10-QPeriod: Q1 FY2023

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 8, 2023For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported its first-quarter 2023 results, showing a decrease in net income attributable to controlling interest to $134.5 million from $146.0 million in the prior year period. This decline was primarily driven by a 15% reduction in consolidated revenue, largely due to lower asset-based fees stemming from decreased consolidated affiliate average assets under management, particularly in U.S. and global equity strategies. Despite the revenue dip, total consolidated expenses also decreased by 4%, mainly due to lower compensation and related expenses. However, the company saw a significant increase in aggregate fees by 13%, reaching $1,505.1 million. This growth was fueled by a substantial 27% rise in performance-based fees, offsetting a 14% decrease in asset-based fees, which was impacted by the BPEA Transaction. Equity method revenue also saw a strong 37% increase, driven by performance-based fees in liquid alternative strategies. The company maintained a solid liquidity position with cash and cash equivalents of $832.8 million as of March 31, 2023.

Financial Highlights

39 data points
Beta

Revenue

$517.40M

Net Income

$134.50M

26.0% Net Margin

EPS (Diluted)

$3.47

Total Assets

$8.90B

Cash & Equivalents

$832.80M

Free Cash Flow

$232.90M

Financial Statements
Beta
Revenue$517.40M
SG&A Expenses$97.10M
Operating Expenses$380.50M
Interest Expense$30.50M
Net Income$134.50M
EPS (Basic)$3.74
EPS (Diluted)$3.47
Shares Outstanding (Basic)35.90M
Shares Outstanding (Diluted)39.90M

Key Highlights

  • 1Net income attributable to controlling interest decreased by 8% to $134.5 million for Q1 2023 compared to $146.0 million in Q1 2022.
  • 2Consolidated revenue decreased by 15% to $517.4 million, primarily due to lower asset-based fees on reduced AUM in equity strategies.
  • 3Total consolidated expenses decreased by 4% to $380.5 million, driven by lower compensation and related expenses.
  • 4Aggregate fees increased by 13% to $1,505.1 million, with performance-based fees up 27%, offsetting a decline in asset-based fees.
  • 5Equity method revenue increased significantly by 37% to $987.7 million, largely due to performance fees in liquid alternative strategies.
  • 6Assets under management (AUM) decreased by 14% to $668.0 billion as of March 31, 2023, compared to $776.7 billion at the end of Q1 2022.
  • 7The company maintained strong liquidity with $832.8 million in cash and cash equivalents at the end of the quarter.

Frequently Asked Questions

The primary driver of the decrease in consolidated revenue is a 15% reduction in asset-based fees. This is attributed to a decrease in consolidated affiliate average assets under management, particularly within U.S. and global equity strategies.

Total consolidated expenses decreased by 4% to $380.5 million. This reduction was mainly due to lower compensation and related expenses, which decreased by 13%.

Aggregate fees increased by 13% due to a significant 27% rise in performance-based fees, primarily from liquid alternative strategies. This increase more than offset the decline in asset-based fees.

The company maintained a strong liquidity position, with cash and cash equivalents totaling $832.8 million as of March 31, 2023.