Artisan Partners Asset Management Inc. Q2 FY2025 earnings call

• Eric Colson stepped down as CEO, Jason Gottlieb succeeded him as CEO, Eric became Executive Chair. - Highlighted investment team achievements: Bryan Krug's Credit team won Morningstar award, David Samra's International Value group recognized, Developing World's 10-year milestone. - Expansion into asset classes: From public equities to fixed income, alternatives, multi-asset class. - Distribution focus: Aligned with intermediated wealth clients, which represent over half of AUM. - Emerging markets: Growing interest and demand, with 5 strategies having positive YTD flows.

Credit Team: Managed over $13 billion across the franchise. Bryan Krug's High Income strategy outperformed its benchmark by 170 basis points annually after fees over 11 years, ranked #2 in its eVestment universe. Credit Opportunity strategy has 10.23% annual returns net of fees since inception, Floating Rate strategy has 6.68% annual returns net of fees since inception. International Value Group: David Samra's International Value strategy has compounded capital at nearly 11% annually for 23 years, generating 418 basis points of average annual outperformance. International Explorer strategy by Beini Zhou and Anand Pasagiri has compounded at 14.47% annually since inception. Global Special Situations strategy launched. Developing World Strategy: July 1 marked its 12th strategy with a 10-year track record. Since inception in 2015, compounded capital at an average annual rate of 11.59%, beating the index by 678 basis points after fees, ranks third in its Lipper category. Emerging Markets: Each of Artisan's 5 emerging market strategies has positive YTD net flows. Aggregate net $700 million raised so far this year. Sustainable Emerging Markets strategy has outperformed the index by over 100 basis points annually over trailing periods. EMsights Capital Group's strategies have strong performance and business momentum.

• Q3 revenue to benefit from 8% higher AUM. - September quarter to benefit from absence of ~$2.4 million costs related to China Post-Venture strategy. - Adjusted operating income increased slightly compared to prior quarter and 3% compared to same quarter last year. - Board of Directors declared a quarterly dividend of $0.73 per share for June 2025 quarter, a 7% increase over prior quarter.

Q: Anthony Jameek Corbin asked about areas or asset classes open to pursue for M&A, specifically around building out alts capabilities.

A: Jason A. Gottlieb responded that it's talent-driven, focusing on alternatives asset classes like real estate (fragmented, disruption), secondaries in private equity (shorter DPI time), private credit in areas like asset-based lending.

Q: John Joseph Dunn asked about timing of institutional mandates funding and temperature of conversations with institutional clients.

A: Eric Richard Colson responded that there was rebalancing on global equity side, interest in emerging markets, positive story around fixed income and emerging markets, clients dealing with illiquid allocations and focusing on extending duration, and a more cautious risk-aware environment leading to muted gross flow.

Q: William Raymond Katz asked about OpEx outlook and growth potential.

A: Charles James Daley responded that OpEx is on target with mid-single digits on fixed side and variable side varying with revenues, no expected expense ramping for growth.

Q: Kenneth S. Lee asked about pipeline for new products within Credit side and seed capital needs.

A: Jason A. Gottlieb responded about evaluating structures in private markets for Credit side, expanding degrees of freedom; Charles James Daley responded that they're well positioned on seed capital, with $140 million in seed capital invested, and in a good capital position for seed or M&A.