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Affiliated Managers Group Inc AMG

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Morningstar’s Analysis

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Economic Moat

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Capital Allocation

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AMG's Purchase of a Majority Stake in Abacus Capital Group Expands Its Real Estate Offerings

Greggory Warren, CFA Sector Strategist

Analyst Note

| Greggory Warren, CFA |

While we do not expect to alter our $173 per share fair value estimate for narrow-moat Affiliated Managers Group following news that the company has acquired a majority equity interest in Abacus Capital Group, a privately owned real estate investment manager with $2 billion in assets under management, it is nice to see AMG putting more capital to work in boutique asset managers. This deal follows on investments earlier this year in Boston Common Asset Management, a global equity manager (with around $4 billion in AUM) dedicated to ESG investing, and Parnassus Investments, another global equity manager (with an estimated $47 billion in managed assets) focused on ESG investing. For some perspective, AMG closed out June 2021 with $756 billion in AUM, comprised of U.S. equities (15% of total AUM), global/international equities (30%), emerging-market equities (8%), multi-asset and fixed income (17%), liquid alternatives (16%), and illiquid alternatives like real estate (14%).

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Company Profile

Business Description

Affiliated Managers Group offers investment strategies to investors through its network of affiliates. The firm typically buys a majority interest in small to midsize boutique asset managers, receiving a fixed percentage of revenue from these firms in return. Affiliates operate independently, with AMG providing strategic, operational, and technology support, as well as global distribution. At the end of June 2021, AMG's affiliate network--which includes firms like AQR Capital Management, BPEA and Pantheon in alternative assets and other products (which accounted for 30% of AUM), Artemis, Genesis, Harding Loevner, and Tweedy Browne in global and emerging-market equities (38%) and Frontier, River Road, and Yacktman in U.S. equities (15%)--had $755.7 billion in managed assets.

Contact
777 South Flagler Drive
West Palm Beach, FL, 33401
T +1 800 345-1100
Sector Financial Services
Industry Asset Management
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 3,900

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