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Affiliated Managers (AMG) Buys Minority Interest in Suma Capital

Affiliated Managers Group, Inc. AMG has acquired a minority equity interest in Suma Capital. The terms of the transaction have not been disclosed yet.

With this partnership, AMG will be in a position to further expand its business toward secular growth areas. The transaction marks AMG’s ninth private markets affiliate.

Suma Capital is a pan-European private markets firm that invests in the transition to a lower-carbon economy, a sector with increasing client allocations and deployment opportunities across Europe.

It is led by co-founders Enrique Tombas, David Arroyo and Pablo Muller. The firm has nearly $800 million in assets under management, primarily across infrastructure and growth strategies.

Notably, Affiliated Managers, with its strong balance sheet and liquidity position, has considerable capability to invest in other companies and generate meaningful growth through new investments.

In order to significantly diversify its business “in distinct fast-growing areas of private markets,” AMG acquired minority interests in Ara Partners and Forbion Group Holding B.V. in 2023. Through these, the company has been reshaping its business profile with a focus on alternatives.

Almost 50% of AMG’s earnings are being generated from alternative strategies (private markets and liquid alternatives), with the remaining “coming from differentiated long-only strategies.”

Divestitures of stakes in Veritable LP and Baring Private Equity Asia have further bolstered the company’s balance sheet position.

Over the past six months, Affiliated Managers shares have gained 18.3% compared with the 24.6% growth recorded by the industry.

 

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Currently, Affiliated Managers carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inorganic Growth Efforts by Finance Firms

Earlier this month, LPL Financial Holdings Inc. LPLA announced the completion of the acquisition of Crown Capital Securities, L.P. The deal, announced in July 2023, expands LPLA’s footprint in the California market and solidifies its wealth management business.

Crown Capital is a full-service broker-dealer and registered investment advisor based in Orange County, CA. As of May 8, 2024, $1.3 billion of brokerage and advisory assets served by roughly 125 advisors were onboarded to LPLA. The remaining $3.7 billion of assets are expected to be onboarded over the next several months.

Likewise, BlackRock Inc. BLK closed the acquisition of SpiderRock Advisors, LLC. This strengthened the company’s capabilities to provide a robust platform to its clients with customized separately managed accounts (SMAs) solutions.

The deal is expected to enable BLK’s SMA solutions to meet the increased demand for personalized, tax-efficient portfolios by wealth managers. The financial impacts of the acquisition will be immaterial to 2024 earnings.

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