10-QPeriod: Q2 FY2021

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 5, 2021For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported strong financial performance for the six months ended June 30, 2021, driven by significant growth in assets under management and aggregate fees. Total revenue increased by 17% to $1.15 billion, with net income attributable to controlling interest soaring to $258.9 million, a substantial increase from $15.1 million in the prior year period. This growth was propelled by market appreciation, strong affiliate investment performance, and strategic acquisitions, including the pending acquisition of Parnassus Investments. Liquidity remains robust, with cash and cash equivalents at $777.9 million. The company also actively returned capital to shareholders through share repurchases, totaling $396.5 million in the first six months of 2021. AMG's strategy of partnering with independent investment firms and providing them with growth capital and global distribution continues to drive value, positioning the company for sustained long-term growth across its diverse range of investment strategies.

Financial Highlights

40 data points
Beta

Revenue

$586.30M

Net Income

$109.00M

18.6% Net Margin

EPS (Diluted)

$2.55

Total Assets

$8.02B

Cash & Equivalents

$777.90M

Free Cash Flow

$360.60M

Financial Statements
Beta
Revenue$586.30M
SG&A Expenses$88.60M
Operating Expenses$389.90M
Interest Expense$26.80M
Net Income$109.00M
EPS (Basic)$2.62
EPS (Diluted)$2.55
Shares Outstanding (Basic)41.60M
Shares Outstanding (Diluted)44.60M

Key Highlights

  • 1Net income attributable to controlling interest significantly increased to $258.9 million for the six months ended June 30, 2021, up from $15.1 million in the prior year period.
  • 2Consolidated revenue grew by 17% to $1.15 billion for the six months ended June 30, 2021, driven by higher asset-based and performance-based fees.
  • 3Assets under management (AUM) increased by 18% to $755.7 billion as of June 30, 2021, reflecting strong market appreciation and client inflows.
  • 4The company returned $396.5 million to shareholders through share repurchases in the first six months of 2021.
  • 5AMG announced the pending acquisition of Parnassus Investments, an ESG-dedicated fund manager, expected to close in the second half of 2021.
  • 6Adjusted EBITDA (controlling interest) increased by 31% to $474.1 million for the six months ended June 30, 2021, indicating strong operational performance.
  • 7Interest expense increased by 30% for the six months ended June 30, 2021, primarily due to new debt securities issued in 2020.

Frequently Asked Questions

AMG's revenue growth in the first half of 2021 was primarily driven by an increase in asset-based fees, stemming from a 18% rise in average assets under management due to market appreciation and strong affiliate investment performance. Performance-based fees also contributed to the growth.

AMG generated strong operating cash flow of $550.9 million. Key uses of cash included share repurchases totaling $396.5 million, investments in existing and new Affiliates, and distributions to non-controlling interests. The company also utilized its revolving credit facility and maintained a robust cash balance of $777.9 million.

The pending acquisition of Parnassus Investments, an ESG-dedicated fund manager, aligns with AMG's strategy of investing in high-quality independent investment firms. It will likely expand AMG's offerings in the growing sustainable and impact investing sector, further diversifying its asset base and client appeal.

Intangible amortization and impairments significantly decreased by 84% for the six months ended June 30, 2021, compared to the prior year. This reduction was primarily due to a large decrease in impairment charges related to acquired client relationships in the prior year, as well as certain definite-lived assets being fully amortized.