Company Quick10K Filing
Virtus Investment Partners
Price114.29 EPS9
Shares8 P/E12
MCap939 P/FCF-9
Net Debt13 EBIT101
TEV952 TEV/EBIT9
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-06
10-K 2018-12-31 Filed 2019-02-27
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-31 Filed 2018-02-27
10-Q 2017-09-30 Filed 2017-11-06
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-08
10-K 2016-12-31 Filed 2017-02-27
10-Q 2016-09-30 Filed 2016-11-07
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-30 Filed 2015-10-30
10-Q 2015-06-30 Filed 2015-07-31
10-Q 2015-03-31 Filed 2015-05-11
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-07-29
10-Q 2014-03-31 Filed 2014-05-07
10-K 2013-12-31 Filed 2014-02-24
10-Q 2013-09-30 Filed 2013-11-04
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-01
10-Q 2012-09-30 Filed 2012-11-07
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-08
10-K 2011-12-31 Filed 2012-03-01
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-05
10-Q 2011-03-31 Filed 2011-05-05
10-K 2010-12-31 Filed 2011-03-01
10-Q 2010-09-30 Filed 2010-11-04
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-04
10-K 2009-12-31 Filed 2010-03-08
8-K 2020-05-18
8-K 2020-05-01
8-K 2020-02-09
8-K 2020-01-31
8-K 2020-01-09
8-K 2019-10-25
8-K 2019-09-29
8-K 2019-07-26
8-K 2019-05-15
8-K 2019-04-26
8-K 2019-04-10
8-K 2019-02-01
8-K 2018-10-26
8-K 2018-07-27
8-K 2018-07-02
8-K 2018-06-11
8-K 2018-05-15
8-K 2018-04-27
8-K 2018-03-26
8-K 2018-02-15
8-K 2018-02-14
8-K 2018-02-07
8-K 2018-02-02

VRTS 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 vrts03312020ex-311.htm
EX-31.2 vrts03312020ex-312.htm
EX-32.1 vrts03312020ex-321.htm

Virtus Investment Partners Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
3.22.61.91.30.60.02012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12012201420172020
Rev, G Profit, Net Income
0.40.20.1-0.1-0.2-0.42012201420172020
Ops, Inv, Fin

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

 
 
 
 
 
FORM 10-Q
 
 
 
 
 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-10994
 
 
 
 
 
 
vrtslogo2019a02.jpg
VIRTUS INVESTMENT PARTNERS, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
 
Delaware
 
26-3962811
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
One Financial Plaza, Hartford, CT 06103
(Address of principal executive offices, including Zip Code)
(800) 248-7971
(Registrant’s telephone number, including area code)
 
 
 
 
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
 
 
 
 
 
Common Stock, $0.01 par value
 
VRTS
 
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
 
  
Accelerated filer
 
 
 
 
 
Non-accelerated filer
 
  
Smaller reporting company
 
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
The number of shares outstanding of the registrant’s common stock was 7,695,445 as of April 20, 2020.
 
 
 
 
 



VIRTUS INVESTMENT PARTNERS, INC.
INDEX
 
 
 
Page
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 2.
Item 6.
 
"We," "us," "our," the "Company," and "Virtus" as used in this Quarterly Report on Form 10-Q, refer to Virtus Investment Partners, Inc., a Delaware corporation, and its subsidiaries.




PART I – FINANCIAL INFORMATION
 
Item 1.    Financial Statements
Virtus Investment Partners, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
March 31,
2020
 
December 31,
2019
Assets:
 
 
 
Cash and cash equivalents
$
158,456

 
$
221,781

Investments
56,853

 
83,206

Accounts receivable, net
66,574

 
74,132

Assets of consolidated investment products ("CIP")
 
 
 
Cash and cash equivalents of CIP
227,941

 
99,691

Cash pledged or on deposit of CIP
7,229

 
467

Investments of CIP
2,189,757

 
2,030,110

Other assets of CIP
29,433

 
23,612

Furniture, equipment and leasehold improvements, net
17,147

 
18,150

Intangible assets, net
302,858

 
310,391

Goodwill
290,366

 
290,366

Deferred taxes, net
8,713

 
15,879

Other assets
36,730

 
36,849

Total assets
$
3,392,057

 
$
3,204,634

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Accrued compensation and benefits
$
36,641

 
$
101,377

Accounts payable and accrued liabilities
23,594

 
23,308

Dividends payable
7,187

 
8,915

Debt
251,465

 
277,839

Other liabilities
37,647

 
40,507

Liabilities of CIP
 
 
 
Notes payable of CIP
2,134,108

 
1,834,535

Securities purchased payable and other liabilities of CIP
147,834

 
168,051

Total liabilities
2,638,476

 
2,454,532

Commitments and Contingencies (Note 13)

 

Redeemable noncontrolling interests
87,115

 
63,845

Equity:
 
 
 
Equity attributable to stockholders:
 
 
 
Series D mandatory convertible preferred stock, $0.01 par value, 0 and 1,150,000 shares authorized, issued and outstanding at March 31, 2020 and December 31, 2019, respectively

 
110,843

Common stock, $0.01 par value, 1,000,000,000 shares authorized; 11,733,976 shares issued and 7,695,413 shares outstanding at March 31, 2020 and 10,736,887 shares issued and 6,809,280 shares outstanding at December 31, 2019, respectively
117

 
107

Additional paid-in capital
1,304,868

 
1,199,205

Retained earnings (accumulated deficit)
(219,501
)
 
(215,216
)
Accumulated other comprehensive income (loss)
(16
)
 
9

Treasury stock, at cost, 4,038,563 and 3,927,607 shares at March 31, 2020 and December 31, 2019, respectively
(429,249
)
 
(419,249
)
Total equity attributable to stockholders
656,219

 
675,699

Noncontrolling interests
10,247

 
10,558

Total equity
666,466

 
686,257

Total liabilities and equity
$
3,392,057

 
$
3,204,634


The accompanying notes are an integral part of these condensed consolidated financial statements.

1


Virtus Investment Partners, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
Three Months Ended
March 31,
(in thousands, except per share data)
2020
 
2019
Revenues
 
 
 
Investment management fees
$
120,288

 
$
105,918

Distribution and service fees
9,460

 
10,063

Administration and shareholder service fees
14,653

 
14,413

Other income and fees
165

 
324

Total revenues
144,566

 
130,718

Operating Expenses
 
 
 
Employment expenses
66,130

 
60,851

Distribution and other asset-based expenses
19,409

 
19,764

Other operating expenses
18,885

 
18,723

Operating expenses of consolidated investment products ("CIP")
6,749

 
451

Restructuring and severance

 
1,176

Depreciation expense
1,258

 
1,213

Amortization expense
7,533

 
7,541

Total operating expenses
119,964

 
109,719

Operating Income (Loss)
24,602

 
20,999

Other Income (Expense)
 
 
 
Realized and unrealized gain (loss) on investments, net
(7,544
)
 
3,433

Realized and unrealized gain (loss) of CIP, net
(8,669
)
 
(1,921
)
Other income (expense), net
612

 
450

Total other income (expense), net
(15,601
)
 
1,962

Interest Income (Expense)
 
 
 
Interest expense
(3,199
)
 
(5,165
)
Interest and dividend income
752

 
1,190

Interest and dividend income of investments of CIP
29,229

 
27,402

Interest expense of CIP
(24,486
)
 
(19,701
)
Total interest income (expense), net
2,296

 
3,726

Income (Loss) Before Income Taxes
11,297

 
26,687

Income tax expense (benefit)
10,291

 
4,219

Net Income (Loss)
1,006

 
22,468

Noncontrolling interests
(5,291
)
 
(722
)
Net Income (Loss) Attributable to Stockholders
(4,285
)
 
21,746

Preferred stockholder dividends

 
(2,084
)
Net Income (Loss) Attributable to Common Stockholders
$
(4,285
)
 
$
19,662

Earnings (Loss) per Share—Basic
$
(0.58
)
 
$
2.80

Earnings (Loss) per Share—Diluted
$
(0.58
)
 
$
2.61

Weighted Average Shares Outstanding—Basic
7,422

 
7,015

Weighted Average Shares Outstanding—Diluted
7,422

 
8,322


The accompanying notes are an integral part of these condensed consolidated financial statements.

2


Virtus Investment Partners, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three Months Ended
March 31,
(in thousands)
2020
 
2019
Net Income (Loss)
$
1,006

 
$
22,468

Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustment, net of tax of $9 and $(3) for the three months ended March 31, 2020 and 2019, respectively
(25
)
 
6

Other comprehensive income (loss)
(25
)
 
6

Comprehensive income (loss)
981

 
22,474

Comprehensive (income) loss attributable to noncontrolling interests
(5,291
)
 
(722
)
Comprehensive Income (Loss) Attributable to Stockholders
$
(4,310
)
 
$
21,752

The accompanying notes are an integral part of these condensed consolidated financial statements.

3




Virtus Investment Partners, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Three Months Ended
March 31,
(in thousands)
2020
 
2019
Cash Flows from Operating Activities:
 
 
 
Net income (loss)
$
1,006

 
$
22,468

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation expense, intangible asset and other amortization
10,878

 
9,874

Stock-based compensation
3,621

 
5,629

Amortization of deferred commissions
517

 
980

Payments of deferred commissions
(518
)
 
(455
)
Equity in earnings of equity method investments
(657
)
 
(496
)
(Gain) Loss on extinguishment of debt
(705
)
 

Realized and unrealized (gains) losses on investments, net
7,544

 
(3,292
)
Sales (purchases) of investments, net
2,153

 
9,413

Deferred taxes, net
7,175

 
(1,705
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net and other assets
6,377

 
(2,732
)
Accrued compensation and benefits, accounts payable, accrued liabilities and other liabilities
(64,917
)
 
(60,857
)
Operating activities of consolidated investment products ("CIP"):
 
 
 
Realized and unrealized (gains) losses on investments of CIP, net
6,581

 
1,497

Purchases of investments by CIP
(509,337
)
 
(157,158
)
Sales of investments by CIP
273,962

 
152,572

Net proceeds (purchases) of short term investments by CIP
(396
)
 
(911
)
(Purchases) sales of securities sold short by CIP, net
181

 
1,064

Change in other assets of CIP
(17
)
 
578

Change in liabilities of CIP
932

 
316

Amortization of discount on notes payable of CIP
3,300

 

Net cash provided by (used in) operating activities
(252,320
)
 
(23,215
)
Cash Flows from Investing Activities:
 
 
 
Capital expenditures and other asset purchases
(358
)
 
(2,568
)
Change in cash and cash equivalents of CIP due to consolidation (deconsolidation), net
9,724

 
(1,571
)
Sale of available-for-sale securities

 
2,044

Net cash provided by (used in) investing activities
9,366

 
(2,095
)
Cash Flows from Financing Activities:
 
 
 
Payment of long term debt
(26,547
)
 
(12,413
)
Common stock dividends paid
(5,832
)
 
(4,441
)
Preferred stock dividends paid
(2,084
)
 
(2,084
)
Repurchases of common shares
(10,000
)
 
(14,999
)
Proceeds from exercise of stock options
101

 
449

Taxes paid related to net share settlement of restricted stock units
(3,551
)
 
(4,804
)
Net subscriptions received from (redemptions/distributions paid to) noncontrolling interests
728

 
6,012

Financing activities of CIP:
 
 
 
Payments on borrowings by CIP
(40,690
)
 

Borrowings by CIP
402,516

 
1,000

Net cash provided by (used in) financing activities
314,641

 
(31,280
)
Net increase (decrease) in cash, cash equivalents and restricted cash
71,687

 
(56,590
)
Cash, cash equivalents and restricted cash, beginning of period
321,939

 
254,656

Cash, cash equivalents and restricted cash, end of period
$
393,626

 
$
198,066

Non-Cash Investing Activities:
 
 
 
Change in accrual for capital expenditures
$
(20
)
 
$
(1,267
)
Non-Cash Financing Activities:
 
 
 
Increase (decrease) to noncontrolling interests due to consolidation (deconsolidation) of CIP, net
$
17,137

 
$
(6,423
)
Common stock dividends payable
$
5,175

 
$
3,865

Preferred stock dividends payable
$

 
$
2,084

Conversion of preferred stock to common stock
$
115,000

 
$


(in thousands)
March 31,
2020
 
December 31, 2019
Reconciliation of cash, cash equivalents and restricted cash
 
 
 
Cash and cash equivalents
$
158,456

 
$
221,781

Cash of CIP
227,941

 
99,691

Cash pledged or on deposit of CIP
7,229

 
467

Cash, cash equivalents and restricted cash at end of period
$
393,626

 
$
321,939


The accompanying notes are an integral part of these condensed consolidated financial statements.

4


Virtus Investment Partners, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
 
Permanent Equity
 
Temporary Equity
 
Common Stock
 
Preferred Stock
 
Additional
Paid-in
Capital
 
Retained Earnings (Accumulated
Deficit)
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury Stock
 
Total
Attributed To
Stockholders
 
Non-
controlling
Interests
 
Total
Equity
 
Redeemable
Non-
controlling
Interests
(in thousands, except per share data)
Shares
 
Par Value
 
Shares
 
Amount
 
Shares
 
Amount
 
Balances at December 31, 2018
6,997,382

 
$
106

 
1,150,000

 
$
110,843

 
$
1,209,805

 
$
(310,865
)
 
$
(731
)
 
3,555,242

 
$
(379,249
)
 
$
629,909

 
$
13,958

 
$
643,867

 
$
57,481

Net income (loss)

 

 

 

 

 
21,746

 

 

 

 
21,746

 
(453
)
 
21,293

 
1,175

Foreign currency translation adjustments

 

 

 

 

 

 
6

 

 

 
6

 

 
6

 

Net subscriptions (redemptions) and other

 

 

 

 

 

 

 

 

 

 
(557
)
 
(557
)
 
347

Reclassification from other comprehensive (income) loss

 

 

 

 

 

 
726

 

 

 
726

 

 
726

 

Cash dividends declared ($1.8125 per preferred share)

 

 

 

 
(2,084
)
 

 

 

 

 
(2,084
)
 

 
(2,084
)
 

Cash dividends declared ($0.55 per common share)

 

 

 

 
(4,152
)
 

 

 

 

 
(4,152
)
 

 
(4,152
)
 

Repurchases of common shares
(147,962
)
 

 

 

 

 

 

 
147,962

 
(14,999
)
 
(14,999
)
 

 
(14,999
)
 

Issuance of common shares related to employee stock transactions
129,505

 
1

 

 

 
448

 

 

 

 

 
449

 

 
449

 

Taxes paid on stock-based compensation

 

 

 

 
(4,804
)
 

 

 

 

 
(4,804
)
 

 
(4,804
)
 

Stock-based compensation

 

 

 

 
6,713

 

 

 

 

 
6,713

 

 
6,713

 

Balances at March 31, 2019
6,978,925

 
$
107

 
1,150,000

 
$
110,843

 
$
1,205,926

 
$
(289,119
)
 
$
1

 
3,703,204

 
$
(394,248
)
 
$
633,510

 
$
12,948

 
$
646,458

 
$
59,003

Balances at December 31, 2019
6,809,280

 
$
107

 
1,150,000

 
$
110,843

 
$
1,199,205

 
$
(215,216
)
 
$
9

 
3,927,607

 
$
(419,249
)
 
$
675,699

 
$
10,558

 
$
686,257

 
$
63,845

Net income (loss)

 

 

 

 

 
(4,285
)
 

 

 

 
(4,285
)
 
255

 
(4,030
)
 
5,036

Foreign currency translation adjustments

 

 

 

 

 

 
(25
)
 

 

 
(25
)
 

 
(25
)
 

Net subscriptions (redemptions) and other

 

 

 

 

 

 

 

 

 

 
(566
)
 
(566
)
 
18,234

Cash dividends declared ($0.67 per common share)

 

 

 

 
(6,180
)
 

 

 

 

 
(6,180
)
 

 
(6,180
)
 

Repurchases of common shares
(110,956
)
 

 

 

 

 

 

 
110,956

 
(10,000
)
 
(10,000
)
 

 
(10,000
)
 

Conversion of preferred stock
912,806

 
9

 
(1,150,000
)
 
(110,843
)
 
110,834

 

 

 

 

 

 

 

 

Issuance of common shares related to employee stock transactions
84,283

 
1

 

 

 
100

 

 

 

 

 
101

 

 
101

 

Taxes paid on stock-based compensation

 

 

 

 
(3,550
)
 

 

 

 

 
(3,550
)
 

 
(3,550
)
 

Stock-based compensation

 

 

 

 
4,459

 

 

 

 

 
4,459

 

 
4,459

 

Balances at March 31, 2020
7,695,413

 
$
117

 

 
$

 
$
1,304,868

 
$
(219,501
)
 
$
(16
)
 
4,038,563

 
$
(429,249
)
 
$
656,219

 
$
10,247

 
$
666,466

 
$
87,115



The accompanying notes are an integral part of these condensed consolidated financial statements.

5


Virtus Investment Partners, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization and Business

Virtus Investment Partners, Inc. (the "Company," "we," "us," "our" or "Virtus"), a Delaware corporation, operates in the investment management industry through its subsidiaries.

The Company provides investment management and related services to individuals and institutions. The Company’s retail investment management services are provided to individuals through products consisting of U.S. 1940 Act mutual funds and Undertaking for Collective Investment in Transferable Securities ("UCITS" or "offshore funds" and collectively, with U.S. 1940 Act mutual funds, "open-end funds"), exchange traded funds ("ETFs"), closed-end funds (collectively, with open-end funds and ETFs, "funds") and retail separate accounts. Institutional investment management services are offered through separate accounts and pooled or commingled structures to a variety of institutional clients. The Company also provides subadvisory services to other investment advisers and serves as the collateral manager for structured products.


2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial condition and results of operations. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the "SEC"). The Company’s significant accounting policies, which have been consistently applied, are summarized in its 2019 Annual Report on Form 10-K.

New Accounting Standards Implemented

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, including an internal-use software license. The Company adopted this standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). This standard modifies the disclosure requirements on fair value measurements. The Company adopted this standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements.

New Accounting Standards Not Yet Implemented

In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This standard clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, with the amendments to be applied on a prospective basis. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.


6


In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and also improves consistent application by clarifying and amending existing guidance. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. The Company is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements.


3. Revenues

The Company's revenues are recognized when a performance obligation is satisfied, which occurs when control of the services is transferred to customers. Investment management fees, distribution and service fees, and administration and shareholder service fees are generally calculated as a percentage of average net assets of the investment portfolios managed. The net asset values from which investment management, distribution and service, and administration and shareholder service fees are calculated are variable in nature and subject to factors outside of the Company's control such as additional investments, withdrawals and market performance. Because of this, these fees are considered constrained until the end of the contractual measurement period (monthly or quarterly), which is when asset values are generally determinable.

Revenue Disaggregated by Source
    
The following table summarizes revenue by source:
 
Three Months Ended March 31,
(in thousands)
2020
 
2019
Investment management fees
 
 
 
Open-end funds
$
59,108

 
$
53,293

Closed-end funds
10,179

 
10,019

Retail separate accounts
25,714

 
18,005

Institutional accounts
22,917

 
22,177

Structured products
1,574

 
1,647

Other products
796

 
777

Total investment management fees
120,288

 
105,918

Distribution and service fees
9,460

 
10,063

Administration and shareholder service fees
14,653

 
14,413

Other income and fees
165

 
324

Total revenues
$
144,566

 
$
130,718


    

4. Intangible Assets, Net

Below is a summary of intangible assets, net:
(in thousands)
March 31, 2020
 
December 31, 2019
Definite-lived intangible assets:
 
 
 
Investment contracts and other
$
489,570

 
$
489,570

Accumulated amortization
(230,228
)
 
(222,695
)
Definite-lived intangible assets, net
259,342

 
266,875

Indefinite-lived intangible assets
43,516

 
43,516

Total intangible assets, net
$
302,858

 
$
310,391


    

7


Activity in intangible assets, net was as follows: 
 
Three Months Ended March 31,
(in thousands)
2020
 
2019
Intangible assets, net
 
 
 
Balance, beginning of period
$
310,391

 
$
338,812

Amortization
(7,533
)
 
(7,541
)
Balance, end of period
$
302,858

 
$
331,271



Definite-lived intangible asset amortization for the remainder of fiscal year 2020 and succeeding fiscal years is estimated as follows:
Fiscal Year
 
Amount
(in thousands)
Remainder of 2020
 
$
22,594

2021
 
30,116

2022
 
29,992

2023
 
29,330

2024
 
23,689

2025 and thereafter
 
123,621

 
 
$
259,342




5. Investments
Investments consist primarily of investments in the Company's sponsored products. The Company's investments, excluding the assets of consolidated investment products ("CIP") discussed in Note 15, at March 31, 2020 and December 31, 2019 were as follows:
(in thousands)
March 31, 2020
 
December 31, 2019
Investment securities - fair value
$
35,460

 
$
60,990

Equity method investments (1)
12,575

 
12,030

Nonqualified retirement plan assets
7,166

 
8,724

Other investments
1,652

 
1,462

Total investments
$
56,853

 
$
83,206



(1)
The Company's equity method investments are valued on a three-month lag based upon the availability of financial information.  Therefore, the equity in earnings may not reflect the effects of the market disruption that occurred in the first quarter of 2020.
Investment Securities - fair value
Investment securities - fair value consist of investments in the Company's sponsored funds, separately managed accounts and trading debt securities. The composition of the Company’s investment securities - fair value was as follows:
 
March 31, 2020
 
December 31, 2019
(in thousands)
Cost
 
Fair Value
 
Cost
 
Fair Value
Investment Securities - fair value
 
 
 
 
 
 
 
Sponsored funds
$
26,188

 
$
24,825

 
$
44,588

 
$
47,654

Equity securities
10,902

 
10,629

 
11,250

 
13,320

Debt securities
7

 
6

 
44

 
16

Total investment securities - fair value
$
37,097

 
$
35,460

 
$
55,882

 
$
60,990




8


For the three months ended March 31, 2020, the Company recognized realized losses of $0.3 million on the sale of its investment securities - fair value. For the three months ended March 31, 2019, the Company recognized realized losses of $0.8 million on investment securities - fair value.


6. Fair Value Measurements
The Company’s assets and liabilities measured at fair value on a recurring basis, excluding the assets and liabilities of CIP discussed in Note 15, as of March 31, 2020 and December 31, 2019 by fair value hierarchy level were as follows:
March 31, 2020  
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
127,862

 
$

 
$

 
$
127,862

Investment securities - fair value
 
 
 
 
 
 
 
Sponsored funds
24,825

 

 

 
24,825

Equity securities
10,629

 

 

 
10,629

Debt securities

 
6

 

 
6

Nonqualified retirement plan assets