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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)  
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to          
Commission File Number 001-13459
amg-20220331_g1.jpg
AFFILIATED MANAGERS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3218510
(State or other jurisdiction
of incorporation or organization)
 (IRS Employer Identification Number)
777 South Flagler Drive, West Palm Beach, Florida 33401
(Address of principal executive offices)
(800345-1100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)AMGNew York Stock Exchange
5.875% Junior Subordinated Notes due 2059MGRNew York Stock Exchange
4.750% Junior Subordinated Notes due 2060MGRBNew York Stock Exchange
4.200% Junior Subordinated Notes due 2061MGRDNew York Stock Exchange



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer  Non-accelerated filer 
 Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
There were 38,675,094 shares of the registrant’s common stock outstanding on May 4, 2022.


FORM 10-Q
TABLE OF CONTENTS



PART I—FINANCIAL INFORMATION
Item 1.Financial Statements
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
(unaudited)
 For the Three Months Ended March 31,
 20212022
Consolidated revenue$559.1 $607.3 
Consolidated expenses:
Compensation and related expenses246.9 255.0 
Selling, general and administrative78.8 89.4 
Intangible amortization and impairments7.5 12.6 
Interest expense 27.5 29.1 
Depreciation and other amortization4.3 3.4 
Other expenses (net)13.5 5.6 
Total consolidated expenses378.5 395.1 
Equity method income (net)51.7 48.6 
Investment and other income32.3 13.6 
Income before income taxes264.6 274.4 
Income tax expense 50.5 55.7 
Net income 214.1 218.7 
Net income (non-controlling interests)(64.2)(72.7)
Net income (controlling interest)$149.9 $146.0 
Average shares outstanding (basic)42.6 39.7 
Average shares outstanding (diluted)45.4 46.9 
Earnings per share (basic)$3.52 $3.68 
Earnings per share (diluted)$3.41 $3.44 

The accompanying notes are an integral part of the Consolidated Financial Statements.
2

AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
 For the Three Months Ended March 31,
 20212022
Net income $214.1 $218.7 
Other comprehensive income (loss), net of tax:  
Foreign currency translation gain (loss)23.8 (11.8)
Change in net realized and unrealized gain on derivative financial instruments0.5 0.0 
Other comprehensive income (loss), net of tax24.3 (11.8)
Comprehensive income 238.4 206.9 
Comprehensive income (non-controlling interests)(64.0)(66.2)
Comprehensive income (controlling interest)$174.4 $140.7 

The accompanying notes are an integral part of the Consolidated Financial Statements.
3

AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
December 31,
2021
March 31,
2022
Assets  
Cash and cash equivalents$908.5 $501.0 
Receivables419.2 465.8 
Investments in marketable securities78.5 81.1 
Goodwill2,689.2 2,683.7 
Acquired client relationships (net)1,966.4 1,943.3 
Equity method investments in Affiliates (net)2,134.4 2,195.2 
Fixed assets (net)73.9 73.9 
Other investments375.2 394.1 
Other assets231.1 232.7 
Total assets$8,876.4 $8,570.8 
Liabilities and Equity 
Payables and accrued liabilities$789.1 $551.6 
Debt2,490.4 2,577.9 
Deferred income tax liability (net)503.2 485.7 
Other liabilities709.2 723.6 
Total liabilities4,491.9 4,338.8 
Commitments and contingencies (Note 8)
Redeemable non-controlling interests673.9 638.8 
Equity: 
Common stock ($0.01 par value, 153.0 shares authorized; 58.5 shares issued in 2021 and 2022)
0.6 0.6 
Additional paid-in capital651.6 557.4 
Accumulated other comprehensive loss(87.9)(93.2)
Retained earnings4,569.5 4,719.4 
5,133.8 5,184.2 
Less: Treasury stock, at cost (18.3 shares in 2021 and 19.5 shares in 2022)
(2,347.4)(2,515.4)
Total stockholders' equity2,786.4 2,668.8 
Non-controlling interests924.2 924.4 
Total equity3,710.6 3,593.2 
Total liabilities and equity$8,876.4 $8,570.8 

The accompanying notes are an integral part of the Consolidated Financial Statements.
4

AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in millions)
(unaudited)
Three Months Ended March 31, 2021Total Stockholders’ Equity  
 Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury
Stock at
Cost
Non-
controlling
Interests
Total
Equity
December 31, 2020$0.6 $728.9 $(98.3)$4,005.5 $(1,857.0)$537.6 $3,317.3 
Net income — — — 149.9 — 64.2 214.1 
Other comprehensive income (loss), net of tax— — 24.5 — — (0.2)24.3 
Share-based compensation— 9.7 — — — — 9.7 
Common stock issued under share-based incentive plans— (44.3)— — 34.1 — (10.2)
Repurchases of junior convertible securities— (2.9)— — — — (2.9)
Share repurchases— 17.3 — — (227.3)— (210.0)
Dividends ($0.01 per share)
— — — (0.5)— — (0.5)
Affiliate equity activity:
Affiliate equity compensation— 4.4 — — — 20.8 25.2 
Issuances— 0.6 — — — 1.1 1.7 
Purchases— 11.6 — — — 15.7 27.3 
Changes in redemption value of Redeemable non-controlling interests— (105.6)— — — — (105.6)
Transfers to Redeemable non-controlling interests— — — — — (0.5)(0.5)
Distributions to non-controlling interests— — — — — (102.6)(102.6)
March 31, 2021$0.6 $619.7 $(73.8)$4,154.9 $(2,050.2)$536.1 $3,187.3 
Three Months Ended March 31, 2022Total Stockholders’ Equity  
 Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Treasury
Stock at
Cost
Non-
controlling
Interests
Total
Equity
December 31, 2021$0.6 $651.6 $(87.9)$4,569.5 $(2,347.4)$924.2 $3,710.6 
Impact of adoption of new accounting standards (see Note 2)— (80.6)— 4.5 — — (76.1)
Net income — — — 146.0 — 72.7 218.7 
Other comprehensive loss, net of tax— — (5.3)— — (6.5)(11.8)
Share-based compensation— 14.7 — — — — 14.7 
Common stock issued under share-based incentive plans— (29.9)— — 16.6 — (13.3)
Share repurchases— — — — (184.6)— (184.6)
Dividends ($0.01 per share)
— — — (0.6)— — (0.6)
Affiliate equity activity:
Affiliate equity compensation— 1.0 — — — 14.5 15.5 
Issuances— (6.9)— — — 21.1 14.2 
Purchases— 0.5 — — — (2.9)(2.4)
Changes in redemption value of Redeemable non-controlling interests— 7.0 — — — — 7.0 
Capital contributions and other— — — — — 23.8 23.8 
Distributions to non-controlling interests— — — — — (122.5)(122.5)
March 31, 2022$0.6 $557.4 $(93.2)$4,719.4 $(2,515.4)$924.4 $3,593.2 
The accompanying notes are an integral part of the Consolidated Financial Statements.

5

AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 For the Three Months Ended March 31,
 20212022
Cash flow from (used in) operating activities:
Net income $214.1 $218.7 
Adjustments to reconcile Net income to cash flow from (used in) operating activities: 
Intangible amortization and impairments7.5 12.6 
Depreciation and other amortization4.3 3.4 
Deferred income tax expense17.8 20.2 
Equity method income (net)(51.7)(48.6)
Distributions of earnings received from equity method investments157.9 173.1 
Share-based compensation and Affiliate equity expense34.9 30.9 
Other non-cash items(23.3)(13.3)
Changes in assets and liabilities: 
Purchases of securities by consolidated Affiliate sponsored investment products(48.3)(11.8)
Sales of securities by consolidated Affiliate sponsored investment products23.7 10.3 
Increase in receivables(86.6)(52.2)
Decrease (increase) in other assets11.2 (1.8)
Decrease in payables, accrued liabilities, and other liabilities(72.6)(196.5)
Cash flow from operating activities188.9 145.0 
Cash flow from (used in) investing activities: 
Investments in Affiliates, net of cash acquired(11.8)(147.8)
Purchase of fixed assets(0.7)(3.7)
Purchase of investment securities(21.0)(15.4)
Sale of investment securities9.4 9.5 
Cash flow used in investing activities(24.1)(157.4)
Cash flow from (used in) financing activities: 
Repayments of senior bank debt and junior convertible securities(15.0)(16.5)
Repurchases of common stock (net)(312.8)(201.3)
Dividends paid on common stock(0.5)(0.4)
Distributions to non-controlling interests(102.6)(122.5)
Affiliate equity (purchases) / issuances (net)(15.0)6.3 
Subscriptions to consolidated Affiliate sponsored investment products, net of redemptions23.1 4.4 
Other financing items (18.1)(58.9)
Cash flow used in financing activities(440.9)(388.9)
Effect of foreign currency exchange rate changes on cash and cash equivalents2.6 (6.2)
Net decrease in cash and cash equivalents(273.5)(407.5)
Cash and cash equivalents at beginning of period1,039.7 908.5 
Cash and cash equivalents at end of period$766.2 $501.0 

The accompanying notes are an integral part of the Consolidated Financial Statements.
6

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


1.Basis of Presentation and Use of Estimates
The Consolidated Financial Statements of Affiliated Managers Group, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for full year financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair statement of the Company’s interim financial position and results of operations have been included and all intercompany balances and transactions have been eliminated. Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation. Operating results for interim periods are not necessarily indicative of the results that may be expected for any other period or for the full year. The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 includes additional information about its operations, financial position, and accounting policies, and should be read in conjunction with this Quarterly Report on Form 10-Q.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
All amounts in these notes, except per share data in the text and tables herein, are stated in millions unless otherwise indicated.
2.Accounting Standards and Policies
Recently Adopted Accounting Standards
Effective January 1, 2022, the Company adopted Accounting Standard Update (“ASU”) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity using a modified retrospective method. ASU 2020-06 removes the separate liability and equity accounting for the Company’s junior convertible securities. Consequently, the Company’s junior convertible securities are accounted for wholly as debt and are carried at their face value less unamortized debt issuance costs. The adoption resulted in increases in Debt and beginning Retained earnings of $101.5 million and $4.5 million, respectively, and decreases in Additional paid-in-capital and Deferred income tax liability (net) of $80.6 million and $25.4 million, respectively. As a result of the adoption of ASU 2020-06, the Company also updated its Earnings Per Share accounting policy as described below.
Earnings Per Share
The calculation of Earnings per share (basic) is based on the weighted average number of shares of the Company’s common stock outstanding during the period. Earnings per share (diluted) is similar to Earnings per share (basic), but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s common stock.
The Company had share-based compensation awards outstanding during the periods presented with vesting provisions subject to certain performance conditions. These awards are excluded from the calculation of Earnings per share (diluted) if the performance condition has not been met as of the end of the reporting period.
The Company has agreements with Affiliate equity holders that provide the Company a conditional right to call and holders a conditional right to put their interests to the Company at certain intervals. These arrangements are presented at their current redemption value as Redeemable non-controlling interests. The Company may settle these interests in cash or, subject to the terms of the applicable agreement, shares of its common stock, or other forms of consideration, at its option. Prior to 2022, the Company excluded any potential dilutive effect from possible share settlements of Redeemable non-controlling interests as the Company currently intends to settle in cash. Upon adoption of ASU 2020-06, the Company must assume the settlement of all of its Redeemable non-controlling interests using the maximum number of shares permitted under its arrangements. Purchases are assumed to occur at the beginning of the reporting period. The Company acquires the rights to the underlying Affiliate equity when purchased, and therefore, the earnings that would be acquired (net of tax) are assumed to increase Net income (controlling interest) in the computation of Earnings per share (diluted). The issuance of shares and the related income acquired are excluded from the calculation if an assumed purchase of Redeemable non-controlling interests would be anti-dilutive to diluted earnings per share.
The Company had junior convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of Earnings per share (diluted). Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into the Company’s common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive
7

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share.
3.Investments in Marketable Securities
The following table summarizes the cost, gross unrealized gains, gross unrealized losses, and fair value of Investments in marketable securities:
 December 31,
2021
March 31,
2022
Cost$73.2 $81.7 
Unrealized gains8.1 5.6 
Unrealized losses(2.8)(6.2)
Fair value$78.5 $81.1 
As of December 31, 2021 and March 31, 2022, Investments in marketable securities include consolidated Affiliate sponsored investment products with fair values of $42.9 million and $41.5 million, respectively.
4.Other Investments
Other investments consist of investments in funds advised by the Company’s Affiliates that are carried at net asset value (“NAV”) as a practical expedient and other investments without readily determinable fair values. Any gain or loss related to these investments is recorded in Investment and other income on the Consolidated Statements of Income.
Investments Measured at NAV as a Practical Expedient
The Company’s Affiliates sponsor investment funds in which the Company and its consolidated Affiliates may make general partner and seed capital investments. These funds operate in partnership form and apply the specialized fair value accounting for investment companies. The Company accounts for its interests in these funds using the equity method of accounting and is required to retain the specialized accounting of the investment companies. Because the funds’ investments do not have readily determinable fair values, the Company uses the NAV of these investments as a practical expedient for their fair values. The following table summarizes the fair values of these investments and any related unfunded commitments:    
 December 31, 2021March 31, 2022
Category of InvestmentFair ValueUnfunded
Commitments
Fair ValueUnfunded
Commitments
Private equity funds(1)
$310.2 $156.3 $322.6 $152.8 
Investments in other strategies(2)
14.6  21.1  
Total(3)
$324.8 $156.3 $343.7 $152.8 
___________________________
(1)The Company accounts for the majority of its interests in private equity funds one quarter in arrears (adjusted for current period calls and distributions). These funds primarily invest in a broad range of third-party funds and direct investments. Distributions will be received as the underlying assets are liquidated over the life of the funds, which is generally up to 15 years.
(2)These are multi-disciplinary funds that invest across various asset classes and strategies, including equity, credit, and real estate. Investments are generally redeemable on a daily, monthly, or quarterly basis.
(3)Fair value attributable to the controlling interest was $224.4 million and $238.3 million as of December 31, 2021 and March 31, 2022, respectively.
Investments Without Readily Determinable Fair Values
The Company made an investment in a private corporation where it does not exercise significant influence. Because this investment does not have a readily determinable fair value, the Company has elected to measure this investment at its cost minus impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical
8

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

or similar investments in the private corporation. The following table summarizes the cost, cumulative unrealized gains, and carrying amount of investments without readily determinable fair values:
 December 31,
2021
March 31,
2022
Cost$8.5 $8.5 
Cumulative unrealized gains41.9 41.9 
Carrying amount$50.4 $50.4 
During the three months ended March 31, 2022, the Company recorded no gains or losses on the underlying investment.
The following table presents the changes in Other investments:
For the Three Months Ended March 31,
20212022
Measured at NAV as a Practical ExpedientWithout Readily Determinable Fair ValuesTotalMeasured at NAV as a Practical ExpedientWithout Readily Determinable Fair ValuesTotal
Balance, beginning of period$243.4 $13.8 $257.2 $324.8 $50.4 $375.2 
Net realized and unrealized gains(1)
29.8  29.8 15.3  15.3 
Purchases and commitments18.1  18.1 15.1  15.1 
Sales and distributions(12.4) (12.4)(11.5) (11.5)
Balance, end of period$278.9 $13.8 $292.7 $343.7 $50.4 $394.1 
__________________________
(1)Recognized in Investment and other income.
5.Fair Value Measurements
The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:
  Fair Value Measurements
 December 31,
2021
 Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial Assets    
Investments in marketable securities$78.5 $64.5 $14.0 $ 
Derivative financial instruments(1)
0.9  0.9  
Financial Liabilities(2)
    
Contingent payment obligations$40.3 $ $ $40.3 
Affiliate equity purchase obligations12.6   12.6 
Derivative financial instruments0.8  0.8  
9

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

  Fair Value Measurements
 March 31,
2022
 Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial Assets    
Investments in marketable securities$81.1 $68.2 $12.9 $ 
Derivative financial instruments(1)
1.0  1.0  
Financial Liabilities(2)
    
Contingent payment obligations$31.4 $ $ $31.4 
Affiliate equity purchase obligations47.6   47.6 
Derivative financial instruments0.9  0.9  
__________________________
(1)Amounts are presented within Other assets on the Consolidated Balance Sheets.
(2)Amounts are presented within Other liabilities on the Consolidated Balance Sheets.
Level 3 Financial Liabilities
The following table presents the changes in level 3 liabilities:
 For the Three Months Ended March 31,
20212022
Contingent Payment ObligationsAffiliate
Equity Purchase
Obligations
Contingent Payment ObligationsAffiliate
Equity Purchase
Obligations
Balance, beginning of period$ $22.0 $40.3 $12.6 
Net realized and unrealized (gains) losses(1)
 0.9 (8.9)(0.3)
Purchases and issuances(2)
 70.7  40.6 
Settlements and reductions (27.5) (5.3)
Balance, end of period$ $66.1 $31.4 $47.6 
Net change in unrealized gains relating to instruments still held at the reporting date$ $ $(8.9)$(0.3)
___________________________
(1)Gains and losses resulting from changes to expected payments are included in Other expenses (net) and the accretion of these obligations is included in Interest expense in the Consolidated Statements of Income.
(2)Affiliate equity purchase obligation activity includes transfers from Redeemable non-controlling interests.
The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 fair value measurements:
 Quantitative Information About Level 3 Fair Value Measurements
December 31, 2021March 31, 2022
 Valuation
Techniques
Unobservable
Input
Fair ValueRange
Weighted Average(1)
Fair Value Range
Weighted Average(1)
Contingent payment obligationsMonte Carlo SimulationVolatility $40.3 
13% - 25%
13 %$31.4 
18% - 25%
18 %
Discount rates
1% - 2%
2 %
3% - 3%
3 %
Affiliate equity purchase obligationsDiscounted cash flow
Growth rates(2)
$12.6 
(13)% - 7%
2 %$47.6 
(13)% - 7%
4 %
 Discount rates 
15% - 18%
15 % 
15% - 18%
15 %
10

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

___________________________
(1)Calculated by comparing the relative fair value of an obligation to its respective total.
(2)Represents growth rates of asset- and performance-based fees.
Contingent payment obligations represent the present value of the expected future settlement amounts related to the Company’s investments in its consolidated Affiliates.
Affiliate equity purchase obligations include agreements to purchase Affiliate equity. As of March 31, 2022, there were no changes to growth or discount rates that had a significant impact to Affiliate equity purchase obligations recorded in prior periods.
Other Financial Assets and Liabilities Not Carried at Fair Value
The Company has other financial assets and liabilities that are not required to be carried at fair value, but are required to be disclosed at fair value. The carrying amount of Cash and cash equivalents, Receivables, and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments. The carrying value of notes receivable, which is reported in Other assets, approximates fair value because interest rates and other terms are at market rates. The carrying value of the credit facilities approximates fair value because the credit facilities have variable interest based on selected short-term rates.
The following table summarizes the Company’s other financial liabilities not carried at fair value:
 December 31, 2021March 31, 2022
Carrying ValueFair ValueCarrying ValueFair ValueFair Value Hierarchy
Senior notes$1,098.0 $1,165.6 $1,098.1 $1,102.5 Level 2
Junior subordinated notes765.8 809.1 765.8 697.0 Level 2
Junior convertible securities299.5 461.4 386.3 407.3 Level 2
6.Investments in Affiliates and Affiliate Sponsored Investment Products
In evaluating whether an investment must be consolidated, the Company evaluates the risk, rewards, and significant terms of each of its Affiliates and other investments to determine if an investment is considered a voting rights entity (“VRE”) or a variable interest entity (“VIE”). An entity is a VRE when the total equity investment at risk is sufficient to enable the entity to finance its activities independently, and when the equity holders have the obligation to absorb losses, the right to receive residual returns, and the right to direct the activities of the entity that most significantly impact its economic performance. An entity is a VIE when it lacks one or more of the characteristics of a VRE, which, for the Company, are Affiliate investments structured as partnerships (or similar entities) where the Company is a limited partner and lacks substantive kick-out or substantive participation rights over the general partner. Assessing whether an entity is a VRE or VIE involves judgment. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a VRE or a VIE.
The Company consolidates VREs when it has control over significant operating, financial, and investing decisions of the entity. When the Company lacks such control, but is deemed to have significant influence, the Company accounts for the VRE under the equity method. Investments with readily determinable fair values in which the Company does not have rights to exercise significant influence are recorded at fair value on the Consolidated Balance Sheets, with changes in fair value included in Investment and other income.
The Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Substantially all of the Company’s consolidated Affiliates considered VIEs are controlled because the Company holds a majority of the voting interests or it is the managing member or general partner. Furthermore, an Affiliate’s assets can be used for purposes other than the settlement of the respective Affiliate’s obligations. The Company applies the equity method of accounting to VIEs where the Company is not the primary beneficiary, but has the ability to exercise significant influence over operating and financial matters of the VIE.
Investments in Affiliates
11

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Substantially all of the Company’s Affiliates are considered VIEs and are either consolidated or accounted for under the equity method. A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under the equity method.
When an Affiliate is consolidated, the portion of the earnings attributable to Affiliate management’s and any co-investor’s equity ownership is included in Net income (non-controlling interests) in the Consolidated Statements of Income. Undistributed earnings attributable to Affiliate management’s and any co-investor’s equity ownership, along with their share of any tangible or intangible net assets, are presented within Non-controlling interests on the Consolidated Balance Sheets. Affiliate equity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests or Other liabilities on the Consolidated Balance Sheets. The Company periodically issues, sells, and purchases the equity of its consolidated Affiliates. Because these transactions take place between entities that are under common control, any gains or losses attributable to these transactions are required to be included in Additional paid-in capital in the Consolidated Balance Sheets, net of any related income tax effects in the period the transaction occurs.
When an Affiliate is accounted for under the equity method, the Company’s share of an Affiliate’s earnings or losses, net of amortization and impairments, is included in Equity method income (net) in the Consolidated Statements of Income and the carrying value of the Affiliate is reported in Equity method investments in Affiliates (net) in the Consolidated Balance Sheets. Deferred taxes recorded on intangible assets upon acquisition of an Affiliate accounted for under the equity method are presented on a gross basis within Equity method investments in Affiliates (net) and Deferred income tax liability (net) in the Consolidated Balance Sheets. The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded in Income tax expense in the Consolidated Statements of Income.
The Company periodically performs assessments to determine if the fair value of an investment may have declined below its related carrying value for its Affiliates accounted for under the equity method for a period that the Company considers to be other-than-temporary. Where the Company believes that such declines may have occurred, the Company determines the amount of impairment using valuation methods, such as discounted cash flow analyses. Impairments are recorded as an expense in Equity method income (net) to reduce the carrying value of the Affiliate to its fair value.
The unconsolidated assets, net of liabilities and non-controlling interests of Affiliates accounted for under the equity method considered VIEs, and the Company’s carrying value and maximum exposure to loss, were as follows:
 December 31, 2021March 31, 2022
Unconsolidated
VIE Net Assets
Carrying Value and
Maximum Exposure
to Loss
Unconsolidated
VIE Net Assets
Carrying Value and
Maximum Exposure
to Loss
Affiliates accounted for under the equity method$1,864.7 $2,023.0 $1,742.0 $2,089.9 
As of December 31, 2021 and March 31, 2022, the carrying value and maximum exposure to loss for all of the Company’s Affiliates accounted for under the equity method was $2,134.4 million and $2,195.2 million, respectively, including Affiliates accounted for under the equity method considered VREs of $111.4 million and $105.3 million, respectively.
Affiliate Sponsored Investment Products
The Company’s Affiliates sponsor various investment products where the Affiliate also acts as the investment adviser. These investment products are typically owned primarily by third-party investors; however, certain products are funded with general partner and seed capital investments from the Company and its Affiliates.
Third-party investors in Affiliate sponsored investment products are generally entitled to substantially all of the economics of these products, except for the asset- and performance-based fees earned by the Company’s Affiliates or any gains or losses attributable to the Company’s or its Affiliates’ investments in these products. As a result, the Company generally does not consolidate these products. However, for certain products, the Company’s consolidated Affiliates, as the investment manager, have the power to direct the activities of the investment product and have an exposure to the economics of the VIE that is more than insignificant, though generally only for a short period while the product is established and has yet to attract significant other investors. When the products are consolidated, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities in the Consolidated Balance Sheets, with corresponding changes in the investments’ fair values included in Investment and other income. Purchases and sales of securities are presented within purchases and sales by consolidated
12

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Affiliate sponsored investment products in the Consolidated Statements of Cash Flows, respectively, and the third-party investors’ interests are recorded in Redeemable non-controlling interests. When the Company or its consolidated Affiliates no longer control these products, due to a reduction in ownership or other reasons, the products are deconsolidated with only the Company’s or its consolidated Affiliate’s investment in the product reported from the date of deconsolidation.
The Company’s carrying value, and maximum exposure to loss from unconsolidated Affiliate sponsored investment products, is its or its consolidated Affiliates’ interests in the unconsolidated net assets of the respective products. The net assets of unconsolidated VIEs attributable to Affiliate sponsored investment products, and the Company’s carrying value and maximum exposure to loss, were as follows:
 December 31, 2021March 31, 2022
Unconsolidated
VIE Net Assets
Carrying Value and
Maximum Exposure
to Loss
Unconsolidated
VIE Net Assets
Carrying Value and
Maximum Exposure
to Loss
Affiliate sponsored investment products$4,958.5 $15.7 $5,334.4 $17.9 
7.Debt
The following table summarizes the Company’s Debt:
December 31,
2021
March 31,
2022
Senior bank debt$349.9 $349.9 
Senior notes1,093.5 1,094.0 
Junior subordinated notes751.4 751.4 
Junior convertible securities295.6 382.6 
Debt$2,490.4 $2,577.9 
The Company’s senior notes, junior subordinated notes, and junior convertible securities are carried at amortized cost. Unamortized discounts and debt issuance costs are presented within the Consolidated Balance Sheets as an adjustment to the carrying value of the associated debt. Effective January 1, 2022, the Company adjusted the carrying value of its junior convertible securities (see Note 2).
Senior Bank Debt
The Company has a $1.25 billion senior unsecured multicurrency revolving credit facility (the “revolver”) and a $350.0 million senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”). Both the revolver and the term loan mature on October 23, 2026. Subject to certain conditions, the Company may increase the commitments under the revolver by up to an additional $500.0 million and may borrow up to an additional $75.0 million under the term loan. The Company pays interest on any outstanding obligations under the credit facilities at specified rates, currently based either on an applicable LIBOR rate (subject to customary LIBOR succession provisions) or prime rate, plus a marginal rate determined based on its credit rating. As of March 31, 2022, the interest rate for the Company’s borrowings under the term loan was LIBOR plus 0.85%. As of December 31, 2021 and March 31, 2022, the Company had no outstanding borrowings under the revolver.
Senior Notes
As of March 31, 2022, the Company had senior notes outstanding. The carrying value of the senior notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.
The principal terms of the senior notes outstanding as of March 31, 2022 were as follows:
13

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2024
Senior Notes
2025
Senior Notes
2030
Senior Notes
Issue dateFebruary 2014February 2015June 2020
Maturity dateFebruary 2024August 2025June 2030
Par value (in millions)$400.0 $350.0 $350.0 
Stated coupon4.25 %3.50 %3.30 %
Coupon frequencySemi-annuallySemi-annuallySemi-annually
Potential call dateAny timeAny timeAny time
Call priceAs definedAs definedAs defined
The senior notes may be redeemed, in whole or in part, at any time, in the case of the 2024 and 2025 senior notes, and at any time prior to March 15, 2030, in the case of the 2030 senior notes. In each case, the senior notes may be redeemed at a make-whole redemption price, plus accrued and unpaid interest. The make-whole redemption price, in each case, is equal to the greater of 100% of the principal amount of the notes to be redeemed and the remaining principal and interest payments on the notes being redeemed (excluding accrued but unpaid interest to, but not including, the redemption date) discounted to their present value as of the redemption date at the applicable treasury rate plus 0.25%, in the case of the 2024 and the 2025 senior notes, and to their present value as of the redemption date on a semi-annual basis at the applicable treasury rate plus 0.40%, in the case of the 2030 senior notes.
Junior Subordinated Notes
As of March 31, 2022, the Company had junior subordinated notes outstanding. The carrying value of the junior subordinated notes is accreted to the principal amount at maturity over the remaining life of the underlying instrument.
The principal terms of the junior subordinated notes outstanding as of March 31, 2022 were as follows:
2059
Junior Subordinated Notes
2060
Junior Subordinated Notes
2061
Junior Subordinated Notes
Issue dateMarch 2019September 2020July 2021
Maturity dateMarch 2059September 2060September 2061
Par value (in millions)$300.0 $275.0 $200.0 
Stated coupon5.875 %4.75 %4.20 %
Coupon frequencyQuarterlyQuarterlyQuarterly
Potential call dateMarch 2024September 2025September 2026
Call priceAs definedAs definedAs defined
ListingNYSENYSENYSE
The junior subordinated notes may be redeemed at any time, in whole or in part, on or after March 30, 2024, in the case of the 2059 junior subordinated notes, on or after September 30, 2025, in the case of the 2060 junior subordinated notes, and on or after September 30, 2026, in the case of the 2061 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 the Company’s 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.
The Company may, at its option, and subject to certain conditions and restrictions, defer interest payments subject to the terms of the junior subordinated notes.
Junior Convertible Securities
Effective January 1, 2022, the Company adopted ASU 2020-06. See Note 2.
As of March 31, 2022, the Company had $386.3 million of principal outstanding in its 5.15% junior convertible trust preferred securities (the “junior convertible securities”), maturing in 2037. The junior convertible securities bear interest at a rate of 5.15% per annum, payable quarterly in cash.
14

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of December 31, 2021 and March 31, 2022, the unamortized issuance costs related to the junior convertible securities were $3.9 million and $3.7 million, respectively.
The follow table presents interest expense recognized in connection with the junior convertible securities:
For the Three Months Ended March 31,
20212022
Contractual interest expense$5.4 $5.0 
Amortization of debt issuance costs0.1 0.1 
Amortization of debt discount0.8  
Total$6.3 $5.1 
Effective interest rate6.01 %5.24 %
Holders of the junior convertible securities have no rights to put these securities to the Company. The holder may convert the securities to 0.2558 shares of common stock per $50.00 junior convertible security, equivalent to an adjusted conversion price of $195.47 per share. The conversion rate is subject to adjustments as described in the Amended and Restated Declaration of Trust of AMG Capital Trust II and the related indenture, both dated October 17, 2007 and filed as exhibits to the Company’s most recent Annual Report on Form 10-K. Upon conversion, holders will receive cash or shares of the Company’s common stock, or a combination thereof, at the Company’s election. The Company may redeem the junior convertible securities if the closing price of its common stock for 20 trading days in a period of 30 consecutive trading days exceeds 130% of the then prevailing conversion price, and may also repurchase junior convertible securities in the open market or in privately negotiated transactions from time to time at management’s discretion. During the three months ended March 31, 2021 and 2022, the Company paid $15.0 million and $16.5 million, respectively, to repurchase a portion of its junior convertible securities, and as a result of these repurchases, the Company reduced its Deferred income tax liability (net) by $3.3 million and $2.7 million, respectively.
8.Commitments and Contingencies
From time to time, the Company and its Affiliates may be subject to claims, legal proceedings, and other contingencies in the ordinary course of their business activities. Any such matters are subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company or its Affiliates. The Company and its Affiliates establish accruals, as necessary, for matters for which the outcome is probable and the amount of the liability can be reasonably estimated.
The Company has committed to co-invest in certain Affiliate sponsored investment products. As of March 31, 2022, these unfunded commitments were $152.8 million and may be called in future periods.
In connection with certain of its consolidated Affiliates, as of March 31, 2022, the Company was obligated to make deferred payments and was contingently liable to make payments as follows:
Earliest Payable
Controlling InterestCo-InvestorTotal2022202320242025
Deferred payment obligations$215.2 $49.8 $265.0 $200.0 $21.7 $43.3 $ 
Contingent payment obligations(1)
23.9 7.5 31.4   30.0 1.4 
__________________________
(1)Fair value as of March 31, 2022. The Company is contingently liable to make maximum contingent payments of up to $110.0 million ($24.9 million attributable to the co-investor), of which $100.0 million and $10.0 million may become payable in 2024 and 2025, respectively.
The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method. As of March 31, 2022, the Company was obligated to make payments of up to $83.3 million, all of which is payable in 2022. Liabilities for deferred and contingent payments are included in Other liabilities.
15

AFFILIATED MANAGERS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of March 31, 2022, the Company was contingently liable to make payments of $