Quality of Earnings, Investment Management

June 14, 2024

WHITEPAPER | Assessing Earnings Quality in the Investment Management Industry

Earnings are a crucial reference point in determining transaction prices negotiated by buyers and sellers of RIA firms. However, reported earnings, even when audited and presented in accordance with Generally Accepted Accounting Principles (GAAP), have limitations. GAAP earnings are backward-looking, reflecting how a business has performed under specific rules in the past. While these historical earnings have their uses, buyers in the RIA industry focus more on the future—what’s visible through the windshield, not the rearview mirror.

In this whitepaper, we illustrate how buyers and sellers benefit from a quality of earnings report that extracts a company’s sustainable earning power from the thicket of historical GAAP earnings. We review the most common earnings adjustments applied in QofE analyses and review the role of working capital and capital expenditures as the links between EBITDA and cash flow available to buyers.

Download
Download Whitepaper

Continue Reading

Alternative Asset Managers Face a Reset in Public Market Valuations
Alternative Asset Managers Face a Reset in Public Market Valuations
Alternative asset managers experienced a significant contraction in public-market valuation multiples through September 2026 despite continued growth in assets under management and revenue. The divergence between operating growth and market performance highlights the importance of profitability, recurring revenue, and firm-specific fundamentals when assessing asset management businesses.
RIA M&A Update: Q3 2026
RIA M&A Update: Q3 2026
RIA M&A activity remained strong through August 2026 despite moderating transaction volume, with large acquisitions driving asset totals and private equity-backed consolidators remaining active. An examination of deal trends, minority investments, and transaction structures highlights important considerations for RIA buyers, sellers, and owners evaluating succession options.
RIA Valuation Insights Blog Investment Management
Read Now about RIA M&A Update: Q3 2026
RIA Market Update: Q3 2026
RIA Market Update: Q3 2026
Publicly traded investment management firms advanced in Q3 2026, with both large and small traditional managers outperforming the broader market while alternative asset managers continued to lag.
RIA Valuation Insights Blog Investment Management
Read Now about RIA Market Update: Q3 2026

Cart

Your cart is empty