Affiliated Managers Group, Inc.
(Exact name of registrant as specified in its charter)

600 Hale Street, Prides Crossing, Massachusetts 01965
(Address of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

There were ~~51,097,659~~52,053,190 shares of the registrant's common stock outstanding on ~~August 3, 2010.~~May 5, 2011.

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(~~dollars~~ in ~~thousands,~~millions, except per share data)

(unaudited)

		For the Three Months Ended June 30,						For the Six Months Ended June 30,							For the Three Months Ended March 31,

		2009			2010			2009			2010				2010			2011
Revenue	Revenue	$	201,246		$	332,080		$	379,721		$	583,102		Revenue	$	251.0		$	426.3
Operating expenses:	Operating expenses:													Operating expenses:
	Compensation and related expenses		103,373			142,740			187,533			261,969		Compensation and related expenses		119.2			179.5
	Selling, general and administrative		30,953			72,126			62,413			117,365		Selling, general and administrative		45.3			87.5
	Amortization of intangible assets		8,044			9,592			16,138			18,528		Amortization of intangible assets		8.9			22.1
	Depreciation and other amortization		3,243			3,375			6,482			6,401		Depreciation and other amortization		3.0			3.8
	Other operating expenses		4,736			8,416			10,486			14,470		Other operating expenses		6.1			8.5

			150,349			236,249			283,052			418,733				182.5			301.4

Operating income	Operating income		50,897			95,831			96,669			164,369		Operating income		68.5			124.9

Non-operating (income) and expenses:	Non-operating (income) and expenses:													Non-operating (income) and expenses:
	Investment and other income		(7,191	)		(723	)		(6,950	)		(3,545	)	Investment and other income		(2.8	)		(8.7	)
	Income from equity method investments		(7,351	)		(9,861	)		(13,767	)		(19,007	)	Income from equity method investments		(9.1	)		(10.2	)
	Investment (income) loss from investments in partnerships		(14,947	)		8,585			(11,152	)		4,493		Investment income from investments in partnerships		(4.1	)		—
	Interest expense		15,828			16,315			32,404			32,428		Interest expense		16.0			19.4
	Imputed interest expense		3,365			6,374			6,737			10,112		Imputed interest expense		3.8			8.3

			(10,296	)		20,690			7,272			24,481				3.8			8.8

Income before income taxes	Income before income taxes		61,193			75,141			89,397			139,888		Income before income taxes		64.7			116.1
Income taxes	Income taxes		4,944			16,923			9,908			28,910		Income taxes		11.9			26.7

Net income	Net income		56,249			58,218			79,489			110,978		Net income		52.8			89.4
Net income (non-controlling interests)	Net income (non-controlling interests)		(30,671	)		(41,411	)		(51,549	)		(72,697	)	Net income (non-controlling interests)		(31.3	)		(50.3	)
Net (income) loss (non-controlling interests in partnerships)			(14,599	)		8,397			(10,836	)		4,386
Net income (non-controlling interests in partnerships)														Net income (non-controlling interests in partnerships)		(4.0	)		—

Net Income (controlling interest)	Net Income (controlling interest)	$	10,979		$	25,204		$	17,104		$	42,667		Net Income (controlling interest)	$	17.5		$	39.1

Average shares outstanding—basic	Average shares outstanding—basic		41,450,659			44,610,506			40,740,486			43,491,622		Average shares outstanding—basic		42.4			51.8
Average shares outstanding—diluted	Average shares outstanding—diluted		43,159,140			47,635,230			42,082,991			46,539,949		Average shares outstanding—diluted		45.4			53.1
Earnings per share—basic	Earnings per share—basic	$	0.26		$	0.56		$	0.42		$	0.98		Earnings per share—basic	$	0.41		$	0.76
Earnings per share—diluted	Earnings per share—diluted	$	0.26		$	0.53		$	0.41		$	0.92		Earnings per share—diluted	$	0.38		$	0.74
Supplemental disclosure of total comprehensive income:	Supplemental disclosure of total comprehensive income:													Supplemental disclosure of total comprehensive income:
Net income	Net income	$	56,249		$	58,218		$	79,489		$	110,978		Net income	$	52.8		$	89.4
Other comprehensive income (loss)			24,676			(24,189	)		14,804			1,203
Other comprehensive income														Other comprehensive income		25.4			11.4

Comprehensive income	Comprehensive income		80,925			34,029			94,293			112,181		Comprehensive income		78.2			100.8
Comprehensive income (non-controlling interests)	Comprehensive income (non-controlling interests)		(45,270	)		(33,014	)		(62,385	)		(68,311	)	Comprehensive income (non-controlling interests)		(35.3	)		(50.3	)

Comprehensive income (loss) (controlling interest)		$	35,655		$	1,015		$	31,908		$	43,870
Comprehensive income (controlling interest)														Comprehensive income (controlling interest)	$	42.9		$	50.5

The accompanying notes are an integral part of the Consolidated Financial Statements.

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in ~~thousands)~~millions)

(unaudited)

			December 31, 2009			June 30, 2010					December 31, 2010			March 31, 2011

Assets	Assets								Assets
Current assets:	Current assets:								Current assets:
	Cash and cash equivalents		$	259,487		$	220,543
	Investment advisory fees receivable			140,118			200,395		Cash and cash equivalents		$	313.3		$	252.8
	Investments in partnerships			93,809			89,554		Investment advisory fees receivable			236.4			231.2
	Investments in marketable securities			56,690			62,802		Investments in marketable securities			116.0			110.3
	Unsettled fund share receivables			—			55,817		Unsettled fund share receivables			42.0			103.8
	Prepaid expenses and other current assets			35,478			30,007		Prepaid expenses and other current assets			61.7			83.5

		Total current assets		585,582			659,118			Total current assets		769.4			781.6
Fixed assets, net	Fixed assets, net			62,402			68,086		Fixed assets, net			67.7			66.0
Equity investments in Affiliates	Equity investments in Affiliates			658,332			635,321		Equity investments in Affiliates			678.9			622.7
Acquired client relationships, net	Acquired client relationships, net			571,573			1,397,034		Acquired client relationships, net			1,424.2			1,409.6
Goodwill	Goodwill			1,413,217			1,983,468		Goodwill			2,131.2			2,142.6
Other assets	Other assets			99,800			195,426		Other assets			219.8			236.8

		Total assets	$	3,390,906		$	4,938,453			Total assets	$	5,291.2		$	5,259.3

Liabilities and Stockholders' Equity
Liabilities and Equity									Liabilities and Equity
Current liabilities:	Current liabilities:								Current liabilities:
	Accounts payable and accrued liabilities		$	117,227		$	194,759		Accounts payable and accrued liabilities		$	252.8		$	207.3
	Unsettled fund share payables			—			50,446		Unsettled fund share payables			39.8			95.3
	Payables to related party			109,888			90,791		Payables to related party			114.8			80.5

		Total current liabilities		227,115			335,996			Total current liabilities		407.4			383.1
Senior debt	Senior debt			—			659,500		Senior debt			460.0			340.0
Senior convertible securities	Senior convertible securities			456,976			415,856		Senior convertible securities			422.1			425.5
Junior convertible trust preferred securities	Junior convertible trust preferred securities			507,358			508,588		Junior convertible trust preferred securities			509.9			510.5
Deferred income taxes	Deferred income taxes			322,671			464,151		Deferred income taxes			495.4			502.9
Other long-term liabilities	Other long-term liabilities			26,066			174,545		Other long-term liabilities			207.8			215.0

		Total liabilities		1,540,186			2,558,636			Total liabilities		2,502.6			2,377.0
Redeemable non-controlling interests	Redeemable non-controlling interests			368,999			344,020		Redeemable non-controlling interests			406.3			531.2
Equity:	Equity:								Equity:
	Common stock			458			508		Common stock			0.5			0.5
	Additional paid-in capital			612,091			880,729		Additional paid-in capital			980.5			854.6
	Accumulated other comprehensive income			45,958			47,161		Accumulated other comprehensive income			100.5			111.9
	Retained earnings			873,137			915,804		Retained earnings			1,011.8			1,050.9

				1,531,644			1,844,202					2,093.3			2,017.9
	Less: treasury stock, at cost			(421,954	)		(356,341	)	Less: treasury stock, at cost			(293.3	)		(256.7	)

		Total stockholders' equity		1,109,690			1,487,861			Total equity		1,800.0			1,761.2
	Non-controlling interests			281,946			462,015		Non-controlling interests			582.3			589.9
	Non-controlling interests in partnerships			90,085			85,921
									Total equity			2,382.3			2,351.1
		Total equity		1,481,721			2,035,797
									Total liabilities and equity		$	5,291.2		$	5,259.3
		Total liabilities and equity	$	3,390,906		$	4,938,453

The accompanying notes are an integral part of the Consolidated Financial Statements.

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(~~dollars~~ in ~~thousands)~~millions)

(unaudited)

Total Stockholders' Equity

Common
Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Income (Loss) Retained
Earnings Treasury
Shares
at Cost Non-
controlling
interests Non-
controlling
interests in
partnerships Total
Equity
December 31, 2009
$ 458 $ 612,091 $ 45,958 $ 873,137 $ (421,954 ) $ 281,946 $ 90,085 $ 1,481,721
Stock issued under option and other incentive plans
— (41,202 ) — — 65,604 — — 24,402
Tax benefit of option exercises
— 6,795 — — — — — 6,795
Issuance costs
— (228 ) — — — — — (228 )
Changes in Affiliate equity value
— (1,774 ) — — — 394 — (1,380 )
Settlement of forward equity sale agreement
24 99,980 — — — — — 100,004
Conversion of zero coupon convertible notes
9 47,449 — — 9 — — 47,467
Share-based payment arrangements
— 10,730 — — — — — 10,730
Distributions to non-controlling interests
— — — — — (90,564 ) — (90,564 )
Investments in Affiliates
17 146,888 — — — 197,542 — 344,447
Other changes in non-controlling interests in partnerships
— — — — — — 222 222
Net Income
— — — 42,667 — 72,697 (4,386 ) 110,978
Other comprehensive income
— — 1,203 — — — — 1,203

June 30, 2010
$ 508 $ 880,729 $ 47,161 $ 915,804 $ (356,341 ) $ 462,015 $ 85,921 $ 2,035,797

	Total Stockholders' Equity

	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Shares at Cost			Non- controlling interests			Total Equity
December 31, 2010	$	0.5	$	980.5		$	100.5	$	1,011.8	$	(293.3	)	$	582.3		$	2,382.3
Stock issued under option and other incentive plans		—		(21.5	)		—		—		36.6			—			15.1
Tax benefit of option exercises		—		5.7			—		—		—			—			5.7
Changes in Affiliate equity		—		(117.6	)		—		—		—			26.8			(90.8	)
Share-based payment arrangements		—		7.5			—		—		—			—			7.5
Distributions to non-controlling interests		—		—			—		—		—			(69.5	)		(69.5	)
Net Income		—		—			—		39.1		—			50.3			89.4
Other comprehensive income		—		—			11.4		—		—			—			11.4

March 31, 2011	$	0.5	$	854.6		$	111.9	$	1,050.9	$	(256.7	)	$	589.9		$	2,351.1

The accompanying notes are an integral part of the Consolidated Financial Statements.

AFFILIATED MANAGERS GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in ~~thousands)~~millions)

(unaudited)

			For the Three Months Ended June 30,						For the Six Months Ended June 30,								For the Three Months Ended March 31,

			2009			2010			2009			2010					2010			2011
Cash flow from operating activities:	Cash flow from operating activities:														Cash flow from operating activities:
	Net Income		$	56,249		$	58,218		$	79,489		$	110,978		Net income		$	52.8		$	89.4
Adjustments to reconcile Net Income to net cash flow from operating activities:
Adjustments to reconcile Net income to net cash flow from operating activities:															Adjustments to reconcile Net income to net cash flow from operating activities:
	Amortization of intangible assets			8,044			9,592			16,138			18,528		Amortization of intangible assets			8.9			22.1
	Amortization of issuance costs			1,841			1,847			3,636			3,694		Amortization of issuance costs			1.8			2.6
	Depreciation and other amortization			3,243			3,375			6,482			6,401		Depreciation and other amortization			3.0			3.8
	Deferred income tax provision			4,866			8,997			16,828			17,655		Deferred income tax provision			8.6			9.6
	Imputed Interest Expense			3,365			6,374			6,737			10,112		Imputed interest expense			3.8			8.3
	Income from equity method investments, net of amortization			(7,351	)		(9,861	)		(13,767	)		(19,007	)	Income from equity method investments, net of amortization			(9.1	)		(10.2	)
	Distributions received from equity method investments			9,879			13,577			28,820			36,764		Distributions received from equity method investments			23.2			64.9
	Tax benefit from exercise of stock options			1,459			1,802			1,459			2,076		Tax benefit from exercise of stock options			0.3			0.8
	Stock option expense			1,958			3,159			3,135			6,803		Stock option expense			3.6			6.1
	Affiliate equity expense			3,469			3,432			6,719			6,800		Affiliate equity expense			3.4			3.5
	Other adjustments			(21,189	)		13,483			(18,580	)		9,548		Other adjustments			(4.0	)		(5.6	)
Changes in assets and liabilities:	Changes in assets and liabilities:														Changes in assets and liabilities:
	(Increase) decrease in investment advisory fees receivable			(11,447	)		(24,391	)		17,895			(25,329	)
	(Increase) decrease in investments in partnerships			(648	)		(787	)		331			(504	)	(Increase) decrease in investment advisory fees receivable			(0.9	)		3.0
	(Increase) decrease in prepaids and other current assets			(9,470	)		9,039			(9,213	)		19,768		(Increase) decrease in prepaids and other current assets			11.0			(2.5	)
	(Increase) decrease in other assets			1,085			2,987			2,915			(8,125	)	Increase in unsettled fund shares receivable			(98.7	)		(60.7	)
	(Increase) decrease in unsettled fund shares receivable			—			96,487			—			(2,224	)	Increase in other assets			(11.1	)		(2.9	)
	Increase (decrease) in unsettled fund shares payable			—			(106,089	)		—			2,265		Decrease in accounts payable, accrued liabilities and other long-term liabilities			(37.0	)		(56.5	)
	Increase (decrease) in accounts payable, accrued liabilities and other long-term liabilities			26,861			23,850			(61,119	)		(13,092	)	Increase in unsettled fund shares payable			108.4			54.5

		Cash flow from operating activities		72,214			115,091			87,905			183,111			Cash flow from operating activities		68.0			130.2

Cash flow used in investing activities:	Cash flow used in investing activities:														Cash flow used in investing activities:
	Investments in Affiliates			(1,411	)		(665,368	)		(1,411	)		(793,036	)	Investments in Affiliates			(127.7	)		(13.3	)
	Purchase of fixed assets			(663	)		(2,002	)		(1,215	)		(3,107	)	Purchase of fixed assets			(1.1	)		(1.7	)
	Purchase of investment securities			(2,911	)		(15,484	)		(11,747	)		(30,403	)	Purchase of investment securities			(14.9	)		(9.1	)
	Sale of investment securities			—			—			5,720			11,784		Sale of investment securities			11.8			12.0

		Cash flow used in investing activities		(4,985	)		(682,854	)		(8,653	)		(814,762	)		Cash flow used in investing activities		(131.9	)		(12.1	)

Cash flow from (used in) financing activities:	Cash flow from (used in) financing activities:														Cash flow from (used in) financing activities:
	Borrowings of senior bank debt			—			782,500			—			1,017,500		Borrowings of senior bank debt			235.0			—
	Repayments of senior bank debt			—			(293,000	)		(233,514	)		(358,000	)	Repayments of senior bank debt			(65.0	)		(120.0	)
	Issuance of common stock			11,622			22,959			11,622			25,414		Issuance of common stock			2.5			15.2
	Issuance costs			—			(147	)		(921	)		(229	)	Issuance costs			(0.1	)		(7.7	)
	Excess tax benefit from exercise of stock options			1,086			4,358			1,086			4,719		Excess tax benefit from exercise of stock options			0.4			4.9
	Settlement of forward equity sale agreement			—			100,004			144,258			100,004		Settlement of treasury lock			—			4.0
	Note payments			(2,932	)		(520	)		(4,479	)		(25,891	)	Note payments			(25.4	)		0.1
	Distributions to non-controlling interests			(25,506	)		(23,779	)		(87,125	)		(60,692	)	Distributions to non-controlling interests			(37.2	)		(69.5	)
	Affiliate equity issuances and repurchases			(16,421	)		(6,893	)		(32,806	)		(109,532	)	Affiliate equity issuances and repurchases			(102.6	)		(7.8	)
	Subscriptions (redemptions) of non-controlling interests in partnerships			508			787			(471	)		503
																Cash flow from (used in) financing activities		7.6			(180.8	)
		Cash flow from (used in) financing activities		(31,643	)		586,269			(202,350	)		593,796

Effect of foreign exchange rate changes on cash and cash equivalents	Effect of foreign exchange rate changes on cash and cash equivalents			1,492			(1,714	)		1,036			(1,089	)	Effect of foreign exchange rate changes on cash and cash equivalents			0.6			2.2
Net increase (decrease) in cash and cash equivalents				37,078			16,792			(122,062	)		(38,944	)
Net decrease in cash and cash equivalents															Net decrease in cash and cash equivalents			(55.7	)		(60.5	)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period			237,291			203,751			396,431			259,487		Cash and cash equivalents at beginning of period			259.5			313.3

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period		$	274,369		$	220,543		$	274,369		$	220,543		Cash and cash equivalents at end of period		$	203.8		$	252.8

Supplemental disclosure of non-cash financing activities:
Supplemental disclosure of non-cash activities:															Supplemental disclosure of non-cash activities:
	Notes received for Affiliate equity sales		$	593		$	1,893		$	4,060		$	7,642		Notes received for Affiliate equity sales		$	5.7		$	9.5
	Payables recorded for Affiliate equity purchases			671			—			671			15,284		Payables recorded for Affiliate equity purchases			15.3			7.0
	Stock issued for conversion of zero coupon senior convertible note			—			47,457			—			47,457		Payables recorded under contingent payment arrangements			49.0			—
	Stock issued for Investments in Affiliates			—			146,906			—			146,906
	Stock issued for settlement of forward equity sale agreement			—			44,450			—			44,450
	Payables recorded under contingent payment arrangements			—			15,283			—			64,250

The accompanying notes are an integral part of the Consolidated Financial Statements.

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 United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair statement of the results have been included. All intercompany balances and transactions have been eliminated. ~~All dollar amounts in these notes (except information that is presented on a per share, per security, per note or per contract basis) are stated in thousands, unless otherwise indicated.~~ Certain reclassifications have been made to the prior period's financial statements to conform to the current period's presentation. 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 ~~(as amended, the "Annual Report on Form 10-K")~~ for the fiscal year ended December 31, ~~2009~~2010 includes additional information about AMG, its operations, ~~its~~ financial position and ~~its~~ accounting policies, and should be read in conjunction with this Quarterly Report on Form 10-Q.

All dollar and share amounts in these notes (except information that is presented on a per share, per security, per note or per contract basis) are stated in millions, unless otherwise indicated.

There are no recently issued accounting standards that are expected to have a material effect on the Company's Consolidated Financial Statements.

The Company ~~has a $770,000~~entered into an amended and restated revolving credit facility (the ~~"Revolver"~~"credit facility") ~~and pays interest on any outstanding obligations~~in January 2011, which allows for borrowings of up to $750.0 million at specified rates ~~(based either on the Eurodollar rate or the prime rate as in effect from time to time)~~of interest that vary depending on the Company's credit ~~rating.~~ratings. Subject to the agreement of the lenders to provide ~~additional~~incremental commitments and subject to certain requirements in the credit facility, the Company has the option to increase the ~~Revolver~~credit facility by up to an additional ~~$175,000.~~$150.0 million.

The ~~Revolver,~~credit facility, which will mature in ~~February 2012,~~January 2015, is unsecured and contains financial covenants with respect to leverage and interest ~~coverage. The Revolver~~coverage and also contains customary affirmative and negative covenants, including limitations on indebtedness, liens, cash dividends, asset dispositions and fundamental corporate changes. ~~Borrowings~~Obligations under the ~~Revolver~~credit facility are ~~collateralized~~guaranteed by ~~pledges~~certain of the ~~substantial majority~~Company's wholly-owned domestic subsidiaries in accordance with the terms of ~~capital stock or other equity interests owned by~~ the ~~Company.~~credit facility. At ~~June 30, 2010,~~March 31, 2011, the Company had ~~$659,500~~$340.0 million of outstanding ~~borrowings under~~borrowings.

As further described in Note 15, the ~~Revolver; and,~~Company has entered into interest rate swap contracts to exchange a fixed rate for the variable rate on ~~July 2, 2010, used the net proceeds from the settlement~~a portion of ~~sales under~~ its ~~forward equity program to pay down the balance of the Revolver to approximately $465,000.~~credit facility.

At March 31, 2011, the Company has one senior convertible security outstanding ("2008 senior convertible notes") and two junior convertible trust preferred securities outstanding, issued in 2006 (the

"2006 junior convertible trust preferred securities") and in 2007 (the "2007 junior convertible trust preferred securities"). The carrying values of the ~~senior~~Company's convertible securities are as follows:

~~2008 Senior Convertible Notes~~

In August 2008, the Company issued $460,000 of senior convertible notes due 2038 ("2008 senior convertible notes"). The 2008 senior convertible notes bear interest at 3.95%, payable semi-annually in cash. The Company is accreting the carrying value to the principal amount at maturity using an interest rate of 7.4% (over its expected life of five years). Each security is convertible into 7.959 shares of the Company's common stock (at an initial conversion price of $125.65) upon the occurrence of certain events, as follows: (i) during any fiscal quarter, if the closing price of the Company's common stock, as measured over a specified time period during the preceding fiscal quarter, is equal to or greater than 130% of the conversion price of the notes on the last day of such preceding fiscal quarter; (ii) during a certain window of time, if the trading price per $1,000 principal amount of the notes for each day during a specified period is less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate of the notes on such day; (iii) upon the occurrence of specified corporate transactions; (iv) after the notes have been called for redemption; and (v) anytime after February 15, 2038. Upon conversion, the Company may elect to pay cash, deliver shares of its common stock, or a combination thereof. The holders of the 2008 senior convertible notes may require the Company to repurchase the notes in August of 2013, 2018, 2023, 2028 and 2033. The Company may redeem the notes for cash (subject to the holders' right to convert) at any time on or after August 15, 2013.

The 2008 senior convertible notes are considered contingent payment debt instruments under federal income tax regulations. These regulations require the Company to deduct interest in an amount greater than its reported interest expense, which will result in annual deferred tax liabilities of approximately $11.2 million. These deferred tax liabilities will be reclassified directly to stockholders' equity if the Company's common stock is trading above certain thresholds at the time of the conversion of the ~~notes.~~securities.

~~Zero Coupon Senior Convertible Notes~~

In the second quarter of 2010, the Company called the zero coupon senior convertible notes for redemption. In lieu of redemption, all of the holders elected to convert their notes into shares of the Company's common stock. The Company issued 873,626 shares of common stock to settle these conversions. All of the Company's zero coupon senior convertible notes have been cancelled and retired.

~~The carrying values of the Company's junior convertible trust preferred securities are as follows:~~

In 2006, the Company issued $300,000 of junior subordinated convertible debentures due 2036 to a wholly-owned trust simultaneous with the issuance, by the trust, of $291,000 of convertible trust preferred securities to investors. The junior subordinated convertible debentures and convertible trust preferred securities (together, the "2006 junior convertible trust preferred securities") have substantially the same terms.

The 2006 junior convertible trust preferred securities bear interest at a rate of 5.1% per annum, payable quarterly in cash. The Company is accreting the carrying value to the principal amount at maturity using an interest rate of 7.5% (over its expected life of 30 years). Each $50 security is convertible, at any time, into 0.333 shares of the Company's common stock, which represents a conversion price of $150 per share (or a 48% premium to the then prevailing share price of $101.45). Upon conversion, holders will receive cash or shares of the Company's common stock (or a combination of cash and common stock) at the election of the Company. The 2006 junior convertible trust preferred securities may not be redeemed by the Company prior to April 15, 2011. On or after April 15, 2011, they may be redeemed if the closing price of the Company's common stock exceeds $195 per share for a specified period of time. The trust's only assets are the junior convertible subordinated debentures. To the extent that the trust has available funds, the Company is obligated to ensure that holders of the 2006 junior convertible trust preferred securities receive all payments due from the trust.

In October 2007, the Company issued an additional $500,000 of junior subordinated convertible debentures which are due 2037 to a wholly-owned trust simultaneous with the issuance, by the trust, of $500,000 of convertible trust preferred securities to investors. The junior subordinated convertible debentures and convertible trust preferred securities (together, the "2007 junior convertible trust preferred securities") have substantially the same terms.

The 2007 junior convertible trust preferred securities bear interest at 5.15% per annum, payable quarterly in cash. The Company is accreting the discounted amount to the principal amount at maturity using an interest rate of 8.0% (over its expected life of 30 years). Each $50 security is convertible, at any time, into 0.25 shares of the Company's common stock, which represents a conversion price of $200 per share (or a 53% premium to the then prevailing share price of $130.77). Upon conversion, holders will receive cash or shares of the Company's common stock (or a combination of cash and common stock) at the election of the Company. The 2007 junior convertible trust preferred securities may not be redeemed by the Company prior to October 15, 2012. On or after October 15, 2012, they may be redeemed if the closing price of the Company's common stock exceeds $260 per share for a specified period of time. The trust's only assets are the 2007 junior convertible subordinated debentures. To the extent that the trust has available funds, the Company is obligated to ensure that holders of the 2007 junior convertible trust preferred securities receive all payments due from the trust.

The 2006 and 2007 junior convertible trust preferred securities are considered contingent payment debt instruments under federal income tax regulations. These regulations require the Company to deduct interest in an amount greater than its reported interest expense, which will result in annual deferred tax liabilities of approximately $9.5 million. These deferred tax liabilities will be reclassified directly to stockholders' equity if the Company's common stock is trading above certain thresholds at the time of the conversion of the notes.

~~The~~During 2009, the Company ~~has~~ entered into ~~three~~a forward equity sale ~~agreements~~agreement with a major securities ~~firms~~firm to sell shares of its common stock, ~~(up to $200,000 under each agreement). Under the terms of these~~

~~agreements, the Company can settle forward sales at any time prior to December 31, 2010 by issuing shares~~and extended this agreement in ~~exchange for cash or, at the Company's option, by settling on a net stock or cash basis.~~April 2011. As of ~~June 30, 2010, the Company had $200,700 of~~March 31, 2011, no forward equity sales ~~outstanding, which were subsequently settled net of transaction costs on July 2, 2010 by issuing 3,193,072 shares.~~are outstanding. The Company may sell up to an additional ~~$103,500~~$103.5 million under ~~an agreement entered into in July 2009.~~this agreement.

The consolidated income tax provision includes taxes attributable to controlling interests and, to a lesser extent, taxes attributable to non-controlling interests as follows:

			For the Three Months Ended June 30,						For the Six Months Ended June 30,								For the Three Months Ended March 31,

			2009			2010			2009			2010					2010			2011
Controlling Interests:	Controlling Interests:														Controlling Interests:
	Current Tax		$	(1,126	)	$	5,344		$	(9,171	)	$	7,852		Current Tax		$	2.5		$	13.5
	Intangible related deferred taxes			9,544			14,310			19,115			25,050		Intangible related deferred taxes			10.7			12.9
	Other Deferred Taxes			(4,678	)		(4,852	)		(2,287	)		(6,935	)	Other Deferred Taxes			(2.1	)		(2.8	)

		Total Controlling Interests		3,740			14,802			7,657			25,967			Total Controlling Interests	$	11.1		$	23.6

Non-Controlling Interests:	Non-Controlling Interests:														Non-Controlling Interests:
	Current Tax		$	1,204		$	2,581		$	2,251		$	3,403		Current Tax		$	0.8		$	3.6
	Deferred Taxes			—			(460	)		—			(460	)	Deferred Taxes			—			(0.5	)

		Total Non-Controlling Interests		1,204			2,121			2,251			2,943			Total Non-Controlling Interests		0.8			3.1

Provision for income taxes	Provision for income taxes		$	4,944		$	16,923		$	9,908		$	28,910		Provision for income taxes		$	11.9		$	26.7

Income before income taxes (controlling interest)	Income before income taxes (controlling interest)		$	14,719		$	40,006		$	24,761		$	68,634		Income before income taxes (controlling interest)		$	28.6		$	62.7

Effective Tax rate attributable to controlling interests⁽¹⁾	Effective Tax rate attributable to controlling interests⁽¹⁾			25.4	%		37.0	%		30.9	%		37.8	%	Effective Tax rate attributable to controlling interests⁽¹⁾			38.8	%		37.6	%

		For the Three Months Ended June 30,						For the Six Months Ended June 30,							For the Three Months Ended March 31,

		2009			2010			2009			2010				2010			2011
Current:	Current:													Current:
	Federal	$	(4,640	)	$	544		$	(14,625	)	$	(204	)	Federal	$	(0.8	)	$	6.1
	State		2,516			2,264			3,926			3,453		State		1.2			3.1
	Foreign		2,202			5,118			3,779			8,006		Foreign		2.9			7.9

Total Current	Total Current		78			7,926			(6,920	)		11,255		Total Current		3.3			17.1

Deferred:	Deferred:													Deferred:
	Federal		7,448			8,503			18,456			16,380		Federal		7.9			11.3
	State		(2,149	)		1,570			(891	)		2,843		State		1.2			0.7
	Foreign		(433	)		(1,076	)		(737	)		(1,568	)	Foreign		(0.5	)		(2.4	)

Total Deferred	Total Deferred		4,866			8,997			16,828			17,655		Total Deferred		8.6			9.6

Provision for Income Taxes	Provision for Income Taxes	$	4,944		$	16,923		$	9,908		$	28,910		Provision for Income Taxes	$	11.9		$	26.7

		December 31, 2009			June 30, 2010				December 31, 2010			March 31, 2011

Deferred Tax Assets	Deferred Tax Assets							Deferred Tax Assets
								State net operating loss carryforwards	$	30.6		$	29.6
	State net operating loss carryforwards	$	28,694		$	28,748		Foreign tax credit carryforwards		17.3			19.1
	Foreign tax credit carryforwards		9,442			17,186		Deferred compensation		10.3			11.7
	Capital loss carryforwards		1,808			1,472		Accrued expenses		8.5			10.3
	Other		14,297			14,987		Capital loss carryforwards		1.5			1.5

Total deferred tax assets	Total deferred tax assets		54,241			62,393		Total deferred tax assets		68.2			72.2
Valuation allowance	Valuation allowance		(25,294	)		(25,434	)	Valuation allowance		(27.6	)		(26.7	)

Deferred tax assets, net of valuation allowance	Deferred tax assets, net of valuation allowance	$	28,947		$	36,959		Deferred tax assets, net of valuation allowance	$	40.6		$	45.5

Deferred Tax Liabilities	Deferred Tax Liabilities							Deferred Tax Liabilities
	Intangible asset amortization	$	(188,872	)	$	(194,979	)	Intangible asset amortization	$	(209.3	)	$	(218.9	)
	Convertible securities interest		(139,279	)		(146,671	)	Convertible securities interest		(154.5	)		(158.5	)
	Non-deductible intangible amortization		(19,745	)		(149,706	)	Non-deductible intangible amortization		(143.1	)		(143.5	)
	Other		(3,722	)		(9,754	)	Deferred revenue		(26.3	)		(24.8	)
								Other		(2.8	)		(2.7	)

Total deferred tax liabilities	Total deferred tax liabilities		(351,618	)		(501,110	)	Total deferred tax liabilities		(536.0	)		(548.4	)

	Net deferred tax liability	$	(322,671	)	$	(464,151	)	Net deferred tax liability	$	(495.4	)	$	(502.9	)

Deferred tax liabilities are primarily the result of tax deductions for the Company's intangible assets and convertible securities. The Company amortizes most of its intangible assets for tax purposes only, reducing its tax basis below its carrying value for financial statement purposes and generating deferred taxes each reporting period. The Company's 2008 senior convertible notes and junior convertible trust preferred securities ~~and 2008 senior convertible notes~~ also generate deferred taxes because the Company's tax deductions are higher than the interest expense recorded for financial statement purposes.

~~In the second quarter of 2010, in connection with the closing of the investments in Pantheon and Aston (discussed further in Note 17),~~At March 31, 2011, the Company recorded deferred tax liabilities. As the Company's investment in Pantheon is deductible in the United States, but is not deductible outside the United States; the Company recorded a deferred tax liability of $51,917. As the Company's investment in Aston was tax-free for Highbury's shareholders, the Company only recorded a deferred tax liability of $13,171 because most of its acquired intangible assets were not deductible for tax purposes.

~~At June 30, 2010, the Company had~~has state net operating loss carryforwards that expire over a 15-year period beginning in ~~2010.~~2011. The Company also has foreign tax credit carryforwards that expire over a 10-year period beginning in ~~2010.~~2011. The valuation allowances at December 31, ~~2009~~2010 and ~~June 30, 2010~~March 31, 2011 were principally related to the ~~uncertainty of the realization of the foreign tax credits and the state net operating loss carryforwards, which realization depends upon the~~ Company's ~~generation of~~ability to generate sufficient taxable income prior to ~~their expiration.~~the expiration of these carryforwards.

At ~~June 30, 2010,~~March 31, 2011, the Company's liability for uncertain tax positions was ~~$22,150,~~$24.6 million, including interest and related charges of ~~$3,918. The Company does not anticipate that this liability will change significantly over~~$3.0 million. Over the next twelve ~~months.~~months, as a result of state and foreign tax audits, unrecognized tax benefits on uncertain tax positions could increase by $1.0 to $3.0 million.

The calculation of basic earnings per share is based on the weighted average number of shares of the Company's common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company's common stock. The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share available to common stockholders. ~~Unlike all other dollar amounts in these Notes, the amounts in the numerator reconciliation are not presented in thousands.~~

		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,

		2009		2010		2009		2010			2010		2011
Numerator:	Numerator:									Numerator:
Net Income (controlling interest)	Net Income (controlling interest)	$	10,979,000	$	25,204,000	$	17,104,000	$	42,667,000	Net Income (controlling interest)	$	17.5	$	39.1
Interest expense on convertible securities, net of taxes	Interest expense on convertible securities, net of taxes		36,000		28,000		72,000		52,000	Interest expense on convertible securities, net of taxes		0.0		—

Net Income (controlling interest), as adjusted	Net Income (controlling interest), as adjusted	$	11,015,000	$	25,232,000	$	17,176,000	$	42,719,000	Net Income (controlling interest), as adjusted	$	17.5	$	39.1

Denominator:	Denominator:									Denominator:
Average shares outstanding—basic	Average shares outstanding—basic		41,450,659		44,610,506		40,740,486		43,491,622	Average shares outstanding—basic		42.4		51.8
Effect of dilutive instruments:	Effect of dilutive instruments:									Effect of dilutive instruments:
	Stock options		557,275		987,830		324,501		951,364	Stock options		0.9		1.3
	Forward sale		277,403		1,375,840		144,201		1,329,622	Forward sale		1.3		—
	Senior convertible securities		873,803		661,054		873,803		767,341	Senior convertible securities		0.8		—

Average shares outstanding—diluted	Average shares outstanding—diluted		43,159,140		47,635,230		42,082,991		46,539,949	Average shares outstanding—diluted		45.4		53.1

As more fully discussed in ~~Notes~~Note 3, ~~and 4,~~ the Company had ~~certain~~ convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of diluted earnings per share. Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are

contractually convertible into the Company's common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net Income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share.

The calculation of diluted earnings per share for the three months ended ~~June 30, 2009~~March 31, 2010 and ~~2010~~2011 excludes the potential exercise of options to purchase ~~2.1~~1.3 million and ~~0.8~~0.6 million shares of common ~~shares,~~stock, respectively, because the effect would be anti-dilutive. The calculation of diluted earnings per share for the six months ended June 30, 2009 and 2010 excludes the potential exercise of options to purchase 2.1 million and 1.2 million common shares, respectively, because the effect would be anti-dilutive.

As discussed further in Note ~~19,~~18, the Company may settle portions of its Affiliate equity purchases in shares of its common stock. Because it is the Company's intent to settle these potential repurchases in cash, the calculation of diluted earnings per share excludes any potential dilutive effect from possible share settlements.

The Company and its Affiliates are subject to claims, legal proceedings and other contingencies in the ordinary course of their business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company or its Affiliates. The Company and its Affiliates establish accruals for matters for which the outcome is probable and can be reasonably estimated. Management believes that any liability in excess of these accruals upon the ultimate resolution of these matters will not have a material adverse effect on the consolidated financial ~~condition or results~~statements of operations of the Company.

Certain Affiliates operate under regulatory authorities which require that they maintain minimum financial or capital requirements. Management is not aware of any material violations of such financial ~~requirements occurring during the period.~~requirements.

In connection with its investment in Pantheon ~~investment (discussed further in Note 17),~~Ventures, the Company has committed to co-invest in certain ~~Pantheon~~ investment partnerships where it serves as the general ~~partner~~partner. As of March 31, 2011, these commitments totaled approximately $98.6 million and may be called in future periods. Russell Investments (Pantheon Ventures former owner) is contractually obligated to reimburse the Company for $69.6 million of these commitments when they are called. As

Under past acquisition agreements, the Company is contingently liable, upon achievement of ~~June 30, 2010,~~specified financial targets, to make payments of up to $496.5 million through 2015. In 2011, the Company expects to make payments of approximately $1.4 million to settle portions of these ~~commitments totaled approximately $97,000 and may be called in future periods.~~contingent obligations.

~~The activity in the Affiliate investments in consolidated partnerships was as follows for the six months ended June 30, 2010:~~

~~Purchases and sales of investments (principally equity securities) were $189,878 and $189,374, respectively, for the six months ended June 30, 2010.~~

Management fees earned from these partnerships were $200 and $227 for the three months ended June 30, 2009 and 2010, respectively, and $362 and $469 for the six months ended June 30, 2009 and 2010, respectively.

As of December 31, ~~2009~~2010 and ~~June 30, 2010,~~March 31, 2011, the Affiliates' investments in partnerships that are not consolidated were ~~$17,631~~$106.1 million and ~~$94,656,~~$121.9 million, respectively. These assets are reported within "Other assets" in the Consolidated Balance Sheets. The income or loss related to these investments is classified within "Investment and other ~~(income) loss"~~income" in the Consolidated Statements of Income.

Investments in marketable securities are comprised of the Company's 2009 and 2010 investments in Value Partners Group Limited, a publicly-traded asset management firm based in Hong Kong, and investments held by Affiliates. These investments are carried at their fair value. Changes in fair value for securities classified as available-for-sale are reported in accumulated other comprehensive income. Changes in fair value for trading securities are reported within other operating expenses. The cost of investments in marketable securities, gross unrealized gains and losses were as follows:

	December 31, 2009			June 30, 2010			December 31, 2010		March 31, 2011

Cost of investments in marketable securities	$	50,631		$	51,904		$	68.9	$	63.0
Gross unrealized gains		6,108			11,317			47.1		47.3
Gross unrealized losses		(49	)		(419	)		—		—

Unsettled fund share receivables and payables are created by the normal settlement periods on transactions initiated by certain clients of Affiliate funds domiciled in the United Kingdom. The gross presentation of the receivable ~~($55,817)~~ and offsetting payable ~~($50,446)~~ reflects the legal relationship between the underlying investor and the Company.

The Company determines the fair value of certain investment securities and other financial and nonfinancial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in the most advantageous market, utilizing a hierarchy of three different valuation techniques:

The following table summarizes the Company's assets and liabilities that are measured at fair value on a recurring basis:

The following ~~table summarizes~~is a description of the ~~Company's~~significant assets ~~(principally equity securities)~~ and liabilities ~~that are~~ measured at fair value ~~on a quarterly basis.~~and the fair value methodologies used.

Cash equivalents consist primarily of highly liquid investments in money market funds. Cash investments in actively traded money market funds are classified as Level 1.

~~During the three~~Partnership investments consist of investments in funds advised by Affiliates and ~~six months ended June 30, 2010, there were no significant transfers of financial assets between~~are valued using net asset value ("NAV"). Investments in actively traded funds that calculate daily NAVs are classified as Level ~~1 and~~1. Investments in non-public funds that hold investments with observable market prices are classified as Level 2. ~~During the six months ended June 30, 2010, financial assets valued at $3,709 transferred from~~Investments in funds that hold illiquid securities or that are subject to redemption restrictions are classified as Level ~~3 to Level 2. The fair value of Level 2 assets was determined using quoted prices for similar instruments in active markets.~~3. The fair value of Level 3 assets was determined using NAV one quarter in arrears (adjusted for current period calls and ~~liabilities~~distributions).

Investments in marketable securities consist primarily of investments in funds advised by Affiliates which are valued using NAV and in publicly traded securities. Investments in actively traded funds that calculate daily NAVs and actively traded public securities are classified as Level 1. Investments in non-public funds that hold investments with observable market prices are classified as Level 2.

Interest rate derivatives include Treasury rate lock contracts and interest rate swaps at December 31, 2010 and only interest rate swaps at March 31, 2011. The fair value of these assets was determined by model-derived valuations in which all significant inputs were observable in active markets.

Contingent payment obligations represents the present value of the expected future settlement of contingent payment arrangements related to the Company's business combinations. The fair value of these obligations is determined using an income approach with assumptions made about future cash flows and discount rates.

~~Any change in~~Obligations to related parties include agreements to repurchase Affiliate equity and liabilities offsetting certain investments which are held by the Company but economically attributable to a related party. The fair value of the agreements to repurchase Affiliate ~~investments in consolidated partnerships~~equity is ~~presented as "Investment (income) loss from investments in partnerships" in the Consolidated Statements of Income. However, the portion of this~~determined using an income ~~or loss that is attributable~~approach with assumptions made about future cash flows and discount rates. The liability to ~~investors that are unrelated to the Company, if any, is reported as "Net (income) loss (non-controlling interests in partnerships)."~~a related

party is measured based upon certain investments held by the Company, the fair value of which is determined using NAV.

The following table presents the changes in Level 3 assets and liabilities for the three ~~and six~~ months ended ~~June 30, 2009~~March 31, 2010 and ~~2010:~~2011:

Financial Assets

Three Months
Ended
June 30, 2009 Three Months
Ended
June 30, 2010 Six Months
Ended
June 30, 2009 Six Months
Ended
June 30, 2010
Balance, beginning of period
$ 4,185 $ 300 $ 4,185 $ 4,009
Realized and unrealized gains (losses) included in net income
— (116 ) — (116 )
Realized and unrealized gains (losses) included in other comprehensive income
— — — —
New Investments
63,506 63,506
Purchases
— — — —
Sales
— — — —
Transfers in and/or out of Level 3
— — — (3,709 )

Balance, end of period
$ 4,185 $ 63,690 $ 4,185 $ 63,690

Amount of total gains (losses) included in net income attributable to unrealized gains (losses) from assets still held at end of period

$
—
$
—
$
—
$
—
Amount of total gains (losses) included in other comprehensive income

$
—
$
—
$
—
$
—

	Level 3 Financial Assets and Financial Liabilities at Fair Value

Three Months Ended March 31, 2010	Balance, beginning of period		Net realized gains/losses			Net unrealized gains/losses relating to instruments still held at the reporting date			Purchases and issuances		Settlements and reductions			Net transfers in and/or out of Level 3			Balance, end of period
Partnership investments	$	4.0	$	—	⁽¹⁾	$	—	⁽¹⁾	$	—	$	—		$	(3.7	)	$	0.3
Contingent payment obligations		27.1		—	⁽²⁾		—	⁽²⁾		49.1		(27.1	)		—			49.1
Obligations to related parties		78.7		(0.2	)⁽³⁾		—	⁽³⁾		15.3		(78.5	)		—			15.3

Financial Liabilities

Three Months
Ended
June 30, 2009 Three Months
Ended
June 30, 2010 Six Months
Ended
June 30, 2009 Six Months
Ended
June 30, 2010
Balance, beginning of period
$ 2,568 $ 64,388 $ 27,764 $ 105,727
Realized and unrealized (gains) losses included in net income
(232 ) 2,621 (232 ) 2,454
Realized and unrealized (gains) losses included in other comprehensive income
— (769 ) — (769 )
New Investments
— 48,950 — 98,054
Additions
672 — 672 15,284
Settlements
(1,693 ) — (26,889 ) (105,560 )
Transfers in and/or out of Level 3
— — — —

Balance, end of period
$ 1,315 $ 115,190 $ 1,315 $ 115,190

Amount of total gains (losses) included in net income attributable to unrealized gains (losses) from unsettled liabilities at end of period

$
—
$
2,621
$
—
$
2,621
Amount of total gains (losses) included in other comprehensive income

$
—
$
(769
)
$
—
$
(769
)

	Level 3 Financial Assets and Financial Liabilities at Fair Value

Three Months Ended March 31, 2011	Balance, beginning of period		Net realized gains/losses			Net unrealized gains/losses relating to instruments still held at the reporting date			Purchases and issuances		Settlements and reductions			Net transfers in and/or out of Level 3		Balance, end of period
Partnership investments	$	85.8	$	1.1	⁽¹⁾	$	5.6	⁽¹⁾	$	2.8	$	(1.7	)	$	—	$	93.6
Contingent payment obligations		84.0		—	⁽²⁾		5.4	⁽²⁾		—		—			—		89.4
Obligations to related parties		79.6		0.3	⁽³⁾		2.5	⁽³⁾		9.6		(24.1	)		—		67.9

During the three months ended March 31, 2010, financial assets valued at $3.7 million transferred from Level 3 to Level 2. No such transfers occurred during the three months ended March 31, 2011. In addition, there were no significant transfers of financial assets or liabilities between Level 2 and Level 1 in either period.

As a practical expedient, the Company relies on the NAV of certain investments as their fair value. The NAVs that have been provided by the investees have been derived from the fair values of the underlying investments as of the measurement dates. The following table summarizes, as of December 31, 2010 and March 31, 2011, the nature of these investments and any related liquidation restrictions or other factors which may impact the ultimate value realized:

The carrying amount of the Company's cash, cash equivalents and short-term investments approximates fair value because of the short-term nature of these instruments. The carrying value of

notes receivable approximates fair value because interest rates and other terms of the notes are at market rates. The carrying value of notes payable approximates fair value principally because of the short-term nature of the notes. The carrying value of senior bank debt approximates fair value because the debt is a credit facility with variable interest based on selected short-term rates. The fair market value of the 2008 senior convertible notes and the ~~2006 and 2007~~ junior convertible trust preferred securities at ~~June 30, 2010~~March 31, 2011 was ~~$448,500~~$542.8 million and ~~$509,224,~~$664.0 million, respectively.

The Company's Affiliates act as the investment manager for certain investment funds that are considered variable interest entities ("VIEs"). In addition to an Affiliate's involvement as the investment manager, Affiliates may also hold investments in these products. Affiliates are not the primary beneficiary of these VIEs as their involvement is limited to that of a service provider and their investment, if any, represents an insignificant interest in the fund's assets under management. As a result, the Company's variable interests will not absorb the majority of the variability of the entity's net assets and therefore the Company has not consolidated these entities.

The Company established wholly-owned trusts in connection with the 2006 and 2007 issuances of junior convertible trust preferred securities. These entities are considered VIEs and the Company is not the primary beneficiary, therefore these entities are not consolidated in the Company's financial statements.

The net assets and liabilities of these unconsolidated VIEs and the Company's maximum risk of loss related thereto are as follows:

The Company periodically records amounts receivable and payable to Affiliate partners in connection with the transfer of Affiliate equity interests. AsThe Company also has liabilities to related parties for deferred purchase price and contingent payment obligations in connection with certain business combinations.

The total receivable as of December 31, ~~2009 and June 30,~~ 2010 ~~the~~was $42.9 million, which is included in "Other assets." The total receivable ~~(reported~~as of March 31, 2011 was $57.0 million, of which $14.3 million is included

in "Prepaid expenses and other current assets" and $42.7 million is included in "Other ~~assets") was $45,253 and $40,945, respectively.~~assets." The total payable as of December 31, ~~2009~~2010 was ~~$109,888,~~$183.0 million, of which $114.8 million is included in ~~current~~"Payables to related party" and $68.2 million is included in "Other long-term liabilities." The total payable as of ~~June 30, 2010~~March 31, 2011 was ~~$153,527,~~$147.6 million, of which ~~$90,791~~$80.5 million is included in ~~current~~"Payables to related party" and $67.1 million is included in "Other long-term liabilities."

In certain cases, Affiliate management owners and Company officers may serve as trustees or directors of certain mutual funds from which the Affiliate earns advisory fee revenue.

The following summarizes the transactions of the Company's stock option and incentive plans for the ~~six~~three months ended ~~June 30, 2010:~~March 31, 2011:

The Company's Net Income (controlling interest) for the three ~~and six~~ months ended ~~June 30, 2010~~March 31, 2011 includes compensation expense of ~~$1,943 and $4,184, respectively~~$3.8 million (net of income tax benefits of ~~$1,216 and $2,619, respectively,~~$2.3 million related to the Company's ~~share-based compensation arrangements)~~Stock Option and Incentive, Long-Term Executive Incentive, Long-Term Equity Incentive and Deferred Compensation Plans). As of ~~June 30, 2010,~~March 31, 2011, the ~~deferred~~Company expects to recognize compensation expense related to these share-based compensation arrangements ~~was $40,622 which is expected to be recognized~~of $69.7 million over a weighted average period of approximately ~~four~~three years (assuming no forfeitures). As of ~~June 30, 2010, 0.5 million~~March 31, 2011, no outstanding options have expiration dates prior to the end of ~~2010.~~2011.

The Company periodically uses derivative contracts to manage interest rate exposure associated with its variable interest rate debt.

In 2010, the Company entered into interest rate swap agreements as summarized in the table below:

In November of 2010, the Company entered into a series of treasury rate lock contracts with a total notional value of $100.0 million which were settled in February 2011 for a net pre-tax gain of $4.0 million (each contract was designated and qualified as a cash flow hedge). These contracts were intended to hedge the risks associated with changes in interest rates on a fixed-rate debt issuance that is anticipated to occur prior to June 2012. The gain on these contracts is reflected as a component of other comprehensive income and will be recognized as a deduction to interest expense over the life of the expected fixed rate debt issuance, or recorded as other income in the event the Company determines that it is not probable it will issue fixed rate debt prior to the third quarter of 2012.

Certain of the Company's derivative contracts contain provisions that may require the Company or the counterparties to post collateral based upon the current fair value of the derivative contracts. As of March 31, 2011, the Company was not required to post collateral.

The Company records all derivative instruments on the balance sheet at fair value. As cash flow hedges, the effective portion of the unrealized gain or loss on the derivative instruments is recorded in accumulated other comprehensive income as a separate component of stockholders' equity. Hedge effectiveness is measured by comparing the present value of the cumulative change in the expected future variable cash flows of the hedged contract with the present value of the cumulative change in the expected future variable cash flows of the hedged item. To the extent that the critical terms of the hedged item and the derivative are not identical, hedge ineffectiveness would be reported in earnings as interest expense. Hedge ineffectiveness was not material in any periods presented. As of March 31, 2011, the unrealized gain (before taxes) on the derivative instruments was $3.0 million. The Company does not expect to reclassify any material portion of the unrealized gain into earnings in the next twelve months.

The following summarizes the location and amount of derivative instrument gains and losses (before taxes) reported in the Consolidated Statements of Income:

The following summarizes the location and fair values of derivative instruments on the Consolidated Balance Sheets:

The Company does not hold or issue derivative financial instruments for trading purposes. Interest rate swaps and treasury locks are intended to enable the Company to achieve a level of variable-rate and fixed-rate debt that is acceptable to management and to limit interest rate exposure.

Management has assessed and determined that the Company operates in three business segments representing the Company's three principal distribution channels: Mutual Fund, Institutional and High Net Worth, each of which has different client relationships.

Revenue in the Mutual Fund distribution channel is earned from advisory and sub-advisory relationships with all domestically-registered investment products as well as non-institutional investment

Revenue in the Institutional distribution channel is earned from relationships with foundations and endowments, defined benefit and defined contribution plans and Taft-Hartley plans. Revenue in the High Net Worth distribution channel is earned from relationships with high net worth individuals, family trusts and managed account programs.

Revenue earned from client relationships managed by Affiliates accounted for under the equity method is not consolidated with the Company's reported revenue but instead is included (net of operating expenses, including amortization) in "Income from equity method investments," and reported in the distribution channel in which the Affiliate operates. Income tax attributable to the profits of the Company's equity-method Affiliates is reported within the Company's consolidated income tax provision.

In firms with revenue sharing arrangements, a certain percentage of revenue is allocated for use by management of an Affiliate in paying operating expenses of that Affiliate, including salaries and bonuses, and is called an "Operating Allocation." In reporting segment operating expenses, Affiliate expenses are allocated to a particular segment on a pro rata basis with respect to the revenue generated by that Affiliate in such segment. Generally, as revenue increases, additional compensation is typically paid to Affiliate management partners from the Operating Allocation. As a result, the contractual expense allocation pursuant to a revenue sharing arrangement may result in the characterization of any growth in profit margin beyond the Company's Owners' Allocation as an operating expense. All other operating expenses (excluding intangible amortization) and interest expense have been allocated to segments based on the proportion of cash flow distributions reported by Affiliates in each segment.

For the Three Months Ended June 30, 2009

Mutual Fund Institutional High Net Worth Total
Revenue
$ 72,360 $ 101,491 $ 27,395 $ 201,246
Operating expenses:

Depreciation and other amortization
1,011 7,476 2,800 11,287

Other operating expenses
49,660 70,638 18,764 139,062

50,671 78,114 21,564 150,349

Operating income
21,689 23,377 5,831 50,897

Non-operating (income) and expenses:

Investment and other income
(5,025 ) (1,560 ) (606 ) (7,191 )

Income from equity method investments
(139 ) (6,835 ) (377 ) (7,351 )

Investment income from investments in partnerships
— (385 ) (14,562 ) (14,947 )

Interest expense
5,198 11,441 2,554 19,193

34 2,661 (12,991 ) (10,296 )

Income before income taxes
21,655 20,716 18,822 61,193
Income taxes
2,688 1,950 306 4,944

Net income
18,967 18,766 18,516 56,249

Net income (non-controlling interests)
(12,994 ) (14,130 ) (3,547 ) (30,671 )

Net income (non-controlling interests in partnerships)
— (385 ) (14,214 ) (14,599 )

Net Income (controlling interest)
$ 5,973 $ 4,251 $ 755 $ 10,979

		For the Three Months Ended June 30, 2010													For the Three Months Ended March 31, 2010

		Mutual Fund			Institutional			High Net Worth			Total				Mutual Fund			Institutional			High Net Worth			Total
Revenue	Revenue	$	147,993		$	152,301		$	31,786		$	332,080		Revenue	$	97.9		$	121.8		$	31.3		$	251.0
Operating expenses:	Operating expenses:													Operating expenses:
	Depreciation and other amortization		2,596			8,258			2,113			12,967		Depreciation and other amortization		2.2			7.4			2.3			11.9
	Other operating expenses		102,719			99,574			20,989			223,282		Other operating expenses		66.7			83.4			20.5			170.6

			105,315			107,832			23,102			236,249				68.9			90.8			22.8			182.5

Operating income	Operating income		42,678			44,469			8,684			95,831		Operating income		29.0			31.0			8.5			68.5

Non-operating (income) and expenses:	Non-operating (income) and expenses:													Non-operating (income) and expenses:
	Investment and other (income) loss		1,351			(1,283	)		(791	)		(723	)	Investment and other income		(0.8	)		(1.3	)		(0.7	)		(2.8	)
	Income from equity method investments		(408	)		(8,521	)		(932	)		(9,861	)	Income from equity method investments		(0.3	)		(7.8	)		(1.0	)		(9.1	)
	Investment loss from investments in partnerships		126			351			8,108			8,585		Investment income from Affiliate investments in partnerships		(0.1	)		(0.2	)		(3.8	)		(4.1	)
	Interest expense		9,156			11,331			2,202			22,689		Interest expense		6.0			11.1			2.7			19.8

			10,225			1,878			8,587			20,690				4.8			1.8			(2.8	)		3.8

Income before income taxes	Income before income taxes		32,453			42,591			97			75,141		Income before income taxes		24.2			29.2			11.3			64.7
Income taxes	Income taxes		7,565			7,862			1,496			16,923		Income taxes		5.5			5.0			1.4			11.9

Net income	Net income		24,888			34,729			(1,399	)		58,218		Net income		18.7			24.2			9.9			52.8
	Net income (non-controlling interests)		(14,755	)		(22,736	)		(3,920	)		(41,411	)	Net income (non-controlling interests)		(11.0	)		(16.4	)		(3.9	)		(31.3	)
	Net loss (non-controlling interests in partnerships)		125			351			7,921			8,397		Net income (non-controlling interests in partnerships)		(0.1	)		(0.1	)		(3.8	)		(4.0	)

Net Income (controlling interest)	Net Income (controlling interest)	$	10,258		$	12,344		$	2,602		$	25,204		Net Income (controlling interest)	$	7.6		$	7.7		$	2.2		$	17.5

		For the Six Months Ended June 30, 2009													For the Three Months Ended March 31, 2011

		Mutual Fund			Institutional			High Net Worth			Total				Mutual Fund			Institutional			High Net Worth			Total
Revenue	Revenue	$	140,698		$	183,729		$	55,294		$	379,721		Revenue	$	184.2		$	207.0		$	35.1		$	426.3
Operating expenses:	Operating expenses:													Operating expenses:
	Depreciation and other amortization		2,089			14,900			5,631			22,620		Depreciation and other amortization		4.1			19.7			2.1			25.9
	Other operating expenses		94,229			127,872			38,331			260,432		Other operating expenses		126.4			127.0			22.1			275.5

			96,318			142,772			43,962			283,052				130.5			146.7			24.2			301.4

Operating income	Operating income		44,380			40,957			11,332			96,669		Operating income		53.7			60.3			10.9			124.9

Non-operating (income) and expenses:	Non-operating (income) and expenses:													Non-operating (income) and expenses:
	Investment and other income		(4,399	)		(1,727	)		(824	)		(6,950	)	Investment and other income		(2.3	)		(5.0	)		(1.4	)		(8.7	)
	Income from equity method investments		(209	)		(12,946	)		(612	)		(13,767	)	Income from equity method investments		(1.4	)		(7.7	)		(1.1	)		(10.2	)
	Investment income from investments in partnerships		(3	)		(316	)		(10,833	)		(11,152	)	Investment income from Affiliate investments in partnerships		—			—			—			—
	Interest expense		11,247			22,538			5,356			39,141		Interest expense		10.8			14.6			2.3			27.7

			6,636			7,549			(6,913	)		7,272				7.1			1.9			(0.2	)		8.8

Income before income taxes	Income before income taxes		37,744			33,408			18,245			89,397		Income before income taxes		46.6			58.4			11.1			116.1
Income taxes	Income taxes		6,215			3,171			522			9,908		Income taxes		11.7			12.8			2.2			26.7

Net income	Net income		31,529			30,237			17,723			79,489		Net income		34.9			45.6			8.9			89.4
	Net income (non-controlling interests)		(20,930	)		(24,430	)		(6,189	)		(51,549	)	Net income (non-controlling interests)		(18.3	)		(27.2	)		(4.8	)		(50.3	)
	Net income (non-controlling interests in partnerships)		(3	)		(316	)		(10,517	)		(10,836	)	Net income (non-controlling interests in partnerships)		—			—			—			—

Net Income (controlling interest)	Net Income (controlling interest)	$	10,596		$	5,491		$	1,017		$	17,104		Net Income (controlling interest)	$	16.6		$	18.4		$	4.1		$	39.1

Balance Sheet Information														Balance Sheet Information
Total assets as of December 31, 2010														Total assets as of December 31, 2010	$	1,847.9		$	3,009.3		$	434.0		$	5,291.2
Total assets as of March 31, 2011														Total assets as of March 31, 2011		1,955.2			2,872.7			431.4			5,259.3

The following table presents the change in goodwill during the three months ended March 31, 2011:

For the Six Months Ended June 30, 2010

Mutual Fund Institutional High Net Worth Total
Revenue
$ 245,919 $ 274,073 $ 63,110 $ 583,102
Operating expenses:

Depreciation and other amortization
4,832 15,709 4,388 24,929

Other operating expenses
169,452 182,836 41,516 393,804

174,284 198,545 45,904 418,733

Operating income
71,635 75,528 17,206 164,369

Non-operating (income) and expenses:

Investment and other (income) loss
581 (2,624 ) (1,502 ) (3,545 )

Income from equity method investments
(767 ) (16,344 ) (1,896 ) (19,007 )

Investment loss from investments in partnerships
73 195 4,225 4,493

Interest expense
15,226 22,422 4,892 42,540

15,113 3,649 5,719 24,481

Income before income taxes
56,522 71,879 11,487 139,888
Income taxes
13,030 12,896 2,984 28,910

Net income
43,492 58,983 8,503 110,978

Net income (non-controlling interests)
(25,750 ) (39,179 ) (7,768 ) (72,697 )

Net loss (non-controlling interests in partnerships)
74 196 4,116 4,386

Net Income (controlling interest)
$ 17,816 $ 20,000 $ 4,851 $ 42,667

Balance Sheet Information

Total assets as of December 31, 2009
$ 1,182,940 $ 1,702,983 $ 504,983 $ 3,390,906
Total assets as of June 30, 2010
1,752,409 2,676,571 509,473 4,938,453

The Company periodically makes new investments in asset management firms and acquires interests from, makes additional purchase payments to and transfers interests to Affiliate management partners. The Company incurred $10,445 and $194 of acquisition-related costs which were recognized as selling, general and administrative expenses during the six months ended June 30, 2010 and June 30, 2009, respectively.

~~The following table presents the change in goodwill during the six months ended June 30, 2010:~~

The following table reflects the components of intangible assets of the Company's Affiliates that are consolidated as of December 31, ~~2009~~2010 and ~~June 30, 2010:~~March 31, 2011:

		December 31, 2009				June 30, 2010					December 31, 2010				March 31, 2011

		Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization			Carrying Amount		Accumulated Amortization		Carrying Amount		Accumulated Amortization
Amortized intangible assets:	Amortized intangible assets:									Amortized intangible assets:
	Acquired client relationships	$	389,312	$	168,538	$	924,796	$	187,067	Acquired client relationships	$	974.8	$	228.6	$	976.5	$	250.7
Non-amortized intangible assets:	Non-amortized intangible assets:									Non-amortized intangible assets:
	Acquired client relationships—mutual fund management contracts		350,799		—		659,305		—	Acquired client relationships-mutual fund management contracts		678.0		—		683.8		—
	Goodwill		1,413,217		—		1,983,468		—	Goodwill		2,131.2		—		2,142.6		—

For the Company's Affiliates that are consolidated, definite-lived acquired client relationships are amortized over their expected useful lives. As of ~~June 30, 2010,~~March 31, 2011, these relationships were being amortized over a weighted average life of approximately 10 years. The Company estimates that its consolidated annual amortization expense will be approximately ~~$82,000~~$88.5 million for the next five years, assuming no additional investments in new or existing Affiliates.

The definite-lived acquired client relationships attributable to the Company's equity method investments are amortized over their expected useful lives. As of ~~June 30, 2010,~~March 31, 2011, these relationships were being amortized over approximately seven years. Amortization expense for these relationships was ~~$16,136~~$8.4 million for the ~~six~~three months ended ~~June 30, 2010. The~~March 31, 2011. Assuming no additional investments in new or existing Affiliates, the Company estimates ~~that~~ the annual amortization expense attributable to its current equity-method Affiliates ~~will be approximately $32,000~~ for the next five years ~~assuming no additional investments in new or existing Affiliates.~~

During the quarter ended June 30, 2010, the Company completed its acquisition of Pantheon Ventures Inc., Pantheon Holdings Limited and Pantheon Capital (Asia) Limited (collectively, "Pantheon") from Russell Investments, a subsidiary of Northwestern Mutual Life Insurance Company.

~~Pantheon is a global private equity fund-of-funds manager, with over 25 years of private equity investment experience. Pantheon manages regional funds-of-funds in Europe, the United States and~~

~~Asia, as well as global secondary funds-of-funds, global infrastructure fund-of-funds and customized separate account programs.~~

During the quarter, the Company also completed its investment in Aston Asset Management LLC ("Aston") through the acquisition of Highbury Financial Inc., Aston's parent company. Based in Chicago, Aston offers sub-advised investment products to the mutual fund and managed accounts markets. Aston is the principal advisor to the Aston Funds, a fund family of 24 sub-advised, no-load mutual funds.

The Company has not yet completed its valuation of Pantheon and, therefore, the Company's purchase price allocation is provisional. These provisional amounts may be revised upon completion of the valuation. The excess of the enterprise value over the net assets acquired was recorded as goodwill, of which 91%, 8% and 1% was attributed to the Company's Institutional, Mutual Fund and High Net Worth segments, respectively. The goodwill and acquired client relationships are deductible for U.S. tax purposes over a 15-year life. The provisional allocation of the purchase price is as follows:

As part of this investment, the Company is contingently liable to make payments totaling between zero and $225,000 over the next three to five years upon the achievement of specified revenue targets. The Company measured the provisional fair value of the contingent payment obligation using a financial model that included assumptions of expected market performance and net client cash flows. Based on these assumptions, the Company projects contingent payments totaling $26,300. As of June 30, 2010, the present value of these payments was $15,300. This amount is reported in "Other long-term liabilities."

The Company has not yet completed its valuation of Aston and, therefore, the Company's purchase price allocation is provisional. These provisional amounts may be revised upon completion of the valuation. The excess of the enterprise value over the net assets acquired was recorded as goodwill, of which 98% and 2% was attributed to the Company's Mutual Fund and High Net Worth segments,

~~respectively. Most of the acquired intangible assets are not deductible for U.S. tax purposes. The provisional allocation of the purchase price is as follows:~~

Unaudited pro forma financial results are set forth below, giving consideration to the Artemis (closed during the first quarter of 2010), Pantheon and Aston investments, as if such transactions occurred as of the beginning of 2009, assuming the revenue sharing arrangement had been in effect for the entire period and after making certain other pro forma adjustments.

~~Pantheon and Aston's contribution to the Company's revenue and earnings in the quarter ended June 30, 2010 was not material.~~

During the first quarter of 2010, the Company adopted a new standard that requires an enterprise to perform a qualitative analysis to determine whether its variable interests give it a controlling financial interest in a variable interest entity ("VIE"). Under the standard, an enterprise has a controlling financial interest when it has (a) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. An enterprise that holds a controlling financial interest is deemed to be the primary beneficiary and is required to consolidate the VIE. This new standard has been deferred for certain entities that utilize the specialized accounting guidance for investment companies or that have the attributes of investment companies. The adoption of the portions of this new standard that were not deferred did not have a material impact on the Company's Consolidated Financial Statements.

During the first quarter of 2010, the Company adopted a new standard that eliminated the concept of a qualifying special-purpose entity ("QSPE"), changed the requirements for derecognizing financial assets, and required additional disclosures to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including an entity's

continuing involvement in and exposure to the risks related to transferred financial assets. The standard also clarified the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. The adoption of this new standard did not have a material impact on the Company's Consolidated Financial Statements.

Many of the Company's operating agreements provide ~~Affiliate managers~~the Company a conditional right to ~~require~~call and Affiliate partners the ~~Company~~conditional right to ~~purchase~~put their retained equity interests at certain intervals. Certain agreements also provide the Company a conditional right to require Affiliate managers to sell their retained equity interests to the Company upon their death, permanent incapacity or termination of employment and provide Affiliate managers a conditional right to require the Company to purchase such retained equity interests upon the occurrence of specified events. The purchase price of these conditional purchases are generally calculated based upon a multiple of the Affiliate's cash flow distributions, which is intended to represent fair value. Affiliate management partners are also permitted to sell their equity interests to other individuals or entities in certain cases, subject to the Company's approval or other restrictions.

The Company may pay for Affiliate equity purchases in cash, shares of its common stock or other forms of consideration and can consent to the transfer of these interests to other individuals or entities.

The ~~Company's cumulative~~current redemption ~~obligation for~~value of these interests has been presented as "Redeemable non-controlling interests" on the Company's Consolidated Balance Sheets. Changes in the ~~value of the Company's cumulative~~ current

redemption ~~obligation~~value are recorded to Additional paid-in capital. The following table presents the changes in Redeemable non-controlling interests during the period:


Balance as of January 1, 2010	$	368,999
Balance as of January 1, 2011				$	406.3
Issuance of Redeemable non-controlling interest		8,352			48.5
Repurchase of Redeemable non-controlling interest		(20,512	)		(7.0	)
Changes in redemption value		(12,819	)		83.4

Balance as of June 30, 2010	$	344,020
Balance as of March 31, 2011				$	531.2

Although the timing and amounts of these purchases are difficult to predict, the Company expects to repurchase approximately $100,000 of Affiliate equity during the next twelve months, and, in such event, will own the cash flow associated with any equity repurchased.

During the three ~~and six~~ months ended ~~June 30, 2009~~March 31, 2010 and ~~2010,~~2011, the Company acquired interests from and transferred interests to Affiliate management partners. The following schedule discloses the effect of changes in the Company's ownership interest in its Affiliates on the controlling interest's equity:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended March 31,

	2009			2010			2009			2010			2010			2011
Net income	$	56,249		$	58,218		$	79,489		$	110,978		$	52.8		$	89.4
Foreign currency translation adjustment		24,672			(16,899	)		14,955			(4,818	)		12.1			14.2
Change in net unrealized gain (loss) on investment securities		4			(7,290	)		(151	)		6,021
Change in net unrealized gain on derivative securities														—			0.7
Change in net unrealized gain on investment securities														13.3			(3.5	)

Comprehensive income		80,925			34,029			94,293			112,181			78.2			100.8
Comprehensive income (non-controlling interests)		(45,270	)		(33,014	)		(62,385	)		(68,311	)		(35.3	)		(50.3	)

Comprehensive income (controlling interest)	$	35,655		$	1,015		$	31,908		$	43,870		$	42.9		$	50.5

The components of accumulated other comprehensive income, net of applicable taxes, are as follows:

	December 31, 2009		June 30, 2010		December 31, 2010		March 31, 2011

Foreign currency translation adjustments	$	43,055	$	38,237	$	67.9	$	82.1
Unrealized gain on derivative securities						3.7		4.4
Unrealized gain on investment securities		2,903		8,924		28.9		25.4

Accumulated other comprehensive income	$	45,958	$	47,161	$	100.5	$	111.9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

When used in this Quarterly Report on Form 10-Q, in our other filings with the United States Securities and Exchange Commission, in our press releases and in oral statements made with the approval of an executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "may," "intends," "believes," "estimate," "project" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including, among others, the following:

These factors (among others) could affect our financial performance and cause actual results to differ materially from historical earnings and those presently anticipated and projected. We will not undertake and we specifically disclaim any obligation to release publicly the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of events, whether or not anticipated. In that respect, we wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

Management's Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements of AMG and its subsidiaries (collectively, the "Company" or "AMG") and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

We are a global asset management company with equity investments in ~~a diverse group of~~leading boutique investment management firms (our "Affiliates"). ~~We pursue a growth~~Our innovative partnership approach allows each Affiliate's management team to own significant equity in their firm while maintaining operational autonomy. Our strategy ~~designed~~is to generate ~~shareholder value~~growth through the internal growth of ~~our~~ existing ~~business, additional~~Affiliates, as well as through investments in ~~investment management firms~~new Affiliates. In addition, we provide centralized assistance to our Affiliates in strategic matters, marketing, distribution, product development and ~~strategic transactions and relationships structured to enhance our Affiliates' businesses and growth prospects.~~operations.

As of ~~June 30, 2010,~~March 31, 2011, we manage approximately ~~$249~~$340 billion in assets through our Affiliates in more than 350 investment products across a broad range of asset classes and investment styles in three principal distribution channels: Mutual Fund, Institutional and High Net Worth. We believe that our diversification across asset classes, investment styles and distribution channels helps to mitigate our

exposure to the risks created by changing market environments. The following summarizes our operations in our three principal distribution channels.

On June 30, 2010, we completed our investment in Pantheon Ventures Inc., Pantheon Holdings Limited and Pantheon Capital (Asia) Limited (collectively, "Pantheon"). Pantheon manages regional funds-of-funds in Europe, the United States and Asia, as well as global secondary funds-of-funds, global infrastructure fund-of-funds and customized separate account programs.

On April 15, 2010, we completed our investment in Aston Asset Management LLC ("Aston") through the acquisition of Highbury Financial Inc., Aston's parent company. Based in Chicago, Aston offers sub-advised investment products to the mutual fund and managed accounts markets. Aston is the principal advisor to the Aston Funds, a fund family of 24 sub-advised, no-load mutual funds.

On March 15, 2010, we completed our investment in Artemis Investment Management Ltd ("Artemis") in combination with the management team of Artemis. Artemis specializes in active investment management for retail and institutional investors in the UK, as well as Europe and the Middle East, across a range of mutual funds and segregated institutional accounts.

We operate our business through our Affiliates in our three principal distribution channels, maintaining each Affiliate's distinct entrepreneurial culture and independence through our investment structure. In making investments in boutique investment management firms, we seek to partner with the highest quality firms in the industry, with outstanding management teams, strong long-term performance records and a demonstrated commitment to continued growth and success. Fundamental to our investment approach is the belief that Affiliate management equity ownership (along with AMG's ownership) aligns our interests and provides Affiliate managers with a powerful incentive to continue to grow their business. Our investment structure provides a degree of liquidity and diversification to principal owners of boutique investment management firms, while at the same time expanding equity ownership opportunities among the firm's management and allowing management to continue to participate in the firm's future growth. Our partnership approach also ensures that Affiliates maintain operational autonomy in managing their business, thereby preserving their firm's entrepreneurial culture and independence.

Although the specific structure of each investment is highly tailored to meet the needs of a particular Affiliate, in all cases, ~~AMG establishes~~we establish a meaningful equity interest in the firm, with the remaining equity interests retained by the management of the Affiliate. Each Affiliate is organized as a separate firm, and its operating or shareholder agreement is structured to provide appropriate incentives for Affiliate management owners and to address the Affiliate's particular characteristics while also enabling us to protect our interests, including through arrangements such as long-term employment agreements with key members of the firm's management team.

In most cases, we own a majority of the equity interests of a firm and structure a revenue sharing arrangement, in which a percentage of revenue is allocated for use by management of that Affiliate in paying operating expenses of the Affiliate, including salaries and bonuses. We call this the "Operating Allocation." The portion of ~~the~~each Affiliate's revenue that is allocated to the owners of that Affiliate (including us) is called the "Owners' Allocation." Each Affiliate allocates its Owners' Allocation to its managers and to us generally in proportion to their and our respective ownership interests in that Affiliate. However, should actual operating expenses exceed the Operating Allocation, the excess expenses first reduce the portion of the Owners' Allocation allocated to the Affiliate's managers until that portion is eliminated, before reducing the portion allocated to us. Any such reduction in our portion of the Owners' Allocation is required to be paid back to us out of the portion of future Owners' Allocation allocated to the Affiliate's managers.

One of the purposes of our revenue sharing arrangements is to provide ongoing incentives for Affiliate managers by allowing them to participate in the growth of their firm's revenue, which may increase their compensation from both the Operating Allocation and the Owners' Allocation. These arrangements also provide incentives to control operating expenses, thereby increasing the portion of the Operating Allocation that is available for growth initiatives and compensation.

An Affiliate's Operating Allocation is structured to cover its operating expenses. However, should actual operating expenses exceed the Operating Allocation, our contractual share of cash under the Owners' Allocation generally has priority over the allocations and distributions to the Affiliate's managers. As a result, the excess expenses first reduce the portion of the Owners' Allocation allocated to the Affiliate's managers until that portion is eliminated, before reducing the portion allocated to us. Any such reduction in our portion of the Owners' Allocation is required to be paid back to us out of the portion of future Owners' Allocation allocated to the Affiliate's managers.

Our minority investments are also structured to align our interests with those of the Affiliate's management through shared equity ownership, as well as to preserve the Affiliate's entrepreneurial culture and independence by maintaining the Affiliate's operational autonomy. In cases where we hold a minority investment, the revenue sharing arrangement generally allocates a percentage of the Affiliate's revenue to us. The remaining revenue is used to pay operating expenses and profit distributions to the other owners. Generally where we own a minority investment, we are required to use the equity method of accounting. Consistent with this method, we have not consolidated the operating results of these firms (including their revenue) in our Consolidated Statements of Income. Our share of these firms' profits (net of intangible amortization) is reported in "Income from equity method investments," and is therefore reflected in our Net Income and EBITDA. As a consequence, increases or decreases in these firms' assets under management ($78.6 billion as of March 31, 2011 and included in our reported assets under management) will not affect reported revenue in the same manner as changes in assets under management at our other Affiliates.

Certain of our Affiliates operate under profit-based arrangements through which we own a majority of the equity in the firm and receive a share of profits as cash flow, rather than a percentage of revenue through a typical revenue sharing agreement. As a result, we participate fully in any increase or decrease in the revenue or expenses of such firms. In these cases, we participate in a budgeting process and generally provide incentives to management through compensation arrangements based on the performance of the Affiliate.

We are focused on establishing and maintaining long-term partnerships with our Affiliates. Our shared equity ownership gives both ~~AMG~~us and our ~~Affiliate partners~~Affiliates meaningful incentives to manage their businesses for strong future growth. From time to time, we may consider changes to the structure of our relationship with an Affiliate in order to better support the firm's growth strategy.

The table below summarizes our ~~affiliated investment management firms, we derive most~~financial highlights:

During the ~~provision~~twelve months ended March 31, 2011, global equity market returns continued to improve; the MSCI EAFE and S&P 500 realized increases of investment management services. Investment management fees ("asset-based fees") are usually determined as a percentage fee charged on periodic values of a client's assets under management; most asset-based advisory fees are billed by our Affiliates quarterly. Certain clients are billed for all or a portion of their accounts based upon10.9% and 15.7%, respectively. Our total assets under management ~~valued~~grew to $339.8 billion at ~~the beginning~~March 31, 2011, an increase of ~~a billing period ("~~approximately 46% over March 31, 2010. The growth in ~~advance"). Other clients are billed for all or a portion of their accounts based upon~~our assets under management ~~valued at~~was the ~~end~~result of the ~~billing period ("~~successful completion of new Affiliate investments in ~~arrears"). Most client accounts in the High Net Worth distribution channel are billed in advance,~~Aston Asset Management, Pantheon Ventures and most client accounts in the Institutional distribution channel are billed in arrears. Clients in the Mutual Fund distribution channel are billed based upon average daily assets under management. Advisory fees billed in advance will not reflect subsequent changes in the market value of assets under management for that period but may reflect changes due to client withdrawals. Conversely, advisory fees billed in arrears will reflect changes in the market value of assets under management for that period.

~~In addition, over 50 Affiliate alternative investment and equity products, representing approximately $32 billion of assets under management (as of June 30, 2010)~~Trilogy Global Advisors ($49.1 billion), ~~also bill on the basis of absolute or relative~~ investment performance ("performance fees"). These products, which are primarily in the Institutional distribution channel, are often structured to have returns that are not directly correlated to changes in broader equity indices($42.8 billion) and if earned, the performance fee component is typically billed less frequently than an asset-based fee. Although performance fees inherently depend on investment results and will vary from period to period, we anticipate performance fees to be a recurring component of our revenue. We also anticipate that, within any calendar year, the majority of any performance fees will typically be realized in the fourth quarter.

~~For certain~~organic growth of our Affiliates generally where we own a non-controlling interest, we are required to use the equity method of accounting. Consistent with this method, we have not consolidated the operating results of these firms (including their revenue) in our Consolidated Statements of Income. Our share of these firms' profits (net of intangible amortization) is reported in "Income from equity method investments," and is therefore reflected in our Net Income (controlling interest) and EBITDA. As a consequence, increases or decreases in these firms' assets under management (which totaled $55.4 billion as of June 30, 2010) will not affect reported revenue in the same manner as changes in assets under management at our other Affiliates.net client cash flows ($16.9 billion).

Our Net Income attributable to controlling interest reflects the revenue of our consolidated Affiliates and our share of income from Affiliates which we account for under the equity method, reduced by:

As discussed above, for consolidated Affiliates with revenue sharing arrangements, the operating expenses of the Affiliate as well as its managers' non-controlling interest generally increase (or decrease) as the Affiliate's revenue increases (or decreases) because of the direct relationship established in many of our agreements between the Affiliate's revenue and its Operating Allocation and Owners' Allocation. At our consolidated profit-based Affiliates, expenses may or may not correspond to increases or decreases in the Affiliates' revenues.

The following table provides information regarding the composition of our assets under management:

		Assets under Management				Assets under Management					December 31, 2010					March 31, 2011

		December 31, 2009				June 30, 2010
(in billions)	(in billions)									(in billions)	Assets under Management		Percentage of Total			Assets under Management		Percentage of Total
Asset Class:	Asset Class:									Asset Class:
Equity⁽¹⁾	Equity⁽¹⁾	$	153.2	74	%	$	159.3	64	%	Equity⁽¹⁾	$	220.4		69	%	$	232.1		68	%
Alternative⁽²⁾	Alternative⁽²⁾		31.3	15	%		59.7	24	%	Alternative⁽²⁾		65.3		20	%		71.9		21	%
Fixed Income	Fixed Income		23.5	11	%		30.0	12	%	Fixed Income		34.3		11	%		35.8		11	%

	Total	$	208.0	100	%	$	249.0	100	%	Total	$	320.0		100	%	$	339.8		100	%

Geography:⁽³⁾	Geography:⁽³⁾									Geography:⁽³⁾
Domestic	Domestic	$	89.7	43	%	$	97.8	39	%	Domestic	$	110.5		34	%	$	115.9		34	%
Global/International	Global/International		93.2	45	%		126.5	51	%	Global/International		169.1		53	%		180.7		53	%
Emerging Markets	Emerging Markets		25.1	12	%		24.7	10	%	Emerging Markets		40.4		13	%		43.2		13	%

	Total	$	208.0	100	%	$	249.0	100	%	Total	$	320.0		100	%	$	339.8		100	%

Our investments in Pantheon and Artemis (in the second and first quarters of 2010, respectively) further diversified our business by increasing our exposure to alternative product offerings that we anticipate will be uncorrelated to equity markets (in the case of Pantheon) and global/international product offerings (in the case of Pantheon and Artemis). Our investment in Pantheon also provides a

stable revenue stream because Pantheon charges management fees on the capital committed to its funds, not the value of the funds. Our investment in Aston which closed in the second quarter of 2010 increased our domestic equity product offerings.

~~In addition, positive investment returns during the six months ended June 30, 2010 in our alternative and fixed income asset classes increased~~ assets under management by asset class increased during the three months ended March 31, 2011 principally as a result of investment performance as well as organic growth from net client cash flows in ~~those strategies. Through positive investment returns, several~~our Alternative ($3.2 billion) and Equity asset classes ($2.5 billion). The geographic breakdown of our ~~Affiliates produced~~assets under management also benefitted from investment performance ~~fees~~and net client cash flows in ~~this period~~Global/International ($~~33.6 million included in our consolidated revenue)~~3.0 billion) and Emerging Markets ($2.5 billion).

The following table presents our Affiliates' reported assets under management by operating segment (which are also referred to as distribution channels in this Quarterly Report on Form 10-Q).

As shown in the assets under management table above, client cash inflows totaled ~~$24.8~~$21.4 billion while client cash outflows totaled ~~$25.5~~$14.9 billion for the ~~six~~three months ended ~~June 30, 2010. The net~~March 31, 2011. Client flows for the ~~six~~three months ended ~~June 30, 2010~~March 31, 2011 occurred across a broad range of product offerings in each of our distribution channels, with no individual cash inflow or outflow having a material impact on our revenue or expenses.

The operating segment analysis presented in the following table is based on average assets under management. For the Mutual Fund distribution channel, average assets under management ~~represent~~represents an average of the daily net assets under management. For the Institutional and High Net Worth distribution channels, average assets under management ~~takes into consideration~~reflects the billing patterns of

particular client accounts. For example, assets under management for an account that bills in advance is ~~included~~presented in the table ~~using~~on the basis of beginning of period assets under management while an account that bills in arrears ~~uses~~is reflected on the basis of end of period assets under management. We believe that this

analysis more closely correlates to the billing cycle of each distribution channel and, as such, provides a more meaningful relationship to revenue.

		For the Three Months Ended June 30,							For the Six Months Ended June 30,								For the Three Months Ended March 31,

(dollars in millions, except as noted)		2009		2010		% Change			2009		2010		% Change
(in millions, except as noted)																(in millions, except as noted)	2010		2011		% Change
Average assets under management (in billions)⁽¹⁾	Average assets under management (in billions)⁽¹⁾															Average assets under management (in billions)⁽¹⁾
Mutual Fund	Mutual Fund	$	33.8	$	63.8		89	%	$	33.1	$	55.5		68	%	Mutual Fund	$	47.2	$	87.1		85	%
Institutional	Institutional		105.1		134.4		28	%		106.6		136.3		28	%	Institutional		138.1		208.0		51	%
High Net Worth	High Net Worth		25.3		29.7		17	%		25.5		30.0		18	%	High Net Worth		30.3		35.8		18	%

	Total	$	164.2	$	227.9		39	%	$	165.2	$	221.8		34	%	Total	$	215.6	$	330.9		53	%

Revenue	Revenue															Revenue
Mutual Fund	Mutual Fund	$	72.3	$	148.0		105	%	$	140.7	$	245.9		75	%	Mutual Fund	$	97.9	$	184.2		88	%
Institutional	Institutional		101.5		152.3		50	%		183.7		274.1		49	%	Institutional		121.8		207.0		70	%
High Net Worth	High Net Worth		27.4		31.8		16	%		55.3		63.1		14	%	High Net Worth		31.3		35.1		12	%

	Total	$	201.2	$	332.1		65	%	$	379.7	$	583.1		54	%	Total	$	251.0	$	426.3		70	%

Net Income
Net Income (controlling interest)																Net Income (controlling interest)
Mutual Fund	Mutual Fund	$	6.0	$	10.3		72	%	$	10.6	$	17.8		68	%	Mutual Fund	$	7.6	$	16.6		118	%
Institutional	Institutional		4.2		12.3		193	%		5.5		20.0		264	%	Institutional		7.7		18.4		139	%
High Net Worth	High Net Worth		0.8		2.6		225	%		1.0		4.9		390	%	High Net Worth		2.2		4.1		86	%

	Total	$	11.0	$	25.2		129	%	$	17.1	$	42.7		150	%	Total	$	17.5	$	39.1		123	%
														��
EBITDA⁽²⁾	EBITDA⁽²⁾															EBITDA⁽²⁾
Mutual Fund	Mutual Fund	$	14.4	$	27.0		88	%	$	29.3	$	47.9		63	%	Mutual Fund	$	20.9	$	38.5		84	%
Institutional	Institutional		31.7		45.8		44	%		59.1		83.9		42	%	Institutional		38.1		68.9		81	%
High Net Worth	High Net Worth		7.1		8.9		25	%		14.0		18.2		30	%	High Net Worth		9.2		10.8		17	%

	Total	$	53.2	$	81.7		54	%	$	102.4	$	150.0		46	%	Total	$	68.2	$	118.2		73	%

Our revenue is generally determined by the level of our assets under management, the portion of our assets across our products and three operating segments, which realize different fee rates, and the

recognition of any performance fees. ~~As described in the "Overview" section above, performance~~Performance fees are generally measured on absolute or relative investment performance against a benchmark. As a result, the level of performance fees earned can vary significantly from period to period and these fees may not necessarily be correlated to changes in total assets under management.

Our total revenue increased ~~$130.9~~$175.3 million (or ~~65%~~70%) in the three months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three months ended ~~June 30, 2009,~~March 31, 2010, primarily from a ~~39%~~53% increase in average assets under ~~management. This~~management and our investments in new Affiliates that realize comparatively higher fee rates. The increase in average assets under management resulted principally from our new Affiliate investments, strong investment performance and ~~investment performance. Unrelated to the change~~positive net client cash flows. Performance fees were not a significant component of consolidated revenue in ~~assets under management, performance fees increased $21.2 million (or 221%) in~~either the three months ended ~~June 30, 2010, as compared to~~March 31, 2011 or the three months ended ~~June 30, 2009.~~

~~Our total~~March 31, 2010 (approximately 1% of consolidated revenue increased $203.4 million (or 54%) in the six months ended June 30, 2010, as compared to the six months ended June 30, 2009, primarily from a 34% increase in average assets under management. This increase in average assets under management resulted principally from our new Affiliate investments and investment performance. Unrelated to the change in assets under management, performance fees increased $22.0 million (or 191%) in the six months ended June 30, 2010, as compared to the six months ended June 30, 2009.for both time periods).

Our revenue in the Mutual Fund distribution channel increased ~~$75.7~~$86.3 million (or ~~105%~~88%) in the three months ended ~~June 30, 2010~~March 31, 2011, as compared to the three months ended ~~June 30, 2009, while~~March 31, 2010, primarily from a 85% increase in average assets under management increased 89%, and revenue increased $105.2 million (or 75%) in the six months ended June 30, 2010 as compared to the six months ended June 30, 2009, while average assets under management increased 68%. These increasesmanagement. The increase in average assets under management resulted principally from our new Affiliate investments, strong investment performance and ~~our 2009 and 2010 investments in new Affiliates.~~positive net client cash flows.

Our revenue in the Institutional distribution channel increased ~~$50.8~~$85.2 million (or ~~50%~~70%) in the three months ended ~~June 30, 2010~~March 31, 2011, as compared to the three months ended ~~June 30, 2009, while~~March 31, 2010, primarily from a 51% increase in average assets under management ~~increased 28%,~~ and ~~revenue increased $90.4 million (or 49%)~~our investments in ~~the six months ended June 30, 2010 as compared to the six months ended June 30, 2009, while average assets under management increased 28%. These increases~~new Affiliates that realize comparatively higher fee rates. The increase in average assets under management resulted principally from our new Affiliate investments, strong investment performance ~~partially offset by negative~~and positive net client cash flows. ~~Unrelated to the change~~Performance fees were not a significant component of consolidated revenue in ~~assets under management, performance fees increased $21.7 million (or 235%) in~~either the three months ended ~~June 30, 2010, as compared to~~March 31, 2011 or the three months ended ~~June 30, 2009, and increased $22.8 (or 210%) in the six months ended June 30, 2010. The increase in~~March 31, 2010 (approximately 2% of consolidated revenue ~~was proportionately greater than the increase in average assets under management as a result of an increase in assets under management at Affiliates that realize comparatively higher fee rates.~~for both time periods).

Our revenue in the High Net Worth distribution channel increased ~~$4.4~~$3.8 million (or ~~16%~~12%) in the three months ended ~~June 30, 2010~~March 31, 2011, as compared to the three months ended ~~June 30, 2009, while~~March 31, 2010, primarily from a 18% increase in average assets under management increased 17%, and revenue increased $7.8 million (or 14%) in the six months ended June 30, 2010 as compared to the six months ended June 30, 2009, while average assets under management increased 18%. These increasesmanagement. The increase in average assets under management resulted principally from investment performance.

	For the Three Months Ended June 30,							For the Six Months Ended June 30,							For the Three Months Ended March 31,

(dollars in millions)	2009		2010		% Change			2009		2010		% Change
(in millions)															2010		2011		% Change
Compensation and related expenses	$	103.4	$	142.7		38	%	$	187.5	$	261.9		40	%	$	119.2	$	179.5		51	%
Selling, general and administrative		31.0		72.1		133	%		62.4		117.4		88	%		45.3		87.5		93	%
Amortization of intangible assets		8.1		9.6		19	%		16.1		18.5		15	%		8.9		22.1		148	%
Depreciation and other amortization		3.2		3.4		6	%		6.5		6.4		(2	)%		3.0		3.8		27	%
Other operating expenses		4.7		8.4		79	%		10.5		14.5		38	%		6.1		8.5		39	%

Total operating expenses	$	150.4	$	236.2		57	%	$	283.0	$	418.7		48	%	$	182.5	$	301.4		65	%

The substantial portion of our operating expenses is incurred by our Affiliates, the majority of which is incurred by Affiliates with revenue sharing arrangements. For Affiliates with revenue sharing arrangements, an Affiliate's Operating Allocation percentage generally determines its operating expenses. Accordingly, our compensation expense is impacted by increases or decreases in each Affiliate's revenue and the corresponding increases or decreases in each Affiliate's respective Operating Allocation. During the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, approximately ~~$69.6 million and $125.6~~$91.4 million (or ~~49% and 48%~~51%)~~, respectively,~~ of our consolidated compensation expense was attributable to our Affiliate management partners. The percentage of revenue allocated to operating expenses varies from one Affiliate to another and may also vary within an Affiliate depending on the source or amount of revenue. As a result, changes in our aggregate revenue may not impact our consolidated operating expenses to the same degree.

Compensation and related expenses increased ~~38% and 40%~~51% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively,~~March 31, 2010, primarily as a result of increases in aggregate Affiliate expenses of $37.9 million from new Affiliate investments during 2010, and $13.3 million from the relationship between revenue and operating expenses at extant Affiliates, which experienced increases in revenue, and accordingly, reported higher compensation expenses. ~~These increases were~~This increase was also attributable to increases in aggregate Affiliate expenses of $16.1 million and $21.2 million in the three and six months ended June 30, 2010 from new Affiliate investments, as compared to the three and six months ended June 30, 2009, respectively, as well as increases in holding company incentive and ~~stock-based compensation of $8.6 million~~share-based compensation.

Selling, general and ~~$13.5 million~~administrative increased 93% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended June 30, 2009, respectively. These increases were partially offset by decreases in aggregate Affiliate expenses from the transfer of our interests in certain Affiliates of $2.1 million and $2.6 million in the three and six months ended June 30, 2010, as compared to the three and six months ended June 30, 2009, respectively.

Selling, general and administrative expenses increased 133% and 88% in the three and six months ended June 30, 2010, as compared to the three and six months ended June 30, 2009, respectively. These increasesMarch 31, 2010. This increase resulted principally from increases in aggregate Affiliate expenses of ~~$32.4 million and $41.0~~$27.9 million from new Affiliate investments as well as increases in sub-advisory and distribution expenses attributable to an increase in assets under management at our Affiliates in the ~~three and six months ended June 30, 2010, as compared to the three and six months ended June 30, 2009, respectively.~~Mutual Fund distribution channel. These increases ~~also resulted from increases~~were partially offset by a $4.5 million decrease in acquisition-related professional fees principally related to recent investment closings of $5.5 million and $9.9 million in the three and six months ended June 30, 2010 as compared to the three and six months ended June 30, 2009, respectively.fees.

Amortization of intangible assets increased ~~19% and 15%~~148% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively. These increases were~~March 31, 2010. This increase was principally attributable to increases in definite-lived intangible assets resulting from new Affiliate investments.

Depreciation and other amortization increased 6%27% in the three months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three months ended ~~June 30, 2009,~~March 31, 2010, principally attributable to a $0.3 million increase in aggregate Affiliate expenses from new Affiliate investments, partially offset by a decrease in spending on depreciable assets in recent periods. Depreciation and other amortization decreased 2% in the six months ended June 30, 2010, as compared to the six months ended June 30, 2009, principally attributable to a decrease in spending on depreciable assets in recent periods, partially offset by an increase ~~of $0.4 million~~ in aggregate Affiliate expenses from new Affiliate investments.

Other operating expenses increased ~~79% and 38%~~39% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively,~~March 31, 2010, principally attributable to ~~a loss realized on the transfer of Affiliate interests in the second quarter of 2010, as well as increases~~an increase in aggregate Affiliate expenses ~~of $1.0 million and $1.2 million~~ from new Affiliate ~~investments in the three and six months ended June 30, 2010, as compared to the three and six months ended June 30, 2009, respectively.~~investments.

	For the Three Months Ended June 30,								For the Six Months Ended June 30,								For the Three Months Ended March 31,

(dollars in millions)	2009		2010			% Change			2009		2010			% Change
(in millions)																	2010		2011		% Change
Income from equity method investments	$	7.4	$	9.9			34	%	$	13.8	$	19.0			38	%	$	9.1	$	10.2		12	%
Investment and other income		7.2		0.7			(90	)%		6.9		3.5			(49	)%		2.8		8.7		211	%
Investment income (loss) from investments in partnerships		14.9		(8.6	)		(158	)%		11.2		(4.5	)		(140	)%
Investment income from investments in partnerships																		4.1		—		(100	)%
Interest expense		15.8		16.3			3	%		32.4		32.4			0	%		16.0		19.4		21	%
Imputed interest expense		3.4		6.4			88	%		6.7		10.1			51	%		3.8		8.3		118	%
Income tax expense		4.9		16.9			245	%		9.9		28.9			192	%		11.9		26.7		124	%

Income from equity method investments consists of our share of income from Affiliates that are accounted for under the equity method of accounting, net of any related intangible amortization. Income from equity method investments increased ~~34% and 38%~~12% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively,~~March 31, 2010, principally as a result of increases in assets under management at Affiliates that we account for under the equity method of accounting. For the quarter ended March 31, 2011, income from performance fees earned on our equity method investments ($13.5 million of revenue) was consistent with amounts reported in the quarter ended March 31, 2010.

Investment and other income ~~decreased 90% and 49%~~increased 211% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively,~~March 31, 2010, principally as a result of ~~a decrease~~an increase in Affiliate investment ~~earnings.~~earnings, including $4.2 million from new Affiliates.

Investment income ~~(loss)~~ from ~~Affiliate~~ investments in partnerships relates to the consolidation of certain investment partnerships in which our Affiliates are the general partner. In the third quarter of 2010, we deconsolidated these partnerships. For the three months ended ~~June 30, 2009 and~~March 31, 2010, the income ~~(loss)~~ from ~~Affiliate~~ investments in partnerships was ~~$14.9~~$4.1 million, and $(8.6) million, respectively. For the six months ended June 30, 2009 and 2010, the income (loss) from Affiliate investments in partnerships was $11.2 million and $(4.5) million, respectively. This income (loss)which was principally attributable to investors who are unrelated to us.

Interest expense increased ~~slightly~~21% in the three months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three months ended ~~June 30, 2009,~~March 31, 2010, principally as a result of increased borrowings under our revolving credit facility, which was amended and restated in January 2011 (the "credit facility"), as well as an increase in the cost of ~~our senior bank debt, which resulted from an~~credit facility borrowings. The increase was also attributable to a $0.8 million increase in ~~borrowings. Interest expense was flat in the six months ended June 30, 2010, as compared~~issuance costs related to ~~the six months ended June 30, 2009.~~our credit facility amendment.

Imputed interest expense consists of interest accretion on our senior convertible securities and our junior convertible trust preferred securities as well as the accretion of our projected contingent payment arrangements. Imputed interest expense increased ~~88% and 51%~~118% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively,~~March 31, 2010, principally as a result of a ~~$2.6~~$4.2 million increase in accretion related to our contingent payment arrangements ~~as well as increases in the interest accretion on our convertible securities.~~

~~Income taxes increased 245% and 192%~~ in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009, respectively, primarily~~March 31, 2010.

Income taxes increased 124% in the three months ended March 31, 2011, as compared to the three months ended March 31, 2010, as the result of increases in Income before income taxes and approximately $1.1 million of taxes attributable to ~~controlling~~non-controlling interests ~~and a one-time $3.0 million benefit in 2009~~ from ~~the reversal of a valuation allowance on Massachusetts net operating losses.~~our 2010 new Affiliate investments.

	For the Three Months Ended June 30,								For the Six Months Ended June 30,								For the Three Months Ended March 31,

(dollars in millions)	2009		2010			% Change			2009		2010			% Change
(in millions)																	2010		2011		% Change
Net income																	$	52.8	$	89.4		69	%
Net income (non-controlling interests)	$	30.7	$	41.4			35	%	$	51.5	$	72.7			41	%		31.3		50.3		61	%
Net income (loss) (non-controlling interests in partnerships)		14.6		(8.4	)		(158	)%		10.8		(4.4	)		(141	)%
Net income (non-controlling interests in partnerships)																		4.0		—		(100	)%
Net Income (controlling interest)		11.0		25.2			129	%		17.1		42.7			150	%		17.5		39.1		123	%

Net income attributable to non-controlling interests increased ~~35% and 41%~~61% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, principally as a result of the previously discussed changes in revenue partially offset by the previously discussed ~~decreases~~increases in ~~investment and other income.~~tax expenses.

Net income ~~(loss)~~ (non-controlling interest in partnerships) relates to the consolidation of certain investment partnerships in which our Affiliates are the general partner. In the third quarter of 2010, we deconsolidated these partnerships. For the three months ended ~~June 30, 2009 and~~March 31, 2010, the ~~net~~ income ~~(loss)~~ from ~~Affiliate investment~~investments in partnerships ~~attributable to the non-controlling interests~~ was $14.6 million and $(8.4) million, respectively. For the six months ended June 30, 2009 and 2010, the net income (loss) from Affiliate investment partnerships attributable to the non-controlling interests was $10.8 million and $(4.4) million, respectively.$4.0 million.

Net Income (controlling interest) increased ~~129% and 150%~~123% in the three ~~and six~~ months ended ~~June 30, 2010,~~March 31, 2011, as compared to the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, respectively, as a result of the previously discussed increases in revenue, partially offset by increases in reported operating and income tax expenses.

~~In reporting our financial and operating results during the second quarter,~~As supplemental information, we ~~renamed our~~provide non-GAAP performance measures that we refer to as Economic Net Income and Economic earnings per ~~share (formerly known as Cash Net Income and Cash earnings per share).~~share. We consider Economic Net Income an important measure of our financial performance, as we believe it best represents our operating performance before non-cash expenses relating to our acquisition of interests in our investment management firms. Economic Net Income and Economic earnings per share are used by our management and Board of Directors as our principal performance benchmarks, including as measures for aligning executive compensation with stockholder value. These measures are provided in addition to, but not as a substitute for, Net Income (controlling interest) and Earnings per share. Economic Net Income and Economic earnings per share are not liquidity measures and should not be used in place of any liquidity measure calculated under GAAP. ~~These measures facilitate comparisons to other asset management firms that have not engaged in significant acquisitions or issued convertible debt.~~

Under our Economic Net Income definition, we add to Net Income (controlling interest) amortization (including equity method amortization), deferred taxes related to intangible assets, ~~Affiliate depreciation~~non-cash imputed interest expense (principally related to the accounting for convertible securities and contingent payment arrangements) and Affiliate equity ~~expense, and exclude the non-cash effect of APB 14-1 (principally imputed interest on convertible securities) and non-cash expenses related to contingent payment arrangements.~~expense. We add back amortization attributable to acquired client relationships because this expense does not correspond to the changes in value of these assets, which do not diminish predictably over time. The portion of deferred taxes generally attributable to intangible assets (including goodwill) that we no longer amortize but which continues to generate tax deductions is added back, because we believe it is unlikely these accruals will be used to settle material tax obligations. Since our acquired assets do not generally depreciate or require replacement by us, and since they generate deferred tax expenses that are unlikely to reverse, we add back these non-cash expenses to Net Income to measure operating performance. We add back non-cash expenses relating to certain transfers of equity between Affiliate management partners, when these transfers have no dilutive effect to our shareholders. We add back the portion of consolidated depreciation expense incurred by our Affiliates because under our Affiliates' operating agreements we are generally not required to replenish these depreciating assets.

Economic earnings per share represents Economic Net Income divided by the adjusted diluted average shares outstanding, which measures the potential share issuance from our senior convertible

securities and junior convertible securities (each further described in Liquidity and Capital Resources) using a "treasury stock" method. Under this method, only the net number of shares of common stock equal to the value of these securities in excess of par, if any, are deemed to be outstanding. We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in available capital resources (which could be used to repurchase shares of common stock) that occurs when these securities are converted and we are relieved of our debt obligation. This method does not take into account any increase or decrease in our cost of capital in an assumed conversion.

In ~~connection with recent investments in Affiliates, in~~ the ~~first~~fourth quarter of 2010, we modified our Economic Net Income definition to ~~exclude non-cash imputed interest and revaluation adjustments related~~no longer add back Affiliate depreciation to ~~contingent payment arrangements from~~ Net Income (controlling interest). ~~The modification of~~If we had applied this definition change to the three months ended March 31, 2010, Economic Net Income ~~definition did not~~would have ~~an impact on the prior periods reported.~~been $48.9 million and Economic earnings per share would have been $1.09, as compared to $50.8 million and $1.14, respectively.

The following table provides a reconciliation of Net Income (controlling interest) to Economic Net Income:

Economic Net Income increased ~~50% and 43%~~68% in the three ~~and six~~ months ended ~~June 30, 2010~~March 31, 2011 as compared to the three ~~and six~~ months ended ~~June 30, 2009,~~March 31, 2010, primarily as a result of the ~~previously-described~~previously described factors that caused an increase in Net Income as well as increases in amortization and intangible-related deferred tax expenses.

The following table summarizes certain key financial data relating to our liquidity and capital resources:

(in millions)	December 31, 2009		June 30, 2010		December 31, 2010		March 31, 2011

Balance Sheet Data
Cash and cash equivalents	$	259.5	$	220.5	$	313.3	$	252.8
Senior bank debt		—		659.5		460.0		340.0
2008 senior convertible notes		409.6		415.9		422.1		425.5
Zero coupon convertible notes		47.4		—
Junior convertible trust preferred securities		507.4		508.6		509.9		510.5

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended March 31,

	2009			2010			2009			2010			2010			2011
Cash Flow Data
Operating cash flow	$	72.2		$	115.1		$	87.9		$	183.1		$	68.0		$	130.2
Investing cash flow		(5.0	)		(682.9	)		(8.7	)		(814.8	)		(131.9	)		(12.1	)
Financing cash flow		(31.6	)		586.3			(202.4	)		593.8			7.6			(180.8	)
EBITDA⁽¹⁾		53.2			81.7			102.4			150.0			68.2			118.2

We view our ratio of debt to EBITDA (our "internal leverage ratio") as an important gauge of our ability to service debt, make new investments and access additional capital. Consistent with industry practice, we do not consider junior trust preferred securities as debt for the purpose of determining our internal leverage ratio. We also view our leverage on a "net debt" basis by deducting from our debt balance holding company ~~cash (including prospective proceeds from the settlement of our forward equity sale agreements).~~cash. At ~~June 30, 2010,~~March 31, 2011, our internal leverage ratio was ~~2.2:~~1.4:1.

Under the terms of our credit facility we are required to meet two financial ratio covenants. The first of these covenants is a maximum ratio of debt to EBITDA (the "bank leverage ratio") of 3.5. The calculation of our bank leverage ratio is generally consistent with our internal leverage ratio approach. The second covenant is a minimum EBITDA to cash interest expense ratio of 3.0 (our "bank interest coverage ratio"). For the purposes of calculating these ratios, share-based compensation expense is added back to EBITDA. As of ~~June 30, 2010,~~March 31, 2011, our actual bank leverage and bank interest coverage ratios were ~~2.7~~1.7 and ~~5.7,~~8.0, respectively, and we were in full compliance with all terms of our credit facility. Following the July 2 settlement of the outstanding forward equity sales and the use of these funds to pay down senior bank debt, our pro forma bank leverage ratio was 2.3. Following this repayment, weWe have ~~$305.2~~$410 million of remaining capacity under our ~~$770~~$750 million credit facility ~~of which~~and we could borrow ~~a total of $305.2 million without violating~~the entire amount and remain in compliance with our credit ~~facility covenants.~~agreement.

We are rated BBB- by both Standard & ~~Poor's. A~~Poor's and Fitch rating agencies. With the exception of a modest increase in the borrowing rate under our credit facility (0.50%), a downgrade of our credit rating ~~either as a result of industry or company-specific considerations,~~ would ~~not~~ have ~~a material~~no direct financial effect on any of our agreements or securities (or otherwise trigger a default).

As supplemental information in this Quarterly Report on Form 10-Q, we have provided information regarding our EBITDA, a non-GAAP liquidity measure. This measure is provided in

addition to, but not as a substitute for, cash flow from operations. EBITDA represents earnings before

interest expense, income taxes, depreciation and amortization. EBITDA, as calculated by us, may not be consistent with computations of EBITDA by other companies. As a measure of liquidity, we believe that EBITDA is useful as an indicator of our ability to service debt, make new investments and meet working capital requirements. We further believe that many investors use this information when analyzing the financial position of companies in the investment management industry.

The following table provides a reconciliation of cash flow from operations to EBITDA:

			For the Three Months Ended June 30,						For the Six Months Ended June 30,							For the Three Months Ended March 31,

(in millions)	(in millions)		2009			2010			2009			2010			(in millions)	2010			2011
Cash flow from operations	Cash flow from operations		$	72.2		$	115.1		$	87.9		$	183.1		Cash flow from operations	$	68.0		$	130.2
	Interest expense, net of non-cash items⁽¹⁾			13.9			14.4			28.7			28.6		Interest expense, net of non-cash items⁽¹⁾		14.2			16.8
	Current tax provision			(1.1	)		5.3			(9.2	)		7.9		Current tax provision		2.5			13.5
	Income from equity method investments, net of distributions⁽²⁾			5.4			4.4			0.8			(1.6	)	Income from equity method investments, net of distributions⁽²⁾		(6.0	)		(46.4	)
	Changes in assets and liabilities														Net income (non-controlling interests)		(31.3	)		(50.3	)
		and other adjustments⁽³⁾		(37.2	)		(57.5	)		(5.8	)		(68.0	)	Net income (non-controlling interests in partnerships)		(4.0	)		—
															Changes in assets and liabilities		28.3			65.1
															Other non-cash adjustments⁽³⁾		(3.5	)		(10.7	)

EBITDA	EBITDA		$	53.2		$	81.7		$	102.4		$	150.0		EBITDA	$	68.2		$	118.2

In the ~~six~~three months ended ~~June 30, 2010,~~March 31, 2011, we met our ~~operating~~ cash requirements primarily through cash generated by operating activities. Our principal uses of cash in the three ~~and six~~ months ended ~~June 30, 2010~~March 31, 2011 were to make distributions to Affiliate managers and repay our senior bank debt. We expect that our principal uses of cash for the foreseeable future will be for investments in new and existing Affiliates, distributions to Affiliate managers, payment of principal and interest on outstanding debt, ~~the repurchase of debt securities, and the repurchase of shares of our common stock~~ and for working capital purposes.

The following table summarizes the principal amount due at maturity of our debt obligations and convertible securities as of ~~June 30, 2010:~~March 31, 2011:

(in millions)	Amount					Amount			Form of Repayment

Senior Bank Debt	$	465.0	⁽¹⁾	2012	⁽²⁾	$	340.0	2015	⁽¹⁾
2008 Senior Convertibles Notes		460.0		2038	⁽³⁾		460.0	2038	⁽²⁾
Junior Convertible Trust Preferred Securities		730.8		2036/2037	⁽⁴⁾		730.8	2036/2037	⁽³⁾

~~We have a $770 million revolving~~Under the credit facility, ~~(the "Revolver") under which~~ we pay interest ~~at specified rates (based either~~based on ~~the~~a LIBOR rate or the prime rate ~~as in effect from time to time) that vary~~(plus an applicable spread, which varies depending on our credit ~~rating.~~rating). Subject to the agreement of lenders to provide additional commitments, we have the option to increase the ~~Revolver~~credit facility by up to ~~$175~~$150 million. The ~~Revolver~~credit facility is unsecured and contains financial covenants with respect to leverage and interest coverage and customary affirmative and negative covenants, including limitations on indebtedness, liens, cash dividends and fundamental corporate changes. ~~Borrowings under the Revolver are collateralized by pledges of the substantial majority of our capital stock or other equity interests owned by us.~~ As of ~~June 30, 2010,~~March 31, 2011, we had ~~$660~~$340 million outstanding under the Revolver; and, on July 2, 2010 used the net proceeds from the settlement of sales under our forward equity program to pay down the balance outstanding under the Revolver to approximately $465 million.credit facility.

WeAt March 31, 2011, we have one senior convertible security outstanding ~~at June 30, 2010. The principal terms of these notes are summarized below.~~

The 2008 convertible notes are convertible into a defined number of shares of our common stock upon the occurrence of certain events. Upon conversion, we may elect to pay or deliver cash, shares of common stock, or some combination thereof. The holders of the 2008 convertible notes may put these securities to us in August of 2013, 2018, 2023, 2028 and 2033. We may call the notes for cash at any time on or after August 15, 2013.

~~In the second quarter of 2010, we called our Zero Coupon Senior Convertible Notes due May 7, 2021 ("zero coupon~~ senior convertible notes") for redemption at their principal amount plus any original issue discount accrued thereon. In lieu of redemption, all of the holders elected to convert their zero coupon senior convertible notes into shares of our common stock. We issued 873,626 shares of common stock to settle these conversions. All of our zero coupon senior convertible notes have been cancelled and ~~retired as of June 14, 2010.~~

~~We have~~ two junior convertible trust preferred securities outstanding, ~~at June 30, 2010,~~ one issued in 2006 (the "2006 junior convertible trust preferred securities") and a second issued in 2007 (the "2007 junior convertible trust preferred securities").) The principal terms of these securities are summarized below.

					2008 Senior Convertible Notes		2007 Junior Convertible Trust Preferred Securities		2006 Junior Convertible Trust Preferred Securities

Issue Date	April 2006		October 2007		August 2008		October 2007		April 2006
Maturity Date	April 2036		October 2037		August 2038		October 2037		April 2036
Next Potential Put Date					August 2013		N/A		N/A
Par Value	$300.0		$430.8		$460.0		$430.8		$300.0
Carrying Value	213.0	⁽¹⁾	295.6	⁽²⁾
Carrying Value⁽¹⁾					425.5		296.6		213.9
Note Denomination	50		50		1,000		50		50
Current Conversion Rate	0.333		0.250		7.959		0.250		0.333
Current Conversion Price	150.00		200.00		$125.65		$200.00		$150.00
Stated Coupon	5.10	%	5.15	%	3.95	%	5.15	%	5.10	%
Tax Deduction Rate	7.50%	⁽³⁾	8.00%	⁽³⁾
Coupon Frequency					Semi-annually		Quarterly		Quarterly
Tax Deduction Rate⁽²⁾					9.38	%	8.00	%	7.50	%

From time to time, we seek to offset our exposure to changing interest rates under our debt financing arrangements by entering into interest rate hedging contracts. These instruments are designated as cash flow hedges with changes in fair value recorded in other comprehensive income for the ~~2006~~effective portion of the hedge.

We have entered into interest rate swap contracts to exchange a fixed rate for the variable rate on our credit facility. These contracts expire between 2015 and ~~2007 junior convertible trust preferred securities are convertible, at any time, into~~2017. Under these contracts, we will pay a ~~defined number~~weighted average fixed rate of ~~shares. Upon conversion, holders~~1.76% on a notional amount of $100.0 million through October 2015. Thereafter, through October 2017, we will ~~receive cash or shares~~pay a weighted average fixed rate of ~~our common stock, or~~2.14% on a ~~combination thereof. We can call~~remaining notional amount of $25 million. As of March 31, 2011, the ~~2006 junior convertible trust preferred securities~~unrealized gain on ~~or after April 2011 if the closing price of our common stock exceeds $195 per share for a specified period of time.~~these contracts was $3.0 million.

We ~~can call the 2007 junior convertible trust preferred securities on or after October 2012 if the closing price~~also entered into treasury rate lock agreements with a notional value of ~~our common stock exceeds $260 per share~~$100.0 million to hedge an anticipated issuance of fixed-rate debt. These contracts were settled in February 2011 for a ~~specified period~~net pre-tax gain of ~~time. Holders of the 2006 and 2007 junior trust preferred securities have no rights to put these securities to us.~~$4.0 million.

~~We have~~During 2009, we entered into ~~three~~a forward equity sale ~~agreements~~agreement with a major securities ~~firms~~firm to sell shares of our common stock, ~~(up to $200 million under each agreement). Under the terms~~and extended this agreement in April 2011. As of ~~these agreements, we can settle forward sales at any time prior to December~~March 31, 2010 by issuing shares in exchange for cash. Alternatively, we may choose to settle forward sales on a net stock or cash basis. Through June 30, 2010, we have completed $496.5 million of forward sales. In March 2009, we settled $147.2 million of2011, no forward equity sales ~~by issuing 1.8 million shares of our common stock. In May 2010, we settled $46.6 million of forward equity sales by issuing 0.5 million shares of our common stock. In~~

June 2010, we settled $102.0 million of forward equity sales by issuing 1.8 million shares of our common stock. In July 2010, we settled the remaining $200.7 million of outstanding forward equity sales through the issuance of 3.2 million shares of our common stock.are outstanding. We ~~have the additional capacity to~~may sell up to an additional $103.5 million under ~~an agreement entered into in July 2009.~~this agreement.

~~In the second quarter of 2010, we did not purchase any shares of common stock under our share repurchase programs. In July 2010, our~~Our Board of Directors has authorized ~~an additional 500,000 shares of common stock for repurchase under our~~ share repurchase ~~programs. There are currently 1,584,706~~programs in recent periods. The maximum number of shares that ~~could~~may yet be ~~purchased~~repurchased under outstanding programs is approximately 1.6 million. The timing and amount of issuances and repurchases are determined at the discretion of our ~~share repurchase program.~~management.

Many of our operating agreements provide ~~Affiliate managers~~us a conditional right to ~~require us~~call and Affiliate partners the conditional right to ~~purchase~~put their retained equity interests at certain intervals. Certain agreements also provide us a conditional right to require Affiliate managers to sell their retained equity interests to us upon their death, permanent incapacity or termination of employment and provide Affiliate managers a conditional right to require us to purchase such retained equity interests upon the occurrence of specified events. The purchase price of these conditional purchases are generally calculated based upon a multiple of the Affiliate's cash flow distributions, which is intended to represent fair value. Affiliate management partners are also permitted to sell their equity interests to other individuals or entities in certain cases, subject to our approval or other restrictions.

We may pay for Affiliate equity purchases in cash, shares of our common stock or other forms of consideration and can consent to the transfer of these interests to other individuals or entities.

Our ~~cumulative~~current redemption ~~obligation~~value for these interests has been presented as "Redeemable non-controlling interests" on our Consolidated Balance Sheets. Although the timing and amounts of these purchases are difficult to predict, we expect to repurchase approximately $100 million of Affiliate equity during the next twelve months, and, in such event, will own the cash flow associated with any equity repurchased.

Cash flow from operations generally represents Net Income plus non-cash charges for amortization, deferred taxes, equity-based compensation and depreciation, as well as increases and decreases in our consolidated working capital.

The increase in cash flows from operations for the ~~six~~three months ended ~~June 30, 2010~~March 31, 2011 as compared to the ~~six~~three months ended ~~June 30, 2009,~~March 31, 2010, resulted principally from ~~increased~~an increase in Net Income of ~~$31.5~~$36.6 million, an increase in distributions from equity method investments of $41.7 million and a decrease in ~~settlements~~collection of ~~accounts payable and accrued liabilities~~unsettled shares receivable of ~~$48.0 million and purchases of prepaids and other current assets of $29.0~~$38.0 million, partially offset by a decrease in ~~collections~~payments of ~~investment advisory fees receivable~~unsettled shares payable of ~~$43.2 million.~~

~~We consolidated $93.8~~$53.9 million and ~~$89.6 million~~an increase in accounts payable and accrued liabilities of client assets held in partnerships controlled by our Affiliates as of December 31, 2009 and June 30, 2010, respectively. Sales of $0.3 million increased operating cash flow in the six months ended June 30, 2009. Purchases of $0.5 million decreased operating cash flow in the six months ended June 30, 2010.$19.5 million.

The net cash flow used in investing activities ~~increased $806.1~~decreased $119.8 million for the ~~six~~three months ended ~~June 30, 2010~~March 31, 2011 as compared to the ~~six~~three months ended ~~June 30, 2009.~~March 31, 2010. This was primarily the result of ~~an increase of $791.6~~a $114.4 million ~~relating to our~~decrease in cash flow used for new Affiliate investments in ~~Pantheon and Aston during the second quarter of~~2011, as compared to 2010.

Net cash flows ~~from~~used in financing activities increased ~~$796.1~~$188.4 million for the ~~six~~three months ended ~~June 30, 2010,~~March 31, 2011, as compared to the ~~six~~three months ended ~~June 30, 2009.~~March 31, 2010. This was primarily a result of ~~an increase in~~repayments of the credit facility for the three months ended March 31, 2011 (as compared to net borrowings ~~of senior bank debt of $893.0 million,~~for the three months ended March 31, 2010), partially offset by ~~an increase~~a decrease in repurchases of Affiliate equity of $76.7 million. In addition, we received $144.3 million and $100.0 million of proceeds from the settlement of forward equity sales in the six months ended June 30, 2009 and June 30, 2010, respectively. In July 2010, we settled our remaining forward sales with the issuance of 3.2 million shares for $194.7$94.8 million.

~~Our investment in Artemis was financed through borrowings under our Revolver, and our investment in Aston was financed through~~In the ~~issuance~~second quarter of 2011, we will make a payment of approximately ~~1.7~~$63.8 million ~~shares of~~representing the deferred purchase price from our ~~common stock. Our investment in~~ Pantheon ~~was financed with borrowings under our Revolver and proceeds from the partial settlement of forward equity sales.~~

~~Under past acquisition agreements, we~~Ventures acquisition. We are also contingently liable, upon achievement of specified financial targets, to make payments of up to ~~$601~~$496.5 million through ~~2015.~~2015 under past acquisition agreements. In ~~the remainder of 2010,~~2011, we ~~do not~~ expect to make ~~any significant~~total payments of approximately $1.4 million to settle portions of these contingent ~~obligations.~~obligations and we expect to repurchase about $100.0 million of interests in certain existing Affiliates in 2011.

~~Proceeds available~~We anticipate that borrowings under ~~our Revolver are~~the credit facility and proceeds from the settlement of any forward equity sales, together with cash flows from operations will be sufficient to support our cash flow needs for the foreseeable future.

The following table summarizes our contractual obligations as of ~~June 30, 2010:~~March 31, 2011:

			Payments Due										Payments Due

													Remainder of 2011
(in millions)											Total				2012-2013		2014-2015		Thereafter
Contractual Obligations	Total		Remainder of 2010		2011-2012		2013-2014		Thereafter		Total				2012-2013		2014-2015		Thereafter		Remainder of 2011
(in millions)
Senior bank debt	$	659.5	$	—	$	659.5	$	—	$	—	$	340.0	$	—	$	340.0	$	—	$	—
Senior convertible securities⁽¹⁾		977.8		9.1		36.3		36.3		896.1		959.6		9.1		36.3		36.3		877.9
Junior convertible trust preferred securities⁽²⁾		1,717.9		18.5		74.1		74.1		1,551.2
Junior convertible trust preferred securities												1,690.2		27.8		74.1		74.1		1,514.2
Leases		82.4		10.6		33.8		23.8		14.2		123.8		18.4		42.5		32.0		30.9
Other liabilities⁽³⁾		155.6		21.6		134.0		—		—
Other liabilities⁽²⁾												122.0		80.5		—		—		41.5

Total Contractual Obligations	$	3,593.2	$	59.8	$	937.7	$	134.2	$	2,461.5	$	3,235.6	$	135.8	$	492.9	$	142.4	$	2,464.5

Contingent Obligations
Contingent payment obligations⁽⁴⁾	$	106.6	$	—	$	80.3	$	24.2	$	2.1
Contingent payment obligations⁽³⁾											$	128.8	$	1.4	$	93.9	$	33.5	$	—

During the first quarter of 2010, we adopted a new standard that requires an enterprise to perform a qualitative analysis to determine whether its variable interests give it a controlling financial interest in a variable interest entity ("VIE"). Under the standard, an enterprise has a controlling financial interest when it has (a) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. An enterprise that holds a controlling financial interest is deemed to be the primary beneficiary and is required to consolidate the VIE. This new standard has been deferred for certain entities that utilize the specialized accounting guidance for investment companies or that have the attributes of investment companies. The adoption of the portions of this new standard that were not deferred did not have a material impact on our Consolidated Financial Statements.

During the first quarter of 2010, we adopted a new standard that eliminated the concept of a qualifying special-purpose entity ("QSPE"), changed the requirements for derecognizing financial assets, and required additional disclosures to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including an entity's continuing involvement in and exposure to the risks related to transferred financial assets. The standard also clarified the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. The adoption of this new standard did not have a material impact on our Consolidated Financial Statements.

There have been no significant changes to our Quantitative and Qualitative Disclosures About Market Risk in the three ~~and six~~ months ended ~~June 30, 2010.~~March 31, 2011. Please refer to Item 7A in our ~~2009~~2010 Annual Report on Form 10-K.

We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures during the quarter covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the quarter covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective in ensuring that (i) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (ii) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officers as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance of achieving their stated objectives and our principal executive officer and principal financial officers concluded that our disclosure controls and procedures are effective at the reasonable assurance level. We review on an ongoing basis and document our disclosure controls and procedures, and our internal control over financial reporting, and we may from time to time make changes in an effort to enhance their effectiveness and ensure that our systems evolve with our business.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The Sarbanes-Oxley Act of 2002 provides that recent business combinations may be excluded from internal controls assessment; consequently, management will include Pantheon Ventures and Trilogy Global Advisors in our assessment of internal control over financial reporting as of December 31, 2011.

The exhibits are listed on the Exhibit Index and are included elsewhere in this Quarterly Report on Form 10-Q.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ~~June 30, 2010~~March 31, 2011
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Delaware		04-3218510
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)


Large accelerated filerý		Accelerated filero		Non-accelerated filero (Do not check if a smaller reporting company)		Smaller reporting companyo

	December 31, 2009				June 30, 2010

	Carrying Value		Principal amount at maturity		Carrying Value		Principal amount at maturity
2006 junior convertible trust preferred securities	$	212,466	$	300,000	$	213,010	$	300,000
2007 junior convertible trust preferred securities		294,892		430,820		295,578		430,820

Total junior convertible securities	$	507,358	$	730,820	$	508,588	$	730,820

				Weighted Average Exercise Price

Unexercised options outstanding—January 1, 2010		5,166,344		$	54.29
	Options granted	3,125			71.13
	Options exercised	(584,956	)		43.79
	Options forfeited	(3,043	)		48.79

Unexercised options outstanding—June 30, 2010		4,581,470			55.64	4.6

Exercisable at June 30, 2010		2,734,354			53.21	4.4

	Total Stockholders' Equity

	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Shares at Cost			Non- controlling interests			Non- controlling interests in partnerships			Total Equity
December 31, 2009	$	458	$	612,091		$	45,958	$	873,137	$	(421,954	)	$	281,946		$	90,085		$	1,481,721
Stock issued under option and other incentive plans		—		(41,202	)		—		—		65,604			—			—			24,402
Tax benefit of option exercises		—		6,795			—		—		—			—			—			6,795
Issuance costs		—		(228	)		—		—		—			—			—			(228	)
Changes in Affiliate equity value		—		(1,774	)		—		—		—			394			—			(1,380	)
Settlement of forward equity sale agreement		24		99,980			—		—		—			—			—			100,004
Conversion of zero coupon convertible notes		9		47,449			—		—		9			—			—			47,467
Share-based payment arrangements		—		10,730			—		—		—			—			—			10,730
Distributions to non-controlling interests		—		—			—		—		—			(90,564	)		—			(90,564	)
Investments in Affiliates		17		146,888			—		—		—			197,542			—			344,447
Other changes in non-controlling interests in partnerships		—		—			—		—		—			—			222			222
Net Income		—		—			—		42,667		—			72,697			(4,386	)		110,978
Other comprehensive income		—		—			1,203		—		—			—			—			1,203

June 30, 2010	$	508	$	880,729		$	47,161	$	915,804	$	(356,341	)	$	462,015		$	85,921		$	2,035,797


December 31, 2009		$	93,809
	Gross subscriptions		6,399
	Gross redemptions		(5,895	)
	Investment income		(4,759	)

June 30, 2010		$	89,554

					Fair Value Measurements

			December 31, 2010		Fair Value Measurements
			December 31, 2010		Level 1		Level 2		Level 3
Financial Assets
	Cash equivalents		$	36.0	$	36.0	$	—	$	—
	Partnership investments⁽¹⁾			124.5		16.9		21.8		85.8
	Investments in marketable securities⁽²⁾
		Trading securities		15.4		15.2		0.2		—
		Available for sale securities		100.6		99.2		1.4		—
	Interest rate derivatives			5.9		—		5.9		—
Financial Liabilities
	Contingent payment obligations⁽³⁾		$	84.0	$	—	$	—	$	84.0
	Obligations to related parties			79.6		—		—		79.6

	Financial Assets

	Three Months Ended June 30, 2009		Three Months Ended June 30, 2010			Six Months Ended June 30, 2009		Six Months Ended June 30, 2010
Balance, beginning of period	$	4,185	$	300		$	4,185	$	4,009
Realized and unrealized gains (losses) included in net income		—		(116	)		—		(116	)
Realized and unrealized gains (losses) included in other comprehensive income		—		—			—		—
New Investments				63,506					63,506
Purchases		—		—			—		—
Sales		—		—			—		—
Transfers in and/or out of Level 3		—		—			—		(3,709	)

Balance, end of period	$	4,185	$	63,690		$	4,185	$	63,690

Amount of total gains (losses) included in net income attributable to unrealized gains (losses) from assets still held at end of period	$	—	$	—		$	—	$	—
Amount of total gains (losses) included in other comprehensive income	$	—	$	—		$	—	$	—

	December 31, 2010				March 31, 2011

Category of Investment	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private equity fund-of-funds⁽¹⁾	$	85.7	$	89.2	$	93.6	$	98.6
Other funds⁽²⁾		55.2		—		64.0		—

	$	140.9	$	89.2	$	157.6	$	98.6

	December 31, 2010				March 31, 2011

	Unconsolidated VIE Net Assets		Carrying Value and Maximum Exposure to Loss		Unconsolidated VIE Net Assets		Carrying Value and Maximum Exposure to Loss
Sponsored investment funds	$	3,350.7	$	0.9	$	3,524.6	$	0.8
Trust preferred vehicles		9.0		9.0		9.0		9.0

				Weighted Average Exercise Price

Unexercised options outstanding—January 1, 2011		5.1		$	62.34
	Options granted	—			—
	Options exercised	(0.3	)		48.03
	Options forfeited	—			—

Unexercised options outstanding—March 31, 2011		4.8			63.27	4.9

Exercisable at March 31, 2011		2.4			58.49	4.0

	Notional Amount				Receiving	Start Date	Expiration Date

Counterparty A	$	25.0	1.67	%	3-Month LIBOR	October 2010	October 2015
Counterparty A	$	25.0	1.65	%	3-Month LIBOR	October 2010	October 2015
Counterparty B	$	25.0	1.59	%	3-Month LIBOR	October 2010	October 2015
Counterparty B	$	25.0	2.14	%	3-Month LIBOR	October 2010	October 2017

	December 31, 2010		March 31, 2011

Cash Flow Hedges
Interest rate swaps⁽¹⁾	$	2.5	$	3.0
Treasury rate locks⁽¹⁾		3.4		—

Total	$	5.9	$	3.0

	Mutual Fund		Institutional		High Net Worth		Total

Balance, as of December 31, 2010	$	785.9	$	1,083.7	$	261.6	$	2,131.2
Goodwill acquired		1.9		0.1		—		2.0
Foreign currency translation		2.4		4.5		2.5		9.4

Balance, as of March 31, 2011	$	790.2	$	1,088.3	$	264.1	$	2,142.6

	Mutual Fund			Institutional			High Net Worth			Total

Balance, as of December 31, 2009	$	561,753		$	602,962		$	248,502		$	1,413,217
Goodwill acquired, net		210,383			358,110			4,757			573,250
Foreign currency translation		(244	)		(1,315	)		(1,440	)		(2,999	)

Balance, as of June 30, 2010	$	771,892		$	959,757		$	251,819		$	1,983,468

	Controlling Interest			Non-Controlling Interest		Total

Purchase price	$	762,294		$	10,700	$	772,994
Retained Non-Controlling interest		—			106,027		106,027
Contingent payment obligation		15,283			—		15,283

Enterprise Value		777,577			116,727		894,304
Acquired client relationships		431,744			81,382		513,126
Tangible assets, net		13,034			32,295		45,329
Deferred income taxes		(51,917	)		—		(51,917	)
Goodwill		384,716			3,050		387,766

	$	777,577		$	116,727	$	894,304

	For the Three Months Ended March 31,

(in millions, except as noted and per share data)	2010		2011		% Change
Assets under Management (in billions)	$	232.1	$	339.8		46	%
Revenue		251.0		426.3		70	%
Net Income (controlling interest)		17.5		39.1		123	%
Earnings per share—diluted		0.38		0.74		95	%
Economic Net Income⁽¹⁾		50.8		85.1		68	%
Economic earnings per share⁽¹⁾		1.14		1.60		40	%
EBITDA⁽²⁾		68.2		118.2		73	%

Statement of Changes—Quarter to Date (in billions)			Mutual Fund			Institutional			High Net Worth			Total

Assets under management, March 31, 2010			$	60.5		$	140.6		$	31.0		$	232.1
	New Investments⁽¹⁾			9.9			23.9			0.4			34.2

Adjusted Assets under management, March 31, 2010				70.4			164.5			31.4			266.3

	Client cash inflows			4.6			5.3			1.9			11.8
	Client cash outflows			(4.4	)		(5.2	)		(1.9	)		(11.5	)

		Net client cash flows		0.2			0.1			—			0.3

	Investment performance			(6.2	)		(9.4	)		(1.9	)		(17.5	)
	Other⁽²⁾			(0.1	)		—			—			(0.1	)

Assets under management, June 30, 2010			$	64.3		$	155.2		$	29.5		$	249.0

Statement of Changes-Quarter to Date (in billions)			Mutual Fund			Institutional			High Net Worth			Total

December 31, 2010			$	85.2		$	200.1		$	34.7		$	320.0
	Client cash inflows			7.0			12.7			1.7			21.4
	Client cash outflows			(4.8	)		(8.4	)		(1.7	)		(14.9	)

		Net client cash flows		2.2			4.3			—			6.5

	Other⁽¹⁾			(0.2	)		—			—			(0.2	)
	Investment performance			3.4			8.3			1.8			13.5

March 31, 2011			$	90.6		$	212.7		$	36.5		$	339.8

Statement of Changes—Year to Date (in billions)			Mutual Fund			Institutional			High Net Worth			Total

Assets under management, December 31, 2009			$	44.5		$	133.9		$	29.6		$	208.0
	New Investments⁽¹⁾			22.9			26.1			0.4			49.4

Adjusted Assets under management, December 31, 2009				67.4			160.0			30.0			257.4

	Client cash inflows			8.9			12.3			3.6			24.8
	Client cash outflows			(7.9	)		(14.2	)		(3.4	)		(25.5	)

		Net client cash flows		1.0			(1.9	)		0.2			(0.7	)

	Investment performance			(4.0	)		(2.8	)		(0.7	)		(7.5	)
	Other⁽²⁾			(0.1	)		(0.1	)		—			(0.2	)

Assets under management, June 30, 2010			$	64.3		$	155.2		$	29.5		$	249.0

		For the Three Months Ended June 30,				For the Six Months Ended June 30,

(in millions, except shares and per share data)		2009		2010		2009		2010
Net Income (controlling interest)		$	11.0	$	25.2	$	17.1	$	42.7
	Intangible amortization⁽¹⁾⁽²⁾		16.0		17.0		32.0		33.7
	Intangible-related deferred taxes		9.5		14.3		19.1		25.0
	Imputed interest and contingent payment adjustments⁽³⁾		2.0		3.2		4.1		5.5
	Affiliate equity expense		1.9		1.8		3.9		3.5
	Affiliate depreciation		2.0		2.3		3.9		4.2

Economic Net Income		$	42.4	$	63.8	$	80.1	$	114.6



~~Issue Date~~	~~August 2008~~
~~Maturity Date~~	~~August 2038~~
~~Par Value~~	~~$460.0~~
~~Carrying Value~~	~~415.9~~	⁽¹⁾
~~Note Denomination~~	~~1,000~~
~~Current Conversion Rate~~	~~7.959~~
~~Current Conversion Price~~	~~125.65~~
~~Stated Coupon~~	~~3.95~~	%
~~Tax Deduction Rate~~	~~9.38%~~	⁽²⁾


		AFFILIATED MANAGERS GROUP, INC. ~~(Registrant)~~
~~August 9, 2010~~May 10, 2011		/s/ ~~DARRELL W. CRATE~~JAY C. HORGEN ~~Darrell W. Crate~~Jay C. Horgen on behalf of the Registrant as ~~Executive Vice President,~~ Chief Financial Officer and Treasurer (and also as Principal Financial and Principal Accounting Officer)

Exhibit No.			Description

	~~2.1~~10.1		~~Amendment No. 1 to Purchase~~Transition and ~~Sale~~Advisory Services Agreement ~~dated as of June 30, 2010,~~ by and ~~among Frank Russell Company,~~between Affiliated Managers Group, Inc., and ~~solely in respect of Sections 4.18, 4.19 and 8.8 of the Purchase and Sale Agreement between the parties~~Darrell W. Crate dated as of February ~~10, 2010 (as amended hereby), The Northwestern Mutual Life Insurance Company.~~1, 2011.
	31.1		Certification of Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Registrant's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Registrant's Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification of Registrant's Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101		The following financial statements from the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2010~~March 31, 2011 are furnished herewith, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2011 and 2010, ~~and 2009,~~ (ii) the Consolidated Balance Sheets at ~~June 30, 2010~~March 31, 2011 and December 31, ~~2009,~~2010, (iii) the Consolidated Statement of Equity for the ~~six~~three month period ended ~~June 30, 2010,~~March 31, 2011, (iv) the Consolidated Statements of Cash Flows for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2011 and 2010, ~~and 2009,~~ and (v) the Notes to the Consolidated Financial Statements.