Q3 2025 Affiliated Managers Group Inc Earnings Call

You know that during this call we may make a number of forward looking statements, which could differ from our actual results materially.

In AMG assumes no obligation to update these statements.

Also please note that nothing on this call constitutes an offer of any products investment vehicles or services of any AMG affiliate.

A replay of today's call will be available on the Investor Relations section of our website along with a copy of our earnings release and reconciliations of any non-GAAP financial measures, including any earnings guidance provided.

In addition, we have posted an updated investor presentation to our website and I encourage investors to consult our site regularly for updated information.

Tom Wojcik: AQR has been a leader for more than a decade in developing and delivering excellent investment solutions to US wealth clients, and its innovation in tax-aware strategies continues to drive rapid adoption. Pantheon was one of the earliest innovators in limited liquidity vehicles in private markets, and product development and flows are accelerating across its product line. Our collaboration with BBH Credit Partners speaks to the success that AMG has seen thus far in driving growth and alternatives in the wealth channel, and we see significant opportunities ahead. As clients increasingly look to AMG as the industry's leading entry point to access the differentiated alternative investment capabilities of independent partner-owned firms, AMG's footprint in US wealth is well-positioned for rapid growth.

With us today to discuss the company's results for the quarter R. J Horgan, Chief Executive Officer, Tom Wujec, President and Chief operating Officer, and Dave Ritchie, Chief Financial Officer with that I'll turn the call over to Jay.

Thanks, Patricia and good morning, everyone.

It has been a landmark year for AMG with record net inflows and alternative strategies at near record levels of capital deployed and growth investments across both new and existing affiliates.

Speaker #2: If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. As a reminder, this conference is being recorded.

Speaker #2: I would now like to turn the conference over to your host, Patricia Figueroa. Head of Investor Relations for AMG. Thank you. You may begin.

Our third quarter results reflect the building momentum in our business with a 17% year over year increase in EBITDA.

Speaker #3: Good morning and thank you for joining us today to discuss AMG's results for the third quarter of 2025. Before we begin, I'd like to remind you that during this call, we may make a number of forward-looking statements, which could differ from our actual results materially.

And a 27% growth rate and economic earnings per share.

In addition, our organic growth profile continued to improve in the third quarter.

Tom Wojcik: Importantly, the success that we are having in the US wealth channel is resonating not only with clients and existing AMG affiliates, but also with new investment prospects, as accessing this attractive market requires scale and is difficult, if not impossible, for many independent firms to do on their own. As we continue to invest in new partnerships with alternatives firms, we look forward to collaborating with additional affiliates to broaden their reach and expand their platforms. AMG's business has continued to evolve in 2025, driven by our focus on allocating our resources and capital to areas of secular growth. As we execute our strategy, we expect the contribution from alternatives businesses to further increase, enhancing our long-term organic growth profile and earnings profile, and we are excited about the opportunities ahead. With that, I'll turn the call over to Dava to discuss our third-quarter results and guidance.

Driven by alternative strategies with 9 billion in firm wide net inflows, bringing our year to date total net inflows of $17 billion.

Speaker #3: An AMG assumes no obligation to update these statements. Also, please note that nothing on this call constitutes an offer of any products, investment vehicles, or services of any AMG affiliate.

Which represents a 3% annualized organic growth rate.

Yes.

Through the third quarter across both organic growth.

And new affiliate investments.

Speaker #3: A replay of today's call will be available in the Investor Relations section of our website, along with a copy of our earnings release and reconciliations of any non-GAAP financial measures.

AMG has added approximately 76 billion in alternative assets under management.

Representing an increase of nearly 30% and our total alternative AUM.

Speaker #3: Including any earnings guidance provided. In addition, we have posted an updated investor presentation to our website and encourage investors to consult our site regularly for updated information.

This increase includes 51 billion in net inflows into alternatives.

Today.

Our affiliates manage $353 billion in alternative AUM contributing 55%.

Speaker #3: With us today to discuss the company's results for the quarter are Jay Horgen, Chief Executive Officer, Tom Wojcik, President and Chief Operating Officer, and Dava Ritchea, Chief Financial Officer.

Of our EBITDA on a run rate basis.

And including sizable contributions from two of Amg's largest and longest standing affiliates pantheon AQR.

Dava Ritchea: Thank you, Tom, and good morning, everyone. It has been an exciting year for AMG. In 2025 to date, we have committed approximately $1.5 billion in capital across growth investments and share repurchases, and we continue to be in a strong position to execute on future growth opportunities and return capital to shareholders, given our significant cash generation and strong balance sheet. I will start by walking through the results for the quarter, then we'll discuss the positive impact of recent capital activity on our forward earnings power, and conclude with a discussion on our balance sheet. In the third quarter, we reported adjusted EBITDA of $251 million, which grew 17% year-over-year. This included $11 million in net performance fee earnings and reflected a full quarter contribution from Verition and Peppertree's final contribution.

Speaker #3: With that, I'll turn the call over to Jay.

Speaker #4: Thanks, Patricia, and good morning, everyone. It has been a landmark year for AMG. With record net inflows in alternative strategies, and near-record levels of capital deployed in growth investments, across both new and existing affiliates.

Both firms continue to capitalize on the tailwind in their respective areas by leveraging their scale innovative.

Innovative cultures and differentiated expertise.

Which are collectively driving strong ongoing organic growth for AMG.

Speaker #4: Our third quarter results reflect the building momentum in our business, with a 17% year-over-year increase in EBITDA and a 27% growth rate in economic earnings per share.

These elements are continuing to have a meaningful impact on our business profile and earnings.

And as you know, we expect each affiliate to be a double digit contributor to Amg's earnings this year.

Speaker #4: In addition, our organic growth profile continued to improve in the third quarter, driven by alternative strategies with $9 billion in firm-wide net inflows bringing our year-to-date total net inflows to $17 billion.

Yeah.

Given the substantial increase in our alternative AUM.

The significant growth and margin expansion at AQR <unk> pantheon.

Speaker #4: Which represents a 3% annualized organic growth rate. Through the third quarter, across both organic growth and new affiliate investments, AMG has added approximately $76 billion in alternative assets under management, representing an increase of nearly 30% in our total alternative AUM.

The positive contributions, resulting from capital deployed and growth investments and the positive impact of our ongoing allocation of capital to share repurchases.

Dava Ritchea: Fee-related earnings, which exclude net performance fees, grew 15% year-over-year, driven by the positive impact of our investment performance and organic growth in our alternative strategies, partially offset by outflows from fundamental equity strategies. Economic earnings per share of $6.10 grew 27% year-over-year, additionally benefiting from share repurchases. Now moving to fourth-quarter guidance, we expect adjusted EBITDA to be in the range of $325 million and $370 million, based on current AUM levels reflecting our market blend, which was up 1% quarter-to-date as of Friday, and including net performance fees of $75 million to $120 million, bringing expected performance fees for this year to between $110 and $155 million.

We anticipate a meaningful increase in our full year economic earnings per share in 2026.

Looking ahead, we have expanding opportunities to further invest in growth.

By investing in new and existing affiliates.

Speaker #4: This increase includes $51 billion in net inflows into alternatives. Today, our affiliates manage $353 billion in alternative AUM, contributing 55% of our EBITDA on a run-rate basis, and including sizable contributions from two of AMG's largest and longest-standing affiliates, Pantheon and AQR.

And by investing in Amg's strategic capabilities to magnify, our affiliate's success.

Our new investment pipeline remains strong.

With active ongoing dialogue with prospective affiliates operating in both private markets and liquid alternatives.

Our investment model continues to resonate with the highest quality partner owned firms seeking a strategic partner that can enhance their long term success.

Speaker #4: Both firms continue to capitalize on the tailwinds in their respective areas by leveraging their scale and innovative cultures and differentiated expertise, which are collectively driving strong ongoing organic growth for AMG.

While also supporting their independence.

And our strategic capabilities, particularly in capital formation increasingly differentiate AMG and our dialogue with prospective affiliate partners.

Dava Ritchea: This guidance includes a full quarter contribution from Montefiore, a full quarter contribution from ComVest's private credit business, and no impact from our announced investments in Qualitas Energy and BBH Credit Partners, which are expected to close in Q4 and Q1 2026, respectively. We expect fourth-quarter economic earnings per share to be between $8.10 and $9.26, assuming an adjusted weighted average share count of 28.9 million for the quarter. Looking further ahead, we anticipate a meaningful increase in our full-year adjusted EBITDA and economic earnings per share in 2026, mainly driven by strong organic growth and our capital allocation strategy. I'll describe each of these further. Organic growth in our existing business is having a meaningful impact on bottom-line earnings.

We recently announced a strategic collaboration which highlights the value of Amg's capital formation capabilities in the U S wealth channel.

Speaker #4: These elements are continuing to have a meaningful impact on our business profile and earnings. And as you know, we expect each affiliate to be a double-digit contributor to AMG's earnings this year.

Brown brothers Harriman, a globally recognized 200 year old firm with considerable scale chose to strategically collaborate with AMG.

To develop innovative products and deliver structured and alternative credit solutions to the wealth channel.

Speaker #4: Given the substantial increase in our alternative AUM, the significant growth and margin expansion at AQR and Pantheon, the positive contributions resulting from capital deployed in growth investments, and the positive impact of our ongoing allocation of capital to share repurchases, we anticipate a meaningful increase in our full-year economic earnings per share in 2026.

A very strong statement on amg's value proposition.

Also in the third quarter.

We announced the sale of Amg's minority stake and combat private credit business.

AMG invested in <unk> to provide a combination of growth capital and strategic capabilities that accelerated the growth of its credit franchise.

We were pleased that Amg's strategic engagement ultimately resulted in a positive outcome for all stakeholders, including AMG shareholders.

Speaker #4: Looking ahead, we have expanding opportunities to further invest in growth by investing in new and existing affiliates, and by investing in AMG's strategic capabilities to magnify our affiliates' success.

Dava Ritchea: Strong organic growth in alternatives, including record inflows in alternatives year-to-date, is driving growth in AUM, having a positive impact on our aggregate fee rate relative to the prior year and incrementally expanding margins at some of our largest alternative affiliates. Furthermore, the approximately $1.5 billion committed to growth investments and share repurchases, combined with the sale of our stakes in two of our private market affiliates, is expected to substantially increase our earnings in 2026. Additionally, we believe there is incremental upside to our earnings potential over time as we strategically engage with each of our five new partners in the next phase of their success. This combination of organic growth in our existing business and new investment activity has led to strong year-over-year earnings growth so far in 2025. Underpins our confidence in our 2026 earnings profile.

The significant return of capital nearly three times, our purchase price highlights the underlying value of our affiliates managing alternatives strategies.

Speaker #4: Our new investment pipeline remains strong, with active ongoing dialogue with prospective affiliates operating in both private markets and liquid alternatives. Our investment model continues to resonate with the highest quality partner-owned firms seeking a strategic partner that can enhance their long-term success while also supporting their independence.

Having committed more than $1 billion across five new growth investments so far in 2025.

We continue to actively expand amg's participation in areas of secular growth.

We have an excellent capital position.

Which was further enhanced by the significant proceeds from the sale of our interest in temperature contest.

And given our ample financial flexibility and our distinct competitive advantages, we have an outstanding opportunity to further increase our earnings growth by continuing to make growth investments and return capital to shareholders.

Speaker #4: And our strategic capabilities particularly in capital formation increasingly differentiate AMG and our dialogue with prospective affiliate partners. We recently announced a strategic collaboration which highlights the value of AMG's capital formation capabilities in the US wealth channel.

Finally, it has been an extraordinary year for AMG in terms of both organic growth and new affiliate investments.

Speaker #4: Brown Brothers Herriman, a globally recognized 200-year-old firm with considerable scale, chose to strategically collaborate with AMG to develop innovative products and deliver structured and alternative credit solutions to the wealth channel.

Dava Ritchea: Importantly, most of this earnings growth is in fee-related earnings delivered by products with longer expected duration. Finally, turning to the balance sheet and capital allocation, we repurchased approximately $77 million in shares in the third quarter, bringing year-to-date repurchases to approximately $350 million. We are increasing our full-year guidance for repurchases and now expect to repurchase at least $500 million, subject to market conditions and capital allocation activity. Our balance sheet remains in a strong position with long-dated debt, significant capacity from ongoing cash generation, and access to our revolver. Additionally, we received pre-tax proceeds of approximately $260 million from the sale of our stake in Peppertree, which closed in the third quarter, and we'll receive approximately $285 million in proceeds from the sale of our stake in ComVest.

Laying the groundwork for accelerating EBITDA and earnings growth in 2026.

As we continue to execute our strategy building upon more than three decades of successful partnerships. We are confident in our ability to continue to generate long term earnings growth and with that I'll turn it over to Tom.

Speaker #4: A very strong statement on AMG's value proposition. Also, in the third quarter, we announced the sale of AMG's minority stake in Comvest Private Credit Business.

Thank you Jay and good morning, everyone.

Amg's activities over the course of this year illustrate our strategy in action.

Speaker #4: AMG invested in Comvest to provide a combination of growth capital and strategic capabilities that accelerated the growth of its credit franchise. We were pleased that AMG's strategic engagement ultimately resulted in a positive outcome for all stakeholders, including AMG shareholders.

As we evolve our business mix more toward alternatives, our business is generating strong organic growth in both liquid alternatives and private markets.

And we continue to invest in both our affiliates and in amg's own capabilities to support future growth opportunities.

Speaker #4: The significant return of capital—nearly three times our purchase price—highlights the underlying value of our affiliates managing alternative strategies. Having committed more than $1 billion across five new growth investments so far in 2025, we continue to actively expand AMG's participation in areas of secular growth.

This year, we have entered four new investment partnerships with alternative firms squarely aligned with long term secular growth trends.

Dava Ritchea: Given our ample financial flexibility, which is further enhanced by the proceeds from these affiliate transactions, we are well-positioned to continue to invest in growth opportunities and return capital to shareholders. We continue to employ a deliberate, strategic, and disciplined approach to allocating our capital and investing in the ongoing growth of our business. We have a diverse, unique set of opportunities available to us, including investments in new affiliate partnerships in and alongside existing affiliates, and in AMG capabilities. Through our capital allocation framework, we selectively engage in opportunities that align with our overall business strategy and that we believe will create significant long-term value. Looking ahead, we are confident in our ability to continue to generate substantial value for our shareholders. Now we are happy to take your questions.

We also announced a strategic collaboration to bring structured credit products to the U S wealth marketplace with PVH credit partners.

Highlighting the strength of Amg's capital formation capabilities.

Speaker #4: We have an excellent capital position, which was further enhanced by the significant proceeds from the sale of our interest in Peppertree and Comvest. And given our ample financial flexibility and our distinct competitive advantages, we have an outstanding opportunity to further increase our earnings growth by continuing to make growth investments and return capital to shareholders.

And we engaged strategically with our affiliates across a range of business initiatives, including new product launches.

Building out adjacent capabilities.

And supporting two of our private markets affiliates and their sales to consolidators.

Taken together these strategic actions and many other elements of our unique model drove significant earnings growth and cash flow generation.

Speaker #4: Finally, it has been an extraordinary year for AMG in terms of both organic growth and new affiliate investments, laying the groundwork for accelerating EBITDA and earnings growth in 2026.

Which we have invested and will continue to invest for growth.

Fueling the execution of our strategy and the forward evolution of our business.

While simultaneously returning capital through share repurchases and further delivering value to our shareholders.

Speaker #4: As we continue to execute our strategy, building upon more than three decades of successful partnerships, we are confident in our ability to continue to generate long-term earnings growth.

Operator: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We request that you each keep to one question. Thank you. Our first question comes from the line of Bill Katz with TD Cowen. Please proceed with your question.

In the third quarter, AMG delivered 9 billion and net client cash inflows and $17 billion on a year to date basis.

Speaker #4: And with that, I'll turn it over to Tom.

Speaker #1: Thank you, Jay. And good morning, everyone. AMG's activities over the course of this year illustrate our strategy in action. As we evolve our business mix more toward alternatives, our business is generating strong organic growth in both liquid alternatives and private markets.

Representing an annualized organic growth rate of 3%, thus far in 2025.

Our strong organic growth this year reflects rapidly growing client demand for liquid alternative strategies and ongoing momentum in private markets fundraising.

Speaker #1: And we continue to invest in both our affiliates and in AMG's own capabilities to support future growth opportunities. This year, we have entered four new investment partnerships with alternative firms squarely aligned with long-term secular growth trends.

[Analyst] (TD Cowen): Okay. Thank you very much. Good morning, everybody. I appreciate you taking the question. Jay, maybe one for you. I think the theme coming out of today's call is just the franchise momentum, both from a de novo perspective as well as incrementally through inorganic. Maybe I just wanted to delve a little bit more into BBH, how that sort of arose, did they seek you out? As you look at the pipeline looking ahead, how should we be thinking about activity level into next year after a really strong 2025? Thank you.

In the quarter, our affiliates generated 18 billion in net inflows in alternatives.

More than offsetting 9 billion in outflows in active equities.

And highlighting the advantages of Amg's business profile that is increasingly weighted towards high growth alternative asset classes.

Speaker #1: We also announced a strategic collaboration to bring structured credit products to the U.S. wealth marketplace with BBH Credit Partners, highlighting the strength of AMG's capital formation capabilities.

And liquid alternatives, our affiliates value proposition continues to resonate with clients.

With $14 billion in net inflows AMG posted the strongest quarterly net flows and liquid alternatives in our history.

Jay Horgen: Great. Good morning, Bill, and thanks for your questions. I will maybe take the first one just on the momentum. Tom, I'm going to ask you maybe to talk about BBH, and then maybe you can send it back to me. We can talk about pipeline, so check them all off. Yeah, thanks, Bill. I think I agree with your setup. It has been a landmark year for AMG. An output of our strategy, as you've heard us talk about it over the last six years, both inorganic and organic, our flow profile, which is driven by alternatives, has been improving for some time now. This quarter is our second significantly positive quarter. It is building, and we feel good about the continued strength of it.

Speaker #1: And we engage strategically with our affiliates across a range of business initiatives including new product launches, building out adjacent capabilities, and supporting two of our private markets affiliates in their sales to consolidators taken together these strategic actions and many other elements of our unique model drove significant earnings growth and cash flow generation.

Driven primarily by tax aware solutions and.

And supported by positive contributions from a number of affiliates.

Client demand for tax aware strategies remains substantial.

And amg's affiliates offer highly attractive products.

And more broadly.

Speaker #1: Which we have invested and will continue to invest for growth. Fueling the execution of our strategy and the forward evolution of our business while simultaneously returning capital through share repurchases and further delivering value to our shareholders.

<unk> diverse group of affiliates managing liquid alternative strategies is well positioned to deliver excellent risk adjusted returns for clients and attract new flows over time.

Our private markets affiliates raised $4 billion in the quarter.

Jay Horgen: Our strategic engagement with affiliates, collaborating with them to magnify their long-term success, has generated meaningful results at places like Pantheon, AQR, Artemis, Garda, and many others where we're working on business development initiatives to enhance their value. It's been, as you've seen, one of the most active years for us in terms of new investment activity, near record levels of capital deployment. We've announced four new investments and a strategic collaboration with BBH, which Tom will talk about in a moment. We've had two stake sales from two consolidators in Peppertree and ComVest, so it's just been an extraordinarily active year for us. Maybe looking at where the business stands today, alternatives contribute 55% of our EBITDA on a run-rate basis. We're working hard to increase that to more than two-thirds in just a few years from now.

Mainly driven by another strong quarter at pantheon and.

Speaker #1: In the third quarter, AMG delivered $9 billion in net client cash inflows and $17 billion on a year-to-date basis, representing an annualized organic growth rate of 3% thus far in 2025.

And positive contributions from AIG and advocacy.

Demonstrating the diversity of our affiliates offerings across private market solutions credit private equity real estate and infrastructure.

The ongoing fundraising momentum of our private markets affiliates reflects investors' conviction and their specialized investment strategies, along with the impact of ongoing secular growth trends.

Speaker #1: Our strong organic growth this year reflects rapidly growing client demand for liquid alternative strategies and ongoing momentum in private markets fundraising. In the quarter, our affiliates generated $18 billion in net inflows in alternatives.

Looking ahead the.

The management and performance fee potential across our private markets affiliates.

Speaker #1: More than offsetting $9 billion in outflows in active equities. And highlighting the advantages of AMG's business profile that is increasingly weighted toward high growth alternative asset classes.

Including some of our most recent new investment partnerships, which are not yet reflected in our results.

Represents a significant source of upside for the long term earnings profile of our business.

Speaker #1: In liquid alternatives, our affiliates' value proposition continues to resonate with clients. With $14 billion in net inflows AMG posted the strongest quarterly net flows in liquid alternatives in our history.

As we continue to form new partnerships with growing high quality independent firms such as our new investments in northbridge fruition Montefiore and quality energy this year.

Jay Horgen: We think that'll continue to sustain our organic growth, and also we see good opportunities to make those new investments. Finally, as we have been committed to discipline capital allocation, it has resulted in $350 million in repurchases this year. You heard Dava say that we've just updated our guidance to at least $500 million for 2025. It has been an extraordinary year in terms of both new investments and organic growth, and that lays the groundwork for accelerating EBITDA and earnings growth in 2026. Tom, if you would mind, give us a bit more detail on BBH.

And our strategic collaboration with PVH credit partners.

Speaker #1: Driven primarily by tax-aware solutions and supported by positive contributions from a number of affiliates. Client demand for tax-aware strategies remains substantial and AMG's affiliates offer highly attractive products.

We are broadening our exposure to fast growing specialty areas within alternatives.

And further diversifying our business.

PVH is taxable fixed income franchise has delivered top quartile performance across strategies and market environments.

Speaker #1: And more broadly, AMG's diverse group of affiliates managing liquid alternative strategies is well positioned to deliver excellent risk-adjusted returns for clients and attract new flows over time.

Our strategic collaboration will bring the firm's industry, leading structured and alternative credit expertise into the U S wealth marketplace.

As high net worth clients and their advisers continue to drive demand for alternative strategies.

Tom Wojcik: Yeah, happy to. Thanks for your question, Bill, and good morning. I think Jay provided a lot of very good context in terms of our strategy overall. Really, when we think about the BBH strategic collaboration, it aligns very well with a number of different elements of our strategy, key themes, and areas that we're really focused on, like alternatives and the growing opportunity for alternatives in US wealth. Over the course of the past couple of years, you've heard us on earnings calls and in some of our meetings talk about this repositioning that we've gone through in our US wealth business. Really, it has focused that organization on the opportunity in alternatives. We've built a new affiliate product strategy team. We've channelized our sales force to address both RIAs and the wirehouse opportunity.

Speaker #1: Our private markets affiliates raised $4 billion in the quarter, mainly driven by another strong quarter at Pantheon and positive contributions from EIG and Abacus.

Credit remains a core focus.

And the return characteristics and scalability of structured credit make this area uniquely attractive.

Speaker #1: Demonstrating the diversity of our affiliates' offerings across private market solutions, credit, private equity, real estate, and infrastructure. The ongoing fundraising momentum of our private markets affiliates reflects investors' conviction in their specialized investment strategies along with the impact of ongoing secular growth trends.

PVH is one of the industries longest tenured and most active players.

With a differentiated structured credit investment track record across the full capital stack.

And in combination with Amg's product development and distribution capabilities.

See significant opportunity to build unique investment solutions to meet growing demand.

Speaker #1: Looking ahead, the management and performance fee potential across our private markets affiliates including some of our most recent new investment partnerships which are not yet reflected in our results represents a significant source of upside for the long-term earnings profile of our business.

AMG provided excellent alignment with BPH as goals for a number of reasons.

The complementary strengths of our respective businesses.

Access to significant seed capital.

Tom Wojcik: We're partnering very closely with affiliates like Pantheon to build, seed, and distribute differentiated investment solutions to US wealth clients. In a lot of ways, the strategic collaboration with BBH is both a recognition of the success that we've had to date in going through that change to our US wealth platform and the opportunity and the success that we're seeing. It is also the next chapter in terms of opportunity to build on that success with a great partner like BBH. BBH is one of the most respected and trusted brands in financial services globally, and we're very excited to work closely together with them. You asked how this came together, and effectively, I would say we found each other. They had an opportunity that they were thinking about in terms of an excellent structured credit franchise.

The permanent nature of our model.

And strong cultural connectivity across our firms.

The strategic collaboration will accelerate the expansion of BVA is structured credit franchise and.

Speaker #1: As we continue to form new partnerships with growing high-quality independent firms such as our new investments in Northbridge, Verision, Montefiore, and Qualitas Energy this year, and our strategic collaboration with BBH Credit Partners, we are broadening our exposure to fast-growing specialty areas within alternatives and further diversifying our business.

And we will further enhance amg's position as a leading sponsor of alternative strategies for the U S wealth market.

The rapidly growing demand in U S wealth for distinctive alternative products is one of the most visible megatrends in the asset management industry today.

In AMG is uniquely positioned to benefit.

Speaker #1: BBH's taxable fixed income franchise has delivered top-quartile performance across strategies and market environments. Our strategic collaboration will bring the firm's industry-leading structured and alternative credit expertise into the U.S. wealth marketplace.

AQR has been a leader for more than a decade in developing and delivering excellent investment solutions to U S wealth clients.

And its innovation and tax aware strategies continues to drive rapid adoption.

Tom Wojcik: We had a strong view on structured credit as an opportunity in US wealth, and there was a real complementary opportunity for us to come together and try and build something together. We do think that BBH choosing AMG to be their strategic collaboration partner is a very strong statement on our value proposition in US wealth. I mentioned some of this in my prepared remarks, but we think AMG was the right partner for them for a number of reasons. As I mentioned, the complementary strengths of our respective businesses there in terms of underwriting, pricing, risk management around structured credit, and on our side, product development and capital formation resources, access to significant seed capital that we underwrote as part of this collaboration, the permanent nature of our model, and also, very importantly, really strong cultural connectivity across our firms.

Pantheon was one of the earliest innovators and limited liquidity vehicles and private markets and.

Speaker #1: As high-net-worth clients and their advisors continue to drive demand for alternative strategies, credit remains a core focus. And the return characteristics and scalability of structured credit make this area uniquely attractive.

In product development and flows are accelerating across its product lines.

Our collaboration with PVH credit partners speaks to the success that AMG has seen thus far in driving growth in alternatives in the wealth channel and we see significant opportunities ahead.

Speaker #1: BBH is one of the industry's longest-tenured and most active players, with a differentiated structured credit investment track record across the full capital stack. And in combination with AMG's product development and distribution capabilities, we see significant opportunity to build unique investment solutions to meet growing demand.

As clients increasingly look to AMG is the industry's leading entry point to access to differentiated alternative investment capabilities of independent partner owned firms.

<unk> footprint in U S wealth is well positioned for rapid growth.

Speaker #1: AMG provided excellent alignment with BBH's goals for a number of reasons: the complementary strengths of our respective businesses, access to significant seed capital, the permanent nature of our model, and strong cultural connectivity across our firms.

Importantly, the.

The success that we're having in the U S wealth channel is resonating not only with clients and existing AMG affiliates, but also with new investment prospects.

Tom Wojcik: We spent a lot of time together, got to know one another very well, and I think we have a shared vision for where we can take this. Collectively, we're really excited about the collaboration. We think it'll materially accelerate the expansion of BBH's structured credit capabilities and also further enhance AMG's position as a leading sponsor of alternative strategies for the US wealth market as we continue to build momentum in that area. Jay, maybe back to you on the pipeline.

As accessing this attractive market requires scale and.

And it's difficult if not impossible for many independent firms to do on their own.

Speaker #1: The strategic collaboration will accelerate the expansion of BBH's structured credit franchise and will further enhance AMG's position as a leading sponsor of alternative strategies for the US wealth market.

As we continue to invest in new partnerships with alternatives firms, we look forward to collaborating with additional affiliates to broaden their reach and expand their platforms.

Speaker #1: The rapidly growing demand in US wealth for distinctive alternative products is one of the most visible megatrends in the asset management industry today. And AMG is uniquely positioned to benefit.

Jay Horgen: Yeah, great. I'll just say one thing. It was very validating and rewarding that our capital formation capabilities, and that's an area which, as Tom just mentioned, we've invested heavily in repositioning it. It was a centerpiece of this strategic collaboration with BBH Credit Partners, and we do think it'll allow us to drive more product in the wealth space around alternatives. We're very excited about that. Turning to the pipeline, Bill, I know you heard me say already that it's been near record levels of deployment from our perspective. We continue to see opportunities to invest for growth in new and existing affiliates. Our pipeline reflects this opportunity set. Maybe just giving a bit of color at a high level, we're staying focused on areas of secular growth, both within private markets and liquid alternatives.

Amg's business has continued to evolve in 2025.

Driven by our focus on allocating our resources and capital to areas of secular growth.

As we execute our strategy, we expect the contribution from alternatives businesses to further increase.

Speaker #1: AQR has been a leader for more than a decade in developing and delivering excellent investment solutions to U.S. wealth clients. Its innovation in tax-aware strategies continues to drive rapid adoption.

Enhancing our long term organic growth profile and earnings profile and we are excited about the opportunities ahead.

With that I'll turn the call over to Dave to discuss our third quarter results and guidance.

Speaker #1: Pantheon was one of the earliest innovators in limited liquidity vehicles in private markets. And product development and flows are accelerating across its product line.

Thank you Tom and good morning, everyone.

It has been an exciting year for AMG in 2025 to date, we have committed approximately $1 5 billion in capital across growth investments and share repurchases and we continue to be in a strong position to execute on future growth opportunities and return capital to shareholders given our significant cash.

Speaker #1: Our collaboration with BBH Credit Partners speaks to the success that AMG has seen thus far in driving growth in alternatives in the wealth channel and we see significant opportunities ahead.

Speaker #1: As clients increasingly look to AMG as the industry's leading entry point to access the differentiated alternative investment capabilities of independent partner-owned firms, AMG's footprint in US wealth is well positioned for rapid growth.

Cash generation and strong balance sheet.

Jay Horgen: Importantly, we are interested in businesses where AMG's strategic capabilities can add value and firms that would like to have a strategic partner. That has increasingly become part of the dialogue and part of our differentiated area for success. We'd like to be able to magnify our affiliates' business plans, their business initiatives, and we're doing so through our active engagement with affiliates. We've had a proven track record of providing capital and resources in these areas: business development, product development, and distribution. We're excited about continuing to add new affiliates in areas that we think we can help them grow. This unique sort of advantage that we have now, in addition to just preserving independence, which we've always done very well, as you know, the ability to magnify the advantages of partner-owned firms has really added to our attractiveness in the market.

I will start by walking through the results for the quarter.

We will discuss the positive impact of recent capital activity on our forward earnings power.

And conclude with a discussion on our balance sheet.

Speaker #1: Importantly, the success that we are having in the U.S. wealth channel is resonating not only with clients and existing AMG affiliates but also with new investment prospects.

In the third quarter, we reported adjusted EBITDA of $251 million, which grew 17% year over year.

This included $11 million and net performance fee earnings and reflected a full quarter contribution from progression and pepper trees final contribution.

Speaker #1: As accessing this attractive market requires scale, and is difficult if not impossible, for many independent firms to do on their own. As we continue to invest in new partnerships with alternatives firms, we look forward to collaborating with additional affiliates to broaden their reach and expand their platforms.

Fee related earnings, which exclude net performance fees grew 15% year over year, driven by the positive impact of our investment performance and organic growth in our alternative strategies, partially offset by outflows from fundamental equity strategies.

Speaker #1: AMG's business has continued to evolve in 2025, driven by our focus on allocating our resources and capital to areas of secular growth. As we execute our strategy, we expect the contribution from alternatives businesses to further increase, enhancing our long-term organic growth profile and earnings profile. We are excited about the opportunities ahead.

Economic earnings per share of $6 10 grew 27% year over year. Additionally, benefiting from share repurchases.

Jay Horgen: The last thing I'd just say around our pipeline, in addition to we continue to have a significant opportunity to invest our capital in growth initiatives, we will remain disciplined, as always. The goal is to ensure that we deploy our capital in the highest quality opportunities with a target to mid to high teens returns, as we've said in the past. We have been successful in doing that over the past six years. If we cannot find good investment opportunities, we will look to return capital through share repurchases, and we've done that also during this period, having reduced our share count by 40%. Maybe I'll just leave you with the summary of our new investment opportunity. We feel really good about it.

Now moving to fourth quarter guidance, we expect adjusted EBITDA to be in the range of $325 million and $370 million based on current AUM levels, reflecting our market blend, which was up 1% quarter to date as of Friday, and including net performance fees of <unk> seven.

Speaker #1: With that, I'll turn the call over to Dava to discuss our third quarter results and guidance.

Speaker #2: Thank you, Tom, and good morning, everyone. It has been an exciting year for AMG. In 2025 to date, we have committed approximately $1.5 billion in capital across growth investments and share repurchases, and we continue to be in a strong position to execute on future growth opportunities and return capital to shareholders, given our significant cash generation and strong balance sheet.

5 million to $120 million, bringing expected performance fees for this year to between 110 and $155 million.

This guidance includes a full quarter contribution from Montefiore.

Full quarter contribution from Comed, best private credit business and no impact from our announced investments in quality energy and PVH credit partners, which are expected to close in Q4, and Q1 2026, respectively.

Jay Horgen: We feel good about our ability to originate and invest in new affiliates and areas of secular growth, and we're confident that we'll continue to meaningfully evolve our business through these growth investments and enhance shareholder value over time. Thanks, Bill, for your questions.

Speaker #2: I will start by walking through the results for the quarter, then we'll discuss the positive impact of recent capital activity on our forward earnings power, and conclude with a discussion on our balance sheet.

We expect fourth quarter economic earnings per share to be between $8 10, and $9 26.

Operator: Thank you. Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.

Speaker #2: In the third quarter, we reported adjusted EBITDA of $251 million, which grew 17% year over year. This included $11 million in net performance fee earnings and reflected a full quarter contribution from Verision and Peppertree's final contribution.

Assuming an adjusted weighted average share count of $28 9 million for the quarter.

Alex Blostein: Hey, good morning, everyone. Thank you for the question as well. Lots of enthusiasm from you guys on 2026. It feels like it's a little bit earlier than typical to give guidance in 2026, but I was wondering if you kind of can help contextualize what that could mean for next year, given a number of moving pieces, including you alluded to expansion in the margins at AQR and Pantheon. That sounds like it's an important part of the story here as well. Any way you can help us frame what sort of the growth expectations you might have so far into 2026 would be helpful. Thanks.

Yes.

Looking further ahead, we anticipate a meaningful increase in our full year adjusted EBITDA and economic earnings per share in 2020, mainly driven by strong organic growth and our capital allocation strategy and I'll describe each of these further.

Speaker #2: Fee-related earnings, which exclude net performance fees, grew 15% year over year, driven by the positive impact of our investment performance and organic growth in our alternative strategies, partially offset by outflows from fundamental equity strategies.

Organic growth in our existing business is having a meaningful impact on bottom line earnings.

Strong organic growth in alternatives, including record inflows in alternatives year to date is driving growth in AUM, having a positive impact on our aggregate fee rate relative to the prior year and incrementally expanding margins at some of our largest alternative affiliates.

Speaker #2: Economic earnings per share of $6.10 grew 27% year over year, additionally benefiting from share repurchases. Now moving to fourth quarter guidance. We expect adjusted EBITDA to be in the range of $325 million and $370 million, based on current AUM levels reflecting our market blend, which was up 1% quarter to date as of Friday.

Jay Horgen: Yeah, thanks, Alex, and good morning to you. I'll let Dava do the meat of this. Maybe just to set it up, one of the reasons why we're so excited about 2026 is that, as you've seen in the past, when we do new investments, the year in which we do new investments is a partial year, and the full year contribution from those new investments actually happens in the next year, in this case, 2026. We've also had the added benefit this year of having organic growth really come into the middle of the year, and the momentum continues. As you heard and you rightfully pointed out, there's an added benefit there because it's into businesses where we actually have margin expansion opportunities. Maybe I'll let Dava expand on what we're seeing in terms of mix and forward look.

Furthermore, the approximately one 5 billion committed to growth investments and share repurchases combined with the sale of our stakes in two of our private market affiliates is expected to substantially increase our earnings in 2026.

Speaker #2: And including net performance fees of $75 million to $120 million, bringing expected performance fees for this year to between $110 and $155 million. This guidance includes a full quarter contribution for Montefiore, a full quarter contribution from ComVest's private credit business, and no impact from our announced investments in Qualitest Energy and BBH Credit Partners, which are expected to close in Q4 and Q1 2026, respectively.

Additionally, we believe there is incremental upside to our earnings potential over time as we strategically engaged with each of our five new partners in the next phase of their success.

This combination of organic growth in our existing business and new investment activity has led to strong year over year earnings growth. So far in 2025 and underpins our confidence in our 2026 earnings profile.

Jay Horgen: It is a little early to land on a 2026, but I think we can give you a sense for it.

Dava Ritchea: That's right. Thanks, Jay, and thanks, Alex, for the question. At a high level, we expect the combination of new investments, share repurchases, and the impact of net inflows from alternatives to be impactful to our 2026 EAPS. Really, given the strategic evolution of our business profile over the last six years towards greater participation in alternatives, the EBITDA impact of the growth that we're seeing today is really meaningful. The largest driver of that has been a turnaround in our net flow profile as we've moved the business from what was shrinking organically around 10% annually to a business that today grew 3% annualized on a year-to-date basis and 5% annualized this quarter.

Importantly, most of this earnings growth is in fee related earnings delivered by products with longer expected duration.

Speaker #2: We expect fourth quarter economic earnings per share to be between $8.10 and $9.26, assuming an adjusted weighted average share count of 28.9 million for the quarter.

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Finally, turning to the balance sheet and capital allocation.

We repurchased approximately $77 million in shares in the third quarter, bringing year to date repurchases to approximately $350 million.

Speaker #2: Looking further ahead, we anticipate a meaningful increase in our full-year adjusted EBITDA and economic earnings per share in 2026, mainly driven by strong organic growth and our capital allocation strategy.

We are increasing our full year guidance for repurchases and now expect to repurchase at least 500 million subject to market conditions and capital allocation activity.

Speaker #2: And I'll describe each of these further. Organic growth in our existing business is having a meaningful impact on bottom line earnings. Strong organic growth in alternatives, including record inflows in alternatives year to date, is driving growth in AUM, having a positive impact on our aggregate fee rate relative to the prior year and incrementally expanding margins at some of our largest alternative affiliates.

Our balance sheet remains in a strong position with long dated debt significant capacity from ongoing cash generation and access to our revolver.

Dava Ritchea: As we've experienced an even larger EBITDA contribution the past two quarters from our net flows than our organic growth rate would indicate, we're seeing some further expansion in EBITDA than you would expect in our net organic growth rate. This trend is occurring because of the bifurcation we've seen between strong organic growth on the alternative side and the headwinds on the traditional side. The growth in alternatives is moving the business towards higher fee and longer lock strategies that, in some cases, have future performance fee and carry potential, while the outflows have been more isolated to lower fee open-ended equity funds. Even though we tend to own more of the firms where we're experiencing outflows, the higher fee rates from the alternative products have more than offset this impact. We'll give some further guidance on the next earnings call in terms of our overall thoughts on 2026.

Additionally, we received pre tax proceeds of approximately $260 million from the sale of our stake in pepper tree.

Which closed in the third quarter.

And we will receive approximately $285 million in proceeds from the sale of our stake in Comcast.

Speaker #2: Furthermore, the approximately $1.5 billion committed to growth investments and share repurchases, combined with the sale of our stakes in two of our private market affiliates, is expected to substantially increase our earnings in 2026.

Given our ample financial flexibility, which is further enhanced by the proceeds from these affiliate transactions, we are well positioned to continue to invest in growth opportunities.

And return capital to shareholders.

We continue to employ a deliberate strategic and disciplined approach to allocating our capital and investing in the ongoing growth of our business. We have a diverse unique set of opportunities available to us including investments in new affiliate partnerships.

Speaker #2: Additionally, we believe there is incremental upside to our earnings potential over time as we strategically engage with each of our five new partners in the next phase of their success.

Speaker #2: This combination of organic growth in our existing business and new investment activity has led to strong year-over-year earnings growth so far in 2025 and underpins our confidence in our 2026 earnings profile.

And alongside existing affiliates and in AMG capabilities.

So our capital allocation framework, we selectively engage in opportunities that align with our overall business strategy and that we believe will create significant long term value.

Jay Horgen: Dave, you might just want to also talk about just the composition between NFRE and PRE just briefly. I think that's also something that's meaningful that's happening.

Speaker #2: Importantly, most of this earnings growth is in fee-related earnings, delivered by products with longer expected duration. Finally, turning to the balance sheet and capital allocation.

Dava Ritchea: Sure. What's exciting that we've seen to date, again, based on both the combination of the new investment profile that we've had this year and also in terms of organic growth, we've seen our year-over-year aggregate fee rate and real growth in fee-related earnings. You've seen that up about 15% on a quarter-year-over-year basis, and the shift mix of our business is moving towards a higher contribution from fee-related earnings.

And looking ahead, we are confident in our ability to continue to generate substantial value for our shareholders.

Now we are happy to take your questions.

Speaker #2: We repurchased approximately $77 million in shares in the third quarter, bringing year-to-date repurchases to approximately $350 million. We are increasing our full year guidance for repurchases and now expect to repurchase at least $500 million, subject to market conditions and capital allocation activity.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question Kim.

You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing Mr. Archie.

Speaker #2: Our balance sheet remains in a strong position with long-dated debt, significant generation, and access to our revolver. Additionally, we received pre-tax proceeds of approximately $260 million from the sale of our stake in Peppertree, which closed in the third quarter, and we'll receive approximately $285 million in proceeds from the sale of our stake in ComVest.

We request that you each keep to one question. Thank you.

Jay Horgen: Great. Thanks, Alex.

Our first question comes from the line of Bill Katz with TD Cowen. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Dan Fannon with Jefferies. Please proceed with your question.

Okay. Thank you very much good morning, everybody I appreciate taking the question Jay.

[Analyst] (Jefferies): Yeah, good morning. This is Rick Roy on for Dan. You reported another quarter of accelerating liquid alts flows, and it sounds like momentum in the tax-aware AQR strategies continues to be a big contributor towards that. Maybe on that, I was hoping you could add a little bit more color on the full diversity of flows coming from the AQR broader franchise and maybe perhaps also describing the performance fee potential of the broader set of AQR strategies that are gathering inflows. Maybe separately, if you could note any notable private markets fundraisers to be aware of in the near term and into 2026, that would be helpful. Thank you.

Jay maybe one for you I think the theme coming out at todays call is just the franchise momentum both from a de novo perspective, as well as incrementally through inorganic.

Maybe just wonder if you could just maybe delve a little bit more into PVH, how that sort of arose did they seek you out and then just as you look at the pipeline looking ahead, how should we be thinking about activity level into next year. After a really strong 2025. Thank you.

Speaker #2: Given our ample financial flexibility, which is further enhanced by the proceeds from these affiliate transactions, we are well positioned to continue to invest capacity from ongoing cash in growth opportunities and return capital to shareholders.

Great. Good morning, Bill and thanks for your questions I will let me take the first one just on the momentum.

Speaker #2: We continue to employ a deliberate, strategic, and disciplined approach to allocating our capital and investing in the ongoing growth of our business. We have a diverse, unique set of opportunities available to us, including investments in new affiliate partnerships, in and alongside existing affiliates, and in AMG capabilities.

Tom I'm going to ask you maybe to talk about deviation then maybe you can send it back to me.

Jay Horgen: All right. Thanks, Rick. Good morning. I'm going to let Tom just sort of give you an overview of flows, and I'm sure within that, he'll drill down on some of the trends that we're seeing. Rick, thanks for the question. Jay, actually, maybe after I go through this, you can give a little bit more color on AQR specifically, but I'll give you the whole picture, and then we can fill in from there. To put the whole thing in context, our flows are primarily a function of three key drivers. The first is the alignment between our affiliates' investment strategies and overall client demand trends.

And we can talk about pipeline.

Check them all off.

Yes, Thanks Bill.

I think I agree with your setup. It has been a landmark year for AMG.

Speaker #2: Through our capital allocation framework, we selectively engage in opportunities that align with our overall business strategy, and that we believe will create significant long-term value.

And output of our strategy as you've heard us talk about it over the last six years, both inorganic and organic.

Our flow profile, which is driven by alternatives has been improving for some time now this quarter is our second significantly positive quarter. It is building and we feel good about the continued strength of it.

Speaker #2: And looking ahead, we are confident in our ability to continue to generate substantial value for our shareholders. Now, we are happy to take your questions.

Speaker #1: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Our strategic engagement with affiliates collaborating with them to magnify their long term success is generated meaningful results at places like pantheon AQR Artemis Garda.

Jay Horgen: The second is the evolution of our business mix, and Dava just talked about some of this as did Jay, over time through both organic growth rates, the relative organic growth rates of our different business lines, and the investments that AMG is making to form new partnerships and growth areas in line with our strategy. Finally, the third driver is really the lift that we're able to provide at the AMG level to our affiliates through new product development and distribution. In terms of alignment with client demand trends, with approximately 55% of our EBITDA now coming from alternative asset classes and a growing portion coming from wealth clients, our overall positioning is very well aligned with forward trends.

Speaker #1: You may press *2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

And many others, we're working on business development initiatives to enhance their value.

It's been as you've seen one of the most active years for us in terms of new investment activity near record levels of capital deployment, We've announced four new investments in our strategic collaboration with PVH, which Tom will talk about in a moment we've had too.

Speaker #1: We request that you each keep to one question. Thank you. Our first question comes from the line of Bill Katz with TD Cowan. Please proceed with your question.

Speaker #2: Okay. Thank you very much. Good morning, everybody. I appreciate you taking the question. Jay, maybe one for you. I think the theme coming out of today's call is just the franchise momentum, both from a de novo perspective as well as incrementally through inorganic.

Stake sales from two consolidators and Peppertree and converse. So it's just been an extraordinarily active year for us.

Jay Horgen: In terms of where we go from here, as we look to continue to push that percentage of EBITDA from alts closer to the two-thirds level over the course of time, all of our recent new investment partnerships have been focused on alternatives. Significantly more than 100% of our total net flows over the past few years have also been in alternatives. Over that same time frame, we've grown alternatives AUM on our US wealth platform from about $1 billion to more than $7 billion. You're seeing the cumulative impact of that business mix evolution on AUM, on our fee rate, as Dava just talked about, and on the contribution of EBITDA that's coming from alternatives overall. To go into the individual buckets, in private markets, as I mentioned on my prepared remarks, our affiliates raised $4 billion in the quarter.

Maybe looking at where the business stands today.

Speaker #2: A, maybe I just wanted to give just maybe delve a little bit more into BBH, how that sort of arose. Did they seek you out?

Alternatives contribute 55% of our EBITDA on a run rate basis, we're working hard to increase that to more than two thirds in just a few years from now we think that will continue to sustain our organic growth and also we see good opportunities to make those new investments.

Speaker #2: And then just as you look at the pipeline looking ahead, how should we be thinking about activity level into next year after a really strong 2025?

Speaker #2: Thank you.

Speaker #3: Great. Good morning, Bill, and thanks for your questions. I will maybe take the first one just on the momentum. Tom, I'm going to ask you to maybe talk about BBH, and then maybe you can send it back to me and we can talk about the pipeline.

And finally.

As we have been committed to disciplined capital allocation.

It has resulted in $350 million of repurchases this year.

Speaker #3: So check them all off. So yeah, thanks, Bill. Just I think I agree with your setup. It has been a landmark year for AMG.

You heard David say that we've just updated our guidance to at least 500 for 2025. So it has been an extraordinary year in terms of both new investments.

Speaker #3: An output of our strategy, as you've heard us talk about it over the last six years, both inorganic and organic, our flow profile, which is driven by alternatives, has been improving for some time now.

And organic growth and that lays the groundwork for accelerating EBITDA and earnings growth in 2026, So maybe Tom if you would mind give us a bit more detail on PVH.

Jay Horgen: That's really a continuation of momentum that we've been seeing over the course of the past several years. It was another very strong quarter for Pantheon, alongside positive contributions from EIG and Abacus. I think, importantly, that really demonstrates the diversity of our affiliate offerings across a variety of different areas: private market solutions, credit, private equity, real estate, infrastructure, where our affiliates are real leaders in these specialized strategies in the market. Liquid alternatives was another record quarter for us: $14 billion in net inflows. As you referenced in your question, driven primarily by solutions for the wealth channel focused on after-tax returns at AQR. Importantly, with positive contributions from a number of our liquid alternative affiliates, we're seeing real breadth in that area as well. This is now the fifth consecutive quarter where we've seen positive flows in liquid alternatives.

Speaker #3: This quarter is our second significantly positive quarter. It is building, and we feel good about the continued strength of it. Our strategic engagement with affiliates, collaborating with them, to magnify their long-term success is generated meaningful results at places like Pantheon, AQR, Artemis, Garda, and many others where we're working on business development initiatives to enhance their value.

Yeah happy to thanks for your question Bill and good morning, I think Jay provided a lot of very good context in terms of our strategy overall and really when we think about the BPH strategic collaboration it aligns very well with a number of different elements of our strategy and key themes in areas that we're really focused on like alternate.

<unk>.

And like the growing opportunity for alternatives in U S well.

Speaker #3: It's been, as you've seen, one of the most active years for us in terms of new investment activity, near record levels of capital deployment.

Over the course of the past couple of years, you've heard us on earnings calls and in some of our meetings talk about this repositioning that we've gone through in our U S wealth business really just focus that organization on the opportunity in alternatives, we built a new affiliate product strategy team.

Speaker #3: We've announced four new investments and a strategic collaboration with BBH, which Tom will talk about in a moment. We've had two stake sales to consolidators in Peppertree and ComVest.

<unk> Channelize, our sales force to address both <unk> and the wire house opportunity.

Jay Horgen: Over that time period, we've seen $38 billion in total net inflows. Equities, we continue to see headwinds, and that's in line with the overall industry. You saw that this quarter with about $9 billion in outflows. That said, it's been another good year for Beta, and Beta continues to support AUM levels overall. We're also seeing some pockets of strength. Jay mentioned earlier, Artemis River Road. There are some real bright spots that we're excited about there also. When you put all of those things together, kind of back into that initial framework, better alignment with overall client demand trends as we continue to shift our business. Continued investments in new affiliates, active collaboration with our affiliates to develop and create innovative new products that can help to drive client demand through our capital formation capabilities.

Speaker #3: So it's just been an extraordinarily active year for us. Maybe looking at where the business stands today, alternatives contribute 55% of our EBITDA on a run rate basis.

And we're partnering very closely with affiliates like pantheon to build seed and distribute <unk>.

<unk> investment solutions to U S wealth clients.

Speaker #3: We're working hard to increase that to more than two-thirds in just a few years from now. We think that'll continue to sustain our organic growth and also we see good opportunities to make those new investments.

So and a lot of ways the strategic collaboration with BPH is both a recognition of the success that we've had to date and going through that change to our U S wealth platform and the opportunity and the success that we're seeing.

Speaker #3: And finally, as we have been committed to disciplined capital allocation, it has resulted in $350 million of repurchases this year. You heard Davis say that we've just updated our guidance to at least $500 for 2025.

But also the next chapter in terms of opportunity to build on that success with a great partner like PVH.

PVH is one of the most respected and trusted brands in financial services globally.

We're very excited to work closely together with them you asked how this came together and effectively I would say we found each other they had an opportunity that they were thinking about in terms of an excellent structured credit franchise.

Speaker #3: So it has been an extraordinary year, in terms of both new investments and organic growth. And that lays the groundwork for accelerating EBITDA and earnings growth in 2026.

Jay Horgen: Together with our confidence in our ability to continue and maybe even enhance and accelerate the impact of these growth drivers going forward, we feel like we're in a really strong position from an overall franchise perspective in terms of forward organic growth opportunities. Rick, let me address AQR specifically. Incrementally, it has been very helpful to our flow profile, but maybe I'll highlight a few key attributes about that business. It's a very diverse business. The way I describe it is it's a liquid alts business, one of the top three in the world. It has a pretty significant tax-aware wealth business. That has a different dynamic than just its overall institutional liquid alts business. It has a 40 Act long-only business as well. Because of its excellent performance, it's seeing inflows in each of these areas.

We had a strong view on structured credit as an opportunity in U S wealth.

Speaker #3: So maybe, Tom, if you wouldn't mind giving us a bit more detail on BBH.

And there was a real complementary opportunity for us to come together and try and build something together.

Speaker #2: Yeah. Happy to. Thanks for your question, Bill, and good morning. I think Jay provided a lot of very good context in terms of our strategy overall.

We do think that PVH choosing AMG to be their strategic collaboration partner has a very strong statement on our value proposition in U S wealth and I mentioned some of this in my prepared remarks, but we think AMG was the right partner for them for a number of reasons as I mentioned in the complementary strengths of our respective businesses there in terms of.

Speaker #2: And really, when we think about the BBH strategic collaboration, it aligns very well with a number of different elements of our strategy. Key themes and areas that we're really focused on include alternatives and the growing opportunity for alternatives in U.S. wealth.

Underwriting pricing risk management around structured credit and on our side product development and capital formation resources.

Speaker #2: Over the course of the past couple of years, you've heard us on earnings calls and in some of our meetings talk about this repositioning that we've gone through in our U.S. wealth business.

Access to significant seed capital that we underwrote as part of this.

Speaker #2: Really, to focus that organization on the opportunity and alternatives. We've built a new affiliate product strategy team. We've channelized our sales force to address both RIAs and the wirehouse opportunity.

Our collaboration.

The permanent nature of our model and also very importantly, really strong cultural connectivity across our firms. We spent a lot of time together got to know one another very well.

Jay Horgen: I think we would be remiss without sort of stating the obvious, which is a very big, diverse business with lots of different strategies and lots of different opportunities within it. Maybe I'll highlight, though, as I did last quarter, sort of a paradigm shift that's occurring in the wealth channel. AQR is leading or has a leading position in this paradigm shift. The basic strategies to harvest losses, they've been around for decades, but AQR, they've brought an additional set of tools and capabilities to it. They've kind of unlocked the power of investing for after-tax outcomes with the use of liquid alternatives. Specifically using long-short investing techniques, either to track market beta or they have a goal of absolute return, and that has generated superior after-tax outcomes, and that's what's leading to their significant flows.

Speaker #2: And we're partnering very closely with affiliates like Pantheon to build, seed, and distribute differentiated investment solutions to U.S. wealth clients. So, in a lot of ways, the strategic collaboration with BBH is both a recognition of the success that we've had to date in going through that change to our U.S. wealth platform and the opportunity and the success that we're seeing, but also the next chapter in terms of opportunity to build on that success with a great partner like BBH.

We have a shared vision for where we can take this.

So collectively we are really excited about the collaboration we think it will materially accelerate the expansion of BBA structured credit capabilities and also further enhance amg's position.

As a leading sponsor of alternative strategies for the U S wealth market as we continue to build momentum in that area.

Maybe back to you on the pipeline, yes, great I'll just I'll just say one thing it was it was very validating and rewarding.

Speaker #2: BBH is one of the most respected and trusted brands in financial services globally. And we're very excited to work closely together with them. You asked how this came together.

That our capital formation capabilities and Thats, an area, which is <unk> as Tom just mentioned, we've invested heavily in repositioning. It. It was a centerpiece of this strategic collaboration with BPH.

Speaker #2: And effectively, I would say we found each other. They had an opportunity that they were thinking about in terms of an excellent structured credit franchise.

And we do think it will allow us to drive more product in the wealth space around alternatives. So we're very excited about that.

Jay Horgen: The shift in focus by RIAs to after-tax outcomes from their historical convention of evaluating on pre-tax returns, we think this is just in the very early innings. AQR has quite an opportunity ahead of them. As you know, they've been an innovator in liquid alternatives for more than 20 years now. Their ability to bring new strategies and products to the market is one of the best in the industries. They've been building this tax-aware business for some time. They've developed an entire suite of products inside of separate accounts, limited partnerships, and now mutual funds. Their strategies generate for us management fees, and many of them have a potential for performance fees. As I've said in my prepared remarks, AQR has the potential to increase their fee rates here over some period of time as their flow mix changes.

Speaker #2: We had a strong view on structured credit as an opportunity in US wealth. And there was a real complementary opportunity for us to come together and try and build something together.

Turning to the pipeline Bill so.

You heard me say that already that it has been near record levels of deployment from from our perspective, we continue to see opportunities to invest for growth in new and existing affiliates. Our pipeline reflects this opportunity set and maybe just given a bit of color at a high level. We stated we're staying.

Speaker #2: We do think that BBH choosing AMG to be their strategic collaboration partner is a very strong statement on our value proposition in US wealth.

Speaker #2: And I mentioned some of this in my prepared remarks. But we think AMG was the right partner for them for a number of reasons.

Focused on areas of secular growth.

Speaker #2: As I mentioned, the complementary strengths of our respective businesses, their in terms of underwriting, pricing, risk management around structured credit, and on our side, product development and capital formation resources.

Both within private markets and liquid alternatives.

Importantly, we are interested in businesses, where amg's strategic capabilities can add value and firms that would like to have a strategic partner.

Speaker #2: Access to significant seed in this collaboration, the permanent nature of our model, and also, very importantly, really strong cultural connectivity across our firms. We spent a lot of time together and got to know one another very well.

So that has increasingly become part of the dialogue and part of our differentiated.

Area for success.

We'd like to be able to magnify our affiliates business plans their business initiatives and we're doing so through our active engagement with affiliates. We've had a proven track record of providing capital and resources in these areas business development product development distribution.

Jay Horgen: They also have an opportunity to increase their margins, and we feel that in our EBITDA contribution that Dava mentioned earlier. I gave most of this background on the prior call, so I thought I might just kind of update you, bring you forward on our thoughts today. We see AQR as having a first-mover advantage. It obviously has a differentiated culture, and an operating environment that is advantageous compared to most competitors. On the first-mover advantage, it takes time to get on platforms, to penetrate the largest RIAs in the country, to integrate into systems at the wirehouses. AQR has a more than two-year head start, is now finishing the onboarding just now with several of the largest wealth platforms. They haven't even gotten on all of the parts of the market where they could distribute their product. We do expect continued momentum from AQR in this area.

Speaker #2: And I think we have a shared vision for where we can take this. So collectively, we're really excited about the collaboration. We think it'll materially accelerate the expansion of BBH's structured credit capabilities.

So we're excited about continuing to add new affiliates in areas that we think we can help them grow.

Speaker #2: And also further enhance AMG's position as a leading sponsor of alternative capital that we underwrote as part of strategies for the US wealth market as we continue to build momentum in that area.

This unique sort of advantage that we have now in addition to just preserving independence, which we've always done very well as you know the ability to magnify. The advantages of partner owned firms has really added to our attractiveness in the market.

Speaker #2: So Jay, maybe back to you on the

Speaker #2: pipeline.

Speaker #3: Yeah, great. I'll collaborate with BBH, and we do think it'll allow us to drive more product in the wealth space around alternatives. So, we're very excited about that.

The last thing I'd, just say around our pipeline. In addition to we continue to have a significant opportunity to invest our capital in growth initiatives. We will remain disciplined as always the goal is to ensure that we deploy our capital at the highest in the highest quality opportunities.

Speaker #3: Turning to the pipeline, Bill. So I know you heard me say that already that it's been near record levels of deployment from our perspective.

With a target to mid to high teens returns as we said in the past we have been successful in doing that over the past six years, but if we cannot find good investment opportunities. We will look to return capital through share repurchases and we've done that also during this period, having reduced our share count by 40%.

Jay Horgen: I would be remiss if I didn't comment on the institutional business. Again, with their great performance, they have a very nice pipeline building on the liquid alternative side. Through the lens of AQR, we're seeing increased interest in liquid alternatives more broadly on the institutional side. Maybe the last thing I'll say about AQR is that their assets have grown from approximately $100 billion at the beginning of 2024 to $166 billion as of 30 September 2024. You can see there's quite a bit of growth, and most of that came from organic flows. Thank you for your question. Appreciate it.

Speaker #3: We continue to see opportunities to invest for growth in new and existing affiliates. Our pipeline reflects this opportunity set. And maybe just given a bit of color at a high level, we're staying focused on areas of secular growth, both within private markets and liquid alternatives.

So maybe I'll just leave you with a summary of our new investment opportunity, we feel really good about it we feel good about our ability to originate and invest in new affiliates and areas of secular growth and we're confident that we'll continue continue to meaningfully evolve our business through these growth investments.

Speaker #3: Importantly, we are interested in businesses where AMG's strategic capabilities can add value, and firms that would like to have a strategic partner. This has increasingly become part of the dialogue and part of our differentiated area for success.

And enhance shareholder value over time so.

So thanks Bill for your questions.

Thank you. Our next question comes from the line of Alex Blaustein with Goldman Sachs. Please proceed with your question.

Operator: Thank you. Ladies and gentlemen, this concludes our Q&A session, and we'll conclude our call today. We thank you for your interest and participation. You may now disconnect your line.

Speaker #3: We'd like to be able to magnify our affiliates' business plans, their business initiatives. And we're doing so through our active engagement with affiliates. We've had a proven track record of providing capital resources in these areas, business development, product development, distribution.

Hey, good morning, everyone and thank you for the question as well.

So lots of enthusiasm from you guys on 2026, it feels like it's a little bit earlier than typical to give guidance in 'twenty six but was wondering if you can help contextualize what that could mean for next year, given a number of moving pieces.

Speaker #3: So we're excited about continuing to add new affiliates in areas that we think we can help them grow. This unique sort of advantage that we have now, in addition to just preserving independence, which we've always done very well, as you know, the ability to magnify the advantages of partner-owned firms has really added to our attractiveness in the market.

Including you alluded to expansion in the margins at AQR <unk> pantheon and it sounds like it's an important part of the story here as well so any way you can help us frame what sort of the growth expectations you might have so far.

Into 2026 would be helpful. Thanks.

Yeah, Thanks, Alex and good morning to you.

I'll, let David do the meat of this maybe just to set it up one of the reasons why we're so excited about 2026 is that as <unk> seen in the past when we do new investments the year in which we do invest new investments as a partial year and so the full year contribution from those new investments actually happens in the next year in this case.

Speaker #3: The last thing I'd just say around our pipeline in addition to we continue to have a significant opportunity to invest our capital and growth initiatives, we will remain disciplined.

Speaker #3: As always, the goal is to ensure that we deploy our capital at the highest quality opportunities with a target to mid to high teens returns, as we've said in the past.

2026, we've also had the added benefit this year of having organic growth really come in to the middle of the year and continues the momentum continues and as you heard and you rightfully pointed out there is there is an added benefit there because it's into businesses, where we actually have margin expansion.

Speaker #3: We have been successful in doing that over the past six years. But if we cannot find good investment opportunities, we will look to return capital through share repurchases.

Speaker #3: And we've done that also during this period, having reduced our share account by 40%. So maybe I'll just leave you with the summary of our new investment opportunity.

Speaker #3: We feel really good about it. We feel good about our ability to originate and invest in new affiliates, in areas of secular growth. And we're confident that we'll continue to meaningfully evolve our business through these growth investments.

Opportunity, so maybe I'll let.

Dave.

Expand on what we're seeing in terms of mix and forward look it is a little early to land on the 2026, but I think we can give you a sense for it right.

Great. Thanks, Jay and thanks, Alex for the question.

Speaker #3: And enhance shareholder value over time. So thanks, Bill, for your questions.

At a high level, we expect the combination of new investments share repurchases and the impact of net inflows from alternatives to be impactful to our 2026.

Speaker #1: Thank you. Our next question comes from the line of Alex Blosstein, with Goldman Sachs. Please proceed with your question.

Speaker #4: Hi, good morning, everyone. Thank you for the question as well. So lots of enthusiasm from you guys in 2026. It feels like it's a little bit earlier than typical to give guidance in '26.

Really given the strategic evolution of our business profile over the last six years towards greater participation in alternatives. The EBITDA EBITDA impact of the growth that we're seeing today is really meaningful the largest driver of that has been a turnaround in our net flow profile as we've moved the business from what was shrinking.

Speaker #4: But one's wondering if you kind of could help contextualize what that could mean for next year, given a number of moving pieces. Including you alluded to expansion in the margins at AQO and Pantheon.

Organically around 10% annually to our business that today grew 3% annualized on a year to date basis and 5% annualized this quarter.

Speaker #4: That sounds like it's an important part of the story here as well. So any way you can help us frame what sort of the growth expectations you might have so far on into 2026 would be helpful.

And as we've experienced an even larger EBITDA contribution the past few quarters from our net flows than our organic growth rate would indicate.

Speaker #4: Thanks.

Speaker #3: Yeah, thanks, Alex. And good morning to you. I'll let David do the meat of this. Maybe just to set it up, one of the reasons why we're so excited about 2026 is that as you've seen in the past, when we do new investments, the year in which we do new investments is a partial year.

So we're seeing some further expansion in EBITDA than you would than you would expect in our net.

Organic growth rate.

This trend is occurring because of the bifurcation, we've seen between strong organic growth on the alternative side and the headwinds on the traditional side the growth in alternatives is moving the business towards a higher fee and longer lock strategies that in some cases have future performance fee and carry potential while the outflows have been.

Speaker #3: And so the full year contribution from those new investments actually happens in the next year, in this case, 2026. We've also had the added benefit this year of having organic growth really come into the middle of the year.

Speaker #3: And continues the momentum continues. And as you heard, and you rightfully pointed out, there's an added benefit there because it's into businesses where we actually have margin expansion opportunities.

More isolated to lower fee open ended equity funds, so even though we tend to own more of the firms where we're experiencing outflows the higher fee rates from the alternative products have more than offset this impact and we will give some further guidance on the next earnings call in terms of our overall thoughts on 2026.

Speaker #3: So maybe I'll let David expand on what we're seeing in terms of mix and forward look. It is a little early to land on a 2026.

David you might just wanted to also talk about just the composition between <unk> and PRA just briefly I think that's also something that's meaningful that's happening sure.

Speaker #3: But I think we can give you a sense for it.

Speaker #1: That's right. Thanks, Jay. And thank you, Alex, for the question. At a high level, we expect the combination of new investments, share repurchases, and the impact of net inflows from alternatives to be impactful to our 2026 EPS.

So what's exciting that we've seen.

To date again based on both the combination of the.

Speaker #1: Really, given the strategic evolution of our business profile over the last six years towards greater participation in alternatives, the EBITDA impact of the growth that we're seeing today is really meaningful.

The new investment profile that we've been that we've had this year and also in terms of organic growth, we've seen our year over year aggregate fee rate.

And real growth and Alterra and fee related earnings so you've seen that up about 15%.

On a quarter year over year basis.

And the shift in mix of our business is moving towards a higher contribution from fee related earnings.

Great. Thanks, Alex.

Thank you. Our next question comes from the line of Dan Fannon with Jefferies. Please proceed with your question.

Yes. Good morning. This is Rick Roy on for Dan. So you reported another quarter of accelerating liquid alts flows and it sounds like momentum in the tax where AQR strategies continues to be a big contributor towards that and maybe on that I was hoping you could add a little bit more color on the full diversity of flows coming from the AQR.

<unk> franchise, and maybe perhaps also describing the performance fee potential of the broader set of AQR strategies that are that are gathering inflows and then maybe separately. If you could note any notable private markets fund raises to be aware of in the near term and into 2026 that would be helpful. Thank you.

Alright, Thanks, Rick Good morning, I'm going to let Tom just sort of give you an overview of close and I'm sure within that you will drill down on some of the trends that we're seeing.

Rick Thanks for the question Jay actually maybe after I go through this you can give a little bit more color on AQR, specifically, but I'll give you the whole picture and then we can fill in from there.

To put the whole thing in context, our flows are primarily a function of three key drivers.

The first is the alignment between our affiliate's investment strategies and overall client demand trends.

The second is the evolution of our business mix and David just talked about some of this that the Jay over time through both organic growth rates, the relative organic growth rates of our different business lines and the investments that AMG is making to form new partnerships and growth areas in line with our strategy.

And then finally, the third driver is really the lift that we're able to provide at the AMG level to our affiliates through new product development and distribution.

In terms of alignment with client demand trends.

With approximately 55% of our EBITDA now coming from alternative asset classes, and a growing portion coming from wealth clients, our overall positioning us very well aligned with forward trends.

In terms of where we go from here as we look to continue to push that percentage of EBITDA from all its closer to the two thirds level over the course of time.

All of our recent new investment partnerships have been focused on alternatives.

And significantly more than a 100% of our total net flows over the past few years have also been in alternatives.

And over that same time frame, we've grown alternatives AUM on our U S wealth platform from about $1 billion to more than $7 billion.

And youre seeing the cumulative impact of that business mix evolution on AUM on our fee rate as David just talked about and on the contribution of EBITDA thats coming from alternatives overall.

So to go into the individual buckets and private markets as I mentioned on my prepared remarks, our affiliates raised $4 billion in the quarter and Thats really a continuation of momentum that we've been seeing over the course of the past several years.

It was another very strong quarter for pantheon.

Alongside positive contributions from AIG, and Abacus and I think importantly that really demonstrates the diversity of our affiliate offerings across a variety of different areas private market solutions credit private equity real estate infrastructure, where our affiliates are real leaders in these specialized strategies in the market.

Liquid alternatives with another record quarter for us $14 billion in net inflows.

The second is the evolution of our business mix, and David just talked about some of this that did Jay over time through both organic growth rates, the relative organic growth rates of our different business lines, and the investments that AMG is making to form new partnerships and growth areas in line with our strategy.

And as you referenced in your question driven primarily by solutions for the wealth channel focused on after tax returns at AQR, but importantly, with positive contributions from a number of our liquid alternative affiliates were seeing real breath in that area as well.

And then finally, the third driver is really the lift that we're able to provide at the AMG level to our Affiliates through new product development and distribution.

In terms of alignment with client demand trends.

This is now the fifth consecutive quarter, where we've seen positive flows in liquid alternatives and.

And over that time period, we've seen $38 billion in total net inflows.

With approximately 55% of our EBITDA now coming from alternative asset classes and a growing portion coming from wealth clients, our overall positioning is very well aligned with forward trends.

Equities, we continue to see headwinds and Thats in line with the overall industry you saw that this quarter with about $9 billion in outflows that said, it's been another good year for beta and beta continues to support AUM levels overall, and we're also seeing some pockets of strength J mentioned earlier Artemis River Road. So there are some real bright spots. It we're excited.

In terms of where we go from here, as we look to continue to push that percentage of ibida from all, it's closer to the 2/3, level over the course of time.

All of our recent new investment partnerships have been focused on alternatives.

And significantly more than 100% of our total net flows over the past few years have also been an alternative.

About there also.

So when you put all of those things together kind of back into that initial framework better alignment with overall client demand trends as we continue to shift our business continued investments in new affiliates active collaboration with our affiliates to develop and create innovative new products that can help to drive client demand through our capital formation capabilities together.

And over that same time frame, we've grown alternatives AUM on our U.S. wealth platform from about $1 billion to more than $7 billion.

And you're seeing the cumulative impact of that business mix evolution on AUM, on our fee rate, as Jay Horgen just talked about, and on the contribution of EBITDA that's coming from alternatives overall.

Other with our confidence in our ability to continue and maybe even enhance and accelerate the impact of these growth drivers going forward. We feel like we're in a really strong position from an overall franchise perspective in terms of forward organic growth opportunities.

So, to go into the individual buckets in private markets, as I mentioned in my prepared remarks, our Affiliates raised $4 billion in the quarter, and that's really a continuation of the momentum that we've been seeing over the course of the past several years.

And Rick let me address AQR, specifically incrementally it has been very helpful to our flow profile, but maybe I'll highlight a few key attributes about that business is a very diverse business.

The way I'd describe it is it's a liquid alts business one of the top three in the world.

It was another very strong quarter for Pantheon uh alongside positive contributions from EIG and Abacus and I think importantly that really demonstrates the diversity of our affiliate offerings across a variety of different areas, private Market Solutions, credit private Equity, Real Estate infrastructure where our Affiliates are real leaders in these specialized strategies in the market.

It has a pretty significant tax aware wealth business.

That has a different dynamic than than just its overall institutional liquid alts business and then it has a 40 act long only business as well because of its excellent performance at seeing inflows in each of these areas.

Liquid alternatives had another record quarter for us, with $14 billion in net inflows. As you referenced in your question, this was driven primarily by solutions for the wealth channel focused on after-tax returns at AQR. Importantly, we are also seeing positive contributions from a number of our liquid alternative affiliates; we're experiencing real breadth in that area as well.

And so I think.

We would be remiss without sort of stating the obvious which is a very big diverse business with lots of different strategies and lots of different opportunities within it.

This is now the fifth consecutive quarter where we've seen positive flows in liquid alternatives, and over that time period we've seen $38 billion in total net inflows.

I'll highlight though as I did last quarter sort of a paradigm shift that's occurring in the wealth channel and <unk>.

<unk> is leading our leading position in this paradigm shift.

The basic strategy is to harvest losses, they've been around for decades, but AQR. They brought an additional set of tools and capabilities to it.

Uh, equities, we continue to see headwinds, and that's in line with the overall industry. You saw that this quarter with about $9 billion in outflows. That said, it's been another good year for beta, and beta continues to support AUM levels overall. We're also seeing some pockets of strength; Jay mentioned earlier, Artemis River Road. So there are some real bright spots that we're excited about there also.

Unlock the power of investing for after tax outcomes with the use of liquid alternatives.

Specifically using long short investing techniques either to track market data.

So when you put all those things together, kind of back into that initial framework, there is better alignment with overall client demand trends as we continue to shift our business and make continued investments in new affiliates.

Or they have a goal of absolute return and that has generated superior after tax outcomes and that's what's leading to their cigna.

Significant flows.

The shift in focus by the after tax outcomes from their historical convention of evaluating on pre tax returns. We think this is just in the very early innings.

Together with our confidence, in our ability to continue and and maybe even enhance and accelerate the impact of these growth drivers going forward, we feel like we're in a really strong position from an overall franchise perspective in terms of forward organic growth opportunities.

So the AQR has quite an opportunity ahead of them.

As you know they have been an innovator in liquid alternatives for more than 20 years now their ability to bring new strategies and products to the market as one of the best in the industries.

<unk> been building this.

This tax aware business for some time.

David developed an entire suite of products inside of separate accounts limited partnerships and now mutual funds there.

Their strategies generate.

For us management fees and many of them have the potential for performance fees.

I've said in my prepared remarks, AQR has the potential to increase their fee rates here over over some period of time as their flows mix changes. They also have an opportunity to increase their margins and we feel that in our.

And Rick, let me um, address aqr specifically, um, incrementally, it has been very helpful to our flow profile, but maybe I'll highlight a few key attributes about that. Business is a very diverse business, um, and I the way I describe it is, it's a liquid alts business. Uh, 1 of the top 3 in the world, um, it has a pretty significant tax aware wealth business. Um, that has a, a different Dynamic than than just its overall, uh, institutional liquid alts business. And then it has a 40 AC long only business as well because of its excellent performance. It's seeing inflows in each of these areas. Um, and so, I think

EBITDA contribution that David mentioned earlier.

Most of this background on the prior call.

I thought I might just kind of update you bringing forward.

On our thoughts today.

So we see AQR is having a first mover advantage.

We we would be remiss without, you know, sort of stating the obvious, which is a very big diverse business with lots of different strategies and lots of different opportunities within it. Um, maybe I'll highlight though, um, as I did last quarter, sort of a paradigm shift, that's occurring in the wealth Channel. Um, and aqr is leading, or is a, has a leading position in this Paradigm Shift? Um,

It obviously has a differentiated culture.

In an operating environment that is advantageous compared to most competitors.

On the first mover advantage it takes time to get on platforms to penetrate the largest <unk> in the country to integrate into systems at the wire houses.

You know, the basic strategies to harvest losses have been around for decades. Um, but now they’ve brought an additional set of tools and capabilities to it. They’ve kind of unlocked the power of investing for after-tax outcomes with the use of liquid alternatives.

AQR has a more than two year head start.

Specifically, using long/short investing techniques, either to track market data.

Now, finishing the onboarding.

Just now with several of the largest wealth platforms. So they haven't even gotten all of the parts of the market where they could distribute their product so.

So we do expect continued momentum from AQR in this area, but I would be remiss, if I didn't comment on the institutional business again with a great performance.

They have a very nice pipeline building.

On the liquid alternative side.

And through the lens of AQR were seeing increased interest in liquid alternatives more broadly on the institutional side.

So maybe the last thing I'll say about AQR is that their assets have grown from approximately 100 billion at the beginning of 2024 to 166 billion.

As of September 30th and so you can see there is quite a bit of growth in most of that came from organic flows and.

Or they have a goal of absolute return and that has generated Superior after tax outcomes and that's what's leading to their, um, significant, um flows. Um, you know, the the shift in focus by raas to after tax outcomes from their historical Convention of evaluating on pre-tax returns. You know, we think this is just in the very early Innings. Um, so the aqr has quite an opportunity ahead of them. Um, as you know, they've been an innovator in liquid alternatives for more than 20 years now. Um, their ability to bring new strategies and products to the market is 1 of the best in the industries. Um, they've been building, um this this uh tax aware business for some time. Um they've developed an entire Suite of products inside of separate accounts limited Partnerships and now mutual funds.

Thank you for your question appreciate it.

Thank you ladies and gentlemen, this concludes our Q&A session and we will conclude our call today. We thank you for your interest in participation you may now disconnect your lines.

Um, their strategies generate, um, for us my management fees, and many of them have the potential for performance fees. Um, as I've said in my prepared remarks, AQR has the potential to increase their fee rates here over some period of time as their flows mix changes. Um, they also have an opportunity to increase their margins and we.

I feel that in our EBA dog contribution that we mentioned earlier. I gave most of this background on the prior call. Um, so I thought I might just kind of update you and bring you forward, um, on our thoughts today. Um,

So, you know, we see a QRS, having a first-mover advantage. Um, it obviously has a differentiated culture.

Uh and an operating environment that is um, advantageous compared to most competitors. Um, you know, on the first mover Advantage, it takes time to get on platforms to penetrate the largest raas in the country to integrate into systems that the wire houses.

AQR has a more than two-year head start. Um, they are now finishing the onboarding, um, just now with several of the largest wealth platforms. So, they haven't even gotten on all of the parts of the market where they could distribute their product. Uh, we do expect continued momentum from AQR in this area. But I would be remiss if I didn't comment on the institutional business. Again, with their great performance, um, they have a very nice pipeline building, um, on the liquid alternative side. Um, and, you know, through the lens of AQR, we're seeing increased interest in liquid alternatives more broadly on the institutional side.

So maybe the last thing I'll say about HR is that there are assets have grown from approximately 100 billion uh at the beginning of 2024 to 166 billion uh as of September 30th. Um and so you can see there's uh quite a bit of growth and most of that came from organic flows.

And thank you for your question, appreciate it.

Thank you, ladies and gentlemen. This concludes our Q&A session, and we will conclude our call today. We thank you for your interest in participation. You may now disconnect your line.