Virtus Investment Partners (VRTS) investor relations material

Executive summary

• First quarter 2026 saw an 8% increase in sales to $5.8 billion, but net outflows totaled $8.4 billion, primarily from equity strategies, resulting in AUM declining to $149.0 billion.

• Completed a majority investment in Keystone National Group for $200 million, contributing $2.3 billion to AUM and expanding into private credit markets.

• Reported diluted EPS of $1.05 and adjusted EPS of $5.38, both down significantly due to seasonal expenses and non-recurring charges.

• Ongoing product innovation included new actively managed ETFs and the reopening of the SMidCap core strategy.

• Returned capital to shareholders through $10 million in share repurchases and quarterly dividend payments.

Financial highlights

• Assets under management at March 31, 2026, were $149.0 billion, down from $159.5 billion sequentially and 11% year-over-year.

• Average AUM for the quarter was $158.2 billion, down 8.9% year-over-year.

• Investment management fees as adjusted were $163.5 million, down 3% sequentially; GAAP fees were $169.1 million, down 9.1% year-over-year.

• Operating income as adjusted was $43.8 million, with a margin of 24.0%; GAAP operating income was $15.4 million, with a margin of 7.7%.

• Adjusted earnings per share were $5.38, down from $7.16 in Q4 and 16% lower year-over-year; GAAP EPS was $1.05, down 74.1% year-over-year.

Outlook and guidance

• April flows and sales trends improved over March, with ETF sales and net flows at their highest since September.

• Management expects continued headwinds for quality-oriented equity strategies and ongoing pressure on net flows.

• Employment expenses as adjusted expected to be 51%-53% of revenues in Q2, at the high end due to lower equity AUM.

• Average fee rate projected at 43-45 basis points in Q2, reflecting a full quarter of Keystone.

• Effective tax rate expected to be 14%-15% going forward; GAAP tax rate was 53.8% due to valuation allowance changes.