01—Abstract
Summary
Summary of the 10-Q filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Affiliated Managers Group, Inc. (AMG) reported a decrease in Net income attributable to controlling interest to $123.6 milliona for the three months ended September 30, 2024, down from $217.0 million in the prior year period.
For the nine months ended September 30, 2024, Net income attributable to controlling interest was $349.5 millionb, a decrease from $476.8 million in the same period last year. This decline is largely attributed to the absence of a significant gain from the Veritable transaction recognized in the prior year, coupled with a decrease in investment and other income. Despite the decline in net income, the company demonstrated growth in its key operating performance measures.
Assets under management increased by 15% year-over-year to $728.4 billionc as of September 30, 2024. Aggregate fees also saw a robust increase of 16% for the quarter and 6% for the year-to-date period, driven by strong performance in alternatives and liquid alternatives strategies. The company continues to strategically invest in its Affiliates and support their growth, focusing on private markets and liquid alternatives, aligning with long-term client demand trends.
02—Key points
Key Highlights
- Net income attributable to controlling interest decreased significantly in both the third quarter and the year-to-date period, primarily due to the absence of a large one-time gain from the Veritable transaction in the prior year.
- Assets Under Management (AUM) showed strong growth, increasing 15% to $728.4 billion as of September 30, 2024, driven by client demand in alternatives and liquid alternatives.
- Aggregate fees increased by 16% for the quarter and 6% for the nine-month period, reflecting growth in asset-based and performance-based fees, particularly in liquid alternatives strategies.
- Operating cash flow improved to $719.6 million for the nine months ended September 30, 2024, up from $619.4 million in the prior year, indicating strong cash generation from operations.
- The company repaid $350 million of senior bank debt and issued $450 million in new junior subordinated notes and $400 million in new senior notes during the nine months ended September 30, 2024, demonstrating active debt management.
- Share repurchases remain a priority, with 3.6 million shares repurchased for the nine months ended September 30, 2024, highlighting a commitment to returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 7, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $516.40M$525.20M | −1.7% |
| SG&A Expenses | $97.00M$91.10M | +6.5% |
| Operating Expenses | $374.70M$357.40M | +4.8% |
| Net Income | $123.60M$217.00M | −43.0% |
| EPS (Basic) | $4.11$6.22 | −33.9% |
| EPS (Diluted) | $3.78$5.48 | −31.0% |
| Shares Outstanding (Basic) | 30.10M34.90M | −13.8% |
| Shares Outstanding (Diluted) | 35.00M43.40M | −19.4% |
05—Questions
Frequently Asked Questions
Why did Net Income attributable to controlling interest decrease significantly compared to the prior year?
The significant decrease in Net Income attributable to controlling interest for both the three and nine months ended September 30, 2024, is primarily due to the absence of a $133.1 million pre-tax gain recognized in the third quarter of 2023 from the sale of the equity interest in Veritable, LP. This one-time gain in the prior year period made the current year's comparison appear lower.
What is driving the growth in Assets Under Management (AUM)?
Assets Under Management increased by 15% to $728.4 billion as of September 30, 2024. This growth is driven by continued client demand for alternative strategies, particularly in private markets and liquid alternatives, and strategic investments in new and existing Affiliates.
How is the company managing its debt obligations?
AMG is actively managing its debt. During the nine months ended September 30, 2024, the company repaid its $350 million senior bank debt facility. It also issued $450 million of 6.75% junior subordinated notes and $400 million of 5.50% senior notes, extending its debt maturity profile. The weighted average maturity of outstanding debt is 21 years, with approximately 87% maturing in 2030 and beyond.
What is the outlook for revenue and fees?
The company reported a 16% increase in aggregate fees for the three months ended September 30, 2024, and a 6% increase for the nine-month period. This growth is primarily attributed to increased asset-based fees driven by higher average AUM, especially in alternatives and liquid alternatives strategies, and a rise in performance-based fees.
06—Continue