Acadian Asset Management (NYSE:AAMI) executives said the firm ended 2025 with record assets under management, strong organic growth, and expanding operating margins, while noting that GAAP earnings comparisons were affected by higher non-cash items tied to equity and profits-interest valuations.
Fourth-quarter results highlight record AUM and strong flows
President and CEO Kelly Young told investors Acadian delivered “breakout results across assets under management and profitability” in the fourth quarter and full year 2025. The firm posted $5.4 billion of positive net client cash flows in Q4, which management said represented 3% of beginning period AUM, driven by enhanced and extension strategies as well as emerging markets equity.
On an economic net income (ENI) basis, management emphasized that results were stronger. Young said ENI diluted EPS was $1.32, up 2%, aided by share repurchases, and called it the highest quarterly ENI EPS in the firm’s history. The firm’s Adjusted EBITDA increased 1% in the quarter.
Full-year 2025: $29 billion of net inflows and higher profitability
For the full year, Young said Acadian produced $29 billion in net client cash flows, which combined with “robust equity markets” drove AUM to an all-time high near $178 billion at year-end. She said the firm’s U.S. GAAP net income attributable to controlling interests declined 6% and EPS was down 0.5% versus the prior year, again citing increased non-cash valuation-related expenses.
CFO Scott Hynes said the business is managed using ENI metrics, which he said better reflect underlying operating performance. Management reported that 2025 ENI total revenue rose to nearly $549 million, up 9% from 2024, and that Acadian expanded its ENI margin by more than two percentage points to 35.5%. Young also highlighted record annual ENI EPS of $3.25, up 18% year-over-year, supported by stronger ENI earnings and capital returns through buybacks.
Hynes added that full-year adjusted EBITDA increased 9% from 2024, driven by “significant growth in recurring management fees.”
Management fees rise with higher average AUM; margins expand
Hynes said Q4 2025 management fees were $146 million, up 32% from Q4 2024, reflecting a 43% increase in average AUM tied to positive flows and market appreciation. Total ENI revenue was $170 million, up 2% from the prior-year quarter, as base management fee growth was “partially offset by a decline in performance fees.”
On expenses, Hynes said Q4 2025 ENI operating expenses increased 5%, driven by higher sales-based compensation and general and administrative costs, including continued investments in IT and infrastructure. Despite higher expenses, operating leverage improved: Acadian’s ENI operating margin expanded 338 basis points to 45.7% from 42.3% in Q4 2024, while the operating expense ratio fell 10 percentage points to 40.9%.
Hynes said variable compensation declined 18% year-over-year in Q4 due to lower performance fee-related compensation and higher non-cash compensation. The Q4 variable compensation ratio fell to 29.4% from 35.7% a year ago. For full-year 2025, the variable comp ratio decreased to 39.4% from 42.3% in 2024. Looking ahead, and assuming a similar revenue mix and level as 2025, Hynes said contractual allocations would imply a 2026 variable compensation ratio of approximately 40% to 43%.
Investment performance and strategy backdrop
Young said Acadian’s investment performance “remains strong despite a challenging 2025,” describing a market environment in the second half of the year where “crowding in lesser quality, high beta stocks” created headwinds for signals such as quality that underpin the firm’s approach. She noted that toward the end of the year, value and quality-oriented stocks performed better, and Acadian’s performance improved in Q4.
As of Dec. 31, 2025, Young said the firm’s five major implementations—global equity, emerging markets equity, non-U.S. equity, small-cap equity, and enhanced equity—had 100% of assets outperforming benchmarks across 3-, 5-, and 10-year periods. She added that the firm’s consolidated revenue-weighted five-year annualized excess return was 4.7%, while the asset-weighted figure was 3.8%. Management said 95% of strategies by revenue weight and 91% by asset weight outperformed their benchmarks across 3-, 5-, and 10-year periods.
Balance sheet actions and capital returns
Hynes said that as of Dec. 31, 2025, Acadian had $101 million in cash and $97 million of seed investments on the balance sheet, along with a $200 million balance on its new term loan credit facility and no balance on its revolver. He said the company refinanced its senior notes during Q4, reducing gross debt by $75 million and lowering gross leverage to 1x at year-end 2025 from 1.5x at year-end 2024, with net leverage at 0.5x.
Acadian also detailed its history of buybacks: Hynes said outstanding diluted shares fell 58% from 86 million in Q4 2019 to 35.8 million in Q4 2025, while $1.4 billion in excess capital was returned through buybacks and dividends over that period. Repurchases were suspended in Q4 2025 to support deleveraging, though the firm repurchased 1.8 million shares in 2025, a 5% reduction versus the end of 2024.
The board declared an interim dividend of $0.10 per share, up from $0.01, payable March 27, 2026, to shareholders of record as of March 13, 2026. In the Q&A, Hynes said the dividend increase should not be viewed as an “either/or” choice against repurchases and that the company intends to be “athletic” in capital returns, adding that the pause in repurchases tied to refinancing is over. Over the long term, he said Acadian intends to move nearer to a net cash position, though not “in a rush.”
On the business outlook, Young said the institutional pipeline remains “very strong,” describing it as diverse by product, geography, and vehicle, with continued interest in enhanced and extension strategies and a “resurgence” of interest in emerging markets as clients seek diversification away from the U.S. In closing remarks, she reiterated confidence in 2026 and cited a 25% increase in net client cash flow, a 52% increase in AUM, and 32% growth in management fees in the period discussed on the call.
About Acadian Asset Management (NYSE:AAMI)
Acadian Asset Management is a global investment management firm specializing in quantitative research and systematic strategies. Since its founding in 1986, the firm has developed data-driven models designed to identify and capture investment opportunities across equity and fixed income markets. By integrating advanced analytics, proprietary risk management tools and a disciplined investment process, Acadian seeks to deliver consistent performance for institutional clients.
The firm’s core offerings include institutional equity portfolios, fixed income strategies and multi-asset solutions.
