Equity Method Investments in Affiliates

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

In the second quarter of 2024, the Company completed its minority investment in Suma Capital (“Suma”), a pan-European

private markets firm that invests in the transition to a lower carbon economy. Following the close of the transaction, Suma

partners continue to hold a significant majority of the equity of the firm and direct its day-to-day operations.

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,
	2023	2024
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,323.3	$1,363.2
Definite-lived acquired client relationships, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	652.5	546.1
Indefinite-lived acquired client relationships, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	122.6	124.1
Undistributed earnings and tangible capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	190.1	213.2
Equity method investments in Affiliates (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$2,288.5	$2,246.6

The following table presents the changes in Equity method investments in Affiliates (net):


	Equity Method Investments in Affiliates (Net)
	2023	2024
Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$2,139.5	$2,288.5
Investments in Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	349.8	14.3
Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	375.6	442.7
Intangible amortization and impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(95.6)	(130.0)
Distributions of earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(492.1)	(402.7)
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(0.2)	(0.7)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29.3	34.5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(17.8)	—
Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$2,288.5	$2,246.6

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 recorded amortization expense for these relationships

of $109.1 million, $86.0 million, and $90.1 million for the years ended December 31, 2022, 2023, and 2024, respectively.

Based on relationships existing as of December 31, 2024, the Company estimates the amortization expense attributable to its

Affiliates will be approximately $75 million in 2025, approximately $70 million in each of 2026 and 2027, approximately $60

million in 2028, and approximately $45 million in 2029.

For the year ended December 31, 2023, the Company recorded $9.6 million of expenses to reduce the carrying values of

certain of its Affiliates because it concluded that the fair value of its investments had declined below their carrying values and

that the declines were other-than-temporary.

In the second quarter of 2024, the Company recorded a $39.9 million expense to reduce the carrying value of an Affiliate to

fair value. The decline in the fair value was a result of an anticipated decline in assets under management, which decreased the

forecasted income associated with the investment. The fair value of the investment was determined using a discounted cash

flow analysis, a Level 3 fair value measurement that included a projected compounded growth in assets under management over

the next ten years of (2.5)%, long-term growth rate of 3%, discount rates of 12% and 20% for asset- and performance-based

fees, respectively, and a market participant tax rate of 21%. Based on the discounted cash flow analysis, the Company

concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-

temporary.

For the year ended December 31, 2024, the Company completed its annual assessment of its investments in Affiliates

accounted for under the equity method and no other impairments were indicated.

The Company had 22 Affiliates accounted for under the equity method as of December 31, 2023 and 2024. 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.

The following tables present summarized financial information for Affiliates accounted for under the equity method:


	For the Years Ended December 31,
	2022	2023	2024
Revenue(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$3,239.5	$3,115.6	$3,212.0
Net income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,358.7	1,313.0	1,506.4

___________________________

(1)Revenue and net income include asset- and performance-based fees, the impact of consolidated sponsored investment

products, and new Affiliate investments for the full-year, regardless of the date of the Company’s investment.


	December 31,
	2023	2024
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$3,269.1	$3,348.2
Liabilities and Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,467.3	1,262.9

In the fourth quarter of 2022, the Company completed the sale of its equity interest in Baring Private Equity Asia

("BPEA"), an Affiliate accounted for by the Company under the equity method, to EQT AB (“EQT”), a public company

listed on the Nasdaq Stockholm (EQT.ST) (the “BPEA Transaction”) in connection with the strategic combination of

BPEA and EQT. Pursuant to the terms of the Securities Purchase and Merger Agreement with EQT, under which the

Company and each of the other owners agreed to sell their respective equity interests in BPEA, the Company received

$223.6 million in cash, net of transaction costs, and 28.68 million EQT ordinary shares (25% of which were subject to a

six-month lock-up, which expired in April 2023, and all of which were sold by July 2023), and other investments. BPEA is

included in the Company’s results through the closing date, and the Company’s gain on the transaction was $641.9 million,

which is recorded in Affiliate Transaction gains.

On February 6, 2025, the Company announced the completion of its minority investment in NorthBridge Partners,

LLC (“NorthBridge”), a private markets manager specializing in industrial logistics real estate assets. Following the close

of the transaction, NorthBridge partners continue to hold a significant majority of the equity of the firm and direct its day-

to-day operations. The financial results will be recognized in the Consolidated Financial Statements one quarter in arrears.