Welcome to the Artisan Partners Asset Management business update and earnings call. Today's call will include remarks from Jason Gottlieb, CEO, and C.J.

Daley, CFO. Following these remarks, we will open the line for questions.

Our latest results and investor presentation are available on the Investor Relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements.

These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed today, and we assume no obligation to update or revise any of these statements following the presentation.

In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and supplemental materials, which can be found on our Investor Relations website.

Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I'll now turn it over to Jason.

Thank you for joining the call today. Artisan Partners is a talent-driven investment platform that brings together exceptional investors, the autonomy to pursue disciplined investment processes, and the resources and business leadership necessary to build enduring investment franchises.

We believe this combination differentiates Artisan Partners and drives long-term value creation for clients and shareholders. Our third quarter results reflect both the strength and the challenges of our business.

While investment performance and client flows were challenged in portions of our equity platform, we continued to demonstrate the growth potential of our expanding credit and alternatives businesses. We are also making meaningful progress broadening our investment capabilities, developing new investment vehicles, and positioning the platform for future growth.

Investment performance is the foundation of everything we do. Our long-term investment results across asset classes, investment franchises, investing styles, and inception dates demonstrates the strength and consistency of our platform.

At quarter-end, 92% of our assets under management outperformed their benchmarks over 10 years, and 99% since inception, gross of fees. Short-term investment performance was less favorable during the quarter, with relative underperformance across several of our larger equity strategies.

The one- and three-year numbers shown on the slide were particularly impacted by the performance of our International Value and Global Value strategies, both of which have had very strong performance in October. Calculated as of October 26th, 75% and 84% of our AUM are outperforming over the trailing one- and three-year periods, respectively.

We continue to see strong results in credit and alternatives. 100% of our credit AUM has outperformed the benchmark over the reported time periods since inception of our first credit franchise in 2014.

EMsights Capital Group has also established an outstanding investment track record. All three of the franchise's strategies have generated double-digit annualized returns since inception, gross of fees, and meaningful excess returns relative to their respective benchmarks.

These results demonstrate the breadth of our multi-asset investment platform and reinforce our confidence in the long-term value of our business. Turning to slide 4, net client outflows totaled $10.6 billion for the quarter.

As previously disclosed, approximately $7.8 billion of the net outflows included $1.9 billion associated with the U.S. Value team wind-down and $5.9 billion related to the rebalancing of a large Global Value client relationship.

Business development in credit and alternatives remains strong. Combined, our credit and alternative strategies generated $1.1 billion in net inflows during the third quarter and have raised $3.2 billion year-to-date.

For the quarter, credit strategies generated approximately $290 million of net inflows, marking the 17th consecutive quarter of positive credit flows, and we raised approximately $770 million in alternatives, led by strong growth in the Artisan Global Unconstrained Mutual Fund. Turning to the next slide, over the past five years, combined credit and alternatives AUM has nearly doubled to more than $26 billion, increasing from 8% to 15% of firm-wide AUM.

During that period, we have added custom credit solutions and the floating rate strategy to the Artisan Credit team's lineup. We have onboarded the EMsights Capital Group and launched Global Unconstrained, Emerging Markets Debt Opportunities, and Emerging Markets Local Opportunities.

We have added fixed income talent to the International Value Group and launched the Global Special Situations Strategy. At the beginning of this year, we acquired Grandview Property Partners and recently closed on an anchor investor for their fourth flagship fund.

The Artisan Credit team demonstrates what we believe we can accomplish with each of these other franchises. Since launching in 2014, the credit team has established an outstanding investment track record and built a diversified credit business with over $16 billion in assets under management.

We see significant opportunities to build on that success by expanding the team's investment capabilities across public and private credit, broadening its geographic reach, and developing new investment vehicles. These initiatives represent the next phase of growth for our credit franchise, leveraging the team's established investment expertise and our broader operating and distribution capabilities.

Across our platform, including equities, we are working with our investment teams to further develop their franchises, broaden degrees of freedom, increase the breadth and quality of talent, and expand the ways clients can access their investment expertise. During 2026, we have launched 13 new UCITS fund share classes to complement our expanding reach into the UK and European wealth market.

In the fourth quarter, we anticipate launching an ETF share class of the Artisan Select Equity Fund and Artisan Focus Fund to broaden investor access in the wealth market. We are developing an interval fund structure to bring our public and private credit capabilities to wealth clients in 2027.

We believe the opportunity set available to Artisan today is broader than at any point in our history. We have proven our platform works across equities, credit, and alternatives.

We are excited about further growing with existing franchises as well as partnering with external talent via liftouts or acquisitions. We can do more and move faster, yet stay true to our principles: maintaining the highest investment standards, aligning interests, delivering a distraction-free investment environment, and maintaining a long-term orientation.

I will now turn the call over to C.J. to discuss our financial results.

Thanks, Jason. Our complete GAAP and adjusted results are detailed in our earnings release.

Assets under management ended the quarter at $169 billion, a decrease of 8% from the June quarter and 7% from a year ago. Approximately 75% of the net outflows that contributed to the quarterly AUM decline were attributable to two discrete events Jason discussed.

Both events had a relatively modest impact on revenues in the quarter. Average assets under management were $180.5 billion, down 1% sequentially and up 2% compared to the September 2025 quarter.

Year-to-date average AUM improved 7% over the prior nine-month period. Revenues for the quarter were $313 million, up 1% from the June quarter, primarily reflecting an additional day during the quarter and a slight increase in our average fee rate, which more than offset the modest decline in average AUM.

Compared to the September 2025 quarter, revenue increased 4%, driven by higher average assets under management and an increase in our average fee rate. Our weighted average fee rate for the quarter increased to 69 basis points, up from the June quarter.

The increase primarily reflects the impact of the two previously mentioned discrete redemption events. Adjusted operating expenses declined 2% from the June quarter, primarily reflecting a decline in employee-related costs and the continued roll-off of seasonal expenses, offset in part by increased variable incentive compensation associated with increased revenues.

Compared to the prior-year quarter, adjusted operating expenses increased 5%, primarily reflecting higher employee-related and professional fee expenses, as well as the addition of the operating expenses of Grandview Property Partners, which we acquired in January of this year. As a result, adjusted operating income increased 9% sequentially, adjusted operating margin expanded 260 basis points to 35.5%, and adjusted earnings per share increased to $1.03.

Compared to the same quarter in 2025, adjusted operating income increased 2%, and adjusted earnings per share increased 1%. Our adjusted operating margin declined 70 basis points, primarily reflecting the higher operating expenses.

Year-to-date, average AUM and revenues increased 7% compared to the first nine months of last year. Year-to-date adjusted operating expenses increased 8%, reflecting higher incentive compensation associated with increased revenues, employee-related costs, and the addition of Grandview.

Adjusted operating income increased 6% to $307 million, adjusted operating margin was relatively stable at 33%, and adjusted earnings per share increased 6% to $2.84. In our non-GAAP measures, non-operating income includes only interest income and expense.

Our balance sheet remains strong with $352 million of cash. During the quarter, we renewed and expanded our five-year revolving credit facility to $150 million.

The facility remains unused, and added capacity furthers our flexibility to support future growth. Consistent with our dividend policy, our board of directors declared a quarterly dividend of 88 cents per share for the September 2026 quarter, representing a 10% increase from the prior quarter and unchanged from a year ago.

Our strong balance sheet and cash generation provide the flexibility to continue investing in our business while maintaining an attractive shareholder return profile. Looking ahead, the fourth quarter begins with lower AUM levels and a higher average fee rate as a result of the two discrete AUM outflows at lower fee rates.

The fourth quarter will also include the annual income and capital gains mutual fund distribution, which we currently estimate will reduce AUM by $2.5 billion for distributions that will not be reinvested. As a reminder, approximately 3% of our AUM is subject to performance fees, with the majority crystallizing on December 31st each year.

Last year's fourth quarter included approximately $29 million of performance fees. We are currently projecting a similar contribution this year; however, all such fees will remain subject to market and performance conditions through the end of the year.

That concludes my prepared remarks. I will now turn the call back to the operator.

Hey, good morning, and thanks for taking my question. Just one on the interval fund structure that's been developed for next year.

Just curious, could you just talk a little bit more about the opportunity here, what sorts of potential demand are you seeing across the wealth clients? Then would this be leveraging some of the existing strategies within the credit teams?

Thanks.

Hey, Ken. Thanks for the question.

It'll certainly leverage some of the strengths that we currently have on the platform, specifically in the credit business. We've talked at length about the convergence of capital and the need for more flexible solutions, and the interval fund is clearly the ability to capture that.

The crossover between private and public markets, we just see that big convergence, and we're actually seeing a fair bit of demand. We've been out there talking to several of our key relationships just to gauge their appetite, and I think the reception that we're experiencing, at least initially, is pretty warm.

It continues to give us confidence that clients are willing to not only continue to evaluate and look at us as a key leader within the credit space, but also provide us with the degrees of freedom that we need to express the views that we have in an effort to produce the best returns possible. We're pretty confident that this is going to be an interesting and an important and growing initiative for us when it comes to just broadening out our credit business.

Great. Very helpful there.

Just one follow-up, if I may, wondering if we could just talk a little bit more about some of the RFP due diligence activity you've been seeing recently, maybe just talk about client sentiment generally across the board. Thanks.

It's a it's a good question. It's something that we actually spend a fair bit of time on, Ken, and you don't want to count anything until it's actually in the door.

When we look at, and everything that's in the RFP and in the just overall pipeline, clearly there's some subjectivity that goes into some of the some of the data, a lot of the data, and the RFP numbers haven't really shifted tremendously, quarter-over-quarter versus or year-over-year. However, the pipeline has grown pretty meaningfully.

As I'd mentioned, it it really doesn't matter to any of us unless it's actually crystallized and and brought in the door. To directly answer your question, we do see a pretty meaningful uptick in the in the dollars associated with the pipeline, but the RFP numbers remaining relatively flat or consistent, from a quarter quarter-over-quarter and year-over-year perspective.

Got you. Very helpful there.

Thanks again.

Thanks, Ken.

Great, thank you very much. Good morning, everybody.

I want to come back to your thoughts on sort of continuing to scale out the credit platform. I think you mentioned that you have opportunities geographically, by wrapper, by distribution channel.

Could you click in a little bit and maybe give us a sense of where you see the greatest opportunities, whether it be in the public/private side, in the private side? Just curious of where you see the best opportunity.

Thank you.

I think there's multiple ways to grow within credit. The first one is we have capacity that we can continue to build out and further expand.

I think we had mentioned last quarter, Bill, that we had a nice win in our floating rate business. We think that that's an area and a path to continued growth.

I don't know exactly what the track record longevity is, but it's nearing the five-year mark, and that'll be a key metric. The returns are good, and the peer rankings are solid, and it comes inside of a franchise that is obviously very highly regarded.

We think from a alternatives positioning within our credit platform, being able to continue to grow and expand incrementally the credit opportunities strategy remains very much in place. The public/private interval fund that I had mentioned we think is going to be a strong long-term grower if we, in fact, are able to launch, which we have conviction in our ability to get that done.

Then the third piece specifically just within our credit franchise is what I mentioned, which is going global. Tapping into the European market in both the syndicated loan and bond market, but also the potential to do something that's a little bit more unique to us, which is potentially expanding into CLOs.

We also are about to launch, I believe it's on November 2nd, if my memory serves me correctly, we're going to be expanding out our EMsights strategy capabilities within the European market, we're going to be launching a UCITS for Global Unconstrained. We believe that the appetite for Global Unconstrained in the European market is going to be very much aligned to how the demand looked much like and feels like in the U.S.

market, where we've seen really nice and meaningful growth on the heels of their strong performance. I think those are probably the key levers for us on the existing platform.

I can anticipate that there's going to be some questions as it relates to the pipeline, maybe I'll just hit that as well while we're just talking about it, because I think if you split the pipeline up between credit and alternatives, a lot of the opportunity set that we're seeing today right in front of us is in the credit area, specifically aligned to wealth. Similar to what I mentioned about our pipeline with Ken, the pipeline is just that, it's a pipeline until somebody crosses the finish line, then it's still just an idea that we're evaluating and attempting to make a decision on whether it makes sense for the platform.

I would just highlight that the majority of the opportunity in front of us today feels very much aligned to both credit and wealth, which, as you've heard us talk about, those are two very important initiatives that we're trying to continue to build off of.

Great. Thank you.

The other ones, I'm going to cheat a little bit and ask a two-part question. First part, can you talk a little bit about where you stand in terms of additional M&A to continue to broaden out inorganically?

Then, just a lesson, I think, from the last couple of announcements on these large mandates is just concentration risk. Can you talk a little bit about top five, top 10 clients, what kind of percentage of their AUM or revenues that comprises of?

Thank you.

Sure. On the M&A side, just aligned to my prior comment on credit, we think that it's going to come in both liftout form and in M&A.

Two in particular that we're talking to and growing in our conviction are going to be more along the lines of the M&A, slightly leaning a little bit more towards the inorganic. That's where we're seeing at least on the credit side, and I think that's very much aligned to how we're also seeing the pipeline develop on the alternative side, which is really coming in the form of the two or three areas that I think are most compelling to us are private credit, secondaries businesses, and we are seeing some interesting private equity opportunities primarily in sector-specific where we're evaluating a couple of live opportunities.

I'll turn it over to C.J. He can talk a little bit about the concentration risk.

Bill, I would say, when we think about, our our largest clients and and concentration, our largest clients are really diversified across, teams, strategies, and channels. If you think about our top 15 to to 20% of of clients, it's across six teams, nine strategies, and then, on the wealth side, it's across, a handful of clients and across, in in their platform across different channels within the within the wealth.

It's it's broadly diversified and not highly concentrated just with with one or two or clients or channels or strategies and teams.

Thank you, guys.

Hey, good morning, everyone. Thank you for taking the question.

Just to expand some of the discussion around some of the recent performance, and you guys highlighted that International and Global Value both have struggled on a one- and three-year basis recently. Things have gotten a little bit better, which is encouraging.

How are you messaging, I guess, to clients, given the fact that these strategies are still quite sizable in in the context of the firm, how are you messaging recent performance trends to clients? What kind of potential redemption risk, I guess, you guys still see from these products as we look out over the next 12 to 18 months?

I I think with with every strategy, not not specific to Global Value or International Value, I I think the the great thing about our platform is we have highly sophisticated clients that many of which have been with us for years, if not decades, and so they fully understand and completely appreciate not only the approach that each of our our teams take and how they develop their their investment strategies and how they invest, but they also recognize that alpha with alpha, there is unpredictability, and with alpha, there's also volatility. I think a lot of our a lot of our teams, and David and Dan O'Keefe are are no different here, where, they're they're talking about the philosophy, the process, and the ability to build a portfolio that in times where performance doesn't look great relative to a benchmark, that that can be sometimes the best opportunity set for them to lean into various markets or existing positions that are unloved and build a very compelling portfolio.

Q Q3 was very difficult. I I should have highlighted in my prepared comments, I'll highlight it now since you asked the question, if you think about the the breadth in the markets, which again goes back to my comment about sophisticated clients, they see this and they they recognize it, the breadth in the market is the worst we've experienced since 2000.

One of the examples that I would highlight is, the markets broadly, if you use the S&P 500, it's 2% 2% from its all-time high at the end of Q3, and yet the average stock is about 17% off of its if off of its all-time high. You can just see the the the really the lack of breadth, and it's it's pretty stark what what we're seeing.

When there is a return to normalcy, we think our teams, and, David and Dan will be no different here, they will have the ability to capture that opportunity set in a pretty meaningful way. We're we're continuing to extol the virtues of each of the teams' philosophies and processes, recognizing that we are staying true to who we are and the discipline that we undertake.

I think a lot of our clients, recognize a one- and a three-year period, that's a relatively short evaluation period, even especially for teams that have been in existence for 25-plus years. Even with, even in Q3 with the the shortfall of performance, both of them are were basically at benchmark over a three-year period, it wasn't like we had a massive hole to dig ourselves out of.

Now with a 3 to 400 basis point tailwind coming in October, they're they're clearly meaningfully ahead over a one-year and certainly well ahead over over three years as well.

Great. That's super helpful context.

Thank you, guys. Second second question for me, I just wanted to hit on a couple of financial items.

C.J., maybe this is for you, on the fee rate, a couple of moving pieces in the quarter. Maybe just give us a sense of the jumping-off point for Q4 on the fee rate.

More importantly, given the fact that the business is sort of shifting and there are some, there's some headwinds on the wrappers, obviously, some of the more active equity business that tends to be higher fee has been shrinking, but then you have the alts that are growing and you're expanding into other wealth products within credit, which presumably are at a little more of a healthy fee rate than some of the institutional mandates. Based on kind of where you see the business evolving over the next, call it, one to two years, what's the trajectory for firm-wide fee rate, in your view?

Yeah. Thanks for the question, Alex.

I I think we we sort of highlighted we think the the fee rate should be up, commensurate with what we saw at the end of the quarter, somewhere around 70 basis points, up probably a little over 100 basis points than than where we were trending. For now, we see that relatively stable.

I think you hit the nail on the head with, fee rate trajectory is largely going to depend on, where we see the attrition. Obviously, our mutual fund business, which has has been in decline in the equity space, has has higher average fee rates, and we've been seeing that offset with, higher fee rates in the alt space.

Depending on on, where the flows outpace each other, you could see us, relatively stable, I think, was what our expectation would be before we see any, major trend way one way or the other.

Just to add a a little bit to that, the the institutional business within equity is is clearly where we're we're seeing a lot of, active to passive, some rebalancing activity, some de-risking, plans that are, hitting their funding targets in the in the DB market are are de-risking. Those mandates tend to be on the lower end of of our fee spectrum give just given the the size and the scale that they they tend to bring to to the firm.

Then, juxtapose that against where we are building capacity and capabilities in our existing franchises, some of which we haven't talked about, but things like the interval fund, which should bring a, a commensurately higher higher fee level; Grandview Property Partners, as I'd mentioned, we we just closed on our first anchor, and we're going to be out in in the market raising our new our new flagship series fund, which should come in at a, commensurately higher fee level given the the nature of the asset class. We we just brought on John Brudnek as a liftout from Sachem Head, which will be launching in a in a long/short format, which we believe will come with a, higher fee relative to, where our existing platform and business is today.

Again, some of the R&D on some of the equity teams that we're working on, if we do bring them out in into the into the public domain, we think that those will also have a commensurately higher higher fee level. Maybe just to to C.J.'

s point that I think the fee might be be the same, but I think the offsets will be coming in areas where we think there's, good growth opportunities and certainly an expectation for, long-term long-term client demand.

Alex, one other thing, when you think about the short term, obviously, we have, greatest opportunity to achieve performance fees in the fourth quarter. We we typically see a spike in in the overall fee rate, but the recurring fee rate, which I talked about at 70, is just for the recurring management fee.

The performance fees, if they come to fruition, should spike that a bit in the fourth quarter.

Yep, that makes a lot of sense. Thank you, guys.

Thanks. Maybe on the ETF share classes, is there any difference in strategy for selling those, and what what's kind of the strategy for pricing them, and are you going to be launching them in kind of phases or all at once?

Hi, hi, John. Thanks for the question.

On on the ETFs, the the the strategy, if we if our anticipated launch is approved, which we still have some regulatory and board hurdles to get through, but we don't anticipate having any problems. If if they are launched, they will be pari passu to the existing strategies.

We're not we're not looking to compete against ourselves. We're not looking to, do it at a at a lower fee rate.

We are really just trying to provide our existing and future clients access to a to our IP in a wrapper that is clearly the preferred option. We are we are going to be staging these launches out, these anticipated launches out, over the course of the next several quarters.

We're going to start with the the two that I'd mentioned, Select Equity and the Focus Fund. Those will be, hopefully, followed by a a a few more in Q1, and then, again, anticipating several more throughout the course of of 2027.

This will be a a deliberate approach and and process that we're undertaking. It to directly answer your question, we're not competing on on fee against ourselves.

This is really just the the ability to, be be vehicle-agnostic and provide clients with access and opportunity and choice in a wrapper that is is clearly the preferential option in today's market.

Got it. Then, you talked about going more global with some strategies.

Could you talk about kind of in in terms of international distribution, any differences you're seeing in in demand by region or different, like, preferences for strategies in different regions?

We're we're excited about what we're doing in our our non-U.S. business as it relates to to distribution, similar to what we had talked about over the past couple of quarters in the in the U.S.

market, where we have been expanding, deliberately expanding our our U.S. footprint.

We're we're doing the same in in the wealth market, both in UK and Europe and in the Middle East. We've we've placed a couple of resources in those in those regions, and we are seeing a, meaningful uptick in the in the activity levels, part of the pipeline conversation that I hit on with with Ken's question.

I think a lot of that is also coming in the form of of those regions. We're also, as I'd mentioned in my prepared comments, we we're just trying to stay open for business here and taking away any of the impediments that might be associated with investing on our platform.

We've deliberately launched several share classes in areas where we think, whether it's a a of currency or a a reinvestment share class, there's there's different ways to access our platform now that you just weren't able to access in the in the past. This has come from direct feedback through all these client conversations that the the new folks are having.

That's still early days. The ramp is is going to take a little time, and, if we see the green shoots that develop in in the form of crystallization, then we can continue to add resources into that marketplace.

One area that we are that we are excited about expanding in is certainly the the credit capabilities, which is why, and and alternatives, which is why we're, launching, deliberately launching the Global Unconstrained strategy in UCITS form. We've heard time and again that people are looking for diversifiers, and we think we've got, one of, if not the best in the business in a, daily liquid wrapper that people are very excited about.

Thank you.

Great. Thank you very much taking the extra questions.

Just maybe some housekeeping items. C.J., I was wondering if you could give us an update on the fixed-cost outlook from here and maybe how you might be preliminarily thinking through 2027.

Then thank you for the guide on performance fees. Could you unpack that a little bit in terms of what areas you're seeing the strength in and how we should think about any kind of different payout rate on comp relative to the base business?

Thank you.

Sure. With with respect to the fixed-cost outlook, I think that, it remains unchanged from what we gave at the beginning of the year.

We guided to some mid-single digits if you think about excluding the addition of the cost from Grandview, which we acquired in January, and then the exchange of kicks with the LTI grant that we did in 2026 with what was rolling off from the five-year earlier grant. That that that guidance hasn't changed at all.

Then on the performance fees, largely we're seeing, this the same, trends that we saw last year. In my prepared remarks, I said, through September 30th, we're currently estimating, a similar outcome to last year.

Obviously, we have a couple months to go with performance, so that that could change, either to the downside or upside. We're also, we're seeing a a very good strong performance fee opportunities in our EMsights team, which we've which we saw last year, which accounts for, a significant amount of of the performance fee opportunity.

Just, a little bit more, we have what, eight accounts or eight teams that have performance fee accounts, and as of right now, seven of those eight are are in the money. It's broadly dispersed and diversified across all of our opportunities.

Thank you.