Affiliated Managers (MGR) 6 Feb 232022 Q4 Earnings call transcript

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

I would now like to turn the conference over to your host, Ms. Investor AMG. of Head Figueroa, Relations for Patricia Thank you.

may begin. You

thank for morning, quarter today XXXX. to Good and us year fourth discuss you the joining and for AMG's full results

this to forward-looking statements. of which update AMG could actual you like assumes a our statements, I'd from materially, begin, may make we that Before these during results call, differ no we number to remind and obligation

of today's any along financial Investor of replay copy earnings Relations with call website call. of our measures, announced available a the A and this will on section non-GAAP a reconciliation earnings our release any on be of guidance including

In addition, to presentation investors consult our we our site website updated investor to this regularly morning encourage an posted and for updated information.

company's Horgen, are the and the With Executive Officer. Officer; to results President Wojcik, Chief us Jay Chief Financial Tom discuss quarter and for today

call turn Jay. With the that, over to I'll

Thanks, Patricia, and good everyone. morning,

growth over growth AMG years. dramatically delivering results earnings these results environments. XX% XXXX, different XX% and economic year, across market share achieved in over we past generated in per Notably, outstanding two the

fixed declines backdrop both by markets global secular per excellent and the policies, affiliates, investments double-digit areas, significantly our risks against new while rates driven Over income. tightening in AMG growth low period, delivered In XXXX, record share drove easy world in and and rose XXXX equities that share, of geopolitical monetary across repurchases. earnings performance from and

success we growth the asset impact will environment as continued believe otherwise of an for forward. Our the allocation and challenging in the going positioned is highlight uniquely we capital today, strategy. of our positive industry-leading quality for AMG efficacy results management and our discuss affiliates our And, of model,

XXXX, to last affiliates have $XXX capital new have million EBITDA AMG existing few AMG in and in XXXX. we the aligning Since invested that long-term with strategically over than contributed our evolved demand billion $X.X growth in we trends. back, for Stepping and resources by years, more

private with markets, two-thirds primarily and of alternatives liquid both strategies. accounted these approximately investments one-third remaining sustainable the including Alternatives, for in

representative growth with an incremental alternatives Capital, high-quality investment year in were the year liquid XXXX leading we in private an made in ended of we and technology-driven We began Peppertree the investment managers, communications the the a strategies. decisions our fast-growing one industry's infrastructure in markets of Systematica, manager The with segment.

of our secular business than to our our growth, of are exposure more increase, peers. we Today, XXXX. as differentiating affiliates growth areas half further that expect And, our in we nearly contribution from and by doubling driving AMG earnings to since continue generated evolve mix, future

enhanced improve In new our with competitive we addition working their value creating successful investments, for our all stakeholders. have their thereby to efforts magnify to and affiliates, our with positioning, strategic partners engagement

The offering, example, Quadrant of Systematica. client of growing product in a investment. scale XXXX, business and their collaboration successful combination with For further resulted Systematica's and more First reach since extends our diversified than the doubled our initial in engagement combination their that supports

our In addition, to Baring, them business with strong benefits strategic realize of by engagement, combination momentum supported in XXXX, at the EQT. a enabled

more received for consideration million than AMG result, interest $XXX Baring. in a As in our

of increased an that Peppertree in level benefit of deployed repurchases. our through already capital majority including have investment the We shareholders, AMG and a share of for

goals. we initiatives. our capital opportunities on build additional over and we our resources objectives, their formation Through strategic time, used development, through broadly, including engagement long-term long-term expect growth have product other capital prospects our identify and to More our to further development and affiliates' affiliates' business to

market secular focused momentum opportunities a entered XXXX in on position the will of balance AMG's that on a strength, strong we in environment. areas overall to enable new emerge a high-quality capitalize with sheet, demand. of us and affiliates a ahead, diversified should of strategy Looking array

taking an future. return and around Importantly, this portfolio to correlations we that client asset Portfolios need in environment the to antiquated achieving be were intentional believe rebuilding streams. and focus renewed on causing reduced models including to outcomes of portfolios construction, new fundamentals allocation the liquidity, essential for approach materially XXXX, change, in a designed will portfolio allocations underperformed differentiated

We investments, buyers firms entrepreneurial to well recalibrate to returns the have affiliates cultures positioned of we opportunities also new market attractive deliver are their always brings appeal as becomes best environment believed AMG's differentiated retrench This partnership to partner-owned that and clients allocations. as be across our most apparent. And for portfolio more cycles. new positioned even with expect approach benefit

high expectations and and in plans, selective are period moderate. valuations markets, through and a valuations disciplined especially we optimistic private business remained of both Having seeing

times In becomes uncertainty, valuable. even an addition, proven partner more in of engaged

investment to reputation partnership likely are produce. collaborative environment opportunities commitment a and to to attractive expect And Our AMG time uniquely and buyers new provide execute competitive we will independent given this our partner our supportive firms a other as approach. rethinking on that solutions positions during unwavering advantages, their when

want commitment on our impact every I we business our affiliate we our and mix, to executing our growth disciplined that allocation our Finally, and adjusted alignment a factoring opportunity benefit basis, discipline strategy to new structures fundamental ensure framework. elements all and in stakeholders. are investment require decisions partners to risk affiliates, of proper process decisions existing and with and our Capital underscore franchise. is and culture. embedded capital These a across investments judgment evaluate the to allocation cash the of flows all in In

of invest, shareholders repurchases. through investments we XXXX, Since billion also have than capital that time, growth into shareholder billion as we significant to will excess $X.X we of over $X.X part While drive also returned value addition deploying record strategy. more primarily track in these have disciplined a excess long-term returning our capital, believe to of share

that but by skew given will always growth, outcome framework. Looking mix toward the allocation ahead, expect our opportunity will our be our we of more set, the investments governed capital

independent with successfully years XXXX, partnering of firms. In we XX celebrate

And evolved, to independent acting objective support their solutions time. Today, providing to growth, our robust earnings growth shareholder and create management allocation positioned our to through significant we to and value firms capital our a advantages. our of business expect competitive given catalyst unique partner-owned the we certainly consistent forward. going our framework, fundamental true as and While strategy landscape over of we have execution are to success asset deliver the remain well

it with review I'll to the And Tom of that, quarter. to turn over the details

Jay, and Thank everyone. you, good morning,

backdrop. of AMG's model reflect excellent against differentiation stand and business XXXX the industry challenging a results out our

outstanding For and the the of $XX.XX execution of full billion performance investment earnings EBITDA adjusted driven economic allocation $X.X share strategies. of delivered XX% year-over-year, and we year, affiliate and by growth capital our per grew

both capital strategies for and generated growth investments strong $XXX earnings our through delivered repurchases, clients driving fee and positioning in the well significant results excess future. And performance resulted shareholders of today million and and share returned affiliate alternative strategy for two net Liquid earnings. us

XXXX, value with resonating our affiliates' As is clients. proposition enter we

positioned significant set solution strategy attract And partnership our balance value. shareholder us flow uniquely is execute cash on Our to to affiliates. our and sheet enable create new to profile

year-over-year, Now share affiliate the up and XX%, Fourth share EBITDA X% quarter impact fourth quarter strong performance repurchases. results. turning were million to our investments of respectively, and and adjusted economic and $X.XX per of new reflecting of investment earnings $XXX

and $XXX During the shares. and received we cash quarter, in was the million million XX.X EQT transaction completed Baring

line quarter our we including $XX For $XXX a fourth statement $XXX million Baring on investment have the GAAP we a a gains and that separate and excluded other as million These booked our excluded on are from go-forward supplemental shares, after-tax transaction metrics and is gain additionally, reported item a purposes, EQT in total gain from gain million, which earnings income on income. results. included our are of and,

excluding in was to across and by Turning alternative quarter strategies that reflecting Net quantitative offset fundamental our performance outflows equities strength certain the client redemptions. business for strategies. billion, continued $X seasonal were and cash

private led Within almost alternatives, billion strong Abacus. we Pantheon, markets in $X and inflows Comvest net another quarter, fundraising billion at reported by $X of with

to Our affiliates investment performance, fundraising estate, continue generate to and real credit, continue drive records their momentum. long-term excellent track and infrastructure across secondaries outstanding

net liquid fixed led income alternative to billion and equity return continued, with investors markets approximately correlation for many traditional and sources $X as the diversification. alternatives Demand in volatility and of of inflows, seek

will AQR, double-digit Our producing for Garda, managers, earnings performance The resulting many significant critical in diverse provided with liquid our in expect fee alternatives performance building XXXX, AMG. of area. will Systematica, in we set portfolios diversification clients, Capula including and environment, liquid market for more strategies and from by outstanding be new returns increasing resilient benefit in in affiliates alternative this this demand delivered client

outflows $X primarily net be growth-oriented continue strategies, of billion Turning industry global trends. with line to broader equities, in driven to by

strong affiliates' client demand category, our recapture positioned are in to they this records time. over well track Given long-term

to the the be and net In outflows in U.S. time of of billion including quarter, $X continues saw in retail across approximately periods improved seasonality. equities, billion Performance we $X excellent quarter. all

Parnassus, relative performance Yacktman, River Beutel, strong including continue to of strategies. equity Road Frontier the value enhance affiliates positioning and amid Our their

Finally, multi-asset management fixed and driven in income into were stabilizing income strategies, flat wealth the and flows inflows quarter, results. by in fixed

Turning to financials.

$XXX quarter, than X% our as net performance of included $XXX activity decline of markets EBITDA and offset investment fourth new in million the earnings the year-over-year, million fee earning net of the performance more grew For fee adjusted strong and and flows. impact

ago. XX% earnings and grew the tax of rate further a share prior-year share impact the reflecting lower positive repurchases year Economic $X.XX a over of per quarter, versus

diversification, combination earnings fee cash a of Performance growth, stability continued to and earnings flow. provide

across several in Our absolute investment and ways; execution beta function assets affiliates as many excellent and flows of fee across return, our a successful strategy private strategies, earnings those areas. market positive growing generate are performance sensitive, of of growth secular performance,

earnings performance experience, fee throughout performance for for and $XXX the update a watermark range position. we will our high combination In eligible year. XXXX, $XXX we full expect our asset base Consistent to range, the are and with informed million we terms course XXXX, million guidance current of year our net the you of historical fee performance earnings first of of quarter fee by

to Now, guidance. quarter additional moving first

our between million up and quarter quarter-to-date $XX $XX million. on which Friday, million reflecting expect be performance $XXX current first based earnings We of EBITDA $XXX AUM as levels was to to blend, fee net and of adjusted X% including market million

quarter a basis. our contribute X% quarter As reported first results approximately Peppertree, the X% to on the a which expected to second not will one-quarter be of will is and EBITDA include impact a year full beginning of lag in reminder, on

modeling Turning items. to specific

was million to it expense interest of share at the in $XX our quarter, and fourth level quarter. be expect we a first the similar For

a level for Controlling first we was $X interest and depreciation similar quarter. million, expect the

elevated of amortization was impairments $XX share Our fourth million reported for the and at quarter.

We expect first quarter. approximately to normalize the $XX million it in to

tax the cash fourth rates and quarter. were XX%, XX% GAAP and effective respectively, Our for

be tax For we at first XX% and expect and quarter, the cash rates GAAP XX%, respectively. to

we this were first the more and taxes million $XX quarter. normalized expect quarter $X deferred in level a million Intangible-related

the included quarter, from which Other were economic quarter, $X In investments. in any capital do we items. impact and the items mark-to-market on excluding first seed, economic million on GP mark-to-market any not fourth contribution the seed and GP other expect

quarter the Our accelerated repurchase share the we year-end. into share be average XX.X count count we for impact first the the quarter, of fourth was expect approximately reflecting million, our weighted XX for entered at million to share program and

balance capital Finally, sheet turning and to allocation.

While business executing in on of highest investing focus we and Peppertree caused AMG's in our to market In investments, back, of both is many by to model in in take and participants October, industry of XXXX, completed new January a and further capital areas two volatility in advantaged areas ability Systematica mix which to return demand. business XXXX affiliates. our by both step shift deploy our client growth strategy. growth toward uniquely existing successfully we the continued

Consistent repurchases. share capital with also million our excess $XXX guidance, returned of through we

Baring quarter, will closing strong our the the over liquidity executed transaction of a million which further into share was the $XXX we first given position, program XXXX. that addition, accelerated half in enhanced In repurchase entered be by

million now Peppertree, repurchases $XXX were many shares. share the we've just the of our with With cash, capital. proceeds in And that total ASR XXXX mentioned, gross our in to monetizing transaction, Baring freely-tradable capital including increased EQT of including funded respect the two-thirds realized and I nearly actions

a free and growth execute and the framework. sheet flow disciplined on shareholders Given repurchases, common year with we significant all investment our entered our balance evaluating through both capacity capital excess to profile, under cash strong decisions to return strategy

ASR. we of For year be and least in investment increase new given we as on dependent activity. conditions ultimate expect inclusive new repurchases at market will set. The $XXX share activity current AMG's million, XXXX, of the the level environment unique million mentioned, of And Jay investment partnership repurchases $XXX solution the full can believe

environment stability business new our confident environment, deploy the affiliates to in we differentiated strength and and are The this to growth demonstrates momentum represents diversity both our The our in generate capital and our deliver to changing business model. and market our ability a earnings positioning significant and inherent continue for in of shareholder to our affiliates In the in our value. performance. opportunity

to take happy we're your Now questions.

Instructions] Thank you. Our Goldman Alex your Sachs. question of comes with question. first Blostein Please from [Operator the proceed line with

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

we relatively guide think if you come what the of on active more through, maybe through above or share And prepared for should to a with about be investments Maybe elevated we start activity for made maybe prioritizing more ** that expect remarks a help So, the buybacks could you does in areas expect investments in? Jay us in the to be your point the little the guys year? share repurchase for you year. mixing growth versus bit pace not

Alex, you question. good for your and Well, morning, thank Yes.

new So, an on investment a first where environment of -- see optimistic in more modest activity have more do we buyers business of going the think environment a after on on modest in new as part being favor, inwardly and our and to the yes, side, address valuations sort in period focused the we part to we we're the also sort change market prior for investments, because both call, historical mentioned and more are we we seen I side, elevated we plans, see of valuations see on expectations. buyer buyers us see

for So, transact. us that's to a good we environment think

dialogue point affiliate last of prospects, really these looking support needs helpful of the use periods, strategic firms, the AMG. something I in in that we something partner independent that our a think they like that with in for. is is they, And that could new are And see really

look active you And pretty do at you current a then, kind pipeline. pipeline, back take of have and we when our step a

of We in strategy new growth. secular growth have invest areas a to and existing both affiliates in

areas do And ESG reflects much So, be in growth. our and investment markets, alternatives, or such areas continue to Asia continue articulated we -- believe new investments more see in areas We've private which expect pipeline and now, long-term includes trends our capital demand areas. will that businesses that where to investing, that we we many as in liquid to in secular in world over to those some the and very economy, wealth. the we areas continue be of -- years sustainable in to and that those to

not to also repurchases. year to course we many But return make growth, because to billion we $X.X guess, the when framework take see capital that and prepared And to, of to billion think next will return I the you're as you allocation over investments we four we the right years the as skew this into lens ahead we years towards investments investments. capital that let's remarks, really last the say governs extent $X.X that in we've four or but out, shareholders. us that share of and those have described prepared more are are quarters put for just last able we I those have mix growth willing would disciplined to We back the new just capital have, we over out a it our into like or

add to anything? have Tom, want don't -- you I know, if

Yes.

think And repurchase. then asked much those as look, about for with and capital Alex, capital that, do first then excess is So, in how and right exactly we about exactly our Jay thinking we all I the is with question should which growth we opportunities thing the your do think you through, investment, our way. what walked

just position I'll our repurchases, spend liquidity minutes and we're maybe in, couple how the a how ASR of plays about on et thinking So, cetera.

highest not So, look, growth to at position. Baring only XXXX positioned level, and significant capital a for the the via said, from strong XXXX aided financial in our liquidity strong but return Jay we results, overall And we're very transaction. entered also excess as by both And shareholders that's repurchases. invest to proceeds the

$XXX repurchases you about the then XXXX of finished $XXX share repurchases, we when repurchase and about think accelerated million with program. million we Importantly, announced

right way to ASR guidance us XXXX, call and that XXXX. what it, to really interpret of our really number we million So, for the plan gets of is, year $XXX million we the million prefunded full $XX then, to in do $XXX

So, as of second million totality which the includes you XXXX, for of the $XXX least heard a baseline the going half to good $XXX repurchases that year. $XXX year, million half that's ASR in remarks, the used my and as in number, prepared we first executed of at then in the of another be million

year. have that we've the for invest call growth And even leverage Jay us levels, sort that at to beyond our cash that's thinking consistent we revolver before earmarked available we to the our of that sheet this $XXX up But approximately it, growth that's today. million in with have really liquidity using about; meaningful a balance about that areas level leverage talking just also or of for capacity all was taking

those return to materialize, allocation course, more capital per we'll our don't if strategy likely investments and framework. Of shareholders capital

being really you incremental whether that that consider investments with it power work, along overall capital whether of the or via repurchases capital have put time. that goes growth $XXX toward a to million to over should return it earnings comes ends we of up So,

balance focus to sheet capital when the and ensure capital the really it, our push or way managing importantly, the overall we that calendar the the our that's out goal we're strategy. have but need quality we Now, and quarter highest that of available, year, in really single door to the not that allocation become all is opportunities any it's when capital

Thank you.

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

and team doing Tom. you the Jay, morning, Hope well. are good Hey,

Yes, good morning, Craig.

to question on wanted I more focus and the So, side. on follow-up just Alex's investment

the to Sometimes lower it time digest takes sellers or bids. valuations

generally at to larger where need transactions another situation some near or firm lower to valuations seeing now? And something great financial side? inside may businesses more maybe the you meantime, the So, over owner distressed maybe in a do of on the are willing firms the term are sell

That's Yes. a good question. Thanks, Craig.

that last one the just period, is over decades, three partnerships longest the drives demographics itself. of the things So, our

AMG that think there's So is in leader -- independent their own. firms. market around with firms succession so only much that the can that on do succession planning We

And ongoing new is in prospects period. demographically-driven a supply really transactions us so, any of for

to then, They've been come And look, on the And now. I prospect for question valuations your up down. think quarters specific is low. relatively valuations, several have going of back them down

that is do the of this acknowledgment came So, -- valuations era think view to I or tightening the guess, I sort growth a be that there kind the that in end in more rear may an of mirror. with a of

able are One come the partnership growth so that transactions we that for of that for to there partner, is allow with structure business a to the protecting level with a simultaneously, if substantial done is together structures that new ways that to credit in share really flow a ourselves outcomes, getting we are give and scenarios. we in down in potential multiple of cash

allows of done. structuring have do unique table transactions bring expertise think, and again, particular model us to our So, to the outcomes, we for sort a in which we multiple get

is emphasis bit the little hands saying and majority of as when is of valuations in my and in I substantial then the saying of a you I is transaction. ahead that all we upfront last me XXX%, buying this, businesses amount growth a are our you therefore lower for of what the you I say, vast would equity on thing partners, in know really cases, you're the because our not leave guess, and partner enjoy are

impediment getting So, as in new this we don't an see that investments done environment. in

changing are I success long-term to over ultimately investments key think because they a as that time. I've prepared portfolio of where of demand geopolitical those are where sided to is do wrong the really got these with going indicator of as going my think be those, the we question is and Fed make mentioned are we new change in to allocations remarks, and trends is tightening. trend And what need the going that emerging

returns absolute affiliates, have to to do what When it about but we today. our bode own differentiated think particular strategies alternatives, deliver we in affiliates we return, and our also their and the that on liquid ability in streams, differentiated reflects well this current pipeline rotation think for

environment. We are firms that have changing at looking very could benefit much from that this -- in allocations

this So, of. when and trends is I what for take throughout would right are prospects acute are And affiliates firms we for us, We cycle. we strategy do the firms to way time new looking life think become can independent because we growth of is those have that the secular out, environment. their -- committed more that a have needs advantage even our say supporting not in zoom

do we So, could up go volume transaction here. that think from

you. Thank

of from comes with your question the with Bill next Our proceed Katz question. Please line Credit Suisse.

taking Okay. questions. very for you the Thank much

to migrating this just maybe maybe a discussion point. So, on flow at

come sort Jay you think of spoken where about what will talk this volume if from? you both and about have been driving that sort of now, what's rates that little you. normalized, alternative think a So, you. liquid accelerate, And Thank Can flows? bit that you do the will rotation alternatives you ongoing have Tom,

your start on here Thanks I'm for question. Bill. thanks. have Yes, that. going Tom to

So, thanks Bill.

new that areas you allocation capital also flows driver business kind flows are everyone, driving remind Let return maybe important walk over one performance and think of in capital. But XXXX, and is very through in to AMG's are to the unique. a growth, me our really excellent business. in time. And even then the really by significant our of go flows, of performance of driven our was And just I really growth just obviously, drivers business, there, the performance important model But of investments before fee overall. about number driving we growth tend earnings, in drive delivered, that just if other it strong a

strategy, really So, only important are going components they that's an be important. our output are the one of obviously, of flows, but to

discuss heard earnings that enhance strategy, you towards mix So, us evolution more That's way expect growth execute we growth we secular business. and against And think business profile our of about areas. driving long-term the of as strategy business. organic continue our is we to today, fully the really the that an the to growth growth

touch both private I'll on will So, and liquid the as well. as some side market Jay the to want sure I'm add as side, well alternative

terms In the XXXX, we more stand, of all, XXXX and look and January we for we year of to that a up the positive where start have much constructive was lot in first versus of overall for environment setting a beyond. AMG faced

number continue well-positioned flows to they're we these markets valuable as the of fee We credit, from said, benefit real infrastructure affiliates. private assets a are and potential their incredibly depths interest. rate, and including carried And raising and to their given long duration across estate. strategies, diversity generate our of And the

away also And AUM traditional private impact where is the our markets that's fund and effect of acute equity raising. you're I importantly, denominator of private most from most the think seeing on

we more that private given So, insulated from markets our feel of nature affiliates. the unique trend

in And delivering with positions clients as liquid more well terms very and of return having of active all future performance. on portfolio construction sources, flow that know, opportunities. the and strategies, uncorrelated around alternative then, we're us and diversifying dialogue excellent much you value We're

of billion to and over EBITDA. now more two than our of course the overall the XX% collectively of $XX inflows together, alternative So, strategies approximately into alternatives represent seen years, those put last we've

we value and In given positioned it round equities, strategies XX% we're three-year out through fundamental strategies, even on rest outperforming and benchmark well value and toward these of U.S. to business. And the go in just of strategies to performance be categories clients. our looking tilt period. the more Maybe general focus ahead, U.S. our with is their our very the excellent. sustainable are expect

our equities significant some of equities, in what happened in was sense, we that of that That remain terms in the the we've clouding businesses. the we pretty business as year across you records say positioned profile is the And terms underlying been making global in of industry. difficult XXXX, those of in that the flow the affiliates Look, de-risking quality just a progress second equity AMG. global obviously, overall and half track of at could really the saw said, long-term well the global of

And fixed source quarter of also signs income, growth, saw XXXX. out wealth of and box those stability we're early multi-asset and positive been then seeing our we lastly, some businesses, on and a long-term in have income very in the fourth in inflows fixed

we very overall, a sizable business as led well the in for position long-term flowing today by both really of So, positioned our ability growth. drive well future, is portion overall alternatives, as in -- organic and feel confident our to

me remarks. a editorialize bit Yes, Bill, let just on Tom's further

our really and abate, markets that our business. The early said, of liquid it on the long-only private down on and outflows and seen Tom other part slowed have as the part think hit side. risk-off driving in have environment January equities our we've was alternatives February, second a business. really really It clearly, And business. very long-term been some it underlying the organic of half growth of And XXXX, much we masks of the trends our our in that

strategy. really us, for output really flows or Ultimately, are of just an our

can And what high that XXXX grow XXXX. invest and share, in flows conviction come our do And the We drivers because if earnings effect see growth secular really we in have areas in existing can will we're I we Tom or investments, this said, drivers flow then see multiple see they and we are AMG's is period in come to described, did per can follow. pretty ultimately were from see earnings and just And We we repurchases. cash see four and new we it share of three to performance, got economic model trying which our we those of can unique. drivers come of those drivers, the as profile. flows, affiliates from and we our from that is new significant the it compounding that affiliate

Thank you.

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

remove focus the ex-quant and discussion seen business improvements to this Thanks. that on or of liquid of kind Good be in basically for think performance next? the over about be having success do quants. And this or two going portion Thank in your XXXX? alternative but morning. how about Wanted year gross talking And the we're you and given book, clients maybe you're you. the you that would the business think helpful. follow-up last you've Yes, to talk on with sales about years, that discussions

Yes. Yes. Good morning, question. your Good question. Dan. Thanks for

liquid performance So, alternative profile for nuanced we've outstanding more to point in kind reporting of because we are still gotten It's so, pie strategies, think flow those risk-off albeit strategies. you're to of long-only ex-quant with some quant time. And situation had right we some have slightly out, my been a an it seeing smaller. -- has that part some I that pie in the equities, of point, prior and global

we quant allocations. excellent it of very the just side And the go underrepresented could they've So, just that alternative straight in strategies be have kind to liquid do flows been well XXXX that we back performance. in because up think client of

to think do we going change. that's So,

these we're those into around to indicator, change. think absolute searches, strategies. alts your level Now, return conversations than allocated activity and strategies we of of worse those to takes you we much trend, macro, increased -- affiliates for of allocations And having had an if under in to if allocation think more Clearly, portfolio at increased multi-strat especially look, types it conversations level just these XXXX, fair And portfolios time that a these those performed putting portfolios. strategies. in are were need of liquid those

of liquid Winton, our in had excellent great categorically, in all S&P. either those benchmarks performance Garda, the and into 'XX. alts. And in really Capula, and good, performance almost organic Most very three, just So, we numbers flows in performance firms they their markets see 'XX one, even their do increasing or all 'XX, XX-year Systematica, 'XX had five AQR, is and competitive like look with

growth see these do increasing So, we into organic strategies.

as in of late areas high-quality that in experiencing specialty our a communications Peppertree, fundraising. well that within which bucket, year business not significant on number investment Comvest and are including segment, about sort when really private debt in of which manager the also still businesses discussion we the lessen alternatives significant we private have a markets, are infrastructure, made around growth private and private you as number a markets, which last And of other markets, think was a to

our our generally the chance just lockups, we higher forward. So, fees, that Tom driving comes performance alternatives with growth for see going many said, fees, area, longer which in cases, as

couple quant, but you overall statistic maybe, And absolute one sort fee return incorporates to to we've and a years. just the just evolution give you not just kind Dan, sense last a that book, sense, our over of to of eligible give of I'll performance seen add this just of the

by since in that above we today have return increased high the watermarks AUM eligible absolute of has more that are than XXXX. strategies XX% beginning

a really in types is clients and our but book overall conversations real that overall. sizable of over flows, get think fee So, new you the opportunity, performance not driving driving when do earnings those growth about that's that network opportunity, performance performance we excellent more us of think And the with and growth positive a we a only effect is for is to earnings, where time. portion and performance organic position excellent fee really also just characteristics deliver more do

you you new you clients, new fees. is as this, get with that clock know as know performance Dan, And start and and you performance I the know

watermark (ph) positive our high performance new the even clients, is And upward business the so, cycle today. seeing what for we're you kind [we idea more in have there that is which above opportunity, get] of with a that fee opportunity

you. Thank

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

that's to morning, you a going folks. multi-part I'm give okay. question, if good Apologies, Hey,

Just a things together. few linking

really strong So, first EPS obviously, of relative positive asset manager XXXX all, growth. to the with peers

talk So, about that? of level growth? to the what probably your sort repeating your going confidence make for the if year talk overall. just for to what's you challenging confidences have EPS having positive industry. manager asset about industry of EPS going You're can Maybe in It's another maybe in headwinds positive

by think about think new then, liquid or being obviously, monetizations about alternatives? that maybe mostly being the on driven And lower, a investments, guidance side the alternatives as performance are we And the illiquid you towards more little headwinds, down? private being if is capital you fee geared on

Tom some Yes, thanks, that around letting give the wrap we specifics be lot guidance call. might of gave on Actually, you more Brian. a the able that into to we

second. do So, in let one here that Tom I'm going to

the look Just expressing businesses above come The the we at fees. with high took was that confidence, And excellent. the I performance mean, guidance the assumption XXXX, that we it in the of up that's course, in was And amount performance types do of have way we is a level and watermark, down. have, of that at conservatism performance kind excellent. look we described, we around we way in of even we XXXX,

fee just candidly, performance estimate the there. in our is So, of conservatism level

In generate you Tom guidance. performance reduced the given we've this two years, that over level you could that amount that need has actually last to argue fact, of the we

So, than year it's or year last the probably conservative more before.

upside there's Tom and out capital will will guidance. exactly put when of our So, upside into that's sort go also why which can't in There's capital, there. describe, it prescribe we we but that haven't

two positive February but XXXX to two like determine out really drivers. market things year growth we'll the still are sitting beta XXXX, that plays able over our well Those really as in do here very in that How that. be this optimistic we're as will things

you And then, Tom, maybe can more give specifics.

your thanks question. Brian, Yes. for

And our quarter that of sort maybe would year just number bridge So, full you through obviously, want how do are the that. of I'll is first as you assumptions there I'll through make a do conceptually. what guidance to you'll to walk

fair as know on the the of in I per as those as are did of none state We've our gains in gains. or prepared share. realized well the that. my of numbers, that in well EBITDA as we our included our I were to that, gain both shares all fourth gain EQT around mark-to-market there but the the a just But economic particular, moving I amount this monetized before excluded Baring quarter remarks, earnings in do reiterate, parts,

those So, both well sizable EQT clean are numbers, the just shares. Baring to gains excluding the as be on clear, as

number a that really the run management quarter rate about the run the to your for $XX today. point, $XXX fee pretty of million that starting adjusted million a year performance business you where if includes $XX rate fee on to first to million good of use quarter EBITDA, earnings EBITDA first guidance to range So, which as question, starting is -- million gets and a stands our you dollars then based $XXX address thinking fourth for of quarter point guidance the of terms in

can course, factor your you in the in starting And of in get to to year EBITDA something estimate. and an fee management that quarter then, beta you X% a Then, of and on Peppertree make you'll impact about assumptions the basis. the second and flows contributing of EBITDA range will own annualized full

And you general the then, to Jay of full the earnings that year $XXX year. of talked of the and $XXX this we fee some early about into baked range conservatism gave for guidance million on performance million the stage at

or So, for number. full that range a a number to sort get full year add you to can of year a

$XXX partially given mentioned that toward in full That's excludes mentioned leverage just a any really we of an excludes have to number And investments. business, I upside as numbers deploy tapping our revolver. or terms today as well, importantly, But in the incremental capital so earnings that to the of as our growth that reflects it power or only and of incremental power. million earnings Jay question previous

capital million you allocate growth us through about earnings expect how is the able think I on that regardless to of ultimately more aren't and put terms repurchases. goes, power capital you we of work But to into to of power of if excess how time. shareholders business the you capital want about over to you the it business, think $XXX that time, think toward that and factor do run return in depending should to that the should earnings over where rate of when that And

and appreciated Yes. invest driving have to discretionary what's were shareholders. That's flow I cash in we we that a been And think But opening that a cash we because framework relative of peers, continue part expect our the growth. direction do that strategy business peers return we a ultimately into relative differentiated our have your statement to in to flow allocation in our to XXXX. if nature of earnings that not, our capital positive to to that

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

morning. for Thank joining you all us this

shareholder XXXX. of to in disciplined forward growth execution we allocation We And next are going you framework, with forward. the create speaking ability value you and As capital heard, our in look through AMG outstanding strategy significant our our confident to achieved results quarter.

Thank conference. you. concludes today's This

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