for definite-lived trade name assets and $0.4 million for definite-lived lease-related assets, all of which are recorded in other intangible assets, net on the Consolidated Balance Sheets. |
NEC Acquisition | |
Acquisitions | |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 118 Other receivables and prepaid expenses 60 Property and equipment 19 Other intangible assets (1) 23,700 Goodwill 41,032 Accounts payable and accrued expenses (2,096 ) Purchase price, net of cash acquired $ 62,833 (1) Includes $14.0 million for definite-lived customer relationships with a 6 year estimated useful life and $9.7 million for definite-lived investment advisory contracts with a 2 year estimated useful life, which are recorded in other intangible assets, net on the Consolidated Balance Sheets. |
WestEnd Acquisition | |
Acquisitions | |
Summary of Allocation of Purchase Price | The following table presents the estimated amounts of assets acquired and liabilities assumed as of the acquisition date, net of cash acquired: (in thousands) Investment management fees receivable $ 4,560 Prepaid expenses and other assets 256 Property and equipment 2,011 Other intangible assets (1) 175,500 Goodwill 536,023 Accounts payable and accrued expenses (115 ) Accrued compensation and benefits (1,480 ) Other liabilities (693 ) Purchase price, net of cash acquired $ 716,062 (1) Includes $172.5 million for definite-lived customer relationship assets with a 10 year estimated useful life and $3.0 million for a definite-lived trade name asset with a 7 year estimated useful life, which are recorded in other intangible assets, net on the Consolidated Balance Sheets. |
Summary of Significant Inputs to Valuation of Contingent Consideration Payable | A maximum of $320.0 million ($80.0 million per year) is payable to sellers in contingent payments. The fair value of contingent consideration payable to sellers was estimated at $239.7 million as of the acquisition date. Significant inputs to the valuation of contingent consideration payable to sellers as of December 31, 2021 are as follows and are approximate values: December 31, 2021 Acquisition Date Net revenue average annual growth rate 37 % Market price of risk adjustment for revenue (continuous) 11 % Revenue volatility 21 % Discount rate 4 % Years remaining in earn out period 5.8 Undiscounted estimated remaining earn out payments $ millions $277 - $320 |
Summary of Unaudited Pro Forma Information | Unaudited Year Ended December 31, (in thousands, except per share amount) 2021 2020 Revenue $ 936,609 $ 798,401 Net income 280,980 177,637 Earnings per share of common stock Basic $ 4.13 $ 2.62 Diluted $ 3.79 $ 2.41 Weighted average number of shares outstanding Basic 67,976 67,710 Diluted 74,151 73,719 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Measured at Fair Value on Recurring Basis | The following table presents assets and liabilities measured at fair value on a recurring basis: As of December 31, 2021 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Investments in proprietary funds $ 912 $ 912 $ — $ — Deferred compensation plan investments 30,812 30,812 — — Interest rate swap asset 7,774 — 7,774 — Total financial assets $ 39,498 $ 31,724 $ 7,774 $ — Financial liabilities Contingent consideration arrangements (308,500 ) — — (308,500 ) Total financial liabilities $ (308,500 ) $ — $ — $ (308,500 ) As of December 31, 2020 (in thousands) Total Level 1 Level 2 Level 3 Financial assets Money market fund $ 10,088 $ 10,088 $ — $ — Investments in proprietary funds 922 922 — — Deferred compensation plan investments 22,571 22,571 — — Total financial assets $ 33,581 $ 33,581 $ — $ — Financial liabilities Interest rate swap liability $ (10,006 ) $ — $ (10,006 ) $ — Contingent consideration arrangements (92,500 ) — - (92,500 ) Total financial liabilities $ (102,506 ) $ — $ (10,006 ) $ (92,500 ) (1) |
Summary of Contingent Consideration Arrangement Liabilities | The following table presents the balance of the contingent consideration arrangement liabilities at December 31, 2021, 2020 and 2019, respectively. (in thousands) Contingent Consideration Liabilities Balance, December 31, 2019 $ 118,700 USAA AMCO first annual earn-out payment (37,500 ) USAA AMCO change in fair value measurement 11,300 Balance, December 31, 2020 $ 92,500 USAA AMCO second annual earn-out payment (37,500 ) USAA AMCO change in fair value measurement 13,800 WestEnd acquisition date contingent consideration liability 239,700 Balance, December 31, 2021 $ 308,500 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Summary of Related-Party Transactions | (in thousands) 2021 2020 Related party assets Cash and cash equivalents $ — $ 10,088 Receivables (investment management fees) 53,256 46,958 Receivables (fund administration and distribution fees) 17,123 16,971 Prepaid expenses 304 Investments (investments in proprietary funds, fair value) 912 922 Investments (deferred compensation plan investments, fair value) 28,643 22,062 Total $ 100,238 $ 97,001 Related party liabilities Accounts payable and accrued expenses (fund reimbursements) $ 6,695 $ 5,978 Total $ 6,695 $ 5,978 Year ended December 31, (in thousands) 2021 2020 2019 Related party revenue Investment management fees $ 566,775 $ 471,153 $ 371,807 Fund administration and distribution fees 215,726 213,315 145,571 Total $ 782,501 $ 684,468 $ 517,378 Related party expense General and administrative 521 702 — Total $ 521 $ 702 $ — Related party other income (expense) Interest income (expense) and other income (expense) $ 5,470 $ 2,337 $ 2,692 Total $ 5,470 $ 2,337 $ 2,692 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Proprietary Funds | |
Gain (Loss) on Securities [Line Items] | |
Debt Securities, Available-for-sale [Table Text Block] | The following table presents a summary of the cost and fair value of investments in proprietary funds: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2021 $ 769 $ 169 $ (26 ) $ 912 As of December 31, 2020 758 164 — 922 |
Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized | The following table presents proceeds from sales of investments in proprietary funds and realized gains and losses recognized during the years ended December 31, 2021, 2020 and 2019: Sale Realized (in thousands) Proceeds Gains (Losses) For the year ending December 31, 2021 $ 215 $ 50 $ — For the year ending December 31, 2020 507 31 (13 ) For the year ending December 31, 2019 158 6 — |
Deferred Compensation Plan Investments | |
Gain (Loss) on Securities [Line Items] | |
Summary of Cost and Fair Value of Deferred Compensation Plan Investments | The following table presents a summary of the cost and fair value of deferred compensation plan investments: Gross Unrealized Fair (in thousands) Cost Gains (Losses) Value As of December 31, 2021 $ 27,174 $ 4,266 $ (628 ) $ 30,812 As of December 31, 2020 21,205 1,725 (359 ) 22,571 |
Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized | The following table presents proceeds from sales of deferred compensation plan investments and realized gains and losses recognized during the years ended December 31, 2021, 2020 and 2019: Sale Realized Proceeds Gains (Losses) For the year ending December 31, 2021 $ 9,662 $ 1,315 $ (59 ) For the year ending December 31, 2020 4,063 130 (309 ) For the year ending December 31, 2019 2,749 22 (71 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | The following table presents property and equipment as of December 31, 2021 and 2020: As of December 31, (in thousands) 2021 2020 Equipment, purchased software and implementation costs $ 31,503 $ 21,710 Leasehold improvements 4,488 3,155 Furniture and fixtures 3,072 2,743 Total 39,063 27,608 Accumulated depreciation and amortization (13,768 ) (8,861 ) Total property and equipment, net $ 25,295 $ 18,747 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table presents changes in the goodwill balance from December 31, 2020 to December 31, 2021: As of December 31, (in thousands) 2021 2020 Balance, beginning of period $ 404,750 $ 404,750 Goodwill recorded in NEC Acquisition 41,032 — Goodwill recorded in WestEnd Acquisition 536,023 — Balance, end of period $ 981,805 $ 404,750 |
Summary of Definite Lived Intangible Assets | The following table presents a summary of definite‑lived intangible assets by type: Fund Intellectual Customer Advisory Trade Property/ (in thousands) Relationships Contracts Names Other Totals Gross book value - December 31, 2020 $ 123,200 $ 2,368 $ 39,332 $ 7,547 $ 172,447 Accumulated amortization (121,497 ) (2,368 ) (15,406 ) (7,235 ) (146,506 ) Net book value - December 31, 2020 $ 1,703 $ — $ 23,926 $ 312 $ 25,941 Weighted average useful life (yrs) 0.1 — 2.2 0.1 2.4 Gross book value - December 31, 2021 $ 310,286 $ 12,068 $ 42,332 $ 7,547 $ 372,233 Accumulated amortization (123,752 ) (3,176 ) (24,921 ) (7,287 ) (159,136 ) Net book value - December 31, 2021 $ 186,534 $ 8,892 $ 17,411 $ 260 $ 213,097 Weighted average useful life (yrs) 9.4 1.8 1.8 5.0 6.2 |
Summary of Estimated Amortization Expense for Definite Lived Intangible Assets | The following table presents estimated amortization expense for definite‑lived intangible assets for each of the five succeeding years and thereafter: 2022 $ 34,625 2023 29,104 2024 20,187 2025 20,064 2026 20,063 Thereafter 89,054 Total $ 213,097 |
Schedule of Indefinite-lived Intangible Assets by Type | The following table presents a summary of indefinite‑lived intangible assets by type: Fund Advisory, Transfer Agent and Distribution Trade (in thousands) Contracts Names Totals December 31, 2019 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2020 balance $ 1,113,000 $ 23,700 $ 1,136,700 Additions or transfers — — — December 31, 2021 balance $ 1,113,000 $ 23,700 $ 1,136,700 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The following table presents the provision for income taxes for the years ended December 31, 2021, 2020 and 2019: (in thousands) 2021 2020 2019 Current tax expense (benefit): Federal $ 42,845 $ 24,048 $ 22,234 State 9,929 7,263 6,656 Foreign (9 ) 108 52 Total current tax expense (benefit) 52,765 31,419 28,942 Deferred tax expense (benefit): Federal 15,716 27,793 (449 ) State 3,742 6,860 (289 ) Foreign 30 (54 ) (7 ) Total deferred tax expense (benefit) 19,488 34,599 (745 ) Income tax expense $ 72,253 $ 66,018 $ 28,197 |
Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest And Penalties | The following table presents the changes in gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2021, 2020 and 2019. (in thousands) 2021 2020 2019 Beginning balance $ - $ 2,582 $ - Additions for tax positions of prior years - - 1,703 Additions based on tax positions related to current year - - 879 Reductions related to settlement of tax matters - (2,582 ) - Ending balance $ - $ - $ 2,582 |
Summary of Effective Tax Rate | The effective tax rate for the years ended December 31, 2021 and 2020 differs from the United States federal statutory rate primarily as a result of state and local income taxes and excess tax benefits on share-based compensation, and for 2019, expense related to recording the uncertain tax position (“UTP”) liability for unrecognized tax benefits. The following table presents the tax rates for the years ended December 31, 2021, 2020 and 2019. 2021 2020 2019 Federal income tax at U.S. statutory rate 21.0 % 21.0 % 21.0 % State income tax rate, net of federal tax benefit 3.2 % 3.8 % 3.3 % UTP liability — % — % 1.9 % Excess tax benefits on share-based compensation (3.4 ) % (1.4 ) % (2.8 ) % Foreign taxes and other (0.2 ) % 0.3 % — % Income tax expense 20.6 % 23.7 % 23.4 % |
Summary of Components of Deferred Income Tax Assets and Liabilities | The following table presents the components of deferred income tax assets and deferred tax liabilities at December 31, 2021 and 2020: (in thousands) 2021 2020 Deferred tax assets: Definite-lived intangibles $ 21,373 $ 21,455 Share-based compensation expense 7,988 10,318 Acquisition-related costs 5,110 4,194 Deferred compensation 7,909 5,621 Restructuring expenses 1,431 1,616 Contingent consideration arrangements 383 431 Goodwill 11,443 7,454 OCI - Swap liability and cumulative translation adjustment — 2,432 Other 54 83 Total deferred tax assets 55,691 53,604 Deferred tax liabilities: Indefinite-lived intangibles 106,230 81,429 Debt issuance costs 4,087 5,085 Depreciation 5,444 4,216 OCI - Swap liability and cumulative translation adjustment 1,878 — Prepaid expenses 271 220 Unrealized gain on deferred compensation investments 901 338 Total deferred tax liabilities 118,811 91,288 Net deferred tax liability $ (63,120 ) $ (37,684 ) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Long-Term Debt | The following table presents the components of long-term debt in the Consolidated Balance Sheets at December 31, 2021 and 2020. Effective (in thousands) 2021 2020 Interest Rate Term Loans Due July 2026, 2.73% interest rate $ — $ 788,239 3.17 % Due July 2026, 2.38% interest rate 646,239 — 2.77 % Due December 2028, 2.75% interest rate 505,000 — 3.09 % Term loan principal outstanding 1,151,239 788,239 Unamortized debt issuance costs (16,436 ) (12,065 ) Unamortized debt discount (6,879 ) (7,165 ) Long-term debt $ 1,127,924 $ 769,009 |
Schedule of Components of Interest Expense and Other Financing Costs | The following table presents the components of interest expense and other financing costs on the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019. (in thousands) 2021 2020 2019 Interest expense $ 17,250 $ 30,941 $ 36,423 Amortization of debt issuance costs 2,332 2,984 2,499 Amortization of debt discount 1,098 1,485 1,200 Interest rate swap expense 3,602 1,042 — Other 370 553 779 Total $ 24,652 $ 37,005 $ 40,901 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Classification of Swap in Consolidated Financial Statements | The following tables summarize the classification of the Swap in our consolidated financial statements (in thousands): Balance Sheets Description December 31, 2021 December 31, 2020 Other assets (Other liabilities) Fair value of interest rate swap $ 7,774 $ (10,006 ) Notional amount 450,000 450,000 Twelve Months Ended December 31, Statements of Operations Description 2021 2020 2019 Interest expense and other financing costs Loss reclassified from AOCI(L) $ 3,602 $ 1,042 $ — Twelve Months Ended December 31, Statements of Comprehensive Income Description 2021 2020 2019 Other comprehensive income (loss) Income (loss) recognized in AOCI(L), net of tax $ 13,468 $ (7,573 ) $ — |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased | The following tables present the changes in the number of shares of common stock issued and repurchased (in thousands): Shares of Common Stock Shares of Treasury Stock Common Stock Class B Common Stock Class B Balance, December 31, 2018 15,281 55,284 (856) (2,147) Issuance of shares 4 — — — Conversion of Class B shares to Common Stock 2,815 (2,815) — — Repurchase of shares — — (829) — Vesting of restricted share grants — 522 — — Exercise of options — 946 — — Shares withheld related to net settlement of equity awards — — — (509) Balance, December 31, 2019 18,100 53,937 (1,685) (2,656) Issuance of shares 8 — — — Conversion of Class B shares to Common Stock 1,281 (1,281) — — Repurchase of shares — — (1,498) — Vesting of restricted share grants — 1,105 — — Exercise of options — 1,006 — — Shares withheld related to net settlement of equity awards — — — (775) Balance, December 31, 2020 19,389 54,767 (3,183) (3,431) Issuance of shares 7 — — — Conversion of Class B shares to Common Stock 6,632 (6,632) — — Repurchase of shares — — (886) — Vesting of restricted share grants 4 1,604 — — Exercise of options 91 1,380 — — Shares withheld related to net settlement of equity awards — — (49) (1,031) Elimination of Class B share class 51,119 (51,119 ) (4,462 ) 4,462 Balance, December 31, 2021 77,242 — (8,580) — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards | The following tables presents activity during the years ended December 31, 2021, 2020 and 2019 related to stock option awards and restricted stock awards. Shares Subject to Stock Option Awards Year to Date Ended December 31, 2021 2020 2019 Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd Avg wtd grant-date exercise grant-date exercise grant-date exercise fair value price Units fair value price Units fair value price Units Outstanding at beginning of period $ 3.91 $ 6.50 6,865,101 $ 3.83 $ 6.27 7,880,167 $ 3.79 $ 6.12 9,070,052 Granted — — — — — — 7.25 17.64 31,178 Forfeited 5.29 10.73 (79,271 ) 5.87 12.42 (8,949 ) 5.01 9.68 (274,774 ) Exercised 3.72 5.52 (1,470,620 ) 3.27 4.60 (1,006,117 ) 3.19 4.24 (946,289 ) Outstanding at end of the period $ 3.94 $ 6.71 5,315,210 $ 3.91 $ 6.50 6,865,101 $ 3.83 $ 6.27 7,880,167 Vested $ 3.88 $ 6.53 5,072,585 $ 3.78 $ 6.10 6,259,420 $ 3.61 $ 5.59 6,724,030 Unvested 5.28 10.60 242,625 5.31 10.69 605,681 5.10 10.25 1,156,137 Total intrinsic value of stock options exercised in 2021, 2020, and 2019 was $39.5 million, $16.3 million and $12.8 million, respectively. Restricted Stock Awards For Year Ended December 31, 2021 2020 2019 Avg wtd Avg wtd Avg wtd fair value Units fair value Units fair value Units Unvested at beginning of period $ 14.99 2,827,008 $ 14.29 3,215,619 $ 13.17 2,997,856 Granted 27.29 270,824 16.70 795,487 16.27 1,196,820 Vested 14.62 (1,607,973 ) 14.39 (1,104,710 ) 12.83 (521,701 ) Forfeited 16.51 (137,020 ) 15.89 (79,388 ) 13.42 (457,356 ) Unvested at end of period $ 17.75 1,352,839 $ 14.99 2,827,008 $ 14.29 3,215,619 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Calendar Year Minimum Lease Payments | Future calendar year minimum lease payments under the leases are as follows (in thousands): Gross Operating Net Operating Lease Commitments Sub-Leases Lease Commitments 2022 $ 5,304 $ 432 $ 4,872 2023 4,311 437 3,874 2024 3,295 454 2,841 2025 3,148 466 2,682 2026 3,185 477 2,708 Thereafter 2,776 20 2,756 Total $ 22,019 $ 2,286 $ 19,733 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Components of Deferred Compensation Plan-Related Expense Related to Employee DC Plan | The following table presents the components of deferred compensation plan-related expense related to the Employee DC Plan. (in thousands) 2021 2020 2019 Employee contributions $ 2,231 $ 1,293 $ 2,202 Employer contributions 975 819 1,017 Change in value of deferred compensation plan liability 5,527 2,155 2,603 Total $ 8,733 $ 4,267 $ 5,822 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic Earnings Per Share and Diluted Earnings Per Share | The following table sets forth the computation of basic earnings per share and diluted earnings per share for the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, (in thousands, except per share amounts) 2021 2020 2019 Net income $ 278,389 $ 212,522 $ 92,491 Shares: Basic weighted average common shares outstanding 67,976 67,710 67,616 Assumed conversion of dilutive instruments 6,175 6,009 5,850 Diluted weighted average common shares outstanding 74,151 73,719 73,466 Earnings per share Basic: $ 4.10 $ 3.14 $ 1.37 Diluted: $ 3.75 $ 2.88 $ 1.26 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table presents changes in accumulated other comprehensive income (loss) by component for the years ending December 31, 2021, 2020, and 2019. Investments in Cumulative Proprietary Cash Flow Translation (in thousands) Funds (a) Hedges (b) Adjustment Total Balance, December 31, 2018 $ (59 ) $ — $ (27 ) $ (86 ) Other comprehensive income before reclassification and tax — — 32 32 Tax impact — — (8 ) (8 ) Reclassification adjustments, before tax — — — — Tax impact — — — — Net current period other comprehensive income — — 24 24 Cumulative effect of adoption of ASU 2016-01 and 2018-02 59 3 62 Balance, December 31, 2019 $ — $ — $ — $ — Other comprehensive income/(loss) before reclassification and tax — (11,047 ) 151 (10,896 ) Tax impact — 2,685 (38 ) 2,647 Reclassification adjustments, before tax — 1,042 — 1,042 Tax impact — (253 ) — (253 ) Net current period other comprehensive income/(loss) — (7,573 ) 113 (7,460 ) Balance, December 31, 2020 $ — $ (7,573 ) $ 113 $ (7,460 ) Other comprehensive income/(loss) before reclassification and tax — 14,177 (49 ) 14,128 Tax impact — (3,438 ) 13 (3,425 ) Reclassification adjustments, before tax — 3,602 — 3,602 Tax impact — (873 ) — (873 ) Net current period other comprehensive income/(loss) — 13,468 (36 ) 13,432 Balance, December 31, 2021 $ — $ 5,895 $ 77 $ 5,972 (a) Reclassifications out of AOCL related to investments in proprietary funds are recorded in interest income and other income (expense) (b) Reclassifications out of AOCL related to cash flow hedges are recorded in interest expense and other financing costs |
Organization and Nature of Bu_2
Organization and Nature of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 01, 2021USD ($) | Mar. 01, 2021USD ($) | Feb. 18, 2021USD ($) | Jan. 17, 2020USD ($) | Jul. 01, 2019USD ($) | Mar. 13, 2018shares | Feb. 12, 2018$ / sharesshares | Dec. 31, 2021USD ($) | Dec. 31, 2019USD ($)$ / shares |
Subsidiary Sale Of Stock [Line Items] | |||||||||
Asset under management acquired | $ 539,240 | $ 851,276 | |||||||
Share price | $ / shares | $ 17.64 | ||||||||
Term Loans | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Debt Term | 7 years | ||||||||
Principal amount | $ 1,100,000 | ||||||||
Term Loans | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.50% | 3.25% | |||||||
Term Loans | First Amendment | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 3.25% | ||||||||
Term Loans | Second Amendment | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.50% | ||||||||
Revolving Credit Facility | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Debt Term | 5 years | ||||||||
Amount of revolving credit facility | $ 100,000 | ||||||||
Repriced Term Loans | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Principal amount | $ 755,700 | ||||||||
Basis spread on variable rate, increase (decrease) | 0.25% | ||||||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. | ||||||||
Debt maturity date | Jul. 1, 2026 | ||||||||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
Repriced Term Loans | First Amendment | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Principal amount | $ 952,000 | ||||||||
Basis spread on variable rate, increase (decrease) | 0.75% | ||||||||
Debt instrument interest rate description | 2020 Term Loans provide for a reduced applicable margin on the London Interbank Offered Rate (“LIBOR”) of 75 basis points | ||||||||
Debt maturity date | Jul. 1, 2026 | ||||||||
Repriced Term Loans | First Amendment | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.50% | ||||||||
Repriced Term Loans | Second Amendment | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Principal amount | $ 755,700 | ||||||||
Basis spread on variable rate, increase (decrease) | 0.25% | ||||||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points | ||||||||
Debt maturity date | Jul. 1, 2026 | ||||||||
Repriced Term Loans | Second Amendment | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
2021 Incremental Term Loans | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Principal amount | $ 505,000 | ||||||||
Basis spread on variable rate, increase (decrease) | 0.50% | ||||||||
Debt instrument interest rate description | The 2021 Incremental Term Loans will mature in December 2028 and will bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. | ||||||||
2021 Incremental Term Loans | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
2021 Incremental Term Loans | Adjusted London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
2021 Incremental Term Loans | Base Rate | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 1.25% | ||||||||
2021 Incremental Term Loans | Third Amendment | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Principal amount | $ 505,000 | ||||||||
Basis spread on variable rate, increase (decrease) | 0.50% | ||||||||
Debt instrument interest rate description | The 2021 Incremental Term Loans will mature in 2028 and will bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. The 2021 Incremental Term Loans will amortize at a rate of 1.00% per annum. | ||||||||
Debt instrument, amortization rate per annum | 1.00% | ||||||||
2021 Incremental Term Loans | Third Amendment | London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
2021 Incremental Term Loans | Third Amendment | Adjusted London Interbank Offered Rate (LIBOR) | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 2.25% | ||||||||
2021 Incremental Term Loans | Third Amendment | Base Rate | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Base spread (as a percent) | 1.25% | ||||||||
IPO | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Conversion ratio of common stock to Class B common stock | 1 | ||||||||
IPO | Class A | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Number of shares issued | shares | 11,700,000 | ||||||||
Share price | $ / shares | $ 13 | ||||||||
Underwriter's Option | Class A | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Number of shares issued | shares | 1,110,860 | ||||||||
THB Acquisition | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Asset under management acquired | $ 547,000 | ||||||||
NEC Acquisition | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Asset under management acquired | $ 795,000 | ||||||||
WestEnd Acquisition | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Asset under management acquired | $ 19,300,000 | ||||||||
WestEnd Acquisition | 2021 Incremental Term Loans | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Business acquisition, acquired percentage | 100.00% | ||||||||
WestEnd Acquisition | 2021 Incremental Term Loans | Third Amendment | |||||||||
Subsidiary Sale Of Stock [Line Items] | |||||||||
Business acquisition, acquired percentage | 100.00% |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) | Aug. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2022USD ($) | Sep. 20, 2020USD ($) | Mar. 27, 2020USD ($) |
Significant Accounting Policies [Line Items] | ||||||||
Maximum risk of loss related to unconsolidated sponsored VIE investment funds | $ 29,600,000 | $ 22,900,000 | ||||||
Impairments of investments | $ 0 | 0 | $ 0 | |||||
Number of operating segments | Segment | 1 | |||||||
Reserve for credit losses | $ 0 | 0 | 0 | |||||
Provision for credit losses | 0 | 0 | 0 | |||||
Costs expensed related to debt modifications | 400,000 | 900,000 | 4,400,000 | |||||
Accretion expense related to deferred payment obligations | $ 0 | 0 | 200,000 | |||||
Future minimum cash commitments under operating leases | $ 18,000,000 | |||||||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | |||||||
Accounting Standards Update 2018-15 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 | |||||||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||||||
Accounting Standards Update 2017-04 | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 | |||||||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||||||
Minimum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives of property and equipment | 3 years | |||||||
Maximum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives of property and equipment | 10 years | |||||||
Interest Rate Swap | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Notional amount | $ 450,000,000 | 450,000,000 | $ 450,000,000 | |||||
Fixed rate of interest | 0.965% | |||||||
Expiration date of swap | Jul. 1, 2026 | |||||||
Cerebellum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of equity method investment sold | 100.00% | |||||||
Cerebellum Capital, LLC | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of equity method investment sold | 100.00% | |||||||
Alderwood Partners LLP | Cerebellum | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Equity interest percentage | 15.00% | |||||||
Equity method investment | $ 1,100,000 | $ 1,400,000 | $ 0 | $ 1,500,000 | ||||
Variable Interest Entity, Primary Beneficiary | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of voting interest in entities | 50.00% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Type and Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of revenue | |||
Total revenue | $ 890,265 | $ 775,351 | $ 612,373 |
Investment Management Fees | |||
Disaggregation of revenue | |||
Total revenue | 674,539 | 562,036 | 466,802 |
Investment Management Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 536,902 | 455,715 | 355,969 |
Investment Management Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 16,517 | 11,604 | 10,422 |
Investment Management Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 125,417 | 99,125 | 99,726 |
Performance-based Investment Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | (5,839) | (4,771) | |
Performance-based Investment Fees | Separate Accounts and Other Vehicles | |||
Disaggregation of revenue | |||
Total revenue | 1,542 | 363 | 685 |
Administration Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 120,414 | 112,279 | 71,131 |
Administration Fees | ETF's | |||
Disaggregation of revenue | |||
Total revenue | 1,887 | 1,460 | 1,317 |
Fund Distribution Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 28,939 | 25,599 | 30,356 |
Transfer Agent Fees | Mutual Funds | |||
Disaggregation of revenue | |||
Total revenue | 64,486 | 73,977 | 42,767 |
Fund Administration and Distribution Fees | |||
Disaggregation of revenue | |||
Total revenue | $ 215,726 | $ 213,315 | $ 145,571 |
Revenue - Schedule of Balances
Revenue - Schedule of Balances of Receivables from Contracts with Customers (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 97,757 | $ 84,928 |
Non-customer receivables | 6,548 | 3,254 |
Total receivables | 104,305 | 88,182 |
Investment management fees receivable | 80,634 | 67,957 |
Fund administration and distribution fees receivable | 17,123 | 16,971 |
Other receivables | 6,548 | 3,254 |
Mutual Funds | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 65,304 | 60,868 |
ETF's | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | 1,934 | 1,419 |
Separate Accounts and Other Vehicles | ||
Disaggregation of revenue | ||
Receivables from contracts with customers | $ 30,519 | $ 22,641 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Class C | |
Disaggregation of revenue | |
Upfront sales commission percentage | 1.00% |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) | Nov. 04, 2021 | Sep. 10, 2021 | Mar. 01, 2021 | Jul. 01, 2019 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisitions | ||||||||
Contingent consideration liability | $ 309,380,000 | $ 92,500,000 | ||||||
Goodwill | 981,805,000 | 404,750,000 | $ 404,750,000 | |||||
Change in value of consideration payable for acquisition of business | 13,800,000 | 11,300,000 | 19,886,000 | |||||
Business combination, each earnout payment | 37,500,000 | |||||||
USAA AMCO | ||||||||
Acquisitions | ||||||||
Business acquisition, acquired percentage | 100.00% | |||||||
Purchase price | $ 949,400,000 | |||||||
Payments to acquire business | 851,300,000 | |||||||
Contingent consideration liability | 98,800,000 | 68,800,000 | 92,500,000 | |||||
Working capital adjustment | $ 700,000 | |||||||
Change in goodwill | 0 | 0 | ||||||
Maximum aggregate contingent payment | 150,000,000 | |||||||
Maximum annual contingent payment | $ 37,500,000 | |||||||
Contingent consideration threshold percentage | 80.00% | |||||||
Annual revenue percentage requirement to achieve the maximum contingent payment | 100.00% | |||||||
Goodwill | $ 120,643,000 | 120,600,000 | ||||||
Change in value of consideration payable for acquisition of business | 13,800,000 | $ 11,300,000 | $ 19,900,000 | |||||
Business combination, earnout payments | 75,000,000 | |||||||
THB Acquisition | ||||||||
Acquisitions | ||||||||
Purchase price | $ 547,000,000 | |||||||
THB Acquisition | Customer Relationship | ||||||||
Acquisitions | ||||||||
Estimated acquisition costs allocated to definite- lived intangible asset | $ 600,000 | |||||||
NEC Acquisition | ||||||||
Acquisitions | ||||||||
Business acquisition, acquired percentage | 100.00% | |||||||
Purchase price | $ 63,100,000 | |||||||
Payments to acquire business | 62,800,000 | |||||||
Working capital adjustment | 300,000 | 300,000 | ||||||
Goodwill | 41,032,000 | |||||||
Additional payments in cash to acquire business based on revenue growth | $ 35,000,000 | |||||||
Cash based on revenue growth period | 6 years | |||||||
Contingent payment period one | 36 months | |||||||
Contingent payment period two | 48 months | |||||||
Contingent payment period three | 60 months | |||||||
Contingent payment compensation expense | $ 1,100,000 | |||||||
Assets acquired and liabilities assumed based upon their estimated fair values | 62,800,000 | |||||||
Goodwill expected to be deductible for tax purposes | $ 41,000,000 | |||||||
WestEnd Acquisition | ||||||||
Acquisitions | ||||||||
Business acquisition, acquired percentage | 100.00% | |||||||
Purchase price | $ 716,100,000 | |||||||
Payments to acquire business | 475,800,000 | |||||||
Contingent consideration liability | 239,700,000 | |||||||
Working capital adjustment | $ 600,000 | |||||||
Maximum aggregate contingent payment | 320,000,000 | |||||||
Maximum annual contingent payment | 80,000,000 | |||||||
Goodwill | 536,023,000 | |||||||
Cash payable for net working capital adjustments | $ 600,000 | |||||||
Period of time over which contingent payments will be made | 4 years | |||||||
Period of time over which contingent "catch-up" provisions payments will be made | 5 years 6 months | |||||||
Maximum aggregate earn-out payments | $ 320,000,000 | |||||||
Maximum annual earn-out payments | 80,000,000 | |||||||
Cash paid at closing placed in escrow | 2,900,000 | |||||||
Amount available for purchase price adjustments | 500,000 | |||||||
Amount available to compensate for eligible claims under purchase agreement indemnification provisions | 2,400,000 | |||||||
WestEnd Acquisition | Third Amendment to 2019 Credit Agreement | ||||||||
Acquisitions | ||||||||
Principal amount | $ 505,000,000 |
Acquisition - Summary of Alloca
Acquisition - Summary of Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Nov. 04, 2021 | Sep. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2019 |
Acquisitions | ||||||
Goodwill | $ 981,805 | $ 404,750 | $ 404,750 | |||
USAA AMCO | ||||||
Acquisitions | ||||||
Cash and cash equivalents | $ 17,473 | |||||
Investment management fees receivable | 25,353 | |||||
Fund administration and distribution fees receivable | 4,779 | |||||
Other receivables and prepaid expenses | 299 | |||||
Property and equipment | 1,165 | |||||
Other intangible assets | 808,670 | |||||
Goodwill | $ 120,600 | 120,643 | ||||
Accounts payable and accrued expenses | (5,575) | |||||
Accrued compensation and benefits | (5,907) | |||||
Payable to members and custodians | (17,473) | |||||
Purchase price | $ 949,427 | |||||
NEC Acquisition | ||||||
Acquisitions | ||||||
Investment management fees receivable | $ 118 | |||||
Other receivables and prepaid expenses | 60 | |||||
Property and equipment | 19 | |||||
Other intangible assets | 23,700 | |||||
Goodwill | 41,032 | |||||
Accounts payable and accrued expenses | (2,096) | |||||
Purchase price | $ 62,833 | |||||
WestEnd Acquisition | ||||||
Acquisitions | ||||||
Investment management fees receivable | $ 4,560 | |||||
Prepaid expenses and other assets | 256 | |||||
Property and equipment | 2,011 | |||||
Other intangible assets | 175,500 | |||||
Goodwill | 536,023 | |||||
Accounts payable and accrued expenses | (115) | |||||
Accrued compensation and benefits | (1,480) | |||||
Other liabilities | (693) | |||||
Purchase price | $ 716,062 |
Acquisition - Summary of Allo_2
Acquisition - Summary of Allocation of Purchase Price (Parenthetical) (Details) - USD ($) $ in Thousands | Nov. 04, 2021 | Sep. 10, 2021 | Jul. 01, 2019 |
USAA AMCO | |||
Acquisitions | |||
Other intangible assets, net | $ 808,670 | ||
USAA AMCO | Trade Name | |||
Acquisitions | |||
Other intangible assets, net | 38,200 | ||
USAA AMCO | Lease-Related Assets | |||
Acquisitions | |||
Other intangible assets, net | 400 | ||
USAA AMCO | Investment Advisory Contracts | |||
Acquisitions | |||
Other intangible assets, net | 750,200 | ||
USAA AMCO | Transfer Agent Contracts | |||
Acquisitions | |||
Other intangible assets, net | 19,100 | ||
USAA AMCO | Distribution Contracts | |||
Acquisitions | |||
Other intangible assets, net | $ 800 | ||
NEC Acquisition | |||
Acquisitions | |||
Other intangible assets, net | $ 23,700 | ||
NEC Acquisition | Customer Relationship | |||
Acquisitions | |||
Other intangible assets, net | $ 14,000 | ||
other intangible asset estimated useful life | 6 years | ||
NEC Acquisition | Investment Advisory Contracts | |||
Acquisitions | |||
Other intangible assets, net | $ 9,700 | ||
other intangible asset estimated useful life | 2 years | ||
WestEnd Acquisition | |||
Acquisitions | |||
Other intangible assets, net | $ 175,500 | ||
WestEnd Acquisition | Trade Name | |||
Acquisitions | |||
Other intangible assets, net | $ 3,000 | ||
other intangible asset estimated useful life | 7 years | ||
WestEnd Acquisition | Customer Relationship | |||
Acquisitions | |||
Other intangible assets, net | $ 172,500 | ||
other intangible asset estimated useful life | 10 years |
Acquisition - Summary of Signif
Acquisition - Summary of Significant Inputs to Valuation of Contingent Consideration Payable (Details) - USD ($) $ in Millions | Jul. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
USAA AMCO | |||
Acquisitions | |||
Non-managed money revenue average annual growth rate | 3.00% | 5.00% | 3.00% |
Market price of risk (continuous) | 4.00% | 6.00% | 7.00% |
Revenue volatility | 20.00% | 17.00% | 16.00% |
Discount rate | 7.00% | 3.00% | 3.00% |
Years remaining in earn out period | 4 years 3 months 18 days | 1 year 10 months 24 days | 2 years 10 months 24 days |
USAA AMCO | Minimum | |||
Acquisitions | |||
Undiscounted estimated remaining earn out payments $ millions | $ 119 | $ 72 | $ 98 |
USAA AMCO | Maximum | |||
Acquisitions | |||
Undiscounted estimated remaining earn out payments $ millions | $ 150 | $ 75 | $ 113 |
WestEnd Acquisition | |||
Acquisitions | |||
Net revenue average annual growth rate | 37.00% | ||
Market price of risk (continuous) | 11.00% | ||
Revenue volatility | 21.00% | ||
Discount rate | 4.00% | ||
Years remaining in earn out period | 4 years 3 months 18 days | ||
WestEnd Acquisition | Minimum | |||
Acquisitions | |||
Undiscounted estimated remaining earn out payments $ millions | $ 220 | ||
WestEnd Acquisition | Maximum | |||
Acquisitions | |||
Undiscounted estimated remaining earn out payments $ millions | $ 320 |
Acquisition - Summary of Revenu
Acquisition - Summary of Revenue Subsequent to Acquisition (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
USAA AMCO | ||
Acquisitions | ||
Revenue | $ 221.3 | $ 244.5 |
Acquisition - Summary of Unaudi
Acquisition - Summary of Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Acquisitions | ||||
Revenue | $ 851,440 | $ 906,844 | ||
Net income | $ 114,988 | $ 71,471 | ||
Basic | $ 1.70 | $ 1.08 | ||
Diluted | $ 1.56 | $ 1.01 | ||
Basic | 67,693 | 66,295 | ||
Diluted | 73,612 | 70,511 | ||
WestEnd Acquisition | ||||
Acquisitions | ||||
Revenue | $ 936,609 | $ 798,401 | ||
Net income | $ 280,980 | $ 177,637 | ||
Basic | $ 4.13 | $ 2.62 | ||
Diluted | $ 3.79 | $ 2.41 | ||
Basic | 67,976 | 67,710 | ||
Diluted | 74,151 | 73,719 |
Acquisition - Summary of Acquis
Acquisition - Summary of Acquisition Related Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquisitions | |||
Acquisition-related costs | $ 16,262 | $ 1,108 | $ 22,317 |
USAA AMCO | |||
Acquisitions | |||
Acquisition-related costs | 5,534 | 426 | 21,333 |
NEC Acquisition | |||
Acquisitions | |||
Acquisition-related costs | 2,605 | ||
WestEnd Acquisition | |||
Acquisitions | |||
Acquisition-related costs | 8,102 | ||
Other | |||
Acquisitions | |||
Acquisition-related costs | $ 21 | $ 682 | $ 984 |
Acquisition - Summary of Rollfo
Acquisition - Summary of Rollforward of Restructuring and Integration Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | $ 1,000 | $ 3,000 | $ 100 |
Restructuring and integration costs | 2,578 | 7,786 | 8,678 |
Settlement of liabilities | (3,300) | (9,800) | (5,800) |
Liability balance, end of year | 300 | 1,000 | 3,000 |
Accrued expenses | |||
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | 1,000 | 2,900 | |
Liability balance, end of year | 300 | 1,000 | 2,900 |
Other liabilities | |||
Rollforward of restructuring and integration liabilities | |||
Liability balance, beginning of year | 100 | ||
Liability balance, end of year | 100 | ||
USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Integration costs | 500 | 6,500 | 2,300 |
THB Acquisition | |||
Rollforward of restructuring and integration liabilities | |||
Integration costs | 300 | ||
Severance expense | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | 200 | ||
Severance expense | USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | 1,400 | 1,200 | 6,200 |
Severance expense | THB Acquisition | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 200 | ||
Contract termination expense | USAA AMCO | |||
Rollforward of restructuring and integration liabilities | |||
Severance expense | $ 100 | $ 200 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Financial liabilities | ||
Contingent consideration arrangements | $ (309,380) | $ (92,500) |
Fair Value on Recurring Basis | ||
Financial assets | ||
Money market fund | 10,088 | |
Investments in proprietary funds | 912 | 922 |
Deferred compensation plan investments | 30,812 | 22,571 |
Interest rate swap asset | 7,774 | |
Total financial assets | 39,498 | 33,581 |
Financial liabilities | ||
Interest rate swap liability | (10,006) | |
Contingent consideration arrangements | (308,500) | (92,500) |
Total financial liabilities | (308,500) | (102,506) |
Fair Value on Recurring Basis | Level 1 | ||
Financial assets | ||
Money market fund | 10,088 | |
Investments in proprietary funds | 912 | 922 |
Deferred compensation plan investments | 30,812 | 22,571 |
Total financial assets | 31,724 | 33,581 |
Fair Value on Recurring Basis | Level 2 | ||
Financial assets | ||
Interest rate swap asset | 7,774 | |
Total financial assets | 7,774 | |
Financial liabilities | ||
Interest rate swap liability | (10,006) | |
Total financial liabilities | (10,006) | |
Fair Value on Recurring Basis | Level 3 | ||
Financial liabilities | ||
Contingent consideration arrangements | (308,500) | (92,500) |
Total financial liabilities | $ (308,500) | $ (92,500) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Details) - USD ($) $ in Thousands | Sep. 10, 2021 | Dec. 31, 2021 | Nov. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Consideration payable for acquisition of business | $ 309,380 | $ 92,500 | |||
NEC Acquisition | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Working capital adjustment | $ 300 | 300 | |||
WestEnd Acquisition | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Working capital adjustment | 600 | ||||
Consideration payable for acquisition of business | $ 239,700 | ||||
Contingent Consideration Liability | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Contingent consideration arrangement liabilities | $ 308,500 | $ 92,500 | $ 118,700 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 27, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfers between levels | $ 0 | $ 0 | |
Interest Rate Swap | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notional amount | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 |
Rate of interest | 0.965% | 3.465% |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Contingent Consideration Arrangement Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Consideration payable for acquisition of business | $ 309,380 | $ 92,500 | |
USAA AMCO | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Consideration payable for acquisition of business | 68,800 | 92,500 | $ 98,800 |
Contingent Consideration Liability | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Beginning balance | 92,500 | 118,700 | |
Ending balance | 308,500 | 92,500 | |
Contingent Consideration Liability | USAA AMCO | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
First annual earn-out payment | (37,500) | ||
Change in fair value measurement | 13,800 | $ 11,300 | |
Second annual earn-out payment | (37,500) | ||
Contingent Consideration Liability | WestEnd | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Consideration payable for acquisition of business | $ 239,700 |
Related Party Transactions -Sum
Related Party Transactions -Summary of Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related party assets | |||
Cash and cash equivalents | $ 69,533 | $ 22,744 | |
Receivables (investment management fees) | 80,634 | 67,957 | |
Receivables (fund administration and distribution fees) | 17,123 | 16,971 | |
Related party revenue | |||
Total revenue | 890,265 | 775,351 | $ 612,373 |
Investment Management Fees | |||
Related party revenue | |||
Total revenue | 674,539 | 562,036 | 466,802 |
Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | 215,726 | 213,315 | 145,571 |
VCH | |||
Related party assets | |||
Cash and cash equivalents | 10,088 | ||
Receivables (investment management fees) | 53,256 | 46,958 | |
Receivables (fund administration and distribution fees) | 17,123 | 16,971 | |
Prepaid expenses | 304 | ||
Investments (investments in proprietary funds, fair value) | 912 | 922 | |
Deferred compensation plan investments | 28,643 | 22,062 | |
Total | 100,238 | 97,001 | |
Related party liabilities | |||
Accounts payable and accrued expenses (fund reimbursements) | 6,695 | 5,978 | |
Total | 6,695 | 5,978 | |
Related party revenue | |||
Total revenue | 782,501 | 684,468 | 517,378 |
Related party expense | |||
General and administrative | 521 | 702 | |
Total | 521 | 702 | |
Related party other income (expense) | |||
Interest income (expense) and other income (expense) | 5,470 | 2,337 | 2,692 |
Total | 5,470 | 2,337 | 2,692 |
VCH | Investment Management Fees | |||
Related party revenue | |||
Total revenue | 566,775 | 471,153 | 371,807 |
VCH | Fund Administration and Distribution Fees | |||
Related party revenue | |||
Total revenue | $ 215,726 | $ 213,315 | $ 145,571 |
Investments - Summary of Cost a
Investments - Summary of Cost and Fair Value of Investments in Proprietary Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule Of Available For Sale Securities [Line Items] | ||
Investments in proprietary funds, at fair value | $ 912 | $ 922 |
Proprietary Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost | 769 | 758 |
Gross Unrealized Gains | 169 | 164 |
Gross Unrealized (Losses) | (26) | |
Investments in proprietary funds, at fair value | $ 912 | $ 922 |
Investments - Summary of Procee
Investments - Summary of Proceeds from Sales of Investments in Proprietary Funds and Realized Gains and Losses Recognized (Details) - Proprietary Funds - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 215 | $ 507 | $ 158 |
Realized Gains | $ 50 | 31 | $ 6 |
Realized (Losses) | $ (13) |
Investments - Summary of Cost_2
Investments - Summary of Cost and Fair Value of Deferred Compensation Plan Investments (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Cost | $ 27,174 | $ 21,205 |
Gross Unrealized Gains | 4,266 | 1,725 |
Gross Unrealized (Losses) | (628) | (359) |
Trading securities, at fair value | $ 30,812 | $ 22,571 |
Investments - Summary of Proc_2
Investments - Summary of Proceeds from Sales of Deferred Compensation Plan Investments and Realized Gains and Losses Recognized (Details) - Deferred Compensation Plan Investments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Proceeds and realized gains and losses recognized | |||
Sale Proceeds | $ 9,662 | $ 4,063 | $ 2,749 |
Realized Gains | 1,315 | 130 | 22 |
Realized (Losses) | $ (59) | $ (309) | $ (71) |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 39,063 | $ 27,608 |
Accumulated depreciation and amortization | (13,768) | (8,861) |
Total property and equipment, net | 25,295 | 18,747 |
Equipment, Purchased Software and Implementation Costs | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 31,503 | 21,710 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,488 | 3,155 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,072 | $ 2,743 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |||
Depreciation | $ 6.2 | $ 3.6 | $ 3 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the goodwill balance | ||
Balance, beginning of period | $ 404,750 | $ 404,750 |
Balance, end of period | 981,805 | 404,750 |
NEC Acquisition | ||
Changes in the goodwill balance | ||
Goodwill recorded in acquisition | 41,032 | 0 |
WestEnd Acquisition | ||
Changes in the goodwill balance | ||
Goodwill recorded in acquisition | $ 536,023 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Impairments to definite lived intangible assets | $ 0 | $ 0 | $ 0 |
Amortization expense for definite lived intangible assets | 12,600,000 | 12,800,000 | 20,900,000 |
Impairments to indefinite lived intangible assets | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Definite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Identifiable Intangible Assets | ||
Net book value | $ 213,097 | |
USAA AMCO | ||
Identifiable Intangible Assets | ||
Gross book value | 372,233 | $ 172,447 |
Accumulated amortization | (159,136) | (146,506) |
Net book value | $ 213,097 | $ 25,941 |
Weighted average useful life (yrs) | 6 years 2 months 12 days | 2 years 4 months 24 days |
USAA AMCO | Customer Relationship | ||
Identifiable Intangible Assets | ||
Gross book value | $ 310,286 | $ 123,200 |
Accumulated amortization | (123,752) | (121,497) |
Net book value | $ 186,534 | $ 1,703 |
Weighted average useful life (yrs) | 9 years 4 months 24 days | 1 month 6 days |
USAA AMCO | Advisory and distribution contracts with Victory Funds | ||
Identifiable Intangible Assets | ||
Gross book value | $ 12,068 | $ 2,368 |
Accumulated amortization | (3,176) | (2,368) |
Net book value | $ 8,892 | |
Weighted average useful life (yrs) | 1 year 9 months 18 days | |
USAA AMCO | Trade Name | ||
Identifiable Intangible Assets | ||
Gross book value | $ 42,332 | 39,332 |
Accumulated amortization | (24,921) | (15,406) |
Net book value | $ 17,411 | $ 23,926 |
Weighted average useful life (yrs) | 1 year 9 months 18 days | 2 years 2 months 12 days |
USAA AMCO | Intellectual Property/Other | ||
Identifiable Intangible Assets | ||
Gross book value | $ 7,547 | $ 7,547 |
Accumulated amortization | (7,287) | (7,235) |
Net book value | $ 260 | $ 312 |
Weighted average useful life (yrs) | 5 years | 1 month 6 days |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Estimated Amortization Expense for Definite Lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Estimated amortization expense for definite lived intangible assets | |
2022 | $ 34,625 |
2023 | 29,104 |
2024 | 20,187 |
2025 | 20,064 |
2026 | 20,063 |
Thereafter | 89,054 |
Net book value | $ 213,097 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Schedule of Indefinite-lived Intangible Assets by Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | $ 1,136,700 | $ 1,136,700 |
Additions or transfers | 0 | 0 |
Indefinite-lived intangible assets, Ending balance | 1,136,700 | 1,136,700 |
Fund Advisory, Transfer Agent and Distribution Contracts [Member] | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | 1,113,000 | 1,113,000 |
Additions or transfers | 0 | 0 |
Indefinite-lived intangible assets, Ending balance | 1,113,000 | 1,113,000 |
Trade Name | ||
Indefinite-lived Intangible Assets | ||
Indefinite-lived intangible assets, Beginning balance | 23,700 | 23,700 |
Additions or transfers | 0 | 0 |
Indefinite-lived intangible assets, Ending balance | $ 23,700 | $ 23,700 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax expense (benefit): | |||
Federal | $ 42,845 | $ 24,048 | $ 22,234 |
State | 9,929 | 7,263 | 6,656 |
Foreign | (9) | 108 | 52 |
Total current tax expense (benefit) | 52,765 | 31,419 | 28,942 |
Deferred tax expense (benefit): | |||
Federal | 15,716 | 27,793 | (449) |
State | 3,742 | 6,860 | (289) |
Foreign | 30 | (54) | (7) |
Total deferred tax expense (benefit) | 19,488 | 34,599 | (745) |
Income tax expense | $ 72,253 | $ 66,018 | $ 28,197 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 2,900,000 |
Unrecognized tax benefits, net of federal benefit | 2,300,000 | ||
Accrual for interest and penalties | 300,000 | ||
Unrecognized tax benefits, income tax penalties and interest expense | 0 | 0 | 200,000 |
Net operating loss carryforward balance | 0 | 0 | |
Other liabilities | |||
Income Taxes [Line Items] | |||
Accrual for interest and penalties | $ 0 | $ 0 | $ 2,900,000 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits Excluding Interest and Penalties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 2,582 | |
Additions for tax positions of prior years | $ 1,703 | |
Additions based on tax positions related to current year | 879 | |
Reductions related to settlement of tax matters | $ (2,582) | |
Ending balance | $ 2,582 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at U.S. statutory rate | 21.00% | 21.00% | 21.00% |
State income tax rate, net of federal tax benefit | 3.20% | 3.80% | 3.30% |
UTP liability | 1.90% | ||
Excess tax benefits on share-based compensation | (3.40%) | (1.40%) | (2.80%) |
Foreign taxes and other | (0.20%) | 0.30% | |
Income tax expense | 20.60% | 23.70% | 23.40% |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Definite-lived intangibles | $ 21,373 | $ 21,455 |
Share-based compensation expense | 7,988 | 10,318 |
Acquisition-related costs | 5,110 | 4,194 |
Deferred compensation | 7,909 | 5,621 |
Restructuring expenses | 1,431 | 1,616 |
Contingent consideration arrangements | 383 | 431 |
Goodwill | 11,443 | 7,454 |
OCI - Swap liability and cumulative translation adjustment | 2,432 | |
Other | 54 | 83 |
Total deferred tax assets | 55,691 | 53,604 |
Deferred tax liabilities: | ||
Indefinite-lived intangibles | 106,230 | 81,429 |
Debt issuance costs | 4,087 | 5,085 |
Depreciation | 5,444 | 4,216 |
OCI - Swap liability and cumulative translation adjustment | 1,878 | |
Prepaid expenses | 271 | 220 |
Unrealized gain on deferred compensation investments | 901 | 338 |
Total deferred tax liabilities | 118,811 | 91,288 |
Net deferred tax liability | $ (63,120) | $ (37,684) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Feb. 18, 2021 | Jan. 17, 2020 | Jul. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Original issue discount | $ 6,879,000 | $ 7,165,000 | ||||
Debt Issuance cost expensed | 2,332,000 | 2,984,000 | $ 2,499,000 | |||
Loss on debt extinguishment | 4,596,000 | 2,871,000 | 9,860,000 | |||
Unamortized debt issuance costs | 16,436,000 | 12,065,000 | ||||
Standby Letters of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 10,000,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding borrowing | 0 | |||||
Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Debt Term | 7 years | |||||
Principal amount | $ 1,100,000,000 | |||||
Original issue discount | 11,500,000 | 23,300,000 | 20,700,000 | |||
Debt issuance costs, gross | $ 18,000,000 | |||||
Repayments of debt | 142,000,000 | 163,800,000 | 148,000,000 | |||
Accumulated amortization and loss on debt extinguishment | 16,400,000 | 13,500,000 | ||||
Term Loans | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.50% | 3.25% | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt Term | 5 years | |||||
Maximum borrowing capacity | $ 100,000,000 | |||||
Original issue discount | 1,500,000 | |||||
Debt issuance costs, gross | $ 300,000 | 3,700,000 | 3,700,000 | |||
Accumulated amortization and loss on debt extinguishment | $ 2,500,000 | 2,000,000 | ||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum percentage of borrowings for revolving credit facility as a percent of total commitments | 35.00% | |||||
Maximum first lien leverage ratio on last day of quarter (as a percent) | 380.00% | |||||
Debt issuance costs, gross | $ 22,800,000 | |||||
Debt Issuance cost expensed | $ 4,500,000 | |||||
Repayments of debt | 4,400,000 | |||||
Debt extinguishment costs | 5,500,000 | |||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 3.25% | |||||
Credit Agreement | Adjusted London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 3.25% | |||||
Credit Agreement | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
Previous Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | 6,300,000 | |||||
Previous Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | $ 3,600,000 | |||||
2020 Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 952,000,000 | |||||
Original issue discount | 1,600,000 | |||||
Loss on debt extinguishment | 2,900,000 | |||||
Debt maturity date | Jul. 1, 2026 | |||||
Debt instrument interest rate description | 2020 Term Loans provided for a reduced applicable margin on LIBOR of 75 basis points | |||||
Basis spread on variable rate, increase (decrease) | 0.75% | |||||
Unamortized debt issuance costs | 2,700,000 | |||||
Gain on repurchase | 1,400,000 | |||||
2020 Term Loans | General and Administrative Expense | ||||||
Debt Instrument [Line Items] | ||||||
Cost incurred | $ 900,000 | |||||
2020 Term Loans | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.50% | |||||
Repriced Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 755,700,000 | |||||
Original issue discount | $ 1,700,000 | |||||
Loss on debt extinguishment | $ 4,600,000 | |||||
Debt maturity date | Jul. 1, 2026 | |||||
Debt instrument interest rate description | Repriced Term Loans provide for a reduced applicable margin on LIBOR of 25 basis points. | |||||
Basis spread on variable rate, increase (decrease) | 0.25% | |||||
Unamortized debt issuance costs | $ 2,900,000 | |||||
Repriced Term Loans | General and Administrative Expense | ||||||
Debt Instrument [Line Items] | ||||||
Cost incurred | $ 400,000 | |||||
Repriced Term Loans | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | 505,000,000 | |||||
Original issue discount | 2,500,000 | |||||
Debt issuance costs, gross | $ 9,100,000 | |||||
Debt instrument interest rate description | The 2021 Incremental Term Loans will mature in December 2028 and will bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves and subject to a 50 basis point floor) plus a margin of 2.25% or an alternate base rate plus a margin of 1.25%. | |||||
Basis spread on variable rate, increase (decrease) | 0.50% | |||||
Debt maturity date | 2028-12 | |||||
2021 Incremental Term Loans | WestEnd Acquisition | ||||||
Debt Instrument [Line Items] | ||||||
Business acquisition, acquired percentage | 100.00% | |||||
2021 Incremental Term Loans | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | Adjusted London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 2.25% | |||||
2021 Incremental Term Loans | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Base spread (as a percent) | 1.25% | |||||
2019 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs, gross | $ 48,700,000 | 39,600,000 | ||||
Accumulated amortization and loss on debt extinguishment | $ 32,300,000 | $ 27,600,000 |
Debt - Schedule of Components o
Debt - Schedule of Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2019 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (16,436) | $ (12,065) | |
Unamortized debt discount | (6,879) | (7,165) | |
Long-term debt | 1,127,924 | 769,009 | |
Due July 2026, 2.73% interest rate | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 788,239 | ||
Effective interest rate (as a percent) | 3.17% | ||
Due July 2026, 2.38% interest rate | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 646,239 | ||
Effective interest rate (as a percent) | 2.77% | ||
Due December 2028, 2.75% interest rate | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 505,000 | ||
Effective interest rate (as a percent) | 3.09% | ||
Term Loans | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ 1,151,239 | $ 788,239 | |
Unamortized debt discount | $ (23,300) | $ (20,700) | $ (11,500) |
Debt - Schedule of Components_2
Debt - Schedule of Components of Long-Term Debt (Parenthetical) (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Due July 2026, 2.73% interest rate | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 2.73% | |
Due July 2026, 2.38% interest rate | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 2.38% | |
Due December 2028, 2.75% interest rate | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 2.75% |
Debt - Schedule of Components_3
Debt - Schedule of Components of Interest Expense and Other Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 17,250 | $ 30,941 | $ 36,423 |
Amortization of debt issuance costs | 2,332 | 2,984 | 2,499 |
Amortization of debt discount | 1,098 | 1,485 | 1,200 |
Interest rate swap expense | 3,602 | 1,042 | |
Other | 370 | 553 | 779 |
Total | $ 24,652 | $ 37,005 | $ 40,901 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 27, 2020 | |
Other Liabilities | |||
Derivative [Line Items] | |||
Amount payable to swap | $ 900,000 | $ 800,000 | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amount | $ 450,000,000 | 450,000,000 | $ 450,000,000 |
Fixed interest rate (as a percent) | 0.965% | 3.465% | |
Expiration date of swap | Jul. 1, 2026 | ||
Interest Rate Swap | Other Liabilities | |||
Derivative [Line Items] | |||
Amount payable to swap | $ 10,006,000 |
Derivatives - Summary of Classi
Derivatives - Summary of Classification of Swap in Consolidated Financial Statements (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 27, 2020 | |
Derivative [Line Items] | ||||
Loss reclassified from AOCI(L) | $ 24,652,000 | $ 37,005,000 | $ 40,901,000 | |
Income (loss) recognized in AOCI(L), net of tax | 13,468,000 | (7,573,000) | ||
Other Liabilities | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swap | (900,000) | (800,000) | ||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional amount | 450,000,000 | 450,000,000 | $ 450,000,000 | |
Interest Rate Swap | Reclassified from AOCI(L) | Other Comprehensive Income (Loss) | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Income (loss) recognized in AOCI(L), net of tax | 13,468,000 | (7,573,000) | ||
Interest Rate Swap | Interest Expense and Other Financing Costs | ||||
Derivative [Line Items] | ||||
Loss reclassified from AOCI(L) | 3,602,000 | 1,042,000 | ||
Interest Rate Swap | Other Assets | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swap | $ 7,774,000 | |||
Interest Rate Swap | Other Liabilities | ||||
Derivative [Line Items] | ||||
Fair value of interest rate swap | $ (10,006,000) |
Equity Method Investment - Addi
Equity Method Investment - Additional Information (Details) - Cerebellum - USD ($) | Jan. 31, 2022 | Sep. 20, 2020 | Aug. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Equity Method Investments [Line Items] | ||||||
Proceeds from sale of equity method investment | $ 10,600,000 | |||||
Percentage of equity method investment sold | 100.00% | |||||
Interest Income and Other Income (Expense) | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Gain (losses) from equity method investment | $ 2,900,000 | $ (300,000) | $ (200,000) | $ (200,000) | ||
Alderwood Partners LLP | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity interest percentage | 15.00% | |||||
Equity method investment | $ 1,500,000 | $ 1,100,000 | $ 1,400,000 | $ 0 | ||
Equity method commitments to contribute additional capital | 4,500,000 | |||||
Alderwood Partners LLP | Subsequent Event | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method commitments to contribute additional capital | $ 3,000,000 | |||||
Additional capital contribution equity method investment | $ 1,500,000 | |||||
Private Fund | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method commitments to contribute additional capital | $ 50,000,000 |
Equity - Additional Information
Equity - Additional Information (Details) | Feb. 12, 2018USD ($)Item$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Nov. 23, 2021Item$ / sharesshares | May 31, 2021USD ($) | Nov. 30, 2020USD ($) | May 31, 2020USD ($) | May 31, 2019USD ($) | May 31, 2018USD ($) |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares authorized | shares | 600,000,000 | 600,000,000 | 400,000,000 | 600,000,000 | 600,000,000 | |||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | ||||||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Number of votes for each share of common stock | Item | 1 | |||||||||||
Conversion basis of Class B Shares into Class A shares | $ | $ 1,000 | |||||||||||
Threshold for number of class B shares as a percent of the aggregate class A shares for conversion | 10.00% | |||||||||||
Common stock, Conversion basis description | Each share of Class B common stock issued and outstanding or held as treasury stock immediately prior to the Effective Date was converted into Common Stock on a one-for-one basis. | |||||||||||
Preferred stock, shares issued | shares | 0 | 0 | 0 | |||||||||
Authorized amount for share repurchase program | $ | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | ||||
Share repurchase program expiration period | Dec. 31, 2023 | |||||||||||
Number of shares acquired | shares | 885,505 | 1,497,827 | 828,880 | 4,068,487 | ||||||||
Average cost of acquired shares (in dollars per share) | $ / shares | $ 29.53 | $ 17.57 | $ 16.26 | $ 18.19 | ||||||||
Cost of acquired shares | $ | $ 26,200,000 | $ 26,300,000 | $ 13,500,000 | $ 74,000,000 | ||||||||
Remaining authorized amount for share repurchase program | $ | $ 16,000,000 | 16,000,000 | 16,000,000 | |||||||||
May 2021 Program | ||||||||||||
Remaining authorized amount for share repurchase program | $ | $ 1,000,000 | |||||||||||
December 2021 Program | ||||||||||||
Remaining authorized amount for share repurchase program | $ | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | |||||||||
Class A | ||||||||||||
Common stock, par value | $ / shares | $ 0.01 | |||||||||||
Common stock, shares authorized | shares | 400,000,000 | |||||||||||
Number of votes for each share of common stock | Item | 1 | |||||||||||
Class B | ||||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares authorized | shares | 200,000,000 | 0 | 0 | 200,000,000 | 0 | |||||||
Number of votes for each share of common stock | Item | 10 |
Equity - Schedule of Changes in
Equity - Schedule of Changes in Number of Shares of Common Stock Issued and Repurchased (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock | |||
Balance at beginning of period (in shares) | 19,389 | 18,100 | 15,281 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Issuance of shares | 7 | 8 | 4 |
Conversion of Class B shares to Common Stock | 6,632 | 1,281 | 2,815 |
Vesting of restricted share grants | 4 | ||
Exercise of options | 91 | ||
Elimination of Class B share class | 51,119 | ||
Balance at end of period (in shares) | 77,242 | 19,389 | 18,100 |
Common Stock | Class B | |||
Balance at beginning of period (in shares) | 54,767 | 53,937 | 55,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Conversion of Class B shares to Common Stock | (6,632) | (1,281) | (2,815) |
Vesting of restricted share grants | 1,604 | 1,105 | 522 |
Exercise of options | 1,380 | 1,006 | 946 |
Elimination of Class B share class | (51,119) | ||
Balance at end of period (in shares) | 54,767 | 53,937 | |
Treasury Stock | |||
Balance at beginning of period (in shares) | (3,183) | (1,685) | (856) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Repurchase of shares | (886) | (1,498) | (829) |
Shares withheld related to net settlement of equity awards | (49) | ||
Elimination of Class B share class | (4,462) | ||
Balance at end of period (in shares) | (8,580) | (3,183) | (1,685) |
Treasury Stock | Class B | |||
Balance at beginning of period (in shares) | (3,431) | (2,656) | (2,147) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Shares withheld related to net settlement of equity awards | (1,031) | (775) | (509) |
Elimination of Class B share class | 4,462 | ||
Balance at end of period (in shares) | (3,431) | (2,656) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2021USD ($)Itemshares | Oct. 30, 2019Item | Jun. 30, 2018USD ($)Item | Dec. 31, 2017$ / shares | Feb. 28, 2017$ / shares | Dec. 31, 2021USD ($)Item$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total intrinsic value of options exercised | $ | $ 39,500,000 | $ 16,300,000 | $ 12,800,000 | |||||
Share price | $ / shares | $ 17.64 | |||||||
Exercise price | $ / shares | $ 17.64 | |||||||
Expected volatility | 40.00% | |||||||
Risk free rate | 1.85% | |||||||
Expected term | 6 years | |||||||
Common stock, dividends declared | $ / shares | $ 0.53 | $ 0.23 | $ 0.10 | |||||
Amount of cash bonuses and distributions related to all dividends previously declared on unvested shares | $ | $ 1,000,000 | $ 1,200,000 | $ 1,300,000 | |||||
Total share based compensation expense expects to recognize | $ | $ 14,100,000 | $ 14,100,000 | ||||||
Share based compensation, weighted average period | 1 year | |||||||
Restricted Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 270,824 | 795,487 | 1,196,820 | |||||
Total number of restricted shares granted | 1,607,973 | 1,104,710 | 521,701 | |||||
Dividend paid | $ / shares | $ 0.23 | $ 2.19 | ||||||
Common stock, dividends declared | $ / shares | 0.23 | 2.19 | ||||||
Reduction in strike price per share | $ / shares | $ 2.19 | |||||||
Cash bonus equivalent | $ / shares | $ 0.23 | |||||||
Total fair value of restricted share awards vested | $ | $ 45,200,000 | $ 20,800,000 | $ 9,700,000 | |||||
Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of options granted | 31,178 | |||||||
Contractual life | 10 years | |||||||
Aggregate intrinsic value of stock options currently exercisable | $ | $ 152,000,000 | $ 152,000,000 | $ 117,100,000 | $ 103,400,000 | ||||
2013 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of options granted | 0 | |||||||
2018 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of options granted | 0 | 0 | 31,178 | |||||
Common stock available for issuance | 3,372,484 | 3,372,484 | ||||||
Common stock remained available for issuance | 1,483,673 | 1,483,673 | ||||||
2018 Plan | Restricted Shares of Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 270,824 | 795,487 | 1,196,820 | |||||
2018 Plan | Restricted Shares | Vested On Grant Date | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 34,770 | 42,848 | 18,943 | |||||
2018 Plan | Restricted Shares | Vest Over Three Years | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 227,019 | 338,202 | 1,144,589 | |||||
Vesting period from grant date | 3 years | 3 years | 3 years | |||||
2018 Plan | Restricted Shares | Vest Over Two Years | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 9,035 | |||||||
Vesting period from grant date | 2 years | |||||||
2018 Plan | Restricted Shares | Vest Over Thirty Months | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 414,437 | |||||||
Vesting period from grant date | 30 months | |||||||
2018 Plan | Restricted Shares | Vest Over Five Years | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total number of restricted shares granted | 33,288 | |||||||
Vesting period from grant date | 5 years | |||||||
2018 Plan | Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period from grant date | 3 years | |||||||
ESPP Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock available for issuance | 350,388 | 350,388 | ||||||
Common stock remained available for issuance | 327,886 | 327,886 | ||||||
Term of the offering period | 24 months | 18 months | ||||||
Number of offering periods | Item | 2 | 4 | 3 | 2 | ||||
Term of individual offering periods | 6 months | 6 months | 6 months | |||||
Term established for purchasing stock under the employee stock purchase plan | 3 months | |||||||
Discount percentage | 5.00% | |||||||
Maximum dollar amount of shares that can be purchased by an individual in any given calendar year | $ | $ 25,000,000 | |||||||
2018 and 2013 Plans | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock based compensation expense | $ | $ 17,600,000 | $ 18,100,000 | $ 16,300,000 | |||||
Tax benefit related to stock-based compensation | $ | $ 4,300,000 | $ 4,500,000 | $ 4,000,000 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Activity Related to Stock Options Awards and Restricted Stock Awards (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options | |||
Avg wtd grant-date fair value | |||
Outstanding at beginning of period | $ 3.91 | $ 3.83 | $ 3.79 |
Granted | 7.25 | ||
Forfeited | 5.29 | 5.87 | 5.01 |
Exercised | 3.72 | 3.27 | 3.19 |
Outstanding at end of the period | 3.94 | 3.91 | 3.83 |
Vested | 3.88 | 3.78 | 3.61 |
Unvested | 5.28 | 5.31 | 5.10 |
Avg wtd exercise price | |||
Outstanding at beginning of period | 6.50 | 6.27 | 6.12 |
Granted | 17.64 | ||
Forfeited | 10.73 | 12.42 | 9.68 |
Exercised | 5.52 | 4.60 | 4.24 |
Outstanding at end of the period | 6.71 | 6.50 | 6.27 |
Vested | 6.53 | 6.10 | 5.59 |
Unvested | $ 10.60 | $ 10.69 | $ 10.25 |
Units | |||
Outstanding at beginning of period | 6,865,101 | 7,880,167 | 9,070,052 |
Granted | 31,178 | ||
Forfeited | (79,271) | (8,949) | (274,774) |
Exercised | (1,470,620) | (1,006,117) | (946,289) |
Outstanding at end of the period | 5,315,210 | 6,865,101 | 7,880,167 |
Vested | 5,072,585 | 6,259,420 | 6,724,030 |
Unvested | 242,625 | 605,681 | 1,156,137 |
Restricted Shares | |||
Avg wtd grant-date fair value | |||
Unvested at beginning of period | $ 14.99 | $ 14.29 | $ 13.17 |
Granted | 27.29 | 16.70 | 16.27 |
Vested | 14.62 | 14.39 | 12.83 |
Forfeited | 16.51 | 15.89 | 13.42 |
Unvested at end of period | $ 17.75 | $ 14.99 | $ 14.29 |
Units | |||
Unvested at beginning of period | 2,827,008 | 3,215,619 | 2,997,856 |
Granted | 270,824 | 795,487 | 1,196,820 |
Vested | (1,607,973) | (1,104,710) | (521,701) |
Forfeited | (137,020) | (79,388) | (457,356) |
Unvested at end of period | 1,352,839 | 2,827,008 | 3,215,619 |
Commitments - Summary of Future
Commitments - Summary of Future Calendar Year Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Gross Operating Lease Commitments, 2022 | $ 5,304 |
Gross Operating Lease Commitments, 2023 | 4,311 |
Gross Operating Lease Commitments, 2024 | 3,295 |
Gross Operating Lease Commitments, 2025 | 3,148 |
Gross Operating Lease Commitments, 2026 | 3,185 |
Gross Operating Lease Commitments, Thereafter | 2,776 |
Gross Operating Lease Commitments, Total | 22,019 |
Sub-Leases, 2022 | 432 |
Sub-Leases, 2023 | 437 |
Sub-Leases, 2024 | 454 |
Sub-Leases, 2025 | 466 |
Sub-Leases, 2026 | 477 |
Sub-Leases, Thereafter | 20 |
Sub-Leases, Total | 2,286 |
Future calendar year minimum lease payments | |
Net Operating Lease Commitments, 2022 | 4,872 |
Net Operating Lease Commitments, 2023 | 3,874 |
Net Operating Lease Commitments, 2024 | 2,841 |
Net Operating Lease Commitments, 2025 | 2,682 |
Net Operating Lease Commitments, 2026 | 2,708 |
Net Operating Lease Commitments, Thereafter | 2,756 |
Net Operating Lease Commitments, Total | $ 19,733 |
Commitments - Additional Inform
Commitments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent expense | $ 6.5 | $ 7.5 | $ 4.9 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Compensation Arrangement | |||
Expense of employer matched contributions | $ 4 | $ 4.7 | $ 3.3 |
Director DC Plan | |||
Deferred Compensation Arrangement | |||
Deferred compensation expenses | $ 0.1 | $ 0.2 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Components of Deferred Compensation Plan-Related Expense Related to Employee DC Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Compensation Arrangement | |||
Change in value of deferred compensation plan liability | $ (633) | $ (157) | $ (236) |
Deferred Compensation Plan | |||
Deferred Compensation Arrangement | |||
Employee contributions | 2,231 | 1,293 | 2,202 |
Employer contributions | 975 | 819 | 1,017 |
Change in value of deferred compensation plan liability | 5,527 | 2,155 | 2,603 |
Total | $ 8,733 | $ 4,267 | $ 5,822 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic Earnings Per Share and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Computation of basic and diluted earnings per share | |||
Net income | $ 278,389 | $ 212,522 | $ 92,491 |
Shares: | |||
Basic weighted average common shares outstanding | 67,976 | 67,710 | 67,616 |
Assumed conversion of dilutive instruments | 6,175 | 6,009 | 5,850 |
Diluted weighted average common shares outstanding | 74,151 | 73,719 | 73,466 |
Earnings per share | |||
Basic: | $ 4.10 | $ 3.14 | $ 1.37 |
Diluted: | $ 3.75 | $ 2.88 | $ 1.26 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Number of shares excluded from the computations of weighted average shares for diluted earnings per share because the effects would be anti dilutive | 4,558 | 31,178 | 821,544 |
Net Capital Requirements - Addi
Net Capital Requirements - Additional Information (Details) $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Regulatory Capital Requirements [Abstract] | ||
Net capital | $ 2.2 | $ 2.2 |
Excess net capital | 2 | 2 |
Minimum net capital requirement | $ 0.2 | $ 0.2 |
Ratio of aggregated indebtedness to net capital | 1.27 | 1.10 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | $ 707,541 | $ 537,871 | $ 455,548 |
Total other comprehensive income (loss), net of tax | 13,432 | (7,460) | 24 |
Retained earnings | 402,811 | 161,581 | |
Balance at end of period | 929,927 | 707,541 | 537,871 |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (7,460) | (86) | |
Other comprehensive income/(loss) before reclassification and tax | 14,128 | (10,896) | 32 |
Tax impact | (3,425) | 2,647 | (8) |
Reclassification adjustments, before tax | 3,602 | 1,042 | |
Tax impact | (873) | (253) | |
Total other comprehensive income (loss), net of tax | 13,432 | (7,460) | 24 |
Balance at end of period | 5,972 | (7,460) | |
Accumulated Other Comprehensive Income (Loss) | Cumulative Effect of Adoption of ASU 2016-01 and 2018-02 | Revision of Prior Period, Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Retained earnings | 62 | ||
Investments in Proprietary Funds | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (59) | ||
Investments in Proprietary Funds | Cumulative Effect of Adoption of ASU 2016-01 and 2018-02 | Revision of Prior Period, Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Retained earnings | 59 | ||
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | (7,573) | ||
Other comprehensive income/(loss) before reclassification and tax | 14,177 | (11,047) | |
Tax impact | (3,438) | 2,685 | |
Reclassification adjustments, before tax | 3,602 | 1,042 | |
Tax impact | (873) | (253) | |
Total other comprehensive income (loss), net of tax | 13,468 | (7,573) | |
Balance at end of period | 5,895 | (7,573) | |
Cumulative Translation Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Balance at beginning of period | 113 | (27) | |
Other comprehensive income/(loss) before reclassification and tax | (49) | 151 | 32 |
Tax impact | 13 | (38) | (8) |
Total other comprehensive income (loss), net of tax | (36) | 113 | 24 |
Balance at end of period | $ 77 | $ 113 | |
Cumulative Translation Adjustment | Cumulative Effect of Adoption of ASU 2016-01 and 2018-02 | Revision of Prior Period, Adjustment | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Retained earnings | $ 3 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 14, 2022 | Feb. 10, 2022 | Jan. 31, 2022 | Sep. 20, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||||
Dividends declared per share of common stock | $ 0.53 | $ 0.23 | $ 0.10 | ||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared per share of common stock | $ 0.25 | ||||||
Dividends, date of declared | Feb. 10, 2022 | ||||||
Dividends payable date | Mar. 25, 2022 | ||||||
Dividends payable, date of record | Mar. 10, 2022 | ||||||
Subsequent Event | 2021 Incremental Term Loans | |||||||
Subsequent Event [Line Items] | |||||||
Reduced outstanding debt | $ 65 | ||||||
Alderwood Partners LLP | Cerebellum | |||||||
Subsequent Event [Line Items] | |||||||
Equity method commitments to contribute additional capital | $ 4.5 | ||||||
Alderwood Partners LLP | Cerebellum | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Additional capital contribution equity method investment | $ 1.5 | ||||||
Equity method commitments to contribute additional capital | $ 3 |