Prepared remarks
Greetings, and welcome to the AMG Third Quarter 2025 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Patricia Figueroa, Head of Investor Relations for AMG. Thank you. You may begin.
Good morning, and thank you for joining us today to discuss AMG's results for the third quarter of 2025. 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, and 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 of 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, Chief Executive Officer; Tom Wojcik, President and Chief Operating Officer; and Dava Ritchea, Chief Financial Officer. With that, I'll turn the call over to Jay.
Thanks, Patricia, and good morning, everyone. This has been a remarkable year for AMG, marked by record net inflows in alternative strategies and nearly record levels of capital deployed in growth investments across our affiliates. Our third quarter results show the momentum in our business, with a 17% year-over-year increase in EBITDA and a 27% growth rate in economic earnings per share. Moreover, our organic growth profile improved in the third quarter, driven by alternative strategies, which saw $9 billion in firm-wide net inflows, bringing our year-to-date total to $17 billion, representing a 3% annualized organic growth rate. Through the third quarter, AMG has added roughly $76 billion in alternative assets under management, which is an increase of nearly 30% in our total alternative AUM, including $51 billion in net inflows. Currently, our affiliates manage $353 billion in alternative AUM, contributing 55% of our EBITDA on a run rate basis, with substantial contributions from Pantheon and AQR, two of our largest and longest-standing affiliates.
Both firms are leveraging their scale, innovative cultures, and unique expertise to drive strong organic growth for AMG. These factors positively influence our business profile and earnings. We expect each affiliate to contribute positively to AMG's earnings this year. With the significant increase in our alternative AUM, notable growth and margin expansion at AQR and Pantheon, and the positive effects from our growth investments and share repurchases, we anticipate a significant rise in our full-year economic earnings per share in 2026. Looking forward, we have ample opportunities to invest in both new and existing affiliates and to enhance AMG's strategic capabilities to boost our affiliates' success. Our new investment pipeline remains solid, with ongoing discussions with prospective affiliates in private markets and liquid alternatives. Our investment model resonates with top-quality partner-owned firms seeking a partner to support their long-term success while maintaining their independence.
Our strategic capabilities, especially in capital formation, increasingly set AMG apart in our discussions with potential affiliate partners. We recently announced a strategic collaboration with Brown Brothers Harriman, a reputable 200-year-old firm, to create innovative products and deliver structured and alternative credit solutions to the wealth channel, underscoring AMG's value proposition. In the third quarter, we also announced the sale of our minority stake in Comvest's private credit business. Our investment in Comvest was aimed at providing growth capital and strategic support to enhance its credit franchise. We are pleased that our strategic engagement led to a favorable outcome for all stakeholders, including AMG shareholders, with a return of capital nearly three times our purchase price, highlighting the value of our affiliates in alternative strategies. We have committed over $1 billion across five new growth investments so far in 2025, continuing to expand AMG's role in growth areas.
Our capital position is strong, bolstered by the significant proceeds from the sale of our interests. With robust financial flexibility and distinct competitive advantages, we have an excellent opportunity to further drive earnings growth through growth investments and capital returns to shareholders. In summary, this year has been exceptional for AMG regarding both organic growth and new affiliate investments, setting the stage for accelerating EBITDA and earnings growth in 2026. As we advance our strategy, built on over three decades of successful partnerships, we are confident in our ability to sustain long-term earnings growth. Now, I will turn it over to Tom.
Thank you, Jay, and good morning, everyone. AMG's activities over the course of this year illustrate our strategy in action. As we evolve our business mix more toward alternatives, our business is generating strong organic growth in both liquid alternatives and private markets. And we continue to invest in both our affiliates and in AMG's own capabilities to support future growth opportunities. This year, we have entered four new investment partnerships with alternative firms squarely aligned with long-term secular growth trends. We also announced a strategic collaboration to bring structured credit products to the U.S. wealth marketplace with BBH Credit Partners, highlighting the strength of AMG's capital formation capabilities. And we engage strategically with our affiliates across a range of business initiatives, including new product launches, building out adjacent capabilities, and supporting two of our private markets affiliates and their sales to consolidators.
Taken together, these strategic actions and many other elements of our unique model drove significant earnings growth and cash flow generation, which we have invested and will continue to invest for growth. Fueling the execution of our strategy and the forward evolution of our business, while simultaneously returning capital through share repurchases and further delivering value to our shareholders. In the third quarter, AMG delivered $9 billion in net client cash inflows and $17 billion on a year-to-date basis, representing an annualized organic growth rate of 3% thus far in 2025. Our strong organic growth this year reflects rapidly growing client demand for liquid alternative strategies and ongoing momentum in private markets fundraising. In the quarter, our affiliates generated $18 billion in net inflows in alternatives, more than offsetting $9 billion in outflows in active equities and highlighting the advantages of AMG's business profile that is increasingly weighted toward high-growth alternative asset classes.
In liquid alternatives, our affiliates' value proposition continues to resonate with clients. With $14 billion in net inflows, AMG posted the strongest quarterly net flows in liquid alternatives in our history, driven primarily by tax-aware solutions, and supported by positive contributions from a number of affiliates. Client demand for tax-aware strategies remains substantial. And AMG's affiliates offer highly attractive products. And more broadly, AMG's diverse group of affiliates managing liquid alternative strategies is well positioned to deliver excellent risk-adjusted returns for clients and attract new flows over time. Our private markets affiliates raised $4 billion in the quarter, mainly driven by another strong quarter at Pantheon and positive contributions from EIG and Abacus demonstrating the diversity of our affiliates' offerings across private market solutions, credit, private equity, real estate, and infrastructure.
The ongoing fundraising momentum of our private markets affiliates reflects investors' conviction in their specialized investment strategies, along with the impact of ongoing secular growth trends. Looking ahead, the management and performance fee potential across our private markets affiliates, including some of our most recent new investment partnerships, which are not yet reflected in our results, represents a significant source of upside for the long-term earnings profile of our business. As we continue to form new partnerships with growing high-quality independent firms, such as our new investments in Northbridge, Verition, Montefiore, and Qualitas Energy this year, and our strategic collaboration with BBH Credit Partners, we are broadening our exposure to fast-growing specialty areas within alternatives and further diversifying our business. BBH's taxable fixed income franchise has delivered top quartile performance across strategies and market environments.
Our strategic collaboration will bring the firm's industry-leading structured and alternative credit expertise into the U.S. wealth marketplace. As high net worth clients and their advisers continue to drive demand for alternative strategies, credit remains a core focus. And the return characteristics and scalability of structured credit make this area uniquely attractive. BBH is one of the industry's longest tenured and most active players with a differentiated structured credit investment track record across the full capital stack, and in combination with AMG's product development and distribution capabilities, we see significant opportunity to build unique investment solutions to meet growing demand. AMG provided excellent alignment with BBH's goals for a number of reasons. The complementary strengths of our respective businesses, access to significant seed capital, the permanent nature of our model, and strong cultural connectivity across our firms.
The strategic collaboration will accelerate the expansion of BBH's structured credit franchise and will further enhance AMG's position as a leading sponsor of alternative strategies for the U.S. wealth market. The rapidly growing demand in U.S. wealth for distinctive alternative products is one of the most visible mega trends in the asset management industry today. And AMG is uniquely positioned to benefit. AQR has been a leader for more than a decade in developing and delivering excellent investment solutions to U.S. wealth clients and its innovation and tax-aware strategies continue to drive rapid adoption. Pantheon was one of the earliest innovators in limited liquidity vehicles in private markets, and product development and flows are accelerating across its product line. Our collaboration with BBH Credit Partners speaks to the success that AMG has seen thus far in driving growth in alternatives in the wealth channel, and we see significant opportunities ahead.
As clients increasingly look to AMG as the industry's leading entry point to access the differentiated alternative investment capabilities of independent partner-owned firms, AMG's footprint in U.S. wealth is well positioned for rapid growth. Importantly, the success that we are having in the U.S. wealth channel is resonating not only with clients and existing AMG affiliates but also with new investment prospects as accessing this attractive market requires scale and is difficult, if not impossible, for many independent firms to do on their own. As we continue to invest in new partnerships with alternatives firms, we look forward to collaborating with additional affiliates to broaden their reach and expand their platforms. AMG's business has continued to evolve in 2025, driven by our focus on allocating our resources and capital to areas of secular growth. As we execute our strategy, we expect the contribution from alternative businesses to further increase, enhancing our long-term organic growth profile and earnings profile, and we are excited about the opportunities ahead. With that, I'll turn the call over to Dava to discuss our third quarter results and guidance.
Thank you, Tom, and good morning, everyone. It has been an exciting year for AMG. In 2025 to date, we have committed approximately $1.5 billion in capital across growth investments and share repurchases, and we continue to be in a strong position to execute on future growth opportunities and return capital to shareholders, given our significant cash generation and strong balance sheet. I will start by walking through the results for the quarter, then will discuss the positive impact of recent capital activity on our forward earnings power and conclude with a discussion on our balance sheet. In the third quarter, we reported adjusted EBITDA of $251 million, which grew 17% year-over-year. This included $11 million in net performance fee earnings and reflected a full quarter contribution from Verition and Peppertree's final contribution. Fee-related earnings, which exclude net performance fees, grew 15% year-over-year, driven by the positive impact of our investment performance and organic growth in our alternative strategies, partially offset by outflows from fundamental equity strategies.
Economic earnings per share of $6.10 grew 27% year-over-year, additionally benefiting from share repurchases. Now moving to fourth quarter guidance. We expect adjusted EBITDA to be in the range of $325 million and $370 million based on current AUM levels, reflecting our market blend, which was up 1% quarter-to-date as of Friday and including net performance fees of $75 million to $120 million, bringing expected performance fees for this year to between $110 million and $155 million. This guidance includes a full quarter contribution from Montefiore, a full quarter contribution from Comvest's private credit business, and no impact from our announced investments in Qualitas Energy and BBH Credit Partners, which are expected to close in Q4 and Q1 2026, respectively. We expect fourth quarter economic earnings per share to be between $8.10 and $9.26, assuming an adjusted weighted average share count of 28.9 million for the quarter.
Looking further ahead, we anticipate a meaningful increase in our full year adjusted EBITDA and economic earnings per share in 2026, mainly driven by strong organic growth and our capital allocation strategy, and I'll describe each of these further. Organic growth in our existing business is having a meaningful impact on bottom line earnings. Strong organic growth in alternatives, including record inflows in alternatives year-to-date, is driving growth in AUM, having a positive impact on our aggregate fee rate relative to the prior year and incrementally expanding margins at some of our largest alternative affiliates. Furthermore, the approximately $1.5 billion committed to growth investments and share repurchases, combined with the sale of our stakes in two of our private market affiliates, is expected to substantially increase our earnings in 2026. Additionally, we believe there is incremental upside to our earnings potential over time as we strategically engage with each of our five new partners in the next phase of their success.
This combination of organic growth in our existing business and new investment activity has led to strong year-over-year earnings growth so far in 2025 and underpins our confidence in our 2026 earnings profile. Importantly, most of this earnings growth is in fee-related earnings delivered by products with longer expected duration. Finally, turning to the balance sheet and capital allocation. We repurchased approximately $77 million in shares in the third quarter, bringing year-to-date repurchases to approximately $350 million. We are increasing our full year guidance for repurchases and now expect to repurchase at least $500 million, subject to market conditions and capital allocation activity. Our balance sheet remains in a strong position with long-dated debt, significant capacity from ongoing cash generation, and access to our revolver. Additionally, we received pre-tax proceeds of approximately $260 million from the sale of our stake in Peppertree, which closed in the third quarter, and will receive approximately $285 million in proceeds from the sale of our stake in Comvest.
Given our ample financial flexibility, which is further enhanced by the proceeds from these affiliate transactions, we are well-positioned to continue to invest in growth opportunities and return capital to shareholders. We continue to employ a deliberate, strategic, and disciplined approach to allocating our capital and investing in the ongoing growth of our business. We have a diverse and unique set of opportunities available to us, including investments in new affiliate partnerships and alongside existing affiliates, and in AMG capabilities. Through our capital allocation framework, we selectively engage in opportunities that align with our overall business strategy and that we believe will create significant long-term value. And looking ahead, we are confident in our ability to continue to generate substantial value for our shareholders. Now we are happy to take your questions.
Questions and answers
Our first question comes from Bill Katz with TD Cowen.
Jay, maybe one for you. I think the theme coming out of today's call is just the franchise momentum both from a de novo perspective as well as incrementally through inorganic. A, maybe I was wondering if you could just delve a little bit more into BBH, how that sort of rose? Did they seek you out? And then just as you look at the pipeline looking ahead, how should we be thinking about activity levels into next year after a really strong 2025?
Thank you, Bill, for your questions. I'll address the first one regarding our momentum. Tom, could you discuss BBH, and then we can return to talk about the pipeline? This has indeed been a landmark year for AMG, reflecting our strategic efforts over the past six years, both through acquisitions and organic growth. Our flow profile, particularly in alternatives, has been steadily improving. This quarter marks our second significant positive result, and we are optimistic about its ongoing strength. Our strategic collaboration with affiliates to bolster their long-term success has resulted in substantial achievements at firms like Pantheon, AQR, Artemis, Garda, and others, where we are focusing on business development to enhance their value. We have seen unprecedented activity this year regarding new investments, with nearly record capital deployment levels. We announced four new investments along with a strategic partnership with BBH, which Tom will elaborate on shortly.
We also executed two stake sales through consolidators Peppertree and Comvest, making this an extraordinarily busy year. Currently, alternatives account for 55% of our EBITDA on a run-rate basis, and we are working toward increasing that to over two-thirds in the coming years. We believe this will support our organic growth and provide us with good opportunities for new investments. Additionally, our commitment to disciplined capital allocation has led to $350 million in repurchases this year, and we've updated our guidance to at least $500 million for 2025. Overall, this year has been remarkable in both new investments and organic growth, setting the stage for accelerating EBITDA and earnings growth in 2026. Now, Tom, please share more details about BBH.
Yes, happy to. Thanks for your question, Bill. I think Jay provided a lot of very good context in terms of our strategy overall. And really, when we think about the BBH strategic collaboration, it aligns very well with a number of different elements of our strategy and key themes and areas that we're really focused on, like alternatives and like the growing opportunity for alternatives in U.S. wealth. Over the course of the past couple of years, you've heard us on earnings calls and some of our meetings talk about this repositioning that we've gone through in our U.S. wealth business, really to just focus that organization on the opportunity in alternatives. We've built a new affiliate product strategy team. We've channelized our sales force to address both RIAs and the wire house opportunity. And we're partnering very closely with affiliates like Pantheon to build, seed, and distribute differentiated investment solutions to U.S. wealth clients.
So in a lot of ways, the strategic collaboration with BBH is both a recognition of the success that we've had to date in going through that change to our U.S. wealth platform and the opportunity and the success that we're seeing, but also the next chapter in terms of opportunity to build on that success with a great partner like BBH. BBH is one of the most respected and trusted brands in financial services globally, and we're very excited to work closely together with them. You asked how this came together. And effectively, I would say we found each other. They had an opportunity that they were thinking about in terms of an excellent structured credit franchise. We had a strong view on structured credit as an opportunity in U.S. wealth, and there was a real complementary opportunity for us to come together and try and build something together. We do think that BBH choosing AMG to be their strategic collaboration partner is a very strong statement on our value proposition in U.S. wealth.
And I mentioned some of this in my prepared remarks, but we think AMG was the right partner for them for a number of reasons. As I mentioned, the complementary strengths of our respective businesses there in terms of underwriting, pricing, and risk management around structured credit, and on our side, product development and capital formation resources, access to significant seed capital that we underwrote as part of this collaboration. The permanent nature of our model is also, very importantly, really strong cultural connectivity across our firms. We spent a lot of time together, got to know one another very well. And I think we have a shared vision for where we can take this. So collectively, we're really excited about the collaboration. We think it will materially accelerate the expansion of BBH's structured credit capabilities and also further enhance AMG's position as a leading sponsor of alternative strategies for the U.S. wealth market as we continue to build momentum in that area. So Jay, maybe back to you on the pipeline.
It was very validating and rewarding that our capital formation capabilities, which we've invested heavily in repositioning, were a centerpiece of our strategic collaboration with BBH. We believe this will allow us to drive more product in the wealth space around alternatives, and we are excited about that. Regarding the pipeline, we are seeing near record levels of deployment from our perspective and continue to identify opportunities to invest for growth in both new and existing affiliates. Our pipeline reflects this opportunity, and we remain focused on areas experiencing secular growth, both within private markets and liquid alternatives. We are particularly interested in businesses where AMG's strategic capabilities can add value and firms looking for a strategic partner. This has increasingly become part of our dialogue and a unique area for our success. We aim to enhance our affiliates' business plans and initiatives through active engagement, and we have a proven track record of providing capital and resources in business development, product development, and distribution.
We are excited about the prospect of adding new affiliates in areas where we can help them grow. Our ability to enhance the advantages of partner-owned firms, while preserving their independence, has made us more attractive in the market. We have a significant opportunity to invest our capital in growth initiatives and will remain disciplined to ensure we deploy it in high-quality opportunities, targeting mid- to high-teens returns as we have in the past. We have been successful in achieving this over the last six years, but if we cannot find suitable investment opportunities, we will consider returning capital through share repurchases, having reduced our share count by 40% during this period. In summary, we feel optimistic about our new investment opportunities and our ability to originate and invest in new affiliates in areas of secular growth. We're confident that we will continue to evolve our business meaningfully through these growth investments and enhance shareholder value over time.
Our next question comes from the line of Alex Blostein with Goldman Sachs.
So lots of enthusiasm from you guys in 2026. It feels like it's a little bit earlier than typical to give guidance on 2026, but I was wondering if you could help contextualize what that could mean for next year given a number of moving pieces including you alluded to expansion in the margins at AQR and Pantheon, that sounds like it's an important part of the story here as well. So any way you can help us frame what sort of the growth expectations you might have so far into 2026 would be helpful.
Thank you, Alex, and good morning. I'll let Dava take the lead on this. To give some context, one reason we are excited about 2026 is that when we make new investments, the year we invest typically reflects only a partial impact. The full contribution from those investments will occur in the following year, which is 2026 in this case. Additionally, we've benefited this year from organic growth, which started around the middle of the year and has sustained its momentum. As you noted, there's also the advantage of this growth occurring in areas where we have opportunities for margin expansion. I'll let Dava share more about our insights and outlook. While it's a bit early to finalize predictions for 2026, we can provide a general sense of what's ahead.
That's right. Thanks, Jay, and thanks, Alex, for the question. At a high level, we expect the combination of new investments, share repurchases, and the impact of net inflows from alternatives to be impactful to our 2026 EPS. Really, given the strategic evolution of our business profile over the last six years towards greater participation in alternatives, the EBITDA impact of the growth that we're seeing today is really meaningful. The largest driver of that has been a turnaround in our net flow profile as we've moved the business from what was shrinking organically around 10% annually to a business that today grew 3% annualized on a year-to-date basis and 5% annualized this quarter. And as we've experienced an even larger EBITDA contribution, the past two quarters from our net flows than our organic growth rate would indicate. So we're seeing some further expansion in EBITDA than you would expect in our net organic growth rate.
This trend is occurring because of the bifurcation we've seen between strong organic growth on the alternative side and the headwinds on the traditional side. The growth in alternatives is moving the business towards a higher fee and longer lock strategies that, in some cases, have future performance fee and carry potential while the outflows have been more isolated to lower fee open-ended equity funds. So even though we tend to own more of the firms where we're experiencing outflows, the higher fee rate from the alternative products has more than offset this impact. And we'll give some further guidance on the next earnings call in terms of our overall thoughts on 2026.
Dava, you might just want to also talk about just the composition between NFRE and PRE just briefly. I think that's also something that's meaningful that's happening.
Sure. What's exciting is that we've observed notable progress this year, thanks to our new investment strategy and organic growth. Our year-over-year aggregate fee rate and real growth in fee-related earnings have both increased by about 15% compared to the same quarter last year. Additionally, the composition of our business is shifting towards a greater contribution from fee-related earnings.
Our next question comes from the line of Dan Fannon with Jefferies.
This is Rick Roy on for Dan. So you reported another quarter of accelerating liquid alts flows, and it sounds like momentum in the tax-aware AQR strategies continues to be a big contributor towards that. So maybe on that, I was hoping you could add a little bit more color on the full diversity of flows coming from the AQR broader franchise and maybe perhaps also describing the performance fee potential of the broader set of AQR strategies that are gathering inflows? And then maybe separately, if you could note any notable private markets fund raises to be aware of in the near term and into 2026, that would be helpful.
Thanks, Rick. I'm going to let Tom just sort of give you an overview of flows, and I'm sure within that, he will drill down on some of the trends that we're seeing.
Rick, thanks for the question. And Jay, actually, maybe after I go through this, you can give a little bit more color on AQR specifically, but I'll give you the whole picture and then we can fill in from there. To put the whole thing in context, our flows are primarily a function of three key drivers. The first is the alignment between our affiliates' investment strategies and overall client demand trends. The second is the evolution of our business mix and Dava just talked about some of this as to Jay, over time through both organic growth rates, the relative organic growth rates of our different business lines, and the investments that AMG is making to form new partnerships and growth areas in line with our strategy. And then finally, the third driver is really the lift that we're able to provide at the AMG level to our affiliates through new product development and distribution. In terms of alignment with client demand trends, with approximately 55% of our EBITDA now coming from alternative asset classes, and a growing portion coming from wealth clients, our overall positioning is very well aligned with forward trends.
In terms of where we go from here, as we look to continue to push that percentage of EBITDA from all closer to the two-thirds level over the course of time, all of our recent new investment partnerships have been focused on alternatives. And significantly more than 100% of our total net flows over the past few years have also been in alternatives. And over that same time frame, we've grown alternatives AUM on our U.S. wealth platform from about $1 billion to more than $7 billion. And you're seeing the cumulative impact of that business mix evolution on AUM, on our fee rate, as Dava just talked about, and on the contribution of EBITDA that's coming from alternatives overall. So to go into the individual buckets in private markets, as I mentioned in my prepared remarks, our affiliates raised $4 billion in the quarter, and that's really a continuation of momentum that we've been seeing over the course of the past several years.
It was another very strong quarter for Pantheon, alongside positive contributions from EIG and Abacus. And I think importantly, that really demonstrates the diversity of our affiliate offerings across a variety of different areas, private market solutions, credit, private equity, real estate, and infrastructure, where our affiliates are real leaders in these specialized strategies in the market. Liquid alternatives was another record quarter for us, $14 billion in net inflows. And as you referenced in your question, driven primarily by solutions for the wealth channel focused on after-tax returns at AQR, but importantly, with positive contributions from a number of our liquid alternative affiliates, we're seeing real breadth in that area as well. This is now the fifth consecutive quarter where we've seen positive flows in liquid alternatives. And over that time period, we've seen $38 billion in total net inflows.
Equities, we continue to see headwinds, and that's in line with the overall industry. You saw that this quarter with about $9 billion in outflows. That said, it's been another good year for beta, and beta continues to support AUM levels overall. And we're also seeing some pockets of strength, Jay mentioned earlier, Artemis, River Road. So there are some real bright spots that we're excited about there also. So when you put all those things together kind of back into that initial framework, better alignment with overall client demand trends as we continue to shift our business, continued investments in new affiliates, active collaboration with our affiliates to develop and create innovative new products that can help to drive client demand through our capital formation capabilities, together with our confidence in our ability to continue and maybe even enhance and accelerate the impact of these growth drivers going forward, we feel like we're in a really strong position from an overall franchise perspective in terms of forward organic growth opportunities.
Let me specifically address AQR. It has been very beneficial to our flow profile. AQR is a highly diverse business, one of the leading liquid alternatives firms globally. It has a significant tax-aware wealth business that operates differently from its overall institutional liquid alternatives business. Additionally, it has a long-only business under the 40 Act. Due to its strong performance, AQR is experiencing inflows in each of these segments. It's important to note that it is a large, diverse business with various strategies and numerous opportunities. Last quarter, I mentioned a paradigm shift in the wealth channel, and AQR is at the forefront of this shift. The fundamental strategies for harvesting losses have existed for decades, but AQR has introduced new tools and capabilities. They have effectively capitalized on investing for after-tax outcomes through liquid alternatives, particularly using long-short investing techniques aimed at either tracking market data or achieving absolute returns, resulting in superior after-tax outcomes and significant inflows.
The focus shift by RIAs towards after-tax outcomes, moving away from assessing pre-tax returns, is still in its early stages, presenting a great opportunity for AQR. They have been leaders in liquid alternatives for over 20 years, and their capacity to introduce new strategies and products is among the best in the industry. AQR has been constructing this tax-aware business for a while, developing a comprehensive suite of products including separate accounts, limited partnerships, and mutual funds. Their strategies generate management fees and have the potential for performance fees. AQR can increase their fee rates over time as their flow mix evolves and has an opportunity to boost their margins, contributing to our EBITDA. I provided most of this background in the previous call, so I wanted to update you on our current views. AQR enjoys a first-mover advantage with a unique culture and a supportive operating environment compared to many competitors.
It takes time to establish platforms and penetrate the largest RIAs and integrate systems at wirehouses. AQR has a more than two-year lead and is currently finalizing onboarding with several of the largest wealth platforms. There are still many segments of the market where they can distribute their products, and we anticipate continued momentum for AQR in this regard. Regarding their institutional business, AQR's performance has created a strong pipeline for liquid alternatives. We are witnessing increased interest in liquid alternatives on the institutional side as well. As for AQR's assets, they have grown from around $100 billion at the start of 2024 to $166 billion as of September 30, showcasing significant growth driven mainly by organic flows. Thank you for your question.
Ladies and gentlemen, this concludes our Q&A session and will conclude our call today. We thank you for your interest and participation. You may now disconnect your lines.