10-QPeriod: Q1 FY2021

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 7, 2021For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported a significant turnaround in its financial performance for the first quarter of 2021 compared to the same period in 2020. The company posted a net income of $149.9 million attributable to controlling interest, a stark contrast to a net loss of $15.6 million in Q1 2020. This strong performance was driven by a substantial increase in consolidated revenue and improved equity method income. Key drivers for this improvement include a 23% year-over-year increase in Assets Under Management (AUM) to $738 billion, alongside a 13% rise in aggregate fees. The company also benefited from a significant decrease in equity method intangible amortization and impairments, which positively impacted net income. Management highlighted strategic investments, including minority stakes in Boston Common Asset Management and OCP Asia Limited, as contributing to its long-term value generation strategy.

Financial Highlights

40 data points
Beta

Revenue

$559.10M

Net Income

$149.90M

26.8% Net Margin

EPS (Diluted)

$3.41

Total Assets

$7.68B

Cash & Equivalents

$766.20M

Free Cash Flow

$188.20M

Financial Statements
Beta
Revenue$559.10M
SG&A Expenses$78.80M
Operating Expenses$378.50M
Interest Expense$27.50M
Net Income$149.90M
EPS (Basic)$3.52
EPS (Diluted)$3.41
Shares Outstanding (Basic)42.60M
Shares Outstanding (Diluted)45.40M

Key Highlights

  • 1Net income attributable to controlling interest surged to $149.9 million in Q1 2021, compared to a loss of $15.6 million in Q1 2020.
  • 2Assets Under Management (AUM) grew by 23% year-over-year to $738 billion as of March 31, 2021.
  • 3Aggregate fees increased by 13% to $1.41 billion for the three months ended March 31, 2021.
  • 4Consolidated revenue saw a 10% increase to $559.1 million.
  • 5Equity method income (loss) shifted from a loss of $113.2 million in Q1 2020 to income of $51.7 million in Q1 2021.
  • 6Intangible amortization and impairments decreased significantly, contributing positively to profitability.
  • 7The company repurchased approximately $312.8 million of its common stock during the quarter.

Frequently Asked Questions

The primary driver was a substantial increase in consolidated revenue and a positive swing in equity method income (loss). This was further boosted by a significant decrease in equity method intangible amortization and impairments, alongside growth in Assets Under Management (AUM) and aggregate fees.

AMG experienced strong growth in AUM, increasing by 23% year-over-year to $738 billion as of March 31, 2021. This growth reflects demand for active, return-oriented strategies, particularly in alternative and multi-asset/fixed income areas.

AMG's strategy focuses on investing in and partnering with independent active investment management firms ('Affiliates'). This involves providing growth capital, global distribution, and operational support while allowing investment autonomy, aiming to build enduring franchises.

Consolidated expenses increased by 7% overall. Compensation and related expenses rose by 19%, largely due to increased revenue and affiliate equity compensation. Selling, general, and administrative expenses decreased by 13%. A significant reduction of 64% was seen in Intangible amortization and impairments, while Interest expense increased by 41%.