10-QPeriod: Q1 FY2010

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 10, 2010For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported a significant improvement in its financial performance for the first quarter of 2010 compared to the same period in 2009. Revenue surged by 41% to $251.0 million, driven by a 33% increase in average assets under management, primarily due to strong investment performance. Net Income attributable to controlling interest more than doubled, rising 187% to $17.5 million, translating into a substantial increase in diluted Earnings Per Share to $0.38 from $0.15 in the prior year. The company also highlighted increased investments in its Affiliates, with a notable $127.7 million increase in investing activities for Affiliate investments. This strategic move, coupled with robust revenue growth, underscores AMG's commitment to its growth strategy. The company's liquidity position remains strong, with significant cash and cash equivalents and access to a revolving credit facility, enabling further strategic acquisitions and operational growth.

Financial Highlights

24 data points
Beta

Net Income

$17.40M

EPS (Diluted)

$0.38

Cash & Equivalents

$203.80M

Free Cash Flow

$66.90M

Financial Statements
Beta
SG&A Expenses$45.30M
Operating Expenses$182.50M
Operating Income$68.50M
Interest Expense$16.00M
Net Income$17.40M
EPS (Basic)$0.41
EPS (Diluted)$0.38
Shares Outstanding (Basic)42.40M
Shares Outstanding (Diluted)45.40M

Key Highlights

  • 1Revenue increased by 41% to $251.0 million in Q1 2010, up from $178.5 million in Q1 2009.
  • 2Net Income (controlling interest) rose sharply by 187% to $17.5 million in Q1 2010, compared to $6.1 million in Q1 2009.
  • 3Diluted Earnings Per Share (EPS) improved significantly to $0.38 in Q1 2010, from $0.15 in Q1 2009.
  • 4Average assets under management grew by 33% to $215.3 billion for the quarter.
  • 5Investments in Affiliates increased substantially to $131.9 million in Q1 2010, up from $3.7 million in Q1 2009, indicating strategic expansion.
  • 6The company maintained strong compliance with its credit facility covenants, demonstrating financial stability.
  • 7Cash Net Income, a non-GAAP measure, showed robust growth, increasing by 35% to $50.8 million.

Frequently Asked Questions

The primary driver for the significant revenue increase was a 33% rise in average assets under management, largely attributable to strong investment performance. This growth was partially offset by negative net client cash flows.

The company significantly increased its investment activities in Affiliates, with cash flow used in investing activities for Affiliates rising to $131.9 million in Q1 2010, compared to $3.7 million in the same period of 2009. This indicates an active strategy of acquiring or investing further in its affiliated investment management firms.

As of March 31, 2010, the company had $170.0 million in senior bank debt outstanding and substantial amounts in convertible securities. Its liquidity position is supported by $203.8 million in cash and cash equivalents and a $770 million revolving credit facility, of which $600 million was undrawn after the Aston investment. The company was in full compliance with its credit facility covenants.

The company identified several key risks including the direct impact of global financial and equity market conditions on advisory and performance fees, the success and terms of future investments in investment management firms, and the availability and cost of capital for financing such investments. These factors could materially affect financial performance and future results.