Artisan Partners Asset Management Inc

Previous wording

We are an investment management firm focused on providing high-value added, active investment strategies in asset classes for sophisticated clients around the world. As of December 31, 2023, our ten autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.

Current wording

We are an investment management firm focused on providing high value-added, active investment strategies for sophisticated clients around the world. As of December 31, 2024, our 11 autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.

Previous wording

We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of December 31, 2023, approximately 76% of our assets under management were managed for clients and investors domiciled in the U.S. and 24% of our assets under management were managed for clients and investors domiciled outside of the U.S.

Current wording

We offer our investment management capabilities primarily to sophisticated investors that operate with institutional decision-making processes and longer-term investment horizons. We employ knowledgeable and investment focused relationship managers who are directly aligned with our investment teams, and we pair them with regional and distribution channel experts. We provide access to our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of December 31, 2024, approximately 75% of our AUM were managed for clients and investors domiciled in the U.S. and 25% of our AUM were managed for clients and investors domiciled outside of the U.S.

Previous wording

Over shorter time periods, changes in our business and financial results are largely driven by market conditions and fluctuations in our assets under management that may not necessarily be the result of our long-term investment performance or the long-term demand for our strategies. For this reason, we expect that our business and financial results will be lumpy over time.

Current wording

Over shorter time periods, changes in our business and financial results are largely driven by market conditions and fluctuations in our AUM that may not necessarily be the result of our long-term investment performance or the long-term demand for our strategies. For this reason, we expect that our business and financial results will be lumpy over time.

Previous wording

We strive to maintain a financial model that is transparent and predictable. Currently, we derive nearly all of our revenues from investment management fees, most of which are based on a specified percentage of clients’ average assets under management. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues.

Current wording

We strive to maintain a financial model that is transparent and predictable. We derive nearly all of our revenues from investment management fees, most of which are based on a specified percentage of clients’ average AUM. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues.

Previous wording

•During the year ended December 31, 2023, our assets under management increased to $150.2 billion, an increase of $22.3 billion, or 17%, compared to $127.9 billion at December 31, 2022, as a result of $27.1 billion of market appreciation, partially offset by $4.1 billion of net client cash outflows, and $0.7 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders.

Current wording

•During the year ended December 31, 2024, our AUM increased to $161.2 billion, an increase of $11.0 billion, or 7%, compared to $150.2 billion at December 31, 2023, as a result of $15.9 billion of market appreciation, partially offset by $3.7 billion of net client cash outflows, and $1.2 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders.

Previous wording

•Average assets under management for the year ended December 31, 2023 was $139.3 billion, a decrease of 1.6% from the average of $141.5 billion for the year ended December 31, 2022.

Current wording

•Average AUM for the year ended December 31, 2024 was $160.2 billion, an increase of 15.0% from the average of $139.3 billion for the year ended December 31, 2023.

Previous wording

•We earned $975.1 million in revenue for the year ended December 31, 2023, a 2% decrease from revenues of $993.3 million for the year ended December 31, 2022.

Current wording

•We earned $1,111.8 million in revenue for the year ended December 31, 2024, a 14.0% increase from revenues of $975.1 million for the year ended December 31, 2023.

Previous wording

•Our GAAP operating margin was 31.1% in 2023, compared to 34.6% in 2022. Adjusted operating margin was 31.6% in 2023, compared to 34.3% in 2022.

Current wording

•Our GAAP operating margin was 33.0% in 2024, compared to 31.1% in 2023. Adjusted operating margin was 33.8% in 2024, compared to 31.6% in 2023.

Previous wording

•We generated $3.19 of earnings per basic and diluted share and $2.89 of adjusted EPS.

Current wording

•We generated $3.66 of earnings per basic and diluted share and $3.55 of adjusted EPS.

Previous wording

•We declared and distributed dividends of $2.66 per share of Class A common stock during 2023.

Current wording

•We declared and distributed dividends of $3.16 per share of Class A common stock during 2024.

Previous wording

•We declared, effective January 30, 2024, a quarterly dividend of $0.68 per share of Class A common stock with respect to the December 2023 quarter and a special annual dividend of $0.34 per share, for a total of $2.78 of dividends per share with respect to 2023.

Current wording

•We declared, effective February 4, 2025, a quarterly dividend of $0.84 per share of Class A common stock with respect to the December 2024 quarter and a special annual dividend of $0.50 per share, for a total of $3.48 of dividends per share with respect to 2024.

Previous wording

Limited partners of Holdings, some of whom are employees, held approximately 14% of the equity interests in Holdings as of December 31, 2023. Our results reflect that significant noncontrolling interest.

Current wording

Limited partners of Holdings, some of whom are employees, held approximately 13% of the equity interests in Holdings as of December 31, 2024. Our results reflect that significant noncontrolling interest.

Previous wording

During the year ended December 31, 2023, certain limited partners of Holdings exchanged 163,345 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 163,345 shares of Class A common stock. In connection with the exchanges, APAM received 163,345 GP units of Holdings.

Current wording

During the year ended December 31, 2024, certain limited partners of Holdings exchanged 1,173,667 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 1,173,667 shares of Class A common stock. In connection with the exchanges, APAM received 1,173,667 GP units of Holdings.

Previous wording

APAM’s equity ownership interest in Holdings increased from 85% at December 31, 2022 to 86% at December 31, 2023, as a result of these transactions and other equity transactions during the period.

Current wording

APAM’s equity ownership interest in Holdings increased from 86% at December 31, 2023 to 87% at December 31, 2024, as a result of these transactions and other equity transactions during the period.

Previous wording

Changes to our operating results from one period to another are primarily caused by changes in the amount of our assets under management. Changes in the relative composition of our assets under management among our investment strategies and vehicles and the effective fee rates on our investment products also impact our operating results.

Current wording

Changes to our operating results from one period to another are primarily caused by changes in the amount of our AUM. Changes in the relative composition of our AUM among our investment strategies and vehicles and the effective fee rates on our investment products also impact our operating results.

Previous wording

The amount and composition of our assets under management are, and will continue to be, influenced by a variety of factors including, among others:

Current wording

The amount and composition of our AUM are, and will continue to be, influenced by a variety of factors including, among others:

Previous wording

The table below sets forth changes in our total assets under management:

Current wording

The table below sets forth changes in our total AUM:

Previous wording

During 2023 our assets under management increased by $22.3 billion due to $27.1 billion of market appreciation, partially offset by $4.1 billion of net client cash outflows and $0.7 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders. For the year, 10 of our 25 investment strategies had net inflows totaling $6.2 billion, which were offset by $10.3 billion of net outflows from the remaining strategies.

Current wording

During 2024 our AUM increased by $11.0 billion due to $15.9 billion of market appreciation, partially offset by $3.7 billion of net client cash outflows and $1.2 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders. For the year, 13 of our 25 investment strategies had net inflows totaling $5.8 billion, which were offset by $9.5 billion of net outflows from the remaining strategies.

Previous wording

We monitor the availability of attractive investment opportunities relative to the amount of assets we manage in each of our investment strategies and the velocity at which the strategies are experiencing inflows. When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate assets under management may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy. We believe that management of our investment capacity protects our ability to manage assets successfully, which protects the interests of our clients and, in the long term, protects our ability to retain client assets and maintain our profit margins.

Current wording

We monitor the availability of attractive investment opportunities relative to the amount of assets we manage in each of our investment strategies and the velocity at which the strategies are experiencing inflows. When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate AUM may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy. We believe that management of our investment capacity protects our ability to manage assets successfully, which protects the interests of our clients and, in the long term, protects our ability to retain client assets and maintain our profit margins.

Previous wording

As of the date of this filing, the Artisan High Income Fund, Artisan International Value Fund and Artisan International Small-Mid Fund are closed to most new investors and their respective strategies have limited availability to most new client relationships. In addition, we are actively managing the capacity of our U.S. Small-Cap Growth strategy with respect to new client relationships.

Current wording

As of the date of this filing, the Artisan High Income Fund, Artisan International Value Fund and Artisan International Small-Mid Fund are closed to most new investors and their respective strategies are generally not accepting new client relationships. From time to time when Artisan Partners believes the strategy has capacity, it may, however, accept a new separate account relationship at its discretion. In addition, we are actively managing the capacity of our U.S. Small-Cap Growth strategy with respect to new client relationships.

Previous wording

The unaudited table on the following page sets forth the average annual total returns for each composite and its respective benchmark (and style benchmark, if applicable) over a multi-horizon time period as of December 31, 2023. Returns for periods less than one year are not annualized.

Current wording

The unaudited table on the following page sets forth the average annual total returns (gross of fees) for each composite and its respective benchmark (and style benchmark, if applicable) over a multi-horizon time period as of December 31, 2024. Returns for periods less than one year are not annualized.

Previous wording

The tables below set forth changes in our assets under management by investment team:

Current wording

The tables below set forth changes in our AUM by investment team:

Previous wording

The goal of our marketing, distribution and client services efforts is to establish and maintain a client base that is diversified by investment strategy, client type and distribution channel. As distribution channels have evolved to have more institutional-like decision making processes and longer-term investment horizons, we have expanded our distribution efforts into those areas. The table below sets forth our assets under management by distribution channel:

Current wording

The goal of our marketing, distribution and client service efforts is to establish and maintain a client base that is diversified by investment strategy, client type and distribution channel. As distribution channels have evolved to have more institutional-like decision making processes and longer-term investment horizons, we have expanded our distribution efforts into those areas. The table below sets forth our AUM by distribution channel:

Previous wording

Our institutional channel includes assets under management sourced from defined contribution plan clients, which made up approximately 9% of our total assets under management as of December 31, 2023.

Current wording

Our institutional channel includes AUM sourced from defined contribution plan clients, which made up approximately 8% of our total AUM as of December 31, 2024. Across our institutional, intermediary and retail channels, we generally consider approximately 59% of our AUM as of December 31, 2024 to be attributed to intermediated wealth clients.

Previous wording

The following tables set forth the changes in our assets under management by vehicle type:

Current wording

The following tables set forth the changes in our AUM by vehicle type:

Previous wording

The following table sets forth our assets under management by asset class:

Current wording

The following table sets forth our AUM by asset class:

Previous wording

As of December 31, 2023, Artisan Funds comprised $66.5 billion, or 44%, of our assets under management. For the year ended December 31, 2023, fees from Artisan Funds represented $562.8 million, or 58%, of our revenues. Our contractual tiered fee rates for the series of Artisan Funds range from 0.60% to 1.05% of fund assets, depending on the investment strategy, the amount invested and other factors.

Current wording

As of December 31, 2024, Artisan Funds comprised $69.8 billion, or 43%, of our AUM. For the year ended December 31, 2024, fees from Artisan Funds represented $636.2 million, or 57%, of our revenues. Our contractual tiered fee rates for the series of Artisan Funds range from 0.60% to 1.05% of fund assets, depending on the investment strategy, the amount invested and other factors.

Previous wording

As of December 31, 2023, Artisan Global Funds comprised $6.3 billion, or 4%, of our assets under management. For the year ended December 31, 2023, fees from Artisan Global Funds represented $43.5 million, or 4%, of our revenues. Our contractual fee rates for Artisan Global Funds range from 0.50% to 1.85% of assets under management.

Current wording

As of December 31, 2024, Artisan Global Funds comprised $7.8 billion, or 5%, of our AUM. For the year ended December 31, 2024, fees from Artisan Global Funds represented $52.6 million, or 5%, of our revenues. Our contractual fee rates for Artisan Global Funds range from 0.50% to 1.85% of AUM.

Previous wording

The weighted average management fee rate paid by our Artisan Funds and Artisan Global Funds clients in the aggregate was 0.901%, 0.907%, and 0.912%, for the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

The weighted average management fee rate paid by our Artisan Funds and Artisan Global Funds clients in the aggregate was 0.887%, 0.901%, and 0.907%, for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

Assets under management within the “separate accounts and other” category consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to clients for whom we provide investment models but do not have discretionary investment authority. Assets within the “separate accounts and other” category comprised $77.4 billion, or 52%, of our assets under management as of December 31, 2023. For the year ended December 31, 2023, fees from these clients represented $368.8 million, or 38%, of our revenues.

Current wording

AUM within the “separate accounts and other” category consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to clients for whom we provide investment models but do not have discretionary investment authority. Assets within the “separate accounts and other” category comprised $83.6 billion, or 52%, of our AUM as of December 31, 2024. For the year ended December 31, 2024, fees from these clients represented $423.0 million, or 38%, of our revenues.

Previous wording

Traditional separate account clients are generally subject to standard fee schedules that vary by investment strategy and, through the application of standard breakpoints, reflect the size of the account and client relationship. The weighted average management fee rate paid by our traditional separate account clients was 0.489%, 0.484%, and 0.484% for the years ended December 31, 2023, 2022 and 2021, respectively. There are a number of exceptions to our standard fee schedules, including exceptions based on the nature of a client relationship and the aggregate value of a client’s assets under our management. In general, our effective rate of fee for a particular client relationship declines as the assets we manage for that client increase, which we believe is typical for the asset management industry.

Current wording

Traditional separate account clients are generally subject to standard fee schedules that vary by investment strategy and, through the application of standard breakpoints, reflect the size of the account and client relationship. The weighted average management fee rate paid by our traditional separate account clients was 0.472%, 0.489%, and 0.484% for the years ended December 31, 2024, 2023 and 2022, respectively. There are a number of exceptions to our standard fee schedules, including exceptions based on the nature of a client relationship and the aggregate value of a client’s assets under our management. In general, our effective rate of fee for a particular client relationship declines as the assets we manage for that client increase, which we believe is typical for the asset management industry.

Previous wording

A number of our investment strategies are accessible to certain types of employee benefit plans through Artisan-branded collective investment trusts. We act as investment adviser to the collective investment trusts and earn a management fee for providing this service. The weighted average management fee rate paid by our Artisan-branded collective investment trust clients was 0.665%, 0.714%, and 0.729% for the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

A number of our investment strategies are accessible to certain types of employee benefit plans through Artisan-branded collective investment trusts. We act as investment adviser to the collective investment trusts and earn a management fee for providing this service. The weighted average management fee rate paid by our Artisan-branded collective investment trust clients was 0.701%, 0.665%, and 0.714% for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

Artisan serves as the investment manager and acts as the general partner for certain Artisan Private Funds. Under the terms of these agreements, Artisan earns a management fee, and for certain funds is entitled to receive either an allocation of profits or a performance-based fee. The weighted average management fee rate paid by our Artisan Private Funds clients was 0.654%, 0.809%, and 0.786% for the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

Artisan serves as the investment manager and acts as the general partner for certain Artisan Private Funds. Under the terms of these agreements, Artisan earns a management fee, and for certain funds is entitled to receive either an allocation of profits or a performance-based fee. The weighted average management fee rate paid by our Artisan Private Funds clients was 0.447%, 0.654%, and 0.809% for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

The weighted average management fee rate paid by clients within the “separate accounts and other” category in the aggregate was 0.508%, 0.512% and 0.513% for the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

The weighted average management fee rate paid by clients within the “separate accounts and other” category in the aggregate was 0.494%, 0.508% and 0.512% for the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

Because, as is typical in the asset management industry, our rates of fee decline as the assets under our management in a relationship increase, and because of differences in our fees by investment strategy or investment vehicle, a change in the composition of our assets under management, in particular a shift of assets to strategies or vehicles with lower effective rates of fees, could have a material impact on our overall weighted average rate of fee. See “—Qualitative and Quantitative Disclosures Regarding Market Risk—Market Risk” for a sensitivity analysis that demonstrates the impact that certain changes in the composition of our assets under management could have on our revenues.

Current wording

Because, as is typical in the asset management industry, our rates of fee decline as the assets under our management in a relationship increase, and because of differences in our fees by investment strategy or investment vehicle, a change in the composition of our AUM, in particular a shift of assets to strategies or vehicles with lower effective rates of fees, could have a material impact on our overall weighted average rate of fee. See “—Qualitative and Quantitative Disclosures Regarding Market Risk—Market Risk” for a sensitivity analysis that demonstrates the impact that certain changes in the composition of our AUM could have on our revenues.

Previous wording

Essentially all of our revenues consist of fees earned from managing clients’ assets. Investment advisory fees, which are comprised of management fees and performance fees, fluctuate based on a number of factors, including the total value of our assets under management, the composition of assets under management among investment vehicles and our investment strategies, changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and, for the accounts on which we earn performance fees, the investment performance of those accounts.

Current wording

Essentially all of our revenues consist of fees earned from managing clients’ assets. Investment advisory fees, which are comprised of management fees and performance fees (including incentive allocations), fluctuate based on a number of factors, including the total value of our AUM, the composition of AUM among investment vehicles and investment strategies, changes in the fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and, for the accounts on which we earn performance fees, the investment performance of those accounts.

Previous wording

The different fee structures associated with Artisan Funds, Artisan Global Funds and separate accounts and other pooled vehicles, and the different fee schedules applicable to each of our investment strategies, make the composition of our assets under management an important determinant of the investment management fees we earn. Historically, we have received higher effective rates of investment management fees from Artisan Funds and Artisan Global Funds than from traditional separate accounts, reflecting, among other things, the different and broader array of services we provide to Artisan Funds and Artisan Global Funds. Investment management fees for non-U.S. funds may also be higher because they include fees to offset higher distribution costs. Our investment management fees also differ by investment strategy, with higher-capacity strategies having lower standard fee rates than strategies with more limited capacity.

Current wording

The different fee structures associated with Artisan Funds, Artisan Global Funds and separate accounts and other pooled vehicles, and the different fee schedules applicable to each of our investment strategies, make the composition of our AUM an important determinant of the investment management fees we earn. Historically, we have received higher effective rates of investment management fees from Artisan Funds and Artisan Global Funds than from traditional separate accounts, reflecting, among other things, the different and broader array of services we provide to Artisan Funds and Artisan Global Funds. Our investment management fees also differ by investment strategy, with higher-capacity strategies having lower standard fee rates than strategies with more limited capacity.

Previous wording

Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee, but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our $150.2 billion of assets under management as of December 31, 2023 have performance fee billing arrangements. Performance fees of $4.3 million, $0.6 million, and $13.3 million were recognized in the years ended December 31, 2023, 2022 and 2021, respectively.

Current wording

Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee, but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our $161.2 billion of AUM as of December 31, 2024 have performance fee billing arrangements. Performance fees of $14.8 million, $4.3 million, and $0.6 million were recognized in the years ended December 31, 2024, 2023 and 2022, respectively.

Previous wording

Management fees, performance fees and incentive allocations earned from consolidated investment products are eliminated from revenue upon consolidation. For each of the years ended December 31, 2023, 2022 and 2021, approximately 82%, 82%, and 83%, respectively, of our investment advisory fees were earned from clients located in the United States.

Current wording

For each of the years ended December 31, 2024, 2023 and 2022, approximately 80%, 82%, and 82%, respectively, of our investment advisory fees were earned from clients located in the United States.

Previous wording

•variations in the amount of total compensation expense due to, among other things, changes in the amount of incentive compensation earned and equity awards made, variations in our employee count (including the addition of new investment teams) and changes in our product mix and other competitive factors; and

Current wording

•variations in the amount of total compensation expense due to, among other things, changes in the amount of incentive compensation earned and equity awards made, variations in our employee count (including the addition of new investment teams), changes in our product mix and other competitive factors; and