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Introduction & Market Context
Affiliated Managers Group Inc (NYSE:AMG) presented its Q3 2025 investor overview on November 3, 2025, revealing a strategic focus on alternative investments despite missing earnings expectations for the quarter. The company reported Q3 EPS of $4.82, falling short of the $5.87 forecast, and revenue of $516.4 million against expectations of $544.64 million. Despite these misses, AMG’s stock showed resilience, rising 5.19% in pre-market trading to $242.76, as investors responded positively to the company’s strategic direction and growth outlook.
With approximately $804 billion in assets under management (AUM) as of September 30, 2025, AMG continues to position itself as a strategic partner to approximately 40 independent investment firms across various asset classes. The company’s 30-year history of partnerships has evolved toward a pronounced focus on alternative investments, which now represent a majority of its earnings contribution.
Strategic Focus on Alternatives
AMG’s presentation highlighted its strategic expansion into alternative asset classes, which has become central to its growth strategy. The company has diversified its exposure across Private Markets (~$148B AUM), Liquid Alternatives (~$205B AUM), and Differentiated Long-Only strategies (~$451B AUM).
As shown in the following chart detailing AMG’s affiliate structure across asset classes:
This strategic pivot is further reflected in AMG’s EBITDA contribution breakdown, where alternatives now account for 52% of total EBITDA, split between Private Markets (23%) and Liquid Alternatives (29%). The remaining 48% comes from Differentiated Long-Only strategies, primarily in Multi-Asset and Fixed Income (41%) and Equities (7%).
The company’s diverse affiliate group operates across areas of high growth and secular demand, as illustrated in this EBITDA contribution breakdown:
During the earnings call, CEO Jay Horgen emphasized this strategic focus, noting that "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." This statement aligns with the presentation’s emphasis on alternatives as a growth driver, though the earnings call figure of 55% represents a slight increase from the 52% cited in the presentation materials.
Investment Performance and Competitive Advantages
AMG highlighted strong long-term investment performance across its affiliate network, particularly in alternative strategies. The presentation showcased competitive advantages in generating alpha, with impressive performance metrics across different asset classes and time horizons.
The following chart demonstrates AMG’s investment performance across different asset classes:
Notably, in Liquid Alternatives, which represent 29% of AMG’s LTM EBITDA, 91% of AUM outperformed benchmarks over a 3-year period, 99% over 5 years, and 89% over 10 years. Private Markets, contributing 23% of EBITDA, showed 86% of IRR outperforming in the latest vintage and 84% in the last three vintages.
The company’s performance fee earnings have provided a consistent source of revenue stability, with a five-year average of $157 million in annual net performance fees. This diversified revenue stream has generated $1.2 billion in cumulative performance fees over the past decade.
As shown in the following chart of performance fee stability:
Financial Performance and Capital Allocation
AMG’s financial results show a trajectory of steady growth in adjusted EBITDA and more substantial growth in Economic Earnings Per Share. From 2020 to 2024, adjusted EBITDA increased from $795 million to $973 million, representing a 5% CAGR, while Economic EPS grew from $13.30 to $21.36, a 13% CAGR.
For Q3 2025 specifically, the company reported adjusted EBITDA of $251 million, reflecting 17% year-over-year growth, and Economic EPS of $6.10, marking a 27% increase from the previous year, according to the earnings report. This growth rate exceeds the long-term CAGR from 2020-2024, suggesting acceleration in AMG’s earnings growth.
The company has maintained a disciplined capital allocation strategy, balancing investments in growth opportunities with significant capital returns to shareholders. Over the past five years, AMG has returned approximately $2.8 billion in excess capital to shareholders, primarily through share repurchases. This has resulted in a 37% reduction in share count from approximately 46 million shares in September 2020 to 29 million shares in September 2025.
The company emphasized its financial flexibility, noting approximately $2 billion in capital available for deployment into growth investments and shareholder returns. This capital position provides AMG with significant resources to pursue its strategic objectives while maintaining its commitment to returning excess capital to shareholders.
Forward-Looking Statements
Looking ahead, AMG provided optimistic guidance for Q4 2025, with expected adjusted EBITDA ranging from $325 million to $370 million and economic EPS between $8.10 and $9.26. The company remains focused on expanding its alternatives platform, particularly within the U.S. wealth channel.
The presentation outlined AMG’s strategy for compounding earnings growth at what it describes as an "industry-leading rate," targeting mid-teens annualized long-term earnings growth. This aligns with the 27% year-over-year Economic EPS growth reported in Q3 2025, suggesting the company is currently exceeding its long-term targets.
Key growth drivers identified include:
- Affiliate performance through diversified market exposures and alpha generation
- Organic growth from net client cash flows in secular growth areas
- Affiliate investments to enhance earnings and organic growth
- Share repurchases to return excess capital to shareholders
AMG’s partnership approach with independent investment firms remains central to its business model, as illustrated in this strategic overview:
Despite the earnings miss in Q3 2025, the market’s positive reaction suggests investor confidence in AMG’s strategic direction and growth prospects. The stock is trading near its 52-week high of $251.39, indicating strong market sentiment as the company continues its strategic pivot toward alternative investments.
Full presentation:
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