10-KPeriod: FY2011

AFFILIATED MANAGERS GROUP, INC. Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) operates as a global asset management company with a strategic focus on acquiring equity interests in diverse boutique investment management firms. The company's growth strategy centers on internal growth of existing businesses, strategic investments in new firms, and enhancing the capabilities of its Affiliates through scale economies in distribution, operations, and technology. As of December 31, 2011, AMG managed $327.5 billion in assets across its Mutual Fund, Institutional, and High Net Worth distribution channels. The filing highlights robust revenue growth driven by increasing assets under management and strategic acquisitions, alongside significant investments in global distribution capabilities. Key financial performance indicators show strong revenue increases over the past few years, attributed to both organic growth from net client cash flows and strategic acquisitions of new Affiliates. The company is well-positioned to capitalize on future opportunities in the asset management industry, particularly as founders of boutique firms seek succession planning solutions. However, AMG faces risks including dependence on equity market performance, regulatory changes, and competition, which are detailed in the risk factors section.

Financial Highlights

47 data points
Beta

Net Income

$164.90M

EPS (Diluted)

$3.11

Total Assets

$5.22B

Cash & Equivalents

$449.50M

Free Cash Flow

$692.40M

Financial Statements
Beta
SG&A Expenses$350.80M
Operating Expenses$1.22B
Operating Income$486.10M
Interest Expense$73.80M
Net Income$164.90M
EPS (Basic)$3.18
EPS (Diluted)$3.11
Shares Outstanding (Basic)51.80M
Shares Outstanding (Diluted)53.00M

Key Highlights

  • 1Total assets under management grew to $327.5 billion as of December 31, 2011, up from $320.0 billion in 2010, driven by net client cash flows and investment performance.
  • 2Revenue increased by 26% to $1,704.8 million in 2011, compared to $1,358.2 million in 2010, reflecting growth in average assets under management.
  • 3Net income attributable to controlling interest increased by 19% to $164.9 million in 2011, up from $138.6 million in 2010.
  • 4The company's growth strategy involves acquiring equity interests in high-quality boutique investment management firms, with a focus on firms possessing strong management teams and long-term performance records.
  • 5AMG operates through three principal distribution channels: Mutual Fund, Institutional, and High Net Worth, offering diversification across asset classes and client types.
  • 6Global distribution is a key focus, with offices and operations in international markets to serve a growing non-U.S. client base, which represented 39% of total revenue in 2011.

Frequently Asked Questions

AMG operates as a global asset management company that acquires equity interests in various boutique investment management firms, referred to as 'Affiliates.' AMG's strategy involves partnering with these firms, allowing them to maintain operational autonomy while providing them with enhanced distribution, operational, and technological capabilities. The company aims to generate shareholder value through the internal growth of its existing Affiliates, making new investments, and executing strategic transactions.

In the fiscal year ended December 31, 2011, AMG reported total revenue of $1,704.8 million, a 26% increase from the prior year, driven by a 31% rise in average assets under management. Net income attributable to controlling interest grew by 19% to $164.9 million. Assets under management reached $327.5 billion.

AMG faces several key risks, including its dependence on equity market returns and the investment performance of its Affiliates, as fees are largely asset-based. The company's growth strategy relies on its ability to make successful new investments in boutique firms. Additionally, AMG is subject to the highly regulated financial services industry, with potential impacts from changes in laws and regulations. Other risks include market volatility, counterparty financial stability, and the potential loss of key personnel at its Affiliates.

No, AMG has not declared a cash dividend for the periods presented. The company intends to retain earnings to finance investments in new Affiliates, repay indebtedness, and for other strategic growth initiatives. Furthermore, its credit facility contains limitations on cash dividends.