AFFILIATED MANAGERS GROUP, INC. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Certain matters discussed in this Quarterly Report on Form 10-Q, in our other filings with the Securities and Exchange Commission, in our press releases, and in oral statements made with the approval of an executive officer may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements, and may be prefaced with words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “preliminary,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “projects,” “positioned,” “prospects,” “intends,” “plans,” “estimates,” “pending investments,” “anticipates,” or the negative version of these words or other comparable words. Such statements are subject to certain risks and uncertainties, including, among others, the factors discussed under the caption “ Item 1A. Risk Factors ” in our Annual Report on Form 10-K for the year ended December 31, 2024, and from time to time, as applicable, our Quarterly Reports on Form 10-Q . These factors (among others) could affect our financial condition, business activities, results of operations, cash flows, or overall financial performance and cause actual results and business activities to differ materially from historical periods and those presently anticipated and projected. Forward-looking statements speak only as of the date they are made, and we will not undertake and we specifically disclaim any obligation to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of events, whether or not anticipated. In that respect, we caution readers not to place undue reliance on any such forward-looking statements. Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. References throughout this report to “AMG,” “we,” “us,” “our,” the “Company,” and similar references refer to Affiliated Managers Group, Inc., unless otherwise stated or the context otherwise requires. Executive Overview AMG is a strategic partner to leading independent investment firms globally. Our strategy is to generate long-term value by investing in high-quality independent partner-owned firms, which we refer to as “Affiliates,” through a proven partnership approach, and allocating resources across our unique opportunity set to the areas of highest growth and return. With their entrepreneurial, investment-centric cultures and alignment of interests with clients through direct equity ownership by firm principals, independent firms have fundamental competitive advantages in offering unique return streams to the marketplace. Through AMG’s distinctive approach, we enhance these advantages to magnify the long-term success of our Affiliates and actively support their independence. Our innovative model enables each Affiliate’s management team to retain autonomy and significant equity ownership in their firm, while they leverage our strategic capabilities and insight, including growth capital, product strategy and development, capital formation, and incentive alignment and succession planning. As of March 31, 2025 , our aggregate assets under management were approximately $712 billion across a diverse range of private markets, liquid alternative , and differentiated long-only investment strategies. In the first quarter of 2025, we completed a minority investment in NorthBridge Partners, LLC (“NorthBridge”), a private markets manager specializing in industrial logistics real estate assets. Following the close of the transaction, NorthBridge partners continue to hold a significant majority of the equity of the firm and direct its day-to-day operations. In May 2025, we completed a minority investment in Verition Fund Management LLC (“Verition”), a global multi- strategy investment firm. Following the close of this transaction, Verition partners continue to hold a significant majority of the equity of the business and direct its day-to-day operations. In May 2025, we entered into an agreement to acquire a minority equity interest in Qualitas Energy, a renewables- focused global infrastructure manager specializing in energy transition. Following the close of the transaction, Qualitas Energy partners will continue to hold a majority of the equity of the business and direct its day-to-day operations. The transaction is expected to close during the fourth quarter of 2025, and is subject to customary closing conditions. The financial results will be recognized in the Consolidated Financial Statements one quarter in arrears. In May 2025, we entered into an agreement to sell our equity interest in Peppertree Capital Management, Inc. (“Peppertree”), our Affiliate accounted for under the equity method, as part of the announced acquisition of Peppertree by TPG Inc. (“TPG”), a public company listed on the Nasdaq Global Select Market. Pursuant to the terms of the agreement, we are expected to receive total consideration of approximately $240 million , based on the TPG closing share price on May 2, 2025, and includes approximately $102 million in cash, subject to certain closing adjustments, and approximately 2.9 million 25 Table of Contents TPG Class A common shares. Peppertree will continue to be included in our results until closing of the transaction, which is expected to occur in the third quarter of 2025, subject to customary closing conditions. Operating Performance Measures Under accounting principles generally accepted in the U.S. (“GAAP”), we are required to consolidate certain of our Affiliates and use the equity method of accounting for others. Whether we consolidate an Affiliate 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. Furthermore, all of our Affiliates are investment managers and are impacted by similar marketplace factors and industry trends. Therefore, certain key aggregate operating performance measures are important in providing management with a comprehensive view of the operating performance and material trends across our entire business. The following table presents our key aggregate operating performance measures: As of and for the Three Months Ended March 31, (in billions, except as noted) 2024 2025 % Change Assets under management $ 699.4 $ 712.2 2 % Average assets under management 680.0 712.1 5 % Aggregate fees (in millions) 1,471.6 1,270.4 (14) % Assets under management, and therefore average assets under management, include the assets under management of our consolidated and equity method Affiliates. Assets under management is presented on a current basis without regard to the timing of the inclusion of an Affiliate’s financial results in our operating performance measures and Consolidated Financial Statements. Average assets under management reflects the timing of the inclusion of an Affiliate’s financial results in our operating performance measures and Consolidated Financial Statements. Average assets under management for mutual funds and similar investment products generally represents an average of the daily net assets under management, while for institutional and high net worth clients, average assets under management generally represents an average of the assets at the beginning or end of each month during the applicable period. Aggregate fees consist of the total asset- and performance-based fees earned by all of our consolidated and equity method Affiliates. For certain of our Affiliates accounted for under the equity method, we report the Affiliate’s aggregate fees one quarter in arrears. Aggregate fees are provided in addition to, but not as a substitute for, Consolidated revenue or other GAAP performance measures. Assets Under Management Our Affiliates manage capital on behalf of clients across a diverse range of investment strategies. Our Affiliates earn asset- based fees on the capital that they manage and certain of our Affiliate’s strategies earn performance-based fees based on the performance generated by their investment products. We continue to see client demand for alternative strategies (both in private markets and liquid alternatives), as evidenced by our net inflows in this category, but our equity strategies experienced net outflows in line with trends across the industry. As we continue to invest in new and existing Affiliates, we expect to further evolve our business mix and better position AMG to benefit from industry growth trends . 26 Table of Contents The following table presents changes in our assets under management by strategy for the three months ended March 31, 2025 : Alternatives Differentiated Long-Only (in billions) Private Markets Liquid Alternatives Equities (1) Multi-Asset & Fixed Income Total December 31, 2024 $ 135.4 $ 140.7 $ 316.2 $ 115.6 $ 707.9 Client cash inflows and commitments 3.5 15.9 8.8 4.8 33.0 Client cash outflows (0.1) (5.7) (22.5) (5.1) (33.4) Net client cash flows 3.4 10.2 (13.7) (0.3) (0.4) New investments 1.7 — — — 1.7 Market changes 0.4 2.4 (2.0) (0.3) 0.5 Foreign exchange (2) 0.3 1.5 1.7 0.2 3.7 Realizations and distributions (net) (0.9) (0.0) (0.1) (0.1) (1.1) Other (3) — 0.0 0.0 (0.1) (0.1) March 31, 2025 $ 140.3 $ 154.8 $ 302.1 $ 115.0 $ 712.2 ___________________________ (1) Equities includes assets under management attributable to both global equities and U.S. equities. (2) Foreign exchange reflects the impact of translating the assets under management of our Affiliates whose functional currency is not the U.S. dollar into our functional currency. (3) Other includes assets under management attributable to product transitions and reclassifications. The following tables present performance of our investment strategies, where available, measured by the percentage of assets under management ahead of their relevant benchmark: AUM Weight % of AUM Ahead of Benchmark (1) IRR Latest Vintage IRR Last Three Vintages Private markets (2) 20% 86% 86% AUM Weight % of AUM Ahead of Benchmark (1) 3-year 5-year 10-year Liquid alternatives (3) 22% 78% 95% 85% Equities (3) 42% 44% 46% 69% Multi-asset and fixed income (4) 16% N/A N/A N/A ___________________________ (1) Past performance is not indicative of future results. Performance and AUM information is as of March 31, 2025 and is based on data available at the time of calculation. Product returns are sourced from Affiliates while benchmark returns are generally sourced via third-party subscriptions. (2) For private markets products, performance is reported as the percentage of assets that have outperformed benchmarks on a since-inception internal rate of return basis. Benchmarks utilized include a combination of public market equivalents, peer medians, and absolute returns where benchmarks are not available. For purposes of investment performance comparisons, the latest vintage comparison includes the most recent vehicles and strategies (traditional long-duration investment funds, customized vehicles, and other evergreen vehicles and product structures) where meaningful performance is available and calculable. In order to illustrate the performance of our private markets product category over a longer period of history, the last three vintages comparison incorporates the latest vintage vehicles and the prior two vintages for traditional long- duration investment funds, as well as additional vehicles and strategies launched during the equivalent time period as the last three vintages of traditional long-duration investment funds. Due to the nature of these investments and vehicles, reported performance is typically on a three- to six-month lag basis. (3) For liquid alternative and equity products, performance is reported as the percentage of assets that have outperformed benchmarks across the indicated periods, and excludes market-hedging products. For purposes of investment performance 27 Table of Contents comparisons, products are an aggregation of portfolios (separate accounts, investment funds, and other products) that each represent a particular investment objective, using the most representative portfolio for the performance comparison. Performance is presented for products with a three-, five-, and/or ten-year track record and is measured on a consistent basis relative to the most appropriate benchmarks. Benchmark appropriateness is generally reviewed annually to reflect any changes in how underlying portfolios/mandates are managed. Product and benchmark performance is reflected as total return and is annualized. Reported product performance is gross-of-fees for institutional and high-net-worth separate accounts, and generally net-of-fees across retail funds and other commingled vehicles such as hedge funds. (4) Multi-asset and fixed income products are mainly our wealth management and solutions offerings. These investment products are primarily customized toward wealth preservation, estate planning, and liability and tax management, and therefore are typically not measured against a benchmark. Aggregate Fees Aggregate fees consist of asset- and performance-based fees of our consolidated and equity method Affiliates. Asset-based fees include advisory and other fees earned by our Affiliates for services provided to their clients and are typically determined as a percentage of the value of a client’s assets under management, generally inclusive of uncalled commitments. Asset-based fees are generally impacted by the level of average assets under management and the composition of these assets across our strategies with different asset-based fee ratios. Our asset-based fee ratio is calculated as asset-based fees divided by average assets under management. In some cases, if product returns exceed certain performance thresholds, we will participate in performance-based fees. Performance-based fees are based on investment performance, typically on an absolute basis or relative to a benchmark or a hurdle rate, and are generally recognized when it is improbable that there will be a significant reversal in the amount of revenue recognized. Performance-based fees are generally recognized less frequently than asset-based fees and will vary from period to period because they inherently depend on investment performance. As of March 31, 2025 , approximately 28% of our total assets under management could potentially earn performance-based fees. These percentages were approximately 12% and 48% of our assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method, respectively. We anticipate performance-based fees will be a recurring component of our aggregate fees; however we do not anticipate these fees to be a significant component of our Consolidated revenue as these fees are predominately earned by our Affiliates accounted for under the equity method. Aggregate fees were $1,270.4 million for the three months ended March 31, 2025 , a decrease of $201.2 million or 14% as compared to the three months ended March 31, 2024 . The decrease in our aggregate fees was due to a $213.4 million or 15% decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $12.2 million or 1% increase from asset-based fees. The increase in asset-based fees was principally due to an increase in our average assets under management, primarily in our private markets and liquid alternative strategies, partially offset by changes in the composition of our assets under management. Financial and Supplemental Financial Performance Measures The following table presents our key financial and supplemental financial performance measures: For the Three Months Ended March 31, (in millions) 2024 2025 % Change Net income $ 198.7 $ 99.2 (50) % Net income (controlling interest) 149.8 72.4 (52) % Adjusted EBITDA (controlling interest) (1) 259.8 228.2 (12) % Economic net income (controlling interest) (1) 186.7 158.7 (15) % __________________________ (1) Adjusted EBITDA (controlling interest) and Economic net income (controlling interest) are non-GAAP performance measures and are discussed in “Supplemental Financial Performance Measures.” Net income (controlling interest) decreased $77.4 million or 52% for the three months ended March 31, 2025 . This decrease was primarily due to a $62.4 million increase in Intangible amortization and impairments attributable to the controlling interest and a $42.2 million decrease in Equity method income (net). These decreases were partially offset by a $28.6 million decrease in Income tax expense attributable to the controlling interest. 28 Table of Contents Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management. Our Adjusted EBITDA (controlling interest) decreased $31.6 million or 12% for the three months ended March 31, 2025 , primarily due to a $201.2 million or 14% decrease in aggregate fees. We believe Economic net income (controlling interest) is an important supplemental financial performance measure because it represents our performance before non-cash expenses primarily related to our acquisition of interests in Affiliates and improves comparability of performance between periods. For the three months ended March 31, 2025 , our Economic net income (controlling interest) decreased $28.0 million or 15% , primarily due to a $31.6 million decrease in Adjusted EBITDA (controlling interest) and a $4.2 million increase in Interest expense attributable to the controlling interest. These decreases were partially offset by a $10.1 million decrease in current and other deferred taxes attributable to the controlling interest. Results of Operations The following discussion includes the key operating performance measures and financial results of our consolidated and equity method Affiliates. Our consolidated Affiliates’ financial results are included in our Consolidated revenue, Consolidated expenses, and Investment and other income, and our share of our equity method Affiliates’ financial results is reported, net of intangible amortization and impairments and tax , in Equity method income (net). Consolidated Revenue The following table presents our consolidated Affiliates’ average assets under management and Consolidated revenue: For the Three Months Ended March 31, (in millions, except as noted) 2024 2025 % Change Consolidated Affiliate average assets under management (in billions) $ 393.7 $ 396.5 1% Consolidated revenue $ 499.9 $ 496.6 (1) % Our Consolidated revenue decreased $3.3 million or 1% for the three months ended March 31, 2025 , due to a $10.9 million or 3% decrease from asset-based fees, partially offset by a $7.6 million or 2% increase from performance-based fees, primarily in our private markets strategies. The decrease in asset-based fees was principally due to changes in the composition of our assets under management, partially offset by an increase in our consolidated Affiliate average assets under management, primarily in our private markets strategies. Consolidated Expenses The following table presents our Consolidated expenses: For the Three Months Ended March 31, % Change (in millions) 2024 2025 Compensation and related expenses $ 240.4 $ 230.3 (4) % Selling, general and administrative 91.7 94.7 3 % Intangible amortization and impairments 7.3 83.3 N.M. (1) Interest expense 29.9 34.1 14 % Depreciation and other amortization 3.0 2.8 (7) % Other expenses (net) 9.0 11.7 30 % Total consolidated expenses $ 381.3 $ 456.9 20 % ___________________________ (1) Percentage change is not meaningful. Compensation and related expenses decreased $10.1 million or 4% for the three months ended March 31, 2025 , primarily due to a $10.3 million decrease in share-based compensation and a $4.8 million decrease in Affiliate equity compensation expense. These decreases were partially offset by a $5.0 million increase in c ompensation accruals . Selling, general and administrative expenses increased $3.0 million or 3% for the three months ended March 31, 2025 , primarily due to a $1.8 million increase in distribution and investment-related expenses, principally as a result of the increase in average assets under management on which these expenses are incurred, and a $1.4 million increase in professional fees. 29 Table of Contents Intangible amortization and impairments increased $76.0 million for the three months ended March 31, 2025 , primarily due to a $70.0 million expense to reduce the carrying value of indefinite-lived acquired client relationships for certain asset groups to fair value and a $7.0 million expense to reduce the carrying value of an indefinite-lived acquired client relationship to zero due to the closure of a retail investment product. These increases were partially offset by a $1.0 million decrease in amortization expense due to certain definite-lived assets being fully amortized . Interest expense increased $4.2 million or 14% for the three months ended March 31, 2025 , primarily due to a $6.6 million increase from our 6.75% junior subordinated notes issued in March 2024 (the “2064 junior subordinated notes”) and a $5.6 million increase from our 5.50% senior unsecured notes issued in August 2024 (the “2034 senior notes”). These increases were partially offset by a $5.5 million decrease due to the repayment of our senior unsecured term loan facility, which was fully repaid during the third quarter of 2024, and a $2.2 million decrease due to the maturity of our 4.25% senior notes in February 2024 (the “2024 senior notes”). There were no significant changes to Depreciation and other amortization for the three months ended March 31, 2025 . Other expenses (net) increased $2.7 million or 30% for the three months ended March 31, 2025 , p rimarily due to a $5.0 million increase in expenses related to changes in the values of contingent payment obligations, partially offset by a $0.9 million decrease in rent and related office costs . Equity Method Income (Net) For our Affiliates accounted for under the equity method, we use operating structures where we contractually share in the Affiliate’s revenue or revenue less agreed-upon expenses. Our share of pre-tax earni ngs or losses from Affiliates accounted for under the equity method (“ pre-tax equity method earnings ”), net of amortization and impairments and tax , is included in Equity method income (net). For certain of our Affiliates accounted for under the equity method, we report the Affiliate’s financial results in our Consolidated Financial Statements one quarter in arrears. The following table presents equity method Affiliate average assets under management and equity method Affiliate revenue (“equity method revenue”), as well as pre-tax equity method earnings , equity method intangible amortization, equity method intangible impairmen ts, if any, and equity method income tax, which in aggregate form Equity method income (net) : For the Three Months Ended March 31, (in millions, except as noted) 2024 2025 % Change Operating Performance Measures Equity method Affiliate average assets under management (in billions) $ 286.3 $ 315.6 10 % Equity method revenue $ 971.7 $ 773.8 (20) % Financial Performance Measures Pre-tax equity method earnings $ 142.4 $ 99.5 (30) % Equity method intangible amortization (20.8) (18.6) (11) % Equity method income tax (4.1) (5.6) 37 % Equity method income (net) $ 117.5 $ 75.3 (36) % Our equity method revenue decreased $197.9 million or 20% for the three months ended March 31, 2025 , due to a $221.0 million or 22% decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $23.1 million or 2% increase from asset-based fees. The increase in asset-based fees was principally due to an increase in our equity method Affiliate average assets under management, primarily in our liquid alternative strategies, partially offset by changes in the composition of our assets under management. For the three months ended March 31, 2025 , pre-tax equity method earnings decreased $42.9 million or 30% , primarily due to a $197.9 million or 20% decrease in equity method revenue. Pre-tax eq uity m ethod earnings decreased more than equity method revenue on a percentage basis primarily due to a decrease in earnings at certain Affiliates in which we share in revenue less agreed-upon expenses. Equity method intangible amortization decreased $2.2 million or 11% for the three months ended March 31, 2025 , primarily due to a $1.8 million decrease in amortization expense related to certain definite-lived assets being fully amortized and a $0.6 million decrease in amortization expense due to a decrease in actual and expected client attrition for certain definite- 30 Table of Contents lived acquired client relationships. These decreases were partially offset by a $0.2 million increase in amortization expense due to investments in new Affiliates. Investment and Other Income The following table presents our Investment and other income: For the Three Months Ended March 31, (in millions) 2024 2025 % Change Investment and other income $ 18.0 $ 11.6 (36) % Investment and other income decreased $6.4 million or 36% for the three months ended March 31, 2025 , primarily due to a $6.3 million decrease in net realized and unrealized gains on investments in marketable securities. Income Tax Expense The following table presents our Income tax expense: For the Three Months Ended March 31, (in millions) 2024 2025 % Change Income tax expense $ 55.4 $ 27.4 (51) % Our consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes attributable to the non-controlling interests. Income tax expense decreased $28.0 million or 51% for the three months ended March 31, 2025 . Our effective tax rate (controlling interest) for the three months ended March 31, 2025 was 25.4% as compared to 26.2% for three months ended March 31, 2024 . The decrease in the effective tax rate (controlling interest) was primarily due to a decrease in non-deductible compensation and uncertain tax positions for the three months ended March 31, 2025 . Net Income The following table presents Net income, Net income (non-controlling interests), and Net income (controlling interest): For the Three Months Ended March 31, (in millions) 2024 2025 % Change Net income $ 198.7 $ 99.2 (50) % Net income (non-controlling interests) 48.9 26.8 (45) % Net income (controlling interest) 149.8 72.4 (52) % Net income (controlling interest) decreased $77.4 million or 52% for the three months ended March 31, 2025 , primarily due to an increase in Intangible amortization and impairments attributable to the controlling interest and a decrease in Equity method income (net). These decreases were partially offset by a decrease in Income tax expense attributable to the controlling interest. Supplemental Financial Performance Measures As supplemental information t o our GAAP performance measures, including Net income (see Note 18 of our Consolidated Financial Statements) , we provide non-GAAP performance measures of Adjusted EBITDA (controlling interest), Economic net income (controlling interest), and Economic earnings per share. We believe that many investors use our Adjusted EBITDA (controlling interest) when comparing our financial performance to other companies in the investment management industry. Management utilizes these non-GAAP performance measures to assess our performance before our share of certain non-cash GAAP expenses primarily related to the acquisition of interests in Affiliates and to improve comparability between periods. Economic net income (controlling interest) and Economic earnings per share are used by management and our Board of Directors as our principal performance benchmarks, including as one of the measures for determining executive compensation. These non-GAAP performance measures are provided in addition to, but not as a substitute for, Net income, Net income (controlling interest), Earnings per share, or other GAAP performance measures. 31 Table of Contents Adjusted EBITDA (controlling interest) Adjusted EBITDA (controlling interest) represents our performance before our share of interest expense, income and certain non-income based taxes, depreciation, amortization, impairments, gains and losses related to Affiliate Transactions, and non-cash items such as certain Affiliate equity activity, gains and losses on our contingent payment obligations, and unrealized gains and losses on seed capital, general partner commitments, and other strategic investments. Adjusted EBITDA (controlling interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner commitments, and other strategic investments. The following table presents a reconciliation of Net income (controlling interest) to Adjusted EBITDA (controlling interest): For the Three Months Ended March 31, (in millions) 2024 2025 Net income (controlling interest) $ 149.8 $ 72.4 Interest expense 29.9 34.1 Income taxes (1) 57.4 30.3 Intangible amortization and impairments (2) 25.6 85.8 Other items (3) (2.9) 5.6 Adjusted EBITDA (controlling interest) $ 259.8 $ 228.2 ___________________________ (1) Includes e quity method income tax . (2) Intangible amortization and impairments in our Consolidated Statements of Income include amortization attributable to the non-controlling interests of our consolidated Affiliates. For our Affiliates accounted for under the equity method, we do not separately report intangible amortization and impairments in our Consolidated Statements of Income. Our share of these Affiliates’ amortization and impairments is included in Equity method income (net). The following table presents the Intangible amortization and impairments shown above: For the Three Months Ended March 31, (in millions) 2024 2025 Consolidated intangible amortization and impairments $ 7.3 $ 83.3 Consolidated intangible amortization and impairments (non-controlling interests) (2.5) (16.1) Equity method intangible amortization and impairments 20.8 18.6 Total $ 25.6 $ 85.8 (3) Other items include certain non-income based taxes, depreciation, and non-cash items such as certain Affiliate equity activity, gains and losses on our contingent payment obligations, unrealized gains and losses on seed capital, general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital, general partner commitments, and other strategic investments. Economic Net Income (controlling interest) and Economic Earnings Per Share Under our Economic net income (controlling interest) definition, we adjust Net income (controlling interest) for our share of pre-tax intangible amortization and impairments related to intangible assets (including the portion attributable to equity method investments in Affiliates) because these expenses do not correspond to the changes in the value of these assets, which do not diminish predictably over time. We also adjust for deferred taxes attributable to intangible assets because we believe it is unlikely these accruals will be used to settle material tax obligations. Further, we adjust for gains and losses related to Affiliate Transactions, net of tax, and other economic items. Economic earnings per share represents Economic net income (controlling interest) divided by the Average shares outstanding (adjusted diluted). In this calculation, we exclude the potential shares issued upon settlement of Redeemable non- controlling interests from Average shares outstanding (adjusted diluted) because we intend to settle those obligations without issuing shares, consistent with all prior Affiliate equity purchase transactions. The potential share issuance in connection with our junior convertible securities is measured using a “treasury stock” method. Under this method, only the net number of shares of common stock equal to the value of these junior convertible securities in excess of par, if any, are deemed to be 32 Table of Contents outstanding. We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in available capital resources (which could be used to repurchase shares of our common stock) that occurs when these securities are converted and we are relieved of our debt obligation. The following table presents a reconciliation of Net income (controlling interest) to Economic net income (controlling interest) and Economic earnings per share: For the Three Months Ended March 31, (in millions, except per share data) 2024 2025 Net income (controlling interest) $ 149.8 $ 72.4 Intangible amortization and impairments (1) 25.6 85.8 Intangible-related deferred taxes (2) 16.3 (0.7) Other economic items (3) (5.0) 1.2 Economic net income (controlling interest) $ 186.7 $ 158.7 Average shares outstanding (diluted) 40.1 32.6 Hypothetical issuance of shares to settle Redeemable non-controlling interests (3.6) (0.4) Assumed issuance of junior convertible securities shares (1.7) (1.7) Average shares outstanding (adjusted diluted) 34.8 30.5 Economic earnings per share $ 5.37 $ 5.20 ___________________________ (1) See note (2) to the table in “Adjusted EBITDA (controlling interest).” (2) Includes e quity method deferred taxes. (3) Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations, tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital, general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital, general partner commitments, and other strategic investments. Other economic items were net of income tax (benefit) expense of $(0.0) million and $1.5 million for the three months ended March 31, 2024 and 2025 , respectively. Liquidity and Capital Resources We generate long-term value by investing in new Affiliate partnerships, existing Affiliates, and strategic value-add capabilities through which we can leverage our scale and resources to benefit our Affiliates and enhance their long-term growth prospects. Given our annual cash generation from operations, in addition to investing for growth in our business, we are also able to return excess capital to shareholders primarily through share repurchases. We continue to manage our capital structure consistent with an investment grade company and are currently rated A3 by Moody’s Investor Services and BBB+ by S&P Global Ratings. Cash and cash equivalents were $816.5 million as of March 31, 2025 and were attributable to both our controlling and the non-controlling interests. In the three months ended March 31, 2025 , we met our cash requirements primarily through cash generated by operating activities. Our principal uses of cash in the three months ended March 31, 2025 were for the return of excess capital through share repurchases, investments in new Affiliates, and distributions to Affiliate equity holders. We expect investments in new Affiliates, investments in existing Affiliates, primarily through purchases of Affiliate equity interests and general partner and seed capital investments, the return of capital through share repurchases and the payment of cash dividends on our common stock, repayment of debt, distributions to Affiliate equity holders, payment of income taxes, purchases of marketable securities, and general working capital to be the primary uses of cash on a consolidated basis for the foreseeable future. We anticipate that our current cash balance, cash flows from operations, proceeds from sales of our marketable securities, and borrowings under our senior unsecured multicurrency revolving credit facility (the “revolver”) will be sufficient to support our uses of cash for the foreseeable future. In addition, we may draw funding from the debt and equity capital markets, and our credit ratings, among other factors, allow us to access these sources of funding on favorable terms. 33 Table of Contents The following table presents operating, investing, and financing cash flow activities: For the Three Months Ended March 31, (in millions) 2024 2025 Operating cash flow $ 209.2 $ 208.9 Investing cash flow 74.5 (35.6) Financing cash flow (302.3) (316.9) Operating Cash Flow Operating cash flows are calculated by adjusting Net income for other significant sources and uses of cash, significant non- cash items, and timing differences in the cash settlement of assets and liabilities. For the three months ended March 31, 2025 , Cash flows from operating activities were $208.9 million , primarily from Net income of $99.2 million and distributions of earnings received from equity method investments of $204.7 million . These items were partially offset by timing differences in the cash settlement of receivables, other assets, and payables, accrued liabilities, and other liabilities of $131.4 million . For the three months ended March 31, 2025 , operating cash flows were primarily attributable to the controlling interest. Investing Cash Flow For the three months ended March 31, 2025 , Cash flows used in investing activities were $35.6 million , primarily due to $49.5 million of investments in Affiliates and $8.2 million of purchases of investment securities. These items were partially offset by $23.7 million of maturities and sales of investment securities. For the three months ended March 31, 2025 , investing cash flows were primarily attributable to the controlling interest. Financing Cash Flow For the three months ended March 31, 2025 , Cash flows used in financing activities were $316.9 million , primarily due to $176.2 million of repurchases of common stock (net), $87.0 million of distributions to non-controlling interests, and $28.3 million of Affiliate equity purchases, net of issuances. For the three months ended March 31, 2025 , financing cash flows were primarily attributable to the controlling interest. Affiliate Equity We periodically purchase Affiliate equity from and issue Affiliate equity to our consolidated Affiliate partners and other parties under agreements that provide us with a conditional right to call and Affiliate equity holders with a conditional right to put their Affiliate equity interests to us at certain intervals. We have the right to settle a portion of these purchases in shares of our common stock. For Affiliates accounted for under the equity method, we do not typically have such put and call arrangements. The purchase price of these conditional purchases is generally calculated based upon a multiple of the Affiliate’s cash flow distributions, which is intended to represent fair value. Affiliate equity holders are also permitted to sell their equity interests to other individuals or entities in certain cases, subject to our approval or other restrictions. As of March 31, 2025 , the current redemption value of Affiliate equity interests was $414.5 million , of which $366.1 million was presented as Redeemable non-controlling interests (including $15.0 million of consolidated Affiliate sponsored investment products primarily attributable to third-party investors), and $48.4 million was included in Other liabilities. Although the timing and amounts of these purchases are difficult to predict, we paid $29.8 million for Affiliate equity purchases and received $1.5 million for Affiliate equity issuances during the three months ended March 31, 2025 , and we expect net purchases of approximately $150 million of Affiliate equity during the remainder of 2025 . In the event of a purchase, we become the owner of the cash flow associated with the purchased equity. See Notes 13 and 14 of our Consolidated Financial Statements. Share Repurchases Our Board of Directors authorized a share repurchase program in July 2024 to repurchase up to 5.4 million shares of our common stock and this authorization has no expiry. Purchases may be made from time to time, at management’s discretion, in the open market or in privately negotiated transactions, including through the use of trading plans, as well as pursuant to accelerated share repurchase programs or other share repurchase strategies that may include derivative financial instruments. During the three months ended March 31, 2025 , we repurchased 1.0 million shares of our common stock at an average price per 34 Table of Contents share of $171.00 . As of March 31, 2025 , there were a total of 4.3 million shares available for repurchase under our July 2024 share repurchase program. Debt The following table presents the carrying value of our outstanding indebtedness. The weighted average maturity of our outstanding debt is 21 years , with approximately 87% of debt maturing in 2030 and beyond. Our nearest term maturity relates to our $350.0 million senior notes due August 2025 (“the 2025 senior notes”) . See Note 6 of our Consolidated Financial Statements. (in millions) December 31, 2024 March 31, 2025 Senior bank debt $ — $ — Senior notes 1,097.4 1,097.5 Junior subordinated notes 1,216.0 1,216.0 Junior convertible securities 341.7 341.7 The carrying value of our debt differs from the amount reported in the notes to our Consolidated Financial Statements, as the carrying value of our debt in the table above is not reduced for debt issuance costs. Senior Bank Debt As of March 31, 2025 , we had a $1.25 billion revolver which matures on November 15, 2029. Subject to certain conditions, we may increase the commitments under the revolver by up to an additional $500.0 million . As of March 31, 2025 , we had no outstanding borrowings under the revolver, and could borrow all capacity and remain in compliance with all of the terms of the revolver . Senior Notes As of March 31, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and described below: 2025 Senior Notes 2030 Senior Notes 2034 Senior Notes Issue date February 2015 June 2020 August 2024 Maturity date August 2025 June 2030 August 2034 Par value (in millions) $ 350.0 $ 350.0 $ 400.0 Stated coupon 3.50 % 3.30 % 5.50 % Coupon frequency Semi-annually Semi-annually Semi-annually The senior notes may be redeemed, in whole or in part, at a make-whole redemption price (plus accrued and unpaid interest), at any time, in the case of the 2025 senior notes, at any time prior to March 15, 2030, in the case of the 2030 senior notes, and at any time prior to May 20, 2034, in the case of the 2034 senior notes. In addition, the 2030 and 2034 senior notes may be redeemed at par, in whole or in part, at any time, on or after March 15, 2030 and May 20, 2034, respectively. We may also repurchase senior notes in the open market or in privately negotiated transactions from time to time at management’s discretion. 35 Table of Contents Junior Subordinated Notes As of March 31, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are presented and described below: 2059 Junior Subordinated Notes 2060 Junior Subordinated Notes 2061 Junior Subordinated Notes 2064 Junior Subordinated Notes Issue date March 2019 September 2020 July 2021 March 2024 Maturity date March 2059 September 2060 September 2061 March 2064 Par value (in millions) $ 300.0 $ 275.0 $ 200.0 $ 450.0 Stated coupon 5.875 % 4.75 % 4.20 % 6.75 % Coupon frequency Quarterly Quarterly Quarterly Quarterly NYSE Symbol MGR MGRB MGRD MGRE As of March 31, 2025 , the 2059 junior subordinated notes could be redeemed at any time, in whole or in part. The other junior subordinated notes may be redeemed at any time, in whole or in part, on or after September 30, 2025, in the case of the 2060 junior subordinated notes, on or after September 30, 2026, in the case of the 2061 junior subordinated notes, and on or after March 30, 2029, in the case of the 2064 junior subordinated notes. In each case, the junior subordinated notes may be redeemed at 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest thereon. Prior to the applicable redemption date, at our option, the applicable junior subordinated notes may also be redeemed, in whole but not in part, at 100% of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws, regulations, or interpretations occur; or at 102% of the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit criteria for securities with features similar to the applicable notes. Junior Convertible Securities As of March 31, 2025 , we had $341.7 million of principal outstanding in our 5.15% junior convertible trust preferred securities (the “junior convertible securities”), maturing in 2037. The junior convertible securities were issued by AMG Capital Trust II, a Delaware statutory trust, in October 2007. Each of the junior convertible securities represents an undivided beneficial interest in the assets of the trust. The trust’s only assets are junior subordinated convertible debentures issued to it by us, and have substantially the same payment terms as the junior convertible securities. We own all of the trust’s common securities, and have fully and unconditionally guaranteed, on a subordinated basis, the payment obligations on the junior convertible securities. We do not consolidate the trust’s financial results into our Consolidated Financial Statements. Holders of the junior convertible securities have no rights to put these securities to us. Upon conversion, holders will receive cash or shares of our common stock, or a combination thereof, at our election. We may redeem the junior convertible securities, subject to our stock trading at or above certain specified levels over specified periods, and may also repurchase junior convertible securities in the open market or in privately negotiated transactions from time to time at management’s discretion. We did not repurchase any of our junior convertible securities during the three months ended March 31, 2024 and 2025 . Equity Distribution Program On March 7, 2025, we entered into an equity distribution agreement and forward sale agreements with several major securities firms under which we may, from time to time, issue and sell shares of our common stock (immediately or on a forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”). This equity distribution program superseded and replaced our prior equity distribution program. As of March 31, 2025 , no sales had occurred under the equity distribution program. Commitments See Note 7 of our Consolidated Financial Statements. Other Contingent Commitments See Notes 4 and 7 of our Consolidated Financial Statements. Leases As of March 31, 2025 , our lease obligations were $27.0 million for the remainder of 2025 , $53.4 million from 2026 through 2027, $44.8 million from 2028 through 2029, and $47.8 million thereafter. The portion of these lease obligations 36 Table of Contents attributable to the controlling interest were $6.9 million for the remainder of 2025 , $7.1 million from 2026 through 2027, $4.5 million from 2028 through 2029, and $7.1 million thereafter. Recent Accounting Developments See Note 2 of our Consolidated Financial Statements. Critical Accounting Estimates and Judgments The following is an update to our 2024 Annual Report on Form 10‑K, which includes additional information about our Critical Accounting Estimates and Judgments, and should be read in conjunction with this Quarterly Report on Form 10‑Q. Indefinite-Lived Acquired Client Relationships In the first quarter of 2025, we completed an impairment assessment of the indefinite-lived acquired client relationships for certain mutual fund assets and determined that the fair value of the assets had declined below their carrying values. Accordingly, we recorded an expense in Intangible amortization and impairments of $59.2 million attributable to the controlling interest ( $70.0 million in aggregate) to reduce the carrying value of the assets to fair value. The decline in the fair value was a result of current and projected declines in assets under management that decreased the forecasted revenue associated with the assets. The most relevant assumptions used in these analyses were revenue growth rates over the next five years ranging from (21)% to 0% , long-term revenue growth rates of 0% , and discount rates of 11% . While we believe all assumptions used in our assessments are reasonable and appropriate, changes in these estimates could produce different values. We performed a sensitivity analysis over the most relevant assumptions used in these assessments. Assuming all other assumptions remain constant, a decrease in the revenue growth rates over the next five years of 200 basis points would result in an additional impairment amount of approximately $49 million , while an increase in the discount rate of 100 basis points would result in an additional impairment amount of approximately $91 million . Further declines in assets under management resulting from negative investment performance or net client outflows above our estimates could result in additional future impairments. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes to our Quantitative and Qualitative Disclosures About Market Risk for the three months ended March 31, 2025 . Please refer to Item 7A of our 2024 Annual Report on Form 10-K.