Artisan Partners Asset Management Inc. (NYSE:APAM) Q4 2022 Earnings Conference Call February 1, 2023 1:00 PM ET

Company Participants

Makela Taphorn - Investor Relations

Eric Colson - Chief Executive Officer

C.J. Daley - Chief Financial Officer

Conference Call Participants

Alex Blostein - Goldman Sachs

Bill Katz - Credit Suisse

Daniel Fannon - Jefferies

Michael Brown - KBW

Operator

Hello, and thank you for standing by. My name is Drew, and I will be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, management will conduct a question-and-answer session, and conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. [Operator Instructions]

At this time, I will turn the call over to Artisan Partners Asset Management.

Makela Taphorn

Welcome to the Artisan Partners Asset Management Business Update and Earnings Call.

Today's call will include remarks from Eric Colson, 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, I would like to remind you that comments made on today's call, including responses to questions, may deal with forward-looking statements. These are subject to risks and uncertainties and are presented in the earnings release and details in our SEC filings. We are not required to update or revise any of these statements following the call.

In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release.

I will now turn the call over to Eric Colson.

Eric Colson

Thank you all for joining the call or reading the transcript.

Outcomes in 2022 were difficult. For the year, our AUM declined from $175 billion to $128 billion, a 27% drop. Of our $9.8 billion of net outflows, more than $5 billion occurred in the fourth quarter, we experienced net outflows across majority of strategies and investment teams.

For the year, our gross outflow rate was in line with our prior 10-year average. There was a broad array of reasons that clients rebalanced away with no single theme dominating. Lower gross inflows drove the net flow. Uncertainty, war, inflation, China, regulation paused decision making, especially allocations to risk assets.

The market rebounded in the fourth quarter, especially in non-U.S. markets. We believe decision-makers are learning to operate with greater uncertainty and has gathered more information and knowledge about direction of inflation and China policies.