Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — US Value Investment Forum 2023
25 slides from Artisan Partners Asset Management's conference presentation, May 10, 2023
Slide 1: Money, Manias and Margin of Safety
Money, Manias and Margin of Safety Daniel Kane, Thomas Reynolds IV and Craig Inman, Portfolio Managers | U.S. Value Team This material may include the views of the portfolio manager. Any "forward-looking statement is not intended to predict the future and no undue reliance should be placed on these
Slide 2: Interest Rates Were at 5,000-Year Lows!
Interest Rates Were at 5,000-Year Lows! ai ——— Short-term rates Long-term rates ar . Rates are Low QitS.a netiect time (0 Duy! 14% 12% = 10% 2 % le 6% 4% cE ; * ad. 3000BC 300 1720 1755 1790 1825 1860 1895 1930 1965 2000 2035 HAPPY FRIDAY! ominant money market ae 0 or lust ‘eld onlongermUS ges ARTIS
Slide 3: FOMO, MOMO, YOLO and OHNO!
FOMO, MOMO, YOLO and OHNO! More than 476 million payments totaling $814 billion in stimulus went to households in three rounds in 2020 and 2021 (Mar 2020, Dec 2020, Mar 2021). In 2020, US IPOs surpassed the 2000 peak of 400 by 20% and reached a new peak in 2021 of over 1,000. Venture capital investm
Slide 4: Space: The Efficient Frontier for Cash Incineration
Space: The Efficient Frontier for Cash Incineration = In 2021-2022, 10Space” SPACs went public with a total deal value was $22 billion. They have since lost $17 billion for a total loss of 77%. » SPCE insiders cashed out $1.6 billion. The company still has no revenue. ="ANNNND Gross Proceeds to Insi
Slide 5: Did We Not Learn Anything from Monopoly?
Did We Not Learn Anything from Monopoly? Hertz’s stock price 5 May 22,2020 June 11 Oct. 16 March 2, 2021 May 12 Hertzfilesfor Hertzproposes Hertzsecures _Hertzfiles Hertz bankruptcy to sell $1 billion bankruptcy opening plan to discloses protection. of new shares. loan exit chapter 11 winning bankru
Slide 6: MEMEntum
MEMEntum M E M E: an idea, behavior, or style that spreads by means of imitation from person to person within a culture and often carries symbolic meaning representing a particular phenomenon or theme.
Slide 7: You said Buy Crypto, No, I said Bye Crypto
You said Buy Crypto, No, | said Bye Crypto i RcSverienlsikieaciea Turds & feel left out" The total value of cryptocurrency assets peaked at just over $3 trillion in November 2021. BL ss? Preattas ned hate Today, it's $1.3 trillion, down 57% from the peak. “Ym init for the technology.” Dogecoin Price
Slide 8: You Can't Sell at A Loss And Make It Up on Volume
You Can't Sell at A Loss And Make It Up on Volume Peloton (PTON) 5,000 § so = 3,000 5 = S #% 2,000 = E a fa 1,000 g o = | = 5 oe F 3 -1,000 £ 2 5 -2,000 = 2017 2018 2019 2020 2021 2022 2023E mmm Revenue mmm EBIT ~——Market Value Carvana (CVNA) 25,000 § 20,000 > fa = 15,000 a = a = = 10,000 £ a 2 gs 5
Slide 9: SPACs: Separating Patsies and Their Cash
SPACs: Separating Patsies and Their Cash Median DeSPAC Share % Return by Pro Forma Equity Value SPAC Annual Issuance $200,000 @ 2 2 $80,000 $40,000 $0 2 8 $300mm fe Be a ; } " ~ ht y g out GOING THE WRONG WAY! $300mm-$2b $2bn-$5bn Pro Forma Equity Value Past performance is nota rliabl indicator of f
Slide 10: The Stock Market: A Story of Cycles and Human Behavior
The Stock Market: A Story of Cycles and Human Behavior “Progress is cumulative in science and engineering, but cyclical in finance” —Jim Grant Latin America Nifty Fifty The Bubble (Late 1960s/early “Everything" The Mississippi a 8208) 19708) Dot-Com Bubble and South Sea ' Railroad 1920s ' Bubble : T
Slide 11: Margin of Safety
Margin of Safety Attractive Business Economics Attractive Valuation Distinct discount Focus on free cash flow and Low expectations return on capital capabilities Ability to grow underlying Favorable risk/reward ; business value Avoid “value traps” Sound Financial Condition Focus on financial flexibi
Slide 12: Marriott International (MAR)
Marriott International (MAR) Better: Attractive Business Economics Assetlight global operator, franchisor and licensor Over 8,300 properties under 30 different brands Network effects from loyalty programs and marketing scale Strong pipeline enables room growth, and margin expansion opportunities Saf
Slide 13: First Citizens BancShares (FCNCA)
First Citizens BancShares (FCNCA) oe BANKS >$20BN, <$1TR, EXC TRUST BANKS sve Better: Attractive Business Economics om A well-run family business managed for strength in capital, liquidity, and . _ + Frc durability rather than quarterly earnings E o I . An operating strategy that is a combination of
Slide 14: Baxter International (BAX)
Baxter International (BAX) Better: Attractive Business Economics Baxter International (BAX) Global medtech company with diversified geographic reach 100 Providing essential products in Renal Care, Medication Delivery, ° Advanced Surgery, Clinical Nutrition, Pharma and Acute Therapies 80 . . 70 Consi
Slide 15: Going Active in Value
Going Active in Value Excess returns were generated in 80% of 5-year time periods over the past 20 years by the median large cap value manager. Median 5-Year Rolling Excess Return of the eVestment Large Cap Value category (vs. Russell 1000° Value Index) 2.50 2.00 1.50 1.00 im eS 0.50 - WW -0.50 -1,0
Slide 16: Appendix
Slide 17: Speaker Bios
Speaker Bios MODERATOR: am ~ Darlene M. van Nostrand, CFA, is a managing director of Artisan Partners and a business leader for the firm's U.S. Value team. Prior to joining the firm in November 2021, Ms. van Nostrand was the director of institutional relationships at Balentine LLC, where she built a
Slide 18: Investment Results: Artisan U.S. Mid-Cap Value Strategy
Investment Results uso Artisan U.S. Mid-Cap Value Strategy 20 Cumulative Rouns (98) sof $7 Mor 2023 vi i aye 5M mM wow Incepon Inception ™ Artisan US. Mid-Cap Value Composite: Gross 5.14 “5.83 24.46 7.06 8.94 791 1189 1386.67 = Artisan US. Mid-Cap Value Composite: Net 489 672 23.32 6.07 793 691 10.8
Slide 19: Investment Results: Artisan Value Equity Strategy
Investment Results uso Artisan Value Equity Strategy 20%% Cumulative Retns (8) os of $7 Mor 2023 vo Wr aYr 5M 1M 10 Incopon Incepion = Artisan Value Equity Composite: Gross 8.02 -0.46 24.16 10.13 11.72 10.05 891 355.54 = Artisan Value Equity Composite: Net 7.84 23.33 9.38 10.96 9.30 8.09 298.50 Russ
Slide 20: Investment Results: Artisan Value Income Strategy
a. See lee Investment Results ws Artisan Value Income Strategy 10% , ma | | “10 Cumulative Retuns (68) of 31 Mor 2028 v0 hg Inception Inception ™ Artisan Value Income Composite: Gross 1.64 671 5.75 6.23 = Artisan Value Income Composite: Net 1.46 737 6.41 6.94 ‘SP 500” Index 750 773 397 -430 Dow Jone
Slide 21: Portfolio Holdings: Artisan U.S. Mid-Cap Value Strategy
Po rtfo | iO H O | d j nN g S (% of total portfolio) Artisan U.S. Mid-Cap Value Strategy Communication Services: 14.0 2.2. Cable One Inc 1.7 Electronic Arts Inc 19. IAC Inc 05. Liberty Broadband Corp 13. Liberty SiriusXM Group 1.9 News Corp 23. Omnicom Group Inc 23. Warner Bros Discovery Inc Consume
Slide 22: Portfolio Holdings: Artisan Value Equity Strategy
Po rtfo | iO H O | d j nN g S (% of total portfolio) Artisan Value Equity Strategy Communication Services: 19.7 Energy: 6.1 Health Care: 11.4 Information Technology: 3.8 42. Alphabet Inc 3.1 EOG Resources Inc 2.3. Baxter International Inc 1.5 NXP Semiconductors NV 3.2 Comcast Corp 3,0 Schlumberger N
Slide 23: Portfolio Holdings: Artisan Value Income Strategy
Portfolio Holdings (% of total portfolio) Artisan Value Income Strategy ‘Communication Services: 8.4 3.0 Cable One Inc* 34 Comcast Corp 2.1. Omnicom Group Inc Consumer Discretionary: 5.7 25 Compass Group PLC 1.5 H@R Block Inc 1.7 Vail Resorts Inc ‘Consumer Staples: 14.9 3.2. Altria Group Inc 3.0. He
Slide 24: Notes and Disclosures
Notes and Disclosures This section ofthis prsenttion contin information important fo a complete understanding of the material presented Please review it careful Artisan Portners Limited Partnership (APLP) is on investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Art
Slide 25: Notes and Disclosures
Notes and Disclosures Frank Russel Company ("Russel is he source and owner of he tademarks, sence marks and copyrights relted fo the Russell Indexes. Russe isa tademork of Frank Russell Company. Neither Russell nor is cesor ocept ony iby for ony eros or omisionsin the Russell Indexes and / o Russell
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