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Globe 100 | Top finance company

Right on the money

Strong year for market and new alliances boost Affiliated Managers Group

AMG's president, Nathaniel Dalton, said the company is casting a global net for new investment firms. AMG's president, Nathaniel Dalton, said the company is casting a global net for new investment firms. (Essdras M Suarez/Globe Staff Photo)
By Tood Wallack
Globe Staff / May 22, 2011

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Many money managers spend their days hunting for promising stocks.

Affiliated Managers Group scouts for other investment firms to buy.

Last year alone, AMG, which is based in Beverly, bought majority stakes in four boutique investment firms.

And company executives are hoping to strike more deals this year, particularly overseas.

“Prospecting for new affiliates is now more global that it has ever been,’’ said AMG president and chief operating officer Nathaniel Dalton. “We are looking increasingly worldwide.’’

Unlike most asset managers, AMG doesn’t manage its clients’ money directly. Instead, it relies on more than two dozen affiliates to market mutual funds and other investments to customers around the world.

AMG, which was founded in 1993, says it tries to preserve each affiliate’s “distinct culture and investment focus,’’ while helping partners with more mundane tasks such as complying with regulations and providing stable financial backing.

The company signed its first affiliate agreement in 1994, and now has partnerships with 27 firms; AMG owns majority stakes in most of them.

So far, the strategy appears to be working.

Last year, the company’s net income more than doubled to $138.6 million.

Revenue surged 61 percent to $1.4 billion. And it had $320 billion in assets under management at the end of 2010, up 54 percent from the end of 2009.

“It was a good year,’’ said Dalton, giving most of the credit to the affiliates. “All the different parts of our business were working.’’

AMG executives said they benefited from a trifecta of strong investment returns, additional money from investors, and new partnerships with investment firms.

And it started this year on a high note as well. In the first quarter of 2011, AMG reported that net income more than doubled to $39.1 million on higher revenue, and it now has a market value of nearly $6 billion.

Combined, the organization markets 350 investment products — including a mix of mutual funds and products aimed at institutional and affluent investors — and 1,900 employees, though only 110 work at AMG itself; the rest work at affiliates.

AMG keeps a low profile for such a large publicly traded company. Chief executive Sean M. Healey might be better known in some circles as the husband of former Massachusetts Lieutenant Governor Kerry Healey.

AMG does face challenges. The firm’s shares plunged during the financial crisis as markets crashed (although its stock has roared back since then). And many investors are still anxious about investing in stocks, or other investments that carry risk.

“Like any business that manages assets, the biggest [challenges] are the macro ones,’’ said Dalton, the company president. “We lived through an incredible period. And those risks are still the biggest risks.’’

Todd Wallack can be reached at twallack@globe.com.

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