Equity Method Investments in Affiliates

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



	Total
Balance, December 31, 2014	$	1,783.5
Equity method earnings	323.2
Equity method intangible amortization	(34.3		)
Distributions from equity method investments	(346.1		)
Consideration for new investments	223.4
Foreign currency translation	(4.7		)
Other⁽¹⁾	(7.9		)
Balance, December 31, 2015	$	1,937.1
Equity method earnings	388.0
Equity method intangible amortization	(59.2		)
Distributions from equity method investments	(346.4		)
Consideration for new investments	1,361.3
Foreign currency translation	8.0
Other⁽¹⁾	79.5
Balance, December 31, 2016	$	3,368.3

__________________________


⁽¹⁾	Includes incremental basis related to deferred income taxes of $4.3 million and $93.3 million in 2015 and 2016, respectively.

In 2015, the Company completed minority investments in Abax Investments (Pty) Ltd and Ivory Investment Management, L.P. On January 4, 2016, the Company completed minority investments in Systematica Investments L.P. and Baring Private Equity Asia. The Company completed minority investments in Capula Investment Management LLP and CapeView Capital LLP on July 1, 2016, Partner Fund Management, L.P. on September 30, 2016 and Winton Group Ltd. on October 4, 2016. The purchase price allocations were measured using financial models that include assumptions of expected market performance, net client flows and discount rates. The majority of the consideration paid (less net tangible assets acquired) will be deductible for U.S. tax purposes over a 15-year life.

In 2015, the Company paid $23.3 million to settle a contingent payment related to an equity method Affiliate investment. The payment increased the Company’s carrying value of the Affiliate investment.

A portion of the purchase price attributable to the Company’s equity method Affiliates relates to definite-lived acquired client relationships. As of December 31, 2016, the definite-lived acquired relationships were being amortized over a weighted average life of approximately fourteen years. The Company recorded amortization expense in Income from equity method investments for these relationships of $34.3 million for the year ended December 31, 2015, as compared to $59.2 million for the year ended December 31, 2016. Based on relationships existing as of December 31, 2016, the Company estimates the annual amortization expense attributable to its current equity-method Affiliates to be approximately $80 million for each of the next five years.

As of December 31, 2016, the fair value of one of the Company’s Affiliates, which is a firm with a fundamental value-based investment approach, had recently experienced a decline, and further declines in the fair value of the Affiliate could result in a future impairment.

The following table presents summarized financial information for Affiliates accounted for under the equity method:



	For the Years Ended December 31,
	2014⁽¹⁾⁽²⁾		2015⁽¹⁾⁽²⁾		2016⁽²⁾
Revenue	$	1,869.3	$	2,217.1	$	2,200.9
Net income	253.8		431.5		1,068.9



	December 31,
	2015⁽³⁾		2016
Assets	$	30,663.4	$	1,915.3
Liabilities and Non-controlling interest	29,434.7		862.4

__________________________


⁽¹⁾	Revenue includes advisory fees for asset management services and net investment income from consolidated investment partnerships.


⁽²⁾	Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment.


⁽³⁾	Assets consist primarily of investment securities in consolidated investment partnerships, which are generally held by non-controlling interests.

The Company’s share of undistributed earnings from equity method investments was $134.3 million as of December 31, 2016.