Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q4 2014 Earnings Presentation
24 slides from Artisan Partners Asset Management's earnings presentation, Feb 2, 2015
Slide 1: Business Update and Fourth Quarter 2014 Earnings Presentation
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 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: 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 3 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 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 Global Equity Team Non-U.S. Growth Strategy 1/1/96 29.4$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.2$ Global Equity Strategy 4/1/10 0.7$ Global Small-Cap Growth Strategy 7/1/13 0.1$ U.S. Value Team U.S. Mid-Cap Value Strategy 4/1/99 13.
Slide 6: 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 5 INVESTMENT PERFORMANCE — Outperformance and Rankings 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 strat
Slide 7: 2014 Year-in-Review — Market Performance
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 2014 YEAR-IN-REVIEW — Market Performance 40% 22% 12% 2% -14%-20% -10% 0% 10% 20% 30% 40% 50% Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 P e r f o r m a n c e 1-Year Momentum Russell 3000® Index As of December 31, 2014. Sources
Slide 8: 2014 Year-in-Review — 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 7 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. Credit <1% Emerging Markets 1% 2014 YEAR-IN-REV
Slide 9: 2014 Year-in-Review — 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 8 2014 YEAR-IN-REVIEW — Firm Asset Diversification $0.9 $3.7 $4.9 $7.9 $11.9 $13.9 8 10 19 32 55 76 0 10 20 30 40 50 60 70 80 90 100 $0 $2 $4 $6 $8 $10 $12 $14 $16 2009 2010 2011 2012 2013 2014 Non-U.S. Assets Under Management ($bn) Number
Slide 10: 2014 Year-in-Review — Capital Structure
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 Employees continue to own a substantial portion of the economic interests in the firm Hellman & Friedman’s APAM ownership shifted to public investors Alignment of interests continues to be a focus through the issuance to employees o
Slide 11: 2014 Year-in-Review — Investment Team Update
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 2014 YEAR-IN-REVIEW — Investment Team Update CREDIT TEAM Investment Team Bryan Krug - Portfolio Manager 3 Analysts 1 Dedicated Trader Location: Kansas City High Income Fund Investor Share Class Advisor Share Class Assets $565
Slide 12: Summary of December 2014 Quarter and Calendar Year 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 11 SUMMARY OF DECEMBER 2014 QUARTER AND CALENDAR YEAR RESULTS Quarter Year Ending Assets Under Management $107.9 billion $107.9 billion Average AUM $106.9 billion $107.9 billion Net Client Cash Flows ($538) million $788 million Revenues $20
Slide 13: 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 12 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) Net Client Cash Flows $105.5 $107.4 $112.0 $106.2 $107.9 $101.0 $106.2 $108.2 $110.2 $106.9 4Q13 1Q14 2Q14 3Q14 4Q14 Assets Under Management Ending Assets Under Management Ave
Slide 14: 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 13 GLOBAL DISTRIBUTION (in billions) U.S. vs. Non-U.S. Client Net Flows 11% 11% 12% 12% 13% $11.9 $11.9 $13.5 $13.0 $13.9 4Q13 1Q14 2Q14 3Q14 4Q14 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM $1.5 $1.3
Slide 15: 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 14 FINANCIAL RESULTS — Financial Highlights Average AUM (in billions) Revenues (in millions) Quarter Annual $101.0 $110.2 $106.9 4Q13 3Q14 4Q14 $89.5 $107.9 2013 2014 $197.6 $212.4 $206.0 4Q13 3Q14 4Q14 $685.8 $828.7 2013 2014
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 Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 Adjusted Net Income per Adjusted ShareAdjusted Net Income 4Q13 3Q14 4Q14 1 Operating Margin (GAAP) for
Slide 17: 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 16 Salary & Incentives includes incentive compensation, which decreased in the December 2014 quarter as compared to the September 2014 quarter due to lower revenues. The equity based compensation expense of $7.7 million in the December
Slide 18: 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 17 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $211.8 $182.3 4Q13 4Q14 Cash (in millions) $200.0 $200.0 4Q13 4Q14 Borrowings (in millions) 0.7x 0.5x 4Q13 4Q14 Leverage Ratio1 $132.3 $107.5 4Q13 4Q
Slide 19: 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 18 FINANCIAL RESULTS — Dividends Note: Time periods noted above represent the period in which the dividends were paid $0.43 $0.55 $0.60 2013 2014 1Q15 Quarterly Dividend Rate $1.63 $0.95 1Q14 1Q15 Special Annual Dividends $3.04 $3.20 3Q13/4
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) December 31 September 30 December 31 December 31 December 31 2014 2014 2013 2014 2013 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 21.3 20
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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