10-KPeriod: FY2022

AFFILIATED MANAGERS GROUP, INC. Annual Report, Year Ended Dec 31, 2022

Filed February 17, 2023For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported its 2022 fiscal year results, showcasing a strong performance driven by strategic investments and a notable gain from the sale of its equity interest in BPEA. Despite a 20% decrease in overall assets under management (AUM) to $651 billion, largely due to market downturns, the company demonstrated resilience. Aggregate fees saw a slight decrease of 1% to $5.56 billion, primarily due to lower asset-based fees, though performance-based fees showed an increase. Net income attributable to controlling interest surged significantly, largely due to a $641.9 million gain from the BPEA transaction. The company continued its commitment to returning capital to shareholders, repurchasing approximately $718 million of its common stock during the year, and maintained its investment-grade credit ratings. AMG's strategy remains focused on partnering with high-quality independent investment management firms in growth areas like private markets, liquid alternatives, and sustainable investing. The company made strategic investments in Systematica Investments and Peppertree Capital Management, Inc., reinforcing its focus on long-term value creation. While facing industry headwinds such as increased competition and shifts towards lower-fee products, AMG's diversified business model and focus on specialized strategies position it to navigate the evolving investment landscape. Investors should monitor the impact of market volatility on AUM and fee generation, as well as the company's ongoing investment strategy and capital allocation decisions.

Financial Highlights

40 data points
Beta

Revenue

$2.33B

Net Income

$1.15B

49.2% Net Margin

EPS (Diluted)

$25.35

Total Assets

$8.88B

Cash & Equivalents

$429.20M

Free Cash Flow

$1.04B

Financial Statements
Beta
Revenue$2.33B
SG&A Expenses$385.50M
Operating Expenses$1.67B
Interest Expense$114.40M
Net Income$1.15B
EPS (Basic)$29.77
EPS (Diluted)$25.35
Shares Outstanding (Basic)38.50M
Shares Outstanding (Diluted)49.00M

Key Highlights

  • 1Assets Under Management (AUM) decreased by 20% to $651 billion as of December 31, 2022, primarily impacted by market conditions.
  • 2Aggregate fees saw a marginal decline of 1% to $5.56 billion for the fiscal year 2022, with a decrease in asset-based fees partially offset by an increase in performance-based fees.
  • 3Net income (controlling interest) significantly increased to $1,145.9 million, largely driven by a $641.9 million gain from the sale of the BPEA equity interest.
  • 4The company actively returned capital to shareholders, repurchasing $718 million of common stock in 2022, demonstrating a commitment to enhancing shareholder value.
  • 5Strategic investments were made in Systematica Investments and Peppertree Capital Management, Inc., aligning with AMG's focus on high-growth areas within the investment management industry.
  • 6The company maintains strong credit ratings (A3 by Moody's, BBB+ by S&P), reflecting its stable financial position.
  • 7Despite market challenges and competitive pressures, AMG's diversified partnership model and focus on differentiated investment strategies remain key strengths.

Frequently Asked Questions

In 2022, AMG reported a significant increase in Net Income (controlling interest) to $1,145.9 million, largely due to a $641.9 million gain from the sale of its equity interest in BPEA. While total Assets Under Management (AUM) decreased by 20% to $651 billion, primarily due to market downturns, aggregate fees saw a slight 1% decrease to $5.56 billion. The company continued to return capital to shareholders through share repurchases totaling $718 million.

Market conditions, particularly declines in equity markets, led to a 20% decrease in AMG's total AUM to $651 billion as of December 31, 2022. The company experienced outflows in equity strategies, while alternative strategies saw net inflows. This decline in AUM directly impacted asset-based fees, which decreased by 3%.

AMG's strategy focuses on partnering with high-quality, independent investment management firms ('Affiliates') that operate in areas of secular growth and long-term client demand. This includes investments in private markets, liquid alternatives, sustainable investing, wealth management, and Asia. The company aims to generate long-term value by providing growth capital, distribution, and strategic value-added capabilities to its Affiliates, while also returning excess capital to shareholders through share repurchases.

The most significant transaction in 2022 was the sale of AMG's equity interest in Baring Private Equity Asia (BPEA) to EQT, which resulted in a gain of $641.9 million. The company also completed minority investments in Systematica Investments and Peppertree Capital Management, Inc., underscoring its strategic focus on growth areas.