The stock market has done well so far in 2017, and investors in asset managers like Affiliated Managers Group (NYSE:AMG) have hoped that favorable trends would lead to boosted performance. Yet one issue that some companies in the finance business have had to struggle with is the idea that their traditional businesses don't add as much value as clients want to see.

Coming into Monday's first-quarter financial report, AMG shareholders wanted to see solid earnings growth with at least minimum increases in revenue. AMG only delivered the first half of that equation, and it said that even though it had a successful quarter, trends favored its alternative strategies over its more typical equity offerings. Let's take a closer look at Affiliated Managers Group to see what happened during the quarter and what's ahead.

Universe of AMG-related investments.

Image source: Affiliated Managers Group.

AMG keeps fighting

Affiliated Managers Group's first-quarter results were a bit mixed, showing that challenges in asset management continue. Revenue came in at $544.3 million, down a fraction of a percentage point from year-ago levels and falling short of the roughly $552 million investors had wanted to see. Economic net income picked up the slack, though, rising 15% to $183.2 million and producing adjusted earnings of $3.21 per share. That was slightly better than the consensus forecast for $3.18 per share in economic earnings.

Looking more closely at the report, one surprising aspect of AMG's business was that the company still suffered from investor outflows even in an improving market. The company suffered net cash flows outward of $1.3 billion, and although that was slower than the pace of outflows in the fourth quarter, it still reflected a headwind on revenue and earnings. The company finished with $754 billion in assets under management as of the end of the quarter, with the market giving the company a much-needed $30 billion boost to total value.

As we've seen in past quarters, expense controls were a key aspect of Affiliated Managers Group's bottom-line gains. Compensation expenses were up nearly 7%, but declines in overhead and other operating expenses helped to offset that gain and keep overall expense increases to just $1.1 million.

CEO Sean Healey was happy with how the company did, noting that assets under management are now at a new record high. In Healey's eyes, the performance reflects "positive organic growth from net client cash flows over the period, the long-term track records of alpha generation by our affiliates, and the addition of excellent new affiliates."

Can AMG keep climbing?

Affiliated Managers Group has plenty of growth opportunities going forward. As the CEO put it, "The best alpha managers will gain increasing market share, and given their long-term records of investment outperformance in attractive return-oriented areas, we expect our affiliates to benefit from this trend."

Moreover, AMG is excited about expanding its network. The company believes investing in new affiliate entities will allow it to enhance the overall value proposition it offers its clients.

Still, it will be interesting to see the extent to which the shift toward alternative investments continues. During the quarter, $4.2 billion poured into alternative investments at AMG -- that compared to $4.6 billion outflows from U.S. equities and $1.1 billion outflows on the global equity side. Investors appear to be looking for ways to profit from markets outside of traditional equities, perhaps fearing a pullback at some point.

This was also the first quarter that AMG didn't give future guidance. Going forward, the asset manager will only provide updates at the beginning of the year.

Affiliated Managers Group shareholders didn't immediately respond to the news, and it's unclear whether strong earnings will outweigh the longer-term negative implications that overall client outflows might suggest. As long as markets behave well, AMG is aiming toward outperforming broader market benchmarks and pulling in business from growth-hungry investors in the months and years to come.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Affiliated Managers Group. The Motley Fool has a disclosure policy.