Core Viewpoint - Affiliated Managers Group, Inc. (AMG) has agreed to sell its interest in Comvest Partners' private credit business to Manulife Financial Corporation for nearly $285 million in an all-cash transaction, expected to close in Q4 2025, subject to customary conditions [1][8]. Group 1: AMG's Strategic Move - Comvest is a prominent investment firm specializing in private equity and direct lending, with a 25-year history of providing capital to middle-market companies in North America [2]. - AMG's partnership with Comvest facilitated significant growth, increasing Comvest's assets under management from $2 billion to $14 billion over five years [2][8]. - As part of the transaction, AMG will realize a substantial gain on its investment while retaining interests in certain existing private credit funds and its stake in Comvest's private equity business [3][8]. Group 2: AMG's Capital Reallocation Strategy - AMG's CEO, Jay C. Horgen, expressed satisfaction with the partnership's positive impact on Comvest's growth and stakeholder outcomes [4]. - This divestiture aligns with AMG's strategy to reallocate capital into more lucrative investment opportunities, following the recent sale of its stake in Peppertree Capital Management for $240 million [4]. - In 2022, AMG also divested stakes in Veritable LP and Baring Private Equity Asia, indicating a trend of strategic divestitures [4]. Group 3: AMG's Market Performance - Over the past six months, AMG shares have increased by 21.6%, contrasting with a 0.7% decline in the industry [5]. - Currently, AMG holds a Zacks Rank of 3 (Hold), reflecting its market position [6].

Market Outperformance & Capital Reallocation - Emerging markets and non-dollar European equities/fixed income are expected to continue outperforming in the second half of the year [2] - Capital is being reallocated away from the US towards regions with larger fiscal stimulus, driving growth in European and emerging market economies [2] - This capital reallocation is pushing emerging market equities to record elevated levels [3] - Diversification away from the US into the rest of the world presents a target-rich environment for investment [6] - Low ownership in non-US markets creates great opportunities for investors allocating capital [7] Monetary Policy & Disinflation - A weaker US dollar is creating a disinflationary backdrop for the rest of the world [4][5] - Emerging market central banks are cutting rates more aggressively, with the percentage of countries cutting rates jumping from 28% to over 60% in one month [4][5] - The industry anticipates a multiyear, virtuous cycle where central bankers can lower rates and focus on growth [4] Trade & Geopolitics - Trade negotiations and the tariff backdrop are central to emerging markets investment performance [8][9] - The US administration's decisions regarding trade will send an important message to the rest of the world [9] - The US has effectively weaponized its current account and capital account, discouraging inward investment [10]