Rise in affiliates
Thanks to Affiliated Managers Group’s (AMG) relationship with major companies, it has a positive outlook due to the increase in investments in new affiliates. Despite global political uncertainty, AMG is still in a position to compete with alternative asset managers (XLF) such as Apollo Global Management (APO), AllianceBernstein (AB), and Ameriprise Financial (AMP), thanks to its equity products. Its affiliates’ alternative strategies could also contribute significantly to earnings growth. The company is currently planning to expand its network. Affiliated Managers Group believes that increasing its affiliate base will help in generate alpha returns. The company’s broad array of alternative strategies has attracted investors seeking less risk. Rising volatility in the market could be beneficial for AMG’s affiliates as it would help generate alpha returns.
Performance driven by affiliates
Although AMG has seen a large outflow within US equities, its alternative category has provided a strong flow. AMG’s 1Q17 results reflect strong organic growth, mainly due to the addition of new affiliates and the strong investment performance of its existing affiliates.
AMG’s relative value, private equity, systematic-diversified and multi-strategy products represent more than $290 billion of its AUM (assets under management). AMG has a positive outlook on its affiliates as they provide complete diversification in alternative asset classes, in contrast to traditional asset classes such as equity and fixed income. AMG’s partnership approach helps maintain an investment environment suitable to individual affiliates, which helps them focus on client interests and generate alpha returns. This focus should help AMG’s affiliates in the long term.