Artisan Partners Asset Management Inc. Class A

Welcome to the Artists and Partners Asset Management Business Update and Third Quarter 2026 Earnings Conference Call. All participants will be in 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 your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Artisan Partners Asset Management. Please go ahead.

Welcome to the Artisan Partners Asset Management business update and earnings call. Today's call will include remarks from Jason Gottlieb, CEO, and CJ Daley, CFO. Following these remarks, we'll 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 today, 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 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'll now turn it over to Jason.

Thank you for joining the call today. Artisan Partners is a talent-driven investment platform that brings together exceptional investors, the autonomy to pursue disciplined investment processes, and the resources and business leadership necessary to build enduring investment franchises. We believe this combination differentiates Artisan Partners and drives long-term value creation for clients and shareholders. Our third quarter results reflect both the strength and the challenges of our business. While investment performance and client flows were challenged in portions of our equity platform, we continue to demonstrate the growth potential of our expanding credit and alternatives businesses. We are also making meaningful progress broadening our investment capabilities, developing new investment vehicles, and positioning the platform for future growth. Investment performance is the foundation of everything we do. Our long-term investment results across asset classes, investment franchises, investing styles, and inception dates demonstrates the strength and consistency of our platform. At quarter end, 92% of our assets under management outperformed their benchmarks over 10 years, and 99% since inception grossed the fees. Short-term investment performance was less favorable during the quarter, with relative underperformance across several of our larger equity strategies. The one and three year numbers shown on the slide were particularly impacted by the performance of our international value and global value strategies, both of which have had very strong performance in October. Calculated as of October 26th, 75% and 84% of our AUM are outperforming over the trailing one and three year periods respectively. We continue to see strong results in credit and alternatives. 100% of our credit AUM has outperformed the benchmark over the reported time periods since inception of our first credit franchise in 2014. Emsight's Capital Group has also established an outstanding investment track record. All three of the franchise's strategies have generated double-digit annualized returns since inception, gross of fees, and meaningful excess returns relative to their respective benchmarks. These results demonstrate the breadth of our multi-asset investment platform and reinforce our confidence in the long-term value of our business. Turning to slide four, net client outflows totaled $10.6 billion for the quarter. As previously disclosed, approximately $7.8 billion of the net outflows included $1.9 billion associated with the U.S. value team wind down and $5.9 billion related to the rebalancing of a large global value client relationship. Business development credit and alternatives remain strong. Combined, our credit and alternative strategies generated $1.1 billion in net inflows during the third quarter and have raised $3.2 billion year-to-date. For the quarter, credit strategies generated approximately $290 million of net inflows, marking the 17th consecutive quarter of positive credit flows, and we raised approximately $770 million in alternatives, led by strong growth in the Artisan Global Unconstrained Mutual Fund. Turning to the next slide, over the past five years, combined credit and alternatives AUM has nearly doubled to more than $26 billion. Increasing from 8% to 15% of firm-wide AUM. During that period, we have added custom credit solutions and the floating rate strategy to the Artisan Credit Team's lineup. We have onboarded the M-Sites Capital Group and launched Global Unconstrained, Emerging Market Debt Opportunities, and Emerging Market Local Opportunities. We have added fixed income talent to the International Value Group and launched the Global Special Situation Strategy. and at the beginning of this year, we acquired Grandview Property Partners and recently closed on an anchor investor for their fourth flagship fund. The Artisan Credit Team demonstrates what we believe we can accomplish with each of these other franchises. Since launching in 2014, the credit team has established an outstanding investment track record and built a diversified credit business with over $16 billion in assets under management. We see significant opportunities to build on that success by expanding the team's investment capabilities across public and private credit, broadening its geographic reach, and developing new investment vehicles. These initiatives represent the next phase of growth for our credit franchise, leveraging the team's established investment expertise and our broader operating and distribution capabilities. Across our platform, including equities, we are working with our investment teams to further develop their franchises Broaden degrees of freedom, increase the breadth and quality of talent, and expand the ways clients can access their investment expertise. During 2026, we have launched 13 new usage fund share classes to complement our expanding reach into the UK and European wealth market. In the fourth quarter, we anticipate launching an ETF share class of the Artisan Select Equity Fund and Artisan Focus Fund to broaden investor access in the wealth market. and we are developing an interval fund structure to bring our public and private credit capabilities to wealth clients in 2027. We believe the opportunity set available to Artisan today is broader than at any point in our history. We have proven our platform works across equities, credit and alternatives. We are excited about further growing with existing franchises as well as partnering with external talent via lift outs or acquisitions. We can do more and move faster, yet stay true to our principles, maintaining the highest investment standards, aligning interests, delivering a distraction-free investment environment, and maintaining a long-term orientation. I will now turn the call over to CJ to discuss our financial results.