Affiliated Managers Group (NYSE:AMG) reported record second-quarter results, with adjusted EBITDA rising 44% year over year to approximately $316 million and economic earnings per share increasing 54% to $8.29.
President and Chief Executive Officer Jay Horgen said the company’s assets under management reached a record $942 billion at quarter-end, supported by market gains and net client inflows. AMG reported $13 billion of total net inflows during the quarter and $56 billion over the past 12 months.
Alternative Strategies Drive Flows
AMG cited four areas driving demand across its affiliates: secondary strategies in private markets, infrastructure, absolute return strategies and tax-aware investing. The company said these areas collectively fueled its alternative-strategy inflows over the past year.
Chief Financial Officer Dava Ritchea said private-market affiliates raised $8 billion during the quarter, led by infrastructure, secondaries and specialized strategies. Liquid-alternative affiliates generated $21 billion in net inflows, including $16 billion from wealth clients into tax-aware strategies and $5 billion from institutional and retail clients across absolute-return and beta-sensitive strategies.
By contrast, differentiated long-only equity strategies recorded $14 billion of net outflows. Ritchea said AMG expects flows in this segment to improve over the medium to long term, although industry and performance pressures could create quarterly volatility. Multi-asset and fixed-income strategies had $2 billion of net outflows, largely due to seasonal withdrawals from money-market and short-duration fixed-income funds tied to tax-payment timing.
Ritchea said AMG expects multi-asset and fixed-income flows to return to modestly positive organic growth in the third quarter, though the company may continue to see second-quarter seasonality following its addition of BBH Credit Partners.
Tax-Aware and Liquid Alternatives Outlook
During the question-and-answer session, Horgen characterized tax-aware investing as a long-term structural shift in individual investor behavior rather than a trend tied to a single manager or product. He said tax-aware strategies represented just over 10% of AMG’s earnings.
AMG is seeing the trend most directly through affiliate AQR, though Horgen said there is also growing interest in affiliates involved in real estate, infrastructure and energy transition, where strategies may offer inherent tax advantages.
Horgen also pointed to continued demand for liquid alternatives. He said industrywide net inflows into liquid alternatives over the last three quarters reached their highest level since 2007. Nearly all of AMG’s liquid-alternative affiliates, including Garda, Capula, Verition, Winton and AQR, generated net inflows during the past 12 months, he said.
Excluding tax-aware strategies, AMG’s liquid-alternative organic growth rate exceeded 15% over that period, supported by institutional and retail demand, according to Horgen. Addressing capacity, he said AMG’s liquid-alternative managers operate multiple strategies and products and have experience managing capacity. He added that the tax-aware products are predominantly long-short equity strategies based on broad, liquid indexes such as the MSCI World Index and S&P 500.
Margins, Cash Flow and Third-Quarter Guidance
AMG said fee-related earnings, which exclude net performance fees and catch-up fees, rose 39% year over year in the second quarter. Ritchea attributed the increase to organic growth, investment performance and margin expansion at some of the company’s largest affiliates.
Net performance-fee earnings totaled $10 million, at the high end of AMG’s guidance range and up $5 million from the prior-year period. The company also recorded roughly $7 million in incremental fees, primarily from catch-up fees at private-market affiliates.
For the third quarter, AMG expects adjusted EBITDA of $315 million to $325 million, based on current asset levels and a market blend that was down 2% quarter to date as of July 29. The outlook includes $315 million of recurring fee-related earnings, no material private-market catch-up fees, and net performance fees of up to $10 million.
Assuming an adjusted weighted-average share count of 26.3 million, AMG forecast third-quarter economic earnings per share of $8.43 to $8.71. The midpoint would represent approximately 40% growth from the third quarter of 2025.
Capital Deployment and Investment Pipeline
AMG repurchased approximately $189 million of stock in the second quarter, bringing first-half repurchases to $375 million. The company expects to repurchase about $600 million of shares for the full year, subject to market conditions and capital-allocation activity.
The company said its repurchases, along with the January retirement of junior convertible trust preferred securities, reduced its economic share count by 1.8 million shares since the beginning of the year. AMG has repurchased more than 10% of its shares outstanding over the past 12 months and nearly 25% since the start of 2024, according to Horgen.
AMG also completed investments in BBH Credit Partners, HighBrook Investors and an incremental minority investment in Garda Capital Partners. Ritchea said the company allocated nearly $800 million in the first half toward growth investments and capital returns. AMG recently extended the maturity of its $1.25 billion revolver to June 2031.
Horgen said the company saw a meaningful increase in new investment opportunities beginning late in the second quarter and continuing into the third quarter, particularly among independent firms in private markets and liquid alternatives. AMG generally seeks investment check sizes of $100 million to $500 million, though it may exceed that range in some cases, he said. The company targets high-teens returns on new investments and said it would continue repurchasing shares if prospective deals do not meet its return requirements.
About Affiliated Managers Group (NYSE:AMG)
Affiliated Managers Group, Inc (NYSE: AMG) is a global asset management holding company that partners with boutique investment firms. Founded in 1993 and headquartered in West Palm Beach, Florida, AMG invests in and collaborates with independent investment managers to foster growth while preserving their entrepreneurial culture. Through equity stakes and strategic support, the company aims to enhance its affiliates’ distribution capabilities, operational infrastructure and access to capital.
The company’s core business activities include providing capital solutions, distribution services and operational support to affiliated investment firms.
