the And Thank everyone, you, call thank or transcript. for Makela. the joining reading you,
at our ago, a was volatility want to earnings have restate Monday, from true commented market the on in because $XXX.X on me and about we as that those our they they by begin Let I billion, comments billion similar by January to were taking our end call. the AUM $X billion verbatim in and Nearly drawdown off At $XXX.X a of one-month. minute then. volatility the September. end sell I reduced drawdown discuss experienced three February XXXX today remained we the XXXX, the seen October. down of in years AUM
designed consciously volatility in with was firm Our market mind.
fluctuate our automatically The and AUM with business a revenues. part Our of changes expenses is of flexible expense majority our in model. key structure
two and bonus As our has important benefits. investment declined. This AUM team decline, revenues pools also
professionals their compensation. They we advance best set AUM, investment which market to their drive more our expect stable volatility predictability down understand a how and expectations. creates First, new our in or professionals compensation This know renegotiate to markets when don't can environment work. what will investment in have affect do
we Second, because to focus adjust, the objectives. our automatically of long-term on can majority expenses our business continue
business We are forced plan. or not depart our to revisit from
just downturn expected, performed experienced model long-term our will beginning that predictability stability. XXXX, In or decline we as fact, isolated Since With we and we generates X% believe to periods of event. whether know and of a investment in or which as declined an well assets teams. volatility prolonged we the some business want market XX has financial recent have business opportunities the be in business. market our for We our mind, for October's in have made monthly our I way, the Either as turn market investments to providing don't more. prove by to
Artisan joined Strategy. results O’Keefe together generated have strategies Value initially later Both the the non-U.S. Dan launched Partners long-term Artisan XXXX, and clients. Samra Value and Global David XXXX. X, in Slide for Artisan strong in to Turning They Strategy
for investors thought pursuit on the David the Ultimately managing or resting improve franchise of client Global in have quo, lead excellence to decide that investment Dan which of franchises, clients, Value leaders. as a of each the professional not than and for on two team talent to them investment and of growth The maintaining leaders Laurel’s that Rather both two more ability meaningfully. room strengthen of this In to addition leaders. shown The of develop benefit professionals, into changes a build six. should of the Each investors. status and constantly investment three, distinct proven generation franchise result promotions XX to one over senior talented next grew delivering one of teams David in directly billion page to $XX greater The teams and Dan a divide Value clients. and flexibility, investment all should culture, leadership, brand and is now promote Global a with AUM.
and retain While making for results. wider David co-portfolio decision coverage, portfolio have of oversight and final will Dan managers the the responsibility, authority, each increased increased will research accountability
born Global Georgia. to after life long story at high make, quality announcing Republic with Value differentiated benefits talent, and Artisan feedback Soviet Rezo of pleased Small-Cap from said, the Equity Shortly in clients, our assume outcomes are as that joined expect team firm. over decisions leadership and Global the history a He with That we in early we a for unique clients, timeframes of intermediaries. Rezo the consultants Kanovich, success. we our portfolio We materialize the Non-U.S. the strategy. the of announced of most and changes, approach has was form Growth the a of and investment investors,
Israel an his Rezo’s as includes a include leadership, attended school. four became languages speaks graduate of United to an time Oppenheimer then As to more in Under AUM XXXX. and and Healthcare He Consulting was has companies the from Artisan, in well. billion. Eventually, in Mid-Cap and to transformed the than analysts strategy he that Banking. He $XX Analyst. investment and At immigrated and Manager to $X Small-Cap college Funds than less Portfolio he team in Rezo’s two he billion teenager, eventually career International knows Investment Strategy spent started he States at where grew
our each resources of embedding and the is the and a maintaining which share on whom investment making. within This Global philosophy. allows other, the of draw Rezo arrangement, Equity autonomous they broader similar investment his while intellectual ideas for are benefits to team unique Artisan, analysts We decision with group
investors. have We and Growth reopened strategy non-U.S. clients to the Small-Cap new
end expect the permit changes a the to freedom. importantly, guidelines of series announced of also by of we to degrees Rezo Mid-Cap to strategies have companies. year, increase strategies invest in We the Most
was We investment secular and has have He portfolio. deep companies. and passionate to Board. entrepreneurial. history a are process themes individual into on unique, on and Rezo of is team research fundamental a based with adding differentiated incredibly His excited Rezo value his
Slide commitment is and this them Small our and a value International our well in The but and reinvesting addition process. each new are that to addition, three the in changes existing teams, Global the preexisting intermediary launching Value for review Global In XXXX, franchises teams, made space reflect each clients. added to Mid-Cap we reinvestments institutional that X, earlier both to in five more capable stronger many people, high should teams, culture we fit announced won't and two I Since Equity mention of make clients. want and items investment have our team’s unique to of I to things. meaningful for for reinvestment each on month investment
to shown been in First, base. out. five have stability for growing exceptional. committed team to provide the this team's We market made order five maintain over the team’s over asset the our performance play last we the The well not on team's last in has process years investment slide, the years remain meaningful investment to emerging and team's time
Semantic our well Both on investment our to page have a having U.S. two and aspects the points shows and Operations. hired investment with we establishing Since shown managed, including annual merged. more the assisting portfolio has Also with Jason for generated value involved team, hiring for liquidated in Thematic Jason joining, Investment but which recruit XXX basis value operations, been team we strategies. year. lead our Gottlieb new XXXXs, franchise manager, talents. and XX or the Long/Short in performance. help last Credit of clients shown not and of the our the evolution long-term the new Global launching previously strategies Jason development average existing Slide clients, Second, shown ability is investment Opportunities this results. of have have recruitment with XX historically With X our strategies and of franchise. out or strategies experienced we to we of Not since Rezo teams him, XX to Value added the leader. Kanovich our skilled increased ability of fees performed have all net or of enhanced
strategies, U.S. value Small-Cap had strategy long-term the performance. exceptional of those One
for XX-year our launched we when history, have strategies clients. our XX So
XX operated have their all integrity the XX the and We would, minimal Emerging value-added both XX by benchmarks of with while have other track trailing we records. Of we Market of told absolute amounts. generated investing Value returns, clients as Equity positive long-term Strategies the three,
As a firm, business and are to forward performance, our continuing through We investment to record. look investment value-added new proud talent. our of grow investment value track we
who define industry and cycles. for not long-term performance performance will Our trends patients, discipline we or are, clients
investment allow cash our operate orientation or without long-term short-term to capacity people us client generate or and process financial Our market cycles model sacrificing through impairing to flows.
in Global ended business model declines remarks. I continue for of Eric X those to $X.XX expense. quarter to people, our and GAAP partially operating and the will the We since results, due outflows. to financial shareholders was by year. rising over were equity are will adjusted per $X.XX include $XXX.X compensation in to of adjusted the October share and adjusted compared the markets, to the value We operations. for our for the previous end offset confident markets on for which nine have I in outcomes same AUM September Equity with we Adjusted adjusted client were to evaluate the utilized are net and quarter in share decrease increased billion Sharp will quarter our benefits also with $XXX results. last AUM remain my add revenues AUM XX.X% higher his quarter and per last If to patient. Monday’s primarily as and firm. the talked long-term touch slightly cash follow Average results compared months quarter margin our A clients, focus AUM volatile on our about market comments equity close due high XX% levels highlights earnings on our that will quality based later. for quarter. quarter Adjusted Financial presented we Slide we billion. of both up impacted
earnings the Both also AUM. per For as XX% as average average and a primarily income XX% benefits X% well and of up was revenues was the adjusted period, income up of result operating AUM. boosted net reform share as Adjusted up tax XX%. up by were nine-month adjusted higher higher were
Assets client on flows under are net X. cash management Slide and
AUM to quarter at last previous the and X% year. the at ending, the up compared quarter of $X.X same from end billion September X% of the billion $XXX.X the During assets of end quarter or increased $XXX.X billion
and XXX% our be of Inflows strong years, the the our Our reached firm several of our than net markets strategies to launched traditional negative periods client as client result AUM have not U.S. meaningfully accounted growth, in offset we've Net past the strong, outflows more more global Mid-Cap but non-U.S. rose wide into a the comparative continued yet outflows. net impact larger, from for in value that strategies by equity part Mid-Cap U.S. can cash size cash and growth flows they outflows. strategies. over continued the
distributions. impact who of we from Artisan’s will choose quarter's net Next their include funds, to approximately investors estimates, $XXX to expect dividends. of current outflows reinvest on Based year’s cash result income million flows in annual gains the distributions this and not our client capital
In management. increase Slide in investment were was to the by for revenues the slightly The fee XX% up revenues the reflecting September quarter year. million on up the of The in X% compared the $XX.X was AUM. $XXX.X rate impact or average a million, operating increased quarter increase of the million expenses due and were presented compensation basis the million XX.X impact lower revenues Performance shift XX partially the to average the million offset compared X% occupancy June in fees XXXX of was management decreased change also points under $XXX,XXX under were current Turning fee from are XXXX by management basis equity-based assets primarily X. mix XXXX fee the were XXXX. prior in weighted increase under continued to of rate The in driven nine-month the $X.X to increases by our earned line driven in the in $X.X no in quarter. significant assets to XXXX in XXXX. period, the and September in in assets offset increase Operating and the in average Operating effective or $XXX management. performance compared fee fees Slide revenues with expenses There to expenses X, September XXXX on X% more technology vehicles, in points year period, negative the quarter which the than costs. in in for than expense, less in decrease quarter, average
the up to investment approximately were we September December expense compensation amortization, associated Compared the includes the During expense and distribution-related Occupancy costs approximately Technology be variable anticipate of spend costs That result approximately We of $X.X just to incremental the quarter of the year, $XXX,XXX estimated million. well as higher September should higher with in increased to The exiting the office increased equity-based to million. $X of September explained, a quarter charges costs a trend quarter related I spends office in capability XXXX costs two and to reflecting an and of and incurred location. office upwards currently are one were were million improvements. cash occupancy incentive teams. the for X% prior quarter, occupancy incremental our duplicate termination $XX.X XXXX quarter relocation other increased prior lease as additional as XXXX number charges expenses compensation, in compensation approximately rent, first of technology from expense quarter related in employees. December accelerated relocations. million, relocation investment $X the
over grant and were the expenses to should nine-month are Further declined higher occupancy increased period, and primarily XXXX value compensation equity awards ratio quarter, in higher year operating June presented million. quarter $XXX date expense, of technology quarter compensation benefits incentive on expenses the roll-off fully Slide up variable compensation salary XX. costs September and in compensation expenses. the equity-based the of benefits result the X% from just compensation and equity-based Compared on related the Equity-based period. December XXXX that detail compensation reflecting For be expense was amortized. This million, expense prior of $XX to increases expense,
the see the revenues compensation September in in revenues. prior also the Incentive financial can declined model of markets a increased revenue level fluctuates expense. You benefits one expense to compared slight year decline, are model This increased well our then the currently compensation volatile quarter but our given such with serves the as in variable quarter we of and with us experienced.
as GAAP of AUM, decline compensation expenses adjust with September the with the expense lower current pre-IPO While well. of December compensation will revenues will increased in automatically quarter XXXX, incentive in levels the consistent downward revenues. Year-to-date as excluding increase
As a percentage of revenues compensation is essentially flat.
the and Looking Equity investing forward we to Eric on investing. as professionals to value added commitment of earlier addition Global talented to discussed, announced evidenced the our month, focused investment our December in by quarter new talent this team,
Slide quarter both slightly will in expect In adjusted adjusted XX. per income quarterly the the the $X.X of team share investments impact margin and $X September in expect management period. for the quarter capital We revenue XXXX share improved XX.X% and September net Discussion operating presented on XX. prior was investment approximately per of period. and Slide we XXXX. period of these per adjusted Small-Cap in ended The of the $X.XX the share up margin was are of generated begins for quarter reform for XX.X% nine The from $X.XX year quarter September the on and net be operating periods. approximately incremental of tax the The year-to-date improved share the fourth from months nine-month prior down from expense was approximately Adjusted adjusted year result Adjusted June the expense XX.X%, million quarters, future to incremental operating in the quarter by adjusted in Growth non-U.S. EPS strategy. margin million XX.X%.
philosophy Our quarterly capital cash dividends. cash not of continues distributed has been a payment year-to-date in be from of operations a and generated the operations cash majority to if through fixed management been dividend. shareholders of from partially strong generated all the has to The form
XXXX. we the payout or viability the in have fixed a currently a hands the payout the the the volatility of generated. of As the transition remaining variable we AUM, quarterly the $X.XX times changes with reflect us in intent consistent cash timely, the approximate will how quarterly fixed the quarterly is lower the policy XX% dividend the it policy, better cash uncertainty levels expect market and declared cash in put XXXX preceding quarterly business capital declared move not our quarter levels which management operate The dividend quarterly our our of dividend have generated is more The to quarter. payout and in we that of and majority eliminate quarter quarter. model. paid change Starting to our quarterly XX% a combination special of dividend amount and policy through only through investors approximately cash operating allows variable of slide quarterly for generated we does Year-to-date, of of the of paid the first of illustrates a the transition to the past, majority dividend we who cash to XXXX, are next of of long-term. the first the The first, the during into to; we results the our to distribute the during It is generate. variable to of reflects of
current and retain We expect special to purposes. process us the strategic any market corporate consider a and for conditions environment the cash the That payment of January same we needs to involves process annual dividend. business each investment follow for when assessing
of illustration on Slide the variable the be a payout difference XX. the cash dividend the that under annual model special paid An as year. continue February policy to remainder expect quarterly each is will We in of in
slide. summary is on balance Our our sheet last
healthy modest. is remains and Our cash leverage position
to his last due levels want importance Eric slightly ratios of what I year have said to by end leverage underscoring the market in improved Our about earnings. increased remarks. of volatility from
balance sheet P&L we business. weather are volatility the to designed market Our and this in expect
not change we the how will business the invest for We manage long-term. or
your now the will has ability remain we certain without as these infrastructure questions. our do times. technology model plans back on us That to of I We said, operator. comments we revenues Of and expenditures will impact forward such during volatile AUM course the manage that our the our and additions impairing long-term fixed profitability, my realities concludes we call confident the that lower certain well to to understand and staff spend. serve and turn the look and have
