Equity Method Investments in Affiliates

6 Months Ended

Jun. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

The following table presents the change in Equity method investments in Affiliates:



	Total
Balance, as of December 31, 2016	$	3,368.3
Equity method earnings	206.7
Equity method intangible amortization	(45.8		)
Distributions of earnings from equity method investments	(283.5		)
Investments	29.8
Foreign currency translation	3.6
Other	(0.4		)
Balance, as of June 30, 2017	$	3,278.7

In the six months ended June 30, 2017, there were no new material investments. In the six months ended June 30, 2016, the Company completed investments in Systematica Investments L.P. and Baring Private Equity Asia, both of which closed on January 4, 2016. The purchase price allocations were completed using financial models that included assumptions of expected market performance, net client cash flows and discount rates. The majority of the consideration paid is deductible for U.S. tax purposes over a 15-year life.

The aggregate purchase price allocation for the investments was as follows:



	Total
Consideration paid	$	551.0

Definite-lived acquired client relationships	$	223.1
Indefinite-lived acquired client relationships	7.3
Deferred tax liability	(32.0		)
Goodwill	352.6
	$	551.0

For these new investments, the Company recorded amortization expense on the definite-lived acquired client relationships of $4.5 million and $7.4 million in the three and six months ended June 30, 2016, respectively, and $3.7 million and $7.4 million in the three and six months ended June 30, 2017, respectively.

As of June 30, 2017, the definite-lived relationships at all of the Company’s equity method Affiliates were being amortized over a weighted average life of approximately 13 years. The Company recognized amortization expense for these relationships of $14.8 million and $29.0 million for the three and six months ended June 30, 2016, respectively, and $24.0 million and $45.8 million for the three and six months ended June 30, 2017, respectively. Based on relationships existing as of June 30, 2017, the Company estimates the annual amortization expense attributable to its current equity-method Affiliates to be approximately $85 million for each of the next five years.

The financial results of certain equity method Affiliates are recognized in the Consolidated Financial Statements one quarter in arrears.

The Company has determined that one if its equity method Affiliates is significant under Rule 10-01(b)(1) of Regulation S-X. For the three and six months ended June 30, 2016, this equity method Affiliate recognized revenue of $222.4 million and $428.5 million, respectively, and net income of $122.9 million and $234.6 million, respectively. For the three and six months ended June 30, 2017, this equity method Affiliate recognized revenue of $259.2 million and $524.8 million, respectively, and net income of $144.4 million and $293.0 million, respectively.