AMG's business strategy is based upon the belief that direct equity ownership is a powerful incentive for Affiliate managers to achieve strong long-term financial performance. Continued focus on providing excellent client service, superior investment results, and business growth by Affiliates translates into strong returns for both Affiliate managers and AMG.

Each Affiliate investment has been negotiated individually within a proven framework based on the specific characteristics of the firm and the goals of its principals. AMG generally purchases between 50 and 70 percent of an Affiliate, and Affiliate managers as a group continue to hold the remaining interest. Typically, as a result of an investment by AMG, an Affiliate's equity is more broadly distributed among the management partners, providing both senior and junior managers the motivation to increase the value of their equity through ongoing superior investment performance and client service.

In contrast to other entities which attempt outright acquisitions of investment firms, AMG's investment structure aligns the interests of the Affiliate, its clients, and AMG. Affiliate managers typically retain control of the operational management and distinct culture that shaped their success through a customized revenue sharing agreement that leaves day-to-day operations (including compensation and budgeting decisions) to the management of the Affiliate. In addition, AMG's approach provides a mechanism whereby Affiliate managers can individually realize the value of their retained equity and transfer their interests to the next generation within the firm. Clients of AMG's Affiliates benefit from seamless management and ownership transition as well as an uninterrupted focus on service, performance and growth. AMG also benefits from the continued success of its Affiliates -- indeed, AMG believes that its structure not only incents the growth of its Affiliates, but also is most attractive to boutique firms that anticipate future growth and want to retain equity upside and independence while implementing a succession plan.