April AUM - NAV-Led Beat, EQ Attrition Remains Elevated; Affirm Hold

Research evidence excerpt

April AUM - NAV-Led Beat, EQ Attrition Remains Elevated; Affirm Hold

TD Cowen Virtus Investment Partners

Global Research May 12, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Traditional Asset Managers:

We value the sector primarily on a SOTP valuation framework. Within this framework, we apply

a target P/E to base earnings and then add excess cash deployment and/or segment value

contribution. For segment value contribution, we may decompose the platform between legacy

business and Alternatives and/or between legacy platform and key JV initiatives. To set our

target P/E multiple we utilize TD Cowen’s proprietary regression analysis that contrasts net

organic growth against relative (SPX) and absolute P/E multiples. We then adjust these target

multiples to reflect faster/slower relative organic growth prospects (to sector medians for ’25

and ’26) and whether underlying organic growth is accelerating or decelerating. We set our

targets against our 2026 earnings expectations, discounted at the firm’s cost of equity, the

latter using capital asset pricing model, including company specific beta, 7% normalized equity

return and risk-free rate as defined by the 10-year US Treasury Yield.

We make investment recommendations on certain early stage, pre-revenue companies based

upon an assessment of their business model, technology, probability of market success,

and the potential market opportunity, balanced by an assessment of applicable risks. Such

companies may not be assigned a price target.

Investment Risks

Key investment risks include: 1) major decline in capital markets; 2) further passive and

alternatives encroachment; 3) pricing pressure – idiosyncratic reductions, adverse mix shifts