01—Abstract
Summary
Summary of the 10-Q filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Affiliated Managers Group, Inc. (AMG) reported its first-quarter 2024 financial results, showing a 5% increase in Assets Under Management (AUM) to $699.4 billiona.
While consolidated revenue saw a slight decrease of 3% to $499.9 millionb, 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.
02—Key points
Key Highlights
- Assets Under Management (AUM) grew by 5% to $699.4 billion as of March 31, 2024.
- Net 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.
- Equity method earnings saw a substantial increase of 74% to $138.3 million, contributing significantly to the overall earnings growth.
- Consolidated revenue slightly decreased by 3% to $499.9 million, primarily due to a decrease in asset-based fees on consolidated affiliates.
- The company repurchased 1.0 million shares of common stock during the quarter for approximately $155.6 million.
- Private markets AUM saw strong performance, with 86% outperforming benchmarks on both latest and three-year vintage IRRs.
- Debt levels were managed, with a significant issuance of $450.0 million in junior subordinated notes and repayment of $450.0 million in senior notes.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 7, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $499.90M$517.40M | −3.4% |
| SG&A Expenses | $91.70M$97.10M | −5.6% |
| Operating Expenses | $381.30M$380.50M | +0.2% |
| Interest Expense | $29.90M$30.50M | −2.0% |
| Net Income | $149.80M$134.50M | +11.4% |
| EPS (Basic) | $4.56$3.74 | +21.9% |
| EPS (Diluted) | $4.14$3.47 | +19.3% |
| Shares Outstanding (Basic) | 32.80M35.90M | −8.6% |
| Shares Outstanding (Diluted) | 40.10M39.90M | +0.5% |
05—Questions
Frequently Asked Questions
What drove the increase in Net Income attributable to controlling interest?
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.
How did the company's Assets Under Management (AUM) perform?
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.
What is the company's approach to capital allocation and shareholder returns?
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.
What are the key drivers behind the decrease in consolidated revenue?
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.
06—Continue