VIRTUS INVESTMENT PARTNERS, INC.VRTS
VIRTUS INVESTMENT PARTNERS, INC. Fair Value Disclosure
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 17, as of December 31, 2025 and 2024 by fair value hierarchy level were as follows:
| December 31, 2025 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents | $ | 340,276 | $ | — | $ | — | $ | 340,276 | |||||||||||||||
| Investment securities - fair value | |||||||||||||||||||||||
| Sponsored funds | 51,013 | — | — | 51,013 | |||||||||||||||||||
| Equity securities | 22,903 | — | — | 22,903 | |||||||||||||||||||
| Debt securities | — | 2,546 | — | 2,546 | |||||||||||||||||||
| Nonqualified retirement plan assets | 20,090 | — | — | 20,090 | |||||||||||||||||||
| Total assets measured at fair value | $ | 434,282 | 2,546 | $ | — | $ | 436,828 | ||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration | $ | — | $ | — | $ | 20,800 | $ | 20,800 | |||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | — | $ | 20,800 | $ | 20,800 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents | $ | 225,736 | $ | — | $ | — | $ | 225,736 | |||||||||||||||
| Investment securities - fair value | |||||||||||||||||||||||
| Sponsored funds | 63,296 | — | — | 63,296 | |||||||||||||||||||
| Equity securities | 19,019 | — | — | 19,019 | |||||||||||||||||||
| Debt securities | — | 1,456 | — | 1,456 | |||||||||||||||||||
| Nonqualified retirement plan assets | 15,159 | — | — | 15,159 | |||||||||||||||||||
| Total assets measured at fair value | $ | 323,210 | 1,456 | $ | — | $ | 324,666 | ||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Contingent consideration | $ | — | $ | — | $ | 36,100 | $ | 36,100 | |||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | — | $ | 36,100 | $ | 36,100 | |||||||||||||||
The following is a discussion of the valuation methodologies used for the Company's assets and liabilities measured at fair value.
Cash equivalents represent investments in money market funds. Cash investments in money market funds are valued using published net asset values and are classified as Level 1.
Sponsored funds represent investments in funds for which the Company acts as the investment manager. The fair value of U.S. retail funds and global funds are determined based on their published net asset values and are categorized as Level 1. The fair value of closed-end funds and ETFs is determined based on the official closing price on the exchange on which they are traded and are categorized as Level 1.
Equity securities represent securities traded on active markets, are valued at the official closing price (typically the last sale or bid) on the exchange on which the securities are primarily traded and are categorized as Level 1.
Debt securities represent investments in corporate and government bonds. The fair values of corporate and government bonds traded on active markets, are valued at the official closing price on the exchange on which the securities
are primarily traded and are categorized as Level 1. Debt securities for which closing prices are not readily available or are deemed to not reflect readily available market prices, and are valued using an independent pricing service, are categorized as Level 2.
Nonqualified retirement plan assets represent U.S. retail funds within the Company's nonqualified retirement plan whose fair value is determined based on their published net asset value and are categorized as Level 1.
Contingent consideration represents liabilities associated with contingent payment arrangements made in connection with the Company's business combinations. In these contingent payment arrangements, the Company agrees to pay additional transaction consideration to the seller based on future performance. Contingent consideration is remeasured at fair value each reporting date using a simulation model or an income approach valuation technique with the assistance of an independent valuation firm and approved by management and are categorized as Level 3.
The following table presents a reconciliation of beginning and ending balances of the Company's contingent consideration liabilities:
| (in thousands) | 2025 | 2024 | |||||||||
| Contingent consideration, beginning of year | $ | 36,100 | $ | 56,200 | |||||||
| Reduction for payments made | (13,086) | (14,492) | |||||||||
| Increase (reduction) of liability related to re-measurement of fair value | (2,214) | (5,608) | |||||||||
| Contingent consideration, end of year | $ | 20,800 | $ | 36,100 | |||||||
The contingent consideration liability at December 31, 2025 of $20.8 million, is related to the NFJ Group transaction. This liability is measured using an income approach valuation technique. The most significant unobservable inputs used relate to the revenue growth rates, discount rates (range of 5.43% - 5.53%) and the market price of risk adjustment (5.80%).
Cash, accounts receivable, accounts payable and accrued liabilities equal or approximate fair value based on the short-term nature of these instruments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2017 | Feb 27, 2018 | |
| 2015 | Feb 24, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.