Artisan Partners Q2 2025 slides: AUM grows 8% despite continued outflows

Introduction & Market Context

Artisan Partners Asset Management (NYSE:APAM) presented its second quarter 2025 earnings on July 30, showcasing resilient asset growth despite ongoing client outflows. The asset manager reported assets under management (AUM) of $166.8 billion as of June 30, 2025, representing an 8% increase from the previous quarter and a 10% rise year-over-year.

The company’s stock has performed well in 2025, gaining 25.45% over the past six months to trade at $43.40, according to available market data. This performance comes during a period of leadership transition, with Jason Gottlieb assuming the CEO role from Eric Colson, who moved to Executive Chair.

Quarterly Performance Highlights

Artisan Partners reported Q2 2025 revenue of $282.8 million, up 4.4% from $270.8 million in Q2 2024, driven primarily by higher average AUM. The company maintained a weighted average management fee of 68 basis points, showing only a slight decline from 69 basis points in the prior-year period.

As shown in the following quarterly financial results:

Adjusted operating income reached $89.6 million in Q2 2025, compared to $87.3 million in Q2 2024, while adjusted operating margin decreased slightly to 31.7% from 32.2%. Adjusted net income increased to $67.5 million from $66.0 million year-over-year, with adjusted earnings per share rising to $0.83 from $0.82.

For the first half of 2025, the company’s financial performance showed consistent improvement, with revenue up 4.6% to $559.9 million and adjusted net income increasing to $134.5 million from $127.6 million in the first half of 2024:

Despite the overall growth in assets, Artisan continued to face challenges with client flows. The company reported net client cash outflows of $1.9 billion in Q2 2025, compared to outflows of $1.6 billion in Q2 2024. Year-to-date outflows increased to $4.7 billion from $2.1 billion in the comparable period of 2024.

The quarterly AUM trends illustrate both the growth in total assets and the persistent challenge with client flows:

Asset Allocation and Distribution Channels

Artisan’s AUM is predominantly in equity strategies, which accounted for $156.1 billion (89%) of total assets as of June 30, 2025. However, the company has been diversifying, with fixed income and alternative strategies showing stronger growth rates and more favorable client flows.

The detailed breakdown of AUM by asset class reveals these trends:

Notably, while equity strategies experienced net outflows of $2.4 billion during the quarter, fixed income strategies attracted $0.5 billion in net inflows. Alternative strategies, which command higher fees (79 basis points versus the firm average of 68 basis points), remained stable in terms of client flows.

The company’s growth has been particularly strong in the intermediated wealth channel, which has expanded by 80% over the past five years to reach $105.7 billion, now representing 60% of total AUM:

Business Strategy & Leadership

Artisan Partners has maintained a consistent business philosophy centered on three pillars: being a high value-added investment firm, employing a talent-driven business model, and pursuing thoughtful growth. This approach has guided the company from its founding with a single investment team in 1995 to its current structure with 11 investment teams managing 26 strategies.

The company’s leadership transition in 2025, with Jason Gottlieb succeeding Eric Colson as CEO, represents continuity in this philosophy. In the earnings call, Colson emphasized the firm’s commitment to fostering a talent-driven environment, stating, "We are a high value-added investment firm designed for talent to thrive in a thoughtful growth environment."

Gottlieb reinforced this approach, noting that "We’ll let the talent drive us and guide us," indicating that the company will continue to prioritize investment excellence and autonomous teams.

Investment Performance

Artisan’s business model is supported by strong long-term investment performance across multiple strategies. The presentation highlighted several strategies with top-percentile performance since inception, including the International Value Fund (top 1%) and International Explorer Fund (top 9%).

The following chart demonstrates the consistent outperformance of Artisan’s strategies with track records exceeding 10 years:

The International Value Group, led by David Samra (a Top-3 Finalist for a 2025 U.S. Morningstar Award), has delivered particularly strong results, with average annual value added of 418 basis points since inception:

Financial Position and Shareholder Returns

Artisan maintains a strong balance sheet with $244.9 million in cash and cash equivalents as of June 30, 2025, up from $201.2 million at the end of 2024. The company’s conservative approach to leverage is reflected in its 0.5x leverage ratio, unchanged from year-end 2024.

The company’s balance sheet highlights include:

Artisan has maintained a consistent dividend policy, with regular quarterly dividends supplemented by special dividends when appropriate. In Q2 2025, the company declared a dividend of $0.73 per share, up from $0.71 in Q2 2024:

Forward-Looking Statements

Looking ahead, Artisan Partners is exploring growth opportunities in alternative investments, with interests in real estate, private equity secondaries, and specialized private credit. The company is also focusing on potential new product launches in credit and emerging markets.

According to the earnings call, management expects earnings per share to reach $4.21 in FY2025 and $4.69 in FY2026. With a P/E ratio of 11.77 and strong cash flows, the company appears well-positioned for sustainable growth despite the challenges with client outflows.

The company’s financial model, characterized by high variable costs and stable margins, is designed to provide resilience through market volatility. Management emphasized that this approach "has served us well over time and through periods of market volatility."

While Artisan Partners faces challenges, including continued net client cash outflows and intense competition in the asset management industry, its strong investment performance, diversified product offerings, and disciplined financial approach position it to navigate the evolving market landscape.

Full presentation:

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