AFFILIATED MANAGERS GROUP INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
AMG$362.96+3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001004434-24-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001004434-24-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 405 previous paragraphs and 471 current paragraphs.
249 unchanged; 116 reworded; 96 added; 36 removed; 4 previous and 10 current paragraphs rearranged.
Tables are not compared: 19 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (96)
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months ended June 30, 2024:
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By Strategy - Year to Date
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By Client Type - Year to Date
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Aggre gate fees were$1,098.1 million for thethree months ended June 30, 2024, anincrease of$95.0 million or 9% as
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increase from asset-based fees and a $21.1 million or 2% increase from performance-based fees, primarily in our liquid
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alternatives strategies. The increase in asset-based fees wasdue to an increase in our average assets under management,
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primarily in our alternatives strategies, and changes in the composition of our assets under management primarily driven by
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compared to thesix months ended June 30, 2023. The increase in our aggregate fees was due to a $148.5 million or 5%
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increase from asset-based fees, offset by an $87.0 million or 3% decrease from performance-based fees, primarily in our liquid
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primarily in our alternatives strategies, and changes in the composition of our assets under management primarily driven by
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investments in new Affiliates.
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Our Adjusted EBITDA (controlling interest)increased $3.2 million or 1% in thethree months ended June 30, 2024 primarily
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due to a $95.0 million or 9% increase in aggregate fees. Adjusted EBITDA increased less than aggregate fees on a percentage
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basis primarily due to the recognition of performance-based fees earned by Affiliates in which we hold a lesser economic
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hold a greater economic interest.
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decrease was primarily due to a $37.7 million decrease in Equity method income (net) and a $9.3 million increase in Income tax
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For thesix months ended June 30, 2024, our Net income (controlling interest)decreased $34.0 million or 13%. This
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by a $21.2 million increase in Equity method income (net).
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(controlling interest)decreased $11.4 million or 7%, primarily due to an $11.0 million increase in current and other deferred
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taxes.
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For thesix months ended June 30, 2024, our Economic net income (controlling interest)increased $17.2 million or 5%,
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in current and other deferred taxes.
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Our Consolidated revenue decreased $12.2 million or 2% for thethree months ended June 30, 2024, due to an $8.8 million
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or 1% decrease from asset-based fees and a $3.4 million or 1% decrease from performance-based fees, primarily in our private
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markets strategies. The decrease in asset-based fees was principally due to a decrease in consolidated Affiliate average assets
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3% decrease from asset-based fees and a $2.5 million decrease from performance-based fees, primarily in our private markets
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strategies. The decrease in asset-based fees was principally due to a decrease in consolidated Affiliate average assets under
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Compensation and related expenses decreased $13.6 million or 6% for thethree months ended June 30, 2024, primarily due
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to a $9.0 million decrease in compensation correlated to the decrease in Consolidated revenue and a $3.9 million decrease in
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share-based compensation expense.
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expense. These increases were partially offset by a $4.4 million decrease in compensation correlated to the decrease in
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Consolidated revenue.
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Selling, general and administrative expenses increased $4.2 million or 5% for thethree months ended June 30, 2024,
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primarily due to a $6.2 million increase in distribution and investment-related expenses principally as a result of the increase in
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decrease in professional fees.
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Transaction).
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Intangible amortization and impairments decreased $10.5 million or 42% for thesix months ended June 30, 2024, primarily
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due to a $7.0 million decrease from achange in expected future economic benefit related to certain definite-lived assets and a
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$3.3 million decrease due to the Veritable Transaction.
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Interest expense increased $2.6 million or 8% for thethree months ended June 30, 2024, primarily due to a $7.6 million
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Removed paragraphs (36)
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ended March 31, 2024:
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decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $74.6 million or 5%
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increase from asset-based fees. The increase in asset-based fees was principally due to changes in the composition of our assets
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greater economic interest.
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increase in Net income (controlling interest) was primarily due to a $58.9 million increase in Equity method income (net). This
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(controlling interest).
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$18.4 million or 3% decrease from asset-based fees. The decrease in asset-based fees was principally due tochanges in the
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composition of our assets under management and a decrease in our consolidated Affiliate average assets under management,
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compensation expense.
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$1.2 million decrease in non-income based and other taxes.
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There were no significant changes in Interest expense for the three months ended March 31, 2024.
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million increase in charitable contributions.
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Our equity method revenue decreased $16.0 million or 2% for the three months ended March 31, 2024, due to a $109.0
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million or 11% decrease from performance-based fees, primarily in our liquid alternative strategies, partially offset by a $93.0
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million or 9% increase from asset-based fees. The increase in asset-based fees was principally due to changes in the
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compositionof our assets under management and an increase in our equity method Affiliate average assets under management,
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While equity method revenue decreased $16.0 million or 2% for the three months ended March 31, 2024, equity method
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an $8.3 million decrease in amortization expense related to certain definite-lived assets being fully amortized. This decrease
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client relationships.
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Investment and other income decreased $20.0 million or 53% for the three months ended March 31, 2024, primarily due to
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Income tax expense increased $10.4 million or 23% for the three months ended March 31, 2024. Our consolidated income
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controlling interests. Our effective tax rate (controlling interest) for the three months ended March 31, 2023 was 24.0% as
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due toan increase in non-deductible compensation and uncertain tax positions. See Note 15 of our Consolidated Financial
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Statements.
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Net income (controlling interest)increased $15.3 million or 11% for the three months ended March 31, 2024, primarily due
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fourth quarter of 2022.
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partner commitments, and other strategic investments, andrealized economic gains and losses related to these seed capital,
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partner commitments, and other strategic investments. For the three months ended March 31, 2023 and 2024, other
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repayment of debt.
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interest.
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Financial Statements.
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repurchase under our October 2023 share repurchase program.
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Statements:
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described below:
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case of the 2060 junior subordinated notes, on or after September 30, 2026, in the case of the 2061 junior subordinated notes,
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million from 2027 through 2028, and$8.6 million thereafter.
Reworded paragraphs (116)
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March 31, 2024, our aggregate assets under management were approximately$699 billion across a diverse range of private
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June 30, 2024, our aggregate assets under management were approximately$701 billion across a diverse range of private
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continue to see demand for alternative strategies, as evidenced by our net inflows in this category for the three months ended
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continue to see client demand for alternative strategies, as evidenced by our net inflows in this category for thethree andsix
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March 31, 2024. At the same time, our equity strategies saw outflows in line with client cash flow trends across the industry.
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months ended June 30, 2024. At the same time, our equity strategies saw outflows in line with client cash flow trends across
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We continue to invest in areas of long-term client demand — including private markets, liquid alternatives, sustainable
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the industry. We continue to invest in areas of long-term client demand — including private markets, liquid alternatives,
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investment strategies, wealth management, and Asia — through new and existing Affiliates, to better position AMG to benefit
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sustainable investment strategies, wealth management, and Asia — through new and existing Affiliates, to better position AMG
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from industry growth trends. We also anticipate that independent investment firms will continue to seek access to an evolving
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to benefit from industry growth trends. We also anticipate that independent investment firms will continue to seek access to an
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range of partnership solutions, and that we have a significant opportunity to invest in additional high-quality firms across the
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evolving range of partnership solutions, and that we have a significant opportunity to invest in additional high-quality firms
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global investment management industry.
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across the global investment management industry.
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(1)Alternatives include private markets strategies, which accounted for 17% of our assets under management as of March 31,
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(1)Alternatives include private markets strategies, which accounted for 18% of our assets under management as of June 30,
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The following tables present changes in our assets under management by strategy and client type for the three months
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The following tables present changes in our assets under management by strategy and client type for thethree andsix
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Thefollowing tables present performance of our investment strategies, where available, measured by the percentage of
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The following tables present performance of our investment strategies, where available, measured by the percentage of
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(1)Past performance is not indicative of future results. Performance and AUM information is as of March 31, 2024 and is
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(1)Past performance is not indicative of future results. Performance and AUM information is as of June 30, 2024 and is based
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based on data available at the time of calculation. Product returns are sourced from Affiliates while benchmark returns are
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on data available at the time of calculation. Product returns are sourced from Affiliates while benchmark returns are
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period because they inherently depend on investment performance. As of March 31, 2024, approximately 27% of our total
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period because they inherently depend on investment performance. As of June 30, 2024, approximately 27% of our total assets
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assets under management could potentially earn performance-based fees. These percentages were approximately 12% and 48%
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under management could potentially earn performance-based fees. These percentages were approximately 12% and 47% of our
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of our assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method,
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assets under management for our consolidated Affiliates and Affiliates accounted for under the equity method, respectively.
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respectively. We anticipate performance-based fees will be a recurring component of our aggregate fees; however we do not
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We anticipate performance-based fees will be a recurring component of our aggregate fees; however we do not anticipate these
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anticipate these fees to be a significant component of our Consolidated revenue as these fees are predominantly earned by our
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fees to be a significant component of our Consolidated revenue as these fees are predominately earned by our Affiliates
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compared to the three months ended March 31, 2023. Thedecrease in our aggregate fees was due to a $108.1 million or 7%
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compared to thethree months ended June 30, 2023. The increase in our aggregate fees was due to a $73.9 million or 7%
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Aggregate fees were$1,471.6 million for the three months ended March 31, 2024, a decrease of$33.5 million or 2% as
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Aggregate fees were$2,569.7 million for thesix months ended June 30, 2024, anincrease of$61.5 million or 2% as
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under management and an increase in our average assets under management, primarily in our alternative strategies driven by
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alternatives strategies. The increase in asset-based fees was due to an increase in our average assets under management,
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Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management. For
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Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management.
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the three months ended March 31, 2024, our Adjusted EBITDA (controlling interest)increased $43.0 million or 20%, primarily
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For thesix months ended June 30, 2024, our Adjusted EBITDA (controlling interest)increased $46.2 million or 11%,
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from investments in new Affiliates and the recognition of performance-based fees earned by Affiliates in which we hold a
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primarily from investments in new Affiliates and the recognition of performance-based fees earned by Affiliates in which we
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For the three months ended March 31, 2024, our Net income (controlling interest)increased $15.3 million or 11%. The
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For thethree months ended June 30, 2024, our Net income (controlling interest)decreased $49.3 million or 39%. This
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and a$10.8 million increase in Income tax expense attributable to the controlling interest.
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expense attributable to the controlling interest.
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increase was partially offset by an $18.6 million decrease in Investment and other income attributable to the controlling interest
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decrease was primarily due to a $22.8 million decrease in Investment and other income attributable to the controlling interest
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attributable to the controlling interest and an increase in Income tax expense attributable to the controlling interest.
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and a $20.1 million increase in Income tax expense attributable to the controlling interest. These decreases were partially offset
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because it represents our performance before non-cash expenses primarily related to the acquisition of interests in Affiliates and
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because it represents our performance before non-cash expenses relating to the acquisition of interests in Affiliates and
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improves comparability of performance between periods. For the three months ended March 31, 2024, our Economic net
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improves comparability of performance between periods. For thethree months ended June 30, 2024, our Economic net income
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income (controlling interest)increased $28.6 million or 18%, primarily due to a$43.0 million increase in Adjusted EBITDA
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primarily due to a$46.2 million increase in Adjusted EBITDA (controlling interest), partially offset by a $24.5 million increase
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Our Consolidated revenue decreased $17.5 million or 3% for the three months ended March 31, 2024, primarily due to an
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Our Consolidated revenue decreased $29.6 million or 3% for thesix months ended June 30, 2024, due to a $27.1 million or
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primarily in our global equity strategies.
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management, primarily in our global equity strategies.
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Compensation and related expenses increased $18.1 million or 8% for the three months ended March 31, 2024, primarily
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Compensation and related expenses increased $4.5 million or 1% for thesix months ended June 30, 2024, primarily due to
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due to a$7.1 million increase in Affiliate equity compensation expense and a $6.4 million increase in share-based
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a $6.4 million increase in Affiliate equity compensation expense and a $2.5 million increase in share-based compensation
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expenses principally as a result of a decrease in average assets under management on which these expenses are incurred, and a
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average assets under management on which these expenses are incurred. This increase was partially offset by a $1.0 million
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Selling, general and administrative expenses decreased $5.4 million or 6% for the three months ended March 31, 2024,
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Selling, general and administrative expenses decreased $1.2 million or 1% for thesix months ended June 30, 2024,
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primarily due to a $2.2 million decrease in professional fees, a $1.3 million decrease in distribution and investment-related
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primarily due to a $3.2 million decrease in professional fees.
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Intangible amortization and impairments decreased $5.2 million or 42% for the three months ended March 31, 2024,
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Intangible amortization and impairments decreased $5.2 million or 42% for thethree months ended June 30, 2024,
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and a $1.7 million decrease due to the sale of our equity interest in Veritable, LP in the third quarter of 2023.
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and a $1.7 million decrease due to the sale of our equity interest in Veritable, LP in the third quarter of 2023, (the “Veritable
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Rearranged current paragraphs (10)
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accounted for under the equity method.
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under management, primarily in our global equity strategies.
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decrease in expenses related to changes in the values of contingent payment obligations.
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management primarily driven by investments in new Affiliates.
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$10.5 million increase in amortization expense due to investments in new Affiliates and a $5.4 million increase in amortization
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expense due to an increase in actual and expected client attrition for certain definite-lived acquired client relationships.
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attributable to the non-controlling interests.
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increase in the tax rate (controlling interest) was primarily due to a decrease in estimated foreign tax expense and tax windfalls
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partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital,
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the principal amount, plus any accrued and unpaid interest, if a rating agency makes certain changes relating to the equity credit
Rearranged previous paragraphs (4)
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Affiliates accounted for under the equity method.
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primarily attributable to the controlling interest.
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but not in part, at 100% of the principal amount, plus any accrued and unpaid interest, if certain changes in tax laws,
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occurred under the equity distribution program.