Affiliated Managers (MGR) 28 Jul 212021 Q2 Earnings call transcript

Greetings and welcome to the AMG Second Quarter 2021 Earnings Call. [Operator instructions] As a reminder, this conference is being record. I'd now like to turn the conference over to your host, Anjali Aggarwal, head of investor relations for AMG. Thank you.

You may begin.

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

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

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

relative fees. XX% and represented and quarter meaningful ongoing region absolute leader and share growth second year-over-year, primarily in growing Year-to-date, We in asset manager term strategy focus Thanks over performance we're everyone. quarter of Economic $X.XX by over we AMG, second enhanced announcing that to affiliates' levels, strongest per a began with EBITDA, Growth in the in for our be theme our industry. a our by higher investment EBITDA of Boston Parnassus, growth the excellent, increasing our growth and evidenced organic to its XX% driven the grew expect only repurchase partnership independent and will our in investments. share recent of as results, morning and meaningfully in execution the has performance our And consistent in which by our were new quarter by enhanced our history our good the on dedicated in continues the private with these fast driven through new to Anjali of resulted quarter activity. and and earnings Asia, newest XXXX outstanding ESG impact we exposure new OCP contribute ended Common, And largest long halfway fund markets. in by XXXX. announcement Together contribute million time. the organic affiliates investment our investing, credit the $XX investment

affiliates opportunity run addition distribution. of in invest EBITDA including of capital is new of existing enhance affiliates, secular rate growth in the and to billion now With in our Parnassus, growth strategic and increasing growth the our areas to our over $X resources

established evidenced highest industry. investment with we've our independent seven the is last As new quality by over model the our resonating which years, the in firms two partnerships,

an see our to transaction we competitive our given opportunity strong for set, solutions. ahead, even demand greater position, the favorable execute environment, the increasing Looking on and opportunity new partnership investment AMG's

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Asia, to focus, ESG. such of Our investing focused investments as fast as secular this XXXX strategy in segments areas private on reflect increased is growing and we've markets, And new in growth. exposure our our

and growth they and capitalize active dedicated are ESG responsible continue and of $XX future to strategies, the billion turn positioned on Capital addition Parnassus, around process, more AMG's more investing. the will billion Partners, to managers With Boston their strategies manage to that investment $XXX ESG investors in than world inclusive integrate for now affiliates into than as Common and impact

newest AMG's performance, a returns as has to affiliate, attractive building based achieving We principles XX investing by in risk track Parnassus sustainable that societal pioneer on of a portfolios and record Parnassus investing. have positive are a impact. adjusted year pleased welcome also

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pipeline. in cash since first our affiliate our additional time in flow deployed the of new For investments will quality with majority be already announced transaction the XXXX, high prospects

certainly I before, the quarter. As for was growth a second said theme

to are strategic in to of in also resources we invest behalf affiliates, contributors affiliates, the growth. and distribution our taken new on that investments, have actions our addition In to key

to strategy. with During our wealth distribution model, an the institutional quarter, we Funds completed affiliate the evolution only US consistent platform our AMG of

being for resulting affiliates. managed We now $X have from assets approval incremental our advisors, funds by in all received shareholder an sub transitioning external in billion

see our equities at we are these are fund's fund growth last income, seeing reached week, part with can a access more benefits organic of significant are is product meaningful strategy excellent and institutional and investors As fund globally, equities provide access growth. now portfolios. Pantheon's our ago, resources and years equities. opportunity fees new This Asian equity which our to value with US important is saw providing private mark in equity over performance crossing growth deliver The organic and affiliate ESG clients of wealth of affiliates' central lineup their the affiliates, areas AMG's international such milestone affiliates. to creation $X.X And US additional attractive operations including differentiated how an drive of of time. billion And we us fully aligned one wealth areas the evolution its AUM. and Several to changes, in that across we strategies our a as as AMG's is in portfolios. the accelerating through million private given lower offering of shareholder an fixed is the for AMG capabilities $XX in is wealth all the our outstanding This investments position a example platforms example growth this allocating just great as investors to

out equities outs, Pantheon, global in assisted global recently real investing a we income In at actively its including lift through assets more infrastructure have team we sustainable affiliates been real lifting where for platform. fixed Artemis, teams and addition, estate and and at

the described our business the the of has our begun that to at and in momentum Finally, only strength we results. start in just year, manifest

through the XXXX share forward year and that, meaningful to we line value drive I'll this and will compound Tom momentum second full the to turn it time. review details With the our further further of over top EBITDA see we earnings of look quarter. half growth, As strategy which per together with share continued to the to execution the shareholder repurchases tremendous of opportunity create our build on to XXXX, over

Thank you, and morning, Jay, everyone. good

Our second drivers create our model to demonstrate growth now the quarter and results ability value business the in into shareholder and future. inherent AMG's differentiated

to evidencing growth quant partnerships each our both put strong We we ability net and repurchase work compound delivered affiliates quarter core our stock And in drivers. new through excluding in investments performance. the of Our inflows We significant affiliates. earnings investment strategies. to in capital generated

US the adjusted of impact client $X.XX share income, quarter, Outflows strong billion markets, quantitative fixed million driven impact of affiliate and $XXX performance strategic XX% wealth year-over-year, the on quant our grew earnings strategies, driven XX% by billion AMG de Funds. and earnings. strategies US had equities, specialty were $XX the totaled markets cash a strategies from Economic of ESG by $X end year-over-year, in benefiting certain platform the certain per and quarter activity. minimis our private investments. evolution grew excluding investment from Net EBITDA of repurchase For further our growth share inflows,

environment. active improve add markets. profile Our management including we face a solutions in volatile areas seek private organic to the growth in and market continue ESG, new of And growth, of affiliates secular continues Asia to clients as more

remained strategies businesses and a supported in in to significant fundraising by from Private us Garda, quarter environment, affiliates and and potential including fee in more vintages. the billion, with return with management client source focus Performance net Asia Pantheon, over category performance OCP by long Within Copula. most excluding and another for XX% assets of alternative led strong, yield a earning Turning a for at illiquid prior continued at sources of term. inflows perspective than certain area liquid asset posted like by fee low $X.X be were and net performance Bearing. our billion quantitative EIG, benchmarks class alternatives strong this stability strategies, $X.X inflows to alternatives, markets and in such outperforming in recent the appetite of as investment and risk strong represent the new continued

to excellent specially income our and strategies. category, equity, significant generation fee fixed reflecting see continue performance concentrated our in performance this long-only We across

Momentum for idiosyncratic, Moving performance continues Road US global strategies outflows to equity activity. we outflows our $X.X Long be of billion contributors reallocation approximately meaningful to value Yactman for lower term this are driven billion strategies fee, and inflows by strategies, driven by by These of focus to our small-cap and accounted EBITDA. as firms particularly strong that with our such strong, client institutional thirds $X.X strategies. River global in leading category. reported the our demand, mandates managed equity of in particularly continues equities, two net in

performing to our going and strategies. continues strong mix of forward, high performance a with Boston Square, Our have recent balanced this value we category. Jackson in investments be in and Common growth Parnassus, And

GW&K driven multi strategies solutions, Our billion particularly Street and management generated ongoing by for wealth asset Baker income primarily at $X demand and inflows of this category nearly and Muni fixed bond quarter.

our recent year-over-year, EBITDA the adjusted $XXX performance earnings grew to million affiliate affiliate quarter, additional of from new Turning end strong for second and financials; by XX% investments. power markets driven

EBITDA Our from share grew as performance affiliate XX% adjusted and included earnings year-over-year, further $X.XX mentioned benefiting in performance, million previously, ongoing liquid alternatives I excellent category. our reflects investment fees, per $XX of activity. particularly repurchase share Economic of

Our expect impact we contribute on quarter, year recently basis, XXXX $XX therefore close to with per transaction fourth Parnassus On $XX million to year approximately early quarter partnership time our of our to financial EBITDA we earnings XXXX. to of Parnassus $X.XX of contribute is approximately expected expect EBITDA results. economic and and Net have one Parnassus in will million the a share. full in costs, partial fourth a announced results

on million Now, to adjusted flat yesterday, of and blend lower EBITDA be in the expect we AUM $XXX million. through for moving up items modeling reflect $X based $XXX range third the specific to to levels, seasonally million which fees performance a market quarter, of current to

expect quarter expense in for interest million of interest $X million be was million second a Our to at $XX reflecting share be second expect hybrid was the $XX the third in to and our offering. quarter, we Controlling And recent expense the quarter. level. third interest bond similar quarter, depreciation we the

quarter, Our the $XX reported share and similar quarter. was in expected for third of and we be million amortization impairments the second to

a GPNC to rates excluding XX% quarter. cash or to intangible XX% and were taxes related level respectively and And enacted tax more result not be Both the quarter. deferred elevated were changes per second rate quarter on share. XX$ quarter. did impact a Intangible were for GAAP economic normalized $X rates third economic of third respectively recently other items economic related tax million and impact the GAAP tax quarter. items, our XX% GAAP and expect million mark-to-market negative and income cash UK affected net earnings $X we as we economic modeling be this of $XX million. any the purposes, In for third to this tax expect rate we And deferred million. expect in quarter to and $XX the for were taxes decline Our this Other

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

to turning capital the Finally, and allocation. balance sheet

Our remains XX coupon and Earlier we shareholders. at asset growth management by source for the we bond invest capital a issuing year balance sheet an as industry $XXX further balance to a of consistently strength sheet hybrid low enhanced this million return of X.X%. month,

We prioritize flexibility capital allocate continue enhancing significant to fuel to our duration, maintaining and extending to growth capacity strategy.

full investments. the to subject and to of on committed In bringing shares, million of for shareholders. quarter, million also the timing the And market returning year, excess remain track affiliate million we We repurchases we our repurchased new conditions to cash remain to us $XXX second for $XX of $XXX year-to-date.

XX nearly simultaneously Over of our the shares having in repurchased to our XX% we've shareholders, affiliates billion and with and seven capital affiliates months, investing while outstanding $X nearly last centralized excess returned capabilities. existing new of partnering

of over highlighted business Jay work demonstrate in The quarter, of accelerate. model time. differentiated our to efficacy strong and continues growth remarks, the and are we our strength in and our compound our to momentum As business his putting growth strategy. capital AMG's And to results this drivers resources highlight the our

shareholders, Our new time. value our capital are and investments significant affiliates and business. deliver capital ability our demonstrated together positioned shareholder And with well add strong earnings power to recent to over to to position return in growing we

to we're Now take your happy questions.

Instructions] first the Bank. line with comes Bedell Deutsche [Operator question from Brian Our of

of thanks. morning, and pivot We're maybe Parnassus big I can if Good a May ESG AMG. big strategy broadly, Great, folks. for sort change. the -- in this be asked on ESG is obviously, contribution

question. part two So

on clarify First, the that $XX of just the billion is million $XX that AUM. to current EBITDA,

funds, it to then guess, net for like looks firm. And broader about into We're about is secondly, just ESG inflows there million grow? be for I that, will if So strategy, upside seeing anchor your it $XXX Parnassus the monthly or continues organic to the of the around example. clearly

create investment products extent then Or for So done ESG you strategy? now do curious you And what to investments the you to you you leverage using can would can customized think you your franchise? you Whether are for still think across distribution do see think that with where new strategies? solutions hunt be their in be -- more Parnassus? for you might

for your Appreciate good and it, you. Thanks questions. Brian, morning to

Let part then even, And overall half me of let where impact into about talk second ESG fits one take our our the financials. maybe and on second even and up on I'll Tom about just, Parnassus the second, strategy. back strategy first, the growth talk I'll

ESG. markets, includes and strategy you've think on private us secular several I importantly, heard areas, is income, in especially areas fixed focused investing and that say asset the our And in of growth. that So solutions, last especially multi number calls, Asia, of a

put areas overall industry. ESG our growing in in the can the you strategy. of one the is Parnassus fastest So of context

of I at done just published that. the Global across last that seeing Brian, you five aware Deutsche lots some over Alliance, fastest AMG. one recently areas of growing Sustainable that years, this area. also Bank as there. we're think some one have we're in data was Investment that the It's think came of and double the I all But I data digit at There's this out And well. it's rates research growing

the client that sustainable believe trend today we're take one hearing desire on coming the will given appetite. role our growth sustainability. you're client a in investing. consistent active similar that And of leading We all The increasing this of durable is as conversations see and theme think across with facts. for a we I up strong management the focus

especially, independent that through So in evolution the We requires have both a active focus private active think sustainability this we greater in revolutionizing that clients as lead and will public desire And the our managers is industry on investing. outcomes the well as importantly, as drive to firms, approach. believe securities an owned this industry.

to our we're continued in of prospecting AMG, investments. have new made. It's new in is to our how is one It turning now and area investments Obviously, the reflected activity an maybe clearly Parnassus component enhancing So of it. just of exposure ESG. we focus

to as in addition Common, In well as we've invested Boston Parnassus, we've with EnCap. partnered

and our some importantly, And involvement been so the expanded repositioning we evolve collaborated Fund. of practice affiliates We've to to began through centralized of in consultative We in that last ESG grow and of also the affiliates ESG marketing, we've did approach we greatly have talking their so do just their space. our the that, sort invested ESG existing most Common an about best own provided we in XX all and AMG exposure. exposure also Couple expanding we've ways Boston months. actively with our in that strategic

So strategies we're now AMG at in selling Boston Common and ESG GW&K. Funds

So we about $X of there. assets have billion

affiliate marketing behind been then our So the firms are involved we've both And and getting that products investment products whole ESG. other in this repositioning in we've through seeded that of at finally, making, like in GW&K and Artemis wealth channel. is strategic those

whether across for we're or in a new investing our in products. new the that's capital much own So in pretty distribution ESG, investment board,

have affiliates we to today, dedicated So three sustainable wholly investing.

seeded are a at number now $XX three, So or mentioned of at supported. inclusive of just those that I that we've means products assets other our affiliates dedicated about billion and that

strategies that integrating ESG affiliates a their integrating into process. have are factors, ESG already because about factors investment We now, our billion were $XXX in of number

engagement. best really achieved think and we by through change management, done stewardship active is investing ESG best So active and is positive do impact as

address for was larger extremely your us. to So here, with we're abroad significantly; further from And was, a thesis with investment I'll this second the transaction ability history. there quality and to accretive grow then question. more, Obviously, maybe be a part mentioning and were transaction is bit the of now Tom third into Parnassus partner have just transaction, high Parnassus our generation it ESG was returns the It to will group and been And in was us. just an its And in scalable the obvious, has immediately partners Tom a to inflowing of immediately domestically growth I'm proud business both largest see I as products. can next that our there very let are operating excellent. space. is well. in it get the you investment And this -- going think,

So very a it transaction. is impactful

it So numbers. maybe, the turn I'll Tom, just to about talk you to

Yes, thanks.

maybe So notes of couple on just a financial the impact.

First, a of per majority revenue continue based be Brian, million will it you financial on expectation And is billion AUM of $X.XX time and economic in flows $XX structure, EBITDA performance us, terms consolidated our will earnings the of that we investment of to you in Parnassus business. the the in very announcement. and your share share is the $XX as that see for noted, strong and statements. strong the at know

So share capital. take be in use to just based of they're performs few a investments the this Maybe find transaction. our general opportunity the time. why to the also such And business attractive way an really certainly new on over thoughts we on

Parnassus of is years the accelerated secular the course area in as in growth. First, Jay through pace, the detail and been past year-to-date. high at organically an five clearly digits in an over single of growing It's went operating

hallmark really which So of AMG our transactions. investment new and growth a steps is into organic both earnings immediately,

of Second, strong a deliver range we returns the structured investment across to outcomes.

may us them more corporate to basis that an have step in actually really our greater environment And become investment the the dollar give shareholders. we on we the when us capital impact businesses an benefits. optimal there for unlevered when capital put ability make AMG tax which benefits on our even allows level, to finally, and the at current rising tax structure businesses come Third, those to And rates, even where dollar receive these to valuable for us. see we up

have. excitement this of impact the a as overall, lot about and around really and you think partnership can investments we So momentum

comes Our of line next Research. Paris question with Alex from Barrington

you taking Thank for question. Good my morning, all.

engagement a covering practically rising of a both prior think since talking activity you've for into question quality the cycles. significant I and but been Lately, bit the I've my been business amount many dovetails your many affiliates, about years with prospective across of AMG its conversations. question, the new volume IPO M&A and

year-to-date investments you about in significant what XXXX? investments including a a mentioned, you current what's success XXXX, XXXX, announced recent seven, for beginning of like? would continue expanding And situation bit of dive is in environment? different after since already a with pricing, you've You've as be the new in question the the look me forward to the what solution helpful is Parnassus. little like the set. that Maybe My said above Why for your What growth. now, of majority it pipeline earnings the And you've specifically; expect a talked is pause is be deeper trend source three investment different us, you into cetera? if competitive to et

Alex, And thanks Thanks, own just that implied that morning. was And good perspective, in question. for your question. and that also, yes,

You certainly been long covering have a time. for us

said there a reasons are were elaborate that, for can that. and that. let transaction So yes, And remarks, bit prepared on favorable me describe really maybe maybe if see environment, more. I I restating see seeing that that three the we And or dive into new in I'll we investment activity. a just elevated

about why Our is. And that strong ever competitive And position is it's talk our been. has good then demand and expanded. our we'll better solutions, than there's for solutions also, probably

So on quickly just the maybe environment.

relationships, for XXXXs firms actively this But partner developing of relationships, XX there are think I over years. around independent them have owned we is the world, and monitoring proprietary been clear.

this been time. the some market of long a benefit in of having for the key is So

elevating haven't think industry And activity capital our time. I it's important succession adding the In We industry. to good also of overall supply in because industry, in discussions. there's is pipeline. now that a in part, we are seen transactions but that's seeing more driven, And demographically our interest growth some in driven

the case stable said another reason otherwise, during I relatively calls, last And maybe period favorable. we see the partnerships, prior to relatively a thing But things the why to environment in environment. we're just some as last backdrop independent in discussions in time before, further this in from they've of low not on for said relatively position establish for that's the And has this time. and of need that and elaborating market this consolidation, is a independence. remain now. the over Maybe you So think been been calls, our have volatility, new I've away two the market owned in But there. skew the partner firms, evolved the has stable, I've options most recent period, towards

good capital consolidated scale to our competitors, we in either they've think have has at their off firms it's intellectual AMG clients, selling model. fit a So needs they're fewer offering far both of opportunity and are to seeking that who anyone success, for for of competitors that, partner traditional true us, been transactions; like looking their hands don't XXX%, or independence offering and just liquid or bought the and all resources, especially they're they're alternatives, businesses. access historical not nearly my fit a the was our are acquirer, a is track competitors, that set success. a out, benefits traditional with offer. seeing consolidation And for firms recipe record We're to looking even really fewer a good are But stay particular for opinion, independent for in I not really And AMG. that want independent, that that

underlying, some well. more those as so conflicts And do in -- are and we've seen competition we the the they're while inherent evident most of illiquid I state interest, of space, see firms think becoming buyers, to independent they

those spectrum, generational we've through we going and are firms reasons, position the to our offer And all like firm. over offer focused planning growth succession we've across evolution. to we for fast that competitive then can lastly, capital so a growing very, strong. Obviously, Parnassus on very a our size So offering is expanded time

And offering expanded. so our has

And sweet think we is intermediate investment can best for a the solution so to permanent our leaving demand both And in in those And and all And it one spot solution set And of we're continuing the term. who I've activity the seen reasons elevated one at has I near the only least environments this really today. we're see independent. a in while increased. new that decade. expanded offer you strategic for

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

you for very questions. much morning, thank the Okay, good taking And everybody.

price Just following but we term to assets there Jay, near the are a off way maybe that up, ring sort left of is fence there, to size of in of just to pipeline, the that, incremental get intermediate absolute the couple just talking have prospective trying of Last sort keep about to a And been then just more sense related opportunity to bottom very deals well. line? pricing.

the you momentum you would nested sort explain flows Thank just of And that. for Tom, could levels just Just sort questions. why I want in flat business? AUM sequentially EBITDA to exit on and expect But, sensitivity sort of just sense given fees, apologize just around get a you. a performance of

can and we question. obviously, the So and Tom, the pipeline, how questions, take maybe forward guidance let me just take then structure

Good So thanks, morning. Bill.

the On pipeline.

our course, we that focused, done, then environment, mentioned, as terms And those in And getting transactions focused associated investing very in we as And areas stated we, can very on Asia, in earlier, pipeline. takes the includes So obviously, it secular are asset, there's and time. I of I pipeline. includes strategy of growth. I of income, our specially illiquid, multi fixed think And ESG. it all and of there's have you with timing assume

also that flow that this just pipeline, my which succession to the of we see of And another have thing cash forward, in remarks cash is -- highlight So an of our see we prepared also we diverse across group go are driven mentioned those firms would elevated prospectively that announced. come caveats, a transactions secular areas we with that are I see way growth, to means set set that independent the oriented opportunity have been in of invest opportunity already going demographically saying majority move I seeing more majority of a us. all have in necessary of flow us, a we're to seen our investments that for we

a number transitions. are fewer firms going greater after I that's our that's succession think for And is we're most quality because plans and So our, of number independent we've outstanding especially years, to today. and those a where transactions, transition stay through AMG, structure succession plans able for seen seeing want good that that's to driven

on say. it structuring AMG our that, So had of execution. but our resources the kind And do this our results I'm acquired. especially we've as adding and refocused as couple in new that We capital term. an adding bit, really a attention off the I adding to the that had, last years, EBITDA and see near over more excited think to we about resources over joined with origination, mentioned, we dusted a and pricing, our and intermediate I that, in up the at doing and Maybe think resources driving I think And guess. our way mindset little always we've that investments, on to about term culturally structure let's deployed to I entrepreneurialism maybe ownership

partnership, are appropriate market for and about we going value getting you that to see. And long the to there we're our for are shareholders, And that what right So is ultimately, will pricing. balance frankly, time obviously, or permanent is the the but balancing for trying we such cases business range with shareholders a structures partners, lots for between we of over do of say alignment a periods partnership. in a find returns that the say we're outcomes, And the structure of also be just think clients our when what the that's a repurchases. generate what shareholder for what way that

So of future, you value you when the only often in share in cases, also transactions, a are little the about a those idea that, think firms then think important us selling about their is less important. lion's And the is is and that equity. still of and it the pricing portion in

what's is less but more wrong, the important, and little So important, it's more structure a partnerships, don't get what's the important. me

is, So of ourselves thing been then us. invest businesses these time. fair, we've leads that our The EBITDA maybe fast lot I of a of entire growth, say in to oriented have higher with think that towards transactions right last would changing. because are -- is our growing. balanced to you're secular to do of as I structures. growth And And that has to I And think growth. we areas course, over we we've But secular attractive levels the how mix areas of business get

ask you the guidance. could about So maybe, talk forward to I Tom,

on Sure, so few then just the QX forward. you I'll for year and some give full numbers, provide and maybe it bit to clarity going a context a in put

the adjusted we noted all, in million second we of we first in $XX had quarter, reported performance and fees. of So EBITDA million, $XXX

this to a blend that we million see level gets of look we QX So that you to where I thus at going from in point. of And $XXX you is at to core base $XXX million level look terms our flat if million. are market EBITDA that a level. then $XXX When you said guidance, QX far,

shape forward the full lastly, feel the for well. to of a and the forward. reiterated some of we year. there. as our quarter looking And year see full seasonality And performance put million in year. just in year third $XXX some there second the reported that's makes also today, see will in QX, it reiterating Parnassus. not growth based the we've really was performance this on fourth our results with do stand we about gets year $X lowest million the guidance, investment in fees, obviously, you the And spoken million but particular there. to on and $XXX good And half I performance strong. going we and performance then Jay million have done think back we that strong where of in the we've and if this the impact range. quite in We first full through quarter, like step in the On the context $XXX in quarter kind target of did here I Maybe we it's repurchases alternative take the full do very the then year So And up XXXX. $XXX Obviously, then fee on quarter QX side. things lastly, liquid for in to that worth excellent is we're fees, which million

the have think all So when into take heading year good momentum XXXX the strong a heading of it you I is up and into half gives significant you these just then things the and second XXXX. together, that sense for shaping we how

to think just well, earnings in any Yes, and too capital that so it's the originally of at on -- hard year I we business, the beginning put investments. the new we the the power guidance our should need of last and because said predict this we of the the to considered one didn't for We thing timing. comment have

think but through hard Some we forward put And we your But of now. to go. have more of it's of that's capital. coming I always that thinking sort still to plenty into have

even In our the quarter, fact, more capital. enhanced in up sheet we freeing balance

don't real drive So investments. continue new I see to to us through growth any barriers

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

really which morning. good guys little Great, forward attractive. about bit. realization the AMG market out alternative shifting for across environment for break EBITDA of was liquid to the be like private really continues can AMG's it number trying be taking pretty organic the hoping a a here footprint to hoping growth talk Maybe was question. to frame against help I you and affiliates it may fundraising the gears outlook us Thanks between your feels

quarter for you come $X We billion guys. this have show out to

the funds how separate think growth of growth, part it's of net So or Thanks. outlook market. think about out as that accounts, help you nets of whether from the realization kind for EBITDA this us about

take one, that don't you why So Tom?

Great, Alex in to question thanks first for hit just number some your clarity. of But realizations around provide and your things Maybe, question. maybe a there.

saw of of the by terms performances were noted not those in liquid alternative the driven the that primarily When associated saw that think I came prepared illiquid bit side about a we little quarter the this my but first, So majority you remarks that you realizations, realizations that of really overall. the much. with business. through was There

of the on But question. last seeing an talked in about kind impact this I just obviously, power. we're First, our not earnings

that thirds CO realizations were third see power saw stepped fees that earnings had past management this reason we their is other significantly. those of And were investment the down overall. already for where in And with low those realizations, to of about were two We increasing the fees. the investment quarter quite periods well vehicles historically continue in management that funds

the the bit, So investment really any our associated modest, in terms with all. private of terms Stepping think very back of strength of does a power earnings if and to seeing success it's outcomes, those that markets we're really I in speak realizations, impact diversity businesses at overall.

their the this at into increase, of product overall businesses, years, these AMG in now addition Combvest we've based And really on our outcomes recent areas and EIG. excellent Asia, businesses and expect course of to growth of Barington each of growth the adjacent market experienced impact continue grow businesses the category for the on market continuing the expand couple they've ways. organic past we historical of the OCP investment private we have double private that really to in growth over businesses organic see are also The five seen, clients. With our including two success level digit delivered to Pantheon, and dedicated and performance

existing to driven continue and businesses they as and diversify more funds, our raise grow business. larger their First, their by and affiliates,

increasing as AMG very see story. an think to through I to I And continue growth And and playing being the private investment we're markets is think bullish then secondly, process, and helping so target we a about, that. overall talked part opportunities as part facilitate also new accelerate organic large we in on that absolutely markets important private distribution of growth. the Jay

Yes, of me here, might a add other thoughts let be helpful couple that Alex.

mix First, the that's AMG, through distribution our our well efforts new capital new or we're seed working as with affiliates existing at investments, shift deployment or through affiliates driving affiliate. mentioned, as that I whether both through in

that shifting to passive growth. more not Tom's we're moment see quant a that And But say earnings saw by our illiquid. work. Any impact taking not, mix towards I'll it's approach, as harder And and absolutely offset well. guidance So have would expected think the I that have again, power. distributions and we and had, forward have to is it that you is little our at will the virtually which we've been recognize said from that it, a And flows the do no impact almost if is I that fundraisings seeing already have or to than no more gave. existing clear Tom be have they impact the that more

lend is thing wasn't More sure importantly, though, want this I and in quarter. our make the I really to what

of to beginning of isn't very power close was the for EBITDA a numbers this repositioning And at positive so till had growth over April; That or happened only end earnings June. at a moved strategic share the even XX% Funds, OCP portion think about in growth And close of per end lot of at we the expect which a OCP. We that won't affiliates. quarter, was it end $X our quarter, the perspective. and was closed announced there our earnings the of our at quarter, it That of the that AMG Parnassus quarter wasn't in we the on There XX%. third to the fourth billion the in was quarter.

were to share XX%. XX% if to those seen maybe So would closer events, for pro closer per you our all you to our and growth forma have EBITDA earnings

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

a wants things. to flows Good My is Thanks. morning. clarify question few just around and

global Tom, the terms that's -- where happening? how clarify realignment and we that that outflows could But of you the inflows quants just the should talked lower were basis? traction and so, also, realignment I on the improvement talk equity and includes strategic if guess fee. talk about can the within momentum business a the that you about or ex some go to that we think about in about forward the specific then mandates that of want I x, so And So the

Tom? that, take to want you Do

your for question. thanks Dan sure. Yes,

So of things different in a lot there.

momentum of I think few as increased through we On over an impact Ex-quant, saw global performance client where overall. we existing past equities, of actually see your of by gross long-term we maybe as in strengthening seen well driven look just as affiliates, quarters flows both go hit question, course forward. at Let and we investments. intersecting sales, the affiliates. strong part increase me kind specifically, that have really continued And of new the are focus the to

have some low thirds kind the any side, we outflows. equity And of it redemptions the of a was quarter, rebalancing. about global in see ex-quant mandates little idiosyncratic the for fee three accounted On It's to that two this that quarter. did unusual result total redemption really activity of a one as institutional chunky

when of across illiquid business and on both bit, look we fixed especially wealth, flows existing here excellent do all growth So think markets, in we And net our toward and of even by with current towards have. value areas. we that key we're performance, excellent from US equity future. income these have driven wealth you affiliates like trends private contributions and fixed touched new positioning We're business Common new the I this this relative growth We're base, when ahead, do private the important. also given strong secular I Garda, really well, you ESG, affiliate in flows, the positioned see around businesses US for quarter. OCP. mix really like our momentum business the think Asia, look point term, ESG seeing And in businesses that contributions stronger where and that Parnassus on what focus performance profile contribution shift well, at a areas more and to experienced the to segments. see our frankly, we affiliate, over our ESG, in our than Combvest cap very as in mentioned value And investment seeing the increase, we as well and continue strategies new and you Jay our areas are to the long the And continue continuing side. investment markets, shifting and income like are is more small but of underlying like really strong growth retail on our not yet numbers. you like both the the seeing and strategies, and performance these Boston seeing and have and We're businesses And particularly

behalf one that's of add strategically, one demonstrated the maybe growth and And future, to capital our to deliver invest drive we last on both continue can set one to our going think just just just something point existing augment really and organic very amount to of share an with And flows and we've ability generate repurchases. a the to that's the the then many in to kind of earnings abilities saw. growth I that that level, is us up business. drivers well the distribution growth EBITDA you of new into tremendous take prowess growth that we our affiliates, that up numbers is of here, have in for higher. We that supporting earnings it future

profile shape annualized by time EBITDA and XX% investment over plus posting to really strategy. and economic And earnings of to see So against growth, our growth expect flows our executing that affiliates share driven the evolve. our us when per continue we being see that's follow you excellent that performance business as really growth

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

for me guys. morning, Hey, in. good squeezing Thanks

another anymore, would to out not of a the So new Or flow largest cash about off you guidance we much deals at your did given deal have repurchases other one? the trade taking start need How to in you we repurchase what model? thinking about of where should deal about is trade long higher like words, think really in two announce generation volume is. that point we time. worry how off In between just big your a

take to Tom, the want balance question? sheet you do

Yes.

Maybe back your well. take the as for And specific just overall. kind capital through thanks question allocation and So, Patrick and step a walk I'll of hit question. then try

in we us a with other have translate of opportunity significant does cash shareholders, have it of And at look, overall of the We're and strategy. past as you've We've front nearly that first new we mentioned, we excess seven course see terms and to and investments return XX% of That made and same total repurchased growing momentum stream. the shares affiliates sheet, years, that our of execute new to cash, this in and time business. to that to to to common do And remain ability think the the term. seen investments appropriate we growing set the growth through a of the So and long ensure six we're going framework the amount in in investments, decisions we of affiliate disciplined; on we're execute couple going continue on all over about outstanding. of our run strength earning return. balance flexibility capital new combined really risk an a into our adjusted over free foremost, flow you tremendous capital our

structuring long and then earlier, the well. organic to best mentioned optimize and as advantage our create capital, continue I As to the ability our given we that our into step immediate investments growth, capital highest to and take use term structure value, ability are tax earnings of and new of believe

on we of the mentioned remain the first to in the of you since of be things terms expect this will put growth that deploy of and these together, track see growth. majority our earlier, of year I kind cash. Jay on right for capacity all our can in and million think when XXXX, now, this of capital mix of near a investments, term, with given $XXX we any Look, investments don't that future. new And in a And do how generate we repurchases. to issues Parnassus repurchases these to looks. investing continuing sizable continue to the you intermediate do see even trend ability capacity, to in execute the I investments, think amount We three that see one including new toward of we the opportunities robust in terms tremendous

in ability to an have makes of putting to that capital, full given we to lot ways trade capital ultimately, are a the in way need can capital in access growth have of between of transactions just markets; returning investments about we that think out sense appropriate revolver, a undrawn offs do sizable we period time. we a any those and making there that. structure have terms And We

And benefited think do are capital And we on we investments. I going But us perspective. having going to towards investments our are do to both; done Yes. the look, it's both. more new do better see new that returns those from

both more do optimistic little front So like dovetails think of have we've see we those Bill's all today. to unlevered term, than we had, pipeline over obviously, to new back capital that that, a in to our of after you I and earlier, we're rates question us us to a all those even But lot the to will the capacity we of that. a of statements going our around with cautionary EBITDA, see allocate appropriate am it that in ever are good -- EBITDA billion that investments. are bit underlying growing kind us near a We'd come $X run

flex while transactions we flex can we into into that transactions think do I can returning multiple and So also large capital.

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

like update much consolidated today, cash, versus just thanks it could real Oh, my that's the Good there, available at in just the morning. $XXX to If ones. look quick cash, Most sheet first have you me great. just how for on I in guys. balance been is question. of of asked you to that questions million my And squeezing currently maybe affiliate

half. Yes, about Rob is probably

it I think good way that's to probably look at a currently.

after something a tax million we're like Yes, generating $XXX cash quarter.

the the gentlemen, so also close, quarter obviously can did you. comments. million think transaction any back and you Ladies as $XXX session. Horgen, I'll our that that was we And the floor this to Thank final bond for turn concludes the -- Mr. after hybrid about Yes. question-and-answer well.

to strong quarter. in morning. Thank you momentum safe I continue strategy. as hope and XXXX. we you. of we you this all forward with look results has to remains And speaking us for the outstanding And half healthy. Thank we our on execute everyone see first next delivered AMG joining

you. today's Thank concludes This conference.

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