10-QPeriod: Q2 FY2024

AFFILIATED MANAGERS GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2024

Filed August 2, 2024For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported its financial results for the three and six months ended June 30, 2024. For the three months, net income attributable to controlling interest decreased by 39% to $76.0 million compared to $125.3 million in the prior year. For the six months, net income attributable to controlling interest decreased by 13% to $225.8 million compared to $259.8 million in the prior year. This decrease was primarily driven by lower equity method income, increased income tax expenses, and a decrease in investment and other income, partially offset by higher equity method earnings in the six-month period. Despite the decline in net income, total assets under management (AUM) increased to $701.0 billion as of June 30, 2024, up from $673.9 billion at the start of the period. This growth was fueled by strong inflows into alternative strategies, particularly private markets and liquid alternatives, which offset outflows in equity strategies. The company also repurchased a significant amount of its own stock during the period, demonstrating a commitment to returning capital to shareholders.

Financial Highlights

38 data points
Beta

Revenue

$500.30M

Net Income

$76.00M

15.2% Net Margin

EPS (Diluted)

$2.26

Total Assets

$8.85B

Cash & Equivalents

$865.50M

Free Cash Flow

$244.60M

Financial Statements
Beta
Revenue$500.30M
SG&A Expenses$89.40M
Operating Expenses$359.40M
Net Income$76.00M
EPS (Basic)$2.42
EPS (Diluted)$2.26
Shares Outstanding (Basic)31.50M
Shares Outstanding (Diluted)35.30M

Key Highlights

  • 1Net income attributable to controlling interest declined significantly year-over-year for both the three-month and six-month periods.
  • 2Total Assets Under Management (AUM) grew to $701.0 billion as of June 30, 2024, indicating continued investor demand for AMG's strategies.
  • 3The company experienced strong client inflows in alternative strategies, particularly private markets and liquid alternatives.
  • 4Consolidated revenue decreased slightly for both the three-month and six-month periods.
  • 5Significant share repurchases were executed during the period, totaling 2.1 million shares in the second quarter.
  • 6Interest expense increased due to the issuance of new junior subordinated notes.
  • 7A notable impairment charge of $39.9 million was recognized in the equity method income for the six-month period.

Frequently Asked Questions

The decrease in net income attributable to controlling interest was primarily driven by a significant decrease in equity method income (net) and an increase in income tax expense for the three-month period. For the six-month period, the decrease was due to a decline in investment and other income and an increase in income tax expense, partially offset by an increase in equity method income (net).

Total AUM increased to $701.0 billion as of June 30, 2024, up from $699.4 billion at the end of the previous quarter. This growth was supported by positive net client cash flows in alternative strategies like private markets and liquid alternatives, despite outflows in equity strategies.

AMG actively returns capital to shareholders through share repurchases. During the three and six months ended June 30, 2024, the company repurchased 2.1 million and 3.0 million shares, respectively, demonstrating a commitment to shareholder value.

Yes, for the six months ended June 30, 2024, the company recorded an equity method intangible impairment of $39.9 million, related to a decline in the fair value of an affiliate investment due to anticipated decreases in assets under management.