Virtus Sales Drop to $4.3 Billion as Outflows Widen

The Tip Desk · November 12, 2026 · 3 min read

Third-quarter sales fell 29% from $6.1 billion and net outflows widened to $6.1 billion as AUM ended at $141.4 billion.

Virtus Investment Partners (VRTS), the Hartford-based partnership of boutique investment managers, reported third-quarter sales of $4.3 billion, down 29% from $6.1 billion in the prior quarter, as net outflows widened and assets under management continued to shrink.

Net flows were ($6.1) billion, compared with ($5.6) billion in the second quarter. Ending AUM fell to $141.4 billion from $152.2 billion at June 30, a 7% sequential drop that the company attributed to market performance and net outflows in retail separate accounts, institutional accounts, U.S. retail funds, and global funds, partly offset by positive flows in exchange-traded funds and tender offer funds. Average AUM was $149.5 billion.

Institutional sales were $1.1 billion, including a $0.4 billion collateralized loan obligation issuance, versus $2.2 billion last quarter, which included a large global listed real estate mandate. Retail separate account sales were $1.0 billion, down from $1.2 billion, primarily due to intermediary-sold large and small/mid-cap strategies. Open-end fund sales decreased 18% to $2.2 billion and included $0.4 billion of ETF sales.

Institutional net flows were ($2.2) billion, versus ($0.7) billion in the prior quarter, primarily due to lower sales. Retail separate account net flows improved to ($2.6) billion from ($3.1) billion on lower redemptions. Open-end fund net flows improved to ($1.3) billion from ($1.8) billion, with outflows primarily in equity funds partly offset by positive fixed income flows. Net outflows remained concentrated in quality-oriented equity strategies.

GAAP revenues were $197.6 million, down 2% from $201.4 million in the prior quarter. Adjusted revenues were $180.8 million, down 2% from $183.6 million, as average AUM fell and the average fee rate was essentially unchanged. All-products average management fees earned were 43.0 basis points, versus 43.1 basis points in the second quarter.

GAAP operating income rose to $34.3 million from $27.3 million, a 26% sequential increase, as a 6% drop in operating expenses more than offset the 2% revenue decline. Operating margin expanded to 17.4% from 13.6%. The company said the expense decrease was primarily due to lower employment expenses reflecting a discrete employment expense item in the prior quarter, as other operating expenses increased modestly.

Adjusted operating income increased to $51.8 million from $47.9 million, with adjusted operating margin rising to 28.7% from 26.1%, primarily on lower employment expenses. Adjusted employment expenses fell to $95.5 million from $102.1 million, reflecting a prior-quarter discrete non-cash item and lower variable incentive compensation. Other operating expenses, as adjusted, were $31.8 million.

GAAP net income attributable to Virtus was $22.1 million, or $3.26 a share, down 51% from $45.3 million, or $6.68 a share, in the prior quarter. The $3.26 included $0.74 of fair value adjustments to contingent consideration and $0.45 of fair value adjustments to minority interests, partly offset by ($1.08) of realized and unrealized losses on investments and ($0.24) of restructuring. The GAAP effective tax rate increased to 34% from 16%, reflecting a sequential shift from unrealized gains to unrealized losses.

Adjusted net income attributable to Virtus rose to $39.7 million, or $5.86 a share, from $37.6 million, or $5.54 a share, reflecting higher operating income partly offset by lower interest and dividend income. The adjusted effective tax rate was 14%.

Cash and cash equivalents were $187.2 million at September 30. Gross debt declined to $411.0 million from $427.0 million, primarily a $15 million repayment on the revolving credit facility. Net debt fell to $223.8 million, or 0.9 times EBITDA, from $250.8 million. The company repurchased 64,666 shares for $10.0 million and raised its quarterly dividend 2% to $2.45 a share.