Artisan Partners Asset Management Inc. Class A

Hello, and thank you for standing by. My name is Jason, and I will be your conference operator 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. Please go ahead.

Thank you. Welcome to the Artisan Partners Asset Management business update and earnings call. Today's call will include remarks from Eric Holson, CEO, and CJ Bailey, 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. Before we begin, I'd like to remind you that comments made on today's call including responses to questions, we deal with forward-looking statements. These are subject to risks and uncertainties and are presented in the earnings release in detailed inter-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 both measures to the most comparable gap measures in the earnings relief. And with that, I'll now turn the call over to Eric Holson.

Thank you, Michaela, and thank you, everyone, for joining the call or reading the transcript. Thoughtful growth is one of our three foundational pillars. Beginning 25 years ago, during our startup phase, we benefited from talent, style categorization. Over time, we naturally evolved into a global organization with non-U.S. clients and investment strategies oriented towards a broader client base. During both our startup and global growth periods, we benefited from a naturally growing client base and asset allocation trends working in our favor. As our industry naturally ebbs and flows, we have stayed true to who we are. and fees, but on investments and performance. We have taken the opportunity to expand guidelines with more investment degrees of freedom so that our high value added active strategies better complement growing allocations to passive and exposure strategies, which have greater scale and lower fees. And we have broadened our firm with credit and alternative oriented strategies. increasing our investment degrees of freedom and broadening our platform we have further enhanced our firm as a natural home for truly active high value-added investors today we believe exposure and scaled solutions are starting to reach many asset pool targets we also believe that demand for differentiated active investment strategies including alternatives will continue to grow and broaden looking forward we think for growth the evolution of private markets and demand for alternative strategies, the under-allocation of portfolios to China, the world's second largest economy, and ongoing industry disruption. With new investment teams and strategies, we expect to capture these growth opportunities, as we have done for 25 years. And we expect to marry revenues from new In our view, compounding revenue growth over long time periods is more meaningful than net flows over short time periods. Compound revenue growth requires the management of strategies holistically, managing capacity, flows, time and duration, fees and economic alignment to stack the deck in our favor to compound assets and generate strong compound revenue growth over long periods. Slide 2 illustrates our two growth levers. During the global period, we grew new strategies from zero to more than $21 billion in AUM. Today, the strategies we launched during the global period represent approximately $60 billion of our AUM. While we were building and growing in market returns and $13.4 billion in alpha, adding another $33 billion to our total AUM after returning $40.7 billion in net capital to clients. Slide 3 summarizes the opportunities I mentioned earlier. Four growth opportunities are driving our current outlook and new activity. We have discussed three of these on recent quarterly calls. We believe that investment talent, asset allocation preferences favor more new strategies to support the growth with who we are. They are not new, but each has cemented in the last few years and it makes sense for us to invest more behind all four. In addition, because of investments we have made in our platform and capabilities over the last several years, we are now in a position to execute across all of these areas. investment team, highlighted on slide four. Mike Sarami, Mike O'Brien, and Sarah Orban joined us in September to build a new investment team focused on emerging market credit and macro opportunities. This is a seasoned group with a long history together. Their opportunity set is broad in terms of countries, currencies, issuers, and instruments. Current and forward-looking EM yields are attractive relative to alternatives. There is ample opportunity to generate alpha and differentiate from peers and the index. Demand from institutional and wealth channel investors is large, growing, and we believe durable, as allocators are hungry for yield and increasingly globalizing their credit allocations. plan to maximize the probability of success. We expect to launch the team's first strategy in the first half of next year. On slide five, we place what the new team will be doing within a simplified view of the broader credit landscape. The new team's first strategies will fall into the EM debt and non-traditional bond buckets. Concurrently, As with EM debt, the leveraged loan space is a large and growing opportunity set, poorly tracked by indexes, and offer ample opportunity for alpha and differentiation. By the middle of next year, we expect to have multiple differentiated credit and yield-oriented strategies managed by proven investment leaders and growing asset classes where investment talent can add significant value. Looking further into the future, The skill set of both our newest team and our credit team lend themselves to further expansion into additional credit markets where we believe scaled participants and inefficiencies create significant opportunity for high-value added investors. Moving to my last slide, the longest-term trend and maybe the most powerful working in our favor is industry disruption. itself at the individual firm level and more broadly. Artisan Partners has always taken advantage of disruption. We have always offered a unique combination of the investment autonomy and customization associated with owning one's own firm and the resources and support offered by a big firm. That remains true today. We provide investment leaders with investment autonomy, an unwavering commitment to of repeated success, discipline on fees and capacity management, economic alignment and transparency, and critically, patience and a long-term time horizon. Since our founding 25 years ago, the number and types of homes for investment talent have proliferated, and there are more options that look like Artisan. But we believe our value proposition remains unique. outcomes, ever-shortening time horizons making it increasingly difficult to execute a long-term investment strategy and maintain a quality of life. These trends should create more and higher quality opportunities for us to partner with new talent in asset classes with long-term demand. We believe we are better positioned for future growth today than ever before. We expect our current strategy investment platform to leverage, and the wind is at our back. I expect us to continue to generate alpha for clients, expand opportunities for talent, and grow revenue and returns for shareholders. We will do it in our way, consistent with who we are as an investment firm and over the long-term time horizons we target. I will now turn it over to CJ to discuss our financial results. Thanks, Eric.