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    APAM
    Earnings call· Jun 2026(Q2 FY26)

    Artisan Partners Asset Management Q2 FY26 earnings call APAM

    Jul 29, 2026 Source

    Executive summary

    Artisan Partners Q2 FY26 — Record AUM and Strong Credit/Alternatives Growth Despite Equity Headwinds

    Artisan Partners delivered record AUM and strong financial performance in Q2 FY26, driven by robust growth in credit and alternative strategies. Despite significant net outflows from the U.S. Value and Growth equity teams, the firm's diversified platform and strong long-term investment performance continue to attract capital. Management is focused on expanding capabilities in credit and alternatives, broadening vehicle offerings, and launching Grandview Property Partners' next flagship fund.

    Highlights

    5

    • Achieved record quarter-end assets under management of $183 billion, an increase of 6% QoQ and 5% YoY.

    • 86% of AUM outperformed benchmarks over 3 years and 99% over 10 years, gross of fees.

    • Credit strategies generated $700 million of net inflows, marking 16 consecutive quarters of positive organic growth at a 15% annualized rate.

    • Alternative strategies gathered $300 million of net inflows, representing a 25% annualized organic growth rate.

    • Adjusted operating income increased 8% sequentially to $101.4 million, with adjusted operating margin expanding 180 basis points to 32.9%.

    Concerns

    3

    • Net client outflows totaled $10.5 billion, primarily driven by $6.4 billion from the U.S. Value team and $2.8 billion from the Growth team.

    • The wind-down of the U.S. Value team is expected to negatively impact Q3 EPS by approximately $0.03 per share compared to Q2.

    • Continued headwinds in several equity strategies, particularly in global segments of the Growth team, contributed to outflows.

    Guidance & targets

    3
    CategoryTargetConfidence
    EPS impact from U.S. Value team wind-down
    negative $0.03 per share
    medium materiality
    High
    Fixed expenses
    mid-single digits
    medium materiality
    High
    Grandview Property Partners Fund IV launch
    sometime later this summer, but likely early in the fall of this year
    high materiality
    Medium

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Credit Strategies
    Achieved strong net inflows and consistent organic growth, demonstrating resilience and client demand.
    Net Inflows: $700 millionOrganic Growth Rate (annualized): 15%Consecutive Quarters of Positive Organic Growth: 16
    		————
    Alternative Strategies
    Continued to attract significant net inflows, contributing to overall diversification and growth.
    Net Inflows: $300 millionOrganic Growth Rate (annualized): 25%Quarters of Positive Organic Growth: 5 of last 6
    		————
    U.S. Value Team
    Experienced significant outflows leading to the decision to wind down the team, largely completed by Q3 FY26.
    Net Outflows: $6.4 billion
    		————
    Growth Team
    Contributed to overall net outflows, with efforts underway to bolster performance and talent, particularly in global segments.
    Net Outflows: $2.8 billion
    		————
    EMsights Capital Group
    Celebrated 4-year anniversary, managing significant assets across three investment strategies with strong performance and growing client demand.
    Assets Under Management: >$5 billion
    		————
    Grandview Property Partners
    Acquired earlier this year, preparing to launch flagship Fund IV, with active engagement with anchor investors and LPs.
    Assets Under Management: little under $1 billion (at acquisition)
    		————

    Operational metrics

    32
    Assets Under Management (quarter-end)
    $183 billionup 6% from March quarter; up 5% from a year ago
    Q2 FY26

    Achieved a record quarter-end level.

    Assets Under Management (average)
    $182 billionflat sequentially; up 9% compared to June 2025 quarter
    Q2 FY26

    Average AUM for the quarter.

    Assets Under Management (average, year-to-date)
    9%over prior 6-month period
    YTD FY26

    Year-to-date average AUM improvement.

    Revenue
    $308 millionup 2% from March quarter; up 9% compared to June 2025 quarter
    Q2 FY26

    Primarily reflecting one additional day and a modest increase in average fee rate sequentially, and higher average AUM YoY.

    Weighted average fee rate
    68 bpsup from March quarter
    Q2 FY26

    Primarily due to the loss of the U.S. Value team mandates.

    Adjusted operating expenses
    -1%from March quarter
    Q2 FY26

    Primarily reflecting lower seasonal expenses and reduced long-term incentive compensation, offset by employee separation costs.

    Adjusted operating expenses (YoY)
    7%compared to prior year quarter
    Q2 FY26

    Driven primarily by higher variable incentive compensation associated with increased revenues.

    Adjusted operating income
    $101.4 millionincreased 8% sequentially; increased 13% compared to Q2 2025
    Q2 FY26

    Highlighting operating leverage.

    Adjusted operating margin
    32.9%expanded 180 bps sequentially; expanded 120 bps compared to Q2 2025
    Q2 FY26

    Reflects improved operating income.

    Adjusted EPS
    $0.94increased 13% compared to Q2 2025
    Q2 FY26

    Reflects strong financial performance.

    Adjusted operating income (year-to-date)
    $195.6 millionincreased 10% compared to 2025
    YTD FY26

    Year-to-date performance.

    Adjusted operating margin (year-to-date)
    32%
    YTD FY26

    Year-to-date performance.

    Adjusted EPS (year-to-date)
    $1.81increased 9% compared to 2025
    YTD FY26

    Year-to-date performance.

    Cash balance
    $335 million
    Q2 FY26 end

    Strong balance sheet.

    Seed capital redeemed
    $20 million
    Q2 FY26

    Reduced seed investments on the balance sheet.

    Seed investments on balance sheet
    $100 million
    Q2 FY26 end

    Remaining seed investments after redemptions.

    Excess capital retained
    >$180 million
    Q2 FY26 end

    Available for organic growth, M&A, or return to shareholders after funding quarterly dividend.

    Quarterly dividend
    $0.804% increase from prior quarter; 10% increase year-over-year
    Q2 FY26

    Declared by Board of Directors, consistent with dividend policy.

    AUM outperforming benchmarks
    86%
    3 years

    Long-term investment performance.

    AUM outperforming benchmarks
    77%
    5 years

    Long-term investment performance.

    AUM outperforming benchmarks
    99%
    10 years

    Long-term investment performance.

    Average annual rates of return (10+ year strategies)
    6% to 13%
    since inception

    For the 12 Artisan strategies with track records over 10 years.

    Average annual outperformance vs benchmarks (10+ year strategies)
    189 bps
    since inception

    For the 12 Artisan strategies with track records over 10 years.

    AUM outperforming benchmarks (equity)
    81%
    1 year

    Investment performance of equity strategies improved meaningfully.

    AUM outperforming benchmarks (equity)
    84%
    3 years

    Investment performance of equity strategies improved meaningfully.

    Client returns generated
    >$20 billion
    Q2 FY26

    Generated for clients as investment teams navigated global equity markets.

    Net client outflows
    $10.5 billion
    Q2 FY26

    Total net client outflows during the quarter.

    Net outflows from U.S. Value and Growth teams
    $9.2 billion
    Q2 FY26

    Represented nearly 90% of total net outflows.

    Credit strategies net inflows
    $700 million
    Q2 FY26

    Strong organic growth in credit strategies.

    Alternative strategies net inflows
    $300 million
    Q2 FY26

    Strong organic growth in alternative strategies.

    Global Discovery institutional mandate
    $1 billion
    Q2 FY26

    Secured within equities, predominantly funded in Q2 and continuing into Q3.

    Floating rate strategy institutional mandate
    $150 million
    Q2 FY26

    Won within the credit team, important for scale.

    Industry KPIs

    1
    MetricValueDetails
    Fee rate68 bpsbps

    Product announcements

    3
    ProductTypeDetails
    Grandview Property Partners Fund IVlaunch
    UCITlaunch
    ETFsroadmap

    Deals & partnerships

    1
    Grandview Property PartnersAcquisition of a real estate investment team to expand into private markets.

    Completed earlier this year, the acquisition expands Artisan's platform into an attractive area of long-term client demand while preserving the investment team's autonomy.

    Risks & headwinds

    4
    Wind-down of U.S. Value teamLargely completed by the end of Q3 FY26.

    $6.4 billion of net outflows in Q2 FY26; approximately $0.03 per share negative impact on Q3 FY26 EPS compared to Q2.

    Mitigation: Redeploying resources toward areas with substantially greater long-term opportunity.

    Continued headwinds in several equity strategiesOngoing.

    $2.8 billion net outflows from the Growth team in Q2 FY26.

    Mitigation: Bolstering team leadership (e.g., Angela Wu joining Jim Hamel for Global Opportunities), hiring new analysts and associate portfolio managers, and proactive self-disruption to improve performance.

    Client rebalancing activity in global risk assetsQ2 FY26.

    Broad-based rebalancing across a number of largest relationships, contributing to net outflows.

    Mitigation: Focusing on differentiated active management, expanding into credit and alternatives, and broadening vehicle offerings to meet evolving client demands for income-oriented and alternative strategies.

    Credit strategies short-term underperformanceShort-term.

    Underperformance described as 'not dramatic' and on the heels of multiple years of outstanding performance.

    Mitigation: Attributed to a lack of energy exposure; the team remains disciplined and focused on their investment process. Recently won a $150 million institutional mandate for their floating rate strategy.

    What to watch in Q3 FY26

    5

    U.S. Value Team Wind-down EPS Impact

    next quarter
    CurrentExpected negative $0.03 per share impact on Q3 EPS vs Q2
    TargetConfirmation of expected impact or any deviation

    Why it matters

    This will confirm the financial implications of the strategic decision to wind down the U.S. Value team and its effect on profitability.

    Looking ahead, the September quarter will be negatively impacted by approximately $0.03 per share compared to the second quarter as a result of the wind-down of the U.S. Value team.

    Q&A highlights

    7

    What is the current client demand for EM and global risk assets, and how is Artisan responding?

    Jason Gottlieb noted strong demand for EM, particularly their Sustainable Emerging Markets team, with robust pipeline activity. He observed a more cautious tone in global equity, leading to broad-based rebalancing, and increased client interest in credit, income-oriented strategies, and alternatives.

    “We have seen a really strong demand for EM. They're looking for not only access to the asset class, but certainly, they're looking for differentiated capabilities.”

    asked by Kenneth Lee · answered by Jason Gottlieb

    2 min read6 chapters

    Detailed Narrative

    01

    U.S. Value Team Wind-down and Strategic Redeployment

    Following the loss of two large sub-advisory mandates, Artisan Partners decided to wind down its U.S. Value team, a franchise that had been part of the firm for nearly 30 years. This wind-down is expected to be largely completed by the end of Q3 FY26 and contributed $6.4 billion to the $10.5 billion in net client outflows during Q2. The strategic decision aims to redeploy resources towards areas with greater long-term opportunity, despite the short-term financial impact of approximately $0.03 per share on Q3 EPS.

    02

    Diversification into Credit and Alternatives

    The firm continues to successfully diversify its investment platform, with credit strategies achieving $700 million in net inflows during Q2, marking their 16th consecutive quarter of positive organic growth at a 15% annualized rate. Alternative strategies also gathered $300 million in net inflows, representing a 25% annualized organic growth rate and positive organic growth in five of the last six quarters. This growth highlights Artisan's focus on areas of client demand and alpha generation, offsetting some of the equity outflows.

    03

    Strong Investment Performance Across Platform

    Artisan Partners maintained strong long-term investment performance, with 86% of its AUM outperforming benchmarks over 3 years and 99% over 10 years, gross of fees. The 12 strategies with over 10-year track records have compounded capital at average annual rates between 6% and 13%, exceeding benchmarks by an average of 189 basis points annually net of fees. Equity strategies also showed meaningful improvement over the 1- and 3-year horizons, with 81% and 84% of AUM outperforming, respectively.

    04

    EMsights Capital Group's Continued Success

    Celebrating its 4-year anniversary, EMsights Capital Group now manages over $5 billion in assets across three investment strategies. The team's distinctive approach, combining emerging market expertise with sophisticated derivative capabilities, has delivered differentiated solutions for clients. Management believes EMsights is still in the early stages of its growth, with potential for expansion through additional investment vehicles and broader distribution, serving as a model for Artisan's talent-driven strategy.

    05

    Progress with Grandview Property Partners

    Following its acquisition earlier this year, Grandview Property Partners is making good progress on the launch of its new flagship Fund IV. Advanced discussions are underway with an anchor institutional investor, and active engagement continues with limited partners from prior funds. A dedicated business leader has been hired to accelerate fundraising and expand institutional investor relationships, with Fund IV expected to be significantly larger than the prior $150 million Fund III, launching in early fall 2026.

    06

    Broadening Vehicle Offerings and Distribution

    Artisan Partners is actively expanding its vehicle offerings to meet evolving client demands, including the development of CITs and private funds. The firm expects to launch a UCIT in the near future, with active conversations with a potential anchor. Additionally, Artisan has received exemptive relief for ETFs, signaling a strategic move to provide more flexible access to its investment strategies, aligning with its philosophy of being vehicle-agnostic to solidify long-term client relationships.

    AI-generated summary of the company’s earnings call. Not investment advice.