Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q3 2014 Earnings Presentation
24 slides from Artisan Partners Asset Management's earnings presentation, Oct 27, 2014
Slide 1: Business Update and Third Quarter 2014 Earnings Presentation
B U S I N E S S U P D A T E A N D T H I R D Q U A R T E R 2 0 1 4 E A R N I N G S P R E S E N T A T I O N Artisan Partners Asset Management
Slide 2: Business Update & Quarterly Results Discussion
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 1 BUSINESS UPDATE & QUARTERLY RESULTS DISCUSSION Eric R. Colson is President and Chief Executive Officer of Artisan Partners. Prior to joining the firm in January 2005, Mr. Colson was an executive vice president of Callan Associates, Inc. w
Slide 3: Firm Facts
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 2 FIRM FACTS Founded in 1994; focused on providing high value-added investment strategies Six autonomous investment teams managing fourteen investment strategies for sophisticated, institutional investors Principal offices in Milwauke
Slide 4: Investment Teams, Strategies and Long-Term Investment Results
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 3 Global Equity Team Non-U.S. Growth Strategy 1/1/96 28.1$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.4$ Global Equity Strategy 4/1/10 0.7$ Global Small-Cap Growth Strategy 7/1/13 0.2$ U.S. Value Team U.S. Mid-Cap Value Strategy 4/1/99 14.
Slide 5: Investment Performance — Outperformance and Rankings
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 4 INVESTMENT PERFORMANCE — Outperformance and Rankings Sources: Artisan Partners/Lipper Inc/Morningstar. % of AUM in Outperforming Strategies at December 31 of each year except as indicated. % of AUM in Outperforming Strategies represents t
Slide 6: Business Discipline — Firm Asset Diversification
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 5 BUSINESS DISCIPLINE — Firm Asset Diversification Channel Diversification1 Team Diversification AUM by Client DomicileAUM by Vehicle 1 The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment
Slide 7: Business Philosophy & Approach
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 6 BUSINESS PHILOSOPHY & APPROACH Thoughtful Growth Active Strategies Autonomous Franchises Proven Results Designed for Investment Talent to Thrive Managed by Business Professionals Structured to Align Interests Active Talent Identification
Slide 8: How Does Growth Occur?
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 7 HOW DOES GROWTH OCCUR? Growth is naturally non-linear. Time C u m u l a t i v e P e r f o r m a n c e / A s s e t s
Slide 9: What Drives Growth?
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 8 WHAT DRIVES GROWTH? Growth is influenced by internal and external factors. Growth Market Impact Investor Decisions Product Trends Regulation Talent Investment Freedom Global Business Growth Leveraged Distribution
Slide 10: How Do We Manage Growth?
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 9 HOW DO WE MANAGE GROWTH? Growth Market Impact Investor Decisions Product Trends Regulation Talent Investment Freedom Global Business Growth Leveraged Distribution We manage what we can control.
Slide 11: What Is Our Strategy?
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 10 Growth Growth is an outcome. Secular Market Trends Long-Term Strategy Talent Investment Freedom Global Business Growth Leveraged Distribution Globalization Investment Policy Evolution Open Architecture Solutions WHAT IS OUR STRATEGY?
Slide 12: How Do We Execute Our Strategy?
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 11 HOW DO WE EXECUTE OUR STRATEGY? We focus on long duration assets. Talent Experienced Strong Philosophical Belief Broad Decision Making Distinct Investment Culture Natural Succession Investment Freedom Disciplined Process Hi
Slide 13: Summary of September Quarter 2014 Results
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 12 AUM decreased 5% to $106.2 billion Average AUM increased 2% to $110.2 billion Net outflows of $645 million Revenues increased 2% to $212.4 million Operating margin of 38.1% Net income per basic and diluted share of $0.57 Ad
Slide 14: Assets Under Management & Net Client Cash Flows
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 13 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) Net Client Cash Flows $96.9 $105.5 $107.4 $112.0 $106.2 $92.4 $101.0 $106.2 $108.2 $110.2 3Q13 4Q13 1Q14 2Q14 3Q14 Assets Under Management Ending Assets Under Management Avera
Slide 15: Global Distribution
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 14 GLOBAL DISTRIBUTION (in billions) U.S. vs. Non-U.S. Client Net Flows 11% 11% 11% 12% 12% $10.9 $11.9 $11.9 $13.5 $13.0 3Q13 4Q13 1Q14 2Q14 3Q14 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM $1.8 $1.5
Slide 16: Financial Results — Financial Highlights
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 15 FINANCIAL RESULTS — Financial Highlights Average Total AUM (in billions) Revenues (in millions) Quarter Year To Date $92.4 $108.2 $110.2 3Q13 2Q14 3Q14 $85.7 $108.2 YTD 3Q13 YTD 3Q14 $178.0 $208.5 $212.4 3Q13 2Q14 3Q14 $488.2 $622.7 YTD
Slide 17: Financial Results — Financial Highlights
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 16 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 Adjusted Net Income per Adjusted ShareAdjusted Net Income 3Q13 2Q14 3Q14 1 Operating Margin (GAAP) for
Slide 18: Financial Results — Compensation & Benefits
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 17 Salary & Incentives includes incentive compensation, which increased in the September 2014 quarter as compared to the June 2014 and September 2013 quarters due primarily to higher revenues. Equity based compensation expense increased
Slide 19: Financial Results — Capital Management
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 18 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $211.8 $228.0 4Q13 3Q14 Cash (in millions) $200.0 $200.0 4Q13 3Q14 Borrowings (in millions) 0.7x 0.5x 4Q13 3Q14 Leverage Ratio1 $132.3 $146.4 4Q13 3Q
Slide 20: Appendix
APPENDIX
Slide 21: Reconciliation of GAAP to Non-GAAP (Adjusted) Measures
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 20 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) September 30 June 30 September 30 September 30 September 30 2014 2014 2013 2014 2013 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 20.4 19.
Slide 22: Long-Term Investment Results
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 21 LONG-TERM INVESTMENT RESULTS Source: Artisan Partners/MSCI/Russell/BofA Merrill Lynch. Average Annual Total Returns (Gross) represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperform
Slide 23: Notes & Disclosures — Forward-Looking Statements
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 22 NOTES & DISCLOSURES Forward-Looking Statements Certain information in this presentation, and other written or oral statements made by or on behalf of Artisan Partners, are “forward-looking statements” within the meaning of the federal se
Slide 24: Notes & Disclosures
a r t i s a n p a r t n e r s a s s e t m a n a g e m e n t 23 NOTES & DISCLOSURES We also present information based on Lipper rankings for series of Artisan Funds. Lipper rankings are based on total return, are historical and do not represent future results. The number of funds in a category may in
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