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Affiliated Managers (AMG) Closes Garda Capital Partners Deal

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Affiliated Managers Group, Inc. (AMG - Free Report) has closed the deal to acquire minority equity interest in Minneapolis, MN-based Garda Capital Partners LP. The financial terms of the transaction, announced in May 2019, were not disclosed.

With roughly $4 billion in assets under management as of Apr 30, 2019, Garda Capital is an alternative investment manager specializing in fixed income relative value strategies. It serves a diversified set of sophisticated institutional clients across the globe.

As part of the deal, senior partners of Garda Capital have agreed to long-term commitments with Affiliated Managers. They will hold majority of the equity of the business, and conduct the firm’s day-to-day operations.

Additionally, at the time of announcement of agreement, Affiliated Managers had projected that the deal will lead to economic earnings accretion of roughly 20 cents per share on a full year basis. Of this, half will likely be realized in the second half of 2019.

Affiliated Managers, with its strong balance sheet and liquidity position, has considerable capability to invest in other companies and will continue generating meaningful growth through new investments. The company is targeting investments in alternatives and global strategies, given the strong preference of investors for the same.  This is expected to support the company’s financials, going forward.

However, the presence of substantial intangible assets on its balance sheet, and use of high levels of debt (amid higher interest rates) remain major near-term concerns for Affiliated Managers.

Shares of this Zacks Rank #4 (Sell) company have lost 8.2% so far this year against the industry’s rally of 21%.



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