Artisan Partners Q3 2024 Earnings Call

Artisan Partners (NYSE: APAM), a global investment management firm, reported consistent growth and strategic expansion during its Q3 2024 Earnings Call. CEO Eric Colson highlighted a focus on long-term shareholder value with a 12.38% annualized total shareholder return since its IPO in 2013. Despite net client cash outflows, assets under management (AUM) rose to $168 billion, marking a 23% year-over-year increase. The company plans to increase its quarterly dividend to $0.82 per share, reflecting strong financial health.

Key Takeaways

• AUM reached $168 billion, up 6% from the prior quarter and 23% year-over-year.
• Experienced $750 million in net client cash outflows, partly offset by an $860 million inflow in emerging markets debt.
• Quarterly revenue rose 3% sequentially and 12% year-over-year; adjusted operating income increased by 12% sequentially and 21% year-over-year.
• Quarterly dividend declared at $0.82 per share, a 15% increase from the previous quarter.
• Seed capital reserves stand at $158 million with an unused $100 million revolving credit facility.

Company Outlook

• Anticipates $600 million in net outflows in Q4 due to annual distributions.
• Focuses on revenue compounding and strategic growth over aggressive net flow targets.
• Expects significant contributions from the emerging markets debt strategy and is activating new products, particularly in private real estate.

Bearish Highlights

• Net client cash outflows of approximately $750 million in Q3.
• Slight decline in fee rates on fixed income accounts.

Bullish Highlights

• Non-U.S. institutional business shows strength, with 26% of clients located outside the U.S.
• Seed capital needs are well-covered, allowing for recouping some investments.
• International value team benefits from existing infrastructure to mitigate talent acquisition costs.

Misses

• Did not meet aggressive net flow targets due to strategic growth focus.

Q&A Highlights

• No further questions were raised at the conclusion, indicating all concerns were addressed comprehensively.

Artisan Partners is navigating the market with a disciplined growth approach and strategic expansion into new investment strategies. The firm's strong balance sheet and commitment to attracting talent position it for continued growth.

InvestingPro Insights

Artisan's financial data shows a market capitalization of $3.63 billion and 12 consecutive years of dividend payments. Its P/E ratio of 13.43 suggests possible undervaluation against a 47.3% price total return last year. The firm achieved 11.73% revenue growth in the last twelve months.

Conclusion

Artisan Partners remains committed to driving long-term growth and shareholder value through strategic investments and management discipline while continuing to deliver substantial client results.