Affiliated Managers Beat Estimates on Investment Performance

On November 9, Affiliated Managers Group (AMG) reported net 3Q15 profits of $109 million compared to $103.2 million for the third quarter of the previous year. The company reported economic earnings per share of $2.93, beating the Wall Street analyst estimate by four cents. Affiliated Managers Group is now managing $594 billion while net cash flows for the quarter stood at -$5.5 billion.

In the company’s earnings call on November 9, Sean M. Healey, AMG’s chair and CEO, stated, “Against the backdrop of a highly volatile market environment, AMG generated solid earnings for the third quarter, reflecting the diversity of our business and the quality of our Affiliates. Our Economic earnings per share of $2.93 increased over the year-ago period as compared to a year-over-year decline in the global indices.”

He added, “During the quarter, our Affiliates generated strong relative investment performance and continued to build on their exceptional long-term track records, and we made outstanding progress in our new investments strategy with the addition of three excellent new Affiliates: Systematica Investments, Abax Investments, and Ivory Investment Management.”

Affiliate Managers is a global asset management company that invests in boutique investment management firms called “affiliates.” The performance of the affiliates 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 an equity stake in its affiliates along with the independent management. The latter is responsible for deploying 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:

• Institutional
• Mutual Funds
• High Net Worth Individuals

Affiliated Managers reported revenues of $2.5 billion in the last fiscal year. In comparison, its competitors reported the following revenues:

• BlackRock (BLK) reported $11.1 billion
• T. Rowe Price (TROW) reported $4 billion
• Bank of New York Mellon (BK) reported $3.2 billion

Together, these companies form 0.66% of the SPDR S&P 500 ETF (SPY).