UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, ~~2022~~2023


OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-35826

Artisan Partners Asset Management Inc.

(Exact name of registrant as specified in its charter)


Delaware		45-0969585
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

875 E. Wisconsin Avenue, Suite 800		53202
Milwaukee,	WI		~~53202~~
(Address of principal executive offices)		(Zip Code)

(414) 390-6100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	APAM	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of outstanding shares of the registrant’s Class A common stock, par value $0.01 per share, Class B common stock, par value $0.01 per share, and Class C common stock, par value $0.01 per share, as of October ~~28, 2022~~31, 2023 were ~~67,911,057, 2,589,388~~68,479,386, 2,456,534 and ~~9,111,117,~~9,024,947, respectively.

Table of Contents

TABLE OF CONTENTS


		Page
Part I	Financial Information
Item 1.	Unaudited Consolidated Financial Statements
	Unaudited Condensed Consolidated Statements of Financial Condition as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022	1
	Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022	2
	Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022	3
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022	4
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4546
Item 4.	Controls and Procedures	4546
Part II	Other Information
Item 1.	Legal Proceedings	4647
Item 1A.	Risk Factors	4647
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4647
Item 3.	Defaults Upon Senior Securities	4647
Item 4.	Mine Safety Disclosures	4647
Item 5.	Other Information	4647
Item 6.	Exhibits	4647
	Signatures	4849

Except where the context requires otherwise, in this report, references to the “Company”, “Artisan”, “we”, “us” or “our” refer to Artisan Partners Asset Management Inc. (“APAM”) and its direct and indirect subsidiaries, including Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”). On March 12, 2013, APAM closed its initial public offering and related corporate reorganization. Prior to that date, APAM was a subsidiary of Artisan Partners Holdings.

Forward-Looking Statements

This report contains, and from time to time our management may make, forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements regarding future events and our future performance, as well as management’s current expectations, beliefs, plans, estimates, or projections relating to the future, are forward-looking statements within the meaning of these laws. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue”, the negative of these terms and other comparable terminology. Forward-looking statements are only predictions based on current expectations and projections about future events. Forward-looking statements are subject to a number of risks and uncertainties, and there are important factors that could cause actual results, level of activity, performance, actions or achievements to differ materially from the results, level of activity, performance, actions or achievements expressed or implied by the forward-looking statements. These factors include: the loss of key investment professionals or senior management, adverse market or economic conditions, poor performance of our investment strategies, change in the legislative and regulatory environment in which we operate, operational or technical errors or other damage to our reputation ~~the long-term impact of the COVID-19 pandemic~~ and other factors disclosed in the Company’s filings with the Securities and Exchange Commission, including those factors listed under the caption entitled “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~22, 2022,~~27, 2023, as such factors may be updated from time to time. Our periodic and current reports are accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this report, except as required by law.

Table of Contents

Forward-looking statements include, but are not limited to, statements about:

•our anticipated future results of operations;

•our potential operating performance and efficiency, including our ability to operate under different and unique circumstances;

•our expectations with respect to future business initiatives;

•our expectations with respect to the performance of our investment strategies;

•our expectations with respect to future levels of assets under management, including the capacity of our strategies and client cash inflows and outflows;

•our expectations with respect to industry trends and how those trends may impact our business;

•our financing plans, cash needs and liquidity position;

•our intention to pay dividends and our expectations about the amount of those dividends;

•our expected levels of compensation of our employees, including equity- and cash-based long-term incentive compensation;

•our expectations with respect to future expenses and the level of future expenses;

•our expected tax rate, and our expectations with respect to deferred tax assets; and

•our estimates of future amounts payable pursuant to our tax receivable agreements.

Table of Contents

Part I — Financial Information

Item 1. Unaudited Consolidated Financial Statements

ARTISAN PARTNERS ASSET MANAGEMENT INC.

Unaudited Condensed Consolidated Statements of Financial Condition

(U.S. dollars in thousands, except per share amounts)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022

ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	168,123	$	189,226	Cash and cash equivalents	$	198,308	$	114,832
Accounts receivable	Accounts receivable	103,434		115,850		Accounts receivable	96,062		98,634
Investment securities	Investment securities	78,240		47,878		Investment securities	139,630		85,415
Property and equipment, net	Property and equipment, net	47,398		35,313		Property and equipment, net	46,896		48,104
Deferred tax assets	Deferred tax assets	484,756		497,902		Deferred tax assets	446,491		477,024
Restricted cash		629		629

Prepaid expenses and other assets	Prepaid expenses and other assets	19,493		20,282		Prepaid expenses and other assets	18,986		20,053
Operating lease assets	Operating lease assets	104,774		88,642		Operating lease assets	91,662		101,410
Assets of consolidated investment products	Assets of consolidated investment products					Assets of consolidated investment products
Cash and cash equivalents	Cash and cash equivalents	18,870		10,916		Cash and cash equivalents	32,221		28,416
Accounts receivable and other	Accounts receivable and other	52,865		6,408		Accounts receivable and other	10,993		4,977
Investment assets, at fair value	Investment assets, at fair value	264,302		195,001		Investment assets, at fair value	336,429		255,743
Total assets	Total assets	$	1,342,884	$	1,208,047	Total assets	$	1,417,678	$	1,234,608

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND STOCKHOLDERS’ EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND STOCKHOLDERS’ EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND STOCKHOLDERS’ EQUITY
Accounts payable, accrued expenses, and other	Accounts payable, accrued expenses, and other	$	26,276	$	28,992	Accounts payable, accrued expenses, and other	$	23,872	$	24,414
Accrued incentive compensation	Accrued incentive compensation	105,971		7,521		Accrued incentive compensation	126,453		29,762
Borrowings	Borrowings	199,007		199,444		Borrowings	199,226		199,050
Operating lease liabilities	Operating lease liabilities	123,476		100,303		Operating lease liabilities	110,524		120,847
Amounts payable under tax receivable agreements	Amounts payable under tax receivable agreements	398,247		425,427		Amounts payable under tax receivable agreements	363,860		398,789
Liabilities of consolidated investment products	Liabilities of consolidated investment products					Liabilities of consolidated investment products
Accounts payable, accrued expenses, and other	Accounts payable, accrued expenses, and other	84,862		20,185		Accounts payable, accrued expenses, and other	37,379		26,358
Investment liabilities, at fair value	Investment liabilities, at fair value	21,051		19,179		Investment liabilities, at fair value	13,314		20,751
Total liabilities	Total liabilities	958,890		801,051		Total liabilities	874,628		819,971
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Redeemable noncontrolling interests	Redeemable noncontrolling interests	128,881		111,035		Redeemable noncontrolling interests	219,726		135,280
Common stock	Common stock					Common stock
Class A common stock ($0.01 par value per share, 500,000,000 shares authorized, 67,911,928 and 66,699,872 shares outstanding at September 30, 2022 and December 31, 2021, respectively)		679		667
Class B common stock ($0.01 par value per share, 200,000,000 shares authorized, 2,589,388 and 3,206,580 shares outstanding at September 30, 2022 and December 31, 2021, respectively)		26		32
Class C common stock ($0.01 par value per share, 400,000,000 shares authorized, 9,111,117 and 9,128,617 shares outstanding at September 30, 2022 and December 31, 2021, respectively)		91		91
Class A common stock ($0.01 par value per share, 500,000,000 shares authorized, 68,481,220 and 67,982,025 shares outstanding at September 30, 2023 and December 31, 2022, respectively)						Class A common stock ($0.01 par value per share, 500,000,000 shares authorized, 68,481,220 and 67,982,025 shares outstanding at September 30, 2023 and December 31, 2022, respectively)	685		680
Class B common stock ($0.01 par value per share, 200,000,000 shares authorized, 2,456,534 and 2,583,884 shares outstanding at September 30, 2023 and December 31, 2022, respectively)						Class B common stock ($0.01 par value per share, 200,000,000 shares authorized, 2,456,534 and 2,583,884 shares outstanding at September 30, 2023 and December 31, 2022, respectively)	25		26
Class C common stock ($0.01 par value per share, 400,000,000 shares authorized, 9,024,947 and 9,040,147 shares outstanding at September 30, 2023 and December 31, 2022, respectively)						Class C common stock ($0.01 par value per share, 400,000,000 shares authorized, 9,024,947 and 9,040,147 shares outstanding at September 30, 2023 and December 31, 2022, respectively)	90		90
Additional paid-in capital	Additional paid-in capital	163,769		141,835		Additional paid-in capital	187,764		171,416
Retained earnings	Retained earnings	78,641		134,889		Retained earnings	112,266		93,088
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(4,289)		(1,310)		Accumulated other comprehensive income (loss)	(3,246)		(3,079)
Total Artisan Partners Asset Management Inc. stockholders’ equity	Total Artisan Partners Asset Management Inc. stockholders’ equity	238,917		276,204		Total Artisan Partners Asset Management Inc. stockholders’ equity	297,584		262,221
Noncontrolling interests - Artisan Partners Holdings	Noncontrolling interests - Artisan Partners Holdings	16,196		19,757		Noncontrolling interests - Artisan Partners Holdings	25,740		17,136
Total stockholders’ equity	Total stockholders’ equity	$	255,113	$	295,961	Total stockholders’ equity	323,324		279,357
Total liabilities, redeemable noncontrolling interests, and stockholders’ equity	Total liabilities, redeemable noncontrolling interests, and stockholders’ equity	$	1,342,884	$	1,208,047	Total liabilities, redeemable noncontrolling interests, and stockholders’ equity	$	1,417,678	$	1,234,608

The accompanying notes are an integral part of the consolidated financial statements.

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ARTISAN PARTNERS ASSET MANAGEMENT INC.

Unaudited Consolidated Statements of Operations

(U.S. dollars in thousands, except per share amounts)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues	Revenues									Revenues
Management fees	Management fees	$	234,191	$	316,176	$	766,901	$	901,011	Management fees	$	248,691	$	234,191	$	725,980	$	766,901
Performance fees	Performance fees	121		398		397		11,189		Performance fees	31		121		154		397
Total revenues	Total revenues	$	234,312	$	316,574	$	767,298	$	912,200	Total revenues	248,722		234,312		$	726,134	$	767,298
Operating Expenses	Operating Expenses									Operating Expenses

Compensation and benefits	Compensation and benefits	122,033		142,235		389,359		419,713		Compensation and benefits	130,648		122,033		392,593		389,359
Distribution, servicing and marketing	Distribution, servicing and marketing	5,593		8,131		18,952		23,707		Distribution, servicing and marketing	6,153		5,593		17,786		18,952
Occupancy	Occupancy	7,127		5,560		20,407		16,260		Occupancy	7,244		7,127		21,506		20,407
Communication and technology	Communication and technology	11,945		10,873		35,833		31,150		Communication and technology	12,974		12,441		38,395		37,704
General and administrative	General and administrative	8,888		6,717		28,622		18,700		General and administrative	9,548		8,392		28,690		26,751
Total operating expenses	Total operating expenses	155,586		173,516		493,173		509,530		Total operating expenses	166,567		155,586		498,970		493,173
Total operating income	Total operating income	78,726		143,058		274,125		402,670		Total operating income	82,155		78,726		227,164		274,125
Non-operating income (expense)	Non-operating income (expense)									Non-operating income (expense)
Interest expense	Interest expense	(2,428)		(2,711)		(7,853)		(8,116)		Interest expense	(2,297)		(2,428)		(6,520)		(7,853)
Net gain (loss) on the tax receivable agreements	Net gain (loss) on the tax receivable agreements	431		358		913		358		Net gain (loss) on the tax receivable agreements	505		431		505		913
Net investment gain (loss) of consolidated investment products	Net investment gain (loss) of consolidated investment products	(3,936)		2,824		(14,605)		18,068		Net investment gain (loss) of consolidated investment products	9,787		(3,936)		38,189		(14,605)
Other net investment gain (loss)	Other net investment gain (loss)	(5,563)		(2,109)		(23,729)		2,022		Other net investment gain (loss)	(2,152)		(5,563)		11,329		(23,729)

Total non-operating income (expense)	Total non-operating income (expense)	(11,496)		(1,638)		(45,274)		12,332		Total non-operating income (expense)	5,843		(11,496)		43,503		(45,274)
Income before income taxes	Income before income taxes	67,230		141,420		228,851		415,002		Income before income taxes	87,998		67,230		270,667		228,851
Provision for income taxes	Provision for income taxes	14,750		28,054		46,761		78,137		Provision for income taxes	14,570		14,750		51,663		46,761
Net income before noncontrolling interests	Net income before noncontrolling interests	52,480		113,366		182,090		336,865		Net income before noncontrolling interests	73,428		52,480		219,004		182,090
Less: Net income attributable to noncontrolling interests - Artisan Partners Holdings	Less: Net income attributable to noncontrolling interests - Artisan Partners Holdings	10,999		24,796		37,150		74,064		Less: Net income attributable to noncontrolling interests - Artisan Partners Holdings	11,319		10,999		35,493		37,150
Less: Net income (loss) attributable to noncontrolling interests - consolidated investment products	Less: Net income (loss) attributable to noncontrolling interests - consolidated investment products	(2,754)		2,157		(9,007)		10,903		Less: Net income (loss) attributable to noncontrolling interests - consolidated investment products	8,954		(2,754)		25,978		(9,007)
Net income attributable to Artisan Partners Asset Management Inc.	Net income attributable to Artisan Partners Asset Management Inc.	$	44,235	$	86,413	$	153,947	$	251,898	Net income attributable to Artisan Partners Asset Management Inc.	$	53,155	$	44,235	$	157,533	$	153,947

Basic earnings per share	Basic earnings per share	$	0.65	$	1.30	$	2.17	$	3.84	Basic earnings per share	$	0.76	$	0.65	$	2.27	$	2.17
Diluted earnings per share	Diluted earnings per share	$	0.65	$	1.30	$	2.17	$	3.84	Diluted earnings per share	$	0.76	$	0.65	$	2.27	$	2.17
Basic weighted average number of common shares outstanding	Basic weighted average number of common shares outstanding	62,623,434		59,965,549		62,329,756		59,519,634		Basic weighted average number of common shares outstanding	63,520,402		62,623,434		63,419,587		62,329,756
Diluted weighted average number of common shares outstanding	Diluted weighted average number of common shares outstanding	62,632,660		59,982,774		62,353,275		59,535,894		Diluted weighted average number of common shares outstanding	63,563,044		62,632,660		63,449,804		62,353,275
Dividends declared per Class A common share	Dividends declared per Class A common share	$	0.60	$	1.00	$	3.11	$	3.16	Dividends declared per Class A common share	$	0.61	$	0.60	$	2.01	$	3.11

The accompanying notes are an integral part of the consolidated financial statements.

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ARTISAN PARTNERS ASSET MANAGEMENT INC.

Unaudited Consolidated Statements of Comprehensive Income

(U.S. dollars in thousands)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income before noncontrolling interests	Net income before noncontrolling interests	$	52,480	$	113,366	$	182,090	$	336,865	Net income before noncontrolling interests	$	73,428	$	52,480	$	219,004	$	182,090
Other comprehensive income (loss)	Other comprehensive income (loss)									Other comprehensive income (loss)

Foreign currency translation gain (loss)	Foreign currency translation gain (loss)	(1,518)		(595)		(3,476)		(358)		Foreign currency translation gain (loss)	(770)		(1,518)		144		(3,476)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(1,518)		(595)		(3,476)		(358)		Total other comprehensive income (loss)	(770)		(1,518)		144		(3,476)
Comprehensive income	Comprehensive income	50,962		112,771		178,614		336,507		Comprehensive income	72,658		50,962		219,148		178,614
Comprehensive income attributable to noncontrolling interests - Artisan Partners Holdings	Comprehensive income attributable to noncontrolling interests - Artisan Partners Holdings	10,800		24,697		36,654		74,028		Comprehensive income attributable to noncontrolling interests - Artisan Partners Holdings	11,204		10,800		35,727		36,654
Comprehensive income (loss) attributable to noncontrolling interests - consolidated investment products	Comprehensive income (loss) attributable to noncontrolling interests - consolidated investment products	(2,754)		2,157		(9,007)		10,903		Comprehensive income (loss) attributable to noncontrolling interests - consolidated investment products	8,954		(2,754)		25,978		(9,007)
Comprehensive income attributable to Artisan Partners Asset Management Inc.	Comprehensive income attributable to Artisan Partners Asset Management Inc.	$	42,916	$	85,917	$	150,967	$	251,576	Comprehensive income attributable to Artisan Partners Asset Management Inc.	$	52,500	$	42,916	$	157,443	$	150,967

The accompanying notes are an integral part of the consolidated financial statements.

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ARTISAN PARTNERS ASSET MANAGEMENT INC.

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

(U.S. dollars in thousands)


Three months ended September 30, 2022		Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests
Three months ended September 30, 2023																				Three months ended September 30, 2023	Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests

Balance at July 1, 2022		$	674	$	31	$	91	$	153,134	$	75,443	$	(2,971)	$	16,892	$	243,294	$	127,078
Balance at July 1, 2023																				Balance at July 1, 2023	$	685	$	25	$	90	$	181,484	$	101,243	$	(2,531)	$	25,741	$	306,737	$	206,288
Net income	Net income	—		—		—		—		44,235		—		10,999		55,234		(2,754)		Net income	—		—		—		—		53,155		—		11,319		64,474		8,954
Other comprehensive income - foreign currency translation	Other comprehensive income - foreign currency translation	—		—		—		—		—		(1,294)		(224)		(1,518)		—		Other comprehensive income - foreign currency translation	—		—		—		—		—		(655)		(115)		(770)		—
Cumulative impact of changes in ownership of Artisan Partners Holdings LP	Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		889		—		(24)		(865)		—		—		Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		(532)		—		(60)		592		—		—
Amortization of equity-based compensation	Amortization of equity-based compensation	—		—		—		8,660		—		—		1,499		10,159		—		Amortization of equity-based compensation	—		—		—		6,781		—		—		1,114		7,895		—
Deferred tax assets, net of amounts payable under tax receivable agreements	Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		1,378		—		—		—		1,378		—		Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		32		—		—		—		32		—
Issuance of Class A common stock, net of issuance costs	Issuance of Class A common stock, net of issuance costs	—		—		—		(7)		—		—		—		(7)		—		Issuance of Class A common stock, net of issuance costs	—		—		—		(1)		—		—		—		(1)		—
Forfeitures and employee/partner terminations	Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—		Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—

Issuance of restricted stock awards																				Issuance of restricted stock awards	—		—		—		—		—		—		—		—		—
Employee net share settlement	Employee net share settlement	—		—		—		(285)		(1)		—		(48)		(334)		—		Employee net share settlement	—		—		—		—		—		—		—		—		—
Exchange of subsidiary equity	Exchange of subsidiary equity	5		(5)		—		—		—		—		—		—		—		Exchange of subsidiary equity	—		—		—		—		—		—		—		—		—

Capital contributions, net	Capital contributions, net	—		—		—		—		—		—		—		—		4,557		Capital contributions, net	—		—		—		—		—		—		—		—		23,013

Impact of deconsolidation of CIPs																				Impact of deconsolidation of CIPs	—		—		—		—		—		—		—		—		(18,529)
Distributions	Distributions	—		—		—		—		—		—		(12,026)		(12,026)		—		Distributions	—		—		—		—		—		—		(12,883)		(12,883)		—
Dividends	Dividends	—		—		—		—		(41,036)		—		(31)		(41,067)		—		Dividends	—		—		—		—		(42,132)		—		(28)		(42,160)		—
Balance at September 30, 2022		$	679	$	26	$	91	$	163,769	$	78,641	$	(4,289)	$	16,196	$	255,113	$	128,881
Balance at September 30, 2023																				Balance at September 30, 2023	$	685	$	25	$	90	$	187,764	$	112,266	$	(3,246)	$	25,740	$	323,324	$	219,726


Three months ended September 30, 2021		Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests
Three months ended September 30, 2022																				Three months ended September 30, 2022	Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests

Balance at July 1, 2021		$	648	$	36	$	106	$	119,855	$	100,429	$	(817)	$	20,207	$	240,464	$	90,458
Balance at July 1, 2022																				Balance at July 1, 2022	$	674	$	31	$	91	$	153,134	$	75,443	$	(2,971)	$	16,892	$	243,294	$	127,078
Net income	Net income	—		—		—		—		86,413		—		24,795		111,208		2,157		Net income	—		—		—		—		44,235		—		10,999		55,234		(2,754)
Other comprehensive income - foreign currency translation	Other comprehensive income - foreign currency translation	—		—		—		—		—		(489)		(106)		(595)		—		Other comprehensive income - foreign currency translation	—		—		—		—		—		(1,294)		(224)		(1,518)		—

Cumulative impact of changes in ownership of Artisan Partners Holdings LP	Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		(412)		—		(7)		419		—		—		Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		889		—		(24)		(865)		—		—
Amortization of equity-based compensation	Amortization of equity-based compensation	—		—		—		8,029		—		—		1,716		9,745		—		Amortization of equity-based compensation	—		—		—		8,660		—		—		1,499		10,159		—
Deferred tax assets, net of amounts payable under tax receivable agreements	Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		1,154		—		—		—		1,154		—		Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		1,378		—		—		—		1,378		—
Issuance of Class A common stock, net of issuance costs	Issuance of Class A common stock, net of issuance costs	—		—		—		(5)		—		—		—		(5)		—		Issuance of Class A common stock, net of issuance costs	—		—		—		(7)		—		—		—		(7)		—
Forfeitures and employee/partner terminations	Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—		Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—

Issuance of restricted stock awards																				Issuance of restricted stock awards	—		—		—		—		—		—		—		—		—
Employee net share settlement																				Employee net share settlement	—		—		—		(285)		(1)		—		(48)		(334)		—
Exchange of subsidiary equity	Exchange of subsidiary equity	4		—		(4)		—		—		—		—		—		—		Exchange of subsidiary equity	5		(5)		—		—		—		—		—		—		—

Capital contributions, net	Capital contributions, net	—		—		—		—		—		—		—		—		4,776		Capital contributions, net	—		—		—		—		—		—		—		—		4,557

Impact of deconsolidation of CIPs																				Impact of deconsolidation of CIPs	—		—		—		—		—		—		—		—		—
Distributions	Distributions	—		—		—		—		—		—		(25,629)		(25,629)		—		Distributions	—		—		—		—		—		—		(12,026)		(12,026)		—
Dividends	Dividends	—		—		—		—		(65,345)		—		(44)		(65,389)		—		Dividends	—		—		—		—		(41,036)		—		(31)		(41,067)		—
Balance at September 30, 2021		$	652	$	36	$	102	$	128,621	$	121,497	$	(1,313)	$	21,358	$	270,953	$	97,391
Balance at September 30, 2022																				Balance at September 30, 2022	$	679	$	26	$	91	$	163,769	$	78,641	$	(4,289)	$	16,196	$	255,113	$	128,881

The accompanying notes are an integral part of the consolidated financial statements.	The accompanying notes are an integral part of the consolidated financial statements.																			The accompanying notes are an integral part of the consolidated financial statements.

Table of Contents

Nine months ended September 30, 2022 Class A Common Stock Class B Common Stock Class C Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests - Artisan Partners Holdings Total Stockholders’ Equity Redeemable Noncontrolling Interests
Balance at January 1, 2022 $ 667 $ 32 $ 91 $ 141,835 $ 134,889 $ (1,310) $ 19,757 $ 295,961 $ 111,035
Net income — — — — 153,947 — 37,150 191,097 (9,007)
Other comprehensive income - foreign currency translation — — — — — (2,950) (526) (3,476) —
Cumulative impact of changes in ownership of Artisan Partners Holdings LP — — — (262) — (29) 291 — —
Amortization of equity-based compensation — — — 27,026 — — 4,587 31,613 —
Deferred tax assets, net of amounts payable under tax receivable agreements — — — 1,708 — — — 1,708 —
Issuance of Class A common stock, net of issuance costs — — — (9) — — — (9) —
Forfeitures and employee/partner terminations — — — — — — — — —
Issuance of restricted stock awards 8 — — (8) — — — — —
Employee net share settlement (2) — — (6,521) (26) — (1,205) (7,754) —
Exchange of subsidiary equity 6 (6) — — — — — — —
Capital contributions, net — — — — — — — — 36,126
Impact of deconsolidation of CIPs — — — — — — — — (9,273)
Distributions — — — — — — (43,721) (43,721) —
Dividends — — — — (210,169) — (137) (210,306) —
Balance at September 30, 2022 $ 679 $ 26 $ 91 $ 163,769 $ 78,641 $ (4,289) $ 16,196 $ 255,113 $ 128,881
Nine months ended September 30, 2021 Class A Common Stock Class B Common Stock Class C Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests - Artisan Partners Holdings Total Stockholders’ Equity Redeemable Noncontrolling Interests
Balance at January 1, 2021 $ 631 $ 45 $ 110 $ 107,738 $ 72,944 $ (991) $ 10,565 $ 191,042 $ 93,753
Net income — — — — 251,898 — 74,064 325,962 10,903
Other comprehensive income - foreign currency translation — — — — — (301) (57) (358) —
Cumulative impact of changes in ownership of Artisan Partners Holdings LP — — — (1,256) — (21) 1,277 — —
Amortization of equity-based compensation — — — 24,798 — — 5,301 30,099 —
Deferred tax assets, net of amounts payable under tax receivable agreements — — — 4,994 — — — 4,994 —
Issuance of Class A common stock, net of issuance costs 10 — — 46,651 — — — 46,661 —
Forfeitures and employee/partner terminations (1) — — 1 — — — — —
Issuance of restricted stock awards 7 — — (7) — — — — —
Employee net share settlement (2) — — (7,380) — — (1,777) (9,159) —
Exchange of subsidiary equity 7 (2) (5) — — — — — —
Purchase of equity and subsidiary equity — (7) (3) (46,918) — — — (46,928) —
Capital contributions, net — — — — — — — — 59,818
Impact of deconsolidation of CIPs — — — — — — — — (67,083)
Distributions — — — — — — (67,889) (67,889) —
Dividends — — — — (203,345) — (126) (203,471) —
Balance at September 30, 2021 $ 652 $ 36 $ 102 $ 128,621 $ 121,497 $ (1,313) $ 21,358 $ 270,953 $ 97,391
The accompanying notes are an integral part of the consolidated financial statements.


Nine months ended September 30, 2023	Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests
Balance at January 1, 2023	$	680	$	26	$	90	$	171,416	$	93,088	$	(3,079)	$	17,136	$	279,357	$	135,280
Net income	—		—		—		—		157,533		—		35,493		193,026		25,978
Other comprehensive income - foreign currency translation	—		—		—		—		—		(90)		234		144		—
Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		(696)		—		(77)		773		—		—
Amortization of equity-based compensation	—		—		—		22,489		—		—		3,523		26,012		—
Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		421		—		—		—		421		—
Issuance of Class A common stock, net of issuance costs	—		—		—		(85)		—		—		—		(85)		—
Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—
Issuance of restricted stock awards	6		—		—		(6)		—		—		—		—		—
Employee net share settlement	(2)		—		—		(5,775)		—		—		(981)		(6,758)		—
Exchange of subsidiary equity	1		(1)		—		—		—		—		—		—		—
Capital contributions, net	—		—		—		—		—		—		—		—		76,997
Impact of deconsolidation of CIPs	—		—		—		—		—		—		—		—		(18,529)
Distributions	—		—		—		—		—		—		(30,341)		(30,341)		—
Dividends	—		—		—		—		(138,355)		—		(97)		(138,452)		—
Balance at September 30, 2023	$	685	$	25	$	90	$	187,764	$	112,266	$	(3,246)	$	25,740	$	323,324	$	219,726


Nine months ended September 30, 2022	Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests
Balance at January 1, 2022	$	667	$	32	$	91	$	141,835	$	134,889	$	(1,310)	$	19,757	$	295,961	$	111,035
Net income	—		—		—		—		153,947		—		37,150		191,097		(9,007)
Other comprehensive income - foreign currency translation	—		—		—		—		—		(2,950)		(526)		(3,476)		—
Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		(262)		—		(29)		291		—		—
Amortization of equity-based compensation	—		—		—		27,026		—		—		4,587		31,613		—
Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		1,708		—		—		—		1,708		—
Issuance of Class A common stock, net of issuance costs	—		—		—		(9)		—		—		—		(9)		—
Forfeitures and employee/partner terminations	—		—		—		—		—		—		—		—		—
Issuance of restricted stock awards	8		—		—		(8)		—		—		—		—		—
Employee net share settlement	(2)		—		—		(6,521)		(26)		—		(1,205)		(7,754)		—
Exchange of subsidiary equity	6		(6)		—		—		—		—		—		—		—
Capital contributions, net	—		—		—		—		—		—		—		—		36,126
Impact of deconsolidation of CIPs	—		—		—		—		—		—		—		—		(9,273)
Distributions	—		—		—		—		—		—		(43,721)		(43,721)		—
Dividends	—		—		—		—		(210,169)		—		(137)		(210,306)		—
Balance at September 30, 2022	$	679	$	26	$	91	$	163,769	$	78,641	$	(4,289)	$	16,196	$	255,113	$	128,881
The accompanying notes are an integral part of the consolidated financial statements.

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ARTISAN PARTNERS ASSET MANAGEMENT INC.

Unaudited Consolidated Statements of Cash Flows

(U.S. dollars in thousands)


		For the Nine Months Ended September 30,					For the Nine Months Ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income before noncontrolling interests	Net income before noncontrolling interests	$	182,090	$	336,865	Net income before noncontrolling interests	$	219,004	$	182,090
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	5,618		5,081		Depreciation and amortization	6,896		5,618
Deferred income taxes	Deferred income taxes	21,697		28,411		Deferred income taxes	32,286		21,697

Noncash lease expense		1,271		(1,272)
Noncash lease expense (benefit)						Noncash lease expense (benefit)	(158)		1,271
Net investment (gain) loss on nonconsolidated investment securities	Net investment (gain) loss on nonconsolidated investment securities	23,777		(2,230)		Net investment (gain) loss on nonconsolidated investment securities	(7,551)		23,777
Net (gain) loss on the tax receivable agreements	Net (gain) loss on the tax receivable agreements	(913)		(358)		Net (gain) loss on the tax receivable agreements	(505)		(913)
(Gain) loss on disposal of property and equipment	(Gain) loss on disposal of property and equipment	38		1		(Gain) loss on disposal of property and equipment	2		38
Amortization of debt issuance costs	Amortization of debt issuance costs	329		304		Amortization of debt issuance costs	333		329
Share-based compensation	Share-based compensation	31,613		30,099		Share-based compensation	26,012		31,613
Net investment (gain) loss of consolidated investment products	Net investment (gain) loss of consolidated investment products	14,605		(18,068)		Net investment (gain) loss of consolidated investment products	(38,189)		14,605
Purchase of investments by consolidated investment products	Purchase of investments by consolidated investment products	(319,093)		(190,614)		Purchase of investments by consolidated investment products	(325,922)		(319,093)
Proceeds from sale of investments by consolidated investment products	Proceeds from sale of investments by consolidated investment products	151,198		127,863		Proceeds from sale of investments by consolidated investment products	224,288		151,198

Change in assets and liabilities resulting in an increase (decrease) in cash:	Change in assets and liabilities resulting in an increase (decrease) in cash:					Change in assets and liabilities resulting in an increase (decrease) in cash:
Accounts receivable	Accounts receivable	12,416		(22,260)		Accounts receivable	2,232		12,416
Prepaid expenses and other assets	Prepaid expenses and other assets	2,527		(4,214)		Prepaid expenses and other assets	431		2,527
Accounts payable and accrued expenses	Accounts payable and accrued expenses	94,611		113,355		Accounts payable and accrued expenses	100,060		94,611
Net change in operating assets and liabilities of consolidated investment products		84,838		1,205
Net change in operating assets and liabilities of consolidated investment products including net investment income						Net change in operating assets and liabilities of consolidated investment products including net investment income	23,583		84,838
Net cash provided by operating activities	Net cash provided by operating activities	306,622		404,168		Net cash provided by operating activities	262,802		306,622
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Acquisition of property and equipment	Acquisition of property and equipment	(5,284)		(1,791)		Acquisition of property and equipment	(585)		(5,284)
Leasehold improvements	Leasehold improvements	(11,007)		(3,338)		Leasehold improvements	(5,690)		(11,007)

Proceeds from sale of investment securities	Proceeds from sale of investment securities	5,164		12,813		Proceeds from sale of investment securities	5,226		5,164
Purchase of investment securities	Purchase of investment securities	(49,337)		(33,820)		Purchase of investment securities	(35,483)		(49,337)

Net cash used in investing activities	Net cash used in investing activities	(60,464)		(26,136)		Net cash used in investing activities	(36,532)		(60,464)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Partnership distributions	Partnership distributions	(43,721)		(67,889)		Partnership distributions	(30,341)		(43,721)
Dividends paid	Dividends paid	(210,306)		(203,471)		Dividends paid	(138,451)		(210,306)

Payment of debt issuance costs	Payment of debt issuance costs	(543)		—		Payment of debt issuance costs	—		(543)
Proceeds from issuance of notes payable	Proceeds from issuance of notes payable	90,000		—		Proceeds from issuance of notes payable	—		90,000
Principal payments on notes payable	Principal payments on notes payable	(90,000)		—		Principal payments on notes payable	—		(90,000)
Payment under the tax receivable agreements		(33,109)		(31,250)
Net proceeds from issuance of common stock		—		46,928
Payment of costs directly associated with the issuance of Class A common stock		—		(244)
Purchase of equity and subsidiary equity		—		(46,928)
Payments under the tax receivable agreements						Payments under the tax receivable agreements	(35,757)		(33,109)

Taxes paid related to employee net share settlement	Taxes paid related to employee net share settlement	(7,754)		(9,159)		Taxes paid related to employee net share settlement	(6,758)		(7,754)

Capital contributions to consolidated investment products, net	Capital contributions to consolidated investment products, net	36,126		59,818		Capital contributions to consolidated investment products, net	76,997		36,126
Net cash used in financing activities	Net cash used in financing activities	(259,307)		(252,195)		Net cash used in financing activities	(134,310)		(259,307)
Net increase (decrease) in cash, cash equivalents, and restricted cash	Net increase (decrease) in cash, cash equivalents, and restricted cash	(13,149)		125,837		Net increase (decrease) in cash, cash equivalents, and restricted cash	91,960		(13,149)
Net cash impact of deconsolidation of CIPs	Net cash impact of deconsolidation of CIPs	—		(34,823)		Net cash impact of deconsolidation of CIPs	(4,679)		—
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash					Cash, cash equivalents and restricted cash
Beginning of period	Beginning of period	200,771		199,450		Beginning of period	143,248		200,771
End of period	End of period	$	187,622	$	290,464	End of period	$	230,529	$	187,622

Cash, cash equivalents and restricted cash as of the end of the period	Cash, cash equivalents and restricted cash as of the end of the period					Cash, cash equivalents and restricted cash as of the end of the period
Cash and cash equivalents	Cash and cash equivalents	$	168,123	$	273,253	Cash and cash equivalents	$	198,308	$	168,123
Restricted cash	Restricted cash	629		629		Restricted cash	—		629
Cash and cash equivalents of consolidated investment products	Cash and cash equivalents of consolidated investment products	18,870		16,582		Cash and cash equivalents of consolidated investment products	32,221		18,870
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	187,622	$	290,464	Cash, cash equivalents and restricted cash	$	230,529	$	187,622

Supplementary information	Supplementary information					Supplementary information
Noncash activity:	Noncash activity:					Noncash activity:
Establishment of deferred tax assets	Establishment of deferred tax assets	$	8,327	$	28,548	Establishment of deferred tax assets	$	3,214	$	8,327
Establishment of amounts payable under tax receivable agreements	Establishment of amounts payable under tax receivable agreements	5,929		23,206		Establishment of amounts payable under tax receivable agreements	828		5,929
Increase in investment securities due to deconsolidation of CIPs	Increase in investment securities due to deconsolidation of CIPs	9,970		20,900		Increase in investment securities due to deconsolidation of CIPs	19,612		9,970
Operating lease assets obtained in exchange for operating lease liabilities	Operating lease assets obtained in exchange for operating lease liabilities	32,070		2,434		Operating lease assets obtained in exchange for operating lease liabilities	78		32,070
Settlement of franchise capital liability via transfer of investment securities						Settlement of franchise capital liability via transfer of investment securities	3,204		—

The accompanying notes are an integral part of the consolidated financial statements.

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ARTISAN PARTNERS ASSET MANAGEMENT INC.

Notes to Unaudited Consolidated Financial Statements

(U.S. currencies in thousands, except share and per share amounts and as otherwise indicated)

Note 1. Nature of Business and Organization

Nature of Business

Artisan Partners Asset Management Inc. (“APAM”), through its subsidiaries, is an investment management firm focused on providing high-value added, active investment strategies to sophisticated clients globally. APAM and its subsidiaries are hereafter referred to collectively as “Artisan” or the ~~“Company".~~“Company.”

Artisan’s autonomous investment teams manage a broad range of U.S., non-U.S. and global investment strategies that are diversified by asset class, market cap and investment style. Strategies are offered through multiple investment vehicles to accommodate a broad range of client mandates. Artisan offers its investment management services primarily to institutions and through intermediaries that operate with institutional-like decision-making processes and have long-term investment horizons.

Organization

On March 12, 2013, APAM completed its initial public offering (the “IPO”). APAM was formed for the purpose of becoming the general partner of Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”) in connection with the IPO. Holdings is a holding company for the investment management business conducted under the name “Artisan ~~Partners”.~~Partners.” The reorganization (“IPO Reorganization”) established the necessary corporate structure to complete the IPO while at the same time preserving the ability of the firm to conduct operations through Holdings and its subsidiaries.

As its sole general partner, APAM controls the business and affairs of Holdings. As a result, APAM consolidates Holdings’ financial statements and records a noncontrolling interest for the equity interests in Holdings held by the limited partners of Holdings. At September 30, ~~2022,~~2023, APAM held approximately ~~85%~~86% of the equity ownership interest in Holdings.

Holdings, together with its wholly owned subsidiary, Artisan Investments GP LLC, controls a 100% interest in Artisan Partners Limited Partnership (“APLP”), a multi-product investment management firm that is the principal operating subsidiary of Artisan Partners Holdings. APLP is registered as an investment adviser with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. APLP provides investment advisory services to traditional separate accounts and pooled investment vehicles, including Artisan Partners Funds, Inc. (“Artisan Funds”), Artisan Partners Global Funds plc (“Artisan Global Funds”), and Artisan sponsored private funds (“Artisan Private Funds”). Artisan Funds are a series of open-end mutual funds registered under the Investment Company Act of 1940, as amended. Artisan Global Funds is a family of Ireland-domiciled UCITS funds. Artisan Private Funds consist of a number of Artisan-sponsored unregistered pooled investment vehicles.

Note 2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying financial statements are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of such consolidated financial statements have been included. Such interim results are not necessarily indicative of full year results.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes.

The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. As a result, the interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in APAM’s latest annual report on Form 10-K.

The accompanying financial statements were prepared in accordance with U.S. GAAP and related rules and regulations of the SEC. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates or assumptions.

Table of Contents

Principles of consolidation

Artisan’s policy is to consolidate all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance requires an analysis to determine if an entity should be evaluated for consolidation using the voting interest entity (“VOE”) model or the variable interest entity (“VIE”) model. Under the VOE model, controlling financial interest is generally defined as a majority ownership of voting interests. Under the VIE model, controlling financial interest is defined as (i) the power to direct activities that most significantly impact the economic performance of the entity and (ii) the right to receive potentially significant benefits or the obligation to absorb potentially significant losses.

Artisan generally consolidates VIEs in which it meets the power criteria and holds an equity ownership interest of greater than 10%. The consolidated financial statements include the accounts of APAM and all subsidiaries or other entities in which APAM has a direct or indirect controlling financial interest. All material intercompany balances have been eliminated in consolidation.

Artisan serves as the investment adviser to Artisan Funds, Artisan Global Funds and Artisan Private Funds. Artisan Funds and Artisan Global Funds are corporate entities, the business and affairs of which are managed by their respective boards of directors. The shareholders of the funds retain voting rights, including rights to elect and reelect members of their respective boards of directors. Each series of Artisan Funds is a VOE and is separately evaluated for consolidation under the VOE model. The shareholders of Artisan Global Funds lack simple majority liquidation rights, and as a result, each sub-fund of Artisan Global Funds is evaluated for consolidation under the VIE model. Artisan Private Funds are also evaluated for consolidation under the VIE model because third-party equity holders of the funds generally lack the ability to divest Artisan of its control of the funds.

From time to time, the Company makes investments in Artisan Funds, Artisan Global Funds, and Artisan Private Funds. If the investment results in a controlling financial interest, APAM consolidates the fund, and the underlying activity of the entire fund is included in Artisan’s unaudited consolidated financial statements. As of September 30, ~~2022,~~2023, Artisan had a controlling financial interest in ~~two~~one series of Artisan Funds, five sub-funds of Artisan Global Funds, and two Artisan Private Funds and, as a result, these funds are included in Artisan’s unaudited consolidated financial statements. Because these consolidated investment products meet the definition of investment companies under U.S. GAAP, Artisan has retained the specialized industry accounting principles for investment companies in the consolidated financial statements. See Note 6, “Variable Interest Entities and Consolidated Investment Products” for additional details.

Reclassification

In conjunction with annual reporting on Form 10-K for the year ended December 31, 2022, the Company changed the presentation of its Consolidated Statements of Operations to recategorize expenditures for computers and mobile devices from “General and administrative” to “Communication and technology.” Amounts for the comparative period in fiscal 2022 presented herein have been reclassified to conform to the current presentation. The reclassification had no impact on previously reported operating income, net income, or financial position. Management believes the revised presentation is more useful to readers of its financial statements.

Recent accounting pronouncements

None.

Note 3. Investment Securities

The disclosures below include details of Artisan’s investments, excluding money market funds and consolidated investment products. Investments held by consolidated investment products are described in Note 6, “Variable Interest Entities and Consolidated Investment ~~Products”.~~Products.”


		As of September 30, 2022		As of December 31, 2021			As of September 30, 2023		As of December 31, 2022
Investments in equity securities	Investments in equity securities	$	69,540	$	37,179	Investments in equity securities	$	128,822	$	76,156
Investments in equity securities accounted for under the equity method	Investments in equity securities accounted for under the equity method	8,700		10,699		Investments in equity securities accounted for under the equity method	10,808		9,259
Total investment securities	Total investment securities	$	78,240	$	47,878	Total investment securities	$	139,630	$	85,415

Artisan’s investments in equity securities consist of investments in Artisan Funds, Artisan Global Funds and Artisan Private Funds. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, Artisan held investment securities of ~~$57.3~~$96.6 million and ~~$36.5~~$63.3 million, respectively, related to funded long-term incentive compensation ~~plans.~~ plans (excluding investments in consolidated investment products).

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Unrealized gain (loss) related to investment securities held at the end of the periods indicated below were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Unrealized gain (loss) on investment securities held at the end of the period $ (6,675) $ (2,098) $ (24,145) $ 1,516


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Unrealized gain (loss) on investment securities held at the end of the period	$	(3,901)	$	(6,675)	$	6,458	$	(24,145)

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Other net investment gain (loss) is presented within the non-operating income (expense) section of the Consolidated Statements of Operations. The components of other net investment gain (loss) are as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Net investment gain (loss) on nonconsolidated seed investments $ (1,649) $ (1,741) $ (4,585) $ 113
Net investment gain (loss) on franchise capital investments (3,987) (357) (19,192) 2,117
Other 73 (11) 48 (208)
Other net investment gain (loss) $ (5,563) $ (2,109) $ (23,729) $ 2,022


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Net investment gain (loss) on nonconsolidated seed investments	$	214	$	(1,649)	$	1,424	$	(4,585)
Net investment gain (loss) on franchise capital investments	(4,454)		(3,987)		6,127		(19,192)
Interest income on cash and cash equivalents and other	2,088		73		3,778		48
Other net investment gain (loss)	$	(2,152)	$	(5,563)	$	11,329	$	(23,729)

Note 4. Fair Value Measurements

The table below presents information about Artisan’s assets and liabilities that are measured at fair value and the valuation techniques Artisan utilized to determine such fair value. The financial instruments held by consolidated investment products are excluded from the table below and are presented in Note 6, “Variable Interest Entities and Consolidated Investment ~~Products”.~~Products.”

In accordance with ASC 820, fair value is defined as the price that Artisan would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. The following three-tier fair value hierarchy prioritizes the inputs used in measuring fair value:

•Level 1 – Observable inputs such as quoted (unadjusted) market prices in active markets for identical securities.

•Level 2 – Other significant observable inputs (including but not limited to quoted prices for similar instruments, interest rates, prepayment speeds, credit risk, etc.).

•Level 3 – Significant unobservable inputs (including Artisan’s own assumptions in determining fair value).

The following provides the hierarchy of inputs used to derive fair value of Artisan’s assets and liabilities that are financial instruments as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		Assets and Liabilities at Fair Value											Assets and Liabilities at Fair Value
		Total		NAV Practical Expedient (No Fair Value Level)		Level 1		Level 2		Level 3			Total		NAV Practical Expedient (No Fair Value Level)		Level 1		Level 2		Level 3
September 30, 2022
September 30, 2023												September 30, 2023
Assets	Assets											Assets
Money market funds		$	19,556	$	—	$	19,556	$	—	$	—
Money market funds 1												Money market funds 1	$	167,310	$	—	$	167,310	$	—	$	—
Equity securities	Equity securities	78,240		8,296		69,944		—		—		Equity securities	139,630		10,306		129,324		—		—

December 31, 2021
December 31, 2022												December 31, 2022
Assets	Assets											Assets
Money market funds		$	37,861	$	—	$	37,861	$	—	$	—
Money market funds 1												Money market funds 1	$	3,297	$	—	$	3,297	$	—	$	—
Equity securities	Equity securities	47,878		9,975		37,903		—		—		Equity securities	85,415		8,835		76,580		—		—
1 Money market funds are included within the cash and cash equivalents line of the Unaudited Condensed Consolidated Statements of Financial Condition.												1 Money market funds are included within the cash and cash equivalents line of the Unaudited Condensed Consolidated Statements of Financial Condition.

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Fair values determined based on Level 1 inputs utilize quoted market prices for identical assets. Level 1 assets generally consist of money market funds, open-end mutual funds and UCITS funds. Equity securities without a fair value level consist of the Company’s investments in Artisan Private Funds, which are measured at the underlying fund’s net asset value (“NAV”), using the ASC 820 practical expedient. The NAV is provided by the fund and is derived from the fair values of the underlying investments as of the reporting date. Cash maintained in demand deposit accounts is excluded from the table above.

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Note 5. Borrowings

Artisan’s borrowings consist of the following as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		Maturity	As of September 30, 2022		As of December 31, 2021		Interest Rate Per Annum			Maturity(1)	As of September 30, 2023		As of December 31, 2022		Interest Rate Per Annum
Revolving credit agreement	Revolving credit agreement	August 2027	$	—	$	—	NA		Revolving credit agreement	August 2027	$	—	$	—	NA
Senior notes	Senior notes								Senior notes
Series C		August 2022	—		90,000		5.82	%
Series D	Series D	August 2025	60,000		60,000		4.29	%	Series D	August 2025	60,000		60,000		4.29	%
Series E	Series E	August 2027	50,000		50,000		4.53	%	Series E	August 2027	50,000		50,000		4.53	%
Series F	Series F	August 2032	90,000		—		3.10	%	Series F	August 2032	90,000		90,000		3.10	%
Total gross borrowings	Total gross borrowings		$	200,000	$	200,000			Total gross borrowings		$	200,000	$	200,000
Debt issuance costs	Debt issuance costs		$	(993)	$	(556)			Debt issuance costs		$	(774)	$	(950)
Total borrowings	Total borrowings		$	199,007	$	199,444			Total borrowings		$	199,226	$	199,050
(1) The Company is not required to make principal payments on any of the outstanding obligations prior to contractual maturity.									(1) The Company is not required to make principal payments on any of the outstanding obligations prior to contractual maturity.

The fair value of borrowings was approximately ~~$176.9~~$176.4 million as of September 30, ~~2022.~~2023. Fair value was determined based on future cash flows, discounted to present value using current market interest rates. The inputs are categorized as Level 2 in the fair value hierarchy, as defined in Note 4, “Fair Value ~~Measurements”.~~

On August 16, 2022, Artisan Partners Holdings issued $90.0 million of 3.10% Series F notes pursuant to an agreement executed in December 2021 and used the proceeds to repay the $90.0 million of 5.82% Series C notes that matured on August 16, 2022. In addition, Holdings amended and extended its $100.0 million revolving credit facility for an additional five-year period. The Company incurred debt issuance costs related to the notes and revolving credit facility of $0.6 million and $1.1 million, respectively, which are amortized as interest expense over the life of the instrument.Measurements.”

The fixed interest rate on each series of unsecured notes is subject to a one percentage point increase in the event Holdings receives a below-investment grade rating and any such increase will continue to apply until an investment grade rating is received.

As of September 30, 2023, there were no borrowings outstanding under the $100.0 million revolving credit facility and the interest rate on the unused commitment was 0.15%.

Interest expense incurred on the unsecured notes and revolving credit agreement was ~~$2.3~~$1.9 million and ~~$2.6~~$2.3 million for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$7.4~~$5.8 million and ~~$7.7~~$7.4 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

~~As of September 30, 2022, the aggregate maturities of debt obligations, based on their contractual terms, are as follows:~~
2022 $ —
2023 —
2024 —
2025 60,000
2026 —
Thereafter 140,000
Total $ 200,000

Note 6. Variable Interest Entities and Consolidated Investment Products

Artisan serves as the investment adviser for various types of investment products, consisting of both VIEs and VOEs. Artisan consolidates an investment product if it has a controlling financial interest in the entity. See Note 2, ”Summary of Significant Accounting ~~Policies”.~~Policies.” Any such entities are collectively referred to herein as consolidated investment products or CIPs.

As of September 30, ~~2022,~~2023, Artisan is considered to have a controlling financial interest in ~~two~~one series of Artisan Funds, five sub-funds of Artisan Global Funds and two Artisan Private Funds, with an aggregate direct equity investment in the consolidated investment products of ~~$101.2~~$109.2 million.

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Artisan’s maximum exposure to loss in connection with the assets and liabilities of CIPs is limited to its direct equity investment, while the potential benefit is limited to the management and performance fees received and the return on its equity investment. With the exception of Artisan’s direct equity investment, the assets of CIPs are not available to Artisan’s creditors, nor are they available to Artisan for general corporate purposes. In addition, third-party investors in the CIPs have no recourse to the general credit of the Company.

Management and performance fees earned from CIPs are eliminated from revenue upon consolidation. See Note ~~15,~~14, “Related Party Transactions” for additional information on management and performance fees earned from CIPs.

Third-party investors’ ownership interest in CIPs is presented as redeemable noncontrolling interests in the unaudited condensed consolidated statements of financial condition as third-party investors have the right to withdraw their capital, subject to certain conditions. Net income attributable to third-party investors is reported as net income (loss) attributable to noncontrolling interests - consolidated investment products in the unaudited consolidated statements of operations.

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During the nine months ended September 30, ~~2022,~~2023, the Company determined that it no longer had a controlling financial interest in one series ~~fund~~ of Artisan Funds as a result of third party capital contributions. Upon loss of control, the fund was deconsolidated and the related assets, liabilities, and equity of the fund were derecognized from the Company’s unaudited condensed consolidated statements of financial condition. There was no net impact to the unaudited consolidated ~~statements~~statement of operations for the nine months ended September 30, ~~2022.~~2023. Artisan generally does not recognize a gain or loss upon deconsolidation of investment products as the assets and liabilities of CIPs are carried at fair value. Artisan’s ~~$9.6~~$19.6 million direct equity investment was reclassified from investment assets of consolidated investment products to investment securities.

As of September 30, ~~2022,~~2023, Artisan held direct equity investments of ~~$8.7~~$10.8 million in VIEs for which the Company does not hold a controlling financial interest. These direct equity investments consisted of seed investments in sub-funds of Artisan Global Funds and Artisan Private Funds, both of which are accounted for under the equity method of accounting because Artisan has significant influence over the funds.

Fair Value Measurements - Consolidated Investment Products

Investments held by CIPs are reflected at fair value. Short and long positions on equity securities are valued based upon closing prices of the security on the exchange or market designated by the accounting agent or pricing vendor as the principal exchange. The closing price may represent last sale price, official closing price, a closing auction or other information depending on market convention. Short and long positions on fixed income instruments are valued at market value. Market values are generally evaluations based on ~~the judgment of~~prices provided by independent pricing vendors, which may consider, among other factors, the prices at which securities actually trade, broker-dealer quotations, pricing formulas, estimates of market values obtained from yield data relating to investments or securities with similar characteristics and/or discounted cash flow models that might be applicable. Short term investments are comprised of repurchase agreements and U.S. Treasury obligations. Repurchase agreements are valued at cost plus accrued interest and U.S. treasury obligations are valued using the same principles as fixed income securities. Derivative assets and liabilities are generally comprised of put and call options on securities and indices and forward foreign currency contracts. Put and call options are valued at the mid price (average of bid price and ask price) as provided by the pricing vendor at the close of trading on the contract’s principal exchange. Open forward foreign currency contracts are valued using the market spot rate.

The following tables present the fair value hierarchy levels of assets and liabilities held by CIPs measured at fair value as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		Assets and Liabilities at Fair Value									Assets and Liabilities at Fair Value
		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
September 30, 2022
September 30, 2023										September 30, 2023
Assets	Assets									Assets
Money market funds	Money market funds	$	18,077	$	18,077	$	—	$	—	Money market funds	$	26,682	$	26,682	$	—	$	—
Equity securities - long position	Equity securities - long position	40,885		38,625		2,260		—		Equity securities - long position	35,007		32,632		2,074		301
Fixed income instruments - long position	Fixed income instruments - long position	222,889		—		218,417		4,472		Fixed income instruments - long position	293,274		—		288,729		4,545
Derivative assets	Derivative assets	528		210		318		—		Derivative assets	843		—		843		—
Short term investments										Short term investments	7,305		—		7,305		—

Liabilities	Liabilities									Liabilities
Equity securities - short position		$	2,322	$	2,322	$	—	$	—

Fixed income instruments - short position	Fixed income instruments - short position	17,173		—		17,173		—		Fixed income instruments - short position	$	10,410	$	364	$	10,046	$	—
Derivative liabilities	Derivative liabilities	1,556		1,433		123		—		Derivative liabilities	2,904		—		2,904		—

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Assets and Liabilities at Fair Value
Total Level 1 Level 2 Level 3
December 31, 2021
Assets
Money market funds $ 7,908 $ 7,908 $ — $ —
Equity securities - long position 33,583 31,838 1,745 —
Fixed income instruments - long position 161,177 — 156,240 4,937
Derivative assets 241 — 241 —
Liabilities
Equity securities - short position $ 3,427 $ 3,427 $ — $ —
Fixed income instruments - short position 15,570 — 15,570 —
Derivative liabilities 182 4 178 —


	Assets and Liabilities at Fair Value
	Total		Level 1		Level 2		Level 3
December 31, 2022
Assets
Money market funds	$	25,140	$	25,140	$	—	$	—
Equity securities - long position	32,388		30,179		2,209		—
Fixed income instruments - long position	216,638		—		212,368		4,270
Derivative assets	951		74		877		—
Short term investments	5,766		—		5,766		—

Liabilities
Equity securities - short position	$	256	$	256	$	—	$	—
Fixed income instruments - short position	17,273		—		17,273		—
Derivative liabilities	3,222		2,462		760		—

CIP balances included in the Company’s unaudited condensed consolidated statements of financial condition were as follows:


		As of September 30, 2022		As of December 31, 2021			As of September 30, 2023		As of December 31, 2022
Net CIP assets included in the table above	Net CIP assets included in the table above	$	261,328	$	183,730	Net CIP assets included in the table above	$	349,797	$	260,132
Net CIP assets/(liabilities) not included in the table above	Net CIP assets/(liabilities) not included in the table above	(31,204)		(10,769)		Net CIP assets/(liabilities) not included in the table above	(20,847)		(18,105)
Total Net CIP assets	Total Net CIP assets	230,124		172,961		Total Net CIP assets	328,950		242,027
Less: redeemable noncontrolling interests	Less: redeemable noncontrolling interests	128,881		111,035		Less: redeemable noncontrolling interests	219,726		135,280
Artisan’s direct equity investment in CIPs	Artisan’s direct equity investment in CIPs	$	101,243	$	61,926	Artisan’s direct equity investment in CIPs	$	109,224	$	106,747

Note 7. Noncontrolling Interests - Holdings

Net income attributable to noncontrolling interests - Artisan Partners Holdings in the unaudited consolidated statements of operations represents the portion of earnings or loss attributable to the equity ownership interests in Holdings held by the limited partners of Holdings. As of September 30, ~~2022,~~2023, APAM held approximately ~~85%~~86% of the equity ownership interests in Holdings.

Limited partners of Artisan Partners Holdings are entitled to exchange partnership units (along with a corresponding number of shares of Class B or C common stock of APAM) for shares of Class A common stock from time to time (the “Holdings Common Unit Exchanges”). The Holdings Common Unit Exchanges increase APAM’s equity ownership interest in Holdings and result in an increase to deferred tax assets and amounts payable under the tax receivable agreements. See Note 11, “Income Taxes and Related ~~Payments”.~~Payments.”

In order to maintain the one-to-one correspondence of the number of Holdings partnership units and APAM common shares, Holdings will issue one general partner (“GP”) unit to APAM for each share of Class A common stock issued by APAM. For the nine months ended September 30, ~~2022,~~2023, APAM’s equity ownership interest in Holdings increased as a result of the following transactions:


		Holdings GP Units	Limited Partnership Units	Total	APAM Ownership %			Holdings GP Units	Limited Partnership Units	Total	APAM Ownership %
Balance at December 31, 2021		66,699,872	12,335,197	79,035,069	84	%
Balance at December 31, 2022							Balance at December 31, 2022	67,982,025	11,624,031	79,606,056	85	%

Holdings Common Unit Exchanges(1)	Holdings Common Unit Exchanges(1)	634,692	(634,692)	—	1	%	Holdings Common Unit Exchanges(1)	142,550	(142,550)	—	—	%
Issuance of APAM Restricted Shares ~~(1)~~	Issuance of APAM Restricted Shares ~~(1)~~	787,372	—	787,372	—	%	Issuance of APAM Restricted Shares ~~(1)~~	515,702	—	515,702	1	%
Delivery of Shares Underlying RSUs (1)		1,060	—	1,060	—	%
Delivery of Shares Underlying RSUs and PSUs (1)							Delivery of Shares Underlying RSUs and PSUs (1)	46,146	—	46,146	—	%
Restricted Share Award Net Share Settlement (1)	Restricted Share Award Net Share Settlement (1)	(195,319)	—	(195,319)	—	%	Restricted Share Award Net Share Settlement (1)	(187,287)	—	(187,287)	—	%
Forfeitures from Employee Terminations (1)	Forfeitures from Employee Terminations (1)	(15,749)	—	(15,749)	—	%	Forfeitures from Employee Terminations (1)	(17,916)	—	(17,916)	—	%
Balance at September 30, 2022		67,911,928	11,700,505	79,612,433	85	%
Balance at September 30, 2023							Balance at September 30, 2023	68,481,220	11,481,481	79,962,701	86	%
(1) The impact of the transaction on APAM’s ownership percentage was less than 1%.	(1) The impact of the transaction on APAM’s ownership percentage was less than 1%.						(1) The impact of the transaction on APAM’s ownership percentage was less than 1%.

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Changes in ownership of Holdings are accounted for as equity transactions because APAM continues to have a controlling interest in Holdings. Additional paid-in capital and noncontrolling interests - Artisan Partners Holdings in the unaudited condensed consolidated statements of financial condition are adjusted to reallocate Holdings’ historical equity to reflect the change in APAM’s ownership of Holdings.

The reallocation of equity had the following impact on the unaudited condensed consolidated statements of financial condition:


Statements of Financial Condition	Statements of Financial Condition	For the Nine Months Ended September 30,				Statements of Financial Condition	For the Nine Months Ended September 30,
		2022		2021			2023		2022
Additional paid-in capital	Additional paid-in capital	$	(262)	$	(1,256)	Additional paid-in capital	$	(696)	$	(262)
Noncontrolling interests - Artisan Partners Holdings	Noncontrolling interests - Artisan Partners Holdings	291		1,277		Noncontrolling interests - Artisan Partners Holdings	773		291
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(29)		(21)		Accumulated other comprehensive income (loss)	(77)		(29)
Net impact to financial condition	Net impact to financial condition	$	—	$	—	Net impact to financial condition	$	—	$	—

In addition to the reallocation of historical equity, the change in ownership resulted in an increase to deferred tax assets and additional paid-in capital of ~~$0.5~~$0.2 million and ~~$0.8~~$0.5 million for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Note 8. Stockholders’ Equity

APAM - Stockholders’ Equity

APAM had the following authorized and outstanding equity as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively:

Outstanding

Authorized

As of September 30, 2022

As of December 31, 2021

Voting Rights (1)

Economic Rights

Authorized

As of September 30, 2023

As of December 31, 2022

Voting Rights (1)

Economic Rights

Common shares

Class A, par value $0.01 per share

500,000,000

67,911,928

66,699,872

1 vote per share

Proportionate

Class A, par value $0.01 per share

500,000,000

68,481,220

67,982,025

1 vote per share

Proportionate

Class B, par value $0.01 per share

200,000,000

2,589,388

3,206,580

1 vote per share

None

Class B, par value $0.01 per share

200,000,000

2,456,534

2,583,884

1 vote per share

None

Class C, par value $0.01 per share

400,000,000

9,111,117

9,128,617

1 vote per share

None

Class C, par value $0.01 per share

400,000,000

9,024,947

9,040,147

1 vote per share

None

(1) The Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of September 30, 2022, Artisan’s employees held 5,302,997 restricted shares of Class A common stock and all 2,589,388 outstanding shares of Class B common stock, all of which were subject to the agreement.

(1) The Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of September 30, 2023, Artisan’s employees held 5,242,987 restricted shares of Class A common stock and all 2,456,534 outstanding shares of Class B common stock, all of which were subject to the agreement.

APAM is dependent on cash generated by Holdings to fund any dividends. Generally, Holdings will make distributions to all of its partners, including APAM, based on the proportionate share of ownership each has in Holdings. APAM will fund dividends to its stockholders from its proportionate share of those distributions after provision for its taxes and other obligations. APAM declared and paid the following dividends per share during the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


Type of Dividend	Type of Dividend	Class of Stock	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Type of Dividend	Class of Stock	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
			2022		2021		2022		2021				2023		2022		2023		2022
Quarterly	Quarterly	Class A Common	$	0.60	$	1.00	$	2.39	$	2.85	Quarterly	Class A Common	$	0.61	$	0.60	$	1.66	$	2.39
Special Annual	Special Annual	Class A Common	$	—	$	—	$	0.72	$	0.31	Special Annual	Class A Common	$	—	$	—	$	0.35	$	0.72

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The following table summarizes APAM’s stock transactions for the nine months ended September 30, ~~2022:~~2023:


		Total Stock Outstanding	Class A Common Stock(1)	Class B Common Stock	Class C Common Stock		Total Stock Outstanding	Class A Common Stock(1)	Class B Common Stock	Class C Common Stock
Balance at December 31, 2021		79,035,069	66,699,872	3,206,580	9,128,617
Balance at December 31, 2022						Balance at December 31, 2022	79,606,056	67,982,025	2,583,884	9,040,147

Holdings Common Unit Exchanges	Holdings Common Unit Exchanges	—	634,692	(617,192)	(17,500)	Holdings Common Unit Exchanges	—	142,550	(127,350)	(15,200)
Restricted Share Award Grants	Restricted Share Award Grants	787,372	787,372	—	—	Restricted Share Award Grants	515,702	515,702	—	—
Restricted Share Award Net Share Settlement	Restricted Share Award Net Share Settlement	(195,319)	(195,319)	—	—	Restricted Share Award Net Share Settlement	(187,287)	(187,287)	—	—
Delivery of Shares Underlying RSUs		1,060	1,060	—	—
Delivery of Shares Underlying RSUs and PSUs						Delivery of Shares Underlying RSUs and PSUs	46,146	46,146	—	—
Employee/Partner Terminations	Employee/Partner Terminations	(15,749)	(15,749)	—	—	Employee/Partner Terminations	(17,916)	(17,916)	—	—
Balance at September 30, 2022		79,612,433	67,911,928	2,589,388	9,111,117
Balance at September 30, 2023						Balance at September 30, 2023	79,962,701	68,481,220	2,456,534	9,024,947

(1) There were 367,392 and 327,713 restricted stock units outstanding at September 30, 2022 and December 31, 2021, respectively. In addition, there were 231,170 and 135,230 performance share units outstanding at September 30, 2022 and December 31, 2021 respectively. Based on the quarter-end status of the market and performance conditions, the 231,170 unvested performance share units would ultimately result in the issuance of 231,173 shares of Class A common stock if all other vesting conditions were met. Restricted stock units and performance share units are not reflected in the table because they are not considered outstanding or issued stock.
(1) There were 415,112 and 367,392 restricted stock units outstanding at September 30, 2023 and December 31, 2022, respectively. In addition, there were 216,170 and 231,170 performance share units outstanding at September 30, 2023 and December 31, 2022, respectively. Based on the quarter-end status of the market and performance conditions, the 216,170 unvested performance share units would ultimately result in the issuance of 264,143 shares of Class A common stock if all other vesting conditions were met. Restricted stock units and performance share units are not reflected in the table because they are not considered outstanding or issued stock.						(1) There were 415,112 and 367,392 restricted stock units outstanding at September 30, 2023 and December 31, 2022, respectively. In addition, there were 216,170 and 231,170 performance share units outstanding at September 30, 2023 and December 31, 2022, respectively. Based on the quarter-end status of the market and performance conditions, the 216,170 unvested performance share units would ultimately result in the issuance of 264,143 shares of Class A common stock if all other vesting conditions were met. Restricted stock units and performance share units are not reflected in the table because they are not considered outstanding or issued stock.

Each Class A, Class B, Class D and Class E common unit of Holdings (together with the corresponding share of Class B or Class C common stock) is exchangeable for one share of Class A common stock. The corresponding shares of Class B and Class C common stock are immediately canceled upon any such exchange.

Upon termination of employment with Artisan, an employee-partner’s Class B common units are exchanged for Class E common units and the corresponding shares of Class B common stock are canceled. APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings.

Artisan Partners Holdings - Partners’ Equity

Holdings makes distributions of its net income to the holders of its partnership units for income taxes as required under the terms of the partnership agreement and also makes additional distributions under the terms of the partnership agreement as required. The distributions are recorded in the financial statements on the declaration date, or on the payment date in lieu of a declaration date. Holdings’ partnership distributions for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Holdings Partnership Distributions to Limited Partners	Holdings Partnership Distributions to Limited Partners	$	12,026	$	25,629	$	43,721	$	67,889	Holdings Partnership Distributions to Limited Partners	$	12,883	$	12,026	$	30,341	$	43,721
Holdings Partnership Distributions to APAM	Holdings Partnership Distributions to APAM	64,441		110,555		227,165		285,007		Holdings Partnership Distributions to APAM	72,419		64,441		169,102		227,165
Total Holdings Partnership Distributions	Total Holdings Partnership Distributions	$	76,467	$	136,184	$	270,886	$	352,896	Total Holdings Partnership Distributions	$	85,302	$	76,467	$	199,443	$	270,886

The distributions are recorded as a reduction to consolidated stockholders’ equity, with the exception of distributions made to APAM, which are eliminated upon consolidation.

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Note 9. Revenue From Contracts with Customers

The following table presents a disaggregation of investment advisory revenue by type and vehicle for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Management fees
Artisan Funds	$	145,269	$	135,919	$	420,244	$	445,260
Artisan Global Funds	11,220		10,423		32,388		33,192
Separate accounts and other (1)	92,202		87,849		273,348		288,449
Performance fees
Separate accounts and other (1)	31		121		154		397

Total revenues (2)	$	248,722	$	234,312	$	726,134	$	767,298
(1) Separate accounts and other revenue consists of management fees and performance fees earned from vehicles other than Artisan Funds or Artisan Global Funds, and therefore includes revenue earned from traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds.
(2) All management fees and performance fees from consolidated investment products were eliminated upon consolidation and therefore are omitted from this table. See Note 14, “Related Party Transactions.”

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Management fees
   Artisan Funds $ 135,919 $ 186,254 $ 445,260 $ 528,924
   Artisan Global Funds 10,423 12,822 33,192 35,568
   Separate accounts and other (1)
87,849 117,100 288,449 336,519
Performance fees
   Separate accounts and other (1)
121 398 397 11,189
Total revenues (2)
$ 234,312 $ 316,574 $ 767,298 $ 912,200
(1) Separate accounts and other revenue consists of management fees and performance fees earned from vehicles other than Artisan Funds or Artisan Global Funds, and therefore includes revenue earned from traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds.
(2) All management fees and performance fees from consolidated investment products were eliminated upon consolidation and therefore are omitted from this table. See Note 15, “Related Party Transactions”.

The following table presents the balances of receivables related to contracts with customers:

Customer As of September 30, 2022 As of December 31, 2021
   Artisan Funds $ 4,087 $ 5,874
   Artisan Global Funds 4,065 5,433
   Separate accounts and other 70,867 98,568
Total receivables from contracts with customers $ 79,019 $ 109,875
Non-customer receivables 24,415 5,975
Accounts receivable $ 103,434 $ 115,850


Customer	As of September 30, 2023		As of December 31, 2022
Artisan Funds	$	6,096	$	5,597
Artisan Global Funds	4,578		4,453
Separate accounts and other	77,976		74,936
Total receivables from contracts with customers	$	88,650	$	84,986
Non-customer receivables	7,412		13,648
Accounts receivable	$	96,062	$	98,634

Artisan Funds and Artisan Global Funds are billed on the last day of each month. Artisan Funds and Artisan Global Funds make payments on the same day the invoice is received for the majority of the invoiced amount. The remainder of the invoice is generally paid in the month following receipt of the invoice. Separate accounts and other clients are generally billed on a monthly or quarterly basis, with payments due within 30 days of billing.

Artisan had no other contract assets or liabilities from contracts with customers as of September 30, ~~2022~~2023 or December 31, ~~2021.~~2022.

Non-customer receivables ~~includes~~include state tax payments made on behalf of certain limited partners, which are then netted from subsequent distributions or payments to the limited partners, ~~and seed principal~~as well as redemptions of investments related to franchise capital that have not yet been collected.

Note 10. Compensation and Benefits

Total compensation and benefits ~~consists~~consist of the following:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Salaries, incentive compensation and benefits (1)	Salaries, incentive compensation and benefits (1)	$	109,563	$	130,831	$	352,221	$	385,106	Salaries, incentive compensation and benefits (1)	$	118,271	$	109,563	$	350,147	$	352,221

Long-term cash incentive compensation expense	Long-term cash incentive compensation expense	2,453		1,806		7,065		4,941		Long-term cash incentive compensation expense	4,625		2,453		17,969		7,065
Restricted share-based award compensation expense	Restricted share-based award compensation expense	10,017		9,598		30,073		29,666		Restricted share-based award compensation expense	7,752		10,017		24,477		30,073
Long-term incentive compensation expense	Long-term incentive compensation expense	12,470		11,404		37,138		34,607		Long-term incentive compensation expense	12,377		12,470		42,446		37,138

Total compensation and benefits	Total compensation and benefits	$	122,033	$	142,235	$	389,359	$	419,713	Total compensation and benefits	$	130,648	$	122,033	$	392,593	$	389,359

(1) Excluding long-term incentive compensation expense	(1) Excluding long-term incentive compensation expense									(1) Excluding long-term incentive compensation expense

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Incentive compensation

Cash incentive compensation paid to members of Artisan’s investment teams and members of its distribution ~~teams~~team is generally based on formulas that are tied directly to revenues. The majority of this incentive compensation is earned on a quarterly basis and paid in the quarter following the quarter in which ~~the incentive~~it was earned with the exception of fourth quarter ~~incentives~~incentive compensation which is earned ~~which are also~~and paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is ~~discretionary and subjectively~~ determined based on individual performance and Artisan’s overall results during the applicable year and is generally paid on an annual basis.

Long-term incentive compensation awards consist of both APAM restricted share-based awards and long-term cash awards, which are referred to as franchise capital awards. These awards are described in more detail below.

Restricted share-based awards

~~Artisan has registered 14,000,000 shares of Class A common stock for issuance under the 2013 Omnibus Incentive Compensation Plan (the “Plan”). Pursuant to the Plan,~~ APAM has granted a combination of restricted stock awards, restricted stock units, and performance share units (collectively referred to as “restricted share-based awards” or ~~"awards"~~“awards”) of Class A common stock to employees.

Standard Restricted Shares. Standard restricted shares are generally subject to a pro rata five-year service vesting condition.

Career Shares. Career shares are generally subject to both (i) a pro rata five-year service vesting condition and (ii) a qualifying retirement (as defined in the award agreement) condition.

Franchise Shares. Like career shares, franchise shares are generally subject to both (i) a pro rata five-year service vesting condition and (ii) a qualifying retirement condition. In addition, franchise shares, which are only granted to investment team members, are subject to a Franchise Protection Clause, which provides that the number of shares that ultimately vest depends on whether certain conditions relating to client cash flows are met. If such conditions are not met, compensation cost related to unvested shares will be ~~reversed for any shares that do not vest.~~reversed.

Performance Share Units (PSUs). PSUs are generally subject to (i) a three-year service vesting condition, (ii) certain performance conditions related to the Company's adjusted operating margin and total shareholder return compared to a peer group during a three-year performance period, and (iii) for one-half of the PSUs eligible to vest at the end of the performance period, a qualifying retirement condition. The number of shares of Class A common stock that are ultimately issued in connection with each PSU award will depend upon the outcome of the performance, market and qualified retirement conditions. For the portion of a PSU award with a "performance condition" under ASC 718, expense is recognized over the service period if it is probable that the performance condition will be achieved.

Compensation expense is recognized based on the estimated grant date fair value on a straight-line basis over the requisite service period of the award. The initial requisite service period is generally five years for restricted stock awards and restricted stock units, and three years for ~~performance share units.~~PSUs. The fair value of each award is equal to the market price of the Company's common stock on the grant date, except for ~~performance share units~~PSUs with a "market condition" performance metric under ASC 718, which have a grant-date fair value based on a Monte Carlo valuation model.

Unvested restricted share-based awards are subject to forfeiture. Grantees are generally entitled to dividends or dividend equivalents on unvested and vested awards. ~~2,964,660~~6,400,000 shares of Class A common stock were reserved and available for issuance under the Artisan Partners Asset Management, Inc. 2023 Omnibus Incentive Compensation Plan (the "Plan") as of September 30, ~~2022.~~2023, which includes 3,945,902 shares registered in the nine months ended September 30, 2023.

During the nine months ended September 30, ~~2022,~~2023, Artisan granted ~~787,372~~515,702 restricted stock awards ~~1,331~~and 1,684 restricted stock ~~units, and 95,940 performance share units of Class A common stock to employees of the Company. Total compensation expense associated with the 2022 grant is expected to be approximately $38.0 million.~~units.

The following tables summarize the restricted share-based award activity for the nine months ended September 30, ~~2022:~~
Weighted-Average Grant Date Fair Value Restricted Stock Awards and Restricted Stock Units
Unvested at January 1, 2022 $ 38.18 5,245,394
Granted 41.86 788,703
Forfeited 39.99 (15,749)
Vested 35.09 (605,550)
Unvested at September 30, 2022 $ 39.06 5,412,798
2023:


	Weighted-Average Grant Date Fair Value		Restricted Stock Awards and Restricted Stock Units
Unvested at January 1, 2023	$	39.09	5,396,343
Granted	34.99		517,386
Forfeited	43.40		(17,916)
Vested	37.55		(542,487)
Unvested at September 30, 2023	$	38.84	5,353,326

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		Weighted-Average Grant Date Fair Value		Performance Share Units		Weighted-Average Grant Date Fair Value		Performance Share Units
Unvested at January 1, 2022		$	61.42	135,230
Unvested at January 1, 2023					Unvested at January 1, 2023	$	58.13	231,170
Granted	Granted	53.50		95,940	Granted	—		—
Forfeited	Forfeited	—		—	Forfeited	—		—
Vested(1)	Vested(1)	—		—	Vested(1)	34.97		(15,000)
Unvested at September 30, 2022		$	58.13	231,170
Unvested at September 30, 2023					Unvested at September 30, 2023	$	54.89	216,170
(1) During the nine months ended September 30, 2023, the 60,000 PSUs granted in 2020 met the requisite three-year performance conditions, resulting in the potential vesting of 150% of the PSUs, or 90,000 shares of Class A common stock. 45,000 shares of Class A common stock were promptly delivered at that time, while the remaining 45,000 PSUs remain subject to the qualified retirement vesting condition.					(1) During the nine months ended September 30, 2023, the 60,000 PSUs granted in 2020 met the requisite three-year performance conditions, resulting in the potential vesting of 150% of the PSUs, or 90,000 shares of Class A common stock. 45,000 shares of Class A common stock were promptly delivered at that time, while the remaining 45,000 PSUs remain subject to the qualified retirement vesting condition.

Based on the quarter-end status of the market and performance conditions, the ~~231,170~~216,170 unvested ~~performance share units~~PSUs would ultimately result in the issuance of ~~231,173~~264,143 shares of Class A common stock if all other vesting conditions were met.

The unrecognized compensation expense for the unvested restricted stock awards and restricted stock units as of September 30, ~~2022~~2023 was ~~$81.8~~$68.1 million with a weighted average recognition period of ~~3.5~~3.2 years remaining. The unrecognized compensation expense for the unvested ~~performance share units~~PSUs as of September 30, ~~2022~~2023 was ~~$7.5~~$4.1 million with a weighted average recognition period of ~~2.6~~2.0 years remaining.

During the nine months ended September 30, ~~2022,~~2023, the Company withheld a total of ~~195,319~~187,287 restricted shares and paid a total of ~~$7.8~~$6.8 million as a result of net share settlements to satisfy employee tax withholding obligations. These net share settlements had the effect of shares repurchased and retired by the Company, as they reduced the number of shares outstanding.

Long-term cash awards (franchise capital awards)

During the nine months ended September 30, ~~2022,~~2023, Artisan granted ~~$48.6~~$39.0 million of franchise capital awards to investment team members in lieu of certain additional restricted share-based awards. The franchise capital awards are subject to the same long-term vesting and forfeiture provisions as restricted share-based awards. Prior to vesting, franchise capital awards are generally allocated to one or more of the investment strategies managed by the award recipient's investment team. During the vesting period, the value of the awards will increase or decrease based on the investment returns of the strategies into which the awards are ~~invested.~~allocated. Compensation expense, including the appreciation or depreciation related to investment returns, is recognized on a straight-line basis over the required service period, which is generally five years. Because the awards will generally be paid out in cash upon vesting, the fair value of unvested awards is recorded as a liability based on the percentage of the service requirement that has been completed.

The ~~company~~Company hedges its economic exposure to the change in value of these awards due to market movements by investing the cash reserved for the awards in the underlying investments. The franchise capital award liability and the underlying investment holdings are marked to market each quarter. The change in value of the award liability is recognized as a compensation expense on a straight-line basis over the required service period. The change in value of the underlying investment holdings is recognized in non-operating income (expense) in the period of change. While there is a timing difference between the recognition of the compensation expense and the offsetting investment gain or loss, the compensation expense and investment income will net to zero at the end of the multi-year vesting period for all awards that ultimately vest.

The change in value of the investments had the following impact on the unaudited consolidated statements of operations:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
Statement of Operations Section Statement of Operations Line Item 2022 2021 2022 2021
Operating expenses (benefit) Compensation and benefits $ (1,490) $ 83 $ (4,138) $ 297
Non-operating income (expense) Other net investment gain (loss) (3,987) (356) (19,192) 2,117


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Statement of Operations Section	Statement of Operations Line Item	2023		2022		2023		2022
Operating expenses (benefit)	Compensation and benefits	$	(1,230)	$	(1,490)	$	1,216	$	(4,138)
Non-operating income (expense)	Other net investment gain (loss)	(4,454)		(3,987)		6,127		(19,192)

The franchise capital award liability was ~~$9.8~~$23.6 million and ~~$6.9~~$14.5 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and is included in accrued incentive compensation in the unaudited consolidated statements of financial condition. The unrecognized compensation expense for the unvested franchise capital awards as of September 30, ~~2022~~2023 was ~~$51.4~~$80.6 million with a weighted average recognition period of ~~4.2~~3.8 years remaining.

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Note 11. Income Taxes and Related Payments

APAM is subject to U.S. federal, state and local income taxation on APAM’s allocable portion of Holdings’ income as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate was lower than the U.S. federal statutory rate of 21% primarily due to a rate benefit attributable to the fact that, for the nine months ended September 30, ~~2022,~~2023, approximately ~~17%~~16% of Artisan Partners Holdings’ full year projected taxable earnings were attributable to other partners and not subject to corporate-level taxes. The effective tax rate was also lower than the statutory rate due to tax deductible dividends paid on unvested restricted share-based ~~awards and favorable tax deductions related to the vesting of restricted share-based~~ awards.

APAM’s effective tax rate was ~~20.4%~~19.1% and ~~18.8%~~20.4% for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Components of the provision for income taxes consist of the following:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Current:	Current:									Current:
Federal	Federal	$	5,934	$	15,097	$	19,606	$	38,414	Federal	$	4,240	$	5,934	$	14,546	$	19,606
State and local	State and local	1,380		4,339		5,051		10,906		State and local	950		1,380		4,128		5,051
Foreign	Foreign	129		152		407		406		Foreign	337		129		703		407
Total	Total	7,443		19,588		25,064		49,726		Total	5,527		7,443		19,377		25,064
Deferred:	Deferred:									Deferred:
Federal	Federal	6,212		7,198		18,458		24,155		Federal	7,687		6,212		27,448		18,458
State and local	State and local	1,095		1,268		3,239		4,256		State and local	1,356		1,095		4,838		3,239
Total	Total	7,307		8,466		21,697		28,411		Total	9,043		7,307		32,286		21,697
Income tax expense (benefit)	Income tax expense (benefit)	$	14,750	$	28,054	$	46,761	$	78,137	Income tax expense (benefit)	$	14,570	$	14,750	$	51,663	$	46,761

In connection with the IPO, APAM entered into two tax receivable agreements (“TRAs”). The first TRA generally provides for the payment by APAM to a private equity fund (the “Pre-H&F Corp Merger Shareholder”) or its assignees of 85% of the applicable cash savings, if any, of U.S. federal, state and local income taxes that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) the tax attributes of the preferred units APAM acquired in the merger of a wholly-owned subsidiary of the Pre-H&F Corp Merger Shareholder into APAM in March 2013 and (ii) tax benefits related to imputed interest.

The second TRA generally provides for the payment by APAM to current or former limited partners of Holdings or their assignees of 85% of the applicable cash savings, if any, of U.S. federal, state and local income taxes that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of their partnership units sold to APAM or exchanged (for shares of Class A common stock, convertible preferred stock or other consideration) and that are created as a result of such sales or exchanges and payments under the TRAs and (ii) tax benefits related to imputed interest. Under both agreements, APAM generally will retain the benefit of the remaining 15% of the applicable tax savings.

For purposes of the TRAs, cash savings of income taxes are calculated by comparing APAM’s actual income tax liability to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRAs, unless certain assumptions apply. The TRAs will continue in effect until all such tax benefits have been utilized or expired, unless APAM exercises its right to terminate the agreements or payments under the agreements are accelerated in the event that APAM materially breaches any of its material obligations under the agreements.

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Payments under the TRAs, if any, will be made pro rata among all TRA counterparties entitled to payments on an annual basis to the extent APAM has sufficient taxable income to utilize the increased depreciation and amortization charges and imputed interest deductions. Artisan expects to make one or more payments under the TRAs, to the extent they are required, prior to or within 125 days after APAM’s U.S. federal income tax return is filed for each fiscal year. Interest on the TRA payments will accrue ~~at a rate equal to one-year LIBOR plus 100 basis points~~ from the due date (without extension) of such tax return until such payments are made. Amounts payable under the TRAs are estimates which may be impacted by factors, including but not limited to, expected tax rates, projected taxable income, and projected ownership levels and are subject to change. Changes in the estimates of amounts payable under tax receivable agreements are recorded as non-operating income (loss) in the unaudited consolidated statements of operations.

The change in the Company’s deferred tax assets related to the tax benefits described above and the change in corresponding amounts payable under the TRAs for the nine months ended September 30, ~~2022~~2023 is summarized as follows:


		Deferred Tax Asset - Amortizable Basis		Amounts Payable Under TRAs			Deferred Tax Asset - Amortizable Basis		Amounts Payable Under TRAs
December 31, 2021		$	459,893	$	425,427
December 31, 2022						December 31, 2022	$	426,468	$	398,789

2022 Holdings Common Unit Exchanges		8,050		6,842
2023 Holdings Common Unit Exchanges						2023 Holdings Common Unit Exchanges	1,567		1,333
Amortization	Amortization	(31,581)		—		Amortization	(32,885)		—

Payments under TRAs	Payments under TRAs	—		(33,109)		Payments under TRAs	—		(35,757)
Change in estimate	Change in estimate	10		(913)		Change in estimate	(2)		(505)
September 30, 2022		$	436,372	$	398,247
September 30, 2023						September 30, 2023	$	395,148	$	363,860

Net deferred tax assets comprise the following:


		As of September 30, 2022		As of December 31, 2021			As of September 30, 2023		As of December 31, 2022
Deferred tax assets:	Deferred tax assets:					Deferred tax assets:
Amortizable basis (1)	Amortizable basis (1)	$	436,372	$	459,893	Amortizable basis (1)	$	395,148	$	426,468
Other (2)	Other (2)	48,384		38,009		Other (2)	51,343		50,556
Total deferred tax assets	Total deferred tax assets	484,756		497,902		Total deferred tax assets	446,491		477,024
Less: valuation allowance (3)	Less: valuation allowance (3)	—		—		Less: valuation allowance (3)	—		—
Net deferred tax assets	Net deferred tax assets	$	484,756	$	497,902	Net deferred tax assets	$	446,491	$	477,024

(1) Represents the unamortized step-up of tax basis and other tax attributes from the merger and partnership unit sales and exchanges described above. These future tax benefits are subject to the TRA agreements.	(1) Represents the unamortized step-up of tax basis and other tax attributes from the merger and partnership unit sales and exchanges described above. These future tax benefits are subject to the TRA agreements.					(1) Represents the unamortized step-up of tax basis and other tax attributes from the merger and partnership unit sales and exchanges described above. These future tax benefits are subject to the TRA agreements.
(2) Represents the net deferred tax assets associated with the merger described above and other miscellaneous deferred tax assets. These future tax benefits are not subject to the TRA agreements.
(2) Represents the net deferred tax assets associated with Artisan’s investment in Holdings, related primarily to incentive compensation plan deduction timing differences. These future tax benefits are not subject to the TRA agreements.						(2) Represents the net deferred tax assets associated with Artisan’s investment in Holdings, related primarily to incentive compensation plan deduction timing differences. These future tax benefits are not subject to the TRA agreements.
(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.	(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.					(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.

Accounting standards establish a minimum threshold for recognizing, and a process for measuring, the benefits of income tax return positions in financial statements. The Company's gross liability for unrecognized tax benefits was $0.2 million and ~~$1.3~~$0.1 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The total amount of unrecognized tax benefits is not expected to significantly increase or decrease within the next twelve months.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. Accrued interest on unrecognized tax benefits was ~~$24 thousand and $238 thousand~~less than $0.1 million as of September 30, ~~2022~~2023 and December 31, ~~2021, respectively.~~2022. The gross unrecognized tax benefit is recorded within accounts payable, accrued expenses, and other in the Company’s unaudited condensed consolidated statements of financial condition.

In the normal course of business, Artisan is subject to examination by federal and certain state, local and foreign tax regulators. As of September 30, ~~2022,~~2023, U.S. federal income tax returns filed for the years ~~2019~~2020 through ~~2021~~2022 are open and therefore subject to examination. State, local, and foreign income tax returns filed are generally subject to examination from ~~2018~~2019 to ~~2021.~~2022.

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Note 12. Earnings Per Share

Basic earnings per share is computed under the two-class method by dividing income available to Class A common stockholders by the weighted average number of Class A common shares outstanding during the period. Unvested restricted share-based awards are excluded from the number of Class A common shares outstanding for the basic earnings per share calculation because the shares have not yet been earned by employees. Income available to Class A common stockholders is computed by reducing net income attributable to APAM by earnings (both distributed and undistributed) allocated to participating securities, according to their respective rights to participate in those earnings. Except for certain performance share units, unvested share-based awards are participating securities because the awards include non-forfeitable dividend rights during the vesting period. Class B and Class C common shares do not share in profits of APAM and therefore are not reflected in the calculations.

Diluted earnings per share is computed under the more dilutive of the treasury stock method or the two-class method. The weighted average number of Class A common shares outstanding during the period is increased by the assumed conversion of nonparticipating unvested share-based awards into Class A common stock using the treasury stock method.

The computation of basic and diluted earnings per share for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Basic and Diluted Earnings Per Share	Basic and Diluted Earnings Per Share	2022		2021		2022		2021		Basic and Diluted Earnings Per Share	2023		2022		2023		2022
Numerator:	Numerator:									Numerator:
Net income attributable to APAM	Net income attributable to APAM	$	44,235	$	86,413	$	153,947	$	251,898	Net income attributable to APAM	$	53,155	$	44,235	$	157,533	$	153,947
Less: Allocation to participating securities	Less: Allocation to participating securities	3,651		8,226		18,675		23,260		Less: Allocation to participating securities	4,691		3,651		13,799		18,675
Net income available to common stockholders	Net income available to common stockholders	$	40,584	$	78,187	$	135,272	$	228,638	Net income available to common stockholders	$	48,464	$	40,584	$	143,734	$	135,272
Denominator:	Denominator:									Denominator:
Basic weighted average shares outstanding	Basic weighted average shares outstanding	62,623,434		59,965,549		62,329,756		59,519,634		Basic weighted average shares outstanding	63,520,402		62,623,434		63,419,587		62,329,756
Dilutive effect of nonparticipating share-based awards	Dilutive effect of nonparticipating share-based awards	9,226		17,225		23,519		16,260		Dilutive effect of nonparticipating share-based awards	42,642		9,226		30,217		23,519
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	62,632,660		59,982,774		62,353,275		59,535,894		Diluted weighted average shares outstanding	63,563,044		62,632,660		63,449,804		62,353,275
Earnings per share - Basic	Earnings per share - Basic	$	0.65	$	1.30	$	2.17	$	3.84	Earnings per share - Basic	$	0.76	$	0.65	$	2.27	$	2.17
Earnings per share - Diluted	Earnings per share - Diluted	$	0.65	$	1.30	$	2.17	$	3.84	Earnings per share - Diluted	$	0.76	$	0.65	$	2.27	$	2.17

Allocation to participating securities in the table above primarily represents dividends paid to holders of unvested restricted share-based awards, which reduces net income available to common stockholders.

The Holdings limited partnership units are anti-dilutive primarily due to the impact of public company expenses. Unvested restricted share-based awards with non-forfeitable dividend rights during the vesting period are considered participating securities and are therefore anti-dilutive. The following table summarizes the weighted-average shares outstanding that are excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive:


		For the Three Months Ended September 30,		For the Nine Months Ended September 30,			For the Three Months Ended September 30,		For the Nine Months Ended September 30,
Anti-Dilutive Weighted Average Shares Outstanding	Anti-Dilutive Weighted Average Shares Outstanding	2022	2021	2022	2021	Anti-Dilutive Weighted Average Shares Outstanding	2023	2022	2023	2022
Holdings limited partnership units	Holdings limited partnership units	11,928,838	14,146,934	12,145,755	14,486,932	Holdings limited partnership units	11,487,400	11,928,838	11,517,987	12,145,755
Unvested restricted share-based awards	Unvested restricted share-based awards	5,668,508	5,417,353	5,587,842	5,438,556	Unvested restricted share-based awards	5,586,181	5,668,508	5,571,819	5,587,842
Total	Total	17,597,346	19,564,287	17,733,597	19,925,488	Total	17,073,581	17,597,346	17,089,806	17,733,597

Note 13. Indemnifications

In the normal course of business, APAM enters into agreements that include indemnities in favor of third parties. Holdings has also agreed to indemnify APAM as its general partner, Artisan Investment Corporation (“AIC”) as its former general partner, the directors and officers of APAM, the directors and officers of AIC as its former general partner, the members of its former Advisory Committee, and its partners, directors, officers, employees and agents. Holdings’ subsidiaries may also have similar agreements to indemnify their respective general partner(s), directors, officers, directors and officers of their general partner(s), partners, members, employees, and agents. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. APAM maintains insurance policies that may provide coverage against certain claims under these indemnities.

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~~Note 14. Leases~~

~~Operating lease expense was as follows:~~

For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease Type Classification 2022 2021 2022 2021
Parking leases Compensation and benefits $ 131 $ 130 $ 393 $ 388
Office leases Occupancy 4,157 3,664 13,256 10,862
Variable lease cost (1)
Occupancy 410 14 486 44
Short-term lease cost (1)
Occupancy 268 97 699 257
Sublease income Occupancy — (100) (133) (167)
Office equipment leases Communication and technology 34 59 134 190
Total operating lease expense $ 5,000 $ 3,864 $ 14,835 $ 11,574
(1) Variable and short-term lease costs are excluded from the measurement of operating lease liabilities.

~~The table below presents the maturity of operating lease liabilities:~~

As of September 30, 2022
2022 (excluding the nine months ended September 30, 2022) $ 3,787
2023 18,428
2024 18,595
2025 18,524
2026 17,783
Thereafter 70,519
Total undiscounted lease payments $ 147,636
Adjustment to discount to present value (24,160)
Operating lease liabilities $ 123,476

~~As of September 30, 2022, none of the options to extend lease terms were reasonably certain of being exercised. Other information related to leases was as follows:~~

For the Nine Months Ended September 30,
2022 2021
Weighted average discount rate 4.1 % 4.6 %
Weighted average remaining lease term 9.1 years 6.7 years
Operating cash flows for operating leases $ 12,392 $ 12,779

Note ~~15.~~14. Related Party Transactions

Several of the current executive officers and directors of APAM or entities associated with those individuals, are limited partners of Holdings. As a result, certain transactions (such as TRA payments) between Artisan and the limited partners of Holdings are considered to be related party transactions with respect to these persons.

Holdings also makes estimated state tax payments on behalf of certain limited partners, including related parties. These payments are then netted from subsequent distributions or payments to the limited partners. At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, accounts receivable included ~~$16.7~~$4.3 million and ~~$1.5~~$6.5 million, respectively, of partnership tax reimbursements due from Holdings’ limited partners, including related parties.

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Affiliate transactions—Artisan Funds

Artisan has an agreement to serve as the investment adviser to Artisan Funds, with which certain Artisan employees are affiliated. Under the terms of the agreement, which generally is reviewed and continued by the board of directors of Artisan Funds annually, a fee is paid to Artisan based on an annual percentage of the average daily net assets of each Artisan Fund ranging from 0.60% to 1.05%. Artisan has contractually agreed to reimburse for expenses incurred to the extent necessary to limit annualized ordinary operating expenses incurred by certain of the Artisan Funds to not more than a fixed percentage (ranging from ~~0.88%~~0.83% to 1.50%) of a fund’s average daily net assets. In addition, Artisan may voluntarily waive fees or reimburse any of the Artisan Funds for other expenses. The officers and directors of Artisan Funds who are affiliated with Artisan receive no compensation from the funds.

Investment advisory fees for managing Artisan Funds and amounts reimbursed by Artisan for fees and expenses (including management fees) are as follows:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Artisan Funds	Artisan Funds	2022		2021		2022		2021		Artisan Funds	2023		2022		2023		2022
Investment advisory fees (Gross of expense reimbursements)	Investment advisory fees (Gross of expense reimbursements)	$	136,216	$	186,434	$	446,417	$	529,441	Investment advisory fees (Gross of expense reimbursements)	$	145,738	$	136,216	$	421,459	$	446,417
Elimination of fees from consolidated investment products (1)	Elimination of fees from consolidated investment products (1)	(73)		—		(137)		—		Elimination of fees from consolidated investment products (1)	(67)		(73)		(265)		(137)
Consolidated investment advisory fees (Gross of expense reimbursements)	Consolidated investment advisory fees (Gross of expense reimbursements)	$	136,143	$	186,434	$	446,280	$	529,441	Consolidated investment advisory fees (Gross of expense reimbursements)	$	145,671	$	136,143	$	421,194	$	446,280

Expense reimbursements	Expense reimbursements	$	352	$	180	$	1,320	$	517	Expense reimbursements	$	517	$	352	$	1,400	$	1,320
Elimination of expense reimbursements from consolidated investment products (1)	Elimination of expense reimbursements from consolidated investment products (1)	(128)		—		(300)		—		Elimination of expense reimbursements from consolidated investment products (1)	(115)		(128)		(450)		(300)
Consolidated expense reimbursements	Consolidated expense reimbursements	$	224	$	180	$	1,020	$	517	Consolidated expense reimbursements	$	402	$	224	$	950	$	1,020

(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.	(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.									(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.

Affiliate transactions—Artisan Global Funds

Artisan has an agreement to serve as the investment manager to Artisan Global Funds, with which certain Artisan employees are affiliated. Under the terms of these agreements, a fee is paid based on an annual percentage of the average daily net assets of each fund ranging from ~~0.70%~~0.50% to 1.85%. Artisan reimburses each sub-fund of Artisan Global Funds to the extent that sub-fund’s annual expenses, not including Artisan’s fee, exceed certain levels, which range from 0.10% to 0.20%. In addition, Artisan may voluntarily waive fees or reimburse any of the Artisan Global Funds for other expenses. The directors of Artisan Global Funds who are also employees of Artisan receive no compensation from the funds.

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Investment advisory fees for managing Artisan Global Funds and amounts reimbursed to Artisan Global Funds by Artisan are as follows:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
Artisan Global Funds 2022 2021 2022 2021
Investment advisory fees (Gross of expense reimbursements) $ 10,471 $ 12,873 $ 33,301 $ 35,672
Elimination of fees from consolidated investment products(1)
(58) (19) (94) (56)
Consolidated investment advisory fees (Gross of expense reimbursements) $ 10,413 $ 12,854 $ 33,207 $ 35,616
Expense reimbursements $ 103 $ 147 $ 293 $ 334
Elimination of expense reimbursements from consolidated investment products (1)
(113) (115) (278) (286)
Consolidated expense reimbursements $ (10) $ 32 $ 15 $ 48
(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.

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	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Artisan Global Funds	2023		2022		2023		2022
Investment advisory fees (Gross of expense reimbursements)	$	11,331	$	10,471	$	32,663	$	33,301
Elimination of fees from consolidated investment products(1)	(123)		(58)		(287)		(94)
Consolidated investment advisory fees (Gross of expense reimbursements)	$	11,208	$	10,413	$	32,376	$	33,207

Expense reimbursements	$	127	$	103	$	308	$	293
Elimination of expense reimbursements from consolidated investment products (1)	(139)		(113)		(320)		(278)
Consolidated expense reimbursements	$	(12)	$	(10)	$	(12)	$	15

(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.

Affiliate transactions—Artisan Private Funds

Pursuant to written agreements, Artisan serves as the investment manager, and acts as the general partner, for certain Artisan Private Funds. Under the terms of these agreements, Artisan earns a management fee and, for certain funds, is entitled to receive either an allocation of profits or a performance-based fee. In addition, Artisan has agreed to reimburse certain funds to the extent that expenses, excluding Artisan’s management fee, performance fee and transaction related costs, exceed certain levels, which range from 0.10% to 1.00% per annum of the net assets of the fund. Artisan may also voluntarily waive fees or reimburse the funds for other expenses. The directors of Artisan Private Funds and the officers of the general partners of the Artisan Private Funds who are affiliated with Artisan receive no compensation from the funds.

Artisan and certain related parties, including employees, officers and members of the Company’s Board, have invested in one or more of the Artisan Private Funds and, ~~currently~~for certain of those investments, do not pay a management fee, performance fee or incentive allocation.

Investment advisory fees for managing ~~the~~ Artisan Private Funds and amounts reimbursed to Artisan Private Funds by Artisan are as follows:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Artisan Private Funds	Artisan Private Funds	2022		2021		2022		2021		Artisan Private Funds	2023		2022		2023		2022
Investment advisory fees (Gross of expense reimbursements)	Investment advisory fees (Gross of expense reimbursements)	$	3,592	$	3,785	$	11,651	$	9,269	Investment advisory fees (Gross of expense reimbursements)	$	2,781	$	3,592	$	9,170	$	11,651
Elimination of fees from consolidated investment products (1)	Elimination of fees from consolidated investment products (1)	(147)		(117)		(430)		(332)		Elimination of fees from consolidated investment products (1)	(311)		(147)		(702)		(430)
Consolidated investment advisory fees (Gross of expense reimbursements)	Consolidated investment advisory fees (Gross of expense reimbursements)	$	3,445	$	3,668	$	11,221	$	8,937	Consolidated investment advisory fees (Gross of expense reimbursements)	$	2,470	$	3,445	$	8,468	$	11,221

Expense reimbursements	Expense reimbursements	$	46	$	67	$	178	$	221	Expense reimbursements	$	82	$	46	$	194	$	178
Elimination of expense reimbursements from consolidated investment products (1)	Elimination of expense reimbursements from consolidated investment products (1)	(19)		(56)		(94)		(126)		Elimination of expense reimbursements from consolidated investment products (1)	(35)		(19)		(82)		(94)
Consolidated expense reimbursements	Consolidated expense reimbursements	$	27	$	11	$	84	$	95	Consolidated expense reimbursements	$	47	$	27	$	112	$	84

(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.	(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.									(1) Investment advisory fees and expense reimbursements related to consolidated investment products are eliminated from revenue upon consolidation.

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Note ~~16.~~15. Subsequent Events

Distributions and dividends

APAM, acting as the general partner of Artisan Partners Holdings, declared, effective ~~November 1, 2022,~~October 31, 2023, a distribution by Artisan Partners Holdings of ~~$12.5~~$18.8 million to holders of Artisan Partners Holdings partnership units, including APAM. The board of directors of APAM declared, effective ~~November 1, 2022,~~October 31, 2023, a quarterly dividend of ~~$0.56~~$0.65 per share of Class A common stock. The APAM dividend is payable on November 30, ~~2022,~~2023, to stockholders of record as of November 16, ~~2022.~~2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview and Recent Highlights

We are an investment management firm focused on providing high-value added, active investment strategies in growing asset classes to sophisticated clients around the world. As of September 30, ~~2022,~~2023, our 10 autonomous investment teams managed a total of 25 investment strategies across multiple asset classes and investment styles.

We focus on attracting, retaining and developing talented investment professionals and creating an environment in which each investment team is provided ample resources and support, transparent and direct financial incentives, a high degree of investment autonomy, and a long-term time horizon. We create new investment strategies when we identify opportunities to add value for clients, oftentimes through the use of a broad array of securities, instruments, and techniques (which we call degrees of freedom) to differentiate returns and manage risk.

We ~~focus~~offer our ~~distribution efforts on~~investment management capabilities primarily to sophisticated investors ~~and asset allocators, including institutions and intermediaries~~ that operate with ~~institutional-like~~institutional decision-making ~~processes.~~processes and longer-term investment horizons. We ~~offer~~employ knowledgeable and investment focused relationship managers who are directly aligned with our investment ~~strategies~~teams, and we pair them with regional and distribution channel experts. We provide access to ~~clients and investors~~our investment strategies through multiple investment vehicles, including separate accounts and different types of pooled vehicles. As of September 30, ~~2022,~~2023, approximately ~~77%~~76% of our assets under management were managed for clients and investors domiciled in the U.S. and ~~23%~~24% of our assets under management were managed for clients and investors domiciled outside of the U.S.

As a high-value added investment manager we expect that long-term investment performance will be the primary driver of our long-term business and financial results. If we maintain and evolve existing investment strategies and launch new investment strategies that meet the needs of and generate attractive outcomes for sophisticated asset allocators, we believe that we will continue to generate strong business and financial results.

Over shorter time periods, changes in our business and financial results are largely driven by market conditions and fluctuations in our assets under management that may not necessarily be the result of our long-term investment performance or the long-term demand for our strategies. For this reason, we expect that our business and financial results will be lumpy over time.

We strive to maintain a financial model that is transparent and predictable. Currently, we derive nearly all of our revenues from investment management fees, most of which are based on a specified percentage of clients’ average assets under management. A majority of our expenses, including most of our compensation expense, vary directly with changes in our revenues. We invest thoughtfully to support our investment teams and future growth, while also paying out to stockholders and partners a majority of the cash that we generate from operations through dividends and distributions. We expect to continue to invest in the growth of the business, with a focus on adding new investment capabilities and more degrees of freedom in areas where both opportunity and client demand exist, and in which we can differentiate our active management and add value for clients.

~~Business highlights for the quarter included:~~

•~~Our newest autonomous investment team, the EMsights Capital Group, launched its third strategy—the Emerging Markets Local Opportunities strategy—in July 2022.~~

Financial highlights for the quarter ~~included:~~included the following:

•During the three months ended September 30, ~~2022,~~2023, our assets under management declined to ~~$120.6~~$136.5 billion, a decrease of ~~$9.9~~$6.5 billion, or 8%5%, compared to ~~$130.5~~$143.0 billion at June 30, ~~2022, as a result of $8.8~~2023, primarily due to $5.1 billion of ~~negative investment returns~~market depreciation and ~~$1.1 billion of~~ net client cash ~~outflows.~~outflows of $1.3 billion.

•Average assets under management for the three months ended September 30, ~~2022~~2023 were ~~$132.9~~$142.2 billion, a ~~25% decrease~~7% increase from the average of ~~$177.6~~$132.9 billion for the three months ended September 30, ~~2021.~~2022. Average assets under management for the three months ended September 30, ~~2022, decreased 8%~~2023 increased 2% from the average of ~~$143.9~~$139.3 billion for the three months ended June 30, ~~2022.~~2023.

•We earned ~~$234.3~~$248.7 million in revenue for the three months ended September 30, ~~2022, a decrease~~2023, an increase of ~~26%~~6% from revenues of ~~$316.6~~$234.3 million for the three months ended September 30, ~~2021.~~2022. Performance fees of $0.1 million were recognized in the three months ended September 30, ~~2022, compared to $0.4 million in the three months ended September 30, 2021.~~2023 and 2022.

•Our GAAP operating margin was 33.0% for the three months ended September 30, 2023, compared to 33.6% for the three months ended September 30, ~~2022, compared to 45.2%~~2022. Adjusted operating margin was 32.5% for the three months ended September 30, ~~2021. Adjusted operating margin was~~2023, compared to 32.9% for the three months ended September 30, ~~2022, compared to 45.2% for the three months ended September 30, 2021.~~2022.

•We generated ~~$0.65~~$0.76 of earnings per basic and diluted share and ~~$0.70~~$0.75 of adjusted EPS.

•We declared and distributed dividends of ~~$0.60~~$0.61 per share of Class A common stock during the three months ended September 30, ~~2022.~~2023.

•We declared, effective ~~November 1, 2022,~~October 31, 2023, a quarterly dividend with respect to the three months ended September 30, ~~2022,~~2023, of ~~$0.56~~$0.65 per share of Class A common stock.

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Organizational Structure

Our operations are conducted through Artisan Partners Holdings LP (“Holdings”) and its subsidiaries. On March 12, 2013, Artisan Partners Asset Management Inc. (“APAM”) and Holdings completed a series of transactions ~~(“the IPO~~(the "IPO Reorganization”) to reorganize their capital structures in connection with the initial public offering (“IPO”) of APAM’s Class A common stock. The IPO Reorganization and IPO were completed on March 12, 2013. The IPO Reorganization was designed to create a capital structure that preserves our ability to conduct our business through Holdings, while permitting us to raise additional capital and provide access to liquidity through a public company.

Limited partners of Holdings, some of whom are employees, held approximately ~~15%~~14% of the equity interests in Holdings as of September 30, ~~2022. As a result, our~~2023. Our results reflect that significant noncontrolling interest.

We operate our business in a single segment.

Holdings Unit Exchanges

During the nine months ended September 30, ~~2022,~~2023, certain limited partners of Holdings exchanged ~~634,692~~142,550 common units (along with a corresponding number of shares of Class B or Class C common stock of APAM) for ~~634,692~~142,550 shares of Class A common stock. In connection with the exchanges, APAM received ~~634,692~~142,550 GP units of Holdings.

APAM’s equity ownership interest in Holdings increased from ~~84%~~85% at December 31, ~~2021~~2022 to ~~85%~~86% at September 30, ~~2022,~~2023, as a result of these transactions and other equity transactions during the period.

Financial Overview

Economic Environment

Global market conditions materially affect our financial performance. ~~Global markets continued to be volatile during the three months ended September 30, 2022 amid continued concerns~~Concerns about elevated inflation, interest rate increases, ~~prolonged~~ effects of ~~the war in Ukraine~~geopolitical tensions, conflicts and wars, and other global economic ~~conditions. This~~conditions continued ~~volatility~~into the three months ended September 30, 2023. Volatility and uncertainty in global financial markets ~~has impacted~~impact the value of our assets under management. Because the revenue we earn is based on the value of our assets under management (AUM), fluctuations in our AUM will result in corresponding fluctuations in our revenues and earnings.

The following table presents the total returns of relevant market indices for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
S&P 500 total returns	S&P 500 total returns	(4.9)	%	0.6	%	(23.9)	%	15.9	%	S&P 500 total returns	(3.3)	%	(4.9)	%	13.1	%	(23.9)	%
MSCI All Country World total returns	MSCI All Country World total returns	(6.8)	%	(1.1)	%	(25.6)	%	11.1	%	MSCI All Country World total returns	(3.4)	%	(6.8)	%	10.1	%	(25.6)	%
MSCI EAFE total returns	MSCI EAFE total returns	(9.4)	%	(0.4)	%	(27.1)	%	8.3	%	MSCI EAFE total returns	(4.1)	%	(9.4)	%	7.1	%	(27.1)	%
Russell Midcap® total returns	Russell Midcap® total returns	(3.4)	%	(0.9)	%	(24.3)	%	15.2	%	Russell Midcap® total returns	(4.7)	%	(3.4)	%	3.9	%	(24.3)	%
MSCI Emerging Markets Index	MSCI Emerging Markets Index	(11.6)	%	(8.1)	%	(27.2)	%	(1.2)	%	MSCI Emerging Markets Index	(2.9)	%	(11.6)	%	1.8	%	(27.2)	%
ICE BofA U.S. High Yield Master II Total Return Index		(0.7)	%	0.9	%	(14.6)	%	4.7	%
ICE BofA US High Yield Index										ICE BofA US High Yield Index	0.5	%	(0.7)	%	6.0	%	(14.6)	%

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Key Performance Indicators

When we review our business and financial performance we consider, among other things, the following:


		For the Three Months Ended September 30,						For the Nine Months Ended September 30,							For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2022			2021			2022			2021				2023			2022			2023			2022
		(unaudited; dollars in millions)													(unaudited; dollars in millions)
Assets under management at period end	Assets under management at period end	$	120,607		$	173,623		$	120,607		$	173,623		Assets under management at period end	$	136,495		$	120,607		$	136,495		$	120,607
Average assets under management (1)	Average assets under management (1)	$	132,946		$	177,557		$	146,244		$	170,380		Average assets under management (1)	$	142,199		$	132,946		$	138,982		$	146,244
Net client cash flows (2)	Net client cash flows (2)	$	(1,073)		$	11		$	(4,621)		$	2,463		Net client cash flows (2)	$	(1,339)		$	(1,073)		$	(3,678)		$	(4,621)
Total revenues	Total revenues	$	234.3		$	316.6		$	767.3		$	912.2		Total revenues	$	248.7		$	234.3		$	726.1		$	767.3
Weighted average management fee (3)	Weighted average management fee (3)	70.0		bps	70.7		bps	70.2		bps	70.8		bps	Weighted average management fee (3)	69.5		bps	70.0		bps	70.0		bps	70.2		bps
Operating margin	Operating margin	33.6		%	45.2		%	35.7		%	44.1		%	Operating margin	33.0		%	33.6		%	31.3		%	35.7		%
Adjusted operating margin (4)	Adjusted operating margin (4)	32.9		%	45.2		%	35.1		%	44.2		%	Adjusted operating margin (4)	32.5		%	32.9		%	31.5		%	35.1		%

(1) We compute average assets under management by averaging day-end assets under management for the applicable period.	(1) We compute average assets under management by averaging day-end assets under management for the applicable period.													(1) We compute average assets under management by averaging day-end assets under management for the applicable period.
(2) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.	(2) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.													(2) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.
(3) We compute our weighted average management fee by dividing annualized investment management fees (which excludes performance fees) by average assets under management for the applicable period.	(3) We compute our weighted average management fee by dividing annualized investment management fees (which excludes performance fees) by average assets under management for the applicable period.													(3) We compute our weighted average management fee by dividing annualized investment management fees (which excludes performance fees) by average assets under management for the applicable period.
(4) Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in “Supplemental Non-GAAP Financial Information” below.	(4) Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in “Supplemental Non-GAAP Financial Information” below.													(4) Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in “Supplemental Non-GAAP Financial Information” below.

~~Investment advisory fees and assets~~Assets under management within our consolidated investment products, and investment advisory fees earned thereon, are excluded from ~~the~~our weighted average fee calculations and ~~from~~ total revenues, since any such revenues are eliminated upon consolidation. Assets under management within Artisan Private Funds are included in the reported firmwide, separate accounts and other, and institutional assets under management figures reported below.

Assets Under Management and Investment Performance

Changes to our operating results from one period to another are primarily caused by changes in the amount of our assets under management. Changes in the relative composition of our assets under management among our investment strategies and vehicles and the effective fee rates on our products also impact our operating results.

The amount and composition of our assets under management are, and will continue to be, influenced by a variety of factors including, among others:

•investment performance, including fluctuations in both the financial markets and foreign currency exchange rates and the quality of our investment decisions;

•flows of client assets into and out of our various strategies and investment vehicles;

•our decision to close strategies or limit the growth of assets in a strategy or a vehicle when we believe it is in the best interest of our clients, as well as our decision to re-open strategies, in part or entirely;

•our ability to attract and retain qualified investment, management, and marketing and client service professionals;

•industry trends towards products, strategies, vehicles, or services that we do not offer;

•competitive conditions in the investment management and broader financial services sectors; and

•investor sentiment and confidence.

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The table below sets forth changes in our total assets under management:


		For the Three Months Ended September 30,				Period-to-Period					For the Three Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Beginning assets under management	Beginning assets under management	$	130,547	$	175,214	$	(44,667)	(25.5)	%	Beginning assets under management	$	142,989	$	130,547	$	12,442	9.5	%
Gross client cash inflows	Gross client cash inflows	6,898		6,942		(44)		(0.6)	%	Gross client cash inflows	5,601		6,898		(1,297)		(18.8)	%
Gross client cash outflows	Gross client cash outflows	(7,971)		(6,931)		(1,040)		(15.0)	%	Gross client cash outflows	(6,940)		(7,971)		1,031		12.9	%
Net client cash flows (1)	Net client cash flows (1)	(1,073)		11		(1,084)		(9,854.5)	%	Net client cash flows (1)	(1,339)		(1,073)		(266)		(24.8)	%
Artisan Funds' distributions not reinvested (2)	Artisan Funds' distributions not reinvested (2)	(81)		(39)		(42)		(107.7)	%	Artisan Funds' distributions not reinvested (2)	(75)		(81)		6		7.4	%
Investment returns and other (3)	Investment returns and other (3)	(8,786)		(1,563)		(7,223)		(462.1)	%	Investment returns and other (3)	(5,080)		(8,786)		3,706		42.2	%

Ending assets under management	Ending assets under management	$	120,607	$	173,623	$	(53,016)	(30.5)	%	Ending assets under management	$	136,495	$	120,607	$	15,888	13.2	%
Average assets under management	Average assets under management	$	132,946	$	177,557	$	(44,611)	(25.1)	%	Average assets under management	$	142,199	$	132,946	$	9,253	7.0	%

		For the Nine Months Ended September 30,				Period-to-Period					For the Nine Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Beginning assets under management	Beginning assets under management	$	174,754	$	157,776	$	16,978	10.8	%	Beginning assets under management	$	127,892	$	174,754	$	(46,862)	(26.8)	%
Gross client cash inflows	Gross client cash inflows	22,397		25,814		(3,417)		(13.2)	%	Gross client cash inflows	15,889		22,397		(6,508)		(29.1)	%
Gross client cash outflows	Gross client cash outflows	(27,018)		(23,351)		(3,667)		(15.7)	%	Gross client cash outflows	(19,567)		(27,018)		7,451		27.6	%
Net client cash flows (1)	Net client cash flows (1)	(4,621)		2,463		(7,084)		(287.6)	%	Net client cash flows (1)	(3,678)		(4,621)		943		20.4	%
Artisan Funds' distributions not reinvested (2)	Artisan Funds' distributions not reinvested (2)	(169)		(114)		(55)		(48.2)	%	Artisan Funds' distributions not reinvested (2)	(190)		(169)		(21)		(12.4)	%
Investment returns and other (3)	Investment returns and other (3)	(49,357)		13,498		(62,855)		(465.7)	%	Investment returns and other (3)	12,471		(49,357)		61,828		125.3	%
Ending assets under management	Ending assets under management	$	120,607	$	173,623	$	(53,016)	(30.5)	%	Ending assets under management	$	136,495	$	120,607	$	15,888	13.2	%
Average assets under management	Average assets under management	$	146,244	$	170,380	$	(24,136)	(14.2)	%	Average assets under management	$	138,982	$	146,244	$	(7,262)	(5.0)	%

(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.	(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.									(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.
(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.	(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.									(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
(3) Includes the impact of translating the value of assets under management denominated in non-USD currencies into U.S. dollars. The impact was immaterial for the periods presented.	(3) Includes the impact of translating the value of assets under management denominated in non-USD currencies into U.S. dollars. The impact was immaterial for the periods presented.									(3) Includes the impact of translating the value of assets under management denominated in non-USD currencies into U.S. dollars. The impact was immaterial for the periods presented.

During the quarter, our AUM declined by ~~$9.9~~$6.5 billion primarily due to ~~$8.8~~$5.1 billion of ~~negative investment returns~~market depreciation and ~~$1.1 billion of~~ net client cash ~~outflows.~~outflows of $1.3 billion. For the quarter, 1516 of our 25 investment strategies had net outflows totaling ~~$2.1~~$3.3 billion, which were partially offset by ~~$1.0~~$1.9 billion of net inflows toacross the remaining 109 strategies.

Over the long-term, we expect to generate the majority of our AUM growth through investment returns, which has been our historical experience.

We monitor the availability of attractive investment opportunities relative to the amount of assets we manage in each of our investment strategies and the velocity at which the strategies are experiencing inflows. When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate assets under management may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy. We believe that management of our investment capacity protects our ability to manage assets successfully, which protects the interests of our clients and, in the long term, protects our ability to retain client assets and maintain our profit margins.

As of the date of this filing, the Artisan High Income Fund, Artisan International Value Fund and Artisan International Small-Mid Fund are closed to most new investors and their respective strategies have limited availability to most new client relationships. In addition, we are actively managing the capacity of our U.S. Small-Cap Growth strategy with respect to new client relationships.

When we close or otherwise restrict the growth of a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities. We may also permit new investments by other eligible investors in our discretion. As a result, during a given period we may have net client cash inflows in a closed strategy. However, when a strategy is closed or its growth is restricted we expect there to be periods of net client cash outflows.

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In November ~~30, 2022,~~2023, we expect the Artisan Funds to have completed their annual income and capital gain ~~distributions.~~distributions for their equity mutual funds. Based on our current estimates and assumptions, we expect fourth quarter distributions to result in approximately ~~$300~~$400 million of net client cash outflows from investors who choose not to reinvest their distributions. The November ~~2022~~2023 distribution (estimates of which we expect Artisan Funds will disclose in advance of the record dates) may cause increased mutual fund redemptions.

The unaudited table on the following page sets forth the average annual total returns for each composite (gross of fees) and its respective broad-based benchmark (and style benchmark, if applicable) over a multi-horizon time period as of September 30, ~~2022.~~2023. Returns for periods less than one year are not annualized.

We measure investment performance based upon the results of our “composites”, which represent the aggregate performance of all discretionary client accounts, including pooled investment vehicles, invested in the same strategy except those accounts with respect to which we believe client-imposed investment restrictions may have a material impact on portfolio construction and those accounts managed in a currency other than U.S. dollars. The results of these excluded accounts, which represented approximately ~~12%~~14% of our assets under management at September 30, ~~2022,~~2023, are maintained in separate composites the results of which are not included below.

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										Average Annual Value-Added(1) Since Inception (bps)										Average Annual Value-Added(1) Since Inception (bps)
		Composite Inception	Strategy AUM (2)		Average Annual Total Returns (Gross) (%)							Composite Inception	Strategy AUM (2)		Average Annual Total Returns (Gross) (%)
Investment Team and Strategy	Investment Team and Strategy	Date	(in $MM)		1 YR	3 YR	5 YR	10 YR	Inception		Investment Team and Strategy	Date	(in $MM)		1 YR	3 YR	5 YR	10 YR	Inception
Growth Team	Growth Team										Growth Team
Global Opportunities Strategy	Global Opportunities Strategy	2/1/2007	$	18,077	(30.08)%	6.00%	7.46%	10.95%	9.73%	505	Global Opportunities Strategy	2/1/2007	$	18,957	16.18%	(0.42)%	7.95%	10.35%	10.10%	452
MSCI All Country World Index	MSCI All Country World Index				(20.66)%	3.74%	4.44%	7.28%	4.68%		MSCI All Country World Index				20.80%	6.89%	6.46%	7.55%	5.58%
Global Discovery Strategy	Global Discovery Strategy	9/1/2017	$	1,513	(32.62)%	6.93%	10.34%	---	10.45%	569	Global Discovery Strategy	9/1/2017	$	1,364	17.91%	1.14%	9.53%	---	11.65%	441
MSCI All Country World Index	MSCI All Country World Index				(20.66)%	3.74%	4.44%	---	4.76%		MSCI All Country World Index				20.80%	6.89%	6.46%	---	7.24%
U.S. Mid-Cap Growth Strategy	U.S. Mid-Cap Growth Strategy	4/1/1997	$	10,789	(35.70)%	7.37%	10.10%	11.59%	14.09%	532	U.S. Mid-Cap Growth Strategy	4/1/1997	$	11,927	13.87%	(1.27)%	8.46%	9.86%	14.08%	500
Russell Midcap® Index	Russell Midcap® Index				(19.39)%	5.18%	6.48%	10.29%	9.58%		Russell Midcap® Index				13.45%	8.09%	6.38%	8.98%	9.73%
Russell Midcap® Growth Index	Russell Midcap® Growth Index				(29.50)%	4.26%	7.62%	10.85%	8.77%		Russell Midcap® Growth Index				17.47%	2.61%	6.97%	9.94%	9.08%
U.S. Small-Cap Growth Strategy	U.S. Small-Cap Growth Strategy	4/1/1995	$	3,140	(37.41)%	3.63%	9.42%	11.55%	10.22%	315	U.S. Small-Cap Growth Strategy	4/1/1995	$	3,033	7.72%	(5.30)%	4.36%	9.14%	10.13%	298
Russell 2000® Index	Russell 2000® Index				(23.50)%	4.28%	3.55%	8.55%	8.41%		Russell 2000® Index				8.93%	7.16%	2.39%	6.64%	8.42%
Russell 2000® Growth Index	Russell 2000® Growth Index				(29.27)%	2.93%	3.59%	8.80%	7.07%		Russell 2000® Growth Index				9.59%	1.09%	1.55%	6.71%	7.15%
Global Equity Team	Global Equity Team										Global Equity Team
Global Equity Strategy	Global Equity Strategy	4/1/2010	$	440	(30.68)%	1.12%	5.75%	9.26%	9.90%	299	Global Equity Strategy	4/1/2010	$	375	18.61%	(0.04)%	5.80%	8.53%	10.52%	264
MSCI All Country World Index	MSCI All Country World Index				(20.66)%	3.74%	4.44%	7.28%	6.91%		MSCI All Country World Index				20.80%	6.89%	6.46%	7.55%	7.88%
Non-U.S. Growth Strategy	Non-U.S. Growth Strategy	1/1/1996	$	12,092	(28.06)%	(3.35)%	0.53%	4.57%	8.53%	466	Non-U.S. Growth Strategy	1/1/1996	$	12,461	22.73%	1.00%	3.56%	4.41%	9.01%	443
MSCI EAFE Index	MSCI EAFE Index				(25.13)%	(1.83)%	(0.84)%	3.67%	3.87%		MSCI EAFE Index				25.65%	5.75%	3.24%	3.82%	4.58%
Non-U.S. Small-Mid Growth Strategy	Non-U.S. Small-Mid Growth Strategy	1/1/2019	$	6,193	(31.69)%	3.53%	---		8.38%	662	Non-U.S. Small-Mid Growth Strategy	1/1/2019	$	6,629	13.03%	(1.13)%	---		9.34%	400
MSCI All Country World Index Ex USA Small Mid Cap	MSCI All Country World Index Ex USA Small Mid Cap				(28.85)%	(1.28)%	---		1.76%		MSCI All Country World Index Ex USA Small Mid Cap				19.95%	3.24%	---		5.34%
China Post-Venture Strategy	China Post-Venture Strategy	4/1/2021	$	161	(37.59)%	---			(28.73)%	367	China Post-Venture Strategy	4/1/2021	$	161	4.19%	---			(17.05)%	330
MSCI China SMID Cap Index	MSCI China SMID Cap Index				(39.51)%	---			(32.40)%		MSCI China SMID Cap Index				1.89%	---			(20.35)%
U.S. Value Team	U.S. Value Team										U.S. Value Team
Value Equity Strategy	Value Equity Strategy	7/1/2005	$	3,374	(15.37)%	6.65%	5.92%	9.05%	7.89%	105	Value Equity Strategy	7/1/2005	$	3,722	29.94%	16.06%	9.39%	9.90%	8.99%	175
Russell 1000® Index	Russell 1000® Index				(17.22)%	7.94%	8.99%	11.60%	8.77%		Russell 1000® Index				21.19%	9.53%	9.62%	11.62%	9.42%
Russell 1000® Value Index	Russell 1000® Value Index				(11.36)%	4.36%	5.28%	9.17%	6.84%		Russell 1000® Value Index				14.44%	11.05%	6.22%	8.44%	7.24%
U.S. Mid-Cap Value Strategy	U.S. Mid-Cap Value Strategy	4/1/1999	$	2,743	(14.28)%	5.05%	4.64%	8.49%	11.49%	261	U.S. Mid-Cap Value Strategy	4/1/1999	$	2,642	17.50%	13.85%	6.08%	7.13%	11.73%	276
Russell Midcap® Index	Russell Midcap® Index				(19.39)%	5.18%	6.48%	10.29%	8.79%		Russell Midcap® Index				13.45%	8.09%	6.38%	8.98%	8.97%
Russell Midcap® Value Index	Russell Midcap® Value Index				(13.56)%	4.49%	4.75%	9.43%	8.88%		Russell Midcap® Value Index				11.05%	10.98%	5.18%	7.91%	8.97%
Value Income Strategy	Value Income Strategy	3/1/2022	$	9	---				(16.34)%	89	Value Income Strategy	3/1/2022	$	11	11.71%	---			(4.18)%	(459)
S&P 500 Market Index	S&P 500 Market Index				---				(17.23)%		S&P 500 Market Index				21.62%	---			0.41%
International Value Team	International Value Team										International Value Team
International Value Strategy	International Value Strategy	7/1/2002	$	26,602	(17.39)%	3.96%	2.51%	7.64%	10.34%	565	International Value Strategy	7/1/2002	$	36,401	33.22%	14.98%	8.74%	7.72%	11.32%	573
MSCI EAFE Index	MSCI EAFE Index				(25.13)%	(1.83)%	(0.84)%	3.67%	4.69%		MSCI EAFE Index				25.65%	5.75%	3.24%	3.82%	5.59%
International Explorer	International Explorer	11/1/2020	$	45	(22.68)%	---			7.82%	932	International Explorer	11/1/2020	$	201	22.30%	---			12.58%	748
MSCI All Country World Index Ex USA Small Cap	MSCI All Country World Index Ex USA Small Cap				(28.93)%	---			(1.50)%		MSCI All Country World Index Ex USA Small Cap				19.01%	---			5.10%
Global Value Team	Global Value Team										Global Value Team
Global Value Strategy	Global Value Strategy	7/1/2007	$	19,745	(20.21)%	1.52%	2.13%	7.86%	6.84%	261	Global Value Strategy	7/1/2007	$	22,398	29.51%	12.35%	6.39%	8.00%	8.11%	293
MSCI All Country World Index	MSCI All Country World Index				(20.66)%	3.74%	4.44%	7.28%	4.23%		MSCI All Country World Index				20.80%	6.89%	6.46%	7.55%	5.18%
Select Equity Strategy	Select Equity Strategy	3/1/2020	$	319	(22.12)%	---			2.93%	(658)	Select Equity Strategy	3/1/2020	$	308	26.13%	9.65%	---		8.94%	(382)
S&P 500 Market Index	S&P 500 Market Index				(15.47)%	---			9.51%		S&P 500 Market Index				21.62%	10.15%	---		12.76%
Sustainable Emerging Markets Team	Sustainable Emerging Markets Team										Sustainable Emerging Markets Team
Sustainable Emerging Markets Strategy	Sustainable Emerging Markets Strategy	7/1/2006	$	854	(33.62)%	(3.58)%	(1.78)%	2.13%	3.75%	34	Sustainable Emerging Markets Strategy	7/1/2006	$	796	20.95%	(0.87)%	2.30%	4.17%	4.67%	79
MSCI Emerging Markets Index	MSCI Emerging Markets Index				(28.11)%	(2.06)%	(1.81)%	1.05%	3.41%		MSCI Emerging Markets Index				11.70%	(1.73)%	0.55%	2.07%	3.88%
Credit Team	Credit Team										Credit Team
High Income Strategy	High Income Strategy	4/1/2014	$	6,856	(10.35)%	2.98%	4.09%	---	5.75%	281	High Income Strategy	4/1/2014	$	8,387	11.59%	4.72%	5.22%	---	6.34%	266
ICE BofA US High Yield Master II Total Return Index					(14.06)%	(0.67)%	1.41%	---	2.94%
ICE BofA US High Yield Index											ICE BofA US High Yield Index				10.19%	1.82%	2.80%	---	3.68%
Credit Opportunities Strategy	Credit Opportunities Strategy	7/1/2017	$	133	(1.71)%	14.89%	11.22%	---	11.59%	1,027	Credit Opportunities Strategy	7/1/2017	$	199	18.64%	15.04%	12.96%	---	12.69%	1,087
ICE BofA US Dollar LIBOR 3-month Constant Maturity Index					0.41%	0.73%	1.32%	---	1.32%
ICE BofA US Dollar 3-Month Deposit Offered Rate Constant Maturity Index											ICE BofA US Dollar 3-Month Deposit Offered Rate Constant Maturity Index				4.54%	1.70%	1.86%	---	1.82%
Floating Rate Strategy	Floating Rate Strategy	1/1/2022	$	47	---				(2.96)%	35	Floating Rate Strategy	1/1/2022	$	52	14.36%	---			6.14%	123
Credit Suisse Leveraged Loan Total Return Index	Credit Suisse Leveraged Loan Total Return Index				---				(3.31)%		Credit Suisse Leveraged Loan Total Return Index				12.47%	---			4.91%

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Developing World Team	Developing World Team										Developing World Team
Developing World Strategy	Developing World Strategy	7/1/2015	$	3,649	(47.70)%	2.21%	3.49%	---	6.43%	547	Developing World Strategy	7/1/2015	$	3,223	23.82%	(8.56)%	10.00%	---	8.40%	620
MSCI Emerging Markets Index	MSCI Emerging Markets Index				(28.11)%	(2.06)%	(1.81)%	---	0.96%		MSCI Emerging Markets Index				11.70%	(1.73)%	0.55%	---	2.20%
Antero Peak Group	Antero Peak Group										Antero Peak Group
Antero Peak Strategy	Antero Peak Strategy	5/1/2017	$	2,953	(19.55)%	8.01%	14.11%	---	16.32%	654	Antero Peak Strategy	5/1/2017	$	2,055	10.26%	4.17%	9.57%	---	15.36%	382
S&P 500 Market Index	S&P 500 Market Index				(15.47)%	8.15%	9.23%	---	9.78%		S&P 500 Market Index				21.62%	10.15%	9.91%	---	11.54%
Antero Peak Hedge Strategy	Antero Peak Hedge Strategy	11/1/2017	$	807	(16.64)%	6.01%	---		10.30%	141	Antero Peak Hedge Strategy	11/1/2017	$	400	5.36%	1.72%	7.14%	---	9.45%	(149)
S&P 500 Market Index	S&P 500 Market Index				(15.47)%	8.15%	---		8.89%		S&P 500 Market Index				21.62%	10.15%	9.91%	---	10.94%
EMsights Capital Group	EMsights Capital Group										EMsights Capital Group
Global Unconstrained Strategy	Global Unconstrained Strategy	4/1/2022	$	15	---				3.00%	243	Global Unconstrained Strategy	4/1/2022	$	296	12.66%	---			10.43%	708
ICE BofA 3-month Treasury Bill Index	ICE BofA 3-month Treasury Bill Index				---				0.57%		ICE BofA 3-month Treasury Bill Index				4.47%	---			3.35%
Emerging Markets Debt Opportunities Strategy	Emerging Markets Debt Opportunities Strategy	5/1/2022	$	41	---				(0.18)%	766	Emerging Markets Debt Opportunities Strategy	5/1/2022	$	81	17.56%	---			11.96%	1,025
J.P. Morgan EMB Hard Currency/Local currency 50-50 Index	J.P. Morgan EMB Hard Currency/Local currency 50-50 Index				---				(7.84)%		J.P. Morgan EMB Hard Currency/Local currency 50-50 Index				11.15%	---			1.71%
Emerging Markets Local Opportunities Strategy	Emerging Markets Local Opportunities Strategy	8/1/2022	$	10	---				(3.81)%	119	Emerging Markets Local Opportunities Strategy	8/1/2022	$	416	15.77%	---			9.66%	332
J.P. Morgan GBI-EM Global Diversified	J.P. Morgan GBI-EM Global Diversified				---				(5.00)%		J.P. Morgan GBI-EM Global Diversified				13.10%	---			6.34%

Total Assets Under Management	Total Assets Under Management		$	120,607							Total Assets Under Management		$	136,495

1 Value-added is the amount, in basis points, by which the average annual gross composite return of each of our strategies has outperformed or underperformed its respective benchmark. The High Income strategy holds loans and other security types that are not included in its benchmark, which, at times, causes material differences in relative performance. The Credit Opportunities strategy is benchmark agnostic and has been compared to the 3-month LIBOR for reference purposes only. The Antero Peak and Antero Peak Hedge strategies' investments in initial public offerings (IPOs) made a material contribution to performance. IPO investments may contribute significantly to a small portfolio’s return, an effect that will generally decrease as assets grow. IPO investments may be unavailable in the future.
2 AUM for certain strategies include the following amounts for which Artisan Partners provides investment models to managed account sponsors (reported on a one-month lag): Artisan Sustainable Emerging Markets $76 million.
1 Value-added is the amount, in basis points, by which the average annual gross composite return of each strategy has outperformed or underperformed its respective benchmark.											1 Value-added is the amount, in basis points, by which the average annual gross composite return of each strategy has outperformed or underperformed its respective benchmark.
2 AUM for certain strategies include the following amounts for which Artisan Partners provides investment models to managed account sponsors (reported on a one-month lag): Artisan Sustainable Emerging Markets $55 million.											2 AUM for certain strategies include the following amounts for which Artisan Partners provides investment models to managed account sponsors (reported on a one-month lag): Artisan Sustainable Emerging Markets $55 million.

Table of Contents

The tables below set forth changes in our assets under management by investment team:


				By Investment Team																							By Investment Team
Three Months Ended	Three Months Ended	Growth		Global Equity		U.S. Value		International Value		Global Value		Sustainable Emerging Markets		Credit		Developing World		Antero Peak Group		EMsights Capital Group		Total		Three Months Ended	Growth		Global Equity		U.S. Value		International Value		Global Value		Sustainable Emerging Markets		Credit		Developing World		Antero Peak Group		EMsights Capital Group		Total
September 30, 2022				(unaudited; in millions)
September 30, 2023																								September 30, 2023			(unaudited; in millions)
Beginning assets under management	Beginning assets under management	$	33,964	$	21,643	$	6,775	$	29,391	$	22,390	$	1,003	$	7,085	$	4,136	$	4,126	$	34	$	130,547	Beginning assets under management	$	38,586	$	21,109	$	6,648	$	36,786	$	23,974	$	873	$	8,198	$	3,572	$	3,129	$	114	$	142,989
Gross client cash inflows	Gross client cash inflows	2,996		549		65		1,257		834		27		712		235		192		31		6,898		Gross client cash inflows	1,181		311		84		1,957		376		17		799		131		43		702		5,601
Gross client cash outflows	Gross client cash outflows	(2,319)		(1,807)		(296)		(1,185)		(936)		(62)		(655)		(378)		(333)		—		(7,971)		Gross client cash outflows	(2,755)		(662)		(212)		(1,123)		(952)		(58)		(422)		(228)		(527)		(1)		(6,940)
Net client cash flows (1)	Net client cash flows (1)	677		(1,258)		(231)		72		(102)		(35)		57		(143)		(141)		31		(1,073)		Net client cash flows (1)	(1,574)		(351)		(128)		834		(576)		(41)		377		(97)		(484)		701		(1,339)
Artisan Funds' distributions not reinvested (2)	Artisan Funds' distributions not reinvested (2)	—		—		—		(33)		—		—		(48)		—		—		—		(81)		Artisan Funds' distributions not reinvested (2)	—		—		—		—		—		—		(75)		—		—		—		(75)
Investment returns and other	Investment returns and other	(1,122)		(1,499)		(418)		(2,783)		(2,224)		(114)		(58)		(344)		(225)		1		(8,786)		Investment returns and other	(1,731)		(1,132)		(145)		(1,018)		(692)		(36)		138		(252)		(190)		(22)		(5,080)

Ending assets under management	Ending assets under management	$	33,519	$	18,886	$	6,126	$	26,647	$	20,064	$	854	$	7,036	$	3,649	$	3,760	$	66	$	120,607	Ending assets under management	$	35,281	$	19,626	$	6,375	$	36,602	$	22,706	$	796	$	8,638	$	3,223	$	2,455	$	793	$	136,495
Average assets under management	Average assets under management	$	36,491	$	21,362	$	6,937	$	29,231	$	22,203	$	963	$	7,241	$	4,231	$	4,229	$	58	$	132,946	Average assets under management	$	37,406	$	20,762	$	6,655	$	37,286	$	23,780	$	874	$	8,474	$	3,488	$	2,917	$	557	$	142,199
September 30, 2021
September 30, 2022																								September 30, 2022
Beginning assets under management	Beginning assets under management	$	53,517	$	34,166	$	7,929	$	29,720	$	26,515	$	998	$	7,785	$	10,314	$	4,270	$	—	$	175,214	Beginning assets under management	$	33,964	$	21,643	$	6,775	$	29,391	$	22,390	$	1,003	$	7,085	$	4,136	$	4,126	$	34	$	130,547
Gross client cash inflows	Gross client cash inflows	1,125		955		68		1,943		885		86		819		733		328		—		6,942		Gross client cash inflows	2,996		549		65		1,257		834		27		712		235		192		31		6,898
Gross client cash outflows	Gross client cash outflows	(2,631)		(1,143)		(150)		(874)		(816)		(7)		(383)		(770)		(157)		—		(6,931)		Gross client cash outflows	(2,319)		(1,807)		(296)		(1,185)		(936)		(62)		(655)		(378)		(333)		—		(7,971)
Net client cash flows (1)	Net client cash flows (1)	(1,506)		(188)		(82)		1,069		69		79		436		(37)		171		—		11		Net client cash flows (1)	677		(1,258)		(231)		72		(102)		(35)		57		(143)		(141)		31		(1,073)
Artisan Funds' distributions not reinvested (2)	Artisan Funds' distributions not reinvested (2)	—		—		—		—		—		—		(39)		—		—		—		(39)		Artisan Funds' distributions not reinvested (2)	—		—		—		(33)		—		—		(48)		—		—		—		(81)
Investment returns and other	Investment returns and other	1,169		(161)		(68)		(814)		(811)		(95)		76		(944)		85		—		(1,563)		Investment returns and other	(1,122)		(1,499)		(418)		(2,783)		(2,224)		(114)		(58)		(344)		(225)		1		(8,786)

Ending assets under management	Ending assets under management	$	53,180	$	33,817	$	7,779	$	29,975	$	25,773	$	982	$	8,258	$	9,333	$	4,526	$	—	$	173,623	Ending assets under management	$	33,519	$	18,886	$	6,126	$	26,647	$	20,064	$	854	$	7,036	$	3,649	$	3,760	$	66	$	120,607
Average assets under management	Average assets under management	$	54,948	$	34,706	$	7,944	$	30,320	$	26,200	$	1,010	$	8,041	$	9,732	$	4,656	$	—	$	177,557	Average assets under management	$	36,491	$	21,362	$	6,937	$	29,231	$	22,203	$	963	$	7,241	$	4,231	$	4,229	$	58	$	132,946
(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.	(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.																							(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.
(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.	(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.																							(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.

Table of Contents


				By Investment Team																							By Investment Team
Nine Months Ended	Nine Months Ended	Growth		Global Equity		U.S. Value		International Value		Global Value		Sustainable Emerging Markets		Credit		Developing World		Antero Peak Group		EMsights Capital Group		Total		Nine Months Ended	Growth		Global Equity		U.S. Value		International Value		Global Value		Sustainable Emerging Markets		Credit		Developing World		Antero Peak Group		EMsights Capital Group		Total
September 30, 2023																								September 30, 2023			(unaudited; in millions)
Beginning assets under management																								Beginning assets under management	$	33,977	$	20,623	$	6,088	$	30,210	$	21,767	$	873	$	7,140	$	3,466	$	3,676	$	72	$	127,892
Gross client cash inflows																								Gross client cash inflows	2,905		1,196		195		6,149		1,304		63		2,542		488		311		736		15,889
Gross client cash outflows																								Gross client cash outflows	(5,093)		(2,870)		(556)		(3,222)		(3,130)		(217)		(1,506)		(1,277)		(1,695)		(1)		(19,567)
Net client cash flows (1)																								Net client cash flows (1)	(2,188)		(1,674)		(361)		2,927		(1,826)		(154)		1,036		(789)		(1,384)		735		(3,678)
Artisan Funds' distributions not reinvested (2)																								Artisan Funds' distributions not reinvested (2)	—		—		—		—		—		—		(190)		—		—		—		(190)
Investment returns and other																								Investment returns and other	3,492		677		648		3,465		2,765		77		652		546		163		(14)		12,471
Net transfers(3)																								Net transfers(3)	—		—		—		—		—		—		—		—		—		—		$	—
Ending assets under management																								Ending assets under management	$	35,281	$	19,626	$	6,375	$	36,602	$	22,706	$	796	$	8,638	$	3,223	$	2,455	$	793	$	136,495
Average assets under management																								Average assets under management	$	36,812	$	21,167	$	6,489	$	35,210	$	23,203	$	882	$	8,118	$	3,593	$	3,260	$	248	$	138,982
September 30, 2022	September 30, 2022			(unaudited; in millions)																				September 30, 2022
Beginning assets under management	Beginning assets under management	$	52,434	$	32,998	$	8,053	$	31,816	$	26,744	$	1,173	$	8,157	$	8,102	$	5,277	$	—	$	174,754	Beginning assets under management	$	52,434	$	32,998	$	8,053	$	31,816	$	26,744	$	1,173	$	8,157	$	8,102	$	5,277	—		$	174,754
Gross client cash inflows	Gross client cash inflows	6,008		2,805		450		5,906		2,404		243		2,111		1,431		974		65		22,397		Gross client cash inflows	6,008		2,805		450		5,906		2,404		243		2,111		1,431		974		65		22,397
Gross client cash outflows	Gross client cash outflows	(6,771)		(7,232)		(814)		(3,798)		(2,698)		(133)		(2,169)		(2,451)		(952)		—		(27,018)		Gross client cash outflows	(6,771)		(7,232)		(814)		(3,798)		(2,698)		(133)		(2,169)		(2,451)		(952)		—		(27,018)
Net client cash flows (1)	Net client cash flows (1)	(763)		(4,427)		(364)		2,108		(294)		110		(58)		(1,020)		22		65		(4,621)		Net client cash flows (1)	(763)		(4,427)		(364)		2,108		(294)		110		(58)		(1,020)		22		65		(4,621)
Artisan Funds' distributions not reinvested (2)	Artisan Funds' distributions not reinvested (2)	—		—		—		(33)		—		—		(136)		—		—		—		(169)		Artisan Funds' distributions not reinvested (2)	—		—		—		(33)		—		—		(136)		—		—		—		(169)
Investment returns and other	Investment returns and other	(18,152)		(9,685)		(1,563)		(7,244)		(6,386)		(429)		(927)		(3,433)		(1,539)		1		(49,357)		Investment returns and other	(18,152)		(9,685)		(1,563)		(7,244)		(6,386)		(429)		(927)		(3,433)		(1,539)		1		(49,357)

Net transfers(3)																								Net transfers(3)	—		—		—		—		—		—		—		—		—		—		$	—
Ending assets under management	Ending assets under management	$	33,519	$	18,886	$	6,126	$	26,647	$	20,064	$	854	$	7,036	$	3,649	$	3,760	$	66	$	120,607	Ending assets under management	$	33,519	$	18,886	$	6,126	$	26,647	$	20,064	$	854	$	7,036	$	3,649	$	3,760	$	66	$	120,607
Average assets under management (3)		$	39,888	$	25,249	$	7,405	$	30,858	$	24,306	$	1,030	$	7,674	$	5,289	$	4,514	$	45	$	146,244
September 30, 2021
Beginning assets under management		$	52,685	$	32,056	$	7,149	$	24,123	$	22,417	$	679	$	6,338	$	8,853	$	3,476	$	—	$	157,776
Gross client cash inflows		5,324		3,625		257		5,990		3,781		367		2,643		2,811		1,016		—		25,814
Gross client cash outflows		(9,180)		(3,789)		(918)		(3,138)		(2,938)		(33)		(1,021)		(2,002)		(332)		—		(23,351)
Net client cash flows (1)		(3,856)		(164)		(661)		2,852		843		334		1,622		809		684		—		2,463
Artisan Funds' distributions not reinvested (2)		—		—		—		—		—		—		(114)		—		—		—		(114)
Investment returns and other		4,351		1,925		1,291		3,000		2,513		(31)		412		(329)		366		—		13,498

Ending assets under management		$	53,180	$	33,817	$	7,779	$	29,975	$	25,773	$	982	$	8,258	$	9,333	$	4,526	$	—	$	173,623
Average assets under management		$	53,250	$	33,738	$	7,785	$	28,377	$	25,096	$	874	$	7,370	$	9,691	$	4,199	$	—	$	170,380
Average assets under management (4)																								Average assets under management (4)	$	39,888	$	25,249	$	7,405	$	30,858	$	24,306	$	1,030	$	7,674	$	5,289	$	4,514	$	45	$	146,244
(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.	(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.																							(1) Net client cash flows excludes Artisan Funds' income and capital gain distributions that were not reinvested.
(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.	(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.																							(2) Artisan Funds' distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
(3) For the EMsights Capital Group, average assets under management is for the period beginning March 31, 2022, when the team’s first strategy began investment operations.
(3) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle or account and into another strategy, vehicle or account.																								(3) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle or account and into another strategy, vehicle or account.
(4) For the EMsights Capital Group, average assets under management is for the period beginning March 31, 2022, when the team’s first strategy began investment operations.																								(4) For the EMsights Capital Group, average assets under management is for the period beginning March 31, 2022, when the team’s first strategy began investment operations.

The goal of our marketing, distribution and client services efforts is to establish and maintain a client base that is diversified by investment strategy, client type and distribution channel. As distribution channels have evolved to have more institutional-like decision making processes and longer-term investment horizons, we have expanded our distribution efforts into those areas.

The table below sets forth our assets under management by distribution channel (1):


		As of September 30, 2022				As of September 30, 2021					As of September 30, 2023				As of September 30, 2022
		$ in Millions		% of Total		$ in Millions		% of Total			$ in Millions		% of Total		$ in Millions		% of Total
		(unaudited)				(unaudited)					(unaudited)				(unaudited)
Institutional	Institutional	$	76,780	63.6	%	$	109,721	63.2	%	Institutional	$	85,770	62.8	%	$	76,780	63.6	%
Intermediary	Intermediary	38,561		32.0	%	55,912		32.2	%	Intermediary	45,435		33.3	%	38,561		32.0	%
Retail	Retail	5,266		4.4	%	7,990		4.6	%	Retail	5,290		3.9	%	5,266		4.4	%
Ending Assets Under Management	Ending Assets Under Management	$	120,607	100.0	%	$	173,623	100.0	%	Ending Assets Under Management	$	136,495	100.0	%	$	120,607	100.0	%

(1) The allocation of assets under management by distribution channel involves the use of estimates and the exercise of judgment.	(1) The allocation of assets under management by distribution channel involves the use of estimates and the exercise of judgment.									(1) The allocation of assets under management by distribution channel involves the use of estimates and the exercise of judgment.

Our institutional channel includes assets under management sourced from defined contribution plan clients, which made up approximately ~~10%~~9% of our total assets under management as of September 30, ~~2022.~~

2023.

Table of Contents

The following tables set forth the changes in our assets under management by vehicle type:


Three Months Ended	Three Months Ended	Artisan Funds & Artisan Global Funds		Separate Accounts and Other (1)		Total		Three Months Ended	Artisan Funds & Artisan Global Funds		Separate Accounts and Other (1)		Total
September 30, 2022		(unaudited; in millions)
September 30, 2023								September 30, 2023	(unaudited; in millions)
Beginning assets under management	Beginning assets under management	$	63,033	$	67,514	$	130,547	Beginning assets under management	$	69,144	$	73,845	$	142,989
Gross client cash inflows	Gross client cash inflows	3,784		3,114		6,898		Gross client cash inflows	3,313		2,288		5,601
Gross client cash outflows	Gross client cash outflows	(4,607)		(3,364)		(7,971)		Gross client cash outflows	(3,440)		(3,500)		(6,940)
Net client cash flows (2)	Net client cash flows (2)	(823)		(250)		(1,073)		Net client cash flows (2)	(127)		(1,212)		(1,339)
Artisan Funds' distributions not reinvested (3)	Artisan Funds' distributions not reinvested (3)	(81)		—		(81)		Artisan Funds' distributions not reinvested (3)	(75)		—		(75)
Investment returns and other	Investment returns and other	(4,141)		(4,645)		(8,786)		Investment returns and other	(2,297)		(2,783)		(5,080)
Net transfers (4)	Net transfers (4)	(149)		149		—		Net transfers (4)	(15)		15		—
Ending assets under management	Ending assets under management	$	57,839	$	62,768	$	120,607	Ending assets under management	$	66,630	$	69,865	$	136,495
Average assets under management	Average assets under management	$	63,978	$	68,968	$	132,946	Average assets under management	$	69,042	$	73,157	$	142,199
September 30, 2021
September 30, 2022								September 30, 2022
Beginning assets under management	Beginning assets under management	$	85,687	$	89,527	$	175,214	Beginning assets under management	$	63,033	$	67,514	$	130,547
Gross client cash inflows	Gross client cash inflows	5,293		1,649		6,942		Gross client cash inflows	3,784		3,114		6,898
Gross client cash outflows	Gross client cash outflows	(4,089)		(2,842)		(6,931)		Gross client cash outflows	(4,607)		(3,364)		(7,971)
Net client cash flows (2)	Net client cash flows (2)	1,204		(1,193)		11		Net client cash flows (2)	(823)		(250)		(1,073)
Artisan Funds' distributions not reinvested (3)	Artisan Funds' distributions not reinvested (3)	(39)		—		(39)		Artisan Funds' distributions not reinvested (3)	(81)		—		(81)
Investment returns and other	Investment returns and other	(1,236)		(327)		(1,563)		Investment returns and other	(4,141)		(4,645)		(8,786)
Net transfers (4)	Net transfers (4)	(224)		224		—		Net transfers (4)	(149)		149		—
Ending assets under management	Ending assets under management	$	85,392	$	88,231	$	173,623	Ending assets under management	$	57,839	$	62,768	$	120,607
Average assets under management	Average assets under management	$	86,819	$	90,738	$	177,557	Average assets under management	$	63,978	$	68,968	$	132,946

Nine months ended		Artisan Funds & Artisan Global Funds		Separate Accounts and Other (1)		Total
Nine Months Ended								Nine Months Ended	Artisan Funds & Artisan Global Funds		Separate Accounts and Other (1)		Total
September 30, 2023								September 30, 2023	(unaudited; in millions)
Beginning assets under management								Beginning assets under management	$	60,811	$	67,081	$	127,892
Gross client cash inflows								Gross client cash inflows	11,294		4,595		15,889
Gross client cash outflows								Gross client cash outflows	(11,074)		(8,493)		(19,567)
Net client cash flows (2)								Net client cash flows (2)	220		(3,898)		(3,678)
Artisan Funds' distributions not reinvested (3)								Artisan Funds' distributions not reinvested (3)	(190)		—		(190)
Investment returns and other								Investment returns and other	5,804		6,667		12,471
Net transfers (4)								Net transfers (4)	(15)		15		—
Ending assets under management								Ending assets under management	$	66,630	$	69,865	$	136,495
Average assets under management								Average assets under management	$	67,110	$	71,872	$	138,982
September 30, 2022	September 30, 2022	(unaudited; in millions)						September 30, 2022
Beginning assets under management	Beginning assets under management	$	84,363	$	90,391	$	174,754	Beginning assets under management	$	84,363	$	90,391	$	174,754
Gross client cash inflows	Gross client cash inflows	15,067		7,330		22,397		Gross client cash inflows	15,067		7,330		22,397
Gross client cash outflows	Gross client cash outflows	(17,843)		(9,175)		(27,018)		Gross client cash outflows	(17,843)		(9,175)		(27,018)
Net client cash flows (2)	Net client cash flows (2)	(2,776)		(1,845)		(4,621)		Net client cash flows (2)	(2,776)		(1,845)		(4,621)
Artisan Funds' distributions not reinvested (3)	Artisan Funds' distributions not reinvested (3)	(169)		—		(169)		Artisan Funds' distributions not reinvested (3)	(169)		—		(169)
Investment returns and other	Investment returns and other	(23,366)		(25,991)		(49,357)		Investment returns and other	(23,366)		(25,991)		(49,357)
Net transfers (4)	Net transfers (4)	(213)		213		—		Net transfers (4)	(213)		213		—
Ending assets under management	Ending assets under management	$	57,839	$	62,768	$	120,607	Ending assets under management	$	57,839	$	62,768	$	120,607
Average assets under management	Average assets under management	$	70,544	$	75,700	$	146,244	Average assets under management	$	70,544	$	75,700	$	146,244
September 30, 2021
Beginning assets under management		$	74,746	$	83,030	$	157,776
Gross client cash inflows		18,560		7,254		25,814
Gross client cash outflows		(13,115)		(10,236)		(23,351)
Net client cash flows (2)		5,445		(2,982)		2,463
Artisan Funds' distributions not reinvested (3)		(114)		—		(114)
Investment returns and other		5,617		7,881		13,498
Net transfers (4)		(302)		302		—
Ending assets under management		$	85,392	$	88,231	$	173,623
Average assets under management		$	82,721	$	87,659	$	170,380

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(1) Separate accounts and other consists of AUM we manage in or through vehicles other than Artisan Funds or Artisan Global Funds. This AUM includes assets we manage in traditional separate accounts, ~~as well as assets we manage in~~ Artisan-branded collective investment trusts and in Artisan Private ~~Funds. As of September 30, 2022, AUM for certain strategies include the following amounts~~Funds, as well as assets under advisement related to investment models for which ~~Artisan Partners provides~~we provide consulting advice but do not have discretionary investment ~~models to managed account sponsors (reported on a one-month lag): Artisan Sustainable Emerging Markets $76 million.~~authority.

(2) Net client cash flows excludes Artisan Funds’ income and capital gain distributions that were not reinvested.

(3) Artisan Funds’ distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.

(4) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle or account and into another strategy, vehicle or account.

The following table sets forth our assets under management by asset class:


Three Months Ended	Equity (1)		Fixed Income (1)		Alternative (1)		Total
September 30, 2023	(unaudited; in millions)
Beginning assets under management	$	131,384	$	8,103	$	3,502	$	142,989
Gross client cash inflows	4,056		1,225		320		5,601
Gross client cash outflows	(5,990)		(422)		(528)		(6,940)
Net client cash flows (2)	(1,934)		803		(208)		(1,339)
Artisan Funds' distributions not reinvested (3)	—		(75)		—		(75)
Investment returns and other	(5,002)		104		(182)		(5,080)
Net transfers (4)	—		—		—		—
Ending assets under management	$	124,448	$	8,935	$	3,112	$	136,495
Average assets under management	$	130,084	$	8,787	$	3,328	$	142,199
September 30, 2022
Beginning assets under management	$	119,101	$	6,974	$	4,472	$	130,547
Gross client cash inflows	5,962		738		198		6,898
Gross client cash outflows	(6,983)		(653)		(335)		(7,971)
Net client cash flows (2)	(1,021)		85		(137)		(1,073)
Artisan Funds' distributions not reinvested (3)	(33)		(48)		—		(81)
Investment returns and other	(8,464)		(57)		(265)		(8,786)
Net transfers (4)	—		—		—		—
Ending assets under management	$	109,583	$	6,954	$	4,070	$	120,607
Average assets under management	$	121,231	$	7,148	$	4,567	$	132,946


Nine Months Ended	Equity (1)		Fixed Income (1)		Alternative (1)		Total
September 30, 2023	(unaudited; in millions)
Beginning assets under management	$	116,832	$	7,059	$	4,001	$	127,892
Gross client cash inflows	12,299		2,962		628		15,889
Gross client cash outflows	(16,365)		(1,504)		(1,698)		(19,567)
Net client cash flows (2)	(4,066)		1,458		(1,070)		(3,678)
Artisan Funds' distributions not reinvested (3)	—		(190)		—		(190)
Investment returns and other	11,682		608		181		12,471
Net transfers (4)	—		—		—		—
Ending assets under management	$	124,448	$	8,935	$	3,112	$	136,495
Average assets under management	$	127,181	$	8,165	$	3,636	$	138,982
September 30, 2022
Beginning assets under management	$	161,083	$	8,037	$	5,634	$	174,754
Gross client cash inflows	19,235		2,135		1,027		22,397
Gross client cash outflows	(23,895)		(2,158)		(965)		(27,018)
Net client cash flows (2)	(4,660)		(23)		62		(4,621)

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Artisan Funds' distributions not reinvested (3)	(33)		(136)		—		(169)
Investment returns and other	(46,807)		(924)		(1,626)		(49,357)
Net transfers (4)	—		—		—		—
Ending assets under management	$	109,583	$	6,954	$	4,070	$	120,607
Average assets under management	$	133,827	$	7,562	$	4,855	$	146,244

(1) Equity includes the following investment strategies: Mid-Cap Growth, Small-Cap Growth, Mid-Cap Value, Non-U.S. Growth, International Value, Global Opportunities, Global Equity, Value Equity, Global Value, Sustainable Emerging Markets, Global Discovery, Developing World, Non-U.S. Small-Mid Growth, International Explorer, Select Equity, and Value Income. Fixed Income includes the following investment strategies: High Income, Floating Rate, Emerging Markets Debt Opportunities, and Emerging Markets Local Opportunities. Alternative includes the following investment strategies: Antero Peak, Antero Peak Hedge, China Post-Venture, Credit Opportunities, and Global Unconstrained.
(2) Net client cash flows excludes Artisan Funds’ income and capital gain distributions that were not reinvested.
(3) Artisan Funds’ distributions not reinvested represents the amount of income and capital gain distributions that were not reinvested in the Artisan Funds.
(4) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy, investment vehicle or account and into another strategy, vehicle or account.

Results of Operations

Three months ended September 30, ~~2022,~~2023, compared to Three months ended September 30, ~~2021~~2022


		For the Three Months Ended September 30,				For the Period-to-Period					For the Three Months Ended September 30,				For the Period-to-Period
		2022		2021		$		%			2023		2022		$		%
Statements of operations data:	Statements of operations data:	(unaudited; in millions, except share and per-share data)								Statements of operations data:	(unaudited; in millions, except share and per-share data)
Revenues	Revenues	$	234.3	$	316.6	$	(82.3)	(26)	%	Revenues	$	248.7	$	234.3	$	14.4	6	%
Operating Expenses	Operating Expenses									Operating Expenses
Total compensation and benefits	Total compensation and benefits	122.1		142.2		(20.1)		(14)	%	Total compensation and benefits	130.7		122.1		8.6		7	%

Other operating expenses	Other operating expenses	33.5		31.3		2.2		7	%	Other operating expenses	35.8		33.5		2.3		7	%
Total operating expenses	Total operating expenses	155.6		173.5		(17.9)		(10)	%	Total operating expenses	166.5		155.6		10.9		7	%
Total operating income	Total operating income	78.7		143.1		(64.4)		(45)	%	Total operating income	82.2		78.7		3.5		4	%
Non-operating income (expense)	Non-operating income (expense)									Non-operating income (expense)
Interest expense	Interest expense	(2.5)		(2.7)		0.2		7	%	Interest expense	(2.3)		(2.5)		0.2		8	%

Other non-operating income (expense)	Other non-operating income (expense)	(8.9)		1.0		(9.9)		(990)	%	Other non-operating income (expense)	8.1		(8.9)		17.0		191	%
Total non-operating income (expense)	Total non-operating income (expense)	(11.4)		(1.7)		(9.7)		(571)	%	Total non-operating income (expense)	5.8		(11.4)		17.2		151	%
Income before income taxes	Income before income taxes	67.3		141.4		(74.1)		(52)	%	Income before income taxes	88.0		67.3		20.7		31	%
Provision for income taxes	Provision for income taxes	14.8		28.0		(13.2)		(47)	%	Provision for income taxes	14.6		14.8		(0.2)		(1)	%
Net income before noncontrolling interests	Net income before noncontrolling interests	52.5		113.4		(60.9)		(54)	%	Net income before noncontrolling interests	73.4		52.5		20.9		40	%
Less: Noncontrolling interests - Artisan Partners Holdings	Less: Noncontrolling interests - Artisan Partners Holdings	11.0		24.8		(13.8)		(56)	%	Less: Noncontrolling interests - Artisan Partners Holdings	11.3		11.0		0.3		3	%
Less: Noncontrolling interests - consolidated investment products	Less: Noncontrolling interests - consolidated investment products	(2.7)		2.2		(4.9)		(223)	%	Less: Noncontrolling interests - consolidated investment products	9.0		(2.7)		11.7		433	%
Net income attributable to Artisan Partners Asset Management Inc.	Net income attributable to Artisan Partners Asset Management Inc.	$	44.2	$	86.4	$	(42.2)	(49)	%	Net income attributable to Artisan Partners Asset Management Inc.	$	53.1	$	44.2	$	8.9	20	%
Share Data	Share Data									Share Data
Basic earnings per share	Basic earnings per share	$	0.65	$	1.30					Basic earnings per share	$	0.76	$	0.65
Diluted earnings per share	Diluted earnings per share	$	0.65	$	1.30					Diluted earnings per share	$	0.76	$	0.65
Basic weighted average number of common shares outstanding	Basic weighted average number of common shares outstanding	62,623,434		59,965,549						Basic weighted average number of common shares outstanding	63,520,402		62,623,434
Diluted weighted average number of common shares outstanding	Diluted weighted average number of common shares outstanding	62,632,660		59,982,774						Diluted weighted average number of common shares outstanding	63,563,044		62,632,660

Investment Advisory Revenues

Essentially all of our revenues consist of fees earned from managing clients’ assets. ~~Our investment~~Investment advisory fees, which are comprised of management fees and performance fees, fluctuate based on a number of factors, including the total value of our assets under management, the composition of assets under management among investment vehicles and our investment strategies, changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and, for the accounts on which we earn performance fees, the investment performance of those accounts.

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The different fee structures associated with Artisan Funds, Artisan Global Funds and separate accounts and other pooled vehicles, and the different fee schedules applicable to each of our investment strategies, make the composition of our assets under management an important determinant of the investment management fees we earn. Historically, we have received higher effective rates of investment management fees from Artisan Funds and Artisan Global Funds than from traditional separate accounts, reflecting, among other things, the different and broader array of services we provide to Artisan Funds and Artisan Global Funds. Investment management fees for non-U.S. funds may also be higher because they include fees to offset higher distribution costs. Our investment management fees also differ by investment strategy, with higher-capacity strategies having lower standard fee rates than strategies with more limited capacity.

Certain separate account clients pay us fees based on the performance of their accounts relative to agreed-upon benchmarks, which typically results in a lower base fee but allows us to earn higher fees if the performance we achieve for that client is superior to the performance of the agreed-upon benchmark. We may also receive performance fees or incentive allocations from Artisan Private Funds. Approximately 3% of our ~~$120.6~~$136.5 billion of assets under management as of September 30, ~~2022~~2023 have performance fee billing arrangements. Performance fees of $0.1 million were recognized in each of the three months ended September 30, ~~2022, compared to $0.4 million in the three months ended September 30, 2021.~~

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2023 and 2022.

The ~~decrease~~increase in revenues of ~~$82.3~~$14.4 million, or ~~26%~~6%, for the three months ended September 30, ~~2022,~~2023, compared to the three months ended September 30, ~~2021,~~2022, was driven primarily by a ~~$44.6~~$9.3 billion, or ~~25% decrease~~7% increase in our average assets under management. The weighted average investment management fee, which excludes performance fees, was 69.5 basis points for the three months ended September 30, 2023, compared to 70.0 basis points for the three months ended September 30, ~~2022, compared to 70.7 basis points for the three months ended September 30, 2021.~~2022.

The following table sets forth ~~the~~ investment advisory fees and the weighted average management fee ~~earned~~ by investment vehicle. The weighted average management fee for Artisan Funds and Artisan Global Funds reflects the additional services we provide to these pooled vehicles.


		Separate Accounts and Other (1)						Artisan Funds and Artisan Global Funds							Separate Accounts and Other (1)						Artisan Funds and Artisan Global Funds
For the Three Months Ended September 30,	For the Three Months Ended September 30,	2022			2021			2022			2021			For the Three Months Ended September 30,	2023			2022			2023			2022
		(unaudited; dollars in millions)													(unaudited; dollars in millions)
Investment advisory fees	Investment advisory fees	$	87.9		$	117.5		$	146.4		$	199.1		Investment advisory fees	$	92.3		$	87.9		$	156.4		$	146.4
Weighted average management fee (2)	Weighted average management fee (2)	50.6 bps			51.3 bps			90.8 bps			91.0 bps			Weighted average management fee (2)	50.1 bps			50.6 bps			90.1 bps			90.8 bps
Percentage of ending AUM	Percentage of ending AUM	52		%	51		%	48		%	49		%	Percentage of ending AUM	52		%	52		%	48		%	48		%
(1) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have discretionary investment authority.	(1) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have discretionary investment authority.													(1) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have discretionary investment authority.
(2) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.	(2) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.													(2) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.

Operating Expenses

~~Our operating~~Operating expenses ~~decreased $17.9~~increased $10.9 million for the three months ended September 30, ~~2022,~~2023, compared to the three months ended September 30, ~~2021,~~2022, due to ~~a decline~~an $8.6 million increase in ~~incentive~~total compensation and ~~third-party distribution expense as~~benefits and a result of lower revenues, partially offset by increased travel, occupancy and technology costs and higher fixed compensation costs reflecting annual merit increases and the hiring of additional associates.$2.3 million increase in other operating expenses.

Compensation and Benefits


		For the Three Months Ended September 30,				Period-to-Period					For the Three Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Salaries, incentive compensation and benefits(1)	Salaries, incentive compensation and benefits(1)	$	109.7	$	130.8	$	(21.1)	(16)	%	Salaries, incentive compensation and benefits(1)	$	118.3	$	109.7	$	8.6	8	%
Long-term incentive compensation awards	Long-term incentive compensation awards	12.4		11.4		1.0		9	%	Long-term incentive compensation awards	12.4		12.4		0.0		0	%
Total compensation and benefits	Total compensation and benefits	$	122.1	$	142.2	$	(20.1)	(14)	%	Total compensation and benefits	$	130.7	$	122.1	$	8.6	7	%
(1) Excluding long-term incentive compensation awards	(1) Excluding long-term incentive compensation awards									(1) Excluding long-term incentive compensation awards

The ~~decrease~~increase in salaries, incentive compensation and benefits was driven primarily by ~~a $24.1 million decrease~~an increase in ~~quarterly~~ incentive compensation ~~for our investment~~ and ~~marketing professionals as a result of the decrease in revenue, partially offset by an increase in~~higher fixed compensation and benefits ~~expense related to~~costs reflecting annual merit increases and ~~increased headcount in 2022, including members of our newest investment team.~~

During the first quarter of 2022, the Company's board of directors approved a grant of $86.8 million of long-term incentive awards consisting of $38.2 million of restricted share-based awards and $48.6 million of long-term cash awards, which we refer to as franchise capital awards. Long-term incentive compensation award expense for all outstanding awards is expected to be approximately $14 millionan increase in the ~~fourth quarter~~number of ~~2022, excluding the impact of investment returns on the franchise capital awards.~~full time associates.

Total compensation and benefits was ~~52%~~53% and ~~45%~~52% of our revenues for the three months ended September 30, 2023, and 2022, ~~and 2021,~~ respectively.

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Other operating expenses

Other operating expenses increased ~~$2.2~~$2.3 million for the three months ended September 30, ~~2022~~2023, compared to the three months ended September 30, ~~2021,~~2022, primarily due to an increase in travel ~~and occupancy expenses, and higher technology expenses as a result of firm initiatives.~~

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expenses.

Non-Operating Income (Expense)

Non-operating income (expense) consisted of the following:


		For the Three Months Ended September 30,				Period-to-Period					For the Three Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Interest expense	Interest expense	$	(2.5)	$	(2.7)	$	0.2	(7)	%	Interest expense	$	(2.3)	$	(2.5)	$	0.2	(8)	%
Net investment gain (loss) of consolidated investment products	Net investment gain (loss) of consolidated investment products	(3.9)		2.7		(6.6)		(244)	%	Net investment gain (loss) of consolidated investment products	9.8		(3.9)		13.7		351	%
Net gain (loss) on the tax receivable agreements	Net gain (loss) on the tax receivable agreements	0.5		0.4		0.1		25	%	Net gain (loss) on the tax receivable agreements	0.5		0.5		0.0		0	%
Other investment gain (loss)		(5.5)		(2.1)		(3.4)		(162)	%
Net investment gain (loss) on nonconsolidated seed investments										Net investment gain (loss) on nonconsolidated seed investments	0.2		(1.6)		1.8		113	%
Net investment gain (loss) on franchise capital investments										Net investment gain (loss) on franchise capital investments	(4.5)		(4.0)		(0.5)		(13)	%
Interest income on cash and cash equivalents and other										Interest income on cash and cash equivalents and other	2.1		0.1		2.0		2,000	%
Total non-operating income (expense)	Total non-operating income (expense)	$	(11.4)	$	(1.7)	$	(9.7)	(571)	%	Total non-operating income (expense)	$	5.8	$	(11.4)	$	17.2	151	%

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments increased $15.0 million in the aggregate for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, predominately due to market conditions. Interest income on cash and cash equivalents and other increased $2.0 million for thethree months ended September 30, 2023, as a result of higher yields.

Provision for Income Taxes

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate for the three months ended September 30, 2023 and 2022 was 16.6% and ~~2021 was~~ 21.8% ~~and 19.8%~~, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately ~~17%~~16% and ~~20%~~17% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based awards.

Earnings Per Share

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the three months ended September 30, ~~2022,~~2023, compared to the three months ended September 30, ~~2021,~~2022, as a result of unit exchanges and equity award grants. See Note 12, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for ~~further~~ discussion of earnings per share.

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Nine months ended September 30, ~~2022,~~2023, compared to Nine months ended September 30, ~~2021~~2022


		For the Nine Months Ended September 30,				Period-to-Period					For the Nine Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
Statements of operations data:	Statements of operations data:	(unaudited; in millions, except share and per share data)								Statements of operations data:	(unaudited; in millions, except share and per share data)
Revenues	Revenues	$	767.3	$	912.2	$	(144.9)	(16)	%	Revenues	$	726.1	$	767.3	$	(41.2)	(5)	%
Operating Expenses	Operating Expenses									Operating Expenses
Total compensation and benefits	Total compensation and benefits	389.4		419.7		(30.3)		(7)	%	Total compensation and benefits	392.6		389.4		3.2		1	%

Other operating expenses	Other operating expenses	103.8		89.8		14.0		16	%	Other operating expenses	106.3		103.8		2.5		2	%
Total operating expenses	Total operating expenses	493.2		509.5		(16.3)		(3)	%	Total operating expenses	498.9		493.2		5.7		1	%
Total operating income	Total operating income	274.1		402.7		(128.6)		(32)	%	Total operating income	227.2		274.1		(46.9)		(17)	%
Non-operating income (expense)	Non-operating income (expense)									Non-operating income (expense)
Interest expense	Interest expense	(7.9)		(8.1)		0.2		2	%	Interest expense	(6.5)		(7.9)		1.4		18	%

Other non-operating income (expense)	Other non-operating income (expense)	(37.3)		20.4		(57.7)		(283)	%	Other non-operating income (expense)	50.0		(37.3)		87.3		234	%
Total non-operating income (expense)	Total non-operating income (expense)	(45.2)		12.3		(57.5)		(467)	%	Total non-operating income (expense)	43.5		(45.2)		88.7		196	%
Income before income taxes	Income before income taxes	228.9		415.0		(186.1)		(45)	%	Income before income taxes	270.7		228.9		41.8		18	%
Provision for income taxes	Provision for income taxes	46.8		78.1		(31.3)		(40)	%	Provision for income taxes	51.7		46.8		4.9		10	%
Net income before noncontrolling interests	Net income before noncontrolling interests	182.1		336.9		(154.8)		(46)	%	Net income before noncontrolling interests	219.0		182.1		36.9		20	%
Less: Noncontrolling interests - Artisan Partners Holdings	Less: Noncontrolling interests - Artisan Partners Holdings	37.2		74.1		(36.9)		(50)	%	Less: Noncontrolling interests - Artisan Partners Holdings	35.5		37.2		(1.7)		(5)	%
Less: Noncontrolling interests - consolidated investment products	Less: Noncontrolling interests - consolidated investment products	(9.0)		10.9		(19.9)		(183)	%	Less: Noncontrolling interests - consolidated investment products	26.0		(9.0)		35.0		389	%
Net income attributable to Artisan Partners Asset Management Inc.	Net income attributable to Artisan Partners Asset Management Inc.	$	153.9	$	251.9	$	(98.0)	(39)	%	Net income attributable to Artisan Partners Asset Management Inc.	$	157.5	$	153.9	$	3.6	2	%
Share Data	Share Data									Share Data
Basic earnings per share	Basic earnings per share	$	2.17	$	3.84					Basic earnings per share	$	2.27	$	2.17
Diluted earnings per share	Diluted earnings per share	$	2.17	$	3.84					Diluted earnings per share	$	2.27	$	2.17
Basic weighted average number of common shares outstanding	Basic weighted average number of common shares outstanding	62,329,756		59,519,634						Basic weighted average number of common shares outstanding	63,419,587		62,329,756
Diluted weighted average number of common shares outstanding	Diluted weighted average number of common shares outstanding	62,353,275		59,535,894						Diluted weighted average number of common shares outstanding	63,449,804		62,353,275

Investment Advisory Revenues

The decrease in revenues of ~~$144.9~~$41.2 million, or ~~16%~~5%, for the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, was driven primarily by a ~~$24.1~~$7.2 billion, or ~~14%~~5%, decrease in our average assets under ~~management, in addition to a $10.8 million decrease in performance fee revenue.~~management. The weighted average management fee, which excludes performance fees, was 70.0 basis points for the nine months ended September 30, 2023, compared to 70.2 basis points for the nine months ended September 30, ~~2022 compared to 70.8 basis points for the nine months ended September 30, 2021.~~2022. Performance fees of ~~$0.4~~$0.2 million were recognized in the nine months ended September 30, ~~2022,~~2023, compared to ~~$11.2~~$0.4 million in the nine months ended September 30, ~~2021.~~2022.

The following table sets forth the investment advisory fees and weighted average management fee earned by investment ~~vehicle.~~vehicles. The weighted average management fee for Artisan Funds and Artisan Global Funds reflects the additional services we provide to these pooled vehicles.


		Separate Accounts and Other (2)						Artisan Funds and Artisan Global Funds							Separate Accounts and Other (1)						Artisan Funds and Artisan Global Funds
For the Nine Months Ended September 30,	For the Nine Months Ended September 30,	2022			2021			2022			2021			For the Nine Months Ended September 30,	2023			2022			2023			2022
		(unaudited; dollars in millions)													(unaudited; dollars in millions)
Investment advisory fees	Investment advisory fees	$	288.8		$	347.7		$	478.5		$	564.5		Investment advisory fees	$	273.5		$	288.8		$	452.6		$	478.5
Weighted average management fee~~(1)~~(2)	Weighted average management fee~~(1)~~(2)	51.0 bps			51.4 bps			90.7 bps			91.2 bps			Weighted average management fee~~(1)~~(2)	51.0 bps			51.0 bps			90.3 bps			90.7 bps
Percentage of ending AUM	Percentage of ending AUM	52		%	51		%	48		%	49		%	Percentage of ending AUM	52		%	52		%	48		%	48		%
(1) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.
(2) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have full discretionary investment authority.
(1) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have discretionary investment authority.														(1) Separate accounts and other consists of assets we manage in or through vehicles other than Artisan Funds or Artisan Global Funds, including assets we manage in traditional separate accounts, Artisan-branded collective investment trusts and Artisan Private Funds, as well as assets under advisement related to investment models, for which we provide consulting advice but do not have discretionary investment authority.
(2) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.														(2) We compute our weighted average management fee by dividing annualized management fees (which excludes performance fees) by average assets under management for the applicable period.

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Operating Expenses

Operating expenses ~~decreased $16.3~~increased $5.7 million for the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, due to a ~~decline~~$3.2 million increase in ~~incentive~~total compensation and ~~third-party distribution expense as~~benefits and a result of lower revenues, partially offset by increased travel, occupancy and technology costs and higher fixed compensation costs reflecting annual merit increases and the hiring of additional associates, including members of our newest investment team.$2.5 million increase in other operating expenses.

Compensation and Benefits


		For the Nine Months Ended September 30,				Period-to-Period					For the Nine Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Salaries, incentive compensation and benefits (1)	Salaries, incentive compensation and benefits (1)	$	352.3	$	385.1	$	(32.8)	(9)	%	Salaries, incentive compensation and benefits (1)	$	350.1	$	352.3	$	(2.2)	(1)	%
Long-term incentive compensation awards	Long-term incentive compensation awards	37.1		34.6		2.5		7	%	Long-term incentive compensation awards	42.5		37.1		5.4		15	%
Total compensation and benefits	Total compensation and benefits	$	389.4	$	419.7	$	(30.3)	(7)	%	Total compensation and benefits	$	392.6	$	389.4	$	3.2	1	%
(1) Excluding long-term incentive compensation awards	(1) Excluding long-term incentive compensation awards									(1) Excluding long-term incentive compensation awards

The decrease in salaries, incentive compensation and benefits was driven primarily by a ~~$46.9~~$12.2 million decrease in incentive compensation paid to our investment and ~~marketing~~distribution professionals as a result of the decrease in revenue, partially offset by higher fixed compensation and benefits costs reflecting annual merit increases and a 6% increase in the ~~hiring~~number of ~~additional associates, including members of our newest investment team.~~full time associates.

Long-term incentive compensation award expense increased ~~$2.5~~$5.4 million as the awards granted during 2021 and 2022 had a higher value than the awards that became fully vested in 2021 and 2022. The award amortization expense increase of $6.9 million for the nine months ended September 30, 2022 compareddue to ~~the nine months ended September 30, 2021, was partially offset by a $4.4 million decrease from~~ the impact of investment returns on the ~~cash~~cash-based awards.

During the first quarter of 2023, the Company's board of directors approved a grant of $57.1 million of long-term incentive awards consisting of $18.1 million of restricted share-based awards and $39.0 million of cash-based long-term incentive awards, which we refer to as franchise capital awards. Long-term incentive compensation award ~~value.~~expense for all outstanding awards is expected to be approximately $14 million per quarter in fiscal 2023, excluding the impact of investment returns on the franchise capital awards.

Total compensation and benefits was ~~51%~~54% and ~~46%~~51% of our revenues for the nine months ended September 30, ~~2022,~~2023, and ~~2021,~~2022, respectively.

Other operating expenses

Other operating expenses increased ~~$14.0~~$2.5 million for the nine months ended September 30, ~~2022~~2023, compared to the nine months ended September 30, ~~2021,~~2022, primarily due to an increase in travel expenses and occupancy ~~expenses, and higher technology expenses as~~costs, offset by a ~~result of firm initiatives.~~

decrease in distribution fees due to lower revenues.

Non-Operating Income (Expense)

Non-operating income (expense) consisted of the following:


		For the Nine Months Ended September 30,				Period-to-Period					For the Nine Months Ended September 30,				Period-to-Period
		2022		2021		$		%			2023		2022		$		%
		(unaudited; in millions)									(unaudited; in millions)
Interest expense	Interest expense	$	(7.9)	$	(8.1)	$	0.2	(2)	%	Interest expense	$	(6.5)	$	(7.9)	$	1.4	(18)	%
Net investment gain (loss) of consolidated investment products	Net investment gain (loss) of consolidated investment products	(14.6)		18.0		(32.6)		(181)	%	Net investment gain (loss) of consolidated investment products	38.2		(14.6)		52.8		362	%
Net gain (loss) on the tax receivable agreements	Net gain (loss) on the tax receivable agreements	1.0		0.4		0.6		150	%	Net gain (loss) on the tax receivable agreements	0.5		1.0		(0.5)		(50)	%
Other investment gain (loss)		(23.7)		2.0		(25.7)		(1,285)	%
Net investment gain (loss) on nonconsolidated seed investments										Net investment gain (loss) on nonconsolidated seed investments	1.4		(4.6)		6.0		130	%
Net investment gain (loss) on franchise capital investments										Net investment gain (loss) on franchise capital investments	6.1		(19.2)		25.3		132	%
Interest income on cash and cash equivalents and other										Interest income on cash and cash equivalents and other	3.8		0.1		3.7		3,700	%
Total non-operating income (expense)	Total non-operating income (expense)	$	(45.2)	$	12.3	$	(57.5)	(467)	%	Total non-operating income (expense)	$	43.5	$	(45.2)	$	88.7	196	%

Net investment gain (loss) of consolidated investment products, net investment gain (loss) on nonconsolidated seed investments, and net investment gain (loss) on franchise capital investments increased $84.1 million in the aggregate for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, predominately due to market conditions. The increase in interest income on cash and cash equivalents and other increased $3.7 million for thenine months ended September 30, 2023, as a result of higher yields.

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Provision for Income Taxes

The provision for income taxes primarily represents APAM’s U.S. federal, state and local income taxes on its allocable portion of Holdings’ income, as well as foreign income taxes payable by Holdings’ subsidiaries. APAM’s effective income tax rate was ~~20.4%~~19.1% and ~~18.8%~~20.4% for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately ~~17%~~16% and ~~20%~~17% of Holdings’ full year projected taxable earnings were not subject to corporate-level taxes for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Thus, income before income taxes includes amounts that are attributable to noncontrolling interests and not taxable to APAM and its subsidiaries, which reduces the effective tax rate. As APAM’s equity ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes. The effective tax rate was favorably impacted in both periods due to tax deductible dividends paid on unvested restricted share-based ~~awards and by the tax deduction related to the vesting of restricted share-based~~ awards.

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Earnings Per Share

Weighted average basic and diluted shares of Class A common stock outstanding were higher for the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, as a result of stock offerings, unit exchanges, and equity award grants. See Note 12, “Earnings Per Share” in the Notes to the unaudited consolidated financial statements for further discussion of earnings per share.

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Supplemental Non-GAAP Financial Information

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products. These adjustments also remove the non-operational complexities of our structure by adding back noncontrolling interests and assuming all income of Artisan Partners Holdings is allocated to APAM. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the Company.

Non-GAAP measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Our non-GAAP measures may differ from similar measures used by other companies, even if similar terms are used to identify such measures. Our non-GAAP measures are as follows:

•Adjusted net income represents net income excluding the impact of (1) net gain (loss) on the tax receivable agreements (if any), (2) compensation expense (reversal) related to market valuation changes in compensation plans, and (3) net investment gain (loss) of investment products. Adjusted net income also reflects income taxes assuming the vesting of all unvested Class A share-based awards and as if all outstanding limited partnership units of Artisan Partners Holdings had been exchanged for Class A common stock of APAM on a one-for-one basis. Assuming full vesting and exchange, all income of Artisan Partners Holdings is treated as if it were allocated to APAM, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting APAM's current federal, state, and local income statutory tax rates. The adjusted tax rate was 24.7% for all periods presented.

•Adjusted net income per adjusted share is calculated by dividing adjusted net income by adjusted shares. The number of adjusted shares is derived by assuming the vesting of all unvested Class A share-based awards and the exchange of all outstanding limited partnership units of Artisan Partners Holdings for Class A common stock of APAM on a one-for-one basis.

•Adjusted operating income represents the operating income of the consolidated company excluding compensation expense related to market valuation changes in compensation plans.

•Adjusted operating margin is calculated by dividing adjusted operating income by total revenues.

•Adjusted EBITDA represents adjusted net income before interest expense, income taxes, depreciation and amortization expense.

Net gain (loss) on the tax receivable agreements represents the income (expense) associated with the change in estimate of amounts payable under the tax receivable agreements entered into in connection with APAM’s initial public offering and related reorganization.

Compensation expense (reversal) related to market valuation changes in compensation plans represents the expense (income) associated with the change in the ~~long term~~long-term incentive award liability resulting from investment returns of the underlying investment products. Because the compensation expense impact of the investment market exposure is economically hedged, management believes it is useful to reflect the expected net income offset in the calculation of adjusted operating income, adjusted net income, and adjusted EBITDA. The related investment gain (loss) on the underlying investments is included in the adjustment for net investment gain (loss) of investment products.

Net investment gain (loss) of investment products represents the non-operating income (expense) related to the Company’s investments, in both consolidated investment products and nonconsolidated investment products, including investments held to economically hedge compensation plans. Excluding these non-operating market gains or losses on investments provides greater transparency to evaluate the profitability and efficiency of the underlying operations of the business. Interest income generated on cash and cash equivalents is considered part of normal operations, and therefore, is not excluded from adjusted net income.

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The following table sets forth, for the periods indicated, a reconciliation from GAAP financial measures to non-GAAP measures:


		For the Three Months Ended September 30,						For the Nine Months Ended September 30,							For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2022			2021			2022			2021				2023			2022			2023			2022
		(unaudited; in millions, except per share data)													(unaudited; in millions, except per share data)
Reconciliation of non-GAAP financial measures:	Reconciliation of non-GAAP financial measures:													Reconciliation of non-GAAP financial measures:
Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	44.2		$	86.4		$	153.9		$	251.9		Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	53.1		$	44.2		$	157.5		$	153.9
Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	11.0			24.8			37.2			74.1			Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	11.3			11.0			35.5			37.2
Add back: Provision for income taxes	Add back: Provision for income taxes	14.8			28.0			46.8			78.1			Add back: Provision for income taxes	14.6			14.8			51.7			46.8

Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.6)			0.1			(4.4)			0.3			Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.3)			(1.6)			1.2			(4.4)
Add back: Net (gain) loss on the tax receivable agreements	Add back: Net (gain) loss on the tax receivable agreements	(0.5)			(0.4)			(1.0)			(0.4)			Add back: Net (gain) loss on the tax receivable agreements	(0.5)			(0.5)			(0.5)			(1.0)

Add back: Net investment (gain) loss of investment products attributable to APAM	Add back: Net investment (gain) loss of investment products attributable to APAM	7.1			1.6			30.0			(8.9)			Add back: Net investment (gain) loss of investment products attributable to APAM	3.6			7.1			(19.2)			30.0
Less: Adjusted provision for income taxes	Less: Adjusted provision for income taxes	18.6			34.7			64.9			97.6			Less: Adjusted provision for income taxes	20.0			18.6			55.9			64.9
Adjusted net income (Non-GAAP)	Adjusted net income (Non-GAAP)	$	56.4		$	105.8		$	197.6		$	297.5		Adjusted net income (Non-GAAP)	$	60.8		$	56.4		$	170.3		$	197.6

Average shares outstanding	Average shares outstanding													Average shares outstanding
Class A common shares	Class A common shares	62.6			60.0			62.3			59.5			Class A common shares	63.5			62.6			63.4			62.3
Assumed vesting or exchange of:	Assumed vesting or exchange of:													Assumed vesting or exchange of:
Unvested Class A restricted share-based awards	Unvested Class A restricted share-based awards	5.8			5.4			5.7			5.5			Unvested Class A restricted share-based awards	5.7			5.8			5.7			5.7

Artisan Partners Holdings units outstanding (noncontrolling interests)	Artisan Partners Holdings units outstanding (noncontrolling interests)	11.9			14.2			12.2			14.5			Artisan Partners Holdings units outstanding (noncontrolling interests)	11.5			11.9			11.5			12.2
Adjusted shares	Adjusted shares	80.3			79.6			80.2			79.5			Adjusted shares	80.7			80.3			80.6			80.2

Basic earnings per share (GAAP)	Basic earnings per share (GAAP)	$	0.65		$	1.30		$	2.17		$	3.84		Basic earnings per share (GAAP)	$	0.76		$	0.65		$	2.27		$	2.17
Diluted earnings per share (GAAP)	Diluted earnings per share (GAAP)	$	0.65		$	1.30		$	2.17		$	3.84		Diluted earnings per share (GAAP)	$	0.76		$	0.65		$	2.27		$	2.17
Adjusted net income per adjusted share (Non-GAAP)	Adjusted net income per adjusted share (Non-GAAP)	$	0.70		$	1.33		$	2.47		$	3.74		Adjusted net income per adjusted share (Non-GAAP)	$	0.75		$	0.70		$	2.11		$	2.47

Operating income (GAAP)	Operating income (GAAP)	$	78.7		$	143.1		$	274.1		$	402.7		Operating income (GAAP)	$	82.2		$	78.7		$	227.2		$	274.1

Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.6)			0.1			(4.4)			0.3			Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.3)			(1.6)			1.2			(4.4)

Adjusted operating income (Non-GAAP)	Adjusted operating income (Non-GAAP)	$	77.1		$	143.2		$	269.7		$	403.0		Adjusted operating income (Non-GAAP)	$	80.9		$	77.1		$	228.4		$	269.7

Operating margin (GAAP)	Operating margin (GAAP)	33.6		%	45.2		%	35.7		%	44.1		%	Operating margin (GAAP)	33.0		%	33.6		%	31.3		%	35.7		%
Adjusted operating margin (Non-GAAP)	Adjusted operating margin (Non-GAAP)	32.9		%	45.2		%	35.1		%	44.2		%	Adjusted operating margin (Non-GAAP)	32.5		%	32.9		%	31.5		%	35.1		%

Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	44.2		$	86.4		$	153.9		$	251.9		Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	53.1		$	44.2		$	157.5		$	153.9
Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	11.0			24.8			37.2			74.1			Add back: Net income attributable to noncontrolling interests - Artisan Partners Holdings	11.3			11.0			35.5			37.2

Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.6)			0.1			(4.4)			0.3			Add back: Compensation expense (reversal) related to market valuation changes in compensation plans	(1.3)			(1.6)			1.2			(4.4)
Add back: Net (gain) loss on the tax receivable agreements	Add back: Net (gain) loss on the tax receivable agreements	(0.5)			(0.4)			(1.0)			(0.4)			Add back: Net (gain) loss on the tax receivable agreements	(0.5)			(0.5)			(0.5)			(1.0)

Add back: Net investment (gain) loss of investment products attributable to APAM	Add back: Net investment (gain) loss of investment products attributable to APAM	7.1			1.6			30.0			(8.9)			Add back: Net investment (gain) loss of investment products attributable to APAM	3.6			7.1			(19.2)			30.0
Add back: Interest expense	Add back: Interest expense	2.5			2.7			7.9			8.1			Add back: Interest expense	2.3			2.5			6.5			7.9
Add back: Provision for income taxes	Add back: Provision for income taxes	14.8			28.0			46.8			78.1			Add back: Provision for income taxes	14.6			14.8			51.7			46.8
Add back: Depreciation and amortization	Add back: Depreciation and amortization	2.0			1.8			5.5			5.1			Add back: Depreciation and amortization	2.4			2.0			6.9			5.5
Adjusted EBITDA (Non-GAAP)	Adjusted EBITDA (Non-GAAP)	$	79.5		$	145.0		$	275.9		$	408.3		Adjusted EBITDA (Non-GAAP)	$	85.5		$	79.5		$	239.6		$	275.9

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Liquidity and Capital Resources

Our working capital needs, including accrued incentive compensation payments, have been and are expected to be met primarily through cash generated by our operations. The assets and liabilities of consolidated investment products attributable to third-party investors do not impact our liquidity and capital resources. We have no right to the benefits from, nor do we bear the risks associated with, the assets and liabilities of consolidated investment products, beyond our direct equity investment and any investment advisory fees earned. Accordingly, assets and liabilities of consolidated investment products attributable to third-party investors are excluded from the amounts and discussions below. The following table shows our liquidity position as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
		(unaudited; in millions)					(unaudited; in millions)
Cash and cash equivalents	Cash and cash equivalents	$	168.1	$	189.2	Cash and cash equivalents	$	198.3	$	114.8
Accounts receivable	Accounts receivable	$	103.4	$	115.9	Accounts receivable	$	96.1	$	98.6
Seed investments(1)	Seed investments(1)	$	118.0	$	71.9	Seed investments(1)	$	144.6	$	124.8
Undrawn commitment on revolving credit facility	Undrawn commitment on revolving credit facility	$	100.0	$	100.0	Undrawn commitment on revolving credit facility	$	100.0	$	100.0
(1) Seed investments include Artisan's direct equity investments in consolidated and nonconsolidated Artisan-sponsored investment products. The balance excludes $61.5 million of investments made related to funded long-term incentive compensation plans.
(1) Seed investments include Artisan's direct equity investments in consolidated and nonconsolidated Artisan-sponsored investment products. The balance excludes $104.2 million of investments made related to long-term incentive compensation plans.						(1) Seed investments include Artisan's direct equity investments in consolidated and nonconsolidated Artisan-sponsored investment products. The balance excludes $104.2 million of investments made related to long-term incentive compensation plans.

We manage our cash balances in order to fund our day-to-day operations. The Company did not have any deposits with financial institutions directly impacted by events within the banking industry earlier this year. We continue to mitigate concentration risk through the diversification of financial institutions holding daily operating cash balances and by investing excess operating cash in various money market funds. $167.3 million of our cash and cash equivalents balance was invested in money market funds as of September 30, 2023.

Accounts receivable primarily represent investment advisory fees that have been earned, but not yet received from our clients. We perform a review of our receivables on a monthly basis to assess collectability. As of September 30, ~~2022,~~2023, none of our receivables were considered uncollectible.

We utilize cash to make seed investments in Artisan-sponsored investment products to support the development of new investment strategies and vehicles. As of September 30, ~~2022,~~2023, the balance of all seed investments, including investments in consolidated investment products, was ~~$118.0~~$144.6 million. Subject to certain restrictions on the timing of redemptions, ~~the~~ seed investments are generally redeemable at our discretion. We monitor for opportunities to redeem existing seed investments as sufficient scale in those strategies and vehicles is achieved.

During the nine months ended September 30, ~~2022,~~2023, we also made investments of ~~$48.6~~$39.0 million related to funded long-term incentive compensation plans. As of September 30, ~~2022,~~2023, the value of investments held ~~related to~~in connection with funded long-term incentive compensation plans was ~~$61.5~~$104.2 million.

We expect our investment portfolio to continue to grow as we grant additional annual franchise capital awards and make additional seed capital investments in new ~~investment~~ strategies and ~~vehicles.~~vehicles to support our growth.

We have $200 million in unsecured notes outstanding and a $100 million revolving credit facility with a five-year term ending August 2027. The notes are comprised of three series, Series D, Series E, and Series F, each with a balloon payment at maturity. The $100 million revolving credit facility was unused as of and for the nine months ended September 30, ~~2022.~~

The fixed interest rate on each series of unsecured notes is subject to a 100 basis point increase in the event Holdings receives a below-investment grade rating and any such increase will continue to apply until an investment grade rating is received.

These borrowings contain various covenants. Our failure to comply with any of the covenants could result in an event of default under the agreements, giving our lenders the ability to accelerate repayment of our obligations. We were in compliance with all debt covenants as of September 30, ~~2022.~~2023.

Distributions and Dividends

Artisan Partners Holdings’ distributions, including distributions to APAM for the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, were as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
(unaudited, in millions)
Holdings Partnership Distributions to Limited Partners $ 12.0 $ 25.6 $ 43.7 $ 67.9
Holdings Partnership Distributions to APAM 64.5 110.6 227.2 285.0
Total Holdings Partnership Distributions $ 76.5 $ 136.2 $ 270.9 $ 352.9

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	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
	(unaudited, in millions)
Holdings Partnership Distributions to Limited Partners	$	12.9	$	12.0	$	30.3	$	43.7
Holdings Partnership Distributions to APAM	72.4		64.5		169.1		227.2
Total Holdings Partnership Distributions	$	85.3	$	76.5	$	199.4	$	270.9

On ~~November 1, 2022,~~October 31, 2023, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of ~~$12.5~~$18.8 million, payable by Artisan Partners Holdings to holders of its partnership units, including APAM.

APAM declared and paid the following dividends per share during the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


Type of Dividend	Type of Dividend	Class of Stock	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Type of Dividend	Class of Stock	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
			2022		2021		2022		2021				2023		2022		2023		2022
Quarterly	Quarterly	Class A Common	$	0.60	$	1.00	$	2.39	$	2.85	Quarterly	Class A Common	$	0.61	$	0.60	$	1.66	$	2.39
Special Annual	Special Annual	Class A Common	$	—	$	—	$	0.72	$	0.31	Special Annual	Class A Common	$	—	$	—	$	0.35	$	0.72

Our board of directors declared, effective ~~November 1, 2022,~~October 31, 2023, a variable quarterly dividend of ~~$0.56~~$0.65 per share of Class A common stock with respect to the September quarter of ~~2022,~~2023, payable on November 30, ~~2022~~2023 to stockholders of record as of the close of business on November 16, ~~2022.~~2023. The variable quarterly dividend represents approximately 80% of the cash generated in the September quarter of ~~2022~~2023 and a pro-rata portion of ~~2022~~2023 tax savings related to our tax receivable agreements.

Subject to Board approval each quarter, we currently expect to pay a quarterly dividend of approximately 80% of the cash the Company generates each quarter. We expect our quarterly cash generation to approximate adjusted net income plus long-term incentive compensation award expense, less cash reserved for future franchise capital awards (which we generally expect will approximate 4% of investment management revenues each quarter) with additional adjustments made for certain other sources and uses of cash, including capital expenditures. After the end of the year, our Board will consider paying a special dividend after determining the amount of cash needed for general corporate purposes and investments in growth and strategic initiatives. Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy or at all.

Tax Receivable Agreements (“TRAs”)

In addition to funding our normal operations, we will be required to fund amounts payable under the TRAs that we entered into in connection with the IPO, which resulted in the recognition of a ~~$398.2~~$363.9 million liability as of September 30, ~~2022.~~2023. The liability generally represents 85% of the tax benefits APAM expects to realize as a result of the merger of an entity into APAM as part of the IPO Reorganization, our purchase of partnership units from limited partners of Holdings and the exchange of partnership units (for shares of Class A common stock or other consideration). The estimated liability assumes no material changes in the relevant tax law and that APAM earns sufficient taxable income to realize all tax benefits subject to the TRAs. An increase or decrease in future tax rates will increase or decrease, respectively, the expected tax benefits APAM would realize and the amounts payable under the TRAs. Changes in the estimate of expected tax benefits APAM would realize and the amounts payable under the TRAs as a result of change in tax rates have been and will be recorded in net income.

The liability will increase upon future purchases or exchanges of limited partnership units with the increase representing amounts payable under the TRAs equal to 85% of the estimated future tax benefits, if any, resulting from such purchases or exchanges. We intend to fund the payment of amounts due under the TRAs out of the reduced tax payments that APAM realizes in respect of the tax attributes to which the TRAs relate.

The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of sales or exchanges by the holders of limited partnership units, the price of the Class A common stock at the time of such sales or exchanges, whether such sales or exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest or depreciable basis or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments. During the nine months ended September 30, ~~2022,~~2023, we made payments oftotaling approximately ~~$33.1~~$35.8 million related to the TRAs. We do not intend to make any additional TRA payments in ~~2022.~~2023. In ~~2023,~~2024, we expect to make payments of approximately ~~$36.2~~$37.2 million related to the TRAs.

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Cash Flows


		For the Nine Months Ended September 30,					For the Nine Months Ended September 30,
		2022		2021			2023		2022
		(unaudited; in millions)					(unaudited; in millions)
Cash, cash equivalents and restricted cash as of January 1	Cash, cash equivalents and restricted cash as of January 1	$	200.8	$	199.5	Cash, cash equivalents and restricted cash as of January 1	$	143.2	$	200.8
Net cash provided by operating activities	Net cash provided by operating activities	306.6		404.2		Net cash provided by operating activities	262.8		306.6
Net cash used in investing activities	Net cash used in investing activities	(60.5)		(26.2)		Net cash used in investing activities	(36.5)		(60.5)
Net cash used in financing activities	Net cash used in financing activities	(259.3)		(252.2)		Net cash used in financing activities	(134.3)		(259.3)
Net impact of deconsolidation of consolidated investment products	Net impact of deconsolidation of consolidated investment products	—		(34.8)		Net impact of deconsolidation of consolidated investment products	(4.7)		—
Cash, cash equivalents and restricted cash as of September 30	Cash, cash equivalents and restricted cash as of September 30	$	187.6	$	290.5	Cash, cash equivalents and restricted cash as of September 30	$	230.5	$	187.6

Net cash provided by operating activities decreased ~~$97.6~~$43.8 million for the nine months ended September 30, ~~2022~~2023, compared to the nine months ended September 30, ~~2021,~~2022, primarily due to a decrease in operating income resulting from lower revenues. For the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, our operating income, excluding ~~share-based related~~share based compensation expense, decreased ~~$128.1 million. The decrease in operating cash flows~~$52.6 million, and was ~~partially~~ offset by ~~a $31.5 million increase~~changes in ~~cash provided by consolidated~~working capital.

Investing activities consist primarily of acquiring property and equipment, leasehold improvements and the purchase and sale of investment ~~products.~~

securities. Net cash used in ~~investment~~investing activities ~~increased $34.3~~decreased $24.0 million for the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, primarily due to a ~~$23.2 million increase~~decrease in the net ~~purchases~~purchase of investment securities relating to franchise capital awards and fewer investments in non-consolidated investment products in fiscal 2023, compared to fiscal 2022.

Financing activities consist primarily ~~related~~of partnership distributions to ~~investments made~~non-controlling interests, dividend payments to holders of our Class A common stock, proceeds from the issuance of Class A common stock in ~~connection with~~follow-on offerings, payments to purchase Holdings partnership units, and payments of amounts owed under the ~~funding of a long-term incentive compensation plan, and a $11.1 million increase in the acquisition of property and equipment and leasehold improvements.~~

tax receivable agreements. Net cash used byin financing activities ~~increased $7.1~~decreased $125.0 million for the nine months ended September 30, ~~2022,~~2023, compared to the nine months ended September 30, ~~2021,~~2022, primarily due to a ~~$23.7~~$71.9 million decrease in dividends and a $13.4 million decrease in distributions paid to shareholders and limited partners, respectively, as well as a $40.9 million increase in contributions from noncontrolling interests in our consolidated investment ~~products, a $6.8 million increase in dividends paid, partially offset by a $24.2 million decrease in distributions to limited partners.~~products.

During the nine months ended September 30, ~~2021,~~2023, the Company determined that it no longer had a controlling financial interest in an investment product that was previously consolidated. The deconsolidation of the investment product resulted in a ~~$34.8~~$4.7 million decrease in cash, cash equivalents and restricted cash.

Certain Contractual Obligations

As of September 30, ~~2022,~~2023, there have been no material changes to our contractual obligations outside the ordinary course of business from those listed in the “Contractual Obligations” table and related notes to the table in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~22, 2022,~~27, 2023, except for the changes in the TRA liability during the year.

As previously discussed in this report, the TRA liability decreased from ~~$425.4~~$398.8 million at December 31, ~~2021~~2022 to ~~$398.2~~$363.9 million at September 30, ~~2022.~~2023. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from such exchanges or sales and decrease when payments are made. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital ~~Resources”.~~Resources.” As a result, the timing of payments by period is currently unknown. During the nine months ended September 30, ~~2022,~~2023, we made payments of ~~$33.1~~approximately $35.8 million related to the TRAs. We do not intend to make any additional TRA payments in ~~2022.~~2023. In ~~2023,~~2024, we expect to make payments of approximately ~~$36.2~~$37.2 million related to the TRAs.

Critical Accounting Policies and Estimates

There have been no updates to our critical accounting policies from those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, ~~2021.~~2022.

New or Revised Accounting Standards

None.

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Item 3. Qualitative and Quantitative Disclosures Regarding Market Risk

There have been no material changes in our Quantitative and Qualitative Disclosures Regarding Market Risk from those previously reported in our Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at September 30, ~~2022.~~2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2022, we completed the implementation of a new general ledger system and reporting application. The new system was implemented to increase the efficiency of our financial reporting process and not in response to any actual or perceived deficiencies in internal control over financial reporting.

There have been no ~~other~~ changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act), during the quarter ended September 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

In the normal course of business, we may be subject to various legal and administrative proceedings. Currently, there are no legal or administrative proceedings that management believes may have a material adverse effect on our consolidated financial position, cash flows or results of operations.

Item 1A. Risk Factors

For a discussion of related and other potential risks and uncertainties, see the information under the heading “Risk Factors” in our latest annual report on Form 10-K, which is accessible on the SEC’s website at www.sec.gov.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

As described in Note 8, “Stockholders’ Equity”, to the unaudited consolidated financial statements included in Part I of this report, upon termination of employment with Artisan, an employee-partner’s Class B common units are exchanged for Class E common units and the corresponding shares of APAM Class B common stock are canceled. APAM issues the former employee-partner a number of shares of APAM Class C common stock equal to the former employee-partner’s number of Class E common units. Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings. There were no such issuances during the three months ended September 30, ~~2022.~~2023.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

(a) None.

(b) None.

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Item 6. Exhibits
Exhibit No. Description Form File No. Exhibit Filing Date Filed or Furnished Herewith
10.1
Amended and Restated Five-Year Revolving Credit Agreement, dated as of August 16, 2022, among Artisan Partners Holdings LP, the lenders named therein and Citibank, N.A., as Administrative Agent and Citibank, N.A. and BofA Securities, Inc. as joint lead arrangers and joint book runners
8-K 001-35826 10.1 August 17, 2022
31.1
Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101
The following Extensible Business Reporting Language (XBRL) documents are collectively included herewith as Exhibit 101: (i) the Unaudited Condensed Consolidated Statements of Financial Condition as of September 30, 2022 and December 31, 2021; (ii) the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021; (iii) the Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021; (iv) the Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021; (v) the Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (vi) the Notes to Unaudited Consolidated Financial Statements as of and for the three and nine months ended September 30, 2022 and 2021.
X
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) X

Exhibit No.

Description

Form

File No.

Exhibit

Filing Date

Filed or Furnished Herewith

31.1

Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following Extensible Business Reporting Language (XBRL) documents are collectively included herewith as Exhibit 101: (i) the Unaudited Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022; (ii) the Unaudited Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022; (iii) the Unaudited Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023 and 2022; (iv) the Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2023 and 2022; (v) the Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (vi) the Notes to Unaudited Consolidated Financial Statements as of and for the nine months ended September 30, 2023 and 2022.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1) Indicates a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Artisan Partners Asset Management Inc.

Dated: November ~~3, 2022~~2, 2023


By:			/s/ Eric R. Colson
			Eric R. Colson Chief Executive Officer (principal executive officer)

			/s/ Charles J. Daley, Jr.
			Charles J. Daley, Jr. Executive Vice President, Chief Financial Officer and Treasurer (principal financial and accounting officer)

4849



Nine months ended September 30, 2021	Class A Common Stock		Class B Common Stock		Class C Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests - Artisan Partners Holdings		Total Stockholders’ Equity		Redeemable Noncontrolling Interests
















Balance at January 1, 2021	$	631	$	45	$	110	$	107,738	$	72,944	$	(991)	$	10,565	$	191,042	$	93,753
Net income	—		—		—		—		251,898		—		74,064		325,962		10,903
Other comprehensive income - foreign currency translation	—		—		—		—		—		(301)		(57)		(358)		—

Cumulative impact of changes in ownership of Artisan Partners Holdings LP	—		—		—		(1,256)		—		(21)		1,277		—		—
Amortization of equity-based compensation	—		—		—		24,798		—		—		5,301		30,099		—
Deferred tax assets, net of amounts payable under tax receivable agreements	—		—		—		4,994		—		—		—		4,994		—
Issuance of Class A common stock, net of issuance costs	10		—		—		46,651		—		—		—		46,661		—
Forfeitures and employee/partner terminations	(1)		—		—		1		—		—		—		—		—
Issuance of restricted stock awards	7		—		—		(7)		—		—		—		—		—
Employee net share settlement	(2)		—		—		(7,380)		—		—		(1,777)		(9,159)		—
Exchange of subsidiary equity	7		(2)		(5)		—		—		—		—		—		—
Purchase of equity and subsidiary equity	—		(7)		(3)		(46,918)		—		—		—		(46,928)		—
Capital contributions, net	—		—		—		—		—		—		—		—		59,818
Impact of deconsolidation of CIPs	—		—		—		—		—		—		—		—		(67,083)
Distributions	—		—		—		—		—		—		(67,889)		(67,889)		—
Dividends	—		—		—		—		(203,345)		—		(126)		(203,471)		—
Balance at September 30, 2021	$	652	$	36	$	102	$	128,621	$	121,497	$	(1,313)	$	21,358	$	270,953	$	97,391
The accompanying notes are an integral part of the consolidated financial statements.


2022	$	—
2023	—
2024	—
2025	60,000
2026	—
Thereafter	140,000
Total	$	200,000


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Lease Type	Classification	2022		2021		2022		2021
Parking leases	Compensation and benefits	$	131	$	130	$	393	$	388
Office leases	Occupancy	4,157		3,664		13,256		10,862
Variable lease cost (1)	Occupancy	410		14		486		44
Short-term lease cost (1)	Occupancy	268		97		699		257
Sublease income	Occupancy	—		(100)		(133)		(167)
Office equipment leases	Communication and technology	34		59		134		190
Total operating lease expense		$	5,000	$	3,864	$	14,835	$	11,574
(1) Variable and short-term lease costs are excluded from the measurement of operating lease liabilities.


	As of September 30, 2022
2022 (excluding the nine months ended September 30, 2022)	$	3,787
2023	18,428
2024	18,595
2025	18,524
2026	17,783
Thereafter	70,519
Total undiscounted lease payments	$	147,636
Adjustment to discount to present value	(24,160)
Operating lease liabilities	$	123,476