Greetings, and welcome to the AMG First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Anjali Aggarwal, Head of Investor Relations for AMG. Thank you. You may begin.

Good morning and thank you for joining us today to discuss AMG's results for the first quarter of 2022. 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, we posted an updated investor presentation to our website this morning and encourage investors to consult website regularly for updated information. With us today to discuss the company's results for the quarter are Jay Horgen, President and Chief Executive Officer, and Tom Wojcik, Chief Financial Officer. With that, I will turn the call over to Jay.

Thanks, Anjali. Good morning, everyone. AMG achieved strong results in the first quarter of 2022, with economic earnings per share of $4.65, up 9% year-over-year, driven by growth in management fee earnings, and continued capital deployment. During the quarter, we announced two meaningful strategic transactions involving Systematica and Baring Asia that further demonstrate the successful execution of our strategy and our ability to create shareholder value. The full impact of these transactions will be reflected in our results later this year and into 2023, as we generate earnings growth from Systematica and redeploy capital from Baring. AMGs business is enhanced by these two transactions and the consistent and disciplined execution of our strategy over time has resulted in our strong position today. Our business is diversified and we have structural advantages inherent in our partnership model. Our high quality affiliates are generating strong performance across a wide array of in-demand areas and we have a strong balance sheet enhanced by our recurring cash flow and significant incremental capital to invest. Towards the end of last year, we saw a fundamental shift in the market environment for asset management. And over the past four months, that shift has become even more evident. Looking forward, we expect the ongoing rotation within our industry to continue presenting new opportunities for the highest quality active managers to deliver value for clients. Given the combination of geopolitical tensions, elevated inflation, rising rates and an increasing focus on ESG, taking an active approach to investing is critical to achieving clients' goals and objectives. Certain managers whose strategies resonated in recent years will need to adapt, while others that have adhered to their long-held investment beliefs like many of our affiliates, managing value, relative value, macro, and trend following strategies are seeing a pronounced resurgence in performance.…

Thank you, Jay, and good morning everyone. AMG delivered strong results in the first quarter. As the market environment continues to evolve, we are benefiting from the diversity of our business, differentiated investment performance, improving flow trends and new affiliate partnerships in secular growth areas. As Jay noted, clients are adapting to the changing investment landscape by taking a more active approach to their portfolios. And our affiliates are well-positioned to meet growing demand for diversifying return streams. Our recent incremental investment in Systematica highlights that value proposition, as macro and trend following strategies are delivering for clients amid market volatility. And the recent announcement of Baring's strategic combination with EQT will add to our significant capacity to invest in future growth. Overall, with our strong capital position, and unique ability to deploy that capital into new and existing affiliates, AMG is well-positioned to execute on our growth strategy and simultaneously return significant excess capital to shareholders through repurchases. Turning to our first quarter results. Adjusted EBITDA of $255 million grew 3% year-over-year, and economic earnings per share of $4.65 grew 9% year-over-year. Net client cash inflows, excluding certain quantitative strategies were $2.7 billion for the quarter. The improving trajectory of our flow trends evidences the shift in our business mix towards high demand areas, including liquid alternatives, private markets, and ESG. And the resurgence in value performance creates further forward momentum. Turning to performance across our business, and excluding certain quantitative strategies. In alternatives, we reported strong results again, with net inflows of $6 billion in the first quarter. The inflows reflect $4 billion of private market flows at EIG, Pantheon, COmvest, and Baring. Client interest in private market strategies remains robust. And our diversified long duration assets in this category are a source of stable and growing management…

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]. Thank you. Our first question comes from the line of Robert Lee with KBW. Please proceed with your question.

Great, thanks. Good morning, everyone. Hope everyone's doing well.

Good morning.

Good morning. So I guess my, you kind of touched on this in the prepared remarks, Jay, but maybe dig a little deeper, given current environment, can you maybe put a little, maybe meat on the bone if we want to think about how investor behavior is changing and maybe, are you starting to see RFP activity really start to accelerate as maybe more institutions start to think to redeploy to liquid active equities and then maybe also, you differentiate a little bit between what you're seeing institutionally versus maybe in the wealth management or retail channels?

Sure, thanks. Thanks, Rob and again good morning to you. Well, I would agree with your characterization that the market environment has changed is changing. We see that and we clients are already reacting to this environment. Maybe the different layers here that I should point out that I think the first is, we think that this environment is really good for active management. We think clients will increasingly take an active approach in managing their exposures and we think active managers ability to protect and grow client assets in these changing conditions, it's a clear advantage, and it's one that's unmatched by passive. So when we think about our positioning, which we believe to be very good in this environment, there are really three things that I would kind of point out to you. The first is the diversity of our affiliates. And that includes, as Tom said in his prepared remarks, the significant exposure, we'd have to absolute return, and uncorrelated liquid alternative strategies. And we did see client activity as early as mid-last year begin to shift to more absolute return liquid alternatives. And we had been talking about that for several quarters now. We see that to be an advantage of AMG in our affiliates in terms of positioning. We also see the comeback in value, to be an advantage for AMG industry-leading value managers at AMG. That's something that we're well known for. And then, lastly, as you know, we've invested heavily over the last couple of years in private equity, private markets, illiquid strategies. And so we have longer locked up capital in private markets. So that all supports the kind of affiliate positioning and why we feel good about this environment and delivering for clients. I think second and I think everyone on…

Sure. Thanks, Jay. And thanks for the question, Rob. So maybe just a little bit in terms of how well-positioned AMG is in this environment, given not only our strong balance sheet and capital position, which as you know will further be enhanced post the Baring deal closing, but also just the unique nature of our business and the way that our earnings and cash flow characteristics tend to perform in this type of an environment. Jay talked about this a bit already. But that resiliency really starts with the diversity of our affiliate product set. And it includes a number of strategies with countercyclical qualities as well. And all of that translates into stability in terms of our top-line revenue. And given the performance that we're seeing, in particular, in some of our absolute return strategies, we're also really building on our opportunities to earn performance fees later in the year. As you know, the majority of our EBITDA is under a revenue share structure. We have a very lean cost base at the AMG level and most of that is variable in nature. So we also experienced a lot less margin pressure in the face of a market drawdown than you might expect to see in a traditional asset manager P&L. And each of those attributes contributes to the consistency of our cash flow profile. We generate a lot of cash every quarter. We have access to even more liquidity, including the ability to draw our full $1.25 billion revolver without any impact on our covenants. As you know, our balance sheet is in excellent shape. We have significant duration, significant flexibility. And once the Baring transaction closes, we'll have another $240 million dollars of cash, in addition to the EQT shares. And collectively, that's a lot of…

So the last thing, just in terms of your question, the one major move that we have seen really is towards liquid alternatives, both institutional and wealth. And I do think that we're uniquely positioned at AMG, relative to say, our other public peers. This is something that has really -- this area seen a resurgence in performance, most of the relative value trend following absolute return strategies are up significantly this year, in terms of positive performance. That bodes well for future flows, and we're already seeing a pickup in client activity towards these strategies.

Thank you. Our next question comes from line of Craig Siegenthaler with Bank of America. Please proceed with your question.

Good morning, Jay, Tom. Hope you're both doing well?

Good morning.

I was looking at how you structured the Parnassus transaction and it look like you paid roughly 60% of purchase price upfront. And then the rest would be deferred payments to contingent payments. So as we model out free cash flow, I want to understand how large the deferred payments, and contingent payments for deals already announced could be this year and next year, if you can provide us any help with that?

Yes, sure. Tom, do you want to take that one?

Yes. So Craig, I think the waiting on the Parnassus number is probably a little bit less than what you walk through. But you're right in the sense that we did structure that transaction. And similarly, we tend to structure many of our transactions really to ensure that our shareholders are well-positioned for all outcomes. And we have excellent alignment between the affiliates that we're making a partnership with, and AMG and our shareholders. In the context of our overall cash flow generation, both the cash flow that we generate from our business on a quarterly basis. The strong performance fees we're seeing and the incremental cash that we're going to get from the Baring transaction. The piece that is out there in front of us is frankly relatively modest, in the context of our overall ability to spend. So if you think about us -- we -- there's a page in our investment deck that talks about kind of 2 billion plus of liquidity. We've got another billion on a gross basis coming in from Parnassus. If you start thinking about, a couple $100 million over the course of the next couple of years in deferred payments and contingent. You're in the range of what we would expect. Importantly on contingent payments, contingent payments are going to be very well aligned in general with the performance of those underlying businesses. So the better those businesses do, the more we may owe in terms of contingent payments. Again, they tend to be modest, they tend to be structured. But we'll have right way risk on those, if you will. On the deferred payment piece, it's really just a timing matter. And it's really a way for us to continue to manage our overall cash flow profile. So I look at it as being a really important tool for us and to enter into these transactions in a way that structurally makes sense. But as we look down the pike from here, we don't see anything impairing our ability to put significant capital to work, either in new investments, or repurchases in terms of the quantum that is on the come, if you will, in deferred payments or contingent payments.

Thank you. Our next question comes from line of Bill Katz with Citigroup. Please proceed with your question.

Okay, thanks. Just got the two part question in. One just generally appreciate the affiliate diversification and the resiliency of the business and what seems to be shifting allocation trends. I guess I'm just sort of struck by the pretty sharp sequential decline in EBITDA against a 5% market drop. So why don't if you could maybe unpack some of the delta from the $255 million this quarter down to $215 million for the second quarter. And then stepping back, Jay or Tom, just sort of curious, are you seeing a step up in conversation for new investments right now? Or is just the market action here just bit more of putting things on hold for now, just giving the uncertainty of everything? Thank you.

Yes, thanks, Bill. Tom, I'll take the first one here, the step up in conversations, and then I'll turn it to you to maybe talk about the modeling items for the quarter and the next quarter. So Bill, thank you again for your question. On the new investment side, we have seen pretty strong activity in the M&A market now for last 18 months, I'd say. And I guess there often is a slowdown when you hit choppiness like we've seen. I mean, so far, and interestingly, I'm not exactly sure I can even explain it; we haven't really seen a slowdown in our pipeline. In fact, if you just look at new discussions at the front end of our pipeline. We may have even seen an uptick in this past period. So we do see the opportunity set to continue to be strong for us. We are looking for opportunities. In this environment, as I mentioned, we do think that a number of our competitors will be more inwardly focused as they focus on expenses and fees and margins, all the things that Tom said that we have less sensitivity to. And so we're hopeful that in this period with continued active pipeline that we're going to see opportunities for us to invest for the benefit of our shareholders. We are uniquely positioned in the marketplace. And increasingly, independent firms are seeking an engaged active partner, and with our resources on distribution and our strategic engagement I do think that we are especially well-positioned to help independent firms continue to meet their own objective. So our -- the rationale for choosing AMG probably never been better. And we see the pipeline being strong. So we would expect activity to come out of this environment. So maybe, Tom, I'll turn it to you to do the other -- to do the more guidance oriented.

Sure. Bill thanks for your question. So we guided to EBITDA in the second quarter of $215 million to $220 million with modest performance fees. And if I kind of walk you from where we were this quarter, where we are next quarter, hopefully, it'll give you the clarity that you're looking for. So this quarter, we reported adjusted EBITDA of $255 million. And we noted that that included performance fees and mark-to-market gains of $25 million that kind of gets you to an X performance fee, X gain number of about $230 million. So what we're really talking about is kind of the delta between $230 million and then that $215 million to $220 million range. Just as a reminder, performance fees in particular in the second and third quarter tend to be seasonally lower. So you should assume that that $215 million to $220 million has a very modest level of performance fees, call it $2 million, $3 million in there. And the vast majority of that change right from the $230 million to that $215 million to $220 million range is really markets. And you should think about markets in two ways. First, the full impact of the Q1 market performance, given the shape of the market in the first quarter. And then, secondly, the Q2 mark, where we told you that our blend is down about 5% as of Friday. Now, obviously last week was a very challenging week in the markets. And we tend to try and mark-to-market right up to the day before we announce earnings. So you're really seeing the latest impact of that downward market move and the impact that it's having on our EBITDA assuming is sort of straight-line from here for the rest of the quarter. I would step back though, and make three points just at a higher level, as you think about the full-year and as you think about the earnings power of the business. We've talked a number of times already today in both our prepared remarks and in the answers to questions about the diversity of our business, the excellent performance we're seeing, and that will continue to drive strong earnings over the course of the year. I've also talked a little bit about the structural advantages in our model, and the things that keep our top-line strong. The fact that we're seeing strong fee rate trends, the fact that we're seeing very strong resilient trends with respect to margin and expenses, given the nature of the model. And then lastly, again, the performance fee opportunity. And I think this is again very unique to AMG. The exposure that we have to absolute return strategies relative to any other business in our industry is quite high. The performance in those businesses year-to-date has been very strong. So when you think about the full-year opportunity there, it's very strong as well.

Yes, I just wanted to add, and Tom said it very nicely there. But when you look at any quarter-to-quarter mark, we do bring it all the way current and last week was a lower week in the market. But when you look more past next quarter, you look over the next couple of quarters, what you're seeing in our business is seeing flow story, really good performance, especially in the absolute return strategies, which presumably will lead to better flows in those categories, and maybe even strong flows in those categories. And then, most importantly, our capital position and our flexibility really just doesn't express itself in any one quarter. The capital strength that we have with the Baring transaction was where we've been with our balance sheet and the continued cash flow from our business. When that expresses itself, we do think it will lead to, we do believe it will lead to significant earnings growth.

Thank you. Our next question comes from line of Alex Blostein with Goldman Sachs. Please proceed with your question.

Hey, guys, good morning. Thanks for the question. I was hoping you could zone in on your non-U.S. strategies for a second, given just a little more turbulence and volatility in the non-U.S. markets. I guess one maybe a reminder on the currency impact and kind of how we should think about the sort of potential mark-to-market risk there. And the trends that you highlighted with respect to rising appetite for maybe some of the traditional products in the U.S. Are you seeing any of that outside the U.S. as well? Thanks.

Yes, thanks, Alex. Maybe we'll take a top down holistically, Tom, and just talk about flows, but with a focus on the non-U.S. piece.

Sure. Maybe I'll start and maybe I'll just answer, Alex, one of your quick questions to begin with, which is obviously with the strengthening that we've seen in the dollar, you should expect some modest headwinds in terms of FX that is baked into our estimate for next quarter on a go-forward basis, so that you're right to raise that, it's not a massive impact for us. But certainly, it does impact us given the global nature of our business. So maybe on flows overall and then I'll come back to some of the global products. First, just maybe a quick framework, right, in terms of what really drives flows, particularly in an environment that is changing as much as Jay noted in his prepared remarks. First, you really need a market where particular strategies are well-positioned to work. And given all the changes we're seeing in the environment, there are obviously certain types of strategies that are well-positioned for this type of a market. Then you need those strategies to actually perform well in that environment. And we're absolutely seeing that across a number of our affiliates. And then, finally, you need clients to recognize the opportunity. And you need them to understand the role that these strategies are going to play in their portfolios. And that recognition is happening real time. And it's also starting to show up in our flows. So those areas that are really well-positioned for this type of changing environment, we've talked about them already liquid alternatives, value, private markets. Those are a big part of our business. Jay referenced it earlier. More than half of our EBITDA and collectively those strategies delivered very strong flows this quarter, and we expect that trend to continue going forward. As I mentioned earlier, it's also been…

And one last thing I'll say here is just to remind everyone that we don't think about flows in any one particular quarter. Really, we're focused over the long-term, and I think you can see, on Page 8 of our IR deck, the rolling 12 months really gives you a picture of the positive momentum we're seeing in flow [ph] story, and importantly, what you're seeing is flow story improving both on the quant side, as well as on the fundamental side. So we do see the activity of this marketplace changing for us to the positive. Our flows are really just an output of a successful execution of our strategy. And that includes the new investment strategy, and investments that we're making with our affiliates in distribution and in seed capital. We see that working, we see us getting ahead of that, and we're in an environment now where we're getting the benefit of being ahead of that. So we're excited about the forward prospects, even though we're understanding, we're in a difficult market environment.

Thank you. Our next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your questions.

Great, thanks. Good morning folks. Maybe if I can just dive into the accretion timeline and the different parts of the 10% accretion that you talked about Tom from the Systematica investment and the Baring private EQT transaction, the other 60% of that in terms of what you plan, I guess if you have an early read definitely on how much you plan to invest in internal growth initiative and what types of things are you planning to do with that versus share repurchase activity and if you could just again, touch on your overall capacity for deals. And just in terms of the thinking about that deal pipeline post this transaction, as well as any impact on the fundraising from the transaction in terms of the $4 billion that you did in fundraising this quarter, how that could be impacted longer-term from the EQT transaction?

Great, Brian. Well, good morning. Let me, because there is a couple of questions in there, so why don't I start and then Tom will help me and if we've missed any, we'll try to regroup. So we do -- we did have two significant transactions in the quarter. So let me start there. The first was Systematica, which was in early January, really was a carryover from the end of last year. And that's where we accelerated our repurchase of the remaining equity interest from a third-party and that completed the transition to kind of a fully is where Systematica wanted to be in terms of its business. And we're very excited about that transaction. We've seen the momentum in that business over the last six years, the business has almost doubled. I think it has doubled now for us in that period of time. And then of course, our purchase here this year was timely as the business continues to perform really nicely, delivering very, very strong performance this year. I think the business is up 15% this year alone. So we would see the earnings from that. We saw some of it this quarter, and we'll continue to see it throughout the year. Obviously, one significant opportunity within Systematica was that really good performance is performance fees, and typically most of those performance fees would express themselves in the fourth quarter. And as Tom mentioned we're very constructive on our performance and performance fee opportunity. The other significant transaction in the quarter was the EQT Baring merger. And let me just start by saying, we see that as a very good outcome for our shareholders. And while it may seem somewhat unique in the context of our history, it's fully in line with our strategy and model. As we've been aligned here with the partners of Baring over the last six years really to help that business grow and thrive. They made the decision that that partnering and a strategic merger was the right outcome for them. And because of our alignment, it resulted in significant proceeds to AMG shareholders. Now, those proceeds will come later this year. And so we are being patient and thoughtful about our approach. And so maybe it's a good time for me to turn it to Tom and just review how we're thinking about that, including the timing of it and how we're capital around that.

Yes. Thanks, Jay. And Brian thanks for your question. Maybe I can just kind of go through some of the facts and some of the math to help with your question here. So AMG acquired its initial 15% interest in Baring in 2016 for $187 million. And when the transaction closes, which we anticipate will be in the fourth quarter, subject customary approvals; we're going to receive $240 million of cash and 28.7 million shares of EQT. And that equates to about a billion dollars of total proceeds on a gross basis, given where the stock is today. 75% of those shares are going to be freely tradable post-close. 25% of the shares are going to be subject to a six month lockup agreement. Brian, as you referenced in your question, we have noted that we plan to allocate about 40% of the gross proceeds to a combination of transaction expenses, debt pay down, and also the taxes that will owe on the sizable realized gain when the transaction closes. The remaining 60%, I think about really is being purely incremental to our existing capital base and cash flow generation. And we're going to run that through the same highly disciplined framework that all of our capital allocation decisions are subject to. At the highest level, this is a significant enhancement to our already strong capital position. It's going to allow us to invest further in our growth initiatives, including new investments and existing affiliates. And it's going to enable us to simultaneously return even more capital to shareholders via repurchases. And when we put that to work, as you noted in your question, we expect approximately 10% earnings per share accretion over time, and I'll go into that in a little bit more detail. First of all, that number…

Thank you. Our next question comes from line of Dan Fannon with Jefferies. Please proceed with your question.

Thanks. Good morning. I wanted to follow-up on performance fees. In some of the firms you mentioned like Winton and AQR for the first time, I think in a while with regards to having good performance. Maybe if you could remind us where we fit versus high watermarks for some of these firms that have underperformed for longer periods of time and how are you -- based on where things sit today knowing that performance can change very quickly? How would you characterize the 2022 performance fee opportunity with the other years? If there's a way a good comparison or think about the magnitude of what that and where that sits today?

Yes, thanks for your question, Dan. Let me start. You're right that AQR and Winton and really all of our quantitative managers have been strong really for the last 12 maybe in some cases 18 months and Systematica really for several years now. And in those businesses and in particular AQR, they've had a handful of strategies that have really performed very nicely. And you would -- I would characterize these as being their higher fee, liquid alternative absolute return type strategies. And so as their performance continues to improve, they are in many cases above high watermark in those products and their long-term [technical difficulty] are improving both at AQR and Winton, and at Systematica, they've already produced significant performance fees in the prior period. And we're optimistic about what they can do this period. So maybe I'll turn to Tom to add a bit more to the -- to the performance category for what we can do this year. But I would just say that that you're right, that that for the first time in many years, we're seeing a resurgence in performance there. And that's leading to the potential for revenue coming from performance fees, and really flow improvement because of the performance.

Yes, thanks, Jay. And, Dan thanks for the question. So I guess I'll start by saying, performance fees are a really important part of our business. They've proven over time to be a durable component of our earnings and our cash flow. And we think that, frankly, from a capitalizable earnings perspective, there's a core amount of performance fees, that whether it's a great economic environment, a more challenging economic environment, you can really count on coming from AMG year in and year out. That number is averaged somewhere in the 7% to 12% range over the course of the last five years. And generally speaking, the asymmetry has tended to be to the upside. So we think this is a really durable and important earnings stream and important cash flow stream to us. And as we think about both our existing affiliate base and the nature of our P&L, but also making investments in new affiliates that performance fee generation opportunity is really important to us and important to our shareholders. We've talked about this in the past, so you can really break it into three buckets, concentrated long-only, obviously, that's going to be a little bit more challenging in the current environment. Illiquid where we continue to build a carried interest bank, that's going to be a longer-term opportunity for us. And then really the focus of the day the Absolute Return Strategy. And it's certainly the quant strategies Systematica, AQR, Winton as you reference, but also at Capula, Garda are relative value strategies. Really, these are strategies that are built to perform across economic cycles and in different economic environments. And we've seen very, very strong performance thus far. Now, you noted this in your question, Dan, it is early, obviously, there's still a lot of year left. But we feel very strong about where we stand today in terms of performance fee generation. And I would certainly think about feeling like we're in the upper end of that range in terms of an opportunity for us, depending on how markets develop from here. What's really powerful is the diversification of our performance fees. There's some strategies here that are really working at all times. And I think that's really important, just to the overall diversification and strength of our business and cash flow profile.

Yes, I would just, again, reiterate reminding everyone what, what performance fees mean to our business. It means that we've got really good performance. And especially in absolute return product, and it really does feel like those are products that are meaningful for the environment that we're in. And so you could say it's stabilizing our business. But as Tom pointed out, we've always had relatively stable performance fees; they just come from different sources at different times.

Thank you. Our final question this morning comes from the line of Robert Lee with KBW. Please proceed with your question.

Well, thanks for my follow-up, guys. Wondering if you can maybe as I drill down a little bit into the kind of the margin protection you have built into structurally with your revenue share? I mean, I guess, I don't know if there's a way of formulating kind of, or quantifying, how we should think about that maybe reminding us of kind of structurally, what that looks like, and as a part of that, at sometimes, investors do question hey, revenues get tough and you have margin protections that leave enough, no. Cash and cash flow at the affiliates to properly incentivize, they invest and whatnot so maybe if you could kind of address that, touch on that. Thanks.

Yes. So let me start. Rob, thanks for your question. Just conceptually, a revenue share is really just a method for us to work with our affiliates. And what does that really mean? It means our promises to leave them alone, let them choose their own path, operate their business, have full control of their day-to-day decisions, but then just strategically engage, help them grow, get behind their growth plan. And we do that through our own distribution efforts, as well as just some strategic engagement initiatives that we have, including seed capital and other consultative engagement. So that's really our model. And to do so, we think that a revenue share is a tool to allow for all those things to occur. It's not 100% of our business; I think it really depends on the situation. So we are open to structures that that work for our affiliates, but in the main revenue share structure for a growing firm that value endures to the benefit of the underlying partners. And so what do I mean by that, if you think about it over time, businesses that grow, they grow scale, and they develop growth in their EBITDA line faster than the revenue line. And that builds up substantial cushion in these businesses as they grow and 100% of that margin expansion endures to the benefit of the partners to the bonus pools, et cetera. And that's really what's occurred at AMG. So when you look across our affiliates, the large majority, especially coming off the environment that we've just come off of which has been a generally speaking a higher asset level environment, we've had substantial cushion at our affiliates, and they enjoy the benefit of that. So I will say that the revenue shares that we have are operating well, I think we're mindful that if we are in environments where there's pressure, we obviously have to adapt and adjust. But we don't really see any pressure in our business today because of the built up growth and cushion underlying those revenue shares we're in really, really good shape. And I don't know, Tom, if there's anything else that you want to add to that?

No, Jay, I think you covered it.

Okay, excellent. Well thanks for your question, Rob. And I do think that structurally, it advantages us in this environment, because, as Tom mentioned, and really put it well, the flexibility of our model is really around capital. And so to the extent that the businesses that we partner with are operating effectively and growing and driving then what we really are focused on here is a disciplined allocation of our capital for the benefit of shareholders. And that flexibility lets us be opportunistic in this environment, both in terms of new investments, as well as repurchases of our stock. So we do see that that flexibility is an opportunity for AMG.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Horgen for any final comments.

Thank you all again for joining us this morning. AMG had a strong first quarter and as discussed, our business has been resilient to navigate this environment, and we expect to capitalize on opportunities that it presents. I hope everyone remains safe and healthy. And we look forward to speaking with you next quarter. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.