Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q1 2015 Earnings Presentation
26 slides from Artisan Partners Asset Management's earnings presentation, Apr 28, 2015
Slide 1: Business Update and First 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 I R S T 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 fourteen investment strategies for sophisticated, institutional investors Principal offices in Milwau
Slide 4: 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 3 MARKET PERFORMANCE Data as of March 31, 2015. Sources: eVestment/MSCI/Russell. 1Average Annual Returns represents gross of fees performance reported for actively managed strategies within each eVestment category. Value add measures the av
Slide 5: Long-Term Investment Results — Full Cycle Return Goals
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 31.5$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.3$ 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 12.
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: 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 6 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. BUSINESS DISCIPLINE — Firm Asset Diversificatio
Slide 8: High Value Added — Business Channel Growth
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 HIGH VALUE ADDED — Business Channel Growth 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 $0 $20 $40 $60 $80 $100 $120 A s s e t s U n d e r M a n a g e m e n t ( i
Slide 9: 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 8 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 10: High Value Added — Asset Allocation
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 HIGH VALUE ADDED — Asset Allocation Traditional Asset Allocation Equity Fixed Income Alternatives There is an increasing shift toward benchmark-agnostic, uncorrelated, go-anywhere strategies. Asset Allocation Trends Risk-Based Asset Alloc
Slide 11: 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 10 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.
Slide 12: High Value Added — Artisan Partners High Degrees of Investment Freedom
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 — Artisan Partners High Degrees of Investment Freedom Investment Team Strategy Inception Date Average Annual Value-Added (bp) Overall Morningstar Rating TM 3-Year 5-Year Growth Team Global Opportunities 2/1/07 716 612
Slide 13: High Value Added — New Strategy 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 HIGH VALUE ADDED — Artisan Partners High Degrees of Investment Freedom New Strategy Development Driven by investment professionals’ interest and experience Good fit as part of traditional, outcome and risk-based asset allocation stra
Slide 14: High Value Added — Artisan Partners Developing World 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 13 HIGH VALUE ADDED — Artisan Partners Developing World Team Artisan Developing World Investment Team Years of Investment Experience Portfolio Manager Lewis Kaufman, CFA 16 years Associate Portfolio Managers Michael Roberge, CFA 7 years Edw
Slide 15: Summary of March 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 14 AUM increased 1% to $108.7 billion Average AUM increased 1% to $108.4 billion Net outflows of $2.2 billion Revenues decreased 1% to $203.6 million GAAP operating margin of 33.3% GAAP net income per basic and diluted share of
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) Net Client Cash Flows $107.4 $112.0 $106.2 $107.9 $108.7 $106.2 $108.2 $110.2 $106.9 $108.4 1Q14 2Q14 3Q14 4Q14 1Q15 Assets Under Management Ending Assets Under Management Ave
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 GLOBAL DISTRIBUTION (in billions) U.S. vs. Non-U.S. Client Net Flows 11% 12% 12% 13% 13% $11.9 $13.5 $13.0 $13.9 $13.8 1Q14 2Q14 3Q14 4Q14 1Q15 Non-U.S. Client AUM Non-U.S. Client AUM as a % of Firmwide AUM Non-U.S. Client AUM $1.3 (0.3)
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 AUM (in billions) Revenues (in millions) $106.2 $106.9 $108.4 1Q14 4Q14 1Q15 $201.8 $206.0 $203.6 1Q14 4Q14 1Q15 Adjusted Operating Margin1 45.1% 43.9% 38.4% 1Q14 4Q14 1Q15 Adjusted Net In
Slide 19: 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 18 Salary & Incentives increased in the March 2015 quarter due to the on-boarding of our new Developing World investment team. In the March 2015 and 2014 quarters, benefits & payroll taxes includes seasonal payroll taxes, the first quar
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. $182.3 $215.3 4Q14 1Q15 Cash (in millions) $200.0 $200.0 4Q14 1Q15 Borrowings (in millions) 0.5x 0.5x 4Q14 1Q15 Leverage Ratio1 $107.5 $109.5 4Q14 1Q
Slide 21: 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 20 FINANCIAL RESULTS — Dividends Note: Time periods noted above represent the period in which the dividends were paid $1.63 $0.95 1Q14 1Q15 Special Annual Dividends $3.04 $3.20 3Q13/4Q13/1Q14 2Q14/3Q14/4Q14/1Q15 Total Quarterly and Special
Slide 22: Appendix
APPENDIX
Slide 23: 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 22 RECONCILIATION OF GAAP TO NON-GAAP (“ADJUSTED”) MEASURES (in millions) March 31 December 31 March 31 2015 2014 2014 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 19.5 21.3 8.6 Add back: Net income (loss) attrib
Slide 24: 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 23 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 25: 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 24 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 26: Notes & Disclosures — Lipper Awards
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 25 NOTES & DISCLOSURES Lipper Awards are granted annually to the funds in each Lipper classification that achieve the highest score for consistent return, a measure of funds’ historical risk-adjusted returns, measured in local currency, rel
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