Affiliated Managers Group, Inc. (AMG) Earnings

Management highlights

- Overall Financial Results * AMG achieved record Q2 2026 results, with adjusted EBITDA of $316 million (44% year-over-year (YoY) growth) and economic earnings per share (EPS) of $8.29 (54% YoY growth). * Total assets under management (AUM) reached a record $942 billion, growing 22% LTM, with $13 billion in total net inflows for the quarter and $56 billion in net inflows over the LTM. Organic growth has been led by high-margin alternative strategies, which have attracted $100 billion in net inflows over the LTM. * The company generated record cash flow in 2026, with after-tax annual recurring cash flow of approximately $1 billion. - Secular Growth Drivers * The company’s growth is supported by four long-term industry trends: accelerating global client demand for private market secondary strategies, broad client demand for infrastructure strategies, growing investor appetite for absolute return strategies, and expanding demand for tax-aware investing. - Affiliate Investment Activity * AMG completed three affiliate investments in the first half of 2026: a full investment in BBH Credit Partners, a full investment in High Brook Investors, and an incremental minority investment in Guarded Capital Partners. The company’s deal pipeline has expanded notably since the end of Q2, with a growing number of high-quality independent alternative investment firms seeking partnership, a trend that has continued into Q3. * AMG’s partnership model, which preserves affiliate independence while magnifying their competitive advantages, is a unique market differentiator supported by a 30+ year track record. - Capital Allocation Strategy * AMG has repurchased more than 10% of outstanding shares over the LTM and nearly 25% of outstanding shares since the start of 2024. The company deployed $189 million in share repurchases during Q2 2026, bringing year-to-date repurchases to $375 million. * The company’s diversified business model generates significant unencumbered cash flow, supporting both accretive new affiliate investments and large-scale share repurchases, even amid market uncertainty. The company maintains a strong balance sheet with long-dated debt, low leverage, and recently extended the maturity of its $1.25 billion revolver to June 2031.

Guidance

- Third quarter 2026 adjusted EBITDA is expected to range between $315 million and $325 million, with recurring fee-related earnings of $315 million (up from $299 million in Q2 2026), no material private market catch-up fees, and up to $10 million in net performance fees. - Third quarter 2026 economic EPS is expected to range between $8.43 and $8.71, with the midpoint representing approximately 40% YoY growth compared to Q3 2025, based on an expected adjusted weighted average share count of 26.3 million. - For full-year 2026, the company expects to repurchase approximately $600 million in shares, subject to market conditions and overall capital allocation activity. - Management reaffirms its expectation of a 40% full-year 2026 growth rate in economic EPS, maintaining the long-term target of 15% to 20% compound annual growth in economic EPS, a target that has already been exceeded in 2025 with over 20% growth. - Management expects the alternative segment's earnings contribution to grow from the current 60% to 70% in the near term.

Segment performance

1. Alternative Strategies: Generated record $29 billion in net inflows during Q2 2026, with $100 billion in net inflows over the trailing 12 months (LTM). Within alternatives: private market strategies raised $8 billion in net inflows, while liquid alternative strategies generated $21 billion in net inflows. This segment now contributes more than 60% of total company earnings, up from 50% 18 months prior and 35% five years prior. 2. Differentiated Long-only Equity Strategies: Reported $14 billion in net outflows during the quarter. This segment currently contributes 35% of total company earnings. Management expects flow trends to improve over the medium to long term. 3. Multi-asset and Fixed Income: Reported $2 billion in net outflows during Q2 2026, driven primarily by seasonal outflows from money market and short-duration fixed income funds tied to tax payment timing, a seasonal pattern expected to continue after the addition of BBH Credit Partners. Management expects this segment to return to modestly positive organic growth in Q3 2026.

Risks & headwinds

- Ongoing industry and performance headwinds remain for the differentiated long-only equity segment, which continues to experience net outflows, and while the long-term trend is improving, quarter-to-quarter flow volatility is expected to continue. - Seasonal Q2 outflows in the multi-asset and fixed income segment are expected to persist on a go-forward basis after the addition of BBH Credit Partners, given its higher exposure to wealth clients. - Forward-looking statements are inherently uncertain, and actual results may differ materially from guidance due to unforeseen factors, including market volatility, geopolitical uncertainty, and changes in investor demand. - All new affiliate investments carry return uncertainty; management will only complete deals that meet its high-teen return target, and will return excess capital to shareholders via repurchases if attractive deals are not available.

Analyst Q&A

• Q: What is the sustainability of strong inflows into tax-aware strategies, and what is your broader outlook for liquid alternatives? /

  A: Management views tax-aware investing as a long-term secular, industry-wide structural shift driven by individual investor focus on growing after-tax savings, rather than a temporary trend. It extends across all asset classes, not just liquid strategies. Within AMG, tax-aware strategies represent just over 10% of current earnings, with demand spanning both wealth and institutional clients. For liquid alternatives broadly, industry net inflows are at their highest level since 2007, and nearly all of AMG's liquid alternative affiliates have generated net inflows over the past 12 months, with 15% organic growth ex-tax-aware strategies, leading management to be very positive on the segment's outlook.\n\nQ: Which strategies are seeing the strongest investor demand, and are there any capacity concerns for high-demand quant strategies? / A: The strongest momentum remains concentrated in the four core secular growth areas: infrastructure, secondaries, absolute return, and tax-aware investing, which drove the quarter's record $29 billion in alternative inflows, a trend that has continued into July. The alternative segment has grown to 60% of earnings from 35% five years ago, driving higher fee rates and margin expansion. For high-demand quant-focused tax-aware long-short strategies, capacity is abundant because these strategies track deep, highly diversified major market indexes, so no meaningful capacity constraints are expected.\n\nQ: Can you provide more detail on the recently accelerated deal pipeline? / A: After an active start to 2026 with three completed affiliate investments, the pipeline has grown meaningfully since late Q2, a trend partially driven by deals that were delayed in the first half due to earlier geopolitical uncertainty. Most new opportunities are focused on secular growth private market and liquid alternative strategies, which will further accelerate the shift of AMG's earnings mix to 70% alternatives in the near term. AMG's unique value proposition of preserving affiliate independence attracts high-quality in-bound opportunities, with typical check sizes between $100 million and $500 million, including some sizable potential transactions currently in the pipeline. Management remains disciplined, targeting high-teen returns on all new investments, and will return capital via repurchases if deals do not meet return thresholds.