Artisan Partners Asset Management Inc. Q3 FY2025 earnings call

• Investment performance: Over 70% of AUM outperformed benchmarks over 3 years; 12 strategies with over 10-year track records outperformed since inception. • AUM: Reached $181.3 billion, an all-time high. • Net outflows: Due to outflows from certain equity strategies, but 14 of 26 investment strategies had net inflows YTD. • Credit business: $1.8 billion YTD net inflows, 13 consecutive quarters of positive flows. • Alternatives: Raised $336 million for global unconstrained strategy, building pipeline for credit opportunity strategy. • Emerging markets: All emerging market strategies had net inflows, demand growing. • Balance sheet: Strong with $300 million cash and $140 million seed investments; retired maturing debt using new debt proceeds. • Dividend: Board declared $0.88 per share dividend, 21% increase over prior quarter.

Assets under management reached $181.3 billion, an all-time high at quarter end. Investment performance was strong across the platform: over 70% of AUM outperformed benchmarks over 3 years; 12 Artisan strategies with over 10-year track records outperformed since inception. In equities, sustainable emerging markets, non-U.S. growth, etc., had YTD returns >20%. Credit: emerging markets local opportunity had YTD return >19%. Alternatives: credit opportunities, global unconstrained had absolute returns >8%, Antero Peak had YTD return almost 21%. Trailing 1-year performance was weighed down by underperformance in some large equity strategies.

• Fourth quarter includes annual mutual fund distribution, ~$900 million not expected to be reinvested. • Fourth quarter has largest opportunity to realize performance fees, measurement period ends Dec 31; ~3% of AUM has performance fee component, projecting total performance fees similar to 2024 but subject to market and performance conditions.

• Factors set forth in earnings release and SEC filings could cause actual results to differ materially from forward-looking statements.

Q: Flavor of regionally where demand for non-U.S. strategies is and strategy demands?

A: Demand in global mandates (global value, global opportunities), direct international equity exposure (global equity franchise), and emerging markets (credit and equity). Global value and opportunities have institutional interest; emerging market credit and equity have positive flows.

Q: M&A front, size of allocation and philosophy?

A: Active in real estate, private credit, private equity secondaries. Pipeline largely homegrown. Consider any alternatives for M&A, cash likely prevalent for opportunities.

Q: Efforts to improve gross flows and stem redemptions, distribution reorientation?

A: Aligning compensation to sales orientation, recruiting/hiring for intermediate wealth, expanding regional footprint (U.K., Middle East), building capital formation capabilities, modernizing vehicle lineup.

Q: Internal vs external opportunity set for real estate, private credit, etc.?

A: Private credit natural extension leveraging Bryan's platform; private real estate external; private equity secondaries a strong area, private equity growth franchise could enter late-stage opportunities.

Q: Client rebalancing trends and expense outlook?

A: Q3 had rebalances in intermediate wealth space, some due to Australian regulatory factors. Fixed expense growth expected to be mid-single digits for 2025, tracking slightly better, 2026 budgeting in process with no unusual updates expected.