Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Investor Presentation (2023)
28 slides from Artisan Partners Asset Management's investor presentation, 2023
Slide 1: Adding Value in Turbulent Markets: What We Learn from Successful Small Companies
Adding Value in Turbulent Markets: What We Learn from Successful Small Companies Rezo Kanovich, Portfolio Manager | Artisan Non-U.S. Small-Mid Growth Strategy For Institutional Investors Only—Not for Onward Distribution
Slide 2: Key Messages
Key Messages Our differentiated approach to this universe Misperceptions surrounding international small-cap equities The long-term journey of small companies to large, global industry leaders Reflections on the current environment Resilience and long-term alignment Embedded optionality: future aven
Slide 3: International Small Caps: A Strategic Asset Class
International Small Caps: A Strategic Asset Class Global universe ($300mn+) Institutional Equity Portfolios per Invested Dollar <1% Superior risk-adjusted return vs international large caps and EM equities 15% Total Ex-Foreign Foreign Large Highly inefficient, leading to opportunity Foreign SMID for
Slide 4: Our Differentiated Approach to This Universe
Our Differentiated Approach to This Universe Unknown companies a decade ago, Annualized return since 1/1/2019 recognized global leaders today Artisan Non-U.S. Small-Mid Growth Composite: Net 11.12% Idiosyncratic opportunities backed by 10% structural trend, not macro cycles 6.81% MSCI AC World ex 6.
Slide 5: Transformational Businesses, Idiosyncratic Drivers
Transformational Businesses, Idiosyncratic Drivers Current holdings Market cap 2013 (USD) Market cap 2023 (USD) Idiosyncratic Growth Drivers Quality simulators and advanced software to capitalize on trend to outsource CAE $2.5b $7.2b training of pilots & maintaining licenses Development of new techn
Slide 6: Time-Tested Investment Philosophy
Time-Tested Investment Philosophy We are long-term oriented investors in high-quality businesses exposed to structural growth themes. We seek high returns on capital, sensible valuations and excellent management teams. The team believes success can be achieved through: Investing with Tailwinds Ide
Slide 7: Structural Growth Themes with Accelerating Global Relevance
Structural Growth Themes with Accelerating Global Relevance Idiosyncratic Drivers Structural Growth Themes + Talented Management Teams Differentiated Business Models Through-Cycle Profitability ARTISAN PARTNERS 6
Slide 8: Reflections on the Current Environment: Bank Failures, Inflation, Geopolitical Tensions
Reflections on the Current Environment: Bank Failures, Inflation, Geopolitical Tensions ARTISAN PARTNERS 7
Slide 9: What Successful Small Companies Do During A Crisis
What Successful Small Companies Do During A Crisis Employ strategic thinking React to market fads (SPACs, memes, crypto) Prepare for all eventualities Shortchange the future through R&D underinvestment Focus on innovation Overleverage balance sheet Exercise pricing power while valuing
Slide 10: Lesson #1 - Aixtron: Strategic Thinking to Capture a Megatrend
What Successful Small Companies Do During A Crisis Lesson #1 - Aixtron: Strategic Thinking to Capture a Megatrend Power and photonics driving semiconductor growth Power 2,000 Single-product business to stronger, broader RF 1,500 $ million business through R&D efforts 1,000 Photonics Order intake
Slide 11: Lesson #2 - Jet2: Every Crisis Is An Opportunity
What Successful Small Companies Do During A Crisis Lesson #2 - Jet2: Every Crisis Is An Opportunity Market Share (per Air Travel Organizers’ Licenses) Balance sheet matters 8 2022 Number of Passengers (millions) Jet2: $1.3 billion in net cash 5.9 TUI: $5.8 billion in net debt, capital raise un
Slide 12: Lesson #3 - Kinaxis: Agility to Innovate and Address New, Larger Markets
What Successful Small Companies Do During A Crisis Lesson #3 - Kinaxis: Agility to Innovate and Address New, Larger Markets SaaS-based software company initially focused on Superior software delivering accelerating modeling complex supply chain scenarios SaaS revenue growth 300 Purchase decision
Slide 13: Embedded Optionality: Future Avenues of Growth
Embedded Optionality: Future Avenues of Growth Optionality Company examples Decarbonization continues to accelerate Rotork: solutions for clean energy, emission reduction, water treatment Megatrends Spirax-Sarco: expertise in industrial steam heating processes and electric thermal solutions
Slide 14: Conclusion
Conclusion Source: Adrienne Hedger, 2016. hedgerhumor.com. ARTISAN PARTNERS 13
Slide 15: Questions?
Questions?
Slide 16: Lesson #4 - ConvaTec: Innovation and channel strategy driving structural growth
What Successful Small Companies Do During A Crisis Lesson #4 - ConvaTec: Innovation and channel strategy driving structural growth Leading UK medical device maker Rich product pipeline Profitable growth with a product focus Digitally-enabled ecosystem 2.1 2x R&D spending since pre-COVID 20%
Slide 17: Lesson #5 - Howden Joinery: Advantaged Business Models Provide Resilience
What Successful Small Companies Do During A Crisis? Lesson #5 - Howden Joinery: Advantaged Business Models Provide Resilience Amid Disruptions Continued profitable growth 3 450 £ billion £ million 2 300 Vertically integrated B2B kitchen company 1 150 0 0 Multiyear strategic transformation on dig
Slide 18: Artisan Non-U.S. Small-Mid Growth Strategy
Artisan Non-U.S. Small-Mid Growth Strategy Portfolio Manager Years of Investment Industry Experience Rezo Kanovich 24 Analysts Andres Avalos Vitiello 11 Samir Mainthia 15 Matthew Trusz 9 Anastasia Karpova 10 ARTISAN PARTNERS 17
Slide 19: Investment Process
Investment Process ARTISAN PARTNERS 18
Slide 20: Structural Growth Theme Identification
D E V E L O P I N V E S TA B L E U N I V E R S E Structural Growth Theme Identification Identify investable themes at the intersection of growth and change with the objective of investing in companies having meaningful exposure to these trends Examples include: Next-Generation Health Care New Techno
Slide 21: Portfolio Construction and Risk Management
Portfolio Construction and Risk Management Portfolio Construction Diversified, low-turnover portfolio of 100–150 securities Seeks to maintain adequate diversification across sectors, countries and regions Individual position sizes typically limited to 5% maximum and rarely exceed 3%* Market
Slide 22: Top 10 Holdings
Top 10 Holdings Company Initial Purchase % of total portfolio Nice Ltd Oct 2018 A developer of cloud-based contact center software and advanced analytics. 4.5 (Israel) ConvaTec Group PLC A global provider of medical products and technology in the areas of ostomy, continence, wound and infusion care.
Slide 23: Performance Statistics (USD)
Performance Statistics (USD) Artisan Non-U.S. Small-Mid Growth Composite vs. MSCI All Country World ex USA SMID Index Since Inception (1/1/2019) Composite Return (net) 11.11% MSCI All Country World ex USA SMID Index Return 6.05% Standard Deviation 19.54 Sharpe Ratio (annualized) 0.5 Beta 0.93 Alpha
Slide 24: Investment Results
Investment Results 20% 15% 10% 5% 0% -5% -10% -15% Average Annual Total Returns Cumulative Returns (%) as of 31 Mar 2023 YTD 1 Yr 3 Yr Inception Inception Artisan Non-U.S. Small-Mid Growth Composite: Gross 7.75 -5.50 14.37 12.25 63.38 Artisan Non-U.S. Small-Mid Growth Composite: Net 7.48 -6.45 1
Slide 25: ESG Alignment
ESG Alignment We invest on the right side of history with great leaders and management teams Theme Spotlight— who continuously evolve their business and align with prevailing customer Energy Transition preferences Green taxonomy efforts Notable Portfolio Themes and carbon taxation have made it clear
Slide 26: Portfolio Holdings—By Sector
Portfolio Holdings—By Sector (% of total portfolio) Source: GICS. As of 31 Mar 2023. Cash represented 3.0% of the total representative portfolio at 31 Mar 2022. Securities of the same issuer are aggregated to determine the weight in the portfolio. Based on a representative portfolio. ARTISAN PARTNER
Slide 27: Notes and Disclosures
Notes and Disclosures This section of this presentation contains information important to a complete understanding of the material presented. Please review it carefully. Artisan Partners Limited Partnership (APLP) is an investment adviser registered with the U.S. Securities and Exchange Commission (
Slide 28: Notes and Disclosures
Notes and Disclosures Security Examples: The security examples provided do not constitute recommendations to buy or sell investments. The examples present information about the companies believed to be accurate and are the views of the portfolio managers as of the date indicated. Portfolio Holdings:
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