Artisan Partners’ AUM soars 26.7% in the quarter on market gains

Artisan Partners Asset Management's assets under management increased 26.7% to $120.6 billion in the quarter ended June 30 and rose 6% from June 30, 2019, the firm's earnings report released Tuesday showed.

Most of Artisan's $25.4 billion of asset growth in the quarter was performance-driven, with market gains of $22.1 billion.

Net inflows across all strategies totaled $3.3 billion in the three months ended June 30, resulting from $11.3 billion of gross inflows and $8 billion of gross outflows, the earnings report showed.

By comparison, in the quarter ended March 31, Artisan experienced net outflows of $449 million and a market depreciation of $25.3 billion. In the quarter ended June 30, 2019, the firm had net outflows of $505 million and market gains of $6.5 billion.

Eric R. Colson, Artisan's chairman, president and CEO, noted the firm's strong investment performance across the first six months of this year with 12 of the firm's 18 strategies outperforming their benchmarks after fees with gross alpha production of 600 basis points, said the commentary accompanying the earnings release.

During a conference call with analysts Wednesday, Mr. Colson said most of the firm's employees continue to work at home and stressed that "the investment teams continue to perform particularly well" in the current quarter.

He told analysts that Artisan saw record gross inflows from both U.S. and non-U.S. investors in the second quarter as well as "sizable withdrawals, primarily from (U.S.) endowments and hospital-operating companies … as investors sought liquidity."

In response to an analyst's question, Mr. Colson also attributed some of the firm's "outsized" gross inflows and gross outflow levels to rebalancing activity by institutional and other investors as they harvested gains from high-performing strategies and moved those assets into other funds.

Mr. Colson said Artisan has an ongoing "fluid dialogue with institutional investors and consultants" regarding investment with the firm, but he declined to predict when and whether fresh inflows might manifest, noting that institutional investors generally "take a long time to make decisions"

Artisan's asset and performance growth in the quarter ended June 30 impacted revenue and net income.

The firm's revenue was up 0.1% to $203 million in the three months ended June 30 and up 1.1% for the 12-month period.

Net income was $46.2 million in the quarter ended June 30 compared with $34.8 million in the prior quarter and $39.2 million in the same quarter a year earlier.