Affiliated Managers Group (AMG, Financial) (-12%, -0.58%, 2%, 0.09%), the asset management holding company, detracted from the Fund’s 2019 performance. Consolidated assets under management (AUM) decreased, as net outflows outweighed positive performance for the year. The stock is priced at less than 6x next year’s FCF, a remarkable discount for an asset-light fee business that has traditionally traded at or above mid-teens market-average multiples. AMG owns a diverse mix of managers –many of which have growing or steady AUM – with differentiated return drivers, including concentrated value managers (Yacktman), quantitative strategies (AQR and Winton), international stock pickers (Tweedy Browne (Trades, Portfolio) and Harding Loevner) and several others, like ValueAct, that are not directly correlated with US big cap equities or fixed income. The company has repurchased over 6% of shares this year, and with strong FCF has the potential to do much more to take advantage of the depressed share price in the near term. We expect the outflows to moderate and FCF per share to grow again going forward.
From Longleaf Partners' fourth-quarter 2019 shareholder commentary.
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