Artisan Partners Asset Management Inc. (NYSE:APAM) Q2 2022 Earnings Conference Call August 3, 2022 1:00 PM ET

Company Participants

Makela Taphorn - IR

Eric Colson - CEO

C.J. Daley - CFO

Conference Call Participants

Kenneth Lee - RBC Capital Markets

Dan Fannon - Jefferies

Alex Blostein - Goldman Sachs

John Dunn - Evercore ISI

Operator

Good day, and welcome to the Artisan Partners Second Quarter 2022 Earnings Call [Operator Instructions]. Please note that this event is being recorded.

I would not like to turn the conference over to Makela Taphorn with Artisan Partners. Please go ahead.

Makela Taphorn

Thank you. 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. Our latest results and investor presentation are available on the Investor Relations section of our Web site. Following these remarks, we will open the line for questions. Before we begin, I'd 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 detailed in our filings with the SEC. We are not required to update or revise any of these statements following the call. In addition, some of our remarks made 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, Makela, and thank you everyone for joining the call or reading the transcript. The first six months of 2022 have been tough. The war in Ukraine, inflation and June reaching approximately 9%, a 40 year high, negative consumer sentiment, economic stagnation, whether qualifying as a recession or not, the worst first half for the S&P 500 since 1970, and persistent high volatility. At Artisan Partners, our AUM declined 26% from $175 billion to $131 billion. Year over year, first half revenues declined 11% and adjusted operating margin declined 750 basis points from 43.6% to 36.1%.

As we've experienced before, these times demand discipline to our business and financial model for stability and perspective to capture opportunities for long term growth. To achieve stability and growth, it's critical that we level set our business and financials, and align our interest and resources for growth with all stakeholders, our board, management, associates, clients and shareholders. Last week after our quarterly board meeting, we hosted a firm wide discussion with several members of our board in Milwaukee. The event was attended in person and online by over 250 Artisan associates. We discussed Artisan Partners’ history, philosophy, values and consistency through time. I wish all of our stakeholders could have been there. The combination of the directors on stage and the associates in the audience drove home our commitment to who we are as an investment firm. Our commitment to excellence, quality and doing the right thing, our patient long term approach and the consistent application of our guiding principles, as we have grown and evolved since 1995. Across the firm, we take confidence in our investment track record and proven business success.