Artisan Partners Asset Management Inc. Class A

Hello, and thank you for standing by. My name is Tom, 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 is being recorded. At this time, I will now turn the conference over to Michaela Taffhorn, 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 Coulson, CEO, and CJ Daley, 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, may deal with forward forward-looking statements. These are subject to risks and uncertainties and are presented in the earnings release and are detailed in our filings for 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 the earnings release. 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. We manage our business based on the philosophy and principles on slide one. We align the firm with long-term industry evolution to manage thoughtful growth. We take incremental steps to create stability and duration in our business. And we believe this is authentically managing for the long term. Turning to slide two, in the early years of Artisan Partners, we captured a powerful trend of talent-free agency and a categorization of active management. Within categories, talent had the opportunity to shine and was well aligned with end clients. Like any powerful trend, the categorized approach eventually became over-managed, over-structured, and over-supplied, while the universe of U.S. public equity shrunk in half. Today, the industry has de-emphasized individual and creative talent, instead packaging passive strategies and individual talent into investment solution products. Emphasis has been on scale, packaging, fee rate, and distribution. Great investment talent has been diluted, underappreciated, and poorly aligned with end client outcomes. We believe that we are at an inflection point. at the beginning of a new phase of active management in which talent is re-emerging out of rigid, structured strategies seeking autonomy and the freedom to be innovative and creative. The old categories of active management are increasingly breaking down and blurring with increasing demand for active managers who can invest broadly to generate return and manage risk. We see long-term demand for high value-added active management that includes the use of concentration, multiple security types, varied time horizons, and the full capital structure. We also see an industry trending towards two broad categories, passive and exposure on one end and active and alternatives on the other. Within the latter, we highlight private equity and venture capital extending duration into public securities, hedge funds converging into long bias strategies managed relative to an index, and hedge funds and other active managers converging into hybrid or crossover funds, including public and private companies. In short, high-value active management has evolved to incorporate a full array of investment and security types across an array of time horizons. This industry evolution presents artisan partners with tremendous opportunity. We believe it's a reaffirmation of active management. It embraces degrees of freedom, broader opportunity sets, and more tools to be different. It values creative talent and differentiation, and it more directly aligns talent with end clients. As we look forward, we expect to add more investment capabilities and more degrees of freedom. We will continue to empower unique talent within active management operating autonomously. We see active opportunity sets continuing to grow and overlap, evolving away from narrowly defined boxes. As we have in the past, we will provide end clients with undiluted access to unique investors operating within large or inefficient spaces. This evolution places a premium on investment talent and the operational capability to invest broadly. It will allow our existing teams to further grow their opportunity sets, capabilities, and businesses. And it will help us to continue to attract and add external talent operating in different spaces and across spaces that were traditionally bifurcated. We see a great supply of talent in the marketplace. And we have a proven formula and process for matching talent, opportunity sets, and long-term demand to support sustainable investment franchises. I want to say a few words about the supply of talent on slide three. Over the years, the number and types of homes for talent have grown. That creates competition, but it also creates supply. We believe our combination of autonomy, resources, economic alignment, patience, and proven success remains unique and attractive in the marketplace. Because of the investments we have made in our operational platform, we can support a wide array of investment talent and strategies across the high value added spectrum. The convergence of asset classes and investing styles and the importance to talent of broad opportunity sets creates opportunities for us to attract talent from sources that even a few years ago would have been unlikely. At the large integrated firms, industry consolidation and the focus on scale and solutions increases our relative attractiveness to active talent, talent that is underappreciated and poorly aligned. We also believe that the multi-strategy platforms may become a fertile source of new talent. Given the number of investors that these platforms have attracted and developed over the last decade or so, we expect to see more talent emerge from this source. Across the board, We are excited about the supply of talent in the marketplace today. We're meeting with compelling talent. Our proven success at franchise development creates a positive feedback loop, increasing both the quantity and quality of opportunities. And we have the capacity and bandwidth to do more. Along with talent, the other two components of our growth formula are the right investment opportunity set and long-term demands. We focus on inefficient spaces and large and growing opportunity sets, either from an increasing number of issuers or by redefining a traditional opportunity set, sometimes both. In all cases, we are identifying opportunities to differentiate and add value for clients, where we expect there will be long-term demand from sophisticated allocators who value what truly active managers do. Recently, You've seen us bring together these growth components in a number of areas. Our credit team enhances the high yield opportunity set by including floating rate loans, roughly doubling their investable universe. Our China Post Venture Group accesses growth in China through both publicly listed and private companies. China's on and offshore listed markets are already larger than those in the US in terms of the number of issuers. They are growing. and they are less efficient. The CPV team increases the opportunity set further with late-stage private investments, giving the team greater access to growth in a world in which many growing companies are staying private longer. In all three of these areas, differentiated credit, China, and private markets, we see large, growing, less efficient opportunity sets and long-term demand from allocators looking for active investment management. These aren't the only areas where we will add capabilities and develop businesses, but they are three areas that we are particularly focused on, where we have toeholds for future growth and where we can add value for talent and clients. Our newest team, Emerging Markets Debt, brings all these themes together. Emerging Markets Debt brings all these themes together. Outstanding talent disrupted by industry consolidation. A large, growing, inefficient, often difficult to access opportunity set with plenty of opportunity to differentiate and add value. And long-term demand from investors seeking yield, total return, and diversification. Since the founding members joined Artisan in September, we have built a team of 10 plus investment professionals. We're standing up a next generation set of tools and systems, which will further increase our operating capacity and breadth. And we are in the process of establishing three investment strategies. Blended currency, emerging market set opportunities. Local currency, emerging market local opportunities. And the highest degree of freedom strategy, global unconstrained. We currently expect to launch these strategies in the first half of this year. Slide 6 shows the long-term outcome for our stakeholders. We align talent, the right investment opportunity sets, and long-term demand. We also align economic interests and time horizons across stakeholders. Our people, our management team, our board, our clients, our shareholders. The result is a highly productive firm. A firm that adds value for all its stakeholders. Absolute returns and alpha for clients. stable rewarding long-term home for our people and a predictable source of financial return for our shareholders creating sustainable value takes time outcomes are lumpy over short time periods but over the long term there is a steady predictable growth outcome in 2021 we generated record annual revenues of 1.23 billion and adjusted EPS of $5.03 per share. When we pay our dividend in February, we will have distributed $29.55 per share since our IPO in 2013, representing nearly 100% of our IPO share price. We have returned nearly 100% of investor capital since the IPO, while at the same time growing and diversifying the firm from five investment teams and $74 billion in AUM to 10 teams and $175 billion in AUM. Consistent with who we are and the themes I've discussed on this call, we expect to accelerate the evolution of our firm and continue to generate value-added outcomes for all of our stakeholders, clients, associates, and shareholders. I will now turn it over to CJ to discuss our financial results.