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Equity Method Investments in Affiliates | 3 Months Ended
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Mar. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments in Affiliates | Equity Method Investments in Affiliates On January 14, 2022, the Company completed an additional investment in Systematica Investments (“Systematica”), an innovative technology-driven systematic manager. The Company expects the majority of the consideration paid for Systematica to be deductible for U.S. tax purposes over a 15-year life. The Company’s purchase price allocation for the investment was measured using a discounted cash flow analysis that included assumptions of expected market performance, net client cash flows, and discount rates. The financial results of certain Affiliates accounted for under the equity method are recognized in the Consolidated Financial Statements one quarter in arrears. Equity method investments in Affiliates (net) consisted of the following:
|  | December 31, 2021 |  | March 31, 2022
Goodwill |  | $ | 1,264.4 |  |  | $ | 1,360.3 |
Definite-lived acquired client relationships (net) |  | 470.1 |  |  | 536.1 |
Indefinite-lived acquired client relationships (net) |  | 174.4 |  |  | 174.5 |
Undistributed earnings and tangible capital |  | 225.5 |  |  | 124.3 |
Equity method investments in Affiliates (net) |  | $ | 2,134.4 |  |  | $ | 2,195.2 |
The following table presents the change in Equity method investments in Affiliates (net):
|  | Equity Method Investments in Affiliates (Net)
Balance, as of December 31, 2021 |  | $ | 2,134.4 |
Investments in Affiliates |  | 182.8 |
Earnings |  | 71.9 |
Intangible amortization and impairments |  | (23.3) |
Distributions of earnings |  | (173.1) |
Foreign currency translation |  | 6.3 |
Other |  | (3.8) |
Balance, as of March 31, 2022 |  | $ | 2,195.2 |
Definite-lived acquired client relationships at the Company’s Affiliates accounted for under the equity method are amortized over their expected period of economic benefit. The Company recognized amortization expense for these relationships of $35.2 million and $23.3 million for the three months ended March 31, 2021 and 2022, respectively. Based on relationships existing as of March 31, 2022, the Company estimates the amortization expense attributable to its Affiliates will be approximately $70 million for the remainder of 2022, approximately $85 million in 2023, approximately $50 million in each of 2024 and 2025, approximately $45 million in 2026, and approximately $40 million in 2027. As of March 31, 2022, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values. The Company had liabilities for deferred and contingent payment obligations related to certain of its investments in Affiliates accounted for under the equity method. See Note 8. The Company had 19 and 21 Affiliates accounted for under the equity method as of March 31, 2021 and 2022, respectively. The majority of these Affiliates are partnerships with structured interests that define how the Company will participate in Affiliate earnings, typically based upon a fixed percentage of revenue reduced by, in some cases, certain agreed-upon expenses. The partnership agreements do not define a fixed percentage for the Company’s ownership of the equity of the Affiliate. These percentages would be subject to a separate future negotiation if an Affiliate were to be sold or liquidated. On March 16, 2022, the Company and other parties entered into a Securities Purchase and Merger Agreement with EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT.ST), under which the Company and each of the other owners agreed to sell their respective equity interests in Baring Private Equity Asia (“BPEA”), an Affiliate accounted for by the Company under the equity method, to EQT, in connection with the announced strategic combination of BPEA and EQT. Pursuant to the terms of the agreement, the Company will receive $240.0 million in cash and 28.68 million EQT ordinary shares (25% of which are subject to a six-month lock-up), and will retain a portion of future carry in certain existing funds. The Company acquired its interest in BPEA for $187.5 million in 2016 and, as of March 31, 2022, its carrying value was $138.0 million. BPEA will continue to be included in the Company’s results until closing of the transaction, which is expected to occur in the fourth quarter of 2022, subject to customary closing conditions. The Company’s gain on the transaction will be taxable at closing.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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