Affiliated Managers (MGR) 29 Jan 182017 Q4 Earnings call transcript

Greetings, and welcome to the AMG Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

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

You may begin.

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

everyone. the over for fourth per growth XX% full-year, morning, quarter periods good and XX% reported AMG and earnings $X.XX for record the respective XXXX. and share representing of of $XX.XX the of Selene, economic Thanks,

grew a to also $XXX under assets record billion. management Our XX%

the ongoing results cash the our affiliates execution generating investment with excellent net flows of and client positive reflects including strong growth, growth long-term strategy. the organic our along for year Our outperformance Alpha of

in scale nearly to we of and to We're the management strong the billion confident generate with generated earnings ability $XXX our growth and are the year. forward. XXXX we increased in Given continue under power assets organic with going having increased in diversity pleased our business, growth

results across to in notwithstanding periods for market market uncorrelated our generate Our and ability resilience positioned AMG’s rising optimally market alternative volatility demonstrate equity growth exposure which a and cycles. strong our provide substantial business are environment, to stability strategies, to of

net year, to were flows continued industry client generate wide in We actively managed both strategies. notwithstanding net also outflows cash and during quarter positive enacted the pleased the

ahead, has of environment are for strategies, product set. Affiliates and Looking asset around we're clients equity alternative increasing of in sales global a record anticipation dispersion of enabled quarter fourth to seeing the seeing The differentiated increasing returns. for quarter world seek momentum demand continue of and streams business return our as described across us further strong we gross was Alfa oriented an

in are assets. of global to today fundamentals underlying for their and we're growth ongoing opportunities these non-U.S. both the seeing markets regions activities, expanding investors XX% and in Given non-U.S. allocations our for U.S. many which account

alternative and continuously boutique of relationships. [ph] manager of addition, going fixed increasingly growth diversified, the but offers and market. values, AMG strategies, which equity their range with systematic Alpha our equity alternative of the there broadest Alpha other portions assets. and firms concentrating alternative their clients seeking increasingly are advantages In traditional diversification we diverse specialist relative recognize products, clients for of managing nearly in private of from portfolios, most accounts multi-strategy ranges Investors Global true see income some forward including one across uncorrelated strong our industry's the XX% product are sources and of

we be Affiliates necessarily in clear offer is performance distribution strategy and won't and providing our and specialized managers alpha centralized for global distribution generation combined boutiques. enough reach. it trend, ongoing distribution marketing AMG’s our the product this which Through ultimately complement future and investment global which smaller Given breadth while our lacking excellence the resources of of clients, Affiliates in compliance focused also efforts, global aligned the scale advantages excellent

of these relationship relationship, institutions Affiliates element are of attracted be large strategy to our intermediaries' with an they will across strategic we increasingly forward. world's As growth and to single broadest and and that classes consolidator the and point building kinds manager AMG’s are of relationships event believe alpha-oriented important organic going array asset boutique

investment. to Turning new

partner secular our through opportunity growth value two investments the track a boutique excellent permanent continue to AMG the outstanding additional as a to Given past to has Affiliates and shareholder decades, world. in over record around create earnings strategic attractive our tremendously incremental

Given we independent unique environment of recent a outstanding selective remain of we and our performance seeing market strategy. With the execution by to disciplined the with the in partner as the tax position law, and are boutique highly competitive strong favorable new U.S. along many generated changes investment new investments choice firms, opportunities have in firms will and diverse and growing our pipeline. increasing

with positioned XX% the scale strong Reflecting to our shareholders our source dividend to approved consistently of authorization. a In our business, share board increase through our important increasing additional meaningful our an recurring confidence of prospects, repurchases. shareholder in and of directors our is value share forward along a in flow has we repurchase dividends and return given free addition, cash are capital

with reputation discuss continue strategic Affiliates, through global relationships expanding firm in growth to business Nate types. and years Looking that, to marketing generate the capabilities continue outstanding the turn Affiliates avenue of long-term it With a to our create building to strong detail. partner and results enhancing our ahead, boutique our shareholder of basis We positioned growth our of global to to in breadth key and a elements outstanding reach on growth AMG with will across all more our additional strategy to client is clients look as our increased the unraveled scale well forward I'll to along and come. across earnings value

Thanks, and everyone. good morning,

fourth very as to net in of and excellent our the good flows. and As Affiliates positive markets, with AMG Sean their added participated said, records Affiliates quarter AMG growth added together long-term our the track ended the we year rising

moving momentum business execution pipeline. entering at continue across diverse XXXX absolute excellent with the actively are and all is our and performance Affiliates both development We stages of very be range of great to of AMG channel relative our managed the strategies, level team the high across and of

Before of quarter. from profile last our turning though, highlights flow some wanted review to to the the details I

result that of standpoint, size billion against. best executing While From opportunity with good our across the sales the XX as the types. of nearly net sales really number a was positive we’re gross all client is execution billion our this understates ever of a in X quarter

While we did some quarter. winds lumpy in the

as accounts also of redemptions in in We quarter significantly the clients a some rebalanced partial lumpy appreciated. that couple had

quarter distributions this excellent harvesting our also loss Finally, within capital retail and including and by business. impacted some sales was gains fourth dividend seasonality quarter tax

strategies, alternative mandates, across credit but equity, diversification see As illiquid we pipeline very convert, able with activity extending high-conviction performance-oriented to level only our I and is sophisticated feel of diversified multi-assets about private XXXX. and grow. and tremendous and opportunities RFPs a intermediaries. to bring is investors also estates, Overall, opportunities continuing fund-raising products strategy that real our we alpha we these one to are co-investment enter and said, to for and good product ongoing increasingly leverage and is institutional strategies. providing beginning infrastructure, as unfunded finals With in the not across pipeline we equity, high our And forward to true scale

turning the the Now for quarter. to details

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

the will our level to aggregate dynamics underlying hard the sub to alternative are we return continue see and addition, discuss level. In at that to dimension flow product category at

and to equities, which account continued our private across Now and starting our by infrastructure, strong global as private regional infrastructure, within secondaries track flagship of as Affiliates, and their energy. in long-term such increased created business categories across in real offerings our XX% assets, a areas The franchises and estate. including real Each their EIG opportunity. diversify Asia, broadening growth extensions scalable product including alternative strong credit, and with strategies and such Pantheon, primary organic their equity of these Affiliates product and and Baring those legacy lines assets, assets their of complementary these real has breath records for co-investments, growth co-investment flagship strategies, opportunities has line

the across and firms quarter. the major AMG. HFRI make were profile enhanced expand Relative returned fixed to Value to these Index reach Index and value We Hedge distribution for types. In geographies X.X% substantial their businesses closely will believe for and growth most posted return indices income also is what these contribution The HFRI Equity product new X.X%. We’re equity-relative a positive working with

HFRI layer was of X.X%. Venture-Driven Index On an the Activist other hand, out the the loss

market our and multi-assets relative terms category, our betas the had the performed included Composite quarter. industry very First these returned Trend benchmark. quarter to the strategies our premier, in products key Quadrant’s all multiple returns Outside its AQR, other backdrop, well by continue alternative asset Affiliates, these Fund multi-strategy both XXXX. risk-bearing Capula our as the as good and SocGen and beta the generated also start Weighted of quarter classes last from strategies strategies peer In group commodity and outperforming Index Systematica. good returns in Affiliates’ of mixed and good across diversified ValueAct categories In particularly ValueAct But products quarter strategies across XXXX. at the style key were performance a returns systematic X.X%. continued BlueMountain, category benefiting well strong multi-strategy maintain of excellent very and and quarter Between in X.X% after primary that Products prosperity and with that long-term were record a into track strategies. most rising absolute index, Against AQR’s good HFRI for and of in

affiliates our index relative trends absolute weak return, in we performance continued the outperformed fourth obviously we their early year the absolute positive were index. with in high-quality and good mixed quarter other Affiliates Systematica Amongst overall of although has fourth generated while pushing territory. all the into While the the the dated. returns of these in first to managed products XXXX, on capitalized periods the XXXX three in quarter This performance positive XXXX, strong experiencing the group the quarters

Now turning sales by had in clients. retail momentum institutional We growth organic to both another and our across category. of good flows quarter supported continued alternatives

good positive were are flows While in gross the trend. were very bit quarter below sales net X.X billion

within our experienced rebalancing retail business institutional business. we some portfolio activity and our some seasonality As in

into we other subcategory, and with multi-strategy diversified in reverse, in January, our Looking on and continue quarter this we would the fourth the for to the investing to algorithmic in to to demand be see anticipate a basis, continues to the while quarter improving at significant meet developing be among leaders constituent the recent in broad-based sub-category this redemption, good there and both systematic demand. products performance flows trends continued Affiliates

product strong wins significant Finally, some saw another we our also and interim again. and quarter private set had as we equity closings more in illiquid fund

continue both Looking continued liquid to illiquid ahead, expect good see our outstanding momentum growth and our in set. very pipelines, across we and product

while equities strategy which global by growth in with XX% Veritas index. X.X% our the it developed the returned that stocks markets Against mixed MSCI high in of value-oriented backdrop, for broader for Index to category, and Harding assets, next relative quarter those our quarter global investors Browne our rewarding outperforming, results great business sectors affiliates generated as with was the approximately with strategies Tweedy, the Loevner and underperform global especially flagship more characteristics. accounts World a Turning

MSCI benchmark market but AQR the larger excellent track a Times Affiliates, outpaced a Loevner, However, in their and for very the quarter, strategies records. to XXXX Emerging of overall their records. with products Veritas up AQR, flagship and continued but index, whole in also with continued excellent outpacing Square, Harding posed long-term was index, group quarter. the X.X% Harding markets Among as emerging indices returns lagged its the very long-term performance maintain the while Trilogy track the our Genesis Loevner strong strong

we have both equity and in see quarter and flows, activity the a positive improvements we to category return a market of very emerging continue products. behind meaningful third within to quarter across level with strong to net developed high global flows Moving the sales

investors which Sean As in shifting we bias, trend given the be from investors away interested broad-based from country a recently are in away home U.S. US the ultimately increasingly are said equities, recent rebalancing further their in relative to market. participating performance but seem in

and excellent long-term get Loevner, new of as development products Harding of significant as level and Veritas while are We’re products, AQR, records number beginning of as this also have to primary track product unfold very but Tweedy, well-positioned continues maintaining traction. there Browne a we their to

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

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

have GW&K, of and with an We outperformed their number flagship River a smaller strategies, very SFM Frontier, relative cap largecap US good affiliates, across many quarter. products. performance of their area SFM Yacktman, and in where Square, including outperformed and Affiliates Times our Road, including benchmarks this also peers strategies,

quantitative equities, billion across for net demand factor U.S. relatively sales industry. actively in profile impact managed said outflows and dividend retail of within in the continues strategies, and redemption and outflows, muted the activity particular capital Now seasonal saw continue our and institutional $X.X U.S. our business. the by within search institutional be within we an That gain to see some to retail strategies distribution improved offset we as partially activity growth

in of activity Finally see multi-asset of which the as affiliates. remain quarter management of sales well as moving XX% number income Affiliates, were and speaking a billion the this wealth multi-asset the cycle, fixed is are of to excellent segments had perform and ultra-high worth flows provides our specialties, an three our and evolving largest number client our assets the our growing and and well multi-asset versus the management one in markets developed most number and to of The product the strategy portfolios all to and continue outstanding multi-asset product within at continue wealth we especially of our across focused category products. and client new with as good significant combination providers we’ve of well scope business We as of opportunities positioned management have dimensions growth to equity. important encompasses products and across improve, a other our mandates world scale of across business a wealth market segment accounts with together of our balance by for specialty, the we for the needs continue as some Affiliates $X.X excellence global performance-oriented net category, client net of producing an affiliates, broadly well benchmarks to perform Affiliates, good within of alternatives The clients. global of manager we basis. their Together alpha-oriented us in income business Performance diversity group meet including customized fixed across by very the geography. to emerging we set category asset Affiliates, this

with in of group. And to to turn and we position boutiques discuss growth progress, our as said, to Sean very Jay financials. our Affiliate that, best continue opportunities and the the world, As we see good across continue we are tremendous significant let ahead, execute, we to enhance making our drive to partner the me as choice

you, Nate. Thank

are increased growth and report for and of has organic of fourth strong scale well by under growth to from we AUM in solid the quarter. changes U.S. a continued and we the fees and power tax in our contribution end management in strong earnings positioned the pleased billion driven meaningfully and beyond. performance quarter full discussed, contribution $XXX positive from the Sean for and at law, business year a the year fourth and growth are earnings the earnings With As record assets XXXX

the XXXX, U.S. the in $XX.XX earnings $X.XX moment. law share a for changes earnings of quarter the performance tax XXXX. $X.XX Economic $XX.XX reported quarter earnings quarter a net XXXX. share in per fourth total fourth GAAP On fees the saw fourth for benefit per we the from I'll reported excluded which for economic in included for of one-time our per we for the for $X.XX describe that and you bringing to and release, $X.XX As share basis, of

performance to metrics. our Turning

revenue the was our and and driven $X.X a in measure. both no calculation and growth organic we fees operating strong year but quarter, billion markets investments. by fees, quarter effect Aggregate aggregate XX% fourth of with together aggregate XXXX billion in remained this alternatives the the $X.X full and to for full the there to new grew respectively, During change of primarily

year of performance XXXX, assets For ratio fees. increase the basis from points the full reflecting to to aggregate our an year-over-year average fees management in increased XX under basis XX points,

in fee this as composition saw from Excluding a our contribution AUM also increase modest shifted performance products. higher a we towards alternative ratio, greater fees,

increase billion from by ago quarter, the by year in Economic adjusted from to year an XX% XXXX. by the fourth full net XX% the million EBITDA a $XXX.X increased grew year X.X XX% XX% a million and grew million $XXX.X XXXX. $XXX.X to the ago, for to year to income for For quarter full

Turning quarter. to XXXX excluding to and XX.X points management basis year under fees or XX.X excluding average adjusted fourth for was basis points, the basis this points, assets performance for performance the or XX.X more specific modeling basis of The EBITDA was fees. XX.X items ratio points ratio full

of Looking in to expect of XXXX, ahead, $X.XX first a performance basis XX.X between range per reflecting share. quarter $X.XX points we to this XX.X between be fees and the ratio

year fourth interest XXXX. was million $XX.X Our share for XX.X expense the quarter million for the of and full

We to for quarter first million million at expect interest XXXX. $XX expense year full flat approximately and remain the the $XX in

million. under a which million million primarily taken fourth charge from of $XXX.X at of was to share accounted elevated Our quarter Affiliates XX the method one due $XXX.X our for impairment method, the Affiliates for non-cash was reported amortization including impairments totaling equity equity

impairments million the million for method. full from accounted under equity our amortization share XXX.X was including and XXX.X year, Affiliates the For reported of

million quarter million to first amortization year the reported share Going approximately forward, XXXX. XX we our and full approximately expect for for the return to of XXX

our U.S. of This from convertible one-time effects our million, tax In material to benefit changes a primarily of our Turning GAAP release, to quarter, repatriation in law the not liabilities tax the our a cash to changes our taxes. with flow. we regard in in impacted cash With tax the from non-cash intangible the changes the XXX.X U.S. security. were tax and our as credit in our quarter, of loss assets income. was by excluded you U.S. tax fourth in tax these the in law. And saw deferred the economic tax, our included and net net results affects associated resulted fourth amount with or re-measurement the which rates

effective tax X.X% rate GAAP the quarter Our in turn only and for negative the year. full was

purposes, GAAP modeling our our and rate. tax tax be XX% XX% cash lower we the for and expect and forward Going GAAP cash estimated rate to both tax meaningfully rate

$XX result, run a anticipate grow million As to rate tax overtime. we is which in expected savings,

negative For XX.X positive XXXX the million of intangible included related for taxes. deferred the million, and the effect tax related fourth million were which taxes intangible XX.X quarter of were deferred charge XX.X reducing impairment

taxes full payment to in the related XX.X the the or included and for respectively. million contingent We XXXX. year approximately full million related deferred non-cash were X.X for which million expect approximately XX year, X items quarter of and intangible million million be expenses our obligations for fourth for adjustments X.X the XX first to Other economic quarter million

per million X X year. economic we forward items modeling million approximately other to look quarter be purposes, per for we or expect As

and was Our adjusted the we expected be approximately quarter. million to million XX.X for for count fourth XX.X quarter weighted the first average share

total cash and balance XXX our bringing to pay to the million we for repurchases Turning year the quarterly repurchased XXX dividend. in of shares our approximately million our we in quarter, fourth sheet,

cash cash Board share our in strong flow share quarter and a our authorization first X increase also in performance to of XX% our payable Given our authorized quarterly dividend the business, per our increased $X.XX to and XXXX the repurchase million shares. increased

capital earnings our and rate consistently run our we to new billion investments ability scale and meaningful [ph] returning in shareholders. are X.X given EBITDA accrete growth confident the ahead of Looking business, to of with will of also over growing to generate to continue significant

turning to guidance. full year Now

share XXXX, be to For the of range to $XX.XX $XX.XX. economic we per in expect earnings

range second performance current normal At under in our for Our to Friday guidance to XX.X market the the and guidance average approximately expect model be last EBITDA performance reflects ratio X% our assets XX% adjusted quarterly to fees growth quarter. market basis range, we beginning our management of and through convention contribute the mid-point of quarter points. the approximately of

is We also included first plan guidance. repurchase our half which approximately million in $XXX the to of XXXX, in

expect to count average we Lastly, share weighted mentioned. I repurchases for to approximately million share XX.X includes be XXXX, which our

earnings on our of based not these future rates from the under contribution performance, law. investments growth current always, include new do tax and and our mix Affiliate tax to new the As expectations assumptions the of are Affiliate savings the earnings

changes markets substantial these and impact Affiliates course, our of expectations. earnings Of in would contribution

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

you. Thank [Operator Instructions].

with proceed question your with comes Please first of Jefferies. line from Our Fannon the Dan question.

number that Thanks, the question that for XXXX or year other range. good outlook well the morning. us $X.XX. with as Jay, $X.XX some the as follow give maybe you to just -- your fee of $XX.XX the about first-quarter sounds assumptions -- you guidance, I looks I to regards things. flows $XX said performance guess in up other think for to as general like context to on you last a guess, the It couple

address thanks. quarter Thanks start, Well, a in the I’ll Yeah, me Dan. first moment. Okay. let

record in So, X% which us, AUM And $XXX for models about based point $XXX convention the the thereafter. billion up at blind quarter but we nearly Quarter-to-date markets. start know on about model put you let as obviously don't anymore model which by is We just me assume means quarter, for our per markets this our convention is in billion again. talking our just Friday as is the start at the of year X%. market

over track our you that we've in upon indicated can know indices based the that our also time blend market innate script. You

gone we people year, performance high well If performance systematic anticipate about aware the for at you but we're in all of mentioned year about higher. I XXXX. we very for average AUM could that XX% points about be full at but at we fourth XX.X year and we see in obviously able we've adjust EBITDA the to particular and us we I the level a fees, a and had basis also track fees. starting contribution XXXX business, throughout and In quarter that good are our think XX% from had diversified contribution that from the across sets that

As we to with did respect year, we updates last isn’t seasonality expect business performance talk quarterly fees you about seasonality there give because and on to performance fees.

Lastly, the like first We’ll we're to $XXX we we year model pacing the our have in did last repurchases going into as reflect indicate million update quarter put forward of half. next repurchases, for we the on well model, new in up our us expected. as but billion of investments. capital only we in flow are as new scenario $XXX $X we clearly after million And dividend our tax putting cash with repurchase have of to you

the it the that the be we year the upside million to So, extent in early $XXX model in deploy is not that of just in our would year. throughout or cash,

do this a is we So, think estimate. very conservative

Now to question. seasonality your

have year half is in going which the up but we’re frankly, quarter. $X.XX to look with for so performance it recall out fee, good first shaping to quarter a and you like affiliates to $X.XX certainly we up guiding first the fees together our in for number the ago really are lag $X.XX fourth is with from As a did first quarter come one performance performance in the quarter bodes of well more it

fee given the of the the doesn’t the fourth you put as could to XX% fees be neutral mid-point quarter be of like where well. capital quarter, when second higher down on lot middle we a a course the and back higher could to lot a outside and of estimate tends second average seem quarter first stretch be for too the off largest year thereafter. an at of that it least coming range reflect performance of the or scaling kind that Just the in and again, at you are But the much our performance third by we contract opportunity performance most reminding

Thank you.

line question Citigroup. with with next your proceed from the Katz Our comes William of question. Please

very maybe the terms side? thank reform are that facilitating questions. doing. we that doing bit the that behind a of or in -- deal the Jay obviously pick you up I as much tax of a taking for on the apologize Now new And how opportunities actually on voice. pickup us, you give Okay, Could you for have last Could on hoarse well. they markets what Sean? a are then the maybe be seeing us of may changing dialogue sense pricing point,

Sort where of know well taxes that the we we Thank maybe on you. both now about pipeline as the talk associated are as pipeline. that pricing with

that so an the a prospects the and sure transaction firms relationships of there with happened them, our opportunity firms along value law but and an over built It’s this law strong with law, know last is Away but a bit transactions. nuance, that certainty first am value get would for I the it’s direct the the from say shared dynamics the commented more hundred there contributes transaction $XX was would tax interpolating is a tax Jay we of buyers, value what new of its on you impact top these tax we enormous from secular of competitive sense on which contributes take us. at tremendous the universe Bill. billion Thanks attractive is opportunity the tax of you opportunity, clear around in time, which we real there that the if that law the on, size effect earnings The a along investments would would be say set have seeing entities year is succession-oriented to so has boutique it have the I the even over part we’re and in of to and far Historically, more opportunity I that AMG. some pursuing will more and thing for be achieve I there been. on who uncertainty that to removed what expect us there interest is is to a I for with the with non-U.S. realize sellers in backdrop you environment am and just last firms least increasing were they and are the of an you firms strip if home that an country to new those it rate end creates and our and level those firms size which what now relative attractive disadvantage compete firms ways the very remind ability we non-U.S. for continue in at market to accelerate that very of excellent to with with. firms year, than and I and and is the a actually jurisdictions contributes course inevitably inverted a been advantage their rates as advantage earnings favorable had that ever sure lower our of

law, affect, overall think said the the positive of I as I away direct will from tax So, the us. effect quite be for

your line Carrier Lynch. Our with from next question of Bank Please of proceed Michael question. with America Merrill comes the

are of But just dynamics. mix, the organic Nate, a look and on guys. just for we fairly When growth. alternatives flows both the given you. international, some Thanks, on the the positioned, industry maybe you Maybe question well and at your

XXXX. you give the are of you across demand the you performance retail look on around side. And challenges those well, any things are some where where then in seeing distribution when not some the performances of where some the areas may or If you can may that some there going color all or XXXX rebound us seeing versus pockets have impacts rebalancings, seasonal affiliates, you are

Perfect.

in I'll kind So, remarks, let to this very possibility. you hit strong us try were our so prepared me pieces, growth say -- obviously heard these of all sales as with start quarter

seasonality they hit sign and the public that positive to or which, to on very about but try of One three kind that of if I’m dimension you growth together some through that of seasonality see products, and at of So describe in dimension both things, was the my well. side, that institutional outflow both you’ll I’d these chance and so some across that. in three a And numbers, in impacted also also and things came in showing through line here. X were the all I second. am say there rebalances of came primarily points then and retail of is going work, the were that was billion I’ll to up institutional kind some us there redemption if as well going look it There is actually all across kind as

be we the equity invested alts take seasonality retail But to the there tax down much and when kind kind about law of those can maybe in came is book, managed also, across and in is year some that of selling and So, you which period which amount. of that’s lots book, that distribution something that in through of retail, will been products of the order for have talked kind appreciated. of there primarily think a of like features, was and the

the saw first So, flows losses. far, those taking the happening at exactly We reverse those then if into in look year. you And people we you’re quarter. that. what’s seeing so And were last saw January thing also same

into year. those flows of seeing kind You’re the reverse

come just set the other There is retail. expire to the the lots where because and is up was have year-end products, on there to institutional. ultra-book the product have, of piece first that in right also some quarters. or tend way, seasonality locks and is at lot But January really, multi-year subscription might a at the single in year-end. Xst, year of is or you that’s now in lock, and kind So And

as level that rebalance. being sizeable an to a we at used rebalance reduced mean three, and kind amount. those there example I very of just diversifying a client one side, in at the couple, all And did risk balance on year portfolio significant we the by had So, client and piece have well. the is this mandate institutional then the

were there got that. of things you So, those about few a

in the that��s You prepared Especially the question, this To kind in put as and really We part that kind but look feel of about have equities coming we lot global in sort being products some things really liquid scale is of developed and three. all kind product, X and our illiquid well. split optimize well. of interesting interesting sort as of a, book heard also you the both also that existing I also product as multi-assets, of we hopefully remarks on. of look then range, ahead good billion there that other the new in And side. equally in of of a together, among the alternatives adding,

So really those of are the areas, where opportunity. we see lots

side, a -- challenging. demand to this performing heard as a think But is well. dynamic we equity area, about talked continue number have the industry you number obviously we good and industry face, of as U.S. just us are that’s a market there but very level where especially say in in of the I products On dynamics there place which is

you. Thank

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

actually if for the maybe us Thank there? impairment quick Ryan additional had it can't you came took you filling in you I is could from, color charge? which Alex. give why on charge. was any us take a Bailey affiliate wondering Actually, you This you. if the And speak question to through could I

Yes. Thanks.

So account we upon our purchased that's amortize, time, over just again the time and extent to backdrop in of based that and the -- point and original the intangibles assets. for affiliates any the

growth in of is we new what clients. count don't accounting the So,

To say So, specifically dramatically just but I I we up equity of they affiliates, so on think a our is you on a affiliates again as small don't conservative not equity it our accounting original of earnings. our know this marke affiliate, we an a based charge method yeah, only client we it about and clients in sum broader new it's grow. clients. been to the can just grown want of $X.XX our describe over it’s have the non-cash years to take its it one and all contributed in And as affiliates perspective the think one as affiliate, then we've of here method accounting the first that and upon charge given bigger this

different have charge will have a we're material account give economics big an little it not context? not -- business prospects want AMG. that benefit any and and confident more to you environment. does investment that did it's has Again, it frankly Do a So, from to a contribution. This just doesn't reflect

I And is, just again, it’s of billion Jay say is non-cash account I its the firm equity but sort and Sure. a this really to frankly. charge doesn’t a long-term Ivory bearish have track term. of exposure. -- the reemphasize the the roughly want a confident loan think kind had couple as the They book medium very much of and firm, over the constructed years, of good short side being in loan of that long-term to point short and long, and describe are The couple this short, us side, a of just of both bias last is we’re more conservative over it but kind which how firm they AUM record, they've will and on they value-oriented mentioned, had also I than that

really at level. but to So, process made this the track people the we’re on point, any some working confident take some AMG great forward, withdrawals long-term good very and also end, the obviously reemphasize just that look on together positioning which them. performance material we’re very But to on firm client best and investment then begin record, we’re a confident way overall, has not are and and challenges to

Thank you.

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

taking for Thanks questions. my

little update could of look on could helped that maybe -- helped flowing sales, the And initiatives But little in how we sense -- bit maybe much you a some you to of attribute global more on challenge. -- where update us I it's of today distribution? your then us we us that at Just AMG believe do given your of if curious where being your give a a environment, bit us also on by funds update maybe gross or a through retail being stands? probably been,

start to add. ask Sure. Nate and then I’ll

I I over and our about specific the the five set think the to talk institutional global have distribution, or and with we know of quarter. flows prospectively contribution of respect years break opportunity us as largest that global described hard don’t this manager in others last you all are clients distribution AMG’s our I net quarter been than much plays to true concentration more $XX the very think I advantage. out billion think I involving of think global increasing the and trends effort and their by

We distribution build continue to and invest global our effort.

I to also respect in have in we we is very our will positioned and and the feel I important beginning and Obviously, two, very feel in date. but later it. With I the be across well AMG forward. that? is Japan material which traction seen to give we’re including but AMG I flows anything will performance year, funds to good do U.S. an also and we’re think this Japan scale major retail AMG’s expect pleased their relationships want good level we I about there major Affiliates, space, think open most I about you to you concentrating Nate, the think brought update we’ve good the are or with know positioned would difficult our believe a at increasingly office most recent overall I around distributors step that to news year are and competitive this industry is how the we’re business and add funds the scale very

and third Well is three think impactful that where number everybody I and our the maybe in marketing I and or think There the us that with with is -- described it’s increase. institutional the are more to or lesser interactions outside greater where into all not, in of well. all have the as infrastructure [ph] bucket and their conversations actually level point coming they leading and growing U.S. is And kind on plays of one are is teams categories just also is a kind The whether retail of but side intermediaries sale centralized we're that working our just quite where them both collaborative directly great the sales, but wins; high buyers then us detail. D-side third one the infrastructure of the then point across a in Sean high more and theme themselves, are the own [ph] the pretty we’re Affiliates relationship but more, see and are the are centralizing, side and some is U.S. to the really just one Affiliates level one because broadly one tracking those many and part where of continue is especially services, the I increasingly on that’s coming extent is to are and of the are incorporate which is very flows, think Affiliates recognizing just was distribution working volume the on and really and they

Thank you.

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

quarter? it of And Good news morning. then a would private know EIG equity lot FS mandate in are big it like feels with Investments I big in a please if the in specific, yet to too But I the the you equity, private about winning come. subadvisory talk In the flows know but flows just was is don't December.

or billion so. $X around was number the think I

if will flow into picture. better or the to how flow Thanks. understand net want that Just

good business realization had what on other and realization, level quarter, wins illiquids general, relative, some So, as went of infrastructure, kind just But real the of through in heard those of kinds our which we when I relatively illiquid you I’d as of in side. PE PE again about very as weather as broader kind us real in say, including describe credit, the describe estate quarter we assets but sizable say well. kind think we certainly had would some much of a things I’ll you of activity normal the than the and

funds. on you growing the things would what definitely building clients side, but would components of talk I also the some rules what So, the that. say is both in people at in alluded, a of we say dynamic. size as legal level, say and flagship is can extending let’s requirements of so say there and duration, is. main highest those, of the Obviously lots about those and of those, both I about the kind is let’s pipeline the it are, of can't and confidentiality quarter And like that bunch sort and of what But have that’s both

We’re there to starting seeing separate And also interim kind market. additional account that’s that. to funds beginning also, is building some alongside closings, then see some really of we’re a pipeline

which all places our is in products as better couple trying And frankly, to than set, across of and people predictable of opportunity. about, figure time cases, is well are a intended are and to exposures on expand them, of some of these these over again period are think complicated consolidated place mandates are get where these kind kind to it’s multiple These they to theme in that of the a by even across of some fashion because actually there out and frankly this in relationships long programs, multiple how Affiliates and themselves. other mandates, into cycles

separate At point very extensions think plus good account as investments opportunities you seeing some many, of thought been also, And kind Affiliate. we but expressed the important think closing, segments pipeline get calling these these complicated highest I many mandate, I’d about programs. say, we’re between that large I multi-product final these overall is, separate quarters. and extensions clearly with what of the level, product there you some of the sort gets once some momentum because think the line interim in as sometimes and obviously separate additions large ones, think in account is customized extending coming pipeline line programs and illiquid product and the traction, is it funds growing, especially those here in But account have that then sort three sort activity. can again line both funds and about is, of you blur, as So

So, about it’s part quite of so the reason good feel them. why we

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

Thanks the Good can bit gross talk focus comment private bit if little we raises. of could of you fund back realizations. a dynamics equity morning, just some a folks. Maybe flows. for on the the on the little If about

that. originally think billion you $XX from were I about indicating

that's outlook. expanded think original I since that

equities. raised then gross side. gross that. guidance, the your is sales can Double within comment picked pace of the nicely And looks you've for -- then, looking what -- Jay, Maybe sort like for talk rate. of pretty so in trajectory. quarterly sales also of maybe on far about what then XXXX run flows within the the that. range If your you it up driver US just XXXX the what like And the the it's And on

the, I’ll the, year of all products. of first parts try to capture, at least

think larger it the which I So, would pretty on earlier way the is I'll the extending. it question, illiquid describe the is way much I to one, describe and definitely

do sort think way describe And to kind hard, we’re because [indiscernible]. of a is, it’s we a think a going over exceed, billion it the finite I of period. I XX

look [indiscernible] just XXXX the the and think think of exceed growing at be will kind going schedule is some will we number. and happening. looking be contribution again programs extending and certainly and it of these both That’s… mandates to the you We’re I of if in larger in -- the it than are think at But is, it and that XXXX think contribution I year-on-year we that conversations kind

I is the episodic, enduring think think, an than rather that’s way about I And it.

Absolutely. Yeah.

think kind to U.S. of good a frankly, sales while of our think second a on saw equity, U.S. sales where sort coming -- growth sales there, described continues be So, know in better is we I bit factor I describe equity, of the strategies. as think we we on as is you you had little as right, then And coming that's first from, more right, of the equity part. to mostly kind see to the piece the overall growth and bit or institutional it going did redemption growth probably challenging, from and [indiscernible] I

note and business. etcetera it of capital while seasonal have distribution kind I on still the dividends it will there's that within The gains redemption side, other did impact retail improve, the

we improving dynamics as an do So, see overall think I described. trend, the think but we I

good you increasing want we opportunities Behind and very there heard quite actually to… the equities flow you positive improving, were your prepared in global see Jay remarks, and category. that question in our do trends as in

of up capital. I the do on Obviously, will have everybody - guidance just range well maybe some is aware structural level, our conservatism Just we Brian, in the always.

in course So a again, will. run point to than if I will earnings, tax $XXX a guidance. I number out will actually not a think rate. while incremental didn't experience million repeat our growth would in grow side, comes that a that of $XX that the out conservative, higher million estimating just we of have will you also number run think margin And is with just on million about there's those we higher refinements that that $XX on business rate that I some prove we our capital

in to capital, our So, the conservative that forecast momentum respect have have flows because and we really have Sean put and we in momentum, really flows some number model. tax to We really but just a our we reality don't on very upward we have with show is flows. Nate also words just commented here is not the

Thank you.

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

that Is I the My US complex, it -- guess US global is we dynamic about. to equity does global Good should bucket? suggest morning. outflows affiliate global redemptions question's that expect were elsewhere within And the first speak? extent you those the part maybe to seeing within side? the to talking the in look around the rotating accelerating on AMG so group, the what you are

I integrated. U.S. is, I the to No, and it think business trends have you the start then equity the and I’ll is, realize works way our Nate add. sure, ask flow answer is not been it's improving is

that in to don't going that U.S. I equity work just that global fundings across aren't And from book. so, be the that there relate in seeing it opportunities U.S. we're products redemptions mean, our to our equities affiliates way. equity doesn't

and valuations affiliates, a optimistic optimistic other about our as and backdrop rates positive remain market home global representing earnings. global non-U.S. know opportunities only also of But U.S. markets, growth XX% non-U.S. is by in greater which to the we economies benefits and country us to relative finally around overall individual partly that especially of between view that equity. but we equities, environment of and the the U.S. is relative you the performance of positive equity is around which eroding markets think our us I and mentioned exposure the dollar obviously decline So,

we’re positive that and of all trends that you backdrop to it. very think I but Do year, to add? place are certainly contributes in in So, a the seeing these want accelerate

Thank you.

follow-up proceed William with a from Our question. next Please question the Katz is from line your of Citigroup.

mentioned that you So early that Are forth if a of you had terms some terms on Q&A. of talk working, a this of of in little the on is we've of Or of and about you lower terms Nate are what your the economics bit is slightly back just seeing are you embedded seeing assets will? these how just these fee in these that rates? prepared strategic in had in other in in comments, Could pickup alliances. some are you Maybe some with in mandates? longer-lived

of level, the kind just at move greater obvious Well a efficiency. highest represents the trend toward

in of large flexibility which of component to alpha-oriented products AMG numerous to wanting with overseen important to an this driving relationship we well institutional as range because think relates array also equities diligence desire challenge these and a itself very advantaged is But a and clients for managers and is especially legal comfort global certainty global broadest operational and concentrating the choice and have is think I independent large in and have the there just products very, alternative. items intermediaries assets institutional reason concentration. a alpha-oriented I of of also around strategic increasing pools respect this due very have and global clients around obviously

of to And yes, coordinate scale advantages going have over coordinate so they specific more because the their advantage mandates, the competitive can an product. can set integrated our of large in answer if together an offer efficiency generation we that to think question on is dynamic But basis, sources that positioned. Affiliates among that you Affiliates and Nate the enormously on firm easily the alpha what these more firms what the but broadest alpha the with can some well of with our is time are around through respect quite there important and although be advantage can how effort you around the be part Maybe most course dynamics matters economics and competitive an about is of address broad. are and differentiated provide, integrated an ultimately our

clients way easier we and the extreme right. one of end sort end think of a places and bit to of about is have do accessing making and Sean a the the intermediaries a of and simple other sort down I in this think [ph] coordination right one on -- of many as range, of At said, sort of execute that many, lives the bitter when those now. clients large we do the And At ultimately, the how both the they streams I easiest clients. our kind challenge fact or is do produce efficiently, Affiliates streams. is their largest maybe collection, when the end largest done portfolios, the efficiently? it get into collection something group, end they I this But the you right. do across that streams the How truly that return-oriented to intermediaries recurrent get need outstanding stream, for that that’s

work couple or So could their easily performance, of in across the and operational base that’s servicing cetera et -- oversight a case for of make platforms intermediary. the that across their entire them and entire the all make the the also but of and infrastructure, we client we can products

we’re but multi continuum. PE talking large relative these many and mandates dynamics these on can effectiveness with with the large The product margin market the of there which effectiveness benefits side, do is, to right. But point can their scale which think access products be the point I the other so side they things. that’s And our we bring those related also products PE on can creates across and to kind especially is, both

so, ultimately client. end of which the benefit the [indiscernible] And

also to margin benefits doing portfolios. it the of have on about the think benefits in you the but not there you both to in and getting effectively kind fees, as So, just about efficiency think, I in so think of it, terms well along it

Healey floor Thank you. the I’ll back the any to for time Mr. question. turn end of Ladies and gentlemen, that is for final comment.

Thank you us again for morning. joining this

for in to shareholder and investments create results the to ability our and confident growth our to with value you continue to existing and quarter Thank for consistent through April. our We forward speaking pleased We’re again look organic investors. with accretive capital the return in Affiliates, new Affiliates you.

This you. concludes Thank teleconference. today’s

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