Artisan Partners(US:APAM)2024-04-24 23:15Financial Data and Key Metrics Changes - Assets under management (AUM) ended the March quarter at $160 billion, up 7% from the last quarter and up 16% from March 2023 [23] - Revenues in the quarter increased 6% compared to the last quarter and were up 13% compared to March 2023 [24] - Adjusted operating income increased 2% sequentially and 17% compared to last year's March quarter [28] Business Line Data and Key Metrics Changes - Net client cash outflows during the quarter were just over $500 million, with net outflows in equity strategies partially offset by net inflows in fixed income and alternative strategies [23] - The Artisan High-Income strategy generated average annual returns of 6.18% after fees, ranking number two out of 135 funds in the Morningstar High Yield Bond category [12] Market Data and Key Metrics Changes - The annualized organic outflow rate improved to 1% from 3% in 2023 [23] - Approximately $1.4 billion of investment returns were in excess of benchmark returns during the quarter [23] Company Strategy and Development Direction - The company is focused on expanding its credit team and alternative strategies, with a strong emphasis on high-value-added investments [10][22] - There is a strategic shift towards diversifying into real assets, infrastructure, and alternative strategies, aligning distribution to support these initiatives [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the credit team and the potential for emerging markets debt, particularly in light of recent market disruptions [34][43] - The company is optimistic about the institutional channel's strength and the ongoing dialogue with institutional buyers [48] Other Important Information - The average recurring fee rate for the quarter was 69 basis points, consistent with the last quarter [24] - The company declared a quarterly dividend of $0.61 per share, representing approximately 80% of the cash generated in the quarter [29] Q&A Session Summary Question: Thoughts on fixed income and alternative strategies - Management discussed the importance of long-term asset allocation and the growth in the alternative space, particularly in fixed income [33][34] Question: Equity allocations and performance - Management noted that there is disruption in equity allocations, particularly in emerging markets, which could create new opportunities [37] Question: Future of fixed income business - Management highlighted the success of the credit team and the potential for growth in alternative strategies and wealth management [42][43] Question: Expense guidance for the year - Management provided insights on seasonal expenses and expected normalization of the compensation rate [44][45] Question: Institutional channel performance - Management indicated that the institutional channel was strong in the first quarter, with positive funding in fixed income and alternatives [48] Question: Demand for new alternative credit strategies - Management emphasized that demand for alternative strategies is more about client engagement than macroeconomic conditions [54][56]