Affiliated Managers Group, Inc.

Greetings and welcome to the AMG fourth quarter 2025 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 would now like to turn the call over to your host, Patricia Figueroa, 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 fourth quarter and full year 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 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 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, Chief Executive Officer, Tom Wojcik, President and Chief Operating Officer, and Deva Ritchie, Chief Financial Officer. With that, I'll turn the call over to Jay.

Thanks, Patricia, and good morning, everyone. AMG delivered outstanding results in 2025. one of the strongest years in our company's history. With record annual economic earnings per share and substantial organic growth, including record net inflows and alternative strategies, our results reflect the accelerating evolution of our business towards areas of secular demand, most notably in private markets and liquid alternatives. AMG generated full-year economic earnings per share of $26.05, an increase of 22% year over year, driven by our strong organic growth and the positive impact of our capital allocation strategy. Our affiliates generated approximately 29 billion in annual net client cash flows, the highest level since 2013, and representing an organic growth rate of 4%. As evidenced by our strong earnings growth and flow profile, our business momentum is accelerating. And given our confidence in our long-term prospects, in 2025, we repurchased approximately 700 million of our shares, or 11% of our shares outstanding. It was a landmark year for growth at AMG. Throughout 2025, across both organic growth and new affiliate investments, AMG added approximately $97 billion in alternative assets under management, representing an increase of 35% in our total alternative AUM. This increase includes $74 billion in net inflows generated by existing affiliates managing alternative strategies and $23 billion in additional alternative AUM from partnerships with new affiliates. As we have seen in recent years, our growing footprint in alternatives has fueled significant organic growth and accelerated earnings. With more than $1 billion in capital committed across five new investments, we deployed near record levels of capital and growth opportunities in 2025. We began the year with an investment in Northbridge, a private markets manager specializing in industrial logistics, followed by a partnership with Verition, a premier multi-strategy liquid alternatives firm. Next, we invested in Montefiore, a European private equity firm focused on the services sector, and then Qualitas Energy, a leading renewables-focused global infrastructure manager specializing in energy transition. And then later in the year, we announced a strategic collaboration with Brown Brothers Harriman to develop structured and alternative credit products for the U.S. wealth markets. In addition, we continue to invest our capital and resources in and alongside our affiliates, collaborating with our partner firms to develop new products for the U.S. wealth channel, including additional innovative alternative solutions across private markets and liquid alternatives. Each of our new affiliate partnerships reflects AMG's differentiated partnership approach, which magnifies our affiliates' long-term success through strategic engagement while preserving their independence. Our unique investment model continues to attract outstanding independent firms seeking a strategic partner, and our new investment pipeline remains strong. As further evidence, we just announced a new partnership with Highbrook. a private markets manager operating in the real estate sector that invests across the U.S. and Europe in high-growth areas, including logistics, data centers, and housing. We also announced an incremental minority investment in Guarda, an existing affiliate operated in Liquid Alternatives. This incremental investment reflects the strength of our partnerships. and supports GARDA's long-term objective of building an enduring independent firm. GARDA's outstanding multi-decade track record of performance and its leading position in the fast-growing area within liquid alternatives underpin our strong conviction in the firm's long-term prospects. Both investments are consistent with our strategy and are expected to be accretive to our earnings in 2026. In addition, In 2025, we collaborated with Peppertree, Comvest, and MDI on strategic transactions that created value for all stakeholders and resulted in liquidity events for AMG. Across these three transactions, AMG received more than $730 million in pre-tax distributions and sale proceeds, more than two and a half times our invested capital, and with an average IRR of more than 35%. We were pleased that AMG's strategic engagement ultimately resulted in an excellent outcome for all stakeholders, including AMG shareholders. The significant proceeds from these liquidity events highlights the underlying value of our affiliates and enhances our flexibility to execute our growth strategy. The growth investments we have strategically and deliberately made over the last several years have played a critical role in reshaping AMG's business profile. Today, our affiliates manage $373 billion in alternative AUM, which contributes approximately 60% of our EBITDA on a run rate basis, including sizable contributions from two of AMG's largest and longstanding affiliates, Pantheon and AQR. As you know, AQR continues to deliver excellent performance and capitalize on emerging secular trends, including in tax aware solutions in the wealth channel, which is driving significant organic growth and an increasing EBITDA contribution to AMG on an absolute and percentage basis. In addition, Pantheon has established itself as a leading secondaries manager across private equity, private credit, and infrastructure and also has a significant presence in the U.S. wealth channel. Beyond AQR and Pantheon, our affiliates managing alternative strategies delivered organic growth in 2025 and contributed to AMG's strong results in the year. As we continue to execute on our strategy, investing our capital in firms and initiatives aligned with long-term growth trends, we expect to further accelerate the evolution of our business towards a greater participation in alternatives, driving future growth and further differentiating AMG. Now, stepping back, over the past six years, we have fundamentally transformed AMGs. and built a strong foundation and business profile, which we believe will benefit shareholders for years to come. During this period, our business generated more than $4.5 billion in capital from operations and approximately $1.4 billion in after-tax proceeds from the sales of our interest and our affiliates, all of which, through our disciplined capital allocation strategy, we have reallocated to both high conviction growth investments and meaningful return of capital to shareholders, exemplifying our commitment to long-term value creation. In doing so, over this period, we have strategically evolved our business mix towards areas of secular growth, pivoting towards alternative strategies and increasing the contribution of these strategies from roughly one-third of our EBITDA to approximately 60% today. In addition, we have grown our alternative AUM by approximately 55%, and that's net of affiliate sales, primarily driven by a combination of net client inflows from existing affiliates and the addition of nine new affiliates operating across private markets and liquid alternatives. We also reduced our share count by more than 40%, further compounding our growth in economic earnings per share. Together, these strategic actions have resulted in exceptional shareholder returns, with AMG stock appreciating at a 23% compound annual growth rate over the past six years. Despite these transformational results, we believe we are still in the early innings of our growth story with much more opportunity ahead. Looking forward, we will continue to press our advantages, executing the same proven strategy with the same level of discipline that brought us here. This means investing in additional high-quality affiliates in areas of secular growth while also leaning further into product innovation and distribution expansion to enhance our affiliate success and drive organic growth. We expect to see ongoing growth from our existing affiliates operating in alternatives, most notably from AQR and Pantheon. With our unique partnership centric cash generative return focus model, we are well positioned to continue delivering long-term value. As we enter 2026, AMG's reputation, value proposition, and capital flexibility have never been stronger. A powerful combination for our firm and for our shareholders. With this durable foundation and our accelerating momentum, We are very excited about what we can accomplish over the next five years, and we are confident that the best is yet to come. We look forward to delivering even greater success for our affiliates, our clients, and our shareholders. Finally, I would like to take a moment to recognize Tom Wojcik for his meaningful contributions to AMG over the past seven years, and to thank him for being part of our executive team during a critical period for AMG. Tom has informed us that he is ready to take a next step in his career and will leave AMG to pursue other leadership opportunities. Tom joined AMG in 2019, distinguishing himself as our CFO and contributing more broadly to the organization in areas such as strategy and team development over the years. Today, we have a clear and effective strategy that is being executed by an outstanding leadership team that has even greater depth and breadth than we've ever had at AMG. With Tom's exceptional talent and experience, I have every confidence that he will be tremendously successful in whatever role he chooses next. And with that, I'll turn it over to Tom.