Affiliated Managers Group, Inc.

Greetings and welcome to the AMG first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Anjali Agarwal, Head of Investor Relations for AMG. Thank you. You may begin.

Good morning, and thank you for joining us today to discuss AMG's results for the first quarter of 2021. 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 AMG assumes no obligation to update these statements. 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 the reconciliation of any non-GAAP financial measures, including any earnings guidance announced on this call. In addition, we posted an updated investor presentation to our website this morning and encourage investors to consult our site regularly for updated information. With us today to discuss the company's results for the quarter are Jay Horgan, President and Chief Executive Officer, and Tom Lojic, Chief Financial Officer. With that, I'll turn the call over to Jay.

Thanks, Anjali, and good morning, everyone. AMG entered 2021 in a position of strength. and our first quarter results reflect the momentum that continues to build in our business. Economic earnings per share of $4.28 grew 35% year over year and represented the strongest first quarter in our history, primarily driven by EBITDA growth of 23% and ongoing share repurchase activity. Building on our strong start to the year and looking ahead to the second quarter and full year of 2021, We expect the growth in our business to accelerate, give an excellent affiliate investment performance, the ongoing contributions of the strategic actions we have taken, and most significantly, heightened activity in new investments. With our increasing free cash flow and available capital and a favorable environment to establish new partnerships, we have a tremendous opportunity to invest in high-quality firms operating in areas of secular growth such as our recent investments in OCP Asia and Boston Common. The disciplined execution of our strategy, including the simultaneous return of excess capital to our shareholders, will further compound our earnings and free cash flow generation, and we are confident in our ability to create substantial shareholder value over time. Over the past year, our affiliates built on their long-term performance records, once again demonstrating their ability to distinguish themselves during periods of volatility. Excellent investment performance during this period generated meaningful first quarter performance fees, increased asset levels, and enhanced organic growth. As performance-driven improvements in organic growth trends continue across our business, we are also seeing investors re-risking portfolios as economies reopen worldwide. Investors are increasing allocations to high-quality active managers, especially independent firms, to help navigate market volatility, protect capital, and generate superior outcomes. In addition to ongoing growth and flows in private markets, especially fixed income and wealth management, AMG is benefiting from growing demand for fundamental equities and liquid alternatives, particularly in our top-performing value-oriented affiliates and in our active ESG strategies. As these trends continue and as we add new affiliates operating in secular demand areas, we expect ongoing improvement in our organic flow profiles. Further supporting this improving profile, AMG-led distribution efforts are adding incremental growth and momentum to our affiliates' new business activity. Nearly 20 years ago, we began developing AMG-led distribution resources to complement the existing sales efforts of our affiliates. And over the past two years, we strategically evolved our platform for the benefit of our affiliate partners and their clients focusing on the largest growth opportunities while also better aligning our affiliates' in-demand products with the success of AMG distribution efforts. As part of this overall evolution, during the quarter, we announced a strategic decision to move to an affiliate-centric model across U.S. wealth distribution, consistent with our institutional distribution strategies. This change provides a more competitively priced, higher quality, and more differentiated set of strategies exclusively managed by AMG affiliates. With this repositioning now behind us, our distribution platforms are even more strategically compelling to both existing and new affiliates, as well as their clients, given the increased focus, resources, and alignments. And as part of our strategy, we will continue to evolve our AMG-led distribution resources to reflect the composition and needs of our affiliates and their clients over time. AMG's enduring business model of providing a permanent solution for independent firms enables us to be a true strategic partner to our affiliates, distinct from any institutional competitor in the market today. Our partnership model is simple. We enhance our affiliates' ability to grow across generations while preserving investment independence and operating autonomy. We provide a uniquely broad set of partnership solutions to independent firms, having expanded our solution set over the years beyond succession planning to include minority investments, growth capital, and centralized distribution services on behalf of our affiliates. As a result of this evolution, and given our strong competitive position, AMG's partnership approach today is even more attractive to a broader array of independent firms around the world. Our new investment strategy is generating both growth and return. Not only does our partnership approach self-select for growing firms, Our discipline in structuring new investments generate meaningful returns for our shareholders across a range of business outcomes. Over the past two years, we have meaningfully stepped up our focus in resources devoted to identifying and executing new partnerships with independent firms. Additionally, we have concentrated our prospecting efforts on independent firms operating in areas of strong secular growth and client demand, including private markets, fixed income alternatives, the Asia Pacific region, ESG, and multi-asset solutions. With this enhanced focus, we expect new investments to be a significant source of forward earnings growth. As we continue to execute on our growing opportunity set over the course of 2021, each new affiliate will add immediately to our earnings. The full impact of AMG's earnings power and growth profile will only fully materialize starting in 2022. Evidencing the momentum we are seeing in new investments, last week we announced our second partnership this year. We are pleased to welcome OCP Asia and its partners to AMG. recognized as a leader in Asian private credit, OCP Asia has consistently generated excellent returns for its clients. The cultural alignment between AMG and OCP Asia is very strong, and the key principles of OCP were attracted to our partnership approach and the opportunity to expand and extend their client reach through our global distribution capabilities. This new partnership enhances and diversifies our exposure both to private markets and to Asia, where we see increasing allocations. We are excited to partner with Stu, Teal, Dan, and the broader team as they continue to provide differentiated investment returns and capitalize on their growth initiatives. Finally, as I said last quarter, the contributions from the strategic and growth investments that we have made over the past two years are not only materializing in our results today, but will also more fully manifest in the coming quarters. Since the beginning of 2019, we have invested in six new affiliates. We've invested in the growth of our existing affiliates. We have broadened our partnership solution set. We've enhanced our strategic capabilities. We have realigned our distribution platform We have significantly enhanced our capital position, and we repurchased nearly 20% of our shares outstanding. We have achieved all of this while reinvigorating AMG's entrepreneurial culture and reestablishing an ownership mindset across the organization. Looking ahead, we have significant momentum across our business, and we see AMG's growth accelerating. With strong affiliate investment performance and improving organic growth profile and increasing opportunities to invest in excellent partner-owned firms, we are confident in our ability to execute on our substantial opportunity set and continue to create shareholder value. And with that, I'll turn it over to Tom to review the details of the quarter.