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 September 30, 2024, our 11 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 March 31, 2025, our 11 autonomous investment teams managed a total of 27 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 September 30, 2024, approximately 74% of our assets under management were managed for clients and investors domiciled in the U.S. and 26% 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 March 31, 2025, approximately 74% of our assets under management (AUM) were managed for clients and investors domiciled in the U.S. and 26% 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. 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’ AUM. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues.

Previous wording

•During the three months ended September 30, 2024, our assets under management increased to $167.8 billion, an increase of $8.9 billion, or 6%, compared to $158.9 billion at June 30, 2024, primarily due to $9.9 billion of market appreciation, partially offset by $0.8 billion of net client cash outflows and $0.2 billion of Artisan Funds' distributions not reinvested.

Current wording

•During the three months ended March 31, 2025, our AUM increased to $162.4 billion, an increase of $1.2 billion, or 1%, compared to $161.2 billion at December 31, 2024, primarily due to $4.1 billion of market appreciation, partially offset by $2.8 billion of net client cash outflows and $0.1 billion of Artisan Funds' distributions not reinvested.

Previous wording

•Average assets under management for the three months ended September 30, 2024 were $162.8 billion, an increase of 3% from the average of $158.6 billion for the three months ended June 30, 2024 and 14% from the average of $142.2 billion for the three months ended September 30, 2023.

Current wording

•Average AUM for the three months ended March 31, 2025 was $166.7 billion, an increase of 1% from the average of $165.4 billion for the three months ended December 31, 2024, and 8.2% from the average of $154.2 billion for the three months ended March 31, 2024.

Previous wording

•We earned $279.6 million in revenue for the three months ended September 30, 2024, an increase of 12% from revenues of $248.7 million for the three months ended September 30, 2023. Performance fees of less than $0.1 million were recognized in each of the respective periods.

Current wording

•We earned $277.1 million in revenue for the three months ended March 31, 2025, an increase of 4.8% from revenues of $264.4 million for the three months ended March 31, 2024.

Previous wording

•Our GAAP operating margin was 33.3% for the three months ended September 30, 2024, compared to 33.0% for the three months ended September 30, 2023. Adjusted operating margin was 35.0% for the three months ended September 30, 2024, compared to 32.5% for the three months ended September 30, 2023.

Current wording

•Our GAAP operating margin was 31.2% for the three months ended March 31, 2025, compared to 29.4% for the three months ended March 31, 2024. Adjusted operating margin was 32.1% for the three months ended March 31, 2025, compared to 30.9% for the three months ended March 31, 2024.

Previous wording

•We generated $1.03 of earnings per basic and diluted share and $0.92 of adjusted EPS.

Current wording

•We generated $0.82 of earnings per basic and diluted share and $0.83 of adjusted EPS.

Previous wording

•We declared and distributed dividends of $0.71 per share of Class A common stock during the three months ended September 30, 2024.

Current wording

•We declared and distributed dividends of $1.34 per share of Class A common stock during the three months ended March 31, 2025.

Previous wording

•We declared, effective October 29, 2024, a quarterly dividend with respect to the three months ended September 30, 2024, of $0.82 per share of Class A common stock.

Current wording

•We declared, effective April 29, 2025, a quarterly dividend with respect to the three months ended March 31, 2025, of $0.68 per share of Class A common stock.

Previous wording

During the nine months ended September 30, 2024, certain limited partners of Holdings exchanged 1,168,667 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 1,168,667 shares of Class A common stock. In connection with the exchanges, APAM received 1,168,667 GP units of Holdings.

Current wording

During the three months ended March 31, 2025, certain limited partners of Holdings exchanged 51,500 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 51,500 shares of Class A common stock. In connection with the exchanges, APAM received 51,500 GP units of Holdings increasing its ownership interest in Holdings.

Previous wording

APAM’s equity ownership interest in Holdings increased from 86% at December 31, 2023 to 87% at September 30, 2024, as a result of these transactions and other equity transactions during the period.

Current wording

APAM’s equity ownership interest in Holdings was 87% at March 31, 2025 and December 31, 2024.

Previous wording

Volatility and uncertainty in global financial markets impact the value of our assets under management. Because the revenue we earn is based on the value of our assets under management (AUM), fluctuations in our AUM will result in corresponding fluctuations in our revenues and earnings. Current conditions that could materially impact our financial performance include elevated inflation levels, uncertainty around the timing and extent of changes in interest rates, effects of political tensions, and conflicts and wars, among other factors.

Current wording

Economic uncertainty and volatility in global financial markets impact the value of our AUM. Because the revenue we earn is based on the value of our AUM, fluctuations in our AUM due to changes in the economic environment and financial markets will result in corresponding fluctuations in our revenue and earnings.

Previous wording

The following table presents the total returns of relevant market indices for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents the total returns of relevant market indices for the three months ended March 31, 2025 and 2024:

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 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 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 the quarter, our AUM increased by $8.9 billion, primarily due to $9.9 billion of market appreciation, partially offset by $0.8 billion of net client cash outflows and $0.2 billion of Artisan Funds' distributions not reinvested. For the quarter, 13 of our 25 investment strategies had net outflows totaling $2.1 billion, which were partially offset by $1.3 billion of net inflows from the remaining strategies.

Current wording

During the quarter, our AUM increased by $1.2 billion, primarily due to $4.1 billion of market appreciation, partially offset by $2.8 billion of net client cash outflows and $0.1 billion of Artisan Funds' distributions that were not reinvested in the funds. For the quarter, 15 of our 27 investment strategies had net outflows totaling $4.8 billion, which were partially offset by $2.0 billion of net inflows 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

When we close or otherwise restrict the growth of a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities. We may also permit new investments by other eligible investors in our discretion.

Current wording

When we close or otherwise restrict the growth of a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities. We may also permit new investments by other eligible investors in our discretion. As a result, during a given period we may have net client cash inflows in a closed strategy. However, when a strategy is closed or its growth is restricted we generally expect there to be periods of net client cash outflows.

Previous wording

The unaudited table on the following page sets forth the average annual total returns for each composite (gross of fees) and its respective broad-based benchmark (and style benchmark, if applicable) over a multi-horizon time period as of September 30, 2024. 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 March 31, 2025. Returns for periods less than one year are not annualized.

Previous wording

We measure investment performance based upon the results of our “composites”, which represent the aggregate performance of all discretionary client accounts, including pooled investment vehicles, invested in the same strategy except those accounts with respect to which we believe client-imposed investment restrictions may have a material impact on portfolio construction and those accounts managed in a currency other than U.S. dollars. The results of these excluded accounts, which represented approximately 16% of our assets under management at September 30, 2024, are maintained in separate composites the results of which are not included below.

Current wording

We measure investment performance based upon the results of our “composites”, which represent the aggregate performance of all discretionary client accounts, including pooled investment vehicles, invested in the same strategy except those accounts with respect to which we believe client-imposed investment restrictions may have a material impact on portfolio construction and those accounts managed in a currency other than U.S. dollars. The results of these excluded accounts, which represented approximately 15% of our AUM at March 31, 2025, are maintained in separate composites the results of which are not included below.

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 table below sets forth our assets under management by distribution channel (1):

Current wording

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 8% of our total assets under management as of September 30, 2024.

Current wording

Our institutional channel includes AUM sourced from defined contribution plan clients, which made up approximately 7% of our total AUM as of March 31, 2025.

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

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 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 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.

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 $167.8 billion of assets under management as of September 30, 2024 have performance fee billing arrangements.

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 $162.4 billion of AUM as of March 31, 2025 have performance fee billing arrangements.

Previous wording

The increase in revenues of $30.9 million, or 12%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was driven primarily by a $20.6 billion, or 14% increase in our average assets under management. The weighted average investment management fee, which excludes performance fees, was 68.5 basis points for the three months ended September 30, 2024, compared to 69.5 basis points for the three months ended September 30, 2023. The decrease in the weighted average investment management fee was predominantly due to changes in strategy mix.

Current wording

The increase in revenues of $12.7 million, or 5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was driven primarily by a $12.6 billion, or 8% increase in our average AUM. The weighted average investment management fee, which excludes performance fees, was 67.5 basis points for the three months ended March 31, 2025, compared to 69.1 basis points for the three months ended March 31, 2024. The decrease in the weighted average investment management fee was predominantly due to new and amended separate account investment management agreements with lower fee rates and to a lesser extent a change in the mix of AUM among our strategies with more weighting towards fixed income strategies with lower average fee rates.

Previous wording

Operating expenses increased $19.9 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, as a result of a $18.3 million increase in compensation and benefits and a $1.6 million increase in other operating expenses.

Current wording

Operating expenses increased $3.9 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, as a result of a $5.3 million increase in compensation and benefits partially offset by a $1.4 million decrease in other operating expenses.

Previous wording

Total compensation and benefits was 53% of our revenues for the three months ended September 30, 2024 and 2023.

Current wording

Total compensation and benefits was 56% and 57% of our revenues for the three months ended March 31, 2025 and 2024.

Previous wording

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments increased $30.0 million in the aggregate for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, predominately due to market conditions. In addition, the increase in interest income on cash and cash equivalents and other increased $0.6 million due to higher cash balances.

Current wording

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments decreased $20.4 million in the aggregate for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, predominately due to market conditions. Interest income on cash and cash equivalents and other increased $0.2 million due to higher cash balances.

Previous wording

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended September 30, 2024 and 2023 was 19.1% and 16.6%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% and 16% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended September 30, 2024 and 2023, respectively. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards.

Current wording

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended March 31, 2025 and 2024 was 20.6% and 20.2%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended March 31, 2025 and 2024. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards and excess income tax benefits from the vesting of restricted share-based awards.

Previous wording

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products. These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.

Current wording

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, and (4) non-recurring expenses. These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.

Previous wording

•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products. Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.

Current wording

•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, and (4) non-recurring expenses. Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM’s current federal, state and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.

Previous wording

We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $230.9 million of our cash and cash equivalents balance was invested in money market funds as of September 30, 2024.

Current wording

We manage our cash balances in order to fund our day-to-day operations. We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $186.2 million of our cash and cash equivalents balance was invested in money market funds as of March 31, 2025.

Previous wording

We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of September 30, 2024, the balance of all seed investments, including investments in consolidated investment products, was $157.9 million. Subject to certain restrictions on the timing of redemptions, the seed investments are generally redeemable at our discretion. We monitor for opportunities to redeem existing seed investments as sufficient scale in those strategies and vehicles is achieved.

Current wording

We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of March 31, 2025, the balance of all seed investments, including investments in consolidated investment products, was $138.0 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions within the Artisan Private Funds. We monitor for opportunities to redeem existing seed investments as sufficient scale in those strategies and vehicles is achieved.