Company: TROW
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001113169-25-000007
Chunk: 108

Company: PRICE T ROWE GROUP INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 108
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$162.1 11.2 %$169.8 13.3 %

(1) n/m - the percentage change is not meaningful.

(2) Performance-based advisory fees were previously included in investment advisory fees. Prior periods were recast to reflect this change.

Investment advisory fees. The relationship between the change in average assets under management and the change in investment advisory fees for 2024, 2023 and 2022 are presented above. 

In 2024, the increase in investment advisory fees was due to higher average AUM as stronger market returns and appreciation were offset by net outflows over the last two years.

In 2023, the decline in overall advisory revenues was driven by lower average AUM and a mix shift toward lower fee asset classes and vehicles. A lower starting AUM and net outflows in 2023 were the primary drivers of a lower average AUM in 2023. These impacts were partially offset by stronger overall market returns in 2023. 

Performance-based advisory fees in each period were primarily related to alternative strategies.

Page 38

Capital allocation-based income increased net revenues by $46.6 million. The 2024 amount includes an increase of $134.1 million in accrued carried interest from investments in affiliated investment funds, partially offset by $87.5 million of non-cash amortization and impairments related to acquisition-date asset basis differences. Impairments recognized in 2024 were $36.6 million, and should market and performance conditions deteriorate, additional impairments may be recognized in future periods. The firm realized carried interest of $139.6 million compared to $109.8 million in the 2023 period. 

For 2023, capital allocation-based income increased net revenues by $161.9 million. This amount includes an increase of $223.2 million in accrued carried interest, partially offset by $61.3 million of non-cash amortization and impairments related to the difference in the acquisition closing date fair value and the carrying value on the date they were acquired.

A portion of the capital allocation-based income is passed through as compensation and recognized in compensation and related costs, with the unpaid amount reported as non-controlling interest on the consolidated balance sheet. In 2024, the compensation expense was $5.4 million, consisting of $42.5 million related to the accrued carried interest offset in part by $37.1 million in amortization and impairment charges. For 2023, we recognized compensation