10-QPeriod: Q1 FY2013

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 7, 2013For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported strong financial performance for the first quarter of 2013, demonstrating significant growth across key metrics compared to the same period in the prior year. Revenue increased by 20% to $502.2 million, driven by a substantial 28% rise in average assets under management to $449.3 billion. This growth was fueled by a combination of strong investment performance, net client cash flows, and strategic investments in new Affiliates. Profitability also saw a marked improvement, with Net income attributable to controlling interest soaring by 67% to $62.4 million, and diluted Earnings Per Share (EPS) increasing by 62% to $1.15. The company also highlighted robust operational cash flow of $202.2 million, a significant jump from $52.5 million in Q1 2012. AMG's strategic focus on partnering with boutique investment management firms and its diversified asset base across various distribution channels appear to be yielding positive results, positioning the company for continued growth.

Financial Highlights

43 data points
Beta

Net Income

$62.40M

EPS (Diluted)

$1.15

Total Assets

$6.23B

Cash & Equivalents

$335.00M

Free Cash Flow

$197.60M

Financial Statements
Beta
SG&A Expenses$92.30M
Operating Expenses$351.70M
Operating Income$150.50M
Interest Expense$24.20M
Net Income$62.40M
EPS (Basic)$1.18
EPS (Diluted)$1.15
Shares Outstanding (Basic)52.70M
Shares Outstanding (Diluted)54.20M

Key Highlights

  • 1Revenue increased 20% year-over-year to $502.2 million.
  • 2Average Assets Under Management (AUM) grew 28% to $449.3 billion.
  • 3Net income attributable to controlling interest surged 67% to $62.4 million.
  • 4Diluted Earnings Per Share (EPS) rose 62% to $1.15.
  • 5Operating cash flow significantly improved, reaching $202.2 million, up from $52.5 million in the prior year.
  • 6The company's diversified asset classes (Equity, Alternative, Fixed Income) and geographic presence (Global, Domestic, Emerging Markets) remained stable.
  • 7AMG completed a new senior unsecured revolving credit facility of $1.25 billion in April 2013, enhancing its liquidity.

Frequently Asked Questions

AMG's revenue growth of 20% to $502.2 million in Q1 2013 was primarily driven by a 28% increase in average assets under management to $449.3 billion. This increase in AUM was a result of strong investment performance, positive net client cash flows, and contributions from new Affiliate investments made in 2012.

Profitability saw a substantial improvement. Net income attributable to controlling interest increased by 67% to $62.4 million, and diluted Earnings Per Share (EPS) grew by 62% to $1.15. This strong performance reflects the company's ability to leverage its growing asset base and manage expenses effectively.

AMG's liquidity position appears strong, evidenced by operating cash flow of $202.2 million. The company has a $1.25 billion senior unsecured revolving credit facility, of which $100 million was outstanding as of April 30, 2013. AMG maintains a focus on its 'internal leverage ratio' and 'bank leverage ratio', and as of March 31, 2013, it was in compliance with its credit facility covenants. The company expects to meet its future cash needs through operating cash flows, credit facility borrowings, and potential forward equity sales.

AMG's performance is significantly tied to global financial and equity markets. Declines or lack of sustained growth in these markets can negatively impact advisory and performance fees. Additionally, the company faces risks related to its ability to find and successfully integrate new investment management firms, secure necessary capital for investments on favorable terms, and manage the operational complexities of its diverse Affiliate structure.