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AMG Fourth-Quarter Profit Climbs 49% on Equities Rally

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Feb. 4 (Bloomberg) -- Affiliated Managers Group Inc., the company that owns stakes in more than two dozen money managers, said fourth-quarter profit rose 49 percent as last year’s stock-market rally boosted assets.

Economic net income, which excludes some taxes and expenses, climbed to $202.9 million, or $3.66 a share, in the three months ended Dec. 31, compared with $136.5 million or $2.55 per share, a year earlier, the Beverly, Massachusetts-based firm said today in a statement. Analysts had expected adjusted earnings of $3.10 a share, according to the average of nine estimates in a Bloomberg survey.

AMG, led by Chief Executive Officer Sean Healey, owns a collection of boutique money managers specializing in stocks, hedge funds and private equity. The firm, whose affiliates managed $544 billion as of Dec. 31, is benefiting from an investor shift into equities and alternative-investment products. AMG attracted $5.5 billion in client money during the fourth quarter, compared with $10.1 billion in the prior three months.

Investor deposits reflect “positive flows in both the mutual fund and institutional channel and while lumpy in nature, down from recent levels,” Daniel Fannon, a San Francisco-based analyst at Jefferies & Co., wrote in a note to clients today.

AMG gained 3.1 percent to close at $193.58 in New York. The shares fell 11 percent this year, compared with a decline of 9.3 percent for the 20-member Standard & Poor’s index of asset managers and custody banks.

GAAP Results

Investors added $161 billion to stock funds last year, while withdrawing $83.4 billion from bond funds, according to the Investment Co. Institute, a Washington-based trade group. Hedge funds won deposits of $71.9 billion, according to eVestment, a data firm based in Atlanta.

The MSCI All Country World Index rose 24 percent last year, including reinvested dividends.

AMG’s economic net income is a measure that doesn’t conform to generally accepted accounting principles, or GAAP. Under those rules, net income for the quarter was $158.2 million, or $2.79 a share, compared with $75 million, or $1.40 a share, a year earlier.

AMG buys stakes in money-management firms and provides them with distribution and back-office help. The owners of the firms retain a stake in the business and autonomy in managing money.

AMG in December agreed to buy a majority interest in SouthernSun Asset Management LLC, a Memphis, Tennessee-based firm that runs the $$779 million SouthernSun Small Cap Fund. The fund beat 98 percent of peers, over the past five years, according to data compiled by Bloomberg.

To contact the reporter on this story: Charles Stein in Boston at cstein4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net