AMG: Jay Horgen on Independence and Partnership in Asset Management

The Price-to-Value Podcast with Southeastern Asset Management

Jay and Staley have a wide-ranging discussion, starting with the story of Jay’s formative Southern roots and how he got to know Southeastern before joining AMG. Jay talks about how the value proposition of AMG’s model magnifies the inherent competitive advantages of each independent Affiliate by offering access to a broad range of strategic capabilities, including succession planning, distribution capabilities, and strategic product development, among others. He highlights the importance of being an active partner while supporting AMG’s Affiliates’ independence.

Next, Jay discusses how AMG has evolved over time from a business profile primarily characterized by traditional, long-only active public equity exposures, to one that is more heavily weighted towards alternatives – private markets and liquid alternatives. Jay addresses the diversification benefits of performance fees related to the alternatives business, despite the perception of added volatility. Jay then discusses recent divestitures at strong prices that underscore the significant valuation discount for the overall business. Staley and Jay next talk about the impact of flows on near-term share price, why all flows are not created equal, and why cash is a better metric by which to measure the business. This leads to Jay discussing capital allocation: AMG’s primary goal is to invest in growth opportunities, but has also returned excess capital through share repurchases. Jay also talks about AMG’s views on sustainable investing as a secular growth trend.

They round out the discussion with Jay talking about Southeastern’s approach to engaging with our management teams and highlighting the inspiration that he took from The Outsiders, a book we share with all our CEO partners and highly recommend to listeners. Finally, Jay ends by discussing the importance of AMG’s culture and commitment to the community.