Artisan Partners Asset Management (APAM) Q2 2025 Earnings Call July 30, 2025 01:00 PM ET Company ParticipantsBrennan Hughes - Head - IREric Colson - MD & Chair of the BoardJason Gottlieb - President, MD, CEO & DirectorCharles Daley - EVP, CFO & TreasurerKenneth Lee - Vice PresidentConference Call ParticipantsAnthony Corbin - Equity Research AnalystJohn Dunn - AnalystWilliam (Bill) katz - Senior Equity AnalystOperatorGood afternoon, and welcome to the Artesyn Partners Asset Management Business Update and Sec ...

Financial Data and Key Metrics Changes - Ending AUM reached $176 billion, an increase of 8% compared to March [23] - Average AUM for the quarter was flat sequentially but up 5% year-over-year [23] - Year-to-date average AUM improved by 7% over the prior year's six-month period [23] - Revenues for the quarter increased by 2% compared to March and 4% compared to the same quarter last year [25] - Adjusted operating income increased slightly compared to the prior quarter and 3% year-over-year [26] - Adjusted net income per adjusted share was flat compared to last quarter and up slightly compared to the second quarter of 2024 [26] Business Line Data and Key Metrics Changes - The credit team manages over $13 billion across its franchise, with continued positive flows in fixed income [11] - The high income strategy has outperformed its benchmark by 170 basis points annually after fees [10] - The Developing World Strategy has compounded capital at an average annual rate of 11.59% since inception [14] - Artisan's five emerging market strategies have positive year-to-date net flows, raising a net $700 million across the group [15] Market Data and Key Metrics Changes - Net client cash outflows during June were $1.9 billion, driven by lower gross equity inflows and outflows compared to the prior quarter [24] - The second quarter marked the twelfth consecutive quarter of positive flows for the fixed income business [24] - Institutional clients are showing increased interest in emerging markets and fixed income strategies [44] Company Strategy and Development Direction - The company is focused on evolving its investment platform to include multi-asset and alternative investments [21] - There is a strong emphasis on talent-driven opportunities for M&A, particularly in alternatives and private equity [33][36] - The company aims to expand its distribution to align with clients valuing long-term asset allocation for high-value added investing [20] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious risk-aware environment affecting gross flows, with a focus on credit as a growth area [46] - The company is optimistic about allocations in emerging markets and fixed income strategies, especially with the ten-year anniversary of the Developing World strategy [44][52] - Management expressed confidence in the firm's ability to execute well for investment talent, clients, and shareholders under new leadership [21] Other Important Information - The company declared a quarterly dividend of $0.73 per share, a 7% increase over the prior quarter [30] - The balance sheet remains strong with approximately $140 million of seed capital invested in seeded products [28] Q&A Session Summary Question: What areas or asset classes is the company most open to pursue for M&A? - The company is focused on talent-driven opportunities, particularly in alternatives and private equity, with interest in real estate and secondaries business [33][36] Question: How should the company think about capacity constraints and timing for reopening? - The company is managing capacity judiciously, particularly in growth strategies, and is working with intermediated wealth clients to maintain consistency [38][39] Question: Can you elaborate on the two institutional mandates mentioned? - The company is seeing interest in emerging markets and fixed income strategies, with positive movement around rebalancing in global equity [42][44] Question: What is the outlook for seed capital needs this year? - The company is well positioned regarding seed capital and expects opportunities to redeploy capital for additional seed or acquisitions in the next 12 to 18 months [64][66]