Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q4 2015 Earnings Presentation
24 slides from Artisan Partners Asset Management's earnings presentation, Feb 9, 2016
Slide 1: Business Update and Fourth 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 F O U R T H 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 Chairman 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. wh
Slide 3: 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 2 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 4: Investment Teams and Strategies Overview
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 Overall Fund Global Equity Team Inception AUM ($ mm) 1 Yr 3 Yr 5 Yr 10 Yr Inception Morningstar RatingTM (2) Non-U.S. Growth 1/1/96 30,187 (201) 268 453 334 618 Non-U.S. Small-Cap Growth 1/1/02 1,323 304 (50) 293 484 448 Global E
Slide 5: 2015 Year-in-Review — Active 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 4 2015 YEAR-IN-REVIEW — Active Management Asset Allocations Passive Alternative Emerging I n v e s t o r M a n d a t e s “Traditional” Active Active Historical The diagram is not intended to, and does not, represent any particular data set.
Slide 6: 2015 Year-in-Review — Artisan Global Strategies
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 2015 YEAR-IN-REVIEW — Artisan Global Strategies Source: Artisan Partners/eVestment. As of December 31, 2015. Returns shown are average annual total returns. For the Artisan Partners strategies, the returns represent gross of fees performa
Slide 7: 2015 Year-in-Review — High Income & Developing World Strategies
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 Inception ■ Artisan Developing World Composite: Gross (Inception: 7/1/2015) -11.75 ■ MSCI Emerging Markets Index -17.35 (%) as of December 31, 2015 -20.0% -15.0% -10.0% -5.0% 0.0% 2015 YEAR-IN-REVIEW — Artisan High Income & Developing Wor
Slide 8: 2015 Year-in-Review — 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 7 Institutional 65% Intermediary 30% Retail 5% AUM by VehicleAUM by Client Domicile AUM by Distribution Channel1AUM by Investment Team U.S. 86% Non-U.S. 14% Artisan Funds 52% Separate Accounts 46% UCITS 2% Global Equity 33% Global Value 30%
Slide 9: 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 8 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 10: 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 9 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) Net Client Cash Flows $107.9 $108.7 $109.2 $97.0 $99.8 $106.9 $108.4 $111.4 $104.7 $101.4 4Q14 1Q15 2Q15 3Q15 4Q15 Assets Under Management Assets Under Management Average Asset
Slide 11: 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 10 FINANCIAL RESULTS — Financial Highlights Average AUM (in billions) Revenues (in millions) Quarter Year $106.9 $104.7 $101.4 4Q14 3Q15 4Q15 -3% -5% $107.9 $106.5 2014 2015 -1% $206.0 $198.4 $192.0 4Q14 3Q15 4Q15 -3% -7% $828.7 $805.5 2014
Slide 12: 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 11 FINANCIAL RESULTS — Financial Highlights Total Operating Expenses (net of Pre-Offering Related Compensation) 1 (in millions) Compensation & Benefits Expense (net of Pre-Offering Related Compensation) 1 (in millions) Quarter Year $115.6 $
Slide 13: Expense Commentary
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 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 14: 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 13 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 4Q14 3Q15 4Q15 1 Operating Margin (GAAP) for the quarters ended December 31, 2014, September 30, 2015,
Slide 15: 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 14 FINANCIAL RESULTS — Dividends Note: Time periods noted above represent the period in which the dividends were paid. $0.43 $0.55 $0.60 $0.60 2013 2014 2015 1Q16 Quarterly Dividend Rate $1.63 $0.95 $0.40 1Q14 2015 2016 Special Annual Divid
Slide 16: 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 15 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $182.3 $166.2 4Q14 4Q15 Cash (in millions) $200.0 $200.0 4Q14 4Q15 Borrowings (in millions) 0.5x 0.5x 4Q14 4Q15 Leverage Ratio1 $107.5 $116.6 4Q14 4Q
Slide 17: 5-Year Perspective — Financial Metrics
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 5-YEAR PERSPECTIVE — Financial Metrics NOTE: % changes represent the compound annual growth rate over the periods indicated. $57,459 $74,334 $99,848 2010 2012 2015 AUM (in billions) 12% 10% $48,724 $66,174 $106,484 2010 2012 2015 Avg AUM
Slide 18: Appendix
APPENDIX
Slide 19: 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 18 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) December 31 September 30 December 31 December 31 December 31 December 31 December 31 2015 2015 2014 2015 2014 2012 2010 Net income attributable to Artisan Partners As
Slide 20: 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 19 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 21: Percent of AUM in Outperforming Strategies
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 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
Slide 22: 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 21 GLOBAL DISTRIBUTION (in billions) U.S. vs. Non-U.S. Client Net Flows 13% 13% 13% 14% 14% $13.9 $13.8 $14.2 $13.1 $14.2 4Q14 1Q15 2Q15 3Q15 4Q15 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM (1.1) (2.0
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 — 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 23 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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