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Affiliated Managers Group Reports a 66% Rise in Net Profits

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Beating estimates

On April 28, Affiliated Managers Group (AMG) reported net 1Q15 profits of $128 million compared to $77 million for the first quarter of the previous year. The company reported economic earnings per share of $2.91, beating the Wall Street analyst estimate by 1 cent. Affiliated Managers Group is now managing over $632 billion, up by $12 billion compared to the first quarter of the previous year.

“AMG’s first quarter results marked a strong start to 2015, including Economic earnings per share of $2.91, a 17% increase over the first quarter of 2014, and record assets under management of $638 billion,” stated Sean M. Healey, AMG’s chair and CEO, in the company’s earnings call on April 28.

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In the mutual fund segment, the company faces competition from domestic and global players such as T. Rowe Price Group (TROW), Janus Capital (JNS), American Funds, and Franklin Resources (BEN). The company is also in competition with alternative asset managers and ETF providers, including BlackRock (BLK), Federated Investors (FII), Vanguard, State Street (STT), Legg Mason (LM), Morgan Stanley (MS), Goldman Sachs, (GS) and Invesco (IVZ). Together, these companies make up 9.27% of the Financial Select Sector SPDR Fund (XLF).

Asset management company

AMG is a global asset management company that invests in boutique investment management firms called “affiliates.” These affiliates’ performance drives AMG’s own performance. AMG acts as a fund of funds for these entities.

The company also assists its affiliates in strategic matters, marketing, distribution, product development, and operations. AMG holds equity stake in its affiliates along with the independent management, which is responsible for deployment of the funds and generating returns. The affiliates are identified based on their growth potential, with products focusing on global equities, emerging market equities, and alternatives. AMG manages three distribution channels through its affiliates:

  1. Institutional
  2. Mutual Funds
  3. High Net Worth Individuals
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