Market Selloff Continues to Affect Flows and AUM at AMG; Lowering FVE to $155 Per Share

While we have lowered our fair value estimate for Affiliated Managers Group to $155 per share from $175, it was due primarily to the incorporation of continued market losses and weaker flows in the face of volatile equity and credit markets in the near term, as opposed to anything being fundamentally wrong with the firm. Our new valuation implies a price/earnings multiple of 8.4 times our 2022 earnings estimate and 7.8 times our 2023 earnings estimate, with the company's shares currently trading at 7.3 times and 6.7 times consensus estimates for 2022 and 2023, respectively, compared with an average of 9.6 (18.2) times trailing earnings during the past five (10) years. Although the stock is currently trading at a more than 10% discount to our revised fair value estimate, we continue to recommend BlackRock for investors looking for exposure to the traditional asset managers, as we see firms like AMG being affected far more by the secular and cyclical headwinds facing the industry right now.