Bloomberg News

AMG Fourth-Quarter Profit Climbs 49% as Stock Rally Lifts Assets

February 04, 2014

Affiliated Managers Group Inc., (AMG:US) 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 is benefiting from an investor shift into equities and alternative-investment products. Both assets classes attracted deposits last year as money flowed out of bonds in response to higher interest rates.

“They are one of the best-positioned asset managers out there assuming the trend towards taking more risk continues,” Michael Kim, a New York-based analyst with Sandler O’Neill & Partners LP, said in a telephone interview.

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.

Share Performance

AMG reported earnings before the start of regular trading in New York. The shares fell 13 percent this year before today, compared with a decline of 11 percent for the 20-member Standard & Poor’s index of asset managers and custody banks.

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. (SSSFX:US) 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


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Companies Mentioned

  • AMG
    (Affiliated Managers Group Inc)
    • $199.73 USD
    • -5.74
    • -2.87%
  • SSSFX
    (AMG SouthernSun Small Cap Fund)
    • $30.46 USD
    • -0.12
    • -0.39%
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