Artisan Partners Asset Management Q1 Earnings Call Highlights

Key Points

• Artisan emphasized strong long-term performance—74% of AUM outperformed over three years and 99% over 10 years, with all 12 decade-plus strategies beating benchmarks net of fees—while conceding that shorter-term underperformance in a couple of large equity strategies has pressured client relationships.
• First-quarter flows were net outflows of $3.1 billion concentrated in a few equity strategies, but credit (+$800m), alternatives (+$300m) and sustainable emerging markets (+$250m) saw positive inflows; AUM was $173 billion at March 31 and had largely recovered to nearly $184 billion by April.
• Financials and capital moves: Q1 revenue was $303m (down 10% sequentially) and adjusted operating income fell 30% sequentially mainly due to the absence of performance fees; the board declared a $0.77 quarterly dividend (down 24% q/q), the firm held $271m in cash after redeeming $50m of seed capital, and management is focused on expanding credit/alternatives, M&A opportunities, and ETF share-class filings.

Artisan Partners Asset Management NYSE: APAM executives emphasized long-term investment performance and continued growth in credit and alternatives during the firm’s business update and earnings call, while also acknowledging equity-related outflows and near-term performance challenges in certain large strategies.

Long-term performance highlighted amid mixed near-term results

CEO Jason Gottlieb said the firm remains focused on “generat[ing] and compound[ing] wealth for our clients over the long term,” describing Artisan’s model as an “ideal home for investment talent” that has expanded over time across equities, credit, and alternatives.

Gottlieb highlighted long-term performance metrics across the platform, stating that 74% of AUM outperformed benchmarks over three years, 76% over five years, and 99% over 10 years, gross of fees. He added that all 12 Artisan strategies with track records over 10 years have outperformed their benchmarks since inception net of fees, with those strategies compounding capital at average annual rates between 6% and nearly 13% and exceeding benchmarks by an average of 202 basis points annually net of fees.

He also pointed to recent third-party recognition. Gottlieb said Morningstar nominated Global Value Team portfolio manager Dan O’Keefe for the 2026 Morningstar Award for Investing Excellence: Outstanding Equity Portfolio Manager. He said Lipper named the team’s Global Value Fund (Institutional Class) the best in its Global Large-Cap Value Funds category for the three-, five-, and 10-year periods ended Dec. 31, 2025, and named Select Equity Fund (Institutional Class) the best in its Global Multi-Cap Value Funds category for the trailing three-year period ended Dec. 31, 2025. In addition, Gottlieb said Lipper named the EMsights Capital Group’s Artisan Global Unconstrained Fund (Institutional Class) the best in its Global Income Funds category over the trailing three-year period ended Dec. 31, 2025.

While long-term performance was a core theme, Gottlieb noted that “shorter-term trailing one-year performance has been weighed down by underperformance in a couple of our largest equity strategies,” which he said still have strong long-term track records.

First-quarter flows: net outflows led by equities; credit and alternatives positive

Artisan reported firm-wide net outflows of $3.1 billion in the first quarter. Gottlieb said outflows were concentrated in “a few equity strategies” and reflected client de-risking, reallocation after periods of asset class outperformance, and “some shifting to passive alternatives.”

Despite the firm-wide outflows, Gottlieb described positive developments in other areas and said 13% of Artisan’s strategies posted net inflows year to date. He outlined several growth areas:

• Sustainable emerging markets: Raised $250 million in the first quarter, with AUM “nearing $3 billion.”
• Credit: Net inflows of $800 million in the first quarter; Gottlieb said this marked the 15th consecutive quarter of positive credit flows.
• Alternatives: Raised $300 million in the first quarter, “primarily in the global unconstrained strategy,” where the firm is building a “realizable pipeline.”

Gottlieb said the firm expects continued strong business development in credit and alternatives, while describing the equity backdrop as “more challenging and difficult to predict.”

AUM, revenue, and expense trends

CFO C.J. Daley said Artisan exited 2025 with record AUM, a new all-time high in quarterly revenue, and its second-highest annual revenues and earnings. As of March 31, 2026, AUM was $173 billion, down 4% from the prior quarter and up 7% year-over-year. Average AUM was $182 billion, up 1% sequentially and up 9% from the prior-year quarter.

Daley said AUM declined sharply in March due to market conditions but “has largely recovered in April,” consistent with Gottlieb’s comment that AUM was “back up to nearly $184 billion” by the end of the prior week, near the all-time high reached in late February.

First-quarter revenues were $303 million, down 10% sequentially and up 9% year-over-year. Daley attributed the sequential decline primarily to the “expected absence of performance fees,” noting that the December quarter included $29 million of performance fees across six strategies, with most performance fee opportunities “measured and realized annually in that period.” He also said about $6 million of the sequential revenue decrease reflected two fewer days in the first quarter.

The weighted average fee rate was 67 basis points, down from the December quarter due to the absence of performance fees. Daley said adjusted operating expenses increased 4% sequentially, driven by the addition of Grandview Property Partners’ expenses, seasonal expenses, and long-term compensation expense.

Daley said full-year 2026 expense guidance was unchanged, excluding about $20 million of incremental fixed expenses tied to long-term incentive compensation and Grandview. He added that the firm continues to expect fixed expenses to rise at a low single-digit rate in 2026.

Adjusted operating income decreased 30% sequentially and increased 6% year-over-year, while adjusted net income per adjusted share declined 31% from the December quarter and increased 5% versus the prior-year quarter. Daley said the margin decline compared with the prior-year quarter was “primarily a result of the addition of Grandview results.”

Dividend, balance sheet, and seed capital

Daley said Artisan ended the quarter with $271 million in cash. During the first quarter, the firm redeemed about $50 million of seed capital, reducing seed investments on the balance sheet to $110 million. He said proceeds from seed capital redemptions are included in cash available for corporate purposes, reinvestment, or potential return to shareholders through the year-end special dividend.

The board declared a quarterly dividend of $0.77 per share for the March 2026 quarter. Daley said this represented a 24% decrease from the prior quarter and a 13% increase year-over-year, with the sequential decline reflecting lower cash generation mainly due to the absence of performance fees and seasonal expense patterns.

After funding the quarterly dividend, Daley said the firm retained about $150 million of excess capital to support organic growth, evaluate M&A opportunities, or return to shareholders.

Business development: platform expansion, distribution buildout, and M&A focus

Gottlieb said the firm continues to expand its platform methodically. In the first quarter, Artisan onboarded Grandview Property Partners, a real estate private equity firm focused on U.S. middle-market assets, and began laying groundwork to launch Grandview’s next flagship fund later this year. The company also added distribution talent in EMEA and the intermediate wealth channel, and filed an exemptive relief application with the SEC to offer ETF share classes of Artisan mutual funds.

During Q&A, Gottlieb attributed the quarter’s equity outflows to two main factors. First, he described rebalancing activity within international strategies following relative strength in EAFE markets, saying activity has been “very much rebalance-oriented” and that he has not seen termination activity. Second, he pointed to headwinds in the growth business tied to “shorter and intermediate term performance” challenges in the global opportunity strategy, which he said has pressured certain institutional relationships.

At the same time, Gottlieb cited positive developments within that franchise, including a “franchise fund” launched about a year ago that generated net inflows of $400 million in the quarter from a global client, bringing the strategy close to $1 billion in AUM. He also noted a “meaningful performance turnaround” in the Mid-Cap Growth strategy beginning in late 2024 and continuing through 2025 and into 2026, and said Global Discovery has “really good pipeline activity” supported by stable long-term performance.

On the opportunity set for acquisitions and team lift-outs, Gottlieb said Artisan is focused on expanding credit and alternatives. He said the firm is seeing opportunities to expand “more traditional credit globally” and described a “strong possibility” of completing something by year-end, while cautioning that “you never say it’s done until it’s done.” He also described a “robust pipeline” spanning differentiated credit, secondaries in private equity and real assets, and private credit, which he said has become “incrementally a little bit more interesting,” though the firm has “shied away” from parts of that market due to cycle concerns.

When asked about new institutional client segments, Gottlieb said he did not see untapped segments institutionally, but described the “majority” of opportunity as being in the intermediate wealth space. He said new hires and onboarding in the U.K. and Europe are beginning to yield results, and noted the intermediate wealth platform posted “a slight positive flow for the quarter” and delivered the firm’s second-best gross inflow quarter since early 2021. On the institutional outlook, Gottlieb said he does not have “direct line of sight” into massive inflows or outflows, describing a steady approach of staying close to clients, particularly when performance is more challenging.

About Artisan Partners Asset Management NYSE: APAM

Artisan Partners Asset Management Inc is a global investment management firm that specializes in active, fundamental research-driven strategies across a range of equity, fixed income and alternative asset classes. Founded in 1994 by Andrew Ziegler, the company has built a reputation for its team-based approach to portfolio construction, emphasizing deep sector expertise and independent analysis. Its product lineup includes U.S. and international equity strategies, global emerging markets, as well as credit and multisector fixed income offerings.

Artisan Partners serves a diverse client base that spans institutional investors, intermediaries and high-net-worth individuals located in North America, Europe and Asia.

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