Artisan Partners' Q2 2025: Navigating Contradictions in M&A Strategy, Capacity, and Institutional Mandates

M&A strategy and focus areas, capacity management and strategy, outlook for EMsights and institutional mandates, M&A and alternatives capabilities, and institutional mandate timing and market environment are the key contradictions discussed in Artisan Partners Asset Management's latest 2025Q2 earnings call.



AUM and Asset Flows:
- Artisan Partners Asset Management reported ending AUM of $176 billion, up 8% from the previous quarter, with average AUMremaining flat sequentially but up 5% year-on-year.
- The growth in AUM was driven by strong equity market returns across global markets, offset by net client cash outflows of $1.9 billion due to lower gross equity inflows and outflows.

Institutional Mandates and Emerging Markets:
- The firm secured 2 new institutional mandates and observed increased interest in emerging markets, particularly in fixed income and sustainable emerging markets strategies.
- The positive momentum in emerging markets is attributed to strong investment performance, anchor capital, and business expansion across equities, fixed income, and alternatives.

Morningstar Recognition and Investment Performance:
- Morningstar recognized Artisan's Bryan Krug as the 2025 Investment Excellence winner for fixed income and David Samra as a finalist for U.S. equity investing excellence.
- The recognition is based on the consistently strong performance of the Credit team's strategies and International Value Group, outpacing their benchmarks by significant margins.

Capital Allocation and M&A:
- Artisan Partners is considering M&A opportunities, particularly in alternatives assets such as real estate, private equity, and private credit.
- The focus on M&A is driven by the opportunity to enhance the platform and value proposition for talent, while aligning with the firm's investment-first culture.

Operational Performance and Cost Management:
- Revenue for the quarter increased by 2% from the previous quarter and 4% year-on-year, with adjusted operating expenses up 3% from the first quarter of 2025 and 5% year-on-year.
- The increase in expenses was primarily due to higher incentive compensation expense, reflecting stronger performance and market appreciation of long-term incentive awards.