What changed in this filing

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Item 1. Business

2022-02-18 compared with 2021-02-19 · 35 added, 35 removed, 115 unchanged (38% of the section changed)

We are a leading partner to independent active investment management firms globally.

Our strategy is to generate long-term value by investing in a diverse array of excellent partner-owned investment firms, which we call our “Affiliates,” through a proven partnership approach, and allocating resources across our unique opportunity set to the areas of highest growth and return.

Our strategy is to generate long-term value by investing in a diverse array of high-quality partner-owned investment firms, referred to as “Affiliates,” through a proven partnership approach, and allocating resources across our unique opportunity set to the areas of highest growth and return.

Our innovative partnership approach enables each Affiliate’s management team to own significant equity in their firm while maintaining operational and investment autonomy.

In addition, we offer our Affiliates growth capital, global distribution, and other strategic value-added capabilities, which enhance the long-term growth of these independent businesses and enable them to align equity incentives across generations of principals to build enduring franchises.

As of December 31, 2020, our aggregate assets under management were approximately $716 billion, across a broad range of active, return-oriented strategies.

As of December 31, 2021, our aggregate assets under management were approximately $814 billion across a broad range of return-oriented strategies.

We generate long-term value by investing in new Affiliates, existing Affiliates, and centralized capabilities through which we can leverage our scale and resources to benefit our Affiliates, and then by returning excess capital to shareholders, primarily through share repurchases.

In partnering with Affiliates, we are focused on investing in leading independent investment firms around the world managing active, return-oriented strategies, including traditional, alternative, and wealth management firms.

Within our target universe, we seek strong and growing firms that offer illiquid and liquid alternative strategies, global equity strategies, US equity strategies and multi-asset and fixed income strategies.

We are focused on investing in areas of secular growth and client demand, including in private markets, liquid alternatives, Asia, wealth management, and environmental, social, and governance (“ESG”);

accordingly, we partner with leading independent investment firms, including strong and growing traditional, alternative, and wealth management firms managing return-oriented strategies in the aforementioned growth areas.

Given their long-term performance records, our Affiliates are recognized as being among the industry’s leaders in their respective investment disciplines.

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Our investment approach preserves these essential elements for our Affiliates, and in partnering with us, our Affiliates can continue to grow while retaining their independence.

firms seeking an institutional partner are attracted to our unique partnership approach and our global reputation and track record across nearly three decades as a successful and supportive partner to boutique investment firms around the world.

Independent firms seeking an institutional partner are attracted to our unique partnership approach and our global reputation and track record across nearly three decades as a successful and supportive partner to independent investment firms around the world.

We anticipate that the principal owners of independent investment firms will continue to seek access to an evolving range of growth and succession solutions.

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In addition, we have the opportunity to make additional equity investments in our existing Affiliates, or invest in their growth by providing seed or other growth capital.

We are well-positioned to execute upon these investment opportunities through our established process of identifying and cultivating high-quality investment prospects;

our broad industry network and proprietary relationships developed with prospects over many years;

our substantial experience and expertise in structuring and negotiating transactions;

and our strong global reputation as an outstanding partner to our Affiliates, as well as for providing innovative solutions for the strategic needs of independent investment firms.

We are well-positioned to execute upon these investment opportunities through our:

• established process of identifying and cultivating high-quality investment prospects;

• broad industry network and proprietary relationships developed with prospects over many years;

• substantial experience and expertise in structuring and negotiating transactions;

• strong global reputation as an outstanding partner to our Affiliates, as well as for providing innovative solutions for the strategic needs of independent investment firms.

Investment Management Operations

Through our Affiliates, we provide a comprehensive and diverse range of active, return-oriented strategies designed to assist institutional, retail, and high net worth clients worldwide in achieving their investment objectives.

Through our Affiliates, we provide a comprehensive and diverse range of return-oriented strategies designed to assist institutional, retail, and high net worth clients worldwide in achieving their investment objectives.

We manage disciplined and focused investment strategies that address the specialized needs of institutional clients, including foundations and endowments, defined benefit and defined contribution plans for corporations and municipalities, and multi-employer plans.

We provide investment management expertise to retail investors through advisory and sub-advisory services to active, return-oriented mutual funds, Undertakings for the Collective Investment of Transferable Securities (“UCITS”), collective investment trusts, and other retail products.

We provide investment management expertise to retail investors through advisory and sub-advisory services to return-oriented mutual funds, Undertakings for the Collective Investment of Transferable Securities (“UCITS”), collective investment trusts, and other retail products.

We also provide investment management and customized investment counseling and fiduciary services to high net worth individuals, families, charitable foundations, and individually managed accounts directly and through intermediaries, including brokerage firms or other sponsors.

As of December 31, 2020, we managed approximately $716 billion in equity, alternative, and multi-asset strategies across investment styles, asset classes, and geographies.

The following chart provides information regarding our equity, alternative, and multi-asset strategies as of December 31, 2020.

As of December 31, 2021, our Affiliates managed approximately $814 billion in equity, alternative, and multi-asset and fixed income strategies across investment styles, asset classes, and geographies.

The following chart provides information regarding our equity, alternative, and multi-asset and fixed income strategies as of December 31, 2021.

Assets Under Management

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In addition, our global distribution platform operates in major markets to extend the reach of our Affiliates’ own business development efforts, including strategy, marketing, distribution, and product development.

Our Affiliates benefit from the expertise of our senior sales and marketing professionals located in the U.S., the UK, the Middle East, Asia, and Australia.

Our Affiliates benefit from the expertise of our senior sales and marketing professionals servicing the U.S., Europe, the Middle East, Asia, and Australia.

Our Affiliates’ investment management services are also distributed globally to retail investors through our Affiliates’ own efforts and through our retail distribution platform in the form of advisory and sub-advisory services to mutual funds and other retail oriented products.

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Under the equity method of accounting, we do not consolidate the Affiliate’s results into our Consolidated Financial Statements.

Instead, our share of earnings or losses, net of amortization and impairments, is included in Equity method loss (net) in our Consolidated Statements of Income, and our interest in these Affiliates is reported in Equity method investments in Affiliates (net) in our Consolidated Balance Sheets.

Whether we consolidate an Affiliate’s financial results or use the equity method of accounting, we maintain the same innovative partnership approach and provide support and assistance in substantially the same manner for all of our Affiliates.

From time to time, we may restructure our interest in an Affiliate to better support the Affiliate’s growth strategy.

Instead, our share of earnings or losses, net of amortization and impairments, is included in Equity method income (loss) (net) in our Consolidated Statements of Income, and our interest in these Affiliates is reported in Equity method investments in Affiliates (net) in our Consolidated Balance Sheets.

Whether we consolidate an Affiliate’s financial results or use the equity method of accounting, we maintain the same innovative partnership approach and offer support and assistance in substantially the same manner for all of our Affiliates.

From time to time, we may restructure our interest in an Affiliate to better support the Affiliate’s growth strategy, and if doing so is in the best interest of the Affiliate’s business, management partners, and clients, as well as our stakeholders.

Our Affiliates compete with a large number of domestic and foreign investment management firms, as well as with subsidiaries of larger financial organizations.

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and assets under management.

Many of these firms offer an even broader array of products and services in particular investment strategies such as passively-managed products, including exchange traded funds, that typically carry lower fee rates, as well as environmental, social, and governance (“ESG”) strategies and other developing strategies or trends.

Certain of our Affiliates offer their investment management services to the same client types and, from

time to time, may compete with each other for clients.

Many of these firms offer an even broader array of products and services in particular investment strategies such as passively-managed products, including exchange traded funds,

which typically carry lower fee rates.

Certain of our Affiliates offer their investment management services to the same client types and, from time to time, may compete with each other for clients.

In addition, there are relatively few barriers to entry for new investment management firms, especially for those looking to provide investment management services to institutional and high net worth investors.

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• investment performance, investment styles, and reputations of our Affiliates and their management teams;

• diversity of our Affiliates’ investment strategies and products and the continued development, either organically or through new investments, of investment strategies to meet the changing needs and risk tolerances of investors;

• diversity of our Affiliates’ investment strategies and products and the continued development of investment strategies to meet the changing needs and demands of investors, such as ESG strategies or products addressing other developing trends;

• depth and continuity of our and our Affiliates’ client relationships and the level of client service offered;

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The relative importance of each of these factors can vary depending on client type and the investment management service involved, as well as general market conditions.

The ability to compete with other investment management firms also depends, in part, on the relative attractiveness of our Affiliates’ active, return-oriented strategies, market trends, fees, or a combination of these factors.

We compete with a number of acquirers of and investors in boutique investment firms, including other investment management companies, private equity firms, sovereign wealth funds, and larger financial organizations.

The ability to compete with other investment management firms also depends, in part, on the relative attractiveness of our Affiliates’ return-oriented strategies, market trends, fees, or a combination of these factors.

We compete with a number of acquirers of, and investors in, independent investment firms, including investment management companies, private equity firms, sovereign wealth funds, and larger financial organizations.

We believe that the most important factors affecting our ability to compete for future investments are the:

• breadth and depth of our relationships with boutique investment firms;

• target firms’ view of our innovative partnership approach, including our succession planning solutions and the preservation of their unique entrepreneurial cultures, investment independence, and operational autonomy in managing their businesses;

• breadth and depth of our relationships with independent investment firms;

• reputation of our innovative partnership approach, including target firms’ view of our solution set, including growth capital, distribution, and our succession planning, in addition to the preservation of their unique entrepreneurial cultures, investment independence, and operational autonomy in managing their businesses;

• purchase price, liquidity, equity incentive structures, and access to economies of scale that we offer (financially, operationally or otherwise) as compared to acquisition or investment arrangements offered by others;

• reputation and performance of our Affiliates, by which target firms may judge us and our future prospects.

• reputation and performance of our existing Affiliates, by which target firms may judge us and our accretive value as a partner.

Government Regulation

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Risk Factors”.

Human Capital Resources

Human Capital Management

As of December 31, 2021, we and our Affiliates had approximately 4,050 employees, the substantial majority of which were employed by our Affiliates and not by AMG.

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Further, we support employees’ educational pursuits relating to degree programs and certifications through company-supported time off for professional development and flexible work arrangements tailored to individual employees’ educational goals.

We regularly conduct company-wide surveys to solicit feedback from our employees on a variety of topics, including philanthropic interests, remote working, work-from-home technology needs, flexible time off, and general job satisfaction, which help us enhance employee engagement and retention.

Our 2020 anonymous employee

engagement survey reported an employee satisfaction rating of 92%, relative to 88% in 2019, which we attribute to our focus and commitment to our employees.

We prioritize employee engagement through a range of cross-functional, multi-level communication mediums, which historically have included small working group lunches, company-wide town halls, management off-sites, and charitable volunteer activities, and more recently have continued in virtual forums.

We regularly conduct company-wide surveys to solicit feedback from our employees on a variety of topics, including corporate culture, philanthropic interests, remote working, and general job satisfaction, which help us enhance employee engagement and retention.

Our annual anonymous employee engagement survey reported an employee satisfaction rating of approximately 90% in 2021, which we attribute to our focus and commitment to our employees.

We prioritize employee engagement through a range of cross-functional, multi-level communication mediums, including small working group lunches, company-wide town halls, management off-sites, and charitable volunteer activities, which continued in virtual forums during the COVID-19 pandemic.

Through employee participation in our corporate philanthropic initiatives across our global offices, we are committed to giving back to the communities in which we operate, and we believe that these initiatives also support our efforts to attract and retain employees.

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We also have a formal program to match employee donations to eligible non-profit institutions through AMG and The AMG Charitable Foundation.

Through our matching program as well as through direct grants, AMG and The AMG Charitable Foundation have made donations to over 300 organizations around the world.

We believe diversity and inclusion result in a highly creative and innovative workforce, and are committed to fostering and promoting an inclusive and diverse work environment.

Through our matching program as well as through direct grants, AMG and The AMG Charitable Foundation have made donations to approximately 400 organizations around the world.

We believe diversity and inclusion results in a highly creative and innovative workforce, and are committed to fostering and promoting an inclusive and diverse work environment.

We seek to recruit the best people for the job without regard to gender, ethnicity or other protected traits, and it is our policy to comply fully with all domestic, foreign and local laws relating to discrimination in the workplace.

We have achieved gender diversity of approximately 40% across management positions in our workforce, and overall approximately 50% of our employees are women (in each case, excluding our U.S.

We have achieved gender diversity of approximately 40% across management positions in our workforce, and more than 50% of our employees are women (in each case, excluding our U.S.

retail distribution subsidiary).

Further, 50% of the independent members of our Board of Directors are women, and 33% of the independent directors are ethnically diverse, in each case, above the average of S&P 500 companies.

Further, three of seven (43%) independent members of our Board of Directors are women, with two of our Board committees chaired by women, and two of seven (29%) independent directors are ethnically diverse, in each case, above the average of S&P 500 companies.

We continually seek to enhance the diversity of our employee base, as our employees around the world contribute their distinct perspectives to improve our business and the communities in which our businesses operate.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business