Key Points from the Financial Report

Overview of the Company’s Financial Performance

The company’s financial report for the quarters ended March 31, 2025 and 2024 highlights the following key points:

• Assets under management (AUM) at the end of the first quarter of 2025 were $1,268 million, down from $1,549 million in the same period of 2024.
• Average AUM for the first quarter of 2025 was $1,261 million, compared to $1,556 million in the first quarter of 2024.
• Net income per share-diluted was $0.36 in the first quarter of 2025, down from $0.64 in the same period of 2024.
• Book value per share at March 31, 2025 was $42.51, compared to $42.80 at March 31, 2024.

Revenue and Profit Trends

The company’s primary source of revenue is investment advisory and incentive fees, which are based on the amount and composition of AUM in its funds and accounts. The report highlights the following trends:

• Growth in revenues depends on good investment performance, which influences the value of existing AUM and contributes to higher investment and lower redemption rates, as well as attracting additional investors while maintaining current fee levels.
• Incentive fees are recognized when the measurement period has been completed, generally in December or at the time of an investor redemption.
• Compensation, including variable and fixed compensation and related expenses, may represent up to 55% of revenues.
• Management fee expense is incentive-based compensation equal to 10% of adjusted aggregate pre-tax profits paid to the Executive Chair or his designees.
• Other income and expense includes net gains and losses from investments, interest and dividend income, and interest expense.
• Net income attributable to noncontrolling interests represents the share of net income attributable to third-party limited partners of certain partnerships and offshore funds the company consolidates.

Strengths and Weaknesses

The report highlights the following strengths and weaknesses of the company:

Strengths:

• The company has a proprietary portfolio of cash and investments, which it expects to use to invest primarily in funds it will manage, provide seed capital for new products, expand its geographic presence, develop new markets, and pursue strategic acquisitions and alliances.
• The company’s financial resources provide flexibility to pursue strategic objectives, including acquisitions, lift-outs, seeding new investment strategies, and co-investing, as well as shareholder compensation in the form of share repurchases and dividends.

Weaknesses:

• The company could experience higher volatility in the short-term returns of its funds due to ongoing market uncertainty caused by global trade and geopolitical conflicts and their impact on the global economy and markets.
• The company’s AUM and net income per share-diluted have declined compared to the same period in the previous year, indicating potential challenges in maintaining growth and profitability.

Outlook for the Future

The report does not provide a specific outlook for the future, but it suggests that the company’s financial resources and strategic flexibility could enable it to pursue growth opportunities, such as acquisitions, new product development, and geographic expansion. However, the report also acknowledges the potential for higher market volatility and its impact on the company’s short-term performance.

Overall, the report provides a comprehensive overview of the company’s financial performance, highlighting both its strengths and potential challenges. The company’s ability to navigate the current market environment and execute its strategic initiatives will be crucial in determining its future success.