Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q3 2015 Earnings Presentation
25 slides from Artisan Partners Asset Management's earnings presentation, Oct 26, 2015
Slide 1: Business Update and Third Quarter 2015 Earnings Presentation
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 0 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 5 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 Seven autonomous investment teams managing fifteen investment strategies for sophisticated, institutional investors Principal offices in Milwauk
Slide 4: Market Perspective: MSCI ACWI vs. VIX
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 0 50 100 150 200 250 300 350 400 450 500 0 10 20 30 40 50 60 70 80 90 M S C I A l l C o u n t r y W o r l d I n d e x C B O E V o l a t i l i t y I n d e x ® ( V I X ) VIX MSCI ACWI MARKET PERSPECTIVE MSCI All Country World Index vs. CBOE
Slide 5: 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 4 LONG-TERM INVESTMENT RESULTS Data as of and through September 30, 2015. Average Annual Total Returns represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperformance or underperformance
Slide 6: 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 5 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 7: Thoughtful Growth — Revenue Drivers
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 THOUGHTFUL GROWTH — Revenue Drivers Revenue Drivers Assets Under Management Fee RateX = Revenue Talent Alpha Capacity Beta Distribution Support Balance
Slide 8: Thoughtful Growth — Talent
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 THOUGHTFUL GROWTH — Talent Recent New Team and Strategy Development Driven by investment professionals’ interest and experience Internal and external sources Good fit as part of traditional, outcome and risk-based asset allocation s
Slide 9: Percent of AUM in Outperforming Strategies 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 8 Sources: Artisan Partners/Lipper Inc/Morningstar. % of AUM in Outperforming Strategies at December 31 of each year. % of AUM in Outperforming Strategies represents the % of AUM in strategies where gross of fees composite performance had o
Slide 10: Thoughtful Growth — Capacity
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 Begin Closing Process for All New Investors THOUGHTFUL GROWTH — Capacity ’95 ’97 ’99 ‘01 ’03 ’05 ’07 ’09 ’11 ‘13 ‘15 Capacity management as part of our thoughtful growth strategy: Artisan Non-U.S. Growth Assets Under Management Artisan Gl
Slide 11: Thoughtful Growth — Balanced 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 10 Credit 1% Emerging Markets 1% Developing World <1% 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 judgm
Slide 12: Transparent Predictable Financial Model
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 Focused on Long-Term Approach to Growth Disciplined Maintenance of Fees High Variable Costs and Stable Margins Strong Cash Flow and Conservative Balance Sheet Aligned Interests Invest in the business with a focus on sustainable long-term
Slide 13: Summary of September Quarter 2015 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 11% to $97.0 billion Average AUM decreased 6% to $104.7 billion Net outflows of $1.3 billion Revenues decreased 6% to $198.4 million GAAP operating margin of 35.6% GAAP net income per basic and diluted share of
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 $106.2 $107.9 $108.7 $109.2 $97.0 $110.2 $106.9 $108.4 $111.4 $104.7 3Q14 4Q14 1Q15 2Q15 3Q15 Assets Under Management Assets Under Management Average Ass
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 12% 13% 13% 13% 14% $13.0 $13.9 $13.8 $14.2 $13.1 3Q14 4Q14 1Q15 2Q15 3Q15 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM (0.6) (1.1
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 $110.2 $111.4 $104.7 3Q14 2Q15 3Q15 $212.4 $211.5 $198.4 3Q14 2Q15 3Q15 FINANCIAL RESULTS — Financial Highlights Average AUM (in billions) Revenues (in millions) Quarter Year To Date $108.2 $108.2 YTD 2014 YTD 2015 $622.7 $613.5 YTD 2014
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 3Q14 2Q15 3Q15 1 Operating Margin (GAAP) for the quarters ended September 30, 2014, June 30, 2015, and
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 Incentive compensation is primarily variable compensation paid to investment and distribution teams based on revenue- share percentages and discretionary cash incentives paid to other employees. Incentive compensation decreased in the
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. $182.3 $217.7 4Q14 3Q15 Cash (in millions) $200.0 $200.0 4Q14 3Q15 Borrowings (in millions) 0.5x 0.5x 4Q14 3Q15 Leverage Ratio1 $107.5 $118.3 4Q14 3Q
Slide 20: Financial Results — Dividends
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 19 FINANCIAL RESULTS — Dividends Time periods noted above represent the period in which the dividends were paid. $0.43 $0.55 $0.60 $0.60 $0.60 $0.60 2013 2014 1Q15 2Q15 3Q15 4Q15 Quarterly Dividend Rate
Slide 21: Appendix
APPENDIX
Slide 22: 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 21 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) September 30 June 30 September 30 September 30 September 30 2015 2015 2014 2015 2014 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 18.4 23.
Slide 23: 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 22 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 24: 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 23 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 25: Notes & Disclosures — Financial Information
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 24 NOTES & DISCLOSURES Financial Information Throughout these materials, we present historical information about our assets under management and our average assets under management for certain periods. We use our information management syst
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