10-QPeriod: Q1 FY2015

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 5, 2015For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported a significant increase in financial performance for the quarter ended March 31, 2015, compared to the same period in the prior year. Net income attributable to controlling interest surged by 66% to $128.0 million, translating to a diluted earnings per share of $2.28, up from $1.40 in Q1 2014. This growth was driven by a 7% increase in total revenue to $635.0 million and robust growth in assets under management (AUM), which rose 14% to $632.2 billion. The company also highlighted strong operational efficiency, with Selling, General, and Administrative expenses decreasing by 11%. AMG's strategic focus on growth through investments in leading boutique investment management firms continues to yield positive results, as evidenced by the increase in AUM and AUM growth from both new investments and organic client flows. The company's diversified business model across Institutional, Mutual Fund, and High Net Worth distribution channels provides resilience against market fluctuations.

Financial Highlights

37 data points
Beta

Net Income

$126.70M

EPS (Diluted)

$2.26

Total Assets

$7.49B

Cash & Equivalents

$438.20M

Free Cash Flow

$114.40M

Financial Statements
Beta
SG&A Expenses$108.70M
Operating Expenses$403.60M
Operating Income$231.40M
Interest Expense$22.20M
Net Income$126.70M
EPS (Basic)$2.34
EPS (Diluted)$2.26
Shares Outstanding (Basic)54.80M
Shares Outstanding (Diluted)57.80M

Key Highlights

  • 1Net income attributable to controlling interest increased by 66% to $128.0 million in Q1 2015, compared to $77.2 million in Q1 2014.
  • 2Diluted Earnings Per Share (EPS) significantly improved, rising to $2.28 from $1.40 year-over-year.
  • 3Total revenue grew by 7% to $635.0 million for the quarter ended March 31, 2015.
  • 4Assets Under Management (AUM) increased by 14% to $632.2 billion as of March 31, 2015, reflecting strong growth from new investments and organic client flows.
  • 5Selling, General, and Administrative expenses decreased by 11% to $108.7 million, indicating improved operational efficiency.
  • 6The company issued $350.0 million in senior unsecured notes due 2025 to refinance existing debt.
  • 7AMG repurchased 0.7 million shares of common stock during the quarter, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

The primary drivers were a 7% increase in revenue to $635.0 million and a substantial 14% growth in assets under management (AUM) to $632.2 billion. This growth in AUM was fueled by both new investments in affiliated firms and organic client flows, leading to higher asset-based management fees.

AMG demonstrated effective cost management, notably a 11% decrease in Selling, General, and Administrative expenses, which fell to $108.7 million. This reduction was largely due to lower sub-advisory and distribution expenses, as well as decreased acquisition-related professional fees.

AMG's strategy focuses on growth through equity investments in leading boutique investment management firms ('Affiliates'). This is reflected in the 14% increase in AUM, with significant contributions from recent acquisitions and organic growth from existing Affiliates across its Institutional, Mutual Fund, and High Net Worth distribution channels.

The company issued $350.0 million in new senior unsecured notes to refinance existing debt, indicating active capital management. Additionally, AMG repurchased approximately 0.7 million shares of its common stock during the quarter, demonstrating a commitment to shareholder value through share buybacks.