Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q1 2014 Earnings Presentation
25 slides from Artisan Partners Asset Management's earnings presentation, Apr 29, 2014
Slide 1: Business Update and First Quarter 2014 Earnings Presentation
B U S I N E S S U P D A T E A N D F I R S T 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 26.3$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.8$ Global Equity Strategy 4/1/10 0.3$ Global Small-Cap Growth Strategy 7/1/13 0.2$ U.S. Value Team U.S. Mid-Cap Value Strategy 4/1/99 15.
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 Diversificiation1 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 judgmen
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: Business 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 7 Talent Focus BUSINESS STRATEGY Management Guideposts Strong Long-Term Investment Results Asset Diversification Financial Discipline Globalization Investment Policy Evolution Open Architecture Solutions Secular Market Trends Long-Term Grow
Slide 9: High Value Added: Globalization
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 HIGH VALUE ADDED — Globalization Russell 3000® Index MSCI EAFE Index Russell 3000® Index MSCI EAFE Index Americas Europe, the Middle East and Africa Pacific Basin Global - Multi-Region Index Holdings By Domicile Index Holdings By Revenue
Slide 10: High Value Added: Investment Policy Evolution
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 Increasing Degrees of Freedom HIGH VALUE ADDED — Investment Policy Evolution Global Equity 57%Fixed Income 16% Real Estate 12% Private Equity 12% Cash 2% Overlay 0% Inflation Sensitive 0% CalSTRS Allocation Policy Sources: CalSTRS: www.ca
Slide 11: High Value Added: Investment Policy Evolution
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 HIGH VALUE ADDED — Investment Policy Evolution US Institutional Investors AUM Passive 10% Active Fixed 31% Active Equity 50% Non- Benchmark 9% 2005 Passive 19% Active Fixed 33% Active Equity 27% Non- Benchmark 21% 2012 Sources: The Bosto
Slide 12: High Value Added: Investment Policy Impact on Asset Managers
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 HIGH VALUE ADDED — Investment Policy Impact on Asset Managers The investment industry is bifurcating into two groups: low cost beta and high value alpha Our focus is on high value alpha strategies with increasing degrees of freedom H
Slide 13: High Value Added: Artisan Partners Product Development
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 Characteristics Business Model Fit Institutional Viability Cultural Fit Team and Product Philosophy HIGH VALUE ADDED — Artisan Partners Product Development The evolution of our strategies reflects increasing degrees of freedom Our in
Slide 14: High Value Added: Artisan High Income 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 13 HIGH VALUE ADDED — Artisan High Income Strategy Credit Investment Team Bryan C. Krug, CFA Portfolio Manager 13 years of investment experience Investment Experience Joanna L. Booth, CFA—Analyst /Trader 10 years John T. Basler—Analyst 8 ye
Slide 15: Summary of March 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 14 AUM increased 2% to $107.4 billion, the highest quarter-end level in the firm’s history Average AUM increased 5% to $106.2 billion Net flows of $1.4 billion resulted in 5.4% annualized organic growth Revenues increased 2% to $201
Slide 16: 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 15 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) $83.2 $85.8 $96.9 $105.5 $107.4 $79.2 $85.3 $92.4 $101.0 $106.2 1Q13 2Q13 3Q13 4Q13 1Q14 Assets Under Management Ending Assets Under Management Average Assets Under Management
Slide 17: 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 16 $1.6 $1.0 $1.8 $1.5 $1.3 $0.6 $0.4 $0.3 <$0.1 $0.1 1Q13 2Q13 3Q13 4Q13 1Q14 U.S. vs. Non-U.S. Client Net Flows U.S. Non-U.S. 11% 11% 11% 11% 11% $9.2 $9.8 $10.9 $11.9 $11.9 1Q13 2Q13 3Q13 4Q13 1Q14 Non-U.S. Client AUM Non-U.S. Cl ient AU
Slide 18: 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 17 FINANCIAL RESULTS — Financial Highlights Average Total AUM (in billions) Revenues (in millions) $79.2 $101.0 $106.2 1Q13 4Q13 1Q14 $148.2 $197.6 $201.8 1Q13 4Q13 1Q14 37.0% 42.9% 45.1% 1Q13 4Q13 1Q14 Adjusted Operating Margin1 Adjusted N
Slide 19: Financial Results: 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 18 Salary & Incentives includes incentive compensation, which slightly decreased in the March 2014 quarter due to the on-boarding of the new investment team in the December 2013 quarter and was partially offset by higher revenues in the M
Slide 20: 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 19 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $211.8 $208.4 4Q13 1Q14 Cash (in millions) $200.0 $200.0 4Q13 1Q14 Borrowings (in millions) 0.7x 0.6x 4Q13 1Q14 Leverage Ratio1 $132.3 $119.6 4Q13 1Q
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) March 31 December 31 March 31 2014 2013 2013 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 8.6 10.1 3.0 Add back: Net income (loss) attribu
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. Average Annual Total Returns (Gross) represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperformance or underperfor
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
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 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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