AMG - Affiliated Managers Group: Growing EPS And Fed Pivot Beneficiary

2024-07-29 16:01:56 ET

Summary

• AMG manages $701 billion in assets, primarily in Alternatives and Equities.
• AMG has marginally underperformed the iShares U.S. Financials ETF in 2024.
• The company reported positive net client flows in Q2 2024 and Economic EPS growth of 5% Y/Y boosted by aggressive share repurchases.
• The investment case rests on an attractive valuation, stable fixed-rate long-term financing, and a tailwind for alternative managers from lower Fed rates.
• Key risks to mention are increased competition from banks, potential delay in Fed rate cuts, and a balance sheet dominated by intangibles.

Introduction

Affiliated Managers Group, Inc. ( AMG ) has marginally underperformed the iShares U.S. Financials ETF ( IYF ) so far in 2024, delivering a ~17% total return against the 19% gain in the benchmark ETF:

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