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_Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Jason Gottlieb, CEO; and C.J. Daley, CFO. Following these remarks, we will open the line for questions. Our latest results and investor presentation are available on the Investor Relations section of our website. Before we begin today, I would like to remind you that comments made during today's call including responses to questions may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed in the statement, and we assume no obligation to update or revise any of these statements following the presentation. In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and supplemental materials, which can be found on our Investor Relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any artisan investment product or a recommendation for any investment service. I will now turn the call over to Jason.

Welcome to the Artisan Partners Asset Management Business Update and Earnings Call. Today's call will include remarks from Jason Gottlieb, CEO; and C.J. Daley, CFO. Following these remarks, we will open the line for questions. Our latest results and investor presentation are available on the Investor Relations section of our website. Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed in the statements, and we assume no obligation to update or revise any of these statements following the presentation. In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and supplemental materials, which can be found on our Investor Relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I will now turn it over to Jason.

Thank you for joining the call today. At Artisan Partners, our purpose is to generate and compound wealth for our clients over the long term. We do so by maintaining an ideal home for investment talent, providing a unique combination of autonomy, degrees of freedom, resources and support. Our model has proven repeatable over time as we have steadily expanded our capabilities across equities, credit and alternatives. Across a wide range of market environments, we have maintained our focus on high value-added investing, driving positive outcomes for both our clients and our shareholders. Long-term investment performance remained strong across our platform with 74% of our AUM outperforming their benchmarks over 3 years, 76% over 5 years and 99% over 10 years gross of fees. All 12 Artisan strategies with track records over 10 years have outperformed their benchmarks since inception net of fees. These 12 strategies have compounded capital at average annual rates between 6% to nearly 13% and have exceeded their benchmarks by an average of 202 basis points annually, net of fees. Highlighting our track record of positive long-term investment outcomes, 2 of our investment teams were recently recognized by Morningstar and Lipper for investment excellence. Morningstar nominated the Global Value team [indiscernible] O'Keefe for the 2026 Morningstar Award for investing excellence, outstanding equity portfolio manager. Lipper named the team's global value fund institutional class, the best fund in its global large-cap value funds category for the 3-, 5- and 10-year periods ended December 31, 2025. Lipper also named Select Equity Fund institutional class, the best fund in its global multi-cap value funds category for the trailing 3-year period ended December 31, 2025. Lipper also named the Msite's Capital Group's global unconstrained fund institutional class as the best fund in its global income funds category over the trailing 3-year period ending December 31, 2025. External recognition is not our goal, but the consistency with which Artisan Partners has earned accolades like these across time, teams and asset classes validates the quality of our platform and the repeatability of our business model for both talent and clients. Congratulations to the Global Value team and the Msite's Capital Group on these recent recognitions. Shorter term, trailing 1-year performance has been weighed down by underperformance in a couple of our largest equity strategies, all of which have strong long-term track records. Turning to Slide 4. Firm-wide net outflows in the first quarter were $3.1 billion. Outflows were concentrated in a few equity strategies where we saw clients de-risking, reallocating after periods of asset class outperformance and some shifting to passive alternatives. Those outflows masked positive business developments across many parts of the platform. Year-to-date, we have net inflows in 13 of our investment strategies. The sustainable emerging market strategy raised $250 million in the first quarter, and assets under management are nearing $3 billion. We have continued our multiyear success in growing our credit businesses with $800 million of net inflows in the first quarter. This was our 15th consecutive quarter of positive credit flows. In Alternatives, we raised $300 million in the first quarter, primarily in the global unconstrained strategy, where we continue to build a realizable pipeline. We expect to see continued strong business development in credit and alternatives, while the backdrop in equities is more challenging and difficult to predict. Our teams have been operating efficiently during a recent market volatility. At the end of last week, our AUM was back up to nearly $184 billion, near all-time high that we achieved in late February. Our business and financial model allows us to remain focused on delivering high value-added investment outcomes for clients servicing our existing clients while actively developing new client opportunities across channels globally. Slide 5 highlights our methodical approach to expanding our platform with new talent and investment capabilities. In the first quarter, we onboarded Grandview Property Partners, real estate private equity investment firm specializing in U.S. middle market assets and laid the groundwork to launch the team's next flagship fund later this year. We also added key distribution talent in EMEA and the intermediate wealth channel and filed an exemptive relief application with the SEC to offer ETF share classes of Artisan mutual funds. These investments build on success we are seeing with additional distribution resources accessing the intermediate wealth channel, in particular, and the broadening and modernizing of our investment vehicle capabilities with custom credit solutions and model delivery. The asset management landscape remains dynamic, and we are actively exploring opportunities to expand the breadth of our platform. We are looking at a full range of opportunities from individual lift outs to larger acquisitions. Our platform remains differentiated and compelling for great investment talent, and we have more ways to access, resource, support talent than ever before. I will now turn it over to C.J. to review our recent financial results.

Thanks, Jason. Our complete GAAP and adjusted results are detailed in our earnings release. We exited 2025 with record assets under management, a new all-time high in quarterly revenue and our second highest annual revenues and earnings. As of March 31, 2026, assets under management were $173 billion, down 4% from the December quarter and up 7% year-over-year. Average AUM was $182 billion, up 1% sequentially and up 9% compared to the prior year quarter. While AUM declined sharply in March due to market conditions, it has largely recovered in April, as Jason mentioned. Revenues were $303 million, down 10% from the December quarter and up 9% compared to the prior year quarter. The sequential decline was primarily due to the expected absence of performance fees as the December quarter included $29 million performance fees realized across 6 strategies, with the majority of our performance fee opportunities measured and realized annually in that period. In addition, approximately $6 million of the sequential decrease in revenue was due to 2 fewer days in the first quarter of 2026. Our weighted average fee rate for the quarter was 67 basis points, down from the December quarter due to the absence of performance fees. Adjusted operating expenses increased 4% compared to the December quarter, primarily due to the addition of expenses of Grandview Property Partners, seasonal expenses and the impact of long-term compensation expense. Our full year 2026 expense guidance remains unchanged. Excluding approximately $20 million of incremental fixed expenses related to long-term incentive compensation and Grandview, we continue to expect fixed expenses to increase at low single-digit rate in 2026. Compared to the prior year quarter, adjusted operating expenses increased 11%, driven primarily by higher variable incentive compensation associated with increased revenues. As a result, adjusted operating income decreased 30% sequentially and increased 6% year-over-year. The decline in margin compared to the prior year quarter was primarily a result of the addition of Grandview results. Adjusted net income per adjusted share declined 31% from the December quarter and increased 5% compared to the prior year quarter, consistent with operating income trends. In our non-GAAP measures, nonoperating income includes only interest income and expense. While valuation changes in our seed investments impact shareholder economics, we exclude these changes from adjusted results to provide greater transparency into our core operating performance. Our balance sheet remains strong with $271 million in cash. During the first quarter, we redeemed approximately $50 million of seed capital, reducing seed investments on the balance sheet to $110 million. Proceeds from seed capital redemptions are included in cash available for corporate purposes, reinvestment or potential return to shareholders through our year-end special dividend. Consistent with our dividend policy, our Board of Directors declared a quarterly dividend of $0.77 per share for the March 2026 quarter, representing a 24% decrease from the prior quarter and a 13% increase year-over-year. The sequential decline reflects lower cash generation due primarily to the absence of performance fees and seasonal expense patterns in the first quarter. After funding the quarterly dividend, we retain approximately $150 million of excess capital to support organic growth initiatives, evaluate potential M&A opportunities or return to shareholders. That concludes my prepared remarks. I will now turn the call back to the operator.

[Operator Instructions] Our first question today comes from Bill Katz from TD Cowen.

So first question, I guess, in your prepared comments, it's also in the commentary yesterday with the release. You mentioned just sort of the equity attrition. I was just wondering where do you think we stand in terms of that reallocation. And then within the $182 billion that you cite -- $184 billion, excuse me, that you cited to last week, maybe frame sort of what you're seeing in terms of that equity attrition. And then maybe the broader question on the institutional pipeline at larges. Maybe talk about how that has been reshaped a little bit between EM and credit versus what you might know on the equity side.

Bill, I'll just talk about the equity business for a second. There were 2 really primary drivers, the first one was just the rebalancing that we experienced across the international strategies that we have given the strength in the EV market being up 30% relative to still a relatively strong U.S. market. We experienced it across a number of teams and within our international value franchise, in particular, just given the size and the nature of their business. As you know, David and the International Value team have been closed for -- soft closed for quite a long time. but he's always been able to manage the capacity and just the flow dynamics to sort of neutral to a slight forward lean, we would expect that to remain in place. Everything that we have seen in that book of business has been very much rebalance oriented. There hasn't been any termination activity. The other piece of it is coming from our growth business, which is another, obviously, large component of our AUM. And when you look at that, there's a lot of underlying dynamics that are occurring. The first one is our global opportunity strategy remains a little bit challenged when it comes to some shorter and intermediate-term performance. and that is causing some headwinds and challenges with some of our institutional relationships globally. But I would point out that there's actually a lot of interesting and important positive developments that are occurring inside of that business. First and foremost, the franchise fund that we launched about a year or so ago, raised net $400 million in flows in the quarter from a global client that's getting us pretty close to $1 billion in AUM there. The Mid-Cap Growth strategy, which is another large strategy on that team, has seen a very meaningful performance turnaround that began in late '24 really, started accelerating into '25 and we're continuing to see it in 2016 that we think will continue to help bolster that. And global discovery, which is another meaningful opportunity within that franchise, is also seeing really good pipeline activity given their stable and good long-term performance. And so that's really what we're seeing from an equity perspective. It's been primarily institutionally focused given the rebalance and some of the challenges coming from global opportunities. When you look at emerging markets, we're actually seeing really good opportunities. As you all know, this was an asset class that was left for dead up until 2025. We've seen some really good performance coming from not only the asset class, but importantly from our teams, sustainable emerging markets, in particular, the $250 million flow that we saw for the quarter is really -- I think, is the beginning of what should be a good path to being able to crystallize the great performance that the team has been able to put up over the course of the last several quarters. And we would continue to believe that, that will be a good opportunity for us as we look out as it relates to the pipeline.

Okay. And as a follow-up, sort of we also ended the commentary just in terms of the -- maybe the pipeline for team lift-outs and acquisitions. I appreciate just sort of working on Grandview right now. How does that look today, maybe where you were either a year ago or even last quarter in terms of nature of the pipeline, where it is seasoned and where are you sort of leaning into in terms of incremental opportunity?

Yes. So as I had mentioned in previous calls, our investment strategy group and the broader management team is operating extremely efficiently, not only with the existing platform and franchises, but certainly, we've been working aggressively with the external opportunity set. And there's really 2 areas in particular that we're focused on. It's something that we've talked about for a little while, which is the ability to expand our credit business and our ability to expand our alternatives platform. There's really good opportunities that we're seeing to expand more traditional credit globally, so much so that we think there's a strong possibility that we could get something done by the end of the year. And so we're pretty excited about that. But as I've said in the past, you never say it's done until it's done, and we see strange behavior and activity always happens near the end of the end of the road when we cross that Rubicon, but we still feel very good about where we're at, and we think this will be a big opportunity for our platform. When you look at the M&A landscape, again, we're seeing a really robust pipeline. It's coming in all the areas that we talked about, differentiated credit, secondaries in both private equity as well as real assets. Private credit, not surprisingly, is becoming incrementally a little bit more interesting. It's an area that we've sort of shied away from given the lack of what we've seen from a cycle perspective. It's hard to tell whether what we're hearing and seeing is truly a cycle or if it's just idiosyncratic situations happening, but we're very focused on having good conversations there. And so I would -- in terms of where the pipeline looks and how it feels relative to past, I think it's incrementally gotten a little bit stronger. And clearly, we feel very good about the forward lean with this opportunity to get something done to globalize credit. And it's also important to point out that we're constantly evaluating and doing a lot of R&D opportunities with our existing businesses. And there are incremental opportunities. There's 2 in particular that we're working through. And if they come to fruition, we think they could be very meaningful and interesting opportunities, but they're still -- it's in the R&D phase. So it's a little early to discuss those.

[Operator Instructions] Our next question comes from John Dunn from Evercore ISI.

I just was wondering, are there any institutional client segments that historically you hadn't done much with that you're targeting now that you have a bunch of newer strategy areas.

I don't think institutionally, John, there's any new client segment that hasn't been tapped or we don't have a really good handle on. I think the majority of where we're seeing opportunity is in the intermediate wealth space. We've built out the platform in terms of the people, the capabilities, both in the U.S. and more recently, we've done some recruiting and hiring and onboarding in both the U.K. market as well as the European market and as well as in EMEA that we think will -- and is, frankly, even over the short term, started to yield some interesting results. The intermediate wealth platform being able to have a slight positive flow for the quarter, I think, is a really good indication. You look at the -- you sort of break the flow pattern down a little bit between gross in and gross out. It was our second best gross inflow quarter dating back to, I think, the first or second quarter of 2021 when there was a lot of equity activity. And so we feel good that there's a correlation between the quality and the talent that we've brought on and the outcome that we're seeing. From an inflow perspective, we obviously have to work through a few of the equity strategies that we talked about from a rebalancing as well as from a performance perspective. But what we're seeing is from an intermediate wealth perspective, feels very good. And institutionally, we just have to continue to block and tackle with some of our larger relationships.

Got it. And then maybe just on that, is there anything you can point to as far as like line of sight to any larger mandates that might be looking to exit? And just maybe a wraparound of the regionally how the institutional side, the things impacting demand in the different regions?

I don't have a strong perspective when it comes to line of sight. We're heavily engaged with all of our institutional relationships, the teams that sit alongside our investment franchises that service are certainly well equipped to handle and provide us with a little intel. And we just don't see any direct line of sight when it comes to massive outflows or massive inflows. I think it's been just this steady state of let's make sure that we stay close to clients, certainly when performance is a little bit more challenging and continue to build on that relationship, recognizing that we have work to do. Where we have good, strong forward lean when it comes to performance. We're doing our best to lean in there, and we are seeing some green shoots in those areas. And so it could be a bit of an exchange of kicks where we'll have some attrition in areas where we have some weaker performance. But as I've mentioned on my initial commentary, we have some really great capabilities. I'd mentioned Global Value. I'm sure you've seen some of the performance that's coming out of [indiscernible] group and the global equity team, both international and global. Our sustainable emerging markets franchise that's getting a lot of looks institutionally as well. And so we feel good about the positioning, recognizing that, inevitably, you're always going to have a strategy or 2 that's got a little bit of a challenge, and we're doing our best to maintain our discipline around those strategies.