Bradley Hach

Bradley Hach, on for Bill Katz of TD Cowen, asked about the expected cadence for deploying the capital associated with the $300 million in management fees from AUM not yet paying fees.

Answer

Chief Financial Officer Alan Kirshenbaum stated that he expects most of that capital can be deployed within the next year, with some possibly tailing into 2026. He noted that this, combined with the BDC listing, represents a potential 20%+ increase from 2024 management fee levels.

Bradley Hays from TD Cowen asked if Virtus would consider adjusting its non-GAAP EPS to include its tax shield asset. He also followed up on M&A, inquiring about deal opportunities and valuation multiple expectations, particularly in the illiquid alternatives space.

Answer

President and CEO George Aylward and CFO Michael Angerthal responded that while they believe the tax asset has real economic value and some peers include it in non-GAAP results, they currently prefer to disclose it separately for transparency but will continue to evaluate their reporting. On M&A, Aylward identified private market capabilities as a high-interest area that would be a good strategic fit, while acknowledging that valuation multiples for these assets are currently higher than for traditional strategies.