Affiliated Managers (MGR) 2 May 222022 Q1 Earnings call transcript

Greetings, and welcome to the AMG First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to Head conference AMG. of like host, to now Aggarwal, Anjali Investor would turn over the your I Relations for you. Thank

You may begin.

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

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

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

of driven XXXX, earnings, AMG Anjali. first up of Thanks, results per capital deployment. with continued $X.XX, and by year-over-year, share in economic everyone. strong X% growth quarter in earnings fee the Good achieved morning, management

and has our Baring. our disciplined business the redeploy XXXX, strategy to demonstrate During two consistent will results later value. the of shareholder as we transactions further of and from strong in and is successful this our over transactions the quarter, earnings AMGs of our these create generate from that into we time impact announced today. in Asia execution ability year two strategy Systematica and meaningful reflected Systematica strategic transactions The Baring growth involving be position these resulted our and full enhanced execution and by capital

is have partnership diversified structural we inherent in business model. our Our and advantages

of capital significant generating in-demand have strong sheet wide our and performance strong areas invest. balance by quality across array enhanced incremental we a to a flow affiliates Our are high and cash recurring

of the more shift four And last fundamental a shift become even over the end environment saw asset Towards market year, management. the has past evident. months, for we that in

expect for we presenting highest managers industry to quality ongoing our value to forward, continue rotation new Looking within the the deliver for clients. opportunities active

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entrepreneurial a adjusted launch enable new are combination records delivering over clients of with past approximately assets. and ownership a support billion industry-leading commitment And our grow more today cycle. in spirit specialist affiliates for new to independent during that and culture have of firms Our initiatives them affiliates proven managers history in protect innovative XX conditions active client of three These as of products market nimble as products total well and their as our best-in-class the risk of evolve. XX entrepreneurial resulted transition. returns excellent being assets, periods which and introduce throughout vision, years, the has than The growth to track

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compound only with and but we I'll have future remain our uncertainty. given well to the AMG, to growth. partnership also excess shape growth the resiliency of We successful to outperform returning into capital in our expect navigate to deployment on we due most to while our by details also For and And as substantial opportunities diversification, environment that, structure, it come scale industry capitalizing ability many structural of the Tom periods this significant our our to of capital as earnings investments capital business, position, to quarter. review shareholders. after the of create And over to strategy, significant transition and not our have turn confident

Thank everyone. first quarter. delivered morning you, results AMG Jay, and good strong the in

business, benefiting the diversity secular As of growth partnerships new and evolve, performance, from improving we continues areas. the differentiated are affiliate to trends our flow environment market in investment

return well-positioned their clients changing to by approach affiliates growing taking our a As for investment portfolios. diversifying more the landscape streams. adapting to Jay noted, to are active demand meet are And

our excess simultaneously investment ability invest strategy capital of repurchases. to volatility. macro clients Our affiliates, market will new to recent combination shareholders value AMG well-positioned capital as strategies future to capacity highlights add existing return strong in amid in and with deploy the Systematica are on recent position, unique growth and into And Baring's to strategic our execute trend through Overall, incremental and delivering proposition, that EQT growth. with significant is that significant capital for our following and announcement to

year-over-year. our the and liquid first our of to for million areas, EBITDA economic alternatives, our resurgence share Net X% improving of certain quantitative trends flow $X.X earnings Turning were ESG. trajectory momentum. $X.XX high creates grew in excluding $XXX value X% performance evidences shift private forward per towards the The cash year-over-year, quarter. billion further the mix strategies Adjusted of And in grew and markets, inflows, demand business including quarter client results.

of quarter. duration interest as reported strategies long our with of are opportunity billion performance private $X inflows certain Client and Turning flows robust. stable of Baring. COmvest, fees, quantitative and results building is category strategies. long-term. And in remains inflows as fee management well strong and market a billion we performance EIG, diversified the the to again, assets in that growing net $X in The at reflect this our In over private market source first Pantheon, a business, across alternatives, excluding

of growing of into higher absolute see set builds opportunity over excellent billion asset Capula, streams levels $X affiliates also strong a as across and Garda diversity in leads alternative a earnings managers, fees return, data itself seeing and inflows liquid alternatives, greater our generate are where generated strategies to differentiated private we flows We to number for performance diverse strong to of opportunity investment and to to uncorrelated are A Systematica, on portfolios. market generating growth. for including return seek inflows, that attract and and the performance demand growth. time, performance and our translate our organic as future Overall, add generate quarter, we liquid clients sensitive, their which

market with ESG to in $X confident active redemptions present Moving were to as strong of investment to outflows to value XX% reposition favorable Yacktman quality with continues quality our benefited for our oriented and strategies. into clients. that many this including billion. Gross of continuing performance growth heightened environment activity flows strategies U.S. value value remain we outperforming their asset strong. five-year to basis. a assets dialogue more dispersion looking clients including sales opportunity has increased deliver managers excellent, to to a more highest be The global into significant strategies. the be River relatively Sales Net on recent were Road, are and in our and are and category proposition portfolios and strategies, offset changing see value And and we very of continues the a equities outperformance differentiated inflows flat than affiliates In equities. long-term

affiliate investing In and this leaders Common. Boston demand we for to and sustainable strong in impact as such with continue addition, Parnassus space see

managers Finally, including were also the Net with myCIO, strategies were in flat fixed wealth inflows for roughly multi-asset industry income income and and consistent trends. by outflows at fixed quarter. Veritable offset

to Turning financials.

a affiliate of million by and the on in the investment decline benefiting year-over-year, to $X.XX quarter. grew performance strong offset X% mark-to-market For X% earnings EBITDA gains strategic Economic of repurchase million in investments and first partially per activity. $XX share adjusted share further investments $XXX by grew year-over-year, and performance quarter, from driven new fees

items. Now moving modeling to specific

to market the blend, X% second expect a as of fees. EBITDA first quarter including approximately This be and current AUM to performance adjusted on level full reflecting our based quarter modest $XXX equity reflects is We markets. which of $XXX Friday, also million in of impact was down drawdown levels the million,

second seasonally lower quarters reminder, due a timing fee typically As the and of third performance the are quarters crystallization. to fee performance

in set, Given fee our diversity particular product and seeing the across absolute strategies, of strong. full-year strength return our performance opportunity the we're remains

respectively cash were rates XX%, share intangible million, reported interest taxes our expense amortization million. $XX quarter, of and $XX $X GAAP tax depreciation was and was of the share $XX impairments XX% deferred interest were million, For controlling and and our related was million,

items in any million quarter which excluding the similar quarter. GP economic at We GP $X to each impact in be $X quarter, on other In of expect on we purposes, Other economic level impact items and mark-to-market these seed investments. modeling were the and included a first the million. to expect the for second seed second capital items mark-to-market be

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

the an and to active allocation. to balance turning Finally, We sheet XXXX. start had capital

with of our incremental EQT. the in investment strategic of and the by Systematica, followed combination First, Baring announcement

gross the approximately transaction will $X enhance from further position capital Our shareholders. proceeds our to deliver deploy towards and At EQT and would areas expected price, stock billion. is the in growth receive strategic our ability proceeds value an current Baring to the balance excellent of sheet AMG

be As expenses, combination gross our to of flow transaction approximately of proceeds only expect return continue first And the not taxes, we existing repurchases. of growth noted capital to in the us and The generation the for and Baring repayment. at will to but investments, proceeds to the debt growth to remaining substantial go new time invest affiliates. enable used significant excess towards XX% cash announcement, fund share through and we XX% also both

adding or under decisions anticipate on evaluating to returning a whether continue to capital time. we are in that allocation strategic close all to new full framework, growth to and accretion shares be fourth will excess post-closing disciplined growth, shares. transaction shareholders. the a basis and first expect enhance at over We a assessing We approximately we capabilities the we a $XXX committed that of remain share add accelerating of the XX% common investment quarter In and investment, an resources repurchasing million in focused long-term quarter, on our proceeds manner, will the existing per our capital to affiliate, repurchased invest

closing timing to activity. repurchases, year. the on new continue of affiliates number of diversity market We of that $XXX our plan model. our the resilience to the this update in structural our share based investment target earnings the The and the partnership conditions of Baring and full-year And stability million transaction subject to in inherent strength later quarter in reflects and unique the we

compound shareholders executing Looking affiliates remain capital to ahead, strategy business evolving growth through drive towards levels existing focused positions to and significant we new value. to our secular repurchases in on opportunity earnings investing and and growth well industry-leading substantial and by our and returning growth us earnings our shareholder deliver areas on share at

take Now questions. happy we're your to

Thank Thank session. At this a you. [Operator time, question-and-answer conducting we'll Instructions]. you. be

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

everyone's morning, doing Good well. everyone. Hope thanks. Great,

morning. Good

morning. Good

active maybe little activity starting remarks, meat retail put my, to redeploy institutionally current investor you management maybe maybe little wealth you're the then think Jay, a So think seeing want to but to you channels? in maybe, kind we RFP between if start also, this see in and can you a are and to maybe bit as you start or environment, touched to to liquid institutions little, changing how on what differentiate really the given maybe maybe dig versus the a deeper, I is behavior accelerate prepared of guess more equities bone about on

I we first thanks. We in has grow and morning the with is it's think that here active clear active are managers market Well, to out managing their Maybe Thanks, reacting already clients should you. good is Sure, for see your assets we management. Rob unmatched good changed client would clients one that will environment take this passive. to layers and really and advantage, environment. changing. I it's conditions, We the increasingly again environment and different is, think by these think exposures characterization that agree and that an I this that approach protect we to the a ability that's active think changing point in

So which good in really I that three there very be to point you. would when things we we think positioning, out kind this about our of are environment, believe to

affiliates. in the And been we'd early return, begin year in remarks, Tom that absolute liquid advantage mid-last more shift strategies. of for that of We is we client his terms first The prepared an our alternatives. in see absolute that includes, we uncorrelated AMG liquid as alternative to And several And as to as be diversity talking and significant had exposure, now. to quarters about did have activity see the return of our to positioning. said affiliates

equity, comeback as well industry-leading That's And invested strategies. markets, private we've be value, value of heavily the managers lastly, in we're for. an something private to We over then, last AMG at know, for years see known you AMG. the advantage also in that illiquid couple

have capital we private up locked markets. in And so longer

delivering good affiliate we all why and that for and this feel environment positioning clients. of So about the supports kind

is and opportunistic on be phone have of be to transition, nimble this and We Many this, partnership and I think in the dislocation. balance environment, of the investments these to structures, also aware second of to look make us the sheet of our during everyone this structural periods. strength because stability think in times business of most opportunistic model, our part our new come during investments our in environment. our enables successful ability and I

alternatives that the do said client we a I the shift is And think big to to that mentioned occurring. when AMG. relative see I shift to account these value, half a as environment, do value, back, we take happening So all a of liquid classes step market a more that just asset really his Tom remarks, And in activity already. for than shift

So when footed, new opportunities about I out of we pick activity balance more others front and we it. diverse versus a investment come as then positioning, new Tom then strength And strategy, our maybe think client wealth we especially and by we're be in excited investments, was back having looking of talk institution for and this talk environment, pointed focused. in terms balance up can there we can And about pivoting the our I can to and sheet our that thing, last in be very might and about have and inwardly just robust may business, here. the when sheet about others

question, the And Sure. for Thanks, Jay. thanks Rob.

seeing, the our strategies of later environment. product resiliency in that deal talked Baring opportunities of building a will in tend our way that we're also how fees into strong this given well. the of the well-positioned enhanced position, qualities diversity in earnings terms post and know includes as perform Jay And And as type number affiliate maybe stability translates and return terms And our our you countercyclical this flow business the So balance not that with performance to about in top-line But we're characteristics the just an in and strategies, of sheet on little revenue. nature our year. which cash of with some closing, a further capital be of our in that performance a really AMG already. unique it to also is particular, but just of set. all the environment, this earn bit in absolute starts given of really only our bit

know, majority revenue share the structure. EBITDA you As under of a our is

lean and very that the base We in most at variable have level is AMG a nature. cost of

margin drawdown P&L. those lot And market see So in experienced lot traditional attributes face cash the manager pressure we less to to We also might profile. of a than every a our cash the each in a contributes quarter. of asset flow a consistency you of of generate expect

access our to more including We full impact revolver any billion the covenants. to $X.XX without have ability liquidity, draw on even our

As our shape. sheet in balance know, you excellent is

to duration, point to a through of we that significant they're EQT a that have transaction perspective, And really $XXX right if an like. the from to go to of the finer cash, choppy see our significant have lot to how AMG another to you on model put then can see we And be markets, it, in tend questions we We you Rob. going sort of tick of flexibility. from dollars different those collectively, terms And business how And of lot investors is. opportunistic just asset a addition perform. million that In things us managers Baring once we'll when see maybe in firepower enables closes, shares. that's just

impacting the and near resources, going investment means tailwinds we're debt in of we pressure, affiliates it. our top-line as we're positive margin we're lean margin run diversity alternatives, a shares. heavily know, cash, the so and duration, fee towards also The road. down is significant And more and combination seeing in fee we're what on environment Actually, is about a more our you have top-line? us. performance, flows, fee and less Then, great We at the really performance with weighted a lot fee for your this opportunities capital there? So future. What talked stable first, influence the how center, of flexible, long Well, the about all rate, impact manager. revenue traditional some much of pressure? we're to we than strategies performance Expenses, we are lot generation have then a seeing our much

different So those highlight really our all put is. how does business you when just things it together,

I Jay so opportunity this be front excited about why in think environment. to is the footed

has in institutional your do one trend the And both significantly that the liquid really -- wealth. alternatives, bodes seeing strategies. seen think performance, just well and that that the most positioned year, I absolute say, in value of flows, for move this towards of and following something in our these we're So a resurgence relative we're terms question, this That area in relative at public last is a have really positive return we up performance. strategies to thing, towards are peers. of already other client seen major uniquely AMG, future terms activity This is pickup

Thank you.

of with from of your Siegenthaler question. comes line question Craig Please Bank proceed next with Our America.

Good both well? Tom. you're morning, doing Jay, Hope

morning. Good

then I would was the and upfront. roughly paid to looking rest And at XX% payments how deferred you contingent purchase structured it the of be Parnassus like transaction price payments. you look

I cash to year can and payments, free us understand as payments any announced deals and how for this year, be out So could we help next with that? provide model deferred already flow, want contingent the if you large

one? do to Tom, take want sure. you that Yes,

Yes.

partnership the that you're little fees I In a well-positioned a through. incremental our basis. transaction. So on is we're the shareholders The of ability that from making going that relatively and generate business our overall shareholders. The are And waiting frankly the the to seeing flow cash modest, get what in that cash the is piece and excellent affiliates that us is But with, of we we the between that context and in less sense we're our did the a our Parnassus to we AMG Baring context tend transactions structure flow quarterly we to of similarly, overall both And front bit that the think walk Craig, all performance right our strong in to than transaction. probably outcomes. cash spend. from there generation, number you for many alignment the ensure out of we're structure have our really on

think liquidity. you got in kind page from -- in talks if that of our We've we deck So about -- a billion gross coming X investment plus about there's on us a Parnassus. billion basis another of

about, the thinking in a over course years the couple start contingent. million $XXX deferred payments of you of If couple and next

what You're we in of the would expect. range

be contingent of well very Importantly aligned with underlying businesses. those performance general in on contingent the to going payments, payments are

So businesses may owe to be structured. modest, tend the tend they you we'll payments. of to right we better the more will. those, terms those risk do, if in they be have contingent on way Again, But

it's just On way it's us timing really really profile. the to cash a payment deferred our piece, overall a matter. And flow for continue to manage

to the at new transactions tool I here, in of as put or the don't pike being these in in So we payments. to it us work, investments, look way you look or to into and if significant ability is really on that the repurchases important contingent in that enter down sense. a a quantum will, for see impairing either terms our capital deferred structurally payments makes from But as anything we come,

Thank you.

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

thanks. Okay,

in One to appreciate Just of and the diversification resiliency question the two generally the of decline got a pretty in. be the EBITDA and just sequential sort struck trends. part affiliate what business drop. X% I'm the sharp I against just shifting market guess seems by allocation

now, then back, could Jay for just you. uncertainty the or market if of million here hold on just delta And this you quarter quarter. of million $XXX just seeing a $XXX curious, step Thank you Tom, stepping to Or more everything? unpack investments some action are for up the of second now? why So of in new right conversation the bit down putting sort things for giving from don't the just the is maybe

the one then and turn quarter. I'll the take Bill. maybe and the the to to it thanks, here, first for next conversations, you the in up Tom, about Yes, I'll items step quarter talk modeling

So question. for your again Bill, thank you

XX last far, strong can we exactly have haven't the investment seen explain our you it; I'd M&A for when choppiness I slowdown new I'm we've the now really I is seen. I months, mean, pipeline. hit sure guess so even pretty On we interestingly, often there like not in activity side, in slowdown say. a And a market seen and

In new look front this our seen at We if of even may the an in pipeline. at have period. fact, past just discussions uptick you end

to So be see we strong us. for continue do set opportunity the to

inwardly looking margins, said do expenses think fees are focused this and as I the Tom opportunities. a be sensitivity environment, things they on that all and to. competitors our that have mentioned, of for will We In that more we number we less as focus

we're continued in that for pipeline we're with of active so shareholders. benefit And that opportunities this us to invest see for to period our going hopeful the

positioned engagement their We And well-positioned especially we independent partner, marketplace. active with to distribution resources objective. and are are the and an are our own engaged our on help I think increasingly, meet strategic independent seeking continue uniquely firms firms in to do that

So our AMG -- being probably the better. strong. the rationale we for pipeline And choosing see been never

out expect would of we this to environment. So activity come

the turn Tom, do it to you do -- to the more guidance oriented. other maybe, I'll So to

Bill thanks Sure. for your question.

quarter, where clarity kind million $XXX And second of we to quarter to with for. it'll looking modest where were in walk of guided from So next we if this give the $XXX EBITDA the quarter, you are million performance I you're fees. we you that hopefully,

of million. and you $XX fee, included performance performance noted quarter, X million that this number we that gains million. $XXX we And to kind mark-to-market of EBITDA gets about reported gain of X an of that adjusted $XXX fees So

then is million about of $XXX talking $XXX really delta million range. we're between kind million $XXX that what the So and to

lower. fees in in third tend Just be as reminder, particular seasonally performance to the and quarter second a

that two that it $X change million markets you And million from of range majority performance to assume modest should has $XXX $XXX to ways. in million million a about very And in So that call $X the think million million level fees, million, is to $XXX $XXX there. you that $XXX markets. really vast the of should right

as our secondly, market blend of performance, QX then, the where the First, market the full shape impact of down is we the in quarter. first the Friday. And given X% told you QX the of mark, about that

week try to we Now, week last challenging day up and earnings. mark-to-market And the very tend a obviously markets. the announce we to right before was in

strong very I've So to and having about about the here we're for to move that you're our also our full-year EBITDA the in about The of trends, and answers the little straight-line a in top-line rest sort back of and that respect the seeing fee make talked today a questions the course at the three number think we're strong. year. the would expenses, talked the bit and you think keep fact nature prepared assuming will already that our as drive the those and this our again return of the our to trends quarter. very a our year-to-date to you very fact model, industry performance seeing, model. strong. to seeing to given is and lastly, We've performance points both market downward over things business. seeing have earnings other exposure of latest resilient strong businesses is of times quite margin diversity structural rate that step I the in it's of And AMG. advantages and that business, as with think level, fee business again, And opportunity. impact impact performance the I the though, of any in of on The absolute the relative high. the higher The that has excellent unique the really then been we're strategies the about we strong from the remarks continue that just in power is earnings

you So opportunity it's well. about strong full-year think the as there, very when

have flows in express quarter. most itself one the just capital with and really and business. flows categories. expresses the then, bring lead what position the there. at with look you Baring we've maybe you more flow in add, nicely our presumably those importantly, strong in we quarter-to-quarter we The especially those couple absolute next doesn't that current any do mark, said past even flexibility when strength capital you quarter, in any all market. of when in will week And last our lead lower very When wanted business will our do return in and and significant to to transaction really way Yes, But we was look it Tom do over seeing continued strategies, it believe where week earnings just cash to, we been it story, to that a which itself, But I next our seeing the flow was and think balance better look good it quarters, will from sheet lead the our you're growth. the performance, is categories,

you. Thank

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

question. your a guess more risk good I reminder and impact strategies turbulence as products hoping think morning. And to some the for you how in of potential a on mark-to-market in outside U.S. trends with Hey, for currency the in maybe I that zone Are non-U.S. the volatility the respect guys, appetite should Thanks. on and second, we a there. could of given any maybe was U.S. little the the highlighted well? one just about markets. Thanks of the seeing kind sort non-U.S. for traditional you rising the you that of

thanks, Yes, piece. top focus on the Tom, a flows, holistically, down about non-U.S. just Maybe but a we'll with and take talk Alex.

nature not given of you're modest questions business. our dollar, impact the it's our just Maybe global into does us. that begin terms basis, and baked is we've the Sure. massive a FX of I'll is to But raise right quick you start go-forward quarter of in obviously expect next should impact I'll answer, strengthening on with, that a for to Alex, certainly, estimate so that, us for it the maybe which with headwinds in that one some your seen

So I'll flows maybe some back the products. overall to then global on of come and

framework, really maybe is drives noted remarks. that in what prepared Jay his just First, changing environment quick as of in in terms a right, much as flows, particularly an

our are of in for First, need of there this market flows. the environment, these that you we're obviously finally, certain are to the their Then a the you need well you we're well-positioned that seeing actually opportunity. particular types that And clients all And strategies given role the need work. up perform affiliates. of are a in our time. strategies recognition to starting changes them you in absolutely to number understand is also to then, portfolios. environment. real strategies where it's happening a well-positioned And recognize market. really And strategies And that type those need in seeing play that are going to And across show to

changing we our very for that More about them that continue private a our are than this already this So collectively strong and business. it half quarter, going those forward. of of EBITDA of value, well-positioned talked and are those to we've delivered part environment, Jay areas type really Those strategies trend markets. alternatives, liquid flows big earlier. expect referenced

As rate well. been fee our that positive I a mentioned also for earlier, and we it's as like

In addition, in our and had more billion in well. strategies than saw management ESG inflows wealth the dedicated $X.XX as strong with inflows quarter also we in

also very the So for future. well-positioned and our business of inflowing today portion overall a sizable is both

immune to both variety We conflict to be we're book. long-term decades of remains are about over and reputations of that around we're businesses the your known performance These class. and global take in very And our in to going and completely markets said, really China's market that strategies, into respective near-term of very emerging markets products, cycles advantage of well with That course, your some terms investors of performance is their terms good be up affiliates to this equities dislocation that global in to clients global affiliates we're investment And feel seeing to time. of position quality cases emerging sort strong to portfolios In our to pressuring immune, question, reconsidering that, category. in not of market going our in a question not their are our course asset are are strong. of ways. overseas, allocations put volatility seeing and the look, seeing some the their over global the are affiliates, looking

So certainly conversations. seeing those of some we're

the remind and XX our focused the IR seeing as on you deck, you the over the quant seeing improving we And X in story and gives everyone one flows think side. particular thing flow on importantly, any don't long-term, just fundamental story, say one last that I I'll is see, the on a here rolling both positive what picture side, months think we're to quarter. in as flow is [ph] Really, can about momentum of really you're we're of Page well

this activity changing see do for of marketplace to the us the we positive. So

where new benefit that, distribution that. And successful that Our the execution an our see being an that seed we're our includes of flows a are We and us getting investment we investments just in see output capital. in in strategy. with of environment really the and ahead of of making working, strategy, affiliates and now that getting we're of we're ahead

market in understanding, So we're prospects, environment. we're the excited even though about a we're forward difficult

you. Thank

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

can you EQT are impacted on again, about to post you planning just that just repurchase do any EQT if I how dive Tom just and that morning could talked Maybe terms private the the the plan, you parts that from longer-term that capacity investment that transaction, $X deal from quarter, pipeline the this if in different on terms you you the and of versus thanks. of Systematica share in Baring transaction, to with transaction definitely the from the an XX% you of the if Great, folks. of invest Good as of accretion And early in that activity plan fundraising transaction? and could overall impact for the about into accretion billion timeline internal the types and deals. initiative you the have your much things touch on terms growth guess other read what thinking fundraising XX% be I did in in of well how what as this

Well, morning. Brian. Great, good

then couple Let Tom regroup. there of missed questions a why me, try me any, we'll I there, start don't help to so and is in if we've because will and

significant quarter. So we the did do -- we transactions two in have

start So let me there.

of about end we from of January, the the was completed last And third-party which our early equity carryover was was where that momentum that's has the fully in over last year. business kind business. years, that its transaction. first from is a repurchase accelerated really And a doubled. in terms remaining the business to The We've interest very the transition to six where in wanted a and Systematica, seen almost we're Systematica of of excited be that the

really to course, I perform this it that timely year as doubled year. now us then the And delivering our time. think business purchase period in continues of strong nicely, here very for this performance has of very, was

business up XX% year alone. think I the this is

typically quarter, that. Systematica of it it So one Obviously, year. significant earnings continue within fourth fees, the performance that is very And and performance see from and some themselves saw was We the this we opportunity. throughout to we'll performance constructive would and mentioned our good in on opportunity quarter. fee performance of those most see performance as we're would the Tom really express fees

our just line in start it's our in was model. and with quarter Baring history, shareholders. somewhat see saying, let fully the it other seem merger. may that while The the unique EQT context the very transaction significant we strategy outcome as me And a in our And by for good of

that we've in years decision partnering strategic thrive. alignment, right that aligned AMG shareholders. for to them. Baring it the significant of resulted of And the proceeds They to over a been grow here merger with really six the partners outcome was help our the that last business because As and and made

Now, this year. those proceeds will come later

and so our patient And we about thoughtful are approach. being

including so it's and around capital and that, that. me of just for how thinking timing time maybe Tom And we're it good review how about turn we're it to a to the

and with Yes. for just help some kind can to And some the Thanks, Brian go of of facts through question. your math of I your question thanks Maybe here. the Jay.

little And allow in simultaneously initiatives, really decisions the all framework to when incremental gain us investments it's will which lockup to million more repurchases. expect that of XX% of It's our that transaction billion same capital to in shares to initial your position. dollars run the have going our to six already interest closes, about customary I'll are acquired put that the where we're and time, a we are allocate subject million. today. going work, about flow is remaining in And gross in to down, basis, even anticipate And tradable level, highly we that a be as be to is transaction XX.X enhancement question, proceeds total our shares equates per going earnings you approximately those a allocation bit freely of to further quarter, post-close. capital of pay for to about the fourth new share stock XX% proceeds EQT. to to return its being disciplined to on and sizable enable So And of noted the agreement. in expenses, go strong your our going are and a significant debt think combination Brian, subject capital to be you that At a transaction to. highest XX% XXXX when XX% us $XXX approvals; the this in going owe And of we existing AMG $XXX subject into XX%, the realized receive when on closes. cash we're million that purely given and shares over of invest affiliates. in gross is a going taxes referenced month of we to as plan more to I cash that capital detail. XX% also existing generation. shareholders the accretion noted to The growth via we including the will the base through question, Baring and

in First is the capital incorporate Systematica XXXX. only Baring is Baring number transaction. earnings And expecting will $XX longer it's part of associated of financial about just with And the that we're of unlocked the of associated statements. that's net in upside that's go that the our any once that away also with doesn't million the that transaction all, no right being Baring

both over take rush. we going disciplined. you our of approach, of that making accretive investments of in to paying a time also mix, be assumptions growth business value is to that will EQT on note, number and us, of capital. and We're a shares. think put number a shareholder our can the our function to mix stake to capital different that So that can the to to the be We're I'll have going But going terms is different net we patient opportunity significantly allocating monetizing our the be based going very taxes, Obviously, to creation. number not a in ways paying we work we're repurchasing debt, down and set. make to

there that the accelerate that a the earnings on We number over have of transaction play of need the in of of are goal to our goal both in execution valuation the closing, in strategy, variables. shape The against strategy is being with the growth that creation to variables of timing the on time. out. monetization, organic obviously, investment shares, place. of a maximize focused And those value really to context We're and all executing still in of And the opportunity in set front us. and

you. Thank

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

XXXX remind I have of things change there's you In that first think How versus while could with sits quickly? morning. on with how would periods where comparison wanted can a to the based like regards today? the of what fee you performance time to mentioned longer other of firms firms characterize magnitude way performance. some in fees. good high watermarks think very underperformed about AQR performance Good you opportunity where fit or where and If follow-up having these today and and time, some good are performance Thanks. that of if us on you sit that Winton knowing for we years? -- the a I that the a the for Maybe for

your Yes, Dan. question, for thanks

me start. Let

several all You're Systematica those XX for quantitative now. months years And right have in that the AQR strong cases and and in managers last our Winton of and some really been XX had really their really for really as I have liquid characterize would And that performed handful these strategies strategies. a they've particular in and being very you would AQR, of alternative higher -- nicely. return absolute fee, businesses maybe type

long-term improve, about performance at And produced difficulty] significant AQR they as the are period. they [technical so in above fees and what continues Systematica, prior this their cases improving in their many in And those can both at and period. watermark are they've we're do and Winton, high already products to optimistic performance

that the years, seeing for improvement and to resurgence right, that potential from the performance bit maybe So we just time flow that a Tom that this turn fees, revenue add in to really to performance that's But a say you're -- the to of there. leading the more performance to category for I we're And in can because I'll the first coming what for performance. would do year. many

the Yes, thanks, thanks question. And, Jay. Dan for

of on in coming component our our a earnings number that has year economic the the is durable of part the to frankly, a guess And more challenging core start to over from tended count flow. our They've that, last proven I'll upside. amount economic great somewhere from perspective, capitalizable the I and really fees So X% And performance it's business. environment, fees, cash to asymmetry there's That by important we earnings environment, range speaking, saying, time a be are course really a of to and years. out. be generally of five think can performance whether the a AMG averaged XX% you in over year a

flow continue seen this a us. it's important nature but existing about P&L, of and strategies important we are durable both obviously, And our where Systematica, And generation long-only, us. you cash AQR, shareholders. strategies. and that's So bank, quant investments a about the you then really a value economic really the and strong environment. and the break a but to us performance is and base focus opportunity in that we these so it important are thus And three think perform affiliates to we've Winton built reference, we build going fee interest new that's Strategy. to Garda in Capula, opportunity concentrated to to of really think strategies be current is important bit little also We've day that in across Really, longer-term are performance Absolute in affiliate carried for talked our our be earnings into the certainly going Return making different stream stream more to can this environments. also really very the past, cycles And buckets, as relative challenging far. very, the the to Illiquid at economic as

this is our the all to Now, feel really would of times. diversification that What's we opportunity just here profile. are depending strategies your for today us, from in you think some early, of noted develop strength obviously, And Dan, where working performance strong the cash But very really upper in markets at of business fees. question, about lot in still range that feeling I of like powerful and we're flow year overall how on is terms our an and we There's end it of diversification there's that's left. here. terms the important, a really performance think I fee in stand And certainly generation. of about

just, for absolute environment would It product, feel And and are like got it we've again, business. I those fees meaningful performance that really reminding that especially to return means we're everyone in that what, the performance. mean Yes, are reiterate really good in. does products what our

different say you business. just performance from it's sources pointed had as Tom stabilizing always could they relatively our stable different at come And so out, fees; But we've times.

Thank you.

from with Lee your of this Please question. final Our the Robert line comes morning with KBW. question proceed

the my how margin of Wondering protection or address into revenue for we margin as invest I a little mean, about hey, Thanks. of with maybe and like, into looks formulating built at affiliates on of you to drill know you follow-up, have no. if maybe that, that structurally, I the tough flow I of thanks whatnot have of Well, so reminding us could kind if guess, of, kind what you enough, and kind I don't as guys. maybe get a your a think bit that, there's should the quantifying, of do cash part way share? down can if that kind incentivize, protections and that investors and that. sometimes, properly touch Cash they leave revenues structurally question at you

Yes.

So your question. let start. Rob, for me thanks

affiliates. but us full to what a method our promises of choose let really conceptually, And their does that really own It mean? just work with revenue their our a have is business, for control plan. to do Just leave share path, alone, means operate them seed grow, as them just capital consultative and strategically including efforts, that we engagement. their as day-to-day just behind through well growth then our And have, distribution decisions, engagement get help we initiatives other them their engage, that some strategic own

it occur. really our And situation. do to we on revenue think model. that's tool to to think share a really so, I depends not our a So that is XXX% It's business; allow the things all of for those

but work for in the a endures of that the open revenue share value are the for firm benefit structures partners. underlying structure our we to affiliates, So to that growing main that

in pools, margin et do I over if cushion to as mean benefit and businesses they businesses think about of expansion at endures that's faster EBITDA revenue the partners these that it grow scale, what they substantial they develop XXX% up that than what's the that, in really you And so grow, AMG. builds the the occurred by And time, bonus and growth to line. grow their And line cetera. of that

level of environment, affiliates, and a look we've generally come enjoy has asset of just a you which they our higher the the speaking across that had affiliates, our coming benefit large when off cushion majority, that. especially off at substantial environment we've been the So

good that the say shares that adapt in adjust. we see will there's are are don't we're underlying else if mindful and well, that? we you really cushion I of pressure and that have we in there's really, anything to operating revenue pressure, up revenue think have obviously And we really But to shares we're add built Tom, shape. growth environments where because any business want in the I that know, today So those I our if don't to

No, it. covered Jay, you I think

advantages think do the flexibility in question, us and mentioned, thanks I Okay, as Rob. that And structurally, is our excellent. well, model put Well your for around capital. of really it this environment, because, it really Tom

as this repurchases to our we terms and of that And extent disciplined are the the that and really then And of us as stock. partner new of lets our focused so a that allocation capital the growing on businesses here driving flexibility shareholders. well for with we benefit is be investments, are operating effectively opportunistic both in environment, in of what

flexibility So we that for do is that AMG. see an opportunity

Ladies you. floor session. and back Horgen question-and-answer the comments. to concludes final Mr. that our for I'll turn any gentlemen, Thank

this morning. as it for next And forward and speaking quarter. look strong again our navigate environment, remains first we everyone expect and all this a us quarter you hope business has discussed, I resilient Thank you. with Thank you healthy. opportunities that and had to to on safe AMG been joining presents. we capitalize to

concludes This today's you. Thank conference.

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