What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 353 added, 208 removed, 448 unchanged (56% of the section changed)

40 unchanged sentences

capital, product strategy and development, capital formation, and incentive alignment and succession planning.

March 31, 2025 , our aggregate assets under management were approximately $712 billion across a diverse range of private

June 30, 2025 , our aggregate assets under management were approximately $771 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.

private markets manager specializing in industrial logistics real estate assets, and in the second quarter of 2025 we completed

our minority investment in Verition Fund Management LLC (“Verition”), a global multi-strategy investment firm.

the close of these transactions, Affiliate management continues to hold a significant majority of the equity of the respective

businesses and directs the day-to-day operations.

In the second quarter of 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,

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.

transaction is expected to close during the fourth quarter of 2025, and is subject to customary closing conditions.

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”), 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

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.

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 in the fourth quarter of 2025, subject to customary closing conditions.

The financial

results will be recognized in the Consolidated Financial Statements one quarter in arrears.

In July 2025, we completed the previously announced sale of our equity interest in Peppertree Capital Management, Inc.

(“Peppertree”), 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 transaction agreement with TPG, under which we and each of the

other owners agreed to sell our respective equity interests in Peppertree, we received total consideration of approximately

$254 million which included approximately $100 million in cash and 2.9 million TPG Class A common shares, all of which

we have since sold.

We acquired our interest in Peppertree for $140.0 million in 2022.

Our gain on the transaction was

taxable at closing.

Peppertree will be included in our results through the closing date.

In July 2025, we entered into an agreement to acquire a minority equity interest in Montefiore Investment

(“Montefiore”), a European private equity firm focused on the service s sector.

Following the close of the transaction,

Montefiore partners will continue to hold a majority of the equity of the business and direct its day-to-day operations.

transaction is expected to close in the second half of 2025, subject to customary closing conditions.

On August 6, 2025, we entered into an agreement to sell a portion of our interest in Comvest Partners (“Comvest”), our

Affiliate accounted for under the equity method, as part of the announced acquisition of Comvest’s private credit business by

Manulife Financial Corporation.

Pursuant to the terms of the agreement, we are expected to receive total cash consideration

of approximately $285 million , subject to certain closing adjustments.

Comvest will continue to be included in our results

until closing of the transaction and the portion retained will continue to be included going forward.

The transaction is

expected to close in the fourth quarter of 2025, subject to customary closing conditions.

Operating Performance Measures

10 unchanged sentences

The following table presents our key aggregate operating performance measures:

As of and for the

Three Months Ended

As of and for the Three

Months Ended June 30,

As of and for the Six

Months Ended June 30,

(in billions, except as noted)

13 unchanged sentences

Aggregate fees consist of the total asset- and performance-based fees earned by all of our consolidated and equity method

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.

In the case of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense

reimbursements paid by the underlying products.

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

4 unchanged sentences

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

private markets and liquid alternatives), as evidenced by our net inflows in this category, and our equity strategies experienced

net outflows in line with trends across the industry .

1 unchanged sentence

further evolve our business mix and better position AMG to benefit from industry growth trends.

The following table presents changes in our assets under management by strategy for the three months ended March 31,

The following tables present changes in our assets under management by strategy for the three and six months ended

June 30, 2025 :

Differentiated Long-Only

1 unchanged sentence

Multi-Asset &

March 31, 2025

Client cash inflows and commitments

Client cash outflows

Net client cash flows

New investments

Market changes

Foreign exchange (2)

Realizations and distributions (net)

June 30, 2025

Differentiated Long-Only

(in billions)

Multi-Asset &

December 31, 2024

6 unchanged sentences

Realizations and distributions (net)

March 31, 2025

June 30, 2025

_________________________

15 unchanged sentences

(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.

Performance and AUM information is as of June 30, 2025 and is based

on data available at the time of calculation.

Product returns are sourced from Affiliates while benchmark returns are

32 unchanged sentences

Aggregate fees consist of asset- and performance-based fees of our consolidated and equity method Affiliates.

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.

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.

of our equity method Affiliates, asset- and performance-based fees are presented net of certain expense reimbursements paid by

the underlying products.

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.

3 unchanged sentences

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.

As of June 30, 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 .

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 $1,173.5 million for the three months ended June 30, 2025 , an increase of $75.4 million or 7% as

compared to the three months ended June 30, 2024 .

The increase in our aggregate fees was due to a $108.4 million or 10%

increase from asset-based fees, partially offset by a $33.0 million or 3% decrease from performance-based fees, primarily in our

liquid alternative strategies.

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, and changes in the composition of our assets

under management.

Aggregate fees were $2,443.9 million for the six months ended June 30, 2025 , a decrease of $125.8 million or 5% as

compared to the six months ended June 30, 2024 .

The decrease in our aggregate fees was due to a $246.4 million or 10%

2 unchanged sentences

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.

management, primarily in our private markets and liquid alternative strategies.

Financial and Supplemental Financial Performance Measures

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

5 unchanged sentences

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 .

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.

Net income (controlling interest) increased $8.3 million or 11% for the three months ended June 30, 2025 .

This increase

was primarily due to a $47.5 million increase in Equity method income (net) and a $7.3 million decrease in Income tax expense

attributable to the controlling interest.

These increases to Net income (controlling interest) were partially offset by a $41.6

million increase in Affiliate equity compensation expense attributable to the controlling interest.

Net income (controlling interest) decreased $69.2 million or 31% for the six months ended June 30, 2025 .

This decrease

was primarily due to a $61.6 million increase in Intangible amortization and impairments attributable to the controlling interest

and a $38.9 million increase in Affiliate equity compensation expense attributable to the controlling interest.

These decreases

to Net income (controlling interest) were partially offset by a $35.9 million decrease in Income tax expense attributable to the

controlling interest.

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.

Our Adjusted EBITDA (controlling interest) increased $2.2 million or 1% in the three months ended June 30, 2025 , primarily

due to a $75.4 million or 7% increase in aggregate fees.

Adjusted EBITDA increased less than aggregate fees on a percentage

basis primarily due to a $4.1 million decrease in Investment and other income attributable to the controlling interest.

Adjusted EBITDA (controlling interest) decreased $29.4 million or 6% for the six months ended June 30, 2025 , primarily

due to a $125.8 million or 5% decrease in aggregate fees, resulting from a decline in performance-based 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

because it represents our performance before non-cash expenses relating to the 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.

For the three months ended June 30, 2025 , our Economic net income

(controlling interest) increased $3.3 million or 2% , primarily due to a $2.2 million increase in Adjusted EBITDA (controlling

Economic net income (controlling interest) decreased $24.7 million or 7% for the six months ended June 30, 2025 ,

primarily due to a $29.4 million or 6% decrease in Adjusted EBITDA (controlling interest).

Results of Operations

7 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions, except as noted)

Consolidated Affiliate average assets under management (in billions)

Consolidated Affiliate average assets under

management (in billions)

Consolidated revenue

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.

Our Consolidated revenue decreased $7.1 million or 1% for the three months ended June 30, 2025 , due to a $7.9 million or

1% decrease from asset-based fees, partially offset by a $0.8 million 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.

Our Consolidated revenue decreased $10.5 million or 1% for the six months ended June 30, 2025 , primarily due to an

$18.9 million or 2% decrease from asset-based fees, partially offset by an $8.4 million or 1% 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

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

8 unchanged sentences

(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

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.

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 .

Compensation and related expenses increased $48.4 million or 22% for the three months ended June 30, 2025 , primarily

due to a $41.0 million increase in Affiliate equity compensation expense primarily attributable to a modification of the terms of

certain equity awards at an Affiliate.

Compensation and related expenses increased $38.4 million or 8% for the six months ended June 30, 2025 , primarily due

to a $36.2 million increase in Affiliate equity compensation expense primarily attributable to a modification of the terms of

certain equity awards at an Affiliate, and a $12.4 million increase in compensation accruals.

These increases were partially

offset by a $10.2 million decrease in share-based compensation.

Selling, general and administrative expenses increased $6.3 million or 7% for the three months ended June 30, 2025 ,

primarily due to an $8.2 million increase in professional fees.

Selling, general and administrative expenses increased $9.3 million or 5% for the six months ended June 30, 2025 ,

primarily due to a $9.6 million increase in professional fees.

Intangible amortization and impairments decreased $1.0 million or 14% for the three months ended June 30, 2025 ,

primarily due to a $0.9 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Intangible amortization and impairments increased $75.1 million for the six months ended June 30, 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 $1.9 million decrease in amortization

expense due to certain definite-lived assets being fully amortized.

Interest expense increased $1.0 million or 3% for the three months ended June 30, 2025 , primarily due to a $5.6 million

increase from our 5.50% senior unsecured notes issued in August 2024 (the “2034 senior notes”).

This increase was partially

offset by a $4.7 million decrease due to the repayment of our senior unsecured term loan facility (the “term loan”), which was

fully repaid during the third quarter of 2024.

Interest expense increased $5.2 million or 8% for the six months ended June 30, 2025 , primarily due to an $11.3 million

increase from our 2034 senior notes and a $6.6 million increase from our 6.75% junior subordinated notes issued in March 2024

(“the 2064 junior subordinated notes”) .

These increases were partially offset by a $10.3 million decrease due to the repayment

of our term loan and a $2.2 million decrease due to the maturity of our 4.25% senior notes in February 2024.

There were no significant changes to Depreciation and other amortization for the three and six months ended June 30,

There were no significant changes to Other expenses (net) for the three months ended June 30, 2025 .

Other expenses (net) increased $1.7 million or 9% for the six months ended June 30, 2025 , primarily due to a $6.0 million

increase in expenses related to changes in the values of contingent payment obligations, partially offset by a $1.9 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.

For our Affiliates accounted for under the equity method, we use structured partnership interests in which we contractually

share in the Affiliate’s revenue or revenue less agreed-upon expenses.

Our share of pre-tax earnings 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) :

revenue , net of certain expense reimbursements paid by the underlying products (“ equity method revenue, net” ) , as well as pre-

tax equity method earnings, equity method intangible amortization, equity method intangible impairments, if any, and equity

method income tax, which in aggregate form Equity method income (net):

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions, except as noted)

Operating Performance Measures

Equity method Affiliate average assets under management (in billions)

Equity method revenue

Equity method Affiliate average assets under

management (in billions)

Equity method revenue, net

Financial Performance Measures

1 unchanged sentence

Equity method intangible amortization

Equity method intangible impairments

Equity method income tax

Equity method income (net)

Our equity method revenue decreased $197.9 million or 20% for the three months ended March 31, 2025 , due to a $221.0

___________________________

(1) Percentage change is not meaningful.

Our equity method revenue, net increased $82.5 million or 14% for the three months ended June 30, 2025 , due to a $116.3

million or 19% increase from asset-based fees, partially offset by a $33.8 million or 5% decrease from performance-based fees,

primarily in our liquid alternative strategies.

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, and changes in the

composition of our assets under management, including the impact of our investments in new Affiliates.

For the three months ended June 30, 2025 , pre-tax equity method earnings increased $13.8 million or 17% , primarily due to

an $82.5 million or 14% increase in equity method revenue, net.

Pre-tax equity method earnings increased more than equity

method revenue, net on a percentage basis primarily due to an increase in earnings at certain Affiliates in which we share in

revenue less agreed-upon expenses.

Equity method intangible amortization increased $6.1 million or 29% for the three months ended June 30, 2025 , primarily

due to a $4.1 million increase in amortization expense due to investments in new Affiliates and a $3.8 million increase in

amortization expense due to an increase in actual and expected client attrition for certain definite-lived acquired client

relationships.

These increases were partially offset by a $1.9 million decrease in amortization expense related to certain

definite-lived assets being fully amortized.

Equity method intangible impairments decreased $39.9 million for the three and six months ended June 30, 2025 .

Note 9 of our Consolidated Financial Statements.

Our equity method revenue, net decreased $115.3 million or 7% for the six months ended June 30, 2025 , due to a $254.8

million or 16% decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $139.5

1 unchanged sentence

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-

lived acquired client relationships.

These decreases were partially offset by a $0.2 million increase in amortization expense due

to investments in new Affiliates.

method Affiliate average assets under management, primarily in our liquid alternative strategies, and changes in the

composition of our assets under management, including the impact of our investments in new Affiliates.

For the six months ended June 30, 2025 , pre-tax equity method earnings decreased $29.2 million or 13% , primarily due to

a $115.3 million or 7% decrease in equity method revenue, net.

Pre-tax equity method earnings decreased more than equity

method revenue, net on a percentage basis primarily due to a decrease in earnings at certain Affiliates in which we share in

revenue less agreed-upon expenses and hold a greater economic interest.

Equity method intangible amortization increased $3.9 million or 9% for the six months ended June 30, 2025 , primarily due

to a $4.2 million increase in amortization expense due to investments in new Affiliates and a $3.4 million increase in

amortization expense due to an increase in actual and expected client attrition for certain definite-lived acquired client

relationships.

These increases were partially offset by a $3.7 million decrease in amortization expense related to certain

definite-lived assets being fully amortized.

Investment and Other Income

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

Investment and other income

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.

Investment and other income increased $6.2 million or 32% for the three months ended June 30, 2025 , primarily due to a

$9.2 million increase in unrealized gains on other investments.

Investment and other income decreased $0.1 million for the six months ended June 30, 2025 , primarily due to a $5.7

million decrease in realized gains on investments in marketable securities and a $1.5 million decrease in interest income.

decreases were partially offset by a $7.5 million increase in unrealized gains on other investments.

Income Tax Expense

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

2 unchanged sentences

attributable to the non-controlling interests.

Income tax expense decreased $28.0 million or 51% for the three months ended March 31, 2025 .

Income tax expense decreased $7.6 million or 18% for the three months ended June 30, 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 .

(controlling interest) for the three months ended June 30, 2025 was 28.5% as compared to 35.0% for the three months ended

June 30, 2024 .

The decrease in the tax rate (controlling interest) was primarily due to an expense to reduce the carrying value

of an Affiliate to fair value for which no tax benefit was recorded in the three months ended June 30, 2024, which did not recur,

partially offset by an expense attributable to a modification of the terms of certain equity awards at an Affiliate for which no tax

benefit was recorded in the three months ended June 30, 2025 .

Income tax expense decreased $35.6 million or 36% for the six months ended June 30, 2025 .

Our effective rate

(controlling interest) for the six months ended June 30, 2025 was 27.1% as compared to 29.4% for the six months ended June

The decrease in the tax rate (controlling interest) was primarily due to an expense to reduce the carrying value of an

Affiliate to fair value for which no tax benefit was recorded in the six months ended June 30, 2024 , which did not recur,

partially offset by an expense attributable to a modification of the terms of certain equity awards at an Affiliate for which no tax

benefit was recorded in the six months ended June 30, 2025 .

The following table presents Net income, Net income (non-controlling interests), and Net income (controlling interest):

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

1 unchanged sentence

Net income (controlling interest)

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

Net income (controlling interest) increased $8.3 million or 11% for the three months ended June 30, 2025 , primarily due to

an increase in Equity method income (net) and a decrease in Income tax expense attributable to the controlling interest.

increases to Net income (controlling interest) were partially offset by an increase in Affiliate equity compensation expense

attributable to the controlling interest.

Net income (controlling interest) decreased $69.2 million or 31% for the six months ended June 30, 2025 , primarily due to

an increase in Intangible amortization and impairments attributable to the controlling interest and an increase in Affiliate equity

compensation expense attributable to the controlling interest.

These decreases to Net income (controlling interest) 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

As supplemental information to 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

18 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

6 unchanged sentences

___________________________

(1) Includes e quity method income tax .

(1) Includes equity method income tax.

(2) Intangible amortization and impairments in our Consolidated Statements of Income include amortization attributable to the

6 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions)

Consolidated intangible amortization and impairments

Consolidated intangible amortization and impairments (non-controlling interests)

Consolidated intangible amortization and impairments (non-controlling

Equity method intangible amortization and impairments

3 unchanged sentences

general partner commitments, and other strategic investments.

For the three and six months ended June 30, 2025 , other

items includes a one-time expense of $30.5 million which resulted from a modification of Affiliate equity which , consistent

with the definitions of our non-GAAP performance measures, has been added back to Adjusted EBITDA (controlling

See Note 14 of our Consolidated Financial Statements.

Economic Net Income (controlling interest) and Economic Earnings Per Share

22 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in millions, except per share data)

5 unchanged sentences

Average shares outstanding (diluted)

Hypothetical issuance of shares to settle Redeemable non-controlling interests

Hypothetical issuance of shares to settle Redeemable non-controlling

Assumed issuance of junior convertible securities shares

3 unchanged sentences

(1) See note (2) to the table in “Adjusted EBITDA (controlling interest).”

(2) Includes e quity method deferred taxes.

(2) Includes equity method deferred taxes.

(3) Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations,

2 unchanged sentences

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.

Other economic items were net of income tax expense of

$1.2 million and $3.0 million for the three months ended June 30, 2024 and 2025 , respectively, and $1.1 million and $4.5

million for the six months ended June 30, 2024 and 2025 , respectively.

For the three and six months ended June 30, 2025 ,

other economic items includes a one-time expense of $30.5 million which resulted from a modification of Affiliate equity

which, consistent with the definitions of our non-GAAP performance measures, has been added back to Economic net

income (controlling interest).

See Note 14 of our Consolidated Financial Statements.

Liquidity and Capital Resources

6 unchanged sentences

Global Ratings.

Cash and cash equivalents were $816.5 million as of March 31, 2025 and were attributable to both our controlling and the

Cash and cash equivalents were $361.0 million as of June 30, 2025 and were attributable to b oth our controlling and the

non-controlling interests .

In the three months ended March 31, 2025 , we met our cash requirements primarily through cash

In the six months ended June 30, 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.

Our principal uses of cash in the six months ended June 30, 2025 were for investments in

new Affiliates, the return of excess capital through share repurchases, 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.

cash dividends on our common stock, repayment of debt, distributions to Affiliate equity holders, payment of income taxes, 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, 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.

The following table presents operating, investing, and financing cash flow activities:

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

(in millions)

5 unchanged sentences

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

For the six months ended June 30, 2025 , Cash flows from operating activities were $439.7 million , primarily from Net

income of $235.1 million and distributions of earnings received from equity method investments of $295.9 million .

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

items were partially offset by timing differences in the cash settlement of receivables, other assets, and payables, accrued

liabilities, and other liabilities of $135.4 million .

For the six months ended June 30, 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

For the six months ended June 30, 2025 , Cash flows used in investing activities were $529.3 million , primarily due to

$510.1 million of investments in Affiliates and $56.4 million of purchases of investment securities.

1 unchanged sentence

offset by $40.2 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.

For the six months ended June 30, 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

For the six months ended June 30, 2025 , Cash flows used in financing activities were $518.4 million , primarily due to

$277.5 million of repurchases of common stock, net, $149.7 million of distributions to non-controlling interests, and

$41.1 million of Affiliate equity purchases, net of issuances.

For the three months ended March 31, 2025 , financing cash flows

For the six months ended June 30, 2025 , financing cash flows

were primarily attributable to the controlling interest.

11 unchanged sentences

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

As of June 30, 2025 , the current redemption value of Affiliate equity interests was $454.0 million , of which $336.1 million

was presented as Redeemable non-controlling interests (including $20.0 million of consolidated Affiliate sponsored investment

products primarily attributable to third-party investors), and $117.9 million was included in Other liabilities.

timing and amounts of these purchases are difficult to predict, we paid $42.9 million for Affiliate equity purchases and received

$1.8 million for Affiliate equity issuances during the six months ended June 30, 2025 , and we expect net purchases of

approximately $120 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

4 unchanged sentences

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

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.

During the three and six months ended June 30, 2025 , we repurchased 0.6 million and 1.6 million shares of our common stock

at an average price per share of $168.72 and $170.16 , respectively.

As of June 30, 2025 , there were a total of 3.7 million shares

available for repurchase under our July 2024 share repurchase program.

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

(in millions)

4 unchanged sentences

the carrying value of our debt in the table above is not reduced for debt issuance costs.

On August 1, 2025, our $350.0 million 3.50% senior notes due 2025 (“the 2025 senior notes”) matured and were fully

As of the date of this Quarterly Report on Form 10-Q, the weighted average maturity of our remaining outstanding non-

senior bank debt is 23 years , all of which is maturing in 2030 and beyond.

Our nearest term non-senior bank debt maturity

relates to our $350.0 million senior notes due June 2030 (“the 2030 senior notes”).

See Note 6 of our Consolidated Financial

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

As of June 30, 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 June 30, 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.

As of March 31, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and

described below:

On July 30, 2025, we borrowed $100.0 million under the revolver.

As of June 30, 2025 , we had senior notes outstanding, the respective principal terms of which are presented and described

February 2015

13 unchanged sentences

Junior Subordinated Notes

As of March 31, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are presented

As of June 30, 2025 , we had junior subordinated notes outstanding, the respective principal terms of which are presented

and described below:

10 unchanged sentences

Coupon frequency

As of March 31, 2025 , the 2059 junior subordinated notes could be redeemed at any time, in whole or in part.

As of June 30, 2025 , the 2059 junior subordinated notes could be redeemed at any time, in whole or in part.

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

9 unchanged sentences

Junior Convertible Securities

As of March 31, 2025 , we had $341.7 million of principal outstanding in our 5.15% junior convertible trust preferred

As of June 30, 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.

15 unchanged sentences

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 .

W e did not repurchase any of our junior convertible securities during the six months ended June 30, 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

In the first quarter of 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”).

distribution program superseded and replaced our prior equity distribution program.

As of March 31, 2025 , no sales had

occurred under the equity distribution program.

As of June 30, 2025 , no sales had occurred

under the equity distribution program.

See Note 7 of our Consolidated Financial Statements.

1 unchanged sentence

See Notes 4 and 7 of our Consolidated Financial Statements.

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

attributable to the controlling interest were $6.9 million for the remainder of 2025 , $7.1 million from 2026 through 2027, $4.5

As of June 30, 2025 , our lease obligations were $18.8 million for the remainder of 2025 , $55.1 million from 2026 through

2027, $46.0 million from 2028 through 2029, and $48.9 million thereafter.

The portion of these lease obligations attributable to

the controlling interest were $5.0 million for the remainder of 2025 , $7.3 million from 2026 through 2027, $4.5 million from

2028 through 2029, and $7.2 million thereafter.

Recent Accounting Developments

21 unchanged sentences

additional future impairments.

For our indefinite-lived acquired client relationships, no other triggering events were identified during the three and six

months ended June 30, 2025 that would indicate an impairment.

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 .

There have been no material changes to our Quantitative and Qualitative Disclosures About Market Risk for the six months

ended June 30, 2025 .

Please refer to Item 7A of our 2024 Annual Report on Form 10-K.

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-Q

Item 2. Management’s Discussion and Analysis