Artisan Partners Asset Management (APAM) Reports In-Line Q3 EPS

Artisan Partners Asset Management (NYSE: APAM) reported Q3 EPS of $0.70, in-line with the analyst estimate of $0.70.

Chairman and CEO Eric Colson said, “Our business is a growth business. Growth is important to our talent, our clients, and our owners. Growth is not a strategy. It’s an outcome. Our growth results from providing an ideal home for exceptional investment talent, compounding wealth for clients over the long-term, operating with integrity, and maintaining business and financial discipline through market cycles and industry trends. We refer to that as thoughtful growth: Growth that is consistent with Who We Are as an investment firm, sustainable, and beneficial to everyone. That kind of growth takes time, is lumpy, and cannot be engineered over short-term periods.” “For example, the growth we are now seeing in our third generation strategies is the result of a series of investments we began making in 2013. Over the ensuing six years, we successfully recruited and onboarded three new investment franchises, launched six new strategies, and evolved our Non-U.S. Small-Mid Growth strategy. “Today, we manage over $10 billion in the seven third generation strategies. Year-to-date, these strategies have $3.3 billion of combined net inflows, representing an annualized organic growth rate of 72%. Most of the early demand for these strategies is from the wealth channel, where we expect to see long-term secular growth. Most importantly, the strategies have performed for clients. The four publiclyavailable strategies with track records of greater than one year have outperformed their indexes by an average of 156, 523, 838, and 1,447 basis points annually since inception, after fees. “The third generation strategies are continuing in the tradition of our first and second generation strategies. Of our 15 publicly-available strategies, 13 have outperformed their broad-based benchmarks since inception, after fees. Eleven of the strategies have generated more than 200 basis points of average annual outperformance since inception, after fees. “That investment performance has driven our long-term growth as a firm. Over the last ten years, our AUM has grown from $44.4 billion to $112.5 billion. Year-to-date, our strategies have generated nearly $19 billion in total investment returns and over $4.5 billion of returns in excess of benchmark returns. Our business grows as our clients’ capital grows. “Recent firm-wide net flows have been driven by net outflows from our Non-U.S. Growth strategy. Approaching its 25th anniversary, the strategy has outperformed its index by an average of 450 basis points annually since inception, after fees. $1 million invested at inception of the strategy would have grown to $7.9 million as of September 30, 2019, after fees. The same $1 million invested in the benchmark index would have grown to $2.9 million. We remain confident in the long-term demand for alpha generation. “We continue to execute our repeatable process for developing investment franchises. We are better equipped than ever to resource and guide existing teams, identify and add new talent, and broaden our investment capabilities and degrees of freedom. We have exceptionally talented people with long-term views, outstanding investment performance, and a diverse set of high-value added strategies for a range of asset allocation styles. We believe that’s a rare combination, an extremely valuable asset, and a powerful platform for future thoughtful growth.

For earnings history and earnings-related data on Artisan Partners Asset Management (APAM) click here.

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