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What changed in Artisan Partners Asset Management Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Artisan Partners Asset Management Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+438 added−435 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-22)

Top changes in Artisan Partners Asset Management Inc.'s 2024 10-K

438 paragraphs added · 435 removed · 388 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

84 edited+13 added−7 removed62 unchanged
Biggest changeMid-Cap Value 2,818 April 1, 1999 270 «« Value Income 12 March 1, 2022 (468) Not yet rated International Value Team International Value 40,762 July 1, 2002 570 ««««« International Explorer 247 October 1, 2020 773 Not yet rated Global Value Team Global Value 25,349 July 1, 2007 298 ««« Select Equity 321 March 1, 2020 (324) «« Sustainable Emerging Markets Team Sustainable Emerging Markets 917 July 1, 2006 81 ««« Credit Team High Income 9,407 April 1, 2014 261 ««««« Credit Opportunities 215 July 1, 2017 1,132 Not Applicable Floating Rate 61 January 1, 2022 102 Not yet rated Developing World Team Developing World 3,453 July 1, 2015 655 ««« Antero Peak Group Antero Peak 1,897 May 1, 2017 371 «« Antero Peak Hedge 204 November 1, 2017 (175) Not Applicable EMsights Capital Group Global Unconstrained 313 April 1, 2022 630 Not yet rated Emerging Markets Debt Opportunities 92 May 1, 2022 770 Not yet rated Emerging Markets Local Opportunities 450 August 1, 2022 293 Not applicable Total AUM as of December 31, 2023 150,167 (1) Value-added is the amount, in basis points, by which the average annual gross composite return of each of our strategies has outperformed or underperformed its respective benchmark.
Biggest changeSmall-Mid Growth 6,544 January 1, 2019 298 «««« EMsights Capital Group Global Unconstrained 701 April 1, 2022 656 Not yet rated Emerging Markets Debt Opportunities 1,024 May 1, 2022 803 Not yet rated Emerging Markets Local Opportunities 1,184 August 1, 2022 316 Not Applicable Total AUM as of December 31, 2024 161,208 (1) Value-added is the amount, in basis points, by which the average annual gross composite return of each of our strategies has outperformed or underperformed its respective benchmark.
Certain Artisan Private Funds are regulated as mutual funds under the Mutual Funds Law (as amended) of the Cayman Islands, and the Cayman Islands Monetary Authority has supervisory and enforcement powers to ensure the funds’ compliance with the Mutual Funds Law.
Certain Artisan Private Funds are regulated as mutual funds under the Mutual Funds Law (as amended) of the Cayman Islands. The Cayman Islands Monetary Authority has supervisory and enforcement powers to ensure the funds’ compliance with the Mutual Funds Law.
We compete to attract clients and investors principally on the basis of: • the performance of our investment strategies • the continuity of our investment and distribution professionals • the quality of the service we provide to our clients • the range of investment strategies and vehicles we offer • our brand recognition and reputation within the investing community • the fees we charge for the investment management services we provide We compete in all aspects of our business with a large number of investment management firms, commercial banks, broker-dealers, insurance companies and other financial institutions.
We compete to attract clients and investors principally on the basis of: • the performance of our investment strategies • the continuity of our investment and distribution professionals • the range of investment strategies and vehicles we offer • the quality of the service we provide to our clients • our brand recognition and reputation within the investing community • the fees we charge for the investment management services we provide We compete in all aspects of our business with a large number of investment management firms, commercial banks, broker-dealers, insurance companies and other financial institutions.
We have built relationships with a variety of recruitment partners and community organizations to broaden our candidate pools and increase our access to diverse talent. We actively support associate engagement and development, both formally and informally, and encourage advancement from within the firm.
We have built relationships with a variety of recruitment partners and community organizations to broaden our candidate pools and increase our access to talent from diverse backgrounds. We actively support associate engagement and development, both formally and informally, and encourage advancement from within the firm.
Each of our investment teams manages one or more investment strategies, each of which is designed to have a clearly articulated, consistent and replicable investment process that is well-understood by clients and managed to achieve long-term performance.
Each of our investment teams manages one or more investment strategies, each of which is designed to have a clearly articulated and consistent investment process that is well-understood by clients and managed to achieve long-term performance.
The diagram below depicts our organizational structure as of December 31, 2023: (1) Our employees to whom we have granted equity have entered into a stockholders agreement with respect to all shares of our common stock they have acquired from us and any shares they may acquire from us in the future, pursuant to which they granted an irrevocable voting proxy to a stockholders committee currently consisting of Eric R.
The diagram below depicts our organizational structure as of December 31, 2024: (1) Our employees to whom we have granted equity have entered into a stockholders agreement with respect to all shares of our common stock they have acquired from us and any shares they may acquire from us in the future, pursuant to which they granted an irrevocable voting proxy to a stockholders committee currently consisting of Eric R.
By taking care of our people and fulfilling our fiduciary duty to our clients, we create a waterfall effect that helps generate sustainable financial outcomes for our shareholders over the long term. 12 Table of Contents Our Structure Holding Company Structure We are a holding company and our assets principally consist of our ownership of partnership units of Artisan Partners Holdings, deferred tax assets and cash.
By taking care of our people and fulfilling our fiduciary duty to our clients, we create a waterfall effect that helps generate sustainable financial outcomes for our shareholders over the long term. 11 Table of Contents Our Structure Holding Company Structure We are a holding company and our assets principally consist of our ownership of partnership units of Artisan Partners Holdings, deferred tax assets and cash.
(2) Each class of common units generally entitles its holders to the same economic and voting rights in Artisan Partners Holdings as each other class of common units, except that the Class E common units have no voting rights except as required by law. 13 Table of Contents Available Information Our website address is www.artisanpartners.com.
(2) Each class of common units generally entitles its holders to the same economic and voting rights in Artisan Partners Holdings as each other class of common units, except that the Class E common units have no voting rights except as required by law. 12 Table of Contents Available Information Our website address is www.artisanpartners.com.
We strive to recruit and hire outstanding associates who thrive in broad roles and want the freedom to grow their talents and careers. We are committed to seeking professionals from different backgrounds, experiences and locations to foster creative thinking and differentiated perspectives that remain a pillar of the firm’s culture.
We strive to recruit and hire outstanding associates who thrive in broad roles and want the freedom to grow their talents and careers. We are committed to seeking professionals from different backgrounds, experiences and geographies to foster creative thinking and differentiated perspectives that remain a pillar of the firm’s culture.
We act as investment adviser to the CITs and earn a management fee for providing this service. As of December 31, 2023, CITs represented approximately 5% of our AUM. Certain of our investment strategies are primarily offered through Artisan-sponsored unregistered pooled investment vehicles, referred to as Artisan Private Funds.
We act as investment adviser to the CITs and earn a management fee for providing this service. As of December 31, 2024, CITs represented approximately 5% of our AUM. Certain of our investment strategies are primarily offered through Artisan-sponsored unregistered pooled investment vehicles, referred to as Artisan Private Funds.
This relief is set to expire for foreign financial service providers like us and, as a result, Artisan Partners Limited Partnership or one of its affiliates may need to apply for and obtain a securities license or a new exemption by April 2025.
This relief is set to expire for foreign financial service providers like us and, as a result, Artisan Partners Limited Partnership or one of its affiliates may need to apply for and obtain a securities license or a new exemption by April 2026.
For serving as investment adviser to Artisan Private Funds, we earn a management fee and, for certain funds, are entitled to receive either an allocation of profits or a performance-based fee. As of December 31, 2023, Artisan Private Funds comprised approximately 1% of our AUM.
For serving as investment adviser to Artisan Private Funds, we earn a management fee and, for certain funds, are entitled to receive either an allocation of profits or a performance-based fee. As of December 31, 2024, Artisan Private Funds comprised approximately 1% of our AUM.
The FCA’s rules under this system govern, among other things, capital resources requirements, senior management arrangements, business conduct, interaction with clients, and systems and controls. 9 Table of Contents Artisan Partners Europe is authorized and regulated by the Central Bank of Ireland, which regulates our Irish business activities, including our management of Artisan Global Funds, a family of Ireland-domiciled UCITS funds.
The FCA’s rules under this system govern, among other things, capital resources requirements, senior management arrangements, business conduct, interaction with clients, and systems and controls. Artisan Partners Europe is authorized and regulated by the Central Bank of Ireland, which regulates our Irish business activities, including our management of Artisan Global Funds, a family of Ireland-domiciled UCITS funds.
Our tuition reimbursement program is available to associates who are pursuing applicable undergraduate and graduate degrees or certifications or licenses relevant to the business. Our diversity, equity and inclusion committee champions our DEI initiatives by bringing together a group of individuals with broad representation across the firm, as well as diverse social, regional and cultural identities.
Our tuition reimbursement program is available to associates who are pursuing applicable undergraduate and graduate degrees, certifications and licenses relevant to the business. Our diversity, equity and inclusion committee champions our DEI efforts by bringing together a group of individuals with broad representation across the firm, as well as diverse social, regional and cultural identities.
We may also be subject to U.S. laws and regulations with respect to our distribution or investment management activities in non-U.S. markets, including in jurisdictions that may be considered higher risk. Regulatory reforms in jurisdictions in which we currently operate or invest and expansion of our business into new international jurisdictions, further complicate our compliance efforts.
We may also be subject to U.S. laws and regulations with respect to our distribution or investment management activities in non-U.S. markets, including in jurisdictions that may be considered higher risk. 9 Table of Contents Regulatory reforms in jurisdictions in which we currently operate or invest, and expansion of our business into new international jurisdictions, further complicate our compliance efforts.
Under these laws and regulations, agencies that regulate investment advisers, investment funds and other related entities have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity from conducting business in the event that it fails to comply with such laws and regulations.
Under these laws and regulations, agencies that regulate investment advisers, investment funds and other related entities have broad authority, including the power to limit, restrict or prohibit the regulated entity from conducting business in the event that it fails to comply with such laws and regulations.
As a result, there is a level of uncertainty associated with the regulatory environments in which we operate. Accordingly, the discussion below is general in nature, does not purport to be complete and is current only as of the date of this report. 8 Table of Contents U.S.
As a result, there is a level of uncertainty associated with the regulatory environments in which we operate. Accordingly, the discussion below is general in nature, does not purport to be complete and is current only as of the date of this report. U.S.
These shifts include: ◦ distribution partners becoming more selective and maintaining fewer relationships with investment managers ◦ intermediaries capturing a greater share of inflows via proprietary investment solutions ◦ client demand for new investment vehicles that may be lower fee or more tax efficient 10 Table of Contents In response to these and other headwinds, we have continued to build out our alternatives capabilities and increased degrees of investment freedom within our existing investment strategies.
These shifts include: ▪ distribution partners becoming more selective and maintaining fewer relationships with investment managers ▪ intermediaries capturing a greater share of inflows via proprietary investment solutions ▪ client demand for new investment vehicles that may be lower fee or more tax efficient In response to these and other headwinds, we have continued to build out our alternatives capabilities and increase degrees of investment freedom within our existing investment strategies.
For additional information concerning the competitive risks that we face, see “Risk Factors—Competition and Distribution Risks—The investment management industry is intensely competitive.” 11 Table of Contents Human Capital Resources Since Artisan Partners was founded in 1994, our success as an investment management firm has been predicated on having talented associates throughout the organization in every role, at every level.
For additional information concerning the competitive risks that we face, see “Risk Factors—Competition and Distribution Risks—The investment management industry is intensely competitive and experiencing transformative pressures.” 10 Table of Contents Human Capital Resources Since Artisan Partners was founded in 1994, our success as an investment management firm has been predicated on having talented associates throughout the organization in every role, at every level.
We earn management fees, which are based on the average daily net assets of each Artisan Fund and are paid monthly, for serving as investment adviser to these funds. As of December 31, 2023, Artisan Funds represented approximately 44% of our AUM. We also serve as investment manager of Artisan Global Funds, a family of Ireland-based UCITS funds.
We earn management fees, which are based on the average daily net assets of each Artisan Fund and are paid monthly, for serving as investment adviser to these funds. As of December 31, 2024, Artisan Funds represented approximately 43% of our AUM. We also serve as investment manager of Artisan Global Funds, a family of Ireland-based UCITS funds.
We also maintain relationships with a number of financial advisory firms and broker-dealer advisors that offer our investment products to their clients. These advisors range from relatively small firms to large organizations. As of December 31, 2023, approximately 33% of our AUM were sourced through our intermediary channel.
We also maintain relationships with a number of financial advisory firms and broker-dealer advisors that offer our investment products to their clients. These advisors range from relatively small firms to large organizations. As of December 31, 2024, approximately 35% of our AUM were sourced through our intermediary channel.
As of December 31, 2023, Artisan Global Funds represented approximately 4% of our AUM. Regulatory Environment and Compliance Our business is subject to extensive regulation in the United States at the federal level and, to a lesser extent, the state level, as well as by self-regulatory organizations and regulators located outside the United States.
As of December 31, 2024, Artisan Global Funds represented approximately 5% of our AUM. Regulatory Environment and Compliance Our business is subject to extensive regulation in the United States at the federal level and, to a lesser extent, the state level, as well as by self-regulatory organizations and regulators located outside the United States.
See “Investment Performance and Assets Under Management (AUM) Information Used in this Report” for information regarding the benchmarks used. Value-added for periods less than one year is not annualized.
See “Investment Performance, Client Cash Flows and Assets Under Management (AUM) Information Used in this Report” for information regarding the benchmarks used. Value-added for periods less than one year is not annualized.
In addition, 46% of our AUM were invested in securities denominated in currencies other than the U.S. dollar as of December 31, 2023. Our investments in these non-U.S. securities subject us to certain laws and regulations of the jurisdictions in which the issuer resides or is traded.
In addition, 45% of our AUM were invested in securities denominated in currencies other than the U.S. dollar as of December 31, 2024. Our investments in these non-U.S. securities subject us to certain laws and regulations of the jurisdictions in which the issuer resides or is traded.
As of December 31, 2023, these assets under advisement represented less than 1% of our AUM. Artisan Funds and Artisan Global Funds U.S. investors that do not meet our minimum account size for a separate account, or who otherwise prefer to invest through a mutual fund, can invest in our strategies through Artisan Funds.
As of December 31, 2024, these assets under advisement represented less than 1% of our AUM. 7 Table of Contents Artisan Funds and Artisan Global Funds U.S. investors that do not meet our minimum account size for a separate account, or who otherwise prefer to invest through a mutual fund, can invest in our strategies through Artisan Funds.
Small-Cap Growth. James D. Hamel, Matthew H. Kamm, Craigh A. Cepukenas, Jason L. White and Jay C. Warner are the portfolio managers of all four strategies. Mr. Hamel is the lead portfolio manager of the Global Opportunities strategy; Mr. White is the lead portfolio manager of the Global Discovery strategy; Mr. Kamm is the lead portfolio manager of the U.S.
Small-Cap Growth. James D. Hamel, Matthew H. Kamm, Jason L. White and Jay C. Warner are the portfolio managers of all four strategies. Mr. Hamel is the lead portfolio manager of the Global Opportunities strategy; Mr. White is the lead portfolio manager of the Global Discovery strategy; Mr. Kamm and Mr. White are the co-lead portfolio managers of the U.S.
As of December 31, 2023, 41% of our U.S. associates were female and 22% of our U.S. associates self-identified as ethnically diverse. We invest significant energy in the recruitment of our associates as they are critical to ensuring the long-term success of our firm.
As of December 31, 2024, 42% of our U.S. associates were female and 22% of our U.S. associates self-identified as ethnically diverse. We invest significant energy in the recruitment of our associates as they are critical to ensuring the long-term success of our firm.
As of December 31, 2023, Artisan Funds and Artisan Global Funds accounted for approximately 48% of our total AUM, and approximately 52% of our AUM were managed in separate accounts and other pooled vehicles. Separate Accounts and Other We manage traditional separate accounts within most of our investment strategies.
As of December 31, 2024, Artisan Funds and Artisan Global Funds accounted for approximately 48% of our total AUM, and approximately 52% of our AUM were managed in separate accounts and other pooled vehicles. Separate Accounts and Other Pooled Investment Vehicles (“Separate Accounts and Other”) We manage traditional separate accounts within most of our investment strategies.
See “Risk Factors—Risks Related to Legal or Regulatory Factors and Taxation—We are subject to extensive, complex and sometimes overlapping laws, rules and regulations.” and “Risk Factors—Risks Related to Legal or Regulatory Factors and Taxation—The regulatory environment in which we operate is subject to continual change, and regulatory developments may adversely affect our business.” Industry Trends and Competition The investment management industry continues to evolve as market trends and other forces, including the current regulatory environment, create headwinds for traditional asset management firms. • Passive and alternative investment options continue to grow organically while traditional actively managed strategies have had net organic outflows over the past five years. • A number of shifts in the distribution landscape are putting pressure on traditional distribution models.
See “Risk Factors—Risks Related to Legal or Regulatory Factors and Taxation—We are subject to extensive, complex and sometimes overlapping laws, rules and regulations.” and “Risk Factors—Risks Related to Legal or Regulatory Factors and Taxation—The regulatory environment in which we operate is subject to continual change, and regulatory developments may adversely affect our business.” Industry Trends and Competition The investment management industry continues to evolve as market trends and other forces, including the current regulatory environment, create headwinds for traditional asset management firms. • Passive and alternative investment options continue to grow organically while traditional actively managed strategies generally remain in outflows. • A number of shifts in the distribution landscape are putting pressure on traditional distribution models.
In addition to owning all of the shares of our Class B common stock, our employee-partners, together with our other employees, owned unvested restricted shares of our Class A common stock representing approximately 8% of our outstanding Class A common stock as of December 31, 2023.
In addition to owning all of the shares of our Class B common stock, our employee-partners, together with our other employees, owned unvested restricted shares of our Class A common stock representing approximately 7% of our outstanding Class A common stock as of December 31, 2024.
O’Keefe, manages two investment strategies. Mr. O’Keefe serves as lead portfolio manager and Michael J. McKinnon serves as portfolio manager of the team’s Global Value and Select Equity strategies.
O’Keefe, manages two investment strategies: Global Value and Select Equity. Mr. O’Keefe serves as lead portfolio manager and Michael J. McKinnon serves as portfolio manager of both strategies.
Certain regulatory reforms in the U.S. that have impacted, or may in the future impact, our business include the following items: • The SEC has recently proposed and/or adopted a number of new rules impacting registered investment advisers (e.g. private fund adviser rules, ESG disclosure rules, cybersecurity risk management and disclosure rules, beneficial ownership rules, service provider oversight requirements, rules on safeguarding client assets and predictive data analytics, and amendments to Form PF) and registered investment companies (e.g.
Certain regulatory reforms in the U.S. that have impacted, or may in the future impact, our business include the following items: • The SEC has recently proposed and/or adopted a number of new rules impacting registered investment advisers (e.g. rules on safeguarding client assets and predictive data analytics, amendments to Form PF, service provider oversight requirements and ESG disclosure rules) and registered investment companies (e.g. amendments to the names rule, liquidity risk management and ESG disclosure rules).
Growth, Non-U.S. Small-Mid Growth and China Post-Venture. Mark L. Yockey serves as portfolio manager of the Global Equity and Non-U.S. Growth strategies. Charles-Henri Hamker and Andrew J. Euretig are also portfolio managers of the Global Equity strategy and associate portfolio managers of the Non-U.S. Growth strategy. Rezo Kanovich serves as the sole portfolio manager of the Non-U.S. Small-Mid Growth strategy.
Growth and China Post-Venture. Mark L. Yockey serves as portfolio manager of the Global Equity and Non-U.S. Growth strategies. Charles-Henri Hamker and Andrew J. Euretig are also portfolio managers of the Global Equity strategy and associate portfolio managers of the Non-U.S. Growth strategy.
Item 1. Business Overview Founded in 1994, Artisan is an investment management firm focused on providing high valued added, active investment strategies in asset classes for sophisticated clients around the world.
Item 1. Business Overview Founded in 1994, Artisan is an investment management firm focused on providing high value-added active investment strategies in growing asset classes to sophisticated clients around the world.
We understand that attracting, developing and retaining talented professionals is an essential component of our business strategy. As a result, we are committed to providing an environment that is attractive to our current and prospective associates and that allows our talented associates to thrive throughout the course of their careers at Artisan.
We understand that attracting, developing and retaining talented professionals is an essential component of our business strategy. We are committed to providing an environment that is attractive to our current and prospective associates and that allows our talented associates to thrive throughout the course of their careers at Artisan. As of December 31, 2024, we employed 584 associates.
As of December 31, 2023, we owned approximately 86% of Artisan Partners Holdings, and the other 14% was owned by the limited partners of Artisan Partners Holdings. Our holding company structure is predominantly a result of our IPO, which we completed in March 2013.
As of December 31, 2024, we owned approximately 87% of Artisan Partners Holdings, and the other 13% was owned by the limited partners of Artisan Partners Holdings. Our holding company structure is predominantly a result of our IPO, which we completed in March 2013.
The company was incorporated in Wisconsin on March 21, 2011 and converted to a Delaware corporation on October 29, 2012. 14 Table of Contents
The company was incorporated in Wisconsin on March 21, 2011 and converted to a Delaware corporation on October 29, 2012.
The legislative and regulatory environment in the U.S. is subject to continual change. Political and electoral changes and developments have in the past introduced, and may in the future introduce, additional uncertainty. New legal or regulatory requirements often add further complexity to our business and operations, and addressing such new requirements may require substantial expenditures of time and capital.
Political and electoral changes and developments have in the past introduced, and may in the future introduce, additional uncertainty. New legal or regulatory requirements often add further complexity to our business and operations, and addressing such new requirements may require substantial expenditures of time and capital.
Morgan GBI-EM Global Diversified 12.70 % — % — % — % 11.12 % Distribution, Investment Products and Client Relationships The goal of our marketing, distribution and client service efforts is to grow and maintain a client base that is diversified by investment strategy, client type, distribution channel and geographic region.
Morgan GBI-EM Global Diversified (2.38) % — % — % — % 5.32 % Distribution, Investment Products and Client Relationships The goal of our marketing, distribution and client service efforts is to grow and maintain a client base that is diversified by investment strategy, client type, distribution channel and geographic region.
Intermediary Channel We maintain relationships with a number of major brokerage firms and larger private banks and trust companies at which the process for identifying which funds to offer has been centralized to a relatively limited number of key decision-makers that exhibit institutional-like decision-making behavior.
As of December 31, 2024, 62% of our AUM were sourced through our institutional channel. Intermediary Channel We maintain relationships with a number of major brokerage firms and larger private banks and trust companies at which the process for identifying which funds to offer has been centralized to a relatively limited number of key decision-makers that exhibit institutional-like decision-making behavior.
We also regularly evaluate potential new investment teams and talent to enhance and expand our investment platform. In addition, we have evolved our distribution structure, incorporating additional associates, re-aligning incentives and providing a robust set of resources, as well as making continued investments to deepen our digital distribution capabilities. The industry in which we operate is highly competitive.
We also regularly evaluate potential new investment teams and talent, as well as new investment structures and vehicles in an effort to enhance and expand our investment platform. In addition, we have evolved our distribution structure, incorporating additional associates, re-aligning incentives and providing a robust set of resources, as well as making continued investments to deepen our digital distribution capabilities.
As of December 31, 2023, we managed 212 traditional separate accounts spanning 128 client relationships with our largest separate account relationship representing approximately 11% of our AUM.
As of December 31, 2024, we managed 219 traditional separate accounts spanning 132 client relationships, with our largest separate account relationship representing approximately 11% of our AUM.
The following table sets forth total assets under management and certain performance information for our investment teams and strategies as of December 31, 2023. 1 Table of Contents Investment Team and Strategy AUM as of December 31, 2023 Composite Inception Date Value-Added Since Inception Date (1) as of December 31, 2023 Fund Rating (2) as of December 31, 2023 (in millions) Growth Team Global Opportunities 21,232 February 1, 2007 460 ««« Global Discovery 1,490 September 1, 2017 422 «««« U.S.
The following table sets forth total AUM and certain performance information for our investment teams and strategies as of December 31, 2024. 1 Table of Contents Investment Team and Strategy AUM as of December 31, 2024 Composite Inception Date Value-Added Since Inception Date (1) as of December 31, 2024 Fund Rating (2) as of December 31, 2024 (in millions) Growth Team Global Opportunities 20,591 February 1, 2007 430 ««« Global Discovery 1,808 September 1, 2017 677 ««««« U.S.
Over our firm’s history, we have created new investment strategies that can use a broad array of securities, instruments and techniques (which we call degrees of freedom) to differentiate returns and manage risk.
New investment strategies we have developed use a broad array of securities, instruments and techniques (which we call degrees of freedom) to differentiate returns and manage risk.
Investment advisory and sub-advisory agreements between us and our clients are generally terminable by our clients upon short or no notice. Investment Teams We offer clients a broad range of actively managed investment strategies diversified by asset class, market cap and investment style. Each strategy is managed by one of the investment teams described below.
Investment advisory fees are determined and set forth in the investment management agreements between us and our clients. Investment management agreements are generally terminable by our clients upon short or no notice. Investment Teams We offer clients a broad range of actively managed investment strategies diversified by asset class, market cap and investment style.
We offer our investment products to institutional clients directly and by marketing our services to the investment consultants and advisors that advise them. As of December 31, 2023, approximately 35% of our AUM were attributed to clients represented by investment consultants. As of December 31, 2023, 63% of our AUM were sourced through our institutional channel.
Our institutional channel also includes AUM sourced from defined contribution plans. We offer our investment products to institutional clients directly and by marketing our services to the investment consultants and advisors that advise them. As of December 31, 2024, approximately 30% of our AUM were attributed to clients represented by investment consultants.
In order to be successful and grow our business, we must be able to compete effectively for AUM.
The industry in which we operate is highly competitive. In order to be successful and grow our business, we must be able to compete effectively for AUM.
Bryan C. Krug serves as portfolio manager of the High Income and Credit Opportunities strategies and lead portfolio manager of the Floating Rate strategy. Seth B. Yeager also serves as portfolio manager of the Floating Rate strategy.
Bryan C. Krug serves as portfolio manager of all three strategies. Seth B. Yeager also serves as portfolio manager of the Floating Rate strategy.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception High Income (April 1, 2014) Average Annual Gross Returns 16.95 % 4.42 % 7.78 % — % 6.92 % ICE BofA U.S.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception High Income (April 1, 2014) Average Annual Gross Returns 9.39 % 5.13 % 6.68 % 7.44 % 7.14 % ICE BofA U.S.
We also actively support a number of associate-led groups including the Pride Alliance, Multicultural Exchange, diffAbilities and the Women’s Networking Initiative. These groups create supportive and collaborative networks, encourage engagement and a sense of belonging, and enhance professional and personal growth.
We also actively support a number of associate-led groups as part of our ongoing commitment to providing an environment that allows our talented associates to thrive. These groups, which include the Pride Alliance, Multicultural Exchange, diffAbilities and the Women’s Networking Initiative, create supportive and collaborative networks, encourage engagement and a sense of belonging, and enhance professional and personal growth.
As of December 31, 2023, we employed 573 associates. Approximately 31% of our associates work within our investment teams, 25% within our distribution teams and 45% within our business management and operations teams. Approximately 93% of our associates operate from our U.S. offices and 7% operate from our offices outside of the U.S.
Approximately 30% of our associates work within our investment teams, 19% within our distribution teams and 51% within our business management and operations teams. Approximately 93% of our associates operate from our U.S. offices and 7% operate from our offices outside of the U.S.
FINRA has the authority to conduct periodic examinations of member broker-dealers, and may initiate administrative proceedings. Artisan Partners Distributors LLC is also subject to the SEC’s Uniform Net Capital Rule and the National Securities Clearing Corporation’s excess net capital requirement, which require that at least a minimum amount of a registered broker-dealer’s assets be kept in relatively liquid form.
Artisan Partners Distributors LLC is also subject to the SEC’s Uniform Net Capital Rule and the National Securities Clearing Corporation’s excess net capital requirement, which require that at least a minimum amount of a registered broker-dealer’s assets be kept in relatively liquid form. 8 Table of Contents The legislative and regulatory environment in the U.S. is subject to continual change.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Sustainable Emerging Markets (July 1, 2006) Average Annual Gross Returns 18.30 % (4.95) % 5.22 % 4.69 % 5.08 % MSCI Emerging Markets Index 9.83 % (5.08) % 3.68 % 2.66 % 4.27 % 5 Table of Contents Credit Team Our Credit team manages three investment strategies: High Income, Credit Opportunities and Floating Rate.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Sustainable Emerging Markets (July 1, 2006) Average Annual Gross Returns 8.25 % (2.31) % 2.72 % 5.83 % 5.25 % MSCI Emerging Markets Index 7.50 % (1.92) % 1.70 % 3.63 % 4.44 % Credit Team Our Credit team manages three investment strategies: High Income, Credit Opportunities and Floating Rate.
A small percentage of our clients and investors pay us performance fees or incentive allocations, in which a portion of the fee or allocation is based on the performance of clients’ accounts relative to a benchmark. These investment advisory fees are determined by the investment advisory and sub-advisory agreements between us and our clients.
We derive essentially all of our revenues from investment management fees, which primarily are based on a specified percentage of clients’ average AUM. A small percentage of our clients and investors pay us performance fees or incentive allocations, in which a portion of the fee or allocation is based on the performance of clients’ accounts relative to a benchmark.
In addition to generating successful investment outcomes for our clients, we strive to promote success across a diverse group of associates and generate sustainable financial outcomes for our shareholders. To achieve our purpose, we must continue to thoughtfully grow our business over the long term while preserving a consistent environment in which our talented investment professionals and associates can thrive.
To achieve our purpose, we must continue to thoughtfully grow our business over the long term while preserving a consistent environment in which our talented investment professionals and associates can thrive.
Morgan EMB Hard Currency/Local Currency 50-50 11.43 % — % — % — % 6.08 % Emerging Markets Local Opportunities (August 1, 2022) Average Annual Gross Returns 16.16 % — % — % — % 14.05 % J.P.
Morgan EMB Hard Currency/Local Currency 50-50 2.28 % — % — % — % 4.64 % Emerging Markets Local Opportunities (August 1, 2022) Average Annual Gross Returns 1.05 % — % — % — % 8.48 % J.P.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception International Value (July 1, 2002) Average Annual Gross Returns 24.19 % 11.25 % 13.68 % 8.05 % 11.71 % MSCI EAFE ® Index 18.24 % 4.02 % 8.16 % 4.28 % 6.01 % International Explorer (October 1, 2020) Average Annual Gross Returns 22.42 % 8.63 % — % — % 15.65 % MSCI All Country World Index Ex USA Small Cap (Net) 15.66 % 1.49 % — % — % 7.92 % Global Value Team Our Global Value team, led by Daniel J.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception International Value (July 1, 2002) Average Annual Gross Returns 7.77 % 7.90 % 10.23 % 8.74 % 11.53 % MSCI EAFE ® Index 3.82 % 1.64 % 4.72 % 5.19 % 5.91 % International Explorer (October 1, 2020) Average Annual Gross Returns 7.32 % 4.47 % — % — % 13.58 % MSCI All Country World Index Ex USA Small Cap (Net) 3.36 % (1.46) % — % — % 6.80 % Global Value Team Our Global Value team, led by Daniel J.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Developing World (July 1, 2015) Average Annual Gross Returns 30.96 % (10.76) % 13.32 % — % 9.60 % MSCI Emerging Markets Index 9.83 % (5.08) % 3.68 % — % 3.05 % Antero Peak Group Antero Peak Group manages two investment strategies: Antero Peak and Antero Peak Hedge.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Developing World (July 1, 2015) Average Annual Gross Returns 30.04 % 0.41 % 11.12 % — % 11.59 % MSCI Emerging Markets Index 7.50 % (1.92) % 1.70 % — % 3.51 % 5 Table of Contents Antero Peak Group Antero Peak Group manages two investment strategies: Antero Peak and Antero Peak Hedge.
We are subject to the California Consumer Privacy Act (CCPA), which took effect in January 2020, and provides for enhanced consumer protections for California residents. Since then, California amended the CCPA by adopting the California Privacy Rights Act, and several additional states have proposed and/or adopted data privacy laws with which we are or may be required to comply. Non-U.S.
We are subject to the California Consumer Privacy Act, as amended (CCPA), and various other states have proposed and/or adopted data privacy laws with which we are or may be required to comply. Non-U.S.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Value (July 1, 2007) Average Annual Gross Returns 28.05 % 9.34 % 12.04 % 8.33 % 8.75 % MSCI ACWI ® Index 22.20 % 5.75 % 11.71 % 7.92 % 5.77 % Select Equity (March 1, 2020) Average Annual Gross Returns 27.82 % 7.89 % — % — % 11.90 % S&P 500 Index 26.29 % 10.00 % — % — % 15.14 % Sustainable Emerging Markets Team Our Sustainable Emerging Markets team manages one investment strategy.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Value (July 1, 2007) Average Annual Gross Returns 11.90 % 7.74 % 9.51 % 8.90 % 8.93 % MSCI ACWI ® Index 17.49 % 5.43 % 10.05 % 9.22 % 6.40 % Select Equity (March 1, 2020) Average Annual Gross Returns 16.96 % 7.91 % — % — % 12.92 % S&P 500 Market Index 25.02 % 8.93 % — % — % 17.11 % 4 Table of Contents Sustainable Emerging Markets Team Our Sustainable Emerging Markets (SEM) team manages one investment strategy.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Opportunities (February 1, 2007) Average Annual Gross Returns 24.40 % 0.32 % 14.37 % 11.06 % 10.75 % MSCI ACWI ® Index 22.20 % 5.75 % 11.71 % 7.92 % 6.15 % Global Discovery (September 1, 2017) Average Annual Gross Returns 22.24 % (0.86) % 15.77 % — % 12.94 % MSCI ACWI ® Index 22.20 % 5.75 % 11.71 % — % 8.72 % U.S.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Opportunities (February 1, 2007) Average Annual Gross Returns 16.13 % 0.60 % 10.64 % 12.32 % 11.05 % MSCI ACWI ® Index 17.49 % 5.43 % 10.05 % 9.22 % 6.75 % Global Discovery (September 1, 2017) Average Annual Gross Returns 17.51 % 0.14 % 11.10 % — % 13.55 % MSCI ACWI ® Small Mid Index 8.68 % 0.82 % 6.61 % — % 6.78 % U.S.
As the commodity pool operator of these investment vehicles, Artisan Partners claims relief under the Commodity Exchange Act from certain reporting and recordkeeping requirements. Artisan Partners Limited Partnership is a fiduciary under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) with respect to assets that we manage for certain benefit plan clients.
As the commodity pool operator of these investment vehicles, Artisan Partners claims relief under the Commodity Exchange Act from certain reporting and recordkeeping requirements. Artisan Partners is exempt from the obligations of a registered commodity pool operator with respect to certain funds and vehicles.
In the U.S., we match 100% of associate 401(k) contributions dollar for dollar (fully vested), up to the IRS limit. We also maintain competitive retirement programs or benefits for all non-U.S. associates. In addition, we offer a comprehensive benefits program that is available to all associates regardless of title, role, or responsibility.
We also maintain competitive retirement programs or benefits for all non-U.S. associates. In addition, we offer a comprehensive benefits program that is available to all associates regardless of title, role, or responsibility. Sustainability Artisan Partners’ purpose is to generate and compound wealth over the long-term for our clients.
Dollar 3-Month Deposit Offered Rate Constant Maturity Index 5.12 % 2.15 % 2.02 % — % 1.97 % Floating Rate (January 1, 2022) Average Annual Gross Returns 14.94 % — % — % — % 6.78 % Credit Suisse Leveraged Loan Total Return Index 13.04 % — % — % — % 5.76 % Developing World Team Our Developing World team manages one investment strategy.
Dollar 3-Month Deposit Offered Rate Constant Maturity Index 5.47 % 3.91 % 2.58 % — % 2.43 % Floating Rate (January 1, 2022) Average Annual Gross Returns 8.78 % 7.44 % — % — % 7.44 % S&P UBS Leveraged Loan Index 9.05 % 6.84 % — % — % 6.84 % Developing World Team Our Developing World team manages one investment strategy.
Small-Cap Growth (April 1, 1995) Average Annual Gross Returns 11.38 % (9.84) % 11.12 % 9.40 % 10.40 % Russell 2000 ® Index 16.93 % 2.22 % 9.97 % 7.15 % 8.84 % Russell 2000 ® Growth Index 18.66 % (3.50) % 9.22 % 7.16 % 7.54 % Global Equity Team Our Global Equity team currently manages four investment strategies: Global Equity, Non-U.S.
Small-Cap Growth (April 1, 1995) Average Annual Gross Returns 15.96 % (2.69) % 6.72 % 10.98 % 10.58 % Russell 2000 ® Index 11.54 % 1.24 % 7.40 % 7.81 % 8.93 % Russell 2000 ® Growth Index 15.15 % 0.21 % 6.85 % 8.08 % 7.78 % Global Equity Team Our Global Equity team manages three investment strategies: Global Equity, Non-U.S.
We do not generally use direct marketing campaigns as we believe that their cost outweighs their potential benefits.
We do not generally use direct marketing campaigns as we believe that their cost outweighs their potential benefits. As of December 31, 2024, approximately 3% of our AUM were sourced from investors we categorize as retail investors.
As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Value Equity (July 1, 2005) Average Annual Gross Returns 25.54 % 12.77 % 15.86 % 10.30 % 9.42 % Russell 1000 ® Index 26.53 % 8.97 % 15.51 % 11.80 % 9.95 % Russell 1000 ® Value Index 11.46 % 8.86 % 10.90 % 8.39 % 7.66 % U.S.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Value Equity (July 1, 2005) Average Annual Gross Returns 13.49 % 9.35 % 12.51 % 11.06 % 9.62 % Russell 1000 ® Index 24.51 % 8.40 % 14.26 % 12.86 % 10.65 % Russell 1000 ® Value Index 14.37 % 5.63 % 8.67 % 8.48 % 8.00 % U.S.
ERISA imposes duties on persons who are ERISA fiduciaries, and prohibits certain transactions between related parties to a retirement plan. The U.S. Department of Labor administers ERISA and regulates plan fiduciaries, including investment advisers who service retirement plan clients.
Department of Labor administers ERISA and regulates plan fiduciaries, including investment advisers who service retirement plan clients.
As of December 31, 2023, approximately 4% of our AUM were sourced from investors we categorize as retail investors. 7 Table of Contents Access Through a Range of Investment Vehicles Our clients access our investment strategies through a range of investment vehicles, including separate accounts and pooled vehicles.
Across our institutional, intermediary and retail channels, we generally consider approximately 59% of our AUM as of December 31, 2024 to be attributed to intermediated wealth clients. Access Through a Range of Investment Vehicles Our clients access our investment strategies through a range of investment vehicles, including separate accounts and pooled vehicles.
High Yield Index 13.46 % 2.00 % 5.21 % — % 4.31 % Credit Opportunities (July 1, 2017) Average Annual Gross Returns 27.22 % 13.24 % 15.52 % — % 13.29 % ICE BofA U.S.
High Yield Index 8.20 % 2.91 % 4.04 % 5.08 % 4.67 % Credit Opportunities (July 1, 2017) Average Annual Gross Returns 18.06 % 13.10 % 16.20 % — % 13.90 % ICE BofA U.S.
Mid-Cap Growth strategy; and Mr. Cepukenas is the lead portfolio manager of the U.S. Small-Cap Growth strategy.
Mid-Cap Growth strategy; and Mr. Warner is the lead portfolio manager of the U.S. Small-Cap Growth strategy. Mr. Cepukenas, who previously managed the U.S. Small-Cap Growth strategy, remains an active member of the Growth team, serving in an advisory capacity as a managing director.
We believe that minimizing other demands allows our portfolio managers and other investment professionals to focus their energies and attention on the investment decision-making process, which we believe enhances the opportunity to achieve superior investment returns.
We believe that minimizing other demands allows our portfolio managers and other investment professionals to focus their energies and attention on the investment decision-making process, which we believe enhances the opportunity to achieve superior investment returns. 6 Table of Contents Institutional Channel Our institutional distribution channel includes institutional clients, such as U.S.-registered mutual funds, non-U.S. funds and collective investment trusts we advise; state and local governments; employee benefit plans including Taft-Hartley plans; foundations; and endowments.
We regularly review compensation paid to associates to ensure it is competitive, equitable and fair for the role, experience, location and individual contribution. We provide equity or equity-linked incentives to all of our associates in order to align their economic interests with those of our clients and stockholders. We encourage our associates to save for retirement.
We provide equity or equity-linked incentives to all of our associates in order to align their economic interests with those of our clients and stockholders. We encourage our associates to save for retirement. In the U.S., we match 100% of associate 401(k) contributions dollar for dollar (fully vested), up to the IRS limit.
Mid-Cap Growth 12,646 April 1, 1997 476 ««« U.S. Small-Cap Growth 3,178 April 1, 1995 286 «« Global Equity Team Global Equity 347 April 1, 2010 260 ««« Non-U.S. Growth 13,218 January 1, 1996 438 ««« Non-U.S. Small-Mid Growth 7,151 January 1, 2019 418 ««« China Post-Venture 160 April 1, 2021 366 Not Applicable U.S.
Mid-Cap Growth 12,952 April 1, 1997 429 ««« U.S. Small-Cap Growth 3,094 April 1, 1995 280 ««« Global Equity Team Global Equity 346 April 1, 2010 252 ««« Non-U.S. Growth 12,410 January 1, 1996 450 ««« China Post-Venture 178 April 1, 2021 395 Not Applicable U.S. Value Team Value Equity 4,915 July 1, 2005 162 «««« U.S.
These rules impact us and the funds we manage to varying degrees. • There continues to be an increased focus on the protection of customer and personal privacy and data, and the need to secure sensitive information.
Rules that ultimately become effective will impact us and the funds we manage to varying degrees. • There continues to be increased focus on the appropriate use and maintenance of personal data belonging to customers, employees and certain other individuals.
Sustainability Artisan Partners' purpose is to generate and compound wealth over the long-term for our clients. The wealth we generate improves retirement outcomes, pays for education, funds charitable purposes and in general improves people's lives.
The wealth we generate improves retirement outcomes, pays for education, funds charitable purposes and in general improves people’s lives. In addition to generating successful investment outcomes for our clients, we strive to promote success across a diverse group of associates and generate sustainable financial outcomes for our shareholders.
Our support of these and other associate-led programs are part of our ongoing commitment to providing an environment that allows our talented associates to thrive. We believe in order to attract and retain talent, it is critical that we continue to foster an engaging environment and provide attractive compensation and benefits programs.
We believe in order to attract and retain talent, it is critical that we continue to foster an engaging environment and provide attractive compensation and benefits programs. We regularly review compensation paid to associates to ensure it is competitive, equitable and fair for the role, experience, location and individual contribution.
Mid-Cap Value (April 1, 1999) Average Annual Gross Returns 19.35 % 10.25 % 12.31 % 7.51 % 12.08 % Russell Midcap ® Index 17.23 % 5.92 % 12.67 % 9.42 % 9.41 % Russell Midcap ® Value Index 12.71 % 8.36 % 11.15 % 8.26 % 9.38 % Value Income (March 1, 2022) Average Annual Gross Returns 12.20 % — % — % — % 1.90 % S&P 500 Market Index 26.29 % — % — % — % 6.58 % 4 Table of Contents International Value Team Our International Value team, led by N.
Mid-Cap Value (April 1, 1999) Average Annual Gross Returns 5.76 % 3.51 % 8.65 % 7.82 % 11.83 % Russell Midcap ® Index 15.34 % 3.79 % 9.91 % 9.62 % 9.63 % Russell Midcap ® Value Index 13.07 % 3.88 % 8.59 % 8.10 % 9.52 % Value Income (March 1, 2022) Average Annual Gross Returns 10.91 % — % — % — % 4.98 % S&P 500 Market Index 25.02 % — % — % — % 12.73 % International Value Group The International Value Group, led by N.
Tiffany Hsiao serves as portfolio manager and Yuan Yuan Ji serves as associate portfolio manager of the China Post-Venture strategy. 3 Table of Contents As of December 31, 2023 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Equity (April 1, 2010) Average Annual Gross Returns 13.58 % (0.98) % 10.90 % 8.84 % 11.16 % MSCI ACWI ® Index 22.20 % 5.75 % 11.71 % 7.92 % 8.56 % Non-U.S.
As of December 31, 2024 Investment Strategy (Composite Inception Date) 1 Year 3 Years 5 Years 10 Years Inception Global Equity (April 1, 2010) Average Annual Gross Returns 18.78 % 2.66 % 8.44 % 10.22 % 11.66 % MSCI ACWI ® Index 17.49 % 5.43 % 10.05 % 9.22 % 9.14 % Non-U.S.
Mid-Cap Growth (April 1, 1997) Average Annual Gross Returns 25.45 % (3.59) % 14.88 % 10.17 % 14.31 % Russell Midcap ® Index 17.23 % 5.92 % 12.67 % 9.42 % 10.13 % Russell Midcap ® Growth Index 25.87 % 1.31 % 13.81 % 10.56 % 9.55 % U.S.
Mid-Cap Growth (April 1, 1997) Average Annual Gross Returns 13.27 % (3.13) % 10.15 % 10.80 % 14.27 % Russell Midcap ® Index 15.34 % 3.79 % 9.91 % 9.62 % 10.31 % Russell Midcap ® Growth Index 22.10 % 4.04 % 11.46 % 11.53 % 9.98 % U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePursuant to our restated certificate of incorporation, we will indemnify our directors and officers to the fullest extent permitted by Delaware law against all liability and expense incurred by them in their capacities as directors or officers of us, and we are obligated to pay their expenses in connection with the defense of claims.
Biggest changeIn addition, we may be obligated, and under our certificate of incorporation, bylaws and indemnification agreements we have entered are obligated under certain conditions, or may choose, to indemnify directors, officers or other personnel against liabilities and expenses they may incur in connection with such matters to the extent permitted under applicable law.
Competition for highly-skilled and motivated portfolio managers and other key professionals in the investment management industry is intense, and the market for qualified professionals in our industry is characterized by the frequent movement of portfolio managers and other key professionals among different firms.
Competition for highly-skilled and motivated portfolio managers and other key professionals in the investment management industry is intense, and the market for qualified professionals in our industry is characterized by the frequent movement of professionals among different firms.
Many financial markets are not as developed, or as efficient, as the U.S. financial markets and, as a result, those markets typically have limited liquidity and higher price volatility, and in some cases lack established regulations. Liquidity may also be adversely affected by political or economic events, government policies, and social or civil unrest within a particular country.
Many financial markets are not as developed or as efficient as the U.S. financial markets and in some cases lack established regulations. As a result, those markets typically have limited liquidity and higher price volatility. Liquidity may also be adversely affected by political or economic events, government policies, and social or civil unrest within a particular country.
Those provisions include: • The right of the certain classes of our capital stock to vote, as separate classes, on certain amendments to our restated certificate of incorporation and certain fundamental transactions. • The ability of our board of directors to determine to issue shares of preferred stock. • Advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting. • A limitation that, generally, stockholder action may only be taken at an annual or special meeting or by unanimous written consent. • A requirement that a special meeting of stockholders may be called only by our board of directors, the Chair of the board or the Chief Executive Officer. • The ability of our board of directors to adopt, amend and repeal our amended and restated bylaws by majority vote, while such action by stockholders would require a super majority vote. • Except with respect to awards held by our named executive officers which are double trigger, single trigger vesting upon a change in control for unvested employee equity awards.
Those provisions include: • The right of certain classes of our capital stock to vote, as separate classes, on certain amendments to our restated certificate of incorporation and certain fundamental transactions. • The ability of our Board to determine to issue shares of preferred stock. • Advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting. • A limitation that, generally, stockholder action may only be taken at an annual or special meeting or by unanimous written consent. • A requirement that a special meeting of stockholders may be called only by our Board, the Chair of the Board or the Chief Executive Officer. • The ability of our Board to adopt, amend and repeal our amended and restated bylaws by majority vote, while such action by stockholders would require a super majority vote. • Except with respect to awards held by our named executive officers which are double trigger, single trigger vesting upon a change in control for unvested employee equity awards.
In addition, the structuring of future transactions may take into consideration these pre-IPO owners’ tax or other considerations even where no similar benefit would accrue to us. Our ability to pay regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our structure and applicable provisions of Delaware law.
In addition, the structuring of future transactions may take into consideration these pre-IPO owners’ tax or other considerations even where no similar benefit would accrue to us. Our ability to pay regular dividends to our stockholders is subject to the discretion of our Board and may be limited by our structure and applicable provisions of Delaware law.
Our restated certificate of incorporation provides that, to the fullest extent permitted by applicable law, certain of our investors and their respective affiliates (including affiliates who serve on our board of directors) have no obligation to offer us an opportunity to participate in the business opportunities presented to them, even if the opportunity is one that we might reasonably have pursued.
Our restated certificate of incorporation provides that, to the fullest extent permitted by applicable law, certain of our investors and their respective affiliates (including affiliates who serve on our Board) have no obligation to offer us an opportunity to participate in the business opportunities presented to them, even if the opportunity is one that we might reasonably have pursued.
We generally support the development of new strategies by making one or more seed investments using capital that would otherwise be available for our general corporate purposes. Making such seed investments exposes us to capital losses and reduces the amount of capital available for other purposes.
We generally support the development of new strategies by making one or more seed investments or capital commitments using capital that would otherwise be available for our general corporate purposes. Making such investments exposes us to capital losses and reduces the amount of capital available for other purposes.
We regularly assess the effectiveness of our compensation arrangements and long-term incentive structures in aligning the long-term interests of our investment professionals with those of our clients and stockholders and whether different, or modified, arrangements or structures would enhance incentives for long-term growth and succession planning.
We regularly assess the effectiveness of our compensation arrangements and long-term incentive structures in aligning the long-term interests of our investment professionals with those of our clients and stockholders and consider whether different, or modified, arrangements or structures would enhance incentives for long-term growth and succession planning.
Similarly, we may establish new investment teams or strategies or expand operations into other geographic areas if we believe such actions are in the best interests of our clients, even though our profitability may be adversely affected in the short term.
Similarly, we may establish new investment teams or strategies or expand operations into new geographic areas if we believe such actions are in the best interests of our clients, even though our profitability may be adversely affected in the short term.
We intend to pay dividends to holders of our Class A common stock as described in “Dividend Policy”. Our board of directors may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely.
We intend to pay dividends to holders of our Class A common stock as described in “Dividend Policy”. Our Board may, in its sole discretion, change the amount or frequency of dividends or discontinue the payment of dividends entirely.
Our failure to comply with any of these guidelines and other limitations could result in losses to clients or fund investors which, depending on the circumstances, could result in our obligation to reimburse clients or fund investors for such losses.
Our failure to comply with any of these guidelines and other limitations could result in losses to clients or fund investors which, depending on the circumstances, could result in our obligation to reimburse such clients or fund investors.
Operational risks or errors or interruption or failure of our financial, trading, compliance and other data processing systems, whether caused by human error, power or telecommunications failure, cyber-attack, ransomware or viruses, severe weather events, natural disaster, fire, act of terrorism or war, pandemics or other unpredictable events, could result in a disruption of our business, liability to clients, regulatory intervention or reputational damage, and thus adversely affect our business.
Operational issues or errors or interruption or failure of our financial, trading, compliance and other data processing systems, whether caused by human error, power or telecommunications failure, cyber-attack, ransomware or viruses, severe weather events, natural disaster, fire, act of terrorism or war, pandemics or other unpredictable events, could result in a disruption of our business, liability to clients, regulatory intervention or reputational damage, and thus adversely affect our business.
Any such errors could damage our reputation or result in regulatory scrutiny or legal liability. And any real or perceived problems could cause a disproportionate negative impact on our business and reputation.
Any such errors could damage our reputation or result in regulatory scrutiny or legal liability. In addition, any real or perceived problems could cause a disproportionate negative impact on our business and reputation.
Upon the occurrence of such an assignment, our subsidiary could continue to act as adviser to any such fund only if that fund’s board and shareholders approved a new investment advisory agreement, except in the case of certain funds that we sub-advise for which only board approval would be necessary.
Upon the occurrence of such an assignment, our subsidiary could continue to act as adviser to any such fund only if that fund’s board and shareholders approved a new investment management agreement, except in the case of certain funds that we sub-advise for which only board approval would be necessary.
Although we have not been materially impacted by the departure of a portfolio manager to date, we cannot guarantee that any future impacts from departures would not be material, particularly if the departing portfolio manager is responsible for managing a significant percentage of our AUM that account for a high proportion of our revenues.
Although we have not been materially impacted by the departure of a portfolio manager to date, we cannot guarantee that any future impacts from departures would not be material, particularly if the departing portfolio manager is responsible for managing a significant percentage of AUM that accounts for a high proportion of our revenues.
In addition, because the majority of our pre-IPO owners (including certain members of our board of directors) hold or held a portion of their ownership interests in our business through Holdings, rather than through Artisan Partners Asset Management, these pre-IPO owners may have conflicting interests with holders of our Class A common stock.
In addition, because the majority of our pre-IPO owners, including certain members of APAM’s board of directors (the “Board”), hold or held a portion of their ownership interests in our business through Holdings, rather than through Artisan Partners Asset Management, these pre-IPO owners may have conflicting interests with holders of our Class A common stock.
While we have focused significant attention and resources on the development and maintenance of compliance policies, procedures and practices, any inadvertent non-compliance with applicable laws, rules or regulations, either in the U.S. or abroad, could result in various legal proceedings, including civil litigation and regulatory investigations and enforcement actions that could result in fines, suspensions of individual employees, or limitations on particular business activities, any of which could have an adverse impact on our reputation and business.
While we have focused significant attention and resources on the development and maintenance of compliance policies, procedures and practices, any inadvertent non-compliance with applicable laws, rules or regulations, either in the U.S. or abroad, could result in various legal proceedings, including civil litigation and regulatory investigations and enforcement actions that could result in fines, 20 Table of Contents suspensions of individual employees, or limitations on particular business activities, any of which could have an adverse impact on our reputation and business.
The industry in which we operate is subject to extensive and complex laws, rules and regulations. We are subject to extensive regulation in the United States, primarily at the federal level, including regulation by the SEC, the U.S. Department of Labor, the Financial Industry Regulatory Authority, and the Commodity Futures Trading Commission.
The industry in which we operate is subject to extensive and complex laws, rules and regulations. We are subject to extensive regulation in the United States, primarily at the federal level, including regulation by the SEC, the U.S. Department of Labor, the Financial Industry Regulatory Authority, the Commodity Futures Trading Commission and the National Futures Association.
When clients retain us to manage assets on their behalf, they generally specify certain investment guidelines that we are required to follow in managing their portfolios. In addition, some of our clients are subject to laws that impose restrictions and limitations on the investment of their assets.
When clients retain us to manage assets on their behalf, they generally specify certain investment guidelines that we are required to follow. In addition, some of our clients are subject to laws that impose restrictions and limitations on the investment of their assets.
Changes in how clients choose to access asset management services may also exert downward pressure on fees.
Changes in how clients choose to access asset management services also exert downward pressure on fees.
However, we routinely encounter and address such threats, and the number and frequency of potential threats or security incidents experienced by us or our vendors has increased in recent years due to, among other factors, an increase in the number of security vulnerabilities, more sophisticated and automated attacks, proliferation of cloud-based solutions, increased operations in China and Hong Kong and the increase in remote work.
However, we routinely encounter and address such threats, and the number and frequency of potential threats or security incidents experienced by us directly, or indirectly via our vendors, has increased in recent years due to, among other factors, an increase in the number of security vulnerabilities, more sophisticated and automated attacks, proliferation of cloud-based solutions, our increased operations in China and Hong Kong and the increase in remote work.
Risks Related to Our Structure Control by our stockholders committee of approximately 11% of the combined voting power of our capital stock and the rights of holders of limited partnership units of Artisan Partners Holdings may give rise to conflicts of interest.
Risks Related to Our Structure Control by our stockholders committee of approximately 10% of the combined voting power of our capital stock and the rights of holders of limited partnership units of Artisan Partners Holdings may give rise to conflicts of interest.
In addition, the prices of the securities held in the portfolios we manage have in the past and may in the future decline for any number of reasons beyond our control, including, among others, a declining market, general economic downturn or recession, political uncertainty, inflation rates, natural disasters, war, acts of terrorism, or other unpredictable events.
In addition, the prices of the securities held in the portfolios we manage have in the past and may in the future decline 14 Table of Contents for any number of reasons beyond our control, including, among others, a declining market, general economic downturn or recession, political uncertainty, inflation rates, natural disasters, war, acts of terrorism, or other unpredictable events.
Some investment consultants, for example, have implemented programs in which the consultant provides a range of services, including selection, in a fiduciary capacity, of asset managers to serve as sub-adviser at lower fee rates than the manager’s otherwise applicable rates, with the expectation of a larger amount of AUM through that consultant.
Some investment consultants, for example, 15 Table of Contents have implemented programs in which the consultant provides a range of services, including selection, in a fiduciary capacity, of asset managers to serve as sub-adviser at lower fee rates than the manager’s otherwise applicable rates, with the expectation of a larger amount of AUM through that consultant.
As of December 31, 2023, we recorded a $364 million liability, representing amounts payable under the TRAs equal to 85% of the tax benefit we expected to realize from the H&F Corp merger described above, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units from March 2013 through December 31, 2023, assuming no material changes in the related tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs.
As of December 31, 2024, we recorded a $341 million liability, representing amounts payable under the TRAs equal to 85% of the tax benefit we expected to realize from the H&F Corp merger described above, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units from March 2013 through December 31, 2024, assuming no material changes in the related tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs.
In addition, from time to time, plan sponsors of 401(k) and other defined contribution assets that we 17 Table of Contents manage choose to invest plan assets in vehicles with lower cost structures than mutual funds (such as a collective investment trust) or may choose to access our services through a separate account.
In addition, from time to time, plan sponsors of 401(k) and other defined contribution assets that we manage choose to invest plan assets in vehicles with lower cost structures than mutual funds (such as a collective investment trust) or may choose to access our services through a separate account.
In addition, as required by the Advisers Act, each of the investment advisory agreements for the separate accounts we manage provides that it may not be assigned, as defined in the Advisers Act, without the consent of the client.
In addition, as required by the Advisers Act, each of the investment management agreements for the separate accounts we manage provides that it may not be assigned, as defined in the Advisers Act, without the consent of the client.
Our experiences with and preparation for cybersecurity and other technology threats have included phishing scams, introductions of malware, attempts at electronic break-ins, brand infringements or impersonations, ransomware and unauthorized payment requests.
Our experiences with cybersecurity and other technology threats have included phishing scams, introductions of malware, attempts at electronic break-ins, brand infringements or impersonations, ransomware and unauthorized payment requests.
Risks Related to Our Class A Common Stock Equity markets and the price of our Class A common stock have been, and will continue to be, volatile, which could result in rapid and substantial losses for our stockholders.
Risks Related to Our Class A Common Stock Equity markets and the price of our Class A common stock have been, and may continue to be, volatile, which could result in rapid and substantial losses for our stockholders.
Payments under the TRAs are expected to give rise to certain additional tax benefits attributable to either further increases in basis or in the form of deductions for imputed interest, depending on the TRA and the circumstances. Any such benefits are covered by the TRAs and will increase the amounts due thereunder.
Payments under the TRAs are expected to give rise to certain 24 Table of Contents additional tax benefits attributable to either further increases in basis or in the form of deductions for imputed interest, depending on the TRA and the circumstances. Any such benefits are covered by the TRAs and will increase the amounts due thereunder.
We cannot be certain that future advances in criminal capabilities, the discovery of new vulnerabilities or other developments will not compromise or breach the security measures protecting the networks, systems and applications we use. Indebtedness Risks Our indebtedness may expose us to material risks.
We cannot 22 Table of Contents be certain that future advances in criminal capabilities, the discovery of new vulnerabilities or other developments will not compromise or breach the security measures protecting the networks, systems and applications we use. Indebtedness Risks Our indebtedness may expose us to material risks.
Under such scenario we would be required to pay the other parties to the TRAs 85% of such amount, or approximately $507 million, over generally a minimum of 15 years.
Under such scenario we would be required to pay the other parties to the TRAs 85% of such amount, or approximately $466 million, over generally a minimum of 15 years.
In connection with the severe market dislocations of 2008 and 2009, for example, the value of our AUM declined substantially. In the period from June 30, 2008 through March 31, 2009, our AUM decreased by approximately 43%, primarily as a result of 16 Table of Contents general market conditions.
In connection with the severe market dislocations of 2008 and 2009, for example, the value of our AUM declined substantially. In the period from June 30, 2008 through March 31, 2009, our AUM decreased by approximately 43%, primarily as a result of general market conditions.
We may be prohibited from selling these investments for a period of time and generally will be unable to sell these securities publicly unless their sale is registered under applicable securities law or unless an 19 Table of Contents exemption from such registration is available.
We may be prohibited from selling these investments for a period of time and generally will be unable to sell these securities publicly unless their sale is registered under applicable securities law or unless an exemption from such registration is available.
As a result, in certain circumstances, payments could be made under the TRAs in excess of the benefits that we actually realize in respect of the attributes to which the TRAs relate. 26 Table of Contents In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs.
As a result, in certain circumstances, payments could be made under the TRAs in excess of the benefits that we actually realize in respect of the attributes to which the TRAs relate. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs.
In addition, our third-party service providers and other intermediaries with which we conduct business and transmit data have in the past been, and may in the future be, subject to successful cyberattacks or other data security events, and, despite our service provider oversight processes and practices, we cannot ensure that such third parties have appropriate controls in place to protect the confidentiality of data in the custody of those third parties or to allow them to continue their business operations, including their services to us, in a timely manner.
In addition, our third-party service providers and other intermediaries with which we conduct business and transmit data have in the past been, and may in the future be, subject to successful cyberattacks or other data security events, and, despite our service provider oversight processes and practices, we cannot ensure that such third parties, or the service providers to such third parties, have appropriate controls in place to protect the confidentiality of data in the custody of such party or to allow them to continue their business operations, including the provision of their services to us.
We adjust these liabilities in light of changing facts and circumstances as well as consult with our outside tax advisors. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our estimates. We are subject to extensive, complex and sometimes overlapping laws, rules and regulations.
We adjust these liabilities in light of changing facts and circumstances and consultations with our outside tax advisors. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our estimates. We are subject to extensive, complex and sometimes overlapping laws, rules and regulations.
New strategies or vehicles, whether managed by a new team or by an existing team, may make investments or present operational, legal, regulatory, or distribution-related issues and risks that we have not yet encountered or with which we have less experience.
New strategies or vehicles, whether managed by a new team or by an existing team, can and do make investments or present operational, legal, regulatory, or distribution-related issues and risks that we have not yet encountered or with which we have less experience.
Changes in tax laws or exposure to additional tax liabilities could have a material impact on our financial condition, results of operations and liquidity. We are subject to income taxes, as well as non-income based taxes, in both the U.S. and various foreign jurisdictions at the federal, state and local levels of government.
Changes in tax laws or exposure to additional tax liabilities could have a material impact on our financial condition, results of operations and liquidity. We are subject to income taxes, as well as non-income based taxes, in both the U.S. and certain foreign jurisdictions at various levels of government.
We do not believe that we are an “investment company”, as such term is defined in Sections 3(a)(1)(A) and (C) of the 1940 Act. As its sole general partner, we control and operate Holdings.
We do not believe that we are an “investment company,” as such term is defined in Sections 3(a)(1)(A) and (C) of the 1940 Act. As its sole general partner, we control and operate Holdings.
We and our service providers are also subject to the risk that employees or contractors, or other third parties, may deliberately seek to circumvent established controls to commit 23 Table of Contents fraud or act in ways that are inconsistent with our or their controls, policies, and procedures, and which may be harder to monitor in remote working environments.
We and our service providers are also subject to the risk that employees or contractors, or other third parties, may deliberately seek to circumvent established controls to commit fraud or act in ways that are inconsistent with our or their controls, policies, and procedures, and which may be harder to monitor in remote working environments.
If the market price of our Class A common stock declines significantly, investors may be unable to sell shares of Class A common stock at or above their purchase price, if at all. The market price of our Class A common stock may fluctuate or decline significantly in the future.
If the market price of our Class A common stock declines significantly, investors may be unable to sell shares of Class A common 25 Table of Contents stock at or above their purchase price, if at all. The market price of our Class A common stock may fluctuate or decline significantly in the future.
Assuming no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits that are subject to the TRAs, we expect that the reduction in tax payments for us associated with (i) the merger described above; (ii) the purchase or exchange of partnership units from March 2013 through December 31, 2023; and (iii) projected future purchases or exchanges of partnership units would aggregate to approximately $553 million over generally a minimum of 15 years, assuming the future purchases or exchanges described in clause (iii) occurred at a price of $44.18 per share of our Class A common stock, the closing price of our Class A common stock on December 31, 2023.
Assuming no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits that are subject to the TRAs, we expect that the reduction in tax payments for us associated with (i) the merger described above; (ii) the purchase or exchange of partnership units from March 2013 through December 31, 2024; and (iii) projected future purchases or exchanges of partnership units would aggregate to approximately $501 million over generally a minimum of 15 years, assuming the future purchases or exchanges described in clause (iii) occurred at a price of $43.05 per share of our Class A common stock, the closing price of our Class A common stock on December 31, 2024.
Our two largest intermediary relationships across multiple distribution channels represented approximately 9% and 8% of our total AUM as of December 31, 2023. Intermediaries through which we distribute our mutual funds may also sell their own funds and technology-enabled investment solutions.
Our two largest intermediary relationships across multiple distribution channels represented approximately 9% and 8% of our total AUM as of December 31, 2024. Certain of our intermediaries through which we distribute our mutual funds also sell their own funds and technology-enabled investment solutions.
Alternatively, if a court were to find the forum selection clause inapplicable to, or unenforceable in respect of, one or more actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. Our indemnification obligations may pose substantial risks to our financial condition.
Alternatively, if a court were to find the forum selection clause inapplicable to, or unenforceable in respect of, one or more actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Several of our newest investment strategies are primarily offered through private funds, which present operational, regulatory and distribution-related risks that are different than those associated with the mutual funds and traditional separate accounts through which we offer our earlier investment strategies.
Several of our newer investment strategies are primarily offered through private funds, which present operational, regulatory and distribution-related risks that are different from those associated with the mutual funds and traditional separate accounts through which we offer our earlier investment strategies.
Any such alternatives may not be available to us on satisfactory terms or at all. 24 Table of Contents Our note purchase agreements and revolving credit agreement contain, and our future indebtedness may contain, various covenants that may limit our business activities.
Any such alternatives may not be available to us on satisfactory terms or at all. Our note purchase agreements and revolving credit agreement contain, and our future indebtedness may contain, various covenants that may limit our business activities.
As of December 31, 2023, we believe we are in compliance with all of the covenants set forth in the agreements.
As of December 31, 2024, we believe we are in compliance with all of the covenants set forth in the agreements.
This may create actual and potential conflicts of interest between us and certain of our investors and their affiliates (including certain of our directors). Item 1B. Unresolved Staff Comments None
This may create actual and potential conflicts of interest between us and certain of our investors and their affiliates (including certain of our directors). 27 Table of Contents Item 1B. Unresolved Staff Comments None
Investors in many of the funds we advise can redeem their investments at any time without prior notice or with fairly limited notice, which would reduce our assets under management and could adversely affect our earnings.
Investors in many of the funds we advise can redeem their investments at any time without prior notice or with fairly limited notice, which would reduce our AUM and could adversely affect our earnings.
Any person acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our restated certificate of incorporation.
Any person acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to 26 Table of Contents have consented to this provision of our restated certificate of incorporation.
If we were to elect to terminate the TRAs associated with (i) the merger described above; (ii) the purchase or exchange of partnership units from March 2013 through December 31, 2023; and (iii) projected future purchases or exchanges of partnership units, as of December 31, 2023, based on a share price of $44.18 per share of Class A common stock and certain other assumptions, we estimate that we would be required to pay approximately $349 million in the aggregate under the TRAs.
If we were to elect to terminate the TRAs associated with (i) the merger described above; (ii) the purchase or exchange of partnership units from March 2013 through December 31, 2024; and (iii) projected future purchases or exchanges of partnership units, as of December 31, 2024, based on a share price of $43.05 per share of Class A common stock and certain other assumptions, we estimate that we would be required to pay approximately $340 million in the aggregate under the TRAs.
Difficult market conditions typically adversely affect our business in many ways, including by reducing our assets under management and causing clients to withdraw funds, each of which reduces our revenues and impacts our financial condition.
Difficult market conditions typically adversely affect our business in many ways, including by reducing our AUM and causing clients to withdraw funds, each of which reduces our revenues and impacts our financial condition.
Our newer strategies, and strategies we may offer in the future, may also invest in certain instruments (such as derivative securities) and engage in activities (such as shorting and use of leverage) the complexity of which may place additional demands on our existing operational infrastructure and our existing employees, and increase the risk of operational errors.
Several of our existing strategies, and strategies we may offer in the future, can and do invest in certain instruments (such as derivative securities) and engage in activities (such as shorting and use of leverage) the complexity of which may place additional demands on our existing operational infrastructure and our existing employees, and increase the risk of operational errors.
Offering private funds also poses risks associated with side by side management and the potential for real or perceived conflicts of interest, which, if not managed correctly, could cause reputational harm, regulatory scrutiny or litigation. Although we have established policies and procedures to manage potential conflicts of interest, we are unable to completely eliminate these risks.
Offering private funds also poses risks associated with side-by-side management and the potential for real or perceived conflicts of interest, which, if not managed correctly, could cause reputational harm, regulatory scrutiny or litigation. We have established policies and procedures to manage potential conflicts of interest associated with side-by-side management.
These consultants review and evaluate our products and our firm from time to time. As of December 31, 2023, the investment consultant advising the largest portion of our AUM represented approximately 5% of our total AUM.
These consultants review and evaluate our products and our firm from time to time. As of December 31, 2024, the investment consultant advising the largest portion of our AUM represented approximately 4% of our total AUM.
As of December 31, 2023, approximately 57% of our AUM were invested in strategies that primarily invest in securities of non-U.S. companies. Some of our other strategies also invest on a more limited basis in securities of non-U.S. companies. Approximately 46% of our AUM were invested in securities denominated in currencies other than the U.S. dollar at December 31, 2023.
As of December 31, 2024, approximately 54% of our AUM were invested in strategies that primarily invest in securities of non-U.S. companies. Some of our other strategies also invest on a more limited basis in securities of non-U.S. companies. Approximately 45% of our AUM were invested in securities denominated in currencies other than the U.S. dollar at December 31, 2024.
We expect to cause Holdings, a Delaware limited partnership, to make distributions to its partners, including us, in an amount sufficient for us to pay dividends.
We expect to cause Holdings, a Delaware limited partnership, to make 23 Table of Contents distributions to its partners, including us, in an amount sufficient for us to pay dividends.
A number of factors, including the following, serve to increase our competitive risks: • Unlike some of our competitors, we do not currently engage in impact investing, offer passive investment strategies, exchange-traded funds or “solutions” products like target-date funds. • A number of our competitors have greater financial, technical, marketing and other resources, more comprehensive name recognition and more personnel than we do. • Potential competitors have a relatively low cost of entering the investment management industry. • Some investors may prefer to invest with an investment manager that is not publicly traded based on the perception that a publicly-traded asset manager may focus on the manager’s own growth to the detriment of investment performance. • Other industry participants may seek to recruit our investment professionals. • Many competitors charge lower fees for their investment management services than we do.
A number of factors, including the following, serve to increase our competitive risks: • Unlike some of our competitors, we do not currently engage in impact investing, offer passive investment strategies, exchange-traded funds or “solutions” products like target-date funds. • A number of our competitors have greater financial, technical, marketing and other resources, more comprehensive name recognition and more personnel than we do. • Potential competitors have a relatively low cost of entering the investment management industry. • Some investors may prefer to invest with an investment manager that is not publicly traded based on the perception that a publicly-traded asset manager may focus on the manager’s own growth to the detriment of investment performance. • Other industry participants may seek to recruit our investment professionals. • Many competitors charge lower fees for their investment management services than we do. 16 Table of Contents • We have less experience in the management and distribution of alternative products, toward which investor allocations are growing, as compared to active equity products.
Market and Investment Performance Risks Poor investment performance over the long-term leads to a loss of assets under management which reduces our revenues and negatively impacts our financial condition. The performance of our investment strategies is critical in retaining existing client assets and in attracting new client assets.
Market and Investment Performance Risks Poor investment performance leads to a loss of AUM which reduces our revenues and negatively impacts our financial condition. The performance of our investment strategies is critical in retaining existing client assets and in attracting new client assets.
These investors may redeem for any number of reasons, including general financial market conditions, the absolute or relative investment performance we have achieved, or their own financial condition and requirements. In a declining stock market, the pace of redemptions could accelerate. These redemptions would reduce our AUM and adversely affect our revenues.
Investors may redeem for any number of reasons, including general financial market conditions, the absolute or relative investment performance we have achieved, or their own financial condition and requirements. In a declining stock market, the pace of redemptions could accelerate.
Despite the measures we have taken and may in the future take to address and mitigate cybersecurity and other technology risks, we cannot guarantee that our systems, networks and applications, and those of third parties on whom we rely, will not be subject to disruptions, system failures or outages, unauthorized access, ransomware, breaches or other interference.
Despite the measures we have taken and may in the future take to address and mitigate cybersecurity and other technology risks, which are discussed further in “Item 1C—Cybersecurity” in Part I of this report, we cannot guarantee that our systems, networks and applications, and those of third parties on whom we rely, will not be subject to disruptions, system failures or outages, unauthorized access, ransomware, breaches or other interference.
Downward pressure on fees may also result from the growth and evolution of the universe of potential investments in a market or asset class or by transformative pressures impacting the investment management industry, including the continued growth of allocations to passive and alternative investment options.
Downward pressure on fees results from additional factors, including the growth and evolution of the universe of potential investments in a market or asset class or by transformative pressures impacting the investment management industry, such as the continued growth of allocations to passive and alternative investment options.
The loss of any of these key professionals could limit our ability to successfully execute our business strategy or adversely affect our ability to retain existing and attract new client assets and related revenues.
Despite our efforts to implement succession plans with respect to these key professionals, the loss of any of these key professionals could limit our ability to successfully execute our business strategy or adversely affect our ability to retain existing and attract new client assets and related revenues.
Misconduct or perceived misconduct by our employees, or even unsubstantiated allegations of such conduct, could cause serious damage to our reputation, resulting in the loss of clients and an adverse effect on our revenues. Employee misconduct could also subject us to regulatory scrutiny and legal liability.
Misconduct or perceived misconduct by our employees, or even unsubstantiated allegations of such conduct, could cause serious damage to our reputation, resulting in the loss of clients and an adverse effect on our revenues.
If we are unsuccessful in maintaining such an environment or compensation levels or structures, our existing investment professionals may leave our firm or fail to produce their best work on a consistent, long-term basis and/or we may be unsuccessful in attracting talented new investment professionals, any of which could negatively impact the performance of our investment strategies, our financial results and our ability to grow.
If we are unsuccessful in maintaining such an environment or compensation levels or structures, for example if the activities we undertake in pursuit of growing our alternatives-focused business impacts our ability to simultaneously maintain our traditional equity-focused investment teams and strategies, our existing investment professionals may leave our firm or fail to produce their best work on a consistent, long-term basis and/or we may be unsuccessful in attracting talented new investment professionals, any of which could negatively impact the performance of our investment strategies, our financial results and our ability to grow.
In recent years, however, there has been a general trend toward lower fees in the investment management industry as a result of competition and regulatory and legal pressures.
However, the general trend toward lower fees in the investment management industry as a result of competition and regulatory and legal pressures continues.
The majority of our assets under management are managed in primarily long-only, equity investment strategies, which exposes us to greater risk than certain of our competitors who may manage more assets in diverse strategies. 19 of our 25 investment strategies, which accounted for over 90% of our AUM as of December 31, 2023, invest primarily in publicly-traded equity securities.
Redemptions reduce our AUM and adversely affect our revenues. 17 Table of Contents The majority of our AUM are managed in primarily long-only, equity investment strategies, which exposes us to greater risk than certain of our competitors who may manage more assets in diverse strategies. 19 of our 25 investment strategies, which accounted for over 90% of our AUM as of December 31, 2024, invest primarily in publicly-traded equity securities.
We expect the costs associated with establishing a new investment team, strategy or vehicle to initially exceed the revenues generated, which will negatively impact our results of operations.
We also look to develop new, differentiated strategies managed by our existing teams. We expect the costs associated with establishing a new investment team, strategy or vehicle to initially exceed the revenues generated, which will negatively impact our results of operations.
The expansion of our business inside and outside of the United States raises tax and regulatory risks, may adversely affect our profit margins and places additional demands on our resources and employees. We continue to expand our distribution efforts into non-U.S. markets.
Employee misconduct could also subject us to regulatory scrutiny and legal liability. 19 Table of Contents The expansion of our business inside and outside of the United States raises tax and regulatory risks, may adversely affect our profit margins and places additional demands on our resources and employees. We continue to expand our distribution efforts into non-U.S. markets.
Poor reviews or evaluations of us or a particular strategy may result in client withdrawals or may impair our ability to attract new assets through these consultants. The investment management industry is intensely competitive.
Poor reviews or evaluations of us or a particular strategy may result in client withdrawals or may impair our ability to attract new assets through these consultants. The investment management industry is intensely competitive and experiencing transformative pressures. Failure to address these transformative pressures and remain competitive could negatively impact our business.
The equity we award to our investment professionals consists of a mix of standard restricted shares which vest pro rata over the five years following the year of grant, and career or franchise shares that generally vest on, or 18 months after, a “qualified retirement” as defined in the applicable award agreement.
We also provide supplemental incentive payments to investment professionals in support of new or subscale teams or strategies or franchise development efforts. 13 Table of Contents The equity we award to our investment professionals consists of a mix of standard restricted shares which vest pro rata over the five years following the year of grant, and career or franchise shares that generally vest on, or 18 months after, a “qualified retirement” as defined in the applicable award agreement.
Any of our key professionals may resign at any time, retire, join our competitors or form a competing company. Although many of our portfolio managers and each of our named executive officers are subject to one-year post-employment non-compete obligations, these non-competition provisions are not enforceable in certain jurisdictions or may not be enforceable to their full extent.
Although many of our portfolio managers and each of our named executive officers are subject to one-year post-employment non-compete obligations, these non-competition provisions are not enforceable in certain jurisdictions or may not be enforceable to their full extent.
The failure of any key vendor, or of any service provider to a key vendor, to fulfill its obligations could cause operational issues that could lead to legal liability, regulatory issues, reputational harm and financial losses.
The failure of any key vendor, or of any service provider to a key vendor, to fulfill its obligations could cause operational issues that could lead to legal liability, regulatory issues, reputational harm and financial losses, the likelihood of which increases as we increase reliance on third-party service providers.
Our newest investment strategies and strategies we may establish in the future present certain investment, operational, distribution and other risks that are different in kind and/or degree from those presented by our earlier investment strategies and dealing with those risks could place additional demands on our existing operational infrastructure and employees.
Our newest investment strategies and strategies we may establish in the future present certain investment, operational, distribution and other risks that are different in kind and/or degree from those presented by our earlier investment strategies and dealing with those risks presents us with new challenges.
We prepare or supervise the preparation of Artisan Funds’ regulatory filings and financial statements, and manage compliance and regulatory matters. We provide shareholder services, accounting services including the supervision of the activities of Artisan Funds’ accounting services provider in the calculation of the funds’ net asset values, and tax services including calculation of dividend and distribution amounts.
We provide shareholder services, accounting services including the supervision of the activities of Artisan Funds’ accounting services provider in the calculation of the funds’ net asset values, and tax services including calculation of dividend and distribution amounts. We also coordinate the audits of financial statements and supervise tax return preparation.
Financial markets have experienced, and may continue to experience, volatility and disruption amid continued concerns about elevated inflation, interest rate increases, effects of geopolitical tensions, conflicts, and wars, and other global economic conditions. This continued volatility and uncertainty in global financial markets has impacted the value of our AUM.
Financial markets have experienced, and may continue to experience, volatility and disruption amid continued concerns about elevated inflation, uncertainty around the timing and extent of changes in interest rates, effects of geopolitical tensions, conflicts and wars, and other global economic conditions.
The implementation of new or modified compensation arrangements or long-term incentive programs has in the past led to friction within our investment teams. Future modifications to compensation arrangements or long-term incentive programs could cause instability within our investment teams if those modifications were perceived to negatively impact portfolio managers’ economic outcomes or treated teams differently from one another.
Future modifications to compensation arrangements or long-term incentive programs, or other decisions relating to resource allocation, could cause instability within our investment teams if those modifications or decisions were perceived to negatively impact portfolio managers’ economic outcomes or treated teams differently from one another.
Under the 1940 Act, each of the investment advisory agreements between SEC-registered mutual funds and our subsidiary, Artisan Partners Limited Partnership, will terminate automatically in the event of its assignment.
A change of control could result in termination of our investment management agreements with mutual funds and could trigger consent requirements in our other investment management agreements. Under the 1940 Act, each of the investment management agreements between SEC-registered mutual funds and our subsidiary, Artisan Partners Limited Partnership, will terminate automatically in the event of its assignment.
However, because our clients invest in our investment strategies in order to gain exposure to the portfolio securities of the respective strategies, we have not adopted corporate-level risk management policies to manage market, interest rate, or exchange rate risks that would affect the value of our overall AUM.
However, because our clients invest in our investment strategies in order to gain exposure to the portfolio securities of the respective strategies, we have not adopted corporate-level risk management policies to manage market, interest rate, or exchange rate risks that would affect the value of our overall AUM. 18 Table of Contents We provide a range of services to Artisan Funds, Artisan Global Funds, Artisan Private Funds and sub-advised funds which may expose us to liability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe plan outlines roles and responsibilities and sets forth escalation points to ensure that appropriate individuals and groups are notified and provided relevant information depending on the type and severity of the incident.
Biggest changeThe incident response plan establishes mechanisms by which we determine the scope of and potential damage caused by the incident and determine and execute the appropriate response. The plan outlines roles and responsibilities and sets forth escalation points to ensure that appropriate individuals and groups are notified and provided relevant information depending on the type and severity of the incident.
As the third line of defense, our internal audit team provides periodic and independent assurance that the firm’s internal controls are implemented and operating effectively.
As the third line of defense, our internal audit team provides periodic independent assurance that the firm’s internal controls are implemented and operating effectively.
We use third party security firms for security consulting, including configuration reviews and assessments, as well as performing periodic (no less frequently than annual) penetration tests to evaluate the integrity of our systems. We also conduct monitoring and testing activities, such as phishing simulations.
We use third party security firms for security consulting, including configuration reviews and assessments, as well as performing periodic (no less frequently than annual) penetration tests to evaluate the integrity of our systems. We also conduct internal monitoring and testing activities, such as phishing simulations.
As the second line of defense, the legal, compliance and information security governance functions provide guidance and training, as well as perform monitoring, testing and surveillance activities relating to compliance with the firm’s policies and procedures, applicable laws and regulations, contractual requirements, ethical standards and industry best practices.
As the second line of defense, the legal, compliance and information security governance functions provide guidance and training and perform monitoring, testing and surveillance activities relating to compliance with the firm’s policies and procedures, applicable laws and regulations, contractual requirements, ethical standards and industry best practices.
Our associates receive annual, mandatory information security training, which includes information regarding specific policies and procedures and education on risks such as phishing attacks, social engineering, password management and privacy. New associates receive cybersecurity training as part of their orientation process.
Our associates receive annual, mandatory information security training, which includes information regarding specific policies and procedures and education on cyber risks such as phishing attacks, social engineering, password management and privacy. New associates receive cybersecurity training as part of their orientation process.
Cybersecurity incidents are reported to each of the Company’s Chief Legal Officer, Chief Administrative Officer, and the Chair of the Artisan Risk and Integrity Committee, who oversee the investigation and remain apprised of information regarding the remediation of the incident.
Cybersecurity incidents are reported to each of the Company’s Chief Legal Officer, Chief Administrative Officer, Chief Operating Officer and the Chair of the Artisan Risk and Integrity Committee, who oversee the investigation and remain apprised of information regarding the remediation of the incident.
We also consider contingency plans in the event a key service provider is not able to provide its respective services. In addition, our internal audit team periodically tests the firm’s management and oversight of certain key third-party service providers, including those overseen by the service provider oversight committee, as well as third parties that support financial reporting.
We also consider contingency plans in the event a key service provider is not able to provide its respective services. 28 Table of Contents In addition, our internal audit team periodically tests the firm’s management and oversight of certain key third-party service providers, including those overseen by the service provider oversight committee, as well as third parties that support financial reporting.
The information security governance team is led by our Chief Information Security Officer (CISO), who is a Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM) and Certified Information Systems Security Professional (CISSP) and has 37 years of experience in the field of cybersecurity. Our CISO reports directly to our Chief Legal Officer and General Counsel.
The information security governance team is led by our Chief Information Security Officer (CISO), who is a Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM) and Certified Information Systems Security Professional (CISSP) and has almost 40 years of experience in the field of cybersecurity. Our CISO reports directly to our Chief Legal Officer and General Counsel.
The Audit Committee also reviews the Company’s cybersecurity insurance 30 Table of Contents program on an annual basis in connection with the program’s renewal and receives periodic reports from our Director of Internal Audit regarding internal audits of our information security program.
The Audit Committee also reviews the Company’s cybersecurity insurance program on an annual basis in connection with the program’s renewal and receives periodic reports from our Director of Internal Audit regarding internal audits of our information security program.
Together, these teams maintain a robust information 29 Table of Contents security program that utilizes a multi-layered defense-in-depth strategy and is designed to prevent, detect, mitigate and remediate cybersecurity incidents. Our information security program is subject to periodic internal audits and independent third-party reviews.
Together, these teams maintain a robust information security program that utilizes a multi-layered defense-in-depth strategy and is designed to prevent, detect, mitigate and remediate cybersecurity incidents. Our information security program is subject to periodic internal audits and independent third-party reviews.
On a quarterly basis, management reports on any significant cybersecurity events and trends impacting the Company. Annually, our CIO and CISO report to the Audit Committee on our information security program, including with respect to team updates, key areas of risk and the effectiveness of the program.
On a quarterly basis, management reports on any significant cybersecurity events or trends impacting the Company. Annually, our CIO, Director of Technical Services and CISO report to the Audit Committee on our information security program, including with respect to team updates, key areas of risk and the effectiveness of the program.
This team is led by our Director of Technical Services, who has 32 years of information technology experience, and reports to our Chief Information Officer (CIO), who has 40 years of information technology experience.
This team is led by our Director of Technical Services, who has over 30 years of information technology experience, and reports to our Chief Information Officer (CIO), who has over 40 years of information technology experience.
The Artisan Risk and Integrity Committee, which includes members of the Company’s senior leadership team including senior representation from the firm’s operations, distribution, finance, internal audit, investment strategy and legal functions, facilitates our annual enterprise risk assessment process, which uses a top-down approach to identify and prioritize key risks to achieving our purpose and maintaining our business model.
The Artisan Risk and Integrity Committee, which includes members of the Company’s senior leadership team including senior representation from the firm’s operations, distribution, finance, internal audit, investment strategy and legal functions, facilitates our annual enterprise risk assessment process, which identifies and prioritizes key risks to achieving our purpose and maintaining our business model.
In the normal course of business, executive management is informed about the prevention, detection, mitigation and remediation of cybersecurity risks through these established reporting lines and through its oversight of the information security program.
In the normal course of business, executive management is informed about the prevention, detection, mitigation and remediation of cybersecurity risks through the established reporting lines of the CIO and CISO and through its oversight of the information security program. In the event a cybersecurity incident occurs, our incident response plan provides guidance in assessing and responding to the incident.
Removed
Outside of the normal course of business, in the event a cybersecurity incident occurs, our incident response plan provides guidance in assessing and responding to the incident. The incident response plan establishes mechanisms by which we determine the scope of and potential damage caused by the incident and determine and execute the appropriate response.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures Not applicable Information about our Executive Officers Information regarding our executive officers is as follows: Eric R. Colson, age 54, has been chief executive officer and a director of Artisan Partners Asset Management since March 2011. Mr.
Biggest changeItem 4. Mine Safety Disclosures Not applicable 29 Table of Contents Information about our Executive Officers Information regarding our executive officers is as follows: Eric R. Colson, age 55, has been chief executive officer and a director of Artisan Partners Asset Management since March 2011. Mr.
Colson also served as the president of Artisan Partners Asset Management from March 2011 to January 2021 and as chairman of the Company’s board of directors from August 2015 to August 2021. Mr. Colson has served as the chief executive officer of Artisan Partners since January 2010. Prior to January 2010, Mr.
Colson also served as the president of Artisan Partners Asset Management from March 2011 to January 2021 and as chairman of the Company’s Board from August 2015 to August 2021. Mr. Colson has served as the chief executive officer of Artisan Partners since January 2010. Prior to January 2010, Mr.
Krein has been a managing director of Artisan Partners since he joined the firm in September 2015. Eileen L. Kwei, age 45, has been executive vice president and chief administrative officer of Artisan Partners Asset Management since January 2021. From February 2018 to January 2021, Ms. Kwei was responsible for institutional marketing and client service for the Artisan Credit team.
Krein has been a managing director of Artisan Partners since he joined the firm in September 2015. Eileen L. Kwei, age 46, has been executive vice president and chief administrative officer of Artisan Partners Asset Management since January 2021. From February 2018 to January 2021, Ms. Kwei was responsible for institutional marketing and client service for the Artisan Credit team.
Samuel B. Sellers, age 41, has been executive vice president and chief operating officer of Artisan Partners Asset Management since January 2023. Prior to his current role, Mr. Sellers was head of Investment Operations from January 2021. Previously, he served as deputy general counsel from January 2015 and associate counsel from April 2013. Laura E.
Samuel B. Sellers, age 42, has been executive vice president and chief operating officer of Artisan Partners Asset Management since January 2023. Prior to his current role, Mr. Sellers was head of Investment Operations from January 2021. Previously, he served as deputy general counsel from January 2015 and associate counsel from April 2013. Laura E.
Colson served as chief operating officer of investment operations from March 2007 through January 2010. Mr. Colson has been a managing director of Artisan Partners since he joined the firm in January 2005. Charles J. Daley, Jr., age 61, has been executive vice president, chief financial officer and treasurer of Artisan Partners Asset Management since March 2011.
Colson served as chief operating officer of investment operations from March 2007 through January 2010. Mr. Colson has been a managing director of Artisan Partners since he joined the firm in January 2005. Charles J. Daley, Jr., age 62, has been executive vice president, chief financial officer and treasurer of Artisan Partners Asset Management since March 2011.
Prior to February 2018, Ms. Kwei was a relationship manager for the Artisan Global Equity team. Ms. Kwei joined Artisan Partners in June 2013 and has been a managing director of Artisan Partners since 2018. Gregory K. Ramirez, age 53, has been executive vice president of Artisan Partners Asset Management since February 2016.
Prior to February 2018, Ms. Kwei was a relationship manager for the Artisan Global Equity team. Ms. Kwei joined Artisan Partners in June 2013 and has been a managing director of Artisan Partners since 2018. Gregory K. Ramirez, age 54, has been executive vice president of Artisan Partners Asset Management since February 2016.
Krein, age 52, has been executive vice president of Artisan Partners Asset Management and Artisan Partners’ head of Global Distribution since January 2020. Prior to becoming head of Global Distribution, Mr. Krein was responsible for institutional marketing and client service for the Artisan Developing World team. Mr.
Krein, age 53, has been executive vice president of Artisan Partners Asset Management and Artisan Partners’ head of Global Distribution since January 2020. Prior to becoming head of Global Distribution, Mr. Krein was responsible for institutional marketing and client service for the Artisan Developing World team. Mr.
He has served as the chief financial officer of Artisan Partners since August 2010 and has been a managing director since July 2010 when he joined the firm. Jason A. Gottlieb, age 54, has been president of Artisan Partners Asset Management since January 2021.
He has served as the chief financial officer of Artisan Partners since August 2010 and has been a managing director since July 2010 when he joined the firm. Jason A. Gottlieb, age 55, has been president of Artisan Partners Asset Management since January 2021.
Simpson, age 48, has been executive vice president, chief legal officer and secretary of Artisan Partners Asset Management since October 2023. From January 2023 to October 2023 she served as assistant secretary of Artisan Partners Asset Management. She has served as general counsel of Artisan Partners since October 2022.
Simpson, age 49, has been executive vice president, chief legal officer and secretary of Artisan Partners Asset Management since October 2023. From January 2023 to October 2023 she served as assistant secretary of Artisan Partners Asset Management. She has served as general counsel of Artisan Partners since October 2022.
Prior to then she served as deputy general counsel from January 2015 and associate counsel from April 2011. 31 Table of Contents PART II
Prior to then she served as deputy general counsel from January 2015 and associate counsel from April 2011. 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the Years Ended December 31, 2019 2020 2021 2022 2023 Artisan Partners Asset Management Inc. $ 166.53 $ 284.70 $ 292.39 $ 200.90 $ 321.79 S&P 500 Index $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Dow Jones U.S.
Biggest changeFor the Years Ended December 31, 2020 2021 2022 2023 2024 Artisan Partners Asset Management Inc. $ 170.96 $ 175.58 $ 120.64 $ 193.24 $ 202.52 S&P 500 Index $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Dow Jones U.S.
In determining the amount of any future dividends, our board of directors will take into account: (i) our financial results, (ii) our available cash, as well as anticipated cash requirements (including debt servicing, seed capital for new investment strategies and vehicles, and cash required to support growth and strategic initiatives), (iii) our capital requirements and the capital requirements of our subsidiaries (including Holdings), (iv) contractual, legal, tax and regulatory restrictions on, and implications of, the payment of dividends by us to our stockholders or by our subsidiaries (including Holdings) to us, including the obligation of Holdings to make tax distributions to the holders of partnership units (including us), (v) general economic and business conditions and (vi) any other factors that our board of directors may deem relevant.
In determining the amount of any future dividends, our Board will take into account: (i) our financial results, (ii) our available cash, as well as anticipated cash requirements (including debt servicing, seed capital for new investment strategies and vehicles, and cash required to support growth and strategic initiatives), (iii) our capital requirements and the capital requirements of our subsidiaries (including Holdings), (iv) contractual, legal, tax and regulatory restrictions on, and implications of, the payment of dividends by us to our stockholders or by our subsidiaries (including Holdings) to us, including the obligation of Holdings to make tax distributions to the holders of partnership units (including us), (v) general economic and business conditions and (vi) any other factors that our Board may deem relevant.
Performance Graph The following graph compares the year-end cumulative total stockholder return of our Class A common stock during the five-year period ended December 31, 2023, with the year-end cumulative total return of the S&P 500 ® and the Dow Jones U.S. Asset Managers Index.
Performance Graph The following graph compares the year-end cumulative total stockholder return of our Class A common stock during the five-year period ended December 31, 2024, with the year-end cumulative total return of the S&P 500 ® and the Dow Jones U.S. Asset Managers Index.
The declaration and payment of all future dividends, if any, will be at the sole discretion of our board of directors.
The declaration and payment of all future dividends, if any, will be at the sole discretion of our Board.
Subject to Board approval each quarter, we currently expect to pay a quarterly dividend of approximately 80% of the cash the Company generates each quarter.
Subject to Board approval each quarter, we currently expect to pay a quarterly dividend of approximately 80% of the cash the Company generates each quarter from operations.
A stockholder who invested in APAM at its IPO on March 7, 2013, at the IPO price of $30 per share would have experienced a 9% annual total return as of December 31, 2023 if all dividends were retained, compared to a 13% annual total return if all dividends were reinvested.
A stockholder who invested in APAM at its IPO on March 7, 2013, at the IPO price of $30 per share would have experienced a 9% annual total return as of December 31, 2024 if all dividends were retained, compared to a 12% annual total return if all dividends were reinvested.
There were no such issuances during the three months ended December 31, 2023. Item 6. [Reserved] 33 Table of Contents
There were no such issuances during the three months ended December 31, 2024. 32 Table of Contents Item 6. [Reserved]
Dividend Policy During the first quarter of 2024, our board of directors declared a variable quarterly dividend of $0.68 per share with respect to the fourth quarter of 2023 and a special annual dividend of $0.34 per share. The variable quarterly dividend of $0.68 per share represents approximately 80% of the cash generated in the fourth quarter of 2023.
Dividend Policy During the first quarter of 2025, our Board declared a variable quarterly dividend of $0.84 per share with respect to the fourth quarter of 2024 and a special annual dividend of $0.50 per share. The variable quarterly dividend of $0.84 per share represents approximately 80% of the cash generated in the fourth quarter of 2024.
As of February 19, 2024, there were approximately 123 stockholders of record of our Class A common stock, 22 stockholders of record of our Class B common stock, and 25 stockholders of record of our Class C common stock.
As of February 21, 2025, there were approximately 119 stockholders of record of our Class A common stock, 19 stockholders of record of our Class B common stock, and 29 stockholders of record of our Class C common stock.
Asset Managers Index $ 126.72 $ 145.92 $ 205.19 $ 160.83 $ 197.56 The above table is provided pursuant to SEC regulations and the outcomes are impacted significantly by beginning- and end-point stock price, as well as the price at which dividends are reinvested.
Asset Managers Index $ 115.15 $ 161.92 $ 126.91 $ 155.90 $ 215.15 The above table is provided pursuant to SEC regulations and the outcomes are impacted significantly by beginning- and end-point stock price, as well as the price at which dividends are reinvested.
Removed
After the end of the year, our Board will consider paying a special dividend after determining the amount of cash needed for general corporate purposes and investments in growth and strategic initiatives.
Added
After the end of the year, our Board will consider payment of a special dividend from the 20% withheld each quarter plus any discrete sources and uses of cash throughout the year, including gains realized upon seed capital redemptions and investments redeemed in connection with forfeited franchise capital awards. 31 Table of Contents We intend to fund dividends from our portion of distributions made by Holdings from its available cash generated from operations.
Removed
Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy or at all. 32 Table of Contents We intend to fund dividends from our portion of distributions made by Holdings from its available cash generated from operations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeValue International Value Global Value Sustainable Emerging Markets Credit Developing World Antero Peak Group EMsights Capital Group Total December 31, 2023 (unaudited; in millions) Beginning assets under management $ 33,977 $ 20,623 $ 6,088 $ 30,210 $ 21,767 $ 873 $ 7,140 $ 3,466 $ 3,676 $ 72 $ 127,892 Gross client cash inflows 3,730 1,486 452 8,190 2,092 138 3,623 585 342 757 21,395 Gross client cash outflows (6,570) (3,822) (762) (4,415) (3,755) (236) (2,063) (1,513) (2,331) (4) (25,471) Net client cash flows (2,840) (2,336) (310) 3,775 (1,663) (98) 1,560 (928) (1,989) 753 (4,076) Artisan Funds’ distributions not reinvested (1) (11) (27) (36) (325) (15) — (270) — — — (684) Investment returns and other (2) 7,420 2,616 1,315 7,349 5,581 142 1,253 915 414 30 27,035 Ending assets under management $ 38,546 $ 20,876 $ 7,057 $ 41,009 $ 25,670 $ 917 $ 9,683 $ 3,453 $ 2,101 $ 855 $ 150,167 Average assets under management $ 36,541 $ 20,798 $ 6,514 $ 35,990 $ 23,332 $ 874 $ 8,328 $ 3,512 $ 3,041 $ 391 $ 139,321 December 31, 2022 Beginning assets under management $ 52,434 $ 32,998 $ 8,053 $ 31,816 $ 26,744 $ 1,173 $ 8,157 $ 8,102 $ 5,277 $ — $ 174,754 Gross client cash inflows 7,069 3,252 544 7,560 2,759 293 3,021 1,599 1,064 66 27,227 Gross client cash outflows (8,579) (8,681) (1,617) (6,617) (4,003) (226) (3,033) (2,998) (1,286) — (37,040) Net client cash flows (1,510) (5,429) (1,073) 943 (1,244) 67 (12) (1,399) (222) 66 (9,813) Artisan Funds’ distributions not reinvested (1) (5) (35) (47) (173) (16) — (209) (7) (5) — (497) Investment returns and other (2) (16,942) (6,911) (845) (2,376) (3,717) (367) (796) (3,230) (1,374) 6 (36,552) Ending assets under management $ 33,977 $ 20,623 $ 6,088 $ 30,210 $ 21,767 $ 873 $ 7,140 $ 3,466 $ 3,676 $ 72 $ 127,892 Average assets under management $ 38,565 $ 24,019 $ 7,146 $ 30,406 $ 23,574 $ 996 $ 7,548 $ 4,872 $ 4,350 $ 53 $ 141,516 December 31, 2021 Beginning assets under management $ 52,685 $ 32,056 $ 7,149 $ 24,123 $ 22,417 $ 679 $ 6,338 $ 8,853 $ 3,476 $ — $ 157,776 Gross client cash inflows 7,418 4,384 407 8,121 4,723 499 3,158 3,499 1,516 — 33,725 Gross client cash outflows (12,528) (5,313) (1,189) (4,057) (3,809) (54) (1,582) (3,035) (480) — (32,047) Net client cash flows (5,110) (929) (782) 4,064 914 445 1,576 464 1,036 — 1,678 Artisan Funds’ distributions not reinvested (1) (302) (545) (47) (701) (46) — (217) (286) (151) — (2,295) Investment returns and other (2) 5,161 2,416 1,733 4,330 3,459 49 460 (929) 916 — 17,595 Ending assets under management $ 52,434 $ 32,998 $ 8,053 $ 31,816 $ 26,744 $ 1,173 $ 8,157 $ 8,102 $ 5,277 $ — $ 174,754 Average assets under management $ 53,375 $ 33,679 $ 7,835 $ 28,998 $ 25,463 $ 924 $ 7,576 $ 9,541 $ 4,376 $ — $ 171,767 (1) Artisan Funds’ distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
Biggest changeValue Int’l Value Group Global Value SEM Credit Developing World Antero Peak Group Int’l Small-Mid EMsights Capital Group Total December 31, 2024 (unaudited; in millions) Beginning assets under management $ 38,546 $ 13,725 $ 7,057 $ 41,009 $ 25,670 $ 917 $ 9,683 $ 3,453 $ 2,101 $ 7,151 $ 855 $ 150,167 Gross client cash inflows 4,256 519 655 7,250 3,507 1,094 4,419 558 489 882 2,021 25,650 Gross client cash outflows (9,652) (2,685) (804) (6,238) (3,254) (552) (2,745) (887) (957) (1,494) (81) (29,349) Net client cash flows (2) (5,396) (2,166) (149) 1,012 253 542 1,674 (329) (468) (612) 1,940 (3,699) Artisan Funds’ distributions not reinvested (3) (112) (109) (11) (507) (31) — (360) — (46) (16) (1) (1,193) Investment returns and other 5,407 1,484 700 2,781 2,787 93 945 976 624 21 115 15,933 Ending assets under management $ 38,445 $ 12,934 $ 7,597 $ 44,295 $ 28,679 $ 1,552 $ 11,942 $ 4,100 $ 2,211 $ 6,544 $ 2,909 $ 161,208 Average assets under management $ 39,403 $ 13,688 $ 7,454 $ 44,170 $ 28,029 $ 1,414 $ 11,040 $ 3,917 $ 2,282 $ 7,096 $ 1,739 $ 160,232 December 31, 2023 Beginning assets under management $ 33,977 $ 13,871 $ 6,088 $ 30,210 $ 21,767 $ 873 $ 7,140 $ 3,466 $ 3,676 $ 6,752 $ 72 $ 127,892 Gross client cash inflows 3,730 764 452 8,190 2,092 138 3,623 585 342 722 757 21,395 Gross client cash outflows (6,570) (2,759) (762) (4,415) (3,755) (236) (2,063) (1,513) (2,331) (1,063) (4) (25,471) Net client cash flows (2) (2,840) (1,995) (310) 3,775 (1,663) (98) 1,560 (928) (1,989) (341) 753 (4,076) Artisan Funds’ distributions not reinvested (3) (11) (26) (36) (325) (15) — (270) — — (1) — (684) Investment returns and other 7,420 1,875 1,315 7,349 5,581 142 1,253 915 414 741 30 27,035 Ending assets under management $ 38,546 $ 13,725 $ 7,057 $ 41,009 $ 25,670 $ 917 $ 9,683 $ 3,453 $ 2,101 $ 7,151 $ 855 $ 150,167 Average assets under management $ 36,541 $ 13,849 $ 6,514 $ 35,990 $ 23,332 $ 874 $ 8,328 $ 3,512 $ 3,041 $ 6,949 $ 391 $ 139,321 December 31, 2022 Beginning assets under management $ 52,434 $ 23,581 $ 8,053 $ 31,816 $ 26,744 $ 1,173 $ 8,157 $ 8,102 $ 5,277 $ 9,417 $ — $ 174,754 Gross client cash inflows 7,069 1,385 544 7,560 2,759 293 3,021 1,599 1,064 1,867 66 27,227 Gross client cash outflows (8,579) (6,432) (1,617) (6,617) (4,003) (226) (3,033) (2,998) (1,286) (2,249) — (37,040) Net client cash flows (2) (1,510) (5,047) (1,073) 943 (1,244) 67 (12) (1,399) (222) (382) 66 (9,813) Artisan Funds’ distributions not reinvested (3) (5) (34) (47) (173) (16) — (209) (7) (5) (1) — (497) Investment returns and other (16,942) (4,629) (845) (2,376) (3,717) (367) (796) (3,230) (1,374) (2,282) 6 (36,552) Ending assets under management $ 33,977 $ 13,871 $ 6,088 $ 30,210 $ 21,767 $ 873 $ 7,140 $ 3,466 $ 3,676 $ 6,752 $ 72 $ 127,892 Average assets under management (4) $ 38,565 $ 16,722 $ 7,146 $ 30,406 $ 23,574 $ 996 $ 7,548 $ 4,872 $ 4,350 $ 7,297 $ 53 $ 141,516 (1) Effective March 31, 2024, the International Small-Mid team, managing the Non-U.S.
The Franchise Protection Clause provides that the total number of awards ultimately vesting will be reduced to the extent that cumulative net client cash outflows from the award recipient’s investment team during a specified measurement period exceeds a set threshold. Performance share units (“PSUs”) were granted to certain executive officers of the Company in 2020, 2021 and 2022.
The Franchise Protection Clause provides that the total number of career awards ultimately vesting will be reduced to the extent that cumulative net client cash outflows from the award recipient’s investment team during a specified measurement period exceeds a set threshold. Performance share units (“PSUs”) were granted to certain executive officers of the Company in 2020, 2021 and 2022.
Because, as is typical in the asset management industry, our rates of fee decline as the assets under our management in a relationship increase, and because of differences in our fees by investment strategy or investment vehicle, a change in the composition of our assets under management, in particular a shift of assets to strategies or vehicles with lower effective rates of fees, could have a material impact on our overall weighted average rate of fee.
Because, as is typical in the asset management industry, our rates of fee decline as the assets under our management in a relationship increase, and because of differences in our fees by investment strategy or investment vehicle, a change in the composition of our AUM, in particular a shift of assets to strategies or vehicles with lower effective rates of fees, could have a material impact on our overall weighted average rate of fee.
These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide meaningful information to analyze our profitability and efficiency between periods and over time.
These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time.
We expect to continue to make long-term incentive awards each year, though the form and structure of the awards may change as we seek to maximize alignment between our associates and our clients and stockholders. The actual amount of the expense over time will depend primarily on the size of awards made.
We expect to continue to make annual long-term incentive awards each year, though the form and structure of the awards may change as we seek to maximize alignment between our associates and our clients and stockholders. The actual amount of the expense over time will depend primarily on the size of awards made.
As of December 31, 2023, the trigger had not occurred and the capital had not yet been called, therefore the committed capital is not recorded in the Consolidated Statements of Financial Condition. The capital commitment terminates if the market trigger does not occur within three years of the October 30, 2023 initial closing date.
As of December 31, 2024, the trigger had not occurred and the capital had not yet been called, therefore the committed capital is not recorded in the Consolidated Statements of Financial Condition. The capital commitment terminates if the market trigger does not occur within three years of the October 30, 2023 initial closing date.
Assets Under Management and Investment Performance Changes to our operating results from one period to another are primarily caused by changes in the amount of our assets under management. Changes in the relative composition of our assets under management among our investment strategies and vehicles and the effective fee rates on our investment products also impact our operating results.
Assets Under Management and Investment Performance Changes to our operating results from one period to another are primarily caused by changes in the amount of our AUM. Changes in the relative composition of our AUM among our investment strategies and vehicles and the effective fee rates on our investment products also impact our operating results.
Growth, International Value, Global Opportunities, Global Equity, Value Equity, Global Value, Sustainable Emerging Markets, Global Discovery, Developing World, Non-U.S. Small-Mid Growth, International Explorer, Select Equity, and Value Income. Fixed Income includes the following investment strategies: High Income, Floating Rate, Emerging Markets Debt Opportunities, and Emerging Markets Local Opportunities.
Growth, International Value, Global Opportunities, Global Equity, Value Equity, Global Value, Sustainable Emerging Markets, Global Discovery, Developing World, Non-U.S. Small-Mid Growth, International Explorer, Select Equity, and Value Income. (2) Fixed Income includes the following investment strategies: High Income, Floating Rate, Emerging Markets Debt Opportunities, and Emerging Markets Local Opportunities.
Our investment management fees also differ by investment strategy, with higher-capacity strategies having lower standard fee rates than strategies with more limited capacity. 44 Table of Contents Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee, but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark.
Our investment management fees also differ by investment strategy, with higher-capacity strategies having lower standard fee rates than strategies with more limited capacity. 43 Table of Contents Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee, but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark.
The $100 million revolving credit facility was unused as of and for the year ended December 31, 2023. The fixed interest rate on each series of unsecured notes is subject to a 100 basis point increase in the event Holdings receives a below-investment grade rating and any such increase will continue to apply until an investment grade rating is received.
The $100 million revolving credit facility was unused as of and for the year ended December 31, 2024. The fixed interest rate on each series of unsecured notes is subject to a 100 basis point increase in the event Holdings receives a below-investment grade rating and any such increase will continue to apply until an investment grade rating is received.
Separate Accounts and Other Assets under management within the “separate accounts and other” category consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to clients for whom we provide investment models but do not have discretionary investment authority.
Separate Accounts and Other AUM within the “separate accounts and other” category consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to clients for whom we provide investment models but do not have discretionary investment authority.
These borrowings contain certain customary covenants including limitations on Artisan Partners Holdings’ ability to: (i) incur additional indebtedness or liens, (ii) engage in mergers or other fundamental changes, (iii) sell or otherwise dispose of assets 55 Table of Contents including equity interests, and (iv) make dividend payments or other distributions to Artisan Partners Holdings’ partners (other than, among others, tax distributions paid to partners for the purpose of funding tax liabilities attributable to their interests) when a default occurred and is continuing or would result from such a distribution.
These borrowings contain certain customary covenants including limitations on Artisan Partners Holdings’ ability to: (i) incur additional indebtedness or liens, (ii) engage in mergers or other fundamental changes, (iii) sell or otherwise dispose of assets including equity interests, and (iv) make dividend payments or other distributions to Artisan Partners Holdings’ partners (other than, among others, tax distributions paid to partners for the purpose of funding tax liabilities attributable to their interests) when a default occurred and is continuing or would result from such a distribution.
The size of long-term incentive awards will vary from year to year and will be influenced by our results and other factors.
The size of the annual long-term incentive awards will vary from year to year and will be influenced by our results and other factors.
The number of adjusted shares is derived by assuming the vesting of all unvested Class A share-based awards and the exchange of all outstanding limited partnership units of Artisan Partners Holdings for Class A common stock of APAM on a one-for-one basis. • Adjusted operating income represents the operating income of the consolidated company excluding compensation expense related to market valuation changes in compensation plans. • Adjusted operating margin is calculated by dividing adjusted operating income by total revenues. • Adjusted EBITDA represents adjusted net income before interest expense, income taxes, depreciation and amortization expense.
The number of adjusted shares is derived by assuming the vesting of all unvested Class A share-based awards and the exchange of all outstanding limited partnership units of Artisan Partners Holdings for Class A common stock of APAM on a one-for-one basis. • Adjusted operating income represents the operating income of the consolidated company excluding compensation expense related to market valuation changes in compensation plans and non-recurring expenses. • Adjusted operating margin is calculated by dividing adjusted operating income by total revenues. • Adjusted EBITDA represents adjusted net income before interest expense, income taxes, depreciation and amortization expense.
As of December 31, 2023, we have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E, and Series F, each with a balloon payment at maturity.
As of December 31, 2024, we have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending in August 2027. The notes are comprised of three series, Series D, Series E, and Series F, each with a balloon payment at maturity.
Our management is required to exercise judgment in developing our provision for income taxes, including the determination of deferred tax assets and liabilities and any valuation allowance that might be required against deferred tax assets. As of December 31, 2023, we have not recorded a valuation allowance on any deferred tax assets.
Our management is required to exercise judgment in developing our provision for income taxes, including the determination of deferred tax assets and liabilities and any valuation allowance that might be required against deferred tax assets. As of December 31, 2024, we have not recorded a valuation allowance on any deferred tax assets.
Accounts receivable primarily represent investment advisory fees that have been earned, but not yet received from our clients. We perform a review of our receivables on a monthly basis to assess collectability. As of December 31, 2023, none of our receivables were considered uncollectible.
Accounts receivable primarily represent investment advisory fees that have been earned, but not yet received from our clients. We perform a review of our receivables on a monthly basis to assess collectability. As of December 31, 2024, none of our receivables were considered uncollectible.
Our failure to comply with any of the covenants or restrictions described above could result in an event of default under the agreements, giving our lenders the ability to accelerate repayment of our obligations. We were in compliance with all debt covenants as of December 31, 2023.
Our failure to comply with any of the covenants or restrictions described above could result in an event of default under the agreements, giving our lenders the ability to accelerate repayment of our obligations. We were in compliance with all debt covenants as of December 31, 2024.
Our expenses fluctuate due to a number of factors, including the following: • variations in the amount of total compensation expense due to, among other things, changes in the amount of incentive compensation earned and equity awards made, variations in our employee count (including the addition of new investment teams) and changes in our product mix and other competitive factors; and • expenses, such as distribution fees, rent, professional service fees, technology and data-related costs, incurred, as necessary, to operate and grow our business.
Our expenses fluctuate due to a number of factors, including the following: • variations in the amount of total compensation expense due to, among other things, changes in the amount of incentive compensation earned and equity awards made, variations in our employee count (including the addition of new investment teams), changes in our product mix and other competitive factors; and • expenses, such as distribution fees, rent, professional service fees, technology and data-related costs, that are incurred to operate and grow our business.
Earnings Per Share Weighted average basic and diluted shares of Class A common stock outstanding were higher for the year ended December 31, 2023, compared to the year ended December 31, 2022, as a result of unit exchanges and equity award grants.
Earnings Per Share Weighted average basic and diluted shares of Class A common stock outstanding were higher for the year ended December 31, 2024, compared to the year ended December 31, 2023, as a result of unit exchanges and equity award grants.
Occupancy Occupancy expenses include operating leases for facilities, furniture and office equipment, miscellaneous facility related costs and depreciation expense associated with furniture purchases and leasehold improvements. We expect 2024 occupancy expenses to be relatively consistent with 2023.
Occupancy Occupancy expenses include operating leases for facilities, furniture and office equipment, miscellaneous facility related costs and depreciation expense associated with furniture purchases and leasehold improvements. We expect 2025 occupancy expense to be relatively consistent with 2024.
See “—Qualitative and Quantitative Disclosures Regarding Market Risk—Market Risk” for a sensitivity analysis that demonstrates the impact that certain changes in the composition of our assets under management could have on our revenues. Investment Advisory Revenues Essentially all of our revenues consist of fees earned from managing clients’ assets.
See “—Qualitative and Quantitative Disclosures Regarding Market Risk—Market Risk” for a sensitivity analysis that demonstrates the impact that certain changes in the composition of our AUM could have on our revenues. Investment Advisory Revenues Essentially all of our revenues consist of fees earned from managing clients’ assets.
Our non-GAAP measures are as follows: • Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products.
Our non-GAAP measures are as follows: • Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products, and (4) non-recurring expenses.
Artisan accounts for asset management services as a single performance obligation that is satisfied over time, using a time-based measure of progress to recognize revenue. Customer consideration is variable due to the uncertainty of the value of assets under management during each distinct service period.
Artisan accounts for asset management services as a single performance obligation that is satisfied over time, using a time-based measure of progress to recognize revenue. Customer consideration is variable due to the uncertainty of the value of AUM during each distinct service period.
We expect these expenses will add approximately $6 million to our expenses in the first quarter of 2024, compared to the fourth quarter of 2023. 45 Table of Contents We have granted equity awards to our employees that consist of standard restricted awards that generally vest on a pro rata basis over 5 years and career awards that vest when both of the following conditions are met (1) pro-rata time vesting over 5 years and (2) qualifying retirement (as defined in the award agreements).
We expect these expenses will add approximately $6 million to our expenses in the first quarter of 2025, compared to the fourth quarter of 2024. 44 Table of Contents Equity awards granted to our employees consist of standard restricted awards that generally vest on a pro rata basis over 5 years and career awards that vest when both of the following conditions are met (1) pro-rata time vesting over 5 years and (2) a qualifying retirement (as defined in the award agreements).
When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate assets under management may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy.
When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate AUM may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy.
Investment advisory fees, which are comprised of management fees and performance fees, fluctuate based on a number of factors, including the total value of our assets under management, the composition of assets under management among investment vehicles and our investment strategies, changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and, for the accounts on which we earn performance fees, the investment performance of those accounts.
Investment advisory fees, which are comprised of management fees and performance fees (including incentive allocations), fluctuate based on a number of factors, including the total value of our AUM, the composition of AUM among investment vehicles and investment strategies, changes in the fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and, for the accounts on which we earn performance fees, the investment performance of those accounts.
The different fee structures associated with Artisan Funds, Artisan Global Funds and separate accounts and other pooled vehicles, and the different fee schedules applicable to each of our investment strategies, make the composition of our assets under management an important determinant of the investment management fees we earn.
The different fee structures associated with Artisan Funds, Artisan Global Funds and separate accounts and other pooled vehicles, and the different fee schedules applicable to each of our investment strategies, make the composition of our AUM an important determinant of the investment management fees we earn.
We strive to maintain a financial model that is transparent and predictable. Currently, we derive nearly all of our revenues from investment management fees, most of which are based on a specified percentage of clients’ average assets under management. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues.
We strive to maintain a financial model that is transparent and predictable. We derive nearly all of our revenues from investment management fees, most of which are based on a specified percentage of clients’ average AUM. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues.
Over shorter time periods, changes in our business and financial results are largely driven by market conditions and fluctuations in our assets under management that may not necessarily be the result of our long-term investment performance or the long-term demand for our strategies. For this reason, we expect that our business and financial results will be lumpy over time.
Over shorter time periods, changes in our business and financial results are largely driven by market conditions and fluctuations in our AUM that may not necessarily be the result of our long-term investment performance or the long-term demand for our strategies. For this reason, we expect that our business and financial results will be lumpy over time.
For each of the years ended December 31, 2023, 2022 and 2021, approximately 82%, 82%, and 83%, respectively, of our investment advisory fees were earned from clients located in the United States. Operating Expenses Our operating expenses consist primarily of compensation and benefits, distribution, servicing and marketing, occupancy, communication and technology, and general and administrative expenses.
For each of the years ended December 31, 2024, 2023 and 2022, approximately 80%, 82%, and 82%, respectively, of our investment advisory fees were earned from clients located in the United States. Operating Expenses Our operating expenses consist primarily of compensation and benefits, distribution, servicing and marketing, occupancy, communication and technology, and general and administrative expenses.
We act as investment adviser to the collective investment trusts and earn a management fee for providing this service. The weighted average management fee rate paid by our Artisan-branded collective investment trust clients was 0.665%, 0.714%, and 0.729% for the years ended December 31, 2023, 2022 and 2021, respectively.
We act as investment adviser to the collective investment trusts and earn a management fee for providing this service. The weighted average management fee rate paid by our Artisan-branded collective investment trust clients was 0.701%, 0.665%, and 0.714% for the years ended December 31, 2024, 2023 and 2022, respectively.
New or Revised Accounting Standards See Note 2, “Summary of Significant Accounting Policies — Recent accounting pronouncements” to the Consolidated Financial Statements included in Item 8 of Part II of this Form 10-K.
New or Revised Accounting Standards See Note 2, “Summary of Significant Accounting Policies — Recent accounting pronouncements” to the Consolidated Financial Statements included in Item 8 of Part II of this Form 10-K. 58 Table of Contents
A significant portion of our operating expenses are variable and fluctuate in direct relation to our assets under management and revenues. Even if we experience declining revenues, we expect to continue to make the expenditures necessary for us to manage and grow our business. As a result, our profits may decline.
A significant portion of our operating expenses are variable and fluctuate in direct relation to our AUM and revenues. Even if we experience declining revenues, we expect to continue to make the expenditures necessary for us to manage and grow our business. As a result, our profits may decline.
Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 16% and 17% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the years ended December 31, 2023 and 2022, respectively.
Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 14% and 16% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the years ended December 31, 2024 and 2023, respectively.
The weighted average management fee rate paid by our traditional separate account clients was 0.489%, 0.484%, and 0.484% for the years ended December 31, 2023, 2022 and 2021, respectively.
The weighted average management fee rate paid by our traditional separate account clients was 0.472%, 0.489%, and 0.484% for the years ended December 31, 2024, 2023 and 2022, respectively.
Overview and Recent Highlights We are an investment management firm focused on providing high-value added, active investment strategies in asset classes for sophisticated clients around the world. As of December 31, 2023, our ten autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.
Overview and Recent Highlights We are an investment management firm focused on providing high value-added, active investment strategies for sophisticated clients around the world. As of December 31, 2024, our 11 autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.
These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products.
These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, (3) net investment gain (loss) of investment products and (4) non-recurring expenses.
In addition, in the event of a Change of Control (as defined in the Note Purchase Agreement) or if Artisan’s average assets under management for a fiscal quarter is below $45 billion, Holdings is generally required to offer to pre-pay the notes.
In addition, in the event of a Change of Control (as defined in the Note Purchase Agreement) or if Artisan’s average AUM for a fiscal quarter is below $45 billion, Holdings is generally required to offer to pre-pay the notes.
The weighted average management fee rate paid by clients within the “separate accounts and other” category in the aggregate was 0.508%, 0.512% and 0.513% for the years ended December 31, 2023, 2022 and 2021, respectively.
The weighted average management fee rate paid by clients within the “separate accounts and other” category in the aggregate was 0.494%, 0.508% and 0.512% for the years ended December 31, 2024, 2023 and 2022, respectively.
The weighted average management fee rate paid by our Artisan Funds and Artisan Global Funds clients in the aggregate was 0.901%, 0.907%, and 0.912%, for the years ended December 31, 2023, 2022 and 2021, respectively.
The weighted average management fee rate paid by our Artisan Funds and Artisan Global Funds clients in the aggregate was 0.887%, 0.901%, and 0.907%, for the years ended December 31, 2024, 2023 and 2022, respectively.
The balance excludes $115.3 million and $67.3 million of investments made related to funded long-term incentive compensation plans as of December 31, 2023 and December 31, 2022, respectively. We manage our cash balances in order to fund our day-to-day operations.
The balance excludes $150.4 million and $115.3 million of investments made related to funded long-term incentive compensation plans as of December 31, 2024 and December 31, 2023, respectively. We manage our cash balances in order to fund our day-to-day operations.
The deconsolidation of the investment product resulted in a $4.7 million increase in cash, cash equivalents and restricted cash. 58 Table of Contents Critical Accounting Policies and Estimates The accompanying consolidated financial statements were prepared in accordance with GAAP, and related rules and regulations of the SEC.
The deconsolidation of the investment product resulted in a $4.0 million increase in cash and cash equivalents. 56 Table of Contents Critical Accounting Policies and Estimates The accompanying consolidated financial statements were prepared in accordance with GAAP, and related rules and regulations of the SEC.
The weighted average management fee rate paid by our Artisan Private Funds clients was 0.654%, 0.809%, and 0.786% for the years ended December 31, 2023, 2022 and 2021, respectively.
The weighted average management fee rate paid by our Artisan Private Funds clients was 0.447%, 0.654%, and 0.809% for the years ended December 31, 2024, 2023 and 2022, respectively.
(GAAP) $ 222.3 $ 206.8 $ 336.5 Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings 49.5 49.1 96.9 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 4.8 (3.8) 0.3 Add back: Net (gain) loss on the tax receivable agreements (0.5) (1.0) (0.4) Add back: Net investment (gain) loss of investment products attributable to APAM (38.4) 16.9 (9.3) Add back: Interest expense 8.6 9.9 10.8 Add back: Provision for income taxes 71.9 63.4 107.1 Add back: Depreciation and amortization 9.3 7.9 7.0 Adjusted EBITDA (Non-GAAP) $ 327.5 $ 349.2 $ 548.9 54 Table of Contents Liquidity, Capital Resources, and Contractual Obligations Our working capital needs, including accrued incentive compensation payments, have been and are expected to be met primarily through cash generated by our operations.
(GAAP) $ 259.7 $ 222.3 $ 206.8 Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings 52.9 49.5 49.1 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 7.8 4.8 (3.8) Add back: Net (gain) loss on the tax receivable agreements 0.5 (0.5) (1.0) Add back: Net investment (gain) loss of investment products attributable to APAM (31.9) (38.4) 16.9 Add back: Interest expense 8.6 8.6 9.9 Add back: Provision for income taxes 90.9 71.9 63.4 Add back: Depreciation and amortization 9.9 9.3 7.9 Add back: Non-recurring expenses 1.6 — — Adjusted EBITDA (Non-GAAP) $ 400.0 $ 327.5 $ 349.2 53 Table of Contents Liquidity, Capital Resources, and Contractual Obligations Our working capital needs, including accrued incentive compensation payments, have been and are expected to be met primarily through cash generated by our operations.
Holdings maintained an investment grade rating for the year ended December 31, 2023.
Holdings maintained an investment grade rating for the year ended December 31, 2024.
We expect to continue our measured investments in technology to support our investment teams, distribution efforts, and scalable operations. We expect 2024 communication and technology expenses to be relatively consistent with 2023. On behalf of our clients, we make decisions to buy and sell securities for each portfolio, select broker-dealers to execute trades and negotiate brokerage commission rates.
We expect to continue our measured investments in technology to support our investment teams, distribution efforts, and scalable operations. We expect 2025 communication and technology expense to be relatively consistent with 2024. On behalf of our clients, we make decisions to buy and sell securities, select broker-dealers to execute trades and negotiate brokerage commission rates.
The following table presents the total returns of relevant market indices for the years ended December 31, 2023, 2022 and 2021: For the Years Ended December 31, 2023 2022 2021 S&P 500 total returns 26.3 % (18.1) % 28.7 % MSCI All Country World total returns 22.2 % (18.4) % 18.5 % MSCI EAFE total returns 18.2 % (14.5) % 11.3 % Russell Midcap® total returns 17.2 % (17.3) % 22.6 % MSCI Emerging Markets Index 9.8 % (20.1) % (2.5) % ICE BofA US High Yield Index 13.5 % (11.2) % 5.4 % 35 Table of Contents Key Performance Indicators When we review our business and financial performance we consider, among other things, the following: For the Years Ended December 31, 2023 2022 2021 (unaudited; dollars in millions) Assets under management at period end $ 150,167 $ 127,892 $ 174,754 Average assets under management (1) $ 139,321 $ 141,516 $ 171,767 Net client cash flows (2) $ (4,076) $ (9,813) $ 1,678 Total revenues $ 975 $ 993 $ 1,227 Weighted average management fee (3) 69.8 bps 70.2 bps 70.7 bps Operating margin 31.1 % 34.6 % 44.0 % Adjusted operating margin (4) 31.6 % 34.3 % 44.1 % (1) We compute average assets under management by averaging day-end assets under management for the applicable period.
The following table presents the total returns of relevant market indices for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, 2024 2023 2022 S&P 500 total returns 25.0 % 26.3 % (18.1) % MSCI All Country World total returns 17.5 % 22.2 % (18.4) % MSCI EAFE total returns 3.8 % 18.2 % (14.5) % Russell Midcap® total returns 15.3 % 17.2 % (17.3) % MSCI Emerging Markets Index 7.5 % 9.8 % (20.1) % ICE BofA US High Yield Index 8.2 % 13.5 % (11.2) % 34 Table of Contents Key Performance Indicators When we review our business and financial performance we consider, among other things, the following: For the Years Ended December 31, 2024 2023 2022 (unaudited; dollars in millions) Assets under management at period end $ 161,208 $ 150,167 $ 127,892 Average assets under management (1) $ 160,232 $ 139,321 $ 141,516 Net client cash flows (2) $ (3,699) $ (4,076) $ (9,813) Total revenues $ 1,112 $ 975 $ 993 Weighted average management fee (3) 68.6 bps 69.8 bps 70.2 bps Operating margin 33.0 % 31.1 % 34.6 % Adjusted operating margin (4) 33.8 % 31.6 % 34.3 % (1) We compute average assets under management by averaging day-end assets under management for the applicable period.
Holdings Unit Exchanges During the year ended December 31, 2023, certain limited partners of Holdings exchanged 163,345 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 163,345 shares of Class A common stock. In connection with the exchanges, APAM received 163,345 GP units of Holdings.
Holdings Unit Exchanges During the year ended December 31, 2024, certain limited partners of Holdings exchanged 1,173,667 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM, as applicable) for 1,173,667 shares of Class A common stock. In connection with the exchanges, APAM received 1,173,667 GP units of Holdings.
The amount we pay to intermediaries for distribution and administrative services varies by share class. As assets have transferred from the Investor share class to the Advisor and Institutional share classes, the amount we have paid for distribution, servicing and marketing relative to average AUM in the Artisan Funds has decreased.
As assets have transferred from the Investor share class to the Advisor and Institutional share classes, the amount we have paid for distribution, servicing and marketing relative to average AUM in the Artisan Funds has decreased.
For the year ended December 31, 2023, fees from Artisan Funds represented $562.8 million, or 58%, of our revenues. Our contractual tiered fee rates for the series of Artisan Funds range from 0.60% to 1.05% of fund assets, depending on the investment strategy, the amount invested and other factors.
For the year ended December 31, 2024, fees from Artisan Funds represented $636.2 million, or 57%, of our revenues. Our contractual tiered fee rates for the series of Artisan Funds range from 0.60% to 1.05% of fund assets, depending on the investment strategy, the amount invested and other factors.
Interest expense also includes interest on TRA payments, which is incurred between the due date (without extension) for our federal income tax return and the date on which we make TRA payments. 47 Table of Contents Interest Income on Cash and Cash Equivalents and Other Interest income on cash and cash equivalents and other includes income earned from investing excess operating cash in various money market funds.
Interest expense also includes interest on TRA payments, which is incurred between the due date (without extension) for APAM’s federal income tax return and the date on which APAM makes TRA payments. 46 Table of Contents Interest Income on Cash and Cash Equivalents and Other Interest income on cash and cash equivalents and other includes income earned from investing excess operating cash in various money market funds.
Alternative includes the following investment strategies: Antero Peak, Antero Peak Hedge, China Post-Venture, Credit Opportunities, and Global Unconstrained. (2) Net client cash flows excludes Artisan Funds’ income and capital gain distributions that were not reinvested. (3) Artisan Funds’ distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
(3) Alternative includes the following investment strategies: Antero Peak, Antero Peak Hedge, China Post-Venture, Credit Opportunities, and Global Unconstrained. (4) Net client cash flows excludes Artisan Funds’ income and capital gain distributions that were not reinvested.
The amount and composition of our assets under management are, and will continue to be, influenced by a variety of factors including, among others: • investment performance, including fluctuations in both the financial markets and foreign currency exchange rates and the quality of our investment decisions; • flows of client assets into and out of our various strategies and investment vehicles; • our decision to close strategies or limit the growth of assets in a strategy or a vehicle when we believe it is in the best interest of our clients, as well as our decision to re-open strategies, in part or entirely; • our ability to attract and retain qualified investment, management, and marketing and client service professionals; • industry trends towards products, strategies, vehicles or services that we do not offer; • competitive conditions in the investment management and broader financial services sectors; and • investor sentiment and confidence. 36 Table of Contents The table below sets forth changes in our total assets under management: For the Years Ended December 31, 2023 2022 2021 (unaudited; dollars in millions) Beginning assets under management $ 127,892 $ 174,754 $ 157,776 Gross client cash inflows 21,395 27,227 33,725 Gross client cash outflows (25,471) (37,040) (32,047) Net client cash flows (4,076) (9,813) 1,678 Artisan Funds’ distributions not reinvested (1) (684) (497) (2,295) Investment returns and other (2) 27,035 (36,552) 17,595 Ending assets under management $ 150,167 $ 127,892 $ 174,754 Average assets under management $ 139,321 $ 141,516 $ 171,767 (1) Artisan Funds’ distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
The amount and composition of our AUM are, and will continue to be, influenced by a variety of factors including, among others: • investment performance, including fluctuations in both the financial markets and foreign currency exchange rates and the quality of our investment decisions; • flows of client assets into and out of our various strategies and investment vehicles; • our decision to close strategies or limit the growth of assets in a strategy or a vehicle when we believe it is in the best interest of our clients, as well as our decision to re-open strategies, in part or entirely; • our ability to attract and retain qualified investment, management, and marketing and client service professionals; • industry trends towards products, strategies, vehicles or services that we do not offer; • competitive conditions in the investment management and broader financial services sectors; and • investor sentiment and confidence. 35 Table of Contents The table below sets forth changes in our total AUM: For the Years Ended December 31, 2024 2023 2022 (unaudited; dollars in millions) Beginning assets under management $ 150,167 $ 127,892 $ 174,754 Gross client cash inflows 25,650 21,395 27,227 Gross client cash outflows (29,349) (25,471) (37,040) Net client cash flows (1) (3,699) (4,076) (9,813) Artisan Funds’ distributions not reinvested (2) (1,193) (684) (497) Investment returns and other (3) 15,933 27,035 (36,552) Ending assets under management $ 161,208 $ 150,167 $ 127,892 Average assets under management $ 160,232 $ 139,321 $ 141,516 (1) Net client cash flows excludes Artisan Funds’ income and capital gain distributions that were not reinvested by fund shareholders.
For the year, 10 of our 25 investment strategies had net inflows totaling $6.2 billion, which were offset by $10.3 billion of net outflows from the remaining strategies. Over the long-term, we expect to generate the majority of our AUM growth through investment returns, which has been our historical experience.
For the year, 13 of our 25 investment strategies had net inflows totaling $5.8 billion, which were offset by $9.5 billion of net outflows from the remaining strategies. Over the long-term, we expect to generate the majority of our AUM growth through investment returns, which has been our historical experience.
Interest income generated on cash and cash equivalents is considered part of normal operations, and therefore, is not excluded from adjusted net income. 53 Table of Contents The following table sets forth, for the periods indicated, a reconciliation from GAAP financial measures to non-GAAP measures: For the Years Ended December 31, 2023 2022 2021 (unaudited; in millions, except per share data) Reconciliation of non-GAAP financial measures: Net income attributable to Artisan Partners Asset Management Inc.
Interest income generated on cash and cash equivalents is considered part of normal operations, and therefore, is not excluded from adjusted net income. 52 Table of Contents The following table sets forth, for the periods indicated, a reconciliation from GAAP financial measures to non-GAAP measures: For the Years Ended December 31, 2024 2023 2022 Reconciliation of non-GAAP financial measures: Net income attributable to Artisan Partners Asset Management Inc.
We continue to mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $118.8 million of our cash and cash equivalents balance was invested in money market funds as of December 31, 2023.
We mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $177.4 million of our cash and cash equivalents balance was invested in money market funds as of December 31, 2024.
(GAAP) $ 222.3 $ 206.8 $ 336.5 Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings 49.5 49.1 96.9 Add back: Provision for income taxes 71.9 63.4 107.1 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 4.8 (3.8) 0.3 Add back: Net (gain) loss on the tax receivable agreements (0.5) (1.0) (0.4) Add back: Net investment (gain) loss of investment products attributable to APAM (38.4) 16.9 (9.3) Less: Adjusted provision for income taxes 76.5 81.8 131.2 Adjusted net income (Non-GAAP) $ 233.1 $ 249.6 $ 399.9 Average shares outstanding Class A common shares 63.4 62.5 59.9 Assumed vesting or exchange of: Unvested Class A restricted share-based awards 5.7 5.7 5.4 Artisan Partners Holdings units outstanding (noncontrolling interests) 11.5 12.0 14.2 Adjusted shares 80.6 80.2 79.5 Basic earnings per share (GAAP) $ 3.19 $ 2.94 $ 5.10 Diluted earnings per share (GAAP) $ 3.19 $ 2.94 $ 5.09 Adjusted net income per adjusted share (Non-GAAP) $ 2.89 $ 3.11 $ 5.03 Operating income (GAAP) $ 303.6 $ 344.1 $ 540.5 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 4.8 (3.8) 0.3 Adjusted operating income (Non-GAAP) $ 308.4 $ 340.3 $ 540.8 Operating margin (GAAP) 31.1 % 34.6 % 44.0 % Adjusted operating margin (Non-GAAP) 31.6 % 34.3 % 44.1 % Net income attributable to Artisan Partners Asset Management Inc.
(GAAP) $ 259.7 $ 222.3 $ 206.8 Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings 52.9 49.5 49.1 Add back: Provision for income taxes 90.9 71.9 63.4 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 7.8 4.8 (3.8) Add back: Net (gain) loss on the tax receivable agreements 0.5 (0.5) (1.0) Add back: Net investment (gain) loss of investment products attributable to APAM (31.9) (38.4) 16.9 Add back: Non-recurring expenses 1.6 — — Less: Adjusted provision for income taxes 94.2 76.5 81.8 Adjusted net income (Non-GAAP) $ 287.3 $ 233.1 $ 249.6 Average shares outstanding Class A common shares 64.9 63.4 62.5 Assumed vesting or exchange of: Unvested Class A restricted share-based awards 5.5 5.7 5.7 Artisan Partners Holdings units outstanding (noncontrolling interests) 10.5 11.5 12.0 Adjusted shares 80.9 80.6 80.2 Basic earnings per share (GAAP) $ 3.66 $ 3.19 $ 2.94 Diluted earnings per share (GAAP) $ 3.66 $ 3.19 $ 2.94 Adjusted net income per adjusted share (Non-GAAP) $ 3.55 $ 2.89 $ 3.11 Operating income (GAAP) $ 366.6 $ 303.6 $ 344.1 Add back: Compensation expense (reversal) related to market valuation changes in compensation plans 7.8 4.8 (3.8) Add back: Non-recurring expenses 1.6 — — Adjusted operating income (Non-GAAP) $ 376.0 $ 308.4 $ 340.3 Operating margin (GAAP) 33.0 % 31.1 % 34.6 % Adjusted operating margin (Non-GAAP) 33.8 % 31.6 % 34.3 % Net income attributable to Artisan Partners Asset Management Inc.
The following table sets forth revenues we earned by vehicle type for the years ended December 31, 2023, 2022 and 2021: For the Years Ended December 31, 2023 2022 2021 Revenues (in millions) Management fees Artisan Funds & Artisan Global Funds $ 606.3 $ 617.0 $ 761.4 Separate accounts and other 364.5 375.7 452.5 Performance fees 4.3 0.6 13.3 Total revenues $ 975.1 $ 993.3 $ 1,227.2 Average assets under management for period $ 139,321 $ 141,516 $ 171,767 Management fees, performance fees and incentive allocations earned from consolidated investment products are eliminated from revenue upon consolidation.
The following table sets forth revenues we earned by vehicle type for the years ended December 31, 2024, 2023 and 2022: For the Years Ended December 31, 2024 2023 2022 Revenues (in millions) Management fees Artisan Funds & Artisan Global Funds $ 688.8 $ 606.3 $ 617.0 Separate accounts and other 408.2 364.5 375.7 Performance fees 14.8 4.3 0.6 Total revenues $ 1,111.8 $ 975.1 $ 993.3 Average assets under management for period $ 160,232 $ 139,321 $ 141,516 Management fees and performance fees (including incentive allocations) earned from consolidated investment products are eliminated from revenue upon consolidation.
The weighted average investment management fee, which excludes performance fees, was 69.8 basis points for the year ended December 31, 2023, compared to 70.2 basis points for the year ended December 31, 2022.
The weighted average investment management fee, which excludes performance fees, was 68.6 basis points for the year ended December 31, 2024, compared to 69.8 basis points for the year ended December 31, 2023.
From time to time, we may also make individual long-term incentive grants to people we hire. 46 Table of Contents Distribution, Servicing and Marketing Distribution, servicing and marketing expenses primarily represent payments we make to broker-dealers, financial advisors, defined contribution plan providers, mutual fund supermarkets and other intermediaries for selling, servicing and administering accounts invested in shares of Artisan Funds.
From time to time, we may also grant individual long-term incentive awards in connection with talent acquisition and retention. 45 Table of Contents Distribution, Servicing and Marketing Distribution, servicing and marketing expenses primarily represent payments we make to broker-dealers, financial advisors, defined contribution plan providers, mutual fund supermarkets and other intermediaries for selling, servicing and administering accounts invested in shares of Artisan Funds.
We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our $150.2 billion of assets under management as of December 31, 2023 have performance fee billing arrangements. Performance fees of $4.3 million, $0.6 million, and $13.3 million were recognized in the years ended December 31, 2023, 2022 and 2021, respectively.
We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our $161.2 billion of AUM as of December 31, 2024 have performance fee billing arrangements. Performance fees of $14.8 million, $4.3 million, and $0.6 million were recognized in the years ended December 31, 2024, 2023 and 2022, respectively.
With the exception of the assets managed by our Credit team and EMsights Capital Group (which together represented approximately 7.0% of our assets under management at December 31, 2023), the portfolios are invested principally in publicly-traded equity securities.
With the exception of the assets managed by our Credit team and EMsights Capital Group (which together represented approximately 9.2% of our AUM at December 31, 2024), the portfolios are invested principally in publicly-traded equity securities.
During the year ended December 31, 2023, we made payments totaling $36.0 million, related to the TRAs, including interest. In 2024, we expect to make payments of approximately $37.2 million related to the TRAs.
During the year ended December 31, 2024, we made payments totaling $36.9 million, related to the TRAs, including interest. In 2025, we expect to make payments of approximately $38.9 million related to the TRAs.
The table below sets forth our assets under management by distribution channel: As of December 31, 2023 As of December 31, 2022 As of December 31, 2021 $ in millions % of total $ in millions % of total $ in millions % of total (unaudited) (unaudited) (unaudited) Institutional $ 94,652 63.0 % $ 82,456 64.5 % $ 111,705 63.9 % Intermediary 49,871 33.2 % 39,851 31.1 % 55,198 31.6 % Retail 5,644 3.8 % 5,585 4.4 % 7,851 4.5 % Ending Assets Under Management (1) $ 150,167 100.0 % $ 127,892 100.0 % $ 174,754 100.0 % (1) The allocation of assets under management by distribution channel involves the use of estimates and the exercise of judgment.
The table below sets forth our AUM by distribution channel: As of December 31, 2024 As of December 31, 2023 As of December 31, 2022 $ in millions % of total $ in millions % of total $ in millions % of total (unaudited) (unaudited) (unaudited) Institutional $ 100,227 62.2 % $ 94,652 63.0 % $ 82,456 64.5 % Intermediary 55,681 34.5 % 49,871 33.2 % 39,851 31.1 % Retail 5,300 3.3 % 5,644 3.8 % 5,585 4.4 % Ending Assets Under Management (1) $ 161,208 100.0 % $ 150,167 100.0 % $ 127,892 100.0 % (1) The allocation of assets under management by distribution channel involves the use of estimates and the exercise of judgment.
Distributions and Dividends Artisan Partners Holdings’ distributions, including distributions to APAM, for the years ended December 31, 2023 and 2022 were as follows: For the Years Ended December 31, 2023 2022 (in millions) Holdings Partnership Distributions to Limited Partners $ 44.7 $ 57.2 Holdings Partnership Distributions to APAM 248.3 299.0 Total Holdings Partnership Distributions $ 293.0 $ 356.2 APAM, acting as the general partner of Artisan Partners Holdings, declared, effective January 30, 2024, a distribution of $30.2 million payable by Artisan Partners Holdings on February 21, 2024 to holders of its partnership units, including APAM.
Distributions and Dividends Artisan Partners Holdings’ distributions, including distributions to APAM, for the years ended December 31, 2024 and 2023 were as follows: For the Years Ended December 31, 2024 2023 (in millions) Holdings Partnership Distributions to Limited Partners $ 48.9 $ 44.7 Holdings Partnership Distributions to APAM 305.9 248.3 Total Holdings Partnership Distributions $ 354.8 $ 293.0 APAM, acting as the general partner of Artisan Partners Holdings, declared, effective February 4, 2025, a distribution of $41.3 million, payable by Artisan Partners Holdings on February 21, 2025 to holders of its partnership units, including APAM.
The estimated grant date fair value of equity awards is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The initial requisite service period is generally three years for PSUs and five years for all other equity awards that have been granted to date.
The estimated grant date fair value of equity awards is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The initial requisite service period is generally five years for restricted stock awards and restricted stock units, and three years for PSUs.
The following table shows our liquidity position as of December 31, 2023 and December 31, 2022: December 31, 2023 December 31, 2022 (in millions) Cash and cash equivalents $ 141.0 $ 114.8 Accounts receivable $ 101.2 $ 98.6 Seed investments (1) $ 150.1 $ 124.8 Undrawn commitment on revolving credit facility $ 100.0 $ 100.0 (1) Seed investments include Artisan's direct equity investments in consolidated and nonconsolidated Artisan-sponsored investment products.
The following table shows our liquidity position as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 (in millions) Cash and cash equivalents $ 201.2 $ 141.0 Accounts receivable 118.7 101.2 Seed investments (1) 154.9 150.1 Undrawn commitment on revolving credit facility 100.0 100.0 (1) Seed investments include Artisan's direct equity investments in consolidated and nonconsolidated investment products.
APAM declared and paid the following dividends per share during the years ended December 31, 2023 and 2022: For the Years Ended December 31, Type of Dividend Class of Stock 2023 2022 Quarterly Common Class A $ 2.31 $ 2.95 Special Annual Common Class A $ 0.35 $ 0.72 Our board of directors declared, effective January 30, 2024 , a variable quarterly dividend of $0.68 per share of Class A common stock with respect to the December quarter of 2023 and a special annual dividend of $0.34.
APAM declared and paid the following dividends per share during the years ended December 31, 2024 and 2023: For the Years Ended December 31, Type of Dividend Class of Stock 2024 2023 Quarterly Class A Common $ 2.82 $ 2.31 Special Annual Class A Common $ 0.34 $ 0.35 Our Board declared, effective February 4, 2025 , a variable quarterly dividend of $0.84 per share of Class A common stock with respect to the December quarter of 2024 and a special annual dividend of $0.50 per share.
A significant portion of Artisan Funds’ shares are held by investors through intermediaries to which we pay distribution, servicing and marketing expenses. Total distribution, servicing and marketing fees will increase as we increase our assets under management sourced through intermediaries that charge these fees or similar fees.
A significant portion of Artisan Funds’ shares are held by investors through intermediaries to which we pay distribution, servicing and marketing expenses. Total distribution, servicing and marketing fees will increase as we increase our AUM sourced through intermediaries that charge these fees or similar fees. The amount we pay to intermediaries for distribution and administrative services varies by share class.
In addition, covenants in the note purchase and revolving credit agreements require Artisan Partners Holdings to maintain the following financial ratios: • leverage ratio (calculated as the ratio of consolidated total indebtedness on any date to consolidated EBITDA for the period of four consecutive fiscal quarters ended on or prior to such date) cannot exceed 3.00 to 1.00 (Artisan Partners Holdings’ leverage ratio for the year ended December 31, 2023 was 0.6 to 1.00); and • interest coverage ratio (calculated as the ratio of consolidated EBITDA for any period of four consecutive fiscal quarters to consolidated interest expense for such period) cannot be less than 4.00 to 1.00 for such period (Artisan Partners Holdings’ interest coverage ratio for the year ended December 31, 2023 was 46.0 to 1.00).
Artisan Partners Limited Partnership, a wholly-owned subsidiary of Holdings, has guaranteed Holdings’ obligations under the terms of the Note Purchase Agreement. 54 Table of Contents In addition, covenants in the note purchase and revolving credit agreements require Artisan Partners Holdings to maintain the following financial ratios: • leverage ratio (calculated as the ratio of consolidated total indebtedness on any date to consolidated EBITDA for the period of four consecutive fiscal quarters ended on or prior to such date) cannot exceed 3.00 to 1.00 (Artisan Partners Holdings’ leverage ratio for the year ended December 31, 2024 was 0.5 to 1.00); and • interest coverage ratio (calculated as the ratio of consolidated EBITDA for any period of four consecutive fiscal quarters to consolidated interest expense for such period) cannot be less than 4.00 to 1.00 for such period (Artisan Partners Holdings’ interest coverage ratio for the year ended December 31, 2024 was 54.8 to 1.00).
Financial highlights for 2023 included the following: • During the year ended December 31, 2023, our assets under management increased to $150.2 billion, an increase of $22.3 billion, or 17%, compared to $127.9 billion at December 31, 2022, as a result of $27.1 billion of market appreciation, partially offset by $4.1 billion of net client cash outflows, and $0.7 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders. • Average assets under management for the year ended December 31, 2023 was $139.3 billion, a decrease of 1.6% from the average of $141.5 billion for the year ended December 31, 2022. • We earned $975.1 million in revenue for the year ended December 31, 2023, a 2% decrease from revenues of $993.3 million for the year ended December 31, 2022. • Our GAAP operating margin was 31.1% in 2023, compared to 34.6% in 2022.
Financial highlights for 2024 included the following: • During the year ended December 31, 2024, our AUM increased to $161.2 billion, an increase of $11.0 billion, or 7%, compared to $150.2 billion at December 31, 2023, as a result of $15.9 billion of market appreciation, partially offset by $3.7 billion of net client cash outflows, and $1.2 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders. • Average AUM for the year ended December 31, 2024 was $160.2 billion, an increase of 15.0% from the average of $139.3 billion for the year ended December 31, 2023. • We earned $1,111.8 million in revenue for the year ended December 31, 2024, a 14.0% increase from revenues of $975.1 million for the year ended December 31, 2023. • Our GAAP operating margin was 33.0% in 2024, compared to 31.1% in 2023.
As of December 31, 2023, Artisan Global Funds comprised $6.3 billion, or 4%, of our assets under management. For the year ended December 31, 2023, fees from Artisan Global Funds represented $43.5 million, or 4%, of our revenues. Our contractual fee rates for Artisan Global Funds range from 0.50% to 1.85% of assets under management.
As of December 31, 2024, Artisan Global Funds comprised $7.8 billion, or 5%, of our AUM. For the year ended December 31, 2024, fees from Artisan Global Funds represented $52.6 million, or 5%, of our revenues. Our contractual fee rates for Artisan Global Funds range from 0.50% to 1.85% of AUM.
Organizational Structure Organizational Structure Our operations are conducted through Artisan Partners Holdings LP (“Holdings”) and its subsidiaries. On March 12, 2013, Artisan Partners Asset Management Inc. (“APAM”) and Holdings completed a series of transactions (the “IPO Reorganization”) to reorganize their capital structures in connection with the initial public offering (“IPO”) of APAM’s Class A common stock.
On March 12, 2013, Artisan Partners Asset Management Inc. (“APAM”) and Holdings completed a series of transactions (the “IPO Reorganization”) to reorganize their capital structures in connection with the initial public offering (“IPO”) of APAM’s Class A common stock. The IPO Reorganization and IPO were completed on March 12, 2013.
The Company is primarily self-insured for health benefits up to certain annual stop-loss limits. Expense is recognized based on claims filed and an estimate of claims incurred but not yet reported, as determined by an independent third party. Fixed compensation costs are comprised primarily of salaries, benefits, and long-term incentive compensation expense.
Expense is recognized based on claims filed and an estimate of claims incurred but not yet reported, as determined by an independent third party. Fixed compensation costs are comprised primarily of salaries, benefits, and long-term incentive compensation expense.
See Note 12, “Earnings Per Share” in the Notes to the consolidated financial statements in Item 8 of this report for further discussion of earnings per share. 51 Table of Contents Year Ended December 31, 2022, Compared to the Year Ended December 31, 2021 For the Years Ended December 31, For the Period-to-Period 2022 2021 $ % Statements of operations data: (in millions, except share and per-share data) Revenues $ 993.3 $ 1,227.2 $ (233.9) (19) % Operating Expenses Total compensation and benefits 510.4 563.0 (52.6) (9) % Other operating expenses 138.8 123.7 15.1 12 % Total operating expenses 649.2 686.7 (37.5) (5) % Total operating income 344.1 540.5 (196.4) (36) % Non-operating income (expense) Interest expense (9.9) (10.8) 0.9 8 % Other non-operating income (22.4) 21.9 (44.3) (202) % Total non-operating income (expense) (32.3) 11.1 (43.4) (391) % Income before income taxes 311.8 551.6 (239.8) (43) % Provision for income taxes 63.4 107.1 (43.7) (41) % Net income before noncontrolling interests 248.4 444.5 (196.1) (44) % Less: Noncontrolling interests - Artisan Partners Holdings 49.1 96.9 (47.8) (49) % Less: Noncontrolling interests - consolidated investment products (7.5) 11.1 (18.6) (168) % Net income attributable to Artisan Partners Asset Management Inc. $ 206.8 $ 336.5 $ (129.7) (39) % Share Data Basic earnings per share $ 2.94 $ 5.10 Diluted earnings per share $ 2.94 $ 5.09 Basic weighted average number of common shares outstanding 62,475,960 59,866,790 Diluted weighted average number of common shares outstanding 62,498,509 59,881,039 A detailed discussion of the year-over-year results for the year ended December 31, 2022, compared to the year ended December 31, 2021, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 27, 2023. 52 Table of Contents Supplemental Non-GAAP Financial Information Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends.
See Note 12, “Earnings Per Share” in the Notes to the consolidated financial statements in Item 8 of this report for further discussion of earnings per share. 50 Table of Contents Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 For the Years Ended December 31, For the Period-to-Period 2023 2022 $ % Statements of operations data: (in millions, except share and per-share data) Revenues Management fees $ 970.8 $ 992.7 $ (21.9) (2) % Performance fees 4.3 0.6 3.7 617 % Total revenues 975.1 993.3 (18.2) (2) % Operating Expenses Total compensation and benefits 529.4 510.4 19.0 4 % Other operating expenses 142.1 138.8 3.3 2 % Total operating expenses 671.5 649.2 22.3 3 % Total operating income 303.6 344.1 (40.5) (12) % Non-operating income (expense) Interest expense (8.6) (9.9) 1.3 13 % Other non-operating income 88.7 (22.4) 111.1 496 % Total non-operating income (expense) 80.1 (32.3) 112.4 348 % Income before income taxes 383.7 311.8 71.9 23 % Provision for income taxes 71.9 63.4 8.5 13 % Net income before noncontrolling interests 311.8 248.4 63.4 26 % Less: Noncontrolling interests - Artisan Partners Holdings 49.5 49.1 0.4 1 % Less: Noncontrolling interests - consolidated investment products 40.0 (7.5) 47.5 633 % Net income attributable to Artisan Partners Asset Management Inc. $ 222.3 $ 206.8 $ 15.5 7 % Share Data Basic earnings per share $ 3.19 $ 2.94 Diluted earnings per share $ 3.19 $ 2.94 Basic weighted average number of common shares outstanding 63,451,932 62,475,960 Diluted weighted average number of common shares outstanding 63,486,479 62,498,509 A detailed discussion of the year-over-year results for the year ended December 31, 2023, compared to the year ended December 31, 2022, can be found in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024. 51 Table of Contents Supplemental Non-GAAP Financial Information Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends.
Fixed compensation costs, exclusive of long-term incentive compensation, are expected to rise 4% to 8% in 2024 reflecting merit increases, the absorption of a full year of expense for full time employees hired in 2023, and an expected increase of approximately 5% in full time employees in 2024.
Fixed compensation costs, exclusive of long-term incentive compensation, are expected to increase mid- to low- single digits in 2025 reflecting merit increases and the absorption of a full year of expense for full time employees hired in 2024.
The IPO Reorganization and IPO were completed on March 12, 2013. Limited partners of Holdings, some of whom are employees, held approximately 14% of the equity interests in Holdings as of December 31, 2023. Our results reflect that significant noncontrolling interest. We operate our business in a single segment.
Limited partners of Holdings, some of whom are employees, held approximately 13% of the equity interests in Holdings as of December 31, 2024. Our results reflect that significant noncontrolling interest. We operate our business in a single segment.
During 2023 our assets under management increased by $22.3 billion due to $27.1 billion of market appreciation, partially offset by $4.1 billion of net client cash outflows and $0.7 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders.
During 2024 our AUM increased by $11.0 billion due to $15.9 billion of market appreciation, partially offset by $3.7 billion of net client cash outflows and $1.2 billion of Artisan Funds’ distributions that were not reinvested by fund shareholders.
General and Administrative General and administrative expenses include professional fees, travel and entertainment, certain state and local taxes, directors’ and officers’ liability insurance, director fees, and other miscellaneous expenses we incur in operating our business. We expect travel costs to increase in 2024 as we execute on our investment and distribution growth strategy.
General and Administrative General and administrative expenses include professional fees, travel and entertainment, certain state and local taxes, directors’ and officers’ liability insurance, director fees, and other miscellaneous expenses we incur in operating our business. We expect 2025 general and administrative costs to be relatively consistent with 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe operate in several foreign countries of which the United Kingdom is the most prominent. We incur operating expenses and have foreign currency-denominated assets and liabilities associated with these operations. In addition, we have revenue arrangements that are denominated in non-U.S. currencies.
Biggest changeWe incur operating expenses and have foreign currency-denominated assets and liabilities associated with these operations. In addition, we have revenue arrangements that are denominated in non-U.S. currencies. We do not believe these revenue arrangements denominated in foreign currencies or our operations in foreign countries create foreign currency fluctuations that materially affect our results of operations.
Because we believe that our clients invest in each of our strategies in order to gain exposure to the portfolio securities of the respective strategies and may implement their own risk management program or procedures, we have not adopted a corporate-level risk management policy regarding client assets, nor have we attempted to hedge at the corporate level or within individual strategies the market risks that would affect the value of our overall assets under management and related revenues.
Because we believe that our clients invest in each of our strategies in order to gain exposure to the portfolio securities of the respective strategies and may implement their own risk management program or procedures, we have not adopted a corporate-level risk management policy regarding client assets, nor have we attempted to hedge at the corporate level or within individual strategies the market risks that would affect the value of our overall AUM and related revenues.
We have considered the potential impact of a 100 basis point movement in market interest rates on the portfolios of the strategies managed by these teams. Based on our analysis, we do not expect that such a change would have a material impact on our revenues or results of operations in the next twelve months. 62 Table of Contents
We have considered the potential impact of a 100 basis point movement in market interest rates on the portfolios of the strategies managed by these teams. Based on our analysis, we do not expect that such a change would have a material impact on our revenues or results of operations in the next twelve months. 60 Table of Contents
Interest rate changes may affect the amount of our interest payments in connection with our revolving credit agreement, and thereby affect future earnings and cash flows. As of December 31, 2023, there were no borrowings outstanding under the revolving credit agreement.
Interest rate changes may affect the amount of our interest payments in connection with our revolving credit agreement, and thereby affect future earnings and cash flows. As of December 31, 2024, there were no borrowings outstanding under the revolving credit agreement.
Management regularly monitors the value of these investments; however, given their nature and relative size, we have not adopted a specific risk management policy to manage the associated market risk. 61 Table of Contents Exchange Rate Risk A substantial portion of the accounts that we advise, or sub-advise, hold investments that are denominated in currencies other than the U.S. dollar.
Management regularly monitors the value of these investments; however, given their nature and relative size, we have not adopted a specific risk management policy to manage the associated market risk. Exchange Rate Risk A substantial portion of the accounts that we advise, or sub-advise, hold investments that are denominated in currencies other than the U.S. dollar.
While negative returns in our investment strategies and net client cash outflows do not directly reduce the assets on our balance sheet (because the assets we manage are owned by our clients, not us), any reduction in the value of our assets under management would result in a reduction in our revenues.
While negative returns in our investment strategies and net client cash outflows do not directly reduce the assets on our balance sheet (because the assets we manage are owned by our clients, not us), any reduction in the value of our AUM would result in a reduction in our revenues.
Because of our declining rates of fee for larger relationships and differences in our rates of fee across investment strategies, a change in the composition of our assets under management, in particular an increase in the proportion of our total assets under management attributable to strategies, clients or relationships with lower effective rates of fees, could have a material negative impact on our overall weighted average rate of fee.
Because of our declining rates of fee for larger relationships and differences in our rates of fee across investment strategies, a change in the composition of our AUM, in particular an increase in the proportion of our total AUM attributable to strategies, clients or relationships with lower effective rates of fees, could have a material negative impact on our overall weighted average rate of fee.
In addition, we invested in Artisan investment strategies to hedge our economic exposure to the change in value of our franchise capital awards due to market movements. Assuming a 10% increase or decrease in the values of our total marketable securities, the fair value would increase or decrease by $26.5 million at December 31, 2023.
In addition, we invested in Artisan investment strategies to hedge our economic exposure to the change in value of our franchise capital awards due to market movements. Assuming a 10% increase or decrease in the values of our total marketable securities, the fair value would increase or decrease by $30.5 million at December 31, 2024.
Movements in the rate of exchange between the U.S. dollar and the underlying foreign currency affect the values of assets held in accounts we manage, thereby affecting the amount of revenues we earn. The value of the assets we manage was $150.2 billion as of December 31, 2023.
Movements in the rate of exchange between the U.S. dollar and the underlying foreign currency affect the values of assets held in accounts we manage, thereby affecting the amount of revenues we earn. The value of the assets we manage was $161.2 billion as of December 31, 2024.
As of December 31, 2023, $118.8 million of our available cash was invested in money market funds that invested solely in U.S. Treasuries. Interest rate changes would not have a material impact on the income we earn from these investments. The remaining portion of our cash was held in demand deposit accounts.
As of December 31, 2024, $177.4 million of our available cash was invested in money market funds that invested solely in U.S. Treasuries. Interest rate changes would not have a material impact on the income we earn from these investments. The remaining portion of our cash was held in demand deposit accounts.
To the extent our assets under management are denominated in currencies other than the U.S. dollar, the value of those assets under management will decrease with an increase in the value of the U.S. dollar, or increase with a decrease in the value of the U.S. dollar.
To the extent our AUM are denominated in currencies other than the U.S. dollar, the value of those AUM will decrease with an increase in the value of the U.S. dollar, or increase with a decrease in the value of the U.S. dollar.
The same 10% increase or decrease in the value of our total assets under management, if attributed entirely to a proportionate increase or decrease in the assets of each of the Artisan Funds and Artisan Global Funds, to which we provide a range of services in addition to those provided to separate accounts and therefore charge a higher rate of fee, would cause an annualized increase or decrease in our revenues of approximately $135.2 million at the Artisan Funds and Artisan Global Funds aggregate weighted average fee of 90 basis points.
The same 10% increase or decrease in the value of our total AUM, if attributed entirely to a proportionate increase or decrease in the assets of each of the Artisan Funds and Artisan Global Funds, to which we provide a range of services in addition to those provided to separate accounts and therefore charge a higher rate of fee, would cause an annualized increase or decrease in our revenues of approximately $143.0 million at the Artisan Funds and Artisan Global Funds aggregate weighted average fee of 89 basis points.
We are subject to market risk from a decline in the prices of marketable securities that we own. The total value of marketable securities we owned, including our direct equity investments in consolidated investment products, was $265.4 million as of December 31, 2023.
We are subject to market risk from a decline in the prices of marketable securities that we own. The total value of marketable securities we owned, including our direct equity investments in consolidated investment products, was $305.3 million as of December 31, 2024.
If the same 10% increase or decrease in the value of our total assets under management was attributable entirely to a proportionate increase or decrease in the assets of each separate account we manage, it would cause an annualized increase or decrease in our revenues of approximately $76.3 million at the current weighted average fee rate across all of our separate accounts of 51 basis points.
If the same 10% increase or decrease in the value of our total AUM was attributable entirely to a proportionate increase or decrease in the assets of each separate account we manage, it would cause an annualized increase or decrease in our revenues of approximately $79.6 million at the current weighted average fee rate across all of our separate accounts of 49 basis points.
The credit strategies managed by our Credit and EMsights Capital Group teams, which had $10.5 billion of assets under management as of December 31, 2023, invest in fixed income securities. The values of debt instruments held by these strategies may fall in response to increases in interest rates, which would reduce our revenues.
The credit strategies managed by our Credit and EMsights Capital Group teams, which had $14.9 billion of AUM as of December 31, 2024, invest in fixed income securities. The values of debt instruments held by these strategies may fall in response to increases in interest rates, which would reduce our revenues.
A 10% increase or decrease in the value of our assets under management, if proportionately distributed over all our investment strategies, products and client relationships, would cause an annualized increase or decrease in our revenues of approximately $104.9 million at our current weighted average fee rate of 70 basis points.
A 10% increase or decrease in the value of our AUM, if proportionately distributed over all our investment strategies, products and client relationships, would cause an annualized increase or decrease in our revenues of approximately $110.6 million at our current weighted average fee rate of 69 basis points.
As of December 31, 2023, approximately 57% of our assets under management were invested in strategies that primarily invest in securities of non-U.S. companies and approximately 46% of our assets under management were invested in securities denominated in currencies other than the U.S. dollar.
As of December 31, 2024, approximately 54% of our AUM were invested in strategies that primarily invest in securities of non-U.S. companies and approximately 45% of our AUM were invested in securities denominated in currencies other than the U.S. dollar.
Assuming that 46% of our assets under management is invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangements, a 10% increase or decrease in the value of the U.S. dollar would decrease or increase the fair value of our assets under management by $6.9 billion, which would cause an annualized increase or decrease in revenues of approximately $48.2 million at our current weighted average fee rate of 70 basis points.
Assuming that 45% of our AUM is invested in securities denominated in currencies other than the U.S. dollar and excluding the impact of any hedging arrangements, a 10% increase or decrease in the value of the U.S. dollar would decrease or increase the fair value of our AUM by $7.3 billion, which would cause an annualized increase or decrease in revenues of approximately $49.8 million at our current weighted average fee rate of 69 basis points. 59 Table of Contents We operate in several foreign countries of which the United Kingdom is the most prominent.
Under these agreements, the investment advisory fees we receive are generally based on the value of our assets under management, our fee rates and, for the accounts on which we earn performance based fees, the investment performance of those accounts.
Under these agreements, the investment advisory fees we receive are generally based on the value of our AUM, our fee rates and, for the accounts on which we earn performance based fees, the investment performance of those accounts. Accordingly, if our AUM decline as a result of market depreciation, our revenues and net income will also decline.
We do not believe these revenue arrangements denominated in foreign currencies or our operations in foreign countries create foreign currency fluctuations that materially affect our results of operations. Interest Rate Risk We generally invest our available cash balances in money market mutual funds that invest primarily in U.S. Treasury or agency-backed money market instruments.
Interest Rate Risk We generally invest our available cash balances in money market mutual funds that invest primarily in U.S. Treasury or agency-backed money market instruments.
Accordingly, if our assets under management decline as a result of market depreciation, our revenues and net income will also decline. In addition, such a decline could cause our clients to withdraw their funds in favor of investments believed to offer higher returns or lower risk, which would cause our revenues to decline further.
In addition, such a decline could cause our clients to withdraw their funds in favor of investments believed to offer higher returns or lower risk, which would cause our revenues to decline further. The value of our AUM was $161.2 billion as of December 31, 2024.
Removed
The value of our assets under management was $150.2 billion as of December 31, 2023.

Other APAM 10-K year-over-year comparisons