AMG reported record first-quarter 2026 results, with Adjusted EBITDA of ~$317 million (up 39% YoY) and Economic EPS of $8.23 (up 58% YoY), on record net client cash flows of more than $22 billion and record AUM of $882 billion despite a volatile market backdrop. Growth was broad-based across four secular drivers: infrastructure, secondary solutions, absolute return strategies, and tax-aware long-short strategies, with liquid alternatives contributing a record $25 billion of inflows while equities saw ~$9 billion of net outflows. Management repeatedly framed concentration concerns around AQR and tax-aware strategies as noise, noting long-short wealth is only about 8% of AUM and under 8% of EBITDA. The company stayed active on capital allocation, closing BBH Credit Partners and announcing HighBrook and a follow-on Garda investment, repurchasing ~$186 million of shares in the quarter, and generating over $1 billion of annual after-tax cash flow. For Q2 2026, AMG guided to Adjusted EBITDA of $290-305 million and Economic EPS of $7.60-8.01, roughly 45% growth versus the prior year at the midpoint.
Good morning. Thank you for joining us today to discuss AMG's results for the first quarter of 2026. Before we begin, I'd like to remind you that during this call, we may make a number of forward-looking statements which could differ from our actual results materially due to a number of factors, including those described in today's earnings press release and our most recent Form 10-K and subsequent filings with the SEC. AMG assumes no obligation to update these statements. Also, please note that nothing on this call constitutes an offer of any products, investment vehicles, or services of any AMG affiliate. A replay of today's call will be available on the investor relations section of our website, along with a copy of our earnings release and reconciliations for any non-GAAP financial measures, including any earnings guidance provided.
In addition, we have posted an updated investor presentation to our website and encourage investors to consult our site regularly for updated information. With us today to discuss the company's results for the quarter are Jay Horgen, President and Chief Executive Officer, and Dava Ritchea, Chief Financial Officer. I'll turn the call over to Jay.
Thanks, Patricia. Good morning, everyone. AMG reported record results for the first quarter, with Adjusted EBITDA of approximately $317 million and Economic earnings per share of $8.23, representing year-over-year growth of 39% and 58% respectively. Rising demand for liquid alternative strategies and ongoing strength in private markets fundraising generated record quarterly net client cash flows of more than $22 billion, bringing net flows over the last 12 months to $52 billion, an organic growth rate of 7% over the period. In the quarter, given our confidence in AMG's business profile and growth prospects, we repurchased shares at an elevated pace, deploying approximately $186 million and bringing share buybacks over the past 12 months to more than $700 million, a reduction of 10% in our shares outstanding.
AMG generated these excellent first quarter results against a volatile market backdrop, highlighting the value of AMG's differentiated model and the ongoing strength of our diverse business. As we have seen over AMG's history, our business is resilient and well-positioned to navigate periods of uncertainty and dislocation. AMG's highly diversified profile has once again demonstrated that resilience as we ended the first quarter in a position of even greater strength relative to the beginning of the year, with record assets under management and record fee-related EBITDA. We have continued to build on this momentum in April. With 40 affiliates managing a broad range of private markets, liquid alternatives, and differentiated long-only strategies, this is the type of environment where we expect AMG to not only weather a volatile environment well but outperform.
Given that we have strategically evolved towards alternative strategies over the last several years, a number of important secular trends are driving our organic growth story today. In private markets, where our affiliates manage $148 billion in assets, we see opportunities for growth across all 11 affiliates, with the strongest momentum coming in two areas, infrastructure and real estate, where our affiliates manage more than $60 billion, and secondary solutions, where our affiliates manage approximately $50 billion. We expect rising demand for infrastructure strategies as infrastructure investment has become a global imperative due to population growth, the need to modernize aging assets, and an evolving economy shaped by energy security, supply chain realignment, and the rapid growth of digital infrastructure, all against the backdrop of rising inflation.
We also expect ongoing demand for secondary solutions across private equity, infrastructure, and credit, given the role such strategies play in underlying portfolio management for both GPs and LPs to address liquidity, manage duration, and adjust exposures, attributes that are even more important in the environment today given monetization headwinds in private equity. Together, infrastructure and secondary solutions have generated substantial organic growth from both institutional and individual investors over the past 12 months. In liquid alternatives, where our affiliates manage more than $261 billion in assets, we are benefiting most from growth in two trends. Institutional demand for absolute return strategies and the growing focus on after-tax compounding in the wealth channel.
Absolute return strategies, which account for approximately $180 billion in assets, include multi-strategy, global macro, relative value fixed income, and trend following, and are designed to generate returns that have low or no correlation to broader markets. They provide AMG's business with ballast relative to pro-cyclical strategies in private markets and differentiated equities, enhancing the stability of our earnings over time. For the same reasons, clients globally are increasingly attracted to these absolute return strategies, especially as the outlook for the macro environment has become more uncertain. As a result, we had a meaningful uptick in flows in the quarter, driven by institutional demand for absolute return strategies, with contributions from nearly all of our affiliates in liquid alternatives. We expect continued organic growth momentum in these strategies. In addition, within liquid alternatives, we are benefiting from significant client demand for tax-aware long-short strategies.
These strategies account for approximately $69 billion of our AUM in liquid alternative strategies, or about 8% of AMG's business. While tax-loss harvesting has been a secular trend for decades, clients and advisors are increasingly attuned to the impact of their portfolio allocation decisions on compounding returns after tax. AMG has benefited from this underlying secular trend through ongoing organic growth, which has been significant over the past year. As I mentioned, these 4 growth areas, infrastructure, secondary solutions, absolute return strategies, and beta-sensitive long-short strategies, have driven organic growth in the quarter and over the past 12 months. Looking ahead, given the continued tailwinds in these areas and our affiliates' excellent long-term track records, AMG is well-positioned for further growth. As demonstrated over the past five years, our business is strong, diversified, and dynamic.
Through our ability to shape AMG's business profile and scale our earnings power by allocating our capital to investments in new and existing affiliates, we will further evolve our business towards areas of growth and return. Our unique approach and track record as a partner are continuing to resonate with the highest quality independent firms. We have had an active start to 2026 in this area. In January, we completed our investment in BBH Credit Partners, a leading taxable fixed income and credit franchise. In February, we announced a new partnership with HighBrook Investors, a private markets manager operating in the real estate sector. We also announced an incremental minority investment in Garda Capital Partners, an existing highly successful affiliate operating in liquid alternatives. Stepping back from the quarter and to take a longer term view of our business and our strategy.
Over the past five years, we have transformed AMG and evolved our business profile in a way that we believe will benefit shareholders for years to come. During this period, our business generated more than $5 billion in capital, all of which, through our disciplined capital allocation strategy, we have reallocated to both high conviction growth investments and meaningful return of capital to shareholders, demonstrating our commitment to long-term value creation. Together, these strategic actions have resulted in exceptional earnings growth, generating mid-teens compound annual growth rate and economic earnings per share over the past five years. This growth is accelerating. In 2025, economic earnings per share grew by more than 20%, and we expect that growth rate to increase to more than 30% this year. As we look ahead, our capital allocation decision-making will continue to be the most impactful element of our strategy.
We anticipate our business will generate significantly higher levels of capital cumulatively over the next five years, and we expect the impact of deploying it towards growth investments and capital return will further shape and diversify our business profile and fuel our earnings growth. With our unique partnership-centric, cash-generative, return-focused model, we will continue to press our advantages, executing the same proven strategy with the same level of discipline that brought us here. Today, AMG's reputation, value proposition, and capital flexibility have never been stronger. A powerful combination for our firm and for our shareholders. With that, I'll turn it over to Dava.
Thank you, Jay, and good morning, everyone. AMG entered 2026 with significant momentum. Our first quarter results reinforced that strength, highlighted by record net inflows and significant year-over-year growth in Fee-Related Earnings, Adjusted EBITDA, and economic earnings per share. Our alternatives business continues to scale, underpinned by strong organic growth from existing affiliates and further enhanced by the addition of several new high-quality partnerships. These results underscore the strength and resilience of our model as a result of the ongoing execution of our strategy to evolve the business towards areas of secular growth while remaining disciplined in our capital allocation decision-making. Starting with our results for the first quarter, AMG's AUM was $882 billion, the highest level in our history, driven by record positive net inflows for our alternative affiliates and the addition of AUM from new investments.
Our business reached this record AUM level despite market headwinds from broader macro events. Net client cash inflows of more than $22 billion marked our fourth consecutive quarter of positive and increasing net flows, driven by ongoing strength and alternatives. In liquid alternatives, our affiliates generated $25 billion in net inflows, marking another record quarter with most of our liquid alternative affiliates, including AQR, Capula, Garda, Systematica, and Winton, contributing to this strong result. Flows were broad-based. We had net inflows from wealth clients of $15 billion into long short tax-aware strategies, $6 billion in net inflows into absolute return strategies from institutional clients, and $4 billion of inflows into retail products across both beta sensitive and absolute return strategies. This is consistent with broader industry trends of rising allocations to these strategies as investors value the role they play in portfolios across market cycles.
As momentum continues to build across channels, we believe AMG's diversified liquid alternative affiliates are well-positioned to continue to attract new flows over time. Our private market affiliates raised $4 billion in the quarter, primarily driven by Pantheon and secondary strategies, along with infrastructure fundraises at Ara, EIG, and Qualitas Energy. On the heels of a record fundraising year in 2025, we continue to see consistent demand given these affiliates' specialized strategies, deep institutional relationships, and strong long-term track records. Importantly, with multiple private market affiliates contributing across vintages, products, and channels, AMG exhibits a more durable and consistent fundraising pattern, reflecting a structurally diversified model rather than reliance on any single fundraise, differentiating our private markets profile from that of others. To give further color on our private markets profile, we have a distinctive strategic position in the industry.
Nearly 90% of AUM managed by our affiliates in private markets is institutional, largely in drawdown style funds. These drawdown funds form the core offerings of our private market affiliates. Additionally, we have experienced growing demand for these strategies from wealth clients, and we are well-positioned with our differentiated product offerings and capital formation solutions for affiliates to access this long-term trend. Our affiliates' private market strategies are well diversified across strategies, including secondaries, private equity, infrastructure, real estate, and private credit. Our private credit exposure is low, representing approximately 3% of AMG's total assets today. Within private credit, we have limited traditional direct lending exposure given the sale of our stake in Comvest's private credit business last year. More broadly, the credit exposure we have is more opportunistic in nature, including secondaries in private credit and structured credit and relative value in liquid alternatives.
We believe the current credit market environment is creating compelling long-term opportunities for these strategies. In multi-asset and fixed income, our affiliates generated net inflows of $3 billion, mainly driven by BBH Credit Partners, with additional contributions from Baker Street, Artemis, Beutel Goodman, and GW&K. Finally, in equities, net outflows of approximately $9 billion in the quarter reflected ongoing industry and performance headwinds. However, we continue to see pockets of strength in our differentiated long-only business, including consistent positive net flows at Artemis based on its excellent long-term track record of investment performance. In aggregate, our first quarter flows highlight the structural advantages of AMG's diversified business model. With a broad group of affiliates spanning strategies, asset classes, geographies, and client channels, we were able to navigate shifting market conditions and trends while continuing to capture growth opportunities.
As we further evolve our mix towards higher growth alternatives, the resulting incremental diversification enhances the resilience of our cash flows and positions AMG to deliver more consistent, sustainable organic growth across market cycles. Turning to first quarter financial results. We reported Adjusted EBITDA of $317 million, which grew 39% year-over-year. Fee-Related Earnings, which exclude Net Performance Fees, grew 29% year-over-year, driven by positive organic growth, the positive impact of investment performance, and margin expansion at some of our largest affiliates. Net Performance Fee earnings of $49 million in the quarter increased $29 million from the prior year, driven by Capula, Winton, AQR and ValueAct. Economic earnings per share of $8.23 grew 58% year-over-year, driven by these factors and further benefiting from the impact of share repurchases. Moving to second quarter guidance.
We expect Adjusted EBITDA to be in the range of $290 million-$305 million based on current AUM levels reflecting our market blend, which was up 5% quarter-to-date as of April 30th. Including seasonably lower Net Performance Fees of up to $10 million. Based on this, and assuming an adjusted weighted average share count of 26.7 million, we expect second quarter Economic earnings per share to be between $7.60 and $8.01. The midpoint of which represents approximately 45% growth versus Q2 2025. Finally, turning to the balance sheet and capital allocation. Building on an active 2025, we continue to execute our capital allocation strategy in the first quarter of 2026.
With the January close of our partnership with BBH Credit Partners and the February announcement of our new investment in HighBrook and follow-on investment in Garda. In January, conversions related to our 2037 junior convertible trust preferred securities were fully settled in cash. The $174 million in conversion premium effectively represented the repurchase of 600,000 adjusted diluted shares, and the share dilution associated with these securities has now been fully removed from our capital structure. We repurchased approximately $186 million in shares in the first quarter. For the full year, we expect to repurchase approximately $500 million, subject to market conditions and capital allocation activity. Our balance sheet remains in a strong position given our long-dated debt, low leverage level, and access to our revolver.
This is further supported by a healthy underlying business generating recurring annual cash flows that continue to grow. These after-tax cash flows are at record levels, delivering approximately $1 billion annually. With these factors, we are well-positioned to execute our growth strategy across all stages of a market cycle. We have ample capacity to both make growth investments and simultaneously return capital to shareholders. Our strong first quarter results reflect the accelerating momentum in our business and the advantages of our highly diversified affiliate model. Looking ahead, we are excited by the breadth of opportunities in front of us as we continue to evolve our business towards higher growth alternatives. We will remain deliberate and disciplined in deploying capital, investing in growth opportunities with new and existing affiliates, while also consistently returning capital to shareholders. We are confident in our ability to generate meaningful incremental value over time.
We are happy to take your questions.