Artisan Partners Asset Management Inc. · NYSE:APAM
Artisan Partners Asset Management — Q3 2013 Earnings Presentation
26 slides from Artisan Partners Asset Management's earnings presentation, Oct 28, 2013
Slide 1: Business Update and Third Quarter 2013 Earnings Presentation
B U S I N E S S U P D A T E A N D T H I R 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
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 Five autonomous investment teams managing thirteen investment strategies for sophisticated, institutional investors Principal offices in Milwauk
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 23.0$ Non-U.S. Small-Cap Growth Strategy 1/1/02 1.5$ Global Equity Strategy 4/1/10 0.2$ Global Small-Cap Growth Strategy 7/1/13 $ <0.1 U.S. Value Team U.S. Mid-Cap Value Strategy 4/1/99 1
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: 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 5 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 7: 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 6 BUSINESS STRATEGY We believe that if we are THOUGHTFUL about hiring and developing the right talent, protecting the alpha potential of our investment teams and managing our business with discipline and a commitment to our clients, GROWTH
Slide 8: Talent Focus 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 7 Talent Focus BUSINESS STRATEGY Management Guideposts Strong Long-Term Investment Results Asset Diversification Financial Discipline Team Development Alpha Protection Discipline & Clients First Growth Strategy
Slide 9: Team Development - Sourcing Talent
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 TEAM DEVELOPMENT — Sourcing Talent Characteristics Business Model Fit Institutional Viability Cultural Fit Think Differently Analyst First Then Portfolio Manager Strong Philosophical Belief High Value-Added Strategy Talent Focus
Slide 10: Team Development - Multi-Generational Franchises
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 TEAM DEVELOPMENT — Multi-Generational Franchises 1 Portfolio Manager 4 Portfolio Managers 9 Analysts 8 Research Associates 1 Portfolio Manager 1 Analyst 4 Portfolio Managers 1 Associate Portfolio Manager 5 Analysts 3 R
Slide 11: Alpha Protection - 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 10 ALPHA PROTECTION — Capacity Management Strategy Capacity Management Life Cycle Inception Protect Portfolio Management Time Prioritize Alpha Cautious Early Marketing Protect Portfolio Management Time Prioritize Alpha Preserve
Slide 12: Business Discipline - Team 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 11 BUSINESS DISCIPLINE — Team Asset Diversification 0% 20% 40% 60% 80% 100% Growth Global Equity U.S. Value Global Value Emerging Markets Institutional Defined Contribution Broker Dealer Financial Advisor Retail Channel Diversification by T
Slide 13: 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 12 BUSINESS DISCIPLINE — Firm Asset Diversification Channel Diversificiation1 As of September 30, 2013. 1The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment. Team Diversification Client D
Slide 14: Business Discipline - Growth Expectations
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 0 10,000,000,000 20,000,000,000 30,000,000,000 40,000,000,000 50,000,000,000 60,000,000,000 70,000,000,000 80,000,000,000 90,000,000,000 100,000,000,000 6 / 3 0 / 1 9 9 5 6 / 3 0 / 1 9 9 6 6 / 3 0 / 1 9 9 7 6 / 3 0 / 1 9 9 8 6 / 3 0 / 1
Slide 15: Summary of Third 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 14 AUM increased 13% to $96.9 billion, the highest quarter-end level in the firm’s history Average AUM increased 8% to $92.4 billion Net flows of $2.1 billion resulted in 9.7% annualized organic growth Revenues increased 10% to $178
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 $69.8 $74.3 $83.2 $85.8 $96.9 $66.8 $71.3 $79.2 $85.3 $92.4 3Q12 4Q12 1Q13 2Q13 3Q13 Assets Under Management Ending Assets Under Management Average Asset
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 $1.0 $0.6 $1.6 $1.0 $1.8 $0.5 $0.9 $0.6 $0.4 $0.3 3Q12 4Q12 1Q13 2Q13 3Q13 Quarter U.S. Non-U.S. 10% 11% 11% 11% 11% $6.7 $7.9 $9.2 $9.8 $10.9 3Q12 4Q12 1Q13 2Q13 3Q13 Non-U.S. Client AUM Non-U.S. Cl ient AUM as a % of Fi rmwide AUM Non-
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 Total AUM (in billions) Revenues (in millions) Quarter Year To Date $66.8 $85.3 $92.4 3Q12 2Q13 3Q13 $64.5 $85.7 YTD 3Q12 YTD 3Q13 $128.0 $162.0 $178.0 3Q12 2Q13 3Q13 $368.5 $488.2 YTD 3Q1
Slide 19: 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 18 YTD 3Q13 38.9% 44.6% 43.3% 3Q12 2Q13 3Q13 FINANCIAL RESULTS — Financial Highlights Adjusted Operating Margin1 Adjusted Net Income (in millions) & Adjusted Net Income per Share1 Quarter Year To Date 40.0% 41.8% YTD 3Q12 YTD 3Q13 1 Operati
Slide 20: 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 19 Salary & Incentives includes incentive compensation, which increased in the September 2013 quarter due to higher revenues. The equity based compensation expense of $3.4 million in the September 2013 quarter is the result of the pro-r
Slide 21: 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 20 FINANCIAL RESULTS — Capital Management ¹ Calculated in accordance with debt agreements. $141.2 $275.9 4Q12 3Q13 Cash (in millions) $290.0 $200.0 4Q12 3Q13 Borrowings (in millions) 1.4x 0.7x 4Q12 3Q13 Leverage Ratio1 $(672.7) $95.9 4Q12 3
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) September 30, June 30, September 30, September 30, September 30, 2013 2013 2012 2013 2012 Net income attributable to Artisan Partners Asset Management Inc. (GAAP) $6.
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. Average Annual Total Returns (Gross) represents gross of fees performance for the Artisan Composites. Value add measures the average annual outperformance or underperfor
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
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 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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