A Midwestern asset manager's third generation strategies are dominating its inflows.

Eric Richard Colson Artisan Partners Asset Management, Inc. President, CEO

On October 29, the team at Milwaukee, Wisconsin-based Artisan Partners Asset Management [profile] released their Q3 2019 earnings, revealing total AUM (as of September 30, 2019) of $112.5 billion, down by one percent from the end of Q2 2019 and down by 3.5 percent compared to from the end of Q3 2018. The change in AUM over the one year period was due to $7.3 billion in net outflows, partially offset by $3.2 billion in market appreciation.

The firm's total net outflows YTD as of September 30, 2019 totaled $2.3 billion in which 63 percent of gross client cash outflows came from 1st generation strategies which includes U.S. small-cap growth, non-U.S. growth, U.S. mid-cap growth, U.S. mid-cap value and non-U.S. value strategies. While 1st and 2nd generation strategies had net outflows, Artisan's 3rd generation strategies — which include high income, developing world, thematic, credit opportunities, global discovery, thematic long/short, and non-U.S. small-mid growth strategies — had net inflows of $3.3 billion.

Eric Colson, chairman and CEO of APAM, told analysts on Artisan's earnings call (as transcribed by Seeking Alpha) that the firm's 3rd generation strategies have a "higher tilt towards the intermediary or wealth management segment." Colson was responding to a question from Robert Lee, a managing director at KBW.

APAM matched analysts' expectations of Q3 non-GAAP earnings per share of $0.70 while beating GAAP earnings per share expectations by $0.05 at $0.71.

Revenues of $202.9 million also beat estimates by $0.44 million. Q3 2019 revenues increased one percent compared to Q2 2019 revenues of $200.7 million, though revenues decreased 4.7 percent compared to Q3 2018 revenues of $212.8 million. 

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