Artisan Partners Asset Management Inc.
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 1, 2025
APAM$39.13-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001517302-25-000042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001517302-25-000068
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 138 current paragraphs.
84 unchanged; 31 reworded; 16 added; 8 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 18 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
The increase in compensation and benefits is primarily driven by an increase in long-term incentive compensation costs of $11.9 million, which includes a $9.3 million increase as a result of market valuation changes. Salaries, short-term incentive compensation and benefits increased 5% due to a $3.7 million increase in incentive compensation driven by higher revenues and a $2.3 million increase in employee separation costs, primarily those associated with the winding down of our China Post Venture strategy as of June 30, 2025.
Current report
Other operating expenses decreased $0.2 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to a decrease in general and administrative costs.
Current report
As a result of the changes to the IRC Section 162(m) executive compensation deduction limitation rules within the OBBBA, we estimate that our GAAP and adjusted effective tax rates will increase 1% to 3% beginning in 2027 compared to estimates before the legislation was enacted.
Current report
Six months ended June 30, 2025, compared to Six months ended June 30, 2024
Current report
Investment Advisory Revenues
Current report
Operating Expenses
Current report
Compensation and Benefits
Current report
The increase in compensation and benefits was primarily due to a $12.3 million increase in long-term incentive compensation which includes a $7.8 million increase as a result of market valuation changes. Salaries, short-term incentive compensation and benefits increased 5% due to a $7.2 million increase in incentive compensation driven by higher revenues, and a $2.1 million increase in employee separation costs, primarily associated with the winding down of our China Post-Venture strategy as of June 30, 2025.
Current report
Total compensation and benefits was 57% and 55% of our revenues for the six months ended June 30, 2025, and 2024, respectively.
Current report
Other operating expenses
Current report
Other operating expenses decreased $1.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a decrease in general and administrative costs.
Current report
Non-Operating Income (Expense)
Current report
Provision for Income Taxes
Current report
Earnings Per Share
Current report
On June 3, 2025, Artisan Partners Holdings LP agreed to issue $50 million of Series G Senior Notes in a private placement transaction on August 15, 2025, subject to the satisfaction of certain customary closing conditions. The proceeds, along with cash on hand, will be used to pay off the $60 million of Series D Senior Notes maturing on August 16, 2025. The Series G Notes will bear interest at a rate of 5.43% per annum and will mature on August 16, 2030. The financial covenants contained in the note purchase agreement are the same as the covenants contained in the Company’s existing note purchase agreements.
Current report
Net cash provided by operating activities decreased $14.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a decrease of $39.0 million in cash flow from CIP activity predominantly due to an increase in net outflows resulting from the increase in third party contributions to CIPs, partially offset by a benefit from changes in working capital of $26.7 million and an increase of $2.0 million in operating income.
Removed paragraphs (8)
Previous report
•We launched the Global Special Situations strategy, managed by the International Value Group.
Previous report
•The Growth team's fifth strategy, the Franchise strategy, was made available to clients in March 2025.
Previous report
On April 2, 2025, the United States announced sweeping tariffs that led to a sharp market sell-off, followed by a significant rebound upon the subsequent pause of those tariffs. While our AUM decreased in April following the announcement from $162 billion as of March 31, 2025, it has subsequently rebounded to approximately $164 billion as of April 30, 2025. The significant market volatility that has been experienced thus far in the second quarter may continue as a result of the escalated trade tensions and future policies put in place by the United States and other countries. However, we have designed, and we operate, our firm and financial model with the expectation that markets will be volatile, which allows us to maintain a stable environment for our investment talent and remain focused on our long-term business objectives during challenging market conditions.
Previous report
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 report
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 report
The increase in salaries, incentive compensation and benefits is primarily driven by a $3.0 million increase in incentive compensation driven by higher revenues in the three months ended March 31, 2025. A 2% increase in full-time associates and merit increases also led to increases in compensation and benefit related expenses.
Previous report
Other operating expenses decreased $1.4 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to decreases in communication and technology costs.
Previous report
Net cash provided by operating activities increased $10.9 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the $8.8 million increase in operating income.
Reworded paragraphs (31)
Previous 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.
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 June 30, 2025, our 11 autonomous investment teams managed a total of 26 investment strategies across multiple asset classes and investment styles.
Previous 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.
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 fluctuate over time.
Previous 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.
Current wording
•During the three months ended June 30, 2025, our AUM increased to $175.5 billion, an increase of $13.1 billion, or 8%, compared to $162.4 billion at March 31, 2025, primarily due to $15.2 billion of market appreciation, partially offset by $1.9 billion of net client cash outflows and $0.2 billion of Artisan Funds’ distributions not reinvested.
Previous 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.
Current wording
•Average AUM for the three months ended June 30, 2025 was $166.8 billion, an increase of less than 1% from the average of $166.7 billion for the three months ended March 31, 2025, and an increase of 5% from the average of $158.6 billion for the three months ended June 30, 2024.
Previous 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.
Current wording
•We earned $282.8 million in revenue for the three months ended June 30, 2025, an increase of 4% from revenues of $270.8 million for the three months ended June 30, 2024.
Previous 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.
Current wording
•Our GAAP operating margin was 28.2% for the three months ended June 30, 2025, compared to 32.0% for the three months ended June 30, 2024. Adjusted operating margin was 31.7% for the three months ended June 30, 2025, compared to 32.2% for the three months ended June 30, 2024.
Previous wording
•We generated $0.82 of earnings per basic and diluted share and $0.83 of adjusted EPS.
Current wording
•We generated $0.94 of earnings per basic and diluted share and $0.83 of adjusted EPS.
Previous wording
•We declared and distributed dividends of $1.34 per share of Class A common stock during the three months ended March 31, 2025.
Current wording
•We declared and distributed dividends of $0.68 per share of Class A common stock during the three months ended June 30, 2025.
Previous 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.
Current wording
•We declared, effective July 29, 2025, a quarterly dividend with respect to the three months ended June 30, 2025, of $0.73 per share of Class A common stock.
Previous 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.
Current wording
During the six months ended June 30, 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
The following table presents the total returns of relevant market indices for the three months ended March 31, 2025 and 2024:
Current wording
The following table presents the total returns of relevant market indices for the three and six months ended June 30, 2025 and 2024:
Previous 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.
Current wording
During the quarter, our AUM increased by $13.1 billion, primarily due to $15.2 billion of market appreciation, partially offset by $1.9 billion of net client cash outflows and $0.2 billion of Artisan Funds’ distributions that were not reinvested in the funds. For the quarter, 14 of 27 investment strategies (inclusive of China Post-Venture) had net outflows totaling $3.0 billion, which were partially offset by $1.1 billion of net inflows from the remaining strategies.
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 $162.4 billion of AUM as of March 31, 2025 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 $175.5 billion of AUM as of June 30, 2025 have performance fee billing arrangements.
Previous 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.
Current wording
The increase in revenues of $12.0 million, or 4%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was driven primarily by a $8.2 billion, or 5% increase in our average AUM. The weighted average investment management fee, which excludes performance fees, was 68.1 basis points for the three months ended June 30, 2025, compared to 68.8 basis points for the three months ended June 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of fixed income strategies with lower fee rates.
Previous wording
Total compensation and benefits was 56% and 57% of our revenues for the three months ended March 31, 2025 and 2024.
Current wording
Total compensation and benefits was 59% and 54% of our revenues for the three months ended June 30, 2025 and 2024, respectively.
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 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.
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 increased $37.8 million in the aggregate for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, predominately due to market conditions.
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 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.
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 June 30, 2025 and 2024 was 20.6% and 20.8%, 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 June 30, 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
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.
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. $216.9 million of our cash and cash equivalents balance was invested in money market funds as of June 30, 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 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.
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 June 30, 2025, the balance of all seed investments, including investments in consolidated investment products, was $139.0 million. The seed investments are generally redeemable at our discretion, though subject to certain monthly or quarterly timing restrictions for the Artisan Private Funds. We monitor for opportunities to redeem our seed investments as sufficient scale in each investment strategy and vehicle is achieved.
Previous wording
During the three months ended March 31, 2025, we also made investments of $46.8 million related to funded long-term incentive compensation plans. As of March 31, 2025, the value of investments held in connection with funded long-term incentive compensation plans was $197.9 million.
Current wording
During the six months ended June 30, 2025, we also made investments of $46.8 million related to funded long-term incentive compensation plans. As of June 30, 2025, the value of investments held in connection with funded long-term incentive compensation plans was $212.6 million.
Previous wording
We have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E and Series F, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the three months ended March 31, 2025.
Current wording
We have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E and Series F, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the six months ended June 30, 2025.
Previous wording
Artisan Partners Holdings’ distributions, including distributions to APAM for the three months ended March 31, 2025 and 2024, were as follows:
Current wording
Artisan Partners Holdings’ distributions, including distributions to APAM for the three and six months ended June 30, 2025 and 2024, were as follows:
Previous wording
On April 29, 2025, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $47.9 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.
Current wording
On July 29, 2025, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $45.1 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.
Previous wording
APAM declared and paid the following dividends per share during the three months ended March 31, 2025 and 2024:
Current wording
APAM declared and paid the following dividends per share during the three and six months ended June 30, 2025 and 2024:
Previous wording
Our board of directors declared, effective April 29, 2025, a variable quarterly dividend of $0.68 per share of Class A common stock with respect to the March quarter of 2025, payable on May 30, 2025 to stockholders of record as of the close of business on May 16, 2025. The variable quarterly dividend represents approximately 80% of the cash generated in the March quarter of 2025 and a pro-rata portion of 2025 tax savings related to our tax receivable agreements.
Current wording
Our board of directors declared, effective July 29, 2025, a variable quarterly dividend of $0.73 per share of Class A common stock with respect to the June quarter of 2025, payable on August 29, 2025 to stockholders of record as of the close of business on August 15, 2025. The variable quarterly dividend represents approximately 80% of the cash generated in the June quarter of 2025 and a pro-rata portion of 2025 tax savings related to our tax receivable agreements.
Previous wording
In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $342.0 million liability as of March 31, 2025. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.
Current wording
In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a $312.8 million liability as of June 30, 2025. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.
Previous wording
The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. We did not make payments related to the TRA during the three months ended March 31, 2025. In fiscal 2025, we expect to make TRA payments totaling approximately $38.9 million, $29.2 million of which was paid during April 2025.
Current wording
The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. In fiscal 2025, we expect to make TRA payments totaling approximately $38.9 million, $29.2 million of which was paid during the quarter ended June 30, 2025.
Previous wording
Investing activities consist of the purchase and sale of investment securities and the acquisition of property and equipment, and leasehold improvements. Net cash used in investing activities increased $9.2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to a $10.9 million increase in the net cash used for purchases and sales of investment securities as a result of a high franchise capital pool in 2025 and more weighting towards nonconsolidated investments.
Current wording
Investing activities consist of the purchase and sale of investment securities and the acquisition of property and equipment, and leasehold improvements. Net cash used in investing activities decreased $19.2 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to seed redemptions in the six months ended June 30, 2025.
Previous wording
Financing activities consist primarily of dividend payments to holders of our Class A common stock, partnership distributions to non-controlling interests, contributions and distributions to consolidated investment products, and payments owed under the tax receivable agreements. Net cash used in financing activities increased $28.0 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to a $26.0 million increase in dividends and distributions paid as a result of a $0.32 per share increase in the aggregate dividend declared and paid by APAM in the three months ended March 31, 2025, as compared to March 31, 2024.
Current wording
Financing activities consist primarily of dividend payments to holders of our Class A common stock, partnership distributions to non-controlling interests, contributions to and distributions from consolidated investment products, and payments owed under the tax receivable agreements. Net cash used in financing activities decreased $16.9 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Capital contributions to consolidated investment products increased by $51.3 million, partially offset by an increase in dividend and distribution payments on higher earnings of $31.0 million.
Previous wording
During each of the three months ended March 31, 2025 and March 31, 2024, the Company determined that it no longer had a controlling financial interest in an investment product that was previously consolidated. The investment product deconsolidated in the three months ended March 31, 2025 had $33.0 million more cash and cash equivalents at the date of deconsolidation than the investment product deconsolidated in the three months ended March 31, 2024.
Current wording
During each of the six months ended June 30, 2025 and June 30, 2024, the Company determined that it no longer had a controlling financial interest in an investment product that was previously consolidated. The investment product deconsolidated in the six months ended June 30, 2025 had $33.0 million more cash and cash equivalents at the date of deconsolidation than the investment product deconsolidated in the six months ended June 30, 2024.
Previous wording
As previously discussed in this report, the TRA liability increased from $341.5 million at December 31, 2024 to $342.0 million at March 31, 2025. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. We did not make payments related to the TRA during the three months ended March 31, 2025. In fiscal 2025, we expect to make TRA payments totaling approximately $38.9 million, $29.2 million of which was paid during April 2025 and will reduce the TRA liability.
Current wording
As previously discussed in this report, the TRA liability decreased from $341.5 million at December 31, 2024 to $312.8 million at June 30, 2025. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. In fiscal 2025, we expect to make TRA payments totaling approximately $38.9 million, $29.2 million of which was paid during the quarter ended June 30, 2025.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The increase in revenues of $24.7 million, or 5%, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was driven primarily by a $10.4 billion, or 7%, increase in our average AUM. The weighted average management fee, which excludes performance fees, was 67.8 basis points for the six months ended June 30, 2025, compared to 69.0 basis points for the six months ended June 30, 2024. The decrease in the weighted average investment management fee was due in part to amendments of certain investment management agreements as well as an increase in the AUM weighting of fixed income strategies with lower fee rates.
Current report — wording carried from elsewhere
The following table sets forth the investment advisory fees and weighted average management fee earned by investment vehicles. The weighted average management fee for Artisan Funds and Artisan Global Funds reflects the additional services we provide to these pooled vehicles.
Current report — wording carried from elsewhere
Non-operating income (expense) consisted of the following:
Current report — wording carried from elsewhere
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 $17.4 million in the aggregate for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, predominately due to market conditions.
Current report — wording carried from elsewhere
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 was 20.6% and 20.5% for the six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
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 six months ended June 30, 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.
Current report — wording carried from elsewhere
Weighted average basic and diluted shares of Class A common stock outstanding were higher for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, as a result of Holdings’ unit exchanges and equity award grants. See Note 12, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for further discussion of earnings per share.
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Previous report — wording carried elsewhere
Business highlights for the quarter included the following: