Back to top

Analyst Blog

Affiliated Managers Group Inc.’s (AMG - Analyst Report) third-quarter 2013 economic net income (ENI) came in at $2.19 per share, which beat the Zacks Consensus Estimate by a nickel. Moreover, this compared favorably with ENI of $1.91 recorded in the year-ago quarter.

Better-than-expected results were aided by top-line growth, partially offset by higher operating expenses. Further, continued improvement in asset under management (AUM) and a strong balance sheet were the tailwinds.

Affiliated Managers’ ENI came in at $121.8 million, rising 20.4% year over year.

Behind the Headlines

Affiliated Managers’ total revenue increased 18.0% year over year to $551.6 million. However, it lagged the Zacks Consensus Estimate of $554.0 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $170.4 million, rising 27.6% from $133.5 million in the prior quarter.

Total operating expenses increased 16.8% year over year to $382.5 million. Rise in all operating expense components except for depreciation and other amortization cost was the primarily reason for the increase.

Assets under Management

As of Sep 30, 2013, total AUM was $508.4 billion, reflecting net client cash flow of $10.1 billion. This compared favorably with $469.5 billion recorded in the prior quarter.

As of Sep 30, 2013, mutual fund AUM was $156.1 billion, up 9.3% sequentially. Moreover, institutional AUM came in at $267.5 billion, increasing 7.3% sequentially. Further, high net worth AUM were $65.2 billion, rising 10.0% from the prior quarter.

Capital and Liquidity

As of Sep 30, 2013, Affiliated Managers had $522.4 million in cash and cash equivalents compared with $413.8 million as of Jun 30, 2013. Moreover, the company had $575.0 million as senior bank debt at the quarter-end compared with $100.0 million as of Jun 30, 2013.

Furthermore, the company had shareholders’ equity of $2.0 billion compared with $2.2 billion as of Jun 30, 2013.

Performance of Other Asset Managers

Ameriprise Financial, Inc. (AMP - Analyst Report) and Invesco Ltd. (IVZ - Analyst Report) reported better-than-expected third-quarter earnings. Results for these two companies were driven by top-line growth, partially offset by higher operating expenses.

The Blackstone Group L.P.’s (BX - Analyst Report) third-quarter economic net income marginally missed the Zacks Consensus Estimate. Lower-than-expected results were due to a fall in the top line, partially offset by lower expenses.

Our Viewpoint

Affiliated Managers is expected to benefit from increased investments in the near term. Moreover, the growing need for risk management and alternative investment solutions within the financial service industry will likely be accretive to the company’s financials going forward.

However, a slow economic recovery, high debt levels in Affiliated Managers’ balance sheet and rising expenses are expected to keep the company’s financials under pressure.

Affiliated Managers currently carries a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%