Greetings and welcome to the AMG First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Patricia Figueroa, Head of Investor Relations. Thank you. Please go ahead.

Good morning, and thank you for joining us today to discuss AMG's results for the first quarter of 2024. Before we begin, I'd like to remind you that during this call, we may make a number of forward-looking statements which could differ from our actual results materially, and AMG assumes no obligation to update these statements. A replay of today's call will be available on the investor relations section of our website, along with a copy of our earnings release and a reconciliation of any non-GAAP financial measures, including any earnings guidance announced on this call. In addition, this morning, we posted an updated investor presentation to our website and encourage investors to consult our site regularly for updated information. With us today to discuss the company's results for the quarter are Jay Horgen, President and Chief Executive Officer; Tom Wojcik, Chief Operating Officer; and Dava Ritchea, Chief Financial Officer. With that, I'll turn the call over to Jay.

Thanks, Patricia, and good morning, everyone. AMG delivered strong results in the first quarter of 2024, with $260 million in EBITDA, driven by continued momentum across both our private markets and liquid alternative strategies. Together with the positive impact of our disciplined capital allocation, we generated economic earnings per share of $5.37, representing a 28% growth rate year-over-year. During the quarter, our ongoing collaboration with affiliates resulted in a number of exciting developments, including new product launches and continued strength in private markets fundraising, which position our affiliates for long-term success and accelerate AMG's growing exposure to alternatives, both private markets and liquid alternatives. Our value proposition for independent partner-owned firms continues to resonate with prospective affiliates, given our proven partnership model and our ability to strategically magnify their competitive advantages while also preserving their independence. During the quarter, we advanced several attractive new investment opportunities. With our increased financial flexibility, we have a significant opportunity to invest our capital in new and existing affiliates to accelerate AMG's business mix evolution and our long-term growth. In April, we evolved AMG's leadership team, further aligning our talent with our growth prospects by expanding roles for key executives to capitalize on our momentum and capital formation and affiliate engagement, and by recruiting new leaders with experience in our focus areas of private markets and liquid alternatives. As a strategic partner, AMG engages with our independent affiliates to enhance their long-term success, including by offering seed and growth capital, business and product development, institutional and wealth distribution, and succession planning expertise. This distinctive approach enables affiliates to build on existing strengths, as illustrated by the success of two of our alternative affiliates, Pantheon and Systematica. In March, supported by our long-term engagement, Pantheon announced its management succession plan. Kathryn Leaf will become Chief Executive Officer, succeeding Paul Ward, who will become Executive Chairman. Having built Pantheon's highly successful infrastructure business and given her extensive experience as a private markets investor, Kathryn is well positioned to lead the next generation of executives at Pantheon and the ongoing evolution of their business. In addition, AMG has collaborated closely with Pantheon on its growth opportunities over the years, investing our capital and resources to develop and distribute new Pantheon strategies and products to meet evolving client needs. Together, we successfully launched one of the first evergreen funds in the private equity space, the AMG Pantheon Fund, which is now one of the largest and most established private markets products in the U.S. wealth channel with more than $3 billion in assets under management. Building on that success, we further supported Pantheon's strategic growth by seeding a new private equity fund for the non-U.S. wealth market and partnering to launch, seed, and distribute a first-of-its-kind private credit secondaries integral fund. Since AMG's investment 14 years ago, which reestablished Pantheon as an independent partner-owned firm, its asset center management have grown from approximately $25 billion to more than $65 billion. The combination of Pantheon Partners' entrepreneurial spirit with AMG's strategic engagement catalyzed the firm's transformation from a private equity fund-of-funds business to a leading solutions provider in private markets across private equity, infrastructure, credit, and real estate to both institutional and wealth clients globally. Also in 2024, in partnership with Systematica, one of the industry's leading independent technology-driven investment managers, we launched and seeded and will distribute a new trend-following fund expanding Systematica's reach into the U.S. wealth market. The firm is led by Leda Braga, whose decades of experience as an innovator in quantitative investing has enabled Systematica to deliver outstanding performance for clients. Similar to Pantheon, when we first invested in Systematica in partnership with Leda nearly a decade ago, we established it as an independent partner-owned firm. Our ongoing collaboration with Systematica's management team on strategic initiatives has resulted in substantial growth and business diversification, enhancing the firm's durability and its capabilities. Systematica has grown from a single product business at the time of our initial investment to a firm with $17 billion today, offering a suite of differentiated strategies and customized solutions across trend following, macro and relative value, and equity market neutral. Given Systematica's excellent long-term performance and the ongoing client demand for liquid alternatives, we are excited about the firm's prospects and the ability to continue to create significant value together. Pantheon's and Systematica's success demonstrate the power of AMG's unique partnership model to strategically engage with our affiliates to enhance their long-term prospects while also supporting their independence. More broadly, over the past several years, we have deliberately diversified our business through capital allocation. The combination of our investments in growth opportunities at existing affiliates and our investments in high-quality new affiliates operating in secular growth areas has reshaped AMG's business profile from one characterized largely by long-only strategies to one with a majority contribution from alternatives. Today, with half of our earnings coming from alternative strategies balanced across private markets and liquid alternatives, AMG's business profile is unique in our industry. Our diversified portfolio of high-quality independent partner-owned firms operating across private markets, liquid alternatives, and differentiated long-only strategies is a competitive advantage that both enhances our earning stability, given the complementary nature of these strategies, and supports our capacity to continue investing in the areas of highest growth and return. AMG's strategic expertise in collaborating with partner-owned firms has been honed over the course of three decades of successful partnerships and is increasingly attractive to independent firms seeking an engaged strategic partner. We have been one of the most active investors in independent asset managers over the past five years, having made 10 investments in new affiliates since 2019. Looking ahead, given our 30-year track record, our new investment origination capabilities, and our significant financial flexibility, we are well positioned to increase our level of new investment activity, particularly in alternatives. As always, we will remain disciplined in our capital allocation decisions as we continue to strategically evolve AMG, investing in growth while also returning excess capital to shareholders. Before I turn the call over to Tom, I want to take a moment to congratulate him on his new role as Chief Operating Officer in alignment with our increased focus on magnifying our affiliates' long-term success, especially through collaboration on capital formation initiatives. I also want to congratulate Kavita Padiyar on her new role as General Counsel, and welcome Dava Ritchea, our newly appointed Chief Financial Officer to the team. We have known Dava for many years, and given her direct experience with AMG's partnership model and her extensive experience in private markets and liquid alternatives, she is uniquely positioned to make valuable contributions to AMG. As evidenced by our ability to both develop outstanding talent within AMG and also attract excellent leaders to our team, AMG is thriving and well positioned for future growth. With that, I'll turn it over to Tom.

Thank you, Jay, and good morning, everyone. I'm proud to have served as AMG's Chief Financial Officer for the past five years and look forward to the contributions that Dava will make to AMG going forward. Having been a public company CFO in our industry, her experience and skill set are well suited for both the current and future state of our business. I am also excited for my new role and the opportunity to focus on driving organic growth through our product development and capital formation capabilities, as well as direct strategic engagement with many of our largest affiliates. Our first quarter results reflect the strong momentum we are experiencing across our business in each of private markets, liquid alternatives, and differentiated long-only strategies. In private markets, our affiliates and their excellent performance continued to drive strong fundraising and organic growth. In liquid alternatives, outstanding investment performance contributed to significant net performance fee earnings and continued business momentum. In differentiated long-only strategies, we benefited from rising asset levels and strong investment performance in the quarter. We also strengthened our balance sheet by extending the average duration of our debt to more than 20 years, innovated alongside our existing affiliates on several product development initiatives, and returned excess capital through share repurchases. Our actions reflect AMG's attractive opportunity set, and as we continue to execute our disciplined capital allocation strategy, we are confident in our ability to generate significant long-term shareholder value. Turning to our first quarter results, adjusted EBITDA of $260 million grew 20% year-over-year and included $40 million in net performance fee earnings, as well as $20 million in catch-up and other fees from private markets affiliates. Economic earnings per share of $5.37 grew 28% year-over-year and further benefited from the impact of share repurchases. This quarter, we are returning to our historical as-reported basis for net new flow reporting and will no longer report flows excluding certain quantitative strategies. As you may recall, we moved to the ex-quant paradigm several years ago, given the significant disconnect between the outflows we were seeing in certain quantitative strategies and the muted impact on our earnings, given the de minimis EBITDA contribution of those flows, and that gap has now sufficiently closed. In the first quarter, our net client cash outflows of $4 billion reflect strength in private markets fundraising, offset by fundamental equities. Turning to performance across our business. In alternatives, we again reported strong results with nearly $5 billion in net inflows in the quarter driven by private markets fundraising and strategies including private credit, infrastructure, private equity, and solutions mandates from both institutional and wealth clients. Our private markets affiliates continue to generate outstanding investment performance, and we expect the strong demand they are seeing from clients to continue. AMG's eight private markets affiliates manage approximately $120 billion in client assets and operate in areas of significant long-term demand, including infrastructure, private market solutions, private credit, and specialty areas like industrial decarbonization, life sciences, and multifamily real estate. In liquid alternatives, our affiliates continued to deliver excellent investment performance, particularly in quantitative strategies, and saw improved demand trends in the quarter. Given our affiliates' outstanding performance over the last three years across a range of products, a significant portion of our performance fee earnings eligible AUM is currently above high watermarks, and we are well positioned to capture growing demand trends and add diversification and stability to client portfolios. Within differentiated long-only strategies, we entered the second quarter with higher AUM levels and earnings power driven by market beta and investment performance despite net outflows of approximately $10 billion in equities. We generated inflows of $2 billion in multi-asset, driven by strength in wealth management and ongoing demand for fixed-income strategies. Now moving to second-quarter guidance. We expect adjusted EBITDA to be between $215 million and $220 million based on current AUM levels reflecting our market blend, which was down 1% quarter-to-date as of Friday, and including seasonally lower net performance fee earnings of between $10 million and $15 million. We expect second-quarter economic earnings per share in the range of $4.50 to $4.60, assuming an adjusted weighted average share count of 33.9 million shares for the quarter. We posted a guidance reconciliation slide to the investor relations section of our website where you can find detailed modeling items and given the activity in our balance sheet through a combination of debt repayment and issuance in the first quarter that I'll touch on in a moment, I wanted to highlight the interest expense line item of approximately $34 million in the second quarter. Finally, turning to the balance sheet and capital allocation. Our balance sheet continues to be in an excellent position. During the quarter, we issued $450 million of 40-year junior hybrid notes, which offset the repayment of $400 million in 10-year notes that came due in February, and the paydown of $50 million of our term loan. Taken together, these actions extended the average duration of our debt to more than 20 years and further enhanced our financial flexibility to execute our growth strategy. We continue to maintain significant liquidity to not only make growth investments in new and existing affiliates but also to continue to return excess capital to our shareholders. We repurchased approximately $150 million in shares in the first quarter, and for the full year 2024, we now expect to repurchase at least $450 million in shares subject to market conditions and new investment activity. In addition, we expect to invest up to $100 million in seed capital this year alongside our affiliates in new alternative products for the U.S. and global wealth markets, including approximately $20 million that was funded in the first quarter. We expect the balance of that capital to support the products Jay discussed at Pantheon and Systematica, as well as at Comvest Partners to bring non-sponsor-backed middle-market lending to wealth clients. As part of our capital formation capabilities, including product development, operational support, and comprehensive sales coverage, AMG's vertically integrated U.S. wealth platform enables affiliates to access the large and growing wealth market that is difficult, or in many cases impossible, for independent firms to enter on their own. We are excited about the opportunity to engage with our affiliates to bring a series of differentiated alternative offerings to the market by combining our multi-decade experience in U.S. wealth and our substantial balance sheet capital with our affiliates' investment expertise. Today, AMG's balance sheet has approximately $400 million in value across private market GP commitments, seed capital, and strategic investments. We expect that balance to grow over time as we continue to partner and launch products with new and existing affiliates, focusing on private market strategies. The momentum in our business is accelerating, and with the excellent performance of our affiliates managing alternative strategies, our diverse set of affiliates positioned for growth, our strong balance sheet, and significant liquidity, we are well positioned to invest in and alongside our affiliates in addition to making new affiliate investments in areas of secular growth to drive incremental shareholder value over time. Now we're happy to take your questions.

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. Today's first question is coming from Craig Siegenthaler of Bank of America. Please go ahead.

Hey, good morning, Jay and Tom. Hope you're doing well. And, Tom, just we wanted to offer you a big congrats on being named COO in the quarter too.

Thanks, Craig. Good morning, and thank you for that.

So our question is, we wanted to dive a little deeper into the positive inflection in institutional channel net flows. So we know there's always some lumpy wins and redemptions in this channel, but based on the composition of the flows in the quarter, the current pipeline, can you provide us your thoughts on the ability to maintain positive flows in this channel going forward?

Craig, let me answer the question on institutional and then maybe just broadly spend a few more minutes on the overall flow profile and importantly, how our strategy is really influencing that flow profile over time. On institutional, what you're seeing is really the strength of private markets. That's where we've seen extremely strong fundraising, not only in the prior quarter but over the course of the past several years. What came through this quarter was a combination of that continued strength in private markets, some stability in the liquid alternative side, and then some general improvement in terms of what we've seen in long-only. When you put that in the context of our overall flow profile and just kind of thinking about the business, the main point to take away is that our growth strategy is continuing to drive an evolution of our business mix more towards secular growth areas and especially alternatives with that focus on private markets. As we continue to execute against our strategy, we do expect to continue to enhance the long-term organic growth and earnings growth profile of the business. You've seen that really over the course of the last five years as alternatives have gone from less than a third to more than half of our business on an EBITDA basis. You saw it this quarter again, that sort of push and pull between the strength we're seeing in private markets and some of the headwinds on long-only, and that will be a big driver of where we land on institutional but also where we land overall. On the long-only side, particularly within fundamental active equities, there is some volatility and it sometimes is a bit hard to predict, but we did have a better quarter here in the first quarter. On private markets, we're continuing to benefit from the diversity and the depth of those affiliates. They're raising assets across a number of really well-positioned strategies, infrastructure, credit, private market solutions, specialty areas like industrial decarbonization and life sciences. These are really valuable flows for AMG given their fee rate, their long duration, and the potential to generate carried interest over time. On liquid alternatives, we're seeing excellent investment performance. We saw that drive very strong performance fee earnings here in the quarter, and we've seen that now over the course of the past several years. We're continuing to see more and more demand for liquid alternative strategies from clients as they think about the volatility of the markets today and what the course of the next decade may look like in terms of their portfolio construction. One other thing to mention is we had a very strong quarter in multi-asset and fixed income across our wealth management businesses as well as some of our fixed-income products. When you put it all together, a sizable portion of our business is both inflowing today and is very well positioned for the future. We feel confident in our ability to generate growth, and our strategy is going to continue to push us more over time as we evolve our business mix toward client demand trends and toward growing areas like alternatives.

Thank you. The next question is coming from Bill Katz of TD Cowen. Please go ahead.

Okay, thank you. Good morning, everybody. Tom and Dava, congratulations both. Dava, I look forward to working with you again. So just, Jay, maybe for you, it sounds like there's a lot of good things going on in terms of seed capital back into the business, a bunch of new funds coming to market in the wealth management section, and then sort of stepped up the buyback. How do we think about deal activity against the other uses of capital as we look ahead to 2024 and 2025? Thank you.

Good morning, Bill. Thank you for your question. Our strategy is focused on investing in areas that show the highest growth and returns in our industry. We plan to achieve this by investing in new affiliates and supporting our existing affiliates. Our aim is to provide seed capital to new affiliates and assist our current affiliates in distribution and accelerating their business plans. If we are unable to find investments that meet our required returns, we will return excess capital to shareholders, which has resulted in significant repurchases over time. Our primary focus remains on new investments, and we are seeing a healthy flow of new opportunities. Last year, we made two new investments and opted not to pursue several other opportunities. The investment pipeline is steady, and while it’s competitive, we are successfully navigating the market. We provide strategic support to our affiliates while respecting their independence, a combination that is distinct in the market. We continue to seek new affiliates in areas experiencing secular growth, and as we increase our investments in these growth areas, we expect our revenue mix to evolve. Looking back five years, our EBITDA contributions from alternatives have risen from one-third to over half, and we anticipate this trend to continue. Our current pipeline includes private market businesses and liquid alternatives. Recently, we have engaged with several new prospects and see strong opportunities for new investments to further evolve our business. We are actively investing alongside our affiliates. We have ramped up our efforts in seed capital, launching new products with Pantheon and Systematica, and are looking to expand our collaboration with Comvest, our credit direct lending business. These efforts aim to foster growth in the wealth channel through our private markets businesses. This is also why we appointed Tom as COO, as he will oversee our capital formation efforts. Our management’s actions indicate where we see strategic opportunities. We expect to deploy substantial capital into investments in both new and existing affiliates this year. With a strong balance sheet and significant liquidity, we are well positioned to return capital to shareholders, with more than $450 million in repurchases anticipated for the year. Thank you for your question, Bill.

Thank you. The next question is coming from Dan Fannon of Jefferies. Please go ahead.

Thanks. Good morning. So I wanted to follow up on liquid alternatives. It sounds like certainly improving trends, but maybe not in inflows yet. I'm so curious about the gross sales versus gross redemption trends within that bucket. And then, given your comments, Tom, about being above the high water mark for a large percentage of that AUM, how you're thinking about performance fees in the context of the remaining of this year versus maybe historical ranges.

Yes, so I'm going to have Tom take that question. Dan, thanks for your question. Maybe I'll just start by saying our liquid alternatives business across all the affiliates that operate, there are say, six or seven affiliates in that category. In the main, they are producing significant positive performance for us, which has led to the above-high water marks and has also led to rising asset levels, which does mean the potential for higher performance fees. I think we see more opportunities around the world, more clients noticing this unique return stream that is complementary to both private markets and to long-only strategies. So we're very constructive about the prospects. It has been, as you noted, a little slow in terms of uptake on significant positive flows, but honestly, it's been a pretty good period for liquid alternatives, if nothing else by performance alone. I would say that we are seeing good client activity. I'll let Tom give you a little more detail.

Yes, thanks for your question, Dan. I think Jay touched on a number of the key themes in his initial remarks here. If you look at what we've seen in liquid alternatives, there are really two pieces to the story: one is excellent overall investment performance. We're seeing that in several areas across the liquid alternatives affiliates in quantitative strategies, trend-following strategies, and relative value strategies. One of the core elements of why liquid alternatives are so valuable to AMG is the diversification and the fact that those businesses can perform in different environments, often with low or no correlation to equity markets. We're continuing to see these businesses perform really well for clients, and you're seeing that come through for us in the form of performance fee earnings, both here in the first quarter as well as over the course of the last several years. In terms of trends, as we talked about on the fourth quarter call, we did see some headwinds in liquid alternatives in the fourth quarter, so it was really nice to see that bounce back here in the first quarter. Overall, flows and liquid alternatives in the first quarter were roughly flat versus a fairly meaningful outflow number in the fourth quarter, so a pretty good improvement. When we think about the longer term, the real push-pull is these strategies have been outperforming in client portfolios. So for those who have an existing allocation to liquid alternatives, we have seen a bit of rebalancing over the last couple of years where strategies that have put up 10%, 20%, 30%, 40% positive returns have offset some of the volatility and headwinds that clients have seen either in their long-only books or when dealing with some of the denominator effect impacts in their private equity books. At the same time, there are a number of clients who don't have a large enough liquid alternative allocation in their portfolio. I think that's where a lot of the new client conversations have been particularly compelling. We're excited about that. We think there's a lot of opportunities for AMG, our affiliates, and their clients across all three of those buckets: investment performance, the performance fee earnings that that can drive, and ultimately populating and repopulating portfolios to drive organic growth in that category.

Yes, I'll just finish, Dan, by saying I think we're actually somewhat surprised that more institutional managers or allocators haven't noticed the alpha being generated, especially on the quant side with the CTAs and some of the quant managers' significant alpha, as well as in the relative value fixed income space and the multi-strategy space. Traditional long-short hedge funds, which we don't have much of, have not performed, but almost every other category has. The interesting thing that I would say is that people will notice, and we expect to bring some of those products to the wealth space. We really believe that allocations will grow, both in the RIA, single, and multifamily offices and, of course, the wirehouses. We look forward to that opportunity. If they continue to perform well, it'll help AMG's earnings and hopefully eventually get into the minds of allocators because they need these products in their portfolios as an offset to their private markets and long-only strategies.

Thank you. The next question is coming from Brian Bedell of Deutsche Bank. Please go ahead.

Oh, great. Thanks. Good morning for taking my question, and congrats, Tom, and also welcome, Dava. Just sticking with that theme in the alternatives, especially in the private markets fundraising, can you talk about your confidence that there is a sales number on the alternative side? You can see potentially secular growth in that quarter after quarter given the pipeline of new products that are coming in, the contribution from private markets, especially as you just talked about on the quant side with the demand from AQR versus its historical trend, and at the same time seeing less outflows from that. So, I guess, the overall question is, should we really be seeing that alternatives line as sort of a leading net flow indicator on a go-forward basis?

Thanks, Brian, for your question. I'll let Tom start.

Thanks, Brian. In a way, I think the story has been very consistent in the way that we're thinking about alternatives and in the results that we've put up in terms of alternative performance and flows, really now over the course of the last couple of years. In terms of our confidence in private markets on the sales side, there are a number of things driving that confidence, and they're core to the strategy that we're employing at AMG across the board. First, we continue to look to add affiliates to that group. We have eight private markets affiliates today managing $120 billion in AUM. We added two last year, and as Jay said in his answer to a prior question, that continues to be a real area of focus. That focus is linked to the success we’re having with our existing affiliates in helping them with product development, fundraising, and accessing the U.S. wealth channel with some of these limited liquidity products, as well as the opportunity to bring their flagship drawdown funds to the channel in a way that's extremely compelling given the sales resources we have. So if we think about what's happening overall in private markets, one is that we're attracting high-quality businesses, and two, once those businesses are at AMG, we have the ability to help accelerate and move them into different channels, moving them into different products. That can have a multiplier effect over time. The businesses we've invested in private markets have been intentional. We focus on businesses where independent firms have a clear comparative advantage; often specialty products that are really alpha-oriented and alpha-driven. We've avoided some of the more commoditized, larger cap parts of the market where you've seen the big denominator effect impact fundraising over the last couple of years. Lastly, regarding liquid, I think I hit a fair amount of this in my prior answer, but now that we're staring down track records across three years—and really across five- and ten-year track records as well—you have very strong overall investment performance aligned with strong brands, and our ability to help in terms of product development and entering new channels. We think we're well-positioned in liquid alternatives too, both on the gross sales side and on the redemption side, given that these products continue to perform the way they're supposed to and are driving a lot of upside in client portfolios.

Let me try to bring some of these questions together because we talked about capital allocation and where we see growth. In the three areas that our affiliates operate—private markets, liquid alternatives, and differentiated long-only strategies—I would say that we are and have been seeing a mixed shift at AMG. Today, we have over $125 billion in private markets, over $200 billion in liquid alternatives, and the balance in differentiated long-only. We continue to see that our capital is going into the alternative segment, both in and alongside the affiliates but also in new affiliates. We have some excellent, very strong differentiated long-only strategies. We've had a historical balance of a greater percentage in that area; however, we see that balance between the three segments being more balanced in the future. For 50% today in alternatives, we would expect that to be 60%, maybe even two-thirds at some point in the next five years. That is where we think our business is going and reflects not only where the flows are coming from, but also where the growth is coming from and, frankly, where our capital is going.

Thank you. The next question is coming from Patrick Davitt of Autonomous Research. Please go ahead.

Hey, good morning, everyone, and congratulations on your new roles. I have a quick follow-up on the transaction activity commentary. You mentioned it's competitive and that we continue to see fairly high deal volume for smaller alternative managers. I think you mentioned that you chose not to follow through with some. Could you maybe expand on the pricing dynamics there and to what extent pricing is keeping you out of the flow? Are there any signs that the pricing has topped out and could maybe get more attractive for you? Thank you.

Thanks, Patrick. Good morning. I will follow up on the prior comment by beginning with the statement that the activity has actually picked up. The activity we're seeing is pretty significant. If you were to look at deal sheets of all the players in the investment management industry, you'd see pretty significant volume. There are transactions taking place. There have been other times you've covered us or others have covered us where it has been slower. So we definitely see a supply of new businesses out there. The needs of independent firms today are very different than they were 10 or 20 years ago. They are looking for a strategic partner, and I think we fit that category, especially in the context that we have been operating in this business model for 30 years; we know how to engage with independent firms. There is an art to that and it is important to have a partner who knows how to engage with independent firms. We are seeing growth at our affiliates, especially where we engage, and we're very excited about that. The key differentiator for us is that we also actively preserve independence, and that's through equity ownership, succession planning, and just advice around human capital in a lot of places. To carve out where we compete effectively, it's primarily when firms want a strategic partner, but also want to preserve their independence. I think we have a lot less competition than we've ever had. As you know, a lot of traditional multi-boutiques have gone away, leaving us with state buyers that will only buy a 15% to 20% stake. What we've seen is that we're competitive, flexible in our approach and ownership model, which can accommodate owning anywhere from 20% to 70% of a business. We have plenty of liquidity and can write significant checks that can reach $250 million to $500 million for any independent firm. When you look at AMG's competitiveness, we are in a great position now relative to history. I believe we are very front-footed in our origination, developing relationships well before transactions happen, which is crucial for our due diligence as well as forging important independent relationships with these firms. Regarding pricing, pricing for growth is still pretty extreme. It has been for some time. You see private markets businesses that have grown really fast commanding high prices. We tend to look at transactions more in our context and fit where we can actually help affiliates grow, allowing us to put a little structure to allow for some risk sharing between us and the new potential affiliate. We don’t chase deals for pricing purposes. When pricing becomes extreme, it often feels better to repurchase our shares. We look for mid to high teens on a new investment. When we can't find those conditions and don’t see an influx of product for affiliates, we will return that capital, and we've successfully managed to do so at low to mid-teens on our repurchases as well. That's a summary of our competitiveness in the market and our perception of pricing.

Thank you. The next question is coming from Alex Blostein of Goldman Sachs. Please go ahead.

Hey, good morning, everybody. Thanks for the question. I wanted to zone in again on the wealth channel and the progress you guys are making with respect to existing semi-liquid products and the new ones you're going to be rolling out. I guess one, maybe help us frame how much these products contribute to the firm's EBITDA today. I understand it's not a huge number, but it sounds like it's grown nicely, and there's a plan for that to expand further. And then secondly, as you think about going to market with these strategies, can you talk a little bit about the competitive dynamics and what AMG brings to the table relative to other offerings, including how you're thinking about payment for distribution? Thanks.

Yep, great. So Tom, why don't you take that one?

Thanks for your question, Alex. On the first part, as you referenced, it's a relatively small contribution today but one that's been growing rapidly. We have a very clear strategy to scale. The biggest contributor we have in the U.S. wealth space today in alternatives is the AMG Pantheon Fund, which has been a fantastic success story in the industry, and we expect to continue building on from here. That fund is now above $3 billion. There are also several other products we have in the U.S. wealth market, as well as internationally. So there are billions under management today that we're building a base from, and we expect to continue to push going forward. Let me spend a minute on exactly what we're doing in U.S. wealth, which can play into some of the competitive dynamics and why we think we're positioned well to succeed. We offer a vertically integrated solution in the U.S. wealth market. For really the last 30 years, we have a business that is increasingly positioned well in that channel at about $40 billion in size, covering the largest wirehouses and most sophisticated RIAs. We're able to cover the home offices and key decision-makers at the top helping to better understand demand drivers, and we also have a wholesaling force in the field, one dedicated to covering RIAs and another covering wirehouses, to better educate advisors on why these products make so much sense in their client portfolios. As we pivoted our strategy over the last 18 months to capitalize on the alternative opportunity, we are doing so from a position of strength given what we’ve accomplished with the AMG Pantheon Fund in partnership with Pantheon and the excellent work done by their teams. We can capitalize on existing relationships where that $40 billion of independent partner-owned products exists at these large allocators. In terms of competitive dynamics, clients ultimately allocate based on a range of offerings, of course, with some of the largest brand names in private markets. They'll always secure substantial allocations. Importantly though, clients also want access to independent partner-owned firms, which creates a challenge because while those firms may have excellent alpha characteristics and can create outcomes in client portfolios, they often lack the resources to have that top-of-house conversation with buyers and field coverage to explain their offerings. AMG employs a generalist-specialist model where we have generalist sales forces covering the market that can speak to the quality of independent partner-owned firms and understand alternatives while bringing specialists from firms like Pantheon, Comvest or Systematica on board from time to time to discuss products in depth. That combination is unique, and we know there’s overwhelming demand in the market for independent partner-owned private markets and other alternative solutions. Very few firms can provide the necessary resources to cover this channel. That’s our special advantage at AMG, and we believe over the coming years we will strengthen our position as the leading alternative solutions provider among independent partner-owned firms in the U.S. wealth channel.

Thank you. At this time, I'd like to turn the floor back over to Mr. Horgen for closing comments.

Thank you all again for joining us this morning, and we look forward to speaking with you next quarter.

Ladies and gentlemen, thank you for your participation and interest in AMG. This concludes today's event. You may disconnect your lines and log off the webcast at this time, and enjoy the rest of your day.