Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners Fund added 6.18% in the fourth quarter, taking returns for the full year to 23.58%, well ahead of its absolute return goal. However, the S&P 500 rallied 11.03% in the fourth quarter, taking the index’s full-year returns to 28.71%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Longleaf Partners Fund, in its Q4 2021 investor letter, mentioned Affiliated Managers Group, Inc. (NYSE: AMG) and discussed its stance on the firm. Affiliated Managers Group, Inc. is a West Palm Beach, Florida-based international investment management company with a $5.6 billion market capitalization. AMG delivered a -13.83% return since the beginning of the year, while its 12-month returns are up by 1.28%. The stock closed at $141.76 per share on February 25, 2022.
Here is what Longleaf Partners Fund has to say about Affiliated Managers Group, Inc. in its Q4 2021 investor letter:
“Affiliated Managers Group (AMG) (61%, 3.53%; 9%, 0.68%), the diversified assetmanagement holding company, was the top contributor after three consecutive quarters of >20% earnings per share (EPS) growth. Despite the strong, consistent FCF and long-term revenue growth, the primary reason that the stock has traded for low multiples was the company’s consolidated net outflows in the last few years. While most AMG strategies have grown their AUM with good performance and positive inflows, several large quantitative strategies with lower fees than the rest of AMG had been shrinking quickly. However, this year’s third quarter marked AMG’s first consolidated positive net inflows since 2018 due to strong demand for its Alternatives and Multi-Asset funds. Another reason that AMG sells for such a low multiple is that many supposed peers sell for similar multiples, but in reality most of these “peers” are tethered far more to the S&P than the majority of AMG’s public equity managers, and AMG has far more alternative asset managers than is widely recognized. AMG also closed the acquisition of a majority stake in Parnassus, a successful ESG manager and great addition to its portfolio. Our appraisal of AMG’s value is up over 40% this year, and the stock appreciated even more. Yet shares still trade for less than 65% of our appraisal value and 9.5x forward FCF.”
Investments, Finance
Our calculations show that Affiliated Managers Group, Inc. (NYSE: AMG) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. AMG was in 32 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 30 funds in the previous quarter. Affiliated Managers Group, Inc. (NYSE: AMG) delivered a -16.70% return in the past 3 months.
In January 2022, we published an article that includes AMG in the 10 Stocks to Buy According to Mason Hawkins’ Southeastern Asset Management. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
