Artisan Partners Asset Management Inc

Analysis

Business Description

Artisan Partners Asset Management Inc (APAM) is an investment management company, which offers active investment strategies, investment management and advisory, and asset management services to sophisticated clients globally. It operates through its offices in Milwaukee, San Francisco, Atlanta, New York, Chicago, and Wilmington, in the US. It also has an international presence in Australia, the UK, Canada, certain Middle Eastern, and African, and Asian countries.

The company serves institutional investors including corporate and public retirement plans, endowments, trusts, and foundations; investment professionals such as advisors, broker-dealers, centralized research teams, registered investment advisors, and index fund advisors; and individual investors.

As of December 31, 2020, the company had Assets under Management (AuM) of US$157,776 million. APAM offers 19 investment strategies through its nine autonomous investment teams across multiple asset classes and investment styles. The company’s investment teams are Global Value, International Value, Growth, Global Equity, U.S. Value, Credit, Developing World, Emerging Markets, and Antero Peak Group. Its independent investment teams manage a variety of active investment strategies that are diversified across market capitalization, geographic regions, and investment style.

The Global Value team manages two equity investment strategies: Non-U.S. Value and Global Value strategy. The team uses a fundamental investment process to build investment portfolios, considering the high-quality and undervalued companies having sound balance sheet statements and shareholder-centered management teams. It also invests in the companies, which have strong competitive positions, histories of generating strong free cash flow, and enhancing returns on capital. The Global Value team manages the Global Value strategy and the Select Equity strategy. As of December 31, 2020, the Global Value team had an AuM of US$22,417 million.

International Value team manages International Value and International Small Cap Value. As of December 31, 2020, the International Value team reported AuM of US$24,123 million.

The Global Equity team manages three equity investment strategies: Non-U.S. Growth, Global Equity, and Non-U.S. Small-Mid Growth mainly in San Francisco and New York. The team uses a fundamental stock selection method to identify high-quality leading companies with attractive growth and valuation features. It uses several valuation metrics to form a target price range and evaluates the relationship between its estimation of a company’s sustainable growth projections and the company’s current valuation. As on December 31, 2020, the Global Equity team reported an AuM of US$ 32,056 billion.

The Growth team manages four equity investment strategies: U.S. Mid-Cap Growth, Global Opportunities, Global Discovery, and U.S. Small-Cap Growth. The team investment process concentrates on two elements as security selection and capital allocation. It identifies growth companies with franchise characteristics such as low-cost production capability, ownership of the proprietary asset, dominant market share or brand name, and progressive profit cycle. The team focuses on companies, which have the potential for long-term growth, complemented by the demand for their offerings. In FY2020, the Growth team reported an AuM of US$ 52,685 million.

The U.S. Value team manages two equity investment strategies: U.S. Mid-Cap Value and Value Equity. It focuses on investing in companies that are undervalued with robust financial conditions and holds outstanding business economics. It focuses on the companies having an adequate level of debt and positive cash flow. As of December 31, 2020, the U.S. Value team reported an AuM of US$ 7,149 million.

The Credit team manages two investment strategies: High Income and Credit Opportunities. The high-Income strategy mainly invests in non-investment grade corporate bonds and secured and unsecured loans of the US and non-US issuers. The team focuses on issuers having attractive risk-adjusted returns and business models. Its research methodology comprises four fundamental pillars-financial strength and flexibility, business quality, value identification, and downside analysis. In FY2020, the Credit team reported an AUM of US$6,338 million.

The Developing World team manages a single investment strategy. The team uses a fundamental investment methodology to build a diversified portfolio of securities related to developing world economies. It focuses on financially strong and free cash flow generative companies with robust business models, exposed to the growth of developing economies. In FY2020, the Developing World team reported an AuM of US$8,853 million.

The Sustainable Emerging Markets team a manages single equity management strategy: Emerging Markets strategy. It focuses on companies, which could benefit from the growing emerging markets and hold a competitive advantage globally. The team considers the investment opportunities grow, when the businesses sustainable earnings are undervalued compared to its peers and historical industry, regional, and country evaluations. In FY2020, the Emerging Markets team reported an AuM of US$679 million.

The Antero Peak Group manages two investment strategies including Antero Peak and Antero Peak Hedge. Its investment methodology is based on thematic idea creation, an organized framework for analysis of companies, and proactive risk management. Through this approach, the team strives to build an investment portfolio that is designed to maximize the alpha, while restricting downside risk over the long term. In FY2020, the Thematic team reported an AuM of US$3,476 million.

The company classified its operations into two geographical segments: U.S. and Non-U.S.

Geographical Segments
Inventore veritatis
Performance

Reported revenue of US$748.3 million for FY2020 which grew 12.3% YoY. U.S. accounted for 83.2% of the company's revenue in FY2020.