Q4 2024 Artisan Partners Asset Management Inc Earnings Call
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Unknown Executive: Good day everyone and welcome to the Artisan Partners fourth quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please say no to a conference specialist by pressing the star key followed by zero.
Good day, everyone and welcome to the Artisan partners fourth quarter 2024 earnings Conference call.
All participants will be in a listen only mode.
Need assistance, they say no a conference specialist by pressing the star key followed by zero.
Unknown Executive: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one using a touch 10 telephone.
After todays presentation, there will be an opportunity to ask questions.
Ask a question you May press Star and then one using a touch tone telephone.
Unknown Executive: draw your questions, you may press star and two Please also note today's event is being recorded.
Draw your questions you May press star two.
Please also note today's event is being recorded.
Brennan Hughes: At this time, I'd like to turn the floor over to Brennan Hughes, Head of Investor Relations. Please go ahead.
Speaker Change: At this time I'd like to turn the floor over to Brendan Hughes head of Investor Relations. Please go ahead.
Unknown Executive: Welcome to the Artisan Partners Asset Management Business Update and Earnings Call.
Speaker Change: Welcome to the artisan partners asset management business update and earnings call. Today's call will include remarks from Eric Colson, CEO, Jason Gottlieb President and C. J Daley CFO. Following these remarks, we will open the line for questions.
Unknown Executive: Today's call will include remarks from Eric Colson, CEO, Jason Gottlieb, President, and CJ Daley, CFO. Following these remarks, we will open the line for questions.
Unknown Executive: 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.
Speaker Change: Our latest results and Investor presentation are available on the Investor Relations section of our website.
Speaker Change: 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.
Speaker Change: 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.
Unknown Executive: In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures through the most comparable gap measures in the earnings release and the supplemental materials, which can be found on our investor relations website.
Speaker Change: 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.
Unknown Executive: 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.
Speaker Change: Also please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any artisan investment products or a recommendation for any investment service I will now turn it over to Eric.
Eric Colson: I will now turn it over to Eric. Thank you, Brennan, and thank you everyone for joining the call or reading the transcript.
Eric Colson: Thank you Brendan and thank you everyone for joining the call or reading the transcript.
Eric Colson: We passed our 30th anniversary as a firm in December. Throughout our history, we have remained true to who we are as a high-value-added investment firm designed for talent to thrive in a thoughtful growth environment. Based on those first principles, we have built an investment platform that supports, accelerates, and amplifies investment talent in order to invest differently, generate compelling returns, and build durable investment franchises. We combine autonomy, entrepreneurialism, and economic alignment with the depth and breadth of resources available to a global multi-asset class investment manager with over 160 billion of assets under management. Each of our teams benefits from best of breed and customized support across people, technology, data, execution, and capital.
Eric Colson: We passed our 30th anniversary as a firm in December.
Eric Colson: Throughout our history, we have remained true to who we are as a high value added investment firm designed for talent to thrive in a thoughtful growth environment.
Eric Colson: Based on those first principles.
Eric Colson: We have built an investment platform that supports accelerates and amplifies investment talent.
Eric Colson: In order to invest differently generate compelling returns and build durable investment franchises.
Eric Colson: We combine autonomy entrepreneurs.
Eric Colson: And economic alignment with the depth and breadth of resources available to a global multi asset class investment manager with over $160 billion of assets under management.
Eric Colson: Each of our teams benefits from best of breed and customized support across people technology data execution and capital.
Eric Colson: All operations are designed for and responsive to investment team needs. Distribution includes business leaders dedicated to individual investment teams, and is designed to protect investment team time and optimize the overall multi channel global distribution app. firm leadership is independent, has no investment responsibilities, and is dedicated to making each investment franchise successful and sustainable. We believe our investment platform is a force multiplier and compounding machine. On our platform, differentiated thinkers build durable investment franchises that seek to compound capital for decades.
Eric Colson: All operations are designed for and responsive to investment team needs.
Eric Colson: Distribution includes business leaders dedicated to individual investment teams and is designed to protect the investment team time and optimize the overall multichannel global distribution effort.
Eric Colson: Firm leadership is independent has.
No investment responsibilities and is dedicated to making each investment franchise successful and sustainable.
Eric Colson: We believe our investment platform as a force multiplier and compounding machine.
Eric Colson: On our platform differentiated thinkers build durable investment franchises that seek to compound capital for decades.
Eric Colson: Slide two shows how our platform has expanded over time. In 2004, we had four investment teams managing seven relatively constrained public equity strategies. In 2014, after our IPO, we had six investment teams managing 13 public equity strategies and one newly launched fixed income strategy. Today, we have 11 investment teams managing 25 strategies spanning long only equities, long short equity, US high yield, long short credit, emerging market debt, global macro, and private assets. As Jason will discuss, we are firmly established in fixed income with two best-in-class investment franchises, and we are gaining more traction and alternatives every day.
Eric Colson: Slide two shows how our platform has expanded over time.
Eric Colson: In 2004, we had four investment teams managing seven relatively constrained public equity strategies.
Eric Colson: In 2014 after our IPO, we had six investment teams managing 13 public equity strategies and one newly launched fixed income strategy.
Eric Colson: Today, we have 11 investment teams managing twenty-five strategies spanning long only equities long short equity U S high yield long short credit emerging market debt global macro and private assets.
Eric Colson: As Jason will discuss we are firmly established in fixed income with two best in class investment franchises, and we are gaining more traction and alternatives everyday.
Eric Colson: As we have broadened our platform by geography, style, client base, and asset class, we have increased our avenues for growth. In 2024, 13 of our 25 investment strategies achieve net inflows for the year. Ten of our 25 strategies achieved net inflows in excess of $100 million, which included equities, fixed income, and alternatives, and spanned seven of our 11 investment With each additional investment team, we expand the capabilities of our investment platform, demonstrate the repeatability of our process, and increase the probability of success for existing teams and new talent.
Eric Colson: As we have broadened our platform by geography style client base and asset class, we have increased our avenues for growth.
Eric Colson: In 2020 for 13 of our 25 investment strategies achieved net inflows for the year.
Eric Colson: 10 of our 25 strategy has achieved net inflows in excess of $100 million.
Eric Colson: Which included equities fixed income and alternatives and spans seven of our 11 investment teams.
Eric Colson: With each additional investment team, we expand the capabilities of our investment platform demonstrate the repeat ability of our process and increase the probability of success for existing teams and new talent.
Jason Gottlieb: I will now turn it over to Jason to speak about our two credit-oriented franchises, the success of which demonstrates the power and repeatability of the Artisan Investment Platform. Thank you, Eric.
Eric Colson: I will now turn it over to Jason to speak about our two credit oriented franchises, the success of which demonstrates the power and repeat ability of being <unk>.
Jason Gottlieb: Artisan investment platform.
Eric Colson: Thank you Eric.
Jason Gottlieb: A little over 10 years ago, we had no history in fixed income investing, no one fixed income investment talent, and no fixed income investment operation. Today we have two exceptional credit oriented investment franchises. In 2024, the Denver-based credit team, led by Brian Krug, passed its 10th anniversary, raised $1.7 billion of net inflows, and now manages nearly $12 billion. The Boston-based M-Sites Capital Group, led by Mike Cerami and Mike O'Brien, raised $1.9 billion of net inflow and now manages nearly $3 billion. Collectively, the two teams raised $3.6 billion in 2024 and now manage nearly $15 billion in six different strategies, including two alternative strategies.
Eric Colson: A little over 10 years ago, we had no history in fixed income investing now in fixed income investment talent and no fixed income investment operations.
Eric Colson: We have two exceptional credit oriented investment franchises.
Speaker Change: In 2020 for the Denver based credit team led by Brian crude passed its 10th anniversary raise.
Speaker Change: Raised $1 7 billion of net inflows and now manages nearly $12 billion.
Speaker Change: The Boston based <unk> capital group led by Mike's Rami and Mike O'brien.
Speaker Change: One 9 billion of net inflow and now manages nearly $3 billion.
Speaker Change: Collectively the two teams raised $3 6 billion in 2024, and now manage nearly $15 billion in six different strategies, including two alternative strategies.
Jason Gottlieb: The successful business development is driven by exceptional investment performance for clients. Since inception and after fees, the high-income, emerging markets debt opportunities and emerging markets local opportunity strategies have generated 174, 720, and 241 basis points respectively of outperformance annually versus their benchmark. The absolute return oriented credit opportunities and global unconstrained strategies have generated average annual returns of 10.41% and 9.76%, respectively, since inception after fees.
Speaker Change: The successful business development is driven by exceptional investment performance for clients.
That's inception and after fees the high income emerging markets debt opportunities in emerging markets local opportunity strategies have generated 174, 720, 241 basis points, respectively of outperformance annually versus their benchmarks.
Speaker Change: The absolute return oriented credit opportunities global unconstrained strategies have generated average annual returns of $10 or 1% and 976% respectively.
Inception after fees.
Jason Gottlieb: The quality and uniqueness of these strategies is reflected in their weighted average effective fee rate. which was 67 basis points in 2024.
Speaker Change: The quality and uniqueness of these strategies is reflected in our weighted average effective fee rate.
Speaker Change: Which was 67 basis points in 2024 that includes nearly $12 million and performance fees earned in the fourth quarter, which CJ will further discuss.
Jason Gottlieb: That includes nearly $12 million in performance fees earned in the fourth quarter, which CJ will further discuss.
Jason Gottlieb: We are still early on our credit journey. As we have said in the earnings release, at Artisan, a decade is not that long, and three years is just the blink of an eye. When we partner with new talent, we focus on getting them up and running quickly and with high-quality support. We provide time and a distraction-free environment so that the investment team can put their time, energy, and focus into building a foundation of people and process and a track record of investing success.
Speaker Change: We are still early on our credit journey.
Speaker Change: As we have said in the earnings release at artisan a decade is not that long and.
And three years is just a blink of an eye.
Speaker Change: When we partner with new talent, we focus on getting them up and running quickly and with high quality support.
Speaker Change: We provide time and distraction free environment. So that the investment team can put their time energy and focus into building a foundation of people and process and a track record of investing success.
Jason Gottlieb: Only when the foundation is firmly in place do we begin to develop a business with greater commercial breadth. That is what we have been doing with the credit team over the last several years and what we are beginning to do with the M-Sites Capital Group.
Speaker Change: Only when the foundation is firmly in place do we begin to develop a business with greater commercial breadth.
Speaker Change: That is what we've been doing with the credit team over the last several years and what we are beginning to do with the M sites capital group.
Jason Gottlieb: We aim for durable success and long-term growth, the precise form of which is unpredictable at the time talent joins Artisan Partners. Slide four shows our execution of this deliberate process with the M-Sites Capital Group. We have long been on the hunt for talent in emerging markets debt. It's an asset class with a large opportunity set in which investment talent can differentiate. and Long-Term Asset Allocation Demand exists. We had spoken with numerous EM debt managers prior to meeting Mike Cerami and Mike O'Brien in early 2021. Once we met them, we embarked on a rigorous process of getting to know them, understanding their process and track records, educating them about Artisan Partners, and determining the appropriate terms and timing for them to join our platform.
Speaker Change: We aimed for durable success and long term growth the precise form of which is unpredictable at the time talent joins artisan.
Speaker Change: Slide four shows our execution of this deliberate process with the <unk> capital group.
Speaker Change: We had long been on the hunt for talent in emerging markets debt.
Speaker Change: It's an asset class with a large opportunity set in which investment talent can differentiate.
Speaker Change: And long term asset allocation demand exists we.
Speaker Change: We had spoken with numerous EM debt managers prior to meeting Mike's Rami and micro Brian in early 2021.
Speaker Change: Once we met them, we embarked on a rigorous process of getting to know them understanding their process and track records educating them about artisan partners and determining the appropriate terms and timing for them to join our platform.
Jason Gottlieb: They ultimately joined Artisan in September of 2021 and established the M-Sites Capital Group.
Speaker Change: They ultimately joined artisan in September of 2021, and establish the M sites capital group.
Jason Gottlieb: Once on board, it was imperative to minimize the time before they began managing capital and reestablish a track record. Seven months after they joined the firm, we launched Artisan Global Unconstrained, which has the ability to invest directly in over 89 markets, and since inception has invested in sovereign debt, corporate debt, loans, equities, options, currency forwards, and futures, commodity derivatives, CDS and CDX, interest rates, and repurchase agreements. A month later, we launched Artisan Emerging Market Debt Opportunity. And three months after that, we launched Artisan Emerging Markets Local Operations. Within a year from the leadership team joining Artisan, the M-Sites Capital Group comprised 13 individuals and was managing three strategies.
Once on board it was imperative to minimize the time before they began managing capital and re establish a track record.
Speaker Change: Seven months after they joined the firm, we launched artisan global unconstrained, which has the ability to invest directly in over 89 markets and since inception has invested in sovereign debt corporate debt loans equities options currency forwards and futures.
Speaker Change: Commodity derivatives Cvs in CTX.
Speaker Change: Interest rates and repurchase agreements.
Speaker Change: A month later, we launched artisan emerging market debt opportunities.
Speaker Change: And three months after that we launch artisan emerging markets local opportunities.
Speaker Change: Within a year from the leadership team joining artisan the M sites capital group comprised 13 individuals and with managing three strategies.
Jason Gottlieb: Mike and Mike built a team just the way they wanted. Working with them, we delivered a customized operating stack to support their process, their execution, and their analytics.
Speaker Change: Mike and Mike built the team just the way they wanted it.
Speaker Change: Working with them, we delivered a customized operating stack to support their process their execution and their analytics.
Jason Gottlieb: Simultaneously, we resource the team with a dedicated business leader with previous experience building a large emerging market step business. In the third quarter of 2023, we accepted large strategic mandates in each of the emerging markets local opportunities and global unconstrained strategies. We accepted similar large strategic mandates in the MDO and MLO strategies in the third and fourth quarter of 2024 respectively.
Simultaneously, we resource the team with a dedicated business leader with previous experience building, a large emerging markets that business.
In the third quarter of 2023, we accepted large strategic mandates in each of the emerging markets local opportunities in global unconstrained strategies.
Speaker Change: We accepted similar large strategic mandates in the endo and envelope strategies in the third and fourth quarter of 2024, respectively.
Jason Gottlieb: The team has a very firm foundation and is poised for further success. Each strategy will hit its third anniversary this year, which we believe will accelerate business development, especially in pooled vehicles.
Speaker Change: The team has a very firm foundation and is poised for further success.
Speaker Change: Each strategy will hit its third anniversary this year, which we believe will accelerate business development, especially in pooled vehicles.
Jason Gottlieb: More generally, I think the process we have undertaken over the past four years to build the M Sites Capital Group is a perfect example of the power of our investment platform. We found the right talent. We supported them for success. We focused on the investment performance. We structured distribution to work for the team and minimize distraction. We worked quickly and with high quality.
Speaker Change: More generally I think the process, we have undertaken over the past four years to build the M sites capital Group is a perfect example of the power of our investment platform.
Speaker Change: We found the right talent, we supported them for success, we focus on the investment performance, we structure distribution to work for the team and minimize distraction, we worked quickly and with high quality, we deliver results and we established the foundation for something that can be very powerful for a very long time.
Eric Colson: We delivered results and we established the foundation for something that can be very powerful for a very long time.
Eric Colson: Thank you, Jason. I want to expand upon your final point and broaden the lens. What we have accomplished with the M Sites Capital Group is what we have been accomplishing with investment talent repeatedly over a long period of time. Slide 5 shows AUM after 1, 2, and 3 years for the 5 investment teams we have established since our IPO in 2013. Within three years of joining our firm, each of these five teams reached a level of foundational capital. that allowed them to execute their investment strategy. build upon initial track records, and establish the economic foundation for long term franchise development.
Jason Gottlieb: Thank you Jason.
Speaker Change: Want to expand upon your final point and broaden the lens.
Speaker Change: What we have accomplished with the M sites capital group is what we have been accomplishing with investment talent repeatedly over a long period of time.
Speaker Change: Slide five shows AUM after one two and three years for the five investment teams, we have established since our IPO in 2013.
Speaker Change: Within three years of joining our firm.
Speaker Change: Each of these five teams reached a level of foundational capital.
Speaker Change: That allowed them to execute their investment strategy.
Speaker Change: Upon initial track records and establish the economic foundation for our long term franchise development.
Eric Colson: Capital for Talent to Manage is a critical component of our investment platform. we have proven our ability to deliver early foundational capital for new talent.
Speaker Change: Capital for talent to manage as a critical component of our investment platform.
Speaker Change: We have proven our ability to deliver early foundational capital for new talent.
Eric Colson: In 2025, we will celebrate another important milestone, the 10th anniversary of the Developing World Strategy. working closely with founding portfolio manager Lewis Kaufman. We have designed and communicated the Developing World Strategy as a highly differentiated means of accessing emerging markets demand opportunities via an enlarged opportunity set, including firms domiciled in developed markets. Since inception and after fees, the Developing World Strategy has generated a cumulative return of 157%, which is more than four times greater than the MSCI Emerging Markets Index. Lewis is an incredibly experienced, thoughtful and differentiated investor. He is truly one of a kind, which is reflected in his performance relative to the index.
Speaker Change: In 2025, we will celebrate another important milestone the 10th anniversary of the developing world strategy.
Speaker Change: Working closely with founding portfolio manager Lewis Kaufman.
Speaker Change: We have designed and communicated the developing world strategy is a highly differentiated means of accessing and emerging markets demand opportunities via an enlarged opportunity set including firms domiciled in developed markets.
Speaker Change: Since inception, and after fees the developing world strategy has generated a cumulative return of 157%, which is more than four times greater than the MSCI emerging markets index.
Louis: Louis is an incredibly experienced thoughtful and differentiated investor. He is truly one of a kind which is reflected in its performance relative to the index.
Eric Colson: As we celebrate the 10th anniversary, we are excited about the opportunity in front of Lewis and the developing world strategy, especially in the wealth marketplace, where investors are looking for differentiation and absolute return. Approximately $95 billion of our AUM is managed for intermediated wealth clients. We have broad and deep relationships across the space, it is growing, and there is demand for differentiated, absolute return oriented strategy. We have reoriented our distribution structure to better address the wealth and alternatives marketplace. And we believe there is tremendous opportunity to bring more of our investment platform to existing and new intermediated wealth clients, in addition to the traditional institutional.
Louis: As we celebrate the 10th anniversary we are excited about the opportunity in front of Lewis and the developing world strategy, especially in the wealth marketplace, where investors are looking for differentiation and absolute return.
Louis: Approximately 95 billion of our AUM is managed for intermediate and wealth clients.
Louis: We have broad and deep relationships across the space. It is growing and there is demand for differentiated absolute return oriented strategies.
We have reoriented, our distribution structure to better address the wealth and alternatives marketplace and.
Louis: And we believe there is tremendous opportunity to bring more of our investment platform to existing and new intermediate it wealth clients. In addition to the traditional institutional business.
Eric Colson: In 2025, we remain committed to building our investment platform, developing our existing franchises, adding new talent to the platform, and tapping into demand from investors around the world seeking high value added investment.
Louis: In 2025, we.
Louis: We remain committed to building our investment platform.
Louis: Developing our existing franchises, adding new talent to the platform and tapping into demand from investors around the world seeking high value added investments.
CJ Daley: I will now turn it over to CJ to discuss our most recent financial results.
Louis: I will now turn it over to C. J to discuss our most recent financial results.
CJ Daley: Thank you, Eric. An overview of financial results begins on slide 7. Fourth quarter results reflect the outcome of our quality business model, which drives durable growth and long term returns for clients and shareholders. Compared to the September quarter, revenues rose 6%, adjusted operating income was up 12%, and our adjusted operating margin improved by 180 basis. More specifically, assets under management ended the December quarter at 161 billion, down 4% from last quarter and up 7% from the end of 2023. Net client cash outflows during the December quarter were approximately $800 million and included an outflow from a client rebalance on a $1.1 billion sub-advised mandate.
Louis: Thank you Eric and overview.
Our financial results begins on slide seven.
Louis: Fourth quarter results reflect the outcome of our quality business model, which drives durable growth and long term returns for clients and shareholders.
Louis: Compared to the September quarter revenues Rose, 6% adjusted operating income was up 12% and our adjusted operating margin improved by 180 basis points.
More specifically.
Louis: Its under management ended the December quarter at 161 billion down 4% from last quarter and up 7% from the end of 2023.
Louis: Net client cash outflows during the December quarter were approximately $800 million and included an outflow from a client rebalanced on a $1 1 billion sub advised mandate.
CJ Daley: Full year net client cash outflows improved slightly to $3.7 billion. Fourth quarter and full year 2024 represent the 10th consecutive quarter and 11th consecutive year of positive flows for our fixed income business. Average AUM for the quarter was up 2% sequentially and up 18% compared to the December 2023 quarter, while full year average AUM improved 15%. In the fourth quarter, the Equity Artisan Funds completed their annual income and capital gain distribution. The amount of distributions not reinvested in the artisans funds totaled $795 million for the quarter and $1.2 billion for the full year. This amount is presented separately from client cash outflows.
Louis: Full year net client cash outflows improved slightly to $3 7 billion.
Louis: Fourth quarter and full year 2024 represents the 10th consecutive quarter and 11th consecutive year of positive flows for our fixed income business.
Louis: Average AUM for the quarter was up 2% sequentially and up 18% compared to the December 2023 quarter, while full year average AUM improved 15%.
Louis: In the fourth quarter, the equity artisan funds completed their annual income and capital gain distributions the amount of distributions not reinvested in the artisans funds totaled $795 million for the quarter and $1 2 billion for the full year.
Louis: This amount is presented separately from client cash outflows.
CJ Daley: Our complete gap and adjusted results are presented in our earnings release. Revenues for the quarter increased 6% compared to the September 2024 quarter and up 19% compared to the prior year fourth quarter. The December 2024 quarter reflects approximately 17 million of performance fees from seven different strategies. Included in that amount is a $2.4 million performance fee earned on a consolidated investment product, which is reflected in non-operating income as required by accounting rules. As of the end of 2024, approximately 3% of our EOM is subject to performance fees, and the majority of those arrangements are annual fees with measurement dates at the end of December.
Our complete GAAP and adjusted results are presented in our earnings release Rev.
Louis: Revenues for the quarter increased 6% compared to the September 2024 quarter and up 19% compared to the prior year fourth quarter.
Louis: The December 2024 quarter reflects approximately $17 million of performance fees from seven different strategies.
Louis: Included in that amount is a $2 $4 million performance fee earned on a consolidated investment products, which is reflected in non operating income as required by accounting rules.
Louis: As of the end of 2020 for approximately 3% of our AUM is subject to performance fees and the majority of those arrangements or annual fees with measurement dates at the end of December.
CJ Daley: Our weighted average recurring fee rate for the quarter, excluding performance fees, was 68 basis. reflecting the growing portion of our AUM and lower fee fixed income strategy. Inclusive of performance fees, our weightage average fee rate for the fourth quarter was 72 basis. Adjusted operating expenses for the quarter were up 3% from the third quarter of 2024 and 11% for the same quarter last year, primarily from higher incentive compensation expense due to increased revenue. Adjusted operating income increased 12% sequentially and 37% compared to the same quarter last year. As a result of revenue growth, outpacing increases in operating expenses.
Louis: Yeah.
Louis: Our weighted average recurring fee rate for the quarter, excluding performance fees was 68 basis points, reflecting the growing growing portion of our AUM, a lower fee fixed income strategies.
Louis: Inclusive of our performance fees are weighted you ever fee rate for the fourth quarter was 72 basis points.
Louis: Adjusted operating expenses for the quarter were up 3% from the third quarter of 2024, and 11% for the same quarter last year, primarily from higher incentive compensation expense due to increased revenues.
Louis: Adjusted operating income increased 12% sequentially and 37% compared to the same quarter last year as a result of revenue growth outpacing increases in operating expenses.
CJ Daley: Adjusted net income for adjusted share improved 14% compared to last quarter and 35% compared to December 2023 quarter. Full year 2024 revenues were up 14% compared to 2023 on higher average AUM. Adjusted operating expenses increased 10% from 2023, primarily from higher incentive compensation on elevated revenue. Also contributing to the increase in compensation and benefits was higher fixed compensation expenses from an increase in the number of full-time associates and annual base salary merit increases. Additionally, amortization of long-term incentive compensation expense increased primarily from the $6 million impact of the Retirement Acceleration Clause discussed during the first quarter 2024 call and the net increase from the impact of the addition of the January 2024 Long-Term Incentive Award Grant.
Louis: Adjusted net income per adjusted share improved 14% compared to last quarter and 35% compared to the December 2023 quarter.
Louis: Full year 2024 revenues were up 14% compared to 2023 on higher average AUM.
Louis: Adjusted operating expenses increased 10% from 2023, primarily from higher incentive compensation on elevated revenues.
Louis: Also contributing to the increase in compensation and benefits was higher fixed compensation expenses from an increase in the number of full time associates and annual base salary Merit increases.
Louis: Additionally, amortization of long term incentive compensation expense increased primarily from the $6 million impact of the retirement acceleration clause discussed during the first quarter 2024 call and the net increase from the impact of the addition of the January 2024 long term incentive award grants.
CJ Daley: Higher revenues in 2024 led to a 22% improvement in adjusted operating income and a 23% improvement in adjusted net income per adjusted share over 2023.
Louis: Higher revenues in 2024 led to a 22% improvement in adjusted operating income and a 23% improvement in adjusted net income per adjusted share over 2023.
CJ Daley: In calculating our non-GAAP measures, non-operating income includes only interest expense and interest income. Although valuation changes on our seed investments impact shareholder economics, we fully exclude these valuation changes from our adjusted results to provide transparency into our core business operations.
Louis: In calculating our non-GAAP measures nonoperating income includes all the interest expense and interest income.
Louis: Although valuation changes on our seed investments impact shareholder economics, we fully exclude these valuation changes from our adjusted results to provide transparency into our core business operations.
CJ Daley: Turning to slide 11 our balance sheet remains strong. We currently have $155 million of seed capital in our investment products with significant capacity. As strategies reach scale and our seed investments are redeemed, any gains realized are included in the cash available for corporate purposes, seed investment, or as an addition to our year-end special dividend. In addition, her $100 million Revolving Credit Facility remains unused. 60 million of our senior notes will mature in August 2025. We currently expect to refinance the monetary amounts of new series of long-term senior notes. We continue to return capital to shareholders on a consistent and predictable basis through quarterly cash dividend payments and a year-end special dividend.
Louis: Turning to slide 11, our balance sheet remained strong we currently have $155 million of seed capital in our investment products with significant capacity.
Louis: Our strategies reached scale and our seed investments are redeemed any gains realized are included in the cash available for corporate purposes seed investment or as an addition to our year end special dividend.
Louis: In addition, our $100 million revolving credit facility remains unused <unk>.
Louis: $60 million of our senior notes will mature in August 2025 weaker.
Louis: We currently expect to refinancing maturing amounts of new series of long term senior notes.
Louis: We continue to return capital to shareholders on a consistent and predictable basis through quarterly cash dividend payments and a year end special dividend.
CJ Daley: Consistent with our dividend policy, our Board of Directors declared a quarterly dividend of $0.84 per share with respect to the December 2024 quarter and an additional $0.50 for the year-end special dividend. Dividends declared with respect to 2024 cash generated total $3.48 per share, an increase of 25% from the dividends declared with respect to 2023 cash generated. The Special Dividend declared with respect to 2024 was 47% larger than the previous year-end Special Dividend as a result of higher earnings and realized gains on seed capital redemption. Dividends declared with respect to 2024 represent an 8% dividend yield calculated based on the closing price of APAM common stock for December 31, 2024.
Louis: Consistent with our dividend policy, our board of directors declared a quarterly dividend of <unk> 84 per share with respect to the December 2024 quarter and an additional 50 for the year end special dividend.
Louis: Dividends declared with respect to 2024 cash generated totaled $3 48 per share an increase of 25% from the dividends declared with respect to 2023 cash generation.
Louis: The special dividend declared with respect to 2024 was 47% larger than the previous year end special dividend as a result of higher earnings and realized gains on seed capital redemptions.
Louis: Dividends declared with respect to 2024, representing an 8% dividend yield calculated based on the closing price of <unk> common stock on December 31, 2024.
CJ Daley: Consistent with prior years, a portion of cash available for the special dividend has been retained for future growth initiatives. Looking ahead to 2025, our board approved the 2025 Annual Long-Term Incentive Award of approximately $66 million, consisting of $47 million of cash-based franchise capital awards and $19 million of restricted stock awards. Approximately 85% of the awards are awarded to our investment talent. Generally, 50% of the award vests pro rata over five years, and the remaining 50% vests on or 18 months after a qualified retirement. We expect long term incentive amortization to be approximately 75 million for 2025, excluding the mark to market impact.
Louis: Consistent with prior years, a portion of cash available for the special dividend has been retained for future growth initiatives.
Louis: Looking ahead to 2025, our board approved a 2025 annual long term incentive award of approximately $66 million consisting of $47 million of cash based franchise capital awards and $19 million of restricted stock Awards.
Louis: Approximately 85% of the awards are awarded to our investment talent.
Louis: Generally 50% of the award vest pro rata over five years, and the remaining 50% verse or 18 months after a qualified retirement.
Louis: We expect long term incentive amortization to be approximately $75 million for 2025, excluding the mark to market impact.
CJ Daley: Excluding long-term incentive compensation, fixed expenses are expected to increase mid-to-low single digits in 2025. The majority of the increase reflects 2025 merit increases and the absorption of a full year of expense for full-time employees hired in 2024. As a reminder, our compensation and benefits expenses are generally higher in the first quarter of each year due to seasonal expenses. We estimate those seasonal expenses will be approximately $6 million higher in the first quarter of 2025 compared to the fourth quarter of 2024.
Louis: Excluding long term incentive compensation fixed expenses are expected to increase mid to low single digits in 2025 the.
Louis: The majority of the increase reflects 2025 merit increases and the absorption of a full year of expense for full time employees hired in 2024.
Louis: As a reminder, our compensation and benefits expenses are generally higher in the first quarter of each year due to seasonal expenses.
Louis: We estimate those seasonal expenses will be approximately $6 million higher than the first quarter of 2025 compared to the fourth quarter of 2024.
Unknown Executive: That concludes my preliminary remarks and I will now turn the call back to the Ladies and gentlemen, at this time, we will begin the question and answer session. To ask a question, you may press star and then one on a touchtone telephone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. We do ask that you please limit yourselves to two questions. To withdraw your question, you may press star and two. Once again, it is star and then one to join the question.
Louis: That concludes my prepared remarks, and I will now turn the call back to the operator.
Louis: Ladies and gentlemen at this time, we will begin the question and answer session.
Speaker Change: To ask a question you May press Star and then one on a touchtone telephone.
Speaker Change: If you are using a speaker phone, we do ask that you. Please pickup your handset prior to pressing the keys to ensure the best sound quality.
Speaker Change: We do ask you please limit yourselves to two questions.
Speaker Change: To withdraw your question you May press Star and <unk>.
Speaker Change: Once again it is star and then one.
Speaker Change: And the question queue.
Unknown Executive: We'll pause momentarily to assemble the roster.
Speaker Change: We will pause momentarily to assemble the roster.
Bill Katz: And our first question today. comes from. Bill Katz from TD Cowen. Please go ahead with your question.
Speaker Change: And our first question today.
Speaker Change: It comes from Bill Katz from TD Cowen. Please go ahead with your question.
Bill Katz: Great, thank you very much. I appreciate the commentary and the opportunity to ask a question. Just thinking through the interplay between what seems to be a bit of a pickup in the organic growth rate versus the fee rate, and sort of wondering if this might be just some of the initial capital you've taken on the fixed income platform more broadly.
Bill Katz: Great. Thank you very much I appreciate the commentary you're up to ask a question just thinking through the interplay between the what seems to be a bit of a pickup in the organic growth rate versus the fee rate.
Bill Katz: And just sort of wondering if this might be just some of the initial cap you've taken on this on the fixed income platform more broadly can you sort of speak to the extent you can continue to grow out the credit platform and the insight M sites team excuse me how that might play through on the sub advisory fee rate, which seems to have gone down rather dramatically and then sort of relatedly.
Bill Katz: Can you sort of speak to the extent you can continue to grow out the credit platform and the EM sites team, how that might play through on the sub-advisory fee rate, which seems to have gone down rather dramatically. And then sort of relatedly, just sort of wondering as you look at the rest of the business, with particular emphasis on the International Value Fund, which is doing very well, that's now roughly 25% of the platform.
Bill Katz: Just sort of wondering as you look at the rest of the business with particular emphasis on the international value Fund, which is doing very well. That's now roughly 25% of the platform. Just wondering where you are in terms of risk management of our capacity in terms of continuing to grow that platform. Thank you.
Eric Colson: Just wondering where you are in terms of risk management of capacity in terms of continuing to grow that platform. Thank you.
Bill Katz: Okay.
Eric Colson: Hey Bill, it's Eric Colson. Thanks for the question. I'll kind of take it in reverse order. The international value strategy is... You know, hit a similar spot where we've seen in the early years of international equity or our growth platform or value platform over 30 years, we've seen various teams build up and we've had to manage the capacity given our values at the firm heavily way performance. And we believe by weighing more on performance and betting on performance, we create a longer term business. What we've seen in many of our competitors that have become an asset gathering business have focused on maximizing the dollars they can bring in in a given year.
Bill Katz: Hey, Bill, it's Eric Colson, Thanks for the questions.
Kind of taking a reverse order of the international value strategy is.
Bill Katz: Hey, that's similar spot where we've seen in the early years of international equity or.
Bill Katz: Our growth platform or a value platform over 30 years, we've seen various teams.
Bill Katz: [noise] buildup and we've had to manage the capacity given our values at the firm heavily weigh performance and we believe by Wayne more.
Bill Katz: On performance embedding nonperformance, we create a longer term business.
Bill Katz: What we've seen in many of our competitors that have become an asset gathering business have focused on maximizing the dollars. They can bring it in a given year.
Eric Colson: We clearly are in capacity management with a few of our strategies. What that means to us is that we're always looking at the velocity of assets. We're looking at the mix of assets and we're looking at the total asset capacity. We will manage the international value with a forward lean, but really not let the assets get out of control so that we don't hurt the performance track record. And that's been fairly consistent. And it's, it's worked out very well for us over the 30 years.
Bill Katz: We clearly are in capacity management with a few of our strategies.
Bill Katz: What that means to us is that we're always looking at the velocity of assets. We're looking at the mix of assets and we're looking at the total asset.
Bill Katz: Capacity.
Bill Katz: We will manage international value with a forward lean, but really not let the assets get out of control so that we don't.
Bill Katz: The.
Bill Katz: The performance track record and Thats been fairly consistent and it's.
Bill Katz: It's worked out very well for us over the 30 years.
Eric Colson: With regards to the organic growth and fee rate, you clearly saw a build up over the last year, specifically in a little bit in the 4th quarter of what we call foundational assets. I think you use the term sub advisory. These are foundational assets that are have been a little larger than past teams given the emerging market debt. And the global unconstrained strategies both have taken on are all 3 strategies have taken on foundational assets. And some of these have had performance based fees. And so it's brought down the fee rate a bit more as opposed to the clear mix of fixed income.
Bill Katz: With regards to the organic growth in fee rate you clearly saw a buildup over the last year, specifically in a little bit in the fourth quarter of what we call foundational assets.
Speaker Change: I think you used the term sub advisory.
Bill Katz: These are foundational assets that are.
Speaker Change: There have been a little larger than past teams.
Bill Katz: Given the emerging market debt.
Bill Katz: And the global unconstrained strategies.
Bill Katz: Both have taken on our all three strategies have taken on our foundational assets and some of these have had performance based fees and so it has brought down the fee rate a bit more.
Bill Katz: As opposed to the clear mix of.
Eric Colson: As you can see in the fixed income fee rate, it would be slightly if we grew fixed income. Enormously, it bring down the rate slightly that the tech you saw was the foundational asset over the last couple of quarters. Okay, that was my suspicion.
Bill Katz: Fixed income as you can see in the fixed income fee rate.
Bill Katz: It would be slightly if we grew fixed income enormously it would bring down the rate slightly.
Bill Katz: The tick you saw was the foundational asset.
Bill Katz: Over the last couple of quarters.
Speaker Change: Okay that was my suspicion and then maybe one for C J and thanks for taking the questions.
Bill Katz: Then maybe one for CJ. And thanks for taking the questions. The payout rate this year was much higher on the dividend. I think it sounds like it was a realization of some gains on seed capital.
Speaker Change: The payout rate this year was much higher on the dividend I think it sounds like its realization of some gains on seed capital. So maybe two part question where are you in terms of any kind of wondering in terms of seed capital needs versus maybe repatriating that and then secondarily, how we should be thinking about payout rate for 2025. Thank you.
CJ Daley: So maybe two part question, where are you in terms of any kind of, where are you in terms of seed capital needs versus maybe repatriating that? And then secondary, how we should be thinking about payout rate for 2025?
CJ Daley: Thank you. Sure.
CJ Daley: Thanks for the question, Bill. So the payout ratio, slight uptick. I think you hit the point. We did realize some gains on seed capital investments that we redeemed during the year. I think there will be, we expect to see some more of that in 2025 with respect to our private fund credit opportunities, which we've had seed in there for the last 10 years or seven years. And then the rest of the seed capital is majority of it's in M sites, which is, as Eric said, still in the foundational phase.
Speaker Change: Sure.
Speaker Change: Thanks for the question Bill so the payout ratio slight uptick I think you are.
Speaker Change: Okay.
Speaker Change: Hit the point, we did realize some.
Speaker Change: Some gains on seed capital investments that we redeemed during the year I think there will be we expect to see some more of that in 2025.
Speaker Change: With respect to our.
Speaker Change: Our private fund credit opportunities.
Speaker Change: Which we've had seed in there for the last.
Speaker Change: 10 years.
So our seven years.
Speaker Change: And then the rest of the seed capital is majority of its an M sites, which is as Eric said still in the foundational phase so.
CJ Daley: So, at some point that'll be harvested, but no clear timeframe on that. with respect to the payout ratio. I mean, we've been, you know, we've been in the mid 90s. For the last three years, we've held back some cash to fund seed capital needs. We did that again this year. But I would think you would see something similar in the mid 90% range on the payout ratio with respect to, you know, calculating that on adjusted EPS.
Speaker Change: At some point that will be harvested but.
Speaker Change: No clearer timeframe on that.
Speaker Change: With respect to the payout ratio I mean, we've been we've been in the mid nineties.
Speaker Change: Three years, we've held back some cash to fund seed capital needs. While we did that again this year, but I would think you would see something similar in the mid 90% range on the payout ratio with respect to.
Speaker Change: Calculating that on adjusted EPS.
Alex Blostein: Thank you. Our next question comes from Alex Blostein from Goldman Sachs. Please go ahead with your question.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Alex <unk> from Goldman Sachs. Please go ahead with your question.
Alex Blostein: Hey, Eric, good morning. Good afternoon, everybody. Thanks for the question as well. A little bit of a bigger picture question for you guys for global and international emerging markets, equity strategies broadly. We've clearly seen lots of volatility in those markets relative to US markets for some time. Political uncertainty continues to be significant. So curious how you're seeing the end customer, the end market respond to that with respect to either institutional interest in the non-US businesses picking up, staying the same or diminishing, as well as anything on the retail side that you're noticing on the ground that could pivot the appetite for these strategies.
Speaker Change: Hey, Eric Good morning, Good afternoon, everybody. Thanks for the question as well.
Speaker Change: Little bit of a bigger picture question for you guys for global and international emerging markets equity strategies broadly, we've clearly seen lots of volatility in those markets relative to U S markets for some time.
Speaker Change: Political uncertainty continues to be significant so curious how you're seeing the end customer the end market respond to that with respect to either institutional interest in the non U S business is picking up staying the same or diminishing as.
Speaker Change: As well as anything on the retail side they use noticing on the grant on the ground.
Speaker Change: That could pivot the appetite for the strategies and if things do turn and there is more appetite, which products are sort of most best positioned from a capacity perspective to do can take in new assets. Thanks.
Alex Blostein: And if things do turn and there's more appetite, which products are sort of most best positioned from a capacity perspective to take in new assets? Thanks.
Eric Colson: Hey, Alex, it's Eric. I'll give it a start. And probably Jason will jump in a bit too.
Speaker Change: Hey, Alex it's Eric I'll give it a start in private Jason will jump in a bit too but.
Speaker Change: Yes, just another big picture at that time of year, where people roll into.
Eric Colson: But it's just not a big picture. It's that it's that time of the year where people roll into looking at capital market forecasts, revisiting asset allocation. I think the direction there has been Transcripts provided by Transcription Outsourcing, LLC.
Speaker Change: Looking at capital market forecast, revisiting and asset allocation.
Speaker Change: I think the direction there has been.
Speaker Change: Really an eye on inflation and a lot of the volatility in the global macro markets.
Speaker Change: I think the output we have been seeing from clients is.
Speaker Change: A bit of a hesitation, though given the.
Jason Gottlieb: The macro environment and and honestly what's what's going on with the tariff news and inflation and the Fed I I don't think we are going to see as much tactical movement as we thought I think it'll be more strategic in nature I think people are a little frozen on which direction things are going to go Given all the news in the marketplace, so we're expecting some, you know, moderate Strategic moves in asset allocation, but not wholesale changes that some people talk about of big moves this year I think if there's if we start getting a clearer picture of The the direction of some policies and regulation and where the markets are digesting the news You might see some shifts, but we're we're expecting just some modest changes that in the marketplace When we looked at our product mix The only the only thing I would add, Alex, it's Jason Gottlieb, is we've seen continued progress and stability in the alpha profile of a number of those strategies.
Speaker Change: The macro environment and honestly, what's what's going on with the tariff news and inflation in the fed.
I don't think we are going to see as much tactical movement as we thought I think it will be more strategic in nature. I think people are a little frozen on which direction things are going to go.
Speaker Change: Given all the news in the marketplace. So we're expecting some moderate strategic moves and asset allocation, but not wholesale changes that some people talk about of big moves this year.
Speaker Change: I think if there is if we start getting a.
Speaker Change: A clearer picture of.
Speaker Change: The direction of some policies and regulation and where the markets are digesting. The news you might see some shifts, but we're expecting just some modest changes in the marketplace.
Speaker Change: When we looked at our product mix.
Speaker Change: Yeah, the only the only thing I would add Alex it's Jason Gottlieb.
Speaker Change: As we've seen continued progress and stability in the alpha profile of a number of those strategies and it tends to make sense to us.
Jason Gottlieb: And, you know, it tends to make sense to us the, the uncertainty drives volatility in those markets and volatility is basically the gas and inactive managers tank. And our team's ability to capture that volatility has proven out pretty nicely across the platform. We're seeing it in the global equity team, the international value team, global value, sustainable emerging markets, developing world. So we feel like we're really well positioned in that regard for what is an active management opportunity set. I think it's really just more a question of, you know, when that tide turns, we'll certainly be very well positioned.
Speaker Change: The uncertainty drives volatility in those markets and volatility is basically the gas and enacted managers tank.
Speaker Change: And our team's ability to capture that that volatility.
<unk> proven out pretty nicely across the platform, we're seeing it in the global equity team the international value team globally.
Speaker Change: Global value sustainable emerging markets developing world. So we feel like we're really well positioned in that regard for what.
It is an active management opportunity set.
Speaker Change: It's just I think it's really just more a question of when when that tide turns.
Speaker Change: We'll be we'll certainly be very well positioned for it.
Alex Blostein: Great. Yeah, no, that that all makes sense.
Speaker Change: Great.
Speaker Change: That all makes sense.
Alex Blostein: I see you want for you. I heard the comments around compensation and the guidance for 25.
Speaker Change: See you on for you I heard the comments around compensation and the guidance for 25.
CJ Daley: Sorry, if I missed any color on non comp as well, if we can run through your expectations for expense growth and those buckets, you know, in total, as well, by by by line, if you if you Yeah, sure. So, you know, if you were to assume flat markets, I mean, I would expect expenses to be up low single digits, you know, a couple percent. If you were to, you know, really focus in on fixed, controllable, given the variable nature of our P&L, obviously, revenues are going to dictate variable expenses. But, you know, on the fixed side, I mean, you're really looking at probably mid-single digits.
Speaker Change: Sorry, if I missed any color on non comp as well if we can run through your expectations for expense growth in those buckets.
Speaker Change: Total and as well as by byproduct line, if you're if you have that.
Speaker Change: Yes sure.
So if you were to assume flat markets I mean, I would expect.
Speaker Change: <unk> expenses to be up low single digits a couple percent.
Speaker Change: If you were to.
Speaker Change: Really focus in on when fixed controllable given our the variable nature of our P&L obviously.
Speaker Change: Revenues are going to dictate variable expenses, but.
Speaker Change: On the fixed side I mean, you're really looking at probably mid single digits I would say two thirds about it of it is the long term incentive comp, which we highlighted.
CJ Daley: I'd say two-thirds of it is the long-term incentive comp, which we highlighted in the prepared remarks. And then we have some some increases in salary and benefits, primarily, you know, some muted new roles over over last year, and then merit increases and, and the full impact of new hires, then new hires of about 10 or 11 folks last year in 2025. The rest of the buckets are relatively flat per our projection.
Speaker Change: In the prepared remarks, and then we.
Speaker Change: We have some some increases in salary and benefits primarily.
Speaker Change: Some muted new roles.
Speaker Change: <unk>.
Speaker Change: Over over.
Speaker Change: Last year, and then merit increases and the full impact of new hires and new hires of about 10 or 11 folks last year in 2025.
Speaker Change: The rest of the buckets are relatively flat.
Speaker Change: Per our prior projections.
CJ Daley: Okay, great.
John Dunn: Thank you. Our next question comes from John Dunn from Evercore ISI. Please go ahead with your question. Hey, thank you. You guys talked about two EM sites, M sites strategies hitting three year track records.
Speaker Change: Okay, great. Thank you.
Speaker Change: Our next.
Speaker Change: Comes from John Dunn from Evercore ISI. Please go ahead with your question.
Speaker Change: Hey, Thank you.
Speaker Change: You guys talked about too.
Speaker Change: <unk> sites and sites.
Speaker Change: Strategy is hitting three year track records can you remind us maybe any other strategies getting two significant milestones in 'twenty five.
John Dunn: Can you remind us maybe any other strategies getting to significant milestones in 25? International Explorer is I think it's March. of this year. They're going to be hitting their Their three year milestone, that is, that's the smaller cap strategy that's sitting in the international value franchise. And you know that is That's clearly going to, I think, springboard them into greater opportunities. Their alpha profile is exceptional. Their absolute return profile is quite compelling. As we had mentioned in our earnings commentary, the Developing World Fund is going to be hitting its 10-year anniversary, and, you know, by all accounts, most relevant time periods look extremely compelling, and certainly the short-term numbers that Lewis and the Developing World team have been able to produce have been, you know, catching a lot of attention and a lot of forward lean in the emerging market space as well.
Speaker Change: Yes.
Speaker Change: International Explorer is.
Speaker Change: I think it's March.
Speaker Change: This year, they're going to be hitting there.
Speaker Change: Our three year milestone that is.
Speaker Change: The.
Speaker Change: The smaller cap strategies.
Sitting in the international value franchise.
Speaker Change: And that is.
Speaker Change: That's clearly going to I think springboard them into greater opportunities. There alpha profile is exceptional their absolute return profile is quite compelling as we had mentioned.
Speaker Change: In our earnings commentary the developing World fund is going to be hitting its 10 year anniversary and by all accounts most relevant time periods look extremely compelling.
Speaker Change: Certainly the short term.
Speaker Change: Or is that Louis in the developing world team has been able to produce have been.
Speaker Change: Catching a lot of attention.
Speaker Change: And a lot of forward lean in.
Speaker Change: The emerging market space as well.
Speaker Change: Okay.
Speaker Change: Okay.
John Dunn: Got it.
John Dunn: And then, you know, at your investor day, you guys had talked about not needing to be first movers to do anything in like private markets, alts. You know, now that we're a little further away from that, any kind of perspectives, observations, learnings, you know, updated about going down that direction at some point?
Speaker Change: Got it and then.
Speaker Change: At your Investor Day, you guys had.
Speaker Change: <unk> talked about not needing to be first movers to do anything in private markets.
Speaker Change:
Speaker Change: Ooh further away from that any kind of perspective his observations learnings.
Speaker Change: Right.
Speaker Change: Updated about going down that direction at some point.
Jason Gottlieb: Yeah, I'll take that.
Speaker Change: Yeah.
Jason Gottlieb: This is Jason again. Ultimately, we're going to be measured by the opportunities we bring to the platform. That being said, behind the scenes, Eric and I have been methodically building out the investment strategy group. I think if you were there, you saw the co-heads of investment strategy, which are led by Keegan O'Brien and Chris Nicolau, talking about the platform and what we're developing. Together with Eric and I, we're evaluating more opportunities than we ever have. Our bias has been towards alts, but we have an open door policy. We're looking at anything and everything. We learned a lot by doing that.
Jason Gottlieb: I'll take that this is Jason again.
Jason Gottlieb: Ultimately, we're going to be measured by the opportunities we bring to the platform that.
Speaker Change: That being said behind the scenes, Eric and I have been methodically building out the investment strategy group I think if you were there you saw the co head of investment strategy, which are led by Keegan O'brien and Chris nickel Ow.
Jason Gottlieb: Talking about the platform what we're developing.
Jason Gottlieb: Together with Eric and I were evaluating more opportunities than we ever have.
Jason Gottlieb: Our bias has been towards <unk>, but we have an open door policy, we're looking at anything and everything we learned a lot by doing that.
Jason Gottlieb: As I had mentioned last quarter, we're looking primarily in the real estate credit and equity across privates, but also credit more broadly. There's still plenty of opportunity for us. Talent is looking for a new home everywhere and anywhere. Lift out and acquisition format still remains quite strong. Our goal will continue to remain focused on talent and partnering with the right individuals. We do have later stage opportunities we're working through, but as I said last quarter, until the team or individual has joined, uncertainty remains extremely high. I think it's important to point out that there's several of our current franchises that have embraced degrees of freedom, and we continue to work across the platform to develop new capabilities that intersect with the team's passion, asset allocation, and commercial application.
Jason Gottlieb: And as I had mentioned last quarter, we're looking primarily in the real estate credit and equity across private but also credit more broadly.
Jason Gottlieb: There is still plenty of opportunity for us.
Jason Gottlieb: Talent is looking for a new home everywhere and anywhere.
Jason Gottlieb: Lift out an acquisition format still remains quite strong.
Jason Gottlieb: <unk> will continue to remain focused on talent and partnering with the right individuals. We do have a later stage opportunities, we're working through but as I said last quarter until the team or individual has joined uncertainty remains extremely high.
Speaker Change: I think it's important to point out that there are several of our current franchises that have embraced degrees of freedom and we continue to work across the platform to develop new capabilities that intersect with the team's passion asset allocation and commercial application look no further than the international value team and the launch of global special situations, which we expect.
Jason Gottlieb: Look no further than the International Value Team and the launch of Global Special Situations, which we expect to be in fun format in late Q1 of this year. We believe that Artisan in general is a highly attractive home and that we provide an autonomous and distraction-free investment environment. It's Aligned Economics and it's a platform that is built to build a business. So we're going to be patient. We're going to swing at pitches that we think are akin to success for our platform, but we do have plenty of opportunities where we can grow and expand.
Jason Gottlieb: B in fund format in late Q Q1 of this year.
Jason Gottlieb: We believe that artisan in general is a highly attractive home and that we provided autonomous and distraction free investment environment.
Jason Gottlieb: It's aligned economics, and it's a platform that is built to build a business.
Jason Gottlieb: So we're going to be patient, we're going to we're going to swing at pitches that we think are.
Jason Gottlieb: <unk> two.
Jason Gottlieb: Success for our platform, but we do have plenty of opportunities, where we can we can grow and expand.
Jason Gottlieb: Thank you.
Jason Gottlieb: Thank you.
Unknown Executive: And ladies and gentlemen, with that, we will be ending today's question and answer session, as well as today's presentation and conference call. We do thank you for attending. You may now disconnect your line.
Jason Gottlieb: And ladies and gentlemen, with that we will be ending today's question and answer session as well as todays presentation and conference call.
Jason Gottlieb: We do thank you for attending you may now disconnect your lines.
Jason Gottlieb: Okay.
[music].