Artisan Partners Asset Management Inc. Class A

Hello, and thank you for standing by. My name is Jason, and I'll be your conference operator for today. At this time, all participants are in a listen-only mode. After the prepared remarks, management will conduct a question-and-answer session, and conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. At this time, I will turn the call over to Michaela Taphorn, Director, Investor Relations for Artisan Partners Asset Management.

Thank you. Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Eric Holson, Chairman and CEO, and CJ Daly, CFO. Our latest results and investor presentation are available on the Investor Relations section of our website. Following these remarks, we will open the line for questions. And before we begin, I'd like to remind you that comments made on today's call, including responses to your questions, may deal with forward-looking statements. These are subject to risks and uncertainties and are presented in the earnings release and detailed in our filings with the SEC. We are not required to update or revise any of these statements following the call. In addition, some of our remarks made today will include references to non-GAAP financial measures. you can find reconciliations of those measures to the most comparable GAAP measures in our earnings relief. And I will now turn the call over to Eric Olson.

Thank you, Michaela, and thank you everyone for joining the call or reading the transcript. I will start on slide one, the same slide I always start with. We constantly remind ourselves who we are. Artisan Partners is a high-value-added investment firm designed for talent to thrive in a thoughtful growth environment. We manage active strategies with increasing degrees of freedom. We play a defined role within our clients' asset allocation structure. Our purpose is to generate alpha and compound wealth over the long term. To do so, we focus relentlessly on investments and our investments-first culture. As you can see on slide two, over long time periods, our investment strategies have added significant value and compounded wealth at attractive absolute rates. Eleven of our strategies have beaten their indexes by more than 300 basis points per year since inception after fees. For the trailing 12 months, 12 of our strategies beat their indexes by more than 400 basis points after fees. and seven strategies beat their benchmarks by more than 1,000 basis points after fees. High value-added active management at Artisan works. Why? Because our business is built for high value-added investments. Our culture prioritizes investments. We bring together the right talent, the right environment, and the right clients. We provide each of our investment teams with the autonomy and resources to capitalize on investment ideas, themes, dislocations, and other opportunities, some of them broad, some of them narrower. We regularly add degrees of freedom to increase the instruments, tools, and methods our investment teams can use to generate alpha. And we are extremely patient. We give our teams the time to let their philosophies and processes play out. We are long-term partners. Turning to slide three, our newest strategy, China Post Venture, exemplifies the ingredients we bring together. Tiffany Hsiao and UNUNG have a wealth of talent, experience, and ambition. They also have remarkable network and a clear vision for putting capital to work in greater China. As you can see on the slide, China offers an expansive opportunity set for small and mid-cap investing. And despite the attention China receives, we believe that many investors are under-allocated to the opportunity set we show on this slide and that demand for dedicated China strategies is a long-term secular trend. In addition to investing in public securities, The China post-venture strategy will invest in private companies, allowing the team to further capitalize on their extensive network and further differentiate the strategy. The China post-venture strategy launched in March and currently manages over 100 million. We are giving Tiffany and UNUN the autonomy and tools to do something different. We will also give them time to execute. We are extremely excited to watch what they do. Patience is a key feature of our culture. There is tremendous value in remaining disciplined over long time periods. It's not easy. There are many forces pushing people to react and change course. The daily scoreboard in our industry, headlines, tweets, and memes, quarterly reporting periods. Given pervasive short-term pressures, we work hard to maintain a patient mindset. and an organizational structure that extends time horizons. We embrace and lean into proven philosophies and processes, even if they are currently out of favor. Our value-oriented franchises are a great example. Value investing has had a tough run since 2008. Nonetheless, Artisan Partners' value-oriented teams have remained disciplined and true to who they are as investors. Our four value strategies with track records of 10 years or more have all outperformed their style indexes since inception. Their performance as value investors has allowed them to stay in the game. When the long-awaited value rotation arrived, they generated exceptional results as the one-year numbers on this slide show. Their discipline was rewarded. Their client's trust was rewarded. our patience as a firm was rewarded. We have not only stuck with value, we have reinvested in value. In 2020, we launched two new value-oriented strategies, the Select Equity Strategy managed by our global value team and the International Small Cap Value Strategy managed by our international value team. The new strategies are managed with the value-oriented investment philosophy and discipline of that Dan O'Keefe and David Samra have applied at Artisan Partners for nearly 20 years. Both strategies have performed well since inception. As with China Post Venture, we are extremely excited to watch how these strategies perform, compound wealth, and grow over time. Moving to slide five and the Artisan Credit Team. The flexibility and ability to allocate capital in distressed markets are important parts of active management. As slide five shows, dislocation events happen more than you might think. Each of these creates opportunity for the right manager with the right autonomy, flexibility, and tools. Brian Krug and the Artisan Credit Team have taken full advantage of these events. Over the last 12 months, the Artisan high income and credit opportunities strategies generated returns of 31.5% and 58.5%, respectively. Those returns significantly exceeded the benchmark return of 23.3% and the average high-yield bond fund return of 21.3%. As an investment firm, we're constantly looking for ways to help our investment teams further capitalize on opportunities to generate alpha and compound wealth. We see the serial dislocation in high-yield markets, and we see the credit team's skill at capitalizing on those dislocations. We are currently exploring a strategy that would give Brian and the credit team further flexibility to take advantage of dislocation, allocate capital into stress, and compound returns for clients. This is what we do as a high-value added investment firm. Stay relentlessly focused on investments, regularly add degrees of freedom, find the right clients on the right terms, and remain extremely patient. Slide 6 shows our long-term outcome. Since 2008, we have grown our AUM from $30.6 billion to $162.9 billion. Market returns have contributed $105 billion Returns in excess of benchmarks have contributed approximately $25 billion, and net flows have contributed $2.7 billion. Our growth results from generating investment returns for clients. Flows are important. They provide our investment talent with capital to compound. This is a business. We need and want clients. Performing for them is our highest priority. But we do not expect to grow through sales. We expect to grow through investment excellence. For the period shown on this slide, our excess returns alone were more than nine times our cumulative net flows. We are fulfilling our purpose as an investment firm. We are generating outcomes for stakeholders that compound over time and enhance individual lives and communities. You can expect us to remain relentlessly focused on investments, maintaining our investment-first culture, adding degrees of freedom, finding new ways to capitalize on investment opportunities, and remaining extremely patient. I will now turn it over to CJ to discuss our financial results.