Artisan Partners(US:APAM)2025-02-05 19:00Financial Data and Key Metrics Changes - In the fourth quarter, revenues rose by 6% sequentially and increased by 19% compared to the same quarter last year [23][26] - Adjusted operating income was up 12% sequentially and 37% year-over-year, driven by revenue growth outpacing operating expense increases [28][29] - Assets under management (AUM) ended at $161 billion, down 4% from the previous quarter but up 7% year-over-year [24][25] Business Line Data and Key Metrics Changes - The fixed income business achieved its tenth consecutive quarter of positive flows, with net inflows of $3.6 billion in 2024 [25][26] - The Denver-based credit team raised $1.7 billion in net inflows, while the Boston-based Emsights Capital Group raised $1.9 billion, collectively managing nearly $15 billion across six strategies [10][11] - 13 out of 25 investment strategies achieved net inflows in 2024, with 10 strategies exceeding $100 million in inflows [7][8] Market Data and Key Metrics Changes - The average AUM for the fourth quarter was up 2% sequentially and 18% year-over-year, while full-year average AUM improved by 15% [25][28] - Approximately 3% of AUM is subject to performance fees, with a weighted average recurring fee rate of 68 basis points for the quarter [27][29] Company Strategy and Development Direction - The company aims to build durable investment franchises by supporting investment talent and focusing on long-term growth [4][20] - There is a commitment to expanding the investment platform, developing existing franchises, and tapping into demand for high-value-added investments [22][33] - The company is strategically managing capacity in its international value strategy to maintain performance [38] Management's Comments on Operating Environment and Future Outlook - Management anticipates moderate strategic moves in asset allocation due to current macroeconomic uncertainties, with a focus on inflation and global market volatility [49][50] - The company is well-positioned to capture opportunities in active management as volatility in markets can benefit their strategies [51][52] Other Important Information - The company declared a quarterly dividend of $0.84 per share and a year-end special dividend of $0.50, totaling a 25% increase in dividends compared to 2023 [31][32] - The balance sheet remains strong with $155 million in seed capital and an unused $100 million revolving credit facility [29][30] Q&A Session Summary Question: Discussion on organic growth rate and fee rate - Management noted that the organic growth and fee rate changes are influenced by foundational assets in fixed income strategies, which have performance-based fees that can lower the overall fee rate [39][40] Question: Seed capital needs and payout rate for 2025 - The payout ratio is expected to remain in the mid-90s range, with some gains on seed capital realized in 2024 and more anticipated in 2025 [42][43] Question: Response to volatility in global and international emerging markets - Management indicated that there is a hesitance in the market due to macroeconomic factors, expecting only moderate strategic moves in asset allocation [49][50]