Affiliated Managers Group (NYSE:AMG) Q4 2025 Earnings call February 12, 2026 08:30 AM ET Speaker6Greetings, 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, P ...

Nancy Daoud: The Changing Nature of Asset Allocation - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.---# Nancy Daoud: The Changing Nature of Asset Allocation## The Ameriprise private wealth advisor discusses the rise of alternative investmen ...

Core Viewpoint - Ares Management Corporation is experiencing significant growth in assets under management and fundraising, positioning itself strongly in the alternative investment sector, with a favorable price target set by Deutsche Bank indicating potential upside for investors [1][2][6]. Group 1: Financial Performance - Ares Management's assets under management (AUM) surpassed $622 billion, reflecting a 29% increase year over year [2][6]. - The company achieved a record $113 billion in fundraising, showcasing its ability to attract significant capital [2]. - The wealth management division saw AUM rise by 69% year over year to over $66 billion, driven by the acquisition of GCP [3][6]. - Ares Management reported a 20% year-over-year increase in its first-quarter 2026 common dividend, indicating robust financial health [4]. Group 2: Market Position and Stock Performance - Ares Management competes with major firms like Blackstone and KKR, highlighting its strong market position [1]. - Deutsche Bank set a price target of $155 for ARES, suggesting a potential upside of 27.18% from its current trading price of $121.87 [1][6]. - Despite a recent decrease of $15.35, or approximately -11.19%, ARES stock has fluctuated between a low of $119.47 and a high of $132.93 during the trading day [5].

Financial Data and Key Metrics Changes - Ares Management achieved a record $994 million in management fees for Q4 2025, totaling $3.7 billion for the full year, representing a 27% increase quarter-over-quarter and a 25% increase year-over-year [28] - Fee-related earnings (FRE) for the full year increased by 30% compared to the prior period, with a record FRE of $528 million in Q4, reflecting a 33% year-over-year growth [31] - Realized income for Q4 reached a record $589 million, with full-year realized income exceeding $1.8 billion, marking a 26% increase from 2024 [34] Business Line Data and Key Metrics Changes - The wealth management business saw AUM grow to over $66 billion, a 69% increase year-over-year, driven by strong performance across semi-liquid wealth products [7][22] - The real estate group raised more than $16 billion for the year, including over $7 billion in Q4, with significant commitments in various real estate strategies [18] - The secondaries group raised $12.9 billion for the full year, with AUM increasing by 45%, nearly doubling in size since the acquisition of Landmark [21] Market Data and Key Metrics Changes - Ares Management's total AUM reached over $622 billion, a 29% increase year-over-year, with $113 billion in total fundraising for 2025 [5] - The company reported a record $46 billion in deployment for Q4, with full-year gross deployment totaling $146 billion, a 37% increase over 2024 [6] - The private equity business reported organic portfolio company EBITDA growth of 13% for the last 12 months in its latest fund, ACOF Six [10] Company Strategy and Development Direction - Ares Management is focused on expanding its investment platform and geographic reach, with significant investments in new data systems and AI projects to enhance decision-making and operational efficiency [7][8] - The acquisition of GCP has positioned Ares as a global top three owner and operator of industrial real estate, contributing to the growth of its real estate and digital infrastructure offerings [7] - The company aims to leverage its diverse strategies across asset classes and geographies to capture growth opportunities, particularly in real assets and secondaries [68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving transaction environment and pent-up demand for private equity sponsors seeking liquidity solutions, supported by a large inventory of seasoned assets and an improving interest rate environment [12][13] - The company anticipates 2026 to be a significant year for realizing European-style performance fees, with expectations for substantial growth in fee-related performance revenues [28] - Management highlighted strong fundamentals across credit portfolios, with loan-to-value ratios near historical lows and improving interest coverage [34][43] Other Important Information - Ares Management declared a 20% year-over-year increase in its first quarter 2026 common dividend to $1.35 per share [3] - The company has a substantial dry powder of $156 billion, positioning it well for future investments [27] - Ares is well-prepared to navigate market challenges, including potential risks from AI disruptions, with a diversified portfolio and strong fundamentals [42][43] Q&A Session Summary Question: Impact of software AI disruption on deployment efforts - Management expressed confidence in their software investments, emphasizing the diversification and stability of their portfolio, and noted that the disruption would not significantly impact overall origination volumes [47][50] Question: Wealth channel performance and sentiment - Management reported strong flows in January and February, with broad-based demand across private credit and core infrastructure products, indicating resilience in the wealth channel despite some cyclicality [54][59] Question: Outlook for real assets and secondaries - Management highlighted ongoing growth in real estate and secondaries, with expectations for significant fundraising and deployment opportunities in these areas [64][71]

Company Overview - Vinci Compass Investments Ltd. is a leading alternative investments and global solutions provider in Latin America with nearly three decades of experience [1] - The company operates from eleven offices in Latin America and the US, managing a diverse range of investment segments including Private Equity, Credit, Real Estate, Infrastructure, Forestry, Equities, Global Investment Products & Solutions, and Corporate Advisory [1] Financial Results Announcement - The company will release its financial results for the fourth quarter and full year 2025 after market close on March 04, 2026 [1] - A conference call will be hosted via Zoom at 5:00 pm ET on the same day, with a replay available for those unable to attend the live broadcast [1] Assets Under Management - As of September 2025, Vinci Compass had R$316 billion in assets under management and advisory [1]

Financial Data and Key Metrics Changes - In 2025, the company achieved a revenue increase of 8% compared to 2024, with operating income and adjusted operating income rising by 9% and 12% respectively [4] - Assets under management (AUM) reached an all-time high of $180 billion, up nearly 12% from year-end 2024 [12] - The December 2025 quarter saw revenues of $336 million, marking an 11% increase from the previous quarter and a 13% increase year-over-year [12][16] - Adjusted operating income increased by 23% compared to both the prior quarter and the same quarter last year, with an adjusted operating margin of 40.2% [15] Business Line Data and Key Metrics Changes - The credit platform's AUM grew by 29% year-over-year to $17.9 billion, with net inflows totaling $2.8 billion [8] - The alternatives platform's AUM increased by 20% to $4 billion, driven by strong organic growth [8] - The equity platform experienced outflows of $15.6 billion, primarily from global opportunities and U.S. mid-cap growth strategies, attributed to short-term performance challenges [8] Market Data and Key Metrics Changes - 79% of AUM outperformed benchmarks over a 3-year period, 74% over 5 years, and 92% over 10 years, gross of fees [5] - The Emerging Markets Local Opportunity Strategy in credit generated a return of over 24%, outperforming its benchmark by 527 basis points [6] Company Strategy and Development Direction - The company is focused on expanding its multi-asset class platform while maintaining a high value-added investing philosophy [4] - The acquisition of Grandview Property Partners marks a strategic expansion into alternative investments and private real estate [9][10] - The company aims to leverage its institutional relationships to enhance Grandview's business and expand its investment capabilities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining and growing equity businesses despite recent outflows, emphasizing the need for compelling investment performance [8][9] - The company anticipates continued growth in credit and alternatives, with a focus on private credit and secondaries in private equity [28][46] - Management noted that the acquisition of Grandview is expected to be mildly accretive to earnings per share after the closing of its next flagship fund [19] Other Important Information - The board declared a quarterly dividend of $1.01 per share and a special year-end dividend of 57 cents, resulting in a total dividend of $3.87 per share for 2025, an 11% increase from 2024 [18] - The company ended the year with approximately $214 million in cash and a conservative leverage ratio of 0.4 times [17] Q&A Session Summary Question: Regarding Grandview's AUM and accretion guidance - Management explained that AUM was lower due to realizations on properties in Grandview Fund I, which is in the harvesting phase [24] - Fund III had about $150 million in committed assets, and the company is actively pursuing Fund IV, expecting a first close in mid-summer [25][26] Question: On M&A opportunities and market conditions - Management highlighted a focus on private credit and secondaries in private equity, with interest in idiosyncratic opportunities within equity [28] - The company is not exclusively focused on M&A but is open to opportunities that align with its investment philosophy [28] Question: On the international value strategy and recent outflows - Management noted that outflows were primarily due to institutional reductions and not indicative of underlying issues, as the team continues to deliver strong absolute returns [37][38] Question: Interest in non-US strategies and emerging markets - Management indicated a reemergence of emerging markets allocations and success in global franchises, with significant net flows from recent campaigns [41][42][43]

Core Insights - The founder of 26North has shifted his investment focus from private equity to alternative investments, including sports franchise ownership [1] - The founder provides a critical perspective on the current economic outlook and the recent appointment of the Fed chair [1] - An assessment of the private credit market is included, highlighting its current state and potential opportunities [1] Investment Mindset Evolution - The transition from private equity to alternative investments signifies a broader trend in investment strategies [1] - Sports franchise ownership is identified as a growing area of interest within alternative investments [1] Economic Outlook - The founder expresses concerns regarding the economic environment and critiques the policies of the newly appointed Fed chair [1] - Insights into how these economic factors may influence investment decisions are provided [1] Private Credit Market Assessment - The current state of the private credit market is analyzed, with emphasis on its growth and potential risks [1] - Opportunities within the private credit space are discussed, indicating a favorable outlook for certain investments [1]

Core Insights - The private equity industry is experiencing a shift, with an increase in exits but at lower valuations, indicating a recalibration of expectations in response to market pressures [2][4]. Group 1: Private Equity Exits - The number of global private equity exits rose by 5.4% last year, totaling 3,149 exits [2]. - However, the total value of these exits declined by 21.2% year over year, amounting to $412.1 billion [2]. Group 2: Market Dynamics - The private equity sector is under pressure to monetize aging assets, with many firms previously reluctant to mark down portfolio values, leading to a gap in buyer expectations [4]. - A backlog of tens of thousands of companies remains, resulting in lower cash returns for limited partners (LPs) and a subsequent hesitance to reinvest in private equity [5]. Group 3: Fundraising and Deal Activity - Fundraising for private equity declined by 11% in 2025, reaching $490.81 billion, marking the second consecutive annual slowdown [5]. - Although there was growth in U.S. private equity deal value in the first half of last year, the number of new deployments remained flat, indicating stagnation in overall deal activity [6]. Group 4: Performance of Larger Funds - Larger private equity funds, such as Blackstone, are seeing benefits in monetization, with Blackstone reporting $10.8 billion in realizations from exits in the fourth quarter, the highest quarterly total of the year [7][8]. - Blackstone's successful IPO of Medline, which raised over $7 billion, is noted as the largest private equity-backed IPO in the U.S., with the stock surging nearly 30% since its debut [9].

Core Viewpoint - BlackRock, Morgan Stanley, and Partners Group have collaborated to launch a new offering of separately managed accounts focused on alternative investments, providing advisors with a diversified option for their clients [1] Group 1: New Offering Details - The new separately managed accounts are designed around specific investment goals and include exposure to seven underlying private funds [1] - The offering encompasses various asset classes, including private equity, private credit, and real assets, catering to the growing demand for alternative investments [1]

Core Insights - P10, Inc. and Bonaccord Capital Partners announced a collaboration with CAIS to enhance access to GP stakes solutions for financial advisors [1][2] - The partnership aims to broaden the reach of P10's middle-market expertise and support financial advisors in incorporating GP stakes into client portfolios [2][3] Company Overview - P10, Inc. is a leading private markets solutions provider with over $40 billion in assets under management as of September 30, 2025, focusing on Private Equity, Private Credit, and Venture Capital in access-constrained strategies [4][5] - Bonaccord Capital Partners specializes in providing growth capital and strategic support to mid-market private markets sponsors across various sectors, including private equity and real estate [5] Industry Trends - There is a significant increase in demand for alternative investments among financial advisors, with a recent survey indicating that 90% of advisors are currently allocating to alternatives and 88% plan to increase their allocations in the next two years [2][3] - Financial advisors are increasingly interested in GP stakes as a means to enhance diversification and gain exposure to established managers, which were historically dominated by institutional investors [3] CAIS Platform - CAIS serves over 2,000 wealth management firms and 62,000 financial advisors, overseeing approximately $7.5 trillion in end-client assets [7] - The platform is recognized for its innovation and leadership in the alternative investment space, providing a comprehensive operating system for financial advisors and alternative asset managers [8]