# Affiliated Managers Group (AMG) — Financial Analysis

**Exchange:**   
**Coverage as of:** 2026-Q2  
**Updated:** 2026-06-10  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/AMG/thesis · /stocks/AMG/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: AMG
step: "04"
title: Financial Quality & Adversarial Research Sweep
created: 2026-06-09
---

### Step 04 — Financial Quality & Adversarial Research Sweep: AMG

#### 1. Financial Statement Quality Assessment

##### Income Statement Quality

| Item | Observation | Quality Signal |
|------|------------|----------------|
| Revenue recognition | Management fees: accrual basis on AUM × fee rate. Performance fees: recognized at period-end upon crystallization | Standard; low manipulation risk |
| Non-cash items | D&A minimal; SBC ~$59M corporate / ~$112M total | Disclosed, tracked |
| Non-controlling interests | ~$200–250M/year flows to Affiliate minority partners (consolidated) | Transparent; reduces economic income to AMG shareholders |
| Equity method income | Included in EBITDA but not revenue; ~$150–200M/year | Non-cash until dividended up; watch dividend policy |
| Gain on Affiliate disposals | FY2025: ~$200M+ from Peppertree, Comvest, Montrusco exits | One-time; excludes from normalized earnings |
| Operating leverage | Revenue ~flat FY2023–FY2025; EBITDA grew 11% (FY2024→FY2025) | Driven by cost discipline + mix |

GAAP Net Income has significant noise from disposal gains, mark-to-market items, and NCI. Economic EPS ($26.05 in FY2025) is the appropriate normalized earnings metric. [S1][S2]

##### Balance Sheet Quality

| Item | FY2025 | Observation |
|------|--------|------------|
| Cash | $586M | Declined from $950M FY2024 due to $514M convertible settlement (Jan 2026 post-period) |
| Goodwill + intangibles | ~$3–4B est. | Typical for asset manager acquisitions; impairment testing required annually |
| Total debt | ~$2.9B | Term loans + senior notes; no near-term maturity cliff |
| Equity | $3.238B | Declining due to buybacks (intentional) |
| Debt/EBITDA | ~2.7x | Within normal range for asset managers with stable FCF |
| Net debt / EBITDA | ~2.1x | Manageable; FCF covers debt service ~10x |

The balance sheet is clean with no off-balance sheet vehicles of concern. Goodwill is the largest asset line (~$3B+ estimated) and represents the accumulated premium paid for Affiliate stakes above book value. This is standard for this business model. [S1]

##### Cash Flow Quality

| Metric | FY2023 | FY2024 | FY2025 |
|--------|--------|--------|--------|
| OCF | $874M | $932M | $973M |
| CapEx | $12M | $3M | $6M |
| FCF | $862M | $929M | $967M |
| Net Income | $673M | $512M | $717M |
| FCF / Net Income | 128% | 182% | 135% |

FCF consistently exceeds net income, which is a positive quality signal — it confirms that accounting earnings are not outrunning cash generation. The FCF/NI ratio above 100% reflects the D&A on Affiliate intangibles adding back to cash. [S1]

The high FY2024 ratio (182%) reflects a low net income year (no major disposal gains) while OCF remained robust, confirming that operating cash generation is not dependent on one-time items.

#### 2. Statement Adjustment Notes

| Adjustment | Direction | Amount (FY2025) | Reason |
|-----------|-----------|----------------|--------|
| Remove disposal gains | Subtract | (~$200M from NI) | Non-recurring; one-time |
| Add equity method income not in revenue | Add | ~$150–200M to EBITDA | Operating; part of normalized earnings |
| NCI attribution | Subtract | (~$200–250M) | Cash flows to minority Affiliate partners |
| Corporate SBC | Subtract (optional) | ~$59M | Economic dilution |
| Performance fees normalization | Smooth | ~$100M/year avg | Remove peak/trough cyclicality |

After adjustments: **Normalized Economic EPS ≈ $26 (FY2025), $21–$22 (FY2024)** — consistent with AMG's disclosed non-GAAP figure. [S2][S3]

#### 3. Adversarial Research Sweep

**Methodology:** Searched SEC EDGAR (litigation disclosures in 10-K), web search for short reports, regulatory actions, class action lawsuits, and major controversies. No earnings transcripts used; inferred from filings and news sources.

##### A. Short Reports / Bearish Research
| Source | Date | Key Allegation | Status |
|--------|------|---------------|--------|
| No prominent short reports identified | — | — | Confirmed via web search |

AMG does not appear to be the subject of any major short-seller campaigns or activist investor reports calling out accounting irregularities. The stock has had periods of significant underperformance (2018–2019 drawdown, FY2022 decline on alts concerns) but these were driven by fundamentals (AUM outflows, valuation compression) not disclosure issues.

##### B. Litigation / Regulatory

| Issue | Detail | Financial Impact |
|-------|--------|----------------|
| Routine legal proceedings | Standard contract disputes, employment matters | Immaterial; disclosed in 10-K |
| No material SEC enforcement actions | None found | N/A |
| AQR SEC risk | AQR Capital (major Affiliate) has faced industry scrutiny over quant strategies | Indirect reputational risk only; no AMG liability |
| Affiliate-level conduct | AMG has had Affiliate-level compliance events (not AMG-originated) | Typically resolved at Affiliate level |

##### C. Governance / Compensation Concerns
| Issue | Detail | Verdict |
|-------|--------|---------|
| CEO pay alignment | $17.5M total comp (FY2025); 75% performance-based equity; 97% say-on-pay approval | Strong alignment; no concern |
| Ownership requirements | CEO: 10x base salary; other NEOs: 7x; directors: 5x | Robust ownership culture |
| COO departure | Wojcik terminated March 2026; sold $30M+ in stock before departure | Succession risk; monitor new COO hire |
| Board independence | 6 of 7 directors independent; fully independent audit/comp committees | Strong governance |

##### D. AUM Concentration / Affiliate Risk
This is the primary adversarial concern flagged in the 10-K risk factors:
- AMG does not disclose Affiliate concentration metrics
- If AQR (one of the largest Affiliates) continues to see redemptions in its largest strategies, AMG's economics could be materially impacted
- Several Affiliate disposals in FY2025 (Peppertree/TPG, Comvest, Montrusco) suggest AMG is actively managing its portfolio, selling underperforming relationships
- Net: material but disclosed and managed risk; not a hidden one

##### E. Performance vs. Disclosures

| Metric | Management Claim | Verification | Match? |
|--------|----------------|-------------|--------|
| AUM = $813.3B FY2025 | 10-K p.1 | XBRL + SEC filing | ✓ |
| Economic EPS = $26.05 | IR release | Consistent with ~$700M normalized earnings ÷ ~27M shares | ✓ Reasonable |
| Adj. EBITDA = $1,077M | IR release | Consistent with OCF ~$973M + some add-backs | ✓ Plausible |
| Share buybacks ~$700M | Cash flow statement | Financing CF ~($1.149B) incl. buybacks + debt service | ✓ |

**No material discrepancies identified.** The main adjustments required (as above) are appropriate non-GAAP management of a structurally complex holding company.

##### F. Historical Red Flags Review

| Period | Issue | Resolution |
|--------|-------|------------|
| 2018–2019 | Major stock decline (~50%) on fears of active mgmt secular decline | Driven by fundamentals, not fraud |
| FY2022 | EPS $25.35 inflated by ~$600M in non-operating gains from Affiliate transactions | Disclosed; normalized earnings lower |
| 2020 | Dividend cut from $1.28/share annual to $0.04/share | Cash preservation during COVID; not concealed |

**Sweep Verdict:** No material accounting irregularities, fraud risks, undisclosed litigation, or regulatory penalties identified. Primary investment risk is secular (long-only outflows, Affiliate concentration), not forensic. **CLEAN** [S1][S4][S5]

#### 4. Source Index

| ID | Source | Accessed |
|----|--------|---------|
| S1 | SEC 10-K FY2025 — Financial statements, risk factors, litigation | 2026-06-09 |
| S2 | AMG IR / Economic EPS disclosure | 2026-06-09 |
| S3 | StockAnalysis financial data | 2026-06-09 |
| S4 | Web search — short reports, regulatory actions | 2026-06-09 |
| S5 | Proxy — governance, compensation | 2026-06-09 |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/AMG/fundamental

## Navigation

- Overview: /stocks/AMG
- Financials (this page): /stocks/AMG/financials
- Thesis: /stocks/AMG/thesis
- Investment Memo: /stocks/AMG/memo
- Coverage universe: /stocks