10-KPeriod: FY2012

AFFILIATED MANAGERS GROUP, INC. Annual Report, Year Ended Dec 31, 2012

Filed February 22, 2013For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group (AMG) reported solid performance in its 2012 10-K filing, with assets under management (AUM) growing by 32% to $431.8 billion, driven by a combination of investment performance, organic growth, and strategic new investments in boutique investment management firms like Veritable and Yacktman. Revenue saw a 6% increase year-over-year to $1.81 billion, while Net Income (controlling interest) grew by 6% to $174.0 million. The company's growth strategy continues to focus on acquiring stakes in high-quality boutique firms, leveraging its partnership approach to preserve operational autonomy and entrepreneurial culture. AMG's diversified business model across institutional, mutual fund, and high net worth channels, coupled with its global distribution capabilities, positions it to navigate market fluctuations. Despite a notable $102.2 million impairment of an indefinite-lived intangible asset, the company demonstrated resilience. Looking ahead, AMG remains focused on continued investment in new Affiliates and organic growth, supported by a strong balance sheet and liquidity position, though it also faces ongoing risks related to market volatility, regulatory changes, and competition.

Financial Highlights

47 data points
Beta

Net Income

$174.00M

EPS (Diluted)

$3.28

Total Assets

$6.19B

Cash & Equivalents

$430.40M

Free Cash Flow

$613.20M

Financial Statements
Beta
SG&A Expenses$366.90M
Operating Expenses$1.41B
Operating Income$400.40M
Interest Expense$83.00M
Net Income$174.00M
EPS (Basic)$3.36
EPS (Diluted)$3.28
Shares Outstanding (Basic)51.70M
Shares Outstanding (Diluted)53.00M

Key Highlights

  • 1Assets Under Management (AUM) grew by 32% to $431.8 billion in 2012, significantly outpacing prior year growth.
  • 2Revenue increased by 6% to $1.81 billion, primarily driven by higher AUM, though the revenue-to-AUM ratio saw a slight decline.
  • 3Net Income (controlling interest) rose by 6% to $174.0 million, despite a $102.2 million impairment charge on an indefinite-lived intangible asset.
  • 4Strategic investments in new Affiliates (Veritable, Yacktman) contributed $28 billion to AUM growth in 2012.
  • 5The company's growth strategy relies on both internal growth from existing Affiliates and successful new investments in boutique firms.
  • 6AMG maintained compliance with its credit facility covenants, demonstrating a healthy liquidity and debt management position.
  • 7The company experienced strong cash flow from operations, totaling $633.2 million in 2012, though it was lower than the prior year.

Frequently Asked Questions

AMG's primary growth strategy continued to be focused on acquiring equity interests in high-quality boutique investment management firms. This strategy is complemented by driving internal growth within its existing Affiliates and pursuing strategic transactions that enhance the capabilities and growth prospects of its Affiliates.

AMG recorded a $102.2 million impairment charge related to an indefinite-lived intangible asset at one of its Affiliates. This charge impacted operating income and net income, though the company's overall revenue and net income still showed growth due to other factors.

AMG employs a partnership approach, maintaining meaningful equity interests in its Affiliates while allowing them operational autonomy. This structure is designed to preserve their entrepreneurial culture and independence, align incentives through equity ownership, and provide benefits of scale in distribution, operations, compliance, and technology.

AMG funds its operations and investments primarily through cash generated from operations, borrowings under its credit facility, and the issuance of debt and equity. The company monitors its leverage ratios and maintains a significant amount of capacity under its credit facility. Principal uses of cash include investments in Affiliates, debt repayment, and working capital.