Artisan Partners Asset Management Inc. Q4 FY2024 earnings call

• Celebrated 30th anniversary in December, remaining true to being a high value-added investment firm. - Built an investment platform supporting investment talent across people, technology, etc. - 11 investment teams manage 25 strategies spanning various asset classes. - Credit-oriented franchises like EMsights Capital Group launched multiple strategies quickly after joining, with strong performance. - Reoriented distribution to address wealth and alternatives marketplace. - Fourth quarter financial results showed revenue growth, improved operating income, and margin.

Assets under management ended the December quarter at $161 billion, down 4% from the previous quarter but up 7% from the end of 2023. Fourth quarter revenues rose 6%, adjusted operating income increased 12%, and the adjusted operating margin improved by 180 basis points. The fixed income business had the 10th consecutive quarter and 11th consecutive year of positive flows. In 2024, 13 of the 25 investment strategies achieved net inflows; 10 strategies had net inflows exceeding $100 million. The Denver-based credit team led by Bryan Krug raised $1.7 billion in net inflows in 2024 and now manages nearly $12 billion. The Boston-based EMsights Capital Group raised $1.9 billion in net inflows and now manages nearly $3 billion. Collectively, the two credit-oriented franchises raised $3.6 billion in 2024 and now manage nearly $15 billion in six strategies, including two alternative strategies.

• 2025 will celebrate the 10th anniversary of the Developing World strategy. - Remain committed to building the investment platform, developing franchises, and adding talent. - Board approved 2025 annual long-term incentive award. - Expect fixed expenses to increase mid- to low single digits in 2025, with seasonal expenses likely higher in Q1 2025.

• Forward-looking statements subject to known and unknown risks and uncertainties. - Valuation changes on seed investments impact shareholder economics but are excluded from adjusted results. - Macro environment and policy/regulation uncertainties could affect market shifts.

Q: Interplay between organic growth rate, fee rate, and capacity management in strategies like international value.

A: Eric Colson discussed capacity management focusing on performance, managing asset velocity and mix. Regarding organic growth and fee rate, foundational assets like those in emerging market debt and Global Unconstrained strategies impacted the fee rate.

Q: Dividend payout, gains on seed capital.

A: C.J. Daley mentioned gains on seed capital redemptions, expects more in 2025, and the payout ratio is likely to be in the mid-90% range.

Q: Global/international emerging markets equity strategies, market response.

A: Eric Colson and Jason Gottlieb talked about macro uncertainty, strategic asset allocation, and the stability of the alpha profile in strategies.

Q: Private markets alts, observations.

A: Jason Gottlieb discussed evaluating private market opportunities, focusing on talent, and ongoing work in real estate credit, equity, etc.