BrightSphere Investment Group Inc. (BSIG): Business Model Canvas [11-2024 Updated]

BrightSphere Investment Group Inc. (BSIG) operates in the competitive landscape of asset management, where a well-defined business model is crucial for success. This model encapsulates key elements such as partnerships with investment managers and technology providers, tailored investment solutions for various customer segments, and a revenue structure that includes management and performance fees. Dive deeper to explore how these components work together to create value and drive growth at BSIG.

BrightSphere Investment Group Inc. (BSIG) - Business Model: Key Partnerships

Collaborations with investment managers

BrightSphere Investment Group Inc. collaborates with various investment managers to enhance its asset management capabilities. As of September 30, 2024, the company reported total revenue of $337.8 million, up from $295.4 million in the same period in 2023, indicating a growth trajectory that is supported by these collaborations.

Strategic alliances with financial institutions

BrightSphere has established strategic alliances with key financial institutions. For instance, the company's assets under management (AUM) reached approximately $61.2 billion as of September 30, 2024, a significant increase from $54.8 billion in 2023. These alliances facilitate access to a broader client base and enhance investment product offerings.

Partnerships with technology providers

BrightSphere leverages technology partnerships to optimize its investment strategies and operational efficiencies. The company's investment in technology has been reflected in its operating expenses, which totaled $267.3 million for the nine months ended September 30, 2024, compared to $225.0 million for the same period in 2023. This investment underscores the importance of technology in maintaining competitive advantage and improving service delivery.

Partnership Type	Details	Impact on Financials
Investment Managers	Collaborations with various firms	Revenue increased to $337.8 million in Q3 2024
Financial Institutions	Strategic alliances enhancing AUM	AUM reached approximately $61.2 billion in Q3 2024
Technology Providers	Investment in tech for operational efficiency	Operating expenses of $267.3 million for 9M 2024

BrightSphere Investment Group Inc. (BSIG) - Business Model: Key Activities

Asset management services

As of September 30, 2024, BrightSphere Investment Group Inc. had a total of $120.3 billion in assets under management (AUM) . The company's management fees are primarily driven by the levels of AUM and the fee rates charged to clients, which averaged 38.3 basis points for the three months ended September 30, 2024, and 38.4 basis points for the nine months ended. In comparison, management fees increased by 17.6% to $112.1 million for the three months ended September 30, 2024, up from $95.3 million in the same period of 2023. Over the nine months, management fees rose by 14.7% to $319.8 million compared to $278.7 million in 2023.

Client relationship management

BrightSphere emphasizes maintaining strong client relationships, which is essential for both retaining current clients and attracting new ones. Approximately 16% of AUM, or $20 billion, is in accounts subject to performance fees . The company utilizes performance fees to incentivize performance above benchmark returns, which enhances client satisfaction and loyalty. Performance fees totaled $10.1 million for the three months ended September 30, 2024, and $16.0 million for the nine months.

Performance analysis and reporting

Performance analysis is critical for BrightSphere's operations. The company reported net consolidated Funds’ investment gains of $6.5 million for the nine months ended September 30, 2024, a significant increase from $1.8 million in the previous year. Additionally, the operating income for the nine months was $70.5 million, slightly higher than $70.4 million in the same period of 2023. The company's U.S. GAAP operating margin was reported at 20.9% for the nine months ended September 30, 2024, compared to 23.8% for the same period in 2023.

Metrics	Q3 2024	Q3 2023	9M 2024	9M 2023
Assets Under Management (AUM)	$120.3 billion	N/A	N/A	N/A
Management Fees	$112.1 million	$95.3 million	$319.8 million	$278.7 million
Performance Fees	$10.1 million	$11.2 million	$16.0 million	$13.9 million
Net Consolidated Funds’ Investment Gains	N/A	N/A	$6.5 million	$1.8 million
Operating Income	$27.0 million	$30.2 million	$70.5 million	$70.4 million
U.S. GAAP Operating Margin	21.9%	28.1%	20.9%	23.8%

BrightSphere Investment Group Inc. (BSIG) - Business Model: Key Resources

Skilled investment professionals

BrightSphere Investment Group Inc. employs a team of skilled investment professionals, which is a crucial asset in its business model. As of September 30, 2024, the company reported a total compensation and benefits expense of $189.9 million for the nine months ended September 30, 2024, compared to $150.6 million for the same period in 2023. The investment professionals' expertise is instrumental in managing assets effectively, contributing to the company's revenue generation through management fees and performance fees.

Proprietary investment technology

BrightSphere utilizes proprietary investment technology to enhance its investment strategies and operational efficiency. This technology supports a data-driven approach, enabling the firm to analyze market trends and optimize portfolio management. The company's average assets under management (AUM) increased by 12.8%, from $98.2 billion for the nine months ended September 30, 2023, to $110.8 billion for the same period in 2024. The growth in AUM is a testament to the effectiveness of its technology in attracting and retaining clients.

Established brand reputation

BrightSphere's established brand reputation is a key resource that facilitates client trust and loyalty. The firm reported management fees of $319.8 million for the nine months ended September 30, 2024, up from $278.7 million in the same period in 2023, indicating strong market positioning. The brand's credibility is further supported by its performance, with performance fees rising from $13.9 million in 2023 to $16.0 million in 2024. This reputation is critical in a competitive investment landscape, helping to secure new business and maintain existing client relationships.

Key Resource	Details	Financial Impact
Skilled Investment Professionals	Total compensation and benefits expense for investment professionals	$189.9 million (2024), $150.6 million (2023)
Proprietary Investment Technology	Average AUM growth due to effective technology	$110.8 billion (2024), $98.2 billion (2023)
Established Brand Reputation	Management fees and performance fees reflecting brand strength	Management Fees: $319.8 million (2024), $278.7 million (2023) Performance Fees: $16.0 million (2024), $13.9 million (2023)

BrightSphere Investment Group Inc. (BSIG) - Business Model: Value Propositions

Tailored investment solutions for clients

BrightSphere Investment Group Inc. (BSIG) offers customized investment management solutions primarily targeting institutional clients. The company operates through its subsidiary, Acadian Asset Management, which specializes in creating tailored strategies that leverage data and technology across various asset classes. As of September 30, 2024, BSIG managed approximately $125 billion in assets under management (AUM) .

Expertise in diverse asset classes

BSIG has demonstrated expertise across a wide range of asset classes, including global equities, fixed income, and alternative investments. The company’s Quant & Solutions segment focuses on factor-based investment processes that utilize computational techniques for investment selection and risk management. During the nine months ended September 30, 2024, the company reported ENI revenue of $337.8 million, showcasing its capacity to generate significant income through its diversified investment strategies.

Strong historical performance and risk management

BrightSphere emphasizes strong historical performance coupled with robust risk management practices. For the three months ending September 30, 2024, the firm reported net income attributable to controlling interests of $16.9 million, with diluted earnings per share at $0.45 . The company utilizes a profit-sharing model that aligns the interests of management with those of its investors, further enhancing its commitment to performance-driven results .

Metric	September 30, 2024	September 30, 2023	Change (%)
Assets Under Management (AUM) ($ billion)	125	115	8.7%
ENI Revenue ($ million)	337.8	295.4	14.3%
Net Income ($ million)	16.9	19.6	-13.8%
Diluted Earnings Per Share ($)	0.45	0.46	-2.2%

BrightSphere Investment Group Inc. (BSIG) - Business Model: Customer Relationships

Personalized client service

BrightSphere Investment Group Inc. (BSIG) focuses on delivering highly personalized client service to its institutional investors. The company emphasizes tailored investment strategies that cater to specific client needs. This personalized approach is evident in their management fees, which are largely asset-based and fluctuate based on the performance of financial markets and investor asset flows.

Regular performance updates and consultations

BSIG engages in regular performance updates and consultations with clients. For the nine months ended September 30, 2024, the company reported management fee revenue of $319.8 million, up from $278.7 million for the same period in 2023. This increase reflects successful client engagement and retention strategies. Furthermore, the company’s net income attributable to controlling interests for the same period was $42.5 million, indicating strong operational performance, which is communicated to clients during consultations.

Educational resources and market insights

To enhance client relationships, BSIG provides educational resources and market insights. This initiative not only supports informed decision-making among clients but also strengthens trust and loyalty. As of September 30, 2024, BSIG's total revenue reached $337.8 million, an increase from $295.4 million in the same period the previous year, highlighting the effectiveness of its educational efforts in driving client engagement.

Metric	Q3 2024	Q3 2023	Change (%)
Management Fee Revenue ($ million)	112.1	95.3	17.8
Performance Fee Revenue ($ million)	10.1	11.2	-9.8
Total Revenue ($ million)	123.1	107.3	14.7
Net Income ($ million)	19.0	19.8	-4.0
Earnings Per Share (Basic)	0.46	0.47	-2.1

Overall, BrightSphere Investment Group Inc. maintains a robust framework for customer relationships that encompasses personalized service, regular updates, and educational resources, all of which are crucial for the retention and satisfaction of their institutional clients.

BrightSphere Investment Group Inc. (BSIG) - Business Model: Channels

Direct sales through financial advisors

BrightSphere Investment Group Inc. relies on a network of financial advisors to facilitate direct sales of its investment products. As of September 30, 2024, the company reported total assets under management (AUM) of approximately $120.3 billion, reflecting a significant increase from $97.4 billion in the same period the previous year. Financial advisors play a crucial role in guiding clients towards BrightSphere’s investment offerings, which include various asset management strategies tailored to meet specific client needs.

Online platforms for client engagement

The company has developed robust online platforms to enhance client engagement and streamline communication. These digital interfaces provide clients with access to their portfolios, performance metrics, and market insights. In the nine months ending September 30, 2024, BrightSphere generated management fee revenue of $319.8 million, up from $278.7 million year-over-year. This increase can be attributed in part to improved online client engagement strategies that facilitate easier access to services and information, fostering stronger client relationships.

Institutional partnerships for larger accounts

BrightSphere also focuses on forming institutional partnerships to cater to larger accounts. Approximately 80% of the management fees for the three months ended September 30, 2024, were derived from average AUM, which is significantly influenced by institutional client inflows. The firm’s ability to secure institutional partnerships has been pivotal in achieving net inflows, which totaled $0.5 billion for the third quarter of 2024, indicating a positive trend in institutional asset growth.

Channel	Details	Financial Impact (9M 2024)
Direct Sales	Through financial advisors	Total AUM: $120.3 billion
Online Platforms	Client engagement and information access	Management Fee Revenue: $319.8 million
Institutional Partnerships	Partnerships securing large accounts	Net Inflows: $0.5 billion

BrightSphere Investment Group Inc. (BSIG) - Business Model: Customer Segments

High-net-worth individuals

BrightSphere Investment Group Inc. (BSIG) serves high-net-worth individuals (HNWIs) by providing personalized investment management services. As of September 30, 2024, the company's total assets under management (AUM) were $120.3 billion. Approximately 16% of this AUM, or about $19.2 billion, is in accounts subject to performance fees. The average fee rate for management is approximately 38 basis points, which translates to annual management fee revenue of about $46 million for a 10% change in AUM.

Institutional investors (pensions, endowments)

BSIG targets institutional investors, including pension funds and endowments, by offering diversified investment strategies and tailored solutions. The company generated approximately $295.4 million in economic net income (ENI) revenue for the nine months ended September 30, 2023. Institutional clients represent a significant portion of this revenue, with a strong focus on long-term investment performance. The company reported ENI operating earnings of $74.3 million for the same period.

Retail investors

Retail investors are another key customer segment for BSIG. The firm provides access to its investment products through various channels, allowing individual investors to participate in its investment strategies. In the nine months ended September 30, 2024, BSIG's management fee revenue from retail accounts was approximately $319.8 million, reflecting growth in retail investor engagement. The company also focuses on enhancing its product offerings to attract more retail clients, contributing to its overall growth strategy.

Customer Segment	Assets Under Management (AUM)	Percentage of AUM in Performance Fee Accounts	Average Management Fee Rate	Estimated Annual Management Fee Revenue for 10% AUM Change
High-net-worth individuals	$120.3 billion	16% ($19.2 billion)	38 basis points	$46 million
Institutional investors	N/A	N/A	N/A	$295.4 million (ENI revenue)
Retail investors	N/A	N/A	N/A	$319.8 million (management fee revenue)

BrightSphere Investment Group Inc. (BSIG) - Business Model: Cost Structure

Employee compensation and benefits

Total U.S. GAAP compensation and benefits expense for the nine months ended September 30, 2024, was $189.9 million, compared to $150.6 million for the same period in 2023. Fixed compensation and benefits specifically accounted for $72.3 million in 2024, increasing from $70.2 million in 2023.

Variable compensation for the same period was $83.6 million, up from $74.4 million in 2023. Affiliate key employee distributions also increased significantly to $7.4 million in 2024 from $3.9 million in 2023.

Technology and operational expenses

For the three months ended September 30, 2024, total ENI operating expenses amounted to $53.9 million, compared to $47.4 million for the same period in 2023. This includes $24.9 million in general and administrative expenses, which increased from $19.8 million year-over-year.

Depreciation and amortization for the same period were consistent at $4.5 million. The company's investment in technology and operational capabilities has led to a notable rise in general and administrative expenses, reflecting ongoing growth initiatives.

Marketing and client acquisition costs

Marketing and client acquisition costs are embedded within general and administrative expenses. For the nine months ended September 30, 2024, general and administrative expenses totaled $68.9 million, an increase from $62.8 million in 2023, indicating a continued focus on enhancing client engagement and acquisition strategies.

Performance fees also contribute to client acquisition costs, with approximately $20 billion, or 16% of assets under management (AUM), being in accounts with performance fee features. The increase in management fees from $278.7 million in 2023 to $319.8 million in 2024 also reflects the effectiveness of these initiatives.

Expense Category	2024 (in millions)	2023 (in millions)
Total Compensation and Benefits	189.9	150.6
Fixed Compensation and Benefits	72.3	70.2
Variable Compensation	83.6	74.4
Affiliate Key Employee Distributions	7.4	3.9
General and Administrative Expenses	68.9	62.8
Marketing and Client Acquisition Costs	Inferred in G&A	Inferred in G&A

BrightSphere Investment Group Inc. (BSIG) - Business Model: Revenue Streams

Management fees based on assets under management

BrightSphere Investment Group Inc. (BSIG) generates significant revenue through management fees, which are calculated based on the assets under management (AUM). As of September 30, 2024, the total assets under management were $120.3 billion, reflecting an increase of $22.9 billion or 23.5% compared to $97.4 billion a year earlier.

For the three months ended September 30, 2024, management fees totaled $112.1 million, up from $95.3 million for the same period in 2023, marking a 17.6% increase. Over the nine months ended September 30, 2024, management fees reached $319.8 million, compared to $278.7 million for the same period in 2023, representing a 14.7% increase.

Period	Management Fees ($ millions)	AUM ($ billions)	Average AUM ($ billions)	Basis Points (bps)
Q3 2024	112.1	120.3	116.4	38.3
Q3 2023	95.3	97.4	100.5	37.6
9M 2024	319.8	120.3	110.8	38.4
9M 2023	278.7	97.4	98.2	37.9

Performance fees from exceeding benchmarks

Performance fees at BSIG are derived from accounts that exceed specified benchmarks. As of September 30, 2024, approximately $20 billion, or 16% of AUM, were in accounts with performance fee features. For the three months ended September 30, 2024, performance fees amounted to $10.1 million, a slight decline from $11.2 million in the same period of 2023. However, for the nine months ended September 30, 2024, performance fees increased to $16.0 million from $13.9 million in the previous year.

Period	Performance Fees ($ millions)	AUM with Performance Fee Features ($ billions)
Q3 2024	10.1	20.0
Q3 2023	11.2	20.0
9M 2024	16.0	20.0
9M 2023	13.9	20.0

Advisory fees for consulting services

In addition to management and performance fees, BSIG also earns advisory fees from consulting services provided to clients. The specific revenue generated from advisory services is not detailed in the provided data, but it forms an integral part of BSIG's overall revenue model, contributing to the diverse income streams from client engagements.

Updated on 16 Nov 2024

Resources:

1. BrightSphere Investment Group Inc. (BSIG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of BrightSphere Investment Group Inc. (BSIG)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View BrightSphere Investment Group Inc. (BSIG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.