The Affiliated Managers Group Inc.
The Affiliated Managers Group Inc. is an American International asset management Company whose headquarters is in Massachusetts (AMG, np). AMG was formed in 1993, from the brainchild of TA Associates a former private equity firm. Mr. Healey was recruited in 1995 from Goldman Sachs, where he worked as a banker, and rose to the chief executive post 10 years before his employment. It stands out clearly that AMG has more than twenty-eight stable affiliates located in different municipalities across the globe (AMG, np). In this kind of business, the firm owns numerous stakes in several securities and other related property and this enables it to meet the goals of the respective investors. These resources include boutique asset management, the hedge fund and specialized private equity firms. The Investment firm offers a variety of products across investment styles and geographies including Global International Equities, U.S. Equities, Energy Markets, Private and Real assets, Systematic diversified, Fixed Income and the Multi-asset (AMG, np). Additionally, there are other multi strategy alternatives classified as niche and short bias. Examples of the niche strategies available are Currency, Commodity, Volatility, Macro and Cross Asset Arbitrage.
Growth in US Retail and Shared Ownership Strategy
Even though the bulk of AMG’s $830 billion in assets are from institutional clients outside the US, it has made US retail growth a priority (AMG, 2018a). It rolled out the AMG Funds retail brand and hired the US retail sales chief in preparation to advertise. Furthermore, the Affiliated Managers group Inc. employs shared ownership as a strategy to ensure its success (AMG, np). Investing is left to the boutiques whose managers retain a portion of ownership whereas the distribution strategy along with other operational services are chiefly carried out by AMG. Presently, the company has diversified the investment by expanding its distribution platform over several nations around the world. Apart from the numerous affiliates, AMG has developed main offices in various states such as the AQR Capital Management, Third Avenue Management and Yacktman Asset Management in the US, Artemis (AMG, np)). Besides, several offices have been established in Dubai, Sydney, Zurich, Hong Kong, Toronto, Boston and Greenwich to provide investors with access to industry leading strategies from independent boutique organizations (AMG, np).
Impacts of Firm Profitability due to Various Risks in the Economy
Being a financial investment company, AMG is prone to a variety of risk factors which affect the acquirement of financial assets and fees payment for operations within the Affiliates' businesses. A considerable change in investor risk tolerance or investment preferences such as the recent growth in passively managed products leads to financial losses. The growth strategy depends on the continued growth the Affiliate productions and new boutique stock firms (AMG, 2018b). Failure of these particular productions is experienced either due to poor performance levels or improper means to carry out management succession plans. Such risks hinder revenue stream and other operations within the whole organization. Some of the Affiliates' reputations are critical to their businesses and this may result into costly operations. Moreover, existence of unknown liabilities may also upshot into adverse effects on the financial plan and the tasks. The AMG solves these risks by raising the required funds to enhance programs similar to seeking more suitable firms and reinvesting in the already existing boutiques.
AMG Market Structure
Owing to the fact that AMG consisting of a numerous offices and boutique business opportunities around the world, it can be classified under a perfectly competitive market structure (AMG, np). All these firms offer the same type of products and services but in the specific parts where they are located. Notably, the effect of competition is reduced since the firms lack the market power and hence take up the market prices as they appear. This has enabled the Affiliates’ to benefit from the skills and knowledge of senior professionals in Asia, Australia, Europe, the Middle East and U.K.
AMG Profits
As from the year 2017, a series of analysis was done to predict the future status of the company’s several firms. Concurrently, the data obtained exhibited the respective amounts of net income and the revenue. Therefore, in the year 2015, the tax imposed in the United States, UK and other regions is $2,484.5.in 2016 and 2017, the respective amounts were $2,194.6 and $2, 305 (US Security and Exchange Commission, 1) The trend displayed describes the pattern where the revenue collection dropped in 2016; from the rise in 2017, it can be deduced that some more productive measures were put in place. Valuation of the net fixed assets was $ 114.1, $110.1 and $111.0 in 2015, 2016 and 2017 respectively (US Security and Exchange Commission 1). From these results the company has designed subsequent events that would propel its operations to maximize on profitability. The Company’s Board of Directors authorized a share repurchase program in January 2018 authorizing the Company to repurchase up to 3.4 million shares of its common stock, and this authorization has no expiry. According to the January 2018 authorization, there were a total of 5.0 million shares remaining available for repurchase under the Company’s repurchase programs. As of February 21, 2018, the Company had repurchased 0.7 million shares of common stock, at an average share price of $193.18.
Works Cited
AMG. AMG by the numbers. AMG. 2018a. https://www.amg.com/
Accessed on 7 November 2018
AMG. Core business strategy. AMG. 2018b https://www.amg.com/about-amg.html#strategy
Accessed on 7 November 2018
AMG. Overview. AMG. n.da. https://www.amg.com/about-amg.html#overview Accessed on 7 November 2018
AMG. Affiliates. AMG. n.db. https://www.amg.com/affiliates.html
Accessed on 7 November 2018
US Security and Exchange Commission. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 2018.
