AMG Reports 2016 Results

Originally published on 30 January 2017

Affiliated Managers Group, Inc. (NYSE: AMG) today reported its financial and operating results for the fourth quarter and full year 2016.                           

For the fourth quarter of 2016, diluted earnings per share were $2.67, compared to $2.67 for the same period of 2015, and Economic earnings per share (“Economic EPS”) were $3.80, compared to $3.59 for the same period of 2015.  For the fourth quarter of 2016, Net income was $150.2 million, compared to $147.5 million for the same period of 2015.  For the fourth quarter of 2016, Economic net income was $211.2 million, compared to $195.8 million for the same period of 2015.  For the fourth quarter of 2016, Adjusted EBITDA was $289.7 million, compared to $263.1 million for the same period of 2015. For the fourth quarter of 2016, Revenue was $550.3 million, compared to $589.8 million for the same period of 2015.  For the fourth quarter of 2016, Aggregate revenue, which includes revenue from consolidated Affiliates as well as Equity methodrevenue (which represents asset-based fees and performance fees earned by Affiliates accounted for under the equity method), was $1.3 billion, compared to $1.2 billion for the same period of 2015.  (Economic EPS, Economic net income, and Adjusted EBITDA are defined in the attached tables, along with reconciliations to the most directly comparable GAAP measure.) 

For the year ended December 31, 2016, diluted earnings per share were $8.57, compared to $9.17 for 2015, and Economic earnings per share were $12.84, compared to $12.47 for 2015. For the year ended December 31, 2016, Net income was $472.8 million, compared to $509.5 million for 2015. For the year ended December 31, 2016, Economic net income was $703.6 million, compared to $687.2 million for 2015. For the year ended December 31, 2016, Adjusted EBITDA was $945.5 million, compared to $942.2 million for 2015. For the year ended December 31, 2016, Revenue was $2.2 billion, compared to $2.5 billion for 2015, and Aggregate revenue was $4.3 billion, compared to $4.1 billion for 2015.

Net client cash flows for the fourth quarter of 2016 were $(4.1) billion, and for the full year were $7.4 billion.  AMG’s aggregate assets under management were approximately $727 billion at December 31, 2016, pro forma for investments which have since closed.

“AMG generated strong results for the fourth quarter and the full year 2016, including Economic earnings per share of $3.80 for the fourth quarter and $12.84 for the full year, both at record levels and representing earnings growth of 6% and 3% for each period, respectively,” stated Sean M. Healey, Chairman and Chief Executive Officer of AMG. “Against the backdrop of earnings declines across the asset management industry broadly, we continued to produce growth in our earnings, even with only a partial impact from investments closed during the second half of the year. With assets under management increasing 16% year-over-year to $727 billion, we enhanced the earnings power of our business through successful execution across all aspects of our growth strategy – including positive organic growth from net client cash flows in 2016, the long-term investment outperformance of our Affiliates, and the addition of outstanding new Affiliates during the year.”

“While we saw modest outflows in the fourth quarter, driven in large part by anticipated seasonal client redemptions and realization activity in private equity and similar strategies, our Affiliates generated positive net client cash flows of $7.4 billion for the full year across our diverse active equity and alternative product set, notwithstanding industry-wide net outflows in alpha-oriented product areas,” Mr. Healey continued. “Given increased dispersion of asset returns and post-election expectations for regulatory reform and economic growth, high-conviction active managers are positioned to outperform passive products. The best managers will distinguish themselves in this environment, which will benefit AMG across our broad array of industry-leading active equity and alternative strategies, given our Affiliates’ outstanding track records of investment outperformance.”

“We were pleased to add a number of excellent new Affiliates in 2016 through the continued successful execution of our new investments strategy, and the quality of these firms, including Winton, Capula, and Baring Asia, reflects AMG’s competitive position as the partner of choice for leading independent firms around the world,” Mr. Healey concluded. “Looking ahead, given the significant and growing scale of our business, we are confident in our ability to continue to generate meaningful earnings growth through accretive investments in outstanding new Affiliates, while also consistently returning capital to shareholders through share repurchases, and now a dividend.  With this disciplined commitment to capital allocation, along with the organic growth of existing Affiliates, we are uniquely positioned to generate long-term shareholder value.”