Affiliated Managers Group, Inc.: Form 10-Q for the period ended Sep 30, 2025

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

September 30, 2025, our aggregate assets under management were approximately $804 billion across a diverse range of

private markets, liquid alternative, and differentiated long-only investment strategies.

In the first quarter of 2025, we completed our minority investment in NorthBridge Partners, LLC (“NorthBridge”), a

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. Following

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,

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 minority 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 (the “Peppertree Transaction”). 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 $253.2 million, net of transaction costs, which included $99.8 million in cash and 2.9 million

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TPG Class A common shares, all of which we have since sold. Our gain on the transaction was $127.6 million and our after-

tax net proceeds were $218.1 million.

In October 2025, we announced an agreement with Brown Brothers Harriman (“BBH”), a privately held global financial

services firm, to acquire a minority equity interest in BBH Credit Partners, a newly formed subsidiary of BBH focused on

structured and alternative credit investment strategies. Following the close of the transaction, BBH partners will continue to

direct day-to-day operations and our ownership will be limited to a minority interest in the BBH Credit Partners subsidiary.

The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions.

In October 2025, we completed the previously announced agreement to acquire a minority equity interest in Montefiore

Investment (“Montefiore”), a European private equity firm focused on the services sector. Following the close of the

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

On November 3, 2025, we completed the previously announced agreement to sell a portion of our minority equity

interest in Comvest Partners (“Comvest”), as part of the announced acquisition of Comvest’s private credit business by

Manulife Financial Corporation. Pursuant to the terms of the agreement, we received total cash consideration of

approximately $285 million. We acquired our interest in Comvest for $125.0 million in 2020. Our gain on the transaction

was taxable at closing. Comvest will be included in our results through the closing date and the portion retained will continue

to be included going forward.

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:

(in billions, except as noted)

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. 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

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, and our equity strategies experienced

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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.

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

September 30, 2025:

(in billions)

(in billions)

(1) Equities includes assets under management attributable to both global equities and U.S. equities.

(2) Assets under management attributable to Peppertree as of the closing date.

(3) 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.

(4) Other includes assets under management attributable to product transitions and reclassifications.

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The following tables present performance of our investment strategies, where available, measured by the percentage of

assets under management ahead of their relevant benchmark:

(1) Past performance is not indicative of future results. Performance and AUM information is as of September 30, 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

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. 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. 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 September 30, 2025, approximately 28% of our total

assets under management could potentially earn performance-based fees. These percentages were approximately 12% and 47%

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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 $1,346.0 million for the three months ended September 30, 2025, an increase of $188.9 million or

16% as compared to the three months ended September 30, 2024. The increase in our aggregate fees was due to a $185.6

million or 16% increase from asset-based fees and a $3.3 million increase 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 liquid alternative and private markets strategies, and changes in the composition of our assets

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

Aggregate fees were $3,789.8 million for the nine months ended September 30, 2025, an increase of $63.0 million or 2% as

compared to the nine months ended September 30, 2024. The increase in our aggregate fees was due to a $306.1 million or 8%

increase from asset-based fees, offset by a $243.1 million or 6% 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 liquid alternative and private markets strategies, and changes in the composition of our assets

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

Financial and Supplemental Financial Performance Measures

The following table presents our key financial and supplemental financial performance measures:

(in millions)

(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) increased $88.8 million or 72% for the three months ended September 30, 2025. This

increase was primarily due to $127.6 million of Affiliate transaction gains and a $35.9 million increase in Equity method

income (net). These increases were partially offset by a $39.1 million increase in Income tax expense attributable to the

controlling interest, primarily due to Affiliate transaction gains, and a $36.7 million increase in Affiliate equity compensation

expense attributable to the controlling interest.

Net income (controlling interest) increased $19.5 million or 6% for the nine months ended September 30, 2025. This

increase was primarily due to $127.6 million of Affiliate transaction gains and a $41.2 million increase in Equity method

income (net). These increases were partially offset by a $75.6 million increase in Affiliate equity compensation expense

attributable to the controlling interest and a $60.9 million increase in Intangible amortization and impairments attributable to the

controlling interest.

Adjusted EBITDA (controlling interest) is an important supplemental financial performance measure for management.

Our Adjusted EBITDA (controlling interest) increased $36.8 million or 17% for the three months ended September 30, 2025,

primarily due to a $188.9 million or 16% increase in aggregate fees.

Adjusted EBITDA (controlling interest) increased $7.4 million or 1% for the nine months ended September 30, 2025,

primarily due to a $63.0 million or 2% increase 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 relating to the acquisition of interests in Affiliates and

improves comparability of performance between periods. For the three months ended September 30, 2025, our Economic net

income (controlling interest) increased $26.5 million or 17%, primarily due to a $36.8 million or 17% increase in Adjusted

EBITDA (controlling interest).

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Economic net income (controlling interest) increased $1.8 million for the nine months ended September 30, 2025,

primarily due to a $7.4 million or 1% increase in Adjusted EBITDA (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:

(in millions, except as noted)

Our Consolidated revenue increased $11.6 million or 2% for the three months ended September 30, 2025, due to a $16.7

million or 3% increase from asset-based fees, partially offset by a $5.1 million or 1% decrease from performance-based fees,

primarily in our private markets strategies. The increase in asset-based fees was principally due to an increase in our

consolidated Affiliate average assets under management, primarily in our private markets strategies, partially offset by changes

in the composition of our assets under management.

Our Consolidated revenue increased $1.2 million for the nine months ended September 30, 2025, due to a $3.3 million

increase from performance-based fees, primarily in our private markets strategies, partially offset by a $2.1 million decrease

from asset-based fees. 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:

(in millions)

(1) Percentage change is not meaningful.

Compensation and related expenses increased $32.7 million or 15% for the three months ended September 30, 2025,

primarily due to a $31.6 million increase in Affiliate equity compensation expense.

Compensation and related expenses increased $71.1 million or 11% for the nine months ended September 30, 2025,

primarily due to a $67.8 million increase in Affiliate equity compensation expense partially attributable to a modification of the

terms of certain equity awards at an Affiliate and a $10.9 million increase in compensation accruals correlated to the increase in

Consolidated revenue. These increases were partially offset by a $7.8 million decrease in share-based compensation.

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Selling, general and administrative expenses increased $3.5 million or 4% for the three months ended September 30, 2025,

primarily due to a $3.5 million increase in professional fees.

Selling, general and administrative expenses increased $12.7 million or 5% for the nine months ended September 30, 2025,

primarily due to an $11.4 million increase in professional fees.

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

primarily due to a $1.0 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Intangible amortization and impairments increased $74.2 million for the nine months ended September 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 $2.8 million decrease in

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

Interest expense decreased $1.5 million or 4% for the three months ended September 30, 2025, primarily due to a $2.7

million decrease due to our senior unsecured term loan facility (the “term loan”), which was fully repaid during the third quarter

of 2024, and a $2.1 million decrease due to the maturity of our 3.50% senior notes in August 2025 (the “2025 senior notes”).

These decreases were partially offset by a $3.1 million increase from our 5.50% senior unsecured notes issued in August 2024

(the “2034 senior notes”).

Interest expense increased $3.7 million or 4% for the nine months ended September 30, 2025, primarily due to a $14.4

million increase from our 2034 senior notes and a $6.7 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 $13.0 million decrease due to

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

$2.1 million decrease due to the maturity of our 2025 senior notes.

There were no significant changes to Depreciation and other amortization for the three and nine months ended

September 30, 2025.

Other expenses (net) increased $1.5 million or 13% for the three months ended September 30, 2025, primarily due to a $1.4

million increase in expenses related to changes in values of contingent payment obligations.

Other expenses (net) increased $3.2 million or 10% for the nine months ended September 30, 2025, primarily due to a $7.4

million increase in expenses related to changes in the values of contingent payment obligations, partially offset by a $2.7

million decrease in rent and related office costs.

Equity Method Income (Net)

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.

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The following table presents equity method Affiliate average assets under management and equity method Affiliate

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):

(in millions, except as noted)

(1) Percentage change is not meaningful.

Our equity method revenue, net increased $177.3 million or 28% for the three months ended September 30, 2025, due to a

$168.9 million or 27% increase from asset-based fees and an $8.4 million or 1% increase from performance-based fees,

primarily in our private markets and 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 September 30, 2025, pre-tax equity method earnings increased $39.1 million or 49%, primarily

due to a $177.3 million or 28% 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 $1.9 million or 8% for the three months ended September 30, 2025,

primarily due to a $5.8 million increase in amortization expense due to investments in new Affiliates. This increase was

partially offset by a $4.1 million decrease in amortization expense related to certain definite-lived assets being fully amortized.

Our equity method revenue, net increased $61.8 million or 3% for the nine months ended September 30, 2025, due to a

$308.2 million or 14% increase from asset-based fees, offset by a $246.4 million or 11% 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 nine months ended September 30, 2025, pre-tax equity method earnings increased $10.0 million or 3%, primarily

due to a $61.8 million or 3% increase in equity method revenue, net.

Equity method intangible amortization increased $5.8 million or 9% for the nine months ended September 30, 2025,

primarily due to a $10.1 million increase in amortization expense due to investments in new Affiliates. This increase was

partially offset by a $3.5 million decrease in amortization expense related to certain definite-lived assets being fully amortized

and a $1.1 million decrease in amortization expense due to a decrease in actual and expected client attrition for certain definite-

lived acquired client relationships.

Equity method intangible impairments decreased $39.9 million for the nine months ended September 30, 2025. See Note 9

of our Consolidated Financial Statements.

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Affiliate Transaction Gains

For the three and nine months ended September 30, 2025, we recorded a $127.6 million gain on the Peppertree

Transaction. See Note 9 of our Consolidated Financial Statements.

Investment and Other Income

The following table presents our Investment and other income:

(in millions)

Investment and other income increased $4.8 million or 21% for the three months ended September 30, 2025, primarily due

to a $5.6 million increase in unrealized gains on other investments and a $5.0 million increase in realized gains on marketable

securities. These increases were partially offset by a $7.2 million decrease in interest income.

Investment and other income increased $4.7 million or 8% for the nine months ended September 30, 2025, primarily due to

a $13.2 million increase in unrealized gains on other investments and a $2.2 million increase in unrealized gains on marketable

securities. These increases were partially offset by an $11.1 million decrease in interest income.

Income Tax Expense

The following table presents our Income tax expense:

(in millions)

(1) Percentage change is not meaningful.

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 increased $40.3 million for the three months ended September 30, 2025. Our effective tax rate

(controlling interest) for the three months ended September 30, 2025 was 24.4% as compared to 19.3% for the three months

ended September 30, 2024. The increase in the effective tax rate (controlling interest) was primarily due to an expense

attributable to certain equity awards at an Affiliate for which no tax benefit was recorded, partially offset by tax windfalls

attributable to share-based compensation.

Income tax expense increased $4.7 million or 4% for the nine months ended September 30, 2025. Our effective tax rate

(controlling interest) for the nine months ended September 30, 2025 was 25.6% as compared to 26.1% for the nine months

ended September 30, 2024. The decrease in the effective 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 nine months ended

September 30, 2024, which did not recur, partially offset by an expense attributable to certain equity awards at an Affiliate for

which no tax benefit was recorded in the nine months ended September 30, 2025.

Net Income

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

(in millions)

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Net income (controlling interest) increased $88.8 million or 72% for the three months ended September 30, 2025, primarily

due to Affiliate transaction gains and an increase in Equity method income (net). These increases to Net income (controlling

interest) were partially offset by an increase in Income tax expense attributable to the controlling interest and an increase in

Affiliate equity compensation expense attributable to the controlling interest.

Net income (controlling interest) increased $19.5 million or 6% for the nine months ended September 30, 2025, primarily

due to Affiliate transaction gains and an increase in Equity method income (net). These increases to Net income (controlling

interest) were partially offset by an increase in Affiliate equity compensation expense attributable to the controlling interest and

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

Supplemental Financial Performance Measures

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

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.

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):

(in millions)

(1) Includes equity method income tax.

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(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:

(in millions)

(3) The three and nine months ended September 30, 2025 includes Peppertree Transaction gain of $127.6 million and realized

gains of $6.2 million on TPG Class A common shares, which are recorded in Affiliate transaction gains and Investment and

other income, respectively. See Note 9 of our Consolidated Financial Statements.

(4) 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. For the nine months ended September 30, 2025, other items

includes an expense of $30.5 million which resulted from a modification of Affiliate equity in the second quarter which,

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

(controlling interest). See Note 14 of our Consolidated Financial Statements.

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

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.

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The following table presents a reconciliation of Net income (controlling interest) to Economic net income (controlling

interest) and Economic earnings per share:

(in millions, except per share data)

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

(2) Includes equity method deferred taxes.

(3) The three and nine months ended September 30, 2025 includes Peppertree Transaction gain of $127.6 million and realized

gains on TPG Class A common shares of $6.2 million, net of $32.7 million of income tax expense. See Note 9 of our

Consolidated Financial Statements.

(4) 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. For the nine months ended September 30, 2025, other economic

items includes an expense of $30.5 million which resulted from a modification of Affiliate equity in the second quarter

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

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 $476.1 million as of September 30, 2025 and were attributable to both our controlling and

the non-controlling interests. In the nine months ended September 30, 2025, we met our cash requirements primarily through

cash generated by operating activities. Our principal uses of cash in the nine months ended September 30, 2025 were for

investments in new Affiliates, the return of excess capital through share repurchases, distributions to Affiliate equity holders,

and repayment of debt.

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, 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

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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:

(in millions)

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 nine months ended September 30, 2025, Cash flows from operating activities were $716.8 million, primarily from

Net income of $526.1 million adjusted for non-cash items of $105.5 million and distributions of earnings received from equity

method investments of $379.7 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 $56.7 million. For the nine months ended

September 30, 2025, operating cash flows were primarily attributable to the controlling interest.

Investing Cash Flow

For the nine months ended September 30, 2025, Cash flows used in investing activities were $258.6 million, primarily due

to $515.1 million of investments in Affiliates and $72.3 million of purchases of investment securities. These items were

partially offset by $229.4 million of maturities and sales of investment securities and $99.8 million of cash proceeds from

Affiliate transactions. For the nine months ended September 30, 2025, investing cash flows were primarily attributable to the

controlling interest.

Financing Cash Flow

For the nine months ended September 30, 2025, Cash flows used in financing activities were $948.6 million, primarily due

to $353.2 million of repurchases of common stock, net, repayment of senior notes of $350.0 million, $205.5 million of

distributions to non-controlling interests, and $105.8 million of taxes paid on shares withheld for share-based awards. These

items were partially offset by borrowings of senior bank debt of $100.0 million. For the nine months ended September 30,

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 September 30, 2025, the current redemption value of Affiliate equity interests was $508.7 million, of which $273.5

million was presented as Redeemable non-controlling interests (including $30.3 million of consolidated Affiliate sponsored

investment products primarily attributable to third-party investors), and $235.2 million was included in Other liabilities.

Although the timing and amounts of these purchases are difficult to predict, we paid $51.8 million for Affiliate equity purchases

and received $1.8 million for Affiliate equity issuances during the nine months ended September 30, 2025, and we expect net

purchases of approximately $110 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.

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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 and nine months ended September 30, 2025, we repurchased 0.3 million and 1.9 million shares of our common

stock at an average price per share of $230.04 and $180.49, respectively. As of September 30, 2025, there were a total of 3.4

million shares available for repurchase under our July 2024 share repurchase program.

Debt

The following table presents the carrying value of our outstanding indebtedness:

(in millions)

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.

As of September 30, 2025 , the weighted average maturity of our 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 Statements.

Senior Bank Debt

As of September 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 September 30, 2025, we had outstanding borrowings under the revolver of $100.0 million, and we could borrow all

remaining capacity and maintain compliance with all of the terms of the revolver.

Senior Notes

In the third quarter of 2025, our $350.0 million 3.50% senior notes matured and were fully repaid.

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

described below:

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 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 (plus accrued and unpaid

interest), 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.

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Junior Subordinated Notes

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

presented and described below:

As of September 30, 2025, each of the 2059 and the 2060 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, 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 September 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. 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 nine months ended September 30, 2024 and 2025.

Equity Distribution Program

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”). This equity

distribution program superseded and replaced our prior equity distribution program. As of September 30, 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 September 30, 2025, our lease obligations were $10.3 million for the remainder of 2025, $56.7 million from 2026

through 2027, $48.2 million from 2028 through 2029, and $56.8 million thereafter. The portion of these lease obligations

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attributable to the controlling interest were $3.1 million for the remainder of 2025, $9.1 million from 2026 through 2027, $6.8

million from 2028 through 2029, and $14.5 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.

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

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

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

months ended September 30, 2025. Please refer to Item 7A of our 2024 Annual Report on Form 10-K.

We carried out an evaluation under the supervision and with the participation of our management, including our Chief

Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and

procedures during the quarter covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief

Executive Officer and Chief Financial Officer concluded that, as of the end of the quarter covered by this Quarterly Report on

Form 10-Q, our disclosure controls and procedures are effective in ensuring that (i) the information required to be disclosed by

us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is

recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s

rules and forms, and (ii) such information is accumulated and communicated to our management, including our principal

executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In

designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how

well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our

management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures.

Our disclosure controls and procedures were designed to provide reasonable assurance of achieving their stated objectives, and

our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were

effective at the reasonable assurance level. We review on an ongoing basis and document our disclosure controls and

procedures, and our internal control over financial reporting, and we may from time to time make changes in an effort to

enhance their effectiveness and ensure that our systems evolve with our business.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange

Act) occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably

likely to materially affect, our internal control over financial reporting.

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