Artisan Partners(US:APAM)2024-10-30 20:24Financial Data and Key Metrics Changes - Revenues rose 3% compared to the June quarter and 12% year-over-year, driven by higher average AUM [34][38] - Adjusted operating income increased 12% sequentially and 21% year-over-year [41][43] - Assets under management (AUM) ended the September quarter at $168 billion, up 6% from the previous quarter and up 23% from September 2023 [35] Business Line Data and Key Metrics Changes - Net client cash outflows during the quarter were approximately $750 million, partially offset by an $860 million inflow into the emerging markets debt opportunity strategy [36] - Average AUM for the quarter was up 3% sequentially and 14% year-over-year [36] Market Data and Key Metrics Changes - The non-U.S. institutional business has been strong, with total assets from clients outside the U.S. representing approximately 26% of total AUM [14][58] - Emerging market debt has been a significant contributor to growth, with expectations for continued strength in this area [59] Company Strategy and Development Direction - The company is focused on thoughtful growth, investing in new talent and expanding capabilities while maintaining financial discipline [9][30] - The current phase of growth emphasizes absolute return strategies and aligns with demand from the growing wealth channel [15][22] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of compounding performance and cautious capacity management to drive revenue growth [56] - The company remains optimistic about the institutional business outside the U.S. and sees promising opportunities in emerging markets [59] Other Important Information - The company declared a quarterly dividend of $0.82 per share, reflecting strong growth in earnings [46] - The balance sheet remains strong with $158 million of seed capital in investment products and a $100 million unused revolving credit facility [45] Q&A Session Summary Question: Margin and Expense Outlook - Management indicated that a high percentage of variable expenses allows for margin expansion primarily driven by revenue growth [50] - Fixed expenses have grown rapidly due to investments in new teams, but a pause in this growth is expected [51] Question: International Value Strategy - Management acknowledged that capacity management is crucial, and they are cautious about inflows for mature strategies [56] Question: Non-U.S. Institutional Business - The non-U.S. institutional business has shown positive growth, with emerging market debt strategies contributing significantly [58][59] Question: Seed Capital Needs - The company has sufficient seed capital and is recouping some as strategies gain traction [71] Question: New Product Development - Management is engaged in productive conversations across various asset classes, with a focus on private real estate as a key area of interest [73]