Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q2 2013 Earnings Presentation
23 slides from Artisan Partners Asset Management's earnings presentation, Jul 24, 2013
Slide 1: Business Update and Second Quarter 2013 Earnings Presentation
B U S I N E S S U P D A T E A N D S E C O N D Q U A R T E R 2 0 1 3 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 and Management Team
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 management team Andrew A. Ziegler Executive Chairman Eric R. Colson Chief Executive Officer Charles (C.J.) Daley, Jr. Chief Financial Officer Janet D. Olsen Chief Legal Officer Dean J. Patenaude Head of Global Distribution Fo
Slide 4: Investment Teams and 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 3 Global Equity Team Non-U.S. Growth Strategy 1/1/96 20.6$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.4$ Global Equity Strategy 4/1/10 $ <0.1 Global Small-Cap Growth Strategy 7/1/13 $ <0.1 U.S. Value Team U.S. Mid-Cap Value Strategy 4/1/99
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: 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 ASSET DIVERSIFICATION AUM by Distribution Channel1 As of June 30, 2013. 1The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment. AUM by Client DomicileAUM by Vehicle AUM by Investment Team
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 Growth-Oriented Culture Active Strategies Autonomous Franchises Proven Results Designed for Investment Talent to Thrive Managed by Business Professionals Structured to Align Interests Based on Actively Ident
Slide 8: Talent 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 7 TALENT MANAGEMENT Good to Great Hedgehog Concept Investment Talent Drivers What are you deeply passionate about What drives your economic engine What you can be the best in the world at Investment Philosophy Investing Alignment of Interes
Slide 9: 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 8 Talent Focus BUSINESS STRATEGY Management Guideposts Strong Long-Term Investment Results Asset Diversification Financial Discipline Stable Environment Multi-Generational People Business Talent Focus
Slide 10: Talent Focus
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 TALENT FOCUS Characteristics Business Model Fit Institutional Viability Cultural Fit Team and Product Philosophy Merit Based Compensation Equity Culture Investment Talent Networking Continued Globalization Launch of Global Small
Slide 11: Equity Grants
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 EQUITY GRANTS Equity Grant Philosophy Long-term interest alignment Talent acquisition and retention Merit-based award driven by consistent value creation Equity as a percentage of an employee’s total compensation highly variable
Slide 12: Summary of Second Quarter 2013 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 AUM increased 3% to $85.8 billion, the highest quarter-end level in the firm’s history Average AUM increased 8% to $85.3 billion Net flows of $1.4 billion resulting in 6.8% annualized organic growth Revenues increased 9% to $162.
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 $64.1 $69.8 $74.3 $83.2 $85.8 $63.6 $66.8 $71.3 $79.2 $85.3 2Q12 3Q12 4Q12 1Q13 2Q13 Assets Under Management Ending Assets Under Management Average Asset
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 $1.0 $1.0 $0.6 $1.6 $1.0 $0.4 $0.5 $0.9 $0.6 $0.4 2Q12 3Q12 4Q12 1Q13 2Q13 Quarter U.S. Non-U.S. 9% 10% 11% 11% 11% $5.7 $6.7 $7.9 $9.2 $9.8 2Q12 3Q12 4Q12 1Q13 2Q13 Non-U.S. Client AUM Non-U.S. Cl ient AUM as a % of Fi rmwide AUM Non-U.
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 Total AUM (in billions) Revenues (in millions) Quarter Year To Date $63.6 $79.2 $85.3 2Q12 1Q13 2Q13 $63.3 $82.3 YTD 2Q12 YTD 2Q13 $120.8 $148.2 $162.0 2Q12 1Q13 2Q13 $240.5 $310.2 YTD 2Q1
Slide 16: Financial Highlights — Adjusted Operating Margin and Net Income
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 1Q13 2Q132Q12 41.6% 37.0% 44.6% 2Q12 1Q13 2Q13 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 Quarter Year To Date 40.6% 41.0% YTD 2Q12 YTD 2Q13 1 Op
Slide 17: Compensation and Benefits 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 16 The decrease in total compensation and benefits in the June 2013 quarter was driven by compensation charges in the March 2013 quarter related to the reorganization of the Company’s capital structure from a private to a public company.
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. $141.2 $257.4 4Q12 2Q13 Cash (in millions) $290.0 $200.0 4Q12 2Q13 Borrowings (in millions) 1.4x 0.8x 4Q12 2Q13 Leverage Ratio1 $(672.7) $62.2 4Q12 2
Slide 19: Appendix
APPENDIX
Slide 20: Reconciliation of GAAP to Non-GAAP 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 19 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) June 30, March 31, June 30, June 30, June 30, 2013 2013 2012 2013 2012 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) $5.7 $3.0 $— $8.7 $— A
Slide 21: 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 20 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 22: 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 21 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 23: 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 22 NOTES & DISCLOSURES Ratings are based on risk-adjusted returns and are historical and do not represent future results. The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated w
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