AMG's Q4 2024: Contradictions in Investment Pipeline, Client Demand, and Deal Size Expectations

These are the key contradictions discussed in Affiliated Managers Group's latest 2024Q4 earnings call, specifically including: Investment Pipeline and Deal Activity, Client Demand and Distribution Fee Arrangements, Impact of the Change in Administration, and Deal Size Expectations:



Record Earnings and Alternative Investments:
- AMG delivered record economic earnings per share in 2024, with full-year earnings up 10% year-over-year.
- The growth was driven by increasing exposure to alternatives and strategic capital allocation.

Private Fundraising Success:
- AMG's private markets affiliates raised $24 billion during the year, reflecting ongoing demand for their specialized strategies, representing annualized organic growth of approximately 20%.
- This was attributed to the strong performance and conviction in investment strategies across various high-growth areas.

Liquid Alternatives Momentum:
- Affiliates managing liquid alternative strategies saw $2 billion of net inflows in the fourth quarter, marking the second consecutive quarter of positive flows.
- This momentum is due to the value proposition of these strategies and the rising market volatility expectations.

Equities Challenges and Diversification:
- AMG experienced approximately $16 billion in net outflows from equities in the quarter, reflecting industry headwinds and performance challenges.
- The company is focusing on diversifying its business towards alternatives to improve flow trends over time.

U.S. Wealth Market Growth:
- Alternatives AUM on the U.S. wealth platform grew more than tenfold over the past five years, ending at more than $6 billion in AUM.
- This growth was driven by launching new alternative products and expanding distribution capabilities in the wealth market.