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Money Management

AMG assets decline for quarter, year; CFO takes on president’s role

Jay C. Horgen

Affiliated Managers Group on Monday reported $736 billion in assets under management as of Dec. 31, down 11.3% from Sept. 30 and down 12% from Dec. 31, 2017.

Fourth-quarter net outflows were $15.8 billion, according to AMG's quarterly earnings statement, vs. net inflows of $900 million in the third quarter and net inflows of $1 billion in the fourth quarter of 2017.

Institutional net outflows during the fourth quarter were $5.6 billion, while net outflows from mutual funds were $8.8 billion. Net outflows from high-net-worth clients were $1.4 billion.

On Monday, AMG also expanded the duties of its chief financial officer, Jay C. Horgen, appointing him president effective immediately, the firm announced in a news release. With the appointment, CEO Nathaniel Dalton relinquished his duties as president to Mr. Horgen, who joined AMG 12 years ago, according to the news release.

In his expanded role, Mr. Horgen will work closely with Hugh P.B. Cutler, executive vice president, head of global distribution, to execute AMG's growth strategy across its distribution platforms, the news release said. Mr. Horgen, who will retain the CFO title, will continue to report to Mr. Dalton.

"Against the backdrop of significant declines across most asset classes for both the fourth quarter and full-year 2018, AMG generated economic earnings per share of $3.53 for the quarter, and $14.50 for the year," Mr. Dalton said in a separate news release that accompanied the earnings materials.

"Earnings results for the fourth quarter reflected lower performance fees, negative markets and one-time items," Mr. Dalton added. "While industrywide risk aversion as well as anticipated seasonal redemptions affected our net client cash flows for the quarter, we see meaningfully improving flow results already in 2019. Heightened market volatility continues to provide favorable conditions for the best active managers to distinguish themselves, and with a diverse array of independently managed, distinctive return streams, our affiliates are well-positioned to benefit."

Overall, alternatives saw net outflows of $9.5 billion in the fourth quarter, compared with net inflows of $4.5 billion in the third quarter and net inflows of $1.1 billion in the fourth quarter of 2017.

Global and U.S. equities saw net outflows of $3 billion and $3.9 billion, respectively, in the fourth quarter. In comparison, global equities net outflows in the third quarter were $2 billion vs. net inflows of $200 million in the fourth quarter of 2017. Within U.S. equities, net outflows were $3.9 billion in the fourth quarter, while third-quarter net outflows were $1.7 billion. In the fourth quarter of 2017, U.S. equities had net outflows of $1.6 billion.

Multiasset and other strategies were the only asset class segment at AMG to see net inflows in the fourth quarter. These strategies had net inflows of $600 million during the quarter, compared with net inflows of $100 million in the previous quarter and net inflows of $1.3 billion in the year-earlier quarter.

Institutional AUM totaled $432.9 billion as of Dec. 31, down 10.3% from three month earlier and down 11.4% from a year earlier.

By asset class, alternatives had $293.5 billion in AUM; global equities, $243.8 billion; multiasset and other strategies, a combined $101.1 billion; and U.S. equities, $97.6 billion.

Fourth-quarter revenue was $564.4 million, down 6.1% from the third quarter and down 6.6% from the fourth quarter of 2017.

AMG reported a net loss of $151.3 million in the fourth quarter, in comparison with net income of $124.9 million in the third quarter. During the fourth quarter of 2017, AMG reported net income of $315.4 million.