Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q4 2013 Earnings Presentation
25 slides from Artisan Partners Asset Management's earnings presentation, Feb 3, 2014
Slide 1: Business Update and Fourth Quarter 2013 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 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
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 thirteen investment strategies for sophisticated, institutional investors Principal offices in Milwauke
Slide 4: 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 3 Global Equity Team Non-U.S. Growth Strategy 1/1/96 25.3$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.7$ Global Equity Strategy 4/1/10 0.3$ Global Small-Cap Growth Strategy 7/1/13 0.1$ 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. % of AUM in Outperforming Strategies represents the % of AUM in strat
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 As of December 31, 2013. 1The allocation of AUM by distribution channel involves the use of estimates and
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: 2013 Year-in-Review — Market Cycles
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 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 C l o s i n g P r i c e S&P 500 Market Cycle Market Cycle 2013 YEAR-IN-REVIEW — Market Cycles ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ‘13 1 Year Per
Slide 9: Year-in-Review — 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 Capacity Management Talent Focus 2013 YEAR-IN-REVIEW — Business Strategy Investment Results Alignment of Interests Talent Focus Management Guideposts Strong Long-Term Investment Results Asset Diversification Financial Discipline 2013 High
Slide 10: 2013 Year-in-Review — 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 9 2013 YEAR-IN-REVIEW — Investment Results Process Consistency Wealth Compounding Index Outperformance Peer Outperformance Attractive Business Economics Strong Financial Condition Attractive Valuations Source: Artisan Partners/Russell. Past
Slide 11: 2013 Year-in-Review — Alignment of Interests
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 2013 YEAR-IN-REVIEW — Alignment of Interests Supports our equity ownership culture Created a mechanism for structured liquidity and broad and multi-generational equity ownership Allows ownership among value-producing employees Init
Slide 12: 2013 Year-in-Review — Capacity 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 11 2013 YEAR-IN-REVIEW — Capacity Management Artisan Global Value Assets Under Management Strategy Closed to Separate Accounts Strategy Closed to All New Investors Artisan U.S. Small-Cap Growth Assets Under Management Strategy Closed Strate
Slide 13: 2013 Year-in-Review — 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 12 2013 YEAR-IN-REVIEW — Talent Focus Characteristics Business Model Fit Institutional Viability Cultural Fit Team and Product Philosophy Artisan Credit Team Development Hired portfolio manager Bryan Krug Building out Artisan Partners C
Slide 14: Summary of Fourth 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 13 AUM increased 9% to $105.5 billion, the highest quarter-end level in the firm’s history Average AUM increased 9% to $101.0 billion Net flows of $1.5 billion resulted in 6.1% annualized organic growth Revenues increased 11% to $19
Slide 15: 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 14 ASSETS UNDER MANAGEMENT & NET CLIENT CASH FLOWS (in billions) Net Client Cash Flows $74.3 $83.2 $85.8 $96.9 $105.5 $71.3 $79.2 $85.3 $92.4 $101.0 4Q12 1Q13 2Q13 3Q13 4Q13 Assets Under Management Ending Assets Under Management Average Ass
Slide 16: 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 15 $0.6 $1.6 $1.0 $1.8 $1.5 $0.9 $0.6 $0.4 $0.3 $0.0 4Q12 1Q13 2Q13 3Q13 4Q13 Quarter U.S. Non-U.S. 11% 11% 11% 11% 11% $7.9 $9.2 $9.8 $10.9 $11.9 4Q12 1Q13 2Q13 3Q13 4Q13 Non-U.S. Client AUM Non-U.S. Cl ient AUM as a % of Fi rmwide AUM Non
Slide 17: 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 16 FINANCIAL RESULTS — Financial Highlights Average Total AUM (in billions) Revenues (in millions) Quarter Year $71.3 $92.4 $101.0 4Q12 3Q13 4Q13 $66.2 $89.5 2012 2013 $137.1 $178.0 $197.6 4Q12 3Q13 4Q13 $505.6 $685.8 2012 2013
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 2013 40.4% 43.3% 42.9% 4Q12 3Q13 4Q13 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 Quarter Year 40.1% 42.1% 2012 2013 Adjusted Net Income per Adjus
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 includes incentive compensation, which increased in the December 2013 quarter due to higher revenues. The equity based compensation expense of $4.1 million in the December 2013 quarter is the result of the quarter
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. $141.2 $211.8 4Q12 4Q13 Cash (in millions) $290.0 $200.0 4Q12 4Q13 Borrowings (in millions) 1.4x 0.7x 4Q12 4Q13 Leverage Ratio1 $(672.7) $132.3 4Q12
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) December 31 September 30 December 31 December 31 December 31 2013 2013 2012 2013 2012 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) 10.1 6.
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
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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