Affiliated Managers (US:AMG)2025-11-06 21:22Assets Under Management - As of September 30, 2025, the company's total assets under management reached approximately $804 billion, reflecting a 10% increase from $728.4 billion in the same period of 2024[146][155]. - Average assets under management for the third quarter of 2025 were $786.9 billion, an 11% increase from $711.7 billion in the third quarter of 2024[155]. - As of September 30, 2025, 86% of private market assets under management were ahead of their relevant benchmarks, indicating strong performance[162]. - Approximately 28% of total assets under management could potentially earn performance-based fees as of September 30, 2025[166]. Financial Performance - Aggregate fees for the third quarter of 2025 totaled $1,346.0 million, representing a 16% increase compared to $1,157.1 million in the third quarter of 2024[155][156]. - Aggregate fees for the three months ended September 30, 2025, were $1,346.0 million, an increase of $188.9 million or 16% compared to the same period in 2024[169]. - Asset-based fees increased by $185.6 million or 16% for the three months ended September 30, 2025, primarily due to an increase in average assets under management[169]. - Performance-based fees increased by $3.3 million for the three months ended September 30, 2025, primarily in liquid alternative strategies[169]. - Net income (controlling interest) increased by $88.8 million or 72% for the three months ended September 30, 2025, primarily due to $127.6 million of Affiliate transaction gains[172]. - Adjusted EBITDA (controlling interest) increased by $36.8 million or 17% for the three months ended September 30, 2025, primarily due to a $188.9 million increase in aggregate fees[174]. - Consolidated revenue for the three months ended September 30, 2025, was $528.0 million, an increase of $11.6 million or 2% compared to the same period in 2024[178]. - Economic net income (controlling interest) increased by $26.5 million or 17% for the three months ended September 30, 2025[175]. - Net income (non-controlling interests) increased by $16.3 million or 26% for the three months ended September 30, 2025, reflecting strong performance across the board[207]. - Economic net income (controlling interest) for the nine months ended September 30, 2025, was $497.6 million, with economic earnings per share at $16.68[219]. Cash Flow and Investments - Operating cash flow for the nine months ended September 30, 2025, was $716.8 million, driven by net income of $526.1 million adjusted for non-cash items[227]. - Investing cash flow for the nine months ended September 30, 2025, was a net outflow of $258.6 million, mainly due to $515.1 million in investments in Affiliates[228]. - Financing cash flow for the nine months ended September 30, 2025, was a net outflow of $948.6 million, primarily due to $353.2 million in common stock repurchases and $350.0 million in senior notes repayment[229]. - Cash and cash equivalents as of September 30, 2025, totaled $476.1 million, primarily generated from operating activities[221]. Equity and Debt - The company has a $1.25 billion revolver maturing on November 15, 2029, with $100.0 million borrowed as of September 30, 2025[235]. - Senior notes outstanding as of September 30, 2025, included $350.0 million due in June 2030 and $400.0 million due in August 2034[236]. - The company is rated A3 by Moody's and BBB+ by S&P, maintaining an investment-grade capital structure[220]. - The company has junior subordinated notes outstanding with a par value of $300.0 million maturing in March 2059 and a stated coupon of 5.875%[238]. - The company recorded an impairment expense of $59.2 million attributable to the controlling interest for indefinite-lived acquired client relationships due to a decline in fair value[248]. Strategic Investments - The company completed a minority investment in NorthBridge Partners, LLC, and Verition Fund Management LLC, enhancing its portfolio in private markets and multi-strategy investments[147]. - An agreement was made to acquire a minority equity interest in Qualitas Energy, expected to close in Q4 2025, focusing on energy transition investments[148]. - A minority equity interest in BBH Credit Partners is set to be acquired, with the transaction expected to close in Q1 2026[151]. - The company entered into an equity distribution program allowing for the issuance and sale of common stock up to $500.0 million, with no sales occurring as of September 30, 2025[242]. Expenses and Taxation - Compensation and related expenses increased by $32.7 million or 15% for the three months ended September 30, 2025, primarily due to an increase in Affiliate equity compensation expense[182]. - Total consolidated expenses for the three months ended September 30, 2025, were $409.2 million, an increase of $34.5 million or 9% compared to the same period in 2024[181]. - Income tax expense increased by $40.3 million for the three months ended September 30, 2025, with an effective tax rate of 24.4% compared to 19.3% in the prior year[205]. Impairment and Revenue Projections - Revenue growth rates over the next five years were projected to range from (21)% to 0%, with a long-term revenue growth rate of 0% and a discount rate of 11% used in impairment assessments[248]. - A decrease in revenue growth rates by 200 basis points could result in an additional impairment of approximately $49 million, while a 100 basis point increase in the discount rate could lead to an additional impairment of approximately $91 million[249]. - No triggering events indicating impairment were identified for indefinite-lived acquired client relationships during the three and nine months ended September 30, 2025[250].