10-KPeriod: FY2015

AFFILIATED MANAGERS GROUP, INC. Annual Report, Year Ended Dec 31, 2015

Filed February 25, 2016For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) in its 2015 10-K filing presents a business model focused on acquiring and investing in leading boutique asset management firms. As of December 31, 2015, AMG managed $611.3 billion in assets across over 500 investment products, with a strategic emphasis on active return-oriented strategies rather than passive indexing. The company's innovative partnership approach allows boutique firms to retain operational autonomy and significant equity stakes, aligning incentives and fostering long-term growth. Financially, 2015 saw a slight decrease in Assets Under Management (AUM) to $611.3 billion, primarily due to market fluctuations and foreign exchange impacts, though new affiliate investments partially offset this. Net income attributable to controlling interest rose by 14% to $516.0 million, and diluted EPS increased to $9.28. The company highlights strong performance metrics like EBITDA and Economic Net Income, indicating robust operational performance. AMG continues to focus on strategic investments in new and existing affiliates, debt management, and share repurchases, while noting potential risks related to market volatility, competition, and regulatory changes.

Financial Highlights

43 data points
Beta

Net Income

$509.50M

EPS (Diluted)

$9.17

Total Assets

$7.77B

Cash & Equivalents

$563.80M

Free Cash Flow

$1.17B

Financial Statements
Beta
SG&A Expenses$443.80M
Operating Expenses$1.65B
Operating Income$1.12B
Interest Expense$88.90M
Net Income$509.50M
EPS (Basic)$9.37
EPS (Diluted)$9.17
Shares Outstanding (Basic)54.30M
Shares Outstanding (Diluted)57.20M

Key Highlights

  • 1Managed Assets Under Management (AUM) of $611.3 billion as of December 31, 2015, across more than 500 investment products.
  • 2Focus on active return-oriented strategies, with Global Equities and Alternatives being the largest segments.
  • 3Reported Net Income (controlling interest) of $516.0 million for 2015, a 14% increase year-over-year.
  • 4Diluted Earnings Per Share (EPS) of $9.28 in 2015, up 16% from the previous year.
  • 5Completed several strategic investments in new and existing boutique investment management firms during 2015.
  • 6Maintained a strong liquidity position with $563.8 million in cash and cash equivalents as of December 31, 2015.
  • 7Navigated a competitive landscape and regulatory environment inherent to the asset management industry.

Frequently Asked Questions

AMG's core strategy is to invest in and partner with leading boutique investment management firms globally. They focus on providing these 'Affiliates' with centralized support in areas like marketing, distribution, and operations, while allowing them to retain operational autonomy and significant equity ownership. This partnership model aims to drive shareholder value through the growth of existing affiliates and investments in new ones.

In 2015, AMG's Assets Under Management (AUM) saw a slight decrease to $611.3 billion, mainly due to market performance and currency fluctuations, though new affiliate acquisitions provided some offset. Despite this, Net Income attributable to controlling interest grew by 14% to $516.0 million, and diluted Earnings Per Share (EPS) rose by 16% to $9.28, indicating strong underlying operational performance.

AMG faces several risks, including the dependence of its revenue on market returns and investment performance, as fees are often asset-based. Competition in the asset management industry is intense, and regulatory changes can impact operations. Furthermore, the success of its growth strategy relies heavily on identifying and successfully integrating new boutique firms, and the company's reputation is critical to maintaining client trust and attracting new business.

AMG did not declare a cash dividend for the periods presented in the 2015 filing. The company's current intention is to retain earnings to finance new affiliate investments, repay indebtedness, and for other general corporate purposes, rather than paying cash dividends.