Affiliated Managers (MGR) 30 Oct 172017 Q3 Earnings call transcript

Greetings, and welcome to the AMG Third Quarter 2017 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Ms. Selene Oh, Vice President, Investor Relations for AMG. you. Thank

begin. may You

made of measures, the discuss other differ We during on joining estimates limited of the discuss to on call, SEC XXXX. constitute any factors, measures any results discussed to for non-GAAP Jay well the time. that assume our Dalton, the the and to projected Officer. provide, obligation Investor that, the and with results number Executive Nate With company's results forward-looking are over call. a us Healey, on call those announcement the Sean a company's www.amg.com, certain I'll future results Chief Officer; for line the referenced directly third Horgen, call a financial financial will from of could are Actual any earnings Chairman Relations its including Officer; to of reconciliation of announced Operating periods statements. quarter In but Chief forward-looking for from of this and comparable AMG you Chief President Sean for Financial call. turn the as those make reconciliation the due replay quarter statements Form AMG With will to Healey. copy company's quarter, our section and economic not filings GAAP we to including, per a share most to the of the as XX-K of for matters website materially update no and to, Thank a to this the time at conference of in

quarter, assets year-ago for earnings everyone. strong management results the including record of share of billion, and $X.XX, XX% quarter. good AMG of under increase and XX% over the morning, Selene, growth representing economic $XXX a Thanks, year-over-year, per reported third

growth positive of and from Affiliate investment Our continued business, including ongoing of the new Affiliates, our reflect our the results impact across organic outperformance partnerships. net excellent execution flows

cash quarter, flows a the During partly client strong with billion, broad net business equities. offset across alternative by in $X.X new of of strategies array positive our Affiliates net outflows generated momentum

Looking ahead, the product allocations products. clients global boutique outperformance their we of and as value-added our equity retail sets, in and managers growth, increasing and alternative global institutional diversifying ongoing long-term to see especially recognize specialist truly expand

month of AMG's over XXth IPO, thought next As how and to moment back past business evolved decades. strategy our marks anniversary take would X I step I have and the a consider the

periods know, cycles, we've we seen the XX in industry. markets along and management XXXX, financial markets market the years, roughly equity including global As doubled. volatility, in all with multiple have since all, changes AMG's asset IPO it past several of profound Through extreme in

have We've under our firms and core cap outstanding and investment While by this have disciplined generated through excellent execution, over achieved management principles which assets industry-leading partnering truly performance. XXx. AMG's market success increased both adherence to with

these growth firms. their and equity clients the advantages to recognize which exists direct along owners have managers degree when the reflects advantages true best-focused firms appreciate the a to partners and boutique alignment, its alpha, and been Our of strong continue with are very that investment generating

areas portions our of been increasing such build of have in into we over now deliberately XX% AMG's represent clients assets emerging where alpha management. under products diversification we market These business their As sought global portfolios. time, product equities, as allocations and the

the which and $XXX over to strategies of strategies. products billion and and of one leading firms of ValueAct, Baring a across are alternative These AMG businesses saw broad a balance and stream, products while then, the overall of and client liquid alternative partnerships most AQR can AUM, Asia, array significant with We in XX% which our add and correlated in AMG's less now represents BlueMountain, of with Pantheon, the Since earnings firms equity largest to the demand of traditional one enhances alternative was for alpha, set, the also first AMG demand provide, asset client exposure growing with sources illiquid each markets industry, stability of also assembled has management Winton investment ahead company the trends. and our with beginning largely in alternatives, other as Capula, diverse EIG, enduring uncorrelated positioning such to to XXXX.

products this evolving opportunity We develop and cross our the And area, see to track markets meet and innovate ahead. world. outstanding continue ability in to we see given clients' needs, product records, strong channels Affiliates' tremendous to momentum and around long-term a

we investing has years the passive by environment the as in crisis, development know, of bank the the the in following been interventions products. financial market growth created accelerated industry all passive As flows major central our dramatically into a global

- in and for across the record AMG's and track alternatives. market demand there's enduring for by is this offered global high-quality products strategies no alpha doubt, that these of of remains cycle, there diversification, enormous event, line in have emerging of not ongoing a role was value-added cash as alpha-generating strategies, goals, continue investments passive believe those highest to will, for exposure and high-conviction equities We in true momentum of many client products. into dialogues an But to opportunity our with in While continue. their sorry, obligations we active across full organic meet over their alpha growth complementing sales growth robo also financial the active enduring the been performance-oriented in any including and crisis, tested Affiliates, products investing. clients market client beta what seek our evidence quality help since now call indicate flows strategies providing $XXX net billion

managing As clients around growing their of portfolios, toward their alpha trend is relationships. concentrating global large, the recognized portions world, specialist also increasingly global institutional the clients, there advantages in especially boutique firms manager clients the of a

of products, enough smaller necessarily without our firms the have global strategic excellence and trend build active to our toward of with will and and large reach advantages concentration well Through and while come distribution capabilities, clients the mediocre global firms, generation and AMG's global intermediaries. point our clients, Affiliates AMG's succeed strength we This focused marketing ability providing the and with product the manager alpha-oriented complement alpha the to array a investment to won't excellent boutique, offer efforts, we in term, don't distribution of with strategies, ultimately, over large for plays of While be breadth. scale boutiques. also which relationships long access aligned Affiliates believe performance compliance, as that to single broadest

from kinds an be strategy these theme increasingly a and incremental forward. our of relationships accretive opportunity growth this On to growth, going new for We business provides of Affiliates. in are prospects investments and ongoing expect already AMG's to and organic through generate excellent earnings important product growth benefiting our unique trend diversification top

X a outstanding the basis, past AMG clear of our strategic permanent, over track a record on Given partner a boutique which and for global decades, choice is partner. seek traditional alternative, firms,

though, busy inherently an the extremely we attractive secular remain over always, the selective. opportunity create pace we is transactions, continue disciplined be of very and each have dynamics And to and of Affiliate, investment We to highly activity prospective as a range new potential while new growth on incremental of based earnings diversification.

our today, than over of million, is $X.X as at $XX our creation. an financial IPO, Finally, the our to from grown billion of and source less important EBITDA itself, strength business shareholder scale has value increasingly

but which new position, strong only investments along flexibility to financial A-rated Our increase capital opportunistically shareholders generation, not execute company, cash continue capital as will flow substantial free dividends, an over to through return also and to our time. with the repurchases provides consistently

disciplined ahead, continue experience the know to As we will And that serve the our core principles, XX years will through and focus us to extreme commitment But continued larger, volatility. periods, business diverse stronger have ever. and with us success. look well. into than lessons the markets past go is sometimes, which guided ensure and difficult our of founding, more We a

excellent in-lined a beyond. business, detail. investment XX business Affiliates, the track clear execution serving to And is excellence about of a together focus management, with Nate with results strategy, clients ultimately incentives, directly active turn to excellent Affiliates well it outstanding about incredibly over execute investment and we and our with I'll next ability each more and Our in that, our optimistic and record our discuss are years With to grow our performance.

Thanks. Good everyone. morning,

active As good across equity to Sean track and had continued products. quarter array our said, another we of growth Affiliates investment organic extend alternative a of broad excellent and records their

details, profile quarter this before the I industry-specific our level backdrop the broader to at flow the turning wanted high a review of Now against themes. to

positive near product net term, pleased with our extremely positioning be flows. another and quarter cash generated of to that continue development fact we more the and We client new product

mandates, and illiquid good finals liquid continue terms also of across activity very both in won-but-unfunded and We fees our equities global level to have and of alternatives, strategies.

specifically at shape in had some looking in by were large third couple quarter. this equity the both the institutional addition, we quarter, had Now the product also the clearly segments. had and flows and, We category. especially to outflows lumpy category the significant flows flipped mandates retail lumpy product in impacted institutional quarter significant some a we from third But client sub-advisory wins, of alternatives the we fourth global the some the institutional in in

the quarter, more positive a and pipeline feel importantly, netted year opportunity forward for balance the While good $X.X it we the for out of very XXXX. to into about and all this inflows third set billion

and opportunities our to improving. alternative see we our institutional products liquid and see and retail across equity flow ongoing continue in ahead, client types, pattern both significant significantly illiquid we our global Looking both

As an alpha and these offered true our to Affiliates sophisticated to and emerging strategies strategies to leverage across are equities and able our increasingly investors enormous alternatives and market providing intermediaries. and scale bring performance-oriented global Sean opportunity high-conviction products said, we diversification, by there's for

details quarter. the Now to for the turning

U.S. alternatives, product both developed strategies. our emerging equities other multi-assets reminder, a and As and and categories markets, global include equities,

categories infrastructure, equity our In regional see secondaries real and with strong within assets, private and Baring equity, and and dynamics offerings the products assets, Pantheon, global addition, account primary Starting of alternative in Affiliates, continue continued discuss strategies, records their hard EIG our as such to at coinvestment dimension are including underlying level Asia, the XX% track business aggregate by to energy. to including and their and across flow alternative flagship private long-term for which we'll level. our that at our return subcategory

well, enhanced Equity an We indices is these complementary profile talent are traction coinvestments, In return. returns return, line very gaining The and real believe what with equity-relative are lines diversifying potential. as extensions, growth We Index as yet will additional estate contribution growth legacy make in of value, in see a Affiliates substantial and the marketplace significant and and posted Relative the these real we areas Hedge such the in opportunities, these major their credit. X.X% Value product the continue each the income Activist growth for scalable HFRI indicated a broadening combination businesses by adding to encouraged with product positive and organic creating by of as flagship strategies, with assets, at X.X% Index a return, Venture-Driven Index quarter, AMG. to fixed X.X% HFRI HFRI the the

the had was as well performance a at also product The of AQR, a PFM track BlueMountain strong in maintain relative absolute Systematica, such quarter earnings, ValueAct especially products very but note year-to-date number continue quarter category would Our produce I the the equity broader on have at trailing equity hedge and this of performance good of of as quarter markets. good mixed and Affiliates Capula long-term the products to challenging in returns. AQR, ahead and a our Affiliates largest records. index

and positive our quarter. multi-strategy are within Indices for category. Now other the

quarter of of generated Quadrant's For from that strategies First and HFRI well classes. AQR's as benefited relative Products beta strong that betas and well Composite backdrop, risk-bearing Weighted absolute strategies. key multi-assets strategies as example, and Fund in across as the returns the include particularly premier, asset strong, our market commodity most style perform Affiliates' prosperity return it X.X%. Against alternative

wide factors in flat remaining category. negative SocGen our trailing rose modest periods. speaking, were recent what severe X.X%, incorporated X systematic these classes, offset diversifying have for in which a have variety Trend gains the behind engines diversified in long a proved steady the macro drawdowns. alpha, asset by in underlying over periods, In been to a from generate combined of particularly industry strategies. quarter, and the Now term processes and the X-year to equities have strategies across The of Broadly array these returns market Index

systematic near-term developing broad-based quarter. algorithmic Our was Affiliates universe, demand this and are products to investment certain segments meet Affiliates are with the challenges in among while line of some there peers be leaders the significant, in demand. performance there our in investing, for this to And continues

to supported with an both now had momentum of and growth, flows billion We by organic category. Turning $XX.X continued across quarter retail in clients. excellent alternatives of institutional net inflows,

saw Looking and quarter, a subcategory at we basis, multi-strategy in and equity relative subcategories. good on value income trends, other flows the with both recent fixed a consistent in

systematic redemptions. in net While continue be diversified to

had also in our as asset certain mature strong this private realization saw and in and illiquid We for some set activity investments even more a equity closings. This values occurred very we quarter as the increased as significant product Affiliates crystallize wins environment.

World returning In for of this to category, quarter which Now approximately markets by the Index assets. developed MSCI our strong global equities global accounts X%. business next moving for XX% our with

underweight MSCI as AQR, lagged our flagship the a their while markets benchmark Genesis growth-oriented Affiliate, flagship well given Loevner, Veritas returns but Loevner which quarter, quarter index, not the posted Harding the Markets the challenging indices X% they more and more TimesSquare, for Our strong Trilogy which in also Among were quarter Emerging quarter. of and is Affiliates with while long-term track very Harding Trilogy Index products in AQR good outperforming the sectors, from strong outpaced a maintains surprising, their the Emerging outperformed. had and generated record. strategies of results benchmarks, with in

to global equity flows. Turning

at our is we the net challenging a large as this lumpy As In $X.X growth we among of slipped quarter redemptions, a light clients. before, sales quarter. part, with outflows, several time had mentioned institutional institutional as a the billion I same we fourth couple quarter, in had funding experienced because in

product records broadly, of AQR, the We Veritas, more this largest Artemis, track in AMG's products. primary all see in excellent group. Loevner, Affiliates, long-term maintain and within their Now development to good terms continue Tweedy, Harding category Browne

Affiliates investment In addition, we've build beginning some traction to their products number these a working out been with global our and are of in be well. of other to capabilities, as

equities, value. U.S. and outperformed accounts of Turning which positive, by growth XX% Markets to large assets. caps meaningfully next caps for our were small business outperformed

Now quarter, XXXX the S&P while Index X.X%. XXX Russell the X.X%, the returned returned for

across value stronger, Frontier Our performance outstanding Affiliates strategy performance their absolute area relative products. and smaller cap, SouthernSun, is of underperformed had market given the benchmarks and but track a flagship strategies, larger relative cap broad mixed, flagship several long-term we an the Conversely, including in our where number record. of this and outperformed Yacktman's quarter of an underperformance maintains

saw this on industry-wide $X.X retail Now search institutional and activity within we in muted, remains with redemption we and see U.S. billion relatively the net line side. while is demand improvement do But equities, outflows, trends.

excess continue demand. portions investors currently portfolios. broadly produce U.S. for are speaking, to U.S. their in true, return, which believe We of favoring drive while passive equity managers so-called alpha-oriented equity will Now client exposures will be the turn, able to

by benchmarks the wealth versus accounts and for continue Affiliates, to were category, category, solid multi-asset sales and multi-asset other Finally, $XXX management a well of of across we've product activity specialty of redemptions portfolios multi-asset ultra-high income encompasses as net set. saw worth wealth good the most our XX% fixed reduction category moving inflows a for our of within clients. again management specialty, this assets Performance well remains million, fixed in mandates which and of this perform their number and income products Affiliates net as and customized In institutional balance and broadly the products. at our the multi-asset and produced to we as our business

see improve is of of have Affiliates landscape that the especially on the number continue clients. how equities. a of in and strategies, scale we we, opportunities And as our we're said, built And are early area. faces needs together, still with emerging in very ahead. to executing progress, manager challenges, we Together broader meet to evolving making do a us of and of our providers of this of alternative scope we are tremendous market believe focused positioned. good global opportunities combination stages well Sean as enhance group. partner largest the and and investment we number we This significant that, the global position our Affiliates, management that, in the asset the our we Jay. let of me boutiques we'll significant the excellence business across by of the world, drive continue With to provides organic one to with it growth choice as very best both But to Now Affiliate while alpha-oriented turn

Thank you, Nate.

reflect under growth as billion. our discussed, quarter continued business assets with Sean we power As the of our quarter ended the of in $XXX earnings results third management record

in per per As $X.XX. we included economic performance the GAAP share saw share On of $X.XX. which earnings earnings the third basis, reported release, of we you of a quarter, for reported fees $X.XX net

Turning to our performance metrics.

alternatives growth ratio basis quarter, to aggregate revenue, organic points average and fees. year GAAP management reflecting our primarily revenue method together and investments. driven a of and from the is our from modestly by $X.X grew aggregate a know, equity The full sum revenue For ago XXXX strong the XX% billion points, to higher third of effect basis which, new to performance of revenue you assets our XX increased with as markets XX year-over-year under

quarter. million income partially growth $XXX.X in increase a a a reflecting fee greater Excluding in performance method EBITDA, consolidated shifted higher this million by between grew $XXX.X rate grew contribution cash a equity from net year mix ago, fees, ago, tax strong we the EBITDA Affiliates. offset adjusted Economic composition the and saw products. Adjusted reflecting also to XX% our from to higher ratio, from AUM alternative year modest a as towards XX%

includes a count. share from per which to earnings share year increase a increased in modest XX%, economic ago, $X.XX Finally,

for modeling in more from third quarter. fourth we The of basis the XX.X the XX quarter, adjusted to expect points, or performance items points, In excluding fees. specific ratio $X.XX management higher per a be to to contribution between reflecting average range fees EBITDA basis and points the assets XX share. under Turning performance XX ratio to was basis of $X.XX this

With we this our fourth the basis fees, points performance in to approximately to ratio quarter. taxes. be Excluding expect XX.X regard

reflecting to XX%, tax tax GAAP the effective In XX.X%, quarter. our driven quarter, by of for to increase million. tax our performance rate level deferred rate to quarter expect taxable XX%, Intangible-related was increase million. was to approximately Our were $XX.X third in fees. third quarter, to expect higher number the rate cash income a XX.X% cash and the approximately fourth tax we we rate this taxes and $XX.X decrease to the our GAAP approximately fourth In

reported was under accounted $XX.X the of Affiliates for share million amortization from amortization equity $XX.X third the method. quarter includes which for Our million,

the expect remain $XX approximately For our fourth quarter, of to million. share amortization we at

quarter fourth than interest bond items third third the In $XX.X in of economic for the retirement were expense of quarter, the million, decrease share million. million. reflects quarter $XX.X expense Other our interest which $X senior was we August. less our of share to for expect Our approximately the to

For million modeling purposes, items we quarter. $X expect other be approximately to economic per

reflecting for average quarter was the for repurchases. Our to count $XX.X approximately quarter, share additional million and it million we adjusted the expect be weighted fourth share $XX.X

we share balance per In $XX repurchases approximately the under the share shareholders. the generate increased well rate management a billion $X.XX are third of execution together our approximately of in of expect the With of of growth business consistent fourth return capital shareholder record power sheet. with cash senior to value to of dividend million In million. and our strategy paid retired of to $X.X the repurchased to positioned $XXX quarter, quarter, additional EBITDA, substantial continue we our we $XXX in and shares. our $XXX turning assets run through billion, million bond, Finally, earnings

to happy answer your be we'll questions. Now,

Instructions]. [Operator

Suisse. Our comes line first Siegenthaler Crédit from question the of with Craig

been then wanted inflow think equity billion, $XX that cycle. original much $XX target, from raised fundraising equity how about And in private just I already has think around when was with of the much to the date? private was alternate to How which fundraising I start billion flows? we of the

It's Nate here.

back step to one just So second.

we I several their those I But the and increasingly had of rules separate products. you the quarter and see closings of we Yes, as fundraising have also products entering with important of given extend will, of think are we Affiliates obviously, both as So private would we and the as more they're to quarter, fundraising, funds. also the to to the while to the product to entering funds as in a think those opportunity think a accounts continue are set indicated, describe way of ton if Affiliates broaden firms the sort we sort pipeline, to we spirit can it about those but sort discussed product and, sort it's But to broadening relative of sort say of think what see kind specific of it. continue now last and also we're are longer and strong while right pipeline, we significant and there's way diversifying. we've of equity, - flagship - on kind stuff the also raise about, about is about lines illiquid so the the talked had markets not to offering you beginning, customized

I good see we had while of think continuing defined sort I from we - said, grow. about a it that of So, definitely there. of kind - of sort quarter wouldn't again, had as sort as because see taking we a we to number

kind just One in of detail elevated this have also this slightly of realizations in of we sort past the said did remarks, quarter. we prepared of kind the and

should moderate that we bit as forward. so, net about And a that as look think the - you as number,

anything the and to also So, number extend continue a future. to to about - it about good both into out I continue be continuing feel larger

Okay.

here. my as follow-up Just

could either capability appetite I solutions Solutions retail using there's U.S.? your for a multiple insurance work be working that with even in space. And are wanted retail building or is leverage theme SMA Affiliates platforms still that this a to any if of the for outside get or it's companies whether effort with on centralized institutional growing appetite, across could the large really you cap Affiliates, seed the that vehicle AMG or side your even

by as and would we our position for clients guess And And been some scale, who I you over described, important know. their sophisticated very the a I Well, are own largest, last are as doing. we what - year largest, Sure. with pleased saying or we product they have business mostly start our the discussing is of institutional the most are with institutional, of and alpha-oriented intermediaries, develop breadth looking and and global most allocations. as excellent design alpha-oriented so, product,

in looking competitive ways, So, And for be not some those excellent coming we might with fact, in products. with if solutions, think, some looking for solutions, they're of I even, were we intermediaries. they're

business. most, building we we're of on relationships. at our and and well And scale quality we've those said, So, as breadth the very focused, given think we're positioned

large growth. seeing having the an Absolutely. quarter, in are increasing the It's capabilities. opportunity, not we're other be more we're going there industry relationships, including there one to it's we're even the are even our process that that expect of the call plays areas smaller list, think those we that of that, on U.S.? as retail to manager where But out looking and I very market and very but outside you initiatives hear that around to strength theme and mandates we're one develop of and of have concentration in especially that Now bigger something well forward And said, traction to. as our is each important and the growth, to element we've or retail very won and largest I lots our and

we terrific part about feel so, that our business. And of

Our the from comes Bill Citigroup. of line next question with Katz

Okay.

was sort could - comment. of you Just if wondering Nate, I

of the sort underlying in - number for or fourth like? then those well the a in highlighted of accounts, of excuse growth continue on was some get realization the advice X still trend we the as side, organic you to or quarter." dimension and me there of some the throw separate accounts looks "some sense You Could that some supplements, institutional so maybe aspects pipelines get the what lumpiness -

Yes.

I we're to if to I of right? of running couple the where So, look easiest past kind think, of net of kind the you is probably, do looking billion the compared pattern think a this by trends, positive. flow by at way kind quarter, So, at last, as

If this you quarter relative you pieces. that I'll of at look that, sort to through kind of guide the

So, said in have as those quarter. talked both we quarter, global growth global sales lower also we in talked or set, a very but institutional, alternative institutional, I've that about kind lumpy the about. the also quarter, although have elevated of lateral was And retail, and remarks, and a as as institutional then had we in I some quite you fourth had had say did will realizations. we And good then we realizations did global, both prepared retail our good those gross sales things into slipped in

of illiquid growth incremental against we and that continue as it. opportunity which of this each other get strong, have kind those very kind can we've talking is normalize this pipeline of provide kind theme that a that off You trend on to about, plus, to top been of should back

So that's the way I would dimension of those kind pieces.

Our the Jefferies. with comes Dan Fannon next from line of question

ahead just to we've thinking is elevated guess, redemptions. a the I build seen quarter, I - years, few and the fourth little that typically last bit on to question which want

thinking on redemptions? of more see is you we of of the color And the ramping? stuff, quarter? is think what that what so, driving of kind the kind kind you if guess, of I longer-dated we are So talk that this about, kind kind a stages, just into those getting persisting of a the some be early a guess you sense ongoing? steady the in Or still - is dynamics could Then - that and state of it saw If trajectory. little fourth of quarter of I will also, of just building

it. Got

embedded couple there's of there. a So, in

get sure make and and I'll So, them all. try

the of any the kind first fourth the first, you - fourth quarter is quarter the selling have stuff. fourth don't and from beyond should sort of to quarter people seasonality losses, seasonality quarter both capital apply answer you of kind are be So clear, tax this and is next as retail gains in for There that of and quarter in distributions are things channel maxed all kinds lumpy dividends about. of both is there I and think to talked XXX(k)s also no.

where coming that. And there's kind product, with quarter. also annual disconnect space, are is first institutional of out the the redemptions there subscriptions timing maybe you new in before the So, this have in work especially people coming -

that there is of seasonality. So, kind

account All in of you into that taken optimism that the from us. hear is

So, of are lumpy embedded fourth you all with thing. no, quarter. There none do to should for the beyond. the seasonality, that short embedded in hear from but all have - the us outflow is the that understanding that nothing quarter that's and fourth answers is the The optimism

the pipeline, in it. stages would I on illiquid still Now say of we're the early

that entering think we cyclical right? think If it. are I in of So, you kind of it, way,

also, a continue of also of cycles. a point happen. a continue fundraising and wins beginning by these I've We products products all and have going interim are before, large asset newer the both as flagship stuff become products seeing have to sort and are to to separate beginning number But and of as firms to base we're bigger that sort of expand, pipeline of account as that both firms these extend because But to to evolve. to part these reiterate made kind separate and we're out starting closings, of development accounts they with enter product of closings

large we that mandates in we're Now as now, - a large to of in we magnitude see if bunch the stages be growing - there's these alluded these and as still mandates but early come think going opportunity to, continue lumpiness duration. anything, Sean to being and to both the

the Our William question line Shutler Chris with Blair. of next comes from

view? or little types equity where a into On bit they the in just what could of your more are global dive strategies redemptions, those you performance-related and strategies with

Yes.

tell will reasons, in is you, idiosyncratic So, Look, couple are through right? I a it's they very Again, definitely not of it different exactly coming by main, But portfolio-positioning when large clear right. clients. And kind even and always this was the made across they exactly never people think know of the decisions lumpy. were institutional you strategies.

I that's of... sort So, think

equities. the just we the little of just set where we maybe bit response that are and question into large our a - having in business because global won and tone big, quarter got think periods mandates listening I surprised have by is, pushed very And part of to this or Yes. that a diverse in product even were is overall

that, contribution. Nate good was allows it low seems with so, as the anomalously liquids, alternatives alternatives And strength is are the flow including, especially obviously, us, to global high-fee the to or terms a equity in of our strong describing, have misleadingly quarter products - franchise, yet, the a And - these quarter - category. in of us we good,

or trends even our global so, and largest we business. which you about a a the of performance then biggest reason equities, the have piece given very normalizing number strong quite really, the of now overall products. forward, contribution is strong look Affiliates. improving, alternative This continuing, among across And our honestly, range And if every of optimistic be to

feel. optimism that really we underlying the that's overall So

Our next of from with line question Bedell Deutsche comes Bank. Brian the

- comparing been I or I'm outflows. that. that at get the $X of sort then greater from in But go could announced lumpy fair can't equity the are back the to and quarter of of guess, it I redemptions that in you they're little net importance And in as normal you the a of and can say, differential to that there's $X are like the while global can this product process. in disclose appreciate so And we've fundraising funds had discuss how good category. illiquids. a Again, $X billion fundraising the we fundraising if picture have the I can way billion again, is really I of also your what you looks a - And differing just the the XQ XQ, flows? size trends an to categories. it sort after versus then, to understand Just the just billion if understanding [indiscernible] your fact, a we flow bit. guess, on of across look

Perfect.

of roughly I can, on only liquid on our business make we we of good fundraisers correctly. with very what piece, well. certainly it exactly if right, can about as we what kind modification the thinking trajectory thinking the well. you're But side And side, alternatives at obviously, traction would The I we're happy to alts component on is, the it disclose as for think - that, I I think look about go. So, the only then, understood there's flows you're it also -

but that accounts a increasingly emphasizing as again, of kinds funds partly, it's won't won why as X.X $XX over momentum. closes, you're And it's other just show next more sort we talk that us of finite see mandates course, and and flagship having But close. years, necessarily up look about we funds also hearing of out billion, something ongoing this the of year, that, than that's separate the as it's

question the Lee next with comes of Robert KBW. from Our line

flows. EBITDA us to of not what a matters guess, that flows at EBITDA global to this that could maybe contribution there of maybe should trying contribution to relatively up trending get be that to flow a more think that leverage the Affiliates? in whatnot to per that kind But is Could we of you to most it back that, of and on mix at really I sense should alternatives, look the was importantly, different flows guys. if the any you're and look that figure quarter, mix, to contribution forward? mean, we sense mix reason optimistic asset you kind Or flows - the to going the going expect Maybe kind at we the understanding just given flows? it's given there's the if give fee of guess, I the contribution those expecting, if maybe higher I you're looking constant dimension, Affiliate Just be but some strategies, it we of at very you.

Rob. It's Jay,

I me fee and illiquid Look, add particular fee, product, let and think take Nate, as benefits in get the product if if that can will in maybe you we miss see performance some in a I alternative base So, add. cases, general, anything, long-duration. then of I

attractive find those do a even long - contribution categories be and that period time particularly and additive in product of we So, over to quarters product EBITDA to one. like this

of quarter bit obviously, This a tried had asset we've appreciation.

our also was not market from forward FX. changes the and EBITDA flows, clearly, So is includes going run noticeably higher that quarter last but and only than rate it

that of at of pretty pretty got performance But us. strong point, component to at we've - least is think I reiterate the want So, types these the a this duration going for that tailwind I and fundraisers. fee

which fees to Yes. or And they're fees think course, about firms, anticipating, relative as that if public are ours, and flows But you, just understand mark-to-market. the this. recording of I performance they're those like talk PE performance

have as For a takes us, X, performance method from and in we only the cash. they're performance fees accounting fees method, which different contribution - realizing

so, some anything as yes. not for and quite other be And of a contribution you public especially And same have flows any the time, sort the want valuable. to in add less will will Nate, to up necessarily way build these valuable. - quickly book, as mean it are consistent that it's would it of But doesn't as it over we companies. or show

of next Goldman the Alex Our comes question from with Sachs. Blostein line

hit Shifting spend your investment little the backdrop Affiliates. gears for a bit. I to on just want

don't Affiliates couple business really or the on been last flows. you today? And share, will this they peers quarters, ones the revenue they guess, spending you kind of get ton that have I importantly, guess, a it? But needs better more earnings, kind the most that, a across guys how invest of impact So, there's since the kind do spend flows I right, AMG's continue kind large of that making highlighting time through. of over sustain to Can your the to may rising cost minute overall think flow at sure obviously space where in of are with I the a, of how your investment balance of same the are bearing

can observations Nate, level. And start we're with you I of Affiliates. level with a kind about What high doing don't of in at AMG fill the set what

Of talk people course, seen we've about around investments things "Technology" lot different it to of a and large And assigned means a different conversation to it. number And this people.

in. of elaborate less manufacturing passive business lot is A business we're much can in about. worry not near function our lot of as it products. of it that back and business that a capabilities anywhere efficiently. we think that. for - a is is That's processing and office and I investing just and around Jay the something I run we Obviously, off-shoring a things. on other not

not given focus. retail Nothing robo-advisers is distribution Sometimes spend robo-advisers and around have put part industry. thing. that active flows a in And of invested, alternative rolling and certainly, way. continue meaningful nearly basis our of traction but And sort against and And to as invest, anybody's "Technology" we meaningful it's sort equity it's I'll our of very and and are - in a the institutional looking against business just the our initiatives global - really getting on forward.

a feeling we're from that but defensive. investing, it So, it's doing not not not of position we're

and to I very and position think our positive a we generate own. Affiliates incremental what add extending to feel through good you we're like Nate? already we're Do on their investing want doing are in to flows building that,

only the you spending return right? so, there's are think add, that that the earlier, also producing The back this necessary I relates think disciplines to largest strategy investment in asked produce our our I of some business especially Affiliate, of - would thing return if of stream, generally to that in No. And about set spend question business, distribution was these about the right? you think if stream. they're a their leaders investment Affiliates and

investment and or as as ongoing part BlueMountain So right? and of an business These a it's compete that about you these Capula. or that certainly part firm, some that's ways. firms in relate, for really, Sean lot absolutely capability of that the an the if what about of a go-to-market and relative a a - for strategies on of packaging about to or the about incremental going opportunity of like build the firm business. this were a do the of and Systematica distribution as very as us think, For thoughtful part I segments how what but we after. spend their all absolutely means advantage part said, so and the Sean have right? market as that's opportunity or relative think focused are feel and Winton there's and what were being of broadly AQR the these are inhabiting to and investing said, them, we kind And or - of then is competitive have good Again, relates firms are geographies they they leading absolutely of and that these that make to are the our very return - more margin We these part questions firms offensive the we the in firms as

the making, opportunities we're think we're relative I while there very are So, there that to seeing. spends investment modest that

add I one point. And more Yes. would

in is only our words, approach, that do could other think believe, this interest enemy we common performance-oriented focus I scale the products. sense that generally. addresses, answer and idea of a technology, boutiques In and I for we say, alpha the clients forward-alpha effectively, And bears that in very and not incremental active out are accept evidence And boutique and somehow ongoing in of intermediaries - spend we is the which generation, on, is firms. let's showing the generation way think is the massive simple the set best issue. just the that

it is not on - mean, developing focused different, said, of is world spending think whom is alpha more superior the something quantitative maybe the Nate scale And are we're large will magically, as leaders generate of of very of the is the - to generation our alpha, that techniques. but in individual Affiliates, perhaps with some idea money that somehow, or I advanced create in integrated the happen, when seen business efforts doing I for betting absolute currently that us, because a harder an to setting, it's that challenged just going so group

us. exposure managers said, positioned are to the company very artificial is fact, quantitative those applying "Who it's best - you firms. In Quadrant, of cutting AMG, Wenton, in who the about of is me Systematica machine best of leaders this, other are But if the edge and like but First the AQR, through in the at public other number having the in industry. they'll intelligence", terms tease a - systematic which and learning some the of words, best absolute proportionate

the investments we feel we sustain should collectively, So, absolutely like, and make making generation. we're this do should to alpha

Bank Our of question of from Carrier with the Michael line America. comes next

Sean, just backdrop. to shifting over M&A the environment and the

bit a to get It's guys wanted a an of been update. since done little have time Just deal. you

so paying capacity [indiscernible] in in much you ENI So of the in on have many there, adjusted just terms guys what in what some look have now, front. if potential just if some When done terms see level remind down economics out you're you you do And maybe also would the the you have say, terms the and past, opportunity us the that of we of I or $XXX at income. changed the at and attractive seeing get then of used both how debt, opportunities EBITDA or know to Jay, but million you like transactions net all. maybe valuations?

So, any update there?

Sure. busy. Well, are as we I said,

do our to as But you working on auctions. avoid best of We transactions. are a number know, we

highly is outstanding when to tax, a banker think boutique is our firms of I relationships in at ongoing a maintain are strategy, world, uncertainty, current in planning discussions, and and until say a factor then disciplined. wait We There's the playing regulatory highly pursue go to best the looking of because firms say, who send point. that and transaction, can us this see just not are book. this the we and and but And the succession boutique always especially highs, I all-time of excellent to we I build environment, probably with geopolitical, supply the at markets course, out are selective in would are the - given terms

pipeline. absolutely we're as Yes, forward their and there sending you're building, maintaining one books? I'm if pleased individual relationships and are transactions play, might inevitably, partners where So, dynamics that's And these and few, the at with the uncertain why much markets. negotiated we're couple that circumstances of the But that's given as the and take a are not an one-on-one expect that the - working world, on own very with but bankers transactions, longer.

appropriate deal a and contribution to us, working feels quarter that in turn debt that say, be and the short stronger, medium Jay, opportunity our In on secular I strong overall term, just as earnings may So this, that and investment. position. way, exists transactions. that for scale tremendous to down given good us it is long-term And generate our we're relative business any would or a forward ever, standard our so repurchase good - not ever or happily, pay to to whatever. will reach an can given lower But and feel investment a once think pressure allows to we're contribution. going We or to is and about stock to we the which, feel the like more the our for than strength announce organic and we I'll of growth, business very pay

Yes, balance on and then noted I'm glad the you sheet. it.

debt that repurchased built to accretive in the flexibility, us, we of XX the We've a opportunistically lot high-priced I balance positioned maintain really think sheet, to for last was us. so and we've months, and capacity.

progress on Sean you until close in first the investment a we're pipeline. announced the the new transaction As look fourth And quarter, - our wouldn't we likely. it if as said, even forward, making quarter

we full this business current just we cash a fall of will flow we a transactions, together quarter. built additional worth ratio to X.Xx capacity we've execute below the our a certainly then look And with with billion with built. leverage capacity year here basis, see on going So, at it can $X over that of that's

of additional, I capacity. it, think an have leverage call we just $X.X more billion

repurchase the maximum obviously shares, is wide will remarks, expect continue transactions, do which to to And capacity number execute mentioned we consistently have on $XXX this this size really et I've accretive. cetera. prepared as million transactions, my we in of a In of in So, at transaction we quarter. to point meantime, range of

So, new in through delevering. we are where only scale scale also and us allows in capacity not to but a build place do investments scale also repurchase our and

Patrick from question the line Davitt Research. next Our with of comes Autonomous

to market conclusion And But specifically? you is the I anything I your think of to have thoughts there or on innocuous. is good pretty think that be white come particularly would get your the the papers kind treasury that for curious in bad business,

around learned legislation pending I current on time because interim gets dramatically, think it we've indeed too in even the seems if enacted. the to to all spend much change environment not it updates

So, would would say, I'll that problematic. join, seen is nothing what my and I to ask colleagues say we've I all at

on won't would have, I be. just depending to yes, that's again, lower do how about you to it, which, until that wait worrying I too of a close tax speculate financial happened maybe it the mean get - we'll might and pessimistic, time what that's think we and I of taxes. we a would to Jay can, quantify it. enacted frankly, markets, been... of good I think, or think actually being corporate be reform, on see for course, describe magnitude what Would, something spend, I thing but and us, lot

looked I or take specifically I to to opposed have asset more mean, management in us other as Yes. it appears - at look did it And of an within to impact services financial AMG. a that, think, I Patrick. industries

most even all reform, third regulation think in papers a except so to will could white have to. to At if I kind point, material tax we're these general, which seem right, and other for us, which second financial of reform, order on a them, positive. tax far, does of Sean's react has not But us mindful and or we a to of order, change. be this needed impact significantly impact give potential us, time than the

Lee KBW. question Robert from next a Our the follow-up of is with line

the kind over in outside [indiscernible] and could just some building - either lot some of way around the markets institutional expanding a or of thoughts obviously, the invested us But or the the your may When look your if you whoever there? kind business U.S. mean, you of about on maybe outside And you of, you initiatives be? - of I retail have U.S., maybe U.S. update the the your, talked you I'm years some outside or investments guys [indiscernible] are, have curious.

it by The growth. think, There's answer I an absolutely. and time, is, take a varies strong time, at to But the marketing retail, very Not it able it's a to available. area institutional but take a retail to, level be mean down. be to need to market. high level, and we yes, I need level pure over over may distribution capability, of a product have vehicles

lot in we've do. so, And capabilities a done building want in But the we more that bit to there's a Europe.

not we organic because going business very growth what doing. I we're - to and think careful be to we're doing strong good, see ongoing is

of you exactly or can we're mean depend franchises, about much to building approach? point. more really very Nate, be we better can't doesn't a maybe list. involve And specific be that is, could capability there earlier and so, different a color even little are somehow, question the we an to making defensively kind on we And could But on going But that provide on a more imperiled, opportunities, is to it's investments going former. not our I pursue that? offensively, how this it's like think responding high transaction, see it is whether it where because it out market-by-market circumstances at involve it the

said. The would add, with just what agree only Sean I I and thing

Affiliates, of We on behalf doing it we, of some are packaging some capabilities. and Affiliates building our in have been our

- and more execute as that sophisticated intermediaries includes But with retail global to team into the of clients global you've is their I working to is other then been increasingly about, specific have talk sort them. of Some geographies. heard would bring That of intermediaries this us parts serve to largest we've we been against market. the

- them platforms, some again, those one actually right? have so leads sure the conversations in things the And working to we revenue across large, product we with as so, intermediaries. working making have us global those of into of opportunity the been taxing entire that them, their provide ability, And capability is build we on alongside with needing that sort to

specifically, place, been the doing that's some where So work. additional have we

questions. any gentlemen, of end remarks. final our time we the have Mr. floor for allowed Ladies and come to back turn for I'll Healey the to

quarter with growth confident our in to and morning. of continue the to and for We're to and again value consistent Thank with us our speaking for create results shareholder joining our the affiliates January. shareholders. ability return you existing look pleased in you Affiliates, capital again forward this through accretive new to organic We investments

Thank you. This teleconference. concludes today's

disconnect Thank time. may your lines you at You participation. for this your