Affiliated Managers Group, Inc. Q2 FY2025 earnings call

Key Points

• Strong Q2 2025 results with 15% Y/Y growth in economic earnings per share and over $8B in net client cash flows, driven by record alternative strategy inflows.
• First half of 2025: $55B added to alternative AUM, total alternative AUM up 20% in 6 months, including $33B in net inflows into alternatives and 4 new partnerships.
• Affiliates like Pantheon (leading secondaries investor) and AQR (leading in tax-aware liquid alternatives) are capitalizing on secular growth trends.
• Completed investment in Veritio and partnership with Montefiore; sold minority stake in Peppertree, realizing a significant gain.

In the second quarter, AMG reported strong results with year-over-year growth of 15% in economic earnings per share and over $8 billion in net client cash flows, driven by record inflows into alternative strategies. Alternative strategies contributed approximately 55% of EBITDA on a run rate basis. Private markets AUM has grown by 50% since 2022 to $150 billion, and liquid alternatives had nearly $12 billion in net inflows in the quarter. First half of 2025 saw $55 billion added to alternative AUM, with $33 billion in net inflows into alternatives and 4 new partnerships in private markets and liquid alternatives.

Forward-Looking Statements

• Third quarter adjusted EBITDA expected to be in the range of $230 million to $240 million.
• Third quarter economic earnings per share expected to be between $5.62 and $5.87.
• Anticipate meaningful increase in 2026 economic earnings per share due to growth in alternative AUM, new affiliates, and share repurchases.
• New investments in Qualitas Energy and Montefiore expected to be modestly accretive to 2026 earnings.

Q: Dan Fannon asks about AQR and Pantheon's contribution to earnings and fee mix.

A: Jay and Dava discuss that both are double-digit contributors, with AQR benefiting from tax-aware solutions and Pantheon from secondaries and wealth channel growth, with a mix of management and performance fees.

Q: Alex Blostein asks about AQR's capacity constraints and competitive advantage.

A: Jay and Tom mention AQR's innovation, risk management, first-mover advantage in tax-aware solutions, and significant runway for growth.

Q: Bill Katz asks about portfolio management and share buybacks.

A: Jay and Tom discuss evolving towards alternatives, no plans to dispose of traditional side, and Dava talks about balanced capital allocation between growth investments and buybacks.

Q: Brian Bedell asks about private market fundraising consistency.

A: Tom and Dava discuss alignment with secular trends, growth in private markets AUM, and impact on EBITDA.

Q: Patrick Davitt asks about European client reallocation trends.

A: Jay and Tom mention diversification and new European investments, but no significant impact seen in Q2 flows.