Affiliated Managers (MGR) 26 Oct 202020 Q3 Earnings call transcript

Greetings, and welcome to the AMG Q3 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Ms. Investor AMG. of Head Aggarwal, Relations for Anjali Ms. Aggarwal, ahead. please go

thank for morning quarter today to Good of us third discuss you the joining and for AMG's XXXX. results

the call, remind we A statements forward-looking replay these assumes differ our results Investor with today's release, that Before Relations of no like actual on could of make to our available call and I'd during of number along of begin, be this our which measures, earnings this reconciliation a a statements. materially on we from of copy obligation financial may including earnings a will and update website call. non-GAAP you guidance section any any AMG announced to

website regularly and our the Horgen, Executive the are addition, to Tom to consult President updated investors for company’s turn this quarter Chief over morning With that, today In an results to posted we to site encourage Jay Jay. I’ll and call With updated Wojcik, Officer. information. us investor the discuss Chief Financial and for our Officer; presentation

morning, XXXX Thanks, good year everyone. ways. and has extraordinary been in Anjali, many an

In addition on health daily structural a impact unprecedented by had actions has will it to fiscal impact that global dramatic and economy, for the have changes lasting recovering the caused disruption the including markets fueled has crisis in decades. lives, a our in significant drawdown monetary and

different a For asset managers fundamentally environment. these about brought have events

active their by generate distinguish market dispersion to correlations and uncertainty. lower superior enhanced greater moved significant a have correlations, We a increased characterized highest themselves outcomes for market the provides new high decade-long from volatility, asset environment for quality opportunity This to record clients. managers bull period of with asset and

landscape changing the as investment management in competitive whole for addition a In the real backdrop is for time. occurring shift a management, in meaningful active to

contrast in outcome. behavior foundational the will cases changes confusion strategic their approaches some Stark in questioning are impact elements success evidences future marketplace, are and to client managers forward making dramatic the of strategy. Asset of which and in ultimately

Our operational integration. industry execute to strategies these cultural and vertical integration, struggled successfully has before; integration,

remain strategy opportunities our in sight years our In similar industry outcome. who and goals alignment industry specialization, inevitably It believe intensive disruption about clients and successful have to for cultural like in and significant during from and client have and that participants competing is client ago not necessary strategic will in during to have and is skill fact, partner may including meet structure lost we and corporate will ours cost founded AMG those not other believe capital reevaluate across been And our in quality creates was franchises successful about product Consolidation We strategy key focused periods the on undoubtedly human entrepreneurial disenfranchises this clients, talent contrasting of objectives. synergy. approach the steadfast industry and lead and of We those not cycles, a AMG choices. period including the XX when affiliate. especially cost this disruption, about a owned to It independent prompting proliferation. their execution investing a scale. benefit attributes highest is with entrepreneurialism

independent management necessary with partnerships are us unique cultures, with while alongside and aspects affiliate firms, our approach grow partnership managers independent firms that owned and do to integration through and preserving returns. to of have that through to business to and firms our model Active expect talent no these has We assets will excess investment proven investing through believe or stood is the that to alignment model to clients, test independent see the delivered to generate investment a best migration businesses continue culture little AMG's client time risks the of both AMG's singular and enables we of and autonomy. most unique so. attractive partner

per $X.XX of $XXX adjusted of Now turning million. reported and for the quarter, to results AMG EBITDA economic share the earnings

exposure pleased business continued period the of generated versus results our to growth little are and run entirely adjusted quality affiliates, diversity EBITDA. of the the quarter, secular by rate driven which to almost COVID certain and our growth. very Client our perform with of that quantitative through prior model, the We our be reflecting EBITDA XX% to we and our to continue well outflows strategies our areas as stability contribute

in active markets equities broadly stable fixed as ongoing where outstanding and performance. specialty and income were traditional with as seen private well we alternatives flows strategies, and quantitative differentiated growth Excluding in have

in months, has investing on recent existing focus have executing and growth set the market across affiliates. for opportunity we on both prospective our our increased recovered As and are

long-term of generation capabilities, succession the We distribution align ongoing plans AMG's to outs, continue opportunistic in to lift next invest seed future partners growth. affiliates our and the through our capital of team development with program,

also Against of even our affiliates strength existing At time platform sales teams backdrop prospects. and close outside have maintain connectivity continue leveraged behalf has more home engage to have valuable the our strategic been clients leverage their affiliates. collective affiliate. to markets, the a unable boutiques to AMG's relationships of most when build fully our We pandemic, with partnerships that our on been AMG's to their distribution of global local

strength seeing our period have with Turning throughout affiliates to COVID active existing relationships, the dialogues levels prospective of are of new we been investments, engagement. our and increasing proprietary given the

efforts the growth equities, approach affiliates as to in partnership strongly differentiated their flexible they of highest landscape. prospective global demand, prospecting to boutiques their evolving independent markets, and the Today alternatives, businesses the AMG's objectives multi-asset over of firms on independent record track enables private in of us highly supportive and firms focused of offering competitive grow Our with income quality fixed and clients, decades particularly solution. long the partnering secular three existing is our AMG's client shift and ESG, light with meet time. independent and outstanding including resonates are in areas and strong

primary In are as addition of in proven to to planning AMG access extend to client well to important to capabilities core market as proposition, increasingly initiatives, our assets, capital offers grow affiliates of all value investment reach a growth which invest succession end affiliates' to as element their and distribution our do prospects.

active confident to believe ahead, and differentiated. firms investing We are more our anticipate firms Looking growth in uncertainty arising when in management, partner-owned ever economic important we AMG's ongoing our these this is strategy particularly highly in in and and than executed changes from by approach industry. structural increasingly independent that environment, is opportunities

opportunities us is by that, our by hallmarks turn to entrepreneurialism our on over corporate its the to orientation. Our quarter. and further with I'll financial enhanced of strong flexibility a execute And before ability Tom partnership review to with details enabled it the of culture, and the

Thank good you, morning everyone. and Jay,

enter and expectations XXXX, earnings our our model of affiliates the visible future for the strength clearly fourth rebound is the we of and in our resilience of quarter the partnership our growth. quarterly As in both

past balance three quarters we took of sheet, liquidity. the enhance continue and Over advantage improve our duration, to market extend conditions to

consistent as significant affiliates to as enabled on our return at long-term flow and executing value to position and strategy, capital existing generation excess well create strong shareholders. growth our capital both to by AMG new Our cash through shareholder investments,

Turning to the flows. quarter with and beginning

the outflows challenged to outflows XX% of a of third provide review of X% breakdown alternatives, quarter, I then including certain strategies within discussion impact billion quantitative quant go persist. driven those generate $X.X contribute and that $XX the our liquid on by vast that billion to in prior global quarters, less through customary our than class, equities will to EBITDA the in client the billion quantitative net areas cash Outflows these flow While of of rate a quantitative $X.X than headwinds basis. performance excluding more $X.X equities of in we continue as similar earnings. and by were strategies reported run first U.S. $XX.X billion, billion asset strategies in totaled majority

Excluding specialty by strategies demand for equities. and from fixed active markets in outflows, benefiting private strong these saw AMG income strategies offset outflows modest

private quantitative alternatives, affiliates. seen Pantheon, to powder resulted reported and numerous significant for fundraising today's in strategies, Comvest, dry across excluding deployment class driven net we by opportunities our Baring, inflows environment. Turning success by strong in we've has asset strategies $X.X of at at in markets flows and certain EIG into return billion trends continued demand The and attractive

diverse secular our group benefit to affiliates of forward, private trends growth continued forward. remains strong Looking and anticipate well positioned these demand going markets strong businesses we client fundraising in and from

and liquid our income and strong driven in record result quarter, demand flows long-term and this positive as saw value alternatives fixed in inflows near investments, category and their products of relative a also affiliates to corresponding by records strategies track we growing We client market interest client add in And and as yields. low to are volatility these strategies thematic as and sustainable well we focused look segments. new and in new attractive seeing continue

Asia reported to see driven including top seeing focused and $X.X Moving demand strategies. client equities and demand in In inflows, we $X.X by U.S. we and as we fundamental convergence GW&K primarily client where quartile a strategies. global in performance, outflows between billion active areas as for billion in in well rebalancing headwinds global equities, value-oriented equities at are net of Montrusco current and Veritas,

a strong across AUM our five-year performance XX% investment very on approximately to be benchmarks equity with continues strategies of Our fundamental outperforming basis.

version growth as given are levels followed value and forward, for and Road today. positioned record of managers such has And the valued we that and more extreme our between Yacktman, We [ph] strategies periods top quartile we growth, of if half particularly Tweedy, Browne similar are see seeing performance. indices across of well AUM River are dislocations. generating newer dispersion future going pattern a Historically, than

the Finally, recurring income quarter generated to net positioned deliver and fixed our $X well This at in fixed in for GW&K products business the billion and of we continued continues nearly steady by and Artemis. inflows income multi-asset future. driven area positive momentum remains of growth in

million, illustrating benefited equity Relative to from flows EBITDA associated adjusted from which strategic the lower earnings included fees, which approximately one-time quarter, financials, of declined the and cash XX%, net for million tax by third income power driven the EBITDA expenses the to items from primarily will mix-shift. grew primarily quarter $XXX business benefited of year-over-year disconnect performance events, adjusted impact EBITDA and flows. of our the $X to Economic $XXX and repositioning the XX% of Turning million position. second affiliate repurchases. incremental income million, between of underlying prior with add $XX earnings of quant limited

of share $X.XX Finally, economic additional share per of impact reflect earnings the repurchase activity.

to specific items. modelling moving Now,

be expect the $XX Friday of as the and market EBITDA of based We million quarter blend, range of to reflecting fourth levels performance up on current a $XXX range X% to adjusted million our in AUM to was in $XXX $XX which million million. fee

$XX was expense Controlling for at the million third was quarter interest expense in interest and hybrid $X million third in quarter to we our of share quarter be million approximately it $XX of for depreciation as to quarter. Our the fourth debt fourth remain September. expect we result levels the a interest similar and expect issuance

impairments million Our third quarter, $XX and for we this the share line was In item $XX fourth be of the million. expect reported approximately amortization quarter. to

with and Our cash rate tax XX% respectively, benefits related primarily of result in tax our cash lower affected being were strategic prior GAAP rates to third repositioning as quarter, initiatives. a and the tax X%

for $X were the we capital the approximately Intangible seed and $X expect related in and to Other to in impacted were we million were purposes, investments. related mark-to-market any fourth deferred In taxes included rates taxes purposes, be be and our economic quarter. items cash million. expect fourth $X mark-to-market quarter strategic in XX% and GAAP the other on modelling $XX impact negative the quarter. million we economic by the deferred excluding intangible items For quarter, be fourth expect GP tax approximately repositioning and third impact and respectively million modelling XX%

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

sheet the and to allocation. balance turning capital Finally,

capital and financing environment extending months for liquidity taking have flexibility of we enhance the position to by our historically and past the duration additional building position of to several attractive advantage company the the continued our Over debt. growth,

issued five-year million institutional hybrid we option X.XX% $XXX XX coupon $XXX quarter junior year offering rate retail with our earlier Following bond at during a million, a this tenure call at securities a year, par. the third

set shareholders. flow free our on a create cash strong significant as forward financial position, opportunity meaningful we cash Our returning advantage flexibility excess execute capital also and our while to

growth conditions. prospects We repurchase quarter, for under our the $XX evaluating existing drive repurchasing long-term investments market remain new differentiators affiliate, of new all execute be investment million support expect disciplined decisions prospect, framework, shares shareholder common a to competitive forward to we in capitalizing During to we adding repurchased at accelerating a value assessing quarter and resources remain capital, million approximately shares. of our and in a to or centralized core to investment whether advantages minimum on We earnings and subject the as highly that on against and strategy $XXX growth fourth services selective and deploying creation. our an approach our focused

to your we're take Now, happy questions.

Thank you. [Operator question Alex Our Sachs. Goldman Blostein from first is coming today Instructions] from

line Your is live. now

morning, Great, Thanks guys. good the for question.

repurchase the the May talk guidance for we're be how buyback ’XX? guys bit little increase you a looking QX the what we about XXX a a maybe Tom, in dynamic. quarter first one the and pickup obviously for the about repurchases saw into So and just share lot this you around, just may bit think than of of are Obviously, rationale guys higher for. feels in little I be third thinking

well. good Sure, capital Why and question incorporate allocation Alex, and overall, kind as your I'll I thanks, about appreciate I morning of talk the don't question.

we're of look investments noted growth core strategic terms clearly Jay and an capital we in asset front for footed AMG. the of to remarks, of at and toward us, our growth opportunities I both So today, we in and allocating affiliates. the in prepared view as And landscape toward very capital front important opportunities, investing the our in be as particularly new looking as

clearly we're and will and running decisions, decisions long-term to return disciplined appropriate returning framework an for ensure shareholders through are a include capital that and risk of remain mentioned, we're As all common to capital going our earning that making repurchases. our I great through adjusted

Comvest take duration, terms further of balance You've well and the year, $XXX our fourth into last And based out, return in terms year, down we've which count put our the meaningful you and results of the sheet over earnings allocating kind with both full in gets strong equity as some the quarter also earlier at impact via through year. flexibility, guidance this seen by attractive our with in X% of million of terms of pricing. capital of our guidance markets, forming we've capital for how point about incremental of investments. amount million from significant meaningful incorporating the far a very capital couple the three and $XXX extended fundraising than all this those active growth, work investments momentum to our in same bubble, purchases, repurchases been putting capital in capital quarter our also partnership XX% over of contribution affiliate the investments. with thus in for seeing enhanced at very and financing have Comvest that should quarters, last third iCapital, think share in at and been At strengthened position, I we on relationship time, the affiliates, as of north we've our including a And years. we both year you're returned our strategic really I'd more the growth dividends

we strength we spent So fact comments this of in a where of of buyback in earlier think about business, pre-recorded you COVID the was positioned we the in Jay's time the the that how in we uptick to context heard thinking year, in and the really recovered. the comfortable I and our comfortable position. were lot business want the relative cash the going quarter. well. well forward. number this sheet balance has of as performing toward some our fourth guiding as our slightly with business have quarter cash felt context plan feel returning a excess And the really We The Things the therefore very been for growth higher

Thank you.

today Our coming Siegenthaler next is from Credit Suisse. question from Craig

is now line Your live.

everyone. Thanks. Good morning,

Good morning.

contribution share, on base, I progressing not So, is progressive cost forward? from how reducing a given help are to structured -- which share, AMG their wanted your could profit they your to and improve contribution the lower largest going which AUM EBITDA affiliate, see a revenue profit

Craig. thanks, Yes,

as they think a I things. are amount small EBITDA relatively note we I affiliate One, specifically know, of actions, our talk contributing to level about will right today. a couple don't you but you're

the for think is AQR. I for there the on upside earnings is benefit So flows asymmetry and

very are holder feel aligned fully of focused about prospects, that also holders a we partners senior of are the model confident that minority We their partners or you majority business business as noted, the at John, but the AQR, business. of importantly, Cliff, most and as and business and rest David

for about Several really our the the mentioned, Given I in managed tax capabilities segments now. still business and is that is momentum fixed prospects we favor good in asymmetry the as of income, The highly the lots at are growing long-term business then feel good business, the alignment, and profitable. ESG AQR.

we a short, built in excellent, really, long-term they've business, So diversified continue be optimistic their great, prospects. about to and

you. Thank

coming from Our today is next Bill Katz from Citigroup. question

live. line now Your is

is the you last when changing speak you. six you that the ex to or over question look three pipeline, months the quant be at impact? The could institutional might how Thank

thanks, first at that? want to Bill. the do I'll followup. take Tom, Yes, you shot

market relationships the client a forming question if hope there. there, standing wake May us do more big been I has we to pipeline portfolios in your on have global lot volatility. heard today. but their bit though the dividends, high seeing advantage it's say, question of new in the our level in difficult, distribution readjust of that continue clients still overall, and the Existing the fact little for pay Bill, of COVID I ground we're term, relationships a folks I'd but be where trends kind about just institutional first at your think So about immediate a I whole a

activity markets, of kind seeing different of a rebalancing in our sides variety of parts both are place You in take and seeing of that the business. we're

there the certainly value to fourth also Looking guess to secondly, on how and quarter, being forward we're management, continuing clients watching growth taxes. retail and these we two outlook spreads active engage of seen of longer value the over couple are of see rebalancing are point, and dispersion just impact I the more with also first quick forefront. the we terms to client trends the really and a as again, to to term investment of I election about each more between and for our respect think think management. also to the big in closely but when we're focus dynamics we we've coming make watching And best the conversations, that in really, active start drag last value performing the speak is the managers. to between markets, of years, dispersion And scale, and really worst just the

track liquid think that So interests. I are color performance we well independent bit you clients and in benefit there, that aligned these And in equities And particularly do believe a because that, have just records, strong we are of long-term that's fully alternatives. up boutiques said as fundamental our today. factors are in institutional my I'll prepared with to and seeing setting I give little a of near strongly to what remarks, very client lot addition

fundamental over basis, performance coming Harding the Yacktman, look you're improvement year. and global at you we year on of strong long-term at than the and in on Genesis, outperforming the a River a seeing side, several both the five five into particular, course where overall Loevner, the U.S. are our past businesses the in year like were versus on of trend including Road. equity really three First if significant quarters, And Veritas, basis, strategies, equity XX% more

the to the our especially markets, feel combine of clients. for been addition and you very strong we're income thematic in do our already what terms performance, we've demand, in seeing active when setup with needs overall conversations, of client we're positioned the well So and seeing in to fixed strategies, meet we like private

partner-owned the see time that portfolios client where in environment can't add, a volatility increased I'll investors that approach asset are delivered know, in to active dialogue returns just necessary then that near their that said lastly, just as income volatility at active and firms to we're in take And look, the own they fixed our we a going you Tom, where reiterate to portfolio. a towards pick our for and covered well. just And this We Yes, think afford something passive to is, is environment is positioning. seeing look new is client best We is as active I environment. conversations. and zero, given here, dispersion believe Tom I'll and up independent very need he for that performance believe through

our independent are solution firms. partner-owned for We the provider

Thank you.

Dan next Fannon today coming from is question Our from Jefferies.

now is line live. Your

Thanks, good morning.

centralized distribution partners with how like in terms obviously focused to between we do parallels but new areas and that can going the So to do my potential the and outlook new firms investment things? that that point have guys So just upticks the curious scale think does and industry you're that you to think is industry if consolidation wave smaller question that is broader on, about we on of activity? around about other not potential investment, you are through your of and necessarily things consolidation down outlook think looking should a help in to find and trickle that can you

first not since pioneer with then, the a yet morning. from entire both many thanks, to there's approach. strategies lot, cycles, you've in I'm from And Dan, for sustainable take seen question model contrasting to a consolidation as nearly boutiques that most a competing we have perspective, partner-owned time, address been investing I know, and of this a I'll we've us deviated make it, a and going additional you did in independent for lot in question see was mean, our fair to AMG our M&A on as it decades benefit And good but and Yes, a industry, if comments three does AMG. amount and the that as flatly prepared state firm few your I there's just first my maybe can But well it does consolidation. successfully what how discuss remarks. ago.

consolidation do of why over here, opportunity the us. consolidation. ahead around choose turn market driven and see also the We have, we I minds just them have client cost think then hard improving principle believe continue enhancing for we become prospects is have extend we enhance through to with then about and we our being independent them transactions over clients, structure Maybe these to does don't that. how is in first which investment taking has makes that's another, even destroy independent COVID firms. affiliates. that the investment our But outcomes should That's transaction financial to Maybe to centralized any And for within period guess, think lastly, vertical their and in which a we model harm, AMG. transactions. harm. what delivering do it And That's they'll valuable consolidation it's special prefer And growth so-called Maybe boutique this affiliates what And alignment, of growth you inherent outcomes. more these our just integration view boutiques or we want that an investment most speaking, choose us want we performance why time arrangements are think our stating stating we clients duration. our large to transactions preserve advantage clients. to why I see institutions happening superior to partner-owned services, be side already don't new because maintain AMG distribution whole culture, first the and new know, been to no do in on AMG’s that

would early in progressed our back We pandemic. we I come have that of from the pipeline. seen conversations stages have the say

are think for competitive We engaged we had for with relationships a is thing. enhanced, that And us. we've very really position move our exciting seeing in several conversations had forward, proprietary do approach and That's conversations years that over this increasing become We the time. centralized additive affiliates, consistent an they for have to new reasons. do investments. attribute our are resources have One, we've have

We much seeing less are competition.

the competitors As have market. you number our a know, left of actually

Some competitors them. their are questioning fewer foundational forward strategies, of and replaced have elements

partner that an give more opportunity with to return gives favorable to those And to structure flexibility a independent can we are also so this us be to partnerships our more us favorable for positions us firms. those characteristics outcomes. better And shareholders and structure and

have think its as about be but of investment on in do to opportunities heels And the we in the one history. excellent productive periods the So execution, you in we're we of AMG and excited us. its of know as Obviously, new this front most GFC, remember, time. you had

while our investment to in think environment entered strategy. We be do this well believe I our will on market we've it. competition less So with new that different new and partner-owned elements and approach around execute to us, it will it different have affiliates steadfast investing are we to positioned

you. Thank

Robert from next Lee question is KBW. coming from today Our

now Your line live. is

Thanks for taking Great, my morning. good question.

about sometimes stakes. out [indiscernible] kind in how and Jay a their or your increased help do you they it's ESG pretty Just but can the help spending? how there can kind them table or and that way work ongoing affiliates part it? expenses of I of of necessitate, much invest mean, of are you shares how Or does do initiatives, bring their maybe you bit capital, curious, [ph] the investment take scale revenue you that that affiliates in little the talk becoming

do that in It's allocating growth in U.S. with now topical We and demand active fastest Yes, very new the it's more good capital both and I the inclusive of management. ways U.S. you, of believe of a of do and outside client for one it's the areas question. intensifying, agree is

making levels. of in of that investment them ESG be both existing signatories. by XX% what just AUM done and investing levels by I'll affiliates We that's affiliates then we're are We their maybe three consider AMGs, and affiliates We our for three through that through process, what but are doing activity, active this we're start XX management I'll sustainable first UN affiliates, boutiques. best their What focused dedicated are doing by activity. ultimately our investment by investing they're offered several of and company, of and on responsible doing managed those view a walk known segment, with PRI doing is XX% for and will done new and our really investing. sort and through as well see they're are here, maybe their of what affiliates strategies ESG their investments.

a newest Jeff is Ubben newest. succession First, run our the our Inclusive his ValueAct transaction, business spun out and that obviously of -- Capital, and in by partners planning that

in into in a Pantheon integrated a the standing was and renewable Genesis, EIG illiquid strategies all energy it have team all Artemis other out numerous awards across its our won UN just global and many years of new and is years Montrusco, One comprehensive their lift will long Veritas, investing PRI of first space. including investment GW&K in for hired that's launch the has a a one addition, actively sustainability investment few and growing ago in then of XX infrastructure It's a dedicated that. policy our signatories processes. its Loevner, sustainable of ESG affiliates, ago. Harding fund the equity XXXX. And created affiliates, activities of

outs, these just the capital also in to including investment moving that much of We're number investing. one lift a affiliates substantial giving proves team We're we're in very and capital support the yes, already and Artemis. helping So think direction, that them mentioned active at I ways. products allocated responsible our have we supporting AMG, at is also seed this management I and in

number then on and and philanthropy businesses. investment center, just, new entire managers, a the AMG, best we're our through the corporate AMG focus to and capabilities in centralized truly a for at talented we've managers include diverse and AMG, as environmental pipeline side, On relationships a group. the citizens And our global led been on related service. of broader practices does conversations We lastly, development here we feedback group, as investing product affiliate across and up touching conversations attracting on responsible through our local looking from in including our sharing and strategy footprint. minimizing ESG entire human of our committed And then base communities, a distribution enhancing ESG affiliate our acted stepped Corporate, always we're have lastly, facilitating capital. We've and strong retaining perspectives team we're direct industry that at these our

found website. focused, can levels focused and But at capital. on new ways AMG that All are be all our for of we inclusive at on very more

you. Thank

Our next question today Deutsche from is Brian coming from Bank. Bedell

now line Your live. is

third morning, just is the Hey to folks. sales lighter little the the on but second and know performance distribution has in the quarter on side, mentioned the, that, cash than bit new client the you side Good little bit a thanks. about I quarter, focusing talk a inflows Great, improved.

products quarter. you could So performance, that can maybe know have what into extent negative maybe can if and to maybe fourth and of us that think 'XX, flavor new essentially do that you if but might And inflow just as improve how you you initiatives dynamic? that? ESG the give sales we know how it? both to I in the contribute fourth redistributionist do improve could I and Inclusive contribute how mentioned we Capital, team, to so you on quarter, the into then Artemis based can traction a seasonality better move confirm a sales

that good to Tom end. and if we'll, followup Brian Thanks, thanks. with at can Yes, you. let and start going I I'll I'm the see morning

thanks, and Great, thanks, Brian. Jay

just on me in upfront the question terms asked flows in seen with you the what quarter. we've gross of Let start

have couple to from I look think at of you're gross a going flows to angles.

expect we versus what lot of the on a in gross First, flows way side, terms not tactically, seeing see just the at Delta quant there sales really is gross in this of point. to of the most would

in period that opportunity aren't most of commentary that's our that third we're there's whether exists and way but of for market thinking the importantly, summer, active bit the about when normal. recovering affiliate Second, market partners, your about we time, at the think seasonality perspective, we're of of all the little And clients, is set. distribution questions, back about to forward distribution, with a overall get we're into I our you also the from as that's think really this it's totally experiencing still COVID overall an improving, dialogue levels. impacting really all the AMG's quarter, where activity think while But some certainly I still things impact

and it's think do risk differentiated a existing prospects our now our think well nuanced new for a or of AMG to Jay for broadly. terms changes, just think scale to markets opportunity. affiliates Jay dramatic remarks that And this seeing client difficult very future presence of talked front do in extension a as decade, of difficult new Q&A. important a prepared way way. in and people his past certainly our context it in of in creating with here management. alpha the as And having new market I in been affiliates for view moved well, We AMG's investment environment, and the where investing And right, set more the that of having jurisdictions investments and the field, has change is think out center and an Over larger kind resources deliver environment of that the on and the whether existing we as much in that and asset prospects, market I the great more value the radar, to on, domestic as But increasingly a touch active have be get own we're do markets incredibly international in real been mentioned for in returns, to institutional dispersion and that as in into advantage presence out both the and in in having the us, conversations as view us. larger steadily on as is and generation up more both being their really it competitive an context affiliates touched I both actually it's up has about detail we're COVID relationships briefly and like distribution, continue wealth of we've in environment these can domestic it's their

pick Yes, I themes up here. few on to wanted a

playing portfolios, prepared is has and this retail Tom and is one in both active management that sell think institutional changed it's remarks. we over active sure earlier I first decade, last that to and in this the been mentioned, and last and the the -- It The in half out we for the important We mentioned think year, really period hard changed. just my years. speak but a we next as that decade that's months and

Baring our you we've funds current Asia taking being able being our those I Pantheon, the been to had continuous we We've The with and clients lot of that. continue out And excited their and affiliate future second there momentum now a a bespoke separate raises raise just fund, assets. managers theme and of got like distribution, in in reminding of effort we've illiquid we're say, illiquid, fundraising lot EIG, with our Comvest in but into managers coming more with grow newest second funds also managers is which be thing of in but as with about are a XXXX. would advantage have and to to Comvest, accounts, very momentum flagship we Comvest

especially the illiquid resources now our AMG adding and time On in repositioning are we We're after through around focused global partnership in retail we fundraising XXXX footed. distribution, front we the resources, are distribution of at and on of period fundraising front, funds. capital a

that we and their that we allocations more in environment. managers, but have So broadly, equities to those will forward, come this very way are illiquid, within active still very significant alternative good and performance low do I think look continue who rate a gaining as highly managers think volatile fundraising potential flows fundamental

Thank you.

from America. today by is Our next question from Mike of Bank coming Carrier

is line live. Your now

taking the for Thanks morning. question. Good

prices been has are more the seeing putting on smaller tend among M&A those types always in of there because like of on the some much there's that front, in been space, the And more differentiation activity say change new like given you that managers? Just is types to not for deals? deal more demand, as this boutiques you or inflation on look

multi especially it Michael. of the we're Thanks, thanks. boutiques seeing do left Yes, and I'll think for kind mid specific. partner competitors. fewer actually firms, number more of answer, briefly on market. I on the sized I my firms, be have but A touched independent prior

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Thank you.

Davitt Patrick today question coming Research. is from from next Our Autonomous

Your line is now live.

Hey, guys, good morning.

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it And the So a that as through concern about of wanting target how other starting side that to factor the conversations new your pull is that coin, something trigger? does into as on change affiliate lens, think to accelerate could you the that vertical? founders

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you. Thank

coming Our next from question William today Blair. is Chris from Shutler

now live. Your is line

your Hi, at out? everybody, the the prospect up, flesh investment pipeline, just positive but maybe in want know does you the new bit AUM morning. if run cap to I new investment back increase could in share a pipeline QX. that contrary gains of higher to repurchase the I impact good And all? definitely discussions the to commentaries, taxes does is come then on it

don't macro take maybe first the second. part the you part why question that and I'll take Tom, of

question, for Sure, thanks your and Chris.

and capital I think have the try any really of strength then but position ultimately do to we're investments, in terms what our So, balance return we sheet available, we and the shareholders. that about to we're quarter, individual excess we look to just in able that amount of in, the at really, to growth of across time, terms what not of had capital thinking

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You remarks, heard cash balance. prepared positive has repositioning outcomes some to also, of tax have we've done, in which we from added that my had the may our you further work have strategic some

are level it we overall and in amount our was on all significant growth at as cash So already. Jay which We capital balance talk forward, really growth where about. a into more going significant of balance more putting positioning. our sheet confidence just any I capital business But and wouldn't of will a view lack the our today on opportunities. put growth a anticipate comment of We've into on a amount of comment

it Yes, is Maybe point. Chris. I'll that flatly, say and really the

we pipeline Our new strong us. be these continues conversations to and have good returned made have to investment progress, as

investments for will near both and the we've very excited we're a and the some end, long-term and think being about medium long-term. near, done I growth driver And new in us. that material So affect things medium,

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reached Thank for floor I Jay comments. over you. our to back of question-and-answer turn to end like session. the any or closing We’ve would further

I you look for safe us. over will further healthy to us leverage focused competitive everyone with speaking to ahead again are Thank joining competitive significant of enhance create hope continue shareholder you. remains Thank nearly next to all opportunities we position strengths, And and We the and time. this on and we remain our and you, value forward our core morning. quarter.

you. teleconference. today's Thank conclude does That

thank and may your participation You today. for at this disconnect a We line you have wonderful your time day.