Speaker #1: Good afternoon. Partners Asset Management business and welcome to the Artisan Update and Q4 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad.
Speaker #1: To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Artisan Partners Asset Management.
Speaker #1: Please go
Speaker #1: ahead. Welcome to the
[Company Representative] (Artisan Partners Asset Management): Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Jason Gottlieb, CEO, and C.J. Daley, CFO. Following these remarks, we will open the line for questions. Our latest results and investor presentation are available on the investor relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed in the statement, and we assume no obligation to update or revise any of these statements following the presentation.
[Company Representative] (Artisan Partners Asset Management): Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Jason Gottlieb, CEO, and C.J. Daley, CFO. Following these remarks, we will open the line for questions. Our latest results and investor presentation are available on the investor relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed in the statement, and we assume no obligation to update or revise any of these statements following the presentation.
Speaker #2: Business update and earnings Artisan Partners Asset Management call. Today's call will include remarks from Jason Gottlieb, CEO, and CJ Daley, CFO. Following these remarks, we will open the line for questions.
Speaker #2: 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.
Speaker #2: 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.
Speaker #2: 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 #2: 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.
[Company Representative] (Artisan Partners Asset Management): In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and supplemental materials, which can be found on our investor relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I will now turn it over to Jason.
[Company Representative] (Artisan Partners Asset Management): In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and supplemental materials, which can be found on our investor relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I will now turn it over to Jason.
Speaker #2: 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.
Speaker #2: I will now turn it over to Jason.
Speaker #3: Thank you, Ryan, and thank you for joining the call today. Since our founding in 1994, we have steadily expanded our capabilities across equities, credit, and most recently, alternatives.
Jason Gottlieb: Thank you, Ryan, and thank you for joining the call today. Since our founding in 1994, we have steadily expanded our capabilities across equities, credit, and most recently, alternatives. We have done this while remaining true to a consistent business philosophy and approach, high value-added investing, a talent-driven business model, and thoughtful growth, all in the pursuit of generating and compounding wealth for our clients over the long term. In 2025, we generated significant absolute returns for our clients, delivered strong results for our shareholders, and continued to expand our multi-asset class platform. Firm-wide asset-weighted investment returns exceeded 20% net of fees. Our investment strategies generated over $33 billion in returns for clients. Compared to 2024, we grew revenue by 8%, operating income and adjusted operating income by 9% and 12%, respectively, and assets under management by nearly 12%. Turning to slide 3.
Jason Gottlieb: Thank you, Ryan, and thank you for joining the call today. Since our founding in 1994, we have steadily expanded our capabilities across equities, credit, and most recently, alternatives. We have done this while remaining true to a consistent business philosophy and approach, high value-added investing, a talent-driven business model, and thoughtful growth, all in the pursuit of generating and compounding wealth for our clients over the long term. In 2025, we generated significant absolute returns for our clients, delivered strong results for our shareholders, and continued to expand our multi-asset class platform. Firm-wide asset-weighted investment returns exceeded 20% net of fees. Our investment strategies generated over $33 billion in returns for clients. Compared to 2024, we grew revenue by 8%, operating income and adjusted operating income by 9% and 12%, respectively, and assets under management by nearly 12%. Turning to slide 3.
Speaker #3: We have done this while remaining true to a consistent business philosophy and approach: high-value-added investing, a talent-driven business model, and thoughtful growth—all in the pursuit of generating and compounding wealth for our clients over the long term.
Speaker #3: In 2025, we generated significant absolute returns for our clients, delivered strong results for our shareholders, and continued to expand our multi-asset class platform. Firm-wide, asset-weighted investment returns exceeded 20% net of fees.
Speaker #3: Our investment strategies generated over $33 billion in returns for clients. Compared to 2024, we grew revenue by 8%, operating income and adjusted operating income by 9% and 12%, respectively, and assets under management by nearly 12%.
Speaker #3: Turning to slide three, investment performance remained strong across our platform, with 79% of our AUM outperforming benchmarks for the three-year period, 74% for the five-year period, and 92% for the ten-year period, gross of fees.
Jason Gottlieb: Investment performance remained strong across our platform, with 79% of our AUM outperforming benchmarks for the three-year period, 74% for the five-year period, and 92% for the ten-year period, gross of fees. Several strategies generated particularly strong results in 2025. In equities, six of our strategies generated over 500 basis points of outperformance net of fees, including U.S. Mid-Cap Growth, Non-U.S. Growth, Global Equity, Global Value, Select Equity, and Sustainable Emerging Markets. The Global Equity, Global Value, and Select Equity strategies outperformed their benchmarks by 2,422, 1,188, and 1,175 basis points, respectively, net of fees. In credit, the Emerging Markets Local Opportunities strategy generated a calendar year return of over 24%, 527 basis points above its benchmark net of fees.
Jason Gottlieb: Investment performance remained strong across our platform, with 79% of our AUM outperforming benchmarks for the three-year period, 74% for the five-year period, and 92% for the ten-year period, gross of fees. Several strategies generated particularly strong results in 2025. In equities, six of our strategies generated over 500 basis points of outperformance net of fees, including U.S. Mid-Cap Growth, Non-U.S. Growth, Global Equity, Global Value, Select Equity, and Sustainable Emerging Markets. The Global Equity, Global Value, and Select Equity strategies outperformed their benchmarks by 2,422, 1,188, and 1,175 basis points, respectively, net of fees. In credit, the Emerging Markets Local Opportunities strategy generated a calendar year return of over 24%, 527 basis points above its benchmark net of fees.
Speaker #3: Several strategies generated particularly strong results in 2025. In equities, six of our strategies generated over 500 basis points of outperformance net of fees, including US Mid-Cap Growth, Non-US Growth, Global Equity, Global Value, Select Equity, and Sustainable Emerging Markets.
Speaker #3: The global equity, global value, and select equity strategies outperformed their benchmarks by 2,422, 1,188, and 1,175 basis points, respectively, net of fees. In credit, the emerging markets local opportunities strategy generated a calendar year return of over 24%, 527 basis points above its benchmark net of fees.
Speaker #3: In alternatives, credit opportunities returned nearly 8%, global unconstrained returned nearly 12%, and interim peak returned over 20%, each net of fees. Longer-term performance across our platform is compelling and broad-based.
Jason Gottlieb: In alternatives, Credit Opportunities returned nearly 8%, Global Unconstrained returned nearly 12%, and Antero Peak returned over 20%, each net of fees. Longer-term performance across our platform is compelling and broad-based. All 12 Artisan strategies with track records over 10 years have outperformed their benchmark since inception, net of fees. 14 of 17 strategies in equity, 4 of 4 credit strategies, and 3 of 5 alternative strategies have outperformed their respective benchmarks since inception, net of fees. Currently, 1-year performance has been weighed down by underperformance in 2 of our largest equity strategies, International Value and Global Opportunities, both of which have very strong long-term track records. Turning to slide 4, we ended the year with $180 billion in assets under management, an all-time high at year-end, driven by over $33 billion of investment gains.
Jason Gottlieb: In alternatives, Credit Opportunities returned nearly 8%, Global Unconstrained returned nearly 12%, and Antero Peak returned over 20%, each net of fees. Longer-term performance across our platform is compelling and broad-based. All 12 Artisan strategies with track records over 10 years have outperformed their benchmark since inception, net of fees. 14 of 17 strategies in equity, 4 of 4 credit strategies, and 3 of 5 alternative strategies have outperformed their respective benchmarks since inception, net of fees. Currently, 1-year performance has been weighed down by underperformance in 2 of our largest equity strategies, International Value and Global Opportunities, both of which have very strong long-term track records. Turning to slide 4, we ended the year with $180 billion in assets under management, an all-time high at year-end, driven by over $33 billion of investment gains.
Speaker #3: All 12 Artisan strategies with track records over 10 years have outperformed their benchmarks since inception, net of fees. Fourteen of seventeen strategies in equity, four of four credit strategies have outperformed their respective benchmarks, and three of five alternative strategies have outperformed their benchmarks since inception, net of fees.
Speaker #3: Currently, one-year performance has been weighed down by underperformance in two of our largest equity strategies: International Value and Global Opportunities, both of which have very strong long-term track records.
Speaker #3: Turning to slide four, we ended the year with $180 billion in assets under management, an all-time high at year-end, driven by over $33 billion of investment gains.
Speaker #3: Our credit platform performed well in 2025. AUM grew by 29% compared to 2024, to $17.9 billion. Net inflows totaled $2.8 billion, and organic growth exceeded 20% for the third consecutive year.
Jason Gottlieb: Our credit platform performed well in 2025. AUM grew by 29% compared to 2024 to $17.9 billion. Net inflows totaled $2.8 billion, and organic growth exceeded 20% for the third consecutive year. Our alternatives platform also experienced healthy growth, with AUM growing 20% from 2024 to $4 billion, with strong organic growth in Global Unconstrained in particular. Our equity platform was impacted by higher than expected outflows of $15.6 billion. Outflows were primarily concentrated in Global Opportunities, U.S. Mid-Cap Growth, and Non-U.S. Small-Mid Growth strategies, driven by challenging short-term performance, changing asset allocation preferences, and profit-taking on the back of strong long-term performance. Maintaining and growing AUM in public equities requires differentiated and compelling investment performance, asset allocation demand, the right vehicles and pricing, and effective sales and client service.
Jason Gottlieb: Our credit platform performed well in 2025. AUM grew by 29% compared to 2024 to $17.9 billion. Net inflows totaled $2.8 billion, and organic growth exceeded 20% for the third consecutive year. Our alternatives platform also experienced healthy growth, with AUM growing 20% from 2024 to $4 billion, with strong organic growth in Global Unconstrained in particular. Our equity platform was impacted by higher than expected outflows of $15.6 billion. Outflows were primarily concentrated in Global Opportunities, U.S. Mid-Cap Growth, and Non-U.S. Small-Mid Growth strategies, driven by challenging short-term performance, changing asset allocation preferences, and profit-taking on the back of strong long-term performance. Maintaining and growing AUM in public equities requires differentiated and compelling investment performance, asset allocation demand, the right vehicles and pricing, and effective sales and client service.
Speaker #3: Our alternatives platform also experienced healthy growth, with AUM growing 20% from 2024 to $4 billion. We saw strong organic growth and global unconstrained, in particular.
Speaker #3: Our equity platform was impacted by higher-than-expected outflows of $15.6 billion. Outflows were primarily concentrated in Global Opportunities, US Mid-Cap Growth, and Non-US Small Mid-Growth strategies, driven by challenging short-term performance, changing asset allocation preferences, and profit taking on the back of strong long-term performance.
Speaker #3: Maintaining
Speaker #1: A AUM in public equities requires growing differentiated and compelling investment performance . Asset allocation , the demand , right vehicles and pricing , and effective sales and client service .
Speaker #1: The bar is high, but we believe asset allocation demand, the right vehicles, pricing, and effective sales and client service are all important. The bar is high, we believe, but we can continue to maintain and grow our equity businesses.
Jason Gottlieb: The bar is high, but we believe we can continue to maintain and grow our equity businesses. In addition, we continue to make meaningful progress towards expanding the breadth of our platforms towards credit and alternatives. Slide 5 provides an overview of our newest investment franchise, Grandview Property Partners. Grandview is a real estate private equity firm specializing in originating, developing, acquiring, and managing middle-market properties across the United States, and joins Artisan as our 12th autonomous investment franchise. The Grandview team, led by founding partners Raj Menon, Dean Sotter, Eric Freeman, and Jeff Usas, has worked together for an average of 22 years. Since forming Grandview Partners in 2018, the team has delivered top-quartile results and consistent DPI realization. Grandview's macro-driven investment approach focuses on growth markets, supported by shifting demographic trends and regional supply-demand dynamics. Recent funds have emphasized industrial, residential, and power land themes.
Jason Gottlieb: The bar is high, but we believe we can continue to maintain and grow our equity businesses. In addition, we continue to make meaningful progress towards expanding the breadth of our platforms towards credit and alternatives. Slide 5 provides an overview of our newest investment franchise, Grandview Property Partners. Grandview is a real estate private equity firm specializing in originating, developing, acquiring, and managing middle-market properties across the United States, and joins Artisan as our 12th autonomous investment franchise. The Grandview team, led by founding partners Raj Menon, Dean Sotter, Eric Freeman, and Jeff Usas, has worked together for an average of 22 years. Since forming Grandview Partners in 2018, the team has delivered top-quartile results and consistent DPI realization. Grandview's macro-driven investment approach focuses on growth markets, supported by shifting demographic trends and regional supply-demand dynamics. Recent funds have emphasized industrial, residential, and power land themes.
Speaker #1: In addition, we continue to make meaningful progress towards expanding the breadth of our platform's credit and alternatives. Slide five provides an overview of our investment's newest franchise, Grandview Property Partners.
Speaker #1: Grandview is a real estate private equity firm specializing in originating, developing, acquiring, and middle managing market properties in the United States and joins Artisan as our 12th autonomous, across-investment franchise.
Speaker #1: The Grandview team, led by founding partners Raj Menon, Dean Sartor, Freeman and Jeff, and Eric Eustace, has worked together for an average of 22 years, forming Grandview Partners in 2018.
Speaker #1: The team has delivered top quartile results and consistent DPI since realization. Grandview's macro investment-driven approach focuses on growth markets supported by shifting demographic trends and regional supply-demand dynamics.
Jason Gottlieb: Grandview has raised three discretionary closed-end drawdown funds and currently manages approximately $880 million in institutional assets across its flagship fund series and co-investment programs. The acquisition of Grandview advances our strategic expansion into alternative investments, establishes a foundation in private real estate, and creates new pathways for growth. It also aligns with our long-standing business model, high value-added investing, talent-driven, and thoughtful growth. We believe we can leverage our institutional and intermediated wealth relationships to further expand and develop Grandview's business. Marketing the team's next fund will be high on the priority list in 2026. With Grandview's acquisition, we have broadened the ways in which we can partner with and onboard differentiated investment talent. We intend to leverage our enhanced transactional and operational capacity to add additional capabilities across our platform, with a disciplined focus on allocating capital towards our highest conviction opportunities.
Jason Gottlieb: Grandview has raised three discretionary closed-end drawdown funds and currently manages approximately $880 million in institutional assets across its flagship fund series and co-investment programs. The acquisition of Grandview advances our strategic expansion into alternative investments, establishes a foundation in private real estate, and creates new pathways for growth. It also aligns with our long-standing business model, high value-added investing, talent-driven, and thoughtful growth. We believe we can leverage our institutional and intermediated wealth relationships to further expand and develop Grandview's business. Marketing the team's next fund will be high on the priority list in 2026. With Grandview's acquisition, we have broadened the ways in which we can partner with and onboard differentiated investment talent. We intend to leverage our enhanced transactional and operational capacity to add additional capabilities across our platform, with a disciplined focus on allocating capital towards our highest conviction opportunities.
Speaker #1: And currently manages approximately $880 million in institutional assets across its flagship fund series and co-investment programs. The acquisition of Grandview advances our strategic expansion into alternative investments, establishes a foundation in private real estate, and creates new pathways for growth.
Speaker #1: It also aligns with our long standing business model , high value added investing , talent driven and thoughtful growth . We believe we can leverage our institutional and intermediated wealth relationships to further expand and develop Grandview business Marketing .
Speaker #1: The next fund will be high on the priority list in 2026. With Grandview's acquisition, we have broadened the ways in which we can partner with and onboard differentiated talent investment.
Speaker #1: We intend to leverage our enhanced transactional and operational capacity to add additional scale across our capabilities platform, with a disciplined focus on allocating capital towards our highest conviction opportunities.
Jason Gottlieb: I will now turn it over to C.J. to review our recent financial results.
Jason Gottlieb: I will now turn it over to C.J. to review our recent financial results.
C.J. Daley: Thanks, Jason. Our complete GAAP and adjusted results are presented in our earnings release. We are pleased with our financial results for the fourth quarter of 2025. Assets under management as of 31 December 2025 were $180 billion, up 12% from year-end 2024. Revenues in the December quarter reached a new all-time high of $336 million, up 11% compared to the September quarter, and up 13% compared to the prior year fourth quarter. The December 2025 quarter reflects approximately $29 million of performance fees from six different strategies. Strong relative investment performance in the fourth quarter across three performance fee-eligible accounts drove performance fees above our third quarter projections.
C.J. Daley: Thanks, Jason. Our complete GAAP and adjusted results are presented in our earnings release. We are pleased with our financial results for the fourth quarter of 2025. Assets under management as of 31 December 2025 were $180 billion, up 12% from year-end 2024. Revenues in the December quarter reached a new all-time high of $336 million, up 11% compared to the September quarter, and up 13% compared to the prior year fourth quarter. The December 2025 quarter reflects approximately $29 million of performance fees from six different strategies. Strong relative investment performance in the fourth quarter across three performance fee-eligible accounts drove performance fees above our third quarter projections.
Speaker #1: I will now turn it over to C.J. to review our recent financial results.
Speaker #2: Jason, thanks. Our complete GAAP and results are presented in our earnings adjusted release. We are pleased with our financial results for the quarter of 2025.
Speaker #2: fourth Assets under management . As of December 31st , 2025 were $180 billion , up 12% from year end 2024 . Revenues in the quarter December reached a new all time high of $336 million , up 11% compared to the September quarter and up the prior year .
Speaker #2: Fourth quarter. The December 2025 quarter reflects approximately $29 million of performance from six different strategies' fees. Strong relative investment performance in the fourth quarter performance fee across three eligible accounts drove performance fees above our third quarter projections. As of the—
C.J. Daley: As of the end of 2025, approximately 3% of our AUM is subject to performance fee arrangements, and the majority of those arrangements are annual fees with measurement dates at the end of December. Our weighted average fee rate for the Q4 was 74 basis points, which includes performance fee revenue. Our recurring management fee rate remained consistent with recent quarters. In the Q4, the Artisan Funds completed their annual income and capital gain distributions. Distributions not reinvested in Artisan Funds totaled $1.5 billion for the quarter and $2 billion for the full year, representing an $800 million increase from 2024. This increase was driven primarily by strong absolute investment performance in our two largest equity mutual funds.
C.J. Daley: As of the end of 2025, approximately 3% of our AUM is subject to performance fee arrangements, and the majority of those arrangements are annual fees with measurement dates at the end of December. Our weighted average fee rate for the Q4 was 74 basis points, which includes performance fee revenue. Our recurring management fee rate remained consistent with recent quarters. In the Q4, the Artisan Funds completed their annual income and capital gain distributions. Distributions not reinvested in Artisan Funds totaled $1.5 billion for the quarter and $2 billion for the full year, representing an $800 million increase from 2024. This increase was driven primarily by strong absolute investment performance in our two largest equity mutual funds.
Speaker #2: End of 2025, approximately 3% of our AUM is subject to performance fee arrangements, and the majority of those arrangements are annual fees, with measurement dates at the end of December.
Speaker #2: Weighted, our average fee rate for the quarter was 74 basis points. The fourth quarter includes performance fee revenue—a recurring management fee rate that remained consistent with recent quarters.
Speaker #2: In the fourth quarter, the Artisan Funds completed their annual income and capital gain distributions. Distributions not reinvested in Artisan Funds totaled $1.5 billion for the quarter and $2.0 billion for the full year.
Speaker #2: Representing an $800 million increase from 2024. This increase was driven primarily by absolute strong investment performance in our two largest equity mutual funds.
C.J. Daley: Adjusted operating expenses for the quarter were up 4% compared with Q3 of 2025, and up 7% compared with Q4 of 2024, primarily from higher variable incentive compensation expense due to increased revenues. While total adjusted operating expenses increased, fixed compensation costs for the quarter declined modestly. Long-term incentive compensation expense was lower in the quarter due to the forfeiture of unvested long-term incentive awards associated with a small number of employee departures. Additionally, we benefited from the quarterly true-up of self-insurance liabilities, which reflected updated estimates. Adjusted operating income increased 23% compared to both the prior quarter and the same quarter last year. Adjusted operating margin for the quarter was 40.2%, an improvement of 400 basis points from the prior quarter.
C.J. Daley: Adjusted operating expenses for the quarter were up 4% compared with Q3 of 2025, and up 7% compared with Q4 of 2024, primarily from higher variable incentive compensation expense due to increased revenues. While total adjusted operating expenses increased, fixed compensation costs for the quarter declined modestly. Long-term incentive compensation expense was lower in the quarter due to the forfeiture of unvested long-term incentive awards associated with a small number of employee departures. Additionally, we benefited from the quarterly true-up of self-insurance liabilities, which reflected updated estimates. Adjusted operating income increased 23% compared to both the prior quarter and the same quarter last year. Adjusted operating margin for the quarter was 40.2%, an improvement of 400 basis points from the prior quarter.
Speaker #2: Operating expenses for the quarter, adjusted, were up 4% compared with the third quarter of 2025 and up 7% compared with the fourth quarter of 2020.
Speaker #2: Primarily from higher variable incentive compensation expense due to increased revenues, while total adjusted operating expenses increased, fixed compensation costs for the quarter declined modestly.
Speaker #2: Long-term incentive compensation expense was lower in the quarter due to the forfeiture of unvested long-term incentive awards associated with a small number of employee departures.
Speaker #2: Additionally , we benefited from the quarterly true up of self-insurance liabilities , which reflected updated estimates . Adjusted operating income increased 23% compared to both the prior quarter and the same quarter last year .
C.J. Daley: Adjusted net income per adjusted share was up 24% compared to last quarter and up 20% compared to Q4 2024, largely consistent with operating income. Full year 2025 revenues were up 8% compared to 2024 on higher average AUM. Full year 2025 adjusted operating expenses increased 5% from 2024, primarily from higher incentive compensation on elevated revenues and the impact of the addition of the January 2025 long-term incentive award. Calculating our non-GAAP measures, non-operating income includes only interest expense and interest income. As of 31 December, we had $152 million of seed capital invested in emerging products. Those investments have produced solid returns. During the year, we realized $20 million of gains from seed investment redemptions in products that no longer require support from firm capital.
C.J. Daley: Adjusted net income per adjusted share was up 24% compared to last quarter and up 20% compared to Q4 2024, largely consistent with operating income. Full year 2025 revenues were up 8% compared to 2024 on higher average AUM. Full year 2025 adjusted operating expenses increased 5% from 2024, primarily from higher incentive compensation on elevated revenues and the impact of the addition of the January 2025 long-term incentive award. Calculating our non-GAAP measures, non-operating income includes only interest expense and interest income. As of 31 December, we had $152 million of seed capital invested in emerging products. Those investments have produced solid returns. During the year, we realized $20 million of gains from seed investment redemptions in products that no longer require support from firm capital.
Speaker #2: Adjusted operating margin for the quarter was 40.2%, an improvement of 400 basis points from the prior quarter. Adjusted net income per adjusted share was up 24% compared to last quarter and up 20% compared to the fourth quarter of 2020.
Speaker #2: For largely consistent with operating income , full 2025 year revenues were up 8% compared to 2024 on higher average AUM . Full year 2025 adjusted operating expenses increased 5% from 2024 , primarily from higher incentive compensation on elevated revenues and the impact of the addition of the January 2025 long term incentive award .
Speaker #2: Calculating our non-GAAP measures . Non-operating income income includes interest expense and only interest . As of December 31st , we had $152 million of seed capital invested emerging in products .
Speaker #2: Those investments have produced solid returns during the year. We realized $20 million of gains from seed investment redemptions in products that no longer require support from firm capital.
C.J. Daley: Those gains, which are excluded from our non-GAAP earnings, provide capital to support dividends, as well as future growth through reinvestment in new products, GP investment in private funds, or acquisitions. Our balance sheet remains a source of strength. We ended the year with approximately $214 million of cash and a conservatively leveraged capital structure at approximately 0.4 times leverage. Importantly, our $100 million revolver remains fully undrawn, providing additional liquidity and downside protection. The result, we are in a position to return capital to shareholders on a consistent and predictable basis while maintaining the flexibility to invest in the business. Consistent with our dividend policy, the board declared a quarterly dividend of $1.01 per share with respect to the December 2025 quarter, along with a $0.57 year-end special dividend.
C.J. Daley: Those gains, which are excluded from our non-GAAP earnings, provide capital to support dividends, as well as future growth through reinvestment in new products, GP investment in private funds, or acquisitions. Our balance sheet remains a source of strength. We ended the year with approximately $214 million of cash and a conservatively leveraged capital structure at approximately 0.4 times leverage. Importantly, our $100 million revolver remains fully undrawn, providing additional liquidity and downside protection. The result, we are in a position to return capital to shareholders on a consistent and predictable basis while maintaining the flexibility to invest in the business. Consistent with our dividend policy, the board declared a quarterly dividend of $1.01 per share with respect to the December 2025 quarter, along with a $0.57 year-end special dividend.
Speaker #2: Gains, those which are excluded from our non-GAAP earnings, provide capital to support dividends, as well as future growth through reinvestment in new products.
Speaker #2: GP investment in private funds or acquisitions. Our balance sheet remains a source of strength. We ended the year with approximately $214 million of cash and a conservatively leveraged capital structure at approximately 0.4 times leverage.
Speaker #2: Importantly , our $100 million revolver remains fully undrawn , providing additional liquidity and downside protection . The result ? We are in a position to return capital to shareholders on consistent a and predictable While basis .
Speaker #2: Flexibility to invest in the business consistent with our dividend policy, the Board declared a quarterly dividend of $1.01 per share, with respect to the December 2025 quarter, along with a $0.57.
C.J. Daley: In total, dividends declared with respect to 2025 cash generation were $3.87 per share, representing a 98% payout ratio relative to adjusted earnings and an 11% increase versus dividends declared on 2024 cash generation. Year-end special dividend was 14% higher than the prior year, reflecting stronger earnings and cash generation. Based on our stock price on December 31, this equates to a dividend yield of 9.5%. Importantly, even after funding the quarterly and special dividends and our near-term growth initiatives, including Grandview, we retain approximately $80 million of excess capital to fund organic growth and explore potential M&A opportunities. Overall, our capital structure is intentionally designed to be durable through market cycles, combining strong cash flows and liquidity, modest leverage, and a variable cost model that generates attractive margins.
C.J. Daley: In total, dividends declared with respect to 2025 cash generation were $3.87 per share, representing a 98% payout ratio relative to adjusted earnings and an 11% increase versus dividends declared on 2024 cash generation. Year-end special dividend was 14% higher than the prior year, reflecting stronger earnings and cash generation. Based on our stock price on December 31, this equates to a dividend yield of 9.5%. Importantly, even after funding the quarterly and special dividends and our near-term growth initiatives, including Grandview, we retain approximately $80 million of excess capital to fund organic growth and explore potential M&A opportunities. Overall, our capital structure is intentionally designed to be durable through market cycles, combining strong cash flows and liquidity, modest leverage, and a variable cost model that generates attractive margins.
Speaker #2: Year end special dividend . In total dividends declared . With respect to 2025 , cash generation were $3.87 per share , representing a 98% payout ratio relative to adjusted earnings and an 11% increase dividends declared on 2024 .
Speaker #2: Cash versus generation . special Year end dividend was the 14% higher than prior year , reflecting stronger earnings and cash generation . Based on our stock price on December 31st .
Speaker #2: This equates to a dividend yield 9.5% . Importantly , even after funding the quarterly and special dividends and our near initiatives , term growth including Grandview , we retain approximately $80 million of excess capital to fund growth and organic explore potential M&A opportunities .
Speaker #2: Overall, our capital structure is intentionally designed to be durable through market cycles, with strong cash flows and liquidity, combining modest leverage and a variable cost model that generates attractive margins.
C.J. Daley: Looking ahead to 2026, our board approved the 2026 annual long-term incentive award of approximately $72 million, consisting of $51 million of cash-based franchise capital awards, and $21 million of restricted stock awards. Consistent with our long-standing philosophy of retaining investment talent, the vast majority of the awards were awarded to our investment professionals. The result of the 2026 grant, we expect long-term incentive amortization expense to be approximately $85 million for 2026, excluding mark-to-market impacts. The acquisition of Grandview closed on 2 January, and is expected to have an immaterial impact on our 2026 earnings. We expect that the acquisition will be mildly accretive to earnings per share after the final closing of Grandview's next flagship closed-end drawdown fund.
C.J. Daley: Looking ahead to 2026, our board approved the 2026 annual long-term incentive award of approximately $72 million, consisting of $51 million of cash-based franchise capital awards, and $21 million of restricted stock awards. Consistent with our long-standing philosophy of retaining investment talent, the vast majority of the awards were awarded to our investment professionals. The result of the 2026 grant, we expect long-term incentive amortization expense to be approximately $85 million for 2026, excluding mark-to-market impacts. The acquisition of Grandview closed on 2 January, and is expected to have an immaterial impact on our 2026 earnings. We expect that the acquisition will be mildly accretive to earnings per share after the final closing of Grandview's next flagship closed-end drawdown fund.
Speaker #2: Looking ahead to 2026 , our board approved the 2026 annual long term Incentive Award of approximately $72 million . Consisting of 51 million of cash based franchise capital awards and $21 million of restricted stock awards .
Speaker #2: With our Assistant's longstanding philosophy of retaining investment talent, the vast majority of the awards were awarded to our investment professionals.
Speaker #2: The of grant , expect long term incentive amortization expense to be approximately $85 million for 2026 , excluding mark to market impacts . The acquisition of Grandview closed on January 2nd , as expected to have an immaterial impact on our 2026 earnings .
Speaker #2: We expect that the acquisition will be accretive to earnings per share after the final closing of Grandview's next flagship closed end draw down fund , including approximately $20 million of increased fixed expenses from the long term incentive compensation grant and the addition of Grandview expenses .
C.J. Daley: Including approximately $20 million of increased fixed expenses from the long-term incentive compensation grant and the addition of Grandview expenses, fixed expenses are expected to increase low single digits in 2026. Low single-digit increase primarily reflects merit-based salary increases and inflationary market data and technology costs. As a reminder, we estimate our fixed compensation and benefits expenses will be approximately $6 million higher in Q1 2026 compared to Q4 2025. In closing, we believe our long-standing investment-led culture, disciplined allocation of resources, capital, and expanding multi-asset platform positions us well to continue to compound wealth for our clients and shareholders over the long term. I will now turn the call back to the operator.
C.J. Daley: Including approximately $20 million of increased fixed expenses from the long-term incentive compensation grant and the addition of Grandview expenses, fixed expenses are expected to increase low single digits in 2026. Low single-digit increase primarily reflects merit-based salary increases and inflationary market data and technology costs. As a reminder, we estimate our fixed compensation and benefits expenses will be approximately $6 million higher in Q1 2026 compared to Q4 2025. In closing, we believe our long-standing investment-led culture, disciplined allocation of resources, capital, and expanding multi-asset platform positions us well to continue to compound wealth for our clients and shareholders over the long term. I will now turn the call back to the operator.
Speaker #2: Fixed expenses are expected to increase low single digits in 2026. The low single digit increase primarily reflects merit-based salary increases and inflationary market data and technology costs.
Speaker #2: As a reminder, we estimate our fixed benefits expenses will be approximately $6 million higher in the first quarter of 2026 compared to the fourth quarter of 2025.
Speaker #2: In closing, we believe our long-standing investment-led culture, disciplined allocation of resources and capital, and expanding multi-asset platform position us well to continue to compound wealth for our clients and shareholders over the long term.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit your questions to two in order to allow time for other questions. At this time, we will pause momentarily to assemble our roster. The first question comes from Bill Katz with TD Cowen. Please go ahead.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit your questions to two in order to allow time for other questions. At this time, we will pause momentarily to assemble our roster. The first question comes from Bill Katz with TD Cowen. Please go ahead.
Speaker #2: Now I will turn the call back to the operator.
Speaker #3: We will begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad.
Speaker #3: If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit your questions to two.
Speaker #3: In order to allow time for others to ask questions at this time, we will pause and assemble our roster momentarily. The first question comes from Bill Katz with TD.
William Raymond Katz: Okay, thank you very much for taking the questions. Maybe all things Grandview to get started. It's probably a cluster of questions here. Maybe it counts for my first question, so if you don't mind. One, the AUM was a fairly lower level than I think maybe many of us were anticipating. Appreciate the close a little earlier. Maybe you could sort of explain why that happened. And then secondly, as you mentioned, in terms of the accretion guidance looking ahead, how do we think about maybe the timeline for the next flagship fund? And maybe what was the previous size of the fund, as we can sort of try to layer that to our models? Thank you.
Bill Katz: Okay, thank you very much for taking the questions. Maybe all things Grandview to get started. It's probably a cluster of questions here. Maybe it counts for my first question, so if you don't mind. One, the AUM was a fairly lower level than I think maybe many of us were anticipating. Appreciate the close a little earlier. Maybe you could sort of explain why that happened. And then secondly, as you mentioned, in terms of the accretion guidance looking ahead, how do we think about maybe the timeline for the next flagship fund? And maybe what was the previous size of the fund, as we can sort of try to layer that to our models? Thank you.
Speaker #3: Please go ahead .
Speaker #4: Okay. Thank you very much for taking the questions. Maybe I'll start with all things Grandview to get started. It's probably a cluster of questions here.
Speaker #4: Maybe a question. So, if accounts for my first—you don't mind, one—the AUM was at a fairly lower level than I think many of us maybe were anticipating.
Speaker #4: the closing Appreciate earlier . Maybe of you could sort explain why that happened . And then secondly , as you mentioned , in terms of the looking accretion ahead , how do we think about maybe the timeline for the next fund and maybe what flagship was the previous size of the fund , as guidance , that through our models .
C.J. Daley: Yeah. Hey, Bill, I'll start. The AUM was down because in the fourth quarter, there was some realizations on some properties in the first fund, the Grandview Fund I, which is fully invested in the harvesting phase. So there were, you know, realized gains as well as distributions out to LPs, which is a good thing.
C.J. Daley: Yeah. Hey, Bill, I'll start. The AUM was down because in the fourth quarter, there was some realizations on some properties in the first fund, the Grandview Fund I, which is fully invested in the harvesting phase. So there were, you know, realized gains as well as distributions out to LPs, which is a good thing.
Speaker #4: Thank you .
Speaker #2: Yeah . Hey , I'll . The AUM was down because in the fourth quarter there was some realizations on start some some properties in fund , the first the Grandview Fund one , which was fully invested in , in harvesting phase .
Speaker #2: So there were , you know , realized gains as well as distribution distributions to LPs , out which is a good thing .
Jason Gottlieb: And Bill, on your question regarding Fund III. Fund III was about $150 million in committed assets. They're almost through the investment period there. And so, you know, that's obviously a lower bar than what we're certainly expecting in Fund IV, which we're gonna be actively pursuing, as I'd mentioned in our prepared commentary. This will, this will very much be a goal of ours, a top priority of the management teams as well as Grandview's to build out Fund IV, which we're effectively launching, you know, as we speak. And so we expect that to build throughout the course of the year.
Jason Gottlieb: And Bill, on your question regarding Fund III. Fund III was about $150 million in committed assets. They're almost through the investment period there. And so, you know, that's obviously a lower bar than what we're certainly expecting in Fund IV, which we're gonna be actively pursuing, as I'd mentioned in our prepared commentary. This will, this will very much be a goal of ours, a top priority of the management teams as well as Grandview's to build out Fund IV, which we're effectively launching, you know, as we speak. And so we expect that to build throughout the course of the year.
Speaker #1: And Bill , on your question regarding fund , fund three , three was fund about 150 million in in in raised committed in assets .
Speaker #1: They're almost through the investment period there. And so, you know, that's obviously a lower bar than what we're certainly expecting in Q4, which we're going to be actively pursuing.
Speaker #1: As mentioned I in , in prepared commentary our , this will this will very much be a goal of ours , a top priority of the management teams as well as grandview's to build out fund for which were effectively launching , you know , as we speak .
Jason Gottlieb: We hope to have a first close sometime in the, you know, early to mid part of the summer, which will be a good indication as to, you know, how we're tracking. But we do expect it to be significantly higher than their last fund launch, which was Fund III.
Jason Gottlieb: We hope to have a first close sometime in the, you know, early to mid part of the summer, which will be a good indication as to, you know, how we're tracking. But we do expect it to be significantly higher than their last fund launch, which was Fund III.
Speaker #1: And so we expect that to build throughout the course of the year . We hope to have a first close sometime in the , you know , early to mid part of the summer , which will be a good indication as to , you know , how we're how we're tracking .
William Raymond Katz: Great. Thank you for that. And then just sticking with, I was encouraged by some of your comments in the press release and in your prepared commentary. I was just sort of leaning into the M&A opportunity. I was wondering if you could maybe expand on your commentary a little bit, just sort of where you're seeing the greatest receptivity? How is the portfolio potentially seasoning off maybe three months ago? And then just given just everything that's going on in the market, how are you sort of seeing, like, the bid-ask spread on expectations around purchase price? Thank you.
Bill Katz: Great. Thank you for that. And then just sticking with, I was encouraged by some of your comments in the press release and in your prepared commentary. I was just sort of leaning into the M&A opportunity. I was wondering if you could maybe expand on your commentary a little bit, just sort of where you're seeing the greatest receptivity? How is the portfolio potentially seasoning off maybe three months ago? And then just given just everything that's going on in the market, how are you sort of seeing, like, the bid-ask spread on expectations around purchase price? Thank you.
Speaker #1: But we do expect it to be significantly higher than their last fund, their launch, which was fund three.
Speaker #4: Great. Thank you for that. And then just with 'encouraged by,' I was sticking some of your comments in the press release and in your prepared commentary.
Speaker #4: I was just sort of leaning into the M&A opportunity. I was wondering if you could maybe expand on your commentary a little bit—just sort of where you're seeing the greatest receptivity.
Speaker #4: How is the portfolio potentially seasoning for maybe, ago, three months, and then just given everything that's going on in the market, how are you?
Jason Gottlieb: Yeah. So maybe I'll just talk a little bit about the you know, the future pipeline. You know, there's a couple of things that I would highlight. You know, we're clearly not exclusively focused on M&A. We're really letting the talent drive the outcome here. And certainly, there's asset classes where we have a you know, an emphasis in terms of where we're seeking opportunity. And I would continue to focus on the areas that you know, you would expect. Private credit is one where we've been reasonably active, both in the form of lift-out and the potential for M&A. Private equity in the form of secondaries has been an area that we remain pretty active.
Jason Gottlieb: Yeah. So maybe I'll just talk a little bit about the you know, the future pipeline. You know, there's a couple of things that I would highlight. You know, we're clearly not exclusively focused on M&A. We're really letting the talent drive the outcome here. And certainly, there's asset classes where we have a you know, an emphasis in terms of where we're seeking opportunity. And I would continue to focus on the areas that you know, you would expect. Private credit is one where we've been reasonably active, both in the form of lift-out and the potential for M&A. Private equity in the form of secondaries has been an area that we remain pretty active.
Speaker #4: You're sort of seeing, like, the bid-ask spread on expectations price around where you purchase.
Speaker #1: Yeah . So maybe I'll just talk talk a little bit about the , you know , the future pipeline . You know , there's there's a couple of things that I would I would highlight , you know we're clearly not exclusively focused on on M&A .
Speaker #1: We're we're really letting the , the talent drive the the outcome here . certainly there's there's classes asset where we have a And , you know , an emphasis terms of in where we're where we're seeking opportunity .
Speaker #1: And I would I would continue to focus on the areas that , you know , you would you expect would credit is private reasonably active , both in the form of lift out and the potential for M&A , private equity in the form of secondaries has been an area that we remain pretty active .
Jason Gottlieb: We've seen some really interesting idiosyncratic opportunities within equity that has more recently come back. This is, you know, one in particular that we've been talking about five or six years ago. We were very excited about it. There was a little bit of a hesitation, I think, more on their part, just due to, you know, where they were in their career and what they wanted to achieve and get accomplished before they did something more entrepreneurial. But we're, you know, now engaged with them, and we're talking. And another one in particular that is interesting is just the potential to broaden out our credit platform, not necessarily just purely in privates, but also on the public side as well as the hybrid side.
Jason Gottlieb: We've seen some really interesting idiosyncratic opportunities within equity that has more recently come back. This is, you know, one in particular that we've been talking about five or six years ago. We were very excited about it. There was a little bit of a hesitation, I think, more on their part, just due to, you know, where they were in their career and what they wanted to achieve and get accomplished before they did something more entrepreneurial. But we're, you know, now engaged with them, and we're talking. And another one in particular that is interesting is just the potential to broaden out our credit platform, not necessarily just purely in privates, but also on the public side as well as the hybrid side.
Speaker #1: We've seen some really interesting , idiosyncratic opportunities within equity that is that is more recently back . come This is , you know , one in particular been talking that we've about ago .
Speaker #1: were We very excited about there was a little bit of a think hesitation . I their more on part just due to , you know , where they were in their career and what they wanted to achieve and get accomplished before they did more something entrepreneurial .
Speaker #1: But we're you know , now engaged with we're them and we're we're talking and with another one in particular that is interesting potential the to broaden is just out our , our credit platform , not just necessarily purely in private , but also on the , the public side as well as the hybrid side .
Jason Gottlieb: I would go back to some of the comments I made around Grandview, and, you know, most of their transactions are off-market. And I think that, you know, what we saw with Grandview, which was an off-market transaction, I think that that will continue to be a more fertile hunting ground for us. The transactions that are being, you know, shown and prominently shopped are hard for us to really get excited about. They, those tend to be more about dollars and cents as opposed to investments, and we really need to just stay true to who we are and focus on the investment side. But I, you know, the other, the last thing I would say about the pipeline, and it goes back to Grandview.
Jason Gottlieb: I would go back to some of the comments I made around Grandview, and, you know, most of their transactions are off-market. And I think that, you know, what we saw with Grandview, which was an off-market transaction, I think that that will continue to be a more fertile hunting ground for us. The transactions that are being, you know, shown and prominently shopped are hard for us to really get excited about. They, those tend to be more about dollars and cents as opposed to investments, and we really need to just stay true to who we are and focus on the investment side. But I, you know, the other, the last thing I would say about the pipeline, and it goes back to Grandview.
Speaker #1: would I I would go back to some of the comments I made around Grandview and , you of their transactions know , most are off market .
Speaker #1: And I think that , you know , what we saw with Grandview , which was an off market transaction , I think that that will continue to be a more fertile hunting ground for us .
Speaker #1: The transactions that are being , you know , shown and prominently shopped are , are hard for us to really get excited about .
Speaker #1: Those tend to be more about dollars and cents as opposed to investments. And we really need to just stay true to who we are and focus on the investment side.
Jason Gottlieb: You know, we're excited about Grandview for all of the reasons we're excited about the prior 11 teams. What's great about Grandview is they already are a fully functioning investment platform. It's not like we have to build something. The foundation's been laid. The team has been working together for 20-plus years. They have had great deal of investment success, and so it's really up to us to collectively work with them to build in some and layer in some growth. That's different from when you go into a lift-out, where you have to really drop all your pencils and really focus on everything that's required to make a team successful.
Jason Gottlieb: You know, we're excited about Grandview for all of the reasons we're excited about the prior 11 teams. What's great about Grandview is they already are a fully functioning investment platform. It's not like we have to build something. The foundation's been laid. The team has been working together for 20-plus years. They have had great deal of investment success, and so it's really up to us to collectively work with them to build in some and layer in some growth. That's different from when you go into a lift-out, where you have to really drop all your pencils and really focus on everything that's required to make a team successful.
Speaker #1: But you know , the other the last thing I would say about the pipeline , and it goes back to Grandview , you know , we we're excited about Grandview for all of the reasons we're excited about the the prior 11 teams .
Speaker #1: And what's great about Grandview—they already are a fully functioning investment platform. It's not like we have to build something. The foundation has been laid.
Speaker #1: The team has been working together for years . 20 plus They have had great deal of investment , success . And so it's really us to collect , to collectively work with them , to , to , to build in some and layer in some growth .
Speaker #1: And so that's a , that's different from when you when you go into a lift out where you have to all your pencils and really really drop focus on everything that's required to make a team successful .
Jason Gottlieb: And so, you know, while we're still gonna be there and do that, I think there's less that's required of the middle of the firm, given that this is a, you know, this is a team that's operating at a high level already.
Jason Gottlieb: And so, you know, while we're still gonna be there and do that, I think there's less that's required of the middle of the firm, given that this is a, you know, this is a team that's operating at a high level already.
Speaker #1: And so, you, while—while, you know, we're still going to be there and do that, I think there's less that's required of the firm.
William Raymond Katz: Thank you for taking both questions.
Bill Katz: Thank you for taking both questions.
Speaker #1: Given that this is middle of the year, you know, this is a team that's operating at a high level already.
Operator: The next question comes from Alex Blostein with Goldman Sachs. Please go ahead.
Operator: The next question comes from Alex Blostein with Goldman Sachs. Please go ahead.
Speaker #4: Thank you for taking both questions .
Anthony Jameek Corbin: Hey, good afternoon. This is Anthony on for Alex. Maybe just one two-part question on the International Value strategy. So this has been kind of one of the top flowing strategies at APM for a while now, yet we saw another quarter of elevated outflows, despite what seems like an industry kind of rotation out of growth and into value. So what's driving this recent weakness, and how have you seen kind of client demand change recently? Thanks.
Anthony Corbin: Hey, good afternoon. This is Anthony on for Alex. Maybe just one two-part question on the International Value strategy. So this has been kind of one of the top flowing strategies at APM for a while now, yet we saw another quarter of elevated outflows, despite what seems like an industry kind of rotation out of growth and into value. So what's driving this recent weakness, and how have you seen kind of client demand change recently? Thanks.
Speaker #3: The question next comes from Alex Blostein with Goldman Sachs. Go ahead, please.
Speaker #5: Hey good afternoon . This is Anthony on for Alex . Maybe just one two part question on the international value strategy . So this has been kind of one of the top flowing strategies at APM for a while now .
Speaker #5: Yet we saw another quarter of elevated outflows, despite what seems like an industry-type rotation out of growth and into value.
Speaker #5: So what's driving this recent weakness, and how have you seen kind of client demand change recently? Thanks.
Jason Gottlieb: Hey, Anthony, it's Jason. I wouldn't put too much emphasis on the elevation of the outflows. I think it's primarily due to the fact that, you know, David and the team have just continued to deliver really exceptional absolute returns, even in the face of a, you know, challenging market for them. They continue to produce great absolute returns with a slight relative headwind. So we haven't seen anything notable or in particular that, you know, gives us pause or concern or certainly David and the team. There's been some institutional reductions, just largely due to the impact of the equities book of several of our clients just outperforming. And so we're getting a little bit of that, you know, rebalance flow that you naturally expect.
Jason Gottlieb: Hey, Anthony, it's Jason. I wouldn't put too much emphasis on the elevation of the outflows. I think it's primarily due to the fact that, you know, David and the team have just continued to deliver really exceptional absolute returns, even in the face of a, you know, challenging market for them. They continue to produce great absolute returns with a slight relative headwind. So we haven't seen anything notable or in particular that, you know, gives us pause or concern or certainly David and the team. There's been some institutional reductions, just largely due to the impact of the equities book of several of our clients just outperforming. And so we're getting a little bit of that, you know, rebalance flow that you naturally expect.
Speaker #1: Yeah I don't . Hey Anthony it's Jason I wouldn't I wouldn't put too much emphasis on the the elevation , the elevation of the outflows .
Speaker #1: I think it's primarily due to the fact that , you know , David and the team have just continued to deliver really exceptional absolute returns , even in the , you know , the face of a challenging market for them .
Speaker #1: They continue to produce great , absolute returns with a slight relative headwind . So we haven't we haven't seen anything notable or in particular that gives us pause or concern or certainly David and the team .
Speaker #1: There have been some institutional reductions, just largely due to the impact of the equities book of several of our clients—just outperforming. And so we're getting a little bit of that rebalanced flow that you naturally expect.
Jason Gottlieb: You know, we would expect some of that to continue to happen throughout the course of the first quarter in light of, you know, how strong markets were globally, especially ex-US. That's, there's nothing that we're seeing in the trends or there's nothing underlying that, you know, gives us concern or something that, you know, suggests that there's an issue on the horizon.
Jason Gottlieb: You know, we would expect some of that to continue to happen throughout the course of the first quarter in light of, you know, how strong markets were globally, especially ex-US. That's, there's nothing that we're seeing in the trends or there's nothing underlying that, you know, gives us concern or something that, you know, suggests that there's an issue on the horizon.
Speaker #1: And , you know , we would expect some of that to continue to happen throughout the the course of the first quarter . In light of , you how strong markets were globally , especially ex-US .
Speaker #1: So that that's there's there's there's nothing that we're seeing in the there's nothing trends or underlying that , you know , we us concern or that gives something that suggests that there's , you know , an issue on the horizon .
[Analyst] (Aiera): Got it. Thanks.
Anthony Corbin: Got it. Thanks.
Operator: The next question comes from John Dunn with Evercore ISI. Please go ahead.
Operator: The next question comes from John Dunn with Evercore ISI. Please go ahead.
Speaker #5: Got it . Thanks .
John Joseph Dunn: Hi, I wanted to maybe get an update on what you're seeing as far as interest in and demand for non-US strategies, just given, you know, what a contributor is to your AUM base.
John Dunn: Hi, I wanted to maybe get an update on what you're seeing as far as interest in and demand for non-US strategies, just given, you know, what a contributor is to your AUM base.
Speaker #3: The next question comes from John Donne with Evercore ISI. Please go ahead.
Speaker #6: Hi. I wanted to maybe get an update on what you're seeing as far as interest in and demand for non-U.S. strategies, just given what a, you know, contributor it is to your AUM base.
Jason Gottlieb: Yes. Hi, hey, John. Yeah, it's a good question. You know, I'd say there's probably 4. There's really 4 areas that I think there's gonna be some interesting opportunities for our platform, and I think they align directly to your question. So, you know, right now, I think our AUM is 70% ex-US, plus or minus a few percent. And, you know, when you think about the big trends that we're seeing, number one, we think there's a reemergence of emerging markets allocations coming on the horizon. We spoke about something last quarter, which was we were aligning some sales efforts and some sales focus and running a campaign specifically in emerging markets.
Jason Gottlieb: Yes. Hi, hey, John. Yeah, it's a good question. You know, I'd say there's probably 4. There's really 4 areas that I think there's gonna be some interesting opportunities for our platform, and I think they align directly to your question. So, you know, right now, I think our AUM is 70% ex-US, plus or minus a few percent. And, you know, when you think about the big trends that we're seeing, number one, we think there's a reemergence of emerging markets allocations coming on the horizon. We spoke about something last quarter, which was we were aligning some sales efforts and some sales focus and running a campaign specifically in emerging markets.
Speaker #1: Yes . Hey , John . it's a it's a Yeah , good question . You know , I'd say there's there's probably four there's really four areas that I think the , that I think there's going to be some interesting opportunities for , for our platform .
Speaker #1: And I think they align directly to your question. So, you know, right now I think our AUM is 70% U.S., plus or minus a few percent.
Speaker #1: And you know, when you think about the big trends that we're seeing, number one, we think there's a reemergence of emerging markets allocations coming on the horizon.
Speaker #1: We spoke about something last quarter, which was we were aligning some sales efforts and some sales focus, and running a campaign specifically in emerging markets.
Jason Gottlieb: And while it was early days, and it remains extremely early days, we're seeing some green shoots and some direct allocations coming out of that, coming out of that effort. I think we raised north of $1 billion in, you know, the 5-ish plus months that we enacted that campaign with. You know, we have four very distinct strategies that are able to capture that, and all four of them had over $100 million in net flows over that very short period of time. We fully expect that that campaign will be in force throughout 2026, as we see the pipeline grow and build. And so we're very much excited about that area in particular.
Jason Gottlieb: And while it was early days, and it remains extremely early days, we're seeing some green shoots and some direct allocations coming out of that, coming out of that effort. I think we raised north of $1 billion in, you know, the 5-ish plus months that we enacted that campaign with. You know, we have four very distinct strategies that are able to capture that, and all four of them had over $100 million in net flows over that very short period of time. We fully expect that that campaign will be in force throughout 2026, as we see the pipeline grow and build. And so we're very much excited about that area in particular.
Speaker #1: And while it was early days and it remains extremely early days , we're seeing some green shoots and some direct allocations coming out of that , coming out of that effort , I think we raised north $1 billion in of five ish the that plus we we enacted that campaign with , you know , we have four very distinct strategies that are able to capture that in all , four of them had over in net flows $100 million in over that very short period of time .
Speaker #1: We fully expect that that campaign will be in force throughout 2026 as we as we see the pipeline grow and build . And so we're we're very much excited about that , that area in particular , you rightly point out the international markets and I would I out expand that to global as well .
Jason Gottlieb: You rightly point out the international markets, and I would expand that out to global as well. I think a lot of people don't wanna, you know, give up the ghost on US, and the beauty of global clearly gives you the ability to toggle between US and non-US. And we've had a great deal of success in our global franchises. So Global Value, as I've mentioned in my prepared comments, has just shot the lights out performance-wise. Our Global Equity team with Mark Yockey also had an outstanding year. They—I think they produced a 47% return in their Global Equity strategy. And then underneath that, we also have some international capabilities that we're excited about.
Jason Gottlieb: You rightly point out the international markets, and I would expand that out to global as well. I think a lot of people don't wanna, you know, give up the ghost on US, and the beauty of global clearly gives you the ability to toggle between US and non-US. And we've had a great deal of success in our global franchises. So Global Value, as I've mentioned in my prepared comments, has just shot the lights out performance-wise. Our Global Equity team with Mark Yockey also had an outstanding year. They—I think they produced a 47% return in their Global Equity strategy. And then underneath that, we also have some international capabilities that we're excited about.
Speaker #1: I think a lot of people don't want to , you know , give ghost on up the us and the beauty of global clearly gives you the ability to toggle between us and non us .
Speaker #1: And we've had a great deal of success in our global franchises . So global value , as I my mentioned in prepared comments , has just lights out performance wise .
Speaker #1: Our global equity team with Mark Yockey also had a outstanding year . They I think they produced a 47% return in their in their global equity strategy .
Jason Gottlieb: You know, Mark Yockey, again, produced a really outstanding return in 2025, which is on the heels of all outstanding returns in prior years as well. And so his record is, you know, really compelling. We're starting to see some, you know, real activity in that strategy as well. And so, you know, we think the engagement in international will remain elevated, and, you know, we expect that several of our strategies will be aligned to at least have conversations with the clients about the benefits of how they operate in those markets. Some that are maybe a little less aligned to your question, but still relevant to, I think, the trends that we're seeing in our conversations.
Jason Gottlieb: You know, Mark Yockey, again, produced a really outstanding return in 2025, which is on the heels of all outstanding returns in prior years as well. And so his record is, you know, really compelling. We're starting to see some, you know, real activity in that strategy as well. And so, you know, we think the engagement in international will remain elevated, and, you know, we expect that several of our strategies will be aligned to at least have conversations with the clients about the benefits of how they operate in those markets. Some that are maybe a little less aligned to your question, but still relevant to, I think, the trends that we're seeing in our conversations.
Speaker #1: And then underneath that we also have some international capabilities that we're we're excited about . Mark Yockey again produced a really outstanding return in 2025 , which is on the heels of all outstanding in prior returns years as well .
Speaker #1: And so his record is , you know , really compelling . We're starting to see some , you know , real activity in in that strategy as well .
Speaker #1: And so , you know , we think the engagement in remain international will . And you know , we expect that several of our strategies will be aligned to at least have conversations with the clients about the benefits of of how they operate in , in those markets , some that are maybe a little less aligned to , to your question , but still relevant to , I think the trends that we're seeing in our conversations , we still think that there's a long way to go in credit , and you're seeing that in all of our and all of our areas where we have exposure .
Jason Gottlieb: We still think that there's a long way to go in credit, and you're seeing that in all of our areas where we have exposure. The High Income team with Brian Krug and his development of Custom Credit Solutions, we've seen significant uptake and interest from our institutional marketplace, where they're really designing a bespoke solution around a specific need, and Brian is able to accommodate those. We're seeing really good uptake there.
Jason Gottlieb: We still think that there's a long way to go in credit, and you're seeing that in all of our areas where we have exposure. The High Income team with Brian Krug and his development of Custom Credit Solutions, we've seen significant uptake and interest from our institutional marketplace, where they're really designing a bespoke solution around a specific need, and Brian is able to accommodate those. We're seeing really good uptake there.
Speaker #1: So the high income team with Krug and his team, the Brian development of custom credit solutions, we've seen significant uptake in interest from our institutional marketplace, where they're really designing a bespoke solution around a specific need.
Jason Gottlieb: One thing that's been sort of flying a little bit under the radar screen for quite a long time, but we're starting to see some uptake as well, is our-- we have a Floating Rate fund that is top quartile on a 1-year, top quartile on a 3-year, that's being run out of, you know, Brian's franchise. We're starting to see some, you know, interesting, opportunities coming from, from that. And then when you look at the cross-section of emerging markets and credit with our EMsights team, they're firing on all cylinders. Emerging Markets Debt Opportunities, emerging market local opportunities, continuing to, you know, really deliver outcomes, to the upside, both in absolute as well as excess returns. And so they're at the, intersection of a couple of interesting themes for us.
Jason Gottlieb: One thing that's been sort of flying a little bit under the radar screen for quite a long time, but we're starting to see some uptake as well, is our-- we have a Floating Rate fund that is top quartile on a 1-year, top quartile on a 3-year, that's being run out of, you know, Brian's franchise. We're starting to see some, you know, interesting, opportunities coming from, from that. And then when you look at the cross-section of emerging markets and credit with our EMsights team, they're firing on all cylinders. Emerging Markets Debt Opportunities, emerging market local opportunities, continuing to, you know, really deliver outcomes, to the upside, both in absolute as well as excess returns. And so they're at the, intersection of a couple of interesting themes for us.
Speaker #1: And Brian is able to accommodate those . So we're seeing really good uptake there . One thing that's been sort of flying a little bit under the radar screen for quite a long time , but we're starting to see some uptake as well as our we have a floating rate fund that is top quartile on a one year , top quartile on a three year .
Speaker #1: That's being run out of , Brian's franchise . We're starting to see some , you know , interesting opportunities coming from from that .
Speaker #1: That's being run out of , Brian's franchise . We're starting to see some , you know , interesting opportunities coming from from And then when you look at the cross section of emerging markets and credit with our insights team , they're firing on all cylinders .
Speaker #1: Emerging market debt opportunities , emerging market , local opportunities , continuing to , you know , really deliver outcomes to the upside , both in absolute as well as excess returns .
Jason Gottlieb: And then, you know, lastly, something that we've talked about for quite a while, which is alternatives. Certainly Grandview is gonna play a very important current and future role in the growth and development of our alternatives platform. And then, you know, when you think about what's going on again at EMSITES as well as in our High Income team, EMSITES, the Global Unconstrained strategy, through the end of the year, I think we raised about, you know, $500 or 600 million in assets. And, you know, this again is a top-quartile performer, with a very, very differentiated return profile that, you know, people are really, it's really resonating with, our intermediate wealth space, as well as our institutional space.
Jason Gottlieb: And then, you know, lastly, something that we've talked about for quite a while, which is alternatives. Certainly Grandview is gonna play a very important current and future role in the growth and development of our alternatives platform. And then, you know, when you think about what's going on again at EMSITES as well as in our High Income team, EMSITES, the Global Unconstrained strategy, through the end of the year, I think we raised about, you know, $500 or 600 million in assets. And, you know, this again is a top-quartile performer, with a very, very differentiated return profile that, you know, people are really, it's really resonating with, our intermediate wealth space, as well as our institutional space.
Speaker #1: And so they're at the intersection of a couple of interesting themes for us. And then, you know, lastly, something we’ve talked about for quite a while, which is alternatives.
Speaker #1: Certainly Grandview is going to play a very important current and future the the role in growth and development of our alternatives platform . And then , you know , when you when you think about what's going on again , at M sites as well as in our , our high income team M sites , the global unconstrained strategy through through through the end of the year .
Speaker #1: I think we raised about , you know , 5 or $600 million in assets you know , this again , is a top , top quartile very , differentiated return performer very with a profile that , you know , are really it's really resonating with our intermediated wealth space as well as our institutional space .
Jason Gottlieb: And then lastly, Credit Opportunities, which I cited as a, you know, really strong performer over a, you know, multi-year time horizon, is continuing to see incremental flows, which we would expect to continue in 2026.
Jason Gottlieb: And then lastly, Credit Opportunities, which I cited as a, you know, really strong performer over a, you know, multi-year time horizon, is continuing to see incremental flows, which we would expect to continue in 2026.
Speaker #1: And then lastly , credit opportunities , which I cited , as you know , really strong performer over a multiyear time horizon is continuing to see incremental flows , which we would expect to continue in 2026 .
John Joseph Dunn: ... Got it. And then maybe just because it's been a swing factor for flows lately, maybe could you just give us kind of the puts and takes looking forward of, of the institutional side, particularly by region?
John Dunn: ... Got it. And then maybe just because it's been a swing factor for flows lately, maybe could you just give us kind of the puts and takes looking forward of, of the institutional side, particularly by region?
Speaker #6: Got it . And then maybe just because it's been a swing factor for flows lately , maybe could you just give us kind of the puts and takes looking forward of of the institutional side , particularly by region .
Jason Gottlieb: Yeah, I, I think institutionally, you know, we're, if you look at the regions, I'd say where we're, where we're probably a little bit more of a, a little bit more at risk has probably been more in Europe, in light of some of the regulatory changes that we've, we've talked about for, for quite a while. We, we talked about it in Australia, and it sort of impacted a couple of countries in Europe as well. So the combination of some of the regulatory changes that are occurring, some short, some short-term performance where that is where we have a lot of global exposure, specifically with our Growth team and Global Opportunities.
Jason Gottlieb: Yeah, I, I think institutionally, you know, we're, if you look at the regions, I'd say where we're, where we're probably a little bit more of a, a little bit more at risk has probably been more in Europe, in light of some of the regulatory changes that we've, we've talked about for, for quite a while. We, we talked about it in Australia, and it sort of impacted a couple of countries in Europe as well. So the combination of some of the regulatory changes that are occurring, some short, some short-term performance where that is where we have a lot of global exposure, specifically with our Growth team and Global Opportunities.
Speaker #1: Yeah , I think institutionally , you know , we're if you look at the regions , I'd say where we're , where we're probably a little bit more of a , a little bit more at risk is probably been more in Europe in light of some of the regulatory changes that we've we've talked about for for quite a while .
Speaker #1: We talked about it in sort of impacted countries Australia and it's a couple in in Europe as well , the combination of some of the regulatory changes that are occurring , some short , some short term performance , where that is where we have a lot of global exposure , specifically with our growth team and global opportunities .
Jason Gottlieb: You know, there's going to be, I think, a little bit more of a challenge in, in that region, specifically because of that, where clients are reallocating. You know, the active-passive debate rages, and then you've got that regulatory overhang is, you know, causes it to be a little bit more challenging. But institutionally, in the US marketplace, we are still continuing to see, you know, pretty good opportunities, and it's gonna, it's coming in our emerging markets franchises as well as in our credit franchises. So there's, to your point, there's gonna be some puts and takes, so it's gonna be hard to tell exactly where it all shakes out. But I'd say US is probably a little bit more favorable in that regard, institutionally, relative to non-US.
Jason Gottlieb: You know, there's going to be, I think, a little bit more of a challenge in, in that region, specifically because of that, where clients are reallocating. You know, the active-passive debate rages, and then you've got that regulatory overhang is, you know, causes it to be a little bit more challenging. But institutionally, in the US marketplace, we are still continuing to see, you know, pretty good opportunities, and it's gonna, it's coming in our emerging markets franchises as well as in our credit franchises. So there's, to your point, there's gonna be some puts and takes, so it's gonna be hard to tell exactly where it all shakes out. But I'd say US is probably a little bit more favorable in that regard, institutionally, relative to non-US.
Speaker #1: You know , there's going to be , I think , a little bit more of a challenge in in that region specifically because of that , where clients are reallocating , you know , the active passive debate rages and then you've got that regulatory overhang is , you know , causes it to be a little bit more challenging .
Speaker #1: But institutionally in the in the US marketplace , we are still continuing to see , you know , pretty good opportunities . And it's going to it's coming .
Speaker #1: In our emerging markets franchises as well as in our credit franchises . So there's to your point , there's going to be some puts and takes .
Speaker #1: So it's going to be hard to tell exactly where it all shakes out. But I'd say US is probably a little bit more favorable in that regard.
John Joseph Dunn: Thanks very much.
John Dunn: Thanks very much.
Operator: Again, if you have a question, please press Star, then one. This concludes our question-and-answer session and the Artisan Partners Asset Management Business Update and Fourth Quarter 2025 Earnings call. Thank you. You may now disconnect.
Operator: Again, if you have a question, please press Star, then one. This concludes our question-and-answer session and the Artisan Partners Asset Management Business Update and Fourth Quarter 2025 Earnings call. Thank you. You may now disconnect.
Speaker #1: Institutionally, relative to non-U.S.
Speaker #6: Thanks very much .
Speaker #3: Again , if you have a question , please press star then one . This concludes our question and answer session . And the Artisan Partners Asset Management business update .
