MGRE — Affiliated Managers Group, Inc.

Summary of AMG Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted EBITDA: $317 million, a 39% increase year-over-year.
• Economic Earnings Per Share: $8.23, reflecting a 58% growth compared to the previous year.
• Assets Under Management (AUM): Reached a record $882 billion.
• Net Client Cash Flows: Over $22 billion in the quarter, totaling $52 billion in the past 12 months, indicating a 7% organic growth rate.
• Share Repurchases: Approximately $186 million in Q1, with a total of over $700 million in the past year, reducing shares outstanding by 10%.

2. Strategic Updates and Business Highlights

• AMG's diversified model has proven resilient amid market volatility, with significant growth in liquid alternatives and private markets.
• Growth Areas:
  • Private Markets: Strong momentum in infrastructure and real estate, with $148 billion in managed assets.
  • Liquid Alternatives: AUM of over $261 billion, benefiting from institutional demand for absolute return strategies and tax-aware long/short strategies.
• AMG has completed strategic partnerships and investments, including BBH Credit Partners and Highbrook Investors, enhancing its affiliate network.
• The firm emphasizes a disciplined capital allocation strategy, focusing on growth investments and shareholder returns.

3. Forward Guidance and Outlook

• Q2 2026 Guidance: Adjusted EBITDA expected between $290 million and $305 million, with economic earnings per share projected between $7.60 and $8.01, indicating approximately 45% growth year-over-year.
• AMG anticipates continued strong demand in its growth areas, particularly in alternatives, and expects to maintain momentum in net inflows.

4. Bad News, Challenges, or Points of Concern

• Equity Outflows: Approximately $9 billion in net outflows from equities, reflecting ongoing industry and performance headwinds.
• Market Volatility: The firm acknowledges challenges in the broader market that may impact performance fees and client sentiment.
• Tax-Aware Strategies: While experiencing growth, these strategies represent less than 8% of AUM and EBITDA, indicating that they are not yet a major contributor to overall earnings.

5. Notable Q&A Insights

• Diversification of Growth: Management emphasized that AMG's growth is driven by four balanced trends: infrastructure, secondary solutions, absolute return strategies, and tax-aware strategies, with no single trend dominating.
• Wealth Channel Opportunities: There is ongoing demand for alternative products in the wealth channel, particularly in credit secondaries and infrastructure, despite broader market turbulence.
• Investment Environment: Management sees potential opportunities for new investments due to lower public market valuations, which may enhance their competitive position in M&A.
• Long-Term Outlook: The firm remains optimistic about its growth trajectory, with expectations of generating significantly higher capital over the next five years, which will be strategically allocated to enhance shareholder value.

Overall, AMG's Q1 2026 results reflect strong performance and strategic positioning, although challenges in equity markets and the need for continued diversification remain key considerations.