Accounting Standards and Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

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 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.  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, 2023 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.

All amounts in these notes, except per share data in the text and tables herein, are stated in millions unless otherwise

indicated.

Use of Estimates

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.

Recently Adopted Accounting Standards and Recent Accounting Developments

Recently Adopted Accounting Standards

Effective January 1, 2024, the Company adopted Accounting Standard Update (“ASU”) 2022-03, Fair Value Measurement

(Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.  The adoption of this

standard did not have a material impact on the Company’s Consolidated Financial Statements.

Recent Accounting Developments

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic

280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an

annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.  The

standard is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December

15, 2024.  The Company currently does not expect the adoption to have a material impact on its Consolidated Financial

Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures,

which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes

paid.  The standard is effective for annual periods beginning after December 15, 2024.  The Company currently does not expect

the adoption to have a material impact on its Consolidated Financial Statements.

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of

Profits Interest and Similar Awards, which clarifies how an entity should apply the scope guidance to determine whether profits

interest and similar awards should be accounted for in accordance with Topic 718.  The standard is effective for interim and

annual periods beginning after December 15, 2024 for the Company, and is effective for interim and annual periods beginning

after December 15, 2025 for the Company’s Affiliates.  The Company currently does not expect the adoption to have a material

impact on its Consolidated Financial Statements.

Investments in Affiliates and Affiliate Sponsored Investments Products

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

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 included in 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 recorded in Equity method investments in Affiliates (net) in the Consolidated Balance Sheets.

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.  The Company performs these assessments if certain triggering events occur or annually during the

fourth quarter.  The Company first considers whether certain qualitative factors indicate an increased likelihood of a decline in

the fair value of an Affiliate during the reporting period.  If such a decline is identified, and it is likely that an investment’s fair

value may have declined below its carrying value, the Company performs a quantitative assessment to determine if an

impairment exists.  Impairments are recorded as an expense in Equity method income (net) to reduce the carrying value of the

Affiliate to fair value.

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

third-party 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, with corresponding changes in the investments’ fair values included in Investment and other income. 

Purchases and sales of securities are included in purchases and sales by consolidated 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.