A R T I S A N PA R T N E R S
A S S E T M A N A G E M E N T I N C .
2 015 A N N U A L R E P O R T
Consistent Approach
TABLE OF
CONTENTS
A L E T T E R F R O M O U R C E O 2
I N V E S T M E N T T E A M S
Artisan Partners Growth Team 16
Artisan Partners Global Equity Team 18
Artisan Partners U.S. Value Team 2 0
Artisan Partners Global Value Team 2 2
Artisan Partners Emerging Markets Team 24
Artisan Partners Credit Team 2 6
Artisan Partners Developing World Team 2 8
F I N A N C I A L H I G H L I G H T S 3 0
M A N A G E M E N T T E A M & B O A R D O F D I R E C T O R S 39
2015 ANNUAL REPORT
P. 1
Artisan Partners is a high
value-added investment
management firm designed
for talent to thrive in a
growth-oriented culture.
SHAREHOLDER LET TER
P. 2
2015 ANNUAL REPORT
P. 3
We have consciously designed
a stable and predictable
business model that allows
our investment teams to focus
on delivering alpha on behalf
of clients and investors.
Our business
model allows
us to remain
focused on
Who We Are.
We have consciously designed our business to provide stability and predictability even in
volatile and uncertain times. The majority of our expenses, including most of the compensation
we pay to our investment professionals, automatically adjust with changes in assets under
management and revenues. This way, our investment professionals understand in advance how
market volatility will impact their compensation. We also stabilize our business by maintaining a
centralized operational infrastructure, strong balance sheet and ample liquidity, all of which
give us the capabilities, time and resources to manage our business for the long term.
In 2015, markets were volatile and reflected uncertainty across the globe, which has continued
in early 2016. Market swings, losses and historical abnormalities can be disorienting and cause
investors and firms to overreact, prematurely change course or drop out. At Artisan Partners, we
believe that by remaining committed to Who We Are, we can identify and take advantage of the
opportunities presented by the current environment.
DEAR FELLOW
SHAREHOLDERS,
For our investment teams, volatile markets create opportunities to invest in companies at
valuations that reflect short-term fear and uncertainty, as opposed to business fundamentals
and long-term value. Market volatility also results in greater dispersion among the returns of
different investments, which is a better environment for active managers to generate alpha and
differentiate their returns from benchmark indices and peers. In short, we believe volatility
increases the likelihood that disciplined security selection will translate into value-added results.
SHAREHOLDER LET TER
P. 2
After the 2002 dot-com crash, all 7 of the investment strategies we managed at the time beat
their benchmarks over the subsequent 10-year period, with average annual value-added returns
ranging from 150 to 748 basis points over that period. After the low point of the 2008–2009
financial crisis, 8 of the 11 investment strategies we managed at the time beat their benchmarks
over the subsequent 5-year period, with 7 of those strategies delivering greater than 290 basis
points of average annual excess returns. While the current market environment is different from
these past periods, our teams have the experience and discipline to navigate volatile markets
like we have seen in recent periods. We believe maintaining a stable and predictable business
model will allow them to remain focused on pursuing those opportunities on behalf of the
clients and investors we serve.
The stability of our business model allows us to remain focused on Who We Are: Artisan Partners
is a high value-added investment management firm designed for talent to thrive in a growth-
oriented culture. In the remainder of this letter, I want to explain the long-term asset allocation
trends we see creating opportunities for our high value-added firm. We believe the combination
of these emerging opportunities and our talent-focused business model will result in long-term
growth. I hope you will find this discussion helpful.
2015 ANNUAL REPORT
P. 3
Our business
model allows
us to remain
focused on
Who We Are.
SHAREHOLDER LET TER
P. 4
Who We Are
High Value-Added Investment Firm
Active Strategies
Autonomous Franchises
Process-Driven Results
Talent-Driven Business Model
Designed for Investment Talent to Thrive
Managed by Business Professionals
Structured to Align Interests
Thoughtful Growth
Active Talent Identification
Entrepreneurial Commitment
Focus on Long-Term Global Demand
2015 ANNUAL REPORT
P. 5
The Long-Term Trend
C H A N G I N G A SS E T
A L LO C AT I O N S
Throughout our firm’s history, we have tried to design, launch and evolve our investment strategies in
response to and consistent with growing and sustainable long-term demand from sophisticated clients
and investors. For example, when we launched our Non-U.S. Growth strategy in 1996, most U.S.
institutional investors were not yet categorizing non-U.S. investments by investment style, and relatively
few financial intermediaries were allocating assets to non-U.S. products at all. We saw an emerging
demand for strategies that would diversify equity portfolios by investment style and geography. Our Non-
U.S. Growth strategy has grown to $30.2 billion in AUM as of the end of 2015. And our Non-U.S. Value
strategy, which we launched in 2002, had $16.3 billion in AUM at the end of the year.
During the early 2000s, our portfolio managers began to note that a company’s corporate domicile was
becoming a weaker indicator of whether an investment was truly domestic or international. Sophisticated
clients and investors were recognizing the same phenomenon and appreciating that it did not make
sense to restrict a great investor to only or primarily investing in companies domiciled in (or outside of)
the U.S. In this environment, we designed and launched our global strategies, which have had outstanding
investment performance and demand from clients across the globe. At the end of 2015, the Global Value,
Global Opportunities and Global Equity strategies had $13.9 billion, $7.6 billion and $786 million in assets
under management, respectively. The Global Opportunities strategy alone saw over $2.0 billion in net
inflows last year.
We are currently seeing another long-term trend in which sophisticated clients and investors are demanding
a broader array of financial products to build portfolios that are more focused on generating outcomes and
managing risk. We illustrate the broadening spectrum with the asset allocation diagram below.
A SS E T A L LO C AT I O N S
“Traditional”
Active
S
E
T
A
D
N
A
M
R
O
T
S
E
V
N
I
PA SS I V E
AC T I V E
Emerging
Historical
A LT E R N AT I V E
The diagram is not intended to, and does not, represent any particular data set. It is a simplified representation of Artisan
management’s view of historical and emerging distributions of asset allocations.
SHAREHOLDER LET TER
P. 6
The “historical” curve represents the assets that have amassed over time in constrained “style box”
strategies, which provide exposures limited by the index universe and investor appetite for tracking
error. Standardized constraints allow investors to easily bucket managers and products by style and
category. Selecting strategies from multiple style boxes was (and remains, to a lesser extent) a
traditional approach to asset allocation and equity portfolio diversification. As dollars continued to
flow into these strategies, we saw industry-wide supply exceed long-term demand, which is
illustrated by the flattening of the curve. We believe the “emerging” curve is a better representation of
investor allocations going forward.
Traditional active management will continue to play a significant role. As of December 31, 2015,
approximately $12 trillion of the $15 trillion of assets invested in U.S. mutual funds was invested in
actively managed funds. Style box categories will remain an important part (in many cases, the most
important part) of many investors’ portfolios.
However, as has been discussed in the financial press and elsewhere, the relative role of traditional
active management is shrinking, as assets move to passive products (such as index and smart beta
products) on the left side of the diagram and to alternative products (such as hedge fund, private
equity and real asset products) on the right side.
This flattening of the curve is the result of long-term shifts in asset allocation, both by individual
investors and by sophisticated institutional investors and financial intermediaries, which represent
the core of Artisan Partners’ client base. In general terms, investors are transitioning from an asset
allocation approach focused on a mix of relatively constrained exposures (e.g., a mix of equity and
fixed income style box strategies) to an approach focused more on achieving outcomes and
managing risk through the use of a broader array of financial instruments.
We believe this shift is the result of many factors, including market experiences over the last two
decades, the changing demographic landscape, and the technological and financial innovation that
has supplied a multitude of passive and inexpensive exposure-oriented products.
Sophisticated investors are
demanding actively managed
strategies focused on
generating outcomes and
managing risks.
2015 ANNUAL REPORT
P. 7
Consider the baby boomer generation. As baby boomers enter or near retirement in today’s prolonged
low interest rate environment, low fixed-income yields are causing traditional retirement portfolios to
generate lower-than-expected income. Increasing allocations to equity is a non-starter because retirees
are least able to withstand the equity market volatility we have seen over the last 20 years. Faced with the
choice between low yields and higher risk, baby boomers are increasingly in need of an alternative
approach: investment products that can generate the needed income in a low-yield environment without
the same degree of risk associated with increased equity exposure.
For different reasons, members of Generation X and millennials are also driving the shift away from
traditional approaches to asset allocation. Since 1990, when Gen Xers first started to enter the workforce,
the S&P 500® has generated average annual returns of over 9.0% and a cumulative return of over 900%. In
the 2002 dot-com crash, though, the S&P 500® declined over 47% peak to trough, and in the 2008–2009
financial crisis, the S&P 500® declined by over 54% peak to trough. Those experiences have shaped the way
Gen Xers think about investing, making them more cautious about equity markets than one might think
given cumulative market returns over the last 25 years.
Like Generation X, millennials are entering their prime income-earning years skeptical about traditional
approaches to investing. The 2008–2009 financial crisis and aftermath frame their thinking about investing,
as well as their view of financial institutions. Skepticism about markets—together with large amounts of
student debt and an uncertain and changing job market—has made millennials particularly risk averse.
Studies show affluent millennials hold over 50% of their financial wealth in cash. We believe the experience
and needs of Gen Xers and millennials—as has been the case with baby boomers—are driving them
away from traditional investment portfolios and, for Gen Xers and millennials in particular, toward
investment portfolios and products that emphasize risk management.
In light of these changing attitudes and needs, investors are increasingly looking for something other than
a set of traditionally diversified exposures. They are looking for outcomes that meet their financial needs
within their risk tolerances. And to generate those outcomes, the financial institutions and advisors who
serve them are using a broad array of financial products and investment strategies, from passive products
to traditional active products to alternatives and everything in between. As we at Artisan Partners design
our next generation of strategies and evolve our existing strategies, we are aligning the strategies with
this long-term trend.
Opportunity
H I G H VA LU E -A D D E D
S T R AT E G I E S T H AT
B R I D G E T H E G A P
The use of a broader set of investment products has created obvious opportunities at the tails of the
asset allocation diagram on page 5. On the left side of the diagram, demand for passive and factor-
based investing has increased. On the right side, the rise in popularity of alternative assets, including
hedge funds, real assets and private equity, is reflected.
The products represented on the left side are low-margin, high-volume and distribution-oriented, all of
which are inconsistent with our business model. Accordingly, we are not looking to move in that direction.
Instead, the emerging opportunity for Artisan Partners is on the right side of the diagram—in particular, in
the space represented by the shaded area.
SHAREHOLDER LET TER
P. 8
This area identifies the growing demand for high value-added, active strategies that bridge the gap
between traditional active strategies and alternative strategies. In this space, investors who are using a
broader array of investment products to build outcome- and risk-based portfolios are allocating assets to
strategies that give talented managers greater flexibility to act on philosophy and judgment. These newer
strategies have broader investment universes and allow for more tools to manage risks and outcomes. We
believe both types of approaches—traditional active mandates and more flexible active mandates—have
a place in asset allocations, depending on the distinct preferences and risk tolerances of investors.
Our two emerging markets teams provide a relevant example. Our Emerging Markets team, led by
portfolio manager Maria Negrete-Gruson, has been employing a traditional active emerging markets
strategy for the past decade focusing on companies that are mostly domiciled in emerging countries
I N V E S T M E N T
S T R AT E G Y T I M E L I N E
G R O W T H
G LO B A L
E Q U I T Y
U. S . VA LU E
G LO B A L
VA LU E
E M E R G I N G
M A R K E T S
C R E D I T
D E V E LO PI N G
W O R L D
DEVELOPING
WORLD
July 1, 2015
HIGH INCOME
April 1, 2014
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
GLOBAL
SMALL-CAP
GROWTH
July 1, 2013
GLOBAL
EQUITY
April 1, 2010
GLOBAL
OPPORTUNITIES
February 1, 2007
GLOBAL
VALUE
July 1, 2007
EMERGING
MARKETS
July 1, 2006
VALUE
EQUITY
July 1, 2005
NON-U.S.
SMALL-CAP
GROWTH
January 1, 2002
NON-U.S.
VALUE
July 1, 2002
U.S. MID-CAP
VALUE
April 1, 1999
U.S. SMALL-CAP
VALUE
June 1, 1997
U.S. MID-CAP
GROWTH
April 1, 1997
U.S. SMALL-CAP
GROWTH
April 1, 1995
NON-U.S.
GROWTH
January 1, 1996
2015 ANNUAL REPORT
P. 9
and that have unique access to the growth opportunities found in emerging economies. In contrast,
our newest strategy managed by Lewis Kaufman, the Developing World strategy, has the flexibility to
and does invest significantly in companies domiciled in developed markets but economically tied to
emerging markets. Both strategies pursue an emerging markets outcome—returns that reflect
emerging markets opportunities and economies—yet implement unique approaches in doing so.
Our High Income strategy, which we launched in 2014, also fits within the theme of increasing flexibility
through a broader investment universe. The strategy has the flexibility to invest in a variety of credit
instruments, including corporate bonds, bank loans, revolving loans and credit default swaps. This expands
the universe of fixed income investments available to our Credit team, so the team has more opportunities
to build a differentiated portfolio and generate alpha. While the strategy only has a short-term track record,
it has differentiated itself from its index and peers and grown to over $1 billion in assets.
While the flattening asset allocation curve is creating the new opportunities represented by the shaded
area, we believe it also creates long-term opportunities for our more traditional investment strategies. As
investors revisit their asset allocations and retool their portfolios, they are taking a fresh look at the
traditional strategies they have been using. If those strategies have not been adding value or do not offer
differentiated exposure, they are likely to be replaced—often with passive products, but also with better
performing traditional strategies or active strategies with greater flexibility, such as global products. That
is why we continue to evolve our existing strategies, adding degrees of freedom over time, as clients and
investors become more comfortable with allowing our portfolio managers greater investment flexibility.
For example, working with our clients in the Non-U.S. Growth strategy over the last 20 years, we have
been moving toward reducing the minimum country count from 20 to 15, increasing the single country
maximum from 20% to 30% of portfolio assets, and increasing the maximum exposure to emerging
markets from 15% of the portfolio to 35%. Consistent with our commitment to delivering on client
expectations and our preference for glacial change, none of these changes alone is dramatic. But over
time and together, the changes provide our Global Equity team significantly more flexibility to generate
alpha and create a differentiated portfolio.
We have made similar changes to our other more traditional strategies, and we expect to continue to do
so as investors and clients become increasingly comfortable with broader mandates. With these types of
changes, strong performance track records, differentiated portfolios and (most importantly) our
investment talent, I expect our strategies to remain relevant and in demand for years to come.
We continue to
evolve with long-term
trends in mind.
SHAREHOLDER LET TER
P. 10
Talent Focus
L E A D E R S H I P W I T H
T H E R I G H T PE O PL E
Whether with our more traditional strategies, global strategies or our latest generation strategies,
investment talent is and will remain the ultimate determinant of long-term success. This is nothing new.
We have always been a talent-driven business because we recognize successful active management will
always require talent: experience, insight, hard work and judgment.
In the past, I have used examples from Jim Collins’ book Good to Great to explain our approach to talent.
Collins’ “great company” characteristics boil down to the following: leadership with the right people, a
culture of discipline, and the hedgehog concept—which adapts an ancient Greek parable contrasting a
hedgehog, a methodical character that sticks to what it can do best, with a fox that excels at many things
but lacks greatness at any one.
At Artisan Partners, each of our investment teams is led by one or more portfolio managers with
tremendous experience and a tested approach to investment management and leading a successful
investment team. Each of our portfolio managers was either the founding portfolio manager of his or her
team or has a very long tenure with the team. As such, each portfolio manager has had the opportunity
to create and evolve a culture and process that works best for the team. Our autonomous structure gives
our portfolio managers the space, independence, resources and time to realize their visions and execute
their plans. We recognize great investing requires unique and creative individuals. We want to foster
idiosyncrasies, not stifle them.
Investment talent is the
ultimate determination of
long-term success for our clients,
our investors and our firm.
2015 ANNUAL REPORT
P. 11
A C U LT U R E
O F D I S C I PL I N E
Our autonomous team structure and centralized business operations allow our investment teams to
maximize their time spent on investing. Our business management supports the investment teams by
handling the day-to-day management of the business, allowing each team to focus on applying its unique
investment philosophy and process. We do not impose an investment philosophy or process on the
teams, nor do we dilute the purity of a team’s approach by centralizing research or making investment
decisions at the firm level. This structure allows the teams to focus primarily on making investment
decisions and generating returns for our clients. When we assess investment performance, though, we are
not only focused on the numbers. We always ask whether the investment team has been faithful to its
stated investment strategy and process. Integrity of philosophy and process keeps the teams focused on
what they do best and results in investment portfolios consistent with client expectations.
CREDIT TEAMDedicated RelationshipManagement U.S. VALUE TEAMDedicated RelationshipManagement GLOBAL EQUITY TEAM Dedicated RelationshipManagement GROWTH TEAM Dedicated RelationshipManagement Dedicated RelationshipManagement EMERGINGMARKETS TEAM Dedicated RelationshipManagement DEVELOPINGWORLD TEAM Dedicated RelationshipManagement Marketing &CommunicationsHumanCapitalInformation TechnologySecurities &Trade OperationsLegal & ComplianceDistribution & Client ServiceBusinessOperationsBUSINESSMANAGEMENTFinance SHAREHOLDER LET TER
P. 12
T H E H E D G E H O G
CO N C E P T
The essence of the hedgehog concept is aligning passion, ability and incentives in order to achieve
greatness. At Artisan Partners, we look to recruit and retain investment talent that has deeply passionate
beliefs about its investment philosophy. We are extremely selective in adding new investment talent. We
only add new teams when we believe we have identified a passionate and great investor who will fit well
within our high value-added culture. When we find these investors and bring them to Artisan Partners, we
provide them with autonomy to retain the purity of the investment philosophy they are so passionate
about. We protect their time to maximize the hours they devote to investment decisions. And we align
their economic interests with the experience of our clients and shareholders.
Our approach to talent has worked. As of December 31, 2015, the 5-year average annual returns of 8 of our
12 investment strategies with 5-year track records exceeded the returns of the applicable benchmark. Six
of those strategies beat their benchmarks on average by over 450 basis points per year during the period.
Our Global Opportunities and Global Equity strategies, both of which are open to new clients and
investors and have realizable capacity, beat their benchmarks by averages of over 600 and 550 basis
points, respectively, over that period. At the end of the year, 6 of our 8 investment strategies with 10-year
track records had added value relative to their broad performance benchmarks over that time period. And
since inception, 12 of our 15 investment strategies added value relative to their broad performance
benchmarks. All of our strategies continue executing their distinct investment processes with integrity.
Thoughtful and Patient Growth
If we accurately identify long-term asset allocation trends and continue to provide an environment in
which investment talent thrives, we believe long-term growth will follow. We have seen our thoughtful,
long-term approach result in growth throughout our history.
For example, over a decade ago we recognized that broker-dealers and other wealth managers were
centralizing their research efforts and beginning to operate with institutional-like decision-making
processes, which aligned with our targeted distribution model. So we designed a marketing strategy and
built out a team to distribute our investment strategies to broker-dealers and other financial intermediaries
in a targeted and efficient manner consistent with Who We Are.
2015 ANNUAL REPORT
P. 13
Since we began these efforts, AUM sourced through broker-dealers and other financial intermediaries has
grown to over $30 billion at the end of 2015. This has not only grown our business, but also diversified it. I
expect our intermediary business channel will continue growing as a percentage of our total business as
more 401(k) assets roll over into IRAs, the popularity of fee-based programs grows and wealth management
firms continue centralizing their investment decision-making processes.
The growth of our non-U.S. business is the result of a similar strategy. When we began designing and
launching our global strategies, we recognized these strategies would be attractive to investors in both
the U.S. and abroad. In response, we added distribution personnel in London and eventually launched the
Artisan Partners Global Funds to provide our strategies in pooled vehicles to non-U.S. investors. We have
continued methodically building out our non-U.S. distribution efforts, adding new offices in Australia and
Canada during 2015. At the end of the year, we had over $14 billion in assets sourced from clients and
investors outside of the U.S. Ten years ago that number was just over $200 million. As with our success in
the intermediary channel, our success overseas has grown and diversified our business, and non-U.S.
markets remain a significant opportunity for us.
$120
$100
$80
$60
$40
$20
$0
$120
$100
$80
$60
$40
$20
$0
AU M BY
D I S T R I B U T I O N
C H A N N E L
$ in billions
AU M BY C L I E N T
LO C AT I O N
$ in billions
2009
2010
2011
2012
2013
2014
2015
Intermediary
Retail
Institutional
2009
2010
2011
2012
2013
2014
2015
Non-U.S. Client AUM
U.S. Client AUM
The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.
SHAREHOLDER LET TER
P. 14
In addition to diversifying our business, we remain committed to managing our capacity and maintaining
fee rates consistent with our high value-added approach. We want to grow, but we want to do so
thoughtfully. We prioritize our commitment to existing clients and investors over short-term growth. We
preserve a strategy’s integrity and the investment team’s ability to generate alpha by closing strategies
when necessary. That approach to capacity management also allows us to maintain our above-average
fee rates. The capacity of our products is a scarce resource—so we are careful about the price we are
willing to accept to manage assets.
Consistent with these principles, in 2015, we announced plans to close our Non-U.S. Growth strategy in
phases over the course of 2016. At the end of the year, six of our other strategies were closed to most new
clients and investors. However, our Global Opportunities and Global Equity strategies—both of which
have strong long-term track records and are in asset categories we expect will continue growing—are
open to new clients and investors. We also continue to see strong early interest in our High Income and
Developing World strategies.
At Artisan Partners, we know Who We Are as a firm. Our core competency is high value-added active
investment management. As I have described here, we believe investors will continue to demand high
value-added actively managed strategies, both traditional strategies and newer outcome- and risk-based
strategies. If we continue providing an environment in which talented investors develop unique portfolios
in response to long-term demand and deliver alpha, we are confident long-term growth will result. Over
extended periods of time, our approach has proven successful for our clients, talent and shareholders. I
expect it will continue to do so in the future.
Thank you for your time and interest in our firm.
Sincerely,
Eric Colson
Chief Executive Officer
Artisan Partners
2015 ANNUAL REPORT
P. 15
We consciously
designed an
investment
culture that
allows our
talent to thrive.
LEVERAGE HIGH
DEGREES OF
EXPERIENCE AND
KNOWLEDGE WITHIN
A DISCIPLINED
INVESTMENT
PROCESS
JA M E S H A M E L
19YEARS INVESTMENT
EXPERIENCE
It is our
fundamental
belief that stocks
follow profits.
M AT T H E W K A M M
16YEARS INVESTMENT
EXPERIENCE
We focus on identifying
companies that possess
franchise characteristics
and are well positioned
for long-term growth.
C R A I G H C E PU K E N A S
27YEARS INVESTMENT
EXPERIENCE
We build position
sizes according
to our conviction
in profit cycles.
Our goal is to invest in
companies with franchise
characteristics that are
benefiting from an accelerating
profit cycle and are trading at
a discount to our estimate of
private market value.
ARTISAN PARTNERS
GROWTH TEAM
TEAM AUM
A S OF 12.31.15
$24.9
BILLION
M I LWAU K E E
GLOBAL OPPORTUNITIES
U.S. MID-CAP GROW TH
U.S. SMALL-CAP GROW TH
In many ways, 2015 was a continuation of themes we have been discussing for some time: The world
economy is struggling to build momentum, despite years of exceptionally accommodative central bank
policies. In a growth-scarce world, we believe investors will seek out companies capable of delivering
acceptable rates of growth based on profit catalysts that are not predicated on a vibrant macro
environment. In that sense, we believe this remains a reasonable environment for what we do—finding
defensible franchises exposed to identifiable, long-term profit cycles that are selling at reasonable
valuations.
We continue to believe there are a number of strong secular trends that can play a material role in
driving profit cycles for well-positioned franchises in a global macro environment unlikely to quickly
ignite into faster growth. These include biopharmaceutical innovation, industrial process innovation,
mobile Internet and the rising importance of cloud computing and data analytics, among others.
JA S O N W H I T E
16YEARS INVESTMENT
EXPERIENCE
Broad knowledge to us
means opportunistically
going wherever growth
occurs—any sector or
any geography.
JA M E S H A M E L
However, we will note that 2016 marks the seventh year since the global equity market bottom in 2009.
Given where we are in the cycle, we are also seeing considerable opportunities among companies we
believe can determine their own destinies, quite independent of the macro environment. These are
companies we believe can benefit primarily or additionally from strong internal change catalysts,
whether those are new management teams, new product lines, accretive acquisitions or other new
strategic initiatives.
EXPERIENCE
19YEARS INVESTMENT
In 2015, we also saw ongoing broadening and deepening of our team’s talent and decision-making
capabilities. As such, early in 2016 we were pleased to announce that Jason White had been named a
portfolio manager for all three of the strategies our team manages. Jason joined our team in 2000 and
was promoted to associate portfolio manager in 2011, in recognition of the value of his recommendations
over the years and our interest to have him broaden his leadership and influence on the portfolios.
Jason continues to progress in a positive direction, and this recent promotion reflects that.
Title changes on our team rarely alter our process. Rather, they are a reflection of the natural evolution
of our team-building process, which is structured to optimize deep industry and sector expertise while
applying the broad knowledge and judgment critical to successful investment decision-making.
It is our
fundamental
belief that stocks
follow profits.
AR TISAN PAR TNERS
GROW TH TE AM STR ATEGIES
3 YR
1 YR
LEVERAGE HIGH
DEGREES OF
EXPERIENCE AND
KNOWLEDGE WITHIN
12.61
9.12
A DISCIPLINED
11.63
8.18
INVESTMENT
PROCESS
7.69
(2.36)
AVER AGE ANNUAL TOTAL RE TURNS (%)
5 YR
10 YR
INCEPTION
12.11
11.13
6.08
—
—
—
9.42
GROSS
8.52
NET
3.01
A R T I S A N G LO B A L O PP O R T U N I T I E S
(INCEPTION: FEBRUARY 1, 2007)
M S C I A L L CO U N T RY W O R L D I N D E X
A R T I S A N U. S . M I D - C A P G R O W T H
(INCEPTION: APRIL 1, 1997)
3.44
2.48
15.44
13.03
11.11
15.55
GROSS
14.38
12.00
10.09
14.48
NET
M AT T H E W K A M M
R U SS E L L M I D C A P ® I N D E X
(2.44)
14.18
A R T I S A N U. S . S M A L L- C A P G R O W T H
(INCEPTION: APRIL 1, 1995)
1.61
0.60
13.85
12.73
11.43
9.96
7.99
16YEARS INVESTMENT
8.18
7.13
8.87
9.94
13.76
12.64
GROSS
NET
R U SS E L L 20 0 0 ® I N D E X
(4.41)
11.65
9.18
6.80
8.79
EXPERIENCE
Source: Artisan Partners, MSCI, Russell as of December 31, 2015. Past performance is
not indicative of future results and represents investment composite returns.
We focus on identifying
companies that possess
franchise characteristics
and are well positioned
for long-term growth.
TEAM AUM
A S OF 12.31.15
$24.9
BILLION
C R A I G H C E PU K E N A S
27YEARS INVESTMENT
EXPERIENCE
We build position
sizes according
to our conviction
in profit cycles.
JA S O N W H I T E
16YEARS INVESTMENT
EXPERIENCE
Broad knowledge to us
means opportunistically
going wherever growth
occurs—any sector or
any geography.
OUR TEAM COMBINES
THE BENEFITS
OF STRONG
LEADERSHIP WITH
THE CREATIVE IDEAS
OF EXPERIENCED
RESEARCH ANALYSTS
M A R K YO C K E Y
35YEARS INVESTMENT
EXPERIENCE
For us, sustainability is
incredibly important.
We’re looking for
companies that will
grow for a number
of years.
C H A R L E S - H E N R I H A M K E R
26YEARS INVESTMENT
EXPERIENCE
Our goal is to invest
in well-managed
businesses that
generate strong
earnings and free
cash flow growth.
A N D R E W E U R E T I G
12YEARS INVESTMENT
EXPERIENCE
Our process blends our pursuit
of sustainable growth priced
at a reasonable valuation with
our thematic approach of
identifying global secular trends.
We want to find
companies that do
something unique
for their customers
that cannot be
easily replicated.
TEAM AUM
A S OF 12.31.15
ARTISAN PARTNERS
GLOBAL EQUITY TEAM
S A N FR A N C I S CO | N E W YO R K | LO N D O N | S I N G A P O R E
$32.4
BILLION
GLOBAL EQUIT Y
GLOBAL SMALL-CAP GROW TH
NON-U.S. GROW TH
NON-U.S. SMALL-CAP GROW TH
The close of 2015 marked the 20-year anniversary of our investment team at Artisan Partners. The past
two decades have been a period of industry evolution—marked by the rising impacts of globalization,
the rapid growth of emerging markets, the introduction of disruptive technologies—all contributing to
a major expansion of the investable universe.
While our investment philosophy and process has remained consistent throughout those 20 years, our
team and research capabilities have evolved along with the industry. What began as a small team in San
Francisco—close to the heart of Silicon Valley, the home of many global technology and biotech
companies—has grown into a 24-person research franchise in four offices globally. Our team today
reflects the increasingly global nature of our business—collectively we’ve lived in 20 different countries,
represent eight countries of citizenship and speak eight different languages. Our team is extremely well
equipped to identify secular growth trends globally, and to capitalize on those trends by investing in
companies best positioned to benefit.
These evolutions led us to launch our global strategies (Global Equity in 2010 and Global Small-Cap
Growth in 2013), which were a natural extension of the research process we have had in place since
1995. Even in the early days of our team’s history, we researched U.S.-based companies that were
competitors or suppliers to the companies we owned in our non-U.S. portfolios. We had detailed
M A R K YO C K E Y
analysis, financial models and management meetings with these companies, even though they were
out of scope for our existing non-U.S. portfolios. Over time, as globalization continued to change the
investing landscape, it made sense to consider these companies as investment candidates and be able
to invest in them within portfolios that offered us that flexibility.
35YEARS INVESTMENT
EXPERIENCE
Given the lifecycle of our team’s investment strategies, we determined this is a prudent time to begin
closing our Non-U.S. Growth strategy in order to protect our ability to generate alpha for existing clients
and to preserve capacity for the growth of our Global Equity strategy. While there are many factors that
we take into consideration, the most important one in our minds is protecting the integrity of the
For us, sustainability is
investment process for our clients. Our goal is to continue adding value for our clients over the long
incredibly important.
term across all of our strategies and we believe the decision to close the Non-U.S. Growth strategy is in
the best interest of our clients and our team.
We’re looking for
companies that will
Stock picking is our passion, and we look forward to scouring the globe in search of new opportunities
grow for a number
in the years to come.
of years.
AR TISAN PAR TNERS
GLOBAL EQUIT Y TE AM STR ATEGIES
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
10.80
11.91
OUR TEAM COMBINES
THE BENEFITS
2.18
OF STRONG
1.16
LEADERSHIP WITH
THE CREATIVE IDEAS
(2.36)
OF EXPERIENCED
7.72
RESEARCH ANALYSTS
6.65
7.69
—
—
A R T I S A N G LO B A L E Q U I T Y
(INCEPTION: APRIL 1, 2010)
M S C I A L L CO U N T RY W O R L D I N D E X
A R T I S A N G LO B A L
S M A L L- C A P G R O W T H
(INCEPTION: JULY 1, 2013)
M S C I A L L CO U N T RY W O R L D
S M A L L C A P I N D E X
(1.04)
—
A R T I S A N N O N - U. S . G R O W T H
(INCEPTION: JANUARY 1, 1996)
(2.83)
(3.71)
7.70
6.72
M S C I E A FE I N D E X
(0.81)
5.01
3.60
A R T I S A N N O N - U. S .
S M A L L- C A P G R O W T H
(INCEPTION: JANUARY 1, 2002)
12.63
11.24
9.94
8.58
9.24
7.89
M S C I E A FE S M A L L C A P I N D E X
9.59
10.44
6.32
11.65
10.55
6.08
—
—
—
—
—
—
—
—
—
12.44
GROSS
11.33
NET
6.90
6.37
GROSS
5.31
NET
7.25
8.13
C H A R L E S - H E N R I H A M K E R
10.60
6.37
GROSS
7.15
NET
9.58
5.40
26YEARS INVESTMENT
3.03
4.42
EXPERIENCE
9.39
14.54
GROSS
NET
8.04
13.13
Our goal is to invest
in well-managed
businesses that
4.55
generate strong
earnings and free
cash flow growth.
10.06
Source: Artisan Partners and MSCI as of December 31, 2015. Past performance is not
indicative of future results and represents investment composite returns.
A N D R E W E U R E T I G
12YEARS INVESTMENT
EXPERIENCE
We want to find
companies that do
something unique
for their customers
that cannot be
easily replicated.
TEAM AUM
A S OF 12.31.15
$32.4
BILLION
WE SHARE
A STRONG
COMMITMENT
TO VALUE,
QUALITY AND
RISK CONTROL
JA M E S K I E FFE R
27YEARS INVESTMENT
EXPERIENCE
Our job is to
buy cash flows
as cheaply and as
safely as we can.
G E O R G E S E R T L
23YEARS INVESTMENT
EXPERIENCE
We want the business
on our side, the
balance sheet on our
side and valuation
on our side.
We seek cash-producing
businesses in strong financial
condition that are selling at
undemanding valuations.
DA N I E L K A N E
17YEARS INVESTMENT
EXPERIENCE
We tend to go toward
fear and uncertainty
because that pressure
tends to open up
the valuation.
ARTISAN PARTNERS
U.S. VALUE TEAM
TEAM AUM
A S OF 12.31.15
$10.4
BILLION
AT L A N TA
VALUE EQUIT Y
U.S. MID-CAP VALUE
U.S. SMALL-CAP VALUE
As we look back at the market environment in 2015, we think the year was a helpful reminder to
investors that markets do not always move in one direction. Markets in general had gone a long time
without a major pullback, and we had complained for a long time that too much of the market was fully
or fairly valued. But we witnessed a more bifurcated market in 2015, with increasing differentials
between sectors and styles.
As bottom-up stock pickers, we value fundamentals and valuation—two things that we believe have
had little input into market performance over the past few years. In our view, fundamentals have taken
a backseat while momentum carried many names and valuations away from us. The bifurcated market
kept rewarding stocks with momentum already behind them and unjustly punishing unpopular stocks
beyond what we view as reasonable. The environment was one in which no price was too high to pay
in the market for things that were working, and no price was too low for things that were unloved.
S CO T T SAT T E R W H I T E
35YEARS INVESTMENT
EXPERIENCE
We are reminded of the Benjamin Graham quote, “In the short run, the market is a voting machine, but
in the long run, it is a weighing machine.” We have stayed true to our philosophy and process despite
what we view as irrational market behavior. Our focus remains on identifying companies that meet our
strict investment criteria—attractive valuation, sound financial condition and attractive business
economics—and we are holding names consistent with that strategy. We have gone toward fear and
uncertainty in order to find quality companies selling at undemanding valuations.
We desire companies
that are trading at a
distinct discount to
underlying worth.
JA M E S K I E FFE R
27YEARS INVESTMENT
Today, we would say the markets look more compelling to us going into 2016—we believe our
portfolios have a good collection of names that have been out of favor for some time. It has been
rough getting to this point, but on an absolute and relative basis, forward expectations on many of our
holdings are low, and we believe there is a large amount of potential alpha in our holdings. This market
has an uncharacteristic tenor to it, so you never know what’s going to happen in the short term, but we
see a large valuation gap as a result of the bifurcation. Regardless of the market environment, we remain
focused on our disciplined approach, which requires a long-term horizon. We sell what is working and
buy where there is fear and uncertainty. This discipline is not typically rewarded in the short run or in a
momentum market, but makes rational sense to us longer term.
EXPERIENCE
2016 U P DAT E
Artisan Partners announced on February 23, 2016, that it will cease managing assets in the Artisan U.S.
Small-Cap Value Strategy. In connection with that decision, the board of directors of Artisan Partners
Funds approved the merger of Artisan Small Cap Value Fund into Artisan Mid Cap Value Fund, which is
expected to close in May 2016. The U.S. Value team will continue to manage the Artisan U.S. Mid-Cap
Value and Artisan Value Equity Strategies.
Our job is to
buy cash flows
as cheaply and as
safely as we can.
AR TISAN PAR TNERS
U. S. VALUE TE AM STR ATEGIES
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
WE SHARE
A STRONG
COMMITMENT
7.20
(8.30)
TO VALUE,
6.46
(8.94)
QUALITY AND
15.01
0.92
RISK CONTROL
A R T I S A N VA LU E E Q U I T Y
(INCEPTION: JULY 1, 2005)
R U SS E L L 10 0 0 ® I N D E X
8.52
7.76
5.96
5.12
6.45
GROSS
5.60
NET
12.44
7.40
7.64
A R T I S A N U. S . M I D - C A P VA LU E
(INCEPTION: APRIL 1, 1999)
(8.77)
(9.62)
8.80
7.80
9.34
8.34
8.32
7.32
12.92
GROSS
11.85
NET
R U SS E L L M I D C A P ® I N D E X
(2.44)
14.18
11.43
7.99
8.88
G E O R G E S E R T L
A R T I S A N U. S . S M A L L- C A P VA LU E
(INCEPTION: JUNE 1, 1997)
(11.24)
(12.13)
2.32
1.30
2.47
1.45
10.60
5.34
23YEARS INVESTMENT
4.32
9.54
GROSS
NET
R U SS E L L 20 0 0 ® I N D E X
(4.41)
11.65
9.18
EXPERIENCE
6.80
7.45
Source: Artisan Partners and Russell as of December 31, 2015. Past performance is
not indicative of future results and represents investment composite returns.
We want the business
on our side, the
balance sheet on our
side and valuation
on our side.
TEAM AUM
A S OF 12.31.15
$10.4
BILLION
DA N I E L K A N E
17YEARS INVESTMENT
EXPERIENCE
We tend to go toward
fear and uncertainty
because that pressure
tends to open up
the valuation.
S CO T T SAT T E R W H I T E
35YEARS INVESTMENT
EXPERIENCE
We desire companies
that are trading at a
distinct discount to
underlying worth.
OUR TEAM
IS COMPRISED OF
DEEPLY ROOTED
VALUE INVESTORS
WHO HAVE
APPLIED THE SAME
PHILOSOPHY THEIR
ENTIRE CAREERS
DAV I D SA M R A
23YEARS INVESTMENT
EXPERIENCE
We want to own
high-quality businesses
that have sustainable
competitive advantages
that translate into
attractive returns
on capital.
DA N I E L O ' K E E FE
23YEARS INVESTMENT
EXPERIENCE
Key components to our
investment philosophy
are valuation discipline,
a long-term perspective
and a focus on risk
management.
Our goal is to invest in high
quality, undervalued companies
with strong balance sheets
and shareholder-oriented
management teams.
ARTISAN PARTNERS
GLOBAL VALUE TEAM
TEAM AUM
A S OF 12.31.15
$30.2
BILLION
S A N FR A N C I S CO
GLOBAL VALUE
NON-U.S. VALUE
After several years of increasingly lofty valuations, volatility picked up across global equity markets
starting mid-2015. As value investors, we don’t fear volatility. We embrace it, as we see it as a sign that
some rationality is returning to markets. Volatility also helps open up gaps between long-term intrinsic
value and stock prices, giving us opportunities to buy quality businesses at attractive discounts to their
intrinsic values. Market momentum over the past few years resulted in larger-than-normal cash balances
in our portfolios that we are now deploying into new as well as existing holdings.
As volatility increased and valuations improved, we chose to reopen the Global Value strategy to
pooled vehicles in 2015. We closed the Global Value strategy in 2013 and 2014, first to separate accounts
and then across all pooled vehicles, to protect the integrity of our investment process and strategy. At
that time, attractive performance results generated strong demand, which translated to relatively quick
asset growth. When combined with a shrinking set of value-oriented investment opportunities, we felt
it was prudent to manage the pace of growth and diversification of assets under management by
DAV I D SA M R A
23YEARS INVESTMENT
closing the strategy. More recently, we have seen a widening of the portfolio’s discount to intrinsic
value to more reasonable levels, and cash levels are falling from recent highs, prompting us to reopen
the strategy.
EXPERIENCE
We were also pleased to announce the promotion of two long-term senior analysts, Ian McGonigle and
Justin Bandy, to associate portfolio managers. These promotions reflect our confidence in Ian’s and
Justin’s abilities to further broaden their influence on the strategies we manage, as well as the value
they have created for clients since joining our team.
We want to own
high-quality businesses
We remain focused on key elements of our process, which we believe serve us well during periods of
that have sustainable
heightened market turmoil. We continue to seek quality companies with strong balance sheets that are
competitive advantages
selling at distinct discounts to intrinsic value with shareholder-oriented management teams.
that translate into
attractive returns
on capital.
AR TISAN PAR TNERS
GLOBAL VALUE TE AM STR ATEGIES
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
A R T I S A N G LO B A L VA LU E
(INCEPTION: JULY 1, 2007)
M S C I A L L CO U N T RY W O R L D I N D E X
A R T I S A N N O N - U. S . VA LU E
(INCEPTION: JULY 1, 2002)
OUR TEAM
IS COMPRISED OF
11.70
(1.83)
DEEPLY ROOTED
10.64
(2.77)
VALUE INVESTORS
WHO HAVE
7.69
(2.36)
APPLIED THE SAME
9.96
(0.64)
PHILOSOPHY THEIR
8.95
(1.56)
ENTIRE CAREERS
11.66
10.58
6.08
9.09
8.09
—
—
—
9.25
8.24
7.64
GROSS
6.61
NET
2.14
12.67
GROSS
11.61
NET
M S C I E A FE I N D E X
(0.81)
5.01
3.60
3.03
5.93
Source: Artisan Partners and MSCI as of December 31, 2015. Past performance is not
indicative of future results and represents investment composite returns.
DA N I E L O ' K E E FE
23YEARS INVESTMENT
EXPERIENCE
Key components to our
investment philosophy
are valuation discipline,
a long-term perspective
and a focus on risk
management.
TEAM AUM
A S OF 12.31.15
$30.2
BILLION
M A R I A N E G R E T E - G R U S O N
24YEARS INVESTMENT
EXPERIENCE
We focus on companies
with direct and concentrated
exposure to sustainable
growth trends.
OUR TEAM BENEFITS
FROM EXTENSIVE
EMERGING MARKETS
EXPERIENCE, CONTINUITY
OF OUR INVESTMENT
PROFESSIONALS
AND A RIGOROUS
RESEARCH PROCESS
Our goal is to invest in
companies that are uniquely
positioned to benefit from the
growth potential in emerging
markets and that possess a
sustainable global competitive
advantage.
TEAM AUM
ARTISAN PARTNERS
EMERGING MARKETS TEAM
A S OF 12.31.15
$571
MILLION
N E W YO R K | W I L M I N G TO N
EMERGING MARKETS
As we reflect on the 2015 calendar year, it brings us back to our two core beliefs about investing in
emerging markets:
•
Emerging markets are growing, and we believe they will continue to provide growth opportunities in
excess of developed markets over the long term
•
Emerging markets will remain volatile
The second core belief was certainly true of 2015. Emerging markets faced serious structural headwinds
during the year, triggering a sharp decline in stock prices, and marked the worst year for emerging
markets since 2011. Volatility was driven in large part by economic growth concerns in China, among
other economies, the devaluation of the yuan and falling commodity prices. As career investors in
emerging markets, we expect this type of macro uncertainty and volatility over time, as economic
evolution is never a smooth process.
M A R I A N E G R E T E - G R U S O N
24YEARS INVESTMENT
As bottom-up, fundamental investors, we remain focused on what we can control, which is remaining
steadfast to our disciplined investment philosophy. Even in this volatile macro environment, there are
several bright spots in both emerging and frontier markets. These are, generally speaking, economies
that are either less blighted by private-sector debt or have other reasons to be optimistic about growth.
As such, we remain focused on identifying companies with unique access to growth in these markets
and sustainable competitive advantages. Emphasizing unique access to growth helps us avoid
companies with relatively easy access to general growth that could be fleeting. And we believe
sustainable competitive advantages are key to a company’s ability to survive in times of crisis—a
sustainable competitive advantage might be challenged in weak business cycles but not destroyed.
EXPERIENCE
Regardless of the market environment, our goal is to identify companies that are undervalued relative
to their sustainable earnings growth potential. If we do that correctly, we are confident the portfolio will
be well positioned to deliver attractive performance results over the long term.
We focus on companies
with direct and concentrated
exposure to sustainable
growth trends.
ARTISAN PARTNERS
EMERGING MARKE TS TE AM STR ATEGY
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
A R T I S A N E M E R G I N G M A R K E T S
(INCEPTION: JULY 1, 2006)
M S C I E M E R G I N G M A R K E T S I N D E X
(5.56)
OUR TEAM BENEFITS
FROM EXTENSIVE
EMERGING MARKETS
(10.95)
EXPERIENCE, CONTINUITY
(11.90)
OF OUR INVESTMENT
PROFESSIONALS
AND A RIGOROUS
RESEARCH PROCESS
(14.92)
(6.76)
(6.55)
(6.26)
(7.25)
(4.80)
—
—
—
2.82
GROSS
1.75
NET
3.05
Source: Artisan Partners and MSCI as of December 31, 2015. Past performance is not
indicative of future results and represents investment composite returns.
TEAM AUM
A S OF 12.31.15
$571
MILLION
B RYA N K R U G
15YEARS INVESTMENT
EXPERIENCE
Our ability to invest in
debt across the capital
structure is a key
differentiator of
our strategy.
DEDICATED TO DEEP
FUNDAMENTAL
CREDIT RESEARCH,
WHICH SERVES AS A
FOUNDATION TO OUR
HIGH-CONVICTION
INVESTMENT PROCESS
Our goal is to invest in issuers
with high-quality business
models that have compelling
risk-adjusted return characteristics.
ARTISAN PARTNERS
CREDIT TEAM
TEAM AUM
A S OF 12.31.15
$989
MILLION
K A N S A S C I T Y
HIGH INCOME
Weakness in the non-investment grade credit market persisted throughout 2015, leading to the asset
class’ first calendar-year decline since 2008—and its first negative calendar year in a non-recessionary
environment. Over the past 18 months, we have seen a material re-pricing of risk. Yields troughed in
June 2014 below 5% and subsequently rose over 400 basis points over the next year and a half. In our
view, this has created an expanded opportunity set.
We believe our bottom-up, fundamental strategy is well positioned in this type of environment.
In situations where investors must be discriminating and diligent in their efforts to find the right balance
of risk and reward, we are confident in the merits of our investment philosophy and process. As we look
for value in high-quality businesses in the non-investment grade space, we maintain our approach that
is ratings-aware but agnostic. As it happens, lower-rated debt is often where we find the most
mispricing of good businesses in the market. We attribute this mispricing to the emphasis rating
agencies place on hard assets to the detriment of asset-light businesses that have meaningful intangible
assets, such as intellectual property and technology. We rely primarily on our own fundamental research
B RYA N K R U G
15YEARS INVESTMENT
to determine the creditworthiness of a given company. As a result, we will oftentimes be attracted to
businesses that we believe are underrated.
We are attracted to companies with resilient business models and strong competitive positioning that
we believe will show profit improvement and financial deleveraging. We seek businesses with recurring
revenue and low capital intensity. As an active management team with high degrees of freedom, we
believe the disciplined execution of our process will enable us to build a focused portfolio of non-
investment grade debt securities that is positioned well regardless of the market environment.
EXPERIENCE
Our ability to invest in
debt across the capital
structure is a key
differentiator of
our strategy.
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
AR TISAN PAR TNERS
CREDIT TE AM STR ATEGY
—
—
—
—
—
2.59
GROSS
1.85
NET
—
(2.94)
A R T I S A N H I G H I N CO M E
(INCEPTION: APRIL 1, 2014)
B o fA M E R R I L L LY N C H U. S .
H I G H Y I E L D M A S T E R I I I N D E X
—
—
2.02
DEDICATED TO DEEP
1.28
FUNDAMENTAL
CREDIT RESEARCH,
(4.64)
WHICH SERVES AS A
FOUNDATION TO OUR
HIGH-CONVICTION
INVESTMENT PROCESS
—
Source: Artisan Partners and BofA Merrill Lynch as of December 31, 2015. Past
performance is not indicative of future results and represents investment
composite returns.
TEAM AUM
A S OF 12.31.15
$989
MILLION
L E W I S K AU FM A N
16YEARS INVESTMENT
EXPERIENCE
Our investment
philosophy is built
on the importance
of compounding.
WE EMPHASIZE
FINANCIALLY
SOUND, FREE CASH
FLOW-GENERATIVE
COMPANIES WITH
BUSINESS MODELS
THAT ARE NOT
PREDICATED ON
FINANCIAL LEVERAGE
We seek to capitalize on
opportunities in developing
world economies by investing
in companies that compound
business value over a market
cycle, while mitigating the
volatility of returns.
ARTISAN PARTNERS
DEVELOPING WORLD TEAM
A S OF 12.31.15
TEAM AUM
$374
MILLION
S A N FR A N C I S CO
DEVELOPING WORLD
We joined Artisan Partners in February 2015, and launched our first investment strategy—Artisan
Developing World Strategy—in July 2015. Our team is based in San Francisco.
Our investment philosophy is predicated on the importance of compounding. At the stock level, that
means emphasizing what we call business value compounders. While earnings development can be an
important driver of share price performance over time, compounded business value is a more robust
concept than earnings. A business value compounder can grow at above-average rates over a market
cycle, in part because adverse movements in capital markets or business cycles should not impair
underlying business progression. We want to own companies that emerge stronger from weak
economic conditions, rather than those that may retrench from their core strategic objectives. We also
emphasize companies of a domestic-demand orientation, as we believe low penetration of basic goods
and services remains the essence of the emerging markets story.
L E W I S K AU FM A N
At the portfolio level, we seek to mitigate the volatility of returns. To this end, we consider multiple
dimensions of risk beyond sector and country diversification, such as correlation risk and currency risk.
For example, we may target investments that are not perfectly correlated to emerging markets fund
flows, or investments in small-cap companies with the potential to transcend broad market movements.
We also seek to mitigate currency volatility by emphasizing countries and currencies that are not overly
dependent on foreign capital. Notably, we have been focused on incorporating currencies with
managed floats but visible imbalances, such as the Chinese renminbi and Saudi Arabian riyal, into this
framework.
EXPERIENCE
16YEARS INVESTMENT
On balance, we believe our investment approach provides a useful framework for navigating the
current environment. Underlying value creation for most companies in the portfolio continues even as
capital markets remain volatile and the economic backdrop deteriorates. We would expect share prices
to be correlated to underlying business value creation over the medium term.
Our investment
philosophy is built
on the importance
of compounding.
AR TISAN PAR TNERS
DE VELOPING WORLD TEAM STR ATEGY
AVER AGE ANNUAL TOTAL RE TURNS (%)
1 YR
3 YR
5 YR
10 YR
INCEPTION
A R T I S A N D E V E LO PI N G W O R L D
(INCEPTION: JULY 1, 2015)
M S C I E M E R G I N G M A R K E T S I N D E X
—
—
WE EMPHASIZE
FINANCIALLY
SOUND, FREE CASH
—
FLOW-GENERATIVE
—
COMPANIES WITH
BUSINESS MODELS
—
THAT ARE NOT
PREDICATED ON
FINANCIAL LEVERAGE
—
—
—
—
—
—
(11.75)
GROSS
(12.23)
NET
—
(17.35)
Source: Artisan Partners and MSCI as of December 31, 2015. Returns for periods
less than one year are not annualized. Past performance is not indicative of future
results and represents investment composite returns.
TEAM AUM
A S OF 12.31.15
$374
MILLION
FINANCIAL HIGHLIGHTS
P. 30
Our financial model
allows us to stay
focused on managing
our business for the
long term.
2015 ANNUAL REPORT
P. 31
Financial Highlights
FE L LO W
S H A R E H O L D E R S ,
Although market volatility is inherent in managing assets, we believe it is important to shield judgment
and decision making from emotional responses that typically accompany market swings. Our financial
model is based on principles that provide financial flexibility through market volatility. These principles
allow us to prioritize our business decisions and avoid short-term reactions.
Artisan Partners’ Financial Principles:
• Focused long-term approach to growth
• Disciplined maintenance of fees
• High variable cost structure
• Conservative balance sheet
• Aligned interests
Despite market declines and client cash outflows in 2015, we ended the year with just short of $100 billion
in AUM across seven autonomous investment teams. This is a compound annual growth rate of 12% from
the $57 billion of AUM across five autonomous teams just five years ago.
More specifically, in 2015, our AUM decreased 7.5%, or $8.1 billion, to $99.8 billion as a result of $5.8 billion
in net client cash outflows, primarily from strategies managed by our U.S. Value team, and broad market
depreciation. Our average AUM and related revenues decreased modestly compared to 2014. Our adjusted
operating margin was 40.3% for the year compared to 44.9% in 2014. The decline was primarily the result
of lower revenues and increased investments in new and existing investment teams. On an adjusted basis,
we earned $2.69 per share in 2015, all of which we distributed in cash to our shareholders through our
regular quarterly dividends and special dividend.
We have and will continue to invest in creating environments for our investment teams that are conducive
to producing superior results on a consistent long-term basis and aligning interests. In 2015, we continued
our long-standing practice of granting equity to our key talent. All of the $31 million of equity granted in
2015 was granted directly to key investment team members further aligning the interests of business
value creators with clients and shareholders. In 2015, we hired Lewis Kaufman and his team to establish
our seventh autonomous investment team, Developing World, and launched their first strategy. While the
investment in the team reduced our margin in 2015, we have created an infrastructure and environment
where the team can focus on generating returns for clients and long-term growth for our shareholders.
Our Developing World strategy is highly active and differentiated from indices and inexpensive substitutes,
which we believe is consistent with what sophisticated investors are seeking from active managers.
Throughout the year, we also made targeted investments in distribution resources to support our teams,
and we continued to build our distribution capabilities abroad, particularly in Europe, Australia and Canada
as our AUM from non-U.S. clients surpassed $14 billion.
We expect markets will continue to be volatile in 2016, and we feel confident that our financial model will
allow us to stay focused on managing our business for the long term.
Sincerely,
Charles (C.J.) Daley, Jr.
Chief Financial Officer
Artisan Partners
FINANCIAL HIGHLIGHTS
P. 32
Assets under management
ended the year at $99.8 billion,
a 7% decline from the
prior year.
A SS E T S U N D E R
M A N AG E M E N T
E N D I N G A SS E T S U N D E R
M A N AG E M E N T
— & —
AV ER AG E A SSE T S
U N D ER M A N AG E M EN T
$ in billions
N E T C L I E N T
C A S H FLO W S
$ in billions
Ending AUM decreased 7% to $99.8 BILLION
Average AUM decreased 1% to $106.5 BILLION
Net client cash outflows of $5.8 BILLION
$105.5
$107.9
$107.9
$99.8
$106.5
$89.5
2013
$7.2
2013
2014
2015
$0.8
2014
$(5.8)
2015
FI N A N C I A L
R E SU LT S
R E V E N U E
$ in millions
A DJ U S T E D
O PE R AT I N G
M A R G I N 1
A DJ U S T E D
N E T I N CO M E 1
$ in millions
2015 ANNUAL REPORT
P. 33
Revenues decreased 3% to $805.5 MILLION
Adjusted operating margin1 contracted 460 basis points to 40.3%
Adjusted net income1 decreased 14% to $197.3 MILLION
Adjusted net income per adjusted share1 of $2.69
$685.8
$828.7
$805.5
2013
2014
2015
42.1%
44.9%
40.3%
2013
2014
2015
$180.3
$228.9
$197.3
2013
2014
2015
1 Operating Margin (GAAP) for the years ended December 31, 2013, December 31, 2014 and December 31, 2015 was
(38.1)%, 37.0% and 35.1%, respectively. Net Income attributable to APAM for the years ended December 31, 2013,
December 31, 2014 and December 31, 2015 was $24.8M, $69.6M and $81.8M, respectively. Net Income (Loss) per
basic and diluted share for the year ended December 31, 2015, was $1.86. See page 37 for a reconciliation of GAAP
to Non-GAAP (“Adjusted”) Measures.
FINANCIAL HIGHLIGHTS
P. 34
Our balance sheet remains strong,
allowing us to continue to return
meaningful capital to shareholders
in the form of a healthy dividend.
C A S H
$ in millions
B O R R O W I N G S
$ in millions
L E V E R AG E
R AT I O 1
$211.8
$182.3
$166.2
2013
2014
2015
$200.0
$200.0
$200.0
2013
0.7x
2014
2015
0.5x
0.5x
2013
2014
2015
1 Calculated in accordance with debt agreements.
C A PI TA L
M A N AG E M E N T
Q UA R T E R LY
D I V I D E N D R AT E
S PE C I A L A N N UA L
D I V I D E N D S
TO TA L Q UA R T E R LY
& S PE C I A L A N N UA L
D I V I D E N D S
2015 ANNUAL REPORT
P. 35
Paid quarterly dividends of $0.60 per share of Class A common stock
Paid annual special dividend in 2016 of $0.40 per share of Class A common stock
$0.55
$0.60
2014
2015
$0.95
$0.40
$1.631
2014
2015
2016
$3.04
$3.20
$2.80
3Q13 / 4Q13 / 1Q14
2Q14 / 3Q14 / 4Q14 / 1Q15
2Q15 / 3Q15 / 4Q15 / 1Q16
NOTE: Time periods noted above represent the period in which the dividends were paid.
1 The amount of our initial special annual dividend reflected strong earnings in 2013 and excess cash on the balance
sheet, including cash raised in the March 2013 initial public offering.
FINANCIAL HIGHLIGHTS
P. 36
G A A P CO N S O L I DAT E D
S TAT E M E N T S O F
O PE R AT I O N S
(in millions, except share
and per share data)
REVENUES
OPERATING EXPENSES
For the Year Ended December 31,
2015
2014
2013
$805.5
$828.7
$ 685.8
TOTAL COMPENSATION AND BENEFITS
414.3
415.0
856.4
OTHER OPERATING EXPENSES
108.8
106.8
90.6
TOTAL OPERATING EXPENSES
523.1
521.8
947.0
TOTAL OPERATING INCOME (LOSS)
282.4
306.9
(261.2)
NON-OPERATING INCOME (LOSS)
INTEREST EXPENSE
(11.7)
(11.6)
(11.9)
OTHER NON-OPERATING INCOME (LOSS)
(11.8)
(7.8)
TOTAL NON-OPERATING INCOME (LOSS)
(23.5)
(19.4)
65.4
53.5
INCOME (LOSS) BEFORE INCOME TAXES
258.9
287.5
(207.7)
PROVISION FOR INCOME TAXES
46.8
48.8
26.4
NET INCOME (LOSS) BEFORE NONCONTROLLING INTERESTS
212.1
238.7
(234.1)
LESS: NONCONTROLLING INTERESTS—ARTISAN PARTNERS HOLDINGS
130.3
173.1
(269.6)
LESS: NONCONTROLLING INTERESTS—LAUNCH EQUITY
—
(4.0)
10.7
NET INCOME ATTRIBUTABLE TO ARTISAN PARTNERS ASSET MANAGEMENT INC.
$ 81.8
$ 69.6
$ 24.8
PER SHARE DATA
NET INCOME (LOSS) AVAILABLE TO CLASS A COMMON STOCK PER BASIC AND
DILUTED SHARE
$ 1.86
$ (0.37)
$ (2.04)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OF CLASS A COMMON
STOCK OUTSTANDING
35,448,550
27,514,394
13,780,378
R E CO N C I L I AT I O N O F
N O N - G A A P (“A DJ U S T E D ” )
FI N A N C I A L M E A SU R E S
(unaudited, in millions,
except per share data)
2015 ANNUAL REPORT
P. 37
For the Year Ended December 31,
2015
2014
2013
NET INCOME ATTRIBUTABLE TO ARTISAN PARTNERS ASSET MANAGEMENT INC. (GAAP)
$ 81.8
$ 69.6
$ 24.8
ADD BACK: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS—
ARTISAN PARTNERS HOLDINGS
130.3
173.1
(269.6)
ADD BACK: PROVISION FOR INCOME TAXES
46.8
48.8
26.4
ADD BACK: PRE-OFFERING RELATED COMPENSATION—SHARE-BASED AWARDS
42.1
64.7
404.2
ADD BACK: PRE-OFFERING RELATED COMPENSATION—OTHER
ADD BACK: OFFERING RELATED PROXY EXPENSE
ADD BACK: NET LOSS ON THE TAX RECEIVABLE AGREEMENTS
LESS: NET GAIN ON THE VALUATION OF CONTINGENT VALUE RIGHTS
—
—
12.2
—
—
0.1
4.2
—
143.0
2.9
—
49.6
LESS: ADJUSTED PROVISION FOR INCOME TAXES
115.9
131.6
101.8
ADJUSTED NET INCOME (NON-GAAP)
$197.3
$228.9
$ 180.3
AVERAGE SHARES OUTSTANDING
CLASS A COMMON SHARES
35.4
27.5
13.8
ASSUMED VESTING, CONVERSION OR EXCHANGE OF:
UNVESTED CLASS A RESTRICTED SHARE-BASED AWARDS
CONVERTIBLE PREFERRED SHARES OUTSTANDING
3.1
—
2.1
0.4
0.9
2.3
ARTISAN PARTNERS HOLDINGS UNITS OUTSTANDING (NONCONTROLLING INTEREST)
35.0
42.2
53.9
ADJUSTED SHARES
73.5
72.2
70.9
ADJUSTED NET INCOME PER ADJUSTED SHARE (NON-GAAP)
$ 2.69
$ 3.17
$ 2.54
OPERATING INCOME (LOSS) (GAAP)
$282.4
$306.9
$(261.2)
ADD BACK: PRE-OFFERING RELATED COMPENSATION—SHARE-BASED AWARDS
42.1
64.7
404.2
ADD BACK: PRE-OFFERING RELATED COMPENSATION—OTHER
ADD BACK: OFFERING RELATED PROXY EXPENSE
—
—
—
0.1
143.0
2.9
ADJUSTED OPERATING INCOME (NON-GAAP)
$324.5
$371.7
$ 288.9
ADJUSTED OPERATING MARGIN (NON-GAAP)
40.3%
44.9%
42.1%
DISCLOSURES
P. 38
F O R WA R D - LO O K I N G
S TAT E M E N T S
I N V E S T M E N T
PE R F O R M A N C E
FI N A N C I A L
I N F O R M AT I O N
T R A D E M A R K
N O T I C E
Certain information in this presentation, and other written or oral statements made by or on behalf of Artisan Partners, are
“forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and
developments and the company’s 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. These
forward-looking statements are only predictions based on current expectations and projections about future events. These
forward-looking statements are subject to a number of risks and uncertainties, and there are important factors that could
cause actual results to differ materially from the results expressed or implied by the forward-looking statements. Among the
important factors that could cause actual results to differ materially from those indicated by such forward-looking statements
are 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, 2015, filed with the SEC on February 25, 2016.
We measure the results of our “composites,” which represent the aggregate performance of all discretionary client accounts,
including mutual funds, invested in the same strategy except those accounts with respect to which we believe client-
imposed 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 accounts, which represented approximately 9.5% of our assets under management at
December 31, 2015, are maintained in separate composites, which are not presented in these materials).
Results for any investment strategy described herein, and for different investment products within a strategy, are affected by
numerous factors, including different material market or economic conditions; different investment management fee rates,
brokerage commissions and other expenses; and the reinvestment of dividends or other earnings. The returns for any
strategy may be positive or negative, and past performance does not guarantee future results. Composite returns presented
net-of-fees were calculated using the highest model investment advisory fees applicable to portfolios within the composite.
Fees may be higher for certain pooled vehicles and the composite may include accounts with performance-based fees. In
these materials, we present “Value-Added,” which is the amount in basis points by which the average annual gross composite
return of each of our strategies has outperformed or underperformed the market index most commonly used by our clients
to compare the performance of the relevant strategy. The market indices used to compute the value added for each of our
strategies are as follows: Non-U.S. Growth Strategy/Non-U.S. Value Strategy—MSCI EAFE Index; Global Equity Strategy/Global
Opportunities Strategy/Global Value Strategy—MSCI ACWI Index; Global Small-Cap Growth Strategy—MSCI ACWI Small Cap
Index; Non-U.S. Small-Cap Growth Strategy—MSCI EAFE Small Cap Index; U.S. Mid-Cap Growth Strategy/U.S. Mid-Cap Value
Strategy—Russell Midcap® Index; U.S. Small-Cap Growth Strategy/U.S. Small-Cap Value Strategy—Russell 2000® Index; Value
Equity Strategy—Russell 1000® Index; Developing World Strategy/Emerging Markets Strategy—MSCI Emerging Markets
Index; High Income Strategy—BofA Merrill Lynch High Yield Master II Index. Unlike the BofA Merrill Lynch High Yield Master ll
Index, the Artisan High Income Strategy may hold loans and other security types. At times, this causes material differences in
relative performance.
None of the information in these materials constitutes either an offer or a solicitation to buy or sell any fund securities, nor is
any such information a recommendation for any fund security or investment service. The funds and strategies may not be
available to all investors in all jurisdictions.
Throughout these materials, we present historical information about our assets under management and our average assets
under management for certain periods. We use our information management systems to track our assets under management
and we believe the information in these materials regarding our assets under management is accurate in all material respects.
We also present information regarding the amount of our assets under management sourced through particular distribution
channels. The allocation of assets under management sourced through particular distribution channels involves estimates
and the exercise of judgment. We have presented the information on our assets under management sourced by distribution
channel in the way in which we prepare and use that information in the management of our business. Data sourced by
distribution channel on our assets under management are not subject to our internal controls over financial reporting.
MSCI Inc. is the owner of all copyrights relating to the MSCI indices and is the source of the performance statistics of these
indices that are referred to in these materials. MSCI makes no express or implied warranties or representations and shall have
no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or
used to create indices or financial products. This report is not approved or produced by MSCI. Russell Investment Group is the
source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related
thereto. This is a presentation of Artisan Partners. Russell Investment Group is not responsible for the formatting or
configuration of this material or for any inaccuracy in Artisan Partners’ presentation thereof. The BofA Merrill Lynch High Yield
Master II Index is owned by BofA Merrill Lynch and used with permission. BofA Merrill Lynch is licensing the BofA Merrill Lynch
indices “as is,” makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or
completeness of the BofA Merrill Lynch indices or any data included in, related to, or derived there from, assumes no liability
in connection with their use, and does not sponsor, endorse, or recommend Artisan Partners, or any of its products or services.
Copyright 2016 Artisan Partners. All rights reserved. This presentation may not be reproduced in whole or in part without
Artisan Partners’ permission.
Artisan Partners
2015 ANNUAL REPORT
P. 39
M A N AG E M E N T T E A M
Eric Colson
President and Chief Executive Officer
Charles (C.J.) Daley, Jr.
Executive Vice President, Chief Financial Officer and Treasurer
James Hamman, Jr.
Executive Vice President
Sarah Johnson
Executive Vice President, Chief Legal Officer and Secretary
B OA R D O F D I R E C TO R S
Dean Patenaude
Executive Vice President
Gregory Ramirez
Executive Vice President
Eric Colson
Chairman of the Board
Matthew Barger
Independent Director
Seth Brennan
Independent Director
Tench Coxe
Independent Director
Stephanie DiMarco
Independent Director
Jeffrey Joerres
Independent Director
Andrew Ziegler
Lead Director