Affiliated Managers (US:AMG)2026-02-17 22:15Financial Performance - As of December 31, 2025, the aggregate assets under management reached approximately $813.3 billion, representing a 15% increase from $707.9 billion in 2024[159][169]. - For the fiscal year 2025, average assets under management increased to $764.2 billion, a 9% rise from $700.5 billion in 2024[169]. - Aggregate fees for 2025 totaled $6,167.5 million, an 18% increase compared to $5,236.0 million in 2024[169][170]. - Net income for 2025 was $904.0 million, reflecting a 22% increase from $740.6 million in 2024[182]. - Adjusted EBITDA (controlling interest) rose to $1,076.8 million in 2025, an 11% increase from $973.1 million in 2024[184]. - Economic net income (controlling interest) increased by 10% to $769.3 million in 2025, up from $701.6 million in 2024[187]. - Consolidated revenue reached $2,074.4 million in 2025, a 2% increase from $2,040.9 million in 2024, attributed to a 1% rise in asset-based fees and performance-based fees[190]. - Total consolidated expenses for 2025 were $1,805.4 million, up from $1,507.8 million in 2024, indicating an increase of about 19.7%[300]. - Earnings per share (diluted) for 2025 was $22.74, an increase from $15.13 in 2024, representing a growth of approximately 50.5%[300]. Investments and Partnerships - In 2025, the company entered into four new partnerships with independent firms managing approximately $23 billion in alternative strategies[160]. - The company completed minority investments in NorthBridge Partners and Verition Fund Management, enhancing its portfolio in private markets and multi-strategy investments[161]. - Client cash inflows and commitments for 2025 amounted to $160.9 billion, with net client cash flows of $28.7 billion[173]. - Client demand for alternative strategies continued to grow, with significant net inflows into liquid alternatives and private markets fundraising[171]. - The company expects its business mix to evolve further, expanding exposure to in-demand strategies in both private markets and liquid alternatives[172]. Cash Flow and Capital Management - Cash and cash equivalents stood at $586.0 million as of December 31, 2025, supported by cash generated from operations and proceeds from affiliate transactions totaling approximately $490 million[228]. - For the year ended December 31, 2025, operating cash flow was $973.2 million, primarily from net income of $904.0 million adjusted for non-cash items of $424.5 million and distributions of earnings from equity method investments of $467.8 million[232]. - Cash flows used in investing activities for 2025 were $206.1 million, mainly due to $776.0 million of investments in affiliates and $103.8 million of purchases of investment securities, partially offset by $403.8 million of cash proceeds from affiliate transactions[233]. - Financing cash flows for 2025 were $1,148.7 million, primarily due to repayment of senior bank debt and matured senior notes of $826.1 million, and $706.3 million of common stock repurchases[234]. - The company plans to continue investing in new and existing affiliates, return capital through share repurchases, and manage debt repayment and distributions to equity holders[229]. Debt and Equity Management - As of December 31, 2025, the total carrying value of outstanding indebtedness was $2,728.7 million, with a weighted average maturity of 22 years for senior and junior subordinated notes[238]. - The company had a $1.25 billion revolver maturing on November 15, 2029, with the ability to increase commitments by up to $500.0 million[239]. - The company repurchased 3.3 million shares of common stock at an average price of $212.92 per share in 2025, with a total of 6.0 million shares available for repurchase under authorized programs[237]. - The company issued $425.0 million of 2036 senior unsecured notes on December 11, 2025, with interest payable beginning August 15, 2026[242]. Impairments and Valuation - The Company recorded an impairment expense of $70.0 million in total for indefinite-lived acquired client relationships in 2025 due to declines in assets under management[264][265]. - In the first quarter of 2025, an impairment expense of $59.2 million was recorded for indefinite-lived acquired client relationships due to a decline in fair value, with revenue growth rates projected between (21)% to 0%[264][265]. - In the fourth quarter of 2025, an additional impairment expense of $37.0 million was recorded for certain mutual fund assets, with revenue growth rates projected between (34)% to 0%[265]. - The carrying value of acquired client relationships (net) decreased from $1,777.8 million in 2024 to $1,639.3 million in 2025, reflecting a decline of about 7.8%[304]. Tax and Regulatory Matters - Income tax expense rose by $99.7 million or 55% in 2025, with an effective tax rate of 27.5%, up from 25.5% in 2024, due to unrecognized tax benefits and non-deductible compensation expenses[212][214]. - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2025, and determined it was effective[279]. - The Company maintained effective internal control over financial reporting as confirmed by an independent audit[280]. Currency and Interest Rate Sensitivity - A 1% change in the value of assets under management would result in a $17.2 million change in asset-based fees for consolidated revenue and a $27.0 million change for equity method revenue[272]. - A 1% change in interest rates would have resulted in a $205.9 million net change in the fair value of fixed-rate securities as of December 31, 2025[273]. - A 1% change in foreign currency exchange rates would have resulted in an $8.4 million change to stockholders' equity for the pound sterling, $1.9 million for the Canadian dollar, and $4.8 million for the euro[275].