Artisan Partners Asset Management Inc. (APAM) Bundle
A Brief History of Artisan Partners Asset Management Inc.
Company Overview
Artisan Partners Asset Management Inc. (APAM) is a publicly traded investment management firm, primarily focused on providing investment advisory services to institutional and individual clients. The firm was founded in 2001 and went public in 2013. As of September 30, 2024, Artisan Partners manages approximately $162.8 billion in assets under management (AUM), reflecting a 14% increase from $142.2 billion a year earlier.
Financial Performance
In the third quarter of 2024, Artisan Partners reported revenues of $279.6 million, representing a 12% increase from $248.7 million in the same quarter of 2023. The operating income for the same period was $93.2 million, with an operating margin of 33.3%.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $279.6 million | $248.7 million | +12% |
| Operating Income | $93.2 million | $82.2 million | +13% |
| Net Income | $72.9 million | $53.2 million | +37% |
| Earnings Per Share (EPS) | $1.03 | $0.76 | +36% |
Dividends and Stockholder Returns
During the three months ended September 30, 2024, Artisan Partners declared a dividend of $0.71 per share of Class A common stock. This reflects a historical trend of returning capital to shareholders, with dividends increasing from $0.61 per share in Q3 2023.
Market Conditions and Economic Environment
The financial performance of Artisan Partners is significantly influenced by market conditions. The firm’s revenues are directly linked to the value of its AUM, which can fluctuate due to various economic factors, including inflation and interest rate changes. The effective income tax rate for Artisan Partners was 19.9% for the nine months ending September 30, 2024, compared to 19.1% for the same period in 2023.
Asset Management Segments
Artisan Partners operates through several investment strategies, including equity, fixed income, and multi-asset strategies. The firm has seen significant growth in its investment advisory fees, which totaled $814.8 million for the nine months ended September 30, 2024, up from $726.1 million for the same period in 2023.
| Investment Advisory Fees | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Total Fees | $814.8 million | $726.1 million | +12% |
| Management Fees | $814.7 million | $725.9 million | +12% |
| Performance Fees | $86,000 | $154,000 | -44% |
Conclusion of Financial Data
Artisan Partners continues to demonstrate strong financial performance in 2024, with substantial growth in revenues and net income, alongside a commitment to returning value to shareholders through dividends. The firm's strategies and market adaptability remain critical as it navigates a complex economic landscape.
A Who Owns Artisan Partners Asset Management Inc. (APAM)
Ownership Structure
As of September 30, 2024, Artisan Partners Asset Management Inc. (APAM) holds an ownership interest of approximately 87% in Artisan Partners Holdings LP, a limited partnership through which the company operates. This marks an increase from 86% at December 31, 2023.
Limited partners of Holdings, some of whom are employees, held approximately 13% of the equity interests in Holdings as of September 30, 2024.
Equity Ownership
The breakdown of APAM's equity ownership in Holdings as of September 30, 2024, is as follows:
| Type of Ownership | Units Outstanding | Ownership Percentage |
|---|---|---|
| APAM Holdings GP Units | 70,069,120 | 87% |
| Limited Partnership Units | 10,292,019 | 13% |
| Total | 80,361,139 | 100% |
Shareholder Composition
The shareholders of Artisan Partners include institutional investors, individual shareholders, and employees, with significant holdings distributed among various groups. The Class A common stock is primarily held by public investors, while Class B and Class C common stocks are held by employees and management.
Recent Transactions
During the nine months ended September 30, 2024, certain limited partners of Holdings exchanged 1,168,667 common units for an equivalent number of shares of Class A common stock. This activity highlights the ongoing transactions between the partnership and its shareholders, impacting the ownership structure.
Dividends and Distributions
APAM declared and distributed dividends of $0.71 per share of Class A common stock during the three months ended September 30, 2024. A quarterly dividend of $0.82 per share was declared effective October 29, 2024.
Financial Overview
For the three months ended September 30, 2024, APAM reported a total revenue of $279.6 million, reflecting a 12% increase from the previous year. The average assets under management (AUM) were $162.8 billion, up 14% compared to the same period in 2023.
Market Position
Artisan Partners continues to maintain a competitive position in the asset management industry, supported by a diversified ownership structure and a robust portfolio of investment strategies. The company's strategic decisions regarding capital allocation and shareholder distributions are closely monitored, reflecting its commitment to enhancing shareholder value.
Artisan Partners Asset Management Inc. (APAM) Mission Statement
Corporate Philosophy
Artisan Partners Asset Management Inc. (APAM) aims to deliver superior investment performance through active management and a commitment to long-term client relationships. The company emphasizes a culture of collaboration among its investment teams, striving to leverage diverse perspectives and expertise to achieve optimal outcomes for clients.
Investment Approach
APAM's investment approach is characterized by a focus on fundamental research and a disciplined investment process. This includes a commitment to understanding the underlying value of investments and a long-term perspective that prioritizes client interests over short-term market fluctuations.
Financial Performance Overview
As of September 30, 2024, Artisan Partners reported significant financial metrics reflecting its operational success:
| Metric | Value (Q3 2024) | Value (Q3 2023) | Change (%) |
|---|---|---|---|
| Average Assets Under Management (AUM) | $162.8 billion | $142.2 billion | 14% |
| Revenue | $279.6 million | $248.7 million | 12% |
| GAAP Operating Margin | 33.3% | 33.0% | 0.9% |
| Adjusted Operating Margin | 35.0% | 32.5% | 7.7% |
| Earnings Per Share (EPS) | $1.03 | $0.76 | 35.5% |
| Dividends Declared per Share | $0.71 | $0.61 | 16.4% |
Client-Centric Focus
APAM emphasizes its commitment to client success by maintaining transparency in its investment process and aligning its interests with those of its clients. The firm aims to generate long-term value for clients by focusing on both performance and risk management.
Market Position
As of September 30, 2024, Artisan Partners has established itself in the asset management industry with a robust portfolio across various investment strategies:
| Investment Strategy | AUM ($ million) | Client Cash Inflows ($ million) | Client Cash Outflows ($ million) | Net Cash Flows ($ million) |
|---|---|---|---|---|
| Equity | $151,267 | $4,076 | $(5,713) | $(1,637) |
| Fixed Income | $13,072 | $1,982 | $(1,112) | $870 |
| Alternative | $3,501 | $152 | $(128) | $24 |
| Total | $167,840 | $6,210 | $(6,953) | $(743) |
Long-Term Vision
Artisan Partners is focused on sustainable growth and long-term investment strategies that build upon its foundational principles of integrity and performance. The company is committed to enhancing its investment capabilities while ensuring that its growth aligns with the evolving needs of its clients.
How Artisan Partners Asset Management Inc. (APAM) Works
Financial Overview
As of September 30, 2024, Artisan Partners Asset Management Inc. (APAM) reported average assets under management (AUM) of $162.8 billion, an increase of 3% from the previous quarter's average of $158.6 billion and a 14% increase from $142.2 billion in the same quarter of 2023.
The company generated $279.6 million in revenue for the three months ended September 30, 2024, marking a 12% increase from $248.7 million for the same period in 2023. The GAAP operating margin was reported at 33.3%, slightly up from 33.0% in the prior year.
In terms of earnings per share, APAM reported $1.03 for both basic and diluted shares, with an adjusted EPS of $0.92.
For the three months ended September 30, 2024, APAM declared a dividend of $0.71 per share of Class A common stock, with a subsequent declaration of $0.82 effective October 29, 2024.
Assets Under Management
APAM's assets under management are categorized by asset class. The following table outlines the AUM by asset class as of September 30, 2024:
| Asset Class | Beginning AUM (in millions) | Gross Client Cash Inflows (in millions) | Gross Client Cash Outflows (in millions) | Net Client Cash Flows (in millions) | Ending AUM (in millions) |
|---|---|---|---|---|---|
| Equity | $143,942 | $4,076 | $(5,713) | $(1,637) | $124,448 |
| Fixed Income | $11,670 | $1,982 | $(1,112) | $870 | $13,072 |
| Alternative | $3,275 | $152 | $(128) | $24 | $3,501 |
| Total | $158,887 | $6,210 | $(6,953) | $(743) | $167,840 |
Revenue Sources
APAM derives its revenue primarily from investment management fees, which are largely based on the average assets under management. The revenue breakdown for the three months ended September 30, 2024 is as follows:
| Revenue Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Management Fees | $279.5 | $248.7 |
| Performance Fees | $0.036 | $0.031 |
| Total Revenue | $279.6 | $248.7 |
Operating Expenses
For the three months ended September 30, 2024, APAM reported total operating expenses of $186.4 million, which included:
- Compensation and benefits: $149.0 million
- Distribution, servicing, and marketing: $6.4 million
- Occupancy: $8.2 million
- Communication and technology: $13.1 million
- General and administrative: $9.7 million
Cash Flow and Liquidity
As of September 30, 2024, APAM's liquidity position was as follows:
| Liquidity Item | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $253.9 |
| Accounts Receivable | $110.0 |
| Seed Investments | $157.9 |
| Undrawn Commitment on Revolving Credit Facility | $100.0 |
Tax and Earnings
APAM's effective tax rate for the nine months ended September 30, 2024, was 19.9%, slightly up from 19.1% in 2023. The provision for income taxes included:
| Tax Component | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Federal | $9,658 | $4,240 |
| State and Local | $3,457 | $950 |
| Foreign | $(40) | $337 |
| Total | $13,075 | $5,527 |
Stockholder Equity
As of September 30, 2024, the total stockholders' equity of APAM was $405.0 million, which includes:
| Equity Component | Amount (in thousands) |
|---|---|
| Class A Common Stock | $701 |
| Class B Common Stock | $16 |
| Class C Common Stock | $87 |
| Additional Paid-in Capital | $214,854 |
| Retained Earnings | $158,239 |
| Accumulated Other Comprehensive Income (Loss) | $(1,818) |
| Noncontrolling Interests - Artisan Partners Holdings | $32,949 |
| Total Stockholders’ Equity | $405,028 |
How Artisan Partners Asset Management Inc. (APAM) Makes Money
Revenue Sources
Artisan Partners Asset Management Inc. primarily generates its revenue through investment management fees, which are based on the assets under management (AUM) across various investment vehicles. As of September 30, 2024, the company reported total revenues of $814.8 million for the nine months ended, with management fees constituting the majority of this figure.
| Revenue Type | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Management Fees | 279.6 | 248.7 | 12.0 |
| Performance Fees | 0.1 | 0.1 | 0.0 |
| Total Revenues | 279.6 | 248.7 | 12.0 |
Assets Under Management (AUM)
The AUM is a critical metric for Artisan Partners, influencing their revenue generation. As of September 30, 2024, the company reported an AUM of $167.8 billion, reflecting an increase of 23% from the previous year. The average AUM for the same period was $158.5 billion, which is a 14.1% increase year-over-year.
| Period | Ending AUM (in billions) | Average AUM (in billions) | Year-over-Year Change (%) |
|---|---|---|---|
| Q3 2024 | 167.8 | 158.5 | 23.0 |
| Q3 2023 | 136.5 | 138.0 | - |
Management Fees Breakdown
Artisan Partners charges management fees based on a percentage of AUM, which varies by investment strategy and vehicle type. The weighted average management fee as of September 30, 2024, was 68.5 basis points, compared to 69.5 basis points in Q3 2023. This decrease was primarily due to changes in strategy mix.
| Vehicle Type | Q3 2024 Management Fees (in millions) | Q3 2023 Management Fees (in millions) | Weighted Avg. Management Fee (bps) |
|---|---|---|---|
| Artisan Funds | 161.4 | 145.3 | 88.4 |
| Artisan Global Funds | 13.3 | 11.2 | 90.3 |
| Separate Accounts and Other | 104.8 | 92.2 | 49.5 |
Operating Expenses
Operating expenses for Artisan Partners also play a crucial role in net income generation. For the nine months ended September 30, 2024, total operating expenses amounted to $557.3 million, with compensation and benefits accounting for 55% of total revenues.
| Expense Type | Q3 2024 Expense (in millions) | Q3 2023 Expense (in millions) | Change (%) |
|---|---|---|---|
| Total Operating Expenses | 557.3 | 498.9 | 11.7 |
| Total Compensation and Benefits | 445.7 | 392.6 | 13.5 |
Net Income and Earnings Per Share
Net income attributable to Artisan Partners Asset Management Inc. was $190 million for the nine months ended September 30, 2024, representing a 21% increase compared to $157.5 million for the same period in 2023. The basic earnings per share (EPS) for Q3 2024 was $2.68, compared to $2.27 for Q3 2023.
| Period | Net Income (in millions) | Basic EPS | Change (%) |
|---|---|---|---|
| Q3 2024 | 190.0 | 2.68 | 21.0 |
| Q3 2023 | 157.5 | 2.27 | - |
Market Conditions and Performance Fees
Market conditions significantly influence Artisan's performance and revenue generation. As of September 30, 2024, approximately 3% of Artisan's AUM was subject to performance fee arrangements, indicating potential for additional revenue based on investment performance. In Q3 2024, performance fees totaled $0.1 million, unchanged from the previous year.
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Article updated on 8 Nov 2024
Resources:
- Artisan Partners Asset Management Inc. (APAM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Artisan Partners Asset Management Inc. (APAM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Artisan Partners Asset Management Inc. (APAM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.