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Affiliated Managers (AMG) - 2024 Q4 - Earnings Call Transcript
AMGAffiliated Managers (AMG)2025-02-06 18:39
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Financial Data and Key Metrics Changes - AMG reported record economic earnings per share in 2024, with full-year earnings up 10% year-over-year, reflecting a disciplined capital allocation strategy [6][29] - Adjusted EBITDA for Q4 was 282million,down5282 million, down 5% year-over-year, while full-year adjusted EBITDA was 973 million, up 4% compared to 2023 [28] - Economic earnings per share for Q4 were 6.53,andforthefullyear,itwas6.53, and for the full year, it was 21.36, benefiting from a record year of share repurchases [29] Business Line Data and Key Metrics Changes - Private markets affiliates raised approximately 24billionin2024,with24 billion in 2024, with 6 billion raised in Q4, representing annualized organic growth of about 20% [7][17] - Liquid alternatives saw 2billionofnetinflowsinQ4,markingthesecondconsecutivequarterofpositiveflows[19]−Netclientcashoutflowswere2 billion of net inflows in Q4, marking the second consecutive quarter of positive flows [19] - Net client cash outflows were 8 billion in Q4, primarily due to challenges in equities, which saw net outflows of approximately 16billion[16][20]MarketDataandKeyMetricsChanges−AMG′sU.S.wealthplatform′salternativesAUMgrewmorethantenfoldoverthepastfiveyears,endingtheyearatover16 billion [16][20] Market Data and Key Metrics Changes - AMG's U.S. wealth platform's alternatives AUM grew more than tenfold over the past five years, ending the year at over 6 billion [22] - The company launched three new evergreen products and filed for two additional strategies anticipated to go live later this year [23] - AMG and its affiliates collectively manage over 30billionintotalAUMforalternativeproductsinwealthmarketsglobally[24]CompanyStrategyandDevelopmentDirection−AMGisstrategicallyevolvingtoincreaseexposuretoalternatives,enhancinglong−termgrowthprospectsandcashflowstability[11][12]−ThepartnershipwithNorthBridgePartnersalignswithAMG′sstrategyofinvestinginhigh−qualityindependentfirmsinareasofseculargrowth[9][10]−Thecompanyaimstocontinueinvestinginnewaffiliatepartnershipsandexistingaffiliatestodrivegrowth[13]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheongoingstrengthofprivatemarketsfundraisingandimprovingtrendsinliquidalternatives[15][16]−Thechangeinadministrationisviewedaspotentiallyfavorablefornewinvestments,withexpectationsoflowerregulationandincreasedbusinessdevelopment[47]−AMGenters2025withsignificantmomentumandastrongpipelineofnewinvestmentopportunities[25][37]OtherImportantInformation−AMGrepurchased30 billion in total AUM for alternative products in wealth markets globally [24] Company Strategy and Development Direction - AMG is strategically evolving to increase exposure to alternatives, enhancing long-term growth prospects and cash flow stability [11][12] - The partnership with NorthBridge Partners aligns with AMG's strategy of investing in high-quality independent firms in areas of secular growth [9][10] - The company aims to continue investing in new affiliate partnerships and existing affiliates to drive growth [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strength of private markets fundraising and improving trends in liquid alternatives [15][16] - The change in administration is viewed as potentially favorable for new investments, with expectations of lower regulation and increased business development [47] - AMG enters 2025 with significant momentum and a strong pipeline of new investment opportunities [25][37] Other Important Information - AMG repurchased 120 million in shares in Q4, totaling approximately 700millionfortheyear,representing13700 million for the year, representing 13% of shares outstanding [36] - The company maintains a strong liquidity position with 625 million in cash and $475 million in investments [35] Q&A Session Summary Question: Can you discuss the pipeline for new investments and any impacts from the change in administration? - Management indicated a strong pipeline for new investments, with NorthBridge being a recent addition, and noted that the change in administration could favor new investments due to potential regulatory easing [40][47] Question: Is the NorthBridge model the future direction for investments, or are larger deals also possible? - Management confirmed that both mid-sized and larger deals are in the pipeline, with a focus on firms that can leverage AMG's resources for growth [50][52] Question: What trends are seen in retail alternative products and active ETFs? - Management highlighted a strong focus on product development in the U.S. wealth channel, with several new products launched and ongoing interest in active ETFs as a growth driver [56][64]