10-KPeriod: FY2013

AFFILIATED MANAGERS GROUP, INC. Annual Report, Year Ended Dec 31, 2013

Filed February 27, 2014For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) presented a strong financial performance for the fiscal year ending December 31, 2013. The company reported a significant increase in Net Income (controlling interest) to $360.5 million, a 107% increase year-over-year, and diluted Earnings Per Share (EPS) rose to $6.55, doubling from the previous year. This robust growth was driven by a substantial increase in Assets Under Management (AUM), which grew by 24% to $537.3 billion, fueled by both strong investment performance and organic net client cash flows. AMG's diversified business model, which involves taking equity stakes in boutique investment management firms, continues to prove effective. The company's strategic focus on internal growth of existing Affiliates and the addition of new high-quality firms contributed to revenue growth of 21% to $2.19 billion. The company also highlighted a healthy cash flow from operations of $957.1 million, demonstrating its ability to generate significant cash to fund its growth strategy, investments, and debt obligations. Looking ahead, AMG is well-positioned to capitalize on further opportunities in the asset management industry.

Financial Highlights

39 data points
Beta

Net Income

$360.50M

EPS (Diluted)

$6.55

Total Assets

$6.32B

Cash & Equivalents

$469.60M

Free Cash Flow

$933.10M

Financial Statements
Beta
SG&A Expenses$427.20M
Operating Expenses$1.55B
Operating Income$634.10M
Interest Expense$87.30M
Net Income$360.50M
EPS (Basic)$6.79
EPS (Diluted)$6.55
Shares Outstanding (Basic)53.10M
Shares Outstanding (Diluted)56.70M

Key Highlights

  • 1Record Net Income (controlling interest) of $360.5 million in 2013, a 107% increase year-over-year.
  • 2Diluted Earnings Per Share (EPS) more than doubled to $6.55 in 2013.
  • 3Assets Under Management (AUM) grew by 24% to $537.3 billion by the end of 2013.
  • 4Revenue increased by 21% to $2.19 billion in 2013, reflecting strong asset growth and performance.
  • 5Generated robust operating cash flow of $957.1 million in 2013.
  • 6Continued strategic investments in new and existing boutique investment management firms.

Frequently Asked Questions

AMG's primary growth driver in 2013 was the significant increase in its Assets Under Management (AUM), which grew by 24% to $537.3 billion. This growth was a result of both strong investment performance across its Affiliates and positive net client cash flows, demonstrating the success of its diversified investment strategy.

AMG experienced a substantial improvement in financial performance in 2013. Net Income (controlling interest) more than doubled, increasing by 107% to $360.5 million, and diluted Earnings Per Share (EPS) also more than doubled to $6.55. Revenue grew by 21% to $2.19 billion, driven by the growth in AUM and strong operating results from its Affiliates.

AMG's growth strategy focuses on a three-pronged approach: the internal growth of its existing investment management firms (Affiliates), making additional investments in high-quality boutique investment management firms, and pursuing strategic transactions and relationships that enhance the growth prospects of its Affiliates. The company believes demographic trends and succession planning needs within the industry will continue to provide investment opportunities.

Economic Net Income is a non-GAAP performance measure that AMG uses to represent its operating performance before non-cash expenses related to acquisitions, such as amortization and deferred taxes on intangibles, and other economic adjustments. For 2013, Economic Net Income was $570.1 million, with Economic Earnings Per Share at $10.31, which management considers to be a key performance benchmark for aligning executive compensation with shareholder value.