Q1 2025 Artisan Partners Asset Management Inc Earnings Call
Good day and welcome to the artisan partners asset management business update and first quarter earnings call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on a touchtone phone to withdraw your question. Please press Star then two please.
Please note that this event is being recorded.
I would now like to turn the conference over to Brendan Hughes head of Investor Relations. Please go ahead welcome to the artisan partners asset management business update and earnings call. Today's call will include remarks from Eric Colson, CEO, Jason Gottlieb President and C. J Daley CFO. Following these remarks, we will open the line for quest.
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.
All of these statements following the presentation.
In addition, some of our remarks today will include references to non-GAAP financial measures you can find reconciliations of these measures to the most comparable GAAP measures in the earnings release, and the supplemental materials, which can be found on our investor Relations website.
Also please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any artisan investment product or a recommendation for any investment service.
Eric Colson: I will now turn it over to Eric.
Eric Colson: Thank you for joining the call or reading the transcript we value your time.
Speaker Change: <unk> partners is built for the uncertainty and volatility of markets. Our investment teams have the autonomy experience and degrees of freedom to execute through these periods.
Speaker Change: The ability to use cash geography market cap and an array of instruments to take and manage risk and.
Speaker Change: And the judgment discipline and patience to remain true to their investment philosophies and client expectations.
Speaker Change: Historically, our investment teams have taken advantage of uncertainty and volatility to add value for clients.
Speaker Change: We believe the same will be true this time around.
Speaker Change: Our business model as a source of stability for our people our clients and our shareholders. The.
Speaker Change: The majority of our expenses, including compensation adjust automatically with changes in our AUM.
Speaker Change: Allowing us to remain focused on executing for our clients and thoughtfully growing our business.
Speaker Change: In that regard volatility creates opportunity for us in the broader marketplace as asset allocators seek establish and trusted managers and investment talent seeks a stable long term home.
Speaker Change: For artisan disruption truly creates opportunity.
Speaker Change: Since 2013, we've expanded from five investment teams to 11th.
Speaker Change: We have increased the number of investment strategies, we offer from 12 to 27.
Speaker Change: We have evolved from a long only public equity manager to a multi asset class investment platform we.
Speaker Change: Now have two fixed income teams.
Speaker Change: For fixed income strategies.
Speaker Change: Six alternative strategies.
Speaker Change: And we have reoriented, our firm to align with demand from both the traditional institutional channel and the private wealth market. This.
Speaker Change: This includes realigning our distribution structure and team and evolving from a bought not sold mentality to a sales culture.
Speaker Change: Today, approximately 60% of our AUM is managed on behalf of what we consider intermediate and wealth clients.
Speaker Change: Through all this change we have demonstrated the repeat ability of our model and process across investment leaders generations geographies asset classes and distribution channels.
Speaker Change: We have performed for existing clients thoughtfully grown the firm from next generation high value added investing and generated a healthy return for shareholders.
Slide two is a snapshot of our repeatable success.
Speaker Change: This shows our 11th strategies with track records of more than 10 years.
Speaker Change: Developing world, which Jason will discuss will join this group in July.
Speaker Change: The returns on this slide our average annual return since inception after fees and expenses.
Speaker Change: To help better understand the significance of our outperformance.
Speaker Change: Let me translate one of these outcomes into dollars.
Speaker Change: $1 million invested in the artisan global value strategy 18 years ago would be worth $4 1 million today after fees.
Speaker Change: At the same 1 million has been invested in the same manner as the index it would be worth $2 9 million today.
Speaker Change: Artisans global value 205 basis points of average annual outperformance after fees translated into $1 2 million of more well over 40% more wells than the index approach.
Speaker Change: In addition to the consistency of the absolute and excess returns we are equally proud of the consistency of our investment talent and their execution through time.
Speaker Change: We have done what we have told our clients what we would do over a long periods of time.
Speaker Change: Even the strategies no longer led by founding portfolio managers are led by portfolio managers with long tenures at artisan.
Speaker Change: They are known entities.
Speaker Change: We have achieved these long term outcomes by knowing who we are focusing on what we can influence and taking a long term view and avoiding trying to be all things to all people.
Speaker Change: We try to maintain an ideal home for investment talent.
Speaker Change: We provide that talent with expanding degrees of freedom to generate absolute returns and manage risk.
Speaker Change: We launched strategies, we believe will have long term demand from sophisticated investors, who understand the scarcity of alpha.
Speaker Change: We execute through periods of short term noise uncertainty and volatility to generate long term outcomes for our people our clients and our shareholders.
Jason Gottlieb: Jason will discuss several recent examples of this process at work.
Speaker Change: Yeah.
Eric Colson: Thank you Eric.
Jason Gottlieb: I'm going to discuss several investment strategies, all of which embody the themes and characteristics Eric was describing and has been describing for many years.
Eric Colson: Talent, driven increasing degrees of freedom.
Eric Colson: High value added differentiated investing long term demand in particular in the private wealth space.
Speaker Change: The first is the artisan global special situation strategy.
Speaker Change: We launched this new strategy in March it is led by Brian Lucco, who joined the artisan International value group in September of last year.
Speaker Change: The investment strategy is multi asset focused on issuers experienced distress or dislocation.
Speaker Change: The portfolio will be highly differentiated targeting attractive risk adjusted absolute returns through market cycles.
Speaker Change: In addition to managing global special situations, Brian and his team will provide corporate credit and special situations expertise to the broader international value led by David Samra.
Speaker Change: This is the second time, David has added new capabilities to the International Valley Group and.
Speaker Change: In 2020 babies al and Ah Nonfossil, Gary launched the artisan International Explorer strategy, which has generated over 540 basis points of average annual outperformance since inception after fees.
Speaker Change: And on a now manage over $600 million, including net inflows are almost $221 million during the first quarter.
Speaker Change: We are excited to have started the journey with Brian and his team and our global special situation strategy and we are very pleased to see David Samra and the international value group further expand their degrees of freedom and capabilities into fixed income special situations and alternatives.
Speaker Change: Our second new strategy is the artisan franchise strategy managed by the growth teams, Jim Hamel and Angela will.
Speaker Change: The franchise strategy is a highly concentrated global equity strategy that seeks to generate significant alpha for investors willing to hold through periods of volatility and tracking error.
Speaker Change: In particular, we expect the franchise strategy will be attractive to family offices and other intermediates wealth clients.
Speaker Change: In addition to representing a new investment offering from the growth team. The franchise strategy is yet another demonstration of the team's thoughtful and methodical development of investment talent.
Speaker Change: Moving from new launches to important milestones on slide four.
Speaker Change: On April 1st we Mark the third anniversary of the artisan global unconstrained strategy.
Speaker Change: Tomorrow, the emerging market debt opportunity strategy will hit three years and in August the emerging markets local opportunity strategy and we'll do so as well.
All three strategies have performed extremely well since inception.
Speaker Change: The absolute return oriented global unconstrained strategy has generated average annual returns of 987% net of fees and a sharp ratio of 2.1.
Speaker Change: Seth inception, emerging market debt opportunities and emerging market local opportunities rank in the first and seventh percentiles, respectively of their investment peer universes.
Speaker Change: All three strategies have large institutional anchor clients.
Speaker Change: Historically, the three year Mark has been an inflection point for business development.
Speaker Change: With the foundation firmly established we are increasing our marketing and distribution efforts around across the M site strategies.
Speaker Change: We have raised over $300 million for M sites, so far this year.
Speaker Change: And we expect to do much more across distribution channels and geographies.
Speaker Change: In July we will celebrate the 10th anniversary of the developing world strategy as Eric mentioned, it will become our 12 strategy with a 10 plus year track record.
Speaker Change: When portfolio manager Lewis Kaufman joined artisan more than a decade ago.
Speaker Change: We very intentionally set out to do something different to design, an investment strategy that could capture the potential of our emerging markets, but provide lewis with the degrees of freedom to move optimally.
Speaker Change: Capture the economic opportunity and better manage risk.
Speaker Change: Lewis's dare to be different methodically communicated his unique approach remained disciplined around a core set of principles and delivered.
Speaker Change: As we approached the 10 year anniversary, we believe the developing world team is a great example of our strategy of identifying unique talent and supporting them with broader degrees of freedom to add value for clients over a long periods.
Speaker Change: We believe the 10 year track record will make developing world that much more appealing to investors seeking an emerging market strategy with degrees of freedom to navigate geopolitical and economic uncertainty.
Speaker Change: Thank you Jason this.
Speaker Change: It is gratifying to see our established investment franchises, adding degrees of freedom and our more recent franchises hitting important milestones with impressive investment and business results.
Speaker Change: Speaks directly to the repeat ability of our business model and philosophy.
Speaker Change: Our approach to thoughtful growth has always emanated from who we are a high value added investment firm designed for talent to thrive in a thoughtful growth environment.
Speaker Change: System with that.
Speaker Change: We have always focused on the intersection of investment talent Alpha opportunity and long term asset allocation demand.
Speaker Change: Historically that led us to design much of our business, primarily with an eye towards institutional investors and the consultants who serve them.
Speaker Change: That remains an important part of our business today, and we will continue long into the future.
Speaker Change: Day, though we're increasingly designing and evolving our business, primarily with an eye towards the private wealth market.
Speaker Change: Private wealth is large and growing with demand for our high value added management, we have a significant presence in this market today.
Speaker Change: Of our 162 billion in AUM at quarter end, approximately 97 billion was sourced from the intermediate it wealth channel and the intermediate it well we have approximately 172 relationships of greater than $50 million and 117 are invested in three or more.
Speaker Change: <unk>.
Speaker Change: We believe there is a tremendous opportunity for us to further grow in the intermediate and wealth channel.
Speaker Change: We will continue to bring together unique investment talent with large opportunity sets requiring active management, we will continue to align interests between investment talent clients and the firm.
Speaker Change: And we will continue to reorient, our distribution structure and team to better access and service the intermediate at wealth channel.
Speaker Change: By remaining focused on who we are and executing on this strategy I am highly confident we will continue to generate successful long term outcomes for our people our clients and our shareholders.
Speaker Change: I will now turn it over to C. J to discuss our recent financial results.
Speaker Change: Thanks, Eric first quarter results reflect lower revenues, primarily as a result of the absence of $17 million of performance fees realized in the fourth quarter of 2024.
Speaker Change: The fourth quarter included performance fees realized in seven different strategies.
Speaker Change: The majority of our performance fee arrangements pay annually and have measurement states at the end of December.
Speaker Change: The expected absence of performance fees in the first quarter and higher seasonal expenses led to a 7% decline in revenues, 19% lower adjusted operating income and 470 basis points decrease in our adjusted operating margin from the fourth quarter of 2024.
Speaker Change: Assets under management ended the March quarter at 162 billion up slightly from last quarter and from a year ago.
Speaker Change: Ending assets under management for the March quarter reflect $4 1 billion of market returns, including wondering $1 8 billion or 110 basis points of returns in excess of benchmarks.
Speaker Change: Net client cash outflows during the March quarter were approximately $2 8 billion and included a $1 $2 billion outflow from a separate account rebalancing within our mid cap growth strategy.
Speaker Change: Gross outflows for the quarter.
Speaker Change: Excluding the separate account rebalance were in line with historical levels.
Speaker Change: Equity outflows in the quarter were partially offset by positive flows into our fixed income and alternative businesses.
Speaker Change: First quarter 2025 marks the 11th consecutive quarter of positive fixed income flows.
Speaker Change: Average AUM for the quarter was up 1% sequentially and up 8% compared to the March 2024 quarter.
Speaker Change: Yeah.
Speaker Change: Slide nine is a new cut of our AUM by distribution channel.
Speaker Change: Eric has highlighted how artisan has become firmly established in the wealth channel.
Speaker Change: This view of AUM provides a five year view of the strength of our intermediate wealth relationships in the $97 billion of assets sourced from that channel.
Speaker Change: The intermediates wealth channel has grown tremendously over that period and now accounts for 60% of total AUM with annualized organic growth rate over that period of 5%.
Speaker Change: As discussed in Eric's remarks, our distribution efforts continue to focus on this channel with more dedicated resources and a buildout of enhanced digital marketing and sales of name the enablement capabilities.
Speaker Change: Our complete GAAP and adjusted results are presented in our earnings release.
Speaker Change: Revenues for the quarter decreased 7% compared to the December 2024th quarter and are up 5% compared to the prior year first quarter.
Speaker Change: In addition to the seasonal decline in performance fees $5 4 million of the decline in revenue was attributable to two fewer days in the first quarter of 2025 compared to the fourth quarter of 2024.
Speaker Change: Our weighted average recurring fee rate for the quarter remained at 68 basis points.
Speaker Change: Adjusted operating expenses for the quarter were flat from the fourth quarter with variable expenses declining 6% on lower revenues offsetting seasonal increases and fixed expenses of 8% or $7 5 million.
Speaker Change: Comparison to the same quarter last year adjusted operating expenses are up 3% primarily from higher incentive compensation expense due to increased revenues.
Speaker Change: For the full year of 2025 fixed expenses are still expected to increase mid to low single digits consistent with our previous guidance.
Speaker Change: Adjusted operating income is down 19% sequentially from the absence of performance fees and up 9% compared to the same quarter last year as a result of revenue growth outpacing increases in operating expenses.
Speaker Change: Adjusted net income for adjusted share declined 21% compared to last quarter again, primarily from the expected absence of performance fees and up 9% compared to the same quarter last year.
Speaker Change: When 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.
Speaker Change: Turning to slide 11.
Speaker Change: Our balance sheet remained strong we currently have $138 million of seed capital in our investment products with ample liquidity to seed future strategies.
Speaker Change: Our strategies reach scale and our seed investments are redeemed any gains realized are included in the cash available for corporate purposes future seed investment needs.
Speaker Change: As an addition to our year end special dividend.
Speaker Change: During the first quarter of 2025, we fully redeemed our remaining $23 million seed investments in our credit opportunities fund with a cost basis of $8 million.
Speaker Change: The original seed investment of $22 million was made in 2017 and generated total realized gains of 27 million and an annualized return of 13%.
As a result of the redemption of the remaining seed capital the credit opportunities fund was the consolidated from our balance sheet during the first quarter moving.
Speaker Change: Moving to our borrowings are $100 million revolving credit facility remains unused and $60 million of senior notes will mature in August 2025, we.
Speaker Change: We currently expect to refinance all or a significant portion of the maturing amounts with a new series of long term senior notes.
Speaker Change: We continue to return capital to shareholders in a consistent and predictable basis through quarterly cash dividend payments and our year end special dividend.
Consistent with our dividend policy, our board of directors declared a quarterly dividend of 68 cents per share with respect to the March 2025 quarter.
The decline in the dividend from Q4 reflects lower cash generation from the absence of performance fees in the first quarter of 2025.
Speaker Change: That concludes my prepared remarks, I will now turn the call back to the operator.
Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you were using a speakerphone please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: In the interest of time, please limit yourself to one question and one follow up we will now pause momentarily to assemble our roster.
Speaker Change: And your first question today will come from Alex Blaustein with Goldman Sachs. Please go ahead.
Anthony: Hey, Good afternoon. This is Anthony on for Alex I guess.
Speaker Change: First our I would say John Congrats Jason on the new role.
Speaker Change: But for my first question you guys have talked about fixed income and alternatives being the key strategic growth area for the firm could you maybe expand on opportunities you see here, specifically in the retail or insurance channel.
Speaker Change: Yeah, Hi, Anthony Thank you for the kind words.
Speaker Change: There's a there's.
Speaker Change: There's a couple of ways that I think we can that we can continue to build and expand and grow the first way and it's one that we've historically talked about quite a bit which is.
Speaker Change: The highest and best use of our time is to continue to expand degrees of freedom with our existing investment franchises and we think we've got a long runway with our with our high income team and franchise as well as our insights team and so we think that there's multiple paths.
Speaker Change: I'd highlighted global unconstrained as a.
Speaker Change: It was one of our marquee franchises that cuts across fixed income slash alternatives.
Speaker Change: And certainly fits in that high net worth space, It's a liquid alternative that gives people the ability to.
Speaker Change: Use it as a.
Speaker Change: Fixed income traditional fixed income non traditional fixed income and cash.
Speaker Change: Surrogate or just purely an N and all context and you know we are we view this as a pretty big opportunity for us and we're as we've mentioned on the call leaning in on the on expansion there.
Speaker Change: And.
Speaker Change: Maybe on the on the new endeavor front you know, there's there's multiple ways in which we can grow with the fact that we only have.
Speaker Change: Two teams suggest that we have.
Speaker Change: A clear path to grow via lift out or via M&A.
Speaker Change: And you know we're going to continue to evaluate those opportunities as we always do.
Speaker Change: And as and when we see that what we call. The no brainer, where we are we feel like we've got really strong alignment with really strong investment capabilities will certainly go ahead and do that and.
Speaker Change: So those are really the areas that I would suggest are clear paths for us both in the intermediate wealth channel as well as just pure.
Speaker Change: Peer platform expansion.
Speaker Change: Got you that's helpful and I guess for my follow up expenses came in well managed this quarter, especially on the non comp side. So how should we think about normalized expenses from here and if uncertainty continues what kind of levers can you use to maintain margins.
Speaker Change: Great. Thanks.
Anthony: Thanks Anthony.
Speaker Change: Good question, you know our guidance for the full year really hasn't it hasn't changed much I think.
Speaker Change: There was a bit of a mess from folks on G&A we.
Speaker Change: We did have some FX.
Speaker Change: FX gains this quarter and travel typically.
Speaker Change: Slows down a bit in the fourth and the first quarter. After a heavy fourth quarter. So that guidance still remains so I think you'll see.
Speaker Change: The rest of the quarters pick up.
You know the savings that you had.
Speaker Change: <unk> had in your model for the first quarter.
Speaker Change: When the when the variable expenses, obviously, they fluctuate with revenues and their long term incentive comp guidance is still it's still similar to what we gave for the full year.
Speaker Change: In the first quarter, there is a little bit of a of a holiday because our 2025 Grand happens at the end of 'twenty at the end of January so there isn't a full quarter of of expensing there, but you know all of the guidance that we gave you.
Speaker Change: In January related to 2025 remains intact.
Speaker Change: Okay. Thanks, guys.
Speaker Change: And your next question today will come from John Dunn with Evercore ISI. Please go ahead.
Speaker Change: Hi, Greg Congratulations Jayson.
Speaker Change: I wanted to ask about just given where the markets are there any areas you wanted to highlight it.
Speaker Change: About being capacity.
Speaker Change: Capacity constrained or.
Speaker Change: There are various having a lot of capacity.
Speaker Change: Okay.
Speaker Change: Yeah we're.
Speaker Change: We're always in constant communication with the teams about capacity management. There are certainly are.
Speaker Change: With strategies that have been in the ER and the soft closed mode.
Speaker Change: For several years now and we don't anticipate them to be adjusted or changed or opened.
Speaker Change: That being said there are some opportunities where there could be the potential for.
Speaker Change: A shift there and you know it.
Speaker Change: It comes down to the team being comfortable taking on that additional capacity and certainly we want to work with them and evaluate why that potential is available is it the dislocation in the market and that Theres opportunities has there been some attrition that theyre looking to replace and so it's a it's a bit of an ongoing dialogue.
Speaker Change: In discussion with the teams, but we do think in not too distant future.
Speaker Change: There is the potential for you know for some capacity opening coming in the form of these the soft close is being being removed.
Speaker Change: Got it and then.
Speaker Change: Also just with the market movements on the M&A front, a bunch of your peers.
Speaker Change: So you know like a renewed interest in may.
Speaker Change: It may be doing some team lift outs or small deals in private markets, you know with smaller firms looking for better distribution in the wealth channel can you just kind of give us your thoughts around that topic.
Speaker Change: Yeah.
Speaker Change: There is no shortage of opportunity in the market.
Speaker Change: Right now for sure and we're extremely active as we have been and always and always have been.
Speaker Change: But we're going to stay true to our process, our time tested process of evaluating each opportunity on the merits of their investment acumen as well as the <unk>.
Speaker Change: The asset allocation trends that we see in the markets I would just continue to.
Speaker Change: Advocate that we see really really good and.
Speaker Change: And interesting opportunities, but there.
Speaker Change: We're going to just be very judicious with how we think about adding capability onto the platform.
Speaker Change: So they're going to come via lift out there gonna come possibly via M&A.
Speaker Change: The market volatility as you rightly pointed out is very much working to our benefit I know people don't always loved the disruptions that are occurring but we view them as really great opportunities for us and they they do come in the form of these opportunities that you rightly pointed out.
Speaker Change: Thank you.
Speaker Change: And your next question today will come from Bill Katz with TD Cowen. Please go ahead.
Speaker Change: Thank you very much and as well congratulations I'm, Jason So just coming back to new disclosure. So thank you for that I did spend some time on that last night.
Speaker Change: So a couple of questions embedded in that can you unpack some of the commentary you mentioned in terms of Eric in your commentary to get which I apologize, but just in terms of the 172 relationships and then the 117 is maybe you could just sort of unpack exactly what you mean by those relationships and then as you think big picture of the franchise.
Speaker Change: As I think about the channels you used to.
Speaker Change: Social business has been under a fair amount of pressure over that same five year time frame, how do you sort of see the backdrop for that business does that continue to sort of migrate down in terms of flows or is there an opportunity for that to potentially stabilize to supplement the wealth side. Thank you.
Speaker Change: Okay.
Eric Colson: Hey, Bill it's Eric.
Speaker Change: Yeah, we just really wanted to highlight.
Speaker Change: The progress we've made in the wealth space.
Speaker Change: Clearly defined it as intermediate at wells versus the wealth management space.
Speaker Change: We view ourselves as a pure play investment platform.
Speaker Change: For talent that want to be a resource with high degrees of freedom.
Speaker Change: Many of those.
Speaker Change: Individuals are seeking to manage assets in the wealth space and plug into this growth area.
Speaker Change: We are not looking to build out.
Speaker Change: The accounting the tax the legal the overall portfolio allocation is going to be a direct wealth player, but how many of our clients.
Speaker Change: And clients are sourcing assets from the the wealth channel.
Speaker Change: The number of relationships have been growing.
Speaker Change:
Speaker Change: And we wanted to highlight that that channel and we think that characteristics really lineup to what we were looking for in the institutional channel day. One we always wanted barriers of entry and we felt the institutional channel had research barriers.
Speaker Change: We always wanted to compete on investment perf.
Speaker Change: Performance and operational quality or not.
Speaker Change: Compete on sales marketing fees and so the institutional channel had that research barrier. It allowed the time required for our strategies to deliver excess return and most importantly, it created a leveraged outcome with institutionally add the consult.
Speaker Change: <unk> channel and in the intermediate it wealth channel.
Speaker Change: We're working with the broker dealers.
Speaker Change: They have been providing that leverage and that that's the number.
Speaker Change: The second number that you highlighted there with the the number of relationships with our more than three strategies.
Speaker Change: So that we're getting enormous leverage with these relationships.
Speaker Change: And so we think.
Speaker Change: So you know more and more we're aligning our distribution to grow that we've talked about that.
Speaker Change: <unk> evolution and that's exactly the.
Speaker Change: The outcome, we're looking for with regards to the institutional space, we have grown that in the U S and we have done taken that overseas. We believe that's going to maintain.
Speaker Change: Maintain a solid growth area for us, but we did see some rebalancing over this period away from.
Speaker Change: Equities into other asset classes of credit and alternatives and you've seen us align.
Speaker Change: The organization to fill out with fixed income strategies and alternatives. So we think the alternative.
Speaker Change: We think the institutional space. So we will remain a very strong area for us.
Speaker Change: Okay. Thank you and just as a follow up should be in terms of you mentioned the the pipeline I'm sort of curious maybe between just sort of Jason taking on a greater responsibility here and being at the at the Vanguard of both driving the credit the old platform.
Speaker Change: Is there any shift in strategy here, you said, you're going to sort of stay true to your time tested capabilities, but anything different.
Speaker Change: I'm hearing a little bit more lean forward into organic growth historically I know you've tried to cap some of that growth, but is it more of a structural receptivity to growing without being sort of focus on on fee degradation to drive that growth. Thank you.
Speaker Change: We've we've definitely been focused on on growth.
Speaker Change: We've talked about our distribution our evolution we've.
We've talked about.
Speaker Change: Oh.
Speaker Change: Going from being bought to being sold.
Speaker Change: And as we focus on it and Remediated space, we have shifted our sales team and grown our head count last year was primarily in sales.
Speaker Change: So the focus is building on that intermediate as well.
Speaker Change: Really restructuring, how we're selling into that channel and more importantly, the the strategies that Jason highlighted Ah and the groups, where we're looking at is to build out our investment opportunities and strategies that fit that channel whether.
Speaker Change: It's within team or.
Speaker Change: When they are left out which we think is.
Speaker Change: <unk>.
Speaker Change: Quite a.
Speaker Change: Yeah quite opportunistic right now given the amount of teams available.
Speaker Change: So we definitely feel that we're positioned well for that that channel and we are focused on growth.
Speaker Change: Okay. Thank you I'll get back in the queue. Thank you.
Speaker Change: Your next question today will come from Kenneth Lee with RBC capital markets. Please go ahead.
Kenneth Lee: Hey, good afternoon, and thanks for taking my question just wanted to add my congratulations to Jason on the on the new role.
Speaker Change: And one follow up here on the Intermune wealth.
Kenneth Lee: Growth opportunity here.
Kenneth Lee: When you look out for further growth here.
Speaker Change: Are there any particular segments.
Kenneth Lee: That are possibly faster growing I think you mentioned briefly family offices.
Speaker Change: The franchise strategy there.
Speaker Change: And somewhat relatedly is it going to acquire a different mix of strategies or vehicles to really optimize that growth in that channel going forward. Thanks.
Speaker Change: I think when you look at the long term asset allocation of that that client mix that it is slightly different than the institutional.
Speaker Change: So we've always looked at long term asset allocation to drive that type of strategies.
Speaker Change: That fit within artisan, we believe that we need the time required to resource and play out those strategies. So when they do.
Speaker Change: Build a three year track record such as the records, we highlighted in the call with the M sites group.
Speaker Change: With our global unconstrained.
Speaker Change: M Doe and M low all coming into three year track Records.
Speaker Change: That will.
Speaker Change: Play out quite well and the intermediate space, whether it's in Europe or in the U S.
Speaker Change:
Speaker Change: So yeah.
Speaker Change: Really the.
Speaker Change: Yes.
Speaker Change: The types of strategies, we are looking for will be slightly different because of that wealth space.
Speaker Change: And I think thats, a great opportunity for us, but in many cases, our existing strategy is given that the track records. We've highlighted on page two also play quite well. So we think the combination of what we have the track records. We built more recently, we're starting to see.
Speaker Change: The bulk of our platform producing a good alpha and solid performance.
Speaker Change: Given the volatility in the marketplace and more and more we will see new strategies that fit the intermediates wealth space.
Speaker Change: Gotcha very helpful. There and just one follow up if I may on the on the institutional side.
Speaker Change: And realize it's still early days, but just given the more recent market volatility there could.
Speaker Change: Could you, perhaps provide a little color around what you're seeing in terms of either RFP activity due diligence activity any kind of potential changes that you're seeing in terms of client allocations there. Thanks.
Speaker Change: Oh really.
Speaker Change: Q1, we saw.
Speaker Change: A bit of rebalancing in the equity space.
Speaker Change: We highlighted the larger clients that are rebalanced 1.2 billion away.
Speaker Change: They were signaling that for a while.
Speaker Change: That was really a.
Speaker Change: A DC plan that had single manager options that moved into a multi manager plan.
Speaker Change: This strategy was mid cap growth on page two of our deck you can see the performance on mid cap ROE since inception at $12 seven eight so with that type of performance. It attracts a lot of assets and when do you reallocate back into our multi manager.
Speaker Change: The program and you go back to your target allocations that gets cut back quite a bit.
Speaker Change: And so we've seen that occur across the platform of.
Speaker Change: Our platform doing well rebalancing back to a target.
Speaker Change: That was the bulk of the.
Speaker Change: The dollar flow in Q1.
Speaker Change:
Speaker Change: That we saw.
Speaker Change:
Speaker Change: And we saw an increased interest in the credit space and the bulk of the activity was just asking for thoughts and opinions on the uncertainty and the volatility in the market and how each team is positioning for that volatility.
Speaker Change:
Speaker Change: I'd say overall I classify the quarter as a lot of communication a lot of touch points with our clients, which is always positive for us.
Speaker Change: But not much action.
Speaker Change: Got you very helpful. There. Thanks again.
Speaker Change: This will conclude today's question and answer session as well as conference call. Thank you for attending today's presentation. You may now disconnect your lines and have a great day.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
[music].