10-QPeriod: Q1 FY2024

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 7, 2024For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported its first-quarter 2024 financial results, showing a 5% increase in Assets Under Management (AUM) to $699.4 billion. While consolidated revenue saw a slight decrease of 3% to $499.9 million, Net Income attributable to controlling interest rose by a notable 11% to $149.8 million, driven by a significant 74% increase in equity method earnings. Key operational highlights include growth in alternative strategies and a solid performance in private markets, with 86% of AUM outperforming benchmarks across the latest and three-year vintages. The company also demonstrated a strong commitment to shareholder returns through robust share repurchases, totaling 1.0 million shares in the quarter. Despite a slight dip in aggregate fees, the company's strategic investments in new Affiliates and focus on high-growth areas position it for continued value creation.

Financial Highlights

39 data points
Beta

Revenue

$499.90M

Net Income

$149.80M

30.0% Net Margin

EPS (Diluted)

$4.14

Total Assets

$9.02B

Cash & Equivalents

$793.40M

Free Cash Flow

$208.20M

Financial Statements
Beta
Revenue$499.90M
SG&A Expenses$91.70M
Operating Expenses$381.30M
Interest Expense$29.90M
Net Income$149.80M
EPS (Basic)$4.56
EPS (Diluted)$4.14
Shares Outstanding (Basic)32.80M
Shares Outstanding (Diluted)40.10M

Key Highlights

  • 1Assets Under Management (AUM) grew by 5% to $699.4 billion as of March 31, 2024.
  • 2Net Income attributable to controlling interest increased by 11% to $149.8 million for the three months ended March 31, 2024, compared to $134.5 million in the prior year.
  • 3Equity method earnings saw a substantial increase of 74% to $138.3 million, contributing significantly to the overall earnings growth.
  • 4Consolidated revenue slightly decreased by 3% to $499.9 million, primarily due to a decrease in asset-based fees on consolidated affiliates.
  • 5The company repurchased 1.0 million shares of common stock during the quarter for approximately $155.6 million.
  • 6Private markets AUM saw strong performance, with 86% outperforming benchmarks on both latest and three-year vintage IRRs.
  • 7Debt levels were managed, with a significant issuance of $450.0 million in junior subordinated notes and repayment of $450.0 million in senior notes.

Frequently Asked Questions

The 11% increase in Net Income attributable to controlling interest to $149.8 million was primarily driven by a significant 74% surge in equity method earnings to $138.3 million. This was partially offset by a decrease in investment and other income and an increase in income tax expense.

AMG's AUM increased by 5% to $699.4 billion as of March 31, 2024. This growth was fueled by net inflows in alternative strategies and investments in new Affiliates, although equity strategies experienced outflows, which is noted as a general industry trend.

AMG continues to focus on long-term value creation through investments in new and existing Affiliates. The company also actively returns capital to shareholders through share repurchases, executing 1.0 million share repurchases in the first quarter of 2024. They maintain an investment-grade credit rating and manage their capital structure accordingly.

Consolidated revenue decreased by 3% to $499.9 million. This was primarily due to a 3% decrease in asset-based fees, attributed to changes in the composition of AUM and a decline in average AUM for consolidated affiliates, particularly within global equity strategies.