AFFILIATED MANAGERS GROUP, INC. - Quarter Report: 2011 March (Form 10-Q)

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q


(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
OR
o		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

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)

600 Hale Street, Prides Crossing, Massachusetts 01965
(Address of principal executive offices)

(617) 747-3300
(Registrant's telephone number, including area code)

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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o(Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

There were 52,053,190 shares of the registrant's common stock outstanding on May 5, 2011.

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,

		2010			2011
Revenue		$	251.0		$	426.3
Operating expenses:
	Compensation and related expenses		119.2			179.5
	Selling, general and administrative		45.3			87.5
	Amortization of intangible assets		8.9			22.1
	Depreciation and other amortization		3.0			3.8
	Other operating expenses		6.1			8.5

			182.5			301.4

Operating income			68.5			124.9

Non-operating (income) and expenses:
	Investment and other income		(2.8	)		(8.7	)
	Income from equity method investments		(9.1	)		(10.2	)
	Investment income from investments in partnerships		(4.1	)		—
	Interest expense		16.0			19.4
	Imputed interest expense		3.8			8.3

			3.8			8.8

Income before income taxes			64.7			116.1
Income taxes			11.9			26.7

Net income			52.8			89.4
Net income (non-controlling interests)			(31.3	)		(50.3	)
Net income (non-controlling interests in partnerships)			(4.0	)		—

Net Income (controlling interest)		$	17.5		$	39.1

Average shares outstanding—basic			42.4			51.8
Average shares outstanding—diluted			45.4			53.1
Earnings per share—basic		$	0.41		$	0.76
Earnings per share—diluted		$	0.38		$	0.74
Supplemental disclosure of total comprehensive income:
Net income		$	52.8		$	89.4
Other comprehensive income			25.4			11.4

Comprehensive income			78.2			100.8
Comprehensive income (non-controlling interests)			(35.3	)		(50.3	)

Comprehensive income (controlling interest)		$	42.9		$	50.5

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

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in millions)

(unaudited)

			December 31, 2010			March 31, 2011

Assets
Current assets:
	Cash and cash equivalents		$	313.3		$	252.8
	Investment advisory fees receivable			236.4			231.2
	Investments in marketable securities			116.0			110.3
	Unsettled fund share receivables			42.0			103.8
	Prepaid expenses and other current assets			61.7			83.5

		Total current assets		769.4			781.6
Fixed assets, net				67.7			66.0
Equity investments in Affiliates				678.9			622.7
Acquired client relationships, net				1,424.2			1,409.6
Goodwill				2,131.2			2,142.6
Other assets				219.8			236.8

		Total assets	$	5,291.2		$	5,259.3

Liabilities and Equity
Current liabilities:
	Accounts payable and accrued liabilities		$	252.8		$	207.3
	Unsettled fund share payables			39.8			95.3
	Payables to related party			114.8			80.5

		Total current liabilities		407.4			383.1
Senior debt				460.0			340.0
Senior convertible securities				422.1			425.5
Junior convertible trust preferred securities				509.9			510.5
Deferred income taxes				495.4			502.9
Other long-term liabilities				207.8			215.0

		Total liabilities		2,502.6			2,377.0
Redeemable non-controlling interests				406.3			531.2
Equity:
	Common stock			0.5			0.5
	Additional paid-in capital			980.5			854.6
	Accumulated other comprehensive income			100.5			111.9
	Retained earnings			1,011.8			1,050.9

				2,093.3			2,017.9
	Less: treasury stock, at cost			(293.3	)		(256.7	)

		Total equity		1,800.0			1,761.2
	Non-controlling interests			582.3			589.9

	Total equity			2,382.3			2,351.1

	Total liabilities and equity		$	5,291.2		$	5,259.3

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

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in millions)

(unaudited)

	Total Stockholders' Equity

	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Shares at Cost			Non- controlling interests			Total Equity
December 31, 2010	$	0.5	$	980.5		$	100.5	$	1,011.8	$	(293.3	)	$	582.3		$	2,382.3
Stock issued under option and other incentive plans		—		(21.5	)		—		—		36.6			—			15.1
Tax benefit of option exercises		—		5.7			—		—		—			—			5.7
Changes in Affiliate equity		—		(117.6	)		—		—		—			26.8			(90.8	)
Share-based payment arrangements		—		7.5			—		—		—			—			7.5
Distributions to non-controlling interests		—		—			—		—		—			(69.5	)		(69.5	)
Net Income		—		—			—		39.1		—			50.3			89.4
Other comprehensive income		—		—			11.4		—		—			—			11.4

March 31, 2011	$	0.5	$	854.6		$	111.9	$	1,050.9	$	(256.7	)	$	589.9		$	2,351.1

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

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

			For the Three Months Ended March 31,

			2010			2011
Cash flow from operating activities:
	Net income		$	52.8		$	89.4
Adjustments to reconcile Net income to net cash flow from operating activities:
	Amortization of intangible assets			8.9			22.1
	Amortization of issuance costs			1.8			2.6
	Depreciation and other amortization			3.0			3.8
	Deferred income tax provision			8.6			9.6
	Imputed interest expense			3.8			8.3
	Income from equity method investments, net of amortization			(9.1	)		(10.2	)
	Distributions received from equity method investments			23.2			64.9
	Tax benefit from exercise of stock options			0.3			0.8
	Stock option expense			3.6			6.1
	Affiliate equity expense			3.4			3.5
	Other adjustments			(4.0	)		(5.6	)
Changes in assets and liabilities:
	(Increase) decrease in investment advisory fees receivable			(0.9	)		3.0
	(Increase) decrease in prepaids and other current assets			11.0			(2.5	)
	Increase in unsettled fund shares receivable			(98.7	)		(60.7	)
	Increase in other assets			(11.1	)		(2.9	)
	Decrease in accounts payable, accrued liabilities and other long-term liabilities			(37.0	)		(56.5	)
	Increase in unsettled fund shares payable			108.4			54.5

		Cash flow from operating activities		68.0			130.2

Cash flow used in investing activities:
	Investments in Affiliates			(127.7	)		(13.3	)
	Purchase of fixed assets			(1.1	)		(1.7	)
	Purchase of investment securities			(14.9	)		(9.1	)
	Sale of investment securities			11.8			12.0

		Cash flow used in investing activities		(131.9	)		(12.1	)

Cash flow from (used in) financing activities:
	Borrowings of senior bank debt			235.0			—
	Repayments of senior bank debt			(65.0	)		(120.0	)
	Issuance of common stock			2.5			15.2
	Issuance costs			(0.1	)		(7.7	)
	Excess tax benefit from exercise of stock options			0.4			4.9
	Settlement of treasury lock			—			4.0
	Note payments			(25.4	)		0.1
	Distributions to non-controlling interests			(37.2	)		(69.5	)
	Affiliate equity issuances and repurchases			(102.6	)		(7.8	)

		Cash flow from (used in) financing activities		7.6			(180.8	)

Effect of foreign exchange rate changes on cash and cash equivalents				0.6			2.2
Net decrease in cash and cash equivalents				(55.7	)		(60.5	)
Cash and cash equivalents at beginning of period				259.5			313.3

Cash and cash equivalents at end of period			$	203.8		$	252.8

Supplemental disclosure of non-cash activities:
	Notes received for Affiliate equity sales		$	5.7		$	9.5
	Payables recorded for Affiliate equity purchases			15.3			7.0
	Payables recorded under contingent payment arrangements			49.0			—

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

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The consolidated financial statements of Affiliated Managers Group, Inc. ("AMG" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair statement of the results have been included. 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, 2010 includes additional information about AMG, its operations, financial position and accounting policies, and should be read in conjunction with this Quarterly Report on Form 10-Q.

All dollar and share amounts in these notes (except information that is presented on a per share, per security, per note or per contract basis) are stated in millions, unless otherwise indicated.

There are no recently issued accounting standards that are expected to have a material effect on the Company's Consolidated Financial Statements.

2. Senior Bank Debt

The Company entered into an amended and restated revolving credit facility (the "credit facility") in January 2011, which allows for borrowings of up to $750.0 million at specified rates of interest that vary depending on the Company's credit ratings. Subject to the agreement of the lenders to provide incremental commitments and subject to certain requirements in the credit facility, the Company has the option to increase the credit facility by up to an additional $150.0 million.

The credit facility, which will mature in January 2015, is unsecured and contains financial covenants with respect to leverage and interest coverage and also contains customary affirmative and negative covenants, including limitations on indebtedness, liens, cash dividends, asset dispositions and fundamental corporate changes. Obligations under the credit facility are guaranteed by certain of the Company's wholly-owned domestic subsidiaries in accordance with the terms of the credit facility. At March 31, 2011, the Company had $340.0 million of outstanding borrowings.

As further described in Note 15, the Company has entered into interest rate swap contracts to exchange a fixed rate for the variable rate on a portion of its credit facility.

3. Convertible Securities

At March 31, 2011, the Company has one senior convertible security outstanding ("2008 senior convertible notes") and two junior convertible trust preferred securities outstanding, issued in 2006 (the

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

"2006 junior convertible trust preferred securities") and in 2007 (the "2007 junior convertible trust preferred securities"). The carrying values of the Company's convertible securities are as follows:

		December 31, 2010				March 31, 2011

		Carrying Value		Principal amount at maturity		Carrying Value		Principal amount at maturity
Senior convertible securities:
	2008 senior convertible notes⁽¹⁾	$	422.1	$	460.0	$	425.5	$	460.0

Junior convertible trust preferred securities:
	2007 junior convertible trust preferred securities⁽¹⁾	$	296.3	$	430.8	$	296.6	$	430.8
	2006 junior convertible trust preferred securities⁽¹⁾		213.6		300.0		213.9		300.0

	Total junior convertible securities	$	509.9	$	730.8	$	510.5	$	730.8

(1): Carrying value is accreted to the principal amount at maturity over an expected life of five years for the 2008 senior convertible notes and 30 years for each of the junior convertible trust preferred securities.

The principal terms of these securities are summarized below.

	2008 Senior Convertible Notes⁽¹⁾			2007 Junior Convertible Trust Preferred Securities⁽²⁾			2006 Junior Convertible Trust Preferred Securities⁽³⁾

Issue Date		August 2008			October 2007			April 2006
Maturity Date		August 2038			October 2037			April 2036
Next Potential Put Date		August 2013			N/A			N/A
Note Denomination	$	1,000		$	50		$	50
Current Conversion Rate		7.959			0.250			0.333
Current Conversion Price	$	125.65		$	200.00		$	150.00
Stated Coupon		3.95	%		5.15	%		5.10	%
Coupon Frequency		Semi-annually			Quarterly			Quarterly
Tax Deduction Rate⁽⁴⁾		9.38	%		8.00	%		7.50	%

(1): The Company may redeem the notes for cash (subject to the holders right to convert) at any time on or after August 15, 2013.
(2): The Company may redeem the 2007 junior convertible trust preferred securities on or after October 15, 2012 if the closing price of the Company's common stock exceeds $260 per share for a specified period of time.
(3): The Company may redeem the 2006 junior convertible trust preferred securities on or after April 15, 2011 if the closing price of the Company's common stock exceeds $195 per share for a specified period of time.
(4): These convertible securities are considered contingent payment debt instruments under federal income tax regulations, which require the Company to deduct interest in an amount greater than its reported interest expense. These deductions result in annual deferred tax liabilities of approximately $22.5 million. These deferred tax liabilities will be

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

reclassified directly to stockholders' equity if the Company's common stock is trading above certain thresholds at the time of the conversion of the securities.

4. Forward Equity Sale Agreements

During 2009, the Company entered into a forward equity sale agreement with a major securities firm to sell shares of its common stock, and extended this agreement in April 2011. As of March 31, 2011, no forward equity sales are outstanding. The Company may sell up to an additional $103.5 million under this agreement.

5. Income Taxes

The consolidated income tax provision includes taxes attributable to controlling interests and, to a lesser extent, taxes attributable to non-controlling interests as follows:

			For the Three Months Ended March 31,

			2010			2011
Controlling Interests:
	Current Tax		$	2.5		$	13.5
	Intangible related deferred taxes			10.7			12.9
	Other Deferred Taxes			(2.1	)		(2.8	)

		Total Controlling Interests	$	11.1		$	23.6

Non-Controlling Interests:
	Current Tax		$	0.8		$	3.6
	Deferred Taxes			—			(0.5	)

		Total Non-Controlling Interests		0.8			3.1

Provision for income taxes			$	11.9		$	26.7

Income before income taxes (controlling interest)			$	28.6		$	62.7

Effective Tax rate attributable to controlling interests⁽¹⁾				38.8	%		37.6	%

(1): Taxes attributable to controlling interests divided by Income before income taxes (controlling interest).

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the consolidated provision for income taxes is as follows:

		For the Three Months Ended March 31,

		2010			2011
Current:
	Federal	$	(0.8	)	$	6.1
	State		1.2			3.1
	Foreign		2.9			7.9

Total Current			3.3			17.1

Deferred:
	Federal		7.9			11.3
	State		1.2			0.7
	Foreign		(0.5	)		(2.4	)

Total Deferred			8.6			9.6

Provision for Income Taxes		$	11.9		$	26.7

The components of deferred tax assets and liabilities are as follows:

		December 31, 2010			March 31, 2011

Deferred Tax Assets
	State net operating loss carryforwards	$	30.6		$	29.6
	Foreign tax credit carryforwards		17.3			19.1
	Deferred compensation		10.3			11.7
	Accrued expenses		8.5			10.3
	Capital loss carryforwards		1.5			1.5

Total deferred tax assets			68.2			72.2
Valuation allowance			(27.6	)		(26.7	)

Deferred tax assets, net of valuation allowance		$	40.6		$	45.5

Deferred Tax Liabilities
	Intangible asset amortization	$	(209.3	)	$	(218.9	)
	Convertible securities interest		(154.5	)		(158.5	)
	Non-deductible intangible amortization		(143.1	)		(143.5	)
	Deferred revenue		(26.3	)		(24.8	)
	Other		(2.8	)		(2.7	)

Total deferred tax liabilities			(536.0	)		(548.4	)

	Net deferred tax liability	$	(495.4	)	$	(502.9	)

Deferred tax liabilities are primarily the result of tax deductions for the Company's intangible assets and convertible securities. The Company amortizes most of its intangible assets for tax purposes only, reducing its tax basis below its carrying value for financial statement purposes and generating deferred taxes each reporting period. The Company's 2008 senior convertible notes and junior convertible trust preferred securities also generate deferred taxes because the Company's tax deductions are higher than the interest expense recorded for financial statement purposes.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At March 31, 2011, the Company has state net operating loss carryforwards that expire over a 15-year period beginning in 2011. The Company also has foreign tax credit carryforwards that expire over a 10-year period beginning in 2011. The valuation allowances at December 31, 2010 and March 31, 2011 were principally related to the Company's ability to generate sufficient taxable income prior to the expiration of these carryforwards.

At March 31, 2011, the Company's liability for uncertain tax positions was $24.6 million, including interest and related charges of $3.0 million. Over the next twelve months, as a result of state and foreign tax audits, unrecognized tax benefits on uncertain tax positions could increase by $1.0 to $3.0 million.

6. Earnings Per Share

The calculation of basic earnings per share is based on the weighted average number of shares of the Company's common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company's common stock. The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share available to common stockholders.

		For the Three Months Ended March 31,

		2010		2011
Numerator:
Net Income (controlling interest)		$	17.5	$	39.1
Interest expense on convertible securities, net of taxes			0.0		—

Net Income (controlling interest), as adjusted		$	17.5	$	39.1

Denominator:
Average shares outstanding—basic			42.4		51.8
Effect of dilutive instruments:
	Stock options		0.9		1.3
	Forward sale		1.3		—
	Senior convertible securities		0.8		—

Average shares outstanding—diluted			45.4		53.1

As more fully discussed in Note 3, the Company had convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of diluted earnings per share. 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 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.

The calculation of diluted earnings per share for the three months ended March 31, 2010 and 2011 excludes the potential exercise of options to purchase 1.3 million and 0.6 million shares of common stock, respectively, because the effect would be anti-dilutive.

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As discussed further in Note 18, the Company may settle portions of its Affiliate equity purchases in shares of its common stock. Because it is the Company's intent to settle these potential repurchases in cash, the calculation of diluted earnings per share excludes any potential dilutive effect from possible share settlements.

7. Commitments and Contingencies

The Company and its Affiliates are subject to claims, legal proceedings and other contingencies in the ordinary course of their business activities. Each of these matters is 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 for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will not have a material adverse effect on the consolidated financial statements of operations of the Company.

Certain Affiliates operate under regulatory authorities which require that they maintain minimum financial or capital requirements. Management is not aware of any material violations of such financial requirements.

In connection with its investment in Pantheon Ventures, the Company has committed to co-invest in certain investment partnerships where it serves as the general partner. As of March 31, 2011, these commitments totaled approximately $98.6 million and may be called in future periods. Russell Investments (Pantheon Ventures former owner) is contractually obligated to reimburse the Company for $69.6 million of these commitments when they are called.

Under past acquisition agreements, the Company is contingently liable, upon achievement of specified financial targets, to make payments of up to $496.5 million through 2015. In 2011, the Company expects to make payments of approximately $1.4 million to settle portions of these contingent obligations.

8. Investments in Partnerships

As of December 31, 2010 and March 31, 2011, the Affiliates' investments in partnerships that are not consolidated were $106.1 million and $121.9 million, respectively. These assets are reported within "Other assets" in the Consolidated Balance Sheets. The income or loss related to these investments is classified within "Investment and other income" in the Consolidated Statements of Income.

9. Investments in Marketable Securities

Investments in marketable securities are comprised of the Company's 2009 and 2010 investments in Value Partners Group Limited, a publicly-traded asset management firm based in Hong Kong, and investments held by Affiliates. These investments are carried at their fair value. Changes in fair value for securities classified as available-for-sale are reported in accumulated other comprehensive income. Changes in fair value for trading securities are reported within other operating expenses. The cost of investments in marketable securities, gross unrealized gains and losses were as follows:

	December 31, 2010		March 31, 2011

Cost of investments in marketable securities	$	68.9	$	63.0
Gross unrealized gains		47.1		47.3
Gross unrealized losses		—		—

AFFILIATED MANAGERS GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

					Fair Value Measurements

			December 31, 2010		Fair Value Measurements
			December 31, 2010		Level 1		Level 2		Level 3
Financial Assets
	Cash equivalents		$	36.0	$	36.0	$	—	$	—
	Partnership investments⁽¹⁾			124.5		16.9		21.8		85.8
	Investments in marketable securities⁽²⁾
		Trading securities		15.4		15.2		0.2		—
		Available for sale securities		100.6		99.2		1.4		—
	Interest rate derivatives			5.9		—		5.9		—
Financial Liabilities
	Contingent payment obligations⁽³⁾		$	84.0	$	—	$	—	$	84.0
	Obligations to related parties			79.6		—		—		79.6

			March 31, 2011		Level 1		Level 2		Level 3

Financial Assets
	Cash equivalents		$	14.6	$	14.6	$	—	$	—
	Partnership investments⁽¹⁾			152.8		27.9		31.3		93.6
	Investments in marketable securities⁽²⁾
		Trading securities		16.0		16.0		—		—
		Available for sale securities		94.3		94.3		—		—
	Interest rate derivatives			3.0		—		3.0		—
Financial Liabilities
	Contingent payment obligations⁽³⁾		$	89.4	$	—	$	—	$	89.4
	Obligations to related parties			67.9		—		—		67.9

	Level 3 Financial Assets and Financial Liabilities at Fair Value

Three Months Ended March 31, 2010	Balance, beginning of period		Net realized gains/losses			Net unrealized gains/losses relating to instruments still held at the reporting date			Purchases and issuances		Settlements and reductions			Net transfers in and/or out of Level 3			Balance, end of period
Partnership investments	$	4.0	$	—	⁽¹⁾	$	—	⁽¹⁾	$	—	$	—		$	(3.7	)	$	0.3
Contingent payment obligations		27.1		—	⁽²⁾		—	⁽²⁾		49.1		(27.1	)		—			49.1
Obligations to related parties		78.7		(0.2	)⁽³⁾		—	⁽³⁾		15.3		(78.5	)		—			15.3

	December 31, 2010				March 31, 2011

Category of Investment	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private equity fund-of-funds⁽¹⁾	$	85.7	$	89.2	$	93.6	$	98.6
Other funds⁽²⁾		55.2		—		64.0		—

	$	140.9	$	89.2	$	157.6	$	98.6

				Weighted Average Exercise Price

Unexercised options outstanding—January 1, 2011		5.1		$	62.34
	Options granted	—			—
	Options exercised	(0.3	)		48.03
	Options forfeited	—			—

Unexercised options outstanding—March 31, 2011		4.8			63.27	4.9

Exercisable at March 31, 2011		2.4			58.49	4.0

	Level 3 Financial Assets and Financial Liabilities at Fair Value

Three Months Ended March 31, 2011	Balance, beginning of period		Net realized gains/losses			Net unrealized gains/losses relating to instruments still held at the reporting date			Purchases and issuances		Settlements and reductions			Net transfers in and/or out of Level 3		Balance, end of period
Partnership investments	$	85.8	$	1.1	⁽¹⁾	$	5.6	⁽¹⁾	$	2.8	$	(1.7	)	$	—	$	93.6
Contingent payment obligations		84.0		—	⁽²⁾		5.4	⁽²⁾		—		—			—		89.4
Obligations to related parties		79.6		0.3	⁽³⁾		2.5	⁽³⁾		9.6		(24.1	)		—		67.9

	December 31, 2010				March 31, 2011

	Unconsolidated VIE Net Assets		Carrying Value and Maximum Exposure to Loss		Unconsolidated VIE Net Assets		Carrying Value and Maximum Exposure to Loss
Sponsored investment funds	$	3,350.7	$	0.9	$	3,524.6	$	0.8
Trust preferred vehicles		9.0		9.0		9.0		9.0

	Notional Amount				Receiving	Start Date	Expiration Date

Counterparty A	$	25.0	1.67	%	3-Month LIBOR	October 2010	October 2015
Counterparty A	$	25.0	1.65	%	3-Month LIBOR	October 2010	October 2015
Counterparty B	$	25.0	1.59	%	3-Month LIBOR	October 2010	October 2015
Counterparty B	$	25.0	2.14	%	3-Month LIBOR	October 2010	October 2017

	December 31, 2010		March 31, 2011

Cash Flow Hedges
Interest rate swaps⁽¹⁾	$	2.5	$	3.0
Treasury rate locks⁽¹⁾		3.4		—

Total	$	5.9	$	3.0

		For the Three Months Ended March 31, 2010

		Mutual Fund			Institutional			High Net Worth			Total
Revenue		$	97.9		$	121.8		$	31.3		$	251.0
Operating expenses:
	Depreciation and other amortization		2.2			7.4			2.3			11.9
	Other operating expenses		66.7			83.4			20.5			170.6

			68.9			90.8			22.8			182.5

Operating income			29.0			31.0			8.5			68.5

Non-operating (income) and expenses:
	Investment and other income		(0.8	)		(1.3	)		(0.7	)		(2.8	)
	Income from equity method investments		(0.3	)		(7.8	)		(1.0	)		(9.1	)
	Investment income from Affiliate investments in partnerships		(0.1	)		(0.2	)		(3.8	)		(4.1	)
	Interest expense		6.0			11.1			2.7			19.8

			4.8			1.8			(2.8	)		3.8

Income before income taxes			24.2			29.2			11.3			64.7
Income taxes			5.5			5.0			1.4			11.9

Net income			18.7			24.2			9.9			52.8
	Net income (non-controlling interests)		(11.0	)		(16.4	)		(3.9	)		(31.3	)
	Net income (non-controlling interests in partnerships)		(0.1	)		(0.1	)		(3.8	)		(4.0	)

Net Income (controlling interest)		$	7.6		$	7.7		$	2.2		$	17.5

	Mutual Fund		Institutional		High Net Worth		Total

Balance, as of December 31, 2010	$	785.9	$	1,083.7	$	261.6	$	2,131.2
Goodwill acquired		1.9		0.1		—		2.0
Foreign currency translation		2.4		4.5		2.5		9.4

Balance, as of March 31, 2011	$	790.2	$	1,088.3	$	264.1	$	2,142.6

		December 31, 2010				March 31, 2011

		Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization
Amortized intangible assets:
	Acquired client relationships	$	974.8	$	228.6	$	976.5	$	250.7
Non-amortized intangible assets:
	Acquired client relationships-mutual fund management contracts		678.0		—		683.8		—
	Goodwill		2,131.2		—		2,142.6		—


Balance as of January 1, 2011	$	406.3
Issuance of Redeemable non-controlling interest		48.5
Repurchase of Redeemable non-controlling interest		(7.0	)
Changes in redemption value		83.4

Balance as of March 31, 2011	$	531.2

	December 31, 2010		March 31, 2011

Foreign currency translation adjustments	$	67.9	$	82.1
Unrealized gain on derivative securities		3.7		4.4
Unrealized gain on investment securities		28.9		25.4

Accumulated other comprehensive income	$	100.5	$	111.9

	For the Three Months Ended March 31,

(in millions, except as noted and per share data)	2010		2011		% Change
Assets under Management (in billions)	$	232.1	$	339.8		46	%
Revenue		251.0		426.3		70	%
Net Income (controlling interest)		17.5		39.1		123	%
Earnings per share—diluted		0.38		0.74		95	%
Economic Net Income⁽¹⁾		50.8		85.1		68	%
Economic earnings per share⁽¹⁾		1.14		1.60		40	%
EBITDA⁽²⁾		68.2		118.2		73	%

Year Ending December 31,	Estimated Amortization Expense

2011	$	32.9
2012		32.8
2013		32.8
2014		11.3
2015		4.1

		December 31, 2010					March 31, 2011

(in billions)		Assets under Management		Percentage of Total			Assets under Management		Percentage of Total
Asset Class:
Equity⁽¹⁾		$	220.4		69	%	$	232.1		68	%
Alternative⁽²⁾			65.3		20	%		71.9		21	%
Fixed Income			34.3		11	%		35.8		11	%

	Total	$	320.0		100	%	$	339.8		100	%

Geography:⁽³⁾
Domestic		$	110.5		34	%	$	115.9		34	%
Global/International			169.1		53	%		180.7		53	%
Emerging Markets			40.4		13	%		43.2		13	%

	Total	$	320.0		100	%	$	339.8		100	%

		For the Three Months Ended March 31,

(in millions, except as noted)		2010		2011		% Change
Average assets under management (in billions)⁽¹⁾
Mutual Fund		$	47.2	$	87.1		85	%
Institutional			138.1		208.0		51	%
High Net Worth			30.3		35.8		18	%

	Total	$	215.6	$	330.9		53	%

Revenue
Mutual Fund		$	97.9	$	184.2		88	%
Institutional			121.8		207.0		70	%
High Net Worth			31.3		35.1		12	%

	Total	$	251.0	$	426.3		70	%

Net Income (controlling interest)
Mutual Fund		$	7.6	$	16.6		118	%
Institutional			7.7		18.4		139	%
High Net Worth			2.2		4.1		86	%

	Total	$	17.5	$	39.1		123	%

EBITDA⁽²⁾
Mutual Fund		$	20.9	$	38.5		84	%
Institutional			38.1		68.9		81	%
High Net Worth			9.2		10.8		17	%

	Total	$	68.2	$	118.2		73	%

Statement of Changes-Quarter to Date (in billions)			Mutual Fund			Institutional			High Net Worth			Total

December 31, 2010			$	85.2		$	200.1		$	34.7		$	320.0
	Client cash inflows			7.0			12.7			1.7			21.4
	Client cash outflows			(4.8	)		(8.4	)		(1.7	)		(14.9	)

		Net client cash flows		2.2			4.3			—			6.5

	Other⁽¹⁾			(0.2	)		—			—			(0.2	)
	Investment performance			3.4			8.3			1.8			13.5

March 31, 2011			$	90.6		$	212.7		$	36.5		$	339.8

	For the Three Months Ended March 31,

(in millions)	2010		2011		% Change
Compensation and related expenses	$	119.2	$	179.5		51	%
Selling, general and administrative		45.3		87.5		93	%
Amortization of intangible assets		8.9		22.1		148	%
Depreciation and other amortization		3.0		3.8		27	%
Other operating expenses		6.1		8.5		39	%

Total operating expenses	$	182.5	$	301.4		65	%

		For the Three Months Ended March 31,

(in millions, except shares and per share data)		2010			2011
Net Income (controlling interest)		$	17.5		$	39.1
	Intangible amortization⁽¹⁾⁽²⁾		16.7			27.1
	Intangible-related deferred taxes		10.7			12.9
	Imputed interest⁽³⁾		2.3			4.4
	Affiliate equity expense		1.7			1.6
	Affiliate depreciation		1.9			—

Economic Net Income		$	50.8		$	85.1

Average shares outstanding—diluted			45.4			53.1
	Assumed issuance of senior convertible securities shares		(0.8	)		—
	Assumed issuance of junior convertible securities shares		—			—
	Dilutive impact of senior convertible securities shares		0.2			—
	Dilutive impact of junior convertible securities shares		—			—

Average shares outstanding—adjusted diluted			44.8			53.1

Economic earnings per share		$	1.14		$	1.60

(in millions)	December 31, 2010		March 31, 2011

Balance Sheet Data
Cash and cash equivalents	$	313.3	$	252.8
Senior bank debt		460.0		340.0
2008 senior convertible notes		422.1		425.5
Junior convertible trust preferred securities		509.9		510.5

	For the Three Months Ended March 31,

	2010			2011
Cash Flow Data
Operating cash flow	$	68.0		$	130.2
Investing cash flow		(131.9	)		(12.1	)
Financing cash flow		7.6			(180.8	)
EBITDA⁽¹⁾		68.2			118.2

			Payments Due

			Remainder of 2011
(in millions)	Total				2012-2013		2014-2015		Thereafter
Contractual Obligations	Total				2012-2013		2014-2015		Thereafter
Senior bank debt	$	340.0	$	—	$	340.0	$	—	$	—
Senior convertible securities⁽¹⁾		959.6		9.1		36.3		36.3		877.9
Junior convertible trust preferred securities		1,690.2		27.8		74.1		74.1		1,514.2
Leases		123.8		18.4		42.5		32.0		30.9
Other liabilities⁽²⁾		122.0		80.5		—		—		41.5

Total Contractual Obligations	$	3,235.6	$	135.8	$	492.9	$	142.4	$	2,464.5

Contingent Obligations
Contingent payment obligations⁽³⁾	$	128.8	$	1.4	$	93.9	$	33.5	$	—


		AFFILIATED MANAGERS GROUP, INC.
May 10, 2011		/s/ JAY C. HORGEN Jay C. Horgen on behalf of the Registrant as Chief Financial Officer and Treasurer (and also as Principal Financial and Principal Accounting Officer)

Exhibit No.			Description

	10.1		Transition and Advisory Services Agreement by and between Affiliated Managers Group, Inc. and Darrell W. Crate dated as of February 1, 2011.
	31.1		Certification of Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Registrant's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Registrant's Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification of Registrant's Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101		The following financial statements from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 are furnished herewith, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income for the three month periods ended March 31, 2011 and 2010, (ii) the Consolidated Balance Sheets at March 31, 2011 and December 31, 2010, (iii) the Consolidated Statement of Equity for the three month period ended March 31, 2011, (iv) the Consolidated Statements of Cash Flows for the three month periods ended March 31, 2011 and 2010, and (v) the Notes to the Consolidated Financial Statements.