Affiliated Managers Group Signals Strength in Alternatives

Affiliated Managers Group ((AMG)) has held its Q4 earnings call. Read on for the main highlights of the call.

Affiliated Managers Group’s latest earnings call painted a notably upbeat picture, as strong growth in alternatives and record profitability more than offset pressure in traditional equities. Management emphasized accelerating earnings, robust fundraising, and aggressive capital returns, while acknowledging concentration risk, fee volatility, and a key leadership transition.

Record EPS Underscores Earnings Momentum

AMG posted full‑year economic earnings per share of $26.05 and fourth‑quarter economic EPS of $9.48, marking a powerful inflection in profitability. Economic EPS rose about 22% for the year and roughly 45% in Q4 versus 2024, supported by organic growth at affiliates and a shrinking share count from buybacks.

Net Inflows Surge as Alternatives Lead the Way

Affiliates generated about $29.0 billion in annual net client cash flows, AMG’s best result since 2013, translating to around 4% organic growth. Fourth‑quarter net inflows of roughly $12.0 billion implied a 6% annualized organic growth rate, highlighting broad client demand despite headwinds in some legacy strategies.

Alternatives Deliver a Record Year of Growth

Alternatives were the clear growth engine, with a record $74.0 billion of net inflows in 2025 and about $23.0 billion in Q4 alone. Liquid alternatives were especially strong, drawing $15.0 billion in Q4 and $51.0 billion for the year, which equated to roughly 36% annualized organic growth in that segment.

Private Markets Fundraising Adds Durable Fee Base

Private markets strategies also posted a standout year, raising $9.0 billion in the fourth quarter and $24.0 billion across 2025. That pace represented roughly 18% annualized organic growth, adding longer‑duration capital and supporting the build‑out of carry‑eligible assets that underpin future performance fees.

Business Mix Shifts Heavily Toward Alternatives

AMG added about $97.0 billion of alternative assets under management in 2025, increasing total alternative AUM by approximately 35% to around $373.0 billion. Alternatives now generate roughly 60% of run‑rate EBITDA, signaling a decisive shift away from traditional long‑only products toward higher‑growth, higher‑margin strategies.

Adjusted EBITDA and Fee‑Related Earnings Climb

Fourth‑quarter adjusted EBITDA reached $378.0 million, up 34% year over year, helped by $125.0 million in net performance fees, while full‑year adjusted EBITDA was $1.1 billion, up 11%. Even excluding these variable fees, fee‑related earnings rose about 20% in Q4 and 8% for the year, underlining healthier core profitability.

Capital Deployment Fuels Growth and EPS Accretion

Management committed over $1.0 billion to growth investments in 2025 and repurchased around $700.0 million of stock, retiring roughly 11% of shares outstanding. Proceeds of about $570.0 million from affiliate liquidity events helped fund these moves, and AMG plans to repurchase at least $400.0 million of stock in 2026, subject to conditions.

Balance Sheet Strength and Capital Structure Simplification

The company issued $425.0 million of ten‑year senior notes at a 5.5% coupon and used the funds to settle convertible trust preferred securities, eliminating a source of dilution. Management highlighted low leverage, long‑dated funding, and an undrawn revolver as key supports for ongoing investment and shareholder‑return activity.

Wealth Channel Becomes a Growth Engine

On AMG’s U.S. wealth platform, alternatives AUM reached roughly $8.0 billion with $2.2 billion of net new flows in 2025, reflecting rising advisor adoption. Globally, wealth AUM across AMG and its affiliates surpassed $100.0 billion and grew organically by more than 100%, underscoring a rapidly expanding distribution opportunity.

Active Equities See Significant Client Redemptions

The bright spot in alternatives contrasted with persistent weakness in active equities, where AMG recorded about $12.0 billion of net outflows in Q4 and roughly $45.0 billion for the full year. Management linked the redemptions to industrywide pressure on traditional long‑only equity strategies, which are losing share to alternatives and passive products.

Affiliate Concentration Raises Risk Profile

Two large affiliates, AQR and Pantheon, now account for over 30% of assets under management and more than 30% of run‑rate adjusted EBITDA. AMG expects AQR alone to contribute north of 20% of earnings in 2026, highlighting both the benefit of scale in top performers and the earnings concentration risk that investors must monitor.

Performance Fees Remain Lumpy but Growing Structurally

Net performance fees totaled $161.0 million in 2025, and management guided to about $170.0 million for 2026, broadly in line with the past five‑year average. Executives stressed that while performance‑fee income will remain volatile quarter to quarter, rising carry‑eligible AUM in alternatives is creating a higher long‑term baseline.

One‑Time Capital Structure Costs Weigh on Near‑Term Cash

The trust‑preferred refinancing and settlement carried a total cost of $516.0 million, including a $174.0 million conversion premium that effectively retired around 600,000 adjusted diluted shares. While this increased cash costs in 2025 and early 2026, the transaction simplifies the capital structure and enhances per‑share economics going forward.

Leadership Change Adds Transitional Uncertainty

AMG disclosed that President and COO Thomas M. Wojcik, a long‑tenured CFO, will depart to pursue other opportunities, introducing leadership transition risk amid rapid strategic change. Management emphasized the depth of the remaining team and continuity at the affiliate level, but investors will watch execution closely during this period.

Traditional Multi‑Asset and Fixed Income Stay Flat

Beyond equities, multi‑asset and fixed income strategies posted essentially flat net flows for both the quarter and the full year, suggesting muted demand for these traditional offerings. The result reinforces AMG’s reliance on alternatives and wealth channels for growth, even as it maintains diversification across asset classes.

Guidance Points to Continued Growth, Led by Alternatives

For Q1 2026, AMG guided to adjusted EBITDA of $310 million to $330 million, including $40 million to $60 million in net performance fees and economic EPS of $7.98 to $8.52 on an expected share count of 27.4 million. Management also targets about $270 million of fee‑related earnings for the quarter, roughly 30% above Q1 2025, around $170 million of net performance fees for 2026, incremental EBITDA from recent deals, and at least $400 million of share repurchases.

AMG’s earnings call underscored a firm successfully reinventing itself as an alternatives‑focused asset manager, with strong flows, rising earnings, and assertive capital returns driving a positive narrative. While equity outflows, affiliate concentration, fee volatility, and a leadership change present real risks, investors heard a confident management team leaning into secular growth trends and positioning for further upside.