Artisan Partners Asset Management Inc. Class A

Good day, and welcome to the Artisan Partners Asset Management Business Update and First Quarter Earnings Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Brennan Hughes, Head of Investor Relations. Please go ahead.

Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Eric Coulson, CEO, Jason Gottlieb, President, and CJ Daly, CFO. Following these remarks, we will open the line for questions. Our latest results and investor presentation are available on the Investor Relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including but not limited to the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed in the statement. and we assume no obligation to update or revise any of these statements following the presentation. In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and the supplemental materials, which can be found on our investor relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I will now turn it over to Eric.

Thank you for joining the call or reading the transcript. We value your time. Artisan Partners is built for the uncertainty and volatility of markets. Our investment teams have the autonomy, experience, and degrees of freedom to execute through these periods. The ability to use cash, geography, market cap, an array of instruments to take and manage risk, and the judgment, discipline, and patience to remain true to their investment philosophies and client expectations. Historically, our investment teams have taken advantage of uncertainty and volatility to add value for clients. We believe the same will be true this time around. Our business model is a source of stability for our people, our clients, and our shareholders. a majority of our expenses, including compensation, adjust automatically with changes in our AUM, allowing us to remain focused on executing for our clients and thoughtfully growing our business. In that regard, volatility creates opportunity for us in the broader marketplace as asset allocators seek established and trusted managers and investment talent seeks a stable long-term home. For Artisan, Disruption truly creates opportunity. Since 2013, we've expanded from five investment teams to 11. We have increased the number of investment strategies we offer from 12 to 27. We have evolved from a long-only public equity manager to a multi-asset class investment platform. We now have two fixed income teams, four fixed income strategies, and six alternative strategies. And we have reoriented our firm to align with demand from both the traditional institutional channel and the private wealth market. This includes realigning our distribution structure and team and evolving from a bought not sold mentality to a sales culture. Today, approximately 60% of our AUM is managed on behalf of what we consider intermediated wealth clients. Through all this change, we have demonstrated the repeatability of our model and process across investment leaders, generations, geographies, asset classes, and distribution channels. We have performed for existing clients, thoughtfully grown the firm from next generation high value added investing, and generated a healthy return for shareholders. Slide two is a snapshot of our repeatable success. This shows our 11 strategies with track records of more than 10 years. Developing World, which Jason will discuss, will join this group in July. The returns on this slide are average annual returns since inception after fees and expenses. To help better understand the significance of our outperformance, let me translate one of these outcomes into dollars. One million invested in the Artisan Global Value Strategy 18 years ago would be worth 4.1 million today after fees. Had the same one million been invested in the same manner as the index, it would be worth 2.9 million today. Artisan's Global Value's 205 basis points of average annual outperformance after fees translated into 1.2 million of more wealth, over 40% more wealth than the index approach. In addition to the consistency of the absolute and excess returns, we are equally proud of the consistency of our investment talent and their execution through time. We have done what we have told our clients what we would do over long periods of time. Even the strategies no longer led by founding portfolio managers are led by portfolio managers with long tenures at Artisan. They are known entities. We have achieved these long-term outcomes by knowing who we are, focusing on what we can influence, and taking a long-term view and avoiding trying to be all things to all people. We try to maintain an ideal home for investment talent. We provide that talent with expanding degrees of freedom to generate absolute returns and manage risk. We launch strategies we believe will have long-term demand from sophisticated investors who understand the scarcity of alpha. We execute through periods of short-term noise, uncertainty, and volatility to generate long-term outcomes for our people, our clients, and our shareholders. Jason will discuss several recent examples of this process at work.