AMG: Sale of Veritable Has Less Impact on Our Fair Value Estimate Than Rising Equity Markets

We do not expect to alter our $159 per share fair value estimate for narrow-moat-rated Affiliated Managers Group following news the firm is selling its equity stake in Veritable, which provides wealth advisory services to ultra-high-net-worth individuals and families, to Pathstone Family Office, another advisory firm offering customized investment advice for families, family offices, and foundations and endowments, for $294 million. While AMG will be relinquishing a business with $17 billion in assets under advisement at the end of May 2023, the company's pursuit of wealth management firms over the past decade always seemed to be more of a side project rather than a whole-hearted effort to replicate its boutique asset management model with wealth managers and advisors, with the income from the stakes that AMG did take in advisors and wealth managers reported as equity method earnings.