Company Overview - Affiliated Managers Group, Inc. (AMG) is highlighted as a favored company, with previous discussions focusing on the yield potential of its baby bonds and profit scenarios [1]. Investment Strategy - The investment strategy involves identifying mispriced investments in fixed-income and closed-end funds, utilizing straightforward financial logic [1]. - The team, led by Denislav Iliev, has over 15 years of day trading experience and consists of 40 analysts [1]. Service Features - The service provided includes frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1].

Group 1 - Amazon.com, Inc. was named as a final trade by Ritholtz Wealth Management's CEO, with a Buy rating maintained by Jefferies analyst and a price target increase from $275 to $300 [1] - Affiliated Managers Group, Inc. was selected as a final trade by Humilis Investment Strategies' CEO, supported by Goldman Sachs analyst maintaining a Buy rating and raising the price target from $300 to $341 [2] - iShares US Consumer Discretionary ETF was highlighted by NB Private Wealth's CIO, indicating positive consumer engagement as tariffs are no longer a concern [2] Group 2 - Uber Technologies, Inc. was chosen by Virtus Investment Partners' senior managing director, with shares gaining on the day [3] - Uber announced a renewal of its partnership with TomTom to enhance routing and location services for its operations [3] - Amazon shares rose 3.4% to close at $240.93, Affiliated Managers Group shares increased by 2.2% to $310.31, Uber shares surged around 6% to $85.54, and iShares US Consumer Discretionary ETF gained 0.9% [4]

Core Insights - The S&P 500 has reached a new all-time closing high, driven by improved sentiment following a decline in new applications for U.S. unemployment benefits and strong economic growth of 4.3% in Q3 2025, surpassing expectations of 3.2% [1][2] Economic Outlook - The resilient economy and consumer demand are expected to support healthy corporate earnings, with a positive growth outlook and anticipated interest rate cuts from the Federal Reserve for 2026 enhancing investor optimism [2] Asset Management Sector - Affiliated Managers Group, Inc. (AMG) and Federated Hermes, Inc. (FHI) have reached new highs, reflecting bullish investor sentiment influenced by the overall economic health [3][8] - AMG's shares hit a 52-week high of $293.74, closing at $291.13, following strong Q3 results and positive Q4 guidance, with expected economic earnings between $8.10 and $9.26 per share, up from $6.53 in Q4 2024 [5][6] - AMG's pivot towards private markets and liquid alternatives has driven strong inflows, with $17 billion in net client cash flows in the first nine months of 2025, and alternatives now account for 55% of earnings [10][11] Federated Hermes Performance - Federated Hermes shares reached a 52-week high of $54.48, closing at $54.33, supported by positive market sentiment [13] - The company reported record AUM of $871.2 billion as of September 30, 2025, with a 7.4% CAGR in AUM over the past four years, driven by strong money market and equity asset growth [14] - Money market AUM was $652.8 billion, with favorable conditions expected to continue as yields remain attractive [15] Financial Flexibility - Federated Hermes maintains solid financial flexibility with $647.4 million in cash against $348.3 million in long-term debt, supporting shareholder returns through regular dividends and a share repurchase program [17] Growth Strategies - AMG's new partnerships are projected to add nearly $24 billion in AUM, while Federated Hermes has strengthened its platform through acquisitions, enhancing its operational capabilities [9][16]

Core Insights - AMG Lithium GmbH is in the qualification phase for its lithium hydroxide refinery in Bitterfeld, Germany, which will be the first industrial-scale battery-grade lithium hydroxide production facility in Europe, expected to operate at design capacity by mid-2026 [1][2] Company Developments - AMG plans to process both technical-grade lithium salts and recycled lithium at the refinery, contributing to a sustainable circular economy, supported by €36 million in funding from the German Federal Ministry for Economic Affairs and Energy [2][3] - The annual capacity of one module of the lithium refinery is 20,000 tons, sufficient to supply batteries for approximately 500,000 electric vehicles [3] Industry Context - The establishment of a backward integrated lithium value chain aligns with the European Critical Raw Materials Act, enhancing independence for raw materials and critical materials in Germany and Europe [3] - AMG's mission focuses on providing critical materials and related process technologies to support a less carbon-intensive world, with a strong emphasis on energy storage materials like lithium [4] Operational Overview - AMG operates globally with approximately 3,600 employees and has production facilities in multiple countries, including Germany, the UK, and the US, among others [6] - The company's segments include lithium, vanadium, and technologies, with a focus on reducing CO2 footprints and advancing recycling efforts [5]

Core Insights - AMG has successfully pivoted its business towards alternative capabilities, which now account for over 50% of the company's EBITDA [2] - The company has experienced significant acceleration in organic growth, with flows nearing the highest levels seen in over a decade [2] Business Momentum - There is considerable momentum in AMG's business as it heads into 2026, indicating a positive outlook for the upcoming year [3]

Summary of Affiliated Managers Group (AMG) Conference Call - December 09, 2025 Company Overview - **Company**: Affiliated Managers Group (NYSE: AMG) - **Industry**: Asset Management - **Key Focus**: Transition towards alternative investment capabilities, which now represent over 50% of EBITDA [2][4][6] Core Points and Arguments Business Evolution and Strategy - AMG has successfully pivoted towards alternative investments, with alternatives now comprising approximately 55% of EBITDA, aiming for two-thirds in the coming years [2][4][6][8] - The growth in alternatives is driven by both organic growth and strategic acquisitions, with a focus on independent firms that align with AMG's investment strategy [5][6][7] - AMG has made four new investments and one strategic partnership in alternatives this year, contributing to the growth of its affiliate base [7][8] Acquisition Strategy - AMG's acquisition strategy focuses on smaller deals, typically with an enterprise value between $250 million and $1 billion, investing 20%-60% of the economics of the business [15][16][17] - The company emphasizes maintaining the independence of its affiliates while providing strategic support, including business development and product innovation [13][14] Organic Growth - Liquid alternatives have seen a significant turnaround, with AQR being a major contributor, managing approximately $45 billion in assets [18][19][21] - AMG has observed positive flows in liquid alternatives, with total alternative flows exceeding $50 billion, two-thirds of which are from liquid alts [21][22] - AQR's tax-aware strategies are highlighted as a durable trend, addressing the needs of high-net-worth individuals and wealth advisors [22][25][26] Private Markets - AMG's private markets strategy is focused on specialized areas, with Pantheon being a key affiliate [33][34] - The company aims to leverage its scale to provide unique access to differentiated return streams in private markets [35][36] Financial Performance and Capital Allocation - AMG has reduced its share count by approximately 40% over the last five years, indicating a strong capital return strategy through share repurchases [42][44] - The company anticipates continued share repurchases, viewing its current share price as attractive [47][48] - Performance fees have averaged around $150 million annually, with potential for growth as the business evolves [51][52] Outlook for 2026 - AMG expects continued momentum in alternative flows, with higher fees and margins contributing positively to earnings [56][57] - The company is not yet ready to provide specific guidance for 2026 but acknowledges a step function increase in flows and net effects from new investments [58][59] Additional Important Insights - AMG's unique position as a one-stop shop for various differentiated return streams allows it to capitalize on the trend of institutional LPs consolidating their relationships with fewer managers [35][36] - The company is exploring new product offerings in private markets, including structured credit and multi-asset products [39][40] This summary encapsulates the key points discussed during the conference call, highlighting AMG's strategic focus on alternatives, acquisition strategy, organic growth, financial performance, and outlook for the future.

Core Insights - The asset and investment management sector has shown impressive performance in 2025, driven by strong market rebounds, record inflows, and a broad expansion in global assets under management (AUM) [1] Market Performance - Significant equity market volatility has led to increased trading activities, positively impacting companies like BlackRock, Invesco, and Affiliated Managers Group [2] - Elevated volatility has pushed investors towards active management and tactical allocation products, resulting in increased flows into active ETFs, private credit vehicles, and multi-asset strategies [4] Asset Management Growth - Global AUM has grown sharply due to market appreciation and substantial net inflows, particularly from the Asia-Pacific region and high-net-worth channels [4][5] - Demand for alternative investments remains strong, with private credit funds and diversified alternatives attracting institutional and retail interest [5] Company-Specific Insights BlackRock - As of September 30, 2025, BlackRock's total AUM reached a record $13.46 trillion, with a CAGR of 9.2% over the past five years [11] - The company expects continued momentum in AUM growth due to its focus on the iShares unit and active equity business [12] - BlackRock's revenues are projected to grow by 17.1% year-over-year in 2026, with earnings expected to increase by 12.9% [15] Invesco - Invesco's AUM was $2.1 trillion as of September 30, 2025, with a CAGR of 8.5% over the past five years [16] - The company is focusing on improving operating efficiency and has achieved $200 million in annualized net savings from the OppenheimerFunds acquisition [18] - Invesco's revenues and earnings are expected to grow by 14.5% and 32.2% year-over-year in 2026, respectively [20] Affiliated Managers Group - Affiliated Managers had total AUM of $803.6 billion as of September 30, 2025, with a shift towards alternatives reversing previous net outflows [23][24] - The company has been pivoting towards private markets and liquid alternatives, which are expected to support cash flows [25] - AMG's revenues and earnings are projected to grow by 8% and 18.9% year-over-year in 2026, respectively [27]

Core Viewpoint - Affiliated Managers Group (AMG) has shown a positive performance with a 5.9% increase in shares since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1][2]. Financial Performance - Q3 2025 economic earnings were reported at $6.10 per share, exceeding the Zacks Consensus Estimate of $5.83, and reflecting a 26.6% increase year-over-year [3]. - Economic net income reached $179.7 million, up 17.3% from the previous year, surpassing the estimate of $166.8 million [4]. - Total revenues for the quarter increased by 2.2% year-over-year to $528 million, beating the Zacks Consensus Estimate of $521.1 million [5]. - Adjusted EBITDA was reported at $250.9 million, a 17.2% increase, exceeding the projected $233.3 million [5]. Assets Under Management (AUM) - As of September 30, 2025, total AUM was $803.6 billion, reflecting a 10.3% increase, surpassing the estimate of $780.8 billion [6]. - Average AUM totaled $786.9 billion, up 10.6% year-over-year, with net client cash outflows of $2.8 billion during the quarter [6]. Capital and Liquidity - The company had $476.1 million in cash and cash equivalents as of September 30, 2025, down from $950 million at the end of 2024 [7]. - Total debt decreased to $2.37 billion from $2.62 billion as of December 31, 2024, while stockholders' equity slightly decreased to $3.34 billion [7]. Share Repurchase Activity - During Q3, Affiliated Managers repurchased shares worth $77 million [8]. Future Outlook - Management anticipates adjusted EBITDA in the range of $325-$370 million for Q4 2025, based on current AUM levels and expected net performance fees of $75-$120 million [9]. - Economic net income (controlling interest) is projected between $234-$267 million, with economic EPS expected to range from $8.10 to $9.26 [11]. Estimate Revisions - There has been an upward trend in estimates revisions, with the consensus estimate shifting by 7.88% in the past month [12]. Investment Strategy Scores - Affiliated Managers has an average Growth Score of C, a Momentum Score of A, and a Value Score of B, resulting in an aggregate VGM Score of A [13]. Industry Context - Affiliated Managers operates within the Zacks Financial - Investment Management industry, where competitor Invesco reported a 4.3% gain over the past month and revenues of $1.19 billion, reflecting a year-over-year change of +7.4% [15].

Core Viewpoint - Affiliated Managers Group (AMG) has experienced significant stock performance, reaching a 52-week high, driven by strong quarterly results and a strategic pivot towards alternative investments [1][8][27]. Group 1: Stock Performance - AMG shares hit a new 52-week high of $276.24, closing at $266.16, with a year-to-date increase of 43.9%, contrasting with a 16.9% decline in the industry [1]. - The stock has consistently performed better than peers such as Janus Henderson Group plc and SEI Investments Company [1]. Group 2: Quarterly Performance - AMG reported economic earnings per share of $6.10, surpassing the Zacks Consensus Estimate of $5.83, marking a 26.6% year-over-year increase [2]. - The company anticipates net income for the fourth quarter of 2025 to be between $189 million and $223 million, with economic earnings projected between $8.10 and $9.26 per share [3]. Group 3: Strategic Initiatives - AMG has shifted focus towards private markets and liquid alternatives since 2021, resulting in strong client inflows and offsetting weaknesses in traditional asset categories [4]. - New partnerships announced this year are expected to add approximately $24 billion to AUM across private markets and liquid alternatives [4][5]. Group 4: Alternatives and AUM - As of September 30, 2025, alternatives made up nearly 44% of total AUM and contributed about 55% of AMG's earnings [6]. - The company aims to increase earnings from alternatives to over 66% in the coming years, enhancing its ability to manage market volatility [6]. Group 5: Financial Position - AMG has sufficient liquidity to support its expansion plans, bolstered by divestitures and a recent sale of its interest in Comvest Partners' private credit business for $285 million [9][10]. - As of September 30, 2025, AMG's total debt was $2.37 billion, with cash and cash equivalents of $476.1 million, and it has a $1.25 billion revolving credit facility [17]. Group 6: Revenue and Earnings Outlook - The company expects performance fees in 2025 to range between $110 million and $150 million, with revenue growth estimates of 1.9% and 8% for 2025 and 2026, respectively [14][23]. - Analysts project an 18.7% increase in earnings for 2025 and an 18.9% growth for 2026, with upward revisions in earnings estimates over the past month [23]. Group 7: Shareholder Returns - AMG prioritizes share repurchases, with plans to buy back at least $500 million worth of shares in 2025, having repurchased $350 million in the first nine months of 2025 [19][18]. - The company has a history of share repurchase authorizations, with nearly 3.4 million shares remaining available for repurchase as of September 30, 2025 [18].

Company Performance - Affiliated Managers Group (AMG) shares have increased by 12.5% over the past month and reached a new 52-week high of $271.48 [1] - The stock has gained 44.7% since the beginning of the year, outperforming the Zacks Finance sector's 14.3% increase and the Zacks Financial - Investment Management industry's decline of 17.3% [1] Earnings and Revenue - AMG has consistently exceeded earnings consensus estimates, reporting EPS of $6.1 against a consensus of $5.83 in its last earnings report [2] - For the current fiscal year, AMG is projected to achieve earnings of $25.36 per share with revenues of $2.08 billion, reflecting an 18.73% increase in EPS and a 1.78% increase in revenues [3] - The next fiscal year forecasts earnings of $30.15 per share on revenues of $2.24 billion, indicating year-over-year changes of 18.91% for EPS and 7.95% for revenues [3] Valuation Metrics - AMG currently trades at 10.6 times the current fiscal year EPS estimates, below the peer industry average of 12.1 times [7] - The stock's trailing cash flow basis is at 10.9 times, compared to the peer group's average of 11.5 times, and has a PEG ratio of 0.59, positioning it favorably for value investors [7] Zacks Rank and Style Scores - AMG holds a Zacks Rank of 2 (Buy) due to rising earnings estimates [8] - The stock has a Value Score of A, a Growth Score of C, and a Momentum Score of B, resulting in a combined VGM Score of B [6][9] Industry Comparison - Patria Investments Limited (PAX) is a notable peer with a Zacks Rank of 2 (Buy) and a Value Score of A, indicating a competitive position within the industry [10] - PAX is expected to post earnings of $1.49 per share on revenues of $342.25 million for the current fiscal year, having beaten consensus estimates by 15.38% last quarter [11] - The Financial - Investment Management industry is performing well, ranking in the top 28% of all industries, suggesting favorable conditions for both AMG and PAX [12]