VRTS
VRTS
Accumulate 2026-04-06
Model
DCF
Price at Report
$127.26
Base IV
$183.58
Bear IV
$93.03
Bull IV
$313.49
Entry Zone: 88-169 · Sell Above: 266
Bore Family Office
Valuation Report — Virtus Investment Partners, Inc. (VRTS) • April 6, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.80% • Current Price: $127.26
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Virtus Investment Partners is a boutique asset manager with $175+ billion in assets under management (AUM), distributed through 20+ affiliated investment managers across equity, fixed income, multi-asset, and alternative strategies. VRTS uses a distinctive affiliated multi-manager model — it acquires and seeds specialist investment boutiques while providing centralized distribution, compliance, and operating infrastructure, allowing each affiliate to maintain investment independence and brand identity. Revenue is primarily management fee-based (87%), tied to AUM levels, making it highly sensitive to market levels and fund performance relative to benchmarks. The company faces a secular headwind from passive investing but has diversified into institutional and alternative strategies to partially offset retail equity outflows.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Open-End Funds (Retail) | $494M | 58% | -8.0% | — | Primary distribution; fee-rate sensitive |
| Institutional/Subadvised | $253M | 30% | -3.0% | — | Lower fee rates; more stable AUM |
| Closed-End Funds | $106M | 12% | +2.0% | — | Higher fee rates; AUM market-dependent |
| Blended Growth Rate | — | 100% | -5.3% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 3 — Mature / Steady State: Revenue growing rapidly, approaching breakeven. FCF turning positive — DCF is appropriate with normalized near-breakeven years.
Why this drives model selection: FCF turning positive — DCF appropriate with normalized near-breakeven years.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 14.2% | ≥12% strong |
| FCF Margin | 8.0% | 5–10% adequate |
| Debt / EBITDA | 2.4x | 2–4x moderate |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Contracting | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $979 | $886 | $845 | $907 | $853 |
| Rev YoY Growth | — | -9.5% | -4.6% | +7.3% | -6.0% |
| Gross Margin | 63.4% | 58.1% | 52.2% | 52.3% | 53.0% |
| EBITDA ($M) | $385 | $272 | $223 | $256 | $169 |
| EBITDA Margin | 39.3% | 30.7% | 26.4% | 28.2% | 19.8% |
| Operating Income ($M) | $325 | $197 | $151 | $182 | $169 |
| Operating Margin | 33.2% | 22.2% | 17.9% | 20.1% | 19.8% |
| Net Income ($M) | $208 | $118 | $131 | $122 | $138 |
| Net Margin | 21.2% | 13.3% | 15.5% | 13.5% | 16.2% |
| EPS (diluted) | $26.01 | $15.50 | $17.71 | $16.89 | $19.97 |
| Free Cash Flow ($M) | $660 | $126 | $228 | $-4 | $0 |
| Annual DPS | $4.640 | $6.300 | $7.100 | $8.300 | $9.300 |
| Total Debt ($M) | $400 | $400 | $400 | $400 | $400 |
💹 Capital Return & Share Count Analysis
Net Share Change
-16.0% (2020→2025)
📉 Net reduction — buybacks exceed issuances
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2020 | 8.0M | — | — | — |
| 2021 | 7.5M | -5.9% | $77 | 8.1% |
| 2022 | 7.2M | -4.4% | $107 | 11.7% |
| 2023 | 7.1M | -1.3% | $59 | 6.5% |
| 2024 | 7.0M | -1.7% | $57 | 6.4% |
| 2025 | 6.7M | -3.9% | $71 | 8.3% |
VRTS has consistently bought back shares ($57-107M/yr) since 2021, reducing diluted count from 7.51M to 6.70M (-10.8% cumulative); with only 7M shares outstanding, each $50M buyback is ~4% per-share accretive. Buybacks are funded from operating cash flow with modest leverage; the high-per-share impact makes this one of the most capital-efficient buyback programs in small-cap asset management.
📈 DCF Scenarios
$93
🔴 Bear
$184
📊 Base
$313
🚀 Bull
$127.26
Current Price
$166
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -3.0% | 1.0% | 2.0% | 8.80% | $93 | ▼26.9% |
| 📊 Base | 5.0% | 3.5% | 2.5% | 8.80% | $184 | ▲44.3% |
| 🚀 Bull | 12.0% | 6.0% | 3.0% | 8.80% | $313 | ▲146.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -3.0% | Stage 2: 1.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.09B | $0.08B | $0.08B |
| Year 2 | Stage 1 | $0.08B | $0.07B | $0.15B |
| Year 3 | Stage 1 | $0.08B | $0.06B | $0.22B |
| Year 4 | Stage 1 | $0.08B | $0.06B | $0.27B |
| Year 5 | Stage 1 | $0.08B | $0.05B | $0.32B |
| Year 6 | Stage 2 | $0.08B | $0.05B | $0.37B |
| Year 7 | Stage 2 | $0.08B | $0.04B | $0.41B |
| Year 8 | Stage 2 | $0.08B | $0.04B | $0.45B |
| Year 9 | Stage 2 | $0.08B | $0.04B | $0.49B |
| Year 10 | Stage 2 | $0.08B | $0.03B | $0.53B |
| Terminal | — | TV=$1.2B | PV(TV)=$0.5B (50% of EV) | EV=$1.1B |
| Intrinsic Value | — | — | EV $1.1B − Net Debt → Equity / Shares | $93 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.80%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $1.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.5B). Enterprise Value = PV of FCFs ($0.5B) + PV of TV ($0.5B) = $1.1B. Subtracting net debt gives equity value of $0.7B, divided by shares outstanding = $93 per share.
Base Scenario
Stage 1: 5.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.09B | $0.09B | $0.09B |
| Year 2 | Stage 1 | $0.10B | $0.08B | $0.17B |
| Year 3 | Stage 1 | $0.10B | $0.08B | $0.25B |
| Year 4 | Stage 1 | $0.11B | $0.08B | $0.33B |
| Year 5 | Stage 1 | $0.11B | $0.08B | $0.40B |
| Year 6 | Stage 2 | $0.12B | $0.07B | $0.48B |
| Year 7 | Stage 2 | $0.12B | $0.07B | $0.54B |
| Year 8 | Stage 2 | $0.13B | $0.06B | $0.61B |
| Year 9 | Stage 2 | $0.13B | $0.06B | $0.67B |
| Year 10 | Stage 2 | $0.14B | $0.06B | $0.73B |
| Terminal | — | TV=$2.2B | PV(TV)=$1.0B (57% of EV) | EV=$1.7B |
| Intrinsic Value | — | — | EV $1.7B − Net Debt → Equity / Shares | $184 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.80%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $2.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1.0B). Enterprise Value = PV of FCFs ($0.7B) + PV of TV ($1.0B) = $1.7B. Subtracting net debt gives equity value of $1.3B, divided by shares outstanding = $184 per share.
Bull Scenario
Stage 1: 12.0% | Stage 2: 6.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.10B | $0.09B | $0.09B |
| Year 2 | Stage 1 | $0.11B | $0.10B | $0.19B |
| Year 3 | Stage 1 | $0.13B | $0.10B | $0.29B |
| Year 4 | Stage 1 | $0.14B | $0.10B | $0.39B |
| Year 5 | Stage 1 | $0.16B | $0.10B | $0.49B |
| Year 6 | Stage 2 | $0.17B | $0.10B | $0.59B |
| Year 7 | Stage 2 | $0.18B | $0.10B | $0.69B |
| Year 8 | Stage 2 | $0.19B | $0.10B | $0.79B |
| Year 9 | Stage 2 | $0.20B | $0.09B | $0.88B |
| Year 10 | Stage 2 | $0.21B | $0.09B | $0.97B |
| Terminal | — | TV=$3.8B | PV(TV)=$1.6B (63% of EV) | EV=$2.6B |
| Intrinsic Value | — | — | EV $2.6B − Net Debt → Equity / Shares | $313 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.80%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $3.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1.6B). Enterprise Value = PV of FCFs ($1.0B) + PV of TV ($1.6B) = $2.6B. Subtracting net debt gives equity value of $2.2B, divided by shares outstanding = $313 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.8% | $251 | $272 | $298 | $331 | $374 |
| 7.3% | $224 | $240 | $261 | $286 | $317 |
| 7.8% | $200 | $214 | $230 | $250 | $274 |
| 8.3% | $181 | $192 | $205 | $220 | $239 |
| 8.8% | $164 | $173 | $184 | $196 | $211 |
| 9.3% | $149 | $157 | $165 | $176 | $188 |
| 9.8% | $136 | $142 | $150 | $158 | $168 |
| 10.3% | $124 | $130 | $136 | $143 | $151 |
| 10.8% | $114 | $119 | $124 | $130 | $137 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E (fwd) | EV/EBITDA | FCF Yield | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Virtus Inv. Partners | VRTS | 5.0× | 8.2× | N/M | 7.3% | Current — deep discount |
| Cohen & Steers | CNS | 28.4× | 20.1× | 3.1% | 2.8% | REIT specialist; premium |
| Manning & Napier | MN | 12.5× | 9.4× | 7.2% | 5.8% | Small active manager |
| WisdomTree Invest. | WETF | 18.2× | 12.3× | 4.8% | 2.5% | ETF-focused boutique |
| VRTS 5-yr avg | — | 8.5× | 9.8× | 8.5% | 4.6% | Historical (normalized) |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $26.01 | — | — | — | Actual |
| 2022 | $15.50 | — | — | — | Actual |
| 2023 | $17.71 | — | — | — | Actual |
| 2024 | $16.89 | — | — | — | Actual |
| 2025 | $19.97 | — | — | — | Actual |
| 2026 | $24.11 | $25.44 | $26.69 | 6 | Estimate |
| 2027 | $25.24 | $26.81 | $27.90 | 6 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.0B | — | — | — | Actual |
| 2022 | $0.9B | — | — | — | Actual |
| 2023 | $0.8B | — | — | — | Actual |
| 2024 | $0.9B | — | — | — | Actual |
| 2025 | $0.9B | — | — | — | Actual |
| 2026 | $0.8B | $0.8B | $0.8B | 6 | Estimate |
| 2027 | $0.8B | $0.8B | $0.9B | 6 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Crispin Love | Piper Sandler | Buy | $206 | +61.9% |
| Bill Katz | TD Cowen | Hold | $173 | +35.9% |
| Benjamin Budish | Barclays | Sell | $166 | +30.4% |
| Michael Cyprys | Morgan Stanley | Sell | $125 | -1.8% |
💡 Investment Thesis
- Deep value vs. analyst price targets — 5 analysts have an avg PT of $166 (+30% from current $127); the stock trades at just 5× 2026E EPS ($25.44) — among the cheapest asset managers in the sector despite dividend growth of 12%/yr.
- Dividend growth machine — VRTS has grown dividends from $4.64 → $9.30 (+100%) over 5 years; at $127 stock price, current yield is 7.3%; payout ratio is only ~47% of normalized EPS, leaving room for further growth.
- Active management cycle rotation — passive flows peaked; rising market volatility historically benefits active managers; alternatives scaling through affiliated boutiques adds high-fee AUM.
- Buyback program has reduced share count by 11% from 7.51M to 6.7M shares since 2021; the tiny float makes even modest buybacks per-share accretive.
- Piper Sandler bull case ($206) implies 62% upside based on AUM recovery and earnings normalization; even the bear case ($125, Morgan Stanley) is essentially current price — limited downside at current levels.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2021 (~5 yrs)
Net Insider Buys (12m)
+26,190 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Management Team | Virtus Investment Partners
He was chief of staff to the CEO of Virtus’ former parent from 2002 to 2004 and was chief operating officer of Virtus from 2004 to 2006. He was named president of the company in November 2006.
He was chief of staff to the CEO of Virtus’ former parent from 2002 to 2004 and was chief operating officer of Virtus from 2004 to 2006. He was named president of the company in November 2006.
Virtus Investment Partners Inc. - Corporate Governance - Boa
Virtus Investment Partners is a premier provider of investment solutions to individuals, financial professionals, and institutions. We aim to offer distinguished strategies and original perspectives to help our clients achieve better outcom
Virtus Investment Partners is a premier provider of investment solutions to individuals, financial professionals, and institutions. We aim to offer distinguished strategies and original perspectives to help our clients achieve better outcom
Virtus Investment Partners IncExecutive & Employee Informati
Richard W. Smirl is an Executive Vice President and Chief Operating Officer of the company since May 2021. He joined Virtus in 2021 from Russell Investments, where he worked as the Chief Operating Officer. Prior to this, he
Richard W. Smirl is an Executive Vice President and Chief Operating Officer of the company since May 2021. He joined Virtus in 2021 from Russell Investments, where he worked as the Chief Operating Officer. Prior to this, he
Capital Allocation & Strategy
Home Page | Virtus Investment Partners
Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors · Please select your investor type
Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors · Please select your investor type
Management Team | Virtus Investment Partners
George Aylward is president and chief executive officer of Virtus Investment Partners, Inc. (NYSE: VRTS), and a member of the Board of Directors. He is responsible for setting and executing the firm's strategy to creat
George Aylward is president and chief executive officer of Virtus Investment Partners, Inc. (NYSE: VRTS), and a member of the Board of Directors. He is responsible for setting and executing the firm's strategy to creat
Employee Ratings
Overall Rating
3.4/5 ★★★☆☆
Culture Signal
Positive
✅ Strengths
- work-life balance
- recommend
Employee Review Excerpts
Virtus Partners Reviews: Pros And Cons of Working At Virtus
How satisfied are employees working at Virtus Partners?53% of Virtus Partners employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Virtus Partners 3.4 out of 5 for work life balance, 3
How satisfied are employees working at Virtus Partners?53% of Virtus Partners employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Virtus Partners 3.4 out of 5 for work life balance, 3
Virtus Investment Partners - Intern | Glassdoor
Nov 24, 2025 · Customer service representative · Former employee · Hartford, CT · Recommend · CEO approval · Business Outlook · Pros · Remote Good managers Decent benefits · Cons · No room for upward movement · Show more · Helpful · Share ·
Nov 24, 2025 · Customer service representative · Former employee · Hartford, CT · Recommend · CEO approval · Business Outlook · Pros · Remote Good managers Decent benefits · Cons · No room for upward movement · Show more · Helpful · Share ·
Working at Virtus Investment Partners | Glassdoor
How do employees rate Virtus Investment Partners?Employees rate Virtus Investment Partners 3.3 out of 5 stars based on 37 anonymous reviews on Glassdoor.
How do employees rate Virtus Investment Partners?Employees rate Virtus Investment Partners 3.3 out of 5 stars based on 37 anonymous reviews on Glassdoor.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Accumulate — Virtus Investment Partners, Inc. (VRTS)
Current price: $127.26 | Analyst Avg PT: $165.60
$93
🔴 Bear
$184
📊 Base
$313
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$169 | Begin position |
| Tier 2 — Add | ≤$138 | Add on weakness |
| Tier 3 — Full | ≤$88 | Full allocation |
| Sell Alert | ≥$266 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate VRTS at $125-135 — the stock is priced for deterioration (5× EPS) while the dividend is well-covered at 47% payout ratio and growing at 12%/yr. Base case intrinsic value ~$157 provides 23% upside; bull case $214 implies 68% upside. VRTS is a high-risk/high-reward income compounder — position sizing should reflect the concentrated AUM risk and limited analyst coverage (only 5 analysts). Becomes a Hold above $165 (analyst consensus PT); trim above $190.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Lifecycle Stage Assignment | Classifier failed for VRTS. Analyst judgment: Stage 3 (Mature / Steady State). Asset managers with declining AUM and competitive pressures from passive investing are in a mature-to-declining stage. Revenue has declined from $979M peak (2021) to $853M (2025) with no clear recovery catalyst. Stage 3 is appropriate — the business generates consistent operating income but lacks structural growth drivers. |
| FCF Normalization (Critical) | Reported FCF is highly distorted by changes in trading assets (consolidated investment funds on balance sheet). FY2025 reported FCF = $0; FY2024 = -$4M; FY2023 = $228M — not reflecting true operating cash generation. Normalized FCF = Operating cash flow ex-trading asset movements = approx $90M/yr. This is the basis for the DCF model. All FCF scenarios above reflect normalized operating FCF (not reported). Note: FY2025 EBITDA reported = $169M; normalized FCF after interest, tax, capex ≈ $90M. |
| WACC Build | β = 1.3 (asset managers have high market beta; VRTS small-cap adds idiosyncratic risk). Ke = 4.3% + 1.3 × 5.5% = 11.45% → 11.0%. Corporate debt ~$400M (credit facility; excludes consolidated fund short-term debt). WACC = 8.80%. Higher discount rate is appropriate for a small-cap concentrated AUM-driven business with meaningful secular headwinds. |
| Net Debt Clarification | Balance sheet shows $2.4-2.5B "Total Debt" — this is primarily consolidated fund/trading liabilities (segregated assets and broker-dealer obligations), NOT corporate debt. True corporate net debt = ~$400M revolving credit facility. Using $400M net debt in DCF; erroneously using $2.4B would produce negative equity value. |
| Analyst Coverage Caveat | Only 5 analysts cover VRTS (1 Buy, 2 Hold, 2 Sell). Wide PT range $125-$206. Limited coverage means estimates carry higher uncertainty. Base case anchored to consensus $25.44 EPS (2026) and revenue recovery trajectory. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.